| How Is Newmont Positioning in the Face of Volatile Gold Prices? | |
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Newmont Mining Is Positioning Itself for Volatile Metal Prices (Continued from Prior Part) Gold price headwinds
Newmont Mining’s (NEM) management said that while gold’s fundamental story is intact, there could be reasonable headwinds for gold going forward 24 months. This is on the back of potential rate hikes as well as the strong outlook for the US dollar (UUP). Newmont’s management provided a detailed scenario analysis of how the company is positioning itself in the event of a volatile metal price environment.
Positioning for gold price volatility
The company’s management mentioned that at the current gold prices, they would continue to advance profitable projects, pursue exploration projects, pay dividends, and repay debt. They’ll also review the seventh phase of Batu Hijau and the Ahafo mill expansion.
If prices fall below $1,000 per ounce of gold, they’ll complete the ongoing projects but defer some of the stripping and sustaining capital. This will reduce exploration spending and mothball the company’s lowest-margin operations. The company would also discontinue early debt repayments and reevaluate its dividend payments. In a scenario where gold prices remain sustainably above $1,100 per ounce, the company could accelerate its debt repayment and follow up on their most promising exploration projects.
Gold price assumption
It’s also worth mentioning that Newmont could reduce its gold price assumption for the calculation of year-end reserves by $100 per ounce to $1,200 per ounce. The company also plans to maintain its annual dividend of $0.10 at gold prices below $1,300 per ounce.
Many of Newmont’s peers have also taken steps in the past to weather this volatile gold price environment. Goldcorp (GG) and Barrick Gold (ABX) reduced their dividends by 60% in their 2Q15 results. Other miners such as AngloGold Ashanti (AU) and Harmony Gold Mining (HMY) have also opted for portfolio restructuring.
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
CODE : HMY |
ISIN : US4132163001 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Harmony Gold is a gold producing company based in South africa. Harmony Gold develops gold and silver in Papua New Guinea and in South Africa, and holds various exploration projects in South Africa. Its main assets in production are RANDFONTEIN UG, HARMONY 2, KALGOLD, TARGET, ELANDSKRAAL UG OPERATING SHAFT, TSHEPONG, EVANDER - 2, 3 & 5, ELANDSRAND, ELANDSKRAAL, JOEL MINE, WELKOM, EVANDER, EVANDER - MINE ON CARE, EVANDER PROJECTS BELOW INFRASTRUCTURE-EVANDER SOUTH, EVANDER STOCKPILE, BAMBANANI, PHAKISA, FREE GOLD WEST, ST HELENA, JOEL, FREE GOLD SHAFT CARE & MAINTENANCE, FREE GOLD STOCKPILE, RANDFONTEIN SURFACE STOCKPILE, ELANDSKRAAL - DEELKRAAL UG SHAFT ON CARE, ORKNEY UG OPERATING SHAFT, ORKNEY UG SHAFTS ON CARE, MERRIESPRUIT 1, MERRIESPRUIT 3, UNISEL, BRAND 3, MASIMONG, MINES ON CARE-FREE STATE, EVANDER 7, EVANDER 8, EVANDER PROJECT BELOW INFRASTRUCTURE ROLSPRUIT, EVANDER PROJECTS BELOW INFRASTRUCTURE POPLAR, EVANDER OPERATIONS, RANDFONTEIN OPERATIONS, PAMODZI (FREE STATE), DOORNKOP, EVANDER (BELOW INFRASTRUCTURE), NYALA and FREE GOLD in South Africa, HAMATA and WAFI in Papua New Guinea and SOUTH KAL MINES, UNION REEFS, BENDIGO and HIDDEN VALLEY in Australia, its main assets in development are HIDDEN VALLEY & KAVEROI in Papua New Guinea and BLOEMHOEK in South Africa and its main exploration properties are VIRGINIA OPERATIONS, PHOENIX, FREE STATE SURFACE and MIDDELVLEI in South Africa and GOLPU and NAMBONGA in Papua New Guinea. Harmony Gold is listed in France, in Germany, in United Kingdom and in United States of America. Its market capitalisation is 465.9 millions as of today (€ 419.1 millions). Its stock quote reached its highest recent level on July 27, 2012 at 9.99, and its lowest recent point on November 20, 2015 at 0.53. Harmony Gold has 47 442 200 shares outstanding. |