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Wednesday, October 29, 2008

Newmont Mining Corp. Third-quarter Profits Fall by over 50 Percent

Newmont Mining Corp. (NEM) released its third-quarter profits on Wednesday, and said profits plunged by over 50 percent, as shipment of gold and copper declined and production cost rose.

The world's second-largest gold miner had overall revenue drop by 13.9 percent to $1.39 billion.

For the quarter net income fell to $196 million, a huge plunge from the $397 million the company enjoyed a year ago. Share price also fell from 88 cents a share to 43 cents a share during that same time period.

Also falling significantly was income from continuing operations, which last year stood at 73 cents a share, and in the third quarter dropped to 39 cents a share.

Another problem the company has is the challenges related to costs in developing its Western Australia Boddington project, which Newmont thought would be ready for operation sometime in the middle of 2009. Original projections were for 600,000 to 700,000 ounces of gold to be produced on average over a five-year period.

Most mining companies will continue to suffer until the forced liquidation period coming from the tight credit market is over. Until then, this will be the story for mining companies across the board.

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