Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the
Company) today announced full year and fourth quarter 2019
results.
2019 highlights
- Assembled industry-leading portfolio of assets with the deepest
project pipeline in top-tier jurisdictions after successfully
completing two historic transactions
- Produced 6.3 million attributable ounces of gold* and reported
CAS* of $721 per ounce and AISC* of $966 per ounce, in line with
the Company’s full year guidance
- Delivered $2.9 billion of GAAP net income and adjusted EBITDA*
of $3.7 billion
- Generated $2.9 billion of cash from continuing operations and
Free Cash Flow* of $1.4 billion
- Reported industry-leading 100.2 million ounces of Gold Mineral
Reserves
- Delivered four projects on four continents on-time and within
budget: Tanami Power in Australia, Borden in Canada, Ahafo Mill
Expansion in Africa, and Quecher Main in Peru
- Approved Tanami Expansion 2 project to extend mine life and
increase profitable production
- Maintained investment-grade balance sheet with $2.2 billion of
consolidated cash and a leverage ratio of 1.2x net debt to pro
forma adjusted EBITDA*
- Recognized for industry-leading ESG performance: ranked as top
gold company in DJSI for 5th consecutive year and as 3rd most
transparent company in S&P 500 by Bloomberg ESG Disclosure
score; recognized as top mining company on FORTUNE’s 2020 list of
World’s Most Admired Companies
Outlook**
- Stable production outlook of 6.4 million ounces in 2020, and
6.2 million ounces to 6.7 million ounces per year longer term
through 2024 with an improving costs base
- On track to realize $500 million per year of improvements in
2021, exceeding our commitment by approximately 40 percent
- Expect to realize $1.4 billion in cash proceeds in Q1 2020
through divestitures
- Announced plan to increase annual divided by 79 percent to
$1.00 per share; effective upon approval and declaration of Q1 2020
dividend in April 2020
*See corresponding footnotes provided on the following pages
below. **See cautionary statement at end of release regarding
forward-looking statements, including with respect to financial
outlook and expected dividends.
“In 2019, Newmont generated $1.4 billion in free cash flow from
the gold industry’s best portfolio of assets and we continued to
deliver on our promises by completing four projects on four
continents within budget,” said Tom Palmer, President and Chief
Executive Officer. “We returned $1.4 billion to shareholders
through dividends and share repurchases and as we enter our
centenary year, Newmont is well positioned with the industry’s
largest reserve base strategically located in top-tier
jurisdictions that enables us to sustain production and generate
robust cash flow across price cycles.”
Full Year 2019 Financial and Production Summary
- Net income: Delivered GAAP net income from continuing
operations attributable to Newmont stockholders of $2.9 billion or
$3.91 per diluted share and adjusted net income1 of $970 million or
$1.32 per diluted share
- EBITDA: Generated $3.7 billion in adjusted EBITDA1, an
increase of 45 percent from the prior year
- Cash flow: Reported consolidated cash flow from
continuing operations of $2.9 billion and free cash flow2 of $1.4
billion, an increase of 57 percent and 76 percent over the prior
year, respectively
- Gold costs applicable to sales (CAS)3: Reported CAS of
$721 per ounce, in line with the Company’s full year guidance
- Gold all-in sustaining costs (AISC)3: Reported AISC of
$966 per ounce, in line with the Company’s full year guidance
- Attributable gold production4: Produced 6.3 million
ounces of gold, an increase of 23 percent over the prior year and
in line with the Company’s full year guidance
- Portfolio improvements: Assembled industry’s best
collection of assets in top-tier jurisdictions with the acquisition
of Goldcorp Inc. (Goldcorp) and formation of the Nevada Gold Mines
(NGM) joint venture; successfully delivered four projects on four
continents with Tanami Power in Australia, the Borden mine in
Canada, Ahafo Mill Expansion in Ghana, and Quecher Main in Peru;
approved Tanami Expansion 2 and Autonomous Haulage at Boddington;
formed strategic partnerships in GT Gold, Prodigy Gold and Irving
Resources to fund exploration activities in Canada, Australia and
Japan, respectively; divested the Nimba iron ore project in Guinea;
entered into binding agreements to sell Red Lake in Canada and
investment holdings in Continental Gold; completed divestiture of
the Company’s 50 percent interest in Kalgoorlie Consolidated Gold
Mines (KCGM) in Australia.
- 2020 Outlook: Attributable production of 6.4 million
ounces, CAS of $750 per ounce and AISC of $975 per ounce, as
previously reported by the Company in January 2020
Fourth Quarter 2019 Financial and Production Summary
- Net income: Delivered GAAP net income from continuing
operations attributable to Newmont stockholders of $537 million or
$0.66 per diluted share; delivered adjusted net income1 of $410
million or $0.50 per diluted share, an increase of $0.10 compared
to the prior year quarter
- EBITDA: Generated $1.3 billion in adjusted EBITDA1, an
increase of 70 percent from the prior year quarter
- Cash flow: Reported consolidated cash flow from
continuing operations of $1.2 billion and free cash flow2 of $778
million, an increase of 63 percent and 64 percent over the prior
year quarter, respectively
- Gold costs applicable to sales (CAS)3: Reported CAS of
$691 per ounce, an increase of five percent over the prior year
quarter
- Gold all-in sustaining costs (AISC)3: Reported AISC of
$946 per ounce, an increase of 12 percent over the prior year
quarter
- Attributable gold production: Produced 1.83 million
ounces of gold, an increase of 27 percent over the prior year
quarter
Full Year and Fourth Quarter 2019 Results
Net income (loss) from continuing operations attributable
to Newmont stockholders for the full year was $2,877 million or
$3.91 per diluted share, up $2,597 million from the prior year,
primarily due to the $2,390 million gain recognized on the
formation of NGM, as well as higher production from the acquired
Goldcorp assets and higher average realized gold prices. Net income
from continuing operations attributable to Newmont stockholders for
the quarter was $537 million or $0.66 per diluted share, an
increase of $540 million from the prior year quarter primarily due
to higher production from acquired assets and higher realized gold
prices.
Adjusted net income was $970 million or $1.32 per diluted
share for the full year, compared to $718 million or $1.34 per
diluted share in the prior year. Adjusted net income for the
quarter was $410, or $0.50 per diluted share, compared to $214 or
$0.40 in the prior year quarter. Primary adjustments to fourth
quarter net income include $(0.11) related to changes in the fair
value of investments, ($0.10) related to valuation allowances and
tax effects of adjustments, and $0.05 related to other charges
including reclamation and remediation charges, integration costs
and restructuring.
Revenue increased 34 percent to $9,740 million for the
full year and 45 percent to $2,967 million for the quarter,
compared to the prior year. These increases were primarily due to
new production from the acquired Goldcorp assets and higher average
realized gold prices.
Average realized gold price5 was 11 percent higher for
the full year at $1,399 per ounce and 20 percent higher for the
quarter at $1,478 per ounce compared to prior year. The average
realized price for copper was four percent lower for the full year
at $2.63 per pound, and five percent higher for the quarter at
$2.76 per pound, compared to the prior year. For the full year, the
average realized price for silver, lead and zinc were $15.79 per
ounce, $0.79 per pound and $0.80 per pound, respectively. For the
quarter, the average realized price for silver, lead and zinc were
$15.49 per ounce, $0.77 per pound and $0.78 per pound,
respectively.
Gold CAS increased 19 percent to $4,663 million for the
full year and 19 percent to $1,251 million for the quarter,
compared to the prior year, primarily due to additional costs from
the acquired Goldcorp assets. For the quarter, Gold CAS per ounce
increased five percent to $691 per ounce primarily due to higher
stripping ratios at Merian and Yanacocha and higher gold
price-driven royalties. For the full year, Gold CAS per ounce
increased by two percent to $721 per ounce primarily due to
unfavorable stripping and higher gold price driven royalties
partially offset by higher gold ounces sold and lower stockpile and
leach pad inventory adjustments.
Gold AISC increased six percent to $966 per ounce for the
full year and increased 12 percent to $946 per ounce for the
quarter, compared to the prior year, primarily due to higher gold
CAS per ounce and higher sustaining capital spend.
Attributable gold production6 increased 23 percent to
6.29 million ounces for the full year and 27 percent to 1.83
million ounces for the quarter, compared to prior year, primarily
due to new production from the Goldcorp assets and higher grade and
throughput from the Subika Underground and Ahafo Mill Expansion
projects, partially offset by lower production from KCGM.
Attributable gold equivalent ounce (GEO) production from
other metals increased to 624 thousand ounces for the full year
and 229 thousand ounces for the quarter, compared to prior year,
primarily due to new silver, lead and zinc production from
Peñasquito, partially offset by the classification of Phoenix
copper as a by-product following the formation of NGM. CAS from
other metals totaled $532 million for the full year and $208
million for the quarter. CAS per GEO increased 10 percent to $858
per ounce for the full year, primarily due to high unit costs at
Peñasquito. CAS per GEO decreased 4 percent to $791 per ounce for
the quarter, primarily due to higher gold equivalent ounces of
other metals sold and a favorable Australian dollar foreign
currency exchange. AISC per GEO increased 31 percent to
$1,222 per ounce for the full year and 21 percent to $1,171 per
ounce for the quarter, compared to the prior year, primarily due to
higher CAS per GEO, higher sustaining capital spend and higher
treatment and refining costs.
Capital expenditures7 increased 42 percent to $1,463
million for the full year and 60 percent to $430 million for the
quarter, compared to the prior year, primarily due to increased
sustaining capital for the Goldcorp assets and ongoing investment
in growth projects, including Quecher Main, Ahafo Mill Expansion,
Borden, Musselwhite Materials Handling, Tanami Expansion 2,
Yanacocha Sulfides and Ahafo North.
Consolidated operating cash flow from continuing
operations increased 57 percent to $2,876 million for the full
year and 63 percent to $1,208 million for the quarter, compared to
the prior year, primarily due to higher realized gold prices and
the inclusion of sales from the Goldcorp assets. Free cash
flow2 also increased to $1,413 million for the full year and
$778 million for the quarter, compared to the prior year, primarily
due to higher operating cash flow, partially offset by higher
capital expenditures.
Balance sheet ended the quarter with $2.2 billion of
consolidated cash and an investment-grade credit profile, issued
$700 million of 2.800 percent Senior Notes due 2029 and retired
$626 million of 5.125 percent Senior Notes due on October 1,
2019.
________________
1
Non-GAAP measure. See end of this release
for reconciliation to Net income (loss) attributable to Newmont
stockholders.
2
Non-GAAP measure. See end of this release
for reconciliation to Net cash provided by operating
activities.
3
Non-GAAP measure. See end of this release
for reconciliation to Costs applicable to sales.
4
Attributable gold production for the full
year 2019 includes 287,000 ounces from the Company’s equity method
investment in Pueblo Viejo (40%)
5
Non-GAAP measure. See end of this release for reconciliation to
Sales.
6
Attributable gold production for the full
year 2019 includes 287,000 ounces and for the fourth quarter 2019
includes 118,000 ounces from the Company’s equity method investment
in Pueblo Viejo (40%)
7
Capital expenditures refers to Additions
to property plant and mine development from the Consolidated
Statements of Cash Flows.
Corporate updates
- Goldcorp transaction: On January 14, 2019, Newmont
entered into a definitive agreement to acquire all outstanding
common shares of Goldcorp. On April 18, 2019, Newmont closed its
acquisition of Goldcorp following receipt of all regulatory
approvals and approval by Newmont’s and Goldcorp’s shareholders of
the resolutions at the shareholder meetings on April 11 and April
4, 2019, respectively, for total cash and non-cash consideration of
$9,456 million in a primarily stock transaction. The combined
company is known as Newmont Corporation, continuing to be traded on
the New York Stock Exchange under the ticker NEM and listed on the
Toronto Stock Exchange under the ticker NGT.
- Nevada Gold Mines Joint Venture: On July 1, 2019,
Newmont and Barrick Gold Corporation (Barrick) consummated the
transaction establishing Nevada Gold Mines LLC (NGM). NGM is owned
38.5 percent by Newmont and owned 61.5 percent and operated by
Barrick. The formation of NGM diversifies the Company’s footprint
in Nevada and allows Newmont to benefit from additional
efficiencies through integrated mine planning and processing. The
Company accounts for its interest in NGM using the proportionate
consolidation method, thereby recognizing its pro-rata share of the
assets, liabilities and operations of NGM. Fourth quarter 2019
EBITDA for NGM was $267 million and for the year ended 2019 was
$501 million. Attributable gold production was 366 thousand ounces
with CAS of $722 per ounce and AISC of $883 per ounce for the
fourth quarter 2019 and 710 thousand ounces with CAS of $712 per
ounce and AISC of $901 per ounce for the year ended 2019.
Projects update
Newmont’s capital-efficient project pipeline supports stable
production with improving margins and mine life. Near-term
development capital projects are presented below. Funding for
Tanami Expansion 2 and Musselwhite Materials Handling have been
approved and the projects are in execution. Additional projects not
listed below represent incremental improvements to production and
cost guidance.
- Tanami Expansion 2 (Australia)
secures Tanami’s future as a long-life, low cost producer with
potential to extend mine life to 2040 through the addition of a
1,460m hoisting shaft and supporting infrastructure to achieve
3.5Mt per year of production and provide a platform for future
growth. The expansion is expected to increase average annual gold
production by approximately 150,000 to 200,000 ounces per year for
the first five years beginning in 2023, and is expected to reduce
operating costs by approximately 10 percent. Capital costs for the
project are estimated to be between $700 million and $800
million.
