Why Newmont Mining Corp's Shares Dropped

Is this meaningful or just another movement?

Travis Hoium
Travis Hoium
Jan 31, 2014 at 4:08PM
Energy, Materials, and Utilities

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of gold and copper miner Newmont Mining Corp (NYSE:NEM) fell 10% today after the company announced preliminary results and guidance.

So what: In 2013, gold production came in at 5.1 million ounces and copper production was 144 million pounds, both at the top end of guidance. But the 2014 outlook of 5.0 to 5.3 million ounces of gold, and 160 to 175 thousand tonnes of copper, was below expectations. 

Now what: Full earnings will be out on Thursday, February 20, so investors will find out more then. What we know is that gold production won't be up as expected, and that puts less leverage on operations with gold prices in decline. I'm certainly not betting on gold moving higher right now, and that alone will keep me out of the stock; but flat production this year doesn't help either.