Newmont delivers significant value in Q3 with right-sized
portfolio of world-class assets; momentum into 2021
Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the
Company) today announced third quarter 2020 results.
THIRD QUARTER 2020 HIGHLIGHTS
- Produced 1.5 million attributable ounces of gold* and reported
CAS* of $756 per ounce and AISC* of $1,020 per ounce and produced
273 thousand attributable gold equivalent ounces from
co-products
- Generated $1.6 billion of cash from continuing operations and
$1.3 billion of Free Cash Flow*
- Reported $4.8 billion of consolidated cash with $7.8 billion of
liquidity and a net debt to adjusted EBITDA* ratio of 0.4x
- All sites operational with wide-ranging controls and safety
protocols continuing to manage the Covid pandemic while placing the
health, safety and wellbeing of our people and communities above
all else
- On track to finish 2020 strong and meet full-year guidance
- Declared third quarter dividend of $0.40 per share, an increase
of 60 percent over the prior quarter
- Formed exploration joint ventures with Agnico Eagle Mines
Limited in Colombia and Kirkland Lake Gold Inc. in Canada
- Announced sale of royalty portfolio to Maverix Metals for total
consideration of approximately $90 million
- Achieved gender parity amongst independent non-executive Board
Directors
“Capitalizing on the strength of our portfolio and higher gold
prices, we delivered record third quarter adjusted EBITDA of $1.7
billion and free cash flow of $1.3 billion. This was the best
quarterly financial performance in Newmont’s history. We also
remain focused above all else on protecting the health, safety and
wellbeing of our workforce and neighboring communities as the
pandemic continues," said Tom Palmer, President and Chief Executive
Officer. "As demonstrated by our second dividend increase this
year, with a 79 percent increase in January and a further 60
percent increase in October, I am confident that our world-class
portfolio is best positioned to generate industry-leading value and
returns for our shareholders."
- Tom Palmer, President and Chief Executive Officer
QUARTERLY DIVIDEND INCREASED 60 PERCENT
- Annualized dividend of $1.60 per share is highest in the gold
sector**
- Announced dividend framework that maintains leading $1.00 per
share sustainable base dividend and provides additional returns
from Newmont’s significant free cash flow generation at higher gold
prices
- Strong financial position and world-class portfolio supports a
higher dividend as we continue to progress our most profitable
projects
- Industry-leading dividend yield of 2.7% exceeds median of
S&P 500 Index
- During 2019 and 2020, we will have returned more than $2.5B to
shareholders through dividends and share buybacks
___________________________
*See footnotes provided below, as well as the cautionary
statement at end of release regarding forward-looking statements,
including with respect to financial and operating outlook and
expected returns to shareholders.
**An annualized dividend has not been declared by the Board. The
above represents management’s expectations based upon the increased
level declared for the third quarter. The declaration of future
quarterly dividends remains at the discretion of the Board.
Investors are cautioned that the Company’s dividend framework and
the expected annualized dividend level are non-binding. See the
cautionary statement at the end of this release.
THIRD QUARTER 2020 FINANCIAL AND
PRODUCTION SUMMARY
Q3'20
Q2'20
Q1'20
Q3'19
Attributable gold production (million
ounces)
1.54
1.26
1.48
1.64
Gold costs applicable to sales (CAS) ($
per ounce)
$
756
$
748
$
781
$
733
Gold all-in sustaining costs (AISC) ($ per
ounce)
$
1,020
$
1,097
$
1,030
$
987
GAAP Net income (US $ millions)
$
611
$
412
$
837
$
2,226
Adjusted net income (US $ millions)
$
697
$
261
$
326
$
292
Adjusted EBITDA (US $ millions)
$
1,663
$
984
$
1,118
$
1,079
Cash flow from continuing operations (US $
millions)
$
1,597
$
668
$
939
$
793
Capital Expenditures (US $ millions)
$
296
$
280
$
328
$
428
Free cash flow (US $ millions)
$
1,301
$
388
$
611
$
365
Attributable gold production1 decreased 6 percent to
1,541 thousand ounces from the prior year quarter primarily due to
ongoing Covid-related impacts at Yanacocha, Cerro Negro and
Éléonore as the operations continued to ramp up in the third
quarter from care and maintenance, in addition to the sale of Red
Lake and Kalgoorlie, partially offset by higher production at
Peñasquito and Musselwhite.
Gold CAS2 decreased 8 percent to $1,130 million from the
prior year quarter primarily due to lower gold ounces sold. Gold
CAS per ounce increased 3 percent to $756 per ounce primarily due
to higher stripping ratios at Yanacocha, Merian, Akyem, lower
surface grades at Ahafo and higher gold price-related
royalties.
Gold AISC3 increased 3 percent to $1,020 per ounce from
the prior year quarter primarily due to higher CAS per ounce and
Covid-related care and maintenance costs, partially offset by lower
sustaining capital spend.
Attributable gold equivalent ounce (GEO) production from
other metals increased 16 percent to 273 thousand ounces
primarily due to operations at Peñasquito receiving sustained
community support compared to the prior year blockade and higher
recoveries at Boddington. CAS from other metals totaled $139
million for the quarter. CAS per GEO2 improved 26 percent to
$556 per ounce from the prior year quarter primarily due to higher
sales at Peñasquito, partially offset by foreign exchange impacts
in Australia and lower sales at Boddington. AISC per GEO3
improved 33 percent to $770 per ounce primarily due to lower CAS
from other metals and lower sustaining capital spend.
Net income from continuing operations attributable to
Newmont stockholders was $611 million or $0.76 per diluted share, a
decrease of $1,615 million from the prior year quarter primarily
due to the recognized gain on the formation of Nevada Gold Mines
(NGM) in the prior year, lower sales volumes due to the sale of
Kalgoorlie and Red Lake, higher costs in response to the COVID-19
pandemic and pension settlement charges, partially offset by higher
average realized gold prices and lower tax expense, exploration
costs, Goldcorp transaction costs and general and administrative
costs.
Adjusted net income4 was $697 million or $0.86 per
diluted share, compared to $292 million or $0.36 per diluted share
in the prior year quarter. The adjustments to net income of $0.10
primarily related to pension settlements, changes in the fair value
of investments, COVID-19 specific costs, asset impairments,
restructuring and severance costs, settlement costs including the
costs from the Cedros community agreement at Peñasquito, valuation
allowance and other tax adjustments. Adjusted EBITDA5
improved 54 percent to $1,663 million for the quarter, compared to
$1,079 million for the prior year quarter.
Revenue increased 17 percent from the prior year quarter
to $3,170 million primarily due to higher average realized gold
prices, partially offset by lower gold sales volumes.
Average realized price6 for gold was $1,913, an increase
of $437 per ounce over the prior year quarter; average realized
price for copper was $2.99, an increase of $0.62 per pound over the
prior year quarter; average realized price for silver was $21.69
per ounce, an increase of $4.51 per ounce over the prior year
quarter; average realized price for lead was $0.73 per pound, a
decrease of $0.11 per pound; average realized price for zinc was
$1.01 per pound, an increase of $0.20 per pound over the prior year
quarter.
Capital expenditures7 decreased 31 percent from the prior
year quarter to $296 million, primarily due to the sale of Red Lake
and Kalgoorlie and reduced spending from the completion of Borden
Underground, Ahafo Mill Expansion, and other sustaining projects in
2019. Development capital expenditures in 2020 primarily include
advancing Tanami Expansion 2, Yanacocha Sulfides, Ahafo North, the
Subika mining method change, Musselwhite Materials Handling System,
Éléonore Lower Mine Material Handling System, Quecher Main, and
projects associated with the Company’s ownership interest in Nevada
Gold Mines.
Consolidated operating cash flow from continuing
operations increased 101 percent from the prior year quarter to
$1,597 million due to higher realized gold prices, partially offset
by lower sales volumes. Free Cash Flow8 also increased to
$1,301 million primarily due to higher operating cash flow and
lower capital expenditures.
Balance sheet ended the quarter with $4.8 billion of
consolidated cash and approximately $7.8 billion of liquidity;
reported net debt to adjusted EBITDA of 0.4x9.
Nevada Gold Mines (NGM) attributable gold production was
337 thousand ounces with CAS of $761 per ounce and AISC of $904 per
ounce for the third quarter of 2020. EBITDA for NGM was $374
million.
Pueblo Viejo (PV) attributable gold production was 87
thousand ounces. Pueblo Viejo EBITDA10 was $115 million and cash
distributions received for the Company's equity method investment
totaled $75 million in the third quarter.
COVID-19 UPDATE
- Continued our wide-ranging controls at the Company's operations
and offices to put the health, safety, and overall wellbeing of
Newmont's people and communities above all else
- Maintained effective testing, quarantine and contact tracing
procedures for positive cases
- Incurred $35 million of care and maintenance costs during the
third quarter, which included wages, direct operating costs for
critical activities and non-cash depreciation for sites ramping up
from care and maintenance or continuing to operate at reduced
levels
- Incurred $32 million of incremental Covid specific costs for
activities such as additional health and safety procedures,
increased transportation and community fund contributions
- Distributed $9 million to date from Newmont's $20 million
Global Community Support Fund focused on employee and community
health, food security and local economic resilience through
partnerships with local governments, medical institutions,
charities and non-governmental organizations
PROJECTS UPDATE
Newmont’s capital-efficient project pipeline supports stable
production with improving margins and mine life. Funding for the
current development capital projects Tanami Expansion 2 and
Musselwhite Materials Handling has been approved and the projects
are in execution. Additional projects not listed below represent
incremental improvements to the Company's outlook.
- Tanami Expansion 2 (Australia)
secures Tanami’s future as a long-life, low cost producer with
potential to extend mine life to 2040 through the addition of a
1,460 meter hoisting shaft and supporting infrastructure to achieve
3.5 million tonnes per year of production and provide a platform
for future growth. The expansion is expected to increase average
annual gold production by approximately 150,000 to 200,000 ounces
per year for the first five years beginning in 2023, and is
expected to reduce operating costs by approximately 10 percent.
Capital costs for the project are estimated to be between $700
million and $800 million.
