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Newmont Announces Third Quarter 2021 Results

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Newmont Announces Third Quarter Results and Delivers the Gold Industry's First Autonomous Haulage System Fleet; Updates Full-year Guidance

DENVER, October 28, 2021--(BUSINESS WIRE)--Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the Company) today announced third quarter 2021 results.

THIRD QUARTER 2021 HIGHLIGHTS

  • Produced 1.45 million attributable ounces of gold and 315 thousand attributable gold equivalent ounces from co-products

  • Reported gold CAS* of $830 per ounce and AISC* of $1,120 per ounce

  • Updated full-year guidance of 6.0 million ounces of attributable gold production, $790 per ounce of CAS and $1,050 per ounce of AISC**, reaffirming original guidance of 1.3 million gold equivalent ounces from copper, silver, lead and zinc

  • Generated $1.1 billion of cash from continuing operations and $735 million of Free Cash Flow (97 percent attributable to Newmont)*

  • Declared third quarter dividend of $0.55 per share, consistent with the previous quarter***

  • Completed $99 million of share repurchases from $1 billion buyback program***

  • Ended the quarter with $4.6 billion of consolidated cash and $7.6 billion of liquidity with a net debt to adjusted EBITDA* ratio of 0.2x

  • Delivered the gold industry’s first Autonomous Haulage System (AHS) fleet, improving safety and long-term productivity at Boddington

  • Advancing near-term projects, including Tanami Expansion 2, Ahafo North and the mining method change at Subika Underground

  • Progressing Yanacocha Sulfides, investing at least $500M through 2022 with a full funds decision expected in the second half of 2022

"Newmont delivered on a challenging third quarter performance with $1.3 billion in adjusted EBITDA and $735 million in free cash flow, building momentum for a strong fourth quarter," said Tom Palmer, Newmont President and Chief Executive Officer. "Supported by our clear strategic focus and proven operating model, we continue to apply our disciplined approach to capital allocation. A year ago, we announced our industry-leading dividend framework, establishing a clear pathway for stable and predictable returns. Over the last four quarters, Newmont has steadily reinvested in our operations while returning more than $2 billion dollars to shareholders through dividends and share buybacks, demonstrating our confidence in the long-term value of our business and our ability to maintain financial flexibility."

- Tom Palmer, Newmont President and Chief Executive Officer

___________________________

*

Non-GAAP metrics; see footnotes at the end of this release.

**

See discussion of outlook and cautionary statement at end of release regarding forward-looking statements.

***

See cautionary statement and endnotes at the end of this release, including with respect to future dividends and share buybacks. Note that the buyback figure above excludes $15 million disclosed in Q2 2021 settled after June 30, 2021.

THIRD QUARTER 2021 FINANCIAL AND PRODUCTION SUMMARY

Q3'21

Q2'21

Q1'21

Q3'20

Attributable gold production (million ounces)

1.45

1.45

1.46

1.54

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

$

830

$

755

$

752

$

756

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

$

1,120

$

1,035

$

1,039

$

1,020

GAAP net income (loss) (US $ millions)

$

(8

)

$

640

$

538

$

611

Adjusted net income (US $ millions)

$

483

$

670

$

594

$

697

Adjusted EBITDA (US $ millions)

$

1,316

$

1,591

$

1,457

$

1,663

Cash flow from continuing operations (US $ millions)

$

1,133

$

993

$

841

$

1,597

Capital expenditures (US $ millions)

$

398

$

415

$

399

$

296

Free cash flow (US $ millions)

$

735

$

578

$

442

$

1,301

Attributable gold production1 decreased 6 percent to 1,449 thousand ounces from the prior year quarter primarily due to lower throughput at Nevada Gold Mines as a result of a mechanical failure in May 2021 which resulted in a partial shutdown of the Goldstrike mill at Carlin until it was fully repaired in September 2021, lower leach production, mill recovery and ore grade milled at CC&V, lower throughput at Tanami as the mine was placed under care and maintenance in July 2021 and lower throughput, grade milled and recovery at Boddington. These decreases were partially offset by higher throughput at Cerro Negro due to reduced operations in the prior year quarter in response to Covid.

Gold CAS increased 4 percent to $1,175 million from the prior year quarter. Gold CAS per ounce2 increased 10 percent to $830 per ounce from the prior year quarter primarily due to lower gold ounces sold, higher diesel costs, an unfavorable Australian dollar foreign currency exchange rate and higher royalty payments at Akyem and Nevada Gold Mines. These increases were partially offset by a build of inventory.

