ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED 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 of Consolidated Financial Condition and Results of Operations (“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”). We use certain non-GAAP financial measures in our MD&A. For a detailed description of each of the non-GAAP measures used in this MD&A, please refer to the discussion under Non-GAAP Financial Measures. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included in this annual report.
The following MD&A generally discusses our consolidated financial condition and results of operations for 2023 and 2022 and year-to-year comparisons between 2023 and 2022. Discussions of our consolidated financial condition and results of operations for 2021 and year-to-year comparisons between 2022 and 2021 are included in "Exhibit 99.1 Updated portions of Newmont Corporation's Annual Reports on Form 10-K for the fiscal year ended December 31, 2022", Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations, of the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 20, 2023. 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 has been 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, Papua New Guinea, Ecuador, Fiji, and Ghana. Our goal is to create value and improve lives through sustainable and responsible mining.
Refer to the Consolidated Financial Results, Results of Consolidated Operations, Liquidity and Capital Resources and Non-GAAP Financial Measures for information about the continued impacts from the COVID-19 pandemic, the Russian invasion of Ukraine, and the resulting significant inflation experienced globally, as well as the effects of certain counter measures taken by central banks, on the Company. Also refer to discussion of Risk and Uncertainties within Note 2 of the 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 and the risk of potential impairment to certain assets.
Based on a comprehensive review of the Company’s portfolio of assets following the Newcrest acquisition, the Company’s Board of Directors approved a portfolio optimization program to divest six non-core assets and a development project in February 2024. The non-core assets to be divested include Akyem, CC&V, Éléonore, Porcupine, Musselwhite, Telfer, and a development project in Canada. In February 2024, the Company concluded that these non-core assets and the development project met the accounting requirements to be presented as Held for Sale in the first quarter of 2024, based on progress made through our active sales program and management’s expectation that the sale is probable and will be completed within 12 months. As of December 31, 2023, the aggregate net book value of the non-core assets and the development project was $3,419.
On November 6, 2023, the Company completed its business combination transaction with Newcrest Mining Limited, a public Australian mining company limited by shares ("Newcrest"), whereby Newmont, through Newmont Overseas Holdings Pty Ltd, an Australian proprietary company limited by shares (“Newmont Sub”), acquired all of the ordinary shares of Newcrest in a fully stock transaction for total non-cash consideration of $13,549. Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont (such acquisition, the “Newcrest transaction”). The combined company continues to be traded on the New York Stock Exchange under the ticker NEM. The combined company is also listed on the Toronto Stock Exchange under the ticker NGT, on the Australian Securities Exchange under the ticker NEM, and on the Papua New Guinea Securities Exchange under the ticker NEM. For further information, refer to Note 3 to the Consolidated Financial Statements.
In January 2023, Newmont reassessed and revised its operating strategies and the accountabilities of the senior leadership team in light of the continuing volatile and uncertain market conditions, and in November 2023, the Company completed the Newcrest transaction. Following these changes, the Company reevaluated its segments to reflect the mining operations acquired and certain changes in the financial information regularly reviewed by Newmont's Chief Operating Decision Maker ("CODM"). As a result, the Company determined that its reportable segments were each of its 17 mining operations that it manages and its 38.5% proportionate interest in Nevada Gold Mines ("NGM") which it does not directly manage. Segment results for the prior periods have been recast to reflect the change in reportable segments.
In the second quarter of 2023, the Company announced the deferral of the full-funds investment decision for the Yanacocha Sulfides project in Peru for at least two years, currently estimated to occur in 2026. With the delay of the Yanacocha Sulfides project,
management will focus its efforts on optimizing its allocation of funds to current operations and other capital commitments, while also assessing execution options and project plans options, up to and including transitioning Yanacocha operations into full closure. Refer to Note 2 to the Consolidated Financial Statements for further discussion.
In the first quarter of 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"). The Company acquired the remaining 5% interest previously held by Sumitomo in the second quarter of 2022. At December 31, 2023, the Company holds 100% ownership interest in Yanacocha. Refer to Note 1 to the Consolidated Financial Statements for further details regarding these transactions.
For information on asset sales impacting comparability of below results, refer to Note 9 to the Consolidated Financial Statements.
Consolidated Financial Results
The details of our Net income (loss) from continuing operations attributable to Newmont stockholders are set forth below:
| | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | Increase (decrease) | | |
| 2023 | | 2022 | | |
Net income (loss) from continuing operations attributable to Newmont stockholders | $ | (2,521) | | | $ | (459) | | | $ | (2,062) | | | |
Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted | $ | (3.00) | | | $ | (0.58) | | | $ | (2.42) | | | |
| | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | Increase (decrease) | | |
| 2022 | | 2021 | | |
Net income (loss) from continuing operations attributable to Newmont stockholders | $ | (459) | | | $ | 1,109 | | | $ | (1,568) | | | |
Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted | $ | (0.58) | | | $ | 1.39 | | | $ | (1.97) | | | |
Net income (loss) from continuing operations attributable to Newmont stockholders decreased during the year ended December 31, 2023, compared to the same period in 2022, primarily due to (i) higher Reclamation and Remediation; (ii) higher Impairment charges in 2023 compared to 2022; (iii) the Peñasquito labor strike; (iv) Newcrest transaction and integration costs of $464 incurred in 2023; (v) a loss on abandonment of $235 related to the Peñasquito pyrite leach plant; (vi) higher income tax expense; and (vii) lower production at Akyem to re-sequence the mine plan and temporarily suspend mining in the main pit to make safety improvements and fortify the catch berms above the haul road into the pit.
The decrease in Net income (loss) from continuing operations attributable to Newmont stockholders is partially offset by (i) higher average realized prices for gold, silver and copper; (ii) lower Depreciation and amortization; (iii) an increase to Net income (loss) from continuing operations attributable to Newmont stockholders of $136 related to the acquired Newcrest sites; (iv) a higher non-cash pension settlement charge recognized in 2022 compared to 2023; and (v) higher interest income due to interest earned on time deposits in 2023. See below for further information on the change in Depreciation and amortization.
The details and analyses of our Sales for all periods presented are set forth below. Refer to Note 5 to the Consolidated Financial Statements for additional information.
| | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | Increase (decrease) | | Percent Change |
| 2023 | | 2022 | | |
Gold | $ | 10,593 | | | $ | 10,416 | | | $ | 177 | | | 2 | % |
Copper | 575 | | | 316 | | | 259 | | | 82 | |
Silver | 335 | | | 549 | | | (214) | | | (39) | |
Lead | 96 | | | 133 | | | (37) | | | (28) | |
Zinc | 213 | | | 501 | | | (288) | | | (57) | |
| $ | 11,812 | | | $ | 11,915 | | | $ | (103) | | | (1) | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | Increase (decrease) | | Percent Change |
| 2022 | | 2021 | | |
Gold | $ | 10,416 | | | $ | 10,543 | | | $ | (127) | | | (1) | % |
Copper | 316 | | | 295 | | | 21 | | | 7 | |
Silver | 549 | | | 651 | | | (102) | | | (16) | |
Lead | 133 | | | 172 | | | (39) | | | (23) | |
Zinc | 501 | | | 561 | | | (60) | | | (11) | |
| $ | 11,915 | | | $ | 12,222 | | | $ | (307) | | | (3) | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2023 |
| Gold | | Copper | | Silver | | Lead | | Zinc |
| (ounces) | | (pounds) | | (ounces) | | (pounds) | | (pounds) |
Consolidated sales: | | | | | | | | | |
Gross before provisional pricing and streaming impact | $ | 10,605 | | | $ | 601 | | | $ | 312 | | | $ | 103 | | | $ | 281 | |
Provisional pricing mark-to-market | 34 | | | 15 | | | 7 | | | (4) | | | (15) | |
Silver streaming amortization | — | | | — | | | 42 | | | — | | | — | |
Gross after provisional pricing and streaming impact | 10,639 | | | 616 | | | 361 | | | 99 | | | 266 | |
Treatment and refining charges | (46) | | | (41) | | | (26) | | | (3) | | | (53) | |
Net | $ | 10,593 | | | $ | 575 | | | $ | 335 | | | $ | 96 | | | $ | 213 | |
Consolidated ounces/pounds sold (millions) | 5,420 | | | 155 | | | 17 | | | 107 | | | 222 | |
Average realized price (per ounce/pound): (1) | | | | | | | | | |
Gross before provisional pricing and streaming impact | $ | 1,957 | | | $ | 3.87 | | | $ | 18.53 | | | $ | 0.96 | | | $ | 1.27 | |
Provisional pricing mark-to-market | 6 | | | 0.10 | | | 0.44 | | | (0.03) | | | (0.07) | |
Silver streaming amortization | — | | | — | | | 2.56 | | | — | | | — | |
Gross after provisional pricing and streaming impact | 1,963 | | | 3.97 | | | 21.53 | | | 0.93 | | | 1.20 | |
Treatment and refining charges | (9) | | | (0.26) | | | (1.56) | | | (0.03) | | | (0.24) | |
Net | $ | 1,954 | | | $ | 3.71 | | | $ | 19.97 | | | $ | 0.90 | | | $ | 0.96 | |
___________________________
(1)Per ounce/pound measures may not recalculate due to rounding.
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| Year Ended December 31, 2022 |
| Gold | | Copper | | Silver | | Lead | | Zinc |
| (ounces) | | (pounds) | | (ounces) | | (pounds) | | (pounds) |
Consolidated sales: | | | | | | | | | |
Gross before provisional pricing and streaming impact | $ | 10,461 | | | $ | 337 | | | $ | 533 | | | $ | 145 | | | $ | 583 | |
Provisional pricing mark-to-market | (2) | | | (11) | | | (11) | | | (1) | | | (9) | |
Silver streaming amortization | — | | | — | | | 73 | | | — | | | — | |
Gross after provisional pricing and streaming impact | 10,459 | | | 326 | | | 595 | | | 144 | | | 574 | |
Treatment and refining charges | (43) | | | (10) | | | (46) | | | (11) | | | (73) | |
Net | $ | 10,416 | | | $ | 316 | | | $ | 549 | | | $ | 133 | | | $ | 501 | |
Consolidated ounces/pounds sold (millions) | 5,812 | | | 85 | | | 30 | | | 147 | | | 373 | |
Average realized price (per ounce/pound): (1) | | | | | | | | | |
Gross before provisional pricing and streaming impact | $ | 1,800 | | | $ | 3.94 | | | $ | 17.90 | | | $ | 0.98 | | | $ | 1.56 | |
Provisional pricing mark-to-market | — | | | (0.13) | | | (0.35) | | | — | | | (0.02) | |
Silver streaming amortization | — | | | — | | | 2.45 | | | — | | | — | |
Gross after provisional pricing and streaming impact | 1,800 | | | 3.81 | | | 20.00 | | | 0.98 | | | 1.54 | |
Treatment and refining charges | (8) | | | (0.12) | | | (1.55) | | | (0.07) | | | (0.20) | |
Net | $ | 1,792 | | | $ | 3.69 | | | $ | 18.45 | | | $ | 0.91 | | | $ | 1.34 | |
____________________________
(1)Per ounce/pounds measures may not recalculate due to rounding.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, 2021 |
| Gold | | Copper | | Silver | | Lead | | Zinc |
| (ounces) | | (pounds) | | (ounces) | | (pounds) | | (pounds) |
Consolidated sales: | | | | | | | | | |
Gross before provisional pricing and streaming impact | $ | 10,581 | | | $ | 292 | | | $ | 641 | | | $ | 173 | | | $ | 593 | |
Provisional pricing mark-to-market | 9 | | | 10 | | | (12) | | | 4 | | | 21 | |
Silver streaming amortization | — | | | — | | | 79 | | | — | | | — | |
Gross after provisional pricing and streaming impact | 10,590 | | | 302 | | | 708 | | | 177 | | | 614 | |
Treatment and refining charges | (47) | | | (7) | | | (57) | | | (5) | | | (53) | |
Net | $ | 10,543 | | | $ | 295 | | | $ | 651 | | | $ | 172 | | | $ | 561 | |
Consolidated ounces/pounds sold (millions) | 5,897 | | | 69 | | | 32 | | | 173 | | | 433 | |
Average realized price (per ounce/pound): (1) | | | | | | | | | |
Gross before provisional pricing and streaming impact | $ | 1,794 | | | $ | 4.24 | | | $ | 19.92 | | | $ | 1.00 | | | $ | 1.37 | |
Provisional pricing mark-to-market | 2 | | | 0.15 | | | (0.40) | | | 0.02 | | | 0.05 | |
Silver streaming amortization | — | | | — | | | 2.44 | | | — | | | — | |
Gross after provisional pricing and streaming impact | 1,796 | | | 4.39 | | | 21.96 | | | 1.02 | | | 1.42 | |
Treatment and refining charges | (8) | | | (0.10) | | | (1.77) | | | (0.02) | | | (0.12) | |
Net | $ | 1,788 | | | $ | 4.29 | | | $ | 20.19 | | | $ | 1.00 | | | $ | 1.30 | |
____________________________
(1)Per ounce/pound measures may not recalculate due to rounding.
The change in consolidated sales is due to:
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| Year Ended December 31, |
| 2023 vs. 2022 |
| Gold | | Copper | | Silver | | Lead | | Zinc |
| (ounces) | | (pounds) | | (ounces) | | (pounds) | | (pounds) |
Increase (decrease) in consolidated ounces/pounds sold | $ | (704) | | | $ | 266 | | | $ | (260) | | | $ | (39) | | | $ | (233) | |
Increase (decrease) in average realized price | 884 | | | 24 | | | 26 | | | (6) | | | (75) | |
Decrease (increase) in treatment and refining charges | (3) | | | (31) | | | 20 | | | 8 | | | 20 | |
| $ | 177 | | | $ | 259 | | | $ | (214) | | | $ | (37) | | | $ | (288) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2022 vs. 2021 |
| Gold | | Copper | | Silver | | Lead | | Zinc |
| (ounces) | | (pounds) | | (ounces) | | (pounds) | | (pounds) |
Increase (decrease) in consolidated ounces/pounds sold | $ | (153) | | | $ | 59 | | | $ | (55) | | | $ | (28) | | | $ | (85) | |
Increase (decrease) in average realized price | 22 | | | (35) | | | (58) | | | (5) | | | 45 | |
Decrease (increase) in treatment and refining charges | 4 | | | (3) | | | 11 | | | (6) | | | (20) | |
| $ | (127) | | | $ | 21 | | | $ | (102) | | | $ | (39) | | | $ | (60) | |
Sales decreased during the year ended December 31, 2023, compared to the same period in 2022, by $103. Of the $10,593 of gold sales and $575 of copper sales in 2023, $732 and $212, respectively, were attributable to sites acquired in the Newcrest transaction. Excluding the impact of these sites, gold sales decreased $555 (5%) and copper sales increased $47 (15%).
For discussion regarding drivers impacting sales volumes by site, refer to Results of Consolidated Operations below.
The details of our Costs applicable to sales are set forth below.
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| Year Ended December 31, | | Increase (decrease) | | Percent Change |
| 2023 | | 2022 | | |
Gold | $ | 5,689 | | | $ | 5,423 | | | $ | 266 | | | 5 | % |
Copper | 359 | | | 181 | | | 178 | | | 98 | |
Silver | 300 | | | 454 | | | (154) | | | (34) | |
Lead | 98 | | | 94 | | | 4 | | | 4 | |
Zinc | 253 | | | 316 | | | (63) | | | (20) | |
| $ | 6,699 | | | $ | 6,468 | | | $ | 231 | | | 4 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, | | Increase (decrease) | | Percent Change |
| 2022 | | 2021 | | |
Gold | $ | 5,423 | | | $ | 4,628 | | | $ | 795 | | | 17 | % |
Copper | 181 | | | 143 | | | 38 | | | 27 | |
Silver | 454 | | | 332 | | | 122 | | | 37 | |
Lead | 94 | | | 76 | | | 18 | | | 24 | |
Zinc | 316 | | | 256 | | | 60 | | | 23 | |
| $ | 6,468 | | | $ | 5,435 | | | $ | 1,033 | | | 19 | % |
The increase in Costs applicable to sales during the year ended December 31, 2023, compared to the same period in 2022, is primarily due to the impact of sites acquired in the Newcrest transaction, which contributed $629 to Costs applicable to sales.
Excluding the impact of the Newcrest transaction, Costs applicable to sales decreased $398 primarily as a result of (i) a decrease of $497 at Peñasquito due to the labor strike that began in June 2023 and continued into the fourth quarter and lower profit-sharing in 2023 due to lower taxable income; and (ii) lower production at Akyem to re-sequence the mine plan and temporarily suspend mining in the main pit to make safety improvements and fortify the catch berms above the haul road into the pit, which resulted in lower royalties and lower energy and equipment maintenance costs. The decrease in Costs applicable to sales excluding the impact of sites acquired in the Newcrest transaction was offset by (i) lower build-up of inventory and higher royalty costs at NGM in 2023; (ii) higher maintenance costs at Cerro Negro, Éléonore, Porcupine, Musselwhite, and NGM; and (iii) higher materials, labor, and contracted service costs at Cerro Negro, Musselwhite, and Éléonore resulting from higher cost inputs.
For discussion regarding other significant drivers impacting Costs applicable to sales by site, refer to Results of Consolidated Operations below.
The details of our Depreciation and amortization are set forth below. Refer to Note 4 of the Consolidated Financial Statements for additional information.
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| Year Ended December 31, | | Increase (decrease) | | Percent Change |
| 2023 | | 2022 | | |
Gold | $ | 1,730 | | | $ | 1,838 | | | $ | (108) | | | (6) | % |
Copper | 53 | | | 34 | | | 19 | | | 56 | |
Silver | 134 | | | 151 | | | (17) | | | (11) | |
Lead | 45 | | | 32 | | | 13 | | | 41 | |
Zinc | 105 | | | 96 | | | 9 | | | 9 | |
Other | 41 | | | 34 | | | 7 | | | 21 | |
| $ | 2,108 | | | $ | 2,185 | | | $ | (77) | | | (4) | % |
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| Year Ended December 31, | | Increase (decrease) | | Percent Change |
| 2022 | | 2021 | | |
Gold | $ | 1,838 | | | $ | 1,935 | | | $ | (97) | | | (5) | % |
Copper | 34 | | | 23 | | | 11 | | | 48 | |
Silver | 151 | | | 169 | | | (18) | | | (11) | |
Lead | 32 | | | 39 | | | (7) | | | (18) | |
Zinc | 96 | | | 112 | | | (16) | | | (14) | |
Other | 34 | | | 45 | | | (11) | | | (24) | |
| $ | 2,185 | | | $ | 2,323 | | | $ | (138) | | | (6) | % |
The decrease in Depreciation and amortization during the year ended December 31, 2023, compared to the same period in 2022, is primarily due to (i) a decrease of $76 at Peñasquito resulting from lower sales due to the Peñasquito labor strike that began in June 2023 and continued into the fourth quarter; (ii) a decrease in the depreciable asset base at CC&V resulting from the impairment charge recognized during the fourth quarter of 2022; (iii) lower depreciation rates as a result of lower gold ounces mined at Akyem; and (iv) lower depreciation at NGM due to lower leach pad production at Long Canyon as a result of the ramp down of mining and lower amortization rates at Carlin as a result of a longer mill life, partially offset by higher Depreciation and amortization at Porcupine, Ahafo, and Tanami due to asset additions.
The decrease in Depreciation and amortization during the year ended December 31, 2023, compared to the same period in 2022 is partially offset by the impact of sites acquired in the Newcrest transaction, which increased Depreciation and amortization by $83.
For discussion regarding other significant drivers impacting Depreciation and amortization by site, refer to Results of Consolidated Operations below.
Exploration expense was $265, $231 and $209 in 2023, 2022 and 2021, respectively. Exploration expense increased in 2023, compared to 2022, primarily due to an increase in drilling projects in the current year, particularly at Galore Creek and Ahafo North, as a result of COVID-19 related delay to projects in the prior years, and higher drilling costs due to cost inflation.
Advanced projects, research and development expense was $200, $229 and $154 in 2023, 2022 and 2021, respectively. Advanced projects, research and development expense decreased in 2023 compared to 2022, primarily due to higher payments in 2022 as part of the strategic alliance with Caterpillar Inc. ("CAT") relating to the Company's climate change initiatives and project spend relating to certain development projects at Cerro Negro and other early-stage project spending. Advanced projects, research and development expense includes development project management costs, feasibility studies and other project expenses that do not qualify for capitalization.
General and administrative expense was $299, $276 and $259 in 2023, 2022 and 2021, respectively. General and administrative expense increased in 2023, compared to 2022, primarily due to the addition of the Newcrest operations and increased labor costs. General and administrative expense as a percentage of Sales was 2.5%, 2.3% and 2.1% for 2023, 2022 and 2021 respectively.
Interest expense, net was $243, $227 and $274 in 2023, 2022 and 2021, respectively. Capitalized interest totaled $89, $69, and $38 in each year, respectively. Interest expense, net increased in 2023, compared to 2022, as a result of higher debt resulting from the Newcrest transaction. Interest expense on the acquired debt was recognized for the period of November 6, 2023 through December 31, 2023.
Income and mining tax expense (benefit) was $526, $455, and $1,098 in 2023, 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 United States dollar and foreign currencies; and (vii) the impact of specific transactions and assessments including significant impairments of goodwill during 2023 and 2022. 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 10 to the Consolidated Financial Statements for further discussion of income taxes.
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| Year Ended |
| December 31, 2023 | | December 31, 2022 |
| Income (Loss) (1) | | Effective Tax Rate | | Income Tax (Benefit) Provision | | Federal and State Cash Tax (Refund) | | Mining Cash Tax/(Refund) | | Income (Loss) (1) | | Effective Tax Rate | | Income Tax (Benefit) Provision | | Federal and State Cash Tax (Refund) | | Mining Cash Tax/(Refund) |
Nevada | $ | 431 | | | 12 | % | | $ | 52 | | | $ | — | | | $ | 19 | | | $ | 430 | | | 15 | % | | $ | 66 | | | $ | — | | | $ | 47 | |
CC&V | 71 | | | 8 | | | 6 | | | — | | | — | | | (541) | | | 21 | | | (114) | | | — | | | — | |
Corporate & Other | (391) | | | 26 | | | (100) | | | 15 | | (4) | — | | | (455) | | | 31 | | | (141) | | | 17 | | (4) | — | |
Total US | 111 | | | (38) | | | (42) | | | 15 | | | 19 | | | (566) | | | 33 | | | (189) | | | 17 | | | 47 | |
Australia | 794 | | | 50 | | | 398 | | | 302 | | | 113 | | | 1,109 | | | 36 | | | 400 | | | 269 | | | 94 | |
Ghana | 481 | | | 35 | | | 167 | | | 223 | | | — | | | 483 | | | 36 | | | 172 | | | 194 | | | — | |
Suriname | 53 | | | 19 | | | 10 | | | 10 | | | — | | | 191 | | | 26 | | | 49 | | | 105 | | | — | |
Peru | (1,083) | | | (2) | | | 17 | | | 10 | | | 4 | | | (644) | | | (1) | | | 4 | | | 33 | | | 4 | |
Canada | (610) | | | (6) | | | 37 | | | (9) | | | 7 | | | (503) | | | 3 | | | (15) | | | (6) | | | 16 | |
Mexico | (1,805) | | | 5 | | | (97) | | (2) | 29 | | (4) | 64 | | | 386 | | | 17 | | | 65 | | (2) | 233 | | | 111 | |
Argentina | (71) | | | — | | | — | | | 9 | | (4) | — | | | (520) | | | 7 | | | (38) | | | 7 | | | — | |
Papua New Guinea | 89 | | | 29 | | | 26 | | | 14 | | | — | | | — | | | — | | | — | | | — | | | — | |
Other Foreign | 10 | | | 100 | | | 10 | | | — | | | — | | | 13 | | | 54 | | | 7 | | | — | | | — | |
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Consolidated | $ | (2,031) | | | (26) | % | (3) | $ | 526 | | | $ | 603 | | | $ | 207 | | | $ | (51) | | | (892) | % | (3) | $ | 455 | | | $ | 852 | | | $ | 272 | |
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(1)Represents income (loss) from continuing operations by geographic location before income taxes and equity in affiliates. These amounts will not reconcile to the Segment Information for the reasons stated in Note 4 of the Consolidated Financial Statements.
(2)Includes tax benefit of $— and $(125) for the year ended December 31, 2023 and 2022, respectively related to a tax settlement.
(3)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.
(4)Includes $28 and $16 of withholding tax for the year ended December 31, 2023 and 2022, respectively.
Recently Enacted Legislation.
In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "IRA") into law. The IRA introduced an excise tax on stock repurchases of 1% and a corporate alternative minimum tax (the "Corporate AMT") of 15% on the adjusted financial statement income ("AFSI") of corporations with average AFSI exceeding $1 billion over a three-year period. The IRA is effective for fiscal periods beginning 2023. While waiting on pending Department of Treasury regulatory guidance, we are continuing to monitor developments. Based upon information known to date, no material impacts are expected to the Consolidated Financial Statements, disclosures, or cash flows. Refer to Note 2 to the Consolidated Financial Statements for further information.
In 2024, Pillar II is set to take effect. The Pillar II agreement was signed by 138 countries with the intent to equalize corporate tax around the world by implementing a global minimum tax of 15%. As Newmont primarily does business in jurisdictions with a tax rate greater than 15%, the Company does not anticipate a material impact to the Consolidated Financial Statements.
Refer to the Notes of the Consolidated Financial Statements for explanations of other financial statement line items.
Results of Consolidated Operations
Newmont has developed gold equivalent ounces (“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:
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| Gold | | Copper | | Silver | | Lead | | Zinc |
| (ounce) | | (pound) | | (ounce) | | (pound) | | (pound) |
2023 GEO Price | $ | 1,400 | | | $ | 3.50 | | | $ | 20.00 | | | $ | 1.00 | | | $ | 1.20 | |
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 | |
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| Gold or Other Metals Produced | | Costs Applicable to Sales (1) | | Depreciation and Amortization | | All-In Sustaining Costs (2) |
Year Ended December 31, | 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 |
Gold | (ounces in thousands) | | ($ per ounce sold) | | ($ per ounce sold) | | ($ per ounce sold) |
CC&V | 172 | | | 182 | | | 220 | | | $ | 1,156 | | | $ | 1,302 | | | $ | 1,080 | | | $ | 136 | | | $ | 386 | | | $ | 298 | | | $ | 1,644 | | | $ | 1,697 | | | $ | 1,338 | |
Musselwhite | 180 | | | 173 | | | 152 | | | 1,186 | | | 1,135 | | | 1,018 | | | 444 | | | 464 | | | 520 | | | 1,843 | | | 1,531 | | | 1,335 | |
Porcupine | 260 | | | 280 | | | 287 | | | 1,167 | | | 1,004 | | | 940 | | | 455 | | | 369 | | | 319 | | | 1,577 | | | 1,248 | | | 1,152 | |
Éléonore | 232 | | | 215 | | | 253 | | | 1,263 | | | 1,228 | | | 960 | | | 433 | | | 531 | | | 562 | | | 1,838 | | | 1,599 | | | 1,256 | |
Red Chris (3) | 5 | | | — | | | — | | | 905 | | | — | | | — | | | 298 | | | — | | | — | | | 1,439 | | | — | | | — | |
Brucejack (3) | 29 | | | — | | | — | | | 1,898 | | | — | | | — | | | 617 | | | — | | | — | | | 2,646 | | | — | | | — | |
Peñasquito | 143 | | | 566 | | | 686 | | | 1,219 | | | 771 | | | 549 | | | 516 | | | 258 | | | 279 | | | 1,590 | | | 968 | | | 702 | |
Merian | 322 | | | 403 | | | 437 | | | 1,207 | | | 915 | | | 751 | | | 256 | | | 199 | | | 225 | | | 1,541 | | | 1,105 | | | 895 | |
Cerro Negro | 269 | | | 278 | | | 270 | | | 1,257 | | | 1,007 | | | 912 | | | 524 | | | 525 | | | 513 | | | 1,509 | | | 1,262 | | | 1,247 | |
Yanacocha | 276 | | | 244 | | | 264 | | | 1,069 | | | 1,254 | | | 885 | | | 310 | | | 380 | | | 421 | | | 1,266 | | | 1,477 | | | 1,355 | |
Boddington | 745 | | | 798 | | | 696 | | | 847 | | | 802 | | | 887 | | | 144 | | | 145 | | | 145 | | | 1,067 | | | 921 | | | 1,083 | |
Tanami | 448 | | | 484 | | | 485 | | | 759 | | | 675 | | | 570 | | | 249 | | | 207 | | | 205 | | | 1,060 | | | 960 | | | 855 | |
Cadia (3) | 97 | | | — | | | — | | | 1,079 | | | — | | | — | | | 130 | | | — | | | — | | | 1,271 | | | — | | | — | |
Telfer (3) | 43 | | | — | | | — | | | 1,882 | | | — | | | — | | | 87 | | | — | | | — | | | 1,988 | | | — | | | — | |
Lihir (3) | 134 | | | — | | | — | | | 1,117 | | | — | | | — | | | 153 | | | — | | | — | | | 1,517 | | | — | | | — | |
Ahafo | 581 | | | 574 | | | 481 | | | 947 | | | 990 | | | 884 | | | 312 | | | 292 | | | 298 | | | 1,222 | | | 1,178 | | | 1,084 | |
Akyem | 295 | | | 420 | | | 381 | | | 931 | | | 804 | | | 691 | | | 413 | | | 340 | | | 318 | | | 1,210 | | | 972 | | | 913 | |
NGM | 1,170 | | | 1,169 | | | 1,272 | | | 1,070 | | | 989 | | | 755 | | | 387 | | | 404 | | | 432 | | | 1,397 | | | 1,220 | | | 918 | |
Total/Weighted Average (4) | 5,401 | | | 5,786 | | | 5,884 | | | $ | 1,050 | | | $ | 933 | | | $ | 785 | | | $ | 327 | | | $ | 322 | | | $ | 336 | | | $ | 1,444 | | | $ | 1,211 | | | $ | 1,062 | |
Merian (25%) | (80) | | | (101) | | | (109) | | | | | | | | | | | | | | | | | | | |
Yanacocha (—%, 43.65%, and 43.65%, respectively) (5) | — | | | (14) | | | (129) | | | | | | | | | | | | | | | | | | | |
Attributable to Newmont | 5,321 | | | 5,671 | | | 5,646 | | | | | | | | | | | | | | | | | | | |
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Gold equivalent ounces - other metals | (ounces in thousands) | | ($ per ounce sold) | | ($ per ounce sold) | | ($ per ounce sold) |
Red Chris (3)(8) | 20 | | | — | | | — | | | $ | 1,020 | | | $ | — | | | $ | — | | | $ | 181 | | | $ | — | | | $ | — | | | $ | 1,660 | | | $ | — | | | $ | — | |
Peñasquito (6) | 529 | | | 1,048 | | | 1,089 | | | 1,283 | | | 828 | | | 603 | | | 561 | | | 267 | | | 291 | | | 1,756 | | | 1,112 | | | 824 | |
Boddington (7) | 245 | | | 227 | | | 163 | | | 830 | | | 782 | | | 902 | | | 144 | | | 145 | | | 147 | | | 1,067 | | | 894 | | | 1,098 | |
Cadia (3)(9) | 90 | | | — | | | — | | | 1,017 | | | — | | | — | | | 127 | | | — | | | — | | | 1,342 | | | — | | | — | |
Telfer (3)(10) | 7 | | | — | | | — | | | 1,703 | | | — | | | — | | | 109 | | | — | | | — | | | 2,580 | | | — | | | — | |
Total/Weighted-Average (3) | 891 | | | 1,275 | | | 1,252 | | | $ | 1,127 | | | $ | 819 | | | $ | 640 | | | $ | 378 | | | $ | 245 | | | $ | 273 | | | $ | 1,579 | | | $ | 1,114 | | | $ | 900 | |
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Attributable gold from equity method investments (11) | (ounces in thousands) | | | | | | | | | | | | | | | | | | |
Pueblo Viejo (40%) | 224 | | | 285 | | | 325 | | | | | | | | | | | | | | | | | | | |
Fruta del Norte (3)(12) | — | | | — | | | — | | | | | | | | | | | | | | | | | | | |
Attributable to Newmont | 224 | | | 285 | | | 325 | | | | | | | | | | | | | | | | | | | |
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(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)All-in sustaining costs is a non-GAAP financial measure. Refer to Non-GAAP Financial Measures below.
(3)Sites acquired through the Newcrest transaction during the fourth quarter of 2023, and as such, the results of operations since the acquisition date are not meaningful. Additionally, the Company suspended mining operations at the Brucejack site to conduct a full investigation into the tragic fatality that occurred on December 20, 2023. The site ramped up to full operations by the end of January 2024. Refer to Note 3 to the Consolidated Financial Statements for further information on the Newcrest transaction.
(4)All-in sustaining costs and Depreciation and amortization include expense for Corporate and Other.
(5)The Company acquired the remaining interest in Yanacocha in 2022, resulting in 100% ownership interest at December 31, 2022. The Company recognized amounts attributable to non-controlling interests for Yanacocha for the periods prior to acquiring 100% ownership. Refer to Note 1 to the Consolidated Financial Statement for further information.
(6)For the year ended December 31, 2023, Peñasquito produced 18 million ounces of silver, 113 million pounds of lead and 230 million pounds of zinc. For the year ended December 31, 2022, Peñasquito produced 30 million ounces of silver, 149 million pounds of lead and 377 million pounds of zinc. For the year ended December 31, 2021, Peñasquito produced 31 million ounces of silver, 177 million pounds of lead and 435 million pounds of zinc.
(7)For the years ended December 31, 2023, 2022 and 2021, Boddington produced 98 million, 84 million and 71 million pounds of copper, respectively.
(8)For the year ended December 31, 2023, Red Chris produced 8 million pounds of copper.
(9)For the year ended December 31, 2023, Cadia produced 36 million pounds of copper.
(10)For the year ended December 31, 2023, Telfer produced 3 million pounds of copper.
(11)Income and expenses of equity method investments are included in Equity income (loss) of affiliates. Refer to Note 15 to the Consolidated Financial Statements for further discussion of our equity method investments.
(12)The Fruta del Norte mine is wholly owned and operated by Lundin Gold. Newmont holds a 32% interest in Lundin Gold and accounts for it on a quarterly-lag as an equity method investment. As a result, results of operations will be not be reported until the first quarter of 2024.
CC&V, U.S. Gold production decreased 5% primarily due to lower leach pad production. Costs applicable to sales per gold ounce decreased 11% primarily due to no inventory write-downs in the current year compared to inventory write-downs in the prior year, partially offset by lower gold ounces sold. Depreciation and amortization per gold ounce decreased 65% primarily due to a lower depreciable asset base as a result of the impairment charge recognized during the fourth quarter of 2022. All-in sustaining costs per gold ounce were generally in line with the prior year.
Musselwhite, Canada. Gold production, costs applicable to sales per gold ounce and depreciation and amortization per gold ounce were generally in line with the prior year. All-in sustaining costs per gold ounce increased 20% primarily due to higher sustaining capital spend.
Porcupine, Canada. Gold production decreased 7% primarily due to lower mill throughput, partially offset by higher ore grade milled. Costs applicable to sales per gold ounce increased 16% primarily due to higher contracted services and materials costs as a result of unplanned mill maintenance. Depreciation and amortization per gold ounce increased 23% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 26% primarily due to higher costs applicable to sales per gold ounce, higher sustaining capital spend and higher reclamation costs.
Éléonore, Canada. Gold production increased 8% primarily due to higher mill throughput. Costs applicable to sales per gold ounce were generally in line with the prior year. Depreciation and amortization per gold ounce decreased 18% primarily due to higher gold ounces sold. All-in sustaining costs per gold ounce increased 15% primarily due to higher sustaining capital spend.
Peñasquito, Mexico. Gold production decreased 75% primarily due to the Peñasquito labor strike that began in June and continued into the fourth quarter, lower mill recovery and lower ore grade milled. Gold equivalent ounces – other metals production decreased 50% primarily due to lower other metals produced of 39% due to the Peñasquito labor strike and lower mill recovery, coupled with a change in GEO pricing, noted above, that had an unfavorable impact to the calculated gold equivalent ounces - other metals produced of 11%. Costs applicable to sales per gold ounce increased 58% primarily due to lower gold ounces sold, partially offset by lower energy costs, and lower materials, contracted service and workers participation costs due to the Peñasquito labor strike. Costs applicable to sales per gold equivalent ounce – other metals increased 55% primarily due to lower gold equivalent ounces - other metals sold, partially offset by lower energy costs, and lower materials, contracted service and workers participation costs due to the Peñasquito labor strike. During the strike, Peñasquito continued to incur fixed costs and recognized $108 in Costs applicable to sales. Depreciation and amortization per gold ounce increased 100% primarily due to lower gold ounces sold. Depreciation and amortization per gold equivalent ounce – other metals increased 110% primarily due to lower gold equivalent ounces - other metals sold. During the strike, Peñasquito continued to incur $75 in Depreciation and amortization. All-in sustaining costs per gold ounce increased 64% and All-in sustaining costs per gold equivalent ounce – other metals increased 58% primarily due to impacts from the Peñasquito labor strike.
Merian, Suriname. Gold production decreased 20% primarily due to lower ore grade milled as a result of changes in mine sequencing. Costs applicable to sales per gold ounce increased 32% primarily due to higher maintenance, materials, consumables and labor costs as a result of cost inflation and lower gold ounces sold. Depreciation and amortization per gold ounce increased 29% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 39% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital spend.
Cerro Negro, Argentina. Gold production was generally in line with the prior year. Costs applicable to sales per gold ounce increased 25% primarily due to higher labor and contacted service costs, higher materials and consumables costs as a result of higher ore tons mines and higher mill throughput and lower gold ounces sold. Depreciation and amortization per gold ounce was generally in line with the prior year. All-in sustaining costs per gold ounce increased 20% primarily due to higher costs applicable to sales per gold ounce.
Yanacocha, Peru. Gold production increased 13% primarily due to higher leach pad production as a result of injection leaching. Costs applicable to sales per gold ounce decreased 15% primarily due to lower inventory write-downs in the current year compared to the prior year and higher gold ounces sold, partially offset by higher contracted service costs. Depreciation and amortization per gold ounce decreased 18% primarily due to lower depreciation from a higher build-up of inventory and lower inventory write-downs in the current year, partially offset by higher depreciation rates as a result of higher gold ounces mined. All-in sustaining costs per gold ounce decreased 14% primarily due to lower costs applicable to sales per gold ounce.
Boddington, Australia. Gold production decreased 7% primarily due to lower ore grade milled. Gold equivalent ounces – other metals production increased 8% primarily due to higher ore grade milled. Costs applicable to sales per gold ounce increased 6% primarily due to lower gold ounces sold and higher materials and contracted services cost. Costs applicable to sales per gold equivalent ounce – other metals increased 6% primarily due to higher materials and contracted services costs, partially offset by higher gold equivalent ounces - other metals sold. Depreciation and amortization per gold ounce and per gold equivalent ounce - other metals
were generally in line with the prior year. All-in sustaining costs per gold ounce increased 16% primarily due to higher sustaining capital spend and higher costs applicable to sales per gold ounce. All-in sustaining costs per gold equivalent ounce – other metals increased 19% primarily due to higher sustaining capital spend and higher costs applicable to sales per gold-equivalent ounce – other metals.
Tanami, Australia. Gold production decreased 7% primarily due to the Tanami rainfall event. Costs applicable to sales per gold ounce increased 12% primarily due to lower gold ounces sold. Depreciation and amortization per gold ounce increased 20% primarily due to lower gold ounces sold and asset additions. All-in sustaining costs per gold ounce increased 10% primarily due to higher costs applicable to sales per gold ounce. During the third quarter of 2023, we collected $45 in business interruption insurance proceeds related to the Tanami rainfall event.
Ahafo, Ghana. Gold production was generally in line with the prior year. Costs applicable to sales per gold ounce were generally in line with the prior year. Depreciation and amortization per gold ounce increased 7% primarily due to asset additions. All-in sustaining costs per gold ounce were generally in line with the prior year. In February 2023, there was a failure from one of the primary crusher conveyors that feed the mill stockpile. During the third quarter, the conveyor was rebuilt and fully commissioned. We collected $11 in business interruption insurance proceeds during the third quarter as a result of the event. We expect additional insurance proceeds to be received during the first quarter of 2024. Additionally, in June 2023, damage was discovered in the SAG mill girth gear that has required the plant to operate at less than full capacity. The Company is implementing a plan to replace the damaged gear which is estimated to be completed in the first half of 2024.
Akyem, Ghana. Gold production decreased 30% primarily due to lower ore grade milled and lower mill throughput as a result of re-sequencing the mine plan and temporarily suspending mining in the main pit to make safety improvements and fortify the catch berms above the haul road into the pit. Costs applicable to sales per gold ounce increased 16% primarily due to lower gold ounces sold. Depreciation and amortization per gold ounce increased 21% primarily due to lower gold ounces sold. All-in sustaining costs per gold ounce increased 24% primarily due to higher costs applicable to sales per gold ounce.
NGM, U.S. Gold production was generally in line with the prior year. Costs applicable to sales per gold ounce increased 8% primarily due to leach pad write-downs and inventory draw-downs at Carlin. Depreciation and amortization per gold ounce was generally in line with the prior year. All-in sustaining costs per gold ounce increased 15% primarily due to higher costs applicable to sales per gold ounce and higher sustaining capital spend at Carlin and Cortez.
Pueblo Viejo, Dominican Republic. Gold production decreased 21% primarily due to lower ore grades processed due to mine sequencing, as well as lower mill throughput and lower mill recovery associated with the commissioning of the mill expansion. Refer to Note 15 to our Consolidated Financial Statements for further discussion of our equity method investments.
Foreign Currency Exchange Rates
Our foreign operations sell their gold, copper, silver, lead and zinc production based on USD metal prices. Therefore, fluctuations in foreign currency exchange rates do not have a material impact on our revenue. 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, the Ghanaian cedi, and the Papua New Guinean kina. In 2023, approximately 46% of Costs applicable to sales were paid in currencies other than the U.S. dollar as follows:
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| Year Ended December 31, 2023 |
Australian Dollar | 18 | % |
Canadian Dollar | 14 | % |
Mexican Peso | 6 | % |
Argentine Peso | 5 | % |
Peruvian Sol | 2 | % |
Surinamese Dollar | 1 | % |
Ghanaian Cedi | — | % |
Papua New Guinean Kina | — | % |
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 $71 per gold ounce, primarily in Argentina due to significant currency devaluation that occurred in 2023, and increased Costs applicable to sales $31 per gold equivalent ounce, primarily in Mexico, in 2023 compared to 2022.
