Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont
Goldcorp or the Company) today announced second quarter 2019
results, which includes the performance of Goldcorp operations from
the date of transaction close on April 18, 2019.
- Net income: Delivered GAAP net income from continuing
operations attributable to Newmont Goldcorp stockholders of $1
million or $0.00 per diluted share; delivered adjusted net income1
of $92 million or $0.12 per diluted share, down $0.14 compared to
the prior year quarter
- EBITDA: Generated $679 million in adjusted EBITDA2, an
increase of 25 percent from the prior year quarter
- Cash flow: Reported consolidated cash flow from
continuing operations of $301 million and free cash flow3 of $(79)
million
- Gold costs applicable to sales (CAS)4: Reported CAS of
$759 per ounce, in line with the prior year quarter
- Gold all-in sustaining costs (AISC)5: Reported AISC of
$1,016 per ounce, in line with the prior year quarter
- Attributable gold production: Produced 1.59 million
ounces of gold, an increase of 37 percent over the prior year
quarter
- Portfolio improvements: Announced strategic investments
in GT Gold, Prodigy Gold and Irving Resources to fund exploration
and development activities in Canada, Australia, and Japan,
respectively; divested Buffalo Valley and Trenton Canyon properties
in Nevada; closed transaction establishing the Nevada Gold Mines
joint venture, creating the largest global gold producing
complex
- Financial strength: Ended the quarter with $1.8 billion
cash on hand and net debt of $4.9 billion, supporting an
investment-grade credit profile; paid a one-time special dividend
of $0.88 per share; declared a second quarter dividend of $0.14 per
share
- Outlook: 2019 attributable production at 6.5 million
ounces, CAS at $735 per ounce and AISC at $975 per ounce
“Newmont Goldcorp delivered $679 million in adjusted EBITDA in
the second quarter of 2019 as the Goldcorp integration process is
well underway and on track to deliver an additional $365 million in
annual cash flow,” said Gary J. Goldberg, Chief Executive Officer.
“Our proven strategy is driving improvements across the newly
combined portfolio. Closing the Goldcorp acquisition, coupled with
the successful close of the Nevada Gold Mines joint venture, has
positioned Newmont Goldcorp as the world’s leading gold business
for decades to come.”
____________________________________
1 Non-GAAP measure. See end of this release for reconciliation
to Net income (loss) attributable to Newmont stockholders. 2
Non-GAAP measure. See end of this release for reconciliation to Net
income (loss) attributable to Newmont stockholders. 3 Non-GAAP
measure. See end of this release for reconciliation to Net cash
provided by operating activities. 4 Non-GAAP measure. See end of
this release for reconciliation to Costs applicable to sales. 5
Non-GAAP measure. See end of this release for reconciliation to
Costs applicable to sales.
Second Quarter 2019 Summary Results
Net income from continuing operations attributable to
Newmont stockholders for the quarter was $1 million or $0.00 per
diluted share, a decrease of $273 million from the prior year
quarter primarily due to integration costs associated with the
Newmont Goldcorp and Nevada joint venture transactions, costs
incurred while Peñasquito and Musselwhite mines were not
operational, higher interest expense, and a prior-year gain from
the sale of the Company’s royalty portfolio in June 2018, partially
offset by higher averaged realized gold prices.
Adjusted net income was $92 million or $0.12 per diluted
share, compared to $144 million or $0.26 per diluted share in the
prior year quarter. The adjustments to net income of $0.12 related
to integration and transaction costs associated with the Newmont
Goldcorp transaction and Nevada joint venture, an increase in the
fair value of investments, a gain on asset and investment sales,
and reclamation and remediation charges related to the Company’s
legacy sites.
Revenue rose 36 percent to $2,257 million for the quarter
primarily due to higher sales volumes from the Newmont Goldcorp
transaction.
Average realized price6 for gold was $1,317, an increase
of $25 per ounce over the prior year quarter; average realized
price for copper was $2.48, a decrease of $0.51 per pound over the
prior year quarter; average realized price for silver and lead were
$14.20 per ounce and $0.76 per pound, respectively.
Gold CAS increased 35 percent to $1,245 million for the
quarter. Gold CAS per ounce was in line with the prior year quarter
at $759 per ounce as higher ounces sold and lower stockpile and
leach pad inventory adjustments were offset by lower production at
Peñasquito as a result of the blockade, and increased costs at
other sites.
Gold AISC increased four percent to $1,016 per ounce for
the quarter on higher sustaining capital spend.
Attributable gold production7 rose 37 percent to 1.59
million ounces for the quarter primarily due to new production from
the acquired Goldcorp assets and higher grades at Merian and
Tanami, slightly offset by lower grades at KCGM and Boddington.
Attributable gold equivalent ounce (GEO) production from
other metals rose 68 percent to 111 thousand ounces primarily
due to new silver and lead production from Peñasquito, partially
offset by lower copper grades at Boddington. CAS from other
metals totaled $121 million for the quarter. CAS per GEO
increased 66 percent to $1,308 per ounce primarily due to higher
unit costs at Peñasquito as a result of the blockade and higher
stockpile and concentrate inventory adjustments at Boddington and
Phoenix. AISC per GEO increased 74 percent to $1,646 per
ounce on increased CAS.
Capital expenditures8 rose by 47 percent to $380 million,
primarily due to increased sustaining capital investments from the
acquired Goldcorp assets and higher spending for growth projects,
including Borden, Quecher Main, Yanacocha Sulfides, Tanami
Expansion 2, and the Ahafo Mill Expansion.
Consolidated operating cash flow from continuing
operations decreased 25 percent from the prior year quarter to
$301 million due to integration costs and costs incurred while the
Peñasquito and Musselwhite mines were not producing, partially
offset by new sales from the acquired Goldcorp assets. Operating
cash flow was also unfavorably impacted by timing of accounts
receivable collections at Peñasquito and Boddington. Free Cash
Flow also decreased to $(79) million for the quarter, primarily
due to higher development capital expenditures and lower operating
cash flow.
Balance sheet ended the quarter with $1.8 billion cash on
hand after returning dividends of approximately $590 million to
shareholders, and a leverage ratio of 1.5x net debt to pro forma
adjusted EBITDA9 after repaying $1.25 billion of Goldcorp debt at
transaction close.
_____________________________________________
6 Non-GAAP measure. See end of this release for reconciliation
to Sales. 7 Attributable gold production includes 75,000 ounces
from the Company’s equity method investment in Pueblo Viejo (40%) 8
Capital expenditures refers to Additions to property plant and mine
development from the Consolidated Statements of Cash Flows. 9
Non-GAAP measure. See end of this release for reconciliation.
Corporate update
Newmont Goldcorp transaction: On January 14, 2019,
Newmont Goldcorp Corporation (Newmont) entered into a definitive
agreement to acquire all outstanding common shares of Goldcorp Inc.
(Goldcorp). On April 18, 2019, Newmont closed its acquisition of
Goldcorp following receipt of all regulatory approvals and approval
by Newmont’s and Goldcorp’s shareholders of the resolutions at the
shareholder meetings on April 11 and April 4, 2019, respectively,
for total cash and non-cash consideration of $9,456 million in a
primarily stock transaction. As of the closing date, the combined
company is known as Newmont Goldcorp Corporation, continuing to be
traded on the New York Stock Exchange under the ticker NEM and
listed on the Toronto Stock Exchange under the ticker NGT.
Nevada joint venture: On July 1, 2019, Newmont Goldcorp
and Barrick Gold Corporation concluded the transaction establishing
Nevada Gold Mines LLC (Nevada Gold Mines or the Nevada joint
venture). Nevada Gold Mines, owned 38.5 percent by Newmont Goldcorp
and owned 61.5 percent and operated by Barrick, will rank as the
largest global gold producing complex. The Nevada joint venture
will be subject to the oversight and guidance of the Board of
Managers, with Newmont Goldcorp retaining two board seats and
Barrick three, and the board supported by technical, finance and
exploration advisory committees on which both companies have equal
representation. Newmont Goldcorp will proportionately consolidate
its ownership interest in Nevada Gold Mines and will report the
Company’s interest in the joint venture as a separate segment in
its consolidated financial statements beginning in the third
quarter of 2019.
Projects update
Newmont Goldcorp’s capital-efficient project pipeline supports
stable production with improving margins and mine life. Near-term
development capital projects are presented below. Funding for
Borden, Musselwhite Materials Handling, Quecher Main, and Ahafo
Mill Expansion projects has been approved and these projects are in
execution. Additional projects represent incremental improvements
to production and cost guidance. Internal rates of return (IRR) on
these projects are calculated at a $1,200 gold price.
- Quecher Main (South America) will
add oxide production at Yanacocha, leverage existing infrastructure
and enable potential future growth at Yanacocha. First production
was achieved in late 2018 with commercial production expected in
the fourth quarter of 2019. Quecher Main extends the life of the
Yanacocha operation to 2027 with average annual gold production of
approximately 200,000 ounces per year between 2020 and 2025 (100
percent basis). During the same period, incremental CAS is expected
to be between $750 and $850 per ounce and AISC between $900 and
$1,000 per ounce. Capital costs for the project are expected to be
between $250 and $300 million with expenditure of $95 to $105
million in 2019. The project IRR is expected to be greater than 10
percent.
- Ahafo Mill Expansion (Africa) is
designed to maximize resource value by improving production margins
and accelerating stockpile processing. The project also supports
profitable development of Ahafo’s highly prospective underground
resources. First production is expected in the third quarter 2019,
followed by commercial production in the fourth quarter of 2019.
The expansion is expected to increase average annual gold
production by between 75,000 and 100,000 ounces per year for the
first five years beginning in 2020. Capital costs for the project
are estimated between $140 and $180 million with expenditure of
approximately $35 to $45 million in 2019. The project has an IRR of
more than 20 percent.
The Ahafo Mill Expansion, together with the Company’s Subika
Underground mine, will improve Ahafo’s production to between
550,000 and 650,000 ounces per year for the first five full years
of production (2020 to 2024). During this period Ahafo’s CAS is
expected to be between $650 and $750 per ounce and AISC is expected
to be between $800 and $900 per ounce. This represents average
production improvement of between 200,000 and 300,000 ounces at CAS
improvement of between $150 and $250 per ounce and AISC improvement
of $250 to $350 per ounce, compared to 2016 actuals.
- Borden, North America (North
America) is a new underground mine expected to extend profitable
production at the Porcupine complex. The Company expects to reach
commercial production in the fourth quarter of 2019.
