Newmont Mining Corp. upgraded at RBC

An aerial view of Newmont's copper and gold mining pit in Batu Hijau, eastern Indonesia

Newmont Mining Corp. was upgraded to outperform from sector perform at RBC Capital Markets due to improvements in the operating momentum and the disappearance of an M&A-related overhang.

The Colorado-based miner acquired the Cripple Creek & Victor gold mine from AngloGold Ashanti Ltd. for US$820 million in cash earlier this week. The deal is accretive for Newmont, nevertheless its share price is down about 10 per cent in the past week, including losses because the deal was announced on June 21.

RBC analyst Stephen Walker thinks the current share-price weakness presents a beautiful buying opportunity.

He noted that Newmont should benefit in 2015 and 2016 from high-grade copper and gold production at its Batu Hijau mine in Indonesia, along with other catalysts such as new production from its Turf and Long Canyon deposits in Nevada, and the Merian project in Suriname.

Walker also noticed that Newmont is replacing its maturing mine production, as investors are likely to focus on its organic growth projects.