Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Newmont Corp (NEM, Financial) reported a record first quarter free cash flow of $1.2 billion, driven by strong operational performance and favorable gold prices.
- The company successfully completed its divestment program, generating over $2.5 billion in after-tax cash proceeds this year, which strengthens its balance sheet.
- Newmont Corp (NEM) achieved a notable decrease in the frequency of significant potential safety events, reflecting improvements in its safety culture.
- The company is on track to meet its full-year guidance, with first-quarter production of 1.5 million ounces of gold and 35,000 tonnes of copper.
- Newmont Corp (NEM) has completed approximately $2 billion in share repurchases from its $3 billion program, demonstrating a commitment to returning capital to shareholders.
Negative Points
- The company anticipates increased working capital needs in the second quarter due to the timing of cash tax and interest payments.
- Newmont Corp (NEM) expects sustaining capital expenditures to increase in the second quarter, particularly at Cadia, which may impact cash flow.
- The divestment of noncore assets means future financial results will no longer include production and associated free cash flow from these operations.
- There is ongoing uncertainty regarding tariffs and their potential impact on the company's cost structure, particularly in consumables and labor.
- The company is in an investment cycle with higher unit costs, and there is a focus on improving margins and leveraging the full strength of its portfolio.
Q & A Highlights
Q: Lihir's cash costs dropped significantly this quarter. How should we think about the cash cost profile there, and are you surprised by the cost levels you're achieving?
A: Thomas Palmer, CEO: Our focus at Lihir is on configuring the mine to sustainably work through Phase 14A. We completed significant shutdowns last year, including rebuilding autoclave 4. Karyn Ovelmen, CFO: There was a $100 million impact from inventory adjustments, which is non-cash and will normalize over the year. We expect Lihir to meet its full-year cost guidance.
Q: Can you provide commentary on the pace of share buybacks? Will it be front-half weighted due to asset divestitures?
A: Karyn Ovelmen, CFO: We are continuing with the share buyback program, supported by cash build and proceeds from divestitures. With the elevated gold price, we will continue share buybacks throughout the year and into next year.
Q: With gold prices near record highs, how does this affect your business management?
A: Thomas Palmer, CEO: We are focused on delivering safety, cost, and productivity performance irrespective of the gold price. Our priority is to realize the potential of our 11 managed operations and projects, such as commissioning Ahafo North and advancing Cadia's block caves.
Q: What are the major projects you might consider for investment in the next 12 months?
A: Thomas Palmer, CEO: Red Chris is in a prime position, with a feasibility study underway. We are also engaging with local governments for permits. Our development capital is fully consumed with current projects, but as Ahafo North ramps up, we may consider new projects.
Q: How are tariffs impacting your cost structure, particularly consumables and labor?
A: Thomas Palmer, CEO: Labor costs are consistent with budgeted amounts. For consumables, we see some upward pressure on grinding media due to steel prices, mixed trends in ammonia and cyanide costs, and flat explosives costs. Energy costs are benefiting from lower oil prices. Overall, costs are consistent with our assumptions for the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
