Newmont Sees Profits For Next 5yrs

Newmont Mining Corp has said it expects to keep profitable production of between 4.5-million and 5-million ounces of gold a year over the next five years.
In a statement released in Denver on Wednesday December 2, about the firm’s long-term operating outlook, the biggest US-based gold producer said it expects to keep all-in sustaining costs below $1,000/oz.

According to the six-page statement (attached to this story), all-in sustaining costs are expected to improve from between $900 and $960 an ounce of gold in 2016 to between $850 and $950 an ounce in 2017.

Newmont Chief Executive Gary Goldberg said: “Higher margin ounces will be added with the completion of Merian, Long Canyon, and expansions at Cripple Creek & Victor and Tanami.”

“We will also progress the next projects in our pipeline – including expansions at Carlin (Nevada) and Ahafo (Ghana) – to further improve profitability,” Goldberg said in a statement a day before Newmont holds an investor day.The mining giant said attributable gold production is expected to rise to between 5.2-million and 5.7-million ounces of gold by 2017.

The miner is expecting attributable gold production of between 4.7-million and 5.1-million ounces of gold this year and all-in sustaining costs of $880 to $940 an ounce. Attributable copper production is expected to be between 120 000 and 160 000 tonnes in 2016 and 2017 before decreasing to between 70 000 and 110 000 tonnes by 2018. The decline is due to the depletion of a higher grade phase at Newmont’s Batu Hijau mine in Indonesia in 2018

Below is the full statement 

Newmont Provides Updated Operating and Financial Outlook DENVER, December 2, 2015 – Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company) announced its updated long-term operating outlook,1 including AISC2 below $1,000 per ounce and steady cash flow generating production of at least 4.5 to 5.0 million ounces per year.

Highlights • Gold all-in sustaining costs (AISC): AISC is expected to improve from between $900 and $960 per ounce in 2016 to between $850 and $950 per ounce in 2017; longer term the Company expects to sustain savings achieved to date, and maintain AISC below $1,000 per ounce through 2020 •

Gold costs applicable to sales (CAS): CAS is expected to be between $650 and $700 per ounce in 2016, and remain stable at between $650 and $750 per ounce from 2017 to 2020; further Full Potential savings and ramp-up of profitable projects represent upside that could lower portfolio costs •

Attributable production: Gold production rises to between 5.2 and 5.7 million ounces by 2017 as CC&V, Merian and Long Canyon Phase 1 more than offset declines at Batu Hijau, Yanacocha and Twin Creeks; longer term, the Company expects steady and profitable production of between 4.5 to 5.0 million ounces per year through 2020 •

Capital: 2016 sustaining capital is expected to be between $700 and $750 million; longer term sustaining capital is expected to remain stable at between $700 and $800 million; the primary development capital expense through 2018 includes capital for the construction of Merian, Long Canyon Phase 1, CC&V expansion, and the Tanami Expansion project “Our 2016 outlook reflects ongoing performance, portfolio and balance sheet improvements.

We expect to keep our all-in sustaining costs below $1,000 per ounce and maintain profitable production of between 4.5 and five million ounces of gold per year over the next five years,” said Gary Goldberg, President and Chief Executive Officer. “Our focus remains on delivering industry-leading returns on capital and improved value to our shareholders.

Higher margin ounces will be added with the completion of Merian, Long Canyon and expansions at Cripple Creek & Victor and Tanami. We will also progress the next projects in our pipeline – including expansions at Carlin and Ahafo – to further improve profitability.” Operating and financial outlook Attributable gold production3 is expected to increase from between 4.8 and 5.3 million ounces in 2016 to between 5.2 and 5.7 million ounces in 2017, and remain stable at between 4.5 and 5.0 million ounces through 2020. New production at CC&V, Long Canyon Phase 1, Merian and Tanami Expansion help offset maturing operations at Yanacocha and mine sequencing at Batu Hijau.

The ramp-up of projects that are not yet approved, including Ahafo Mill Expansion, Subika Underground and NW Exodus represent upside of between 250,000 and 400,000 ounces of gold production beginning in 2018.