Gold AISC3 increased 10 percent to $1,120 per ounce from the prior year quarter primarily due to higher CAS per ounce and higher sustaining capital spend. These increases were partially offset by lower treatment and refining costs.

Attributable gold equivalent ounce (GEO) production from other metals increased 15 percent to 315 thousand ounces primarily due to higher throughput and recoveries at Peñasquito.

CAS from other metals totaled $192 million for the quarter. CAS per GEO2 increased 15 percent to $638 per ounce from the prior year quarter primarily due to higher allocation of costs to other metals and higher concentrate selling expenses at Peñasquito and Boddington. These increases were partially offset by higher gold equivalent ounces sold. AISC per GEO3 increased 15 percent to $887 per ounce primarily due to higher CAS per GEO and higher sustaining capital spend.

Net loss from continuing operations attributable to Newmont stockholders was $(8) million or $(0.01) per diluted share, a decrease of $619 million from the prior year quarter primarily due to the loss recognized on the pending sale of the Conga mill assets of $571 million, lower average realized gold prices, lower gold sales volumes, unrealized losses on marketable and other equity securities, higher CAS and higher reclamation and remediation charges. These decreases were partially offset by lower income tax expense and lower impairment of long-lived assets.

Adjusted net income4 was $483 million or $0.60 per diluted share, compared to $697 million or $0.86 per diluted share in the prior year quarter. Primary adjustments to third quarter net income include the loss recognized on the pending sale of the Conga mill assets, changes in the fair value of investments, reclamation and remediation charges and valuation allowance and other tax adjustments.

Adjusted EBITDA5 decreased 21 percent to $1,316 million for the quarter, compared to $1,663 million for the prior year quarter.

Revenue decreased 9 percent from the prior year quarter to $2,895 million primarily due to lower average realized gold prices and lower gold sales volumes.

Average realized price6 for gold was $1,778, a decrease of $135 per ounce over the prior year quarter. Average realized gold price includes $1,784 per ounce of gross price received, the favorable impact of $4 per ounce mark-to-market on provisionally-priced sales and reductions of $10 per ounce for treatment and refining charges.

Capital expenditures7 increased 34 percent from the prior year quarter to $398 million primarily due to higher sustaining capital spend from sites that were placed into care and maintenance in response to Covid during 2020 and higher development capital spend. Development capital expenditures in 2021 primarily include advancing Tanami Expansion 2, Yanacocha Sulfides, Ahafo North, the Subika Mining Method Change, Cerro Negro expansion projects, Quecher Main, Pamour, the Power Generation Civil Upgrade, Goldrush Complex and Turquoise Ridge 3rd shaft.

Consolidated operating cash flow from continuing operations decreased 29 percent from the prior year quarter to $1,133 million primarily due to lower average realized gold prices and lower gold sales volumes, an increase in tax payments and an increase in prepaid assets. Free Cash Flow8 also decreased to $735 million primarily due to lower operating cash flow and higher capital expenditures as described above.

Balance sheet and liquidity ended the quarter with $4.6 billion of consolidated cash and approximately $7.6 billion of liquidity; reported net debt to adjusted EBITDA of 0.2x9.

Nevada Gold Mines (NGM) attributable gold production was 308 thousand ounces with CAS of $768 per ounce and AISC of $945 per ounce for the third quarter. EBITDA10 for NGM was $293 million.

Pueblo Viejo (PV) attributable gold production was 85 thousand ounces for the quarter. Pueblo Viejo EBITDA10 was $108 million and cash distributions received for the Company's equity method investment totaled $69 million in the third quarter.

COVID 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 $24 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 $23 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 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 projects Tanami Expansion 2 and Ahafo North has been approved and these projects are in the execution stage. The Company has included the Yanacocha Sulfides project in its long-term outlook as the project is currently scheduled to be approved for full funding in the second half of 2022. Additional 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. The project is expected to add between 275,000 and 325,000 ounces per year with all-in sustaining costs between $600 to $700 per ounce for the first five full years of production (2024-2028). Capital costs for the project are estimated to be between $750 and $850 million with a construction completion date in the second half of 2023 and commercial production in early 2024. 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. An investment decision is expected in the second half of 2022 with a three year development period. 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 third quarter 2021 includes 85 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.

