DENVER--(BUSINESS WIRE)--
Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company)
successfully completed the sale of its ownership stake in PT Newmont
Nusa Tenggara (PTNNT), which operates the Batu Hijau copper and gold
mine in Indonesia, to PT Amman Mineral Internasional (PTAMI). The
asset’s name now changes to PT Amman Mineral Nusa Tenggara (PTAMNT).
Newmont received total consideration of $1.3 billion for its 48.5
percent economic interest in PTNNT. This amount is comprised of gross
cash proceeds of $920 million and contingent payments of $403 million
tied to higher copper prices and any future development of the Elang
deposit. Nusa Tenggara Mining Corporation, majority owned by Sumitomo
Corporation, also sold its 24.5 percent ownership stake to PTAMI.
Newmont and PTAMI have worked cooperatively throughout the sales process
and developed a productive relationship.
“Newmont has been a long-term partner with the government of Indonesia
and we support the new owner as they take responsibility for the asset
and its team,” said Gary Goldberg, President and Chief Executive
Officer. “Selling our ownership stake in PTNNT streamlines our portfolio
and allows us to focus on assets that best match our capabilities for
creating value and managing risk. We will use sale proceeds to continue
self-funding our highest margin projects, retiring debt and paying
competitive dividends. With the sale completed, our long-term cost and
production outlook remains stable, and approximately three quarters of
our gold reserves are now based in the United States and Australia. We
appreciate the support of the Batu Hijau team, PTAMI, local and national
government leaders, our host communities and our partners in completing
the sale, and will continue to work together to effect a smooth
transition.”
Batu Hijau was classified as held for sale and reported as a
discontinued operation in Newmont’s third quarter and prior period
financial results. Newmont’s adjusted net income including attributable
net income from Batu Hijau would have been $0.51 per share1.
The Company reported GAAP net income attributable to Newmont
stockholders from continuing operations of $0.32 per share; and adjusted
net income of $0.38 per share1 in the third quarter.
Newmont has generated $2.8 billion in fairly valued asset sales,
advanced five organic growth projects, and lowered net debt by 56 percent
since 2013 with the completion of this sale. The Company’s balance
sheet, free cash flow generation, and project pipeline remain among the
strongest in the gold sector. Newmont recently completed its Merian
project in Suriname on schedule and $150 million below budget and its
Cripple Creek & Victor expansion, and is progressing a new mine at Long
Canyon and expansions at Tanami and Carlin. Taken together, these
projects are expected to add one million ounces of lower cost gold
production over the next two years.
About Newmont
Newmont is a leading gold and copper producer. The Company’s operations
are primarily in the United States, Australia, Ghana, Peru and Suriname.
Newmont is the only gold producer listed in the S&P 500 Index and was
named the mining industry leader by the Dow Jones Sustainability World
Index in 2015 and 2016. The Company is an industry leader in value
creation, supported by its leading technical, environmental, social and
safety performance. Newmont was founded in 1921 and has been publicly
traded since 1925.
Cautionary Statement Regarding Forward Looking Statements:
This release contains “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended, which are intended
to be covered by the safe harbor created by such sections and other
applicable laws. Such forward-looking statements may include, without
limitation, future project funding, future debt repayment and
retirement, future dividend payments, cost and production outlook,
future receipt of contingent payments (which remain contingent upon
copper prices and any future development of Elang), future development
and operation of PTAMNT (including the Elang deposit), future
development at Long Canyon, Tanami and Carlin and associated future
production and costs, and other future financial performance or business
expectations. Where the Company expresses or implies an expectation or
belief as to future events or results, such expectation or belief is
expressed in good faith and believed to have a reasonable basis.
