nem-20210930

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________to__________

Commission File Number: 001-31240

NEWMONT CORPORATION

(Exact name of registrant as specified in its charter)



Delaware						84-1611629
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

6900 E Layton Ave
Denver, Colorado						80237
(Address of Principal Executive Offices)						(Zip Code)
Registrant’s telephone number, including area code (303) 863-7414

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $1.60 per share

NEM

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ☐ Yes ☒ No

There were 797,435,304 shares of common stock outstanding on October 21, 2021.

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TABLE OF CONTENTS


		Page
	PART I – FINANCIAL INFORMATION
THIRD QUARTER 2021 RESULTS AND HIGHLIGHTS		1
ITEM 1.	FINANCIAL STATEMENTS	5
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Cash Flows	7
	Condensed Consolidated Balance Sheets	9
	Condensed Consolidated Statement s of Changes in Equity	10
	Notes to Condensed Consolidated Financial Statements	12
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	39
	Overview	39
	Consolidated Financial Results	40
	Results of Consolidated Operations	48
	Foreign Currency Exchange Rates	58
	Liquidity and Capital Resources	58
	Environmental	62
	Non-GAAP Financial Measures	62
	Accounting Developments	77
	Safe Harbor Statement	77
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	78
ITEM 4.	CONTROLS AND PROCEDURES	79
	PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	80
ITEM 1A.	RISK FACTORS	80
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	81
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	81
ITEM 4.	MINE SAFETY DISCLOSURES	81
ITEM 5.	OTHER INFORMATION	82
ITEM 6.	EXHIBITS	83
SIGNATURES		84

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NEWMONT CORPORATION

THIRD QUARTER 2021 RESULTS AND HIGHLIGHTS

(unaudited, in millions, except per share, per ounce and per pound)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Financial Results:
Sales	$	2,895	$	3,170	$	8,832	$	8,116
Gold	$	2,516	$	2,860	$	7,628	$	7,347
Copper	$	72	$	43	$	204	$	101
Silver	$	143	$	138	$	486	$	337
Lead	$	42	$	30	$	129	$	92
Zinc	$	122	$	99	$	385	$	239
Costs applicable to sales (1)	$	1,367	$	1,269	$	3,895	$	3,659
Gold	$	1,175	$	1,130	$	3,331	$	3,210
Copper	$	37	$	28	$	102	$	78
Silver	$	80	$	45	$	230	$	148
Lead	$	18	$	17	$	55	$	56
Zinc	$	57	$	49	$	177	$	167
Net income (loss) from continuing operations	$	(254)	$	628	$	955	$	1,882
Net income (loss)	$	(243)	$	856	$	997	$	2,027
Net income (loss) from continuing operations attributable to Newmont stockholders	$	(8)	$	611	$	1,170	$	1,860
Per common share, diluted:
Net income (loss) from continuing operations attributable to Newmont stockholders	$	(0.01)	$	0.76	$	1.46	$	2.31
Net income (loss) attributable to Newmont stockholders	$	—	$	1.04	$	1.51	$	2.49
Adjusted net income (loss) (2)	$	483	$	697	$	1,747	$	1,284
Adjusted net income (loss) per share, diluted (2)	$	0.60	$	0.86	$	2.18	$	1.59
Earnings before interest, taxes and depreciation and amortization (2)	$	565	$	1,547	$	3,507	$	4,129
Adjusted earnings before interest, taxes and depreciation and amortization (2)	$	1,316	$	1,663	$	4,364	$	3,765
Net cash provided by (used in) operating activities of continuing operations					$	2,967	$	3,204
Free Cash Flow (2)					$	1,755	$	2,300
Cash dividends paid per common share in the period ended September 30	$	0.55	$	0.25	$	1.65	$	0.64
Cash dividends declared per common share for the period ended September 30	$	0.55	$	0.40	$	1.65	$	0.90

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)See “Non-GAAP Financial Measures” within Part I, Item 2, Management's Discussion and Analysis.

