Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont
Goldcorp or the Company) today announced third quarter 2019
results.
- Net income: Delivered GAAP net income from continuing
operations attributable to Newmont Goldcorp stockholders of $2,226
million or $2.71 per diluted share; delivered adjusted net income1
of $292 million or $0.36 per diluted share, an increase of $0.03
compared to the prior year quarter
- EBITDA: Generated $1,079 million in adjusted EBITDA2, an
increase of 70 percent from the prior year quarter
- Cash flow: Reported consolidated cash flow from
continuing operations of $793 million and free cash flow3 of $365
million, an increase of 85 percent and 137 percent over the prior
year quarter, respectively
- Gold costs applicable to sales (CAS)4: Reported CAS of
$733 per ounce, an increase of 6 percent over the prior year
quarter
- Gold all-in sustaining costs (AISC)5: Reported AISC of
$987 per ounce, an increase of 10 percent over the prior year
quarter
- Attributable gold production: Produced 1.64 million
ounces of gold, an increase of 28 percent over the prior year
quarter
- Portfolio improvements: Closed the Nevada Gold Mines
joint venture; divested the Nimba iron ore project in Guinea;
announced process to review potential sale opportunities for Red
Lake in Canada; achieved commercial production at the Borden mine
in Canada, Ahafo Mill Expansion in Ghana, and Quecher Main in Peru;
advanced Tanami Expansion 2 to execution
- Financial strength: Ended the quarter with $2.7 billion
of consolidated cash and net debt of $4.8 billion, supporting an
investment-grade credit profile; declared a third quarter dividend
of $0.14 per share
- Outlook: 2019 attributable production of 6.3 million
ounces, CAS at $715 per ounce and AISC at $965 per ounce
“Newmont Goldcorp generated $1,079 million in adjusted EBITDA
and $365 million in free cash flow for the third quarter, building
momentum for an even stronger fourth quarter,” said Tom Palmer,
President and Chief Executive Officer. “We expect to deliver $240
million in annual run-rate improvements by the end of 2019 and
exceed our initial synergy targets from the Goldcorp acquisition.
We also continued to strengthen our portfolio and advance
profitable growth by bringing on Borden, the Ahafo Mill Expansion
and Quecher Main on time and within budget.”
Third Quarter 2019 Summary Results
Net income (loss) from continuing operations attributable
to Newmont stockholders for the quarter was $2,226 million or $2.71
per diluted share, an increase of $2,387 million from the prior
year quarter primarily due to the gain recognized on the formation
of Nevada Gold Mines as well as higher production and realized gold
prices.
Adjusted net income was $292 million or $0.36 per diluted
share, compared to $175 million or $0.33 per diluted share in the
prior year quarter. The adjustments to net income of $2.35
primarily related to a gain on the formation of Nevada Gold Mines,
transaction costs associated with the Newmont Goldcorp transaction,
tax and valuation allowance adjustments, changes in the fair value
of investments, and reclamation and remediation charges.
Revenue rose 57 percent to $2,713 million for the quarter
primarily due to higher realized gold prices and higher sales
volumes, including a full quarter from the Goldcorp assets.
Average realized price6 for gold was $1,476, an increase
of $275 per ounce over the prior year quarter; average realized
price for copper was $2.37, a decrease of $0.13 per pound over the
prior year quarter; average realized price for silver, lead and
zinc were $17.18 per ounce, $0.84 per pound and $0.81 per pound,
respectively.
Gold CAS increased 29 percent to $1,232 million for the
quarter due to a full quarter of costs included from the Goldcorp
assets. Gold CAS per ounce increased 6 percent from the prior year
quarter to $733 per ounce primarily due to gold price-related
royalties, and higher unit costs at Peñasquito and Red Lake,
partially offset by higher ounces sold and lower stockpile and
leachpad inventory adjustments.
Gold AISC increased 10 percent to $987 per ounce for the
quarter primarily due to higher gold CAS per ounce and higher
sustaining capital spend.
Attributable gold production7 increased 28 percent to
1.64 million ounces for the quarter primarily due to new production
from the Goldcorp assets and higher grades at Ahafo, partially
offset by lower grades at KCGM, Boddington, Yanacocha and
Merian.
Attributable gold equivalent ounce (GEO) production from
other metals increased to 236 thousand ounces primarily due to
new silver, lead and zinc production from Peñasquito, partially
offset by the classification of copper as a by-product following
the formation of Nevada Gold Mines and lower copper grades at
Boddington. CAS from other metals totaled $160 million for
the quarter. CAS per GEO increased 5 percent to $747 per ounce
primarily due to an unfavorable strip ratio and higher mill
maintenance costs at Boddington in Australia. AISC per GEO
increased 33 percent to $1,155 per ounce primarily due to higher
sustaining capital spend, higher treatment and refining costs and
higher CAS per GEO.
Capital expenditures8 rose by 56 percent to $428 million,
primarily due to increased sustaining capital investment from a
full quarter with the Goldcorp assets and higher spending for
growth projects, including Quecher Main, Ahafo Mill Expansion,
Tanami Expansion 2, Yanacocha Sulfides, and Ahafo North.
Consolidated operating cash flow from continuing
operations increased 85 percent from the prior year quarter to
$793 million due to higher realized gold prices and inclusion of
sales from the Goldcorp assets, partially offset by costs related
to the Newmont Goldcorp transaction. Free cash flow also
increased to $365 million for the quarter, primarily due to higher
operating cash flow, partially offset by higher capital
expenditures.
Balance sheet ended the quarter with $2.7 billion of
consolidated cash and a leverage ratio of 1.4x net debt to pro
forma adjusted EBITDA9, issued $700 million of 2.800 percent Senior
Notes due 2029 and retired $626 million of 5.125 percent Senior
Notes due 2019 on October 1.
Corporate update
Nevada Gold Mines joint venture: On July 1, 2019, Newmont
Goldcorp and Barrick Gold Corporation consummated the transaction
establishing Nevada Gold Mines LLC (NGM). NGM is owned 38.5 percent
by Newmont Goldcorp and owned 61.5 percent and operated by Barrick.
The formation of NGM diversifies the Company’s footprint in Nevada
and allows Newmont Goldcorp 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. Third quarter EBITDA for
NGM was $234 million. Attributable gold production was 344 thousand
ounces with CAS of $701 per ounce and AISC of $920 per ounce.
Projects update
Newmont Goldcorp’s capital-efficient project pipeline supports
stable production with improving margins and mine life. Near-term
development capital projects and recently completed projects are
presented below. Funding for Musselwhite Materials Handling has
been approved and the project is in execution. Additional projects
not listed below represent incremental improvements to production
and cost guidance. Internal rates of return (IRR) on these projects
are calculated at a $1,200 gold price.
- Quecher Main (South America) adds
oxide production at Yanacocha, leverages existing infrastructure
and enables potential future growth at Yanacocha. First production
was achieved in late 2018 and commercial production was declared on
October 31, 2019. Quecher Main extends the life of the Yanacocha
operation to 2027 with average annual gold production of
approximately 200,000 ounces per year between 2020 and 2025 (100
percent basis). During the same period, incremental CAS is expected
to be between $750 and $850 per ounce and AISC between $900 and
$1,000 per ounce. The full project, including future leach pad
expansions, is expected to be completed for approximately $275
million10 of development capital which is below the Company’s
initial estimate. The project IRR is expected to be 15
percent.
- Ahafo Mill Expansion (Africa) is
designed to maximize resource value by improving production margins
and accelerating stockpile processing. The project also supports
profitable development of Ahafo’s highly prospective underground
resources. First production was achieved in September 2019 and
commercial production was declared on October 15, 2019. The
expansion is expected to increase average annual gold production by
between 75,000 and 100,000 ounces per year for the first five years
beginning in 2020. Capital cost for the project was approximately
$175 million. The project IRR is expected to be more than 20
percent.
- Borden, North America (North
America) is a new underground mine expected to extend profitable
production at the Porcupine complex. Commercial production was
declared on October 1, 2019.
- 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 after development progress was impacted by
the conveyor fire at Musselwhite.
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 income (loss) attributable to
Newmont stockholders.
3
Non-GAAP measure. See end of this
release for reconciliation to Net cash provided by operating
activities.
4
Non-GAAP measure. See end of this
release for reconciliation to Costs applicable to sales.
5
Non-GAAP measure. See end of this
release for reconciliation to Costs applicable to sales.
