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The full Newmonty

Newmont Corporation 26 February 2021 Update
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Newmont Corporation

The full Newmonty

Q420 results and
exploration update

Metals & mining

26 February 2021

Price

US$56.61

Market cap

US$45,401m

Net debt (US$m) end-December 2020

1,162

Shares in issue

804.0m

Free float

99.7%

Code

NEM, NGT

Primary exchange

NYSE (NEM)

Secondary exchange

TSX (NGT)

Share price performance

%

1m

3m

12m

Abs

(9.0)

(2.9)

14.2

Rel (local)

(8.3)

(7.9)

(6.7)

52-week high/low

US$70.4

US$39.5

Business description

Founded in 1916, Newmont Corporation is the world’s leading gold company with a world-class portfolio of assets in North and South America, 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.

Next events

Ahafo North decision

H121

Yanacocha Sulphides decision

H221

Q121 results

April 2021

Q221 results

July 2021

Analyst

Charles Gibson

+44 (0)20 3077 5724

Newmont Corporation is a research client of Edison Investment Research Limited

Fourth quarter production and costs were closely in line with our expectations, after Newmont’s mines in Africa made up for some continuing low-level coronavirus-induced disruptions at its operations in North and South America, in particular. Notwithstanding these disruptions, earnings for the full year outperformed our expectations by 6.6%, net debt declined by US$687m since end-Q3 and a generous quarterly dividend distribution of US$0.55/share was announced.

Year end

Revenue (US$m)

PBT
(US$m)

EPS*
(US$)

DPS
(US$)

P/E
(x)

Yield
(%)

12/19

9,740

3,693

1.32

**1.44

42.6

2.5

12/20

11,497

3,143

2.66

1.45

21.3

2.6

12/21e

12,466

3,449

2.68

2.20

21.1

3.9

12/22e

12,288

3,691

2.94

2.20

19.3

3.9

Note: *EPS are normalised, excluding amortisation of acquired intangibles and exceptional items. **Includes US$0.88/share special dividend.

Exploration keeping pace despite coronavirus

In addition to the release of its financial results, on 10 February, Newmont announced its annual resource and reserve estimation. Among other things, this showed: 1) reserves of 94.2Moz plus measured and indicated resources of 69.6Moz and inferred resources of 31.6Moz (total 195.4Moz), 2) Newmont adding c 5Moz of reserves via exploration compared to mining depletion of 7.5Moz, 3) 3.4Moz of additions in the measured and indicated categories of resources, partially offsetting 7.3Moz of conversions (both into reserves and out of the mineral inventory) and 4) 3.5Moz of additions in the inferred resource category via exploration (before conversions and revisions). In addition, while headline gold reserves & resources declined by a modest 1.9%, we estimate that they expanded by 5.3% in gold equivalent ounce terms (see Exhibit 4).

Low net debt and healthy cashflows provide flexibility

Newmont’s net debt of US$1.2bn at end-FY20 equates to gearing (net debt/equity) of just 5.1% and a leverage (net debt/[net debt+equity]) of 4.8%. Over the next two years, we estimate that it will generate on average almost US$5bn in annualised cash from operations (c 97% of which is attributable to shareholders), of which it will expend c US$2.2bn pa in capex and distribute a further c US$1.8bn pa in dividends, leaving c US$0.8bn pa to either pay down net debt or buy back shares.

Valuation: US$76.34/share

Based on nine measures across three methodologies, we have left our blended average valuation of Newmont unchanged at US$76.34/share (see our note The sustainable leader, published on 9 February). Stated alternatively, we calculate that Newmont’s current share price of US$56.61/share discounts a real cost of equity of 7.8%, which is approximately double that implied by prevailing market conditions. This puts Newmont on a premium rating relative to its peers, but at a discount relative to its own historical valuation measures, which, on average, imply a share price closer US$100/share.

