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Newmont (NEM) Hits New 52-Week High: What's Driving It?

Shares of Newmont Mining Corporation NEM scaled a fresh 52-week high of $39.84 on Jan 12, before eventually closing the day at $39.79.

Newmont has a market cap of roughly $21.2 billion. Average volume of shares traded in the last three months is around 4,574K.  

Shares of Newmont have moved up 18% in the last three months, outperforming the industry’s 7.4% gain.

 



Driving Factors

Last month, Newmont revised its outlook for 2018. The company’s updated outlook reflects ongoing investment in its operating assets and promising growth prospects along with stable gold production.

The company increased attributable gold production guidance for 2018 to 4.9-5.4 million ounces (up from 4.7-5.2 million ounces expected earlier), primarily driven by its Full Potential mine plan, recovery and throughput improvements.

Newmont expects all-in sustaining costs to be between $965 per ounce and $1,025 per ounce for 2018, compared with its earlier guidance of $950-$1,050.

Costs applicable to sales is now expected to be the range of $700-$750 per ounce in 2018, compared with prior guidance of $700-$800, factoring in an increase in production in North America and Africa, and Full Potential efficiency and cost improvements across the portfolio.

Moreover, the company aims to increase dividend by at least 50% in 2018, considering improved outlook and portfolio and balance sheet improvements.

Newmont is making notable progress with its growth projects, including Subika Underground and Ahafo mill expansion in Africa.

Last month, the company landed a deal to further explore the potential Esperance gold discovery in French Guiana, owned by Compagnie Miniere Esperance. The deal enables Newmont to earn up to a 70% interest in the property through multi-year investments.

Newmont stated that it is on track with its efforts to strengthen its long-term growth pipeline in potential exploration districts. The deal allows the company to build its business in the highly prospective Guiana Shield, where it has safely completed the Merian mine about a year ago, on schedule and 20% lower than the stipulated budget.

Notably, Newmont increased its advanced and exploration projects investments by roughly 25% last year, roughly two-thirds of which will be used to fund additional greenfields and brownfields exploration.

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Newmont Mining Corporation Price and Consensus

 

Newmont Mining Corporation Price and Consensus | Newmont Mining Corporation Quote

 

Zacks Rank & Other Stocks to Consider

Newmont currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are Methanex Corporation MEOH, Steel Dynamics, Inc. STLD and Koninklijke DSM N.V. RDSMY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have soared 34.3% over a year.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have rallied 32% over a year.

Koninklijke has an expected long-term earnings growth rate of 7.1%. Its shares have moved up 61.3% in the last year.

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Methanex Corporation (MEOH) : Free Stock Analysis Report
 
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