- Musselwhite Materials Handling
(North America) improves material movement from Musselwhite’s two
main zones below Lake Opapimiskan. An underground shaft will hoist
ore from the underground crushers, reducing haulage distances and
ventilation costs. The project is 95 percent complete; however,
full commissioning has been delayed amidst the Covid pandemic as
Musselwhite operations were previously on care and maintenance. The
Company expects to commission the project upon completion of the
Musselwhite conveyor system by the end of 2020.
OUTLOOK
Newmont's 2020 attributable gold production is unchanged at
approximately 6.0 million ounces and the Company expects to produce
approximately 1.0 million gold equivalent ounces from co-products.
Gold CAS is expected to be $760 per ounce, and gold AISC is
expected to be $1,015 per ounce.
Newmont's capital expenditure for 2020 is expected to be
approximately $1.4 billion as the Company continues to progress the
majority of its development and sustaining capital projects,
including Tanami Expansion 2, developing the sub-level shrinkage
mining method at Subika Underground and advancing laybacks at
Boddington and Ahafo.
For exploration and advanced projects, approximately 80 percent
of the Company’s exploration budget is allocated to near-mine
activities. Newmont's 2020 exploration and advanced project spend
is expected to be approximately $350 million as the majority of
infill drilling programs and Greenfield exploration actives have
resumed with the lifting of Covid restrictions globally. Advanced
project study work for Yanacocha Sulfides and Ahafo North continues
remotely.
Newmont continues to maintain wide-ranging protective measures
for its workforce and neighboring communities, including screening,
physical distancing, deep cleaning, and avoiding exposure for
at-risk individuals. If at any point the Company determines that
continuing operations poses an increased risk to our workforce or
host communities, it will reduce operational activities up to and
including care and maintenance and management of critical
environmental systems. Newmont’s 2020 outlook assumes operations
continue throughout the remainder of the year without major
Covid-related interruptions.
1 Attributable gold production for the third quarter 2020
includes 87 thousand ounces from the Company’s equity method
investment in Pueblo Viejo (40%).
2 Non-GAAP measure. See end of this release for reconciliation
to Costs applicable to sales.
3 Non-GAAP measure. See end of this release for reconciliation
to Costs applicable to sales.
4 Non-GAAP measure. See end of this release for reconciliation
to Net income (loss) attributable to Newmont stockholders.
5 Non-GAAP measure. See end of this release for reconciliation
to Net income (loss) attributable to Newmont stockholders.
6 Non-GAAP measure. See end of this release for reconciliation
to Sales.
7 Capital expenditures refers to Additions to property plant and
mine development from the Consolidated Statements of Cash
Flows.
8 Non-GAAP measure. See end of this release for reconciliation
to Net cash provided by operating activities.
9 Non-GAAP measure. See end of this release for
reconciliation.
10 Non-GAAP measure. See end of this release for
reconciliation.
Newmont Outlook (+/-5%)
2020
Consolidated Production (koz)
5,900
Attributable Production* (koz)
6,000
Consolidated Gold CAS ($/oz)
760
Consolidated Gold All-in Sustaining Costs
($/oz)
1,015
Consolidated Co-products (GEOs koz)
1,010
Attributable Co-products (GEOs koz)
1,010
Consolidated GEO CAS ($/oz)
605
Consolidated GEO All-in Sustaining Costs
($/oz)
945
Consolidated Sustaining Capital
Expenditures ($M)
900
Consolidated Development Capital
Expenditures ($M)
475
Attributable Sustaining Capital
Expenditures ($M)
875
Attributable Development Capital
Expenditures ($M)
425
*Attributable gold production for 2020 includes 375,000 ounces
from the Company’s equity method investment in Pueblo Viejo
(40%).
2020 Regional Production And Cost Overview:
Australia
Attributable Production (koz)
1,180
Attributable Co-products (GEOs koz)
130
Consolidated Gold CAS ($/oz)
700
Consolidated Gold All-in Sustaining Costs
($/oz)
900
Consolidated Sustaining Capital
Expenditures ($M)
205
Consolidated Development Capital
Expenditures ($M)
145
- Full Potential at Boddington improves mining rates and grade
increases throughout remainder of 2020 with the three year
stripping campaign nearing completion in the South Pit and Tanami
continues to deliver solid performance.
Africa
Attributable Production (koz)
850
Consolidated Gold CAS ($/oz)
710
Consolidated Gold All-in Sustaining Costs
($/oz)
870
Consolidated Sustaining Capital
Expenditures ($M)
90
Consolidated Development Capital
Expenditures ($M)
70
- Africa benefits from a full year of production from the Ahafo
Mill Expansion which is offset by mine sequencing in both the
Subika and Awonsu open pits, a change in mining method at Subika
Underground and lower grades at Akyem.
North America
Attributable Production (koz)
1,410
Attributable Co-products (GEOs koz)
880
Consolidated Gold CAS ($/oz)
775
Consolidated Gold All-in Sustaining Costs
($/oz)
1,040
Consolidated Sustaining Capital
Expenditures ($M)
275
Consolidated Development Capital
Expenditures ($M)
70
- 2020 outlook includes the impacts from Peñasquito, Éléonore and
Musselwhite being temporarily placed into care and maintenance in
the second quarter.
- The Musselwhite Materials Handling project is 95 percent
complete and the conveyor system is on track to be fully
commissioned by year end.
- Éléonore production and cost outlook reflects the ongoing work
to integrate the geotechnical model and updated Reserves.
South America
Attributable Production (koz)
1,135
Consolidated Gold CAS ($/oz)
815
Consolidated Gold All-in Sustaining Costs
($/oz)
1,105
Consolidated Sustaining Capital
Expenditures ($M)
110
Consolidated Development Capital
Expenditures ($M)
120
- 2020 outlook includes the impacts from Cerro Negro and
Yanacocha being temporarily placed into care and maintenance in the
second quarter. The 2020 outlook includes Covid-related impacts
through July 30, 2020 and does not include ongoing Covid-related
constraints in Argentina that restricts Cerro Negro operations
which are at approximately 65 percent of normal capacity. The South
America region remains on track to achieve full year 2020
guidance.
Nevada Gold Mines (NGM)
Attributable Production (koz)
1,375
Consolidated Gold CAS ($/oz)
690
Consolidated Gold All-in Sustaining Costs
($/oz)
880
Consolidated Sustaining Capital
Expenditures ($M)
185
Consolidated Development Capital
Expenditures ($M)
45
- Production, CAS & AISC for the Company’s 38.5 percent
ownership interest in NGM is unchanged, as provided by Barrick Gold
Corporation.
2020 Outlooka
2020 Outlook (+/-5%)
Consolidated Production (Koz,
GEOS Koz)
Attributable Production (Koz,
GEOs Koz)
Consolidated CAS
($/oz)
Consolidated All-In Sustaining
Costs b ($/oz)
Consolidated Sustaining
Capital Expenditures ($M)
Consolidated Development
Capital Expenditures ($M)
Attributable Sustaining
Capital Expenditures ($M)
Attributable Development
Capital Expenditures ($M)
North America
1,410
1,410
775
1,040
275
70
275
70
South America
1,030
1,135
815
1,105
110
120
90
80
Australia
1,180
1,180
700
900
205
145
205
145
Africa
850
850
710
870
90
70
90
70
Nevada Gold Minesc
1,375
1,375
690
880
185
45
185
45
Total Goldd
5,900
6,000
760
1,015
900
475
875
425
Total Co-productse
1,010
1,010
605
945
2020 Consolidated Expense
Outlook ($M) (+/-5%)
General & Administrative
265
Interest Expense
300
Depreciation and Amortization
2,250
Advanced Projects & Exploration
350
Adjusted Tax Rate f,g
38% - 42%
Federal Tax Rate g
29% - 33%
Mining Tax Rate g
8% - 10%
a 2020 outlook projections used in this presentation are
considered forward-looking statements and represent management’s
good faith estimates or expectations of future production results
as of October 29, 2020. Outlook is based upon certain assumptions,
including, but not limited to, metal prices, oil prices, certain
exchange rates and other assumptions. For example, 2020 Outlook
assumes $1,200/oz gold, $16/oz silver, $2.75/lb copper, $1.20/lb
zinc, $0.95/lb lead, $0.75 USD/AUD exchange rate, $0.77 USD/CAD
exchange rate and $60/barrel WTI; AISC and CAS estimates do not
include inflation, for the remainder of the year. Production, CAS,
AISC and capital estimates exclude projects that have not yet been
approved. The potential impact on inventory valuation as a result
of lower prices, input costs, and project decisions are not
included as part of this Outlook. Assumptions used for purposes of
Outlook may prove to be incorrect and actual results may differ
from those anticipated, including variation beyond a +/-5% range.
Outlook cannot be guaranteed. As such, investors are cautioned not
to place undue reliance upon Outlook and forward-looking statements
as there can be no assurance that the plans, assumptions or
expectations upon which they are placed will occur. Amounts may not
recalculate to totals due to rounding. See cautionary at the end of
this release.
b All-in sustaining costs or AISC as used in the Company’s
Outlook is a non-GAAP metric; see below for further information and
reconciliation to consolidated 2020 CAS outlook.
c Represents the ownership interest in the Nevada Gold Mines
(NGM) joint venture. NGM is owned 38.5% by Newmont and owned 61.5%
and operated by Barrick. The Company accounts for its interest in
NGM using the proportionate consolidation method, thereby
recognizing its pro-rata share of the assets, liabilities and
operations of NGM.
d Attributable gold production outlook includes the Company’s
equity investment (40%) in Pueblo Viejo with ~375Koz in 2020; does
not include the Company’s other equity investments. Attributable
gold production outlook represents the Company's 51.35% interest
for Yanacocha and a 75% interest for Merian.
e Gold equivalent ounces (GEO) is calculated as pounds or ounces
produced multiplied by the ratio of the other metal’s price to the
gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($16/oz.), Lead ($0.95/lb.), and Zinc ($1.20/lb.) pricing.
f The adjusted tax rate excludes certain items such as tax
valuation allowance adjustments.
g Assuming average prices of $1,400 per ounce for gold, $16 per
ounce for silver, $2.75 per pound for copper, $0.95 per pound for
lead, and $1.20 per pound for zinc and achievement of current
production and sales volumes and cost estimates, we estimate our
consolidated adjusted effective tax rate related to continuing
operations for 2020 will be between 38%-42%.
