Newmont(NEM) - 2024 Q2 - Quarterly Results

Q2 2024 Results Highlights Newmont reported a solid second quarter for 2024, producing 2.1 million gold equivalent ounces and generating $594 million in free cash flow Q2 2024 Key Performance Indicators | Metric | Value | | :--- | :--- | | Gold Equivalent Ounce (GEO) Production | 2.1 million oz | | Free Cash Flow | $594 million | | Net Income | $857 million | | Adjusted Net Income (ANI) | $0.72 per share | | Adjusted EBITDA | $2.0 billion | | Quarterly Dividend | $0.25 per share | - Strategic capital actions in Q2 2024 included: - Announced $527 million in divestiture proceeds year-to-date - Completed $250 million in share repurchases - Repaid $250 million in debt - Achieved $100 million in synergies from the Newcrest acquisition, totaling $205 million to date[2][5] Financial and Production Summary Q2 performance was driven by a significant increase in average realized gold price to $2,347/oz, boosting net income and Adjusted EBITDA despite production decreases Q2 2024 Financial and Production Summary | Metric | Q2 2024 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Average Realized Gold Price | $2,347/oz | $2,090/oz | +12.3% | | Attributable Gold Production | 1.61 Moz | 1.68 Moz | -4.2% | | Gold CAS | $1,152/oz | $1,057/oz | +9.0% | | Gold AISC | $1,562/oz | $1,439/oz | +8.5% | | Adjusted Net Income (ANI) | $834 M | $630 M | +32.4% | | Adjusted EBITDA | $1,966 M | $1,694 M | +16.1% | | Free Cash Flow (FCF) | $594 M | $(74) M | N/A | Production and Costs Attributable gold production fell 4% to 1.607 million ounces due to operational suspensions, increasing Gold CAS and AISC by 9%, with production expected to be second-half weighted - The 4% decrease in attributable gold production was primarily due to: - Suspension of operations at Cerro Negro following workforce fatalities - Suspension of operations at Telfer for tailings storage facility remediation - Lower production at Lihir (heavy rainfall) and Akyem (lower grades)[8] - Gold CAS and AISC both increased by 9% QoQ, primarily due to higher sustaining capital spend, lower sales volumes, processing of stockpiles at Porcupine and Tanami, and higher third-party royalties resulting from higher gold prices[10] - Full-year 2024 production is expected to be second-half weighted, with a sequential increase towards the fourth quarter, driven by improved grades and throughput at key sites[8] Financial Performance Benefiting from a higher average realized gold price of $2,347/oz, Newmont reported a net income of $838 million, Adjusted EBITDA of $2.0 billion, and $594 million in Free Cash Flow Q2 2024 Key Financial Results | Metric | Q2 2024 Value | | :--- | :--- | | Average Realized Gold Price | $2,347/oz | | Net Income (Continuing Operations) | $838 million | | Adjusted Net Income (ANI) | $834 million ($0.72/share) | | Adjusted EBITDA | $2.0 billion | | Net Cash from Operating Activities | $1.4 billion | | Free Cash Flow | $594 million | - The increase in net income was primarily due to the absence of a $485 million loss on assets held for sale recognized in Q1 2024, as well as higher realized metal prices in Q2[11] Portfolio Optimization Newmont is advancing portfolio optimization by monetizing deferred payment rights for the Batu Hijau mine for $153 million in cash, with total proceeds from this asset reaching $197 million in 2024 - Announced an agreement to sell deferred payment rights associated with the Batu Hijau mine for $153 million in cash, expected to close by September 30, 2024[6] - Including other payments received, total proceeds from the Batu Hijau monetization in 2024 will be $197 million[6] Non-Managed Joint Ventures and Equity Investments Performance from non-managed assets was mixed in Q2, with Nevada Gold Mines and Pueblo Viejo seeing production decreases, while Fruta del Norte's attributable production increased significantly by 67% Q2 2024 Non-Managed Asset Performance (QoQ) | Asset | Attributable Gold Production | Change (QoQ) | AISC Change (QoQ) | | :--- | :--- | :--- | :--- | | Nevada Gold Mines (NGM) | 253 koz | -4% | +7% to $1,689/oz | | Pueblo Viejo (PV) | 53 koz | -2% | N/A | | Fruta del Norte (lagged) | 35 koz | +67% | N/A | 2024 Outlook Newmont reaffirmed its full-year 2024 guidance, projecting total attributable gold production of 6.93 million ounces at a Gold AISC of $1,400 per ounce, with most production from its Tier 1 portfolio 2024 Full-Year Guidance Highlights | Guidance Metric | 2024 Estimate | | :--- | :--- | | Total Attributable Gold Production | 6,930 Koz | | - Total Tier 1 Portfolio | 5,630 Koz | | Total Newmont Gold AISC | $1,400/oz | | Total Newmont Copper Production | 152 ktonne | | Sustaining Capital | $1,800 M | | Development Capital | $1,300 M | - The 2024 outlook is based on commodity price assumptions of $1,900/oz for gold and $4.00/lb for copper[20] Detailed Operating Results by Asset In Q2 2024, the Total Tier 1 Portfolio produced 1.305 million gold ounces, a decrease from Q1, with varied costs across assets and non-core assets contributing 302 koz Q2 2024 Production and Costs for Select Mines | Mine (Portfolio) | Gold Production (koz) | Gold CAS ($/oz) | Gold AISC ($/oz) | | :--- | :--- | :--- | :--- | | Tier 1 | | | | | Ahafo | 184 | $976 | $1,123 | | Boddington | 147 | $1,022 | $1,237 | | Cadia | 117 | $624 | $1,064 | | Peñasquito | 64 | $827 | $1,038 | | Cerro Negro | 19 | $2,506 | $3,010 | | Non-Core | | | | | Porcupine | 91 | $1,068 | $1,366 | Condensed Consolidated Financial Statements The financial statements detail Newmont's Q2 2024 performance, showing $4.4 billion in sales, $857 million net income, $55.7 billion in total assets, and $1.4 billion in net cash from operating activities Condensed Consolidated Statements of Operations For Q2 2024, Newmont recorded sales of $4,402 million, a significant increase from Q2 2023, resulting in net income attributable to stockholders of $853 million ($0.74/share) Statement of Operations Summary (in millions, except per share) | Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Sales | $4,402 | $2,683 | | Costs applicable to sales | $2,156 | $1,543 | | Net income from continuing operations | $842 | $153 | | Net income attributable to stockholders | $853 | $155 | | Diluted EPS | $0.74 | $0.19 | Condensed Consolidated Balance Sheets As of June 30, 2024, Newmont's balance sheet showed total assets of $55.7 billion, total liabilities of $26.1 billion, and total stockholders' equity of $29.4 billion Balance Sheet Summary (in millions) | Item | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,602 | $3,002 | | Total current assets | $12,070 | $7,512 | | Total assets | $55,678 | $55,506 | | Total current liabilities | $5,732 | $5,998 | | Total debt | $8,692 | $8,874 | | Total liabilities | $26,115 | $26,301 | | Total stockholders' equity | $29,379 | $29,027 | Condensed Consolidated Statements of Cash Flows In Q2 2024, the company generated $1,394 million in net cash from continuing operating activities, while using $641 million in investing activities and $658 million in financing activities Cash Flow Summary (in millions) | Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net cash from operating activities | $1,428 | $663 | | Net cash from investing activities | $(641) | $(158) | | Net cash from financing activities | $(658) | $(334) | | Net change in cash | $118 | $175 | Non-GAAP Financial Measures and Reconciliations This section provides detailed reconciliations for non-GAAP measures, with key Q2 2024 metrics including Adjusted Net Income of $834 million, Adjusted EBITDA of $1,966 million, and Free Cash Flow of $594 million Adjusted Net Income (ANI) and Adjusted EBITDA Newmont's Q2 2024 Adjusted Net Income was $834 million ($0.72 per share), reconciled from GAAP net income, and Adjusted EBITDA was $1,966 million - Q2 2024 Adjusted Net Income of $834 million was reached after adjusting for several items, most notably a $246 million loss on assets held for sale and a $55 million gain on asset and investment sales[33] - Q2 