Newmont Delivers Solid First Quarter 2021 Results

On track to meet full-year guidance with solid first quarter results; Newmont continues to invest in the Company’s future and diverse world-class portfolio

DENVER–(BUSINESS WIRE)–Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the Company) today announced first quarter 2021 results.

FIRST QUARTER 2021 HIGHLIGHTS

  • Produced 1.5 million attributable ounces of gold and 317 thousand attributable gold equivalent ounces from co-products
  • Reported gold CAS* of $752 per ounce and AISC* of $1,039 per ounce
  • Generated $841 million of cash from continuing operations and $442 million of Free Cash Flow (99 percent attributable to Newmont)*
  • Full-year production continues to be back-half weighted, in line with 2021 guidance**
  • Declared first quarter dividend of $0.55 per share, consistent with the previous quarter***
  • Ended the quarter with $5.5 billion of consolidated cash and $8.5 billion of liquidity with a net debt to adjusted EBITDA* ratio of 0.2x
  • Reduced $550 million of debt outstanding with available cash in April 2021
  • Executed $3.0B sustainability-linked revolving credit facility, demonstrating Newmont’s unwavering commitment to industry-leading environmental, social and governance (ESG) practices
  • First production from Boddington Autonomous Haulage System, delivering safety and productivity improvements; leading the way as the industry’s first autonomous haulage fleet
  • Announced acquisition of GT Gold,+ located in the prospective Golden Triangle adding profitable copper and gold exposure to Newmont’s industry-leading project portfolio
  • Continued focus on fatality prevention through global application of critical controls

“In the first quarter we delivered a solid financial performance with $1.5 billion in adjusted EBITDA and $442 million in free cash flow, putting Newmont on track to achieve our full-year guidance with improving production expected in the second half of the year. We remain confident in the strength of our business as we invest in our world-class portfolio, strengthening the balance sheet and sustaining our quarterly dividend of $0.55 per share,” said Tom Palmer, President and Chief Executive Officer. “We remain focused on proactively eliminating risks that could lead to a fatality and continue to lead the industry with our safety and sustainability practices. We believe that strong ESG performance is a key indicator of a well-managed business and we continue to hold ourselves accountable to create value and improve lives through sustainable and responsible mining.”

– Tom Palmer, President and Chief Executive Officer

________________________________________________

*Non-GAAP metrics; see footnotes at the end of this release.
**See cautionary statement at end of release regarding forward-looking statements.

***See the cautionary statement at the end of this release, including with respect to future dividends.

+The GT Gold transaction is expected to close in the second quarter of 2021, subject to meeting normal closing conditions. See the Company’s news release, dated March 10, 2021, for additional information.

FIRST QUARTER 2021 FINANCIAL AND PRODUCTION SUMMARY

 

Q1’21

Q1’20

Q4’20

Attributable gold production (million ounces)

1.46

 

1.48

 

1.63

 

Gold costs applicable to sales (CAS) ($ per ounce)

$

752

 

$

781

 

$

739

 

Gold all-in sustaining costs (AISC) ($ per ounce)

$

1,039

 

$

1,030

 

$

1,043

 

GAAP Net income (US $ millions)

$

538

 

$

837

 

$

806

 

Adjusted net income (US $ millions)

$

594

 

$

326

 

$

856

 

Adjusted EBITDA (US $ millions)

$

1,457

 

$

1,118

 

$

1,772

 

Cash flow from continuing operations (US $ millions)

$

841

 

$

939

 

$

1,686

 

Capital Expenditures (US $ millions)

$

399

 

$

328

 

$

398

 

Free cash flow (US $ millions)

$

442

 

$

611

 

$

1,288

 

Attributable gold production1 was in line compared to the prior year quarter, decreasing 2 percent to 1,455 thousand ounces primarily due to the sale of Red Lake, lower leach pad production and the ramp down of the mill at Yanacocha, lower mill throughput at Nevada Gold Mines, lower ore grade milled at Merian and lower production at Cerro Negro as the site focuses on returning operations to full capacity while managing ongoing Covid-related impacts. These decreases were largely offset by higher ore grade milled at Peñasquito, Musselwhite, Boddington and Akyem.

