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Gold Miners See Falling 1Q Profit

Income Down as Production Cost Rise and Metal Prices Fall

Written by Luke Burgess
Posted April 30, 2009

 

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Some of the world's top gold miners experienced significantly lower profits during the first quarter of 2009 as production costs increased and the market experienced a 2% decline in the average price of gold.

Barrick Gold [NYSE: ABX, TSX: ABX], the world's largest gold producer, reported a 28% drop in first-quarter profit to $371 million ($0.42 per share) from $514 million ($0.58 per share) during the same period a year earlier. The Toronto-based company said that it produced 1.76 million ounces of gold in the first quarter at a total cash cost of $484 an ounce, an increase from $395 a year earlier. Last year, the company produced 7.66 million ounces of gold at a total cash cost of $443 per ounce.

Newmont Mining [NYSE: NEM, TSX: NMC] also reported lower first-quarter profit. Net income tumbled 48% to $189 million ($0.40 per share) compared to $365 million ($0.80 per share) during the same period last year. The first quarter saw equity gold sales of 1.27 million ounces at costs applicable to sales of $435 per ounce. The company is maintaining its previously announced 2009 equity gold sales outlook of between 5.2 and 5.5 million ounces at costs applicable to sales of between $400 and $440 per ounce.

Other major gold mining companies such as Goldcorp [NYSE: GG, TSX: G] and Kinross Gold [NYSE: KGC, TSX: K] will report first quarter financial results next week.

- luke

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