By Claudia Carpenter, Bloomberg News
February 5, 2004
Newmont Mining Corp., the world's biggest gold producer, said fourth-quarter profit doubled as prices soared.
The Denver-based company raised its estimate of proven reserves to a record because of gold's rally.
Net income rose to $153.1 million, or 36 cents a share, from $75.1 million, or 19 cents, a year earlier, the company said in a statement. Revenue rose to $821.4 million from $798.7 million.
Newmont's shares have soared 41 percent in the past year as gold rallied on declines in the dollar against the euro, increasing the metal's appeal as a store of value.
The mining company raised its estimate of proven and probable reserves on Dec. 31, 2003, to a record 91.3 million ounces from 86.9 million a year earlier, based on an assumed gold price of $325 an ounce, up from $300.
"It was a good set of results backed up by a good increase in reserves," said Evy Hambro, who manages $5 billion in mining- company shares, including Newmont's, for Merrill Lynch & Co. in London.
The higher gold-price assumption increased the size of reserves that can be profitably mined.
The stock was the second-best performer last year on the Philadelphia Gold & Silver Index of 12 mining companies. New Orleans-based Freeport McMoRan Copper & Gold Inc. was the top performer on the list.
Newmont said it benefited from reduced sales of future gold production at fixed prices, a practice used as a hedge when prices are falling.
The company had a pretax loss related to such "forward sales" of $1.87 million in the fourth quarter, compared with a loss of $25.5 million a year earlier.
Revenue from gold sales fell to $773.4 million from $777.3 million as a decline in the number of ounces sold outweighed the benefit of higher prices.
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