UPDATED OUTLOOK

Newmont is providing an updated 2021 outlook due to the continued impact from Covid and other challenges experienced in the year. Further updates about Newmont's long-term guidance will be provided in December 2021. Please see the cautionary statement in the end notes for additional information. For further discussion, investors are encouraged to attend Newmont’s Third Quarter 2021 Earnings Conference Call.

Newmont's updated 2021 outlook includes approximately 6.0 million ounces of attributable gold production and approximately 1.3 million gold equivalent ounces from copper, silver, lead and zinc. The revised outlook for attributable gold production includes adjustments for operational challenges at Boddington and Nevada Gold Mines, as well as the continued impact from the global pandemic, primarily in Canada and Australia.

Boddington experienced challenges from severe weather, shovel reliability, operational delays associated with managing bench hygiene and the continued ramp-up of AHS to full productivity. As a result, Boddington delivered lower ex-pit tons than expected, with full-year 2021 gold production anticipated to be approximately 140 thousand ounces below original guidance estimates. Nevada Gold Mines is also experiencing challenges. Carlin and Cortez are expected to be at the low end of their annual guidance ranges, and Turquoise Ridge is expected to be below its annual guidance range. Additionally, the global pandemic has continued to impact many of our operations. Tanami was placed under care and maintenance in late-June and July as a result of Covid restrictions, reducing the site’s full-year production by approximately 40 thousand ounces. In addition, Newmont continues to experience lower productivity as a result of Covid-related absenteeism and a tightening of the labor market in Canada. We expect these sites to be at the low end or below their annual production guidance ranges.

Updated 2021 Costs applicable to sales (CAS) outlook are expected to be $790 per ounce and All-in sustaining costs (AISC) are expected to be $1,050 per ounce. The revised outlook includes the impact from lower production volumes and higher royalties and production taxes at higher gold prices.

Updated 2021 attributable development capital expenditures are expected to be approximately $700 million. The revised outlook includes a decrease of $150 million largely due to deferred spending associated with advancing Tanami Expansion 2.

Newmont 2021 Outlook a

Updated

(as of Oct. 28, 2021)

Previous (+/-5%)

(as of Dec. 8, 2020)

Gold Price Assumption ($/oz)

$1,800

$1,200

Consolidated Gold Production (Moz)

5.9

6.4

Attributable Gold Production (Moz) b

6.0

6.5

Consolidated Gold CAS ($/oz)

790

750

Consolidated Gold All-in Sustaining Costs ($/oz) c

1,050

970

Consolidated Co-Product GEO Production (Moz) d

1.3

1.3

Attributable Co-Product GEO Production (Moz) d

1.3

1.3

Consolidated GEO CAS ($/oz) d

600

600

Consolidated GEO All-in Sustaining Costs ($/oz) c,d

880

880

Consolidated Sustaining Capital Expenditures ($M)

1,000

1,000

Consolidated Development Capital Expenditures ($M)

750

900

Attributable Sustaining Capital Expenditures ($M)

950

950

Attributable Development Capital Expenditures ($M)

700

850

General & Administrative ($M)

260

260

Interest Expense ($M)

275

275

Depreciation and Amortization ($M)

2,350

2,500

Exploration & Advanced Projects ($M)

390

390

Adjusted Tax Rate e

34% - 38%

34% - 38%

Federal Tax Rate

27% - 30%

27% - 30%

Mining Tax Rate

6% - 9%

6% - 9%

a

2021 outlook projections used in this presentation are considered forward-looking statements and represent management’s good faith estimates or expectations of future production results as of October 28, 2021. 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 includes actual results through September 30, 2021 and assumes $1,800/oz Au, $25/oz Ag, $4.00/lb Cu, $1.20/lb Zn, $0.95/lb Pb, $0.75 USD/AUD exchange rate, $0.78 USD/CAD exchange rate and $65/barrel WTI for the fourth quarter of 2021. Production, CAS, AISC and capital estimates exclude projects that have not yet been approved, except for Yanacocha Sulfides which is included in Outlook as the development project is expected to reach execution stage in the second half of 2022. 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. 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

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.

c

All-in sustaining costs (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.

d

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 ($22.00/oz.), Lead ($0.90/lb.), and Zinc ($1.05/lb.) pricing.

e

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

Three Months Ended September 30,

Nine Months Ended September 30,

Operating Results

2021

2020

% Change

2021

2020

% Change

Attributable Sales (koz)

Attributable gold ounces sold (1)