- Musselwhite Materials Handling
(North America) improves material movement from Musselwhite’s two
main zones below Lake Opapimiskan. An underground shaft will hoist
ore from the underground crushers, reducing haulage distances and
ventilation costs. The Company expects the project to be fully
operational in mid-2020.
Outlook
Newmont’s outlook reflects steady gold production and ongoing
investment in its operating assets and most promising growth
prospects. The Company does not include development projects that
have not reached execution stage in its outlook which represents
upside to guidance.
Attributable production
Attributable gold production is expected to be stable at 6.2 to
6.7 million ounces across the five year period. The 2020 outlook of
6.4 million ounces increases from 2019 with a full year of
production from the acquired Goldcorp assets. Production is
expected to remain between 6.2 and 6.7 million ounces per year
longer-term through 2024 supported by a steady base from
Boddington, Tanami, Ahafo, Peñasquito, and the Company’s equity
ownership interest in the Nevada Gold Mines joint venture, which is
further enhanced by solid production from the Company’s nine other
operating mines and its equity ownership in Pueblo Viejo.
Regional production overview:
Australia
2020
2021
2022
Moz
1.2
1.2 - 1.4
1.3 - 1.5
2020: Full Potential at Boddington improves mining rates
and grade increases throughout the year with the stripping campaign
nearing completion in the South Pit and Tanami continues to deliver
solid performance.
2021-2022: Boddington reaches higher grade ore while
Tanami delivers steady performance.
Africa
2020
2021
2022
Moz
0.85
0.85 - 0.95
0.90 - 1.0
2020: A full year of production from the Ahafo Mill
Expansion is offset by mine sequencing in both the Subika and
Awonsu open pits, a change in mining method at Subika Underground
and lower grades at Akyem.
2021-2022: Subika Underground begins to deliver higher
tons and Subika open pit reaches higher grades, partially offset by
sequencing at Akyem.
North America
2020
2021
2022
Moz
1.7
1.6 - 1.8
1.5 - 1.7
2020: A full year of operations at Peñasquito, Éléonore
and Porcupine increase production. Peñasquito reaches higher grades
and Musselwhite is expected to reach normal production levels in
early October, partially offset by lower leach pad production at
CC&V.
2021: Musselwhite contributes a full year of operations,
Peñasquito continues in higher grade ore and achieves higher
throughput, and Porcupine benefits from higher grades in the Borden
underground and Hollinger open pit mines.
2022: Peñasquito is impacted by lower gold grade from
mine sequencing.
South America*
2020
2021
2022
Moz
1.3
1.1 - 1.2
1.0 - 1.1
*Includes Pueblo Viejo interest with ~375Koz in
2020 and 2021, and ~385Koz in 2022.
2020: A full year of production from Cerro Negro and
Pueblo Viejo is partially offset by Yanacocha depleting higher
grades at the Tapado Oeste pit and Merian transitioning to harder
rock.
2021: Cerro Negro transitions to lower grades as mining
concludes in the Eureka District and Yanacocha ramps down the oxide
mill.
2022: Merian enters a stripping phase partially offset by
higher grades at Cerro Negro.
Nevada Gold Mines (NGM)
2020
2021
2022
Moz
1.4
1.3 - 1.4
1.3 - 1.4
Production for the Company’s 38.5 percent ownership interest in
NGM.
Attributable co-product GEOs
2020
2021
2022
2023 - 2024
Moz
1.1
1.0 - 1.2
1.1 - 1.3
1.3 - 1.5
2020: A full year of production from Peñasquito is
partially offset by lower copper production at Boddington.
2021: Boddington copper production increases and
Peñasquito delivers steady production.
2022-2024: Peñasquito delivers higher silver and lead
production from the Chile Colorado pit, followed by higher silver
and zinc production from the Peñasco pit.
Gold cost outlook
- Costs improve throughout the five year period with continuing
Full Potential improvements and ongoing investment in profitable
projects.
- CAS is expected to be $750 per ounce for 2020 from lower
production in Africa and South America, partially offset by
improvements in North America with a full year of operations at
Peñasquito. CAS is expected to be between $650 and $750 per ounce
for 2021 and 2022, and between $600 and $700 per ounce in 2023 and
2024.
- AISC is expected to be $975 per ounce in 2020 from higher costs
in South America and Africa, partially offset by improved CAS in
North America. AISC is expected to be between $850 and $950 per
ounce in 2021 and 2022, and improves to between $800 and $900 per
ounce longer-term through 2024. Future Full Potential savings and
profitable ounces from projects that are not yet approved represent
additional upside not currently captured in guidance.
Regional cost overview:
Australia
2020
2021
2022
CAS/oz
$700
$575 - $675
$500 - $600
AISC/oz
$900
$775 - $875
$650 - $750
2020: CAS benefits from lower spend at Tanami for paste
fill, partially offset by increased stockpile processing at
Boddington. AISC includes increased sustaining capital spend at
Boddington to advance Autonomous Haulage and at Tanami for
ventilation.
2021-2022: Unit costs improve as Boddington production
increases.
Africa
2020
2021
2022
CAS/oz
$710
$700 - $800
$600 - $700
AISC/oz
$870
$850 - $950
$800 - $900
2020: CAS is higher than 2019 on lower production at
Akyem and Ahafo with stripping in the Subika open pit and the
change in mining method at Subika Underground. AISC is higher on
increased unit CAS partially offset by lower sustaining capital at
Ahafo.
2021-2022: CAS improves from higher production at Ahafo
with increased ore tons from Subika Underground and the end of
stripping in the Subika open pit. AISC increases in 2021 on higher
sustaining capital spend for tailings storage facilities at both
Ahafo and Akyem.
North America
2020
2021
2022
CAS/oz
$805
$700 - $800
$700 - $800
AISC/oz
$995
$850 - $950
$900 - $1,000
2020: Unit costs improve as Peñasquito delivers a full
year of production with Full Potential improvements and the removal
higher cost production from Red Lake, partially offset by lower
production at CC&V and higher costs at Musselwhite prior to
resuming full operations in October.
2021-2022: Unit costs improve with increased production
and the delivery of Full Potential improvements throughout the
region.
South America
2020
2021
2022
CAS/oz
$790
$700 - $800
$800 - $900
AISC/oz
$940
$850 - $950
$1,000 - $1,100
2020: Unit costs increase on lower production at
Yanacocha and from higher mine and milling costs at Merian from
harder rock, partially offset by Full Potential improvements at
Cerro Negro.
2021: Unit costs improve with lower operating costs at
Yanacocha from the end of Quecher Main stripping and ramping down
the oxide mill, partially offset by lower production at Cerro
Negro.
2022: CAS increases with Merian entering a stripping
campaign and Yanacocha production declining. AISC increases with
CAS and higher sustaining capital at Cerro Negro.
Nevada Gold Mines
2020
2021
2022
CAS/oz
$690
$600 - $700
$600 - $700
AISC/oz
$880
$800 - $900
$800 - $900
CAS & AISC for the Company’s 38.5 percent ownership interest
in NGM.
Attributable co-product costs per GEO
2020
2021
2022
2023 - 2024
CAS/GEO
$560
$550 - $650
$600 - $700
$450 - $550
AISC/GEO
$880
$900 - $1,000
$900 - $1,000
$750 - $850
2020: Unit costs improve driven by a full year of
production at Peñasquito.
2021-2022: Unit costs per GEO increase from mine
sequencing at Peñasquito, partially offset by higher copper
production at Boddington.
2023-2024: CAS per GEO improves on higher production at
Peñasquito and AISC per GEO improves on lower CAS and lower
sustaining capital spend.
Consolidated Capital
2020
2021
2022
2023
2024
Total ($M)
$1,600
$1,500 - $1,700
$1,200 - $1,400
$1,100 - $ 1,300
$900 - $1,100
Sustaining ($M)
$975
$900 - $1,100
$900 - $1,100
$900 - $1,100
$900 - $1,100
Development ($M)
$625
$500 - $600
$300 - $400
$100 - $200
$0 - $100
Sustaining capital remains steady, covering infrastructure,
equipment and ongoing mine development.
Development capital includes Tanami Expansion 2 in Australia,
Musselwhite Materials Handling in Canada, Subika Underground in
Ghana, underground development at Cerro Negro in Argentina,
expenditures related to the Company’s ownership interest in Nevada
Gold Mines, and to progress studies for future projects. Yearly
decreases reflect the Company’s approach to only including
development projects that have reached execution stage.
Consolidated expense outlook – Interest expense is
expected to be $300 million for 2020 from a full year of expense
related to the acquired Goldcorp debt. Investment in exploration
and advanced projects is expected to be $450 million in 2020 with a
full year of spend for the acquired Goldcorp assets. The 2020
outlook for general & administrative costs is expected to be
$265 million as synergies of $120 million are realized from the
Goldcorp transaction and depreciation and amortization is expected
to be $2,125 million.
Assumptions and sensitivities – Newmont’s outlook assumes
$1,200 per ounce gold price, $16 per ounce silver price, $2.75 per
pound copper price, $1.20 per pound zinc price, $0.95 per pound
lead price, $0.75 USD/AUD exchange rate, $0.77 USD/CAD exchange
rate, and $60 per barrel WTI oil price. Assuming a 35% incremental
tax rate, $100 per ounce increase in gold price would deliver an
expected $400 million improvement in attributable free cash
flow.
2020 Outlooka
2020 Outlook +/- 5%
Consolidated
Production
Attributable
Production
Consolidated CAS
Consolidated All-in Sustaining
Costsb
Consolidated Sustaining
Capital Expenditures
Consolidated Development
Capital Expenditures
Attributable Sustaining
Capital Expenditures
Attributable Development
Capital Expenditures
(Koz, GEOs Koz)
(Koz, GEOs Koz)
($/oz)
($/oz)
($M)
($M)
($M)
($M)
North America
1,675
1,675
805
995
335
60
335
60
South America
1,290
1,345
790
940
135
175
100
125
Australia
1,180
1,180
700
900
185
270c
185
270c
Africa
850
850
710
870
95
70
95
70
Nevada Gold Minesd
1,375
1,375
690
880
185
45
185
45
Total Golde
6,300
6,400e
750
975
975f
625
950f
575
Total Co-productsg
1,105
1,105
560
880
2020 Consolidated Expense Outlook ($M) +/-5% General &
Administrative
265
Interest Expense
300
Depreciation and Amortization
2,125
Advanced Projects & Exploration
450
Adjusted Tax Rateh,i
38%-42%
Federal Tax Ratei
29%-33%
Mining Tax Ratei
8%-10%
a
2020 outlook projections used in this
presentation are considered forward-looking statements and
represent management’s good faith estimates or expectations of
future production results as of February 20, 2020. Outlook is based
upon certain assumptions, including, but not limited to, metal
prices, oil prices, certain exchange rates and other assumptions.
For example, 2020 Outlook assumes $1,200/oz Au, $16/oz Ag, $2.75/lb
Cu, $1.20/lb Zn, $0.95/lb Pb, $0.75 USD/AUD exchange rate, $0.77
USD/CAD exchange rate and $60/barrel WTI; AISC and CAS estimates do
not include inflation, for the remainder of the year. Production,
CAS, AISC and capital estimates exclude projects that have not yet
been approved. The potential impact on inventory valuation as a
result of lower prices, input costs, and project decisions are not
included as part of this Outlook. Assumptions used for purposes of
Outlook may prove to be incorrect and actual results may differ
from those anticipated, including variation beyond a +/-5% range.
Outlook cannot be guaranteed. As such, investors are cautioned not
to place undue reliance upon Outlook and forward-looking statements
as there can be no assurance that the plans, assumptions or
expectations upon which they are placed will occur. Amounts may not
recalculate to totals due to rounding. See cautionary at the end of
this release.
b
All-in sustaining costs (AISC) as used in
the Company’s Outlook is a non-GAAP metric; see below for further
information and reconciliation to consolidated 2020 CAS
outlook.
c
Includes finance lease payments related to
the Tanami Power Project paid over a 10 year term beginning in
2019.
d
Represents the ownership interest in the
Nevada Gold Mines (NGM) joint venture. NGM is owned 38.5% by
Newmont and owned 61.5% and operated by Barrick. The Company
accounts for its interest in NGM using the proportionate
consolidation method, thereby recognizing its pro-rata share of the
assets, liabilities and operations of NGM.
e
Attributable gold production outlook
includes the Company’s equity investment (40%) in Pueblo Viejo with
~375Koz in 2020; does not include the Company’s other equity
investments.
f
Total sustaining capital includes ~$30
million of corporate and other spend.
g
Gold equivalent ounces (GEOs) are
calculated as pounds or ounces produced multiplied by the ratio of
the other metal’s price to the gold price, using Gold ($1,200/oz.),
Copper ($2.75/lb.), Silver ($16/oz.), Lead ($0.95/lb.), and Zinc
($1.20/lb.) pricing.
h
The adjusted tax rate excludes certain
items such as tax valuation allowance adjustments.
i
Assuming average prices of $1,400 per
ounce for gold, $16 per ounce for silver, $2.75 per pound for
copper, $0.95 per pound for lead, and $1.20 per pound for zinc and
achievement of current production and sales volumes and cost
estimates, we estimate our consolidated adjusted effective tax rate
related to continuing operations for 2020 will be between
38%-42%.