Gold CAS2 improved 7 percent to $1,065 million from the prior year quarter primarily due to lower ounces sold. Gold CAS per ounce improved 4 percent to $752 per ounce primarily due to higher by-product credits from higher realized metal prices and lower stockpile and leach-pad inventory adjustments, partially offset by higher gold price-driven royalties and lower ounces sold.

Gold AISC3 remained flat compared to the prior year quarter at $1,039 per ounce as higher sustaining capital spend and higher advanced projects spend were largely offset by lower CAS per ounce.

Attributable gold equivalent ounce (GEO) production from other metals decreased 6 percent to 317 thousand ounces primarily due to lower ore grade milled at Peñasquito, partially offset by higher grade and throughput at Boddington.

CAS from other metals totaled $182 million for the quarter. CAS per GEO2 improved 8 percent to $555 per ounce from the prior year quarter primarily due to a lower allocation of costs to other metals and higher sales at Peñasquito, partially offset by unfavorable foreign currency impacts from the strengthening of the Australian dollar and higher copper price-driven royalties at Boddington. AISC per GEO3 improved 5 percent to $819 per ounce primarily due to lower CAS from other metals, partially offset by higher sustaining capital spend.

Net income from continuing operations attributable to Newmont stockholders was $538 million or $0.67 per diluted share, a decrease of $299 million from the prior year quarter primarily due to the recognized gains on the sales of Kalgoorlie, Red Lake and investment holdings in Continental Gold, Inc. (Continental) in the prior year, higher income tax expense and lower sales volumes in the current year. These decreases were partially offset by higher average realized prices in the current year, the impairment charge of TMAC Resources, Inc. (TMAC) in the prior year and charges from debt extinguishment in the prior year.

Adjusted net income4was $594 million or $0.74 per diluted share, compared to $326 million or $0.40 per diluted share in the prior year quarter. Primary adjustments to first quarter net income include changes in the fair value of investments, gains on asset and investment sales, reclamation and remediation charges and valuation allowance and other tax adjustments.

Adjusted EBITDA5 improved 30 percent to $1,457 million for the quarter, compared to $1,118 million for the prior year quarter.

Revenue increased 11 percent from the prior year quarter to $2,872 million primarily due to higher average realized metal prices, partially offset by lower sales volumes.

Average realized price6 for gold was $1,751, an increase of $160 per ounce over the prior year quarter. Average realized gold price includes $1,780 per ounce of gross price received, the unfavorable impact of $20 per ounce mark-to-market on provisionally-priced sales and reductions of $9 per ounce for treatment and refining charges.

Capital expenditures7 increased 22 percent from the prior year quarter to $399 million primarily due to higher sustaining capital spend from Boddington Autonomous Haulage and higher development capital spend. Development capital expenditures in 2021 primarily include advancing Tanami Expansion 2, Yanacocha Sulfides, Cerro Negro expansion projects, Ahafo North, the Subika Mining Method Change, Quecher Main and projects associated with the Company’s ownership interest in Nevada Gold Mines.

Consolidated operating cash flow from continuing operations decreased 10 percent from the prior year quarter to $841 million primarily due to higher tax payments and other net unfavorable working capital movements , partially offset by higher average realized metal prices. Free Cash Flow8also decreased to $442 million primarily due to lower operating cash flow and higher capital expenditures as described above.

Balance sheet ended the quarter with $5.5 billion of consolidated cash and approximately $8.5 billion of liquidity; reported net debt to adjusted EBITDA of 0.2x9.

Nevada Gold Mines (NGM) attributable gold production was 303 thousand ounces with CAS of $745 per ounce and AISC of $868 per ounce for the first quarter. EBITDA10 for NGM was $294 million.

Pueblo Viejo (PV) attributable gold production was 91 thousand ounces for the quarter. Pueblo Viejo EBITDA10 was $117 million and cash distributions received for the Company’s equity method investment totaled $38 million in the first quarter.

