Newmont Mining 2018 financial results
Full Year 2018 Summary
- Net income: Delivered GAAP net income from continuing operations attributable to stockholders of $280 million or $0.53 per diluted share; delivered adjusted net income1 of $718 million or $1.34 per diluted share,down $0.11 compared to the prior year
- EBITDA: Generated $2.6 billion in adjusted EBITDA2, a decrease of two percent from the prior year
- Cash flow: Reported consolidated cash flow from continuing operations of $1.8 billion and free cash flow3 of $805 million
- Gold costs applicable to sales (CAS) 4:Reported CAS of $708 per ounce, in line with the Company's full year guidance
- Gold all-in sustaining costs (AISC) 5:Reported AISC of $909 per ounce, beating the Company's full year guidance
- Attributable gold production: Produced 5.1 million ounces of gold, in line with the Company's full year guidance
- Portfolio improvements: Advanced Tanami Expansion 2 to definitive feasibility study and progressed the Tanami Power Project in Australia; completed the Cripple Creek & Victor (CC&V) concentrates project, reached commercial production at Twin Underground and Northwest Exodus, acquired 50 percent interest in Galore Creek, and progressed Long Canyon Phase 2 to feasibility study in North America; reached commercial production at Subika Underground, progressed the Ahafo Mill Expansion, and advanced Akyem Underground to prefeasibility study in Africa; reached first gold at Quecher Main, advanced Yanacocha Sulfides to definitive feasibility study, and completed the primary crusher at Merian in South America; divested royalty portfolio to Maverix Metals and formed strategic partnerships with Teck Resources Limited, Sumitomo Corporation, Evrim Resources, Miranda Gold and Orosur Mining.
- Financial strength: Ended the year with $3.4 billion cash on hand and net debt of $0.9 billion; an industry-leading balance sheet with investment-grade credit profile; declared dividends of $0.56 per share
- Outlook: Attributable production at 5.2 million ounces, CAS at $710 per ounce and AISC at $935 per ounce, unchanged from December 2018
"Newmont continued to deliver on its commitments in 2018, generating $2.6 billion in adjusted EBITDA and $805 million in free cash flow, and returning $400 million to shareholders through an industry-leading dividend and share repurchases," said Gary J. Goldberg, Chief Executive Officer. "This performance gave us the means to complete expansions in the US and Africa, advance projects and exploration on four continents, and pursue an agreement to create the world's leading gold business as measured by assets, people, prospects and value. Strong operational execution - including more than $600 million in Full Potential sustainable cost and efficiency gains and recognition for leading sustainability practices - was overshadowed, however, by the loss of seven colleagues during the year."
Fourth Quarter 2018 Summary
- Net loss: Delivered GAAP net loss from continuing operations attributable to stockholders of $(3) million or $0.00 per diluted share; delivered adjusted net income of $214 million or $0.40 per diluted share,up $0.01 compared to the prior year quarter
- EBITDA: Generated $759 million in adjusted EBITDA, up five percent from the prior year quarter
- Cash flow: Reported consolidated cash flow from continuing operations of $742 million and free cash flow of $473 million
- Gold CAS:Reported CAS decreased five percent to $658 per ounce from the prior year quarter
- Gold AISC: Reported AISCdecreased nine percent to $845 per ounce from the prior year quarter
- Attributable gold production: Produced 1.44 million ounces of gold, an increase of eight percent from the prior year quarter
Full Year and Fourth Quarter 2018 Results
Net income (loss) from continuing operations attributable to Newmont stockholders for the full year was $280 million or $0.53 per diluted share, up $356 million from the prior year, primarily due to lower income tax expense and a gain from the sale of our royalty portfolio in June 2018, partially offset by increased impairments of exploration and long-lived assets in North America and lower production at various sites. Net loss from continuing operations attributable to Newmont stockholders for the quarter was $(3) million or $0.00 per diluted share, an increase of $546 million from the prior year quarter, primarily due to lower income tax expense.
