Newmont(NEM) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Newmont generated record third quarter cash flow of $1,600 million, enabling an all-time annual record of $4,500 million with one quarter still remaining [9][13] - Adjusted EBITDA for the third quarter was $3,300 million, and adjusted net income was $1.71 per share, a 20% increase from the second quarter and more than double last year's result [13] - The company ended the quarter with $5,600 million in cash and reduced gross debt to $5,400 million, achieving a near zero net debt position [21][22] Business Line Data and Key Metrics Changes - Production was largely in line with the second quarter, driven by higher grades at Brucejack, improved productivity at Cerro Negro, and success from patented injection leaching technology at Yanacocha [11] - Penasquito delivered a lower proportion of gold but steady lead, silver, and zinc production, consistent with planned sequences [11] - Ahafo North mine declared commercial production, expanding the existing footprint in Ghana and adding profitable gold production over an initial thirteen years [10][24] Market Data and Key Metrics Changes - The company received nearly $640 million in net cash proceeds from equity and asset sales since the start of the third quarter, marking the successful completion of its asset divestment program [9][14] - Moody's upgraded Newmont's issuer credit rating to A3 with a stable outlook, reflecting improved credit profile and prudent financial management [10] Company Strategy and Development Direction - Newmont is focused on maintaining a strong balance sheet, funding cash-generative capital projects, and returning capital to shareholders [15][22] - The company has streamlined its organizational structure into two business units, enhancing decision-making authority at operating sites [9][10] - Future capital allocation will prioritize internal investments and share buybacks, with a disciplined approach to any potential acquisitions [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year production guidance and highlighted strong execution across all managed operations [15] - The company anticipates a reduction in absolute cost guidance for 2025 by approximately 15% due to cost-saving initiatives [16] - Management acknowledged the potential impact of elevated gold prices on profit sharing, royalties, and production taxes, but expects to offset these through ongoing optimization [20] Other Important Information - Newmont has returned $823 million to shareholders since the last earnings call through dividends and share repurchases [10][22] - The company has repaid $3.9 billion of debt over the last two years and returned over $5.7 billion to shareholders [24] Q&A Session Summary Question: Capital allocation and balance sheet strategy going into 2026 - Management remains committed to a defined capital allocation framework and will review returns to shareholders quarterly [29][30] Question: Updates on project pipeline and potential delays - Red Chris remains on track for a proposal to the Board by mid-next year, with ongoing investigations from a previous incident incorporated into feasibility studies [32] Question: Key appointments and team structure post-restructuring - The executive leadership team is capable, with a focus on operations and projects, and a key appointment for CFO is being prioritized [36][38] Question: Ahafo North ramp-up and commercial production - The ramp-up is on schedule, with commercial production declared after running for thirty days at over 65% of design capacity [39] Question: Reserve pricing and growth expectations - Management is in the middle of budgeting and resource review, with outcomes expected in February next year [44] Question: Cost inflation and underlying cost pressures - Normal increases in labor and consumables are expected, but cost-saving initiatives are helping to offset some inflationary pressures [81] Question: Exploration and advanced projects capital allocation - The reduction in exploration spending is a result of a deliberate review of asset potential and targeting dollars towards high-value areas [103]