Newmont Corporation (NEM - Free Report) announced that it expects to commence ramping up operations safely at the Penasquito mine in Mexico on May 18, following the government’s recognition of mining as an essential activity.
Notably, the start-up of Penasquito is projected to take approximately two weeks to reach stable production levels. Newmont is likely to update its guidance for 2020 as it starts to ramp up operations.
In early April, operations at Penasquito were placed on care and maintenance following restrictions by the government of Mexico due to the coronavirus outbreak.
On Apr 22, Penasquito reached a definitive agreement with San Juan de Cedros community on land usage, water availability, infrastructure and social investments. Notably, the deal is anticipated to be ratified in a General Assembly once the government lifts the coronavirus restrictions on gathering. Further, the agreement specifies that any disputes in the future will be settled through dialogue and free of blockades.
Newmont’s shares have surged 118.1% in the past year against the industry’s decline of 11.9%.
Earlier this month, the company reported first-quarter 2020 adjusted earnings per share of 40 cents, which missed the Zacks Consensus Estimate of 43 cents.
Revenues rose 43.2% year over year to $2,581 million in the quarter. However, the figure missed the Zacks Consensus Estimate of $2,682.5 million.
The company stated that it is well positioned to efficiently ramp up mining operations in a timely manner. Despite shorter-term disruptions stemming from challenging macro-economic environment, its long-term value proposition remains unchanged. Newmont continues to have the industry-leading gold mineral reserves of 95.7 million ounces.
Newmont Corporation Price and Consensus
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked companies in the basic materials space areGold Fields Limited (GFI - Free Report) , Agnico Eagle Mines Limited (AEM - Free Report) and Barrick Gold Corporation (GOLD - Free Report) .
Gold Fields currently sports a Zacks Rank #1 (Strong Buy)and has a projected earnings growth rate of 31% for 2020. The company’s shares have surged 123.2% in a year.You can see the complete list of today’s Zacks #1 Rank stocks here.
Agnico Eagle has a projected earnings growth rate of 75.3% for the current year. The company’s shares have rallied around 62% in a year. It currently has a Zacks Rank #2.
Barrick has a projected earnings growth rate of 64.7% for 2020. It currently carries a Zacks Rank #2. The company’s shares have rallied 122.8% in a year.
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