Three Months Ended December
31,
Years Ended December
31,
Operating Results
2019
2018
% Change
2019
2018
% Change
Attributable Sales (koz)
Attributable gold ounces sold
1,724
1,485
16
%
6,076
5,133
18
%
Attributable gold equivalent ounces
sold
264
61
333
%
621
238
161
%
Average Realized Price ($/oz,
$/lb)
Average realized gold price
$
1,478
$
1,233
20
%
$
1,399
$
1,260
11
%
Average realized copper price
$
2.76
$
2.62
5
%
$
2.63
$
2.74
(4
)%
Average realized silver price
$
15.49
$
—
—
%
$
15.79
$
—
—
%
Average realized lead price
$
0.77
$
—
—
%
$
0.79
$
—
—
%
Average realized zinc price
$
0.78
$
—
—
%
$
0.80
$
—
—
%
Attributable Production (koz)
North America
379
143
165
%
1,036
360
188
%
South America
277
208
33
%
997
671
49
%
Australia
393
381
3
%
1,431
1,523
(6
)%
Africa
290
229
27
%
1,065
850
25
%
Nevada
373
483
(23
)%
1,475
1,697
(13
)%
Pueblo Viejo (40%)1
118
—
—
%
287
—
—
%
Total Gold
1,830
1,444
27
%
6,291
5,101
23
%
North America
187
—
—
%
443
—
—
%
Australia
42
34
24
%
146
166
(12
)%
Nevada
—
22
(100
)%
35
70
(50
)%
Total Gold Equivalent Ounces
229
56
309
%
624
236
164
%
CAS Consolidated ($/oz, $/GEO)
North America
$
734
$
751
(2
)%
$
883
$
727
21
%
South America
$
671
$
562
19
%
$
646
$
660
(2
)%
Australia
$
693
$
725
(4
)%
$
734
$
709
4
%
Africa
$
628
$
581
8
%
$
597
$
645
(7
)%
Nevada
$
710
$
674
5
%
$
748
$
766
(2
)%
Total Gold
$
691
$
658
5
%
$
721
$
708
2
%
Total Gold (by-product)
$
644
$
643
-
%
$
697
$
687
1
%
North America
$
796
$
—
—
%
$
886
$
—
—
%
Australia
$
759
$
857
(11
)%
$
803
$
758
6
%
Nevada
$
—
$
749
(100
)%
$
750
$
845
(11
)%
Total Gold Equivalent Ounces
$
791
$
823
(4
)%
$
858
$
782
10
%
AISC Consolidated ($/oz)
North America
$
1,020
$
806
27
%
$
1,187
$
840
41
%
South America
$
846
$
655
29
%
$
814
$
804
1
%
Australia
$
899
$
879
2
%
$
908
$
845
7
%
Africa
$
833
$
736
13
%
$
791
$
794
-
%
Nevada
$
870
$
855
2
%
$
935
$
928
1
%
Total Gold
$
946
$
845
12
%
$
966
$
909
6
%
Total Gold (by-product)
$
954
$
835
14
%
$
977
$
895
9
%
North America
$
1,213
$
—
—
%
$
1,339
$
—
—
%
Australia
$
924
$
1,002
(8
)%
$
954
$
898
6
%
Nevada
$
—
$
892
(100
)%
$
894
$
1,035
(14
)%
Total Gold Equivalent Ounces
$
1,171
$
967
21
%
$
1,222
$
935
31
%
1
Represents attributable gold from the
Company’s equity method investment in Pueblo Viejo (40%). Income
and expenses of equity method investments are included in Equity
income (loss) of affiliates.
NEWMONT CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in millions except
per share)
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Sales
$
2,967
$
2,048
$
9,740
$
7,253
Costs and expenses
Costs applicable to sales (1)
1,459
1,104
5,195
4,093
Depreciation and amortization
613
336
1,960
1,215
Reclamation and remediation
115
67
280
163
Exploration
67
55
265
197
Advanced projects, research and
development
48
46
150
153
General and administrative
89
63
313
244
Impairment of long-lived assets
1
3
5
369
Other expense, net
56
—
295
29
2,448
1,674
8,463
6,463
Other income (expense):
Gain on formation of Nevada Gold Mines
24
—
2,390
—
Other income, net
161
(42
)
327
155
Interest expense, net of capitalized
interest
(84
)
(54
)
(301
)
(207
)
101
(96
)
2,416
(52
)
Income (loss) before income and mining tax
and other items
620
278
3,693
738
Income and mining tax benefit
(expense)
(129
)
(260
)
(832
)
(386
)
Equity income (loss) of affiliates
42
(8
)
95
(33
)
Net income (loss) from continuing
operations
533
10
2,956
319
Net income (loss) from discontinued
operations
28
5
(72
)
61
Net income (loss)
561
15
2,884
380
Net loss (income) attributable to
noncontrolling interests
4
(13
)
(79
)
(39
)
Net income (loss) attributable to Newmont
stockholders
$
565
$
2
$
2,805
$
341
Net income (loss) attributable to Newmont
stockholders:
Continuing operations
$
537
$
(3
)
$
2,877
$
280
Discontinued operations
28
5
(72
)
61
$
565
$
2
$
2,805
$
341
Net income (loss) per common share
Basic:
Continuing operations
$
0.66
$
—
$
3.92
$
0.53
Discontinued operations
0.03
—
(0.10
)
0.11
$
0.69
$
—
$
3.82
$
0.64
Diluted:
Continuing operations
$
0.66
$
—
$
3.91
$
0.53
Discontinued operations
0.03
—
(0.10
)
0.11
$
0.69
$
—
$
3.81
$
0.64
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
NEWMONT CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Operating activities:
Net income (loss)
$
561
$
15
$
2,884
$
380
Adjustments:
Depreciation and amortization
613
336
1,960
1,215
Stock-based compensation
21
19
97
76
Reclamation and remediation
107
61
258
146
Loss (income) from discontinued
operations
(28
)
(5
)
72
(61
)
Deferred income taxes
(88
)
250
334
150
Impairment of long-lived assets
1
3
5
369
Change in fair value of investments
(91
)
29
(166
)
50
Gain on formation of Nevada Gold Mines
(24
)
—
(2,390
)
—
Write-downs of inventory and stockpiles
and ore on leach pads
22
51
130
271
Other operating adjustments
14
59
1
(16
)
Net change in operating assets and
liabilities
100
(76
)
(309
)
(743
)
Net cash provided by (used in) operating
activities of continuing operations
1,208
742
2,876
1,837
Net cash provided by (used in) operating
activities of discontinued operations (1)
(3
)
(2
)
(10
)
(10
)
Net cash provided by (used in) operating
activities
1,205
740
2,866
1,827
Investing activities:
Additions to property, plant and mine
development
(430
)
(269
)
(1,463
)
(1,032
)
Return of investment from an equity method
investee
49
—
132
—
Acquisitions, net (1)
—
(2
)
127
(140
)
Purchases of investments
(18
)
(22
)
(112
)
(39
)
Proceeds from sales of investments
8
2
67
18
Proceeds from sales of other assets
1
1
30
24
Other
(19
)
(3
)
(7
)
(8
)
Net cash provided by (used in) investing
activities
(409
)
(293
)
(1,226
)
(1,177
)
Financing activities:
Repayment of debt
(626
)
—
(1,876
)
—
Dividends paid to common stockholders
(114
)
(75
)
(889
)
(301
)
Proceeds from issuance of debt, net
—
—
690
—
Repurchases of common stock
(479
)
(2
)
(479
)
(98
)
Distributions to noncontrolling
interests
(49
)
(53
)
(186
)
(160
)
Funding from noncontrolling interests
18
23
93
100
Payments on lease and other financing
obligations
(18
)
(1
)
(55
)
(4
)
Payments for withholding of employee taxes
related to stock-based compensation
(2
)
(1
)
(50
)
(40
)
Proceeds from sale of noncontrolling
interests
—
—
—
48
Other
(1
)
—
(25
)
—
Net cash provided by (used in) financing
activities
(1,271
)
(109
)
(2,777
)
(455
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1
—
(3
)
(4
)
Net change in cash, cash equivalents and
restricted cash
(474
)
338
(1,140
)
191
Cash, cash equivalents and restricted cash
at beginning of period
2,823
3,151
3,489
3,298
Cash, cash equivalents and restricted cash
at end of period
$
2,349
$
3,489
$
2,349
$
3,489
Reconciliation of cash, cash equivalents
and restricted cash:
Cash and cash equivalents
$
2,243
$
3,397
$
2,243
$
3,397
Restricted cash included in Other current
assets
2
1
2
1
Restricted cash included in Other
non-current assets
104
91
104
91
Total cash, cash equivalents and
restricted cash
$
2,349
$
3,489
$
2,349
$
3,489
(1)
Acquisitions, net is comprised of $121 in
cash, cash equivalents and restricted cash acquired, net of $17
cash paid in the Newmont Goldcorp transaction and $6 of restricted
cash acquired in the formation of Nevada Gold Mines during 2019. In
the 2018 periods, Acquisitions, net is comprised of mineral
interest acquisitions, primarily Galore Creek.
NEWMONT CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
At December 31,
At December 31,
2019
2018
ASSETS
Cash and cash equivalents
$
2,243
$
3,397
Trade receivables
373
254
Investments
237
48
Inventories
1,014
630
Stockpiles and ore on leach pads
812
697
Other current assets
570
251
Current assets held for sale
1,023
—
Current assets
6,272
5,277
Property, plant and mine development,
net
25,276
12,258
Investments
3,199
271
Stockpiles and ore on leach pads
1,484
1,866
Deferred income tax assets
549
401
Goodwill
2,674
58
Other non-current assets
520
584
Total assets
$
39,974
$
20,715
LIABILITIES
Accounts payable
$
539
$
303
Employee-related benefits
361
305
Income and mining taxes payable
162
71
Lease and other financing obligations
100
27
Debt
—
626
Other current liabilities
880
455
Current liabilities held for sale
343
—
Current liabilities
2,385
1,787
Debt
6,138
3,418
Lease and other financing obligations
596
190
Reclamation and remediation
liabilities
3,464
2,481
Deferred income tax liabilities
2,407
612
Employee-related benefits
448
401
Silver streaming agreement
1,058
—
Other non-current liabilities
1,061
314
Total liabilities
17,557
9,203
Contingently redeemable noncontrolling
interest
47
47
EQUITY
Common stock
1,298
855
Treasury stock
(120
)
(70
)
Additional paid-in capital
18,216
9,618
Accumulated other comprehensive income
(loss)
(265
)
(284
)
Retained earnings
2,291
383
Newmont stockholders' equity
21,420
10,502
Noncontrolling interests
950
963
Total equity
22,370
11,465
Total liabilities and equity
$
39,974
$
20,715
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
U.S. generally accepted accounting principles (“GAAP”). These
measures should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP.
Unless otherwise noted, we present the Non-GAAP financial measures
of our continuing operations in the tables below.
Adjusted net income (loss)
Management uses Adjusted net income (loss) to evaluate the
Company’s operating performance and for planning and forecasting
future business operations. The Company believes the use of
Adjusted net income (loss) allows investors and analysts to
understand the results of the continuing operations of the Company
and its direct and indirect subsidiaries relating to the sale of
products, by excluding certain items that have a disproportionate
impact on our results for a particular period. Adjustments to
continuing operations are presented before tax and net of our
partners’ noncontrolling interests, when applicable. The tax effect
of adjustments is presented in the Tax effect of adjustments line
and is calculated using the applicable regional tax rate.
Management’s determination of the components of Adjusted net income
(loss) are evaluated periodically and based, in part, on a review
of non-GAAP financial measures used by mining industry analysts.
Net income (loss) attributable to Newmont stockholders is
reconciled to Adjusted net income (loss) as follows:
Three Months Ended December
31, 2019
Year Ended December 31,
2019
per share data (1)
per share data (1)
basic
diluted
basic
diluted
Net income (loss) attributable to Newmont
stockholders
$
565
$
0.69
$
0.69
$
2,805
$
3.82
$
3.81
Net loss (income) attributable to Newmont
stockholders from discontinued operations (2)
(28
)
(0.03
)
(0.03
)
72
0.10
0.10
Net income (loss) attributable to Newmont
stockholders from continuing operations
537
0.66
0.66
2,877
3.92
3.91
Gain on formation of Nevada Gold Mines
(3)
(24
)
(0.03
)
(0.03
)
(2,390
)
(3.25
)
(3.24
)
Goldcorp transaction and integration costs
(4)
32
0.04
0.04
217
0.29
0.29
Change in fair value of investments
(5)
(91
)
(0.11
)
(0.11
)
(166
)
(0.23
)
(0.23
)
Reclamation and remediation charges, net
(6)
50
0.07
0.07
99
0.13
0.13
Nevada JV transaction and integration
costs (7)
4
—
—
30
0.04
0.04
Loss (gain) on asset and investment sales,
net (8)
2
—
—
(28
)
(0.04
)
(0.04
)
Restructuring and other, net (9)
(24
)
(0.03
)
(0.03
)
(9
)
(0.01
)
(0.01
)
Impairment of long-lived assets, net
(10)
1
—
—
4
—
—
Impairment of investments (11)
—
—
—
2
—
—
Tax effect of adjustments (12)
(8
)
(0.01
)
(0.01
)
418
0.57
0.57
Valuation allowance and other tax
adjustments, net (13)
(69
)
(0.09
)
(0.09
)
(84
)
(0.10
)
(0.10
)
Adjusted net income (loss)
$
410
$
0.50
$
0.50
$
970
$
1.32
$
1.32
Weighted average common shares (millions):
(14)
818
820
735
737
(1)
Per share measures may not recalculate due
to rounding.
