Newmont Mining Corporation Q2 Results Show Improved Operational And Financial Performance Across The Board
Newmont Mining Corporation (NYSE: NEM ) today announced second quarter 2017 results that demonstrated improved operational and financial performance as follows:
Financial Performance Results
- Net income: UP to $192 million or $0.36 per diluted share UP from $14 million from $14 million or $0.02 per share in the prior year quarter.
- Adjusted net income: UP 59% to $248 million or $0.46 per diluted share mostly due to higher sales volumes
- Revenue: UP 12% to $1,875 million due to increased sales volumes
- EBITDA: UP 16% to $698 million
- Consolidated operating cash flow from continuing operations: Down 21% to $529 million primarily due to changes in working capital.
- Free cash flow: DOWN to $346 million on improved volumes and lower capital expenditures, offset by
working capital changes.
Gold
- Gold costs applicable to sales (CAS): UP to $664 per troy ounce compared to $661 with the prior year quarter, favorable to guidance.
- Gold all-in sustaining costs (AISC): UP 3% to $884 per troy ounce, favorable to guidance primarily due to lower sustaining capital and higher sales volumes.
- Attributable gold production: UP 13% to 1.4 million troy ounces, in-line with guidance. New production from Merian and Long Canyon more than offset lower grades at Tanami and Yanacocha.
- Average realized price for gold: $1,250 per ounce for the quarter compared to $1,257 in the prior year quarter.
Copper
- Copper production: UP 15% to 15,000 tonnes Copper CAS totaled $44 million for the quarter.
- Copper CAS per pound: UP 27% to $1.38 per pound on higher sales volumes, full potential improvements and lower co-product allocation of costs to copper.
- Copper AISC: UP 22% to $1.69 per pound on improved unit CAS.
- Average realized price for copper: UP 23% to $2.46 per pound.
Balance Sheet:
- Cash on hand: $3.1 billion.
- Leverage ratio: at 0.6x net debt to adjusted EBITDA one of the best credit ratings in the mining sector.
Financial Strength:
- Reduced net debt to $1.5 billion, ending the quarter with $3.1 billion cash on hand, and an industry-leading, investment-grade credit profile;
- Repaid $575 million in convertible senior notes;
- Tripled dividend from the prior year quarter to $0.075 per share.
Production and cost outlook for 2017:
Newmont’s outlook reflects steady gold production and ongoing investment in its current assets and best growth prospects. Newmont does not include
potential cost and efficiency improvements in its outlook beyond 2017, nor does it include development projects that have not yet been funded or reached
the execution stage – both of which represent upside to guidance. Economic assumptions include $1,200 per ounce gold, $2.50 per pound copper, $55 per barrel WTI and $0.75 Australian dollar exchange rate.
- Attributable production guidance improves to between 5.0 and 5.4 million troy ounces of gold;
- CAS guidance improves to between $675 and $715 per troy ounce;
- AISC guidance improves to between $900 and $950 per troy ounce;
- Capital guidance lowered to between $890 and $990 million;
- G&A guidance improved.
Gary J. Goldberg, President and Chief Executive Officer, said in the company's press release that:
“Operational execution has driven superior second quarter results, further investment in profitable growth, and improved guidance for 2017.
- We increased adjusted EBITDA by $98 million compared to the prior year quarter to nearly $700 million, and reported free cash flow of $346 million.
- Operations across the portfolio outperformed, reducing all-in sustaining costs to $884 per ounce and producing 13 percent more gold on an attributable basis.
- We expect to sustain this performance through strong technical fundamentals and ongoing investment in value-adding technology, and have improved our cost, capital and production outlook as a result. This performance gives us the means to fund near-term...growth and profitable expansions...and to invest in maintaining our profitability for years to come..."