UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________
Commission File Number: 001-31240
NEWMONT CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 84-1611629 | |||||||
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
| 6900 E Layton Ave | ||||||||
Denver, Colorado | 80237 | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code (303) 863-7414 | ||||||||
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Common stock, par value $1.60 per share | NEM | New York Stock Exchange | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ☐ Yes ☒ No
There were 793,680,485 shares of common stock outstanding on July 18, 2022.
TABLE OF CONTENTS
| Page | ||||||||
GLOSSARY OF ABBREVIATIONS
AISC (1) | All-In Sustaining Costs | ||||
| ARC | Asset Retirement Cost | ||||
| ASC | FASB Accounting Standard Codification | ||||
| ASU | FASB Accounting Standard Update | ||||
| CAS | Costs Applicable to Sales | ||||
EBITDA (1) | Earnings Before Interest, Taxes, Depreciation and Amortization | ||||
| EIA | Environmental Impact Assessment | ||||
| EPA | U.S. Environmental Protection Agency | ||||
| ESG | Environmental, Social and Governance | ||||
| Exchange Act | U.S. Securities Exchange Act of 1934 | ||||
| FASB | Financial Accounting Standards Board | ||||
| GAAP | U.S. Generally Accepted Accounting Principles | ||||
GEO (2) | Gold Equivalent Ounces | ||||
GHG | Greenhouse Gases, which are defined by the EPA as gases that trap heat in the atmosphere | ||||
| IFRS | International Financial Reporting Standards | ||||
| IRC | International Royalty Corporation | ||||
| MINAM | Ministry of the Environment of Peru | ||||
| Mine Act | U.S. Federal Mine Safety and Health Act of 1977 | ||||
| MINEM | Ministry of Energy and Mines of Peru | ||||
| MSHA | Federal Mine Safety and Health Administration | ||||
| NPDES | National Pollutant Discharge Elimination System | ||||
| SEC | U.S. Securities and Exchange Commission | ||||
| Securities Act | U.S. Securities Act of 1933 | ||||
| U.S. | The United States of America | ||||
| WTP | Water Treatment Plant | ||||
____________________________
(1)See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
(2)See Results of Consolidated Operations within Part I, Item 2, Management's Discussion and Analysis.
1
NEWMONT CORPORATION
SECOND QUARTER 2022 RESULTS AND HIGHLIGHTS
(unaudited, in millions, except per share, per ounce and per pound)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Financial Results: | |||||||||||||||||||||||
| Sales | $ | 3,058 | $ | 3,065 | $ | 6,081 | $ | 5,937 | |||||||||||||||
| Gold | $ | 2,722 | $ | 2,630 | $ | 5,236 | $ | 5,112 | |||||||||||||||
| Copper | $ | 76 | $ | 80 | $ | 175 | $ | 132 | |||||||||||||||
| Silver | $ | 140 | $ | 175 | $ | 296 | $ | 343 | |||||||||||||||
| Lead | $ | 28 | $ | 43 | $ | 72 | $ | 87 | |||||||||||||||
| Zinc | $ | 92 | $ | 137 | $ | 302 | $ | 263 | |||||||||||||||
Costs applicable to sales (1) | $ | 1,708 | $ | 1,281 | $ | 3,143 | $ | 2,528 | |||||||||||||||
| Gold | $ | 1,381 | $ | 1,091 | $ | 2,565 | $ | 2,156 | |||||||||||||||
| Copper | $ | 49 | $ | 38 | $ | 95 | $ | 65 | |||||||||||||||
| Silver | $ | 155 | $ | 75 | $ | 252 | $ | 150 | |||||||||||||||
| Lead | $ | 29 | $ | 18 | $ | 51 | $ | 37 | |||||||||||||||
| Zinc | $ | 94 | $ | 59 | $ | 180 | $ | 120 | |||||||||||||||
| Net income (loss) from continuing operations | $ | 392 | $ | 651 | $ | 845 | $ | 1,209 | |||||||||||||||
| Net income (loss) | $ | 400 | $ | 661 | $ | 869 | $ | 1,240 | |||||||||||||||
Net income (loss) from continuing operations attributable to Newmont stockholders | $ | 379 | $ | 640 | $ | 811 | $ | 1,178 | |||||||||||||||
| Per common share, diluted: | |||||||||||||||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders | $ | 0.48 | $ | 0.80 | $ | 1.02 | $ | 1.47 | |||||||||||||||
| Net income (loss) attributable to Newmont stockholders | $ | 0.49 | $ | 0.81 | $ | 1.05 | $ | 1.51 | |||||||||||||||
Adjusted net income (loss) (2) | $ | 362 | $ | 670 | $ | 908 | $ | 1,264 | |||||||||||||||
Adjusted net income (loss) per share, diluted (2) | $ | 0.46 | $ | 0.83 | $ | 1.14 | $ | 1.58 | |||||||||||||||
Earnings before interest, taxes and depreciation and amortization (2) | $ | 1,024 | $ | 1,572 | $ | 2,261 | $ | 2,942 | |||||||||||||||
Adjusted earnings before interest, taxes and depreciation and amortization (2) | $ | 1,149 | $ | 1,591 | $ | 2,539 | $ | 3,048 | |||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 1,722 | $ | 1,834 | |||||||||||||||||||
Free Cash Flow (2) | $ | 766 | $ | 1,020 | |||||||||||||||||||
Cash dividends paid per common share in the period ended June 30 | $ | 0.55 | $ | 0.55 | $ | 1.10 | $ | 1.10 | |||||||||||||||
Cash dividends declared per common share for the period ended June 30 | $ | 0.55 | $ | 0.55 | $ | 1.10 | $ | 1.10 | |||||||||||||||
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
2
NEWMONT CORPORATION
SECOND QUARTER 2022 RESULTS AND HIGHLIGHTS
(unaudited, in millions, except per share, per ounce and per pound)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Operating Results: | |||||||||||||||||||||||
| Consolidated gold ounces (thousands): | |||||||||||||||||||||||
| Produced | 1,453 | 1,430 | 2,764 | 2,852 | |||||||||||||||||||
| Sold | 1,482 | 1,444 | 2,811 | 2,861 | |||||||||||||||||||
| Attributable gold ounces (thousands): | |||||||||||||||||||||||
Produced (1) | 1,495 | 1,449 | 2,839 | 2,904 | |||||||||||||||||||
Sold (2) | 1,455 | 1,383 | 2,746 | 2,744 | |||||||||||||||||||
Consolidated and attributable gold equivalent ounces - other metals (thousands) (3) | |||||||||||||||||||||||
| Produced | 330 | 303 | 680 | 620 | |||||||||||||||||||
| Sold | 333 | 302 | 683 | 629 | |||||||||||||||||||
| Consolidated and attributable - other metals: | |||||||||||||||||||||||
| Produced copper (million pounds) | 24 | 19 | 43 | 33 | |||||||||||||||||||
| Sold copper (million pounds) | 25 | 19 | 46 | 31 | |||||||||||||||||||
| Produced silver (thousand ounces) | 7,733 | 7,428 | 15,813 | 15,590 | |||||||||||||||||||
| Sold silver (thousand ounces) | 8,066 | 7,615 | 15,718 | 16,146 | |||||||||||||||||||
| Produced lead (million pounds) | 35 | 44 | 79 | 94 | |||||||||||||||||||
| Sold lead (million pounds) | 35 | 42 | 77 | 92 | |||||||||||||||||||
| Produced zinc (million pounds) | 94 | 105 | 208 | 216 | |||||||||||||||||||
| Sold zinc (million pounds) | 85 | 102 | 205 | 221 | |||||||||||||||||||
| Average realized price: | |||||||||||||||||||||||
| Gold (per ounce) | $ | 1,836 | $ | 1,823 | $ | 1,863 | $ | 1,788 | |||||||||||||||
| Copper (per pound) | $ | 2.99 | $ | 4.37 | $ | 3.81 | $ | 4.30 | |||||||||||||||
| Silver (per ounce) | $ | 17.42 | $ | 23.00 | $ | 18.85 | $ | 21.27 | |||||||||||||||
| Lead (per pound) | $ | 0.80 | $ | 1.02 | $ | 0.94 | $ | 0.95 | |||||||||||||||
| Zinc (per pound) | $ | 1.08 | $ | 1.34 | $ | 1.47 | $ | 1.19 | |||||||||||||||
Consolidated costs applicable to sales: (4)(5) | |||||||||||||||||||||||
| Gold (per ounce) | $ | 932 | $ | 755 | $ | 912 | $ | 754 | |||||||||||||||
Gold equivalent ounces - other metals (per ounce) (3) | $ | 983 | $ | 629 | $ | 846 | $ | 590 | |||||||||||||||
All-in sustaining costs: (5) | |||||||||||||||||||||||
| Gold (per ounce) | $ | 1,199 | $ | 1,035 | $ | 1,179 | $ | 1,037 | |||||||||||||||
Gold equivalent ounces - other metals (per ounce) (3) | $ | 1,286 | $ | 886 | $ | 1,138 | $ | 851 | |||||||||||||||
(1)Attributable gold ounces produced includes 70 and 78 thousand ounces for the three months ended June 30, 2022 and 2021, respectively, and 139 and 169 thousand ounces for the six months ended June 30, 2022 and 2021, respectively, related to the Pueblo Viejo mine, which is 40% owned by Newmont and accounted for as an equity method investment.
(2)Attributable gold ounces sold excludes ounces related to the Pueblo Viejo mine, which is 40% owned by Newmont and accounted for as an equity method investment.
(3)For the definition of gold equivalent ounces see Results of Consolidated Operations within Part I, Item 2, Management's Discussion and Analysis.
(4)Excludes Depreciation and amortization and Reclamation and remediation.
(5)See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
3
Second Quarter 2022 Highlights (dollars in millions, except per share, per ounce and per pound amounts)
•Net income: Reported Net income (loss) from continuing operations attributable to Newmont stockholders of $379 or $0.48 per diluted share, a decrease of $261 from the prior-year quarter primarily due to higher Costs applicable to sales predominately resulting from impacts due to cost inflation from increased input commodity prices, notably fuel and energy costs, as well as $70 related to the profit-sharing agreement entered into by the Company during the second quarter of 2022 with the workforce at the Peñasquito mine related to 2021 site performance, and unrealized losses on marketable and other equity securities, partially offset by lower income tax expense.
•Adjusted net income: Reported Adjusted net income of $362 or $0.46 per diluted share, a decrease of $0.37 per diluted share from the prior-year quarter (see Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis).
•Adjusted EBITDA: Generated $1,149 in Adjusted EBITDA, a decrease of 28% from the prior-year quarter (see Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis).
•Cash Flow: Reported Net cash provided by (used in) operating activities of continuing operations of $1,722, a decrease of 6% from the prior year, and free cash flow of $766 (see Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis).
•ESG: Published 2nd annual climate report in May 2022 providing a view on how the Company understands and is addressing climate change; contributed $34 in July 2022 as part of the Company's strategic alliance with Caterpillar Inc. to develop and deliver electric autonomous mining systems to reduce emissions supporting Newmont’s climate change targets and ambition.
•Portfolio Updates: Acquired remaining 5% ownership interest in Yanacocha from Sumitomo, resulting in 100% ownership interest.
•Attributable production: Produced 1.5 million attributable ounces of gold and 330 thousand attributable gold equivalent ounces from co-products.
•Financial strength: Ended the quarter with $4.3 billion of consolidated cash and $7.3 billion of liquidity; declared a dividend of $0.55 per share in July 2022.
Health & Safety Update
Our operations continue to be affected by a range of external factors related to the COVID-19 pandemic that are not within our control. Refer to Consolidated Financial Results, Results of Consolidated Operations, Liquidity and Capital Resources and Non-GAAP Financial Measures within Part I, Item 2, Management’s Discussion and Analysis of this report for additional information about the continued impacts of COVID-19 on our business and operations.
For a discussion of the precautions we are taking to protect our workforce and nearby communities, while also taking steps to preserve the long-term value of our business, refer to "COVID-19 Pandemic" within Part I, Item 1, Business on our Form 10-K filed with the SEC on February 24, 2022. For a discussion of COVID-19 related risks to the business, see Part I, Item 1A, Risk Factors on our Form 10-K filed with the SEC on February 24, 2022.
4
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEWMONT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in millions except per share)
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
5
NEWMONT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in millions)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Net income (loss) | $ | 400 | $ | 661 | $ | 869 | $ | 1,240 | |||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
Change in marketable securities, net of tax of $—, $—, $—, and $— respectively | (1) | — | (2) | — | |||||||||||||||||||
| Foreign currency translation adjustments | 2 | (1) | 1 | 1 | |||||||||||||||||||
Change in pension and other post-retirement benefits, net of tax of $—, $(1), $(32), and $(2) respectively | (1) | 6 | 121 | 12 | |||||||||||||||||||
Change in fair value of cash flow hedge instruments, net of tax of $— and $(1), $—, and $(2) respectively | 1 | 2 | 2 | 5 | |||||||||||||||||||
| Other comprehensive income (loss) | 1 | 7 | 122 | 18 | |||||||||||||||||||
| Comprehensive income (loss) | $ | 401 | $ | 668 | $ | 991 | $ | 1,258 | |||||||||||||||
| Comprehensive income (loss) attributable to: | |||||||||||||||||||||||
| Newmont stockholders | $ | 388 | $ | 657 | $ | 957 | $ | 1,227 | |||||||||||||||
| Noncontrolling interests | 13 | 11 | 34 | 31 | |||||||||||||||||||
| $ | 401 | $ | 668 | $ | 991 | $ | 1,258 | ||||||||||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
6
NEWMONT CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Operating activities: | |||||||||||
| Net income (loss) | $ | 869 | $ | 1,240 | |||||||
| Non-cash adjustments: | |||||||||||
| Depreciation and amortization | 1,106 | 1,114 | |||||||||
| Net loss (income) from discontinued operations | (24) | (31) | |||||||||
Charges from pension settlement (Note 7) | 130 | — | |||||||||
| Deferred income taxes | (111) | 14 | |||||||||
| Reclamation and remediation | 103 | 96 | |||||||||
Change in fair value of investments (Note 7) | 96 | 84 | |||||||||
| Stock-based compensation | 40 | 38 | |||||||||
| Other non-cash adjustments | 15 | (130) | |||||||||
Net change in operating assets and liabilities (Note 16) | (502) | (591) | |||||||||
| Net cash provided by (used in) operating activities of continuing operations | 1,722 | 1,834 | |||||||||
| Net cash provided by (used in) operating activities of discontinued operations | 15 | 2 | |||||||||
| Net cash provided by (used in) operating activities | 1,737 | 1,836 | |||||||||
| Investing activities: | |||||||||||
| Additions to property, plant and mine development | (956) | (814) | |||||||||
| Contributions to equity method investees | (91) | (72) | |||||||||
Payment relating to sale of La Zanja (Note 1) | (45) | — | |||||||||
| Proceeds from asset and investment sales | 41 | 85 | |||||||||
| Return of investment from equity method investees | 39 | 18 | |||||||||
| Acquisitions, net | (15) | (328) | |||||||||
| Purchases of investments | (8) | (16) | |||||||||
| Other | 1 | — | |||||||||
| Net cash provided by (used in) investing activities | (1,034) | (1,127) | |||||||||
| Financing activities: | |||||||||||
| Dividends paid to common stockholders | (873) | (881) | |||||||||
Acquisition of noncontrolling interests (Note 1) | (348) | — | |||||||||
| Distributions to noncontrolling interests | (103) | (97) | |||||||||
Repayment of debt (Note 13) | (89) | (550) | |||||||||
| Funding from noncontrolling interests | 56 | 48 | |||||||||
| Payments for withholding of employee taxes related to stock-based compensation | (36) | (29) | |||||||||
| Payments on lease and other financing obligations | (34) | (36) | |||||||||
| Repurchases of common stock | — | (134) | |||||||||
| Other | 10 | 13 | |||||||||
| Net cash provided by (used in) financing activities | (1,417) | (1,666) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (9) | — | |||||||||
| Net change in cash, cash equivalents and restricted cash | (723) | (957) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 5,093 | 5,648 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 4,370 | $ | 4,691 | |||||||
| Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
| Cash and cash equivalents | $ | 4,307 | $ | 4,583 | |||||||
| Restricted cash included in Other current assets | — | 1 | |||||||||
| Restricted cash included in Other non-current assets | 63 | 107 | |||||||||
| Total cash, cash equivalents and restricted cash | $ | 4,370 | $ | 4,691 | |||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
7
NEWMONT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
| At June 30, 2022 | At December 31, 2021 | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 4,307 | $ | 4,992 | |||||||
| Trade receivables (Note 4) | 364 | 337 | |||||||||
| Investments (Note 10) | 51 | 82 | |||||||||
| Inventories (Note 11) | 922 | 930 | |||||||||
| Stockpiles and ore on leach pads (Note 12) | 752 | 857 | |||||||||
| Other current assets | 511 | 498 | |||||||||
| Current assets | 6,907 | 7,696 | |||||||||
| Property, plant and mine development, net | 24,131 | 24,124 | |||||||||
| Investments (Note 10) | 3,203 | 3,243 | |||||||||
| Stockpiles and ore on leach pads (Note 12) | 1,788 | 1,775 | |||||||||
| Deferred income tax assets | 209 | 269 | |||||||||
| Goodwill | 2,771 | 2,771 | |||||||||
| Other non-current assets | 681 | 686 | |||||||||
| Total assets | $ | 39,690 | $ | 40,564 | |||||||
| LIABILITIES | |||||||||||
| Accounts payable | $ | 583 | $ | 518 | |||||||
| Employee-related benefits | 471 | 386 | |||||||||
| Income and mining taxes payable | 178 | 384 | |||||||||
| Lease and other financing obligations | 98 | 106 | |||||||||
| Debt (Note 13) | — | 87 | |||||||||
| Other current liabilities (Note 14) | 1,121 | 1,173 | |||||||||
| Current liabilities | 2,451 | 2,654 | |||||||||
| Debt (Note 13) | 5,568 | 5,565 | |||||||||
| Lease and other financing obligations | 507 | 544 | |||||||||
| Reclamation and remediation liabilities (Note 5) | 5,844 | 5,839 | |||||||||
| Deferred income tax liabilities | 1,976 | 2,144 | |||||||||
| Employee-related benefits | 371 | 439 | |||||||||
| Silver streaming agreement | 868 | 910 | |||||||||
| Other non-current liabilities (Note 14) | 506 | 608 | |||||||||
| Total liabilities | 18,091 | 18,703 | |||||||||
| Contingently redeemable noncontrolling interest (Note 1) | — | 48 | |||||||||
Commitments and contingencies (Note 17) | |||||||||||
| EQUITY | |||||||||||
| Common stock | 1,278 | 1,276 | |||||||||
| Treasury stock | (236) | (200) | |||||||||
| Additional paid-in capital | 17,334 | 17,981 | |||||||||
| Accumulated other comprehensive income (loss) (Note 15) | (11) | (133) | |||||||||
| Retained earnings (accumulated deficit) | 3,056 | 3,098 | |||||||||
| Newmont stockholders' equity | 21,421 | 22,022 | |||||||||
| Noncontrolling interests | 178 | (209) | |||||||||
| Total equity | 21,599 | 21,813 | |||||||||
| Total liabilities and equity | $ | 39,690 | $ | 40,564 | |||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
8
NEWMONT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited, in millions)
| Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Noncontrolling Interests | Total Equity | Contingently Redeemable Noncontrolling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | 797 | $ | 1,276 | (5) | $ | (200) | $ | 17,981 | $ | (133) | $ | 3,098 | $ | (209) | $ | 21,813 | $ | 48 | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 448 | 21 | 469 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | 121 | — | — | 121 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared (1) | — | — | — | — | — | — | (439) | — | (439) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions declared to noncontrolling interests | — | — | — | — | — | — | — | (59) | (59) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash calls requested from noncontrolling interests | — | — | — | — | — | — | — | 30 | 30 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding of employee taxes related to stock-based compensation | — | — | (1) | (36) | — | — | — | — | (36) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interests (Note 1) | — | — | — | — | (699) | — | — | 399 | (300) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification of contingently redeemable noncontrolling interests (Note 1) | — | — | — | — | — | — | — | — | — | (48) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | 14 | — | — | — | 14 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards and related share issuances | 2 | 2 | — | — | 16 | — | — | — | 18 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2022 | 799 | $ | 1,278 | (6) | $ | (236) | $ | 17,312 | $ | (12) | $ | 3,107 | $ | 182 | $ | 21,631 | $ | — | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 387 | 13 | 400 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | 1 | — | — | 1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared (1) | — | — | — | — | — | — | (438) | — | (438) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions declared to noncontrolling interests | — | — | — | — | — | — | — | (45) | (45) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash calls requested from noncontrolling interests | — | — | — | — | — | — | — | 28 | 28 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards and related share issuances | — | — | — | — | 22 | — | — | — | 22 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | 799 | $ | 1,278 | (6) | $ | (236) | $ | 17,334 | $ | (11) | $ | 3,056 | $ | 178 | $ | 21,599 | $ | — | |||||||||||||||||||||||||||||||||||||||||
(1)Cash dividends per common share were $0.55 and $1.10 for the three and six months ended June 30, 2022.
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
9
NEWMONT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(unaudited, in millions)
| Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | Noncontrolling Interests | Total Equity | Contingently Redeemable Noncontrolling Interest | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | 804 | $ | 1,287 | (4) | $ | (168) | $ | 18,103 | $ | (216) | $ | 4,002 | $ | 837 | $ | 23,845 | $ | 34 | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 559 | 20 | 579 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | 11 | — | — | 11 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared (1) | — | — | — | — | — | — | (441) | — | (441) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions declared to noncontrolling interests | — | — | — | — | — | — | — | (54) | (54) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash calls requested from noncontrolling interests | — | — | — | — | — | — | — | 28 | 28 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding of employee taxes related to stock-based compensation | — | — | — | (28) | — | — | — | — | (28) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | 1 | — | — | — | 1 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards and related share issuances | 1 | 2 | — | — | 15 | — | — | — | 17 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | 805 | $ | 1,289 | (4) | $ | (196) | $ | 18,119 | $ | (205) | $ | 4,120 | $ | 831 | $ | 23,958 | $ | 34 | |||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | 650 | 11 | 661 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | 7 | — | — | 7 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared (1) | — | — | — | — | — | — | (443) | — | (443) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions declared to noncontrolling interests | — | — | — | — | — | — | — | (43) | (43) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cash calls requested from noncontrolling interests | — | — | — | — | — | — | — | 22 | 22 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock (2) | (2) | (3) | — | — | (49) | — | (85) | — | (137) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding of employee taxes related to stock-based compensation | — | — | — | (1) | — | — | — | — | (1) | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | — | 15 | — | — | — | 15 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards and related share issuances | — | 1 | — | — | 20 | — | — | — | 21 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | 803 | $ | 1,287 | (4) | $ | (197) | $ | 18,105 | $ | (198) | $ | 4,242 | $ | 821 | $ | 24,060 | $ | 34 | |||||||||||||||||||||||||||||||||||||||||
(1)Cash dividends per common share were $0.55 and $1.10 for the three and six months ended June 30, 2021, respectively.
(2)Repurchase and retirement of common stock of $137 for the three and six months ended June 30, 2021, includes $3 of non-common stock forfeitures.
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
10
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 1 BASIS OF PRESENTATION
The interim Condensed Consolidated Financial Statements (“interim statements”) of Newmont Corporation, a Delaware corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all normal recurring adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with Newmont’s Consolidated Financial Statements for the year ended December 31, 2021 filed on February 24, 2022 on Form 10-K. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by GAAP have been condensed or omitted.
References to “C$” refer to Canadian currency.
Noncontrolling Interests
Net loss (income) attributable to noncontrolling interest is comprised of income, primarily related to Merian, of $13 and $11 for the three months ended June 30, 2022 and 2021, respectively, and $34 and $31 for the six months ended June 30, 2022 and 2021, respectively. Newmont consolidates Merian through its wholly-owned subsidiary, Newmont Suriname LLC., in its Condensed Consolidated Financial Statements as the primary beneficiary of Merian, which is a variable interest entity.
Yanacocha transaction
At December 31, 2021, Compañia de Minas Buenaventura S.A.A. (“Buenaventura”) held 43.65% ownership interest in Minera Yanacocha S.R.L. ("Yanacocha"). During the first quarter of 2022, the Company completed the acquisition of Buenaventura’s 43.65% noncontrolling interest in Yanacocha (the “Yanacocha Transaction”) for $300 cash consideration, certain royalties on any production from other future potential projects, and contingent payments of up to $100 tied to higher metal prices, achieving commercial production at the Yanacocha Sulfides project and resolution on the outstanding Yanacocha tax dispute. The Yanacocha Transaction was accounted for as an equity transaction, resulting in a decrease to additional paid-in-capital and no gain or loss recognition. Upon close of the Yanacocha Transaction, the Company’s ownership interest in Yanacocha increased to 95%. The Company acquired the remaining 5% in the second quarter of 2022. Refer to "Contingently redeemable noncontrolling interest" below for further information.
Concurrent with the Yanacocha Transaction, the Company sold its 46.94% ownership interest in Minera La Zanja S.R.L. ("La Zanja"), accounted for as an equity method investment with a carrying value of $— as of December 31, 2021. Per the terms of the sale, the Company sold its interest in La Zanja to Buenaventura, the parent company of La Zanja, in exchange for royalties on potential future production from the La Zanja operation and contributed cash of $45 to be used exclusively for reclamation costs at the La Zanja operation. Upon close of the sale during the first quarter of 2022, the Company recognized a $45 loss on sale of its equity interest, included in Other income (loss), net.
Contingently redeemable noncontrolling interest
In 2018, Summit Global Management II VB, a subsidiary of Sumitomo Corporation (“Sumitomo”) acquired a 5% interest in Yanacocha for $48 in cash. Under the terms of the acquisition, Sumitomo had the option to require Yanacocha to repurchase the interest for the $48, which was placed in escrow. In March 2022, Sumitomo exercised this option, in accordance with the terms of the acquisition. As a result, in June 2022 the Company acquired the remaining 5% ownership interest held by Sumitomo in exchange for cash consideration of $48. As of June 30, 2022, the Company holds 100% ownership interest in Yanacocha.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and Uncertainties
The COVID-19 pandemic and the Russian invasion of Ukraine continue to affect the Company. Although the Company does not currently have operations in Ukraine, Russia or other parts of Europe, impacts arising from Russia’s invasion of Ukraine include the Company's ability to complete the sale of assets currently classified as held for sale within one year as originally planned. In addition, these events, along with the ongoing COVID-19 pandemic, could have further potential impacts on the Company including, but not limited to, sites being placed into care and maintenance, volatility in commodity prices and the prices for gold and other metals, cost inflation, logistical challenges, workforce interruptions, financial market disruption, as well as potential impacts to estimated costs and timing of projects.
The Company continues to monitor and is currently evaluating potential impacts to operations, estimated capital expenditures and timing of projects related to inflationary pressures and supply chain disruptions. Depending on the duration and extent of COVID-19, ongoing global developments and increasing inflationary pressures, these factors could materially impact the Company’s results of operations, cash flows and financial condition and could result in material impairment charges to the Company’s Property, plant and mine development, net; Inventories; Stockpiles and ore on leach pads; Investments; Deferred income tax assets; and Goodwill.
11
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
Refer to Note 2 of the Consolidated Financial Statements included in Part II of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022 for further information on risks and uncertainties that could have a potential impact on the Company.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. The Company must make these estimates and assumptions because certain information used is dependent on future events, cannot be calculated with a high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. Actual results could differ from these estimates.
Reclassifications
Certain amounts and disclosures in prior years have been reclassified to conform to the current year presentation.
Recently Adopted Accounting Pronouncements and Securities and Exchange Commission Rules
Financial Disclosures of Government Assistance
In November 2021, ASU No. 2021-10 was issued which provides guidance for required annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. The Company adopted this standard as of January 1, 2022. The adoption did not have a material impact on the Condensed Consolidated Financial Statements or disclosures.
Recently Issued Accounting Pronouncements
Effects of Reference Rate Reform
In March 2020, ASU No. 2020-04 was issued which provides optional guidance for a limited period of time to ease the potential burden on accounting for contract modifications caused by reference rate reform. In January 2021, ASU No. 2021-01 was issued which broadened the scope of ASU No. 2020-04 to include certain derivative instruments. The guidance is effective for all entities as of March 12, 2020 through December 31, 2022. The guidance may be adopted over time as reference rate reform activities occur and should be applied on a prospective basis. The Company is in the process of reviewing key contracts to identify any contracts that reference the London Interbank Offered Rate ("LIBOR") and to implement adequate fallback provisions if not already implemented to mitigate the risks or impacts from the transition. No material impacts are expected to the Condensed Consolidated Financial Statements or disclosures.
NOTE 3 SEGMENT INFORMATION
The Company has organized its operations into five geographic regions: North America, South America, Australia, Africa and Nevada, which also represent Newmont’s reportable and operating segments. The results of these operating segments are reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. As a result, these operating segments represent the Company’s reportable segments. Notwithstanding this structure, the Company internally reports information on a mine-by-mine basis for each mining operation and has chosen to disclose this information in the following tables. Income (loss) before income and mining tax and other items from reportable segments does not reflect general corporate expenses, interest (except project-specific interest) or income and mining taxes. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. Newmont’s business activities that are not considered operating segments are included in Corporate and Other. Although they are not required to be included in this footnote, they are provided for reconciliation purposes.