Q420 and FY20 results

A summary of Newmont’s Q420 and FY20 results relative to both Edison’s prior forecast and also Q320 is provided in Exhibit 2. In general, production from mines in North America and South America were slightly below our forecasts – mostly as a result of continued low-level coronavirus-induced disruptions – while production in Africa was ahead of our expectations. Notable exceptions to the general trend of lower production in North and South America were Penasquito and Merian. Performance in Australia was mixed, with Boddington outperforming our expectations and Tanami fractionally underperforming them. Production and sales at Nevada Gold Mines and Pueblo Viejo were already known from Barrick’s preliminary full-year and fourth quarter production results announcement of 14 January 2021. Overall, however, both production and costs applicable to sales were closely in line with our expectations, as shown below:

Exhibit 1: Newmont Q4 operational results, by region cf prior Edison forecast (excluding co- and by-products)

North America

South America

Australia

Africa

Nevada

Total

Edison

Actual

Edison

Actual

Edison

Actual

Edison

Actual

Edison

Actual

Edison

Actual

Attributable production (koz)*

340

306

1,644

1,630

Pueblo Viejo production (koz)

106

106

106

106

Attributable production (koz)

444

435

234

200

299

304

220

243

342

342

1,538

1,524

Costs applicable to sales (US$/oz)

744

731

767

776

678

725

705

729

778

739

738

739

Source: Edison Investment Research, Newmont. Note: *Includes attributable production from Pueblo Viejo (equity accounted).

From a financial perspective, both sales and costs applicable to sales were within 2% of our prior forecasts. Beyond that, the main variances in Newmont’s actual reported numbers relative to our previously forecast ones arose in reclamation, which experienced a sharp increase that was out of the range of normal quarterly outcomes, and the effective tax rate, which was below that most recently guided by management for the full year (38–42%) for both Q420 and FY20. In this case the increase in the reclamation and remediation charge was attributed to adjustments primarily related to increased costs at Yanacocha. In the event however, the lower tax charge almost exactly offset the higher reclamation and remediation charge such that profit after tax was also within 2% of our prior forecast. Beyond that, the only other major difference was in the minority charge, which was negative (ie minority partners sharing in a loss, rather than a profit), which resulted in net income attributable to Newmont stockholders that was 6.6% above our prior forecast for the full year.

The other major feature of the results was the dividend, set by the board at US$0.55/share for Q4, which is consistent with the company’s dividend policy at a gold price of US$1,800/oz. Readers are reminded that, at the time of its Q320 results in October, Newmont unveiled a new dividend framework whereby it formally re-based its dividend to a ‘base’ pay-out of US$1.00/share (or US$0.25/share per quarter), but also stated explicitly that it would return 40–60% of incremental attributable free cash flow to shareholders that it generated above a gold price of US$1,200/oz (cf a gold price at the time of writing of US$1,811/oz). Under the new framework, Newmont then seeks to adjust the ‘base’ pay-out according to the gold price in increments of US$300/oz, equating to incremental increases in the dividend of US$0.60/share per year (or US$0.15/share per quarter). Hence a sustainable gold price above US$1,800/oz should result in a dividend of US$0.55/share per quarter (being 0.25+0.15+0.15=0.55) – ie the quarterly dividend that it paid in Q420. Nevertheless, within this context, it is worth noting that, should Newmont decide to pay out nearer 60% of incremental attributable free cash flow to shareholders that it generates above a US$1,200/oz gold price, rather than 40%, then there is still scope for the quarterly dividend to remain at the higher level. In consequence, we have raised our dividend forecast for FY21 on the basis that the gold price being momentarily below US$1,800/oz is unlikely to result in any readjustment downwards in the quarterly distribution cf the Q420 level.

