The world’s largest gold miner is experiencing some growing pains as it tries to integrate a slew of new assets from its recently completed mega-merger.
Newmont Goldcorp Corp.’s () shares fell after it posted an adjusted profit that was about half what analysts were expecting in a messy second quarter that included its merger with Goldcorp Inc. and the start of a new joint venture with rival Barrick Gold Corp. () in Nevada.
Although there have been “no surprises” in the acquired Goldcorp assets, underinvestment has been an issue throughout the portfolio, Newmont President Tom Palmer told analysts Thursday on an earnings call. “There was not the work done on exploration, there wasn’t the work done on development, and that’s absolutely fundamental in either an open pit or an underground mine.”
Newmont is bringing technical rigor and discipline to the newly acquired mines, said Palmer, who is slated to take over as Newmont’s chief executive officer on Oct. 1. That said, “nothing’s changed in my mind in terms of what we saw during due diligence and what we’ve seen over the first 90 days of operating these operations.”
In its earnings statement, the Greenwood Village, Colorado-based company cited a number of cost pressures that eroded earnings, including:
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