Newmont, the world's largest gold mining company, saw its stock price soar 12.46% after releasing its financial report on Thursday, ranking first among S&P 500 constituent stocks.
The significant increase in international gold prices since mid February this year is a key boost to Newmont's financial report. In just two months, the price of this yellow metal skyrocketed from $2000 per ounce to $2400.
(Spot gold price, source: Trading View)
The performance shows that the sales in the first quarter of this year reached 4.023 billion US dollars, compared to 2.679 billion US dollars in the same period last year, with gold sales rising from 2.3 billion US dollars to 3.3 billion US dollars. The gold production in the previous quarter also increased from 1.3 million ounces last year to 1.7 million ounces.
In terms of core operational indicators that mining investors are highly concerned about, Newmont disclosed that the average selling price of gold in Q1 was $2090 per ounce, which is $136 higher than the average price in 2023.
On the cost side, Q1's CAS indicator (sales applicable costs, including direct mining costs, on-site management expenses, and some indirect costs such as mine maintenance) is $1057 per ounce. The more comprehensive AISC indicator (reflecting all costs required to maintain the current production level, including CAS and general administrative expenses, maintenance capital expenditures, exploration, evaluation, and a series of costs) is $1439.
(Source: Newmont Financial Report)
Therefore, in the first quarter, Newmont's adjusted net profit reached $630 million, nearly half of last year's full year profit, equivalent to a profit per share of $0.55, far exceeding the market's expectation of $0.36.
For 2024, the company maintains its core business guidelines, with gold production expected to reach 6.9 million ounces this year, while AISC is at $1400 per ounce.
In addition to the continuous increase in its main business, Newmont has also announced a "leverage reduction" plan to divest non core assets and lay off employees. The company completed a nearly $17 billion acquisition of Australian mining company Newcrest in November last year. The company disclosed in its financial report that it has already received $105 million in synergies in its transaction with Newcrest, and plans to achieve the goal of $500 million in synergies annually by the end of 2025.
During the earnings conference call, Newmont CEO Tom Palmer revealed that the company has begun the formal (sale) process for six non core assets, and there is now a high level of market interest.
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