Newmont Goldcorp Corp (NGT)

[NYBob]

Newmont Reports 2019 Gold Mineral Reserves of 100 Million Ounces, Largest in Company History
DENVER


Newmont Corporation (NYSE: NEM, TSX: NGT) (Newmont or the Company) reported gold Mineral Reserves (reserves) of 100.2 million attributable ounces for 2019 compared to 65.4 million ounces at the end of 2018, an increase of 53 percent after successfully completing two historic transactions and through ongoing exploration success.

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Percentage of Gold Reserves by Jurisdiction (North America includes Nevada)
Percentage of Gold Reserves by Jurisdiction (North America includes Nevada)

“Newmont has the largest gold reserve base in the industry underpinned by our world-class ore bodies in top tier jurisdictions. In 2019, we added almost 50 million ounces of gold reserves through the acquisition of Goldcorp, formation of the Nevada Gold Mines joint venture and the continuation of our leading exploration program,” said Tom Palmer, President and Chief Executive Officer. “Our reserve and resource base will support stable production of more than 6 million ounces per annum for decades to come.”

Key highlights and differentiators:

Industry’s largest gold Mineral Reserves of 100.2 million ounces
Gold reserves located in top-tier jurisdictions with 88 percent in Americas and Australia
Gold reserve life at operating sites of >10 years underpinned by a strong base at Boddington, Tanami, Ahafo, Peñasquito, and Nevada Gold Mines, and further enhanced from our eight other operating mines and equity ownership in Pueblo Viejo
Significant gold reserves per share with 124 ounces per 1,000 shares
Tanami added 1.5 million ounces of gold reserves, 1.1 million ounces of Measured and Indicated gold resources and 1.6 million ounces of inferred resource
Stable production profile underpinned by long life operating assets such as Boddington with 14 years; Tanami and Peñasquito with 12 years and Ahafo with 11 years
Significant exposure to copper, silver, zinc, and lead with 63 million gold equivalent ounces (GEO)1
Measured & Indicated gold Mineral Resources of 76.7 million ounces; Inferred of 31.3 million ounces
Reported figures include Red Lake and the Company’s 50 percent interest in Kalgoorlie Consolidated Gold Mines (KCGM). Newmont successfully completed the sale of KCGM in January 2020 and expects to close the divestment of Red Lake in the first quarter of 2020. Combined, these sites represented approximately 4.5 million ounces of gold reserves and 2.6 million ounces of Measured and Indicated gold Mineral Resources (resources), bringing Newmont’s adjusted 2019 gold Mineral Reserves to 95.7 and Measured and Indicated gold Mineral Resources2 to 74.1 million ounces.

Newmont’s reserve base is a key differentiator with 88 percent of gold reserves located in top-tier jurisdictions in the Americas and Australia, an operating reserve life of more than 10 years and average reserve grade of 1.05 grams per tonne. In addition, Newmont significantly increased its exposure to other metals, with an estimated 63 million gold equivalent ounces1 from copper, silver, zinc, lead and molybdenum.

In 2019, Newmont reported 100.2 million ounces of gold Mineral Reserves and 95.7 million ounces after adjusting for the KCGM and Red Lake divestments.

The Company added 42.2 million net ounces of gold reserves through its acquisition of Goldcorp and formation of the Nevada Gold Mines (NGM) joint venture, after adjusting for revisions at select Goldcorp operating sites, which were assessed using Newmont’s rigorous technical standards.

As previously disclosed, the Coffee project and Dome pit as part of the Century project were reclassified from Mineral Reserves to Mineral Resources, due to Feasibility study requirements. The project revisions were 1.7 million ounces and 4.4 million ounces, respectively.

Additions before revisions of 7.4 million ounces through exploration exceeded the Company’s target demonstrating drilling success and the prospectivity across the portfolio. Notable reserve additions for the year included: 2.5 million equity ounces from NGM, 1.5 million ounces at Tanami, 0.7 million equity ounces at NuevaUnión, 0.5 million ounces at Merian and 0.4 million ounces at Ahafo underground. Additions nearly offset depletion of 7.7 million contained ounces, which corresponds to Newmont’s 2019 attributable production outlook of 6.3 million ounces.

