NEWMONT CORPORATION

NEM
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Newmont : Press Release (opens in new window)

12/02/2021 | 10:11am

Delivering long-term value from an unmatched portfolio of world-class,long-life operations and a robust organic project pipeline

DENVER, December 2, 2021 - Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the Company) announced its 2022 outlook* with attributable gold production guidance of 6.2 million ounces and AISC** of $1,050 per ounce at an $1,800 gold price assumption. Total gold production combined with other metals is expected to be 7.5 million gold equivalent ounces in 2022 and improve longer-term, with declining costs through investments in new, lower-cost production and benefits from Full Potential improvements.

HIGHLIGHTS

  • Attributable gold production***: Production guidance is 6.2 million ounces for 2022 and is expected to improve to between 6.2 and 6.8 million ounces longer-term.
  • Attributable gold equivalent ounce (GEO) production from other metals****: Co-product GEO production guidance is 1.3 million ounces for 2022 and is expected to improve to between 1.4 to 1.6 million ounces longer-term. Total GEO production expected is 7.5 million ounces for 2022, improving to between 7.7 and 8.3 million ounces longer-term.
  • Costs applicable to sales (CAS)**: Gold CAS guidance is $820 per ounce for 2022, improving to between $700 and $800 per ounce longer-term. Total GEO CAS guidance is $800 per GEO for 2022 and is expected to improve to between $640 and $740 per GEO longer-term.
  • All-insustaining costs (AISC)**: Gold AISC guidance is $1,050 per ounce for 2022, improving to between $920 and $1,020 per ounce longer-term. Total GEO AISC guidance is $1,030 per GEO for 2022 and is expected to improve to between $880 and $980 per GEO longer-term.
  • Capital: Attributable sustaining capital guidance is $925 million for 2022 and is expected to be between $825 and $1,025

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million longer-term. Attributable development capital guidance is $1.2 billion for 2022 and between $1.1 and 1.3 billion for 2023. Over the next five years development capital is expected to average approximately $800 million per year. Development capital expenditures include spend for Tanami Expansion 2, Ahafo North, Yanacocha Sulfides, Pamour at Porcupine and Cerro Negro District Expansion 1.

Attributable Free Cash Flow: Substantial leverage to gold price as we generate $400 million per year of incremental free cash flow for every $100 per ounce increase in gold price above $1,200 per ounce.

Returns: Industry-leading dividend framework includes an annualized $1.00 per share sustainable base dividend with an annualized dividend of $2.20 per share at current metal prices. Completed more than $400 million of share repurchases in 2021 from the $1 billion buyback program. Newmont is on track to return more than $2 billion to shareholders in 2021.*****

Caterpillar Strategic Alliance: Announced a strategic alliance with Caterpillar to deliver a fully connected, automated,

zero carbon emitting, end-to-end mining system; includes an initial commitment of $100 million to deliver an autonomous electric haulage fleet of 16 vehicles at CC&V and 10 battery electric underground haul trucks at Tanami.

"Newmont's outlook remains strong as we steadily increase production and improve costs over time from our global portfolio of world-class assets located in top-tier jurisdictions. In 2022 we expect to deliver approximately 7.5 million gold equivalent ounces, demonstrating the strength of our operations and proven operating model. We are entering a period of significant investment in our organic project pipeline, an important component in growing production, improving margins and extending mine life, and we remain focused on delivering long-term value to all of our stakeholders through our ongoing commitment to sustainable and responsible mining."

- Tom Palmer, Newmont President and Chief Executive Officer

  • Outlook guidance used in this release are considered "forward-looking statements" and users are cautioned that actual results may vary; refer to the cautionary statement. ** Non-GAAP metrics; see pages 8 to 11 for reconciliations. Non-GAAP cost metrics are presented at an $1,800 per ounce revenue gold price assumption.
    *** Attributable production outlook includes the Company's equity investment (40%) in Pueblo Viejo but does not include other equity investments.
    **** 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 ($3.25/lb.), Silver ($23.00/oz.), Lead ($0.95/lb.), and Zinc ($1.15/lb.) pricing.
    *****Investors are reminded that the dividend framework is non-binding, and an annualized dividend has not been declared by the Board. See cautionary statement and endnotes at the end of this release.

