Newmont Sags Most in 9 Months After Cutting Gold-Output Forecast
Newmont Cuts 2019 Gold Output Guidance on Mexican Mine Blockades
(Bloomberg) -- Newmont Goldcorp Corp. fell the most since January as prices of the metal slid and the miner reduced its full-year production forecast amid glitches at assets acquired in its merger with Goldcorp Inc.
Shares of the world’s largest gold-mining company fell 4.7% to $37.06 at 11:28 a.m. in New York. The stock dropped as much as 5.8%, the most intraday since Jan. 14. Bullion prices also weighed on shares, with the metal heading for its biggest loss in more than a month.
Production is expected to be 6.3 million ounces in 2019, Newmont said in its third-quarter earnings statement on Tuesday. The miner had said last month it expects output of 6.5 million ounces. The outlook was affected by snags at Goldcorp assets, including blockades at the Penasquito mine in Mexico and a conveyor fire at Musselwhite in Canada.
The projection may fuel investor concerns over the mega-merger. Chief Executive Officer Tom Palmer took the helm last month, inheriting a company saddled by growing pains as it integrates Goldcorp assets. Those challenges dragged Newmont’s adjusted second-quarter profit to just about half of what analysts were expecting.
For the third quarter, the company reported adjusted earnings of 36 cents a share, missing the average analyst estimate of 37 cents.
“We are cautious on Newmont due to headwinds from asset integration of the underperforming Goldcorp assets, which we believe will outweigh positive news flow from potential synergies,” CIBC analysts including Anita Soni said in a note.
--With assistance from Vinicy Chan.
To contact the reporters on this story: Laura Millan Lombrana in Santiago at lmillan4@bloomberg.net;Aoyon Ashraf in Toronto at aashraf7@bloomberg.net
To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter
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