Newmont (NEM) Declares End of Strike at Mexico's Penasquito Mine
Newmont Corporation NEM said that it has reached an agreement with the National Union of Mine, Metal and Allied Workers of the Mexican Republic to end the strike at the company's Penasquito mine in the Mexican state of Zacatecas, which began on Jun 7, 2023. On Oct 13, 2023, Newmont and the Union presented the agreement to the Mexican Labor Court, which approved it, bringing the strike to an end.
The strike was initiated by the Union demanding Newmont pay additional profit sharing equal to double the amount agreed upon one year earlier, as well as other claimed violations of the Collective Bargaining Agreement.
The agreement specifies that Newmont will not pay any additional incremental profit sharing for 2022. This was the reason for the strike, and the profit-sharing payments made by the company this year were entirely compliant with Mexican law and the Collective Bargaining Agreement.
Also, if the Penasquito mine does not make a profit in 2023 as a result of the strike, Newmont agreed to pay an additional bonus in the second quarter of next year, equal to two months' salaries, as it acknowledges the hardship employees have faced given the length of the strike. Employees will also get a fixed payment from Newmont that would roughly equal 60% of wages lost since the strike started on Jun 7, 2023. The goal of this payment is to lessen the financial impact that the Union-initiated strike has placed on the company's workers.
Shares of NEM have lost 4% over the past year against a 18% rise of its industry.
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Newmont, on its second-quarter call, said that it is on track to achieve attributable gold production guidance of 5.7-6.3 million ounces. The company also expects gold costs applicable to sales of between $870 and $970 per ounce, and all-in-sustaining costs within $1,150-$1,250 per ounce.
The company expects a rise in gold production through ongoing investments in operating assets and promising growth prospects.
Newmont Corporation Price and Consensus
Newmont Corporation price-consensus-chart | Newmont Corporation Quote
Zacks Rank & Key Picks
Newmont currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Commercial Metals Company CMC, Carpenter Technology Corporation CRS and The Andersons Inc. ANDE.
Commercial Metals carries a Zacks Rank #1 (Strong Buy). CMC delivered a trailing four-quarter earnings surprise of roughly 21.7%, on average. The stock is up around 0.8% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology currently carries a Zacks Rank #1. The stock has rallied roughly 88.4% in the past year. CRS beat the Zacks Consensus Estimate in three of the last four quarters while meeting in one. It delivered a trailing four-quarter earnings surprise of 9.8%, on average.
Andersons currently carries a Zacks Rank #1. The stock has gained roughly 51.4% in the past year. ANDE beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 64.4%, on average.
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