February 19, 2009 / 12:41 PM / 9 years ago

UPDATE 3-Gold miner Newmont's quarterly profit tops view

* Q4 net EPS $0.02 vs year-ago loss of $0.63/shr

* Q4 adjusted EPS $0.26/shr vs Wall St view of $0.25

* Shares rise less than 1 percent in premarket trade (Adds details, CEO and analyst comments, background, byline)

By Euan Rocha

NEW YORK, Feb 19 (Reuters) - Newmont Mining Corp (NEM.N) posted slightly better-than-expected fourth-quarter results on Thursday, as strong gold prices helped offset a sharp decline in copper demand.

Canada’s Kinross Gold (K.TO) and Agnico-Eagle Mines (AEM.TO), which both reported quarterly results on Wednesday, also said plunging base metal prices had eroded some of their profits from gold production.

A widening recession in developed economies and sharp slowdowns in developing markets have hit the global manufacturing sector and hurt demand for base metals like zinc, nickel and copper.

But gold prices have risen significantly in the last three months due to a burgeoning interest in the metal as a haven from risk.

Newmont, the world’s second-largest gold miner, reported net income of $10 million, or 2 cents a share, compared with a year-earlier loss of $289 million, or 63 cents a share.

Excluding special items, the Denver-based company’s quarterly earnings came to 26 cents a share, slightly above Wall Street’s average forecast of 25 cents, according to Reuters Estimates.

“Basically they were in line, and they may say they beat the consensus by a penny or two, but the consensus had been coming down,” said HSBC analyst Victor Flores.

Revenue fell 4.8 percent to $1.34 billion, hurt by the slump in copper sales.

Last month, Newmont said its 2008 gold sales were in line with its previous forecast, and it expected 2009 sales to rise.

Newmont said it expected 2009 gold sales of 5.2 million to 5.5 million ounces, which includes its increased stake in the Boddington gold mine project in Australia.

For 2009, the company has budgeted exploration spending at $165 million to $175 million and capital expenditures $1.4 billion to $1.6 billion.

In 2008, the company’s capital expenditures were about $1.9 billion, as it completed construction of a Nevada power plant, its Yanacocha gold mill in Peru and continued construction of the Boddington project.

Newmont said Boddington was 89 percent complete at the end of 2008, with start-up expected in mid-2009.

Last month AngloGold Ashanti (ANGJ.J) agreed to sell its one-third stake in Boddington to Newmont, which owned the rest of the mine, in a mostly cash deal of up to $1.1 billion.

“We are excited about Boddington’s potential and look forward to capitalizing on this unique opportunity,” Newmont Chief Executive Richard O‘Brien said in a statement.

Assuming completion of the acquisition of AngloGold’s stake in Boddington, Newmont expects average annual gold sales of about 1 million ounces over the first five years of operation, at costs applicable to sales of about $300 per ounce, net of by-product credits.

The company expects 2009 copper sales of 210 million to 230 million pounds, at cost applicable to sales of 65 cents to 75 cents a pound.

Newmont expects 2009 costs applicable to gold sales of $400 to $440 per ounce.

Newmont shares rose 0.5 percent to $43 in trading before the morning bell. (Reporting by Euan Rocha and Steve James; Editing by Lisa Von Ahn)

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