Newmont Corporation has declared a third-quarter dividend of $0.25 per share.
Concerning its third quarter 2024 results, Newmont President and CEO Tom Palmer said: “In the third quarter, Newmont delivered 2.1 million gold equivalent ounces and generated $760 million in free cash flow from our world-class portfolio.”
He added: “We continue to make meaningful progress on our non-core divestment program with the two transactions announced in the quarter, which are expected to deliver up to $1.5 billion in combined gross proceeds. Our divestiture progress and strong free cash flow generation have positioned us to continue reducing debt and repurchasing shares, creating significant and lasting value for our shareholders.”
Highlights of Q3 2024 results:
Announced an agreement to sell the Akyem mine in Ghana for up to $1 billion in cash, as well as an agreement to divest the Telfer mine and 70 per cent interest in the Havieron project in Western Australia for up to $475 million of gross proceeds
Continue to expect to receive at least $2 billion in gross divestiture proceeds from high-quality, non-core asset sales, in addition to the 527 million dollars in cash already received from other investment sales since the beginning of 2024
Since the last earnings release, repurchased 9.4 million shares at an average price of $53.16 for a total cost of $500 million, of which $198 million was repurchased during the third quarter2; $750 million of share repurchases completed since the program announced in February 2024
Newmont’s Board authorised an additional $2 billion share repurchase program to be executed at the Company’s discretion, utilising open market repurchases to occur from time to time throughout the next 24 months
Delivered $786 million in total returns to shareholders through share repurchases and dividend payments2; declared a dividend of $0.25 per share of common stock for the third quarter of 20244
Since the last earnings release, reduced nominal debt by $233 million for a cash cost of $210 million, of which $150 million was purchased during the third quarter and $83 million was purchased in October 2024; $483 million of debt retired year-to-date in 2024
Produced 1.7 million attributable gold ounces, primarily driven by the production of 1.4 million gold ounces from Newmont’s Tier 1 Portfolio5, as well as 430 thousand gold equivalent ounces (GEOs)6 from copper, silver, zinc, and lead, including 37 thousand tonnes of copper
Generated $1.6 billion of cash from operating activities, net of working capital changes of $(209) million; reported $760 million in Free Cash Flow
Reported Net Income of $924 million, Adjusted Net Income (ANI) of $0.81 per diluted share and Adjusted EBITDA of $2.0 billion
Achieved $500 million annual synergy run-rate following the Newcrest acquisition, reaching Newmont’s commitment more than a year ahead of schedule
Positioned to meet Newmont’s 2024 production guidance; expect to deliver attributable production of 1.8 million gold ounces at an All-In Sustaining Cost (AISC) of $1,475 per ounce in the fourth quarter
Partnered with MKS PAMP to launch a traceable mine-to-market gold bar; for sale through the largest U.S. wholesaler, providing consumers direct access to Newmont’s gold and demonstrating a commitment to transparent sourcing
The Institute for Economic Affairs (IEA) says the planned sale by US-based Newmont Company of its Akyem Gold Mine Project in Ghana to China’s Zijin Mining Group for US$1.0 billion is “flawed in several respects, inimical to Ghana’s interest and unacceptable.”
In a statement, the IEA notes that the project lease was signed between the Ghana Government and Newmont on 19th January 2010 and has an expiry period of 15 years, i.e. valid until 19th January 2025.
According to the terms, the lease is transferable within the duration period, subject to mutual agreement between the Government and Newmont.
The lease is also subject to extension after its expiry date, by mutual agreement.
In the IEA’s assessment, the lease has not yet expired and, therefore, “any decision by Newmont to sell the mine must be on a transfer basis and must be for the unexpired term only and subject to Government agreement.”
“At the end of the expiry period, Newmont is obliged to hand over the mine back to Government, the truthful owner of the gold under the assigned land. Any company that wants to operate the mine after the expiry date of the lease must sign a new agreement with the Government. As far as the IEA is aware, Newmont and the Government have not reached any agreement for the mine to be transferred to Zijin for the unexpired term of the lease, i.e. up to 19th January 2025,” the statement noted.
The IEA said it is also not aware that Newmont has evoked the extension clause and that the Government has agreed to such an extension.
“The IEA wishes to point out that apart from Newmont, no other company has an original locus or right in the extension of the Lease.”
The IEA asserts that selling the company to a foreign interest undermines the local investment drive.
