Newmont Stock Jumps as Gold Price Rises Amid Joint Venture Resolution

Newmont Corporation (NEM) saw its stock jump 34.5% in August as gold prices rose throughout the month.

The price of gold increased, and given the operational leverage miners have to commodity prices, it's not surprising that Newmont's stock took a sharp turn upwards.

The main operational and administrative positive for the month came from an agreement with Barrick Mining regarding their Nevada Gold Mines joint venture, announced on Aug. 10. The two companies agreed that Newmont would pay Barrick $1.95 billion to include certain Barrick assets in the joint venture, and Newmont consented to Barrick's intended initial public offering (IPO) of its North American gold assets.

The resolution of the dispute helps Barrick achieve its strategic objectives and derisks Newmont's stock as well. It also allows the joint venture to generate operational synergies by adding the new assets, thereby increasing the value of Newmont's 38.5% stake.