Aggressive · Stocks to Consider and Updates

Newmont Mining Posts Strong Results; Maintains Guidance

Thanks to increased gold production and lower costs, Newmont Mining Corp. (NYSE: NEM – $35.56) beat profit and sales expectations for the fourth quarter. Excluding non-recurring items, earnings per share rose to $0.40 from $0.39, beating the consensus of $0.25. Sales rose to $2.05 billion from $1.94 billion, also above Street views of $1.88 billion. Gold production increased 8% while the realized price fell 3%, while copper production was unchanged, but the realized price fell 18%. Consolidated cash flow from continuing operations was $1.8 billion and free cash flow of $805 million for the period. Newmont ended the year with $3.4 billion cash on hand and net debt of $0.9 billion; an industry-leading balance sheet with investment-grade credit profile.

       The Denver-based miner, in the process of acquiring Goldcorp, reiterated its outlook of 5.2 million ounces of gold production for 2019 and costs applicable to sales – an expense metric that covers all direct and indirect production costs – of $710 per ounce. The outlook reflects steady gold production and ongoing investment in its operating assets and promising growth prospects. Newmont’s copper operation is on the upswing as its Phoenix mine reaches higher grade copper ore from the Bonanza pit, which is offset by lower production at Boddington. Full-year earnings should be about $1.21 per share compared to 2018’s $1.34, not including the Goldcorp combination. A five percent allocation in NEM is best considered for portfolio diversification and moderate income as the shares are yielding 1.6%.

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