DENVER—Newmont Mining on Tuesday said its first-quarter profits more than doubled as its gold prices jumped 22 percent and production increased as a result of its new Australian mine.
The company also said it benefited as copper production more than doubled on higher prices, although costs for producing both metals rose.
The gold mining giant, based in Denver, has taken advantage of growing demand for gold among investors who favor it as a hedge against inflation and as a safer investment than stocks.
Its copper is sold primarily to smelters in Japan, feeding Asia’s demand for the metal used for wiring and pipes in homes, office buildings and in consumer products.
“They’re still seeing positive market fundamentals going forward,” Argus Research analyst Bill Selesky said.
The demand for copper is driven by the global economy but remains weak in the U.S. because of the struggling housing market, he said.
Newmont earned $546 million, or $1.11 per share, up from $189 million, or 40 cents per share a year ago. Not counting gains from lower taxes and other items, it earned 83 cents per share. Analysts expected 79 cents a share excluding special items.
Revenue rose 46 percent to $2.24 billion from $1.54 billion a year ago—beating analysts’ estimates of $2.15 billion.
Newmont said the average price of gold was $1,106 per ounce during the quarter. The cost of producing it rose due to higher mining and milling expenses and lower production from mines in Nevada and Peru. Copper prices averaged $3.33 per pound.
The company mined 158,000 ounces of gold and 14 million pounds of copper at Boddington, its new Australian mine.
Newmont maintained its 2010 forecast for gold production between 5.3 million and 5.5 million ounces. It also has forecast a 15 percent decline in capital spending for the year.
Newmont shares rose 15 cents to $53.34 in morning trading.
