Earnings Reports

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Gold and copper producer Newport Mining reported better than expected fourth quarter earnings Thursday with steady gold and copper production and lower operational costs. NEM agreed to acquire Goldcorp Inc. (GG) for $10 billion in an all-stock deal last month. 


NEwmont Australia BoddingtonNewmont: Boddington Australia

Newmont Mining Corp NYSE: NEM Reported Earnings Before Open Thursday

$0.38 Beat Exp $0.25 EPS AND $2.05B Beat $1.88 Billion Million Revenue Forecast

Earnings

Newmont reported adjusted earnings of $214 million, or 40 cents a share, for its fourth quarter, compared to $206 million, or 38 cents a share, in the year-earlier period. Analysts surveyed by FactSet had expected per-share earnings of 25 cents. Excluding tax- and valuation-related adjustments, the company said it earned 7 cents a share in the quarter.

NEM revenue rose to $2.05 billion vs. $1.94 billion in the same period last year and beating the consensus $1,88 billlion. For the full year, Newmont posted adjusted earnings of $718 million, or $1.35 a share, down from $774 million, or $1.45 a share, in 2017. Full-year revenue dropped to $7.25 billion from $7.38 billion in 2017 "... primarily due to higher gold production at various sites, partially offset by lower average realized metal prices," the company said.

Newmont Mining Corp NYSE: NEM

Market Reaction - Close $35.41 USD +0.020 (+0.057%)

Highlights

  • NEM reported reserves of 65.4 million attributed ounces in 2018, down from 68.5 million in the year-ago period
  • Gold resources increased to 55 million ounces from 48.2 million
  • Gold production increased to 1.44 million ounces from 1.34 million ounces.
  • NB:(Resources describe the amount of a commodity a company is confident is in the ground; reserves focus on how much is economically viable to mine at prevailing prices.)
  • Newmont sees exploration costs rising 9% this year, to $250 million.

Last year Newmont lost on tax-related charges, but NEM’s bottom line has come in better than expected each quarter since the end of 2016.

Newmont lags the VanEck Vectors Gold Miners ETF (GDX) over the past three months (it did fall on the Goldcorp takeover), it has risen 6.4% and is up nearly 23% from its October lows.

NEM Global Assets 2019

Newmont Announced Acquiring Goldcorp for $10 billion on January 14, 2019

Newmont Mining Corporation (NEM) agreed to acquire Goldcorp Inc. (GG) for $10 billion in an all-stock deal, which is expected to be completed in the second quarter of 2019.

Under the terms, Newmont will acquire all outstanding Goldcorp equity at an exchange ratio of 0.3280 of a Newmont share and $0.02 for each Goldcorp share, which will represent a 17% premium based on both companies’ 20-day volume weighted average share prices as of January 11, 2019.

The transaction has been approved by the boards of directors of both companies. Closure of the deal is subject to approval by the shareholders of both companies, regulatory approvals in a number of jurisdictions including the EU and Canada, and other customary conditions.

The combined entity will be named Newmont Goldcorp and will be one of the world’s largest gold producers by output. Newmont shareholders will own approx. 65% of the combined company while Goldcorp shareholders will own 35%. The majority of Newmont Goldcorp’s reserves and resources, around 75%, will be located in the Americas with the remaining 15% in Australia and 10% in Ghana.

Newmont Goldcorp plans to divest $1 billion to $1.5 billion in assets over the next two years, and aims to achieve an annual production target of 6-7 million ounces. In 2017, Newmont produced 5.3 million ounces of gold while Goldcorp produced 2.6 million ounces.

Gary Goldberg will be the Chief Executive Officer of Newmont Goldcorp and Tom Palmer will be the President and Chief Operating Officer. Mr. Goldberg will lead the company through the acquisition and integration process, which is expected to be completed for the most part in the fourth quarter of 2019, after which he will retire and Mr. Palmer will become President and CEO.

Newmont Goldcorp’s shares will be traded on the New York Stock Exchange under the ticker symbol NEM and are expected to be listed on the Toronto Stock Exchange following the deal closure. Newmont would be entitled to a $350 million break-fee and Goldcorp would be entitled to a $650 million break-fee, depending on the circumstances.

Newmont’s stock was down 4.5% in morning trade on Monday while Goldcorp’s shares were up 11.5% after the announcement.

Source: Newmont

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