Newmont Corporation — Q3 forecasts refined

Newmont Corporation (TSX: NEM)

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Last close As at 04/02/2023

-49.58

2.21 (4.67%)

Market capitalisation

USD37,703m

Newmont Corporation — Q3 forecasts refined

Newmont’s Q322 results are scheduled for release on Tuesday 1 November. This report updates our forecasts for Q3–Q422 for metals prices, as well as output from Nevada Gold Mines (NGM) and Pueblo Viejo, which were announced to the market by Barrick on 13 October.

Lord Ashbourne

Written by

Lord Ashbourne

Director, Energy & Resources

Newmont Corporation

Q3 forecasts refined

Q322 preview

Metals and mining

14 October 2022

Price

US$42.28

Market cap

US$33,528m

Net debt (US$m) at end-June 2022

1,938

Shares in issue

793.0m

Free float

99.8%

Code

NEM

Primary exchange

NYSE

Secondary exchange

TSX

Share price performance

%

1m

3m

12m

Abs

(3.3)

(28.5)

(26.2)

Rel (local)

3.6

(25.9)

(12.2)

52-week high/low

US$85.42

US$40.27

Business description

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.

Next events

Q322 results

1 November 2022

Five-year guidance

December 2022

TE 2 & Ahafo North update

Late FY22/early FY23

Yanacocha Sulphides decision

H224

Analyst

Lord Ashbourne

+44 (0)20 3077 5724

Newmont Corporation is a research client of Edison Investment Research Limited

Newmont’s Q322 results are scheduled for release on Tuesday 1 November. This report updates our forecasts for Q3–Q422 for metals prices, as well as output from Nevada Gold Mines (NGM) and Pueblo Viejo, which were announced to the market by Barrick on 13 October.

Year end

Revenue (US$m)

PBT
(US$m)

EPS*
(US$)

DPS
(US$)

P/E
(x)

Yield
(%)

12/20

11,497

3,143

2.66

1.45

15.9

3.4

12/21

12,222

1,108

2.97

2.20

14.2

5.2

12/22e

11,793

1,788

1.83

2.20

23.1

5.2

12/23e

11,959

2,665

2.10

2.20

20.1

5.2

Note: *EPS is normalised, excluding amortisation of acquired intangibles and exceptional items.

NGM and Pueblo Viejo production known

On 13 October, Barrick announced Q3 production from NGM and Pueblo Viejo of 425koz and 121koz, respectively, which equates to production attributable to Newmont of 266koz and 81koz – or 41koz lower and 11koz higher than our prior expectations. Although we have reduced our production expectations for Q3 by 7% (not least as a result of the effects of inclement weather in the tropics and southern hemisphere), our full year forecasts for both production and costs applicable to sales are now almost exactly in line with guidance (see Exhibit 3).

Updated medium-term guidance awaited in December

On 15 September, Newmont announced that, in the light of unprecedented and evolving market conditions, it had deferred its full funds investment decision regarding the Yanacocha Sulphides project in Peru until H224 (approximately two years later than previously expected). While we have done our best to adjust our medium- to long-term forecasts to accommodate this delay (which has inevitably affected our pre-financing cash-flow per share forecasts and therefore also our valuation), readers should recognise an inherent degree of uncertainty in our updated numbers ahead of the receipt of detailed five-year guidance from Newmont in early December.

Valuation: Dividend yield tops 5%

Using a real discount rate of 6.71%, our ex-growth, ‘terminal’ valuation of Newmont at end-FY27 is US$52.73/share, which equates to an immediate valuation of US$48.12/share in FY22 after intervening dividends have been taken into account. However, this valuation rises to US$76.62/share in FY27 if the growth in real cash flows thereafter amounts to just 2.0% per annum (ie the minimum that might reasonably be expected given the average historical annual increase in the real gold price of 2.0% pa) and to US$64.30/share as at the start of FY22 (cf US$81.10/share previously). In the meantime, in both historical and relative terms, Newmont remains cheap with respect to its dividend yield, which we now calculate at in excess of 5% and higher than 83% of its peers’ dividend yields over the next three years (see Exhibit 8).