Quarterly forecasting of mining company profits is almost always a hostage to fortune. Nevertheless, with that caveat, Edison also offers its best estimate (given current information) of Newmont’s likely Q121e results in Exhibit 2, below:

Exhibit 2: Newmont quarterly income statement, Q120–Q121e cf Edison prior forecast

US$m (unless otherwise indicated)

Q120

Q220

Q320

Q420e

Q420a

Q420a/Q320a

Q420a/Q420e

FY20e

FY20a

FY20a/FY20e

Q121e

Sales

2,581

2,365

3,170

3,376

3,381

6.7

0.1

11,492

11,497

0.0

3,002

 

 

Costs and expenses

 

 

– Costs applicable to sales

1,332

1,058

1,269

1,373

1,355

6.8

-1.3

5,032

5,014

-0.4

1,314

– Depreciation and amortisation

565

528

592

589

615

3.9

4.4

2,274

2,300

1.1

591

– Reclamation and remediation

38

40

38

54

250

557.9

363.0

170

366

115.3

54

– Exploration

44

26

48

74

69

43.8

-6.8

192

187

-2.6

63

– Advanced projects, research and development

27

26

39

49

30

-23.1

-38.8

141

122

-13.5

35

– General and administrative

65

72

68

60

64

-5.9

6.7

265

269

1.5

65

– Impairment of long-lived assets

0

5

24

0

20

N/A

N/A

0

49

N/A

0

– Care and maintenance

20

125

26

0

7

-73.1

N/A

171

178

4.1

0

– Other expense, net

33

54

68

71

51

-44.6

-28.2

255

206

-19.2

69

Total

2,124

1,934

2,172

2,269

2,461

13.3

8.5

8,499

8,691

2.3

2,190

 

 

Other income/(expenses)

 

 

– Gain on formation of Nevada Gold Mines

0

0

0

0

0

N/A

N/A

0

0

N/A

– Gain on asset and investment sales, net

593

(1)

1

0

84

8,300.0

N/A

593

677

14.2

– Other income, net

(189)

198

(44)

42

3

-106.8

-92.9

7

(32)

-557.1

42

– Interest expense, net of capitalised interest

(82)

(78)

(75)

(75)

(73)

-2.7

-2.7

(310)

(308)

-0.6

(88)

322

119

(118)

(33)

14

-111.9

-142.4

290

337

16.2

(46)

 

 

Income/(loss) before income and mining tax and other items

779

550

880

1,074

934

6.1

-13.0

3,283

3,143

-4.3

766

Income and mining tax benefit/(expense)

23

(164)

(305)

(443)

(258)

-15.4

-41.8

(889)

(704)

-20.8

(310)

Effective tax rate (%)

(3.0)

29.8

34.7

41.3

27.6

-20.5

-33.2

27.1

23.4

-13.7

40.5

Profit after tax

802

386

575

631

676

17.6

7.1

2,394

2,439

1.9

455

 

 

Equity income/(loss) of affiliates

37

29

53

54

70

32.1

29.6

173

189

9.2

35

 

 

Net income/(loss) from continuing operations

839

415

628

685

746

18.8

8.9

2,567

2,628

2.4

490

Net income/(loss) from discontinued operations

(15)

(68)

228

18

-92.1

N/A

145

163

12.4

0

Net income/(loss)

824

347

856

685

764

-10.7

11.5

2,712

2,791

2.9

490

Minority interest

2

3

17

37

(60)

-452.9

-262.2

59

(38)

-164.4

19

Do (%)

0.2

0.9

2.0

5.3

(7.9)

-495.0

-249.1

2.2

(1.4)

-163.6

3.9

Net income/(loss) attributable to Newmont stockholders

822

344

839

649

824

-1.8

27.0

2,654

2,829

6.6

471

 

 

Adjustments to net income

(496)

(83)

(142)

0

32

-122.5

N/A

(721)

(689)

-4.4

0

Adjusted net income

326

261

697

649

856

22.8

31.9

1,933

2,140

10.7

471

 

 

Net income/(loss) per common share (US$/share)

 

 

Basic

 

 

– Continuing operations

1.037

0.513

0.761

0.809

1.01

32.7

24.8

3.121

3.32

6.4

0.587

– Discontinued operations

(0.019)

(0.085)

0.284

0.000

0.02

-93.0

N/A

0.180

0.20

11.1

0.000

– Total

1.019

0.428

1.045

0.809

1.03

-1.4

27.3

3.301

3.52

6.6

0.587

Diluted

 