12
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Sales | Costs Applicable to Sales | Depreciation and Amortization | Advanced Projects, Research and Development and Exploration | Income (Loss) before Income and Mining Tax and Other Items | Capital Expenditures (1) | ||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
| CC&V | $ | 85 | $ | 49 | $ | 16 | $ | 3 | $ | 6 | $ | 14 | |||||||||||||||||||||||
Musselwhite | 73 | 53 | 20 | 2 | — | 12 | |||||||||||||||||||||||||||||
Porcupine | 125 | 71 | 25 | 4 | 28 | 40 | |||||||||||||||||||||||||||||
Éléonore | 87 | 71 | 27 | 1 | (13) | 13 | |||||||||||||||||||||||||||||
Peñasquito: (2) | |||||||||||||||||||||||||||||||||||
| Gold | 230 | 127 | 34 | ||||||||||||||||||||||||||||||||
| Silver | 140 | 155 | 42 | ||||||||||||||||||||||||||||||||
| Lead | 28 | 29 | 8 | ||||||||||||||||||||||||||||||||
| Zinc | 92 | 94 | 22 | ||||||||||||||||||||||||||||||||
| Total Peñasquito | 490 | 405 | 106 | 6 | (44) | 48 | |||||||||||||||||||||||||||||
| Other North America | — | — | 2 | 1 | (15) | — | |||||||||||||||||||||||||||||
| North America | 860 | 649 | 196 | 17 | (38) | 127 | |||||||||||||||||||||||||||||
| Yanacocha | 128 | 73 | 21 | 5 | 6 | 90 | |||||||||||||||||||||||||||||
| Merian | 178 | 94 | 20 | 6 | 58 | 13 | |||||||||||||||||||||||||||||
Cerro Negro | 145 | 71 | 42 | 4 | 15 | 32 | |||||||||||||||||||||||||||||
| Other South America | — | — | 1 | 11 | (20) | 1 | |||||||||||||||||||||||||||||
| South America | 451 | 238 | 84 | 26 | 59 | 136 | |||||||||||||||||||||||||||||
| Boddington: | |||||||||||||||||||||||||||||||||||
| Gold | 429 | 181 | 33 | ||||||||||||||||||||||||||||||||
| Copper | 76 | 49 | 9 | ||||||||||||||||||||||||||||||||
| Total Boddington | 505 | 230 | 42 | 2 | 245 | 17 | |||||||||||||||||||||||||||||
| Tanami | 249 | 84 | 26 | 7 | 153 | 94 | |||||||||||||||||||||||||||||
| Other Australia | — | — | 2 | 5 | — | 1 | |||||||||||||||||||||||||||||
| Australia | 754 | 314 | 70 | 14 | 398 | 112 | |||||||||||||||||||||||||||||
| Ahafo | 253 | 129 | 42 | 7 | 75 | 78 | |||||||||||||||||||||||||||||
| Akyem | 203 | 76 | 33 | 4 | 89 | 8 | |||||||||||||||||||||||||||||
| Other Africa | — | — | — | 1 | (3) | 2 | |||||||||||||||||||||||||||||
| Africa | 456 | 205 | 75 | 12 | 161 | 88 | |||||||||||||||||||||||||||||
Nevada Gold Mines | 537 | 302 | 127 | 9 | 91 | 72 | |||||||||||||||||||||||||||||
| Nevada | 537 | 302 | 127 | 9 | 91 | 72 | |||||||||||||||||||||||||||||
| Corporate and Other | — | — | 7 | 29 | (263) | 2 | |||||||||||||||||||||||||||||
| Consolidated | $ | 3,058 | $ | 1,708 | $ | 559 | $ | 107 | $ | 408 | $ | 537 | |||||||||||||||||||||||
____________________________
(1)Includes accrued costs associated with the Tanami Expansion of $2, which are included in Lease and other financing obligations, and an increase in accrued capital expenditures of $16. Consolidated capital expenditures on a cash basis were $519.
(2)Costs applicable to sales includes amounts resulting from the profit-sharing agreement completed with the Peñasquito workforce during the second quarter of 2022. Under the agreement, the Company will pay its workforce an uncapped profit-sharing bonus each year, based on the agreed upon terms. Additionally, the terms of the agreement are retroactively applied to profit-sharing related to 2021 site performance, resulting in $70 recorded within Costs applicable to sales in the second quarter of 2022. The amounts related to the 2021 profit-sharing are expected to be paid in the third quarter of 2022.
13
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Sales | Costs Applicable to Sales | Depreciation and Amortization | Advanced Projects, Research and Development and Exploration | Income (Loss) before Income and Mining Tax and Other Items | Capital Expenditures (1) | ||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
| CC&V | $ | 116 | $ | 59 | $ | 16 | $ | 6 | $ | 34 | $ | 8 | |||||||||||||||||||||||
Musselwhite | 63 | 37 | 19 | 2 | 4 | 10 | |||||||||||||||||||||||||||||
Porcupine | 122 | 61 | 21 | 7 | 30 | 16 | |||||||||||||||||||||||||||||
Éléonore | 124 | 65 | 36 | 2 | 18 | 14 | |||||||||||||||||||||||||||||
Peñasquito: | |||||||||||||||||||||||||||||||||||
| Gold | 326 | 95 | 50 | ||||||||||||||||||||||||||||||||
| Silver | 175 | 75 | 39 | ||||||||||||||||||||||||||||||||
| Lead | 43 | 18 | 10 | ||||||||||||||||||||||||||||||||
| Zinc | 137 | 59 | 26 | ||||||||||||||||||||||||||||||||
| Total Peñasquito | 681 | 247 | 125 | 1 | 299 | 33 | |||||||||||||||||||||||||||||
| Other North America | — | — | 4 | 1 | (13) | — | |||||||||||||||||||||||||||||
| North America | 1,106 | 469 | 221 | 19 | 372 | 81 | |||||||||||||||||||||||||||||
| Yanacocha | 123 | 32 | 23 | 3 | 41 | 28 | |||||||||||||||||||||||||||||
| Merian | 196 | 83 | 26 | 3 | 74 | 10 | |||||||||||||||||||||||||||||
Cerro Negro | 142 | 69 | 39 | 1 | 34 | 28 | |||||||||||||||||||||||||||||
| Other South America | — | — | 1 | 9 | (17) | — | |||||||||||||||||||||||||||||
| South America | 461 | 184 | 89 | 16 | 132 | 66 | |||||||||||||||||||||||||||||
| Boddington: | |||||||||||||||||||||||||||||||||||
| Gold | 344 | 162 | 26 | ||||||||||||||||||||||||||||||||
| Copper | 80 | 38 | 6 | ||||||||||||||||||||||||||||||||
| Total Boddington | 424 | 200 | 32 | 2 | 189 | 51 | |||||||||||||||||||||||||||||
| Tanami | 199 | 65 | 23 | 8 | 102 | 68 | |||||||||||||||||||||||||||||
| Other Australia | — | — | 1 | 4 | (7) | 1 | |||||||||||||||||||||||||||||
| Australia | 623 | 265 | 56 | 14 | 284 | 120 | |||||||||||||||||||||||||||||
| Ahafo | 189 | 92 | 34 | 5 | 53 | 46 | |||||||||||||||||||||||||||||
| Akyem | 163 | 56 | 28 | 2 | 76 | 12 | |||||||||||||||||||||||||||||
| Other Africa | — | — | — | 1 | (3) | — | |||||||||||||||||||||||||||||
| Africa | 352 | 148 | 62 | 8 | 126 | 58 | |||||||||||||||||||||||||||||
| Nevada Gold Mines | 523 | 215 | 128 | 8 | 170 | 75 | |||||||||||||||||||||||||||||
| Nevada | 523 | 215 | 128 | 8 | 170 | 75 | |||||||||||||||||||||||||||||
| Corporate and Other | — | — | 5 | 24 | (141) | 6 | |||||||||||||||||||||||||||||
| Consolidated | $ | 3,065 | $ | 1,281 | $ | 561 | $ | 89 | $ | 943 | $ | 406 | |||||||||||||||||||||||
____________________________
(1)Includes a decrease in accrued capital expenditures of $9; consolidated capital expenditures on a cash basis were $415.
14
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Sales | Costs Applicable to Sales | Depreciation and Amortization | Advanced Projects, Research and Development and Exploration | Income (Loss) before Income and Mining Tax and Other Items | Capital Expenditures (1) | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
| CC&V | $ | 153 | $ | 101 | $ | 32 | $ | 4 | $ | 3 | $ | 18 | |||||||||||||||||||||||
Musselwhite | 133 | 96 | 36 | 3 | (3) | 18 | |||||||||||||||||||||||||||||
Porcupine | 239 | 137 | 47 | 7 | 45 | 76 | |||||||||||||||||||||||||||||
Éléonore | 181 | 133 | 56 | 1 | (14) | 23 | |||||||||||||||||||||||||||||
Peñasquito: (2) | |||||||||||||||||||||||||||||||||||
| Gold | 482 | 214 | 73 | ||||||||||||||||||||||||||||||||
| Silver | 296 | 252 | 86 | ||||||||||||||||||||||||||||||||
| Lead | 72 | 51 | 18 | ||||||||||||||||||||||||||||||||
| Zinc | 302 | 180 | 57 | ||||||||||||||||||||||||||||||||
| Total Peñasquito | 1,152 | 697 | 234 | 11 | 197 | 88 | |||||||||||||||||||||||||||||
| Other North America | — | — | 4 | 1 | (11) | — | |||||||||||||||||||||||||||||
| North America | 1,858 | 1,164 | 409 | 27 | 217 | 223 | |||||||||||||||||||||||||||||
| Yanacocha | 255 | 140 | 46 | 6 | 13 | 146 | |||||||||||||||||||||||||||||
| Merian | 373 | 181 | 42 | 9 | 139 | 24 | |||||||||||||||||||||||||||||
Cerro Negro | 267 | 134 | 81 | 7 | 23 | 60 | |||||||||||||||||||||||||||||
| Other South America | — | — | 2 | 20 | (35) | 1 | |||||||||||||||||||||||||||||
| South America | 895 | 455 | 171 | 42 | 140 | 231 | |||||||||||||||||||||||||||||
| Boddington: | |||||||||||||||||||||||||||||||||||
| Gold | 810 | 343 | 61 | ||||||||||||||||||||||||||||||||
| Copper | 175 | 95 | 17 | ||||||||||||||||||||||||||||||||
| Total Boddington | 985 | 438 | 78 | 3 | 478 | 35 | |||||||||||||||||||||||||||||
| Tanami | 435 | 149 | 48 | 13 | 231 | 178 | |||||||||||||||||||||||||||||
| Other Australia | — | — | 3 | 8 | (9) | 5 | |||||||||||||||||||||||||||||
| Australia | 1,420 | 587 | 129 | 24 | 700 | 218 | |||||||||||||||||||||||||||||
| Ahafo | 455 | 235 | 73 | 11 | 142 | 137 | |||||||||||||||||||||||||||||
| Akyem | 372 | 143 | 63 | 8 | 156 | 20 | |||||||||||||||||||||||||||||
| Other Africa | — | — | — | 1 | (5) | 5 | |||||||||||||||||||||||||||||
| Africa | 827 | 378 | 136 | 20 | 293 | 162 | |||||||||||||||||||||||||||||
Nevada Gold Mines | 1,081 | 559 | 252 | 15 | 244 | 138 | |||||||||||||||||||||||||||||
| Nevada | 1,081 | 559 | 252 | 15 | 244 | 138 | |||||||||||||||||||||||||||||
| Corporate and Other | — | — | 9 | 61 | (558) | 11 | |||||||||||||||||||||||||||||
| Consolidated | $ | 6,081 | $ | 3,143 | $ | 1,106 | $ | 189 | $ | 1,036 | $ | 983 | |||||||||||||||||||||||
____________________________
(1)Includes accrued costs associated with the Tanami Expansion of $7, which are included in Lease and other financing obligations, and an increase in accrued capital expenditures of $20. Consolidated capital expenditures on a cash basis were $956.
(2)Costs applicable to sales includes amounts resulting from the profit-sharing agreement completed with the Peñasquito workforce during the second quarter of 2022. Under the agreement, the Company will pay its workforce an uncapped profit-sharing bonus each year, based on the agreed upon terms. Additionally, the terms of the agreement are retroactively applied to profit-sharing related to 2021 site performance, resulting in $70 recorded within Costs applicable to sales in the second quarter of 2022. The amounts related to the 2021 profit-sharing are expected to be paid in the third quarter of 2022.
15
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Sales | Costs Applicable to Sales | Depreciation and Amortization | Advanced Projects, Research and Development and Exploration | Income (Loss) before Income and Mining Tax and Other Items | Capital Expenditures (1) | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
| CC&V | $ | 215 | $ | 120 | $ | 34 | $ | 8 | $ | 52 | $ | 17 | |||||||||||||||||||||||
Musselwhite | 133 | 76 | 39 | 4 | 9 | 19 | |||||||||||||||||||||||||||||
Porcupine | 253 | 127 | 45 | 12 | 64 | 27 | |||||||||||||||||||||||||||||
Éléonore | 233 | 118 | 68 | 4 | 36 | 31 | |||||||||||||||||||||||||||||
Peñasquito: | |||||||||||||||||||||||||||||||||||
| Gold | 636 | 184 | 98 | ||||||||||||||||||||||||||||||||
| Silver | 343 | 150 | 80 | ||||||||||||||||||||||||||||||||
| Lead | 87 | 37 | 20 | ||||||||||||||||||||||||||||||||
| Zinc | 263 | 120 | 55 | ||||||||||||||||||||||||||||||||
| Total Peñasquito | 1,329 | 491 | 253 | 2 | 565 | 64 | |||||||||||||||||||||||||||||
| Other North America | — | — | 8 | 2 | (9) | — | |||||||||||||||||||||||||||||
| North America | 2,163 | 932 | 447 | 32 | 717 | 158 | |||||||||||||||||||||||||||||
| Yanacocha | 233 | 82 | 51 | 6 | 44 | 43 | |||||||||||||||||||||||||||||
| Merian | 389 | 164 | 51 | 4 | 157 | 20 | |||||||||||||||||||||||||||||
Cerro Negro | 226 | 109 | 65 | 2 | 40 | 48 | |||||||||||||||||||||||||||||
| Other South America | — | — | 3 | 15 | (30) | — | |||||||||||||||||||||||||||||
| South America | 848 | 355 | 170 | 27 | 211 | 111 | |||||||||||||||||||||||||||||
| Boddington: | |||||||||||||||||||||||||||||||||||
| Gold | 588 | 293 | 47 | ||||||||||||||||||||||||||||||||
| Copper | 132 | 65 | 10 | ||||||||||||||||||||||||||||||||
| Total Boddington | 720 | 358 | 57 | 4 | 300 | 137 | |||||||||||||||||||||||||||||
| Tanami | 418 | 135 | 46 | 11 | 225 | 127 | |||||||||||||||||||||||||||||
| Other Australia | — | — | 3 | 6 | (10) | 3 | |||||||||||||||||||||||||||||
| Australia | 1,138 | 493 | 106 | 21 | 515 | 267 | |||||||||||||||||||||||||||||
| Ahafo | 376 | 184 | 66 | 8 | 111 | 77 | |||||||||||||||||||||||||||||
| Akyem | 350 | 122 | 60 | 3 | 163 | 20 | |||||||||||||||||||||||||||||
| Other Africa | — | — | — | 1 | (5) | — | |||||||||||||||||||||||||||||
| Africa | 726 | 306 | 126 | 12 | 269 | 97 | |||||||||||||||||||||||||||||
| Nevada Gold Mines | 1,062 | 442 | 255 | 14 | 337 | 117 | |||||||||||||||||||||||||||||
| Nevada | 1,062 | 442 | 255 | 14 | 337 | 117 | |||||||||||||||||||||||||||||
| Corporate and Other | — | — | 10 | 49 | (363) | 10 | |||||||||||||||||||||||||||||
| Consolidated | $ | 5,937 | $ | 2,528 | $ | 1,114 | $ | 155 | $ | 1,686 | $ | 760 | |||||||||||||||||||||||
____________________________
(1)Includes a decrease in accrued capital expenditures of $54; consolidated capital expenditures on a cash basis were $814.
16
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 4 SALES
The following tables present the Company’s Sales by mining operation, product and inventory type:
| Gold Sales from Doré Production | Sales from Concentrate and Other Production | Total Sales | |||||||||||||||
| Three Months Ended June 30, 2022 | |||||||||||||||||
| CC&V | $ | 85 | $ | — | $ | 85 | |||||||||||
| Musselwhite | 73 | — | 73 | ||||||||||||||
| Porcupine | 125 | — | 125 | ||||||||||||||
| Éléonore | 87 | — | 87 | ||||||||||||||
| Peñasquito: | |||||||||||||||||
| Gold | 25 | 205 | 230 | ||||||||||||||
Silver (1) | — | 140 | 140 | ||||||||||||||
| Lead | — | 28 | 28 | ||||||||||||||
| Zinc | — | 92 | 92 | ||||||||||||||
| Total Peñasquito | 25 | 465 | 490 | ||||||||||||||
| North America | 395 | 465 | 860 | ||||||||||||||
| Yanacocha | 129 | (1) | 128 | ||||||||||||||
| Merian | 178 | — | 178 | ||||||||||||||
| Cerro Negro | 145 | — | 145 | ||||||||||||||
| South America | 452 | (1) | 451 | ||||||||||||||
| Boddington: | |||||||||||||||||
| Gold | 107 | 322 | 429 | ||||||||||||||
| Copper | — | 76 | 76 | ||||||||||||||
| Total Boddington | 107 | 398 | 505 | ||||||||||||||
| Tanami | 249 | — | 249 | ||||||||||||||
| Australia | 356 | 398 | 754 | ||||||||||||||
| Ahafo | 253 | — | 253 | ||||||||||||||
| Akyem | 203 | — | 203 | ||||||||||||||
| Africa | 456 | — | 456 | ||||||||||||||
Nevada Gold Mines (2) | 521 | 16 | 537 | ||||||||||||||
| Nevada | 521 | 16 | 537 | ||||||||||||||
| Consolidated | $ | 2,180 | $ | 878 | $ | 3,058 | |||||||||||
____________________________
(1)Silver sales from concentrate includes $20 related to non-cash amortization of the silver streaming agreement liability.
(2)The Company purchases its proportionate share of gold doré from NGM for resale to third parties. Gold doré purchases from NGM totaled $525 for the three months ended June 30, 2022.
17
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Gold Sales from Doré Production | Sales from Concentrate and Other Production | Total Sales | |||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||
| CC&V | $ | 116 | $ | — | $ | 116 | |||||||||||
| Musselwhite | 63 | — | 63 | ||||||||||||||
| Porcupine | 122 | — | 122 | ||||||||||||||
| Éléonore | 124 | — | 124 | ||||||||||||||
| Peñasquito: | |||||||||||||||||
| Gold | 66 | 260 | 326 | ||||||||||||||
Silver (1) | — | 175 | 175 | ||||||||||||||
| Lead | — | 43 | 43 | ||||||||||||||
| Zinc | — | 137 | 137 | ||||||||||||||
| Total Peñasquito | 66 | 615 | 681 | ||||||||||||||
| North America | 491 | 615 | 1,106 | ||||||||||||||
| Yanacocha | 115 | 8 | 123 | ||||||||||||||
| Merian | 196 | — | 196 | ||||||||||||||
| Cerro Negro | 142 | — | 142 | ||||||||||||||
| South America | 453 | 8 | 461 | ||||||||||||||
| Boddington: | |||||||||||||||||
| Gold | 85 | 259 | 344 | ||||||||||||||
| Copper | — | 80 | 80 | ||||||||||||||
| Total Boddington | 85 | 339 | 424 | ||||||||||||||
| Tanami | 199 | — | 199 | ||||||||||||||
| Australia | 284 | 339 | 623 | ||||||||||||||
| Ahafo | 189 | — | 189 | ||||||||||||||
| Akyem | 163 | — | 163 | ||||||||||||||
| Africa | 352 | — | 352 | ||||||||||||||
Nevada Gold Mines (2) | 505 | 18 | 523 | ||||||||||||||
| Nevada | 505 | 18 | 523 | ||||||||||||||
| Consolidated | $ | 2,085 | $ | 980 | $ | 3,065 | |||||||||||
____________________________
(1)Silver sales from concentrate includes $18 related to non-cash amortization of the silver streaming agreement liability.
(2)The Company purchases its proportionate share of gold doré from NGM for resale to third parties. Gold doré purchases from NGM totaled $505 for the three months ended June 30, 2021.
18
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Gold Sales from Doré Production | Sales from Concentrate and Other Production | Total Sales | |||||||||||||||
| Six Months Ended June 30, 2022 | |||||||||||||||||
| CC&V | $ | 148 | $ | 5 | $ | 153 | |||||||||||
| Musselwhite | 133 | — | 133 | ||||||||||||||
| Porcupine | 239 | — | 239 | ||||||||||||||
| Éléonore | 181 | — | 181 | ||||||||||||||
| Peñasquito: | |||||||||||||||||
| Gold | 56 | 426 | 482 | ||||||||||||||
Silver (1) | — | 296 | 296 | ||||||||||||||
| Lead | — | 72 | 72 | ||||||||||||||
| Zinc | — | 302 | 302 | ||||||||||||||
| Total Peñasquito | 56 | 1,096 | 1,152 | ||||||||||||||
| North America | 757 | 1,101 | 1,858 | ||||||||||||||
| Yanacocha | 256 | (1) | 255 | ||||||||||||||
| Merian | 373 | — | 373 | ||||||||||||||
| Cerro Negro | 267 | — | 267 | ||||||||||||||
| South America | 896 | (1) | 895 | ||||||||||||||
| Boddington: | |||||||||||||||||
| Gold | 198 | 612 | 810 | ||||||||||||||
| Copper | — | 175 | 175 | ||||||||||||||
| Total Boddington | 198 | 787 | 985 | ||||||||||||||
| Tanami | 435 | — | 435 | ||||||||||||||
| Australia | 633 | 787 | 1,420 | ||||||||||||||
| Ahafo | 455 | — | 455 | ||||||||||||||
| Akyem | 372 | — | 372 | ||||||||||||||
| Africa | 827 | — | 827 | ||||||||||||||
Nevada Gold Mines (2) | 1,050 | 31 | 1,081 | ||||||||||||||
| Nevada | 1,050 | 31 | 1,081 | ||||||||||||||
| Consolidated | $ | 4,163 | $ | 1,918 | $ | 6,081 | |||||||||||
____________________________
(1)Silver sales from concentrate includes $39 related to non-cash amortization of the silver streaming agreement liability.
(2)The Company purchases its proportionate share of gold doré from NGM for resale to third parties. Gold doré purchases from NGM totaled $1,051 for the six months ended June 30, 2022.
19
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Gold Sales from Doré Production | Sales from Concentrate and Other Production | Total Sales | |||||||||||||||
| Six Months Ended June 30, 2021 | |||||||||||||||||
| CC&V | $ | 215 | $ | — | $ | 215 | |||||||||||
| Musselwhite | 133 | — | 133 | ||||||||||||||
| Porcupine | 253 | — | 253 | ||||||||||||||
| Éléonore | 233 | — | 233 | ||||||||||||||
| Peñasquito: | |||||||||||||||||
| Gold | 122 | 514 | 636 | ||||||||||||||
Silver (1) | — | 343 | 343 | ||||||||||||||
| Lead | — | 87 | 87 | ||||||||||||||
| Zinc | — | 263 | 263 | ||||||||||||||
| Total Peñasquito | 122 | 1,207 | 1,329 | ||||||||||||||
| North America | 956 | 1,207 | 2,163 | ||||||||||||||
| Yanacocha | 224 | 9 | 233 | ||||||||||||||
| Merian | 389 | — | 389 | ||||||||||||||
| Cerro Negro | 226 | — | 226 | ||||||||||||||
| South America | 839 | 9 | 848 | ||||||||||||||
| Boddington: | |||||||||||||||||
| Gold | 151 | 437 | 588 | ||||||||||||||
| Copper | — | 132 | 132 | ||||||||||||||
| Total Boddington | 151 | 569 | 720 | ||||||||||||||
| Tanami | 418 | — | 418 | ||||||||||||||
| Australia | 569 | 569 | 1,138 | ||||||||||||||
| Ahafo | 376 | — | 376 | ||||||||||||||
| Akyem | 350 | — | 350 | ||||||||||||||
| Africa | 726 | — | 726 | ||||||||||||||
Nevada Gold Mines (2) | 1,030 | 32 | 1,062 | ||||||||||||||
| Nevada | 1,030 | 32 | 1,062 | ||||||||||||||
| Consolidated | $ | 4,120 | $ | 1,817 | $ | 5,937 | |||||||||||
____________________________
(1)Silver sales from concentrate includes $38 related to non-cash amortization of the silver streaming agreement liability.
(2)The Company purchases its proportionate share of gold doré from NGM for resale to third parties. Gold doré purchases from NGM totaled $1,026 for the six months ended June 30, 2021.
Trade Receivables
The following table details the receivables included within Trade receivables:
| At June 30, 2022 | At December 31, 2021 | ||||||||||
| Gold sales from doré production | $ | — | $ | 40 | |||||||
| Sales from concentrate and other production | 364 | 297 | |||||||||
| Trade receivables | $ | 364 | $ | 337 | |||||||
Provisional Sales
The impact to Sales from revenue recognized due to the changes in pricing on provisional sales is a (decrease) increase of $(105) and $29 for the three months ended June 30, 2022 and 2021, respectively and a decrease of $(47) and $(7) for the six months ended June 30, 2022 and 2021, respectively.
20
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
At June 30, 2022, Newmont had the following provisionally priced concentrate sales subject to final pricing over the next several months:
| Provisionally Priced Sales Subject to Final Pricing (ounces/pounds) | Average Provisional Price (per ounce/pound) | ||||||||||
| Gold (ounces, in thousands) | 200 | $ | 1,810 | ||||||||
| Copper (pounds, in millions) | 31 | $ | 3.74 | ||||||||
| Silver (ounces, in millions) | 4 | $ | 20.35 | ||||||||
| Lead (pounds, in millions) | 16 | $ | 0.87 | ||||||||
| Zinc (pounds, in millions) | 85 | $ | 1.44 | ||||||||
NOTE 5 RECLAMATION AND REMEDIATION
The Company’s mining and exploration activities are subject to various domestic and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations to protect public health and the environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation and remediation costs are based principally on current legal and regulatory requirements.
The Company’s Reclamation and remediation expense consisted of:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Reclamation adjustments and other | $ | 1 | $ | 2 | $ | 2 | $ | 11 | |||||||||||||||
| Reclamation accretion | 43 | 30 | 86 | 62 | |||||||||||||||||||
| Reclamation expense | 44 | 32 | 88 | 73 | |||||||||||||||||||
| Remediation adjustments and other | 3 | 22 | 19 | 26 | |||||||||||||||||||
| Remediation accretion | 2 | 3 | 3 | 4 | |||||||||||||||||||
| Remediation expense | 5 | 25 | 22 | 30 | |||||||||||||||||||
| Reclamation and remediation | $ | 49 | $ | 57 | $ | 110 | $ | 103 | |||||||||||||||
The following are reconciliations of Reclamation and remediation liabilities:
| Reclamation | Remediation | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Balance at January 1, | $ | 5,768 | $ | 3,719 | $ | 344 | $ | 313 | |||||||||||||||
Additions, changes in estimates and other (1) | 13 | 7 | 13 | 21 | |||||||||||||||||||
| Payments, net | (78) | (37) | (23) | (17) | |||||||||||||||||||
| Accretion expense | 86 | 62 | 3 | 4 | |||||||||||||||||||
Balance at June 30, | $ | 5,789 | $ | 3,751 | $ | 337 | $ | 321 | |||||||||||||||
(1)The $13 addition to remediation for the six months ended June 30, 2022 is due to expected higher waste disposal costs at Midnite Mine. The $21 addition to remediation for the six months ended June 30, 2021 is primarily due to revisions to estimated construction costs of the water treatment plant at Midnite Mine.
| At June 30, 2022 | At December 31, 2021 | ||||||||||||||||||||||||||||||||||
| Reclamation | Remediation | Total | Reclamation | Remediation | Total | ||||||||||||||||||||||||||||||
Current (1) | $ | 210 | $ | 72 | $ | 282 | $ | 213 | $ | 60 | $ | 273 | |||||||||||||||||||||||
Non-current (2) | 5,579 | 265 | 5,844 | 5,555 | 284 | 5,839 | |||||||||||||||||||||||||||||
Total (3) | $ | 5,789 | $ | 337 | $ | 6,126 | $ | 5,768 | $ | 344 | $ | 6,112 | |||||||||||||||||||||||
(1)The current portion of reclamation and remediation liabilities are included in Other current liabilities.
(2)The non-current portion of reclamation and remediation liabilities are included in Reclamation and remediation liabilities.
(3)Total reclamation liabilities includes $3,242 and $3,250 related to Yanacocha at June 30, 2022 and December 31, 2021, respectively.
The Company is also involved in several matters concerning environmental remediation obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various
21
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
sites involved. Depending upon the ultimate resolution of these matters, the Company believes that it is reasonably possible that the liability for these matters could be as much as 53% greater or —% lower than the amount accrued at June 30, 2022. The amounts accrued are reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are recorded in Other current liabilities and Reclamation and remediation liabilities in the period estimates are revised.
