February 26th, 2009:
Newmont Mining Corp (NEM)
Current Price: $40.68
www.newmont.com
Newmont Mining (NEM) certainly goes for the gold. The company is among the world's top gold producers (with Barrick ahead of AngloGold Ashanti), following acquisitions in Canada, Bolivia, and Australia. Newmont produces some 6 million ounces of gold annually; it has proved and probable reserves of more than 85 million ounces of gold. Other metals that the company mines include copper, silver, and zinc. Operations in North America and South America account for about half of Newmont's production. It also has mining facilities in Australia, Indonesia, New Zealand, and Uzbekistan.
NEM was founded in 1912 and has been trading on the New York Stock Exchange (NYSE) since 1925. NEM currently has approximately 34,000 employees and contractors worldwide.
We consider NEM to be one of the most solid and safe Gold stocks in the market today. Their revenues have grown consistently from $4.4 billion in 2005, to $5 billion in 2006, to $5.5 billion in 2007 and $6.2 billion in 2008. NEM is profitable with a trailing P/E ratio of 23.
Analysts are projecting NEM to generate revenues in 2009 of $6.22 billion and $6.76 billion in 2010, but with Gold prices rapidly rising we believe these estimates are extremely conservative.
NEM's market cap may be only $21.4 billion today, but five years from now it is possible that NEM could be one of the largest companies in the world in terms of market cap.
If we get to a point where there is a worldwide collapse in all currencies, the world may eventually need to implement an International Gold Standard and the largest Gold producers like NEM will greatly benefit.
Even with Gold getting ready to hit a new all time high, NEM is still far off of its high set in 2006 of $61.80. There is no doubt in our minds that NEM is headed back there soon and ultimately will go much higher.
A co-founder of NIA has purchased 600 shares of NEM at an average price of $51.76 and could sell them at any time.
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