Newmont Corporation (NEM) on Q1 2021 Results - Earnings Call Transcript

Operator: Good morning, and welcome to Newmont's First Quarter 2021 Earnings Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask question. Please note this event is being recorded. I would now like to turn the conference over to Eric Colby, Vice President of Investor Relations. Please go ahead. Eric Colby: Thank you, and good morning. Welcome to Newmont's First Quarter 2021 Earnings Call. Today on the call today we have Tom Palmer, President and Chief Executive Officer; Rob Atkinson, Chief Operating Officer; Nancy Buese, Chief Financial Officer. They will be available to answer questions at the end of the call along with other members of the executive team. Turning to Slide 2. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found on our website. Tom Palmer: Thanks, Eric. Good morning, and thank you all for joining our call. Before we begin, I'd like to take a moment to acknowledge the 12 colleagues that we've lost to the COVID pandemic over this last year. For each death, we've mobilized investigation team and utilized the same methodology we do for other employee, who contract to fatalities. The intent of each investigation was to understand if any of that COVID controls require change and ensuring that we learn and share our findings globally. These losses have had a profound impact on the entire Newmont family. And it is with great humility that we're reminded that the safety and wellbeing of our workforce and health communities must come above all else. Turning to Slide 4, for a summary of our quarterly performance. The safety and sustainability framework is at the core of how we manage our business and I'm proud that Newmont continues to lead the industry with our ESG practices. In March, we delivered first for gold industry with production coming from an autonomous haul fleet. Our investment in autonomous haul trucks not only improves safety and productivity at Boddington. But also serves as a best case for replication at other operations and projects across the Newmont portfolio. We also entered into a $3 billion sustainability-linked revolving credit facility one of the first in the mining industry. By aligning our financial strategies and ESG performance we're holding ourselves accountable and demonstrating Newmont's unwavering commitment to leading the ESG practices. During the first quarter, our world class portfolio produced 1.5 million ounces of gold and 317,000 gold equivalent ounces from copper, silver, lead and zinc. In line with our full year outlook and positioning Newmont to deliver a stronger performance as expected in the second half of the year. We generated significant operating cash flow of $841 million and free cash flow of $442 million of which $438 million is attributable to Newmont. And in March, we announced the acquisition of GT Gold expanding our industry leading project pipeline to include the Tatogga project located in the highly sought after Golden Triangle district of British Columbia. We continue to apply a disciplined approach to our capital allocation priorities and deliver on our commitments. Yesterday, we declared first quarter dividend of $0.55 per share set within our established dividend framework and consistent with our fourth quarter dividend. Our first quarter dividend demonstrates our confidence in the strength of our business and continued commitment to predictable, stable and sustainable shareholder returns. Rob Atkinson: Before I start, I'd like to recognize the very significant efforts that continue to be applying at all of our operations in order to manage COVID and to keep our team safe and healthy. It is important to realize that this pandemic has some way to run and these efforts will need to continue from many months to come. Turning to Slide 11, I'll give an update on Africa's performance. Our assets in Africa delivered another strong performance in the first quarter and team maintained its momentum from quarter four delivering a strong first quarter from higher grade and improvements to the middle. We increased mill efficiency and overall planned performance during the first quarter, improving throughput by 3% whilst also reducing energy consumption by 4%. These improvements are driven by full potential projects and are an example of how we continue to find elevated solutions even at our matured operations. Nancy Buese: Thanks Rob. Turning to Slide 17 for the financial highlights. During the first quarter, Newmont delivered solid results with $2.9 billion in revenue an increase of nearly $300 million from the prior year quarter, driven by higher metal prices. Adjusted net income of $594 million or $0.74 per diluted share. Adjusted EBITDA of nearly $1.5 billion an increase of 30% from the prior year quarter. A strong free cash flow of $442 million which includes unfavorable working capital changes of over $325 million in the first quarter primarily driven by nearly $400 million of tax payments attributable to 2020. We declared a first quarter dividend of $0.55 per share or $2.20 per share on an annual basis. Demonstrating our continued commitment to sustainable returns and consistent with our fourth quarter dividend. Our dividend puts Newmont in the top quartile of the S&P large cap dividend payers and provides the yields of approximately 3.5% on our current share price. Turning to Slide 18 for review of our adjusted earnings per share in more detail. First quarter GAAP net income from continuing operations was $538 million or $0.67 per share. Adjustments included $0.14 related to the unrealized mark-to-market losses on equity investments measured as of March 31st. $0.05 primarily related to our sale of interest, our interest in TIMAC, which closed in January of this