By Kitco News

Wednesday July 20, 2016 17:44

(Kitco News) - Newmont Mining Corp.’s (NYSE: NEM) adjusted net income jumped 76% year-on-year in the second quarter as gold prices and production rose, while all-in sustaining costs fell.

The world’s second-largest gold producer late Wednesday listed adjusted earnings of $231 million, or 44 cents per share, up from $131 million, or 26 cents, in the prior-year quarter. The result exceeded analysts’ average of 29 cents per share, as compiled by Bloomberg.

Net income from continuing operations was $50 million, or 9 cents per share, down from $63 million, or 3 cents, a year ago. The main adjustment to net income in the April-June quarter was a $174 million movement in tax valuation allowances and tax adjustments related to prior period earnings, Newmont said.

Gold production was 1.29 million ounces, up from 1.2 million in the second quarter of 2015. New production from Cripple Creek & Victor and higher production at Tanami, Kalgoorlie and Ahafo more than offset declining production at Yanacocha and the sale of Waihi, Newmont said. Copper production slipped to 38,000 tonnes from 42,000 in the prior-year period due to slightly lower grades and throughput at Batu Hijau.

AISC was $876 per ounce for gold and $1.53 per pound for copper, compared to $909 and $1.61 in the same period a year ago. Meanwhile, the average realized gold price rose to $1,260 per ounce from $1,179, although the copper price fell to $1.94 per pound from $2.41.

“We progressed construction of two new mines, and are now building three higher-margin expansion projects including Northwest Exodus – on time and at or below budget,” said Gary Goldberg, president and chief executive officer. “We have also been able to reduce our net debt by nearly 50% since 2013.”

Construction on the Merian mine in Suriname is approximately 90% completed and is on track to reach commercial production in the second half of the year, Newmont said. Long Canyon in Nevada is 80% completed and on schedule for commercial production in the first quarter of next year.

Newmont -- which earlier this summer announced an agreement to sell its interests in PT Newmont Nusa Tenggara, which operates the Batu Hijau copper and gold mine in Indonesia – listed new guidance. Gold production is expected to increase from between 4.7 million and 5 million ounces in 2016 to between 4.9 million and 5.4 million in 2017, then remain stable at between 4.5 million and 5 million ounces through 2020.

AISC is expected to improve to between $870 and $930 per ounce in 2016, holding relatively steady at between $850 and $950 per ounce in 2017.

In the second quarter, the company generated net cash from continuing operating activities of $780 million and free cash flow of $486 million, compared to $441 million and $119 million in the prior-year quarter, according to Newmont’s earnings release.

Newmont left its quarterly dividend at 2.5 cents per share.

For the year to date, Newmont has reduced debt by more than $600 million, the company said. Newmont added that it remains on track to repay $800 million to $1.3 billion of debt between 2016 and 2018, targeting the highest rates and nearest-term maturities first.