newmont mining

NEWMONT MINING CORP., $23.55, New York symbol NEM, is buying the Cripple Creek & Victor gold mine in Colorado from AngloGold Ashanti (New York symbol AU). The company will pay $820 million, which is equal to 7% of its $11.8-billion market cap (or the value of all outstanding shares). Newmont expects to complete the purchase in the third quarter of 2015. Cripple Creek will produce 350,000 to 400,000 ounces of gold a year once it completes its current expansion in 2016. To put that in context, Newmont expects to produce 4.6 million to 4.9 million ounces in 2015. The mine should last until at least 2026....

BMO Low Volatility U.S. Equity ETF, $25.34, symbol ZLU on Toronto (Units outstanding: 11.5 million; Market cap: $291.4 million; www.etfs.bmo.com), aims to invest in a portfolio of low-beta U.S. stocks. The fund has a 0.30% MER and yields 2.0%. The ETF selects the 100 lowest-beta stocks from a universe of the largest, most liquid U.S. securities. The underlying portfolio is rebalanced in June and December. In this respect, it differs widely from conventional ETFs which are designed to minimize trading and trading expense. BMO Low Volatility U.S. Equity ETF’s top holdings are Newmont Mining, McDonald’s, Autozone, Verizon Communications, Quest Diagnostics, Dollar General, Family Dollar, AT&T, Laboratory Corporation of America and AmerisourceBergen Corp....

HONDA MOTOR CO. LTD. ADRs $35 (New York symbol HMC; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.8 billion; Market cap: $63.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.honda.com) is spending $61 million to increase capacity at its plant in Tapukara, India, by 50%, to 180,000 cars a year. The company expects to complete these upgrades in 2016. Honda’s other Indian facility makes 120,000 cars a year. The extra capacity will help Honda take advantage of rising car demand in the country: in the 11 months ended February 28, 2015, it sold 166,366 cars in India, up 43.5% from the same period a year earlier. At the same time, Honda plans to produce 39% more motorcycles in India by 2016. This expansion will cost the company $94.3 million....

NEWMONT MINING $21.71 (New York symbol NEM; Shares outstanding: 498.9 million; Market cap: $11.0 billion; TSINetwork Rating: Average; Dividend yield: 0.5%; www.newmont.com) is the world’s second-biggest gold producer after Barrick Gold (symbol ABX on Toronto).

Newmont has mines in North America, South America, Australia, New Zealand, Indonesia and Africa.

The company’s cash flow per share fell 5.0% in 2014, to $3.45 from $3.63 in 2013. Aggressive cost-cutting failed to offset a 10% decline in realized gold prices.

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NEWMONT MINING CORP. $23 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 498.9 million; Market cap: $11.5 billion; Price-to-sales ratio: 1.6; Dividend yield: 0.4%; TSINetwork Rating: Average; www.newmont.com) will soon begin work on the first phase of its Long Canyon gold mine in Nevada.

Long Canyon will produce 100,000 to 150,000 ounces a year when it opens in 2017. The midpoint of that range— 125,000 ounces— is equal to 2.6% of the 4.85 million ounces Newmont produced in 2014. The mine should last eight years.

The company will spend $250 million to $300 million on this project. Based on current gold prices, the mine should add $100 million a year to Newmont’s annual operating earnings.

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NEWMONT MINING $21.71 (New York symbol NEM; Shares outstanding: 498.9 million; Market cap: $11.0 billion; TSINetwork Rating: Average; Dividend yield: 0.5%; www.newmont.com) is the world’s second-biggest gold producer after Barrick Gold (symbol ABX on Toronto). Newmont has mines in North America, South America, Australia, New Zealand, Indonesia and Africa. The company’s cash flow per share fell 5.0% in 2014, to $3.45 from $3.63 in 2013. Aggressive cost-cutting failed to offset a 10% decline in realized gold prices....

ISHARES S&P/TSX GLOBAL GOLD INDEX FUND $10.63 (Toronto symbol XGD; buy or sell through brokers; ca.ishares.com) aims to mirror the performance of the S&P/TSX Global Gold Index.

This index is made up of 38 gold stocks from Canada and around the world. The iShares S&P/TSX Global Gold Index Fund’s MER is 0.61%. It began trading on March 23, 2001.

The fund’s top holdings are Goldcorp at 15.8%; Barrick Gold, 13.3%; Newmont Mining, 11.6%; Franco Nevada, 7.2%; Randgold Resources (ADR), 6.3%; Agnico-Eagle Mines, 5.9%; Royal Gold, 4.1%; AngloGold Ashanti (ADR), 4.1%; Eldorado Gold, 3.4%; and Yamana Gold, 3.1%.

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In 2011, gold shot up to a high of $1,950 U.S. an ounce, and silver reached a high of $48.48. Gold prices then fell steadily and in late 2014 dropped below $1,200 for the first time since mid-2010. The metal now trades at $1,203. Silver also fell, hitting a five-year low of $15.35 an ounce in late 2014. It now trades at $16.21. In the longer term, gold and silver could well regain their 2011 highs. This will simply reflect the vast expansion in the U.S. money supply that has taken place since the financial crisis struck in 2008....

On occasion, an Inner Circle member asks a question that is likely to interest many other members. Here’s the latest example: Q: Hello, Pat: I am a relatively new member, and this is my first time writing to ask a question. I have heard about a movement to divest from the fossil fuel industry in which some major institutional funds have begun to participate (Stanford’s endowment being one). Now I know that you recommend a number of oil stocks, and I am not writing to delve further into that matter. Rather, I would like to know: is it possible to have a strong resource segment in one’s portfolio while divesting away from companies directly related to the fossil fuel industry? What companies would you suggest investing in?...

NEWMONT MINING CORP. $24 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 498.8 million; Market cap: $11.9 billion; Price-to-sales ratio: 1.7; Dividend yield: 0.4%; TSINetwork Rating: Average; www.newmont.com) has started work on its 75%-owned Merian gold project in Suriname; the Suriname government owns the remaining 25%. The company will spend $600 million to $700 million on Merian. The new mine will supply 7% to 10% of Newmont’s total gold production when it starts up in 2017. The stock has jumped 36% from its December 2014 low of $17.60. That’s mainly because gold prices have strengthened in response to fears of deflation in Europe. However, the higher U.S. dollar will continue to weigh on gold....