year. $0.01 related to reclamation, remediation adjustments at historical mining sites. And $0.03 related to tax adjustments and valuation allowance. Taking these adjustments into account we recorded first quarter adjusted net income of $0.74 per diluted, an increase of $0.34 over the prior year quarter. One difference from 2020 that we would like to point out is that adjustments to net income do not include $21 million of incremental COVID costs. Adjusting for these costs would have resulted in $0.02 of additional net income in the first quarter and we expect these costs to continue throughout the year as we protect against the impact of the pandemic at our operational sites. Turning now to Slide 19, using our conservative $1,200 gold price assumption Newmont expects to generate $3.5 billion of free cash flow over five-year period. In addition, for every $100 increase in gold prices about our base assumption. Newmont delivers $400 million of incremental attributable free cash flow per year. Newmont is the only company in the gold mining industry with the ability to generate these levels of attributable free cash flow. Enabling us to maintain flexibility in our balance sheet for debt repayments and opportunistic M&A. in addition to providing industry leading shareholder return. Turning to Slide 20 for more details about our dividend. Our dividend framework provides shareholders with stable base annualized dividend of $1 per share at a $1,200 gold price. Along with the potential to receive 40% to 60% of the incremental attributable free cash flow generated at gold prices above our plan. This range provides Newmont with the flexibility to maintain a stable and consistent dividend payout even when there is fluctuation in gold price. We will continue to review our dividend each quarter with management and our board evaluating gold prices in Newmont projected performance semi-annually to give us maximum flexibility in determining our dividend within the framework. The first quarter dividend declared yesterday was consistent with our fourth quarter dividend, calibrated at an $1,800 gold price assumption and a conservative 40% distribution of incremental free cash flow. Our dividend framework continues to be our primary vehicle for returning cash to our investors and Newmont continues to lead the industry with shareholder return, delivering $4.50 per share through dividends and share buybacks since 2019. Turning to Slide 21. We continue to drive the business with our clear capital allocation priorities which include reinvesting in our business through disciplined investments in exploration and organic growth projects. Returning cash to shareholders and maintaining our financial strength and flexibility. During the first quarter we delivered on each of these priorities with our investments in the first Autonomous Haulage fleet in the gold mining industry and improving safety and productivity at Boddington. Progressing our profitable reinvestments in the business at the Tanami Expansion and advancing Ahafo North and Yanacocha Sulfides. Announcing the acquisition of GT Gold, maintaining our industry leading dividend of $2.20 per share on an annualized basis and announcing a new $1 billion share buyback program. We chose not to repurchase shares during the first quarter and continue to monitor for opportunities. Maintaining a net debt to EBITDA ratio of 1.2 times and completing the redemption of our 2021 senior notes in April. Reducing our debt outstanding by $550 million with available cash and maintaining financial flexibility with the completion of the $3 billion sustainability-linked revolving credit facility. One of the first in our industry and a demonstration of our commitment to leading ESG practices. Under the new facility the company will incur pricing adjustments on drawn balances based on sustainability performance criteria measured through ratings published by MSCI and S&P Global. Aligning our financial strategies and our ESG performance. As we look ahead to the second quarter, we are confident in our ability to continue delivering strong results and free cash flow to maintain our disciplined approach to capital allocation. With that, I'll hand it back to Tom on Slide 22. Tom Palmer: Thanks Nancy and turning to Slide 23. Newmont continues to be the world's leading gold company. And I'm confident that our world class portfolio and robust project pipeline have positioned Newmont to deliver on our commitment of creating value and improving lives through sustainable and responsible mining. With that, I'll turn it over to the operator and open the line for questions. Operator: and your first question will come from Fahad Tariq of Credit Suisse. Please go ahead. Fahad Tariq: First it sounds like across the portfolio consistent theme is second half weighted production. But I'm trying to figure out how much of that is sequencing and grade improvement and how much of it is some of the South American COVID issue that you mentioned and also the Musselwhite COVID issue that you mentioned. So any color there would be helpful, grades versus kind of COVID impacting the first half. Tom Palmer: Thanks Fahad. Good morning. The little moments in our portfolios are Ahafo, Boddington and Peñasquito. Peñasquito on gold production is pretty flat through the 12 months roughly 50-50 first half and second half. But it's going to really move the dial in the second half, this mine sequencing and grade at both Boddington and Ahafo. So Boddington we're being lying back for the fifth buyback of the south pit in Boddington, Ahafo, three and half years in the second half. We get access to the high grade gold and copper and the benefit of the top most haulage which should be fully implemented by the second half. So to see that flow through