6
Non-GAAP measure. See end of this
release for reconciliation to Sales.
7
Attributable gold production
includes 94,000 ounces from the Company’s equity method investment
in Pueblo Viejo (40%)
8
Capital expenditures refers to
Additions to property plant and mine development from the
Consolidated Statements of Cash Flows.
9
Non-GAAP measure. See end of this
release for reconciliation.
10
The Quecher Main project has
incurred development capital costs of approximately $185 million
through October 31, 2019, and will complete Phase 3 and 4 of the
leach pad expansion over the next 3 years with a remaining capital
investment of approximately $90 million.
Outlook
Newmont Goldcorp’s 2019 outlook reflects a full-year of Newmont
operated assets and the Goldcorp assets from April 18, 2019. The
Company does not include development projects that have not yet
been funded or reached execution stage in the outlook below, which
represents upside to guidance. The Nevada guidance includes the
Company’s owned and operated Nevada assets through June 30, 2019,
and has been updated to reflect the Company’s ownership interest in
Nevada Gold Mines for July 1, 2019 to December 31, 2019. Longer
term guidance is expected to be updated on December 2, 2019.
Attributable gold production is expected to be 6.3
million ounces in 2019. Production is fourth quarter weighted with
the completion of the Ahafo Mill Expansion in Africa, the Borden
project in Canada and higher grades expected at Cerro Negro,
Éléonore, and Tanami.
- North America production is expected to be 1.1 million ounces
in 2019. The outlook includes the impact from the blockades at
Peñasquito, the conveyor fire at Musselwhite, installation of
additional safety controls at Red Lake, and lower grades in the
third quarter at Éléonore.
- South America production is expected to be 1.3 million ounces
in 2019 with a strong fourth quarter as Cerro Negro reaches higher
grades from the Eureka and Mariana Norte zones.
- Australia production is expected to be 1.4 million ounces in
2019 reflecting the impact of current mining restrictions at
KCGM.
- Africa production is expected to be 1.1 million ounces in 2019
with a full year of production from Subika Underground, higher
grades from Subika open pit and improved mill throughput in the
second half of the year with completion of the Ahafo Mill Expansion
project.
- Nevada production is expected to be 1.5 million ounces in 2019,
which has been updated to reflect Nevada Gold mines for the second
half of 2019.
Gold cost outlook – CAS is expected to be $715 per
ounce and AISC is expected to be $965 per ounce in 2019.
- North America CAS is expected to be $895 per ounce and AISC is
expected to be $1,210 per ounce in 2019. The outlook includes the
impact from the blockades at Peñasquito, the conveyor fire at
Musselwhite, installation of additional safety controls at Red
Lake, and lower grades in the third quarter at Éléonore.
- South America CAS is expected to be $630 per ounce and AISC is
expected to be $785 per ounce in 2019.
- Australia CAS is expected to be $740 per ounce in 2019 and AISC
is expected to be $920 in 2019 and has been updated to reflect
improved unit costs at Boddington.
- Africa CAS is expected to be $585 per ounce in 2019 and AISC is
expected to be $770 per ounce in 2019.
- Nevada CAS is expected to be $750 per ounce in 2019 and AISC is
expected to be $945 per ounce in 2019, which has improved with the
inclusion of Nevada Gold Mines for the second half of 2019.
Co-product GEOs – Attributable production is expected to
be 625,000 GEOs in 2019, which includes silver, zinc, and lead
production from Peñasquito, and copper production from Boddington
and from Phoenix through June 30, 2019 prior to the formation of
Nevada Gold Mines. CAS is expected to be $820 per GEO and AISC is
expected to be $1,190 per GEO in 2019.
Capital – Total consolidated capital is expected to be
$1,530 million for 2019. Development capital of $550 million in
2019 includes investments in the Borden and Musselwhite Materials
Handling projects in North America, Quecher Main in South America,
Ahafo Mill Expansion in Africa, and Tanami Power Project in
Australia, and expenditures to advance studies for future projects.
Sustaining capital is expected to be $980 million for 2019 and
includes the Awonsu layback and investments to cover
infrastructure, equipment and ongoing mine development.
Consolidated expense outlook – The Company’s 2019
outlook for general & administrative costs has been lowered to
$315 million, which includes a faster realization of synergies from
the Goldcorp integration. Interest expense is expected to be $280
million and investment in exploration and advanced projects is
expected to be $415 million in 2019 and has been updated to reflect
Nevada Gold Mines. Guidance for depreciation and amortization in
2019 is expected to be $2,050 million.
Assumptions – Newmont Goldcorp’s outlook assumes $1,200
per ounce gold price, $16 per ounce silver price, $2.50 per pound
copper price, $1.05 per pound zinc price, $0.90 per pound lead
price, $0.70 USD/AUD exchange rate, $0.77 USD/CAD exchange rate,
and $65 per barrel WTI oil price.
2019 Outlooka
2019 Outlook +/- 5%
Consolidated
Production
Attributable
Production
Consolidated CAS
Consolidated All-in Sustaining
Costsb
Consolidated Sustaining
Capital Expenditures
Consolidated Development
Capital Expenditures
(Koz, GEO Koz)
(Koz, GEO Koz)
($/oz)
($/oz)
($M)
($M)
North America
1,060
1,060
895
1,210
305
125
South America
1,375
1,295
630
785
120
185
Australia
1,420
1,420
740
920
195
65c
Africa
1,105
1,105
585
770
125
110
Nevada
1,470
1,470
750
945
225
50
Total Goldd
6,400
6,300
715
965
980e
550e
Total Co-products
625
625
820
1,190
2019 Consolidated Expense Outlook ($M) General &
Administrative
315
Interest Expense
280
Depreciation and Amortization
2,050
Advanced Projects & Exploration
415
Adjusted Tax Ratef,g
34%-39%
a
2019 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 November 5, 2019. Outlook is based
upon certain assumptions, including, but not limited to, metal
prices, oil prices, certain exchange rates and other assumptions.
For example, 2019 Outlook assumes $1,200/oz Au, $16/oz Ag, $2.50/lb
Cu, $1.05/lb Zn, $0.90/lb Pb, $0.70 USD/AUD exchange rate, $0.77
USD/CAD exchange rate and $65/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. Estimates include the impact of
the Newmont Goldcorp transaction and the impact of the Nevada Gold
Mines joint venture which closed on July 1, 2019. 2019 Nevada
outlook includes the Company’s owned and operated Nevada assets
through June 30, 2019, and has been updated to reflect the
Company’s ownership interest in Nevada Gold Mines for July 1, 2019
to December 31, 2019. 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 note at the end of this
release.
b
All-in sustaining costs or AISC
as used in the Company’s Outlook is a non-GAAP metric; see below
for further information and reconciliation to consolidated 2019 CAS
outlook.
c
Includes finance lease payments
related to the Tanami Power Project paid over a 10 year term
beginning in 2019.
d
Attributable gold production
outlook includes the Company’s equity investment (40%) in Pueblo
Viejo but does not include other equity investments.
e
Total development capital
includes ~$15 million of corporate and other spend and total
sustaining capital includes ~$10 million of corporate and other
spend.
f
The adjusted tax rate excludes
certain items such as tax valuation allowance adjustments.
g
Assuming average prices of $1,300
per ounce for gold, $16 per ounce for silver, $2.75 per pound for
copper, $0.90 per pound for lead, and $1.05 per pound for zinc and
achievement of current production and sales volumes and cost
estimates, we estimate our consolidated adjusted effective tax rate
related to continuing operations for 2019 will be between
34%-39%.
