filings.toolsCover and table of contents
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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2020
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________to__________
Commission File Number: 001-31240
NEWMONT CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 84-1611629 | |||||||
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
| 6900 E Layton Ave | ||||||||
| Denver, Colorado | 80237 | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
| Registrant’s telephone number, including area code (303) 863-7414 | ||||||||
Securities registered or to be registered pursuant to Section 12(b) of the Act.
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
| Common stock, par value $1.60 per share | NEM | New York Stock Exchange |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☒ Yes ☐ No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. ☐ Yes ☒ No
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
Indicate by check mark whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
At June 30, 2020, the aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant was $49,521,911,826 based on the closing sale price as reported on the New York Stock Exchange. There were 800,314,223 shares of common stock outstanding on February 11, 2021.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant’s definitive Proxy Statement submitted to the Registrant’s stockholders in connection with our 2021 Annual Stockholders Meeting to be held on April 28, 2021 are incorporated by reference into Part III of this report.
TABLE OF CONTENTS
NEWMONT CORPORATION
2020 RESULTS AND HIGHLIGHTS
(unaudited, in millions, except per share, per ounce and per pound)
| Years Ended December 31, | |||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||
| Financial Results: | |||||||||||||||||||||||||||||
| Sales | $ | 11,497 | $ | 9,740 | $ | 7,253 | |||||||||||||||||||||||
| Gold | $ | 10,350 | $ | 9,049 | $ | 6,950 | |||||||||||||||||||||||
| Copper | $ | 155 | $ | 210 | $ | 303 | |||||||||||||||||||||||
| Silver | $ | 510 | $ | 253 | $ | — | |||||||||||||||||||||||
| Lead | $ | 134 | $ | 85 | $ | — | |||||||||||||||||||||||
| Zinc | $ | 348 | $ | 143 | $ | — | |||||||||||||||||||||||
| Costs applicable to sales (1) | $ | 5,014 | $ | 5,195 | $ | 4,093 | |||||||||||||||||||||||
| Gold | $ | 4,408 | $ | 4,663 | $ | 3,906 | |||||||||||||||||||||||
| Copper | $ | 107 | $ | 145 | $ | 187 | |||||||||||||||||||||||
| Silver | $ | 201 | $ | 181 | $ | — | |||||||||||||||||||||||
| Lead | $ | 77 | $ | 77 | $ | — | |||||||||||||||||||||||
| Zinc | $ | 221 | $ | 129 | $ | — | |||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | 2,628 | $ | 2,956 | $ | 319 | |||||||||||||||||||||||
| Net income (loss) | $ | 2,791 | $ | 2,884 | $ | 380 | |||||||||||||||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders | $ | 2,666 | $ | 2,877 | $ | 280 | |||||||||||||||||||||||
| Per common share, diluted: | |||||||||||||||||||||||||||||
| Net income (loss) from continuing operations attributable to Newmont stockholders | $ | 3.31 | $ | 3.91 | $ | 0.53 | |||||||||||||||||||||||
| Net income (loss) attributable to Newmont stockholders | $ | 3.51 | $ | 3.81 | $ | 0.64 | |||||||||||||||||||||||
| Adjusted net income (loss) (2) | $ | 2,140 | $ | 970 | $ | 718 | |||||||||||||||||||||||
| Adjusted net income (loss) per share, diluted (2) | $ | 2.66 | $ | 1.32 | $ | 1.34 | |||||||||||||||||||||||
| Earnings before interest, taxes and depreciation and amortization (2) | $ | 5,751 | $ | 5,954 | $ | 2,160 | |||||||||||||||||||||||
| Adjusted earnings before interest, taxes and depreciation and amortization (2) | $ | 5,537 | $ | 3,734 | $ | 2,584 | |||||||||||||||||||||||
| Net cash provided by (used in) operating activities of continuing operations | $ | 4,890 | $ | 2,876 | $ | 1,837 | |||||||||||||||||||||||
| Free Cash Flow (2) | $ | 3,588 | $ | 1,413 | $ | 805 | |||||||||||||||||||||||
| Regular cash dividends paid per common share in the period ended December 31 | $ | 1.04 | $ | 0.56 | $ | 0.56 | |||||||||||||||||||||||
| Regular cash dividends declared per common share for the period ended December 31 | $ | 1.45 | $ | 0.56 | $ | 0.56 | |||||||||||||||||||||||
| Special dividend declared per common share in the period ended December 31 related to the 2019 Newmont Goldcorp transaction | $ | — | $ | 0.88 | $ | — |
____________________________
(1)Excludes Depreciation and amortization and Reclamation and remediation.
