Subscribe for 12 months with recurring billing - $199

Buy 12 months of subscription time - $199

 

Search Gold Prices
Gold Price
[Most Recent Quotes from www.kitco.com]
Our RSS Feed

Gold Updates by Mail

Enter your email address:

Follow Us on Twitter
« Germany: On Your Deutsche Marks! | Main | Yamana Gold Incorporated: Underwhelming »
Thursday
Feb242011

Newmont Mining Corporation hits the skids

NEM Chart 24 Feb 2011.JPG


Newmont Mining Corporation (NEM) have released an update including a dividend payment which was not well received by the investment community as the stock price fell 7.36% on massive turnover of 19.1 million shares, which is twice the daily volume.

We'll start with the chart where we can see the golden crossover of the 50dama crossing over the 200dma in a downward direction, this is usually a rather negative sign for stocks. The technical indicators have also turned negative and are heading south.

The latest news release from Newmont hit the shares like a lead balloon. Gold prices also took a bit of a pounding after hours which didnt help the situation, however, this doesn't look good.


Newmont Mining Corporation (NYSE: NEM) today announced that net income increased 76% to $2.3 billion ($4.63 per share) in 2010, compared to $1.3 billion ($2.66 per share) in the prior year. Operating cash flow was a record $3.2 billion for 2010, compared to $2.9 billion in 2009. Adjusted net income(1) rose 39% to a record $1.9 billion ($3.85 per share) from $1.4 billion($2.79 per share) in 2009, while the Company's gold operating margin(2) increased by 30% to $737 per ounce in 2010, from $566 per ounce in 2009.

2010 Highlights:

Attributable gold and copper production of 5.4 million ounces and 327 million pounds, respectively, with gold production slightly higher and copper production approximately 44% higher than in 2009;

Record revenue of $9.5 billion, an increase of 24% from 2009;

Average realized gold and copper price of $1,222 per ounce and $3.43 per pound, respectively;
Gold operating margin increase(3) of 30%, compared with an average realized gold price increase of 25%;

Consolidated costs applicable to sales for gold and copper of $485 per ounce and $0.80 per pound, respectively; and Cash and cash equivalents of more than $4 billion on December 31, 2010.

Q4 2010 Highlights:

Attributable gold and copper production of 1.4 million ounces and 74 million pounds, respectively;
Average realized gold and copper price of $1,366 per ounce and $4.52 per pound, respectively; and Costs applicable to sales for gold and copper of $512 per ounce and $0.95 per pound, respectively.

"I am pleased to report that we generated record operating cash flow for the second year in a row, with our gold operating margin growing by 30% to $737 per ounce on an average realized gold price of$1,222 in 2010," stated Richard O'Brien, President and CEO.

"As a whole, our operations performed according to our plans, producing 5.4 million attributable ounces of gold in 2010. We continue to advance our Conga Project in Peru, which contains over 6 million attributable ounces of gold and 1.6 billion attributable pounds of copper reserves. Similarly, we continued to advance with our Akyem Project inGhana, which contains over 7 million attributable ounces of gold reserves. Advancing these two world-class mining projects, as well as continuing our drilling programs at Hope Bay in Canada, remain some of our top priorities in 2011."


NEM 5 Year table 24 Feb 2011.JPG

We can only conclude that after five years of rising gold prices this stock has gone nowhere and is still sub $60.00. The management need to explain such a poor performance along with the tiny dividend, which at $0.60 per year is a return of 1% and no growth in the price of the stock.

This one is not for us.

PS: Just in case you missed it we have just closed an option play on www.silver-prices.net with an average profit of 96.5% on Silver Wheaton Call Options. Click here to read more.


Many thanks to those of you who have recently signed up for options trading service, its very much appreciated. Please be patient as we have a number of new trades on the drawing board and as you are aware the timing of them is critical to their success.

We now have 65 winners out of 67 options trades, or a 97.00% success rate If you have any questions regarding these trades please address them through their site where they will be handled quickly and I hope efficiently.

sk chart 25 Feb 2011.JPG

The above progress chart is being updated constantly. However, to see exactly how it is going, please click this link.

So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.

Stay on your toes and have a good one.

Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.


To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. (Winners of the GoldDrivers Stock Picking Competition 2007)

For those readers who are also interested in the silver bull market that is currently unfolding, you may want to subscribe to our Free Silver Prices Newsletter.

For those readers who are also interested in the nuclear power sector you may want to subscribe to our Free Uranium Stocks Newsletter, just click here.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (1)

It's interesting that the stock price took a dive, despite increasing margins by 3%. I can understand investors being less responsive to revenue growth since this was simply the result of higher world gold prices. What has been the change in actual ? It says they are going ahead in Peru and Canada - how has this moved production overall?

March 9, 2011 | Unregistered CommenterTerri Sterner

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>