Three Months Ended September
30,
Nine Months Ended September
30,
Operating Results
2020
2019
% Change
2020
2019
% Change
Attributable Sales (koz)
Attributable gold ounces sold (1)
1,429
1,578
(9)
%
3,996
4,352
(8)
%
Attributable gold equivalent ounces
sold
248
213
16
%
780
357
118
%
Average Realized Price ($/oz,
$/lb)
Average realized gold price
$
1,913
$
1,476
30
%
$
1,745
$
1,370
27
%
Average realized copper price
$
2.99
$
2.37
26
%
$
2.49
$
2.59
(4)
%
Average realized silver price
$
21.69
$
17.18
26
%
$
16.66
$
16.23
3
%
Average realized lead price
$
0.73
$
0.84
(13)
%
$
0.69
$
0.81
(15)
%
Average realized zinc price
$
1.01
$
0.81
25
%
$
0.77
$
0.81
(5)
%
Attributable Production (koz)
North America (2)
414
325
27
%
1,022
657
56
%
South America (2)
165
275
(40)
%
536
720
(26)
%
Australia
309
339
(9)
%
861
1,038
(17)
%
Africa
229
267
(14)
%
608
775
(22)
%
Nevada (3)
337
344
(2)
%
992
1,102
(10)
%
Total Gold (excluding equity method
investments)
1,454
1,550
(6)
%
4,019
4,292
(6)
%
Pueblo Viejo (40%) (4)
87
94
(7)
%
256
169
51
%
Total Gold
1,541
1,644
(6)
%
4,275
4,461
(4)
%
North America
238
203
17
%
656
256
156
%
Australia
35
33
6
%
94
104
(10)
%
Nevada
—
—
—
%
—
35
(100)
%
Total Gold Equivalent Ounces
273
236
16
%
750
395
90
%
CAS Consolidated ($/oz, $/GEO)
North America
$
762
$
945
(19)
%
$
792
$
976
(19)
%
South America
$
885
$
669
32
%
$
824
$
638
29
%
Australia
$
690
$
768
(10)
%
$
712
$
749
(5)
%
Africa
$
693
$
563
23
%
$
707
$
586
21
%
Nevada
$
761
$
711
7
%
$
764
$
761
—
%
Total Gold
$
756
$
733
3
%
$
762
$
733
4
%
Total Gold (by-product)
$
641
$
691
(7)
%
$
686
$
717
(4)
%
North America
$
513
$
756
(32)
%
$
539
$
980
(45)
%
Australia
$
840
$
758
11
%
$
842
$
819
3
%
Nevada
$
—
$
—
—
%
$
—
$
750
(100)
%
Total Gold Equivalent Ounces
$
556
$
747
(26)
%
$
575
$
908
(37)
%
AISC Consolidated ($/oz, $/GEO)
North America
$
1,003
$
1,276
(21)
%
$
1,066
$
1,290
(17)
%
South America
$
1,162
$
841
38
%
$
1,111
$
803
38
%
Australia
$
889
$
944
(6)
%
$
914
$
911
—
%
Africa
$
865
$
741
17
%
$
889
$
776
15
%
Nevada
$
904
$
915
(1)
%
$
936
$
956
(2)
%
Total Gold
$
1,020
$
987
3
%
$
1,046
$
974
7
%
Total Gold (by-product)
$
940
$
997
(6)
%
$
1,024
$
986
4
%
North America
$
735
$
1,226
(40)
%
$
840
$
1,471
(43)
%
Australia
$
998
$
907
10
%
$
1,032
$
966
7
%
Nevada
$
—
$
—
—
%
$
—
$
894
(100)
%
Total Gold Equivalent Ounces
$
770
$
1,155
(33)
%
$
862
$
1,259
(32)
%
(1) Attributable gold ounces from the Pueblo Viejo mine, an
equity method investment, are not included in attributable gold
ounces sold.
(2) Includes sites acquired as part of the Newmont Goldcorp
transaction, effective April 18, 2019.
(3) Newmont contributed its existing Nevada mining operations in
exchange for a 38.5% interest in NGM, effective July 1, 2019.
(4) Represents attributable gold from Pueblo Viejo and does not
include the Company's other equity method investments. Attributable
gold ounces produced at Pueblo Viejo are not included in
attributable gold ounces sold, as noted in footnote 1. Income and
expenses of equity method investments are included in Equity income
(loss) of affiliates.
NEWMONT CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited, in millions
except per share)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Sales
$
3,170
$
2,713
$
8,116
$
6,773
Costs and expenses
Costs applicable to sales (1)
1,269
1,392
3,659
3,736
Depreciation and amortization
592
548
1,685
1,347
Reclamation and remediation
38
62
116
165
Exploration
48
88
118
198
Advanced projects, research and
development
39
43
92
102
General and administrative
68
84
205
224
Care and maintenance
26
—
171
—
Other expense, net
92
38
184
243
2,172
2,255
6,230
6,015
Other income (expense):
Gain on formation of Nevada Gold Mines
—
2,366
—
2,366
Gain on asset and investment sales,
net
1
(1)
593
32
Other income, net
(44)
32
(35)
134
Interest expense, net of capitalized
interest
(75)
(77)
(235)
(217)
(118)
2,320
323
2,315
Income (loss) before income and mining tax
and other items
880
2,778
2,209
3,073
Income and mining tax benefit
(expense)
(305)
(558)
(446)
(703)
Equity income (loss) of affiliates
53
32
119
53
Net income (loss) from continuing
operations
628
2,252
1,882
2,423
Net income (loss) from discontinued
operations
228
(48)
145
(100)
Net income (loss)
856
2,204
2,027
2,323
Net loss (income) attributable to
noncontrolling interests
(17)
(26)
(22)
(83)
Net income (loss) attributable to Newmont
stockholders
$
839
$
2,178
$
2,005
$
2,240
Net income (loss) attributable to Newmont
stockholders:
Continuing operations
$
611
$
2,226
$
1,860
$
2,340
Discontinued operations
228
(48)
145
(100)
$
839
$
2,178
$
2,005
$
2,240
Net income (loss) per common share
Basic:
Continuing operations
$
0.76
$
2.72
$
2.31
$
3.30
Discontinued operations
0.28
(0.06)
0.18
(0.14)
$
1.04
$
2.66
$
2.49
$
3.16
Diluted:
Continuing operations
$
0.76
$
2.71
$
2.31
$
3.30
Discontinued operations
0.28
(0.06)
0.18
(0.14)
$
1.04
$
2.65
$
2.49
$
3.16
(1)
Excludes Depreciation and amortization and Reclamation and
remediation.
NEWMONT CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in
millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Operating activities:
Net income (loss)
$
856
$
2,204
$
2,027
$
2323
Adjustments:
Depreciation and amortization
592
548
1,685
1,347
Gain on formation of Nevada Gold Mines
—
(2,366)
—
(2,366)
Gain on asset and investment sales,
net
(1)
1
(593)
(32)
Net loss (income) from discontinued
operations
(228)
48
(145)
100
Change in fair value of investments
(57)
(19)
(191)
(75)
Reclamation and remediation
35
56
107
151
Impairment of investments
—
1
93
2
Charges from pension settlement
82
8
82
8
Charges from debt extinguishment
—
—
77
—
Deferred income taxes
72
435
(72)
422
Stock-based compensation
17
22
55
76
Write-downs of inventory and stockpiles
and ore on leach pads
14
4
51
108
Other non-cash adjustments
47
1
(22)
13
Net change in operating assets and
liabilities
168
(150)
50
(409)
Net cash provided by (used in) operating
activities of continuing operations
1,597
793
3,204
1,668
Net cash provided by (used in) operating
activities of discontinued operations
(1)
(2)
(8)
(7)
Net cash provided by (used in) operating
activities
1,596
791
3,196
1,661
Investing activities:
Proceeds from sales of mining operations
and other assets, net
2
—
1,137
29
Additions to property, plant and mine
development
(296)
(428)
(904)
(1,033)
Proceeds from sales of investments
35
3
305
59
Return of investment from equity method
investees
—
3
43
83
Purchases of investments
—
(8)
(33)
(94)
Acquisitions, net (1) (2)
—
6
—
127
Other
(3)
(14)
29
12
Net cash provided by (used in) investing
activities of continuing operations
(262)
(438)
577
(817)
Net cash provided by (used in) investing
activities of discontinued operations
(75)
—
(75)
—
Net cash provided by (used in) investing
activities
(337)
(438)
502
(817)
Financing activities:
Repayment of debt
—
—
(1,160)
(1,250)
Proceeds from issuance of debt, net
—
690
985
690
Dividends paid to common stockholders
(201)
(109)
(514)
(775)
Repurchases of common stock
—
—
(321)
—
Distributions to noncontrolling
interests
(55)
(44)
(143)
(137)
Funding from noncontrolling interests
27
29
82
75
Proceeds from exercise of stock
options
10
—
50
—
Payments on lease and other financing
obligations
(16)
(11)
(49)
(37)
Payments for withholding of employee taxes
related to stock-based compensation
(6)
(3)
(45)
(48)
Other
(1)
(22)
(4)
(24)
Net cash provided by (used in) financing
activities
(242)
530
(1,119)
(1,506)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
4
(2)
4
(4)
Net change in cash, cash equivalents and
restricted cash
1,021
881
2,583
(666)
Cash, cash equivalents and restricted cash
at beginning of period
3,911
1,942
2,349
3,489
Cash, cash equivalents and restricted cash
at end of period
$
4,932
$
2,823
$
4,932
$
2,823
NEWMONT CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in
millions)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Reconciliation of cash, cash equivalents
and restricted cash:
Cash and cash equivalents
$
4,828
$
2,712
$
4,828
$
2,712
Restricted cash included in Other current
assets
—
19
—
19
Restricted cash included in Other
non-current assets
104
92
104
92
Total cash, cash equivalents and
restricted cash
$
4,932
$
2,823
$
4,932
$
2,823
(1)
Acquisitions, net for the three months
ended September 30, 2019 is comprised of $— cash and cash
equivalents acquired, net of $— cash paid to Goldcorp shareholders,
in the Newmont Goldcorp transaction and $6 of restricted cash
acquired in the formation of Nevada Gold Mines.
(2)
Acquisitions, net for the nine months
ended September 30, 2019 is comprised of $138 cash and cash
equivalents acquired, net of $17 cash paid to Goldcorp
shareholders, in the Newmont Goldcorp transaction and $6 of
restricted cash acquired in the formation of Nevada Gold Mines.
