Business context and reporting period
Newmont Corporation is a global gold producer with additional copper, silver, lead and zinc operations across the Americas, Australia, Papua New Guinea, Africa and other jurisdictions. This Form 10-K covers the fiscal year ended December 31, 2023; it is an annual filing rather than a standalone fourth-quarter filing. Newcrest Mining results are included from the November 6, 2023 acquisition date.
Newmont completed the all-stock Newcrest acquisition for non-cash consideration of $13.549 billion, adding operations including Cadia, Lihir, Telfer, Brucejack and Red Chris, as well as interests in Lundin Gold and other investments. At year-end, Newmont reported 135.9 million attributable ounces of proven and probable gold reserves, 104.8 million ounces of measured and indicated gold resources, and 69.1 million ounces of inferred gold resources.
Financial and operating metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Sales | $11.812 billion | $11.915 billion | Down 1% |
| Net loss from continuing operations attributable to Newmont stockholders | $2.521 billion | $459 million | Loss increased $2.062 billion |
| Diluted loss per share from continuing operations | $3.00 | $0.58 | Loss increased $2.42 per share |
| Adjusted net income | $1.324 billion | $1.468 billion | Down 10% |
| Adjusted diluted EPS | $1.57 | $1.85 | Down $0.28 |
| Adjusted EBITDA | $4.215 billion | $4.550 billion | Down 7% |
| Operating cash flow from continuing operations | $2.754 billion | $3.198 billion | Down 14% |
| Free cash flow | $88 million | $1.067 billion | Down $979 million |
| Consolidated gold produced | 5.401 million ounces | 5.786 million ounces | Down 7% |
| Attributable gold produced | Approximately 5.5 million ounces | Approximately 6.0 million ounces | Down 7% |
| Gold all-in sustaining cost per ounce | $1,444 | $1,211 | Up 19% |
Gold accounted for approximately 89% of sales. Gold sales rose 2% to $10.593 billion, supported by a higher realized gold price of $1,954 per ounce versus $1,792 in 2022, but lower gold volumes and operating disruptions offset the pricing benefit. Copper sales increased 82% to $575 million following the Newcrest acquisition. Silver, lead and zinc sales declined 39%, 28% and 57%, respectively.
Costs applicable to sales increased 4% to $6.699 billion, while depreciation and amortization declined 4% to $2.108 billion. Reclamation and remediation expense increased to $1.533 billion from $921 million, including a $1.101 billion non-cash charge related primarily to the Yanacocha reclamation liability.
Capital expenditures were $2.666 billion on a cash basis, compared with $2.131 billion in 2022. Development capital included Tanami Expansion 2, Ahafo North, Cadia Block Caves, Cerro Negro expansions and Yanacocha Sulfides.
Liquidity, debt and balance sheet
- Cash and cash equivalents were $3.002 billion at December 31, 2023, compared with $2.877 billion at year-end 2022.
- Reported liquidity was $6.079 billion, consisting of cash and $3.077 billion of available revolving-credit capacity. The filing also describes approximately $6.1 billion of consolidated liquidity.
- Debt was $8.874 billion and lease and other financing obligations were $562 million. Net debt increased to $6.434 billion from $2.426 billion, primarily because of debt acquired with Newcrest.
- Debt maturities include $1.231 billion beginning in 2024 and $692 million in 2026. Newmont was in compliance with its debt covenants at year-end.
- In February 2024, Newmont amended its corporate revolving credit facility, increasing capacity from $3.0 billion to $4.0 billion and extending maturity to February 2029. Proceeds were used to repay the remaining $1.461 billion of Newcrest-related bilateral bank debt.
- Newmont paid $1.60 per common share in regular dividends during 2023 and declared $1.45 per share for the year. In February 2024, the Board declared a $0.25 per-share dividend and authorized a discretionary share-repurchase program of up to $1 billion through February 2026.
Material changes versus the prior comparable period
- The Newcrest acquisition materially increased assets, reserves, operating complexity, debt and goodwill. Newcrest contributed $944 million of sales and $136 million of net income attributable to Newmont stockholders from acquisition through year-end.
- Net loss worsened primarily because of $1.891 billion of impairment charges, $1.533 billion of reclamation and remediation expense, $464 million of Newcrest transaction and integration costs, the Peñasquito strike, a $235 million loss on abandonment of the Peñasquito pyrite leach plant, higher taxes and lower production at Akyem.
- Peñasquito operations were suspended from June through October 2023 because of a labor strike. Gold production fell 75% and the mine incurred fixed costs during the shutdown. The settlement includes an additional employee bonus equivalent to approximately two months of wages payable in the second quarter of 2024.
