Newmont Corporation — Q1 2024 Form 10-Q Summary
Business context and reporting period
Newmont is a global gold producer with by-product exposure to copper, silver, lead and zinc. The filing covers the unaudited quarter ended March 31, 2024, compared primarily with the quarter ended March 31, 2023. Results include the Newcrest operations acquired on November 6, 2023; therefore, many comparisons are not fully comparable.
Key financial and operating metrics
| Metric | Q1 2024 | Q1 2023 | Change |
|---|---|---|---|
| Sales | $4,023 million | $2,679 million | +50% |
| Net income attributable to Newmont stockholders | $170 million | $351 million | -$181 million |
| Continuing-operations net income attributable to stockholders | $166 million; $0.15 diluted EPS | $339 million; $0.42 diluted EPS | -$173 million |
| Adjusted net income | $630 million; $0.55 diluted EPS | $320 million; $0.40 diluted EPS | +97% |
| Adjusted EBITDA | $1,694 million | $990 million | +71% |
| Cash flow from continuing operations | $776 million | $481 million | +61% |
| Free cash flow | $(74) million | $(45) million | Lower by $29 million |
| Gold produced | 1.619 million ounces | 1.233 million ounces | +31% |
| Gold sold | 1.599 million ounces | 1.208 million ounces | +32% |
| Gold realized price | $2,090/ounce | $1,906/ounce | +10% |
| Gold all-in sustaining costs | $1,439/ounce | $1,376/ounce | +5% |
Sales growth reflected higher volumes across all metals, the Newcrest contribution and higher realized gold prices. Gold sales were $3,341 million, copper sales were $297 million, silver sales were $201 million, lead sales were $60 million and zinc sales were $124 million.
Reported earnings were reduced by a $485 million loss on assets held for sale, consisting of a $352 million write-down and a $133 million tax impact. Costs applicable to sales increased 42% to $2,106 million, while depreciation and amortization increased 42% to $654 million, primarily due to Newcrest operations.
At March 31, 2024, cash and cash equivalents were $2,336 million, plus $342 million classified within current assets held for sale. Total liquidity was $6,678 million, including $4,000 million of available revolving-credit capacity. Debt was $8,933 million, lease and other financing obligations were $535 million, and reported net debt was $6,790 million.
Material changes versus the prior comparable period
- Newcrest contributed $992 million of revenue and $224 million of net income attributable to Newmont stockholders in Q1 2024.
- The company approved a portfolio optimization program to divest CC&V, Musselwhite, Porcupine, Éléonore, Telfer, Akyem and the Coffee development project. These disposal groups had $5,656 million of current assets and $2,351 million of current liabilities classified as held for sale at quarter-end.
- Operating cash flow increased despite a $291 million payment for Newcrest-related stamp duty. Capital expenditures on a cash basis rose to $850 million from $526 million, resulting in negative free cash flow.
- Newmont refinanced Newcrest-related bank debt, amended its revolving facility from $3,000 million to $4,000 million with an expiration date of February 2029, and issued $2,000 million of senior notes due 2026 and 2034. The revolving facility had no outstanding borrowings at quarter-end.
- The quarterly common dividend was reduced to $0.25 per share from $0.40 per share in Q1 2023. A discretionary share-repurchase authorization of up to $1 billion was approved in February 2024; no repurchases occurred under that program during the quarter.
Guidance, outlook, commentary and risks
The filing does not provide a clear consolidated full-year production, cost or cash-flow guidance figure in the supplied text. Management expects existing cash, operating cash flow and available revolver capacity to fund operations, development projects, debt obligations and other liquidity needs for the foreseeable future.
- Key development projects include Tanami Expansion 2, Ahafo North and Cadia Block Caves. First-quarter development capital spending included $54 million at Tanami Expansion 2, $59 million at Ahafo North and $40 million at Cadia Block Caves.
- Operations at Cerro Negro were suspended in Q2 2024 following the deaths of two workforce members on April 9, 2024. Brucejack had previously been temporarily suspended after a fatality and returned to full operations by the end of January.
- Seepage points were detected after quarter-end on the outer wall and around the Telfer tailings storage facility; placement of new tailings was temporarily ceased pending investigation.
- Environmental and closure exposures remain significant. Reclamation and remediation liabilities totaled $7,228 million at March 31, 2024, including approximately $4,808 million related to Yanacocha.
- Yanacocha water-treatment and closure studies remain ongoing, and the company warns that future reclamation obligations could increase materially. Other environmental matters include CC&V, the Midnite mine and Dawn mill sites, Porcupine legacy hazards and Cadia air-emissions proceedings.
- Outstanding letters of credit, surety bonds and bank guarantees totaled $2,218 million. The company also disclosed unresolved legal matters, including the Holt royalty litigation and Ghana mining-lease proceedings.
- Results remain highly sensitive to gold and other metal prices, operating costs, inflation, foreign-exchange rates, supply-chain conditions, labor availability, permitting, safety incidents, environmental requirements and geopolitical developments. A hypothetical 10% adverse movement in foreign currencies would increase costs applicable to sales per ounce by approximately $103.
- The Newcrest purchase-price allocation remains preliminary and could result in material changes to acquired asset, liability and goodwill values during the measurement period.
Important facts for investors to verify
- Whether planned divestitures close within 12 months and whether additional held-for-sale write-downs occur.
- The timing, cost and operating impact of the Cerro Negro safety investigation and the Telfer tailings investigation.
- Actual realization of Newcrest integration benefits and whether Newcrest-related costs or accounting adjustments continue.
- Gold production, all-in sustaining costs and capital spending relative to any subsequent full-year guidance.
- Progress and final cost estimates for Yanacocha water treatment, reclamation obligations and other environmental commitments.
- Debt maturities, interest expense and the company’s ability to maintain positive free cash flow while funding development capital and dividends.
- Final pricing adjustments on provisionally priced concentrate sales, which could affect future revenue and earnings.