(2)
For additional information regarding our
discontinued operations, see Note 13 to our Consolidated Financial
Statements.
(3)
Gain on formation of Nevada Gold Mines
represents the difference between the fair value of our 38.5%
interest in NGM and the carrying value of the Nevada mining
operations contributed.
(4)
Goldcorp transaction and integration
costs, included in Other expense, net, represents costs incurred
related to the Newmont Goldcorp transaction during 2019.
(5)
Change in fair value of investments,
included in Other income, net, primarily represents unrealized
holding gains and losses on marketable equity securities and our
investment instruments in Continental Gold Inc.
(6)
Reclamation and remediation charges, net,
included in Reclamation and remediation, represent revisions to
remediation plans at the Company’s former historic mining
operations, including adjustments related to updated water
management costs for operations no longer in production at the
Yanacocha mine, updated project cost estimates at the Mule Canyon
and Northumberland mine sites and a review of the project cost
estimates at the Midnite and Dawn remediation site, as well as
increased water management costs at the Con mine. Amount is
presented net of income (loss) attributable to noncontrolling
interests of $(21) and $(21), respectively.
(7)
Nevada JV transaction and integration
costs, included in Other expense, net, primarily represents costs
incurred related to the Nevada JV Agreement, including hostile
defense fees, during 2019.
(8)
Loss (gain) on asset and investment sales,
net, included in Other income, net, primarily represents a gain on
the sale of exploration land. Amount is presented net of income
(loss) attributable to noncontrolling interests of $- and $2,
respectively.
(9)
Restructuring and other, net, included in
Other expense, net, primarily represents certain costs, unrelated
to the Newmont Goldcorp transaction or the formation of NGM,
associated with severance and employee-related benefits, and legal
and other settlements of $5 and $12, respectively. Restructuring
and other, net included in Other income, net, primarily represents
a net pension curtailment gain of $(28) and $(20), respectively.
Amount is presented net of income (loss) attributable to
noncontrolling interests of $(1) and (1), respectively.
(10)
Impairment of long-lived assets, net,
included in Impairment of long-lived assets, represents non-cash
write-downs of long-lived assets. Amount is presented net of income
(loss) attributable to noncontrolling interests of $- and $(1),
respectively.
(11)
Impairment of investments, included in
Other income, net, represents other-than-temporary impairments of
other investments.
(12)
The tax effect of adjustments, included in
Income and mining tax benefit (expense), represents the tax effect
of adjustments in footnotes (3) through (11), as described above,
and are calculated using the applicable regional tax rate.
(13)
Valuation allowance and other tax
adjustments, net, included in Income and mining tax benefit
(expense), is recorded for items such as foreign tax credits,
alternative minimum tax credits, capital losses, disallowed foreign
losses, and the effects of changes in foreign currency exchange
rates on deferred tax assets and deferred tax liabilities. The
adjustment is due to a net increase or (decrease) to net operating
losses, tax credit carryovers and other deferred tax assets subject
to valuation allowance of $(373) and $(262), respectively, the
effects of changes in foreign exchange rates on deferred tax assets
and liabilities of $55 and $(95), respectively, the effects related
to the amendment of the 2014 U.S. federal income tax return and
related carrybacks of $150 and $150, respectively, additions to the
reserve for uncertain tax positions of $49 and $70, the expiration
of U.S. capital loss carryovers of $34 and $34, respectively, and
other tax adjustments of $23 and $28, respectively. Amounts are
presented net of income (loss) attributable to noncontrolling
interests of $(7) and $(9), respectively.
(14)
Adjusted net income (loss) per diluted
share is calculated using diluted common shares, which are
calculated in accordance with U.S. GAAP
Three Months Ended December
31, 2018
Year Ended December 31,
2018
per share data (1)
per share data (1)
basic
diluted
basic
diluted
Net income (loss) attributable to Newmont
stockholders
$
2
$
—
$
—
$
341
$
0.64
$
0.64
Net loss (income) attributable to Newmont
stockholders from discontinued operations (2)
(5
)
—
—
(61
)
(0.11
)
(0.11
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
(3
)
—
—
280
0.53
0.53
Impairment of long-lived assets (3)
3
—
0.01
369
0.69
0.69
Loss (gain) on asset and investment sales
(4)
—
—
—
(100
)
(0.19
)
(0.19
)
Change in fair value of investments
(5)
29
0.05
0.05
50
0.09
0.09
Impairment of investments (6)
42
0.08
0.07
42
0.08
0.07
Emigrant leach pad write-down (7)
—
—
—
29
0.05
0.05
Reclamation and remediation charges
(8)
13
0.03
0.03
21
0.04
0.04
Restructuring and other, net (9)
3
0.01
0.01
16
0.03
0.03
Tax effect of adjustments (10)
(11
)
(0.03
)
(0.02
)
(99
)
(0.18
)
(0.18
)
Re-measurement due to the Tax Cuts and
Jobs Act (11)
(14
)
(0.03
)
(0.03
)
(14
)
(0.03
)
(0.03
)
Tax restructuring related to the Tax Cuts
and Jobs Act (12)
11
0.02
0.02
(34
)
(0.06
)
(0.06
)
Valuation allowance and other tax
adjustments (13)
141
0.27
0.26
158
0.30
0.30
Adjusted net income (loss)
$
214
$
0.40
$
0.40
$
718
$
1.35
$
1.34
Weighted average common shares (millions):
(14)
533
535
533
535
(1)
Per share measures may not recalculate due
to rounding.
(2)
For additional information regarding our
discontinued operations, see Note 13 to our Consolidated Financial
Statements.
(3)
Impairment of long-lived assets, included
in Impairment of long-lived assets, represents non-cash write-downs
of long-lived assets. The amount includes $366 related to
long-lived assets in Nevada in 2018.
(4)
Loss (gain) on asset and investment sales,
included in Other income, net, primarily represents a gain from the
exchange of certain royalty interests for cash consideration and an
equity ownership and warrants in Maverix.
(5)
Change in fair value of investments,
included in Other income, net, primarily represents unrealized
holding gains and losses on marketable equity securities and our
investment instruments in Continental Gold Inc.
(6)
Impairment of investments, included in
Other income, net, represents other-than-temporary impairments of
other investments.
(7)
The Emigrant leach pad write-down,
included in Costs applicable to sales and Depreciation and
amortization, represents a write-down to reduce the carrying value
of the leach pad to net realizable value at Emigrant due to a
change in mine plan resulting in a significant decrease in mine
life.
(8)
Reclamation and remediation charges,
included in Reclamation and remediation, represent revisions to
reclamation and remediation plans and cost estimates at the
Company’s former mining operations, including adjustments at the
Idarado, Lone Tree and Rain remediation and closure sites.
(9)
Restructuring and other, net, included in
Other expense, net, primarily represents certain costs associated
with severance, legal and other settlements. Amounts are presented
net of income (loss) attributable to noncontrolling interests of
$(1) and $(4), respectively.
(10)
The tax effect of adjustments, included in
Income and mining tax benefit (expense), represents the tax effect
of adjustments in footnotes (3) through (9), as described above,
and are calculated using the applicable regional tax rate.
(11)
Re-measurement due to the Tax Cuts and
Jobs Act, included in Income and mining tax benefit (expense),
represents the re-measurement of our U.S. deferred tax assets and
liabilities from 35% to the reduced tax rate of 21%. Amount
reflects the final adjustments to the provisional re-measurement
expense.
(12)
Tax restructuring related to the Tax Cuts
and Jobs Act, included in Income and mining tax benefit (expense),
represents changes resulting from restructuring our holding of
non-U.S. operations for U.S. federal income tax purposes. Amounts
reflects the final adjustments to the provisional restructuring
charge.
(13)
Valuation allowance and other tax
adjustments, net, included in Income and mining tax benefit
(expense), predominantly represent adjustments to remove the impact
of our valuation allowances for items such as foreign tax credits,
alternative minimum tax credits, capital losses and disallowed
foreign losses. We believe that these valuation allowances cause
significant fluctuations in our financial results that are not
indicative of our underlying financial performance. The adjustments
three and twelve months ended December 31, 2018 are due to an
increase to the valuation allowance on U.S. net operating losses,
credit carryovers, and other U.S. deferred tax assets of $159 and
$191, respectively, other tax adjustments of $(7) and $(3),
respectively, and a decrease to the valuation allowance on U.S.
capital losses of $- and $(15), respectively. Amounts are presented
net of income (loss) attributable to noncontrolling interests of
$(11) and $(15), respectively.
(14)
Adjusted net income (loss) per diluted
share is calculated using diluted common shares, which are
calculated in accordance with U.S. GAAP.
Earnings before interest, taxes and
depreciation and amortization and Adjusted earnings before
interest, taxes and depreciation and amortization
Management uses Earnings before interest, taxes and depreciation
and amortization (“EBITDA”) and EBITDA adjusted for non-core or
certain items that have a disproportionate impact on our results
for a particular period (“Adjusted EBITDA”) as non-GAAP measures to
evaluate the Company’s operating performance. EBITDA and Adjusted
EBITDA do not represent, and should not be considered an
alternative to, net income (loss), operating income (loss), or cash
flow from operations as those terms are defined by GAAP, and do not
necessarily indicate whether cash flows will be sufficient to fund
cash needs. Although Adjusted EBITDA and similar measures are
frequently used as measures of operations and the ability to meet
debt service requirements by other companies, our calculation of
Adjusted EBITDA is not necessarily comparable to such other
similarly titled captions of other companies. The Company believes
that Adjusted EBITDA provides useful information to investors and
others in understanding and evaluating our operating results in the
same manner as our management and Board of Directors. Management’s
determination of the components of Adjusted EBITDA are evaluated
periodically and based, in part, on a review of non-GAAP financial
measures used by mining industry analysts. Net income (loss)
attributable to Newmont stockholders is reconciled to EBITDA and
Adjusted EBITDA as follows:
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Net income (loss) attributable to Newmont
stockholders
$
565
$
2
$
2,805
$
341
Net income (loss) attributable to
noncontrolling interests
(4
)
13
79
39
Net loss (income) from discontinued
operations (1)
(28
)
(5
)
72
(61
)
Equity loss (income) of affiliates
(42
)
8
(95
)
33
Income and mining tax expense
(benefit)
129
260
832
386
Depreciation and amortization
613
336
1,960
1,215
Interest expense, net
84
54
301
207
EBITDA
$
1,317
$
668
$
5,954
$
2,160
Adjustments:
Gain on formation of Nevada Gold Mines
(2)
$
(24
)
$
—
$
(2,390
)
$
—
Goldcorp transaction and integration costs
(3)
32
—
217
—
Change in fair value of investments
(4)
(91
)
29
(166
)
50
Reclamation and remediation charges
(5)
71
13
120
21
Loss (gain) on asset and investments sales
(6)
2
—
(30
)
(100
)
Nevada JV transaction and integration
costs (7)
4
—
30
—
Restructuring and other (8)
(23
)
4
(8
)
20
Impairment of long-lived assets (9)
1
3
5
369
Impairment of investments (10)
—
42
2
42
Emigrant leach pad write-down (11)
—
—
—
22
Adjusted EBITDA
$
1,289
$
759
$
3,734
$
2,584
(1)
For additional information regarding our
discontinued operations, see Note 13 to our Consolidated Financial
Statements.
(2)
Gain on formation of Nevada Gold Mines
represents the difference between the fair value of our 38.5%
interest in NGM and the carrying value of the Nevada mining
operations contributed.
(3)
Goldcorp transaction and integration
costs, included in Other expense, net, primarily represents costs
incurred related to the Newmont Goldcorp transaction during
2019.
(4)
Change in fair value of investments,
included in Other income, net, primarily represents unrealized
holding gains and losses on marketable equity securities and our
investment instruments in Continental Gold Inc.
(5)
Reclamation and remediation charges,
included in Reclamation and remediation, represent revisions to
reclamation and remediation plans and cost estimates at the
Company’s former historic mining operations. The 2019 charges
include updated water management costs for operations no longer in
production at the Yanacocha mine, updated project cost estimates at
the Mule Canyon and Northumberland mine sites and a review of the
project cost estimates at the Midnite and Dawn remediation site, as
well as increased water management costs at the Con mine. The 2018
charges include adjustments at the Idarado, Lone Tree and Rain
remediation and closure sites.
(6)
Loss (gain) on asset and investment sales,
included in Other income, net, primarily represents a gain on the
sale of exploration land in 2019 and a gain from the exchange of
certain royalty interests for cash consideration and an equity
ownership and warrants in Maverix in 2018.
(7)
Nevada JV transaction and integration
costs, included in Other expense, net, primarily represents costs
incurred related to the Nevada JV Agreement, including hostile
defense fees, during 2019.
(8)
Restructuring and other, net included in
Other expense, net, primarily represents certain costs, unrelated
to the Newmont Goldcorp transaction or the formation of NGM,
associated with severance and employee-related benefits, and legal
and other settlements of $5, $4, $12 and $20, respectively.
Restructuring and other, net included in Other income, net,
primarily represents a net pension curtailment gain of $28, $-, $20
and $-, respectively.