Our Ahafo and Akyem mines, located in Ghana, are USD functional currency entities. Ghana has experienced significant inflation over the last three years and has a highly inflationary economy. In 2021, the Bank of Ghana created a gold purchase program
in the effort to stabilize the local currency and build up gold reserves through domestic gold purchases conducted in local currency at prevailing market rates. As the gold purchase program was voluntary, there was no significant impact to Ahafo. The majority of Ahafo’s activity has historically been denominated in USD; as a result, the devaluation of the Ghanaian cedi has resulted in an immaterial impact on our financial statements. Therefore, future devaluation of the Ghanaian cedi is not expected to have a material impact on our financial statements.
Our Cerro Negro mine, located in Argentina, is a USD functional currency entity. Argentina has experienced significant inflation over the last three years and has a highly inflationary economy. 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 USD 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 restrictions directly impact Cerro Negro's ability to repay 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 USD 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 USD; as a result, 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.
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. Unless otherwise noted, we present the non-GAAP financial measures of our continuing operations in the tables below. For additional information regarding our discontinued operations, refer to Note 1 to the Consolidated Financial Statements.
Earnings before interest, taxes and depreciation and amortization and Adjusted earnings before interest, taxes and depreciation and amortization
Management uses earnings before interest, taxes and depreciation and amortization (“EBITDA”) and EBITDA adjusted for non-core or certain items that have a disproportionate impact on our results for a particular period (“Adjusted EBITDA”) as non-GAAP measures to evaluate the Company’s operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be considered an alternative to, net income (loss), operating income (loss), or cash flow from operations as those terms are defined by GAAP, and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. Although Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements by other companies, our calculation of Adjusted EBITDA is not necessarily comparable to such other similarly titled captions of other companies. The Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors. Management’s determination of the components of Adjusted EBITDA are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to EBITDA and Adjusted EBITDA as follows:
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| | | Year Ended December 31, |
| | | | | 2023 | | 2022 | | 2021 |
Net income (loss) attributable to Newmont stockholders | | | | | $ | (2,494) | | | $ | (429) | | | $ | 1,166 | |
Net income (loss) attributable to noncontrolling interests | | | | | 27 | | | 60 | | | (933) | |
Net (income) loss from discontinued operations (1) | | | | | (27) | | | (30) | | | (57) | |
Equity loss (income) of affiliates | | | | | (63) | | | (107) | | | (166) | |
Income and mining tax expense (benefit) | | | | | 526 | | | 455 | | | 1,098 | |
Depreciation and amortization | | | | | 2,108 | | | 2,185 | | | 2,323 | |
Interest expense, net | | | | | 243 | | | 227 | | | 274 | |
EBITDA | | | | | $ | 320 | | | $ | 2,361 | | | $ | 3,705 | |
Adjustments: | | | | | | | | | |
Impairment charges (2) | | | | | $ | 1,891 | | | $ | 1,320 | | | $ | 25 | |
Reclamation and remediation charges (3) | | | | | 1,260 | | | 713 | | | 1,696 | |
Newcrest transaction and integration costs (4) | | | | | 464 | | | — | | | — | |
(Gain) loss on asset and investment sales (5) | | | | | 197 | | | (35) | | | (212) | |
Change in fair value of investments (6) | | | | | 47 | | | 46 | | | 135 | |
Restructuring and severance (7) | | | | | 24 | | | 4 | | | 11 | |
Pension settlements (8) | | | | | 9 | | | 137 | | | 4 | |
Settlement costs (9) | | | | | 7 | | | 22 | | | 11 | |
COVID-19 specific costs (10) | | | | | 1 | | | 3 | | | 5 | |
Loss on assets held for sale (11) | | | | | — | | | — | | | 571 | |
Loss on debt extinguishment (12) | | | | | — | | | — | | | 11 | |
Impairment of investments (13) | | | | | — | | | — | | | 1 | |
Other (14) | | | | | (5) | | | (21) | | | — | |
Adjusted EBITDA | | | | | $ | 4,215 | | | $ | 4,550 | | | $ | 5,963 | |
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(1)For additional information regarding our discontinued operations, refer to Note 1 to our Consolidated Financial Statements.
(2)Impairment charges, included in Impairment charges, represents non-cash write-downs of long-lived assets and goodwill. Refer to Note 7 to our Consolidated Financial Statements for further information.
(3)Reclamation and remediation charges, included in Reclamation and remediation, represents revisions to the reclamation and remediation plans and cost estimates at the Company’s former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value. For additional information, refer to Note 6 in the Consolidated Financial Statements.
(4)Newcrest transaction and integration costs, included in Other expense, net, represents costs incurred related to Newmont's acquisition of Newcrest completed in 2023 as well as subsequent integration costs. These costs primarily include $316 in relation to the stamp duty tax incurred in connection with the transaction.
(5)(Gain) loss on asset and investment sales, included in Other income (loss), net, primarily represents the impairment loss on the abandonment of the pyrite leach plant at Peñasquito offset by the net gain recognized on the exchange of Maverix shares and warrants to Triple flag and the subsequent sale of Triple Flag shares in 2023; gains recognized on the sale of the investment in MARA, on disposal of trucks at Boddington, and the sale of royalty interests at NGM, partially offset by the loss recognized on the sale of the La Zanja equity method investment in 2022; and the gain on the sale of the Kalgoorlie Power business, gain on the NGM Lone Tree and South Arturo exchange transaction, and gain on the sale of TMAC in 2021. For additional information, refer to Note 9 and 15 to our Consolidated Financial Statements.
(6)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 additional information regarding our investments, refer to Note 15 to our Consolidated Financial Statements.
(7)Restructuring and severance, included in Other expense, net, primarily represents severance and related costs associated with significant organizational and operating model changes implemented by the Company for all periods presented.
(8)Pension settlements, included in Other income (loss), net, primarily represents pension settlement charges related to lump sum payments to participants in 2023, the annuitization of certain defined benefit plans and lump sum payments to participants in 2022, and lump sum payments to participants in 2021. Refer to Note 11 to our Consolidated Financial Statements for further information.
(9)Settlement costs, included in Other expense, net, primarily represents costs related to additional employee related accruals as a result of the Australian Fair Work legislation in 2023; a legal settlement and a voluntary contribution made to support humanitarian efforts in Ukraine in 2022; and a voluntary contribution made to the Republic of Suriname in 2021.
(10)COVID-19 specific costs, included in Other expense, net, primarily includes amounts distributed from Newmont Global Community Support Fund to help host communities, governments and employees combat the COVID-19 pandemic for all periods presented and includes incremental direct costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic. Refer to Note 8 to our Consolidated Financial Statements for further information.
(11)Loss on assets held for sale, included in Loss on assets held for sale, represents the loss recognized due to the reclassification of the Conga mill assets as held for sale during 2021. The assets were remeasured to fair value less costs to sell. For additional information, refer to Note 1 to our Consolidated Financial Statements.
(12)Loss on debt extinguishment, included in Other income (loss), net, primarily represents losses on the debt tender offer and subsequent extinguishment of the 2023 Newmont Senior Notes and the 2023 Goldcorp Senior Notes during 2021.
(13)Impairment of investments, included in Other income (loss), net, primarily represents other-than-temporary impairments of other investments.
(14)Other, included in Other income (loss), net, in 2023 represents income received during the first quarter of 2023 on the favorable settlement of certain matters that were outstanding at the time of sale of the related investment in 2022. Amounts related to 2022 are 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 and penalty income from an energy vendor early terminating a contract in 2022.
Adjusted net income (loss)
Management uses Adjusted Net Income (Loss) to evaluate the Company’s operating performance and for planning and forecasting future business operations. The Company believes the use of Adjusted Net Income (Loss) allows investors and analysts to understand the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the sale of products, by excluding certain items that have a disproportionate impact on our results for a particular period. Adjustments to continuing operations are presented before tax and net of our partners’ noncontrolling interests, when applicable. The tax effect of adjustments is presented in the Tax effect of adjustments line and is calculated using the applicable tax rate. Management’s determination of the components of Adjusted Net Income (Loss) are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to Adjusted net income (loss) as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2023 |
| | | | | | | per share data (1) |
| | | | | | | | | basic | | diluted |
Net income (loss) attributable to Newmont stockholders | | | | | | | $ | (2,494) | | | $ | (2.97) | | | $ | (2.97) | |
Net loss (income) attributable to Newmont stockholders from discontinued operations (2) | | | | | | | (27) | | | (0.03) | | | (0.03) | |
Net income (loss) attributable to Newmont stockholders from continuing operations (3) | | | | | | | (2,521) | | | (3.00) | | | (3.00) | |
Impairment charges, net (4) | | | | | | | 1,888 | | | 2.25 | | | 2.25 | |
Reclamation and remediation charges (5) | | | | | | | 1,260 | | | 1.50 | | | 1.50 | |
Newcrest transaction and integration costs (6) | | | | | | | 464 | | | 0.56 | | | 0.56 | |
(Gain) loss on asset and investment sales (7) | | | | | | | 197 | | | 0.23 | | | 0.23 | |
Change in fair value of investments (8) | | | | | | | 47 | | | 0.05 | | | 0.05 | |
Restructuring and severance (9) | | | | | | | 24 | | | 0.03 | | | 0.03 | |
Pension settlements (10) | | | | | | | 9 | | | 0.01 | | | 0.01 | |
Settlement costs (11) | | | | | | | 7 | | | 0.01 | | | 0.01 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
COVID-19 specific costs (12) | | | | | | | 1 | | | — | | | — | |
| | | | | | | | | | | |
Other (13) | | | | | | | (5) | | | — | | | — | |
Tax effect of adjustments (14) | | | | | | | (613) | | | (0.73) | | | (0.73) | |
Valuation allowance and other tax adjustments, net (15) | | | | | | | 566 | | | 0.66 | | | 0.66 | |
Adjusted net income (loss) | | | | | | | $ | 1,324 | | | $ | 1.57 | | | $ | 1.57 | |
| | | | | | | | | | | |
Weighted average common shares (millions): (3) | | | | | | | | | 841 | | | 841 | |
____________________________
(1)Per share measures may not recalculate due to rounding.
(2)For additional information regarding our discontinued operations, refer to Note 1 to our Consolidated Financial Statements.
(3)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with GAAP. For the year ended December 31, 2023, potentially dilutive shares, which were insignificant, were excluded from the computation of diluted loss per common share attributable to Newmont stockholders in the Consolidated Statement of Operations as they were antidilutive. These shares were included in the computation of adjusted net income per diluted share for the year ended December 31, 2023.
(4)Impairment charges, net, included in Impairment charges represents non-cash write-downs of long-lived assets and goodwill. Refer to Note 7 to our Consolidated Financial Statements for further information. Amount is presented net of pre-tax income (loss) attributable to noncontrolling interests of $(3).
(5)Reclamation and remediation charges, net, included in Reclamation and remediation, represents revisions to the reclamation and remediation plans and cost estimates 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 6 to our Consolidated Financial Statements for further information.
(6)Newcrest transaction and integration costs, included in Other expense, net, represents costs incurred related to Newmont's acquisition of Newcrest completed in 2023 as well as subsequent integration costs. These costs primarily include $316 in relation to the stamp duty tax incurred in connection with the transaction.
(7)(Gain) loss on asset and investment sales, included in Gain on asset and investment sales, net, primarily represents the impairment loss on the abandonment of the pyrite leach plant at Peñasquito offset by the net gain recognized on the exchange of Maverix shares and warrants to Triple flag and the subsequent sale of Triple Flag shares. For additional information, refer to Note 9 to our Consolidated Financial Statements.
(8)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 additional information regarding our investments, refer to Note 15 to our Consolidated Financial Statements.
(9)Restructuring and severance, net, included in Other expense, net, primarily represents severance and related costs associated with significant organizational and operating model changes implemented by the Company.
(10)Pension settlements, included in Other income (loss), net, primarily represents pension settlement charges related to lump sum payments to participants. Refer to Note 11 to our Consolidated Financial Statements for further information.
(11)Settlement costs, included in Other expense, net, primarily represents costs related to additional employee related accruals as a result of the Australian Fair Work legislation.
(12)COVID-19 specific costs, included in Other expense, net, represents amounts distributed from the Newmont Global Community Fund to help host communities, governments and employees combat the COVID-19 pandemic. Adjusted net income (loss) has not been adjusted for $1 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 8 to our Consolidated Financial Statements for further information.
(13)Other, included in Other income (loss), net, primarily represents income received during the first quarter of 2023 on the favorable settlement of certain matters that were outstanding at the time of sale of the related investment in 2022.
(14)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (4) through (13), as described above, and are calculated using the applicable tax rate.
(15)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 reflects the net increase or (decrease) to net operating losses, capital losses, tax credit carryovers, and other deferred tax assets subject to valuation allowance of $357, the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $(3), net removal to the reserve for uncertain tax positions of $(28), and other tax adjustments of $240.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2022 |
| | | | | | | per share data (1) |
| | | | | | | | | basic | | diluted |
Net income (loss) attributable to Newmont stockholders | | | | | | | $ | (429) | | | $ | (0.54) | | | $ | (0.54) | |
Net loss (income) attributable to Newmont stockholders from discontinued operations (2) | | | | | | | (30) | | | (0.04) | | | (0.04) | |
Net income (loss) attributable to Newmont stockholders from continuing operations (3) | | | | | | | (459) | | | (0.58) | | | (0.58) | |
Impairment charges (4) | | | | | | | 1,320 | | | 1.66 | | | 1.66 | |
Reclamation and remediation charges, net (5) | | | | | | | 713 | | | 0.90 | | | 0.90 | |
Pension settlements (6) | | | | | | | 137 | | | 0.17 | | | 0.17 | |
Change in fair value of investments (7) | | | | | | | 46 | | | 0.06 | | | 0.06 | |
(Gain) loss on asset and investment sales (8) | | | | | | | (35) | | | (0.04) | | | (0.04) | |
Settlement costs (9) | | | | | | | 22 | | | 0.03 | | | 0.03 | |
Restructuring and severance, net (10) | | | | | | | 4 | | | 0.01 | | | 0.01 | |
COVID-19 specific costs (11) | | | | | | | 3 | | | — | | | — | |
Other (12) | | | | | | | (21) | | | (0.03) | | | (0.03) | |
Tax effect of adjustments (13) | | | | | | | (344) | | | (0.44) | | | (0.44) | |
Valuation allowance and other tax adjustments, net (14) | | | | | | | 82 | | | 0.11 | | | 0.11 | |
Adjusted net income (loss) | | | | | | | $ | 1,468 | | | $ | 1.85 | | | $ | 1.85 | |
| | | | | | | | | | | |
Weighted average common shares (millions): (3) | | | | | | | | | 794 | | | 795 | |
____________________________
(1)Per share measures may not recalculate due to rounding.
(2)For additional information regarding our discontinued operations, refer to Note 1 to our Consolidated Financial Statements.
(3)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with GAAP. For the year ended December 31, 2022, potentially dilutive shares of 1 million were excluded from the computation of diluted loss per common share attributable to Newmont stockholders in the Consolidated Statement of Operations as they were antidilutive. These shares were included in the computation of adjusted net income per diluted share for the year ended December 31, 2022.
(4)Impairment charges, included in Impairment charges represents non-cash write-downs of long-lived assets and goodwill. Refer to Note 7 to our Consolidated Financial Statements for further information.
(5)Reclamation and remediation charges, net, included in Reclamation and remediation, represent revisions to reclamation and remediation plans and cost estimates 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 6 to our Consolidated Financial Statements for further information.
(6)Pension settlements, included in Other income (loss), net, represents pension settlement charges related to the annuitization of certain defined benefit plans. Refer to Note 11 to our Consolidated Financial Statements for further information.
(7)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 additional information regarding our investments, refer to Note 15 to our Consolidated Financial Statements.
(8)(Gain) loss on asset and investment sales, included in Other income (loss), net, primarily represents gains recognized on the sale of the investment in MARA, disposal of trucks at Boddington, and the sale of royalty interests at NGM, partially offset by the loss recognized on the sale of the La Zanja equity method investment. For additional information, refer to Note 9 to our Consolidated Financial Statements.
(9)Settlement costs, included in Other expense, net, primarily represents a legal settlement and a voluntary contribution made to support humanitarian efforts in Ukraine.
(10)Restructuring and severance, net, included in Other expense, net, primarily represents severance and related costs associated with significant organizational and operating model changes implemented by the Company.
(11)COVID-19 specific costs, included in Other expense, net, represents amounts distributed from the Newmont Global Community Fund to help host communities, governments and employees combat the COVID-19 pandemic. Adjusted net income (loss) has not been adjusted for $35 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 8 to our Consolidated Financial Statements for further information.
(12)Primarily represents a $11 reimbursement of certain historical Goldcorp operational expenses related to a legacy project that reached commercial production in the second quarter of 2022 and $7 of penalty income from an energy vendor early terminating a contract in 2022, included Other income (loss), net.
(13)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (3) through (12), as described above, and are calculated using the applicable tax rate.
(14)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 reflects the net increase or (decrease) to net operating losses, capital losses, tax credit carryovers, and other deferred tax assets subject to valuation allowance of $246, the expiration of U.S. foreign tax credit carryovers of $31, the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $(86), net removal to the reserve for uncertain tax positions of $(8), a tax settlement in Mexico of $(125) and other tax adjustments of $24. Total amount is presented net of income (loss) attributable to noncontrolling interests of $82.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, 2021 |
| | | | | | | per share data (1) |
| | | | | | | | | basic | | diluted |
Net income (loss) attributable to Newmont stockholders | | | | | | | $ | 1,166 | | | $ | 1.46 | | | $ | 1.46 | |
Net loss (income) attributable to Newmont stockholders from discontinued operations (2) | | | | | | | (57) | | | (0.07) | | | (0.07) | |
Net income (loss) attributable to Newmont stockholders from continuing operations | | | | | | | 1,109 | | | 1.39 | | | 1.39 | |
Reclamation and remediation charges, net (3) | | | | | | | 983 | | | 1.23 | | | 1.23 | |
Loss on assets held for sale (4) | | | | | | | 372 | | | 0.47 | | | 0.46 | |
Gain on asset and investment sales (5) | | | | | | | (212) | | | (0.27) | | | (0.27) | |
Change in fair value of investments (6) | | | | | | | 135 | | | 0.17 | | | 0.17 | |
Impairment charges (7) | | | | | | | 25 | | | 0.03 | | | 0.03 | |
Loss on debt extinguishment (8) | | | | | | | 11 | | | 0.01 | | | 0.01 | |
Settlement costs, net (9) | | | | | | | 11 | | | 0.01 | | | 0.01 | |
Restructuring and severance, net (10) | | | | | | | 9 | | | 0.01 | | | 0.01 | |
COVID-19 specific costs, net (11) | | | | | | | 5 | | | — | | | — | |
Pension settlement (12) | | | | | | | 4 | | | — | | | — | |
Impairment of investments (13) | | | | | | | 1 | | | — | | | — | |
Tax effect of adjustments (14) | | | | | | | (413) | | | (0.51) | | | (0.51) | |
Valuation allowance and other tax adjustments, net (15) | | | | | | | 331 | | | 0.43 | | | 0.43 | |
Adjusted net income (loss) | | | | | | | $ | 2,371 | | | $ | 2.97 | | | $ | 2.96 | |
| | | | | | | | | | | |
Weighted average common shares (millions): (16) | | | | | | | | | 799 | | | 801 | |
____________________________
(1)Per share measures may not recalculate due to rounding.
(2)For additional information regarding our discontinued operations, refer to Note 1 to our Consolidated Financial Statements.
(3)Reclamation and remediation charges, net, included in Reclamation and remediation, represent revisions to reclamation and remediation plans and cost estimates 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 6 to our Consolidated Financial Statements for further information. Amount is presented net of pre-tax income (loss) attributable to noncontrolling interests of $(713).
(4)Loss on assets held for sale, net, included in Loss on assets held for sale, represents the loss recognized due to the reclassification of the Conga mill assets as held for sale during the third quarter of 2021. The assets were remeasured to fair value less costs to sell. Amounts are presented net of income (loss) attributable to noncontrolling interests of $(199). For additional information, refer to Note 1 to our Consolidated Financial Statements.
(5)(Gain) loss on asset and investment sales, included in Other income (loss), net, primarily represents the gain on the sale of the Kalgoorlie Power business, gain on the NGM Lone Tree and South Arturo exchange, and gain on the sale of TMAC. For additional information, refer to Note 9 to our Consolidated Financial Statements.
(6)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 additional information regarding our investments, refer to Note 15 to our Consolidated Financial Statements.
(7)Impairment charges, included in Impairment charges represents non-cash write-downs of various assets that are no longer in use and materials and supplies inventories. Refer to Note 7 to our Consolidated Financial Statements for further information.
(8)Loss on debt extinguishment, included in Other income (loss), net, primarily represents losses on the debt tender offer and subsequent extinguishment of the 2023 Newmont Senior Notes and the 2023 Goldcorp Senior Notes.
(9)Settlement costs, net, included in Other expense, net, primarily are comprised of a voluntary contribution made to the Republic of Suriname.
(10)Restructuring and severance, net, included in Other expense, net, primarily represents severance and related costs associated with significant organizational and operating model changes implemented by the Company. Amounts are presented net of income (loss) attributable to noncontrolling interests of $(2).
(11)COVID-19 specific costs, net, included in Other expense, net, primarily includes amounts distributed from the Newmont Global Community Fund to help host communities, governments and employees combat the COVID-19 pandemic. Adjusted net income (loss) has not been adjusted for $82 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 8 to our Consolidated Financial Statements for further information.
(12)Pension settlements, included in Other income (loss), net, represents pension settlement charges due to lump sum payments to participants. Refer to Note 11 to our Consolidated Financial Statements for further information.
(13)Impairment of investments, included in Other income (loss), net, primarily represents other-than-temporary impairment of other investments.
(14)The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (3) through (12), as described above, and are calculated using the applicable tax rate.
(15)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 reflects the net increase or (decrease) to net operating losses, capital losses, tax credit carryovers, and other deferred tax assets subject to valuation allowance of $419, the expiration of U.S. capital loss carryovers of $152, the effects of changes in foreign exchange rates on deferred tax assets and liabilities of $(17), net additions to the reserve for uncertain tax positions of $99, and other tax adjustments of $5. Total amount is presented net of income (loss) attributable to noncontrolling interests of $(327).
(16)Adjusted net income (loss) per diluted share is calculated using diluted common shares, which are calculated in accordance with GAAP.
Free Cash Flow
Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is Net cash provided by (used in) operating activities less Net cash provided by (used in) operating activities of discontinued operations less Additions to property, plant and mine development as presented on the Consolidated Statements of Cash Flows. The Company believes Free Cash Flow is also useful as one of the bases for comparing the Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of Free Cash Flow is not necessarily comparable to such other similarly titled captions of other companies.
The presentation of non-GAAP Free Cash Flow is not meant to be considered in isolation or as an alternative to net income as an indicator of the Company’s performance, or as an alternative to cash flows from operating activities as a measure of liquidity as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. The Company’s definition of Free Cash Flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, the Company believes it is important to view Free Cash Flow as a measure that provides supplemental information to the Company’s Consolidated Statements of Cash Flows.
The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, 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.
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Net cash provided by (used in) operating activities | $ | 2,763 | | | $ | 3,220 | | | $ | 4,279 | |
Less: Net cash used in (provided by) operating activities of discontinued operations | (9) | | | (22) | | | (13) | |
Net cash provided by (used in) operating activities of continuing operations | 2,754 | | | 3,198 | | | 4,266 | |
Less: Additions to property, plant and mine development | (2,666) | | | (2,131) | | | (1,653) | |
Free Cash Flow | $ | 88 | | | $ | 1,067 | | | $ | 2,613 | |
| | | | | |
Net cash provided by (used in) investing activities (1) | $ | (1,002) | | | $ | (2,983) | | | $ | (1,868) | |
Net cash provided by (used in) financing activities | $ | (1,603) | | | $ | (2,356) | | | $ | (2,958) | |
____________________________
(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.
Net Debt
Management uses Net Debt to measure the Company’s liquidity and financial position. Net Debt is calculated as Debt and Lease and other financing obligations less Cash and cash equivalents and time deposits included in Time deposits and other investments, as presented on the Consolidated Balance Sheets. Cash and cash equivalents and time deposits are subtracted from Debt and Lease and other financing obligations as these are highly liquid, low-risk investments and could be used to reduce the Company's debt obligations. The Company believes the use of Net Debt allows investors and others to evaluate financial flexibility and strength of the Company's balance sheet. Net Debt is intended to provide additional information only and does not have any standardized meaning
prescribed by GAAP and should not be considered in isolation or as a substitute for measures of liquidity prepared in accordance with GAAP. Other companies may calculate this measure differently.
The following table sets forth a reconciliation of Net Debt, a non-GAAP financial measure, to Debt and Lease and other financing obligations, which the Company believes to be the GAAP financial measures most directly comparable to Net Debt.
| | | | | | | | | | | |
| At December 31, 2023 | | At December 31, 2022 |
Debt | $ | 8,874 | | | $ | 5,571 | |
Lease and other financing obligations | 562 | | | 561 | |
Less: Cash and cash equivalents | (3,002) | | | (2,877) | |
Less: Time deposits (1) | — | | | (829) | |
| | | |
Net debt | $ | 6,434 | | | $ | 2,426 | |
____________________________(1)Refer to Note 15 of the Consolidated Financial Statements for further information.
Costs applicable to sales per ounce/gold equivalent ounce
Costs applicable to sales per ounce/gold equivalent ounce are non-GAAP financial measures. These measures 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. We believe that these measures provide additional information to management, investors and others that aids in the understanding of the economics of our operations and performance compared to other producers and provides investors visibility into the direct and indirect costs related to production, excluding depreciation and amortization, on a per ounce/gold equivalent ounce basis. Costs applicable to sales per ounce/gold equivalent ounce statistics are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.
The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measures.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gold (1) | | GEO (2) |
| Year Ended December 31, | | Year Ended December 31, |
| 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 |
Costs applicable to sales (3) | $ | 5,689 | | | $ | 5,423 | | | $ | 4,628 | | | $ | 1,010 | | | $ | 1,045 | | | $ | 807 | |
Gold/GEO sold (thousand ounces) (4) | 5,420 | | | 5,812 | | | 5,897 | | | 896 | | | 1,275 | | | 1,258 | |
Costs applicable to sales per ounce (5) | $ | 1,050 | | | $ | 933 | | | $ | 785 | | | $ | 1,127 | | | $ | 819 | | | $ | 640 | |
____________________________
(1)Includes by-product credits of $124, $109, and $187 in 2023, 2022, and 2021, respectively.
(2)Includes by-product credits of $13, $8, and $7 in 2023, 2022, and 2021, respectively.
(3)Excludes Depreciation and amortization and Reclamation and remediation.
(4)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 ($1,400/oz.), Copper ($3.50/lb.), Silver ($20.00/oz.), Lead ($1.00/lb.) and Zinc ($1.20/lb.) pricing for 2023, 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.
(5)Per ounce measures may not recalculate due to rounding.
All-In Sustaining Costs
Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all of the expenditures incurred to discover, develop and sustain production. Therefore, Newmont calculates All-In Sustaining Costs (“AISC”) based on the definition published by the World Gold Council. The World Gold Council is a market development organization for the gold industry comprised of and funded by gold mining companies around the world and a regulatory organization.
AISC is a metric that expands on GAAP measures, such as cost of goods sold, and non-GAAP measures, such as costs applicable to sales per ounce, to provide visibility into the economics of our mining operations related to expenditures, operating performance and the ability to generate cash flow from our continuing operations. We believe that AISC is a non-GAAP measure that provides additional information to management, investors and others that aids in the understanding of the economics of our operations and performance compared to other producers and provides investors visibility by better defining the total costs associated with production.
AISC amounts are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The
measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently as a result of differences in the underlying accounting principles, policies applied and in accounting frameworks such as in IFRS, or by reflecting the benefit from selling non-gold metals as a reduction to AISC. Differences may also arise related to definitional differences of sustaining versus development (i.e. non-sustaining) activities based upon each company’s internal policies.
The following disclosure provides information regarding the adjustments made in determining the All-In Sustaining Costs measure:
Costs applicable to sales. Includes all direct and indirect costs related to current production incurred to execute the current mine plan. We exclude certain exceptional or unusual amounts from CAS, such as significant revisions to recovery amounts. CAS includes by-product credits from certain metals obtained during the process of extracting and processing the primary ore-body. CAS is accounted for on an accrual basis and excludes Depreciation and amortization and Reclamation and remediation, which is consistent with our presentation of CAS on the Consolidated Statements of Operations. In determining AISC, only the CAS associated with producing and selling an ounce of gold is included in the measure. Therefore, the amount of gold CAS included in AISC is derived from the CAS presented in the Company’s Consolidated Statements of Operations less the amount of CAS attributable to the production of other metals. The other metals' CAS at those mine sites is disclosed in Note 4 of the Consolidated Financial Statements. The allocation of CAS between gold and other metals is based upon the relative sales value of gold and other metals produced during the period.
Reclamation costs. Includes accretion expense related to reclamation liabilities and the amortization of the related ARC for the Company’s operating properties. Accretion related to the reclamation liabilities and the amortization of the ARC assets for reclamation does not reflect annual cash outflows but are calculated in accordance with GAAP. The accretion and amortization reflect the periodic costs of reclamation associated with current production and are therefore included in the measure. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals.
Advanced projects, research and development and exploration. Includes incurred expenses related to projects that are designed to sustain current production and exploration. We note that as current resources are depleted, exploration and advanced projects are necessary for us to replace the depleting reserves or enhance the recovery and processing of the current reserves to sustain production at existing operations. As these costs relate to sustaining our production, and are considered a continuing cost of a mining company, these costs are included in the AISC measure. These costs are derived from the Advanced projects, research and development and Exploration amounts presented in the Consolidated Statements of Operations less incurred expenses related to the development of new operations, or related to major projects at existing operations where these projects will materially benefit the operation in the future. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals. We also allocate these costs incurred at Corporate and Other using the proportion of CAS between gold and other metals.
General and administrative. Includes costs related to administrative tasks not directly related to current production, but rather related to supporting our corporate structure and fulfilling our obligations to operate as a public company. Including these expenses in the AISC metric provides visibility of the impact that general and administrative activities have on current operations and profitability on a per ounce basis. We allocate these costs to gold and other metals at Corporate and Other using the proportion of CAS between gold and other metals.
Other expense, net. For Other expense, net we include care and maintenance costs relating to direct operating costs incurred at the mine sites during the period that these sites were temporarily placed into care and maintenance in response to pandemics such as COVID-19 or unexpected significant events and exclude certain exceptional or unusual expenses, such as restructuring, as these are not indicative to sustaining our current operations. Furthermore, this adjustment to Other expense, net is also consistent with the nature of the adjustments made to Net income (loss) attributable to Newmont stockholders as disclosed in the Company’s non-GAAP financial measure Adjusted net income (loss). The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals.
Treatment and refining costs. Includes costs paid to smelters for treatment and refining of our concentrates to produce the salable metal. These costs are presented net as a reduction of Sales on the Consolidated Statements of Operations. The allocation of these costs to gold and other metals is determined using the same allocation used in the allocation of CAS between gold and other metals.
Sustaining capital and finance lease payments. We determined sustaining capital and finance lease payments as those capital expenditures and finance lease payments that are necessary to maintain current production and execute the current mine plan. We determined development (i.e. non-sustaining) capital expenditures and finance lease payments to be those payments used to develop new operations or related to projects at existing operations where those projects will materially benefit the operation and are excluded from the calculation of AISC. The classification of sustaining and development capital projects and finance leases is based on a systematic review of our project portfolio in light of the nature of each project. Sustaining capital and finance lease payments are relevant to the AISC metric as these are needed to maintain the Company’s current operations and provide improved transparency related to our ability to finance these expenditures from current operations. The allocation of these costs to gold and other metals is
determined using the same allocation used in the allocation of CAS between gold and other metals. We also allocate these costs incurred at Corporate and Other using the proportion of CAS between gold and other metals.
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Year Ended December 31, 2023 | 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 Ounce (9) |
Gold | | | | | | | | | | | | | | | | | | | |
CC&V | $ | 198 | | | $ | 10 | | | $ | 10 | | | $ | — | | | $ | 2 | | | $ | — | | | $ | 62 | | | $ | 282 | | | 171 | | | $ | 1,644 | |
Musselwhite | 214 | | | 5 | | | 10 | | | — | | | — | | | — | | | 104 | | | 333 | | | 181 | | | 1,843 | |
Porcupine | 301 | | | 23 | | | 12 | | | — | | | — | | | — | | | 71 | | | 407 | | | 258 | | | 1,577 | |
Éléonore | 295 | | | 9 | | | 10 | | | — | | | — | | | — | | | 114 | | | 428 | | | 233 | | | 1,838 | |
Red Chris (10) | 4 | | | — | | | — | | | — | | | — | | | — | | | 2 | | | 6 | | | 4 | | | 1,439 | |
Brucejack (10) | 69 | | | — | | | 7 | | | — | | | 1 | | | 3 | | | 16 | | | 96 | | | 36 | | | 2,646 | |
Peñasquito | 158 | | | 7 | | | 1 | | | — | | | 2 | | | 9 | | | 29 | | | 206 | | | 130 | | | 1,590 | |
Merian | 385 | | | 7 | | | 14 | | | — | | | — | | | 1 | | | 85 | | | 492 | | | 319 | | | 1,541 | |
Cerro Negro | 328 | | | 5 | | | 5 | | | — | | | 5 | | | — | | | 51 | | | 394 | | | 261 | | | 1,509 | |
Yanacocha | 294 | | | 24 | | | 7 | | | — | | | — | | | — | | | 24 | | | 349 | | | 275 | | | 1,266 | |
Boddington | 634 | | | 17 | | | 5 | | | — | | | — | | | 18 | | | 125 | | | 799 | | | 749 | | | 1,067 | |
Tanami | 337 | | | 3 | | | 1 | | | — | | | — | | | — | | | 130 | | | 471 | | | 444 | | | 1,060 | |
Cadia (10) | 129 | | | — | | | 1 | | | — | | | — | | | 6 | | | 16 | | | 152 | | | 120 | | | 1,271 | |
Telfer (10) | 126 | | | — | | | 2 | | | — | | | — | | | 3 | | | 2 | | | 133 | | | 67 | | | 1,988 | |
Lihir (10) | 146 | | | — | | | 2 | | | — | | | — | | | — | | | 51 | | | 199 | | | 131 | | | 1,517 | |
Ahafo | 547 | | | 20 | | | 2 | | | — | | | 2 | | | — | | | 135 | | | 706 | | | 578 | | | 1,222 | |
Akyem | 275 | | | 44 | | | 1 | | | — | | | — | | | — | | | 37 | | | 357 | | | 296 | | | 1,210 | |
NGM | 1,249 | | | 17 | | | 13 | | | 11 | | | 2 | | | 6 | | | 332 | | | 1,630 | | | 1,167 | | | 1,397 | |
Corporate and Other (11) | — | | | — | | | 89 | | | 255 | | | 6 | | | — | | | 37 | | | 387 | | | — | | | — | |
Total Gold | $ | 5,689 | | | $ | 191 | | | $ | 192 | | | $ | 266 | | | $ | 20 | | | $ | 46 | | | $ | 1,423 | | | $ | 7,827 | | | 5,420 | | | $ | 1,444 | |
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Gold equivalent ounces - other metals (12) | | | | | | | | | | | | | | | | | | | |
Red Chris (10) | $ | 17 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 3 | | | $ | 7 | | | $ | 27 | | | 16 | | | $ | 1,660 | |
Peñasquito | 651 | | | 30 | | | 5 | | | 1 | | | 1 | | | 82 | | | 120 | | | 890 | | | 507 | | | 1,756 | |
Boddington | 204 | | | 3 | | | 1 | | | — | | | — | | | 15 | | | 39 | | | 262 | | | 246 | | | 1,067 | |
Cadia (10) | 116 | | | — | | | 1 | | | — | | | — | | | 19 | | | 17 | | | 153 | | | 114 | | | 1,342 | |
Telfer (10) | 22 | | | — | | | 2 | | | — | | | — | | | 4 | | | 5 | | | 33 | | | 13 | | | 2,580 | |
Corporate and Other (11) | — | | | — | | | 11 | | | 32 | | | — | | | — | | | 6 | | | 49 | | | — | | | — | |
Total Gold Equivalent Ounces | $ | 1,010 | | | $ | 33 | | | $ | 20 | | | $ | 33 | | | $ | 1 | | | $ | 123 | | | $ | 194 | | | $ | 1,414 | | | 896 | | | $ | 1,579 | |
| | | | | | | | | | | | | | | | | | | |
Consolidated | $ | 6,699 | | | $ | 224 | | | $ | 212 | | | $ | 299 | | | $ | 21 | | | $ | 169 | | | $ | 1,617 | | | $ | 9,241 | | | | | |
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $137 and excludes co-product revenues of $1,219.
(3)Includes stockpile and leach pad inventory adjustments of $3 at Porcupine, $5 at Éléonore, $2 at Brucejack, $32 at Peñasquito, $2 at Cerro Negro, $5 at Yanacocha, $4 at Telfer, $1 at Akyem, and $43 at NGM.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $97 and $127, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value of $148 and $1,288, respectively.
(5)Advanced projects, research and development and Exploration excludes development expenditures of $3 at CC&V, $5 at Porcupine, $5 at Peñasquito, $9 at Merian, $5 at Cerro Negro, $4 at Yanacocha, $29 at Tanami, $38 at Ahafo, $18 at Akyem, $16 at NGM and $121 at Corporate and Other, totaling $253 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 Newcrest transaction-related costs of $464, restructuring and severance costs of $24, settlement costs of $7, and distributions from the Newmont Global Community Support fund of $1.
(7)Excludes capitalized interest related to sustaining capital expenditures. See Liquidity and Capital Resources within Part II, Item 7, MD&A for sustaining capital by segment.
(8)Includes finance lease payments for sustaining projects of $64 and excludes finance lease payments for development projects of $36.
(9)Per ounce measures may not recalculate due to rounding.
(10)Sites acquired through the Newcrest transaction. Refer to Note 3 to the Consolidated Financial Statements for further information.
(11)Corporate and Other includes the Company's business activities relating to its corporate and regional offices and all equity method investments. Refer to Note 4 to the Consolidated Financial Statements for further information.
(12)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 ($1,400/oz.), Copper ($3.50/lb.), Silver ($20.00/oz.), Lead ($1.00/lb.) and Zinc ($1.20/lb.) pricing for 2023.
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Year Ended December 31, 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)(7) | | Treatment and Refining Costs | | Sustaining Capital and Lease Related Costs (8)(9)(10) | | All-In Sustaining Costs | | Ounces (000) Sold | | All-In Sustaining Costs per Ounce (11) |
Gold | | | | | | | | | | | | | | | | | | | |
CC&V | $ | 241 | | | $ | 16 | | | $ | 10 | | | $ | — | | | $ | 3 | | | $ | — | | | $ | 45 | | | $ | 315 | | | 185 | | | $ | 1,697 | |
Musselwhite | 195 | | | 5 | | | 8 | | | — | | | 1 | | | — | | | 53 | | | 262 | | | 172 | | | 1,531 | |
Porcupine | 281 | | | 6 | | | 11 | | | — | | | — | | | — | | | 52 | | | 350 | | | 280 | | | 1,248 | |
Éléonore | 266 | | | 9 | | | 5 | | | — | | | 3 | | | — | | | 63 | | | 346 | | | 217 | | | 1,599 | |
Peñasquito (12) | 442 | | | 10 | | | 4 | | | 1 | | | 3 | | | 23 | | | 72 | | | 555 | | | 573 | | | 968 | |
Merian | 369 | | | 6 | | | 11 | | | — | | | 2 | | | — | | | 57 | | | 445 | | | 403 | | | 1,105 | |
Cerro Negro | 283 | | | 5 | | | 1 | | | 2 | | | 10 | | | — | | | 54 | | | 355 | | | 281 | | | 1,262 | |
Yanacocha | 313 | | | 19 | | | 2 | | | 1 | | | 11 | | | — | | | 23 | | | 369 | | | 250 | | | 1,477 | |
Boddington | 652 | | | 17 | | | 5 | | | — | | | 2 | | | 16 | | | 56 | | | 748 | | | 813 | | | 921 | |
Tanami | 328 | | | 2 | | | 7 | | | — | | | 6 | | | — | | | 124 | | | 467 | | | 486 | | | 960 | |
Ahafo | 566 | | | 11 | | | 5 | | | — | | | 2 | | | — | | | 90 | | | 674 | | | 572 | | | 1,178 | |
Akyem | 334 | | | 35 | | | 2 | | | — | | | 1 | | | — | | | 32 | | | 404 | | | 415 | | | 972 | |
NGM | 1,153 | | | 9 | | | 15 | | | 10 | | | — | | | 4 | | | 230 | | | 1,421 | | | 1,165 | | | 1,220 | |
Corporate and Other (13) | — | | | — | | | 76 | | | 224 | | | 3 | | | — | | | 24 | | | 327 | | | — | | | — | |
Total Gold | $ | 5,423 | | | $ | 150 | | | $ | 162 | | | $ | 238 | | | $ | 47 | | | $ | 43 | | | $ | 975 | | | $ | 7,038 | | | 5,812 | | | $ | 1,211 | |
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Gold equivalent ounces - other metals (14) | | | | | | | | | | | | | | | | | | | |
Peñasquito (12) | $ | 864 | | | $ | 19 | | | $ | 10 | | | $ | 1 | | | $ | 5 | | | $ | 130 | | | $ | 132 | | | $ | 1,161 | | | 1,044 | | | $ | 1,112 | |
Boddington | 181 | | | 2 | | | 2 | | | — | | | — | | | 10 | | | 12 | | | 207 | | | 231 | | | 894 | |
Corporate and Other (13) | — | | | — | | | 11 | | | 37 | | | 1 | | | — | | | 4 | | | 53 | | | — | | | — | |
Total Gold Equivalent Ounces | $ | 1,045 | | | $ | 21 | | | $ | 23 | | | $ | 38 | | | $ | 6 | | | $ | 140 | | | $ | 148 | | | $ | 1,421 | | | 1,275 | | | $ | 1,114 | |
| | | | | | | | | | | | | | | | | | | |
Consolidated | $ | 6,468 | | | $ | 171 | | | $ | 185 | | | $ | 276 | | | $ | 53 | | | $ | 183 | | | $ | 1,123 | | | $ | 8,459 | | | | | |
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $117 and excludes co-product revenues of $1,499.
