Did Newmont meet its profitability and cash generation targets in Q3 2024?

Results were strong. Adjusted Net Income was $936M ($0.81 per diluted share), Adjusted EBITDA was $2.0B, and Free Cash Flow was $760M, up 28% from Q2. Realized gold prices of $2,518/oz, up $171 from Q2, were the main driver. Working capital changes reduced operating cash flow by $209M, so underlying cash generation was stronger than reported.

What are the details of the Akyem, Telfer, and Havieron divestitures?

Akyem (Ghana) is being sold to Zijin for up to $1B in cash. Of that, $900M is payable at closing and $100M is expected after the earliest of several Ghanaian lease ratification events or the five-year anniversary of closing. Telfer and a 70% interest in Havieron are being sold to Greatland for up to $475M: $207.5M cash at closing, $167.5M in Greatland shares, and up to $100M in deferred, gold-price-linked consideration. Closings remain subject to regulatory approvals, including FIRB approval for Telfer/Havieron and Chinese approvals for Akyem, and the Telfer restart after tailings remediation. Expected closing for both is Q4 2024.

How much capital is Newmont returning to shareholders and how much has it reduced debt?

Year-to-date, Newmont has repurchased $500M of shares at an average of $53.16, and the Board authorized a new $2B program over 24 months at management's discretion. Dividends and buybacks delivered $786M of total returns in Q3. Nominal debt reduction totaled $233M for a cash cost of $210M since the last earnings release, and $483M of debt has been retired year-to-date. Repurchases are not obligated and can be discontinued at any time.

Why did AISC increase, and what should investors expect for Q4 2024?

Gold AISC rose 3% sequentially to $1,611/oz, mainly on higher Consolidated Cost Applicable to Sales (CAS), which came in at $1,207/oz. Drivers were planned autoclave maintenance at Lihir and higher contract services across the portfolio. For Q4 2024, guidance is 1.8 Moz of attributable gold production at $1,475/oz AISC and $1,050/oz CAS, based on a $2,500/oz gold price assumption. Management expects Q4 to be the highest production quarter of the year, helped by better grades at Peñasquito and Tanami, Lihir's autoclave work finishing, and NGM improvements.

What is the status of the Cadia Panel Caves project and what are the key risks?

PC2-3 reached cave establishment in Q3 2024 and is expected to produce about 1.0 Moz of gold over 2024-2034, with peak output of 100-150 koz per year. Its total capital cost is estimated at $1.0-1.2B, including over $900M spent by Newcrest before acquisition, and Newmont's development spend is $150-250M through H2 2026. PC1-2 is under review, with a fuller update expected in 2025. Risks include tailings capacity constraints, which management is addressing, and the company's disclosure that cost and timing estimates remain subject to change.

NEM/NEMCL 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 23, 2024. Cited figures are marked; the original filing is the authoritative source.

Newmont reported third-quarter 2024 results on October 23, 2024, with 1.67 million attributable gold ounces produced (up 4% sequentially), Adjusted Net Income of $936 million^a ($0.81 per diluted share), Adjusted EBITDA of $2.0 billion, and Free Cash Flow of $760 million (up 28% from Q2).

Net income attributable to Newmont stockholders was $922 million^b, or $0.80 per diluted share. Gold AISC rose 3% sequentially to $1,611 per ounce, driven by higher costs at Lihir from planned autoclave maintenance and higher contract services costs across the portfolio. The quarter also included a $115 million loss on assets held for sale, mainly tied to Telfer and Havieron.

The key strategic development is the non-core divestment program. Newmont agreed to sell the Akyem mine in Ghana for up to $1 billion^c in cash to Zijin, and to divest Telfer and a 70% interest in Havieron for up to $475 million in gross proceeds. Management still expects at least $2 billion in gross divestiture proceeds in total.

Capital returns also expanded: Newmont repurchased $500 million^d of stock year-to-date, and the Board authorized an additional $2 billion buyback over 24 months. Debt reduction continued, with $233 million of nominal debt retired since the last earnings release. Net debt to Adjusted EBITDA stood at 0.9x, and the company reported $3.0 billion of consolidated cash and about $7.1 billion of total liquidity.

