Newmont reports first quarter earnings

Newmont Corp. posted adjusted net income of $630 million, or 55 cents per share, in the first quarter, and the company reported production of 1.68 million attributable gold ounces, including 264,000 ounces for its share of Nevada Gold Mines in the quarter.

“Newmont delivered a strong first quarter operational performance, producing 2.2 million gold equivalent ounces and generating over $1.4 billion in cash from operations before working capital changes,” said Tom Palmer, president and chief executive officer of Denver-based Newmont.

The 2.2 million gold equivalent ounces cover the 1.7 million ounces of gold and 489,000 gold equivalent ounces from copper, silver, lead and zinc production, and the company reported that 1.4 million of those gold ounces came from its Tier 1 portfolio.

Gold production is up from 1.27 million ounces in the first quarter of 2023, before Newmont acquired Newcrest Mining in November 2023. Newmont’s all-in sustaining costs were up companywide to $1,439 per ounce, compared with $1,376 per ounce in the 2023 quarter.

The company’s adjusted net income of $630 million, compared with $320 million, or 40 cents per share, in the first quarter of last year covers a $485 million loss on assets held for sale since the Newcrest merger. Newmont is selling smaller operations, including the Cripple Creek & Victor Mine in Colorado.

The other mines Newmont doesn’t consider core assets and is selling include Telfer in Australia, Akyem in Ghana, and Porcupine, Eleonore and Musselwhite in Canada.

Palmer said in the earnings webcast that Newmont has started the sale process on all six assets and is in the first phase of the process – “the price discovery phase,” and he said there is a high level of interest. The company “will work to divest those assets for fair value over the next 12 months,” he said. “Our preference is on cash.”

Net income from continuing operations was $166 million, or 15 cents per share, for the first quarter, compared with $339 million in the 2023 quarter. Revenue totaled $4.02 million, compared with $2.68 million in the first quarter of last year.

“Underpinned by the gold industry’s leading portfolio of Tier 1 gold and copper operations, we remain well-positioned to achieve our full-year guidance and deliver meaningful synergies and productivity improvements from the combined portfolio,” Palmer said in the April 25 earnings announcement.

The company reported that synergies from the Newcrest merger total $105 million to date, and Newmont is on track to deliver $500 million in annual synergies by the end of 2025. Newmont’s guidance for this year calls for 6.93 million ounces of gold production at an all-in sustaining cost of $1,400 per ounce.

Newmont’s average realized gold price for the first quarter was $2,090 per ounce, an increase of $86 over the average realized gold price in the fourth quarter of last year, and $184 over the price of $1,906 per ounce in the first quarter of 2023. The New York spot gold price closed at $2,336.90 per ounce on April 26.

Newmont shares closed at $42.77, down 68 cents, on April 26, although the earnings report on April 25 beat analyst expectations. Zacks Consensus Estimate was 35 cents per share, while the company’s adjusted earnings were 55 cents per share. Newmont’s share price drop on April 26 did follow a 13% rise in share price on April 25.

The Newmont board declared a dividend of 25 cents for the first quarter.

“We remain focused on delivering on the commitments we laid out at the beginning of this year, creating an attractive value proposition for new and existing investors during this unique time in the gold industry,” Palmer said in the report.

Gold production for the first quarter for Newmont’s 38.5% share of Nevada Gold Mines was 264,000 ounces, compared with 261,000 ounces of gold produced for its share in the first quarter of 2023. Nevada Gold Mines is a joint venture of Newmont and Barrick Gold Corp. Barrick owns 61.5% of NGM and is the operator.

Newmont’s outlook for 2024 includes 1.08 million ounces of gold from NGM production.

Newmont also announced the sale of its Lundin Gold Stream credit facility and offtake agreement in the first quarter for $330 million. The company will maintain its equity interest in Lundin Gold, however. Lundin Gold operates the Fruta del Norte gold mine in Ecuador.

The company additionally reported that operations at the Cerro Negro Mine in Argentina remain suspended as a full investigation continues into the deaths of two mine employees on April 9. Newmont’s Telfer operations are temporarily suspended as work continues to remediate a tailings storage facility.

Palmer said in the earnings call that Newmont published its 20th Annual Sustainability Report and third annual taxes and royalties contribution report, “both providing a detailed and transparent look at our values-driven approach to sustainability and the economic contributions we made in the jurisdictions and communities that we operate in.”

Chief Financial Officer Karyn Ovelmen said in the earnings call that “historically, Newmont’s stand-alone reclamation spend averaged around $200 million to $300 million per annum, but we expect to spend around $600 million in 2024 and peak around $700 million in 2025 before beginning to decline in 2026.”