DENVER — Newmont Mining Corp. announced full year and fourth quarter 2017 results that demonstrated improved operational and financial performance.
“Newmont continued its steady trajectory of improving operational and financial performance in 2017, and built a stronger base for long-term value creation,” said Gary J. Goldberg, president and CEO. “
Full year 2017 summary
• Net income (loss): Delivered full year GAAP net income (loss) from continuing operations attributable to stockholders of $(60) million or $(0.11) per diluted share; delivered adjusted net income of $780 million or $1.46 per diluted share, up 26 percent compared to the prior year
• EBITDA: Generated $2.7 billion in adjusted EBITDA2, up 12 percent compared to the prior year
• Cash flow: Reported consolidated operating cash flow from continuing operations of $2.4 billion, up 22 percent from the prior year, and free cash flow of $1.5 billion, up 88 percent from the prior year
• Gold costs applicable to sales (CAS): Reported CAS of $691 per ounce, in line with full year guidance
• Gold all-in sustaining costs (AISC): Reported AISC of $924 per ounce, in line with full year guidance
• Attributable gold production: Produced 5.3 million ounces of gold, up eight percent from the prior year, in line with full year guidance
• Portfolio improvements: Declared commercial production at the Tanami Expansion Project and approved the Tanami Power Project in Australia; achieved a full year of underground operation at Northwest Exodus and mined first ore at the Twin Creeks Underground mine in Nevada; approved and progressed expansion of the Ahafo Mill and produced first gold at Subika Underground in Africa; completed first full year of operations at Merian in Suriname; approved Quecher Main and increased ownership in Yanacocha in Peru; invested in early stage development projects in the Canadian Yukon, Colombia, Guiana Shield and the Andes; declared gold reserves of 68.5 million ounces, fully replacing depletion at a constant gold price, and increased gold resources6 to 48.2 million ounces
• Financial strength: Reduced net debt to $0.8 billion, ending the year with $3.3 billion cash on hand, and an industry leading, investment-grade credit profile; fourth quarter dividend declared raised to $0.14 per share, nearly three times higher than the prior year quarter
• Outlook: Released improved 2018 guidance at Investor Day for attributable production, CAS per ounce and AISC per ounce; increased 2018 capital outlook by $300 million following approval of the Tanami Power Project and the Turquoise Ridge Joint Venture Mine Optimization Project
Fourth quarter 2017 summary
• Net income (loss): Delivered GAAP Net income (loss) from continuing operations attributable to stockholders of $(534) million or $(0.99) diluted share; adjusted net income was $216 million or $0.40 per diluted share, up 60 percent from the prior year quarter
• EBITDA: Generated $736 million in adjusted EBITDA, up 17 percent from the prior year quarter
• Cash flow: Increased consolidated operating cash flow from continuing operations to $754 million, up 28 percent from the prior year quarter; and increased free cash flow to $445 million, up 54 percent from the prior year quarter
• Gold CAS per ounce: Rose 2 percent to $693 per ounce
• Gold AISC per ounce: Rose 5 percent to $968 per ounce
• Production: Produced 1.3 million attributable gold ounces
• Shareholder returns: Nearly tripled the fourth quarter dividend declared to $0.14 per share compared to the prior year quarter
Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life.
North America production is expected to be between 2.0 and 2.2 million ounces in 2018 with production from Northwest Exodus, Twin Underground and the Silverstar pit offsetting higher stripping at Carlin and Twin Creeks and lower grade ore at Cripple Creek & Victor. Production declines slightly in 2019 to between 1.8 and 2.0 million ounces due to planned stripping at Carlin and then increases to between 1.9 and 2.1 million ounces in 2020 due to higher grades at Twin Creeks, Cripple Creek & Victor and Long Canyon. The company continues to pursue profitable growth opportunities at Carlin and Long Canyon.
Total capital is expected to increase to between $1,200 and $1,300 million for 2018 with the approval of the Tanami Power Project and the TRJV Mine Optimization Project and is expected to remain between $730 and $830 million for 2019 as expenditures related to Quecher Main are offset by sustaining capital savings across the portfolio. Primary development capital includes expenditure on the Ahafo Mill and Subika Underground expansions in Africa, Twin Underground in North America and Quecher Main in South America. Sustaining capital is expected to be between $600 and $700 million in 2018, between $600 and $700 million for 2019 and between $550 and $650 million per year longer term to cover infrastructure, equipment and ongoing mine development.
Consolidated expense outlook
Interest expense for 2018 is expected to be between $175 and $215 million due to lower debt balances while investment in exploration and advanced projects is expected to be between $350 and $400 million. 2018 outlook for general & administrative costs remains unchanged at between $215 and $240 million and guidance for depreciation and amortization remains unchanged at between $1,225 and $1,325 million.