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Newmont 8-K Report, Financial Results (Jul 24, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed July 24, 2024
Period End
July 24, 2024
Securities
NEMNEMCL
In the record · 2016–202610-K1210-Q338-K155

NEM filed 12 annual reports (10-K), 33 quarterly reports (10-Q) and 155 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’17May ’17
  2. Material agreement8-K · Dec ’19Dec ’19
  3. Leadership change8-K · Sep ’22Sep ’22
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed July 24, 2024. Cited figures are marked; the original filing is the authoritative source.

Newmont Corporation (NYSE: NEM) reported second quarter 2024 results on July 24, 2024, furnished under Item 2.02 via Exhibit 99.1.

The quarter produced 1.6 million attributable gold ounces (down 4% sequentially) and 477 thousand gold equivalent ounces from other metals. Gold AISC rose 9% to $1,562a per ounce and gold CAS rose 9% to $1,152 per ounce, reflecting lower sales volumes and higher royalties. Operational disruptions included the Cerro Negro suspension after two fatalities, the Telfer suspension, and Lihir rainfall impacts.

Management reaffirmed 2024 guidance and expects a second-half-weighted production ramp, with the largest increase in Q4. Financially, the quarter was strong. Realized gold prices averaged $2,347b per ounce, Adjusted EBITDA reached $1.97 billion, Net income was $857 million, and Adjusted net income was $0.72 per diluted share.

Free cash flow was $594 millionc, versus negative $74 million in Q1. Net debt to pro forma Adjusted EBITDA stood at 1.0x. Management returned $539 million to shareholders in the quarter, repurchased $250 million of stock year-to-date, repaid $250 million of nominal debt, and declared a $0.25 quarterly dividend.

Portfolio optimization continued. Newmont agreed to sell the Batu Hijau deferred payment rights for $153 milliond, with closing expected by September 30, 2024. It has announced $527 million in divestiture proceeds year-to-date and targets at least $2 billion in gross divestiture proceeds.

Newcrest synergies reached $205 million to date, with a $500 million annual run-rate target by end-2025. Investors should note that the company's Q2 results remained subject to completion of its 10-Q, and the Telfer tailings facility and Yanacocha water treatment spending (about $600 million in 2024) remain material watch items.

02—Key points

Key Highlights

  1. Q2 2024 Adjusted EBITDA of $1.97 billion, up 16% sequentially, with Adjusted net income of $0.72 per diluted share versus $0.55 in Q1.
  2. Free cash flow of $594 million, a sharp improvement from negative $74 million in Q1, supported by higher realized gold prices of $2,347 per ounce.
  3. Gold AISC rose 9% to $1,562 per ounce and gold CAS rose 9% to $1,152 per ounce, driven by lower sales volumes and higher royalties.
  4. Shareholder returns of $539 million in Q2, including $250 million of share repurchases since the last release, and a $0.25 per share quarterly dividend.
  5. Net debt to pro forma Adjusted EBITDA of 1.0x, with $2.6 billion of consolidated cash and approximately $6.8 billion of total liquidity.
  6. Divestiture program progressing: $527 million of proceeds announced year-to-date, the Batu Hijau deferred payment rights sale for $153 million, and a target of at least $2 billion in gross proceeds.
  7. Operational setbacks, including the Cerro Negro suspension after two workplace fatalities and the Telfer suspension, with production guidance reaffirmed but weighted to the second half of 2024.

03—Questions

Frequently Asked Questions

  1. Did Newmont meet its production expectations in Q2 2024?

    Attributable gold production was 1.607 million ounces, down 4% from Q1, due to the Cerro Negro suspension, the Telfer suspension, and Lihir rainfall. Management says it remains on track for full-year 2024 guidance and expects a sequential increase in the second half, weighted toward Q4.

  2. Why did unit costs rise in the quarter?

    Gold CAS per ounce rose 9% to $1,152 and AISC per ounce rose 9% to $1,562, mainly due to lower sales volumes, stockpile processing at Porcupine and Tanami, higher third-party royalties from elevated gold prices, and higher sustaining capital spend.

  3. How much cash did Newmont generate and what did it do with it?

    Operating cash flow from continuing operations was $1.39 billion and free cash flow was $594 million. The company returned $539 million to shareholders, repurchased $250 million of stock year-to-date, and repaid $250 million of nominal debt for a $227 million cash cost.

  4. What are the main risks or cash obligations to watch?

    Reclamation spending is expected to be about $600 million in 2024 and $700 million in 2025, mainly for Yanacocha water treatment. The Telfer tailings facility has seepage issues and production is expected to resume only in Q4 2024. The Q2 figures remained subject to final review and the 10-Q filing.

04—Continue

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