Newmont Mining Corporation
2017 Annual Report and Form 10-K
Leading
in profitability and responsibility
2/26/18 9:07 AM
Our purpose is to create value and improve lives through sustainable and responsible mining.
Our Purpose
Our Values
Safety − We take care of our safety, health and wellness by recognizing, assessing and managing risk,
and choosing safer behaviors at work and home to reach our goal of zero harm.
Integrity − We behave ethically and respect each other and the customs, cultures and laws wherever we operate.
Integrity
Sustainability − We serve as a catalyst for local economic development through transparent and respectful
Sustainability
stakeholder engagement, and as responsible stewards of the environment.
Inclusion − We create an inclusive environment where employees have the opportunity to contribute,
Inclusion
develop and work together to deliver our strategy.
Responsibility − We deliver on our commitments, demonstrate leadership, and have the courage
Responsibility
to speak up and challenge the status quo.
Dollars in millions, except per share data, years ended December 31,
Sales
20172017
$ 7,348
$ 7,348
2016
$ 6,711
2015
$ 6,085
Net income (loss) attributable to Newmont from continuing operations
Per share (diluted)
Adjusted net income1
Per share (diluted)1
EBITDA1
Adjusted EBITDA1
Net cash provided by operating activities of continuing operations
Free cash flow2
Cash and equivalents
Dividends paid per share
Operating Highlights
Consolidated gold production (thousands of ounces)
Attributable gold production (thousands of ounces)
Average realized gold price ($/oz)
Costs applicable to sales ($M)
Gold costs applicable to sales ($M)
Copper costs applicable to sales ($M)
Gold costs applicable to sales ($/oz)3
Gold all-in sustaining costs ($/oz)3
Consolidated and attributable copper production (millions of pounds)
Average realized copper price ($/lb)
Copper costs applicable to sales ($/lb)3
Copper all-in sustaining costs ($/lb)3
$
$
$
$
$
$
(60)
(60)
$ (220)
$ (1)
(0.11)
(0.11)
$ (0.41)
780
780
$ 619
$
$
-
327
$ 1.46
$ 1.46
$ 1.16
$ 0.63
$ 2,582
$ 2,582
$ 1,279
$ 1,694
$ 2,653
$ 2,653
$ 2,365
$ 1,896
$ 2,350
$ 2,350
$ 1,923
$ 1,588
$ 1,484
$ 1,484
$ 790
$
277
$ 3,259
$ 3,259
$ 2,756
$ 2,363
$ 0.250
$ 0.250
$ 0.125
$ 0.100
5,654
5,654
5,266
5,266
5,243
5,031
4,898
4,584
$ 1,255
$ 1,255
$ 1,243
$ 1,149
$ 4,038
$ 4,038
$ 3,772
$ 3,578
$ 3,875
$ 3,875
$ 3,547
$ 3,347
$
$
$
$
$
$
163
163
691
691
924
924
113113
$ 225
$ 682
$ 912
119
$
$
$
231
663
933
125
$ 2.83
$ 2.83
$ 2.15
$ 2.17
$ 1.47
$ 1.47
$ 1.95
$ 1.80
$ 1.80
$ 1.80
$ 2.30
$ 2.15
Note: all amounts in the above table represent metrics of continuing operations
1 Non-GAAP metric – See pages 75-78 of the Form 10-K for reconciliation to net income (loss) attributable to Newmont stockholders
2 Non-GAAP metric – See pages 78-79 of the Form 10-K for reconciliation to net cash provided by operating activities
3 Non-GAAP metric – See pages 79-83 of the Form 10-K for reconciliation to costs applicable to sales
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Dear Shareholders,
Newmont continued its steady trajectory of improving operational, financial and social
performance in 2017, and built a stronger base for long-term value creation. Our strategy
is the engine that drives this performance – and we retooled it last year to reflect our
commitment to moving from better to best, and to maintaining that lead over a longer horizon:
From improving the underlying business to delivering
superior operational execution
In 2017, we achieved our second year of working without fatalities and held our total injury
rates to among the lowest in the mining industry. While we introduced a range of new
technologies, the one that had the most profound effect on people was installing fatigue
monitors in our entire fleet of haul trucks which, along with training, helped keep our drivers
and roads safe.
Safer operations are also more efficient. We increased cash from continuing operations by
22 percent to $2.4 billion and improved our free cash flow* by 88 percent to $1.5 billion in
2017. Attributable gold production increased by eight percent to 5.3 million ounces, while
our gold all-in sustaining costs* came in slightly higher at $924 per ounce. Our team did
not let adverse ground control or weather conditions stop them from meeting guidance in
2017. They also went the extra mile to help neighbors in Peru and Australia recover from
devastating floods.
We delivered significant improvements through our Full Potential program as we continued to
sharpen ore body reliability, mine planning and mill performance across the portfolio. We also
completed digital assessments at Twin Creeks and Boddington to prioritize how we invest
in technology – and ended the year operating more underground loaders via remote-control
and monitoring mobile equipment at five of our 12 mines through a single asset health center.
From strengthening the portfolio to sustaining a global
portfolio of long-life assets
Newmont’s assets are balanced across four geographic regions, giving us a distinct
competitive advantage in delivering long-term Reserve and margin growth. 2017 marked
the first full year of production at our newest mines – Merian and Long Canyon – and solid
progress in expanding existing mines on four continents.
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In Australia, we reached commercial production at an expansion of our world class Tanami
mine, generating an internal rate of return above 35 percent; and advanced plans for
our next underground extension. Improved resource confidence also strengthened the
investment case for our Tanami Power Project, which will lower power costs and emissions
by 20 percent, and improve supply reliability.
In North America, we approved the Twin Underground mine and advanced Northwest
Exodus in the prolific Carlin district, and progressed longer-term growth prospects at Long
Canyon and in the Canadian Yukon. In South America, we approved Quecher Main to
extend oxide production and bridge to developing Yanacocha’s extensive sulfide deposits,
and advanced early stage prospects across the Andes and Guiana Shield. We also
acquired a 19.9 percent stake in Continental Gold to support the high grade Buriticá project
and further exploration in Colombia.
In Africa, we began construction of our Ahafo Mill Expansion and Subika underground
mine. These projects will extend profitable production until at least 2029 and serve as a
gateway to developing the region’s considerable underground resource.
About three-quarters of Newmont’s gold Reserves are located in the US and Australia, an
amount that is more than double the competitive average. Increased investment in near-
mine exploration paid off in 2017 – we offset depletion by adding 6.4 million ounces of gold
Reserves at a constant gold price.
From creating value for shareholders to leading in
profitability and responsibility
In 2017, Newmont improved its share price by 10 percent and its market capitalization to
$20 billion – the highest in the gold sector. We increased adjusted EBITDA* by 12 percent to
$2.7 billion, improved cash on hand to $3.3 billion, and lowered our net debt to $0.8 billion
while continuing to invest in profitable growth. We also returned $134 million in dividends
to shareholders, and in the fourth quarter, announced plans to increase them by at least 50
percent in 2018.**
2
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Our ability to deliver superior financial performance is inextricably linked to meeting
society’s expectations for superior environmental, social and governance performance.
Milestones for 2017 included progressing strategies to promote responsible water
stewardship, tailings management and mine closure; and weighing energy and climate
change impacts in our investment decisions. We also raised social standards in 2017
– advancing human rights in our communities and across our supply chain; improving
diversity and inclusion in our workforce; and upholding the principles of free, prior and
informed consent in our exploration programs.
We were honored to be recognized as the top mining company in the Dow Jones
Sustainability Index for the third consecutive year, and to be named to the Wall Street
Journal’s top 250 best managed companies. Newmont was also named one of the world’s
most admired companies by Fortune magazine based on the quality of our management
team, and our strong performance in the areas of social responsibility, long-term
investment, people management and innovation.
This recognition speaks to the caliber of our team, as well as our success in executing
our strategy and living our values. But it does not relieve us of an ongoing responsibility
to understand the needs and expectations of our stakeholders – from employees and
investors to host communities and governments – and to bring our resources and
relationships to bear in resolving issues of mutual concern, from clean air and water to
gender parity and good jobs.
Outlook**
In 2018, for the first time since the global financial crisis, we’re seeing signs of economic
recovery and growth in developed and emerging markets. These conditions – coupled with
decreasing mine supply and increasing demand for gold as a safe haven – create a brighter
outlook for gold and for Newmont.
We expect to deliver steady gold production at competitive costs over the next five years
and beyond. This will give us the means to continue investing in the next generation of
Newmont mines and leaders, and to return higher dividends to our shareholders. Our
commitment is backed by a proven team, strategy and track record, and a differentiated
portfolio and growth pipeline.
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Key milestones for the year ahead include: **
- Generating superior cash flow, growth and dividends
- Maintaining cost and capital discipline, and delivering steady attributable production of
between 4.9 and 5.4 million ounces of gold
- Adding higher margin ounces as we complete our current projects, and optimizing the
next tranche of profitable expansions
- Pursuing promising exploration prospects to strengthen our Reserves base
- Developing an increasingly diverse workforce, and embedding a culture that supports
their ability to engage and execute the strategy
Our purpose is to create value and improve lives through responsible and sustainable
mining. We will realize that purpose by continuing to meet or exceed our commitments, and
by generating value for our shareholders and other stakeholders over a longer time horizon.
On behalf of the entire Newmont team, thank you for your ongoing trust and investment.
Sincerely,
Gary J. Goldberg
President and Chief Executive Officer
* This letter to shareholders includes non-GAAP financial measures and forward-looking statements. Please see the Form 10-K (under
the heading Non-GAAP Financial Measures in the Item 7 - MD&A section) beginning on page 74 for a reconciliation of these measures
to GAAP and a discussion of why Newmont is presenting this information; and page 11 of the Form 10-K (under the heading Forward-
Looking Statements in the Item 1 – Business section) for the cautionary statement regarding forward-looking information.
** Statements of management’s expectations with respect to future dividends, financial and operating outlook and other future results
are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created by such sections and
other applicable laws. Please see page 11 of the Form 10-K (under the heading Forward Looking Statements in the Item 1 – Business
section) for additional information.
Shareholders are cautioned that statements with respect to future dividends are non-binding; as the declaration and payment of future
dividends, including 2018 quarterly dividends, remain at the discretion of the Board of Directors and based on Newmont’s financial
results, balance sheet strength, cash and liquidity requirements, future prospects, gold and commodity prices, and other factors
deemed relevant by the Board. The Board of Directors reserves all powers related to the declaration and payment of dividends, and
may revise the payment level at any time without prior notice.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
(Mark One)
(cid:95)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2017
or
(cid:133)
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-31240
NEWMONT MINING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
6363 South Fiddler’s Green Circle
Greenwood Village, Colorado
(Address of Principal Executive Offices)
84-1611629
(I.R.S. Employer
Identification No.)
80111
(Zip Code)
Registrant’s telephone number, including area code (303) 863-7414
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Common Stock, $1.60 par value
Name of Each Exchange on Which Registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes (cid:95) No (cid:133)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes (cid:133) No (cid:95)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes (cid:95) No (cid:133)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes (cid:95) No (cid:133)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (cid:95)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
(cid:95)
(cid:133)
(Do not check if a smaller reporting company.)
Accelerated filer
Smaller reporting company
Emerging growth company
(cid:133)
(cid:133)(cid:3)
(cid:133)(cid:3)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:133)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes (cid:133) No (cid:95)
At June 30, 2017, the aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant was
$17,235,370,395 based on the closing sale price as reported on the New York Stock Exchange. There were 533,474,863 shares of common stock outstanding on
February 15, 2018.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant’s definitive Proxy Statement submitted to the Registrant’s stockholders in connection with our 2018 Annual Stockholders Meeting to be
held on April 25, 2018, are incorporated by reference into Part III of this report.
(This page has been left blank intentionally.)
TABLE OF CONTENTS
PART I
2017 RESULTS AND HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ITEM 1.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Segment Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hedging Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gold, Copper and Silver Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Licenses and Concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Condition of Physical Assets and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Health and Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees and Contractors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production and Development Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proven and Probable Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mineralized Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MINE SAFETY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF
ITEM 6.
ITEM 7.
ITEM 7A.
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.
ITEM 10.
ITEM 11.
ITEM 12.
EQUITY SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Financial Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Results of Consolidated Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-GAAP Financial Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Critical Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Metal Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Hedging . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commodity Price Exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fixed and Variable Rate Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . . . .
CONTROLS AND PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART III
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
ITEM 13.
ITEM 14.
MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE . . . . . . . . . . . . . . . . . . . . .
PRINCIPAL ACCOUNTING FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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S-1
SCH-1
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NEWMONT MINING CORPORATION
2017 RESULTS AND HIGHLIGHTS
(unaudited, in millions, except per share, per ounce and per pound)
Financial Results:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Costs applicable to sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from continuing operations attributable to Newmont stockholders . . . .
Per common share, diluted:
Net income (loss) from continuing operations attributable to Newmont stockholders . . .
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted net income (loss) (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted net income (loss) per share, diluted (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Earnings before interest, taxes and depreciation and amortization (2) . . . . . . . . . . . . . . . . .
Adjusted earnings before interest, taxes and depreciation and amortization (2) . . . . . . . . . .
Net cash provided by (used in) operating activities of continuing operations . . . . . . . . . . .
Free Cash Flow (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash dividends declared per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating Results:
Consolidated gold ounces (thousands):
Produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attributable gold ounces (thousands):
Produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated and attributable copper pounds (millions):
Produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average realized price:
Gold (per ounce) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper (per pound) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated costs applicable to sales: (1)(2)
Gold (per ounce) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper (per pound) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
All-in sustaining costs: (2)
Gold (per ounce) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper (per pound) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2) See Non-GAAP Financial Measures beginning on page 74.
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
Years Ended December 31,
2016
2015
2017
7,348
7,033
315
4,038
3,875
163
(49)
(87)
(60)
(0.11)
(0.18)
780
1.46
2,582
2,653
2,350
1,484
0.250
5,654
5,605
5,266
5,216
113
111
1,255
2.83
691
1.47
924
1.80
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
6,711
6,461
250
3,772
3,547
225
(790)
(923)
(220)
(0.41)
(1.18)
619
1.16
1,279
2,365
1,923
790
0.125
5,243
5,199
4,898
4,865
119
116
1,243
2.15
682
1.95
912
2.30
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
6,085
5,805
280
3,578
3,347
231
(141)
304
(1)
—
0.43
327
0.63
1,694
1,896
1,588
277
0.100
5,031
5,052
4,584
4,603
125
129
1,149
2.17
663
1.80
933
2.15
1
2017 Highlights
• Net income (loss): Delivered Net income (loss) from continuing operations attributable to Newmont stockholders of $(60) or $(0.11)
per diluted share, an increase of $160 from the prior year, primarily due to higher gold production and higher average realized gold
prices. The prior year was impacted by an impairment charge at Yanacocha and the current year was impacted by the changes in U.S.
tax legislation.
• Adjusted net income (loss): Delivered Adjusted net income (loss) of $780 or $1.46 per diluted share, a 26% increase from the prior
year (See “Non-GAAP Financial Measures” beginning on page 74).
• Adjusted EBITDA: Generated $2.7 billion in Adjusted EBITDA, a 12% increase from the prior year (See “Non-GAAP Financial
Measures” beginning on page 74).
• Cash flow: Reported Net cash provided by operating activities of continuing operations of $2.4 billion, up 22% from the prior year,
and free cash flow of $1.5 billion, up 88% from the prior year (See “Non-GAAP Financial Measures” beginning on page 74).
•
Portfolio improvements: During 2017, we declared commercial production at the Tanami Expansion project and approved the Tanami
Power project in Australia; achieved a full year of underground operation at Northwest Exodus and mined first ore at the Twin Creeks
Underground mine in Nevada; approved and progressed expansion of the Ahafo Mill and produced first gold at Subika Underground in
Africa; completed first full year of operations at Merian in Suriname; approved Quecher Main and increased ownership in Yanacocha in
Peru; invested in early stage development projects in the Canadian Yukon, Colombia, Guiana Shield and the Andes; and declared gold
reserves of 68.5 million ounces, fully replacing depletion at a constant gold price.
• Attributable gold production: Increased gold production 8% from the prior year to 5.3 million ounces, primarily due to a full year’s
production from Merian and Long Canyon, partially offset by lower grades at Twin Creeks, Yanacocha and Tanami, further impacted
by adverse weather conditions at Yanacocha and Tanami.
•
Financial strength: Ended the year with $3.3 billion cash on hand. In February 2018, we eliminated the gold-price linked dividend
calculation and declared a fourth quarter dividend of $0.14.
Our global project pipeline
Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life. Near-term development capital
projects are presented below. Funding for Subika Underground, Ahafo Mill Expansion, Twin Underground, Quecher Main and Tanami Power
projects has been approved and these projects are in execution.
Subika Underground, Africa. This project leverages existing infrastructure and an optimized approach to develop Ahafo’s most promising
underground resource. First production was achieved in June 2017 with commercial production expected in the second half of 2018. The project is
expected to have an average annual gold production of between 150,000 and 200,000 ounces per year for the first five years beginning in 2019 with
an initial mine life of approximately 11 years. Development capital costs (excluding capitalized interest) since approval were $80, of which $36
related to the fourth quarter of 2017.
Ahafo Mill Expansion, Africa. This project is designed to maximize resource value by improving production margins and accelerating
stockpile processing. The project also supports profitable development of Ahafo’s highly prospective underground resources. First production is
expected in the first half of 2019, with commercial production expected in the second half of 2019. The expansion is expected to have an average
annual gold production of between 75,000 and 100,000 ounces per year for the first five years beginning in 2020. Development capital costs
(excluding capitalized interest) since approval were $42, of which $20 related to the fourth quarter of 2017.
Twin Underground, North America. This project is a portal mine beneath Twin Creek’s Vista surface mine with similar mineralization. First
production was achieved in August 2017, with commercial production expected in mid-2018. The expansion is expected to have an average annual
gold production of between 30,000 and 40,000 ounces per year between 2018 and 2022. Development capital costs (excluding capitalized interest)
since approval were $13, of which $9 related to the fourth quarter of 2017.
Quecher Main, South America. This project will add oxide production at Yanacocha, leverage existing infrastructure and enable potential
future growth at Yanacocha. First production is expected in early 2019, with commercial production in the fourth quarter of 2019. Quecher Main
extends the life of the Yanacocha operation to 2027 with average annual gold production of about 200,000 ounces per year (on a consolidated basis)
between 2020 and 2025. Development capital costs (excluding capitalized interest) since approval were $12, all of which related to the fourth quarter
of 2017.
Tanami Power, Australia. This project will lower power costs from 2019, mitigate fuel supply risk and reduce carbon emissions. The project
includes a 450 kilometer natural gas pipeline to be constructed connecting the Tanami site to the Amadeus Gas Pipeline, and construction and
operation of two on-site power stations. The gas supply, gas transmission and power purchase agreements are for a ten year term with options to
extend.
We manage our wider project portfolio to maintain flexibility to address the development risks associated with our projects including
permitting, local community and government support, engineering and procurement availability, technical issues, escalating costs and other
associated risks that could adversely impact the timing and costs of certain opportunities.
2
ITEM 1. BUSINESS (dollars in millions, except per share, per ounce and per pound amounts)
Introduction
PART I
Newmont Mining Corporation is primarily a gold producer with significant operations and/or assets in the United States,
Australia, Peru, Ghana and Suriname. At December 31, 2017, Newmont had attributable proven and probable gold reserves of 68.5
million ounces and an aggregate land position of approximately 23,000 square miles (60,000 square kilometers). Newmont is also
engaged in the production of copper, principally through Boddington in Australia and Phoenix in the United States. Newmont Mining
Corporation’s original predecessor corporation was incorporated in 1921 under the laws of Delaware.
Newmont’s corporate headquarters are in Greenwood Village, Colorado, USA. In this report, “Newmont,” the “Company,”
“our” and “we” refer to Newmont Mining Corporation together with our affiliates and subsidiaries, unless the context otherwise
requires. References to “A$” refer to Australian currency and “C$” refer to Canadian currency.
Newmont’s Sales and long-lived assets for continuing operations are geographically distributed as follows:
United States . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . .
Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suriname . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017
Sales
2016
Long-Lived Assets
2015
2017
2016
2015
38 %
30 %
14 %
9 %
9 %
— %
39 %
32 %
15 %
12 %
2 %
— %
33 %
32 %
15 %
18 %
— %
2 %
45 %
19 %
16 %
14 %
6 %
— %
45 %
19 %
16 %
14 %
6 %
— %
43 %
18 %
16 %
19 %
4 %
— %
Segment Information
Our regions include North America, South America, Australia, and Africa. Our North America segment consists primarily of
Carlin, Phoenix, Twin Creeks and Long Canyon in the state of Nevada and Cripple Creek &Victor (“CC&V”) in the state of Colorado,
in the United States (collectively, “U.S.” or “USA”). Our South America segment consists primarily of Yanacocha in Peru and Merian
in Suriname. Our Australia segment consists primarily of Boddington, Tanami and Kalgoorlie in Australia. Our Africa segment
consists primarily of Ahafo and Akyem in Ghana. See Item 1A, Risk Factors, below, and Note 5 to the Consolidated Financial
Statements for information relating to our operating segments, domestic and export sales and lack of dependence on a limited number
of customers.
Products
References in this report to “attributable gold ounces” or “attributable copper pounds” mean that portion of gold or copper
produced, sold or included in proven and probable reserves based on our proportionate ownership, unless otherwise noted.
Gold
General. We had consolidated gold production from continuing operations of 5.7 million ounces (5.3 million attributable
ounces) in 2017, 5.2 million ounces (4.9 million attributable ounces) in 2016 and 5.0 million ounces (4.6 million attributable ounces)
in 2015. Of our 2017 consolidated gold production, approximately 38% came from North America, 19% from South America, 28%
from Australia and 15% from Africa.
For 2017, 2016 and 2015, 96%, 96% and 95%, respectively, of our Sales were attributable to gold. Most of our Sales come from
the sale of refined gold. The end product at our gold operations, however, is generally doré bars. Doré is an alloy consisting primarily
of gold but also containing silver and other metals. Doré is sent to refiners to produce bullion that meets the required market standard
of 99.95% gold. Under the terms of our refining agreements, the doré bars are refined for a fee, and our share of the refined gold and
the separately-recovered silver is credited to our account or delivered to buyers. A portion of gold sold from Boddington and
Kalgoorlie in Australia, Phoenix in Nevada and CC&V in Colorado is sold in a concentrate containing other metals such as copper and
silver.
3
Gold Uses. Gold generally is used for fabrication or investment. Fabricated gold has a variety of end uses, including jewelry,
electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official
coins and jewelry.
Gold Supply. A combination of mine production, recycling and draw-down of existing gold stocks held by governments,
financial institutions, industrial organizations and private individuals make up the annual gold supply. Based on public information
available, for the years 2015 through 2017, mine production has averaged approximately 70% of the annual gold supply.
Gold Price. The following table presents the annual high, low and average daily afternoon LBMA Gold Price over the past ten
years on the London Bullion Market ($/ounce):
High
Low
Average
Year
872
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,011 $
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,213 $
972
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,421 $ 1,058 $ 1,225
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,895 $ 1,319 $ 1,572
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,792 $ 1,540 $ 1,669
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,694 $ 1,192 $ 1,411
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,385 $ 1,142 $ 1,266
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,296 $ 1,049 $ 1,160
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,366 $ 1,077 $ 1,251
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,346 $ 1,151 $ 1,257
2018 (through February 15, 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,355 $ 1,311 $ 1,331
713 $
810 $
Source: London Bullion Market Association
On February 15, 2018, the afternoon fixing gold price on the London Bullion Market was $1,352 per ounce.
We generally sell our gold at the prevailing market price during the month in which the gold is delivered to the buyers. We
currently recognize revenue from a sale when the price is determinable, the gold has been loaded on a vessel or received by the
smelter, the title has been transferred and collection of the sales price is reasonably assured.
Copper
General. We had consolidated copper production from continuing operations of 113 million pounds in 2017, 119 million pounds
in 2016 and 125 million pounds in 2015. Copper sales are in the form of concentrate that is sold to smelters for further treatment and
refining, and cathode. For 2017, 2016 and 2015, 4%, 4% and 5%, respectively, of our Sales were attributable to copper. Of our 2017
consolidated copper production, approximately 29% came from North America and 71% from Australia.
Copper Uses. Refined copper is incorporated into wire and cable products for use in the construction, electric utility,
communications and transportation industries. Copper is also used in industrial equipment and machinery, consumer products and a
variety of other electrical and electronic applications and is also used to make brass. Copper substitutes include aluminum, plastics,
stainless steel and fiber optics. Refined, or cathode, copper is also an internationally traded commodity.
Copper Supply. A combination of mine production and recycled scrap material make up the annual copper supply. Mine
production since 2015 has accounted for over 70% of total refined production.
4
Copper Price. The copper price is quoted on the London Metal Exchange in terms of dollars per metric ton of high grade
copper. The following table presents the dollar per pound equivalent of the annual high, low and average daily prices of high grade
copper on the London Metal Exchange over the past ten years ($/pound):
Low
High
Year
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.08 $
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.33 $
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.42 $
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.60 $
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.93 $
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.74 $
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.37 $
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.92 $
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.69 $
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.27 $
2018 (through February 15, 2018) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3.27 $
Average
3.15
2.34
3.42
4.00
3.61
3.32
3.11
2.49
2.21
2.80
3.19
1.26 $
1.38 $
2.76 $
3.08 $
3.29 $
3.01 $
2.86 $
2.05 $
1.96 $
2.48 $
3.06 $
Source: London Metal Exchange
On February 15, 2018, the high grade copper closing price on the London Metal Exchange was $3.22 per pound.
We generally sell our copper concentrate based on the monthly average market price for the third month following the month in
which the delivery to the smelter takes place. We currently recognize revenue from a sale when the price is determinable, the
concentrate has been loaded on a vessel or received by the smelter, the title has been transferred and collection of the sales price is
reasonably assured. For revenue recognition, we use a provisional price based on the estimated forward price of the month of final
settlement. The copper concentrate is marked to market through earnings as an adjustment to revenue until final settlement.
We generally sell our copper cathode based on the weekly average market price for the week following production. Title is
transferred upon loading of the buyer’s truck.
Effective January 1, 2018, we are adopting changes to our revenue recognition policy. Refer to Note 2 of the Consolidated
Financial Statements for further information.
Silver
General. Silver is produced as a by-product at certain of our operations and is included as a reduction to Costs applicable to
sales in the Consolidated Financial Statements. We had consolidated silver production from continuing operations of 3.6 million
ounces (3.1 million attributable ounces) in 2017, 3.0 million ounces (2.8 million attributable ounces) in 2016 and 2.8 million ounces
(2.6 million attributable ounces) in 2015.
Gold and Copper Processing Methods
Gold is extracted from naturally-oxidized ores by either milling or heap leaching, depending on the amount of gold contained in the
ore, the amenability of the ore to treatment and related capital and operating costs. Higher grade oxide ores are generally processed
through mills, where the ore is ground into a fine powder and mixed with water into a slurry, which then passes through a carbon-in-leach
circuit. Lower grade oxide ores are generally processed using heap leaching. Heap leaching consists of stacking crushed or run-of-mine
ore on impermeable, synthetically lined pads where a weak cyanide solution is applied to the surface of the heap to dissolve the gold. In
both cases, the gold-bearing solution is then collected and pumped to process facilities to remove the gold by collection on carbon or by
zinc precipitation.
Gold contained in ores that are not naturally-oxidized can be directly milled if the gold is liberated and amenable to cyanidation,
generally known as free milling ores. Ores that are not amenable to cyanidation, known as refractory ores, require more costly and
complex processing techniques than oxide or free milling ore. Higher grade refractory ores are processed through either roasters or
autoclaves. Roasters heat finely ground ore to a high temperature, burn off the carbon and oxidize the sulfide minerals that prevent
efficient leaching. Autoclaves use heat, oxygen and pressure to oxidize sulfide ores.
5
Some gold sulfide ores may be processed through a flotation plant or by bio-milling. In flotation, ore is finely ground, turned
into slurry, then placed in a tank known as a flotation cell. Chemicals are added to the slurry causing the gold-containing sulfides to
attach to air bubbles and float to the top of the tank. The sulfides are removed from the cell and converted into a concentrate that can
then be processed in an autoclave or roaster to recover the gold. Bio-milling incorporates patented technology that involves
inoculation of suitable crushed ore on an impermeable leach pad with naturally occurring bacteria strains, which oxidize the sulfides
over a period of time. The ore is then processed through an oxide mill.
At Phoenix and Boddington, ore containing copper and gold is crushed to a coarse size at the mine and then transported via
conveyor to a process plant, where it is further crushed and then finely ground as a slurry. The ore is initially treated by successive
stages of flotation resulting in a copper/gold concentrate containing approximately 15% to 20% copper. Flotation concentrates are also
processed via a gravity circuit to recover fine liberated gold and then dewatered and stored for loading onto ships or rail for transport
to smelters. The flotation tailings have a residual gold content that is recovered in a carbon-in-leach circuit.
In addition, at Phoenix, copper heap leaching is performed on copper oxide ore and enriched copper sulfide ore to produce
copper cathodes. Heap leaching is accomplished by stacking uncrushed ore onto impermeable, synthetically lined pads where it is
contacted with a diluted sulfuric acid solution thus leaching the acid soluble minerals into a copper sulfate solution. The copper sulfate
solution is then collected and pumped to the solvent extraction (“SX”) plant. The SX process consists of two steps. During the first
step, the copper is extracted into an organic solvent solution. The loaded organic solution is then pumped to the second step where
copper is stripped with a strong acid solution before being sent through the electrowinning (“EW”) process. Cathodes produced in
electrowinning are 99.99% copper.
Hedging Activities
Our strategy is to provide shareholders with leverage to changes in gold and copper prices by selling our production at spot
market prices. Consequently, we do not hedge our gold and copper sales. To a limited extent, we have and may continue to manage
certain risks associated with commodity input costs, interest rates and foreign currencies using the derivative market.
For additional information, see Hedging in Item 7A, Quantitative and Qualitative Disclosures about Market Risk, and Note 17 to
the Consolidated Financial Statements.
Gold, Copper and Silver Reserves
At December 31, 2017, we had 68.5 million attributable ounces of proven and probable gold reserves. Proven and probable gold
reserves in 2017 were in line with 2016, as additions of 4.4 million ounces, revisions of 1.9 million ounces, and acquisitions of 0.1
million ounces were offset by depletion of 6.4 million ounces. Reserves at December 31, 2017 were calculated at a gold price
assumption of $1,200 or A$1,600 per ounce. A reconciliation of the changes in attributable proven and probable gold reserves during
the past three years is as follows:
Years Ended December 31,
2017 2016 2015
(millions of ounces)
Opening balance (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestments (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68.5
(6.4)
1.9
4.4
0.1
—
—
68.5
73.7
(6.0)
(0.7)
4.1
—
(2.3)
(0.3)
68.5
81.6
(6.0)
(9.8)
4.9
4.0
(0.3)
(0.7)
73.7
6
A reconciliation of the changes in attributable proven and probable gold reserves for 2017 by region is as follows:
(millions of ounces)
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28.9
(3.0)
0.4
2.5
—
28.8
6.5
(0.8)
(0.3)
0.5
0.1
6.0
20.3
(1.7)
1.3
1.1
—
21.0
12.8
(0.9)
0.5
0.3
—
12.7
North
America America Australia Africa
South
(1) The opening balances include 2.6 million and 3.3 million ounces of gold reserves in 2016 and 2015, respectively, related to Batu Hijau. For
further information regarding our discontinued operations, see Note 3 to the Consolidated Financial Statements.
(2) Revisions are due to reclassification of reserves to mineralized material, optimizations, model updates, metal price changes and updated
operating costs and recoveries. The gold price assumption remained at $1,200 per ounce in 2017 and 2016. The gold price assumption was
decreased from $1,300 to $1,200 per ounce in 2015. The impact of the change in gold price assumption decreased reserves by 2.9 million
ounces in 2015. Additionally, reserve balances reported for Conga in 2014 were reclassified to mineralized material in 2015.
(3) Additions are due to reserve conversions from mineralized material due to new drilling information and successful feasibility studies for first
time declarations.
(4) Acquisitions include an increase in ownership at Yanacocha in December 2017 and the CC&V gold mining business which the Company
acquired in August 2015. The increase in ownership at Yanacocha added 0.1 million ounces to proven and probable reserves in 2017. CC&V
added 3.8 million ounces, net of production ounces, to proven and probable gold reserves in 2015.
(5) Divestments are related to (i) the sale of the Batu Hijau mine in November 2016 and (ii) the sale of the Waihi mine in October 2015.
(6) Amounts relate to depletion, revisions and additions activity at Batu Hijau (previously included in the Australia region), which was sold in
November 2016 and classified as discontinued operations. For further information regarding our discontinued operations, see Note 3 to the
Consolidated Financial Statements.
(7) The closing balances include 2.6 million ounces of gold reserves in 2015 related to Batu Hijau. For further information regarding our
discontinued operations, see Note 3 to the Consolidated Financial Statements.
At December 31, 2017, we had 2,670 million attributable pounds of proven and probable copper reserves. The increase in
proven and probable copper reserves during 2017, compared to 2016, is due to revisions of 250 million pounds and additions of 90
million pounds, partially offset by depletion of 160 million pounds. Reserves at December 31, 2017 were calculated at a copper price
of $2.50 or A$3.35 per pound. A reconciliation of the changes in attributable proven and probable copper reserves during the past
three years is as follows:
Years Ended December 31,
2017 2016 2015
(millions of pounds)
Opening balance (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestments (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,490
(160)
250
90
—
—
2,670
5,670
(170)
(400)
—
(2,390)
(220)
2,490
7,930
(110)
(1,610)
—
—
(540)
5,670
A reconciliation of changes in attributable proven and probable copper reserves for 2017 by region is as follows:
(millions of pounds)
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,260
(60)
70
60
1,330
1,230
(100)
180
30
1,340
North
America Australia
(1)
(2)
The opening balances include 2,610 million and 3,150 million pounds of copper reserves in 2016 and 2015, respectively, related to Batu Hijau.
For further information regarding our discontinued operations, see Note 3 to the Consolidated Financial Statements.
Revisions are due to reclassification of reserves to mineralized material, optimizations, model updates, metal price changes and updated
operating costs and recoveries. The copper price assumption remained at $2.50 per pound in 2017. The copper price assumption was decreased
7
from $2.75 to $2.50 per pound in 2016 and from $3.00 to $2.75 per pound in 2015. The impact of the change in copper price assumption
decreased reserves by 270 million and 150 million pounds in 2016 and 2015, respectively. Additionally, reserve balances reported for Conga
in 2014 were reclassified to mineralized material in 2015.
Additions are due to reserve conversions from mineralized material due to new drilling information and successful feasibility studies for first
time declarations.
Divestments are related to the sale of Batu Hijau in November 2016.
Amounts relate to depletion, revisions and additions activity at Batu Hijau (previously included in the Australia region), which was sold in
November 2016 and classified as discontinued operations. For further information regarding our discontinued operations, see Note 3 to the
Consolidated Financial Statements.
The closing balances include 2,610 million pounds of copper reserves in 2015 related to Batu Hijau. For further information regarding our
discontinued operations, see Note 3 to the Consolidated Financial Statements.
(3)
(4)
(5)
(6)
Our silver reserves are a by-product of gold and/or copper reserves and are included in calculations for mine planning and
operations. At December 31, 2017, we had 87.9 million ounces of attributable proven and probable silver reserves. The decrease in
proven and probable silver reserves during 2017, compared to 2016, is due to depletion of 6.6 million ounces, partially offset by
revisions of 2.3 million ounces, additions of 1.6 million ounces and acquisitions of 1.3 million ounces. Reserves at December 31, 2017
were calculated at a silver price of $16 per ounce. A reconciliation of the changes in proven and probable silver reserves during the
past three years is as follows:
Years Ended December 31,
2017 2016 2015
(millions of ounces)
Opening balance (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestments (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
89.3
(6.6)
2.3
1.6
1.3
—
—
87.9
113.3
(7.6)
(7.4)
—
—
(7.9)
(1.1)
89.3
143.6
(7.0)
(21.1)
—
—
—
(2.2)
113.3
A reconciliation of the changes in attributable proven and probable silver reserves for 2017 by region is as follows:
(millions of ounces)
Opening balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Closing balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
60.9
(3.6)
2.1
1.5
—
60.9
28.4
(3.0)
0.2
0.1
1.3
27.0
North
South
America America
(1)
(2)
(3)
(4)
(5)
(6)
(7)
The opening balances include 9.0 million and 11.2 million ounces of silver reserves in 2016 and 2015, respectively, related to Batu Hijau. For
further information regarding our discontinued operations, see Note 3 to the Consolidated Financial Statements.
Revisions are due to reclassification of reserves to mineralized material, optimizations, model updates, metal price changes and updated
operating costs and recoveries. The silver price assumption was decreased from $17 to $16 per ounce in 2017. The silver price assumption was
decreased from $19 to $17 per ounce in 2016 and from $20 to $19 per ounce in 2015. The impact of the change in silver price assumption had
no impact in 2017. The impact of the change in silver price assumption decreased reserves by 11 million and 9 million ounces in 2016 and
2015, respectively. Additionally, reserve balances reported for Conga in 2014 were reclassified to mineralized material in 2015.
Additions are due to reserve conversions from mineralized material due to new drilling information and successful feasibility studies for first
time declarations.
Acquisitions include an increase in ownership at Yanacocha in December 2017. The increase in ownership at Yanacocha added 1.3 million
ounces to proven and probable reserves in 2017.
Divestments are related to the sale of Batu Hijau, which the Company sold in November 2016.
Amounts relate to depletion, revisions and additions activity at Batu Hijau (previously included in the Australia region), which was sold in
November 2016 and classified as discontinued operations. For further information regarding our discontinued operations, see Note 3 to the
Consolidated Financial Statements.
The closing balances include 9.0 million ounces of silver reserves in 2015 related to Batu Hijau. For further information regarding our
discontinued operations, see Note 3 to the Consolidated Financial Statements.
8
Our exploration efforts are directed to the discovery of new mineralized material and converting it into proven and probable
reserves. We conduct brownfield exploration around our existing mines and greenfield exploration in other regions globally.
Brownfield exploration can result in the discovery of additional deposits, which may receive the economic benefit of existing
operating, processing and administrative infrastructures. In contrast, the discovery of mineralization through greenfield exploration
efforts will require capital investment to build a stand-alone operation. Our Exploration expense was $179, $148 and $156 in 2017,
2016 and 2015, respectively.
For additional information, see Item 2, Properties, Proven and Probable Reserves.
Licenses and Concessions
Other than operating licenses for our mining and processing facilities, there are no third party patents, licenses or franchises
material to our business. In many countries, however, we conduct our mining and exploration activities pursuant to concessions
granted by, or under contracts with, the host government. These countries include, among others, the United States, Australia, Ghana,
Peru and Suriname. The concessions and contracts are subject to the political risks associated with the host country. See Item 1A, Risk
Factors, below.
Condition of Physical Assets and Insurance
Our business is capital intensive and requires ongoing capital investment for the replacement, modernization or expansion of
equipment and facilities. For more information, see Liquidity and Capital Resources in Item 7, Management’s Discussion and
Analysis of Consolidated Financial Condition and Results of Operations, below.
We maintain insurance policies against property loss and business interruption and insure against risks that are typical in the
operation of our business, in amounts that we believe to be reasonable. Such insurance, however, contains exclusions and limitations
on coverage, particularly with respect to environmental liability and political risk. There can be no assurance that claims would be
paid under such insurance policies in connection with a particular event. See Item 1A, Risk Factors, below.
Environmental Matters
Our United States mining and exploration activities are subject to various federal and state laws and regulations governing the
protection of the environment, including the Clean Air Act; the Clean Water Act; the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Endangered Species Act; the
Federal Land Policy and Management Act; the National Environmental Policy Act; the Resource Conservation and Recovery Act; and
related state laws. These laws and regulations are continually changing and are generally becoming more restrictive. Our activities
outside the United States are also subject to various levels of governmental regulations for the protection of the environment and, in
some cases, those regulations can be as, or more, restrictive than those in the United States.
We conduct our operations so as to protect public health and the environment and believe our operations are in compliance with
applicable laws and regulations in all material respects. Each operating mine has a reclamation plan in place that meets in all material
respects applicable legal and regulatory requirements. At December 31, 2017, $1,965 was accrued for reclamation costs relating to
current or recently producing properties.
We are involved in several matters concerning environmental obligations associated with former, primarily historic, mining
activities. Generally, these matters concern developing and implementing remediation plans at the various sites. Based upon our best
estimate of our liability for these matters, $289 was accrued at December 31, 2017 for such obligations associated with properties
previously owned or operated by us or our subsidiaries. The amounts accrued for these matters are reviewed periodically based upon
facts and circumstances available at the time.
For a discussion of the most significant reclamation and remediation activities, see Item 7, Management’s Discussion and
Analysis of Consolidated Financial Condition and Results of Operations, and Note 6 and Note 29 to the Consolidated Financial
Statements.
In addition to legal and regulatory compliance, we have developed complementary programs to guide our Company toward
achieving transparent and sustainable environmental and socially responsible performance objectives. In support of our management’s
commitment towards these objectives, our corporate headquarters are located in an environmentally sustainable, Leadership in Energy
and Environmental Design, gold-certified building. We are committed to managing climate change related risks and responsibly
9
managing our greenhouse gas emissions. We have publicly reported our greenhouse gas emissions since 2004 to the Carbon
Disclosure Project (now known only as “CDP”). Our greenhouse gas emissions are independently verified to satisfy all the
requirements for emissions reporting under ISO International Standard 14064-3:2006. We actively participate in the International
Council on Mining and Metals (“ICMM”) and are committed to the ICMM’s 10 Principles of Sustainable Development and its
commitment to implement the UN Global Compact's 10 principles on human rights, bribery and corruption, labor and the
environment. In 2017, all Newmont operated sites maintained their certification as ISO 14001 compliant except for two new mines
commissioned in 2016: Merian in Suriname and Long Canyon in Nevada. Both of these operations will be certified as ISO 14001
compliant within the next two years. We transparently report on our sustainability performance in accordance with the Global
Reporting Initiative (“GRI”) guidelines, including the Mining and Metals Sector Supplement to meet the requirements of GRI
Application Level A+. In 2017, for the third year in a row, Newmont was ranked by the Dow Jones Sustainability World Index (“DJSI
World”) as the mining industry’s overall leader in sustainability. Newmont’s inclusion on the index also marked the 11th consecutive
year the Company has been selected for the DJSI World. Newmont also received the highest score in the mining sector across a
number of areas measured by the index including Occupational Health and Safety, Risk and Crisis Management; Climate Strategy;
Environmental Policy and Management Systems; Water-related Risks; Asset Closure Management; and Corporate Citizenship and
Philanthropy. As of the end of 2017, all of our sites were certified through the International Cyanide Management Code (“ICMC”) or
in the process for re-certification by independent auditors except for the two mines commissioned in 2016. Merian and Long Canyon,
both commissioned in the fourth quarter 2016, completed independent audits in 2017 within one year of their commercial production
dates. The audit reports are currently under review by the International Cyanide Management Institute for certification under the
ICMC in 2018.
Health and Safety
We conduct our operations so as to protect the health and safety of our employees and contractors and believe that our
operations are in compliance with applicable laws and regulations in all material respects. In addition, the Company has an established
Health & Safety Management System and Health & Safety Standards that in most cases exceed the regulatory requirements in the
jurisdictions in which we operate. The quality of our Health & Safety Management System is audited regularly as part of our
assurance and governance process.
The safety of our people and the communities in which we operate is our top priority with the right to life and right to safe
working conditions among our most salient human rights. We strongly believe it is possible to effectively manage these risks so
everyone returns home safely at the end of the day. To embed a culture of Zero Harm, Newmont has centered its health and safety
activities on four key focus areas: health and safety leadership, fatality prevention, employee engagement and occupational health and
wellness.
No work-related fatalities have occurred at any Newmont site or facility since September 2015. While having no fatalities for
the second consecutive year is a notable achievement, we still experienced incidents where the outcomes could have been much more
significant, highlighting the need to further integrate our fatality risk management system throughout our operations.
Managing fatality and health risks remains a core component of our health and safety journey. In recent years, the primary focus
of our safety strategy has been on eliminating fatalities in the workplace. Launched in 2016, our Fatality Risk Management system
provides the rigor and discipline around understanding our top risks and effectively managing them through robust controls and
systems. The Fatality Risk Management system is focused on the top 16 fatality risks that are common across our business along with
the three to four critical controls that must be in place every time we undertake a task involving those risks to prevent or minimize the
consequence of a fatality. To ensure the critical controls are in place and effective at the time the work activity is occurring, site
managers perform frequent field-based observations called verifications. Any deficiencies found during the verifications must be
addressed before resuming work. Also essential in preventing fatalities is conducting quality event investigations and ensuring lessons
are truly learned and not just shared.
Engaging employees requires visible felt leadership and quality safety interactions. Creating a positive safety culture to support
injury and fatality prevention requires visible leadership that demonstrates care and concern for people’s safety. In 2017, we
recognized that improving quality and consistency of safety interactions supports positive leadership engagement and culture, and a
project to redesign the safety interactions program was undertaken.
We measure our health and safety performance by leading indicators, such as safety interactions and implementation of effective
critical controls, and by tracking lagging indicators, such as injury rates. All significant events are investigated, and lessons learned are
shared with workers. Investigations and corrective actions to prevent recurrence related to serious potential and actual events are
reported to the executive leadership team and the Board of Directors.
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We are committed to learning from and sharing best practices with others. We actively participate in programs to improve our
performance as members of the ICMM and the Mining Safety Roundtable. We also participate in regional health and safety programs,
such as the Western Australia Chamber of Minerals and Energy, the Ghana Chamber of Mines and the United States National Mining
Association's CORESafety program.
Employees and Contractors
Approximately 12,547 people were employed by Newmont and Newmont subsidiaries at December 31, 2017. In addition,
approximately 12,111 people were working as contractors in support of Newmont’s operations at December 31, 2017.
Forward-Looking Statements
Certain statements contained in this report (including information incorporated by reference herein) are “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provided
for under these sections. Words such as “expect(s),” “feel(s),” “believe(s),” “will,” “may,” “anticipate(s),” “estimate(s),” “should,”
“intend(s)” and similar expressions are intended to identify forward-looking statements. Our forward-looking statements may include,
without limitation:
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estimates regarding future earnings and the sensitivity of earnings to gold, copper and other metal prices;
estimates of future mineral production and sales;
estimates of future production costs, other expenses and taxes for specific operations and on a consolidated basis;
estimates of future cash flows and the sensitivity of cash flows to gold and other metal prices;
estimates of future capital expenditures, construction, production or closure activities and other cash needs, for specific
operations and on a consolidated basis, and expectations as to the funding or timing thereof;
estimates as to the projected development of certain ore deposits, including the timing of such development, the costs of
such development and other capital costs, financing plans for these deposits and expected production commencement
dates;
estimates of reserves and statements regarding future exploration results and reserve replacement and the sensitivity of
reserves to metal price changes;
statements regarding the availability of, and terms and costs related to, future borrowing or financing and expectations
regarding future share repurchase transactions, debt repayments or debt tender transactions;
estimates regarding future exploration expenditures, results and reserves and mineralized material;
statements regarding fluctuations in financial and currency markets;
estimates regarding potential cost savings, productivity, operating performance and ownership and cost structures;
expectations regarding statements regarding future transactions, including, without limitation, statements related to
future acquisitions and projected benefits, synergies and costs associated with acquisitions and related matters;
expectations regarding the start-up time, design, mine life, production and costs applicable to sales and exploration
potential of our projects;
statements regarding future hedge and derivative positions or modifications thereto;
statements regarding political, economic or governmental conditions and environments;
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statements regarding the impacts of changes in the legal and regulatory environment in which we operate, including,
without limitation, relating to regional, national, domestic and foreign laws;
statements regarding expected changes in the tax regimes in which we operate, including, without limitation, estimates of
future tax rates and estimates of the impacts to income tax expense, valuation of deferred tax assets and liabilities, and
other financial impacts resulting from recent changes to U.S. tax laws;
estimates of income taxes and expectations relating to tax contingencies or tax audits;
estimates of future costs, accruals for reclamation costs and other liabilities for certain environmental matters, including
without limitation with respect to our Yanacocha operation;
estimates of pension and other post-retirement costs; and
statements regarding estimates of timing of voluntary early adoption of recent accounting pronouncements and
expectations regarding future impacts to the financial statements resulting from accounting pronouncements.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties and other factors,
which could cause actual results to differ materially from future results expressed, projected or implied by those forward-looking
statements. Such risks include, but are not limited to:
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the price of gold, copper and other metal prices and commodities;
the cost of operations;
currency fluctuations;
geological and metallurgical assumptions;
operating performance of equipment, processes and facilities;
labor relations;
timing of receipt of necessary governmental permits or approvals;
domestic and foreign laws or regulations, particularly relating to the environment, mining and processing;
changes in tax laws;
domestic and international economic and political conditions;
our ability to obtain or maintain necessary financing; and
other risks and hazards associated with mining operations.
More detailed information regarding these factors is included in Item 1, Business; Item 1A, Risk Factors and elsewhere
throughout this report. Many of these factors are beyond our ability to control or predict. Given these uncertainties, readers are
cautioned not to place undue reliance on our forward-looking statements.
All subsequent written and oral forward-looking statements attributable to Newmont or to persons acting on its behalf are
expressly qualified in their entirety by these cautionary statements. We disclaim any intention or obligation to update publicly any
forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under
applicable securities laws.
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Available Information
Newmont maintains a website at www.newmont.com and makes available, through the Investor Relations section of the
website, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Section 16 filings and all
amendments to those reports, as soon as reasonably practicable after such material is electronically filed with the Securities and
Exchange Commission (“SEC”). Certain other information, including Newmont’s Corporate Governance Guidelines, the charters of
key committees of its Board of Directors and its Code of Conduct are also available on the website.
ITEM 1A. RISK FACTORS (dollars in millions, except per share, per ounce and per pound amounts)
Our business activities are subject to significant risks, including those described below. You should carefully consider these
risks. If any of the described risks actually occurs, our business, financial position and results of operations could be materially
adversely affected. Such risks are not the only ones we face and additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also affect our business. This report contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a
number of factors, including the risks described below. See “Forward-Looking Statements.”
Risks Related to Our Business
A substantial or extended decline in gold or copper prices would have a material adverse effect on Newmont.
Our business is dependent on the prices of gold and copper, which fluctuate on a daily basis and are affected by numerous
factors beyond our control. Factors tending to influence prices include:
• Gold sales, purchases or leasing by governments and central banks;
• Speculative short positions taken by significant investors or traders in gold or copper;
• The relative strength of the U.S. dollar;
• The monetary policies employed by the world’s major Central Banks;
• The fiscal policies employed by the world’s major industrialized economies;
• Expectations of the future rate of inflation;
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Interest rates;
• Recession or reduced economic activity in the United States, China, India and other industrialized or developing
countries;
• Decreased industrial, jewelry or investment demand;
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Increased import and export taxes;
Increased supply from production, disinvestment and scrap;
• Forward sales by producers in hedging or similar transactions; and
• Availability of cheaper substitute materials.
Any decline in our realized gold or copper price adversely impacts our revenues, net income and operating cash flows,
particularly in light of our strategy of not engaging in hedging transactions with respect to gold or copper sales. We have recorded
asset impairments in the past and may experience additional impairments as a result of lower gold or copper prices in the future.
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In addition, sustained lower gold or copper prices can:
• Reduce revenues further through production declines due to cessation of the mining of deposits, or portions of deposits,
that have become uneconomic at sustained lower gold or copper prices;
• Reduce or eliminate the profit that we currently expect from ore stockpiles and ore on leach pads and increase the
likelihood and amount that the Company might be required to record as an impairment charge related to the carrying
value of its stockpiles;
• Halt or delay the development of new projects;
• Reduce funds available for exploration and advanced projects with the result that depleted reserves may not be replaced;
and
• Reduce existing reserves by removing ores from reserves that can no longer be economically processed at prevailing
prices.
We may be unable to replace gold and copper reserves as they become depleted.
Gold and copper producers must continually replace reserves depleted by production to maintain production levels over the long
term and provide a return on invested capital. Depleted reserves can be replaced in several ways, including expanding known ore
bodies, by locating new deposits or acquiring interests in reserves from third parties. Exploration is highly speculative in nature,
involves many risks and uncertainties and is frequently unsuccessful in discovering significant mineralization. Accordingly, our
current or future exploration programs may not result in new mineral producing operations. Even if significant mineralization is
discovered, it will likely take many years from the initial phases of exploration until commencement of production, during which time
the economic feasibility of production may change.
We may consider, from time to time, the acquisition of ore reserves from others related to development properties and operating
mines. Such acquisitions are typically based on an analysis of a variety of factors including historical operating results, estimates of
and assumptions regarding the extent of ore reserves, the timing of production from such reserves and cash and other operating costs.
Other factors that affect our decision to make any such acquisitions may also include our assumptions for future gold or copper prices
or other mineral prices and the projected economic returns and evaluations of existing or potential liabilities associated with the
property and its operations and projections of how these may change in the future. In addition, in connection with any acquisitions we
may rely on data and reports prepared by third parties (including ability to permit and compliance with existing regulations) and which
may contain information or data that we are unable to independently verify or confirm. Other than historical operating results, all of
these factors are uncertain and may have an impact on our revenue, our cash flow and other operating issues, as well as contributing to
the uncertainties related to the process used to estimate ore reserves. In addition, there may be intense competition for the acquisition
of attractive mining properties.
As a result of these uncertainties, our exploration programs and any acquisitions which we may pursue may not result in the
expansion or replacement of our current production with new ore reserves or operations, which could have a material adverse effect on
our business, prospects, results of operations and financial position.
Estimates of proven and probable reserves and mineralized material are uncertain and the volume and grade of ore actually
recovered may vary from our estimates.
The reserves stated in this report represent the amount of gold and copper that we estimated, at December 31, 2017, could be
economically and legally extracted or produced at the time of the reserve determination. Estimates of proven and probable reserves are
subject to considerable uncertainty. Such estimates are, to a large extent, based on the prices of gold and copper and interpretations of
geologic data obtained from drill holes and other exploration techniques, which data may not necessarily be indicative of future
results. Producers use feasibility studies for undeveloped orebodies to derive estimates of capital and operating costs based upon
anticipated tonnage and grades of ore to be mined and processed, the predicted configuration of the ore body, expected recovery rates
of metals from the ore, the costs of comparable facilities, the costs of operating and processing equipment and other factors. Actual
operating and capital cost and economic returns on projects may differ significantly from original estimates. Further, it may take many
years from the initial phases of exploration until commencement of production, during which time, the economic feasibility of
production may change.
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Additionally, the term “mineralized material” does not indicate proven and probable reserves as defined by the Securities and
Exchange Commission (“SEC”) or the Company’s standards. Estimates of mineralized material are subject to further exploration and
development, and are, therefore, subject to considerable uncertainty. Despite the Company’s history of converting a substantial portion
of mineralized material to reserves through additional drilling and study work, the Company cannot be certain that any part or parts of
the mineralized material deposit will ever be confirmed or converted into SEC Industry Guide 7 compliant reserves or that mineralized
material can be economically or legally extracted.
In addition, if the price of gold or copper declines from recent levels, if production costs increase or recovery rates decrease or if
applicable laws and regulations are adversely changed, we can offer no assurance that the indicated level of recovery will be realized
or that mineral reserves or mineralized material can be mined or processed profitably. If we determine that certain of our ore reserves
have become uneconomic, this may ultimately lead to a reduction in our aggregate reported reserves and mineralized material.
Consequently, if our actual mineral reserves and mineralized material are less than current estimates, our business, prospects, results
of operations and financial position may be materially impaired.
Increased operating and capital costs could affect our profitability.
Costs at any particular mining location are subject to variation due to a number of factors, such as variable ore grade, changing
metallurgy and revisions to mine plans in response to the physical shape and location of the ore body, as well as the age and utilization
rates for the mining and processing related facilities and equipment. In addition, costs are affected by the price and availability of
input commodities, such as fuel, electricity, labor, chemical reagents, explosives, steel, concrete and mining and processing related
equipment and facilities. Commodity costs are, at times, subject to volatile price movements, including increases that could make
production at certain operations less profitable. Further, changes in laws and regulations can affect commodity prices, uses and
transport. Reported costs may also be affected by changes in accounting standards. A material increase in costs at any significant
location could have a significant effect on our profitability and operating cash flow.
We could have significant increases in capital and operating costs over the next several years in connection with the
development of new projects in challenging jurisdictions and in the sustaining and/or expansion of existing mining and processing
operations. Costs associated with capital expenditures may increase in the future as a result of factors beyond our control. Increased
capital expenditures may have an adverse effect on the profitability of and cash flow generated from existing operations, as well as the
economic returns anticipated from new projects.
Estimates relating to new development projects and mine plans of existing operations are uncertain and we may incur higher costs
and lower economic returns than estimated.
Mine development projects typically require a number of years and significant expenditures during the development phase
before production is possible. Such projects could experience unexpected problems and delays during development, construction and
mine start-up.
