Our one gold pick is still a buy

Article Excerpt

NEWMONT MINING CORP. $47 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 422.5 million; Market cap: $19.9 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, including copper, silver and zinc. Gold prices got as high as $725 an ounce in May 2006, but moved down to about $570 a month later. Gold will probably average $650 this year. Newmont prefers to sell its gold at the spot price instead of through hedging contracts. While that increases its price risk, the company offsets this by expanding or cutting production. Newmont probably sold around 7.25 million ounces of gold in 2006, down 15% from 2005. That’s mainly due to lower grades of ore at its big mine in Peru, and the expropriation of its joint venture in Uzbekistan. The company is also having trouble bringing its new mine in…

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