Germany Chancellor plans lithium deal with Serbia after Rio ruling
Olaf Scholz plans to visit Serbia this week to secure supplies of lithium that are critical for the nation’s energy transition and auto industry.
While there is much discussion in the gold industry currently as to whether gold stocks are undervalued in relation to the seemingly unstoppable run on the gold price, one company that appears to be bucking the trend is Newmont Mining (TSX:NMC).
Denver-based Newmont, the world’s second largest gold producer, said in April it would link its dividend to the price of gold, and on Monday, the company announced it plans to boost its dividend payments to shareholders if gold stays above $1700/oz.
The news got a swift reaction from the markets, with the stock jumping 5% yesterday to close at a record $69.70, up 18% from the 52-week low reached in March. The stock’s upward march was also helped by Newmont CEO Richard O’Brien’s prediction Monday that gold will rise to $2000/oz by the end of the year and $2300 by the close of 2012 because of investor demand for the metal resulting from turmoil in financial markets:
“We’re going to continue to be in a bullish gold-price environment for the next five to seven years,” O’Brien told Bloomberg at the 2011 Denver Gold Forum in Colorado Springs, Colorado. “It’s going to take that long for people to get their fiscal house in order.”
As the price of gold has climbed 25% this year, Newmont’s stock has risen 7.9%.
The Wall Street Journal’s Marketblog remarks on the seeming invincibility of Newmont in the face of the bear market gold companies find themselves operating in:
We once keenly observed that Newmont was a stock that seemed likely to survive the apocalypse and/or a full-on nuclear blast, given its seeming invincibility during the broader market unpleasantness that began in early August. Its shares have gone in one direction and one direction only — up — since August 9, which is when the S&P was at its worst.
Newmont’s success is all the more remarkable considering its cost of production has increased, not decreased, to $588 an ounce compared to $507 an ounce a year earlier, the company said in July, comparing second-quarter results.