NEWMONT 2022 GUIDANCE AND LONGER-TERM OUTLOOK

1

OUTLOOK

Newmont's outlook reflects increasing gold production and ongoing investment in its operating assets and most promising growth prospects. Outlook includes current development capital costs and production related to Tanami Expansion 2, Ahafo North, Yanacocha Sulfides, Pamour at Porcupine and Cerro Negro District Expansion 1.

Newmont's 2022 outlook assumes an $1,800 per ounce revenue gold price for CAS and AISC to reflect higher costs from inflation, royalties and production taxes. In 2022, an additional 5% of cost escalation is incorporated into our direct operating costs related to labor, energy, and material and supplies. 2022 and longer-term outlook assumes a $30 per ounce impact from production taxes and royalties attributable to higher gold prices. Outlook assumes operations continue without major Covid-related interruptions. 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, which are expected to impact AISC per gold equivalent ounce by approximately $10 per ounce. 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 the cautionary statement and footnotes for additional information.

Newmont Production and Cost Outlook:

Guidance Metric (+/- 5%)

2022

2023

2024

2025

2026

Attributable Gold Production (Koz)

6,200

6,000

- 6,600

6,200

- 6,800

6,200

- 6,800

6,200

- 6,800

Gold CAS ($/oz)

820

740

- 840

700

- 800

700

- 800

700

- 800

Gold AISC ($/oz)

1,050

980 - 1,080

920 - 1,020

920 - 1,020

920 - 1,020

Attributable gold production is expected to be stable at 6.0 to 6.8 million ounces across the five-year period. The 2022 outlook of

6.2 million ounces increases from 2021 due to increased production at Boddington and Ahafo. Production is expected to remain between 6.0 and 6.6 million ounces in 2023. This is supported by a steady base from our world class assets, and is further enhanced by the Company's other operating mines and our ownership in Nevada Gold Mines and Pueblo Viejo joint ventures. In 2024, production is expected to increase to between 6.2 and 6.8 million ounces longer-term through 2026 due to the inclusion of profitable production from Ahafo North and Tanami Expansion 2 and reaching higher gold grade at Peñasquito.

Costs are expected to improve throughout the five-year period with investments in profitable projects and benefits from Full Potential improvements. 2022 CAS is expected to be $820 per ounce and improve to between $740 and $840 per ounce for 2023 and $700 and $800 per ounce in 2024 through 2026. AISC is expected to improve to between $980 and $1,080 per ounce in 2023 and $920 to $1,020 per ounce longer-term through 2026.

Newmont Co-Product Production and Cost Outlook:

Guidance Metric (+/- 5%)

2022

2023

2024

2025

2026

Co-Product GEO Production (Koz)

1,300

1,400

- 1,600

1,400

- 1,600

1,400

- 1,600

1,400

- 1,600

Co-Product CAS ($/GEO)

675

600

- 700

500

- 600

500

- 600

500

- 600

Co-Product AISC ($/GEO)

975

900 - 1,000

800

- 900

800

- 900

800

- 900

In 2022, Boddington increases production with higher copper grade, with steady production expected at Peñasquito. In the longer-term, higher co-product production from Peñasquito is expected due to higher silver, lead and zinc content delivered from the Chile Colorado pit, which is partially offset by decreasing copper production from Boddington due to mine sequencing. First copper production is expected from Yanacocha Sulfides in 2026.

NEWMONT 2022 GUIDANCE AND LONGER-TERM OUTLOOK

2

Site Production and Cost Outlook:

North America

2022 Metrics (+/- 5%)

Peñasquito

Porcupine

Éléonore

CC&V

Musselwhite

Gold Production (Koz)

475

340

275

210

200

Co-Product GEO Production (Koz)

1,000

-

-

-

-

Total GEO Production

1,475

340

275

210

200

Gold CAS ($/oz)

650

875

975

975

875

Co-Product GEO CAS ($/oz)

670

-

-

-

-

Total GEO CAS ($/oz)

660

875

975

975

875

Gold AISC ($/oz)