(2)See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis.
NEWMONT CORPORATION
2020 RESULTS AND HIGHLIGHTS
(unaudited, in millions, except per share, per ounce and per pound)
| Years Ended December 31, | |||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | |||||||||||||||||||||||||||
| Operating Results: | |||||||||||||||||||||||||||||
| Consolidated gold ounces (thousands): | |||||||||||||||||||||||||||||
| Produced | 5,824 | 6,392 | 5,479 | ||||||||||||||||||||||||||
| Sold | 5,831 | 6,465 | 5,516 | ||||||||||||||||||||||||||
| Attributable gold ounces (thousands): | |||||||||||||||||||||||||||||
| Produced (1) | 5,905 | 6,291 | 5,101 | ||||||||||||||||||||||||||
| Sold (2) | 5,550 | 6,076 | 5,133 | ||||||||||||||||||||||||||
| Consolidated and attributable - other metals: | |||||||||||||||||||||||||||||
| Produced copper (million pounds) | 56 | 79 | 109 | ||||||||||||||||||||||||||
| Sold copper (million pounds) | 56 | 80 | 110 | ||||||||||||||||||||||||||
| Produced silver (thousand ounces) | 27,801 | 15,860 | — | ||||||||||||||||||||||||||
| Sold silver (thousand ounces) | 28,596 | 15,987 | — | ||||||||||||||||||||||||||
| Produced lead (million pounds) | 179 | 108 | — | ||||||||||||||||||||||||||
| Sold lead (million pounds) | 185 | 108 | — | ||||||||||||||||||||||||||
| Produced zinc (million pounds) | 381 | 187 | — | ||||||||||||||||||||||||||
| Sold zinc (million pounds) | 407 | 179 | — | ||||||||||||||||||||||||||
| Average realized price: | |||||||||||||||||||||||||||||
| Gold (per ounce) | $ | 1,775 | $ | 1,399 | $ | 1,260 | |||||||||||||||||||||||
| Copper (per pound) | $ | 2.78 | $ | 2.63 | $ | 2.74 | |||||||||||||||||||||||
| Silver (per ounce) | $ | 17.86 | $ | 15.79 | $ | — | |||||||||||||||||||||||
| Lead (per pound) | $ | 0.72 | $ | 0.79 | $ | — | |||||||||||||||||||||||
| Zinc (per pound) | $ | 0.86 | $ | 0.80 | $ | — | |||||||||||||||||||||||
| Consolidated costs applicable to sales: (3)(4) | |||||||||||||||||||||||||||||
| Gold (per ounce) | $ | 756 | $ | 721 | $ | 708 | |||||||||||||||||||||||
| Gold equivalent ounces - other metals (per ounce) (5) | $ | 571 | $ | 858 | $ | 782 | |||||||||||||||||||||||
| All-in sustaining costs: (4) | |||||||||||||||||||||||||||||
| Gold (per ounce) | $ | 1,045 | $ | 966 | $ | 909 | |||||||||||||||||||||||
| Gold equivalent ounces - other metals (per ounce) (5) | $ | 858 | $ | 1,222 | $ | 935 |
____________________________
(1)Attributable gold ounces produced includes 362, 287 and no ounces for the years ended December 31, 2020, 2019 and 2018, respectively, related to the Pueblo Viejo mine, which is 40 percent 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 percent owned by Newmont and accounted for as an equity method investment.
(3)Excludes Depreciation and amortization and Reclamation and remediation.
(4)See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis.