NEWMONT CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited, in millions)
At September 30,
2020
At December 31, 2019
ASSETS
Cash and cash equivalents
$
4,828
$
2,243
Trade receivables
324
373
Investments
313
237
Inventories
983
1,014
Stockpiles and ore on leach pads
805
812
Other current assets
407
570
Current assets held for sale
—
1,023
Current assets
7,660
6,272
Property, plant and mine development,
net
24,333
25,276
Investments
3,030
3,199
Stockpiles and ore on leach pads
1,690
1,484
Deferred income tax assets
505
549
Goodwill
2,771
2,674
Other non-current assets
562
520
Total assets
$
40,551
$
39,974
LIABILITIES
Accounts payable
$
418
$
539
Employee-related benefits
338
361
Income and mining taxes payable
322
162
Lease and other financing obligations
100
100
Debt
551
—
Other current liabilities
974
880
Current liabilities held for sale
—
343
Current liabilities
2,703
2,385
Debt
5,479
6,138
Lease and other financing obligations
547
596
Reclamation and remediation
liabilities
3,522
3,464
Deferred income tax liabilities
2,391
2,407
Employee-related benefits
522
448
Silver streaming agreement
1,015
1,058
Other non-current liabilities
752
1,061
Total liabilities
16,931
17,557
Contingently redeemable noncontrolling
interest
43
47
EQUITY
Common stock
1,292
1,298
Treasury stock
(165)
(120)
Additional paid-in capital
18,156
18,216
Accumulated other comprehensive income
(loss)
(245)
(265)
Retained earnings
3,623
2,291
Newmont stockholders' equity
22,661
21,420
Noncontrolling interests
916
950
Total equity
23,577
22,370
Total liabilities and equity
$
40,551
$
39,974
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. For additional
information regarding our discontinued operations, see Note 13 to
the Condensed Consolidated Financial Statements.
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
September 30, 2020
Nine Months Ended
September 30, 2020
per share data (1)
per share data (1)
basic
diluted
basic
diluted
Net income (loss) attributable to Newmont
stockholders
$
839
$
1.04
$
1.04
$
2,005
$
2.49
$
2.49
Net loss (income) attributable to Newmont
stockholders from discontinued operations (2)
(228)
(0.28)
(0.28)
(145)
(0.18)
(0.18)
Net income (loss) attributable to Newmont
stockholders from continuing operations
611
0.76
0.76
1,860
2.31
2.31
(Gain) loss on asset and investment sales
(3)
(1)
—
—
(593)
(0.73)
(0.73)
Change in fair value of investments
(4)
(57)
(0.07)
(0.07)
(191)
(0.24)
(0.24)
Impairment of investments (5)
—
—
—
93
0.11
0.11
Pension settlement (6)
83
0.10
0.10
85
0.10
0.10
Loss on debt extinguishment (7)
—
—
—
77
0.09
0.09
COVID-19 specific costs, net (8)
27
0.03
0.03
62
0.08
0.08
Settlement costs, net (9)
23
0.03
0.03
31
0.04
0.04
Impairment of long-lived and other assets
(10)
24
0.03
0.03
29
0.04
0.04
Goldcorp transaction and integration costs
(11)
—
—
—
23
0.03
0.03
Restructuring and severance, net (12)
9
0.01
0.01
11
0.01
0.01
Tax effect of adjustments (13)
(32)
(0.03)
(0.04)
93
0.11
0.11
Valuation allowance and other tax
adjustments, net (14)
10
0.01
0.01
(296)
(0.35)
(0.36)
Adjusted net income (loss) (15)
$
697
$
0.87
$
0.86
$
1,284
$
1.60
$
1.59
Weighted average common shares (millions):
(16)
803
806
804
806
(1)
Per share measures may not recalculate due
to rounding.
(2)
For additional information regarding our
discontinued operations, see Note 13 to our Condensed Consolidated
Financial Statements.
(3)
(Gain) loss on asset and investment sales,
included in Gain on asset and investment sales, net, primarily
represents a $493 gain on the sale of Kalgoorlie in January 2020, a
$91 gain on the sale of Continental and a $9 gain on the sale of
Red Lake in March 2020. For additional information, see Note 9 to
our Condensed Consolidated Financial Statements.
(4)
Change in fair value of investments,
included in Other income, net, primarily represents unrealized
holding gains and losses on marketable equity securities and our
investment instruments. For additional information regarding our
investments, see Note 19 to our Condensed Consolidated Financial
Statements.
(5)
Impairment of investments, included in
Other income, net, primarily represents the other-than-temporary
impairment of the TMAC investment recorded in March 2020.
(6)
Pension settlements, included in Other
income, net, represents pension settlement charges in 2020.
(7)
Loss on debt extinguishment, included in
Other income, net, primarily represents losses on the
extinguishment of a portion of the 2022 Senior Notes and 2023
Senior Notes during March and April 2020.
(8)
COVID-19 specific costs, net, included in
Other expense, net, represents incremental direct costs incurred as
a result of actions taken to protect against the impacts of the
COVID-19 pandemic. Amounts are presented net of income (loss)
attributable to noncontrolling interests of $(5) and $(5),
respectively.
(9)
Settlement costs, net, included in Other
expense, net, primarily represents costs related to the Cedros
community agreement at Penasquito in Mexico, a water related
settlement at Yanacocha in Peru, mineral interest settlements at
Ahafo and Akyem in Africa and other related costs. Amounts are
presented net of income (loss) attributable to noncontrolling
interests of $(3) and $(3), respectively.
(10)
Impairment of long-lived and other assets,
included in Other expense, net, represents non-cash write-downs of
long-lived assets and materials and supplies inventories.
(11)
Goldcorp transaction and integration
costs, included in Other expense, net, primarily represents costs
incurred related to the Newmont Goldcorp transaction completed
during 2019 as well as subsequent integration costs.
(12)
Restructuring and severance, net, included
in Other expense, net, primarily represents severance and related
costs associated with significant organizational or operating model
changes implemented by the Company. Amounts are presented net of
income (loss) attributable to noncontrolling interests of $— and
$(1), respectively.
(13)
The tax effect of adjustments, included in
Income and mining tax benefit (expense), represents the tax effect
of adjustments in footnotes (3) through (12), as described above,
and are calculated using the applicable regional tax rate.
(14)
Valuation allowance and other tax
adjustments, net, included in Income and mining tax benefit
(expense), is recorded for items such as foreign tax credits,
alternative minimum tax credits, capital losses, disallowed foreign
losses, and the effects of changes in foreign currency exchange
rates on deferred tax assets and deferred tax liabilities. The
adjustment for the three and nine months ended September 30, 2020
is due to a net increase or (decrease) to net operating losses, tax
credit carryovers and other deferred tax assets subject to
valuation allowance of $7 and $(113), respectively, the effects of
changes in foreign exchange rates on deferred tax assets and
liabilities of $14 and $(173), respectively, changes to the reserve
for uncertain tax positions of $(10) and $(19), respectively, and
other tax adjustments of $3 and $35, respectively. Total amount is
presented net of income (loss) attributable to noncontrolling
interests of $(4) and $(26), respectively.
(15)
Adjusted net income (loss) has not been
adjusted for $25 and $158 of cash and $9 and $83 of non-cash care
and maintenance costs, included in Care and maintenance and
Depreciation and amortization, respectively, which primarily
represent costs associated with our Musselwhite, Éléonore,
Peñasquito, Yanacocha and Cerro Negro sites being temporarily
placed into care and maintenance in response to the COVID-19
pandemic during a portion of the three and nine months ended
September 30, 2020, respectively. Amounts are presented net of
income (loss) attributable to noncontrolling interests of $1, $13,
$— and $3, respectively.
(16)
Adjusted net income (loss) per diluted
share is calculated using diluted common shares, which are
calculated in accordance with U.S. GAAP.
Three Months Ended
September 30, 2019
Nine Months Ended
September 30, 2019
per share data (1)
per share data (1)
basic
diluted
basic
diluted
Net income (loss) attributable to Newmont
stockholders
$
2,178
$
2.66
$
2.65
$
2,240
$
3.16
$
3.16
Net loss (income) attributable to Newmont
stockholders from discontinued operations (2)
48
0.06
0.06
100
0.14
0.14
Net income (loss) attributable to Newmont
stockholders from continuing operations
2,226
2.72
2.71
2,340
3.30
3.30
Gain on formation of Nevada Gold Mines
(3)
(2,366)
(2.88)
(2.88)
(2,366)
(3.34)
(3.34)
Goldcorp transaction and integration costs
(4)
26
0.03
0.03
185
0.26
0.26
Change in fair value of investments
(5)
(19)
(0.02)
(0.02)
(75)
(0.10)
(0.10)
Reclamation and remediation charges
(6)
17
0.02
0.02
49
0.07
0.07
Loss (gain) on asset and investment sales,
net (7)
1
—
—
(30)
(0.04)
(0.04)
Nevada JV transaction and integration
costs (8)
3
—
—
26
0.05
0.05
Pension curtailment (9)
8
0.01
0.01
8
0.02
0.02
Restructuring and severance (10)
—
—
—
5
0.01
0.01
Impairment of long-lived and other assets,
net (11)
2
—
—
3
—
—
Settlement costs (12)
2
—
—
2
—
—
Impairment of investments (13)
1
—
—
2
—
—
Tax effect of adjustments (14)
439
0.54
0.54
426
0.60
0.60
Valuation allowance and other tax
adjustments, net (15)
(48)
(0.06)
(0.05)
(15)
(0.04)
(0.04)
Adjusted net income (loss)
$
292
$
0.36
$
0.36
$
560
$
0.79
$
0.79
Weighted average common shares (millions):
(16)
820
822
708
709
(1)
Per share measures may not recalculate due
to rounding.
(2)
For additional information regarding our
discontinued operations, see Note 13 to our Condensed Consolidated
Financial Statements.
(3)
Gain on formation of Nevada Gold Mines,
included in Gain on formation of Nevada Gold Mines, represents the
difference between the fair value of our 38.5% interest in NGM and
the carrying value of the Nevada mining operations contributed.
(4)
Goldcorp transaction and integration
costs, included in Other expense, net, primarily represents costs
incurred related to the Newmont Goldcorp transaction during
2019.
