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Newmont Goldcorp (NEM) Provides 2020 and Long-Term View

Zacks Equity Research

Newmont Goldcorp Corporation NEM has provided its 2020 and long-term views.

The company expects attributable gold production of 6.7 million ounces for 2020. Gold production is projected in the range 6.5-7 million ounces in the long-term through 2024, which is expected to be supported by a steady base from Tanami, Boddington, Ahafo, Penasquito and the Nevada Gold Mines joint venture.

For 2020, gold costs applicable to sales (CAS) are expected to be $750 per ounce and all-in sustaining costs (AISC) are pegged at $975 per ounce. The company expects CAS and AISC to improve in the long term through 2024.

Attributable sustaining capital is projected at $975 million for 2020 and is likely to remain between $0.9 billion and $1.1 billion in the long term through 2024.  

The company’s outlook highlights steady gold production and continued investment in operating assets as well as potential growth prospects.

Newmont Goldcorp also provided an update on the Tanami Expansion 2 (Australia) project. The company expects the expansion to boost average annual gold production by around 150,000-200,000 ounces per year for the first five years starting in 2023. This is likely to lower operating costs by nearly 10%. Moreover, the North America-based Musselwhite Materials Handling project is expected to be fully operational in mid-2020.

Newmont Goldcorp’s shares have gained 14.7% in the past year compared with 48.2% surge of the industry.  

In November, the company revised its outlook for 2019. It now expects attributable gold production for 2019 to be 6.3 million ounces, down from 6.5 million ounces projected earlier.

For 2019, all-in sustaining costs for gold are projected to be $965 per ounce, down from the previous expectation of $975. Costs applicable to sales expectation for gold are $715 per ounce compared with $735 expected earlier.

Zacks Rank & Key Picks

Newmont Goldcorp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd KL, Impala Platinum Holdings Ltd IMPUY and Polymetal International plc AUCOY, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland Lake Gold has an expected earnings growth rate of 97.1% for the current year. The company’s shares have surged 90.3% in the past year.

Impala Platinum Holdings has projected earnings growth rate of 255.2% for 2019. The company’s shares have rallied 225.8% in a year.

Polymetal International has an estimated earnings growth rate of 40.5% for the current year. Its shares have appreciated 52.6% in the past year.

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