Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Newmont Corp (NYSE:NEM) exceeded its production guidance by delivering 6.8 million ounces of gold and over 150,000 tonnes of copper in 2024.
• The company generated a record free cash flow of $1.6 billion in the fourth quarter, driven by strong gold prices and higher sales volumes.
• Newmont Corp (NYSE:NEM) successfully completed its divestment program, selling six non-core operations, which is expected to result in $2.5 billion in cash proceeds.
• The company maintained a strong balance sheet with over $3.6 billion in cash and $7.7 billion in liquidity, while retiring $1.4 billion in debt.
• Newmont Corp (NYSE:NEM) returned $2.3 billion to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder returns.

Negative Points

• The integration of acquired assets like Cadia and Lihir faced challenges, requiring significant investment to realize their full potential.
• All-in sustaining costs are expected to rise to $1,620 per ounce in 2025 due to sustaining capital investments and macroeconomic factors.
• The company is undergoing an investment cycle that will keep sustaining capital at elevated levels over the next few years.
• Newmont Corp (NYSE:NEM) is carrying unacceptably high G&A costs, which are expected to decrease as the company transitions to a smaller portfolio of managed operations.
• The company provided only one-year guidance for 2025, focusing on stabilizing the business, which may leave investors seeking more long-term visibility.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with NEM.

Q: Can you discuss the recent debt reduction and divestments, and how they impact your gearing and debt targets going forward? A: Karen Sullivan, CFO: Our capital allocation strategy remains unchanged. We aim to maintain a strong balance sheet with around $3 billion in cash and debt below $8 billion. We are steadily funding our cash-generative projects with $1.8 billion in sustaining capital and $1.3 billion in development capital. We also continue to return capital to shareholders through dividends and share repurchases.

Q: What is the status of your growth projects, and when can we expect updates on them? A: Tom Palmer, CEO: Our focus is on delivering the three projects currently in execution with a $1.3 billion spend. We have exciting projects in the pipeline, such as Red Chris and Yanacocha sulfides, which are undergoing feasibility studies and permitting. We aim to bring these projects online once we complete our current commitments.

Q: Can you explain the difference between your reserve price assumption and your cost guidance? A: Tom Palmer, CEO: We set our reserve price based on a rigorous annual process considering the three-year trailing average price and analyst forecasts. Our cost guidance reflects current operational realities, including significant investments in sustaining capital and macroeconomic factors. We aim to reduce costs and improve productivity to align with our Tier 1 asset portfolio.

Q: Why are your G&A costs expected to be high in 2025, and how will they change in the future? A: Tom Palmer, CEO: Our G&A costs are currently elevated due to the integration of Newcrest and ongoing divestments. As we complete these processes and reduce our portfolio to 11 managed operations, we expect G&A costs to decrease significantly, aligning with our streamlined operations.

Q: What is your approach to providing guidance, and will you return to longer-term forecasts? A: Tom Palmer, CEO: After a year of transformation, our focus is on stabilizing the business and delivering high-confidence guidance for 2025. We are working to understand the full potential of our portfolio and will provide more detailed guidance for 2026 and beyond once we have a clearer picture.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.