- Musselwhite Materials Handling
(North America) improves material movement from Musselwhite’s two
main zones below Lake Opapimiskan. An underground shaft will hoist
ore from the underground crushers, reducing haulage distances and
ventilation costs. The Company expects the project to be fully
operational in mid-2020 after development progress was impacted by
the conveyor fire at Musselwhite.
Outlook
Newmont Goldcorp’s 2019 outlook reflects a full-year of Newmont
operated assets and the Goldcorp assets from April 18, 2019. The
Company does not include development projects that have not yet
been funded or reached execution stage in the outlook below, which
represents upside to guidance. The Nevada outlook assumes a
full-year of production and costs for the Company’s owned and
operated Nevada assets as of June 30, 2019, prior to the close of
the Nevada Gold Mines joint venture on July 1.
Attributable gold production is expected to be 6.5
million ounces in 2019. Production is back-half weighted with the
completion of the Ahafo Mill Expansion in Africa, the Borden
project in Canada and reaching higher grades at Cerro Negro and
Peñasquito.
- North America production is expected to be 1.1 million ounces
in 2019. The outlook includes the impacts from the blockade at
Peñasquito, the conveyor fire at Musselwhite and the installation
of additional safety controls at Red Lake.
- South America production is expected to be 1.3 million ounces
in 2019 as Cerro Negro reaches higher grades from the Eureka and
Marina Norte zones in the second half, and productivity
improvements at Merian offset the transition to harder ore.
- Australia production is expected to be 1.5 million ounces in
2019 with higher grades, throughput and productivity gains at
Tanami, offset by lower mining rates at KCGM from geotechnical
constraints and the continuation of stripping at Boddington.
- Africa production is expected to be 1.1 million ounces in 2019
with a full year of production from Subika Underground, higher
grades from the Subika open pit and improved mill throughput in the
second half of the year with completion of the Ahafo Mill Expansion
project.
- Nevada production is expected to be 1.5 million ounces in 2019.
The outlook has been adjusted by approximately 70,000 ounces to
reflect the impact of geotechnical constraints and remediation work
at Gold Quarry.
Gold cost outlook – CAS is expected to be $735 per
ounce and AISC is expected to be $975 per ounce in 2019.
- North America CAS is expected to be $860 per ounce and AISC is
expected to be $1,115 per ounce in 2019. The outlook includes the
impacts from the blockade at Peñasquito, the conveyor fire at
Musselwhite and the installation of additional safety controls at
Red Lake.
- South America CAS is expected to be $630 per ounce and AISC is
expected to be $785 per ounce in 2019.
- Australia CAS is expected to be $775 per ounce in 2019 with
increased stripping at Boddington and the drawdown of lower grade
stockpiles at KCGM partially offset by higher production and lower
power costs at Tanami from switching to natural gas. AISC is
expected to be $940 per ounce in 2019.
- Africa CAS is expected to be $585 per ounce in 2019 with higher
grades from Subika Underground and Subika open pit and the Ahafo
Mill Expansion coming online. AISC is expected to be $770 per ounce
in 2019.
- Nevada CAS is expected to be $795 per ounce in 2019. AISC is
expected to be $990 per ounce and has been adjusted to reflect
higher sustaining capital from remediation work at Gold
Quarry.
Co-product GEOs – Attributable production is expected to
be 870,000 GEOs in 2019, which includes copper production from
Phoenix and Boddington, and silver, zinc, and lead production from
Peñasquito. CAS is expected to be $710 per GEO and AISC is expected
to be $995 per GEO in 2019.
Capital – Total consolidated capital is expected to be
$1,560 million for 2019. Development capital of $575 million in
2019 includes investments in the Borden and Musselwhite Materials
Handling projects in North America, Quecher Main in South America
Ahafo Mill Expansion in Africa, and Tanami Power Project in
Australia, and expenditures to advance studies for future projects.
Sustaining capital is expected to be $985 million for 2019 and
includes the Awonsu layback and investments to cover
infrastructure, equipment and ongoing mine development.
Consolidated expense outlook –The Company’s 2019
outlook for general & administrative costs is expected to be
$325 million, which includes a partial year of synergies from the
Goldcorp integration. Interest expense is expected to be $280
million and investment in exploration and advanced projects is
expected be $450 million in 2019. Guidance for depreciation and
amortization in 2019 is expected to be $2,050 million.
Assumptions and sensitivities – Newmont Goldcorp’s
outlook assumes $1,200 per ounce gold price, $16 per ounce silver
price, $2.50 per pound copper price, $1.05 per pound zinc price,
$0.90 per pound lead price, $0.75 USD/AUD exchange rate, $0.77
USD/CAD exchange rate, and $65 per barrel WTI oil price. For the
six-month period July 2019 to December 2019, and assuming a 35%
portfolio tax rate, a $100 per ounce increase in gold price would
deliver an expected $225 million improvement in attributable free
cash flow. Similarly, a $0.05 favorable change in the Australian or
Canadian dollar would deliver an expected $25 million and $20
million improvement in attributable free cash flow, respectively. A
$0.10 per pound change in zinc price would result in a $15 million
impact to attributable free cash flow. A $10 per barrel reduction
in the price of oil, a $1.00 per ounce increase in silver price, a
$0.10 per pound increase in lead price and a $0.25 per pound
increase in copper price would each deliver an expected $10 million
improvement in attributable free cash flow. These estimates exclude
current hedge programs; please refer to Newmont Goldcorp’s Form
10-Q, which was filed with the SEC on April 25, 2019 for further
information on hedging positions.
2019 Outlooka
2019 Outlook +/- 5% ConsolidatedProduction
AttributableProduction ConsolidatedCAS
ConsolidatedAll-in SustainingCostsb
ConsolidatedSustainingCapitalExpenditures
ConsolidatedDevelopmentCapitalExpenditures (Koz, GEO
Koz) (Koz, GEO Koz) ($/oz) ($/oz)
($M) ($M) North America
1,115
1,115
860
1,115
320
155
South America
1,345
1,295
630
785
120
210
Australia
1,460
1,460
775
940
185
60c
Africa
1,105
1,105
585
770
125
90
Nevada
1,515
1,515
795
990
230
15
Total Goldd
6,600
6,500
735
975
985
575
Total Co-products
870
870
710
995
2019 Consolidated Expense Outlooke ($M) +/-5% General &
Administrative
325
Interest Expense
280
Depreciation and Amortization
2,050
Advanced Projects & Exploration
450
Adjusted Tax Ratef
34%-39%
a2019 Outlook in the tables shown are considered
“forward-looking statements” and are based upon certain
assumptions; figures include the impact of the Newmont Goldcorp
transaction from April 18, 2019, but do not include the impact of
the Nevada Gold Mines joint venture. Nevada outlook assumes a
full-year of production and costs for Newmont Goldcorp’s owned and
operated Nevada assets as of June 30, 2019, prior to the close of
the Nevada Gold Mines joint venture. For example, 2019 Outlook
assumes $1,200/oz Au, $16/oz Ag, $2.50/lb Cu, $1.05/lb Zn, $0.90/lb
Pb, $0.75 USD/AUD exchange rate, $0.77 USD/CAD exchange rate and
$65/barrel WTI; AISC and CAS estimates do not include inflation,
for the remainder of the year. Production, CAS, AISC and capital
estimates exclude projects that have not yet been approved. The
potential impact on inventory valuation as a result of lower
prices, input costs, and project decisions are not included as part
of this Outlook. Such assumptions may prove to be incorrect and
actual results may differ from those anticipated, including
variation beyond a +/- 5% range. Amounts may not recalculate to
totals due to rounding. See cautionary note at the end of this news
release.
bAll-in sustaining costs or AISC as used in the Company’s
Outlook is a non-GAAP metric; see below for further information and
reconciliation to consolidated 2019 CAS outlook.
cIncludes finance lease payments related to the Tanami Power
Project paid over a 10 year term beginning in 2019.
dProduction outlook does not include equity production from
stakes in TMAC (28.5%) or La Zanja (46.9%) as of June 30, 2019.
eConsolidated expense outlook is adjusted to exclude
extraordinary items, such as certain tax valuation allowance
adjustments.
fAssuming average prices of $1,300 per ounce for gold, $16 per
ounce for silver, $2.75 per pound for copper, $0.90 per pound for
lead, and $1.05 per pound for zinc and achievement of current
production and sales volumes and cost estimates, we estimate our
consolidated adjusted effective tax rate related to continuing
operations for 2019 will be between 34-39%. This does not include
potential changes to the tax rate due to the formation of the
Nevada Gold Mines joint venture.
2019 Site Outlooka
ConsolidatedProduction AttributableProduction
ConsolidatedCAS ConsolidatedAll-in SustainingCostsb
ConsolidatedSustainingCapitalExpenditures
ConsolidatedDevelopmentCapitalExpenditures (Koz, GEO
Koz) (Koz, GEO Koz) ($/oz) ($/oz)
($M) ($M) CC&V
345
345
910
1,035
25
Éléonore
265
265
790
935
35
40
Red Lake
120
120
1,050
1,340
25
5
Peñasquito
165
165
820
1,095
175
Porcupine
225
225
750
910
20
60
Musselwhite
0
0
25
50
Other North America
10
Cerro Negro
345
345
615
775
45
25
Yanacochac
480
265
690
855
20
190
Merianc
520
390
585
710
55
Pueblo Viejo
295
Other South America
Boddington
685
685
920
1,045
70
Tanami
500
500
510
705
75
60d
Kalgoorliee
275
275
890
1,035
35
Other Australia
5
Ahafo
680
680
590
780
100
70
Akyem
420
420
585
735
25
5
Ahafo North
15
Other Africa
Nevada
1,515
1,515
795
990
230
15
Corporate/Other
5
45
Peñasquito - Co-products (GEO)f
665
665
625
955
Boddington - Co-product (GEO)
125
125
1,060
1,230
Phoenix - Co-product (GEO)
80
80
900
1,070
Peñasquito - Zinc (Mlbs)
245
245
Peñasquito - Lead (Mlbs)
180
180
Peñasquito - Silver (Moz)
25
25
Boddington - Copper (Mlbs)
60
60
Phoenix - Copper (Mlbs)
40
40
a2019 Outlook in the tables shown are considered
“forward-looking statements” and are based upon certain
assumptions; figures include the impact of the Newmont Goldcorp
transaction from April 18, 2019, but do not include the impact of
the Nevada Gold Mines joint venture. Nevada outlook assumes a
full-year of production and costs for Newmont Goldcorp’s owned and
operated Nevada assets as of June 30, 2019, prior to the close of
the Nevada Gold Mines joint venture. For example, 2019 Outlook
assumes $1,200/oz Au, $16/oz Ag, $2.50/lb Cu, $1.05/lb Zn, $0.90/lb
Pb, $0.75 USD/AUD exchange rate, $0.77 USD/CAD exchange rate and
$65/barrel WTI; AISC and CAS estimates do not include inflation,
for the remainder of the year. Production, CAS, AISC and capital
estimates exclude projects that have not yet been approved. The
potential impact on inventory valuation as a result of lower
prices, input costs, and project decisions are not included as part
of this Outlook. Such assumptions may prove to be incorrect and
actual results may differ from those anticipated, including
variation beyond a +/- 5% range. Amounts may not recalculate to
totals due to rounding. See cautionary note on at the end of this
news release.
bAll-in sustaining costs or AISC as used in the Company’s
Outlook is a non-GAAP metric; see below for further information and
reconciliation to consolidated 2019 CAS outlook.
cConsolidated production for Yanacocha and Merian is presented
on a total production basis for the mine site; attributable
production represents a 51.35% interest for Yanacocha and a 75%
interest for Merian.
dIncludes finance lease payments related to the Tanami Power
Project paid over a 10 year term beginning in 2019.
eBoth consolidated and attributable production are shown on a
pro-rata basis with a 50% ownership for Kalgoorlie.
f Gold equivalent ounces (GEO) 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 ($2.50/lb.), Silver
($16/oz.), Lead ($0.90/lb.), and Zinc ($1.05/lb.) pricing.1
Represents attributable gold from equity method investments. Income
and expenses of equity method investments are included in Equity
income (loss) of affiliates.
