Newmont (NEM) to sell Kalgoorlie Power Business for $ 95 million – November 29, 2021
Newmont Company (NEM – Free Report) has signed an agreement to sell Kalgoorlie’s power business to Australia-based gold producer Northern Star Resources Limited. The sale of this non-core asset will allow the company to generate long-term value on the Boddington and Tanami operations and work on its future portfolio of projects through active exploration campaigns.
Under the deal, Newmont will receive $ 95 million in cash. This includes the $ 25 million received from Northern Star as an option payment to purchase the power business upon the purchase of Newmont’s 50% interest in Kalgoorlie Consolidated Gold Mines (“KCGM”). Northen Star exercised this option.
Kalgoorlie’s power business provides power to KCGM through a series of contracts, licenses, approvals and arrangements with third parties, including a 50% stake in the turbine power plant at 110 MW dual fuel gas from Parkeston near Kalgoorlie. The plant is a joint venture project with Canada’s energy utility, TransAlta Corporation. Kalgoorlie’s electrical business has been a profitable asset for Newmont since the sale of its stake in KCGM.
In its latest earnings call, Newmont said it expects attributable gold production of 6 million ounces in 2021, down from the 6.5 million ounces expected earlier. The company also expects Gold Costs to Sell (CAS) to be $ 790 per ounce and all-in sustaining cost (AISC) to be $ 1,050 per ounce, up from $ 750 per ounce. $ per ounce and $ 970 per ounce, respectively.
Newmont said Boddington was facing extreme weather issues and Nevada Gold Mines was also facing headwinds. The revised cost outlook includes the impact of lower production volumes as well as high production royalties and taxes at higher gold prices.
Newmont shares are down 4.9% in the past year, compared to an industry increase of 1.6%.
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Rank of Zacks and choice of keys
Newmont currently wears a Zacks Rank # 3 (Hold).
Some stocks better classified in the basic materials space are Nucor Company (NAKED – Free report), The Chemours Company (CC – Free report) and Allegheny Technologies (ATI – Free report).
Nucor has an expected earnings growth rate of 583.2% for the current year. Zacks’ consensus estimate for earnings for the current year has been revised up 7.7% in the past 60 days.
Nucor has beaten Zacks’ consensus estimate for earnings in two of the past four quarters, while missing the same twice. The company has a surprise earnings for the past four quarters of about 2.74% on average. The stock jumped about 112.2% in one year. NUE currently wears a Zacks Rank # 2 (Buy). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
Chemours has an expected profit growth rate of 105.1% for the current year. Zacks’ consensus estimate for the current year has been revised 10% up in the past 60 days.
Chemours has beaten Zacks’ consensus estimate for earnings over the past four quarters. The company has a surprise earnings for the last four quarters of about 34.2% on average. Its shares also rebounded about 26.8% year on year. CC currently sports a Zacks Rank # 1.
Allegheny has a projected profit growth rate of 86.5% for the current year. The consensus estimate for the current year has been revised upwards to 75.86% over the past 60 days.
Allegheny has beaten Zacks’ consensus estimate for earnings in each of the past four quarters. ATI has a surprise earnings for the last four quarters of 98.1% on average. The company’s shares have gained about 15% in a year. He currently wears a Zacks Rank # 2.