Our decision to develop a project is typically based on the results of feasibility studies, which estimate the anticipated economic
returns of a project. The actual project profitability or economic feasibility may differ from such estimates as a result of any of the
following factors, among others:
• Changes in tonnage, grades and metallurgical characteristics of ore to be mined and processed;
• Changes in input commodity and labor costs;
• The quality of the data on which engineering assumptions were made;
• Adverse geotechnical conditions;
• Availability of adequate and skilled labor force;
• Availability, supply and cost of water and power;
• Fluctuations in inflation and currency exchange rates;
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• Availability and terms of financing;
• Delays in obtaining environmental or other government permits or approvals or changes in the laws and regulations
related to our operations or project development;
• Changes in tax laws, the laws and/or regulations around royalties and other taxes due to the regional and national
governments and royalty agreements;
• Weather or severe climate impacts, including, without limitation, prolonged or unexpected precipitation and/or sub-zero
temperatures;
• Potential delays relating to social and community issues, including, without limitation, issues resulting in protests, road
blockages or work stoppages; and
• Potential challenges to permits or other approvals or delays in development and construction of projects based on claims
of disturbance of cultural resources.
Our future development activities may not result in the expansion or replacement of current production with new production, or
one or more of these new production sites or facilities may be less profitable than currently anticipated or may not be profitable at all,
any of which could have a material adverse effect on our results of operations and financial position.
For our existing operations, we base our mine plans on geological and metallurgical assumptions, financial projections and
commodity price estimates. These estimates are periodically updated to reflect changes in our operations, including modifications to
our proven and probable reserves and mineralized material, revisions to environmental obligations, changes in legislation and/or our
political or economic environment, and other significant events associated with mining operations. There are numerous uncertainties
inherent in estimating quantities and qualities of gold and copper and costs to mine recoverable reserves, including many factors
beyond our control, that could cause actual results to differ materially from expected financial and operating results or result in future
impairment charges.
We may experience increased costs or losses resulting from the hazards and uncertainties associated with mining.
The exploration for natural resources and the development and production of mining operations are activities that involve a high
level of uncertainty. These can be difficult to predict and are often affected by risks and hazards outside of our control. These factors
include, but are not limited to:
• Environmental hazards, including discharge of metals, concentrates, pollutants or hazardous chemicals;
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Industrial accidents, including in connection with the operation of mining equipment, milling equipment and/or conveyor
systems and accidents associated with the preparation and ignition of large-scale blasting operations, milling and
processing;
• Accidents in connection with transportation, including transportation of chemicals, explosions or other materials,
transportation of large mining equipment and transportation of employees and business partners to and from sites;
• Surface or underground fires or floods;
• Unexpected geological formations or conditions (whether in mineral or gaseous form);
• Ground and water conditions;
• Fall-of-ground accidents in underground operations;
• Failure of mining pit slopes and tailings dam walls;
• Seismic activity; and
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• Other natural phenomena, such as lightning, cyclonic or tropical storms, floods or other inclement weather conditions,
including those impacting operations or the ability to access and supply sites. For example, in 2017 rainfall and flooding
in Northern Australia and Peru, temporarily impacted our ability to import fuel and other key deliveries to our Tanami
and Yanacocha sites, respectively.
The occurrence of one or more of these events in connection with our exploration activities and development and production of
mining operations may result in the death of, or personal injury to, our employees, other personnel or third parties, the loss of mining
equipment, damage to or destruction of mineral properties or production facilities, monetary losses, deferral or unanticipated
fluctuations in production, environmental damage and potential legal liabilities, all of which may adversely affect our reputation,
business, prospects, results of operations and financial position.
Our business is subject to the U.S. Foreign Corrupt Practices Act and other extraterritorial and domestic anti-bribery laws, a
breach or violation of which could lead to civil and criminal fines and penalties, loss of licenses or permits and other collateral
consequences and reputational harm.
We operate in certain jurisdictions that have experienced governmental and private sector corruption to some degree, and, in
certain circumstances, compliance with anti-bribery laws and heightened expectations of enforcement authorities may be in tension
with certain local customs and practices. For example, the U.S. Foreign Corrupt Practices Act and other laws with extraterritorial
reach, including the U.K. Bribery Act, and anti-bribery laws in other jurisdictions in which we operate generally prohibit companies
and their intermediaries from making improper payments for the purpose of obtaining or retaining business or other commercial
advantage. We have an ethics and compliance program which includes our Code of Conduct, Business Integrity Policy and other
policies and standards, all of which mandate compliance with these anti-bribery laws by the Company and its subsidiaries and their
personnel. Our program also includes a well-publicized hot line for raising issues and processes for investigating such issues and
assurances of non-retaliation for persons who in good faith raise concerns. We report regularly to the Audit Committee of our Board
of Directors on such programs. There can be no assurance that Newmont’s internal control policies and procedures will always protect
it from misinterpretation of or noncompliance with applicable laws and internal policies, recklessness, fraudulent behavior, dishonesty
or other inappropriate acts committed by the Company’s affiliates, employees, agents or associated persons for which we might be
claimed to be responsible. As such, our corporate policies and processes may not prevent or detect all potential breaches of law or
other governance practices. We occasionally identify or are apprised of information or allegations that certain employees, affiliates,
agents or associated persons may have engaged in unlawful conduct for which we might be held responsible. Our policy when
receiving credible information or allegations is to conduct internal investigations and compliance reviews to evaluate that information,
determine compliance with applicable anti-bribery laws and regulations and company policies and take such remedial steps as may be
warranted. In appropriate circumstances, we communicate with authorities in the United States and elsewhere about those
investigations and reviews. See Note 29 to the Financial Statements under the heading “Commitments and Contingencies –
Investigations.” Violations of these laws, or allegations of such violations, could lead to substantial civil and criminal fines and
penalties, litigation, loss of operating licenses or permits and other collateral consequences, and may damage the Company’s
reputation, which could have a material adverse effect on our business, financial position and results of operations or cause the market
value of our common shares to decline.
Shortages of critical parts and equipment may adversely affect our operations and development projects.
The mining industry has been impacted, from time to time, by increased demand for critical resources such as input
commodities, drilling equipment, trucks, shovels and tires. These shortages have, at times, impacted the efficiency of our operations,
and resulted in cost increases and delays in construction of projects; thereby impacting operating costs, capital expenditures and
production and construction schedules.
Mining companies are increasingly required to consider and provide benefits to the communities and countries in which they
operate, and are subject to extensive environmental, health and safety laws and regulations.
As a result of public concern about the real or perceived detrimental effects of economic globalization and global climate
impacts, businesses generally and large multinational corporations in natural resources industries, such as Newmont, in particular, face
increasing public scrutiny of their activities. These businesses are under pressure to demonstrate that, as they seek to generate
satisfactory returns on investment to shareholders, other stakeholders, including employees, governments, communities surrounding
operations and the countries in which they operate, benefit and will continue to benefit from their commercial activities. Such
pressures tend to be particularly focused on companies whose activities are perceived to have a high impact on their social and
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physical environment. The potential consequences of these pressures include reputational damage, legal suits, increasing social
investment obligations to communities and pressure to increase taxes and royalties payable to governments.
In addition, our ability to successfully obtain key permits and approvals to explore for, develop and operate mines and to
successfully operate near communities around the world will likely depend on our ability to develop, operate and close mines in a
manner that is consistent with the creation of social and economic benefits in the surrounding communities, which may or may not be
required by law. Our ability to obtain permits and approvals and to successfully operate near particular communities may be adversely
impacted by real or perceived detrimental events associated with our activities or those of other mining companies affecting the
environment, human health and safety of communities in which we operate. Delays in obtaining or failure to obtain government
permits and approvals may adversely affect our operations, including our ability to explore or develop properties, commence
production or continue operations. Key permits and approvals may be revoked or suspended or may be varied in a manner that
adversely affects our operations, including our ability to explore or develop properties, commence production or continue operations.
Our exploration, development, mining and processing operations are subject to extensive laws and regulations governing worker
health and safety and land use and the protection of the environment, which generally apply to air and water quality, protection of
endangered, protected or other specified species, hazardous waste management and reclamation. For example, in recent years, plans to
protect the greater sage grouse, a species whose natural habitat is found across much of the western United States, have been an area
of significant focus. As a result, in 2016, Newmont, the State of Nevada and federal agencies agreed to a historic conservation
agreement for 1.5 million acres of public and private lands managed by Newmont to protect and enhance the habitat of the greater
sage grouse and other sagebrush ecosystem species. In 2017, the current U.S. administration undertook a review of previously
proposed federal sage grouse protections, which remains on-going. The extent to which sage grouse conservation plans will be revised
and whether additional land withdrawals limiting development activities occurring on federal lands may occur remains unclear. No
assurances can be made that restrictions relating to conservation will not have an adverse impact on our growth plans or not result in
delays in project development, constraints on exploration and constraints on operations in impacted areas.
Some of the countries in which we operate have implemented, and are developing, laws and regulations related to climate
change and greenhouse gas emissions. We have made, and expect to make in the future, significant expenditures to comply with such
laws and regulations. Compliance with these laws and regulations imposes substantial costs and burdens, and can cause delays in
obtaining, or failure to obtain, government permits and approvals which may adversely impact our closure processes and operations.
Future changes in applicable laws, regulations, permits and approvals or changes in their enforcement or regulatory
interpretation could substantially increase costs to achieve compliance, lead to the revocation of existing or future exploration or
mining rights or otherwise have an adverse impact on our results of operations and financial position. For instance, the operation of
our mines in the United States is subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the
Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our mines on a regular basis and issues various
citations and orders when it believes a violation has occurred under the Mine Act. Over the past several years MSHA has significantly
increased the numbers of citations and orders charged against mining operations and increased the dollar penalties assessed for
citations issued. If MSHA inspections result in an alleged violation, we may be subject to fines, penalties or sanctions and our mining
operations could be subject to temporary or extended closures. MSHA issued fines, penalties or sanctions and mandated temporary or
extended closures could have an adverse effect on our results of operations and financial position. See Exhibit 95 to this report for
additional information regarding certain MSHA orders and citations issued during the year ended December 31, 2017.
Increased global attention or regulation on consumption of water by industrial activities, as well as water quality discharge, and
on restricting or prohibiting the use of cyanide and other hazardous substances in processing activities could similarly have an adverse
impact on our results of operations and financial position due to increased compliance and input costs.
We have implemented a management system designed to promote continuous improvement in health and safety, environmental
performance and community relations. However, our ability to operate, and thus, our results of operations and our financial position,
could be adversely affected by accidents or events detrimental (or perceived to be detrimental) to the health and safety of our
employees, the environment or the communities in which we operate.
Mine closure, reclamation and remediation costs for environmental liabilities may exceed the provisions we have made.
Natural resource extractive companies are required to close their operations and rehabilitate the lands that they mine in
accordance with a variety of environmental laws and regulations. Estimates of the total ultimate closure and rehabilitation costs for
gold and copper mining operations are significant and based principally on current legal and regulatory requirements and mine closure
plans that may change materially. For example, we have conducted extensive remediation work at two inactive sites in the United
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States. We are conducting remediation activities at a third site in the United States, an inactive uranium mine and mill site formerly
operated by a subsidiary of Newmont.
The laws and regulations governing mine closure and remediation in a particular jurisdiction are subject to review at any time
and may be amended to impose additional requirements and conditions which may cause our provisions for environmental liabilities
to be underestimated and could materially affect our financial position or results of operations. For a more detailed description of
potential environmental liabilities, see the discussion in Environmental Matters in Note 29 to the Consolidated Financial Statements.
In addition, regulators are increasingly requesting security in the form of cash collateral, credit, trust arrangements or guarantees to
secure the performance of environmental obligations, which could have an adverse effect on our financial position.
Any underestimated or unanticipated retirement and rehabilitation costs could materially affect our financial position, results of
operations and cash flows. Environmental liabilities are accrued when they become known, are probable and can be reasonably
estimated. Whenever a previously unrecognized remediation liability becomes known, or a previously estimated reclamation cost is
increased, the amount of that liability and additional cost will be recorded at that time and could materially reduce our consolidated net
income attributable to Newmont stockholders and potentially result in impairments.
For example, the Company completed a comprehensive study of the Yanacocha long-term mining and closure plans in 2016 as
part of the requirement to submit an updated closure plan to Peruvian regulators every five years. As a result, the Company recorded
an increase to the reclamation obligation at Yanacocha for the fourth quarter of 2016 in connection with an update to the Yanacocha
closure plan, resulting in an increase to the recorded asset retirement cost related to the producing areas of the mine and a non-cash
charge to reclamation expense related to the areas of the mine no longer in production. The increase to the reclamation obligation was
primarily due to higher estimated long-term water management costs, heap leach earthworks and related support activities. For
additional information regarding our review of the Yanacocha closure plan, see Note 6 to our Consolidated Financial Statements.
Regulations and pending legislation governing issues involving climate change could result in increased operating costs which
could have a material adverse effect on our business.
Producing gold is an energy-intensive business, resulting in a significant carbon footprint. Energy costs account for
approximately twenty percent of our overall operating costs, with our principal energy sources being purchased electricity, diesel fuel,
gasoline, natural gas and coal.
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to the
potential impacts of climate change that are viewed as the result of emissions from the combustion of carbon-based fuels. At the 21st
Conference of the Parties of the United Nations Framework Convention on Climate Change (“UNFCC”) held in Paris in 2015, the
Paris Agreement was adopted which was intended to govern emission reductions beyond 2020. The Paris Agreement went into effect
in November 2016 when countries that produce at least 55% of the world's greenhouse gas emissions ratified the agreement. While
there are no immediate impacts to business from the Paris Agreement, the goal of limiting global warming to “well below 2o C” will
be taken up at national levels. Industrialized nations (e.g., Australia) are likely to implement national emission reduction targets that
require an investment shift towards low carbon technologies and systems, shifting away from coal and diesel power generation. The
temperature change goal implies a move to net zero greenhouse gas emissions from energy use and industrial activities by 2050 to
2060. The relevant details of the shift towards low carbon technologies are defined in the national plans, which will need further
definition in new rules from each country by 2020. The Trump Administration has announced the intention to withdraw from the Paris
Agreement, which begins a lengthy process that will not be completed until November 2020.
Some of the countries in which we operate have implemented, and are developing, laws and regulations related to climate
change and greenhouse gas emissions. In December 2009, the United States Environmental Protection Agency (“EPA”) issued an
endangerment finding under the U.S. Clean Air Act that current and projected concentrations of certain mixed greenhouse gases,
including carbon dioxide, in the atmosphere threaten the public health and welfare. Additionally, the United States and China signed a
bilateral agreement in November 2014 that committed the United States to reduce greenhouse gas emissions by an additional 26% to
28% below 2005 levels by the year 2025. The EPA in August 2015 issued final rule for the Clean Power Plan under Section 111 (d) of
the Clean Air Act designed to reduce greenhouse gas emissions at electric utilities in line with reductions planned for the compliance
with the Paris Agreement. On October 16, 2017, the EPA as part of a regulatory review directed by the Energy Independence
Executive Order has proposed a repeal of the Clean Power Plan. In Australia the Emissions Reduction Fund legislation, Safeguard
Mechanism Rule 2015 came into effect on July 1, 2016. Facilities that exceed the baseline mandated by the law in future years are
required to purchase Australian Carbon Credit Units (ACCUs). Our Tanami operation was forecasted to exceed the baseline related to
our planned increased production profile, which would have resulted in a cost impact. The Safeguard Mechanism allows for a
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recalculation of the baseline emissions when there is a change in production output. This baseline recalculation for Tanami was
completed and successfully approved by the regulator in 2017.
Legislation and increased regulation and requirements regarding climate change could impose increased costs on us, our venture
partners and our suppliers, including increased energy, capital equipment, environmental monitoring and reporting and other costs to
comply with such regulations. In August 2015, the EPA issued the final rules for the Clean Power Plan under Section 111(d) of the
Clean Air Act. Under the Clean Power Plan Newmont’s TS Power Plant would be subject to greenhouse gas emission reductions as
part of the Nevada compliance plan. The proposed repeal of the Clean Power Plan by the EPA substantially reduces the risk of any
emission reduction requirements for next few years.
The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the
geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities,
water shortages, changing sea levels and changing temperatures. Operations that rely on national hydro-electric grid power can be
adversely affected by drought resulting in power load-shedding and lost production. These impacts may adversely impact the cost,
production and financial performance of our operations.
Our operations are subject to risks of doing business in multiple jurisdictions.
Exploration, development, production and mine closure activities are subject to regional, political, economic, community and
other risks of doing business, including:
• Disadvantages of competing against companies from countries that are not subject to the rigorous laws and regulations of
the U.S. or other jurisdictions, including without limitation, the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act
and the Dodd-Frank Act;
• Changes in laws or regulations in the jurisdictions in which we operate, including in changes resulting from changes in
political administrations;
• Potential instability of foreign governments and changes in government policies, including relating to or in response to
changes of U.S. laws or foreign policies;
• Royalty and tax increases or claims, including retroactive increases and claims and requests to renegotiate terms of
existing investment agreements, contracts of work, leases, royalties and taxes, by governmental entities, including such
increases, claims and/or requests by the governments of Australia, Ghana, Peru, Suriname, the State of Colorado and the
State of Nevada in the U.S.;
•
Increases in training and other costs and challenges relating to requirements by governmental entities to employ the
nationals of the country in which a particular operation is located;
• Delays in obtaining or renewing collective bargaining or certain labor agreements;
• Delays in obtaining or renewing, or the inability to obtain, maintain or renew, necessary governmental permits, mining
or operating leases and other agreements and/or approvals;
• Claims for increased mineral royalties or ownership interests by local or indigenous communities;
• Expropriation or nationalization of property;
• Currency fluctuations, particularly in countries with high inflation;
• Foreign exchange controls;
• Restrictions on the ability of local operating companies to sell gold offshore for U.S. dollars, or on the ability of such
companies to hold U.S. dollars or other foreign currencies in offshore bank accounts;
•
Import and export regulations, including restrictions on the export of gold and/or copper;
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•
Increases in costs relating to, or restrictions or prohibitions on, the use of ports for concentrate storage and shipping, such
as in relation to our Boddington operation where use of alternative ports is not currently economically feasible or in
relation to our ability to procure economically feasible ports for developing projects;
• Restrictions on the ability to pay dividends offshore or to otherwise repatriate funds;
• Risk of loss due to civil strife, acts of war, guerrilla activities, insurrection and terrorism;
• Risk of loss due to criminal activities such as trespass, local artisanal or illegal mining, theft and vandalism;
• Risk of disruption, damage or failure of information technology systems, and risk of loss and operational delays due to
impacts to operational technology systems, such as due to cyber-attacks, malicious software computer viruses, security
breaches, design failures and natural disasters;
• Risk of loss due to disease, such as malaria or the Zika virus, and other potential endemic health issues, such as Ebola;
• Disadvantage and risk of loss due to the limitations of certain local health systems and infrastructure to contain diseases
and potential endemic health issues;
• Risk of loss due to inability to access our properties or operations;
• Disadvantages relating to submission to the jurisdiction of foreign courts or arbitration panels or enforcement or appeals
of judgments at foreign courts or arbitration panels against a sovereign nation within its own territory; and
• Other risks arising out of foreign sovereignty over the areas in which our operations are conducted, including risks
inherent in contracts with government owned entities such as unilateral cancellation or renegotiation of contracts,
licenses or other mining rights.
Consequently, our exploration, development and production activities may be affected by these and other factors, many of
which are beyond our control, some of which could materially adversely affect our financial position or results of operations.
Our operations at Yanacocha and the development of our Conga project in Peru are subject to political and social unrest risks.
During the last several years, Minera Yanacocha S.R.L. (“Yanacocha”), in which we own a 54.05% interest, and whose
properties include the mining operations at Yanacocha and the Conga project in Peru, has been the target of local political and
community protests, some of which blocked the road between the Yanacocha mine and Conga project complexes and the City of
Cajamarca in Peru and resulted in vandalism and equipment damage. We cannot predict whether similar or more significant incidents
will occur in the future. The recurrence of significant political or community opposition or protests could continue to adversely affect
the Conga Project’s development and the continued operation of Yanacocha.
Construction activities on our Conga project were suspended on November 30, 2011, at the request of Peru’s central government
following increasing protests in Cajamarca by anti-mining activists led by the regional president. At the request of the Peruvian central
government, the environmental impact assessment prepared in connection with the project, which was previously approved by the
central government in October 2010, was reviewed by independent experts in an effort to resolve allegations around the environmental
viability of Conga. This review concluded that the environmental impact assessment complied with international standards and
provided some recommendations to improve water management. Yanacocha has focused on the construction of water reservoirs prior
to the development of other project facilities. However, development of Conga is contingent upon generating acceptable project
returns and getting local community and government support. Under the current social and political environment, the Company does
not anticipate being able to develop Conga for at least the next five years. Due to the uncertainty surrounding the project’s
development, the Company has allocated its exploration and development capital to other projects in recent years, and the Conga
project is currently in care and maintenance. Should the Company be unable to develop the Conga project, the Company may have to
consider other alternatives for the project, which may result in a future impairment charge.
The Central Government of Peru continued to support responsible mining as a vehicle for the growth and future development of
Peru in 2016. However, we are unable to predict whether the Central government will continue to take similar positions in the future.
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The regional government of Cajamarca and other political parties actively opposed the Conga project in the past. We are unable to
predict the positions that will be taken in the future and whether such positions or changes in law will affect Yanacocha or
Conga. Such changes may include increased labor regulations, environmental and other regulatory requirements, and additional taxes
and royalties, as well as future protests, community demands and road blockages. We cannot predict future positions of either the
Central or regional government on foreign investment, mining concessions, land tenure or other regulation. Any change in government
positions or laws on these issues could adversely affect the assets and operations of Yanacocha or Conga, which could have a material
adverse effect on our results of operations and financial position. Additionally, the inability to develop Conga or operate at Yanacocha
could have an adverse impact on our growth and production in the region.
In addition, in early 2015, the Peruvian government agency responsible for certain environmental regulations, the Ministry of
the Environment (“MINAM”), issued proposed water quality criteria for designated beneficial uses which apply to mining companies,
including Yanacocha. These criteria would modify the in-stream water quality criteria pursuant to which Yanacocha has been
designing water treatment processes and infrastructure. In December 2015, MINAM issued the final regulation that modified the water
quality standards. In response in February 2017, Yanacocha submitted its proposed modification to the previously approved
Environmental Impact Assessment to the Mining Ministry (“MINEM”), which is still under review. After approval, MINEM may
allow up to three years to develop and implement the modifications to the water management system. In the event Yanacocha is
unsuccessful in implementing the modifications in compliance with the new regulations and deadlines, it could result in fines and
penalties relating to potential intermittent non-compliant exceedances. In addition, if accepted the treatment options will result in
increased costs. These impacts may adversely impact the future cost and financial performance of our operations in Peru.
Our Merian operation in Suriname is subject to political and economic risks.
We hold a 75% interest in the Merian gold mine in the mid-eastern part of Suriname. The current president of Suriname and
others, including a number of members of the current administration, have been named defendants in a trial in connection with the
deaths of certain political opponents in a 1982 coup. Those proceedings were previously halted based upon an executive order.
However, in January 2017, a court in Suriname directed that the trial be recommenced and remains on-going We cannot predict the
outcome of the pending appeal or the trial. However, these proceedings could result in civil and political instability, and heighten the
risk of abrupt changes in the government and national policy impacting foreign investment and operators.
Operations in Suriname are governed by a mineral agreement with the government that establishes the terms and conditions
under which Merian operations and development are conducted. No assurances can be made that the government will not request
changes to the agreement in the future. While the government is generally considered by the Company to be mining friendly, it is
possible that the current or future government may adopt substantially different policies, make changes in taxation treatment or
regulations, take arbitrary action which might halt operations, increase costs, or otherwise impact mining and exploration rights and/or
permits, any of which could have a material and adverse effect on the Company's future cash flows, earnings, results of operations
and/or financial condition.
The government of Suriname previously exercised its option to participate in a fully-funded 25 percent equity ownership stake
in Merian. Suriname manages its participation through Staatsolie Maatschappij Suriname N.V. (“Staatsolie”), a Surinamese
corporation that is wholly owned by the government. The Company can make no assurances that Staatsolie will have sufficient funds
or borrowing ability in order to make their capital commitments in accordance with the terms of the partnership agreement. See the
risk factor under the heading “Future funding requirements may affect our business” later in this section.
Artisanal and illegal miners have been active on, or adjacent to, the Merian mine in recent years. Illegal mining, which involves
trespass into the development or operating area of the mine, is both a security and safety issue, which may present a security threat to
property and human life. See the risk factor under the heading “Civil disturbances, criminal activities, including illegal mining, and
artisanal mining, occurs on or adjacent to certain of our properties, which can disrupt business and expose the Company to liability”
later in this section for addition information.
Our business depends on good relations with our employees.
Production at our mines is dependent upon the efforts of our employees and, consequently, our maintenance of good
relationships with our employees. Due to union activities or other employee actions, we could experience labor disputes, work stops or
other disruptions in production that could adversely affect us. At December 31, 2017, various unions represented approximately 26%
of our employee work force worldwide. Following the expiration of the collective bargaining agreements with the workforce in Ghana
in 2014, annual wage negotiations with the union in connection with the collective bargaining process have required prolonged
negotiation. Negotiations relating to 2016 and 2017 wages concluded in March 2017, and negotiations relating to 2018 wages and
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future years remain ongoing. The labor agreement in Peru will expire in February 2019, and the collective labor agreement in Nevada
will expire in January 2019. A failure to successfully enter into new contracts could result in future labor disputes, work stoppages or
other disruptions in production that could adversely affect our operations and financial performance. Suriname has a history of
collective labor activity. While employees at the Merian mine are not currently unionized, we can provide no assurance that collective
bargaining activity will not occur in the future. Any such unionization could result in similar risks as described above. There can be no
assurance that any future disputes at the Company’s operations or projects will be resolved without disruptions.
Our Company and the mining industry are facing continued geotechnical challenges, which could adversely impact our
production and profitability.
Newmont and the mining industry are facing continued geotechnical challenges due to the older age of certain of our mines and
a trend toward mining deeper pits and more complex deposits. This leads to higher pit walls, more complex underground
environments and increased exposure to geotechnical instability and hydrological impacts. As our operations are maturing, the open
pits at many of our sites are getting deeper and we have experienced certain geotechnical failures at some of our mines, including,
without limitation, at our operations in Australia, Nevada, Ghana, Peru and Colorado. For example, pit failures at the Silverstar pit of
the Carlin operation in 2016 and in the western wall of the open pit of the KCGM operation in 2017 resulted in temporary shutdowns
and have impacted production. See also the risk factor under the heading “Mining companies are increasingly required to consider
and provide benefits to the communities and countries in which they operate, and are subject to extensive environmental, health and
safety laws and regulations” earlier in this section.
No assurances can be given that unanticipated adverse geotechnical and hydrological conditions, such as landslides and pit wall
failures, will not occur in the future or that such events will be detected in advance. Geotechnical instabilities can be difficult to
predict and are often affected by risks and hazards outside of our control, such as severe weather and considerable rainfall, which may
lead to periodic floods, mudslides, wall instability and seismic activity, which may result in slippage of material.
Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government
investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of our
projects to be less profitable than currently anticipated and could result in a material adverse effect on our results of operations and
financial position.
Currency fluctuations may affect our costs.
Currency fluctuations may affect the costs that we incur at our operations. Gold and copper are sold throughout the world based
principally on the U.S. dollar price, but a portion of our operating expenses are incurred in local currencies. The appreciation of those
local currencies against the U.S. dollar increases our costs of production in U.S. dollar terms at mines located outside the United
States.
The foreign currency that primarily impacts our results of operations is the Australian dollar. We estimate that every $0.10
increase in the U.S. dollar/Australian dollar exchange rate increases annually the U.S. dollar Costs applicable to sales by
approximately $81 for each ounce of gold sold from operations in Australia before taking into account the impact of currency hedging.
The annual average Australian dollar exchange rate appreciated by approximately 3% from December 31, 2016 to
December 31, 2017. The annual average Australian dollar exchange rate depreciated by approximately 1% from December 31, 2015
to December 31, 2016. We hedge a portion of our future forecasted Australian dollar denominated operating expenditures to reduce
the variability of our Australian dollar exposure. Due to the limited nature of the Company’s current Australian hedge program, which
extends through February 2018, increases to the Australian dollar/U.S. dollar exchange rate could result in increased costs. The
Company may extend its Australian dollar hedge program in the future.
Our business requires substantial capital investment and we may be unable to raise additional funding on favorable terms.
The construction and operation of potential future projects and various exploration projects will require significant funding. Our
operating cash flow and other sources of funding may become insufficient to meet all of these requirements, depending on the timing
and costs of development of these and other projects. As a result, new sources of capital may be needed to meet the funding
requirements of these investments, fund our ongoing business activities and pay dividends. Our ability to raise and service significant
new sources of capital will be a function of macroeconomic conditions, future gold and copper prices, our operational performance
and our current cash flow and debt position, among other factors. In the event of lower gold and copper prices, unanticipated operating
or financial challenges, or a further dislocation in the financial markets as experienced in recent years, our ability to pursue new
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business opportunities, invest in existing and new projects, fund our ongoing operations, retire or service all of our outstanding debt
and pay dividends could be significantly constrained.
To the extent that we seek to expand our operations and increase our reserves through acquisitions, we may experience issues in
executing acquisitions or integrating acquired operations.
From time to time, we examine opportunities to make selective acquisitions in order to provide increased returns to our
shareholders and to expand our operations and reported reserves and, potentially, generate synergies. The success of any acquisition
would depend on a number of factors, including, but not limited to:
•
Identifying suitable candidates for acquisition and negotiating acceptable terms;
• Obtaining approval from regulatory authorities and potentially Newmont’s shareholders;
• Maintaining our financial and strategic focus and avoiding distraction of management during the process of integrating
the acquired business;
•
Implementing our standards, controls, procedures and policies at the acquired business and addressing any pre-existing
liabilities or claims involving the acquired business; and
• To the extent the acquired operations are in a country in which we have not operated historically, understanding the
regulations and challenges of operating in that new jurisdiction.
There can be no assurance that we will be able to conclude any acquisitions successfully or that any acquisition will achieve the
anticipated synergies or other positive results. Any material problems that we encounter in connection with such an acquisition could
have a material adverse effect on our business, results of operations and financial position.
Our operations may be adversely affected by energy shortages.
Our mining operations and development projects require significant amounts of energy. Our principal energy sources are
electricity, purchased petroleum products, natural gas and coal. Some of our operations are in remote locations requiring long distance
transmission of power, and in some locations we compete with other companies for access to third party power generators or electrical
supply networks. A disruption in the transmission of energy, inadequate energy transmission infrastructure or the termination of any of
our energy supply contracts could interrupt our energy supply and adversely affect our operations.
Continuation of our mining production is dependent on the availability of sufficient water supplies to support our mining
operations.
Our mining operations require significant quantities of water for mining, ore processing and related support facilities. Our
operations in North and South America and Australia are in areas where water is scarce and competition among users for continuing
access to water is significant. Continuous production at our mines is dependent on our ability to maintain our water rights, claims and
contracts and to defeat claims adverse to our current water uses in legal proceedings. Although each of our operations currently has
sufficient water rights, claims and contracts to cover its operational demands, we cannot predict the potential outcome of pending or
future legal proceedings relating to our water rights, claims, contracts and uses. Water shortages may also result from weather or
environmental and climate impacts out of the Company’s control. For example, the continuation of the below average rainfall or the
occurrence of drought in southwest Australia could impact our raw water supply at Boddington. While we incorporated systems to
address the impact of the dry season as part of our operating plans, we can make no assurances that those systems will be sufficient to
address all shortages in water supply, which could result in production and processing interruptions. The loss of some or all water
rights for any of our mines, in whole or in part, or shortages of water to which we have rights could require us to curtail or shut down
mining production and could prevent us from pursuing expansion opportunities. Laws and regulations may be introduced in some
jurisdictions in which we operate which could limit our access to sufficient water resources in our operations, thus adversely affecting
our operations.
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We are dependent upon information technology systems, which are subject to disruption, damage, failure and risks associated with
implementation and integration.
We are dependent upon information technology systems in the conduct of our operations. Our information technology systems
are subject to disruption, damage or failure from a variety of sources, including, without limitation, computer viruses, security
breaches, cyber-attacks, natural disasters and defects in design. Cybersecurity incidents, in particular, are evolving and include, but are
not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead
to disruptions in systems, unauthorized release of confidential or otherwise protected information and the corruption of data. Various
measures have been implemented to manage our risks related to information technology systems and network disruptions. However,
given the unpredictability of the timing, nature and scope of information technology disruptions, we could potentially be subject to
production downtimes, operational delays, the compromising of confidential or otherwise protected information, destruction or
corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from
remedial actions, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or
results of operations.
We could also be adversely affected by system or network disruptions if new or upgraded information technology systems are
defective, not installed properly or not properly integrated into our operations. Various measures have been implemented to manage
our risks related to the system implementation and modification, but system modification failures could have a material adverse effect
on our business, financial position and results of operations and could, if not successfully implemented, adversely impact the
effectiveness of our internal controls over financial reporting.
The occurrence of events for which we are not insured may affect our cash flow and overall profitability.
We maintain insurance policies that mitigate against certain risks related to our operations. This insurance is maintained in
amounts that we believe are reasonable depending upon the circumstances surrounding each identified risk. However, we may elect
not to have insurance for certain risks because of the high premiums associated with insuring those risks or for various other reasons;
in other cases, insurance may not be available for certain risks. Some concern always exists with respect to investments in parts of the
world where civil unrest, war, nationalist movements, political violence or economic crises are possible. These countries may also
pose heightened risks of expropriation of assets, business interruption, increased taxation or unilateral modification of concessions and
contracts. We do not maintain insurance policies against political risk. Occurrence of events for which we are not insured may affect
our results of operations and financial position.
We rely on contractors to conduct a significant portion of our operations and construction projects.
A significant portion of our operations and construction projects are currently conducted in whole or in part by contractors. As a
result, our operations are subject to a number of risks, some of which are outside our control, including:
• Negotiating agreements with contractors on acceptable terms;
• The inability to replace a contractor and its operating equipment in the event that either party terminates the agreement;
• Reduced control over those aspects of operations which are the responsibility of the contractor;
• Failure of a contractor to perform under its agreement;
•
Interruption of operations or increased costs in the event that a contractor ceases its business due to insolvency or other
unforeseen events;
• Failure of a contractor to comply with applicable legal and regulatory requirements, to the extent it is responsible for
such compliance; and
• Problems of a contractor with managing its workforce, labor unrest or other employment issues.
In addition, we may incur liability to third parties as a result of the actions of our contractors. The occurrence of one or more of
these risks could adversely affect our results of operations and financial position.
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We are subject to litigation and may be subject to additional litigation in the future.
We are currently, and may in the future become, subject to litigation, arbitration or other legal proceedings with other parties. If
decided adversely to Newmont, these legal proceedings, or others that could be brought against us in the future, could have a material
adverse effect on our financial position or prospects. For a more detailed discussion of pending litigation, see Note 29 to our
Consolidated Financial Statements.
In the event of a dispute arising at our foreign operations, we may be subject to the exclusive jurisdiction of foreign courts or
arbitral panels, or may not be successful in subjecting foreign persons to the jurisdiction of courts or arbitral panels in the United
States. Our inability to enforce our rights and the enforcement of rights on a prejudicial basis by foreign courts or arbitral panels could
have an adverse effect on our results of operations and financial position.
Title to some of our properties may be defective or challenged.
Although we have conducted title reviews of our properties, title review does not preclude third parties from challenging our
title or related property rights. While we believe that we have satisfactory title to our properties, some titles may be defective or
subject to challenge. For example, at our Conga project in Peru, we continue to seek resolution to a land dispute with local residents.
In addition, certain of our Australian properties could be subject to native title or traditional landowner claims, and our ability to use
these properties is dependent on agreements with traditional owners of the properties. A determination of defective title or restrictions
in connection with a challenge to title rights could impact our ability to develop and operate at certain properties, which could have an
adverse effect on our results of operations and financial position. For more information regarding native title or traditional landowner
claims, see the discussion under the Australia Section of Item 2, Properties, in this report.
Civil disturbances, criminal activities, including illegal mining, and artisanal mining, occurs on or adjacent to certain of our
properties, which can disrupt business and expose the Company to liability.
Civil disturbances and criminal activities such as trespass, illegal mining, sabotage, theft and vandalism may cause disruptions
and could result in the suspension of operations and development at certain sites. Incidents of such activities have occasionally led to
conflict with security personnel and/or police, which in some cases resulted in injuries including in Peru and Suriname. Although
security measures have been implemented by the Company to protect employees, property and assets, such measures will not
guarantee that such incidents will not continue to occur in the future, or result in harm to employees or trespassers, decrease
operational efficiency or construction delays, increase community tensions or result in liabilities. The manner in which the Company’s
personnel, national police or other security forces respond to civil disturbances and criminal activities can give rise to additional risks
where those responses are not conducted in a manner consistent with international and Newmont standards relating to the use of force
and respect for human rights. Newmont takes seriously our obligation to respect and promote human rights, is a signatory to and
active participant in the Voluntary Principles on Security and Human Rights, and has adopted a Sustainability and Stakeholder
Engagement Policy and Human Rights Standard in-line with the UN Guiding Principles on Business and Human Rights due diligence
processes. Nonetheless, although the Company has implemented a number of significant measures and safeguards which are intended
to ensure that personnel understand and uphold these standards, the implementation of these measures will not guarantee that
personnel, national police or other security forces will uphold these standards in every instance. The failure to conduct security
operations in accordance with these standards can result in harm to employees, community members or trespassers, increase
community tensions, reputational harm to Newmont or result in criminal and/or civil liability and/or financial damages or penalties.
Artisanal and illegal miners have been active on, or adjacent to, some of Newmont’s African and South American properties,
including recently at Suriname. Illegal mining, which involves trespass into the development or operating area of the mine, is both a
security and safety issue, which may present a security threat to property and human life. The illegal miners from time to time have
clashed with security staff and law enforcement personnel who have attempted to move them away from the facilities. Although,
under certain circumstances, artisanal mining may be a legally sanctioned activity, artisanal mining is also associated with a number of
negative impacts, including environmental degradation, poor working practices, erosion of civil society, human rights abuse and funding
of conflict. The environmental, social, safety and health impacts of artisanal and illegal mining are frequently attributed to formal mining
activity, and it is often assumed that artisanally-mined gold is channeled through large-scale mining operators, even though artisanal and
large-scale miners may have separate supply chains. These misconceptions impact negatively on the reputation of the industry. The
activities of the illegal miners could cause damage to Newmont’s properties for which Newmont could potentially be held responsible.
The presence of illegal miners could lead to exploration and project delays and disputes regarding the development or operation of
commercial gold deposits. Illegal mining and theft could also result in lost gold production and reserves, mine and development
stoppages, and have a material adverse effect on financial condition or results of operations or project development.
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Competition from other natural resource companies may harm our business.
We compete with other natural resource companies to attract and retain key executives, skilled labor, contractors and other
employees. We also compete with other natural resource companies for specialized equipment, components and supplies, such as drill
rigs, necessary for exploration and development, as well as for rights to mine properties containing gold, copper and other minerals.
We may be unable to continue to attract and retain skilled and experienced employees, to obtain the services of skilled personnel and
contractors or specialized equipment or supplies, or to acquire additional rights to mine properties, which could have an adverse effect
on our competitive position or adversely impact our results of operations.
Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income.
We recognize the expected future tax benefit from deferred tax assets when the tax benefit is considered to be more likely than
not of being realized, otherwise, a valuation allowance is applied against deferred tax assets. Assessing the recoverability of deferred
tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future
taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. To the
extent that future cash flows and taxable income differ significantly from estimates, our ability to realize the deferred tax assets could
be impacted. In the future, our estimates could change requiring a valuation allowance or impairment of our deferred tax assets.
Additionally, future changes in tax laws could limit our ability to obtain the future tax benefits represented by our deferred tax assets.
For example, in late December 2017, the U.S. Tax Cuts and Jobs Act (“the Act”) was enacted into law. While the Company continues
to assess the impacts of the Act, the reduction of the U.S. federal corporate income tax rate from 35% to 21% resulted in an
accounting re-measurement and reduction of deferred tax assets of approximately $346. Further, the Act changed certain international
tax rules, prompting the Company’s decision to restructure its holding of non-U.S. subsidiaries; reducing deferred tax assets by $395.
See Note 10 to the Financial Statements under the heading “Income and Mining Taxes - Valuation of Deferred Tax Assets” and Note
2 under the heading “Summary of Significant Accounting Policies - Valuation of Deferred Tax Assets” for additional information and
factors that could impact the Company’s ability to realize the deferred tax assets. At December 31, 2017, the Company’s non-current
deferred tax assets were $537.
Returns for investments in pension plans are uncertain.
We maintain pension plans for certain employees which provide for specified payments after retirement. The ability of the
pension plans to provide the specified benefits depends on our funding of the plans and returns on investments made by the plans.
Returns, if any, on investments are subject to fluctuations based on investment choices and market conditions. A sustained period of
low returns or losses on investments could require us to fund the pension plans to a greater extent than anticipated. If future plan
investment returns are not sufficient, we may be required to increase the amount of future cash contributions.
Any downgrade in the credit ratings assigned to our debt securities could increase our future borrowing costs and adversely affect
the availability of new financing.
There can be no assurance that any rating currently assigned by Standard & Poor’s Rating Services or Moody’s Investors
Service to Newmont will remain unchanged for any given period of time or that a rating will not be lowered if, in that rating agency’s
judgment, future circumstances relating to the basis of the rating so warrant. If we are unable to maintain our outstanding debt and
financial ratios at levels acceptable to the credit rating agencies, or should our business prospects or financial results deteriorate, our
ratings could be downgraded by the rating agencies. The Company’s credit ratings have been subject to change over the years. We
currently maintain a Standard & Poor’s rating of “BBB” and a Moody’s Investors Service rating of Baa2. We cannot make assurances
regarding how long these ratings will remain unchanged or regarding the outcome of the rating agencies future reviews. A downgrade
by the rating agencies could adversely affect the value of our outstanding securities, our existing debt and our ability to obtain new
financing on favorable terms, if at all, and increase our borrowing costs, which in turn could impair our results of operations and
financial position.
Future funding requirements may affect our business.
Potential future investments, including projects in the Company’s project pipeline, acquisitions and other investments, will
require significant funds for capital expenditures. Depending on gold and copper prices, our operating cash flow may not be sufficient
to meet all of these expenditures, depending on the timing of development of these and other projects. As a result, new sources of
capital may be needed to meet the funding requirements of these investments, fund our ongoing business activities and pay dividends.
Our ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, future gold and
copper prices as well as our operational performance, current cash flow and debt position, among other factors. We may determine
that it may be necessary or preferable to issue additional equity or other securities, defer projects or sell assets. Additional financing
may not be available when needed or, if available, the terms of such financing may not be favorable to us and, if raised by offering
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equity securities, any additional financing may involve substantial dilution to existing shareholders. In the event of lower gold and
copper prices, unanticipated operating or financial challenges, or new funding limitations, our ability to pursue new business
opportunities, invest in existing and new projects, fund our ongoing business activities, retire or service all outstanding debt and pay
dividends could be significantly constrained. In addition, our joint venture partners may not have sufficient funds or borrowing ability
in order to make their capital commitments. In the case that our partners do not make their economic commitments, the Company may
be prevented from pursuing certain development opportunities or may assume additional financial obligations, which may require new
sources of capital.
The price of our common stock may be volatile, which may make it difficult for you to resell the common stock when you want or
at prices you find attractive.
The market price and volume of our common stock may be subject to significant fluctuations due not only to general stock
market conditions but also to a change in sentiment in the market regarding our operations, business prospects or liquidity. Among the
factors that could affect the price of our common stock are:
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changes in gold, and to a lesser extent, copper prices;
operating and financial performance that vary from the expectations of management, securities analysts and investors or
our financial outlook;
developments in our business or in the mining sector generally;
regulatory changes affecting our industry generally or our business and operations;
the operating and stock price performance of companies that investors consider to be comparable to us;
announcements of strategic developments, acquisitions and other material events by us or our competitors;
our ability to integrate and operate the companies and the businesses that we acquire;
response to activism; and
changes in global financial markets and global economies and general market conditions, such as interest or foreign
exchange rates, stock, commodity, credit or asset valuations or volatility.
The stock markets in general have experienced extreme volatility that has at times been unrelated to the operating performance
of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock.
Holders of our common stock may not receive dividends.
Holders of our common stock are entitled to receive only such dividends as our Board of Directors may declare out of funds
legally available for such payments. We are incorporated in Delaware and governed by the Delaware General Corporation Law.
Delaware law allows a corporation to pay dividends only out of surplus, as determined under Delaware law or, if there is no surplus,
out of net profits for the fiscal year in which the dividend was declared and for the preceding fiscal year. Under Delaware law,
however, we cannot pay dividends out of net profits if, after we pay the dividend, our capital would be less than the capital represented
by the outstanding stock of all classes having a preference upon the distribution of assets. Our ability to pay dividends will be subject
to our future earnings, capital requirements and financial condition, as well as our compliance with covenants and financial ratios
related to existing or future indebtedness. Although we have historically declared cash dividends on our common stock, we are not
required to declare cash dividends on our common stock and our Board of Directors may modify the dividend policy or reduce, defer
or eliminate our common stock dividend in the future.
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ITEM 2. PROPERTIES (dollars in millions, except per share, per ounce and per pound amounts)
Production and Development Properties
Newmont’s significant production and development properties are described below. Operating statistics for each region are
presented in a table in the Operating Statistics section. In addition, Newmont holds investment interests in Canada, Colombia and
various other locations.
North America
The North America region maintains its headquarters in Elko, Nevada and operates five sites, Carlin, Phoenix, Twin Creeks,
Long Canyon and Cripple Creek & Victor.
In Colorado and Nevada, various mining specific taxes are paid to state and local governments. These taxes are generally
assessed on gross income from mining in Colorado at a rate of 2.25% or net proceeds from mining in Nevada at a rate of 5%.
Carlin, Nevada, USA. (100% owned) Carlin is located 25 miles west of Elko, Nevada off of Interstate 80 and can be accessed by
paved highway. Newmont has been mining gold at Carlin since 1965 and either owns the private fee land and unpatented mining
claims or controls the land through long-term mining leases associated with the minerals and surface area within the boundaries of the
present operations. Properties held under long-term mining leases expire at varying dates over the next 40 years. With respect to a
portion of the Gold Quarry pit, we pay a royalty equivalent to 16.2% of the mineral production. With respect to various other Carlin
deposits, we pay third-party royalties that vary from 1% to 8% of production.
The Carlin complex consists of four open pits and four underground mines. The open pits include the Emigrant and the Gold
Quarry pits in the South end of the Carlin Trend and the Silverstar and Goldstar pits in the North end of the Carlin Trend. The
underground mines include Leeville, which is a shaft mine, along with Chukar, Pete Bajo and Exodus, which are portal mines. The
majority of the underground ore as well as higher-grade surface refractory ores are processed through the roaster (Mill 6), which
consists of a grinding circuit, roasting circuit and a conventional carbon-in leach circuit. Mill 6 processed approximately 3.6 million
tons of ore in 2017. Higher-grade surface oxide ores are processed by conventional milling and cyanide leaching at Mill 5.
Additionally, Mill 5 operates as a flotation mill treating lower grade, non-carbonaceous, sulfidic refractory ore to produce a
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gold/pyrite concentrate. Mill 5 processed approximately 4.9 million tons of ore in 2017. Lower-grade surface material with suitable
cyanide solubility is treated on one of four heap leach pads. Carlin is a sediment-hosted disseminated gold deposit with an available
mining fleet consisting of six shovels and 55 haul trucks, which range from 150 to 250 tons.
Work has been completed to expand underground airflow at the Leeville mine to allow for increased mining rates and future
mine expansion. Brownfield exploration and development for new reserves is ongoing.
Power is supplied by Wells Rural Electric Company (“WREC”) in the southern section of the property and in the northern
section of the property power is partially supplied by a power plant Newmont built and placed in operations in 2008. Power generated
is sold to NV Energy and then repurchased by the operations.
Carlin’s gross property, plant and mine development at December 31, 2017 was $4,255. Carlin produced 972,000 ounces of
gold in 2017 and reported 14.8 million ounces of gold reserves at December 31, 2017.
Phoenix, Nevada, USA. (100% owned) Phoenix is comprised of the Phoenix operations and the Lone Tree operations. The
Phoenix and Lone Tree properties are owned through fee property and unpatented mining claims.
Phoenix is an open pit operation, located approximately 10 miles south of Battle Mountain, Nevada and can be accessed by
paved highway to a Newmont maintained dirt road. Phoenix was acquired through the Battle Mountain Gold merger and began
operations in 2006.
Phoenix is a skarn-hosted polymetallic massive sulfide replacement deposit. The Phoenix mill produces a gravity gold
concentrate and a copper/gold flotation concentrate and recovers additional gold from cyanide leaching of the flotation tails. The
Phoenix surface mine’s available mining fleet consists of three shovels and sixteen 240-ton haul trucks. Process facilities include a
flotation mill, which processed approximately 11.7 million tons of ore in 2017, a carbon-in-leach plant, a copper leach pad and a
solvent extraction electrowinning (“SX/EW”) plant. The copper leach and SX/EW plant allows for the production of copper cathode.
Brownfield exploration and development for new reserves is ongoing.
Lone Tree is an open pit operation, located approximately 20 miles northwest of Battle Mountain, Nevada and can be accessed
by paved highway. Lone Tree was acquired through the Santa Fe merger and began operations in 1991.
Mining was completed in 2007, with residual leaching and ongoing reclamation activities. Lone Tree’s available mining fleet
consists of four haul trucks, which range from 150 tons to 190 tons, to handle leach material for residual leaching operations. The site
also has an autoclave and flotation mill, which are currently on care and maintenance.
Power is partially supplied by a power plant built by Newmont and placed in operations in 2008. Power generated is sold to NV
Energy and then repurchased by the operations.
The Phoenix operations’ gross property, plant and mine development at December 31, 2017 was $1,289. The Phoenix
operations produced 239,000 ounces of gold and 33 million pounds of copper in 2017. At December 31, 2017, the Phoenix operations
reported 4.1 million ounces of gold reserves and 1,330 million pounds of copper reserves.
Twin Creeks, Nevada, USA. The Twin Creeks property is comprised of the Twin Creeks mine (100% owned) and the Turquoise
Ridge Joint Venture (25% owned).
Twin Creeks is an open pit operation, located approximately 15 miles north of Golconda, Nevada and can be accessed by paved
highway to a dirt road maintained by Newmont. The Twin Creeks mine is an open pit mine that began operations in 1987 and was
acquired through the Santa Fe merger in 1997. The property is owned through fee property and unpatented mining claims.
Twin Creeks is a sediment-hosted disseminated gold deposit. Higher-grade oxide ores are processed by conventional milling
and cyanide leaching at the Juniper mill. Higher-grade refractory ores are processed in the autoclaves and lower-grade material with
suitable cyanide solubility is treated on heap leach pads. Twin Creeks’ available mining fleet consists of three shovels and fourteen
240-ton haul trucks. The process facilities include an autoclave, which processed approximately 3.9 million tons of ore in 2017, an
oxide mill, which processed 805,000 tons of ore in 2017, and three leach pads.
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Brownfield exploration and development for new reserves is ongoing, including the Twin Underground project. This project is
located below and north of the historic Vista Pit within the Twin Creeks footprint. Twin Underground is expected to reach commercial
production in mid-2018.
Power is partially supplied by a power plant Newmont built and placed in operations in 2008. Power generated is sold to NV
Energy and then repurchased by the operations.
Turquoise Ridge is an underground gold mine located in Golconda, Nevada and can be accessed by a paved highway to a dirt
road maintained by Newmont. Turquoise Ridge is a joint venture with a subsidiary of Barrick Gold Corporation (“Barrick”), where
Barrick is the operator. We have a 25% interest in Turquoise Ridge and we report our interest on a pro rata basis. The operation
includes a refractory ore deposit, which utilizes the Twin Creeks autoclave for processing. Additionally, we have an agreement that
expired in December 2017 to provide up to 2,000 tons per day of milling capacity at Twin Creeks to the joint venture. In early 2018,
we entered into a new toll milling agreement with Barrick for processing capacity at Twin Creeks. The new agreement has a term of
seven years and provides milling capacity to Turquoise Ridge of 850,000 tons per year in 2018 and 2019 and 1.2 million tons per year
from 2020 through 2024.
The Twin Creeks operations’ gross property, plant and mine development at December 31, 2017 was $1,524. The Twin Creeks
operation produced 375,000 ounces of gold in 2017 and reported 5.4 million ounces of attributable gold reserves at
December 31, 2017.
Long Canyon, Nevada, USA. (100% owned) Long Canyon is located approximately 75 miles east of Elko, Nevada off of
Interstate 80 and can be accessed by paved highway. Long Canyon was acquired in 2011 through the purchase of Fronteer Gold Inc.
The property is owned through fee property and unpatented mining claims. Commercial production at Long Canyon was achieved in
November 2016.
Long Canyon is a sediment-hosted disseminated gold deposit. Oxide ore with suitable cyanide solubility is treated on a heap
leach pad. The Long Canyon available mining fleet consists of two shovels and twelve 240-ton haul trucks. Gold recovered from the
leach pad is transferred as gold-bearing carbon to Carlin for refining and shipment.
Brownfield exploration and development for new reserves is ongoing.
Power is supplied by WREC.
Long Canyon’s gross property, plant and mine development at December 31, 2017 was $1,165. The Long Canyon operation
produced 174,000 ounces of gold in 2017 and reported 1.1 million ounces of gold reserves at December 31, 2017.
Cripple Creek & Victor, Colorado, USA. (100% owned) Cripple Creek &Victor (“CC&V”) is an open pit operation, located
next to the town of Victor, Colorado and can be accessed by paved highway. In August 2015, Newmont acquired CC&V through a
purchase from AngloGold Ashanti Limited. The vast majority of the property is controlled through fee patented mining claims as well
as long-term mining leases. Properties held under long-term mining leases expire at varying dates over the next 20 years. Royalties on
various sections of the deposit vary up to 5% of production.
CC&V is an epithermal alkalic deposit with heap leaching and milling processing facilities located on site. Heap leaching is
used to process lower-grade ore, while the mill is used to process higher-grade ore. CC&V’s available mining fleet consists of three
shovels and twenty-two 240-ton haul trucks. The process facilities include a mill, which processed 1.5 million tons of ore in 2017, and
two valley leach facilities.
Brownfield exploration and development for new reserves is ongoing.
Power is supplied by Black Hills Energy.
CC&V’s gross property, plant and mine development at December 31, 2017 was $806. CC&V produced 451,000 ounces of gold
in 2017 and reported 3.5 million ounces of gold reserves at December 31, 2017.
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South America
The South America region maintains its headquarters in Lima, Peru and operates two sites, Yanacocha and Merian.
Yanacocha, Peru. (54.05% owned) Yanacocha is owned by Minera Yanacocha S.R.L. (“Yanacocha” or “MYSRL”), which is
54.05% owned by Newmont. The remaining 45.95% interest in MYSRL is held by Compañia de Minas Buenaventura, S.A.A.
(“Buenaventura”). In December 2017, MYSRL repurchased 5% of its shares held by the International Finance Corporation, increasing
Newmont’s ownership in Yanacocha from 51.35% to 54.05%. For further information about this transaction, see Note 12 to our
Consolidated Financial Statements.
MYSRL and S.M.R.L. Chaupiloma Dos de Cajamarca (“Chaupiloma”) (a related third party) have mining concessions granted
by Peru’s Geological, Mining and Metallurgical Institute. Mining concessions grant MYSRL an exclusive and irrevocable right to
carry out exploration and exploitation activities within a specified area. In order to maintain these concessions, MYSRL must (i)
obtain the appropriate permits and rights over the surface lands, (ii) pay annual license fees and (iii) comply with a minimum annual
production obligation. For mining concessions granted prior to 2008, concessions will expire if the production obligations are not met
by the end of 2028. For mining concessions granted in 2008 or thereafter, concessions will expire if minimum production is not
attained by the 20th year from the date of grant.
In Peru, a revised royalty and special mining tax was introduced in October 2011. This tax is dependent on whether or not a
stabilization agreement is in effect and is based on a sliding scale, between 1% and 12%. A stabilization agreement is currently in
effect through December 2018 for operations in the La Quinua Complex.
Yanacocha is located approximately 375 miles (604 kilometers) north of Lima and 30 miles (48 kilometers) north of the city of
Cajamarca and is primarily accessible by paved roads. The Yanacocha property began production in 1993 and consists of the
following open pit mines: the La Quinua Complex, the Yanacocha Complex, the Carachugo Complex and Maqui Maqui. In addition,
Yanacocha has four leach pads (La Quinua, Yanacocha, Carachugo and Maqui Maqui), three gold processing plants (Pampa Larga,
Yanacocha Norte and La Quinua), one limestone processing facility (China Linda) and one mill (Yanacocha Gold Mill).
