newmont mining

AMERIGO RESOURCES $2.54 (Toronto symbol ARG; SI Rating: Speculative) (604-681-2802; www.amerigoresources.com; Shares outstanding: 94.4 million; Market cap: $239.7 million) has a contract with Codelco, Chile’s state-owned copper producer, to process the tailings from El Teniente, the world’s largest underground copper mine. Tailings are the waste rock produced in the mining process. The contract runs at least through 2021. Amerigo has a further agreement with Codelco to process a supplementary source of material from the nearby Colihues tailings pond. Amerigo also holds 13.2% of TSX-listed Candente Resource Corp. with a market value of $16.6 million. Candente explores for copper, gold and silver in Peru and Mexico. In the three months ended September 30, 2007, Amerigo’s revenues rose 44.6%, to $28.5 million from $19.7 million. (All figures except share price in U.S. dollars.) Earnings fell 20.2%, to $6.6 million or $0.07 a share from $8.3 million or $0.09. Cash flow per share fell 16.7%, to $0.09 a share from $0.10. Earnings and cash flow fell because of higher Chilean power costs. The stock now trades at 7.1 times cash flow....

NEWMONT MINING CORP. $51 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 434.7 million; Market cap: $22.2 billion; WSSF Rating: Average) is one of the world’s largest producers of gold. It also mines copper, silver and zinc. Newmont aims to increase its exposure to gold. Its Canadian subsidiary Franco-Nevada Corp. recently sold shares to the public, and used the proceeds to pay Newmont $1.3 billion in cash for certain mining and oil and gas royalty assets. Newmont will use the cash to fund its $1.5 billion acquisition of Canadian gold mining company Miramar Mining Corp. Miramar’s Hope Bay Project in northern Canada is one of the largest undeveloped gold deposits in North America....

We feel investors should diversify their resource sector holdings with non-oil stocks such as gold miner Newmont and forest products producer Weyerhaeuser. Both are leaders in their respective fields, and their large size makes it easier for them to endure commodity price swings NEWMONT MINING CORP. $51 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 434.7 million; Market cap: $22.2 billion; WSSF Rating: Average) is one of the world’s largest producers of gold. It also mines copper, silver and zinc. Newmont aims to increase its exposure to gold. Its Canadian subsidiary Franco-Nevada Corp. recently sold shares to the public, and used the proceeds to pay Newmont $1.3 billion in cash for certain mining and oil and gas royalty assets....

INTEL CORP. $22.67, Nasdaq symbol INTC, fell 15% this week on fears that rising loan writedowns at major banks would hurt sales of new computers. Banks are large buyers of computer technology. A slowing economy could also hurt new computer demand at other big corporations. However, Intel’s recent restructuring will help it stay profitable even if sales weaken. The launch of new, faster chips in the second half of 2008 should also expand its lead over rival chipmaker Advanced Micro Devices, particularly in the corporate server segment. Intel is a buy. NEWMONT MINING CORP. $52.42, New York symbol NEM, gained $4 this week as gold surged to a new record of $869.05 an ounce, surpassing the old peak of $850 reached in 1980....

NEWMONT MINING $49.42 (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 over 6.3 million ounces of gold this year. Newmont’s Canadian subsidiary Franco-Nevada Corp. has sold 82 million shares to the public. Franco-Nevada will use the $1.3 billion proceeds from the initial public offering to purchase 190 base and precious metals mining royalty interests plus 100 oil and gas royalty properties from Newmont. This will give Newmont $1.3 billion in cash to pay for its recent $1.5 billion purchase of TSX-listed Miramar Mining. It will also let it focus on its core gold mining business....

LA-Z-BOY INC. $6.00 (New York symbol LZB; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 51.4 million; Market cap: $308.4 million; WSSF Rating: Average) has struggled lately as the slump in the housing market has cut demand for new furniture. In its second fiscal quarter ended October 27, 2007, the company lost $0.07 a share from continuing operations, due to $0.08 a share in one-time charges. It earned $0.06 a share in the year-earlier quarter. Sales fell 11.9%, to $365.4 million from $414.6 million. Meanwhile, La-Z-Boy is doing a good job controlling its inventory. That puts it in a good position to profit when sales rebound. A cut to the $0.48 dividend, which yields 8.0%, is a possibility. But the stock would still yield 4.0% even after a 50% reduction. La-Z-Boy is a buy for patient investors....

APPLE INC. $184.70, Nasdaq symbol AAPL, earned $3.93 a share in its fiscal year ended September 29, 2007, up 73.1% from $2.27 in the prior year. The gains came from strong demand for Apple’s new iPod music players, iPhone and Mac computers. Revenue rose 24.4%, to $24.0 billion from $19.3 billion. Apple is debt free, and has $15.4 billion ($17.64 a share) in cash. It spends roughly 12% of its revenue of $27 a share on research. Apple’s strong reputation for design and convenience, as well as its loyal customer base, should continue to spur growth. However, at 40.7 times its fiscal 2008 profit forecast of $4.54 a share, the stock is vulnerable to a big drop if the company fails to meet its revenue and earnings targets. Apple is still a hold for aggressive investors....

MOLSON COORS BREWING CO. $55.05, New York symbol TAP, has agreed to merge its operations in the United States and Puerto Rico with those of rival brewer SAB Miller PLC. Each will have 50% voting interest in this new venture, called MillerCoors, but Miller will have a 58% economic interest while Molson Coors will have 42%. This new joint venture will account for about 27% of the beer market in the United States. That should help it compete with Anheuser-Busch (see below), which accounts for about half of U.S. beer sales. Assuming regulators approve, the new company should begin operations in 2008. Like the earlier merger of Molson and Coors, the main attraction of this plan is cost savings. Molson Coors expects to save $500 million a year by sharing its distribution networks and other assets with Miller. To put that in context, Molson Coors earned $184.3 million or $1.02 a share in the second quarter of 2007....

AMERICAN EXPRESS CO. $59.28, New York symbol AXP, has agreed to sell its international banking business for $1.1 billion. That figure includes $212 million that Amex will receive over the next 18 months from the transfer of a related operation. To put these amounts in perspective, Amex earned $1.06 billion or $0.88 a share in the second quarter of 2007. The company will probably invest most of the cash in its core card and travel operations, or buy back shares. American Express is a buy....

APPLE INC. $132.30, Nasdaq symbol AAPL, rose to a new all-time high following the successful launch of the iPhone. The new product uses an estimated $266 worth of parts, which suggest it will produce a gross profit of roughly $250 per unit. Apple aims to sell 10 million iPhones in the first year, which works out to an aggregate profit of $2.5 billion. The company earned just $2.0 billion or $2.27 a share in the fiscal year ended September 30, 2006. However, Apple is unlikely to dominate the mobile phone market in the same way its iPod quickly captured a big part of the music player market. If Apple fails to meet its iPhone sales target, the stock could fall sharply. Apple is still a hold....