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Newmont’s Full Potential Program Unlocks Significant Value from Former Goldcorp Operations

May 01, 2023

Newmont has delivered over $1 billion in annual synergies, significantly exceeding the initial 18-month value commitment of $365 million following the Company’s acquisition of Goldcorp in April of 2019. All while doing it six months ahead of schedule.

More than three quarters of the synergy value was generated by focusing on the fundamentals of mining and processing through the application of Newmont’s proven Full Potential productivity and cost improvement program. A few examples:

  • At the world-class, polymetallic Peñasquito mine in Mexico, Newmont increased the average payload for haul trucks by 17 metric tons per load, which translates into an additional 12 million metric tons moved per year for next to zero cost. Combined with other loading and hauling improvements at Peñasquito, this top-tier operation increased annual metric tons mined by over 20% in 2020 with no additional equipment.
  • Newmont enhanced the processing circuit at Peñasquito by understanding and addressing bottlenecks in the crushing, grinding and flotation circuits of this complex, polymetallic operation. Since resolving these issues, Peñasquito has delivered a 7% increase in annual throughput compared to 2020, translating to over $300 million in free cash flow improvements each year.
  • In Canada, Newmont implemented a tele-remote system for underground loading and hauling at the Porcupine, Musselwhite and Éléonore mines. This technology eliminated underground safety risks for operators, while enabling more efficient shift changes, thereby improving underground working times by an average of five hours per day.
  • The successful implementation of the tele-remote system in Canada was recently replicated at the Cerro Negro operation in Argentina, making it the first mine in the country to use this technology for improved safety and productivity performance.

The Full Potential program has enabled Newmont to harness its integrated operating model to rapidly replicate and deploy leading practices consistently around the world.

Newmont’s successful integration of Goldcorp went far beyond harnessing synergies and generating leading shareholder returns. Aligning the former Goldcorp organization with Newmont’s purpose, values and culture was key to securing the value-generating successes described above by:

  • Fully implementing Newmont’s safety systems and processes
  • Integrating Newmont’s sustainability goals and targets
  • Forging lasting community and host country relationships in three new jurisdictions

Looking ahead, Newmont has built a powerful global portfolio with the people, scale and mine life to continue delivering long-term value to all of the Company’s stakeholders through safe, profitable and responsible mining.

 

 

*Legal Cautionary Statement and Endnotes

Full Potential. Full Potential improvement value creation is considered an operating measure provided for illustrative purposes, and should not be considered GAAP or non-GAAP financial measures. Full Potential amounts are estimates utilized by management that represent estimated cumulative incremental value realized as a result of Full Potential projects implemented and are based upon both cost savings and efficiencies that have been monetized for purposes of the estimation. Because Full Potential improvement estimates reflect differences between certain actual costs incurred and management estimates of costs that would have been incurred in the absence of the Full Potential program, such estimates are necessarily imprecise and are based on numerous judgments and assumptions. Expectations of the future results of Full Potential savings, synergies or improvements are forward-looking statements and subject to risks and uncertainties.

Synergies. Synergies and value creation from any past or future acquisitions as used in this presentation is a management estimate provided for illustrative purposes and should not be considered a GAAP or non-GAAP financial measure. Synergies represent management’s combined estimate of pre-tax synergies, supply chain efficiencies and Full Potential improvements, as a result of the integration of Newmont’s and Goldcorp’s businesses that have been monetized for the purposes of the estimation. Because synergies estimates reflect differences between certain actual costs incurred and management estimates of costs that would have been incurred in the absence of the integration of Newmont’s and Goldcorp’s businesses, such estimates are necessarily imprecise and are based on numerous judgments and assumptions. Certain synergy estimates which speak to future results are “forward-looking statements” subject to risks, uncertainties and other factors which could cause actual value creation to differ from expected or past synergies.

Past Performance: Past performance metrics and figures included in this presentation are given for illustrative purposes only and should not be relied upon as (and are not) an indication of Newmont’s views on its or Newcrest’s future financial performance or condition or prospects (including on a consolidated basis). Investors should note that past performance of Newmont, including in relation to the past value returned to stockholders and past value creation and annual synergies, and other historical financial information cannot be relied upon as an indicator of (and provide no guidance, assurance or guarantee as to) future performance, including future synergies or value to stockholders.

Free Cash Flow Improvements: Free Cash Flow or FCF is a non-GAAP metric representing Net cash provided from operating activities of continuing operations on an attributable basis less Additions to property, plant and mine development on an attributable basis. For more information on this metric and reconciliations, please refer to the Company’s most recent earnings presentation available at https://www.newmont.com/investors/events-and-presentations/default.aspx Free Cash Flow Improvements as used herein is provided for illustrative purposes and reflects management’s estimation of the impact of the Full Potential improvements. Investors are cautioned that such estimates are necessarily imprecise and are based on numerous judgments and assumptions.

Readers are encouraged to read the information contained in this document in conjunction with the most recent Form 10-Q for the quarter ended March 31, 2023 filed with the SEC on April 27, 2023. Readers are reminded that expectations regarding outlook and guidance, including future financial results, operating performance, projects, exploration, investments, capital allocation, dividends and transactions are forward looking and remain subject to risk and uncertainties. See the risk factors section in the Form 10-K. The Form 10-K and Form 10-Q are available on Newmont’s website at https://www.newmont.com/investors and with the SEC’s website.