Newmont Corporation NEM

NEM Senior Notes Offer - Size Does Matter

[HoneyBadger77]

Fitch Ratings - New York - 04 Mar 2024: Fitch Ratings has assigned an 'A-' rating to Newmont Corporation's proposed senior unsecured note issuance comprised of: $1 billion two-year notes and $1 billion 10-year notes. Proceeds of the new notes are to be used to repay the outstanding balance under the Newmont revolving credit facility and for general corporate purposes.

The ratings reflect Newmont's leading size, scale and operational diversification, relatively low jurisdictional risk, strong liquidity and modest leverage.

De-leveraging Portfolio Optimization:
Fitch believes Newmont's focus on tier one assets and projects will result in decreased net debt from proceeds from the sale of non-core assets, lower over-all cash costs, and optimization of maintenance and development capital spending. Fitch expects gross debt to decline to about $8 billion after the repayment of the new two-year notes and for net debt to decline to roughly $5 billion given the company's liquidity targets of a minimum $3 billion in cash and $4 billion in availability under its $4 billion revolving credit facility.

Read on....
Fitch Rates Proposed New Newmont Sr. Unsecured Notes 'A-' (fitchratings.com)

At a $2,300+ US gold price in 2024 /2025, expected by some Wallstreet analysts, and guiding to produce 6.9 million gold equivalent ounces in 2024, NEM could knock off at least another $1 Billion net debt (reducing net debt to $4 Billion) by 2025 YE.

NEM Institutional ownership is currently about 72% and Retail at about 27%.  Once institutions have all the retail shares they can get, the recent upward trend can continue.

The Feb 26th Morningstar PT of $45.77 US NEM / $61.27 CAD for NGT shares is probably not that unrealistic given that their estimate was calculated at about a $2,050 gold price.  NEM trades inverse to the S&P so if we get a good 10-15% correction in the S&P Newmont will run.   Are you ready? 

GLTA

HB77