Newmont Corporation (NEM), a leading global gold producer, delivered a solid third-quarter performance, exceeding analysts’ expectations on revenue and reporting robust gold production. The company reported GAAP earnings of 76 cents per share, surpassing the consensus estimate, on a quarterly revenue of $4.605 billion, which beat the anticipated $4.568 billion.
Newmont’s success was fueled by its strong production figures. The company produced 1.7 million attributable gold ounces, primarily driven by 1.4 million ounces from its Tier 1 portfolio. Additionally, Newmont generated 430,000 gold equivalent ounces (GEOs) from copper, silver, zinc, and lead, including a substantial 37,000 tonnes of copper. Despite the impressive performance, Newmont’s shares dipped by 5.01% in after-hours trading on Wednesday, reaching $54.85, according to Benzinga Pro.
The company’s All-In Sustaining Cost (AISC) per ounce rose by 3% to $1,611, primarily due to higher cash costs (CAS). This increase, however, was offset by a 7% jump in the average realized gold price to $2,518 per ounce compared to the previous quarter.
Tom Palmer, Newmont’s President and CEO, expressed satisfaction with the company’s performance, highlighting its strong free cash flow generation of $760 million from its world-class portfolio. Palmer also emphasized the company’s commitment to its non-core divestment program, with two transactions announced in the quarter expected to generate combined gross proceeds of up to $1.5 billion. The success of this program will allow Newmont to further reduce debt and repurchase shares, ultimately creating long-term value for its shareholders.
Looking ahead, Newmont anticipates the fourth quarter to be its highest production quarter, driven by improved grades at its Peñasquito and Tanami mines, improved throughput at Lihir after the expected completion of planned autoclave maintenance, and continued progress from its non-managed joint venture operation at Nevada Gold Mines. The company remains confident in its ability to meet its 2024 production guidance, projecting attributable production of 1.8 million gold ounces at an AISC of $1,475 per ounce in the fourth quarter.
While Newmont’s strong earnings results are encouraging, the after-hours decline in share prices may indicate concerns among investors about potential market headwinds or future economic uncertainties. This emphasizes the complex dynamics at play in the gold market and the importance of careful analysis when making investment decisions.