Kilo Goldmines (KGL)

[investorwisdom]

Newmont Mining Invests in Africa Through Loncor Resources

August 10, 2011 | includes: LON, NEM

Newmont Mining Corporation (MEM) is the world’s largest gold producer operating on five continents segmented into four operating regions including North America, South America, Asia Pacific and Africa. Newmont has been operating since 1921 and has accumulated 93.5 million attributable ounces of gold, 9.4 billion pounds of copper reserves and 34,000 employees and contractors. In 1962, Newmont revolutionized the gold mining industry by developing the world’s first discovery of submicroscopic or “invisible gold.” That technology was instrumental in discovering billions in untapped and unknown gold resources in the Nevada Carlin Trend. Newmont’s sophisticated proprietary geochemical and geophysical techniques led to the highly successful Batu Hijau copper and gold discovery in Indonesia. Today, Newmont is applying its proven technological advantages in regions such as western and Central Africa. We believe it is this technological edge that represents part of Newmont’s hidden value.

In order to continue its successes, Newmont is focused on replacing declining production in North America, South America and Asia Pacific with new investments in growth regions of Africa. Newmont’s most recent quarterly financial results demonstrate where the company is headed in its quest for new gold resources. The company is accelerating its investments in Africa and we believe any serious gold investor should be following Newmont’s lead and look to Africa for untapped sources of gold.

Africa is generating the company’s lowest costs of production, only production growth and the company’s only declining cost structure. In addition, we believe, Africa’s status as a largely unexplored continent, which can benefit from Newmont’s technological leadership, assures exciting exploration and development potential ahead. This is not currently priced into the stock. Investors only have to look at the company’s position in the established and growing Ghana gold fields to understand the upside potential of this company. In addition, Newmont has ventured into one of the richest of all gold regions on the African continent recently with its 16.8% acquisition of, and strategic technical services agreement with Loncor Resources (LON). Loncor allows Newmont to help explore the massive potential riches of the Congo with its 4,550 square kilometer Archean greenstone belt which could be one of the last untapped sources of elephant gold deposits available. To date, over 80 million oz have been discovered in neighboring greenstone belts in DR Congo and Tanzania. 20 million of those ounces were discovered in the Geita deposit in Tanzania by Loncor’s President Peter Cowley while he was heading up Ashanti’s gold exploration activities. In addition, Loncor holds another 17,000 square kilometer track of highly prospective land that represents additional exploration potential in the heart of Africa. We believe this long-term group of assets and focused investment in Africa will assure Newmont investors a growing stream of dividends for the next 90 years.

Newmont’s Gold Production Growth Region – Africa

As seen in Chart 1.1, Africa is Newmont’s only growth region in terms of current production. While North American production fell 11% in Q2 ’11 over Q2 ’10 and fell 5% on a 6 month basis, South America fell 3% and 19% over the respective time periods while Asia Pacific fell 18% and 12% over these periods. Only African production grew 11% in Q2 ’11 over Q2 ’10 and a whopping 32% during the 6 month period.

http://seekingalpha.com/article/286433-newmont-mining-invests-in-africa-through-loncor-resources