(Recasts to add details on deal)
July 26 (Reuters) - Newmont Mining Corp, which topped Wall Street estimates for quarterly profit, said on Thursday it would acquire a 50 percent stake in a gold project in Western Canada as miners look for new reserves.
Major gold miners are racing to explore, expand and construct new mines as years of belt tightening have left them with diminishing reserves at their existing mines.
Newmont would pay $275 million to Novagold Resources Inc for its stake in the Galore Creek project. The remaining stake is held by Teck Resources Ltd.
“Galore Creek holds the potential to support decades of profitable copper and gold production in a favorable mining jurisdiction,” Newmont Chief Executive Gary Goldberg said in a statement.
According to Teck Resources, an estimated 8 million ounces of gold and 9 billion pounds of copper could be mined at the project.
Newmont said that while total gold production in the second quarter fell 14 percent to 1.16 million ounces, realized gold prices rose 3.3 percent to $1,292 per ounce.
However, the company reaffirmed its full-year production forecast of between 4.9 million and 5.4 million ounces, which would see it overtake Canadian rival Barrick Gold Corp as the world’s largest gold producer.
Net income attributable to shareholders rose to $292 million, or 54 cents a share, in the quarter ended June 30 from $175 million, or 33 cents per share, a year earlier.
Total sales fell to $1.66 billion from $1.88 billion.
Excluding one-time items, the company earned 26 cents per share, while analysts on average had expected 24 cents a share, according to Thomson Reuters I/B/E/S. (Reporting by Karan Nagarkatti in Bengaluru; Editing by Shailesh Kuber and Arun Koyyur)