Adjusted net income was $718 million or $1.34 per diluted share for the full year, compared to $774 million or $1.45 per diluted share from the prior year. Adjusted net income for the quarter was $214 million or $0.40 per diluted share,compared to $206 million or $0.39 per diluted share in the prior year quarter. The primary adjustments to fourth quarter net income include $0.23 per diluted share related to net tax adjustments and valuation allowances and $0.07 per diluted share related to the impairment of an equity and cost method investments.
Revenue for the full yeardecreased two percent to $7,253 million primarily due to lower production at various sites. Fourth quarter revenue rose six percent to $2,048 million primarily due to higher gold production at various sites, partially offset by lower average realized metal prices.
Average realized price 6 for gold was in line for the full year at $1,260 per ounce and three percent lower for the quarter at $1,233 per ounce, compared to the prior year. The average realized price for copper for the full year was three percent lower at $2.74 per pound and was 18 percent lower for the quarter at $2.62 per pound.
Gold CAS rose two percent to $708 per ounce for the full year, primarily due to lower ounces sold, higher stockpile and leach pad inventory adjustments, and higher oil prices. Gold CAS decreased five percent to $658 per ounce for the quarter due to higher ounces sold at Ahafo and lower power costs in Africa.
Gold AISC rose two percent to $909 per ounce for the full year, primarily due to higher CAS per ounce. Gold AISC decreased nine percent to $845 per ounce for the quarter, primarily due to higher ounces sold and lower sustaining capital spend.
Attributable gold production decreased three percent to 5.10 million ounces for the full year primarily due to lower grades at various sites and lower leach tons placed at Carlin, Phoenix, CC&V and Yanacocha, partially offset by higher grades and recovery at Tanami and Ahafo. Production for the fourth quarter rose eight percent to 1.44 million ounces primarily due to higher grades and recovery at CC&V and Ahafo, partially offset by lower grades at KCGM.
Attributable copper production decreased four percent to 49,000 tonnes for the full year, primarily due to lower grades at Phoenix and Boddington. For the quarter, production was in line at 11,000 tonnes.
Copper CAS increased 15 percent to $1.69 per pound for the full year and 10 percent to $1.78 per pound for the quarter, primarily due to lower production, higher strip ratio, and higher oil prices at Boddington.
Copper AISC increased 12 percent to $2.02 for the full year, primarily due to higher CAS per ounce. For the quarter, AISC was in line at $2.09.
Capital expenditures 7 increased by 19 percent to $1,032 million for the full year with increased investment in Quecher Main, Subika Underground, the Ahafo Mill expansion, and Ahafo North. For the quarter, capital expenditures decreased by 13 percent to $269 million, primarily due to the completion of Subika Underground.
Consolidated operating cash flow from continuing operations decreased 14 percent to $1,837 million for the full year, primarily due to lower sales volumes and unfavorable changes in working capital, partially offset by lower interest and higher realized gold prices. Operating cash flow for the quarter was in line at $742 million. Free cash flow decreased 37 percent to $805 million for the full year due to unfavorable working capital changes and higher capital expenditures on development projects primarily at Yanacocha and Ahafo. Free cash flow increased eight percent to $473 million for the quarter, primarily due to the completion of underground development projects in North America in the second quarter and Africa during the fourth quarter.
Balance sheet ended the quarter with $3.4 billion cash on hand, a leverage ratio of 0.3x net debt to adjusted EBITDA and one of the strongest balance sheets in the mining sector. The Company is committed to maintaining an investment-grade credit profile.
Shareholder returns: Delivered a sustainable annual dividend of $0.56 per share and executed share repurchases, resulting in approximately $400 million returned to shareholders in 2018.
Corporate update
On January 14, 2019, the Company entered into a definitive agreement (as amended by the first amendment to the arrangement agreement, dated as of February 19, 2019) to acquire all outstanding common shares of Goldcorp Inc. (Goldcorp) in a primarily stock transaction. Under the terms of the agreement, Goldcorp shareholders will receive 0.3280 shares of Newmont's common stock and $0.02 in cash for each Goldcorp common share they own, for a total transaction value of approximately $10 billion as of the announcement date on January 14, 2019. The transaction, which is subject to approval by both Newmont and Goldcorp shareholders, and other customary conditions and regulatory approvals, is expected to close in the second quarter of 20198. Upon closing, the combined company will be known as Newmont Goldcorp9.