Three Months Ended September
30,
Nine Months Ended September
30,
Operating Results
2019
2018
% Change
2019
2018
% Change
Attributable Sales (koz)
Attributable gold ounces sold
1,578
1,270
24
%
4,352
3,648
19
%
Attributable gold equivalent ounces
sold
213
60
255
%
357
177
102
%
Average Realized Price ($/oz,
$/lb)
Average realized gold price
$
1,476
$
1,201
23
%
$
1,370
$
1,271
8
%
Average realized copper price
$
2.37
$
2.50
(5
)%
$
2.59
$
2.79
(7
)%
Average realized silver price
$
17.18
$
—
—
%
$
16.23
$
—
—
%
Average realized lead price
$
0.84
$
—
—
%
$
0.81
$
—
—
%
Average realized zinc price
$
0.81
$
—
—
%
$
0.81
$
—
—
%
Attributable Production (koz)
North America
325
82
296
%
657
217
203
%
South America
275
178
54
%
720
463
56
%
Australia
339
385
(12
)%
1,038
1,142
(9
)%
Africa
267
212
26
%
775
621
25
%
Nevada
344
429
(20
)%
1,102
1,214
(9
)%
Pueblo Viejo (40%)1
94
—
—
%
169
—
—
%
Total Gold
1,644
1,286
28
%
4,461
3,657
22
%
North America
203
—
—
%
256
—
—
%
Australia
33
40
(18
)%
104
132
(21
)%
Nevada
—
16
(100
)%
35
48
(27
)%
Total Gold Equivalent Ounces
236
56
321
%
395
180
119
%
CAS Consolidated ($/oz, $/GEO)
North America
$
945
$
825
15
%
$
976
$
710
37
%
South America
$
669
$
636
5
%
$
638
$
704
(9
)%
Australia
$
768
$
691
11
%
$
749
$
703
7
%
Africa
$
563
$
505
11
%
$
586
$
670
(13
)%
Nevada
$
711
$
799
(11
)%
$
761
$
803
(5
)%
Total Gold
$
733
$
691
6
%
$
733
$
729
1
%
Total Gold (by-product)
$
691
$
671
3
%
$
717
$
705
2
%
North America
$
756
$
—
—
%
$
980
$
—
—
%
Australia
$
758
$
675
12
%
$
819
$
727
13
%
Nevada
$
—
$
861
(100
)%
$
750
$
886
(15
)%
Total Gold Equivalent Ounces
$
747
$
713
5
%
$
908
$
768
18
%
AISC Consolidated ($/oz)
North America
$
1,276
$
927
38
%
$
1,290
$
863
49
%
South America
$
841
$
822
2
%
$
803
$
870
(8)
%
Australia
$
944
$
811
16
%
$
911
$
832
9
%
Africa
$
741
$
679
9
%
$
776
$
818
(5
)%
Nevada
$
915
$
969
(6
)%
$
956
$
982
(3
)%
Total Gold
$
987
$
895
10
%
$
974
$
937
4
%
Total Gold (by-product)
$
997
$
882
13
%
$
986
$
920
7
%
North America
$
1,226
$
—
—
%
$
1,471
$
—
—
%
Australia
$
907
$
803
13
%
$
966
$
865
12
%
Nevada
$
—
$
1,114
(100
)%
$
894
$
1,095
(18
)%
Total Gold Equivalent Ounces
$
1,155
$
867
33
%
$
1,259
$
924
36
%
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 GOLDCORP
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in millions except
per share)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Sales
$
2,713
$
1,726
$
6,773
$
5,205
Costs and expenses
Costs applicable to sales (1)
1,392
995
3,736
2,989
Depreciation and amortization
548
299
1,347
879
Reclamation and remediation
62
31
165
96
Exploration
88
48
198
142
Advanced projects, research and
development
43
37
102
107
General and administrative
84
59
224
181
Impairment of long-lived assets
3
366
4
366
Other expense, net
35
5
239
29
2,255
1,840
6,015
4,789
Other income (expense):
Gain on formation of Nevada Gold Mines
2,366
—
2,366
—
Other income, net
31
37
166
197
Interest expense, net of capitalized
interest
(77
)
(51
)
(217
)
(153
)
2,320
(14
)
2,315
44
Income (loss) before income and mining tax
and other items
2,778
(128
)
3,073
460
Income and mining tax benefit
(expense)
(558
)
(3
)
(703
)
(126
)
Equity income (loss) of affiliates
32
(9
)
53
(25
)
Net income (loss) from continuing
operations
2,252
(140
)
2,423
309
Net income (loss) from discontinued
operations
(48
)
16
(100
)
56
Net income (loss)
2,204
(124
)
2,323
365
Net loss (income) attributable to
noncontrolling interests
(26
)
(21
)
(83
)
(26
)
Net income (loss) attributable to Newmont
stockholders
$
2,178
$
(145
)
$
2,240
$
339
Net income (loss) attributable to Newmont
stockholders:
Continuing operations
$
2,226
$
(161
)
$
2,340
$
283
Discontinued operations
(48
)
16
(100
)
56
$
2,178
$
(145
)
$
2,240
$
339
Net income (loss) per common share
Basic:
Continuing operations
$
2.72
$
(0.31
)
$
3.30
$
0.53
Discontinued operations
(0.06
)
0.04
(0.14
)
0.11
$
2.66
$
(0.27
)
$
3.16
$
0.64
Diluted:
Continuing operations
$
2.71
$
(0.31
)
$
3.30
$
0.53
Discontinued operations
(0.06
)
0.04
(0.14
)
0.10
$
2.65
$
(0.27
)
$
3.16
$
0.63
(1) Excludes Depreciation and amortization and Reclamation and
remediation.
NEWMONT GOLDCORP
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Operating activities:
Net income (loss)
$
2,204
$
(124
)
$
2,323
$
365
Adjustments:
Depreciation and amortization
548
299
1,347
879
Stock-based compensation
22
19
76
57
Reclamation and remediation
56
24
151
85
Loss (income) from discontinued
operations
48
(16
)
100
(56
)
Deferred income taxes
435
(81
)
422
(100
)
Impairment of long-lived assets
4
366
4
366
Gain on asset and investment sales,
net
1
(1
)
(32
)
(100
)
Gain on formation of Nevada Gold Mines
(2,366
)
—
(2,366
)
—
Write-downs of inventory and stockpiles
and ore on leach pads
4
62
108
220
Other operating adjustments
(13
)
37
(56
)
46
Net change in operating assets and
liabilities
(150
)
(157
)
(409
)
(667
)
Net cash provided by (used in) operating
activities of continuing operations
793
428
1,668
1,095
Net cash provided by (used in) operating
activities of discontinued operations
(2
)
(3
)
(7
)
(8
)
Net cash provided by (used in) operating
activities
791
425
1,661
1,087
Investing activities:
Additions to property, plant and mine
development
(428
)
(274
)
(1,033
)
(763
)
Acquisitions, net (1)
6
(99
)
127
(138
)
Purchases of investments
(8
)
(11
)
(94
)
(17
)
Return of investment from an equity method
investee
3
—
83
—
Proceeds from sales of investments
3
1
59
16
Proceeds from sales of other assets
—
18
29
23
Other
(14
)
(2
)
12
(5
)
Net cash provided by (used in) investing
activities
(438
)
(367
)
(817
)
(884
)
Financing activities:
Repayment of debt
—
—
(1,250
)
—
Dividends paid to common stockholders
(109
)
(76
)
(775
)
(226
)
Proceeds from issuance of debt, net
690
—
690
—
Distributions to noncontrolling
interests
(44
)
(38
)
(137
)
(107
)
Funding from noncontrolling interests
29
25
75
77
Payments for withholding of employee taxes
related to stock-based compensation
(3
)
—
(48
)
(39
)
Payments on lease and other financing
obligations
(11
)
—
(37
)
(3
)
Proceeds from sale of noncontrolling
interests
—
—
—
48
Repurchases of common stock
—
(26
)
—
(96
)
Other
(22
)
—
(24
)
—
Net cash provided by (used in) financing
activities
530
(115
)
(1,506
)
(346
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
(2
)
(2
)
(4
)
(4
)
Net change in cash, cash equivalents and
restricted cash
881
(59
)
(666
)
(147
)
Cash, cash equivalents and restricted cash
at beginning of period
1,942
3,210
3,489
3,298
Cash, cash equivalents and restricted cash
at end of period
$
2,823
$
3,151
$
2,823
$
3,151
Reconciliation of cash, cash equivalents
and restricted cash:
Cash and cash equivalents
$
2,712
$
3,068
$
2,712
$
3,068
Restricted cash included in Other current
assets
19
1
19
1
Restricted cash included in Other
noncurrent assets
92
82
92
82
Total cash, cash equivalents and
restricted cash
$
2,823
$
3,151
$
2,823
$
3,151
(1)
Acquisitions, net for the three
and nine months ended September 30, 2019 is comprised of cash, cash
equivalents and restricted cash acquired, net of cash paid, in the
Newmont Goldcorp transaction of $- and $121, respectively, and
restricted cash acquired in the formation of Nevada Gold Mines of
$6 and $6, respectively. In the 2018 periods, Acquisitions, net is
comprised of mineral interest acquisitions, primarily Galore
Creek.