I think in the second half a significant high grade. And at Ahafo, the combination of the new underground mining method coupled with shrinkage will bring through more volume and improved grade and then you've got improved grade from the Subika open pit as well. So it's largely mine sequence and grade driven and it's those three operations that really will deliver on that second half performance. Fahad Tariq: Okay, great. That's clear and just my second question. There was a media article this talking about the GT Gold at Tatogga project and the local indigenous groups perhaps are not really being open to the project. Maybe talk about your approach there more specifics and like historically what levers has Newmont used to kind of get that buy in. thanks. Tom Palmer: Thanks Fahad. So our relationship with the Tahltan actually started several years ago with our acquisition 50% of Galore Creek project in that part of British Columbia. So we have established relationships that we look to grow, build on with the whole representatives of the Tahltan Nation and when you look back at our long history of social responsibility it is very much founded on building those relationships, understanding issues of concerns of how we can work together. So we fully understand, we fully acknowledge that we'll need Tahltan consent to advance that project and we'll be endeavoring to work with them respectfully and engage with the relationship of those various communities to find their shared pathway forward and that is very much the approach the Newmont takes with everywhere we're working in the North. Fahad Tariq: Okay, thank you. Operator: Your next question comes from Tyler Langton of JP Morgan. Please go ahead. Tyler Langton: Just start with sort of through and again, of course I guess there seems potentially some sort of increasing political risk there. I guess you obviously have some time before full funds demission but I guess do those developments kind of give you any positive. Can you also just remind us - stability agreements when it comes to taxes and royalties or other rights? Tom Palmer: Thanks Tyler, good morning. We've been operating in Peru for 30 years. We're basically in Peru, before democracy was in place, is how we've linked and worked through what has been a color democracy in Peru's modern history. And this is another chapter in that journey. So we'll monitor the Presidential Elections carefully and have the Congress and hopefully the new President work together. We have been a very successful 30 years in Peru. When we think about making investments like Yanacocha Sulfides. We think about making investments which for project like Sulfides if you literally for big ice with the quality of the Sulfide deposit around the Yanacocha property, so little bit we're looking to understand these are coming in the next month or two. That will factor into our process of internal discussions with our board and our joint venture partner and then ultimately, I look forward to being able to make a full fast decision and the rest Sulfides and they have that delivering great returns for Newmont shareholders and the community around car market for a long, long time to go. Tyler Langton: Okay, that's helpful and then just switching to Peñasquito, sort of production kind of did quite well in the quarter and both use of cash cost and all-in sustaining cost decent amount below guide, can you just kind of remind us your explanations for that mine for the year and what to kind of expect in the following quarters? Tom Palmer: I'll get Rob to provide some color on it. It's pretty steady performance and we certainly look at, it's a polymetallic mine, so we certainly look at developing that mine and managing on the basis of the form at it's sort of producing. But if you see, pretty steady performance through the year. Rob, if you want to provide a bit more color to Tyler. Rob Atkinson: Thanks Tyler. I'd really just back up what Tom said is that, the best way to describe Peñasquito is steady performance, where we get good gold one quarter. Where we go into other elements, another quarter. The key thing about Peñasquito is that the mill is performing well. The mine is performing well. The team is performing well and managing COVID as well as possible in a country which has suffered huge impact due to the pandemic. But it really is going to be a very steady. But a successful year, in Peñasquito. Tyler Langton: Okay, perfect. Thanks so much. Operator: Your next question comes from Josh Wolfson of RBC. Please go ahead. Josh Wolfson: So for the 2021 outlook the comment I guess is that, there's the assumption of no major COVID interruptions. The commentary on the call earlier was such that there's obviously a higher degree of interruptions in South America and then at brief stop I guess at Musselwhite. How would sort of those interruptions compared to some of the caveats with the new guidance? Tom Palmer: Thanks Josh. Good morning. I think we're certainly seeing a number of impacts at both the Yanacocha and Cerro Negro. It's a real arching scene across our portfolio at countries where we're seeing greatest impact from COVID. We get better and better at managing our product goals both mentioned at Cerro Negro and not a dedicated theme managing shift changes which is a very, very complex process in Argentina and how you're doing all your grading and monitoring and ensuring and everything up with workforce in for the shift that - clear of the virus and quarantine, if we do ever close. So it's really monitoring those two operations. Mexico as a country is still struggling with the virus. But we've got very, very good protocols in place throughout that country. Well in the United States fortunately it's starting to really turn the tide. You've