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13. Newmont Corporation (NYSE:NEM)

Number of Hedge Fund Investors In Q2 2024: 61

Sector: Materials

Newmont Corporation (NYSE:NEM) is a global gold miner with operations in the Americas and Australia. It is one of the biggest gold mining firms in the world. As a result, Newmont Corporation (NYSE:NEM)’s hypothesis depends on the firm’s ability to grow and maintain gold output and simultaneously keep costs low. Any under-performance on either of these fronts translates into share price weakness as while lower costs are mitigated by margin erosion effects of lower volumes, high costs mean the firm can incur losses even if volumes are sizable. These factors were evident following Newmont Corporation (NYSE:NEM)’s third-quarter earnings, following which the shares dropped by a painful 14.70%. This was because the firm’s costs jumped by 12.9% to $1,611 per ounce and led to investor pessimism despite the fact that Newmont Corporation (NYSE:NEM) grew production by 29.2% to 1.67 million ounces and beat analyst estimates of 1.64 million ounces. The firm also has access to 30 billion pounds of copper reserves which could position it well to benefit from rising electrification.

Newmont Corporation (NYSE:NEM)’s management commented on the crucial topic of costs during the Q3 2024 earnings call:

“All in sustaining costs for the fourth quarter are expected to be approximately $14.75 an ounce, which represents an 8% reduction compared to the third quarter. This favorable decline is expected to be driven by higher gold production volumes and will be slightly offset by higher sustaining capital reinvestment, primarily anticipated at Nevada Gold Mines based on the run rate through the third quarter, and Cadia to remedy and expand the current tailings facilities as Natascha described.”