1,357

1,429

(5

)%

4,101

3,996

3

%

Attributable gold equivalent ounces sold

301

248

21

%

930

780

19

%

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

Average realized gold price

$

1,778

$

1,913

(7

)%

$

1,783

$

1,745

2

%

Average realized copper price

$

3.99

$

2.99

33

%

$

4.19

$

2.49

68

%

Average realized silver price

$

18.34

$

21.69

(15

)%

$

20.32

$

16.66

22

%

Average realized lead price

$

0.99

$

0.73

36

%

$

0.96

$

0.69

39

%

Average realized zinc price

$

1.24

$

1.01

23

%

$

1.21

$

0.77

57

%

Attributable Production (koz)

North America

384

414

(7

)%

1,194

1,022

17

%

South America

188

165

14

%

551

536

3

%

Australia

274

309

(11

)%

842

861

(2

)%

Africa

210

229

(8

)%

617

608

1

%

Nevada

308

337

(9

)%

895

992

(10

)%

Total Gold (excluding equity method investments)

1,364

1,454

(6

)%

4,099

4,019

2

%

Pueblo Viejo (40%) (2)

85

87

(2

)%

254

256

(1

)%

Total Gold

1,449

1,541

(6

)%

4,353

4,275

2

%

North America

275

238

16

%

820

656

25

%

Australia

40

35

14

%

115

94

22

%

Total Gold Equivalent Ounces

315

273

15

%

935

750

25

%

CAS Consolidated ($/oz, $/GEO)

North America

$

800

$

762

5

%

$

767

$

792

(3

)%

South America

$

958

$

885

8

%

$

822

$

824

%

Australia

$

788

$

690

14

%

$

767

$

712

8

%

Africa

$

886

$

693

28

%

$

804

$

707

14

%

Nevada

$

768

$

761

1

%

$

755

$

764

(1

)%

Total Gold

$

830

$

756

10

%

$

779

$

762

2

%

Total Gold (by-product)

$

698

$

641

9

%

$

629

$

686

(8

)%

North America

$

595

$

513

16

%

$

564

$

539

5

%

Australia

$

914

$

840

9

%

$

913

$

842

8

%

Total Gold Equivalent Ounces

$

638

$

556

15

%

$

606

$

575

5

%

AISC Consolidated ($/oz, $/GEO)

North America

$

1,026

$

1,003

2

%

$

988

$

1,066

(7

)%

South America

$

1,276

$

1,162

10

%

$

1,119

$

1,111

1

%

Australia

$

1,025

$

889

15

%

$

1,040

$

914

14

%

Africa

$

1,114

$

865

29

%

$

1,023

$

889

15

%

Nevada

$

945

$

904

5

%

$

931

$

936

(1

)%

Total Gold

$

1,120

$

1,020

10

%

$

1,064

$

1,046

2

%

Total Gold (by-product)

$

1,041

$

940

11

%

$

970

$

1,024

(5

)%

North America

$

822

$

735

12

%

$

781

$

840

(7

)%

Australia

$

1,025

$

998

3

%

$

1,155

$

1,032

12

%

Total Gold Equivalent Ounces

$

887

$

770

15

%

$

863

$

862

%

(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 September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Sales

$

2,895

$

3,170

$

8,832

$

8,116

Costs and expenses

Costs applicable to sales (1)

1,367

1,269

3,895

3,659

Depreciation and amortization

570

592

1,684

1,685

Reclamation and remediation

117

38

220

116

Exploration

60

48

147

118

Advanced projects, research and development

40

39

108

92

General and administrative

61

68

190

205

Care and maintenance

6

26

8

171

Loss on assets held for sale

571

571

Other expense, net

37

92

126

184

2,829

2,172

6,949

6,230

Other income (expense):

Gain on asset and investment sales, net

3

1

46

593

Other income (loss), net

(74

)

(44

)

(106

)

(35

)

Interest expense, net of capitalized interest

(66

)

(75

)

(208

)

(235

)

(137

)

(118

)

(268

)

323

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

(71

)

880

1,615

2,209

Income and mining tax benefit (expense)

(222

)

(305

)

(798

)

(446

)

Equity income (loss) of affiliates

39

53

138

119

Net income (loss) from continuing operations

(254

)

628

955

1,882

Net income (loss) from discontinued operations

11

228

42

145

Net income (loss)

(243

)

856

997

2,027

Net loss (income) attributable to noncontrolling interests

246

...