2024 Adjusted EBITDA was $1,966 million, reconciled from GAAP Net Income by adding back taxes, interest, D&A, and other specific adjustments[36] Free Cash Flow (FCF) and Attributable FCF The company generated $594 million in Free Cash Flow in Q2 2024, a significant turnaround from Q2 2023, calculated from net cash from operations less capital expenditures Q2 2024 Free Cash Flow Calculation (in millions) | Item | Value | | :--- | :--- | | Net cash from continuing operations | $1,394 | | Less: Additions to property, plant and mine development | $(800) | | Free Cash Flow | $594 | - Attributable Free Cash Flow to Newmont Stockholders for Q2 2024 was $592 million[42] Net Debt As of June 30, 2024, Newmont's Net Debt was $6,390 million, derived from total debt and lease obligations less cash and equivalents, slightly lower than year-end 2023 Net Debt Calculation as of June 30, 2024 (in millions) | Item | Value | | :--- | :--- | | Debt | $8,692 | | Lease and other financing obligations | $533 | | Less: Cash and cash equivalents | $(2,602) | | Less: Cash in assets held for sale | $(205) | | Less: Time deposits | $(28) | | Net debt | $6,390 | Costs Applicable to Sales (CAS) and All-in Sustaining Costs (AISC) For Q2 2024, consolidated Gold CAS was $1,152 per ounce and Gold AISC was $1,562 per ounce, both increasing from Q2 2023, with the 2024 Gold AISC outlook at $1,400 per ounce Q2 2024 Cost Metrics (per ounce) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Gold CAS | $1,152 | $1,054 | | Gold AISC | $1,562 | $1,472 | - The 2024 Gold AISC outlook of $1,400/oz is derived from estimated total all-in sustaining costs of $9.15 billion divided by 6.555 million ounces sold[61] Net Average Realized Price The net average realized price for gold in Q2 2024 was $2,347 per ounce, a significant increase from Q2 2023, calculated by dividing net consolidated sales by ounces sold Net Average Realized Price Comparison | Metal | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Gold (per oz) | $2,347 | $1,965 | | Copper (per lb) | $4.47 | $3.26 | | Silver (per oz) | $26.20 | $20.56 | Gold By-Product Metrics Newmont provides by-product cost metrics for comparison, with Q2 2024 Total Gold CAS (by-product) at $892 per ounce and Total Gold AISC (by-product) at $1,412 per ounce Q2 2024 Gold By-Product Cost Metrics (per ounce) | Metric | Value | | :--- | :--- | | Total Gold CAS (by-product) | $892 | | Total Gold AISC (by-product) | $1,412 | Other Information This section covers Newmont's commitment to concurrent reclamation, details for the investor conference call, and standard cautionary statements regarding forward-looking information Committed to Concurrent Reclamation Newmont emphasizes its commitment to concurrent reclamation, expecting cash outflows of approximately $600 million in 2024 and $700 million in 2025, primarily for Yanacocha site activities - Newmont expects to incur reclamation cash outflows of approximately $600 million in 2024 and $700 million in 2025[17] - The spending is primarily related to the construction of two new water treatment plants and post-closure management at the Yanacocha site[17] Conference Call Information Newmont will host a conference call on Thursday, July 25, 2024, at 11:00 a.m. Eastern Time to discuss the second-quarter results - A conference call to discuss Q2 2024 results will be held on Thursday, July 25, 2024, at 11:00 a.m. Eastern Time[73] Cautionary Statements The report contains forward-looking statements regarding future production, costs, capital expenditures, and shareholder returns, which are subject to risks and uncertainties, and investors should consult SEC filings - The report includes forward-looking statements concerning future business, financial performance, production, costs, and returns, which are subject to significant risks and uncertainties[77] - Future dividend payments are not guaranteed and remain at the discretion of the Board of Directors, depending on financial results, balance sheet strength, and other factors[78]