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NEWMONT CORPORATION

THIRD QUARTER 2021 RESULTS AND HIGHLIGHTS

(unaudited, in millions, except per share, per ounce and per pound)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Operating Results:
Consolidated gold ounces (thousands):
Produced	1,422		1,521		4,274		4,236
Sold	1,416		1,495		4,277		4,210
Attributable gold ounces (thousands):
Produced (1)	1,449		1,541		4,353		4,275
Sold (2)	1,357		1,429		4,101		3,996
Consolidated and attributable gold equivalent ounces - other metals (thousands) (3)
Produced	315		273		935		750
Sold	301		248		930		780
Consolidated and attributable - other metals:
Produced copper (million pounds)	17		15		50		41
Sold copper (million pounds)	18		14		49		40
Produced silver (thousand ounces)	7,970		7,370		23,560		20,421
Sold silver (thousand ounces)	7,792		6,371		23,938		20,260
Produced lead (million pounds)	44		46		138		130
Sold lead (million pounds)	42		42		134		133
Produced zinc (million pounds)	109		103		325		281
Sold zinc (million pounds)	98		98		319		313
Average realized price:
Gold (per ounce)	$	1,778	$	1,913	$	1,783	$	1,745
Copper (per pound)	$	3.99	$	2.99	$	4.19	$	2.49
Silver (per ounce)	$	18.34	$	21.69	$	20.32	$	16.66
Lead (per pound)	$	0.99	$	0.73	$	0.96	$	0.69
Zinc (per pound)	$	1.24	$	1.01	$	1.21	$	0.77
Consolidated costs applicable to sales: (4)(5)
Gold (per ounce)	$	830	$	756	$	779	$	762
Gold equivalent ounces - other metals (per ounce) (3)	$	638	$	556	$	606	$	575
All-in sustaining costs: (5)
Gold (per ounce)	$	1,120	$	1,020	$	1,064	$	1,046
Gold equivalent ounces - other metals (per ounce) (3)	$	887	$	770	$	863	$	862

____________________________

(1)Attributable gold ounces produced includes 85 thousand ounces and 254 thousand ounces for the three and nine months ended September 30, 2021, respectively, and 87 thousand ounces and 256 thousand ounces for the three and nine months ended September 30, 2020, respectively, related to the Pueblo Viejo mine, which is 40% owned by Newmont and accounted for as an equity method investment.

(2)Attributable gold ounces sold excludes ounces related to the Pueblo Viejo mine, which is 40% owned by Newmont and accounted for as an equity method investment.

(3)For the definition of gold equivalent ounces see “Results of Consolidated Operations" within Part I, Item 2, Management's Discussion and Analysis.

(4)Excludes Depreciation and amortization and Reclamation and remediation.

(5)See “Non-GAAP Financial Measures” within Part I, Item 2, Management's Discussion and Analysis.

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Third Quarter 2021 Highlights (dollars in millions, except per share, per ounce and per pound amounts)

•Net income: Reported Net income (loss) from continuing operations attributable to Newmont stockholders of $(8) or $(0.01) per diluted share, a decrease of $619 from the prior-year quarter primarily due to the Loss on assets held for sale in connection with the Conga mill assets, lower realized gold prices, lower gold sales volumes, unrealized losses on marketable and other equity securities, higher Costs applicable to sales, and higher reclamation and remediation charges partially offset by lower income tax expense.

•Adjusted net income: Reported Adjusted net income of $483 or $0.60 per diluted share, a decrease of $0.26 per diluted share from the prior-year quarter (See “Non-GAAP Financial Measures” within Part I, Item 2, Management's Discussion and Analysis).

•Adjusted EBITDA: Generated $1,316 in Adjusted EBITDA, a decrease of 21% from the prior-year quarter (See “Non-GAAP Financial Measures” within Part I, Item 2, Management's Discussion and Analysis).

•Cash Flow: Reported Net cash provided by (used in) operating activities of continuing operations of $2,967 for the nine months ended September 30, 2021, a decrease of 7% from the prior year, and free cash flow of $1,755 (See “Non-GAAP Financial Measures” within Part I, Item 2, Management's Discussion and Analysis).

•Environmental, Social and Governance ("ESG"): Transitioned to a fully autonomous haulage fleet of 36 trucks at Boddington in Australia, which is expected to improve safety and long-term productivity; Newmont's COVID-19 related Global Community Support Fund approved a local economic resilience program in Ghana to support women owned businesses impacted by the pandemic in pivoting to a more resilient business model through training; supported the vaccine deployment by turning Newmont's Cajamarca office in Peru into a vaccine clinic.

•Attributable production: Produced 1.4 million attributable ounces of gold and 315 thousand attributable gold equivalent ounces from co-products.

•Financial strength: Ended the quarter with $4.6 billion of consolidated cash and $7.6 billion of liquidity; completed $114 of settled share repurchases from $1 billion buyback program; declared dividend for the third quarter of $0.55, an increase of 38% over the prior-year quarter.

