Delivering stable production and improving costs through
2024
Newmont (NYSE: NEM, TSX: NGT) (Newmont or the Company) announced
its 2020 outlook1 with attributable gold production guidance of 6.7
million ounces at AISC2 of $975 per ounce. Attributable gold
production is expected to be between 6.5 and 7.0 million ounces per
year longer-term through 2024 with improving costs. The Company
expects to produce approximately 1.1 million gold equivalent ounces
from other metals in 2020 and increasing longer-term through
2024.
Highlights
- Attributable gold production3: Production guidance is
6.7 million ounces for 2020 and is expected to be between 6.5 and
7.0 million ounces longer-term through 2024.
- Attributable gold equivalent ounce (GEO) production from
other metals4: Co-product GEO production guidance is 1.1
million ounces for 2020 and between 1.0 and 1.2 million ounces in
2021; 1.1 and 1.3 million ounces in 2022, 1.3 and 1.5 million
ounces in 2023 and 2024.
- Gold costs applicable to sales (CAS): CAS guidance is
$750 per ounce for 2020 and between $650 and $750 per ounce for
2021 and 2022; CAS is expected to improve to between $600 and $700
per ounce for 2023 and 2024.
- Gold all-in sustaining costs (AISC): AISC guidance is
$975 per ounce for 2020 and between $850 and $950 per ounce for
2021 and 2022; AISC is expected to improve to between $800 and $900
per ounce for 2023 and 2024.
- Capital:
- Attributable sustaining capital guidance is $975 million for
2020 and is expected to be between $0.9 to $1.1 billion longer-term
through 2024.
- Attributable development capital guidance is $575 million for
2020 and is expected to be between $500 and $600 million in 2021,
between $300 to $400 million in 2022, between $100 and $200 million
in 2023, and between $0 and $100 million in 2024.
- Development capital includes Tanami Expansion 2 in Australia,
Subika Underground in Ghana, Cerro Negro in Argentina, Musselwhite
in Canada, expenditures related to the Company’s ownership interest
in Nevada Gold Mines and to progress studies for future
projects.
“As Newmont enters our centenary year in 2020, our people,
mines, projects and balance sheet are all very well positioned to
deliver stable and sustainable industry leading performance,” said
Tom Palmer, President and Chief Executive Officer. “Our five-year
outlook reflects steady gold production of 6.5 to 7 million
attributable gold ounces as well as an additional 1.2 to 1.4
million gold equivalent ounces of copper, silver, lead and zinc.
Our outlook also highlights our steadily improving cost profile,
which includes more than half a billion dollars per year in
sustainable operating, cost and supply chain improvements by 2021,”
Palmer added.
___________________________________
1 Outlook guidance used in this release are considered
“forward-looking statements” and users are cautioned that actual
results may vary; refer to the cautionary statement at the end of
this release. 2 AISC as used in the Company’s outlook is a non-GAAP
metric - see end of this release for further information and
reconciliation to CAS outlook. 3 Attributable gold production
outlook includes the Company’s equity investment (40%) in Pueblo
Viejo but does not include other equity investments. 4 Gold
equivalent ounces (GEO) is calculated as pounds or ounces produced
multiplied by the ratio of the other metal’s price to the gold
price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($16/oz.), Lead ($0.95/lb.), and Zinc ($1.20/lb.) pricing.
Outlook
Newmont’s outlook reflects steady gold production and ongoing
investment in its operating assets and most promising growth
prospects. The Company does not include development projects that
have not reached execution stage in its outlook which represents
upside to guidance.
Attributable production
Attributable gold production is expected to be stable at 6.5 to
7.0 million ounces across the five year period. The 2020 outlook of
6.7 million ounces increases from 2019 with a full year of
production from the acquired Goldcorp assets. Production is
expected to remain between 6.5 and 7.0 million ounces per year
longer-term through 2024 supported by a steady base from
Boddington, Tanami, Ahafo, Peñasquito, and the Company’s equity
ownership interest in the Nevada Gold Mines joint venture, which is
further enhanced by solid production from the Company’s nine other
operating mines and its equity ownership in Pueblo Viejo.
