We have favored gold stocks since 9/11, when we declared the start of a “Super” bull market for bullion and associated mining shares, explains market timing strategist Alan Newman, editor of Crosscurrents.
Newmont Mining (NYSE:NEM) is one of the largest miners. They acquire, develop and explore for gold, silver and copper. Operations and assets are in the United States, Australia, Peru, Ghana and Suriname.
Proven and probable gold reserves as of February 2018 were 68.5 million ounces, worth $85.6 billion at the current price of bullion, which also works out to over $160 of reserves per share.
Newmont Mining traded as high as $81.90 in 1987, only weeks before the Crash of ’87 and traded as high as $72.42 when bullion hit a peak over $1900 per oz. in 2011. We believe those levels will again be achievable if our long-term forecast of $3000 to $3500 per oz. bullion proves correct.
While this might not seem a very big deal for investors buying shares at current levels, Newmont Mining is capable of paying huge dividends and indeed, actively pursued a higher dividend policy when bullion was racing towards the 2011 peak.
Newmont is huge; their aggregate land amount to approximately 23,000 square miles, which would rank as the 119th largest country in the world, not all that far from the entirety of Ireland. The shares have been in a modest uptrend since the mid-September 2018 low of $29.32.
Based entirely on our long-term forecast for bullion, Newmont Mining represents a very fair value for those who need to position themselves in the gold sector.
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