Newmont Whacked on Earnings Miss

Fortescue feels the inflation pinch while Northern Star matches expectations

October 24, 2024

The Pre-Start

  • Fortescue shipped 47.7Mt over the Q, with 1.6Mt from Iron Bridge. Hematite volume saw a 12% increase in C1 costs due to higher strip & inflation. Cash closed at US$3.4b (net debt of US$2.1b) (FMG)

  • Newmont produced 1.7Moz gold & 430koz gold equivalents ounces at an AISC of US$1,611/oz, generating US$1.6bn in operating cash & US$760m in free cash (NEM)

  • Northern Star sold 394koz (down 10% qoq) at an AISC of $2,082/oz (up 15% qoq), while maintaining guidance. Underlying free cash of $52m was generated, with net cash of $148m on the balance sheet (NST)

  • Regis produced 95koz at an AISC of $2,495/oz. Operating cash flow totalled $150m, with $50m invested in the business. Cash advanced $85m (RRL)

  • Sayona mined 240Kwmt (up 3%), with recoveries at 67% (down 1%) & production up 5% to 52Kdmt of SC5.3, selling at US$711/dmt. Cash closed at $104m (SYA)

  • Karoon Energy increased to 2.68MMboe, though lower sales meant revenue was down 32%. KAR will undertake another US$25m buyback (KAR)

  • Core Lithium closed with $61m in cash (down $26m), with its restart study on track for 2H FY25 (CXO)

  • Strike Energy finished the quarter with $45m in cash & $17m in undrawn debt while advancing its debt facility documentation (STX)

  • Mt Gibson sold 0.6Mwmt in a quarter that saw the main pit reconfigured, which led to just $5m in cash flow despite receiving an insurance claim of $27m (MGX)

  • Fenix exported 770Kwmt, with 346Kwmt coming from its 100% owned Iron Ridge. Cash retreated $5m to $72m after $21m was spent on growth (FEX)

  • Antipa released a scoping study update over Minyari, targeting a 10-year, 3Mtpa operation with 130kozpa of output at a $1,721/oz AISC & $306m in capex. leading to an NPV7 of $834m & a 52% IRR (AZY)

  • Metals X had a record quarter at Renison producing ~2.9kt tin-in-con (MLX 50% share) at ~US$27k/t Sn AISC, closing the quarter with $197.5m cash (MLX)

  • Lunnon Metals finished the quarter with $21.1m cash, with more drilling at Lady Herial and other gold prospects planned for Dec’ 24 quarter (LM8)

  • Collective Mining shared a 517m @ 1.97g/t AuEq from 311m hit, including 57m at 8.18g/t AuEq from 811m, from its Guayabales project in Colombia (CNL.T)

  • Bowen Coking Coal’s costs reduced while it delivered 770Kt ROM, selling 444Kt of saleable coal. Quarterly EBITDA was a $1.3m loss (BCB)

  • CZR Resources’ cash balance is looking skinny while it still awaits FIRB approval for the sale of its Robe Mesa iron ore asset (CZR)

  • Magnetic finished the quarter with $6.6m cash, with feasibility study workstreams for its Lady Julie gold project continuing to progress (MAU) Hopefully they’ll declare a reserve in this study!

High Grade It

  • ASIC confirmed its launched a probe into MinRes’ decade-long ‘tax dodge’ (AFR)

  • First Quantum appointed Jiangxi’s Hanjun Xia to its board after reaching a standstill agreement with its 2nd largest shareholder earlier this year (Bloomberg)

  • Freeport is in talks with the Indonesian gov’t to extend its licenses to export copper con as a fire has disrupted its smelter operations (Bloomberg)

  • US-led Minerals Security Partnership has backed a new rare earths project, operated by Serra Verde Group, in Brazil (FT)

  • Gold eased overnight while zinc moved into backwardation after various mine issues disrupted supply (MiningNews)

  • Safe-haven gold hits record high on global uncertainties (Reuters)

  • Newmont’s shares plunged 7% in postmarket trading after reporting quarterly earnings that fell short of expectations (Bloomberg)

  • Fleet Space and Rio Tinto will partner to explore for lithium in Argentina (CB)

  • NextEra Energy is conducting studies & speaking with regulators about the possible restart of its Duane Arnold nuclear power plant in Iowa (Reuters)

  • The CSIRO says it is prepared to reconsider its estimate that nuclear power would cost up to twice as much as that generated by firmed renewables (AFR)

  • The US has reportedly asked Group of Seven allies to consider sanctions on Russian palladium and titanium (Bloomberg)

Wheelin’ n Dealin’

  • First Quantum is in talks with potential partners for its Zambian assets, including Saudi’s Manara Minerals, the Canadian miner said (Reuters)

  • Mike Henry’s African adventure raises talk of another BHP bite at Anglo-American (Australian)

  • Horizon Minerals is poised to move on Poseidon, whose Black Swan mill could solve HRZ’s processing conundrum (MiningNews) it is interesting to see, this will be the 2nd nickel plant proposed to be repurposed to process gold (after Medallion’s option with IGO)

Rattlin’ the Tin

  • Li-FT Power announced a C$21m private placement, with an unnamed strategic investor making the entire investment (LIFT.T)

  • Image Resources entered a US$20m offtake prepayment facility for its heavy mineral concentrate with Chinese partner, Natfort for the Atlas project (IMA)

  • Lotus upsized its placement and ended up taking in A$130m for Kayelekera while retracting scoping study production targets (LOT)

  • Tolu Minerals received firm commitments for a $26.7m placement at 80c (TOK)

Word on the Decline

  • Word on the Decline is that MinRes’ chair, James McClements, has been fronting major MinRes shareholders without the presence of Chris Ellison

  • We have heard rumours that he may be having some time off…

Do you have some Word on the Decline? Reply to this email or shoot a message to [email protected] directly. We will always take your privacy seriously.

In the Weeds

  • MinRes scandal an acute credibility test for Justin Langer (AFR op-ed)

  • Producing lithium is slow and dirty. Is there a fix? (Bloomberg)

  • An interesting podcast with Kuppy on all things macro (YouTube)

  • Global copper rush draws investors to Argentina’s untapped deposits (FT)

  • Chris Ellison and Richard White should stand aside (AFR op-ed)

  • Africa’s EV revolution has two wheels not four (Economist)

  • China's rally continues despite scepticism (Bloomberg)

  • Things to think about in mining & exploration #2 (Rene Sterk)

  • Fortescue boss a leader of church group against homosexuality (AFR)

  • L1 Capital’s Q1 market commentary (L1)

L1 Quarterly

L1 gold sector analysis

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Today’s Top Tweet

This one slide is 95% of what you need to understand about the financial markets-side of our industry. If only the geology & mining side was as easy to grasp!

Devil’s in the Detail

Admittedly we have spent very little time looking at Newmont but taking a skim at their results today, the declining production at Boddington from lower ore grades really stands out.

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