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Newmont Gets Rights to Explore Yukon Gold District
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Gold miner, Newmont (NEM - Free Report) has landed an agreement to explore and develop a highly prospective gold district in Canada’s Yukon Territory through a private placement with Goldstrike Resources. The deal allows Newmont to earn up to 80% equity in Goldstrike’s Plateau property through exploration investment.
The Plateau property is a newly discovered gold system comprising over 2,000 claims covering 350 square kilometers. Newmont noted that initial drill results have been promising and high grade gold mineralization has been identified over a 50 kilometer strike length that remains largely unexplored.
The deal reinforces Newmont’s long-term growth pipeline and leverages its exploration capabilities. The company has added over 125 million ounces of gold reserves by the drill bit over the last 16 years. Roughly three-quarters of its reserves are located in North America and Australia.
Newmont remains committed to invest in projects that combine the best value with the most favorable technical and geopolitical attributes. The company expects to beef up its exploration and advanced projects expenditure by 22% this year. Around two-thirds of this expenditure is expected to fund more brownfields and greenfields exploration.
Newmont’s shares have outperformed the Mining-Gold industry in the past one year, helped by its cost and debt reduction and operational efficiency improvement actions. The company’s shares have gained 27.5% over this period compared with the industry’s gain of 10.7%.
Newmont recorded attributable gold production of 4.9 million ounces in 2016, up 7% year over year. The company sees attributable gold production to be in the range of 4.9–5.4 million ounces in 2017. Production at Merian and Long Canyon mines is expected to compensate the impact of declines at Twin Creeks and Yanacocha.
Newmont remains committed to deleverage its balance sheet. The company repaid debt worth $1.3 billion in 2016 utilizing proceeds from the sale of its stake in PT Newmont Nusa Tenggara ("PTNNT").
Strong operational performance is also allowing the company to generate positive free cash flow. The company’s free cash flow more than doubled year over year to $784 million in 2016.
While Newmont reduced its gold all-in sustaining costs (AISC) by 2% year over year to $912 per ounce in 2016, the company expects AISC to increase this year to between $940 and $1,000 per ounce. The increase is partly due to a shift in the allocation of cost between copper and gold production and higher investment in advanced project and exploration. Gold AISC is expected to further increase to $950 and $1,050 per ounce in 2018, per the company’s guidance.
BHP Billiton has an expected long-term growth of 5.6%.
Rio Tinto has an expected earnings growth of 75.4% for the current year.
Ternium has an expected long-term growth of 18.4%.
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Newmont Gets Rights to Explore Yukon Gold District
Gold miner, Newmont (NEM - Free Report) has landed an agreement to explore and develop a highly prospective gold district in Canada’s Yukon Territory through a private placement with Goldstrike Resources. The deal allows Newmont to earn up to 80% equity in Goldstrike’s Plateau property through exploration investment.
The Plateau property is a newly discovered gold system comprising over 2,000 claims covering 350 square kilometers. Newmont noted that initial drill results have been promising and high grade gold mineralization has been identified over a 50 kilometer strike length that remains largely unexplored.
The deal reinforces Newmont’s long-term growth pipeline and leverages its exploration capabilities. The company has added over 125 million ounces of gold reserves by the drill bit over the last 16 years. Roughly three-quarters of its reserves are located in North America and Australia.
Newmont remains committed to invest in projects that combine the best value with the most favorable technical and geopolitical attributes. The company expects to beef up its exploration and advanced projects expenditure by 22% this year. Around two-thirds of this expenditure is expected to fund more brownfields and greenfields exploration.
Newmont’s shares have outperformed the Mining-Gold industry in the past one year, helped by its cost and debt reduction and operational efficiency improvement actions. The company’s shares have gained 27.5% over this period compared with the industry’s gain of 10.7%.
Newmont recorded attributable gold production of 4.9 million ounces in 2016, up 7% year over year. The company sees attributable gold production to be in the range of 4.9–5.4 million ounces in 2017. Production at Merian and Long Canyon mines is expected to compensate the impact of declines at Twin Creeks and Yanacocha.
Newmont remains committed to deleverage its balance sheet. The company repaid debt worth $1.3 billion in 2016 utilizing proceeds from the sale of its stake in PT Newmont Nusa Tenggara ("PTNNT").
Strong operational performance is also allowing the company to generate positive free cash flow. The company’s free cash flow more than doubled year over year to $784 million in 2016.
While Newmont reduced its gold all-in sustaining costs (AISC) by 2% year over year to $912 per ounce in 2016, the company expects AISC to increase this year to between $940 and $1,000 per ounce. The increase is partly due to a shift in the allocation of cost between copper and gold production and higher investment in advanced project and exploration. Gold AISC is expected to further increase to $950 and $1,050 per ounce in 2018, per the company’s guidance.
Newmont currently carries a Zacks Rank #3 (Hold).
Newmont Mining Corporation Price and EPS Surprise
Newmont Mining Corporation Price and EPS Surprise | Newmont Mining Corporation Quote
Stocks to Consider
Better-placed companies in the basic materials space include BHP Billiton Limited (BHP - Free Report) , Rio Tinto plc (RIO - Free Report) and Ternium S.A. (TX - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
BHP Billiton has an expected long-term growth of 5.6%.
Rio Tinto has an expected earnings growth of 75.4% for the current year.
Ternium has an expected long-term growth of 18.4%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>