Newmont Goldcorp Announces Second Quarter 2019 Results

Press Release

July 25, 2019

DENVER–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.

• Net income: Delivered GAAP net income from continuing operations attributable to Newmont Goldcorp stockholders of $1 million or $0.00 per diluted share; delivered adjusted net income¹ of $92 million or $0.12 per diluted share,down $0.14 compared to the prior year quarter
• EBITDA: Generated $679 million in adjusted EBITDA², an increase of 25 percent from the prior year quarter
• Cash flow: Reported consolidated cash flow from continuing operations of $301 million and free cash flow³ of $(79) million
• Gold costs applicable to sales (CAS) ⁴:Reported CAS of $759 per ounce, in line with the prior year quarter
• Gold all-in sustaining costs (AISC) ⁵:Reported AISC of $1,016 per ounce, in line with the prior year quarter
• Attributable gold production:Produced 1.59 million ounces of gold, an increase of 37 percent over the prior year quarter
• Portfolio improvements: Announced strategic investments in GT Gold, Prodigy Gold and Irving Resources to fund exploration and development activities in Canada, Australia, and Japan, respectively; divested Buffalo Valley and Trenton Canyon properties in Nevada; closed transaction establishing the Nevada Gold Mines joint venture, creating the largest global gold producing complex
• Financial strength: Ended the quarter with $1.8 billion cash on hand and net debt of $4.9 billion, supporting an investment-grade credit profile; paid a one-time special dividend of $0.88 per share; declared a second quarter dividend of $0.14 per share
• Outlook: 2019 attributable production at 6.5 million ounces, CAS at $735 per ounce and AISC at $975 per ounce

“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 rose36 percent to $2,257 million for the quarter primarily due to higher sales volumes from the Newmont Goldcorp transaction.

Average realized price ⁶ 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 production ⁷ 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 expenditures ⁸ 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 alsodecreased 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.

Read More: https://www.newmontgoldcorp.com/newsroom/news-details/?newsId=8154d9cd-85a6-47fc-8449-f2dd59d43dd3

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