Our global project pipeline

Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life. Our near-term development capital projects are presented below. Additional projects represent incremental improvements to production and cost guidance.

Ahafo North, Africa. The Board of Directors approved full funding for the Ahafo North project in July 2021. This project will deliver value through the open pit mining and processing of over three million ounces of gold over a 13-year mine life. The project is expected to add between 275,000 and 325,000 ounces per year for the first five years. Capital costs for the project are estimated to be between $750 and $850 with an expected construction completion date in the second half of 2023 and commercial production in early 2024. Development capital costs (excluding capitalized interest) since approval were $32, of which all costs related to the third quarter of 2021.

Tanami Expansion 2, Australia. This project secures Tanami’s future as a long-life, low cost producer with potential to extend mine life to 2040 through the addition of a hoisting shaft and supporting infrastructure to achieve higher 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 beginning in 2024 and is expected to reduce operating costs by approximately 10 percent. Capital costs for the project are estimated to be between $850 and $950 with an expected commercial production date in the first half of 2024. Development capital costs (excluding capitalized interest) since approval were $233, of which $38 related to the third quarter of 2021.

We manage our wider project portfolio to maintain flexibility to address the development risks associated with our projects including permitting, local community and government support, engineering and procurement availability, technical issues, escalating costs and other associated risks that could adversely impact the timing and costs of certain opportunities.

COVID-19 Update

An outbreak of a novel strain of coronavirus (“COVID-19”) was declared a pandemic by the World Health Organization in March 2020. COVID-19 has since spread worldwide, posing public health risks across the globe and has negatively impacted the global economy, disrupted global supply chains and workforce participation and created significant volatility and disruption of financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance will depend on future developments, including a widely available vaccine in each of the countries where we operate, the duration and severity of the pandemic and related restrictions, all of which continue to be uncertain and cannot be predicted.

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In April 2020, we established the Newmont Global Community Support Fund, a $20 fund to help host communities, governments and employees combat the COVID-19 pandemic, of which approximately $14 has been distributed through September 30, 2021. The fund is designed to focus on employee and community health, food security and local economic resilience through partnerships with local governments, medical institutions, charities and non-governmental organizations to address the greatest needs with long-term resiliency and future community development in mind.

We have 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 our workforce to get vaccinated as they become eligible. We are working to support authorities, through our Global Community Support Fund, to improve the availability and deployment of vaccines to our workforce and host communities.

Impact on business and operations

Our operations have been affected by a range of external factors related to the COVID-19 pandemic that are not within our control. For example, in the first half of 2020, we temporarily placed Musselwhite and Éléonore in Canada, Peñasquito in Mexico, Yanacocha in Peru and Cerro Negro in Argentina into care and maintenance with each subsequently resuming operations during the second quarter of 2020. As of September 30, 2021, all sites were fully operational, including Cerro Negro and Tanami. Cerro Negro returned to full capacity during September 2021 after operating for more than a year at reduced levels due to COVID-related impacts. After temporarily being placed into care and maintenance in late June 2021 to protect our employees and nearby communities, align with country mandated travel restrictions and manage ongoing COVID-related impacts, Tanami returned to full capacity by the end of July 2021. Additionally, we continue to incur COVID-19 specific costs as a result of actions taken to protect against the impacts of the COVID-19 pandemic. For the three months ended September 30, 2021 and 2020, COVID-19 specific costs incurred totaled $24 and $32, respectively.

For a discussion of the precautions we are taking to protect our workforce and nearby communities, while also taking steps to preserve the long-term value of our business, refer to "Health and Safety" within Part I, Item 1, Business on our Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 18, 2021. For a discussion of COVID-19 related risks to the business, see Part I, Item 1A, Risk Factors on our Form 10-K filed with the SEC on February 18, 2021.

Additionally, refer to "Consolidated Financial Results", "Results of Consolidated Operations", and “Liquidity and Capital Resources” within Part I, Item 2, Management’s Discussion and Analysis of this report for additional information about the considerations of COVID-19 on our business and operations.

