Newmont Corporation NEM, the world's largest publicly listed gold producer, reported robust first-quarter 2025 earnings following the conclusion of the year-long portfolio optimization effort. The company posted a net income of $1.9 billion and adjusted EBITDA of $2.6 billion, significantly surpassing the prior year's performance. Adjusted net income was $1.25 per share, aligning with analysts' expectations. Cost-wise, the company saw Gold All-In Sustaining Costs rise to $1,651 per ounce, a 13% increase due ...

Financial Data and Key Metrics Changes - Newmont Corporation reported record first-quarter free cash flow of $1.2 billion and adjusted EBITDA of $2.6 billion, driven by strong operational performance and favorable gold prices [9][30][39] - The company generated $2 billion in cash flow from operations, marking a significant increase compared to previous quarters [9][30] - Gold all-in sustaining costs remained in line with full-year guidance at $1,651 per ounce for the first quarter [30] Business Line Data and Key Metrics Changes - In the first quarter, Newmont produced 1.5 million ounces of gold and 35,000 tonnes of copper, consistent with full-year guidance [9][39] - The divestment program resulted in over $2.5 billion in after-tax cash proceeds, enhancing the company's focus on its core operations [11][39] - The company anticipates a strong finish to the year from Boddington, with gold production expected to be approximately 53% weighted to the second half of the year [21] Market Data and Key Metrics Changes - The rise in gold prices has positively impacted cash flow and operational performance, with unprecedented volatility in global financial and commodity markets being closely monitored [10][39] - The company is focused on managing variables within its control amidst evolving tariff situations [10] Company Strategy and Development Direction - Newmont's priorities for 2025 include strengthening safety culture, stabilizing managed operations, and executing capital returns [5][13] - The company is committed to maintaining a strong balance sheet and returning capital to shareholders through predictable dividends and ongoing share repurchases [13][37] - The focus remains on delivering the potential of the 11 managed operations and three projects in execution, with a disciplined capital allocation strategy [12][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 commitments and emphasized the importance of safety, cost, and productivity performance irrespective of gold price fluctuations [56] - The company is actively monitoring geopolitical risks and maintaining strong relationships with governments in its operating jurisdictions [112] Other Important Information - Newmont completed its divestment program, allowing for a sharper focus on core operations and a significant reduction in debt [12][39] - The company has a robust share buyback program in place, with $755 million repurchased so far in 2025 [37] Q&A Session Summary Question: Lihir cash cost profile and mining for margin - Management highlighted efforts to configure the mine for sustainable performance and indicated that Lihir will meet its full-year cost guidance despite a $100 million non-cash impact from inventory adjustments [42][46] Question: Share buyback pace and capital return - Management confirmed ongoing share buybacks, supported by elevated gold prices and divestiture proceeds, with plans to continue this through the remainder of the year [48][50] Question: Impact of high gold prices on business management - Management stated that the focus remains on delivering safety, cost, and productivity performance, regardless of gold price fluctuations, while benefiting from the current high prices [54][56] Question: Progress on Ahafo North project - Management reported that Ahafo North is tracking well, with significant milestones achieved and a focus on safety during the high construction period [80][86] Question: Concerns about geopolitical risks - Management emphasized the importance of operating in stable jurisdictions and maintaining strong government relationships, with no immediate concerns regarding risks [112] Question: Future project considerations - Management indicated that Red Chris is a prime candidate for future capital allocation, with ongoing feasibility studies and engagement with local governments [60][104]

