Is Newmont (NEM) Stock Outpacing Its Basic Materials Peers This Year?

Fission Uranium FCUUF announced that Canada’s Minister of Innovation, Science and Industry extended the national security review related to its pending merger with Paladin Energy Limited until Dec. 30, 2024. FCUUF has cautioned that there is no guarantee that the clearance, per the Investment Canada Act (ICA), will be obtained in time and failure to do so could make the deal fall apart.

FCUUF received the original notice from the minister on Oct. 1, 2024. It was sent as per section 25.3 of the ICA. The merger, if it goes through, is expected to create a world-class uranium producer with a diversified presence across leading uranium mining jurisdictions of Canada, Namibia and Australia.

Advancement on Fission Uranium-Paladin Merger

Fission Uranium inked the deal with the Australian miner Paladin in June 2024. FCUUF shareholders voted in favor of the acquisition at the special meeting held on Sept. 9, 2024.

On Sept. 26, Fission Uranium completed the hearing before the supreme court of British Columbia regarding the approval of the final order for its acquisition by Paladin. It was approved by the court on Oct. 8.

Fission Uranium’s acquisition by Paladin, however, remains opposed by CGN Mining Company Limited, which holds an 11.26% stake in FCUUF. CGN is a subsidiary of China General Nuclear Power Corp.

The closure of the acquisition remains subject to the receipt of clearance under the ICA and other customary conditions.

FCUUF-Paladin Merger to Create Leading Uranium Producer

Per the agreement, Paladin would acquire FCUUF’s outstanding shares for an implied total equity value of C$1.14 billion ($0.846 billion).

Paladin is an independent uranium producer with 75% ownership of the world-class long-life Langer Heinrich Mine located in Namibia. It also owns a portfolio of uranium exploration and development assets in Canada and Australia. Through its Langer Heinrich Mine, it delivers uranium to major nuclear utilities across the world. It has a 17-year estimated mine life and a nameplate annual capacity of 6 million pounds of uranium.

The acquisition of Fission Uranium will make Paladin the 100% owner of the Patterson Lake South uranium property. It is a proposed high-grade uranium mine and mill in Canada’s Athabasca Basin region. The feasibility study for the property projects a 10-year mine life with an annual production of 9.1 million pounds of uranium.

Fission Uranium recently staked four new properties in the Athabasca Basin region of northern Saskatchewan — Typhoon, Corsair, Merlin and Seahawk. Per the company, all of these have the potential for hosting high-grade uranium.

The acquisition, if successful, will create a company with a pro-forma market capitalization of $3.5 billion. It will be placed among the largest pure-play global uranium companies with a combined mineral resource of 544 million pounds of uranium and ore reserves of 157 million. It will have a solid portfolio of exploration, development and production assets, and a substantially increased international capital markets exposure.

This move will help the combined company to capitalize on the growing demand for uranium, which is surging due to factors like increasing electricity needs, decarbonization efforts and data center expansion.

Fission Uranium Stock’s Price Performance

Shares of Fission Uranium have fallen 21.7% in the past year against the industry's 27.9% growth.

Investors with an interest in Mining - Gold stocks have likely encountered both Newmont Corporation (NEM) and Alamos Gold (AGI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Newmont Corporation has a Zacks Rank of #2 (Buy), while Alamos Gold has a Zacks Rank of #3 (Hold) right now. This means that NEM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

NEM currently has a forward P/E ratio of 13.65, while AGI has a forward P/E of 24.57. We also note that NEM has a PEG ratio of 0.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AGI currently has a PEG ratio of 0.84.

Another notable valuation metric for NEM is its P/B ratio of 1.64. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AGI has a P/B of 2.24.

These metrics, and several others, help NEM earn a Value grade of B, while AGI has been given a Value grade of C.

NEM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that NEM is likely the superior value option right now.

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