Included in Other non-current assets at June 30, 2022 and December 31, 2021 are $62 and $49 respectively, of non-current restricted cash held for purposes of settling reclamation and remediation obligations. Of the amounts at June 30, 2022, $50 related to the Ahafo and Akyem mines in Ghana, Africa and $3 related to NGM in Nevada, U.S., $7 related to the Midnite mine and Dawn mill site in Washington, U.S. and $2 related to the Ross Adams mine in Alaska, U.S. Of the amounts at December 31, 2021, $40 related to the Ahafo and Akyem mines in Ghana, Africa, $4 related to NGM in Nevada, U.S., $3 related to the Midnite mine site in Washington, U.S. and $2 related to the Ross Adams mine in Alaska, U.S.
Included in Other non-current assets at June 30, 2022 and December 31, 2021 are $36 and $51, respectively, of non-current restricted investments, which are legally pledged for purposes of settling reclamation and remediation obligations. Of the amounts at June 30, 2022, $7 related to the Midnite mine and Dawn mill sites in Washington, U.S., $7 related to Akyem in Ghana, Africa and $22 related to San Jose Reservoir in Peru, South America. Of the amounts at December 31, 2021, $11 related to the Midnite mine and Dawn mill sites in Washington, U.S., $16 related to Akyem in Ghana, Africa and $24 related to the San Jose Reservoir in Peru, South America.
Refer to Note 17 for further discussion of reclamation and remediation matters.
NOTE 6 OTHER EXPENSE, NET
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| COVID-19 specific costs | $ | 10 | $ | 20 | $ | 27 | $ | 42 | |||||||||||||||
| Settlement costs | 5 | 8 | 18 | 11 | |||||||||||||||||||
| Impairment of long-lived and other assets | 2 | 11 | 2 | 12 | |||||||||||||||||||
| Restructuring and severance | — | 5 | 1 | 10 | |||||||||||||||||||
| Care and maintenance costs | — | 2 | — | 2 | |||||||||||||||||||
| Other | 5 | 6 | 9 | 14 | |||||||||||||||||||
| Other expense, net | $ | 22 | $ | 52 | $ | 57 | $ | 91 | |||||||||||||||
NOTE 7 OTHER INCOME (LOSS), NET
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Pension settlement | $ | — | $ | — | $ | (130) | $ | — | |||||||||||||||
| Change in fair value of investments | (135) | 26 | (96) | (84) | |||||||||||||||||||
Gain (loss) on asset and investment sales, net (1) | — | — | (35) | 43 | |||||||||||||||||||
| Foreign currency exchange, net | 27 | 8 | 28 | 31 | |||||||||||||||||||
Other (2) | 33 | 16 | 49 | 21 | |||||||||||||||||||
| Other income (loss), net | $ | (75) | $ | 50 | $ | (184) | $ | 11 | |||||||||||||||
(1)Primarily comprised of the loss recognized on the sale of the La Zanja equity method investment for the six months ended June 30, 2022 (see Note 1 for additional information) and the sale of all of the Company’s outstanding shares of TMAC to Agnico Eagle Mines Ltd which resulted in a gain of $42 for the six months ended June 30, 2021.
(2)Includes a reimbursement of certain historical Goldcorp operational expenses related to a legacy project that reached commercial production in the second quarter of 2022.
Pension settlement. In March 2022, the Company executed an annuitization to transfer a portion of the pension plan obligations from one of the Company's U.S. qualified defined benefit pension plans to an insurance company using plan assets. As a result, $527 of the previously recognized pension obligations were transferred and a non-cash settlement loss of $130 was recognized in Other income (loss), net, during the first quarter of 2022 due to the recognition of the related unrecognized actuarial losses previously included in Accumulated other comprehensive income (loss) related to these retirees. The remaining pension obligations and plan assets of the associated qualified pension benefit plan were valued at $302 and $348, respectively, resulting in a net funded status of $46 recorded in Other non-current assets on the Condensed Consolidated Balance Sheets.
22
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 8 INCOME AND MINING TAXES
A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate follows:
Three Months Ended June 30, (1) | Six Months Ended June 30, (1) | ||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) before income and mining tax and other items | $ | 408 | $ | 943 | $ | 1,036 | $ | 1,686 | |||||||||||||||||||||||||||||||||||||||
| U.S. Federal statutory tax rate | 21 | % | $ | 86 | 21 | % | $ | 198 | 21 | % | $ | 218 | 21 | % | $ | 354 | |||||||||||||||||||||||||||||||
| Reconciling items: | |||||||||||||||||||||||||||||||||||||||||||||||
| Change in valuation allowance on deferred tax assets | 9 | 37 | 1 | 9 | 5 | 49 | 2 | 30 | |||||||||||||||||||||||||||||||||||||||
| Foreign rate differential | 12 | 50 | 9 | 85 | 12 | 119 | 9 | 155 | |||||||||||||||||||||||||||||||||||||||
| Mining and other taxes (net of associated federal benefit) | 6 | 22 | 5 | 47 | 6 | 59 | 5 | 88 | |||||||||||||||||||||||||||||||||||||||
Tax impact of foreign exchange (2) | (6) | (23) | 1 | 11 | (3) | (26) | (1) | (17) | |||||||||||||||||||||||||||||||||||||||
Mexico Tax Settlement (3) | (31) | (125) | — | — | (12) | (125) | — | — | |||||||||||||||||||||||||||||||||||||||
| Other | (3) | (14) | (1) | (9) | (5) | (47) | (2) | (34) | |||||||||||||||||||||||||||||||||||||||
| Income and mining tax expense (benefit) | 8 | % | $ | 33 | 36 | % | $ | 341 | 24 | % | $ | 247 | 34 | % | $ | 576 | |||||||||||||||||||||||||||||||
____________________________
(1)Tax rates may not recalculate due to rounding.
(2)Tax impact of foreign exchange includes the following: (i) Mexican inflation on tax values, (ii) currency translation effects of local currency deferred tax assets and deferred tax liabilities, (iii) the tax impact of local currency foreign exchange gains or losses and (iv) non-taxable or non-deductible U.S. dollar currency foreign exchange gains or losses.
(3)Following the framework established with the Mexican Tax Authority in the fourth quarter of 2021, a full settlement was entered into during the second quarter of 2022, which resulted in a net tax benefit of $125, primarily consisting of a reduction in the related uncertain tax position of $95.
NOTE 9 FAIR VALUE ACCOUNTING
The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Refer to Note 15 of the Consolidated Financial Statements included in Part II of the Company's Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022 for further information on the Company's assets and liabilities included in the fair value hierarchy presented below.
Fair Value at June 30, 2022 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 4,307 | $ | 4,307 | $ | — | $ | — | |||||||||||||||
| Restricted cash | 63 | 63 | — | — | |||||||||||||||||||
| Trade receivable from provisional sales, net | 363 | — | 363 | — | |||||||||||||||||||
Marketable and other equity securities (Note 10) (1) | 215 | 201 | 14 | — | |||||||||||||||||||
Restricted marketable debt securities (Note 10) | 29 | 25 | 4 | — | |||||||||||||||||||
Restricted other assets (Note 10) | 7 | 7 | — | — | |||||||||||||||||||
| Contingent consideration assets | 181 | — | — | 181 | |||||||||||||||||||
| $ | 5,165 | $ | 4,603 | $ | 381 | $ | 181 | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Debt (2) | $ | 5,354 | $ | — | $ | 5,354 | $ | — | |||||||||||||||
| Contingent consideration liabilities | 5 | — | — | 5 | |||||||||||||||||||
| $ | 5,359 | $ | — | $ | 5,354 | $ | 5 | ||||||||||||||||
23
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
| Fair Value at December 31, 2021 | |||||||||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 4,992 | $ | 4,992 | $ | — | $ | — | |||||||||||||||
| Restricted cash | 101 | 101 | — | — | |||||||||||||||||||
| Trade receivable from provisional sales, net | 297 | — | 297 | — | |||||||||||||||||||
| Assets held for sale | 68 | — | 68 | — | |||||||||||||||||||
Marketable and other equity securities (Note 10) (1) | 335 | 318 | 17 | — | |||||||||||||||||||
Restricted marketable debt securities (Note 10) | 35 | 28 | 7 | — | |||||||||||||||||||
Restricted other assets (Note 10) | 16 | 16 | — | — | |||||||||||||||||||
| Contingent consideration assets | 171 | — | — | 171 | |||||||||||||||||||
| $ | 6,015 | $ | 5,455 | $ | 389 | $ | 171 | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Debt (2) | $ | 6,712 | $ | — | $ | 6,712 | $ | — | |||||||||||||||
| Contingent consideration liabilities | 5 | — | — | 5 | |||||||||||||||||||
| Other | 6 | — | 6 | — | |||||||||||||||||||
| $ | 6,723 | $ | — | $ | 6,718 | $ | 5 | ||||||||||||||||
(1)Marketable equity securities includes warrants reported in the Maverix Metals Inc. equity method investment balance of $7 and $8 at June 30, 2022 and December 31, 2021, respectively.
(2)Debt is carried at amortized cost. The outstanding carrying value was $5,568 and $5,652 at June 30, 2022 and December 31, 2021, respectively. The fair value measurement of debt was based on an independent third-party pricing source.
The following tables set forth a summary of the quantitative and qualitative information related to the significant observable and unobservable inputs used in the calculation of the Company’s Level 3 financial assets and liabilities at June 30, 2022 and December 31, 2021:
| Description | At June 30, 2022 | Valuation Technique | Significant Input | Range, Point Estimate or Average | ||||||||||||||||||||||||||||
| Contingent consideration assets | $ | 181 | Discounted cash flow | Discount rate (1) | 5.71 - 9.54 | % | ||||||||||||||||||||||||||
| Contingent consideration liabilities | $ | 5 | Discounted cash flow | Discount rate (1) | 3.41 - 4.21 | % | ||||||||||||||||||||||||||
(1)The weighted average discount rates used to calculate the Company’s contingent consideration assets and liabilities are 5.98% and 3.73%, respectively. Various other inputs including, but not limited to, metal prices and production profiles were considered in determining the fair value of the individual contingent consideration assets and liabilities.
| Description | At December 31, 2021 | Valuation Technique | Significant Input | Range, Point Estimate or Average | ||||||||||||||||||||||||||||
Contingent consideration assets | $ | 171 | Discounted cash flow | Discount rate (1) | 4.48 - 5.88 | % | ||||||||||||||||||||||||||
| Contingent consideration liabilities | $ | 5 | Discounted cash flow | Discount rate (1) | 2.48 - 3.35 | % | ||||||||||||||||||||||||||
(1)The weighted average discount rate used to calculate the Company’s contingent consideration assets and liabilities are 5.63% and 2.83%, respectively. Various other inputs including, but not limited to, metal prices and production profiles were considered in determining the fair value of the individual contingent consideration assets and liabilities.
24
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
The following tables set forth a summary of changes in the fair value of the Company’s recurring Level 3 financial assets and liabilities:
Contingent Consideration Assets (1) | Total Assets | Contingent Consideration Liabilities | Total Liabilities | ||||||||||||||||||||
| Fair value at December 31, 2021 | $ | 171 | $ | 171 | $ | 5 | $ | 5 | |||||||||||||||
| Additions and settlements | — | — | — | — | |||||||||||||||||||
| Revaluation | 10 | 10 | — | — | |||||||||||||||||||
| Fair value at June 30, 2022 | $ | 181 | $ | 181 | $ | 5 | $ | 5 | |||||||||||||||
Contingent Consideration Assets (1) | Total Assets | ||||||||||
| Fair value at December 31, 2020 | $ | 119 | $ | 119 | |||||||
| Additions and settlements | — | — | |||||||||
| Revaluation | 36 | 36 | |||||||||
| Fair value at June 30, 2021 | $ | 155 | $ | 155 | |||||||
(1)The gain (loss) recognized on revaluation is included in Net income (loss) from discontinued operations for the six months ended June 30, 2022 and 2021.
NOTE 10 INVESTMENTS
| At June 30, 2022 | At December 31, 2021 | ||||||||||
| Current: | |||||||||||
| Marketable equity securities | $ | 51 | $ | 82 | |||||||
| Non-current: | |||||||||||
Marketable and other equity securities (1) | $ | 222 | $ | 307 | |||||||
| Equity method investments: | |||||||||||
Pueblo Viejo Mine (40.0%) | $ | 1,361 | $ | 1,320 | |||||||
NuevaUnión Project (50.0%) | 952 | 950 | |||||||||
Norte Abierto Project (50.0%) | 510 | 505 | |||||||||
Maverix Metals, Inc. (28.5% and 28.6%, respectively) | 157 | 160 | |||||||||
| Other | 1 | 1 | |||||||||
| 2,981 | 2,936 | ||||||||||
| $ | 3,203 | $ | 3,243 | ||||||||
Non-current restricted investments: (2) | |||||||||||
| Marketable debt securities | $ | 29 | $ | 35 | |||||||
| Other assets | 7 | 16 | |||||||||
| $ | 36 | $ | 51 | ||||||||
____________________________
(1)Includes equity interest held in QuestEx Gold & Copper Ltd. (“QuestEx”) at December 31, 2021. During the second quarter of 2022, Skeena Resources Limited ("Skeena") acquired all of the issued and outstanding shares of QuestEx. In lieu of exchanging the Company's QuestEx shares, Skeena issued a $5 promissory note, representing the fair value of the shares, to the Company. Concurrently, the Company purchased certain properties acquired by Skeena for total consideration of $20 which included cash consideration of $15 and settlement of the promissory note of $5.
(2)Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations and are included in Other non-current assets. Refer to Note 5 for further information regarding these amounts.
Equity method investments
Income (loss) from the Company's equity method investments is recognized in Equity income (loss) of affiliates, which for the three and six months ended June 30, 2022 primarily consists of income of $23 and $58, respectively, from the Pueblo Viejo mine. Income (loss) from the Company's equity method investments is recognized in Equity income (loss) of affiliates, which for the three and six months ended June 30, 2021 primarily consists of income of $44 and $94, respectively, from the Pueblo Viejo mine.
25
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
See below for further information on the Company's equity method investments.
Pueblo Viejo
As of June 30, 2022 and December 31, 2021, the Company had outstanding shareholder loans to Pueblo Viejo of $312 and $260, with accrued interest of $5 and $3, respectively, included in the Pueblo Viejo equity method investment. Additionally, the Company has an unfunded commitment to Pueblo Viejo in the form of a revolving loan facility ("Revolving Facility"). There were no borrowings outstanding under the Revolving Facility as of June 30, 2022.
The Company purchases its portion (40%) of gold and silver produced from Pueblo Viejo at market price and resells those ounces to third parties. Total payments made to Pueblo Viejo for gold and silver purchased were $129 and $267 for the three and six months ended June 30, 2022, respectively. Total payments made to Pueblo Viejo for gold and silver purchased were $151 and $322 for the three and six months ended June 30, 2021, respectively. These purchases, net of subsequent sales, are included in Other income (loss), net and the net amount is immaterial. There were no amounts due to or due from Pueblo Viejo for gold and silver purchases as of June 30, 2022 or December 31, 2021.
NOTE 11 INVENTORIES
| At June 30, 2022 | At December 31, 2021 | ||||||||||
| Materials and supplies | $ | 710 | $ | 669 | |||||||
| In-process | 125 | 132 | |||||||||
Concentrate (1) | 42 | 58 | |||||||||
Precious metals (2) | 45 | 71 | |||||||||
| Inventories | $ | 922 | $ | 930 | |||||||
____________________________
(1)Concentrate includes gold, copper, silver, lead and zinc.
(2)Precious metals includes gold and silver doré.
NOTE 12 STOCKPILES AND ORE ON LEACH PADS
| At June 30, 2022 | At December 31, 2021 | ||||||||||||||||||||||||||||||||||
| Stockpiles | Ore on Leach Pads | Total | Stockpiles | Ore on Leach Pads | Total | ||||||||||||||||||||||||||||||
| Current | $ | 418 | $ | 334 | $ | 752 | $ | 491 | $ | 366 | $ | 857 | |||||||||||||||||||||||
| Non-current | 1,461 | 327 | 1,788 | 1,442 | 333 | 1,775 | |||||||||||||||||||||||||||||
| Total | $ | 1,879 | $ | 661 | $ | 2,540 | $ | 1,933 | $ | 699 | $ | 2,632 | |||||||||||||||||||||||
During the three and six months ended June 30, 2022, the Company recorded write-downs of $29 and $38, respectively, classified as a component of Costs applicable to sales and write-downs of $11 and $14, respectively, classified as components of Depreciation and amortization, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs during the three months ended June 30, 2022, $37 was related to NGM and $3 to CC&V. Of the write-downs during the six months ended June 30, 2022, $39 was related to NGM, $9 to CC&V and $4 to Merian.
During the three and six months ended June 30, 2021, the Company recorded write-downs of $5 and $19, respectively, classified as a component of Costs applicable to sales and write-downs of $1 and $8, respectively, classified as components of Depreciation and amortization, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs during the three months ended June 30, 2021, $6 was related to CC&V. Of the write-downs during the six months ended June 30, 2021, $11 was related to CC&V and $16 to NGM.
26
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 13 DEBT
Scheduled minimum debt repayments are as follows:
| Year Ending December 31, | |||||
2022 (for the remainder of 2022) | $ | — | |||
| 2023 | — | ||||
| 2024 | — | ||||
| 2025 | — | ||||
| 2026 | — | ||||
| Thereafter | 5,624 | ||||
| Debt | $ | 5,624 | |||
In January 2022, the Company fully redeemed all of the outstanding 3.700% 2023 Goldcorp Senior Notes. The redemption price of $90 equaled the principal amount of the outstanding 2023 Goldcorp Senior Notes of $87 plus accrued and unpaid interest and future coupon payments in accordance with the terms of the 2023 Goldcorp Senior Notes.
NOTE 14 OTHER LIABILITIES
| At June 30, 2022 | At December 31, 2021 | ||||||||||
| Other current liabilities: | |||||||||||
| Reclamation and remediation liabilities | $ | 282 | $ | 273 | |||||||
| Accrued operating costs | 257 | 201 | |||||||||
| Accrued capital expenditures | 175 | 155 | |||||||||
Payables to NGM (1) | 74 | 114 | |||||||||
Other (2) | 333 | 430 | |||||||||
| $ | 1,121 | $ | 1,173 | ||||||||
| Other non-current liabilities: | |||||||||||
Income and mining taxes (3) | $ | 217 | $ | 328 | |||||||
Other (4) | 289 | 280 | |||||||||
| $ | 506 | $ | 608 | ||||||||
(1)Primarily consists of amounts due to (from) NGM representing Barrick's 61.5% proportionate share of the amount owed to NGM for gold and silver purchased by Newmont. Newmont’s 38.5% share of such amounts is eliminated upon proportionate consolidation of its interest in NGM. Receivables for Newmont's 38.5% proportionate share related to NGM's activities with Barrick are presented within Other current assets.
(2)Primarily consists of accrued interest, the current portion of the silver streaming agreement liability, royalties, taxes other than income and mining taxes and the current portion of the Norte Abierto deferred payments.
(3)Includes unrecognized tax benefits, including penalties and interest.
(4)Primarily consists of the non-current portion of the Norte Abierto deferred payments, the Galore Creek deferred payments and social development and community obligations.
27
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 15 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
| Unrealized Gain (Loss) on Investment Securities, net | Foreign Currency Translation Adjustments | Pension and Other Post-retirement Benefit Adjustments | Unrealized Gain (Loss) on Cash flow Hedge Instruments | Total | |||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | 2 | $ | 119 | $ | (166) | $ | (88) | $ | (133) | |||||||||||||||||||
Net current-period other comprehensive income (loss): | |||||||||||||||||||||||||||||
| Gain (loss) in other comprehensive income (loss) before reclassifications | (2) | 1 | 17 | — | 16 | ||||||||||||||||||||||||
(Gain) loss reclassified from accumulated other comprehensive income (loss) (1) | — | — | 104 | 2 | 106 | ||||||||||||||||||||||||
| Other comprehensive income (loss) | (2) | 1 | 121 | 2 | 122 | ||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | — | $ | 120 | $ | (45) | $ | (86) | $ | (11) | |||||||||||||||||||
(1)The $104 loss, reclassified from Accumulated other comprehensive income (loss) for Pension and other post-retirement benefit adjustments primarily relates to the $130 settlement loss, net of $27 tax, recognized as a result of the group annuity purchase in March 2022. Refer to Note 7 for additional information. All other reclassifications from Accumulated other comprehensive income (loss) were immaterial for the six months ended June 30, 2022.
NOTE 16 NET CHANGE IN OPERATING ASSETS AND LIABILITIES
Net cash provided by (used in) operating activities of continuing operations attributable to the net change in operating assets and liabilities is composed of the following:
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Decrease (increase) in operating assets: | |||||||||||
| Trade and other receivables | $ | 45 | $ | (46) | |||||||
| Inventories, stockpiles and ore on leach pads | (47) | (169) | |||||||||
| Other assets | (72) | 108 | |||||||||
| Increase (decrease) in operating liabilities: | |||||||||||
| Accounts payable | 55 | (39) | |||||||||
| Reclamation and remediation liabilities | (101) | (54) | |||||||||
| Accrued tax liabilities | (347) | (308) | |||||||||
| Other accrued liabilities | (35) | (83) | |||||||||
| Net change in operating assets and liabilities | $ | (502) | $ | (591) | |||||||
NOTE 17 COMMITMENTS AND CONTINGENCIES
General
Estimated losses from contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the contingency and estimated range of loss, if determinable, is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.
Operating Segments
The Company’s operating and reportable segments are identified in Note 3. Except as noted in this paragraph, all of the Company’s commitments and contingencies specifically described herein are included in Corporate and Other. The Yanacocha matters relate to the South America reportable segment. The Newmont Ghana Gold and Newmont Golden Ridge matters relate to the Africa reportable segment. The CC&V matter and the Mexico tax matter relates to the North America reportable segment.
28
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
Environmental Matters
Refer to Note 5 for further information regarding reclamation and remediation. Details about certain significant matters are discussed below.
Minera Yanacocha S.R.L. - 100% Newmont Owned
In early 2015 and again in June 2017, the Peruvian government agency responsible for certain environmental regulations, the Ministry of the Environment (“MINAM”), issued proposed modifications to water quality criteria for designated beneficial uses which apply to mining companies, including Yanacocha. These criteria modified the in-stream water quality criteria pursuant to which Yanacocha has been designing water treatment processes and infrastructure. In December 2015, MINAM issued the final regulation that modified the water quality standards. These Peruvian regulations allow time to formulate a compliance plan and make any necessary changes to achieve compliance.
In February 2017, Yanacocha submitted a modification to its previously approved compliance achievement plan to the MINEM. The Company did not receive a response or comments to this submission until April 2021. During this interim period, Yanacocha separately submitted an Environmental Impact Assessment ("EIA") modification considering the ongoing operations and the projects to be developed and obtained authorization from MINEM for such projects. This authorization included a deadline for compliance with the modified water quality criteria by January 2024. In May 2022, Yanacocha submitted a proposed modification to this plan requesting an extension of time for coming into full compliance with the new regulations by January 2027. In the event that MINEM does not grant Yanacocha an extension of the previously authorized timeline for, and agree to, the updated compliance achievement plan, fines and penalties relating to noncompliance may result beyond January 2024.
The Company currently operates five water treatment plants at Yanacocha that have been and currently meet all currently applicable water discharge requirements. The Company is conducting detailed studies to better estimate water management and other closure activities that will ensure water quality and quantity discharge requirements, including the modifications promulgated by MINAM, as referenced above, will be met. This also includes performing a comprehensive update to the Yanacocha reclamation plan to address changes in closure activities and estimated closure costs while preserving optionality for potential future projects at Yanacocha. These ongoing studies, which will extend beyond the current year, continue to evaluate and revise assumptions and estimated costs of changes to the reclamation plan. While certain estimated costs remain subject to revision, the Company’s asset retirement obligation at December 31, 2021 included updates primarily to the expected construction of two water treatment plants, a related increase in the annual operating costs over the extended closure period, and initial consideration of known risks (including the associated risk that these water treatment estimates could change in the future as more work is completed). However, these and other additional risks and contingencies that are the subject of ongoing studies could result in future material increases to the reclamation obligation at Yanacocha, including, but not limited to, a comprehensive review of the Company's tailings storage facility management, review of Yanacocha’s water balance and storm water management system, and review of post-closure management costs. The ongoing studies, which are progressing in 2022, are intended to evaluate and further understand these risks and determine what, if any, additional modification may be required to the reclamation plan. The Company expects these studies to extend beyond the current year, and as a result, the Company is currently unable to reasonably estimate the impacts these risks, if realized, may have on the reclamation obligation as of June 30, 2022.
Yanacocha experienced heavy rainfall in early 2022, above average historical levels, which resulted in significant water balance stress and required active emergency management. Yanacocha has been in communication with Organismo Evaluación y Fiscalización Ambiental (“OEFA”), under MINAM, and local government regarding the emergency measures undertaken and contingency planning. Yanacocha was able to prevent any offsite release of untreated water, but did need to accumulate untreated water in mine pits. If accumulation in pits or other emergency measures are deemed a violation of existing permits, it could result in fines and penalties for unauthorized discharge. Such fines and penalties, if ultimately assessed, are currently unknown and otherwise cannot be reasonably estimated at this time. Extended periods of rainfall, more extreme storm events or increased overall rainfall beyond historical or planned levels may also result in flooding or stress of mine pits and maintenance and storage facilities (e.g., tailings water), unpermitted off-site discharges, delays to planned study work, increased cost related to water infrastructure adjustments and potential negative impacts to permitting and operations.
In March 2022, Sumitomo exercised its option to require Yanacocha to repurchase its 5% interest, which closed during the second quarter of 2022. As of June 30, 2022, the Company holds 100% ownership interest in Yanacocha. Refer to Note 1 for further information.
Cripple Creek & Victor Gold Mining Company LLC - 100% Newmont Owned
In December 2021, Cripple Creek & Victor Gold Mining Company LLC (“CC&V”, a wholly-owned subsidiary of the Company) entered into a Settlement Agreement (“Settlement Agreement”) with the Water Quality Control Division of the Colorado Department of Public Health and Environment (the “Division”) with a mutual objective of resolving issues associated with the new discharge permits issued by the Division in January 2021 for the historic Carlton Tunnel. The Carlton Tunnel was a historic tunnel completed in 1941 with the purpose of draining the southern portion of the mining district, subsequently consolidated by CC&V. CC&V has held discharge permits for the Carlton Tunnel since 1983, but the January 2021 new permits contained new water quality limits. The Settlement Agreement, once implemented through permit modification applications, would involve installation of interim passive water treatment
29
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
and ongoing monitoring over the next three years, and then more long-term water treatment installed with target compliance by November 2027. The Company is currently considering various interim passive water treatment options, with related studies expected to be progressed in 2022, and based on an evaluation of those options, a remediation liability of $10 was recorded as of December 31, 2021. If one of these passive water treatment options is determined not to be a viable long-term water treatment strategy, CC&V may be required to develop and implement alternative remediation plans for water discharged from the Carlton Tunnel. Depending on the remediation plans that may ultimately be agreed with the Division, a material adjustment to the remediation liability may be required.
Dawn Mining Company LLC (“Dawn”) - 58.19% Newmont Owned
Midnite mine site and Dawn mill site. Dawn previously leased an open pit uranium mine, currently inactive, on the Spokane Indian Reservation in the State of Washington. The mine site is subject to regulation by agencies of the U.S. Department of Interior (the Bureau of Indian Affairs and the Bureau of Land Management), as well as the EPA.
As per the Consent Decree approved by the U.S. District Court for the Eastern District of Washington on January 17, 2012, the following actions were required of Newmont, Dawn, the Department of the Interior and the EPA: (i) Newmont and Dawn would design, construct and implement the cleanup plan selected by the EPA in 2006 for the Midnite mine site; (ii) Newmont and Dawn would reimburse the EPA for its past costs associated with overseeing the work; (iii) the Department of the Interior would contribute a lump sum amount toward past EPA costs and future costs related to the cleanup of the Midnite mine site; (iv) Newmont and Dawn would be responsible for all future EPA oversight costs and Midnite mine site cleanup costs; and (v) Newmont would post a surety bond for work at the site.
During 2012, the Department of Interior contributed its share of past EPA costs and future costs related to the cleanup of the Midnite mine site in a lump sum payment of $42, which Newmont classified as restricted assets with interest on the Consolidated Balance Sheets for all periods presented. In 2016, Newmont completed the remedial design process, with the exception of the new WTP design which was awaiting the approval of the new NPDES permit. Subsequently, the new NPDES permit was received in 2017 and the WTP design commenced in 2018. The EPA completed their assessment and approval of the WTP design in 2021 and Newmont has selected contractors for the construction of the new water treatment plant and effluent pipeline. Construction of the effluent pipeline began in 2021, and construction of the new WTP will begin this year.
The Dawn mill site is regulated by the Washington Department of Health and is in the process of being closed in accordance with the federal Uranium Mill Tailings Radiation Control Act, and associated Washington state regulations. Remediation at the Dawn mill site began in 2013. The Tailing Disposal Area 1-4 reclamation earthworks component was completed during 2017 with the embankment erosion protection completed in the second quarter of 2018. The remaining closure activities will consist primarily of finalizing an Alternative Concentration Limit application submitted in 2020 to the Washington Department of Health to address groundwater issues, and also evaporating the remaining balance of process water at the site.
The remediation liability for the Midnite mine site and Dawn mill site is approximately $165 at June 30, 2022.