(5)For the definition of gold equivalent ounces see “Results of Consolidated Operations" within Part II, Item 7, Management's Discussion and Analysis.
Highlights (dollars in millions, except per share, per ounce and per pound amounts)
-
Net income:** Delivered Net income (loss) from continuing operations attributable to Newmont stockholders of $2,666 or $3.31 per diluted share, a decrease of $211 from the prior year primarily due to the recognized gain on the formation of NGM in 2019, lower sales volumes from certain sites being placed in care and maintenance and the sale of Kalgoorlie and Red Lake, and higher costs in response to the COVID-19 pandemic; partially offset by higher average realized gold prices, gains related to sales of assets and investments, lower transaction and integration costs and lower General and administrative costs.
-
Adjusted net income:** Delivered Adjusted net income of $2,140 or $2.66 per diluted share, an increase of $1.34 from the prior year (see “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis).
-
Adjusted EBITDA:** Generated $5,537 in Adjusted EBITDA, an increase of 48% from the prior year (See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis).
-
Cash Flow:** Reported Net cash provided by (used in) operating activities of continuing operations of $4,890 for the year ended December 31, 2020, an increase of 70% from the prior year, and free cash flow of $3,588 (See “Non-GAAP Financial Measures” within Part II, Item 7, Management's Discussion and Analysis).
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Portfolio improvements:** Completed divestment of the Red Lake Complex in Canada, the Company’s 50 percent ownership interest in Kalgoorlie in Australia, investment holdings in Continental Gold, and a portfolio of eleven royalties; formed exploration joint ventures with Kirkland Lake Gold Inc. in Canada and Agnico Eagle Mines Limited in Colombia; completed materials handling projects at Musselwhite and Éléonore in Canada; progressed Autonomous Haulage System at Boddington in Australia, the Tanami Expansion 2 project in Australia, and a mining method change at Subika Underground in Ghana; advanced study work at Ahafo North and Yanacocha Sulfides with both projects expecting full funds approval in 2021.
-
Attributable gold production:** Produced 5.9 million ounces of gold, a decrease of 6% over the prior year.
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Financial strength:** Ended the year with $5.5 billion of consolidated cash and approximately $8.5 billion of liquidity; increased total dividend declared for the period to $1.45 per share; completed the remaining $521 million of the 2020 share-repurchase program and announced a new $1 billion share-repurchase program to be completed over the next 18 months.
Our global project pipeline
Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life. Near-term development capital projects are presented below. Additional projects represent incremental improvements to production and cost guidance.
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. Development capital costs (excluding capitalized interest) since approval were $126, of which $112 related to 2020.
Musselwhite Materials Handling, North America. This project improves material movement from Musselwhite’s two main zones below Lake Opapimiskan. An underground shaft will hoist ore from the underground crushers, reducing haulage distances and ventilation costs. Commercial production was declared in December 2020.
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
In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China (“COVID-19”) and 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, the duration and severity of the pandemic and related restrictions, all of which are uncertain and cannot be predicted.
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, during the first quarter and into April 2020, we placed five sites into care and maintenance including Musselwhite and Éléonore in Canada, Peñasquito in Mexico, Yanacocha in Peru and Cerro Negro in Argentina to protect nearby communities and align with country mandated travel restrictions or health considerations. During the second quarter of 2020, we worked closely with
local stakeholders to resume operations at all five mine sites. As of December 31, 2020, all sites were fully operational, with the exception of Cerro Negro that continues to progress its ramp up.
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 $11 has been distributed through December 31, 2020. 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.
Refer to "Health and Safety" within Part I, Item 1, Business and “Results of Consolidated Operations,” “Liquidity and Capital Resources,” “Non-GAAP Financial Measures” and “Accounting Developments” within Part II, Item 7, Management’s Discussion and Analysis for additional information about the impact of COVID-19 on our business and operations. For a discussion of COVID-19 related risks to the business, see Part I, Item 1A, Risk Factors.
PART I
Next: Item 1. BUSINESS (dollars in millions, except per share, per ounce and per pound amounts)