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Newmont Mining +1% on reports of increased investor pressure for break-up

  • Investors are losing patience with Newmont Mining (NEM) after the share price has been cut in half since 2011, urging the miner to either rekindle the aborted deal with Barrick Gold or break itself up, WSJ reports.
  • Investors "are frustrated because they wanted something to happen... [NEM] hasn't communicated the specifics of what they're doing," says USAA portfolio manager Dan Denbow.
  • "What we want is synergies from the Nevada operation," says Chris Mancini of Gabelli Gold Fund, one of NEM's largest investors; he says he has told the company it should merge with Barrick and then spin off the combined Nevada operations.
  • Other analysts say losing scale isn't always the best option, given that it becomes more difficult to raise debt; others say the various scenarios struggle to take into account NEM's troubled Indonesian copper operation.
  • NEM +1% premarket.
Comments (4)
  • User 16336642
    , contributor
    Comments (37) | Send Message
     
    Possibly the worst run miner on earth. Run by a lawyer and the previous CEO was incompetent as well.
    9 Jul, 08:58 AM Reply Like
  • chuck lewis
    , contributor
    Comments (335) | Send Message
     
    chuck lewis editor The Lewis Letter
    Well said, reminds me of Peabody Energy. Same mindset
    as stuckholders suffer. They should all fall down a mine shaft
    while a foreign entity takes over or an activist seeking a
    great asset. 90 million ozs. of gold reserves is not a bad start.
    9 Jul, 11:14 AM Reply Like
  • james.
    , contributor
    Comments (239) | Send Message
     
    Contrary to the above comments on NEM, it has excellent leadership. NEM has sold off $800 Million of assets in the recent 18 months to adjust its portfolio, as per the statement of NEM Executive VP. Moreover, NEM proudly announced a $3.5 Billion loan from its bank earlier in 2014, some of which will be used to pay off a $600 Million loan maturing this month, and the rest available for a win-win acquisition if desirable, or expansion of existing mines. Conversely, ABX is deeply in debt, and the main reason Monk wanted to merge with NEM was to get his hands on the $3.5 Billion Loan that NEM got about 6 months ago as per the proud announcement by the NEM CFO at that time.
    Moreover, the Force Majure recently imposed by NEM on their Indonesian Copper Mine output was a very smart move, and in accordance with its CoW (Contract of Work) signed in 1986; this CoW allows NEM to pay its Indonesian workers only 20% of their usual pay while simultaneously shipping their Copper Concentrate stored in their full bin to the local Copper Refinery, which this will bring NEM approximately $0.10 more EPS profit to their Q3 and also Q4 Earnings Report. The CoW stipulates the taxation NEM pays to the Indonesian Government, which was contradicted by the poorly conceived Indonesian Law which conflicts with the legal CoW; NEM has now filed for Arbitration in this regard, which NEM will likely win due to the CoW predating the new and conflicting Indonesian Government Law. The NEM Q2 Earnings report will be published after the close on July 29, and the related Conference Call will be at 10 a.m. July 30; I believe that NEM earnings will beat the mean Analysts' forecasts by more than that of the Q1 Earnings report, as NEM continues to suffer from bad reporting as is seen above by harsh, condescending comments.
    The P&F Chart for NEM now has a Price Objective of $38 per share, using standard Software, and my selection of Box Size of 4.4% . Similarly , other P&F Chart price Objectives are GLD = $169 equivalent to Gold price of $1760 to be reached in the coming months in 2014, SLV = $27 equivalent to Silver = $28 , and HL = $5.91 . Look to it ! July 9, 2014 at 10:38 a.m. PDT.
    9 Jul, 01:38 PM Reply Like
  • goldprospecter
    , contributor
    Comments (3) | Send Message
     
    Merging ABX and NEM would be like mixing oil and water. But breaking up NEM into smaller regional companies could make sense. The Denver headquarters costs about $80 / oz to maintain, plus probably another $80 / oz in working costs delegated to the regions. You would save those costs and allow the regions to operate more efficiently.
    11 Jul, 11:46 AM Reply Like
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