New York Stock Exchange-listed Newmont Mining Corporation has announced first quarter results, including $227 million in free cash flow and $803 million in adjusted earnings before interest, taxes, depreciation and amortisation (Adjusted EBITDA).
• Net income: Achieved adjusted net income of $182 million, or $0.34 per basic share, compared to $229 million or $0.46 per share in the prior year quarter; GAAP net income attributable to shareholders from continuing operations was $78 million, or $0.15 per share, compared to $175 million or $0.35 per share in the prior year quarter.
• Consolidated Adjusted EBITDA: Delivered Adjusted EBITDA of $803 million in the first quarter, compared to $815 million in the prior year quarter.
• Consolidated cash flow: Generated cash from continuing operations of $524 million and free cash flow from continuing operations of $227 million, compared to $628 million and $344 million in the prior year quarter.
• All-in sustaining costs (AISC): Improved gold AISC to $828 per ounce compared to $849 per ounce in the prior year quarter, and copper AISC to $1.33 per pound compared to $1.73 per pound in the prior year quarter.
• Costs applicable to sales (CAS): Reported gold CAS of $638 per ounce compared to $614 per ounce in the prior year quarter, and copper CAS of $1.05 per pound compared to $1.35 per pound in the prior year quarter
• Attributable production: Delivered 1.23 million ounces and 38,000 tonnes of attributable gold and copper production, respectively, compared to 1.19 million ounces and 37,000 tonnes, respectively, in the prior year quarter
• Outlook: Improved 2016 cost outlook and maintained long-term production and cost outlook, including profitable gold production of between 4.5 and 5.0 million ounces at AISC below $1,000 per ounce
• Portfolio: Merian, Long Canyon and the Tanami expansion are progressing on schedule; the Cripple Creek & Victor expansion reached first production at the new valley leach facility
• Shareholder returns: Maintained first quarter dividend of $0.025 per share.
“Newmont delivered another solid quarter, generating adjusted EBITDA of more than $800 million and free cash flow of $227 million on the back of strong operating performance,” said Gary Goldberg, President and Chief Executive Officer, in a statement.
“We strengthened our balance sheet with the sale of Regis for $184 million and a successful $500 million debt tender. We’re also adding profitable production as CC&V and the Leeville underground mines continue to ramp up. Merian is about 80 percent complete and will further improve portfolio costs and production as the operation comes on line in the fourth quarter,” added Mr Goldberg.
First Quarter Summary Results
Adjusted net income was $182 million, or $0.34 per share, compared to $229 or $0.46 per share in the prior year quarter. Primary adjustments to net income in the first quarter include a gain on the sale of Regis and a non-cash tax provision related to a foreign subsidiary. GAAP net income attributable to shareholders from continuing operations was $78 million, or $0.15 per share, down from $175 million or $0.35 per share a year ago.
Revenue totaled $2.0 billion in the quarter, in line with $2.0 billion in the first quarter of 2015 as higher volumes offset lower gold and copper pricing.
Average net realised gold and copper price was $1,194 per ounce and $2.02 per pound, respectively, compared with $1,203 per ounce and $2.34 per pound, respectively, in the prior year quarter.
Attributable production totaled 1.23 million ounces, compared to 1.19 million ounces in the first quarter of 2015. During the quarter, higher production at Batu Hijau and Kalgoorlie and inclusion of CC&V more than offset declining production at Yanacocha and the sale of Waihi. Attributable copper production totaled 38,000 tonnes compared to 37,000 tonnes in the year ago period as Batu Hijau continued to mine higher grade ore.
Gold CAS was $638 per ounce in the first quarter, compared to $614 in the prior year quarter. First quarter CAS was impacted by lower production at Yanacocha and Ahafo, partially offset by better sales and costs at Batu Hijau and Boddington. Copper CAS was $1.05 per pound in the first quarter, down from $1.35 in the prior year quarter due to strong sales volume at Batu Hijau. AISC was $828 per ounce and $1.33 per pound, respectively, compared to $849 per ounce and $1.73 per pound in the prior year quarter.
AISC improved over the year due to cost and efficiency improvements as well as timing related reductions in sustaining capital. For the full year sustaining capital is expected to be slightly lower due to ongoing cost and efficiency improvement.
Capital expenditures for the first quarter were $297 million, including $111 million of sustaining capital. Development capital was used to construct Merian and Long Canyon, and expansions at Cripple Creek & Victor and Tanami. With the sale of the equity stake in Regis for $184 million, Newmont has generated approximately $1.9 billion in asset sales while maintaining steady attributable gold production.
Consolidated cash flow from continuing operations was $524 million in the first quarter, compared to $628 million in the prior year quarter primarily due to changes in working capital. Free cash flow was $227 million in the first quarter, compared to $344 million in the prior year quarter. The company held $2,461 million of consolidated cash on its balance sheet at the end of the first quarter.