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Newmont Revises FY18 View, Aims At Least 50% Dividend Hike

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Newmont Mining Corporation (NEM - Free Report) recently provided revised outlook for 2018. The company’s updated outlook reflects ongoing investment in its operating assets and most promising growth prospects along with stable gold production.

The company increased attributable gold production guidance for 2018 to a range of 4.9-5.4 million ounces (up from 4.7-5.2 million ounces expected earlier), primarily driven by its Full Potential mine plan, recovery and throughput improvements. The company expects production in the band of 4.9-5.4 million ounces in 2019.

Newmont expects all-in sustaining costs (AISC) to be between $965 and $1,025 per ounce for 2018, compared with its earlier guidance of $950-$1,050. The company expects AISC in the range of $870-$970 per ounce in 2019 and long-term through 2022.

Costs applicable to sales (CAS) is now expected to be the range of $700-$750 per ounce in 2018, compared with prior guidance of $700-$800 per ounce, factoring in an increase in production in North America and Africa, and Full Potential efficiency and cost improvements across the portfolio. CAS is expected to range $620-$720 per ounce for 2019 and $650-$750 per ounce over the long-term through 2022.

Total capital expenditure and sustaining capital guidance for 2018 remains unchanged at $900-$1,000 million and $600-$700 million, respectively. Notably, primary capital projects of the company include Subika Underground, Twin Underground and Northwest Exodus, which will attain commercial production in 2018, and the Quecher Main and Ahafo Mill Expansion will reach commercial production in 2019.

Based on improved outlook and portfolio and balance sheet improvements, Newmont aims to increase its dividend by at least 50% in 2018. Moreover, the company expects to continue investing in margin and reserve growth and deliver a steady gold production at competitive costs over the next five years.

Shares of Newmont have moved up 4.7% in the past six months, outperforming the industry’s 6.9% decline.

 



Newmont, in October, reiterated its guidance of attributable gold production in the range of 5-5.4 million ounces for 2017 factoring in full potential improvements in Africa and North America. On a year-over-year comparison basis, production at Long Canyon and Merian is anticipated to compensate the impact of declines at Yanacocha and Twin Creeks.

The company also kept attributable copper production forecast for 2017 unchanged from the previous guidance of 40,000-60,000 tons per year, including Phoenix and Boddington.

Newmont is making notable progress with its growth projects, including Subika Underground and Ahafo mill expansion in Africa. The company also remains committed to de-lever its balance sheet and has lowered net debt to $1.1 billion at the end of third-quarter 2017.

 

Zacks Rank & Other Stocks to Consider

Newmont currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Westlake Chemical Corporation (WLK - Free Report) , Daqo New Energy Corp. (DQ - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) . All three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have moved up 77.5% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 140.9% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 112% year to date.

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