seen the recent events in Ontario, confident that the Canadian government will increase those through Australia and Ghana we've seen the pandemic managed through very well. I think we're still going to need to be have a chronic analyze and the continuing demand time and discipline around our protocols as vaccines become available encouraging our workforce to take the vaccines, supporting the governments where they came all that outside of it. We can have an improving trend overtime. So I believe they got the protocols and the discipline in place to manage COVID and maintain everyone through the course of this year. Josh Wolfson: Great, thank you and then just maybe a question on some of the trends we're seeing. We've seen commentary at least from maybe not as much the gold sector but other resource companies about labor tightness and sort of regions and obviously with higher commodity prices globally. Is there any commentary you can provide on what trends you're seeing across the portfolio on labor and cost? Tom Palmer: Thanks Josh. Monitoring that closely, labor cost back up about 6% of their cost base that include contracted services. We employed an assumption for later exploration in our budgets and then we flow that through to our guidance. So we've got some provision for that. The key leading indicator I look for in seeing what we maybe seeing some wage pressure is voluntary attrition. It's pretty healthy across our business. In some ways our response to the pandemic and the fact that we chose and we continue to choose to manage the health and safety of our workforce and local communities about everything else is, that served us really in terms of support that we have from our workforce. But the areas that I've been monitoring more closely on the risk of labor escalation - Australia, it's pretty high in all markets as you see, buying oil prices, heat in and all-time high. I wish Australian government that is locking borders and encouraging the workforce to come from within that state which put pressure on the supply of labor. We're very fortunate, we've got very robust workplaces at both Boddington and Tanami. Good leadership. Healthy levels of attrition and projects like tonnage haulage just mitigate that very significantly where your truck fleet and a labor force, truck fleet is one of the greatest sources of labors. So monitoring closely. But the voluntary efficient numbers are leading indicators took results across our business. Josh Wolfson: Great. Thank you very much. Operator: Our next question comes from Greg Barnes of TD Securities. Please go ahead. Greg Barnes: Tom, I guess this is a higher-level question. But when I look at your portfolio maybe on projects since you called in earlier on. It's pretty striking how much copper is there and you said, you could see yourself get into 20% copper exposure overtime. Is that a conscious decision? Over the longer term to diversify the production base or not? Or is that function of the projects that are available to you - look attractive to you think you're adding for like Tatogga? Tom Palmer: Yes, thanks Greg. It's still very much clear focus on gold as the core of our business. But organically the way I've seen, that as you look for the best gold projects they come with particularly when you look at our world class initiative and look for those long-life projects and you look for those projects in the jurisdictions, we're prepared to work in. they come with copper. So it's more of an organic benefit from that. We focus on the right size projects in the right jurisdiction. The Tatogga project has some nice copper. The Yanacocha has some copper with it. And several of those mega projects particularly Galore Creek bring with them some nice copper. So it's more of an added benefit as we say it's going to come out of nice time with a world their energy transition. Greg Barnes: And just Tatogga, when I look at the acquisition price and if I assume you assumed $1,200 long-term goal that would have implied a pretty healthy long-term copper price. How did you approach the acquisition price to GT? Tom Palmer: I've got Eric sitting opposite me. He's shepherd that one through, so why don't I get Eric to just give you a little bit color on that Greg. Eric Colby: Greg, we obviously will look at multiple price scenarios. Since $1,200 would have been one of our base copper price at the time. I think it was 275 obviously that copper price and the outlook is quite strong. So we didn't have any single case that we looked at is, as you pointed out there's a fair bit of copper, there's a fair bit of gold. So it's really the interplay of the two metals across different scenarios. As we've - I think highlighted, we see potential for Tatogga to be a world class asset for us and that means a long life, pretty significant production, at good cost. Tom pointed out on the call, the geometry is pretty attractive to an efficient block cave and so all of that was attractive to us when making the acquisition. Greg Barnes: Okay, great. Thank you. Operator: Your next question comes from Tanya Jakusconek of Scotiabank. Please go ahead. Tanya Jakusconek: Congratulations on those trucks at Boddington. I love the color. Hope to see them one day. Just wanted to have a few questions if I could. Wanted to follow-up on Josh's question on inflation. You talked about the workforce, Tom in terms of watching movement there. Can you talk a little bit about if you're seeing any inflation in your capital `or cost some steel and or other materials, please? Thank you. Tom Palmer: Thanks Tanya. Good morning. So materials and energy, labor makes up 50%, materials and energy makes 30% to 40%. And again we leverage our global portfolio enter into long-term contracts and strategic relationships with