(3)Includes stockpile and leach pad inventory adjustments of $37 at CC&V, $37 at Yanacocha, $3 at Merian, $9 at Ahafo, $19 at Akyem, and $51 at NGM.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $65 and $106, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value of $114 and $742, respectively.
(5)Advanced projects, research and development and Exploration excludes development expenditures of $1 at CC&V, $3 at Porcupine, $5 at Peñasquito, $10 at Merian, $24 at Cerro Negro, $20 at Yanacocha, $21 at Tanami, $21 at Ahafo, $12 at Akyem, $17 at NGM and $141 at Corporate and Other, totaling $275 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.
(6)Other expense, net includes incremental COVID-19 costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic at our operational segments of $1 at Musselwhite, $3 at Éléonore, $7 at Peñasquito, $3 at Merian, $7 at Cerro Negro, $6 at Yanacocha,$2 at Boddington, $6 at Tanami, totaling $35.
(7)Other expense, net is adjusted for settlement costs of $22, restructuring and severance costs of $4 and distributions from the Newmont Global Community Support Fund of $3.
(8)Includes sustaining capital expenditures of $1,059. See Liquidity and Capital Resources within Part II, Item 7, MD&A for sustaining capital by segment.
(9)Excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $1,072. See Liquidity and Capital Resources within Part II, Item 7, Management's Discussion and Analysis for the discussion of major development projects.
(10)Includes finance lease payments for sustaining projects of $64 and excludes finance lease payments for development projects of $36.
(11)Per ounce measures may not recalculate due to rounding.
(12)Costs applicable to sales includes $70 related to the Peñasquito Profit-Sharing Agreement associated with 2021 site performance. For further information, refer to Note 4 to the Consolidated Financial Statements.
(13)Corporate and Other includes the Company's business activities relating to its corporate and regional offices and all equity method investments. Refer to Note 4 to the Consolidated Financial Statements for further information.
(14)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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Year Ended December 31, 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)(8) | | Treatment and Refining Costs | | Sustaining Capital and Lease Related Costs (9)(10)(11) | | All-In Sustaining Costs | | Ounces (000) Sold | | All-In Sustaining Costs per Ounce (12) |
Gold | | | | | | | | | | | | | | | | | | | |
CC&V | $ | 238 | | | $ | 7 | | | $ | 9 | | | $ | — | | | $ | — | | | $ | — | | | $ | 41 | | | $ | 295 | | | 220 | | | $ | 1,338 | |
Musselwhite | 157 | | | 2 | | | 7 | | | — | | | 1 | | | — | | | 39 | | | 206 | | | 154 | | | 1,335 | |
Porcupine | 269 | | | 5 | | | 13 | | | — | | | — | | | — | | | 43 | | | 330 | | | 287 | | | 1,152 | |
Éléonore | 237 | | | 3 | | | 2 | | | — | | | 5 | | | — | | | 63 | | | 310 | | | 247 | | | 1,256 | |
Peñasquito | 395 | | | 6 | | | 1 | | | — | | | 7 | | | 31 | | | 65 | | | 505 | | | 720 | | | 702 | |
Merian | 326 | | | 5 | | | 5 | | | — | | | 5 | | | — | | | 47 | | | 388 | | | 434 | | | 895 | |
Cerro Negro | 243 | | | 6 | | | — | | | — | | | 23 | | | — | | | 60 | | | 332 | | | 267 | | | 1,247 | |
Yanacocha | 232 | | | 66 | | | 6 | | | — | | | 30 | | | 1 | | | 20 | | | 355 | | | 263 | | | 1,355 | |
Boddington | 607 | | | 11 | | | 7 | | | — | | | — | | | 13 | | | 102 | | | 740 | | | 685 | | | 1,083 | |
Tanami | 278 | | | 2 | | | 5 | | | — | | | 17 | | | — | | | 116 | | | 418 | | | 488 | | | 855 | |
Ahafo | 425 | | | 8 | | | 5 | | | — | | | 5 | | | — | | | 79 | | | 522 | | | 480 | | | 1,084 | |
Akyem | 261 | | | 30 | | | 4 | | | — | | | 1 | | | — | | | 49 | | | 345 | | | 378 | | | 913 | |
NGM | 960 | | | 8 | | | 13 | | | 10 | | | 3 | | | 2 | | | 172 | | | 1,168 | | | 1,274 | | | 918 | |
Corporate and Other (13) | — | | | — | | | 97 | | | 213 | | | 8 | | | — | | | 28 | | | 346 | | | — | | | — | |
Total Gold | $ | 4,628 | | | $ | 159 | | | $ | 174 | | | $ | 223 | | | $ | 105 | | | $ | 47 | | | $ | 924 | | | $ | 6,260 | | | 5,897 | | | $ | 1,062 | |
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Gold equivalent ounces - other metals (14) | | | | | | | | | | | | | | | | | | | |
Peñasquito | $ | 664 | | | $ | 9 | | | $ | 2 | | | $ | 1 | | | $ | 11 | | | $ | 115 | | | $ | 106 | | | $ | 908 | | | 1,100 | | | $ | 824 | |
Boddington | 143 | | | 2 | | | 1 | | | — | | | — | | | 7 | | | 19 | | | 172 | | | 158 | | | 1,098 | |
Corporate and Other (13) | — | | | — | | | 14 | | | 35 | | | — | | | — | | | 4 | | | 53 | | | — | | | — | |
Total Gold Equivalent Ounces | $ | 807 | | | $ | 11 | | | $ | 17 | | | $ | 36 | | | $ | 11 | | | $ | 122 | | | $ | 129 | | | $ | 1,133 | | | 1,258 | | | $ | 900 | |
| | | | | | | | | | | | | | | | | | | |
Consolidated | $ | 5,435 | | | $ | 170 | | | $ | 191 | | | $ | 259 | | | $ | 116 | | | $ | 169 | | | $ | 1,053 | | | $ | 7,393 | | | | | |
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)Includes by-product credits of $194 and excludes co-product revenues of $1,679.
(3)Includes stockpile and leach pad inventory adjustments of $16 at CC&V, $18 at Yanacocha and $11 at NGM.
(4)Reclamation costs include operating accretion and amortization of asset retirement costs of $79 and $91, respectively, and exclude accretion and reclamation and remediation adjustments at former operating properties and historic mining operations that have entered the closure phase and have no substantive future economic value of $52 and $1,715, respectively.
(5)Advanced projects, research and development and Exploration excludes development expenditures of $9 at CC&V, $4 at Porcupine, $3 at Éléonore, $5 at Peñasquito, $6 at Merian, $9 at Cerro Negro, $12 at Yanacocha, $19 at Tanami, $17 at Ahafo, $6 at Akyem, $17 at NGM and $65 at Corporate and Other, totaling $172 related to developing new operations or major projects at existing operations where these projects will materially benefit the operation.
(6)Other expense, net includes $8 at Tanami of cash care and maintenance costs associated with the sites temporarily being placed into care and maintenance or operating at reduced levels in response to the COVID-19 pandemic, during the period ended December 31, 2021 that we would have continued to incur if the sites were not temporarily placed into care and maintenance.
(7)Other expense, net includes incremental COVID-19 costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic at our operational segments of $1 at Musselwhite, $3 at Éléonore, $19 at Peñasquito, $6 at Merian, $19 at Cerro Negro, $21 at Yanacocha, $8 at Tanami, $4 at Ahafo, and $1 at Akyem, totaling $82
(8)Other expense, net is adjusted for settlement costs of $11, restructuring and severance of $11, and incremental costs of responding to the COVID-19 pandemic of $5.
(9)Includes sustaining capital expenditures of $985. See Liquidity and Capital Resources within Part II, Item 7, MD&A for sustaining capital by segment.
(10)Excludes development capital expenditures, capitalized interest and the change in accrued capital totaling $668. See Liquidity and Capital Resources within Part II, Item 7, Management's Discussion and Analysis for the discussion of major development projects.
(11)Includes finance lease payments for sustaining projects of $68 and excludes finance lease payments for development projects of $41.
(12)Per ounce measures may not recalculate due to rounding.
(13)Corporate and Other includes the Company's business activities relating to its corporate and regional offices and all equity method investments. Refer to Note 4 of the Consolidated Financial Statements for further information.
(14)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.
Liquidity and Capital Resources
Liquidity Overview
We have a disciplined capital 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.
Our global operations expose us to risks associated with public health crises, including epidemics and pandemics such as COVID-19, and geopolitical and macroeconomic pressures such as the Russian invasion of Ukraine. The Company continues to experience the impacts from recent geopolitical and macroeconomic pressures. Depending on the duration and extent of the impact of these events, commodity prices and the prices for gold and other metals could continue to experience volatility; transportation industry disruptions could continue, including limitations on shipping produced metals; our supply chain could continue to experience disruption; cost inflation rates could further 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 December 31, 2023, we believe our available liquidity allows us to manage the short- and, possibly, long-term material adverse impacts of these events on our business. Refer to Note 2 of the Consolidated Financial Statements for further discussion on risks and uncertainties.
At December 31, 2023, the Company had $3,002 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. Our Cash and cash equivalents are highly liquid and low-risk investments that are available to fund our operations as necessary. We may have investments in prime money market funds that 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 their par value. We believe that our liquidity and capital resources are adequate to fund our operations and corporate activities.
At December 31, 2023, $1,585 of Cash and cash equivalents was held in foreign subsidiaries and is primarily held in USD denominated accounts with the remainder in foreign currencies readily convertible to USD. Cash and cash equivalents denominated in Argentine peso are subject to regulatory restrictions. Refer to Foreign Currency Exchange Rates above for further information. At December 31, 2023, $1,212 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 any potential withholding taxes.
We believe our existing consolidated Cash and cash equivalents, available capacity on our revolving credit facilities, and cash generated from continuing operations will be adequate to satisfy working capital needs, fund future growth, meet debt obligations and meet other liquidity requirements for the foreseeable future. At December 31, 2023, our available borrowing capacity on revolving credit facilities was $3,077. We are currently compliant with covenants and do not currently anticipate any events or circumstances that would impact our ability to access funds available on this facility. Refer to Note 20 to the Consolidated Financial Statements for further information on our Debt.
Our financial position was as follows:
| | | | | | | | | | | |
| At December 31, 2023 | | At December 31, 2022 |
Cash and cash equivalents | $ | 3,002 | | | $ | 2,877 | |
Time deposits (1) | — | | | 829 | |
Available borrowing capacity on revolving credit facilities (2) | 3,077 | | | 3,000 | |
Total liquidity | $ | 6,079 | | | $ | 6,706 | |
Net debt (3) | $ | 6,434 | | | $ | 2,426 | |
____________________________
(1)Time deposits are included within Time deposits and other investments on the Consolidated Balance Sheets. Refer to Note 15 to the Consolidated Financial Statements for further information.
(2)In connection with the Newcrest transaction, the Company acquired bilateral bank debt facilities held with 13 banks. The bilateral bank debt facilities have a total borrowing capacity of $2,000 with $77 available at December 31, 2023. Refer to Note 20 to the Consolidated Financial Statements for further information.
(3)Net debt is a non-GAAP financial measure used by management to evaluate financial flexibility and strength of the Company's balance sheet. Refer to Non-GAAP Financial Measures below.
Cash Flows
Net cash provided by (used in) operating activities of continuing operations was $2,754 in 2023, a decrease in cash provided of $444 from the year ended December 31, 2022, primarily due to the Peñasquito labor strike, lower sales at Akyem, partially offset by income provided by the newly acquired sites and higher average realized prices for gold, silver and copper.
Net cash provided by (used in) investing activities of continuing operations was $(1,002) in 2023, a decrease in cash used of $1,981 from the year ended December 31, 2022, primarily due to higher net maturities of time deposits and cash acquired as a result of the Newcrest transaction in 2023, partially offset by higher capital expenditures in 2023.
Net cash provided by (used in) financing activities was $(1,603) in 2023, a decrease in cash used of $753 from the year ended December 31, 2022, primarily due to the acquisition of non-controlling interest in Yanacocha in 2022 and lower dividend payments in 2023.
Capital Resources
In February 2024, the Board declared a dividend of $0.25 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.
Additionally, in February 2024, 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. The program will expire after 24 months (in February 2026). The program will be executed at the Company’s discretion, utilizing open market repurchases to occur from time to time throughout the authorization period. 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 or to repurchase the full authorized amount during the authorization period. Consequently, the Board of Directors may revise or terminate such share repurchase authorization in the future.
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. Our near-term development capital projects include Tanami Expansion 2 and Ahafo North, as well as the Cadia Block Caves project which was acquired in the Newcrest transaction.
These projects are being funded from existing liquidity and will continue to be funded from future operating cash flows. Capital costs are estimated to be between $1,700 and $1,800 for Tanami Expansion 2 with an expected commercial production date in the second half of 2027. Capital costs are estimated to be between $950 and $1,050 for Ahafo North with an expected commercial production date in late 2025. Additionally, on September 30, 2023, the San Marcos deposit achieved commercial production, the first of six ore bodies in the Cerro Negro expansion projects.
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. 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.
The Company continues to evaluate strategic priorities and deployment of capital to projects in the pipeline to ensure we execute on our capital priorities and provide long-term value to shareholders. Included in the Company's continuous evaluation is consideration of current market opportunities or pressures. In response to the current challenging market conditions, which include inflationary pressures and market volatility, in the second quarter of 2023 the Company announced the delay of the full-funds investment decision for the Yanacocha Sulfides project in Peru. Refer to Note 2 to the Consolidated Financial Statements for further information.
In 2020, we announced climate targets to reduce GHG emissions and plans to 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 CAT with the aim to develop and implement a comprehensive all-electric autonomous mining system to achieve zero emissions mining. To support this alliance, Newmont pledged a preliminary investment of $100, of which $56 has been paid as of December 31, 2023 and is recognized in Advanced projects, research and development within our Consolidated Statements of Operations. The remaining pledged amount is anticipated to be paid as certain milestones are reached through 2026.
Other investments supporting our climate change initiatives are expected to include emissions reduction projects and renewable energy opportunities as we seek to achieve these climate targets. For risks related to climate-related capital expenditures, refer to Part I, Item 1A Risk Factors.
For the years ended December 31, 2023, 2022 and 2021 we had Additions to property, plant and mine development as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2023 | | 2022 | | 2021 |
| Development Projects | | Sustaining Capital | | Total | | Development Projects | | Sustaining Capital | | Total | | Development Projects | | Sustaining Capital | | Total |
CC&V | $ | — | | | $ | 64 | | | $ | 64 | | | $ | — | | | $ | 44 | | | $ | 44 | | | $ | 1 | | | $ | 41 | | | $ | 42 | |
Musselwhite | — | | | 104 | | | 104 | | | 1 | | | 53 | | | 54 | | | — | | | 39 | | | 39 | |
Porcupine | 98 | | | 68 | | | 166 | | | 103 | | | 49 | | | 152 | | | 28 | | | 40 | | | 68 | |
Éléonore | — | | | 106 | | | 106 | | | 6 | | | 54 | | | 60 | | | 1 | | | 45 | | | 46 | |
Red Chris (1) | 16 | | | 9 | | | 25 | | | — | | | — | | | — | | | — | | | — | | | — | |
Brucejack (1) | 1 | | | 21 | | | 22 | | | — | | | — | | | — | | | — | | | — | | | — | |
Peñasquito | — | | | 113 | | | 113 | | | 14 | | | 169 | | | 183 | | | — | | | 144 | | | 144 | |
Merian | — | | | 84 | | | 84 | | | — | | | 56 | | | 56 | | | — | | | 47 | | | 47 | |
Cerro Negro | 107 | | | 55 | | | 162 | | | 78 | | | 54 | | | 132 | | | 48 | | | 60 | | | 108 | |
Yanacocha | 288 | | | 24 | | | 312 | | | 416 | | | 23 | | | 439 | | | 151 | | | 20 | | | 171 | |
Boddington | — | | | 164 | | | 164 | | | 6 | | | 66 | | | 72 | | | 54 | | | 120 | | | 174 | |
Tanami | 291 | | | 122 | | | 413 | | | 230 | | | 113 | | | 343 | | | 203 | | | 101 | | | 304 | |
Cadia (1) | 42 | | | 33 | | | 75 | | | — | | | — | | | — | | | — | | | — | | | — | |
Telfer (1) | 1 | | | 8 | | | 9 | | | — | | | — | | | — | | | — | | | — | | | — | |
Lihir (1) | 2 | | | 51 | | | 53 | | | — | | | — | | | — | | | — | | | — | | | — | |
Ahafo | 176 | | | 134 | | | 310 | | | 180 | | | 88 | | | 268 | | | 137 | | | 76 | | | 213 | |
Akyem | 3 | | | 37 | | | 40 | | | 4 | | | 30 | | | 34 | | | 17 | | | 49 | | | 66 | |
NGM | 138 | | | 334 | | | 472 | | | 78 | | | 230 | | | 308 | | | 63 | | | 171 | | | 234 | |
Corporate and Other | 8 | | | 43 | | | 51 | | | 15 | | | 30 | | | 45 | | | 5 | | | 32 | | | 37 | |
Accrual basis | $ | 1,171 | | | $ | 1,574 | | | $ | 2,745 | | | $ | 1,131 | | | $ | 1,059 | | | $ | 2,190 | | | $ | 708 | | | $ | 985 | | | $ | 1,693 | |
Decrease (increase) in non-cash adjustments | | | | | (79) | | | | | | | (59) | | | | | | | (40) | |
Cash basis | | | | | $ | 2,666 | | | | | | | $ | 2,131 | | | | | | | $ | 1,653 | |
____________________________
(1)Sites acquired through the Newcrest transaction. Refer to Note 3 to the Consolidated Financial Statements for further information.
For the year ended December 31, 2023, development projects primarily included Pamour at Porcupine; Cerro Negro expansions projects; Yanacocha Sulfides; Tanami Expansion 2; Cadia Block Caves; Ahafo North; and the TS Solar Plant and Goldrush Complex at Nevada Gold Mines. Development capital costs (excluding capitalized interest) on our Tanami Expansion 2, Ahafo North, and Cadia Block Caves projects since approval were $752, $375, and $36, respectively, of which $253, $163, and $36 related to the year ended December 31, 2023, respectively.
For the year ended December 31, 2022, development projects included Pamour at Porcupine; Yanacocha Sulfides; Cerro Negro expansion projects; Tanami Expansion 2 and Power Generation Civil Upgrade at Tanami; Ahafo North and Subika Mining Method Change at Ahafo; and Goldrush Complex and Turquoise Ridge 3rd Shaft at NGM.
In October 2022, the Company entered into A$574 of AUD-denominated fixed forward contracts to mitigate variability in the USD functional cash flows related to the AUD-denominated capital expenditures expected to be incurred in 2023 and 2024 during the construction and development phase of the Tanami Expansion 2 project. The Company has designated the forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated Tanami Expansion 2 capital expenditures. Refer to Note 14 of the Consolidated Financial Statements for further information.
For the year ended December 31, 2021, development projects included Pamour at Porcupine; Yanacocha Sulfides and Quecher Main at Yanacocha; Cerro Negro expansion projects; Tanami Expansion 2 and Power Generation Civil Upgrade at Tanami; Subika Mining Method Change and Ahafo North at Ahafo; and Goldrush Complex and Turquoise Ridge 3rd Shaft at NGM.
For the years ended December 31, 2023, 2022 and 2021, sustaining capital includes capital expenditures such as capitalized component purchases, underground and surface mine development, tailings facility construction, mining equipment, infrastructure improvements, reserves drilling conversion, water treatment plant construction, and water storage and support facilities. Additionally, for the years ended December 31, 2023 and 2021, sustaining capital included haul truck purchases for the Autonomous Haulage System at Boddington.
For the years ended December 31, 2023, 2022 and 2021, drilling and related costs capitalized and included in mine development costs were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
CC&V | $ | — | | | $ | — | | | $ | 6 | |
Musselwhite | 3 | | | 4 | | | — | |
Porcupine | 4 | | | 7 | | | 5 | |
Éléonore | 3 | | | 6 | | | 4 | |
| | | | | |
| | | | | |
Peñasquito | 1 | | | — | | | 3 | |
Merian | 1 | | | 5 | | | 5 | |
Cerro Negro | 13 | | | 23 | | | 33 | |
Yanacocha | — | | | 3 | | | — | |
| | | | | |
Tanami | 65 | | | 60 | | | 74 | |
| | | | | |
| | | | | |
| | | | | |
Ahafo | 5 | | | 9 | | | 4 | |
Akyem | 2 | | | — | | | 1 | |
NGM | 33 | | | 27 | | | 21 | |
| | | | | |
| $ | 130 | | | $ | 144 | | | $ | 156 | |
During 2023, 2022 and 2021, $69, $11, and $—, respectively, of pre-stripping costs were capitalized and included in mine development costs.
Refer to Note 4 to our Consolidated Financial Statements and Non-GAAP Financial Measures, below, for further information.
Debt
Debt and Corporate Revolving Credit Facilities. The Company from time to time will redeem its outstanding senior notes ahead of their scheduled maturity dates utilizing Cash and cash equivalents. Additionally, depending upon market conditions and strategic considerations, we may choose to refinance debt in the capital markets.
At December 31, 2023, our future debt maturities of $9,197 include $1,231 that mature beginning in 2024. We generally expect to be able to fund maturities of debt from Net cash provided by (used in) operating activities, existing cash balances and available credit facilities.
In December 2023, we completed a like-for-like exchange for the any and all of the outstanding notes issued by Newcrest Finance Pty Ltd, a wholly owned subsidiary of Newmont ("Newcrest Finance"), with an aggregate principal amount of $1,650, for new notes issued by Newmont and Newcrest Finance and nominal cash consideration. The new notes, issued December 28, 2023, and the existing Newcrest and Newcrest Finance notes that were not tendered for exchange, consist of $625 and $25 of 3.25% notes due May 13, 2030 (the "May 2030 Senior Notes" and the "2030 Newcrest Senior Notes", respectively), $460 and $40 of 5.75% notes due November 15, 2041 (the "November 2041 Senior Notes" and the "2041 Newcrest Senior Notes", respectively), and $486 and $14 of 4.20% notes due May 13, 2050, respectively (the "May 2050 Senior Notes" and the "2050 Newcrest Senior Notes", respectively).
In connection with the Newcrest transaction, the Company acquired bilateral bank debt facilities (the "bilateral facilities") held with 13 banks. The bilateral bank debt facilities have a total borrowing capacity of $2,000 with $77 available at December 31, 2023. These are committed unsecured revolving facilities, individually negotiated and documented with each bank but with similar terms and conditions. The facilities are on customary terms and conditions and include certain financial covenants. Interest is based on Term SOFR plus a credit spread and margin. At December 31, 2023, there was $1,923 in outstanding borrowings on the facilities with $462 due February 7, 2024, $769 due March 1, 2024 and $692 due March 1, 2026. The facilities due February 7, 2024 include the 3 banks that exercised their option under the change of effective control event. On February 7, 2024, the Company repaid the 3 non-consenting banks with a total borrowing capacity of $462.
On February 15, 2024, the Company completed an amendment and restatement of its existing $3,000 revolving credit agreement dated as of April 4, 2019 (the “Existing Credit Agreement”). The Existing Credit Agreement was entered into with a syndicate of financial institutions and provided for borrowings in U.S. dollars and contained a letter of credit sub-facility. Per the amendment, the expiration date of the credit facility was extended from March 30, 2026 to February 15, 2029 and the borrowing capacity was increased to $4,000. Interest is based on Term SOFR plus a credit spread adjustment and margin.
Concurrently, the Company completed a drawdown on the $4,000 revolving credit agreement and used the proceeds thereof to repay the remaining $1,461 owed on the remaining bilateral bank debt facilities.
Refer to Note 20 to the Consolidated Financial Statements for more information.
Debt Covenants
Our senior notes and revolving credit facilities contain various covenants and default provisions including payment defaults, limitation on liens, leases, sales and leaseback agreements and merger restrictions. Furthermore, our senior notes and corporate revolving credit facility contain covenants that include, limiting the sale of all or substantially all of our assets, certain change of control provisions and a negative pledge on certain assets.
The corporate revolving credit facility contains a financial ratio covenant requiring us to maintain a net debt (total debt net of Cash and cash equivalents) to total capitalization ratio of less than or equal to 62.50% in addition to the covenants noted above. The bilateral bank debt facilities contain the following covenants: (i) tangible net worth not less than $1 billion; (ii) an interest coverage ratio, calculated on a 12 month rolling basis, to be greater than or equal to 2.75:1; and (iii) and total net liabilities to tangible net worth to not exceed 1.75:1.
At December 31, 2023 and 2022, we were in compliance with all existing debt covenants and provisions related to potential defaults, other than the bilateral facilities which have been repaid as of the date of this report.
Letters of Credit and Other Guarantees
We have off-balance sheet arrangements of $2,123 of outstanding surety bonds, bank letters of credit and bank guarantees (refer to Note 25 to the Consolidated Financial Statements). At December 31, 2023, $— of the $3,000 corporate revolving credit facility was used to secure the issuance of letters of credit. Refer to Note 20 to the Consolidated Financial Statements for additional information.
Co-Issuer and Supplemental Guarantor Information
The Company filed a shelf registration statement with the SEC on Form S-3 under the Securities Act, of 1933, 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 and Newcrest Finance, as issuers, 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 noncontrolling interests, foreign currency or regulatory restrictions limiting repatriation of cash. Net assets attributable to noncontrolling interests were $178 at December 31, 2023. 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. Newcrest Finance is a finance subsidiary with no material assets or operations other than those related to issued external debt. Newmont USA’s primary investments are comprised of its 38.5% interest in NGM. For further information regarding these and our other operations, refer to Note 4 of the Consolidated Financial Statements and Results of Consolidated Operations, above.
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 December 31, 2023.
| | | | | | | | | | | |
| December 31, 2023 |
| Obligor Group | | Newmont USA |
Current intercompany assets | $ | 14,776 | | | $ | 8,713 | |
Non-current intercompany assets | $ | 500 | | | $ | 483 | |
Current intercompany liabilities | $ | 13,716 | | | $ | 1,652 | |
Current external debt | $ | 1,923 | | | $ | — | |
| | | |
Non-current external debt | $ | 6,944 | | | $ | — | |
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 December 31, 2023, Newmont USA had approximately $8,867 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 December 31, 2023, 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 December 31, 2023, (i) Newmont’s total consolidated indebtedness was approximately $9,436, none of which was secured (other than $562 of Lease and other financing obligations), and (ii) Newmont’s non-guarantor subsidiaries had $22,756 of total liabilities (including trade payables, but excluding intercompany, 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 20 of the Consolidated Financial Statements.
Contractual Obligations
Our contractual obligations at December 31, 2023 are summarized as follows:
| | | | | | | | | | | | | | | | | |
| Payments Due by Period |
Contractual Obligations | Total | | Current | | Non-Current |
Debt (1) | $ | 13,519 | | | $ | 2,226 | | | $ | 11,293 | |
Finance lease and other financing obligations (2) | 744 | | | 113 | | | 631 | |
Remediation and reclamation liabilities (3) | 11,103 | | | 574 | | | 10,529 | |
Employee-related benefits (4) | 965 | | | 146 | | | 819 | |
Uncertain income tax liabilities and interest (5) | 190 | | | — | | | 190 | |
Operating leases and other obligations (6) | 120 | | | 24 | | | 96 | |
Minimum royalty payments (7) | 62 | | | 47 | | | 15 | |
Purchase obligations (8) | 1,445 | | | 690 | | | 755 | |
Other (9) | 645 | | | 227 | | | 418 | |
| $ | 28,793 | | | $ | 4,047 | | | $ | 24,746 | |
____________________________
(1)Debt includes principal of $9,197 on Senior Notes and bilateral bank debt facilities and estimated interest payments of $4,322 on Senior Notes, assuming no early extinguishment.
(2)Finance lease and other financing obligations includes finance lease payments of $733 and additional payments of $11 for finance leases that have not yet commenced.
(3)Mining operations are subject to extensive environmental regulations in the jurisdictions in which they operate. Pursuant to environmental regulations, we are required to close our operations and reclaim and remediate the lands that operations have disturbed. The estimated undiscounted cash outflows of these Reclamation and remediation liabilities are reflected here. For more information regarding reclamation and remediation liabilities, refer to Note 6 to the Consolidated Financial Statements.
(4)Contractual obligations for Employee-related benefits include severance, workers’ participation, pension and other benefit plans. Pension plan and other benefit payments beyond 2033 cannot be reasonably estimated given variable market conditions and actuarial assumptions and are not included.
(5)We are unable to reasonably estimate the timing of our uncertain income tax liabilities and interest payments due to uncertainties in the timing of the effective settlement of tax positions.
(6)Operating lease and other obligations includes operating lease payments of $120 and additional payments of $— for operating leases that have not yet commenced.
(7)Minimum royalty payments are related to continuing operations and are presented net of recoverable amounts.
(8)Purchase obligations are not recorded in the Consolidated Financial Statements. Purchase obligations represent contractual obligations for purchase of power, materials and supplies, consumables, inventories and capital projects.
(9)Other includes service contracts and other obligations not recorded in our Consolidated Financial Statements, as well as the obligation related to the funding of Barrick's portion of pre-feasibility costs associated with Norte Abierto and the Galore Creek deferred payment obligations accrued in Other current liabilities and Other non-current liabilities.
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. Notably, Newmont is committed to the implementation of GISTM for tailing storage facilities by 2025. Compliance with GISTM remains on-going and has and may continue to result in further increases to our estimated sustaining costs and closure costs for existing operations and non-operating sites. Additionally, laws, regulations and permit requirements focused on water management and discharge requirements for operations and water treatment in connection with closure are becoming increasingly stringent. Compliance with water management and discharge quality remains dynamic and has and may continue to result in further increases to our estimated closure costs.
At December 31, 2023 and 2022, $8,385 and $6,731, respectively, were accrued for reclamation costs relating to currently or recently producing or development stage mineral properties, of which $558 and $482, respectively, were classified as current liabilities.
In addition, we are involved in several matters concerning environmental obligations associated with former, primarily historical, mining activities. Based upon our best estimate of our liability for these matters, $401 and $373 were accrued for such obligations at December 31, 2023 and 2022, respectively, of which $61 and $44, respectively, were classified as current liabilities. We spent $44, $56 and $43 during 2023, 2022, and 2021, respectively, for environmental obligations related to the former mining activities.
Reclamation and remediation adjustments during 2023 primarily related to increased water management costs at portions of our Yanacocha site operations that are no longer in production and with no expected substantive future economic value (i.e., non-operating) and higher water management costs and project execution delays at the Midnite mine and Dawn mill sites. Reclamation and remediation adjustments during 2022 primarily related to (i) increased water management costs at portions of our Yanacocha and Porcupine site operations that are non-operating (ii) increased costs due to closure plan design changes at our Porcupine site operations (iii) higher waste disposal costs and project execution delays at the Midnite mine and Dawn mill sites and (iv) higher estimated closure costs due to cost inflation.
During the year ended December 31, 2023, 2022, and 2021, capital expenditures were approximately $41, $29, and $13, respectively, to comply with environmental regulations.
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 more information on the Company’s reclamation and remediation liabilities, refer to Notes 6 and 25 to the Consolidated Financial Statements. For discussion of regulatory, tailings, water, climate and other environmental risks, refer to Part I, Item 1A. Risk Factors, for additional information.
Forward-Looking Statements
The foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor created thereby. For a more detailed discussion of risks and other factors that might impact forward-looking statements and other important information about forward-looking statements, refer to the discussion in Forward-Looking Statements in Part I, Item 1, Business and Part I, Item 1A, Risk Factors.
Accounting Developments
For a discussion of Recently Adopted and Recently Issued Accounting Pronouncements, refer to Note 2 to the Consolidated Financial Statements.
Critical Accounting Estimates
Our discussion of financial condition and results of operations is based upon the information reported in our Consolidated Financial Statements. The preparation of these Consolidated Financial Statements in conformity with GAAP requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities as of the date of our financial statements. We have identified the accounting estimates listed below as critical to understanding and evaluating the financial results reported in our Consolidated Financial Statements. These accounting estimates require the application of significant management judgment and are critical due to the significant level of estimation uncertainty regarding the assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. We base our assumptions and estimates on historical experience and various other sources that we believe to be reasonable under the circumstances. We review the underlying factors used in our estimates regularly, including reviewing the significant accounting policies
impacting the estimates, to ensure compliance with GAAP. However, due to the uncertainty inherent in our estimates, actual results may materially differ from the estimates we calculate due to changes in circumstances, global economics and politics, and general business conditions. A summary of our significant accounting policies is detailed in Note 2 to the Consolidated Financial Statements.
Business Combinations
We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration when compared to the fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, we engage independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using: (i) discrete financial forecasts, which rely on management’s estimates of reserves, resources and exploration potential quantities, costs to produce and develop reserves, revenues, and operating expenses; (ii) short-term and long-term metal price assumptions, (iii) long-term growth rates; (iv) appropriate discount rates; and (v) expected future capital requirements(“income valuation method”). The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets (“market valuation method”). The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset (“cost valuation method”). The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long lived tangible assets. If the initial accounting for the business combination is incomplete by the end of the reporting period in which the acquisition occurs, an estimate is recorded. Subsequent to the acquisition date, and not later than one year from the acquisition date, we record any material adjustments to the initial estimate based on new information obtained that would have existed as of the date of the acquisition. Any adjustment that arises from information obtained that did not exist as of the date of the acquisition is recorded in the period the adjustments arises.
Depreciation and amortization
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and depreciated using the straight-line method at rates sufficient to amortize such costs over the estimated future lives of such facilities or equipment and their components. Facilities and equipment acquired as a part of a finance lease, build-to-suit or other financing arrangement are recorded based on the contractual lease terms. The facilities and equipment are depreciated using the straight-line method at rates sufficient to depreciate such costs over the lesser of the lease terms or the estimated productive lives of such facilities. These lives do not exceed the estimated mine life based on proven and probable reserves as the useful lives of these assets are considered to be limited to the life of the relevant mine.
Costs incurred to develop new properties are capitalized as incurred where it has been determined that the property can be economically developed based on the existence of proven and probable reserves. At our surface mines, these costs include costs to further delineate the ore body and remove overburden to initially expose the ore body. At our underground mines, these costs include the cost of building access ways, shaft sinking and access, lateral development, drift development, ramps and infrastructure development. All such costs are amortized using the UOP method over the estimated life of the ore body based on estimated recoverable ounces or pounds to be produced from proven and probable reserves.
Major mine development costs incurred after the commencement of production that are capitalized are amortized using the UOP method based on estimated recoverable ounces or pounds to be produced from proven and probable reserves. To the extent that such costs benefit the entire ore body, they are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of the entire ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that block or area are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of that specific ore block or area.
Capitalized asset retirement costs incurred are amortized according to how the related assets are being depreciated. Open pit and underground mining costs are amortized using the UOP method based on recoverable ounces by source. Other costs, including leaching facilities, tailing facilities, and mills and other infrastructure costs, are amortized using the straight-line method over the same estimated future lives of the associated assets.
The calculation of the UOP rate of amortization, and therefore the annual amortization charge to operations, could be materially impacted to the extent that actual production in the future is different from current forecasts of production based on proven and probable reserves. This would generally occur to the extent that there were significant changes in any of the factors or assumptions used in determining reserves. These changes could include: (i) an expansion of proven and probable reserves through exploration activities; (ii) differences between estimated and actual costs of production, due to differences in grade, metal recovery rates and foreign currency exchange rates; and (iii) differences between actual commodity prices and commodity price assumptions used in the estimation of reserves. If reserves decreased significantly, amortization charged to operations would increase; conversely, if reserves increased significantly, amortization charged to operations would decrease. Such changes in reserves could similarly impact
the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine, which in turn is limited to the life of the proven and probable reserves.
The expected useful lives used in depreciation and amortization calculations are determined based on applicable facts and circumstances, as described above. Significant judgment is involved in the determination of useful lives, and no assurance can be given that actual useful lives will not differ significantly from the useful lives assumed for the purpose of depreciation and amortization calculations.
Carrying value of stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Mine sequencing may result in mining material at a faster rate than can be processed. We generally process the highest ore grade material first to maximize metal production; however, a blend of ore stockpiles may be processed to balance hardness and/or metallurgy in order to maximize throughput and recovery. Processing of lower grade stockpiled ore may continue after mining operations are completed. Sulfide copper ores are subject to oxidation over time which can reduce expected future recoveries. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay data), and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are added to stockpiles based on current mining costs, including applicable overhead and depreciation and amortization relating to mining operations and removed at each stockpile’s average cost per recoverable unit as material is processed.
We record stockpiles at the lower of average cost or net realizable value, and carrying values are evaluated at least quarterly. Net realizable value represents the estimated future sales price based on short-term and long-term metals price assumptions that are applied to expected short-term (12 months or less) and long-term sales from stockpiles, less estimated costs to complete production and bring the product to sale. The primary factors that influence the need to record write-downs of stockpiles include declines in short-term or long-term metals prices, increases in costs for production inputs such as labor, fuel and energy, materials and supplies, as well as realized mineral grades and recovery rates. The significant assumption in determining the stockpile net realizable value for each mine site at December 31, 2023 is a long-term gold price of $1,700 per ounce. A decrease of $100 per ounce in the long-term gold price assumption will not result in a material write-down to the carrying value of our stockpiles.
Other assumptions include future operating and capital costs, metal recoveries, production levels, commodity prices, proven and probable reserve quantities, engineering data and other factors unique to each operation based on the life of mine plans, as well as long-term commodity prices and applicable U.S. dollar long-term exchange rates. If short-term and long-term commodity prices decrease, estimated future processing costs increase, or other negative factors occur, it may be necessary to record a write-down of stockpiles. 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.
Refer to Note 17 to the Consolidated Financial Statements for further information regarding stockpiles.
Carrying value of ore on leach pads
Ore on leach pads represent ore that has been mined and placed on leach pads where a solution is applied to the surface of the heap to dissolve the gold, copper or silver. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. Costs are removed from ore on leach pads as ounces or pounds are recovered based on the average cost per estimated recoverable ounce of gold or silver or pound of copper on the leach pad.
Estimates of recoverable ore on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching process is complete.
Although the quantities of recoverable metal placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of metal actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, our operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of metal on our leach pads. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. The significant assumption in determining the net realizable value for each mine site at December 31, 2023 is a long-term gold price of $1,700 per ounce. A decrease of $100 per ounce in the long-term gold price assumption will not result in a material write-down of the carrying value of the leach pads.
Other assumptions include future operating and capital costs, metal recoveries, production levels, proven and probable reserve quantities, engineering data and other factors unique to each operation based on the life of mine plans, as well as a long-term metal prices. If short-term and long-term commodity prices decrease, estimated future processing costs increase, or other negative factors occur, it may be necessary to record a write-down of ore on leach pads to net realizable value.
Refer to Note 17 to the Consolidated Financial Statements for further information regarding ore on leach pads.
Carrying value of long-lived assets
We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Significant negative industry or economic trends, adverse social or political developments, declines in our market capitalization, geotechnical difficulties, reduced estimates of future cash flows from our reporting segments or other disruptions to our business are a few examples of events that we monitor, as they could indicate that the carrying value of the Company’s long-lived assets, including development projects, may not be recoverable. In such cases, a recoverability test may be necessary to determine if an impairment charge is required.
For development projects, including our Conga project which is discussed further below, we review and evaluate changes to project plans and timing to determine continued technical, economic and social viability of the projects. If the Company determines to sell or abandon a project due to uncertainty from changes in circumstances related to technical, economic, social, political or community factors, or other evolving circumstances indicate that the carrying value may not be recoverable, then a recoverability test is performed to determine if an impairment charge should be recorded.
An impairment loss is measured and recorded based on the estimated fair value of the long-lived assets being tested for impairment and their carrying amounts. Fair value is typically determined through the use of an income approach utilizing estimates of discounted pre-tax future cash flows or a market approach utilizing recent transaction activity for comparable properties. These approaches are primarily considered Level 3 fair value measurements. Occasionally, such as when an asset is held for sale, market prices are used. We believe our estimates and models used to determine fair value are similar to what a market participant would use.
The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of our mining operations are derived from current business plans, which are developed using short-term price forecasts reflective of the current price environment and our projections for long-term average metal prices. In addition to short- and long-term metal price assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable mineral reserve estimates; estimated future closure costs; the use of appropriate discount rates; and applicable U.S. dollar long-term exchange rates. Refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk.
The significant assumption in determining the future cash flows for each mine site at December 31, 2023 is a long-term gold price of $1,700 per ounce. A decrease of $100 per ounce in the long-term gold price assumption could result in an impairment of our long-lived assets, including goodwill, of up to approximately $4,100 before consideration of other value beyond proven and probable reserves which may significantly decrease the amount of any potential impairment charge.
As discussed above under Depreciation and amortization, various factors could impact our ability to achieve our forecasted production schedules from proven and probable reserves which could impact the carrying value of our long-lived assets. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified measured, indicated and inferred resources could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.
Events that could result in additional impairment of our long-lived assets include, but are not limited to, decreases in future metal prices, unfavorable changes in foreign exchange rates, increases in future closure costs, and any event that might otherwise have a material adverse effect on mine site cash flows.
Goodwill
Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business acquisition. Goodwill is allocated to reporting units and tested for impairment annually as of December 31, 2023 and when events or changes in circumstances indicate that the carrying value of a reporting unit exceeds its fair value. Each operating mine is considered a distinct reporting unit for purposes of goodwill impairment testing.
The Company may elect to perform a qualitative assessment when it is more likely than not that the fair value of a reporting unit is higher than its carrying value. At the Company's election or if it is determined to be more likely than not that the fair value is less than the carrying value, a quantitative goodwill impairment test is performed to determine the fair value of the reporting unit. The fair value of a reporting unit is determined using either the income approach utilizing estimates of discounted future cash flows or the market valuation approach utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. Any impairment loss recognized in the current period is not reversed in future periods. The Company recognizes its pro rata share of Goodwill and any subsequent goodwill impairment losses recorded by entities that are proportionately consolidated.
When the income approach is utilized to determine fair value, the estimated cash flows used to assess the fair value of a reporting unit are derived from the Company’s current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. The significant assumption in determining the future cash flows for each mine site at December 31, 2023 is a long-term gold price of $1,700 per ounce. In addition to short- and long-term metal price assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable estimates; estimated future closure costs; the use of appropriate discount rates; and applicable U.S. dollar long-term exchange rates. Refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk.
Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. For testing purposes of our reporting units, management's best estimates of the expected future results are the primary driver in determining the fair value. However, there can be no assurance that the estimates and assumptions made for purposes of the goodwill impairment tests will prove to be an accurate prediction of the future. Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair value of our reporting units include, but are not limited to, such items as: (i) a decrease in forecasted production levels if we are unable to realize the mineable reserves, resources and exploration potential at our mining properties and extend the life of mine (ii) increased production or capital costs (iii) adverse changes in macroeconomic conditions including the market price of metals and changes in the equity and debt markets or country specific factors which could result in higher discount rates, (iv) significant unfavorable changes in tax rates including increased corporate income or mining tax rates, and (v) negative changes in regulation, legislation, and political environments which could impact our ability to operate in the future. Refer to Notes 7 and 19 to the Consolidated Financial Statements for further information regarding goodwill.
Carrying value of Conga
We review and evaluate the Company’s Conga development project for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. We have considered a variety of technical, economic, social and political developments related to the Conga project during our evaluation of impairment indicators since November 2011, when construction and development activities at the project were largely suspended. Project activities in recent years have focused on continued engagement with the local communities and maintaining and protecting existing project infrastructure and equipment through our active care and maintenance program. Although we have reclassified Conga reserves to resources and reallocated exploration and development capital to other projects, we continue to evaluate long-term options to progress development of the Conga project and improve social and political acceptance. While we have reprioritized the Yanacocha Sulfides project ahead of the Conga project, we have delayed the full-funds decision and are currently in the process of assessing project plan options for the Yanacocha Sulfides project. The Company also periodically updates the economic model for its Conga project to understand changes to the estimated capital costs, cash flows, and economic returns from the project. As of December 31, 2023, we have not identified events or changes in circumstances that indicate that the carrying value of the Conga project is not recoverable.
Derivative Instruments
All financial instruments that meet the definition of a derivative are recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded in the Consolidated Statements of Operations, except for the portion of the change in fair value of derivatives that are designated as cash flow hedges. Management applies judgment in estimating the fair value of instruments that are highly sensitive to assumptions such as life of mine production profiles, commodity prices, market volatilities, foreign currency exchange rates and interest rates. Variations in these factors could materially affect amounts credited or charged to earnings to reflect the changes in fair value of derivatives. Certain derivative contracts are designated as effective cash flow hedges, whereby the changes in fair value of these instruments are deferred in Accumulated other comprehensive income (loss) and are reclassified to income in the Consolidated Statements of Operations when the underlying transaction designated as the hedged item impacts earnings. To the extent that management determines that the forecasted transactions are no longer probable of occurring, gains and losses deferred in Accumulated other comprehensive income (loss) would be reclassified to the Consolidated Statements of Operations immediately.
Refer to Note 14 to the Consolidated Financial Statements for further information regarding derivative instruments.
Reclamation and remediation obligations
The Company records the estimated asset retirement obligations associated with operating and non-operating mine sites when an obligation is incurred and the fair value can be reasonably estimated. Fair value is measured as the present value of expected cash flow estimates, after considering inflation, our credit-adjusted risk-free rates and a market risk premium appropriate for our operations. Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. Reclamation obligations are based on our best estimate of when the expected spending for an existing environmental disturbance will occur. Our cost estimates are reflected on a third-party cost basis and comply with our legal obligation to retire long-lived assets in the period incurred. Changes in reclamation estimates at non-operating mines where the mine or portion of the mine site has entered the closure phase and has no substantive future economic value are reflected in earnings in the period an
estimate is revised. Costs included in estimated asset retirement obligations are discounted to their present value and are estimated over a period of up to fifty years. We review, on at least an annual basis, the reclamation obligation at each mine.
Remediation costs are accrued when it is probable that an obligation has been incurred and the cost can be reasonably estimated. Such cost estimates may include ongoing care, maintenance and monitoring costs. Changes in remediation estimates at non-operating mines are reflected in earnings in the period an estimate is revised. Water treatment costs included in environmental remediation obligations are discounted to their present value and are estimated over a period of up to fifty years.
Accounting for reclamation and remediation obligations requires management to make estimates unique to each mining operation of the future costs the Company expects to incur to complete the reclamation and remediation work required to comply with existing laws and regulations. These estimates require considerable judgment and are sensitive to changes in underlying inputs and assumptions. Such changes, including, but not limited to, (i) changes to environmental laws and regulations, which could increase the scope and extent of work required, (ii) changes in the timing of reclamation and remediation activities, which could occur over an extended future period and (iii) changes in the methods and technology utilized to settle reclamation and remediation obligations, could have a material impact on our business, financial condition, results of operations and cash flows.
Refer to Note 6 to the Consolidated Financial Statements for further information regarding reclamation and remediation obligations.
Income and mining taxes
We account for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of our liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for us, as measured by the statutory tax rates in effect. We derive our deferred income tax charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. The financial statement effects of changes in tax law are recorded as discrete items in the period enacted as part of income tax expense or benefit from continuing operations, regardless of the category of income or loss to which the deferred taxes relate. We have exposure to the impact of foreign exchange fluctuations on tax positions in certain jurisdictions, such movements are recorded within Income and mining tax benefit (expense) related to deferred income tax assets and liabilities, as well as non-current uncertain tax positions, while foreign exchange fluctuations impacting current tax positions are recorded within Other income (loss), net as foreign currency exchange gains (losses). With respect to the earnings that we derive from the operations of our consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of these consolidated companies.
Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes as such taxes are based on a percentage of mining profits.
Our operations are in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Some of these tax regimes are defined by contractual agreements with the local government, while others are defined by general tax laws and regulations. We are subject to reviews of our income tax filings and other tax payments, and disputes can arise with the taxing authorities over the interpretation of its contracts or laws. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether it is more likely than not, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in Income and mining tax benefit (expense). In certain jurisdictions, we must pay a portion of the disputed amount to the local government in order to formally appeal the assessment. Such payment is recorded as a receivable if we believe the amount is ultimately collectible.
Valuation of deferred tax assets
Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.
Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. We look to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date or the expectation of future pretax losses and the existence and frequency of prior cumulative pretax losses.
We utilize a rolling twelve quarters of pre-tax income or loss as a measure of our cumulative results in recent years. Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. However, a cumulative three year loss is not solely determinative of the need for a valuation allowance. We also consider all other available positive and negative evidence in our analysis.
Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to:
•Earnings history;
•Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices;
•The duration of statutory carry forward periods;
•Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary difference;
•Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and
•The sensitivity of future forecasted results to commodity prices and other factors.
The Company assesses available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence is recent pretax losses and/or expectations of future pretax losses. Such objective evidence limits the ability to consider other subjective evidence including projections for future growth. On the basis of this evaluation, a valuation allowance has been recorded in Peru and Argentina. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.
Refer to Note 10 to the Consolidated Financial Statements for additional detail on the valuation allowance.
For additional risk factors that could impact the Company’s ability to realize the deferred tax assets, refer to Note 2 to the Consolidated Financial Statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Newmont Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Newmont Corporation (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2023, the related notes and the financial statement schedule in Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, based on our audits and the report of other auditors, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We did not audit the financial statements of Nevada Gold Mines LLC, a 38.5% owned investment which is proportionately consolidated, which reflects total assets constituting 13% and 19% at December 31, 2023 and 2022, respectively, and sales constituting 19%, 18%, and 19% in 2023, 2022, and 2021, respectively, of the related consolidated totals. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Nevada Gold Mines LLC, is based solely on the report of the other auditors.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework, and our report dated February 29, 2024 expressed an unqualified opinion thereon, based on our audit and the report of the other auditors.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits and the report of other auditors provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. | | | | | |
| Business Combination |
Description of the Matter | As discussed in Notes 1 and 3 to the financial statements, during 2023 the Company completed its acquisition of Newcrest Mining Limited for consideration of $13,549 million. The transaction was accounted for as a business combination.
Auditing management’s accounting for the business combination was challenging due to the significant estimation required by management to determine the provisional fair values of mineral interests (included in property, plant and mine development, net) and significant judgment required to evaluate management’s estimate. The significant judgment was primarily due to the sensitivity of the significant underlying assumptions to the estimated fair values. Significant assumptions used to estimate the fair value of mineral interests included long-term metal prices, estimated quantities of ore reserves and mineral resources, and the weighted average cost of capital. These significant assumptions are forward-looking and could be affected by future economic and market conditions. |
| | | | | |
How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting for the business combination and valuation of the acquired assets. For example, we tested controls over management’s valuation of acquired mineral interests, including the review of the valuation model and underlying assumptions used to develop such estimates.
Our audit procedures included, among others, evaluating the Company's valuation methodology, significant assumptions used by the Company, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved our valuation specialists to assist with our evaluation of the selection and application of the valuation methodology used by the Company and significant assumptions included in the fair value estimates. We compared the long-term metal prices to consensus market views of future prices. We assessed the estimated quantities of ore reserves and mineral resources by comparing to information compiled by qualified persons and evaluated extraction and production of those quantities compared to historical performance. We examined the inputs to the weighted average cost of capital assumptions. |
| Reclamation liabilities |
Description of the Matter | As discussed in Notes 2, 6 and 25 of the consolidated financial statements, the Company’s mining and exploration activities are subject to various domestic and international laws and regulations governing the protection of the environment. Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. Reclamation liabilities are periodically adjusted to reflect changes in the estimated present value resulting from revisions to the estimates of either the timing or amount of the reclamation costs.
Auditing management’s accounting for reclamation liabilities was challenging, as significant judgment is required by the Company to estimate required cash flows to meet obligations established by mining permits, local statutes and promissory estoppel at the end of mine life as well as estimation of uncertainty inherent in the cash flows. The significant judgment was primarily related to the inherent estimation uncertainty relating to the extent of future reclamation activities and related costs. |
How We Addressed the Matter in Our Audit
| We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls over the Company’s accounting for reclamation liabilities, including controls over management’s review of estimated future costs and the reclamation liability calculation.
To test the reclamation liabilities, among other procedures, we evaluated the methodology, significant assumptions and the underlying data used by the Company in its estimate. To assess the estimates of reclamation activities and cash flows, we evaluated significant changes from the prior estimate, verified consistency between timing of reclamation activities and projected mine life, compared anticipated costs across the Company’s mines, verified cost rates against third-party information or internal cost records and recalculated management’s estimate. We also evaluated the significant assumptions included in the fair value calculation, including market risk premium, cost inflation, and credit-adjusted risk-free rate. We involved our reclamation specialists to interview members of the Company’s engineering staff, assess the completeness of the mine reclamation estimates with respect to meeting mine closure and post closure requirements, and evaluate the reasonableness of the engineering estimates and assumptions. |
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
Denver, Colorado
February 29, 2024
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Managers and Members of Nevada Gold Mines LLC
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the consolidated balance sheets of Nevada Gold Mines LLC and its subsidiaries (together, the Joint Venture) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income, of changes in members’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the consolidated financial statements) (not presented herein). We also have audited the Joint Venture’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Joint Venture as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Joint Venture maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Joint Venture’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Management’s Report on Internal Control over Financial Reporting (not presented herein). Our responsibility is to express opinions on the Joint Venture’s consolidated financial statements and on the Joint Venture’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Joint Venture in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
An entity’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. An entity’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the entity; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the entity are being made only in accordance with authorizations of management and directors of the entity; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the entity’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the Board of Managers (acting in a role equivalent to the audit committee) and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on
the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Annual goodwill impairment assessment
As described in Notes 2 and 7 to the consolidated financial statements of the Joint Venture, the Joint Venture’s goodwill balance was $668 million (at a 100 percent economic interest) as of December 31, 2023. Management conducts an impairment assessment annually in the fourth quarter of each year, and when events or changes in circumstances indicate that the carrying value of a reporting unit exceeds its fair value. During the fourth quarter of 2023, the Joint Venture performed a quantitative assessment of goodwill impairment test for all reporting units. The fair value of a reporting unit is determined through the use of an income approach utilizing discounted estimates of future cash flow models, fair values of mineral resource estimates outside of current business plans and the application of a specific Net Asset Value (NAV) multiple for each reporting unit. The estimated future cash flows used to determine the fair values of reporting units are derived from current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term metal prices. In addition to short-term and long-term metal price assumptions, other assumptions and estimates used in determining the fair values of reporting units include: operating and capital costs, discount rates, NAV multiples, proven and probable mineral reserves and resources, future production levels and the fair value of mineral resource estimates outside of current business plans. Management’s estimates of proven and probable mineral reserves and resources are based on information compiled by qualified persons (management’s specialists).
The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment is a critical audit matter are (i) the significant judgment by management, including the use of management’s specialists, in determining the fair values of the reporting units; (ii) the degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to the assumptions and estimates with respect to short-term and long-term metal prices, operating and capital costs, discount rates, NAV multiples, proven and probable mineral reserves and resources, future production levels and the fair value of mineral resource estimates outside of current business plans; and (iii) the audit effort included the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the assumptions used in management’s valuation of the Joint Venture’s reporting units. These procedures also included, among others: testing management’s process for determining the fair value of the reporting units; evaluating the appropriateness of the discounted estimates of future cash flow models; testing the completeness and accuracy of underlying data used in the models; and evaluating the reasonableness of the assumptions used by management in the estimated fair value of the reporting units. Evaluating the reasonableness of the short-term and long-term metal prices involved comparing those prices to external industry data. Evaluating the reasonableness of operating and capital costs was done by comparing those costs to recent actual operating and capital costs incurred and assessing whether these assumptions were consistent with evidence obtained in other areas of the audit. Evaluating the reasonableness of the NAV multiples was done by comparing the assumptions with relevant market information. The work of management’s specialists was used in performing the procedures to evaluate the reasonableness of the proven and probable mineral reserves and resources, future production levels and the fair value of mineral resource estimates outside of current business plans. As a basis for using this work, the qualifications of management’s specialists were understood and the Joint Venture’s relationship with management’s specialists was assessed. The procedures performed included evaluation of the methods and assumptions used by management’s specialists, tests of the completeness and accuracy of the data used by management’s specialists, and evaluation of their findings. Professionals with specialized skill and knowledge assisted us in evaluating the reasonableness of the discount rates and NAV multiples.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
February 29, 2024
We have served as the Joint Venture’s auditor since 2019.
NEWMONT CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | | | 2023 | | 2022 | | 2021 |
| | | | | (in millions, except per share) |
Sales (Note 5) | | | | | $ | 11,812 | | | $ | 11,915 | | | $ | 12,222 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Costs applicable to sales (1) | | | | | 6,699 | | | 6,468 | | | 5,435 | |
Depreciation and amortization | | | | | 2,108 | | | 2,185 | | | 2,323 | |
Reclamation and remediation (Note 6) | | | | | 1,533 | | | 921 | | | 1,846 | |
Exploration | | | | | 265 | | | 231 | | | 209 | |
Advanced projects, research and development | | | | | 200 | | | 229 | | | 154 | |
General and administrative | | | | | 299 | | | 276 | | | 259 | |
Impairment charges (Note 7) | | | | | 1,891 | | | 1,320 | | | 25 | |
Loss on assets held for sale (Note 1) | | | | | — | | | — | | | 571 | |
| | | | | | | | | |
Other expense, net (Note 8) | | | | | 517 | | | 82 | | | 143 | |
| | | | | 13,512 | | | 11,712 | | | 10,965 | |
Other income (expense): | | | | | | | | | |
| | | | | | | | | |
Other income (loss), net (Note 9) | | | | | (88) | | | (27) | | | 125 | |
Interest expense, net of capitalized interest of $89, $69 and $38, respectively | | | | | (243) | | | (227) | | | (274) | |
| | | | | (331) | | | (254) | | | (149) | |
Income (loss) before income and mining tax and other items | | | | | (2,031) | | | (51) | | | 1,108 | |
Income and mining tax benefit (expense) (Note 10) | | | | | (526) | | | (455) | | | (1,098) | |
Equity income (loss) of affiliates (Note 15) | | | | | 63 | | | 107 | | | 166 | |
Net income (loss) from continuing operations | | | | | (2,494) | | | (399) | | | 176 | |
Net income (loss) from discontinued operations (Note 1) | | | | | 27 | | | 30 | | | 57 | |
Net income (loss) | | | | | (2,467) | | | (369) | | | 233 | |
Net loss (income) attributable to noncontrolling interests (Note 1) | | | | | (27) | | | (60) | | | 933 | |
Net income (loss) attributable to Newmont stockholders | | | | | $ | (2,494) | | | $ | (429) | | | $ | 1,166 | |
| | | | | | | | | |
Net income (loss) attributable to Newmont stockholders: | | | | | | | | | |
Continuing operations | | | | | $ | (2,521) | | | $ | (459) | | | $ | 1,109 | |
Discontinued operations | | | | | 27 | | | 30 | | | 57 | |
| | | | | $ | (2,494) | | | $ | (429) | | | $ | 1,166 | |
| | | | | | | | | |
Weighted average common shares: | | | | | | | | | |
Basic | | | | | 841 | | | 794 | | | 799 | |
Effect of employee stock-based awards | | | | | — | | | 1 | | | 2 | |
Diluted | | | | | 841 | | | 795 | | | 801 | |
| | | | | | | | | |
Net income (loss) per common share: | | | | | | | | | |
Basic: | | | | | | | | | |
Continuing operations | | | | | $ | (3.00) | | | $ | (0.58) | | | $ | 1.39 | |
Discontinued operations | | | | | 0.03 | | | 0.04 | | | 0.07 | |
| | | | | $ | (2.97) | | | $ | (0.54) | | | $ | 1.46 | |
Diluted: (2) | | | | | | | | | |
Continuing operations | | | | | $ | (3.00) | | | $ | (0.58) | | | $ | 1.39 | |
Discontinued operations | | | | | 0.03 | | | 0.04 | | | 0.07 | |
| | | | | $ | (2.97) | | | $ | (0.54) | | | $ | 1.46 | |
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)For the years ended December 31, 2023 and 2022, potentially dilutive shares were excluded in the computation of diluted loss per common share attributable to Newmont stockholders as they were antidilutive.
The accompanying notes are an integral part of these Consolidated Financial Statements.
NEWMONT CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| | | | | | | | | | | | | | | | | | | | | |
| | | Year Ended December 31, |
| | | | | 2023 | | 2022 | | 2021 |
| | | | | (in millions) |
Net income (loss) | | | | | $ | (2,467) | | | $ | (369) | | | $ | 233 | |
Other comprehensive income (loss): | | | | | | | | | |
Change in marketable securities, net of tax | | | | | — | | | (3) | | | 2 | |
Foreign currency translation adjustments | | | | | (5) | | | 7 | | | 2 | |
Change in pension and other post-retirement benefits, net of tax | | | | | (9) | | | 139 | | | 71 | |
Change in cash flow hedges, net of tax | | | | | (1) | | | 19 | | | 8 | |
Other comprehensive income (loss) | | | | | (15) | | | 162 | | | 83 | |
Comprehensive income (loss) | | | | | $ | (2,482) | | | $ | (207) | | | $ | 316 | |
| | | | | | | | | |
Comprehensive income (loss) attributable to: | | | | | | | | | |
Newmont stockholders | | | | | $ | (2,509) | | | $ | (267) | | | $ | 1,249 | |
Noncontrolling interests | | | | | 27 | | | 60 | | | (933) | |
| | | | | $ | (2,482) | | | $ | (207) | | | $ | 316 | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
NEWMONT CORPORATION
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | |
| At December 31, 2023 | | At December 31, 2022 |
| (in millions, except per share) |
ASSETS | | | |
Cash and cash equivalents | $ | 3,002 | | | $ | 2,877 | |
Time deposits and other investments (Note 15) | 23 | | | 880 | |
Trade receivables (Note 5) | 734 | | | 366 | |
Inventories (Note 16) | 1,663 | | | 979 | |
Stockpiles and ore on leach pads (Note 17) | 979 | | | 774 | |
| | | |
Other receivables | 493 | | | 324 | |
Derivative assets (Note 14) | 198 | | | 12 | |
Other current assets | 420 | | | 303 | |
| | | |
Current assets | 7,512 | | | 6,515 | |
Property, plant and mine development, net (Note 18) | 37,563 | | | 24,073 | |
Investments (Note 15) | 4,143 | | | 3,278 | |
Stockpiles and ore on leach pads (Note 17) | 1,935 | | | 1,716 | |
Deferred income tax assets (Note 10) | 268 | | | 173 | |
Goodwill (Note 19) | 3,001 | | | 1,971 | |
Derivative assets (Note 14) | 444 | | | 196 | |
Other non-current assets | 640 | | | 560 | |
| | | |
Total assets | $ | 55,506 | | | $ | 38,482 | |
| | | |
LIABILITIES | | | |
Accounts payable | $ | 960 | | | $ | 633 | |
Employee-related benefits (Note 11) | 551 | | | 399 | |
Income and mining taxes | 88 | | | 199 | |
Lease and other financing obligations (Note 21) | 114 | | | 96 | |
Debt (Note 20) | 1,923 | | | — | |
Other current liabilities (Note 22) | 2,362 | | | 1,599 | |
Current liabilities | 5,998 | | | 2,926 | |
Debt (Note 20) | 6,951 | | | 5,571 | |
Lease and other financing obligations (Note 21) | 448 | | | 465 | |
Reclamation and remediation liabilities (Note 6) | 8,167 | | | 6,578 | |
Deferred income tax liabilities (Note 10) | 2,987 | | | 1,809 | |
Employee-related benefits (Note 11) | 655 | | | 342 | |
Silver streaming agreement (Note 5) | 779 | | | 828 | |
Other non-current liabilities (Note 22) | 316 | | | 430 | |
| | | |
Total liabilities | 26,301 | | | 18,949 | |
| | | |
Commitments and contingencies (Note 25) | | | |
| | | |
EQUITY | | | |
Common stock - $1.60 par value; | 1,854 | | | 1,279 | |
Authorized - 2,550 million and 1,280 million shares, respectively | | | |
Outstanding shares - 1,152 million and 793 million shares, respectively | | | |
Treasury stock - 7 million and 6 million shares, respectively | (264) | | | (239) | |
Additional paid-in capital | 30,419 | | | 17,369 | |
Accumulated other comprehensive income (loss) (Note 23) | 14 | | | 29 | |
(Accumulated deficit) Retained earnings | (2,996) | | | 916 | |
Newmont stockholders' equity | 29,027 | | | 19,354 | |
Noncontrolling interests | 178 | | | 179 | |
Total equity | 29,205 | | | 19,533 | |
Total liabilities and equity | $ | 55,506 | | | $ | 38,482 | |
The accompanying notes are an integral part of these Consolidated Financial Statements.
NEWMONT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
| (in millions) |
Operating activities: | | | | | |
Net income (loss) | $ | (2,467) | | | $ | (369) | | | $ | 233 | |
Adjustments: | | | | | |
Depreciation and amortization | 2,108 | | | 2,185 | | | 2,323 | |
Impairment charges (Note 7) | 1,891 | | | 1,320 | | | 25 | |
Loss on assets held for sale (Note 1) | — | | | — | | | 571 | |
Net loss (income) from discontinued operations (Note 1) | (27) | | | (30) | | | (57) | |
Reclamation and remediation | 1,506 | | | 892 | | | 1,827 | |
(Gain) loss on asset and investment sales, net | 197 | | | (35) | | | (212) | |
Deferred income taxes (Note 10) | (104) | | | (278) | | | (109) | |
Stock-based compensation (Note 12) | 80 | | | 73 | | | 72 | |
Change in fair value of investments (Note 9) | 47 | | | 46 | | | 135 | |
| | | | | |
Charges from pension settlement (Note 11) | 9 | | | 137 | | | 4 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Other non-cash adjustments | 27 | | | 98 | | | (5) | |
Net change in operating assets and liabilities (Note 24) | (513) | | | (841) | | | (541) | |
Net cash provided by (used in) operating activities of continuing operations | 2,754 | | | 3,198 | | | 4,266 | |
Net cash provided by (used in) operating activities of discontinued operations (Note 1) | 9 | | | 22 | | | 13 | |
Net cash provided by (used in) operating activities | 2,763 | | | 3,220 | | | 4,279 | |
| | | | | |
Investing activities: | | | | | |
Additions to property, plant and mine development | (2,666) | | | (2,131) | | | (1,653) | |
Maturities of investments | 1,363 | | | 93 | | | — | |
Acquisitions, net (1) | 668 | | | (15) | | | (328) | |
Purchases of investments | (551) | | | (940) | | | (59) | |
Proceeds from sales of investments | 234 | | | 171 | | | 194 | |
Contributions to equity method investees | (108) | | | (194) | | | (150) | |
Return of investment from equity method investees | 36 | | | 62 | | | 18 | |
| | | | | |
Proceeds from sales of mining operations and other assets, net | — | | | 16 | | | 84 | |
Other | 22 | | | (45) | | | 26 | |
| | | | | |
| | | | | |
Net cash provided by (used in) investing activities | (1,002) | | | (2,983) | | | (1,868) | |
| | | | | |
Financing activities: | | | | | |
Dividends paid to common stockholders | (1,415) | | | (1,746) | | | (1,757) | |
Distributions to noncontrolling interests | (150) | | | (191) | | | (200) | |
Funding from noncontrolling interests | 138 | | | 117 | | | 100 | |
Payments on lease and other financing obligations (Note 21) | (67) | | | (66) | | | (73) | |
Payments for Norte Abierto deferred payment obligation | (64) | | | (8) | | | (26) | |
Payments for withholding of employee taxes related to stock-based compensation | (25) | | | (39) | | | (32) | |
Acquisition of noncontrolling interests (Note 1) | — | | | (348) | | | — | |
Repayment of debt | — | | | (89) | | | (1,382) | |
Proceeds from issuance of debt, net (Note 20) | — | | | — | | | 992 | |
Repurchases of common stock (Note 2) | — | | | — | | | (525) | |
| | | | | |
| | | | | |
Other | (20) | | | 14 | | | (55) | |
Net cash provided by (used in) financing activities | (1,603) | | | (2,356) | | | (2,958) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2) | | | (30) | | | (8) | |
Net change in cash, cash equivalents and restricted cash | 156 | | | (2,149) | | | (555) | |
Cash, cash equivalents and restricted cash at beginning of period | 2,944 | | | 5,093 | | | 5,648 | |
Cash, cash equivalents and restricted cash at end of period | $ | 3,100 | | | $ | 2,944 | | | $ | 5,093 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
NEWMONT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
| (in millions) |
Reconciliation of cash, cash equivalents and restricted cash: | | | | | |
Cash and cash equivalents | $ | 3,002 | | | $ | 2,877 | | | $ | 4,992 | |
Restricted cash included in Other current assets | 11 | | | 1 | | | 2 | |
Restricted cash included in Other non-current assets | 87 | | | 66 | | | 99 | |
Total cash, cash equivalents and restricted cash | $ | 3,100 | | | $ | 2,944 | | | $ | 5,093 | |
| | | | | |
Supplemental cash flow information: | | | | | |
Income and mining taxes paid, net of refunds | $ | 794 | | | $ | 1,122 | | | $ | 1,534 | |
Interest paid, net of amounts capitalized | $ | 228 | | | $ | 172 | | | $ | 229 | |
____________________________
(1)Acquisitions, net is primarily related to the cash acquired in the Newcrest transaction for the year ended December 31, 2023, and the asset acquisition of the remaining 85.1% of GT Gold for the year ended December 31, 2021. Refer to Note 1 for additional information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
NEWMONT CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in millions, except per share)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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 (2) |
| 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) | — | | | — | | | — | | | — | | | — | | | — | | | 1,166 | | | (947) | | | 219 | | | 14 | |
Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | 83 | | | — | | | — | | | 83 | | | — | |
Dividends declared (1) | — | | | — | | | — | | | — | | | — | | | — | | | (1,764) | | | — | | | (1,764) | | | — | |
Distributions declared to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (200) | | | (200) | | | — | |
Cash calls requested from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 101 | | | 101 | | | — | |
Repurchase and retirement of common stock | (9) | | | (15) | | | — | | | — | | | (207) | | | — | | | (306) | | | — | | | (528) | | | — | |
Withholding of employee taxes related to stock-based compensation | — | | | — | | | (1) | | | (32) | | | — | | | — | | | — | | | — | | | (32) | | | — | |
Stock options exercised | — | | | — | | | — | | | — | | | 17 | | | — | | | — | | | — | | | 17 | | | — | |
Stock-based awards and related share issuances | 2 | | | 4 | | | — | | | — | | | 68 | | | — | | | — | | | — | | | 72 | | | — | |
Balance at December 31, 2021 | 797 | | | 1,276 | | | (5) | | | (200) | | | 17,981 | | | (133) | | | 3,098 | | | (209) | | | 21,813 | | | 48 | |
Net income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | (429) | | | 60 | | | (369) | | | — | |
Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | 162 | | | — | | | — | | | 162 | | | — | |
Dividends declared (1) | — | | | — | | | — | | | — | | | — | | | — | | | (1,753) | | | — | | | (1,753) | | | — | |
Distributions declared to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (191) | | | (191) | | | — | |
Cash calls requested from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 120 | | | 120 | | | — | |
Withholding of employee taxes related to stock-based compensation | — | | | — | | | (1) | | | (39) | | | — | | | — | | | — | | | — | | | (39) | | | — | |
Acquisition of non-controlling interests | — | | | — | | | — | | | — | | | (699) | | | — | | | — | | | 399 | | | (300) | | | — | |
Reclassification of contingently redeemable non-controlling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (48) | |
Stock options exercised | — | | | — | | | — | | | — | | | 14 | | | — | | | — | | | — | | | 14 | | | — | |
Stock-based awards and related share issuances | 2 | | | 3 | | | — | | | — | | | 73 | | | — | | | — | | | — | | | 76 | | | — | |
Balance at December 31, 2022 | 799 | | | 1,279 | | | (6) | | | (239) | | | 17,369 | | | 29 | | | 916 | | | 179 | | | 19,533 | | | — | |
Net income (loss) | — | | | — | | | — | | | — | | | — | | | — | | | (2,494) | | | 27 | | | (2,467) | | | — | |
Other comprehensive income (loss) | — | | | — | | | — | | | — | | | — | | | (15) | | | — | | | — | | | (15) | | | — | |
Shares issued for Newcrest transaction | 358 | | | 572 | | | — | | | — | | | 12,977 | | | — | | | — | | | — | | | 13,549 | | | — | |
Dividends declared (1) | — | | | — | | | — | | | — | | | — | | | — | | | (1,418) | | | — | | | (1,418) | | | — | |
Distributions declared to noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (156) | | | (156) | | | — | |
Cash calls requested from noncontrolling interests | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 128 | | | 128 | | | — | |
| | | | | | | | | | | | | | | | | | | |
Withholding of employee taxes related to stock-based compensation | — | | | — | | | (1) | | | (25) | | | — | | | — | | | — | | | — | | | (25) | | | — | |
| | | | | | | | | | | | | | | | | | | |
Stock-based awards and related share issuances | 2 | | | 3 | | | — | | | — | | | 73 | | | — | | | — | | | — | | | 76 | | | — | |
Balance at December 31, 2023 | 1,159 | | | $ | 1,854 | | | (7) | | | $ | (264) | | | $ | 30,419 | | | $ | 14 | | | $ | (2,996) | | | $ | 178 | | | $ | 29,205 | | | $ | — | |
____________________________ (1)Cash dividends paid per common share was $1.60, $2.20 and $2.20 for 2023, 2022 and 2021, respectively. Dividends declared and dividends paid to common stockholders differ by $3, $7, and $7 for 2023, 2022 and 2021, respectively, due to timing.
(2)Sumitomo held a 5% interest in Yanacocha at December 31, 2021 and had the option to require Yanacocha to repurchase their interest for $48 if certain conditions were not met. The Company purchased Sumitomo's 5% interest during 2022. Refer to Note 1 for further information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 1 THE COMPANY
Newmont Corporation and its affiliates and subsidiaries (collectively, “Newmont,” “we,” “us” or the “Company”) predominantly operate in the mining industry, focused on the production of and exploration for gold properties, some of which may contain copper, silver, zinc, lead or other metals. The Company has significant operations and/or assets in the United States (“U.S.”), Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The cash flow and profitability of the Company’s operations are significantly affected by the market price of gold, copper, silver, lead and zinc. The prices of gold, copper, silver, lead and zinc are affected by numerous factors beyond the Company’s control.
Planned Divestiture of Non-core Assets (Subsequent Event)
Based on a comprehensive review of the Company’s portfolio of assets following the Newcrest acquisition, the Company’s Board of Directors approved a portfolio optimization program to divest six non-core assets and a development project in February 2024. The non-core assets to be divested include Akyem, CC&V, Éléonore, Porcupine, Musselwhite, Telfer, and a development project in Canada. In February 2024, the Company concluded that these non-core assets and the development project met the accounting requirements to be presented as Held for Sale in the first quarter of 2024, based on progress made through our active sales program and management’s expectation that the sale is probable and will be completed within 12 months. As of December 31, 2023, the aggregate net book value of the non-core assets and the development project was $3,419.
Newcrest Transaction
On November 6, 2023, the Company completed its business combination transaction with Newcrest Mining Limited, a public Australian mining company limited by shares ("Newcrest"), whereby Newmont, through Newmont Overseas Holdings Pty Ltd, an Australian proprietary company limited by shares (“Newmont Sub”), acquired all of the ordinary shares of Newcrest in a fully stock transaction for total non-cash consideration of $13,549. Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont (such acquisition, the “Newcrest transaction”). The combined company continues to be traded on the New York Stock Exchange under the ticker NEM. The combined company is also listed on the Toronto Stock Exchange under the ticker NGT, on the Australian Securities Exchange under the ticker NEM, and on the Papua New Guinea Securities Exchange under the ticker NEM. Refer to Note 3 for further information.
Segment Information Recast
In January 2023, Newmont reassessed and revised its operating strategies and the accountabilities of the senior leadership team in light of the continuing volatile and uncertain market conditions, and in November 2023, the Company completed its acquisition of Newcrest (refer to Note 3 for further information). Following these changes, the Company reevaluated its segments to reflect the mining operations acquired and certain changes in the financial information regularly reviewed by Newmont's Chief Operating Decision Maker ("CODM"). As a result, the Company determined that its reportable segments were each of its 17 mining operations that it manages, which includes its 70.0% proportionate interest in Red Chris, and its 38.5% proportionate interest in Nevada Gold Mines ("NGM") which it does not directly manage. Segment results for the prior periods have been recast to reflect the change in reportable segments.
Loss on Assets Held for Sale
In the third quarter of 2021, the Company entered into a binding agreement to sell certain equipment and assets originally acquired for the Conga project in Peru within Corporate and Other (the "Conga mill assets") for total cash proceeds of $68. Pursuant to the terms of the agreement, the sale is expected to close upon the delivery of the assets and receipt of the final payment at which time title and control of the assets will transfer. Upon entering the binding agreement, the Conga mill assets were reclassified as held for sale and remeasured at fair value less costs to sell. As a result, a loss of $571 was recognized and included in Loss on assets held for sale on the Consolidated Statements of Operations for the year ended December 31, 2021. As of December 31, 2023, the Company has received payments of $57 included in Other current liabilities on the Consolidated Balance Sheets.
GT Gold
In May 2021, the Company acquired the remaining 85.1% interest of GT Gold Corporation (“GT Gold”) for cash consideration, including related transaction costs, of $326. Immediately prior to the acquisition, the Company held a 14.9% equity interest in GT Gold which was accounted for as a marketable equity security. The asset acquisition resulted in total consideration of $378, including non-cash consideration of $52. The non-cash consideration represents the fair value of the 14.9% GT Gold investment held by the Company on the acquisition date. The total consideration paid was allocated to the acquired assets and assumed liabilities based on their estimated fair values on the acquisition date, which primarily consisted of mineral interests of $590 and a related deferred tax liability of $211.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Noncontrolling Interests
Merian
Newmont has a 75% economic interest in Suriname Gold project C.V. (“Merian”), with the remaining interests held by Staatsolie Maatschappij Suriname N.V. (“Staatsolie”), a company wholly owned by the Republic of Suriname. Newmont consolidates Merian, through its wholly-owned subsidiary, Newmont Suriname LLC., in its Consolidated Financial Statements as the primary beneficiary of Merian, which is a variable interest entity. For the years ended December 31, 2023, 2022 and 2021, the Company recognized $(27), $(59) and $(81), respectively, of Net loss (income) attributable to noncontrolling interests related to Merian.
Yanacocha
At December 31, 2021, Newmont held a 51.35% ownership interest in Minera Yanacocha S.R.L ("Yanacocha") and consolidated Yanacocha in its Consolidated Financial Statements under the voting interest model. Of the remaining interest, 43.65% was held by Compañia de Minas Buenaventura S.A.A. (“Buenaventura”) and 5% was held by Summit Global Management II VB, a subsidiary of Sumitomo Corporation (“Sumitomo”). Sumitomo had acquired its 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. Sumitomo exercised this option, and in June 2022, the Company acquired the remaining 5% ownership interest held by Sumitomo in exchange for cash consideration of $48.
Additionally in 2022, the Company completed the acquisition of Buenaventura’s ownership in Yanacocha, resulting in the Company holding 100% ownership interest in Yanacocha. The Company acquired 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.
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 in 2022, the Company recognized a $45 loss on sale of its equity interest, included in Other income (loss), net.
For the years ended December 31, 2022 and 2021, the Company recognized $(1) and $1,014, respectively, of Net loss (income) attributable to noncontrolling interests related to Yanacocha. No Net loss (income) attributable to noncontrolling interests related to Yanacocha was recognized for the year ended December 31, 2023, as the Company held 100% ownership interest in Yanacocha.
Discontinued Operations
Net income (loss) from discontinued operations includes results related to the Batu Hijau and Elang contingent consideration assets associated with the sale of PT Newmont Nusa Tenggara in 2016. For the years ended December 31, 2023, 2022 and 2021, the Company recorded income of $27, $30 and $57, net of a tax expense of $5, $4 and $10, respectively, within discontinued operations. The Company received $9, $22 and $13 for the years ended December 31, 2023, 2022 and 2021, respectively, related to discontinued operations. Refer to contingent consideration assets in Note 14 for additional information.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and Uncertainties
As a global mining company, the Company’s revenue, profitability and future rate of growth are substantially dependent on prevailing metal prices, primarily for gold, but also for copper, silver, lead, and zinc. Historically, the commodity markets have been very volatile, and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, access to capital and on the quantities of reserves that the Company can economically produce. The carrying value of the Company’s Property, plant and mine development, net; Inventories; Stockpiles and ore on leach pads; Investments; certain Derivative assets; Deferred income tax assets; and Goodwill are particularly sensitive to the outlook for commodity prices. A decline in the Company’s price outlook from current levels could result in material impairment charges related to these assets.
Our global operations expose us to risks associated with public health crises, including epidemics and pandemics such as COVID-19, and geopolitical and macroeconomic pressures such as the Russian invasion of Ukraine. The Company continues to experience the impacts from recent geopolitical and macroeconomic pressures. With the resulting volatile environment, the Company continues to monitor inflationary conditions, the effects of certain countermeasures taken by central banks, and the potential for further supply chain disruptions as well as an uncertain and evolving labor market.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following factors could have further potential short- and, possibly, long-term material adverse impacts on the Company including, but not limited to, volatility in commodity prices and the prices for gold and other metals, changes in the equity and debt markets or country specific factors adversely impacting discount rates, significant cost inflation impacts on production, capital and asset retirement costs, logistical challenges, workforce interruptions and financial market disruptions, energy market disruptions, as well as potential impacts to estimated costs and timing of projects. In light of these challenging conditions, the Company recorded long-lived asset and goodwill impairment charges at December 31, 2023. Refer to Note 7 for further information.
Additionally, as further response to the current market conditions, high inflation rates, the rising prices for commodities and raw materials, prolonged supply chain disruptions, competitive labor markets, and consideration of capital allocation, in the second quarter of 2023 the Company announced the deferral of the full-funds investment decision for the Yanacocha Sulfides project in Peru for at least two years to the second half of 2026. While the Company has extended the timeline of the full-funds decision, assessment of the project remains a priority in Peru as the Company continued to advance engineering and long-term procurement activities. The delay of the Yanacocha Sulfides project is intended to focus funds on current operations and other capital commitments while management assesses execution and project options, up to and including transitioning Yanacocha operations into full closure. To the extent that assessment determines that the project is no longer sufficiently profitable or economically feasible under the Company’s internal requirements, it would result in negative modifications to the Company's proven and probable reserves. Additionally, should the Company ultimately decide to forgo the development of Yanacocha Sulfides, the current carrying value of the assets under construction and other long-lived assets of the Yanacocha operations could become impaired and the timing of certain closure activities would be accelerated. As of December 31, 2023, the Yanacocha operations have total long-lived assets of approximately $1,269, inclusive of approximately $911 of assets under construction related to Yanacocha Sulfides. Refer also to the Company's risk factors under the titles “Estimates relating to projects and mine plans of existing operations are uncertain and we may incur higher costs and lower economic returns than estimated ” and ”Our long-lived assets and goodwill could become impaired, which could have a material non-cash adverse effect on our results of operations” included in Part I, Item 1A, Risk Factors, for further information.
Additionally, the Company continues to hold the Conga project in Peru, which we do not currently anticipate developing in the next ten years as we continue to assess Yanacocha Sulfides; accordingly, the Conga project remains in care and maintenance. Should we be unable to develop the Conga project or conclude that future development is not in the best interest of the business, we may consider other alternatives for the project, which may result in a future impairment charge for the remaining assets. The total assets at Conga were $895 and $900 at December 31, 2023 and 2022.
On June 7, 2023, the National Union of Mine and Metal Workers of the Mexican Republic (the "Union") notified the Company of a strike action. In response to the strike notice, the Company suspended operations at Peñasquito. Operations remained suspended throughout the third quarter of 2023. On October 13, 2023, the Company reached a definitive agreement with the Union that also received approval from the Mexican Labor Court. Per the agreement, the Company will pay Peñasquito workers a fixed amount equivalent to approximately 60% of wages for the duration of the strike, and an additional bonus of two months’ wages to be paid out in the second quarter of 2024, given that the Peñasquito mine reported no profit in 2023 as a consequence of the strike. Additionally, as a part of a separate annual negotiation under the Collective Bargaining Agreement, the Company agreed to an annual salary increase of 8% effective as of August 1, 2023, which is in line with the Mexican mining industry wage increases for 2023. Operations at Peñasquito resumed in the fourth quarter of 2023.
The Cerro Negro mine, located in Argentina, is a USD functional currency entity. Argentina’s central bank has 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 and restricting payments to foreign-related entities denominated in foreign currency, such as dividends or distributions to the parent and related companies. We continue to monitor the foreign currency exposure risk and the limitations of repatriating cash to the United States. Currently, these currency controls are not expected to impact the Company's ability to repay its debt obligations or declare dividends.
