NEWMONT Corp /DE/ Q4 FY2024 earnings call

• Safety: Focused on strengthening safety performance through culture, systems, and skill development, with efforts in asset management, team leadership, and task assignment training.
• Asset Integration: Addressed challenges at Cadia and Lihir, with robust operational and technical plans to unlock their potential. Cadia is transitioning to new panel caves and addressing tailings remediation. Lihir is stabilizing mine and processing plant by optimizing mine plans and addressing critical issues.
• Portfolio Rationalization: Divested all six non-core operations, expecting up to $4.3 billion in pretax proceeds and removing ~$1.8 billion in closure liabilities. This positions Newmont with a core set of Tier 1 assets.
• Production and Cash Flow: Exceeded production guidance, generated strong free cash flow, and returned $2.3 billion to shareholders through dividends and share repurchases. Maintained a strong investment-grade balance sheet with over $3.6 billion in cash and $7.7 million in liquidity.
• Project Progress: Ahafo North is on track for first gold in the second half and commercial production by year-end. Tanami expansion made progress with shaft construction. Cadia reached milestones in panel cave development.

In 2024, Newmont exceeded production guidance by delivering 6.8 million ounces of gold and over 150,000 tons of copper. Around 85% of this production was from the go-forward core portfolio. The company generated $2.9 billion in free cash flow, with a record $1.6 billion in the fourth quarter. Revenue contribution from the core portfolio was significant, driven by strong gold prices, higher sales volumes, and positive working capital movements.

• 2025 gold production from go-forward Tier 1 portfolio is expected to be around 5.6 million ounces.
• All-in sustaining cost is projected at $1,620 an ounce.
• Sustaining capital is expected to be $1.8 billion, remaining at this level for the next couple of years for Cadia tailings work.
• Development capital is held at $1.3 billion for 2025.
• Production from core Tier 1 portfolio is weighted ~52% to the second half of 2025, with first quarter expected to be around 23% of the forecast.

• Integration challenges at Cadia and Lihir, requiring robust operational and technical plans to unlock asset potential.
• Geopolitical risks associated with operating in various jurisdictions.
• Impact of the current investment cycle and higher gold prices on unit costs, with all-in sustaining costs expected to be higher in 2025.
• Operational hurdles in mine operations, such as tailings remediation and storage capacity issues at Cadia.

Q: Congrats on the strong finish in 2024 and thanks for all the color already so far in the presentation. Just post the recent debt reduction and the divestments to come through, how should the market think about the gearing and debt targets going forward?

A: Karyn Ovelmen stated that the capital allocation strategy remains unchanged, with a focus on maintaining a strong balance sheet with around $3 billion in cash, debt below $8 billion, funding cash-generative capital projects, returning capital to shareholders via $1 annual dividend and share repurchases.

Q: Just on the Newcrest integration. So last quarter, you reiterated the 5-million-pound synergy run rate had been achieved. But I can't see that in the 4Q release that I may have missed it. Can you just call out for me where I see these numbers in the financials?

A: Natascha Viljoen explained that synergies were hit at the end of 2024, but G&A costs were elevated due to onetime costs, functional spend, and consulting spend associated with efficiency initiatives, with synergies not fully reflected in the bottom line yet.

Q: I just wanted to go back to this discussion about some of the long-term expectations. I appreciate the disclosures earlier in the call, on changes over '26 and '27, but maybe back to some of the comments by Lawson and Daniel. I feel personally like we don't have a lot of information here on the long term or even the short-term outlook beyond 2025 for the Company.

A: Tom Palmer stated that 2025 is focused on stabilizing the business, delivering on commitments with high confidence guidance, and understanding the go-forward portfolio to build a '26 business plan, with more color on 2026 expected next year after working through 2025.