(5)
Change in fair value of investments,
included in Other income, net, primarily represents unrealized
holding gains and losses on marketable equity securities and our
investment instruments in Continental. For additional information
regarding our investment, see Note 19 to our Condensed Consolidated
Financial Statements.
(6)
Reclamation and remediation charges,
included in Reclamation and remediation, represent revisions to
remediation plans at the Company’s former historic mining
operations, including adjustments related to a review of the
project cost estimates at the Dawn remediation site and increased
water management costs at the Con Mine.
(7)
Loss (gain) on asset and investment sales,
net, included in Other income, net, primarily represents a gain on
the sale of exploration property in North America in 2019. Amounts
are presented net of income (loss) attributable to noncontrolling
interest of $— and $2, respectively.
(8)
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.
(9)
Pension curtailment, included in Other
income, net, primarily represents curtailment charges recognized
due to a significant amount of employees being terminated as a
result of establishing NGM.
(10)
Restructuring and severance, included in
Other expense, net, primarily represents certain costs associated
with severance and legal costs.
(11)
Impairment of long-lived and other assets,
net, included in Other expense, net, represents non-cash
write-downs of long-lived assets. Amounts are presented net of
income (loss) attributable to noncontrolling interests of $(1) and
$(1), respectively.
(12)
Settlement costs, included in Other
expense, net, primarily represents certain costs associated with
legal and other settlements.
(13)
Impairment of investments, included in
Other income, net, represents other-than-temporary impairments of
other investments.
(14)
The tax effect of adjustments, included in
Income and mining tax benefit (expense), represents the tax effect
of adjustments in footnotes (3) through (13), as described above,
and are calculated using the applicable regional tax rate.
(15)
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. Amounts are presented net
of income (loss) attributable to noncontrolling interests of $(3)
and $(2), respectively.
(16)
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 September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net income (loss) attributable to Newmont
stockholders
$
839
$
2,178
$
2,005
$
2,240
Net income (loss) attributable to
noncontrolling interests
17
26
22
83
Net loss (Income) from discontinued
operations (1)
(228)
48
(145)
100
Equity loss (income) of affiliates
(53)
(32)
(119)
(53)
Income and mining tax expense
(benefit)
305
558
446
703
Depreciation and amortization
592
548
1,685
1,347
Interest expense, net
75
77
235
217
EBITDA
$
1,547
$
3,403
$
4,129
$
4,637
Adjustments:
(Gain) loss on asset and investment sales
(2)
$
(1)
$
1
$
(593)
$
(32)
Change in fair value of investments
(3)
(57)
(19)
(191)
(75)
Impairment of investments (4)
—
1
93
2
Pension settlements and curtailments
(5)
83
8
85
8
Loss on debt extinguishment (6)
—
—
77
—
COVID-19 specific costs (7)
32
—
67
—
Settlement costs (8)
26
2
34
2
Impairment of long-lived and other assets
(9)
24
3
29
4
Goldcorp transaction and integration costs
(10)
—
26
23
185
Restructuring and severance (11)
9
—
12
5
Reclamation and remediation charges
(12)
—
17
—
49
Nevada JV transaction and integration
costs (13)
—
3
—
26
Gain on formation of Nevada Gold Mines
(14)
—
(2,366)
—
(2,366)
Adjusted EBITDA (15)
$
1,663
$
1,079
$
3,765
$
2,445
(1)
For additional information regarding our
discontinued operations, see Note 13 to our Condensed Consolidated
Financial Statements.
(2)
(Gain) loss on asset and investment sales,
included in Gain on asset and investment sales, net, primarily
represents a $493 gain on the sale of Kalgoorlie in January 2020, a
$91 gain on the sale of Continental and a $9 gain on the sale of
Red Lake in March 2020 and represents a gain on the sale of
exploration land in 2019. For additional information, see Note 9 to
our Condensed Consolidated Financial Statements.
(3)
Change in fair value of investments,
included in Other income, net, primarily represents unrealized
holding gains and losses on marketable equity securities and our
investment instruments. For additional information regarding our
investments, see Note 19 to our Condensed Consolidated Financial
Statements.
(4)
Impairment of investments, included in
Other income, net, primarily represents the other-than-temporary
impairment of the TMAC investment recorded in March 2020.
(5)
Pension settlements and curtailments,
included in Other income, net, primarily represents pension
settlements in 2020 and pension curtailments in 2019.
(6)
Loss on debt extinguishment, included in
Other income, net, primarily represents losses on the
extinguishment of a portion of the 2022 Senior Notes and 2023
Senior Notes during March and April 2020.
(7)
COVID-19 specific costs, included in Other
expense, net, represents incremental direct costs incurred as a
result of actions taken to protect against the impacts of the
COVID-19 pandemic.
(8)
Settlement costs, included in Other
expense, net, primarily represents costs related to the Cedros
community agreement at Penasquito in Mexico, a water related
settlement at Yanacocha in Peru, mineral interest settlements at
Ahafo and Akyem in Africa and other related costs, and certain
costs associated with legal and other settlements for 2019.
(9)
Impairment of long-lived and other assets,
included in Other expense, net, represents non-cash write-downs of
long-lived assets and materials and supplies inventories.
(10)
Goldcorp transaction and integration
costs, included in Other expense, net, primarily represents costs
incurred related to the Newmont Goldcorp transaction completed
during 2019 as well as subsequent integration costs.
(11)
Restructuring and severance, included in
Other expense, net, primarily represents severance and related
costs associated with significant organizational or operating model
changes implemented by the Company for all periods presented.
(12)
Reclamation and remediation charges,
included in Reclamation and remediation, represent revisions to
remediation plans at the Company’s former historic mining
operations in 2019, including 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.
(13)
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.
(14)
Gain on formation of Nevada Gold Mines,
included in 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.
(15)
Adjusted EBITDA has not been adjusted for
$26 and $171 of cash care and maintenance costs, included in Care
and maintenance, which primarily represent costs incurred
associated with our Musselwhite, Éléonore, Peñasquito, Yanacocha
and Cerro Negro mine sites being temporarily placed into care and
maintenance in response to the COVID-19 pandemic during a portion
of the three and nine months ended September 30, 2020,
respectively.
Additionally, the Company uses Pueblo Viejo EBITDA as a non-GAAP
measure to evaluate the operating performance of its investment in
the Pueblo Viejo mine. Pueblo Viejo EBITDA does not represent, and
should not be considered an alternative to, Equity income (loss) of
affiliates, as defined by GAAP, and does not necessarily indicate
whether cash distributions from Pueblo Viejo will match Pueblo
Viejo EBITDA or earnings from affiliates. Although the Company has
the ability to exert significant influence, it does not have direct
control over the operations or resulting revenues and expenses, nor
does it proportionately consolidate its investment in Pueblo Viejo.
The Company believes that Pueblo Viejo EBITDA provides useful
information to investors and others in understanding and evaluating
the operating results of its investment in Pueblo Viejo, in the
same manner as management and the Board of Directors. Equity income
(loss) of affiliates is reconciled to Pueblo Viejo EBITDA as
follows:
Three Months Ended September
30,
2020
2019
Equity income (loss) of affiliates
$
53
$
32
Equity (income) loss of affiliates,
excluding Pueblo Viejo (1)
(1)
7
Equity income (loss) of affiliates, Pueblo
Viejo (1)
52
39
Reconciliation of Pueblo Viejo on
attributable basis:
Income and mining tax expense
(benefit)
45
20
Depreciation and amortization
18
21
Pueblo Viejo EBITDA
$
115
$
80
(1)
See Note 12 to the Condensed Consolidated
Financial Statements.
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 match 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,
2020
2019
Income (Loss) before Income and Mining Tax
and other Items, NGM (1)
$
223
$
85
Depreciation and amortization (1)
151
149
NGM EBITDA
$
374
$
234
(1)
See Note 4 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
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Net cash provided by (used in) operating
activities
$
1,596
$
791
$
3,196
$
1,661
Less: Net cash used in (provided by)
operating activities of discontinued operations
1
2
8
7
Net cash provided by (used in) operating
activities of continuing operations
1,597
793
3,204
1,668
Less: Additions to property, plant and
mine development
(296)
(428)
(904)
(1,033)
Free Cash Flow
$
1,301
$
365
$
2,300
$
635
Net cash provided by (used in) investing
activities (1)
$
(337)
$
(438)
$
502
$
(817)
Net cash provided by (used in) financing
activities
$
(242)
$
530
$
(1,119)
$
(1,506)
(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
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Costs applicable to sales (1)(2)
$
1,130
$
1,232
$
3,210
$
3,412
Gold sold (thousand ounces)
1,495
1,682
4,210
4,656
Costs applicable to sales per ounce
(3)
$
756
$
733
$
762
$
733
(1)
Includes by-product credits of $34 and $78
during the three and nine months ended September 30, 2020,
respectively, and $31 and $60 during the three and nine months
ended September 30, 2019, 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
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Costs applicable to sales (1)(2)
$
139
$
160
$
449
$
324
Gold equivalent ounces - other metals
(thousand ounces) (3)
248
213
780
357
Costs applicable to sales per ounce
(4)
$
556
$
747
$
575
$
908
(1)
Includes by-product credits of $1 and $2
during the three and nine months ended September 30, 2020,
respectively, and $— and $2 during the three and nine months ended
September 30, 2019, 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 $16/oz.), Lead ($0.95/lb.) and Zinc ($1.20/lb.)
pricing for 2020 and Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($15/oz.), Lead ($0.90/lb.) and Zinc ($1.05/lb.) pricing for
2019.
(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,
Nine Months Ended
September 30,
2020
2019
2020
2019
Cost applicable to sales, NGM (1)(2)
$
258
$
235
$
761
$
235
Gold sold (thousand ounces), NGM
340
334
997
334
Costs applicable to sales per ounce, NGM
(3)
$
761
$
701
$
764
$
701
(1)
See Note 4 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 4 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.
Care and maintenance and Other expense, net. Care and
maintenance includes direct operating and development capital costs
incurred at the mine sites during the period that these sites were
temporarily placed into care and maintenance in response to the
COVID-19 pandemic. For Other expense, net we exclude certain
exceptional or unusual expenses, 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. 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 and are
excluded from the calculation of AISC. 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.