Regional production overview:
Australia
2020
2021
2022
Moz
1.5
1.5 - 1.7
1.6 - 1.8
2020: Full Potential at Boddington improves mining rates
and grade increases throughout the year with the stripping campaign
nearing completion in the South Pit, KCGM benefits from higher
grade and throughput from mining Golden Pike in the Fimiston pit,
and Tanami continues to deliver solid performance.
2021-2022: Boddington reaches higher grade ore while
Tanami and KCGM deliver steady performance.
Africa
2020
2021
2022
Moz
0.85
0.85 - 0.95
0.90 - 1.0
2020: A full year of production from the Ahafo Mill
Expansion is offset by mine sequencing in both the Subika and
Awonsu open pits, a change in mining method at Subika Underground
and lower grades at Akyem.
2021-2022: Subika Underground begins to deliver higher
tons and Subika open pit reaches higher grades, partially offset by
sequencing at Akyem.
North America
2020
2021
2022
Moz
1.7
1.6 - 1.8
1.5 - 1.7
2020: A full year of operations at Peñasquito, Éléonore
and Porcupine increase production. Peñasquito reaches higher grades
and Musselwhite is expected to reach normal production levels in
early October, partially offset by lower leach pad production at
CC&V.
2021: Musselwhite contributes a full year of operations,
Peñasquito continues in higher grade ore and achieves higher
throughput, and Porcupine benefits from higher grades in the Borden
underground and Hollinger open pit mines.
2022: Peñasquito is impacted by lower gold grade from
mine sequencing.
South America*
2020
2021
2022
Moz
1.3
1.1 - 1.2
1.0 - 1.1
*Includes Pueblo Viejo interest with ~375Koz in 2020 and 2021,
and ~385Koz in 2022.
2020: A full year of production from Cerro Negro and
Pueblo Viejo is partially offset by Yanacocha depleting higher
grades at the Tapado Oeste pit and Merian transitioning to harder
rock.
2021: Cerro Negro transitions to lower grades as mining
concludes in the Eureka District and Yanacocha ramps down the oxide
mill.
2022: Merian enters a stripping phase partially offset by
higher grades at Cerro Negro.
Nevada Gold Mines (NGM)
2020
2021
2022
Moz
1.4
1.3 - 1.4
1.3 - 1.4
Production for the Company’s 38.5 percent ownership interest in
NGM.
Attributable co-product GEOs
2020
2021
2022
2023 - 2024
Moz
1.1
1.0 - 1.2
1.1 - 1.3
1.3 - 1.5
2020: A full year of production from Peñasquito is
partially offset by lower copper production at Boddington.
2021: Boddington copper production increases with steady
production from Peñasquito.
2022-2024: Peñasquito delivers higher silver and lead
production from the Chile Colorado pit, followed by higher silver
and zinc production from the Peñasco pit.
Gold cost outlook
- Costs improve throughout the five year period with continuing
Full Potential improvements and ongoing investment in profitable
projects.
- CAS is expected to be $750 per ounce for 2020 from lower
production in Africa and South America, partially offset by
improvements in North America with a full year of operations at
Peñasquito. CAS is expected to be between $650 and $750 per ounce
for 2021 and 2022, and between $600 and $700 per ounce in 2023 and
2024.
- AISC is expected to be $975 per ounce in 2020 from higher costs
in South America and Africa, partially offset by improved CAS in
North America. AISC is expected to be between $850 and $950 per
ounce in 2021 and 2022, and improves to between $800 and $900 per
ounce longer-term through 2024. Future Full Potential savings and
profitable ounces from projects that are not yet approved represent
additional upside not currently captured in guidance.
Regional cost overview:
Australia
2020
2021
2022
CAS/oz
$735
$600 - $700
$550 - $650
AISC/oz
$920
$800 - $900
$700 - $800
2020: CAS benefits from lower spend at Tanami for paste
fill operations and less stockpile processing at KCGM partially
offset by increased stockpile processing at Boddington. AISC
includes increased sustaining capital spend at Boddington to
advance Autonomous Haulage and at Tanami for ventilation.
2021-2022: Unit costs improve as Boddington production
increases.
