Newcrest Mining shares take a beating as Newmont Corporation shares head for biggest drop in a year

Shares in Newcrest Mining sunk 4.9 per cent on Friday morning after poor earnings reported by takeover bidder Newmont Corporation left analysts wanting.

Newcrest shares were trading at $26.26 each as at 10:17am after Newmont, which is taking over the Australian miner in a transaction valued at $29 billion, reported earnings that missed analyst estimates following a series of operational setbacks.

Its shares fell 6 per cent in New York for the biggest daily decline since July 2022.

Newmont’s second-quarter gold production dropped 17 per cent from a year earlier after it suspended the large Penasquito mine in Mexico due to a workers’ strike and reported weaker-than-expected performances from its Cerro Negro mine in Argentina and Akyem mine in Ghana.

It also temporarily shuttered a mine in Canada because of nearby wildfires.

Overall production costs rose to $1,472 an ounce, exceeding the average analyst estimate compiled by Bloomberg.

Shares in Newmont, which is working to close its acquisition of Newcrest Mining in the industry’s largest-ever deal, have tumbled 10 per cent this year, even as spot gold prices are up about 8 per cent.

The company reiterated its full-year forecasts on Thursday and said it expects a stronger second half.