Yanacocha’s mining activities encompass 260,212 acres (105,304 hectares) that are covered by 182 mining concessions.
MYSRL holds the mining rights related to 95,719 acres (38,736 hectares), covered by 71 concessions. Chaupiloma holds the mining
rights to the remaining acres and concessions and has assigned these mining concessions to Yanacocha. Each concession has an initial
term of 17 to 20 years, which are renewable at Yanacocha’s request for an additional 17 to 20 year term.
The La Quinua Complex is currently mining material from the La Quinua Sur and the Tapado Oeste Layback and is scheduled
to finish mining operations in 2019.
The Yanacocha Complex mines material from the Yanacocha Layback and Yanacocha Pinos. The Yanacocha Complex is
scheduled to finish mining operations in 2019. The Yanacocha Complex began operations in 1997 and has had limited mining
operations in recent years.
The Carachugo Complex and Maqui Maqui mined material from multiple mines that are no longer in operation and only de
minimis residual leaching of gold continues.
Yanacocha has three processing concessions from Peru’s Ministry of Energy and Mines for its processing facilities: Cerro
Yanacocha (La Quinua and Yanacocha leach pads, La Quinua and Yanacocha Norte gold recovery plants and Yanacocha Gold Mill),
Yanacocha (Carachugo and Maqui Maqui leach pads and Pampa Larga gold recovery plant) and China Linda. Yanacocha’s gold
processing plants are located adjacent to the solution storage ponds and are used to process gold-bearing solutions from Yanacocha’s
leach pads through a network of solution-pumping facilities. The Yanacocha Gold Mill processes high-grade gold ore to produce a
gold-bearing solution for treatment at the La Quinua processing plant. The Yanacocha Gold Mill processes between 5.5 and 6.0
million tonnes per year.
Yanacocha is an epithermal type deposit of high sulfidation hosted in volcanic rock formations. Gold is associated with iron-
oxides and pyrite. Material is evaluated for gold grade and cyanide solubility and then placed on leach pads or in stockpiles for
processing through the Yanacocha Gold Mill accordingly. Studies are underway to evaluate the potential for mining sulfide gold and
copper mineralization. Yanacocha’s available mining fleet consists of two shovels, four excavators, two loaders and 43 haul trucks,
which range from 140 to 240 tonnes.
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Brownfield exploration and development for new reserves is ongoing, including the development of Quecher Main within the
existing footprint of Yanacocha. This oxide deposit will extend the life of the Yanacocha operation to 2027, with an average of
approximately 200,000 ounces between 2020 and 2025. Quecher Main received full funding approval from the Board of Directors in
October 2017 and is expected to reach commercial production in the fourth quarter of 2019.
Power is supplied to the operation by Engie Energia Peru SA.
Yanacocha’s gross property, plant and mine development at December 31, 2017 was $4,282. Yanacocha produced 535,000
ounces of gold (275,000 attributable ounces of gold) in 2017 and reported 2.1 million attributable ounces of gold reserves at
December 31, 2017.
MYSRL also owns the Conga project, which is located approximately 16 miles (25 kilometers) northeast of Yanacocha and is
currently in care and maintenance. Due to uncertainty surrounding the project and political risks related to the project’s development,
the Company has allocated its exploration and development capital to other projects in recent years. Should the Company be unable to
develop the Conga project, the Company may have to consider other alternatives for the project, which may result in a future
impairment charge for the project. See Item 1A, Risk Factors, above for further information.
Merian, Suriname. (75% owned) The Merian gold mine (“Merian”) is owned 75% by Newmont Suriname, LLC (“Newmont
Suriname”) (formerly known as Suriname Gold Company LLC and 100% indirectly owned by Newmont Mining corporation) and
25% by Staatsolie (a company wholly owned by the Republic of Suriname).
Merian is located in Suriname, approximately 40 miles (66 kilometers) south of the town of Moengo and 19 miles (30
kilometers) north of the Nassau Mountains, close to the French Guiana border. The site is accessible by paved road from Paramaribo
to Moengo and a dirt road maintained mainly by the Company.
Newmont’s interest in the Merian mine was acquired through a Right of Exploitation as defined in a Mineral Agreement. The
Right of Exploitation was registered in November 2014, spans a period of 25 years and covers an area of 41,484 acres (16,788
hectares). Newmont Suriname is subject to a 6% net smelter return royalty to the Republic of Suriname payable in gold bullion or cash
distributions at the election of the government.
The operation currently includes the Merian 2 open pit and is scheduled to include a second pit (the Maraba pit). Construction
for Merian 2 began in August 2014 and commercial production began in October 2016. The Maraba pit is scheduled to be added to the
production stream during the first quarter of 2018. All of the gold mineralization at Merian is closely associated with quartz veining
within siltstone and sandstone formations. Merian’s available mining fleet consists of six mining excavators and thirty-one 138-tonne
haul trucks.
Merian includes processing facilities that utilize a conventional gold mill and processing plant, consisting of comminution plant,
including gravity and cyanide leach processes, with recovery by carbon-in-leach, elution, electro-winning and induction furnace
smelting to produce a gold doré product. It has a nameplate capacity of 12 million tonnes per year, reducing later to 10 million tonnes
per year when the mill feed will be predominantly from fresh rock. Maintenance facilities, camp facilities with a capacity of 1,650
workers and various offices complete the site.
Brownfield exploration and development for new reserves is ongoing.
Power for the property is self-generated using on-site heavy fuel oil driven generators.
Merian’s gross property, plant and mine development at December 31, 2017 was $974. Merian produced 513,000 ounces of
gold (385,000 attributable ounces of gold) in 2017 and reported 4.0 million attributable ounces of gold reserves at December 31, 2017.
Australia
The Australia region maintains its headquarters in Perth, Australia and operates three sites, Boddington, Tanami and Kalgoorlie.
Aboriginal land rights in Australia, which recognize the traditional rights and customs of Aboriginal people, are governed by the
Commonwealth Native Title Act and certain other Acts specific to individual states and territories. The Commonwealth Native Title
Act was enacted in 1993 following a decision in the High Court of Australia, which held that Aboriginal people, who have maintained
a continuing connection with their land according to their traditional laws and customs, may hold certain rights which should be
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recognized under Australian common law. In the Northern Territory, where the Tanami operation is located, the Aboriginal Land
Rights Act (“ALRA”) was introduced in 1976, which established an Aboriginal Land rights regime. Under the ALRA, approximately
50% of the land in the Northern Territory is Aboriginal freehold land.
All of Newmont’s operations in Australia take place on land that falls under the custodianship of Aboriginal people. Newmont
does not consider that native title claims or determined areas where rights have been established are an impediment to the operation of
existing mines. Newmont has existing agreements with the traditional owners of the land utilized by our Tanami and Boddington
operations. In Western Australia, a native title claim was registered in 2017 over an area of land utilized by our Kalgoorlie operations.
Upon registration of the claim, any granted and existing mining tenements remain valid. However, the undertaking of future heritage
surveys will be required to take place with the assistance of the claimants. A determination of native title is likely to take many years
and, if successful, could give rights to a native title compensation claim in the future. Throughout Australia, new exploratory and
mining tenements may require native title agreements to be entered into and will be subject to a negotiation process, which often gives
rise to compensation payments and heritage survey protocols.
In Australia, various ad valorem royalties and taxes are paid to state and territorial governments, typically based on a percentage
of gross revenues or earnings. Aboriginal groups have negotiated compensation/royalty payments as a condition to granting access to
areas where native title rights are determined or where they own the land.
Boddington, Australia. (100% owned) Boddington is located 81 miles (130 kilometers) southeast of Perth in Western Australia
and is accessible primarily by paved road. Boddington has been wholly owned since June 2009 when Newmont acquired the final
33.33% interest from AngloGold Ashanti Australia Limited.
The Boddington project area comprises 46,697 acres (18,898 hectares) of mining tenure leased from the State of Western
Australia, of which 21,018 acres (8,506 hectares) is subleased from the South 32 Worsley Joint Venturers. Royalties are paid to the
state government at 2.5% for gold and 5% for copper based on revenue. Shipping and treatment and refining costs are allowable
deductions from revenue for royalty calculations for copper. There is an additional profit based royalty payable to AngloGold Ashanti.
This royalty is capped at $100 (of which approximately $93 has been paid out). The remaining royalty of approximately $7 is payable
quarterly and is equal to 50% of the amount by which the average margin for the quarter exceeds $600 per ounce (on a by-product
basis) multiplied by 33.3% of gold ounces sold in that quarter. Newmont owns 74,474 acres (30,139 hectares) of rural freehold
property, some of which overlaps existing mining tenure.
Boddington consists of greenstone diorite hosted mineralization and activities continue to develop the known reserve. The mine
operates two pits (North & South Pits) utilizing three electric rope shovels as its prime ex-pit material movers with a fleet of 40
production haul trucks and a fleet of ancillary equipment as required. Boddington has a current capacity to mine approximately
235,000 tonnes of material per day. The milling plant includes a three-stage crushing facility (two primary crushers, six secondary
crushers and four high-pressure grinding rolls), four ball mills, a flotation circuit and a carbon-in-leach circuit. The flotation circuit
process recovers gold-copper concentrate before the material is then processed by a traditional carbon-in-leach circuit where the
remaining gold is recovered to produce doré.
Mining operations consist of two open pit operations located adjacent to each other. The processing plant has a nominal capacity
to process approximately 39 million tonnes of ore per year. Other major facilities include an emulsion plant, residue disposal area
(tailings facility), maintenance workshops and a 2,300-room accommodation camp. Additionally, 31 residential properties are owned
in Boddington as employee housing.
Power for the operation is sourced through the local power grid under a long-term power purchase agreement.
Boddington’s gross property, plant and mine development at December 31, 2017 was $4,083. Boddington produced 787,000
ounces of gold and 80 million pounds of copper in 2017. At December 31, 2017, Boddington reported 12.7 million ounces of gold
reserves and 1,340 million pounds of copper reserves.
Tanami, Australia. (100% owned) Tanami is located in the Northern Territory approximately 342 miles (550 kilometers)
northwest of Alice Springs. The underground mining infrastructure and operation is located at Dead Bullock Soak. The processing
infrastructure is located 25 miles (40 kilometers) to the east of the mining operations at the Granites. Ore is transported by road train to
the processing plant. Supply of materials for the operations is done primarily by road, while the workforce for Tanami utilizes a fly-
in/fly-out program. Gold was first discovered and mined in the area around 1900. Mining Tenements were granted in 1983 and have
continued to this date. Newmont acquired its ownership in the mine in 2002, as a result of the merger with Normandy Mining Limited
(“Normandy”).
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The Newmont Tanami Operations has an area of 843,420 acres (341,320 hectares) of exploration licenses and 11,017 acres
(4,458 hectares) of mineral leases granted per the Northern Territory Mineral Titles Act. The operation has been granted authorization
as per the Northern Territory Mining Management Act to undertake mining activities on these mineral leases. For the exploration
licenses, Tanami is required to make an annual administration payment to the Central Land Council for each of the Deeds for
Exploration, equivalent to 5% of the audited exploration costs incurred in the relevant year minus a minimum payment made in the
first quarter of each year.
According to the Northern Territory Mineral Royalties Act, Newmont is obligated to pay a profit based royalty of 20% to the
Northern Territory government. The operation is located on Aboriginal Freehold Land granted under the Northern Territory
Aboriginal Land Rights Act which requires Newmont to hold a mining agreement with the traditional owners on which the operation
is located. The Mining Agreement is managed by the Central Land Council as per the statutory requirements of the Aboriginal Land
Rights Act. This agreement also provides for compensation payments to the traditional owners.
Mining operations are predominantly focused on the Callie and Auron ore bodies in the underground mine at Dead Bullock
Soak. Tanami consists of sediment hosted sheeted quartz vein mineralization. Exploration is ongoing with the main focus being
underground ore definition drilling of the Auron ore body and drilling of the Federation ore body. In the fourth quarter of 2016, the
Company declared first reserves for the Federation ore body.
Tanami, as an underground mining operation, has a fleet of eight underground loaders and 18 haul trucks, each with a 60 tonne
payload. The processing plant was originally commissioned in 1986. The processing plant currently consists of a crushing plant, a
grinding circuit, gravity carbon in pulp tanks and a conventional tailings disposal facility. The Board of Directors approved full
funding of the Tanami Expansion project in October 2015, which reached commercial production at the end of August 2017. The
scope for this project included a ventilation upgrade, additional mining equipment, additional mine access and increased process plant
capacity and recovery.
Brownfield exploration and development for new reserves in ongoing.
Power for the operations is exclusively sourced from diesel generators which are owned and operated by Pacific Energy Pty
(KPS) Ltd. In December 2017, the Board of Directors approved the full funding of the Tanami Power project. Beginning in 2019, the
Tanami Power project will lower power costs, mitigate fuel supply risk and reduce carbon emissions.
Tanami’s gross property, plant and mine development at December 31, 2017 was $1,357. Tanami produced 419,000 ounces of
gold in 2017 and reported 4.4 million ounces of gold reserves at December 31, 2017.
Kalgoorlie, Australia. (50% owned) Kalgoorlie is located 373 miles (600 kilometers) east of Perth in Western Australia and is
accessible primarily by paved road. Kalgoorlie is a joint venture with Barrick and Newmont is the operator. We report our interest in
Kalgoorlie on a pro rata basis.
Kalgoorlie comprises the Fimiston open pit (commonly referred to as the Super Pit) and the Mt Charlotte underground mine.
The processing plant includes the Fimiston processing plant on site at the edge of the city of Kalgoorlie and the Gidji processing plant,
located approximately 20 kilometers north of the Fimiston processing plant in the city of Boulder. The Fimiston processing plant is
licensed to process approximately 13.4 million tonnes of ore per year. Gold was first discovered in the area in 1893. In 1989,
Kalgoorlie Consolidated Gold Mine Pty Ltd (“KCGM”) was formed to manage the assets and operations of the joint venture partners.
Newmont acquired its ownership in the mine in 2002 as part of the merger with Normandy.
Kalgoorlie consists of greenstone dolerite hosted mineralization. The Kalgoorlie operation encompasses approximately 84,658
acres (34,261 hectares), comprising 63,434 acres (25,671 hectares) of mining leases and other general purpose leases, 14,940 acres
(6,046 hectares) of exploration and prospecting licenses and 6,283 acres (2,543 hectares) of miscellaneous licenses held for easements
and rights-of-way. The Kalgoorlie operation is obligated to pay a 2.5% royalty on production to the Western Australia state
government. Mining and processing operations and facilities are located on properties held under leases which expire at varying dates
over the next 21 years. All core mining leases contain options to renew.
The Fimiston plant processes ore from the Super Pit and underground ore from the Mt Charlotte mine. Both ores are processed
via two milling circuits which consist of two semi-autogenous grinding (“SAG”) mills and associated ball mills which are capable of
treating up to 40,000 tonnes per day. After crushing and milling, the ores are processed via gravity and undergo bulk sulfide flotation
to produce a gold-bearing sulfide flotation concentrate, which is subsequently leached after ultra-fine grinding at Fimiston, or is
35
filtered and moved to the Gidji ultra-fine grinding processing plant. The flotation tailings are also leached at Fimiston by two carbon
in pulp leaching circuits. Loaded carbon from both Fimiston and Gidji is treated at the centralized Fimiston elution (stripping) and
electrowinning facility. The gold-bearing deposits from the electrowinning circuits are removed periodically from the cathodes and
smelted to produce doré gold bars. Excess concentrate, which is unable to be treated on site, is sold to overseas smelters for
processing. Concentrate is treated at Gidji through 35-tonne-per-hour (tph) and 10 tph ultra-fine grinding mills and at Fimiston
through a 13 tph ultra-fine grinding mill. The open pit operations utilize a fleet of four shovels, one loader, 40 haul trucks, as well as
other ancillary equipment. The Mt Charlotte underground mine utilizes underground loaders, a combination of 50 and 60 tonne trucks
and drills to enable ore extraction.
Brownfield exploration and development for new reserves is ongoing at both the Mt Charlotte underground operation and the
Fimiston open pit operation.
Power for the operations is supplied through Newmont Power Pty Ltd (a wholly-owned Newmont entity). Newmont Power Pty
Ltd sources the power through a combination of purchase from the gas fired power plant in which Newmont holds a 50% interest and
through purchase from the local power grid.
Kalgoorlie’s gross property, plant and mine development at December 31, 2017 was $433. Kalgoorlie produced 367,000
attributable ounces of gold in 2017 and reported 3.9 million attributable ounces of gold reserves at December 31, 2017.
Africa
The Africa region maintains its headquarters in Accra, Ghana and operates two sites, Ahafo and Akyem.
In December 2003, Ghana’s Parliament unanimously ratified an Investment Agreement (“IA”) between Newmont and the
government of Ghana. The IA established a fixed fiscal and legal regime, including fixed royalty and tax rates, for the life of any
Newmont project in Ghana. In December 2015, Ghana’s Parliament ratified the Revised Investment Agreements (“Ghana Investment
Agreements” or “Revised IAs”). Currently, the maximum corporate income tax remains at 32.5% and royalties are paid on a sliding
scale system that is based on monthly gold prices. The rates range from 3% to 5% of revenues (plus an additional 0.6% for any
production from forest reserve areas). The government of Ghana is also entitled to receive 10% of a project’s net cash flow after
reaching specific production milestones by receiving 1/9th of the total amount paid as dividends to Newmont shareholders. When the
average quoted gold price exceeds $1,300 per ounce within a calendar year, an advance payment on these amounts of 0.6% of total
revenues is required. The Ghana Investment Agreement also contains commitments with respect to job training for local Ghanaians,
community development, purchasing of local goods and services and environmental protection.
The Ghana Investment Agreements also include a change in tax stabilization from life of mine to 15 years from commercial
production for each mine. In October 2017, the government of Ghana approved Newmont’s request to extend the stability period of
the Revised IA at the Ahafo operations for five years to December 31, 2025. The extension was approved based on Newmont’s
commitment to invest at least $300 for the Subika Underground and Ahafo Mill Expansion projects.
See Item 1A, Risk Factors for a description of risks inherent in contracts with governments.
The Ahafo and Akyem mines operate using electrical power generated by the Volta River Authority along with supplemental
power generation capacity built by Newmont.
Ahafo, Ghana. (100% owned) Ahafo is located near Kenyasi in the Brong Ahafo Region of Ghana, approximately 180 miles
(290 kilometers) northwest of the national capital city of Accra, and is accessible by paved roads. In 2002, Newmont acquired 50% of
Ahafo as a result of the merger with Normandy. In 2003, Newmont purchased the remaining interest from Moydow Mines
International Inc. (“Moydow”), thereby making it a wholly owned subsidiary. The Ahafo mine commenced commercial production in
2006 and currently operates a mill and three pits.
The Ahafo operations cover an area of approximately 137,000 acres (55,000 hectares) for the mining lease concession with
current mine take area of approximately 18,700 acres (7,600 hectares) that has been fully compensated and approximately 6,500 acres
(2,600 hectares) of mining area that has not been fully compensated (i.e. payment would be necessary to move people from their land).
Ahafo pays a royalty of 2% on net smelter returns to Franco-Nevada for all gold ounces recovered from areas previously owned by
Moydow and a sliding scale royalty based on the monthly gold price up to 5% on gold production to the government of Ghana.
36
The Ahafo mine is composed of three orogenic gold deposits that have oxide and primary mineralization. Gold occurs primarily
in pyrite and secondarily as native gold in quartz veins. Ahafo has three open pits (Subika, Awonsu and Amoma), with current mining
from the Awonsu and Subika pits. Subika will move to a four stage pit in 2018, whereas Awonsu is progressing towards future
laybacks. Amoma ceased mining operations in May 2017. The available mining fleet consists of three shovels and thirty-eight 141-
tonne haul trucks. The daily production rate is approximately 95,000 tonnes. The processing plant was commissioned in 2006 to
process 7.5 million tonnes of primary and oxide ore per year. With the depletion of oxide ore, the current plant throughput has
decreased to 6.5 million tonnes per year. The processing plant consists of a crushing plant, a grinding circuit, carbon in leach tanks,
elution circuit, counter current decantation circuit and a tailings disposal facility.
Ongoing development projects include Subika Underground and the Ahafo Mill Expansion. The Subika Underground project
achieved first production in June 2017, with commercial production expected in the second half of 2018. The Ahafo Mill Expansion
will expand the existing plant by approximately 3.5 million tonnes per year through the installation of a new crusher, a single stage
SAG mill and two leach tanks. The Ahafo Mill Expansion is expected to reach first production in the first half of 2019, with
commercial production expected in the second half of 2019. The expansions will maximize synergies between the Ahafo Mill
expansion and Subika underground project at Ahafo.
Ahafo’s gross property, plant and mine development at December 31, 2017 was $1,999. Ahafo produced 349,000 ounces of
gold in 2017 and reported 9.9 million ounces of gold reserves at December 31, 2017.
Akyem, Ghana. (100% owned) Akyem is located in Birim North District of the Eastern Region of Ghana, approximately 80
miles (125 kilometers) northwest of the national capital city of Accra, and is accessible by paved roads. In 2002, Newmont acquired
85% of Akyem as a result of the merger with Normandy. In 2006, Newmont acquired the remaining 15% from Kenbert Mines Ltd.
The Akyem operations are comprised of one mill and one open pit mine, and commenced commercial production in October 2013.
The Akyem operations have an area of approximately 15,500 acres (6,000 hectares) for the mining lease concession. The
Akyem mine operates on two mining leases between the Government of Ghana and Newmont Golden Ridge Limited. The leases grant
the exclusive rights to work, develop and produce gold in the lease area for a term of fifteen years, including the processing, storing
and transportation of ore and materials. The leases require Akyem to respect or perform certain financial and statutory reporting
obligations. Akyem pays a sliding scale royalty to the government based on the monthly gold price up to 5% on gold production.
The Akyem mine is an orogenic gold deposit that has oxide and primary mineralization. The deposit is localized in the Akyem
fault zone and gold mineralization is controlled by a series of brittle fracture zones located within the fault zone. The Akyem mine is
an open pit mine consisting of a large main pit and a smaller east pit, connected near the surface. The planned pit covers an area of
approximately 345 acres (139 hectares). The available mining fleet consists of two shovels, two excavators and nineteen 136-tonne
haul trucks. The daily production rate is approximately 91,000 tonnes. The Akyem processing plant was commissioned in 2013 to
treat an average of 8.5 million tonnes of ore annually. The processing plant consists of a crushing plant, a SAG and ball milling
circuit, carbon-in-leach, elution and bullion smelting facilities and a tailings storage facility.
Exploration efforts at Akyem are focused on defining the extension of the known mineralization below the planned pit shell as
well as investigating the underground potential of the deposit.
Akyem’s gross property, plant and mine development at December 31, 2017 was $1,346. Akyem produced 473,000 ounces of
gold in 2017 and reported 2.8 million ounces of gold reserves at December 31, 2017.
37
Operating Statistics
The following tables detail operating statistics related to gold production, ounces sold and production costs per ounce of our
continuing operations:
Years Ended December 31,
Tons mined (000 dry short tons):
2017
North America
2016
2015
2017
South America
2016
2015
Open pit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underground . . . . . . . . . . . . . . . . . . . . . . . . . .
252,086
2,979
218,411
2,864
193,387
2,652
104,763
—
104,713
—
Tons processed (000 dry short tons):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25,406
55,289
25,941
45,109
24,272
28,859
20,690
24,082
9,006
30,639
80,627
—
6,683
36,645
All-in sustaining costs per ounce sold (2) . . . . . . . $
895
Average ore grade (oz/ton):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average mill recovery rate . . . . . . . . . . . . . . . .
Ounces produced (000):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . .
Attributable . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated ounces sold (000) . . . . . . . . . . . . . .
Production costs per ounce sold: (1)
Direct mining and production costs . . . . . . . . $
By-product credits . . . . . . . . . . . . . . . . . . . . . .
Royalties and production taxes . . . . . . . . . . . .
Write-downs and inventory change. . . . . . . . . .
Costs applicable to sales . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . .
Total production costs . . . . . . . . . . . . . . . . . $
Years Ended December 31,
Tons mined (000 dry short tons):
Open pit . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underground . . . . . . . . . . . . . . . . . . . . . . . . . .
Tons milled (000 dry short tons) . . . . . . . . . . . .
Average ore grade (oz/ton) . . . . . . . . . . . . . . . .
Average mill recovery rate . . . . . . . . . . . . . . . .
Ounces produced (000):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated ounces sold (000) . . . . . . . . . . . . . .
Production costs per ounce sold: (1)
Direct mining and production costs . . . . . . . . $
By-product credits . . . . . . . . . . . . . . . . . . . . . .
Royalties and production taxes . . . . . . . . . . . .
Write-downs and inventory change. . . . . . . . . .
Costs applicable to sales . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . .
Total production costs . . . . . . . . . . . . . . . . . $
All-in sustaining costs per ounce sold (2) . . . . . . . $
823
0.077
0.020
76.9 %
0.074
0.019
78.5 %
0.070
0.016
81.0 %
0.043
0.013
87.2 %
0.063
0.012
79.4 %
0.095
0.016
80.2 %
1,485
726
2,211
2,211
2,177
712
(9)
10
(3)
710
244
6
960
1,501
523
2,024
2,024
2,017
1,374
269
1,643
1,643
1,640
752
296
1,048
660
1,046
$
$
$
723
(11)
15
(25)
702
207
6
915
869
$
$
$
781
(9)
17
(31)
758
189
6
953
979
$
$
$
639
(17)
54
33
709
229
47
985
959
$
$
$
434
325
759
414
736
737
(11)
38
(5)
759
408
42
1,209
1,052
$
$
$
2017
114,371
3,144
52,802
0.035
86.1 %
Australia
2016
2015
2017
Africa
2016
126,619
3,279
51,606
0.037
86.4 %
127,071
3,445
50,546
0.039
86.4 %
74,580
279
16,884
0.053
92.3 %
75,048
—
17,289
0.052
91.1 %
1,573
1,573
1,558
673
(8)
32
(25)
672
132
7
811
1,641
1,641
1,624
605
(7)
32
—
630
135
7
772
786
$
$
$
1,665
1,665
1,684
620
(9)
30
26
667
146
8
821
818
$
$
$
$
$
$
822
822
824
573
(2)
51
33
655
276
10
941
823
$
$
$
819
819
822
553
(2)
50
65
666
270
8
944
833
$
$
$
38
512
406
918
471
924
558
(8)
28
29
607
361
31
999
949
2015
75,919
—
15,307
0.056
90.3 %
805
805
804
559
(2)
44
(79)
522
186
9
717
718
Years Ended December 31,
Tons mined (000 dry short tons):
2017
Total Gold
2016
Open pit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
545,800
6,402
524,791
6,143
Tons processed (000 dry short tons):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
115,782
79,371
103,842
75,748
2015
477,004
6,097
96,808
65,504
Average ore grade (oz/ton):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average mill recovery rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ounces produced (000):
Mill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attributable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated ounces sold (000) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production costs per ounce sold: (1)
Direct mining and production costs . . . . . . . . . . . . . . . . . . . . . . $
By-product credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalties and production taxes . . . . . . . . . . . . . . . . . . . . . . . . .
Write-downs and inventory change . . . . . . . . . . . . . . . . . . . . . . .
Costs applicable to sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total production costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.048
0.018
84.0 %
0.051
0.016
83.6 %
0.053
0.016
84.5 %
4,632
1,022
5,654
5,266
5,605
667
(9)
30
3
691
216
15
922
4,395
848
5,243
4,898
5,199
661
(8)
29
—
682
225
12
919
912
$
$
$
4,356
675
5,031
4,584
5,052
652
(8)
28
(9)
663
209
12
884
933
$
$
$
All-in sustaining costs per ounce sold (2) . . . . . . . . . . . . . . . . . . . . $
924
The following table details operating statistics related to copper production, pounds sold and production costs per pound.
Years Ended December 31,
Tons milled (000 dry short tons) . . . . . . . . . . . . . . . . . . . . . . . . . .
Average milled grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average mill recovery rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tons leached (000 dry short tons) . . . . . . . . . . . . . . . . . . . . . . . . . .
Average leached grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated pounds produced (millions) . . . . . . . . . . . . . . . . . . .
Consolidated tonnes produced (thousands) . . . . . . . . . . . . . . . . . .
Consolidated pounds sold (millions) . . . . . . . . . . . . . . . . . . . . . . . .
2017
11,692
North America
2016
12,057
2015
11,021
2017
42,994
Australia
2016
41,813
0.10 %
70.9 %
5,728
0.13 %
70.5 %
7,725
0.14 %
72.9 %
7,252
0.26 %
33
15
32
0.21 %
42
19
40
0.18 %
46
21
47
0.13 %
78.9 %
—
—
80
36
79
0.13 %
79.4 %
—
—
77
35
76
2015
41,029
0.13 %
78.5 %
—
—
79
36
82
Production costs per pound sold: (1)
Costs applicable to sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total production costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
1.73
0.46
0.04
2.23
$
$
2.48
0.66
0.04
3.18
$
$
1.97
0.45
0.05
2.47
$
$
1.37
0.27
0.02
1.66
$
$
1.67
0.32
0.02
2.01
$
$
1.71
0.31
0.02
2.04
All-in sustaining costs per pound sold (2) . . . . . . . . . . . . . . . . . . . . . $
2.09
$
2.88
$
2.30
$
1.69
$
2.00
$
2.06
39
Years Ended December 31,
Tons milled (000 dry short tons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average milled grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average mill recovery rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tons leached (000 dry short tons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average leached grade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated pounds produced (millions) . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated tonnes produced (thousands) . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated pounds sold (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017
54,686
Total Copper
2016
53,870
0.12 %
77.5 %
5,728
0.26 %
113
51
111
0.13 %
77.4 %
7,725
0.21 %
119
54
116
2015
52,050
0.13 %
77.3 %
7,252
0.18 %
125
57
129
Production costs per pound sold: (1)
Costs applicable to sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total production costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
1.47
0.33
0.02
1.82
$
$
1.95
0.44
0.03
2.42
$
$
1.80
0.36
0.03
2.19
All-in sustaining costs per pound sold (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.80
$
2.30
$
2.15
(1) Production costs do not include items that are included in sustaining costs such as General and administrative; Exploration; Advanced projects,
research and development; Other expense, net and Sustaining capital.
(2) All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 74.
Proven and Probable Reserves
We had attributable proven and probable gold reserves of 68.5 million ounces at December 31, 2017. For 2017 and 2016,
reserves were calculated at a gold price assumption of $1,200 or A$1,600 per ounce. Our 2017 reserves would increase by 7% (5
million ounces), or decline by 8% (5 million ounces), if calculated at a $1,300 and $1,100 per ounce gold price, respectively, with all
other assumptions remaining constant.
At December 31, 2017, our attributable proven and probable gold reserves in North America were 28.8 million ounces. Outside
of North America, year-end attributable proven and probable gold reserves were 39.7 million ounces, including 6.0 million ounces in
South America, 21.0 million ounces in Australia and 12.7 million ounces in Africa.
Our attributable proven and probable copper reserves at December 31, 2017 were 2,670 million pounds. For 2017 and 2016,
reserves were calculated at a copper price assumption of $2.50 or A$3.35 per pound.
Our attributable proven and probable silver reserves at December 31, 2017 were 87.9 million ounces. For 2017, reserves were
calculated at a silver price assumption of $16 per ounce. For 2016, reserves were calculated at a silver price assumption of $17 per
ounce. Silver reserves are generally a by-product of gold and/or copper reserves, with significant enough levels to be estimated and
included in calculations for mine planning and operations.
Under our current mining plans, all of our reserves are located on fee property or mining claims or will be depleted during the
terms of existing mining licenses or concessions, or where applicable, any assured renewal or extension periods for such licenses or
concessions.
Proven and probable reserves are based on extensive drilling, sampling, mine modeling and metallurgical testing from which we
determined economic feasibility. Metal price assumptions, adjusted for our exchange rate assumption, 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 below list the average metallurgical recovery rate for each deposit,
which takes into account the relevant processing methods. The cut-off grade, or lowest grade of mineralization 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 and copper will be realized. Ounces of gold or pounds of
copper included in the proven and probable reserves are those contained prior to losses during metallurgical treatment. Reserve
40
estimates may require revision based on actual production. Market fluctuations in the price of gold and copper, as well as increased
production costs or reduced metallurgical recovery rates, could render certain proven and probable reserves containing higher cost
reserves uneconomic to exploit and might result in a reduction of reserves.
We publish reserves annually, and will recalculate reserves at December 31, 2018, taking into account metal prices, changes, if
any, to future production and capital costs, divestments and depletion as well as any acquisitions and additions during 2018.
The following tables detail gold proven and probable reserves reflecting only those reserves attributable to Newmont’s
ownership or economic interest at December 31, 2017 and 2016:
Gold Reserves At December 31, 2017 (1)
Proven Reserves
Probable Reserves
Proven and Probable Reserves
Deposits/Districts
North America
Newmont Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Metallurgical
Recovery (3)
(oz/ton)
Share
(oz/ton)
(oz/ton)
(000)
(000)
(000)
(000)
(000)
(000)
Carlin Open Pits (4) . . . . . . . . . . . .
Carlin Stockpiles (5) . . . . . . . . . . . .
Carlin Underground (6) . . . . . . . . . .
Total Carlin, Nevada . . . . . . . . .
Phoenix (7) . . . . . . . . . . . . . . . . . . .
Lone Tree . . . . . . . . . . . . . . . . . . .
Total Phoenix, Nevada . . . . . . . .
Turquoise Ridge (8) . . . . . . . . . . . .
Twin Creeks (9) . . . . . . . . . . . . . . .
Twin Creeks Stockpiles (5) . . . . . . .
Total Twin Creeks, Nevada . . . .
Long Canyon, Nevada (10) . . . . . .
CC&V (11) . . . . . . . . . . . . . . . . . . .
CC&V Leach Pad (12) . . . . . . . . . . .
CC&V Stockpiles (5) . . . . . . . . . . .
Total CC&V, Colorado . . . . . . . .
100%
100%
100%
100%
100%
25%
100%
100%
100%
100%
100%
100%
South America
Yanacocha Open Pits (13) . . . . . . . .
Yanacocha Leach Pad (12) . . . . . . . .
Yanacocha Stockpiles (5) . . . . . . . .
Total Yanacocha, Peru . . . . . . . .
Merian, Suriname (14) . . . . . . . . .
54.05%
54.05%
54.05%
75%
2,900
18,900
12,000
33,800
6,200
3,700
9,900
2,600
4,200
31,900
38,700 0.087
0.107
0.062
0.297
0.149
0.023
0.007
0.016
0.455
0.033
0.063
0.066
0.017
900
102,000
—
0.084
2,900
104,900
0.019
188,200 0.057
12,500
6,300
5,100
23,900
39,600
63,500
0.022
0.022
0.042
0.026
0.043
0.037
310
1,180
3,550
5,040
140
20
160
1,200
140
2,010
3,350
60
1,770
—
250
2,020
10,630
270
130
220
620
1,720
2,340
255,100
—
6,400
261,500
243,700
—
243,700
1,800
27,700
—
0.031
0.278
0.037
0.016
0.016
0.452
0.045
29,500 0.069
20,700
23,500
45,800
—
69,300
0.048
0.014
0.025
0.021
624,700 0.029
80,500
—
—
80,500
72,000
152,500
0.018
0.018
0.031
0.024
Australia
Boddington Open Pit (15) . . . . . . . .
Boddington Stockpiles (5) . . . . . . . .
100%
100%
268,800
15,400
0.021
0.017
5,570
260
277,700
89,100
0.020
0.013
Total Boddington, Western
Australia . . . . . . . . . . . . . . . . .
Tanami, Northern Territory (16) . .
Kalgoorlie Open Pit and
100%
284,200
10,000
0.020
0.172
5,830
1,740
366,800
16,400
0.019
0.162
Underground (17) . . . . . . . . . . . . .
Kalgoorlie Stockpiles (5) . . . . . . . .
50%
50%
7,400
75,400
0.059
0.023
440
1,730
26,400
—
0.064
8,030
—
1,760
9,790
3,890
—
3,890
780
1,260
—
2,040
1,010
320
1,140
—
1,460
18,190
1,450
—
—
1,450
2,250
3,700
5,680
1,140
6,820
2,670
1,700
—
0.032
0.062
0.291
0.050
0.016
0.007
0.016
0.454
0.044
0.063
258,000
18,900
18,400
295,300
249,900
3,700
253,600
4,400
31,900
31,900
68,200 0.079
0.049
21,600
0.017
125,500
0.025
45,800
0.084
2,900
174,200
0.020
812,900 0.035
93,000
6,300
5,100
104,400
111,600
216,000
0.018
0.022
0.042
0.020
0.036
0.028
8,340
1,180
5,310
14,830
4,030
20
4,050
1,980
1,400
2,010
5,390
1,070
2,090
1,140
250
3,480
28,820
1,720
130
220
2,070
3,970
6,040
546,500
104,500
0.021
0.013
11,250
1,400
651,000
26,400
0.019
0.166
12,650
4,410
33,800
75,400
0.063
0.023
2,140
1,730
Total Kalgoorlie, Western
Australia . . . . . . . . . . . . . . . .
Africa
Ahafo South Open Pits (18) . . . . . . .
Ahafo Underground (19) . . . . . . . . .
Ahafo Stockpiles (5) . . . . . . . . . . . .
Total Ahafo South, Ghana . . . . .
Ahafo North, Ghana (20) . . . . . . .
Akyem Open Pit (21) . . . . . . . . . . . .
Akyem Stockpiles (5) . . . . . . . . . . .
Total Akyem, Ghana . . . . . . . . .
100%
100%
100%
100%
100%
100%
Total Gold . . . . . . . . . . . . . . . . . .
82,800
377,000
0.026
0.026
2,170
9,740
26,400
409,600
0.064
0.027
1,700
11,190
109,200
786,600
0.035
0.027
3,870
20,930
0.062
0.028
0.038
17,100
—
41,300
58,400
—
13,200
11,200
24,400
82,800
0.050
0.028
0.040
0.038
711,500 0.036
0.050
0.136
0.065
0.070
0.048
1,060
—
1,160
2,220
—
660
320
980
3,200
54,200
11,600
—
65,800
48,000
38,400
—
38,400
152,200
0.048
0.062
25,910 1,339,000 0.032
2,700
1,590
—
4,290
3,350
1,840
—
1,840
9,480
0.053
0.136
0.028
0.052
0.070
0.048
0.028
0.045
0.054
42,560 2,050,500 0.033
71,300
11,600
41,300
124,200
48,000
51,600
11,200
62,800
235,000
3,760
1,590
1,160
6,510
3,350
2,500
320
2,820
12,680
68,470
59%
84%
84%
70%
74%
39%
74%
92%
75%
72%
80%
76%
62%
56%
85%
62%
75%
70%
73%
56%
69%
93%
83%
83%
77%
83%
98%
83%
74%
79%
84%
90%
93%
87%
90%
91%
90%
90%
90%
90%
81%
41
Deposits/Districts
North America
Gold Reserves At December 31, 2016 (1)
Proven Reserves
Probable Reserves
Proven and Probable Reserves
Newmont Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Metallurgical
Recovery (3)
Share
(oz/ton)
(oz/ton)
(oz/ton)
(000)
(000)
(000)
(000)
(000)
(000)
Carlin Open Pits . . . . . . . . . . . . . .
Carlin Stockpiles (5) . . . . . . . . . . . .
Carlin Underground . . . . . . . . . . .
Total Carlin, Nevada . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . .
Lone Tree . . . . . . . . . . . . . . . . . .
Total Phoenix, Nevada . . . . . . . .
Turquoise Ridge (8) . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . .
Twin Creeks Stockpiles (5) . . . . . . .
Total Twin Creeks, Nevada . . . .
Long Canyon, Nevada . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . .
CC&V Leach Pad (12) . . . . . . . . . . .
CC&V Stockpiles (5) . . . . . . . . . . .
Total CC&V, Colorado . . . . . . . .
100%
100%
100%
100%
100%
25%
100%
100%
100%
100%
100%
100%
South America
Yanacocha Open Pits . . . . . . . . . . 51.35%
Yanacocha Leach Pad (12) . . . . . . . . 51.35%
Yanacocha Stockpiles (5) . . . . . . . . 51.35%
Total Yanacocha, Peru . . . . . . . .
Merian, Suriname . . . . . . . . . . . . .
75%
67,900
21,200
12,000
101,100
4,800
2,600
7,400
1,500
3,700
32,000
37,200
—
72,500
—
2,800
75,300
221,000
17,900
8,600
5,800
32,300
—
32,300
0.058
0.063
0.299
0.088
0.025
0.007
0.019
0.453
0.046
0.063
0.078
0.022
0.112
0.025
0.062
0.018
0.020
0.044
0.023
0.023
Australia
Boddington Open Pit . . . . . . . . . . .
Boddington Stockpiles (5) . . . . . . . .
100%
100%
226,400
15,800
0.022
0.016
Total Boddington, Western
Australia . . . . . . . . . . . . . . . . .
Tanami, Northern Territory . . . . .
Kalgoorlie Open Pit and
100%
242,200
6,300
0.022
0.153
Underground . . . . . . . . . . . . . . .
Kalgoorlie Stockpiles (5) . . . . . . . .
50%
50%
9,800
70,100
0.060
0.023
Total Kalgoorlie, Western
Australia . . . . . . . . . . . . . . . . .
Africa
Ahafo South Open Pits . . . . . . . . .
Ahafo Underground . . . . . . . . . . .
Ahafo Stockpiles (5) . . . . . . . . . . . .
Total Ahafo South, Ghana . . . . .
Ahafo North, Ghana . . . . . . . . . .
Akyem Open Pit . . . . . . . . . . . . . .
Akyem Stockpiles (5) . . . . . . . . . . .
Total Akyem, Ghana . . . . . . . . .
100%
100%
100%
100%
100%
100%
Total Gold . . . . . . . . . . . . . . . . . . .
79,900
328,400
0.027
0.026
13,900
—
42,000
55,900
—
17,200
10,800
28,000
83,900
665,600
0.066
0.028
0.038
0.049
0.035
0.043
0.040
0.039
3,960
1,330
3,580
8,870
120
20
140
710
180
2,000
2,890
—
1,560
—
310
1,870
13,770
310
170
260
740
—
740
5,020
250
5,270
960
580
1,610
2,190
8,420
187,400
—
6,600
194,000
251,800
0.024
0.240
0.032
0.017
1,200 0.020
253,000
1,400
26,200
—
27,600
19,200
17,900
48,500
—
66,400
560,200
81,400
—
—
81,400
116,800
198,200
0.017
0.458
0.054
0.074
0.061
0.017
0.025
0.023
0.027
0.018
0.018
0.037
0.029
241,200
83,800
0.022
0.013
325,000
19,300
0.020
0.182
30,400
—
0.064
4,540
—
1,590
6,130
4,220
20
4,240
630
1,410
—
2,040
1,170
310
1,210
—
1,520
15,100
1,500
—
—
1,500
4,290
5,790
5,280
1,090
6,370
3,520
1,950
—
255,300
21,200
18,600
295,100
256,600
0.033
0.063
0.278
0.051
0.017
3,800 0.011
260,400
2,900
29,900
32,000
64,800
19,200
90,400
48,500
2,800
141,700
781,200
99,300
8,600
5,800
113,700
116,800
230,500
0.017
0.455
0.053
0.063
0.076
0.061
0.021
0.025
0.112
0.024
0.037
0.018
0.020
0.044
0.020
0.037
0.028
8,500
1,330
5,170
15,000
4,340
40
4,380
1,340
1,590
2,000
4,930
1,170
1,870
1,210
310
3,390
28,870
1,810
170
260
2,240
4,290
6,530
467,600
99,600
0.022
0.013
10,300
1,340
567,200
25,600
0.021
0.175
11,640
4,480
40,200
70,100
0.063
0.023
2,530
1,610
30,400
374,700
0.064
0.032
1,950
11,840
110,300
703,100
0.038
0.029
4,140
20,260
920
—
1,190
2,110
—
840
370
1,210
3,320
50,600
11,700
—
62,300
47,900
43,500
—
43,500
153,700
26,250 1,286,800
0.051
0.131
0.066
0.069
0.047
0.047
0.062
0.033
2,580
1,530
—
4,110
3,330
2,040
—
2,040
9,480
64,500
11,700
42,000
118,200
47,900
60,700
10,800
71,500
237,600
42,210 1,952,400
0.054
0.131
0.028
0.053
0.069
0.047
0.035
0.045
0.054
0.035
3,500
1,530
1,190
6,220
3,330
2,880
370
3,250
12,800
68,460
63%
81%
85%
72%
76%
57%
76%
92%
77%
74%
80%
76%
62%
57%
70%
61%
73%
69%
67%
63%
69%
93%
85%
84%
77%
83%
96%
84%
76%
81%
86%
90%
94%
87%
90%
91%
89%
89%
89%
90%
81%
(1) The term “reserve” means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve
determination.
The term “economically,” as used in the definition of reserve, means that profitable extraction or production has been established or analytically
demonstrated in a feasibility study to be viable and justifiable under reasonable investment and market assumptions.
The term “legally,” as used in the definition of reserve, does not imply that all permits needed for mining and processing have been obtained or
that other legal issues have been completely resolved. However, for a reserve to exist, Newmont must have a justifiable expectation, based on
applicable laws and regulations, that issuance of permits or resolution of legal issues necessary for mining and processing at a particular deposit
will be accomplished in the ordinary course and in a timeframe consistent with Newmont’s current mine plans.
The term “proven reserves” means reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill
holes; (b) grade and/or quality are computed from the results of detailed sampling; and (c) the sites for inspection, sampling and measurements
42
are spaced so closely and the geologic character is sufficiently defined that size, shape, depth and mineral content of reserves are well
established.
The term “probable reserves” means reserves for which quantity and grade are computed from information similar to that used for proven
reserves, but the sites for sampling are farther apart or are otherwise less closely spaced. The degree of assurance, although lower than that for
proven reserves, is high enough to assume continuity between points of observation. Newmont classifies all reserves as Probable on its
development projects until a year of production has confirmed all assumptions made in the reserve estimates.
Proven and probable reserves include gold, copper or silver attributable to Newmont’s ownership or economic interest.
Proven and probable reserves were calculated using different cut-off grades. The term “cut-off grade” means the lowest grade of mineralized
material considered economic to process. Cut-off grades vary between deposits depending upon prevailing economic conditions, mineability of
the deposit, by-products, amenability of the ore to gold, copper or silver extraction and type of milling or leaching facilities available.
2017 and 2016 reserves were calculated at a gold price of $1,200, or A$1,600 per ounce unless otherwise noted.
(2) Tonnages include allowances for losses resulting from mining methods. Tonnages are rounded to the nearest 100,000.
(3) Ounces are estimates of metal contained in ore tonnages and do not include allowances for processing losses. Metallurgical recovery rates
represent the estimated amount of metal to be recovered through metallurgical extraction processes. Ounces may not recalculate as they are
rounded to the nearest 10,000.
(4) Cut-off grades utilized in 2017 reserves were as follows: oxide leach material not less than 0.006 ounce per ton; oxide mill material not less than
0.015 ounce per ton; flotation material not less than 0.016 ounce per ton; and refractory mill material not less than 0.080 ounce per ton.
(5) Stockpiles are comprised primarily of material that has been set aside to allow processing of higher grade material in the mills. Stockpiles
increase or decrease depending on current mine plans. Stockpile reserves are reported separately where ounces exceed 100,000 and are greater
than 5% of the total site-reported reserves.
(6) Cut-off grade utilized in 2017 reserves not less than 0.042 ounce per ton.
(7) Gold cut-off grade varies with level of copper and silver credits.
(8) Reserve estimates provided by Barrick as of February 14, 2018, the operator of the Turquoise Ridge joint venture.
(9) Cut-off grades utilized in 2017 reserves were as follows: oxide leach material not less than 0.007 ounce per ton; oxide mill material not less than
0.019 ounce per ton; and refractory mill material not less than 0.038 ounce per ton.
(10) Cut-off grade utilized in 2017 reserves not less than 0.007 ounce per ton.
(11) Cut-off grades utilized in 2017 reserves were as follows: oxide mill material not less than 0.040 ounce per ton and leach material not less than
0.005 ounce per ton.
(12) Leach pad material is the material on leach pads at the end of the year from which gold remains to be recovered. In-process reserves are reported
separately where ounces exceed 100,000 and are greater than 5% of the total site-reported reserves.
(13) Gold cut-off grades utilized in 2017 reserves were as follows: oxide leach material not less than 0.004 ounce per ton; and oxide mill material not
less than 0.011 ounce per ton.
(14) Cut-off grade utilized in 2017 reserves not less than 0.011 ounce per ton.
(15) Gold cut-off grade varies with level of copper credits.
(16) Cut-off grade utilized in 2017 reserves not less than 0.058 ounce per ton.
(17) Cut-off grade utilized in 2017 in situ reserves not less than 0.026 ounce per ton.
(18) Cut-off grade utilized in 2017 reserves not less than 0.016 ounce per ton.
(19) Cut-off grade utilized in 2017 reserves not less than 0.076 ounce per ton.
(20) Includes undeveloped reserves at six pits in the Ahafo trend totaling 3.4 million ounces. Cut-off grade utilized in 2017 reserves not less than
0.014 ounce per ton.
(21) Cut-off grade utilized in 2017 reserves not less than 0.017 ounce per ton.
43
Deposits/Districts
North America
Phoenix, Nevada (4) . . . . . . . . . . . .
The following tables detail copper proven and probable reserves reflecting only those reserves attributable to Newmont’s
ownership or economic interest at December 31, 2017 and 2016:
Copper Reserves At December 31, 2017(1)
Proven Reserves
Probable Reserves
Proven and Probable Reserves
Newmont Tonnage (2) Grade Pounds (3) Tonnage (2) Grade Pounds (3) Tonnage (2) Grade Pounds (3) Metallurgical
(Cu %) (millions) Recovery (3)
Share
(Cu %) (millions)
(Cu %) (millions)
(000)
(000)
(000)
100%
56,300 0.21%
56,300 0.21%
240
240
338,400 0.16%
338,400 0.16%
1,090
1,090
394,700
394,700
0.17%
0.17%
1,330
1,330
60%
60%
Australia
Boddington Open Pit, Western
Australia (5) . . . . . . . . . . . . . . . . .
100%
268,800 0.10%
520
277,700 0.11%
640
546,500
0.11%
1,160
79%
Boddington Stockpiles, Western
Australia (6) . . . . . . . . . . . . . . . . .
100%
Total Copper . . . . . . . . . . . . . . .
15,400 0.09%
284,200 0.10%
340,500 0.12%
30
550
790
89,100 0.08%
366,800 0.11%
705,200 0.13%
150
790
104,500 0.09%
651,000 0.10%
1,880 1,045,700
0.13%
180
1,340
2,670
73%
78%
69%
Copper Reserves At December 31, 2016 (1)
Proven Reserves
Probable Reserves
Proven and Probable Reserves
Newmont Tonnage (2) Grade Pounds (3) Tonnage (2) Grade Pounds (3) Tonnage (2) Grade Pounds (3) Metallurgical
(Cu %) (millions) Recovery (3)
Share
(Cu %) (millions)
(Cu %) (millions)
(000)
(000)
(000)
Deposits/Districts
North America
Phoenix, Nevada . . . . . . . . . . . . . .
100%
19,100 0.21%
19,100 0.21%
80
80
376,400 0.16%
376,400 0.16%
1,180
1,180
395,500
395,500
0.16%
0.16%
1,260
1,260
62%
62%
Australia
Boddington Open Pit, Western
Australia . . . . . . . . . . . . . . . . . .
100%
226,400 0.11%
480
241,200 0.12%
580
467,600
0.11%
1,060
79%
Boddington Stockpiles, Western
Australia (6) . . . . . . . . . . . . . . . . .
100%
Total Copper . . . . . . . . . . . . . . .
15,800 0.09%
242,200 0.10%
261,300 0.11%
30
510
590
83,800 0.08%
325,000 0.11%
701,400 0.14%
140
720
1,900
99,600 0.09%
567,200 0.11%
962,700 0.13%
170
1,230
2,490
72%
78%
70%
(1) See footnote (1) to the Gold Proven and Probable Reserves tables above. Copper reserves for 2017 and 2016 were calculated at a copper price of
$2.50 or A$3.35 per pound.
(2) See footnote (2) to the Gold Proven and Probable Reserves tables above. Tonnages are rounded to nearest 100,000.
(3) See footnote (3) to the Gold Proven and Probable Reserves tables above. Pounds may not recalculate as they are rounded to the nearest 10
million.
(4) Copper cut-off grade varies with level of gold and silver credits.
(5) Copper cut-off grade varies with level of gold credits.
(6) Stockpiles are comprised primarily of material that has been set aside to allow processing of higher grade material in the mills. Stockpiles
increase or decrease depending on current mine plans. Stockpiles are reported separately where pounds exceed 100 million and are greater than
5% of the total site reported reserves.
44
The following tables detail silver proven and probable reserves reflecting only those reserves attributable to Newmont’s
ownership or economic interest at December 31, 2017 and 2016:
Silver Reserves At December 31, 2017 (1)
Proven Reserves
Probable Reserves
Proven and Probable Reserves
Deposits/Districts
North America
Newmont Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Metallurgical
Recovery (3)
Share
(oz/ton)
(oz/ton)
(oz/ton)
(000)
(000)
(000)
(000)
(000)
(000)
Phoenix, Nevada . . . . . . . . . . . . .
100%
6,200
6,200
0.32
0.32
1,960
1,960
243,700
243,700
0.24
0.24
58,920
58,920
249,900
249,900
0.24
0.24
South America
Yanacocha Open Pits, Peru . . . . .
Yanacocha Stockpiles, Peru (4) . . .
Yanacocha Leach Pad, Peru (5) . . .
54.05%
54.05%
54.05%
Total Silver . . . . . . . . . . . . . . . . .
12,500
5,100
—
17,600
23,800
0.23
1.13
0.49
0.45
2,860
5,840
—
8,700
10,660
24,100
—
55,000
79,100
322,800
0.20
0.25
0.23
0.24
4,730
—
13,570
18,300
77,220
36,600
5,100
55,000
96,700
346,600
0.21
1.13
0.25
0.28
0.25
60,880
60,880
7,590
5,840
13,570
27,000
87,880
38%
38%
12%
6%
6%
8%
24%
Silver Reserves At December 31, 2016 (1)
Proven Reserves
Probable Reserves
Proven and Probable Reserves
Deposits/Districts
North America
Newmont Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Tonnage (2) Grade Ounces (3) Metallurgical
Recovery (3)
Share
(oz/ton)
(oz/ton)
(oz/ton)
(000)
(000)
(000)
(000)
(000)
(000)
Phoenix, Nevada . . . . . . . . . . . . . .
100%
South America
Yanacocha Open Pits, Peru . . . . . . 51.35%
Yanacocha Stockpiles, Peru (4) . . . . 51.35%
Yanacocha Leach Pad, Peru (5) . . . . 51.35%
Total Silver . . . . . . . . . . . . . . . . . .
4,800
4,800
17,900
5,500
—
23,400
28,200
0.29
0.29
0.21
1.10
0.41
0.39
1,390
1,390
251,800
251,800
3,680
5,990
—
9,670
11,060
29,000
—
50,500
79,500
331,300
0.24
0.24
0.22
0.25
0.24
0.24
59,520
59,520
256,600
256,600
6,350
—
12,390
18,740
78,260
46,900
5,500
50,500
102,900
359,500
0.24
0.24
0.21
1.10
0.25
0.28
0.25
60,910
60,910
10,030
5,990
12,390
28,410
89,320
38%
38%
16%
20%
6%
12%
30%
(1) See footnote (1) to the Gold Proven and Probable Reserves tables above. Silver reserves for 2017 were calculated at a silver price of $16. Silver
reserves for 2016 were calculated at a silver price of $17.
(2) See footnote (2) to the Gold Proven and Probable Reserves tables above. Tonnages are rounded to nearest 100,000.
(3) See footnote (3) to the Gold Proven and Probable Reserves tables above.
(4) Stockpiles are comprised primarily of material that has been set aside to allow processing of higher grade material in the mills. Stockpiles
increase or decrease depending on current mine plans. Stockpile reserves are reported separately where ounces exceed 100,000 and are greater
than 5% of the total site-reported reserves.
(5) Leach Pad material is the material on leach pads at the end of the year from which silver remains to be recovered. In-process material reserves
are reported separately where tonnage or ounces are greater than 5% of the total site-reported reserves and ounces are greater than 100,000.
The following table reconciles 2017 and 2016 gold, copper and silver proven and probable reserves:
December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Revisions (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
68.5
(6.4)
1.9
4.4
0.1
68.5
(in millions)
2,490
(160)
250
90
—
2,670
89.3
(6.6)
2.3
1.6
1.3
87.9
Gold Ounces Copper Pounds Silver Ounces
(1) Revisions are due to reclassification of reserves to mineralized material, optimizations, model updates, metal price changes and updated
operating costs and recoveries.
(2) Additions are due to reserve conversions from mineralized material due to new drilling information and successful feasibility studies for first
time declarations.
(3) Acquisitions include an increase in ownership at Yanacocha in December 2017 which added 0.1 million gold ounces and 1.3 million silver
ounces to proven and probable reserves in 2017.