COVID-19 UPDATE

Newmont continues to maintain wide-ranging protective measures for its workforce and neighboring communities, including screening, physical distancing, deep cleaning and avoiding exposure for at-risk individuals. The Company incurred incremental Covid specific costs of $22 million during the quarter for activities such as additional health and safety procedures, increased transportation and community fund contributions. During the second quarter of 2020, the Newmont Global Community Support Fund was established to help host communities, governments and employees combat the Covid pandemic. Amounts distributed from this fund were $1 million during the quarter and have been adjusted from certain non-GAAP metrics. The remaining $21 million is not adjusted from our non-GAAP metrics.

We have mobilized a Covid vaccine working group with representatives from across the globe. Newmont views vaccination as critical in the fight against Covid-19 and actively encourages our workforce to get vaccinated as they become eligible. We are working to support authorities, through our Global Community Support Fund, to improve the availability and deployment of vaccines to our workforce and host communities.

PROJECTS UPDATE

Newmont’s capital-efficient project pipeline supports improving production, lowering costs and extending mine life. Funding for the current development capital project Tanami Expansion 2 has been approved and the project is in execution stage. The Company has included the Ahafo North and Yanacocha Sulfides projects in its long-term outlook as the projects are scheduled to be approved for full funding in 2021. Additional sustaining and development projects, not listed below, represent incremental improvements to the Company’s outlook.

  • Tanami Expansion 2 (Australia) secures Tanami’s future as a long-life, low-cost producer with potential to extend mine life beyond 2040 through the addition of a 1,460 meter hoisting shaft and supporting infrastructure to achieve 3.5 million tonnes per year of production and provide a platform for future growth. The expansion is expected to increase average annual gold production by approximately 150,000 to 200,000 ounces per year for the first five years and is expected to reduce operating costs by approximately 10 percent. Capital costs for the project are estimated to be between $850 million and $950 million with a commercial production date in the first half of 2024.
  • Ahafo North (Africa) expands our existing footprint in Ghana with four open pit mines and a stand-alone mill located approximately 30 kilometers from the Company’s Ahafo South operations. An investment decision is expected in July 2021 and the project is expected to add 300,000 ounces per year with all-in sustaining costs between $600 to $700 per ounce for the first five full years of production (2024-2028), with estimated capital costs of between $700 and $800 million. Ahafo North is the best unmined gold deposit in West Africa with approximately 3.5 million ounces of Reserves and more than 1 million ounces of Measured and Indicated and Inferred Resource11 and significant upside potential to extend beyond Ahafo North’s current 13-year mine life.
  • Yanacocha Sulfides (South America)12 will develop the first phase of sulfide deposits and an integrated processing circuit, including an autoclave to process gold, copper and silver feedstock. The project is expected to add 500,000 gold equivalent ounces per year with all-in sustaining costs between $700 to $800 per ounce for the first five full years of production (2026-2030). An investment decision is expected in the second half of 2021 with a three year development period and estimated capital costs of approximately $2 billion. The first phase focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend Yanacocha’s operations beyond 2040 with second and third phases having the potential to extend life for multiple decades.

________________________________________________

1 Attributable gold production for the first quarter 2021 includes 91 thousand ounces from the Company’s equity method investment in Pueblo Viejo (40%).

2 Non-GAAP measure. See end of this release for reconciliation to Costs applicable to sales.

3 Non-GAAP measure. See end of this release for reconciliation to Costs applicable to sales.

4 Non-GAAP measure. See end of this release for reconciliation to Net income (loss) attributable to Newmont stockholders.

5 Non-GAAP measure. See end of this release for reconciliation to Net income (loss) attributable to Newmont stockholders.

6 Non-GAAP measure. See end of this release for reconciliation to Sales.

7 Capital expenditures refers to Additions to property plant and mine development from the Condensed Consolidated Statements of Cash Flows.