Other Legal Matters
Minera Yanacocha S.R.L. - 100% Newmont Owned
Administrative Actions. The Peruvian government agency responsible for environmental evaluation and inspection, Organismo Evaluación y Fiscalización Ambiental (“OEFA”), conducts periodic reviews of the Yanacocha site. From 2011 to the third quarter of 2021, OEFA issued notices of alleged violations of OEFA standards to Yanacocha and Conga relating to past inspections. The water authority that is in charge of supervising the proper water administration has also issued notices of alleged regulatory violations in previous years. The experience with OEFA and the water authority is that in the case of a finding of violation, remedial action is often the outcome rather than a significant fine. There are no current alleged OEFA violations and the water authority alleged violations range from zero to 10 units, with each unit having a potential fine equivalent to approximately $.001110 based on current exchange rates, with a total potential fine amount for outstanding matters of $— to $0.01. Yanacocha is responding to all notices of alleged violations, but cannot reasonably predict the outcome of the agency allegations.
Conga Project Constitutional Claim. On October 18, 2012, Marco Antonio Arana Zegarra filed a constitutional claim against the Ministry of Energy and Mines and Yanacocha requesting the Court to order the suspension of the Conga project as well as to declare not applicable the October 27, 2010, directorial resolution approving the Conga project EIA. On October 23, 2012, a Cajamarca judge dismissed the claims based on formal grounds finding that: (i) plaintiffs had not exhausted previous administrative proceedings; (ii) the directorial resolution approving the Conga EIA is valid, and was not challenged when issued in the administrative proceedings; (iii) there was inadequate evidence to conclude that the Conga project is a threat to the constitutional right of living in an adequate environment; and (iv) the directorial resolution approving the Conga project EIA does not guarantee that the Conga project will proceed, so there was no imminent threat to be addressed by the Court. The plaintiffs appealed the dismissal of the case. The Civil Court of the Superior Court of Cajamarca confirmed the above mentioned resolution and the plaintiff presented an appeal. On March 13, 2015, the Constitutional Court published its ruling stating that the case should be sent back to the first court with an order to formally admit the case and start the judicial process in order to review the claim and the proofs presented by the plaintiff. Yanacocha has answered the claim. Neither the Company nor Yanacocha can reasonably predict the outcome of this litigation.
30
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
Newmont Corporation, as well as Newmont Canada Corporation, and Newmont Canada FN Holdings ULC – 100% Newmont Owned
Kirkland Lake Gold Inc. (“Kirkland”) owns certain mining and mineral rights in northeastern Ontario, Canada, referred to here as the Holt-McDermott property, on which it suspended operations in April 2020. A subsidiary of the Company has a retained royalty obligation (“Holt royalty obligation”) to Royal Gold, Inc. (“Royal Gold”) for production on the Holt-McDermott property. In August 2020, the Company and Kirkland signed a Strategic Alliance Agreement (the “Kirkland Agreement”). As part of the Kirkland Agreement, the Company purchased an option (the “Holt option”) for $75 from Kirkland for the mining and mineral rights subject to the Holt royalty obligation. The Company has the right to exercise the Holt option and acquire ownership to the mineral interests subject to the Holt royalty obligation in the event Kirkland intends to resume operations and process material subject to the obligation. Kirkland has the right to assume the Company’s Holt royalty obligation at any time, in which case the Holt option would terminate.
On August 16, 2021, International Royalty Corporation (“IRC”), a wholly-owned subsidiary of Royal Gold, filed an action in the Supreme Court of Nova Scotia against Newmont Corporation, Newmont Canada Corporation, Newmont Canada FN Holdings ULC, and Kirkland. IRC alleges the Kirkland Agreement is oppressive to the interests of Royal Gold under the Nova Scotia Companies Act and the Canada Business Corporations Act, and that, by entering into the Kirkland Agreement, Newmont breached its contractual obligations to Royal Gold. IRC seeks declaratory relief, and $350 in alleged royalty payments that it claims Newmont expected to pay under the Holt royalty obligation, but for the Kirkland Agreement. Kirkland filed a motion seeking dismissal of the case against it, which the court heard in March 2022 and took under advisement. The Company intends to vigorously defend this matter, but cannot reasonably predict the outcome.
NWG Investments Inc. v. Fronteer Gold Inc.
In April 2011, Newmont acquired Fronteer Gold Inc. (“Fronteer”).
Fronteer acquired NewWest Gold Corporation (“NewWest Gold”) in September 2007. At the time of that acquisition, NWG Investments Inc. (“NWG”) owned approximately 86% of NewWest Gold and an individual named Jacob Safra owned or controlled 100% of NWG. Prior to its acquisition of NewWest Gold, Fronteer entered into a June 2007 lock-up agreement with NWG providing that, among other things, NWG would support Fronteer’s acquisition of NewWest Gold. At that time, Fronteer owned approximately 47% of Aurora Energy Resources Inc. (“Aurora”), which, among other things, had a uranium exploration project in Labrador, Canada.
NWG contends that, during the negotiations leading up to the lock-up agreement, Fronteer represented to NWG, among other things, that Aurora would commence uranium mining in Labrador by 2013, that this was a firm date, that Aurora faced no current environmental issues in Labrador and that Aurora’s competitors faced delays in commencing uranium mining. NWG further contends that it entered into the lock-up agreement and agreed to support Fronteer’s acquisition of NewWest Gold in reliance upon these purported representations. On October 11, 2007, less than three weeks after the Fronteer-NewWest Gold transaction closed, a member of the Nunatsiavut Assembly introduced a motion calling for the adoption of a moratorium on uranium mining in Labrador. On April 8, 2008, the Nunatsiavut Assembly adopted a three-year moratorium on uranium mining in Labrador. NWG contends that Fronteer was aware during the negotiations of the NWG/Fronteer lock-up agreement that the Nunatsiavut Assembly planned on adopting this moratorium and that its adoption would preclude Aurora from commencing uranium mining by 2013, but Fronteer nonetheless fraudulently induced NWG to enter into the lock-up agreement.
On September 24, 2012, NWG served a summons and complaint on the Company, and then amended the complaint to add Newmont Canada Holdings ULC as a defendant. The complaint also named Fronteer Gold Inc. and Mark O’Dea as defendants. The complaint sought rescission of the merger between Fronteer and NewWest Gold and $750 in damages. In August 2013 the Supreme Court of New York, New York County issued an order granting the defendants’ motion to dismiss on forum non conveniens. Subsequently, NWG filed a notice of appeal of the decision and then a notice of dismissal of the appeal on March 24, 2014.
On February 26, 2014, NWG filed a lawsuit in Ontario Superior Court of Justice against Fronteer Gold Inc., Newmont Mining Corporation, Newmont Canada Holdings ULC, Newmont FH B.V. and Mark O’Dea. The Ontario complaint is based upon substantially the same allegations contained in the New York lawsuit with claims for fraudulent and negligent misrepresentation. NWG seeks disgorgement of profits since the close of the NWG deal on September 24, 2007 and damages in the amount of C$1,200. Newmont, along with other defendants, served the plaintiff with its statement of defense on October 17, 2014. Newmont intends to vigorously defend this matter, but cannot reasonably predict the outcome.
Newmont Ghana Gold Limited and Newmont Golden Ridge Limited - 100% Newmont Owned
On December 24, 2018, two individual plaintiffs, who are members of the Ghana Parliament (“Plaintiffs”), filed a writ to invoke the original jurisdiction of the Supreme Court of Ghana. On January 16, 2019, Plaintiffs filed the Statement of Plaintiff’s Case outlining the details of the Plaintiff’s case and subsequently served Newmont Ghana Gold Limited (“NGGL”) and Newmont Golden Ridge Limited (“NGRL”) along with the other named defendants, the Attorney General of Ghana, the Minerals Commission of Ghana and 33 other mining companies with interests in Ghana. The Plaintiffs allege that under article 268 of the 1992 Constitution of Ghana, the mining company defendants are not entitled to carry out any exploitation of minerals or other natural resources in Ghana, unless their respective transactions, contracts or concessions are ratified or exempted from ratification by the Parliament of Ghana. Newmont’s current mining leases are both ratified by Parliament; NGGL June 13, 2001 mining lease, ratified by Parliament on October 21, 2008,
31
NEWMONT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(dollars in millions, except per share, per ounce and per pound amounts)
and NGRL January 19, 2010 mining lease; ratified by Parliament on December 3, 2015. The writ alleges that any mineral exploitation prior to Parliamentary ratification is unconstitutional. The Plaintiffs seek several remedies including: (i) a declaration as to the meaning of constitutional language at issue; (ii) an injunction precluding exploitation of minerals for any mining company without prior Parliamentary ratification; (iii) a declaration that all revenue as a result of violation of the Constitution shall be accounted for and recovered via cash equivalent; and (iv) an order that the Attorney General and Minerals Commission submit all un-ratified mining leases, undertakings or contracts to Parliament for ratification. Newmont intends to vigorously defend this matter, but cannot reasonably predict the outcome.
Mexico Tax Matter
Tax Reassessment from Mexican Tax Authority. During 2016, the Mexican Tax Authority issued reassessment notices to several of Goldcorp, Inc.’s Mexican subsidiaries. Topics under dispute generally involve transfer pricing, deductibility of mine stripping costs, and gain recognized on certain asset sales. The Company has made significant progress in reaching resolution with the Mexican Tax Authority on these matters. In the second quarter of 2019, a number of issues were settled, resulting in a $96 payment, which was previously accrued in the financial statements. In the first quarter of 2020, further settlement was reached for an immaterial amount, with dialogue continuing in an effort to resolve the outstanding reassessment. During the fourth quarter of 2021, a framework to settle a number of years and matters was reached, resulting in a $76 payment, which was previously accrued in the financial statements. Following the framework previously reached, full settlement of these years and matters was reached, with no further payment being made. Refer to Note 8 for further information on the settlement.
Other Commitments and Contingencies
Newmont is from time to time involved in various legal proceedings related to its business. Except in the above described proceedings, management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be required to be paid by reason thereof will have a material adverse effect on the Company’s financial condition or results of operations.
In connection with the Company's investment in Galore Creek, Newmont will owe NovaGold Resources Inc. $75 upon the earlier of approval to construct a mine, mill and all related infrastructure for the Galore Creek project or the initiation of construction of a mine, mill or any related infrastructure. The amount due is non-interest bearing. The decision for an approval and commencement of construction is contingent on the results of a prefeasibility and feasibility study, neither of which have occurred. As such, this amount has not been accrued.
Deferred payments to Barrick of $122 and $124 as of June 30, 2022 and December 31, 2021, respectively, are to be satisfied through funding a portion of Barrick’s share of project expenditures at the Norte Abierto project. These deferred payments to Barrick are included in Other current liabilities and Other non-current liabilities.
32
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in millions, except per share, per ounce and per pound amounts)
The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Newmont Corporation, a Delaware corporation, and its subsidiaries (collectively, “Newmont,” the “Company,” “our” and “we”). Please see Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis for the non-GAAP financial measures used in this MD&A by the Company.
This item should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this quarterly report. Additionally, the following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations and the Consolidated Financial Statements included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022.
Overview
Newmont is the world’s leading gold company and is the only gold company included in the S&P 500 Index and the Fortune 500 list of companies. We have been included in the Dow Jones Sustainability Index-World since 2007 and have adopted the World Gold Council’s Conflict-Free Gold Policy. Since 2015, Newmont has been ranked as the mining and metal sector's top gold miner by the S&P Global Corporate Sustainability Assessment. Newmont was ranked the top miner in 3BL Media’s 100 Best Corporate Citizens list which ranks the 1,000 largest publicly traded U.S. companies on ESG transparency and performance since 2020.
We are primarily engaged in the exploration for and acquisition of gold properties, some of which may contain copper, silver, lead, zinc or other metals. We have significant operations and/or assets in the U.S., Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia and Ghana.
Refer to the Second Quarter 2022 Highlights, Consolidated Financial Results, Results of Consolidated Operations, Liquidity and Capital Resources and Non-GAAP Financial Measures for information about the continued impacts of the COVID-19 pandemic on the Company. Also see discussion of Risk and Uncertainties within Note 2 of the Condensed Consolidated Financial Statements, relating to inflationary pressures and supply chain disruptions, with particular consideration on the outlook for increased costs specific to labor, materials, consumables and fuel and energy on operations, as well as impacts on the timing and cost of capital expenditures. Additionally, we are currently evaluating the potential for increased costs and delays related to key development projects that may result from these factors.
In February 2022, the Company completed the acquisition of Buenaventura's 43.65% noncontrolling interest in Minera Yanacocha S.R.L. ("Yanacocha") (the "Yanacocha Transaction") and sold its 46.94% ownership interest in Minera La Zanja S.R.L. ("La Zanja"). Additionally, in March 2022, Sumitomo exercised its option to require Yanacocha to repurchase its 5% interest which closed in the second quarter of 2022. As of June 30, 2022, the Company holds 100% ownership interest in Yanacocha. Refer to Note 1 of the Condensed Consolidated Financial Statements for further details regarding these transactions.
We continue to focus on improving safety and efficiency at our operations, maintaining leading ESG practices, and sustaining our global portfolio of longer-life, lower cost mines to generate the financial flexibility we need to strategically reinvest in the business, strengthen the Company’s investment-grade balance sheet and return cash to shareholders.
Consolidated Financial Results
The details of our Net income (loss) from continuing operations attributable to Newmont stockholders are set forth below:
| Three Months Ended June 30, | Increase (Decrease) | ||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders | $ | 379 | $ | 640 | $ | (261) | |||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted | $ | 0.48 | $ | 0.80 | $ | (0.32) | |||||||||||
| Six Months Ended June 30, | Increase (Decrease) | ||||||||||||||||
| 2022 | 2021 | ||||||||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders | $ | 811 | $ | 1,178 | $ | (367) | |||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted | $ | 1.02 | $ | 1.47 | $ | (0.45) | |||||||||||
The decrease in Net income (loss) from continuing operations attributable to Newmont stockholders for the three months ended June 30, 2022, compared to the same period in 2021, is primarily due to higher Costs applicable to sales predominately resulting
33
from impacts due to cost inflation from increased input commodity prices, notably fuel and energy costs, as well as $70 related to the profit-sharing agreement entered into by the Company during the second quarter of 2022 (the "Peñasquito Profit-Sharing Agreement") and unrealized losses on marketable and other equity securities, partially offset by lower income tax expense.
The decrease in Net income (loss) from continuing operations attributable to Newmont stockholders for the six months ended June 30, 2022, compared to the same period in 2021, is primarily due to higher Costs applicable to sales predominately resulting from impacts from cost inflation due to increased input commodity prices, notably fuel and energy costs, as well as the Peñasquito Profit-Sharing Agreement, a non-cash pension settlement charge, unrealized losses on marketable and other equity securities, loss on the sale of the La Zanja equity method investment and lower sales volumes, partially offset by lower income tax expense and higher realized gold prices.
For further information on the Peñasquito Profit-Sharing Agreement, refer to Note 3 of the Condensed Consolidated Financial Statements.
The details of our Sales are set forth below. Refer to Note 4 of the Condensed Consolidated Financial Statements for further information.
| Three Months Ended June 30, | Increase (Decrease) | Percent Change | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Gold | $ | 2,722 | $ | 2,630 | $ | 92 | 3 | % | |||||||||||||||
| Copper | 76 | 80 | (4) | (5) | |||||||||||||||||||
| Silver | 140 | 175 | (35) | (20) | |||||||||||||||||||
| Lead | 28 | 43 | (15) | (35) | |||||||||||||||||||
| Zinc | 92 | 137 | (45) | (33) | |||||||||||||||||||
| $ | 3,058 | $ | 3,065 | $ | (7) | — | % | ||||||||||||||||
| Six Months Ended June 30, | Increase (Decrease) | Percent Change | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Gold | $ | 5,236 | $ | 5,112 | $ | 124 | 2 | % | |||||||||||||||
| Copper | 175 | 132 | 43 | 33 | |||||||||||||||||||
| Silver | 296 | 343 | (47) | (14) | |||||||||||||||||||
| Lead | 72 | 87 | (15) | (17) | |||||||||||||||||||
| Zinc | 302 | 263 | 39 | 15 | |||||||||||||||||||
| $ | 6,081 | $ | 5,937 | $ | 144 | 2 | % | ||||||||||||||||
The following analysis summarizes consolidated sales for the three months ended June 30, 2022:
| Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounces) | (pounds) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
| Consolidated sales: | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 2,754 | $ | 102 | $ | 148 | $ | 35 | $ | 150 | |||||||||||||||||||
| Provisional pricing mark-to-market | (21) | (23) | (15) | (6) | (40) | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 20 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 2,733 | 79 | 153 | 29 | 110 | ||||||||||||||||||||||||
| Treatment and refining charges | (11) | (3) | (13) | (1) | (18) | ||||||||||||||||||||||||
| Net | $ | 2,722 | $ | 76 | $ | 140 | $ | 28 | $ | 92 | |||||||||||||||||||
| Consolidated ounces (thousands)/pounds (millions) sold | 1,482 | 25 | 8,066 | 35 | 85 | ||||||||||||||||||||||||
Average realized price (per ounce/pound): (1) | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 1,858 | $ | 4.03 | $ | 18.41 | $ | 0.99 | $ | 1.76 | |||||||||||||||||||
| Provisional pricing mark-to-market | (14) | (0.92) | (1.81) | (0.16) | (0.47) | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 2.45 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 1,844 | 3.11 | 19.05 | 0.83 | 1.29 | ||||||||||||||||||||||||
| Treatment and refining charges | (8) | (0.12) | (1.63) | (0.03) | (0.21) | ||||||||||||||||||||||||
| Net | $ | 1,836 | $ | 2.99 | $ | 17.42 | $ | 0.80 | $ | 1.08 | |||||||||||||||||||
____________________________
(1)Per ounce/pound measures may not recalculate due to rounding.
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The following analysis summarizes consolidated sales for the three months ended June 30, 2021:
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounces) | (pounds) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
| Consolidated sales: | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 2,625 | $ | 81 | $ | 160 | $ | 41 | $ | 135 | |||||||||||||||||||
| Provisional pricing mark-to-market | 13 | 1 | 9 | 2 | 4 | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 18 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 2,638 | 82 | 187 | 43 | 139 | ||||||||||||||||||||||||
| Treatment and refining charges | (8) | (2) | (12) | — | (2) | ||||||||||||||||||||||||
| Net | $ | 2,630 | $ | 80 | $ | 175 | $ | 43 | $ | 137 | |||||||||||||||||||
| Consolidated ounces (thousands)/pounds (millions) sold | 1,444 | 19 | 7,615 | 42 | 102 | ||||||||||||||||||||||||
Average realized price (per ounce/pound): (1) | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 1,819 | $ | 4.40 | $ | 20.94 | $ | 0.97 | $ | 1.33 | |||||||||||||||||||
| Provisional pricing mark-to-market | 9 | 0.07 | 1.15 | 0.07 | 0.03 | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 2.44 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 1,828 | 4.47 | 24.53 | 1.04 | 1.36 | ||||||||||||||||||||||||
| Treatment and refining charges | (5) | (0.10) | (1.53) | (0.02) | (0.02) | ||||||||||||||||||||||||
| Net | $ | 1,823 | $ | 4.37 | $ | 23.00 | $ | 1.02 | $ | 1.34 | |||||||||||||||||||
____________________________
(1)Per ounce/pound measures may not recalculate due to rounding.
The following analysis summarizes consolidated sales for the six months ended June 30, 2022:
| Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounces) | (pounds) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
| Consolidated sales: | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 5,256 | $ | 194 | $ | 296 | $ | 79 | $ | 356 | |||||||||||||||||||
| Provisional pricing mark-to-market | 2 | (14) | (12) | (5) | (18) | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 39 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 5,258 | 180 | 323 | 74 | 338 | ||||||||||||||||||||||||
| Treatment and refining charges | (22) | (5) | (27) | (2) | (36) | ||||||||||||||||||||||||
| Net | $ | 5,236 | $ | 175 | $ | 296 | $ | 72 | $ | 302 | |||||||||||||||||||
| Consolidated ounces (thousands)/pounds (millions) sold | 2,811 | 46 | 15,718 | 77 | 205 | ||||||||||||||||||||||||
Average realized price (per ounce/pound): (1) | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 1,870 | $ | 4.24 | $ | 18.89 | $ | 1.03 | $ | 1.74 | |||||||||||||||||||
| Provisional pricing mark-to-market | 1 | (0.31) | (0.75) | (0.06) | (0.09) | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 2.45 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 1,871 | 3.93 | 20.59 | 0.97 | 1.65 | ||||||||||||||||||||||||
| Treatment and refining charges | (8) | (0.12) | (1.74) | (0.03) | (0.18) | ||||||||||||||||||||||||
| Net | $ | 1,863 | $ | 3.81 | $ | 18.85 | $ | 0.94 | $ | 1.47 | |||||||||||||||||||
____________________________
(1)Per ounce/pound measures may not recalculate due to rounding.
35
The following analysis summarizes consolidated sales for the six months ended June 30, 2021:
| Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounces) | (pounds) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
| Consolidated sales: | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 5,148 | $ | 129 | $ | 323 | $ | 100 | $ | 286 | |||||||||||||||||||
| Provisional pricing mark-to-market | (15) | 6 | 9 | (11) | 4 | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 39 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 5,133 | 135 | 371 | 89 | 290 | ||||||||||||||||||||||||
| Treatment and refining charges | (21) | (3) | (28) | (2) | (27) | ||||||||||||||||||||||||
| Net | $ | 5,112 | $ | 132 | $ | 343 | $ | 87 | $ | 263 | |||||||||||||||||||
| Consolidated ounces (thousands)/pounds (millions) sold | 2,861 | 31 | 16,146 | 92 | 221 | ||||||||||||||||||||||||
Average realized price (per ounce/pound): (1) | |||||||||||||||||||||||||||||
| Gross before provisional pricing and streaming impact | $ | 1,800 | $ | 4.21 | $ | 19.99 | $ | 1.08 | $ | 1.29 | |||||||||||||||||||
| Provisional pricing mark-to-market | (5) | 0.19 | 0.57 | (0.11) | 0.02 | ||||||||||||||||||||||||
| Silver streaming amortization | — | — | 2.44 | — | — | ||||||||||||||||||||||||
| Gross after provisional pricing and streaming impact | 1,795 | 4.40 | 23.00 | 0.97 | 1.31 | ||||||||||||||||||||||||
| Treatment and refining charges | (7) | (0.10) | (1.73) | (0.02) | (0.12) | ||||||||||||||||||||||||
| Net | $ | 1,788 | $ | 4.30 | $ | 21.27 | $ | 0.95 | $ | 1.19 | |||||||||||||||||||
____________________________
(1)Per ounce/pound measures may not recalculate due to rounding.
The change in consolidated sales is due to:
| Three Months Ended June 30, | |||||||||||||||||||||||||||||
2022 vs. 2021 | |||||||||||||||||||||||||||||
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounces) | (pounds) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
| Increase (decrease) in consolidated ounces/pounds sold | $ | 71 | $ | 24 | $ | 10 | $ | (6) | $ | (23) | |||||||||||||||||||
| Increase (decrease) in average realized price | 24 | (27) | (44) | (8) | (6) | ||||||||||||||||||||||||
| Decrease (increase) in treatment and refining charges | (3) | (1) | (1) | (1) | (16) | ||||||||||||||||||||||||
| $ | 92 | $ | (4) | $ | (35) | $ | (15) | $ | (45) | ||||||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||||||||
2022 vs. 2021 | |||||||||||||||||||||||||||||
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounces) | (pounds) | (ounces) | (pounds) | (pounds) | |||||||||||||||||||||||||
| Increase (decrease) in consolidated ounces/pounds sold | $ | (89) | $ | 52 | $ | (10) | $ | (15) | $ | (20) | |||||||||||||||||||
| Increase (decrease) in average realized price | 214 | (7) | (38) | — | 68 | ||||||||||||||||||||||||
| Decrease (increase) in treatment and refining charges | (1) | (2) | 1 | — | (9) | ||||||||||||||||||||||||
| $ | 124 | $ | 43 | $ | (47) | $ | (15) | $ | 39 | ||||||||||||||||||||
For discussion regarding drivers impacting sales volumes by site, see Results of Consolidated Operations below.
The details of our Costs applicable to sales are set forth below. Refer to Note 3 of the Condensed Consolidated Financial Statements for further information.
| Three Months Ended June 30, | Increase (decrease) | Percent Change | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Gold | $ | 1,381 | $ | 1,091 | $ | 290 | 27 | % | |||||||||||||||
| Copper | 49 | 38 | 11 | 29 | |||||||||||||||||||
| Silver | 155 | 75 | 80 | 107 | |||||||||||||||||||
| Lead | 29 | 18 | 11 | 61 | |||||||||||||||||||
| Zinc | 94 | 59 | 35 | 59 | |||||||||||||||||||
| $ | 1,708 | $ | 1,281 | $ | 427 | 33 | % | ||||||||||||||||
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| Six Months Ended June 30, | Increase (decrease) | Percent Change | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Gold | $ | 2,565 | $ | 2,156 | $ | 409 | 19 | % | |||||||||||||||
| Copper | 95 | 65 | 30 | 46 | |||||||||||||||||||
| Silver | 252 | 150 | 102 | 68 | |||||||||||||||||||
| Lead | 51 | 37 | 14 | 38 | |||||||||||||||||||
| Zinc | 180 | 120 | 60 | 50 | |||||||||||||||||||
| $ | 3,143 | $ | 2,528 | $ | 615 | 24 | % | ||||||||||||||||
The increase in Costs applicable to sales for gold during the three months ended June 30, 2022, compared to the same period in 2021, is primarily due to (i) an increase in labor costs, inflation and supply chain disruption which resulted in an increase in commodity inputs, including higher fuel and energy prices, arising from the COVID-19 pandemic and the Russian invasion of Ukraine (the "Input Cost Inflation Impacts"), (ii) the Peñasquito Profit-Sharing Agreement, (iii) higher inventory adjustments at NGM and (iv) higher sales volumes partially offset by higher allocation of costs to co-products. The increase in Costs applicable to sales for gold during the six months ended June 30, 2022, compared to the same period in 2021, is primarily due to the Input Cost Inflation Impacts, Peñasquito Profit-Sharing Agreement and higher inventory adjustments at NGM, partially offset by lower sales volumes and higher allocation of costs to co-products.
The increase in Costs applicable to sales for copper during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to the Input Cost Inflation Impacts, higher sales volumes, higher co-product allocation of costs at Boddington and higher shipping costs at Boddington partially offset by favorable Australian dollar foreign currency exchange rate.
The increase in Costs applicable to sales for silver during the three months ended June 30, 2022, compared to the same periods in 2021, is primarily due to the Input Cost Inflation Impacts, the Peñasquito Profit-Sharing Agreement, higher co-product allocation of costs and higher sales volumes. The increase in Costs applicable to sales for silver during the six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to the Input Cost Inflation Impacts, the Peñasquito Profit-Sharing Agreement and higher co-product allocation of costs, partially offset by lower sales volumes.
The increase in Costs applicable to sales for lead during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to the Input Cost Inflation Impacts and the Peñasquito Profit-Sharing Agreement, partially offset by lower sales volumes at Peñasquito.
The increase in Costs applicable to sales for zinc during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to the Input Cost Inflation Impacts, the Peñasquito Profit-Sharing Agreement and higher co-product allocation of costs, partially offset by lower sales volumes at Peñasquito.
The details of our Depreciation and amortization are set forth below. Refer to Note 3 of the Condensed Consolidated Financial Statements for further information.
| Three Months Ended June 30, | Increase (Decrease) | Percent Change | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Gold | $ | 466 | $ | 469 | $ | (3) | (1) | % | |||||||||||||||
| Copper | 9 | 6 | 3 | 50 | |||||||||||||||||||
| Silver | 42 | 39 | 3 | 8 | |||||||||||||||||||
| Lead | 8 | 10 | (2) | (20) | |||||||||||||||||||
| Zinc | 22 | 26 | (4) | (15) | |||||||||||||||||||
| Other | 12 | 11 | 1 | 9 | |||||||||||||||||||
| $ | 559 | $ | 561 | $ | (2) | — | % | ||||||||||||||||
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| Six Months Ended June 30, | Increase (Decrease) | Percent Change | |||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Gold | $ | 910 | $ | 925 | $ | (15) | (2) | % | |||||||||||||||
| Copper | 17 | 10 | 7 | 70 | |||||||||||||||||||
| Silver | 86 | 80 | 6 | 8 | |||||||||||||||||||
| Lead | 18 | 20 | (2) | (10) | |||||||||||||||||||
| Zinc | 57 | 55 | 2 | 4 | |||||||||||||||||||
| Other | 18 | 24 | (6) | (25) | |||||||||||||||||||
| $ | 1,106 | $ | 1,114 | $ | (8) | (1) | % | ||||||||||||||||
The decrease in Depreciation and amortization for gold during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to lower production volume at Peñasquito and Éléonore as a result of lower ore grade mined and lower mill recovery and higher allocation of costs to co-products, partially offset by higher production volumes at (i) Boddington as a result of higher ore grade milled and (ii) Ahafo as a result of higher mill throughput and higher ore grade milled. For the six months ended June 30, 2022, compared to the same period in 2021, the decrease to Depreciation and amortization for gold was further offset by higher mineral interest amortization at Cerro Negro.
The increase in Depreciation and amortization for copper during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to higher co-product allocation of costs at Boddington and higher production volumes.
The increase in Depreciation and amortization for silver during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to higher co-product allocation of costs at Peñasquito.
