Newmont(NEM) - 2025 Q2 - Quarterly Report

PART I Second Quarter 2025 Results and Highlights Newmont's Q2 2025 net income significantly increased due to higher gold prices and portfolio optimization, supported by strong liquidity and a new $3 billion share repurchase authorization Q2 2025 Financial Highlights (vs. Q2 2024) | Financial Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Sales ($ millions) | $5,317 | $4,402 | | Net Income (attributable to Newmont) ($ millions) | $2,061 | $838 | | Diluted EPS ($) | $1.85 | $0.73 | | Adjusted Net Income ($ millions) | $1,594 | $834 | | Adjusted Diluted EPS ($) | $1.43 | $0.72 | | Adjusted EBITDA ($ millions) | $2,997 | $1,966 | Q2 2025 Operating Highlights (vs. Q2 2024) | Operating Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Attributable Gold Production (k oz) | 1,478 | 1,607 | | Attributable GEO Production (k oz) | 392 | 477 | | Average Realized Gold Price ($/oz) | $3,320 | $2,347 | | Gold AISC ($/oz) | $1,593 | $1,562 | - Completed the sales of the Akyem and Porcupine reportable segments for total consideration of $1.513 billion[16] Also completed partial sales of interests in Greatland Resources and Discovery Silver Corp - Ended the quarter with $6.2 billion of consolidated cash and $10.2 billion of total liquidity[16] Redeemed $1.383 billion of senior notes and repurchased $1.359 billion of shares in H1 2025[16] In July, the Board authorized an additional $3 billion stock repurchase program[16] Financial Statements The unaudited condensed consolidated financial statements reflect Newmont's financial performance for the three and six months ended June 30, 2025, showing increased sales and net income driven by higher gold prices and asset sales, alongside a strengthened balance sheet and improved cash flow Condensed Consolidated Statements of Operations For Q2 2025, sales increased to $5.32 billion from $4.40 billion, with a $699 million gain on asset sales contributing to a substantial rise in net income attributable to Newmont stockholders to $2.06 billion, or $1.85 per diluted share Condensed Consolidated Statements of Operations (in millions) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|---:|---:|---:|---:| | Sales | $5,317 | $4,402 | $10,327 | $8,425 | | Costs applicable to sales | $2,001 | $2,156 | $4,107 | $4,262 | | (Gain) loss on sale of assets held for sale | $(699) | $246 | $(975) | $731 | | Income before income tax | $3,118 | $1,036 | $5,589 | $1,464 | | Net income from continuing operations | $2,075 | $842 | $3,977 | $1,017 | | Net income attributable to Newmont stockholders | $2,061 | $838 | $3,952 | $1,004 | | Diluted EPS from continuing operations | $1.85 | $0.73 | $3.53 | $0.87 | Condensed Consolidated Balance Sheets As of June 30, 2025, Newmont's balance sheet reflects strengthened liquidity with cash increasing to $6.19 billion, largely due to asset sales, while total debt decreased to $7.13 billion and stockholders' equity rose to $32.11 billion Condensed Consolidated Balance Sheet Highlights (in millions) | | At June 30, 2025 | At December 31, 2024 | |:---|---:|---:| | Current Assets | | | | Cash and cash equivalents ($ millions) | $6,185 | $3,619 | | Assets held for sale ($ millions) | $102 | $4,609 | | Total Assets ($ millions) | $55,165 | $56,349 | | Current Liabilities | | | | Debt ($ millions) | $0 | $924 | | Liabilities held for sale ($ millions) | $5 | $2,177 | | Total Liabilities ($ millions) | $22,878 | $26,240 | | Debt (non-current) ($ millions) | $7,132 | $7,552 | | Newmont stockholders' equity ($ millions) | $32,112 | $29,928 | Condensed Consolidated Statements of Cash Flows For H1 2025, net cash from operating activities more than doubled to $4.42 billion, with investing activities providing $1.42 billion primarily from $2.68 billion in asset sales, while financing activities used $3.41 billion for debt repayments and share repurchases Six Months Ended June 30, Cash Flow Summary (in millions) | | 2025 | 2024 | |:---|---:|---:| | Net cash provided by operating activities ($ millions) | $4,415 | $2,170 | | Net cash provided by (used in) investing activities ($ millions) | $1,417 | $(1,439) | | Proceeds from sales of mining operations ($ millions) | $2,675 | $180 | | Additions to property, plant and mine development ($ millions) | $(1,500) | $(1,650) | | Net cash provided by (used in) financing activities ($ millions) | $(3,407) | $(957) | | Repayment of debt ($ millions) | $(1,383) | $(3,650) | | Repurchases of common stock ($ millions) | $(1,359) | $(104) | | Net change in cash ($ millions) | $2,568 | $(464) | Note 3: Divestitures As part of its portfolio optimization, Newmont completed sales of several segments in H1 2025, including Akyem and Porcupine, generating a total gain of $904 million, with the Coffee development project remaining classified as held for sale - The company's portfolio optimization program involves divesting six non-core assets and one development project[41][42] Sales of Akyem and Porcupine were completed in Q2 2025[53] The Coffee development project remains held for sale as of June 30, 2025[53] Gain on Completed Sales (Six Months Ended June 30, 2025, in millions) | Mine | Value of Consideration ($ millions) | Carrying Value of Net Assets ($ millions) | Gain on Sale ($ millions) | | :--- | :--- | :--- | :--- | | CC&V | $263 | $(196) | $2 | | Musselwhite | $813 | $(794) | $19 | | Porcupine | $541 | $(513) | $28 | | Éléonore | $784 | $(612) | $172 | | Akyem | $972 | $(270) | $683 | | Total | $3,373 | $(2,385) | $904 | (Gain) Loss on Sale of Assets Held for Sale (in millions) | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | (Gain) on completed sales ($ millions) | $(711) | $(904) | | (Reversal of write-downs) / write-downs ($ millions) | $0 | $(76) | | Tax impact ($ millions) | $0 | $(17) | | Total ($ millions) | $(699) | $(975) | Note 4: Segment Information Newmont's 11 managed mining operations and NGM constitute its reportable segments, generating $2.47 billion in Q2 2025 pre-tax income, driven by strong performance at Ahafo, Peñasquito, and Cadia, with divested assets also showing a large gain on sale Segment Income (Loss) Before Tax (Three Months Ended June 30, 2025, in millions) | Segment | Sales ($ millions) | Income (Loss) before Tax ($ millions) | | :--- | :--- | :--- | | Ahafo | $657 | $396 | | Peñasquito | $815 | $398 | | Cadia | $596 | $336 | | NGM | $783 | $326 | | Boddington | $543 | $279 | | Yanacocha | $446 | $237 | | Lihir | $517 | $249 | | Akyem (Divested) | $18 | $685 | | Consolidated Total ($ millions) | $5,317 | $3,118 | Segment Capital Expenditures (Six Months Ended June 30, 2025, in millions) | Segment | Capital Expenditures ($ millions) | | :--- | :--- | | Cadia | $273 | | Tanami | $247 | | Ahafo | $247 | | NGM | $195 | | Lihir | $81 | | Consolidated Total ($ millions) | $1,497 | Note 15: Debt In H1 2025, Newmont actively reduced its debt by fully redeeming $957 million of 2026 Senior Notes and partially redeeming other senior notes totaling $448 million, incurring $28 million in extinguishment losses and reducing total face value of debt to $7.42 billion - In Q1 2025, the company fully redeemed all outstanding 2026 Senior Notes for a redemption price of $957 million, resulting in a $13 million loss on extinguishment[139] Partial Debt Redemptions (Six Months Ended June 30, 2025, in millions) | Senior Notes Series | Settled Notional Amount ($ millions) | Total Repurchase Amount ($ millions) | | :--- | :--- | :--- | | 6.250% due 2039 | $164 | $177 | | 3.25% due 2030 | $96 | $91 | | 5.875% due 2035 | $83 | $87 | | 2.25% due 2030 | $67 | $60 | | Total (including others) ($ millions) | $448 | $448 | Note 18: Commitments and Contingencies Newmont faces various commitments and contingencies, including ongoing environmental management at Yanacocha and Dawn sites, a royalty lawsuit, a constitutional challenge to mining leases in Ghana, and multiple shareholder class action and derivative lawsuits alleging false and misleading statements - At Yanacocha, the company is updating its reclamation plan and conducting studies