Newmont to Invest in Autonomous Haulage System at Boddington

Newmont Corporation’s NEM board has recently given unanimous approval for the investment in an Autonomous Haulage System (AHS) at Boddington, Australia. The investment is expected to boost productivity and safety in addition to extending the mine’s life.

Newmont’s Boddington mine is expected to be fully operational in 2021. Once fully operational, it is expected to become the world’s first open-pit gold mine with an autonomous haul truck fleet. The company stated that a fleet of autonomous CAT 793F mining trucks will be fully operational in 2021 at the mine.

Newmont also stated that Boddington is delivering strong performance. The company’s investment in autonomous haul trucks is likely to generate an IRR of more than 35%. It will also have more controlled and efficient haulage operation.

The company expects net investment in Boddington’s AHS to be $150 million. Per Newmont, it is expected to extend the mine’s life by at least two years. Additionally, there is potential from the replication of the AHS at Newmont’s other operations.

Autonomous Caterpillar haul trucks at Boddington will feature rigorous safety controls. This will lower employee’s exposure to potential vehicle interactions, which will further minimize injury rates. Newmont is also providing opportunities to haul truck drivers for reskilling and redeployment to other roles that will support the AHS. Notably, Boddington is Western Australia’s largest gold producer. The mine directly employs around 2,000 people.

Newmont’s shares have surged 43.8% in the past year against the industry’s decline of 5.9%.

Newmont reported adjusted earnings of 50 cents per share in fourth-quarter 2019, which beat the Zacks Consensus Estimate of 48 cents.

The company expects attributable gold production for 2020 to be 6.4 million ounces. For 2020, all-in sustaining costs for gold is projected at $975 per ounce and the cost applicable to sales expectation for gold is $750 per ounce.

Zacks Rank & Key Picks

Newmont currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ, Novagold Resources Inc. NG and Impala Platinum Holdings Limited IMPUY, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has an expected earnings growth rate of 353.7% for 2020. The company’s shares have surged 97.6% in the past year.

Novagold has an expected earnings growth rate of 11.1% for fiscal 2020. Its shares have returned 140.1% in the past year.   

Impala Platinum has an expected earnings growth rate of 465.5% for fiscal 2020. The company’s shares have surged 163.4% in the past year.

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