The decrease in Depreciation and amortization for lead during the three and six months ended June 30, 2022, compared to the same periods in 2021, is primarily due to lower co-product allocation of costs at Peñasquito.
The decrease in Depreciation and amortization for zinc during the three months ended June 30, 2022, compared to the same period in 2021, is primarily due to lower production volumes partially offset by higher co-product allocation of costs at Peñasquito. The increase in Depreciation and amortization for zinc during the six months ended June 30, 2022, compared to the same period in 2021, is primarily due to higher co-product allocation of costs at Peñasquito.
For discussion regarding variations in operations, see Results of Consolidated Operations below.
Advanced projects, research and development expense increased by $8 during the three months ended June 30, 2022, compared to the same period in 2021, primarily due to project spend relating to French Guiana and certain other development projects at Cerro Negro in South America and Galore Creek in Corporate partly offset by lower full potential spend at various sites. Advanced projects, research and development expense increased by $21 during the six months ended June 30, 2022, compared to the same period in 2021, primarily due to project spend relating to French Guiana and certain other development projects at Cerro Negro in South America and Galore Creek in Corporate and early-stage project study costs at Akyem in Africa partly offset by lower full potential spend at various sites.
Interest expense, net of capitalized interest decreased by $11 and $23 during the three and six months ended June 30, 2022 compared to the same periods in 2021, respectively, as a result of the repayment of debt throughout 2021 and into early 2022 and an increase in capitalized interest.
Income and mining tax expense (benefit) was $33 and $341, and $247 and $576 during the three and six months ended June 30, 2022 and 2021, respectively. The effective tax rate is driven by a number of factors and the comparability of our income tax expense for the reported periods will be primarily affected by (i) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) impacts of the changes in tax law; (iv) valuation allowances on tax assets; (v) percentage depletion; (vi) fluctuation in the value of the U.S. dollar and foreign currencies; and (vii) the impact of specific transactions and assessments. As a result, the effective tax rate will fluctuate, sometimes significantly, year to year. This trend is expected to continue in future periods. Refer to Note 8 of the Condensed Consolidated Financial Statements for further discussion of income taxes.
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| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||
Income (Loss) (1) | Effective Tax Rate | Income Tax (Benefit) Provision | Income (Loss) (1) | Effective Tax Rate | Income Tax (Benefit) Provision | ||||||||||||||||||||||||||||||||||||
| Nevada | $ | 90 | 10 | % | $ | 9 | (2) | $ | 168 | 17 | % | $ | 29 | (2) | |||||||||||||||||||||||||||
| CC&V | 6 | — | — | (3) | 33 | 9 | 3 | (3) | |||||||||||||||||||||||||||||||||
| Corporate & Other | (183) | 4 | (7) | (4) | (73) | 37 | (27) | (4) | |||||||||||||||||||||||||||||||||
| Total US | (87) | (2) | 2 | 128 | 4 | 5 | |||||||||||||||||||||||||||||||||||
| Australia | 379 | 33 | 125 | (5) | 270 | 36 | 97 | (5) | |||||||||||||||||||||||||||||||||
| Ghana | 153 | 35 | 54 | 119 | 34 | 41 | |||||||||||||||||||||||||||||||||||
| Suriname | 33 | 27 | 9 | (6) | 66 | 32 | 21 | (6) | |||||||||||||||||||||||||||||||||
| Peru | 1 | 100 | 1 | (7) | 37 | 151 | 56 | (7) | |||||||||||||||||||||||||||||||||
| Canada | (37) | 8 | (3) | (8) | 29 | 62 | 18 | (8) | |||||||||||||||||||||||||||||||||
| Mexico | (37) | 373 | (138) | (9) | 269 | 41 | 111 | (9) | |||||||||||||||||||||||||||||||||
| Argentina | (2) | 550 | (11) | (10) | (10) | (20) | 2 | (10) | |||||||||||||||||||||||||||||||||
| Other Foreign | 5 | 40 | 2 | 35 | — | — | |||||||||||||||||||||||||||||||||||
| Rate adjustments | — | N/A | (8) | (11) | — | N/A | (10) | (11) | |||||||||||||||||||||||||||||||||
| Consolidated | $ | 408 | 8 | % | (12) | $ | 33 | $ | 943 | 36 | % | (12) | $ | 341 | |||||||||||||||||||||||||||
(1)Represents income (loss) from continuing operations by geographic location before income taxes and equity income (loss) of affiliates. These amounts will not reconcile to the Segment Information for the reasons stated in Note 3.
(2)Includes deduction for percentage depletion of $(10) and $(15), mining taxes net of associated federal benefit of $6 and $8, and uncertain tax position reserve adjustment of $(6) and $—, respectively. Nevada includes the Company’s 38.5% interest in NGM.
(3)Includes deduction for percentage depletion of $— and $(5), respectively.
(4)Includes valuation allowance of $31 and $(16) and uncertain tax position reserve adjustment of $1 and $(1), respectively.
(5)Includes mining taxes net of associated federal benefit of $14 and $16 and tax impacts from the exposure to fluctuations in foreign currency of $11 and $1, respectively.
(6)Includes valuation allowance of $— and $1, respectively.
(7)Includes mining taxes net of associated federal benefit of $2 and $7, valuation allowance of $— and $30, and uncertain tax position reserve adjustment of $1 and $(2), respectively.
(8)Includes mining tax net of associated federal benefit of $— and $3, valuation allowance of $4 and $—, uncertain tax position reserve adjustment of $(1) and $2, and tax impacts from the exposure to fluctuations in foreign currency of $(2) and $(1), respectively.
(9)Includes mining tax net of associated federal benefit of $(1) and $14, valuation allowance of $— and $3, uncertain tax position reserve adjustment of $2 and $21, tax impact from the exposure to fluctuations in foreign currency of $(3) and $15, tax impact from prior year true-up adjustment of $— and $(25), and tax settlement of $(125) and $—, respectively.
(10)Includes tax impacts from the exposure to fluctuations in foreign currency of $(16) and $(3) and tax expense of $— and $11 due to the impact of the rate change on the deferred tax liability, respectively.
(11)In accordance with applicable accounting rules, the interim provision for income taxes is adjusted to equal the consolidated tax rate.
(12)The consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Variations in the relative proportions of jurisdictional income could result in fluctuations to our combined effective income tax rate.
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| Six Months Ended | |||||||||||||||||||||||||||||||||||||||||
| June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||
Income (Loss)(1) | Effective Tax Rate | Income Tax (Benefit) Provision | Income (Loss)(1) | Effective Tax Rate | Income Tax (Benefit) Provision | ||||||||||||||||||||||||||||||||||||
| Nevada | $ | 242 | 14 | % | $ | 34 | (2) | $ | 333 | 17 | % | $ | 57 | (2) | |||||||||||||||||||||||||||
| CC&V | — | — | — | (3) | 50 | 8 | 4 | (3) | |||||||||||||||||||||||||||||||||
| Corporate & Other | (367) | 14 | (50) | (4) | (305) | 15 | (46) | (4) | |||||||||||||||||||||||||||||||||
| Total US | (125) | 13 | (16) | 78 | 19 | 15 | |||||||||||||||||||||||||||||||||||
| Australia | 671 | 34 | 228 | (5) | 487 | 36 | 176 | (5) | |||||||||||||||||||||||||||||||||
| Ghana | 277 | 35 | 96 | 254 | 34 | 86 | |||||||||||||||||||||||||||||||||||
| Suriname | 104 | 27 | 28 | (6) | 146 | 29 | 43 | (6) | |||||||||||||||||||||||||||||||||
| Peru | 3 | 67 | 2 | (7) | 35 | 154 | 54 | (7) | |||||||||||||||||||||||||||||||||
| Canada | (86) | 5 | (4) | (8) | 119 | 26 | 31 | (8) | |||||||||||||||||||||||||||||||||
| Mexico | 188 | (20) | (38) | (9) | 542 | 34 | 184 | (9) | |||||||||||||||||||||||||||||||||
| Argentina | (7) | 400 | (28) | (10) | (19) | 47 | (9) | (10) | |||||||||||||||||||||||||||||||||
| Other Foreign | 11 | 18 | 2 | 44 | — | — | |||||||||||||||||||||||||||||||||||
| Rate adjustments | — | N/A | (23) | (11) | — | N/A | (4) | (11) | |||||||||||||||||||||||||||||||||
| Consolidated | $ | 1,036 | 24 | % | (12) | $ | 247 | $ | 1,686 | 34 | % | (12) | $ | 576 | |||||||||||||||||||||||||||
(1)Represents income (loss) from continuing operations by geographic location before income taxes and equity income (loss) of affiliates. These amounts will not reconcile to the Segment Information for the reasons stated in Note 3.
(2)Includes deduction for percentage depletion of $(24) and $(29), mining taxes net of associated federal benefit of $13 and $16, and uncertain tax position reserve adjustment of $(6) and $—, respectively. Nevada includes the Company’s 38.5% interest in NGM.
(3)Includes deduction for percentage depletion of $— and $(7), respectively.
(4)Includes valuation allowance of $37 and $9 and uncertain tax position reserve adjustment of $1 and $(1), respectively.
(5)Includes mining taxes net of associated federal benefit of $28 and $30 and tax impacts from the exposure to fluctuations in foreign currency of $6 and $5, respectively.
(6)Includes valuation allowance of $— and $1, respectively.
(7)Includes mining taxes net of associated federal benefit of $3 and $7, valuation allowance of $(1) and $29, and uncertain tax position reserve adjustment of $— and $(2), respectively.
(8)Includes mining tax net of associated federal benefit of $1 and $7, valuation allowance of $4 and $1, uncertain tax position reserve adjustment of $(4) and $3, and tax impacts from the exposure to fluctuations in foreign currency of $(3) and $1, respectively.
(9)Includes mining tax net of associated federal benefit of $14 and $28, valuation allowance of $— and $1, uncertain tax position reserve adjustment of $(6) and $21, tax impact from the exposure to fluctuations in foreign currency of $10 and $(4), tax impact from prior year true-up adjustment of $6 and $25, and tax settlement of $(125) and $—, respectively.
(10)Includes tax impacts from the exposure to fluctuations in foreign currency of $(34) and $(13) and tax expense of $— and $11 due to the impact of the rate change on the deferred tax liability, respectively.
(11)In accordance with applicable accounting rules, the interim provision for income taxes is adjusted to equal the consolidated tax rate.
(12)The consolidated effective income tax rate is a function of the combined effective tax rates for the jurisdictions in which we operate. Variations in the relative proportions of jurisdictional income could result in fluctuations to our combined effective income tax rate.
Refer to the Notes of the Condensed Consolidated Financial Statements for explanations of other financial statement line items.
Results of Consolidated Operations
Newmont has developed GEO metrics to provide a comparable basis for analysis and understanding of our operations and performance related to copper, silver, lead and zinc. Gold equivalent ounces are calculated as pounds or ounces produced or sold multiplied by the ratio of the other metals’ price to the gold price, using the metal prices in the table below:
| Gold | Copper | Silver | Lead | Zinc | |||||||||||||||||||||||||
| (ounce) | (pound) | (ounce) | (pound) | (pound) | |||||||||||||||||||||||||
2022 GEO Price | $ | 1,200 | $ | 3.25 | $ | 23.00 | $ | 0.95 | $ | 1.15 | |||||||||||||||||||
2021 GEO Price | $ | 1,200 | $ | 2.75 | $ | 22.00 | $ | 0.90 | $ | 1.05 | |||||||||||||||||||
Our mines continued to operate with robust controls, including heightened levels of health screening and testing to protect both our workforce and the local communities in which we operate as a result of the COVID-19 pandemic. We have adopted a risk-based approach to business travel, are continuing to provide flexible and remote working plans for employees and are maintaining effective contact tracing procedures. For the three and six months ended June 30, 2022, we incurred $10 and $27, respectively, of incremental direct costs related to our response to the COVID-19 pandemic, included in Other expense, net. For the three and six
40
months ended June 30, 2021, we incurred $20 and $42, respectively, of incremental direct costs related to our response to the COVID-19 pandemic, included in Other expense, net.
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization (2) | All-In Sustaining Costs (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| North America | 316 | 397 | $ | 1,124 | $ | 769 | $ | 374 | $ | 353 | $ | 1,437 | $ | 985 | |||||||||||||||||||||||||||||||||
| South America | 238 | 248 | 982 | 721 | 349 | 352 | 1,203 | 1,022 | |||||||||||||||||||||||||||||||||||||||
| Australia | 366 | 299 | 710 | 764 | 161 | 168 | 873 | 997 | |||||||||||||||||||||||||||||||||||||||
| Africa | 243 | 202 | 838 | 763 | 308 | 320 | 1,017 | 1,000 | |||||||||||||||||||||||||||||||||||||||
| Nevada | 290 | 284 | 1,035 | 753 | 435 | 448 | 1,263 | 985 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 1,453 | 1,430 | $ | 932 | $ | 755 | $ | 322 | $ | 332 | $ | 1,199 | $ | 1,035 | |||||||||||||||||||||||||||||||||
| Attributable to Newmont | 1,425 | 1,371 | |||||||||||||||||||||||||||||||||||||||||||||
| Gold equivalent ounces - other metals | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
North America (5) | 266 | 260 | $ | 1,054 | $ | 586 | $ | 276 | $ | 289 | $ | 1,349 | $ | 761 | |||||||||||||||||||||||||||||||||
Australia (6) | 64 | 43 | 710 | 898 | 135 | 143 | 829 | 1,113 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 330 | 303 | $ | 983 | $ | 629 | $ | 246 | $ | 269 | $ | 1,286 | $ | 886 | |||||||||||||||||||||||||||||||||
Attributable gold from equity method investments (7) | (ounces in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Pueblo Viejo (40%) | 70 | 78 | |||||||||||||||||||||||||||||||||||||||||||||
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization (2) | All-In Sustaining Costs (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| North America | 625 | 810 | $ | 1,061 | $ | 752 | $ | 387 | $ | 351 | $ | 1,336 | $ | 971 | |||||||||||||||||||||||||||||||||
| South America | 472 | 480 | 952 | 753 | 358 | 362 | 1,164 | 1,041 | |||||||||||||||||||||||||||||||||||||||
| Australia | 648 | 568 | 734 | 757 | 166 | 169 | 917 | 1,048 | |||||||||||||||||||||||||||||||||||||||
| Africa | 441 | 407 | 853 | 760 | 308 | 314 | 1,057 | 974 | |||||||||||||||||||||||||||||||||||||||
| Nevada | 578 | 587 | 967 | 749 | 435 | 432 | 1,176 | 924 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 2,764 | 2,852 | $ | 912 | $ | 754 | $ | 330 | $ | 332 | $ | 1,179 | $ | 1,037 | |||||||||||||||||||||||||||||||||
| Attributable to Newmont | 2,700 | 2,735 | |||||||||||||||||||||||||||||||||||||||||||||
| Gold equivalent ounces - other metals | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
North America (5) | 565 | 545 | $ | 864 | $ | 550 | $ | 288 | $ | 278 | $ | 1,140 | $ | 762 | |||||||||||||||||||||||||||||||||
Australia (6) | 115 | 75 | 765 | 913 | 139 | 146 | 895 | 1,231 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 680 | 620 | $ | 846 | $ | 590 | $ | 261 | $ | 263 | $ | 1,138 | $ | 851 | |||||||||||||||||||||||||||||||||
Attributable gold from equity method investments (7) | (ounces in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Pueblo Viejo (40%) | 139 | 169 | |||||||||||||||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)For the three and six months ended June 30, 2021, Depreciation and amortization includes $1 and $1 at Australia, respectively, in care and maintenance costs. There were no care and maintenance costs at Australia for the three and six months ended June 30, 2022.
(3)All-in sustaining costs is a non-GAAP financial measure. See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis. For the three and six months ended June 30, 2021, All-in sustaining costs includes $2 and $2 at Australia, respectively, in care and maintenance costs recorded in Other expense, net. There were no care and maintenance costs at Australia for the three and six months ended June 30, 2022.
(4)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.
(5)For the three months ended June 30, 2022, the Peñasquito mine in North America produced 7,733 thousand ounces of silver, 35 million pounds of lead and 94 million pounds of zinc. For the three months ended June 30, 2021, the Peñasquito mine in North America produced 7,428 thousand ounces of silver, 44 million pounds of lead and 105 million pounds of zinc. For the six months ended June 30, 2022, the Peñasquito mine in North America produced 15,813 thousand ounces of silver, 79 million pounds of lead and 208 million pounds of zinc. For the six months ended June 30, 2021, the Peñasquito mine in North America produced 15,590 thousand ounces of silver, 94 million pounds of lead and 216 million pounds of zinc.
41
(6)For the three months ended June 30, 2022 and 2021, the Boddington mine in Australia produced 24 million and 19 million pounds of copper, respectively. For the six months ended June 30, 2022 and 2021, the Boddington mine in Australia produced 43 million and 33 million pounds of copper, respectively.
(7)Income and expenses of equity method investments are included in Equity income (loss) of affiliates. Refer to Note 10 of the Condensed Consolidated Financial Statements for further discussion of our equity method investments.
Three months ended June 30, 2022 compared to 2021
Consolidated gold production increased 2% primarily due to higher ore grade milled and a drawdown of in-circuit inventory compared to a build-up in the prior year, partially offset by lower mill throughput and lower leach pad production. Consolidated gold equivalent ounces – other metals production increased 9% primarily due to higher ore grade milled.
Costs applicable to sales per consolidated gold ounce increased 23% primarily due to an increase in commodity inputs, including higher fuel and energy costs, resulting from inflation, lower by-product credits, higher inventory adjustments and the Peñasquito Profit-Sharing Agreement. Costs applicable to sales per consolidated gold equivalent ounce – other metals increased 56% primarily due to higher co-product allocation of costs to other metals, higher fuel and energy costs and the Peñasquito Profit-Sharing Agreement.
Depreciation and amortization per consolidated gold ounce decreased 3% primarily due to higher gold ounces sold. Depreciation and amortization per consolidated gold equivalent ounce – other metals decreased 9% primarily due to higher gold equivalent ounces - other metals sold.
All-in sustaining costs per consolidated gold ounce increased 16% primarily due to higher costs applicable to sales per gold ounce. All-in sustaining costs per consolidated gold equivalent ounce – other metals increased 45% primarily due to higher costs applicable to sales per gold equivalent ounce - other metals and higher treatment and refining costs.
Six months ended June 30, 2022 compared to 2021
Consolidated gold production decreased 3% primarily due to lower mill throughput and lower leach pad production. Consolidated gold equivalent ounces – other metals production increased 10% primarily due to higher ore grade milled.
Costs applicable to sales per consolidated gold ounce increased 21% primarily due to lower gold ounces sold, an increase in commodity inputs, including higher fuel and energy costs, resulting from inflation, lower by-product credits, and the Peñasquito Profit-Sharing Agreement. Costs applicable to sales per consolidated gold equivalent ounce – other metals increased 43% primarily due to higher co-product allocation of costs to other metals, higher fuel and energy costs and the Peñasquito Profit-Sharing Agreement.
Depreciation and amortization per consolidated gold ounce and depreciation and amortization per consolidated gold equivalent ounce – other metals were in line with the prior year.
All-in sustaining costs per consolidated gold ounce increased 14% primarily due to higher costs applicable to sales per gold ounce. All-in sustaining costs per consolidated gold equivalent ounce – other metals increased 34% primarily due to higher costs applicable to sales per gold equivalent ounce - other metals.
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North America Operations
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| CC&V | 43 | 59 | $ | 1,073 | $ | 931 | $ | 349 | $ | 265 | $ | 1,553 | $ | 1,142 | |||||||||||||||||||||||||||||||||
| Musselwhite | 39 | 33 | 1,331 | 1,069 | 488 | 542 | 1,693 | 1,420 | |||||||||||||||||||||||||||||||||||||||
| Porcupine | 68 | 66 | 1,062 | 916 | 356 | 312 | 1,328 | 1,193 | |||||||||||||||||||||||||||||||||||||||
| Éléonore | 45 | 69 | 1,520 | 972 | 595 | 537 | 1,922 | 1,287 | |||||||||||||||||||||||||||||||||||||||
| Peñasquito | 121 | 170 | 971 | 525 | 263 | 274 | 1,187 | 656 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (3) | 316 | 397 | $ | 1,124 | $ | 769 | $ | 374 | $ | 353 | $ | 1,437 | $ | 985 | |||||||||||||||||||||||||||||||||
| Gold equivalent ounces - other metals | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
Peñasquito (4) | 266 | 260 | $ | 1,054 | $ | 586 | $ | 276 | $ | 289 | $ | 1,347 | $ | 755 | |||||||||||||||||||||||||||||||||
Total/Weighted-Average (3) | 266 | 260 | $ | 1,054 | $ | 586 | $ | 276 | $ | 289 | $ | 1,349 | $ | 761 | |||||||||||||||||||||||||||||||||
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| CC&V | 78 | 120 | $ | 1,230 | $ | 1,005 | $ | 393 | $ | 289 | $ | 1,608 | $ | 1,209 | |||||||||||||||||||||||||||||||||
| Musselwhite | 71 | 69 | 1,342 | 1,037 | 496 | 529 | 1,670 | 1,359 | |||||||||||||||||||||||||||||||||||||||
| Porcupine | 127 | 141 | 1,077 | 904 | 364 | 319 | 1,313 | 1,146 | |||||||||||||||||||||||||||||||||||||||
| Éléonore | 91 | 132 | 1,380 | 926 | 583 | 533 | 1,734 | 1,258 | |||||||||||||||||||||||||||||||||||||||
| Peñasquito | 258 | 348 | 809 | 497 | 278 | 264 | 1,013 | 644 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (3) | 625 | 810 | $ | 1,061 | $ | 752 | $ | 387 | $ | 351 | $ | 1,336 | $ | 971 | |||||||||||||||||||||||||||||||||
| Gold equivalent ounces - other metals | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
Peñasquito (4) | 565 | 545 | $ | 864 | $ | 550 | $ | 288 | $ | 278 | $ | 1,138 | $ | 760 | |||||||||||||||||||||||||||||||||
Total/Weighted-Average (3) | 565 | 545 | $ | 864 | $ | 550 | $ | 288 | $ | 278 | $ | 1,140 | $ | 762 | |||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)All-in sustaining costs is a non-GAAP financial measure. See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
(3)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.
(4)For the three months ended June 30, 2022, Peñasquito produced 7,733 thousand ounces of silver, 35 million pounds of lead and 94 million pounds of zinc. For the three months ended June 30, 2021, Peñasquito produced 7,428 thousand ounces of silver, 44 million pounds of lead and 105 million pounds of zinc. For the six months ended June 30, 2022, Peñasquito produced 15,813 thousand ounces of silver, 79 million pounds of lead and 208 million pounds of zinc. For the six months ended June 30, 2021, Peñasquito produced 15,590 thousand ounces of silver, 94 million pounds of lead and 216 million pounds of zinc.
Three months ended June 30, 2022 compared to 2021
CC&V, USA. Gold production decreased 27% primarily due to lower leach pad recoveries and lower ore milled due to the mill shut down and temporary idling in the current year. Costs applicable to sales per gold ounce increased 15% primarily due to lower gold ounces sold. Depreciation and amortization per gold ounce increased 32% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 36% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital spend.
Musselwhite, Canada. Gold production increased 18% primarily due to higher mill throughput, partially offset by lower ore grade milled. Costs applicable to sales per gold ounce increased 25% primarily driven by higher contract labor costs and higher fuel and energy costs, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce decreased 10% primarily due to lower depreciation rates due to a longer mine life and higher gold ounces sold. All-in sustaining costs per gold ounce increased 19% primarily due to higher costs applicable to sales per gold ounce.
Porcupine, Canada. Gold production increased 3% primarily due to higher mill throughput, partially offset by lower ore grade milled. Costs applicable to sales per gold ounce increased 16% primarily due to higher fuel and energy costs, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce increased 14% primarily due to higher depreciation rates from asset
43
additions. All-in sustaining costs per gold ounce increased 11% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower advanced project spend.
Éléonore, Canada. Gold production decreased 35% primarily due to lower mill throughput and lower ore grade milled. Costs applicable to sales per gold ounce increased 56% primarily due to lower gold ounces sold and higher maintenance costs for underground equipment. Depreciation and amortization per gold ounce increased 11% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 49% primarily due to higher costs applicable to sales per gold ounce.
Peñasquito, Mexico. Gold production decreased 29% primarily due to lower ore grade milled and lower mill recovery. Gold equivalent ounces – other metals production increased 2% primarily due to higher ore grade milled. Costs applicable to sales per gold ounce increased 85% primarily due to the Peñasquito Profit-Sharing Agreement entered into during the second quarter of 2022, higher fuel and energy costs and lower gold ounces sold, partially offset by lower co-product allocation of costs to gold. Costs applicable to sales per gold equivalent ounce – other metals increased 80% primarily due to the Peñasquito Profit-Sharing Agreement entered into during the second quarter of 2022, higher co-product allocation of costs to gold equivalent ounces and higher fuel and energy costs. Depreciation and amortization per gold ounce decreased 4% primarily due to lower co-product allocation of costs to gold, partially offset by lower gold ounces sold. Depreciation and amortization per gold equivalent ounce – other metals decreased 4% primarily due to higher gold equivalent ounces - other metals sold, partially offset by higher co-product allocation of costs to other metals. All-in sustaining costs per gold ounce increased 81% primarily due to higher costs applicable to sales per gold ounce. All-in sustaining costs per gold equivalent ounce – other metals increased 78% primarily due to higher costs applicable to sales per gold equivalent ounce - other metals.
Six months ended June 30, 2022 compared to 2021
CC&V, USA. Gold production decreased 35% primarily due to lower leach pad recoveries and lower ore milled due to the mill shut down and temporary idling in the current year. Costs applicable to sales per gold ounce increased 22% primarily due to lower gold ounces sold. Depreciation and amortization per gold ounce increased 36% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 33% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital costs.
Musselwhite, Canada. Gold production increased 3% primarily due to higher mill throughput, partially offset by lower ore grade milled. Costs applicable to sales per gold ounce increased 29% primarily driven by higher contract labor costs, higher fuel and energy costs and lower gold ounces sold. Depreciation and amortization per gold ounce decreased 6% primarily due to lower depreciation rates due to a longer mine life. All-in sustaining costs per gold ounce increased 23% primarily due to higher costs applicable to sales per gold ounce.
Porcupine, Canada. Gold production decreased 10% primarily due to lower ore grade milled, partially offset by higher mill throughput. Costs applicable to sales per gold ounce increased 19% primarily due to higher fuel and energy costs and lower gold ounces sold. Depreciation and amortization per gold ounce increased 14% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 15% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower advanced project spend.
Éléonore, Canada. Gold production decreased 31% primarily due to lower mill throughput and lower ore grade milled. Costs applicable to sales per gold ounce increased 49% primarily due to lower gold ounces sold and higher maintenance costs for underground equipment. Depreciation and amortization per gold ounce increased 9% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 38% primarily due to higher costs applicable to sales per gold ounce.
Peñasquito, Mexico. Gold production decreased 26% primarily due to lower ore grade milled and lower mill recovery. Gold equivalent ounces – other metals production increased 4% primarily due to higher ore grade milled. Costs applicable to sales per gold ounce increased 63% primarily due to the Peñasquito Profit-Sharing Agreement entered into during the second quarter of 2022, higher fuel and energy costs and lower gold ounces sold, partially offset by lower co-product allocation of costs to gold. Costs applicable to sales per gold equivalent ounce – other metals increased 57% primarily due to the Peñasquito Profit-Sharing Agreement entered into during the second quarter of 2022, higher co-product allocation of costs to other metals and higher fuel and energy costs, partially offset by higher gold equivalent ounces - other metals sold. Depreciation and amortization per gold ounce increased 5% primarily due to lower gold ounces sold, partially offset by lower co-product allocation of costs to gold. Depreciation and amortization per gold equivalent ounce – other metals increased 4% primarily due to higher co-product allocation of costs to other metals. All-in sustaining costs per gold ounce increased 57% primarily due to higher costs applicable to sales per gold ounce. All-in sustaining costs per gold equivalent ounce – other metals increased 50% primarily due to higher costs applicable to sales per gold equivalent ounce - other metals.
44
South America Operations
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Yanacocha | 68 | 67 | $ | 1,058 | $ | 471 | $ | 315 | $ | 344 | $ | 1,321 | $ | 1,029 | |||||||||||||||||||||||||||||||||
| Merian | 96 | 105 | 972 | 767 | 207 | 236 | 1,173 | 909 | |||||||||||||||||||||||||||||||||||||||
| Cerro Negro | 74 | 76 | 926 | 875 | 541 | 501 | 1,106 | 1,133 | |||||||||||||||||||||||||||||||||||||||
Total / Weighted Average (3) | 238 | 248 | $ | 982 | $ | 721 | $ | 349 | $ | 352 | $ | 1,203 | $ | 1,022 | |||||||||||||||||||||||||||||||||
Yanacocha (—% and 48.65%, respectively) (4) | (3) | (32) | |||||||||||||||||||||||||||||||||||||||||||||
Merian (25%) | (25) | (27) | |||||||||||||||||||||||||||||||||||||||||||||
| Attributable to Newmont | 210 | 189 | |||||||||||||||||||||||||||||||||||||||||||||
Attributable gold from equity method investments (5) | (ounces in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Pueblo Viejo (40%) | 70 | 78 | |||||||||||||||||||||||||||||||||||||||||||||
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Yanacocha | 133 | 129 | $ | 1,022 | $ | 635 | $ | 340 | $ | 395 | $ | 1,243 | $ | 1,117 | |||||||||||||||||||||||||||||||||
| Merian | 197 | 219 | 906 | 758 | 211 | 235 | 1,079 | 887 | |||||||||||||||||||||||||||||||||||||||
| Cerro Negro | 142 | 132 | 948 | 868 | 568 | 524 | 1,172 | 1,181 | |||||||||||||||||||||||||||||||||||||||
Total / Weighted Average (3) | 472 | 480 | $ | 952 | $ | 753 | $ | 358 | $ | 362 | $ | 1,164 | $ | 1,041 | |||||||||||||||||||||||||||||||||
Yanacocha (—% and 48.65%, respectively) (4) | (14) | (62) | |||||||||||||||||||||||||||||||||||||||||||||
Merian (25%) | (50) | (55) | |||||||||||||||||||||||||||||||||||||||||||||
| Attributable to Newmont | 408 | 363 | |||||||||||||||||||||||||||||||||||||||||||||
Attributable gold from equity method investments (5) | (ounces in thousands) | ||||||||||||||||||||||||||||||||||||||||||||||
Pueblo Viejo (40%) | 139 | 169 | |||||||||||||||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)All-in sustaining costs is a non-GAAP financial measure. See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
(3)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.
