Newmont Goldcorp (NEM) Invests In GT Gold, Increases Stake

Newmont Goldcorp Corporation (NYSE:NEM) has increased stake in GT Gold Corp through a C$8.3 million (or roughly $6.25 million) financing deal arranged in a private placement of 6,877,199 common shares priced at C$1.20 per share.

The deal is slated to close on or about Dec 13, 2019 and is subject to certain conditions including regulatory as well as other approvals. Post completion of the financing, Newmont Goldcorp will own 14.9% of GT Gold’s outstanding shares. Notably, Newmont Goldcorp acquired 11,489,601 common shares of GT Gold on May 29, 2019, which represents 9.9% of issued and outstanding common shares.

Newmont Goldcorp’s latest financing deal supports the proposition that the Saddle North gold-rich copper porphyry discovery has the potential to become a Tier 1 asset. Newmont Goldcorp is assisting GT Gold by providing considerable technical expertise in advancing the Saddle North to a geological model, which is expected by the end of first-quarter 2020. Moreover, the release of an inaugural resource is expected by the end of second-quarter 2020 and a Preliminary Economic Assessment (“PEA”) is anticipated by late 2020.

Newmont Goldcorp’s shares have gained 18% in the past year compared with 51.2% surge of the industry.

Newmont Goldcorp’s adjusted earnings rose 9.1% year over year to 36 cents per share in third-quarter 2019, which trailed the Zacks Consensus Estimate of 40 cents.

The company revised its outlook for 2019. It now expects attributable gold production for 2019 to be 6.3 million ounces, down from 6.5 million ounces projected earlier.

For 2019, all-in sustaining costs for gold are projected to be $965 per ounce, down from the previous expectation of $975. Costs applicable to sales expectation for gold are $715 per ounce compared with $735 expected earlier.

Zacks Rank & Key Picks

Newmont Goldcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd (TSX:KL) , Impala Platinum Holdings Ltd (OTC:IMPUY) and Polymetal International plc (OTC:AUCOY) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 96.3% for the current year. The company’s shares have surged 95.3% in the past year.

Impala Platinum Holdings has projected earnings growth rate of 255.2% for 2019. The company’s shares have rallied 229.2% in a year.

Polymetal International has an estimated earnings growth rate of 40.5% for the current year. Its shares have appreciated 52.6% in the past year.

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