Africa
2020
2021
2022
CAS/oz
$710
$700 - $800
$600 - $700
AISC/oz
$870
$850 - $950
$800 - $900
2020: CAS is higher than 2019 on lower production at
Akyem and Ahafo with stripping in the Subika open pit and the
change in mining method at Subika Underground. AISC is higher on
increased unit CAS partially offset by lower sustaining capital at
Ahafo.
2021-2022: CAS improves from higher production at Ahafo
with increased ore tons from Subika Underground and the end of
stripping in the Subika open pit. AISC increases in 2021 on higher
sustaining capital spend for tailings storage facilities at both
Ahafo and Akyem.
North America
2020
2021
2022
CAS/oz
$805
$700 - $800
$700 - $800
AISC/oz
$995
$850 - $950
$900 - $1,000
2020: Unit costs improve as Peñasquito delivers a full
year of production with Full Potential improvements and the removal
higher cost production from Red Lake, partially offset by lower
production at CC&V and higher costs at Musselwhite prior to
resuming full operations in October.
2021-2022: Unit costs improve with increased production
and the delivery of Full Potential improvements throughout the
region.
South America
2020
2021
2022
CAS/oz
$790
$700 - $800
$800 - $900
AISC/oz
$940
$850 - $950
$1,000 - $1,100
2020: Unit costs increase on lower production at
Yanacocha and from higher mine and milling costs at Merian from
harder rock, partially offset by Full Potential improvements at
Cerro Negro.
2021: Unit costs improve with lower operating costs at
Yanacocha from the end of Quecher Main stripping and ramping down
the oxide mill, partially offset by lower production at Cerro
Negro.
2022: CAS increases with Merian entering a stripping
campaign and Yanacocha production declining. AISC increases with
CAS and higher sustaining capital at Cerro Negro.
Nevada Gold Mines
2020
2021
2022
CAS/oz
$690
$600 - $700
$600 - $700
AISC/oz
$880
$800 - $900
$800 - $900
CAS & AISC for the Company’s 38.5 percent ownership interest
in NGM.
Attributable co-product costs per GEO
2020
2021
2022
2023 - 2024
CAS/GEO
$560
$550 - $650
$600 - $700
$450 - $550
AISC/GEO
$880
$900 - $1,000
$900 - $1,000
$750 - $850
2020: Unit costs improve driven by a full year of
production at Peñasquito.
2021-2022: Unit costs per GEO increase from mine
sequencing at Peñasquito, partially offset by higher copper
production at Boddington.
2023-2024: CAS per GEO improves on higher production at
Peñasquito and AISC per GEO improves on lower CAS and lower
sustaining capital spend.
Consolidated Capital
2020
2021
2022
2023
2024
Total ($M)
$1,625
$1,500 - $1,700
$1,200 - $1,400
$1,100 - $ 1,300
$900 - $1,100
Sustaining ($M)
$1,000
$900 - $1,100
$900 - $1,100
$900 - $1,100
$900 - $1,100
Development ($M)
$625
$500 - $600
$300 - $400
$100 - $200
$0 - $100
Sustaining capital remains steady, covering infrastructure,
equipment and ongoing mine development.
Development capital includes Tanami Expansion 2 in Australia,
Subika Underground in Ghana, Cerro Negro in Argentina, Musselwhite
in Canada, expenditures related to the Company’s ownership interest
in Nevada Gold Mines and to progress studies for future projects.
Yearly decreases reflect the Company’s approach to only including
development projects that have reached execution stage.
Consolidated expense outlook – Interest expense increases
to $300 million for 2020 from a full year of expense related to the
acquired Goldcorp debt. Investment in exploration and advanced
projects is expected to be $460 million in 2020 with a full year of
spend for the acquired Goldcorp assets. The 2020 outlook for
general & administrative costs is $265 million as synergies of
$120 million are realized from the Goldcorp transaction and
depreciation and amortization is expected to be $2,150 million.
Assumptions and sensitivities – Newmont Goldcorp’s
outlook assumes $1,200 per ounce gold price, $16 per ounce silver
price, $2.75 per pound copper price, $1.20 per pound zinc price,
$0.95 per pound lead price, $0.75 USD/AUD exchange rate, $0.77
USD/CAD exchange rate, and $60 per barrel WTI oil price.