However, estimates are based upon certain assumptions, which may prove
to be incorrect, and “forward looking statements" remain subject to
risks, uncertainties and other factors, which could cause actual results
to differ materially from future results expressed, projected or implied
by the “forward-looking statements." Risks relating to "forward looking
statements" may include, but are not limited to, metals price
volatility, currency fluctuations, increased production costs and
variances in ore grade or recovery rates from those assumed in mining
plans, political and operational risks, community relations, conflict
resolution and outcome of projects or oppositions and governmental
regulation and judicial outcomes. For a more detailed discussion of such
risks and other factors, see the Company’s 2015 Annual Report on Form
10-K, filed on February 17, 2016, with the Securities and Exchange
Commission (SEC), and the Company’s Form 10-Q for the quarter ended
September 30, 2016, filed with the SEC on October 26, 2016 as well as
the Company’s other SEC filings. The Company does not undertake any
obligation to release publicly revisions to any “forward-looking
statement” or to comment on expectations of, or statements made by PTAMI
or other third parties in respect of the transaction, except as may be
required under applicable securities laws. Investors should not assume
that any lack of update to a previously issued “forward-looking
statement” constitutes a reaffirmation of that statement. Continued
reliance on “forward-looking statements” is at investors' own risk.
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional
information only and do not have any standard meaning prescribed by
generally accepted accounting principles (GAAP). These measures should
not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP.
Adjusted net income (loss)
Management uses Adjusted net income (loss) to evaluate the Company’s
operating performance and for planning and forecasting future business
operations. The Company believes the use of Adjusted net income (loss)
allows investors and analysts to understand the results of the
continuing operations of the Company and its direct and indirect
subsidiaries relating to the production and sale of minerals, by
excluding certain items that have a disproportionate impact on our
results for a particular period. The net income (loss) adjustments are
generally presented net of tax at the Company’s statutory effective tax
rate of 35% and net of our partners’ noncontrolling interests when
applicable. The impact of the adjustments through the Company’s
valuation allowance is included in Tax adjustments. The Tax adjustment
also includes items such as foreign tax credits, alternative minimum tax
credits, capital losses and disallowed foreign losses. Management’s
determination of the components of Adjusted net income (loss) are
evaluated periodically and based, in part, on a review of non-GAAP
financial measures used by mining industry analysts. Net income (loss)
attributable to Newmont stockholders is reconciled to Adjusted net
income (loss) as follows:
1 Non-GAAP measure. See pages 2 – 4 for reconciliation to net
income attributable to Newmont stockholders
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2016
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2015
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2016
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2015
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Net income (loss) attributable to Newmont stockholders
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$
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(358
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)
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$
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219
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$
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(283
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)
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$
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474
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Loss (income) attributable to Newmont stockholders from discontinued
operations (1)
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Holt property royalty obligation
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19
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(17
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)
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72
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(34
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Batu Hijau operations
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(69
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(43
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)
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(195
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)
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(165
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)
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Loss on classification as held for sale
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577
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—
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577
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—
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Net income (loss) attributable to Newmont stockholders from
continuing operations
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169
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159
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171
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275
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Impairment of investments (2)
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—
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19
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—
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66
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Impairment of long-lived assets (3)
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—
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2
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2
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4
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Restructuring and other (4)
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6
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7
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14
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14
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Acquisition costs (5)
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6
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5
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7
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10
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Loss (gain) on asset and investment sales (6)
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(4
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)
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(36
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)
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(108
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)
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(63
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)
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Gain on deconsolidation of TMAC (7)
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—
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(49
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)
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—
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(49
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)
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Loss on debt repayment (8)
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1
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—
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3
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—
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La Quinua leach pad revision (9)
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17
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—
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17
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—
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Tax adjustments (10)
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7
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(37
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)
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380
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79
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Adjusted net income (loss)
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$
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202
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$
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70
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$
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486
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$
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336
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|
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|
|
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Batu Hijau operations
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69
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43
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195
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|
|
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165
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Batu Hijau tax adjustments (10)
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—
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13
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—
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(14
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)
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Adjusted net income (loss) including Batu Hijau operations
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$
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271
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$
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126
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$
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681
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$
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487
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Net income (loss) per share, basic
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$
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(0.67
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)
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$
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0.42
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$
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(0.53
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)
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$
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0.93
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Loss (income) attributable to Newmont stockholders from discontinued
operations, net of taxes
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|
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|
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|
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Holt property royalty obligation
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0.04