Three Months Ended June 30, Six Months Ended June
30,
Operating Results
2019
2018
% Change
2019
2018
% Change
Attributable Sales (koz)
Attributable gold ounces sold
1,539
1,147
34
%
2,774
2,378
17
%
Attributable gold equivalent ounces
sold
93
59
58
%
144
117
23
%
Average Realized Price ($/oz,
$/lb)
Average realized gold price
$
1,317
$
1,292
2
%
$
1,310
$
1,310
—
%
Average realized copper price
$
2.48
$
2.99
(17
)%
$
2.68
$
2.93
(9
)%
Average realized silver price
$
14.20
$
—
—
%
$
14.20
$
—
—
%
Average realized lead price
$
0.76
$
—
—
%
$
0.76
$
—
—
%
Average realized zinc price
$
—
$
—
—
%
$
—
$
—
—
%
Attributable Production (koz)
Nevada
365
366
—
%
758
785
(3
)%
North America
251
64
292
%
332
135
146
%
South America
260
141
84
%
445
285
56
%
Australia
359
391
(8
)%
699
757
(8
)%
Africa
277
200
39
%
508
409
24
%
Pueblo Viejo (40%)1
75
—
—
%
75
—
—
%
Total Gold
1,587
1,162
37
%
2,817
2,371
19
%
Nevada
18
15
20
%
35
32
9
%
North America
53
—
—
%
53
—
—
%
Australia
40
51
(22
)%
71
92
(23
)%
Total Gold Equivalent Ounces
111
66
68
%
159
124
28
%
CAS Consolidated ($/oz, $/GEO)
Nevada
$
803
$
828
(3
)%
$
785
$
805
(2
)%
North America
$
1,031
$
654
58
%
$
1,002
$
637
57
%
South America
$
651
$
711
(8
)%
$
618
$
747
(17
)%
Australia
$
724
$
710
2
%
$
740
$
709
4
%
Africa
$
602
$
762
(21
)%
$
598
$
754
(21
)%
Total Gold
$
759
$
751
1
%
$
733
$
750
(2
)%
Total Gold (by-product)
$
772
$
722
7
%
$
732
$
724
1
%
Nevada
$
871
924
(6
)%
$
810
$
896
(10
)%
North America
$
1,952
$
—
—
%
$
1,952
$
—
—
%
Australia
$
807
$
738
9
%
$
852
$
756
13
%
Total Gold Equivalent Ounces
$
1,308
$
786
66
%
$
1,146
$
796
44
%
AISC Consolidated ($/oz)
Nevada
$
1,002
$
1,047
(4
)%
$
976
$
989
(1
)%
North America
$
1,383
$
845
64
%
$
1,302
$
815
60
%
South America
$
827
$
885
(7
)%
$
780
$
906
(14
)%
Australia
$
890
$
842
6
%
$
894
$
845
6
%
Africa
$
810
$
902
(10
)%
$
794
$
889
(11
)%
Total Gold
$
1,016
$
978
4
%
$
967
$
961
1
%
Total Gold (by-product)
$
1,047
$
957
9
%
$
979
$
941
4
%
Nevada
$
1,037
$
1,189
(13
)%
$
959
$
1,088
(12
)%
North America
$
2,536
$
—
—
%
$
2,536
$
—
—
%
Australia
$
957
$
865
11
%
$
997
$
901
11
%
Total Gold Equivalent Ounces
$
1,646
$
948
74
%
$
1,413
$
954
48
%
1 Represents attributable gold from equity method investments.
Income and expenses of equity method investments are included in
Equity income (loss) of affiliates.
NEWMONT GOLDCORP
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited, in millions except
per share)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Sales
$
2,257
$
1,662
$
4,060
$
3,479
Costs and expenses
Costs applicable to sales (1)
1,366
965
2,344
1,994
Depreciation and amortization
487
279
799
580
Reclamation and remediation
73
37
103
65
Exploration
69
54
110
94
Advanced projects, research and
development
32
36
59
70
General and administrative
81
63
140
122
Other expense, net
137
13
205
24
2,245
1,447
3,760
2,949
Other income (expense):
Other income, net
90
139
135
160
Interest expense, net of capitalized
interest
(82
)
(49
)
(140
)
(102
)
8
90
(5
)
58
Income (loss) before income and mining tax
and other items
20
305
295
588
Income and mining tax benefit
(expense)
(20
)
(18
)
(145
)
(123
)
Equity income (loss) of affiliates
26
(7
)
21
(16
)
Net income (loss) from continuing
operations
26
280
171
449
Net income (loss) from discontinued
operations
(26
)
18
(52
)
40
Net income (loss)
-
298
119
489
Net loss (income) attributable to
noncontrolling interests
(25
)
(6
)
(57
)
(5
)
Net income (loss) attributable to Newmont
stockholders
$
(25
)
$
292
$
62
$
484
Net income (loss) attributable to Newmont
stockholders:
Continuing operations
$
1
$
274
$
114
$
444
Discontinued operations
(26
)
18
(52
)
40
$
(25
)
$
292
$
62
$
484
Net income (loss) per common share
Basic:
Continuing operations
$
—
$
0.52
$
0.18
$
0.84
Discontinued operations
(0.03
)
0.03
(0.08
)
0.07
$
(0.03
)
$
0.55
$
0.10
$
0.91
Diluted:
Continuing operations
$
—
$
0.51
$
0.18
$
0.83
Discontinued operations
(0.03
)
0.03
(0.08
)
0.07
$
(0.03
)
$
0.54
$
0.10
$
0.90
- Excludes Depreciation and amortization and Reclamation and
remediation.
NEWMONT GOLDCORP
CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited, in
millions)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Operating activities:
Net income (loss)
$
—
$
298
$
119
$
489
Adjustments:
Depreciation and amortization
487
279
799
580
Stock-based compensation
35
19
54
38
Reclamation and remediation
68
35
95
61
Loss (income) from discontinued
operations
26
(18
)
52
(40
)
Deferred income taxes
(34
)
(29
)
(13
)
(19
)
Gain on asset and investment sales, net
(Note 8)
(32
)
(100
)
(33
)
(99
)
Write-downs of inventory and stockpiles
and ore on leach pads
60
76
104
158
Other operating adjustments
(40
)
-
(43
)
9
Net change in operating assets and
liabilities
(269
)
(159
)
(259
)
(510
)
Net cash provided by (used in) operating
activities of continuing operations
301
401
875
667
Net cash provided by (used in) operating
activities of discontinued operations (1)
(2
)
(2
)
(5
)
(5
)
Net cash provided by (used in) operating
activities
299
399
870
662
Investing activities:
Additions to property, plant and mine
development
(380
)
(258
)
(605
)
(489
)
Acquisitions, net (1)
121
(39
)
121
(39
)
Purchases of investments
(33
)
—
(86
)
(6
)
Return of investment from an equity method
investee
82
—
80
(3
)
Proceeds from sales of investments
53
14
56
15
Proceeds from sales of other assets
27
2
29
5
Other
26
—
26
—
Net cash provided by (used in) investing
activities
(104
)
(281
)
(379
)
(517
)
Financing activities:
Repayment of debt
(1,250
)
—
(1,250
)
—
Dividends paid to common stockholders
(590
)
(74
)
(666
)
(150
)
Distributions to noncontrolling
interests
(49
)
(38
)
(93
)
(69
)
Funding from noncontrolling interests
20
20
46
52
Payments for withholding of employee taxes
related to stock-based compensation
(6
)
—
(45
)
(39
)
Payments on lease and other financing
obligations
(16
)
(2
)
(26
)
(3
)
Proceeds from sale of noncontrolling
interests
—
48
—
48
Repurchases of common stock
—
(6
)
—
(70
)
Other
(2
)
—
(2
)
—
Net cash provided by (used in) financing
activities
(1,893
)
(52
)
(2,036
)
(231
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
1
(2
)
(2
)
(2
)
Net change in cash, cash equivalents and
restricted cash
(1,697
)
64
(1,547
)
(88
)
Cash, cash equivalents and restricted cash
at beginning of period
3,639
3,146
3,489
3,298
Cash, cash equivalents and restricted cash
at end of period
$
1,942
$
3,210
$
1,942
$
3,210
Reconciliation of cash, cash equivalents
and restricted cash:
Cash and cash equivalents
$
1,827
$
3,127
$
1,827
$
3,127
Restricted cash included in Other current
assets
30
1
30
1
Restricted cash included in Other
noncurrent assets
85
82
85
82
Total cash, cash equivalents and
restricted cash
$
1,942
$
3,210
$
1,942
$
3,210
- Acquisitions, net is comprised of $138 in cash and cash
equivalents acquired in the Newmont Goldcorp transaction net of $17
in cash paid to Goldcorp shareholders as part of the purchase
consideration.