- Gold AISC increased substantially because of inflation, lower production, higher sustaining capital and operational disruptions. Consolidated gold AISC increased from $1,211 to $1,444 per ounce.
- Yanacocha’s reclamation liability increased by $1.131 billion. The Yanacocha Sulfides full-funds investment decision was deferred at least two years, currently to the second half of 2026.
- Gold goodwill impairments totaled $1.760 billion, principally at Peñasquito, Musselwhite and Éléonore. The Newcrest purchase price allocation remained preliminary at year-end and included $2.744 billion of provisional goodwill.
Guidance, outlook and management commentary
- Ahafo North is expected to begin commercial production in late 2025, with estimated capital costs of $950 million to $1.050 billion and expected first-five-year production of 275,000 to 325,000 ounces annually beginning in 2026.
- Tanami Expansion 2 is expected to begin commercial production in the second half of 2027, with estimated capital costs of $1.700 billion to $1.800 billion. The project is expected to add approximately 150,000 to 200,000 ounces of annual gold production during its first five years and reduce operating costs by approximately 30%.
- Cadia Block Caves is under review following the Newcrest acquisition; a more complete update was expected in mid-2024.
- In February 2024, Newmont approved a portfolio optimization program to divest Akyem, CC&V, Éléonore, Porcupine, Musselwhite, Telfer and a Canadian development project. The aggregate net book value was $3.419 billion at December 31, 2023, and the assets were expected to be classified as held for sale in the first quarter of 2024.
- Newmont targets a 32% reduction in Scope 1 and Scope 2 emissions and a 30% reduction in Scope 3 emissions by 2030, with an aspiration of carbon neutrality by 2050. The company is reviewing its post-Newcrest baseline.
Risks, contingencies and unusual items
- Metal prices, production volumes, inflation, energy costs, labor availability, foreign exchange and supply-chain performance materially affect revenue, margins, cash flow, reserves and asset values. Newmont does not currently hedge its gold, copper, silver, lead or zinc sales.
- At a $100 per-ounce decline in the long-term gold price assumption, management estimated potential impairment of long-lived assets and goodwill of up to approximately $4.1 billion before considering value beyond proven and probable reserves.
- Yanacocha closure, water-treatment and tailings-management studies remain incomplete and could result in additional material reclamation liabilities. Total reclamation and remediation liabilities were $8.786 billion at year-end, including $4.804 billion related to Yanacocha.
- At Telfer, processing was temporarily suspended in December 2023 after cracking and sinkholes were detected in a tailings-storage-facility embankment.
- Cadia faces regulatory proceedings and potential penalties relating to alleged air-emissions and tailings-storage-facility pollution. The NSW EPA investigation remains ongoing.
- Peñasquito faces continuing labor, water, security, regulatory and proposed Mexican mining-law risks. The filing states that the company obtained a provisional suspension of several provisions of the 2023 Mining Reform.
- Newmont has $2.123 billion of outstanding surety bonds, bank letters of credit and bank guarantees, primarily supporting reclamation, environmental and other obligations.
- Other contingencies include an Australian Taxation Office review involving approximately $85 million of asserted tax, a Royal Gold-related Canadian dispute seeking up to $350 million, and other legal and regulatory proceedings for which outcomes cannot be predicted.
- Cybersecurity incidents in 2023 were not identified as materially affecting the company, but Newmont remains exposed to operational-technology disruption, cyberattacks and integration risks.
- Management and Ernst & Young concluded that internal control over financial reporting was effective. However, Newcrest, representing 31% of consolidated assets and 8% of 2023 sales, was excluded from management’s year-end internal-control assessment and is expected to be incorporated beginning in the fourth quarter of 2024.
Most important facts for investors to verify
- Whether Newmont can integrate Newcrest, realize anticipated synergies and complete the preliminary purchase price allocation without material adverse adjustments.
- The timing, cost and funding of Ahafo North, Tanami Expansion 2 and Cadia Block Caves, and the outcome of the Yanacocha Sulfides review.
- Actual proceeds, taxes, liabilities and operational effects from the planned divestitures of seven non-core assets and projects.
- Progress on Yanacocha water-treatment and closure studies and the potential for further reclamation-liability increases.
- Resolution of Telfer tailings restrictions and Cadia air-quality proceedings, including any production limits, penalties or capital requirements.
- Whether gold production recovers while AISC declines from the 2023 level of $1,444 per ounce.
- Debt repayment and refinancing actions following the Newcrest-related bilateral debt repayment, including compliance with the revolving-credit facility covenant.
- The sustainability-linked debt consequences if 2030 emissions or senior-leadership diversity targets are not met.