 

– Continuing operations

1.035

0.512

0.758

0.803

1.00

31.9

24.5

3.099

3.31

6.8

0.583

– Discontinued operations

(0.019)

(0.084)

0.283

0.000

0.02

-92.9

N/A

0.179

0.20

11.7

0.000

– Total

1.016

0.427

1.041

0.803

1.02

-2.0

27.0

3.278

3.51

7.1

0.583

 

 

Basic adjusted net income per share (US$/share)

0.404

0.325

0.868

0.809

1.07

23.3

32.3

2.404

2.66

10.6

0.587

Diluted adjusted net income per share (US$/share)

0.403

0.324

0.865

0.803

1.06

22.5

32.0

2.388

2.66

11.4

0.583

 

 

DPS (US$/share)

0.250

0.250

0.400

0.550

0.55

37.5

0.0

1.450

1.45

0.0

0.550

Source: Newmont, Edison Investment Research

In general, beyond Q420, Edison has left its financial forecasts substantially unchanged relative to those set out in our initiation note (The sustainable leader, published on 9 February). However, we have made some minor adjustments to account for the likelihood of some ongoing, low-level coronavirus-induced disruptions as well as the recent fall in the gold price, from US$1,828/oz at the time of our initiation to US$1,811/oz at the time of writing. Together with the operational adjustments, the 1.0% assumed decline in the gold price has resulted in a decline of 2.1% in our revenue forecast for FY21, which, for these purposes, has translated into a 4.5% decline in our pre-tax profit forecast and a 1.9% decline in our EPS forecast (on account of a change in our tax treatment of interest costs).

Note that our EPS forecast of US$0.59/share for Q121 and US$2.68/share for FY21 compare to the market consensus, as follows:

Exhibit 3: Q121 EPS forecast, Edison cf consensus (US$/share)

Q121e

FY21e

Edison forecast

0.59

2.68

Consensus forecast

1.01

4.08

High

1.26

5.54

Low

0.85

2.71

Source: Edison Investment Research, Refinitiv (19 February 2021)

Although Edison’s forecasts are low within the context of the range of analysts’ expectations, we note that the average expected realised price of gold for Newmont in FY21 appears to be in the order of US$1,947/share, compared with our US$1,811/oz (ie the current spot price) for the remainder of the year, which may go some way to explaining the difference. In addition, Edison’s forecasts may be conservative with respect to tax in particular. Currently, we are forecasting an effective tax rate for FY21 of 39.6% compared to a guided range of 34–38%. Note that, the more the gold price rises, the more Newmont’s effective tax rate falls as lower tax operations contribute proportionately more to pre-tax profits. Finally, the balance of Newmont’s earnings between H121 and H221 is expected to be approximately in the proportion 47–48 to 52–53, all other things being equal.

Reserves and resources

In addition to the recent release of its financial results, on 10 February, Newmont announced the results of its annual resource and reserve estimation. Full details of the updated reserves and resources statement and of the changes in the categorisations of reserves and resources, by asset, are available on Newmont’s website. However, a very brief summary is provided below:

Newmont exceeded its 2020 conversion target by replacing 80% of all depletion with the addition of 6.0Moz of reserves compared to mining depletion of 7.5Moz.

Gross reserve increases (ie before depletion) were recorded at Ahafo, Nevada Gold Mines, Éléonore and Cerro Negro; net reserve increases (ie after depletion) were recorded at Tanami, Merian and Porcupine.

Discrete reserves of 94.2Moz plus measured and indicated resources of 69.6Moz and inferred resources of 31.6Moz (total 195.4Moz).

3.4Moz of additions in the measured and indicated categories of resources, partially offsetting 7.3Moz of conversions (both into reserves and out of the mineral inventory).

Absolute resource increases at CC&V, Yanacocha, Merian, NuevaUnion, South America (as a region), Tanami, Akyem and Nevada plus the formation of the MARA project at Aqua Rica (+1.5Moz of resources net of Alumbrera).

3.5Moz of additions in the inferred resource category via exploration programmes (before conversions and revisions).