(4)The Company acquired the remaining 5% interest in Yanacocha from Sumitomo during the second quarter of 2022, resulting in 100% ownership interest as of June 30, 2022. The Company recognized amounts attributable to non-controlling interests for Yanacocha during the three and six months ended June 30, 2022 for the period prior to acquiring 100% ownership. Refer to Note 1 of the Condensed Consolidated Financial Statement for further information.
(5)Income and expenses of equity method investments are included in Equity income (loss) of affiliates. Refer to Note 10 of the Condensed Consolidated Financial Statements for further discussion of our equity method investments.
Three months ended June 30, 2022 compared to 2021
Yanacocha, Peru. Gold production increased 1% primarily due to higher leach pad production in the current year. Costs applicable to sales per gold ounce increased 125% primarily due to lower by-product credits resulting from silver sale shipments in the prior year and higher fuel and energy costs, partially offset by lower worker participation costs. Depreciation and amortization per gold ounce decreased 8% primarily due to higher gold ounces sold and lower depreciation rates. All-in sustaining costs per gold ounce increased 28% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower reclamation costs and lower COVID-19 costs.
Merian, Suriname. Gold production decreased 9% primarily due to lower mill throughput and lower ore grade milled, partially offset by a drawdown of in-circuit inventory compared to a build-up in the prior year. Costs applicable to sales per gold ounce increased 27% primarily due to higher fuel and energy costs and lower gold ounces sold. Depreciation and amortization per gold ounce decreased 12% primarily due to lower depreciation rates due to a longer mine life. All-in sustaining costs per gold ounce increased 29% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital spend.
45
Cerro Negro, Argentina. Gold production decreased 3% primarily due to lower ore grade milled, partially offset by higher mill throughput. Costs applicable to sales per gold ounce increased 6% primarily due to higher equipment and mill maintenance costs, higher shipping costs and lower gold ounces sold. Depreciation and amortization per gold ounce increased 8% primarily due to higher mineral interest amortization and lower gold ounces sold. All-in sustaining costs per gold ounce decreased 2% primarily due to lower sustaining capital spend and lower COVID-19 costs, partially offset by higher costs applicable to sales per gold ounce.
Pueblo Viejo, Dominican Republic. Attributable gold production decreased 10% primarily due to lower ore grade milled. Refer to Note 10 of the Condensed Consolidated Financial Statements for further discussion of our equity method investments.
Six months ended June 30, 2022 compared to 2021
Yanacocha, Peru. Gold production increased 3% primarily due to higher leach pad production in the current year. Costs applicable to sales per gold ounce increased 61% primarily due to lower by-product credits resulting from silver sale shipments in the prior year and higher fuel and material costs, partially offset by lower worker participation costs. Depreciation and amortization per gold ounce decreased 14% primarily due to higher gold ounces sold and lower depreciation rates. All-in sustaining costs per gold ounce increased 11% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower reclamation costs and lower COVID-19 costs.
Merian, Suriname. Gold production decreased 10% primarily due to lower mill throughput. Costs applicable to sales per gold ounce increased 20% primarily due to higher fuel and energy costs and lower gold ounces sold. Depreciation and amortization per gold ounce decreased 10% primarily due to lower depreciation rates due to a longer mine life. All-in sustaining costs per gold ounce increased 22% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital spend.
Cerro Negro, Argentina. Gold production increased 8% primarily due to higher ore grade milled and higher mill throughput. Costs applicable to sales per gold ounce increased 9% primarily due to higher direct operating costs as a result of higher equipment and mill maintenance costs and higher shipping costs, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce increased 8% primarily due to higher mineral interest amortization, partially offset by higher gold ounces sold. All-in sustaining costs per gold ounce decreased 1% primarily due to lower sustaining capital spend and lower COVID-19 costs, partially offset by higher costs applicable to sales per gold ounce.
Pueblo Viejo, Dominican Republic. Attributable gold production decreased 18% primarily due to lower ore grade milled, partially offset by higher mill throughput. Refer to Note 10 of the Condensed Consolidated Financial Statements for further discussion of our equity method investments.
Australia Operations
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization (2) | All-In Sustaining Costs (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Boddington | 233 | 188 | $ | 753 | $ | 855 | $ | 138 | $ | 139 | $ | 854 | $ | 1,023 | |||||||||||||||||||||||||||||||||
| Tanami | 133 | 111 | 631 | 605 | 194 | 204 | 873 | 919 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 366 | 299 | $ | 710 | $ | 764 | $ | 161 | $ | 168 | $ | 873 | $ | 997 | |||||||||||||||||||||||||||||||||
| Gold equivalent ounces - other metals | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
Boddington (5) | 64 | 43 | $ | 710 | $ | 898 | $ | 135 | $ | 143 | $ | 818 | $ | 1,088 | |||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 64 | 43 | $ | 710 | $ | 898 | $ | 135 | $ | 143 | $ | 829 | $ | 1,113 | |||||||||||||||||||||||||||||||||
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization (2) | All-In Sustaining Costs (3) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Boddington | 415 | 340 | $ | 781 | $ | 874 | $ | 139 | $ | 140 | $ | 888 | $ | 1,157 | |||||||||||||||||||||||||||||||||
| Tanami | 233 | 228 | 644 | 587 | 206 | 198 | 933 | 854 | |||||||||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 648 | 568 | $ | 734 | $ | 757 | $ | 166 | $ | 169 | $ | 917 | $ | 1,048 | |||||||||||||||||||||||||||||||||
| Gold equivalent ounces - other metals | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
Boddington (5) | 115 | 75 | $ | 765 | $ | 913 | $ | 139 | $ | 146 | $ | 881 | $ | 1,216 | |||||||||||||||||||||||||||||||||
Total/Weighted-Average (4) | 115 | 75 | $ | 765 | $ | 913 | $ | 139 | $ | 146 | $ | 895 | $ | 1,231 | |||||||||||||||||||||||||||||||||
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
46
(2)For the three months ended June 30, 2022 and 2021, Depreciation and amortization includes $— and $1 at Tanami in care and maintenance costs. For the six months ended June 30, 2022 and 2021, Depreciation and amortization includes $— and $1 at Tanami in care and maintenance costs.
(3)All-in sustaining costs is a non-GAAP financial measure. See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis. For the three months ended June 30, 2022 and 2021, All-in sustaining costs includes $— and $2 at Tanami in care and maintenance costs recorded in Other expense, net. For the six months ended June 30, 2022 and 2021, All-in sustaining costs includes $— and $2 at Tanami in care and maintenance costs recorded in Other expense, net.
(4)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.
(5)For the three months ended June 30, 2022 and 2021, Boddington produced 24 million and 19 million pounds of copper, respectively. For the six months ended June 30, 2022 and 2021, Boddington produced 43 million and 33 million pounds of copper, respectively.
Three months ended June 30, 2022 compared to 2021
Boddington, Australia. Gold production increased 24% primarily due to higher ore grade milled, partially offset by lower mill throughput. Gold equivalent ounces – other metals production increased 49% primarily due to higher ore grade milled, partially offset by lower mill throughput. Costs applicable to sales per gold ounce decreased 12% primarily due to higher gold ounces sold and a favorable Australian dollar foreign currency exchange rate, partially offset by higher mill maintenance costs, higher fuel and energy costs and higher shipping costs. Costs applicable to sales per gold equivalent ounce – other metals decreased 21% primarily due to higher gold equivalent ounces - other metals sold and a favorable Australian dollar foreign currency exchange rate, partially offset by higher direct operating costs and higher shipping costs. Depreciation and amortization per gold ounce decreased 1% primarily due to higher gold ounces sold, partially offset by asset additions. Depreciation and amortization per gold equivalent ounce – other metals decreased 6% primarily due to higher gold equivalent ounces - other metals sold. All-in sustaining costs per gold ounce decreased 17% primarily due to lower costs applicable to sales per gold ounce and lower sustaining capital spend. All-in sustaining costs per gold equivalent ounce – other metals decreased 25% primarily due to lower costs applicable to sales per gold equivalent ounces - other metals and lower sustaining capital costs.
Tanami, Australia. Gold production increased 20% primarily due to a drawdown of in-circuit inventory compared to a build-up in the prior year and higher ore grade milled. Costs applicable to sales per gold ounce increased 4% primarily due to higher direct operating costs, partially offset by higher gold ounces sold and a favorable Australian dollar foreign currency exchange rate. Depreciation and amortization per gold ounce decreased 5% primarily due higher gold ounces sold. All-in sustaining costs per gold ounce decreased 5% primarily due to lower sustaining capital spend, partially offset by higher costs applicable to sales per gold ounce.
Six months ended June 30, 2022 compared to 2021
Boddington, Australia. Gold production increased 22% primarily due to higher ore grade milled, partially offset by lower mill throughput. Gold equivalent ounces – other metals production increased 53% primarily due to higher ore grade milled, partially offset by lower mill throughput. Costs applicable to sales per gold ounce decreased 11% primarily due to higher gold ounces sold and a favorable Australian dollar foreign currency exchange rate, partially offset by higher mill maintenance costs, higher fuel and energy costs and higher shipping costs. Costs applicable to sales per gold equivalent ounce – other metals decreased 16% primarily due to higher gold equivalent ounces - other metals sold and a favorable Australian dollar foreign currency exchange rate, partially offset by higher co-product allocation of costs to copper and higher shipping costs. Depreciation and amortization per gold ounce decreased 1% primarily due to higher gold ounces sold. Depreciation and amortization per gold equivalent ounce – other metals decreased 5% primarily due to higher gold equivalent ounces - other metals sold, partially offset by higher co-product allocation of costs to copper. All-in sustaining costs per gold ounce decreased 23% primarily due to lower sustaining capital spend and lower costs applicable to sales per gold ounce. All-in sustaining costs per gold equivalent ounce – other metals decreased 28% primarily due to lower sustaining capital spend and lower costs applicable to sales per gold equivalent ounces - other metals.
Tanami, Australia. Gold production increased 2% primarily due by a lower build up of in-circuit inventory compared to the prior year and higher ore grade milled, partially offset by lower mill throughput. Costs applicable to sales per gold ounce increased 10% primarily due to higher direct operating costs, partially offset by a favorable Australian dollar foreign currency exchange rate. Depreciation and amortization per gold ounce increased 4% primarily due to asset additions. All-in sustaining costs per gold ounce increased 9% primarily due to higher costs applicable to sales per gold ounce.
Africa Operations
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Ahafo | 135 | 107 | $ | 952 | $ | 891 | $ | 310 | $ | 323 | $ | 1,130 | $ | 1,122 | |||||||||||||||||||||||||||||||||
| Akyem | 108 | 95 | 701 | 616 | 306 | 315 | 837 | 828 | |||||||||||||||||||||||||||||||||||||||
Total / Weighted Average (3) | 243 | 202 | $ | 838 | $ | 763 | $ | 308 | $ | 320 | $ | 1,017 | $ | 1,000 | |||||||||||||||||||||||||||||||||
47
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Ahafo | 242 | 209 | $ | 967 | $ | 887 | $ | 301 | $ | 318 | $ | 1,171 | $ | 1,108 | |||||||||||||||||||||||||||||||||
| Akyem | 199 | 198 | 717 | 625 | 316 | 310 | 884 | 806 | |||||||||||||||||||||||||||||||||||||||
Total / Weighted Average (3) | 441 | 407 | $ | 853 | $ | 760 | $ | 308 | $ | 314 | $ | 1,057 | $ | 974 | |||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)All-in sustaining costs is a non-GAAP financial measure. See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
(3)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.
Three months ended June 30, 2022 compared to 2021
Ahafo, Ghana. Gold production increased 26% primarily due to higher mill throughput and higher ore grade milled. Costs applicable to sales per gold ounce increased 7% primarily due to higher fuel and energy costs, higher contracted service costs and higher royalty payments, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce decreased 4% primarily due to higher gold ounces sold. All-in sustaining costs per gold ounce increased 1% primarily due to higher costs applicable to sales per gold ounce.
Akyem, Ghana. Gold production increased 14% primarily due to higher mill throughput and higher ore grade milled. Costs applicable to sales per gold ounce increased 14% primarily due to higher fuel and energy costs, higher contracted service costs and higher royalty payments, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce decreased 3% primarily due to higher gold ounces sold. All-in sustaining costs per gold ounce increased 1% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower sustaining capital spend.
Six months ended June 30, 2022 compared to 2021
Ahafo, Ghana. Gold production increased 16% primarily due to higher mill throughput and higher ore grade milled, partially offset by a build up of in-circuit inventory compared to a drawdown in the prior year. Costs applicable to sales per gold ounce increased 9% primarily due to higher fuel and energy costs, higher contracted service costs and higher royalty payments, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce decreased 5% primarily due to higher gold ounces sold. All-in sustaining costs per gold ounce increased 6% primarily due to higher costs applicable to sales per gold ounce.
Akyem, Ghana. Gold production increased 1% primarily due to higher mill throughput and a higher drawdown of in-circuit inventory compared to the prior year, partially offset by lower ore grade milled. Costs applicable to sales per gold ounce increased 15% primarily due to higher fuel and energy costs, higher contracted service costs and higher royalty payments, partially offset by higher gold ounces sold. Depreciation and amortization per gold ounce increased 2% primarily due to higher gold ounces sold. All-in sustaining costs per gold ounce increased 10% primarily due to higher costs applicable to sales per gold ounce, partially offset by lower sustaining capital spend.
Nevada Operations
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Nevada Gold Mines | 290 | 284 | $ | 1,035 | $ | 753 | $ | 435 | $ | 448 | $ | 1,263 | $ | 985 | |||||||||||||||||||||||||||||||||
Total/Weighted-Average (3) | 290 | 284 | $ | 1,035 | $ | 753 | $ | 435 | $ | 448 | $ | 1,263 | $ | 985 | |||||||||||||||||||||||||||||||||
| Gold or Other Metals Produced | Costs Applicable to Sales (1) | Depreciation and Amortization | All-In Sustaining Costs (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Gold | (ounces in thousands) | ($ per ounce sold) | ($ per ounce sold) | ($ per ounce sold) | |||||||||||||||||||||||||||||||||||||||||||
| Nevada Gold Mines | 578 | 587 | $ | 967 | $ | 749 | $ | 435 | $ | 432 | $ | 1,176 | $ | 924 | |||||||||||||||||||||||||||||||||
Total/Weighted-Average (3) | 578 | 587 | $ | 967 | $ | 749 | $ | 435 | $ | 432 | $ | 1,176 | $ | 924 | |||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)All-in sustaining costs is a non-GAAP financial measure. See Non-GAAP Financial Measures within Part I, Item 2, Management's Discussion and Analysis.
(3)All-in sustaining costs and Depreciation and amortization include expense for other regional projects.
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Three months ended June 30, 2022 compared to 2021
Nevada Gold Mines. Attributable gold production increased 2% primarily due to higher mill throughput at Carlin, partially offset lower leach pad production at Long Canyon due to the ramp down of mining and the sale of the Lone Tree property at Phoenix, lower mill throughput at Cortez and lower grades milled at Turquoise Ridge.
Costs applicable to sales per gold ounce increased 37% primarily due to lower by-product credits at Phoenix, a drawdown of inventory at Turquoise Ridge and Long Canyon, inventory adjustments at Cortez and higher direct operating costs and higher inventory adjustments at Carlin.
Depreciation and amortization per gold ounce decreased 3% primarily due to higher gold ounces sold at Carlin.
All-in sustaining costs per gold ounce increased 28% primarily due to higher costs applicable to sales per gold ounce at all NGM sites.
Six months ended June 30, 2022 compared to 2021
Nevada Gold Mines. Attributable gold production decreased 2% primarily due to lower leach pad production at Long Canyon due to the ramp down of mining and the sale of the Lone Tree property at Phoenix, partially offset by higher leach pad recoveries at Cortez.
Costs applicable to sales per gold ounce increased 29% primarily due to lower by-product credits at Phoenix, a drawdown of inventory at Turquoise Ridge and Long Canyon, higher direct operating costs at Carlin and higher direct operating costs and higher inventory adjustments at Cortez.
Depreciation and amortization per gold ounce increased 1% primarily due to lower gold ounces sold at Long Canyon and Turquoise Ridge, partially offset by higher ounces sold at Carlin.
All-in sustaining costs per gold ounce increased 27% primarily due to higher costs applicable to sales per gold ounce at all NGM sites, as well as higher sustaining capital spend at Turquoise Ridge and Phoenix.
Foreign Currency Exchange Rates
Our foreign operations sell their gold, copper, silver, lead and zinc production based on U.S. dollar metal prices. Fluctuations in foreign currency exchange rates do not have a material impact on our revenue since gold, copper, silver, lead and zinc are sold throughout the world in U.S. dollars. Despite selling gold and silver in London, we have no exposure to the euro or the British pound.
Foreign currency exchange rates can increase or decrease profits to the extent costs are paid in foreign currencies, including the Australian dollar, the Mexican peso, the Canadian dollar, the Argentine peso, the Peruvian sol, the Surinamese dollar and the Ghanaian cedi. Approximately 46% and 47% of Costs applicable to sales were paid in currencies other than the U.S. dollar during the three and six months ended June 30, 2022, respectively, as follows:
| Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | ||||||||||
| Australian Dollar | 15 | % | 17 | % | |||||||
| Mexican Peso | 13 | % | 12 | % | |||||||
| Canadian Dollar | 12 | % | 12 | % | |||||||
| Argentine Peso | 3 | % | 3 | % | |||||||
| Peruvian Sol | 2 | % | 2 | % | |||||||
| Surinamese Dollar | 1 | % | 1 | % | |||||||
| Ghanaian Cedi | — | % | — | % | |||||||
Variations in the local currency exchange rates in relation to the U.S. dollar at our foreign mining operations decreased Costs applicable to sales by $27 during the three months ended June 30, 2022, compared to the same period in 2021, primarily in Australia, Argentina and Canada. Variations in the local currency exchange rates in relation to the U.S. dollar at our foreign mining operations decreased Costs applicable to sales by $24 during the six months ended June 30, 2022, compared to the same period in 2021, primarily in Australia, Argentina and Suriname.
Our Cerro Negro mine, located in Argentina, is a U.S. dollar functional currency entity. Argentina has been considered a hyperinflationary environment with a cumulative inflation rate of over 100% for the last three years. In recent years, Argentina’s central bank enacted a number of foreign currency controls in an effort to stabilize the local currency, including requiring the Company to convert U.S. dollar proceeds from metal sales to local currency within 60 days from shipment date or five business days from receipt of cash, whichever happens first, as well as restricting payments to foreign-related entities denominated in foreign currency, such as dividends or distributions to the parent and related companies and royalties and other payments to foreign beneficiaries. These
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restrictions directly impact Cerro Negro's ability to pay principal portions of intercompany debt to the Company. We continue to monitor the foreign currency exposure risk and the limitations of repatriating cash to the U.S. Currently, these currency controls are not expected to have a material impact on our financial statements.
Our Merian mine, located in the country of Suriname, is a U.S. dollar functional currency entity. Suriname has experienced significant inflation over the last three years and has a highly inflationary economy. In 2021, the Central Bank took steps to stabilize the local currency, while the government introduced new legislation to narrow the gap between government revenues and spending. The measures to increase government revenue mainly consist of tax increases; however, Newmont and the Republic of Suriname have a Mineral Agreement in place that supersedes such measures. The Central Bank of Suriname adopted a controlled floating rate system, which resulted in a concurrent devaluation of the Surinamese dollar. The majority of Merian’s activity has historically been denominated in U.S. dollars due to which the devaluation of the Surinamese dollar has resulted in an immaterial impact on our financial statements. Therefore, future devaluation of the Surinamese dollar is not expected to have a material impact on our financial statements.
Liquidity and Capital Resources
Liquidity Overview
We have a disciplined cash allocation strategy of maintaining financial flexibility to execute our capital priorities and generate long-term value for our shareholders. Consistent with that strategy, we aim to self-fund development projects and make strategic partnerships focused on profitable growth, while reducing our debt and returning cash to stockholders through dividends and share repurchases.
The COVID-19 pandemic and the Russian invasion of Ukraine continue to have a material impact on the global economy, the scale and duration of which remain uncertain. Depending on the duration and extent of the impact of these events, sites could be placed into care and maintenance; commodity prices and the prices for gold and other metals could experience volatility; transportation industry disruptions could occur, including limitations on shipping produced metals; refineries or smelters could be temporarily closed; our supply chain could be disrupted; cost inflation rates could increase; or we could incur credit related losses of certain financial assets, which could materially impact the Company’s results of operations, cash flows and financial condition. As of June 30, 2022, we believe our available liquidity allows us to manage the near-term impacts of the COVID-19 pandemic and the Russian invasion of Ukraine on our business.
At June 30, 2022, the Company had $4,307 in Cash and cash equivalents. The majority of our cash and cash equivalents are invested in a variety of highly liquid investments with original maturities of three months or less. These investments are viewed by management as low-risk investments on which there are little to no restrictions regarding our ability to access the underlying cash to fund our operations as necessary. While we have some investments in prime money market funds at times, these are classified as cash and cash equivalents; however, we continually monitor the need for reclassification under the SEC requirements for money market funds, and the potential that the shares of such funds could have a net asset value of less than one dollar. We believe that our liquidity and capital resources are adequate to fund our operations and corporate activities.
At June 30, 2022, $2,163 of Cash and cash equivalents, was held in foreign subsidiaries and is primarily held in U.S. dollar denominated accounts with the remainder in foreign currencies readily convertible to U.S. dollars. Cash and cash equivalents denominated in Argentine Peso are subject to regulatory restrictions. See Foreign Currency Exchange Rates above for further information. At June 30, 2022, $1,734 in consolidated cash and cash equivalents was held at certain foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes.
We believe our existing consolidated Cash and cash equivalents, available capacity on our revolving credit facility, and cash generated from continuing operations will be adequate to satisfy working capital needs, fund future growth, meet debt obligations, pay dividends, complete our stock repurchase program and meet other liquidity requirements for the foreseeable future. At June 30, 2022, our borrowing capacity on our revolving credit facility was $3,000, and we had no borrowings outstanding under the revolving credit facility. We continue to remain compliant with covenants, and there have been no impacts to-date, nor do we anticipate any negative impacts from COVID-19, on our ability to access funds available on this facility.
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Our financial position was as follows:
| At June 30, 2022 | At December 31, 2021 | ||||||||||
| Debt | $ | 5,568 | $ | 5,652 | |||||||
| Lease and other financing obligations | 605 | 650 | |||||||||
| Less: Cash and cash equivalents | (4,307) | (4,992) | |||||||||
| Net debt | $ | 1,866 | $ | 1,310 | |||||||
| Borrowing capacity on revolving credit facility | $ | 3,000 | $ | 3,000 | |||||||
Total liquidity (1) | $ | 7,307 | $ | 7,992 | |||||||
(1)Total liquidity is calculated as the total of our Cash and cash equivalents and the borrowing capacity on our revolving credit facility.
Cash Flows
Net cash provided by (used in) operating activities of continuing operations was $1,722 during the six months ended June 30, 2022, a decrease in cash provided of $112 from the six months ended June 30, 2021, primarily due to an increase in operating cash expenditures resulting from the Input Cost Inflation Impacts and an increase in payments for reclamation and remediation obligations, partially offset by a decrease in tax payments, an increase in accounts payable due to timing of payments to vendors and higher average realized gold prices.
Net cash provided by (used in) investing activities was $(1,034) during the six months ended June 30, 2022, a decrease in cash used of $93 from the six months ended June 30, 2021, primarily due to the acquisition of GT Gold in 2021, partially offset by higher capital expenditures in 2022, the payment to Buenaventura relating to the sale of the La Zanja equity method investment in 2022, and proceeds from the sale of TMAC in 2021.
Net cash provided by (used in) financing activities was $(1,417) during the six months ended June 30, 2022, a decrease in cash used of $249 from the six months ended June 30, 2021, primarily due to higher net repayments of debt in 2021 and higher stock repurchases in 2021, partially offset by the acquisition of noncontrolling interest in Yanacocha in 2022.
Capital Resources
In July 2022, the Board declared a dividend of $0.55 per share, determined under the dividend framework. This framework is non-binding and is periodically reviewed and reassessed by the Board of Directors. The declaration and payment of future dividends remains at the full discretion of the Board and will depend on the Company’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board.
No share repurchases occurred during the three months ended June 30, 2022. At June 30, 2022, $475 of the $1 billion authorized repurchases remain available through the authorized the program's maturity date of December 31, 2022.
Capital Expenditures
Cash generated from operations is used to execute our capital priorities, which include sustaining and developing our global portfolio of long-lived assets. For example, total development capital spend on the Ahafo North project, which received full funding approval from the Board of Directors in July 2021, is expected to be funded from existing liquidity and future operating cash flows. We consider sustaining capital as those capital expenditures that are necessary to maintain current production and execute the current mine plan. Capital expenditures to develop new operations or related to projects at existing operations, where these projects will enhance production or reserves, are considered non-sustaining or development capital. In addition, the Company continues to evaluate strategic priorities and deployment of capital to projects in the pipeline to ensure it executes on its capital priorities and provides long-term value to shareholders. The Company’s decision to reprioritize, sell or abandon a development project, which may include returning mining concessions to host governments, could result in a future impairment charge.
Additionally, in 2020 we announced climate targets to reduce GHG emissions and plans to significantly invest in climate change initiatives in support of this goal, which may be capital in nature. As part of these initiatives, in November 2021, Newmont announced a strategic alliance with Caterpillar Inc. (“CAT”) with the aim to develop and implement a comprehensive all-electric autonomous mining system to achieve zero emissions mining. To support the alliance, Newmont pledged a preliminary investment of $100, of which $34 was paid in July 2022 and is expected to be recorded in Advanced projects, research and development within our Condensed Consolidated Statements of Operations, to CAT in connection with initial automation and electrification goals for surface and underground mining infrastructures and haulage fleets at Newmont’s CC&V mine in Colorado, USA and Tanami mine in Northern Territory, Australia.
For additional information, refer to Part II, Item 7, Liquidity and Capital Resources of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022. For risks related to climate-related capital expenditures, see
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Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022.
For the six months ended June 30, 2022 and 2021, we had Additions to property, plant and mine development as follows:
2022 | 2021 | ||||||||||||||||||||||||||||||||||
| Development Projects | Sustaining Capital | Total | Development Projects | Sustaining Capital | Total | ||||||||||||||||||||||||||||||
| North America | $ | 63 | $ | 160 | $ | 223 | $ | 11 | $ | 147 | $ | 158 | |||||||||||||||||||||||
| South America | 174 | 57 | 231 | 58 | 53 | 111 | |||||||||||||||||||||||||||||
| Australia | 129 | 89 | 218 | 121 | 146 | 267 | |||||||||||||||||||||||||||||
| Africa | 102 | 60 | 162 | 43 | 54 | 97 | |||||||||||||||||||||||||||||
| Nevada | 35 | 103 | 138 | 32 | 85 | 117 | |||||||||||||||||||||||||||||
| Corporate and other | 4 | 7 | 11 | 1 | 9 | 10 | |||||||||||||||||||||||||||||
| Accrual basis | $ | 507 | $ | 476 | $ | 983 | $ | 266 | $ | 494 | $ | 760 | |||||||||||||||||||||||
Decrease (increase) in non-cash adjustments | (27) | 54 | |||||||||||||||||||||||||||||||||
| Cash basis | $ | 956 | $ | 814 | |||||||||||||||||||||||||||||||
For the six months ended June 30, 2022, development capital projects primarily included Pamour in North America; Yanacocha Sulfides and Cerro Negro expansion projects in South America; Tanami Expansion 2 in Australia; Ahafo North in Africa; and Goldrush Complex in NGM. Development capital costs (excluding capitalized interest) on our Ahafo North project since approval were $142, of which $75 related to the six months ended June 30, 2022. Development capital costs (excluding capitalized interest) on our Tanami Expansion 2 project since approval were $395, of which $111 related to the six months ended June 30, 2022.
For the six months ended June 30, 2021, development capital projects primarily included Pamour in North America; Yanacocha Sulfides, Quecher Main and Cerro Negro expansion projects in South America; Tanami Expansion 2 in Australia; Subika Mining Method Change and Ahafo North in Africa; and Goldrush Complex and Turquoise Ridge 3rd shaft in Nevada.