• North America production is expected to increase from between 1.9 and 2.1 million ounces in 2016 to between 2.1 and 2.3 million ounces in 2017, and return to 2016 levels by 2018. New production from CC&V and higher grades at Leeville related to the Turf Vent Shaft help offset lower production at Twin Creeks due to planned processing of lower grade stockpiles, as well as a slowdown in the 1 Outlook projections used in this release are considered “forward-looking statements” and represent management’s good faith estimates or expectations of future production results as of the date hereof. Outlook is based upon certain assumptions and remains subject to risks and uncertainties. See page 6 for the related cautionary statement. .

2 AISC as used in the Company’s Outlook is a non-GAAP metric defined as the sum of cost applicable to sales (including all direct and indirect costs related to current gold production incurred to execute on the current mine plan), remediation costs (including operating accretion and amortization of asset retirement costs), G&A, exploration expense, advanced projects and R&D, treatment and refining costs, other expense, net of one-time adjustments and sustaining capital. NonGAAP 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.

For a reconciliation of the Company’s historical AISC to CAS, please refer to the Company’s most recent Form 10-Q and other SEC filings. 3 Production outlook does not include equity production from stakes in TMAC (29.4%), La Zanja (46.94%) and Regis (19.45%).

NEWS RELEASE NYSE: NEM newmont.com Newmont Operating and Financial Outlook 2 NEWS RELEASE development rate at Leeville due to the installation of long term ground support. NW Exodus at Carlin represents additional upside currently not captured in guidance. • South America production is expected to increase from between 400,000 and 450,000 ounces in 2016 to between 600,000 and 700,000 ounces in 2017 and 2018.

Lower cost production at Merian is expected to offset the impact of maturing operations at Yanacocha. • Asia Pacific production is expected to improve from between 1.7 and 1.9 million ounces in 2016 to between 1.8 and 2.0 million ounces in 2017, before decreasing to between 1.4 and 1.7 million ounces in 2018. 2016 and 2017 benefit from higher grades at Batu Hijau and the addition of the Tanami Expansion project in 2017, with 2018 lower due to mine sequencing at Batu Hijau.

• Africa production is expected to decline from between 760,000 and 820,000 ounces in 2016 to between 700,000 and 800,000 ounces in 2017 and between 650,000 and 750,000 ounces in 2018 due primarily to lower grades at Ahafo and Akyem. Ahafo Mill Expansion and Subika Underground represent additional upside currently not captured in guidance, and if approved, would increase 2018 production to 2016 and 2017 levels. Attributable copper production is expected to be between 120,000 and 160,000 tonnes in 2016 and 2017 before decreasing to between 70,000 and 110,000 tonnes by 2018.

The decline is due to the depletion of higher grade Phase 6 ore at Batu Hijau in 2018. Production at Phoenix Copper Leach and Boddington is expected to remain stable for the period. Gold cost outlook – AISC is expected to improve from between $900 and $960 per ounce in 2016 to between $850 and $950 per ounce in 2017. 2018 costs are impacted due to mine sequencing at Boddington and in Nevada, as well as lower production at Batu Hijau, but are expected to remain below $1,000 per ounce longer term.

CAS is expected to be between $650 and $700 per ounce in 2016, and remain stable at between $650 and $750 per ounce in 2017 and 2018. Costs benefit from higher grades at Batu Hijau and the Carlin Underground mines through 2017, and from lower cost production at Tanami and Merian through 2018. Ongoing cost and efficiency improvements are expected to offset lower grades and throughput at Ahafo and maturing operations at Yanacocha. Full potential savings and lower cost ounces from projects that have yet to be approved could further improve costs longer term.

• North America AISC is expected to improve from between $850 and $925 per ounce in 2016 to between $800 and $900 per ounce in 2017, before increasing to between $900 and $1,000 per ounce in 2018. CAS is expected to improve from between $675 and $725 per ounce in 2016 to between $600 and $700 per ounce in 2017, increasing to between $700 and $800 per ounce in 2018. Nevada operating costs are expected to increase over the period mostly due to planned stripping at Carlin in 2018, partially offset by lower cost production from CC&V, Long Canyon Phase 1 and the Turf Vent Shaft.