The following table summarises the year-on-year changes in Newmont’s attributable resources and reserves, by asset. Readers should note that, ordinarily, Newmont reports its resources exclusive of reserves. In this case however, we have aggregated reserves with resources in order to provide an indication of the full mineral inventory attributable to the company.

Exhibit 4: Newmont attributable resources and reserves, by asset, FY20 vs FY19

Asset

Category

Reserves & resources (FY19)

Reserves & resources (FY20)

Change (%)

Tonnes

(kt)

Grade

(g/t)

Contained gold (koz)

Tonnes

(kt)

Grade

(g/t)

Contained gold (koz)

Tonnes

(%)

Grade

(%)

Contained gold (%)

CC&V

Total

277,600

0.53

4,710

319,200

0.47

4,820

15.0

-11.3

2.3

Musselwhite

Total

19,500

5.36

3,360

14,400

5.49

2,540

-26.2

2.4

-24.4

Porcupine

Total

410,600

0.97

12,790

211,600

1.51

10,290

-48.5

55.7

-19.5

Éléonore

Total

13,600

5.19

2,270

13,300

5.05

2,160

-2.2

-2.7

-4.8

Penasquito

Total

976,400

0.41

12,910

815,500

0.44

11,430

-16.5

7.3

-11.5

Noche Buena

Total

30,000

0.36

350

30,000

0.36

350

0.0

0.0

0.0

Sandman

Total

2,300

1.49

110

0

0.00

0

-100.0

-100.0

-100.0

Coffee

Total

58,100

1.43

2,670

62,300

1.18

2,370

7.2

-17.5

-11.2

Galore Creek

Total

650,900

0.25

5,300

650,900

0.25

5,300

0.0

0.0

0.0

Conga

Total

474,700

0.59

8,970

474,700

0.59

8,970

0.0

0.0

0.0

Yanacocha

Total

251,900

0.93

7,570

275,500

0.86

7,650

9.4

-7.5

1.1

Merian

Total

146,900

1.18

5,560

185,800

1.07

6,410

26.5

-9.3

15.3

Cerro Negro

Total

21,200

7.14

4,870

20,700

7.63

5,080

-2.4

6.9

4.3

Pueblo Viejo

Total

157,700

2.29

11,590

174,400

2.03

11,380

10.6

-11.4

-1.8

Nueva Union

Total

687,200

0.45

9,890

704,000

0.46

10,490

2.4

2.2

6.1

Norte Abierto

Total

1,642,600

0.51

26,800

1,642,600

0.51

26,800

0.0

0.0

0.0

Aqua Rica

Total

0

0.00

0

419,200

0.16

2,210

N/A

N/A

N/A

Alumbrera

Total

55,100

0.38

680

0

0.00

0

-100.0

-100.0

-100.0

Boddington

Total

931,100

0.61

18,300

836,800

0.60

16,240

-10.1

-1.6

-11.3

Tanami

Total

65,800

4.30

9,100

76,900

4.07

10,070

16.9

-5.3

10.7

Ahafo

Total

171,700

1.94

10,810

163,200

1.95

10,230

-5.0

0.5

-5.4

Ahafo North

Total

62,600

2.23

4,490

62,500

2.24

4,500

-0.2

0.4

0.2

Akyem

Total

130,100

1.92

8,040

63,200

1.70

3,460

-51.4

-11.5

-57.0

Nevada

Total

443,900

2.29

32,650

464,600

2.19

32,680

4.7

-4.4

0.1

Total

Measured/proven

1,202,300

1.02

39,600

1,323,300

0.97

41,390

10.1

-4.9

4.5

Total

Indicated/probable

4,966,000

0.82

130,280

4,841,900

0.79

122,490

-2.5

-3.7

-6.0

Total

Inferred

1,450,600

0.63

29,420

1,516,100

0.65

31,550

4.5

3.2

7.2

Total

Total

7,618,900

0.81

199,300

7,681,300

0.79

195,430

0.8

-2.5

-1.9

Total (GEO)

Measured/proven

53,154

60,753

14.3

Total (GEO)

Indicated/probable

204,294

207,318

1.5

Total (GEO)

Inferred

50,738

56,375

11.1

Total (GEO)

Total

308,186

324,447

5.3

Source: Newmont. Note: *Based on Yanacocha Sulphides project processing rate. GEO = gold equivalent ounces, with by- and co- products converted at the following prices: Au US$1,200/oz, Cu US$2.75/lb, Ag US$17.00/oz, Zn US$1.15/oz, Pb US$0.90/lb.