(9)
Impairment of long-lived assets, included
in Impairment of long-lived assets, represents non-cash write-downs
of long-lived assets. Impairments include $366 related to
long-lived assets in Nevada in 2018.
(10)
Impairment of investments, included in
Other income, net, represents other-than-temporary impairments of
other investments.
(11)
The Emigrant leach pad write-down,
included in Costs applicable to sales, represents a write-down to
reduce the carrying value of the leach pad to net realizable value
at Emigrant due to a change in mine plan resulting in a significant
decrease in mine life in 2018.
The Company uses NGM EBITDA as a non-GAAP measure to evaluate
the operating performance of its investment in Nevada Gold Mines
(NGM). NGM EBITDA does not represent, and should not be considered
an alternative to, Income (loss) before income and mining tax and
other items, as defined by GAAP, and does not necessarily indicate
whether cash distributions from NGM will be consistent with NGM
EBITDA. Although the Company has the ability to exert significant
influence and proportionally consolidates its 38.5% interest in
NGM, it does not have direct control over the operations or
resulting revenues and expenses of its investment in NGM. The
Company believes that NGM EBITDA provides useful information to
investors and others in understanding and evaluating the operating
results of its investment in NGM, in the same manner as management
and the Board of Directors. Income (loss) before income and mining
tax and other items is reconciled to NGM EBITDA as follows:
Three Months Ended
Year Ended
December 31, 2019
December 31, 2019
Income (Loss) before Income and Mining Tax
and other items, NGM (1)
$
118
$
203
Depreciation and amortization (1)
149
298
NGM EBITDA
$
267
$
501
(1)
See Note 5 to the Consolidated
Financial Statements.
Free Cash Flow
Management uses Free Cash Flow as a non-GAAP measure to analyze
cash flows generated from operations. Free Cash Flow is Net cash
provided by (used in) operating activities less Net cash provided
by (used in) operating activities of discontinued operations less
Additions to property, plant and mine development as presented on
the Consolidated Statements of Cash Flows. The Company believes
Free Cash Flow is also useful as one of the bases for comparing the
Company’s performance with its competitors. Although Free Cash Flow
and similar measures are frequently used as measures of cash flows
generated from operations by other companies, the Company’s
calculation of Free Cash Flow is not necessarily comparable to such
other similarly titled captions of other companies.
The presentation of non-GAAP Free Cash Flow is not meant to be
considered in isolation or as an alternative to net income as an
indicator of the Company’s performance, or as an alternative to
cash flows from operating activities as a measure of liquidity as
those terms are defined by GAAP, and does not necessarily indicate
whether cash flows will be sufficient to fund cash needs. The
Company’s definition of Free Cash Flow is limited in that it does
not represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the
payments required for debt service and other contractual
obligations or payments made for business acquisitions. Therefore,
the Company believes it is important to view Free Cash Flow as a
measure that provides supplemental information to the Company’s
Consolidated Statements of Cash Flows.
The following table sets forth a reconciliation of Free Cash
Flow, a non-GAAP financial measure, to Net cash provided by (used
in) operating activities, which the Company believes to be the GAAP
financial measure most directly comparable to Free Cash Flow, as
well as information regarding Net cash provided by (used in)
investing activities and Net cash provided by (used in) financing
activities.
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Net cash provided by (used in) operating
activities
$
1,205
$
740
$
2,866
$
1,827
Less: Net cash used in (provided by)
operating activities of discontinued operations
3
2
10
10
Net cash provided by (used in) operating
activities of continuing operations
1,208
742
2,876
1,837
Less: Additions to property, plant and
mine development
(430
)
(269
)
(1,463
)
(1,032
)
Free Cash Flow
$
778
$
473
$
1,413
$
805
Net cash provided by (used in) investing
activities (1)
$
(409
)
$
(293
)
$
(1,226
)
$
(1,177
)
Net cash provided by (used in) financing
activities
$
(1,271
)
$
(109
)
$
(2,777
)
$
(455
)
(1)
Net cash provided by (used in) investing
activities includes Additions to property, plant and mine
development, which is included in the Company’s computation of Free
Cash Flow.
Costs applicable to sales per ounce/gold
equivalent ounce
Costs applicable to sales per ounce/gold equivalent ounce are
non-GAAP financial measures. These measures are calculated by
dividing the costs applicable to sales of gold and other metals by
gold ounces or gold equivalent ounces sold, respectively. These
measures are calculated for the periods presented on a consolidated
basis. Costs applicable to sales per ounce/gold equivalent ounce
statistics are intended to provide additional information only and
do not have any standardized meaning prescribed by GAAP and should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. The measures are not
necessarily indicative of operating profit or cash flow from
operations as determined under GAAP. Other companies may calculate
these measures differently.
The following tables reconcile these non-GAAP measures to the
most directly comparable GAAP measures
Costs applicable to sales per ounce
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Costs applicable to sales (1)(2)
$
1,251
$
1,053
$
4,663
$
3,906
Gold sold (thousand ounces)
1,809
1,602
6,465
5,516
Costs applicable to sales per ounce
(3)
$
691
$
658
$
721
$
708
(1)
Includes by-product credits of $31 and $91
during the three months and year ended December 31, 2019,
respectively, and $9 and $50 during the three months and year ended
December 31, 2018, respectively.
(2)
Excludes Depreciation and amortization and
Reclamation and remediation.
(3)
Per ounce measures may not recalculate due
to rounding.
Costs applicable to sales per gold equivalent ounce
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Costs applicable to sales (1)(2)
$
208
$
51
$
532
$
187
Gold equivalent ounces - other metals
(thousand ounces) (3)
264
61
621
238
Costs applicable to sales per ounce
(4)
$
791
$
823
$
858
$
782
(1)
Includes by-product credits of $1 and $3
during the three months and year ended December 31, 2019,
respectively, and $- and $3 during the three months and year ended
December 31, 2018, respectively.
(2)
Excludes Depreciation and amortization and
Reclamation and remediation.
(3)
Gold equivalent ounces are calculated as
pounds or ounces sold multiplied by the ratio of the other metals
price to the gold price using Gold ($1,200/oz.), Copper
($2.75/lb.), Silver ($15/oz.), Lead ($0.90/lb.) and Zinc
($1.05/lb.) pricing for the 2019 periods, Gold ($1,250/oz.) and
Copper ($2.70/lb.) pricing for the 2018 periods.
(4)
Per ounce measures may not recalculate due
to rounding.
Costs applicable to sales per ounce for Nevada Gold Mines
(NGM)
Three Months Ended
Year Ended
December 31,
December 31,
2019
2019
Costs applicable to sales, NGM (1)(2)
$
259
494
Gold sold (thousand ounces)
359
693
Costs applicable to sales per ounce, NGM
(3)
$
722
$
712
(1)
See Note 5 to the Consolidated Financial
Statements.
(2)
Excludes Depreciation and amortization and
Reclamation and remediation.
(3)
Per ounce measures may not recalculate due
to rounding.
All-In Sustaining Costs
Newmont has developed a metric that expands on GAAP measures,
such as cost of goods sold, and non-GAAP measures, such as costs
applicable to sales per ounce, to provide visibility into the
economics of our mining operations related to expenditures,
operating performance and the ability to generate cash flow from
our continuing operations.
Current GAAP measures used in the mining industry, such as cost
of goods sold, do not capture all of the expenditures incurred to
discover, develop and sustain production. Therefore, we believe
that all-in sustaining costs is a non-GAAP measure that provides
additional information to management, investors and analysts that
aid in the understanding of the economics of our operations and
performance compared to other producers and provides investors
visibility by better defining the total costs associated with
production.
All-in sustaining cost (“AISC”) amounts are intended to provide
additional information only and do not have any standardized
meaning prescribed by GAAP and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with GAAP. The measures are not necessarily
indicative of operating profit or cash flow from operations as
determined under GAAP. Other companies may calculate these measures
differently as a result of differences in the underlying accounting
principles, policies applied and in accounting frameworks such as
in International Financial Reporting Standards (“IFRS”), or by
reflecting the benefit from selling non-gold metals as a reduction
to AISC. Differences may also arise related to definitional
differences of sustaining versus development (i.e. non-sustaining)
activities based upon each company’s internal policies.
The following disclosure provides information regarding the
adjustments made in determining the all-in sustaining costs
measure:
Costs applicable to sales. Includes all direct and indirect
costs related to current production incurred to execute the current
mine plan. We exclude certain exceptional or unusual amounts from
Costs applicable to sales (“CAS”), such as significant revisions to
recovery amounts. CAS includes by-product credits from certain
metals obtained during the process of extracting and processing the
primary ore-body. CAS is accounted for on an accrual basis and
excludes Depreciation and amortization and Reclamation and
remediation, which is consistent with our presentation of CAS on
the Consolidated Statements of Operations. In determining AISC,
only the CAS associated with producing and selling an ounce of gold
is included in the measure. Therefore, the amount of gold CAS
included in AISC is derived from the CAS presented in the Company’s
Consolidated Statements of Operations less the amount of CAS
attributable to the production of other metals at our Peñasquito,
Boddington, and Phoenix mines. The other metals CAS at those mine
sites is disclosed in Note 5 to the Consolidated Financial
Statements. The allocation of CAS between gold and other metals at
the Peñasquito, Boddington, and Phoenix mines is based upon the
relative sales value of gold and other metals produced during the
period.
Reclamation costs. Includes accretion expense related to
reclamation liabilities and the amortization of the related Asset
Retirement Cost (“ARC”) for the Company’s operating properties.
Accretion related to the reclamation liabilities and the
amortization of the ARC assets for reclamation does not reflect
annual cash outflows but are calculated in accordance with GAAP.
The accretion and amortization reflect the periodic costs of
reclamation associated with current production and are therefore
included in the measure. The allocation of these costs to gold and
other metals is determined using the same allocation used in the
allocation of CAS between gold and other metals at the Peñasquito,
Boddington, and Phoenix mines.
Advanced projects, research and development and exploration.
Includes incurred expenses related to projects that are designed to
sustain current production and exploration. We note that as current
resources are depleted, exploration and advanced projects are
necessary for us to replace the depleting reserves or enhance the
recovery and processing of the current reserves to sustain
production at existing operations. As these costs relate to
sustaining our production, and are considered a continuing cost of
a mining company, these costs are included in the AISC measure.
These costs are derived from the Advanced projects, research and
development and Exploration amounts presented in the Consolidated
Statements of Operations less incurred expenses related to the
development of new operations, or related to major projects at
existing operations where these projects will materially benefit
the operation in the future. The allocation of these costs to gold
and other metals is determined using the same allocation used in
the allocation of CAS between gold and other metals at the
Peñasquito, Boddington, and Phoenix mines.
General and administrative. Includes costs related to
administrative tasks not directly related to current production,
but rather related to support our corporate structure and fulfill
our obligations to operate as a public company. Including these
expenses in the AISC metric provides visibility of the impact that
general and administrative activities have on current operations
and profitability on a per ounce basis.
Other expense, net. We exclude certain exceptional or unusual
expenses from Other expense, net, such as restructuring, as these
are not indicative to sustaining our current operations.
Furthermore, this adjustment to Other expense, net is also
consistent with the nature of the adjustments made to Net income
(loss) attributable to Newmont stockholders as disclosed in the
Company’s non-GAAP financial measure Adjusted net income (loss).
The allocation of these costs to gold and other metals is
determined using the same allocation used in the allocation of CAS
between gold and other metals at the Peñasquito, Boddington, and
Phoenix mines.
Treatment and refining costs. Includes costs paid to smelters
for treatment and refining of our concentrates to produce the
salable metal. These costs are presented net as a reduction of
Sales on our Consolidated Statements of Operations. The allocation
of these costs to gold and other metals is determined using the
same allocation used in the allocation of CAS between gold and
other metals at the Peñasquito, Boddington, and Phoenix mines.
Sustaining capital and finance lease payments. We determined
sustaining capital and finance lease payments as those capital
expenditures and finance lease payments that are necessary to
maintain current production and execute the current mine plan.
Sustaining finance lease payments are included beginning in 2019 in
connection with the adoption of ASC 842. Refer to Note 2 in the
Consolidated Financial Statements for further details. We
determined development (i.e. non-sustaining) capital expenditures
and finance lease payments to be those payments used to develop new
operations or related to projects at existing operations where
those projects will materially benefit the operation. The
classification of sustaining and development capital projects and
finance leases is based on a systematic review of our project
portfolio in light of the nature of each project. Sustaining
capital and finance lease payments are relevant to the AISC metric
as these are needed to maintain the Company’s current operations
and provide improved transparency related to our ability to finance
these expenditures from current operations. The allocation of these
costs to gold and other metals is determined using the same
allocation used in the allocation of CAS between gold and other
metals at the Peñasquito, Boddington, and Phoenix mines.
