Newmont Corporation has announced third quarter 2023 results and declared a third quarter dividend of $0.40 per share as the company nears closing Newcrest deal.
The company delivered a stable third quarter performance by producing 1.3 million attributable gold ounces and 58 thousand co-product gold equivalent ounces (GEOs) from copper in building momentum for improved production in the fourth quarter.
It reported gold Costs Applicable to Sales (CAS) per ounce of $1,019 and gold All-In Sustaining Costs (AISC) per ounce of $1,426 and recorded an improvement driven by higher sales volumes compared to the prior quarter.
The company also revised the 2023 outlook for the standalone Newmont portfolio to 5.3 million ounces of attributable production, CAS per ounce of $1,000 and AISC per ounce of $1,400.
It incorporated the impacts of the strike at Peñasquito, and lower production volumes from non-managed joint ventures (Nevada Gold Mines and Pueblo Viejo) and Ahafo.
Direct operating costs remained largely consistent with the second quarter as inflation pressures continued to stabilize, with improvements to pricing on commodities, as well lower direct costs as a result of the suspension of operations at Peñasquito. AISC was lower due to lower sustaining capital during the third quarter compared to the second quarter.
Peñasquito incurred $78 million of operating costs and $53 million of depreciation and amortization while operations were suspended. These costs have not been adjusted from Newmont’s Non-GAAP financial metrics for the third quarter.
Cash Flow from Continuing Operations
Cash flow from continuing operations was $1,001 million, which was favorable compared to the second quarter, primarily driven by favorable working capital changes, including the timing of accounts payable, draw-downs of lower cost inventory and lower cash tax payments.
During the quarter, Newmont reinvested $604 million in capital spend, including $264 million in development capital spend to continue to progress near-term projects and $340 million in sustaining capital to progress site improvement projects.
It also reported a Net Income of $163 million, with Adjusted Net Income (ANI) of $0.36 per diluted share and Adjusted EBITDA of $933 million; driven by higher production volumes, strong gold prices and stable costs.
Newmont ended the quarter with $3.2 billion of consolidated cash and $6.2 billion of liquidity while reporting net debt to adjusted EBITDA ratio of 0.7x.
Net income from continuing operations attributable to Newmont stockholders was $157 million or $0.20 per diluted share, a decrease of $61 million from the prior year quarter primarily due to lower sales volumes as a result of the Peñasquito labor strike, as well as higher reclamation and remediation charges. These decreases were partially offset by higher average realized prices for gold and copper and lower CAS.
Newmont’s Board of Directors declared a dividend of $0.40 per share of common stock for the third quarter of 2023; payable on December 22, 2023 to holders of record at the close of business on November 30, 2023.
The annualised dividend payout range for 2023 is from $1.40 to $1.80 per share; subject to quarterly approval by Board of Directors.
Based on a sustainable base dividend of $1.00 per share payable at base reserves price and an incremental dividend payout of $0.60 per share; the third quarter dividend payout calibrated at the mid-point of the $1,700 per ounce annualised payout range.
Newmont President and Chief Executive Officer Tom Palmer, while commenting on the result, said, “Newmont generated $1.0 billion of cash from continuing operations during the third quarter and continued to execute on our long-term strategic plan”.
“As we look ahead to the closing of the Newcrest transaction, we are excited about the long-term value it will bring to both sets of stakeholders and our combined workforce. This transaction strengthens our position as the world’s leading gold company and sets the standard in safe, profitable and responsible mining. We look forward to closing the transaction on November 6th and providing our first integration update on the combined business in the first quarter of 2024.”
Tom Palmer
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