Sustaining capital includes capital expenditures such as underground and surface mine development, tailings facility construction, mining equipment, capitalized component purchases and water treatment plant construction. Additionally, for the six months ended June 30, 2021, sustaining capital included haul truck purchases for the Autonomous Haulage System in Australia.
Refer to Note 2 and Note 3 of the Condensed Consolidated Financial Statements and Part I, Item 2, Non-GAAP Financial Measures, "All-In Sustaining Costs" for further information.
Debt
Debt and Corporate Revolving Credit Facilities. There were no material changes to our debt and corporate revolving credit facilities since December 31, 2021, except as noted in Note 13 of the Condensed Consolidated Financial Statements.
Refer to Part II, Item 7 of our Annual report on Form 10-K for the year ended December 31, 2021, for information regarding our debt and corporate revolving credit facilities.
Debt Covenants. There were no changes to our debt covenants. Refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021, for information regarding our debt covenants. At June 30, 2022, we were in compliance with all existing debt covenants and provisions related to potential defaults.
Supplemental Guarantor Information. The Company filed a shelf registration statement with the SEC on Form S-3 under the Securities Act, as amended, which enables us to issue an indeterminate number or amount of common stock, preferred stock, depository shares, debt securities, guarantees of debt securities, warrants and units (the “Shelf Registration Statement”). Under the Shelf Registration Statement, our debt securities may be guaranteed by Newmont USA Limited (“Newmont USA”), one of our consolidated subsidiaries (Newmont, as issuer, and Newmont USA, as guarantor, are collectively referred to here-within as the “Obligor Group”). These guarantees are full and unconditional, and none of our other subsidiaries guarantee any security issued and outstanding. The cash provided by operations of the Obligor Group, and all of its subsidiaries, is available to satisfy debt repayments as they become due, and there are no material restrictions on the ability of the Obligor Group to obtain funds from subsidiaries by dividend, loan, or otherwise, except to the extent of any rights of noncontrolling interests or regulatory restrictions limiting repatriation of cash. Net assets attributable to noncontrolling interests were $178 and $(209) at June 30, 2022 and December 31, 2021, respectively. All noncontrolling interests relate to non-guarantor subsidiaries.
Newmont and Newmont USA are primarily holding companies with no material operations, sources of income or assets other than equity interest in their subsidiaries and intercompany receivables or payables. Newmont USA’s primary investments are comprised
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of its 38.5% interest in NGM and 100% interest in Yanacocha. For further information regarding these and our other operations, refer to Note 3 of the Condensed Consolidated Financial Statements and Part I, Item 2, Management’s Discussion and Analysis, Results of Consolidated Operations.
In addition to equity interests in subsidiaries, the Obligor Group’s balance sheets consisted primarily of the following intercompany assets, intercompany liabilities and external debt. The remaining assets and liabilities of the Obligor Group are considered immaterial at June 30, 2022 and December 31, 2021.
| Obligor Group | Newmont USA | ||||||||||||||||||||||
| June 30, 2022 | December 31, 2021 | June 30, 2022 | December 31, 2021 | ||||||||||||||||||||
| Current intercompany assets | $ | 13,352 | $ | 12,959 | $ | 5,575 | $ | 5,450 | |||||||||||||||
| Non-current intercompany assets | $ | 557 | $ | 2,301 | $ | 543 | $ | 448 | |||||||||||||||
| Current intercompany liabilities | $ | 12,456 | $ | 11,052 | $ | 1,918 | $ | 1,963 | |||||||||||||||
| Current external debt | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Non-current external debt | $ | 5,561 | $ | 5,558 | $ | — | $ | — | |||||||||||||||
Newmont USA's subsidiary guarantees (the “subsidiary guarantees”) are general unsecured senior obligations of Newmont USA and rank equal in right of payment to all of Newmont USA's existing and future senior unsecured indebtedness and senior in right of payment to all of Newmont USA's future subordinated indebtedness. The subsidiary guarantees are effectively junior to any secured indebtedness of Newmont USA to the extent of the value of the assets securing such indebtedness.
At June 30, 2022, Newmont USA had approximately $5,561 of consolidated indebtedness (including guaranteed debt), all of which relates to the guarantees of indebtedness of Newmont.
Under the terms of the subsidiary guarantees, holders of Newmont’s securities subject to such subsidiary guarantees will not be required to exercise their remedies against Newmont before they proceed directly against Newmont USA.
Newmont USA will be released and relieved from all its obligations under the subsidiary guarantees in certain specified circumstances, including, but not limited to, the following:
•upon the sale or other disposition (including by way of consolidation or merger), in one transaction or a series of related transactions, of a majority of the total voting power of the capital stock or other interests of Newmont USA (other than to Newmont or any of Newmont’s affiliates);
•upon the sale or disposition of all or substantially all the assets of Newmont USA (other than to Newmont or any of Newmont’s affiliates); or
•upon such time as Newmont USA ceases to guarantee more than $75 aggregate principal amount of Newmont’s debt (at June 30, 2022, Newmont USA guaranteed $600 aggregate principal amount of debt of Newmont that did not contain a similar fall-away provision).
Newmont’s debt securities are effectively junior to any secured indebtedness of Newmont to the extent of the value of the assets securing such indebtedness, and structurally subordinated to all debt and other liabilities of Newmont’s non-guarantor subsidiaries. At June 30, 2022, (i) Newmont’s total consolidated indebtedness was approximately $6,173, none of which was secured (other than $605 of Lease and other financing obligations), and (ii) Newmont’s non-guarantor subsidiaries had $5,334 of total liabilities (including trade payables, but excluding intercompany and external debt and reclamation and remediation liabilities), which would have been structurally senior to Newmont’s debt securities.
For further information on our debt, refer to Note 13 of the Condensed Consolidated Financial Statements.
Contractual Obligations
As of June 30, 2022, there have been no material changes, outside the ordinary course of business, in our contractual obligations since December 31, 2021, except in regards to the reduction of employee-related benefit obligations resulting from the pension annuitization as noted in Note 7 of the Condensed Consolidated Financial Statements. Refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 for information regarding our contractual obligations.
Environmental
Our mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. We perform a comprehensive review of our reclamation and remediation liabilities annually and review changes in facts and circumstances associated with these obligations at least quarterly.
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For a complete discussion of the factors that influence our reclamation obligations and the associated risks, refer to Part II, Item 7, Managements’ Discussion and Analysis of Consolidated Financial Condition and Results of Operations under the headings Environmental and “Critical Accounting Estimates” and refer to Part I, Item 1A, Risk Factors under the heading “Mine closure, reclamation and remediation costs for environmental liabilities may exceed the provisions we have made” for the year ended December 31, 2021, filed February 24, 2022 on Form 10-K.
Our sustainability strategy is a foundational element in achieving our purpose to create value and improve lives through sustainable and responsible mining. Sustainability and safety are integrated into the business at all levels of the organization through our global policies, standards, strategies, business plans and remuneration plans. For additional information on the Company’s reclamation and remediation liabilities, refer to Notes 5 and 17 of the Condensed Consolidated Financial Statements.
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by GAAP. These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to Non-GAAP Financial Measures within Part II, Item 7 within our Form 10-K filed with the SEC on February 24, 2022 for further information on the Non-GAAP financial measures presented below, including why management believes that its presentation of non-GAAP financial measures provides useful information to investors.
Earnings before interest, taxes, depreciation and amortization and Adjusted earnings before interest, taxes, depreciation and amortization
Net income (loss) attributable to Newmont stockholders is reconciled to EBITDA and Adjusted EBITDA as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Net income (loss) attributable to Newmont stockholders | $ | 387 | $ | 650 | $ | 835 | $ | 1,209 | |||||||||||||||
| Net income (loss) attributable to noncontrolling interests | 13 | 11 | 34 | 31 | |||||||||||||||||||
Net (income) loss from discontinued operations | (8) | (10) | (24) | (31) | |||||||||||||||||||
| Equity loss (income) of affiliates | (17) | (49) | (56) | (99) | |||||||||||||||||||
| Income and mining tax expense (benefit) | 33 | 341 | 247 | 576 | |||||||||||||||||||
| Depreciation and amortization | 559 | 561 | 1,106 | 1,114 | |||||||||||||||||||
| Interest expense, net of capitalized interest | 57 | 68 | 119 | 142 | |||||||||||||||||||
| EBITDA | $ | 1,024 | $ | 1,572 | $ | 2,261 | $ | 2,942 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
Pension settlement (1) | — | — | 130 | — | |||||||||||||||||||
Change in fair value of investments (2) | 135 | (26) | 96 | 84 | |||||||||||||||||||
(Gain) loss on asset and investment sales (3) | — | — | 35 | (43) | |||||||||||||||||||
Settlement costs (4) | 5 | 8 | 18 | 11 | |||||||||||||||||||
Reclamation and remediation charges (5) | — | 20 | 13 | 30 | |||||||||||||||||||
Impairment of long-lived and other assets (6) | 2 | 11 | 2 | 12 | |||||||||||||||||||
COVID-19 specific costs (7) | 1 | 1 | 1 | 2 | |||||||||||||||||||
Restructuring and severance (8) | — | 5 | 1 | 10 | |||||||||||||||||||
Other (9) | (18) | — | (18) | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 1,149 | $ | 1,591 | $ | 2,539 | $ | 3,048 | |||||||||||||||
(1)Pension settlement, included in Other income (loss), net, represents pension settlement charges in 2022 related to the annuitization of certain defined benefit plans. For further information, refer to Note 7 of the Condensed Consolidated Financial Statements.
(2)Change in fair value of investments, included in Other income (loss), net, primarily represents unrealized gains and losses related to the Company's investments in current and non-current marketable and other equity securities. For further information regarding our investments, refer to Note 10 of the Condensed Consolidated Financial Statements.
(3)(Gain) loss on asset and investment sales, included in Other income (loss), net, primarily represents the loss recognized on the sale of the La Zanja equity method investment in 2022 and a gain on the sale of TMAC in 2021. For further information, refer to Note 7 of the Condensed Consolidated Financial Statements.
(4)Settlement costs, included in Other expense, net, are primarily comprised of a legal settlement and a voluntary contribution made to support humanitarian efforts in Ukraine in 2022.
(5)Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to reclamation and remediation plans at the Company's former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value. Refer to Note 5 of the Condensed Consolidated Financial Statement for further information.
(6)Impairment of long-lived and other assets, included in Other expense, net, represents non-cash write-downs of various assets that are no longer in use and materials and supplied inventories.
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(7)COVID-19 specific costs, included in Other expense, net, primarily include amounts distributed from Newmont Global Community Support Fund to help host communities, governments and employees combat the COVID-19 pandemic.
(8)Restructuring and severance, included in Other expense, net, primarily represents severance and related costs associated with significant organizational or operating model changes implemented by the Company for all periods presented.
(9)Primarily comprised of a reimbursement of certain historical Goldcorp operational expenses related to a legacy project that reached commercial production in the second quarter of 2022, included in Other income (loss), net.
Adjusted net income (loss)
Net income (loss) attributable to Newmont stockholders is reconciled to Adjusted net income (loss) as follows:
| Three Months Ended June 30, 2022 | Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||
per share data (1) | per share data (1) | ||||||||||||||||||||||||||||||||||
| basic | diluted | basic | diluted | ||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Newmont stockholders | $ | 387 | $ | 0.49 | $ | 0.49 | $ | 835 | $ | 1.05 | $ | 1.05 | |||||||||||||||||||||||
| Net loss (income) attributable to Newmont stockholders from discontinued operations | (8) | (0.01) | (0.01) | (24) | (0.03) | (0.03) | |||||||||||||||||||||||||||||
Net income (loss) attributable to Newmont stockholders from continuing operations | 379 | 0.48 | 0.48 | 811 | 1.02 | 1.02 | |||||||||||||||||||||||||||||
Pension settlement (2) | — | — | — | 130 | 0.16 | 0.16 | |||||||||||||||||||||||||||||
Change in fair value of investments (3) | 135 | 0.17 | 0.17 | 96 | 0.13 | 0.13 | |||||||||||||||||||||||||||||
(Gain) loss on asset and investment sales (4) | — | — | — | 35 | 0.04 | 0.04 | |||||||||||||||||||||||||||||
Settlement costs (5) | 5 | — | — | 18 | 0.03 | 0.03 | |||||||||||||||||||||||||||||
Reclamation and remediation charges (6) | — | — | — | 13 | 0.02 | 0.02 | |||||||||||||||||||||||||||||
Impairment of long-lived and other assets (7) | 2 | — | — | 2 | — | — | |||||||||||||||||||||||||||||
COVID-19 specific costs (8) | 1 | — | — | 1 | — | — | |||||||||||||||||||||||||||||
Restructuring and severance (9) | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||
Other (10) | (18) | (0.03) | (0.03) | (18) | (0.03) | (0.03) | |||||||||||||||||||||||||||||
Tax effect of adjustments (11) | (25) | (0.03) | (0.03) | (62) | (0.08) | (0.08) | |||||||||||||||||||||||||||||
Valuation allowance and other tax adjustments (12) | (117) | (0.13) | (0.13) | (119) | (0.14) | (0.15) | |||||||||||||||||||||||||||||
| Adjusted net income (loss) | $ | 362 | $ | 0.46 | $ | 0.46 | $ | 908 | $ | 1.15 | $ | 1.14 | |||||||||||||||||||||||
Weighted average common shares (millions): (13) | 794 | 795 | 793 | 795 | |||||||||||||||||||||||||||||||
(1)Per share measures may not recalculate due to rounding.
(2)Pension settlement, included in Other income (loss), net, represents pension settlement charges in 2022 related to the annuitization of certain defined benefit plans. For further information, refer to Note 7 of the Condensed Consolidated Financial Statements.
(3)Change in fair value of investments, included in Other income (loss), net, primarily represents unrealized gains and losses related to the Company's investment in current and non-current marketable and other equity securities. For further information regarding our investments, refer to Note 10 of the Condensed Consolidated Financial Statements.
(4)(Gain) loss on asset and investment sales, included in Other income (loss), net,, primarily represents the loss recognized on the sale of the La Zanja equity method investment. For further information, refer to Note 7 of the Condensed Consolidated Financial Statements.
(5)Settlement costs, included in Other expense, net, primarily are comprised of legal settlement and a voluntary contribution made to support humanitarian efforts in Ukraine.
(6)Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to reclamation and remediation plans at the Company's former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value. Refer to Note 5 of the Condensed Consolidated Financial Statement for further information.
(7)Impairment of long-lived and other assets, included in Other expense, net, represents non-cash write-downs of various assets that are no longer in use and materials and supplied inventories.
(8)COVID-19 specific costs, included in Other expense, net, primarily include amounts distributed from Newmont Global Community Support Fund to help host communities, governments and employees combat the COVID-19 pandemic.
(9)Restructuring and severance, included in Other expense, net, primarily represents severance and related costs associated with significant organizational or operating model changes implemented by the Company.
(10)Primarily comprised of a reimbursement of certain historical Goldcorp operational expenses related to a legacy project that reached commercial production in the second quarter of 2022, included in Other income (loss), net.
(11)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (2) through (10), as described above, and are calculated using the applicable regional tax rate.
(12)Valuation allowance and other tax adjustments, included in Income and mining tax benefit (expense), is recorded for items such as foreign tax credits, capital losses, disallowed foreign losses, and the effects of changes in foreign currency exchange rates on deferred tax assets and deferred tax liabilities. The adjustment for the three and six months ended June 30, 2022 reflects the net increase or (decrease) to net operating losses,
55
capital losses, tax credit carryovers, and other deferred tax assets subject to valuation allowance of $37 and $49, the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $(23) and $(26), net reductions to the reserve for uncertain tax positions of $(5) and $(17), other tax adjustments of $(1) and $—, and a tax settlement in Mexico of $(125) and $(125). For further information on reductions to the reserve for uncertain tax positions, refer to Note 8 of the Condensed Consolidated Financial Statements.
(13)Adjusted net income (loss) per diluted share is calculated using diluted common shares in accordance with GAAP.
| Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | ||||||||||||||||||||||||||||||||||
per share data (1) | per share data (1) | ||||||||||||||||||||||||||||||||||
| basic | diluted | basic | diluted | ||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Newmont stockholders | $ | 650 | $ | 0.81 | $ | 0.81 | $ | 1,209 | $ | 1.51 | $ | 1.51 | |||||||||||||||||||||||
| Net loss (income) attributable to Newmont stockholders from discontinued operations | (10) | (0.01) | (0.01) | (31) | (0.04) | (0.04) | |||||||||||||||||||||||||||||
Net income (loss) attributable to Newmont stockholders from continuing operations | 640 | 0.80 | 0.80 | 1,178 | 1.47 | 1.47 | |||||||||||||||||||||||||||||
Change in fair value of investments (2) | (26) | (0.03) | (0.03) | 84 | 0.10 | 0.10 | |||||||||||||||||||||||||||||
Gain (loss) on asset and investment sales (3) | — | — | — | (43) | (0.05) | (0.05) | |||||||||||||||||||||||||||||
Reclamation and remediation charges (4) | 20 | 0.02 | 0.02 | 30 | 0.04 | 0.04 | |||||||||||||||||||||||||||||
Impairment of long-lived and other assets (5) | 11 | 0.01 | 0.01 | 12 | 0.01 | 0.01 | |||||||||||||||||||||||||||||
Settlement costs (6) | 8 | 0.01 | 0.01 | 11 | 0.01 | 0.01 | |||||||||||||||||||||||||||||
Restructuring and severance, net (7) | 5 | — | — | 9 | 0.01 | 0.01 | |||||||||||||||||||||||||||||
COVID-19 specific costs (8) | 1 | — | — | 2 | — | — | |||||||||||||||||||||||||||||
Tax effect of adjustments (9) | (11) | — | — | (30) | (0.03) | (0.03) | |||||||||||||||||||||||||||||
Valuation allowance and other tax adjustments, net (10) | 22 | 0.03 | 0.02 | 11 | 0.02 | 0.02 | |||||||||||||||||||||||||||||
| Adjusted net income (loss) | $ | 670 | $ | 0.84 | $ | 0.83 | $ | 1,264 | $ | 1.58 | $ | 1.58 | |||||||||||||||||||||||
Weighted average common shares (millions): (11) | 801 | 803 | 801 | 802 | |||||||||||||||||||||||||||||||
(1)Per share measures may not recalculate due to rounding.
(2)Change in fair value of investments, included in Other income (loss), net, primarily represents unrealized gains and losses on marketable and other equity securities and our investment instruments. For further information regarding our investments, refer to Note 10 of the Condensed Consolidated Financial Statements.
(3)(Gain) loss on asset and investment sales, included in Other income (loss), net, primarily represents a gain on the sale of TMAC. For further information, refer to Note 7 of the Condensed Consolidated Financial Statements.
(4)Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to reclamation and remediation plans at the Company's former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value. Refer to Note 5 of the Condensed Consolidated Financial Statements for further information.
(5)Impairment of long-lived and other assets, included in Other expense, net, represents non-cash write-downs of various assets that are no longer in use and materials and supplies inventories.
(6)Settlement costs, included in Other expense, net, primarily represents certain costs associated with legal and other settlements.
(7)Restructuring and severance, net, included in Other expense, net, primarily represents severance and related costs associated with significant organizational or operating model changes implemented by the Company. Total amount is presented net of income (loss) attributable to noncontrolling interests of $— and $(1), respectively.
(8)COVID-19 specific costs, included in Other expense, net, primarily includes amounts distributed from the Newmont Global Community Support Fund to help host communities, governments and employees combat the COVID-19 pandemic. Adjusted net income (loss) has not been adjusted for $19 and $40, respectively, of incremental COVID-19 costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic at our operational sites. Refer to Note 6 of the Condensed Consolidated Financial Statements for further information.
(9)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (2) through (8), as described above, and are calculated using the applicable regional tax rate.
(10)Valuation allowance and other tax adjustments, net, included in Income and mining tax benefit (expense), is recorded for items such as foreign tax credits, alternative minimum tax credits, capital losses, disallowed foreign losses, and the effects of changes in foreign currency exchange rates on deferred tax assets and deferred tax liabilities. The adjustment for the three and six months ended June 30, 2021 is due to increases or (decreases) to net operating losses, tax credit carryovers and other deferred tax assets subject to valuation allowance of $9 and $30 respectively, the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $11 and $(17) respectively, changes to the reserve for uncertain tax positions of $22 and $22 respectively, and other tax adjustments of $(17) and $(19), respectively. Total amount is presented net of income (loss) attributable to noncontrolling interests of $(3) and $(5), respectively.
(11)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with GAAP.
56
Free Cash Flow
The following table sets forth a reconciliation of Free Cash Flow to Net cash provided by (used in) operating activities, which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow, as well as information regarding Net cash provided by (used in) investing activities and Net cash provided by (used in) financing activities.
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| Net cash provided by (used in) operating activities | $ | 1,737 | $ | 1,836 | |||||||
| Less: Net cash used in (provided by) operating activities of discontinued operations | (15) | (2) | |||||||||
| Net cash provided by (used in) operating activities of continuing operations | 1,722 | 1,834 | |||||||||
| Less: Additions to property, plant and mine development | (956) | (814) | |||||||||
| Free Cash Flow | $ | 766 | $ | 1,020 | |||||||
Net cash provided by (used in) investing activities (1) | $ | (1,034) | $ | (1,127) | |||||||
| Net cash provided by (used in) financing activities | $ | (1,417) | $ | (1,666) | |||||||
(1)Net cash provided by (used in) investing activities includes Additions to property, plant and mine development, which is included in the Company’s computation of Free Cash Flow.
Costs applicable to sales per ounce/gold equivalent ounce
Costs applicable to sales per ounce/gold equivalent ounce are calculated by dividing the costs applicable to sales of gold and other metals by gold ounces or gold equivalent ounces sold, respectively. These measures are calculated for the periods presented on a consolidated basis.
The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measures.
Costs applicable to sales per gold ounce
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Costs applicable to sales (1)(2) | $ | 1,381 | $ | 1,091 | $ | 2,565 | $ | 2,156 | |||||||||||||||
| Gold sold (thousand ounces) | 1,482 | 1,444 | 2,811 | 2,861 | |||||||||||||||||||
Costs applicable to sales per ounce (3) | $ | 932 | $ | 755 | $ | 912 | $ | 754 | |||||||||||||||
(1)Includes by-product credits of $26 and $72 during the three months ended June 30, 2022 and 2021, respectively, and $53 and $127 during the six months ended June 30, 2022 and 2021, respectively.
(2)Excludes Depreciation and amortization and Reclamation and remediation.
(3)Per ounce measures may not recalculate due to rounding.
Costs applicable to sales per gold equivalent ounce
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Costs applicable to sales (1)(2) | $ | 327 | $ | 190 | $ | 578 | $ | 372 | |||||||||||||||
Gold equivalent ounces - other metals (thousand ounces) (3) | 333 | 302 | 683 | 629 | |||||||||||||||||||
Costs applicable to sales per gold equivalent ounce (4) | $ | 983 | $ | 629 | $ | 846 | $ | 590 | |||||||||||||||
(1)Includes by-product credits of $2 and $2 during the three months ended June 30, 2022 and 2021, respectively, and $4 and $3 during the six months ended June 30, 2022 and 2021, respectively
(2)Excludes Depreciation and amortization and Reclamation and remediation.
(3)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals 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 for 2022 and Gold ($1,200/oz.), Copper ($2.75/lb.), Silver ($22.00/oz.), Lead ($0.90/lb.) and Zinc ($1.05/lb.) pricing for 2021.
(4)Per ounce measures may not recalculate due to rounding.
57
All-In Sustaining Costs
All-in sustaining costs represent the sum of certain costs, recognized as GAAP financial measures, that management considers to be associated with production. All-in sustaining costs per ounce amounts are calculated by dividing all-in sustaining costs by gold ounces or gold equivalent ounces sold.
| Three Months Ended June 30, 2022 | Costs Applicable to Sales (1)(2)(3) | Reclamation Costs (4) | Advanced Projects, Research and Development and Exploration (5) | General and Administrative | Other Expense, Net (6) | Treatment and Refining Costs | Sustaining Capital and Lease Related Costs (7)(8) | All-In Sustaining Costs | Ounces (000) Sold | All-In Sustaining Costs Per oz. (9) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gold | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CC&V | $ | 49 | $ | 4 | $ | 2 | $ | — | $ | 2 | $ | — | $ | 14 | $ | 71 | 46 | $ | 1,553 | ||||||||||||||||||||||||||||||||||||||||
| Musselwhite | 53 | 1 | 2 | — | — | — | 11 | 67 | 40 | 1,693 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Porcupine | 71 | 1 | 4 | — | — | — | 14 | 90 | 68 | 1,328 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Éléonore | 71 | 2 | 1 | — | 2 | — | 14 | 90 | 47 | 1,922 | |||||||||||||||||||||||||||||||||||||||||||||||||
Peñasquito (10) | 127 | 3 | 1 | — | — | 6 | 18 | 155 | 130 | 1,187 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | 2 | — | — | — | 2 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 371 | 11 | 10 | 2 | 4 | 6 | 71 | 475 | 331 | 1,437 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Yanacocha | 73 | 6 | 2 | — | 4 | — | 6 | 91 | 69 | 1,321 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Merian | 94 | 1 | 4 | — | 1 | — | 13 | 113 | 96 | 1,173 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cerro Negro | 71 | 2 | 1 | — | 1 | — | 11 | 86 | 78 | 1,106 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other South America | — | — | — | 2 | — | — | — | 2 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| South America | 238 | 9 | 7 | 2 | 6 | — | 30 | 292 | 243 | 1,203 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 181 | 4 | 1 | — | 1 | 5 | 14 | 206 | 241 | 854 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tanami | 84 | 1 | 1 | — | 2 | — | 28 | 116 | 132 | 873 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | 1 | 2 | — | — | 1 | 4 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 265 | 5 | 3 | 2 | 3 | 5 | 43 | 326 | 373 | 873 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ahafo | 129 | 2 | — | — | — | — | 22 | 153 | 135 | 1,130 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Akyem | 76 | 8 | — | — | — | — | 7 | 91 | 109 | 837 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Africa | — | — | 1 | 3 | — | — | 1 | 5 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | 205 | 10 | 1 | 3 | — | — | 30 | 249 | 244 | 1,017 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada Gold Mines | 302 | 3 | 4 | 2 | — | — | 57 | 368 | 291 | 1,263 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada | 302 | 3 | 4 | 2 | — | — | 57 | 368 | 291 | 1,263 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 16 | 50 | — | — | 2 | 68 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold | $ | 1,381 | $ | 38 | $ | 41 | $ | 61 | $ | 13 | $ | 11 | $ | 233 | $ | 1,778 | 1,482 | $ | 1,199 | ||||||||||||||||||||||||||||||||||||||||
Gold equivalent ounces - other metals (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peñasquito (10) | $ | 278 | $ | 5 | $ | 4 | $ | — | $ | 1 | $ | 32 | $ | 35 | $ | 355 | 264 | $ | 1,347 | ||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 278 | 5 | 4 | — | 1 | 32 | 35 | 355 | 264 | 1,349 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 49 | — | 1 | — | — | 3 | 3 | 56 | 69 | 818 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | — | 1 | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 49 | — | 1 | 1 | — | 3 | 3 | 57 | 69 | 829 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 3 | 11 | — | — | 1 | 15 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold Equivalent Ounces | $ | 327 | $ | 5 | $ | 8 | $ | 12 | $ | 1 | $ | 35 | $ | 39 | $ | 427 | 333 | $ | 1,286 | ||||||||||||||||||||||||||||||||||||||||
| Consolidated | $ | 1,708 | $ | 43 | $ | 49 | $ | 73 | $ | 14 | $ | 46 | $ | 272 | $ | 2,205 | |||||||||||||||||||||||||||||||||||||||||||
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $28 and excludes co-product revenues of $336.
58
(3)Includes stockpile and leach pad inventory adjustments of $2 at CC&V and $27 at NGM.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $16 and $27, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties that have entered the closure phase and have no substantive future economic value of $29 and $4, respectively.
(5)Advanced projects, research and development and exploration excludes development expenditures of $1 at CC&V, $1 at Peñasquito, $1 at Other North America, $3 at Yanacocha, $2 at Merian, $3 at Cerro Negro, $11 at Other South America, $6 at Tanami, $4 at Other Australia, $7 at Ahafo, $4 at Akyem, $5 at NGM and $10 at Corporate and Other, totaling $58 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.
(6)Other expense, net is adjusted for settlement costs of $5, impairment of long-lived and other assets of $2 and distributions from the Newmont Global Community Support Fund of $1.
(7)Includes sustaining capital expenditures of $94 for North America, $30 for South America, $43 for Australia, $29 for Africa, $57 for Nevada, and $3 for Corporate and Other, totaling $256 and excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $263. See Liquidity and Capital Resources within Part I, Item 2, Management's Discussion and Analysis for discussion of major development projects.
(8)Includes finance lease payments for sustaining projects of $16.
(9)Per ounce measures may not recalculate due to rounding.
(10)Costs applicable to sales includes $70 related to the Peñasquito Profit-Sharing Agreement. For further information, refer to Note 3 of the Condensed Consolidated Financial Statements.
(11)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals 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 for 2022.
