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Newmont Corp (NEM.N), opens new tab on Thursday beat analysts’ estimates for fourth-quarter profit and the world’s largest gold miner will divest six non-core assets as well as trim its workforce to cut debt following its $17.25 billion purchase of Newcrest.
The divestment proceeds will partly help meet the company’s target of near-term debt reduction of $1 billion. Total debt was $8.8 billion, at the end of 2023.
As part of its transformation strategy, the company said it would focus on growing its tier-1 assets.
“A key part of our tier-1 definition is the jurisdictions in which we choose to mine and a key part of the value proposition for acquiring Newcrest was consolidating our position in Canada and Australia,” Newmont’s CEO Tom Palmer told Reuters.
The assets being divested include its Eleonore mine in Quebec and Porcupine mine in Ontario, along with two non-core projects including the Coffee mine in Yukon in Canada and Newcrest’s Havieron mine in Western Australia.
“A big part of our commitment is to deliver $100 million of free cash flow by bringing Newmont and Newcrest together…there is a reduction in headcount in order to achieve those synergies,” Palmer said.
Meanwhile, higher production and gold prices helped the company post an adjusted net income of 50 cents per share for the three months ended Dec. 31, beating estimates of 46 cents, per LSEG data.
Gold production rose 6.75% on higher output at nearly all of the company’s and Newcrest’s mines.
All-in-sustaining cost for gold, an industry metric that reflects total expenses associated with production, rose to $1,485 per ounce from $1,215 a year earlier.
The company expects this to fall to $1,400 per ounce in 2024.
Newmont returned $1.4 billion to shareholders in 2023, compared to $1.7 billion in 2022. It now aims for a $1 billion share repurchase program over the next 24 months.
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