Hedge funds slash bullish wagers on gold over Trump election win
Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
Shares in Newmont Mining was trading higher after hours on Wednesday after the company announced second quarter results that beat analysts estimates.
Following a broad-based sell-off for gold miners during regular trade on the back of a weaker gold price, Newmont shares added 1.8% after the release of its financials. The company is now worth $20.7 billion on the New York Stock Exchange after rising by 118% in 2016.
The world’s number two gold miner by output surprised on revenue, earnings per share and free cash flow as it made the most of an improving gold price.
Denver-based Newmont’s outlook has also improved with the company now expecting attributable gold production to increase from between 4.7 and 5.0 million ounces in 2016 to between 4.9 and 5.4 million ounces in 2017, and remain stable at between 4.5 and 5.0 million ounces through 2020.
Highlights of second quarter results include:
• Net income: Reported GAAP net income attributable to shareholders from continuing operations of $50 million, or $0.09 per share, compared to $63 million, or $0.13 per share in the prior year quarter; achieved adjusted net income1 of $231 million, or $0.44 per basic share, compared to $131 million or $0.26 per share in the prior year quarter
• EBITDA: Achieved adjusted EBITDA2 of $804 million in the second quarter, compared to $692 million in the prior year quarter
• Cash flow: 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
• Attributable production: Produced 1.3 million ounces and 38,000 tonnes of attributable gold and copper, respectively, compared to 1.2 million ounces and 42,000 tonnes in the prior year quarter
• Costs applicable to sales (CAS): Improved gold CAS to $637 per ounce4 compared to $642 per ounce in the prior year quarter, and reported copper CAS of $1.21 per pound unchanged from the prior year quarter
• All-in sustaining costs (AISC)5: Improved gold AISC to $876 per ounce compared to $909 per ounce in the prior year quarter, and improved copper AISC to $1.53 per pound compared to $1.61 per pound in the prior year quarter
• Outlook: Improved 2016 outlook and long term cost outlook; updated outlook excludes Batu Hijau
• Portfolio: Merian, Long Canyon, Cripple Creek & Victor (CC&V) and Tanami projects progressing on schedule and at or below budget. Northwest Exodus has been approved and is expected to reach first gold production in Q3 2016; announced agreement to sell Newmont’s ownership stake in PTNNT
• Shareholder returns: Maintained second quarter dividend of $0.025 per share6
“Newmont’s strong second quarter results included delivering adjusted EBITDA of more than $800 million, free cash flow of $486 million, and announcing the sale of our 48.5 percent stake in PTNNT for total consideration of $1.3 billion including $920 million cash at close.” said Gary Goldberg, President and Chief Executive Officer.
“Consistently strong operational performance has given us the means to strengthen our portfolio and balance sheet, and position Newmont to continue outperforming. 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. We have also been able to reduce our net debt by nearly 50% since 2013.”