Assuming a 35% incremental tax rate, $100 per ounce increase in
gold price would deliver an expected $400 million improvement in
attributable free cash flow.
Projects update
- Tanami Expansion 2 (Australia)
secures Tanami’s future as a long-life, low cost producer with
potential to extend mine life to 2040 through the addition of a
1,460m hoisting shaft and supporting infrastructure to achieve
3.5Mt per year of production and provide a platform for future
growth. The expansion is expected to increase average annual gold
production by approximately 150,000 to 200,000 ounces per year for
the first five years beginning in 2023, and is expected to reduce
operating costs by approximately 10 percent. Capital costs for the
project are estimated to be between $700 million and $800 million.
The project IRR is expected to exceed the Company’s hurdle rate of
15 percent.
- Musselwhite Materials Handling
(North America) improves material movement from Musselwhite’s two
main zones below Lake Opapimiskan. An underground shaft will hoist
ore from the underground crushers, reducing haulage distances and
ventilation costs. The Company expects the project to be fully
operational in mid-2020.
2020 Outlooka
2020 Outlook +/- 5%
Consolidated
Production
Attributable
Production
Consolidated CAS
Consolidated All-in Sustaining
Costsb
Consolidated Sustaining
Capital Expenditures
Consolidated Development
Capital Expenditures
Attributable Sustaining
Capital Expenditures
Attributable Development
Capital Expenditures
(Koz, GEOs Koz)
(Koz, GEOs Koz)
($/oz)
($/oz)
($M)
($M)
($M)
($M)
North America
1,675
1,675
805
995
335
60
335
60
South America
1,290
1,345
790
940
135
175
100
125
Australia
1,460
1,460
735
920
210
270c
210
270c
Africa
850
850
710
870
95
70
95
70
Nevada Gold Minesd
1,375
1,375
690
880
185
45
185
45
Total Golde
6,600
6,700e
750
975
1,000f
625
975f
575
Total Co-products
1,105
1,105
560
880
2020 Consolidated Expense Outlook ($M) +/-5% General &
Administrative
265
Interest Expense
300
Depreciation and Amortization
2,150
Advanced Projects & Exploration
460
Adjusted Tax Rateg,h
38%-42%
Federal Tax Rateh
29%-33%
Mining Tax Rateh
8%-10%
2020 Site Outlooka as of December 2, 2019
ConsolidatedProduction AttributableProduction
ConsolidatedCAS ConsolidatedAll-in SustainingCostsb
ConsolidatedSustainingCapitalExpenditures
ConsolidatedDevelopmentCapitalExpenditures (Koz)
(Koz) ($/oz) ($/oz) ($M) ($M)
CC&V
285
285
1,000
1,175
35
Éléonore
355
355
760
915
50
10
Peñasquito
575
575
570
725
165
Porcupine
325
325
795
975
40
Musselwhite
140
140
1,460
1,930
50
50
Other North America
Cerro Negro
405
405
560
710
45
75
Yanacochai
415
215
1,105
1,260
35
100
Meriani
465
350
715
840
50
Pueblo Viejo
375
Other South America
Boddington
700
700
855
1,015
95
40
Tanami
480
480
455
685
85
225c
Kalgoorliej
285
285
915
1,035
25
Other Australia
5
Ahafo
480
480
810
960
60
30
Akyem
365
365
575
695
25
10
Ahafo North
25
Other Africa
5
Nevada Gold Minesd
1,375
1,375
690
880
185
45
Corporate/Other
30
Peñasquito - Co-products (GEO)k
975
975
515
805
Boddington - Co-product (GEO)k
130
130
910
1,105
Peñasquito - Zinc (Mlbs)
425
425
Peñasquito - Lead (Mlbs)
200
200
Peñasquito - Silver (Moz)
30
30
Boddington - Copper (Mlbs)
55
55
a2020 outlook projections used in this presentation are
considered forward-looking statements and represent management’s
good faith estimates or expectations of future production results
as of December 2, 2019. Outlook is based upon certain assumptions,
including, but not limited to, metal prices, oil prices, certain
exchange rates and other assumptions. For example, 2020 Outlook
assumes $1,200/oz Au, $16/oz Ag, $2.75/lb Cu, $1.20/lb Zn, $0.95/lb
Pb, $0.75 USD/AUD exchange rate, $0.77 USD/CAD exchange rate and
$60/barrel WTI; AISC and CAS estimates do not include inflation,
for the remainder of the year. Production, CAS, AISC and capital
estimates exclude projects that have not yet been approved. The
potential impact on inventory valuation as a result of lower
prices, input costs, and project decisions are not included as part