NEWMONT GOLDCORP
CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited, in
millions)
At June 30,
At December 31,
2019
2018
ASSETS
Cash and cash equivalents
$
1,827
$
3,397
Trade receivables
330
254
Investments
24
48
Inventories
1,147
630
Stockpiles and ore on leach pads
772
697
Other current assets
538
251
Current assets
4,638
5,277
Property, plant and mine development,
net
23,377
12,258
Investments
3,710
271
Stockpiles and ore on leach pads
1,838
1,866
Deferred income tax assets
525
401
Goodwill
2,156
58
Other non-current assets
743
584
Total assets
$
36,987
$
20,715
LIABILITIES
Accounts payable
$
460
$
303
Employee-related benefits
342
305
Income and mining taxes payable
122
71
Debt
626
626
Lease and other financing obligations
89
27
Other current liabilities
899
455
Current liabilities
2,538
1,787
Debt
5,475
3,418
Lease and other financing obligations
582
190
Reclamation and remediation
liabilities
3,170
2,481
Deferred income tax liabilities
2,458
612
Employee-related benefits
432
401
Streaming agreement
974
—
Other non-current liabilities
985
314
Total liabilities
16,614
9,203
Contingently redeemable noncontrolling
interest
48
47
EQUITY
Common stock
1,317
855
Treasury stock
(115
)
(70
)
Additional paid-in capital
18,434
9,618
Accumulated other comprehensive income
(loss)
(257
)
(284
)
Retained earnings
(25
)
383
Newmont stockholders' equity
19,354
10,502
Noncontrolling interests
971
963
Total equity
20,325
11,465
Total liabilities and equity
$
36,987
$
20,715
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
U.S. generally accepted accounting principles (“GAAP”). These
measures should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with GAAP.
Unless otherwise noted, we present the Non-GAAP financial measures
of our continuing operations in the tables below.
Adjusted net income (loss)
Management uses Adjusted net income (loss) to evaluate the
Company’s operating performance and for planning and forecasting
future business operations. The Company believes the use of
Adjusted net income (loss) allows investors and analysts to
understand the results of the continuing operations of the Company
and its direct and indirect subsidiaries relating to the sale of
products, by excluding certain items that have a disproportionate
impact on our results for a particular period. Adjustments to
continuing operations are presented before tax and net of our
partners’ noncontrolling interests, when applicable. The tax effect
of adjustments is presented in the Tax effect of adjustments line
and is calculated using the applicable regional tax rate.
Management’s determination of the components of Adjusted net income
(loss) are evaluated periodically and based, in part, on a review
of non-GAAP financial measures used by mining industry analysts.
Net income (loss) attributable to Newmont stockholders is
reconciled to Adjusted net income (loss) as follows:
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Net income (loss) attributable to Newmont
stockholders
$
(25
)
$
292
$
62
$
484
Net loss (income) attributable to Newmont
stockholders from discontinued operations (1)
26
(18
)
52
(40
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
1
274
114
444
Goldcorp transaction and integration costs
(2)
114
—
159
—
Change in fair value of investments
(3)
(35
)
(5
)
(56
)
(5
)
Reclamation and remediation charges, net
(4)
32
8
32
8
Loss (gain) on asset and investment sales,
net (5)
(30
)
(99
)
(31
)
(99
)
Nevada JV transaction and integration
costs (6)
11
—
23
—
Impairment of long-lived assets (7)
—
—
1
—
Restructuring and other, net (8)
—
7
5
12
Impairment of investments (9)
—
—
1
—
Tax effect of adjustments (10)
(5
)
18
(13
)
16
Valuation allowance and other tax
adjustments (11)
4
(59
)
33
(47
)
Adjusted net income (loss)
$
92
$
144
$
268
$
329
Net income (loss) per share, basic
(12)
$
(0.03
)
$
0.55
$
0.10
$
0.91
Net loss (income) attributable to Newmont
stockholders from discontinued operations
0.03
(0.03
)
0.08
(0.07
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
—
0.52
0.18
0.84
Goldcorp transaction and integration
costs
0.14
—
0.24
—
Change in fair value of investments
(0.05
)
(0.01
)
(0.09
)
(0.01
)
Reclamation and remediation charges,
net
0.04
0.01
0.05
0.01
Loss (gain) on asset and investment sales,
net
(0.04
)
(0.18
)
(0.05
)
(0.18
)
Nevada JV transaction and integration
costs
0.02
—
0.05
—
Impairment of long-lived assets
—
—
—
—
Restructuring and other, net
—
0.01
—
0.02
Impairment of investments
—
—
—
—
Tax effect of adjustments
—
0.03
(0.02
)
0.03
Valuation allowance and other tax
adjustments
0.01
(0.11
)
0.05
(0.09
)
Adjusted net income (loss) per share,
basic
$
0.12
$
0.27
$
0.41
$
0.62
Net income (loss) per share, diluted
(12)
$
(0.03
)
$
0.54
$
0.10
$
0.90
Net loss (income) attributable to Newmont
stockholders from discontinued operations
0.03
(0.03
)
0.08
(0.07
)
Net income (loss) attributable to Newmont
stockholders from continuing operations
—
0.51
0.18
0.83
Goldcorp transaction and integration
costs
0.14
—
0.24
—
Change in fair value of investments
(0.05
)
(0.01
)
(0.09
)
(0.01
)
Reclamation and remediation charges,
net
0.04
0.01
0.05
0.01
Loss (gain) on asset and investment sales,
net
(0.04
)
(0.18
)
(0.05
)
(0.18
)
Nevada JV transaction and integration
costs
0.02
—
0.05
—
Impairment of long-lived assets
—
—
—
—
Restructuring and other, net
—
0.01
—
0.02
Impairment of investments
—
—
—
—
Tax effect of adjustments
—
0.03
(0.02
)
0.03
Valuation allowance and other tax
adjustments
0.01
(0.11
)
0.05
(0.09
)
Adjusted net income (loss) per share,
diluted
$
0.12
$
0.26
$
0.41
$
0.61
Weighted average common shares
(millions):
Basic
766
533
651
534
Diluted (12)
768
535
652
535
- Net loss (income) attributable to Newmont stockholders from
discontinued operations relates to (i) adjustments in our Holt
royalty obligation, presented net of tax expense (benefit) of $-,
$5, $- and $9, respectively, and (ii) adjustments to our Batu Hijau
Contingent Consideration, presented net of tax expense (benefit) of
$-, $-, $- and $1 respectively. For additional information
regarding our discontinued operations, see Note 11 to our Condensed
Consolidated Financial Statements.
- Goldcorp transaction and integration costs, included in Other
expense, net, represents costs incurred related to the Newmont
Goldcorp transaction during 2019.
- Change in fair value of marketable equity securities, included
in Other income, net, primarily represents unrealized holding gains
and losses on marketable equity securities and our investment
instruments in Continental Gold Inc. For additional information
regarding our investment in Continental, see Note 18 to our
Condensed Consolidated Financial Statements.
- Reclamation and remediation charges, included in Reclamation
and remediation, represent revisions to remediation plans at the
Company’s former historic mining operations. The 2019 charges
include adjustments related to a review of the project cost
estimates at the Dawn remediation site, as well as increased water
management costs at the Con Mine.
- Loss (gain) on asset and investment sales, included in Other
income, net, primarily represents a gain on the sale of exploration
property in North America in 2019 and a gain from the exchange of
certain royalty interests for cash consideration and an equity
ownership and warrants in Maverix in 2018. Amounts are presented
net of income (loss) attributable to noncontrolling interest of $2,
$1, $2 and $-, respectively.
- 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.
- Impairment of long-lived assets, included in Other expense,
net, represents non-cash write-downs of long-lived assets.
- Restructuring and other, included in Other expense, net,
primarily represents certain costs associated with severance, legal
and other settlements. Amounts are presented net of income (loss)
attributable to noncontrolling interests of $-, $(2), $- and $(3),
respectively.
- Impairment of investments, included in Other income, net,
represents other-than-temporary impairments of other
investments.
- The tax effect of adjustments, included in Income and mining
tax benefit (expense), represents the tax effect of adjustments in
footnotes (2) through (9), as described above, and are calculated
using the applicable regional tax rate.
- 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 and disallowed foreign losses. The adjustment in the three
and six months ended June 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 $(5)
and $25 respectively, and other tax adjustments of $7 and $7,
respectively. The adjustment in the three and six months ended June
30, 2018 is due to a second quarter reduction to the provisional
expense for the Tax Cuts and Jobs Act of $(45), a second quarter
release of valuation allowance on capital losses of $(15),
increases to net operating losses and other deferred tax assets at
Yanacocha of $- and $11, respectively, and other tax adjustments of
$1 and $7, respectively. Amounts are presented net of income (loss)
attributable to noncontrolling interests of $2, $-, $1 and $(5),
respectively.
- Per share measures may not recalculate due to rounding.
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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Net income (loss) attributable to Newmont
stockholders
$
(25
)
$
292
$
62
$
484
Net income (loss) attributable to
noncontrolling interests
25
6
57
5
Net loss (income) from discontinued
operations (1)
26
(18
)
52
(40
)
Equity loss (income) of affiliates
(26
)
7
(21
)
16
Income and mining tax expense
(benefit)
20
18
145
123
Depreciation and amortization
487
279
799
580
Interest expense, net
82
49
140
102
EBITDA
$
589
$
633
$
1,234
$
1,270
Adjustments:
Goldcorp transaction and integration costs
(2)
$
114
$
—
$
159
$
—
Change in fair value of investments
(3)
(35
)
(5
)
(56
)
(5
)
Loss (gain) on asset and investment sales
(4)
(32
)
(100
)
(33
)
(99
)
Reclamation and remediation charges
(5)
32
8
32
8
Nevada JV transaction and integration
costs (6)
11
—
23
—
Impairment of long-lived assets (7)
—
—
1
—
Restructuring and other (8)
—
9
5
15
Impairment of investments (9)
—
—
1
—
Adjusted EBITDA
$
679
$
545
$
1,366
$
1,189
- Net loss (income) from discontinued operations relates to (i)
adjustments in our Holt royalty obligation, presented net of tax
expense (benefit) of $-, $5, $- and $9, respectively, and (ii)
adjustments to our Batu Hijau Contingent Consideration, presented
net of tax expense (benefit) of $-, $-, $-, and $1, respectively.
For additional information regarding our discontinued operations,
see Note 11 to our Condensed Consolidated Financial
Statements.
- Goldcorp transaction and integration costs, included in Other
expense, net, primarily represents costs incurred related to the
Newmont Goldcorp transaction during 2019.
- Change in fair value of marketable equity securities, included
in Other income, net, primarily represents unrealized holding gains
and losses on marketable equity securities and our investment
instruments in Continental Gold Inc. For additional information
regarding our investment in Continental, see Note 18 to our
Condensed Consolidated Financial Statements.
