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These Factors Could Turn Newmont Mining’s Fortunes around in 2019


Nov. 20 2020, Updated 2:46 p.m. ET

NEM’s latest earnings

Newmont Mining (NEM) reported its third-quarter earnings results before the market opened on October 25 and held its conference call on the same day.

The company reported EPS of $0.33, which beat the consensus estimate by $0.14. Its revenue of $1.73 billion, however, missed the estimate by 19.0%.

NEM’s attributable gold production for the third quarter totaled 1.29 million ounces, a fall of 4.0% YoY (year-over-year), but increased 11.2% sequentially. The YoY fall was mainly the result of lower mill throughput at Carlin, lower leach production at Cripple Creek & Victor, and lower grades at KCGM. Its all-in sustaining costs fell 1% YoY to $927 per ounce.

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Stock performance

Newmont stock has outperformed the VanEck Vectors Gold Miners ETF (GDX) year-to-date. As of November 16, NEM has returned -11.2% compared to the -16.6% returned by GDX. Among its peers, only Barrick Gold (ABX) has outperformed NEM with a return of -10%, while Goldcorp (GG), Yamana Gold (AUY), and Kinross Gold (KGC) have fallen -26%, -30%, and -41%, respectively. Newmont’s operating performance hasn’t been very strong in 2018.

The latest earnings season hasn’t gone very well for the other gold miners either. While Goldcorp missed analysts’ estimates by a wide margin, Barrick Gold registered a slight beat. Agnico Eagle Mines reported a third-quarter earnings beat and also increased its production guidance for 2018.

Newmont has come a long way

Newmont Mining has come a long way with respect to asset restructuring, debt handling, and growth options. After accumulating debt at the peak of the cycle in 2011, the company has shifted gears to portfolio restructuring, which involves selling noncore and high-cost assets.

In this series, we’ll analyze Newmont Mining’s latest results and its performance forecast. We’ll also look at the company’s production profile, cost profile, balance sheet strength, and growth options. Continue to the next article for a look at NEM’s production profile.


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