Newmont Corporation

TSX: NEM

Market Cap$37,679m

Last Close $47.47

Newmont Corporation is the world’s leading gold company with a world-class portfolio of assets in the Americas, Australia and Africa. It is the only gold producer in the S&P 500 Index and is widely recognised for its ESG practices and as a leader in value creation, safety and mine execution.

Investment summary

Newmont is the world’s largest gold mining company with a medium-term production target of 6.2–6.8Moz Au plus 1.4–1.6Moz AuE in co- and by-products from attributable reserves of 95.5Moz Au and reserves and resources of 205.8Moz (excluding Agua Rica) in top tier jurisdictions. It aims to distinguish itself via its high ESG standards (eg its climate change report in May), its management strength and experience, its operating model, its capital discipline, its track record of returns (eg a market leading dividend), its methodical approach to project development and its conservatism (eg reserves calculated at US$1,200/oz).

Y/E Dec	Revenue (US$m)	EBITDA (US$m)	PBT (US$m)	EPS (fd) (c)	P/E (x)	P/CF (x)
2020A	11497.0	5537.0	2929.0	265.5	17.9	13.7
2021A	12222.0	5963.0	3366.0	296.4	16.0	162.8
2022E	11793.0	4588.0	2066.0	181.9	26.1	26.1
2023E	11959.0	5318.0	2665.0	208.6	22.8	22.1

Industry outlook

Newmont has a number of sources of organic growth plus three major new projects (Tanami Expansion 2, Ahafo North and Yanacocha Sulphides), albeit a full funds decision on the latter is delayed until H224. Following this, we have updated our FY22 valuation to US$64.30/share (assuming long-term, real cash-flow per share growth of 2% pa, in line with the gold price).

Last updated on 30/11/2022