Updated FY22 estimates, by quarter

Newmont’s Q322 results are scheduled for release on 1 November. This report updates our forecasts for metals prices, costs and production in the wake of quarter’s end. As in FY21, Newmont expects both (higher) production and (lower) costs to be weighted towards the second half of the year in FY22, approximately in the ratio 47:53. For the purposes of this report, we have updated our production and cost forecasts to reflect guidance at the time of Q222 results as well as a greater than expected weather impact on operations in the tropics and southern hemisphere in Q3. We have also updated our production estimates for NGM and Pueblo Viejo, which were announced by Barrick yesterday. Given this, a summary of our updated production and cost assumptions for Q3 and for the remainder of the year is as follows:

Exhibit 1: Newmont Q122–Q422e operational estimates

Region

Production (koz)

Costs applicable to sales (US$/oz)

Q122

Q222

Q322e

Q422e

FY22e

Q122

Q222

Q322e

Q422e

FY22e

Updated

North America

309

316

354

355

1,335

995

1,124

1,064

1,037

1,054

South America

198

210

217

225

850

921

982

908

798

900

Australia

282

366

361

361

1,370

764

710

711

711

722

Africa

198

243

255

275

970

871

838

912

846

868

Nevada

288

290

266

337

1,181

899

1,035

1,091

848

961

Sub-total

1,275

1,425

1,453

1,552

5,706

890

932

931

851

900

Pueblo Viejo (40%)

69

70

81

82

302

Total (attributable) gold

1,344

1,495

1,534

1,634

6,008

Prior

North America

309

316

418

374

1,444

995

1,124

814

913

904

South America

198

210

220

220

832

921

982

819

819

868

Australia

282

366

380

380

1,361

764

710

676

676

725

Africa

198

243

261

280

975

871

838

895

832

889

Nevada

288

290

307

307

1,192

899

1,035

849

849

858

Sub-total

1,275

1,425

1,586

1,561

5,805

890

932

802

815

845

Pueblo Viejo (40%)

69

70

70

70

279

Total (attributable) gold

1,344

1,495

1,656

1,631

6,083

Source: Newmont Corporation, Edison Investment Research. Note: Totals may not add up owing to rounding.

In addition to production and cost forecasts, we have updated our metals price forecasts for both Q3 and Q4. As is our custom, we are using the spot price of gold at the time of writing as the basis of our short-term forecasts. In the case of gold, however, our forecast achieved price for Q3 is lower than the average spot price of the quarter of US$1,727/oz on account of an adjustment downwards for approximately 200koz of gold provisionally priced at the end of Q2 at a time when prices were declining. A summary of our updated metals price forecasts for both Q3 and Q422 is as follows:

Exhibit 2: Edison FY22 metals price forecasts

Metal (units)

Q322 price forecast

Q422 price forecast

Previous forecast

Current forecast

Change
(%)

Previous forecast

Current forecast

Change
(%)

Gold (US$/oz)

1,715

1,715

u/c

1,710

1,679

-1.8

Silver (US$/oz)

18.67

19.24

+3.1

18.60

19.94

+7.2

Zinc (US$/lb)

1.34

1.46

+9.0

1.34

1.36

+1.5

Lead (US$/lb)

0.89

0.89

u/c

0.89

0.93

+4.5

Copper (US$/lb)

3.34

3.51

+5.1

3.32

3.39

+2.1

Simple average

+3.4

+2.7

Source: Edison Investment Research

In addition, Newmont made a one-off payment to Caterpillar of US$34m in Q3 in respect of the battery electric haul truck collaboration between the two parties (out of a total of US$100m), which we expect to be included in ‘advanced, projects, research and development’. Note that this item is in addition to Newmont’s official guidance for ‘advanced, projects, research and development’ spend for the full year. In the light of these changes, our updated financial forecasts for Newmont for FY22, by quarter, are as follows:

Exhibit 3: Newmont quarterly income statement, Q121–Q422e

US$m (unless otherwise indicated)

Q122

Q222

Q322e
(prior)

Q322
(current)

Q422e
(prior)

Q422e
(current)

FY22e

FY22e
(prior)

Sales

3,023

3,058

3,019

2,790

2,970

2,922

11,793

11,980

Costs and expenses

– Costs applicable to sales

1,435

1,708

1,465

1,612

1,465

1,556

6,311

5,852

– Depreciation and amortisation

547

559

666

581

668

636

2,323

2,466

– Reclamation and remediation

61

49

42

47

42

47

203

188

– Exploration

38

62

70

70

70

70

240

248

– Advanced projects, research and development

44

45

43

77

43

43

208

172

– General and administrative

64

73

65

65

65

65

267

259

– Impairment of long-lived assets

0

0

0

0

0

0

0

0

– Care and maintenance

0

0

0

0

0

0

0

0

– Loss on assets held for sale

0

– Other expense, net

35

22

18

7

18

6

70

87.5

Total

2,224

2,518

2,368

2,458

2,371

2,422

9,622

9,272

Other income/(expenses)

– Gain on formation of Nevada Gold Mines

0

0

– Gain on asset and investment sales, net

0

0

– Other income, net

(109)

(75)

0

0

0

0

-184

(109)

– Interest expense, net of capitalised interest

(62)

(57)

(55)

-39

(53)

-42

-200

(225)

(171)

(132)

(55)

-39

(53)

-42

-384

(334)

Income/(loss) before income and mining tax

628

408

596

293

546

458

1,788

2,374

Income and mining tax benefit/(expense)

(214)

(33)

(191)

-94

(175)

-147

-488

(773)

Effective tax rate (%)

34.1

8.1

32.0

32.0

32.0

32.0

27.3

32.5

Profit after tax

414

375

405

200

371

312

1,300

1,602

Equity income/(loss) of affiliates

39

17

24

33

23

29

117

115

Net income/(loss) from continuing operations

453

392

429

232

394

340

1,417

1,717

Net income/(loss) from discontinued operations

16

8

24

16

Net income/(loss)

469

400

429

232

394

340

1,441

1,733

Minority interest

21

13

14

11

14

15

60

62

Ditto (%)

4.5

3.3

3.2

4.8

3.5

4.3

4.2

3.6

Net income/(loss) attributable to stockholders

448

387

415

221

380

325

1,381

1,670

Adjustments to net income

98

(25)

0

0

0

0

73

98

Adjusted net income

546

362

415

221

380

325

1,454

1,768

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

Basic

– Continuing operations

0.545

0.477

0.524

0.278

0.480

0.410

1.710

2.086

– Discontinued operations

0.020

0.010

0.000

0.000

0.000

0.000

0.030

0.020

– Total

0.565

0.487

0.524

0.278

0.480

0.410

1.740

2.106

Diluted

– Continuing operations

0.544

0.477

0.523

0.278

0.479

0.409

1.708

2.083

– Discontinued operations

0.020

0.010

0.000

0.000

0.000

0.000

0.030

0.020

– Total

0.564

0.487

0.523

0.278

0.479

0.409

1.738

2.104

Basic adjusted net income per share (US$)

0.689

0.456

0.524

0.278

0.480

0.410

1.832

2.230

Diluted adjusted net income per share (US$)

0.688

0.455

0.523

0.278

0.479

0.409

1.819

2.227

DPS (US$/share)

0.550

0.550

0.550

0.550

0.550

0.550

2.200

2.200

Source: Newmont Corporation, Edison Investment Research

Our basic adjusted EPS forecast of US$1.832/share for FY22 (cf US$2.230/share previously) compares to the market consensus, by quarter, as follows:

Exhibit 4: FY22 basic adjusted EPS forecast, Edison versus consensus (US$/share)

Q122

Q222

Q322e

Q422e

Sum Q1–Q422e

FY22e

Edison forecast

0.689

0.456

0.278

0.410

1.833

1.832

Consensus forecast

0.689

0.456

0.490

0.620

2.255

2.270

High

0.689

0.456

0.660

1.000

2.805

2.770

Low

0.689

0.456

0.310

0.220

1.675

1.760

Source: Edison Investment Research, Refinitiv (11 October 2022)

While Edison does not make explicit cash flow forecasts on a quarterly basis, we note one specific item in Q3 that will affect cash flows during the quarter. On 5 July, Newmont announced that it had reached a profit-sharing agreement at Peñasquito, whereby it was to pay its represented workforce an uncapped profit-sharing bonus up to 10%, with an immediate cost equivalent to US$70m related to FY21. This expense was accrued during Q2, but we understand that the actual payment was made in July, which will result in an adjustment to working capital in Q3.

Dividend

Newmont’s Q1 and Q222 dividends were maintained at US$0.55/share. At the time of its Q320 results in October 2020, Newmont unveiled a new dividend framework whereby it formally rebased its dividend to a ‘base’ payout of US$1.00/share (or US$0.25/share per quarter) at a gold price of US$1,200/oz, but also stated explicitly that it would return 40–60% of incremental attributable free cash flow that it generated above a gold price of US$1,200/oz to shareholders. Under this framework, Newmont then augments its ‘base’ payout in increments of US$0.60–0.90/share per year (or US$0.15–0.225/share per quarter), evaluated in gold price increments of US$300/oz for gold prices above US$1,200/oz, with the goal of targeting 40–60% of incremental free cash flow above a gold price of US$1,200/oz returned to shareholders. Thus, a (sustainable) gold price at US$1,800/oz should (on this basis) result in a quarterly dividend of US$0.55/share, whereas a gold price below that level could result in one of US$0.40/share. However, it is worth noting that Newmont affords itself a degree of latitude in the level of the ultimate payout in that, should it 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 scope for the quarterly dividend to remain at the higher level (ie US$0.55/share) even if the gold price dips below the US$1,800/oz level. As such, we have left our dividend forecasts unchanged for the remainder of FY22 notwithstanding the fact that the gold price is, at the time of writing, below US$1,800/oz. However, we recognise a risk to this payout at these levels in the event that the gold price continues to weaken under pressure from aggressive Federal Reserve monetary policy tightening.

Projects

Yanacocha Sulphides

On 15 September, Newmont announced that, in the light of unprecedented and evolving market conditions, the war in Ukraine, record inflation, the rising prices of commodities and raw materials, prolonged supply chain disruptions and competitive labour markets, it will delay its full funds investment decision regarding the Yanacocha Sulphides project in Peru to H224 (approximately two years later than had previously been intended). To complement this development, Newmont also announced that it had appointed Dean Gehring as chief development officer (Peru) to lead its Yanacocha operations, generally, and its Sulphides project, in particular.

Ahead of the full funds investment decision on the Sulphides project, Newmont has said that it will continue advanced engineering and long-lead procurement activities to de-risk the project, including the construction of two water treatment plants, with an anticipated initial spend of around US$350m over the next two years (albeit this expenditure will take the form of accretion, rather than capex). Following the investment decision anticipated in H224, the project is expected to be developed over a three-year period, adding average annual production of approximately 525koz gold equivalent ounces per year for the first five full years of operation (now forecast by Edison to start in FY28 cf FY27 previously). Aside from the delay in achieving full production that the delay in making a full funds decision will engender, we also forecast that it will materially alter the timing and phasing of capital expenditure. Whereas Newmont had provided guidance at the end of FY21 that capex would trend downwards from FY22 and FY23 onwards, we now expect a material portion of capex (especially related to the Yanacocha Sulphides project) to be shunted from FY23 and FY24 into FY25–27, approximately as shown in the graph below:

Exhibit 5: Edison revised capex estimates cf FY21 Newmont guidance (US$m)

Source: Edison Investment Research, Newmont Corporation. Note: * ±5%: **Revised Edison forecast excludes Yanacocha minority acquisition purchase price consideration in FY22.