of this Outlook. Assumptions used for purposes of Outlook may prove
to be incorrect and actual results may differ from those
anticipated, including variation beyond a +/-5% range. Outlook
cannot be guaranteed. As such, investors are cautioned not to place
undue reliance upon Outlook and forward-looking statements as there
can be no assurance that the plans, assumptions or expectations
upon which they are placed will occur. Amounts may not recalculate
to totals due to rounding. See cautionary at the end of this
release. 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 2020 CAS outlook. cIncludes finance
lease payments related to the Tanami Power Project paid over a 10
year term beginning in 2019. dRepresents the ownership interest in
the Nevada Gold Mines (NGM) joint venture. NGM is owned 38.5% by
Newmont Goldcorp and owned 61.5% and operated by Barrick. The
Company accounts for its interest in NGM using the proportionate
consolidation method, thereby recognizing its pro-rata share of the
assets, liabilities and operations of NGM. eAttributable gold
production outlook includes the Company’s equity investment (40%)
in Pueblo Viejo with ~375Koz in 2020; does not include the
Company's other equity investments. fTotal sustaining capital
includes ~$30 million of corporate and other spend. gThe adjusted
tax rate excludes certain items such as tax valuation allowance
adjustments. hAssuming average prices of $1,400 per ounce for gold,
$16 per ounce for silver, $2.75 per pound for copper, $0.95 per
pound for lead, and $1.20 per pound for zinc and achievement of
current production and sales volumes and cost estimates, we
estimate our consolidated adjusted effective tax rate related to
continuing operations for 2020 will be between 38%-42%.
iConsolidated 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. jBoth consolidated and attributable production are shown on
a pro-rata basis with a 50% ownership for Kalgoorlie. kGold
equivalent ounces (GEO) is calculated as pounds or ounces produced
multiplied by the ratio of the other metal’s price to the gold
price, using Gold ($1,200/oz.), Copper ($2.75/lb.), Silver
($16/oz.), Lead ($0.95/lb.), and Zinc ($1.20/lb.) pricing.
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.
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.
All-In Sustaining Costs
Newmont has developed a metric that expands on GAAP measures,
such as cost of goods sold, and non-GAAP measures, such as Costs
applicable to sales per ounce, to provide visibility into the
economics of our mining operations related to expenditures,
operating performance and the ability to generate cash flow from
our continuing operations.
Current GAAP measures used in the mining industry, such as cost
of goods sold, do not capture all of the expenditures incurred to
discover, develop and sustain production. Therefore, we believe
that all-in sustaining costs is a non-GAAP measure that provides
additional information to management, investors and analysts that
aid in the understanding of the economics of our operations and
performance compared to other producers and provides investors
visibility by better defining the total costs associated with
production.
All-in sustaining cost (“AISC”) amounts are intended to provide
additional information only and do not have any standardized
meaning prescribed by GAAP and should not be considered in
isolation or as a substitute for measures of performance prepared
in accordance with GAAP. The measures are not necessarily
indicative of operating profit or cash flow from operations as
determined under GAAP. Other companies may calculate these measures
differently as a result of differences in the underlying accounting
principles, policies applied and in accounting frameworks such as
in International Financial Reporting Standards (“IFRS”), or by
reflecting the benefit from selling non-gold metals as a reduction
to AISC. Differences may also arise related to definitional
differences of sustaining versus development (i.e. non-sustaining)
activities based upon each company’s internal policies.
