Why Gold Miner Newmont Shares Are Falling Today

Newmont Corp NEM shares are trading lower after the company reported fourth-quarter FY23 results.

Revenue increased 24% Y/Y to $3.957 billion, above the consensus of $3.45 billion. Revenue rose Y/Y on higher sales volumes and higher realized gold prices.

Gold production rose 7% Y/Y to 1.741 million ounces, led by the addition of the Newcrest operations in November 2023, partially offset by lower production at Peñasquito, Boddington, and Akyem.

Gold Costs Applicable to Sales (CAS) rose 16% to $1,086 per ounce, and gold All-In Sustaining Costs (AISC) rose 22% Y/Y to $1,485 per ounce. The average realized gold price rose 14% Y/Y to $2,004 per ounce.

Adjusted EBITDA rose to $1.384 billion from $1.161 billion a year ago. Adjusted EPS of $0.50, beating the consensus of $0.46.

Capital expenditure increased 42% Y/Y to $920 million, and operating cash flow from continuing operations fell 39% Y/Y to $616 million.

As of December 31, 2023, Newmont had cash and cash equivalents of $3.1 billion.

Capital Allocation Strategy: The company plans to focus on Tier 1 assets and emerging Tier 1 assets portfolio and plans to divest six non-core assets, including Éléonore, Musselwhite, Porcupine, CC&V, Akyem and Telfer, as well as two non-core projects including Havieron and Coffee.

Newmont identified an additional $500 million of cost and productivity improvements over and above initial synergy commitments.

Dividend: The company declared a dividend per share of $0.25 for the fourth quarter of 2023, payable on March 28, 2024, to shareholders of record as of March 5, 2024.

FY24 Outlook: The company expects gold production of around 6.9 million ounces and Gold AISC of $1,400 per ounce.

Newmont expects Tanami Expansion 2 development capital spending of $1.7 billion-$1.8 billion, with commercial production expected in the second half of 2027.

The company remains on track to deliver an expected $500 million in synergies related to the Newcrest transaction by the end of 2025.

Tier 1 Portfolio’s Long-Term Outlook: Newmont targets gold production of 6.7 million ounces and gold equivalent ounce (GEO) production of 8.3 million by 2028.

Also, the company projects an average annual sustaining capital spending of $1.5 billion and an average annual development capital spending of $1.3 billion over the next five years.

Newmont projects a near-term debt reduction of $1 billion to about $8 billion through free cash flow and divestment proceeds from the sale of non-core assets.

Also Read: Newmont Fortifies Management On Heels Of $17B Deal, Appoints New Chief Legal Officer

Price Action: NEM shares are down 7.12% at $31.05 on the last check Thursday.

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