45
Mineralized Material
All of our mineralized material is located on fee property or mining claims. Mineralized material is a mineralized ore body
which has been intersected by a sufficient number of closely spaced drill holes and/or underground sampling to support sufficient
tonnage and average grade of metal(s) to warrant further exploration development work. The deposit does not qualify as a
commercially minable ore body until it can be legally and economically extracted or produced at the time of the reserve determination.
Metal price assumptions are based on approximately a twenty to thirty percent premium over reserve prices.
We had attributable gold mineralized material of 1,360 million tons at an average grade of 0.025 ounces per ton at
December 31, 2017. For 2017 and 2016, attributable gold mineralized material was calculated at a gold price assumption of $1,400 or
A$1,750 per ounce.
At December 31, 2017, our gold mineralized material included 455 million tons in North America, 520 million tons in South
America, 323 million tons in Australia and 62 million tons in Africa.
We had attributable copper mineralized material of 1,065 million tons at a grade of 0.20% at December 31, 2017. For 2017,
attributable copper mineralized material was calculated at a copper price assumption of $3.25 or A$4.00 per pound. For 2016,
attributable copper mineralized material was calculated at a copper price assumption of $3.00 or A$3.75 per pound.
We had attributable silver mineralized material of 705 million tons at a grade of 0.15 ounces per ton at December 31, 2017. For
2017 and 2016, attributable silver mineralized material was calculated at a silver price assumption of $20 per ounce. Silver
mineralized material is generally a by-product of gold and/or copper mineralized material estimates, with significant enough levels to
be estimated and included in future calculations of potential economic extraction.
The mineralized material figures presented herein do not include that part of our mineralized material that has been converted to
Proven and Probable Reserves as shown above, as they are reported exclusive of reserves, and have been estimated based on
information available at the time of calculation. Market fluctuations in the price of gold, copper and silver, as well as increased
production costs or reduced metallurgical recovery rates, could render certain mineralized material containing lower grades of
mineralization uneconomic to exploit and might result in a reduction of mineralized material.
We will publish mineralized materials annually, and will recalculate them at December 31, 2018, taking into account metal
prices, changes, if any, in future production and capital costs, divestments and conversion to reserves, as well as any acquisitions and
additions during 2018.
Mineralized material is reported exclusive of reserves. Mineralized material as used in this annual report, although permitted by
the SEC, does not indicate “reserves” as defined in the SEC’s Industry Guide 7. Newmont cannot be certain that any part of the
reported mineralized material will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves.” Investors are
cautioned not to assume that all or any part of the mineralized material will ever be confirmed or converted into reserves or that
mineralized material can be economically or legally extracted.
46
The following tables detail mineralized material reflecting only those that are attributable to Newmont’s ownership or economic
interest at December 31, 2017 and 2016:
Mineralized Material At December 31, 2017 (1)(2)
Gold
Copper
Silver
Deposits/Districts
North America
Newmont Tonnage Grade Tonnage Grade Tonnage Grade
(oz/ton)
(oz/ton)
(Cu %)
Share
(000)
(000)
(000)
Carlin Trend Open Pit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carlin Trend Underground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Carlin, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buffalo Valley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Phoenix, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks Stockpiles (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sandman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Turquoise Ridge (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Twin Creeks, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V, Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
100%
70%
100%
100%
100%
25%
100%
100%
South America
Conga, Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha, Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian, Suriname . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
54.05%
54.05%
75%
Australia
Boddington, Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami, Northern Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie, Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
50%
Africa
Ahafo South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo Underground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Ahafo South, Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo North Open Pits, Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem Open Pits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem Underground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem, Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
100%
100%
100%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
91,400
2,600
94,000
213,100
15,500
228,600
35,600
8,500
1,300
1,900
47,300
16,000
69,200
455,100
413,300
80,200
26,700
520,200
301,600
4,800
16,800
323,200
35,300
11,400
46,700
10,700
3,100
1,300
4,400
61,800
1,360,300
0.041
0.214
0.046
0.013
0.019
0.013
0.059
0.059
0.036
0.268
0.066
0.103
0.014
0.029
0.019
0.032
0.044
0.022
0.016
0.148
0.034
0.019
0.033
0.132
0.057
0.048
0.015
0.137
0.052
0.055
0.025
0.13%
0.13%
—
—
—
289,200
—
289,200
—
—
—
—
—
—
—
289,200 0.13%
413,300
61,300
—
0.26%
0.64%
474,600 0.31%
0.11%
301,600
—
—
301,600 0.11%
—
—
—
—
—
—
—
—
1,065,400 0.20%
—
—
—
213,100
—
213,100
—
—
1,300
—
1,300
—
—
214,400
413,300
77,100
—
490,400
—
—
—
—
—
—
—
—
—
—
—
—
704,800
0.21
0.21
0.20
0.20
0.21
0.06
0.52
0.13
0.15
47
Deposits/Districts
North America
Mineralized Material At December 31, 2016 (1)(2)
Gold
Copper
Silver
Newmont Tonnage Grade Tonnage Grade Tonnage Grade
(oz/ton)
(oz/ton)
(Cu %)
Share
(000)
(000)
(000)
Carlin Trend Open Pit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Carlin Trend Underground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Carlin, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buffalo Valley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Phoenix, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks Stockpiles (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sandman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Turquoise Ridge (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Twin Creeks, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon, Nevada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V, Colorado . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
100%
70%
100%
100%
100%
25%
100%
100%
South America
Conga, Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha, Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian, Suriname . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51.35%
51.35%
75%
Australia
Boddington, Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami, Northern Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie, Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
50%
Africa
Ahafo South . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo Underground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Ahafo South, Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo North Open Pits, Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem, Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100%
100%
100%
100%
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100,300
3,200
103,500
178,100
15,500
193,600
31,600
7,700
1,300
1,400
42,000
16,000
127,200
482,300
392,700
71,100
21,300
485,100
390,400
2,800
15,600
408,800
33,400
8,600
42,000
10,400
10,300
62,700
1,438,900
0.036
0.223
0.042
0.014
0.019
0.014
0.062
0.059
0.036
0.463
0.074
0.103
0.017
0.029
0.019
0.024
0.032
0.020
0.015
0.161
0.026
0.016
0.035
0.124
0.053
0.046
0.034
0.049
0.023
0.13%
0.13%
—
—
—
257,000
—
257,000
—
—
—
—
—
—
—
257,000 0.13%
392,700
57,000
—
0.26%
0.67%
449,700 0.31%
0.10%
390,400
—
—
390,400 0.10%
—
—
—
—
—
—
1,097,100 0.19%
—
—
—
178,100
—
178,100
—
—
1,300
—
1,300
—
—
179,400
392,700
63,800
—
456,500
—
—
—
—
—
—
—
—
—
—
635,900
0.21
0.21
0.20
0.20
0.21
0.06
0.54
0.13
0.15
(1) Mineralized material is reported exclusive of reserves. “Mineralized material” as used in this annual report, although permitted by the SEC, does
not indicate “reserves” as defined in the SEC’s Industry Guide 7. Newmont cannot be certain that any part of the reported mineralized material
will ever be confirmed or converted into SEC Industry Guide 7 compliant “reserves.” Investors are cautioned not to assume that all or any part
of the mineralized material will ever be confirmed or converted into reserves or that mineralized material can be economically or legally
extracted.
(2) Mineralized material for 2017 and 2016 was calculated at a gold price of $1,400 or A$1,750 per ounce. Mineralized material for 2017 was
calculated at a copper price of $3.25 or A$4.00 per pound and at a copper price of $3.00 or A$3.75 per pound for 2016. Mineralized material for
2017 and 2016 was calculated at a silver price of $20 per ounce. Tonnage amounts have been rounded to the nearest 100,000.
(3) Stockpiles are comprised primarily of mineralized material that has been set aside during mining activities. Stockpiles can increase or decrease
depending on changes in metal prices and other mining and processing cost and recovery factors. Stockpile reserves are reported separately
where tonnage exceeds 100,000 and is greater than 5% of the total site-reported mineralized material.
(4) Mineralized material estimates were provided by Barrick, the operator of the Turquoise Ridge Joint Venture.
48
ITEM 3.
LEGAL PROCEEDINGS
For a discussion of legal proceedings, see Note 29 to the Consolidated Financial Statements.
ITEM 4. MINE SAFETY DISCLOSURES
At Newmont, safety is a core value, and we strive for superior performance. Our health and safety management system, which
includes detailed standards and procedures for safe production, addresses topics such as employee training, risk management,
workplace inspection, emergency response, accident investigation and program auditing. In addition to strong leadership and
involvement from all levels of the organization, these programs and procedures form the cornerstone of safety at Newmont, ensuring
that employees are provided a safe and healthy environment and are intended to reduce workplace accidents, incidents and losses,
comply with all mining-related regulations and provide support for both regulators and the industry to improve mine safety.
In addition, we have established our “Rapid Response” process to mitigate and prevent the escalation of adverse consequences if
existing risk management controls fail, particularly if an incident may have the potential to seriously impact the safety of employees,
the community or the environment. This process provides appropriate support to an affected site to complement their technical
response to an incident, so as to reduce the impact by considering the environmental, strategic, legal, financial and public image
aspects of the incident, to ensure communications are being carried out in accordance with legal and ethical requirements and to
identify actions in addition to those addressing the immediate hazards.
The operation of our U.S. based mines is subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”)
under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our mines on a regular basis and issues
various citations and orders when it believes a violation has occurred under the Mine Act. Following passage of The Mine
Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged
against mining operations. The dollar penalties assessed for citations issued has also increased in recent years.
Newmont is required to report certain mine safety violations or other regulatory matters required by Section 1503(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, and that required information is
included in Exhibit 95 and is incorporated by reference into this Annual Report.
49
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASE OF EQUITY SECURITIES
Our common stock is listed and principally traded on the New York Stock Exchange under the symbol “NEM.”
The following table sets forth, for the periods indicated, the closing high and low sales prices per share of Newmont’s common
stock as reported on the New York Stock Exchange Composite Tape:
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fourth quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
High
High
2017
Low
37.94 $ 32.40 $
35.51 $ 32.23 $
39.60 $ 31.89 $
38.59 $ 34.59 $
2016
Low
27.79 $ 16.31
39.12 $ 26.30
45.86 $ 38.15
38.10 $ 30.91
On February 15, 2018, there were 533,474,863 shares of Newmont’s common stock outstanding, which were held by
approximately 7,562 stockholders of record. A dividend of $0.050 per share of common stock outstanding was declared in the first
and second quarters and $0.075 in the third and fourth quarters of 2017 for a total of $0.250 per share. A dividend of $0.025 per share
of common stock outstanding was declared in the first three quarters and $0.050 in the fourth quarter of 2016, for a total of $0.125 per
share.
The quarterly dividend declared during 2017 was calculated based upon the average London Bullion Market Association P.M.
gold price for the preceding quarter. In February 2018, the Company eliminated the gold-price linked dividend calculation. The
declaration and payment of future dividends remains at the discretion of the Board and will depend on the Company's financial results,
cash requirements, future prospects and other factors deemed relevant by the Board.
During the period from October 1, 2017, to December 31, 2017, 8,033 shares of Newmont’s equity securities registered
pursuant to Section 12 of the Exchanges Act of 1934, as amended, were purchased by the Company, or an affiliated purchaser.
Period
October 1, 2017 through October 31, 2017 . . . . . . .
November 1, 2017 through November 30, 2017 . . .
December 1, 2017 through December 31, 2017 . . .
(a)
(b)
Total
Number
of Shares
Purchased
Average
Price Paid
Per Share
—
36.03
—
—
$
8,033 (1) $
$
—
(c)
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs
—
—
—
(d)
Maximum Number (or
Approximate Dollar Value)
of Shares that may
yet be Purchased
under the Plans or Programs
N/A
N/A
N/A
(1) Represents shares delivered to the Company from restricted stock units held by a Company employee upon vesting for the purpose of covering
the recipient’s tax withholding obligations.
50
ITEM 6. SELECTED FINANCIAL DATA (dollars in millions, except per share)
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . $
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income (loss) attributable to Newmont stockholders (1) . . . . . . . . . . . $
Income (loss) per common share:
Basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
Diluted:
2017
7,348 $
(49) $
(87) $
(98) $
Years Ended December 31,
2015
6,085 $
(141) $
304 $
220 $
2016
6,711 $
(790) $
(923) $
(627) $
2014
6,819 $
613 $
329 $
508 $
2013
7,891
(2,284)
(2,795)
(2,534)
(0.11) $
(0.07)
(0.18) $
(0.41) $
(0.77)
(1.18) $
— $
0.43
0.43 $
1.30 $
(0.28)
1.02 $
(4.71)
(0.38)
(5.09)
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
Dividends declared per common share . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.11) $
(0.07)
(0.18) $
0.250 $
(0.41) $
(0.77)
(1.18) $
0.125 $
— $
0.43
0.43 $
0.100 $
1.30 $
(0.28)
1.02 $
0.225 $
(4.71)
(0.38)
(5.09)
1.225
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Debt, including current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Newmont stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2017
20,563 $
4,065 $
10,609 $
2016
21,031 $
4,615 $
10,721 $
At December 31,
2015
25,130 $
5,863 $
11,350 $
2014
24,858 $
6,040 $
10,274 $
2013
24,545
6,134
9,993
(1) Net income (loss) attributable to Newmont stockholders includes discontinued operations of $(38), $(407), $221, $(142) and $(191) net of tax in
2017, 2016, 2015, 2014 and 2013, respectively.
51
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (dollars in millions, except per share, per ounce and per pound amounts)
The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant
to an assessment and understanding of the consolidated financial condition and results of operations of Newmont Mining Corporation
and its affiliates and subsidiaries (collectively, “Newmont,” the “Company,” “our” and “we”). We use certain non-GAAP financial
measures in our MD&A. For a detailed description of each of the non-GAAP measures used in this MD&A, please see the discussion
under Non-GAAP Financial Measures beginning on page 74. References to “A$” refer to Australian currency and “C$” refer to
Canadian currency. This item should be read in conjunction with our Consolidated Financial Statements and the notes thereto included
in this annual report.
Overview
Newmont is one of the world’s largest gold producers and is the only gold company included in the S&P 500 Index and Fortune
500. We have been included in the Dow Jones Sustainability Index-World for 11 consecutive years and have adopted the World Gold
Council’s Conflict-Free Gold Policy. We are also engaged in the exploration for and acquisition of gold and copper properties. We
have significant operations and/or assets in the United States (“U.S.”), Australia, Peru, Ghana and Suriname.
On November 2, 2016, Newmont completed the sale of its 48.5% economic interest in PT Newmont Nusa Tenggara
(“PTNNT”), which operated the Batu Hijau copper and gold mine (“Batu Hijau”) in Indonesia (the “Batu Hijau Transaction”). As a
result, Newmont presents Batu Hijau as a discontinued operation for all periods presented. In the following discussion and analysis,
the operating statistics, results of operations, cash flows and financial condition that we present and discuss are those of our continuing
operations unless otherwise indicated. For additional information regarding our discontinued operations, see Note 3 to the
Consolidated Financial Statements and the discussion in our Results of Consolidated Operations below.
We continue to focus on delivering superior operational execution to generate the financial flexibility we need to fund our best
projects, reduce debt and return cash to shareholders.
Consolidated Financial Results
The details of our Net income (loss) from continuing operations attributable to Newmont stockholders are set forth below:
Net income (loss) from continuing operations attributable to
Newmont stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(60) $
(220) $
160
Net income (loss) from continuing operations attributable to
Newmont stockholders per common share, diluted . . . . . . . . . . . . $
(0.11) $
(0.41) $
0.30
Years Ended
December 31,
2017
2016
Increase
(decrease)
Net income (loss) from continuing operations attributable to
Newmont stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(220) $
(1) $
(219)
Net income (loss) from continuing operations attributable to
Newmont stockholders per common share, diluted . . . . . . . . . . . . $
(0.41) $
— $
(0.41)
Years Ended
December 31,
2016
2015
Increase
(decrease)
Results in 2017 compared to 2016 were impacted by a $970 prior-year impairment charge ($512 attributable to Newmont), a full
year of production at Merian and Long Canyon, an increase in gold production from the CC&V expansion completed in the first
quarter of 2016, and higher realized prices, partially offset by higher taxes from the Tax Cuts and Jobs Act (“the Act”) enacted in
December 2017, a prior-year gain from the sale of the Company’s investment in Regis Resources Ltd (“Regis”) and adverse weather
conditions impacting production at Tanami and Yanacocha during the first quarter of 2017.
Results in 2016 compared to 2015 were impacted by a $970 impairment charge ($512 attributable to Newmont) in December
2016 related to assets in South America that were evaluated in connection with management’s review of the Yanacocha long-term
mining and closure plans, an increase in the Company’s valuation allowances against deferred tax assets, gains in 2015 resulting from
the deconsolidation of TMAC Resources, Inc. (“TMAC”) and the sale of the Company’s investment in European Gold Refinery
52
Holdings (“EGR”) in 2015, partially offset by higher gold sales volumes and realized prices and the positive impact of a gain from
sale of the Company’s investment in Regis during 2016.
The following is a summary of consolidated gold and copper sales, net:
Years Ended December 31,
2015
2016
2017
Gold
North America:
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South America:
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia:
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waihi (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa:
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 1,217 $ 1,182 $ 1,027
221
551
—
91
1,890
257
465
219
575
2,733
248
563
27
491
2,511
671
643
1,314
792
117
909
1,070
—
1,070
981
514
—
458
1,953
973
575
—
467
2,015
910
504
136
360
1,910
439
594
1,033
7,033
436
590
1,026
6,461
387
548
935
5,805
Copper
North America:
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
88
86
109
Australia:
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) Commercial production at Long Canyon was achieved in November 2016.
(2) The Company acquired the CC&V gold mining business in August 2015.
(3) Commercial production at Merian was achieved in October 2016.
(4) The Company sold the Waihi mine in October 2015.
The following analysis summarizes consolidated gold sales:
227
315
171
280
$ 7,348 $ 6,711 $ 6,085
164
250
Consolidated gold sales:
Gross before provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Provisional pricing mark-to-market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross after provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment and refining charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Consolidated gold ounces sold (thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average realized gold price (per ounce):
Gross before provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Provisional pricing mark-to-market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross after provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment and refining charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
53
Years Ended December 31,
2015
2016
2017
10
7,065
(32)
7,055 $ 6,485 $ 5,850
(8)
5,842
(37)
7,033 $ 6,461 $ 5,805
5,052
5,199
5,605
13
6,498
(37)
2
1,261
(6)
1,259 $ 1,247 $ 1,158
(2)
1,156
(7)
1,255 $ 1,243 $ 1,149
3
1,250
(7)
The change in consolidated gold sales is due to:
Change in consolidated ounces sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Change in average realized gold price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in treatment and refining charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 vs. 2016
Years Ended December 31,
2016 vs. 2015
171
485
—
656
507 $
60
5
572 $
$
Gold sales increased 9% in 2017 compared to 2016 primarily due to higher sales volumes from a full year of production and
sales at Merian and Long Canyon and the CC&V expansion completed in the first quarter of 2016 as well as higher average realized
prices, partially offset by adverse weather conditions impacting production at Tanami and Yanacocha during the first quarter of 2017.
Gold sales increased 11% in 2016 compared to 2015 primarily due to the addition of Merian and Long Canyon in October 2016 and
November 2016, respectively, the acquisition of CC&V in August 2015, higher average realized prices and higher sales volumes at
existing operations, partially offset by the sale of Waihi in October 2015. For a complete discussion regarding variations in gold
volumes, see Results of Consolidated Operations below.
The following analysis summarizes consolidated copper sales:
Consolidated copper sales:
Years Ended December 31,
2016 2015
2017
Gross before provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 314 $ 261 $
Provisional pricing mark-to-market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross after provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment and refining charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated copper pounds sold (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 315 $ 250 $
14
328
(13)
5
266
(16)
116
111
319
(21)
298
(18)
280
129
Average realized copper price (per pound):
Gross before provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisional pricing mark-to-market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross after provisional pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment and refining charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 2.83 $ 2.25 $ 2.48
(0.17)
0.04
0.12
2.31
2.29
2.95
(0.12)
(0.14)
(0.14)
$ 2.83 $ 2.15 $ 2.17
The change in consolidated copper sales is due to:
Change in consolidated pounds sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Change in average realized copper price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in treatment and refining charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2017 vs. 2016 2016 vs. 2015
(30)
(2)
2
(30)
(11) $
73
3
65 $
$
Copper sales increased 26% in 2017 compared to 2016 primarily due to higher average net realized prices, partially offset by
lower sales volumes. Copper sales decreased 11% in 2016 compared to 2015 primarily due to lower sales volumes and lower average
net realized prices. For a complete discussion regarding variations in copper volumes, see Results of Consolidated Operations below.
54
The following is a summary of Costs applicable to sales and Depreciation and amortization:
Costs Applicable to Sales
Years Ended December 31,
Depreciation and Amortization
Years Ended December 31,
2015
2016
2017
2017
2016
2015
Gold
North America:
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon (1) . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South America:
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia:
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waihi (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa:
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 795 $ 797 $ 790
163
246
—
44
1,243
181
226
59
285
1,546
164
234
4
216
1,415
504
238
742
525
34
559
564
—
564
562
251
—
234
1,047
268
272
540
3,875
530
238
—
257
1,025
313
235
548
3,547
570
225
55
272
1,122
206
212
418
3,347
Copper
North America:
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
55
99
91
Australia:
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other
Corporate and other . . . . . . . . . . . . . . . . . . . . . . . . .
108
163
126
225
140
231
—
—
$ 4,038 $ 3,772 $ 3,578
—
(1) Commercial production at Long Canyon was achieved in November 2016.
(2) The Company acquired the CC&V gold mining business in August 2015.
(3) Commercial production at Merian was achieved in October 2016.
(4) The Company sold the Waihi mine in October 2015.
The details of our Costs applicable to sales are set forth below:
Years Ended
December 31,
$
221
47
63
74
124
529
134
91
225
113
67
—
19
199
$
200
51
51
5
108
415
275
12
287
110
82
—
19
211
$
198
42
51
—
19
310
320
—
320
113
82
14
21
230
72
154
226
1,179
94
127
221
1,134
53
96
149
1,009
15
22
37
27
24
51
21
26
47
33
$ 1,249
35
$ 1,220
46
$ 1,102
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2017
3,875 $
163
4,038 $
2016
3,547 $
225
3,772 $
328
(62)
266
9 %
(28)
7 %
Increase
Percent
(decrease) Change
Years Ended
December 31,
Increase
Percent
(decrease) Change
2015
3,347 $
231
3,578 $
200
(6)
194
6 %
(3)
5 %
2016
3,547 $
225
3,772 $
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
55
Costs applicable to sales increased in 2017 compared to 2016, primarily due to a full year of commercial production at Merian
and Long Canyon, the CC&V expansion completed in the first quarter of 2016, and higher direct operating costs, partially offset by
lower leach pad inventory adjustments. Costs applicable to sales increased in 2016 compared to 2015, primarily due to the acquisition
of CC&V in 2015, the addition of Merian and Long Canyon in October 2016 and November 2016, respectively, and higher stockpile
and leach pad inventory adjustments at Ahafo and Yanacocha, partially offset by the sale of Waihi in October 2015 and lower oil
prices.
For a complete discussion regarding variations in operations, see Results of Consolidated Operations below.
The details of our Depreciation and amortization are set forth below:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2017
1,179 $
37
33
1,249 $
Increase
Percent
(decrease) Change
45
(14)
(2)
29
2016
1,134 $
51
35
1,220 $
4 %
(27)
(6)
2 %
Years Ended
December 31,
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
2016
1,134 $
51
35
1,220 $
2015
1,009 $
47
46
1,102 $
125
4
(11)
118
12 %
9
(24)
11 %
Years Ended
December 31,
Increase
Percent
(decrease) Change
Depreciation and amortization increased in 2017, compared to 2016, primarily due to a full year of production at Merian and
Long Canyon, partially offset by a lower asset balance resulting from an impairment recorded at Yanacocha in December 2016.
Depreciation and amortization expense increased in 2016, compared to 2015, primarily due to the acquisition of CC&V in August
2015, the addition of Merian and Long Canyon in October 2016 and November 2016, respectively, and higher stockpile and leach pad
inventory adjustments at Ahafo and Yanacocha, partially offset by the sale of Waihi in October 2015.
For a complete discussion regarding variations in operations, see Results of Consolidated Operations.
Reclamation and remediation expense was $177, $179, and $253 for 2017, 2016, and 2015, respectively. Reclamation and
remediation expense in 2017 was in line with 2016 as increased reclamation costs related to Yanacocha during 2016 were largely
offset by increased costs at the Rain, Midnite, Resurrection and San Luis remediation and closure sites during 2017. Reclamation and
remediation expense decreased in 2016, compared to 2015, primarily due to an increase in remediation costs arising from revisions
made to the remediation plan for the Midnite mine in Washington State during 2015, partially offset with the increase in reclamation
costs related to Yanacocha during 2016 as outlined in Note 6 of the Consolidated Financial Statements.
Exploration expense was $179, $148, and $156 for 2017, 2016, and 2015, respectively. Exploration expense increased in 2017,
compared to 2016, primarily due to higher expenditures for near-mine exploration at Tanami, CC&V, Kalgoorlie and Yanacocha, in
addition to greenfield exploration in the Guiana Shield and other locations as we continue to focus on developing future reserves.
Exploration expense decreased in 2016, compared to 2015, primarily due to the deconsolidation of TMAC in 2015 and lower
expenditures at Yanacocha, partially offset by increased expenditures at various projects.
For additional information about proven and probable reserves, including additions and reductions, see the discussion in Gold,
Copper and Silver Reserves in Item 1, Business, and Proven and Probable Reserves in Item 2, Properties.
Advanced projects, research and development expense includes development project management costs, feasibility studies and
other project expenses that do not qualify for capitalization. Advanced projects, research and development expense was $143, $134,
and $126 for 2017, 2016, and 2015, respectively. Advanced projects, research and development expense increased in 2017, compared
to 2016, primarily due to costs associated with full potential opportunities in North America and advanced studies on the Yanacocha
Sulfides project, partially offset by prior-year Merian pre-production expenses. Advanced projects, research and development expense
increased in 2016, compared to 2015, primarily due to increased costs to develop various studies and Merian pre-production expenses,
partially offset by reduced spend on Conga care and maintenance.
56
General and administrative expense was $237, $233, and $241 for 2017, 2016, and 2015, respectively. General and
administrative expense in 2017 was in line with 2016. General and administrative expense decreased in 2016, compared to 2015,
primarily due to lower regional administrative costs, lower contracted services and lower non-cash stock compensation expense,
partially offset by higher legal costs. General and administrative expense as a percentage of Sales declined in 2017 to 3.2%, compared
to 3.5% and 4.0% in 2016 and 2015, respectively.
Impairment of long-lived assets totaled $14, $977 and $56 for 2017, 2016 and 2015, respectively. The 2017 impairments related
to equipment and long lived assets in South America, Australia and Corporate. The 2016 impairments were primarily related to the
impairment of long-lived assets at Yanacocha in South America as a result of the updated long-term mining and closure plans. For
additional information regarding our review of the Yanacocha long-term mining and closure plans, see Note 6 to our Consolidated
Financial Statements. The 2015 impairments were primarily related to assets in South America, non-essential equipment unrelated to
operations at Corporate and other and an intangible asset in Africa.
Other expense, net was $32, $58, and $116 for 2017, 2016, and 2015, respectively. Other expense, net decreased in 2017,
compared to 2016, primarily due to lower severance and outsourcing costs, primarily at Corporate, and lower adjustments to the
contingent consideration and related liabilities associated with the acquisition of the final 33.33% interest in Boddington in June 2009.
Other expense, net decreased in 2016, compared to 2015, primarily due to a charge of $27 from the ratification of the Ghana
Investment Agreement in December 2015, acquisition costs related to CC&V during 2015 and lower power plant costs in Western
Australia.
Other income, net was $54, $69, and $135 for 2017, 2016, and 2015, respectively. Other income, net decreased in 2017,
compared to 2016, primarily due to a prior-year gain of $103 from the sale of the Company’s investment in Regis in March 2016 and
unfavorable fluctuations in foreign currency exchange rates, partially offset by a prior-year loss of $55 associated with debt
repayments in March 2016 and November 2016. Other income, net decreased in 2016, compared to 2015, primarily due to gains of
$108 associated with the sale of certain assets, including Hemlo in March 2015 and EGR in July 2015, a gain of $76 from the
deconsolidation of TMAC in July 2015, a loss of $55 associated with debt repayments in March 2016 and November 2016 and
unfavorable fluctuations in foreign currency exchange rates. These decreases were partially offset by lower other-than-temporary
impairments on marketable security investments and a gain of $103 from the sale of the Company’s investment in Regis in March
2016.
Interest expense, net was $241, $273 and $297 for 2017, 2016 and 2015, respectively. Capitalized interest totaled $22, $33 and
$40 in each year, respectively. Interest expense, net decreased in 2017 compared to 2016 primarily due to reduced debt balances as a
result of the repayment of the 2017 Convertible Senior Notes in 2017 and partial early extinguishment of the 2019, 2022 and 2039
Senior Notes in 2016. Capitalized interest decreased in 2017 compared to 2016 primarily due to the completion of the Long Canyon
and Merian projects in 2016, partially offset by additional interest capitalized for the Subika Underground project and Ahafo Mill
Expansion. Interest expense, net decreased in 2016 compared to 2015 due to reduced debt balances as a result of the partial early
extinguishment of the 2019, 2022 and 2039 Senior Notes and repayment of the 2019 Term Loan in 2016. Capitalized interest
decreased in 2016 compared to 2015 primarily due to the completion of the Turf Vent Shaft project in 2015, partially offset by
additional interest capitalized for the Long Canyon and Merian projects.
57
Income and mining tax expense was $1,125, $563 and $391 for 2017, 2016 and 2015, respectively. The effective tax rate is
driven by a number of factors as illustrated in the table below. The comparability of our income tax expense for the reported periods
has been primarily affected by (i) variations in our income before income taxes; (ii) geographic distribution of that income; (iii)
impacts of enactment of tax reform; (iv) the non-recognition of tax assets; (v) percentage depletion; (vi) and the impact of specific
transactions and assessments. As a result, the effective tax rate will fluctuate, sometimes significantly, year to year. This trend is
expected to continue in future periods.
Income (loss) before income and mining tax and other items . . . .
Tax at statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reconciling items:
Re-measurement due to the Tax Cuts and Jobs Act(1) . . . . . . . . .
Tax restructuring related to the Tax Cuts and Jobs Act (2) . . . . .
Percentage depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance on deferred tax assets . . . . . . . .
Mining and other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. tax effect of noncontrolling interest attributable to non-U.S.
investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign earnings, net of credits . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2017
$
1,092
2016
$
(214)
2015
$
295
35 %
$
(382)
35 %
$
75
35 %
$
(103)
28
36
(7)
7
4
(306)
(395)
81
(78)
(41)
—
—
40
(226)
(29)
—
—
—
—
103 %
1
—
(4)
(1)
(1,125)
$
(100)
17
—
—
(263)%
$
—
—
85
(485)
(61)
(213)
36
—
—
(563)
—
—
(19)
51
20
41
7
(6)
4
133 %
$
—
—
56
(153)
(58)
(120)
(20)
19
(12)
(391)
(1)
Includes the release of a valuation allowance on AMT credits of $48 and elimination of $8 of deferred tax assets due to changes to executive
compensation deductions.
(2) See Note 10 to our Consolidated Financial Statements for further discussion of the impacts of the Tax Cuts and Jobs Act.
The change in the effective tax rate was impacted by the Tax Cuts and Jobs Act (“the Act”) which was enacted on December 22,
2017. The Act significantly changes U.S. income tax law and is the first major overhaul of the federal income tax code in more than
30 years. Key provisions of the Act that impact Newmont include: (i) reduction of the U.S. federal corporate income tax rate from
35% to 21%, (ii) repeal of the Corporate Alternative Minimum Tax (“AMT”) system (iii) replacement of the worldwide taxation
system with a territorial tax system which exempts certain foreign operations from U.S. taxation, and (iv) further limitation on the
deductibility of certain executive compensation. Other provisions of the Act that do not have a current impact on Newmont but could
impact the Company in the future include: (i) modification of earnings calculations for certain foreign subsidiaries that were
previously tax deferred to a one-time tax, (ii) creation of a new minimum tax on certain foreign earnings and a new base erosion anti-
abuse tax, (iii) repeal of the domestic production deductions, (iv) allowance for immediate capital expensing of certain qualified
property, (v) limitation on the deduction for net interest expense incurred by a U.S. corporation, and (vi) modification and/or repeal of
a number of other international provisions.
On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of US GAAP in
situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in
reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, the Company has
calculated the best estimate of the impact of the Act in its year end income tax provision in accordance with the Company’s
understanding of the Act and guidance available as of the date of this filing. The provisional amount related to the re-measurement of
certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future, was $346. The
provisional amount related to restructuring decisions implemented as a result of the Act was $395. The Company also recorded a $48
benefit related to the release of valuation allowance on AMT credits and $8 charge for the write-off of deferred tax assets associated
with deferred compensation plans.
In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (“GILTI”)
provisions of the Act. The GILTI provisions impose a tax on foreign income in excess of a deemed return on tangible assets of foreign
corporations. The guidance indicates that either accounting for deferred taxes related to GILTI inclusions or treating any taxes on
GILTI inclusions as period cost are both acceptable methods subject to an accounting policy election. Effective the first quarter of
2018, the Company will elect to treat any potential GILTI inclusions as a period cost as it is not projecting any material impact from
GILTI inclusions and any deferred taxes related to any inclusion would be immaterial.
58
For additional information regarding our income and mining taxes, including details of our deferred tax assets, see Note 10 to
our Consolidated Financial Statements.
Equity income (loss) of affiliates was $(16), $(13), and $(45) in 2017, 2016, and 2015, respectively. The increased loss in 2017
from 2016 is mainly due to a $5 increase in losses recognized at La Zanja as a result of an impairment of its long-lived assets. The
equity loss from affiliates decreased in 2016 from 2015 primarily due to $30 of losses recognized in 2015 at La Zanja from increased
exploration spending on the Pampa Verde Project.
The details of our Net income (loss) from discontinued operations, net of tax are set forth below:
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Batu Hijau contingent consideration . . . . . . . . . . . . . . . . . .
Batu Hijau operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(44) $
6
—
—
(38) $
Years Ended
December 31,
2017
2016
Increase
Percent
(decrease) Change
6
6
(517)
600
95
(50) $
—
517
(600)
(133) $
N.M.
N.M.
N.M.
(12)%
(71)%
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Batu Hijau operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . .
$
N.M. – Not meaningful.
Years Ended
December 31,
2016
2015
Increase
Percent
(decrease) Change
(50) $
517
(600)
(133) $
27 $
418
—
445 $
(77)
99
(600)
(578)
(285) %
24
N.M.
(130) %
The Holt royalty obligation increased in 2017 primarily due to an increase in short-term gold price and an increase in production
based on gold reserves and resources from Kirkland Lake Gold Ltd., which were updated in March 2017, which resulted in an increase
in the net loss from discontinued operations in 2017. The Holt royalty obligation increased in 2016 primarily due to increases in short-
term gold price and decreases in discount rates, which resulted in an increase in the net loss from discontinued operations in 2016. The
Holt royalty obligation decreased in 2015 primarily due to decreases in short-term gold prices and increases in discount rates, which
resulted in an increase in net income from discontinued operations in 2015.
The Batu Hijau contingent consideration resulting from the Batu Hijau Transaction increased in 2017 compared to 2016
primarily due to an increase in short-term copper price in 2017.
The Batu Hijau Transaction was completed in November 2016. The income from Batu Hijau increased in 2016 compared to
2015 primarily due to higher gold sale volumes, higher average realized gold prices and lower operating costs, partially offset by
lower copper sale volumes and lower realized copper prices.
Newmont recognized a loss on the sale of Batu Hijau of $600 in 2016.
For additional information regarding our discontinued operations, see Note 3 to our Consolidated Financial Statements. For
discussion regarding Batu Hijau’s operating results, see the Discontinued operations section in Results of Consolidated Operations
below.
Net loss (income) attributable to noncontrolling interests, net of tax from continuing operations was $(11), $570, and $140 in
2017, 2016, and 2015, respectively. The income from noncontrolling interests increased in 2017 compared to 2016 due to decreased
losses at Yanacocha, primarily related to the 2016 impairment of long-lived assets, and increased earnings at Merian due to a full year
of production in 2017. The loss from noncontrolling interests increased in 2016 compared to 2015 due to the impairment of long-lived
assets at Yanacocha in 2016.
Other comprehensive income (loss) was $42, $-, and $144 in 2017, 2016, and 2015, respectively. The increase in 2017 from
2016 was primarily due to the change in fair value of marketable securities and pension and other post-retirement benefits, partially
59
offset by a reduced impact from cash flow hedge instruments. The decrease in 2016 from 2015 was primarily due to the sale of Regis
in the 2016 compared to unrealized gains in Regis in 2015.
Results of Consolidated Operations
Gold or Copper
Produced
2016
(ounces in thousands)
2017
2015
Costs Applicable
to Sales (1)
2016
($ per ounce sold)
2015
2017
2017
$
2,024
759
1,641
819
1,643
918
1,665
805
$
710
709
672
655
702
759
630
666
$ 758 $
607
667
522
Depreciation and
Amortization
2016
($ per ounce sold)
207 $
408
135
270
244 $
229
132
276
2015
2017
2015
All-In Sustaining
Costs (2)
2016
($ per ounce sold)
869 $
189 $
361
146
186
895 $
959
823
823
1,052
786
833
979
949
818
718
5,243
4,898
5,031
4,584
$
691
$
682
$ 663 $
216 $
225 $
209 $
924 $
912 $
933
(pounds in millions)
33
80
42
77
($ per pound sold)
($ per pound sold)
($ per pound sold)
$
46
79
1.73
1.37
$
2.48
1.67
$ 1.97 $
1.71
0.46 $
0.27
0.66 $
0.32
0.45
0.31
$
2.09 $
1.69
2.88 $
2.00
2.30
2.06
GOLD
North America . . . . . . . . . . . .
South America . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . .
Total / Weighted Average for
continuing operations . . . .
Attributable to Newmont . .
COPPER
North America . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . .
Total / Weighted Average for
2,211
1,048
1,573
822
5,654
5,266
continuing operations . . . .
113
119
125
$
1.47
$
1.95
$ 1.80 $
0.33 $
0.44 $
0.36 $
1.80 $
2.30 $
2.15
COPPER
North America . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . .
Total / Weighted Average for
(tonnes in thousands)
15
36
19
35
continuing operations . . . .
51
54
21
36
57
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2) All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 74.
2017 compared to 2016
Consolidated gold ounces produced increased 8% due to:
•
•
•
•
higher production from North America due to a full year’s production at Long Canyon, higher ore placement and
recoveries at Valley Leach Fill 2 at CC&V and higher ore grade milled at Carlin and Phoenix, partially offset by lower
ore grades and throughput at Twin Creeks and geotechnical issues at the Silverstar mine at Carlin;
higher production from South America primarily due to a full year’s production at Merian partially offset by lower mill
grade and lower leach tons placed at Yanacocha;
lower production from Australia due to lower ore grade milled at Boddington, Tanami and Kalgoorlie partially offset by
higher mill throughput at Boddington and Tanami. The higher throughput at Tanami was partially offset by the mill
being placed into care and maintenance for 21 days in early 2017 following record high rainfall that blocked transport
routes, limiting access to fuel and other resources; and
consistent production from Africa at both Ahafo and Akyem.
Consolidated copper production decreased 5% primarily due to lower heap leach placement and lower mill grade and
throughput at Phoenix and partially offset by higher production at Boddington from higher mill grade and throughput at Boddington.
Costs applicable to sales per consolidated gold ounce increased 1% due to higher direct operating costs, partially offset by
higher gold ounces sold and lower leach pad inventory adjustments. Costs applicable to sales per consolidated copper pound
decreased 25% primarily due to a lower co-product allocation of costs to copper.
Depreciation and amortization per gold ounce decreased 4% due to higher ounces sold, a lower asset balance at Yanacocha
resulting from an impairment recorded in December 2016, and lower leach pad inventory adjustments. Depreciation and amortization
per consolidated copper pound decreased 25% due to a lower co-product allocation of depreciation and amortization to copper.
All-in sustaining costs per consolidated gold ounce increased 1% primarily due to higher costs applicable to sales per ounce.
All-in sustaining costs per copper pound decreased 22% primarily due to lower costs applicable to sales per pound.
60
2016 compared to 2015
Consolidated gold ounces produced increased 4% due to:
•
•
•
•
higher production from North America due to a full year of operation at CC&V, Long Canyon achieving commercial
production in November 2016, and higher ore tons, grade and leach recoveries at Carlin, partially offset by a planned
stripping campaign at Twin Creeks;
lower production from South America primarily due to lower mill throughput, recovery and grade at Yanacocha,
partially offset by Merian achieving commercial production in October 2016.
lower production at our Australia operations due to the sale of Waihi in October 2015, partially offset by higher
throughput and higher ore grade milled at Kalgoorlie, higher ore tons mined and milled an Tanami, and higher
throughput and mill recovery rates at Boddington; and
higher production from Africa due to higher throughput as a result of higher mill utilization and slightly higher mill
recovery rates, partially offset by lower grades milled and a build-up of mill in-circuit inventory;
Consolidated copper production decreased 5% primarily due to lower heap leach recoveries and lower ore grade milled at
Phoenix and lower ore grade milled at Boddington, partially offset by higher throughput and recovery at Boddington.
Costs applicable to sales per consolidated gold ounce and copper pound increased 3% and 8%, respectively, due to higher leach
pad and stockpile inventory adjustments at Yanacocha and Ahafo and lower ore grade mined and milled, partially offset by higher
ounces sold as a result of more ore tons mined and higher mill throughput.
Depreciation and amortization increased 8% and 22% per gold ounce and copper pound, respectively, due to higher stockpile
inventory adjustments, higher amortization rates, capitalization of additional assets, and lower copper pounds sold.
All-in sustaining costs per consolidated gold ounce decreased 2% primarily due to higher ounces sold and lower sustaining
capital spend. All-in sustaining costs per consolidated copper pound sold increased 7% primarily due to lower copper pounds sold.
North America Operations
Gold or Copper
Produced
2017
2016
2015
2017
GOLD
Carlin . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . .
Long Canyon (3) . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . .
Total / Weighted Average (4) . .
(ounces in thousands)
972
239
375
174
451
2,211
944
209
453
22
396
2,024
886 $
205
471
—
81
1,643 $
2015
2015
2017
Costs Applicable
to Sales (1)
2016
($ per ounce sold)
844 $
802
514
186
553
702 $
823 $
854
611
338
624
710 $
2017
Depreciation and
Amortization
2016
($ per ounce sold)
212 $
251
113
223
276
207 $
228 $
225
170
426
271
244 $
891 $
821
521
—
532
758 $
All-In Sustaining
Costs (2)
2016
($ per ounce sold)
1,048 $
937
613
227
621
869 $
1,030 $
1,034
756
364
729
895 $
2015
1,134
980
653
—
683
979
223 $
212
108
—
232
189 $
COPPER
Phoenix . . . . . . . . . . . . . . . . . .
(pounds in millions)
33
42
($ per pound sold)
46 $
1.73 $
2.48 $ 1.97 $
($ per pound sold)
0.66 $
0.46 $
0.45 $
($ per pound sold)
2.88 $
2.09 $
2.30
COPPER
Phoenix . . . . . . . . . . . . . . . . . .
(tonnes in thousands)
15
19
21
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2) All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 74.
(3) Long Canyon achieved commercial production in November 2016.
(4) All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.
2017 compared to 2016
Carlin, USA. Gold production increased 3% primarily due to higher tons and ore grade mined at Leeville partially offset by
halted mining activity at the Silverstar mine due to the geotechnical issues in the fourth quarter of 2016. Costs applicable to sales per
ounce decreased 2% due to higher ounces sold. Depreciation and amortization per ounce increased 8% primarily due to lower surface
grades mined resulting in inventory drawdowns. All-in sustaining costs per ounce decreased 2% primarily due to lower costs
applicable to sales per ounce.
61
Phoenix, USA. Gold production increased 14% due to higher mill grades, and higher leach placement from mining in the Brooks
pit at Lone Tree. Copper production decreased 21% primarily due to lower copper leach placement and lower mill grade and
throughput. Costs applicable to sales per ounce increased 6% primarily due to a higher co-product allocation of costs to gold partially
offset by higher ounces sold. Costs applicable to sales per pound decreased 30% due to a copper leach pad inventory adjustment in the
prior year, a lower co-product allocation of costs to copper and lower leaching costs as a result of lower acid consumption.
Depreciation and amortization per ounce decreased 10% due to lower amortization rates. Depreciation and amortization per pound
decreased 30% primarily due to a copper leach pad inventory adjustment in the prior year, lower amortization rates and a lower co-
product allocation of depreciation and amortization to copper. All-in sustaining costs per ounce increased 10% primarily due to higher
costs applicable to sales per ounce and higher sustaining capital spend. All-in sustaining costs per pound decreased 27% primarily due
to lower costs applicable to sales per pound.
Twin Creeks, USA. Gold production decreased 17% due to lower ore grade mined, lower mill throughput at the Juniper mill due
to harder ore and lower ore grades processed at the Sage mill to optimize recovery rates. Costs applicable to sales per ounce increased
19% due to lower ounces sold and higher stockpile and leach pad inventory adjustments. Depreciation and amortization per ounce
increased 50% primarily due to lower ounces sold and higher stockpile and leach pad inventory adjustments. All-in sustaining costs
per ounce increased 23% due to the higher costs applicable to sales per ounce and higher sustaining capital.
Long Canyon, USA. Long Canyon achieved commercial production in November 2016.
CC&V, USA. Gold production increased 14% primarily due to a full year of ore placement at the Valley Leach Fill 2 leach pad
and higher mill throughput. Costs applicable to sales per ounce increased 13% primarily due to higher processing costs. Depreciation
and amortization per ounce decreased 2% primarily due to higher ounces sold. All-in sustaining cost per ounce increased 17%
primarily due to higher costs applicable to sales per ounce and higher sustaining capital.
2016 compared to 2015
Carlin, USA. Gold production increased 7% primarily due to higher tons mined at Leeville, higher ore tons and ore grade mined
at Silverstar, and higher heap leach recoveries at Emigrant. Costs applicable to sales per ounce decreased 5% due to lower stockpile
and leach pad inventory adjustments, higher ounces sold and lower waste tons mined. Depreciation and amortization per ounce
decreased 5% primarily due to higher ounces sold. All-in sustaining costs per ounce decreased 8% due to lower costs applicable to
sales per ounce and lower sustaining capital spend.
Phoenix, USA. Gold production increased 2% due to higher production at Lone Tree from mining in the Brooks pit, partially
offset by lower mill recoveries. Copper pounds produced decreased 9% primarily due to lower heap leach recoveries and lower ore
grade milled Costs applicable to sales per ounce decreased 2% primarily due to higher ounces sold at Lone Tree. Costs applicable to
sales per pound increased 26% due to lower copper pounds sold and increased inventory adjustments. Depreciation and amortization
per ounce increased 18% due to the capitalization of additional assets and increased inventory adjustments. Depreciation and
amortization per pound increased 47% due to lower copper pounds sold. All-in sustaining costs per ounce decreased 4% due to higher
ounces sold at Lone Tree. All-in sustaining costs per pound increased 25% primarily due to lower copper pounds sold.
Twin Creeks, USA. Gold production decreased 4% due to a planned stripping campaign at Twin Creeks, partially offset by
higher ore tons mined at Turquoise Ridge. Costs applicable to sales per ounce decreased 1% due to lower inventory adjustments.
Depreciation and amortization per ounce increased 5% primarily due to lower ounces sold. All-in sustaining costs per ounce
decreased 6% due to lower costs applicable to sales per ounce and lower sustaining capital spend.
Long Canyon, USA. Long Canyon achieved commercial production in November 2016. The project was safely completed under
budget and two months ahead of schedule, with over 20,000 gold ounces produced in 2016.
CC&V, USA. We purchased 100% of the Cripple Creek & Victor gold mining business in Colorado from AngloGold Ashanti
Limited in August 2015.
62
South America Operations
Gold Ounces
Produced
2017 2016 2015 2017
GOLD
Yanacocha . . . . . . . . . . . . . . . .
Merian (3) . . . . . . . . . . . . . . . . .
Total / Weighted Average (4) . . . .
Yanacocha (48.65%) (5) . . . . . .
Merian (25.00%) . . . . . . . . . .
Attributable to Newmont . . .
(in thousands)
535
513
1,048
(260)
(128)
660
655
104
759
(319)
(26)
414
$
918 $
—
918
(447)
—
471
Costs Applicable
to Sales (1)
2016
($ per ounce sold)
824 $
342
759 $
939 $
467
709 $
2015
2017
2015
2017
Depreciation and
Amortization
2016
($ per ounce sold)
431 $
122
408 $
250 $
179
229 $
All-In Sustaining
Costs (2)
2016
($ per ounce sold)
1,058 $
374
1,052 $
2015
880
—
949
346 $
—
361
$
1,194 $
572
959 $
607 $
—
607
$
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2) All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 74.
(3) Commercial production at Merian was achieved in October 2016.
(4) All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.
(5)
In December 2017, MYSRL repurchased 5% of its shares held by the International Finance Corporation, increasing Newmont’s ownership in
Yanacocha from 51.35% to 54.05% as of December 31, 2017. For the year, Newmont’s ownership was 51.35%. For further information about
this transaction, see Note 12 to our Consolidated Financial Statements.
2017 compared to 2016
Yanacocha, Peru. Gold production decreased 18% primarily due to lower mill grade, recovery and throughput as well as lower
leach tons placed, partially due to the Yanacocha mine nearing the end of its current mining operations. Costs applicable to sales per
ounce increased 14% due to lower ounces sold and higher processing costs, partially offset by lower leach pad inventory adjustments.
Depreciation and amortization per ounce decreased 42% due a lower asset balance resulting from an impairment recorded in
December 2016 and lower leach pad inventory adjustments, partially offset by lower ounces sold. All-in sustaining costs per ounce
increased 13% primarily due to the higher costs applicable to sales per ounce.
Merian, Suriname. Merian achieved commercial production in October 2016.
2016 compared to 2015
Yanacocha, Peru. Gold production decreased 29% primarily due to lower mill throughput, recovery and grade, and lower leach
tons placed at a lower grade. Costs applicable to sales per ounce increased 36% primarily due to lower ounces sold and higher leach
pad inventory adjustments. Depreciation and amortization per ounce increased 25% due to lower ounces sold and higher leach pad
inventory adjustments. All-in sustaining costs per ounce increased 20% due to higher costs applicable to sales per ounce.
Merian, Suriname. Merian achieved commercial production in October 2016. The project was safely completed under budget
and on schedule, with over 100,000 gold ounces produced in 2016.
63
Australia Operations
Gold or Copper
Produced
Costs Applicable
to Sales (1)
2017 2016 2015
2017
2015
GOLD
Boddington . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . .
Waihi (3) . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . .
Total / Weighted Average (4) . . . .
(ounces in thousands)
787
419
—
367
1,573
800
459
—
382
1,641
794 $
436
119
316
1,665 $
2016
($ per ounce sold)
673 $
518
—
680
630 $
714 $
616
—
645
672 $
Depreciation and
Amortization
2016
2015
2017
All-In Sustaining
Costs (2)
2016
2015
2017
699 $
519
473
855
667 $
($ per ounce sold)
139 $
179
—
50
135 $
143 $
165
—
54
132 $
139 $
189
125
66
146 $
($ per ounce sold)
775 $
739
—
775
786 $
835 $
787
—
734
823 $
799
724
543
965
818
COPPER
Boddington . . . . . . . . . . . . . . . . .
(pounds in millions)
80
77
79 $
($ per pound sold)
1.67 $
1.37 $
1.71 $
($ per pound sold)
0.32 $
0.27 $
0.31 $
($ per pound sold)
2.00 $
1.69 $
2.06
COPPER
Boddington . . . . . . . . . . . . . . . . .
(tonnes in thousands)
36
35
36
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2) All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 74.
(3) The Company sold the Waihi mine in October 2015.
(4) All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.
2017 compared to 2016
Boddington, Australia. Gold production decreased 2% primarily due to lower ore grade milled, partially offset by higher mill
throughput. Copper production increased 4% due to higher mill throughput, partially offset by lower recovery. Costs applicable to
sales per ounce increased 6% due to a higher co-product allocation of costs to gold, higher oil prices and unfavorable Australian dollar
foreign currency exchange rate. Costs applicable to sales per pound decreased 18% primarily due to higher copper pounds sold and a
lower co-product allocation of costs to copper, partially offset by higher oil prices and an unfavourable Australian dollar foreign
currency exchange rate. Depreciation and amortization per ounce increased 3% primarily due to a higher co-product allocation of
depreciation and amortization to gold. Depreciation and amortization per pound decreased 16% due to higher copper pounds sold and
a lower co-product allocation of depreciation and amortization to copper. All-in sustaining costs per ounce increased 8% due to higher
costs applicable to sales per ounce and higher sustaining capital spend. All-in sustaining costs per pound decreased 16% primarily due
to lower costs applicable to sales per pound and lower treatment and refining costs.
Tanami, Australia. Gold production decreased 9% primarily due to lower ore grade mined partially offset by higher mill
throughput as a result of the Tanami Expansion project achieving commercial production during the third quarter of 2017. The higher
throughput was partially offset by the mill being placed into care and maintenance for 21 days in early 2017 following record high
rainfall that blocked transportation routes, limiting access to fuel and other resources. Costs applicable to sales per ounce increased
19% primarily due to lower ounces sold, higher oil prices, an unfavorable Australian dollar foreign currency exchange rate and lower
allocation of costs for deferred mine development. Depreciation and amortization per ounce decreased 8% primarily due to lower
amortization rates. All-in sustaining costs per ounce increased 6% due to higher costs applicable to sales per ounce, partially offset by
lower sustaining capital spend and lower exploration and advanced project spend.
Kalgoorlie, Australia. Gold production decreased 4% primarily due to a draw-down of gold in-circuit inventory in the prior
year, coupled with lower ore grade milled and lower throughput. Mill grade was lower due to a geotechnical event in the first quarter
of 2017 impacting mining rates and grades. Costs applicable to sales per ounce decreased 5% due to a favorable strip ratio, lower
selling costs and lower site support costs, partially offset by lower ounces sold, higher oil prices and an unfavorable Australian dollar
foreign currency exchange rate. Depreciation and amortization per ounce increased 8% due to lower ounces sold. All-in sustaining
costs per ounce decreased 5% due to lower costs applicable to sales per ounce sold and lower treatment and refining costs, partially
offset by higher exploration spend.
2016 compared to 2015
Boddington, Australia. Gold production increased 1% primarily due to higher mill throughput and recovery, partially offset by
lower ore grade milled. Copper production decreased 3% due to lower ore grade milled as a result of lower ore grade mined, partially
offset by higher throughput and recovery. Costs applicable to sales per ounce decreased 4% due to higher ounces sold, lower oil
prices, and stockpile inventory adjustments in the prior year, partially offset by higher mill maintenance costs and a higher co-product
allocation of costs to gold due to changes in the gold and copper revenue percentages. Costs applicable to sales per pound decreased
2% primarily due to lower oil prices, lower co-product allocation of costs to copper due to changes in the gold and copper revenue
percentages and stockpile inventory adjustments in the prior year, partially offset by lower copper pounds sold and higher mill
64
maintenance costs. Depreciation and amortization per ounce was in line with prior year. Depreciation and amortization per pound
increased 3% due to lower copper pounds sold. All-in sustaining costs per ounce decreased 3% due to lower costs applicable to sales
per ounce. All-in sustaining costs per pound decreased 3% due to lower cost applicable to sales per pound.
Tanami, Australia. Gold production increased 5% mainly due to higher throughput as a result of higher ore tons mined, partially
offset by lower ore grade milled. Costs applicable to sales per ounce was in line with prior year primarily due to higher ounces sold
and lower oil prices, mostly offset by higher mining costs due to lower capitalization of mine development, higher paste fill activity
and higher maintenance costs. Depreciation and amortization per ounce decreased 5% primarily due to higher ounces sold. All-in
sustaining costs per ounce increased 2% due to higher sustaining capital per ounce sold, higher advanced projects spend, and higher
brownfield exploration spend.
Waihi, New Zealand. The sale of Waihi to OceanaGold Corporation was completed in October 2015.
Kalgoorlie, Australia. Gold production increased 21% primarily due to higher mill throughput, driven by higher milling rates
and mill utilization, as well as higher ore grade milled. Costs applicable to sales per ounce decreased 20% due to higher ounces sold
and lower oil prices. Depreciation and amortization per ounce decreased 24% due to higher ounces sold and lower amortization rates.
All-in sustaining costs per ounce decreased 20% due to lower costs applicable to sales per ounce and lower sustaining capital spend
per ounce sold.
Africa Operations
2017
GOLD
Ahafo . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . .
Total / Weighted Average (3) . . . . .
