Why Newmont (NEM) Is Up After Ghana Lease Renewal Triggers $100M Payment and Boosts Cash Proceeds

• Newmont Corporation announced that the Parliament of Ghana has ratified the renewal of the Akyem East Mining Lease, triggering a US$100 million payment from Zijin Mining Group as part of the divestiture of Newmont's Ghana operation and bringing total after-tax cash proceeds from the Akyem sale to approximately US$770 million.
• This milestone means Newmont expects to generate about US$3.1 billion in after-tax cash proceeds from its divestiture program in 2025, supporting debt reduction and capital returns to shareholders.
• We'll examine how the additional capital from the Akyem divestiture is set to influence Newmont's investment outlook and financial priorities.

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Newmont Investment Narrative Recap

To be a shareholder in Newmont, you generally need to believe in continued strong demand for gold as a store of value, and in Newmont’s ability to generate solid cash flow from its core assets. The recent ratification and payment for the Akyem divestiture boosts Newmont’s after-tax proceeds and strengthens its balance sheet, but does not materially alter the key near-term catalyst, delivering on production guidance from core mines, or the ongoing risk of cost escalation and declining grades at major operations.

Of the recent company announcements, the new share repurchase program of up to US$3,000 million ties directly into how Newmont intends to deploy the large proceeds generated from asset sales, signaling a focus on capital returns. However, this approach also underscores concerns that once the current pipeline of divestitures ends, the sustainability of future shareholder returns may depend more heavily on organic cash generation from remaining assets.

But while Newmont’s cash position is currently robust, investors should be aware of the contrast between strong capital returns today and the potential long-term impact if...

Read the full narrative on Newmont (it's free!)

Newmont's narrative projects $21.6 billion revenue and $6.3 billion earnings by 2028. This requires 1.6% yearly revenue growth and a $0.1 billion earnings increase from $6.2 billion today.

Uncover how Newmont's forecasts yield a $70.36 fair value, in line with its current price.

Exploring Other Perspectives

You are looking at 11 different fair value estimates from the Simply Wall St Community, ranging from US$38.50 to US$70.79 per share. Many participants focus on Newmont's exposure to declining grades and rising costs at its largest mines, opening the door for several alternative viewpoints on future performance.

Explore 11 other fair value estimates on Newmont - why the stock might be worth 44% less than the current price!

Build Your Own Newmont Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Newmont research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Newmont research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Newmont's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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