“The IEA has learned that some Ghanaian entities also bid for the mine, but were allegedly outbid by Zijin. Allowing a foreign company to take over the mine would, however, be contrary to the President’s own position as he stated in his State of the Nation Address (SONA) in February this year: ‘We will engage with Newmont to give priority to Ghanaian investors who will want to acquire this mine to ensure that our mineral resources better benefit the Ghanaian people.’”
“The question is: what has changed now for the President to set aside his own principle and reject Ghanaian investors in favour of a foreign company?” it asked, emphasising: “The Akyem Gold Mine Lease itself was flawed at its inception in several respects. In particular, the royalties and taxes payable by Newmont were not appropriately quantified as is expected of such agreements.”
Moreover, the IEA said the agreement “is not materially different from other colonial-type agreements that cede Ghana’s mineral rights to foreign companies on a concession basis, enabling them to keep the lion’s share of the products, while Ghana receives only paltry sums as royalties and taxes.”
“The IEA wishes to state categorically that the purported sale by Newmont of the Akyem Gold Mine to Zijin is unjustified and legally flawed and must, therefore, not be ratified by Parliament. Further, if Newmont wishes to sell the mine, it must sell it to Ghanaian investors so that the wealth generated would remain in Ghana for the development of the country,” the IEA proposed.
It said: “Should it be necessary, the Government should team up with the private sector under a public-private partnership (PPP) programme to purchase it,” adding: “Using the reported annual average production figure of 11.4 tonnes of gold by the Akyem Mine (equivalent to 402,123 ounces) and an average world market price of US$2,600 per ounce for gold, the IEA projects annual average yields of US$1.05 billion.”
“This is the amount that would accrue to prospective Ghanaian owners—and the country—per year. Allowing Zijin to buy the mine for US$1.0 billion, which would accrue to Newmont, and presumably allowing Zijin to pay only royalties and taxes to Ghana, would, therefore substantially short-change the country,” the Institute asserted.
In its analysis, the IEA notes that “the deal cannot, therefore, be said to be in the economic interest of the country, and must, therefore, be rejected.”
“The IEA wants to draw attention to the fact that even Canada, where Zijin is also seeking to invest in the domestic critical minerals sector, and planning initially to buy a 15% stake in Canadian copper company, Solaris Resources, has decided to limit Zijin’s stake in the interest of Canadian national security.”
It pointed out: “Canada is linking its national security interest here to foreign participation in its economy, particularly the critical mining sector. Ghana must take a cue from Canada and similarly protect its national security and economic interest.”
“The IEA wishes to make it clear that it is not against Zijin per se as an investor in the Ghanaian mining sector. The IEA is calling, as a matter of principle, for Ghana to maintain dominant ownership of its critical mining sector—and the economy as a whole— and thereby retain the associated wealth at home for the development of the country.”
Further, the stressed that “Ghana’s natural resources represent the low-hanging fruits for acceleration of the country’s development and eradication of its endemic poverty. To achieve these goals, Ghana should maximise the benefits from these natural resources. This can only be done by jettisoning colonial-type mineral contracts skewed in favour of foreign companies.” “The IEA wishes to reiterate that Ghana cannot afford to continue to sell its birthright cheaply to foreign companies—as it has been doing its entire history—only to descend on the companies’ capitals to beg for aid. President Paul Kagame of Rwanda could not have put it more eloquently when he said: ‘If the owners of natural resources go around begging, then you should know there’s something wrong with their minds.’ Ghana needs a complete paradigm shift in its mineral contracts by taking ownership of the minerals to create job opportunities, wealth and technical capacity development for Ghanaians.”
It said: “The United Nations Charter of Economic Rights and Duties of States (GA res. 3281(xxix), UN GAOR, 29th Sess., Supp. No. 31 (1974) 50 shows the way as it entreats countries to derive maximum benefits from their natural resources for their development. Ghana should not depart from this noble cause, but should rather exploit it fully to its advantage.”
It noted that the “usual excuse given by Ghanaian officials that the country lacks the requisite capital and expertise locally for exploiting its natural resources and, therefore, has to depend on foreign investors and compensate them accordingly is no longer tenable.”
It highlighted that “other countries with similar conditions as Ghana’s have been able to negotiate much better terms for the exploitation of their natural resources. Ghana can do likewise by negotiating more favourable production-sharing or service contracts. Ghana also needs to resource the Geological Survey Department to enable it to map out mineral deposits, which can be used as collateral to raise capital and hire the needed expertise to exploit them.” At the same time, the Institute said “steps must be taken to train local mining engineers so that they can provide the needed expertise to exploit Ghana’s natural resources using environmentally friendly means.”
