Newmont has been plagued by a number of issues.

Firstly, integrating Newcrest, always difficult to do in a period of high inflation, with costs moving around.

Secondly, handling the aftermath of negative opinion, which thinks that NEM overpaid for NCM. You can see the acquired assets, below, and how the market values it.

The strategic rationale for the deal continues to make sense to us; the world’s best gold assets in the safest jurisdictions, with plenty of synergies available.

That said, at the best of times NEM doesn’t have a great track record of consistent profits, and integrations and synergy extractions can be hard.

Strikes and equipment downtime didn’t help, but at least some of that industrial action has finished.

More broadly, some of the other issues, including wildfires and the weather are, hopefully, one-offs.

NEM’s grades are stable

But production issues aside, perhaps the biggest issue has been that steady escalation in cost. The gold price might have gone from $1600 to $2000oz, but cash costs went from $1000oz to $1400-$1500oz.

Looking forward, management outlines a fairly rosy view of increased production, + asset disposal of some of the higher cost non-core mines (6 to be sold) and, when combined with operational improvements + synergies, is meant to see the AISC drop to ~$1200.

Obivously, that would be quite transformational if NEM can execute. The market remains highly skeptical, as suggested by the very first cab off the rank question on the Q&A call.

The 6 assets in sell sell-down should provide some useful catalysts, as and when that occurs, although this will take some time.

For now, we watch with interest.

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This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

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