____________________ | ||
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. | |
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 Consolidated Statements of Cash Flows. | |
8 | See cautionary statement regarding forward-looking statements at the end of this release. There can be no assurance that the proposed transaction will close. For more information on the proposed transaction please see the resources referred to at the end of this release. | |
9 | For more on the proposed acquisition of Goldcorp please refer to the section entitled "Additional information about the proposed transaction and where to find it" located at end of this release. | |
Projects update
Newmont's capital-efficient project pipeline supports stable production with improving margins and mine life. Near-term development capital projects are presented below. Funding for Ahafo Mill Expansion, Quecher Main and Tanami Power 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.
- Ahafo Mill Expansion (Africa) is designed to maximize resource value by improving production margins and accelerating stockpile processing. The project also supports profitable development of Ahafo's highly prospective underground resources. Both first production and commercial production are expected in the second half of 2019. The expansion is expected to increase average annual gold production by between 75,000 and 100,000 ounces per year for the first five years beginning in 2020. Capital costs for the project are estimated betw
Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.
News in: Mining & Metals (Suriname)
Top LatAm gold mines hit by COVID-19 hangover
Output from Latin America’s biggest gold mines declined 11% due to ongoing COVID-19 impacts and dwindling grades.
Can Barrick retake the LatAm gold crown?
Barrick Gold CEO Mark Bristow says he aims to restore the company as a leader in the Latin American gold mining rankings, but the Canadian company ...
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects in: Mining & Metals
Get critical information about thousands of Mining & Metals projects in Latin America: what stages they're in, capex, related companies, contacts and more.
- Project: Construction of 4 Flow Lines and Hydraulic Fracturing of 4 Multi-wells in the Arenal Block
- Current stage:
- Updated:
1 year ago
- Project: Modification reception and shipment of bulk minerals
- Current stage:
- Updated:
3 years ago
- Project: FLORIDA MINING EXPLORATIONS
- Current stage:
- Updated:
3 years ago
- Project: San Cayetano Mining Project
- Current stage:
- Updated:
2 years ago
- Project: El Llano Photovoltaic Park
- Current stage:
- Updated:
2 years ago
- Project: Iván Plant Operational Continuity
- Current stage:
- Updated:
2 years ago
- Project: Cabimas Photovoltaic Project
- Current stage:
- Updated:
3 years ago
- Project: Sal de Vida (Stage 1)
- Current stage:
- Updated:
2 weeks ago
- Project: Fenix expansion
- Current stage:
- Updated:
2 weeks ago
- Project: Amelia
- Current stage:
- Updated:
1 week ago
Other companies in: Mining & Metals
Get critical information about thousands of Mining & Metals companies in Latin America: their projects, contacts, shareholders, related news and more.
- Company: Fundiciones Orozco S.A.S.  (FUNORSA)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: La Plata Mining
- Company: Allied Steel Buildings
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Agencias Universales S.A.  (Agunsa)
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Steel and Pipes Inc.  (Steel and Pipes)
-
The description contained in this profile was taken directly from an official source and has not been edited or modified by BNamericas researchers, but may have been automatical...
- Company: Rio Tinto Mining and Exploration Limited, Agencia en Chile  (Rio Tinto Mining and Exploration, Agencia en Chile)
-
Rio Tinto Mining and Exploration Limited, Agency in Chile is a Chilean subsidiary of the Rio Tinto mining company. In September 2019, the company signed an acquisition agreement...
- Company: Sigdo Koppers S.A.  (Sigdo Koppers)
-
Sigdo Koppers is a Chilean business holding company with operations on five continents and activities in the service, industrial, and commercial and automotive sectors. The serv...
- Company: Aclara Resources Inc.  (Aclara Resources)
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...
- Company: Minera El Morado SpA