for water management to comply with Peruvian regulations, which could result in future material increases to its reclamation obligation[149][152] - A putative class action lawsuit (Karas v. Newmont) was filed on January 31, 2025, alleging materially false and misleading statements regarding operations, production, and costs between July 24, 2024, and October 23, 2024[166] - Several derivative complaints were filed against directors and officers in early 2025, raising similar allegations to the Karas lawsuit, which have been consolidated and stayed pending motions in the Karas case[167][168] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management's discussion highlights significant profitability increases for Q2 and H1 2025, driven by higher gold prices and portfolio optimization gains, alongside strong liquidity, disciplined capital allocation, and detailed operational performance analysis Consolidated Financial Results Net income for H1 2025 rose to $3.95 billion, a $2.95 billion increase from H1 2024, largely due to higher average realized gold prices and a $975 million gain from divestitures, with total sales increasing by $1.9 billion to $10.3 billion Drivers of Change in Sales (Six Months Ended June 30, 2025 vs. 2024, in millions) | Metal | Increase (Decrease) in Average Realized Price ($ millions) | Increase (Decrease) in Consolidated Volume Sold ($ millions) | Total Change ($ millions) | | :--- | :--- | :--- | :--- | | Gold | $2,560 | $(713) | $1,863 | | Copper | $8 | $(26) | $40 | | Silver | $84 | $(124) | $(31) | - The increase in Net income for H1 2025 was primarily due to higher average realized gold prices, a net gain on completed divestments compared to prior year losses from write-downs, and unrealized gains on marketable equity securities[184] - The decrease in Costs applicable to sales for H1 2025 is primarily due to the impact from divested sites, which resulted in a decrease of $551 million[193] Results of Consolidated Operations In Q2 2025, consolidated gold production was 1.39 million ounces at an AISC of $1,593/oz, a decrease from prior year mainly due to asset divestments, with costs impacted by a change in GEO pricing methodology Gold Production and AISC by Select Mines (Three Months Ended June 30, 2025) | Mine | Gold Produced (k oz) | All-In Sustaining Costs ($/oz) | | :--- | :--- | :--- | | NGM | 239 | $1,771 | | Ahafo | 197 | $1,220 | | Lihir | 160 | $1,563 | | Peñasquito | 148 | $944 | | Boddington | 147 | $1,422 | | Consolidated Total (k oz) | 1,390 | $1,593 | - Peñasquito gold production increased 131% in Q2 2025 vs Q2 2024 due to higher ore grade milled and higher recovery[220] - NGM attributable gold production decreased 6% in Q2 2025 vs Q2 2024 due to lower mill throughput and leach pad production, partially offset by higher grades[229] - Effective January 1, 2025, the company updated its GEO pricing to align with reserve metal price assumptions, resulting in higher costs being allocated to gold[209] Liquidity and Capital Resources The company ended Q2 2025 with strong liquidity of $10.2 billion, including $6.2 billion in cash, and significantly reduced net debt to $1.4 billion, with capital allocation prioritizing shareholder returns and key development projects Liquidity and Net Debt (in millions) | | At June 30, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents ($ millions) | $6,185 | $3,619 | | Available borrowing capacity ($ millions) | $4,000 | $4,000 | | Total liquidity ($ millions) | $10,185 | $7,664 | | Net debt ($ millions) | $1,422 | $5,308 | - In H1 2025, the company executed and settled $1.359 billion in common stock repurchases[267] In July 2025, the Board authorized an additional $3 billion stock repurchase program[268] Capital Expenditures (Six Months Ended June 30, 2025, in millions) | Type | Amount ($ millions) | | :--- | :--- | | Development Projects | $660 | | Sustaining Capital | $837 | | Total (Accrual Basis) ($ millions) | $1,497 | Non-GAAP Financial Measures This section reconciles non-GAAP measures, showing Q2 