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(0.04
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)
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0.14
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(0.07
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)
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Batu Hijau operations
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(0.13
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)
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(0.08
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)
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(0.37
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)
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|
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(0.32
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)
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Loss on classification as held for sale
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1.08
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|
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—
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|
|
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1.08
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|
|
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—
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Net income (loss) attributable to Newmont stockholders from
continuing operations
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|
0.32
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|
0.30
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|
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|
0.32
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|
0.54
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Impairment of investments, net of taxes
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—
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0.04
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—
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0.13
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Impairment of long-lived assets, net of taxes
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—
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0.01
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—
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|
0.01
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Restructuring and other, net of taxes
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0.01
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0.02
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0.03
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|
|
|
0.03
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Acquisition costs, net of taxes
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0.01
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0.01
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|
|
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0.01
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|
|
|
0.02
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Loss (gain) on asset and investment sales, net of taxes
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(0.01
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)
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(0.07
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)
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(0.21
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)
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(0.12
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)
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Gain on deconsolidation of TMAC, net of taxes
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—
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|
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(0.10
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)
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—
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|
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(0.10
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)
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Loss on debt repayment, net of taxes
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0.01
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|
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—
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|
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0.01
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|
|
—
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La Quinua leach pad revision
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0.03
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|
|
—
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|
|
|
|
0.03
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|
|
—
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Tax adjustments
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|
0.01
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|
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(0.08
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)
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0.73
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0.15
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Adjusted net income (loss) per share, basic
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$
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0.38
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$
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0.13
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|
|
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$
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0.92
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|
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$
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0.66
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Batu Hijau operations
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0.13
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|
|
|
0.08
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|
|
|
|
0.37
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|
0.32
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|
Batu Hijau tax adjustments
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|
|
—
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0.03
|
|
|
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—
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|
|
|
(0.02
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)
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Adjusted net income (loss) including Batu Hijau operations per
share, basic
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$
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0.51
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$
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0.24
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|
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$
|
1.29
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|
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$
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0.96
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net income (loss) per share, diluted
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$
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(0.67
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)
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$
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0.42
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$
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(0.53
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)
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|
$
|
0.93
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|
|
Loss (income) attributable to Newmont stockholders from discontinued
operations, net of taxes
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holt property royalty obligation
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|
|
|
0.04
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|
|
|
(0.04
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)
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|
|
|
0.14
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|
|
|
(0.07
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)
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|
Batu Hijau operations
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|
|
|
(0.13
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)
|
|
|
(0.08
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)
|
|
|
|
(0.37
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)
|
|
|
(0.32
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)
|
|
Loss on classification as held for sale
|
|
|
|
1.08
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|
|
|
—
|
|
|
|
|
1.08
|
|
|
|
—
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Net income (loss) attributable to Newmont stockholders from
continuing operations
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|
|
|
0.32
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|
|
|
0.30
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|
|
|
|
0.32
|
|
|
|
0.54
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|
|
Impairment of investments, net of taxes
|
|
|
|
—
|
|
|
|
0.04
|
|
|
|
|
—
|
|
|
|
0.13
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|
|
Impairment of long-lived assets, net of taxes
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
|
—
|
|
|
|
0.01
|
|
|
Restructuring and other, net of taxes
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
Acquisition costs, net of taxes
|
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
Loss (gain) on asset and investment sales, net of taxes
|
|
|
|
(0.01
|
)
|
|
|
(0.07
|
)
|
|
|
|
(0.21
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)
|
|
|
(0.12
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)
|
|
Gain on deconsolidation of TMAC, net of taxes
|
|
|
|
—
|
|
|
|
(0.10
|
)
|
|
|
|
—
|
|
|
|
(0.10
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)
|
|
Loss on debt repayment, net of taxes
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
|
0.01
|
|
|
|
—
|
|
|
La Quinua leach pad revision
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
|
0.03
|
|
|
|
—
|
|
|
Tax adjustments
|
|
|
|
0.01
|
|
|
|
(0.08
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)
|
|
|
|
0.72
|
|
|
|
0.15
|
|
|
Adjusted net income (loss) per share, diluted
|
|
|
$
|
0.38
|
|
|
$
|
0.13
|
|
|
|
$
|
0.91
|
|
|
$
|
0.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau operations
|
|
|
|
0.13
|
|
|
|
0.08
|
|
|
|
|
0.37
|
|
|
|
0.32
|
|
|
Batu Hijau tax adjustments
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
Adjusted net income (loss) including Batu Hijau operations per
share, basic
|
|
|
$
|
0.51
|
|
|
$
|
0.23
|
|
|
|
$
|
1.28
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
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(1)
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Loss (income) from discontinued operations relates to (i)
adjustments in our Holt property royalty, presented net of tax
expense (benefit) of $(9), $7, $(32) and $15, respectively, (ii) the
operations of Batu Hijau, presented net of tax expense (benefit) of
$90, $90, $258 and $194, respectively, and amounts attributed to
noncontrolling interest income (expense) of $(79), $(66), $(229) and
$(177), respectively, and (iii) the loss on classification as held
for sale, which has been recorded on an attributable basis. For
additional information regarding our discontinued operations, see
Note 3 to our Condensed Consolidated Financial Statements.