.
NEWMONT GOLDCORP
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
At September 30,
At December 31,
2019
2018
ASSETS
Cash and cash equivalents
$
2,712
$
3,397
Trade receivables
383
254
Investments
157
48
Inventories
1,102
630
Stockpiles and ore on leach pads
760
697
Other current assets
584
251
Current assets
5,698
5,277
Property, plant and mine development,
net
26,197
12,258
Investments
3,295
271
Stockpiles and ore on leach pads
1,521
1,866
Deferred income tax assets
440
401
Goodwill
3,078
58
Other non-current assets
534
584
Total assets
$
40,763
$
20,715
LIABILITIES
Debt
$
626
$
626
Accounts payable
532
303
Employee-related benefits
356
305
Income and mining taxes payable
132
71
Lease and other financing obligations
97
27
Other current liabilities
868
455
Current liabilities
2,611
1,787
Debt
6,139
3,418
Lease and other financing obligations
600
190
Reclamation and remediation
liabilities
3,441
2,481
Deferred income tax liabilities
2,965
612
Employee-related benefits
454
401
Silver streaming agreement
1,069
—
Other non-current liabilities
1,000
314
Total liabilities
18,279
9,203
Contingently redeemable noncontrolling
interest
49
47
EQUITY
Common stock
1,317
855
Treasury stock
(118
)
(70
)
Additional paid-in capital
18,460
9,618
Accumulated other comprehensive income
(loss)
(265
)
(284
)
Retained earnings
2,036
383
Newmont stockholders' equity
21,430
10,502
Noncontrolling interests
1,005
963
Total equity
22,435
11,465
Total liabilities and equity
$
40,763
$
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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net income (loss) attributable to Newmont
stockholders
$
2,178
$
(145
)
$
2,240
$
339
Net loss (income) attributable to Newmont
stockholders from discontinued operations (1)
48
(16
)
100
(56
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
2,226
(161
)
2,340
283
Gain on formation of Nevada Gold Mines
(2)
(2,366
)
—
(2,366
)
—
Goldcorp transaction and integration costs
(3)
26
—
185
—
Change in fair value of investments
(4)
(19
)
26
(75
)
21
Reclamation and remediation charges, net
(5)
17
—
49
8
Loss (gain) on asset and investment sales,
net (6)
1
(1
)
(30
)
(100
)
Nevada JV transaction and integration
costs (7)
3
—
26
—
Restructuring and other, net (8)
10
1
15
13
Impairment of long-lived assets (9)
2
366
3
366
Impairment of investments (10)
1
—
2
—
Emigrant leach pad write-down (11)
—
29
—
29
Tax effect of adjustments (12)
439
(104
)
426
(88
)
Valuation allowance and other tax
adjustments (13)
(48
)
19
(15
)
(28
)
Adjusted net income (loss)
$
292
$
175
$
560
$
504
Net income (loss) per share, basic
(14)
$
2.66
$
(0.27
)
$
3.16
$
0.64
Net loss (income) attributable to Newmont
stockholders from discontinued operations
0.06
(0.04
)
0.14
(0.11
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
2.72
(0.31
)
3.30
0.53
Gain on formation of Nevada Gold Mines
(2.88
)
—
(3.34
)
—
Goldcorp transaction and integration
costs
0.03
—
0.26
—
Change in fair value of investments
(0.02
)
0.05
(0.10
)
0.04
Reclamation and remediation charges,
net
0.02
—
0.07
0.01
Loss (gain) on asset and investment sales,
net
—
(0.01
)
(0.04
)
(0.19
)
Nevada JV transaction and integration
costs
—
—
0.05
—
Restructuring and other, net
0.01
—
0.03
0.02
Impairment of long-lived assets
—
0.69
—
0.69
Impairment of investments
—
—
—
—
Emigrant leach pad write-down
—
0.05
—
0.05
Tax effect of adjustments
0.54
(0.18
)
0.60
(0.15
)
Valuation allowance and other tax
adjustments
(0.06
)
0.04
(0.04
)
(0.05
)
Adjusted net income (loss) per share,
basic
$
0.36
$
0.33
$
0.79
$
0.95
Net income (loss) per share, diluted
(14)
$
2.65
$
(0.27
)
$
3.16
$
0.63
Net loss (income) attributable to Newmont
stockholders from discontinued operations
0.06
(0.04
)
0.14
(0.10
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
2.71
(0.31
)
3.30
0.53
Gain on formation of Nevada Gold Mines
(2.88
)
—
(3.34
)
—
Goldcorp transaction and integration
costs
0.03
—
0.26
—
Change in fair value of investments
(0.02
)
0.05
(0.10
)
0.04
Reclamation and remediation charges,
net
0.02
—
0.07
0.01
Loss (gain) on asset and investment sales,
net
—
(0.01
)
(0.04
)
(0.19
)
Nevada JV transaction and integration
costs
—
—
0.05
—
Restructuring and other, net
0.01
—
0.03
0.02
Impairment of long-lived assets
—
0.69
—
0.68
Impairment of investments
—
—
—
—
Emigrant leach pad write-down
—
0.05
—
0.05
Tax effect of adjustments
0.54
(0.18
)
0.60
(0.16
)
Valuation allowance and other tax
adjustments
(0.05
)
0.04
(0.04
)
(0.04
)
Adjusted net income (loss) per share,
diluted
$
0.36
0.33
$
0.79
$
0.94
Weighted average common shares
(millions):
Basic
820
533
708
533
Diluted (15)
822
535
709
535
(1)
Net loss (income) attributable to
Newmont stockholders from discontinued operations relates to (i)
adjustments in our Holt royalty obligation, presented net of tax
expense (benefit) of $-, $6, $- and $15, respectively, and (ii)
adjustments to our Batu Hijau Contingent Consideration, presented
net of tax expense (benefit) of $-, $(1), $- and $- respectively.
For additional information regarding our discontinued operations,
see Note 13 to our Condensed 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. For additional information regarding NGM,
see Note 4 to our Condensed Consolidated Financial Statements.
(3)
Goldcorp transaction and
integration costs, included in Other expense, net, represents costs
incurred related to the Newmont Goldcorp transaction during
2019.
(4)
Change in fair value of
marketable equity securities, included in Other income, net,
primarily represents unrealized holding gains and losses on
marketable equity securities and our investment instruments in
Continental Gold Inc. For additional information regarding our
investment in Continental, see Note 18 to our Condensed
Consolidated Financial Statements.
(5)
Reclamation and remediation
charges, included in Reclamation and remediation, represent
revisions to remediation plans at the Company’s former historic
mining operations. The 2019 charges include adjustments related to
a review of the project cost estimates at the Dawn remediation
site, as well as increased water management costs at the Con
Mine.
(6)
Loss (gain) on asset and
investment sales, included in Other income, net, primarily
represents a gain on the sale of exploration property in North
America 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. Amounts are presented net of income
(loss) attributable to noncontrolling interests of $-, $-, $2 and
$-, 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)
Restructuring and other, net
included in Other expense, net, primarily represents certain costs
associated with severance and employee-related benefits, and legal
and other settlements of $2, $1, $7, $16. Restructuring and other,
net included in Other income, net, primarily represents pension
curtailments of $8, $-, $8, $-Amounts are presented net of income
(loss) attributable to noncontrolling interests of $-, $-, $- and
$(3), respectively.
(9)
Impairment of long-lived assets,
included in Impairment of long-lived assets, represents non-cash
write-downs of long-lived assets. The 2018 impairments relate to
long-lived assets in North America in the third quarter of 2018.
Amounts are presented net of income (loss) attributable to
noncontrolling interests of $(1), $-, $(1) and $-,
respectively.
(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 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 in the third quarter of 2018.
(12)
The tax effect of adjustments,
included in Income and mining tax benefit (expense), represents the
tax effect of adjustments in footnotes (2) through (11), as
described above, and are calculated using the applicable regional
tax rate.