Gold Ounces
Produced
Costs Applicable
to Sales (1)
2016
(in thousands)
2015
2017
349
473
822
349
470
819
332 $
473
805 $
2016
($ per ounce sold)
895 $
497
666 $
766 $
573
655 $
620 $
449
522 $
Depreciation and
Amortization
2016
($ per ounce sold)
268 $
269
270 $
206 $
325
276 $
160 $
202
186 $
All-In Sustaining
Costs (2)
2016
($ per ounce sold)
961 $ 1,152 $
664
823 $
584
833 $
892
572
718
2015
2017
2015
2017
2015
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2) All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 74.
(3) All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.
2017 compared to 2016
Ahafo, Ghana. Gold production was in line with the prior year. Costs applicable to sales per ounce decreased 14% primarily due
to lower stockpile inventory adjustments and lower oil prices. Depreciation and amortization per ounce decreased 23% primarily due
to lower stockpile inventory adjustments. All-in sustaining costs per ounce sold decreased 17% primarily due to lower costs applicable
to sales per ounce and lower sustaining capital.
Akyem, Ghana. Gold production increased 1% primarily due to higher mill recovery. Costs applicable to sales per ounce
increased 15% primarily due to stockpile inventory adjustments in current year and an unfavorable strip ratio, partially offset by lower
oil prices. Depreciation and amortization per ounce increased 21% due to stockpile inventory adjustments in the current year. All-in
sustaining costs per ounce increased 14% due to higher costs applicable to sales per ounce, partially offset by lower exploration spend.
2016 compared to 2015
Ahafo, Ghana. Gold production increased 5% due to higher throughput as a result of higher mill utilization and slightly higher
mill recovery rates, partially offset by lower ore grade milled. Costs applicable to sales per ounce increased 44% primarily due to
higher stockpile inventory adjustments, partially offset by higher ounces sold and lower oil prices. Depreciation and amortization per
ounce increased 68% due to higher stockpile inventory adjustments. All-in sustaining costs per ounce increased 29% due to higher
costs applicable to sales per ounce, partially offset by lower sustaining capital spend.
Akyem, Ghana. Gold production decreased 1% due to lower ore grade milled and a build-up of in-circuit inventory, partially
offset by higher throughput and higher mill recovery rates. Costs applicable to sales per ounce increased 11% due to a drawdown of
ore stockpile inventory and higher milling costs, partially offset by lower oil prices. Depreciation and amortization per ounce
increased 33% due to higher amortization rates and capitalization of assets. All-in sustaining costs per ounce increased 2% due to
higher costs applicable to sales per ounce, partially offset by lower sustaining capital spend.
65
Discontinued Operations
GOLD
Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attributable to Newmont (48.5%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COPPER
Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attributable to Newmont (48.5%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COPPER
Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Attributable to Newmont (48.5%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gold or Copper Produced
2015
2016
(ounces in thousands)
701
340
(pounds in millions)
413
200
(tonnes in thousands)
187
91
676
328
494
240
224
109
For additional information regarding our discontinued operation, see Note 3 to our Consolidated Financial Statements.
Foreign Currency Exchange Rates
Foreign currency exchange rates can increase or decrease profit margins and Costs applicable to sales to the extent costs are
paid in foreign currencies. Such fluctuations have not had a material impact on our revenue since gold and copper are sold throughout
the world principally in U.S. dollars. Despite selling gold in London, we have no exposure to the euro or the British pound.
Our foreign operations sell their gold and copper production based on U.S. dollar metal prices. Approximately 32%, 33% and
37% of our Costs applicable to sales were paid in currencies other than the U.S. dollar in 2017, 2016 and 2015, respectively, of which
approximately 27% was denominated in the Australian dollar in the current year. Variations in the local currency exchange rates in
relation to the U.S. dollar at our foreign mining operations increased Costs applicable to sales by $1 per ounce, net of hedging losses,
in 2017 compared to 2016, of which Australia accounted for approximately $3 per ounce of the total increase, which was partially
offset by Suriname of approximately $2 per ounce. Variations in the local currency exchange rates in relation to the U.S. dollar at our
foreign mining operations decreased Costs applicable to sales by $2 per ounce, net of hedging losses, in 2016 compared to 2015, of
which Australia accounted for approximately $1 of the total decrease.
We hedge a portion of our forecasted Australian dollar denominated operating expenditures to reduce variability of our
Australia dollar exposure. Due to the limited nature of the Company’s current Australian hedge program, which extends through
February 2018, increases to the Australian dollar/U.S. dollar exchange rate could result in increased costs. The Company may extend
its Australian dollar hedge program in the future.
66
Liquidity and Capital Resources
We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide
long-term value to our shareholders. Consistent with that strategy, we aim to self-fund development projects and make strategic
partnerships focused on profitable growth, while reducing our debt and returning cash to stockholders through dividends.
At December 31, 2017, we had $3,259 in Cash and cash equivalents, of which $783 was held in foreign subsidiaries the
majority of which is held in U.S. dollar denominated accounts with the remainder in foreign currencies readily convertible to U.S.
dollars. At December 31, 2017, $318 of the consolidated cash and cash equivalents was attributable to noncontrolling interests
primarily related to our Peru and Suriname operations, which is being held to fund operating costs and capital expenditures at those
operations. At December 31, 2017, $697 in consolidated cash and cash equivalents ($386 attributable to Newmont) was held at certain
foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden
upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital
resources from U.S. operations and flow-through foreign subsidiaries are adequate to fund our U.S. operations and corporate activities.
We believe our existing consolidated cash and cash equivalents, available capacity on our revolving credit facility, and cash
generated from continuing operations will be adequate to satisfy working capital needs, fund future growth, meet debt obligations, pay
dividends and meet other liquidity requirements for the foreseeable future. At December 31, 2017, no borrowings were outstanding
under our revolving credit facility.
Our financial position was as follows:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Borrowing capacity on revolving credit facility expiring May 2022 . . . . . . . . . . . . . . $
3,259 $
4,065
806 $
2,920 $
2,756
4,615
1,859
2,920
At December 31,
2017
2016
Liquidity Overview
During 2017, we had a net increase in cash, cash equivalents and restricted cash of $516 primarily resulting from operating cash
flows from continuing operations of $2,350, partially offset by $866 for additions to property, plant and mine development, $580 of
debt repayments, purchases of investments of $130, dividends paid to common stockholders of $134, net distributions to our
noncontrolling partners at Merian of $84 and $48 for acquisitions of noncontrolling interests.
During 2016, we had a net increase in cash, cash equivalents and restricted cash of $394 primarily resulting from operating cash
flows from continuing operations of $1,923 in addition to proceeds received from the sale of our economic interest in PTNNT of $920
and the sale of our investment in Regis of $184. These inflows were partially offset by $1,312 of debt repayments, $1,133 for
additions to property, plant and mine development, $146 for dividends paid to noncontrolling interests at Yanacocha and $67 for
dividends paid to common stockholders.
During 2015, we had a net increase in cash, cash equivalents and restricted cash of $128 primarily resulting from operating cash
flows from continuing operations of $1,588 in addition to net proceeds received from a common stock issuance of $675, funding from
noncontrolling interest of $109, proceeds received from the sales of the Waihi mine of $77 and proceeds from the sale of our
ownership interest in EGR of $70. These inflows were partially offset by $1,311 for additions to property, plant and mind
development, $819 for the acquisition of CC&V, $229 of debt repayments and $52 for dividends paid to common stockholders.
67
Our Consolidated Statements of Cash Flows are summarized as follows:
Net cash provided by (used in) operating activities of continuing operations . . . . $
Net cash provided by (used in) operating activities of discontinued operations. . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . $
2016
Years Ended December 31,
2017
2,350 $ 1,923 $ 1,588
557
869
2,335 $ 2,792 $ 2,145
(15)
2015
Net cash provided by (used in) investing activities of continuing operations . . . . $
Net cash provided by (used in) investing activities of discontinued operations . . .
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . $
(961) $
—
(961) $
(34) $ (1,951)
(46)
(90)
(80) $ (2,041)
Net cash provided by (used in) financing activities of continuing operations . . . . $
Net cash provided by (used in) financing activities of discontinued operations. . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . $
(864) $ (1,486) $
—
(331)
(864) $ (1,817) $
527
(225)
302
Operating Activities
Net cash provided by (used in) operating activities of continuing operations was $2,350 in 2017, an increase of $427 from 2016
primarily due to higher sales volumes and higher average realized metal prices, partially offset by higher direct operating costs. Net
cash provided by (used in) operating activities of continuing operations was $1,923 in 2016, an increase of $335 from 2015 primarily
due to higher average realized gold prices resulting in higher sales, partially offset by unfavorable movements in working capital,
slightly higher operating costs and lower average realized copper prices.
Investing Activities
Net cash provided by (used in) investing activities of continuing operations was $(961) in 2017 compared to $(34) and $(1,951)
in 2016 and 2015, respectively, for the reasons explained below.
68
Additions to property, plant and mine development were $866, $1,133 and $1,311, during 2017, 2016 and 2015, respectively, as
follows:
Years Ended December 31,
2015
2016
2017
North America:
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South America:
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia:
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waihi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa:
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrual basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in accrued capital expenditures and other non-cash
$
$ 174
25
52
10
33
9
303
$ 173
22
37
119
59
9
419
270
25
48
128
66
8
545
100
356
456
58
98
12
21
5
194
83
221
304
65
145
—
20
4
234
51
105
156
80
108
—
21
5
214
181
26
207
10
890
87
22
109
11
1,077
92
45
137
38
1,370
adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(24)
$ 866
56
$ 1,133
(59)
$ 1,311
Of the $866 of capital expenditures during the year ended December 31, 2017, $290 was for development projects
predominantly comprised of:
•
•
•
•
$22 in North America primarily related to Twin Creeks Underground and Long Canyon;
$81 in South America primarily related to Merian and Quecher Main;
$49 in Australia primarily related to the Tanami Expansion project; and
$138 in Africa primarily related to the Subika Underground project and Ahafo Mill Expansion.
Not included in the capital expenditures in 2017 outlined above is $14 accrued under build-to-suit arrangements for the
development of the Tanami Power project.
The remaining $600 was for sustaining capital expenditures predominantly comprised of:
•
•
•
•
$281 in North America primarily related to surface and underground mine development, tailings facility construction
and capitalized component purchases;
$75 in South America primarily related to the tailings expansion and mobile mining equipment additions, the upgrade
of water treatment facilities, a tailings facility expansion, capitalized component purchases and infrastructure
improvements;
$165 in Australia primarily related to equipment and capitalized component purchases, underground mine development
and tailings and support facilities; and
$69 in Africa primarily related to water treatment plant construction, a tailings facility expansion, purchase of mining
equipment and capitalized component purchases.
69
Of the $1,133 of capital expenditures during the year ended December 31, 2016, $499 was for development of projects
predominantly comprised of:
•
•
•
•
$184 in North America primarily related to the Long Canyon project and the CC&V Expansion project;
$222 in South America primarily related to the Merian project;
$61 in Australia primarily related to the Tanami Expansion project; and
$31 in Africa primarily related to the Subika Underground project and Ahafo Mill Expansion.
The remaining $578 was for sustaining capital expenditures predominantly comprised of:
•
•
•
•
$235 in North America primarily related to surface and underground mine development, tailings facility construction
and capitalized component purchases;
$82 in South America primarily related to construction of water treatment facilities, a tailings facility expansion,
capitalized component purchases and infrastructure improvements;
$173 in Australia primarily related to equipment and capitalized component purchases, underground mine
development, and tailings and support facility construction; and
$78 in Africa primarily related to water treatment plant construction, a tailings facility expansion, purchase of mining
equipment and capitalized component purchases.
Of the $1,311 of capital expenditures during the year ended December 31, 2015, $722 was for development of projects
predominantly comprised of:
•
•
•
•
$271 in North America primarily related to the Turf Vent Shaft, Long Canyon and CC&V expansion projects;
$359 in South America primarily related to the Merian project;
$28 in Australia primarily related to the Tanami Expansion project; and
$36 in Africa primarily related to the Subika Underground project and the Ahafo Mill Expansion.
The remaining $648 was for sustaining capital expenditures predominantly comprised of:
•
•
•
•
$274 in North America primarily related to surface and underground mine development, tailings facility construction
and capitalized component purchases;
$97 in South America primarily related to capitalized component purchases and infrastructure improvements;
$166 in Australia primarily related to equipment and capitalized component purchases, underground mine development
and tailings and support facility construction; and
$101 in Africa primarily related to providing supplemental power capacity, a tailings facility expansion and capitalized
component purchases.
Refer to the discussion above regarding our global project pipeline discussion for additional details.
During 2017, 2016 and 2015, $77, $99 and $107, respectively, of drilling and related costs were capitalized and included in
mine development costs. These capitalized costs included $22 at North America, $6 at South America, $44 at Australia and $5 at
Africa in 2017; $35 at North America, $7 at South America, $52 at Australia and $5 at Africa in 2016 and $41 at North America, $7 at
South America, $50 at Australia and $9 at Africa in 2015.
During 2017, 2016 and 2015, $11, $86 and $12, respectively, of pre-stripping costs were capitalized and included in mine
development costs. Pre-stripping costs included the Goldstar pit at Carlin and Globe Hill at CC&V in North America in 2017;
Goldstar pit at Carlin in North America and the Merian 2 pit at Merian in South America in 2016; and the Mega pit at Twin Creeks in
North America in 2015.
Purchases of investments and Proceeds from sales of investments. During 2017, we paid $109 for a 19.9% interest in
Continental Gold Inc., who is developing the high-grade Buriticá gold project in Columbia, and we paid $9 for interests in various
other exploration phase companies in North America and South America. During 2017, 2016 and 2015, we paid $12, $15 and $17,
respectively, for additional shares in TMAC. During 2017, we also received $19 from the redemption of marketable debt securities
and $15 from the sale of approximately two-thirds of our interest in Novo Resources Corp. During 2016, we received $195 of which,
$184 was from the sale of Regis, $8 was from the redemption of the Company’s auction rate securities, and $3 from the sale of various
other investments. During 2015, we received proceeds of $29 primarily from the sale of a certificate of deposit for $25.
70
Acquisitions, net. During 2017, 2016 and 2015, we paid $15, $6 and $-, respectively, in contingent payments in accordance with
the 2009 Boddington acquisition agreement. During 2015, we purchased the CC&V gold mining business in Colorado from
AngloGold Ashanti Limited for $819 ($821 consideration, net of $2 cash acquired) and we purchased $4 in other mineral interests.
Proceeds from sale of other assets. During 2017, we received $5 from miscellaneous asset sales. During 2016, we received $9
from the settlement of various royalties on mineral interests. During 2015, we received $203 of which, $77 was from the sale of Waihi
($102 cash proceeds, net of $25 cash transferred), $70 was from the sale of EGR ($119 cash proceeds, net of $49 cash transferred),
$38 from the sale of Hemlo mineral rights in Ontario, Canada, $12 from the sale of the Valmy property in Nevada and $6 from the
sale of Relief Canyon in Nevada.
Proceeds from sale of Batu Hijau. During 2016, we received $920 from the sale of our economic interest in PTNNT.
Financing Activities
Net cash provided by (used in) financing activities of continuing operations was $(864) in 2017, compared to $(1,486) and $527
in 2016 and 2015, respectively, for the reasons explained below.
Repayment of debt. During 2017, we used $580 for debt repayments, of which $575 related to the 2017 Convertible Senior
Notes. During 2016, we repaid $1,312, of which $1,033 related to reductions of Senior Notes and $275 related to the payoff of the
2019 Term Loan. During 2015, we repaid $229, of which $200 was for the 2019 Term Loan and $25 was for the Ahafo Project
Finance Facility in Africa.
Scheduled minimum debt repayments are $- in 2018, $626 in 2019, $- in 2020, $- in 2021, $992 in 2022 and $2,474 thereafter.
We generally expect to be able to fund maturities of debt from Net cash provided by (used in) operating activities, current
investments, existing cash balances and available credit facilities. Depending upon market conditions and strategic considerations, we
may choose to refinance some maturing debt in the capital markets.
For further information about our debt facilities, refer to Note 22 of the Consolidated Financial Statements.
Distributions to noncontrolling interests. During 2017, distributions of $178 were made by Merian to Staatsolie Maatschappij
Suriname N.V. (“Staatsolie”) (a company wholly owned by the Republic of Suriname). During 2016, distributions of $3 were made by
Merian to Staatsolie. There were no distributions prior to Merian achieving commercial production in October 2016.
Funding from noncontrolling interests. During 2017, we received $94, in funding related to the ongoing operations of Merian
from Staatsolie. During 2016, we received $66 in funding for the development and ongoing operations of Merian from Staatsolie.
During 2015, we received $109, in funding for the development of Merian from Staatsolie.
Dividends paid to common stockholders. We paid annual dividends of $0.250, $0.125 and $0.100 per common share during
2017, 2016 and 2015, respectively. On February 20, 2018, we declared a regular fourth quarter dividend of $0.14 per share, payable
March 22, 2018 to holders of record at the close of business on March 8, 2018. Total dividends paid to common stockholders were
$134, $67 and $52 in 2017, 2016 and 2015, respectively.
Acquisitions of noncontrolling interests. During 2017, 2016 and 2015, we paid $48, $19 and $8, respectively, for the acquisition
of additional interests in existing investments.
Payments for withholding of employee taxes related to stock-based compensation. During 2017, 2016 and 2015, we paid $13, $6
and $-, respectively, for withholding of employee taxes related to stock-based compensation.
Dividends paid to noncontrolling interests. During 2016, Yanacocha paid dividends to noncontrolling interests of $146.
Proceeds from stock issuance, net. During 2015, we received $675 in net proceeds from a common stock issuance. Proceeds
from the common stock sale, supplemented with cash from our balance sheet, were used for the acquisition of CC&V.
Proceeds from sale of noncontrolling interests. During 2015, we received $37 of which $34 related to TMAC’s private
placement to raise funds and $3 was for the remaining payment from the government of Suriname for the 25% noncontrolling interest
in Merian.
71
Discontinued Operations
Net cash provided by (used in) operating activities of discontinued operations was $(15) in 2017, compared to $869 and $557 in
2016 and 2015, respectively. Of these amounts, $-, $880 and $569, respectively, related to the operating activities at Batu Hijau, $(12),
$(11) and $(12), respectively, related to payments on the Holt property royalty and $(3) was paid in 2017 related to closing costs for
the sale of Batu Hijau.
Net cash provided by (used in) investing activities of discontinued operations was $- in 2017, compared to $(46) and $90 in
2016 and 2015, respectively, and related entirely to Additions to property, plant and mine development at Batu Hijau.
Net cash provided by (used in) financing activities of discontinued operations was $- in 2017, compared to $(331) and $225 in
2016 and 2015, respectively. During 2016, we repaid $330 extinguishing the PTNNT revolving credit facility. During 2015, we repaid
$225 to reduce the PTNNT revolving credit facility.
Corporate Revolving Credit Facilities
In May 2011, we entered into a $2,500 revolving credit facility, which was increased to $3,000 in May 2012. The facility is with
a syndicate of financial institutions, provides for borrowings in U.S. dollars and contains a letter of credit sub-facility. Facility fees
vary based on the credit ratings of our senior, uncollateralized, non-current debt. Borrowings under the facility bear interest at a
market based rate plus a margin determined by our credit rating. During 2017, the credit facility was extended to May 25, 2022. Fees
and other debt issuance costs related to the extension of the facility were recorded as a reduction to the carrying value of debt and will
be amortized over the term of the facility. At December 31, 2017, we had no borrowings outstanding under the facility. There was $80
outstanding on the sub-facility for letters of credit at December 31, 2017 and 2016.
In September 2013, we entered into a Letter of Credit Facility Agreement (“LC Agreement”) with BNP Paribas, New York
Branch. The LC Agreement established a $175 letter of credit facility for a three year period to support reclamation obligations. In
2017, the agreement was extended to September 30, 2020. The LC Agreement had a balance of $172 at December 31, 2017 and 2016.
Debt Covenants
Our senior notes and revolving credit facilities contain various covenants and default provisions including payment defaults,
limitation on liens, leases, sales and leaseback agreements and merger restrictions.
The corporate revolving credit facility contains a financial ratio covenant requiring us to maintain a net debt (total debt net of
cash and cash equivalents) to total capitalization ratio of less than or equal to 62.50% in addition to the covenants noted above.
Furthermore, the corporate revolving credit facility contains covenants limiting the sale of all or substantially all of our assets, certain
change of control provisions and a negative pledge on certain assets.
At December 31, 2017 and 2016, we were in compliance with all debt covenants and provisions related to potential defaults.
Shelf Registration Statement
In September 2015, we filed with the SEC a shelf registration statement on Form S-3 which enables us to issue an indeterminate
number or amount of common stock, preferred stock, debt securities, guarantees of debt securities and warrants from time to time at
indeterminate prices. It also included the resale of an indeterminate amount of common stock, preferred stock and debt securities from
time to time upon exercise of warrants or conversion of convertible securities.
72
Contractual Obligations
Our contractual obligations at December 31, 2017 are summarized as follows:
Payments Due by Period
Total
Contractual Obligations
Debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,266 $
Capital lease and other financing obligations(2) . . . . . . . . . . .
Remediation and reclamation liabilities (3) . . . . . . . . . . . . . . .
Employee-related benefits (4) . . . . . . . . . . . . . . . . . . . . . . . . .
Uncertain income tax liabilities and interest (5) . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minimum royalty payments (6) . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
3,748
902
46
26
84
1,545
674
$ 14,317 $
Less than
More than
1 Year 1-3 Years 4-5 Years 5 Years
205 $ 1,169 $ 1,277 $ 4,615
—
4
3,109
104
465
113
46
—
2
8
—
31
112
271
147
185
883 $ 2,924 $ 1,976 $ 8,534
19
324
186
—
14
53
875
284
3
211
138
—
2
—
287
58
(1) Debt includes principal of $4,092 and estimated interest payments of $3,174 on Senior Notes, assuming no early extinguishment.
(2) Capital leases and other financing obligations include principal of $11 and estimated interest payments of $1 on capital lease obligations and
minimum payments related to build-to-suit lease obligations of $14 on the Tanami Power project.
(3) Mining operations are subject to extensive environmental regulations in the jurisdictions in which they operate. Pursuant to environmental
regulations, we are required to close our operations and reclaim and remediate the lands that operations have disturbed. The estimated
undiscounted cash outflows of these Reclamation and remediation liabilities are reflected here. For more information regarding reclamation and
remediation liabilities, see Note 6 to the Consolidated Financial Statements.
(4) Contractual obligations for Employee-related benefits include severance, workers’ participation, pension and other benefit plans. Pension plan
benefit payments beyond 2026 cannot be reasonably estimated given variable market conditions and actuarial assumptions and are not included.
(5) We are unable to reasonably estimate the timing of our uncertain income tax liabilities and interest payments beyond 2018 due to uncertainties
in the timing of the effective settlement of tax positions.
(6) Minimum royalty payments are related to continuing operations and are presented net of recoverable amounts.
(7) Purchase obligations are not recorded in the Consolidated Financial Statements. Purchase obligations represent contractual obligations for
purchase of power, materials and supplies, consumables, inventories and capital projects.
(8) Other includes service contracts and other obligations not recorded in our Consolidated Financial Statements of $431, as well as the Holt royalty
of $243 accrued in Other current liabilities and Other noncurrent liabilities.
Off-Balance Sheet Arrangements
We have the following off-balance sheet arrangements: operating leases (as discussed in Note 27 to the Consolidated Financial
Statements) and $2,321 of outstanding surety bonds, bank letters of credit and bank guarantees (see Note 29 to the Consolidated
Financial Statements). At December 31, 2017, $80 of the $3,000 corporate revolving credit facility was used to secure the issuance of
letters of credit, primarily supporting reclamation obligations.
We also have sales agreements or non-binding commitments to sell copper and gold concentrates at market prices as follows (in
thousands of tons):
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2018
49
217
266
2019
64
80
144
2020
80
80
160
2021
96
60
156
2022
83
60
143
Thereafter
144
180
324
Environmental
Our mining and exploration activities are subject to various federal and state laws and regulations governing the protection of
the environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot
predict the full amount of such future expenditures. At December 31, 2017 and 2016, $1,965 and $1,792, respectively, were accrued
for reclamation costs relating to currently or recently producing or development stage mineral properties, of which $59 and $28,
respectively, were classified as current liabilities.
73
In addition, we are involved in several matters concerning environmental obligations associated with former mining activities.
Based upon our best estimate of our liability for these matters, $289 and $298 were accrued for such obligations at December 31, 2017
and 2016, respectively. We spent $44, $30 and $41 during 2017, 2016, and 2015, respectively, for environmental obligations related to
the former, primarily historic, mining activities and have classified $41 and $33 as a current liability at December 31, 2017 and 2016,
respectively. Expenditures during 2017 relate primarily to project spending at the Midnite mine site and Dawn mill site in Washington
State. Expenditures during 2016 relate primarily to project spending at the Midnite mine site and Dawn mill site and the Con mine in
Canada. Expenditures during 2015 relate primarily to the settlement payment with the State of California related to the Empire Star
mine remediation and past costs, and project spending at the Midnite mine site and Dawn mill site and the Con mine.
During the year ended 2017, 2016, and 2015, capital expenditures were approximately $78, $79, and $137, respectively, to
comply with environmental regulations.
For more information on the Company’s reclamation and remediation liabilities, see Notes 6 and 29 to the Consolidated
Financial Statements.
Forward-Looking Statements
The foregoing discussion and analysis, as well as certain information contained elsewhere in this Annual Report, contain
“forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor created thereby. See the discussion in
Forward-Looking Statements in Item 1, Business.
Non-GAAP Financial Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning
prescribed by U.S. 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. Unless otherwise noted, we present the Non-GAAP
financial measures of our continuing operations in the tables below. For additional information regarding our discontinued operations,
see Note 3 to the Consolidated Financial Statements.
74
Earnings before interest, taxes and depreciation and amortization and Adjusted earnings before interest, taxes and
depreciation and amortization
Management uses Earnings before interest, taxes and depreciation and amortization (“EBITDA”) and EBITDA adjusted for
non-core or certain items that have a disproportionate impact on our results for a particular period (“Adjusted EBITDA”) as non-
GAAP measures to evaluate the Company’s operating performance. EBITDA and Adjusted EBITDA do not represent, and should not
be considered an alternative to, net income (loss), operating income (loss), or cash flow from operations as those terms are defined by
GAAP, and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. Although Adjusted EBITDA and
similar measures are frequently used as measures of operations and the ability to meet debt service requirements by other companies,
our calculation of Adjusted EBITDA is not necessarily comparable to such other similarly titled captions of other companies. The
Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our
operating results in the same manner as our management and Board of Directors. Management’s determination of the components
of Adjusted EBITDA are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining
industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to EBITDA and Adjusted EBITDA as follows:
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . . . . . . $
Net income (loss) attributable to noncontrolling interests . . . . . . . . . . . . . . . . .
Net loss (income) from discontinued operations (1) . . . . . . . . . . . . . . . . . . . . . .
Equity loss (income) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments:
Reclamation and remediation charges (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on asset and investment sales (3) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition cost adjustments (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on debt repayment (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
La Quinua leach pad revision (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of investments (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on deconsolidation of TMAC (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana Investment Agreement (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
$
Years Ended December 31,
2017
2016
2015
(98) $
11
38
16
1,125
1,249
241
220
(627) $
84
(296)
(445)
133
45
13
391
563
1,102
1,220
297
273
2,582 $ 1,279 $ 1,694
88 $
64 $
(23)
14
14
2
—
—
—
—
—
145
(118)
34
56
19
—
—
115
(76)
27
2,653 $ 2,365 $ 1,896
(108)
32
977
10
55
32
—
—
—
(1) Net loss (income) from discontinued operations relates to (i) adjustments in our Holt royalty obligation, presented net of tax expense (benefit)
of $(24), $(19) and $11, respectively, and (ii) Batu Hijau operations, presented net of tax expense (benefit) of $-, $309 and $253, respectively,
(iii) adjustments to our Batu Hijau Contingent Consideration, presented net of tax expense (benefit) of $4, $- and $-, respectively, and (iv) the
loss on sale of Batu Hijau, which has been recorded on an attributable basis. For additional information regarding our discontinued operations,
see Note 3 to our Consolidated Financial Statements.
(2) Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to reclamation and remediation plans and
cost estimates at the Company’s former historic mining operations. The 2017 charges include adjustments at the Rain, Midnite, Resurrection and
San Luis remediation and closure sites in December 2017. The 2016 charges include adjustments to reclamation liabilities associated with the
review of the Yanacocha long-term mining and closure plans in December 2016. The 2015 charges include adjustments to remediation liabilities
associated with revisions to the remediation plan of the Midnite mine in December 2015.
(3) Loss (gain) on asset and investment sales, included in Other income, net, primarily represents a gain from the exchange of our interest in the
Fort á la Corne joint venture for equity ownership in Shore Gold in June 2017, the sale of our holdings in Regis in March 2016, income recorded
in September 2016 associated with contingent consideration from the sale of certain properties in Nevada during the first quarter of 2015, sales
of Hemlo mineral rights in Canada and the Relief Canyon mine in Nevada in March 2015, gains related to the sale of our holdings in EGR in
July 2015 and Waihi in October 2015 and other gains or losses on asset sales.
(4) Restructuring and other, included in Other expense, net, primarily represents certain costs associated with severance and outsourcing costs and
(5)
system integration costs during 2016 related to our acquisition of CC&V in August 2015.
Impairment of long-lived assets, included in Impairment of long-lived assets, represents non-cash write-downs of long-lived assets. The 2016
impairments include $970 related to long-lived assets in Yanacocha in December 2016. See Note 7 to our Consolidated Financial Statements for
further information.
(6) Acquisition cost adjustments, included in Other expense, net, represent net adjustments to the contingent consideration and related liabilities
associated with the acquisition of the final 33.33% interest in Boddington in June 2009. The 2015 adjustments also include costs related to our
acquisition of CC&V in August 2015.
75
(7) Loss on debt repayment, included in Other income, net, represents the impact from the debt tender offer on our 2019 Senior Notes and 2039
Senior Notes in March 2016 and the debt tender offer on our 2022 Senior Notes in November 2016.
(8) La Quinua leach pad revision, included in Costs applicable to sales, represents a significant write-down of the estimated recoverable ounces at
Yanacocha in September 2016.
Impairment of investments, included in Other income, net, represents other-than-temporary impairments on equity and cost method investments.
(9)
(10) Gain on deconsolidation of TMAC, included in Other income, net, resulted from the deconsolidation of TMAC in July 2015.
(11) Ghana Investment Agreement, included in Other expense, net, represents a charge from the ratification of revised investment agreements by
Ghana’s Parliament in December 2015. For additional information regarding the Ghana Investment Agreement, see the discussion under the
Africa Section of Item 2, Properties.
Adjusted net income (loss)
Management uses Adjusted net income (loss) to evaluate the Company’s operating performance and for planning and
forecasting future business operations. The Company believes the use of Adjusted net income (loss) allows investors and analysts to
understand the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the sale of
products, by excluding certain items that have a disproportionate impact on our results for a particular period. Adjustments to
continuing operations are presented before tax and net of our partners’ noncontrolling interests, when applicable. The tax effect of
adjustments is presented in the Tax effect of adjustments line and is generally calculated using the Company’s statutory effective tax
rate of 35%. Management’s determination of the components of Adjusted net income (loss) are evaluated periodically and based, in
part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont
stockholders is reconciled to Adjusted net income (loss) as follows:
Years Ended December 31,
2017
2016
2015
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . . . . . . $
(98)
$
(627)
$
220
Net loss (income) attributable to Newmont stockholders from discontinued
operations (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
407
(221)
Net income (loss) attributable to Newmont stockholders from continuing
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation charges, net (2) . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on asset and investment sales (3) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other, net (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets, net (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition cost adjustments (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on debt repayment (7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
La Quinua leach pad revision, net (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of investments (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on deconsolidation of TMAC (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana Investment Agreement (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect of adjustments (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment to equity method investment (13) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Re-measurement due to the Tax Cuts and Jobs Act (14) . . . . . . . . . . . . . . . . . . .
Tax restructuring related to the Tax Cuts and Jobs Act (15) . . . . . . . . . . . . . . . .
Valuation allowance and other tax adjustments (16) . . . . . . . . . . . . . . . . . . . . . .
Adjusted net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(60)
64
(23)
9
13
2
—
—
—
—
—
(22)
7
306
395
89
780
(220)
51
(108)
27
516
10
55
26
—
—
—
(238)
—
—
—
500
619
$
(1)
145
(118)
29
42
19
—
—
115
(76)
27
(64)
—
—
—
209
327
$
76
Net income (loss) per share, basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net loss (income) attributable to Newmont stockholders from discontinued
Years Ended December 31,
2017
(0.18)
2016
2015
$
(1.18)
$
0.43
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.07
0.77
(0.43)
Net income (loss) attributable to Newmont stockholders from continuing
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on asset and investment sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition cost adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on debt repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
La Quinua leach pad revision, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on deconsolidation of TMAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana Investment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect of adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment to equity method investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Re-measurement due to the Tax Cuts and Jobs Act . . . . . . . . . . . . . . . . . . . . .
Tax restructuring related to the Tax Cuts and Jobs Act . . . . . . . . . . . . . . . . . . .
Valuation allowance and other tax adjustments . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted net income (loss) per share, basic (17) . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.11)
0.12
(0.04)
0.01
0.01
—
—
—
—
—
—
(0.03)
0.01
0.57
0.74
0.18
1.46
(0.41)
0.09
(0.20)
0.05
0.97
0.02
0.11
0.05
—
—
—
(0.46)
—
—
—
0.95
1.17
$
—
0.28
(0.22)
0.05
0.08
0.03
—
—
0.22
(0.14)
0.05
(0.13)
—
—
—
0.41
0.63
$
Net income (loss) per share, diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.18)
$
(1.18)
$
0.43
Net loss (income) attributable to Newmont stockholders from discontinued
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.07
0.77
(0.43)
Net income (loss) attributable to Newmont stockholders from continuing
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (gain) on asset and investment sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring and other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition cost adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on debt repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
La Quinua leach pad revision, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on deconsolidation of TMAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana Investment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax effect of adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustment to equity method investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Re-measurement due to the Tax Cuts and Jobs Act . . . . . . . . . . . . . . . . . . . . .
Tax restructuring related to the Tax Cuts and Jobs Act . . . . . . . . . . . . . . . . . . .
Valuation allowance and other tax adjustments . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted net income (loss) per share, diluted (17) . . . . . . . . . . . . . . . . . . . . . . . . . $
(0.11)
0.12
(0.04)
0.01
0.01
—
—
—
—
—
—
(0.03)
0.01
0.57
0.74
0.18
1.46
(0.41)
0.09
(0.20)
0.05
0.97
0.02
0.11
0.05
—
—
—
(0.46)
—
—
—
0.94
1.16
$
—
0.28
(0.22)
0.05
0.08
0.03
—
—
0.22
(0.14)
0.05
(0.13)
—
—
—
0.41
0.63
$
Weighted average common shares (millions):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
533
535
530
532
516
516
(1) Net loss (income) from discontinued operations relates to (i) adjustments in our Holt royalty obligation, presented net of tax expense (benefit)
of $(24), $(19) and $11, respectively, and (ii) Batu Hijau operations, presented net of tax expense (benefit) of $-, $309 and $253, respectively,
and loss (income) attributable to noncontrolling interests of $-, $(274) and $(224), respectively, (iii) adjustments to our Batu Hijau Contingent
Consideration, presented net of tax expense (benefit) of $4, $- and $-, respectively, and (iv) the loss on sale of Batu Hijau, which has been
recorded on an attributable basis. For additional information regarding our discontinued operations, see Note 3 to our Consolidated Financial
Statements.
(2) Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to reclamation and remediation plans and
cost estimates at the Company’s former historic mining operations. The 2017 charges include adjustments at the Rain, Midnite, Resurrection and
San Luis remediation and closure sites in December 2017. The 2016 charges include adjustments to reclamation liabilities associated with the
review of the Yanacocha long-term mining and closure plans in December 2016. The 2015 charges include adjustments to remediation liabilities
associated with revisions to the remediation plan of the Midnite mine in December 2015. Amounts are presented net of income (loss)
attributable to noncontrolling interests of $-, $(37) and $-, respectively.
(3) Loss (gain) on asset and investment sales, included in Other income, net, primarily represents a gain from the exchange of our interest in the
77
Fort á la Corne joint venture for equity ownership in Shore Gold in June 2017, the sale of our holdings in Regis in March 2016, income recorded
in September 2016 associated with contingent consideration from the sale of certain properties in Nevada during the first quarter of 2015, sales
of Hemlo mineral rights in Canada and the Relief Canyon mine in Nevada in March 2015, gains related to the sale of our holdings in EGR in
July 2015 and Waihi in October 2015 and other gains or losses on asset sales.
(4) Restructuring and other, included in Other expense, net, primarily represents certain costs associated with severance and outsourcing costs and
(5)
system integration costs during 2016 related to our acquisition of CC&V in August 2015. Amounts are presented net of income (loss)
attributable to noncontrolling interests of $(5), $(5) and $(5), respectively.
Impairment of long-lived assets, included in Impairment of long-lived assets, represents non-cash write-downs of long-lived assets. The 2016
impairments include $970 related to long-lived assets in Yanacocha in December 2016. Amounts are presented net of income (loss) attributable
to noncontrolling interests of $(1), $(461) and $(14), respectively. See Note 7 to our Consolidated Financial Statements for further information.
(6) Acquisition cost adjustments, included in Other expense, net, represent net adjustments to the contingent consideration and related liabilities
associated with the acquisition of the final 33.33% interest in Boddington in June 2009. The 2015 adjustments also include costs related to our
acquisition of CC&V in August 2015.
(7) Loss on debt repayment, included in Other income, net, represents the impact from the debt tender offer on our 2019 Senior Notes and 2039
Senior Notes in March 2016 and the debt tender offer on our 2022 Senior Notes in November 2016.
(8) La Quinua leach pad revision, included in Costs applicable to sales and Depreciation and amortization, represents a significant write-down of
the estimated recoverable ounces at Yanacocha in September 2016. Amounts are presented net of income (loss) attributable to noncontrolling
interests of $-, $(25) and $-, respectively.
Impairment of investments, included in Other income, net, represents other-than-temporary impairments on equity and cost method investments.
(9)
(10) Gain on deconsolidation of TMAC, included in Other income, net, resulted from the deconsolidation of TMAC in July 2015.
(11) Ghana Investment Agreement, included in Other expense, net, represents a charge from the ratification of revised investment agreements by
Ghana’s Parliament in December 2015. For additional information regarding the Ghana Investment Agreement, see the discussion under the
Africa Section of Item 2, Properties.
(12) The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (2)
through (11), as described above, and are calculated using the Company's statutory tax rate of 35%.
(13) Adjustment to equity method investment, included in Equity income (loss) of affiliates and presented net of tax expense (benefit) of $(3), $- and
$-, respectively, represents non-cash write-downs of long-lived assets recorded at Minera La Zanja S.R.L. (“La Zanja”) in December 2017. For
further information about our equity method investment in La Zanja, see Note 11 to our Consolidated Financial Statements.
(14) Re-measurement due to the Tax Cuts and Jobs Act, included in Income and mining tax benefit (expense), represents the provisional re-
measurement of our U.S. deferred tax assets and liabilities from 35% to the reduced tax rate of 21% of $346 and $8 for changes in executive
compensation deductions, partially offset by the release of a valuation allowance on alternative minimum tax credits of $48. For further
information about the impact of the Tax Cuts and Jobs Act, see Note 10 to our Consolidated Financial Statements.
(15) Tax restructuring related to the Tax Cuts and Jobs Act, included in Income and mining tax benefit (expense), represents provisional changes
resulting from restructuring our holding of non-U.S. operations for U.S. federal income tax purposes. For further information about the impact
of the Tax Cuts and Jobs Act, see Note 10 to our Consolidated Financial Statements.
(16) Valuation allowance and other tax adjustments, included in Income and mining tax benefit (expense), predominantly represent adjustments to
remove the impact of our valuation allowances for items such as foreign tax credits, alternative minimum tax credits, capital losses and
disallowed foreign losses. We believe that these valuation allowances cause significant fluctuations in our financial results that are not indicative
of our underlying financial performance. The adjustments during 2017 are due to an increase to the valuation allowance on credit carryovers of
$94, a decrease to the valuation allowance carried on the deferred tax asset for investments of $12 and other tax adjustments of $7. The
adjustments during 2016 are due to an increase to the valuation allowance on the deferred tax asset related to the investment in Yanacocha of
$288, a tax restructuring of $170, a decrease in the valuation allowance on capital loss carryover of $169, a carryback of 2015 tax loss to prior
years of $124, an increase to the valuation allowance on tax credit carryovers of $70 and other tax adjustments of $17. The adjustments
during 2015 are due to an increase in the valuation allowance on the deferred tax asset related to the investment in the Nimba project of $147, an
increase to the valuation allowance on tax credit carryovers of $83, a decrease in the valuation allowance on capital loss carryovers of $68 and
other tax adjustments of $47.
(17) Per share measures may not recalculate due to rounding.
Free Cash Flow
Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is
Net cash provided by (used in) operating activities less Net cash provided by (used in) operating activities of discontinued operations
less Additions to property, plant and mine development as presented on the Consolidated Statements of Cash Flows. The Company
believes Free Cash Flow is also useful as one of the bases for comparing the Company’s performance with its competitors. Although
Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies,
the Company’s calculation of Free Cash Flow is not necessarily comparable to such other similarly titled captions of other companies.
The presentation of non-GAAP Free Cash Flow is not meant to be considered in isolation or as an alternative to net income as
an indicator of the Company’s performance, or as an alternative to cash flows from operating activities as a measure of liquidity as
those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. The
Company’s definition of Free Cash Flow is limited in that it does not represent residual cash flows available for discretionary
expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations
78
or payments made for business acquisitions. Therefore, the Company believes it is important to view Free Cash Flow as a measure
that provides supplemental information to the Company’s Consolidated Statements of Cash Flows.
The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to Net cash provided by (used
in) operating activities, which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow,
as well as information regarding Net cash provided by (used in) investing activities and Net cash provided by (used in) financing
activities.
Years Ended December 31,
2016
2017
2015
Less: Net cash used in (provided by) operating activities of discontinued operations . .
Net cash provided by (used in) operating activities of continuing operations . . . . . . . . . .
Less: Additions to property, plant and mine development . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,335 $ 2,792 $ 2,145
(557)
(869)
1,923
1,588
(866) (1,133) (1,311)
277
Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,484 $
15
2,350
790 $
Net cash provided by (used in) investing activities (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (961) $
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (864) $ (1,817) $
(80) $ (2,041)
302
(1) Net cash provided by (used in) investing activities includes Additions to property, plant and mine development, which is included in the
Company’s computation of Free Cash Flow.
Costs applicable to sales per ounce/pound
Costs applicable to sales per ounce/pound are non-GAAP financial measures. These measures are calculated by dividing the
costs applicable to sales of gold and copper by gold ounces or copper pounds sold, respectively. These measures are calculated for the
periods presented on a consolidated basis. Costs applicable to sales per ounce/pound statistics are intended to provide additional
information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating
profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.
The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measures.
2017
Costs applicable to sales . . . . . . . . . . . . . . . . . . . . . . . $ 3,875 $ 3,547 $ 3,347 $ 163 $ 225 $ 231
Gold/Copper sold (thousand ounces/million pounds) .
129
Costs applicable to sales per ounce/pound (3) . . . . . . . . $
663 $ 1.47 $ 1.95 $ 1.80
691 $
682 $
5,199
5,052
5,605
2017
111
116
Gold (1)
Years Ended December 31,
2015
2016
Copper (2)
Years Ended December 31,
2015
2016
Includes by-product credits of $51, $44 and $40 in 2017, 2016 and 2015, respectively.
Includes by-product credits of $4, $6 and $5 in 2017, 2016 and 2015, respectively.
(1)
(2)
(3) Per ounce and per pound measures may not recalculate due to rounding.
All-In Sustaining Costs
Newmont has worked to develop a metric that expands on GAAP measures, such as cost of goods sold, and non-GAAP
measures, such as Costs applicable to sales per ounce, to provide visibility into the economics of our mining operations related to
expenditures, operating performance and the ability to generate cash flow from our continuing operations.
Current GAAP-measures used in the mining industry, such as cost of goods sold, do not capture all of the expenditures incurred
to discover, develop and sustain production. Therefore, we believe that all-in sustaining costs is a non-GAAP measure that provides
additional information to management, investors and analysts that aid in the understanding of the economics of our operations and
performance compared to other producers and in the investor’s visibility by better defining the total costs associated with production.
All-in sustaining cost (“AISC”) amounts are intended to provide additional information only and do not have any standardized
meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined
under GAAP. Other companies may calculate these measures differently as a result of differences in the underlying accounting
79
principles, policies applied and in accounting frameworks such as in International Financial Reporting Standards (“IFRS”), or by
reflecting the benefit from selling non-gold metals as a reduction to AISC. Differences may also arise related to definitional
differences of sustaining versus development capital activities based upon each company’s internal policies.
The following disclosure provides information regarding the adjustments made in determining the all-in sustaining costs
measure:
Costs applicable to sales. Includes all direct and indirect costs related to current production incurred to execute the current mine
plan. We exclude certain exceptional or unusual amounts from Costs applicable to sales (“CAS”), such as significant revisions to
recovery amounts. CAS includes by-product credits from certain metals obtained during the process of extracting and processing the
primary ore-body. CAS is accounted for on an accrual basis and excludes Depreciation and amortization and Reclamation and
remediation, which is consistent with our presentation of CAS on the Consolidated Statements of Operations. In determining AISC,
only the CAS associated with producing and selling an ounce of gold is included in the measure. Therefore, the amount of gold CAS
included in AISC is derived from the CAS presented in the Company’s Consolidated Statements of Operations less the amount of
CAS attributable to the production of copper at our Phoenix and Boddington mines. The copper CAS at those mine sites is disclosed
in Note 5 to the Consolidated Financial Statements. The allocation of CAS between gold and copper at the Phoenix and Boddington
mines is based upon the relative sales value of gold and copper produced during the period.
Reclamation costs. Includes accretion expense related to Asset Retirement Obligation (“ARO”) and the amortization of the
related Asset Retirement Cost (“ARC”) for the Company’s operating properties. Accretion related to the ARO and the amortization of
the ARC assets for reclamation does not reflect annual cash outflows but are calculated in accordance with GAAP. The accretion and
amortization reflect the periodic costs of reclamation associated with current production and are therefore included in the measure.
The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold
and copper at the Phoenix and Boddington mines.
Advanced projects, research and development and exploration. Includes incurred expenses related to projects that are designed
to increase or enhance current production and exploration. We note that as current resources are depleted, exploration and advanced
projects are necessary for us to replace the depleting reserves or enhance the recovery and processing of the current reserves. As this
relates to sustaining our production, and is considered a continuing cost of a mining company, these costs are included in the AISC
measure. These costs are derived from the Advanced projects, research and development and Exploration amounts presented in the
Consolidated Statements of Operations less the amount attributable to the production of copper at our Phoenix and Boddington mines.
The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold
and copper at the Phoenix and Boddington mines.
General and administrative. Includes costs related to administrative tasks not directly related to current production, but rather
related to support our corporate structure and fulfill our obligations to operate as a public company. Including these expenses in the
AISC metric provides visibility of the impact that general and administrative activities have on current operations and profitability on
a per ounce basis.
Other expense, net. We exclude certain exceptional or unusual expenses from Other expense, net, such as restructuring, as these
are not indicative to sustaining our current operations. Furthermore, this adjustment to Other expense, net is also consistent with the
nature of the adjustments made to Net income (loss) attributable to Newmont stockholders as disclosed in the Company’s non-GAAP
financial measure Adjusted net income (loss). The allocation of these costs to gold and copper is determined using the same allocation
used in the allocation of CAS between gold and copper at the Phoenix and Boddington mines.
Treatment and refining costs. Includes costs paid to smelters for treatment and refining of our concentrates to produce the
salable metal. These costs are presented net as a reduction of Sales on our Consolidated Statements of Operations.
Sustaining capital. We determined sustaining capital as those capital expenditures that are necessary to maintain current
production and execute the current mine plan. Capital expenditures to develop new operations, or related to projects at existing
operations where these projects will enhance production or reserves, are generally considered development. We determined the
classification of sustaining and development capital projects based on a systematic review of our project portfolio in light of the nature
of each project. Sustaining capital costs are relevant to the AISC metric as these are needed to maintain the Company’s current
operations and provide improved transparency related to our ability to finance these expenditures from current operations. The
allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and
copper at the Phoenix and Boddington mines.
80
Advanced
Projects,
Research and
Development
and
Reclamation
Costs
Applicable
General
and
Other
Expense,
to Sales (1)(2)(3) Costs (4)
Exploration(5) Administrative Net (6)
Treatment
and
Refining
Costs
Sustaining
Capital (7)
All-In
Sustaining (000)/Pounds
Costs
Ounces
(millions) Sold oz/lb (8)
All-In
Sustaining
Costs per
Years Ended
December 31, 2017
Gold
Carlin . . . . . . . . . . . . . . . $
Phoenix . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . .
Long Canyon . . . . . . . . . .
CC&V . . . . . . . . . . . . . . .
Other North America . . . . .
North America . . . . . . . .
795 $
181
226
59
285
—
1,546
6 $
5
3
1
3
—
18
18 $
4
9
—
10
49
90
Yanacocha . . . . . . . . . . . .
Merian . . . . . . . . . . . . . .
Other South America . . . . .
South America . . . . . . . .
Boddington . . . . . . . . . . .
Tanami . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . .
Other Australia . . . . . . . . .
Australia . . . . . . . . . . .
Ahafo . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . .
Other Africa . . . . . . . . . . .
Africa . . . . . . . . . . . . . .
504
238
—
742
562
251
234
—
1,047
268
272
—
540
66
2
—
68
6
2
3
—
11
6
13
—
19
25
14
59
98
2
4
9
25
40
16
3
21
40
3 $
1
2
—
1
—
7
4
—
12
16
—
1
—
10
11
1
—
6
7
— $
— $
1
1
—
—
1
3
4
—
—
4
—
—
—
(1)
(1)
3
1
—
4
9
—
—
1
—
10
—
—
—
—
21
—
1
—
22
—
—
—
—
174 $
17
38
3
33
9
274
38
37
—
75
66
63
19
4
152
43
26
—
69
996
218
279
63
333
59
1,948
641
291
71
1,003
657
321
266
38
1,282
337
315
27
679
967 $
210
369
174
457
—
2,177
537
509
—
1,046
787
408
363
—
1,558
350
474
—
824
1,030
1,034
756
364
729
—
895
1,194
572
—
959
835
787
734
—
823
961
664
—
823
—
924
Corporate and Other . . . . .
Total Gold . . . . . . . . . . . . $
—
3,875 $
—
116 $
53
321 $
195
236 $
6
16 $
—
32 $
10
580 $
264
5,176
—
5,605 $
Copper
Phoenix . . . . . . . . . . . . . . $
Boddington . . . . . . . . . . .
Total Copper . . . . . . . . . . $
55 $
108
163 $
2 $
1
3 $
1 $
—
1 $
1 $
—
1 $
— $
—
— $
1 $
12
13 $
7 $
13
20 $
67
134
201
32 $
79
111 $
2.09
1.69
1.80
Consolidated . . . . . . . . . . $
4,038 $
119 $
322 $
237 $
16 $
45 $
600 $
5,377
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2)
(3)
Includes by-product credits of $55 and excludes co-product copper revenues of $315.
Includes stockpile and leach pad inventory adjustments of $65 at Carlin, $30 at Twin Creeks, $53 at Yanacocha, $22 at Ahafo and $28 at
Akyem.
(4) Reclamation costs include operating accretion and amortization of asset retirement costs of $84 and $35, respectively, and exclude non-
operating accretion and reclamation and remediation adjustments of $21 and $72, respectively.
(5) Advanced projects, research and development and Exploration of $23 at Long Canyon, $16 at Yanacocha, $17 at Tanami, $8 at Ahafo and $7 at
Akyem are recorded in “Other” of the respective region for development projects.
(6) Other expense, net is adjusted for restructuring and other costs of $14 and acquisition cost adjustments of $2.
(7) Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $266. The following are major
development projects: Long Canyon, Merian, Quecher Main, Tanami Expansions, Tanami Power, Subika Underground and Ahafo Mill
Expansion.
(8) Per ounce and per pound measures may not recalculate due to rounding.
81
Advanced
Projects,
Research and
Development
and
Reclamation
Costs
Applicable
General
and
Other
Expense,
to Sales (1)(2)(3) Costs (4)
Exploration(5) Administrative Net (6)
Treatment
and
Refining
Costs
Sustaining
Capital (7)
All-In
Sustaining (000)/Pounds
Costs
Ounces
(millions) Sold oz/lb (8)
All-In
Sustaining
Costs per
Years Ended
December 31, 2016
Gold
Carlin . . . . . . . . . . . . . . . $
Phoenix . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . .
Long Canyon . . . . . . . . . .
CC&V . . . . . . . . . . . . . . .
Other North America . . . .
North America . . . . . . . .
797 $
164
234
4
216
—
1,415
5 $
5
3
—
4
—
17
Yanacocha . . . . . . . . . . . .
Merian . . . . . . . . . . . . . .
Other South America . . . .
South America . . . . . . . .
Boddington . . . . . . . . . . .
Tanami . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . .
Other Australia . . . . . . . . .
Australia . . . . . . . . . . . .
Ahafo . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . .
Other Africa . . . . . . . . . . .
Africa . . . . . . . . . . . . . .
493
34
—
527
530
238
257
—
1,025
313
235
—
548
57
—
—
57
6
3
5
—
14
6
8
—
14
19 $
1
8
—
11
32
71
35
3
57
95
1
13
5
8
27
28
8
2
38
5 $
1
1
—
2
—
9
7
—
6
13
—
—
—
15
15
—
—
5
5
— $
— $
1
—
—
—
5
6
—
—
—
—
—
—
—
5
5
1
1
—
2
8
—
—
—
—
8
—
—
—
—
22
—
7
—
29
—
—
—
—
163 $
12
33
1
10
7
226
82
—
—
82
51
85
19
6
161
54
24
—
78
989
192
279
5
243
44
1,752
674
37
63
774
610
339
293
34
1,276
402
276
7
685
944 $
205
455
22
391
—
2,017
637
99
—
736
787
459
378
—
1,624
349
473
—
822
1,048
937
613
227
621
—
869
1,058
374
—
1,052
775
739
775
—
786
1,152
584
—
833
Corporate and Other . . . . .
Total Gold . . . . . . . . . . . . $
—
3,515 $
—
102 $
51
282 $
190
232 $
3
16 $
—
37 $
10
557 $
254
4,741
—
5,199 $
—
912
Copper
Phoenix . . . . . . . . . . . . . . $
Boddington . . . . . . . . . . .
Total Copper . . . . . . . . . . $
99 $
126
225 $
3 $
1
4 $
— $
—
— $
1 $
—
1 $
— $
—
— $
3 $
13
16 $
9 $
12
21 $
115
152
267
40 $
76
116 $
2.88
2.00
2.30
Consolidated . . . . . . . . . . $
3,740 $
106 $
282 $
233 $
16 $
53 $
578 $
5,008
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2)
(3)
Includes by-product credits of $50 and excludes co-product copper revenues of $250.
Includes stockpile and leach pad inventory adjustments of $77 at Carlin, $18 at Twin Creeks, $117 at Yanacocha and $71 at Ahafo. Total
stockpile and leach pad inventory adjustments at Yanacocha of $151 were adjusted above by $32 related to a significant write-down of
recoverable ounces at the La Quinua Leach Pad in the third quarter of 2016.
(4) Reclamation costs include operating accretion and amortization of asset retirement costs of $64 and $42, respectively, and exclude non-
operating accretion and reclamation and remediation adjustments of $16 and $99, respectively.
(5) Advanced projects, research and development and Exploration of $20 at Long Canyon and $21 at Merian are recorded in “Other” of the
respective region for development projects.
(6) Other expense, net is adjusted for restructuring costs and other of $32 and acquisition cost adjustments of $10.
(7) Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $555. The following are major
development projects during the period: Merian, Long Canyon, Tanami Expansion and CC&V Expansion.
(8) Per ounce and per pound measures may not recalculate due to rounding.
82
Advanced
Projects,
Research and
Development
and
Reclamation
Costs
Applicable
General
and
Other
Expense,
to Sales (1)(2)(3) Costs (4)
Exploration(5) Administrative Net (6)
Treatment
and
Refining
Costs
Sustaining
Capital (7)
All-In
Sustaining (000)/Pounds
Costs
Ounces
(millions) Sold oz/lb (8)
All-In
Sustaining
Costs per
790 $
163
246
44
—
1,243
4 $
4
4
2
—
14
16 $
2
8
3
30
59
7 $
2
2
—
—
11
188 $
15
47
7
8
265
1,005
195
309
56
41
1,606
886 $
199
473
82
—
1,640
1,134
980
653
683
—
979
Year Ended
December 31, 2015
Gold
Carlin . . . . . . . . . . . . . . . $
Phoenix . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . .
CC&V (9) . . . . . . . . . . . . .
Other North America . . . . .
North America . . . . . . . .
Yanacocha . . . . . . . . . . . .
Other South America . . . . .
South America . . . . . . . .
Boddington . . . . . . . . . . .
Tanami . . . . . . . . . . . . . .
Waihi (10) . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . .
Other Australia . . . . . . . . .
Australia . . . . . . . . . . . .
Ahafo . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . .
Other Africa . . . . . . . . . . .
Africa . . . . . . . . . . . . . .
564
—
564
570
225
55
272
—
1,122
206
212
—
418
97
—
97
9
3
2
5
—
19
7
6
—
13
37
58
95
2
7
3
3
5
20
24
8
2
34
15
4
19
—
1
—
1
17
19
1
—
9
10
— $
— $
1
2
—
3
6
3
2
5
—
—
—
—
14
14
1
—
—
1
8
—
—
—
8
—
—
—
24
—
—
5
—
29
—
—
—
—
97
—
97
47
78
3
21
6
155
57
44
—
101
813
64
877
652
314
63
307
42
1,378
296
270
11
577
924
—
924
816
434
116
318
—
1,684
332
472
—
804
880
—
949
799
724
543
965
—
818
892
572
—
718
—
933
Corporate and Other . . . . .
Total Gold . . . . . . . . . . . . $
—
3,347 $
—
143 $
72
280 $
181
240 $
10
36 $
—
37 $
10
628 $
273
4,711
—
5,052 $
Copper
Phoenix . . . . . . . . . . . . . . $
Boddington . . . . . . . . . . .
Total Copper . . . . . . . . . . $
91 $
140
231 $
3 $
2
5 $
1 $
1
2 $
1 $
—
1 $
— $
—
— $
3 $
15
18 $
9 $
11
20 $
108
169
277
47 $
82
129 $
2.30
2.06
2.15
Consolidated . . . . . . . . . . $
3,578 $
148 $
282 $
241 $
36 $
55 $
648 $
4,988
(1) Excludes Depreciation and amortization and Reclamation and remediation.
(2)
(3)
(4) Reclamation costs include operating accretion and amortization of asset retirement costs of $63 and $85, respectively, and exclude non-
Includes by-product credits of $45 and excludes co-product copper revenues of $280.
Includes stockpile and leach pad inventory adjustments of $116 at Carlin, $14 at Twin Creeks, $77 at Yanacocha and $19 at Boddington.
operating accretion and reclamation and remediation adjustments of $15 and $175, respectively.
(5) Advanced projects, research and development and Exploration of $22 at Long Canyon and $12 at Merian are recorded in “Other” of the
respective region for development projects.
(6) Other expense, net is adjusted for restructuring and other costs of $34, the Ghana Investment Agreement payment of $27 and acquisition cost
adjustments of $19.
(7) Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $663. The following are major
development projects during the period: Turf Vent Shaft, Merian, Long Canyon and CC&V expansion.
(8) Per ounce and per pound measures may not recalculate due to rounding.
(9) The Company acquired CC&V in August 2015.
(10) The Company sold the Waihi mine in October 2015.
Accounting Developments
For a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements, see
Note 2 to the Consolidated Financial Statements.
Critical Accounting Policies
Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty
regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. Our
discussion of financial condition and results of operations is based upon the information reported in our Consolidated Financial
Statements. The preparation of these Consolidated Financial Statements in conformity with U.S. generally accepted accounting
principles (“GAAP”) requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenues,
and expenses, as well as the disclosure of contingent assets and liabilities as of the date of our financial statements. We base our
assumptions and estimates on historical experience and various other sources that we believe to be reasonable under the
83
circumstances. Actual results may differ from the estimates we calculate due to changes in circumstances, global economics and
politics, and general business conditions. A summary of our significant accounting policies is detailed in Note 2 to the Consolidated
Financial Statements. We have outlined below those policies identified as being critical to the understanding of our business and
results of operations and that require the application of significant management judgment.
Depreciation and amortization
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are
capitalized and depreciated using the straight-line method at rates sufficient to amortize such costs over the estimated future lives of
such facilities or equipment and their components. These lives do not exceed the estimated mine life based on proven and probable
reserves as the useful lives of these assets are considered to be limited to the life of the relevant mine.
Costs incurred to develop new properties are capitalized as incurred where it has been determined that the property can be
economically developed based on the existence of proven and probable reserves. At our surface mines, these costs include costs to
further delineate the ore body and remove overburden to initially expose the ore body. At our underground mines, these costs include
the cost of building access ways, shaft sinking and access, lateral development, drift development, ramps and infrastructure
development. All such costs are amortized using the units-of-production (“UOP”) method over the estimated life of the ore body based
on estimated recoverable ounces to be produced from proven and probable reserves.
Major mine development costs incurred after the commencement of production are amortized using the UOP method based on
estimated recoverable ounces to be produced from proven and probable reserves. To the extent that such costs benefit the entire ore
body, they are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of the entire ore body.
Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that block or area are amortized over the
estimated recoverable ounces or pounds in proven and probable reserves of that specific ore block or area.
Capitalized asset retirement costs incurred are amortized according to how the related assets are being depreciated. Open pit and
underground mining costs are amortized using the UOP method based on recoverable ounces by source. Other costs, including
leaching facilities, tailing facilities, and mills and other infrastructure costs, are amortized using the straight-line method over the same
estimated future lives of the associated assets.
The calculation of the UOP rate of amortization, and therefore the annual amortization charge to operations, could be materially
impacted to the extent that actual production in the future is different from current forecasts of production based on proven and
probable reserves. This would generally occur to the extent that there were significant changes in any of the factors or assumptions
used in determining reserves. These changes could include: (i) an expansion of proven and probable reserves through exploration
activities; (ii) differences between estimated and actual costs of production, due to differences in grade, metal recovery rates and
foreign currency exchange rates; and (iii) differences between actual commodity prices and commodity price assumptions used in the
estimation of reserves. If reserves decreased significantly, amortization charged to operations would increase; conversely, if reserves
increased significantly, amortization charged to operations would decrease. Such changes in reserves could similarly impact the useful
lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine, which in turn is limited to the
life of the proven and probable reserves.
The expected useful lives used in depreciation and amortization calculations are determined based on applicable facts and
circumstances, as described above. Significant judgment is involved in the determination of useful lives, and no assurance can be
given that actual useful lives will not differ significantly from the useful lives assumed for the purpose of depreciation and
amortization calculations.
Carrying value of stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Mine sequencing may
result in mining material at a faster rate than can be processed. We generally process the highest ore grade material first to maximize
metal production; however, a blend of gold ore stockpiles may be processed to balance hardness and/or metallurgy in order to
maximize throughput and recovery. Processing of lower grade stockpiled ore may continue after mining operations are completed.
Sulfide copper ores are subject to oxidation over time which can reduce expected future recoveries. Stockpiles are measured by
estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay
data), and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified
by periodic surveys. Costs are added to stockpiles based on current mining costs, including applicable overhead and depreciation and
amortization relating to mining operations and removed at each stockpile’s average cost per recoverable unit as material is processed.
84
We record stockpiles at the lower of average cost or net realizable value, and carrying values are evaluated at least quarterly.
Net realizable value represents the estimated future sales price based on short-term and long-term metals price assumptions that are
applied to expected short-term (12 months or less) and long-term sales from stockpiles, less estimated costs to complete production
and bring the product to sale. The primary factors that influence the need to record write-downs of stockpiles include declines in short-
term or long-term metals prices, increases in costs for production inputs such as labor, fuel and energy, materials and supplies, as well
as realized ore grades and recovery rates. We recorded write-downs to reduce the carrying value of stockpiles to net realizable value of
$134, $144 and $70 in 2017, 2016 and 2015, respectively, as components of Cost applicable to sales and Depreciation and
amortization. The significant assumption in determining the stockpile net realizable value for each mine site at December 31, 2017 is a
long-term gold price of $1,300 per ounce. A decrease of $100 per ounce in the long-term gold price assumption could result in a write-
down to the carrying value of stockpiles of up to approximately $150.
Other less significant assumptions include future operating and capital costs, metal recoveries, production levels, commodity
prices, proven and probable reserve quantities, engineering data and other factors unique to each operation based on the life of mine
plans, as well as a long-term copper price of $3.00 per pound and a U.S. to Australian dollar long-term exchange rate of $0.80. If
short-term and long-term commodity prices decrease, estimated future processing costs increase, or other negative factors occur, it
may be necessary to record a write-down of ore on stockpiles. A high degree of judgment is involved in determining such assumptions
and estimates and no assurance can be given that actual results will not differ significantly from those estimates and assumptions.
The following is a summary of the carrying value of our stockpiles:
At December 31,
2016
2017
($ in millions)
At December 31,
2016
2017
($ per ounce)
Gold
$
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
236 $
21
333
57
114
25
340
4
125
409
63
253 $
31
328
82
147
27
312
19
113
386
114
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,727 $ 1,812 $
228 $
346
234
283
516
274
316
618
98
410
226
262 $
228
458
223
434
456
192
299
572
93
376
342
262
Copper
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
14 $
91
105 $
5 $
82
87 $
0.80 $
0.69
0.57 $
1.05
0.65
0.57
At December 31,
2016
2017
($ in millions)
At December 31,
2016
2017
($ per pound)
85
The following is a summary of the current carrying value and estimated future cash and non-cash processing costs of our
stockpiles:
At December 31, 2017
($ per ounce)
Estimated
Total
Current
Carrying
Future
Processing
Value
Costs
Estimated
Production
Costs
Gold
$
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
228 $
346
234
283
516
274
316
618
98
410
226
262 $
868 $
651
740
663
771
630
900
223
1,046
884
1,066
874 $
1,096
997
974
946
1,287
904
1,216
841
1,144
1,294
1,292
1,136
At December 31, 2017
($ per pound)
Estimated
Total
Current
Carrying
Future
Processing
Value
Costs
Estimated
Production
Costs
Copper
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Weighted Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.80 $
0.69
0.57 $
1.51 $
1.97
1.90 $
2.31
2.66
2.47
Carrying value of ore on leach pads
Ore on leach pads represent ore that has been mined and placed on leach pads where a solution is applied to the surface of the
heap to dissolve the gold or copper. Costs are added to ore on leach pads based on current mining costs, including applicable
depreciation and amortization relating to mining operations. Costs are removed from ore on leach pads as ounces are recovered based
on the average cost per estimated recoverable ounce of gold or pound of copper on the leach pad.
Estimates of recoverable ore on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons
added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore
type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year
thereafter until the leaching process is complete.
Although the quantities of recoverable ore placed on the leach pads are reconciled by comparing the grades of ore placed on
pads to the quantities of metal actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the
ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are
refined based on actual results over time. Historically, our operating results have not been materially impacted by variations between
the estimated and actual recoverable quantities of metal on our leach pads. Variations between actual and estimated quantities
resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a
prospective basis. We recorded write-downs to reduce the carrying value of leach pads to net realizable value of $141, $270 and $272
in 2017, 2016 and 2015, respectively, as components of Cost applicable to sales and Depreciation and amortization. The significant
assumption in determining the net realizable value for each mine site at December 31, 2017 is a long-term gold price of $1,300 per
ounce. A decrease of $100 per ounce in the long-term gold price assumption could result in a write-down to the carrying value of
leach pads of up to approximately $50.
86
Other less significant assumptions include future operating and capital costs, metal recoveries, production levels, proven and
probable reserve quantities, engineering data and other factors unique to each operation based on the life of mine plans, as well as a
long-term copper price of $3.00 per pound. If short-term and long-term commodity prices decrease, estimated future processing costs
increase, or other negative factors occur, it may be necessary to record a write-down of ore on leach pads to net realizable value.
The following is a summary of the carrying value of our ore on leach pads:
Gold
At December 31,
2017
2016
($ in millions)
At December 31,
2016
2017
($ per ounce)
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 205 $ 168 $ 606 $
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
7
34
257
156
310
331
774
403
890
4
—
9
287
220
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 659 $ 688 $ 541 $
523
520
—
630
429
1,012
552
Copper
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 33 $ 40 $ 1.38 $ 1.08
The following is a summary of the current carrying value and estimated future cash and non-cash processing costs of our ore on
leach pads:
At December 31, At December 31,
2017 2016 2017
2016
($ in millions)
($ per pound)
At December 31, 2017
($ per ounce)
Estimated Total
Estimated
Current Future
Carrying Processing Production
Value
Costs
Costs
Gold
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Weighted Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
606 $
310
331
774
403
890
541 $
674 $
766
945
132
760
359
656 $
1,280
1,076
1,276
906
1,163
1,249
1,197
At December 31, 2017
($ per pound)
Estimated Total
Estimated
Current Future
Carrying Processing Production
Value
Costs
Costs
Copper
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.38 $
1.38 $
2.76
Carrying value of long-lived assets
We review and evaluate our long-lived assets for impairment at least annually, or more frequently when events or changes in
circumstances indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based
on the estimated fair value of the long-lived assets being tested for impairment and their carrying amounts. Fair value is typically
determined through the use of an income approach utilizing estimates of discounted pre-tax future cash flows or a market approach
utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements.
87
Occasionally, such as when an asset is held for sale, market prices are used. We believe our estimates and models used to determine
fair value are similar to what a market participant would use.
The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of our
mining operations are derived from current business plans, which are developed using short-term price forecasts reflective of the
current price environment and our projections for long-term average metal prices. In addition to short- and long-term metal price
assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral reserves
estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable estimates; estimated
future closure costs; and the use of appropriate discount rates.
The significant assumption in determining the future cash flows for each mine site at December 31, 2017 is a long-term gold
price of $1,300 per ounce. A decrease of $100 per ounce in the long-term gold price assumption could result in an impairment of our
long lived assets of up to approximately $1,500 before consideration of other value beyond proven and probable reserves which may
significantly decrease the amount of any potential impairment charge.
Other less significant assumptions include proven and probable mineral reserve estimates, value beyond proven and probable
estimates, the timing and cost to develop and produce the reserves, commodity-based and other input costs, future closure costs and
discount rates unique to each operation, as well as a long-term copper price of $3.00 per pound and U.S. to Australian dollar long-term
exchange rate of $0.80.
During 2017, 2016 and 2015, we recorded impairments of $14, $977, and $56, respectively, to reduce the carrying value of
long-lived assets in Impairment of long-lived assets. Refer to Note 7 of the Consolidated Financial Statements for further information
regarding impairments.
As discussed above under Depreciation and amortization, various factors could impact our ability to achieve our forecasted
production schedules from proven and probable reserves which could impact the carrying value of our long-lived assets. The ability to
achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to
those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of
confidence that the identified mineralized material could ultimately be mined economically. Assets classified as exploration potential
have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological
confidence and economic modeling.
Events that could result in additional impairment of our long-lived assets include, but are not limited to, decreases in future
metal prices, unfavorable changes in foreign exchange rates, increases in future closure costs, and any event that might otherwise have
a material adverse effect on mine site cash flows.
Assets held for sale and discontinued operations
We report a business as held for sale when management has approved or received approval to sell the business and is committed
to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is probable and
recognition of a completed sale is expected to occur within one year, the sales price is reasonable in relation to its current fair value
and actions required to complete the sale indicate that it is unlikely that significant changes to the plan will be made or the plan will be
withdrawn, in accordance with Accounting Standard Codification (“ASC”) 360, Property, Plant and Equipment. A business classified
as held for sale is recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the
business exceeds its estimated fair value less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as
held for sale are segregated in the current and prior balance sheets in the period in which the business is classified as held for sale.
We report the results of operations of a business as discontinued operations if a disposal represents a strategic shift that has (or
will have) a major effect on our operations and financial results when the business is classified as held for sale, in accordance with
ASC 360, Property, Plant and Equipment and ASC 205-20, Presentation of Financial Statements - Discontinued Operations. The
results of discontinued operations are reported in Net income (loss) from discontinued operations, net of tax in the accompanying
Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing or adjustment of
the carrying amount to fair value less cost to sell.
88
Derivative instruments
All financial instruments that meet the definition of a derivative are recorded on the balance sheet at fair value. Changes in the
fair value of derivatives are recorded in the Consolidated Statements of Operations, except for the effective portion of the change in
fair value of derivatives that are designated as cash flow hedges. Management applies judgment in estimating the fair value of
instruments that are highly sensitive to assumptions such as commodity prices, market volatilities, foreign currency exchange rates
and interest rates. Variations in these factors could materially affect amounts credited or charged to earnings to reflect the changes in
fair value of derivatives. Certain derivative contracts are accounted for as cash flow hedges, whereby the effective portion of changes
in fair value of these instruments are deferred in Accumulated other comprehensive income (loss) and will be recognized in the
Consolidated Statements of Operations when the underlying transaction designated as the hedged item impacts earnings. The
derivative contracts accounted for as cash flow hedges are designated against foreign currency expenditures and diesel purchases
where management believes the forecasted transaction is probable of occurring. To the extent that management determines that the
forecasted transactions are no longer probable of occurring, gains and losses deferred in Accumulated other comprehensive income
(loss) would be reclassified to the Consolidated Statements of Operations immediately.
Reclamation and remediation obligations
Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in
the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the
reclamation costs. Reclamation obligations are based on when the spending for an existing environmental disturbance will occur.
Changes in reclamation estimates at non-operating mines are reflected in earnings in the period an estimate is revised. We review, on
at least an annual basis, the reclamation obligation at each mine.
Remediation costs are accrued based on management’s best estimate at the end of each period of the costs expected to be
incurred at a site. Such cost estimates may include ongoing care, maintenance and monitoring costs. Changes in remediation estimates
at inactive mines are reflected in earnings in the period an estimate is revised. Water treatment costs included in environmental
remediation obligations are discounted to their present value as cash flows are readily estimable. All other costs of future expenditures
for environmental remediation obligations are not discounted to their present value.
Accounting for reclamation and remediation obligations requires management to make estimates unique to each mining
operation of the future costs we will incur to complete the reclamation and remediation work required to comply with existing laws
and regulations. Any such changes in future costs, the timing of reclamation activities, scope, or the exclusion of certain costs not
considered reclamation and remediation costs, could materially impact the amounts charged to earnings for reclamation and
remediation. Additionally, future changes to environmental laws and regulations could increase the extent of reclamation and
remediation work required.
Income and mining taxes
We account for income taxes using the liability method, recognizing certain temporary differences between the financial
reporting basis of our liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either
a net deferred income tax liability or asset for us, as measured by the statutory tax rates in effect. We derive our deferred income tax
charge or benefit by recording the change in either the net deferred income tax liability or asset balance for the year. The financial
statement effects of changes in tax law are recorded as discrete items in the period enacted as part of income tax expense or benefit
from continuing operations, regardless of the category of income or loss to which the deferred taxes relate.
On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in
situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in
reasonable detail to complete the accounting for certain income tax effects of the Act. We determine if the assessment of a particular
income tax effect is “complete” or “incomplete” as of the due date of the financial statements. Those effects for which the accounting
is determined to be complete are reported in the enactment period financial statements.
For those effects determined to be incomplete, we determine whether a reasonable estimate of those effects can be made. If a
reasonable estimate can be made, the estimate is recognized as a provisional amount. If a reasonable estimate cannot be made, no
effects are recognized as provisional amounts until the first reporting period in which a reasonable estimate can be made. Provisional
amounts are updated when additional information becomes available and the evaluation of such information is complete. We complete
the accounting for all provisional amounts within a measurement period of up to one year from the enactment date.
89
Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes as such taxes
are based on a percentage of mining profits. With respect to the earnings that we derive from the operations of our consolidated
subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on the unremitted
earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes over the tax basis
of such equity) of our consolidated companies.
Our operations are in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Some of
these tax regimes are defined by contractual agreements with the local government, while others are defined by general tax laws and
regulations. We are subject to reviews of our income tax filings and other tax payments, and disputes can arise with the taxing
authorities over the interpretation of its contracts or laws. We recognize potential liabilities and record tax liabilities for anticipated tax
audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be
due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these
uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities.
If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If the
estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. We recognize interest and
penalties, if any, related to unrecognized tax benefits in Income and mining tax benefit (expense). In certain jurisdictions, we must pay
a portion of the disputed amount to the local government in order to formally appeal the assessment. Such payment is recorded as a
receivable if we believe the amount is ultimately collectible.
Valuation of deferred tax assets
Our deferred income tax assets include certain future tax benefits. We record a valuation allowance against any portion of those
deferred income tax assets when we believe, based on the weight of available evidence, it is more likely than not that some portion or
all of the deferred income tax asset will not be realized. We review the likelihood that we will realize the benefit of our deferred tax
assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if events indicate that a review is
required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or
consolidated group recording the net deferred tax asset is considered, along with all other available positive and negative evidence.
Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be
objectively verified. We look to the nature and severity of cumulative pretax losses (if any) in the current three-year period ending on
the evaluation date and the existence and frequency of prior cumulative pretax losses.
We utilize a rolling twelve quarters of pre-tax income or loss as a measure of our cumulative results in recent years. Concluding
that a valuation allowance is not required is difficult when there is significant negative evidence which is objective and verifiable,
such as cumulative losses in recent years. However, a cumulative three year loss is not solely determinative of the need for a valuation
allowance. We also consider all other available positive and negative evidence in our analysis.
Other factors considered in the determination of the probability of the realization of the deferred tax assets include, but are not
limited to:
• Earnings history;
• Projected future financial and taxable income based upon existing reserves and long-term estimates of commodity prices;
• The duration of statutory carry forward periods;
• Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary
difference;
• Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and
• The sensitivity of future forecasted results to commodity prices and other factors.
Our recent earnings history and forecasted future results, driven by its existing reserves and the forecasted long-term commodity
prices, points to the full realization of those deferred tax assets in the U.S. and Australia not previously subject to a valuation
allowance. We are in a cumulative three year loss in Peru and based on the declining production profile at Yanacocha, it is more likely
90
than not that the net deferred tax assets in Peru will not be realized in the future. Accordingly, an additional valuation allowance of
$40 on these assets was recognized at December 31, 2017.
Due to changes the Tax Cuts and Jobs Act made to certain international tax provisions, it was prudent for the Company to
restructure the holding of its non-U.S. operations for U.S. federal income tax purposes. This was accomplished by executing and filing
various “check the box” elections made with respect to certain non-US subsidiaries of the Company. The elections resulted in the
conversions of these subsidiaries from branches and/or foreign partnerships to regarded foreign corporations. One result of these
conversions is the Company no longer carries a U.S. deferred tax asset related to the investment in Yanacocha and released the
valuation allowance of $292 which was originally recorded on December 31, 2016.
The Company determined that the realization of deferred tax assets related to certain carry forwards such as tax losses and tax
pools in Canada, capital losses in the U.S. and Australia, and foreign tax credits in the U.S., does not meet the more likely than not
standard. Accordingly, these assets continue to be subject to a valuation allowance. At December 31, 2017, the valuation allowance
related to these assets was $1,296. Realization is dependent not only on generating sufficient taxable income in the period that net
deferred tax assets reverse but also on the character/classification of that income. The alternative minimum tax was removed by the
Tax Cuts and Jobs Act, and the Company’s alternative minimum tax credit carryforward will be refunded over a 5 year period.
Therefore, the Company removed the full valuation allowance on alternative minimum tax credits for December 31, 2017. The re-
measurement of the Company’s deferred tax assets due to the Tax Cuts and Jobs Act also impacted related valuation allowances; see
Schedule II-Valuation and Qualifying Accounts.
For additional risk factors that could impact the Company’s ability to realize the deferred tax assets, see Note 2 to the
Consolidated Financial Statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (dollars in millions, except
per ounce and per pound amounts).
Metal Prices
Changes in the market price of gold significantly affect our profitability and cash flow. Gold prices can fluctuate widely due to
numerous factors, such as demand; forward selling by producers; central bank sales, purchases and lending; investor sentiment; the
strength of the U.S. dollar; inflation, deflation, or other general price instability and global mine production levels. Changes in the
market price of copper also affect our profitability and cash flow. Copper is traded on established international exchanges and copper
prices generally reflect market supply and demand, but can also be influenced by speculative trading in the commodity or by currency
exchange rates.
Decreases in the market price of gold and copper can also significantly affect the value of our product inventory, stockpiles and
leach pads, and it may be necessary to record a write-down to the net realizable value. Net realizable value represents the estimated
future sales price based on short-term and long-term metals prices, less estimated costs to complete production and bring the product
to sale. The primary factors that influence the need to record write-downs of stockpiles, leach pads, and product inventory include
short-term and long-term metals prices and costs for production inputs such as labor, fuel and energy, materials and supplies as well as
realized ore grades and recovery rates. The significant assumptions in determining the stockpile, leach pad and product inventory
adjustments for each mine site reporting unit at December 31, 2017 included production cost and capitalized expenditure assumptions
unique to each operation, a short-term and long-term gold price of $1,275 and $1,300 per ounce, respectively, a short-term and long-
term copper price of $3.09 and $3.00 per pound, respectively, and a short-term and long-term Australian to U.S. dollar exchange rate
of $0.77 and $0.80, respectively.
The net realizable value measurement involves the use of estimates and assumptions unique to each mining operation regarding
current and future operating and capital costs, metal recoveries, production levels, commodity prices, proven and probable reserve
quantities, engineering data and other factors. A high degree of judgment is involved in determining such assumptions and estimates
and no assurance can be given that actual results will not differ significantly from those estimates and assumptions.
Foreign Currency
Changes in the foreign currency exchange rates in relation to the U.S. dollar may affect our profitability and cash flow. Foreign
currency exchange rates can fluctuate widely due to numerous factors, such as supply and demand for foreign and U.S. currencies and
U.S. and foreign country economic conditions. In addition to our operations in the United States, we have assets or operations in
Australia, Peru, Ghana and Suriname. All of our operations sell their metal production based on U.S. dollar gold and copper prices.
91
Fluctuations in the local currency exchange rates in relation to the U.S. dollar can increase or decrease profit margins and Costs
applicable to sales per ounce/pound to the extent costs are paid in local currency at foreign operations. The Australian dollar/U.S.
dollar exchange rate has had the greatest impact on our Costs applicable to sales, as measured in U.S. dollars. Foreign currency
exchange rates in relation to the U.S. dollar have not had a material impact on our determination of proven and probable reserves in
the past; however, if a sustained weakening of the U.S. dollar in relation to the Australian dollar, and/or to other foreign currencies
that impact our cost structure, were not mitigated by offsetting increases in the U.S. dollar gold price or by other factors, profitability,
cash flows and/or the amount of proven and probable reserves in the applicable foreign country could be reduced as certain proven
and probable reserves may no longer be economic. The extent of any such reduction would be dependent on a variety of factors
including the length of time of any such weakening of the U.S. dollar, and management’s long-term view of the applicable exchange
rate. Future reductions of proven and probable reserves could result in reduced gold or copper sales and increased Depreciation and
amortization and, depending on the level of reduction, could also result in impairments of Property, plant and mine development;
mineral interests and/or goodwill. For information concerning the sensitivity of our Costs applicable to sales to changes in foreign
currency exchange rates, see Results of Consolidated Operations and Foreign Currency Exchange Rates sections in Item 7,
Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations.
Hedging
Our strategy is to provide shareholders with leverage to changes in gold and copper prices by selling our production at spot
market prices. Consequently, we do not hedge our gold and copper sales. We have and may continue to manage certain risks
associated with commodity input costs, interest rates and foreign currencies using the derivative market.
By using hedges, we are affected by credit risk, market risk and market liquidity risk. Credit risk is the risk that a third party
might fail to fulfill its performance obligations under the terms of a financial instrument. We mitigate credit risk by entering into
derivatives with high credit quality counterparties, limiting the amount of exposure to each counterparty and monitoring the financial
condition of the counterparties. Market risk is the risk that the fair value of a derivative might be adversely affected by a change in
underlying commodity prices, interest rates or currency exchange rates, and that this in turn affects our financial condition. We
manage market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.
We mitigate this potential risk to our financial condition by establishing trading agreements with counterparties under which we are
not required to post any collateral or be subject to any margin calls on our derivatives. Our counterparties cannot require settlement
solely because of an adverse change in the fair value of a derivative. Market liquidity risk is the risk that a derivative cannot be
eliminated quickly, by either liquidating it or by establishing an offsetting position. Under the terms of our trading agreements,
counterparties cannot require us to immediately settle outstanding derivatives, except upon the occurrence of customary events of
default such as covenant breaches, including financial covenants, insolvency or bankruptcy. We further mitigate market liquidity risk
by spreading out the maturity of our derivatives over time.
Cash Flow Hedges
The foreign currency and diesel derivative contracts are designated as cash flow hedges, and as such, the effective portion of
unrealized changes in market value have been recorded in Accumulated other comprehensive income (loss) and are reclassified to
income during the period in which the hedged transaction affects earnings. Gains and losses from hedge ineffectiveness are recognized
in current earnings.
Foreign Currency Exchange Risk
We had the following foreign currency derivative contracts outstanding at December 31, 2017:
A$ Operating Fixed Forward Contracts:
A$ notional (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average rate ($/A$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected Maturity Date
2018
Total/Average
6
0.92
6
0.92
The fair value of the A$ foreign currency derivative contracts was a net liability position of $1 at December 31, 2017 and $24 at
December 31, 2016.
92
Diesel Price Risk
We had the following diesel derivative contracts in Nevada, within North America, outstanding at December 31, 2017:
Diesel Fixed Forward Contracts:
Diesel gallons (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average rate ($/gallon) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected Maturity Date
2018
2019
Total/Average
16
1.63
2
1.72
18
1.64
Newmont hedges a portion of its operating cost exposure related to diesel consumed at its Nevada operations to reduce the
variability in realized diesel prices. The hedging instruments consist of a series of financially settled fixed forward contracts with
expiration dates up to two years. The fair value of the diesel derivative contracts was a net asset position of $6 at December 31, 2017
and $- at December 31, 2016.
Commodity Price Exposure
Our provisional gold and copper sales contain an embedded derivative that is required to be separated from the host contract for
accounting purposes. The host contract is the receivable from the sale of the gold and copper concentrates at the prevailing indices’
prices at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through
earnings each period prior to final settlement.
At December 31, 2017, Newmont had gold sales of 76,000 ounces priced at an average of $1,299 per ounce, subject to final
pricing over the next several months. Each $25 change in the price for provisionally priced gold sales would have an approximate $1
effect on our Net income (loss) attributable to Newmont stockholders. The London Bullion Market Association settlement price at the
end of 2017 for gold was $1,291 per ounce.
At December 31, 2017, Newmont had copper sales of 21 million pounds priced at an average of $3.26 per pound, subject to
final pricing over the next several months. Each $0.10 change in the price for provisionally priced copper sales would have an
approximate $1 effect on our Net income (loss) attributable to Newmont stockholders. The LME closing settlement price at the end of
2017 for copper was $3.25 per pound.
Fixed and Variable Rate Debt
Our debt portfolio consisted of 100% fixed rate debt at December 31, 2017 and 2016. The decrease in the carrying value of
fixed rate debt was primarily due to the repayment of the 2017 Convertible Senior Notes in 2017. Our fixed rate debt exposure at
December 31, 2017 and 2016 is summarized as follows:
Carrying value of fixed rate debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Fair value of fixed rate debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Pro forma fair value sensitivity of fixed rate debt of a +/- 10 basis point interest rate
At December 31,
2017
2016
4,047 $
4,671 $
4,605
4,882
change (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
60 $
36
(1) Excludes capital leases for which it is not practicable to estimate fair values and pro forma fair values or sensitivities.
(2) The pro forma information assumes a +/–10 basis point change in market interest rates at December 31 of each year, and reflects the
corresponding estimated change in the fair value of fixed rate debt outstanding at that date under that assumption. Actual changes in the timing
and amount of interest rate variations may differ from the above assumptions.
93
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Newmont Mining Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Newmont Mining Corporation (the Company) as of
December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income (loss), changes in equity
and cash flows for each of the three years in the period ended December 31, 2017, and the related notes (collectively referred to as the
“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the consolidated financial
position of the Company at December 31, 2017 and 2016, and the consolidated results of its operations and its cash flows for each of
the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework), and our report dated February 22, 2018 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or
fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due
to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2014.
Denver, Colorado
February 22, 2018
94
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
2017
Years Ended December 31,
2016
(in millions, except per share)
2015
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
7,348
$
6,711
$
6,085
Costs and expenses:
Costs applicable to sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced projects, research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets (Note 7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net (Note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense):
Other income, net (Note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net of capitalized interest of $22, $33 and $40, respectively . . . . . . . . . . . . . . . . . . . .
Income (loss) before income and mining tax and other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining tax benefit (expense) (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity income (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests
Continuing operations (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net income (loss) attributable to Newmont stockholders:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Net income (loss) per common share (Note 13)
Basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
4,038
1,249
177
179
143
237
14
32
6,069
54
(241)
(187)
1,092
(1,125)
(16)
(49)
(38)
(87)
(11)
—
(11)
(98)
(60)
(38)
(98)
(0.11)
(0.07)
(0.18)
(0.11)
(0.07)
(0.18)
3,772
1,220
179
148
134
233
977
58
6,721
69
(273)
(204)
(214)
(563)
(13)
(790)
(133)
(923)
570
(274)
296
(627)
(220)
(407)
(627)
(0.41)
(0.77)
(1.18)
(0.41)
(0.77)
(1.18)
$
$
$
$
$
$
$
3,578
1,102
253
156
126
241
56
116
5,628
135
(297)
(162)
295
(391)
(45)
(141)
445
304
140
(224)
(84)
220
(1)
221
220
—
0.43
0.43
—
0.43
0.43
$
$
$
$
$
$
$
Cash dividends declared per common share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(1) Excludes Depreciation and amortization and Reclamation and remediation.
0.250
$
0.125
$
0.100
The accompanying notes are an integral part of these consolidated financial statements.
95
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other comprehensive income (loss):
Change in marketable securities, net of $-, $- and $- tax benefit (expense), respectively . . . . . . . . . . . .
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in pension and other post-retirement benefits, net of $(8), $9 and $(23) tax benefit (expense),
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in fair value of cash flow hedge instruments, net of $(15), $(31) and $(6) tax benefit
(expense), respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Comprehensive income (loss) attributable to:
Newmont stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
2017
Years Ended December 31,
2016
(in millions)
$
(923) $
(87)
2015
(15)
12
15
30
42
(45)
(56)
11
(45)
$
$
$
(58)
2
(16)
72
—
(923)
(627)
(296)
(923)
$
$
$
304
99
(11)
42
14
144
448
364
84
448
The accompanying notes are an integral part of these consolidated financial statements.
96
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
2017
Years Ended December 31,
2016
(in millions)
2015
Operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Adjustments:
(87) $
(923) $
304
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based compensation (Note 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss (income) from discontinued operations (Note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on asset and investment sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on deconsolidation of TMAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Write-downs of inventory and stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other operating adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in operating assets and liabilities (Note 25) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities of continuing operations . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities of discontinued operations (1) . . . . . . . . . . . . . . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:
Additions to property, plant and mine development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities of continuing operations . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities of discontinued operations . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,249
70
165
38
14
—
795
(23)
—
212
91
(174)
2,350
(15)
2,335
(866)
(130)
35
(15)
5
—
10
(961)
—
(961) $
1,220
70
168
133
977
—
434
(108)
—
298
138
(484)
1,923
869
2,792
(1,133)
(15)
195
(6)
9
920
(4)
(34)
(46)
(80)
1,102
77
246
(445)
56
115
198
(118)
(76)
236
99
(206)
1,588
557
2,145
(1,311)
(17)
29
(823)
203
—
(32)
(1,951)
(90)
(2,041)
$
97
2017
Years Ended December 31,
2016
(in millions)
2015
Financing activities:
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding from noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for withholding of employee taxes related to stock-based compensation . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from stock issuance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities of continuing operations . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities of discontinued operations . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . .
Net change in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less net cash provided by (used in) Batu Hijau discontinued operations . . . . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(580) $
(178)
(134)
94
(48)
(13)
—
—
—
(5)
(864)
—
(864)
6
516
—
516
2,782
3,298 $
(1,312)
(3)
(67)
66
(19)
(6)
(146)
—
—
1
(1,486)
(331)
(1,817)
2
897
503
394
2,388
2,782
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Restricted cash included in Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash included in Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,259
1
38
3,298
$
$
2,756
1
25
2,782
$
$
$
$
(229)
—
(52)
109
(8)
—
(3)
675
37
(2)
527
(225)
302
(24)
382
254
128
2,260
2,388
2,363
—
25
2,388
(1) Net cash provided by operating activities of discontinued operations includes $(3) related to closing costs for the sale of Batu Hijau that were
paid in 2017, $-, $880 and $569 related to the operating activities of Batu Hijau in 2017, 2016 and 2015, respectively, and $(12), $(11) and
$(12) for 2017, 2016 and 2015, respectively, related to the Holt royalty obligation, all of which were paid out of Cash and cash equivalents. For
additional information regarding our discontinued operations, including cash flows from Batu Hijau, see Note 3.
The accompanying notes are an integral part of these consolidated financial statements.
98
NEWMONT MINING CORPORATION
CONSOLIDATED BALANCE SHEETS
At December 31, At December 31,
2017
2016
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories (Note 19) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and mine development, net (Note 21) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments (Note 18) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads (Note 20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
LIABILITIES
Debt (Note 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities (Note 23) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt (Note 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation liabilities (Note 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax liabilities (Note 10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits (Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities (Note 23) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,259 $
124
113
62
679
676
153
5,066
12,267
280
1,848
537
565
20,563 $
4 $
375
309
248
459
1,395
4,061
2,154
595
386
342
8,933
2,756
160
183
56
617
763
142
4,677
12,485
207
1,864
1,331
467
21,031
566
320
304
153
407
1,750
4,049
2,029
592
411
326
9,157
EQUITY
Common stock - $1.60 par value; . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
853
849
Authorized - 750 million shares
Outstanding shares - 534 million and 531 million issued shares, less 915,000 and 535,000 treasury
shares, respectively
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive income (loss) (Note 24) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Newmont stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
9,564
(292)
484
10,609
1,021
11,630
20,563 $
9,490
(334)
716
10,721
1,153
11,874
21,031
The accompanying notes are an integral part of these consolidated financial statements.
99
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Additional
Accumulated
Other
Common Stock
Paid-In
Shares Amount Capital
Comprehensive Retained Noncontrolling
Income (Loss) Earnings
Interests
Total
Equity
84
—
(3)
90
(8)
(36)
—
—
2,815 $ 13,089
304
144
(55)
90
(8)
(24)
675
77
2,942 $ 14,292
(923)
(296)
(213)
(146)
(21)
(21)
81
81
(19)
(19)
(1,388)
(1,388)
65
—
1,153 $ 11,874
(87)
42
(134)
(170)
97
(48)
56
1,021 $ 11,630
11
—
—
(170)
97
(70)
—
Balance at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash calls requested from noncontrolling interests . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . .
Sale of noncontrolling interests, net . . . . . . . . . . . . . . . . . . . . . .
Equity issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stock-based awards and related share issuances . . . . . . . . . . . . .
Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions declared to noncontrolling interests . . . . . . . . . . . .
Cash calls requested from noncontrolling interests . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . .
Divestiture of noncontrolling interests, net . . . . . . . . . . . . . . . . .
Stock based awards and related share issuances . . . . . . . . . . . . .
Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . .
Dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions declared to noncontrolling interests . . . . . . . . . . . .
Cash calls requested from noncontrolling interests . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . .
Stock based awards and related share issuances . . . . . . . . . . . . .
Balance at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . .
499 $
—
—
—
—
—
—
29
2
530 $
—
—
—
—
—
—
2
532 $
—
—
—
—
—
—
1
533 $
798 $
—
—
—
—
—
—
46
3
847 $
—
—
—
—
—
—
2
849 $
—
—
—
—
—
—
4
853 $
8,712 $
—
—
—
—
—
12
629
74
9,427 $
—
—
—
—
—
—
63
9,490 $
—
—
—
—
—
22
52
9,564 $
(in millions)
(478) $ 1,242 $
—
144
—
—
—
—
—
—
220
—
(52)
—
—
—
—
—
(334) $ 1,410 $
—
—
—
—
—
—
—
(334) $
—
42
—
—
—
—
—
(292) $
(627)
(67)
—
—
—
—
—
716 $
(98)
—
(134)
—
—
—
—
484 $
The accompanying notes are an integral part of these consolidated financial statements.
100
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 1 THE COMPANY
Newmont Mining Corporation and its affiliates and subsidiaries (collectively, “Newmont,” “we,” “us” or the “Company”)
predominantly operate in the mining industry, focused on the production of and exploration for gold and copper. The Company has
significant assets and/or operations in the United States (“U.S.”), Australia, Peru, Ghana and Suriname. The cash flow and profitability
of the Company’s operations are significantly affected by the market price of gold and copper. The prices of gold and copper are
affected by numerous factors beyond the Company’s control.
References to “A$” refer to Australian currency and “C$” refer to Canadian currency.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and Uncertainties
As a global mining company, the Company’s revenue, profitability and future rate of growth are substantially dependent on
prevailing prices for gold and copper. Historically, the commodity markets have been very volatile, and there can be no assurance that
commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could
have a material adverse effect on the Company’s financial position, results of operations, cash flows, access to capital and on the
quantities of reserves that the Company can economically produce. The carrying value of the Company’s Property, plant and mine
development, net; Inventories; Stockpiles and ore on leach pads; and Deferred income tax assets are particularly sensitive to the
outlook for commodity prices. A decline in the Company’s price outlook from current levels could result in material impairment
charges related to these assets.
Minera Yanacocha S.R.L. (“Yanacocha”) includes the mining operations at Yanacocha and the Conga project in Peru. Under the
current social and political environment, the Company does not anticipate being able to develop Conga for at least the next five years.
As a result of the uncertainty surrounding the Conga project, the Company has allocated its development capital to other projects.
Should the Company be unable to develop the Conga project, the Company may have to consider other alternatives for the project,
which may result in a future impairment charge. The total assets at Conga as of December 31, 2017 and 2016 were $1,650 and $1,666
respectively.
Use of Estimates
The Company’s Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”). The preparation of the Company’s Consolidated Financial Statements requires the Company to make estimates
and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities
at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period.
The more significant areas requiring the use of management estimates and assumptions relate to mineral reserves that are the basis for
future cash flow estimates utilized in impairment calculations and units-of-production amortization calculations; environmental
remediation, reclamation and closure obligations; estimates of recoverable gold and other minerals in stockpile and leach pad
inventories; estimates of fair value for certain reporting units and asset impairments (including impairments of goodwill, long-lived
assets and investments); write-downs of inventory, stockpiles and ore on leach pads to net realizable value; post-employment, post-
retirement and other employee benefit liabilities; valuation allowances for deferred tax assets; provisional amounts related to income
tax effects of newly enacted tax laws; reserves for contingencies and litigation; and the fair value and accounting treatment of financial
instruments including marketable securities and derivative instruments. The Company bases its estimates on historical experience and
on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will differ from
those amounts estimated in these financial statements.
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Newmont Mining Corporation and the more-than-50%-owned
subsidiaries that it controls. The Company also includes its pro-rata share of assets, liabilities and operations for unincorporated joint
ventures in which it has an interest. All significant intercompany balances and transactions have been eliminated. The functional
currency for the majority of the Company’s operations is the U.S. dollar.
101
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company follows the Accounting Standards Codification (“ASC”) guidance for identification and reporting of entities over
which control is achieved through means other than voting rights. The guidance defines such entities as Variable Interest Entities (“VIEs”).
On November 22, 2013, Newmont entered into a Partnership Agreement with Staatsolie Maatschappij Suriname N.V.
(“Staatsolie”) (a company wholly owned by the Republic of Suriname). The Partnership Agreement gave Staatsolie the option to
participate in the Merian gold mine (“Merian”) for up to 25% of the partnership. Staatsolie exercised that option in November 2014.
At December 31, 2017, Newmont has a 75.0% ownership in Merian. Newmont has identified Merian as a VIE under ASC guidance
for consolidation. The Company has determined itself to be the primary beneficiary of this entity, as it controls the operations of
Merian and has the obligation to absorb losses and the right to receive benefits that are significant to Merian; therefore, the Company
consolidates Merian in its financial statements.
Assets Held for Sale and Discontinued Operations
The Company reports a business as held for sale when management has approved or received approval to sell the business and is
committed to a formal plan, the business is available for immediate sale, the business is being actively marketed, the sale is probable
and recognition of a completed sale is expected to occur within one year, the sales price is reasonable in relation to its current fair
value and actions required to complete the sale indicate that it is unlikely that significant changes to the plan will be made or the plan
will be withdrawn, in accordance with ASC 360, Property, Plant and Equipment. A business classified as held for sale is recorded at
the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount of the business exceeds its estimated
fair value, less cost to sell, a loss is recognized. Assets and liabilities related to a business classified as held for sale are segregated in
the current- and prior-year balance sheets in the period in which the business is classified as held for sale.
The Company reports the results of operations of a business as discontinued operations if a disposal represents a strategic shift
that has (or will have) a major effect on the Company’s operations and financial results when the business is classified as held for sale,
in accordance with ASC 360, Property, Plant and Equipment and ASC 205-20, Presentation of Financial Statements - Discontinued
Operations. The results of discontinued operations are reported in Net income (loss) from discontinued operations, net of tax in the
accompanying Consolidated Statements of Operations for current and prior periods, including any gain or loss recognized on closing
or adjustment of the carrying amount to fair value less cost to sell.
On November 2, 2016, Newmont completed the sale of its 48.5% economic interest in PT Newmont Nusa Tenggara
(“PTNNT”), which operates the Batu Hijau copper and gold mine (“Batu Hijau”) in Indonesia (the “Batu Hijau Transaction”). As a
result, Newmont presents Batu Hijau as a discontinued operation for all periods presented. Accordingly, (i) our Consolidated
Statements of Operations and Cash Flows have been reclassified to present Batu Hijau as a discontinued operation for all periods
presented and (ii) the amounts presented in these notes relate only to our continuing operations, unless otherwise noted. For additional
information regarding our discontinued operations, see Note 3.
Cash and Cash Equivalents
Cash and cash equivalents consist of all cash balances and highly liquid investments with an original maturity of three months or
less. Because of the short maturity of these investments, the carrying amounts approximate their fair value. Cash and cash equivalents
are held in overnight bank deposits or are invested in United States Treasury securities and money market securities. Restricted cash is
excluded from cash and cash equivalents and is included in other current or non-current assets. Restricted cash is held primarily for the
purpose of settling asset retirement obligations.
Investments
Management determines the appropriate classification of its investments in equity securities at the time of purchase and
reevaluates such determinations at each reporting date. Investments in incorporated entities in which the Company’s ownership is
greater than 20% and less than 50%, or which the Company does not control through majority ownership or means other than voting
rights, are accounted for by the equity method and are included in non-current assets. Additionally, the Company has certain restricted
investments, which are classified as Other non-current assets. The Company accounts for both its restricted and non-restricted
marketable security investments as available for sale securities in accordance with ASC guidance on accounting for certain
investments in debt and equity securities. The Company periodically evaluates whether declines in fair values of its investments below
the Company’s carrying value are other-than-temporary in accordance with ASC guidance. The Company’s policy is to generally treat
102
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
a decline in the investment’s quoted market value that has lasted continuously for more than six to nine months as an other-than-
temporary decline in value. The Company also monitors its investments for events or changes in circumstances that have occurred that
may have a significant adverse effect on the fair value of the investment and evaluates qualitative and quantitative factors regarding
the severity and duration of the unrealized loss and the Company’s ability to hold the investment until a forecasted recovery occurs to
determine if the decline in value of an investment is other-than-temporary. Declines in fair value below the Company’s carrying value
deemed to be other-than-temporary are charged to Other income, net.
Stockpiles, Ore on Leach Pads and Inventories
As described below, costs that are incurred in or benefit the productive process are accumulated as stockpiles, ore on leach pads
and inventories. Stockpiles, ore on leach pads and inventories are carried at the lower of average cost or net realizable value. Net
realizable value represents the estimated future sales price of the product based on current and long-term metals prices, less the
estimated costs to complete production and bring the product to sale. Write-downs of stockpiles, ore on leach pads and inventories to
net realizable value are reported as a component of Costs applicable to sales and Depreciation and amortization. The current portion
of stockpiles, ore on leach pads and inventories is determined based on the expected amounts to be processed within the next 12
months and utilize the short-term metal price assumption in estimating net realizable value. Stockpiles, ore on leach pads and
inventories not expected to be processed within the next 12 months are classified as non-current and utilize the long-term metal price
assumption in estimating net realizable value. The major classifications are as follows:
Stockpiles
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Mine sequencing may
result in mining material at a faster rate than can be processed. The Company generally processes the highest ore grade material first
to maximize metal production; however, a blend of gold ore stockpiles may be processed to balance hardness and/or metallurgy in
order to maximize throughput and recovery. Processing of lower grade stockpiled ore may continue after mining operations are
completed. Sulfide copper ores are subject to oxidation over time which can reduce expected future recoveries. Stockpiles are
measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based
on assay data) and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are
verified by periodic surveys. Costs are added to stockpiles based on current mining costs incurred including applicable overhead and
depreciation and amortization relating to mining operations and removed at each stockpile’s average cost per recoverable unit as
material is processed. Stockpiles are recorded at the lower of average cost or net realizable value, and carrying values are evaluated at
least quarterly. Net realizable value represents the estimated future sales price based on short-term and long-term metals price
assumptions, less estimated costs to complete production and bring the product to sale.
Ore on Leach Pads
Ore on leach pads represent ore that has been mined and placed on leach pads where a solution is applied to the surface of the
heap to dissolve the gold or extract the copper. The recovery of copper from leach pads is further described below in the Copper
Cathode Inventory section.
Costs are added to ore on leach pads based on current mining costs, including applicable depreciation and amortization relating
to mining operations. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per estimated
recoverable ounce of gold or pound of copper on the leach pad.
Estimates of recoverable ore on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons
added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore
type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year
thereafter until the leaching process is complete.
Although the quantities of recoverable ore placed on the leach pads are reconciled by comparing the grades of ore placed on
pads to the quantities of metal actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the
ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are
refined based on actual results over time. Historically, the Company’s operating results have not been materially impacted by
variations between the estimated and actual recoverable quantities of metal on its leach pads. Variations between actual and estimated
103
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted
for on a prospective basis.
In-process Inventory
In-process inventories represent material that is currently in the process of being converted to a saleable product. Conversion
processes vary depending on the nature of the ore and the specific processing facility, but include mill in-circuit, flotation, leach and
carbon-in-leach. In-process material is measured based on assays of the material fed into the process and the projected recoveries of
the respective plants. In-process inventories are valued at the average cost of the material fed into the process attributable to the source
material coming from the mines, stockpiles and/or leach pads, plus the in-process conversion costs, including applicable amortization
relating to the process facilities incurred to that point in the process.
Precious Metals Inventory
Precious metals inventories include gold doré and/or gold bullion. Precious metals that result from the Company’s mining and
processing activities are valued at the average cost of the respective in-process inventories incurred prior to the refining process, plus
applicable refining costs.
Copper Cathode Inventory
Copper heap leaching is performed on copper oxide ore and enriched copper sulfide ore to produce copper cathodes. Heap
leaching is accomplished by stacking uncrushed ore onto synthetically lined pads where it is contacted with a dilute sulfuric acid
solution, thus leaching the acid soluble minerals into a copper sulfate solution. The copper sulfate solution is then collected and
pumped to the solvent extraction (“SX”) plant. The SX process consists of two steps. During the first step, the copper is extracted into
an organic solvent solution. The loaded organic solution is then pumped to the second step where copper is stripped with a strong acid
solution before being sent through the electrowinning process. Cathodes produced in electrowinning are 99.99% copper.
Copper cathode is produced at the Company’s Phoenix operations by solvent extraction and electrowinning. The inventory is
valued at the lower of average cost to produce the cathode or net realizable value.
Concentrate Inventory
Concentrate inventories represent copper and gold concentrate available for shipment or in transit for further processing when
the sales process has not been completed. The Company values concentrate inventory at average cost, including an allocable portion
of support costs and amortization. Costs are added and removed to the concentrate inventory based on metal in the concentrate and are
valued at the lower of average cost or net realizable value.
Materials and Supplies
Materials and supplies are valued at the lower of average cost or net realizable value. Cost includes applicable taxes and freight.
Property, Plant and Mine Development
Facilities and Equipment
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are
capitalized and recorded at cost. Facilities and equipment acquired as a part of a capital lease, build-to-suit or other financing
arrangement are capitalized and recorded based on the contractual lease terms. The facilities and equipment are depreciated using the
straight-line method at rates sufficient to depreciate such costs over the estimated productive lives of such facilities. These estimated
productive lives do not exceed the related estimated mine lives, which are based on proven and probable reserves.
104
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Mine Development
Mine development costs include engineering and metallurgical studies, drilling and other related costs to delineate an ore body,
the removal of overburden to initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral
access, drifts, ramps and other infrastructure at underground mines. Costs incurred before mineralization is classified as proven and
probable reserves are expensed and classified as Exploration or Advanced projects, research and development expense. Capitalization
of mine development project costs that meet the definition of an asset begins once mineralization is classified as proven and probable
reserves.
Drilling and related costs are capitalized for an ore body where proven and probable reserves exist and the activities are directed
at obtaining additional information on the ore body or converting mineralized material to proven and probable reserves. All other
drilling and related costs are expensed as incurred. Drilling costs incurred during the production phase for operational ore control are
allocated to inventory costs and then included as a component of Costs applicable to sales.
The cost of removing overburden and waste materials to access the ore body at an open pit mine prior to the production phase
are referred to as “pre-stripping costs.” Pre-stripping costs are capitalized during the development of an open pit mine. Where multiple
open pits exist at a mining complex utilizing common processing facilities, pre-stripping costs are capitalized at each pit. The removal,
production, and sale of de minimis saleable materials may occur during the development phase of an open pit mine and are assigned
incremental mining costs related to the removal of that material.
The production phase of an open pit mine commences when saleable minerals, beyond a de minimis amount, are produced.
Stripping costs incurred during the production phase of a mine are variable production costs that are included as a component of
inventory to be recognized in Costs applicable to sales in the same period as the revenue from the sale of inventory. The Company’s
definition of a mine and the mine’s production phase may differ from that of other companies in the mining industry resulting in
incomparable allocations of stripping costs to deferred mine development and production costs. Other mining companies may expense
pre-stripping costs associated with subsequent pits within a mining complex. Other mining companies may capitalize stripping costs
incurred in connection with the production phase.
Mine development costs are amortized using the units-of-production method based on estimated recoverable ounces or pounds
in proven and probable reserves. To the extent that these costs benefit an entire ore body, they are amortized over the estimated life of
the ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are amortized over
the estimated life of that specific ore block or area.
Mineral Interests
Mineral interests include acquired interests in production, development and exploration stage properties. Mineral interests are
capitalized at their fair value at the acquisition date, either as an individual asset purchase or as part of a business combination.
The value of such assets is primarily driven by the nature and amount of mineralized material believed to be contained in such
properties. Production stage mineral interests represent interests in operating properties that contain proven and probable reserves.
Development stage mineral interests represent interests in properties under development that contain proven and probable reserves.
Exploration stage mineral interests represent interests in properties that are believed to potentially contain mineralized material
consisting of (i) mineralized material within pits; mineralized material with insufficient drill spacing to qualify as proven and probable
reserves; and mineralized material in close proximity to proven and probable reserves; (ii) around-mine exploration potential not
immediately adjacent to existing reserves and mineralization, but located within the immediate mine area; (iii) other mine-related
exploration potential that is not part of current mineralized material and is comprised mainly of material outside of the immediate
mine area; (iv) greenfield exploration potential that is not associated with any other production, development or exploration stage
property, as described above; or (v) any acquired right to explore or extract a potential mineral deposit. The Company’s mineral rights
generally are enforceable regardless of whether proven and probable reserves have been established. In certain limited situations, the
nature of a mineral right changes from an exploration right to a mining right upon the establishment of proven and probable reserves.
The Company has the ability and intent to renew mineral interests where the existing term is not sufficient to recover all identified and
valued proven and probable reserves and/or undeveloped mineralized material.
105
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Impairment of Long-lived Assets
The Company reviews and evaluates its long-lived assets for impairment at least annually, or when events or changes in
circumstances indicate that the related carrying amounts may not be recoverable. An impairment loss is measured and recorded based
on the estimated fair value of the long-lived assets being tested for impairment, and their carrying amounts. Fair value is typically
determined through the use of an income approach utilizing estimates of discounted pre-tax future cash flows or a market approach
utilizing recent transaction activity for comparable properties. These approaches are considered Level 3 fair value measurements.
Occasionally, such as when an asset is held for sale, market prices are used. The Company believes its estimates and models used to
determine fair value are similar to what a market participant would use.
The estimated undiscounted cash flows used to assess recoverability of long-lived assets and to measure the fair value of the
Company’s mining operations are derived from current business plans, which are developed using short-term price forecasts reflective
of the current price environment and management’s projections for long-term average metal prices. In addition to short- and long-term
metal price assumptions, other assumptions include estimates of commodity-based and other input costs; proven and probable mineral
reserves estimates, including the timing and cost to develop and produce the reserves; value beyond proven and probable estimates;
estimated future closure costs; and the use of appropriate discount rates.