Looking ahead, Q4 2024 guidance calls for 1.8 million attributable gold ounces at an AISC of $1,475 per ounce, assuming a $2,500 per ounce gold price. The company is positioned to meet its full-year 2024 production guidance. Investors should note that the Akyem and Telfer/Havieron closings remain subject to regulatory and other conditions, that the $1 billion Akyem consideration includes $100 million deferred until several Ghanaian lease and anniversary milestones, and that the Cadia PC1-2 project is under review with an update expected in 2025.

02—Key points

Key Highlights

Attributable gold production of 1.67 Moz in Q3 2024, up 4% sequentially, with Cerro Negro's return from suspension and higher Brucejack output as key drivers
Adjusted EPS of $0.81 and Adjusted Net Income of $936M, up from $0.72 in Q2; GAAP net income attributable to stockholders was $922M ($0.80 per diluted share)
Free Cash Flow of $760M, up 28% sequentially, despite a $209M working capital drag including a $202M inventory build
Non-core divestment program: Akyem sale for up to $1B cash, and Telfer/70% Havieron stake sale for up to $475M gross proceeds; at least $2B total divestiture proceeds still expected
Capital returns: $500M of share repurchases year-to-date, a new $2B buyback authorization over 24 months, and a $0.25 quarterly dividend declared
Balance sheet strengthened: net debt to Adjusted EBITDA of 0.9x, $3.0B consolidated cash, ~$7.1B total liquidity, and $233M of nominal debt retired since last earnings release
Gold AISC rose 3% sequentially to $1,611/oz on higher Lihir maintenance costs and contract services; Q4 2024 guidance is 1.8 Moz at $1,475/oz AISC

03—Questions

Frequently Asked Questions

Did Newmont meet its profitability and cash generation targets in Q3 2024?
Results were strong. Adjusted Net Income was $936M ($0.81 per diluted share), Adjusted EBITDA was $2.0B, and Free Cash Flow was $760M, up 28% from Q2. Realized gold prices of $2,518/oz, up $171 from Q2, were the main driver. Working capital changes reduced operating cash flow by $209M, so underlying cash generation was stronger than reported.
What are the details of the Akyem, Telfer, and Havieron divestitures?
Akyem (Ghana) is being sold to Zijin for up to $1B in cash. Of that, $900M is payable at closing and $100M is expected after the earliest of several Ghanaian lease ratification events or the five-year anniversary of closing. Telfer and a 70% interest in Havieron are being sold to Greatland for up to $475M: $207.5M cash at closing, $167.5M in Greatland shares, and up to $100M in deferred, gold-price-linked consideration. Closings remain subject to regulatory approvals, including FIRB approval for Telfer/Havieron and Chinese approvals for Akyem, and the Telfer restart after tailings remediation. Expected closing for both is Q4 2024.
How much capital is Newmont returning to shareholders and how much has it reduced debt?
Year-to-date, Newmont has repurchased $500M of shares at an average of $53.16, and the Board authorized a new $2B program over 24 months at management's discretion. Dividends and buybacks delivered $786M of total returns in Q3. Nominal debt reduction totaled $233M for a cash cost of $210M since the last earnings release, and $483M of debt has been retired year-to-date. Repurchases are not obligated and can be discontinued at any time.
Why did AISC increase, and what should investors expect for Q4 2024?
Gold AISC rose 3% sequentially to $1,611/oz, mainly on higher Consolidated Cost Applicable to Sales (CAS), which came in at $1,207/oz. Drivers were planned autoclave maintenance at Lihir and higher contract services across the portfolio. For Q4 2024, guidance is 1.8 Moz of attributable gold production at $1,475/oz AISC and $1,050/oz CAS, based on a $2,500/oz gold price assumption. Management expects Q4 to be the highest production quarter of the year, helped by better grades at Peñasquito and Tanami, Lihir's autoclave work finishing, and NGM improvements.
What is the status of the Cadia Panel Caves project and what are the key risks?
PC2-3 reached cave establishment in Q3 2024 and is expected to produce about 1.0 Moz of gold over 2024-2034, with peak output of 100-150 koz per year. Its total capital cost is estimated at $1.0-1.2B, including over $900M spent by Newcrest before acquisition, and Newmont's development spend is $150-250M through H2 2026. PC1-2 is under review, with a fuller update expected in 2025. Risks include tailings capacity constraints, which management is addressing, and the company's disclosure that cost and timing estimates remain subject to change.

04—Continue

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