Use of Estimates
The Company’s Consolidated Financial Statements have been prepared in accordance with GAAP. The preparation of the Company’s Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. 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.
The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of-production amortization calculations; environmental remediation, reclamation and closure obligations; estimates of recoverable gold and other minerals in stockpile and leach pad inventories; estimates of fair value for certain reporting units and asset impairments (including impairments of long-lived assets, goodwill and investments); write-downs of inventory, stockpiles and ore on leach pads to net realizable value; post-employment, post-retirement and other employee benefit liabilities; valuation allowances for deferred tax assets; provisional amounts related to income tax effects of newly enacted tax laws; provisional amounts related to uncertain tax positions; valuation of assets acquired and liabilities
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
assumed in a business combination; reserves for contingencies and litigation; and the fair value and accounting treatment of financial instruments including marketable and other equity securities and derivative instruments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will differ from those amounts estimated in these financial statements.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Newmont Corporation, more-than-50%-owned subsidiaries that it controls and variable interest entities where it is the primary beneficiary. The proportionate consolidation method is used for investments in which the Company has an undivided interest in the assets, liabilities and operations and for certain unincorporated joint ventures in the extractive industry. All significant intercompany balances and transactions have been eliminated. Equity method accounting is applied for certain entities where the Company does not have control, but does have significant influence over the activities that most significantly impact the entities’ operations and financial performance. The functional currency for the majority of the Company’s operations is the U.S. dollar.
The Company follows the ASC guidance for identification and reporting of entities over which control is achieved through means other than voting rights. The guidance defines such entities as Variable Interest Entities.
Business Combination and Asset Acquisition Accounting
The Company applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction should be accounted for as an asset acquisition or business combination.
When an acquisition does not meet the definition of a business combination because either: (i) substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or group of similar identified assets, or (ii) the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, the Company accounts for the acquisition as an asset acquisition. In an asset acquisition, goodwill is not recognized, but rather, any excess purchase consideration over the fair value of the net assets acquired is allocated on a relative fair value basis to the identifiable net assets as of the acquisition date and any direct acquisition-related transaction costs are capitalized as part of the purchase consideration.
When an acquisition is accounted for as a business combination, the Company recognizes and measures the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, while transaction and integration costs related to business combinations are expensed as incurred. Any excess of the purchase consideration in excess of the aggregate fair value of the net tangible and intangible assets acquired, if any, is recorded as goodwill. For material acquisitions, the Company engages independent appraisers to assist with the determination of the fair value of assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business valuation methodologies. An income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired, liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method represents the present value of future cash flows over the life of the asset using discrete financial forecasts, long-term growth rates, appropriate discount rates, and expected future capital requirements. The market valuation method uses prices paid for a similar asset by other purchasers in the market, normalized for any differences between the assets. The cost valuation method is based on the replacement cost of a comparable asset at the time of the acquisition adjusted for depreciation and economic and functional obsolescence of the asset. The fair value of property, plant and mine development is estimated to include the fair value of asset retirement costs of related long-lived tangible assets. During the measurement period, not to exceed one year from the date of acquisition, the Company may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected in the period the adjustment arises.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Cash and cash equivalents are held in overnight bank deposits or are invested in United States Treasury securities and money market securities. Restricted cash is excluded from cash and cash equivalents and is included in other current or non-current assets. Restricted cash is held primarily for the purpose of settling asset retirement obligations.
Time Deposits and Other Investments
The Company's time deposits and other investments primarily include time deposits with an original maturity of more than three months but less than one year. These time deposits are carried at amortized cost. Accrued interest is recorded in Other income (loss), net.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Stockpiles, Ore on Leach Pads and Inventories
As described below, costs that are incurred in or benefit the productive process are accumulated as stockpiles, ore on leach pads and inventories. Stockpiles, ore on leach pads and inventories are carried at the lower of average cost or net realizable value. Net realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the estimated costs to complete production and bring the product to sale. Write-downs of stockpiles, ore on leach pads and inventories to net realizable value are reported as a component of Costs applicable to sales and Depreciation and amortization. The current portion of stockpiles, ore on leach pads and inventories is determined based on the expected amounts to be processed within the next 12 months and utilize the short-term metal price assumption in estimating net realizable value. Stockpiles, ore on leach pads and inventories not expected to be processed within the next 12 months are classified as non-current and utilize the long-term metal price assumption in estimating net realizable value. The major classifications are as follows:
Stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Mine sequencing may result in mining material at a faster rate than can be processed. The Company generally processes the highest ore grade material first to maximize metal production; however, a blend of metal stockpiles may be processed to balance hardness and/or metallurgy in order to maximize throughput and recovery. Processing of lower grade stockpiled ore may continue after mining operations are completed. Sulfide copper ores are subject to oxidation over time which can reduce expected future recoveries. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are added to stockpiles based on current mining costs incurred including applicable overhead and depreciation and amortization relating to mining operations and removed at each stockpile’s average cost per recoverable unit as material is processed. Carrying values are evaluated at least quarterly, in accordance with the above.
Ore on Leach Pads
Ore on leach pads represent ore that has been mined and placed on leach pads where a solution is applied to the surface of the heap to dissolve the gold or silver or extract the copper. Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating to mining operations. Costs are removed from ore on leach pads as ounces or pounds are recovered based on the average cost per estimated recoverable ounce of gold or silver or pound of copper on the leach pad. Estimates of recoverable ore on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching process is complete.
Although the quantities of recoverable metal placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of metal actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, the Company’s operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of metal on its leach pads. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis.
In-process Inventory
In-process inventories represent material that is currently in the process of being converted to a saleable product. Conversion processes vary depending on the nature of the ore and the specific processing facility, but include mill in-circuit, flotation, leach and carbon-in-leach. In-process material is measured based on assays of the material fed into the process and the projected recoveries of the respective processing plants. In-process inventories are valued at the lower of the average cost of the material fed into the process attributable to the source material coming from the mines, stockpiles and/or leach pads, plus the in-process conversion costs, including applicable amortization relating to the process facilities incurred to that point in the process or net realizable value.
Precious Metals Inventory
Precious metals inventories include gold doré and/or gold bullion. Precious metals that result from the Company’s mining and processing activities are valued at the lower of the average cost of the respective in-process inventories incurred prior to the refining process, plus applicable refining costs or net realizable value.
Concentrate Inventory
Concentrate inventories represent gold, silver, lead, zinc and copper concentrate available for shipment or in transit for further processing when the sales process has not been completed. The Company values concentrate inventory at average cost, including an allocable portion of support costs and amortization. Costs are added and removed to the concentrate inventory based on metal in the concentrate and are valued at the lower of average cost or net realizable value.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Materials and Supplies
Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.
Property, Plant and Mine Development
Facilities and Equipment
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and recorded at cost. Facilities and equipment acquired as a part of a finance lease, build-to-suit or other financing arrangement are capitalized and recorded based on the contractual lease terms. The facilities and equipment are depreciated using the straight-line method at rates sufficient to depreciate such capitalized costs over the estimated productive lives of such facilities. These estimated productive lives do not exceed the related estimated mine lives, which are based on proven and probable reserves.
Mine Development
Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and other infrastructure at underground mines. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as Exploration or Advanced projects, research and development expense. Capitalization of mine development project costs that meet the definition of an asset begins once mineralization is classified as proven and probable reserves.
Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed at obtaining additional information on the ore body or converting measured, indicated and inferred resources to proven and probable reserves. All other drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are allocated to inventory costs and then included as a component of Costs applicable to sales.
The cost of removing overburden and waste materials to access the ore body at an open pit mine prior to the production phase are referred to as “pre-stripping costs.” Pre-stripping costs are capitalized during the development of an open pit mine. Where multiple open pits exist at a mining complex utilizing common processing facilities, pre-stripping costs are capitalized at each pit. The removal, production, and sale of de minimis saleable materials may occur during the development phase of an open pit mine and are assigned incremental mining costs related to the removal of that material.
The production phase of an open pit mine commences when saleable minerals, beyond a de minimis amount, are produced. Stripping costs incurred during the production phase of a mine are variable production costs that are included as a component of inventory to be recognized in Costs applicable to sales in the same period as the revenue from the sale of inventory.
Mine development costs are amortized using the units-of-production method based on estimated recoverable ounces or pounds in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over the estimated life of that specific ore block or area.
Underground development costs are capitalized as incurred. Costs incurred before mineralization is classified as proven and probable reserves are expensed and classified as Exploration or Advanced projects, research and development expense. Capitalization of mine development project costs that meet the definition of an asset begins once mineralization is classified as proven and probable reserves.
Mineral Interests
Mineral interests include acquired interests in production, development and exploration stage properties. Mineral interests are capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination. Mineral interests in the development and exploration stage are not amortized until the underlying property is converted to the production stage, at which point the mineral interests are amortized over the estimated recoverable proven and probable reserves.
The value of such assets is primarily driven by the nature and amount of mineral interests believed to be contained in such properties. Production stage mineral interests represent interests in operating properties that contain proven and probable reserves and are amortized using the units-of-production method based on the estimated recoverable ounces or pounds in proven and probable reserves. Development stage mineral interests represent interests in properties under development that contain proven and probable reserves. Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineral resources consisting of (i) mineral resources within pits; mineral resources with insufficient drill spacing to qualify as proven and probable reserves; and mineral resources in close proximity to proven and probable reserves; (ii) around-mine exploration potential not immediately adjacent to existing reserves and mineralization, but located within the immediate mine area; (iii) other mine-related exploration potential that is not part of current resources and is comprised mainly of material outside of the immediate mine area;
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
(iv) greenfield exploration potential that is not associated with any other production, development or exploration stage property, as described above; or (v) any acquired right to explore or extract a potential mineral deposit. The Company’s mineral rights generally are enforceable regardless of whether proven and probable reserves have been established. In certain limited situations, the nature of a mineral right changes from an exploration right to a mining right upon the establishment of proven and probable reserves. The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and valued proven and probable reserves and/or undeveloped mineral resources.
Goodwill
Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business acquisition. Goodwill is allocated to reporting units and tested for impairment annually as of December 31 and when events or changes in circumstances indicate that the carrying value of a reporting unit exceeds its fair value. Each operating mine is considered a distinct reporting unit for purposes of goodwill impairment testing.
The Company may elect to perform a qualitative assessment when it is more likely than not that the fair value of a reporting unit is higher than its carrying value. If the Company determines that it is more likely than not that the fair value is less than the carrying value, a quantitative goodwill impairment test is performed to determine the fair value of the reporting unit. The fair value of a reporting unit is determined using either the income approach utilizing estimates of discounted future cash flows or the market approach utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company recognizes its pro rata share of goodwill and any subsequent goodwill impairment losses recorded by entities that are proportionately consolidated.
The estimated cash flows used to assess the fair value of a reporting unit are derived from the Company’s current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. In addition to short- and long-term metal price assumptions, other assumptions include estimates of commodity-based and other input costs; capital investments; proven and probable mineral reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable mineral reserve estimates; estimated future closure costs; the use of appropriate discount rates; and applicable U.S. dollar long-term exchange rates.
Impairment of Long-lived Assets
The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based on the estimated fair value of the long-lived assets being tested for impairment, and their carrying amounts. Fair value is typically determined through the use of an income approach utilizing estimates of discounted pre-tax future cash flows or a market approach utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements. Occasionally, such as when an asset is held for sale, market prices are used.
The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of the Company’s mining operations are derived from current business plans, which are developed using short-term price forecasts reflective of the current price environment and management’s projections for long-term average metal prices. In addition to short- and long-term metal price assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserve estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable mineral reserve estimates; estimated future closure costs; and the use of appropriate discount rates.
In estimating undiscounted cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of undiscounted cash flows from other asset groups. The Company’s estimates of undiscounted cash flows are based on numerous assumptions and it is possible that actual cash flows may differ significantly from estimates, as actual produced reserves, metal prices, commodity-based and other costs, and closure costs are each subject to significant risks and uncertainties.
Investments
Management classifies investments at the acquisition date and re-evaluates the classification at each balance sheet date and when events or changes in circumstances indicate that there is a change in the Company’s ability to exercise significant influence. The ability to exercise significant influence is typically presumed when the Company possesses 20% or more of the voting interests in the investee. The Company accounts for its investments in stock of other entities over which the Company has significant influence, but not control, using the equity method of accounting. Under the equity method of accounting, the Company increases its investment for contributions made and records its proportionate share of net earnings, declared dividends and partnership distributions based on the most recently available financial statements of the investee. To the extent that there is a basis difference between the amount invested and the underlying equity in the net assets of an equity investment, the Company allocates such differences between tangible and intangible assets. This basis difference is being amortized into Equity income (loss) of affiliates over the remaining estimated useful lives of the underlying tangible and intangible net assets. Equity method investments are included in Investments.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Contributions made to equity method investees at times are in the form of loan agreements. Loans provided to equity method investees that are made based on the Company's proportionate ownership percentage are accounted for as “in-substance capital contributions” and are treated as an increase to the investment. Principal and interest payments received on loans treated as in-substance capital contributions are assessed under the cumulative earnings approach to determine if the distribution received represents a return on capital or a return of capital. Return on capital distributions are recorded as an operating cash flow whereas return of capital distributions are recorded as an investing cash flow. Loans provided to equity method investees that are not made on a proportionate basis are accounted for as a loan receivable and do not increase the investment. Principal payments received on loans not treated as an in-substance capital contribution are accounted for as a reduction to the loan receivable and interest received is recorded as interest income.
The Company evaluates its equity method investments for potential impairment whenever events or changes in circumstances indicate that there is an other-than-temporary decline in the value of the investment. Declines in fair value that are deemed to be other-than-temporary are charged to Other income (loss), net.
Additionally, the Company has certain marketable equity and debt securities and other equity securities. Marketable equity securities are measured primarily at fair value with any changes in fair value recorded in Other income (loss), net. Certain other equity securities are accounted for under the measurement alternative (cost less impairment, adjusted for any qualifying observable price changes) when fair value is not readily determinable. The Company accounts for its restricted marketable debt securities as available-for-sale securities. Unrealized gains and losses on available-for-sale investments, net of taxes, are reported as a component of Accumulated other comprehensive income (loss) in Total equity, unless an impairment is deemed to be credit-related. Credit-related impairment is recognized as an allowance for credit losses on the balance sheet with a corresponding charge to Other income (loss), net.
Derivative Instruments
We hold derivatives for risk management purposes rather than for trading. We use derivatives to mitigate uncertainty and volatility caused by underlying exposures to foreign exchange rates and energy prices. The fair values of all derivative instruments are recognized as assets or liabilities at the balance sheet date and are reported gross.
Financial instruments that meet the definition of a derivative, but are not designated for hedge accounting under ASC 815, are accounted for at fair value using derivative pricing models. Valuation models require a variety of inputs, including long term metal prices, life of mine production profiles, discount rates, and inflation assumptions. These instruments are subsequently remeasured to their fair value at each reporting date with the resulting gain or loss recognized in the Consolidated Statement of Operations.
Cash Flow Hedges
The fair value of derivative contracts qualifying as cash flow hedges are reflected as assets or liabilities in the Consolidated Balance Sheets. The changes in fair value of these hedges are deferred in Accumulated other comprehensive income (loss). Amounts deferred in Accumulated other comprehensive income (loss) are reclassified to income when the hedged transaction has occurred in the same income statement line where the earnings effect of the hedged item is presented. Cash transactions related to the Company’s derivative contracts accounted for as hedges are classified in the same category as the item being hedged in the Consolidated Statements of Cash Flows.
When derivative contracts qualifying as cash flow hedges are settled, accelerated or restructured before the maturity date of the contracts, the related amount in Accumulated other comprehensive income (loss) at the settlement date is deferred and reclassified to earnings, when the originally designated hedged transaction impacts earnings and is presented in the same income statement line item as the earnings effect of the hedged item, unless the underlying hedge transaction becomes probable of not occurring, at which time related amounts in Accumulated other comprehensive income (loss) are reclassified to earnings immediately.
Debt
The Company carries its Senior Notes at amortized cost.
Debt issuance costs and debt premiums and discounts, which are included in Debt, are amortized using the effective interest method over the terms of the respective Senior Notes as a component of Interest expense, net within the Consolidated Statements of Operations.
Gain or loss on extinguishment of debt is recorded as a component of Other income (loss), net upon the extinguishment of a debt instrument and is calculated as the difference between the reacquisition price and net carrying amount of the debt, which includes unamortized debt issuance costs. We evaluate all changes to our debt arrangements to determine whether the changes represent a modification or extinguishment to the old debt arrangement. If a debt instrument is deemed to be modified, we capitalize all new lender fees and expense all third-party fees. If we determine that an extinguishment of one of our debt instruments has occurred, the unamortized financing fees associated with the extinguished instrument are expensed. For the revolving loans, all lender and third-party fees are capitalized, and in the event an amendment reduces the committed capacity under the revolving loans, we expense a portion of any unamortized fees on a pro-rata basis in proportion to the decrease in the committed capacity.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Leases
The Company determines if a contractual arrangement represents or contains a lease at inception. Operating leases are included in Other non-current assets and Other current and non-current liabilities in the Consolidated Balance Sheets. Finance leases are included in Property, plant and mine development, net and current and non-current Lease and other financing obligations in the Consolidated Balance Sheets.
Operating and finance lease right-of-use ("ROU") assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the lease term. Leases acquired in a business combination are also measured based on the present value of the remaining leases payments, as if the acquired lease were a new lease at the acquisition date. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. Operating lease ROU assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.
The Company has lease arrangements that include both lease and non-lease components. The Company accounts for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes. Additionally, for certain lease arrangements that involve leases of similar assets, the Company applies a portfolio approach to effectively account for the underlying ROU assets and lease liabilities.
Common Stock
In July 2021, Newmont filed a shelf registration statement on Form S-3 under which it can issue an indeterminate number or amount of common stock, preferred stock, debt securities, guarantees of debt securities and warrants from time to time at indeterminate prices, subject to the limitations of the Delaware General Corporation Law, the Company's certification of incorporation and bylaws. It also includes the ability to resell an indeterminate amount of common stock, preferred stock and debt securities from time to time upon exercise of warrants or conversion of convertible securities.
Treasury Stock
The Company records repurchases of common shares as Treasury stock at cost and records any subsequent retirements of treasury shares at cost. When treasury shares are retired, the Company’s policy is to allocate the excess of the repurchase price over the par value of shares acquired to both Retained earnings and Additional paid-in capital using settlement-date accounting. The portion allocated to Additional paid-in capital is calculated on a pro rata basis of the shares to be retired and the total shares issued and outstanding as of the date of the retirement.
During the years ended December 31, 2023, 2022 and 2021, the Company repurchased and retired approximately — million, — million and 9 million shares of its common stock for $—, $— and $525, respectively. During the years ended December 31, 2023, 2022 and 2021, the Company withheld 0.6 million, 0.6 million and 0.6 million shares, respectively, for payments of employee withholding taxes related to the vesting of stock awards.
Revenue Recognition
Newmont generates revenue by selling gold, copper, silver, lead, and zinc produced from its mining operations. Refer to Note 4 for further information regarding the Company’s operating segments.
The majority of the Company’s Sales come from the sale of refined gold; however, the end product at the Company’s gold operations is generally doré bars. Doré is an alloy consisting primarily of gold but also containing silver and other metals. Doré is sent to refiners to produce bullion that meets the required market standard of 99.95% gold. Under the terms of the Company’s refining agreements, the doré bars are refined for a fee, and the Company’s share of the refined gold and the separately-recovered silver is credited to its bullion account. Gold from doré bars credited to its bullion account is typically sold to banks or refiners.
A portion of gold sold from certain sites is sold in the form of concentrate. The Company’s Sales also come from the sale of copper, silver, lead, and zinc. Sales from these metals are generally in the form of concentrate, which is sold to smelters for further treatment and refining.
Generally, if a metal expected to be mined represents more than 10% to 20% of the life of mine sales value of all the metal expected to be mined, co-product accounting is applied. When the Company applies co-product accounting at an operation, revenue is recognized for each co-product metal sold, and shared costs applicable to sales are allocated based on the relative sales values of the co-product metals produced. Generally, if metal expected to be mined is less than the 10% to 20% of the life of mine sales value, by-product accounting is applied. Revenues from by-product sales, which are immaterial, are credited to Costs applicable to sales as a by-product credit. Silver, lead and zinc are produced as co-products at Peñasquito. Copper is produced as a co-product at Red Chris,
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Boddington, Cadia, and Telfer. Aside from the co-product sales at Red Chris, Peñasquito, Boddington, Cadia, and Telfer, copper and silver produced at other Newmont sites are by-product metals.
Gold Sales from Doré Production
The Company recognizes revenue for gold from doré production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs upon transfer of gold bullion credits as this is the point at which the customer obtains control the ability to direct the use and obtains substantially all of the remaining benefits of ownership of the asset.
The Company generally recognizes the sale of gold bullion credits when the credits are delivered to the customer. The transaction price is determined based on the agreed upon market price and the number of ounces delivered. Payment is due upon delivery of gold bullion credits to the customer’s account.
Sales from Concentrate Production
The Company recognizes revenue for gold, copper, silver, lead, and zinc from concentrate production, net of treatment and refining charges, when it satisfies the performance obligation of transferring control of the concentrate to the customer. This generally occurs as material passes over the vessel's rail at the port of loading based on the date from the bill of lading, as the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from the material and the customer has the risk of loss. Newmont has elected to account for shipping and handling costs for concentrate contracts as fulfillment activities and not as promised goods or services; therefore these activities are not considered separate performance obligations.
The Company generally sells metal concentrate based on the monthly average market price for a future month, dependent on the relevant contract, following the month in which the delivery to the customer takes place. The amount of revenue recognized for concentrates is initially recorded on a provisional basis based on the forward prices for the estimated month of settlement and the Company’s estimated metal quantities based on assay data. The Company’s sales based on a provisional price 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 concentrates at the forward price at the time of sale. The embedded derivative, which is not designated for hedge accounting, is primarily marked to market through Sales each period prior to final settlement. The Company also adjusts estimated metal quantities used in computing provisional sales using new information and assay data from the smelter as it is received (if any).
A provisional payment is generally due upon delivery of the concentrate to the customer. Final payment is due upon final settlement of price and quantity with the customer.
The principal risks associated with recognition of sales on a provisional basis include metal price fluctuations and updated quantities between the date the sale is recorded and the date of final settlement. If a significant decline in metal prices occurs, or assay data results in a significant change in quantity between the provisional pricing date and the final settlement date, it is reasonably possible that the Company could be required to return a portion of the provisional payment received on the sale. Refer to Note 5 for additional information.
Income and Mining Taxes
The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the financial reporting basis of the Company’s liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect. The Company derives its deferred income tax charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. The financial statement effects of changes in tax law are recorded as discrete items in the period enacted as part of income tax expense or benefit from continuing operations, regardless of the category of income or loss to which the deferred taxes relate. The Company determines if the assessment of a particular income tax effect is “complete.” Those effects for which the accounting is determined to be complete are reported in the enactment period financial statements. The Company has exposure to the impact of foreign exchange fluctuations on tax positions in certain jurisdictions, such movements are recorded within Income and mining tax benefit (expense) related to deferred income tax assets and liabilities, as well as non-current uncertain tax positions, while foreign exchange fluctuations impacting current tax positions are recorded within Other income (loss), net as foreign currency exchange gains (losses). With respect to the earnings that the Company derives from the operations of its consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis of such equity) of these consolidated companies.
Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes. As such, taxes are based on a percentage of mining profits.
Newmont’s operations are in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Some of these tax regimes are defined by contractual agreements with the local government, while others are defined by general tax laws and regulations. Newmont and its subsidiaries are subject to reviews of its income tax filings and other tax payments, and disputes can arise with the taxing authorities over the interpretation of its contracts or laws. The Company recognizes potential
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
liabilities and records tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether it is more likely than not, and the extent to which, additional taxes will be due. The Company adjusts these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the tax liabilities. If the Company’s estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in Income and mining tax benefit (expense). In certain jurisdictions, Newmont must pay a portion of the disputed amount to the local government in order to formally appeal the assessment. Such payment is recorded as a receivable if Newmont believes the amount is collectible.
Valuation of Deferred Tax Assets
The Company’s deferred income tax assets include certain future tax benefits. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. The Company reviews the likelihood that it will realize the benefit of its deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.
Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be objectively verified. The Company looks to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on the evaluation date, recent pretax losses and/or expectations of future pretax losses. Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not limited to:
•Earnings history;
•Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices;
•The duration of statutory carry forward periods;
•Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary difference;
•Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and
•The sensitivity of future forecasted results to commodity prices and other factors.
Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable, such as cumulative losses in recent years. The Company utilizes a rolling twelve quarters of pre-tax income or loss as a measure of its cumulative results in recent years. However, a cumulative three year loss is not solely determinative of the need for a valuation allowance. The Company also considers all other available positive and negative evidence in its analysis.
Reclamation and Remediation Costs
Reclamation obligations associated with operating and non-operating mine sites are recognized when an obligation is incurred and the fair value can be reasonably estimated. Fair value is measured as the present value of expected cash flow estimates, after considering inflation, our credit-adjusted risk-free rates and a market risk premium appropriate for our operations. The liability is accreted over time through periodic charges to earnings. In addition, the asset retirement cost is capitalized as part of the asset’s carrying value and amortized over the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs. Changes in reclamation estimates at mines that are not currently operating, as the mine or portion of the mine site has entered the closure phase and has no substantive future economic value, are reflected in earnings in the period an estimate is revised. The estimated reclamation obligation is based on when spending for an existing disturbance is expected to occur. Costs included in estimated asset retirement obligations are discounted to their present value as cash flows are readily estimable over a period of up to fifty years. The Company reviews, on an annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for asset retirement obligations.
Remediation costs are accrued when it is probable that an obligation has been incurred and the cost can be reasonably estimated. Such cost estimates may include ongoing care, maintenance and monitoring costs. Changes in remediation estimates at non-operating mines are reflected in earnings in the period an estimate is revised. Water treatment costs included in environmental remediation obligations are discounted to their present value as cash flows are readily estimable over a period up to fifty years.
Foreign Currency
The functional currency for the majority of the Company’s operations is the U.S. dollar. Transaction gains and losses related to foreign currency denominated monetary assets and liabilities where the functional currency is the U.S. dollar are remeasured at current exchange rates and the resulting adjustments are included in Other income (loss), net. The financial statements of our foreign entities
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
with functional currencies other than the U.S. dollar are translated into U.S. dollars with the resulting adjustments charged or credited directly to Accumulated other comprehensive income (loss) in total equity. All assets and liabilities are translated into the U.S. dollar using exchange rates in effect at the balance sheet date, while revenues and expenses are translated at the weighted average exchange rates for the period. The gains or losses on foreign currency rates on cash holdings in foreign currencies are included in Effect of exchange rate changes on cash, cash equivalents and restricted cash in the Company’s Consolidated Statements of Cash Flows.
Stock-Based Compensation
The Company records stock-based compensation awards exchanged for employee services at fair value on the date of the grant and expenses the awards in the Consolidated Statements of Operations over the requisite employee service period. The fair value of stock options is determined using the Black-Scholes valuation model. The fair value of RSUs are based on the Newmont stock price on the date of grant. The fair value of PSUs with market-related conditions is determined using a Monte Carlo simulation model. The fair value of PSUs with performance-related conditions is determined based on the Newmont stock price on the date of grant and the probability of the performance conditions being met. Stock-based compensation expense related to all awards, including awards with a market or performance condition that cliff vest, is generally recognized ratably over the requisite service period of the award on a straight-line basis. The Company recognizes forfeitures as they occur. The Company's estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee retirement eligibility dates, the Company's performance and related tax impacts.
Net Income (Loss) per Common Share
Basic and diluted income per share are presented for Net income (loss) attributable to Newmont stockholders. Basic income per common share is computed by dividing income available to Newmont common stockholders by the weighted average number of common shares outstanding during the period. Diluted income per common share is computed similarly except that weighted average common shares is increased to reflect all dilutive instruments, including employee stock awards. Dilutive securities are excluded from the calculation of diluted weighted average common shares outstanding if their effect would be anti-dilutive based on the treasury stock method or due to a net loss from continuing operations.
Discontinued Operations
The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale, in accordance with ASC 360, Property, Plant and Equipment and ASC 205-20, Presentation of Financial Statements - Discontinued Operations. Under ASC 360, assets may be classified as held for sale even though discontinued operations classification is not met. Equity method investments, which are specifically scoped out of ASC 360, can only be classified as held for sale if discontinued operations classification is also achieved. The results of discontinued operations are reported in Net income (loss) from discontinued operations, net of tax in the accompanying Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less cost to sell.
Comprehensive Income (Loss)
In addition to Net income (loss), Comprehensive income (loss) includes all changes in equity during a period, such as adjustments to minimum pension liabilities, foreign currency translation adjustments, changes in fair value of derivative instruments that qualify as cash flow hedges and cumulative unrecognized changes in fair value of marketable debt securities classified as available-for-sale, except those resulting from investments by and distributions to owners.
Care and Maintenance
The Company incurs certain direct operating costs and depreciation and amortization costs when operations are temporarily halted and placed in care and maintenance. Direct operating costs incurred while operations are temporarily placed in care and maintenance are included in Other expense, net as these costs do not benefit the productive process and are not related to sales. Depreciation and amortization costs incurred while operations are temporarily placed in care and maintenance are included in Depreciation and amortization.
Reclassifications
Certain amounts and disclosures in prior years have been reclassified to conform to the 2023 presentation.
Recently Adopted Accounting Pronouncements and Securities and Exchange Commission Rules
Inflation Reduction Act
In August 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "IRA") into law. The IRA introduced an excise tax on stock repurchases of 1% of the fair market value of stock repurchases net of stock issued during the tax year and a corporate alternative minimum tax (the "Corporate AMT") of 15% on the adjusted financial statement income ("AFSI") of corporations
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
with average AFSI exceeding $1 billion over a three-year period. The excise tax on stock repurchases is effective on net stock repurchases made after December 31, 2022 and the Corporate AMT is effective for tax periods beginning in fiscal year 2023. While waiting on pending Department of Treasury regulatory guidance, the Company is continuing to monitor developments. Based upon information known to date, no material impacts are expected to the Consolidated Financial Statements, disclosures, or cash flows.
In 2024, Pillar II is set to take effect. The Pillar II agreement was signed by 138 countries with the intent to equalize corporate tax around the world by implementing a global minimum tax of 15%. As Newmont primarily does business in jurisdictions with a tax rate greater than 15%, the Company does not anticipate a material impact to the Consolidated Financial Statements.
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. In December 2022, ASU No. 2022-06 was issued which deferred the sunset date of ASU No. 2020-04. The guidance is effective for all entities as of March 12, 2020 through December 31, 2024. The guidance may be adopted over time as reference rate reform activities occur and should be applied on a prospective basis. The Company has completed its review of key contracts and does not expect the guidance to have a material impact to the consolidated financial statements or disclosures. The Company will continue to review new contracts to identify references to the LIBOR and implement adequate fallback provisions if not already implemented to mitigate the risks or impacts from the transition.
Recently Issued Accounting Pronouncements and Securities and Exchange Commission Rules
Improvement to Income Tax Disclosures
In December 2023, ASU 2023-09 was issued which requires disaggregated information about the effective tax rate reconciliation and additional information on taxes paid that meet a qualitative threshold. The new guidance is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impacts of the guidance on its Consolidated Financial Statements.
Segments Reporting
In November 2023, ASU 2023-07 was issued which improves disclosures about a public entity’s reportable segments and addresses requests from investors and other allocators of capital for additional, more detailed information about a reportable segment’s expenses. The ASU applies to all public entities that are required to report segment information in accordance with ASC 280 and is effective starting in annual periods beginning after December 15, 2023. The adoption is not expected to have a material impact on the Company's Consolidated Financial Statements or disclosures.
NOTE 3 BUSINESS ACQUISITION
On November 6, 2023 (the “acquisition date”), Newmont completed its business combination transaction with Newcrest, a public Australian mining company limited by shares, whereby Newmont, through Newmont Sub, acquired all of the ordinary shares of Newcrest, pursuant to a court-approved scheme of arrangement under Part 5.1 of the Australian Corporations Act 2001 (Cth) between Newcrest and its shareholders, as contemplated by a scheme implementation deed, dated as of May 15, 2023, by and among Newmont, Newmont Sub and Newcrest, as amended from time to time. Upon implementation, Newmont completed the business acquisition of Newcrest, in which Newmont was the acquirer and Newcrest became a direct wholly owned subsidiary of Newmont Sub and an indirect wholly owned subsidiary of Newmont (such acquisition, the “Newcrest transaction”). The acquisition of Newcrest increased the Company’s gold and other metal reserves and expanded its operating jurisdictions.
The acquisition date fair value of the consideration transferred consisted of the following: | | | | | | | | | | | | | | | | | | | | |
(in millions, except share and per share data) | | Shares | | Per Share | | Purchase Consideration |
Stock Consideration | | | | | | |
Shares of Newmont exchanged for Newcrest outstanding ordinary shares | | 357,691,627 | | | $ | 37.88 | | | $ | 13,549 | |
| | | | | | |
Total Purchase Price | | | | | | $ | 13,549 | |
The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed. In accordance with the acquisition method of accounting, the purchase price of Newcrest has been allocated to the acquired assets and assumed liabilities based on their estimated acquisition date fair values. The fair value estimates were based on income, market and cost valuation methods. The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill, which is not deductible for income tax purposes. The goodwill balance is mainly attributable to: (i) the acquisition of existing operating mines with access to an assembled workforce that cannot be duplicated at the same costs by new entrants; (ii) operating synergies anticipated from the integration of the operations of
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Newmont and Newcrest; and (iii) the application of Newmont’s Full Potential program and potential strategic and financial benefits that include the increase in reserve base and opportunities to identify additional mineralization through exploration activities.
As of December 31, 2023, the Company had not yet fully completed the analysis to assign fair values to all assets acquired and liabilities assumed, and therefore the purchase price allocation for Newcrest is preliminary. At December 31, 2023, remaining items to finalize include the fair value of inventories, property plant and mine development (primarily consisting of mineral interests), goodwill, reclamation and remediation liabilities, employee-related benefits, unrecognized tax benefits, and deferred income tax assets and liabilities. The preliminary purchase price allocation will be subject to further refinement as the Company continues to refine its estimates and assumptions based on information available at the acquisition date. These refinements may result in material changes to the estimated fair value of assets acquired and liabilities assumed. The purchase price allocation adjustments can be made throughout the end of Newmont’s measurement period, which is not to exceed one year from the acquisition date.
The following table summarizes the preliminary purchase price allocation for the Newcrest transaction as of December 31, 2023: | | | | | |
ASSETS | December 31, 2023 |
Cash and cash equivalents | $ | 668 | |
Trade receivables | 212 | |
Inventories | 722 | |
Stockpiles and ore on leach pads | 139 | |
Derivative assets | 42 | |
Other current assets | 198 | |
Current assets | 1,981 | |
Property, plant and mine development, net (1) | 13,183 | |
Investments (2) | 990 | |
Stockpiles and ore on leach pads | 134 | |
Deferred income tax assets | 189 | |
Goodwill (3) | 2,744 | |
Derivative assets | 362 | |
Other non-current assets | 93 | |
Total assets | 19,676 | |
| |
LIABILITIES | |
Accounts payable | 344 | |
Employee-related benefits | 143 | |
| |
Lease and other financing obligations | 16 | |
Debt | 1,923 | |
Other current liabilities | 336 | |
Current liabilities | 2,762 | |
Debt (4) | 1,373 | |
Lease and other financing obligations | 35 | |
Reclamation and remediation liabilities (5) | 393 | |
Deferred income tax liabilities (6) | 1,331 | |
Employee-related benefits | 222 | |
Other non-current liabilities | 11 | |
Total liabilities | 6,127 | |
| |
Net assets acquired | $ | 13,549 | |
____________________________
(1)The preliminary fair value of property, plant and mine development is based on applying the income and cost valuation methods.
(2)The preliminary fair value of the equity method investments was determined by applying the market approach, based on quoted prices for the acquired investments.
(3)Preliminary goodwill is attributable to reportable segments as follows: $397 to Red Chris; $1,087 to Brucejack; $565 to Cadia; and $695 to Lihir.
(4)The preliminary fair value of the Newcrest senior notes is measured using a market approach, based on quoted prices for the acquired debt; $1,373 of borrowings under the senior notes approximate fair value. The carrying value of the bilateral bank debt facilities of $1,923 approximates fair value.
(5)The preliminary fair value of reclamation and remediation liabilities is based on the expected amounts and timing of cash flows for closure activities and discounted to present value using a credit-adjusted risk-free rate as of the acquisition date. Key assumptions include the costs and timing of key closure activities based on the life of mine plans, including estimates and timing of monitoring and water management costs (if applicable) after the completion of initial closure activities.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
(6)Deferred income tax assets and liabilities represent the future tax benefit or future tax expense associated with the differences between the preliminary fair value allocated to assets (excluding goodwill) and liabilities and a tax basis increase to fair value as a result of the acquisition in Australia and the historical carryover tax basis of these assets and liabilities in all other jurisdictions. No deferred tax liability is recognized for the basis difference inherent in the preliminary fair value allocated to goodwill.
Sales and Net income (loss) attributable to Newmont stockholders in the Consolidated Statement of Operations includes Newcrest revenue of $944 and Newcrest net income (loss) of $136 from the acquisition date to the year ended December 31, 2023.
Pro Forma Financial Information (unaudited)
The following unaudited pro forma financial information presents consolidated results assuming the Newcrest transaction occurred on January 1, 2022.
| | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 |
Sales | $ | 15,432 | | | $ | 16,418 | |
Net income (loss) attributable to Newmont stockholders (1) | $ | (1,991) | | | $ | 410 | |
____________________________
(1)Includes $464 of Newcrest transaction and integration costs for the year ended December 31, 2023.
NOTE 4 SEGMENT INFORMATION
The Company regularly reviews its segment reporting for alignment with its strategic goals and operational structure as well as for evaluation of business performance and allocation of resources by Newmont’s CODM. In January 2023, Newmont reassessed and revised its operating strategies and the accountabilities of the senior leadership team in light of the continuing volatile and uncertain market conditions, and in November 2023, the Company completed the Newcrest transaction (refer to Note 3 for further information). Following these changes, the Company reevaluated its segments to reflect the mining operations acquired and certain changes in the financial information regularly reviewed by the CODM. As a result, the Company determined that its reportable segments were each of its 17 mining operations that it manages and its 38.5% proportionate interest in Nevada Gold Mines ("NGM") which it does not directly manage. Segment results for the prior periods have been recast to reflect the change in reportable segments.
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. The Company's business activities and operating segments that are not considered reportable, including all equity method investments, are reported in Corporate and Other, which has been provided for reconciliation purposes.
The financial information relating to the Company’s segments is as follows:
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 | | Total Assets | | Capital Expenditures (1) |
Year Ended December 31, 2023 | | | | | | | | | | | | | |
CC&V | $ | 332 | | | $ | 198 | | | $ | 23 | | | $ | 13 | | | $ | 82 | | | $ | 383 | | | $ | 64 | |
Musselwhite | 351 | | | 214 | | | 80 | | | 10 | | | (254) | | | 1,018 | | | 104 | |
Porcupine | 503 | | | 301 | | | 117 | | | 17 | | | 45 | | | 1,473 | | | 166 | |
Éléonore | 453 | | | 295 | | | 101 | | | 10 | | | (203) | | | 777 | | | 106 | |
Red Chris (2) | | | | | | | | | | | | | |
Gold | 9 | | | 4 | | | 1 | | | | | | | | | |
Copper | 23 | | | 17 | | | 3 | | | | | | | | | |
Total Red Chris | 32 | | | 21 | | | 4 | | | — | | | 8 | | | 2,178 | | | 25 | |
Brucejack (2) | 72 | | | 69 | | | 22 | | | 7 | | | (26) | | | 4,006 | | | 22 | |
Peñasquito: (3) | | | | | | | | | | | | | |
Gold | 257 | | | 158 | | | 67 | | | | | | | | | |
Silver | 335 | | | 300 | | | 134 | | | | | | | | | |
Lead | 96 | | | 98 | | | 45 | | | | | | | | | |
Zinc | 213 | | | 253 | | | 105 | | | | | | | | | |
Total Peñasquito | 901 | | | 809 | | | 351 | | | 11 | | | (1,811) | | | 4,738 | | | 113 | |
Merian | 625 | | | 385 | | | 82 | | | 23 | | | 122 | | | 927 | | | 84 | |
Cerro Negro | 510 | | | 328 | | | 137 | | | 10 | | | 15 | | | 1,646 | | | 162 | |
Yanacocha | 537 | | | 294 | | | 85 | | | 11 | | | (1,070) | | | 2,117 | | | 312 | |
Boddington: | | | | | | | | | | | | | |
Gold | 1,451 | | | 634 | | | 108 | | | | | | | | | |
Copper | 363 | | | 204 | | | 35 | | | | | | | | | |
Total Boddington | 1,814 | | | 838 | | | 143 | | | 6 | | | 811 | | | 2,376 | | | 164 | |
Tanami | 867 | | | 337 | | | 110 | | | 30 | | | 407 | | | 1,896 | | | 413 | |
Cadia: (2) | | | | | | | | | | | | | |
Gold | 250 | | | 129 | | | 16 | | | | | | | | | |
Copper | 172 | | | 116 | | | 14 | | | | | | | | | |
Total Cadia | 422 | | | 245 | | | 30 | | | 2 | | | 158 | | | 6,351 | | | 75 | |
Telfer: (2) | | | | | | | | | | | | | |
Gold | 135 | | | 126 | | | 6 | | | | | | | | | |
Copper | 17 | | | 22 | | | 1 | | | | | | | | | |
Total Telfer | 152 | | | 148 | | | 7 | | | 4 | | | (10) | | | 574 | | | 9 | |
Lihir (2) | 266 | | | 146 | | | 20 | | | 2 | | | 93 | | | 3,909 | | | 53 | |
Ahafo | 1,130 | | | 547 | | | 181 | | | 40 | | | 369 | | | 2,823 | | | 310 | |
Akyem | 574 | | | 275 | | | 122 | | | 19 | | | 151 | | | 1,069 | | | 40 | |
NGM | 2,271 | | | 1,249 | | | 452 | | | 29 | | | 432 | | | 7,401 | | | 472 | |
Corporate and Other | — | | | — | | | 41 | | | 221 | | | (1,350) | | | 9,844 | | | 51 | |
Consolidated | $ | 11,812 | | | $ | 6,699 | | | $ | 2,108 | | | $ | 465 | | | $ | (2,031) | | | $ | 55,506 | | | $ | 2,745 | |
____________________________
(1)Includes an increase in accrued capital expenditures of $79. Consolidated capital expenditures on a cash basis were $2,666.