- Loss (gain) on asset and investment sales, included in Other
income, net, primarily represents a gain on the sale of exploration
land in 2019 and a gain from the exchange of certain royalty
interests for cash consideration and an equity ownership and
warrants in Maverix in 2018.
- Reclamation and remediation charges, included in Reclamation
and remediation, represent revisions to remediation plans at the
Company’s former historic mining operations
- 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.
- Impairment of long-lived assets, included in Other expense,
net, represents non-cash write-downs of long-lived assets.
- Restructuring and other, included in Other expense, net,
represents certain costs associated with severance, legal and other
settlements.
- Impairment of investments, included in Other income, net,
represents other-than-temporary impairments of other
investments.
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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Net cash provided by (used in) operating
activities
$
299
$
399
$
870
$
662
Less: Net cash used in (provided by)
operating activities of discontinued operations
2
2
5
5
Net cash provided by (used in) operating
activities of continuing operations
301
401
875
667
Less: Additions to property, plant and
mine development
(380
)
(258
)
(605
)
(489
)
Free Cash Flow
$
(79
)
$
143
$
270
$
178
Net cash provided by (used in) investing
activities (1)
$
(104
)
$
(281
)
$
(379
)
$
(517
)
Net cash provided by (used in) financing
activities
$
(1,893
)
$
(52
)
$
(2,036
)
$
(231
)
- 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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Costs applicable to sales (1)
$
1,245
$
919
$
2,180
$
1,901
Gold sold (thousand ounces)
1,636
1,224
2,974
2,536
Costs applicable to sales per ounce
(2)
$
759
$
751
$
733
$
750
- Includes by-product credits of $21 and $29 during the three and
six months ended June 30, 2019, respectively, and $18 and $31
during the three and six months ended June 30, 2018,
respectively.
- Per ounce measures may not recalculate due to rounding.
Costs applicable to sales per gold equivalent ounce
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Costs applicable to sales (1)
$
121
$
46
$
164
$
93
Gold equivalent ounces - other metals
(thousand ounces) (2)
93
59
144
117
Costs applicable to sales per ounce
(3)
$
1,308
$
786
$
1,146
$
796
- Includes by-product credits of $2 and $2 during the three and
six months ended June 30, 2019, respectively, and $1 and $2 during
the three and six months ended June 30, 2018, respectively.
- Gold equivalent ounces is calculated as pounds or ounces
produced multiplied by the ratio of the other metals price to the
gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($15/oz.), Lead ($0.90/lb.) and Zinc ($1.05/lb.) pricing for 2019
and Gold ($1,250/oz.) and Copper ($2.70/lb.) pricing for 2018.
- 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)
capital 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
Phoenix, Peñasquito and Boddington 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 Phoenix, Peñasquito and Boddington
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 Phoenix,
Peñasquito and Boddington 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 Phoenix, Peñasquito and Boddington mines.
General and administrative. Includes costs related to
administrative tasks not directly related to current production,
but rather related to support our corporate structure and fulfill
our obligations to operate as a public company. Including these
expenses in the AISC metric provides visibility of the impact that
general and administrative activities have on current operations
and profitability on a per ounce basis.
Other expense, net. We exclude certain exceptional or unusual
expenses from Other expense, net, such as restructuring, as these
are not indicative to sustaining our current operations.
Furthermore, this adjustment to Other expense, net is also
consistent with the nature of the adjustments made to Net income
(loss) attributable to Newmont stockholders as disclosed in the
Company’s non-GAAP financial measure Adjusted net income (loss).
The allocation of these costs to gold and other metals is
determined using the same allocation used in the allocation of CAS
between gold and other metals at the Phoenix, Peñasquito and
Boddington 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 Phoenix, Peñasquito and Boddington
mines.
Sustaining capital and finance lease payments. We determined
sustaining capital and finance lease payments as those capital
expenditures and finance lease payments that are necessary to
maintain current production and execute the current mine plan.
Sustaining finance lease payments are included beginning in 2019 in
connection with the adoption of ASC 842. Refer to Note 2 in the
Condensed Consolidated Financial Statements for further details. We
determined development (i.e. non-sustaining) capital expenditures
and finance lease payments to be those payments used to develop new
operations or related to projects at existing operations where
those projects will materially benefit the operation. The
classification of sustaining and development capital projects and
finance leases is based on a systematic review of our project
portfolio in light of the nature of each project. Sustaining
capital and finance lease payments are relevant to the AISC metric
as these are needed to maintain the Company’s current operations
and provide improved transparency related to our ability to finance
these expenditures from current operations. The allocation of these
costs to gold and other metals is determined using the same
allocation used in the allocation of CAS between gold and other
metals at the Phoenix, Peñasquito and Boddington mines.
Advanced
Projects,
Research and
Treatment
Sustaining
All-In
Costs
Development
General
Other
and
Capital and
All-In
Sustaining
Three Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Lease Related
Sustaining
Ounces (000)
Costs per
June 30, 2019
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Costs (7)(8)
Costs
Sold
oz. (9)
Gold
Carlin
$
166
$
1
$
5
$
1
$
—
$
—
$
35
$
208
183
$
1,138
Phoenix
53
2
—
1
—
3
5
64
53
1,211
Twin Creeks
59
—
1
1
—
—
11
72
85
850
Long Canyon
15
—
—
1
—
—
2
18
44
402
Other Nevada
—
—
—
—
—
—
3
3
—
—
Nevada
293
3
6
4
—
3
56
365
365
1,002
CC&V
77
2
2
—
1
—
12
94
82
1,144
Red Lake
43
—
3
—
—
—
14
60
37
1,621
Musselwhite
12
—
3
—
—
—
4
19
6
3,307
Porcupine
63
1
2
—
—
—
10
76
59
1,288
Éléonore
75
—
2
—
—
1
12
90
84
1,073
Peñasquito
27
—
—
—
—
—
7
34
19
1,775
Other North America
—
—
1
20
—
—
3
24
—
—
North America
297
3
13
20
1
1
62
397
287
1,383
Yanacocha
100
14
2
—
5
—
8
129
135
955
Merian
71
1
1
1
—
—
12
86
124
696
Cerro Negro
63
1
2
—
1
—
13
80
100
802
Other South America
—
—
—
2
—
—
—
2
—
—
South America
234
16
5
3
6
—
33
297
359
827
Boddington
139
3
—
—
—
3
15
160
175
915
Tanami
65
1
1
—
—
—
21
88
118
744
Kalgoorlie
50
1
—
—
—
—
6
57
55
1,035
Other Australia
—
—
1
2
—
—
2
5
—
—
Australia
254
5
2
2
—
3
44
310
348
890
Ahafo
97
1
6
—
1
—
30
135
158
850
Akyem
70
9
1
—
1
—
7
88
119
734
Other Africa
—
—
—
2
—
—
—
2
—
—
Africa
167
10
7
2
2
—
37
225
277
810
Corporate and Other
—
—
15
50
3
—
—
68
—
—
Total Gold
$
1,245
$
37
$
48
$
81
$
12
$
7
$
232
$
1,662
1,636
$
1,016
Gold equivalent ounces - other metals
(10)
Phoenix
$
15
$
2
$
—
$
—
$
—
$
1
$
1
$
19
18
$
1,037
Peñasquito
77
—
1
—
—
3
20
101
40
2,536
Boddington
29
2
—
—
—
1
2
34
35
957
Total Gold Equivalent Ounces
$
121
$
4
$
1
$
—
$
—
$
5
$
23
$
154
93
$
1,646
Consolidated
$
1,366
$
41
$
49
$
81
$
12
$
12
$
255
$
1,816
- Excludes Depreciation and amortization and Reclamation and
remediation.
- Includes by-product credits of $23 and excludes co-product
revenues of $103.
- Includes stockpile and leach pad inventory adjustments of $15
at Carlin, $7 at CC&V, $3 at Yanacocha, $12 at Boddington and
$15 at Akyem.
- Reclamation costs include operating accretion and amortization
of asset retirement costs of $22 and $19, respectively, and exclude
non-operating accretion and reclamation and remediation adjustments
of $14 and $37, respectively.
- Advanced projects, research and development and Exploration
excludes development expenditures of $2 at Carlin, $1 at Phoenix,
$2 at Twin Creeks, $7 at Long Canyon, $2 at Other Nevada, $2 at
CC&V, $4 at Yanacocha, $1 at Merian, $2 at Cerro Negro, $11 at
Other South America, $1 at Kalgoorlie, $4 at Other Australia, $5 at
Ahafo, $4 at Akyem, $2 at Other Africa and $2 at Corporate and
Other, totaling $52 related to developing new operations or major
projects at existing operations where these projects will
materially benefit the operation.
- Other expense, net is adjusted for Newmont Goldcorp transaction
and integration costs of $114 and Nevada JV transaction
implementation costs of $11.
- Includes sustaining capital expenditures of $56 for Nevada, $72
for North America, $33 for South America, $45 for Australia, $36
for Africa and $0 for Corporate and Other, totaling $242 and
excludes development capital expenditures, capitalized interest and
the increase in accrued capital totaling $138. The following are
major development projects: Borden, Musselwhite Materials Handling,
Turquoise Ridge joint venture 3rd shaft, Quecher Main, Yanacocha
Sulfides projects, Tanami Expansion 2, Ahafo North and Ahafo Mill
Expansion.
- Includes finance lease payments for sustaining projects of $13
and excludes finance lease payments for development projects of
$13.
- Per ounce measures may not recalculate due to rounding.
- Gold equivalent ounces is calculated as pounds or ounces
produced multiplied by the ratio of the other metals price to the
gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($15/oz.), Lead ($0.90/lb.), and Zinc ($1.05/lb.) pricing.
