On Friday morning, shares of Newcrest Mining experienced a significant drop of 4.9 per cent, following disappointing earnings reported by Newmont Corporation, the takeover bidder for the Australian mining company. Newmont’s financial results fell short of analyst expectations, leading to a negative impact on Newcrest’s stock performance.
As of 10:17 am, Newcrest shares were trading at $26.26 each, reflecting the market’s reaction to Newmont’s earnings report. Newmont is in the process of acquiring Newcrest Mining in a deal valued at $29 billion, but its recent operational setbacks have created uncertainty among investors.
In New York, Newmont’s shares suffered a significant decline of 6 per cent, marking the largest daily drop since July 2022. The second-quarter gold production for Newmont dipped by 17 per cent compared to the previous year due to operational challenges. The company had to suspend operations at the Penasquito mine in Mexico due to a workers’ strike and faced weaker-than-expected performances from the Cerro Negro mine in Argentina and the Akyem mine in Ghana. Additionally, a Canadian mine had to be temporarily shut down due to wildfires in the vicinity.
The rise in overall production costs to $1,472 per ounce surpassed the average analyst estimate compiled by Bloomberg, adding further pressure on Newmont’s financial performance.
Despite a positive trend in spot gold prices, which increased by approximately 8 per cent, Newmont’s shares have experienced a decline of 10 per cent this year. However, the company remains hopeful for a stronger second half and reaffirmed its full-year forecasts during its latest earnings report.
As the acquisition of Newcrest Mining by Newmont Corporation proceeds, market sentiment and investor confidence will likely be closely monitored, considering the recent challenges faced by Newmont.
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