(2)Sites acquired through the Newcrest transaction. Refer to Note 3 for further information.
(3)On June 7, 2023, the Company suspended its operations at Peñasquito due to the Union strike. During the strike, Peñasquito continued to incur costs and reported $108 and $75 in Cost applicable to sales and Depreciation and amortization, respectively, related to continued costs. Additionally, Cost applicable to sales includes adjustments to the profit-sharing agreement accrual for the current period. On October 13, 2023, the Company reached an agreement with the Union and operations at Peñasquito resumed in the fourth quarter of 2023. Refer to Note 2 for further information.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 | | Total Assets | | Capital Expenditures (1) |
Year Ended December 31, 2022 | | | | | | | | | | | | | |
CC&V | $ | 333 | | | $ | 241 | | | $ | 71 | | | $ | 11 | | | $ | (527) | | | $ | 286 | | | $ | 44 | |
Musselwhite | 305 | | | 195 | | | 79 | | | 8 | | | 23 | | | 1,294 | | | 54 | |
Porcupine | 504 | | | 281 | | | 104 | | | 14 | | | (329) | | | 1,401 | | | 152 | |
Éléonore | 391 | | | 266 | | | 115 | | | 5 | | | 4 | | | 1,010 | | | 60 | |
Peñasquito: (2) | | | | | | | | | | | | | |
Gold | 1,006 | | | 442 | | | 148 | | | | | | | | | |
Silver | 549 | | | 454 | | | 151 | | | | | | | | | |
Lead | 133 | | | 94 | | | 32 | | | | | | | | | |
Zinc | 501 | | | 316 | | | 96 | | | | | | | | | |
Total Peñasquito | 2,189 | | | 1,306 | | | 427 | | | 19 | | | 403 | | | 6,430 | | | 183 | |
Merian | 723 | | | 369 | | | 80 | | | 21 | | | 249 | | | 923 | | | 56 | |
Cerro Negro | 508 | | | 283 | | | 148 | | | 25 | | | (451) | | | 1,659 | | | 132 | |
Yanacocha | 451 | | | 313 | | | 95 | | | 22 | | | (612) | | | 2,225 | | | 439 | |
Boddington: | | | | | | | | | | | | | |
Gold | 1,447 | | | 652 | | | 118 | | | | | | | | | |
Copper | 316 | | | 181 | | | 34 | | | | | | | | | |
Total Boddington | 1,763 | | | 833 | | | 152 | | | 7 | | | 779 | | | 2,264 | | | 72 | |
Tanami | 878 | | | 328 | | | 101 | | | 28 | | | 422 | | | 1,585 | | | 343 | |
Ahafo | 1,023 | | | 566 | | | 167 | | | 26 | | | 267 | | | 2,619 | | | 268 | |
Akyem | 749 | | | 334 | | | 141 | | | 14 | | | 257 | | | 998 | | | 34 | |
NGM | 2,098 | | | 1,153 | | | 471 | | | 32 | | | 434 | | | 7,419 | | | 308 | |
Corporate and Other | — | | | — | | | 34 | | | 228 | | | (970) | | | 8,369 | | | 45 | |
Consolidated | $ | 11,915 | | | $ | 6,468 | | | $ | 2,185 | | | $ | 460 | | | $ | (51) | | | $ | 38,482 | | | $ | 2,190 | |
____________________________
(1)Includes an increase in accrued capital expenditures of $59. Consolidated capital expenditures on a cash basis were $2,131.
(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 were paid in the third quarter of 2022.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 | | Total Assets | | Capital Expenditures (1) |
Year Ended December 31, 2021 | | | | | | | | | | | | | |
CC&V | $ | 396 | | | $ | 238 | | | $ | 66 | | | $ | 18 | | | $ | 64 | | | $ | 777 | | | $ | 42 | |
Musselwhite | 277 | | | 157 | | | 80 | | | 7 | | | 30 | | | 1,317 | | | 39 | |
Porcupine | 517 | | | 269 | | | 91 | | | 17 | | | 121 | | | 1,572 | | | 68 | |
Éléonore | 446 | | | 237 | | | 139 | | | 5 | | | 60 | | | 1,062 | | | 46 | |
Peñasquito: | | | | | | | | | | | | | |
Gold | 1,250 | | | 395 | | | 201 | | | | | | | | | |
Silver | 651 | | | 332 | | | 169 | | | | | | | | | |
Lead | 172 | | | 76 | | | 39 | | | | | | | | | |
Zinc | 561 | | | 256 | | | 112 | | | | | | | | | |
Total Peñasquito | 2,634 | | | 1,059 | | | 521 | | | 8 | | | 979 | | | 6,561 | | | 144 | |
Merian | 780 | | | 326 | | | 98 | | | 11 | | | 328 | | | 952 | | | 47 | |
Cerro Negro | 480 | | | 243 | | | 137 | | | 9 | | | 68 | | | 2,183 | | | 108 | |
Yanacocha | 471 | | | 232 | | | 111 | | | 18 | | | (1,552) | | | 1,735 | | | 171 | |
Boddington: | | | | | | | | | | | | | |
Gold | 1,212 | | | 607 | | | 99 | | | | | | | | | |
Copper | 295 | | | 143 | | | 23 | | | | | | | | | |
Total Boddington | 1,507 | | | 750 | | | 122 | | | 8 | | | 627 | | | 2,261 | | | 174 | |
Tanami | 879 | | | 278 | | | 100 | | | 24 | | | 466 | | | 1,334 | | | 304 | |
Ahafo | 864 | | | 425 | | | 143 | | | 22 | | | 269 | | | 2,425 | | | 213 | |
Akyem | 680 | | | 261 | | | 120 | | | 10 | | | 284 | | | 990 | | | 66 | |
NGM | 2,291 | | | 960 | | | 550 | | | 30 | | | 818 | | | 7,584 | | | 234 | |
Corporate and Other | — | | | — | | | 45 | | | 176 | | | (1,454) | | | 9,811 | | | 37 | |
Consolidated | $ | 12,222 | | | $ | 5,435 | | | $ | 2,323 | | | $ | 363 | | | $ | 1,108 | | | $ | 40,564 | | | $ | 1,693 | |
____________________________
(1)Includes an increase in accrued capital expenditures of $40. Consolidated capital expenditures on a cash basis were $1,653.
Long-lived assets, which consist of Property, plant and mine development, net, non-current Stockpiles and ore on leach pads, and non-current right-of-use assets, included in Other non-current assets, were as follows:
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Australia | $ | 9,373 | | | $ | 3,374 | |
Canada | 8,789 | | | 4,138 | |
United States | 7,011 | | | 6,928 | |
Mexico | 4,119 | | | 4,644 | |
Papua New Guinea | 3,140 | | | — | |
Ghana | 2,626 | | | 2,586 | |
Peru | 2,254 | | | 2,008 | |
Argentina | 1,508 | | | 1,493 | |
Suriname | 726 | | | 712 | |
Other | 32 | | | 4 | |
| $ | 39,578 | | | $ | 25,887 | |
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 5 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 |
Year Ended December 31, 2023 | | | | | | | |
CC&V | $ | 332 | | | $ | — | | | | | $ | 332 | |
Musselwhite | 351 | | | — | | | | | 351 | |
Porcupine | 503 | | | — | | | | | 503 | |
Éléonore | 453 | | | — | | | | | 453 | |
Red Chris: (1) | | | | | | | |
Gold | — | | | 9 | | | | | 9 | |
Copper | — | | | 23 | | | | | 23 | |
Total Red Chris | — | | | 32 | | | | | 32 | |
Brucejack (1) | 48 | | | 24 | | | | | 72 | |
Peñasquito: | | | | | | | |
Gold | 36 | | | 221 | | | | | 257 | |
Silver (2) | — | | | 335 | | | | | 335 | |
Lead | — | | | 96 | | | | | 96 | |
Zinc | — | | | 213 | | | | | 213 | |
Total Peñasquito | 36 | | | 865 | | | | | 901 | |
Merian | 600 | | | 25 | | | | | 625 | |
Cerro Negro | 510 | | | — | | | | | 510 | |
Yanacocha | 526 | | | 11 | | | | | 537 | |
Boddington: | | | | | | | |
Gold | 359 | | | 1,092 | | | | | 1,451 | |
Copper | — | | | 363 | | | | | 363 | |
Total Boddington | 359 | | | 1,455 | | | | | 1,814 | |
Tanami | 867 | | | — | | | | | 867 | |
Cadia: (1) | | | | | | | |
Gold | 28 | | | 222 | | | | | 250 | |
Copper | — | | | 172 | | | | | 172 | |
Total Cadia | 28 | | | 394 | | | | | 422 | |
Telfer: (1) | | | | | | | |
Gold | 20 | | | 115 | | | | | 135 | |
Copper | — | | | 17 | | | | | 17 | |
Total Telfer | 20 | | | 132 | | | | | 152 | |
Lihir (1) | 266 | | | — | | | | | 266 | |
Ahafo | 1,130 | | | — | | | | | 1,130 | |
Akyem | 574 | | | — | | | | | 574 | |
NGM (3) | 2,178 | | | 93 | | | | | 2,271 | |
Consolidated | $ | 8,781 | | | $ | 3,031 | | | | | $ | 11,812 | |
____________________________
(1)Sites acquired through the Newcrest transaction. Refer to Note 3 for further information.
(2)Silver sales from concentrate includes $42 related to non-cash amortization of the silver streaming agreement liability.
(3)The Company purchases its proportionate share of gold doré from NGM for resale to third parties. Gold doré purchases from NGM totaled $2,174 for the year ended December 31, 2023.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 |
Year Ended December 31, 2022 | | | | | | | |
CC&V | $ | 328 | | | $ | 5 | | | | | $ | 333 | |
Musselwhite | 305 | | | — | | | | | 305 | |
Porcupine | 504 | | | — | | | | | 504 | |
Éléonore | 391 | | | — | | | | | 391 | |
Peñasquito: | | | | | | | |
Gold | 110 | | | 896 | | | | | 1,006 | |
Silver (1) | — | | | 549 | | | | | 549 | |
Lead | — | | | 133 | | | | | 133 | |
Zinc | — | | | 501 | | | | | 501 | |
Total Peñasquito | 110 | | | 2,079 | | | | | 2,189 | |
Merian | 723 | | | — | | | | | 723 | |
Cerro Negro | 508 | | | — | | | | | 508 | |
Yanacocha | 446 | | | 5 | | | | | 451 | |
Boddington: | | | | | | | |
Gold | 366 | | | 1,081 | | | | | 1,447 | |
Copper | — | | | 316 | | | | | 316 | |
Total Boddington | 366 | | | 1,397 | | | | | 1,763 | |
Tanami | 878 | | | — | | | | | 878 | |
Ahafo | 1,023 | | | — | | | | | 1,023 | |
Akyem | 749 | | | — | | | | | 749 | |
NGM (2) | 2,026 | | | 72 | | | | | 2,098 | |
Consolidated | $ | 8,357 | | | $ | 3,558 | | | | | $ | 11,915 | |
____________________________
(1)Silver sales from concentrate includes $73 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 $2,022 for the year ended December 31, 2022.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(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 |
Year Ended December 31, 2021 | | | | | | | |
CC&V | $ | 382 | | | $ | 14 | | | | | $ | 396 | |
Musselwhite | 277 | | | — | | | | | 277 | |
Porcupine | 517 | | | — | | | | | 517 | |
Éléonore | 446 | | | — | | | | | 446 | |
Peñasquito: | | | | | | | |
Gold | 207 | | | 1,043 | | | | | 1,250 | |
Silver (1) | — | | | 651 | | | | | 651 | |
Lead | — | | | 172 | | | | | 172 | |
Zinc | — | | | 561 | | | | | 561 | |
Total Peñasquito | 207 | | | 2,427 | | | | | 2,634 | |
Merian | 780 | | | — | | | | | 780 | |
Cerro Negro | 480 | | | — | | | | | 480 | |
Yanacocha | 451 | | | 20 | | | | | 471 | |
Boddington: | | | | | | | |
Gold | 311 | | | 901 | | | | | 1,212 | |
Copper | — | | | 295 | | | | | 295 | |
Total Boddington | 311 | | | 1,196 | | | | | 1,507 | |
Tanami | 879 | | | — | | | | | 879 | |
Ahafo | 864 | | | — | | | | | 864 | |
Akyem | 680 | | | — | | | | | 680 | |
NGM (2) | 2,216 | | | 75 | | | | | 2,291 | |
Consolidated | $ | 8,490 | | | $ | 3,732 | | | | | $ | 12,222 | |
____________________________
(1)Silver sales from concentrate includes $79 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 $2,212 for the year ended December 31, 2021.
Trade Receivables and Provisional Sales
At December 31, 2023 and December 31, 2022, Trade receivables consisted of sales from provisionally priced concentrate and other production. The impact to Sales from revenue recognized due to the changes in pricing is an increase (decrease) of $37, $(34) and $32 for the years ended December 31, 2023, 2022, and 2021, respectively.
At December 31, 2023, Newmont had the following provisionally priced concentrate sales subject to final pricing over the next several months:
| | | | | | | | | | | |
| Provisionally Priced Sales Subject to Final Pricing (1) | | Average Provisional Price (per ounce/pound) |
Gold (ounces, in thousands) | 257 | | | $ | 2,071 | |
Copper (pounds, in millions) | 104 | | | $ | 3.88 | |
Silver (ounces, in millions) | 3 | | | $ | 23.89 | |
Lead (pounds, in millions) | 25 | | | $ | 0.93 | |
Zinc (pounds, in millions) | 31 | | | $ | 1.20 | |
Molybdenum (pounds, in millions) (2) | 1 | | | $ | 19.62 | |
____________________________
(1)Includes provisionally priced by-product sales subject to final pricing, which are recognized in Costs applicable to sales.
(2)Molybdenum is a by-product at the Cadia site and is recognized in Costs applicable to sales.
Silver Streaming Agreement
The Company is obligated to sell 25% of silver production from the Peñasquito mine to Wheaton Precious Metals Corporation at the lesser of market price or a fixed contract price, subject to an annual inflation adjustment of up to 1.65%. This agreement contains off-market terms and was initially recognized at its acquisition date fair value as a finite-lived intangible liability. The current and non-current portion are recorded to Other current liabilities and Silver streaming agreement on the Consolidated Balance Sheet,
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
respectively. The Company’s policy is to amortize the liability into Sales each period using the units-of-production method. During the years ended December 31, 2023, 2022, and 2021, the Company amortized $42, $73, and $79, respectively, of the liability into revenue. At December 31, 2023 and 2022, the value of the liability included in the Consolidated Balance Sheet was $866 and $908, respectively.
Revenue by Geographic Area
Newmont primarily conducts metal sales in U.S. dollars, and therefore Sales are not exposed to fluctuations in foreign currencies. Revenues from sales attributed to countries based on the location of the customer were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
United Kingdom (1)(2) | $ | 7,637 | | | $ | 7,537 | | | $ | 7,624 | |
South Korea | 975 | | | 1,426 | | | 1,665 | |
Switzerland (2) | 600 | | | 721 | | | 1,052 | |
Japan | 512 | | | 442 | | | 386 | |
Philippines | 451 | | | 340 | | | 264 | |
Australia | 376 | | | 7 | | | 3 | |
Germany | 320 | | | 308 | | | 282 | |
Mexico | 240 | | | 604 | | | 642 | |
United States | 48 | | | 24 | | | 62 | |
Other (1)(2) | 653 | | | 506 | | | 242 | |
| $ | 11,812 | | | $ | 11,915 | | | $ | 12,222 | |
____________________________
(1)Includes $42, $73, and $79 related to non-cash amortization of the silver streaming agreement liability for the years ended December 31, 2023, 2022, and 2021, respectively.
(2)The Company identified that revenue by geographic area for the years ended December 31, 2022 and 2021 was incorrectly allocated for United Kingdom, Switzerland, and Other, but the total revenue by geographic area was appropriately stated for these periods. These amounts have been corrected in the current period.
Revenue by Major Customer
As gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited number of customers for the sale of its product. The Company sells silver, lead, zinc and copper predominantly in the form of concentrates. The concentrates are sold under a combination of short-term and long-term supply contracts with processing fees based on the demand for these concentrates in the global marketplace.
In 2023, sales to JPMorgan Chase were $2,583 (22%), Royal Bank of Canada were $1,765 (15%), Standard Chartered were $1,659 (14%), and Toronto Dominion Bank were $1,630 (14%) of total gold sales. In 2022, sales to Standard Chartered were $4,179 (35%) and JPMorgan Chase were $1,503 (13%) of total gold sales. In 2021 sales to Standard Chartered were $4,634 (38%) and JPMorgan Chase were $2,002 (17%) of total gold sales.
NOTE 6 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.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company’s Reclamation and remediation expense consisted of:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Reclamation adjustments and other | $ | 1,207 | | | $ | 646 | | | $ | 1,633 | |
Reclamation accretion | 238 | | | 173 | | | 125 | |
Reclamation expense | 1,445 | | | 819 | | | 1,758 | |
| | | | | |
Remediation adjustments and other | 81 | | | 96 | | | 82 | |
Remediation accretion | 7 | | | 6 | | | 6 | |
Remediation expense | 88 | | | 102 | | | 88 | |
Reclamation and remediation | $ | 1,533 | | | $ | 921 | | | $ | 1,846 | |
In 2023, reclamation adjustments were primarily due to increased water management costs at portions of the Yanacocha site that are no longer in production and with no expected substantive economic value (i.e., non-operating), that resulted in an increase of $1,101. In 2022, reclamation adjustments were primarily due to higher estimated closure costs resulting from cost inflation and increased water management costs at portions of the Yanacocha and Porcupine site operations that are non-operating that resulted in increases of $529 and $91, respectively. In 2021, reclamation adjustments were primarily comprised of $1,554 related to non-operating portions of the Yanacocha site.
In 2023 remediation adjustments were primarily due to higher water management costs and project execution delays at the Midnite mine and Dawn mill sites. In 2022, remediation adjustments are primarily due to higher waste disposal costs and project execution delays at the Midnite mine and Dawn mill sites. In 2021, remediation adjustments are primarily due to revisions to estimated construction costs of the water treatment plant at the Midnite mine and higher estimated closure cost arising from recent tailings management review and monitoring requirements set forth by GISTM.
The following are reconciliations of Reclamation and remediation liabilities:
| | | | | | | | | | | | | | | | | |
| Reclamation | | Remediation | | Total |
Balance at January 1, 2022 | $ | 5,768 | | | $ | 344 | | | $ | 6,112 | |
Additions, changes in estimates and other | 981 | | | 79 | | | 1,060 | |
| | | | | |
Payments, net | (191) | | | (56) | | | (247) | |
Accretion expense | 173 | | | 6 | | | 179 | |
Balance at December 31, 2022 | 6,731 | | | 373 | | | 7,104 | |
Additions, changes in estimates and other | 1,246 | | | 65 | | | 1,311 | |
Additions from the Newcrest transaction | 401 | | | — | | | 401 | |
Payments, net | (231) | | | (44) | | | (275) | |
Accretion expense | 238 | | | 7 | | | 245 | |
Balance at December 31, 2023 | $ | 8,385 | | | $ | 401 | | | $ | 8,786 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
| Reclamation | | Remediation | | Total | | Reclamation | | Remediation | | Total |
Current (1) | $ | 558 | | | $ | 61 | | | $ | 619 | | | $ | 482 | | | $ | 44 | | | $ | 526 | |
Non-current (2) | 7,827 | | | 340 | | | 8,167 | | | 6,249 | | | 329 | | | 6,578 | |
Total (3) | $ | 8,385 | | | $ | 401 | | | $ | 8,786 | | | $ | 6,731 | | | $ | 373 | | | $ | 7,104 | |
____________________________
(1)The current portion of reclamation and remediation liabilities are included in Other current liabilities. Refer to Note 22.
(2)The non-current portion of reclamation and remediation liabilities are included in Reclamation and remediation liabilities.
(3)Total reclamation liabilities includes $4,804 and $3,722 related to Yanacocha at December 31, 2023 and 2022, 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 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 35% greater or 6% lower than the amount accrued at December 31, 2023. The amounts accrued are reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are included in Other current liabilities and Reclamation and remediation liabilities in the period estimates are revised.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Included in Other non-current assets at December 31, 2023 and 2022 are $81 and $62 respectively, of non-current restricted cash held for purposes of settling reclamation and remediation obligations. The amounts at December 31, 2023 and 2022 primarily relate to the Ahafo and Akyem mines in Ghana, Africa.
Included in Other non-current assets at December 31, 2023 and 2022 was $21 and $35, respectively, of non-current restricted investments, which are legally pledged for purposes of settling reclamation and remediation obligations. The amounts at December 31, 2023 and 2022 primarily relate to the San Jose Reservoir at Yanacocha.
Refer to Note 25 for further discussion of reclamation and remediation matters.
NOTE 7 IMPAIRMENT CHARGES
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
| Long-lived and other assets (1) | | Goodwill | | Total | | Long-lived and other assets (1) | | Goodwill | | Total | | Long-lived and other assets (1) | | | | Total |
CC&V | $ | 4 | | | $ | — | | | $ | 4 | | | $ | 511 | | | $ | — | | | $ | 511 | | | $ | — | | | | | $ | — | |
Musselwhite | 4 | | | 293 | | | 297 | | | — | | | — | | | — | | | — | | | | | — | |
Porcupine | 5 | | | — | | | 5 | | | — | | | 341 | | | 341 | | | — | | | | | — | |
Éléonore | — | | | 246 | | | 246 | | | — | | | — | | | — | | | 1 | | | | | 1 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Peñasquito | 21 | | | 1,210 | | | 1,231 | | | 4 | | | — | | | 4 | | | 1 | | | | | 1 | |
Merian | 10 | | | — | | | 10 | | | 1 | | | — | | | 1 | | | 1 | | | | | 1 | |
Cerro Negro | 5 | | | — | | | 5 | | | — | | | 459 | | | 459 | | | 3 | | | | | 3 | |
Yanacocha | — | | | — | | | — | | | — | | | — | | | — | | | 1 | | | | | 1 | |
Boddington | 2 | | | — | | | 2 | | | 2 | | | — | | | 2 | | | 3 | | | | | 3 | |
Tanami | 1 | | | — | | | 1 | | | — | | | — | | | — | | | — | | | | | — | |
| | | | | | | | | | | | | | | | | |
Telfer (2) | 2 | | | — | | | 2 | | | — | | | — | | | — | | | — | | | | | — | |
| | | | | | | | | | | | | | | | | |
Ahafo | 2 | | | — | | | 2 | | | 1 | | | — | | | 1 | | | 2 | | | | | 2 | |
Akyem | — | | | — | | | — | | | — | | | — | | | — | | | 1 | | | | | 1 | |
NGM | 75 | | | 11 | | | 86 | | | 1 | | | — | | | 1 | | | — | | | | | — | |
Corporate and Other | — | | | — | | | — | | | — | | | — | | | — | | | 12 | | | | | 12 | |
Impairment charges | $ | 131 | | | $ | 1,760 | | | $ | 1,891 | | | $ | 520 | | | $ | 800 | | | $ | 1,320 | | | $ | 25 | | | | | $ | 25 | |
____________________________
(1)Primarily relates to non-cash write-downs of materials and supplies inventory and various assets that are no longer in use, except for certain impairment charges recognized for the year ended December 31, 2022 as described below.
(2)Site acquired through the Newcrest transaction. Refer to Note 3 for further information.
The estimated cash flows utilized in both the long-lived asset and goodwill impairment evaluations are derived from the Company's current business plans. The Company completed its annual business plan update which reflected updated mine plans, certain adverse changes in market conditions, including inflationary pressures to costs and capital, strategic evaluation regarding the use of capital, and updates to asset retirement costs.
Impairment of goodwill
The Company evaluates its goodwill for impairment annually at December 31 or when events or changes in circumstances indicate that the fair value of a reporting unit is less than its carrying value. Each operating mine is considered a distinct reporting unit for purposes of goodwill impairment testing. Based on the December 31, 2023 review, the Company concluded that Goodwill was impaired at the Musselwhite, Éléonore and Peñasquito reporting units. The goodwill impairments at Musselwhite and Éléonore were driven by a deterioration in underlying cash flows from higher costs due to inflationary pressures, and resulted in non-cash impairment charges of $293 and $246, respectively, which represented the full goodwill balance of the reporting units prior to impairment. The goodwill impairment at Peñasquito was also driven by lower expected cash flows, primarily due to an update to the geological model that impacted expected metal grade and recoveries, as well as higher costs due to inflationary pressures, and resulted in a non-cash impairment charge of $1,210, which represented the full goodwill balance of the reporting unit prior to impairment. The long-lived assets of Musselwhite, Éléonore and Peñasquito were evaluated for impairment prior to the quantitative goodwill assessment and no impairment was identified.
In addition, the Company recorded a non-cash impairment charge of $11 at NGM as a result of the decision to not pursue permitting for Phase 2 mining at Long Canyon. As a result, NGM placed Long Canyon on long-term care and maintenance and revised their business plan. The impairment represented the full goodwill balance at Long Canyon based on the Company's proportionate interest in NGM.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company measured the impairments by comparing the total fair value of the operations to the corresponding reporting unit carrying value. The estimated fair value was determined using the income approach and is considered a non-recurring level 3 fair value measurement. Significant inputs to the fair value measured included (i) updated cash flow information from the Company's current business and closure plans, (ii) a short-term gold price of $1,950, (iii) a long-term gold price of $1,700, (iv) current estimates of reserves, resources, and exploration potential, and (v) a reporting unit specific discount rate of 10.00% at Musselwhite, 17.50% at Éléonore, and 6.75% at Peñasquito. The selected discount rates for Musselwhite and Éléonore incorporate additional premium related to operational risk at these sites.
Based on the December 31, 2022 review, the Company concluded that Goodwill was impaired at the Porcupine and the Cerro Negro reporting units. The Porcupine goodwill impairment was driven by a deterioration in underlying cash flows from higher costs due to inflationary pressures and higher capital costs related to safety enhancements and the expansion of the active tailings storage facility, ensuring GISTM compliance, as well as an increase to the asset retirement cost, and resulted in a non-cash impairment charge of $341, which represented the full goodwill balance of the reporting unit prior to impairment. The Cerro Negro goodwill impairment was driven by a 14% country specific discount rate that reflects current macroeconomic risk and uncertainty in Argentina, and resulted in a non-cash impairment charge of $459, which represented the full goodwill balance of the reporting unit prior to impairment. The long-lived assets of Porcupine and Cerro Negro were evaluated for impairment prior to the quantitative goodwill test and no impairment was identified.
The Company measured the impairments by comparing the total fair value of the existing operations to the corresponding reporting unit carrying value. The estimated fair value was determined using the income approach and is considered a non-recurring level 3 fair value measurement. Significant inputs to the fair value measured included (i) updated cash flow information from the Company's current business and closure plans, (ii) a short-term gold price of $1,750, (iii) a long-term gold price of $1,600, (iv) current estimates of reserves, resources, and exploration potential, and (v) a country specific discount rate of 4.50% in Canada and 14% in Argentina.
Impairment of long-lived and other assets
The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. During the fourth quarter of 2023, an impairment indicator was determined to exist at NGM. This determination was as a result of the decision to not pursue permitting for Phase 2 mining at Long Canyon. As a result, NGM placed Long Canyon on long-term care and maintenance and revised their business plan. The Company recognized its proportionate share of the non-cash impairment charge of $72 which resulted in a remaining balance of $22 within Property, plant and mine development, net at December 31, 2023. The estimated fair value is based on observable market values for comparable assets expressed as dollar per ounce of mineral resources and is considered a non-recurring level 3 fair value measurement.
During the fourth quarter of 2022, the Company determined that an impairment indicator existed at CC&V. This determination was based on the updated business plan, which reflected a deterioration in underlying cash flows from lower production, impacted by the decision to place the mill on long-term care and maintenance, higher costs due to inflationary pressures, as well as an increase to the asset retirement cost. As a result of the impairment indicator, a recoverability test was performed and the Company concluded the long-lived assets at CC&V were impaired resulting in a non-cash impairment charge of $511 and a remaining balance of $25 within Property, plant and mine development, net at December 31, 2022. The Company measured the impairment by comparing the total fair value of the existing operations to the carrying value of the corresponding assets. The estimated fair value was determined using the income approach and is considered a non-recurring level 3 fair value measurement. Significant inputs to the fair value measurement included (i) updated cash flow information from the Company's current business and closure plans, (ii) a short-term gold price of $1,750, (iii) a long-term gold price of $1,600, (iv) current estimates of reserves, resources, and exploration potential, and (v) a country specific pre-tax discount rate of 6.75%.
NOTE 8 OTHER EXPENSE, NET
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Newcrest transaction and integration costs | $ | 464 | | | $ | — | | | $ | — | |
Restructuring and severance | 24 | | | 4 | | | 11 | |
Settlement costs | 7 | | | 22 | | | 11 | |
COVID-19 specific costs | 1 | | | 38 | | | 87 | |
| | | | | |
Other | 21 | | | 18 | | | 34 | |
Other expense, net | $ | 517 | | | $ | 82 | | | $ | 143 | |
Newcrest transaction and integration costs. Newcrest transaction and integration costs for the year ended December 31, 2023 primarily comprises $316 in relation to stamp duty tax incurred in connection with the transaction, and other related investment banking fees, legal costs, and consulting services.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
COVID-19 specific costs. COVID-19 specific costs represent incremental direct costs incurred, including but not limited to contributions to the Newmont Global Community Support Fund, additional health screenings, incremental travel, security and employee related costs as well as various other incremental costs incurred as a result of actions taken to protect against the impacts of the COVID-19 pandemic and to comply with local mandates. The Company established the Newmont Global Community Support Fund to help host communities, governments and employees combat the COVID-19 pandemic. For the years ended December 31, 2023, 2022, and 2021, $1, $3, and $3 were distributed from this fund, respectively. Beginning January 1, 2023, COVID-19 specific costs incurred in the ordinary course of business are recognized in Costs applicable to sales.
Settlement costs. Settlement costs primarily relate to legal and other settlements, voluntary contributions, and other related costs.
Restructuring and severance. Restructuring and severance primarily represents severance and related costs associated with significant organizational and operating model changes implemented by the Company for all periods presented.
NOTE 9 OTHER INCOME (LOSS), NET
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Gain (loss) on asset and investment sales, net | $ | (197) | | | $ | 35 | | | $ | 212 | |
Interest income | 148 | | | 78 | | | 18 | |
Foreign currency exchange, net | (56) | | | (5) | | | 23 | |
Change in fair value of investments | (47) | | | (46) | | | (135) | |
Insurance Proceeds (1) | 37 | | | 14 | | | — | |
Pension settlements (2) | (9) | | | (137) | | | (4) | |
Charges from debt extinguishment | — | | | — | | | (11) | |
Impairment of investments | — | | | — | | | (1) | |
Other | 36 | | | 34 | | | 23 | |
Other income (loss), net | $ | (88) | | | $ | (27) | | | $ | 125 | |
____________________________
(1)Primarily relates to insurance proceeds received by the Company in the third quarter of 2023 of $45 and $11 related to Tanami due to significant rainfall and flooding in early 2023 and a conveyor failure at Ahafo, respectively. Of these amounts, $31 and $6, respectively, were recognized in Other income (loss), net, and primarily relate to business interruption coverage. The remaining amounts were recognized within Costs applicable to sales.
(2)Primarily represents pension settlement charges due to the pension annuitization in 2022 and lump sum payments to participants. For additional information regarding pension and other post-employment benefits, refer to Note 11.
Gain (loss) on asset and investment sales, net. For the year ended December 31, 2023, Gain on asset and investment sales, net primarily consists of a loss of $235 recognized on the abandonment of the pyrite leach plant at Peñasquito in the fourth quarter of 2023, partially offset by the net gain of $36 recognized in the first quarter of 2023 on the exchange and subsequent sale of the previously held Maverix Metals, Inc. ("Maverix") investment for the Triple Flag Precious Metals Corporation ("Triple Flag") investment.
For the year ended December 31, 2022, Gain on asset and investment sales, net primarily consists of a gain of $61 related to the sale of the 18.75% ownership interest in Minera Agua Rica Alumbrera Limited to Glencore International AG in third quarter of 2022 for a purchase price of $125 cash consideration and a $30 deferred payment, which is due upon successfully reaching commercial production and otherwise subject to a 6% annual interest, up to a maximum deferred payment of $50; partially offset by a loss of $45 recognized on the sale of the ownership interest in La Zanja in the first quarter of 2022. Refer to Note 1 for further information.
For the year ended December 31, 2021, Gain on asset and investment sales, net primarily consists of a gain of $83 related to the sale of the Kalgoorlie Consolidated Gold Mines power business to Northern Star Resources Limited in the fourth quarter of 2021; a gain of $79 related to an exchange transaction between NGM and i-80 Gold Corp, completed in the third quarter of 2021, in which NGM acquired the remaining 40% interest in the South Arturo property and certain other considerations in exchange for the Lone Tree and Buffalo mountain properties and related infrastructure; and a gain of $42 related to the sale of all of the outstanding shares of in TMAC Resources, Inc. to Agnico Eagle Mines Ltd in the first quarter of 2021.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 10 INCOME AND MINING TAXES
The Company’s Income and mining tax benefit (expense) consisted of:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Current: | | | | | |
United States | $ | (20) | | | $ | (47) | | | $ | (71) | |
Foreign | (610) | | | (686) | | | (1,136) | |
| (630) | | | (733) | | | (1,207) | |
Deferred: | | | | | |
United States | 62 | | | 236 | | | 5 | |
Foreign | 42 | | | 42 | | | 104 | |
| 104 | | | 278 | | | 109 | |
Income and mining tax benefit (expense) | $ | (526) | | | $ | (455) | | | $ | (1,098) | |
The Company’s Income (loss) before income and mining tax and other items consisted of:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
United States | $ | 111 | | | $ | (566) | | | $ | 247 | |
Foreign | (2,142) | | | 515 | | | 861 | |
Income (loss) before income and mining tax and other items | $ | (2,031) | | | $ | (51) | | | $ | 1,108 | |
The Company’s Income and mining tax benefit (expense) differed from the amounts computed by applying the United States statutory corporate income tax rate for the following reasons:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Income (loss) before income and mining tax and other items | | | $ | (2,031) | | | | | $ | (51) | | | | | $ | 1,108 | |
| | | | | | | | | | | |
U.S. Federal statutory tax rate | 21 | % | | $ | 427 | | | 21 | % | | $ | 11 | | | 21 | % | | $ | (233) | |
Reconciling items: | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Percentage depletion | 4 | % | | 72 | | | 90 | % | | 46 | | | (7) | % | | 71 | |
Change in valuation allowance on deferred tax assets | (18) | % | | (358) | | | (569) | % | | (290) | | | 38 | % | | (419) | |
Rate differential for foreign earnings indefinitely reinvested | 7 | % | | 148 | | | (151) | % | | (77) | | | 10 | % | | (108) | |
Mining and other taxes (net of associated federal benefit) | (4) | % | | (87) | | | (231) | % | | (118) | | | 15 | % | | (173) | |
Uncertain tax positions (1) | 1 | % | | 28 | | | 261 | % | | 133 | | | 9 | % | | (99) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Goodwill write-downs | (25) | % | | (498) | | | (482) | % | | (246) | | | — | % | | — | |
Expiration of U.S. capital losses and foreign tax credits | (10) | % | | (195) | | | (61) | % | | (31) | | | 14 | % | | (152) | |
Transactions | — | % | | (1) | | | 100 | % | | 51 | | | — | % | | 5 | |
| | | | | | | | | | | |
Other (2) | (2) | % | | (62) | | | 130 | % | | 66 | | | (1) | % | | 10 | |
Income and mining tax benefit (expense) | (26) | % | | $ | (526) | | | (892) | % | | $ | (455) | | | 99 | % | | $ | (1,098) | |
____________________________
(1)Includes net tax benefit of $125, primarily consisting of a reduction in the related uncertain tax position of $95 and a valuation release of $29 for the full settlement with the Mexican Tax Authority entered into during the second quarter of 2022.
(2)Primarily consists of the impact of foreign exchange and earnings, the U.S. tax effect of minority interest attributable to non-U.S. investees, and the impact of return to provision adjustments.
Factors that Significantly Impact Effective Tax Rate (Other than Factors Described Separately Below)
Percentage depletion allowances (tax deductions for depletion that may exceed the tax basis in the mineral reserves) are available to the Company under the income tax laws of the United States for operations conducted in the United States or through branches and partnerships owned by U.S. subsidiaries included in the consolidated United States income tax return. These deductions are highly sensitive to the price of gold and other metals produced by the Company.
The Company operates in various jurisdictions around the world that have statutory tax rates that are significantly different than those of the U.S. These differences combine to move the overall effective tax rate higher than the U.S. statutory rate.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Mining taxes in Nevada, Mexico, Canada, Peru and Australia represent state and provincial taxes levied on mining operations and are classified as income taxes as such taxes are based on a percentage of mining profits.
In the U.S., capital losses may be carried forward five years to offset capital gains. Capital loss carryforwards of $—, $—, and $152, expired in 2023, 2022 and 2021, respectively. The Company carries a full valuation allowance on U.S. capital losses.
In 2023, the U.S. had foreign tax credits of $196 expire.
Components of the Company's deferred income tax assets (liabilities) are as follows:
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Deferred income tax assets: | | | |
Property, plant and mine development | $ | 746 | | | $ | 887 | |
Inventory | 320 | | | 94 | |
Reclamation and remediation | 2,362 | | | 1,702 | |
Net operating losses, capital losses and tax credits | 2,655 | | | 1,978 | |
Investment in partnerships and subsidiaries | — | | | — | |
Employee-related benefits | 97 | | | 75 | |
Derivative instruments and unrealized loss on investments | 69 | | | 54 | |
Foreign Exchange and Financing Obligations | 86 | | | 67 | |
Silver Streaming Agreement | 332 | | | 246 | |
Other | 643 | | | 202 | |
| 7,310 | | | 5,305 | |
Valuation allowances | (4,652) | | | (3,994) | |
| $ | 2,658 | | | $ | 1,311 | |
Deferred income tax liabilities: | | | |
Property, plant and mine development | $ | (4,425) | | | $ | (2,176) | |
Inventory | (160) | | | (62) | |
Investment in partnerships and subsidiaries | (579) | | | (615) | |
Other | (213) | | | (94) | |
| (5,377) | | | (2,947) | |
Net deferred income tax assets (liabilities) | $ | (2,719) | | | $ | (1,636) | |
These amounts reflect the classification and presentation that is reported for each tax jurisdiction in which the Company operates.
Valuation of Deferred Tax Assets
The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the recent pretax losses and/or expectations of future pretax losses. Such objective evidence limits the ability to consider other subjective evidence such as the Company's projections for future growth. On the basis of this evaluation, a new valuation allowance has been recorded in Argentina. However, the amount of the deferred tax asset considered realizable could be adjusted if estimates of future taxable income during the carryforward period are increased, if objective negative evidence in the form of cumulative losses is no longer present or if additional weight were given to subjective evidence such as the Company's projections for growth.
During 2023, the Company recorded an increase to the valuation allowance of $358 to tax expense, primarily driven by increases in the Yanacocha reclamation obligation in Peru, the net deferred tax asset in Argentina, the valuation allowance on Canada's tax credits, and the transaction costs capitalized to capital assets in Australia for which there is a full valuation allowance. This was partially offset by a release for expiration of foreign tax credit carryforwards in the U.S. There was additional valuation allowance established as a result of purchase accounting for the Newcrest transaction of $300.
Refer to Note 2 for additional risk factors that could impact the Company’s ability to realize the deferred tax assets.
Tax Loss Carryforwards, Foreign Tax Credits, and Canadian Tax Credits
At December 31, 2023 and 2022, the Company had (i) $3,678 and $1,963 of net operating loss carry forwards, respectively; and (ii) $513 and $615 of tax credit carry forwards, respectively. At December 31, 2023 and 2022, $989 and $649, respectively, of net operating loss carry forwards are attributable to the U.S., Australia and France for which current tax law provides no expiration period. The net operating loss carry forward in Canada of $1,458 will expire by 2043. The net operating loss carryforward in Mexico of $921
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
will expire by 2033, and the net operating loss carryforward in Argentina of $74 will expire by 2028. The net operating loss carry forward in other countries is $236.
Tax credit carry forwards for 2023 and 2022 of $284 and $463, respectively, consist of foreign tax credits available in the United States; substantially all such credits not utilized will expire at the end of 2029, and of solar tax credit for 2023 and 2022 of $19 and $-, respectively, which will expire by 2045. Canadian tax credits for 2023 and 2022 of $210 and $152, respectively, consist of investment tax credits and minimum mining tax credits. Canadian investment tax credits for 2023 consisted of $124 which will substantially expire by 2043, mining tax credits of $9 which will expire by 2042, and the other Canadian tax credits of $76 that do not expire.
Company’s Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, exclusive of interest and penalties, is as follows:
| | | | | | | | | | | | | | | | | |
| 2023 | | 2022 | | 2021 |
Total amount of gross unrecognized tax benefits at beginning of year | $ | 190 | | | $ | 245 | | | $ | 237 | |
Additions (reductions) for tax positions of prior years | 13 | | | (1) | | | 36 | |
Additions for tax positions of current year | 2 | | | — | | | — | |
Reductions due to settlements with taxing authorities | (18) | | | (53) | | | (26) | |
Reductions due to lapse of statute of limitations | (43) | | | (1) | | | (2) | |
Total amount of gross unrecognized tax benefits at end of year | $ | 144 | | | $ | 190 | | | $ | 245 | |
At December 31, 2023, 2022 and 2021, $190, $219 and $335, respectively, represent the amount of unrecognized tax benefits, inclusive of interest and penalties that, if recognized, would impact the Company’s effective income tax rate.
The Company operates in numerous countries around the world and is subject to, and pays annual income taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with the local government, and others are defined by the general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and paid the taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the Company is subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved.
Through the due diligence and integration processes, the Company has not identified new uncertain tax positions as a result of the Newcrest transaction. Work on this will continue through the measurement period.
