Kinross Gold Corporation (USA) (KGC), Goldcorp Inc. (USA) (GG): Is Newmont Mining Corp (NEM) Destined for Greatness?

The recent turmoil in gold prices arose from fears that the Federal Reserve would exit its bond-buying program. However, Newmont CEO Gary J. Goldberg expects that the company would be able to sustain gold prices between $1,100 per ounce and $1,200 per ounce in 2013, a level that has not yet been breached. With current prices in the $1,350-per-ounce range, Newmont Mining Corp (NYSE:NEM) can absorb a nearly 20% drop in gold prices without suffering too severely — in theory, anyway.

Falling gold prices have also affected other miners such as Kinross Gold Corporation (USA) (NYSE:KGC) and Goldcorp Inc. (USA) (NYSE:GG), whose revenues fell dramatically during the year. Sean Williams notes that Kinross Gold Corporation (USA) (NYSE:KGC) has delayed the expansion plan of Tasiast mine in Mauritania because of excessive labor and production costs, estimated at $2.7 billion. Ecuador’s government also demanded a large stake in Fruta del Norte project, which forced Kinross Gold Corporation (USA) (NYSE:KGC) to walk away from it. Goldcorp Inc. (USA) (NYSE:GG) is also weighed down by high capital costs, with a $2 billion impairment charge recently marked against its Penasquito mine. Newmont may be one of the larger players, but it’s not necessarily in much better shape. A good deal of the gold mining industry’s future is still out of its hands.

Putting the pieces together
Today, Newmont has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Newmont Mining Destined for Greatness? originally appeared on Fool.com and is written by Alex Planes.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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