850

1,025

1,150

1,200

1,150

Co-Product GEO AISC ($/oz)

940

-

-

-

-

Total GEO AISC ($/oz)

920

1,025

1,150

1,200

1,150

Peñasquito is expected to deliver lower gold production in 2022 due to lower-grade, harder ore mined from the Chile Colorado pit and stripping the next phases of the Peñasco and Chile Colorado pits continuing through 2023. Co-product production at Peñasquito in 2022 is expected to remain consistent with 2021 production levels, with increased production starting in 2023 due to higher silver, lead and zinc content delivered from the Chile Colorado pit. Porcupine benefits from higher grades at Hoyle, Borden and Hollinger in 2022. The Pamour project is expected to maintain production at Porcupine in 2024 as Hollinger and Hoyle begin to ramp down in 2023 and 2025, respectively. Éléonore, CC&V and Musselwhite are expected to deliver steady production in 2022.

Unit costs at Peñasquito are expected to be impacted by lower production in 2022 and 2023. Porcupine unit costs benefit from higher production in 2022. Unit costs at Éléonore, CC&V and Musselwhite are expected to remain steady in 2022.

South America

2022 Metrics (+/- 5%)

Merian

Cerro Negro

Yanacocha

Pueblo Viejo*

Gold Production (Koz)

350

260

105

285

Gold CAS ($/oz)

750

875

1,100

-

Gold AISC ($/oz)

860

1,095

1,375

-

* Attributable production for the Company's equity investment (40%) in Pueblo Viejo as provided by Barrick Gold Corporation.

Merian is expected to deliver higher production from higher grade in 2022, with slightly lower production expected in subsequent years as we enter the next phase of stripping in the Merian pit and continue mining harder, higher-grade ore. Cerro Negro production is expected to steadily increase due to higher throughput and development rates from productivity improvements. The first expansion at Cerro Negro includes the development of the Marianas and Eastern districts, adding production starting in 2024. Yanacocha continues to deliver leach-only production while developing the first phase of the Sulfides project.

Unit costs at Merian benefit from higher production in 2022 and increase starting in 2023 due to mine sequencing. Cerro Negro unit costs are expected to steadily improve due to higher production. Costs are expected to be higher at Yanacocha through 2024 until the transition to Sulfides.

NEWMONT 2022 GUIDANCE AND LONGER-TERM OUTLOOK

3

Australia

2022 Metrics (+/- 5%)

Boddington

Tanami

Gold Production (Koz)

900

500

Co-Product GEO Production (Koz)

300

-

Total GEO Production

1,200

500

Gold CAS ($/oz)

750

625

Co-Product GEO CAS ($/oz)

740

-

Total GEO CAS ($/oz)

740

625

Gold AISC ($/oz)

860

960

Co-Product GEO AISC ($/oz)

890

-

Total GEO AISC ($/oz)

860

960

Production at Boddington benefits from higher gold and copper grades and efficiency improvements from Autonomous Haulage in 2022. Gold production is expected to decrease in 2023 as the site is expanding the North and South pits through laybacks and remain steady longer-term due to continued throughput from strong mill performance. Tanami maintains steady production through 2023, with higher production beginning in 2024 from the ramp-up of Tanami Expansion 2.

Unit costs at Boddington and Tanami are expected to remain steady, driven largely by production volumes and improved underground efficiencies at Tanami as the second expansion comes online.

Africa

2022 Metrics (+/- 5%)

Ahafo

Akyem

Gold Production (Koz)

650

400

Gold CAS ($/oz)

875

725

Gold AISC ($/oz)

1,000

925

Production at Ahafo is expected to increase through 2024 due to higher grade at the Subika open pit and increased underground tonnes mined due to the change in our mining method at Subika Underground. Akyem is expected to maintain steady production in 2022, with lower production expected in 2023 as stripping continues for a new layback. Ahafo North will add profitable production beginning in 2024.

Unit costs at Ahafo steadily improve due to higher production volumes through 2024. Akyem unit costs benefit from steady production in 2022 and increase starting in 2023 due to mine sequencing. Ahafo North begins to ramp-up in 2024, improving margins through low-cost production.