Inevitably, Newmont’s exploration activities were adversely affected by the COVID-19 pandemic, which required it, among other things, to prioritise drilling programmes in existing operations owing to travel restrictions. This constraint, in particular, affected its ability to progress greenfields exploration. Nevertheless, it was still able to achieve its target of replacing two-thirds of mining depletion 'via the drill bit’. Moreover, while headline reserves and resources declined by 1.9%, we estimate that they expanded by 5.3% if co- and by-products are also translated into gold equivalent ounces (GEOs). Relative to FY19, much of the increase in FY20 can be attributed to an expansion in copper resources, in particular, from 10.3Mt in FY19 to 11.9Mt (contained Cu) in FY20. Note that, for the purposes of Edison’s calculation, both co- and by-product reserves and resources are translated into GEOs at the prices indicated, whereas Newmont, in its official calculations, translates resources at slightly higher prices than reserves of US$1,400/oz Au, US$3.25/lb Cu, US$20/oz Ag, US$1.40/lb Zn and US$1.10/lb Pb.

The exploration challenge in the long term

As Newmont sees it, the challenge in discovering the next generation of mines is to be able to identify deeper, so-called ‘blind’ deposits that are under cover, rather than those originally discovered from outcrops (NB readers are directed towards Newmont’s Exploration update presentation to accompany its reserve and resource update for detailed information on this strategy). To this end, its philosophy towards exploration is to understand completely the geological systems in which it has a presence on both a regional and district scale, a goal that it believes cannot be achieved by operating a decentralised model. Immediate examples of domains with such multi-million ounce endowments include (but are not limited to) the Tintina Province in the Yukon, the Golden Triangle in British Columbia, the Carlin Trend, the Guiana Shield, the Superior Province in Canada, the Yilgarn, the West African Craton, the Nubian Shield and the Deseado Massif (Argentina/Chile), where, in addition to reserve expansion potential, Newmont’s existing presence in these complexes also makes them attractive from the perspective of offering synergies with existing operations. Within this context, it is worth noting that c 80% of Newmont’s reserves are located within easy trucking distance of an existing operating site and are therefore able to contribute relatively easily to low cost, value focused production for minimal investment.

Financials

Newmont had net debt on its balance sheet of US$1.2bn at end-FY20, which compares with US$1.8bn at end-Q320 and was considerably better than our expectation that it would remain broadly flat in Q4, not least owing to diligent control of working capital. This level of net debt equates to a gearing (net debt/equity) ratio of just 5.1% and a leverage (net debt/[net debt+equity]) ratio of 4.8%. Hereafter, we forecast that Newmont will generate cash from operations at a rate approaching US$5bn pa, of which around c US$2.2bn will be expended in capex and a further c US$1.8bn in dividends to shareholders, such that (all other things being equal) we would expect it to have net debt on its balance sheet of only US$286m as at end-Q421 (cf US$944m previously). On this basis, we would expect Newmont to be net debt free early in FY21, although this is subject to future investment decisions and may also be delayed depending on the extent to which the company buys back shares under its share buyback programme (sanctioned, so far, at a rate of US$1bn over the next 18 months). In the meantime, it boasts a dividend that puts it among the top five yielding large-cap global gold mining stocks globally and well in excess of the S&P 500 Index’s dividend yield, as well as having a share buyback programme of a similar order of magnitude.