(13)
Valuation allowance and other tax
adjustments, 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 in
the three and nine months ended September 30, 2019 is due to
increases or (decreases) to net operating losses, tax credit
carryovers and other deferred tax assets subject to valuation
allowance of $87 and $111 respectively, the effects of changes in
foreign exchange rates on deferred tax assets and liabilities of
$(147) and $(150), respectively, additions to the reserve for
uncertain tax positions of $7 and $21, respectively and other tax
adjustments of $8 and $5, respectively. The adjustment in the three
and nine months ended September 30, 2018 is due to increases to net
operating losses, tax credit carryovers and other deferred tax
assets of $13 and $32, respectively, and other tax adjustments of
$5 and $4 respectively. The adjustment in the nine months ended
September 30, 2018 is also due to a second quarter reduction to the
provisional expense for the Tax Cuts and Jobs Act of $(45), a
second quarter release of valuation allowance on capital losses of
$(15). Amounts are presented net of income (loss) attributable to
noncontrolling interests of $(3), $1, $(2) and $(4),
respectively.
(14)
Per share measures may not
recalculate due to rounding.
(15)
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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net income (loss) attributable to Newmont
stockholders
$
2,178
$
(145
)
$
2,240
$
339
Net income (loss) attributable to
noncontrolling interests
26
21
83
26
Net loss (income) from discontinued
operations (1)
48
(16
)
100
(56
)
Equity loss (income) of affiliates
(32
)
9
(53
)
25
Income and mining tax expense
(benefit)
558
3
703
126
Depreciation and amortization
548
299
1,347
879
Interest expense, net
77
51
217
153
EBITDA
$
3,403
$
222
$
4,637
$
1,492
Adjustments:
Gain on formation of Nevada Gold Mines
(2)
$
(2,366
)
$
—
$
(2,366
)
$
—
Goldcorp transaction and integration costs
(3)
26
—
185
—
Change in fair value of investments
(4)
(19
)
26
(75
)
21
Reclamation and remediation charges
(5)
17
—
49
8
Loss (gain) on asset and investment sales
(6)
1
(1
)
(32
)
(100
)
Nevada JV transaction and integration
costs (7)
3
—
26
—
Restructuring and other (8)
10
1
15
16
Impairment of long-lived assets (9)
3
366
4
366
Impairment of investments (10)
1
—
2
—
Emigrant leach pad write-down (11)
—
22
—
22
Adjusted EBITDA
$
1,079
$
636
$
2,445
$
1,825
(1)
Net loss (income) from
discontinued operations relates to (i) adjustments in our Holt
royalty obligation, presented net of tax expense (benefit) of $-,
$6, $- and $15, respectively, and (ii) adjustments to our Batu
Hijau Contingent Consideration, presented net of tax expense
(benefit) of $-, $(1), $-, and $-, respectively. For additional
information regarding our discontinued operations, see Note 13 to
our Condensed 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. For additional information regarding NGM,
see Note 4 to our Condensed Consolidated Financial Statements.
(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
marketable equity securities, included in Other income, net,
primarily represents unrealized holding gains and losses on
marketable equity securities and our investment instruments in
Continental Gold Inc. For additional information regarding our
investment in Continental, see Note 20 to our Condensed
Consolidated Financial Statements.
(5)
Reclamation and remediation
charges, included in Reclamation and remediation, represent
revisions to remediation plans at the Company’s former historic
mining operations. The 2019 charges include adjustments related to
a review of the project cost estimates at the Dawn remediation
site, as well as increased water management costs at the Con
Mine.
(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
associated with severance and employee-related benefits, and legal
and other settlements of $2, $1, $7, $16. Restructuring and other,
net included in Other income, net, primarily represents pension
curtailments of $8, $-, $8, $-.
(9)
Impairment of long-lived assets,
included in Impairment of long-lived assets, represents non-cash
write-downs of long-lived assets. The 2018 impairments relate to
long-lived assets in North America in the third quarter of
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 the third quarter of
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
September 30, 2019
Income (Loss) before Income and Mining Tax
and other items, NGM (1)
$
85
Depreciation and amortization (1)
149
NGM EBITDA
$
234
(1) See Note 5 to the Condensed
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 Condensed 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
Condensed 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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Net cash provided by (used in) operating
activities
$
791
$
425
$
1,661
$
1,087
Less: Net cash used in (provided by)
operating activities of discontinued operations
2
3
7
8
Net cash provided by (used in) operating
activities of continuing operations
793
428
1,668
1,095
Less: Additions to property, plant and
mine development
(428
)
(274
)
(1,033
)
(763
)
Free Cash Flow
$
365
$
154
$
635
$
332
Net cash provided by (used in) investing
activities (1)
$
(438
)
$
(367
)
$
(817
)
$
(884
)
Net cash provided by (used in) financing
activities
$
530
$
(115
)
$
(1,506
)
$
(346
)
(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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Costs applicable to sales (1)(2)
$
1,232
$
952
$
3,412
$
2,853
Gold sold (thousand ounces)
1,682
1,378
4,656
3,914
Costs applicable to sales per ounce
(3)
$
733
$
691
$
733
$
729
(1)
Includes by-product credits of
$31 and $60 during the three and nine months ended September 30,
2019, respectively, and $10 and $41 during the three and nine
months ended September 30, 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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Costs applicable to sales (1)(2)
$
160
$
43
$
324
$
136
Gold equivalent ounces - other metals
(thousand ounces) (3)
213
60
357
177
Costs applicable to sales per ounce
(4)
$
747
$
713
$
908
$
768
(1)
Includes by-product credits of $-
and $2 during the three and nine months ended September 30, 2019,
respectively, and $1 and $3 during the three and nine months ended
September 30, 2018, respectively.
(2)
Excludes Depreciation and
amortization and Reclamation and remediation.
(3)
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 for 2019 and Gold ($1,250/oz.) and Copper
($2.70/lb.) pricing for 2018.
(4)
Per ounce measures may not
recalculate due to rounding.
Costs applicable to sales per ounce for
Nevada Gold Mines (NGM)
Three Months Ended
September 30,
2019
Costs applicable to sales, NGM (1)(2)
$
235
Gold sold (thousand ounces), NGM
334
Costs applicable to sales per ounce, NGM
(3)
$
701
(1)
See Note 5 to the Condensed
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 Condensed 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 Condensed 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 Condensed
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 Condensed
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 Condensed 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
Condensed 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
September 30, 2019
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Costs (7)(8)
Costs
Sold
oz. (9)
Gold
CC&V
$
65
$
—
$
2
$
—
$
—
$
—
$
13
$
80
73
$
1,087
Red Lake
45
2
2
—
—
—
8
57
31
1,872
Musselwhite
8
1
2
—
—
—
10
21
—
—
Porcupine
62
1
—
—
—
—
8
71
84
843
Éléonore
69
—
—
—
—
—
9
78
83
932
Peñasquito
39
1
—
—
—
1
18
59
35
1,681
Other North America
—
—
—
23
1
—
1
25
—
—
North America
288
5
6
23
1
1
67
391
306
1,276
Yanacocha
107
13
4
1
—
—
6
131
149
881
Merian
78
1
2
—
—
—
16
97
127
761
Cerro Negro
78
—
11
—
—
—
12
101
118
860
Other South America
—
—
—
2
—
—
—
2
—
—
South America
263
14
17
3
—
—
34
331
394
841
Boddington
146
3
1
—
—
3
19
172
178
958
Tanami
64
—
2
—
—
—
18
84
112
758
Kalgoorlie
60
2
2
—
—
—
5
69
61
1,141
Other Australia
—
—
3
2
—
—
2
7
—
—
Australia
270
5
8
2
—
3
44
332
351
944
Ahafo
98
1
5
—
—
—
23
127
157
811
Akyem
51
8
—
—
—
—
5
64
107
612
Other Africa
—
—
—
3
1
—
—
4
—
—
Africa
149
9
5
3
1
—
28
195
264
741
Nevada Gold Mines
235
10
5
3
2
2
50
307
334
920
Carlin
8
—
—
—
—
—
—
8
11
854
Phoenix
15
—
—
—
—
2
—
17
13
1,187
Twin Creeks
3
—
—
—
—
—
—
3
8
340
Long Canyon
1
—
—
—
—
—
—
1
1
692
Other Nevada
—
—
—
—
—
—
—
—
—
—
Nevada
262
10
5
3
2
4
50
336
367
915
Corporate and Other
—
—
18
50
—
—
8
76
—
—
Total Gold
$
1,232
$
43
$
59
$
84
$
4
$
8
$
231
$
1,661
1,682
$
987
Gold equivalent ounces - other metals
(10)
Peñasquito
$
132
$
3
$
1
$
—
$
—
$
32
$
45
$
213
173
$
1,226
Boddington
28
—
—
—
—
2
3
33
37
907
Phoenix
—
—
—
—
—
—
—
—
3
—
Total Gold Equivalent Ounces
$
160
$
3
$
1
$
—
$
—
$
34
$
48
$
246
213
$
1,155
Consolidated
$
1,392
$
46
$
60
$
84
$
4
$
42
$
279
$
1,907
(1)
Excludes Depreciation and
amortization and Reclamation and remediation.
