Newmont (TSX:NGT,NYSE:NEM) released its Q1 results on April 25, saying it is on track to achieve guidance.
In Q1, the world's largest gold miner reported attributable gold production of 1.7 million ounces, up from the previous year's 1.3 million ounces. The company's shares rose as much as 13.57 percent on the news to hit US$43.84.
Emphasizing the strength of its Tier 1 gold and copper assets, Newmont said it generated US$776 million in cashflow from its operating activities during the period, net of working capital changes of US$666 million.
The company continues working to divest non-core assets and streamline its workforce to reduce debt following the completion of its approximately US$17 billion acquisition of Australian miner Newcrest in November.
"Given the strong gold price environment, we believe that future asset sales may prove well timed with respect to maximizing value received for these assets," National Bank of Canada Financial Markets analysts said.
Newmont highlights performance of Tier 1 assets
Newmont's Q1 performance demonstrated strong output across its managed Tier 1 assets.
Despite challenging conditions, the Tanami mine in Australia maintained solid production levels as planned, even amid heavy rainfall. The company said plant maintenance conducted during the quarter positions Tanami for improved production in the upcoming quarter, reflecting proactive operational management.
Similarly, Newmont's Boddington operation, also in Australia, successfully increased stripping activities in both the North and South pits, according to the planned schedule. The implementation of autonomous haul fleet technology contributed to enhanced material movement, driving operational efficiency at the site.
For its part, the Peñasquito mine in Mexico reported robust silver and lead production in the first quarter of the year, indicating strong operational performance. With gold production anticipated to be 60 percent weighted toward the second half of the year, Peñasquito's strategic planning remains on track.
Strong Q1 production at Ahafo in Ghana was attributed to the continued optimization of the processing circuit. Infrastructure improvements, such as the delivery of a girth gear, are set for replacement in May this year.
Australia's Cadia mine demonstrated exceptional performance by delivering the highest grades as planned. Ongoing progress on tailings expansion projects positions Cadia for sustained production growth in the future.
Lihir in Papua New Guinea advanced its full potential initiatives, aiming to generate over US$150 million in value. Preparations for an autoclave shutdown in Q3 aim to optimize production weighting for the first half of the year.
In addition to its strong operational performance, Newmont made significant strides in advancing key projects during the first quarter of the year. Its Tanami Expansion 2 project aims to enhance production efficiency and reduce operating costs. The construction of a 1.5 kilometer deep production shaft is underway, and the company expects it to reduce operating costs by approximately 30 percent through efficiency improvements.
The development of Ahafo North, a new mine with a 13 year life and an average annual production target of 300,000 ounces of gold, is also progressing steadily. Infrastructure construction and waste-stripping activities are advancing, with the company putting a strong emphasis on safety and productivity.
Lastly, Newmont's Cadia Block Caves project focuses on the development of two caves to recover 5.9 million ounces of gold reserves and 1.3 million tonnes of copper reserves.
Company on track to achieve 2024 guidance
The gold price took off during the first quarter, rising approximately 8.2 percent from January to March, enabling Newmont to realize higher prices per ounce compared to the previous year.
However, the company also faced challenges during the quarter, with operations at its Cerro Negro mine in Argentina suspended for investigation following the deaths of two workers on April 9.
Despite this setback, Newmont remained resilient, posting net income of US$0.55 per share on an adjusted basis, surpassing estimates of US$0.36 per share, according to LSEG data.
The company attributed part of its success to reduced costs, including lower contractor, diesel and energy expenses. Nonetheless, all-in-sustaining costs for gold production rose to US$1,439 per ounce from US$1,376 per ounce in the previous year, reflecting broader industry trends.
Looking ahead, Newmont is maintaining its 2024 production forecast of 6.9 million ounces of gold at an all-in-sustaining cost of US$1,400 per ounce.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.