The Australian Taxation Office (“ATO”) is conducting a limited review of the Company’s prior year tax returns. The ATO is reviewing an internal reorganization executed in 2011 when Newmont completed a restructure of the shareholding in the Company’s Australian subsidiaries. To date, the Company has responded to inquiries from the ATO and provided them with supporting documentation for the transaction and the Company’s associated tax positions. One aspect of the ATO review relates to an Australian capital gains tax that applies to sales or transfers of stock in certain types of entities. In the fourth quarter of 2017, the ATO notified the Company that it believes the 2011 reorganization is subject to capital gains tax of approximately $85 (including interest and penalties). The Company disputes this conclusion and intends to vigorously defend its position that the transaction is not subject to this tax. In the fourth quarter of 2017, the Company made a $24 payment to the ATO and lodged an Appeal with the Australian Federal Court to preserve its right to contest the ATO conclusions on this matter. In December, an unsuccessful mediation session was held and an agreement was not reached at that time. The Company will file export reports with the Court by April 2024 in advance of proceedings. A provisional Court date is set for the third quarter of 2024.
In the third quarter of 2022, the Administración Federal de Ingresos Públicos ("AFIP") in Argentina notified the Company that it completed the 2016 transfer pricing review. The AFIP has questioned the Company’s treatment of intercompany loans and believes they should be akin to capital contributions. These intercompany loans are still in place. The Company disputes this position and continues to believe that the financing meets the qualifications of bona fide debt and intends to vigorously defend this position. To date, no final audit report or assessment has been provided by the AFIP. The matter will be closely monitored and evaluated as more information becomes available.
The Company and/or subsidiaries file income tax returns in the U.S. Federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax examinations by tax authorities for years before 2016. As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, and (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions, the Company believes that it is reasonably possible that the total amount of its unrecognized income tax liability will decrease between $25 and $50 in the next 12 months.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company’s practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of Income and mining tax benefit (expense). At December 31, 2023 and 2022, the total amount of accrued income-tax-related interest and penalties included in the Consolidated Balance Sheets was $78 and $77, respectively. During 2023, 2022, and 2021 the Company increased $1, and released $61 and $8 of interest and penalties, respectively, through the Consolidated Statements of Operations.
Other
No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations.
NOTE 11 EMPLOYEE-RELATED BENEFITS
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Current: | | | |
Accrued payroll and withholding taxes | $ | 477 | | | $ | 310 | |
Accrued severance | 13 | | | 4 | |
Other post-retirement benefit plans | 11 | | | 6 | |
Workers’ participation and other bonuses | 10 | | | 56 | |
Employee pension benefits | 6 | | | 3 | |
Other employee-related payables | 34 | | | 20 | |
| $ | 551 | | | $ | 399 | |
Non-current: | | | |
Accrued severance | $ | 439 | | | $ | 208 | |
Other post-retirement benefit plans | 66 | | | 60 | |
Employee pension benefits | 35 | | | 38 | |
Other employee-related payables | 115 | | | 36 | |
| $ | 655 | | | $ | 342 | |
Pension and Other Benefit Plans
The Company provides a defined benefit pension plan to eligible employees. Benefits are generally based on years of service and the employee’s annual compensation. Various international pension plans are based on local laws and requirements. Pension costs are determined annually by independent actuaries and pension contributions to the U.S. qualified plans are made based on funding standards established under the Employee Retirement Income Security Act of 1974, as amended.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following tables provide a reconciliation of changes in the plans’ benefit obligations and assets’ fair values for 2023 and 2022:
| | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefits | | Other Benefits |
| 2023 | | 2022 | | 2023 | | 2022 |
Change in benefit obligation: | | | | | | | |
Benefit obligation at beginning of year | $ | 311 | | | $ | 1,040 | | | $ | 66 | | | $ | 84 | |
Service cost | 12 | | | 15 | | | 1 | | | 1 | |
Interest cost | 17 | | | 19 | | | 4 | | | 3 | |
Actuarial loss (gain) | 17 | | | (178) | | | 4 | | | (19) | |
Foreign currency exchange (gain) loss | 3 | | | (3) | | | — | | | — | |
Benefits paid | (7) | | | (25) | | | (4) | | | (3) | |
Amendments | 2 | | | — | | | — | | | — | |
Settlement payments | (30) | | | (557) | | | — | | | — | |
Projected benefit obligation at end of year | $ | 325 | | | $ | 311 | | | $ | 71 | | | $ | 66 | |
Accumulated benefit obligation | $ | 306 | | | $ | 294 | | | $ | 71 | | | $ | 66 | |
Change in fair value of assets: | | | | | | | |
Fair value of assets at beginning of year | $ | 311 | | | $ | 1,014 | | | $ | — | | | $ | — | |
Actual return (loss) on plan assets | 32 | | | (125) | | | — | | | — | |
Foreign currency exchange gain (loss) | 2 | | | (3) | | | — | | | — | |
Employer contributions | 14 | | | 7 | | | 4 | | | 3 | |
Benefits paid | (7) | | | (25) | | | (4) | | | (3) | |
Settlement payments | (30) | | | (557) | | | — | | | — | |
Fair value of assets at end of year | $ | 322 | | | $ | 311 | | | $ | — | | | $ | — | |
(Unfunded) funded status, net: | $ | (3) | | | $ | — | | | $ | (71) | | | $ | (66) | |
Amounts recognized in the Consolidated Balance Sheets: | | | | | | | |
Other non-current assets | $ | 38 | | | $ | 41 | | | $ | — | | | $ | — | |
Employee-related benefits, current | (6) | | | (3) | | | (6) | | | (6) | |
Employee-related benefits, non-current | (35) | | | (38) | | | (65) | | | (60) | |
Net amounts recognized | $ | (3) | | | $ | — | | | $ | (71) | | | $ | (66) | |
The Company’s qualified pension plan is funded with cash contributions in compliance with Internal Revenue Service rules and regulations. The Company’s non-qualified and other benefit plans are currently not funded, but exist as general corporate obligations. The information contained in the above tables presents the combined funded status of qualified and non-qualified plans. The Company reviews its retirement benefit programs on a regular basis and will consider market conditions and the funded status of its qualified pension plans in determining whether additional contributions are appropriate in calendar year 2024.
As of December 31, 2023 and 2022, all pension benefit plans had accumulated benefit obligations and projected benefit obligations in excess of the fair value of assets with the exception of one defined benefit pension plan in the U.S. and one defined benefit pension plan in Canada. The fair value of the plan assets associated with these pension benefit plans was in excess of the related accumulated benefit obligations and projected benefit obligations. The following table provides information for the Company's defined benefit pensions plans that had aggregate accumulated benefit obligations and projected benefit obligations in excess of plan assets at December 31:
| | | | | | | | | | | |
| Pension Benefits (1) |
| 2023 | | 2022 |
Accumulated benefit obligation | $ | 35 | | | $ | 37 | |
Projected benefit obligation | $ | 42 | | | $ | 42 | |
Fair value of plan assets | $ | 1 | | | $ | 1 | |
____________________________(1)Information for other benefit plans with an accumulated benefit obligations in excess of plan assets has not been included as all of the other benefit plans are unfunded.
The significant assumptions used in measuring the Company’s benefit obligation were mortality assumptions and discount rate.
The mortality assumptions used to measure the pension and other post retirement obligation incorporate future mortality improvements from tables published by the Society of Actuaries ("SOA"). In 2022 and 2023, the SOA announced they would not release a new generational projection scale for the related years and instead updated the Mortality Improvement Model ("MIM") tool with the ability to optionally input mortality loads to model differing viewpoints of the ongoing effect of COVID. The Company utilized
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
the Pri-2012 mortality tables and the MP-2021 generational projection scales, with no adjustment for COVID due to the Company not experiencing material mortality gain due to COVID, to measure the pension and other post retirement obligations as of December 31, 2023 and 2022.
Yield curves matching the Company’s benefit obligations were derived using a model based on high quality corporate bond data from Bloomberg. The model develops a discount rate by selecting a portfolio of high quality corporate bonds whose projected cash flows match the projected benefit payments of the plan. The resulting curves were used to identify a weighted average discount rate for the Company of 5.33% and 5.63% at December 31, 2023 and 2022, respectively, based on the timing of future benefit payments.
Actuarial gains of $21 and $197 were recognized in the years ended December 31, 2023 and 2022, respectively, primarily due to an increase in discount rate from the prior year.
Settlement accounting is required when annual lump sum payments exceed the annual interest and service costs for a plan and results in a remeasurement of the related pension benefit obligation and plan assets and the recognition of settlement charges in Other income (loss), net due to the acceleration of a portion of unrecognized actuarial losses. Lump sum payments are primarily made from the plan assets. Settlement accounting was triggered for the periods ended December 31, 2023, 2022 and 2021 resulting in pension settlement charges of $9, $137 and $4, respectively.
For the period ended December 31, 2022, pension settlement charges primarily resulted from the Company executing an annuitization to transfer a portion of the pension plan obligations from the Company's U.S. qualified defined benefit pension plans to an insurance company using plan assets during the first quarter of 2022. As a result, $527 of the previously recognized pension obligations were transferred and settlement accounting was triggered which resulted in the recognition of a non-cash settlement loss of $130 in Other income (loss), net. In December 2022, the Company received the final true-up from the insurance company for the annuitization, which had an inconsequential impact on the settlement.
The following table provides the net pension and other benefits amounts recognized in Accumulated other comprehensive income (loss):
| | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefits | | Other Benefits |
| At December 31, | | At December 31, |
| 2023 | | 2022 | | 2023 | | 2022 |
Accumulated other comprehensive income (loss): | | | | | | | |
Net actuarial gain (loss) | $ | (76) | | | $ | (76) | | | $ | 24 | | | $ | 29 | |
Prior service credit | 4 | | | 12 | | | 1 | | | 1 | |
| (72) | | | (64) | | | 25 | | | 30 | |
Less: Income taxes | 16 | | | 13 | | | (5) | | | (6) | |
Total | $ | (56) | | | $ | (51) | | | $ | 20 | | | $ | 24 | |
The following table provides components of the total benefit cost (income), inclusive of the net periodic pension and other benefits costs (credits):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefit Costs (Credits) | | Other Benefit Costs (Credits) |
| Years Ended December 31, | | Years Ended December 31, |
| 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 |
Pension benefit cost (income), net: (1) | | | | | | | | | | | |
Service cost | $ | 12 | | | $ | 15 | | | $ | 15 | | | $ | 1 | | | $ | 1 | | | $ | 1 | |
Interest cost | 17 | | | 19 | | | 30 | | | 4 | | | 3 | | | 3 | |
Expected return on plan assets | (23) | | | (35) | | | (59) | | | — | | | — | | | — | |
Amortization, net | (7) | | | 2 | | | 29 | | | (2) | | | (3) | | | (2) | |
Net periodic benefit cost (income) | $ | (1) | | | $ | 1 | | | $ | 15 | | | $ | 3 | | | $ | 1 | | | $ | 2 | |
Settlement cost | 9 | | | 137 | | | 4 | | | — | | | — | | | — | |
| | | | | | | | | | | |
Total benefit cost (income) | $ | 8 | | | $ | 138 | | | $ | 19 | | | $ | 3 | | | $ | 1 | | | $ | 2 | |
____________________________(1)Service costs are included in Costs applicable to sales or General and administrative and the other components of benefit costs are included in Other income (loss), net.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following table provides the components recognized in Other comprehensive income (loss):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefits | | Other Benefits |
| Year Ended December 31, | | Year Ended December 31, |
| 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 |
Net loss (gain) | $ | 8 | | | $ | (20) | | | $ | (48) | | | $ | 3 | | | $ | (20) | | | $ | (5) | |
Amortization, net | 7 | | | (2) | | | (29) | | | 2 | | | 3 | | | 2 | |
Prior service cost | 2 | | | — | | | — | | | — | | | — | | | — | |
Settlements | (9) | | | (137) | | | (4) | | | — | | | — | | | — | |
Total recognized in other comprehensive income (loss) | $ | 8 | | | $ | (159) | | | $ | (81) | | | $ | 5 | | | $ | (17) | | | $ | (3) | |
Total benefit cost (credit) and other comprehensive income (loss) | $ | 16 | | | $ | (21) | | | $ | (62) | | | $ | 8 | | | $ | (16) | | | $ | (1) | |
Actuarial losses in excess of 10 percent of the greater of the projected benefit obligation or market-related value of plan assets are amortized over the expected average remaining future service period of the current active participants.
The significant assumptions used in measuring the Company’s Total benefit cost (income) and Other comprehensive income (loss) were discount rate and expected return on plan assets:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefits | | Other Benefits |
| Year Ended December 31, | | Year Ended December 31, |
| 2023 | | 2022 | | 2021 | | 2023 | | 2022 | | 2021 |
Weighted average assumptions used in measuring the net periodic benefit cost: | | | | | | | | | | | |
Discount rate (1) | 5.63 | % | | 4.09 | % | | 2.77 | % | | 6.10 | % | | 3.03 | % | | 2.70 | % |
Expected return on plan assets | 6.38 | % | | 6.75 | % | | 6.75 | % | | N/A | | N/A | | N/A |
____________________________
(1)Total benefit cost (income) and other comprehensive income (loss) for the Company's U.S. qualified defined benefit pension plan was remeasured due to the settlement accounting required from the retiree annuity purchase on March 25, 2022. The discount rate used for determining the Total benefit cost (income) and other comprehensive income (loss) reflected 3.03% from January 1, 2022 through March 25, 2022 and 4.09% from March 26, 2022 through December 31, 2022.
The expected long-term return on plan assets used for each period in the three years ended December 31, 2023 was determined based on an analysis of the asset returns over multiple time horizons for the Company’s actual plan and for other comparable U.S. corporations. At December 31, 2023, Newmont has estimated the expected long-term return on the qualified pension plan's assets to be 7.25% which will be used in determining future net periodic benefit cost. The Company determines the long-term return on plan assets by considering the most recent capital market forecasts, the plans’ current asset allocation and the actual return on plan assets in comparison to the expected return on assets. The average actual return on the qualified pension plan's assets during the 35 years ended December 31, 2023 approximated 7.65%.
Newmont has two pension calculations for salaried U.S. employees. The first is a “Final Average Pay” pension calculation which is defined as a monthly annuity at age 62 based, in part, on their highest five year eligible earnings and years of credited service. The second is the “Stable Value” calculation which is defined as a lump sum payment to employees upon retirement. The amount of the lump sum is the total of annual accruals based on the employee’s eligible earnings and years of service. The benefits accrued under the Final Average Pay formula were frozen on June 30, 2014 for those eligible employees. Beginning July 1, 2014, all future accruals are based on the terms and features of the Stable Value calculation.
The assumed health care trend rate used to measure the expected cost of benefits is 6.25% in 2024 and decreases gradually each year to 5.00% in 2029, which is used thereafter.
The qualified pension plan employs an independent investment firm which invests the assets of the plans in certain approved funds that correspond to specific asset classes with associated target allocations. The goal of the pension fund investment program is to achieve prudent actuarial funding ratios while maintaining acceptable risk levels. The investment performance of the plans and that of the individual investment firms is measured against recognized market indices. The performance of the pension funds are monitored by an investment committee comprised of members of the Company’s management, which is advised by an independent investment consultant. With the exception of global capital market economic risks, the Company has identified no significant portfolio risks
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
associated to asset classes. The following is a summary of the target asset allocations for 2023 and the actual asset allocation at December 31, 2023:
| | | | | | | | | | | |
Asset Allocation | Target | | Actual at December 31, 2023 |
Fixed income investments | 45 | % | | 45 | % |
World equity fund (U.S. and International equity investments) | 20 | % | | 19 | % |
International equity investments | 12 | % | | 12 | % |
U.S. equity investments | 11 | % | | 11 | % |
Real estate | 8 | % | | 9 | % |
High yield fixed income investments | 4 | % | | 4 | % |
Cash equivalents | — | % | | — | % |
Cash equivalent instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets and are primarily invested in money market securities and U.S. Treasury securities.
Commingled fund investments are managed by several fund managers and are valued at the net asset value per share for each fund. Although the majority of the underlying assets in the funds consist of actively traded equity securities and bonds, the unit of account is considered to be at the fund level. These funds require less than a month’s notice for redemptions and can be redeemed at the net asset value per share.
The following table sets forth the Company’s pension plan assets measured at fair value:
| | | | | | | | | | | |
| Fair Value at December 31, |
| 2023 | | 2022 |
Commingled Funds: | | | |
Fixed income investments | $ | 152 | | | $ | 143 | |
World equity fund (U.S. and International equity investments) | 54 | | | 53 | |
International equity investments | 45 | | | 44 | |
U.S. equity investments | 34 | | | 31 | |
Real estate | 25 | | | 27 | |
High yield fixed income investments | 11 | | | 10 | |
Cash equivalents | 1 | | | 3 | |
Total | $ | 322 | | | $ | 311 | |
Cash Flows
Benefit payments expected to be paid to plan participants are as follows: | | | | | | | | | | | |
| Pension Plan | | Other Benefits Plan |
2024 | $ | 23 | | | $ | 6 | |
2025 | $ | 20 | | | $ | 6 | |
2026 | $ | 22 | | | $ | 6 | |
2027 | $ | 22 | | | $ | 6 | |
2028 | $ | 24 | | | $ | 6 | |
Thereafter | $ | 129 | | | $ | 27 | |
Savings Plans
The Company has one qualified defined contribution savings plan in the U.S. that covers salaried and hourly employees. When an employee meets eligibility requirements, the Company matches 100% of employee contributions of up to 6% of eligible earnings. Hourly employees receive an additional retirement contribution to the participant’s retirement contribution account equal to an amount which is paid and determined by the Company. Currently, the additional retirement contribution is 5% of eligible earnings. Matching contributions are made in cash. In addition, the Company has one non-qualified supplemental savings plan for executive-level employees whose benefits under the qualified plan are limited by federal regulations.
NOTE 12 STOCK-BASED COMPENSATION
The Company has stock incentive plans for directors, executives and eligible employees. Stock incentive awards include RSUs and PSUs. The Company issues new shares of common stock to satisfy option exercises and vesting under all of its stock incentive awards. Prior to 2012, the Company also granted options to purchase shares of stock with exercise prices not less than fair market
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
value of the underlying stock at the date of grant. At December 31, 2023, 21,472,946 shares were authorized for future stock incentive plan awards.
Restricted Stock Units
The Company grants RSUs to directors, executives and eligible employees. Awards are determined as a target percentage of base salary and, for eligible employees, are subject to a personal performance factor. For all RSU grants issued prior to February 2018, RSU awards vest on a straight-line basis over periods of three years or more, unless the employee becomes retirement eligible prior to the vesting date. If an employee becomes retirement eligible and retires prior to the vesting date, the remaining awards vest on a pro rata basis at the retirement date. Starting with the February 2018 grant, if the employee becomes retirement eligible at any point during the vesting period, the entire award is considered earned after the later of the one-year service period from the grant date or the retirement eligible date. Prior to vesting, holders of RSUs do not have the right to vote the underlying shares; however, directors, executives and eligible employees accrue dividend equivalents on their RSUs, which are paid at the time the RSUs vest. The accrued dividend equivalents are not paid if RSUs are forfeited. The RSUs are subject to forfeiture risk and other restrictions. Upon vesting, the employee is entitled to receive one share of the Company’s common stock for each restricted stock unit.
Performance Stock Units
In 2023, the Company amended the PSU plan for eligible executives to incorporate awards that vest based on certain performance-related conditions in addition to the historically granted awards that vest based on certain market-related conditions.
For market-related conditions, the awards vest after the three-year requisite service period based on the Company's total shareholder return compared to the return of a peer group. The grant date fair value of the awards are amortized on a straight-line basis over the required performance period.
The grant date fair value of the market-related conditions for each PSU granted in 2023, 2022 or 2021 was determined using a Monte Carlo valuation model, which requires the input of the following subjective assumptions:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Risk-free interest rate | 4.45% | | 1.61% | | 0.22% |
Volatility range | 34.24% - 81.36% | | 31.78% - 81.77% | | 31.41% - 76.72% |
Weighted-average volatility | 55.24% | | 54.89% | | 53.05% |
Expected term (years) | 3 | | 3 | | 3 |
Weighted-average fair market value | $50.39 | | $77.00 | | $65.41 |
The risk-free interest rates are based on a U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on historical volatility of the Company's stock as well as the stock of the peer group for the three-year performance period.
For performance-related conditions, the awards vest based on the achievement of certain performance metrics which include (i) representation of women on executive team and (ii) Scope 1 and 2 emission reductions related to key milestone projects. The grant date fair value of the awards are amortized over the three-year requisite service period, based on the probability of the performance conditions being met.
The grant date fair value of the performance-related conditions for each PSU granted in 2023 was determined using the Company's stock price on the grant. The weighted-average fair market value for 2023 was $43.34.
Goldcorp Employee Stock Options
In connection with Newmont's acquisition of Goldcorp in 2019, the Company exchanged 3.6 million outstanding Goldcorp options for 1.2 million Newmont options with the right to exercise each Newmont option for one share of Newmont common stock. At December 31, 2022, there were 47,047 options outstanding and exercisable with a weighted average exercise price of $46.33. During 2023, 5,319 options were exercised with a weighted average exercise price of $46.27. During 2023, 41,728 options expired with a weighted average exercise price of $46.34. At December 31, 2023, there were no options outstanding and exercisable.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Stock-Based Compensation Activity
A summary of the status and activity of non-vested RSUs and PSUs for the year ended December 31, 2023 is as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| RSU | | PSU |
| Number of Units | | Weighted Average Grant-Date Fair Value | | Number of Units | | Weighted Average Grant-Date Fair Value |
Non-vested at beginning of year | 1,699,736 | | | $ | 58.07 | | | 1,201,756 | | | $ | 67.05 | |
Granted | 1,544,290 | | | $ | 42.97 | | | 920,009 | | | $ | 52.40 | |
Vested | (867,814) | | | $ | 56.25 | | | (803,442) | | | $ | 59.96 | |
Forfeited | (273,645) | | | $ | 48.65 | | | (124,788) | | | $ | 66.30 | |
Non-vested at end of year | 2,102,567 | | | $ | 48.95 | | | 1,193,535 | | | $ | 60.60 | |
The total intrinsic value and fair value of RSUs that vested in 2023, 2022 and 2021 was $36, $62 and $72, respectively. The total intrinsic value and fair value of PSUs that vested in 2023, 2022 and 2021 was $35, $47 and $21, respectively.
Cash flows resulting from excess tax benefits are classified as part of cash flows from operating activities. Excess tax benefits are realized tax benefits from tax deductions for vested RSUs, settled PSUs, and exercised options in excess of the deferred tax asset attributable to stock compensation costs for such equity awards. The Company recorded $1 in tax deficiencies for the year ended December 31, 2023 and $5 and $3 in excess tax benefits for the years ended December 31, 2022 and 2021, respectively.
At December 31, 2023, there was $55 and $31 of unrecognized compensation costs related to the unvested RSUs and PSUs, respectively. This cost is expected to be recognized over a weighted average period of approximately two years.
The Company recognized stock-based compensation as follows: | | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Stock-based compensation: | | | | | |
Restricted stock units | $ | 52 | | | $ | 49 | | | $ | 47 | |
Performance leveraged stock units | 24 | | | 24 | | | 25 | |
Other (1) | 4 | | | 3 | | | — | |
Total | $ | 80 | | | $ | 76 | | | $ | 72 | |
____________________________
(1)For the years ended December 31, 2023 and December 31, 2022, other includes the Company's proportionate share of NGM stock compensation.
NOTE 13 FAIR VALUE ACCOUNTING
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring (at least annually) and nonrecurring basis 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.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value at December 31, 2023 |
| Total | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | |
Cash and cash equivalents (1) | $ | 3,002 | | | $ | 3,002 | | | $ | — | | | $ | — | |
Restricted cash | 98 | | | 98 | | | — | | | — | |
| | | | | | | |
Trade receivables from provisional concentrate sales, net | 734 | | | — | | | 734 | | | — | |
Long-lived assets (Note 7) | 22 | | | — | | | — | | | 22 | |
Marketable and other equity securities (Note 15) | 252 | | | 243 | | | 9 | | | — | |
Restricted marketable debt securities (Note 15) | 21 | | | 21 | | | — | | | — | |
| | | | | | | |
Derivative assets (Note 14) | 642 | | | — | | | 7 | | | 635 | |
| $ | 4,771 | | | $ | 3,364 | | | $ | 750 | | | $ | 657 | |
Liabilities: | | | | | | | |
Debt (2) | $ | 8,975 | | | $ | — | | | $ | 8,975 | | | $ | — | |
Derivative liabilities (Note 14) | 5 | | | — | | | — | | | 5 | |
| | | | | | | |
| $ | 8,980 | | | $ | — | | | $ | 8,975 | | | $ | 5 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value at December 31, 2022 |
| Total | | Level 1 | | Level 2 | | Level 3 |
Assets: | | | | | | | |
Cash and cash equivalents (1) | $ | 2,877 | | | $ | 2,877 | | | $ | — | | | $ | — | |
Restricted cash | 67 | | | 67 | | | — | | | — | |
Time deposits and other (Note 15) | 846 | | | — | | | 846 | | | — | |
Trade receivables from provisional concentrate sales, net | 364 | | | — | | | 364 | | | — | |
Long-lived assets (Note 7) | 25 | | | — | | | — | | | 25 | |
Marketable and other equity securities (Note 15) | 260 | | | 250 | | | 10 | | | — | |
Restricted marketable debt securities (Note 15) | 27 | | | 23 | | | 4 | | | — | |
Restricted other assets (Note 15) | 8 | | | 8 | | | — | | | — | |
Derivative assets (Note 14) (3) | 208 | | | — | | | 20 | | | 188 | |
| $ | 4,682 | | | $ | 3,225 | | | $ | 1,244 | | | $ | 213 | |
Liabilities: | | | | | | | |
Debt (2) | $ | 5,136 | | | $ | — | | | $ | 5,136 | | | $ | — | |
Derivative liabilities (Note 14) (3) | 3 | | | — | | | — | | | 3 | |
| | | | | | | |
| $ | 5,139 | | | $ | — | | | $ | 5,136 | | | $ | 3 | |
____________________________
(1)Cash and cash equivalents at December 31, 2023 and 2022 include term deposits that have an original maturity of three months or less.
(2)Debt is carried at amortized cost. The outstanding carrying value was $8,874 and $5,571 at December 31, 2023 and December 31, 2022, respectively. The fair value measurement of debt was based on an independent third-party pricing source.
(3)Derivative assets and liabilities include amounts for contingent consideration assets and liabilities, which were separately disclosed in prior filings.
The Company’s cash and cash equivalents and restricted cash (which includes restricted cash and cash equivalents) are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in active markets and are primarily money market securities and U.S. Treasury securities.
The Company's time deposits and other primarily consists of time deposits with an original maturity of more than three months but less than one year and are classified within Level 2 of the fair value hierarchy as they are carried at amortized cost.
The Company’s net trade receivables from provisional metal concentrate sales, which contain an embedded derivative and are subject to final pricing, are valued using quoted market prices based on forward curves for the particular metal. As the contracts themselves are not traded on an exchange, these receivables are classified within Level 2 of the fair value hierarchy.
The Company's long-lived assets consist of long-lived assets at certain sites that were subject to fair value measurement as a result of impairment tests performed for the years ended December 31, 2023 and 2022. The Company performed a non-recurring fair value measurement, classified as Level 3 of the fair value hierarchy, in connection with recoverability and impairment tests performed over long-lived assets and goodwill for all applicable reporting units. Impairment charges related to goodwill were for the full goodwill balance at Peñasquito, Musselwhite and Éléonore, resulting in no remaining balance at December 31, 2023. For further information regarding management’s assessment of these certain long-lived assets and goodwill reporting units, including the assumptions utilized in determining the fair value, refer to Note 7.
The Company’s marketable and other equity securities with readily determinable fair values are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
securities are calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.
The Company’s marketable and other equity securities without readily determinable fair values consists of the Company’s ownership in warrants in publicly traded companies. Warrants are valued using a Black-Scholes model using quoted market prices in active markets of the underlying securities. As the warrants themselves are not traded on the exchange, these equity securities are classified within Level 2 of the fair value hierarchy. At December 31, 2023 and December 31, 2022, these warrants are included in the "Time deposits and other" and the "Marketable and other equity securities" line items in the tables presented above, respectively.
The Company’s restricted marketable debt securities are primarily U.S. government issued bonds and international bonds. The Company’s debt securities held at Yanacocha are classified within Level 1 of the fair value hierarchy, using published market prices of actively traded securities. The Company’s debt securities held at Corporate and Other are classified within Level 1 and Level 2 of the fair value hierarchy. The Level 1 debt securities are valued using published market prices of actively traded securities and the Level 2 debt securities are valued using pricing models which are based on published market inputs for similar, actively traded securities.
The Company's restricted other assets are primarily money market securities with a term longer than three months which are valued using quoted market prices in active markets. As such, they are classified within Level 1 of the fair value hierarchy.
The Company’s derivative instruments consist of the Stream Credit Facility Agreement, the Cadia Power Purchase Agreement, foreign currency fixed forward contracts, and contingent considerations.
The Stream Credit Facility Agreement and the Cadia Power Purchase Agreement were acquired as part of the Newcrest transaction and are financial instruments that meet the definition of a derivative, but are not designated for hedge accounting under ASC 815. These agreements are accounted for at fair value using probability weighted discounted cash flow models and are classified within Level 3 of the fair value hierarchy. Valuation models require a variety of inputs, including long-term metal prices, life of mine production profiles, forward power prices, forecasted power generation volume, discount rates, and inflation assumptions. Refer to Note 14 for further information.
The foreign currency fixed forward contracts are valued using pricing models based on forward curves. The Company’s derivatives trade in liquid markets, and as such, model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy. Refer to Note 14 for further information.
The contingent consideration assets and liabilities are classified within Level 3 of the fair value hierarchy. Changes in the discount rate will result in an inverse impact to the estimated fair value of the contingent consideration assets and liabilities. For certain contingent consideration assets, a change in copper price will result in a corresponding impact to the estimated fair value. Refer to Note 14 for further information.
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 December 31, 2023 and December 31, 2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Description | | At December 31, 2023 | | Valuation technique | | Significant input | | Range, point estimate or average |
Long-lived assets | | $ | 22 | | | Market-multiple | | Various (1) | | | Various (1) | |
Derivative assets: | | | | | | | | | | |
Derivative assets, not designated for hedging (2) | | $ | 424 | | | Discounted cash flow | | Discount rate (3) | | | 6.28 - 10.50 | % |
Contingent consideration assets | | $ | 211 | | | Monte Carlo (4) | | Discount rate (3) | | | 8.04 - 26.43 | % |
Derivative liabilities | | $ | 5 | | | Discounted cash flow | | Discount rate (3) | | | 4.91 - 6.15 | % |
____________________________
(1)Refer to Note 7 for information on the assumptions and inputs specific to the non-recurring fair value measurements performed in connection with recoverability and impairment tests incurred for certain long-lived assets and goodwill reporting units.
(2)Derivative assets, not designated in a hedging relationship relate to the Stream Credit Facility Agreement and the Cadia Power Purchase Agreement acquired as part of the Newcrest transaction. See Note 14 for further information.
(3)The weighted average discount rates used to calculate the Company’s Derivative assets, not designated for hedging, Contingent consideration assets, and Derivative liabilities are 9.03%, 11.18%, and 5.65% respectively. Various other inputs including, but not limited to, metal prices, and future expected production profiles were utilized in determining the fair value of the individual derivatives.
(4)A Monte Carlo valuation model is used for the fair value measurement of the Batu Hijau contingent consideration asset. All other contingent consideration assets are valued using a probability-weighted discounted cash flow where the significant input is the discount rate.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Description | | At December 31, 2022 | | Valuation technique | | Significant input | | Range, point estimate or average |
Long-lived assets | | $ | 25 | | | Income approach | | Various (1) | | | Various (1) | |
Derivative assets (2) | | $ | 188 | | | Monte Carlo (3) | | Discount rate (4) | | | 8.75 - 29.59 | % |
Derivative liabilities (2) | | $ | 3 | | | Discounted cash flow | | Discount rate (4) | | | 5.56 - 7.08 | % |
____________________________(1)Refer to Note 7 for information on the assumptions and inputs specific to the non-recurring fair value measurements performed in connection with recoverability and impairment tests incurred for certain long-lived assets and goodwill reporting units.
(2)Derivative assets and liabilities include amounts for contingent consideration assets and liabilities, which were separately disclosed in prior filings.
(3)A Monte Carlo valuation model is used for the fair value measurement of the Batu Hijau contingent consideration asset. All other contingent consideration assets are valued using a probability-weighted discounted cash flow where the significant input is the discount rate.
(4)The weighted average discount rate used to calculate the Company’s derivative assets and liabilities are 11.86% and 6.07%, respectively. Various other inputs including, but not limited to, metal prices, production profiles and new mineralization discoveries were utilized in determining the fair value of the individual derivatives.
The following tables set forth a summary of changes in the fair value of the Company’s recurring Level 3 financial assets and liabilities: | | | | | | | | | | | | | | | | | | | | | | | |
| Derivative Assets (1) | | Total Assets | | Derivative Liabilities | | Total Liabilities |
Fair value at December 31, 2021 | $ | 171 | | | $ | 171 | | | $ | 5 | | | $ | 5 | |
Additions and settlements | 1 | | | 1 | | | — | | | — | |
Revaluation | 16 | | | 16 | | | (2) | | | (2) | |
Fair value at December 31, 2022 | 188 | | | 188 | | | 3 | | | 3 | |
Additions and settlements | 424 | | | 424 | | | — | | | — | |
Revaluation | 23 | | | 23 | | | 2 | | | 2 | |
| | | | | | | |
Fair value at December 31, 2023 | $ | 635 | | | $ | 635 | | | $ | 5 | | | $ | 5 | |
____________________________
(1)In 2023, the gain recognized on revaluation of derivative assets of $1 and $22 are included in Other Income (loss), net and Net income (loss) from discontinued operations, respectively. In 2022, the (loss) gain recognized on revaluation on derivative assets of $(2) and $18 are included in Other Income (loss), net and Net income (loss) from discontinued operations, respectively.
NOTE 14 DERIVATIVE INSTRUMENTS
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Current derivative assets: | | | |
Derivative assets, not designated for hedging (1) | $ | 115 | | | $ | — | |
Contingent consideration assets | 76 | | | — | |
Hedging instruments | 7 | | | 12 | |
| $ | 198 | | | $ | 12 | |
| | | |
Noncurrent derivative assets: | | | |
Derivative assets, not designated for hedging (1) | $ | 309 | | | $ | — | |
Contingent consideration assets | 135 | | | 188 | |
Hedging instruments | — | | | 8 | |
| $ | 444 | | | $ | 196 | |
| | | |
Noncurrent derivative liabilities: (2) | | | |
Contingent consideration liabilities | $ | 8 | | | $ | 3 | |
____________________________(1)Derivative assets not designated in a hedging relationship relate to the Stream Credit Facility Agreement and the Cadia Power Purchase Agreement acquired as part of the Newcrest transaction. See below for further information.
(2)Included in Other non-current liabilities in the Company’s Consolidated Balance Sheets.
Acquired Derivatives
On November 6, 2023, the Company acquired certain derivatives instruments through the Newcrest transaction.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Gold and Fuel Hedge Programs
Both the gold and fuel hedge programs acquired through the Newcrest transaction were settled during November 2023. The settlement of the gold and fuel hedge programs resulted in a net gain of $7 which was recognized in earnings in Other income (loss), net in the Company's Consolidated Statement of Operations.
Stream Credit Facility Agreement ("SCFA")
The SCFA is a non-revolving credit facility in relation to the Fruta del Norte mine, which is wholly owned and operated by Lundin Gold Inc. ("Lundin Gold") in which the Company holds a 32.0% equity interest (refer to Note 15 for further information). The SCFA has a face value of $150 to be repaid in cash based on the Fruta del Norte mine's gold and silver production. The amount of each monthly payment is the sum of the following: (i) 7.75% of refined gold processed in the prior month, multiplied by the excess of the gold price over $400 per ounce (subject to an inflationary adjustment), until 350,000 ounces is reached; and (ii) 100% of refined silver processed in the prior month, multiplied by the excess of the silver price over $4 per ounce (subject to an inflationary adjustment), until 6 million ounces is reached. Lundin Gold also has the option to prepay (i) 50% of the remaining SCFA on June 30, 2024 for $150 and/or (ii) the other 50% of the remaining SCFA on June 30, 2026 for $225.
The SCFA is a financial instrument that meets the definition of a derivative and is accounted for at fair value using a probability weighted discounted cash flow model, but is not designated for hedge accounting under ASC 815. Changes in the fair value are recognized in Other income (loss), net in the Company's Consolidated Statement of Operations. The SCFA meets the definition of a derivative as the principal and interest payments are calculated based on the future prices and production profiles of gold and silver, which are not clearly and closely related to the economic characteristics and risks of the host non-revolving credit facility. The SCFA has a stated interest rate of 7.5%. Repayments in excess of the principal and stated interest rate amount are recognized in Other income (loss), net in the Company's Consolidated Statement of Operations. The fair value of the SCFA was $276 at December 31, 2023, of which $113 is recognized in the current portion of Derivative assets and $163 is recognized in non-current Derivative assets in the Company’s Consolidated Balance Sheets.
Cadia Power Purchase Agreement ("Cadia PPA")
The Cadia PPA is a 15-year renewable power purchase agreement. The Cadia PPA will provide the Company with access to large scale generation certificates which the Company intends to surrender to achieve a reduction in its greenhouse gas emissions. The Cadia PPA is a financial instrument that meets the definition of a derivative and is accounted for at fair value using a probability weighted discounted cash flow model, but is not designated for hedge accounting under ASC 815. Changes in the fair value are recognized in Other income (loss), net in the Company's Consolidated Statement of Operations. The fair value of the Cadia PPA was $148 at December 31, 2023, of which $2 is recognized in the current portion of Derivative assets and $146 is recognized in non-current Derivative assets in the Company’s Consolidated Balance Sheets.
Contingent Consideration Assets and Liabilities
Contingent consideration assets and liabilities are comprised of contingent consideration to be received or paid by the Company in conjunction with various sales of assets and investments with future payment contingent upon meeting certain milestones. These contingent consideration assets and liabilities are accounted for at fair value using probability weighted discounted cash flow models and consist of financial instruments that meet the definition of a derivative, but are not designated for hedge accounting under ASC 815. Refer to Note 13 for further information regarding the fair value of the contingent consideration assets and liabilities.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company had the following contingent consideration assets and liabilities at December 31, 2023 and 2022:
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Contingent Consideration Assets: | | | |
Batu Hijau and Elang (1) | $ | 161 | | | $ | 139 | |
Red Lake (2) | 39 | | | 39 | |
Cerro Blanco (2) | 6 | | | 5 | |
Maverix (2)(3) | 4 | | | 4 | |
Other (2) | 1 | | | 1 | |
| $ | 211 | | | $ | 188 | |
| | | |
Contingent Consideration Liabilities: (4) | | | |
Norte Abierto | $ | 3 | | | $ | 1 | |
Red Chris (5) | 3 | | | — | |
Galore Creek | 2 | | | 2 | |
| $ | 8 | | | $ | 3 | |
____________________________(1)Contingent consideration related to the sale of PT Newmont Nusa Tenggara in 2016. Refer to Note 1 for additional information. At December 31, 2023, $76 is included in the current portion of Derivative assets and $85 is included in Derivative assets in the Company’s Consolidated Balance Sheets. At December 31, 2022, $139 is included in Derivative assets in the Company’s Consolidated Balance Sheets.
(2)Included in the current portion of Derivative assets in the Company’s Consolidated Balance Sheets.
(3)Refer to Note 15 for further information on the contingent consideration assets related to Maverix.
(4)Included in Other non-current liabilities in the Company’s Consolidated Balance Sheets.
(5)Acquired through the Newcrest transaction and is included in Other current liabilities in the Company’s Consolidated Balance Sheets.
Hedging Instruments
In May 2023, the Company entered into C$348 of CAD-denominated and A$648 of AUD-denominated fixed forward contracts to mitigate variability in the USD functional cash flows related to the CAD-denominated and AUD-denominated operating expenditures expected to be incurred between June and December 2023 included in the Company's operating mines located in Canada and Australia, respectively. The fixed forward contracts were transacted for risk management purposes. The Company designated the CAD-denominated and AUD-denominated fixed forward contracts as foreign currency cash flow hedges against the forecasted CAD-denominated and AUD-denominated operating expenditures, respectively. The hedge programs matured and no amounts remain in Accumulated other comprehensive income (loss) as of December 31, 2023.
In October 2022, the Company entered into A$574 of AUD-denominated fixed forward contracts to mitigate variability in the USD functional cash flows related to the AUD-denominated capital expenditures expected to be incurred in 2023 and 2024 during the construction and development phase of the Tanami Expansion 2 project included in the Company's Tanami segment. The fixed forward contracts were transacted for risk management purposes. The Company has designated the fixed forward contracts as foreign currency cash flow hedges against the forecasted AUD-denominated Tanami Expansion 2 capital expenditures.
To minimize credit risk, the Company only enters into transactions with counterparties that meet certain credit requirements and periodically reviews the creditworthiness of these counterparties. The Company believes that the risk of counterparty default is low and its exposure to credit risk is minimal.
The unrealized changes in fair value have been recorded in Accumulated other comprehensive income (loss) and are reclassified to income during the period in which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. If the underlying hedge transaction becomes probable of not occurring, the related amounts will be reclassified to earnings immediately. For the foreign currency cash flow hedges related to the Tanami Expansion 2 project, amounts recorded in Accumulated other comprehensive income (loss) will be reclassified to earnings through Depreciation and amortization after the project reaches commercial production.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following table provides the fair value of the Company’s derivative instruments designated as cash flow hedges:
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Derivative Assets: | | | |
Foreign currency cash flow hedges, current (1) | $ | 7 | | | $ | 12 | |
Foreign currency cash flow hedges, non-current (2) | — | | | 8 | |
| $ | 7 | | | $ | 20 | |
| | | |
| | | |
| | | |
| | | |
| | | |
____________________________
(1)Included in Derivative assets in the Company’s Consolidated Balance Sheets.
(2)Included in non-current Derivative assets in the Company’s Consolidated Balance Sheets.
The following table provides the losses (gains) recognized in earnings related to the Company's derivative instruments designated for hedging:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Loss (gain) on cash flow hedges: | | | | | |
Foreign currency cash flow hedges (1) | $ | 19 | | | $ | — | | | $ | — | |
Interest rate contracts (2) | 5 | | | 6 | | | 8 | |
Operating cash flow hedges (3) | — | | | — | | | 1 | |
| $ | 24 | | | $ | 6 | | | $ | 9 | |
____________________________(1)Foreign currency cash flow hedges relate to contracts entered into, and subsequently settled, to mitigate the variability of CAD and AUD denominated operating expenditures. The amounts are reclassified out of Accumulated other comprehensive income (loss) into earnings in the month that the operating expenditures are incurred. The losses (gains) recognized in earnings are included in Costs applicable to sales in the Company’s Consolidated Statement of Operations.