2025 Adjusted EBITDA at $3.0 billion and Adjusted net income at $1.6 billion, with H1 2025 Free cash flow significantly increasing to $2.9 billion and net debt reconciled to $1.4 billion Reconciliation to Adjusted EBITDA (in millions) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income attributable to Newmont stockholders ($ millions) | $2,061 | $853 | | EBITDA ($ millions) | $3,803 | $1,741 | | Adjustments (e.g., (Gain) on sale of assets) ($ millions) | $(806) | $225 | | Adjusted EBITDA ($ millions) | $2,997 | $1,966 | Reconciliation to Adjusted Net Income (in millions) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income from continuing operations (attributable) ($ millions) | $2,061 | $838 | | Adjustments (e.g., (Gain) on sale of assets, tax effects) ($ millions) | $(467) | $(4) | | Adjusted net income ($ millions) | $1,594 | $834 | Reconciliation to Free Cash Flow (Six Months Ended June 30, in millions) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities ($ millions) | $4,415 | $2,170 | | Less: Additions to property, plant and mine development ($ millions) | $(1,500) | $(1,650) | | Free cash flow ($ millions) | $2,915 | $520 | Quantitative and Qualitative Disclosures About Market Risk Newmont is exposed to market risks from metal prices, interest rates, and foreign currency fluctuations, with sensitivity analyses indicating potential impacts on costs and fair value of hedges from adverse movements in exchange rates - The company's profitability and cash flow are significantly affected by fluctuations in the market prices of gold, copper, silver, lead, and zinc, which can also impact inventory and long-lived asset values[328][329] - A sensitivity analysis indicated that a hypothetical 10% adverse movement in local currency exchange rates would increase Costs applicable to sales per ounce by approximately $74 for the six months ended June 30, 2025[336] Provisional Concentrate Sales Exposure (as of June 30, 2025) | Metal | Provisionally Priced Sales | Effect of 10% Price Change ($ millions) | | :--- | :--- | :--- | | Gold | 152 k oz | $34 | | Copper | 73 M lbs | $23 | | Silver | 3 M oz | $7 | - The company hedges certain AUD and CAD denominated expenditures, where a hypothetical 10% adverse movement in exchange rates would decrease the fair value of these hedges by approximately $274 million[344][345] Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective[348] - No changes occurred during Q2 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[349] PART II – OTHER INFORMATION Legal Proceedings Information regarding the company's legal proceedings is detailed in Note 18 to the Condensed Consolidated Financial Statements - Details on legal proceedings are incorporated by reference from Note 18 of the financial statements[351] Risk Factors There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes were reported from the risk factors previously disclosed in the 2024 Form 10-K[352] [Unregistered Sales of Equity Securities and Use of Proceeds](index=97&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) During Q2 2025, Newmont repurchased 19.29 million shares for approximately $1.02 billion under existing programs, with a new $3 billion program authorized in July 2025 Share Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share ($) | | :--- | :--- | :--- | | April 2025 | 8,156,560 | $49.86 | | May 2025 | 4,620,956 | $52.05 | | June 2025 | 6,510,199 | $56.06 | - In July 2025, the Board of Directors authorized an additional $3 billion stock repurchase program[353] Mine Safety Disclosures Newmont emphasizes safety through its 'Always Safe' program; following the sale of the CC&V mine, the company no longer operates any U.S. mine sites regulated by the MSHA, leading to the omission of Exhibit 95 - As a result of the sale of the CC&V mine, Newmont no longer operates any MSHA-regulated sites in the U.S.[361] - Exhibit 95 (Mine Safety Disclosure) has been omitted because there are no responsive citations, orders, or violations to report for the covered period[361]