• South America AISC is expected to decrease over the period from between $1,050 and $1,150 per ounce in 2016, to between $950 and $1,050 per ounce in 2017 and between $850 and $950 per ounce by 2018. Similarly, CAS is expected to decrease from between $760 and $810 per ounce in 2016 to between $675 and $775 per ounce in 2017 and between $600 and $700 per ounce in 2018. The primary driver is the addition of lower cost production from Merian.

The Company continues to advance sulfide and oxide options at Yanacocha through Project Integral, which would be incremental to the long-term outlook for Yanacocha. • Asia Pacific AISC is expected to be between $760 and $820 per ounce in 2016 and between $700 and $800 per ounce in 2017, before increasing to between $850 and $950 per ounce in 2018. CAS is expected to improve from between $600 and $650 per ounce in 2016 to between $550 and $650 per ounce in 2017, before rising to between $700 and $800 per ounce in 2018. Lower cost production from the Tanami Expansion project and ongoing Full Potential improvements are expected to partially offset lower grades from processing stockpiled ore at Boddington.

• Africa AISC is expected to rise from between $850 and $900 per ounce in 2016, to between $900 and $1,000 per ounce in 2017 and between $950 and $1,050 per ounce in 2018. Gold CAS is expected to increase from between $650 and $700 per ounce in 2016 to between $700 and $800 per ounce in 2017 and between $750 and $850 per ounce in 2018. Ahafo experiences increased stripping and lower grades through 2018. The Company continues to advance Ahafo Mill Expansion and Subika Underground to help counter higher grades and harder ore.

The expansions represent upside not currently captured in outlook. Newmont Operating and Financial Outlook 3 NEWS RELEASE Copper cost outlook – Copper AISC is expected to average between $1.50 and $1.70 per pound in 2016 with higher grade ore at Batu Hijau, and increase slightly to between $1.60 and $1.80 per pound in 2017, to between $2.40 and $2.60 per pound in 2018. CAS is expected to be between $1.20 and $1.40 per pound in 2016 and 2017, and increase to between $1.80 and $2.00 per pound by 2018. The increase in costs over the period is mostly due to lower production volumes at Batu Hijau as Phase 6 ore is depleted as well as mine sequencing at Boddington though 2018.

Assumptions and sensitivities – Newmont’s outlook reflects metal and oil prices and exchange rates to reflect the current market environment. The Company’s outlook assumes $1,100 per ounce gold, $2.50 per pound copper, $0.75 USD/AUD and $65 per barrel WTI. However, AISC and CAS could further benefit from lower energy prices and an improving Australian dollar exchange ratio. Every $10 reduction in the price of oil implies an expected $30 million improvement in attributable free cash flow. Similarly, every $0.05 favorable change in the Australian dollar results in a $60 million improvement in attributable free cash flow.

These estimates exclude current hedge programs. Please refer to the 10Q for further information on hedging positions. Capital – 2016 sustaining capital is expected to be between $700 and $750 million increasing to between $800 and $900 million in 2017. Additional capital in 2017 to cover equipment rebuilds, water treatment and tailings storage facilities is expected to be partially offset by ongoing efforts to improve technical and operational efficiencies. Longer term sustaining capital is expected to remain stable at between $700 and $800 million to cover infrastructure, equipment and ongoing mine development. 2016 total capital is expected to be between $1.2 and $1.4 billion, decreasing to between $900 million and $1.0 billion by 2017.

Primary development capital spend expected includes capital for the construction of Merian, Long Canyon Phase 1, CC&V expansion and the Tanami Expansion project. The Company continues to evaluate its strong pipeline of projects and development capital would be expected to increase as they are approved. Consolidated Expense Outlook – Beginning in 2016, regional general and administrative expense will be included in total general and administrative expense (G&A) and community development costs will be included in CAS. Total G&A expense will be approximately 75 percent corporate and 25 percent regional G&A. The adjusted tax rate is slightly higher in 2016 due to higher provisional mining taxes from regional produc

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