What explains Newmont's dramatic net profit turnaround in late 2024?

Newmont's dramatic net profit turnaround in late 2024 can be attributed to several key factors:

1. Increased Gold Production: Newmont reported a significant increase in gold production, which contributed to the improved financial performance. For instance, in Q4 2024, the company produced 1.9 million ounces of gold, an 9% increase from the same period in 2023. This production increase, coupled with higher metal prices, bolstered the company's revenue and profitability.
2. Higher Metal Prices: The price of gold reached new records, which benefited Newmont's financial performance. The company took advantage of the favorable metal prices to boost its revenues and net income. According to the company's 2024 Form 10-K report, the average realized prices for all metals were higher in 2024 compared to 2023, which contributed to the improved net income.
3. Cost Management: Newmont effectively managed its costs, which had a positive impact on its net profit. The company reported lower all-in sustaining costs (AISC) for its mines, which improved the overall profitability of its operations. For example, the AISC at the Ahafo mine was $1,072/oz, and at the Penasquito mine, it was $984/oz.
4. Strategic Divestitures: Newmont made strategic divestitures, such as the sale of non-core assets, which helped to streamline its operations and focus on more profitable assets. This strategic focus likely contributed to the improved net profit margins.
5. Debt Reduction: The company reduced its debt by $1.4 billion over the past year, which strengthened its financial position and allowed for strategic investments and shareholder returns. This debt reduction likely had a positive impact on the company's net profit by reducing interest expenses and improving overall financial health.

In summary, Newmont's dramatic net profit turnaround in late 2024 can be attributed to increased gold production, higher metal prices, cost management, strategic divestitures, and debt reduction. These factors combined to improve the company's financial performance and net income.