MARA

On 23 September, Newmont announced that it had sold its 18.75% shareholding in the MARA project in Argentina to Glencore for a consideration of US$124.9m upon closing plus a US$30m deferred payment upon commercial production being achieved (subject to an annual interest charge of 6%, but capped at US$50m).

The MARA project was formed as a joint venture between Yamana Gold, Glencore and Newmont in December 2020 following the integration of the Minera Alumbrera plant and mining infrastructure into the Agua Rica project. A core asset for Yamana and Glencore, MARA has proven and probable mineral reserves of 5.4Mt of copper and 7.4Moz of gold contained in 1,105Mt of ore (Yamana and Glencore reporting standards based on pre-feasibility study) with an initial mine life of 28 years. Under the new structure, Yamana will remain the operator with 56.25% of MARA, with Glencore owning the remaining 43.75% interest.

Although Newmont’s announcement regarding this transaction was made on 23 September, we anticipate that it will not close and that Newmont will not receive its initial tranche of cash consideration until Q422.

Other

We expect Newmont to provide further updates regarding the progress of its Tanami Expansion 2 and Ahafo North projects, specifically, towards the end of the year or the beginning for FY23.

Valuation

Absolute valuation

Notwithstanding an evolving macroeconomic environment, as well as evolving development pipeline, our approach to the valuation of Newmont has remained unchanged since our initiation note (see The sustainable leader, published on 9 February 2021). In our last note, we valued the company at US$81.10/share assuming 2.0% growth in real, long-term cash flows per share per annum (ie the same as the long-term, real increase in the gold price per annum). This valuation was inherently conservative in that it excluded any explicit value to Newmont from its other development assets, such as Coffee, Galore Creek, Conga, Norte Abierto and Nueva Union, which together represent combined reserves and resources of 53.94Moz attributable to the company.

While preserving the same basic profile, the consequences of shifting capex for Yanacocha Sulphides, in particular, from FY23 and FY24 into FY2527 has had a material effect on our forecasts for pre-financing cash flows per share in those years (on which our valuation is based), as shown in the graphs below:

Exhibit 6: Previous Newmont forecast valuation and cash flow per share, FY21–27e (US$/share)

Exhibit 7: Updated Newmont forecast valuation and cash flow per share, FY21–27e (US$/share)

Source: Edison Investment Research

Source: Edison Investment Research

Exhibit 6: Previous Newmont forecast valuation and cash flow per share, FY21–27e (US$/share)

Source: Edison Investment Research

Exhibit 7: Updated Newmont forecast valuation and cash flow per share, FY21–27e (US$/share)

Source: Edison Investment Research

In empirical terms, our estimate of Newmont’s ‘terminal’ pre-financing cash flow in FY27 has moderated from US$4.35/share to US$3.54/share. On this basis, applying a (real) discount rate of 6.71% (calculated from a nominal expected equity return of 9% and decreased long-term inflation expectations of 2.1456% (cf 2.2376% previously, as defined by the US 30-year break-even inflation rate – source: Bloomberg, 11 October), our terminal valuation of Newmont as at end-FY27 is US$52.73/share or US$48.12/share as at the start of FY22. However, note that this valuation is again based on the inherently conservative assumption of zero growth in (real) cash flows beyond FY27. It increases to a terminal value of US$76.62/share if growth in real cash flows after FY27 amounts of 2.0% per annum (ie the minimum that might be expected from the average historical annual increase in the real price of gold of 2.0% pa) and to US$64.30/share as at the start of FY22 (cf US$81.10/share previously).

