Record fourth quarter drives strong Newmont result
Palmer describes 2024 as transformational as company focuses on cost and productivity improvements
Newmont Corporation (NYSE: NEM) has reported record operating cashflow for 2024 following the transformation of the company’s portfolio.
Reported net income for the year was US$3.4 billion, up 234%, adjusted net income was up 201% to US$4 billion and adjusted EBITDA more than doubled to US$8.7 billion.
The company generated US$6.3 billion of cash from operating activities and US$2.9 billion in free cashflow, including a record US$1.6 billion in the fourth quarter.
The company declared a fourth quarter dividend of US25c per share.
Newmont CEO Tom Palmer said the fourth quarter’s financial results reflected the future potential of Newmont’s go-forward portfolio.
Production for 2024 was 6.8 million attributable gold ounces, including of 5.7Moz from Newmont's portfolio, as well as 1.9Moz of gold equivalent from copper, silver, lead and zinc, including 153,000 tonnes of copper
In 2024, Newmont completed the US$17 billion acquisition of Australia’s Newcrest Mining, cementing its status as the world’s largest gold miner, both by production and market capitalization.
Palmer said the transformation had positioned Newmont for to generate strong returns for decades to come.
“We have deliberately streamlined Newmont into the world's best collection of tier one gold assets, with a strong foundation of operational and financial performance,” he said.
Balance sheet strong
Palmer described the company’s divestment progress as a “resounding success” after it announced the sale of six non-core assets.
The program has the potential to generate up to US$4.3 billion in pre-tax proceeds, which is expected to result in US$2.5 billion in proceeds after tax in the current half.
Newmont closed 2024 with cash of US$3.6 billion in cash and US$7.7 billion in total liquidity.
Debt was US$7.6 billion.
The company is targeting cash of above US$3 billion and debt of below US$8 billion.
The company reduced debt by US$1.4 billion over the last 12 months, which includes early redemption of US$928 million in 2026 notes redeemed this month.
Total dividends in 2024 were US$1.1 billion.
Palmer said Newmont would continue to return cash to shareholders via its predictable US$1 per share annual dividend.
During 2024, Newmont repurchased US$1.2 billion of shares as part of its US$3 billion total share repurchase programs.
Guidance and growth
Newmont has forecast attributable production of roughly 5.9Moz of gold in 2025, including 300,000oz in the first quarter from the non-core assets held for sale.
Palmer said Newmont should produce around 6Moz of gold per year for the next decade, but the company was still working to understand the potential of the portfolio before providing longer-dated guidance.
“If you get in the time machine and move forward 5, 10, 15 years, and look back at this Newmont portfolio, you're going to see, on average, about 6 million ounces of gold and 150,000 tonnes of copper,” he said.
“You're going to see a management team here that's going to focus on improving the margins. Not chasing volume. We're chasing margin. That's what we're going to be focusing on, but we will ebb and flow through the course of that very long-life portfolio.
“You haven't seen this before in the gold industry. This portfolio is the likes of which has not been seen before.”
All-in sustaining costs in 2025 are expected to be US$1630/oz, or US$1620/oz from the go-forward portfolio.
Newmont broke down the rise in forecast AISC from the US$1461/oz reported for 2024. Around 3%, or US$44/oz, is due to cost escalation, US$40/oz is due to the company’s US$300 million a year capital reinvestment program, US$35/oz is due to a US$1700/oz reserve price, US$30/oz is the result of a roughly 80,000oz drop in production volumes, and US$10/oz in higher royalties.
Palmer said he was not happy with US$1620/oz costs.
“We recognize that our all-in sustaining costs are not where we want them to be, so in addition to the work we are doing to bring on new low-cost ounces and normalize our sustaining capital spend over the next three years, my team and I are working to reduce costs and improve productivity across our go-forward managed portfolio,” Palmer said.
Sustaining capital is expected to be US$1.8 billion this year with development capital of US$1.3 billion.
The company is aiming to get sustaining capital down to around US$1.5 billion by 2028.
Palmer said development capital of US$1.3 billion was a “healthy” spend and the company was focused on the projects already in execution.
“But we do have some exciting projects sitting there queuing up, looking to get access to that capital,” he said, referring to Red Chris, Yanacocha, Wafi-Golpu and Galore Creek.
“I think it's important that we just don't have a conveyor belt of projects. You've got to watch this space.”