Three Months Ended September 30,
2020
Costs Applicable to
Sales(1)(2)(3)
Reclamation Costs(4)
Advanced Projects, Research
and Development and Exploration(5)
General and
Administrative
Care and Maintenance and Other
Expense, Net(6)(7)
Treatment and Refining
Costs
Sustaining Capital and Lease
Related Costs(8)(9)
All-In Sustaining
Costs
Ounces (000) Sold
All-In Sustaining Costs Per
oz.(10)
Gold
CC&V
$
61
$
1
$
3
$
—
$
—
$
—
$
10
$
75
71
$
1,081
Musselwhite
46
1
2
—
2
—
7
58
47
1,260
Porcupine
61
—
3
—
—
—
10
74
81
911
Éléonore
53
1
—
—
—
—
10
64
57
1,118
Peñasquito
74
2
—
—
—
18
13
107
130
835
Other North America
—
—
4
1
2
—
—
7
—
—
North America
295
5
12
1
4
18
50
385
386
1,003
Yanacocha
81
13
2
1
4
—
6
107
80
1,325
Merian
86
1
—
—
—
—
10
97
106
917
Cerro Negro
43
1
—
—
16
—
8
68
51
1,346
Other South America
—
—
1
2
1
—
—
4
—
—
South America
210
15
3
3
21
—
24
276
237
1,162
Boddington
148
3
1
—
—
3
17
172
175
985
Tanami
62
—
3
—
—
—
29
94
130
723
Other Australia
—
—
—
3
1
—
1
5
—
—
Australia
210
3
4
3
1
3
47
271
305
889
Ahafo
99
3
1
1
—
—
20
124
136
912
Akyem
58
5
—
—
—
—
7
70
91
775
Other Africa
—
—
—
2
—
—
—
2
—
—
Africa
157
8
1
3
—
—
27
196
227
865
Nevada Gold Mines
258
4
6
3
—
2
34
307
340
904
Nevada
258
4
6
3
—
2
34
307
340
904
Corporate and Other
—
—
24
55
—
—
10
89
—
—
Total Gold
$
1,130
$
35
$
50
$
68
$
26
$
23
$
192
$
1,524
1,495
$
1,020
Gold equivalent ounces - other metals
(11)
Peñasquito
$
111
$
2
$
—
$
—
$
1
$
31
$
14
$
159
215
$
735
Boddington
28
—
—
—
—
1
3
32
33
998
Total Gold Equivalent Ounces
$
139
$
2
$
—
$
—
$
1
$
32
$
17
$
191
248
$
770
Consolidated
$
1,269
$
37
$
50
$
68
$
27
$
55
$
209
$
1,715
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes by-product credits of $35 and
excludes co-product revenues of $310.
(3)
Includes stockpile and leach pad inventory
adjustments of $6 at NGM.
(4)
Reclamation costs include operating
accretion and amortization of asset retirement costs of $23 and
$14, respectively, and exclude accretion and reclamation and
remediation adjustments at former operating properties that have
entered the closure phase and have no substantive future economic
value of $12 and $3, respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $1
at CC&V, $1 at Éléonore, $1 at Peñasquito, $1 at Other North
America, $3 at Merian, $6 at Other South America, $1 at Tanami, $5
at Other Australia, $4 at Ahafo, $2 at Akyem, $1 at Other Africa,
$6 at NGM and $5 at Corporate and Other, totaling $37 related to
developing new operations or major projects at existing operations
where these projects will materially benefit the operation.
(6)
Care and maintenance includes $5 at
Musselwhite, $2 at Yanacocha, $18 at Cerro Negro and $1 at Other
South America of cash care and maintenance costs associated with
the sites temporarily being placed into care and maintenance or
operating at reduced levels in response to the COVID-19 pandemic,
during the period ended September 30, 2020 that we would have
continued to incur if the site were not temporarily placed into
care and maintenance.
(7)
Other expense, net is adjusted for
incremental costs of responding to the COVID-19 pandemic of $32,
settlement costs of $26, impairment of long-lived and other assets
of $24 and restructuring and severance of $9.
(8)
Includes sustaining capital expenditures
of $55 for North America, $24 for South America, $47 for Australia,
$26 for Africa, $34 for Nevada, and $10 for Corporate and Other,
totaling $196 and excludes development capital expenditures,
capitalized interest and the change in accrued capital totaling
$100. The following are major development projects: Musselwhite
Materials Handling, Éléonore Lower Mine Material Handling System,
Quecher Main, Yanacocha Sulfides, Tanami Expansion 2, Subika Mining
Method Change, Ahafo North, Goldrush Complex, Turquoise Ridge 3rd
shaft and Range Front Declines at Cortez.
(9)
Includes finance lease payments for
sustaining projects of $13.
(10)
Per ounce measures may not recalculate due
to rounding.
(11)
Gold equivalent ounces is calculated as
pounds or ounces produced multiplied by the ratio of the other
metals price to the gold price, using Gold ($1,200/oz.), Copper
($2.75/lb.), Silver $16.00/oz.), Lead ($0.95/lb.) and Zinc
($1.20/lb.) pricing for 2020.
Three Months Ended September 30,
2019
Costs
Applicable
to
Sales (1)(2)(3)
Reclamation
Costs (4)
Advanced
Projects,
Research and
Development
and
Exploration(5)
General and
Administrative
Other
Expense,
Net (6)
Treatment and Refining
Costs
Sustaining Capital and Lease
Related Costs(7)(8)
All-In Sustaining
Costs
Ounces (000) Sold
All-In Sustaining Costs Per
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 accretion and reclamation and
remediation adjustments at former operating properties that have
entered the closure phase and have no substantive future economic
value 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
Goldcorp transaction and integration costs of $26, Nevada JV
transaction and integration costs of $3, impairment of long-lived
and other assets of $3 and settlement 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: Musselwhite
Materials Handling, Borden, Quecher Main, Yanacocha Sulfides,
Tanami Expansion 2, Ahafo North, Ahafo Mill Expansion and Turquoise
Ridge joint venture 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 ($15.00/oz.), Lead ($0.90/lb.) and Zinc
($1.05/lb.) pricing for 2019.
Nine Months Ended September 30,
2020
Costs Applicable to
Sales(1)(2)(3)
Reclamation Costs(4)
Advanced Projects, Research
and Development and Exploration(5)
General and
Administrative
Care and Maintenance and Other
Expense, Net(6)(7)
Treatment and Refining
Costs
Sustaining Capital and Lease
Related Costs(8)(9)
All-In Sustaining
Costs
Ounces (000) Sold
All-In Sustaining Costs Per
oz.(10)
Gold
CC&V
$
180
$
4
$
5
$
—
$
—
$
—
$
27
$
216
200
$
1,085
Red Lake
45
—
1
—
—
—
4
50
42
1,182
Musselwhite
73
2
5
—
24
—
16
120
62
1,945
Porcupine
174
2
7
—
—
—
25
208
241
862
Éléonore
127
2
3
—
26
—
27
185
137
1,345
Peñasquito
188
4
—
—
19
27
24
262
311
845
Other North America
—
—
4
9
3
—
1
17
—
—
North America
787
14
25
9
72
27
124
1,058
993
1,066
Yanacocha
270
42
5
1
30
—
14
362
266
1,358
Merian
239
3
3
1
—
—
27
273
337
811
Cerro Negro
115
2
1
—
54
—
24
196
154
1,271
Other South America
—
—
1
7
2
—
—
10
—
—
South America
624
47
10
9
86
—
65
841
757
1,111
Boddington
421
9
3
—
—
8
64
505
482
1,046
Tanami
189
1
7
—
—
—
68
265
375
707
Other Australia
—
—
—
9
1
—
3
13
—
—
Australia
610
10
10
9
1
8
135
783
857
914
Ahafo
264
7
2
1
2
—
56
332
338
983
Akyem
164
17
1
—
1
—
18
201
268
750
Other Africa
—
—
—
5
—
—
—
5
—
—
Africa
428
24
3
6
3
—
74
538
606
889
Nevada Gold Mines
761
11
16
8
6
8
124
934
997
936
Nevada
761
11
16
8
6
8
124
934
997
936
Corporate and Other
—
—
53
164
3
—
31
251
—
—
Total Gold
$
3,210
$
106
$
117
$
205
$
171
$
43
$
553
$
4,405
4,210
$
1,046
Gold equivalent ounces - other metals
(11)
Peñasquito
$
371
$
6
$
1
$
—
$
19
$
114
$
67
$
578
688
$
840
Boddington
78
1
—
—
—
4
12
95
92
1,032
Total Gold Equivalent Ounces
$
449
$
7
$
1
$
—
$
19
$
118
$
79
$
673
780
$
862
Consolidated
$
3,659
$
113
$
118
$
205
$
190
$
161
$
632
$
5,078
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes by-product credits of $80 and
excludes co-product revenues of $769.
(3)
Includes stockpile and leach pad inventory
adjustments of $18 at Yanacocha and $23 at NGM.
(4)
Reclamation costs include operating
accretion and amortization of asset retirement costs of $69 and
$44, respectively, and exclude accretion and reclamation and
remediation adjustments at former operating properties that have
entered the closure phase and have no substantive future economic
value of $38 and $9, respectively.
(5)
Advanced projects, research and
development and Exploration excludes development expenditures of $4
at CC&V, $1 at Porcupine, $1 at Éléonore, $2 at Peñasquito,$1
at Other North America, $2 at Yanacocha, $6 at Merian, $19 at Other
South America, $4 at Tanami, $11 at Other Australia, $12 at Ahafo,
$4 at Akyem, $3 at Other Africa, $14 at NGM and $8 at Corporate and
Other, totaling $92 related to developing new operations or major
projects at existing operations where these projects will
materially benefit the operation.
(6)
Care and maintenance includes $28 at
Musselwhite, $26 at Éléonore, $38 at Peñasquito, $27 at Yanacocha,
$50 at Cerro Negro and $2 at Other South America of cash care and
maintenance costs associated with the sites temporarily being
placed into care and maintenance or operating at reduced levels in
response to the COVID-19 pandemic, during the period ended
September 30, 2020 that we would have continued to incur if the
site were not temporarily placed into care and maintenance.
(7)
Other expense, net is adjusted for
incremental costs of responding to the COVID-19 pandemic of $67,
settlement costs of $34, impairment of long-lived and other assets
of $29, Goldcorp transaction and integration costs of $23 and
restructuring and severance costs of $12.
