Q3 2024 Newmont Corporation Earnings Call

In This Article:

Participants

Thomas Palmer; President, Chief Executive Officer, Director; Newmont Corporation

Natascha Viljoen; Chief Operating Officer, Executive Vice President; Newmont Corporation

Karyn Ovelmen; Chief Financial Officer, Executive Vice President; Newmont Corporation

Daniel Major; Analyst; UBS Securities LLC

Josh Wolfson; Analyst; RBC Capital Markets (Canada)

Matthew Murphy; Analyst; Jefferies LLC

Anita Soni; Analyst; CIBC World Markets Corp.

Mike Parkin; Analyst; National Bank Financial Inc.

Lawson Winder; Analyst; BofA Global Research (US)

Alex Hacking; Analyst; Citi Investment Research (US)

Tanya Jakusconek; Analyst; Scotia Capital Inc.

Presentation

Operator

Good morning, and welcome to Newmont's Third Quarter 2024 Earnings Call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Tom Palmer, President and Chief Executive Officer. Please go ahead.

Thomas Palmer

Thank you, operator. Good morning, everyone, and thank you for joining our call. Today, I'm joined by my executive leadership team, including Natascha Viljoen and Karyn Ovelmen, and will all be available to answer your questions at the end of the call. Please note our cautionary statement and refer to our SEC filings, which can be found on our website.
Before we discuss our third quarter performance, I would like to take a moment to remember (inaudible), who tragically lost his life at our Eleonore operation late last month. We recognize that this is our fifth fatality in less than a year. And we are working diligently to strengthen and improve our safety systems, along with the key safety tools that we use in the field. We are fully committed to understanding the factors that contributed to this tragedy.
And are taking decisive action to improve our safety culture with a clear focus on effectively controlling all of the risks that could lead to a fatality. We will also continue to transparently share the lessons we learn from the investigation with our peers in the industry to help improve the safety performance of our sector. At Newmont, we know that a strong safety culture is fundamental to sustainably delivering on our commitments, and it is our accountability to ensure that everyone working at Newmont return home safely after each and every shift.
Turning now to a summary of our third quarter. I'm honored to have recently been appointed as the next Chair of the International Council of Mining and Metals, or by CMM and look forward to playing an even greater goal in advancing sustainability and responsible mining practices, both at Newmont and across our industry. During my term as Chair, one of my key priorities will be building support for the consolidated binding standard initiative. An effort we have strongly supported and actively engaged in over the last few months. These consolidated standards will be essential for strengthening the industry's reputation and providing stakeholders with confidence that the commodities we produce mind responsibly.
Last week, we announced that we have partnered with MKS PAM to launch our first bind to market trace book gold bar for sale in the United States. Taking Newmont's gold directly attractable to consumers and demonstrating our commitment through transparent sourcing. Shifting to our world-class portfolio and emerging Tier 1 operations and districts.
In the third quarter, we produced nearly 1.7 million ounces of gold and 430,000 gold equivalent ounces from copper, silver, lead and zinc. And notably, this included 37,000 tonnes of copper. We generated $1.6 billion of cash flow from operations and $760 million in free cash flow. Our noncore divestment program has advanced meaningfully since our last earnings call with the two recently announced transactions expected to deliver up to $1.5 billion in combined gross proceeds. The first announcement was a definitive agreement to divest the Telfer mine and our 70% interest of the Havieron project in Western Australia for total proceeds of up to $475 million. We continue to progress the closing conditions and expect to complete the transaction this quarter.
The second announcement was a definitive agreement to sell the Akyem mine in Ghana for up to $1 billion in cash consideration. And we also expect to close this transaction towards the end of the year. With this solid progress, we remain firmly on track to realize our commitment to generate at least $2 billion in gross proceeds from the divestment of our noncore assets. It is also important to note that this is in addition to the $527 million in cash proceeds that we have already received this year for the London gold to [high] our transactions. Our divestment progress and strong free cash flow generation have positioned us to be able to continue reducing debt and returning capital to shareholders.
Since our last earnings call, we have retired $233 million in debt and returned $786 million to our shareholders through share repurchases and quarterly dividends. We also approved an additional $2 billion share repurchase program, bringing our total authorization to $3 billion. In addition, we continue to safely advance the three projects we have in execution. The second expansion at Tanami, our new mine Ahafo North and Panel Caves at Cadia.
And finally, turning to synergies. When we announced our decision to acquire new Breast, we committed to delivering $500 million in synergies from three areas: G&A, supply chain and our full potential program. And as of today, we have achieved that $500 million synergy run rate. Starting with G&A, a $100 million synergy run rate was achieved through labor rationalization. And reductions in both insurance costs and contractor spend. Moving to supply chain. Our team has been leveraging the scale of our combined company to achieve improved commercial outcomes that have already brought our synergy run rate from this area to $200 million.
And finally, we have begun to realize significant value from our full potential program. and are in the delivery stage of our initiatives at Cadia, Red Chris and Lihir. From this work, we have successfully surpassed a $200 million synergy run rate. with potential upside to be realized in future years. The majority of the value realized so far has been attributed to Cadia due to the work we've been doing to more efficiently move stockpile material and to optimize the output from our high-pressure grinding well system in the mill, an initiative that I touched on last quarter, and the remaining value has come from Red Chris and Lihir.
At Red Chris, we're improving gold and copper recoveries from the optimization of both the grinding and flotation circles, while also increasing throughput by delivering a more consistent ore feed to the mill. And as Lihir, we are focused on improving efficiency by debottlenecking the materials handling and crushing circuits as we mentioned on our first quarter earnings call. With our synergy commitment now met, and our divestment program well advanced, we are now focused on the sustainable value that we will deliver from our go-forward portfolio of 11 managed large long-life operations.
So with that, I'll now turn it over to Natascha for an operational update and then to Karen to take us through our financial performance for the quarter. Over to you, to Natascha.