Newmont Inks Deal To Boost Long-term Growth In Guiana Shield

Newmont Mining Corporation (NYSE:NEM) landed a deal to further explore the potential Esperance gold discovery in French Guiana, owned by Compagnie Miniere Esperance. The deal enables Newmont to earn up to a 70% interest in the property through multi-year investments.

The early-stage discovery (having multi-million ounce potential) was identified by Compagnie on its existing land holdings following the completion of active mining at the Esperance operation in 2010. The area consists of multiple proximal undrilled targets.

Newmont stated that is on track with its efforts to strengthen its long-term growth pipeline in potential exploration districts. The latest move allows the company to build its business in the highly prospective Guiana Shield, where it has safely completed the Merian mine about a year ago, on schedule and 20% lower than the stipulated budget.

Notably, Newmont increased its advanced and exploration projects investments by roughly 25% this year, roughly two-thirds of which will be used to fund more greenfields and brownfields exploration.

Shares of Newmont have moved up 2.4% in the past six months, outperforming the industry’s 7.1% decline.

Newmont, in October, reiterated its guidance of attributable gold production in the range of 5-5.4 million ounces for 2017 factoring in full potential improvements in Africa and North America. On a year-over-year comparison basis, production at Long Canyon and Merian is anticipated to compensate the impact of declines at Yanacocha and Twin Creeks.

The company also kept attributable copper production forecast for 2017 unchanged from the previous guidance of 40,000-60,000 tons per year, including Phoenix and Boddington.

Newmont is making notable progress with its growth projects, including Tanami Expansion in Australia, and Subika Underground and Ahafo mill expansion in Africa. The company also remains committed to de-lever its balance sheet and has lowered net debt to $1.1 billion at the end of third-quarter 2017.

Zacks Rank & Other Stocks to Consider

Newmont currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Westlake Chemical Corporation (NYSE:WLK) , Daqo New Energy Corp. (NYSE:DQ) and Kronos Worldwide Inc. (NYSE:KRO) . All three stocks flaunt a Zacks Rank #1. You can see the complete list of today’s Zacks Rank #1 stocks here.

Westlake Chemical has an expected long-term earnings growth rate of 10.6%. Its shares have moved up 74.5% year to date.

Daqo New Energy has an expected long-term earnings growth rate of 7%. Its shares have surged a whopping 145.4% year to date.

Kronos Worldwide has an expected long-term earnings growth rate of 5%. Its shares have rallied 103.5% year to date.

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