(2)
Includes by-product credits of
$31 and excludes co-product revenues of $230.
(3)
Includes stockpile and leach pad
inventory adjustments of $1 at NGM.
(4)
Reclamation costs include
operating accretion and amortization of asset retirement costs of
$25 and $21, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $14 and $23,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $1
at Musselwhite, $4 at Porcupine, $2 at Éléonore, $1 at Peñasquito,
$2 at Other North America, $2 at Yanacocha, $1 at Merian, $4 at
Cerro Negro, $9 at Other South America, $6 at Other Australia, $3
at Ahafo, $4 at Akyem, $1 at Other Africa, $8 at NGM and $23 at
Corporate and Other, totaling $71 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 $26,
Nevada JV transaction implementation costs of $3, and restructuring
and other costs of $2.
(7)
Includes sustaining capital
expenditures of $98 for North America, $34 for South America, $44
for Australia, $27 for Africa, $50 for Nevada and $8 for Corporate
and Other, totaling $261 and excludes development capital
expenditures, capitalized interest and the increase in accrued
capital totaling $167. The following are major development
projects: Borden, Musselwhite Materials Handling, Quecher Main,
Yanacocha Sulfides, Tanami Expansion 2, Ahafo North, Ahafo Mill
Expansion and Turquoise Ridge 3rd shaft.
(8)
Includes finance lease payments
for sustaining projects of $18 and excludes finance lease payments
for development projects of $3.
(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
Three Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Sustaining
Sustaining
Ounces (000)
Costs per
September 30, 2018
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Capital (7)
Costs
Sold
oz. (8)
Gold
CC&V
$
68
$
—
$
3
$
1
$
—
$
—
$
6
$
78
82
$
927
Other North America
—
—
—
—
—
—
—
—
—
—
North America
68
—
3
1
—
—
6
78
82
927
Yanacocha
116
15
2
1
—
—
14
148
156
945
Merian
67
—
1
1
3
—
12
84
131
631
Other South America
—
—
—
2
—
—
—
2
—
—
South America
183
15
3
4
3
—
26
234
287
822
Boddington
146
2
—
—
—
6
12
166
198
838
Tanami
71
1
1
—
—
—
16
89
122
736
Kalgoorlie
56
1
1
—
—
—
4
62
77
804
Other Australia
—
—
3
1
—
—
1
5
—
—
Australia
273
4
5
1
—
6
33
322
397
811
Ahafo
62
1
1
—
1
—
14
79
102
770
Akyem
44
5
—
1
—
—
11
61
107
574
Other Africa
—
—
—
2
—
—
—
2
—
—
Africa
106
6
1
3
1
—
25
142
209
679
Carlin
183
1
5
2
—
—
46
237
229
1,035
Phoenix
39
5
1
—
—
1
5
51
39
1,306
Twin Creeks
57
1
4
—
—
—
11
73
92
787
Long Canyon
21
—
—
—
—
—
4
25
43
577
Other Nevada
—
—
1
—
—
—
3
4
—
—
Nevada
300
7
11
2
—
1
69
390
403
969
Corporate and Other
—
—
16
48
—
—
2
66
—
—
Total Gold
$
930
$
32
$
39
$
59
$
4
$
7
$
161
$
1,232
1,378
$
895
Gold equivalent ounces - other metals
(9)
Boddington
$
33
$
—
$
—
$
—
$
—
$
4
$
2
$
39
47
$
803
Phoenix
10
—
—
—
—
—
4
14
13
1,114
Total Gold Equivalent Ounces
$
43
$
—
$
—
$
—
$
—
$
4
$
6
$
53
60
$
867
Consolidated
$
973
$
32
$
39
$
59
$
4
$
11
$
167
$
1,285
(1)
Excludes Depreciation and
amortization and Reclamation and remediation.
(2)
Includes by-product credits of
$11 and excludes co-product revenues of $70.
(3)
Includes stockpile and leach pad
inventory adjustments of $5 at CC&V, $10 at Yanacocha, $18 at
Carlin, and $4 at Twin Creeks. Total stockpile and leach pad
inventory adjustments at Carlin of $40 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
$17 and $15, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $11 and $3,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $1
at CC&V, $8 at Yanacocha, $1 at Merian, $9 at Other South
America, $1 at Tanami, $1 at Kalgoorlie, $1 at Other Australia, $3
at Ahafo, $4 at Akyem, $1 at Other Africa, $3 at Carlin, $7 at Long
Canyon, $5 at Other Nevada, and $1 at Corporate and Other, totaling
$46 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 $1.
(7)
Excludes development capital
expenditures, capitalized interest and the increase in accrued
capital totaling $107. The following are major development
projects: Quecher Main, 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.
Advanced
Projects,
Research and
Treatment
Sustaining
All-In
Costs
Development
General
Other
and
Capital and
All-In
Sustaining
Nine Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Finance Lease
Sustaining
Ounces (000)
Costs per
September 30, 2019
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Payments (7)(8)
Costs
Sold
oz. (9)
Gold
CC&V
$
208
$
3
$
6
$
1
$
2
$
—
$
28
$
248
230
$
1,076
Red Lake
88
2
5
—
—
—
22
117
68
1,734
Musselwhite
20
1
5
—
—
—
14
40
6
7,131
Porcupine
125
2
2
—
—
—
18
147
143
1,027
Éléonore
144
—
2
—
—
1
21
168
167
1,002
Peñasquito
66
1
—
—
—
1
25
93
54
1,714
Other North America
—
—
1
43
1
—
4
49
—
—
North America
651
9
21
44
3
2
132
862
668
1,290
Yanacocha
300
43
7
1
7
—
20
378
422
895
Merian
220
3
4
1
—
—
39
267
397
672
Cerro Negro
141
1
13
—
1
—
25
181
218
833
Other South America
—
—
—
7
—
—
—
7
—
—
South America
661
47
24
9
8
—
84
833
1,037
803
Boddington
431
9
1
—
—
10
45
496
522
949
Tanami
198
2
5
—
—
—
56
261
361
725
Kalgoorlie
160
3
2
—
—
—
20
185
170
1,090
Other Australia
—
—
4
7
1
—
5
17
—
—
Australia
789
14
12
7
1
10
126
959
1,053
911
Ahafo
281
3
14
—
1
—
71
370
451
820
Akyem
172
25
3
—
1
—
20
221
321
691
Other Africa
—
—
—
7
1
—
—
8
—
—
Africa
453
28
17
7
3
—
91
599
772
776
Nevada Gold Mines
235
10
5
3
2
2
50
307
334
920
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
170
830
Long Canyon
36
1
—
1
—
—
7
45
96
466
Other Nevada
—
—
5
—
—
—
4
9
—
—
Nevada
858
18
22
9
3
9
158
1,077
1,126
956
Corporate and Other
—
—
46
148
3
—
9
206
—
—
Total Gold
$
3,412
$
116
$
142
$
224
$
21
$
21
$
600
$
4,536
4,656
$
974
Gold equivalent ounces - other metals
(10)
Peñasquito
$
209
$
3
$
2
$
—
$
—
$
34
$
65
$
313
213
$
1,471
Boddington
87
2
—
—
—
6
8
103
106
966
Phoenix
28
2
—
—
—
1
3
34
38
894
Total Gold Equivalent Ounces
$
324
$
7
$
2
$
—
$
—
$
41
$
76
$
450
357
$
1,259
Consolidated
$
3,736
$
123
$
144
$
224
$
21
$
62
$
676
$
4,986
(1)
Excludes Depreciation and
amortization and Reclamation and remediation.
(2)
Includes by-product credits of
$62 and excludes co-product revenues of $397.
(3)
Includes stockpile and leach pad
inventory adjustments of $10 at CC&V, $10 at Yanacocha, $19 at
Boddington, $20 at Akyem, $1 at NGM, $33 at Carlin and $2 at Twin
Creeks.
