Loading ...Newmont has a chance to cut its debt by another 3 billion + and have a net debt of zero
http://finance.yahoo.com/news/indonesia-group-said-seek-funding-091726089.html
They have a chance to get out of Indonesia. Indonesia has been nothing but problems with the local government antagonizing both Newmont and Freeport. They fail to recognize contracts of work, apparently ask for bribes according to the outgoing FCX Indonesia CEO. Operating there is a minefield. Newmont owns 45 percent of Batu Hijau and if I’m reading this correctly, a 3 billion USD offer is about to hit the table. Groups in Indonesia have been trying to buy this for years but the offers are short… I think 3 bln could be the magic number. Newmont has 6 billion in debt and 3 billion in cash… if they can get 3 billion more in the bank, they will have a net debt of ZERO and this stock will have a massive rerating higher to the valuation level sported by a name like Agnico Eagle. We are talking about a stock heading to all time highs. I know this sounds crazy where the stock is right now, but this is the valuation case. I have run through so many scenarios, run so many numbers on this name and the market is giving a massive massive gift here in Newmont. Even if they lose the production from Indonesia, its 400,000 ounces of gold (Newmont produces over 5 mln ounces) is only 8 percent of production yearly… and copper. I don’t know about you, but I hate when these mining monkeys mix copper and gold. When I buy gold I want a gold company… not a copper company, not a copper and gold company, just a gold company. Think about it… monetizing an asset that makes up 8-10 percent of their yearly gold production for 25 percent of their enterprise value while leaving a hostile juristiction.
Newmont is my largest position by far. Gary Goldberg is the best CEO in mining. He is a miner and everything he has done so far has been exceptional since taking the helm 3 years ago. I have been pounding the table here on this name. I cannot stress enough how absolutely undervalued this name is to both traditional value metrics and its peers. It is due for a massive rerating. It should be 40+ RIGHT NOW.
http://goldtadise.com/?p=358390
http://goldtadise.com/?p=358781
its still in stage 4 decline. the bulls have to clear the 30 week EMA and keep price above it, on a weekly close, at least for 3 weeks. i know the fundamentals are good compared to the other large caps, but i have found fundamentals mean nothing when sentiment is poor. so its up to the bulls to prove it. whilst waiting, there are better companies, as the sentiment is much more positive towards them, and they are in stage 1 or 2 already.
I think that my timeframe is a bit longer than your timeframe, Spock. You tend to be in and out of these things rather quickly in a control alt delete type fashion. I have been systematically buying Newmont under 17.50 for 6 months. I’m not trading for monthly or quarterly performance. I’m building a massive position.
Cashcosts, I really appreciate your knowledge on the pm miners, would it be possible for you to make a post summarizing the companies you have right now..? Just a list would be fine, with short comments would be even finer..!
Cashcosts, this stuff is outstanding work, dude. Never would have thought of even looking at NEM – it has been such a dog, it completely dropped off my radar, replaced with the likes of RGLD, FNV, AEM, etc. I’ll be picking up a few shares of this one. Should a gold rally develop this gang is really highly leveraged to reap the rewards in the form of ballooning profits!