Newmont Mining to release second-quarter earnings

OVERVIEW: The Denver-based mining company has benefited from rising gold prices which have hovered above $900 an ounce. During the second quarter, it continued to work on boosting mill production to a commercial level at its gold mine in Peru and on a new mine being developed in Australia.

Newmont is continuing to negotiate with the Indonesian government about the terms of a work contract. Indonesian officials have accused Newmont of breaching the contract by allowing shares to be pledged to senior lenders but company executives maintain they are in compliance with the contract terms.

In April, the company reiterated 2008 guidance of gold sales ranging from 5.1 million ounces to 5.4 million ounces and costs applicable to sales ranging between $425 an ounce and $450 an ounce.

BY THE NUMBERS: A survey conducted by Thomson Financial concluded analysts forecast, on average, 47 cents a share on revenue of $1.5 billion.

ANALYST TAKE: Analysts say investors have turned to gold mining companies because they consider it a haven during economic instability. Other factors affecting gold prices include falling production, competitive currency devaluations and the creation of wealth in Asia, Citi Investment Research analyst John Hill said in a research note last week.

HSBC Global Research analyst Victor Flores said this week he expects Newmont's second-quarter to be softer than the first-quarter performance in which the company added inventory.

WHAT'S AHEAD: Newmont will continue to work with Indonesian officials to resolve the ongoing contract issues and bring new projects on line. Analysts believe strong demand for gold will continue into the late summer and early fall.

STOCK PERFORMANCE: Newmont's stock has traded between $38.01 and $57.55 a share in the past year. The price rose about 16 percent during the quarter to close June 30 at $52.16 a share.

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