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Newmont(NEM) - 2024 Q3 - Earnings Call Transcript
NEMNewmont(NEM)2024-10-24 19:03
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Financial Data and Key Metrics Changes - Newmont reported adjusted EBITDA of 2billion,drivenbysustainedgoldpricesandstrongquarterlyproduction[20]−Adjustednetincomeincreasedto2 billion, driven by sustained gold prices and strong quarterly production [20] - Adjusted net income increased to 0.81 per diluted share, up 0.09comparedtothesecondquarter[20]−Generated0.09 compared to the second quarter [20] - Generated 1.6 billion in cash flow from operations and 760millioninfreecashflow[20][21]−Retired760 million in free cash flow [20][21] - Retired 233 million in debt and returned 786milliontoshareholdersthroughsharerepurchasesanddividends[7][24]BusinessLineDataandKeyMetricsChanges−Producednearly1.7millionouncesofgoldand430,000goldequivalentouncesfromothermetals,including37,000tonsofcopper[5]−AhafoSouthachievedanearly15786 million to shareholders through share repurchases and dividends [7][24] Business Line Data and Key Metrics Changes - Produced nearly 1.7 million ounces of gold and 430,000 gold equivalent ounces from other metals, including 37,000 tons of copper [5] - Ahafo South achieved a nearly 15% increase in gold production over the second quarter [15] - Anticipated production of 1.8 million ounces of gold in the fourth quarter, an approximately 8% increase over the third quarter [11] Market Data and Key Metrics Changes - All-in sustaining costs for the fourth quarter are expected to be approximately 14.75 per ounce, representing an 8% reduction compared to the third quarter [26] - Production from Nevada Gold Mines and Pueblo Viejo is expected to significantly increase in the fourth quarter, crucial as these sites comprise over 20% of attributable gold production for 2024 [25] Company Strategy and Development Direction - Focus on strengthening safety culture and improving risk management systems following recent fatalities [2][27] - Committed to generating at least 2billioningrossproceedsfromthedivestmentofnon−coreassets,withsignificantprogressmade[6][28]−Emphasisonoptimizingthego−forwardportfolioof11managedoperationsandthreeprojectsinexecution,withafocusonexpandingmarginsandgeneratingstrongreturns[29][66]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementacknowledgedchallengesincostexpectationsduetoinflationandintegrationissues,particularlyatLihir,Brucejack,andCadia[31][37]−Anticipatedproductionfromthecoreportfolioin2025isexpectedtobearound5.6millionounces,reflectingadjustmentsfromLihirandBrucejack[34][66]−Managementremainsfocusedondisciplinedcapitalallocationandensuringthatanynewprojectsmeetcostandreturnexpectations[58]OtherImportantInformation−Newmonthasapprovedanadditional2 billion in gross proceeds from the divestment of non-core assets, with significant progress made [6][28] - Emphasis on optimizing the go-forward portfolio of 11 managed operations and three projects in execution, with a focus on expanding margins and generating strong returns [29][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in cost expectations due to inflation and integration issues, particularly at Lihir, Brucejack, and Cadia [31][37] - Anticipated production from the core portfolio in 2025 is expected to be around 5.6 million ounces, reflecting adjustments from Lihir and Brucejack [34][66] - Management remains focused on disciplined capital allocation and ensuring that any new projects meet cost and return expectations [58] Other Important Information - Newmont has approved an additional 2 billion share repurchase program, bringing total authorization to $3 billion [23] - The company is advancing three key projects: Tanami expansion, Ahafo North, and Panel Caves at Cadia [17][18] Q&A Session Summary Question: Can you reflect on the cost profile and expectations for unit costs? - Management noted a strong correlation between gold prices and production costs, with expectations that costs may ease if gold prices do [31][32] Question: What is the new production guidance for 2025? - Management indicated that production from the core portfolio is expected to be around 5.6 million ounces, reflecting adjustments from Lihir and Brucejack [34] Question: Can you clarify the significant changes in cost expectations? - Management explained that higher costs were driven by labor inflation and integration challenges, particularly at Lihir and Cadia [36][39] Question: What is the outlook for labor inflation? - Management indicated that labor costs have escalated beyond initial expectations, particularly for contracted services [60] Question: What is the status of the Wafi project in terms of capital allocation? - Management confirmed that Wafi is competing for capital alongside other projects, with a disciplined approach to project execution [58] Question: What is the long-term production outlook? - Management stated that the long-term average production from the portfolio is expected to be around 6 million ounces, with a focus on margin expansion [66]