(4)
Reclamation costs include
operating accretion and amortization of asset retirement costs of
$63 and $60, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $39 and $63,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $3
at CC&V, $1 at Musselwhite, $4 at Porcupine, $2 at Éléonore, $1
at Peñasquito, $2 at Other North America, $9 at Yanacocha, $2 at
Merian, $6 at Cerro Negro, $29 at Other South America, $3 at
Tanami, $2 at Kalgoorlie, $12 at Other Australia, $10 at Ahafo, $9
at Akyem, $4 at Other Africa, $8 at NGM, $6 at Carlin, $1 at
Phoenix, $2 at Twin Creeks, $12 at Long Canyon, $2 at Other Nevada,
and $26 at Corporate and Other, totaling $156 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 $185,
Nevada JV transaction implementation costs of $26, restructuring
and other costs of $7.
(7)
Includes sustaining capital
expenditures of $172 for North America, $84 for South America, $125
for Australia, $88 for Africa, $160 for Nevada, and $9 for
Corporate and Other, totaling $638 and excludes development capital
expenditures, capitalized interest and the increase in accrued
capital totaling $395. The following are major development
projects: Borden, Musselwhite Materials Handling, Quecher Main,
Yanacocha Sulfides, Tanami Expansion 2, Ahafo North, Subika
Underground, Ahafo Mill Expansion, and Turquoise Ridge 3rd
shaft.
(8)
Includes finance lease payments
for sustaining projects of $38 and excludes finance lease payments
for development projects of $22.
(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
Nine Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Sustaining
Sustaining
Ounces (000)
Costs per
September 30, 2018
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Capital (7)
Costs
Sold
oz. (8)
Gold
CC&V
$
149
$
3
$
4
$
2
$
1
$
—
$
24
$
183
211
$
863
Other North America
—
—
—
—
—
—
—
—
—
—
North America
149
3
4
2
1
—
24
183
211
863
Yanacocha
322
34
3
1
3
—
25
388
376
1,032
Merian
195
1
3
1
3
—
39
242
358
678
Other South America
—
—
—
8
1
—
—
9
—
—
South America
517
35
6
10
7
—
64
639
734
870
Boddington
404
8
—
—
—
16
32
460
535
860
Tanami
221
2
10
—
1
—
45
279
351
801
Kalgoorlie
178
3
3
—
—
—
17
201
258
777
Other Australia
—
2
5
6
(3
)
—
2
12
—
—
Australia
803
15
18
6
(2
)
16
96
952
1,144
832
Ahafo
242
3
3
1
2
—
27
278
307
906
Akyem
173
17
1
1
1
—
31
224
313
715
Other Africa
—
—
—
5
—
—
—
5
—
—
Africa
415
20
4
7
3
—
58
507
620
818
Carlin
560
6
14
5
—
—
118
703
645
1,089
Phoenix
145
6
3
1
—
5
19
179
169
1,058
Twin Creeks
187
2
7
1
1
—
22
220
261
841
Long Canyon
55
1
—
—
—
—
9
65
130
499
Other Nevada
—
—
7
1
2
—
7
17
—
—
Nevada
947
15
31
8
3
5
175
1,184
1,205
982
Corporate and Other
—
—
44
148
1
—
8
201
—
—
Total Gold
$
2,831
$
88
$
107
$
181
$
13
$
21
$
425
$
3,666
3,914
$
937
Gold equivalent ounces - other metals
(9)
Boddington
$
96
$
1
$
—
$
—
$
—
$
9
$
8
$
114
131
$
865
Phoenix
40
1
—
—
—
1
8
50
46
1,095
Total Gold Equivalent Ounces
$
136
$
2
$
—
$
—
$
—
$
10
$
16
$
164
177
$
924
Consolidated
$
2,967
$
90
$
107
$
181
$
13
$
31
$
441
$
3,830
(1)
Excludes Depreciation and
amortization and Reclamation and remediation.
(2)
Includes by-product credits of
$44 and excludes co-product revenues of $229.
(3)
Includes stockpile and leach pad
inventory adjustments of $5 at CC&V, $29 at Yanacocha, $33 at
Ahafo, $28 at Akyem, $64 at Carlin, and $30 at Twin Creeks. Total
stockpile and leach pad inventory adjustments at Carlin of $86 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
$47 and $43, respectively, and exclude non-operating accretion and
reclamation and remediation adjustments of $32 and $17,
respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $3
at CC&V, $29 at Yanacocha, $8 at Merian, $24 at Other South
America, $2 at Tanami, $5 at Kalgoorlie, $3 at Other Australia, $9
at Ahafo, $10 at Akyem, $3 at Other Africa, $9 at Carlin, $2 at
Twin Creeks, $19 at Long Canyon, $12 at Other Nevada and $4 at
Corporate and Other, totaling $142 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 $16.
(7)
Excludes development capital
expenditures, capitalized interest and the increase in accrued
capital totaling $322. The following are major development
projects: 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 2019 Gold AISC outlook to the 2019 Gold
CAS outlook, 2019 Co-product AISC outlook to the 2019 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.
2019 Proforma Outlook - Gold 7,8
Outlook Estimate 10
(in millions, except ounces and per ounce) Cost
Applicable to Sales 1,2
4,650
Reclamation Costs 3
150
Advance Project and Exploration 4
180
General and Administrative 5
315
Other Expense
30
Treatment and Refining Costs
25
Sustaining Capital
865
Sustaining Finance Lease Payments 6
25
All-in Sustaining Costs
6,250
Ounces (000) Sold 9
6,450
All-in Sustaining Costs per Oz
$965
(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 2019 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 combined Newmont Goldcorp.
(9)
Consolidated production for
Yanacocha and Merian is presented on a total production basis for
the mine site and excludes production from Pueblo Viejo
(10)
Estimates include the impact of
the Newmont Goldcorp transaction and the impact of the Nevada Gold
Mines joint venture.
2019 Proforma Outlook - Co-Product 7,8
Outlook Estimate 10
(in millions, except GEO and per GEO) Cost Applicable
to Sales 1,2
480
Reclamation Costs 3
10
Advance Project and Exploration 4
5
General and Administrative 5
—
Other Expense
—
Treatment and Refining Costs
65
Sustaining Capital
115
Sustaining Finance Lease Payments 6
15
All-in Sustaining Costs
690
Co-Product GEO (000) Sold 9
580
All-in Sustaining Costs per Co Product GEO
$1,190
(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 2019 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 combined Newmont Goldcorp.
(9)
Co-Product GEO are all non gold
co-products (Peñasquito silver, zinc, lead, Boddington copper, and
January-June 2019 Phoenix copper).
(10)
Estimates include the impact of
the Newmont Goldcorp transaction and the impact of the Nevada Gold
Mines joint venture.
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
September 30, 2019
June 30, 2019
March 31, 2019
December 31, 2018
Net income (loss) attributable to Newmont
stockholders
$
2,178
$
(25
)
$
87
$
2
Net income (loss) attributable to noncontrolling interests
26
25
32
13
Net loss (income) from discontinued operations
48
26
26
(5
)
Equity loss (income) of affiliates
(32
)
(26
)
5
8
Income and mining tax expense (benefit)
558
20
125
260
Depreciation and amortization
548
487
312
336
Interest expense, net
77
82
58
54
EBITDA
3,403
589
645
668
EBITDA Adjustments:
Gain on formation of Nevada Gold Mines
(2,366
)
—
—
—
Goldcorp transaction and integration costs
26
114
45
—
Change in fair value of investments
(19
)
(35
)
(21
)
29
Loss (gain) on asset and investment sales
1
(32
)
(1
)
—
Reclamation and remediation charges
17
32
—
13
Nevada JV transaction and integration costs
3
11
12
—
Impairment of long-lived assets
3
—
1
3
Restructuring and other
10
—
5
4
Impairment of investments
1
—
1
42
Emigrant leach pad write-down
—
—
—
—
Adjusted EBITDA
1,079
679
687
759
Pro forma adjustments to EBITDA:
Goldcorp adjusted EBITDA (prior to acquisition) (1)
—
(66
)
148
215
Total pro forma adjusted EBITDA
$
1,079
$
613
$
835
$
974
12 month trailing Adjusted EBITDA
$
3,501
Total Gross Debt
$
7,462
Less: Cash and cash equivalents
(2,712
)
Total net debt
$
4,750
Net debt to pro forma adjusted EBITDA
1.4
(1) Represents Goldcorp's pre-acquisition Adjusted EBITDA on a
U.S. GAAP basis from October 1, 2018 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 September 30, 2019. The pro forma
adjusted EBITDA was derived from Goldcorp's EBITDA from its
historical unaudited financial statements for the three months
ended September 30, 2018 and audited financial statements for
twelve months ended December 31, 2018, as filed with the Securities
and Exchange Commission, as well as Goldcorp management unaudited
financial information for the three months ended March 31, 2019 and
April 1, 2019 through to April 18, 2019, the acquisition date.
