Newmont Mining Corporation
) has entered into an agreement with Klondex Mines Ltd. to
process Klondex's higher grade mineralized material from the Fire
Creek gold and silver project in Nevada. The proceeds from the
materials processing will be utilized by Klondex to fund its own
waste development. A second drill has been intended to follow up
on recent discoveries.
Per the agreement, Newmont will handle, mill and refine the
minerals as well as tail the disposals. Klondex on the other
hand, will be delivering the materials. Shipments will be made in
lots of 1000 tons and the first such shipment is expected in the
month of Aug 2013. Shipments are expected to continue through the
end of 2014 as high grade material is generated. As per Klondex,
all the near term shipments of mineralized material will be sent
for processing to Newmont. It includes the material for the month
of May that was previously scheduled for direct-smelter
Newmont will make an upfront payment of 60% of the amount to
Klondex and the first payment is expected to be paid in Aug.
Newmont will pay the remaining amount on finalization of
As per Klondex, the agreement with Newmont is part of the
company's method to monetize its high grade material, and will be
a great opportunity to improve margins and separate the high
Newmont, which is among the leading gold mining companies
), recently released its second-quarter 2013 results. The company
posted adjusted (barring one-time items including non-cash asset
impairment charges) loss of 10 cents a share, in contrast to last
year's earnings of 59 cents. The results also missed the Zacks
Consensus Estimate of earnings of 41 cents.
Newmont currently carries a short-term Zacks Rank #5 (Strong
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Pretium Resources Inc
), which also belong to the gold mining industry, carries a Zacks
Rank #2 (Buy).