Advanced
Projects,
Research and
Treatment
All-In
Costs
Development
General
Other
and
All-In
Sustaining
Three Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Sustaining
Sustaining
Ounces (000)
Costs per
June 30, 2018
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Capital (7)
Costs
Sold
oz. (8)
Gold
Carlin
$
178
$
2
$
5
$
1
$
—
$
—
$
42
$
228
187
$
1,216
Phoenix
44
—
1
—
—
2
9
56
53
1,057
Twin Creeks
66
—
2
1
—
—
6
75
86
865
Long Canyon
18
—
—
—
—
—
3
21
43
496
Other Nevada
—
—
4
1
1
—
2
8
—
—
Nevada
306
2
12
3
1
2
62
388
369
1,047
CC&V
42
3
—
1
1
—
9
56
67
845
Other North America
—
—
—
—
—
—
—
—
—
—
North America
42
3
—
1
1
—
9
56
67
845
Yanacocha
92
9
—
—
2
—
5
108
113
974
Merian
61
1
1
—
—
—
18
81
102
801
Other South America
—
—
—
3
—
—
—
3
—
—
South America
153
10
1
3
2
—
23
192
215
885
Boddington
130
4
—
—
—
5
7
146
177
826
Tanami
74
—
4
—
—
—
17
95
103
936
Kalgoorlie
62
1
1
—
—
—
5
69
93
736
Other Australia
—
2
—
3
(2)
—
—
3
—
—
Australia
266
7
5
3
(2)
5
29
313
373
842
Ahafo
90
1
—
1
1
—
6
99
101
990
Akyem
62
6
1
—
—
—
10
79
99
794
Other Africa
—
—
—
1
—
—
—
1
—
—
Africa
152
7
1
2
1
—
16
179
200
902
Corporate and Other
—
—
15
51
1
—
2
69
—
—
Total Gold
$
919
$
29
$
34
$
63
$
4
$
7
$
141
$
1,197
1,224
$
978
Gold equivalent ounces - other metals
(9)
Phoenix
$
14
$
1
$
—
$
—
$
—
$
1
$
2
$
18
15
$
1,189
Boddington
32
—
—
—
—
2
3
37
44
865
Total Gold Equivalent Ounces
$
46
$
1
$
—
$
—
$
—
$
3
$
5
$
55
59
$
948
Consolidated
$
965
$
30
$
34
$
63
$
4
$
10
$
146
$
1,252
- Excludes Depreciation and amortization and Reclamation and
remediation.
- Includes by-product credits of $19 and excludes co-product
revenues of $81.
- Includes stockpile and leach pad inventory adjustments of $25
at Carlin, $14 at Twin Creeks, $1 at Yanacocha, $18 at Ahafo and
$15 at Akyem.
- Reclamation costs include operating accretion and amortization
of asset retirement costs of $15 and $15, respectively, and exclude
non-operating accretion and reclamation and remediation adjustments
of $11 and $11, respectively.
- Advanced projects, research and development and Exploration
excludes development expenditures of $3 at Carlin, $1 at Twin
Creeks, $6 at Long Canyon, $5 at Other Nevada, $1 at CC&V, $12
at Yanacocha, $5 at Merian, $8 at Other South America, $2 at
Kalgoorlie, $2 at Other Australia, $4 at Ahafo, $3 at Akyem, $1 at
Other Africa and $3 at Corporate and Other, totaling $56 related to
developing new operations or major projects at existing operations
where these projects will materially benefit the operation.
- Other expense, net is adjusted for restructuring and other
costs of $9.
- Excludes development capital expenditures, capitalized interest
and the increase in accrued capital totaling $112. The following
are major development projects: Twin Creeks Underground, Quecher
Main, the Merian crusher, Tanami Expansion 2, Subika Underground
and Ahafo Mill Expansion.
- Per ounce measures may not recalculate due to rounding.
- Gold equivalent ounces is calculated as pounds or ounces
produced multiplied by the ratio of the other metals price to the
gold price, using Gold ($1,250/oz.) and Copper ($2.70/lb.)
pricing.
Advanced
Projects,
Research and
Treatment
Sustaining
All-In
Costs
Development
General
Other
and
Capital and
All-In
Sustaining
Six Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Finance Lease
Sustaining
Ounces (000)
Costs per
June 30, 2019
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Payments (7)(8)
Costs
Sold
oz. (9)
Gold
Carlin
$
350
$
3
$
9
$
3
$
1
$
—
$
64
$
430
397
$
1,082
Phoenix
101
3
—
1
—
5
10
120
105
1,144
Twin Creeks
110
1
3
1
—
—
23
138
162
855
Long Canyon
35
1
—
1
—
—
7
44
95
463
Other Nevada
—
—
5
—
—
—
4
9
—
—
Nevada
596
8
17
6
1
5
108
741
759
976
CC&V
143
3
4
1
2
—
15
168
157
1,071
Red Lake
43
—
3
—
—
—
14
60
37
1,621
Musselwhite
12
—
3
—
—
—
4
19
6
3,307
Porcupine
63
1
2
—
—
—
10
76
59
1,288
Éléonore
75
—
2
—
—
1
12
90
84
1,073
Peñasquito
27
—
—
—
—
—
7
34
19
1,775
Other North America
—
—
1
20
—
—
3
24
—
—
North America
363
4
15
21
2
1
65
471
362
1,302
Yanacocha
193
30
3
—
7
—
14
247
273
903
Merian
142
2
2
1
—
—
23
170
270
631
Cerro Negro
63
1
2
—
1
—
13
80
100
802
Other South America
—
—
—
5
—
—
—
5
—
—
South America
398
33
7
6
8
—
50
502
643
780
Boddington
285
6
—
—
—
7
26
324
344
944
Tanami
134
2
3
—
—
—
38
177
249
710
Kalgoorlie
100
1
—
—
—
—
15
116
109
1,056
Other Australia
—
—
1
5
1
—
3
10
—
—
Australia
519
9
4
5
1
7
82
627
702
894
Ahafo
183
2
9
—
1
—
48
243
294
824
Akyem
121
17
3
—
1
—
15
157
214
731
Other Africa
—
—
—
4
—
—
—
4
—
—
Africa
304
19
12
4
2
—
63
404
508
794
Corporate and Other
—
—
28
98
3
—
1
130
—
—
Total Gold
$
2,180
$
73
$
83
$
140
$
17
$
13
$
369
$
2,875
2,974
$
967
Gold equivalent ounces - other metals
(10)
Phoenix
$
28
$
2
$
—
$
—
$
—
$
1
$
3
$
34
35
$
959
Peñasquito
77
—
1
—
—
3
20
101
40
2,536
Boddington
59
2
—
—
—
3
5
69
69
997
Total Gold Equivalent Ounces
$
164
$
4
$
1
$
—
$
—
$
7
$
28
$
204
144
$
1,413
Consolidated
$
2,344
$
77
$
84
$
140
$
17
$
20
$
397
$
3,079
- Excludes Depreciation and amortization and Reclamation and
remediation.
- Includes by-product credits of $31 and excludes co-product
revenues of $167.
- Includes stockpile and leach pad inventory adjustments of $33
at Carlin, $2 at Twin Creeks, $10 at CC&V, $10 at Yanacocha,
$19 at Boddington and $20 at Akyem.
- Reclamation costs include operating accretion and amortization
of asset retirement costs of $38 and $39, respectively, and exclude
non-operating accretion and reclamation and remediation adjustments
of $25 and $40, respectively.
- Advanced projects, research and development and Exploration
excludes development expenditures of $6 at Carlin, $1 at Phoenix,
$2 at Twin Creeks, $12 at Long Canyon, $2 at Other Nevada, $3 at
CC&V, $7 at Yanacocha, $1 at Merian, $2 at Cerro Negro, $20 at
Other South America, $3 at Tanami, $2 at Kalgoorlie, $6 at Other
Australia, $7 at Ahafo, $5 at Akyem, $3 at Other Africa and $3 at
Corporate and Other, totaling $85 related to developing new
operations or major projects at existing operations where these
projects will materially benefit the operation.
- Other expense, net is adjusted for Newmont Goldcorp transaction
and integration costs of $159, Nevada JV transaction implementation
costs of $23, restructuring and other costs of $5 and impairment of
long-lived assets of $1.
- Includes sustaining capital expenditures of $110 for Nevada,
$74 for North America, $50 for South America, $81 for Australia,
$61 for Africa and $1 for Corporate and Other, totaling $377 and
excludes development capital expenditures, capitalized interest and
the increase in accrued capital totaling $228. The following are
major development projects: Borden, Musselwhite Materials Handling,
Turquoise Ridge joint venture 3rd shaft, Quecher Main, Yanacocha
Sulfides projects, Tanami Expansion 2, Ahafo North, Subika
Underground and Ahafo Mill Expansion.
- Includes finance lease payments for sustaining projects of $20
and excludes finance lease payments for development projects of
$19.
- Per ounce measures may not recalculate due to rounding.
- Gold equivalent ounces is calculated as pounds or ounces
produced multiplied by the ratio of the other metals price to the
gold price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($15/oz.), Lead ($0.90/lb.), and Zinc ($1.05/lb.) pricing.
Advanced
Projects,
Research and
Treatment
All-In
Costs
Development
General
Other
and
All-In
Sustaining
Six Months Ended
Applicable
Reclamation
and
and
Expense,
Refining
Sustaining
Sustaining
Ounces (000)
Costs per
June 30, 2018
to Sales (1)(2)(3)
Costs (4)
Exploration(5)
Administrative
Net (6)
Costs
Capital (7)
Costs
Sold
oz. (8)
Gold
Carlin
$
377
$
5
$
9
$
3
$
—
$
—
$
72
$
466
416
$
1,119
Phoenix
106
1
2
1
—
4
14
128
130
983
Twin Creeks
130
1
3
1
1
—
11
147
169
870
Long Canyon
34
1
—
—
—
—
5
40
87
464
Other Nevada
—
—
6
1
2
—
4
13
—
—
Nevada
647
8
20
6
3
4
106
794
802
989
CC&V
81
3
1
1
1
—
18
105
129
815
Other North America
—
—
—
—
—
—
—
—
—
—
North America
81
3
1
1
1
—
18
105
129
815
Yanacocha
206
19
1
—
3
—
11
240
220
1,092
Merian
128
1
2
—
—
—
27
158
227
696
Other South America
—
—
—
6
1
—
—
7
—
—
South America
334
20
3
6
4
—
38
405
447
906
Boddington
258
6
—
—
—
10
20
294
337
873
Tanami
150
1
9
—
1
—
29
190
229
837
Kalgoorlie
122
2
2
—
—
—
13
139
181
765
Other Australia
—
2
2
5
(3)
—
1
7
—
—
Australia
530
11
13
5
(2)
10
63
630
747
845
Ahafo
180
2
2
1
1
—
13
199
205
972
Akyem
129
12
1
—
1
—
20
163
206
794
Other Africa
—
—
—
3
—
—
—
3
—
—
Africa
309
14
3
4
2
—
33
365
411
889
Corporate and Other
—
—
28
100
1
—
6
135
—
—
Total Gold
$
1,901
$
56
$
68
$
122
$
9
$
14
$
264
$
2,434
2,536
$
961
Gold equivalent ounces - other metals
(9)
Phoenix
$
30
$
1
$
—
$
—
$
—
$
1
$
4
$
36
33
$
1,088
Boddington
63
1
—
—
—
5
6
75
84
901
Total Gold Equivalent Ounces
$
93
$
2
$
—
$
—
$
—
$
6
$
10
$
111
117
$
954
Consolidated
$
1,994
$
58
$
68
$
122
$
9
$
20
$
274
$
2,545
- Excludes Depreciation and amortization and Reclamation and
remediation.
