Newmont Mining Corporation
) has entered into a deal to sell its Midas underground operation
and mill complex in Nevada to Klondex Mines Ltd. for a total
consideration of over $83 million. The market reacted negatively
to the news and Newmont's share price dropped as much as 3.5% in
the trading session following the news.
Newmont is selling its Midas assets to optimize its portfolio
and focus on core assets that have longer life and lower cost.
Newmont will sell the assets to Klondex for a purchase price of
$55 million, subject to customary adjustments, and the
replacement of Newmont surety arrangements with Nevada and
federal regulatory authorities amounting for roughly $28 million.
In addition, Newmont stated that it will receive 5 million
purchase warrants for Klondex common shares with a 15-year term,
having an exercise price to be determined on the closing date of
Newmont expects to close the deal after receiving the
regulatory and third party approvals by early 2014.
Last month, Newmont released its third-quarter 2013 results.
The company's adjusted earnings of 46 cents a share fell 46.5%
from the year-ago quarter's earnings of 86 cents, but exceeded
the Zacks Consensus Estimate of 32 cents.
On a reported basis, the company's profit from continuing
operation of $429 million or 86 cents per share in the quarter
was up 7% from $400 million or 81 cents a year ago. The
bottom-line benefited from the sale of Newmont's investment in
Canadian Oil Sands Limited, and higher production from Nevada and
Other Australia/New Zealand operations.
Newmont's revenues declined nearly 20% year over year to $1,983
million in the quarter, missing the Zacks Consensus Estimate of
Newmont currently carries a Zacks Rank #3 (Hold).
Companies in the gold mining industry with more favorable
Zacks Rank are
Golden Star Resources, Ltd.
AngloGold Ashanti Ltd.
Lake Shore Gold Corp.
). While Golden Star holds a Zacks Rank #1 (Strong Buy), both
AngloGold Ashanti and Lake Shore carry a Zacks Rank #2 (Buy).
ANGLOGOLD LTD (AU): Free Stock Analysis
GOLDEN STAR RES (GSS): Free Stock Analysis
LAKE SHORE GOLD (LSG): Free Stock Analysis
NEWMONT MINING (NEM): Free Stock Analysis
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