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According to Reuters, mining company Newmont Mining Corp. (NEM - Analyst Report) announced that it will reduce the amount that it plans to spend on its gold mine project in Peru by two-thirds due to delays caused by the Peruvian government and environmental reviews.
The company noted that it will cut the costs on the project for the 2012-2013 period and now expects to spend about $440 million, significantly down from its previous outlook of $1.5 billion. As per the report, Newmont is also considering whether it will go ahead with the project as the mine faced protests by locals with concerns that it will replace the existing alpine lakes with artificial reservoirs, thereby causing pollution.
The company is evaluating the mine plan after it received recommendations to by the Peruvian government and an independent panel of experts, and is expected to respond to the experts' review in June 2012.
Separately, the company has maintained its erstwhile guidance of attributable gold production of approximately 5.2 million ounces for 2013, and expects that this will rise to 7 million ounces by 2017.
Based in Colorado, Newmont Mining Corporation is one of the world's largest producers of gold with several active mines in Nevada, Peru, Australia/New Zealand, Indonesia and Ghana. It competes with the likes of AngloGold Ashanti Ltd. (AU - Snapshot Report), Barrick Gold Corporation (ABX - Analyst Report) and Gold Fields Ltd. (GFI - Snapshot Report).
Newmont is the only gold company included in the S&P 500 Index and Fortune 500. It was the first gold company included in the Dow Jones’ world Sustainability Index.
We currently have a long-term Neutral recommendation on Newmont, which is in line with a short-term Zacks #3 Rank (Hold).
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