Core Insights - Newmont Corporation reported $5.01 billion in revenue for Q1 2025, a year-over-year increase of 24.5% and a surprise of +12.22% over the Zacks Consensus Estimate of $4.46 billion [1] - The EPS for the same period was $1.25, compared to $0.55 a year ago, resulting in an EPS surprise of +48.81% against the consensus estimate of $0.84 [1] Financial Performance Metrics - Newmont's shares returned +14.7% over the past month, outperforming the Zacks S&P 500 composite, which declined by -6.6% [3] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3] Production and Cost Metrics - Attributable Gold ounces sold for Ahafo were 199 Koz, exceeding the average estimate of 137.86 Koz [4] - Average Realized Price for Zinc was $1.13 per pound, slightly below the average estimate of $1.17 per pound [4] - AISC Consolidated for Nevada Gold Mines was $1789 per ounce, higher than the average estimate of $1518.2 per ounce [4] - AISC Consolidated for Peñasquito was $1091 per ounce, compared to the average estimate of $1174.5 per ounce [4] - Attributable Gold ounces sold for Yanacocha were 113 Koz, above the average estimate of 102.64 Koz [4] - Attributable Gold ounces sold for Boddington were 135 Koz, slightly below the average estimate of 137.28 Koz [4] - Attributable Gold ounces sold for Tanami were 75 Koz, below the average estimate of 79.83 Koz [4] - AISC Consolidated for Merian was $1864 per ounce, higher than the average estimate of $1775.8 per ounce [4] - AISC Consolidated for Tanami was $1659 per ounce, slightly above the average estimate of $1627.2 per ounce [4] - AISC Consolidated for Cerro Negro was $2857 per ounce, significantly higher than the average estimate of $1246.1 per ounce [4] - Attributable Gold ounces sold for Cerro Negro were 38 Koz, below the average estimate of 71.34 Koz [4] - AISC Consolidated for Yanacocha was $1170 per ounce, above the average estimate of $1051.2 per ounce [4]

Financial Performance - Net income from continuing operations attributable to Newmont stockholders was $1,891 or $1.68 per diluted share, an increase of $1,725 from the prior-year quarter[14]. - Adjusted net income was reported at $1,404 or $1.25 per diluted share, an increase of $0.70 per diluted share from the prior-year quarter[14]. - Adjusted EBITDA reached $2,629, reflecting a 55% increase from the prior-year quarter[14]. - Net cash provided by operating activities was $2,031, a 162% increase from the prior year, with free cash flow of $1,205[14]. - Cash dividends declared per common share remained steady at $0.25 for the period ended March 31[14]. Production and Sales - Consolidated gold ounces produced were 1,460 thousand, while sold ounces were 1,442 thousand, showing a decrease from 1,619 thousand produced and 1,599 thousand sold in the prior year[10]. - Average realized gold price per ounce increased to $2,944 from $2,090 in the prior year, representing a significant rise[10]. - Attributable production included 1.5 million ounces of gold and 348 thousand attributable gold equivalent ounces from co-products[14]. Liquidity and Cash Position - The company ended the quarter with $4.7 billion in consolidated cash and $8.8 billion in total liquidity[14]. - The company completed the sale of the CC&V, Musselwhite, and Éléonore reportable segments for total proceeds of $1,860 million[14]. Market and Currency Risks - As of March 31, 2025, the short-term gold price assumption is $2,860 per ounce, while the long-term assumption is $1,900 per ounce[293]. - A hypothetical 10% adverse movement in local currency exchange rates would result in an approximate $76 increase to costs applicable to sales per ounce for the three months ended March 31, 2025[297]. - The average provisional price for gold sales is $3,127 million, with a potential effect of a 10% change resulting in a $61 million impact[300]. - The company has significant operations in multiple countries, including Canada, Mexico, and Australia, which exposes it to foreign currency exchange rate fluctuations[295]. - The fair value of the Cadia Power Purchase Agreement cash flow hedge could decrease by approximately $37 due to a hypothetical 10% adverse movement in forward electricity rates[304]. - The foreign currency cash flow hedges could see a decrease in fair value of approximately $211 from a hypothetical 10% adverse movement in AUD and CAD exchange rates[304]. Credit and Interest Rate Risks - The company’s fixed rate debt does not expose it significantly to interest rate risk, but there is fair value risk if long-term debt is repurchased or exchanged prior to maturity[294]. - The company mitigates credit risk by entering into derivatives with high credit quality counterparties and monitoring their financial conditions[306]. - Market liquidity risk is managed by spreading out the maturity of derivatives over time and ensuring counterparties cannot require immediate settlement except under specific default conditions[307].

