Aggressive · Stocks to Consider and Updates

Newmont Swings to a Loss

NEM  Gold and copper producer Newmont Mining Corp. (NYSE: NEM – $24.30) posted a non-adjusted loss in its fourth quarter, hurt by lower metal prices and delayed exports from Indonesia, among other costs. Newmont said the average realized gold and copper price fell to $1,084 a troy ounce and $1.86 a pound, respectively in the quarter, compared with $1,194 an ounce and $2.55 a pound a year earlier. Gold production, meanwhile, was flat at 1.3 million ounces, while copper production reached 39,000 metric tons, compared with 29,000 metric tons a year earlier due to a higher grade ore at the Batu Hijau, Indonesia location. Over all, Newmont reported a loss of $254 million, or $0.50 a share, compared with a profit of $15 million, or $0.03/share, a year earlier. Excluding certain items, profit fell to $0.04 a share from $0.17 a year ago and below analysts’ estimates of $0.12. Revenue slumped to $1.8 billion vs. $2.0 billion in 2014’s fourth quarter and below Street consensus of $1.82 billion. The Denver-based miner provided limited guidance for 2016, but it believes its outlook for long-term production and cost control can be profitable on between 4.5 and 5.0 million ounces of gold at prices below $1,000 per ounce. Nonetheless, gold and copper prices seem set to average lower this year than in 2015, weighing on earnings. Only a small allocation for NEM is recommended in a well-diversified aggressive account.


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