(2)Interest rate contracts relate to swaps entered into, and subsequently settled, associated with the issuance of the 2022 Senior Notes, 2035 Senior Notes, 2039 Senior Notes, and 2042 Senior Notes. The related gains and losses are reclassified from Accumulated other comprehensive income (loss) and amortized to Interest expense, net over the term of the respective hedged notes. During the year ended December 31, 2021, $1 was reclassified to Other income (loss), net as a result of the redemption and tender offers of the 2022 Senior Notes. Refer to Note 20 for additional information.
(3)Operating cash flow hedges relate to contracts entered into, and subsequently settled, to mitigate the variability of operating costs primarily related to diesel price fluctuations. The amounts are reclassified out of Accumulated other comprehensive income (loss) into earnings as diesel costs are incurred. The gains (losses) recognized in earnings are included in Costs applicable to sales in the Company’s Consolidated Statement of Operations.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 15 INVESTMENTS
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Time deposits and other investments: | | | |
Time deposits and other (1) | $ | — | | | $ | 846 | |
Marketable equity securities | 23 | | | 34 | |
| $ | 23 | | | $ | 880 | |
| | | |
Non-current: | | | |
Marketable and other equity securities | $ | 229 | | | $ | 226 | |
| | | |
Equity method investments: | | | |
Pueblo Viejo Mine (40.0%) | $ | 1,489 | | | $ | 1,435 | |
NuevaUnión Project (50.0%) | 959 | | | 956 | |
Lundin Gold Inc. (32.0%) (2) | 938 | | | — | |
Norte Abierto Project (50.0%) | 528 | | | 518 | |
Maverix Metals Inc. (—% and 28.5%, respectively) (3) | — | | | 143 | |
Other (2) | — | | | — | |
| 3,914 | | | 3,052 | |
| $ | 4,143 | | | $ | 3,278 | |
| | | |
Non-current restricted investments: (4) | | | |
Marketable debt securities | $ | 21 | | | $ | 27 | |
Other assets | — | | | 8 | |
| $ | 21 | | | $ | 35 | |
____________________________(1)At December 31, 2022, Time deposits and other primarily includes time deposits with an original maturity of more than three months but less than one year of $829 and related accrued interest of $9. All time deposits with an original maturity of more than three months but less than one year matured as of December 31, 2023.
(2)On November 6, 2023, as a part of the Newcrest transaction, the Company acquired interests in Lundin Gold and Azucar Minerals Ltd ("Azucar"). Refer to "Lundin Gold" below for further information on Lundin Gold. At December 31, 2023, Azucar is included in Other.
(3)In January 2023, Maverix was fully acquired by Triple Flag. The Company's ownership interest in the newly combined company was subsequently sold in March 2023. Refer to "Maverix Metals, Inc." below for further information.
(4)Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations and are included in Other non-current assets. For further information regarding these amounts, refer to Note 6.
Equity Method Investments
Income (loss) from the Company's equity method investments is recognized in Equity income (loss) of affiliates, which for the years ended December 31, 2023, 2022 and 2021 primarily consists of income of $63, $102 and $166, respectively, from the Pueblo Viejo mine.
See below for further information on the Company's equity method investments.
Pueblo Viejo
The Pueblo Viejo mine is located in the Dominican Republic and commenced operations in September 2014. Barrick operates and holds the remaining interest in the mine. At acquisition, the carrying value of Newmont’s equity investment in Pueblo Viejo was lower than the underlying net assets of its investment resulting in a basis difference, which is being amortized into Equity income (loss) of affiliates over the remaining estimated useful life of the mine. As of December 31, 2023 the net basis difference was $224.
In June 2009, Goldcorp entered into a $400 shareholder loan agreement with Pueblo Viejo with a term of fifteen years. In April 2012, additional funding of $300 was issued to Pueblo Viejo with a term of twelve years. Both loans bear interest at 95% of LIBOR plus 2.95% which is compounded semi-annually in arrears on February 28 and August 31 of each year. The loans have no set repayment terms. Both loans were fully repaid in December 2022.
In November 2020, the Company and Barrick entered into an agreement with Pueblo Viejo to provide additional funding of up to $1,300 ($520 attributable to Newmont's 40% ownership interest) through a loan facility for the expansion of Pueblo Viejo's operations (“Loan Facility”). Under the terms of the agreement, the Company and Barrick will distribute funds based on their respective proportionate ownership interest in Pueblo Viejo. The Loan Facility bears interest at 95% of the 6-month SOFR plus 4.25% which is compounded semi-annually in arrears on February 28 and August 31 of each year. The Loan Facility will be provided in two tranches of
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
$800 and $500, respectively. Unused proceeds under the first tranche will be available for use under the second tranche. The tranches mature February 28, 2032 and February 28, 2035, respectively.
As of December 31, 2023 and December 31, 2022, the Company had outstanding shareholder loans to Pueblo Viejo of $429 and $356, with accrued interest of $14 and $8, respectively. All loans receivable and accrued interest are included in the Pueblo Viejo equity method investment balance.
In September 2019, the Company and Barrick entered into a $70 revolving loan facility (“Revolving Facility”) to provide short-term financing to Pueblo Viejo. The Company will fund 40% of the borrowings based on its ownership interest in Pueblo Viejo. The Revolving Facility matures on December 31, 2024 and bears interest using the 3-month SOFR plus 2.24%. There were no borrowings outstanding under the Revolving Facility as of December 31, 2023 and December 31, 2022.
The Company purchases its portion (40.0%) 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 $448 and $530 for the years ended December 31, 2023 and December 31, 2022, respectively. These purchases, net of subsequent sales, were 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 December 31, 2023 or December 31, 2022.
Lundin Gold Inc.
Lundin Gold is a Canadian based mine development and operating company which wholly owns and operates the Fruta del Norte gold mine in Ecuador. On November 6, 2023, as a part of the Newcrest transaction, the Company acquired 32.0% interest in Lundin Gold. The Company accounts for Lundin as an equity method investment on a quarter lag. At acquisition, the carrying value of Newmont’s equity investment in Lundin Gold was higher than the underlying net assets of its investment resulting in a basis difference. This basis difference is being amortized into Equity income (loss) of affiliates over the remaining estimated useful life of the mine. As of December 31, 2023 the net basis difference was $640.
The Company purchases 50% of gold produced from Lundin Gold at a price determined based on delivery dates and a defined quotational period and resells those ounces to third parties. Total payments made to Lundin Gold for gold purchased were $30 for the year ended December 31, 2023. These purchases, net of subsequent sales, were included in Other income (loss), net and the net amount is immaterial. At December 31, 2023, there was $13 payable due to Lundin Gold for gold purchases.
NuevaUnión
The NuevaUnión project is located in Chile and is currently in the Company’s development project pipeline. The project is jointly managed by Newmont and Teck Resources, who holds the remaining 50% interest. At acquisition, the carrying value of Newmont’s equity investment in NuevaUnión was lower than the underlying net assets of its investment resulting in a basis difference. This basis difference will be amortized into Equity income (loss) of affiliates over the remaining estimated useful life of the mine beginning when commercial production is declared. As of December 31, 2023 the net basis difference was $67.
Norte Abierto
The Norte Abierto project is located in Chile and is currently in the Company’s development project pipeline. The project is jointly managed by Newmont and Barrick, who holds the remaining 50.0% interest. Newmont owed deferred payments to Barrick to be satisfied through funding a portion of Barrick’s share of Norte Abierto project expenditures.
In December 2023, the Company entered into an agreement with Barrick and subsequently settled the deferred payments. Immediately prior to settlement, there were $23 and $73 related to these deferred payments included in Other current liabilities and Other non-current liabilities on the Consolidated Balance Sheet, respectively. Per the terms of the agreement, the settlement occurred through a cash payment of approximately $60 and funding of prefeasibility study costs for the Norte Abierto project. The Company has agreed to fund both its and Barrick's portions of prefeasibility study costs, up to a total of $60, to occur in the near future. If prefeasibility costs exceed the agreed upon $60, the costs will be paid proportionately by the Company and Barrick. The $30 related to the prefeasibility study costs associated with Barrick's portion, of which $20 is recognized within Other current liabilities and $10 within Other non-current liabilities, will be satisfied as funding occurs.
At December 31, 2023 the carrying value of Newmont’s equity investment in Norte Abierto was lower than the underlying net assets of its investment by $209. This basis difference will be amortized into Equity income (loss) of affiliates over the remaining estimated useful life of the mine beginning when commercial production is declared.
Maverix Metals, Inc.
In January 2023, Triple Flag acquired all of the issued and outstanding common shares of Maverix, resulting in Newmont holding a 7.5% ownership interest in the combined company. Prior to close, Newmont held 28.5% of Maverix’s outstanding common shares. In the first quarter of 2023, the Company sold all of its common shares in Triple Flag. As a result, a net gain of $36 was recognized in the first quarter of 2023, which is included in Other income, net in the Consolidated Statement of Operations. In the
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
second quarter of 2023, the Company exercised all of its warrants held in Triple Flag and sold all of the underlying shares, resulting in an immaterial gain.
NOTE 16 INVENTORIES
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Materials and supplies | $ | 1,247 | | | $ | 750 | |
In-process | 160 | | | 123 | |
Concentrate | 134 | | | 47 | |
Precious metals | 122 | | | 59 | |
| $ | 1,663 | | | $ | 979 | |
In 2023, the Company recorded write-downs of $37 and $15, classified as components of Costs applicable to sales and Depreciation and amortization, respectively. Of the write-downs in 2023, $35 was related to Peñasquito, $5 to Éléonore, $4 to Porcupine, $3 to Cerro Negro, $3 to Brucejack, and $2 to Telfer. Of the $497 increase in materials and supplies, $432 is related to acquired materials and supplies inventory from the Newcrest transaction.
NOTE 17 STOCKPILES AND ORE ON LEACH PADS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At December 31, 2023 | | At December 31, 2022 |
| Stockpiles | | Ore on Leach Pads | | Total | | Stockpiles | | Ore on Leach Pads | | Total |
Current | $ | 746 | | | $ | 233 | | | $ | 979 | | | $ | 480 | | | $ | 294 | | | $ | 774 | |
Non-current | 1,532 | | | 403 | | | 1,935 | | | 1,391 | | | 325 | | | 1,716 | |
Total | $ | 2,278 | | | $ | 636 | | | $ | 2,914 | | | $ | 1,871 | | | $ | 619 | | | $ | 2,490 | |
In 2023, the Company recorded write-downs of $60 and $15, classified as components of Costs applicable to sales and Depreciation and amortization, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs in 2023, $52 was related to NGM, $11 to Peñasquito, $6 to Yanacocha, $2 to Akyem, $2 to Éléonore, and $2 to Telfer.
In 2022, the Company recorded write-downs of $156 and $53, classified as components of Costs applicable to sales and Depreciation and amortization, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs in 2022, $71 was related to NGM, $49 to Yanacocha, $45 to CC&V, $28 to Akyem, $12 to Ahafo, and $4 to Merian.
In 2021, the Company recorded write-downs of $45 and $19, classified as components of Costs applicable to sales and Depreciation and amortization, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs in 2021, $25 to Yanacocha, $21 to CC&V, and $18 to NGM.
NOTE 18 PROPERTY, PLANT AND MINE DEVELOPMENT
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciable Life (in years) | | At December 31, 2023 | | At December 31, 2022 |
| | Cost | | Accumulated Depreciation | | Net Book Value | | Cost | | Accumulated Depreciation | | Net Book Value |
Land | | | $ | 347 | | | $ | — | | | $ | 347 | | | $ | 281 | | | $ | — | | | $ | 281 | |
Facilities and equipment (1) | 1-30 | | 25,804 | | | (12,925) | | | 12,879 | | | 19,044 | | | (11,392) | | | 7,652 | |
Mine development | 1-30 | | 7,223 | | | (3,775) | | | 3,448 | | | 6,413 | | | (3,787) | | | 2,626 | |
Mineral interests | 1-30 | | 19,450 | | | (3,360) | | | 16,090 | | | 13,276 | | | (2,973) | | | 10,303 | |
Construction-in-progress | | | 4,799 | | | — | | | 4,799 | | | 3,211 | | | — | | | 3,211 | |
| | | $ | 57,623 | | | $ | (20,060) | | | $ | 37,563 | | | $ | 42,225 | | | $ | (18,152) | | | $ | 24,073 | |
____________________________
(1)At December 31, 2023 and 2022, Facilities and equipment include finance lease right of use assets of $531 and $558, respectively.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Depreciable Life (in years) | | At December 31, 2023 | | At December 31, 2022 |
Mineral Interests | | Cost | | Accumulated Depreciation | | Net Book Value | | Cost | | Accumulated Depreciation | | Net Book Value |
Production stage | 1-30 | | $ | 13,155 | | | $ | (3,360) | | | $ | 9,795 | | | $ | 9,299 | | | $ | (2,973) | | | $ | 6,326 | |
Development stage | (1) | | 1,277 | | | — | | | 1,277 | | | 520 | | | — | | | 520 | |
Exploration stage | (1) | | 5,018 | | | — | | | 5,018 | | | 3,457 | | | — | | | 3,457 | |
| | | $ | 19,450 | | | $ | (3,360) | | | $ | 16,090 | | | $ | 13,276 | | | $ | (2,973) | | | $ | 10,303 | |
____________________________
(1)These amounts are currently non-depreciable as these mineral interests have not reached production stage.
| | | | | | | | | | | |
| At December 31, |
Construction-in-Progress | 2023 | | 2022 |
CC&V | $ | 6 | | | $ | 32 | |
Musselwhite | 24 | | | 9 | |
Porcupine | 93 | | | 140 | |
Éléonore | 29 | | | 12 | |
Red Chris (1) | 59 | | | — | |
Brucejack (1) | 110 | | | — | |
Peñasquito | 196 | | | 183 | |
Merian | 31 | | | 26 | |
Cerro Negro | 40 | | | 20 | |
Yanacocha (2) | 920 | | | 638 | |
Boddington | 69 | | | 51 | |
Tanami (3) | 948 | | | 666 | |
Cadia (1) | 400 | | | — | |
Telfer (1) | 8 | | | — | |
Lihir (1) | 181 | | | — | |
Ahafo (4) | 650 | | | 487 | |
Akyem | 45 | | | 26 | |
NGM | 229 | | | 149 | |
Corporate and Other (5) | 761 | | | 772 | |
| $ | 4,799 | | | $ | 3,211 | |
____________________________(1)Sites acquired through the Newcrest transaction. Refer to Note 3 for further information.
(2)Primarily relates to the Sulfides project and other infrastructure at Yanacocha at December 31, 2023 and 2022.
(3)Primarily relates to the Tanami Expansion 2 project at December 31, 2023 and 2022.
(4)Primarily relates to the Ahafo North project and other infrastructure at Ahafo at December 31, 2023 and 2022.
(5)Primarily relates to engineering and construction at Conga at December 31, 2023 and 2022. There have been no new costs capitalized during 2023 or 2022 for the Conga project. In the third quarter of 2021, the Company reclassified the Conga mill assets, previously included within construction-in-progress with a carrying value of $593, as held for sale, included in Other current assets on the Consolidated Balance Sheet as of December 31, 2023. Refer to Note 2 for further information.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 19 GOODWILL
Changes in the carrying amount of goodwill by reportable segment were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2021 | | Impairment (1) | | Balance at December 31, 2022 | | Impairment (1) | | Acquisitions | | Balance at December 31, 2023 |
Musselwhite | $ | 293 | | | $ | — | | | $ | 293 | | | $ | (293) | | | $ | — | | | $ | — | |
Porcupine | 341 | | | (341) | | | — | | | — | | | — | | | — | |
Éléonore | 246 | | | — | | | 246 | | | (246) | | | — | | | — | |
Red Chris (2) | — | | | — | | | — | | | — | | | 397 | | | 397 | |
Brucejack (2) | — | | | — | | | — | | | — | | | 1,087 | | | 1,087 | |
Peñasquito (3) | 1,164 | | | — | | | 1,164 | | | (1,210) | | | — | | | — | |
Cerro Negro | 459 | | | (459) | | | — | | | — | | | — | | | — | |
Cadia (2) | — | | | — | | | — | | | — | | | 565 | | | 565 | |
| | | | | | | | | | | |
Lihir (2) | — | | | — | | | — | | | — | | | 695 | | | 695 | |
NGM | 268 | | | — | | | 268 | | | (11) | | | — | | | 257 | |
| $ | 2,771 | | | $ | (800) | | | $ | 1,971 | | | $ | (1,760) | | | $ | 2,744 | | | $ | 3,001 | |
____________________________
(1)Accumulated impairment of $2,560 consists of impairment charges incurred in 2022 and 2023 of $800 and $1,760, respectively.
(2)Sites acquired through the Newcrest transaction. Refer to Note 3 for further information.
(3)For the year ended December 31, 2023, we recognized a prior period adjustment of $46 to goodwill and deferred tax liability for Peñasquito relating to a prior acquisition. This adjustment resulted in an increase to goodwill, which was fully offset by a current period impairment charge.
NOTE 20 DEBT
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| At December 31, 2023 | | At December 31, 2022 |
| Current | | Non-Current | | Fair Value (1) | | Current | | Non-Current | | Fair Value (1) |
$2,000 Bilateral Bank Facilities due 2024 and 2026 (2) | $ | 1,923 | | | $ | — | | | $ | 1,927 | | | $ | — | | | $ | — | | | $ | — | |
$700 2.80% Senior Notes due October 2029 | — | | | 693 | | | 645 | | | — | | | 692 | | | 603 | |
$650 3.25% Senior Notes due May 2030 | — | | | 557 | | | 597 | | | — | | | — | | | — | |
$1,000 2.25% Senior Notes due October 2030 | — | | | 989 | | | 872 | | | — | | | 987 | | | 810 | |
$1,000 2.60% Senior Notes due July 2032 | — | | | 992 | | | 868 | | | — | | | 991 | | | 811 | |
$600 5.875% Senior Notes due April 2035 | — | | | 580 | | | 654 | | | — | | | 579 | | | 619 | |
$1,100 6.25% Senior Notes due October 2039 | — | | | 861 | | | 986 | | | — | | | 860 | | | 933 | |
$500 5.75% Senior Notes due November 2041 | — | | | 456 | | | 535 | | | — | | | — | | | — | |
$1,000 4.875% Senior Notes due March 2042 | — | | | 986 | | | 991 | | | — | | | 986 | | | 930 | |
$450 5.45% Senior Notes due June 2044 | — | | | 480 | | | 462 | | | — | | | 481 | | | 430 | |
$500 4.20% Senior Notes due May 2050 | — | | | 361 | | | 438 | | | — | | | — | | | — | |
Debt issuance costs on Corporate Revolving Credit Facilities | — | | | (4) | | | — | | | — | | | (5) | | | — | |
| $ | 1,923 | | | $ | 6,951 | | | $ | 8,975 | | | $ | — | | | $ | 5,571 | | | $ | 5,136 | |
____________________________(1)The estimated fair value of the Senior Notes was determined by an independent third-party pricing source and may or may not reflect the actual trading value of this debt. Carrying value of the bilateral bank facilities approximates fair value.
(2)Interest rates on the bilateral bank facilities are variable. See "Corporate Revolving Credit Facilities and Letters of Credit Facilities" below for further information.
All outstanding Senior Notes are unsecured and rank equally with one another.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Maturities for the next five years, and thereafter, are as follows:
| | | | | |
Year Ending December 31, | |
2024 | $ | 1,231 | |
2025 | — | |
2026 | 692 | |
2027 | — | |
2028 | — | |
Thereafter | 7,274 | |
Total face value of debt | 9,197 | |
Unamortized premiums, discounts, and issuance costs | (323) | |
Debt | $ | 8,874 | |
Corporate Revolving Credit Facilities and Letters of Credit Facilities
In connection with the Newcrest transaction, the Company acquired bilateral bank debt facilities held with 13 banks. The bilateral bank debt facilities have a total borrowing capacity of $2,000, of which $77 is available at December 31, 2023. These are committed unsecured revolving facilities, individually negotiated and documented with each bank but with similar terms and conditions. The facilities are on customary terms and conditions and include certain financial covenants. Interest is based on Term SOFR plus a credit spread and margin. At December 31, 2023, there was $1,923 in outstanding borrowings on the facilities with $462 due February 7, 2024, $769 due March 1, 2024, and $692 due March 1, 2026. The facilities due February 7, 2024 include 3 banks that exercised their option to call the related facility under the change of effective control event. On February 7, 2024, the Company repaid the 3 non-consenting banks with a total borrowing capacity of $462.
On February 15, 2024, the Company completed an amendment and restatement of its existing $3,000 revolving credit agreement dated as of April 4, 2019 (the “Existing Credit Agreement”). The Existing Credit Agreement was entered into with a syndicate of financial institutions and provided for borrowings in U.S. dollars and contained a letter of credit sub-facility. Per the amendment, the expiration date of the credit facility was extended from March 30, 2026 to February 15, 2029 and the borrowing capacity was increased to $4,000. Interest is based on Term SOFR plus a credit spread adjustment and margin. Facility fees vary based on the credit ratings of the Company’s senior, uncollateralized, non-current debt. Debt covenants under the amendment are substantially the same as the Existing Credit Agreement.
On February 20, 2024, the Company completed a drawdown on the $4,000 revolving credit agreement and used the proceeds to repay the remaining $1,461 owed on the remaining bilateral bank debt facilities.
At December 31, 2023, the Company had no borrowings outstanding under the facility. There were no amounts outstanding on the letters of credit sub-facility at December 31, 2023 and 2022, respectively.
At December 31, 2023 and 2022 the Company had letters of credit outstanding in the amounts of $1,158 and $995, respectively, of which $1,015 and $848 represented guarantees for reclamation obligations, respectively. None of these letters of credit have been drawn on for reclamation obligations as of December 31, 2023 and 2022.
2022 Senior Notes
In December 2021, the Company fully redeemed all of the outstanding 2022 Senior Notes. The redemption price of $496 equaled the principal amount of the outstanding 2022 Senior Notes of $492 plus accrued and unpaid interest in accordance with the terms of the 2022 Notes.
2023 Senior Notes
In December 2021, the Company purchased approximately $89 and $4 of its 2023 Newmont Senior Notes and 2023 Goldcorp Senior Notes, respectively, through debt tender offers. The tender offers were completed with the proceeds from the issuance of the 2032 Senior Notes. See below for additional information on the 2032 Senior Notes. In December 2021, subsequent to the debt tender offer, the Company extinguished the outstanding 2023 Newmont Senior Notes by way of defeasance with funds in trust, which were subsequently used by the trust for full redemption in January 2022. The redemption price of $246 equaled the principal amount of the outstanding 2023 Newmont Senior Notes of $234 plus accrued and unpaid interest and future coupon payments in accordance with the terms of the 2023 Newmont Senior Notes.
In January 2022, the Company fully redeemed all of the outstanding 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.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
2030 Senior Notes
In March 2020, the Company completed a public offering of $1,000 unsecured Senior Notes due October 1, 2030 (“2030 Senior Notes”). Net proceeds from the 2030 Senior Notes were $985. The 2030 Senior Notes pay interest semi-annually at a rate of 2.25% per annum. The proceeds from this issuance, supplemented with cash from the Company's balance sheet, were used to fund the debt tender offers of the 2023 Newmont Senior Notes and the 2023 Goldcorp Senior Notes in 2020.
May 2030 Senior Notes, November 2041 Senior Notes, and May 2050 Senior Notes
Subsequent to implementation of the Newcrest transaction, the Company completed a like-for-like exchange for any and all of the outstanding notes issued by Newcrest Finance Pty Ltd, a wholly owned subsidiary of Newmont ("Newcrest Finance"), with an aggregate principal amount of $1,650, for new notes issued by Newmont and Newcrest Finance and nominal cash consideration. The new notes, issued December 26, 2023, and the existing Newcrest notes that were not tendered for exchange, consist of $625 and $25 of 3.25% notes due May 13, 2030 (the "May 2030 Senior Notes" and the "2030 Newcrest Senior Notes", respectively), $460 and $40 of 5.75% notes due November 15, 2041 (the "November 2041 Senior Notes" and the "2041 Newcrest Senior Notes", respectively), and $486 and $14 of 4.20% notes due May 13, 2050, respectively (the "May 2050 Senior Notes" and the "2050 Newcrest Senior Notes", respectively).
2032 Senior Notes
In December 2021, the Company completed a public offering of $1,000 sustainability-linked, unsecured convertible Senior Notes due July 15, 2032 ("2032 Senior Notes") for net proceeds of approximately $992. Per the terms of the 2032 Senior Notes, the 2032 Senior Notes pay interest semi-annually at a rate of 2.60% per annum and are subject to an increase if the Company fails to reach stated targets by 2030. Beginning in 2031, the coupon of the 2032 Senior Notes is linked to the Company’s performance against the 2030 emissions reduction targets and the representation of women in senior leadership roles targets. The maximum adjustment resulting from the sustainability-linked objectives is 0.60%. The proceeds from this issuance were used to redeem the remaining balance of the 2023 Newmont Senior Notes and the 2023 Goldcorp Senior Notes in December 2021 and January 2022, respectively.
Debt Covenants
The Company’s senior notes and revolving credit facility contain various covenants and default provisions including payment defaults, limitation on liens, leases, sales and leaseback agreements and merger restrictions. Furthermore, the Company’s senior notes and corporate revolving credit facility contain covenants that include, limiting the sale of all or substantially all of the Company’s assets, certain change of control provisions and a negative pledge on certain assets.
The corporate revolving credit facility contains a financial ratio covenant requiring the Company to maintain a net debt (total debt net of cash and cash equivalents) to total capitalization ratio of less than or equal to 62.50% in addition to the covenants noted above. The bilateral bank debt facilities contain the following covenants: (i) tangible net worth not less than $1 billion; (ii) an interest coverage ratio, calculated on a 12 month rolling basis, to be greater than or equal to 2.75:1; and (iii) and total net liabilities to tangible net worth to not exceed 1.75:1.
At December 31, 2023 and 2022, we were in compliance with all existing debt covenants and provisions related to potential defaults, other than the bilateral facilities which have been repaid as of the date of this report.
NOTE 21 LEASE AND OTHER FINANCING OBLIGATIONS
The Company primarily has operating and finance leases for corporate and regional offices, processing facilities, mining equipment, power generation, and transportation. These leases have a remaining lease term of less than 1 year to 34 years, some of which may include options to extend the lease for up to 15 years, and some of which may include options to terminate the lease within 1 year. Some of the Company's leases include payments that vary based on the Company’s level of usage and operations. These variable payments are not included within ROU assets and lease liabilities in the Consolidated Balance Sheets. Additionally, short-term leases, which have an initial term of 12 months or less, are not recorded in the Consolidated Balance Sheets.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Total lease cost includes the following components:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 |
Operating lease cost | $ | 23 | | | $ | 28 | |
Finance lease cost: | | | |
Amortization of ROU assets | 78 | | | 78 | |
Interest on lease liabilities | 32 | | | 34 | |
| 110 | | | 112 | |
Variable lease cost | 298 | | | 332 | |
Short-term lease cost | 24 | | | 25 | |
| $ | 455 | | | $ | 497 | |
Supplemental cash flow information related to leases includes the following:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 |
Cash paid for amounts included in the measurement of lease liabilities: | | | |
Operating cash flows relating to operating leases | $ | 23 | | | $ | 23 | |
Operating cash flows relating to finance leases | $ | 33 | | | $ | 34 | |
Financing cash flows relating to finance leases | $ | 67 | | | $ | 66 | |
| | | |
Non-cash lease obligations arising from obtaining ROU assets:(1) | | | |
Operating leases | $ | 23 | | | $ | 16 | |
Finance leases | $ | 53 | | | $ | 20 | |
____________________________
(1)Operating and finance lease obligations assumed in relation to the Newcrest transaction were $13 and $51, respectively.
Information related to lease terms and discount rates is as follows: | | | | | | | | | | | |
| Operating Leases | | Finance Leases |
Weighted average remaining lease term (years) | 8 | | 8 |
Weighted average discount rate | 3.78 | % | | 6.39 | % |
Future minimum lease payments under non-cancellable leases as of December 31, 2023, were as follows:
| | | | | | | | | | | |
| Operating Leases (1) | | Finance Leases |
2024 | $ | 24 | | | $ | 110 | |
2025 | 16 | | | 102 | |
2026 | 14 | | | 96 | |
2027 | 13 | | | 78 | |
2028 | 11 | | | 74 | |
Thereafter | 42 | | | 273 | |
Total future minimum lease payments | 120 | | | 733 | |
Less: Imputed interest | (15) | | | (171) | |
Total | $ | 105 | | | $ | 562 | |
____________________________
(1)The current and non-current portion of operating lease liabilities are included in Other current liabilities and Other non-current liabilities, respectively, on the Consolidated Balance Sheets.
As of December 31, 2023, the Company has additional leases that have not yet commenced. At commencement, the Company anticipates that these leases will result in additional ROU assets and lease liabilities of $11. The leases are anticipated to commence in 2024 with a lease term of approximately 2 to 3 years.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 22 OTHER LIABILITIES
| | | | | | | | | | | |
| At December 31, |
| 2023 | | 2022 |
Other current liabilities: | | | |
Reclamation and remediation liabilities | $ | 619 | | | $ | 526 | |
Accrued operating costs (1) | 473 | | | 370 | |
Accrued capital expenditures | 320 | | | 221 | |
Stamp duty on Newcrest transaction (2) | 316 | | | — | |
Accrued royalties | 137 | | | 80 | |
Payables to NGM (3) | 91 | | | 73 | |
Silver streaming agreement | 87 | | | 80 | |
Other (4) | 319 | | | 249 | |
| $ | 2,362 | | | $ | 1,599 | |
| | | |
Other non-current liabilities: | | | |
Income and mining taxes (5) | $ | 177 | | | $ | 206 | |
Norte Abierto related payments (6) | 10 | | | 94 | |
Other (7) | 129 | | | 130 | |
| $ | 316 | | | $ | 430 | |
____________________________(1)Includes an estimated compensation payment to the Worsley JV related to the waiver of certain rights within the cross-operation agreement that confers priority to the bauxite operations at the Boddington mine.
(2)Incurred as a result of the Newcrest transaction. Refer to Note 8 for further information.
(3)Payables to NGM at December 31, 2023 and December 31, 2022 consist 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 and CC&V toll milling provided by NGM. Newmont’s 38.5% share of such amounts is eliminated upon proportionate consolidation of its interest in NGM. The CC&V toll milling agreement with NGM expired on December 31, 2022. Receivables for Newmont's 38.5% proportionate share related to NGM's activities with Barrick are presented within Other current assets.
(4)Primarily consists of accrued interest on debt and taxes other than income and mining taxes.
(5)Includes unrecognized tax benefits, including penalties and interest.
(6)In December 2023, the Company entered into an agreement with Barrick pursuant to which it agreed to fund both its and Barrick's portions of prefeasibility study costs. Of the $30 related to the prefeasibility study costs associated with Barrick's portion, $10 was recognized in Other noncurrent liabilities at December 31, 2023. Refer to Note 15 for further information.
(7)Primarily consists of the non-current portion of operating lease liabilities.
NOTE 23 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Unrealized Gain (Loss) on Marketable Debt Securities | | Foreign Currency Translation Adjustments | | Pension and Other Post-retirement Benefit Adjustments | | Unrealized Gain (Loss) on 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 | (3) | | | 7 | | | 32 | | | 14 | | | 50 | |
(Gain) loss reclassified from accumulated other comprehensive income (loss) | — | | | — | | | 107 | | | 5 | | | 112 | |
Other comprehensive income (loss) | (3) | | | 7 | | | 139 | | | 19 | | | 162 | |
Balance at December 31, 2022 | $ | (1) | | | $ | 126 | | | $ | (27) | | | $ | (69) | | | $ | 29 | |
Net current-period other comprehensive income (loss): | | | | | | | | | |
Gain (loss) in other comprehensive income (loss) before reclassifications | — | | | (5) | | | (9) | | | (19) | | | (33) | |
(Gain) loss reclassified from accumulated other comprehensive income (loss) | — | | | — | | | — | | | 18 | | | 18 | |
Other comprehensive income (loss) | — | | | (5) | | | (9) | | | (1) | | | (15) | |
Balance at December 31, 2023 | $ | (1) | | | $ | 121 | | | $ | (36) | | | $ | (70) | | | $ | 14 | |
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Details about Accumulated Other Comprehensive Income (Loss) Components | | | | | | Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | | Affected Line Item in the Consolidated Statements of Operations |
| | | | Year Ended December 31, | | |
| | | | | | 2023 | | 2022 | | 2021 | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
Pension and other post-retirement benefit adjustments: | | | | | | | | | | | | |
Settlement | | | | | | $ | 9 | | | $ | 137 | | | $ | 4 | | | Other income (loss), net |
Amortization | | | | | | (9) | | | (1) | | | 27 | | | Other income (loss), net |
| | | | | | | | | | | | |
Total before tax | | | | | | — | | | 136 | | | 31 | | | |
Tax | | | | | | — | | | (29) | | | (5) | | | |
Net of tax | | | | | | $ | — | | | $ | 107 | | | $ | 26 | | | |
| | | | | | | | | | | | |
Hedge instruments adjustments: | | | | | | | | | | | | |
Foreign currency cash flow hedges | | | | | | $ | 19 | | | $ | — | | | $ | — | | | Costs applicable to sales |
Interest rate contracts | | | | | | 5 | | | 6 | | | 8 | | | Interest expense, net |
Operating cash flow hedges | | | | | | — | | | — | | | 1 | | | Costs applicable to sales |
| | | | | | | | | | | | |
Total before tax | | | | | | 24 | | | 6 | | | 9 | | | |
Tax | | | | | | (6) | | | (1) | | | (2) | | | |
Net of tax | | | | | | $ | 18 | | | $ | 5 | | | $ | 7 | | | |
Total reclassifications for the period, net of tax | | | | | | $ | 18 | | | $ | 112 | | | $ | 33 | | | |
NOTE 24 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:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2023 | | 2022 | | 2021 |
Decrease (increase) in operating assets: | | | | | |
Trade and other receivables | $ | (240) | | | $ | 5 | | | $ | 142 | |
Inventories, stockpiles and ore on leach pads | (187) | | | (161) | | | (136) | |
Other assets | 50 | | | (84) | | | 36 | |
Increase (decrease) in operating liabilities: | | | | | |
Accounts payable | (42) | | | 102 | | | (11) | |
Reclamation and remediation liabilities | (275) | | | (247) | | | (161) | |
Accrued tax liabilities | (197) | | | (343) | | | (317) | |
Other accrued liabilities | 378 | | | (113) | | | (94) | |
| $ | (513) | | | $ | (841) | | | $ | (541) | |
NOTE 25 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 4. 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 Yanacocha reportable segment. The Newmont Ghana Gold and Newmont Golden Ridge matters relate to the Ahafo and Akyem reportable segments, respectively. The CC&V matter relates to the CC&V reportable segment. The Goldcorp Canada matter relates to the Porcupine reportable segment. The Cadia matter relates to the Cadia reportable segment.
Environmental Matters
Refer to Note 6 for further information regarding reclamation and remediation. Details about certain significant matters are discussed below.
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
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, 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. 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 to 2027. In June 2023, Yanacocha received approval of its updated compliance plan from MINEM and was granted an extension to June 2026 to achieve compliance. The Company appealed this approval to the Mining Council requesting the regulatory extension until 2027. In December 2023, this appeal was granted and the Mining Council has established that MINEM has to approve a new schedule considering permits, technical studies, logistics and the implementation of the plan.
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 current asset retirement obligation includes plans for the construction and post-closure management of two new water treatment plants 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). The ultimate construction costs of the two water treatment plants remain uncertain as ongoing study work and assessment of opportunities that incorporates the latest design considerations remain in progress. These and other additional risks and contingencies that are the subject of ongoing studies, 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, could result in future material increases to the reclamation obligation at Yanacocha.
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 permit updates contained new water quality limits. The Settlement Agreement involves the installation of interim passive water treatment and ongoing monitoring over the next three years, and then more long-term water treatment installed with target compliance by November 2027. In 2022, the Company studied various interim passive water treatment options, reported the study results to the Division, and based on an evaluation of additional semi-passive options that involve the usage of power at the portal, updated the remediation liability to $20 in 2022. CC&V continues to study alternative long-term remediation plans for water discharged from the Carlton Tunnel, and as such, a compliance extension request was submitted in July 2023 to allow additional time for proper assessment of treatment alternatives. The Company is also working with regulators on the Discharger Specific Variance to identify highest feasible alternative treatment in the context, based on limits such as area topography. Depending on the 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 2016, Newmont completed the remedial design process, with the exception of the new WTP design which was
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
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 approved the WTP design in 2021. Construction of the effluent pipeline began in 2021, and construction of the new WTP began in 2022. Both projects are scheduled to be completed in 2024.
The Dawn mill site is regulated by the Washington Department of Health (the "WDOH") 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 consist primarily of finalizing an Alternative Concentration Limit application (the "ACL application") submitted in 2020 to the WDOH to address groundwater issues, and also evaporating the remaining balance of process water at the site. In the fourth quarter of 2022, the WDOH provided comments on the ACL application, which Newmont is evaluating and conducting studies to better understand and respond to the comments provided by the WDOH. These studies and the related comment process will extend beyond the current year and could result in future material increases to the remediation obligation.
The remediation liability for the Midnite mine site and Dawn mill site is approximately $215, assumed 100% by Newmont, at December 31, 2023.
Goldcorp Canada Ltd. - 100% Newmont Owned
Porcupine mine site. The Porcupine complex is comprised of active open pit and underground mining operations as well as inactive, legacy sites from its extensive history of mining gold in and around the city of Timmins, Ontario since the early 1900s. As a result of these primarily historic mining activities, there are mine hazards in the area that could require some form of reclamation. The Company is conducting studies to better catalog, prioritize, and update its existing information of these historical mine hazards, to inform its closure plans and estimated closure costs. Based on work performed during 2023, a $46 reclamation adjustment was recorded at December 31, 2023, however, on-going studies will extend beyond the current year and could result in future material increases to the reclamation obligation at Porcupine.
Cadia Holdings Pty Ltd. - 100% Newmont Owned
Cadia mine site. Cadia Holdings Pty Ltd. (“Cadia Holdings”) is a wholly owned subsidiary of Newcrest, which was acquired by Newmont in November 2023. The mine site is subject to regulations by the New South Wales Environment Protection Authority (the “NSW EPA”). During the quarter ended June 2023, the NSW EPA issued variations to its Environment Protection License (“EPL”), a Prevention Notice and Notices to Provide Information regarding the management of, and investigation into potential breaches relating to, dust emissions and other air pollutants from Cadia Holdings’ tailings storage facilities and ventilation rises. The license variations largely formalized the actions Cadia Holdings had developed in consultation with the NSW EPA and was already undertaking across a range of measures. Cadia Holdings received a letter from the NSW EPA in June 2023 requiring it to immediately comply with specific statutory requirements and EPL conditions. Adjustments were implemented underground, including a reduction in mining rates, modifications to the ventilation circuit and the installation of additional dust sprays and spray curtains. Additional dust collection units were subsequently installed enabling normal mining rates to be restored.
In August 2023, the NSW EPA commenced proceedings in the Land and Environment Court of NSW (the “NSW Land and Environment Court”) against Cadia Holdings, alleging that air emissions from Cadia on or about March 1, 2022 exceeded the standard of concentration for total solid particles permitted under applicable laws due to the use of surface exhaust fans at the mine. On September 29, 2023, Cadia Holdings entered a plea of guilty and the NSW Land and Environmental Court listed the case for a sentencing hearing on March 28, 2024. On October 13, 2023, the NSW EPA commenced additional proceedings in the NSW Land and Environment Court against Cadia Holdings, alleging two additional contraventions of applicable air emissions requirements between November 3 and 5, 2021 and May 24 and 25, 2023 and two contraventions related to alleged air pollution from tailings storage facilities on October 13 and 31, 2022. On November 24, 2023, Cadia Holdings entered a plea of guilty to the two additional charges relating to applicable air emissions requirements and the NSW Land and Environmental Court listed the case for a sentencing hearing on March 28, 2024. The proceedings related to alleged air pollution from Cadia Holdings’ tailings storage facilities are adjourned for further directions on May 17, 2024. The NSW EPA’s investigation regarding the management of air emissions from the mine is ongoing.
While no specific relief has been sought by the NSW EPA in its proceeding against Cadia Holdings before the NSW Land and Environmental Court, the court can impose penalties.
Other Legal Matters
Newmont Corporation, as well as Newmont Canada Corporation, and Newmont Canada FN Holdings ULC – 100% Newmont Owned
Kirkland Lake Gold Inc., which was acquired by Agnico Eagle Mines Limited in 2022 (still referred to herein as “Kirkland” for ease of reference), 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
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
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 (collectively "Newmont"), and certain Kirkland defendants (collectively "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 granted in October 2022. Newmont submitted its statement of defense on February 27, 2023, and a motion for summary judgment on January 12, 2024. The motion for summary judgment will be heard before the Court on February 27 and 29, 2024. Newmont 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, along with the other defendants, filed a motion to dismiss based on delay on November 29, 2022. On August 22, 2023, the Court granted the motion and dismissed the Ontario complaint for delay. NWG filed an appeal with the Court of Appeal for Ontario on September 21, 2023. On January 9, 2024, the Ontario Superior Court of Justice awarded Newmont C$0.5 in costs. The appeal remains pending and will be heard on April 29, 2024. 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, 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
NEWMONT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
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.
Other Commitments and Contingencies
As part of its ongoing business and operations, the Company and its affiliates are required to provide surety bonds, bank letters of credit and bank guarantees as financial support for various purposes, including environmental remediation, reclamation, exploration permitting, workers compensation programs and other general corporate purposes. At December 31, 2023 and 2022, there were $2,123 and $1,872, respectively, of outstanding letters of credit, surety bonds and bank guarantees. The obligations associated with these instruments are generally related to performance requirements that the Company addresses through its ongoing operations. As the specific requirements are met, the beneficiary of the associated instrument cancels and/or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure. Generally, bonding requirements associated with environmental regulation are becoming more restrictive. However, the Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements through existing or alternative means, as they arise.
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 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 study which is currently under way and feasibility study which has not yet occurred. As such, this amount has not been accrued.