Newmont Continues To Reinvest In The Most Profitable Projects

DENVER, CO Newmont Corporation, President and Chief Executive Officer, Tom Palmer, said, “Throughout our history Newmont has taken an industry-leading approach to environmental, social and governance practices. We published our sustainability and climate-focused reports in the second quarter, demonstrating our commitment to responsible mining and doing our part in addressing climate change. Capitalizing on the strength of our assets and integrated operating model, Newmont delivered a solid second quarter performance with $1.6 billion in adjusted EBITDA and $578 million in free cash flow. Our performance and disciplined approach to capital allocation allowed Newmont to declare a second quarter dividend whilst we continue to reinvest in our business through our most profitable projects. As we move into our next 100 years of mining, we remain focused on delivering value to all of our stakeholders from our world-class portfolio of long-life, responsibly managed assets located in top-tier jurisdictions."

Attributable gold production increased 15 percent to 1,449 thousand ounces from the prior year quarter primarily due to higher production from sites that were placed into care and maintenance or experienced reduced operations in response to Covid during 2020, and higher ore grade milled and higher mill throughput at Boddington. These increases were partially offset by lower mill availability and lower tons and grades mined at Nevada Gold Mines, the ramp down of the mill at Yanacocha during the first quarter of 2021 and a build-up of in-circuit inventory at Tanami as the mine was placed under care and maintenance in late-June as a result of Covid restrictions. Attributable gold equivalent ounce (GEO) production from other metals increased 120 percent to 303 thousand ounces primarily due to higher production at Peñasquito as the site was placed into care and maintenance in the prior year and higher ore grade milled, mill throughput and recoveries at Boddington. CAS from other metals totaled $190 million for the quarter. CAS per GEO increased 13 percent from the prior year quarter primarily due to higher maintenance costs at Peñasquito, unfavorable foreign currency impacts from the strengthening of the Australian dollar, higher allocation of costs to other metals and higher copper-price driven royalties, partially offset by higher other metal sales. AISC per GEO improved 9 percent primarily due to lower treatment and refining costs and higher care and maintenance costs in the prior year, partially offset by higher CAS per GEO.

Net income from continuing operations attributable to Newmont stockholders was $640 million, an increase of $228 million from the prior year quarter primarily due to higher sales volumes and higher average realized prices in the current year. Adjusted net income was $670 million compared to $261 million in the prior year quarter. Primary adjustments to second quarter net income include changes in the fair value of investments, reclamation and remediation charges, asset impairment and valuation allowance and other tax adjustments.

The Company’s capital-efficient project pipeline supports improving production, lowering costs and extending mine life. Funding for the current development capital projects Tanami Expansion 2 and Ahafo North has been approved and these projects are in the execution stage. Newmont has included the Yanacocha Sulfides project in its long-term outlook as the project is currently scheduled to be approved for full funding in December 2021. Additional sustaining and development projects, not listed below, represent incremental improvements to the Company's outlook.

The Tanami Expansion 2 in Australia, secures Tanami’s future as a long-life, low-cost producer with potential to extend mine life beyond 2040 through the addition of a 1,460 meter hoisting shaft and supporting infrastructure to achieve 3.5 million tonnes per year of production and provide a platform for future growth. The expansion is expected to increase average annual gold production by approximately 150,000 to 200,000 ounces per year for the first five years and is expected to reduce operating costs by approximately 10 percent. Capital costs for the project are estimated to be between $850 million and $950 million with a commercial production date in the first half of 2024.

At the Ahafo North, in Africa, currently expanding the existing footprint in Ghana with four open pit mines and a stand-alone mill located approximately 30 kilometers from the Ahafo South operations. The project is expected to add between 275,000 and 325,000 ounces per year with all-in sustaining costs between $600 to $700 per ounce for the first five full years of production (2024-2028). Capital costs for the project are estimated to be between $750 and $850 million with a construction completion date in the second half of 2023 and commercial production in early-2024. Ahafo North is the best unmined gold deposit in West Africa with approximately 3.5 million ounces of Reserves and more than 1 million ounces of Measured and Indicated and Inferred Resource and significant upside potential to extend beyond Ahafo North’s current 13-year mine life.

Yanacocha Sulfides, South America, will develop the first phase of sulfide deposits and an integrated processing circuit, including an autoclave to process gold, copper and silver feedstock. The project is expected to add 500,000 gold equivalent ounces per year with all-in sustaining costs between $700 to $800 per ounce for the first five full years of production (2026-2030). An investment decision is expected in December 2021 with a three year development period and estimated capital costs of approximately $2 billion. The first phase focuses on developing the Yanacocha Verde and Chaquicocha deposits to extend Yanacocha’s operations beyond 2040 with second and third phases having the potential to extend life for multiple decades.

Newmont continues to maintain wide-ranging protective measures for its workforce and neighboring communities, including screening, physical distancing, deep cleaning and avoiding exposure for at-risk individuals. The Company incurred incremental Covid specific costs of $20 million during the quarter for activities such as additional health and safety procedures, increased transportation and community fund contributions. During the second quarter of 2020, the Newmont Global Community Support Fund was established to help host communities, governments and employees combat the Covid pandemic. Amounts distributed from this fund were $1 million during the quarter and have been adjusted from certain non-GAAP metrics. The remaining $19 million is not adjusted from the non-GAAP metrics. The Company has mobilized a Covid vaccine working group with representatives from across the globe. Newmont views vaccination as critical in the fight against Covid-19 and actively encourages the workforce to get vaccinated as they become eligible. Newmont is working to support authorities, through the Global Community Support Fund, to improve the availability and deployment of vaccines to the workforce and host communities.