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Newmont soars amid high gold prices

Newmont

Newmont produced 1.7 million attributable gold ounces and 489,000 gold equivalent ounces from copper, silver, lead and zinc during the March 2024 quarter.

About 1.4 million of the gold ounces (oz) during the period were driven by Newmont’s Tier 1 portfolio of gold assets.

Newmont defines a Tier 1 asset as an operation with “(more than) 500,000 gold equivalent ounces per year consolidated, (an) average all-in sustaining cost per ounce in the lower half of the industry cost curve, and a mine life (greater than) 10 years in countries classified in the A and B rating ranges of Moody’s, S&P and Fitch”.

The company’s total gold all-in sustaining cost equalled $US1349/oz, and gold from Newmont’s Tier 1 portfolio totalled $US1378/oz.

The US gold giant delivered $US288 million in dividends to shareholders, $US776 million in cash from operating activities, and $US850 million in capital reinvestment to sustain current operations and advance high-return projects.

Newmont also generated $US217 million in free cash flow, $US179 in net income and $US1.7 billion in adjusted earnings before interest, taxes, depreciation, and amortisation.

“Newmont delivered a strong first quarter operational performance, producing 2.2 million gold equivalent ounces and generating over $US1.4 billion in cash from operations before working capital changes,” Newmont president and chief executive officer (CEO) Tom Palmer said.

“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.”

Newmont also announced that Lundin Gold, a Canadian gold company, has agreed to buyout 100 per cent of the balance of the stream credit facility agreement and offtake agreement for the Fruta del Norte gold mine in Ecuador, South America for $US330 million.

Newmont holds a 31.9 per cent equity interest in Lundin Gold. Fruta del Norte as part of Newmont’s non-managed Tier 1 portfolio.

Under the agreement, Lundin Gold will pay $US180 million on the expected closing date of June 28 2024 and the remaining $US150 million by September 30 2024.

“I’m very pleased to announce the buyout of the stream facility and offtake,” Lundin Gold president and CEO Ron Hochstein said. “With this milestone complete, Lundin Gold will have repaid in full all of its project finance debt only four years after achieving commercial production at Fruta del Norte.

“Upon closing, the company will be debt free and have increased exposure to rising gold prices, resulting in increased amounts of free cash flow to support capital allocation initiatives, including further growth and shareholder returns.”

The agreement coincides with Newmont’s plans to divest its non Tier 1 mines and projects.

“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. 

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