Newmont Mining Corporation NEM said that its Twin Creeks Underground expansion project has achieved commercial production and the project was completed on schedule for $42 million (below initial guidance of $45-$55 million).
The project enables the company to add higher-grade, lower-cost gold production at its Twin Creeks operation in Nevada. The mine will add 30,000-40,000 ounces of gold per annum at all-in sustaining costs of $650-$750 per ounce for the initial five years of production. Moreover, the new ore will enable the company to process stockpiled ore, which was earlier classified as waste, and extend processing life to 2030. The project also has an internal rate of return of roughly 20%.
Per the company, this expansion improves recoveries at Twin Creeks and extends profitable production, serving as a platform to further explore the deposit. Notably, this is the sixth time that the company has completed a project on or ahead of schedule and at or below budget over the last five years.
Earlier this year, Newmont and Barrick Gold Corporation ABX gave approval for the Turquoise Ridge Mine Optimization project involving sinking of a new production shaft to access the richest part of the deposit. It is expected to lower unit costs by more than 20%, increase ventilation capacity and boost ore production rates to roughly 1.1 million tons per year when it comes on line in 2022.
Over the last five years, Newmont has developed six new mines and expanded into four continents including Tanami in 2017 and Merian and Long Canyon in 2016. In 2015, Newmont completed value-accretive acquisition of Cripple Creek and Victor, and delivered profitable growth at the mine in 2016.
Newmont’s shares have gained 16.6% in the past year, outperforming the industry’s rise of roughly 1.5%.
Zacks Rank & Stocks to Consider
Newmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are The Chemours Company CC and Westlake Chemical Corporation WLK, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term earnings growth rate of 15.5%. Its shares have gained 15.3% in a year.
Westlake Chemical has an expected long-term earnings growth rate of 12.2%. Its shares have rallied 61.6% in a year.
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