These amounts were adjusted to remove the impairment of long-lived
assets recognized by Goldcorp at December 31, 2018. 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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated gold sales, net
$
2,483
$
1,656
$
6,376
$
4,976
Consolidated copper sales, net
40
70
163
229
Consolidated silver sales, net
78
—
109
—
Consolidated lead sales, net
25
—
38
—
Consolidated zinc sales, net
87
—
87
—
Total sales
$
2,713
$
1,726
$
6,773
$
5,205
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated gold sales:
Gross before provisional pricing
$
2,485
$
1,668
$
6,384
$
5,007
Provisional pricing mark-to-market
6
(5
)
13
(10
)
Gross after provisional pricing
2,491
1,663
6,397
4,997
Treatment and refining charges
(8
)
(7
)
(21
)
(21
)
Net
$
2,483
$
1,656
$
6,376
$
4,976
Consolidated gold ounces sold
(thousands)
1,682
1,378
4,656
3,914
Average realized gold price (per
ounce)(1):
Gross before provisional pricing
$
1,477
$
1,210
$
1,371
$
1,279
Provisional pricing mark-to-market
4
(4
)
3
(3
)
Gross after provisional pricing
1,481
1,206
1,374
1,276
Treatment and refining charges
(5
)
(5
)
(4
)
(5
)
Net
$
1,476
$
1,201
$
1,370
$
1,271
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated copper sales:
Gross before provisional pricing
$
44
$
78
$
173
$
246
Provisional pricing mark-to-market
(2
)
(4
)
(3
)
(7
)
Gross after provisional pricing
42
74
170
239
Treatment and refining charges
(2
)
(4
)
(7
)
(10
)
Net
$
40
$
70
$
163
$
229
Consolidated copper pounds sold
(millions)
17
28
63
82
Average realized copper price (per
pound)(1):
Gross before provisional pricing
$
2.62
$
2.77
$
2.75
$
3.00
Provisional pricing mark-to-market
(0.13
)
(0.14
)
(0.05
)
(0.08
)
Gross after provisional pricing
2.49
2.63
2.70
2.92
Treatment and refining charges
(0.12
)
(0.13
)
(0.11
)
(0.13
)
Net
$
2.37
$
2.50
$
2.59
$
2.79
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated silver sales:
Gross before provisional pricing and
silver streaming impact
$
70
$
—
$
96
$
—
Silver streaming amortization
11
—
16
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing and silver
streaming impact
81
—
112
—
Treatment and refining charges
(3
)
—
(3
)
—
Net
$
78
$
—
$
109
$
—
Consolidated silver ounces sold
(thousands)
4,552
—
6,719
—
Average realized silver price (per
ounce)(1):
Gross before provisional pricing and
silver streaming impact
$
15.25
$
—
$
14.35
$
—
Silver streaming amortization
2.41
—
2.39
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing and silver
streaming impact
17.66
—
16.74
—
Treatment and refining charges
(0.48
)
—
(0.51
)
—
Net
$
17.18
$
—
$
16.23
$
—
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated lead sales:
Gross before provisional pricing
$
29
$
—
$
44
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
29
—
44
—
Treatment and refining charges
(4
)
—
(6
)
—
Net
$
25
$
—
$
38
$
—
Consolidated lead pounds sold
(thousands)
30
—
47
—
Average realized lead price (per
pound)(1):
Gross before provisional pricing
$
0.96
$
—
$
0.93
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
0.96
—
0.93
—
Treatment and refining charges
(0.12
)
—
(0.12
)
—
Net
$
0.84
$
—
$
0.81
$
—
Three Months Ended
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated zinc sales:
Gross before provisional pricing
$
112
$
—
$
112
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
112
—
112
—
Treatment and refining charges
(25
)
—
(25
)
—
Net
$
87
$
—
$
87
$
—
Consolidated zinc pounds sold
(thousands)
107
—
107
—
Average realized zinc price (per
pound)(1):
Gross before provisional pricing
$
1.04
$
—
$
1.04
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
1.04
—
1.04
—
Treatment and refining charges
(0.23
)
—
(0.23
)
—
Net
$
0.81
$
—
$
0.81
$
—
(1) Per ounce measures may not recalculate
due to rounding.
Gold by-product metrics
Copper, sliver, 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 Goldcorp’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
Nine Months Ended
September 30,
September 30,
2019
2018
2019
2018
Consolidated gold sales, net
$
2,483
$
1,656
$
6,376
$
4,976
Consolidated other metal sales, net
230
70
397
229
Sales
$
2,713
$
1,726
$
6,773
$
5,205
Costs applicable to sales
$
1,392
$
995
$
3,736
$
2,989
Less: Consolidated other metal sales,
net
(230
)
(70
)
(397
)
(229
)
By-Product costs applicable to sales
$
1,162
$
925
$
3,339
$
2,760
Gold sold (thousand ounces)
1,682
1,378
4,656
3,914
Total Gold CAS per ounce (by-product)
$
691
$
671
$
717
$
705
Total AISC
$
1,907
$
1,285
$
4,986
$
3,830
Less: Consolidated other metal sales,
net
(230
)
(70
)
(397
)
(229
)
By-Product AISC
$
1,677
$
1,215
$
4,589
$
3,601
Gold sold (thousand ounces)
1,682
1,378
4,656
3,914
Total Gold AISC per ounce (by-product)
$
997
$
882
$
986
$
920
(1) Per ounce measures may not recalculate
due to rounding.
Conference Call Information
A conference call will be held on Tuesday, November 5,
2019 at 11:00 a.m. Eastern Time (9:00 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 Goldcorp
Replay Number
877.344.7529
Intl Replay Number
412.317.0088
Replay Access Code
10135340
Webcast Details Title: Newmont
Goldcorp Q3 2019 Earnings Conference Call URL:
https://event.on24.com/wcc/r/2081824/9E09235073424C45464B12515D1A09CE
The third quarter 2019 results will be available before the
market opens on Tuesday, November 5, 2019 on the “Investor
Relations” section of the Company’s website,
www.newmontgoldcorp.com. Additionally, the conference call will be
archived for a limited time on the Company’s website.
About Newmont Goldcorp
Newmont Goldcorp 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 Goldcorp 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 Goldcorp 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 project spend, budget estimates, sustaining capital
and development capital; (iv) estimates of future cost reductions,
full potential savings, value creation, synergies, run-rate, and
other 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 and upside
potential; (vi) expectations regarding future portfolio
optimization, investments or divestitures, including without
limitation, of Red Lake; (vii) expectations regarding future
dividends 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; and (xi)
expectations regarding the future success of exploration,
development of the project pipeline, on-going integration work and
the Nevada joint venture. 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; and (viii) other planning
assumptions. In addition, material risks that could cause actual
results to differ from forward-looking statements include: (A) the
inherent uncertainty associated with financial or other
projections; (B) effective integration in connection with the
business combination by which Newmont acquired Goldcorp Inc. (the
“integration”), and the ability to achieve the anticipated
synergies and value-creation contemplated by the integration; (C)
the ability to achieve the anticipated synergies and value-creation
contemplated by the Nevada joint venture transaction; (D)
unanticipated difficulties or expenditures relating to the
integration and Nevada joint venture; and (E) potential volatility
in the price of the Company common stock due to the integration and
the Nevada joint venture. 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, 2018 filed with the U.S. Securities and Exchange
Commission (the “SEC”), as well as the Company’s Quarterly Report
on Form 10-Q for the quarter ended June 30 2019 under the heading
“Risk Factors”, available on the SEC website or
www.newmontgoldcorp.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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191105005353/en/
Investor Contacts Jessica Largent,
303.837.5484 jessica.largent@newmont.com Media Contacts Omar Jabara, 303.837.5114
omar.jabara@newmont.com
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