Project pipeline

Future growth visibility boosts stocks. For miners, project pipelines and past execution are key factors in determining future production. Newmont Mining (NEM) has one of the best project pipelines in the sector (GDX)(GDXJ)—it may be stronger than Kinross Gold’s (KGC), Barrick Gold’s (ABX), and AngloGold Ashanti’s (AU). Newmont is poised to overtake Barrick as the world’s largest gold producer in 2018. For more on this, read Barrick Gold versus Newmont Mining: Comparing Miners in 2018 and Beyond.

Is Newmont Mining Poised for Growth in 2018 and Beyond?

The eight projects NEM has approved since mid-2014 are expected to add annual gold production of up to 1.2 million ounces at all-in sustaining costs of $750 per ounce.

Projects providing short- to medium-term returns

The company remains on track to reach commercial production at its Subika Underground, Northwest Exodus, and Twin Underground projects later this year. It has also started shipping concentrates from the Cripple Creek & Victor mine to its Nevada mills for processing.

In South America, its Quecher Main project to extend oxide production is underway. In Australia, it is progressing with its Tanami Power project, which will lower costs and emissions and facilitate future growth. The abovementioned projects are expected to generate an average internal rate of return above 20%.

Other projects included in the outlook

Among its longer-term projects, Newmont has started advancing Long Canyon Phase 2 to a pre-feasibility study. It is also pursuing multiple underground expansions at Carlin. In South America, the company is seeing favorable drilling and process test results in Peru at the Yanacocha sulfide projects. In Africa, it is advancing studies to develop underground deposits at its Ahafo and Akyem mines.

As shown in the above graph, all sustaining and current projects are included in Newmont’s outlook, while mid- and long-term projects are excluded. In the next part of this series, we’ll discuss Newmont’s cost improvement strategy.

Latest articles

German chip maker Infineon Technologies has reportedly raised 1.55 billion euros (~$1.74 billion) in capital by selling its shares to fund its acquisition of Cypress Semiconductor (CY). Infineon has sold ~113 million new shares at 13.70 euros each.

As of June 18, Dunkin’ Brands (DNKN) was trading at $80.07, an 8.9% rise since reporting its first-quarter earnings on May 2. Also, DNKN was trading at a premium of 29.8% from its 52-week low of $61.69 and a discount of 1.6% from its 52-week high of $81.40.

19 Jun

Are Lower Oil Prices Weighing on ExxonMobil Stock?

WRITTEN BY Maitali Ramkumar

ExxonMobil (XOM) stock has fallen 7.1% in the second quarter so far. Let's review ExxonMobil's stock performance in comparison to oil price changes and equity market movements in the quarter.

19 Jun

As Facebook Unveils Libra, MSFT and CRM Join a Blockchain Group

WRITTEN BY Mayur Sontakke, CFA, FRM

On June 18, Facebook (FB) launched Libra, its own cryptocurrency. On the same day, CoinDesk published another piece of blockchain news that didn’t receive as much fanfare as Facebook’s Libra news. Was the timing a coincidence? We think not.

Uber Technologies (UBER) has picked Melbourne as another test site for its flying taxi service known as UberAir. The Australian city is the first international test site Uber has chosen for its flying taxi service. The addition of Melbourne brings the number of test locations Uber has picked for its UberAir service to three.

Lyft (LYFT) and Uber Technologies (UBER) are pushing back against California legislation that would require them to recognize their drivers as employees rather than independent contractors. The legislation would require companies like Lyft to give their drivers the compensation and benefits spelled out under California’s employment regulations.