Finally, the IEA proposed the amendment of Article 257(6) of the Constitution that vests Ghana’s natural resources in the President on behalf of, and in trust for, the people, which, it says, “seems to give him a carte blanche to sign the resources away at will,” insisting: “The natural resources should rather be vested in the state and every contract should require Parliamentary ratification as per Article 268(1) of the Constitution.”
Secondly, the IEA suggested the introduction, in the Constitution or the Minerals and Mining Act, 2006 (Act 703), of a provision that prohibits the Government from signing contracts above a specified monetary value six months to the end of their four-year term. “This will prevent incumbent administrations from signing eleventh-hour contracts in favour of their families, friends or cohorts, or for personal gain.”
Newmont Corporation has announced that it will sell its Akyem operation in Ghana to Zijin Mining Group Co., Ltd. under a definitive agreement, for cash consideration of up to $1 billion.
The sale is part of Newmont’s ongoing programme to divest non-core assets as the company makes a strategic shift to focus on its Tier 1 assets.
Under the terms of the agreement, Newmont is expected to receive cash consideration of $900 million upon closing.
A further $100 million is expected to be received upon the satisfaction of certain conditions.
Newmont said in a statement that proceeds from the transaction will support its capital allocation priorities, including strengthening the balance sheet and returning capital to shareholders.
“The sale of Akyem represents continued progress on the non-core asset divestiture program announced in February, supporting our focus on the Tier 1 assets in Newmont’s portfolio that will drive sustainable growth and the return of capital to shareholders,” saidTom Palmer, Newmont’s President and Chief Executive Officer.
“We believe the proposed transaction results in the greatest overall value for Newmont shareholders and is the best strategic fit for Akyem. We are confident that Akyem will continue to thrive under new ownership with long-term benefits for local stakeholders and surrounding communities. The successful completion of this transaction will strengthen our confidence in Ghana as a favourable mining jurisdiction and Newmont will continue to support the growth and development of the region including our development of Ahafo North.”
“In line with President Akufo-Addo’s address in February we ensured that our robust divestment process provided equal opportunity for all potential buyers, Ghanaian and international, to participate,” saidRahman Amoadu, Newmont Managing Director, Africa.
“Additionally, we have included the Minerals Income Investment Fund (MIIF) in the process in preparation for their potential investment in Akyem to further Ghanaian interest in the mine.”
The transaction is expected to close in the fourth quarter of 2024, contingent on the satisfaction of customary conditions precedent, including regulatory approvals. As a result, the transaction is not expected to have a material impact on Newmont’s 2024 outlook and the Company has not adjusted its non-core guidance for the year.
Newmont said it remains committed to Ghana including the investment of $950 million to $1,050 million of development capital in the Ahafo North gold mining project in the Ahafo region of Ghana.
In connection with the transaction, Citi acted as Newmont’s exclusive financial adviser, Treadstone Resource Partners acted as strategic adviser, and Davis Graham & Stubbs LLP and Reindorf Chambers acted as legal advisers.
In 2018, Newmont commissioned an influx study to determine the potential impact of migration on the Ahafo area
Newmont Corporation’s Ahafo North project has begun implementing an influx management plan, including the construction of a divisional police headquarters at Duayaw Nkwanta in the Ahafo region.
This initiative, valued at GHS 4.1 million (approximately US$250,000), aims to address anticipated changes in local infrastructure and social dynamics due to human migration following the construction and operation of the Ahafo North mine.
In 2018, Newmont commissioned an influx study to determine the potential impact of migration on the Ahafo area.
This study involved extensive consultations with host communities, governmental agencies, and development experts.
Based on the study’s recommendations, the company developed the Ahafo North influx management plan to meet the needs of the expected population increase.
The plan includes provisions for security infrastructure, health, water, and sanitation facilities.
The construction of the divisional police headquarters addresses the study’s security recommendations and aims to enhance safety in the Ahafo region to support economic activities.
Mr. Abdul Rahman Amoadu, Managing Director for Newmont’s business in Africa, stated: “Security remains an important enabler for development, and Newmont’s investment in the divisional police headquarters will help build the capacity of our police service to maintain law and order as we catalyse economic development through our investments.”
The Ahafo North project currently employs over 1,700 Ghanaians directly and indirectly through contractors and creates local procurement opportunities for Ghanaian businesses, particularly those within the project’s host communities.