Core Viewpoint - Newmont Corporation reported strong quarterly earnings of $1.25 per share, significantly exceeding the Zacks Consensus Estimate of $0.84 per share, and showing a year-over-year increase from $0.55 per share [1][2] Group 1: Earnings Performance - The earnings surprise for the recent quarter was 48.81%, following a previous surprise of 47.37% when earnings were $1.40 per share against an expectation of $0.95 [1][2] - Over the last four quarters, Newmont has surpassed consensus EPS estimates three times [2] Group 2: Revenue Performance - Newmont's revenues for the quarter ended March 2025 were $5.01 billion, exceeding the Zacks Consensus Estimate by 12.22%, and up from $4.02 billion a year ago [2] - The company has topped consensus revenue estimates four times over the last four quarters [2] Group 3: Stock Performance - Newmont shares have increased approximately 46.5% since the beginning of the year, contrasting with a decline of -10.1% in the S&P 500 [3] Group 4: Future Outlook - The company's earnings outlook will be crucial for assessing future stock performance, including current consensus earnings expectations for upcoming quarters [4] - The current consensus EPS estimate for the next quarter is $0.85 on revenues of $4.18 billion, and for the current fiscal year, it is $3.71 on revenues of $18.34 billion [7] Group 5: Industry Context - The Mining - Gold industry, to which Newmont belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges ahead [8]

Q1 2025 Highlights - The company delivered 1.5Moz of gold and 35kt of copper from its full portfolio[10] - The company generated a record first quarter free cash flow of $1.2B[10] - The company exceeded its divestiture target, generating >$2.5B in net cash proceeds[12] - The company executed $755M in share repurchases and $1.0B in debt retirements[12] Q1 2025 Financial Performance - The company's cash from operations was $2.0B[29] - The company's adjusted EBITDA was $2.6B[29] - The company's GAAP net income was $1.68 per share[29] - The company's adjusted net income was $1.25 per share[29] - The company's free cash flow was $1.2B[29] - The company's cash & cash equivalents were $4.7B[29] - The company's average realized gold price was $2,944 per ounce[29] - The company's gold all-in sustaining cost was $1,651 per ounce[29] Capital Allocation Strategy - The company maintained financial flexibility with cash above $3.0B target[31] - The company achieved its debt target of up to $8.0B[31] - The company's sustaining capital was $459M[31] - The company's development capital was $323M[31] - The company's common dividend was $0.25 per share[31] - The company executed $755M of a $3.0B authorized share repurchase program[31] Non-Core Divestiture Program - The company's non-core divestiture program generated up to $3.8B in total gross proceeds, including >$3.0B in cash[39]

Group 1: Market Performance - Shares of gold mining stocks such as Barrick Gold, Newmont Mining, Gold Fields, and AngloGold Ashanti experienced declines of 4.6%, 2.6%, 6%, and 5.1% respectively, despite broader market indexes being up [1] - The price of gold fell by 3.4% on the same day, contributing to the decline in gold mining stocks [1] Group 2: Gold Price Trends - Gold has surged 42% over the past year, often seen as a "safe haven" asset amid geopolitical uncertainties and inflation concerns [3] - The price of gold typically rises when the value of the dollar declines, as it is priced in dollars [3] Group 3: Political Influence on Gold and Markets - The Trump administration's tariff policies have created instability, leading to increased global uncertainty and a decline in the dollar's value [2][4] - Recent comments from President Trump indicating a potential easing of tariffs have led to a market rally and a corresponding drop in gold prices [5][6] Group 4: Company Strategies - Barrick Gold is actively looking to divest from certain gold mining operations, including a recent sale of its stake in an Alaska project and potential sales of its Canadian and Ivory Coast operations [8] - The actions of Barrick Gold may suggest a belief that gold prices have peaked, although future market conditions remain uncertain [9] Group 5: Investment Insights - Gold and gold-oriented stocks can serve as a hedge against economically sensitive holdings, making them valuable in a diversified portfolio [10]