Advanced
Projects,
Research and
Treatment
Sustaining
All-In
Costs
Development
General
Other
and
Capital and
All-In
Sustaining
Three Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Lease Related
Sustaining
Ounces (000)
Costs per
December 31, 2019
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Costs (7)(8)
Costs
Sold
oz. (9)
Gold
CC&V
$
82
$
1
$
—
$
—
$
1
$
—
$
10
$
94
89
$
1,060
Red Lake
48
—
2
—
—
—
7
57
44
1,319
Musselwhite(10)
(7
)
1
1
—
—
—
11
6
—
—
Porcupine
60
—
2
—
—
—
12
74
92
792
Éléonore
70
1
2
—
—
—
26
99
97
1,030
Peñasquito
50
1
—
—
—
1
14
66
90
730
Other North America
—
—
—
20
—
—
4
24
—
—
North America
303
4
7
20
1
1
84
420
412
1,020
Yanacocha
100
11
3
1
1
—
13
129
107
1,207
Merian
77
1
—
1
—
—
17
96
129
741
Cerro Negro
69
1
—
1
—
—
10
81
131
619
Other South America
—
—
—
4
—
—
—
4
—
—
South America
246
13
3
7
1
—
40
310
367
846
Boddington
144
2
2
—
—
4
21
173
188
923
Tanami
68
—
4
—
—
—
26
98
139
698
Kalgoorlie
56
1
1
—
—
—
11
69
58
1,184
Other Australia
—
—
—
3
—
—
4
7
—
—
Australia
268
3
7
3
—
4
62
347
385
899
Ahafo
112
2
6
—
—
—
27
147
179
822
Akyem
63
7
—
—
3
—
8
81
100
802
Other Africa
—
—
2
2
—
—
—
4
—
—
Africa
175
9
8
2
3
—
35
232
279
833
Nevada Gold Mines
259
(4
)
7
2
3
3
47
317
359
883
Carlin
—
—
—
—
—
—
—
—
—
—
Phoenix
—
—
—
—
—
—
—
—
—
—
Twin Creeks
—
—
—
—
—
—
—
—
7
51
Long Canyon
—
—
—
—
—
—
—
—
—
—
Other Nevada
—
—
1
—
—
—
—
1
—
—
Nevada
259
(4
)
8
2
3
3
47
318
366
870
Corporate and Other
—
—
16
55
—
—
12
83
—
—
Total Gold
$
1,251
$
25
$
49
$
89
$
8
$
8
$
280
$
1,710
1,809
$
946
Gold equivalent ounces - other metals
(11)
Peñasquito
$
178
$
4
$
1
$
—
$
7
$
32
$
51
$
273
225
$
1,213
Boddington
30
—
—
—
—
2
4
36
39
924
Phoenix
—
—
—
—
—
—
—
—
—
—
Total Gold Equivalent Ounces
$
208
$
4
$
1
$
—
$
7
$
34
$
55
$
309
264
$
1,171
Consolidated
$
1,459
$
29
$
50
$
89
$
15
$
42
$
335
$
2,019
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes by-product credits of $32 and
excludes co-product revenues of $294.
(3)
Includes stockpile and leach pad inventory
adjustments of $2 at CC&V, $6 at Yanacocha, and $9 at NGM.
(4)
Reclamation costs include operating
accretion and amortization of asset retirement costs of $22 and $7,
respectively, and exclude non-operating accretion and reclamation
and remediation adjustments of $14 and $79, respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $4
at CC&V, $6 at Porcupine, $2 at Éléonore, $2 at Peñasquito, $2
at Other North America, $5 at Yanacocha, $5 at Merian, $3 at Cerro
Negro, $11 at Other South America, $1 at Kalgoorlie, $8 at Other
Australia, $3 at Ahafo, $2 at Akyem, $2 at NGM and $9 at Corporate
and Other, totaling $65 related to developing new operations or
major projects at existing operations where these projects will
materially benefit the operation.
(6)
Other expense, net is adjusted for Newmont
Goldcorp transaction and integration costs of $32, Nevada JV
transaction implementation costs of $4, and restructuring and other
costs of $5.
(7)
Includes sustaining capital expenditures
of $123 for North America, $40 for South America, $60 for
Australia, $35 for Africa, $47 for Nevada and $12 for Corporate and
Other, totaling $317 and excludes development capital expenditures,
capitalized interest and the increase in accrued capital totaling
$113. The following are major development projects: Borden,
Musselwhite Materials Handling, Éléonore Lower Mine Material
Handling System, Quecher Main, Yanacocha Sulfides, Tanami Expansion
2, Ahafo North, Ahafo Mill Expansion, Goldrush Complex and
Turquoise Ridge 3rd shaft.
(8)
Includes finance lease payments for
sustaining projects of $18 and excludes finance lease payments for
development projects of $9.
(9)
Per ounce measures may not recalculate due
to rounding.
(10)
Costs are offset by insurance recoveries
received during the fourth quarter of 2019.
(11)
Gold equivalent ounces is calculated as
pounds or ounces produced multiplied by the ratio of the other
metals price to the gold price, using Gold ($1,200/oz), Copper
($2.75/lb.), Silver ($15/oz.), Lead ($0.90/lb.) and Zinc
($1.05/lb.) pricing.
Advanced
Projects,
Research and
Treatment
All-In
Costs
Development
General
Other
and
All-In
Sustaining
Three Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Sustaining
Sustaining
Ounces (000)
Costs per
December 31, 2018
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Capital (7)
Costs
Sold
oz. (8)
Gold
CC&V
$
111
$
—
$
1
$
—
$
—
$
—
$
5
$
117
146
$
806
Other North America
—
—
—
—
—
—
—
—
—
—
North America
111
—
1
—
—
—
5
117
146
806
Yanacocha
103
13
2
1
(3
)
—
1
117
146
802
Merian
80
1
1
—
(2
)
—
15
95
180
528
Other South America
—
—
—
1
—
—
—
1
—
—
South America
183
14
3
2
(5
)
—
16
213
326
655
Boddington
167
1
—
—
—
5
14
187
191
978
Tanami
76
—
5
—
—
—
23
104
154
692
Kalgoorlie
54
1
1
—
1
—
4
61
64
954
Other Australia
—
—
2
4
(2
)
—
3
7
—
—
Australia
297
2
8
4
(1
)
5
44
359
409
879
Ahafo
81
—
3
—
2
—
13
99
129
769
Akyem
54
5
—
—
1
—
9
69
102
672
Other Africa
—
—
2
1
—
—
—
3
—
—
Africa
135
5
5
1
3
—
22
171
231
736
Carlin
200
4
10
2
—
—
34
250
284
884
Phoenix
57
—
1
1
1
4
4
68
68
1,007
Twin Creeks
53
—
2
1
—
—
18
74
98
759
Long Canyon
17
1
—
1
—
—
2
21
40
511
Other Nevada
—
—
—
—
(2
)
—
8
6
—
—
Nevada
327
5
13
5
(1
)
4
66
419
490
855
Corporate and Other
—
—
19
51
—
—
4
74
—
—
Total Gold
$
1,053
$
26
$
49
$
63
$
(4
)
$
9
$
157
$
1,353
1,602
$
845
Gold equivalent ounces - other metals
(9)
Boddington
$
36
$
1
$
—
$
—
$
—
$
3
$
2
$
42
42
$
1,002
Phoenix
15
1
1
—
—
—
—
17
19
892
Total Gold Equivalent Ounces
$
51
$
2
$
1
$
—
$
—
$
3
$
2
$
59
61
$
967
Consolidated
$
1,104
$
28
$
50
$
63
$
(4
)
$
12
$
159
$
1,412
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes by-product credits of $9 and
excludes co-product copper revenues of $74.
(3)
Includes stockpile and leach pad inventory
adjustments of $28 at Carlin, $2 at Twin Creeks, $10 at Yanacocha,
and $6 at Akyem.
(4)
Reclamation costs include operating
accretion and amortization of asset retirement costs of $13 and
$15, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $12 and $42,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $1
at Carlin, $1 at Twin Creeks, $4 at Long Canyon, $2 at CC&V, $4
at Other Nevada, $20 at Yanacocha, $1 at Merian, $10 at Other South
America, $1 at Kalgoorlie, $2 at Other Australia, $2 at Ahafo, $2
at Akyem and $1 at Corporate and Other, totaling $51 related to
developing new operations or major projects at existing operations
where these projects will materially benefit the operation.
(6)
Other expense, net is adjusted for
restructuring and other costs of $4.
(7)
Excludes development capital expenditures,
capitalized interest and changes in accrued capital, totaling $110.
The following are major development projects: Twin Creeks
Underground, Quecher Main, Tanami Expansion 2, Ahafo North, Subika
Underground and Ahafo Mill Expansion.
(8)
Per ounce and per pound measures may not
recalculate due to rounding.
(9)
Gold equivalent ounces is calculated as pounds or ounces
produced multiplied by the ratio of the other metals price to the
gold price, using Gold ($1,250/oz.) and Copper ($2.70/lb.)
pricing.
Advanced
Projects,
Research and
Treatment
Sustaining
All-In
Costs
Development
General
Other
and
Capital and
All-In
Sustaining
Years Ended
Applicable
Reclamation
and
and
Expense,
Refining
Finance Lease
Sustaining
Ounces (000)
Costs per
December 31, 2019
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Payments (7)(8)
Costs
Sold
oz. (9)
Gold
CC&V
$
290
$
4
$
6
$
1
$
3
$
—
$
38
$
342
319
$
1,071
Red Lake
136
2
7
—
—
—
29
174
112
1,570
Musselwhite
13
2
6
—
—
—
25
46
6
8,174
Porcupine
185
2
4
—
—
—
30
221
235
935
Éléonore
214
1
4
—
—
1
47
267
264
1,013
Peñasquito
116
2
—
—
—
2
39
159
144
1,100
Other North America
—
—
1
63
1
—
8
73
—
—
North America
954
13
28
64
4
3
216
1,282
1,080
1,187
Yanacocha
400
54
10
2
8
—
33
507
529
959
Merian
297
4
4
2
—
—
56
363
526
689
Cerro Negro
210
2
13
1
1
—
35
262
349
753
Other South America
—
—
—
11
—
—
—
11
—
—
South America
907
60
27
16
9
—
124
1,143
1,404
814
Boddington
575
11
3
—
—
14
66
669
710
942
Tanami
266
2
9
—
—
—
82
359
500
717
Kalgoorlie
216
4
3
—
—
—
31
254
228
1,114
Other Australia
—
—
4
10
1
—
9
24
—
—
Australia
1,057
17
19
10
1
14
188
1,306
1,438
908
Ahafo
393
5
20
—
1
—
98
517
630
820
Akyem
235
32
3
—
4
—
28
302
421
718
Other Africa
—
—
2
9
1
—
—
12
—
—
Africa
628
37
25
9
6
—
126
831
1,051
791
Nevada Gold Mines
494
6
12
5
5
5
97
624
693
901
Carlin
358
3
9
3
1
—
64
438
408
1,076
Phoenix
116
3
—
1
—
7
10
137
118
1,149
Twin Creeks
113
1
3
1
—
—
23
141
177
800
Long Canyon
36
1
—
1
—
—
7
45
96
466
Other Nevada
—
—
6
—
—
—
4
10
—
—
Nevada
1,117
14
30
11
6
12
205
1,395
1,492
935
Corporate and Other
—
—
62
203
3
—
21
289
—
—
Total Gold
$
4,663
$
141
$
191
$
313
$
29
$
29
$
880
$
6,246
6,465
$
966
Gold equivalent ounces - other metals
(10)
Peñasquito
$
387
$
7
$
3
$
—
$
7
$
66
$
116
$
586
438
$
1,339
Boddington
117
2
—
—
—
8
12
139
145
954
Phoenix
28
2
—
—
—
1
3
34
38
894
Total Gold Equivalent Ounces
$
532
$
11
$
3
$
—
$
7
$
75
$
131
$
759
621
$
1,222
Consolidated
$
5,195
$
152
$
194
$
313
$
36
$
104
$
1,011
$
7,005
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes by-product credits of $94 and
excludes co-product revenues of $691.
(3)
Includes stockpile and leach pad inventory
adjustments of $12 at CC&V, $16 at Yanacocha, $19 at
Boddington, $20 at Akyem, $10 at NGM, $33 at Carlin and $2 at Twin
Creeks.
(4)
Reclamation costs include operating
accretion and amortization of asset retirement costs of $85 and
$67, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $53 and $142,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $7
at CC&V, $1 at Musselwhite, $10 at Porcupine, $4 at Éléonore,
$3 at Peñasquito, $4 at Other North America, $14 at Yanacocha, $7
at Merian, $9 at Cerro Negro, $40 at Other South America, $3 at
Tanami, $3 at Kalgoorlie, $20 at Other Australia, $13 at Ahafo, $11
at Akyem, $4 at Other Africa, $10 at NGM, $6 at Carlin, $1 at
Phoenix, $2 at Twin Creeks, $12 at Long Canyon, $2 at Other Nevada
and $35 at Corporate and Other, totaling $221 related to developing
new operations or major projects at existing operations where these
projects will materially benefit the operation.
(6)
Other expense, net is adjusted for Newmont
Goldcorp transaction and integration costs of $217, Nevada JV
transaction implementation costs of $30, and restructuring and
other costs of $12.
(7)
Includes sustaining capital expenditures
of $295 for North America, $124 for South America, $185 for
Australia, $123 for Africa, $207 for Nevada and $21 for Corporate
and Other, totaling $955 and excludes development capital
expenditures, capitalized interest and the increase in accrued
capital totaling $508. The following are major development
projects: Borden, Musselwhite Materials Handling, Éléonore Lower
Mine Material Handling System, Quecher Main, Yanacocha Sulfides,
Tanami Expansion 2, Ahafo North, Subika Underground, Ahafo Mill
Expansion, Goldrush Complex and Turquoise Ridge 3rd shaft.