suppliers, so that goes a long way to mitigating the impacts of near-term inflation where we've got rise and fall both into that contracts and stability. So it's a very important part of the Newmont story and the strength of our portfolio and how we look to run our business. We are seeing some pressure on steel generally around writing media that's watching carefully and some pressure on frac particularly with as you see the amount of concentrate that we move out of at Peñasquito. So we're watching those carefully. In terms of capital projects, we've already accounted for a lot of that in terms of the Tanami Expansion and the move to Australian steel so that's been taken up in previous updates to guide us. As move into Ahafo North, a lot of the work for the once we get the full funds approval for the next 12 to 18 months of efforts and the civil works before we start to bringing in steel. We're confident what the estimates that we've got, what we've look forward is for full funds. It's got to account for any escalation around steel and similarly as we start to button up Yanacocha Sulfides, both around reviews and bring that forward full funds. We're including in our estimates and contingencies, estimates for way still make moves. So we do anticipate there'll be some pressure on steel for the capital projects and making sure we're calculating in the budgets that we look forward for full funds approval. Tanya Jakusconek: Okay and nothing on cyanide at all. You're not seeing any inflation pressures there? Tom Palmer: No, Tanya. Tanya Jakusconek: Okay, great. Thanks for that and I guess just a continuation on the themes I keep asking, maybe just an update on any changes or royalties, taxation and any jurisdictions that you operate in, that you're hearing of in including the US? Tom Palmer: No, it's all - I mean again it's pretty picture of our strategies where we choose to have our operations that brings with it, a lot of stability around our investment agreements whether in place or royalty budget. So we're not seeing any pressure on that front across that jurisdictions. Tanya Jakusconek: Okay and then just last question before I hand it over to someone else's. Just wanted to make sure that the guidance that you provided with your Q4 release which was production was going to be 47%, 48% expected in the first half and 52%, 53% in the second half still is intact? Tom Palmer: It is, I'd say. I'd look more 47% in the first half and 53% in the second half and it's going to be dominated by Ahafo and Boddington reaching the greater buying and higher grades. As you move through the third quarter into the fourth and the second half. So I'd sort of factor in 47%, 53%. Tanya Jakusconek: And if I could squeeze just one more in, within treat about vaccinations 70% at Éléonore. Just maybe if you could share, any other mines that you have, where you have your vaccination for COVID is actually very well? I didn't hear anything about Africa, just wondered if you could share just a bit more color on that. Tom Palmer: Sure, Tanya. We're certainly encouraging the rollout in Ontario and I'm sure you're living 10 experience right now, so doing what we can to support the rollout for our Musselwhite port operations. Cripple Creek and Victor certainly see the rollout Colorado, we've been setting up clinics for our workforce and their families and continue to do that and provide access to vaccines and lots of education encouragement around the efficacy of these vaccines. Through Peru, Argentina and Mexico, Suriname, a much longer road to home. So we must maintain those protocols. Vaccines will come and we'll support. But we work on the expectations that's still many months of. Australia to get the vaccine together and get the vaccines rolled out. We look forward to that increasing overtime. So that one we can top those, you just stay forward for - that are impacting on mining operations and then open up international borders rollout allowing to come and go up again. And in Ghana, I think we're starting to see some rollout of vaccines. So I'm pleased already in Ghana. We've been looking to work with the Ghanaian Government for the rollout. It's going to be a long process. Tanya, I think before the world is fully vaccinated. So I think we're going to be living with mask for a long time to come in operations. Tanya Jakusconek: Okay, thank you so much. Operator: Your next question comes from Mike Jalonen of Bank of America. Please go ahead. Mike Jalonen: Tom, - workout Éléonore to get vaccinated and here in Canada. But just following along going's question with your three big copper, gold projects. I'm seeing a number of juniors with gold, big gold, copper projects, and got mark caps of billion plus. Just wondering how does Newmont service value in these projects? I don't know much of what the union Galore Creek or much in your share price, stop me if I'm wrong. Just wondering what steps you could take? Thanks. Tom Palmer: Thanks Mike and good morning. We're working in same way that we hit an exploration webcast early this year and we'll certainly look to do an ESG webcast on the back of our new sustainability report in the coming months. We're working on providing some more details and maybe doing so through another webcast. We can have a little bit more time to provide some detail and cover our most projects as well as some of the other projects that are sitting or going project pipeline. So we can link the level of understanding and the appreciation that we have all those projects and how we can sequence the need and why we're so confident about our business over the next several decades. I hope someday we turn 100. And we've got through our gain project pipeline and ability to see early around next century. So we're excited about it and I