Newmont realized US$1.1 billion cash from continuing operations and US$735 million of free cash flow in Q3 of 2021.
The Company produced 1.45 million attributable ounces of gold, representing a 6 per cent decrease from the previous year’s quarter. This was primarily due to lower throughput at Nevada Gold Mines emanating from a mechanical failure in May 2021.
Accordingly, this is further attributed to the partial shutdown of the Goldstrike mill at Carlin until complete repairs in September 2021, lower leach production, mill recovery and ore grade milled at the various gold mines.
Consequently, these decreases were partially offset by higher throughput at Cerro Negro due to reduced operations in the previous year’s quarter in response to the Covid-19 pandemic.
Tom Palmer, the President and Chief Executive Officer of Newmont, commented:
“Newmont delivered on a challenging third quarter performance with US$1.3 billion in adjusted EBITDA and $735 million in free cash flow, building momentum for a strong fourth quarter.
“Supported by our clear strategic focus and proven operating model, we continue to apply our disciplined approach to capital allocation. A year ago, we announced our industry-leading dividend framework, establishing a clear pathway for stable and predictable returns.
“Over the last four quarters, Newmont has steadily reinvested in our operations while returning more than US$2 billion dollars to shareholders through dividends and share buybacks, demonstrating our confidence in the long-term value of our business and our ability to maintain financial flexibility.”Tom Palmer, CEO, Newmont
Costs Associated with Newmont Mine Operations
Furthermore, gold costs applicable to sales (CAS) increased by 4 per cent to US$1.175 million from the previous year’s quarter. Gold CAS per ounce also increased 10 per cent to US$830 per ounce from the previous year’s quarter.
Meanwhile, the circumstances leading to the decline were primarily due to lower gold ounces sold, higher diesel costs, an unfavourable Australian foreign exchange rate and higher royalty payments at Akyem and Nevada Gold Mines.
Accordingly, these increases were partially offset by a build of inventory. Additionally, gold all-in-sustaining cost (AISC), increased 20 percent of US$1,120 per ounce from the previous year’s quarter. This was primarily as a result of the higher CAS per ounce and higher sustaining capital spend. These increases were partially offset by lower treatment and refining costs.
Attributable gold equivalent ounce (GEO) production from other metals increased 15 per cent to 315 thousand ounces primarily due to higher throughput and recoveries at Peñasquito. Costs applicable to sales from other metals totaled US$192 million for the quarter. Costs applicable to sales per gold equivalent ounce also increased 15 per cent to US$638 per ounce from the previous year’s quarter.
The circumstances were primarily due to higher allocation of costs to other metals and higher concentrate selling expenses at Peñasquito and Boddington. These increases were partially offset by higher gold equivalent ounces sold.
Losses Borne by Newmont in Q3 2021
Net loss from continuing operations owing to Newmont stockholders was US$8 million or US$0.01 per diluted share, a decrease of US$619 million from that of the previous year. Also, adjusted net income over the period was US$483 million or US$0.60 per diluted share, compared to US$697 million or US$0.86 per diluted share in the previous year’s quarter.
Similarly, the company’s revenues decreased 9 per cent from the previous year’s quarter to US$2,895 million primarily due to lower average realized gold prices and lower gold sales volumes.
Overall, Newmont has had a very challenging third quarter, however, the fact that it was able to weather the storm, presupposes that it is likely to bounce back and finish the fourth quarter with stronger operational and financial results.