The following disclosure provides information regarding the
adjustments made in determining the all-in sustaining costs
measure:
Costs applicable to sales. Includes all direct and indirect
costs related to current production incurred to execute the current
mine plan. We exclude certain exceptional or unusual amounts from
Costs applicable to sales (“CAS”), such as significant revisions to
recovery amounts. CAS includes by-product credits from certain
metals obtained during the process of extracting and processing the
primary ore-body. CAS is accounted for on an accrual basis and
excludes Depreciation and amortization and Reclamation and
remediation, which is consistent with our presentation of CAS on
the Condensed Consolidated Statements of Operations for the period
ended September 30, 2019. 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. The other metals’
CAS at the Peñasquito, Boddington, and Phoenix mines is disclosed
in Note 5 to the Condensed Consolidated Financial Statements. The
allocation of CAS between gold and other metals 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.
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.
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.
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.
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.
A reconciliation of the 2020 Gold AISC outlook to the 2020 Gold
CAS outlook, 2020 Co-product AISC outlook to the 2020 Co-product
CAS outlook are provided below. The estimates in the table below
are considered “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbor created by such sections
and other applicable laws.
2020 Outlook - Gold 7,8 Outlook Estimate
(in millions, except ounces and per ounce) Cost
Applicable to Sales 1,2
5,000
Reclamation Costs 3
115
Advance Project and Exploration 4
180
General and Administrative 5
240
Other Expense
10
Treatment and Refining Costs
35
Sustaining Capital 6
880
Sustaining Finance Lease Payments
30
All-in Sustaining Costs
6,450
Ounces (000) Sold 9
6,600
All-in Sustaining Costs per Oz
$975
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes stockpile and leach pad inventory
adjustments.
(3)
Reclamation costs include operating
accretion and amortization of asset retirement costs.
(4)
Advanced Project and Exploration excludes
non-sustaining advanced projects and exploration.
(5)
Includes stock based compensation.
(6)
Excludes development capital expenditures,
capitalized interest and change in accrued capital.
(7)
The reconciliation is provided for
illustrative purposes in order to better describe management’s
estimates of the components of the calculation. Estimates for each
component of the forward-looking All-in sustaining costs per ounce
are independently calculated and, as a result, the total All-in
sustaining costs and the All-in sustaining costs per ounce may not
sum to the component ranges. While a reconciliation to the most
directly comparable GAAP measure has been provided for 2020 AISC
Gold and Co-Product Outlook on a consolidated basis, a
reconciliation has not been provided on an individual site or
project basis in reliance on Item 10(e)(1)(i)(B) of Regulation S-K
because such reconciliation is not available without unreasonable
efforts.
(8)
All values are presented on a consolidated
basis for combined Newmont Goldcorp.
(9)
Consolidated production for Yanacocha and
Merian is presented on a total production basis for the mine site
and excludes production from Pueblo Viejo.
2020 Outlook - Co-Product 7,8 Outlook Estimate
(in millions, except GEO and per GEO) Cost Applicable
to Sales 1,2
620
Reclamation Costs 3
10
Advance Project and Exploration 4
10
General and Administrative 5
25
Other Expense
-
Treatment and Refining Costs
160
Sustaining Capital 6
120
Sustaining Finance Lease Payments
20
All-in Sustaining Costs
975
Co-Product GEO (000) Sold 9
1,105
All-in Sustaining Costs per Co Product GEO
$880
(1)
Excludes Depreciation and amortization and
Reclamation and remediation.
(2)
Includes stockpile and leach pad inventory
adjustments.
(3)
Reclamation costs include operating
accretion and amortization of asset retirement costs.
(4)
Advanced Project and Exploration excludes
non-sustaining advanced projects and exploration.
(5)
Includes stock based compensation.
(6)
Excludes development capital expenditures,
capitalized interest and change in accrued capital.
(7)
The reconciliation is provided for
illustrative purposes in order to better describe management’s
estimates of the components of the calculation. Estimates for each
component of the forward-looking All-in sustaining costs per ounce
are independently calculated and, as a result, the total All-in
sustaining costs and the All-in sustaining costs per ounce may not
sum to the component ranges. While a reconciliation to the most
directly comparable GAAP measure has been provided for 2020 AISC
Gold and Co-Product Outlook on a consolidated basis, a
reconciliation has not been provided on an individual site or
project basis in reliance on Item 10(e)(1)(i)(B) of Regulation S-K
because such reconciliation is not available without unreasonable
efforts.
