Due to poor output at its Mexico mine due to a labor strike, Newmont, the largest gold miner in the world, failed to meet Wall Street expectations for third-quarter profit on Thursday.
The company intends to resume full productivity in the next two to three weeks after reaching a deal with the workers union earlier this month. The company was forced to halt operations at the Penasquito mine in Mexico in June.
Newmont’s quarterly attributable gold output decreased by 13.4% to 1.29 million ounces as a result of the strike.
Despite this, the miner’s shares increased by about 3.1% to $37.9. Some analysts attributed this increase to future gains from Newmont’s acquisition of Australia’s Newcrest for A$26.2 billion.
According to Matthew Miller, senior equities analyst at CFRA Research, “Newmont’s operations are poised to improve starting in the fourth quarter… we anticipate significant synergies and per-share accretion (on the Newcrest deal)”.
After estimating 5.7–6.3 million ounces of gold production in the previous quarter, the miner reduced that estimate to 5.3 million ounces in 2023.
Fears of a forecast decrease contributed to Newmont’s Wednesday stock decline, but now that the negative catalyst has passed, the market is relieved, according to Daniel Morgan, an analyst at Barrenjoey in Sydney.
According to LSEG statistics, the company reported net income of 36 cents per share on an adjusted basis for the July-September quarter, compared with an average estimate of 43 cents from analysts.
