Newmont's Q1 Profits Surge 1,000% on Gold Price Increase

Newmont, the world's largest gold mining company, reported a significant surge in profits for the first quarter of the year, far exceeding market expectations. The company's net income for the quarter was $19 billion, a nearly 11-fold increase from the $1.79 billion reported in the same period last year. The adjusted earnings per share reached $1.25, surpassing analysts' expectations of $0.90. Despite an 8.3% decrease in gold production, the soaring gold prices drove the company's profits higher.

Newmont's average gold price for the quarter was $2,944 per ounce, an 11% increase from the previous quarter and a 41% increase from the same period last year. This price surge was enough to offset the decrease in production. The company's first-quarter gold production was 1.54 million ounces, down from 1.68 million ounces in the same period last year.

Newmont's CEO, Tom Palmer, attributed the strong financial performance to the rising gold prices, which have been driven by geopolitical concerns, strong central bank purchases, and inflationary pressures. Palmer noted that while trade tensions and tariffs on imports such as steel and aluminum have not directly impacted Newmont, the company is closely monitoring the situation. He also mentioned that the company's geographic diversity and long-term contracts provide some buffer against potential cost increases, and that recent declines in oil prices could help lower energy costs for miners.

Newmont's asset divestment strategy has also contributed to its strong financial performance. The company completed its asset divestment plan this month, generating approximately $43 billion in total proceeds, far exceeding its initial target of divesting small mines and development projects. These sales include more than $25 billion in tax-free cash proceeds expected to be received in the first half of the year. The company acquired Newcrest, an Australian-based mining company, for $171.4 billion in 2023 and announced in February 2024 that it would divest some non-core assets and reduce its workforce to cut debt. As of March 31, the company's debt stood at $32.2 billion.

Despite the decrease in production, Newmont's first-quarter free cash flow reached a record $12 billion. The company is on track to meet its full-year guidance, including approximately 5.9 million ounces of gold production, down from 6.85 million ounces in 2024. Newmont's strong financial performance in the first quarter is a testament to its ability to navigate a challenging operating environment and capitalize on rising gold prices.