Relative Newmont valuation

Newmont’s valuation on a series of commonly used measures, relative to its peer group of the nine largest publicly quoted senior gold producers, is provided below.

Exhibit 8: Newmont valuation relative to peers

Company

Ticker

P/E (x)

P/cash flow (x)

EV/EBITDA (x)

Yield (%)

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Year 1

Year 2

Year 3

Newmont (Edison)

NEM

23.1

20.1

17.9

9.3

8.1

6.7

7.6

6.6

5.7

5.2

5.2

3.8

Newmont (consensus)

NEM

18.6

18.9

18.3

8.2

8.2

8.1

6.8

6.7

6.6

5.1

4.8

4.3

Barrick

ABX

16.2

15.6

14.1

6.9

6.3

5.9

6.0

5.5

5.4

4.1

4.8

4.7

AngloGold

ANGJ

9.5

7.2

8.4

4.1

4.1

4.1

3.9

3.1

3.3

2.7

2.4

2.7

Gold Fields

GFI

8.0

8.3

7.0

4.5

4.5

3.8

3.7

3.1

3.4

4.3

4.0

4.4

Kinross

K

13.3

10.1

12.2

4.0

3.4

3.8

4.6

4.0

4.4

3.0

3.0

3.0

Agnico Eagle

AEM

18.6

20.0

21.0

8.1

7.9

8.1

7.0

6.6

6.8

3.6

3.7

3.8

Newcrest

NCM AU

13.1

13.7

12.4

6.0

6.2

5.9

5.2

5.4

5.1

2.0

2.2

2.6

Harmony

HARJ

6.2

6.7

6.9

3.7

2.8

3.1

3.1

2.9

3.2

1.8

2.5

2.1

Endeavour (consensus)

EDV

11.4

10.8

10.0

3.9

4.1

3.9

3.6

4.0

3.8

4.0

4.3

4.0

Average (excl NEM)

12.0

11.5

11.5

5.1

4.9

4.8

4.6

4.3

4.4

3.2

3.4

3.4

Source: Edison Investment Research, Refinitiv. Note: Consensus and peers priced on 11 October 2022.

From the table above, it can be seen that while Newmont continues to command a premium rating relative to its peer group on most valuation measures, it remains cheap with respect to its dividend yield in at least 20 out of 24 instances (ie 83%) over the next three years. Based on consensus forecasts, we estimate that Newmont’s share price would have to rise by an average of 60.8% for its dividend yield to match those of its peers. Based on our forecasts, we estimate its share price would have to rise 54.9%.

As previously, one further observation concerning the comparability of the above measures is merited. Given its policy of proportionately consolidating its interest in NGM and that it owns 100% interests in the majority of its remaining mining operations (with the exception of Merian), estimates of cash flow in particular are also close to estimates of cash flow attributable to shareholders (Newmont estimates that 99.8% of free cash flow was attributable to the company in FY21). This is in contrast to a number of its peers, where earnings and cash flow from assets not 100%-owned tend to be fully consolidated and therefore may not so easily approximate cash flow attributable to shareholders, making direct comparison using these measures either difficult or, potentially, misleading.

Historical valuation

Based on Newmont’s average historical P/E ratio of 23.9x current year earnings over the past nine years, from FY13 to FY21, and its average historical yield of 1.7% over the same timeframe (excluding special dividends), a summary of our updated valuation of the company over 12 measures of value over the next three years is as follows:

Exhibit 9: Newmont valuation summary (US$/share in years shown)

Basis of valuation

FY22e

FY23e

FY24e

Historical

Share price implied by Edison EPS forecast (US$/share)

43.74

50.15

56.44

Historical

Share price implied by Edison DPS forecast (US$/share)

127.02

127.02

92.38

Historical

Share price implied by consensus EPS forecast (US$/share)

