Newmont Mining on Tuesday said its first-quarter profits more than doubled as it took advantage of higher gold and copper prices.
Gold prices have risen nearly 21 percent since the first quarter of 2009 and have continued to climb this month on stronger demand among investors, who favor it as a hedge against inflation and as a safer investment risk than stocks.
Copper prices have nearly doubled in the past year as the strengthening global economy, particularly in China, has bolstered demand. Copper is an important component of electronics and is essential for wiring and pipes in homes and office buildings.
Newmont said it earned $546 million, or $1.11 per share, up from $189 million, or 40 cents per share. Excluding gains from lower taxes and other items, it earned 83 cents per share. Analysts expected 79 cents a share excluding items.
It said 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. It said the cost of producing gold 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.
For 2010, Newmont has forecast gold production to range between 5.3 million and 5.5 million ounces. It maintained that forecast on Tuesday. It also has forecast a 15 percent decline in capital expenditures for the year.
Its shares edged up 41 cents to $53.60 in pre-opening trading.
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