Shares of Newmont Mining (NYSE:NEM) jumped Thursday on news it will raise its annual gold production 35 percent by 2017.
The company estimates it will mine from 5.1 million and 5.3 ounces of gold in 2011.
The $2.4 billion acquisition of Fronteer Gold (AMEX:FRG) will help the company reach that goal.
Newmont said it will spend about $7 billion to boost production to the levels its pursuing. It isn't clear if that means more acquisitions or expanding existing mines.
Expansion of current projects can be less costly, but the lower quality of ore at some mines can actually increase costs.
If gold prices remain at or above current levels of over $1,400 an ounce, Newmont said they'll generate a return of 20 percent.
Concerning dividends, Newmont added it will pay an additional 20 cents a share for each $100 an ounce increase in the average realized gold price.
Newmont closed Thursday at $58.29, gaining $1.84, or 3.26 percent.
Friday, April 8, 2011
Newmont Mining (NEM) Raising Production 35 Percent
Labels:
Dividend,
Fronteer Gold,
Newmont Mining Corp
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