54.19

53.47

55.14

Historical

Share price implied by consensus DPS forecast (US$/share)

125.28

117.78

104.50

Average (US$/share)

87.56

87.10

77.11

Source: Edison Investment Research (underlying consensus data: Refinitiv, 11 October 2022)

Exhibit 10: Financial summary

Accounts: US GAAP, year-end: December, US$m

 

 

2018

2019

2020

2021

2022e

2023e

2024e

2025e

INCOME STATEMENT

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

7,253

9,740

11,497

12,222

11,793

11,959

12,329

11,954

Cost of sales

 

 

(4,093)

(5,195)

(5,014)

(5,435)

(6,311)

(5,674)

(5,829)

(5,838)

Gross profit

 

 

3,160

4,545

6,483

6,787

5,483

6,285

6,500

6,115

SG&A (expenses)

 

 

(244)

(313)

(269)

(259)

(267)

(260)

(260)

(260)

R&D costs

 

 

(350)

(415)

(309)

(363)

(448)

(450)

0

0

Other income/(expense)

 

 

(406)

(253)

(831)

(2,101)

(457)

(257)

(80)

(80)

Exceptionals and adjustments

 

(424)

2,220

214

(2,258)

(296)

0

0

0

Depreciation and amortisation

 

(1,215)

(1,960)

(2,300)

(2,323)

(2,323)

(2,521)

(3,186)

(3,399)

Reported EBIT

 

945

3,994

3,451

1,382

1,988

2,797

2,974

2,376

Finance income/(expense)

 

(207)

(301)

(308)

(274)

(200)

(132)

(78)

7

Other income/(expense)

 

0

0

0

0

0

0

0

0

Exceptionals and adjustments

 

0

0

0

0

0

0

0

0

Reported PBT

 

 

738

3,693

3,143

1,108

1,788

2,665

2,896

2,383

Income tax expense (includes exceptionals)

 

 

(419)

(737)

(515)

(932)

(370)

(957)

(946)

(841)

Reported net income

 

 

380

2,884

2,791

233

1,441

1,708

1,950

1,543

Basic average number of shares, m

 

 

533

735

804

799

794

794

794

794

Basic EPS (US$/share)

 

 

0.64

3.82

3.52

1.46

1.74

2.10

2.36

1.86

Adjusted EBITDA

 

 

2,584

3,734

5,537

5,963

4,588

5,318

6,160

5,775

Adjusted EBIT

 

 

1,369

1,774

3,237

3,640

2,266

2,797

2,974

2,376

Adjusted PBT

 

 

1,162

1,473

2,929

3,366

2,066

2,665

2,896

2,383

Adjusted EPS (US$)

 

 

1.35

1.32

2.66

2.97

1.83

2.10

2.36

1.86

Adjusted diluted EPS (US$)

 

 

1.34

1.32

2.66

2.96

1.82

2.09

2.35

1.85

BALANCE SHEET

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

12,258

25,276

24,281

24,124

23,742

22,571

20,884

19,116

Goodwill

 

 

58

2,674

2,771

2,771

2,771

2,771

2,771

2,771

Other non-current assets

 

 

3,122

5,752

5,812

5,973

5,973

5,973

5,973

5,973

Total non-current assets

 

 

15,438

33,702

32,864

32,868

32,486

31,315

29,628

27,860

Cash and equivalents

 

 

3,397

2,243

5,540

4,992

4,018

4,615

6,793

8,719

Inventories

 

 

630

1,014

963

930

1,102

1,118

1,152

1,117

Trade and other receivables

 

 

254

373

449

337

355

360

372

360

Other current assets

 

 

996

2,642

1,553

1,437

1,461

1,461

1,461

1,461

Total current assets

 

 

5,277

6,272

8,505

7,696

6,937

7,554

9,778

11,658

Non-current loans and borrowings

 

 

