Newmont to Start Conga by 2015 - Analyst Blog
13 Gennaio 2012 - 7:03PM
Zacks
Newmont Mining Corporation (NEM) has announced
its plans to start its Minas Conga gold project in Peru by
2015.
Conga, a joint venture between Newmont and its Peruvian partner
Buenaventur, is a $4.8 billion project. Environmental protests from
local community and political leaders forced the company to suspend
the construction activities at the project in November 2011.
The inhabitants were afraid that the project, which is the
biggest investment in the history of Peruvian mining, would cause
pollution to sap water supplies used by farmers. The protesters
also urged the government to issue a decree that would ban the
project. However, in December 2011, the opponents accepted a review
of the mine’s environmental impact study.
Moreover, Newmont is waiting for the government’s decision for
hiring international consultants to review the project’s
environmental impact study.
In Late October 2011, Newmont released its third-quarter 2011
results. The company’s adjusted net income rose $635 million or
$1.29 per share in the third quarter from last year’s $533 million
or $1.08 per share. The result exceeded the Zacks Consensus
Estimate of $1.24 per share.
Total revenue was $2.7 billion in the third quarter, up 6% year
over year.
Newmont reported attributable gold and copper production of 1.3
million ounces and 58 million pounds, respectively, in the quarter,
at costs applicable to sales (CAS) of $622 per ounce, and $1.10 per
pound on a co-product basis.
For fiscal 2011, the company reiterated its previous expectation
of attributable gold production of approximately 5.1 million to 5.3
million ounces, with attributable copper production of 190 to 220
million pounds. Costs applicable to sales are expected to be
between $560 and $590 per ounce for gold. Costs applicable to
sales are anticipated to be between $1.25 and $1.50 per pound for
copper.
The company currently plans to spend $2.1 to $2.5 billion in
attributable capital expenditures in 2011, or $2.7 to $3.0 billion
on a consolidated basis.
The company faces stiff competition from Posco
(PKX) and Arcelor Mittal (MT).
Newmont has a short-term (1 to 3 months) Zacks #3 Rank (Hold)
and a long-term Neutral recommendation.
ARCELOR MITTAL (MT): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis Report
POSCO-ADR (PKX): Free Stock Analysis Report
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