(8)
Includes finance lease payments for
sustaining projects of $56 and excludes finance lease payments for
development projects of $31.
(9)
Per ounce measures may not recalculate due
to rounding.
(10)
Gold equivalent ounces is calculated as
pounds or ounces produced multiplied by the ratio of the other
metals price to the gold price, using Gold ($1,200/oz.), Copper
($2.75/lb.), Silver ($15/oz.), Lead ($0.90/lb.) and Zinc
($1.05/lb.) pricing.
Advanced
Projects,
Research and
Treatment
All-In
Costs
Development
General
Other
and
All-In
Sustaining
Years Ended
Applicable
Reclamation
and
and
Expense,
Refining
Sustaining
Sustaining
Ounces (000)
Costs per
December 31, 2018
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Capital (7)
Costs
Sold
oz. (8)
Gold
CC&V
$
260
$
3
$
5
$
2
$
1
$
—
$
29
$
300
357
$
840
Other North America
—
—
—
—
—
—
—
—
—
—
North America
260
3
5
2
1
—
29
300
357
840
Yanacocha
425
47
5
2
—
—
26
505
522
967
Merian
275
2
4
1
1
—
54
337
538
627
Other South America
—
—
—
9
1
—
—
10
—
—
South America
700
49
9
12
2
—
80
852
1,060
804
Boddington
571
9
—
—
—
21
46
647
726
891
Tanami
297
2
17
—
1
—
68
385
505
763
Kalgoorlie
232
4
4
—
1
—
21
262
322
813
Other Australia
—
2
5
10
(5
)
—
5
17
—
—
Australia
1,100
17
26
10
(3
)
21
140
1,311
1,553
845
Ahafo
323
3
6
1
4
—
40
377
436
864
Akyem
227
22
1
1
2
—
40
293
415
705
Other Africa
—
—
2
6
—
—
—
8
—
—
Africa
550
25
9
8
6
—
80
678
851
794
Carlin
760
10
24
7
—
—
152
953
929
1,027
Phoenix
202
6
4
2
1
9
23
247
237
1,043
Twin Creeks
240
2
9
2
1
—
40
294
359
820
Long Canyon
72
2
—
1
—
—
11
86
170
505
Other Nevada
—
—
7
1
—
—
15
23
—
—
Nevada
1,274
20
44
13
2
9
241
1,603
1,695
928
Corporate and Other
—
—
63
199
1
—
12
275
—
—
Total Gold
$
3,884
$
114
$
156
$
244
$
9
$
30
$
582
$
5,019
5,516
$
909
Gold equivalent ounces - other metals
(9)
Boddington
$
132
$
2
$
—
$
—
$
—
$
12
$
10
$
156
173
$
898
Phoenix
55
2
1
—
—
1
8
67
65
1,035
Total Gold Equivalent Ounces
$
187
$
4
$
1
$
—
$
—
$
13
$
18
$
223
238
$
935
Consolidated
$
4,071
$
118
$
157
$
244
$
9
$
43
$
600
$
5,242
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes by-product credits of $53 and
excludes co-product revenues of $303.
(3)
Includes stockpile and leach pad inventory
adjustments of $5 at CC&V, $39 at Yanacocha, $33 at Ahafo, $34
at Akyem, $92 at Carlin and $32 at Twin Creeks. Total stockpile and
leach pad inventory adjustments at Carlin of $114 were adjusted
above by $22 related to the write-down at Emigrant due to a change
in mine plan, resulting in a significant decrease in mine life in
the third quarter of 2018.
(4)
Reclamation costs include operating
accretion and amortization of asset retirement costs of $60 and
$58, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $44 and $59,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $5
at CC&V, $49 at Yanacocha, $9 at Merian, $34 at Other South
America, $6 at Kalgoorlie, $7 at Other Australia, $11 at Ahafo, $12
at Akyem, $3 at Other Africa, $10 at Carlin, $3 at Twin Creeks, $23
at Long Canyon, $16 at Other Nevada and $5 at Corporate and Other,
totaling $193 related to developing new operations or major
projects at existing operations where these projects will
materially benefit the operation.
(6)
Other expense, net is adjusted for
restructuring and other costs of $20.
(7)
Excludes development capital expenditures,
capitalized interest and changes in accrued capital, totaling $432.
The following are major development projects during the period:
Quecher Main, the Merian crusher, Tanami Expansion 2, Ahafo North,
Subika Underground, Ahafo Mill Expansion and Twin Creeks
Underground.
(8)
Per ounce measures may not recalculate due
to rounding.
(9)
Gold equivalent ounces is calculated as
pounds or ounces produced multiplied by the ratio of the other
metals price to the gold price, using Gold ($1,250/oz.) and Copper
($2.70/lb.) pricing.
A reconciliation of the 2020 Gold AISC outlook to the 2020 Gold
CAS outlook, 2020 Co-product AISC outlook to the 2020 Co-product
CAS outlook are provided below. The estimates in the table below
are considered “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor created by such sections
and other applicable laws.
2020 Outlook - Gold 7,8 Outlook Estimate
(in millions, except ounces and per ounce) Cost
Applicable to Sales 1,2
4,725
Reclamation Costs 3
110
Advance Project and Exploration 4
175
General and Administrative 5
240
Other Expense
10
Treatment and Refining Costs
35
Sustaining Capital 6
855
Sustaining Finance Lease Payments
30
All-in Sustaining Costs
6,150
Ounces (000) Sold 9
6,300
All-in Sustaining Costs per Oz
$975
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes stockpile and leach pad inventory
adjustments.
(3)
Reclamation costs include operating
accretion and amortization of asset retirement costs.
(4)
Advanced Project and Exploration excludes
non-sustaining advanced projects and exploration.
(5)
Includes stock based compensation.
(6)
Excludes development capital expenditures,
capitalized interest and change in accrued capital.
(7)
The reconciliation is provided for
illustrative purposes in order to better describe management’s
estimates of the components of the calculation. Estimates for each
component of the forward-looking All-in sustaining costs per ounce
are independently calculated and, as a result, the total All-in
sustaining costs and the All-in sustaining costs per ounce may not
sum to the component ranges. While a reconciliation to the most
directly comparable GAAP measure has been provided for 2020 AISC
Gold and Co-Product Outlook on a consolidated basis, a
reconciliation has not been provided on an individual site or
project basis in reliance on Item 10(e)(1)(i)(B) of Regulation S-K
because such reconciliation is not available without unreasonable
efforts.
(8)
All values are presented on a consolidated
basis for Newmont.
(9)
Consolidated ounces sold for Yanacocha and
Merian is presented on a total production basis for the mine site
and excludes production from Pueblo Viejo.
2020 Outlook - Co-Product 7,8 Outlook Estimate
(in millions, except GEO and per GEO) Cost Applicable
to Sales 1,2
620
Reclamation Costs 3
10
Advance Project and Exploration 4
10
General and Administrative 5
25
Other Expense
—
Treatment and Refining Costs
160
Sustaining Capital 6
120
Sustaining Finance Lease Payments
20
All-in Sustaining Costs
975
Co-Product GEO (000) Sold 9
1,105
All-in Sustaining Costs per Co Product GEO
$880
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes stockpile and leach pad inventory
adjustments.
(3)
Reclamation costs include operating
accretion and amortization of asset retirement costs.
(4)
Advanced Project and Exploration excludes
non-sustaining advanced projects and exploration.
(5)
Includes stock based compensation.
(6)
Excludes development capital expenditures,
capitalized interest and change in accrued capital.
(7)
The reconciliation is provided for
illustrative purposes in order to better describe management’s
estimates of the components of the calculation. Estimates for each
component of the forward-looking All-in sustaining costs per ounce
are independently calculated and, as a result, the total All-in
sustaining costs and the All-in sustaining costs per ounce may not
sum to the component ranges. While a reconciliation to the most
directly comparable GAAP measure has been provided for 2020 AISC
Gold and Co-Product Outlook on a consolidated basis, a
reconciliation has not been provided on an individual site or
project basis in reliance on Item 10(e)(1)(i)(B) of Regulation S-K
because such reconciliation is not available without unreasonable
efforts.
(8)
All values are presented on a consolidated
basis for Newmont.
(9)
Co-Product GEO are all non gold
co-products (Peñasquito silver, zinc, lead, and Boddington
copper).
Net debt to Pro forma Adjusted EBITDA
ratio
Management uses net debt to Pro forma Adjusted EBITDA as
non-GAAP measures to evaluate the Company’s operating performance,
including our ability to generate earnings sufficient to service
our debt. Net debt to Pro forma Adjusted EBITDA represents the
ratio of the Company’s debt, net of cash and cash equivalents, to
Pro forma Adjusted EBITDA. Net debt to Pro forma Adjusted EBITDA
does not represent, and should not be considered an alternative to,
net income (loss), operating income (loss), or cash flow from
operations as those terms are defined by GAAP, and does not
necessarily indicate whether cash flows will be sufficient to fund
cash needs. Although Net Debt to Pro forma Adjusted EBITDA and
similar measures are frequently used as measures of operations and
the ability to meet debt service requirements by other companies,
our calculation of net debt to Pro forma Adjusted EBITDA measure is
not necessarily comparable to such other similarly titled captions
of other companies. The Company believes that net debt to Pro forma
Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating results in the same
manner as our management and Board of Directors. Management’s
determination of the components of net debt to Pro forma Adjusted
EBITDA is evaluated periodically and based, in part, on a review of
non-GAAP financial measures used by mining industry analysts. Net
income (loss) attributable to Newmont stockholders is reconciled to
Pro forma Adjusted EBITDA as follows:
Three months ended
Three months ended
Three months ended
Three months ended
December 31, 2019
September 30, 2019
June 30, 2019
March 31, 2019
Net income (loss) attributable to Newmont
stockholders
$
565
$
2,178
$
(25
)
$
87
Net income (loss) attributable to
noncontrolling interests
(4
)
26
25
32
Net loss (income) from discontinued
operations
(28
)
48
26
26
Equity loss (income) of affiliates
(42
)
(32
)
(26
)
5
Income and mining tax expense
(benefit)
129
558
20
125
Depreciation and amortization
613
548
487
312
Interest expense, net
84
77
82
58
EBITDA
1,317
3,403
589
645
EBITDA Adjustments:
Gain on formation of Nevada Gold Mines
(24
)
(2,366
)
—
—
Goldcorp transaction and integration
costs
32
26
114
45
Change in fair value of investments
(91
)
(19
)
(35
)
(21
)
Reclamation and remediation charges
71
17
32
—
Loss (gain) on asset and investment
sales
2
1
(32
)
(1
)
Nevada JV transaction and integration
costs
4
3
11
12
Restructuring and other
(23
)
10
—
5
Impairment of long-lived assets
1
3
—
1
Impairment of investments
—
1
—
1
Emigrant leach pad write-down
—
—
—
—
Adjusted EBITDA
1,289
1,079
679
687
Goldcorp adjusted EBITDA (prior to
acquisition) (1)
—
—
(66
)
148
Total pro forma adjusted EBITDA
$
1,289
$
1,079
$
613
$
835
12 month trailing Adjusted
EBITDA
$
3,816
Total Gross Debt
$
6,834
Less: Cash and cash equivalents
(2,243
)
Total net debt
$
4,591
Net debt to pro forma adjusted EBITDA
1.2
(1)
Represents Goldcorp’s pre-acquisition
Adjusted EBITDA on a US GAAP basis from January 1, 2019 through to
the acquisition date, April 18, 2019. This amount is added to our
adjusted EBITDA to include a full twelve months of Goldcorp results
on a pro forma basis for the twelve months ended December 31, 2019.
The pro forma adjusted EBITDA was derived from Goldcorp management
unaudited financial information for the three months ended March
31, 2019 and April 1, 2019 through April 18, 2019, the acquisition
date. Goldcorp’s pre-acquisition Adjusted EBITDA has been added to
our adjusted EBITDA for the purposes of Net Debt to Pro Forma
Adjusted EBITDA ratio only.
Net average realized price per ounce/
pound
Average realized price per ounce/ pound are non-GAAP financial
measures. The measures are calculated by dividing the net
consolidated gold, copper, silver, lead, and zinc sales by the
consolidated gold ounces, copper pounds, silver ounces, lead pounds
and zinc pounds sold, respectively. These measures are calculated
on a consistent basis for the periods presented on a consolidated
basis. Average realized price per ounce/ pound statistics are
intended to provide additional information only, do not have any
standardized meaning prescribed by GAAP and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. The measures are not
necessarily indicative of operating profit or cash flow from
operations as determined under GAAP. Other companies may calculate
these measures differently.
