Newmont breaks record in quarter

Newmont Gold (ngc-n) is the first North American gold producer to have produced 1 million oz. in one 3-month period.

During the second quarter, the company produced 1.03 million oz. It is now working towards its goal of cranking out 4 million oz. for the year.

Production for the first six months was 1.9 million oz. — 34% higher than in the first half of 1996.

Earnings for the second quarter (not including a one-time cost related to the completed merger with Santa Fe Pacific Gold) were US$47.5 million (or 29 cents per share), compared with US$25.7 million (15 cents per share) in the same period last year.

After the one-time charge of US$157.7 million, Newmont Gold recorded a loss of US$69 million (41 cents per share). Newmont Mining (nem-n), 91%-owner of Newmont Gold, recorded a loss of US$64.6 million (41 cents per share).

In another financial move, Newmont went to the market and bought 1.1 million oz. gold to take advantage of hedging contracts it acquired from its merger with Santa Fe.

The company held hedging contracts at US$420 per oz., and expects to gain US$100 million by completing these contracts over the next year.

“The gold market has been caught in a frenzy of fears, and we think this is a time to reassert our confidence in the metal,” says Ronald Cambre, the company’s chairman, who believes the worries over central bank sales are exaggerated.