Nevada Gold Mines (NGM)

2022 Metrics (+/- 5%)

NGM

Gold Production (Koz)

1,250

Gold CAS ($/oz)

825

Gold AISC ($/oz)

1,050

Production, CAS and AISC for the Company's 38.5 percent ownership interest in NGM as provided by Barrick Gold Corporation.

NEWMONT 2022 GUIDANCE AND LONGER-TERM OUTLOOK

4

Newmont Capital Outlook

Guidance Metric ($M) (+/- 5%)

2022

2023

2024

2025

2026

Consolidated Sustaining Capital

1,000

900 - 1,100

900 - 1,100

900 - 1,100

900 - 1,100

Consolidated Development Capital

1,400

1,300 - 1,500

1,100 - 1,300

400

- 600

100

- 300

Total Consolidated Capital

2,400

2,300 - 2,500

2,100 - 2,300

1,400

- 1,600

1,100

- 1,300

Attributable Sustaining Capital

925

825 - 1,025

825 - 1,025

825 - 1,025

825 - 1,025

Attributable Development Capital

1,200

1,100 - 1,300

800 - 1,000

200

- 400

100

- 300

Total Attributable Capital

2,125

2,025 - 2,225

1,725 - 1,925

1,125

- 1,325

1,025

- 1,225

Sustaining capital remains steady, covering infrastructure, equipment and ongoing mine development.

Development capital includes spend for Tanami Expansion 2 in Australia, Ahafo North in Ghana, Cerro Negro District Expansion 1 in Argentina, Yanacocha Sulfides in Peru, Pamour at Porcupine in Canada and expenditures to progress studies for future projects as well as development capital related to the Company's ownership interest in Nevada Gold Mines including Goldrush and the Turquoise Ridge Shaft. Annual decreases reflect the Company's approach to only include development projects that have reached execution stage or are expected to reach execution in the next 12 months.

Exploration and Advanced Projects Outlook

Guidance Metric ($M) (+/- 5%)

2022

Exploration & Advanced Projects

450

Investment in exploration and advanced projects expense is expected to be $450 million in 2022, an increase of approximately $50 million compared to 2021, to advance greenfield exploration projects, extend mine life at existing operations and continue building reserves. We expect to invest approximately $200 million dollars in exploration expense to progress our most promising greenfield exploration projects including Esperance in French Guiana, the Coffee project in the Yukon, and the Saddle North project in British Columbia. In addition, we expect to invest approximately $250 million in advanced projects spend, as we continue to advance studies associated with our robust pipeline of projects, including Galore Creek and Akyem Underground.

Consolidated Expense Outlook

Guidance Metric ($M) (+/- 5%)

2022

General & Administrative

260

Interest Expense

225

Depreciation & Amortization

2,300

Adjusted Tax Rate1,2

30%-34%

The 2022 outlook for general and administrative costs remains flat at $260 million. Interest expense decreases to $225 million in 2022 due primarily to the capitalization of interest on development capital spend. Depreciation and amortization remains flat at $2.3 billion with steady production. The adjusted tax rate is decreasing to 30-34% due to higher production in favorable tax jurisdictions at a higher metal price assumption.

Assumptions and Sensitivities

Newmont's outlook assumes an $1,800 per ounce gold price, $3.25 per pound copper price, $23.00 per ounce silver price, $1.15 per pound zinc price, $0.95 per pound lead price, $0.75 USD/AUD exchange rate, $0.80 USD/CAD exchange rate and $60 per barrel WTI oil price.

Assuming a 35% incremental tax rate, an $100 per ounce increase in gold price would deliver an expected $400 million improvement in attributable free cash flow. Included within the attributable free cash flow sensitivity is a royalty and production tax impact of $5 per ounce for every $100 per ounce change in gold price.

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

2 Assuming average prices of $1,800 per ounce for gold, $3.25 per pound for copper, $23.00 per ounce for silver, $0.95 per pound for lead, and $1.15 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 2022 will be between 30%-34%.

NEWMONT 2022 GUIDANCE AND LONGER-TERM OUTLOOK

5

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Disclaimer

Newmont Corporation published this content on 02 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 December 2021 15:10:08 UTC.

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