(8)
Includes sustaining capital expenditures
of $156 for North America, $65 for South America, $139 for
Australia, $73 for Africa, $124 for Nevada, and $31 for Corporate
and Other, totaling $588 and excludes development capital
expenditures, capitalized interest and the change in accrued
capital totaling $316. The following are major development
projects: Musselwhite Materials Handling, Éléonore Lower Mine
Material Handling System, Quecher Main, Yanacocha Sulfides, Tanami
Expansion 2, Subika Mining Method Change, Ahafo North, Goldrush
Complex, Turquoise Ridge 3rd shaft and Range Front Declines at
Cortez.
(9)
Includes finance lease payments for
sustaining projects of $44.
(10)
Per ounce measures may not recalculate due
to rounding.
(11)
Gold equivalent ounces is calculated as
pounds or ounces produced multiplied by the ratio of the other
metals price to the gold price, using Gold ($1,200/oz.), Copper
($2.75/lb.), Silver $16.00/oz.), Lead ($0.95/lb.) and Zinc
($1.20/lb.) pricing for 2020.
Nine Months Ended September 30,
2019
Costs
Applicable
to
Sales (1)(2)(3)
Reclamation
Costs (4)
Advanced
Projects,
Research and
Development
and
Exploration(5)
General and
Administrative
Other
Expense,
Net (6)
Treatment and Refining
Costs
Sustaining
Capital and Lease Related
Costs(7)(8)
All-In Sustaining
Costs
Ounces (000) Sold
All-In
Sustaining
Costs per
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 accretion and reclamation and
remediation adjustments at former operating properties that have
entered the closure phase and have no substantive future economic
value 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
Goldcorp transaction and integration costs of $185, Nevada JV
transaction and integration costs of $26, restructuring and
severance costs of $5, impairment of long-lived and other assets of
$4 and settlement costs of $2.
(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: Musselwhite
Materials Handling, Borden, Quecher Main, Yanacocha Sulfides,
Tanami Expansion 2, Ahafo North, Subika Underground, Ahafo Mill
Expansion and Turquoise Ridge joint venture 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 ($15.00/oz.), Lead ($0.90/lb.) and Zinc
($1.05/lb.) pricing for 2019.
A reconciliation of the 2020 Gold AISC outlook to the 2020 Gold
CAS outlook is provided below. The estimates in the table below are
considered “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor created by such sections
and other applicable laws.
2020 Proforma Outlook Gold
(7)(8)
Outlook Estimate
(in millions, except ounces and per
ounce)
Cost Applicable to Sales (1)(2)
$
4,450
Reclamation Costs (3)
170
Advanced Projects & Exploration
(4)
130
General and Administrative (5)
240
Other Expense
160
Treatment and Refining Costs
30
Sustaining Capital (6)
790
Sustaining Finance Lease Payments
30
All-in Sustaining Costs
$
6,000
Ounces (000) Sold (9)
5,900
All-in Sustaining Costs per Oz
$
1,015
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes stockpile and leach pad inventory
adjustments.
(3)
Reclamation costs include operating
accretion and amortization of asset retirement costs.
(4)
Advanced Project and Exploration excludes
non-sustaining advanced projects and exploration.
(5)
Includes stock based compensation.
(6)
Excludes development capital expenditures,
capitalized interest and change in accrued capital.
(7)
The reconciliation is provided for
illustrative purposes in order to better describe management’s
estimates of the components of the calculation. Estimates for each
component of the forward-looking All-in sustaining costs per ounce
are independently calculated and, as a result, the total All-in
sustaining costs and the All-in sustaining costs per ounce may not
sum to the component ranges. While a reconciliation to the most
directly comparable GAAP measure has been provided for 2020 AISC
Gold and Co-Product Outlook on a consolidated basis, a
reconciliation has not been provided on an individual site or
project basis in reliance on Item 10(e)(1)(i)(B) of Regulation S-K
because such reconciliation is not available without unreasonable
efforts.
(8)
All values are presented on a consolidated
basis for Newmont.
(9)
Consolidated production for Yanacocha and
Merian is presented on a total production basis for the mine site
and excludes production from Pueblo Viejo.
A reconciliation of the 2020 Co-products AISC outlook to the
2020 Co-Products CAS outlook is provided below. The estimates in
the table below are considered “forward-looking statements” within
the 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor created by such sections
and other applicable laws.
2020 Proforma Outlook - Co-Product
(7)(8)
Outlook Estimate
(in millions, except GEO and per
GEO)
Cost Applicable to Sales (1)(2)
$
610
Reclamation Costs (3)
10
Advanced Projects & Exploration
(4)
10
General and Administrative (5)
25
Other Expense
20
Treatment and Refining Costs
150
Sustaining Capital (6)
110
Sustaining Finance Lease Payments
20
All-in Sustaining Costs
$
955
Co-Product GEO (000) Sold (9)
1,010
All-in Sustaining Costs per Co Product
GEO
$
945
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes stockpile and leach pad inventory
adjustments.
(3)
Reclamation costs include operating
accretion and amortization of asset retirement costs.
(4)
Advanced Project and Exploration excludes
non-sustaining advanced projects and exploration.
(5)
Includes stock based compensation.
(6)
Excludes development capital expenditures,
capitalized interest and change in accrued capital.
(7)
The reconciliation is provided for
illustrative purposes in order to better describe management’s
estimates of the components of the calculation. Estimates for each
component of the forward-looking All-in sustaining costs per ounce
are independently calculated and, as a result, the total All-in
sustaining costs and the All-in sustaining costs per ounce may not
sum to the component ranges. While a reconciliation to the most
directly comparable GAAP measure has been provided for 2020 AISC
Gold and Co-Product Outlook on a consolidated basis, a
reconciliation has not been provided on an individual site or
project basis in reliance on Item 10(e)(1)(i)(B) of Regulation S-K
because such reconciliation is not available without unreasonable
efforts.
(8)
All values are presented on a consolidated
basis for Newmont.
(9)
Co-Product GEO are all non-gold
co-products (Peñasquito silver, zinc, lead, Boddington copper).
Net debt to Adjusted EBITDA ratio
Management uses net debt to 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 Adjusted EBITDA represents the ratio of the Company’s debt,
net of cash and cash equivalents, to Adjusted EBITDA. Net debt to
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 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 Adjusted EBITDA measure is not
necessarily comparable to such other similarly titled captions of
other companies. The Company believes that net debt to 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 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
Adjusted EBITDA as follows:
Three Months Ended
September 30, 2020
June 30, 2020
March 31, 2020
December 31, 2019
Net income (loss) attributable to Newmont
stockholders
$
839
$
344
$
822
$
565
Net income (loss) attributable to
noncontrolling interests
17
3
2
(4)
Net loss (income) from discontinued
operations
(228)
68
15
(28)
Equity loss (income) of affiliates
(53)
(29)
(37)
(42)
Income and mining tax expense
(benefit)
305
164
(23)
129
Depreciation and amortization
592
528
565
613
Interest expense, net
75
78
82
84
EBITDA
1,547
1,156
1,426
1,317
EBITDA Adjustments:
Pension settlements and curtailments
83
2
—
(28)
Change in fair value of investments
(57)
(227)
93
(91)
COVID-19 specific costs
32
33
2
—
Settlement costs
26
2
6
3
Impairment of long-lived and other
assets
24
5
—
1
Restructuring and severance
9
2
1
2
Loss (gain) on asset and investment
sales
(1)
1
(593)
2
Goldcorp transaction and integration
costs
—
7
16
32
Loss on debt extinguishment
—
3
74
—
Impairment of investments
—
—
93
—
Reclamation and remediation charges
—
—
—
71
Gain on formation of Nevada Gold Mines
—
—
—
(24)
Nevada JV transaction and integration
costs
—
—
—
4
Adjusted EBITDA
1,663
984
1,118
1,289
12 month trailing Adjusted
EBITDA
$
5,054
Total Debt
$
6,030
Lease and other financing obligations
647
Less: Cash and cash equivalents
4,828
Total net debt
$
1,849
Net debt to adjusted EBITDA
0.4
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
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Consolidated gold sales, net
$
2,860
$
2,483
$
7,347
$
6,376
Consolidated copper sales, net
43
40
101
163
Consolidated silver sales, net
138
78
337
109
Consolidated lead sales, net
30
25
92
38
Consolidated zinc sales, net
99
87
239
87
Total sales
$
3,170
$
2,713
$
8,116
$
6,773
Three Months Ended September
30, 2020
Gold
Copper
Silver
Lead
Zinc
(ounces)
(pounds)
(ounces)
(pounds)
(pounds)
Consolidated sales:
Gross before provisional pricing and
streaming impact
$
2,864
$
42
$
122
$
36
$
99
Provisional pricing mark-to-market
19
2
12
(1)
14
Silver streaming amortization
—
—
16
—
—
Gross after provisional pricing and
streaming impact
2,883
44
150
35
113
Treatment and refining charges
(23)
(1)
(12)
(5)
(14)
Net
$
2,860
$
43
$
138
$
30
$
99
Consolidated ounces (thousands)/ pounds
(millions) sold
1,495
14
6,371
42
98
Average realized price (per
ounce/pound)(1):
Gross before provisional pricing and
streaming impact
$
1,917
$
2.94
$
19.15
$
0.87
$
1.01
Provisional pricing mark-to-market
12
0.15
2.00
(0.02)
0.15
Silver streaming amortization
—
—
2.40
—
—
Gross after provisional pricing and
streaming impact
1,929
3.09
23.55
0.85
1.16
Treatment and refining charges
(16)
(0.10)
(1.86)
(0.12)
(0.15)
Net
$
1,913
$
2.99
$
21.69
$
0.73
$
1.01
Nine Months Ended September
30, 2020
Gold
Copper
Silver
Lead
Zinc
(ounces)
(pounds)
(ounces)
(pounds)
(pounds)
Consolidated sales:
Gross before provisional pricing and
streaming impact
$
7,342
$
108
$
306
$
109
$
299
Provisional pricing mark-to-market
48
(3)
18
(3)
5
Silver streaming amortization
—
—
48
—
—
Gross after provisional pricing and
streaming impact
7,390
105
372
106
304
Treatment and refining charges
(43)
(4)
(35)
(14)
(65)
Net
$
7,347
$
101
$
337
$
92
$
239
Consolidated ounces (thousands)/ pounds
(millions) sold
4,210
40
20,260
133
313
Average realized price (per
ounce/pound)(1):
Gross before provisional pricing and
streaming impact
$
1,744
$
2.67
$
15.08
$
0.82
$
0.96
Provisional pricing mark-to-market
11
(0.07)
0.90
(0.02)
0.02
Silver streaming amortization
—
—
2.36
—
—
Gross after provisional pricing and
streaming impact
1,755
2.60
18.34
0.80
0.98
Treatment and refining charges
(10)
(0.11)
(1.68)
(0.11)
(0.21)
Net
$
1,745
$
2.49
$
16.66
$
0.69
$
0.77
(1)
Per ounce/pound measures may not
recalculate due to rounding.