The following tables reconcile these non-GAAP measures to the
most directly comparable GAAP measure:
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Consolidated gold sales, net
$
2,673
$
1,974
$
9,049
$
6,950
Consolidated copper sales, net
47
74
210
303
Consolidated silver sales, net
144
—
253
—
Consolidated lead sales, net
47
—
85
—
Consolidated zinc sales, net
56
—
143
—
Total sales
$
2,967
$
2,048
$
9,740
$
7,253
Three Months Ended December
31, 2019
Gold
Copper
Silver (1)
Lead (1)
Zinc (1)
(ounces)
(pounds)
(ounces)
(pounds)
(pounds)
Consolidated sales:
Gross before provisional pricing and
streaming impact
$
2,679
$
47
$
122
$
53
$
75
Silver streaming amortization
—
—
21
—
—
Provisional pricing mark-to-market
2
2
7
1
—
Gross after provisional pricing and
streaming impact
2,681
49
150
54
75
Treatment and refining charges
(8
)
(2
)
(6
)
(7
)
(19
)
Net
$
2,673
$
47
$
144
$
47
$
56
Consolidated ounces (thousands)/ pounds
(millions) sold
1,809
17
9,268
61
72
Average realized price (per
ounce/pound)(2):
Gross before provisional pricing and
streaming impact
$
1,481
$
2.75
$
13.00
$
0.88
$
1.05
Silver streaming amortization
—
—
2.26
—
—
Provisional pricing mark-to-market
1
0.14
0.78
0.01
—
Gross after provisional pricing and
streaming impact
1,482
2.89
16.04
0.89
1.05
Treatment and refining charges
(4
)
(0.13
)
(0.55
)
(0.12
)
(0.27
)
Net
$
1,478
$
2.76
$
15.49
$
0.77
$
0.78
Year ended December 31,
2019
Gold
Copper
Silver (1)
Lead (1)
Zinc (1)
(ounces)
(pounds)
(ounces)
(pounds)
(pounds)
Consolidated sales:
Gross before provisional pricing and
streaming impact
$
9,063
$
220
$
218
$
97
$
187
Silver streaming amortization
—
—
37
—
—
Provisional pricing mark-to-market
15
(1
)
7
1
—
Gross after provisional pricing and
streaming impact
9,078
219
262
98
187
Treatment and refining charges
(29
)
(9
)
(9
)
(13
)
(44
)
Net
$
9,049
$
210
$
253
$
85
$
143
Consolidated ounces (thousands)/ pounds
(millions) sold
6,465
80
15,987
108
179
Average realized price (per
ounce/pound)(2):
Gross before provisional pricing and
streaming impact
$
1,402
$
2.76
$
13.57
$
0.90
$
1.05
Silver streaming amortization
—
—
2.31
—
—
Provisional pricing mark-to-market
2
(0.01
)
0.45
0.01
—
Gross after provisional pricing and
streaming impact
1,404
2.75
16.33
0.91
1.05
Treatment and refining charges
(5
)
(0.12
)
(0.54
)
(0.12
)
(0.25
)
Net
$
1,399
$
2.63
$
15.79
$
0.79
$
0.80
Three Months Ended
Year ended
December 31, 2018
December 31, 2018
Gold
Copper
Gold
Copper
(ounces)
(pounds)
(ounces)
(pounds)
Consolidated sales:
Gross before provisional pricing
$
1,975
$
77
$
6,982
$
323
Provisional pricing mark-to-market
8
—
(2
)
(7
)
Gross after provisional pricing
1,983
77
6,980
316
Treatment and refining charges
(9
)
(3
)
(30
)
(13
)
Net
1,974
74
6,950
303
Consolidated ounces (thousands)/ pounds
(millions) sold
1,602
28
5,516
110
Average realized price (per
ounce/pound)(2):
Gross before provisional pricing
$
1,233
$
2.76
$
1,266
$
2.94
Provisional pricing mark-to-market
5
(0.02
)
—
(0.07
)
Gross after provisional pricing
$
1,238
$
2.74
$
1,266
$
2.87
Treatment and refining charges
(5
)
(0.12
)
(6
)
(0.13
)
Net
$
1,233
$
2.62
$
1,260
$
2.74
(1)
Silver, lead and zinc sales are the result
of the Newmont Goldcorp transaction.
(2)
Per ounce measures may not recalculate due
to rounding.
Gold by-product metrics
Copper, silver, lead, and zinc are by-products often obtained
during the process of extracting and processing the primary
ore-body. In our GAAP Consolidated Financial Statements, the value
of these by-products is recorded as a credit to our CAS and the
value of the primary ore is recorded as Sales. In certain
instances, copper, silver, lead, and zinc are co-products, or
significant resource in the primary ore-body, and the revenue is
recorded as Sales in our GAAP Consolidated Financial
Statements.
Gold by-product metrics are non-GAAP financial measures that
serve as a basis for comparing the Company’s performance with
certain competitors. As Newmont’s operations are primarily focused
on gold production, “Gold by-product metrics” were developed to
allow investors to view Sales, CAS per ounce and AISC per ounce
calculations that classify all copper, silver, lead, and zinc
production as a by-product, even when copper, silver, lead or zinc
is a significant resource in primary ore-body. These metrics are
calculated by subtracting copper, silver, lead, and zinc sales
recognized from Sales and including these amounts as offsets to
CAS.
Gold by-product Metrics are calculated on a consistent basis for
the periods presented on a consolidated basis. These metrics are
intended to provide supplemental information only, do not have any
standardized meaning prescribed by GAAP and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. Other companies may
calculate these measures differently as a result of differences in
the underlying accounting principles, policies applied and in
accounting frameworks, such as in IFRS.
The following tables reconcile these non-GAAP measures to the
most directly comparable GAAP measures:
Three Months Ended
Years Ended
December 31,
December 31,
2019
2018
2019
2018
Consolidated gold sales, net
$
2,673
$
1,974
$
9,049
$
6,950
Consolidated other metal sales, net
294
74
691
303
Consolidated copper sales, net
47
74
210
303
Consolidated silver sales, net
144
—
253
—
Consolidated lead sales, net
47
—
85
—
Consolidated zinc sales, net
56
—
143
—
Sales
$
2,967
$
2,048
$
9,740
$
7,253
Costs applicable to sales
$
1,459
$
1,104
$
5,195
$
4,093
Less: Consolidated other metal sales,
net
(294
)
(74
)
(691
)
(303
)
By-Product costs applicable to sales
$
1,165
$
1,030
$
4,504
$
3,790
Gold sold (thousand ounces)
1,809
1,602
6,465
5,516
Total Gold CAS per ounce (by-product)
(1)
$
644
$
643
$
697
$
687
Total AISC
$
2,019
$
1,412
$
7,005
$
5,242
Less: Consolidated other metal sales,
net
(294
)
(74
)
(691
)
(303
)
By-Product AISC
$
1,725
$
1,338
$
6,314
$
4,939
Gold sold (thousand ounces)
1,809
1,602
6,465
5,516
Total Gold AISC per ounce (by-product)
(1)
$
954
$
835
$
977
$
895
(1)
Per ounce measures may not recalculate due
to rounding.
Conference Call Information
A conference call will be held on Thursday, February 20,
2020 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain
Time); it will also be carried on the Company’s website.
Conference Call
Details
Dial-In Number
855.209.8210
Intl Dial-In Number
412.317.5213
Conference Name
Newmont
Replay Number
877.344.7529
Intl Replay Number
412.317.0088
Replay Access Code
10137782
Webcast Details Title: Newmont Full
Year and Fourth Quarter 2019 Earnings Conference Call URL:
https://event.on24.com/wcc/r/2154308/76B7917DAA0F2D1AAF1F76E7FE5CC7BB
The full year and fourth quarter 2019 results will be available
before the market opens on Thursday, February 20, 2020 on the
“Investor Relations” section of the Company’s website,
www.newmont.com. Additionally, the conference call will be archived
for a limited time on the Company’s website.
About Newmont
Newmont is the world’s leading gold company and a producer of
copper, silver, zinc and lead. The Company’s world-class portfolio
of assets, prospects and talent is anchored in favorable mining
jurisdictions in North America, South America, Australia and
Africa. Newmont is the only gold producer listed in the S&P 500
Index and is widely recognized for its principled environmental,
social and governance practices. The Company is an industry leader
in value creation, supported by robust safety standards, superior
execution and technical proficiency. Newmont was founded in 1921
and has been publicly traded since 1925.
Cautionary Statement Regarding Forward
Looking Statements, Including Outlook:
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws. Where a
forward-looking statement expresses or implies an expectation or
belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis.
However, such statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ
materially from future results expressed, projected or implied by
the forward-looking statements. Forward-looking statements often
address our expected future business and financial performance and
financial condition; and often contain words such as “anticipate,”
“intend,” “plan,” “will,” “would,” “estimate,” “expect,” “believe,”
“target,” “indicative,” “preliminary,” or “potential.”
Forward-looking statements in this news release may include,
without limitation, (i) estimates of future production and sales,
including production outlook, average future production, upside
potential and indicative production profiles; (ii) estimates of
future costs applicable to sales and all-in sustaining costs; (iii)
estimates of future consolidated and attributable capital
expenditures, including development and sustaining capital; (iv)
estimates of future cost reductions, full potential savings, value
creation, improvements, synergies and efficiencies; (v)
expectations regarding the development, growth and exploration
potential of the Company’s operations, projects and investments,
including, without limitation, returns, IRR, schedule, decision
dates, mine life, commercial start, first production, capital
average production, average costs, impacts of improvement or
expansion projects and upside potential; (vi) expectations
regarding future investments or divestitures; (vii) expectations
regarding free cash flow, future dividends plans, share repurchases
and returns to stockholders; (viii) expectations regarding future
mineralization, including, without limitation, expectations
regarding reserves and recoveries; (ix) estimates of future closure
costs and liabilities; (x) expectations regarding the timing and/or
likelihood of future borrowing, future debt repayment, financial
flexibility and cash flow; (xi) expectations regarding the future
success of exploration, development of the project pipeline,
on-going integration work and Nevada joint venture; (xii)
expectations regarding expense outlook, including G&A, interest
expense, depreciation and amortization and tax rate, and (xiii)
expectations regarding closing of pending divestitures, including
Red Lake and the Company’s stake in Continental Gold. Estimates or
expectations of future events or results are based upon certain
assumptions, which may prove to be incorrect. Such assumptions,
include, but are not limited to: (i) there being no significant
change to current geotechnical, metallurgical, hydrological and
other physical conditions; (ii) permitting, development, operations
and expansion of operations and projects being consistent with
current expectations and mine plans, including, without limitation,
receipt of export approvals; (iii) political developments in any
jurisdiction in which the Company operates being consistent with
its current expectations; (iv) certain exchange rate assumptions
being approximately consistent with current levels; (v) certain
price assumptions for gold, copper, silver, zinc, lead and oil;
(vi) prices for key supplies being approximately consistent with
current levels; (vii) the accuracy of current mineral reserve and
mineralized material estimates; (viii) other planning assumptions,
and (ix) the timely satisfaction of closing conditions and receipt
of approvals in connection with pending divestitures .. In
addition, with respect to plans related to future dividends,
investors are cautioned that declaration and payment of future
dividends remain at the discretion of the Board of Directors and
will be determined based on Newmont’s financial results, balance
sheet strength, cash and liquidity requirements, future prospects,
gold price fluctuations and other factors deemed relevant by the
Board. The planned dividend increase reflects management’s
expectations. However, 2020 dividends have not yet been approved or
declared by the Board of Directors. The Board of Directors reserves
all powers related to the declaration and payment of dividends.
Consequently, in determining the dividend to be declared and paid
on the common stock of the Company, the Board of Directors may
revise or terminate such dividend plans at any time without prior
notice. Further, with respect to the stock repurchase program,
investors are reminded that the extent to which the Company
repurchases its shares, and the timing of such repurchases, will
depend upon a variety of factors, including trading volume, market
conditions, legal requirements, business conditions and other
factors. As such, no guarantees can be made with respect to the
impact of the program. The repurchase program may be discontinued
at any time, and the program does not obligate the Company to
acquire any specific number of shares of its common stock. For a
more detailed discussion of risks and other factors that might
impact future looking statements, see the Company’s Annual Report
on Form 10-K for the year ended December 31, 2019 filed with the
U.S. Securities and Exchange Commission (the “SEC”), under the
heading “Risk Factors”, available on the SEC website or
www.newmont.com. The Company does not undertake any obligation to
release publicly revisions to any “forward-looking statement,”
including, without limitation, outlook, to reflect events or
circumstances after the date of this news release, or to reflect
the occurrence of unanticipated events, except as may be required
under applicable securities laws. Investors should not assume that
any lack of update to a previously issued “forward-looking
statement” constitutes a reaffirmation of that statement. Continued
reliance on “forward-looking statements” is at investors’ own
risk.
The “reserves” disclosed in this release have been prepared in
compliance with Industry Guide 7 published by the SEC. As used in
this news release, the term “reserve” means that part of a mineral
deposit that can be economically and legally extracted or produced
at the time of the reserve determination. The term “economically,”
as used in this definition, means that profitable extraction or
production has been established or analytically demonstrated in a
feasibility study to be viable and justifiable under reasonable
investment and market assumptions. The term “legally,” as used in
this definition, does not imply that all permits needed for mining
and processing have been obtained or that other legal issues have
been completely resolved. However, for a reserve to exist, Newmont
must have a justifiable expectation, based on applicable laws and
regulations, that issuance of permits or resolution of legal issues
necessary for mining and processing at a particular deposit will be
accomplished in the ordinary course and in a timeframe consistent
with Newmont’s current mine plans. Reserves in this news release
are aggregated from the proven and probable classes. For a
breakdown, please see the Company’s Annual Report for the “Proven
and Probable Reserve” and “Mineralized Material” tables prepared in
compliance with the SEC’s Industry Guide 7, available at
www.newmont.com and on www.sec.gov. Investors are reminded that
reserves notes in this release are estimates as of December 31,
2019.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200220005252/en/
Media Contact Omar Jabara,
303.837.5114 omar.jabara@newmont.com Investor
Contact Jessica Largent, 303.837.5484
jessica.largent@newmont.com
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