8 Non-GAAP measure. See end of this release for reconciliation to Net cash provided by operating activities.

9 Non-GAAP measure. See end of this release for reconciliation.

10 Non-GAAP measure. See end of this release for reconciliation.

11 See note to U.S. Investors at the end of this release; such resource estimate for Ahafo North is comprised of 610,000 ounces of Measured and Indicated Resource and 410,000 ounces of Inferred Resource as at December 31, 2020.

12 Consolidated basis.

OUTLOOK

Newmont’s outlook reflects increasing gold production and ongoing investment in its operating assets and most promising growth prospects. The Company has included Ahafo North and Yanacocha Sulfides in its outlook as the development projects are expected to reach execution stage in 2021. Additional development projects that have not reached execution stage represent upside to guidance. All production, cost and capital figures assume a $1,200/oz gold price.

Newmont’s 2021 and longer-term outlook assumes operations continue without major Covid-related interruptions. If at any point the Company determines that continuing operations poses an increased risk to our workforce or host communities, it will reduce operational activities up to, and including, care and maintenance and management of critical environmental systems. Please see cautionary statement in the end notes for additional information.

For a more detailed discussion, see the Company’s 2021 and Longer-Term Outlook released on December 8, 2020, available on www.newmont.com.

Five Year Cost and Production Outlook (+/- 5%)

Guidance metric

2021E

2022E

2023E

2024E

2025E

Gold Production* (Moz)

6.5

6.2 – 6.7

6.2 – 6.7

6.5 – 7.0

6.5 – 7.0

Other Metal Production** (Mozs)

1.3

1.2 – 1.4

1.4 – 1.6

1.4 – 1.6

1.4 – 1.6

Total GEO Production (Mozs)

7.8

7.5 – 8.0

7.7 – 8.2

8.0 – 8.5

8.0 – 8.5

CAS*** ($/oz)

$750

$650 – $750

$625 – $725

$600 – $700

$600 – $700

All-in Sustaining Costs*** ($/oz)

$970

$850 – $950

$825 – $925

$800 – $900

$800 – $900

Sustaining Capital* ($M)

$950

$900 – $1,100

$900 – $1,100

$900 – $1,100

$900 – $1,100

Development Capital* ($M)

$850

$1,000 – $1,200

$900 – $1,100

$200 – $400

$100 – $300

Total Capital* ($M)

$1,800

$2,000 – $2,200

$1,900 – $2,100

$1,200 – $1,400

$1,100 – $1,300

*Attributable basis; **Attributable co-product gold equivalent ounces; includes copper, zinc, silver and lead; ***Consolidated basis for gold

2021 Regional Outlooka

2021 Outlook (+/-5%)

Consolidated Production (Koz, GEOs Koz)

Attributable Production (Koz, GEOs Koz)

Consolidated CAS ($/oz)

Consolidated All-In Sustaining Costs b ($/oz)

Consolidated Sustaining Capital Expenditures ($M)

Consolidated Development Capital Expenditures ($M)

Attributable Sustaining Capital Expenditures ($M)

Attributable Development Capital Expenditures ($M)

North America

1,760

 

1,760

 

730

 

915

 

300

 

25

 

300

 

25

 

South America

1,000

 

1,075

 

850

 

1,035

 

125

 

200

 

100

 

150

 

Australia

1,330

 

1,330

 

650

 

860

 

235

 

400

 

235

 

400

 

Africa

915

 

915

 

715

 

900

 

115

 

160

 

115

 

160

 

Nevada Gold Minesc

1,370

 

1,370

 

760

 

960

 

210

 

130

 

210

 

130

 

Total Gold

6,400

 

6,500d

 

750

 

970

 

1,000e

 

900

 

950e

 

850

 

 

 

 

 

 

 

 

 

 

Total Co-productsf

1,300

 

1,300

 

600

 

880

 

 

 

 

 