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(2)
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Impairment of investments, included in Other income, net, represents
other-than-temporary impairments on equity and cost method
investments and does not relate to our core operations. Amounts are
presented net of tax expense (benefit) of $-, $(10), $- and $(36),
respectively.
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(3)
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Impairment of long-lived assets, included in Other expense, net,
represents non-cash write-downs that do not impact our core
operations. Amounts are presented net of tax expense (benefit) of
$-, $(1), $(1) and $(2), respectively, and amounts attributed to
noncontrolling interest income (expense) of $-, $-, $(1) and $-,
respectively.
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(4)
|
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Restructuring and other, included in Other expense, net, represents
certain costs associated with the Full Potential initiative
announced in 2013, accrued legal costs in our Africa region during
2016 as well as system integration costs related to our acquisition
of CC&V. Amounts are presented net of tax expense (benefit) of $(1),
$(4), $(10) and $(9), respectively, and amounts attributed to
noncontrolling interest income (expense) of $-, $(1), $(2) and $(3),
respectively.
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(5)
|
|
Acquisition costs, included in Other expense, net, represents
adjustments made in 2016 to the contingent consideration liability
from the acquisition of Boddington and costs associated with the
acquisition of CC&V in 2015. Amounts are presented net of tax
expense (benefit) of $(3), $(2), $(4) and $(5), respectively.
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(6)
|
|
Loss (gain) on asset and investment sales, included in Other income,
net, primarily represents the sale of our holdings in Regis
Resources Ltd. in the first quarter of 2016, income recorded in the
third quarter of 2016 associated with contingent consideration from
the sale of certain properties in our North America segment during
2015, land sales of Hemlo mineral rights in Canada and the Relief
Canyon mine in Nevada during the first quarter of 2015 and a gain
related to the sale of our holdings in EGR in the third quarter of
2015. Amounts are presented net of tax expense (benefit) of $1, $30,
$1 and $46, respectively.
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(7)
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Gain on deconsolidation of TMAC, included in Other income, net,
resulted from the determination that TMAC should no longer be
considered a variable interest entity during the third quarter of
2015. Amounts are presented net of tax expense (benefit) of $-, $27,
$-, $27 expense (benefit), respectively.
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(8)
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Loss on debt repayment, included in Other income, net, represents
the impact of the debt tender offer on our 2019 Notes and 2039 Notes
during the first quarter of 2016 and our Term Loan paydown in the
third quarter of 2016. Amounts are presented net of tax expense
(benefit) of $-, $-, $(1) and $-, respectively.
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(9)
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La Quinua leach pad revision, included in Costs applicable to sales
and Depreciation and amortization, represents a significant write
off of the estimated recoverable ounces in our South America segment
during the third quarter of 2016. Amounts are presented net of tax
expense (benefit) of $(9), $-, $(9) and $-, respectively, and
amounts attributed to noncontrolling interest income (expense) of
$(25), $-, $(25) and $-, respectively.
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(10)
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Tax adjustments include movements in tax valuation allowance and tax
adjustments not related to core operations. Second quarter and year
to date tax adjustments were primarily the result of a tax
restructuring and a loss carryback, both of which resulted in an
increase in the Company’s valuation allowance on credits.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20161102005853/en/
Source: Newmont Mining Corporation