Newmont Says Every $100 Gold Gain Adds $350 Million to Cash Flow
- `I'm very comfortable with our debt structure': CEO Goldberg
- Company is still bullish on gold prices in long term
“I’m very comfortable with our debt structure overall,” Goldberg said. “We’re still bullish long term for gold.”
Gold advanced 10 percent since the end of January on Comex in New York, poised for the biggest February gain since futures trading data began in 1975. Turmoil across global equity and currency markets has sparked demand for a haven.
At the same time, there is increasing doubt that the Federal Reserve will move as quickly as it planned to raise rates because the expansion may weaken. That increases the allure of bullion as a store of value. Prices fell in the previous three years, reaching a five-year low in December as Fed officials increased borrowing costs for the first time in almost a decade.
“As long as real interest rates stay down below 3 percent a year, that’s generally good for gold,” Goldberg said. At “$1,200 or $1,300 an ounce, we still see it as a good price where we can deliver good free-cash flow and dividends back to shareholders."
While larger rival Barrick Gold Corp. has been selling assets, Newmont has responded to a prolonged slump in gold prices by continuing to expand. In June, the company agreed to buy the Cripple Creek & Victor mine in Colorado for $820 million and in October it announced plans to expand its Tanami operations in Australia.
Buying more assets would depend “on the value of the opportunity, if it makes sense long term,” Goldberg said in an interview on Bloomberg Television.
What Are Newmont Mining's Acquisitions Plans?
Link: http://www.bloomberg.com/news/articles/2016-02-29/newmont-says-every-100-gold-gain-adds-350-million-to-cash-flow
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