In estimating undiscounted cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are
largely independent of undiscounted cash flows from other asset groups. The Company’s estimates of undiscounted cash flows are
based on numerous assumptions and it is possible that actual cash flows will be significantly different than the estimates, as actual
produced reserves, metal prices, commodity-based and other costs, and closure costs are each subject to significant risks and
uncertainties.
Revenue Recognition
Revenue is recognized from a sale when persuasive evidence of an arrangement exists, the price is determinable, the product has
been delivered, risk and the title has been transferred to the customer and collection of the sales price is reasonably assured. Revenues
from concentrate sales are recorded net of treatment and refining charges. Revenues from by-product sales are credited to Costs
applicable to sales as a by-product credit.
Concentrate sales are initially recorded based on 100% of the provisional sales prices. Until final settlement occurs, adjustments
to the provisional sales prices are made to take into account the mark-to-market changes based on the forward prices for the estimated
month of settlement. For changes in metal quantities upon receipt of new information and assays, the provisional sales quantities are
also adjusted. The principal risks associated with recognition of sales on a provisional basis include metal price fluctuations between
the date initially recorded and the date of final settlement. If a significant decline in metal prices occurs between the provisional
pricing date and the final settlement date, it is reasonably possible that the Company could be required to return a portion of the sales
proceeds received based on the provisional invoice.
The Company’s sales based on a provisional price contain an embedded derivative that is required to be separated from the host
contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the forward exchange price at
the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each
period prior to final settlement.
Effective January 1, 2018, the Company will adopt changes to its revenue recognition policy. Refer to Recently Issued
Accounting Pronouncements below for further details.
Income and Mining Taxes
The Company accounts for income taxes using the liability method, recognizing certain temporary differences between the
financial reporting basis of the Company’s liabilities and assets and the related income tax basis for such liabilities and assets. This
method generates either a net deferred income tax liability or asset for the Company, as measured by the statutory tax rates in effect.
The Company derives its deferred income tax charge or benefit by recording the change in either the net deferred income tax liability
or asset balance for the year. The financial statement effects of changes in tax law are recorded as discrete items in the period enacted
as part of income tax expense or benefit from continuing operations, regardless of the category of income or loss to which the deferred
taxes relate. The Company determines if the assessment of a particular income tax effect is “complete” or “incomplete” as of the due
106
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
date of the financial statements. Those effects for which the accounting is determined to be complete are reported in the enactment
period financial statements.
For those effects determined to be incomplete, the Company determines whether a reasonable estimate of those effects can be
made. If a reasonable estimate can be made, the estimate is recognized as a provisional amount. If a reasonable estimate cannot be
made, no effects are recognized as provisional amounts until the first reporting period in which a reasonable estimate can be made.
Provisional amounts are updated when additional information becomes available and the evaluation of such information is complete.
The Company completes the accounting for all provisional amounts within a measurement period of up to one year from the
enactment date.
Mining taxes represent state and provincial taxes levied on mining operations and are classified as income taxes. As such, taxes
are based on a percentage of mining profits. With respect to the earnings that the Company derives from the operations of its
consolidated subsidiaries, in those situations where the earnings are indefinitely reinvested, no deferred taxes have been provided on
the unremitted earnings (including the excess of the carrying value of the net equity of such entities for financial reporting purposes
over the tax basis of such equity) of these consolidated companies.
Newmont’s operations are in multiple jurisdictions where uncertainties arise in the application of complex tax regulations. Some
of these tax regimes are defined by contractual agreements with the local government, while others are defined by general tax laws
and regulations. Newmont and its subsidiaries are subject to reviews of its income tax filings and other tax payments, and disputes can
arise with the taxing authorities over the interpretation of its contracts or laws. The Company recognizes potential liabilities and
records tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the
extent to which, additional taxes will be due. The Company adjusts these reserves in light of changing facts and circumstances;
however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially
different from the Company’s current estimate of the tax liabilities. If the Company’s estimate of tax liabilities proves to be less than
the ultimate assessment, an additional charge to expense would result. If the estimate of tax liabilities proves to be greater than the
ultimate assessment, a tax benefit would result. The Company recognizes interest and penalties, if any, related to unrecognized tax
benefits in Income and mining tax benefit (expense). In certain jurisdictions, Newmont must pay a portion of the disputed amount to
the local government in order to formally appeal the assessment. Such payment is recorded as a receivable if Newmont believes the
amount is collectible.
Valuation of Deferred Tax Assets
The Company’s deferred income tax assets include certain future tax benefits. The Company records a valuation allowance
against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely
than not that some portion or all of the deferred income tax asset will not be realized. The Company reviews the likelihood that it will
realize the benefit of its deferred tax assets and therefore the need for valuation allowances on a quarterly basis, or more frequently if
events indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected
financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with all other
available positive and negative evidence.
Certain categories of evidence carry more weight in the analysis than others based upon the extent to which the evidence may be
objectively verified. The Company looks to the nature and severity of cumulative pretax losses (if any) in the current three-year period
ending on the evaluation date and the existence and frequency of prior cumulative pretax losses. Other factors considered in the
determination of the probability of the realization of the deferred tax assets include, but are not limited to:
•
•
•
•
Earnings history;
Projected future financial and taxable income based upon existing reserves; and long-term estimates of commodity prices;
The duration of statutory carry forward periods;
Prudent and feasible tax planning strategies readily available that may alter the timing of reversal of the temporary
difference;
107
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
•
•
Nature of temporary differences and predictability of reversal patterns of existing temporary differences; and
The sensitivity of future forecasted results to commodity prices and other factors.
Concluding that a valuation allowance is not required is difficult when there is significant negative evidence which is objective
and verifiable, such as cumulative losses in recent years. The Company utilizes a rolling twelve quarters of pre-tax income or loss as a
measure of its cumulative results in recent years. However, a cumulative three year loss is not solely determinative of the need for a
valuation allowance. The Company also considers all other available positive and negative evidence in its analysis.
Reclamation and Remediation Costs
Reclamation obligations are recognized when incurred and recorded as liabilities at fair value. The liability is accreted over time
through periodic charges to earnings. In addition, the asset retirement cost is capitalized as part of the asset’s carrying value and
amortized over the life of the related asset. Reclamation costs are periodically adjusted to reflect changes in the estimated present
value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation costs.
Changes in reclamation estimates at non-operating mines are reflected in earnings in the period an estimate is revised. The estimated
reclamation obligation is based on when spending for an existing disturbance is expected to occur. The Company reviews, on an
annual basis, unless otherwise deemed necessary, the reclamation obligation at each mine site in accordance with ASC guidance for
asset retirement obligations.
Remediation costs are accrued based on management’s best estimate at the end of each period of the costs expected to be
incurred at a site. Such cost estimates may include ongoing care, maintenance and monitoring costs. Changes in remediation estimates
at legacy sites are reflected in earnings in the period an estimate is revised. Water treatment costs included in environmental
remediation obligations are discounted to their present value as cash flows are readily estimable. All other costs of future expenditures
for environmental remediation obligations are not discounted to their present value.
Foreign Currency
The functional currency for the majority of the Company’s operations, including the Australian operations, is the U.S. dollar. All
monetary assets and liabilities where the functional currency is the U.S. dollar are translated at current exchange rates and the resulting
adjustments are included in Other income, net. All assets and liabilities recorded in functional currencies other than U.S. dollars are
translated at current exchange rates and the resulting adjustments are charged or credited directly to Accumulated other comprehensive
income (loss) in Total equity. Revenues and expenses in foreign currencies are translated at the weighted average exchange rates for the
period. The gains or losses on foreign currency rates on cash holdings in foreign currencies are included in Effect of exchange rate
changes on cash in the Company’s Consolidated Statements of Cash Flows.
Derivative Instruments
Newmont has forward contracts designated as cash flow hedges in place to hedge against changes in foreign exchanges rates
and diesel prices. The fair value of derivative contracts qualifying as cash flow hedges are reflected as assets or liabilities in the
Consolidated Balance Sheets. To the extent these hedges are effective in offsetting forecasted cash flows from production costs (the
“effective portion”), changes in fair value are deferred in Accumulated other comprehensive income (loss). Amounts deferred in
Accumulated other comprehensive income (loss) are reclassified to income when the hedged transaction has occurred. The ineffective
portion of the change in the fair value of the derivative is recorded in Other income, net in each period. Cash transactions related to the
Company’s derivative contracts accounted for as hedges are classified in the same category as the item being hedged in the
Consolidated Statements of Cash Flows.
When derivative contracts qualifying as cash flow hedges are settled, accelerated or restructured before the maturity date of the
contracts, the related amount in Accumulated other comprehensive income (loss) at the settlement date is deferred and reclassified to
earnings, when the originally designated hedged transaction impacts earnings.
Newmont assesses the effectiveness of the derivative contracts using either regression analysis or the dollar offset approach,
both retrospectively and prospectively, to determine whether the hedging instruments have been highly effective in offsetting changes
in the fair value of the hedged items. The Company also assesses whether the hedging instruments are expected to be highly effective
108
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
in the future. If a hedging instrument is not expected to be highly effective, the Company will stop hedge accounting prospectively. In
those instances, the gains or losses remain in Accumulated other comprehensive income (loss) until the hedged item affects earnings.
Stock-Based Compensation
The Company records stock-based compensation awards exchanged for employee services at fair value on the date of the grant
and expenses the awards in the Consolidated Statements of Operations over the requisite employee service period. The fair value of
stock options is determined using the Black-Scholes valuation model. The fair value of restricted stock units (“RSUs”) and strategic
stock units (“SSUs”) are based on the Newmont stock price on the date of grant. The fair value of performance leverage stock units
(“PSUs”) is determined using a Monte Carlo simulation model. Stock-based compensation expense related to awards with a market or
performance condition is generally recognized over the vesting period of the award utilizing the cliff vesting method, while all other
awards are recognized on a straight-line basis. The Company recognizes forfeitures as they occur. The Company's estimates may be
impacted by certain variables including, but not limited to, stock price volatility, employee stock option exercise behaviors, additional
stock option grants, the Company's performance and related tax impacts.
Debt
The Company carries its Senior Notes at amortized cost.
Debt issuance costs and debt premiums and discounts, which are included in Debt, and unrealized gains or losses related to
treasury rate lock contracts and forward starting swap contracts, which are included in Accumulated other comprehensive income
(loss), are amortized using the effective interest method over the terms of the respective Senior Notes as a component of Interest
expense, net within the Consolidated Statements of Operations.
When repurchasing its debt, the Company records the resulting gain or loss as well as the accelerated portion of related debt
issuance costs, premiums and discounts, and any unrealized gains or losses from the associated treasury rate lock contracts and/or
associated forward starting swap contracts in Other Income, net.
Net Income (Loss) per Common Share
Basic and diluted income per share are presented for Net income (loss) attributable to Newmont stockholders. Basic income per
common share is computed by dividing income available to Newmont common stockholders by the weighted average number of
common shares outstanding during the period. Diluted income per common share is computed similarly except that weighted average
common shares is increased to reflect all dilutive instruments, including employee stock awards and convertible debt instruments. The
dilutive effects of Newmont’s dilutive securities are excluded from the calculation of diluted weighted average common shares
outstanding if their effect would be anti-dilutive based on the treasury stock method or due to a net loss from continuing operations.
Comprehensive Income (Loss)
In addition to Net income (loss), Comprehensive income (loss) includes all changes in equity during a period, such as
adjustments to minimum pension liabilities, foreign currency translation adjustments, the effective portion of changes in fair value of
derivative instruments that qualify as cash flow hedges and cumulative unrecognized changes in fair value of marketable securities
available for sale or other investments, except those resulting from investments by and distributions to owners.
Reclassifications
Certain amounts in prior years have been reclassified to conform to the 2017 presentation. Reclassified amounts were not
material to the financial statements.
109
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Recently Adopted Accounting Pronouncements
Inventory
In July 2015, Accounting Standard Update (“ASU”) No. 2015-11 was issued related to inventory, simplifying the subsequent
measurement of inventories by replacing the lower of cost or market test with a lower of cost and net realizable value test. The update
is effective in fiscal years, including interim periods, beginning after December 15, 2016. The Company records inventory at the lower
of cost or net realizable value and the adoption of this guidance, effective January 1, 2017, had no impact on the Consolidated
Financial Statements or disclosures.
Stock-based compensation
In March 2016, ASU No. 2016-09 was issued related to stock-based compensation. The new guidance simplifies the accounting
for stock-based compensation transactions, including income tax consequences, classification of awards as either equity or liabilities
and classification of cash payments related to tax withholdings on behalf of employees on the Consolidated Statements of Cash Flows.
This update is effective in fiscal years, including interim periods, beginning after December 15, 2016. The Company adopted this
guidance as of January 1, 2017, and reclassified $(6) from Net cash provided by (used in) operating activities of continuing operations
to Net cash provided by (used in) financing activities of continuing operations for the year ended December 31, 2016. There was no
impact in 2015. Adoption of this guidance had no other impact on the Consolidated Financial Statements or disclosures.
Restricted cash
In November 2016, ASU No. 2016-18 was issued related to the inclusion of restricted cash in the statement of cash flows. This
new guidance requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents and
amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim
periods, beginning after December 15, 2017, and early adoption is permitted. The Company retrospectively adopted this guidance as
of December 31, 2017, which resulted in the removal of the changes in restricted cash activity of $(10) and $8 from Net cash provided
by (used in) financing activities of discontinued operations within financing activities and $- and $(2) from Other within financing
activities on the Consolidated Statements of Cash Flows for the years ended December 31, 2016 and 2015, respectively. Furthermore,
the Company has included a reconciliation of Cash and cash equivalents and restricted cash reported within the Consolidated Balance
Sheets to the total shown in the Consolidated Statements of Cash Flows. Adoption of this guidance had no other impact on the
Consolidated Financial Statements or disclosures.
Business combinations
In January 2017, ASU No. 2017-01 was issued clarifying the definition of a business and providing additional guidance for
determining whether transactions should be accounted for as acquisitions of assets or businesses. This update is effective in fiscal
years, including interim periods, beginning after December 15, 2017, and early adoption is permitted. The new guidance is required to
be applied on a prospective basis. Adoption of this guidance, effective April 1, 2017, had no impact on the Consolidated Financial
Statements or disclosures.
Goodwill
In January 2017, ASU No. 2017-04 was issued, which removes step two from the goodwill impairment test. As a result, an
entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and
should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. This
update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted.
Adoption of this guidance, effective April 1, 2017, had no impact on the Consolidated Financial Statements or disclosures.
110
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Recently Issued Accounting Pronouncements
Revenue recognition
In May 2014, ASU No. 2014-09 was issued related to revenue from contracts with customers. This ASU was further amended in
August 2015, March 2016, April 2016, May 2016, December 2016, and September 2017 by ASU No. 2015-14, No. 2016-08, No.
2016-10, No. 2016-12, No. 2016-20 and No. 2017-13, respectively. The new guidance provides a five-step approach to be applied to
all contracts with customers and also requires expanded disclosures about revenue recognition. In August 2015, the effective date was
deferred to reporting periods, including interim periods, beginning after December 15, 2017, and will be applied retrospectively.
The Company has performed an assessment of the revised guidance and the impacts on the Company’s Consolidated Financial
Statements and disclosures. The Company has completed the review of all contracts and determined that the adoption of this guidance
will primarily impact the timing of revenue recognition on certain concentrate contracts based on the Company’s determination of
when control is transferred. Currently, revenue is recognized for these contracts based on varying contractual terms indicating when
risk of loss and title have transferred to the buyer. Upon adoption, revenue related to concentrate sales will typically be recognized
upon completion of loading the material for shipment to the customer and satisfaction of the Company’s significant performance
obligations.
The Company completed its evaluation of variable consideration for concentrate sales related to the variable nature of the price
and metal quantity. Based on our current analysis, the estimate of revenue recognized for concentrates will remain unchanged as sales
will initially be recorded on a provisional basis based on the forward prices for the estimated month of settlement and the Company’s
estimated metal quantities delivered based on weighing and assay data. The Company believes changes in the underlying weight and
metal content are not significant to the sale as a whole and therefore do not preclude the recognition of revenue upon transfer of
control. The Company’s provisional gold and copper concentrate sales will continue to contain an embedded derivative that is
required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the gold
and copper concentrates at the prevailing indices’ prices at the time of sale. The embedded derivative, which does not qualify for
hedge accounting, is marked to market through earnings each period prior to final settlement.
The Company will adopt the new guidance effective January 1, 2018. The guidance may be applied retrospectively for all
periods presented or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial
application. The Company will adopt the guidance retrospectively with the cumulative effect of initially applying the amended
guidance recognized at January 1, 2018. Based on the contracts outstanding as of December 31, 2017, there will be no cumulative
effect adjustment required to be recognized at January 1, 2018.
Under the Company’s adoption approach, results for reporting periods beginning after January 1, 2018, will be presented in the
Consolidated Financial Statements under the new guidance, while prior period amounts will not be adjusted and continue to be
reported under the guidance in effect for those periods. In the related disclosures, results for reporting periods beginning after January
1, 2018, will be presented under prior guidance along with prior period amounts for comparative purposes. The Company plans to
provide expanded disclosures that will include gold revenue from doré production, gold and copper revenue from concentrate sales
and copper revenue from cathode sales, as well as information pertaining to receivable balances, and revenue recognized in the current
reporting period related to changes in price and metal quantity from performance obligations satisfied in previous periods, if material.
Investments
In January 2016, ASU No. 2016-01 was issued related to financial instruments. The new guidance requires entities to measure
equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize
any changes in fair value in net income. This new guidance also updates certain disclosure requirements for these investments. This
update is effective in fiscal years, including interim periods, beginning after December 15, 2017, and upon adoption, an entity should
apply the amendments with the cumulative effect of initially applying the guidance recognized at January 1, 2018. Early adoption is
not permitted. The Company expects the updated guidance to result in a reclassification of unrealized holding gains and losses and
deferred income taxes related to investments in marketable equity securities from Accumulated other comprehensive income (loss) to
Retained earnings in the Consolidated Balance Sheets upon adoption. Accumulated other comprehensive income (loss) at December
31, 2017, included $115 of net unrealized holding losses and deferred income taxes related to marketable equity securities that will be
reclassified to Retained earnings upon adoption.
111
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Leases
In February 2016, ASU No. 2016-02 was issued related to leases, which was further amended in September 2017 by ASU No.
2017-13 and in January 2018 by ASU 2018-01. The new guidance modifies the classification criteria and requires lessees to recognize
the assets and liabilities arising from most leases on the balance sheet. This update is effective in fiscal years, including interim
periods, beginning after December 15, 2018, and early adoption is permitted. The Company anticipates adopting the new guidance
effective January 1, 2019.
The Company has begun its assessment of the new guidance and the impact it will have on the Consolidated Financial
Statements and disclosures, and expects to complete its analysis in 2018. To date, the Company has reviewed a sample of contracts
that are representative of the Company’s various contracts. Management is still completing its assessment of the impacts; however,
based on the sample reviewed, management anticipates certain service contracts will contain embedded leases under the revised
guidance. The Company continues to assess other potential impacts of the new standard. Based on preliminary findings, the Company
expects that the majority of its identified leases will be required to be reported on the Consolidated Balance Sheets; however, the
Company expects there will be minimal impacts to the Consolidated Statements of Operations. The Company expects to have an
update to the impacts of the standard in the second quarter of 2018.
Statement of cash flows
In August 2016, ASU No. 2016-15 was issued related to the statement of cash flows. This new guidance addresses eight specific
cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are
presented and classified in the statement of cash flows. This update is effective in fiscal years, including interim periods, beginning
after December 15, 2017, and early adoption is permitted. While the Company had anticipated early adoption of this guidance, upon
further analysis the Company has determined it will adopt the guidance effective January 1, 2018. Upon adoption, the Company
expects to reclassify $196 of Repayment of debt, previously reported as a cash outflow from financing activities, to operating activities
on the Consolidated Statements of Cash Flows related to accreted interest from the debt discount on the 2017 convertible notes repaid
in July 2017. Additionally, the Company expects to reclassify $15 and $6 for 2017 and 2016, respectively, of Acquisitions, net
previously reported as a cash outflow from investing activities, to operating activities on the Consolidated Statements of Cash Flows
related to contingent consideration payments.
Intra-entity transfers
In October 2016, ASU No. 2016-16 was issued related to the intra-entity transfers of assets other than inventory. This new
guidance requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when
the transfer occurs. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017, and early
adoption is permitted. The Company anticipates adopting this new guidance effective January 1, 2018, and does not expect the
adoption to have an impact on the Consolidated Financial Statements or disclosures.
Employee benefits
In March 2017, ASU No. 2017-07 was issued related to the presentation of net periodic pension and postretirement cost. The
new guidance requires the service cost component of net benefit costs to be classified similar to other compensation costs arising from
services rendered by employees. Other components of net benefit costs are required to be classified separately from the service cost
and outside income from operations. This update is effective in fiscal years, including interim periods, beginning after December 15,
2017. The Company anticipates adopting this new guidance effective January 1, 2018. The adoption of this guidance will result in the
recognition of other components of net benefit costs within Other income, net rather than Costs applicable to sales or General and
administrative and will no longer be included in costs that benefit the inventory/production process. The adoption of this guidance will
not have a material impact on the Consolidated Financial Statements or disclosures.
Hedging
In August 2017, ASU No. 2017-12 was issued related to hedge accounting. The new guidance expands the ability to hedge
nonfinancial risk components, eliminates the current requirement to separately measure and report hedge ineffectiveness, and requires
the entire change in fair value of a hedging instrument to be presented in the same income statement line as the hedged item, when
112
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
reclassified from Accumulated other comprehensive income (loss). The guidance also eases certain hedge effectiveness documentation
and assessment requirements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018,
and early adoption is permitted. The Company anticipates adopting this new guidance effective January 1, 2018, and does not expect
the adoption to have a material impact on the Consolidated Financial Statements or disclosures.
Other comprehensive income reclassifications related to tax reform
In February 2018, ASU 2018-02 was issued allowing companies the option to reclassify to retained earnings the tax effects
related to items in Accumulated other comprehensive income (loss) as a result of the Tax Cuts and Jobs Act that was enacted on
December 22, 2017. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early
adoption is permitted. This guidance should be applied either in the period of adoption or retrospectively to each period in which the
effects of the change in the U.S. federal income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is still completing
its assessment of the impacts including the timing of adoption.
NOTE 3 DISCONTINUED OPERATIONS
The details of our Net income (loss) from discontinued operations, net of tax are set forth below:
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Batu Hijau contingent consideration . . . . . . . . . . . . . . . . . . . . . . . .
Batu Hijau operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations . . . . . . . . . . . . $
(44) $
6
—
—
(38) $
(50) $
—
517
(600)
(133) $
27
—
418
—
445
Years Ended December 31,
2016
2015
2017
The Holt Royalty Obligation
Discontinued operations include a retained royalty obligation (“Holt”) to Holloway Mining Company. Holloway Mining
Company, which owned the Holt-McDermott property, was sold to St. Andrew Goldfields Ltd. (“St. Andrew”) in 2006. St. Andrew
was acquired by Kirkland Lake Gold Ltd. (formerly known as Kirkland Lake Gold Inc.) in January 2016. In 2009, the Superior Court
issued a decision finding Newmont Canada Corporation (“Newmont Canada”) liable for a royalty on production from Holt, which
Newmont Canada appealed. In May 2011, the Ontario Court of Appeal upheld the Superior Court ruling finding Newmont liable for
the royalty obligation, which equals 0.013% of net smelter returns multiplied by the quarterly average gold price, minus a 0.013% of
net smelter returns. There is no cap on the royalty and it will increase or decrease with changes in gold price, discount rate, and gold
production scenarios. Refer to Note 16 for additional information on the Holt royalty.
At December 31, 2017 and 2016, the estimated fair value of the Holt royalty obligation was $243 and $187, respectively.
Changes to the estimated fair value resulting from periodic revaluations are recorded to Net income (loss) from discontinued
operations, net of tax. For the years ended 2017, 2016 and 2015, the Company recorded a gain (loss) of $(44), $(50) and $27, net of
tax benefit (expense) of $24, $19 and $(11), respectively, related to the Holt royalty obligation. During 2017, 2016 and 2015, the
Company paid $12, $11 and $12, respectively, related to the Holt royalty obligation.
The Batu Hijau Transaction
On November 2, 2016, Nusa Tenggara Partnership B.V. (owned 56.25% by the Company and 43.75% by Nusa Tenggara
Mining Corporation, majority owned by Sumitomo Corporation) completed the sale and purchase agreement with PT Amman Mineral
Internasional (“PTAMI”) to sell its 56% ownership interest in PTNNT, which operated the Batu Hijau copper and gold mine in
Indonesia. In addition, NVL (USA) Limited (“NVL”), a wholly owned subsidiary of the Company, (i) sold a loan made to PT Pukuafu
Indah (“PTPI”), secured by PTPI’s 17.8% interest in PTNNT, to PTAMI, and (ii) consented to PT Indonesia Masabaga Investama
(“PTIMI”) selling its 2.2% interest in PTNNT to PTAMI with sale proceeds applied toward repayment of an NVL loan to PTIMI.
Through these transactions, Newmont has effectively sold its 48.5% economic interest in PTNNT to PTAMI and has no remaining
interest.
113
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The sales proceeds received by the Company for its 48.5% economic interest in PTNNT includes $920 in cash attributable to
Newmont that was received, as well as contingent payments totaling up to $403 attributable to Newmont. The contingent payments
include (i) a Metal Price Upside deferred payment of up to $133, (ii) an Elang Development deferred payment of $118 and (iii) a
Contingent Payment of up to $152. The contingent payment amounts are determined based on certain metal price, shipment or project
development criteria, as described below.
The Metal Price Upside contingent payment of up to $133 is payable for any quarter in which the London Metal Exchange
(“LME”) quarterly average copper price exceeds $3.75 per pound. It is calculated as 30% of the product of (i) the difference between
the LME quarterly average copper price and $3.75 and (ii) 96.5% of the total pounds of copper contained in shipments of mineral
products mined or produced from Batu Hijau that arrived in a buyers’ or customers’ designated port for delivery during the previous
quarter. The Elang Development deferred payment totaling $118 is payable no later than the first anniversary of the first shipment of
any form of saleable copper, gold or silver product produced from the Elang development area. The Contingent Payment of up to $152
is payable (i) as a payment of $76 if in any year after 2022 in which there is production from Phase 7 of the Batu Hijau mine and the
LME annual average copper price is $2.75 or more per pound and (ii) if the full Contingent Payment amount has not already been
paid, a payment of $76 in any year in which the LME annual average copper price in respect to such year is $3.25 or more per pound
and after both the second anniversary of the first shipment of concentrate (or any other form of saleable copper, gold or silver product)
produced from the Elang development area and December 31, 2023. The Contingent Payment and the Elang Development deferred
payment deeds are derivatives under ASC 815 and were recorded at fair value of $23 and $13 as of December 31, 2017 and 2016,
respectively. Changes to the estimated fair value resulting from periodic revaluations are recorded net of tax to Net income (loss) from
discontinued operations. For the year ended 2017, the Company recorded a gain of $6, net of tax expense of $4 related to the
contingent consideration. For further information about the valuation of the Batu Hijau Contingent Consideration, see Note 16.
Newmont recognized a loss on sale of $600 in 2016, calculated using the gross cash proceeds of $920 and certain contingent
payments deemed to be derivatives, less the carrying value of the PTNNT disposal group and selling costs.
Net income (loss) from discontinued operations, net of tax in the Consolidated Statements of Operations that relates to Batu
Hijau consists of the following:
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,668 $
1,644
Years Ended December 31,
2016
2015
Costs and expenses:
Costs applicable to sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced projects, research and development . . . . . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense (income), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income and mining tax and other items . . . . . . . . . . . . . . .
Income and mining tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on sale of Batu Hijau, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations attributable to Newmont
668
134
14
2
10
(1)
827
(15)
826
(309)
517
(600)
(83)
(274)
772
137
13
7
6
10
945
(28)
671
(253)
418
—
418
(224)
stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(357) $
194
(1)
Excludes Depreciation and amortization and Reclamation and remediation.
The Consolidated Statements of Comprehensive Income (Loss) were not impacted by discontinued operations as PTNNT did
not have any Other comprehensive income (loss).
114
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Cash flows from Batu Hijau consisted of the following:
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . $
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) Batu Hijau discontinued operations . . . . . . . . $
880 $
(46)
(331)
503 $
569
(90)
(225)
254
Years Ended December 31,
2016
2015
During the second quarter and third quarter of 2016, the Company paid $140 and $190, respectively, extinguishing the PTNNT
revolving credit facility.
NOTE 4 BUSINESS ACQUISITION
On June 8, 2015, the Company announced an agreement with AngloGold Ashanti Limited to acquire 100% ownership in the
Cripple Creek & Victor (“CC&V”) gold mining business in Colorado. CC&V is a surface mine with heap leach operations that
provides ore to a crusher and leaching facilities. During 2015, the Company received $675 in net proceeds from a common stock
issuance. Newmont used the proceeds, supplemented with cash from the Company’s balance sheet, to fund the acquisition. On
August 3, 2015, the Company completed the acquisition of CC&V for $821, plus a 2.5% net smelter return royalty on future gold
production from underground ore which had no fair value at the acquisition date. In connection with the acquisition, the Company
incurred acquisition costs of $12 for the year ended December 31, 2015 which were recorded in Other expense, net.
The acquisition is not material to the Company's results of operations, individually or in the aggregate; as a result, no pro forma
financial information is provided.
The Company retained an independent third-party appraiser to assist in the valuation. In valuing acquired assets and assumed
liabilities, fair values were based on, but not limited to quoted market prices, where available; expected future cash flows; current
replacement cost for similar capacity for certain fixed assets; market rate assumptions for contractual obligations; and appropriate
discount rates.
The fair value measurement of inventories, stockpiles and ore on leach pads, property, plant and mine development, and
reclamation and remediation were based, in part, on significant inputs not observable in the market and thus represent a Level 3
measurement.
In accordance with the acquisition method of accounting, the purchase price of CC&V has been allocated to the acquired assets
and assumed liabilities based on their estimated fair values on the acquisition date. The fair value estimates were based on, but not
limited to quoted market prices, where available; expected future cash flows based on estimated reserve quantities; costs to produce
and develop reserves; current replacement cost for similar capacity for certain fixed assets; and appropriate discount rates and growth
rates. The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable acquired
assets and liabilities assumed has been recorded as mineral interest.
During the second quarter of 2016, the final valuation of acquired assets and liabilities assumed was completed. There were no
adjustments to the purchase price allocation since December 31, 2015.
115
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following table summarizes the final purchase price allocation for CC&V:
Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and mine development, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Liabilities:
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
2
15
75
1
93
671
175
939
3
28
2
12
45
10
63
118
821
NOTE 5 SEGMENT INFORMATION
The Company has organized its operations into four geographic regions. The geographic regions include North America, South
America, Australia and Africa and represent the Company’s operating segments. The results of these operating segments are reviewed
by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segments and assess their
performance. As a result, these operating segments represent the Company’s reportable segments. Notwithstanding this structure, the
Company internally reports information on a mine-by-mine basis for each mining operation and has chosen to disclose this
information on the following tables. Income (loss) before income and mining tax and other items from reportable segments does not
reflect general corporate expenses, interest (except project-specific interest) or income and mining taxes. Intercompany revenue and
expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for
evaluating segment performance. Newmont’s business activities that are not considered operating segments are included in Corporate
and Other. Although they are not required to be included in this footnote, they are provided for reconciliation purposes.
In the first quarter of 2017, the Company renamed its Asia Pacific reporting segment to Australia. Segment results for the prior
period have been retrospectively revised to reflect this change.
116
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Unless otherwise noted, we present only the reportable segments of our continuing operations in the tables below. The financial
information relating to the Company’s segments is as follows:
Costs
Applicable
Depreciation Projects, Research
and Development
and
Advanced
Income (Loss)
before Income
and Mining Tax
Total
Capital
Sales
to Sales Amortization and Exploration and Other Items Assets Expenditures(1)
795 $
221 $
18 $
139
$ 2,292
$
174
Year Ended December 31, 2017
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,217 $
Phoenix:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Phoenix . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other North America . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . .
257
88
345
465
219
575
—
2,821
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other South America . . . . . . . . . . . . . . . . . . . . . .
South America . . . . . . . . . . . . . . . . . . . . . . . . .
671
643
—
1,314
Boddington:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Boddington . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Australia . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
981
227
1,208
514
458
—
2,180
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
439
594
—
1,033
181
55
236
226
59
285
—
1,601
504
238
—
742
562
108
670
251
234
—
1,155
268
272
—
540
47
15
62
63
74
124
1
545
134
91
14
239
113
22
135
67
19
6
227
72
154
1
227
5
9
23
10
26
91
41
14
43
98
2
21
9
8
40
24
10
6
40
31
163
63
153
(29)
520
(64)
297
(72)
161
372
181
190
(37)
706
70
152
(13)
209
884
1,142
1,083
897
676
6,974
1,388
967
1,661
4,016
2,108
688
403
54
3,253
1,685
1,049
1
2,735
25
52
10
33
9
303
51
105
—
156
80
108
21
5
214
181
26
—
207
10
890
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,348 $
—
—
4,038 $
11
1,249 $
53
322 $
(504)
1,092
3,585
$ 20,563
$
(1)
Includes an increase in accrued capital expenditures of $24; consolidated capital expenditures on a cash basis were $866.
117
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Costs
Applicable
Depreciation Projects, Research
and Development
and
Advanced
Income (Loss)
before Income
and Mining Tax
Total
Capital
Sales
to Sales Amortization and Exploration and Other Items Assets Expenditures(1)
Year Ended December 31, 2016
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,182 $
Phoenix:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Phoenix . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other North America . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . .
248
86
334
563
27
491
—
2,597
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other South America . . . . . . . . . . . . . . . . . . . . . .
South America . . . . . . . . . . . . . . . . . . . . . . . . .
792
117
—
909
Boddington:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Boddington . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Australia . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
973
164
1,137
575
467
—
2,179
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
436
590
—
1,026
797 $
200 $
19 $
144
$ 2,278 $
173
164
99
263
234
4
216
—
1,514
525
34
—
559
530
126
656
238
257
—
1,151
313
235
—
548
51
27
78
51
5
108
1
443
275
12
14
301
110
24
134
82
19
9
244
94
127
1
222
1
8
20
11
12
71
35
24
36
95
1
13
5
8
27
28
8
2
38
(20)
266
(3)
150
(11)
526
(1,152)
46
(55)
(1,161)
328
242
184
(25)
729
(8)
214
(8)
198
917
1,135
1,123
1,042
696
7,191
1,549
984
1,677
4,210
2,075
621
379
63
3,138
1,734
1,232
2
2,968
22
37
119
59
9
419
83
221
—
304
65
145
20
4
234
87
22
—
109
Corporate and Other . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,711 $
—
—
3,772 $
10
1,220 $
51
282 $
(506)
(214)
3,524
$ 21,031 $
11
1,077
(1)
Includes a decrease in accrued capital expenditures of $56; consolidated capital expenditures on a cash basis were $1,133.
118
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Costs
Applicable
Depreciation Projects, Research
and Development
and
Advanced
Income (Loss)
before Income
and Mining Tax
Total
Capital
Sales
to Sales Amortization and Exploration and Other Items Assets Expenditures(1)
Year Ended December 31, 2015
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,027 $
Phoenix:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other North America . . . . . . . . . . . . . . . . . . . . . . .
North America . . . . . . . . . . . . . . . . . . . . . . . . . .
221
109
330
551
—
91
—
1,999
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other South America . . . . . . . . . . . . . . . . . . . . . . .
South America . . . . . . . . . . . . . . . . . . . . . . . . . .
1,070
—
—
1,070
Boddington:
Gold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Copper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Boddington . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waihi (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Australia . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
910
171
1,081
504
136
360
—
2,081
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
387
548
—
935
790 $
198 $
16 $
12
$ 2,240
$
270
163
91
254
246
—
44
—
1,334
564
—
—
564
570
140
710
225
55
272
—
1,262
206
212
—
418
42
21
63
51
—
19
1
332
320
—
14
334
113
26
139
82
14
21
16
272
53
96
—
149
3
8
22
3
8
60
37
12
46
95
3
7
3
3
5
21
24
8
2
34
(12)
240
(22)
23
8
249
40
(12)
(66)
(38)
222
192
59
65
(46)
492
74
227
(13)
288
1,002
1,141
1,003
1,043
711
7,140
2,628
764
1,688
5,080
2,066
539
—
391
71
3,067
1,752
1,241
2
2,995
25
48
128
66
8
545
100
356
—
456
58
98
12
21
5
194
92
45
—
137
Corporate and Other (3) . . . . . . . . . . . . . . . . . . . . . .
Consolidated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,085 $
—
—
3,578 $
15
1,102 $
72
282 $
(696)
295
6,848
$ 25,130
$
38
1,370
Includes an increase in accrued capital expenditures of $59; consolidated capital expenditures on a cash basis were $1,311.
In October 2015, the Company sold the Waihi mine.
(1)
(2)
(3) Total assets for Corporate and Other include assets held for sale related to our discontinued operations. See Note 3 for additional information
regarding our discontinued operations.
119
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Revenues from sales attributed to countries based on the customer’s location were as follows:
Years Ended December 31,
2015
2016
2017
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,490 $ 5,413 $ 4,954
39
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
334
Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
208
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
166
104
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
69
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111
Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,348 $ 6,711 $ 6,085
657
384
310
168
96
91
87
65
148
298
283
191
124
70
59
125
As gold can be sold through numerous gold market traders worldwide, the Company is not economically dependent on a limited
number of customers for the sale of its product. In 2017, sales to Toronto Dominion Bank were $2,727 (37%) and JPMorgan Chase
were $1,380 (19%). In 2016, sales to Toronto Dominion Bank were $1,829 (27%), JPMorgan Chase were $1,471 (22%), Bank of
Nova Scotia were $1,067 (16%) and HSBC were $952 (14%) of total gold sales. In 2015, sales to Bank of Nova Scotia were $1,074
(14%) and sales to Credit Agricole Corporate and Investment were $762 (10%) of total gold sales.
The Company sells copper predominantly in the form of copper concentrates which are sold directly to smelters located in Asia
and to a lesser extent North America and Europe. The copper concentrates are sold under long-term supply contracts with processing
fees based on the demand for these concentrates in the global market place. In Nevada, the Company also produces copper cathode
which is sold to one customer in the North American market.
Long-lived assets, excluding deferred tax assets, investments and restricted assets, were as follows:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Peru . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Suriname . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At December 31,
2016
2017
6,625
6,490 $
2,753
2,833
2,423
2,401
2,109
2,008
818
835
—
11
$ 14,578 $ 14,728
NOTE 6 RECLAMATION AND REMEDIATION
The Company’s mining and exploration activities are subject to various domestic and international laws and regulations
governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more
restrictive. The Company conducts its operations to protect public health and the environment and believes its operations are in
compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future,
expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated
future reclamation costs are based principally on current legal and regulatory requirements.
In December 2016, the Company completed a comprehensive study of the Yanacocha long-term mining and closure plans as
part of the requirement to submit an updated closure plan to Peruvian regulators every five years. As a result, the Company recorded
an increase to the reclamation obligation at Yanacocha of $425. This increase to the reclamation obligation resulted in an increase to
the recorded asset retirement cost asset of $348 related to the producing portions of the mine and a non-cash charge to reclamation
expense for the quarter ended December 31, 2016 of $77 related to the areas of Yanacocha’s operations no longer in production. The
increase to the reclamation obligation was primarily due to higher estimated long-term water management costs, heap leach
earthworks and related support activities. There were minimal changes to the updated closure plan in 2017 prior to submitting to
120
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Peruvian regulators in September 2017. The regulators completed their review and approved the updated closure plan in November
2017.
The Company’s Reclamation and remediation expense consisted of:
Years Ended December 31,
2015
2016
2017
Reclamation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Reclamation accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total reclamation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32 $
100
132
83 $
75
158
5
74
79
Remediation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remediation accretion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total remediation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
5
45
$
177 $
16
5
21
179 $
170
4
174
253
Reclamation expense decreased in 2017 compared to 2016 and increased in 2016 compared to 2015, primarily due to the 2016
revision in Yanacocha’s closure plan which resulted in an increase in reclamation expense related to operations no longer in
production. In 2017, additional reclamation adjustments were recorded for revisions in the closure plan for the Rain mine, which is a
non-operating site that is a part of the Carlin mine complex.
Remediation expense increased in 2017 compared to 2016, primarily due to increased water management and monitoring costs
at the Resurrection and San Luis remediation sites, as well as increased costs for project activities at the Midnite mine and Dawn mill
sites. Remediation expense decreased in 2016 compared to 2015, primarily due to increased costs in 2015 related to the Midnite mine
site.
The following is a reconciliation of Reclamation and remediation obligations:
Reclamation Remediation Total
Balance at January 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Additions, changes in estimates and other . . . . . . . . . . . . . . . . . . . . . . . . .
Payments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions, changes in estimates and other . . . . . . . . . . . . . . . . . . . . . . . . .
Payments and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,300 $
441
(24)
75
1,792
107
(34)
100
1,965 $
318 $
5
(30)
5
298
30
(44)
5
289 $
1,618
446
(54)
80
2,090
137
(78)
105
2,254
The current portion of reclamation was $59 and $28 at December 31, 2017 and 2016, respectively, and is included in Other
current liabilities. The current portion of remediation was $41 and $33 at December 31, 2017 and 2016, respectively, and is included
in Other current liabilities. At December 31, 2017 and 2016, $1,965 and $1,792, respectively, were accrued for reclamation
obligations relating to operating and formerly operating properties. In addition, the Company is involved in several matters concerning
environmental remediation obligations associated with former, primarily historic, mining activities. Generally, these matters concern
developing and implementing remediation plans at the various sites involved. At December 31, 2017 and 2016, $289 and $298,
respectively, were accrued for such environmental remediation obligations. As of December 31, 2017 and 2016, environmental
remediation liabilities for historic mining operations were lower by $72 and $66, respectively, as a result of discounting water
treatment costs using discount rates ranging between 2% and 5% and between 2% and 6%, respectively.
Additions, changes in estimates and other, increased the reclamation obligations by $107 in 2017, primarily due to revised cost
estimates from ongoing study work being conducted at Rain, a non-operating site that is a part of the Carlin mine complex in North
121
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
America and Boddington in Australia, as well as increased disturbance from 2017 mining activity at Akyem. The reclamation
obligations increased by $441 in 2016, primarily due to the revision in Yanacocha’s closure plan outlined above.
Additions of $30 in 2017 for remediation obligations at Corporate were primarily due to higher estimated water management
and monitoring costs at the Resurrection and San Luis remediation sites, as well as increased costs for project activities at the Midnite
mine and Dawn Mill remediation sites. Additions of $5 in 2016 for remediation obligations were primarily related to the Con mine.
Non-current restricted cash held for purposes of settling asset retirement obligations was $38 and $23, at December 31, 2017
and 2016, respectively. Of the amount in 2017, $25 is related to the Ahafo and Akyem mines in Ghana, Africa, $6 is related to the Con
mine in Yellowknife, NWT, Canada, $6 is related to the San Jose Reservoir in Yanacocha, Peru, and $1 is related to the Midnite mine
site in Washington State. Of the amount in 2016, $14 is related to the Ahafo and Akyem mines, $7 is related to the Con mine, $1 is
related to the Midnite mine site and $1 is related to the San Jose Reservoir.
Included in Other non-current assets at December 31, 2017 and 2016, are $64 and $61, respectively, of non-current restricted
investments, which are legally pledged for purposes of settling reclamation and remediation obligations related to the San Jose
Reservoir, Midnite mine site and for various locations in Nevada.
NOTE 7 IMPAIRMENT OF LONG-LIVED ASSETS
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
South America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Years Ended December 31,
2016
2015
2017
— $
1 $
4
6
—
4
14 $ 977 $
976
—
—
—
—
44
—
6
6
56
Impairment of long-lived assets totaled $14, $977 and $56 in 2017, 2016 and 2015, respectively. The 2017 impairments related
to assets in South America, Australia and Corporate.
The 2016 impairments were primarily related to Yanacocha, reported in the South America segment. The Company determined
that an impairment indicator existed as the Company completed a comprehensive study of the Yanacocha long-term mining and
closure plans as part of the requirement to submit an updated closure plan to Peruvian regulators every five years. As a result of the
impairment indicator, a recoverability test was performed and the Company concluded the Property, plant and mine development, net
at Yanacocha was impaired. The Company measured the impairment by comparing the total fair value of existing operations using the
income approach and the fair value of exploration potential using the income and market approach to the carrying value of the
corresponding assets. Refer to Note 16, Fair Value Accounting, for detail of the assumptions used in the determination of the fair
value of the long-lived assets tested for impairment. As a result, a non-cash impairment charge of $970 was recorded during the fourth
quarter of 2016. For further information regarding management’s assessment of the Yanacocha closure plan, see Note 6.
The 2015 impairments were primarily related to assets in South America, non-essential equipment unrelated to operations at
Corporate and Other and an intangible asset in Africa.
NOTE 8 OTHER EXPENSE, NET
Years Ended December 31,
2016
2015
2017
Restructuring and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Acquisition cost adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ghana Investment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
14
2
—
16
32
$
$
32
10
—
16
58
$
$
34
19
27
36
116
122
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Restructuring and other. Restructuring and other primarily represents certain costs associated with severance and outsourcing
for all periods presented. The costs also include system integration costs during 2016 related to our acquisition of CC&V in August
2015.
Acquisition cost adjustments. Acquisition cost adjustments represent net adjustments to the contingent consideration and related
liabilities associated with the acquisition of the final 33.33% interest in Boddington in June 2009 for all periods presented. The
adjustments also include costs during the third and fourth quarter of 2015 related to our acquisition of CC&V in August 2015.
Ghana Investment Agreement. In December 2015, the Company paid $27 for the ratification of revised investment agreements
by Ghana’s Parliament.
NOTE 9 OTHER INCOME, NET
Years Ended December 31,
2016
2015
2017
Foreign currency exchange, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on asset and investment sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami insurance proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on debt repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gain on deconsolidation of TMAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(28)
28
23
13
—
—
—
18
54
$
$
(9)
11
108
—
(55)
—
—
14
69
$
$
31
6
118
—
—
(115)
76
19
135
Foreign currency exchange, net. Although the majority of the Company’s balances are denominated in U.S. dollars, foreign
currency exchange gains (losses) are recognized on balances to be satisfied in local currencies. These balances primarily relate to the
timing of payments for employee-related benefits and other current liabilities in Australia, Peru and Suriname.
Gain on asset and investment sales, net. In June 2017, the Company exchanged its interest in the Fort á la Corne joint venture
for equity ownership in Shore Gold Inc. (“Shore Gold”), resulting in a pre-tax gain of $15. For additional information regarding this
transaction, see Note 18.
In March 2016, the Company sold its investment in Regis Resources Ltd. (“Regis”) for $184, resulting in a pre-tax gain of $103.
The cost of the investment sold was determined using the specific identification method.
In March 2015, the Company recorded a gain of $38 from sales of Hemlo mineral rights in Canada and the Relief Canyon mine
in Nevada. In July 2015, the Company recorded a gain of $53 related to the sale of its 60.64% ownership interest in European Gold
Refinery Holdings (“EGR”). In October 2015, the Company recorded a gain of $10 related to the sale of Waihi.
Tanami insurance proceeds. In June 2017, the Company recorded business interruption insurance proceeds of $13 associated
with the heavy rainfall at Tanami during the first quarter of 2017.
Loss on debt repayment. In 2016, the Company recorded charges of $55 from the debt tender offer on its 2019 Senior Notes and
2039 Senior Notes in March 2016 and the extinguishment of its 2022 Senior Notes and associated forward starting swaps, reclassified
from Other Comprehensive Income (Loss), in November 2016.
Impairment of investments. During 2015, the Company recognized investment impairments for other-than-temporary declines in
value, primarily related to holdings of Regis for $72, Gabriel Resources Ltd. for $24, Pilot Gold for $8 and UltraGold for $7.
Gain on deconsolidation of TMAC. In July 2015, Newmont determined that TMAC Resources, Inc. (“TMAC”) was no longer
considered a variable interest entity and should no longer be consolidated into Newmont’s financial results due to a number of
financing events, which took place during the year. Newmont deconsolidated the assets, liabilities and noncontrolling interest related
123
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
to TMAC and recognized a gain of $76. The fair value of the retained investment was valued utilizing the market approach applying
the initial public offering share price. Newmont’s retained investment in TMAC is accounted for as an equity method investment.
NOTE 10 INCOME AND MINING TAXES
The Company’s Income and mining tax benefit (expense) consisted of:
Years Ended December 31,
2016
2015
2017
Current:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(40) $
(290)
(330)
101 $
(230)
(129)
(773)
(22)
(795)
(1,125) $
(547)
113
(434)
(563) $
18
(211)
(193)
54
(252)
(198)
(391)
The Company’s Income (loss) before income and mining tax and other items consisted of:
Years Ended December 31,
2016
2015
2017
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
245 $
847
1,092 $
(4) $
(210)
(214) $
(283)
578
295
The Company’s Income and mining tax benefit (expense) differed from the amounts computed by applying the United States
statutory corporate income tax rate for the following reasons:
Income (loss) before income and mining tax and other items . . . .
Tax at statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reconciling items:
Re-measurement due to the Tax Cuts and Jobs Act(1) . . . . . . . . .
Tax restructuring related to the Tax Cuts and Jobs Act (2) . . . . .
Percentage depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Change in valuation allowance on deferred tax assets . . . . . . . .
Mining and other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
U.S. tax effect of noncontrolling interest attributable to non-U.S.
investees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax impact on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of foreign earnings, net of credits . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
Years Ended December 31,
2017
$
1,092
2016
$
(214)
2015
$
295
35 %
$
(382)
35 %
$
75
35 %
$
(103)
28
36
(7)
7
4
(306)
(395)
81
(78)
(41)
—
—
40
(226)
(29)
—
—
—
—
103 %
1
—
(4)
(1)
(1,125)
$
(100)
17
—
—
(263)%
$
—
—
85
(485)
(61)
(213)
36
—
—
(563)
—
—
(19)
51
20
41
7
(6)
4
133 %
$
—
—
56
(153)
(58)
(120)
(20)
19
(12)
(391)
(1)
Includes the release of a valuation allowance on AMT credits of $48 and elimination of $8 of deferred tax assets due to changes to executive
compensation deductions.
(2) See discussion below.
124
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Factors that Significantly Impact Effective Tax Rate
The Tax Cuts and Jobs Act
The most influential factors that impact the effective tax rate for the current reporting period stem from the Tax Cuts and Jobs
Act (“the Act”) which was enacted on December 22, 2017. The Act significantly changes U.S. income tax law and is the first major
overhaul of the federal income tax code in more than 30 years. Key provisions of the Act that impact Newmont include: (i) reduction
of the U.S. federal corporate income tax rate from 35% to 21%, (ii) repeal of the Corporate Alternative Minimum Tax (“AMT”)
system (iii) replacement of the worldwide taxation system with a territorial tax system which exempts certain foreign operations from
U.S. taxation, and (iv) further limitation on the deductibility of certain executive compensation. Other provisions of the Act that do not
have a current impact on Newmont but could impact the Company in the future include: (i) modification of earnings calculations for
certain foreign subsidiaries that were previously tax deferred to a one-time tax, (ii) creation of a new minimum tax on certain foreign
earnings and a new base erosion anti-abuse tax, (iii) repeal of the domestic production deductions, (iv) allowance for immediate
capital expensing of certain qualified property, (v) limitation on the deduction for net interest expense incurred by a U.S. corporation,
and (vi) modification and/or repeal of a number of other international provisions.
The Company has completed its assessment for the income tax effects of the Act for the following items:
• Repeal of the corporate AMT system: The Company’s AMT credits as of December 31, 2017 will be refunded over the
next five years. The Company has determined that it will receive a refund of existing AMT credits equal to $52. The
valuation allowance previously recorded against these credits has been released for this amount and a tax benefit of $48
was recorded as a component of income tax expense from continuing operations. The Company’s accounting policy
regarding the balance sheet presentation of the credits is to continue to reflect the balance as a deferred tax asset. Once a
return is filed claiming the credit, the amount will be presented as a tax receivable.
• One-time tax on deferred foreign earnings: The Company does not have any undistributed earnings from its foreign
subsidiaries and is not impacted by the one-time transition tax. Going forward, the Company will recognize any effects
of global intangible low-taxed income or GILTI, as a component of income tax expense in the period the tax arises.
The Company has not completed its assessment for the income tax effects of the Act but has recorded a reasonable estimate of
the effects for the items below. The Company anticipates completing the analysis for these estimates, within the one year
measurement period for the following items:
• Re-measurement of deferred tax assets and liabilities: Deferred tax assets and liabilities attributable to the U.S. were re-
measured from 35% to the reduced tax rate of 21%. The Company recorded a provisional amount of $346 for the re-
measurement. The Company is still analyzing certain aspects of the Act and refining the calculations, which could
potentially affect the measurement of these balances. Information needed to complete the accounting is as follows: (i) the
completion of the analysis needed to appropriately separate foreign attributable assets from U.S. assets, and (ii) filing of
both U.S. and foreign tax returns for the 2017 tax years relative to the subsidiaries.
• Tax restructuring decisions implemented as a result of the Act: Due to changes the Act made to certain international tax
provisions, it was prudent for the Company to restructure the holding of its non-U.S. operations for U.S. federal income
tax purposes. This was accomplished by executing and filing various “check the box” elections made with respect to
certain non-U.S. subsidiaries of the Company. The elections resulted in the conversions of these subsidiaries from
branches and/or foreign partnerships to regarded foreign corporations. The conversion resulted in the application of the
accounting rules which restrict the recognition of a deferred tax asset for the excess of the tax basis over the financial
reporting basis of these investments (outside basis difference) until such time that it is apparent that the temporary
difference will reverse in the foreseeable future. The Company recorded a provisional amount of $395 relating to the
removal of certain deferred tax assets carried on the U.S. parent books. It also includes the removal of the deferred tax
asset representing the future foreign tax credits attributable to these operations. Information needed to complete the
accounting is as follows: (i) the completion of the analysis needed to appropriately separate foreign attributable assets
from U.S. assets, and (ii) filing of both U.S. and foreign tax returns for the 2017 tax years relative to the subsidiaries.
125
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
• Elimination of executive compensation exemptions: The Act made changes to the $1 million limit on deductible
compensation paid to certain executive employees. The Act eliminated exemptions for qualified performance based
compensation and compensation paid after termination and expanded the number of employees to which the limit
applies. The Company recorded a provisional amount of $8 for the impact of these changes related to the elimination of
deferred tax assets that are no longer realizable. The Company is still analyzing the impact of transitional rules in the
Act. The provisional amount may change upon the release of further guidance addressing these rules.
The Company has not completed its assessment for the income tax effects of the Act and is unable to calculate a reasonable
estimate of such effect for the items below. The Company anticipates completing the analysis for these items once regulatory guidance
is available, within the one year measurement period:
• Changes to international taxation: The Act modifies various aspects of international taxation and the application of these
changes to the current foreign tax credit system is unclear. These rules are complex and require further clarity through
the issuance of regulations and final technical interpretation. The Company has a deferred tax asset of $558 relating to
foreign tax credits that carry a full valuation allowance. Depending upon the final interpretation of the new Act, it may
be more likely than not that realization of a portion of the credits may occur. The Company has determined that a
reasonable estimate cannot be made at this time. Information needed to complete the accounting is as follows: (i) final
technical analysis of the new tax law, and (ii) finalization of necessary calculations, including an assessment on how
these new provisions will impact the utilization of these credits in the future.
• Sequestration charge on AMT credits: As stated above, the Company expects to receive a refund of existing AMT credits
as of December 31, 2017 of $52. The refund may or may not be subject to a 6.9% sequestration charge which could
amount to $4. The application of this charge is unclear at this time. Clarification on the application of this charge is
needed to complete the accounting for this item.
• Deferred tax assets and liabilities on amounts in accumulated other comprehensive income: The re-measurement of the
Company’s deferred tax assets and liabilities includes items that were originally recognized in accumulated other
comprehensive income. The effect of the re-measurement of these items is reflected in income from continuing
operations. As a result, the income tax effects of items within accumulated other comprehensive income do not reflect
the appropriate tax rate. This discrepancy is often referred to as “stranded tax effects”. Recently proposed accounting
guidance would require the Company to reclassify these stranded tax effects from accumulated other comprehensive
income to retained earnings. Final guidance is needed to complete the accounting for this item.
Other
Percentage depletion allowances (tax deductions for depletion that may exceed the tax basis in the mineral reserves) are
available to the Company under the income tax laws of the United States for operations conducted in the United States or through
branches and partnerships owned by U.S. subsidiaries included in the consolidated United States income tax return. These deductions
are highly sensitive to the price of gold and other minerals produced by the Company.
