Gold Miners See Falling 1Q Profit

Some of the world’s top gold miners experienced significantly lower profits during the first quarter of 2009 as production costs increased and the market experienced a 2% decline in the average price of gold.

Barrick Gold [NYSE: ABX, TSX: ABX], the world’s largest gold producer, reported a 28% drop in first-quarter profit to $371 million ($0.42 per share) from $514 million ($0.58 per share) during the same period a year earlier. The Toronto-based company said that it produced 1.76 million ounces of gold in the first quarter at a total cash cost of $484 an ounce, an increase from $395 a year earlier. Last year, the company produced 7.66 million ounces of gold at a total cash cost of $443 per ounce.

Newmont Mining [NYSE: NEM, TSX: NMC] also reported lower first-quarter profit. Net income tumbled 48% to $189 million ($0.40 per share) compared to $365 million ($0.80 per share) during the same period last year. The first quarter saw equity gold sales of 1.27 million ounces at costs applicable to sales of $435 per ounce. The company is maintaining its previously announced 2009 equity gold sales outlook of between 5.2 and 5.5 million ounces at costs applicable to sales of between $400 and $440 per ounce.

Other major gold mining companies such as Goldcorp [NYSE: GG, TSX: G] and Kinross Gold [NYSE: KGC, TSX: K] will report first quarter financial results next week.

– luke