Valuation

In our initiation note (see The sustainable leader, published on 9 February 2021), we valued the company at US$76.34/share, based on nine measures across three different methodologies. Notwithstanding the adjustments that we have made to our short-term earnings expectations, we have elected to leave our valuation of Newmont unchanged relative to that in our earlier report and readers are directed towards this report to see more details of that valuation (see The sustainable leader published on 9 February).

Exhibit 5: Financial summary

Accounts: US GAAP, Yr end: December, USD: Millions

 

 

2018

2019

2020

2021e

2022e

2023e

2024e

2025e

Income statement

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

7,253

9,740

11,497

12,466

12,288

11,767

12,385

12,055

Cost of sales

 

 

(4,093)

(5,195)

(5,014)

(5,357)

(5,114)

(5,101)

(5,611)

(5,611)

Gross profit

 

 

3,160

4,545

6,483

7,109

7,174

6,666

6,774

6,444

SG&A (expenses)

 

 

(244)

(313)

(269)

(260)

(260)

(260)

(260)

(260)

R&D costs

 

 

(350)

(415)

(309)

(390)

(390)

(390)

0

0

Other income/(expense)

 

 

(406)

(253)

(831)

(324)

(324)

(324)

(216)

(215)

Exceptionals and adjustments

Exceptionals

 

(424)

2,220

214

0

0

0

0

0

Depreciation and amortisation

 

 

(1,215)

(1,960)

(2,300)

(2,411)

(2,545)

(2,653)

(2,865)

(2,750)

Reported EBIT

 

 

945

3,994

3,451

3,724

3,656

3,039

3,434

3,219

Finance income/(expense)

 

 

(207)

(301)

(308)

(275)

35

474

9

22

Other income/(expense)

 

 

0

0

0

0

0

0

0

0

Exceptionals and adjustments

Exceptionals

 

0

0

0

0

0

0

0

0

Reported PBT

 

 

738

3,693

3,143

3,449

3,691

3,513

3,442

3,240

Income tax expense (includes exceptionals)

 

 

(419)

(737)

(515)

(1,230)

(1,253)

(1,031)

(1,076)

(1,079)

Reported net income

 

 

380

2,884

2,791

2,219

2,439

2,482

2,367

2,161

Basic average number of shares, m

 

 

533

735

804

802

802

802

802

802

Basic EPS (US$/share)

 

 

0.6

3.8

3.5

2.7

2.9

3.0

2.9

2.6

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

2,584

3,734

5,537

6,135

6,201

5,692

6,298

5,969

Adjusted EBIT

 

 

1,369

1,774

3,237

3,724

3,656

3,039

3,434

3,219

Adjusted PBT

 

 

1,162

1,473

2,929

3,449

3,691

3,513

3,442

3,240

Adjusted EPS (US$/share)

 

 

1.35

1.32

2.66

2.68

2.94

3.05

2.87

2.56

Adjusted diluted EPS (US$/share)

 

 

1.34

1.32

2.66

2.66

2.92

3.02

2.85

2.54

 

 

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

12,258

25,276

24,281

23,771

23,627

23,274

21,909

20,359

Goodwill

 

 

58

2,674

2,771

2,771

2,771

2,771

2,771

2,771

Intangible assets

 

 

0

0

0

0

0

0

0

0

Other non-current assets

 

 

3,122

5,752

5,812

5,812

5,812

5,812

5,812

5,812

Total non-current assets

 

 

15,438

33,702

32,864

32,354

32,210

31,857

30,492

28,942

Cash and equivalents

 

 

3,397

2,243

5,540

5,866

6,234

7,026

9,590

12,503

Inventories

 

 

630

1,014

963

1,165

1,148

1,100

1,157

1,127

Trade and other receivables

 

 

254

373

449

376

370

355

373

363

Other current assets

 

 

996

2,642

1,553

1,553

1,553

1,553

1,553

1,553

Total current assets

 

 

5,277

6,272

8,505

8,960

9,305

10,033

12,673

15,546

Non-current loans and borrowings

 

 

3,608

6,734

6,045

5,495

5,003

4,589

4,589

4,589

Other non-current liabilities

 