59
| Three Months Ended June 30, 2021 | Costs Applicable to Sales (1)(2)(3) | Reclamation Costs (4) | Advanced Projects, Research and Development and Exploration (5) | General and Administrative | Other Expense, Net (6)(7) | Treatment and Refining Costs | Sustaining Capital and Lease Related Costs (8)(9) | All-In Sustaining Costs | Ounces (000) Sold | All-In Sustaining Costs Per oz. (10) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gold | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CC&V | $ | 59 | $ | 1 | $ | 5 | $ | — | $ | — | $ | — | $ | 7 | $ | 72 | 63 | $ | 1,142 | ||||||||||||||||||||||||||||||||||||||||
| Musselwhite | 37 | 1 | 2 | — | 1 | — | 9 | 50 | 35 | 1,420 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Porcupine | 61 | 1 | 5 | — | — | — | 13 | 80 | 66 | 1,193 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Éléonore | 65 | — | 1 | — | 1 | — | 19 | 86 | 67 | 1,287 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Peñasquito | 95 | 2 | — | — | 1 | 5 | 14 | 117 | 181 | 656 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | (1) | — | 1 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 317 | 5 | 12 | — | 4 | 5 | 62 | 405 | 412 | 985 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Yanacocha | 32 | 24 | — | — | 8 | — | 6 | 70 | 68 | 1,029 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Merian | 83 | 1 | 3 | — | 2 | — | 10 | 99 | 108 | 909 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cerro Negro | 69 | 2 | — | — | 4 | — | 14 | 89 | 79 | 1,133 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other South America | — | — | — | 2 | 1 | — | — | 3 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| South America | 184 | 27 | 3 | 2 | 15 | — | 30 | 261 | 255 | 1,022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 162 | 3 | 1 | — | — | 3 | 24 | 193 | 189 | 1,023 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tanami | 65 | 1 | 1 | — | 2 | — | 30 | 99 | 109 | 919 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | — | 2 | 1 | — | 2 | 5 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 227 | 4 | 2 | 2 | 3 | 3 | 56 | 297 | 298 | 997 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ahafo | 92 | 2 | 1 | — | 2 | — | 19 | 116 | 104 | 1,122 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Akyem | 56 | 7 | 1 | — | 1 | — | 11 | 76 | 90 | 828 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Africa | — | — | 1 | 2 | — | — | — | 3 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | 148 | 9 | 3 | 2 | 3 | — | 30 | 195 | 194 | 1,000 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada Gold Mines | 215 | 3 | 4 | 2 | 2 | — | 54 | 280 | 285 | 985 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada | 215 | 3 | 4 | 2 | 2 | — | 54 | 280 | 285 | 985 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 14 | 38 | (2) | — | 5 | 55 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold | $ | 1,091 | $ | 48 | $ | 38 | $ | 46 | $ | 25 | $ | 8 | $ | 237 | $ | 1,493 | 1,444 | $ | 1,035 | ||||||||||||||||||||||||||||||||||||||||
Gold equivalent ounces - other metals (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peñasquito | $ | 152 | $ | 3 | $ | 1 | $ | — | $ | 2 | $ | 14 | $ | 25 | $ | 197 | 260 | $ | 755 | ||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | 1 | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 152 | 3 | 1 | 1 | 2 | 14 | 25 | 198 | 260 | 761 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 38 | — | 1 | — | — | 2 | 5 | 46 | 42 | 1,088 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | — | 1 | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 38 | — | 1 | 1 | — | 2 | 5 | 47 | 42 | 1,113 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 6 | 16 | — | — | 1 | 23 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold Equivalent Ounces | $ | 190 | $ | 3 | $ | 8 | $ | 18 | $ | 2 | $ | 16 | $ | 31 | $ | 268 | 302 | $ | 886 | ||||||||||||||||||||||||||||||||||||||||
| Consolidated | $ | 1,281 | $ | 51 | $ | 46 | $ | 64 | $ | 27 | $ | 24 | $ | 268 | $ | 1,761 | |||||||||||||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $74 and excludes co-product revenues of $435.
(3)Includes stockpile and leach pad inventory adjustments of $5 at CC&V.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $20 and $31, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties that have entered the closure phase and have no substantive future economic value of $13 and $24, respectively.
(5)Advanced projects, research and development and exploration excludes development expenditures of $1 at CC&V, $2 at Porcupine, $1 at Éléonore, $2 at Other North America, $3 at Yanacocha, $1 at Cerro Negro, $9 at Other South America, $7 at Tanami, $4 at Other Australia, $4 at Ahafo, $1
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at Akyem, $4 at NGM and $4 at Corporate and Other, totaling $43 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.
(6)Care and maintenance, included in Other expense, net, includes $2 at Tanami of cash care and maintenance costs associated with the site temporarily being placed into care and maintenance or operating at reduced levels in response to the COVID-19 pandemic, during the period ended June 30, 2021 that we would have continued to incur if the site were not temporarily placed into care and maintenance.
(7)Other expense, net is adjusted for impairment of long-lived and other assets of $11, settlement costs of $8, restructuring and severance of $5 and distributions from the Newmont Global Community Support Fund of $1.
(8)Includes sustaining capital expenditures of $74 for North America, $30 for South America, $58 for Australia, $29 for Africa, $54 for Nevada, and $6 for Corporate and Other, totaling $251 and excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $164. See Liquidity and Capital Resources within Part I, Item 2, Management's Discussion and Analysis for discussion of major development projects.
(9)Includes finance lease payments for sustaining projects of $17.
(10)Per ounce measures may not recalculate due to rounding.
(11)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals 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 for 2021.
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| Six Months Ended June 30, 2022 | Costs Applicable to Sales (1)(2)(3) | Reclamation Costs (4) | Advanced Projects, Research and Development and Exploration (5) | General and Administrative | Other Expense, Net (6) | Treatment and Refining Costs | Sustaining Capital and Lease Related Costs (7)(8) | All-In Sustaining Costs | Ounces (000) Sold | All-In Sustaining Costs Per oz. (9) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gold | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CC&V | $ | 101 | $ | 7 | $ | 3 | $ | — | $ | 3 | $ | — | $ | 18 | $ | 132 | 82 | $ | 1,608 | ||||||||||||||||||||||||||||||||||||||||
| Musselwhite | 96 | 3 | 3 | — | 1 | — | 17 | 120 | 72 | 1,670 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Porcupine | 137 | 2 | 6 | — | — | — | 23 | 168 | 128 | 1,313 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Éléonore | 133 | 4 | 1 | — | 3 | — | 26 | 167 | 97 | 1,734 | |||||||||||||||||||||||||||||||||||||||||||||||||
Peñasquito (10) | 214 | 5 | 2 | — | 1 | 13 | 32 | 267 | 264 | 1,013 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | 3 | 1 | — | — | 4 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 681 | 21 | 15 | 3 | 9 | 13 | 116 | 858 | 643 | 1,336 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Yanacocha | 140 | 10 | 2 | — | 7 | — | 11 | 170 | 137 | 1,243 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Merian | 181 | 3 | 5 | — | 2 | — | 24 | 215 | 199 | 1,079 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cerro Negro | 134 | 3 | 1 | — | 7 | — | 22 | 167 | 142 | 1,172 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other South America | — | — | — | 5 | — | — | — | 5 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| South America | 455 | 16 | 8 | 5 | 16 | — | 57 | 557 | 478 | 1,164 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 343 | 9 | 2 | — | 1 | 8 | 27 | 390 | 439 | 888 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tanami | 149 | 1 | 4 | — | 5 | — | 57 | 216 | 231 | 933 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | 1 | 4 | — | — | 4 | 9 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 492 | 10 | 7 | 4 | 6 | 8 | 88 | 615 | 670 | 917 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ahafo | 235 | 4 | 1 | — | 1 | — | 44 | 285 | 243 | 1,171 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Akyem | 143 | 15 | 1 | — | — | — | 17 | 176 | 199 | 884 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Africa | — | — | 1 | 5 | — | — | 1 | 7 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | 378 | 19 | 3 | 5 | 1 | — | 62 | 468 | 442 | 1,057 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada Gold Mines | 559 | 4 | 7 | 5 | — | 1 | 103 | 679 | 578 | 1,176 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada | 559 | 4 | 7 | 5 | — | 1 | 103 | 679 | 578 | 1,176 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 39 | 93 | (1) | — | 6 | 137 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold | $ | 2,565 | $ | 70 | $ | 79 | $ | 115 | $ | 31 | $ | 22 | $ | 432 | $ | 3,314 | 2,811 | $ | 1,179 | ||||||||||||||||||||||||||||||||||||||||
Gold equivalent ounces - other metals (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peñasquito (10) | $ | 483 | $ | 10 | $ | 6 | $ | — | $ | 4 | $ | 65 | $ | 68 | $ | 636 | 559 | $ | 1,138 | ||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | 1 | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 483 | 10 | 6 | 1 | 4 | 65 | 68 | 637 | 559 | 1,140 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 95 | 1 | 1 | — | — | 5 | 7 | 109 | 124 | 881 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | — | 1 | — | — | 1 | 2 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 95 | 1 | 1 | 1 | — | 5 | 8 | 111 | 124 | 895 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 8 | 20 | — | — | 1 | 29 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold Equivalent Ounces | $ | 578 | $ | 11 | $ | 15 | $ | 22 | $ | 4 | $ | 70 | $ | 77 | $ | 777 | 683 | $ | 1,138 | ||||||||||||||||||||||||||||||||||||||||
| Consolidated | $ | 3,143 | $ | 81 | $ | 94 | $ | 137 | $ | 35 | $ | 92 | $ | 509 | $ | 4,091 | |||||||||||||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $57 and excludes co-product revenues of $845.
(3)Includes stockpile and leach pad inventory adjustments of $7 at CC&V, $3 at Merian and $28 at NGM.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $32 and $49, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties that have entered the closure phase and have no substantive future economic value of $57 and $21, respectively.
(5)Advanced projects, research and development and exploration excludes development expenditures of $1 at CC&V, $1 at Porcupine, $3 at Peñasquito, $1 at Other North America, $4 at Yanacocha, $4 at Merian, $6 at Cerro Negro, $20 at Other South America, $9 at Tanami, $7 at Other
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Australia, $10 at Ahafo, $7 at Akyem, $8 at NGM and $14 at Corporate and Other, totaling $95 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.
(6)Other expense, net is adjusted for settlement costs of $18, impairment of long-lived and other assets of $2, restructuring and severance costs of $1 and distributions from the Newmont Global Community Support Fund of $1.
(7)Includes sustaining capital expenditures of $160 for North America, $57 for South America, $89 for Australia, $60 for Africa, $103 for Nevada, and $7 for Corporate and Other, totaling $476 and excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $480. See Liquidity and Capital Resources within Part I, Item 2, Management's Discussion and Analysis for discussion of major development projects.
(8)Includes finance lease payments for sustaining projects of $33.
(9)Per ounce measures may not recalculate due to rounding.
(10)Costs applicable to sales includes $70 related to the Peñasquito Profit-Sharing Agreement. For further information, refer to Note 3 of the Condensed Consolidated Financial Statements.
(11)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals 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 for 2022.
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| Six Months Ended June 30, 2021 | Costs Applicable to Sales (1)(2)(3) | Reclamation Costs (4) | Advanced Projects, Research and Development and Exploration (5) | General and Administrative | Other Expense, Net (6)(7) | Treatment and Refining Costs | Sustaining Capital and Lease Related Costs (8)(9) | All-In Sustaining Costs | Ounces (000) Sold | All-In Sustaining Costs Per oz. (10) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Gold | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CC&V | $ | 120 | $ | 3 | $ | 5 | $ | — | $ | — | $ | — | $ | 16 | $ | 144 | 119 | $ | 1,209 | ||||||||||||||||||||||||||||||||||||||||
| Musselwhite | 76 | 1 | 4 | — | 1 | — | 18 | 100 | 74 | 1,359 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Porcupine | 127 | 2 | 9 | — | — | — | 22 | 160 | 140 | 1,146 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Éléonore | 118 | 1 | 2 | — | 3 | — | 37 | 161 | 128 | 1,258 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Peñasquito | 184 | 4 | 1 | — | 4 | 15 | 30 | 238 | 371 | 644 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | 2 | 1 | — | — | 3 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 625 | 11 | 21 | 2 | 9 | 15 | 123 | 806 | 832 | 971 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Yanacocha | 82 | 36 | 2 | — | 16 | — | 8 | 144 | 129 | 1,117 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Merian | 164 | 2 | 3 | — | 3 | — | 20 | 192 | 216 | 887 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Cerro Negro | 109 | 3 | 1 | — | 10 | — | 25 | 148 | 126 | 1,181 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other South America | — | — | — | 4 | 2 | — | — | 6 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| South America | 355 | 41 | 6 | 4 | 31 | — | 53 | 490 | 471 | 1,041 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 293 | 6 | 3 | — | — | 6 | 80 | 388 | 335 | 1,157 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Tanami | 135 | 1 | 2 | — | 3 | — | 55 | 196 | 231 | 854 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | — | 5 | 1 | — | 3 | 9 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 428 | 7 | 5 | 5 | 4 | 6 | 138 | 593 | 566 | 1,048 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ahafo | 184 | 4 | 3 | — | 3 | — | 36 | 230 | 208 | 1,108 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Akyem | 122 | 15 | 1 | — | 1 | — | 19 | 158 | 194 | 806 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Africa | — | — | 1 | 4 | — | — | — | 5 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Africa | 306 | 19 | 5 | 4 | 4 | — | 55 | 393 | 402 | 974 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada Gold Mines | 442 | 5 | 6 | 5 | 2 | — | 85 | 545 | 590 | 924 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nevada | 442 | 5 | 6 | 5 | 2 | — | 85 | 545 | 590 | 924 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 39 | 91 | — | — | 8 | 138 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold | $ | 2,156 | $ | 83 | $ | 82 | $ | 111 | $ | 50 | $ | 21 | $ | 462 | $ | 2,965 | 2,861 | $ | 1,037 | ||||||||||||||||||||||||||||||||||||||||
Gold equivalent ounces - other metals (11) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peñasquito | $ | 307 | $ | 5 | $ | 1 | $ | — | $ | 6 | $ | 57 | $ | 48 | $ | 424 | 558 | $ | 760 | ||||||||||||||||||||||||||||||||||||||||
| Other North America | — | — | — | 1 | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| North America | 307 | 5 | 1 | 1 | 6 | 57 | 48 | 425 | 558 | 762 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Boddington | 65 | 1 | 1 | — | — | 3 | 17 | 87 | 71 | 1,216 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other Australia | — | — | — | 1 | — | — | — | 1 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Australia | 65 | 1 | 1 | 1 | — | 3 | 17 | 88 | 71 | 1,231 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate and Other | — | — | 6 | 16 | — | — | 1 | 23 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total Gold Equivalent Ounces | $ | 372 | $ | 6 | $ | 8 | $ | 18 | $ | 6 | $ | 60 | $ | 66 | $ | 536 | 629 | $ | 851 | ||||||||||||||||||||||||||||||||||||||||
| Consolidated | $ | 2,528 | $ | 89 | $ | 90 | $ | 129 | $ | 56 | $ | 81 | $ | 528 | $ | 3,501 | |||||||||||||||||||||||||||||||||||||||||||
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $130 and excludes co-product revenues of $825.
(3)Includes stockpile and leach pad inventory adjustments of $9 at CC&V and $10 at NGM.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $40 and $49, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties that have entered the closure phase and have no substantive future economic value of $26 and $37, respectively.
(5)Advanced projects, research and development and exploration excludes development expenditures of $3 at CC&V, $3 at Porcupine, $2 at Éléonore, $2 at Other North America, $4 at Yanacocha, $1 at Merian, $1 at Cerro Negro, $15 at Other South America, $9 at Tanami, $6 at Other Australia, $5
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at Ahafo, $2 at Akyem, $8 at NGM and $4 at Corporate and Other, totaling $65 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.
(6)Care and maintenance, included in Other expense, net, includes $2 at Tanami of cash care and maintenance costs associated with the site temporarily being placed into care and maintenance or operating at reduced levels in response to the COVID-19 pandemic, during the period ended June 30, 2021 that we would have continued to incur if the site were not temporarily placed into care and maintenance.
(7)Other expense, net is adjusted for impairment of long-lived and other assets of $12, settlement costs of $11, restructuring and severance costs of $10 and distributions from the Newmont Global Community Support Fund of $2.
(8)Includes sustaining capital expenditures of $147 for North America, $53 for South America, $146 for Australia, $54 for Africa, $85 for Nevada, and $9 for Corporate and Other, totaling $494 and excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $320. See Liquidity and Capital Resources within Part I, Item 2, Management's Discussion and Analysis for discussion of major development projects.
(9)Includes finance lease payments for sustaining projects of $34.
(10)Per ounce measures may not recalculate due to rounding.
(11)Gold equivalent ounces is calculated as pounds or ounces produced multiplied by the ratio of the other metals 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 for 2021.
Accounting Developments
For a discussion of Recently Adopted and Recently Issued Accounting Pronouncements, refer to Note 2 of the Condensed Consolidated Financial Statements.
Refer to our Management’s Discussion and Analysis of Accounting Developments and Critical Accounting Estimates included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 24, 2022 for additional information on our critical accounting policies and estimates.
Safe Harbor Statement
Certain statements contained in this report (including information incorporated by reference herein) are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provided for under these sections. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)”, “estimate(s)”, “should”, “intend(s)” and similar expressions are intended to identify forward-looking statements. Our forward-looking statements may include, without limitation:
•estimates regarding future earnings and the sensitivity of earnings to gold, copper and other metal prices;
•estimates of future mineral production and sales;
•estimates of future production costs, other expenses and taxes for specific operations and on a consolidated basis;
•estimates of future cash flows and the sensitivity of cash flows to gold and other metal prices;
•estimates of future capital expenditures, construction, production or closure activities and other cash needs, for specific operations and on a consolidated basis, and expectations as to the funding or timing thereof;
•estimates as to the projected development of certain ore deposits, including the timing of such development, the costs of such development and other capital costs, financing plans for these deposits and expected production commencement dates;
•estimates of reserves and statements regarding future exploration results and reserve replacement and the sensitivity of reserves to metal price changes;
•statements regarding the availability of, and terms and costs related to, future borrowing or financing and expectations regarding future debt repayments or debt tender transactions;
•estimates regarding future exploration expenditures, results and reserves;
•statements regarding fluctuations in financial and currency markets;
•estimates regarding potential cost savings, productivity, operating performance and ownership and cost structures;
•expectations regarding future or recent acquisitions and joint ventures, including, without limitation, projected benefits, synergies, value creation, integration, timing and costs and related valuations and other matters;
•expectations regarding the start-up time, design, mine life, production and costs applicable to sales and exploration potential of our projects;
•statements regarding future hedge and derivative positions or modifications thereto;
•statements regarding political, economic or governmental conditions and environments;
•statements regarding the impacts of changes in the legal and regulatory environment in which we operate;
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•estimates of future costs, accruals for reclamation costs and other liabilities for certain environmental matters, including without limitation, in connection with water treatment and tailings management;
•estimates of income taxes and expectations relating to tax contingencies or tax audits;
•estimates of pension and other post-retirement costs;
•expectations regarding the impacts of COVID-19, COVID variants and other health and safety conditions; and
•expectations as to whether and for how long certain sites will be placed into care and maintenance including as a result of COVID-19 occurrences and related restrictions.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Such risks and uncertainties include, but are not limited to:
•the price of gold, copper and other metal prices and commodities;
•the cost of operations;
•currency fluctuations;
•geological and metallurgical assumptions;
•operating performance of equipment, processes and facilities;
•the impact of COVID-19, including, without limitation, impacts on employees, operations, regulations resulting in potential business interruptions and travel restrictions, commodity prices, costs, supply chain and the U.S. and the global economy;
•labor relations;
•timing of receipt of necessary governmental permits or approvals;
•domestic and foreign laws or regulations, particularly relating to the environment, mining and processing;
•changes in tax laws;
•domestic and international economic and political conditions;
•domestic and international conflicts, including, without limitation, in connection with Russia's invasion of Ukraine resulting in potential volatility in commodity prices and currencies and disruptions to banking and capital markets;
•our ability to obtain or maintain necessary financing; and
•other risks and hazards associated with mining operations.
More detailed information regarding these factors is included in the section titled Item 1, Business; Item 1A, Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2021 as well as elsewhere throughout this report. Many of these factors are beyond our ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements.
All subsequent written and oral forward-looking statements attributable to Newmont or to persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We disclaim any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (dollars in millions, except per ounce and per pound amounts).
Metal Prices
Changes in the market price of gold significantly affect our profitability and cash flow. Gold prices can fluctuate widely due to numerous factors, such as demand; forward selling by producers; central bank sales, purchases and lending; investor sentiment; the strength of the U.S. dollar; inflation, deflation, or other general price instability; and global mine production levels. Changes in the market price of copper, silver, lead and zinc also affect our profitability and cash flow. These metals are traded on established international exchanges and prices generally reflect market supply and demand, but can also be influenced by speculative trading in the commodity or by currency exchange rates.
Decreases in the market price of metals can also significantly affect the value of our product inventory, stockpiles and leach pads, and it may be necessary to record a write-down to the net realizable value, as well as significantly impact our carrying value of
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long-lived assets and goodwill. Refer to Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021 for information regarding the sensitivity of our impairment analyses over long-lived assets and goodwill to changes in metal price.
Net realizable value represents the estimated future sales price based on short-term and long-term metals prices, less estimated costs to complete production and bring the product to sale. The primary factors that influence the need to record write-downs of our stockpiles, leach pads and product inventory include short-term and long-term metals prices and costs for production inputs such as labor, fuel and energy, materials and supplies as well as realized ore grades and recovery rates. The significant assumptions in determining the stockpile, leach pad and product inventory adjustments for each mine site reporting unit at June 30, 2022 included production cost and capitalized expenditure assumptions unique to each operation, a short-term and long-term gold price of $1,871 and $1,600 per ounce, respectively, a short-term and long-term copper price of $4.31 and $3.50 per pound, respectively, a short-term and long-term silver price of $22.60 and $20.00 per ounce, respectively, a short-term and long-term lead price of $1.00 and $1.05 per pound, respectively, a short-term and long-term zinc price of $1.78 and $1.30 per pound, respectively, a short-term and long-term U.S. to Australian dollar exchange rate of $0.71 and $0.75, respectively, a short-term and long-term U.S. to Canadian dollar exchange rate of $0.78 and $0.80, respectively, a short-term and long-term U.S. dollar to Mexican Peso exchange rate of $0.05 and $0.04, respectively and a short-term and long-term U.S. dollar to Argentinian Peso exchange rate of $0.01 and $0.004, respectively.
The net realizable value measurement involves the use of estimates and assumptions unique to each mining operation regarding current and future operating and capital costs, metal recoveries, production levels, commodity prices, proven and probable reserve quantities, engineering data and other factors. A high degree of judgment is involved in determining such assumptions and estimates and no assurance can be given that actual results will not differ significantly from those estimates and assumptions.
Interest Rate Risk
We are subject to interest rate risk related to the fair value of our senior notes which consist of fixed rates. For fixed rate debt, changes in interest rates generally affect the fair value of the debt instrument, but not our earnings or cash flows. The terms of our fixed rate debt obligations do not generally allow investors to demand payment of these obligations prior to maturity. Therefore, we do not have significant exposure to interest rate risk for our fixed rate debt; however, we do have exposure to fair value risk if we repurchase or exchange long-term debt prior to maturity which could be material. See Note 9 to our Condensed Consolidated Financial Statements for further information pertaining to the fair value of our fixed rate debt.
Foreign Currency
In addition to our operations in the U.S., we have significant operations and/or assets in Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia and Ghana. All of our operations sell their gold, copper, silver, lead and zinc production based on U.S. dollar metal prices. Foreign currency exchange rates can fluctuate widely due to numerous factors, such as supply and demand for foreign and U.S. currencies and U.S. and foreign country economic conditions. Fluctuations in the local currency exchange rates in relation to the U.S. dollar can increase or decrease profit margins, cash flow and Costs applicable to sales per ounce/ pound to the extent costs are paid in local currency at foreign operations.
Commodity Price Exposure
Our provisional concentrate sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the respective metal concentrates at the prevailing indices’ prices at the time of sale. The embedded derivative, which is not designated for hedge accounting, is marked to market through earnings each period prior to final settlement.
We perform an analysis on the provisional concentrate sales to determine the potential impact to Net income (loss) attributable to Newmont stockholders for each 10% change to the average price on the provisional concentrate sales subject to final pricing over the next several months. Refer below for our analysis as of June 30, 2022.
| Provisionally Priced Sales Subject to Final Pricing (ounces/pounds) | Average Provisional Price (per ounce/pound) | Effect of 10% change in Average Price (millions) | Market Closing Settlement Price (1) (per ounce/pound) | ||||||||||||||||||||
| Gold (ounces, in thousands) | 200 | $ | 1,810 | $ | 25 | $ | 1,817 | ||||||||||||||||
| Copper (pounds, in millions) | 31 | $ | 3.74 | $ | 8 | $ | 3.74 | ||||||||||||||||
| Silver (ounces, in millions) | 4 | $ | 20.35 | $ | 5 | $ | 20.35 | ||||||||||||||||
| Lead (pounds, in millions) | 16 | $ | 0.87 | $ | 1 | $ | 0.87 | ||||||||||||||||
| Zinc (pounds, in millions) | 85 | $ | 1.44 | $ | 8 | $ | 1.47 | ||||||||||||||||
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(1)The closing settlement price as of June 30, 2022 is determined utilizing the London Metal Exchange for copper, lead and zinc and the London Bullion Market Association for gold and silver.
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ITEM 4. CONTROLS AND PROCEDURES.
During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as amended). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in its reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended June 30, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Information regarding legal proceedings is contained in Note 17 of the Condensed Consolidated Financial Statements contained in this report and is incorporated herein by reference.
ITEM 1A. RISK FACTORS.
There were no material changes from the risk factors set forth under Part I, Item 1A, Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The risks described in our Annual Report and herein are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, cash flows and/or future results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
| (a) | (b) | (c) | (d) | |||||||||||||||||||||||
| Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Maximum Dollar Value of Shares that may yet be Purchased under the Plans or Programs (2) | ||||||||||||||||||||||
April 1, 2022 through April 30, 2022 | 1,102 | 65.04 | — | $ | 475,022,834 | |||||||||||||||||||||
May 1, 2022 through May 31, 2022 | 4,579 | 72.58 | — | $ | 475,022,834 | |||||||||||||||||||||
June 1, 2022 through June 30, 2022 | 2,524 | 81.23 | — | $ | 475,022,834 | |||||||||||||||||||||
(1)The total number of shares purchased (and the average price paid per share) reflects: (i) shares purchased pursuant to the repurchase program described in (2) below; and (ii) represents shares delivered to the Company from stock awards held by employees upon vesting for the purpose of covering the recipients’ tax withholding obligations, totaling 1,102 shares, 4,579 shares and 2,524 shares for the fiscal months of April, May and June 2022, respectively.
(2)In January 2021, the Company announced that the Board of Directors authorized a stock repurchase program to repurchase shares of outstanding common stock to offset the dilutive impact of employee stock award vesting and to provide returns to shareholders, provided that the aggregate value of shares of common stock repurchased under the new program does not exceed $1 billion. In February 2022, the Board of Directors authorized the extension of this program to December 31, 2022. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including trading volume, market conditions, legal requirements, business conditions and other factors. The repurchase program may be discontinued at any time, and the program does not obligate the Company to acquire any specific number of shares of its common stock.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
At Newmont, safety is a core value, and we strive for superior performance. Our health and safety management system, which includes detailed standards and procedures for safe production, addresses topics such as employee training, risk management, workplace inspection, emergency response, accident investigation and program auditing. In addition to strong leadership and involvement from all levels of the organization, these programs and procedures form the cornerstone of safety at Newmont, ensuring that employees are provided a safe and healthy environment and are intended to reduce workplace accidents, incidents and losses, comply with all mining-related regulations and provide support for both regulators and the industry to improve mine safety.
In addition, we have established our “Rapid Response” crisis management process to mitigate and prevent the escalation of adverse consequences if existing risk management controls fail, particularly if an incident may have the potential to seriously impact the safety of employees, the community or the environment. This process provides appropriate support to an affected site to complement their technical response to an incident, so as to reduce the impact by considering the environmental, strategic, legal, financial and public image aspects of the incident, to ensure communications are being carried out in accordance with legal and ethical requirements and to identify actions in addition to those addressing the immediate hazards.
The health and safety of our people and our host communities is paramount. This is why Newmont continues to sustain robust controls at our operations and offices globally in response to the on-going COVID-19 pandemic.
The operation of our U.S. based mine is subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our mine on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued has also increased in recent years.
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Newmont is required to report certain mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, and that required information is included in Exhibit 95 and is incorporated by reference into this Quarterly Report. It is noted that the Nevada mines owned by Nevada Gold Mines LLC, a joint venture between the Company (38.5%) and Barrick Gold Corporation (“Barrick”) (61.5%), are not included in the Company’s Exhibit 95 mine safety disclosure reporting as such sites are operated by our joint venture partner, Barrick.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
____________________________
*This exhibit relates to compensatory plans or arrangements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| NEWMONT CORPORATION | |||||
| (Registrant) | |||||
| Date: July 25, 2022 | /s/ NANCY K. BUESE | ||||
| Nancy K. Buese | |||||
| Executive Vice President and Chief Financial Officer | |||||
| (Principal Financial Officer) | |||||
| Date: July 25, 2022 | /s/ BRIAN C. TABOLT | ||||
| Brian C. Tabolt | |||||
| Vice President, Controller and Chief Accounting Officer | |||||
| (Principal Accounting Officer) | |||||
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