2021 Consolidated Expense Outlook ($M) (+/-5%)

General & Administrative

260

Interest Expense

275

Depreciation and Amortization

2,500

Exploration & Advanced Projects

390

Adjusted Tax Rate g,h

34%-38%

Federal Tax Rate h

27%-30%

Mining Tax Rate h

6%-9%

a 2021 regional 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 8, 2020. Outlook is based upon certain assumptions, including, but not limited to, metal prices, oil prices, certain exchange rates and other assumptions. For example, 2021 Outlook assumes $1,200/oz Au, $22/oz Ag, $2.75/lb Cu, $1.05/lb Zn, $0.90/lb Pb, $0.75 USD/AUD exchange rate, $0.77 USD/CAD exchange rate and $50/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, except for Ahafo North and Yanacocha Sulfides which are included in Outlook as the development projects are expected to reach execution stage in 2021. The potential impact on inventory valuation as a result of lower prices, input costs, and project decisions are not included as part of this Outlook. Assumptions used for purposes of Outlook may prove to be incorrect and actual results may differ from those anticipated, including variation beyond a +/-5% range. Outlook cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon Outlook and forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur. Amounts may not recalculate to totals due to rounding. See cautionary at the end of this release.

b All-in sustaining costs or AISC as used in the Company’s Outlook is a non-GAAP metric; see below for further information and reconciliation to consolidated 2021 CAS outlook.

c Represents the ownership interest in the Nevada Gold Mines (NGM) joint venture. NGM is owned 38.5% by Newmont and owned 61.5% and operated by Barrick. The Company accounts for its interest in NGM using the proportionate consolidation method, thereby recognizing its pro-rata share of the assets, liabilities and operations of NGM. Production, CAS and AISC for the Company’s 38.5% ownership interest in NGM as provided by Barrick Gold Corporation based on a $1,200/oz gold price assumption.

d Attributable gold production outlook includes the Company’s equity investment (40%) in Pueblo Viejo with ~325Koz in 2021; does not include the Company’s other equity investments. Attributable gold production outlook represents the Company’s 51.35% interest for Yanacocha and a 75% interest for Merian.

e Total sustaining capital includes ~$20 million of corporate and other spend.

f 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 ($22/oz.), Lead ($0.90/lb.), and Zinc ($1.05/lb.) pricing.

g The adjusted tax rate excludes certain items such as tax valuation allowance adjustments.

h Assuming average prices of $1,500 per ounce for gold, $22 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 2021 will be between 34%-38%.

 

Three Months Ended March 31,

Operating Results

2021

2020

% Change

Attributable Sales (koz)

 

 

 

Attributable gold ounces sold (1)

1,361

 

1,369

 

(1

)%

Attributable gold equivalent ounces sold

327

 

319

 

3

%

 

 

 

 

Average Realized Price ($/oz, $/lb)

 

 

 

Average realized gold price

$

1,751

 

$

1,591

 

10

%

Average realized copper price

$

4.20

 

$

1.56

 

169

%

Average realized silver price

$

19.73

 

$

14.13

 

40

%

Average realized lead price

$

0.88

 

$

0.64

 

38

%

Average realized zinc price

$

1.06

 

$

0.62

 

71

%

 

 

 

 

Attributable Production (koz)

 

 

 

North America

413

 

376

 

10

%

South America

174

 

235

 

(26

)%

Australia

269

 

258

 

4

%

Africa

205

 

186

 

10

%

Nevada

303

 

329

 

(8

)%

Total Gold (excluding equity method investments)

1,364

 

1,384

 

(1

)%

Pueblo Viejo (40%) (2)

91

 

95

 

(4

)%

Total Gold

1,455

 

1,479

 

(2

)%

 

 

 

 

North America

285

 

310

 

(8

)%

Australia

32

 

29

 

10

%

Total Gold Equivalent Ounces

317

 

339

 

(6

)%

 

 

 

 

CAS Consolidated ($/oz, $/GEO)

 

 

 

North America

$

736

 

$

863

 

(15

)%

South America

$

791

 

$

806

 

(2

)%

Australia

$

750

 

$

730

 

3

%

Africa

$

758

 

$

737

 

3

%

Nevada

$

745

 

$

733

 

2

%

Total Gold

$

752

 

$

781

 