Newmont’s gold reserve grade was 1.05 grams per tonne compared to 1.19 grams per tonne in the prior year, largely due to the addition of polymetallic mines and projects including Peñasquito, NuevaUnión and Norte Abierto, which was partially offset by higher-grade reserves from the Company’s 38.5 percent equity ownership in NGM.

Newmont reported attributable Measured and Indicated gold Mineral Resources of 76.7 million ounces and 31.3 million ounces of attributable Inferred gold Mineral Resources, an increase of 95 percent and 101 percent from the prior year, respectively, at a constant gold price. Adjusted for the divestitures of KCGM and Red Lake.

Measured and Indicated gold Mineral Resources are 74.1 million ounces and Inferred gold Mineral Resources are 29.4 million ounces.

The acquisition of Goldcorp and formation of the NGM joint venture added 26.5 million net ounces of Measured and Indicated gold Mineral Resources and 13.7 million net ounces of Inferred gold Mineral Resources.

Measured and Indicated gold Mineral Resources added through exploration and studies were 7.8 million ounces and included notable additions before revisions of 1.1 million ounces at Tanami, 0.9 million equity ounces at both NGM and Pueblo Viejo, 0.8 million ounces at each of Ahafo underground, NuevaUnión and Merian (equity ounces).

Additions before revisions of 5.2 million ounces of Inferred gold Mineral Resources notably included 1.6 million ounces at Tanami, 0.8 million equity ounces at NGM, and 0.7 million ounces at Peñasquito.

Newmont’s Measured and Indicated gold Mineral Resource grade increased to 0.72 grams per tonne compared to 0.69 grams per tonne in the prior year from higher grade resources from NGM and the underground mines from the Goldcorp acquisition. Inferred gold Mineral Resource grade decreased to 0.66 grams per tonne from 1.01 grams per tonne, largely due to lower grade ounces from acquired polymetallic mines and projects.

Other Metals

Newmont’s base metal reserves increased significantly with the addition of the Goldcorp assets. Copper reserves increased to 6.8 million tonnes from 1.3 million tonnes in 2018, primarily due to the additions at the NuevaUnión and Norte Abierto projects. Copper resources increased significantly, increasing to 6.8 million tonnes of Measured & Indicated and 3.5 million tonnes of Inferred from 4.1 million tonnes of Measured & Indicated and 0.5 million tonnes of Inferred.

Silver reserves also increased significantly to 652 million ounces from 86 million ounces, primarily due to additions at Peñasquito, but also supported by NuevaUnión, Norte Abierto, Cerro Negro and Pueblo Viejo. Silver resources increased to 481 million ounces of Measured & Indicated and 217 million ounces of Inferred from 128 million ounces of Measured & Indicated and 21 million ounces of Inferred.

The Company also had first time declarations totaling 3.4 million tonnes of zinc reserves and 1.5 million tonnes of lead reserves at Peñasquito, and 0.1 million tonnes of molybdenum at NuevaUnión. First time declarations of zinc and lead resources were 1.9 million tonnes of Measured & Indicated and 1.0 million tonnes of Inferred, and 0.8 million tonnes of Measured & Indicated and 0.5 million tonnes of Inferred, respectively.

Exploration Outlook

Newmont’s total attributable exploration expenditure3 is expected to be approximately $230 million in 2020, a decrease of 13 percent from the prior year as the Company captures $25 million of exploration synergies from the Goldcorp acquisition and approximately $10 million from the divestiture of KCGM and Red Lake. Around 80 percent of total exploration investment will be dedicated to near-mine expansion programs and the remaining 20 percent will be allocated to the advancement of greenfield projects and innovation programs. Geographically, the Company expects to invest approximately 30 percent in North America, 25 percent in South America, 20 percent in Australia and the remainder in Africa and other locations.

Gold Reserve Sensitivity

A $100 increase in gold price would result in an approximate six percent increase in gold reserves while a $100 decrease in gold price would result in an approximate six percent decrease in gold reserves. These sensitivities assume an oil price of $60 per barrel (WTI), Australian dollar exchange rate of $0.75 and Canadian dollar exchange rate of $0.77.