think there's an opportunity for us to provide the investment community with some more details in that. Mike Jalonen: Okay, thanks and Happy Birthday. Tom Palmer: I'll blow out a candle for you. Operator: Your next question comes from Anita Soni of CIBC. Please go ahead. Anita Soni: So first I want to commend you guys on your initiative to reduce risk around the teams I know that is actually a real risk. So what made me leave engineering about 18 years ago and sadly after I left someone died because of work back-to-back shift. I commend you on that. But related to that question, could you give us an idea of - if there's any kind of cost that we should expect associated with those kinds of initiatives? Tom Palmer: Thanks Anita and good morning. I mean we're seeing an incorporated our guidance around sustaining capital and some Tanami Expansion 2 it's in the development capital. But as part of those plans to build additional camp facilities. Yanacocha so far will have included in a effective probably similarly lead time items additional camp facilities so they'll be able to have, they have their own room and their own bed. So it's accommodated within millions dollars of year of sustaining capital and $600 million to $800 million in average development capital. It's not big money in overall scheme of things. It's about having the intent and the will to do something in this space. In terms of productivity improvements around staff, finish time and ensuring their fatigue breaks. The length of shifts, number of consecutives shift, the length of time some can work. In my experience you have that tie back in dividends many times over, by getting the right level of rest amongst your workforce so they're working productively when they're at work. So the things we're doing around roster start times and alike. Will improve their productivity overtime is my expectation rather than the cost of the business. Anita Soni: Second question a little bit more in the detail on Cerro Negro. The grades went down a little bit. I'm just wondering, how we can expect that to play out over the course of the year and what was the reason. I mean are you using stockpiles right now and then you'll return once you can get, I guess the mining rates up from direct access, is my guess. I just don't know - I don't have a color on that. Tom Palmer: Thanks, Anita. I'll get Rob to take that question. Rob Atkinson: Hi, Anita. Fairly straight forward that's because of COVID because of the absences, the production from our higher-grade stopes at Merian's north and Eureka were bore and limited because of the lack of development. So it's purely a sequencing due to lack of employees. But those are the areas that we're most focused and the workforce is back working and we're nearly through rates. So hopefully in coming months, we'll see that turn around. But it was just a timing issue due to lack of employees. Anita Soni: Okay and then lastly, more of a big picture question perhaps on for Nancy. Just looking at your dividend payout ratio in that where you know just currently sitting slightly below. But you do have a good on gold price. But you do have a good cash balance. Can you give us an idea if we're thinking about downside risk on gold price? How do you like sort of play with the cash balance that you have? I noticed that it's prior to the gold prices it was sort of sitting around $3 billion as the cash balance you wanted. Would you think about you mentioned of reducing that cash balance as needed? If gold price dips, first sustained period. Nancy Buese: Thanks for the question, Anita. Yes, we said in prior times that at a $1,200 gold price, we would like to keep around $2.3 billion to $3 billion cash balance. We're certainly carrying significantly more than that today. But I do think that's a testament to couple things, one is our ability to be very nimble with the dividend and we provided a very clear framework and a lot of transparency about the optionality between that 40% and 60%. So there's some great points about that and then the other piece. As we're still in a time of very much uncertainty around COVID and we also have a lot of development capital. So I think carrying considerably higher balances and not at today's gold price is a great strategy for us. But certainly a lot of optionality and flexibility around those balances, which is what we've consistently stated. Tom Palmer: And Anita, I need to build on that. We look with our board back over a long period of time at gold prices and the cash would actually generate it. And that factored into a decision to stay up and calibrated I think $100 mark and on return 40% of that cash. So at the stability and sustainability of our dividend is very robust. So we didn't make that decision to go to the $1,800 mark lightly and our expectation would be, when we look forward in portfolio and our performance that we can sustain those levels for some time. Anita Soni: And just lastly, I know it does and your disclosure already include your free cash flow projections include Ahafo North and Yanacocha Sulfides and just wanted to confirm that any lumpiness in those spends. But also being included within that $1,800 40% to 60% and those projects. Tom Palmer: Absolutely. Anita Soni: Thanks. Tom Palmer: . Anita Soni: Okay, thank you very much. Tom Palmer: Thanks Anita and I think that's the end of the questions and we can certainly queue on conscious. We've gone half top of the hour. So thank you all for your time. And our number if you are on Toronto at the moment and on state. Stay safe and well and we look forward to seeing and speaking to you soon. Thanks everyone. Operator: The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.
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Related Analysis

