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UPDATE 3-Rising gold production pushes Newmont past profit estimates

* Raises FY gold output to 5 mln-5.4 mln ounces

* Improved margins at new mines offset mature assets - CEO

* Shares up as much as 7.7 pct, hit 5-mth high (Adds details from conference call, updates shares)

July 25 (Reuters) - Newmont Mining Corp handily beat quarterly profit estimates on Tuesday as production improved, more than offsetting the impact of lower realized gold prices, lifting the miner's shares as much as 7.7 percent to a five-month high.

The company also raised the lower end of its full-year production forecast on better yield from its mines in North America and Africa.

"Improved margins at our newest mines are helping to offset our more mature assets, and we continue to fund the high-margin projects to sustain future production," Chief Executive Gary Goldberg said during the earnings call.

Newmont, which kicks off earnings for major gold miners, now hopes to produce 5 million to 5.4 million ounces of gold this year, up from its previous forecast of 4.9 million to 5.4 million ounces.

The production forecast was better than what analysts were expecting, RBC Capital Markets analyst Stephen Walker said, adding that the company's cost performance was also better than expected.

Newmont's all-in sustaining costs, a key benchmark, fell to $884 per ounce in the second quarter ended June 30 from $913 per ounce in the same period last year.

However, Sid Subramani, an analyst with Veritas Investment Research, said he expected those costs to increase in the second half of the year.

Newmont expects to complete expansions at its Northwest Exodus project in Nevada and Tanami project in Australia next year, Goldberg said.

The company has been expanding its operations since the start of the year as gold miners initiate new exploration projects after five years of lull marked by a drop in gold prices.

In May, Newmont invested $109 million for a 19.9 percent stake in Buritica gold project in Colombia, owned by Continental Gold Inc.

Gold production grew 13.3 percent to 1.4 million ounces in the reported quarter, the company said.

Newmont sold the precious metal at $1,250 per ounce on an average in the quarter, lower than $1,257 per ounce a year earlier.

The company's adjusted net income rose to $248 million, or 46 cents per share, from $155 million, or 30 cents a share, a year earlier.

Analysts on average were expecting a profit of 26 cents per share as per Thomson Reuters I/B/E/S.

Revenue rose to $1.88 billion from $1.67 billion a year earlier.

The company's shares were up about 7 percent at $36.30 by 1630 GMT. (Reporting by Anirban Paul and Ahmed Farhatha in Bengaluru; Editing by Amrutha Gayathri)