Financial Performance - Newmont reported a net income of $1.9 billion, or $1.68 per diluted share, for Q1 2025, an increase of $488 million from the prior quarter[8]. - Adjusted net income for the quarter was $1.4 billion, or $1.25 per diluted share, compared to $1.6 billion, or $1.40 per diluted share, in the prior quarter[9]. - The company reported a net income attributable to Newmont stockholders for Q1 2025 was $1,891 million, resulting in an adjusted net income of $1,404 million, or $1.25 per diluted share[41]. - Net income for FY 2024 was $3,381 million, with Q4 contributing $1,421 million[37]. - Net income attributable to Newmont stockholders for FY 2024 was $3.348 billion, with Q4 net income at $1.403 billion, reflecting strong financial performance[32]. Cash Flow and Liquidity - The company generated a record first quarter free cash flow of $1.2 billion, a decrease of 26% from the previous quarter[11]. - The company maintained a strong balance sheet, ending the quarter with $4.7 billion in cash and $8.8 billion in total liquidity, with a net debt to adjusted EBITDA ratio of 0.3x[11]. - Cash from operations before working capital for FY 2024 was $7,343 million, with Q4 at $2,398 million[37]. - Net cash provided by operating activities for FY 2024 was $6,363 million, with Q4 at $2,511 million[37]. - As of March 31, 2025, the company's net debt decreased to $3.221 billion from $5.308 billion at December 31, 2024, reflecting a reduction of approximately 39.4%[50]. Production and Sales - Attributable gold production was 1.5 million ounces, primarily from the Tier 1 Portfolio, with an average realized gold price of $2,944 per ounce, up $301 from the prior quarter[7]. - Attributable gold ounces sold in Q1 2025 were 1,581, with a total of 6,471 ounces sold year-to-date[28]. - Gold sold in Q1 2025 was 1,442 thousand ounces, down from 1,599 thousand ounces in Q1 2024, indicating a decrease of 9.8%[53]. - Total gold sales for the first quarter of 2025 reached 1,690 thousand ounces, with an all-in sustaining cost (AISC) of $1,439 per ounce[57]. - The company expects to sell approximately 5,175 thousand ounces of gold in 2025, with projected AISC of $1,620 per ounce[61]. Costs and Expenses - Gold costs applicable to sales (CAS) per ounce increased 12% to $1,227 compared to the prior quarter, while all-in sustaining costs (AISC) per ounce rose 13% to $1,651[8]. - The costs applicable to sales per ounce of gold sold increased to $1,227 in Q1 2025 from $1,057 in Q1 2024, representing a rise of 16.1%[53]. - The total all-in sustaining costs per ounce for gold in Q1 2025 was $1,651, compared to $1,442 in Q1 2024, marking an increase of 14.5%[56]. - Total costs applicable to sales for gold in Q1 2025 were $1.769 billion, compared to $1.690 billion in Q1 2024, reflecting an increase of 4.7%[53]. - The company reported a total gold by-product AISC of $1,319 per ounce in Q1 2025, a decrease of 4.5% from the previous quarter[29]. Divestitures and Investments - Newmont completed its divestiture program, generating over $2.5 billion in cash proceeds net of tax impacts in 2025, with total gross proceeds expected to reach up to $4.3 billion[5]. - The company has completed the divestment of all non-core operations and its 70% interest in the Havieron project[23]. - Newmont plans to spend $800 million on reclamation activities in 2025, with $600 million allocated specifically for water treatment plants at Yanacocha[26]. - The sale of the Akyem operation is expected to generate up to $1.0 billion, while the Porcupine operation sale could yield up to $425 million, both closed on April 15, 2025[27]. - The company is focusing on divestiture programs for non-core assets, including Telfer and CC&V, which have been closed prior to March 31, 2025[29]. Future Outlook and Guidance - Newmont remains on track to meet its 2025 guidance, targeting total attributable gold production of 5.9 million ounces[15]. - 2025 guidance assumes gold prices at $2,500/oz, copper at $9,370/tonne, and silver at $30/oz, with an estimated consolidated adjusted effective tax rate of 34%[21]. - The company anticipates continued growth in production and pricing for gold and copper in the upcoming quarters[28]. - The company expects to sell approximately 5,175 thousand ounces of gold in 2025, with projected AISC of $1,620 per ounce[61]. - Advanced projects and exploration costs for 2025 are projected to be $200 million, indicating ongoing investment in future growth[61]. Shareholder Returns - The company delivered $1.0 billion in total returns to shareholders through share repurchases and dividends since the start of the year[5]. - The share repurchase program is authorized for up to $2.0 billion over 24 months, subject to market conditions and other factors[80]. - Future dividends beyond June 20, 2025, have not yet been declared, and their payment will depend on financial results and market conditions[79]. Sustainability and Corporate Responsibility - Newmont's global Closure Strategy aims to create sustainable legacies post-mining, with $95 million spent on reclamation activities in Q1 2025[26]. - The company is committed to sustainable and responsible mining practices, aiming to create value and improve lives[75].