 

3,808

8,438

8,076

8,099

8,122

8,146

8,170

8,193

Total non-current liabilities

 

 

7,416

15,172

14,121

13,594

13,125

12,735

12,759

12,782

Trade and other payables

 

 

303

539

493

483

461

460

506

506

Current loans and borrowings

 

 

653

100

657

657

657

657

657

657

Other current liabilities

 

 

831

1,746

2,219

2,219

2,219

2,219

2,219

2,219

Total current liabilities

 

 

1,787

2,385

3,369

3,359

3,337

3,336

3,382

3,382

Equity attributable to company

 

 

10,502

21,420

23,008

23,392

23,986

24,665

25,680

26,447

Non-controlling interest

 

 

1,010

997

871

969

1,067

1,155

1,345

1,877

 

 

 

 

 

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

 

 

 

 

 

Profit for the year

 

 

380

2,884

2,791

2,219

2,439

2,482

2,367

2,161

Taxation expenses

 

 

386

832

704

1,366

1,395

1,195

1,235

1,186

Profit before tax

 

 

0

0

0

0

0

0

0

0

Net finance expenses

 

 

207

301

308

275

(35)

(474)

(9)

(22)

EBIT

 

 

0

0

0

0

0

0

0

0

Depreciation and amortisation

 

 

1,215

1,960

2,300

2,411

2,545

2,653

2,865

2,750

Share based payments

 

 

76

97

72

0

0

0

0

0

Other adjustments

 

 

749

(2,131)

(654)

216

216

216

216

215

Movements in working capital

 

 

(743)

(309)

295

(332)

(192)

(129)

(222)

(151)

Interest paid / received

 

 

(207)

(301)

(308)

(275)

35

474

9

22

Income taxes paid

 

 

(236)

(498)

(926)

(1,366)

(1,395)

(1,195)

(1,235)

(1,186)

Cash from operations (CFO)

 

 

1,827

2,866

4,882

4,514

5,006

5,222

5,225

4,976

Capex

 

 

(1,032)

(1,463)

(1,302)

(1,901)

(2,400)

(2,300)

(1,500)

(1,200)

Acquisitions & disposals net

 

 

(98)

224

1,463

0

0

0

0

0

Other investing activities

 

 

(47)

41

65

0

0

0

0

0

Cash used in investing activities (CFIA)

 

 

(1,177)

(1,226)

91

(1,901)

(2,400)

(2,300)

(1,500)

(1,200)

Net proceeds from issue of shares

 

 

(98)

(479)

(521)

0

0

0

0

0

Movements in debt

 

 

0

(1,186)

(175)

(550)

(492)

(414)

0

0

Dividends paid

 

 

(301)

(889)

(834)

(1,822)

(1,824)

(1,793)

(1,321)

(1,353)

Other financing activities

 

 

(56)

(223)

(150)

85

77

77

160

490

Cash from financing activities (CFF)

 

 

(455)

(2,777)

(1,680)

(2,287)

(2,239)

(2,129)

(1,161)

(862)

Currency translation differences and other

 

 

(4)

(3)

6

0

0

0

0

0

Increase/(decrease) in cash and equivalents

 

 

191

(1,140)

3,299

326

368

792

2,564

2,913

Currency translation differences and other

 

 

0

0

0

0

0

0

0

0

Cash and equivalents at end of period

 

 

3,489

2,349

5,648

5,974

6,342

7,134

9,698

12,611

Net (debt) cash

 

 

(864)

(4,591)

(1,162)

(286)

574

1,780

4,344

7,257

Movement in net (debt) cash over period

 

 

(864)

(3,727)

3,429

876

860

1,206

2,564

2,913

Source: Company sources, Edison Investment Research

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This report has been commissioned by Newmont Corporation and prepared and issued by Edison, in consideration of a fee payable by Newmont Corporation. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

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This report has been commissioned by Newmont Corporation and prepared and issued by Edison, in consideration of a fee payable by Newmont Corporation. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

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The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

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London, WC1V 7EE

United Kingdom

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