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Newmont Mining shares 3Q18 results

Published by , Assistant Editor
Global Mining Review,

Newmont Mining Corporation (Newmont) has announced its results for 3Q18.

“Newmont delivered US$636 million in adjusted EBITDA and US$154 million in free cash flow in the third quarter on the back of ongoing productivity improvements across the portfolio and higher grades in Africa and South America,” said Gary J. Goldberg, President and CEO.

“We continued to advance profitable projects as we completed the CC&V concentrates project and commissioned the primary crusher at Merian, safely, on budget and on schedule. And we increased investment in Quecher Main, Subika Underground and the Ahafo Mill expansion during the period while increasing our dividend for the third quarter by 87%.”

3Q18 summary results

  • Net income (loss) from continuing operations attributable to Newmont stockholders of US$161million or US$0.31 per diluted share, a decrease of US$374 million from the prior year quarter primarily due to the impairment of exploration and long-lived assets in North America and lower metal prices, partially offset by lower income tax expense.
  • Adjusted net income was US$175 million or US$0.33 per diluted share,compared to US$184 million or US$0.34 per diluted share in the prior year quarter resulting from lower metal prices. Primary adjustments to net income include US$0.74 per diluted share related to impairments and a write-down in North America, US$0.14 per diluted share related to net tax adjustments and valuation allowances, and $0.04 per diluted share related to the change in fair value of marketable equity securities and a gain on asset and investment sales.
  • Revenue decreased 8% to US$1726 million for the quarter primarily due to lower average realised gold prices and lower production at various sites.
  • Average realised price for gold was US$1201, a reduction of $75/oz over the prior year quarter; average realised price for copper was US$2.50/lb, a reduction of US$0.56 over the prior year quarter.
  • Attributable gold production decreased 4% to 1.29 million oz. This was primarily due to lower mill throughput at Carlin, lower leach production at CC&V, and lower grades at KCGM. These impacts were partially offset by higher grades at Ahafo, Yanacocha and Tanami.
  • Gold CAS decreased 4% to US$691/oz for the quarter due to a lower co-product allocation of costs to gold based on a lower relative gold sales value and a favourable Australian dollar foreign currency exchange rate, partially offset by lower ounces sold.
  • Gold AISC decreased one percent to US$927/oz for the quarter as lower CAS was offset by higher sustaining capital spend. v
  • Attributable copper production from Phoenix and Boddington was 12 000 t for the quarter, in line with the prior year period. Copper CAS increased 12% to US$1.54/lb for the quarter primarily due to a higher co-product allocation of costs to copper. Copper AISC increased 13% to US$1.87/lb for the quarter primarily due to higher CAS.
  • Capital expenditures increased by 41% from the prior year quarter to US$274 million with increased investment in Quecher Main, Subika Underground, and the Ahafo Mill expansion.
  • Consolidated operating cash flow from continuing Operations decreased 12% from the prior year quarter to US$428 million primarily due to lower metal prices, coupled with unfavourable changes in working capital which were partially offset by higher payments attributable to interest in 2017 related to the repayment of convertible debt. Free cash flow decreased 48% from the prior year quarter to US$154 million from lower operating cash flow and higher investment in growth projects.
  • Balance sheet ended the quarter with UA$3.1 billion cash on hand, a leverage ratio of 0.4 x net debt to adjusted EBITDA and one of the best credit ratings in the mining sector. The company is committed to maintaining an investment-grade credit profile.

Projects update

Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life. Funding for Subika Underground, Ahafo Mill Expansion, Quecher Main and Tanami Power projects has been approved and these projects are in execution. Additional projects represent incremental improvements to production and cost guidance. Internal rates of return (IRR) on these projects are calculated at a US$1200 gold price.

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