Newmont Mining Corporation (NEM – Analyst Report) has prepaid $100 million toward a 5-year $575 million unsecured amortizing term loan received in Mar 2014. The term loan was utilized to repay $575 million of convertible debt which matured in Jul 2014. The $100 million prepayment also includes the proceeds received by Newmont after the government of Suriname exercised its option to take part in the Merian Gold Project. Newmont aims at improving its financial position and is taking these efforts to enhance shareholder returns along with maintaining its investment grade rating. Newmont has generated $1.7 billion in cost and productivity improvements and $1.4 billion in non-core assets sale since 2013, allowing it to repay debt and invest in profitable growth.
Newmont released third-quarter 2014 results last month. The company had cash and cash equivalents of $1,778 million as of Sep. 30, 2014, up 20.5% from $1,475 million as of Sep. 30, 2013. Meanwhile, long-term debt increased roughly 11% year over year to $6,630 million. Cash from continuing operations in the quarter came in at $328 million. Newmont’s third-quarter 2014 adjusted earnings were 50 cents a share, an improvement from 44 cents recorded a year ago. The results topped the Zacks Consensus Estimate of 18 cents.
On a reported basis, the company posted net income from continuing operations of $210 million or 42 cents per share in the quarter, down roughly 50% from $419 million or $84 cents a year ago. Newmont’s revenues fell around 13.6% year over year to $1,746 million in the quarter. Nevertheless, revenues beat the Zacks Consensus Estimate of $1,739 million. Newmont currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the mining industry are Lake Shore Gold Corp. (LSG), Banro Corporation (BAA – Snapshot Report) and MAG Silver Corp. (MVG –Snapshot Report). All of them carry a Zacks Rank #2 (Buy).