Core Viewpoint - Newmont Corporation (NEM) is expected to report strong first-quarter 2025 results, benefiting from higher gold prices despite facing cost challenges [1][7]. Financial Performance - The Zacks Consensus Estimate for first-quarter earnings is 84 cents per share, reflecting a 52.7% year-over-year increase [2]. - First-quarter revenues are estimated at $4.54 billion, indicating a roughly 13% increase from the previous year [2]. - NEM has a trailing four-quarter earnings surprise of 34.5% on average, having beaten the Zacks Consensus Estimate in three of the last four quarters [5]. Gold Price Impact - Gold prices have surged nearly 19% in the first quarter and are up approximately 26% year-to-date, driven by safe-haven demand amid global economic uncertainties [8]. - The average realized price of gold for NEM is estimated at $2,759 per ounce, representing a 32% year-over-year rise [9]. Production and Costs - NEM's consolidated attributable gold production is estimated at roughly 1.54 million ounces for the quarter [9]. - The company anticipates higher unit costs in the first quarter, with all-in sustaining costs (AISC) estimated at $1,691 per ounce, a 17.5% year-over-year increase [10]. Stock Performance and Valuation - NEM's shares have increased by 47% over the past year, underperforming the Zacks Mining – Gold industry's 58.3% rise but outperforming the S&P 500's 5.8% increase [11]. - The stock is currently trading at a forward 12-month earnings multiple of 14.14X, which is about 16.1% lower than the peer group average of 16.85X [14]. Growth Potential - Newmont is positioned for growth with a robust project portfolio that is expected to expand production capacity and extend mine life [16]. - The acquisition of Newcrest Mining Limited is anticipated to create significant value and synergies for shareholders [16]. - NEM's strong liquidity and cash flow generation capabilities support its growth projects and shareholder value [17]. Investment Outlook - Investing in NEM stock ahead of its earnings announcement is seen as a compelling opportunity due to its strong market position, financial health, and favorable gold market conditions [18].

Group 1 - Newmont Corporation (NEM) has experienced a 31% increase since November 2024 and a 48% year-to-date rise, indicating strong performance amidst macroeconomic uncertainty and weak stock markets [1] - The article highlights the growing interest in the green economy, with a focus on generational investment opportunities [1] Group 2 - The author, Manika, has over 20 years of experience in investment management, stock broking, and investment banking, which adds credibility to the analysis presented [1]