newmont mining

MOLSON COORS BREWING CO. $49.91, New York symbol TAP, fell 10% this week, as rising costs for raw materials and energy more than offset rising sales. In the three months ended June 29, 2008, earnings before unusual items fell 2.0%, to $172.6 million from $176.1 million a year earlier. Per-share earnings fell 4.1%, to $0.93 from $0.97, on more shares outstanding. Sales rose 5.9%, to $1.8 billion from $1.7 billion. Sales gains in the United States and the UK offset a small drop in Canada. The company’s latest cost-cutting plan will help it cope with higher grain and other costs. So far, it has cut its annual expenses by $138 million. It should reach its goal of $250 million in annual savings by the end of 2009. The company’s new joint venture with SABMiller plc will also enhance its long-term profitability. Molson Coors is still a buy....

NEWMONT MINING $50.99 (New York symbol NEM; SI Rating: Average), is one of the world’s largest gold producers, with major operations in the United States, Canada, Peru, Australia, Indonesia and Ghana. Newmont produced 5.3 million ounces of gold in 2007. It will probably produce the same amount of gold in 2008 as it continues to work out problems at certain mines. Higher costs for parts and labour will also push operating costs up this year. However, a new on-site power plant should cut costs at its operations in Nevada. The 2009 start-up of its new Boddington gold mine in western Australia should also expand Newmont’s long-term profits, making it attractive for gold investing. Newmont’s 2008 earnings should increase to $2.18 a share, for a p/e of 23.9. It also trades at 13.5 times its projected cash flow of $3.85 a share. That’s high, but golds always trade at a premium to the market. The $0.40 dividend yields 0.8%....

EUROPEAN GOLDFIELDS $5.06 (Toronto symbol EGU; SI Rating: Speculative) (44 (20) 7408 9534; www.egoldfields.com; Shares outstanding: 179.3 million; Market cap: $907.0 million) owns properties in Greece and Romania. The company is headquartered in the UK. European Goldfields holds a 65% interest in Hellas Gold. Hellas owns three gold and base metal deposits in Northern Greece. The deposits are the Stratoni zinc/ lead/silver property, the Olympias gold/zinc/lead/silver project and the Skouries copper/gold property. Production started at Stratoni in September 2005. Permits to develop the Skouries and Olympias projects are moving steadily forward....

VERIZON COMMUNICATIONS INC. $38.23, New York symbol VZ, owns 55% of Verizon Wireless, a joint venture with UK-based Vodafone. Verizon Wireless has now agreed to buy privately held Alltel Corp., which provides wireless services to 13 million customers in mainly rural areas of 34 states. Verizon Wireless will pay $5.9 billion in cash and assume Alltel’s debt of $22.2 billion, for a total price of $28.1 billion. Verizon’s share works out to $15.5 billion, which is equal to 2.2 times the $6.9 billion or $2.37 a share it earned in 2007. After the merger, Verizon Wireless will be the largest wireless company in the United States, with over 80 million customers. The company aims to complete the takeover by the end of this year. Alltel and Verizon use similar cellular technologies, so Verizon should have few integration problems. Verizon feels the merger will generate annual cost savings of $1 billion in the second year after closing....

NEWMONT MINING CORP. $48 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 453.5 million; Market cap: $21.8 billion; WSSF Rating: Average) is one of the world’s largest gold mining companies, with major operations in the United States, Canada, Peru, Australia, Indonesia and Ghana. It also produces other metals such as copper and zinc. Gold prices nearly tripled in the past five years, to reach a high of $1,003 an ounce in March 2008. Gold now trades at $905. However, Newmont’s shares have lagged the jump in gold prices. That’s mainly due to rising fuel, labor and steel costs. Start-up costs at new mines have also weighed on its earnings. The company recently unwound its remaining gold hedges — amounts of future production sold in advance at fixed prices. A large hedge position adds to profits when gold prices drop, but limits profits when prices rise. Eliminating these hedges puts Newmont in a better position to profit from rising spot prices....

GABRIEL RESOURCES, $2.99, symbol GBU on Toronto, has nearly doubled for us since late April. Gabriel now has three major shareholders. New York City-based resource investor Thomas Kaplan began buying Gabriel shares in December, 2007 through his Electrum Strategic Holdings LLC. He is now Gabriel’s third-largest shareholder with a 14.4% stake. Newmont Mining, symbol NEM on New York, is Gabriel’s largest shareholder at 18.4%, followed by New York City-based hedge fund, Paulson & Co. at 18%. Gabriel announced this week that it will add five new members to its existing eight- member board. Newmont will nominate two additional directors and Electrum will nominate three new directors....

BROADRIDGE FINANCIAL SOLUTIONS INC. $17.94, New York symbol BR, has outlined details of a recent transaction by its clearing services subsidiary, Ridge Clearing & Outsourcing, in response to last week’s downgrade of its credit rating by Standard & Poor’s. In late 2007, Ridge Clearing accepted $380 million worth of securities as collateral. That transaction increased Broadridge’s short-term debt to just $426 million, which is equal to only 17% of its current market cap of $2.5 billion. The transaction involved 143 pools of AAA-rated mortgage-backed bonds issued by the Federal National Mortgage Association. The company states “there were no exotic or illiquid mortgage-backed derivative securities in this transaction”. As well, the party who had committed to purchase these bonds is a global financial services company rated A+ by Standard & Poor’s. This party completed the transaction on January 17, 2008, and Broadridge repaid the related short-term loan....

NEWMONT MINING $46.28 (New York symbol NEM; SI Rating: Average) is one of the largest gold producers in the world with major operations in the United States, Canada, Peru, Australia, Indonesia and Ghana. Newmont expects to produce 5.3 million ounces of gold this year. Late last year, Newmont completed the sale of 290 mining and oil and gas royalty interests to Franco-Nevada Corp. This gave Newmont $1.2 billion in cash to pay for its $1.5 billion purchase of TSX-listed Miramar Mining. It also lets it focus on its core gold mining business....

SHORE GOLD $3.80 (Toronto symbol SGF; SI Rating: Start-up) (306-664-2202; www.shoregold.com; Shares outstanding: 182.7 million; Market cap: $694.3 million) owns 100% of the Star diamond project in the Fort a la Corne area of Saskatchewan, which hosts one of the most extensive kimberlite fields in the world. Shore Gold has completed underground bulk sampling at the Star project, which returned high caratgrades of diamonds. By the end of this year, it hopes to complete a bankable feasibility study supporting a diamond mine. The company aims to complete construction of a mine by 2012. Shore Gold also holds 60% of the nearby Fort a la Corne Joint Venture. Newmont Mining holds the other 40%, as well as 9.9% of Shore Gold’s common shares....

Here are two promising diamond exploration stocks. Both have speculative appeal, but they are buys only for highly aggressive investors. SHORE GOLD $3.80 (Toronto symbol SGF; SI Rating: Start-up) (306-664-2202; www.shoregold.com; Shares outstanding: 182.7 million; Market cap: $694.3 million) owns 100% of the Star diamond project in the Fort a la Corne area of Saskatchewan, which hosts one of the most extensive kimberlite fields in the world. Shore Gold has completed underground bulk sampling at the Star project, which returned high caratgrades of diamonds. By the end of this year, it hopes to complete a bankable feasibility study supporting a diamond mine. The company aims to complete construction of a mine by 2012....