(8)
All values are presented on a consolidated
basis for combined Newmont Goldcorp.
(9)
Co-Product GEO are all non gold
co-products (Peñasquito silver, zinc, lead, and Boddington
copper).
Conference Call Information
A conference call will be held on Monday, December 2, 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
10135892
Webcast Details
Title: Newmont 2020 Guidance Webcast URL:
https://event.on24.com/wcc/r/2111121/DC0443E02F227F435BF41796EFF680F8
The webcast materials will be available before the market opens
on Monday, December 2, 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
Newmont is the world’s leading gold company and a producer of
copper, silver, zinc and lead. The Company’s world-class portfolio
of assets, prospects and talent is anchored in favorable mining
jurisdictions in North America, South America, Australia and
Africa. Newmont is the only gold producer listed in the S&P 500
Index and is widely recognized for its principled environmental,
social and governance practices. The Company is an industry leader
in value creation, supported by robust safety standards, superior
execution and technical proficiency. Newmont was founded in 1921
and has been publicly traded since 1925.
Cautionary Statement Regarding Forward Looking Statements,
Including Outlook:
This news release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbor
created by such sections and other applicable laws. Where a
forward-looking statement expresses or implies an expectation or
belief as to future events or results, such expectation or belief
is expressed in good faith and believed to have a reasonable basis.
However, such statements are subject to risks, uncertainties and
other factors, which could cause actual results to differ
materially from future results expressed, projected or implied by
the forward-looking statements. Forward-looking statements often
address our expected future business and financial performance and
financial condition; and often contain words such as “anticipate,”
“intend,” “plan,” “will,” “would,” “estimate,” “expect,” “believe,”
“target,” “indicative,” “preliminary,” or “potential.”
Forward-looking statements in this news release may include,
without limitation, (i) estimates of future production and sales,
including production outlook, average future production, upside
potential and indicative production profiles; (ii) estimates of
future costs applicable to sales and all-in sustaining costs; (iii)
estimates of project spend, budget estimates, sustaining capital
and development capital; (iv) estimates of future cost reductions
and improvements, supply chain savings, full potential savings,
value creation, synergies, run-rate, free cash improvements and
other efficiencies; (v) expectations regarding the development,
growth and exploration potential of the Company’s operations,
projects and investments, including, without limitation, returns,
IRR, schedule, decision dates, mine life, commercial start, first
production, capital average production, average costs and upside
potential; (vi) expectations regarding future portfolio
optimization, investments or divestitures, including without
limitation, the pending sale of Red Lake; (vii) expectations
regarding future dividends and returns to stockholders; (viii)
expectations regarding future mineralization, including, without
limitation, expectations regarding reserves and recoveries; (ix)
estimates of future closure costs and liabilities; (x) expectations
regarding the timing and/or likelihood of future borrowing, future
debt repayment, financial flexibility and cash flow; (xi)
expectations regarding the future success of exploration and
development of the project pipeline, and (xii) expectations
regarding the future success of the Company’s investments and joint
ventures, including without limitation NGM. 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 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
expectations; (iv) certain exchange rate assumptions; (v) certain
price assumptions for gold, copper, silver, zinc, lead and oil;
(vi) prices for key supplies being approximately consistent with
assumed 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 the
inherent uncertainty associated with financial or other
projections, and possible unanticipated difficulties or
expenditures relating to the Goldcorp integration and NGM joint
venture. For a more detailed discussion of risks and other factors
that might impact future looking statements, see the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30, 2019
under the heading “Risk Factors”, filed with the U.S. Securities
and Exchange Commission (the “SEC”) and available on the SEC
website or www.newmontgoldcorp.com, as well as the Company’s other
SEC filings, including the most recent Quarterly Report on Form
10-Q for the quarter ended September 30, 2019. 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/20191202005268/en/
Media Contact Omar Jabara
303.837.5114 omar.jabara@newmont.com
Investor Contact Jessica Largent
303.837.5484 jessica.largent@newmont.com
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