Newmont Mining (NEM) – Good as Gold

February 26, 2010 10:31 am

We added a position in Newmont Gold (NEM) on Thursday. It has been on our radar for some time and after the very well received earnings report, we found that it is time to include it in our portfolio.

Below you will find the latest Horowitz & Company snapshot (in alpha stage) that provides additional details about the company, our rating (out of 10) and several of the data points that we use to analyze a stock.

(Click to enlarge)

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From Briefing.co (with highlights)

Newmont Mining beats by $0.34, beats on revs; reports 8% increase in equity gold reserves
Reports Q4 (Dec) earnings of $1.13 per share, excluding non-recurring items, $0.34 better than the First Call consensus of $0.79; revenues rose 90.0% year/year to $2.52 bln vs the $2.06 bln consensus.

Company had net cash from continuing operations of $1.0 bln, up 323% YoY. 2010

Equity gold production is expected to increase slightly to between 5.3 and 5.5 mln ounces, primarily as a result of the continuing 12-month ramp-up to full production of Boddington, partially offset by lower production from Nevada and Yanacocha, as described below.

The company expects 2010 gold costs applicable to sales to increase slightly to between $450 and $480 per ounce accounting for Boddington on a co-product basis, or to between $440 to $470 per ounce on a by-product basis, due to lower production from Nevada and Yanacocha.

The company accounts for Boddington on a co-product basis due to the significant revenues from copper. In 2010, the co anticipates consolidated capital expenditures to decline by approximately 15% from 2009 to between $1.4 and $1.6 bln ($1.2 to $1.4 bln on an equity basis) due to the completion of Boddington in 2009, offset partially by approximately $0.6 bln (on a consolidated basis) of investment in the next generation of other major projects.

“The combination of slightly higher production, lower costs and gold price leverage generated cash flow from operations of $2.9 bln on record revenues of $7.7 bln, while our gold operating margin expanded to 57%.” Co also reports 2009 equity gold reserves of 91.8 mln ounces, an 8% increase over 2008, and equity copper reserves of 9.1 bln pounds, a 17% increase over 2008.

Equity gold measured and indicated resources (NRM) for 2009 were 1.1 bln tons at an average grade of 0.020 ounces per ton, up from 0.8 bln tons at a grade of 0.026 ounces per ton for 2008. Equity copper NRM for 2009 were 796 mln tons at an average grade of 0.17%, up from 431 mln tons at a grade of 0.13% from 2008. The 2010 exploration budget is between $190 and $220 mln, an increase of approximately 10% from 2009.

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