Three Months Ended September
30, 2019
Gold
Copper
Silver
Lead
Zinc
(ounces)
(pounds)
(ounces)
(pounds)
(pounds)
Consolidated sales:
Gross before provisional pricing and
streaming impact
$
2,485
$
44
$
70
$
29
$
112
Provisional pricing mark-to-market
6
(2)
—
—
—
Silver streaming amortization
—
—
11
—
—
Gross after provisional pricing and
streaming impact
2,491
42
81
29
112
Treatment and refining charges
(8)
(2)
(3)
(4)
(25)
Net
$
2,483
$
40
$
78
$
25
$
87
Consolidated ounces (thousands)/ pounds
(millions) sold
1,682
17
4,552
30
107
Average realized price (per
ounce/pound)(1):
Gross before provisional pricing and
streaming impact
$
1,477
$
2.62
$
15.25
$
0.96
$
1.04
Provisional pricing mark-to-market
4
(0.13)
—
—
—
Silver streaming amortization
—
—
2.41
—
—
Gross after provisional pricing and
streaming impact
1,481
2.49
17.66
0.96
1.04
Treatment and refining charges
(5)
(0.12)
(0.48)
(0.12)
(0.23)
Net
$
1,476
$
2.37
$
17.18
$
0.84
$
0.81
Nine Months Ended September
30, 2019
Gold
Copper
Silver
Lead
Zinc
(ounces)
(pounds)
(ounces)
(pounds)
(pounds)
Consolidated sales:
Gross before provisional pricing and
streaming impact
$
6,384
$
173
$
96
$
44
$
112
Provisional pricing mark-to-market
13
(3)
—
—
—
Silver streaming amortization
—
—
16
—
—
Gross after provisional pricing and
streaming impact
6,397
170
112
44
112
Treatment and refining charges
(21)
(7)
(3)
(6)
(25)
Net
$
6,376
$
163
$
109
$
38
$
87
Consolidated ounces (thousands)/ pounds
(millions) sold
4,656
63
6,719
47
107
Average realized price (per
ounce/pound)(1):
Gross before provisional pricing and
streaming impact
$
1,371
$
2.75
$
14.35
$
0.93
$
1.04
Provisional pricing mark-to-market
3
(0.05)
—
—
—
Silver streaming amortization
—
—
2.39
—
—
Gross after provisional pricing and
streaming impact
1,374
2.70
16.74
0.93
1.04
Treatment and refining charges
(4)
(0.11)
(0.51)
(0.12)
(0.23)
Net
$
1,370
$
2.59
$
16.23
$
0.81
$
0.81
(1)
Per ounce/pound 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 a
significant resource in the primary ore-body, and the revenue is
recorded as Sales in our GAAP Consolidated Financial
Statements.
Gold by-product metrics are non-GAAP financial measures that
serve as a basis for comparing the Company’s performance with
certain competitors. As Newmont’s operations are primarily focused
on gold production, “Gold by-product metrics” were developed to
allow investors to view Sales, CAS per ounce and AISC per ounce
calculations that classify all copper, silver, lead and zinc
production as a by-product, even when copper, silver, lead or zinc
is a significant resource in the 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
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Consolidated gold sales, net
$
2,860
$
2,483
$
7,347
$
6,376
Consolidated other metal sales, net
310
230
769
397
Sales
$
3,170
$
2,713
$
8,116
$
6,773
Costs applicable to sales
$
1,269
$
1,392
$
3,659
$
3,736
Less: Consolidated other metal sales,
net
(310)
(230)
(769)
(397)
By-Product costs applicable to sales
$
959
$
1,162
$
2,890
$
3,339
Gold sold (thousand ounces)
1,495
1,682
4,210
4,656
Total Gold CAS per ounce (by-product)
(1)
$
641
$
691
$
686
$
717
Total AISC
$
1,715
$
1,907
$
5,078
$
4,986
Less: Consolidated other metal sales,
net
(310)
(230)
(769)
(397)
By-Product AISC
$
1,405
$
1,677
$
4,309
$
4,589
Gold sold (thousand ounces)
1,495
1,682
4,210
4,656
Total Gold AISC per ounce (by-product)
(1)
$
940
$
997
$
1,024
$
986
(1)
Per ounce measures may not recalculate due
to rounding.
Conference Call Information
A conference call will be held on Thursday, October 29,
2020 at 12:00 p.m. Eastern Time (10:00 a.m. Mountain
Time); it will also be carried on the Company’s website.
Conference Call Details
Dial-In Number
855.209.8210
Intl Dial-In Number
412.317.5213
Conference Name
Newmont
Replay Number
877.344.7529
Intl Replay Number
412.317.0088
Replay Access Code
10148282
Webcast Details
Title: Newmont Third Quarter 2020 Earnings Conference Call
URL:
https://event.on24.com/wcc/r/2626338/3D19516266F04B6CBE6671286959419C
The third quarter 2020 results will be available before the
market opens on Thursday, October 29, 2020 on the “Investor
Relations” section of the Company’s website, www.newmont.com.
Additionally, the conference call will be archived for a limited
time on the Company’s website.
About Newmont
Newmont is the world’s leading gold company and a producer of
copper, silver, zinc and lead. The Company’s world-class portfolio
of assets, prospects and talent is anchored in favorable mining
jurisdictions in North America, South America, Australia and
Africa. Newmont is the only gold producer listed in the S&P 500
Index and is widely recognized for its principled environmental,
social and governance practices. The Company is an industry leader
in value creation, supported by robust safety standards, superior
execution and technical expertise. Newmont was founded in 1921 and
has been publicly traded since 1925.
Cautionary Statement Regarding Forward
Looking Statements, Including Outlook:
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws. Where a
forward-looking statement expresses or implies an expectation or
belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis.
However, such statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ
materially from future results expressed, projected or implied by
the forward-looking statements. Forward-looking statements often
address our expected future business and financial performance and
financial condition; and often contain words such as “anticipate,”
“intend,” “plan,” “will,” “would,” “estimate,” “expect,” “believe,”
“target,” “indicative,” “preliminary,” or “potential.”
Forward-looking statements in this news release may include,
without limitation, (i) estimates of future production and sales,
including production outlook, average future production, upside
potential and indicative production profiles; (ii) estimates of
future costs applicable to sales and all-in sustaining costs; (iii)
estimates of future capital expenditures, including development and
sustaining capital; (iv) estimates of future cost reductions, full
potential savings, value creation, improvements, synergies and
efficiencies; (v) expectations regarding the project pipeline,
including, without limitation, with respect to Tanami and
Musselwhite, and the development, growth and exploration potential
of the Company’s other operations, projects and investments,
including, without limitation, returns, IRR, schedule, decision
dates, mine life and mine life extensions, commercial start, first
production, average production, average costs, impacts of
improvement or expansion projects and upside potential; (vi)
expectations regarding future investments or divestitures; (vii)
expectations regarding free cash flow, and returns to stockholders,
including with respect to future dividends and future share
repurchases; (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 impact of the COVID-19
pandemic. 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. Uncertainties
relating to the impacts of COVID-19, include, without limitation,
general macroeconomic uncertainty and changing market conditions,
changing restrictions on the mining industry in the jurisdictions
in which we operate, the ability to operate following changing
governmental restrictions on travel and operations (including,
without limitation, the duration of restrictions, including access
to sites, ability to transport and ship doré, access to processing
and refinery facilities, impacts to international trade, impacts to
supply chain, including price, availability of goods, ability to
receive supplies and fuel, impacts to productivity and operations
in connection with decisions intended to protect the health and
safety of the workforce, their families and neighboring
communities), and the impact of additional waves of the pandemic or
increases of incidents of COVID-19 in the areas and countries in
which we operate. Investors are reminded that only the third
quarter has been declared by the Board of Directors at this time.
Dividends for the remainder of 2020 have not yet been approved or
declared by the Board of Directors, and an annualized dividend has
not been declared by the Board. Investors are cautioned that the
Company’s dividend framework is non-binding. Management’s
expectations with respect to future dividends are “forward-looking
statements” and non-binding. The declaration and payment of future
dividends remain at the discretion of the Board of Directors and
will be determined based on Newmont’s financial results, balance
sheet strength, cash and liquidity requirements, future prospects,
gold and commodity prices, and other factors deemed relevant by the
Board. The duration, scope and impact of COVID-19 presents
additional uncertainties with respect to future dividends and no
assurance is being provided that the Company will pay future
dividends at the current payment level. For a more detailed
discussion of risks and other factors that might impact future
looking statements, see the Company’s Annual Report on Form 10-K
for the year ended December 31, 2019 filed with the U.S. Securities
and Exchange Commission (the “SEC”), under the heading “Risk
Factors”, as well as the COVID-19 related “Risk Factor” in the
Quarterly Report on Form 10-Q for the year ended March 31, 2020,
filed with the SEC, available on the SEC website or
www.newmont.com. The Company does not undertake any obligation to
release publicly revisions to any “forward-looking statement,”
including, without limitation, outlook, to reflect events or
circumstances after the date of this news release, or to reflect
the occurrence of unanticipated events, except as may be required
under applicable securities laws. Investors should not assume that
any lack of update to a previously issued “forward-looking
statement” constitutes a reaffirmation of that statement. Continued
reliance on “forward-looking statements” is at investors’ own
risk.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201029005425/en/
Media Contact Courtney Boone
303.837.5159 courtney.boone@newmont.com
Investor Contact Eric Colby
303.837.5724 eric.colby@newmont.com
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