US stock indexes move higher, Oct. 23-29

The Dow Jones Industrial Average rose 1.5%, or 266.64 points, to close at 17,755.80, and the S&P 500 Index advanced 1.8%, or 36.90 points, to finish at 2,089.41. The Philadelphia Gold & Silver Index dropped 4.8% to 52.25.

Newmont Mining rose 4.5%, or US86¢, to US$19.89 per share. The company unveiled plans to expand its Tanami operations in Australia by building a second decline and more plant capacity. The expansion is expected to add incremental production of 80,000 oz. gold a year; cut all-in sustaining costs by 5–10% in the first five years of production; open access to 2 million oz. profitable production; extend the mine life by three years; and create a platform for exploration drilling. After the expansion, Tanami will produce between 425,000 and 475,000 oz. gold a year during the first five years at AISCs of between US$700 and US$750 per oz.  

Newmont also sold Newmont Waihi Gold in New Zealand to OceanaGold, receiving US$101 million in cash. In the third quarter, Newmont posted US$813 million in operating cash flow, up from US$328 million in the previous year’s quarter, as higher production, sale volume and cost improvements offset lower metal prices. Adjusted net income was US$126 million, or US23¢ per share, compared to US$249 million, or US50¢ per share in the same quarter a year ago. AISCs for gold and copper were US$835 per oz. and US$1.54 per lb., down from US$995 per oz. and US$6.61 per lb. in the third quarter of 2014.

Freeport-McMoRan’s shares fell US39¢ to US$11.63. The company reported a third-quarter net loss attributable to common stock of US$3.8 billion, or US$3.58 per share. After adjusting for net charges of US$3.7 billion, or US$3.43 per share, its adjusted net loss was US$156 million, or US15¢ per share. The US$3.7 billion in net charges related to lower carrying value of oil and gas properties, and other items. Among the company’s goals is a 29% reduction in estimated capital expenses for 2016. In October, the company initiated a plan to reduce operating rates at its Sierrita mine in Arizona. Initially the plan involves operating the mine at half of its current operating rate, but Freeport is also evaluating the economics of a full shutdown. Freeport is also strategically reviewing its oil and gas business. Alternatives include an initial public offering of a minority interest in the business, and a spinoff of assets.