(4

)%

Total Gold (by-product)

$

605

 

$

734

 

(18

)%

 

 

 

 

North America

$

518

 

$

580

 

(11

)%

Australia

$

935

 

$

813

 

15

%

Total Gold Equivalent Ounces

$

555

 

$

602

 

(8

)%

 

 

 

 

AISC Consolidated ($/oz, $/GEO)

 

 

 

North America

$

957

 

$

1,067

 

(10

)%

South America

$

1,063

 

$

997

 

7

%

Australia

$

1,104

 

$

949

 

16

%

Africa

$

950

 

$

930

 

2

%

Nevada

$

868

 

$

927

 

(6

)%

Total Gold

$

1,039

 

$

1,030

 

1

%

Total Gold (by-product)

$

953

 

$

1,040

 

(8

)%

 

 

 

 

North America

$

763

 

$

841

 

(9

)%

Australia

$

1,404

 

$

1,035

 

36

%

Total Gold Equivalent Ounces

$

819

 

$

860

 

(5

)%

(1)

Attributable gold ounces from the Pueblo Viejo mine, an equity method investment, are not included in attributable gold ounces sold.

(2)

Represents attributable gold from Pueblo Viejo and does not include the Company’s other equity method investments. Attributable gold ounces produced at Pueblo Viejo are

not included in attributable gold ounces sold, as noted in footnote 1. Income and expenses of equity method investments are included in Equity income (loss) of affiliates.

 

NEWMONT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions except per share)

 

 

 

Three Months Ended March 31,

 

2021

 

 

2020

 

 

 

 

 

Sales

$

2,872

 

 

 

$

2,581

 

 

 

 

 

 

Costs and expenses

 

 

 

Costs applicable to sales (1)

1,247

 

 

 

1,332

 

 

Depreciation and amortization

553

 

 

 

565

 

 

Reclamation and remediation

46

 

 

 

38

 

 

Exploration

35

 

 

 

44

 

 

Advanced projects, research and development

31

 

 

 

27

 

 

General and administrative

65

 

 

 

65

 

 

Other expense, net

39

 

 

 

53

 

 

 

2,016

 

 

 

2,124

 

 

Other income (expense):

 

 

 

Gain on asset and investment sales, net

43

 

 

 

593

 

 

Other income, net

(82

)

 

 

(189

)

 

Interest expense, net of capitalized interest

(74

)

 

 

(82

)

 

 

(113

)

 

 

322

 

 

Income (loss) before income and mining tax and other items

743

 

 

 

779

 

 

Income and mining tax benefit (expense)

(235

)

 

 

23

 

 

Equity income (loss) of affiliates

50

 

 

 

37

 

 

Net income (loss) from continuing operations

558

 

 

 

839

 

 

Net income (loss) from discontinued operations

21

 

 

 

(15

)

 

Net income (loss)

579

 

 

 

824

 

 

Net loss (income) attributable to noncontrolling interests

(20

)

 

 

(2

)

 

Net income (loss) attributable to Newmont stockholders

$

559

 

 

 

$

822

 

 

 

 

 

 

Net income (loss) attributable to Newmont stockholders:

 

 

 

Continuing operations

$

538

 

 

 

$

837

 

 

Discontinued operations

21

 

 

 

(15

)

 

 

$

559

 

 

 

$

822

 

 

Net income (loss) per common share

 

 

 

Basic:

 

 

 

Continuing operations

$

0.67

 

 

 

$

1.04

 

 

Discontinued operations

0.03

 

 

 

(0.02

)

 

 

$

0.70

 

 

 

$

1.02

 

 

Diluted:

 

 

 

Continuing operations

$

0.67

 

 

 

$

1.04

 

 

Discontinued operations

0.03

 

 

 

(0.02

)

 

 

$

0.70

 

 

 

$

1.02

 

 

Contacts

Media Contact
Courtney Boone

303.837.5159

courtney.boone@newmont.com

Investor Contact
Eric Colby

303.837.5724

eric.colby@newmont.com

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Author: dmnnewswire