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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Newmont Corporation | TSX:NGT | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.54 | -0.96% | 55.64 | 55.55 | 55.84 | 56.58 | 55.46 | 56.24 | 336,800 | 21:12:20 |
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.
“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.
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.
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.
Gold cost outlook – CAS is expected to be $735 per ounce and AISC is expected to be $975 per ounce in 2019.
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) ($M) North America1,115
1,115
860
1,115
320
155
South America1,345
1,295
630
785
120
210
Australia1,460
1,460
775
940
185
60c
Africa1,105
1,105
585
770
125
90
Nevada1,515
1,515
795
990
230
15
Total Goldd6,600
6,500
735
975
985
575
Total Co-products
870
870
710
995
2019 Consolidated Expense Outlooke ($M) +/-5% General & Administrative
325
Interest Expense280
Depreciation and Amortization2,050
Advanced Projects & Exploration450
Adjusted Tax Ratef34%-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&V345
345
910
1,035
25
Éléonore
265
265
790
935
35
40
Red Lake120
120
1,050
1,340
25
5
Peñasquito165
165
820
1,095
175
Porcupine
225
225
750
910
20
60
Musselwhite0
0
25
50
Other North America
10
Cerro Negro
345
345
615
775
45
25
Yanacochac480
265
690
855
20
190
Merianc520
390
585
710
55
Pueblo Viejo
295
Other South America
Boddington
685
685
920
1,045
70
Tanami
500
500
510
705
75
60d
Kalgoorliee275
275
890
1,035
35
Other Australia
5
Ahafo
680
680
590
780
100
70
Akyem420
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
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
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
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
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
)
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
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
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
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
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
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
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 1,24,870
Reclamation Costs 3140
Advanced Project and Exploration 4210
General and Adminstrative 5325
Other Expense15
Treatment and Refining Costs30
Sustaining Capital845
Sustaining Finance Lease Payments 620
All-in Sustaining Costs 86,450
Ounces (000) Sold 106,650
All-in Sustaining Costs per Oz 8$975
665
Reclamation Costs 310
Advanced Project and Exploration 4-
General and Adminstrative 5-
Other Expense-
Treatment and Refining Costs110
Sustaining Capital140
Sustaining Finance Lease Payments 65
All-in Sustaining Costs 8940
Co-Product GEO (000) Sold 10940
All-in Sustaining Costs per Co Product GEO 8$995
Net debt to Pro forma adjusted EBITDA ratio
Management uses net debt to Pro forma Adjusted EBITDA as non-GAAP measures to evaluate the Company’s operating performance, including our ability to generate earnings sufficient to service our debt. Net debt to Pro forma Adjusted EBITDA represents the ratio of the Company’s debt, net of cash and cash equivalents, to Pro forma Adjusted EBITDA. Net debt to Pro forma Adjusted EBITDA does not represent, and should not be considered an alternative to, net income (loss), operating income (loss), or cash flow from operations as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. Although Net Debt to Pro forma Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements by other companies, our calculation of net debt to Pro forma Adjusted EBITDA measure is not necessarily comparable to such other similarly titled captions of other companies. The Company believes that net debt to Pro forma Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. Management’s determination of the components of net debt to Pro forma Adjusted EBITDA is evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to Pro forma Adjusted EBITDA as follows:
Three months ended Three months ended Three months ended Three months ended June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 Net income (loss) attributable to Newmont stockholders$
(25
)
$
87
$
2
$
(145
)
Net income (loss) attributable to noncontrolling interests25
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 charges32
-
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
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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