- Includes by-product credits of $33 and excludes co-product
revenues of $159.
- Includes stockpile and leach pad inventory adjustments of $46
at Carlin, $26 at Twin Creeks, $19 at Yanacocha, $33 at Ahafo and
$28 at Akyem.
- Reclamation costs include operating accretion and amortization
of asset retirement costs of $30 and $28, respectively, and exclude
non-operating accretion and reclamation and remediation adjustments
of $21 and $14, respectively.
- Advanced projects, research and development and Exploration
excludes development expenditures of $6 at Carlin, $2 at Twin
Creeks, $12 at Long Canyon, $7 at Other Nevada, $2 at CC&V, $21
at Yanacocha, $7 at Merian, $15 at Other South America, $1 at
Tanami, $4 at Kalgoorlie, $2 at Other Australia, $6 at Ahafo, $6 at
Akyem, $2 at Other Africa and $3 at Corporate and Other, totaling
$96 related to developing new operations or major projects at
existing operations where these projects will materially benefit
the operation.
- Other expense, net is adjusted for restructuring and other
costs of $15.
- Excludes development capital expenditures, capitalized interest
and the increase in accrued capital totaling $215. The following
are major development projects: Twin Creeks Underground, Quecher
Main, the Merian crusher, Tanami Expansion 2, Subika Underground
and Ahafo Mill Expansion.
- Per ounce measures may not recalculate due to rounding.
- Gold equivalent ounces is calculated as pounds or ounces
produced multiplied by the ratio of the other metals price to the
gold price, using Gold ($1,250/oz.) and Copper ($2.70/lb.)
pricing.
A reconciliation of the 2019 Gold AISC outlook to the 2019 Gold
CAS outlook, 2019 Co-product AISC outlook to the 2019 Co-product
CAS outlook are provided below. The estimates in the table below
are considered “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor created by such sections
and other applicable laws.
2019 Outlook - Gold 7,9 Outlook Estimate 11
(in millions, except ounces and per ounce) Cost
Applicable to Sales 1,2
4,870
Reclamation Costs 3
140
Advanced Project and Exploration 4
210
General and Adminstrative 5
325
Other Expense
15
Treatment and Refining Costs
30
Sustaining Capital
845
Sustaining Finance Lease Payments 6
20
All-in Sustaining Costs 8
6,450
Ounces (000) Sold 10
6,650
All-in Sustaining Costs per Oz 8
$975
- Excludes Depreciation and amortization and Reclamation and
remediation.
- Includes stockpile and leach pad inventory adjustments.
- Reclamation costs include operating accretion and amortization
of asset retirement costs.
- Advanced Project and Exploration excludes non-sustaining
advanced projects and exploration.
- Includes stock based compensation
- Excludes development capital expenditures, capitalized interest
and change in accrued capital.
- The reconciliation is provided for illustrative purposes in
order to better describe management’s estimates of the components
of the calculation. Estimates for each component of the
forward-looking All-in sustaining costs per ounce are independently
calculated and, as a result, the total All-in sustaining costs and
the All-in sustaining costs per ounce may not sum to the component
ranges. While a reconciliation to the most directly comparable GAAP
measure has been provided for 2019 AISC Gold and Co-Product Outlook
on a consolidated basis, a reconciliation has not been provided on
an individual site or project basis in reliance on Item
10(e)(1)(i)(B) of Regulation S-K because such reconciliation is not
available without unreasonable efforts.
- Reflects revised AISC definition.
- All values are presented on a consolidated basis for combined
Newmont Goldcorp.
- Consolidated production for Yanacocha and Merian is presented
on a total production basis for the mine site and excludes
production from Pueblo Viejo
- Reflects full 12 months of 2019 for production and costs for
former Newmont and 8.4 months for former Goldcorp sites
2019 Outlook - Co-Product 7,9 Outlook Estimate 11
(in millions, except GEO and per GEO) Cost
Applicable to Sales 1,2
665
Reclamation Costs 3
10
Advanced Project and Exploration 4
-
General and Adminstrative 5
-
Other Expense
-
Treatment and Refining Costs
110
Sustaining Capital
140
Sustaining Finance Lease Payments 6
5
All-in Sustaining Costs 8
940
Co-Product GEO (000) Sold 10
940
All-in Sustaining Costs per Co Product GEO 8
$995
- Excludes Depreciation and amortization andReclamation and
remediation.
- Includes stockpile and leach pad inventory adjustments.
- Reclamation costs include operating accretion and amortization
of asset retirement costs.
- Advanced Project and Exploration excludes non-sustaining
advanced projects and exploration.
- Includes stock based compensation
- Excludes development capital expenditures, capitalized interest
and change in accrued capital.
- The reconciliation is provided for illustrative purposes in
order to better describe management’s estimates of the components
of the calculation. Estimates for each component of the
forward-looking All-in sustaining costs per ounce are independently
calculated and, as a result, the total All-in sustaining costs and
the All-in sustaining costs per ounce may not sum to the component
ranges. While a reconciliation to the most directly comparable GAAP
measure has been provided for 2019 AISC Gold and Co-Product Outlook
on a consolidated basis, a reconciliation has not been provided on
an individual site or project basis in reliance on Item
10(e)(1)(i)(B) of Regulation S-K because such reconciliation is not
available without unreasonable efforts.
- Reflects revised AISC definition.
- All values are presented on a consolidated basis for combined
Newmont Goldcorp.
- Co-Product GEO are all non gold co-products (Peñasquito silver,
zinc, lead, Boddington and Phoenix copper)
- Reflects full 12 months of 2019 for production and costs for
former Newmont and 8.4 months for former Goldcorp sites
Net debt to Pro forma adjusted EBITDA ratio
Management uses net debt to Pro forma Adjusted EBITDA as
non-GAAP measures to evaluate the Company’s operating performance,
including our ability to generate earnings sufficient to service
our debt. Net debt to Pro forma Adjusted EBITDA represents the
ratio of the Company’s debt, net of cash and cash equivalents, to
Pro forma Adjusted EBITDA. Net debt to Pro forma Adjusted EBITDA
does not represent, and should not be considered an alternative to,
net income (loss), operating income (loss), or cash flow from
operations as those terms are defined by GAAP, and does not
necessarily indicate whether cash flows will be sufficient to fund
cash needs. Although Net Debt to Pro forma Adjusted EBITDA and
similar measures are frequently used as measures of operations and
the ability to meet debt service requirements by other companies,
our calculation of net debt to Pro forma Adjusted EBITDA measure is
not necessarily comparable to such other similarly titled captions
of other companies. The Company believes that net debt to Pro forma
Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating results in the same
manner as our management and Board of Directors. Management’s
determination of the components of net debt to Pro forma Adjusted
EBITDA is evaluated periodically and based, in part, on a review of
non-GAAP financial measures used by mining industry analysts. Net
income (loss) attributable to Newmont stockholders is reconciled to
Pro forma Adjusted EBITDA as follows:
Three months ended Three months ended Three months
ended Three months ended June 30, 2019 March
31, 2019 December 31, 2018 September 30, 2018
Net income (loss) attributable to Newmont
stockholders
$
(25
)
$
87
$
2
$
(145
)
Net income (loss) attributable to noncontrolling interests
25
32
13
21
Net loss (income) from discontinued operations
26
26
(5
)
(16
)
Equity loss (income) of affiliates
(26
)
5
8
9
Income and mining tax expense (benefit)
20
125
260
3
Depreciation and amortization
487
312
336
299
Interest expense, net
82
58
54
51
EBITDA
589
645
668
222
EBITDA Adjustments: Goldcorp transaction and integration costs
114
45
— — Change in fair value of investments
(35
)
(21
)
29
26
Loss (gain) on asset and investment sales
(32
)
(1
)
—
(1
)
Reclamation and remediation charges
32
-
13
— Nevada JV transaction and integration costs
11
12
— — Impairment of long-lived assets —
1
3
366
Restructuring and other —
5
4
1
Impairment of investments —
1
42
— Emigrant leach pad write-down — — —
22
Adjusted EBITDA
679
687
759
636
Pro forma adjustments to EBITDA: Goldcorp adjusted EBITDA
(prior to acquisition) (1)
(66
)
148
215
165
Total pro forma adjusted EBITDA
$
613
$
835
$
974
$
801
12 month trailing Adjusted EBITDA
$
3,223
Total Gross Debt
$
6,772
Less: Cash and cash equivalents
(1,827
)
Total net debt
$
4,945
Net debt to pro forma adjusted EBITDA
1.5
- Represents Goldcorp's pre-acquisition Adjusted EBITDA on a U.S.
GAAP basis from July 1, 2019 through to the acquisition date, April
18, 2019. This amount is added to our adjusted EBITDA to include a
full twelve months of Goldcorp results on a pro forma basis for the
twelve months ended June 30, 2019. The pro forma adjusted EBITDA
was derived from Goldcorp's EBITDA from its historical unaudited
financial statements for the three months ended September 30, 2018
and audited financial statements for twelve months ended December
31, 2018, as filed with the Securities and Exchange Commission, as
well as Goldcorp management unaudited financial information for the
three months ended March 31, 2019 and April 1, 2019 through to
April 18, 2019, the acquisition date. These amounts were adjusted
to remove the impairment of long-lived assets recognized by
Goldcorp at December 31, 2018. Goldcorp's pre-acquisition Adjusted
EBITDA has been added to our adjusted EBITDA for the purposes of
Net debt to Pro forma Adjusted EBITDA ratio only.