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

NEWMONT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions except per share)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Sales (Note 4)	$	2,895	$	3,170	$	8,832	$	8,116

Costs and expenses:
Costs applicable to sales (1)	1,367		1,269		3,895		3,659
Depreciation and amortization	570		592		1,684		1,685
Reclamation and remediation (Note 5)	117		38		220		116
Exploration	60		48		147		118
Advanced projects, research and development	40		39		108		92
General and administrative	61		68		190		205
Care and maintenance (Note 6)	6		26		8		171
Loss on assets held for sale (Note 7)	571		—		571		—
Other expense, net (Note 8)	37		92		126		184
	2,829		2,172		6,949		6,230
Other income (expense):

Gain on asset and investment sales, net (Note 9)	3		1		46		593
Other income (loss), net (Note 10)	(74)		(44)		(106)		(35)
Interest expense, net of capitalized interest	(66)		(75)		(208)		(235)
	(137)		(118)		(268)		323
Income (loss) before income and mining tax and other items	(71)		880		1,615		2,209
Income and mining tax benefit (expense) (Note 11)	(222)		(305)		(798)		(446)
Equity income (loss) of affiliates (Note 12)	39		53		138		119
Net income (loss) from continuing operations	(254)		628		955		1,882
Net income (loss) from discontinued operations	11		228		42		145
Net income (loss)	(243)		856		997		2,027
Net loss (income) attributable to noncontrolling interests	246		(17)		215		(22)
Net income (loss) attributable to Newmont stockholders	$	3	$	839	$	1,212	$	2,005

Net income (loss) attributable to Newmont stockholders:
Continuing operations	$	(8)	$	611	$	1,170	$	1,860
Discontinued operations	11		228		42		145
	$	3	$	839	$	1,212	$	2,005
Weighted average common shares (millions):
Basic	799		803		800		804
Effect of employee stock-based awards	1		3		2		2
Diluted	800		806		802		806

Net income (loss) attributable to Newmont stockholders per common share
Basic:
Continuing operations	$	(0.01)	$	0.76	$	1.47	$	2.31
Discontinued operations	0.01		0.28		0.05		0.18
	$	—	$	1.04	$	1.52	$	2.49
Diluted: (2)
Continuing operations	$	(0.01)	$	0.76	$	1.46	$	2.31
Discontinued operations	0.01		0.28		0.05		0.18
	$	—	$	1.04	$	1.51	$	2.49

____________________________

(1)Excludes Depreciation and amortization and Reclamation and remediation.

(2)For the three months ended September 30, 2021, 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 the Condensed Consolidated Financial Statements.

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NEWMONT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income (loss)	$	(243)	$	856	$	997	$	2,027
Other comprehensive income (loss):
Change in marketable securities, net of tax of $—, $—, $— and $—, respectively	(1)		—		(1)		(5)
Foreign currency translation adjustments	2		(3)		3		3
Change in pension and other post-retirement benefits, net of tax of $(2), $(1), $(4) and $(4), respectively	5		2		17		13
Change in fair value of cash flow hedge instruments, net of tax of $(1), $2, $(3) and $(2), respectively	2		3		7		9
Other comprehensive income (loss)	8		2		26		20
Comprehensive income (loss)	$	(235)	$	858	$	1,023	$	2,047

Comprehensive income (loss) attributable to:
Newmont stockholders	$	11	$	841	$	1,238	$	2,025
Noncontrolling interests	(246)		17		(215)		22
	$	(235)	$	858	$	1,023	$	2,047

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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NEWMONT CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


	Nine Months Ended September 30,
	2021		2020
Operating activities:
Net income (loss)	$	997	$	2,027
Adjustments:
Depreciation and amortization	1,684		1,685
Loss on assets held for sale (Note 7)	571		—
Gain on asset and investment sales, net (Note 9)	(46)		(593)
Net loss (income) from discontinued operations	(42)		(145)
Reclamation and remediation	208		107
Change in fair value of investments (Note 10)	180		(191)
Stock-based compensation	55		55
Equity earnings in affiliates, net of distributions received	(26)		(12)

Deferred income taxes	(10)		(72)
Impairment of investments (Note 10)	1		93

Charges from pension settlement	—		82
Charges from debt extinguishment (Note 10)	—		77

Other non-cash adjustments	(27)		41
Net change in operating assets and liabilities (Note 20)	(578)		50
Net cash provided by (used in) operating activities of continuing operations	2,967		3,204
Net cash provided by (used in) operating activities of discontinued operations	13		(8)
Net cash provided by (used in) operating activities	2,980		3,196

Investing activities:
Additions to property, plant and mine development	(1,212)		(904)
Acquisitions, net (Note 1)	(328)		—
Contributions to equity method investees	(