Newmont reports record cash flow as gold production drops 11% in Q4

18 February 2021

Records in the gold mining sector keep breaking with the world's largest gold producer, saying that it generated recording cash flow in 2020.

Thursday, ahead of the North American Trading session, Newmont Corp reported adjusted net income for the fourth quarter of $856 million or $1.06 per diluted share, compared to $410 million or $0.50 per diluted share in the prior year. Earnings significantly beat expectations.Adjusted net income for the year was $2,140 million or $2.66 per diluted share, compared to $970 million or $1.32 per diluted share in the prior year, the company said.

The increased earnings come as the company reported a drop in gold production. The company said that COVID-19 restrictions impacted its production. Newmont said that it produced 1.630 million attributable gold ounces in the fourth quarter, down 11% from the fourth quarter of 2019.However, the company said that it was able to meet its full-year guidance. Newmont said that it produced 5.905 million ounces in 2020, down 6% compared to 2019.Although production was down, higher gold prices helped Newmont generate record cash flow for the year. The company said that it generated $4.9 billion of cash from continuing operations and $3.6 billion of free cash flow.

The company is returning some of its cash hoard back to investors. It declared a fourth-quarter dividend of $0.55 per share, an increase of 38% over the prior quarter. For 2020 the company saw its dividend grow to $1.45 per share.The company also completed its 2020 $1 billion share-repurchase program and recently announced a new $1 billion share-repurchase program.

"In 2020, Newmont achieved record performance including $3.6 billion of free cash flow and ending the year with over $5.5 billion of consolidated cash. These results enable Newmont to lead the industry in shareholder returns, invest in organic growth and maintain financial flexibility," said Tom Palmer, president and Chief Executive Officer, in a statement. "While generating record value for shareholders, we also achieved record safety performance with the lowest injury rate in Company history. As we complete our 100th year, we will remain focused on delivering superior operational performance whilst creating value and improving lives through sustainable, responsible mining."

While Newmont showed strong earnings for the fourth quarter and 2020, the company also noted that costs were rising. The company's all-in-sustaining-costs (AISC) totaled $1,043 per ounce, up 10% compared to last year.  For the year, AISC totaled $1,045 per ounce, up 8% from 2019.The company said that it ended the year with $5.5 billion of consolidated cash and approximately $8.5 billion of liquidity.

Source: https://www.kitco.com/news/202