Newmont Sells Stake to Government - Analyst Blog
May 10 2011 - 4:00AM
Zacks
Newmont Mining
Corp. (NEM) sold its 7% stake in PT Newmont Nusa Tenggara
(NNT), partly owned by Newmont and Japan's Sumitomo Corporation to
the government.
NNT plans to raise about $500
million in a public offering by selling a 10% stake within 12
months.
The divesture was in compliance
with the Contract of Work with the government of Indonesia. The
financial details of the divesture were not disclosed but it is
assumed that the deal was $246.8 million. The stake went to the
state investment agency Pusat Investasi Pemerintah (PIP).
As per the agreement, foreign
shareholders of NNT were supposed to sell a total stake of 51%
gradually to local investors in four years after they started
production.
Jointly, Newmont and Sumitomo sold
a 24% stake to PT Multi Daerah Bersaing, a consortium of the
governments of West Nusa Tenggara province, West Sumbawa regency
and Sumbawa regency, where the mine is located and PT Multicapital,
a unit of Bumi Resources Minerals.
PT Pukuafu Indah, a local NNT
shareholder owns 17.8%, while local firm PT Indonesia Masbaga
Investama holds another 2.2%.
Recently, Newmont reported adjusted
net income of $513 million or $1.04 per share in the first quarter
versus last year’s $408 million or 83 cents per share. The result
eclipsed the Zacks Consensus Estimate of 96 cents per share.
Total revenue was $2.5 billion, up
10% year over year, below the Zacks Consensus Estimate of $2.6
billion.
Newmont reported attributable gold
and copper production of 1.3 million ounces and 57 million pounds,
respectively, in the quarter at costs applicable to sales of $557
per ounce, and $1.11 per pound on a co-product basis.
The company faces stiff competition
from Barrick Gold Corporation (ABX) and
AngloGold Ashanti Ltd. (AU).
Newmont has a short-term (1 to 3
months) Zacks #3 Rank ('Hold') and a long-term Outperform
recommendation.
BARRICK GOLD CP (ABX): Free Stock Analysis Report
ANGLOGOLD LTD (AU): Free Stock Analysis Report
NEWMONT MINING (NEM): Free Stock Analysis Report
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