Net average realized price per ounce/ pound
Average realized price per ounce/ pound are non-GAAP financial
measures. The measures are calculated by dividing the Net
consolidated gold and copper sales by the consolidated gold ounces
or copper 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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Sales
$
2,257
$
1,662
$
4,060
$
3,479
Consolidated other metal sales, net1
(103
)
(81
)
(167
)
(159
)
Consolidated gold sales, net
$
2,154
$
1,581
$
3,893
$
3,320
Consolidated gold sales:
Gross before provisional pricing
$
2,154
$
1,595
$
3,899
$
3,339
Provisional pricing mark-to-market
7
(7
)
7
(5
)
Gross after provisional pricing
2,161
1,588
3,906
3,334
Treatment and refining charges
(7
)
(7
)
(13
)
(14
)
Net
$
2,154
$
1,581
$
3,893
$
3,320
Consolidated gold ounces sold
(thousands)
1,636
1,224
2,974
2,536
Average realized gold price (per
ounce):
Gross before provisional pricing
$
1,317
$
1,304
$
1,312
$
1,317
Provisional pricing mark-to-market
5
(6
)
2
(2
)
Gross after provisional pricing
1,322
1,298
1,314
1,315
Treatment and refining charges
(5
)
(6
)
(4
)
(5
)
Net
$
1,317
$
1,292
$
1,310
$
1,310
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Sales
$
2,257
$
1,662
$
4,060
$
3,479
Consolidated gold sales, net
(2,154
)
(1,581
)
(3,893
)
(3,320
)
Consolidated copper sales, net
$
103
$
81
$
167
$
159
Gross before provisional pricing
$
66
$
83
$
129
$
168
Provisional pricing mark-to-market
(4
)
1
(1
)
(3
)
Gross after provisional pricing
62
84
128
165
Treatment and refining charges
(3
)
(3
)
(5
)
(6
)
Net
$
59
$
81
$
123
$
159
Consolidated copper pounds sold
(millions)
24
27
46
54
Average realized copper price (per
pound):
Gross before provisional pricing
$
2.76
$
3.09
$
2.81
$
3.11
Provisional pricing mark-to-market
(0.17
)
0.03
(0.02
)
(0.05
)
Gross after provisional pricing
2.59
3.12
2.79
3.06
Treatment and refining charges
(0.11
)
(0.13
)
(0.11
)
(0.13
)
Net
$
2.48
$
2.99
$
2.68
$
2.93
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Consolidated silver sales:
Gross before provisional pricing
$
31
$
—
$
31
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
31
—
31
—
Treatment and refining charges
—
—
—
—
Net
$
31
$
—
$
31
$
—
Consolidated silver ounces sold
(thousands)
2,167
—
2,167
—
Average realized silver price (per
ounce)(1):
Gross before provisional pricing
$
14.20
$
—
$
14.20
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
14.20
—
14.20
—
Treatment and refining charges
—
—
—
Net
$
14.20
$
—
$
14.20
$
—
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Consolidated lead sales:
Gross before provisional pricing
$
15
$
—
$
15
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
15
—
15
—
Treatment and refining charges
(2
)
—
(2
)
—
Net
$
13
$
—
$
13
$
—
Consolidated lead pounds sold
(thousands)
17
—
17
—
Average realized lead price (per
pound)(1):
Gross before provisional pricing
$
0.88
$
—
$
0.88
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
0.88
—
0.88
—
Treatment and refining charges
(0.12
)
—
(0.12
)
—
Net
$
0.76
$
—
$
0.76
$
—
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Consolidated zinc sales:
Gross before provisional pricing
$
—
$
—
$
—
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
—
—
—
—
Treatment and refining charges
—
—
—
—
Net
$
—
$
—
$
—
$
—
Consolidated zinc pounds sold
(thousands)
—
—
—
—
Average realized zinc price (per
pound)(1):
Gross before provisional pricing
$
—
$
—
$
—
$
—
Provisional pricing mark-to-market
—
—
—
—
Gross after provisional pricing
—
—
—
—
Treatment and refining charges
—
—
—
—
Net
$
—
$
—
$
—
$
—
Gold By-Product Metrics
Copper is a by-product 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 is a co-product,
or significant resource in the primary ore-body, and the revenue is
recorded as Sales in our GAAP Consolidated Financial
Statements.
Gold By-Product Metrics are non-GAAP financial measures that
serve as a basis for comparing the Company’s performance with
certain competitors. As Newmont’s operations are primarily focused
on gold production, “Gold By-Product Metrics” were developed to
allow investors to view Sales, CAS per ounce and AISC per ounce
calculations that classify all copper production as a by-product,
even when copper is the primary ore-body. These metrics are
calculated by subtracting copper 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
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Consolidated gold sales, net
$
2,154
$
1,581
$
3,893
$
3,320
Consolidated other metal sales, net
103
81
167
159
Sales
$
2,257
$
1,662
$
4,060
$
3,479
Costs applicable to sales
$
1,366
$
965
$
2,344
$
1,994
Less: Consolidated other metal sales,
net
(103
)
(81
)
(167
)
(159
)
By-Product costs applicable to sales
$
1,263
$
884
$
2,177
$
1,835
Gold sold (thousand ounces)
1,636
1,224
2,974
2,536
Total Gold CAS per ounce (by-product)
$
772
$
722
$
732
$
724
Total AISC
$
1,816
$
1,252
$
3,079
$
2,545
Less: Consolidated other metal sales,
net
(103
)
(81
)
(167
)
(159
)
By-Product AISC
$
1,713
$
1,171
$
2,912
$
2,386
Gold sold (thousand ounces)
1,636
1,224
2,974
2,536
Total Gold AISC per ounce (by-product)
$
1,047
$
957
$
979
$
941
Conference Call Information
A conference call will be held on Thursday, July 25, 2019
at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time); it
will also be carried on the Company’s website.
Conference Call
Details
Dial-In Number
855.209.8210
Intl Dial-In Number
412.317.5213
Conference Name
Newmont Goldcorp
Replay Number
877.344.7529
Intl Replay Number
412.317.0088
Replay Access Code
10132277
Webcast Details
Title: Newmont Goldcorp Q2 2019 Earnings Conference Call
URL:
https://event.on24.com/wcc/r/2019954/AE1C714EE2785D2BB4483C205607B18A
The second quarter 2019 results will be available before the
market opens on Thursday, July 25, 2019 on the “Investor Relations”
section of the Company’s website, www.newmontgoldcorp.com.
Additionally, the conference call will be archived for a limited
time on the Company’s website.
About Newmont Goldcorp
Newmont Goldcorp is the world’s leading gold company and a
producer of copper, silver, zinc and lead. The Company’s
world-class portfolio of assets, prospects and talent is anchored
in favorable mining jurisdictions in North America, South America,
Australia and Africa. Newmont Goldcorp is the only gold producer
listed in the S&P 500 Index and is widely recognized for its
principled environmental, social and governance practices. The
Company is an industry leader in value creation, supported by
robust safety standards, superior execution and technical
proficiency. Newmont Goldcorp was founded in 1921 and has been
publicly traded since 1925.
Cautionary Statement Regarding Forward Looking Statements,
Including Outlook:
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws. Where a
forward-looking statement expresses or implies an expectation or
belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis.
However, such statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ
materially from future results expressed, projected or implied by
the forward-looking statements. Forward-looking statements often
address our expected future business and financial performance and
financial condition; and often contain words such as “anticipate,”
“intend,” “plan,” “will,” “would,” “estimate,” “expect,” “believe,”
“target,” “indicative,” “preliminary,” or “potential.”
Forward-looking statements in this news release may include,
without limitation, (i) estimates of future production and sales,
including production outlook, average future production, upside
potential and indicative production profiles; (ii) estimates of
future costs applicable to sales and all-in sustaining costs; (iii)
estimates of future consolidated and attributable capital
expenditures; (iv) estimates of future cost reductions, full
potential savings, value creation, synergies and efficiencies; (v)
expectations regarding the development, growth and exploration
potential of the Company’s operations, projects and investments,
including, without limitation, returns, IRR, schedule, decision
dates, mine life, commercial start, first production, capital
average production, average costs and upside potential; (vi)
expectations regarding future investments or divestitures; (vii)
expectations regarding future dividends and returns to
stockholders; (viii) expectations regarding future mineralization,
including, without limitation, expectations regarding reserves and
recoveries; (ix) estimates of future closure costs and liabilities;
(x) expectations regarding the timing and/or likelihood of future
borrowing, future debt repayment, financial flexibility and cash
flow; and (xi) expectations regarding the future success of the
Nevada joint venture. Estimates or expectations of future events or
results are based upon certain assumptions, which may prove to be
incorrect. Such assumptions, include, but are not limited to: (i)
there being no significant change to current geotechnical,
metallurgical, hydrological and other physical conditions; (ii)
permitting, development, operations and expansion of operations and
projects being consistent with current expectations and mine plans,
including, without limitation, receipt of export approvals; (iii)
political developments in any jurisdiction in which the Company
operates being consistent with its current expectations; (iv)
certain exchange rate assumptions for the Australian dollar or the
Canadian dollar to the U.S. dollar, as well as other exchange rates
being approximately consistent with current levels; (v) certain
price assumptions for gold, copper, silver, zinc, lead and oil;
(vi) prices for key supplies being approximately consistent with
current levels; (vii) the accuracy of current mineral reserve and
mineralized material estimates; and (viii) other planning
assumptions. In addition, material risks that could cause actual
results to differ from forward-looking statements include: (A) the
inherent uncertainty associated with financial or other
projections; (B) the prompt and effective integration in connection
with the recent the business combination by which Newmont acquired
Goldcorp Inc. (the “integration”), and the ability to achieve the
anticipated synergies and value-creation contemplated by the
integration; (C) the outcome of any legal proceedings that may be
instituted against the parties and others related to the
integration or the Nevada joint venture; (D) the ability to achieve
the anticipated synergies and value-creation contemplated by the
Nevada joint venture transaction; (E) unanticipated difficulties or
expenditures relating to the integration and Nevada joint venture;
(F) potential volatility in the price of the Company common stock
due to the integration and the Nevada joint venture; and (G) the
diversion of management time on integration and transaction-related
issues. For a more detailed discussion of risks and other factors
that might impact future looking statements, see the Company’s
Annual Report on Form 10-K for the year ended December 31, 2018
filed with the U.S. Securities and Exchange Commission (the “SEC”),
as well as the Company’s Quarterly Report on Form 10-Q for the
quarter ended June 30 2019 under the heading “Risk Factors”,
available on the SEC website or www.newmontgoldcorp.com and the
Company’s most recent annual information form as well as the
Company’s other filings made with Canadian securities regulatory
authorities and available on SEDAR or www.newmontgoldcorp.com. The
Company does not undertake any obligation to release publicly
revisions to any “forward-looking statement,” including, without
limitation, outlook, to reflect events or circumstances after the
date of this news release, or to reflect the occurrence of
unanticipated events, except as may be required under applicable
securities laws. Investors should not assume that any lack of
update to a previously issued “forward-looking statement”
constitutes a reaffirmation of that statement. Continued reliance
on “forward-looking statements” is at investors’ own risk.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190725005178/en/
Investor Contact Jessica Largent
303.837.5484 jessica.largent@newmont.com Media Contact Omar Jabara 303.837.5114
omar.jabara@newmont.com
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