Shares of gold producer

Newmont Mining

(NEM) - Get Report

were rallying nearly 8% Wednesday after the firm reported much better-than-expected third-quarter earnings.

Denver-based Newmont said its net income jumped to $397 million, or 88 cents a share, for the three months ended Sept. 30, up from $198 million and 44 cents in the same period a year earlier.

Earnings from continuing operations grew to 72 cents a share from 9 cents. The consensus had been expecting income of 25 cents. Shares of Newmont recently were up $3.62 at $50.06, putting the stock at a new 52-week high.

CEO Richard O'Brien said Newmont will "maintain our focus on operational execution," in the fourth quarter.

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Revenue at the miner rose to $1.65 billion from $1.10 billion a year earlier, with rising revenue per ounce of gold sold offsetting slightly lower volumes.

The company sold 1.61 million ounces of gold during the third quarter, down from just under 1.7 million ounces a year earlier, but the revenue per ounce of gold sold averaged $681, up from $611.

The company also said its production costs rose to $388 per ounce from $318 in the third quarter of 2006. Newmont narrowed its full-year outlook for gold equity sales to between 5.2 million and 5.4 million ounces at a cost of $400 to $430 an ounce.

Earlier in October, Newmont made a bid to purchase exploration and development company

Miramar Mining


, which analysts say could help address the problem of rising costs and the need to replace depleted resources.