For additional details on Newmont’s reported Gold, Copper, Silver, Zinc, Lead and Molybdenum Mineral Reserves and Mineral Resources, please refer to the tables at the end of this release.

1 Gold Equivalent Ounces calculated using Mineral Reserve pricing as shown at the end of this release and metallurgical recoveries for each metal on a site-by-site basis.

2 Totals may not sum due to rounding.

3 Includes capitalized and expensed exploration.

Key Assumptions:



Years Ended
December 31



2019



2018

Gold Reserves (US$/oz.)

$1,200



$1,200

Gold Resources (US$/oz.)

$1,400



$1,400

Copper Reserves (US$/lb.)

$2.75



$2.50

Copper Resources (US$/lb.)

$3.25



$3.25

Silver Reserves (US$/oz.)

$16.00



$16.00

Silver Resources (US$/oz.)

$20.00



$20.00

Zinc Reserves (US$/lb.)

$1.20



NA

Zinc Resources (US$/lb.)

$1.45



NA

Lead Reserves (US$/lb.)

$0.95



NA

Lead Resources (US$/lb.)

$1.15



NA

Australian Dollar (A$:US$)

$0.75



$0.75

Canadian Dollar (C$:US$)

$0.77



NA

Mexican Peso (M$:US$)

$19.50



NA

West Texas Intermediate (US$/bbl.)

$60



$65


Reserve and Resource Tables

Proven and Probable reserves are based on extensive drilling, sampling, mine modeling and metallurgical testing from which we determine economic feasibility. Newmont’s metal price assumptions follow SEC guidance not to exceed a three year trailing average. The price sensitivity of reserves depends upon several factors including grade, metallurgical recovery, operating cost, waste-to-ore ratio and ore type. Metallurgical recovery rates vary depending on the metallurgical properties of each deposit and the production process used. The reserve tables included in this release list the average metallurgical recovery rate for each deposit, which takes into account the assumed processing methods. The cut-off grade, or lowest grade of material considered economic to process, varies with material type, price, metallurgical recoveries, operating costs and co- or by-product credits. The Proven and Probable reserve figures presented herein are estimates based on information available at the time of calculation. No assurance can be given that the indicated levels of recovery of gold, silver, copper, lead, zinc and molybdenum will be realized. Ounces of gold and silver or tonnes of copper, zinc, lead, or molybdenum included in the Proven and Probable reserves are those contained prior to losses during metallurgical treatment. Reserve estimates may require revision based on actual production. Market fluctuations in the price of gold, silver, copper, zinc, lead, or molybdenum, as well as increased production costs or reduced metallurgical recovery rates, could render certain Proven and Probable reserves containing relatively lower grades of mineralization uneconomic to exploit and might result in a reduction of reserves.

The Measured, Indicated, and Inferred resource figures presented herein are estimates based on information available at the time of calculation and are exclusive of reserves. A “Mineral Resource” is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade, or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. Ounces of gold and silver or tonnes of copper, zinc, lead, and molybdenum included in the Measured, Indicated and Inferred resources are those contained prior to losses during metallurgical treatment. Market fluctuations in the price of gold, silver, copper, zinc, lead and molybdenum, as well as increased production costs or reduced metallurgical recovery rates, could change future estimates of resources. Please refer to the reserves and resources cautionary statement at the end of the release.

We publish reserves and resources annually, and will recalculate reserves and resources at year-end 2020, taking into account metal prices, changes, if any, in future production and capital costs, mine designs, model changes, divestments and depletion as well as any acquisitions and additions during 2020.

The following technical reports are available to the public on SEDAR:

Ahafo South Operations, Republic of Ghana, NI 43-101 Technical Report, Report Effective Date: December 31, 2018

Boddington Operations, Western Australia, Australia, NI 43-101 Technical Report, Report Effective Date: December 31, 2018

Peñasquito Polymetallic Operations, Zacatecas State, Mexico, NI 43-101 Technical Report, Report Effective Date: 30 June 2018 (under Goldcorp’s SEDAR profile)

Tanami Operations, Northern Territory, Australia, NI 43-101 Technical Report, Report Effective Date: December 31, 2018