Newmont Corporation's Upcoming Earnings and Financial Challenges

Newmont Corporation, trading as NYSE:NEM, is a leading gold mining company with operations worldwide. It is known for its extensive portfolio of gold and copper assets. As a major player in the mining industry, Newmont competes with other giants like Barrick Gold and AngloGold Ashanti. The company is set to release its quarterly earnings on February 20, 2025, with analysts estimating an earnings per share (EPS) of $1.11 and projected revenue of $5.3 billion.

Despite these projections, Newmont faces challenges, including a class action lawsuit alleging securities fraud. The lawsuit, filed by Levi & Korsinsky, LLP, and supported by Rosen Law Firm, targets losses incurred by shareholders between February 22, 2024, and October 23, 2024. The complaint points to disappointing EBITDA results, decreased production, and increased operating costs, which were disclosed on October 23, 2024.

The company has a price-to-sales ratio is 3.21, suggesting investors are paying $3.21 for every dollar of sales. The enterprise value to sales ratio is 3.57, showing the company's total valuation relative to its sales. The company maintains a moderate debt-to-equity ratio of 0.31, indicating a balanced approach to leveraging debt. Additionally, Newmont's current ratio of 1.96 suggests a strong ability to cover short-term liabilities with short-term assets, providing some financial stability amidst ongoing challenges.

Newmont Corporation's Upcoming Earnings and Financial Challenges

Newmont Corporation, trading as NYSE:NEM, is a leading gold mining company with operations worldwide. It is known for its extensive portfolio of gold and copper assets. As a major player in the mining industry, Newmont competes with other giants like Barrick Gold and AngloGold Ashanti. The company is set to release its quarterly earnings on February 20, 2025, with analysts estimating an earnings per share (EPS) of $1.11 and projected revenue of $5.3 billion.

Despite these projections, Newmont faces challenges, including a class action lawsuit alleging securities fraud. The lawsuit, filed by Levi & Korsinsky, LLP, and supported by Rosen Law Firm, targets losses incurred by shareholders between February 22, 2024, and October 23, 2024. The complaint points to disappointing EBITDA results, decreased production, and increased operating costs, which were disclosed on October 23, 2024.

The company has a price-to-sales ratio is 3.21, suggesting investors are paying $3.21 for every dollar of sales. The enterprise value to sales ratio is 3.57, showing the company's total valuation relative to its sales. The company maintains a moderate debt-to-equity ratio of 0.31, indicating a balanced approach to leveraging debt. Additionally, Newmont's current ratio of 1.96 suggests a strong ability to cover short-term liabilities with short-term assets, providing some financial stability amidst ongoing challenges.

Newmont Corporation's (NYSE:NEM) Impressive Quarter Earnings

  • Earnings Per Share (EPS) of $0.72, surpassing the anticipated $0.617, indicating strong operational efficiency.
  • Revenue of $4.4 billion, exceeding forecasts and showcasing significant growth from the previous year.
  • Financial ratios such as the debt-to-equity (D/E) ratio of 0.31 and current ratio of 2.15 highlight a solid financial structure and short-term health.

Newmont Corporation (NYSE:NEM), a leading entity in the gold and copper mining industry, recently disclosed its earnings for the quarter, revealing figures that not only highlight its financial health but also its ability to exceed market expectations. On July 24, 2024, NEM reported an earnings per share (EPS) of $0.72, surpassing the anticipated $0.617, and a revenue of $4.4 billion, which exceeded the forecasted $4.13 billion. This performance underscores the company's robust operational efficiency and market position, especially when considering the competitive landscape of the mining sector.

The reported EPS of $0.72, which outdid the Zacks Consensus Estimate of $0.53 per share, represents a significant leap from the $0.33 per share earned a year ago. This 35.85% earnings surprise continues a trend for Newmont, following a previous quarter where earnings of $0.55 per share beat forecasts by 57.14%. Such consistent outperformance in earnings highlights Newmont's strategic planning and execution capabilities, positioning it favorably among investors and stakeholders.

Revenue growth is another area where NEM shines, with the reported $4.4 billion for the quarter ending June 2024 not only surpassing the Zacks Consensus Estimate by 26.24% but also marking a substantial increase from the $2.68 billion recorded in the same period last year. This growth trajectory is indicative of Newmont's expanding operations and its ability to capitalize on market opportunities, further solidifying its standing in the mining sector.

