(Kitco News) - Newmont Corp. is focused on improving its cost structure and demonstrating the value of its portfolio after a year of significant changes, including a major acquisition and a divestment program, according to CEO Tom Palmer.
Speaking at the Future Minerals Forum in Riyadh, Palmer outlined the company's priorities for 2025 and beyond.
‘Really important year’
Palmer described 2024 as a "really important year" for Newmont. The company completed its acquisition of Newcrest, one of the largest deals in the mining industry, and also undertook a divestment program, selling six assets and raising approximately $4.3 billion. “Integration’s gone exceptionally well,” Palmer said, adding that lessons from the Goldcorp acquisition were applied.
The divestments allow the company to focus on "eleven managed operations and three projects in execution going forward”. One divestment is still in progress, the Porcupine operation.
The company's 2024 was a year of "integration, rationalization and transition" while 2025 will be focused on "safety, cost and productivity."
Financial strategy
Newmont is using the proceeds from its divestments to strengthen its balance sheet and return cash to shareholders, according to Palmer. The company aims to have $8 billion in debt, $3 billion in cash, and $5 billion in net debt. Newmont has also increased its share buyback program to $3 billion.
Cost Pressures
Palmer acknowledged that Newmont's all-in sustaining costs are "higher than we like them." The company is investing in its operations to improve margins, including "long-life assets" such as Lihir, Cadia, and Brucejack. Newmont is also investing in laybacks at its Boddington and Peñasquito mines, and is building a new mine in Ghana, with first gold production expected later this year.
"The number of investments we're making in our business today will improve our cost profile, improve our margins over the medium and long term," Palmer said.
Palmer said that Newmont is aiming to reduce its cost base by "at least a couple hundred dollars."
Future Outlook
Looking ahead to 2025, Palmer said that Newmont's priorities include completing its divestment program, achieving zero fatalities, and hitting milestones on its development projects. The company will also focus on delivering on its commitments around "safety, cost, and productivity".
Palmer also addressed the disconnect between gold prices and gold equities, stating that the industry needs to "demonstrate that we can manage our business well, deliver good returns, and deliver value for our shareholders."
He added that the company's portfolio of tier-one operations "should be able to be resistant to some of those traditional pressures.”
Newmont is not currently looking to acquire other assets, according to Palmer. "We have assembled the best portfolio of tier-one gold assets in the industry," he said, adding that the company's focus is on "demonstrating the value that comes from that set of operating assets" and developing its existing projects.
Special thanks to our sponsor, the Future Minerals Forum (FMF), for making this coverage possible. Visit https://www.futuremineralsforum.com/ to learn more.