3,608

6,734

6,045

6,109

5,617

5,203

5,203

5,203

Other non-current liabilities

 

 

3,808

8,438

8,076

9,940

9,951

9,945

9,834

9,722

Total non-current liabilities

 

 

7,416

15,172

14,121

16,049

15,568

15,148

15,037

14,925

Trade and other payables

 

 

303

539

493

518

569

511

525

526

Current loans and borrowings

 

 

653

100

657

193

193

193

193

193

Other current liabilities

 

 

831

1,746

2,219

1,943

1,943

1,943

1,943

1,943

Total current liabilities

 

 

1,787

2,385

3,369

2,654

2,705

2,647

2,661

2,662

Equity attributable to company

 

 

10,502

21,420

23,008

22,022

21,657

21,578

22,185

22,394

Non-controlling interest

 

 

1,010

997

871

(161)

(507)

(505)

(477)

(464)

CASH FLOW STATEMENT

 

 

 

 

 

 

 

 

 

 

Profit for the year

 

 

380

2,884

2,791

233

1,441

1,708

1,950

1,543

Taxation expenses

 

 

386

832

704

1,098

488

1,105

1,065

908

Net finance expenses

 

 

207

301

308

274

200

132

78

(7)

Depreciation and amortisation

 

 

1,215

1,960

2,300

2,323

2,323

2,521

3,186

3,399

Share based payments

 

 

76

97

72

72

0

0

0

0

Other adjustments

 

 

749

(2,131)

(654)

2,277

179

187

80

80

Movements in working capital

 

 

(743)

(309)

295

(541)

(332)

(270)

(224)

(144)

Interest paid / received

 

 

(207)

(301)

(308)

(274)

(200)

(132)

(78)

7

Income taxes paid

 

 

(236)

(498)

(926)

(1,207)

(488)

(1,105)

(1,065)

(908)

Cash from operations (CFO)

 

 

1,827

2,866

4,882

4,279

3,611

4,145

4,993

4,877

Capex

 

 

(1,032)

(1,463)

(1,302)

(1,653)

(1,941)

(1,350)

(1,499)

(1,631)

Acquisitions & disposals net

 

 

(98)

224

1,463

(50)

(368)

0

0

0

Other investing activities

 

 

(47)

41

65

(15)

0

0

0

0

Cash used in investing activities (CFIA)

 

 

(1,177)

(1,226)

91

(1,868)

(2,309)

(1,350)

(1,499)

(1,631)

Net proceeds from issue of shares

 

 

(98)

(479)

(521)

(525)

0

0

0

0

Movements in debt

 

 

0

(1,186)

(175)

(390)

(492)

(414)

0

0

Dividends paid

 

 

(301)

(889)

(834)

(1,757)

(1,822)

(1,788)

(1,320)

(1,324)

Other financing activities

 

 

(56)

(223)

(150)

(286)

38

4

4

4

Cash from financing activities (CFF)

 

 

(455)

(2,777)

(1,680)

(2,958)

(2,276)

(2,198)

(1,316)

(1,321)

Currency translation differences and other

 

 

(4)

(3)

6

(8)

0

0

0

0

Increase/(decrease) in cash and equivalents

 

 

191

(1,140)

3,299

(555)

(974)

597

2,178

1,926

Cash and equivalents at end of period

 

 

3,489

2,349

5,648

5,093

4,119

4,716

6,894

8,820

Net (debt)/cash

 

 

(864)

(4,591)

(1,162)

(1,310)

(1,792)

(781)

1,397

3,323

Movement in net (debt)/cash over period

 

 

(864)

(3,727)

3,429

(148)

(482)

1,011

2,178

1,926

Source: Company sources, Edison Investment Research.


General disclaimer and copyright

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 £60,000 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 2022 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.

New Zealand

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

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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

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1185 Avenue of the Americas

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United States of America

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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

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

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 £60,000 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 2022 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.

New Zealand

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.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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