Financial ratios provide deeper insights into Newmont's valuation and financial health. Despite a negative price-to-earnings (P/E) ratio of approximately -20.62, suggesting market skepticism, the company's price-to-sales (P/S) ratio of about 4.20 and an enterprise value to sales (EV/Sales) ratio of roughly 4.74 reflect a valuation that investors are willing to pay for its sales. Moreover, the enterprise value to operating cash flow (EV/OCF) ratio of around 20.32 offers a perspective on the company's valuation concerning its operating cash flow, indicating a positive outlook from the cash flow perspective.

The debt-to-equity (D/E) ratio of 0.31 portrays a moderate level of debt, suggesting a balanced financial structure, while the current ratio of about 2.15 indicates strong short-term financial health. These metrics, combined with Newmont's impressive earnings and revenue performance, paint a picture of a company that is not only navigating the complexities of the mining industry successfully but is also laying down a solid foundation for sustained growth and profitability.

Newmont Corporation's (NYSE:NEM) Impressive Quarter Earnings

  • Earnings Per Share (EPS) of $0.72, surpassing the anticipated $0.617, indicating strong operational efficiency.
  • Revenue of $4.4 billion, exceeding forecasts and showcasing significant growth from the previous year.
  • Financial ratios such as the debt-to-equity (D/E) ratio of 0.31 and current ratio of 2.15 highlight a solid financial structure and short-term health.

Newmont Corporation (NYSE:NEM), a leading entity in the gold and copper mining industry, recently disclosed its earnings for the quarter, revealing figures that not only highlight its financial health but also its ability to exceed market expectations. On July 24, 2024, NEM reported an earnings per share (EPS) of $0.72, surpassing the anticipated $0.617, and a revenue of $4.4 billion, which exceeded the forecasted $4.13 billion. This performance underscores the company's robust operational efficiency and market position, especially when considering the competitive landscape of the mining sector.

The reported EPS of $0.72, which outdid the Zacks Consensus Estimate of $0.53 per share, represents a significant leap from the $0.33 per share earned a year ago. This 35.85% earnings surprise continues a trend for Newmont, following a previous quarter where earnings of $0.55 per share beat forecasts by 57.14%. Such consistent outperformance in earnings highlights Newmont's strategic planning and execution capabilities, positioning it favorably among investors and stakeholders.

Revenue growth is another area where NEM shines, with the reported $4.4 billion for the quarter ending June 2024 not only surpassing the Zacks Consensus Estimate by 26.24% but also marking a substantial increase from the $2.68 billion recorded in the same period last year. This growth trajectory is indicative of Newmont's expanding operations and its ability to capitalize on market opportunities, further solidifying its standing in the mining sector.

Financial ratios provide deeper insights into Newmont's valuation and financial health. Despite a negative price-to-earnings (P/E) ratio of approximately -20.62, suggesting market skepticism, the company's price-to-sales (P/S) ratio of about 4.20 and an enterprise value to sales (EV/Sales) ratio of roughly 4.74 reflect a valuation that investors are willing to pay for its sales. Moreover, the enterprise value to operating cash flow (EV/OCF) ratio of around 20.32 offers a perspective on the company's valuation concerning its operating cash flow, indicating a positive outlook from the cash flow perspective.

The debt-to-equity (D/E) ratio of 0.31 portrays a moderate level of debt, suggesting a balanced financial structure, while the current ratio of about 2.15 indicates strong short-term financial health. These metrics, combined with Newmont's impressive earnings and revenue performance, paint a picture of a company that is not only navigating the complexities of the mining industry successfully but is also laying down a solid foundation for sustained growth and profitability.

Newmont Corporation Shares Plunge 13% Following Q2 Miss

Newmont Corporation (NYSE:NEM) shares plummeted around 13% on Monday following the company’s reported Q2 results, with EPS of $0.46 coming in worse than the Street estimate of $0.68, impacted by higher operating costs, provisional pricing headwinds, and Penasquito profit sharing expenses. Revenue was $3.06 billion, compared to the Street estimate of $3.15 billion.

The company's free cash flow outlook has materially weakened over 2022-2024 as compared to prior expectations, and financial flexibility is now viewed as below average.

The analysts at RBC Capital believe it is reasonable to expect the company’s dividend policy to change later in 2022 to allow for greater latitude at current/lower gold prices. The analysts lowered their price target to $60 from $77, while reiterating their Sector Perform rating.