Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, January 30, 2009

Article Excerpt

NEWMONT MINING CORP., $39.78, New York symbol NEM, has agreed to buy the 33.3% of the new Boddington gold mine, in western Australia, that it does not already own from AngloGold Ashanti Ltd. Newmont will pay $1.1 billion, consisting of cash, stock and future royalties. The purchase price is roughly 30% more than Newmont’s likely 2008 earnings of $840 million, or $1.85 a share. Newmont plans to issue up to 34.5 million new common shares, at $37 each, to pay for this purchase. The new shares will give Newmont gross proceeds of about $1.3 billion. Newmont will also issue up to $517.5 million of notes convertible into common shares, with an initial conversion price of $46.25 a share. The new shares and notes, if fully converted, would increase the number of outstanding Newmont shares by 10%. Boddington will begin operating later this year, and will increase Newmont’s annual production by at least 10%. Boddington’s reserves should last 20 years, so owning all of it enhances Newmont’s long-term prospects. As well,…