A valuation allowance is provided for those deferred income tax assets for which it is more likely than not that the related
benefits will not be realized. In determining the amount of the valuation allowance, we consider estimated future taxable income as
well as feasible tax planning strategies in each jurisdiction. If we determine that we will not realize all or a portion of our deferred
income tax assets, we will increase our valuation allowance. Conversely, if we determine that we will ultimately be able to realize all
or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation
allowance will be reduced.
On the basis of available information at December 31, 2017, the Company has provided a valuation allowance for certain
deferred tax assets where the Company believes it is more likely than not that some portion or all of such assets will not be realized.
The valuation allowance totaled $2,795 and $3,844 at December 31, 2017 and 2016, respectively. The Company released $41 of
valuation allowance on U.S. foreign tax credits due to a refund of Australian taxes related to the filing of amended tax returns for the
2011-2016 tax years.
126
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Changes in the Company’s U.S. foreign tax credits, due to U.S. tax restructuring related to U.S. tax reform, will not impact the
effective tax rate. These credits were utilized to offset gains on the conversions of non-U.S. subsidiaries from branches to regarded
foreign corporations, for which the Company will no longer carry a deferred tax asset on outside basis differences.
Changes in valuation allowance for other items such as depreciation in marketable securities are reflected in Other
comprehensive income (loss).
Mining taxes in Nevada, Peru and Australia represent state and provincial taxes levied on mining operations and are classified as
income taxes as such taxes are based on a percentage of mining profits.
The Company consolidates certain subsidiaries of which it does not own 100% of the outstanding equity. However, for tax
purposes, the Company is only responsible for the income taxes on the portion of the taxable earnings attributable to its ownership
interest of each consolidated entity.
Components of the Company's deferred income tax assets (liabilities) are as follows:
Deferred income tax assets:
Property, plant and mine development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net operating losses, capital losses and tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investment in partnerships and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments and unrealized loss on investments . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At December 31,
2016
2017
$
1,352 $
74
295
1,276
86
254
101
263
3,701
(2,795)
$
906 $
1,109
72
339
2,226
909
374
187
229
5,445
(3,844)
1,601
Deferred income tax liabilities:
Property, plant and mine development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net undistributed earnings of subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments and unrealized gain on investments . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Net deferred income tax assets (liabilities) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(841) $
(64)
(12)
—
—
(47)
(964)
(58) $
(639)
(167)
—
(6)
(4)
(46)
(862)
739
These amounts reflect the classification and presentation that is reported for each tax jurisdiction in which the Company
operates.
Net deferred income tax assets and liabilities consist of:
Non-current deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-current deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Company’s Unrecognized Tax Benefits
At December 31,
2016
2017
1,331
(592)
739
537 $
(595)
(58) $
At December 31, 2017, 2016 and 2015, the Company had $68, $68 and $62 of total gross unrecognized tax benefits,
respectively. The additions to the unrecognized tax benefits in 2017 is a result of changes to positions in previously open tax years in
the United States. The $30 addition to unrecognized tax benefits for positions taken in the current period is directly offset by a
127
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
reduction in positions taken in a prior period, which is related to the sale of Batu Hijau. A reconciliation of the beginning and ending
amount of gross unrecognized tax benefits is as follows:
Total amount of gross unrecognized tax benefits at beginning of year . . . . . . . . $
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions for tax positions of current year . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reductions due to settlements with taxing authorities . . . . . . . . . . . . . . . . . .
Reductions due to lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . .
Total amount of gross unrecognized tax benefits at end of year . . . . . . . . . . . . . $
68 $
(27)
30
—
(3)
68 $
62 $
48
—
(23)
(19)
68 $
394
(24)
—
(302)
(6)
62
2017
2016
2015
At December 31, 2017, 2016 and 2015, $72, $64 and $35, respectively, represent the amount of unrecognized tax benefits that,
if recognized, would impact the Company’s effective income tax rate.
The Company operates in numerous countries around the world and is subject to, and pays annual income taxes under, the
various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements
with the local government, and others are defined by the general corporate income tax laws of the country. The Company has
historically filed, and continues to file, all required income tax returns and paid the taxes reasonably determined to be due. The tax
rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the Company is subject to
a review of its historic income tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the
interpretation or application of certain rules to the Company’s business conducted within the country involved.
The Company continues to carry an assessment of tax and interest of $54 relating to a pre-acquisition transaction of Fronteer
Gold, Inc. and subsidiaries. The taxing authority is disputing the tax attribute that was created as part of the pre-acquisition transaction
claimed on Fronteer’s tax return. Due to procedural requirements, the Company paid half of the assessment in the third quarter of
2016. The Company intends to vigorously defend its position through all processes available.
The Australian Taxation Office (“ATO”) is conducting a limited review of the Company’s prior year tax returns. The ATO is
focused on reviewing an internal reorganization executed in 2011 when Newmont completed a restructure of the shareholding in the
Company’s Australian subsidiaries. To date, the Company has responded to inquiries from the ATO and provided them with
supporting documentation for the transaction and the Company’s associated tax positions. One aspect of the ATO review relates to an
Australian capital gains tax that applies to sales or transfers of stock in certain types of entities. In the fourth quarter of 2017, the ATO
notified the Company that it believes the 2011 reorganization is subject to capital gains tax of approximately $83 (including interest
and penalties). The Company disputes this conclusion and intends to vigorously defend its position that the transaction is not subject
to this tax. In the fourth quarter of 2017, the Company made a $25 payment to the ATO and lodged an Appeal with the Australian
Federal Court to preserve its right to contest the ATO conclusions on this matter. The Company reflects this payment as a receivable
as it believes that it will ultimately prevail in this dispute. The Company continues to monitor the status of the ATO’s review which it
expects to continue into 2018.
The Company and/or subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign
jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal, state and local, and non-U.S. income tax
examinations by tax authorities for years before 2011. As a result of (i) statute of limitations that will begin to expire within the next
12 months in various jurisdictions, and (ii) possible settlements of audit-related issues with taxing authorities in various jurisdictions,
the Company believes that it is reasonably possible that the total amount of its unrecognized income tax liability will decrease between
$10 to $15 in the next 12 months.
The Company’s practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of its income and
mining tax expense. At December 31, 2017 and 2016, the total amount of accrued income-tax-related interest and penalties included in
the Consolidated Balance Sheets was $19 and $16, respectively. During 2017, 2016, and 2015 the Company accrued $3, $-, and
released $1 of interest and penalties, respectively, through the Consolidated Statements of Operations.
128
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Valuation of Deferred Tax Assets
The Company’s recent earnings history and forecasted future results, driven by its existing reserves and the forecasted long-term
commodity prices, points to the full realization of those deferred tax assets in the U.S. and Australia not previously subject to a
valuation allowance. We are in a cumulative three year loss in Peru and based on the declining production profile at Yanacocha, it is
more likely than not that the net deferred tax assets in Peru will not be realized in the future. Accordingly, an additional valuation
allowance of $40 on these assets was recognized at December 31, 2017.
Due to changes the Act made to certain international tax provisions, it was prudent for the Company to restructure the holding of
its non-U.S. operations for U.S. federal income tax purposes. This was accomplished by executing and filing various “check the box”
elections made with respect to certain non-U.S. subsidiaries of the Company. The elections resulted in the conversions of these
subsidiaries from branches and/or foreign partnerships to regarded foreign corporations. One result of these conversions is the
Company no longer carries a U.S. deferred tax asset related to the investment in Yanacocha and released the valuation allowance of
$292 which was originally recorded on December 31, 2016.
The Company determined that the realization of deferred tax assets related to certain carry forwards such as tax losses and tax
pools in Canada, capital losses in the U.S. and Australia and foreign tax credits in the U.S., does not meet the more likely than not
standard. Accordingly, these assets continue to be subject to a valuation allowance. At December 31, 2017, the valuation allowance
related to these assets was $1,296. Realization is dependent not only on generating sufficient taxable income in the period that net
deferred tax assets reverse but also on the character/classification of that income. The alternative minimum tax was removed by the
Act, and the Company’s alternative minimum tax credit carryforward will be refunded over a 5 year period. Therefore, the Company
removed $48 of the remaining valuation allowance on alternative minimum tax credits for December 31, 2017. The re-measurement of
the Company’s deferred tax assets due to the Tax Cuts and Jobs Act also impacted related valuation allowances; see Schedule II-
Valuation and Qualifying Accounts.
Refer to Note 2 for additional risk factors that could impact the Company’s ability to realize the deferred tax assets.
Tax Loss Carryforwards, Foreign Tax Credits, and AMT Credits
At December 31, 2017 and 2016, the Company had (i) $498 and $216 of net operating loss carry forwards, respectively; and
(ii) $610 and $837 of tax credit carry forwards, respectively. At December 31, 2017 and 2016, $92 and $134, respectively, of net
operating loss carry forwards are attributable to Australia and France for which current tax law provides no expiration period. The
remaining net operating loss carry forward in Canada will expire by 2036. Valuation allowances have been recorded on net operating
loss carry forwards where the Company believes, based on the available evidence, it is more likely than not that the net operating
losses will not be realized.
Tax credit carry forwards for 2017 and 2016 of $558 and $779 consist of foreign tax credits available in the United States;
substantially all such credits not utilized will expire at the end of 2027. Other credit carry forwards at the end of 2017 and 2016 in the
amounts of $52 and $58, respectively, represent alternative minimum tax credits attributable to the Company’s U.S. operations for
which the current tax law provides no period of expiration and which will be refunded by the end of 2023.
Differences in tax rates and other foreign income tax law variations make the ability to fully utilize all available foreign income
tax credits on a year-by-year basis highly dependent on the selling price of the gold and copper produced by the Company and the
costs of production, since lower selling prices or higher costs can result in having insufficient sources of taxable income in the United
States to utilize all available foreign tax credits. Such credits have limited carry back and carry forward periods and can only be used
to reduce the United States income tax imposed on foreign earnings included in the annual United States consolidated income tax
return. Accordingly, a valuation allowance has been established.
Other
No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition
tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in
foreign operations.
129
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 11 EQUITY INCOME (LOSS) OF AFFILIATES
Years Ended December 31,
2016
2017
2015
TMAC Resources Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Minera La Zanja S.R.L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Euronimba Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Novo Resources Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(6) $
(5)
(5)
—
(16) $
(7) $
—
(6)
—
(13) $
(7)
(30)
(9)
1
(45)
TMAC Resources Inc.
Newmont holds a 28.79% interest in TMAC. Refer to Note 18 for additional information.
Minera La Zanja S.R.L.
Newmont holds a 46.94% interest in Minera La Zanja, S.R.L. (“La Zanja”), a gold mine near the city of Cajamarca, Peru. The
remaining interest is held by Compañia de Minas Buenaventura, S.A.A. (“ Buenaventura”). The mine commenced operations in
September 2011 and is operated by Buenaventura.
Euronimba Ltd.
Newmont holds a 45% interest in Euronimba Ltd. (“Euronimba”), with the remaining interests held by BHP Billiton (45%) and
Areva (10%). Euronimba owns 95% of the Nimba iron ore project located in the Republic of Guinea.
Novo Resources Corp.
In September 2016, Novo Resources Corp. (“Novo”) issued 765,115 common shares to Talga Resources Ltd. for payment of the
purchase price for certain projects. As a result, Newmont now accounts for its investment in Novo at fair value as it no longer qualifies
as an equity method investment. For a more detailed discussion, see Note 18.
NOTE 12 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS FROM CONTINUING
OPERATIONS
Years Ended December 31,
2016
2017
2015
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
69 $
(57)
(1)
11 $
10 $
(579)
(1)
(570)
$
(3)
(126)
(11)
(140)
Newmont has a 75% economic interest in Merian, with the remaining interests held by Staatsolie. Newmont consolidates
Merian in its Consolidated Financial Statements as the primary beneficiary in the variable interest entity. Newmont consolidates
Merian through Suriname, LLC (formerly known as Surgold), a company wholly owned by Newmont. Merian reached commercial
production in October 2016.
In December 2017, Yanacocha repurchased 64 million shares (a 5% ownership) from International Finance Corporation, which
resulted in Newmont’s ownership in Yanacocha increasing from 51.35% to 54.05%, with the remaining interests held by
Buenaventura (which increased from 43.65% to 45.95%). Newmont consolidates Yanacocha in its Consolidated Financial Statements
due to a majority voting interest.
130
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following summarizes the consolidated assets and liabilities of Merian.
At December 31, At December 31,
2017
2016
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current assets:
Property, plant and mine development, net . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Current liabilities:
Other current liabilities (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Non-current liabilities:
Reclamation and remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
27 $
79
21
6
133
769
8
910 $
50 $
50
17
1
68 $
50
57
23
37
167
746
8
921
43
43
11
—
54
(1) Other current assets include trade and other accounts receivable, prepaid assets and other current assets.
(2) Other non-current assets include intangibles, stockpiles and ore on leach pads.
(3) Other current liabilities include accounts payable, employee-related benefits and other current liabilities.
(4) Other non-current liabilities include employee related benefits.
NOTE 13 NEWMONT EQUITY AND INCOME (LOSS) PER SHARE
Newmont Common Stock
In September 2015, Newmont filed a shelf registration statement on Form S-3 under which it can issue an indeterminate number
or amount of common stock, preferred stock, debt securities, guarantees of debt securities and warrants from time to time at
indeterminate prices. It also included the resale of an indeterminate amount of common stock, preferred stock and debt securities from
time to time upon exercise of warrants or conversion of convertible securities.
Net Income (Loss) per Common Share
Basic income (loss) per common share is computed by dividing income available to Newmont common stockholders by the
weighted average number of common shares outstanding during the period. Diluted income (loss) per common share is computed
similarly except that weighted average common shares is increased to reflect all dilutive instruments, including employee stock
131
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
awards and convertible debt instruments. The dilutive effects of Newmont’s dilutive securities are calculated using the treasury stock
method and only those instruments that result in a reduction in income per share are included in the calculation.
Years Ended December 31,
2016
2015
2017
Net income (loss) attributable to Newmont stockholders:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(60) $
(38)
(98) $
(220) $
(407)
(627) $
(1)
221
220
Weighted average common shares (millions):
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of employee stock-based awards . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
533
2
535
530
2
532
Net income (loss) per common share attributable to Newmont stockholders:
Basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(0.11) $
(0.07)
(0.18) $
(0.41) $
(0.77)
(1.18) $
(0.11) $
(0.07)
(0.18) $
(0.41) $
(0.77)
(1.18) $
516
—
516
—
0.43
0.43
—
0.43
0.43
The Company reported a loss from continuing operations attributable to Newmont stockholders for the years ended
December 31, 2017, 2016 and 2015. Therefore, the potentially dilutive effects at December 31, 2017, 2016 and 2015 were not
included in the computation of diluted loss per common share attributable to Newmont stockholders because their inclusion would
have been anti-dilutive to the computation.
In July 2007, Newmont issued $575 of Convertible Senior Notes due in 2017 that, if converted, may have had a dilutive effect
on the Company’s weighted average number of common shares. The effect of contingently convertible instruments on diluted earnings
per share was calculated under the net share settlement method in accordance with ASC guidance. The conversion price for the notes
exceeded the Company’s share price for the years ended December 31, 2016, and 2015 therefore, no additional shares were included
in the computation of diluted weighted average common shares. In July 2017, the 2017 Notes were retired.
NOTE 14 EMPLOYEE-RELATED BENEFITS
Current:
Accrued payroll and withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Peruvian workers’ participation and other bonuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee pension benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other post-retirement plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other employee-related payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current:
Employee pension benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued severance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other post-retirement benefit plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other employee-related payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
At December 31,
2016
2017
$
$
$
$
264
22
7
5
1
10
309
129
162
81
14
386
$
$
$
$
262
13
12
4
2
11
304
180
140
80
11
411
132
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Pension and Other Benefit Plans
The Company provides defined benefit pension plans to eligible employees. Benefits are generally based on years of service and
the employee’s average annual compensation. Various international pension plans are based on local laws and requirements. Pension
costs are determined annually by independent actuaries and pension contributions to the qualified plans are made based on funding
standards established under the Employee Retirement Income Security Act of 1974, as amended.
The following tables provide a reconciliation of changes in the plans’ benefit obligations and assets’ fair values for 2017 and
2016:
Pension Benefits
2016
2017
Other Benefits
2016
2017
Change in benefit obligation:
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . $ 1,025 $
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlement payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Projected benefit obligation at end of year . . . . . . . . . . . . . . . . . . . $ 1,121 $
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,098 $
Change in fair value of assets:
29
44
73
—
(10)
(40)
Fair value of assets at beginning of year . . . . . . . . . . . . . . . . . . . . . $
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlement payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of assets at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . $
Unfunded status, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
833 $
130
72
(10)
(40)
985 $
136 $
84 $
1
4
2
(2)
—
(3)
N/A
948 $
28
45
60
2
(11)
(47)
1,025
1,010 $
92
2
4
(11)
—
—
(3)
N/A
84
86 $
760 $
59
72
(11)
(47)
833 $
192 $
— $
—
3
—
(3)
— $
86 $
—
—
3
—
(3)
—
84
The Company’s qualified pension plans are funded with cash contributions in compliance with Internal Revenue Service rules
and regulations. The Company’s non-qualified and other benefit plans are currently not funded, but exist as general corporate
obligations. The information contained in the above tables presents the combined funded status of qualified and non-qualified plans.
The Company reviews its retirement benefit programs on a regular basis and will consider market conditions and the funded status of
its qualified pension plans in determining whether additional contributions are appropriate in calendar year 2018.
The following table provides the net pension and other benefits amounts recognized in the Consolidated Balance Sheets at
December 31:
Accrued employee benefit liability . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accumulated other comprehensive income (loss):
Net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior service credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Pension Benefits
2016
2017
Other Benefits
2016
2017
136 $
192 $
86 $
84
(409)
46
(363)
127
(236) $
(446)
54
(392)
138
(254) $
14
29
43
(15)
28 $
18
32
50
(18)
32
133
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The following table provides components of the net periodic pension and other benefits costs for the years ended December 31:
Pension Benefit Costs
Other Benefit Costs
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29 $ 28 $ 30 $
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . .
Amortization, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net periodic benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 2016 2015 2017 2016 2015
3
5
—
(3)
5
—
5
1 $
4
—
(7)
(2) $ — $
—
(2) $ — $
Total benefit cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45 $ 46 $ 43 $
44
(63)
30
40 $
5
45
(58)
25
40 $
6
41
(58)
27
40 $
3
2 $
4
—
(6)
—
The following table provides the components recognized in Other comprehensive income (loss) for the years ended
December 31:
Pension Benefits
Other Benefits
Net loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Amortization, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total recognized in other comprehensive income (loss) . . . . $ (30) $ 30 $
Total recognized in net periodic benefit cost and other
2017 2016 2015 2017 2016 2015
5 $ 61 $ 24 $ — $ (11) $ (62)
3
6
—
—
(5) $ (59)
(27)
(3)
(6) $
(30)
(5)
(25)
(6)
7
—
7 $
comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . $ 15 $ 76 $ 37 $
5 $
(5) $ (54)
Actuarial losses in excess of 10 percent of the greater of the projected benefit obligation or market-related value of plan assets
are amortized over the expected average remaining future service period of the current active participants. The expected recognition of
amounts in Accumulated other comprehensive income (loss) is $40 and $(8) for net actuarial loss and prior service credit for pension
benefits in 2018, respectively, and $(1) and $(6) for net actuarial gain and prior service credit for other benefits in 2018, respectively.
The significant assumptions used in measuring the Company’s benefit obligation were mortality assumptions and discount rate.
The mortality assumptions used to measure the pension and other post retirement obligation incorporate future mortality
improvements from tables published by the Society of Actuaries. During 2014, the Society of Actuaries released new RP-2014
mortality tables with MP-2014 generational projection scales, which are believed to better reflect mortality improvements and are to
be used in calculating defined benefit pension obligations and other benefits obligations. These mortality scales have been updated by
the Society of Actuaries every year since 2014. The Company has utilized the respective years’ updated generational projection scales
to measure the pension and other post retirement obligations as of December 31, 2017 and 2016.
Yield curves matching the Company’s benefit obligations were derived using a model based on high quality corporate bond data
from Bloomberg. The model develops a discount rate by selecting a portfolio of high quality corporate bonds whose projected cash
flows match the projected benefit payments of the plan. The resulting curves were used to identify a weighted average discount rate
for the Company of 3.77% and 4.36% at December 31, 2017 and 2016, respectively, based on the timing of future benefit payments.
The significant assumptions used in measuring the Company’s net periodic benefit cost were discount rate and expected return
on plan assets:
Pension Benefits
Other Benefits
Weighted average assumptions used in measuring the net
Years Ended December 31, Years Ended December 31,
2015
2017
2015 2017
2016
2016
periodic benefit cost:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.36 % 4.80 % 4.32 % 4.36 % 4.80 % 4.32 %
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . 7.25 % 7.25 % 7.75 % N/A
N/A
N/A
The expected long-term return on plan assets used for each period in the three years ended December 31, 2017 was determined
based on an analysis of the asset returns over multiple time horizons for the Company’s actual plan and for other comparable U.S.
134
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
corporations. At December 31, 2017, Newmont has estimated the expected long-term return on plan assets to be 7.25% in calculating
its benefit obligation, which will be used in determining future net periodic benefit cost. Determination of the long-term return on plan
assets is a result of considering the most recent capital market forecasts and the plans’ current allocation as well as the actual return on
plan assets as compared to the expected return on assets over the last 5 years. The average actual return on plan assets during the 29
years ended December 31, 2017 approximated 8.49%.
Newmont has two pension calculations for salaried U.S. employees. The first is a “Final Average Pay” pension calculation
which pays a monthly amount to employees in retirement based in part on their highest five year eligible earnings and years of
credited service. The second is the “Stable Value” calculation which provides a lump sum payment to employees upon retirement. The
amount of the lump sum is the total of annual accruals based on the employee’s eligible earnings and years of service during that year.
The benefits accrued under the Final Average Pay formula were frozen on June 30, 2014 for those eligible employees. Beginning
July 1, 2014, all future accruals are based on the terms and features of the Stable Value calculation.
The pension plans employ an independent investment firm which invests the assets of the plans in certain approved funds that
correspond to specific asset classes with associated target allocations. The goal of the pension fund investment program is to achieve
prudent actuarial funding ratios while maintaining acceptable risk levels. The investment performance of the plans and that of the
individual investment firms is measured against recognized market indices. The performance of the pension funds are monitored by an
investment committee comprised of members of the Company’s management, which is advised by an independent investment
consultant. With the exception of global capital market economic risks, the Company has identified no significant portfolio risks
associated to asset classes. The following is a summary of the target asset allocations for 2017 and the actual asset allocation at
December 31, 2017.
Asset Allocation
U.S. equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
World equity fund (U.S. and International equity investments) . . . . . . . . . . . . . . . . . . . . . .
Fixed income investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Target
11 %
12 %
20 %
49 %
8 %
Actual at
December 31,
2017
11 %
12 %
20 %
49 %
8 %
The following table sets forth the Company’s pension plan assets measured at fair value at December 31, 2017 and 2016:
Plan Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Commingled funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3
982
985
$
$
2
831
833
Fair Value at December 31,
2017
2016
Cash and cash equivalent instruments are valued based on quoted market prices in active markets, which are primarily money
market securities and U.S. Treasury securities.
The pension plans’ commingled fund investments are managed by several fund managers and are valued at the net asset value
per share for each fund. Although the majority of the underlying assets in the funds consist of actively traded equity securities and
bonds, the unit of account is considered to be at the fund level. These funds require less than a month’s notice for redemptions and can
be redeemed at the net asset value per share.
135
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The assumed health care trend rate used to measure the expected cost of benefits is 6.20% in 2018 and decreases gradually each
year to 5.00% in 2022, which is used thereafter. A one percent change in the assumed health care cost trend rates would have the
following effects:
Effect on total of service and interest cost components of net periodic
post-retirement health care benefit cost . . . . . . . . . . . . . . . . . . . . . . . $
Effect on the health care component of the accumulated post-retirement
benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
2 $
—
(2)
One-percentage-point One-percentage-point
Increase
Decrease
Cash Flows
Benefit payments expected to be paid to pension plan participants are as follows: $55 in 2018, $57 in 2019, $61 in 2020, $65 in
2021, $69 in 2022, and $375 in total over the five years from 2023 through 2026. Benefit payments made to other benefit plan
participants are expected to be as follows: $4 in 2018, $5 in 2019, $5 in 2020, $5 in 2021, $5 in 2022, and $27 in total over the five
years from 2023 through 2026.
Savings Plans
The Company has two qualified defined contribution savings plans in the U.S.; one that covers salaried and non-union hourly
employees and one that covers substantially all hourly union employees. In addition, the Company has one non-qualified supplemental
savings plan for salaried employees whose benefits under the qualified plan are limited by federal regulations. When an employee
meets eligibility requirements, the Company matches 100% of employee contributions of up to 6% of eligible earnings for the salaried
and hourly union plans. Hourly non-union employees receive an additional retirement contribution to the participant’s retirement
contribution account equal to an amount which is paid and determined by the Company. Matching contributions are made in cash.
NOTE 15 STOCK-BASED COMPENSATION
The Company has stock incentive plans for directors, executives and eligible employees. Stock incentive awards include
restricted stock units (“RSUs”), performance leveraged stock units (“PSUs”), and strategic stock units (“SSUs”). The SSU program
was discontinued and no additional SSUs were granted after 2015. The Company issues new shares of common stock to satisfy
exercises and vesting under all of its stock incentive awards. Prior to 2012, the Company also granted options to purchase shares of
stock with exercise prices not less than fair market value of the underlying stock at the date of grant. At December 31, 2017,
11,339,741 shares were authorized for future stock incentive plan awards.
Employee Stock Options
Stock options granted under the Company’s stock incentive plans vest over periods of three years or more and are exercisable
over a period of time not to exceed 10 years from the grant date. The value of each option award is estimated at the grant date using
the Black-Scholes option pricing model. There were no options granted in 2017, 2016 or 2015. At December 31, 2017, there were
1,108,899 shares outstanding and exercisable, at a weighted average exercise price of $51.74, with a weighted average remaining
contractual life of 2 years.
Other Stock-Based Compensation
The Company grants RSUs to executives and eligible employees. Awards are determined as a target percentage of base salary
and, for eligible employees, are subject to a personal performance factor. RSUs vest over periods of three years or more. Prior to
vesting, holders of RSUs do not have the right to vote the underlying shares; however, executives accrue dividend equivalents on their
RSUs, which are paid at the time the RSUs vest. The accrued dividend equivalents are not paid if shares are forfeited. The RSUs are
subject to forfeiture risk and other restrictions. Upon vesting, the employee is entitled to receive one share of the Company’s common
stock for each restricted stock unit.
136
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company grants PSUs to eligible executives, based upon certain measures of shareholder return. These measures include
absolute shareholder return and relative shareholder return compared to our proxy peer group. The actual number of PSUs that vest are
determined at the end of a three year performance period.
From 2013 to 2015, the Company granted SSUs to eligible executives, based upon certain measures of adjusted earnings before
income tax, depreciation and amortization (“Adjusted EBITDA”), based on a targeted number of shares at the beginning of each
performance period. At the end of the performance period, one third of the SSUs are issued without restriction in the form of common
stock, and two-thirds of the award is paid in RSUs that vest in equal annual increments at the second and third anniversaries of the
start of the performance period.
A summary of the status and activity of non-vested RSUs, PSUs, and SSUs for the year ended December 31, 2017 is as follows:
RSU
PSU
SSU
Weighted
Average
Grant-Date Number of
Fair Value
Shares
Number of
Shares
Non-vested at beginning of year . . . 2,948,345 $
1,191,380 $
(1,199,020) $
(324,165) $
2,616,540 $
Granted . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . .
Non-vested at end of year . . . . . . . .
26.05 3,027,876 $
1,475,133 $
35.01
(1,594,869) $
25.12
(313,570) $
27.56
2,594,570 $
30.39
Weighted
Average
Weighted
Average
Grant-Date Number of Grant-Date
Fair Value
Shares
Fair Value
25.26
—
25.56
25.56
—
37.90 157,476 $
— $
41.92
(154,296) $
34.12
(3,180) $
39.26
— $
42.27
The total intrinsic value and fair value of RSUs that vested in 2017, 2016 and 2015 was $43, $27 and $21, respectively. The
total intrinsic value and fair value of PSUs that vested in 2017, 2016 and 2015 was $56, $16 and $3, respectively. The total intrinsic
value and fair value of SSUs that vested in 2017, 2016 and 2015 was $6, $7 and $9, respectively.
Cash flows resulting from excess tax benefits are classified as part of cash flows from operating activities. Excess tax benefits
are realized tax benefits from tax deductions for vested RSUs, settled PSUs, and exercised options in excess of the deferred tax asset
attributable to stock compensation costs for such equity awards. The Company recorded $5 in excess tax benefits for the year ended
December 31, 2017 and no excess tax benefits for the years ended December 31, 2016 and 2015.
At December 31, 2017, there was $43 and $38 of unrecognized compensation costs related to the unvested RSU and PSUs,
respectively. This cost is expected to be recognized over a weighted average period of approximately two years.
The Company recognized stock-based compensation as follows:
Stock-based compensation:
Performance leveraged stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 35 $ 34
31
Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Strategic stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 70
34
1
$ 70
$ 39
31
7
$ 77
Years Ended
December 31,
2017 2016
2015
137
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 16 FAIR VALUE ACCOUNTING
Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair
value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are
described below:
Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted
assets or liabilities;
Level 2 Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted
prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or
liability; and
Level 3 Prices or valuation techniques that require inputs that are both significant to the fair value measurement and
unobservable (supported by little or no market activity).
The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis (at least annually)
by level within the fair value hierarchy. As required by accounting guidance, assets and liabilities are classified in their entirety based
on the lowest level of input that is significant to the fair value measurement.
Assets:
Fair Value at December 31, 2017
Total
Level 1 Level 2 Level 3
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,259 $ 3,259 $
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivable from provisional copper and gold concentrate sales,
39
39
— $
—
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
111
—
111
Derivative instruments, net:
Diesel forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted marketable debt securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Batu Hijau contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
165
55
9
23
—
165
17
9
—
$ 3,667 $ 3,489 $
6
—
38
—
—
155 $
—
—
—
—
—
—
—
23
23
Liabilities:
Debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,671 $
Derivative instruments, net:
Foreign exchange forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
243
$ 4,915 $
— $ 4,671 $
—
—
—
— $ 4,672 $
1
—
—
243
243
138
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Assets:
Fair Value at December 31, 2016
Total
Level 1 Level 2 Level 3
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,756 $ 2,756 $
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trade receivable from provisional copper and gold concentrate sales,
26
26
net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Marketable debt securities
Asset backed commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted marketable debt securities . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Batu Hijau contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . .
113
56
18
49
13
13
—
56
—
16
13
—
$ 3,044 $ 2,867 $
— $
—
—
—
113
—
—
33
—
—
146 $
—
—
18
—
—
13
31
Liabilities:
Debt (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,882 $
Derivative instruments, net:
Foreign exchange forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
187
$ 5,093 $
— $ 4,882 $
—
—
—
— $ 4,906 $
24
—
—
187
187
(1) Debt, exclusive of capital leases, is carried at amortized cost. The outstanding carrying value was $4,040 and $4,599 at December 31, 2017 and
2016, respectively. The fair value measurement of debt was based on an independent third party pricing source.
The fair values of the derivative instruments in the table above are presented on a net basis. The gross amounts related to the fair
value of the derivatives instruments above are included in Note 17. All other fair value disclosures in the above table are presented on
a gross basis.
The Company’s cash and cash equivalent and restricted cash (which includes restricted cash and cash equivalent) instruments
are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash and cash
equivalent instruments and restricted cash are valued based on quoted market prices in active markets and are primarily money market
securities and U.S. Treasury securities.
The Company’s net trade receivables from provisional copper and gold concentrate sales, which contain an embedded derivative
and are subject to final pricing, are valued using quoted market prices based on forward curves for the particular metal. As the
contracts themselves are not traded on an exchange, these receivables are classified within Level 2 of the fair value hierarchy.
The Company’s derivative instruments are valued using pricing models, and the Company generally uses similar models to
value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, forward curves,
measures of volatility, and correlations of such inputs. The Company’s derivatives trade in liquid markets, and as such, model inputs
can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the
fair value hierarchy.
The Company’s marketable equity securities are valued using quoted market prices in active markets and as such are classified
within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities are calculated as the quoted market price
of the marketable equity security multiplied by the quantity of shares held by the Company.
The Company’s restricted marketable debt securities are primarily U.S. government issued bonds and international bonds. The
Company’s South American debt securities are classified within Level 1 of the fair value hierarchy, and they are valued using
published market prices of actively traded securities. The Company’s North American debt securities are classified within Level 2 of
the fair value hierarchy as they are valued using pricing models which are based on prices of similar, actively traded securities.
The Company’s restricted other assets primarily consist of bank issued certificate of deposits that have maturities over 90 days
and marketable equity securities. Both are classified within Level 1 of the fair value hierarchy as their fair values are based on quoted
prices available in active markets.
139
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The estimated value of the Batu Hijau contingent consideration was determined using (i) a discounted cash flow model, (ii) a
Monte Carlo valuation model to simulate future copper prices using the Company’s long-term copper price, and (iii) estimated
production and/or development dates for Batu Hijau Phase 7 and the Elang projects in Indonesia. The contingent consideration is
classified within Level 3 of the fair value hierarchy.
The estimated fair value of the Holt royalty obligation was determined using (i) a discounted cash flow model, (ii) a Monte
Carlo valuation model to simulate future gold prices using the Company’s long-term gold price, (iii) various gold production scenarios
from reserve and resource information and (iv) a weighted average discount rate. The royalty obligation is classified within Level 3 of
the fair value hierarchy.
The Company’s marketable debt securities consisted of investments in asset backed commercial paper. The Company reviewed
the fair value of the asset backed commercial paper on a quarterly basis prior to the investments being redeemed in November 2016
and January 2017, respectively. The marketable debt securities were traded in markets that were not active, traded infrequently and
had little price transparency. Therefore, the investments were classified as Level 3 of the fair value hierarchy.
The following tables set forth a summary of the quantitative and qualitative information related to the unobservable inputs used
in the calculation of the Company’s Level 3 financial assets and liabilities at December 31, 2017 and 2016:
Description
Batu Hijau contingent consideration . . . . . . . $
Valuation technique
23 Monte Carlo
At December 31,
2017
Holt royalty obligation . . . . . . . . . . . . . . . . . $
243 Monte Carlo
Unobservable input
Range/Weighted
average
Discount rate
Short-term copper price
Long-term copper price
Discount rate
Short-term gold price
Long-term gold price
Gold production scenarios (in 000's of
ounces)
$
$
$
$
17.50 %
3.09
3.00
3.32 %
1,275
1,300
402 -1,779
Range/Weighted
average
97 %
17.10 %
2.39
3.00
3.36 %
1,221
1,300
$
$
$
$
Description
At December 31,
2016
Valuation technique
Risk-adjusted indicative
Unobservable input
Asset backed commercial paper . . . . . . . . . . $
Batu Hijau contingent consideration . . . . . . . $
18
13 Monte Carlo
price
Holt royalty obligation . . . . . . . . . . . . . . . . . $
187 Monte Carlo
Recoverability rate
Discount rate
Short-term copper price
Long-term copper price
Discount rate
Short-term gold price
Long-term gold price
The following tables set forth a summary of changes in the fair value of the Company’s Level 3 financial assets and liabilities:
Gold production scenarios (in 000's of
ounces)
332 - 1,570
Auction
Rate
Asset
Backed
Commercial
Securities (1)
Paper (1)
Batu Hijau
Contingent
Consideration (2)
Total
Assets
Fair value at December 31, 2015 . . . $
Settlements . . . . . . . . . . . . . . . . . .
Revaluation . . . . . . . . . . . . . . . . . .
Valuation . . . . . . . . . . . . . . . . . . .
Fair value at December 31, 2016 . . . $
Settlements . . . . . . . . . . . . . . . . . .
Revaluation . . . . . . . . . . . . . . . . . .
Fair value at December 31, 2017 . . . $
7 $
(8)
1
—
— $
—
—
— $
18 $
(3)
3
—
18 $
(18)
—
— $
— $
—
—
13
13 $
—
10
23 $
(1) The gain (loss) recognized is included in Other income, net.
(2) The gain (loss) recognized is included in Net income (loss) from discontinued operations.
140
Holt
Total
Royalty
Obligation (2) Liabilities
129
(11)
69
—
187
(12)
68
243
129 $
(11)
69
—
187 $
(12)
68
243 $
25 $
(11)
4
13
31 $
(18)
10
23 $
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
During the year ended December 31, 2016, the Company performed a non-recurring fair value measurement (i.e. Level 3 of the
fair value hierarchy) in connection with recoverability and impairment tests performed as a result of the updated Yanacocha long-term
mining and closure plans and related increases in estimated future closure costs. The estimated fair value of Yanacocha’s existing
operations was determined using (i) a country specific discount rate of 7.1%, (ii) a short-term gold price of $1,221 based on the fourth
quarter average of the London PM fix, (iii) a long-term gold price of $1,300, and (iv) updated cash flow information from the
Company’s business plan. The Company utilized an income and market approach for exploration potential. For further information
regarding management’s assessment of the Yanacocha long-term mining and closure plans and the associated impairment charge, see
Note 6 and Note 7, respectively.
NOTE 17 DERIVATIVE INSTRUMENTS
The Company’s strategy is to provide shareholders with leverage to changes in gold and copper prices by selling its production
at spot market prices. Consequently, the Company does not hedge its gold and copper sales. The Company has and will continue to
manage certain risks associated with commodity input costs, interest rates and foreign currencies using the derivative market.
Cash Flow Hedges
The following foreign currency and diesel contracts were transacted for risk management purposes and qualify as cash flow
hedges. The effective portion of unrealized changes in market value have been recorded in Accumulated other comprehensive income
(loss) and are reclassified to income during the period in which the hedged transaction affects earnings. Gains and losses from hedge
ineffectiveness are recognized in current earnings.
Foreign Currency Contracts
The Company had the following foreign currency derivative contracts in Australia outstanding at December 31, 2017:
A$ Operating Fixed Forward Contracts:
A$ notional (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average rate ($/A$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
0.92
6
0.92
Expected Maturity Date
2018
Total/Average
Newmont utilizes foreign currency contracts to reduce the variability of the U.S dollar amount of forecasted foreign currency
expenditures caused by changes in exchange rates. The A$ hedges run through the first quarter of 2018.
Diesel Fixed Forward Contracts
The Company had the following diesel derivative contracts in Nevada, within North America, outstanding at
December 31, 2017:
Diesel Fixed Forward Contracts:
Diesel gallons (millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Average rate ($/gallon) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
1.63
2
1.72
18
1.64
Expected Maturity Date
2018
2019
Total/Average
Newmont hedges a portion of its operating cost exposure related to diesel consumed at its Nevada operations to reduce the
variability in diesel prices. The hedging instruments consist of a series of financially settled fixed forward contracts which run through
the second quarter of 2019.
141
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Derivative Instrument Fair Values
The Company had the following derivative instruments designated as hedges at December 31, 2017 and 2016:
Fair Values of Derivative Instruments
At December 31, 2017
Other
Other
Other
Non-current Current Non-current
Liabilities Liabilities
Assets
Other
Current
Assets
A$ operating fixed forwards . . . . . . . . . . . . . . . . . . . . . . . . .
Diesel fixed forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
— $
6
6 $
— $
—
— $
1 $
—
1 $
—
—
—
Fair Values of Derivative Instruments
At December 31, 2016
Other
Other
Other
Non-current Current Non-current
Liabilities Liabilities
Assets
Other
Current
Assets
A$ operating fixed forwards . . . . . . . . . . . . . . . . . . . . . . . . .
Diesel fixed forwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
— $
4
4 $
— $
—
— $
23 $
4
27 $
1
—
1
As of December 31, 2017 and 2016, all hedging instruments held by the Company were subject to enforceable master netting
arrangements held by various financial institutions. In general, the terms of the Company’s agreements provide for offsetting of
amounts payable or receivable between it and the counterparty, at the election of both parties, for transactions that occur on the same
date and in the same currency. The Company’s agreements also provide that in the event of an early termination, the counterparties
have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. The Company’s
accounting policy is to not offset these positions in its accompanying balance sheets. As of December 31, 2017 and 2016 the potential
effect of netting derivative assets against liabilities due to the master netting agreement was not significant.
The following table shows the location and amount of gains (losses) reported in the Company’s Consolidated Financial
Statements related to the Company’s hedges.
Foreign Currency
Exchange Contracts
Diesel Fixed
Forward Contracts
2017 2016 2015 2017 2016 2015 2017 2016 2015
Interest
Rate Contracts
For the year ended December 31,
Cash flow hedging relationships:
Gain (loss) recognized in Other comprehensive income (loss)
(effective portion) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5 $
3
$ (39) $
3 $
9
$ (23)
$ — $ — $
—
Gain (loss) reclassified from Accumulated other comprehensive
income (loss) into income (loss) (effective portion) (1) . . . . . . . . . . . $ (25) $ (37) $ (39) $
(2) $ (22) $ (27)
$ (10) $ (33) $ (18)
Gain (loss) reclassified from Accumulated other comprehensive
income (loss) into income (loss) (ineffective portion) (2). . . . . . . . . . $ — $ —
$ — $ — $
1
$
2
$ — $ — $
—
(1) The gain (loss) recognized for the effective portion of cash flow hedges is included in Cost applicable to sales and Interest expense, net.
(2) The ineffective portion recognized for cash flow hedges is included in Other income, net.
Based on fair values at December 31, 2017, the amount to be reclassified from Accumulated other comprehensive income (loss),
net of tax to income for derivative instruments during the next 12 months is a loss of approximately $5.
Batu Hijau Contingent Consideration
Consideration received by the Company in conjunction with the sale of PTNNT included the Contingent Payment and the Elang
Development deferred payment deeds, are classified as derivatives under ASC 815. See Note 3 for additional information regarding
the sale and refer to Note 16 for more information regarding the inputs of the fair value determination. During the year, the estimated
fair value of these derivatives increased by $10 to $23. This change, net of tax of $4, was included in Net income (loss) from
142
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
discontinued operations in the Company’s Consolidated Statements of Comprehensive Income (Loss) and is recorded in Other non-
current assets in the Company's Consolidated Balance Sheets.
Provisional Gold and Copper Sales
The Company’s provisional gold and copper concentrate sales contain an embedded derivative that is required to be separated
from the host contract for accounting purposes. The host contract is the receivable from the sale of the gold and copper concentrates at
the prevailing indices’ prices at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to
market through earnings each period prior to final settlement.
At December 31, 2017, Newmont had gold and copper sales of 76,000 ounces and 21 million pounds priced at an average of
$1,299 per ounce and $3.26 per pound, respectively, subject to final pricing over the next several months.
NOTE 18 INVESTMENTS
Cost/Equity
Basis
At December 31, 2017
Unrealized
Gain
Loss
Fair/Equity
Basis
Current:
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
38 $
32 $
(8) $
62
Non-current:
Marketable equity securities:
Continental Gold Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . .
109 $
4
113
— $
—
—
(8) $
(2)
(10)
101
2
103
Other investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
—
—
12
Equity method investments:
TMAC Resources Inc. (28.79%) . . . . . . . . . . . . . . . . . . . . . . . . .
Minera La Zanja S.R.L. (46.94%) . . . . . . . . . . . . . . . . . . . . . . . .
$
115
50
165
290 $
—
—
—
— $
—
—
—
(10) $
115
50
165
280
Non-current restricted investments: (1)
Marketable debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
58 $
8
66 $
— $
1
1 $
(3) $
—
(3) $
55
9
64
143
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Cost/Equity
Basis
At December 31, 2016
Unrealized
Gain
Loss
Fair/Equity
Basis
Current:
Marketable equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
33 $
27 $
(4) $
56
Non-current:
Marketable debt securities:
Asset backed commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . $
16 $
2 $
— $
18
Other investments, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
—
—
6
Equity method investments:
TMAC Resources Inc. (29.00%) . . . . . . . . . . . . . . . . . . . . . . . . .
Minera La Zanja S.R.L. (46.94%) . . . . . . . . . . . . . . . . . . . . . . . .
Euronimba Ltd. (43.50%) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
108
71
4
183
205 $
—
—
—
—
2 $
—
—
—
—
— $
108
71
4
183
207
Non-current restricted investments: (1)
Marketable debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
48 $
12
60 $
1 $
1
2 $
— $
—
— $
49
13
62
(1) Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations. These amounts are
included in Other non-current assets. For further information regarding these amounts see Note 6.
In November 2017, Newmont participated in the TMAC offering acquiring 2 million shares at a price of C$7.00 per share for
$12, maintaining its 28.79% ownership interest, which is diluted from 2016 due primarily to the exercising of warrants held by other
shareholders. At December 31, 2016, Newmont’s ownership was diluted to 29.00% due primarily to the exercising of warrants held by
other shareholders.
In August 2017, Newmont sold approximately two-thirds of its interest in Novo for $15, resulting in a pre-tax gain of $5
recorded in Other income, net. Newmont continues to hold approximately 6 million common shares of Novo. The cost of the
investment sold was determined using the specific identification method.
In June 2017, Newmont exchanged its 31% interest in the Fort á la Corne joint venture in consideration for 54 million common
shares and 1 million common share warrants in Shore Gold, valued at $15. Following the transaction, Newmont held a 19.9% equity
ownership in Shore Gold. This investment has been classified as current.
In May 2017, Newmont purchased 37 million common shares of Continental Gold Inc. (“Continental”) at C$4.00 per share.
Continental is developing the high-grade Buriticá gold project in Colombia. Total consideration paid by Newmont was $109 for a
19.9% equity ownership in Continental.
In April 2017, Newmont purchased 13 million units (one common share and one warrant per unit) of Goldstrike Resources Ltd.
(“Goldstrike”) at a price of C$0.47 per share for $4. The investment secures rights to explore and develop the Plateau property located
in a highly prospective mineralized trend in Canada’s Yukon Territory with Goldstrike, with the ability to earn additional ownership in
the project through exploration investment. This investment has been classified as non-current.
In January 2017, the Company’s remaining asset backed commercial paper was called at par resulting in no realized gain or loss.
In November 2016, $8 of the Company’s auction rate securities were called at par resulting in no realized gain or loss.
In September 2016, Novo issued 765,115 common shares to Talga Resources Ltd. for payment of the purchase price for certain
projects. As a result of the issuance of these additional shares, Newmont’s ownership in Novo decreased to 19.97%. The Company
determined that Novo no longer qualified as an equity method investment and is now accounting for this investment as an available
144
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
for sale security. At December 31, 2016, Newmont recognized an unrealized loss of $4 in Accumulated other comprehensive income
(loss) related to Novo.
In March 2016, the Company sold its investment in Regis for $184, resulting in a pre-tax gain of $103 recorded in Other
income, net. The cost of the investment sold was determined using the specific identification method.
In February 2015, the Company’s $25 certificate of deposit matured.
There were no investment impairments for other-than-temporary declines in value or significant changes in fair value on those
available-for-sale securities previously impaired in 2017. In 2016, the Company recognized no investment impairments for other-than-
temporary declines in value. As of December 31, 2016, there was a $28 increase in the fair value of available-for-sale securities
previously impaired, primarily due to an $18 increase in Gabriel Resources Ltd, $4 increase in EMX Royalty Corp. (formerly known
as Eurasian Minerals), $2 increase in Pilot Gold and a $2 increase in Loncor Resources.
NOTE 19 INVENTORIES
Materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
In-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Concentrate and copper cathode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Precious metals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
416
131
83
49
679 $
391
130
67
29
617
At December 31, At December 31,
2017
2016
In 2017, the Company recorded write-downs of $14 and $2, classified as components of Costs applicable to sales and
Depreciation and amortization, respectively. Of the write-downs in 2017, $4 were at Carlin, $4 at Phoenix, $4 at CC&V, and $4 at
Yanacocha.
In 2016, the Company recorded write-downs of $15 and $3, classified as components of Costs applicable to sales and
Depreciation and amortization, respectively. Of the write-downs in 2016, $2 were at Carlin, $12 at Phoenix, $1 at Twin Creeks, and
$3 at Yanacocha.
In 2015, the Company recorded write-downs of $10 and $2, classified as components of Costs applicable to sales and
Depreciation and amortization, respectively. Of the write-downs in 2015, $4 were at Carlin, $5 at Phoenix, and $3 at Yanacocha.
NOTE 20 STOCKPILES AND ORE ON LEACH PADS
At December 31, At December 31,
2017
2016
Current:
Stockpiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Non-current:
Stockpiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
330
346
676
$
$
1,502
346
1,848
$
$
393
370
763
1,506
358
1,864
145
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
At December 31, At December 31,
2017
2016
Stockpiles and ore on leach pads:
Carlin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Phoenix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Twin Creeks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long Canyon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CC&V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanacocha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Merian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Boddington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tanami . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kalgoorlie . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ahafo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Akyem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
441 $
68
340
34
314
270
25
431
4
125
409
63
2,524 $
421
80
328
9
369
367
27
394
19
113
386
114
2,627
In 2017, the Company recorded write-downs of $198 and $77, classified as components of Costs applicable to sales and
Depreciation and amortization, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value.
Of the write-downs in 2017, $83 were related to Carlin, $46 to Twin Creeks, $70 to Yanacocha, $31 to Ahafo, and $45 to Akyem.
In 2016, the Company recorded write-downs of $283 and $131, classified as components of Costs applicable to sales and
Depreciation and amortization, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value.
Of the write-downs in 2016, $105 were related to Carlin, $22 to Twin Creeks, $187 to Yanacocha and $100 to Ahafo.
In 2015, the Company recorded write-downs of $226 and $116, classified as components of Costs applicable to sales and
Depreciation and amortization, respectively, to reduce the carrying value of stockpiles and ore on leach pads to net realizable value.
Of the write-downs in 2015, $163 were related to Carlin, $20 to Twin Creeks, $138 to Yanacocha and $21 to Boddington.
NOTE 21 PROPERTY, PLANT AND MINE DEVELOPMENT
Depreciable
Life
At December 31, 2017
At December 31, 2016
Accumulated Net Book
Accumulated Net Book
(in years) Cost
Depreciation Value
Cost
Depreciation Value
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Facilities and equipment . . . . . . . . . . . . . . . . . . . .
Mine development . . . . . . . . . . . . . . . . . . . . . . . . .
Mineral interests . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement cost . . . . . . . . . . . . . . . . . . . . . . .
Construction-in-progress . . . . . . . . . . . . . . . . . . . .
Leased assets included above in facilities and
1 - 27
1 - 27
1 - 27
1 - 27
$
222 $
15,979
5,260
1,975
876
1,972
$ 26,284 $
— $
222 $
218 $
(9,760)
(3,026)
(624)
(607)
—
6,219
2,234
1,351
269
1,972
(14,017) $ 12,267 $ 25,033 $
15,115
4,773
1,975
833
2,119
— $
218
6,341
2,171
1,398
238
2,119
(12,548) $ 12,485
(8,774)
(2,602)
(577)
(595)
—
equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1 - 27
$
27 $
(15) $
12 $
27 $
(11) $
16
Mineral Interests
Production stage . . . . . . . . . . . . . . . . . . . . . . . . . .
Development stage . . . . . . . . . . . . . . . . . . . . . . . .
Exploration stage . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciable
Life
(in years) Cost
1 - 22
$
$
At December 31, 2017
At December 31, 2016
Accumulated Net Book
Depreciation Value
(624) $
—
—
(624) $
241 $
39
1,071
1,351 $
865 $
39
1,071
1,975 $
Accumulated Net Book
Depreciation Value
(577) $
—
—
(577) $
239
66
1,093
1,398
816 $
66
1,093
1,975 $
Cost
Construction-in-progress at December 31, 2017 of $1,972 included $121 at North America related to construction at Carlin,
CC&V, Long Canyon and other infrastructure at Nevada, $1,389 at South America primarily related to engineering and construction
at Conga and Suriname and infrastructure at Yanacocha, $139 at Australia related to infrastructure at Tanami, Boddington, Kalgoorlie
and the Tanami Power project and $316 at Africa related to the Subika underground project and Ahafo Mill expansion and other
146
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
infrastructure at Akyem. There have been no costs capitalized during 2017 for the Conga project in South America, reported in Other
South America.
Construction-in-progress at December 31, 2016 of $2,119 included $141 at North America related to construction at Carlin,
CC&V, Long Canyon and other infrastructure at Nevada, $1,425 at South America primarily related to engineering and construction
at Conga and Suriname and infrastructure at Yanacocha, $155 at Australia related to infrastructure at Tanami, Boddington, and
Kalgoorlie and $387 at Africa related to the Subika underground project and Ahafo Mill expansion and other infrastructure at Akyem
and Ahafo. There have been no costs capitalized during 2016 for the Conga project in South America, reported in Other South
America.
NOTE 22 DEBT
At December 31, 2017
At December 31, 2016
2017 Convertible Senior Notes, net . . . . . . . . . . . . . . . . . . . . . . . . $
2019 Senior Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 Senior Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2035 Senior Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2039 Senior Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2042 Senior Notes, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current Non-Current Current Non-Current
—
— $
624
625
984
985
594
594
858
859
984
984
5
14
4,049
4,061 $
561 $
—
—
—
—
—
5
566 $
— $
—
—
—
—
—
4
4 $
$
(1) As of December 31, 2017, $14 of other financing obligations has been recorded related to the assets under construction for the Tanami Power project.
All outstanding Senior Notes are unsecured and rank equally with one another.
Scheduled minimum debt repayments are $- in 2018, $626 in 2019, $- in 2020, $- in 2021, $992 in 2022 and $2,474 thereafter.
Scheduled minimum capital lease repayments are $4 in 2018, $3 in 2019, $1 in 2020, $1 in 2021, $1 in 2022 and $1 thereafter.
In December 2017, the Company began the early phases of the Tanami Power project which includes the construction of a gas
pipeline to the Tanami site, and construction and operation of two on-site power stations under agreements that qualify for build-to-
suit lease accounting. As of December 31, 2017, the financing obligations under the build-to-suit arrangements were $14.
Corporate Revolving Credit Facilities
In May 2011, the Company entered into a $2,500 revolving credit facility, which was increased to $3,000 in May 2012. The
facility is with a syndicate of financial institutions, provides for borrowings in U.S. dollars and contains a letter of credit-sub facility.
Facility fees vary based on the credit ratings of the Company’s senior, uncollateralized, non-current debt. Borrowings under the
facility bear interest at a market based rate plus a margin determined by the Company’s credit rating. During 2017, the credit facility
was extended to May 25, 2022. Fees and other debt issuance costs related to the extension of the facility were recorded as a reduction
to the carrying value of debt and amortized over the term of the facility. At December 31, 2017, the Company had no borrowings
outstanding under the facility. There was $80 outstanding on the sub-facility letters of credit at December 31, 2017 and 2016.
In September 2013, the Company entered into a Letter of Credit Facility Agreement (“LC Agreement”) with BNP Paribas, New
York Branch. The LC Agreement established a $175 letter of credit facility for a three year period to support reclamation obligations.
In 2017, the agreement was extended to September 30, 2020. The LC Agreement had a balance of $172 at December 31, 2017 and
2016.
2017 Convertible Senior Notes
In July 2017, the Company repaid the $575 outstanding aggregate principal amount of the 2017 Convertible Senior Notes at
maturity.
147
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
The Company’s Consolidated Balance Sheets report the following related to the 2017 Convertible Senior Notes:
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Principal amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unamortized debt discount and issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net carrying amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
At December 31, 2016
123
575
(14)
561
For the years ended December 31, 2017, 2016, and 2015, the Company recorded $5, $9, and $9 of interest expense for the
contractual interest coupon and $14, $24, and $23 of amortization of the debt discount, respectively, related to the Convertible Senior
Notes.
2019 Term Loan
In August 2016, the Company paid the remaining principal balance on the Term Loan of $275. No premiums were paid as a
result of early payment.
2019 and 2039 Senior Notes
In September 2009, the Company completed a two part public offering of $900 and $1,100 uncollateralized Senior Notes
maturing on October 1, 2019 and October 1, 2039, respectively. Net proceeds from the 2019 and 2039 Senior Notes were $895 and
$1,080, respectively. The 2019 Senior Notes pay interest semi-annually at a rate of 5.13% per annum and the 2039 Senior Notes pay
semi-annual interest of 6.25% per annum.
In March 2016, the Company purchased approximately $274 of its 2019 Senior Notes and $226 of its 2039 Senior Notes
through a debt tender offer. The Company recorded a net pre-tax loss of $4 in Other income, net as a result of the debt tender offer.
Additionally, the Company reclassified $2 in Interest expense, net from Accumulated other comprehensive income (loss) related to the
acceleration of the unrealized gains on the treasury rate lock contracts which were entered into upon issuance of the Senior Notes in
2009.
Using prevailing interest rates on similar instruments, the estimated fair value of the 2019 and 2039 Senior Notes was $662 and
$1,132, respectively, at December 31, 2017 and $678 and $981, respectively, at December 31, 2016. The foregoing fair value
estimates were based on an independent third party pricing source and may or may not reflect the actual trading value of this debt.
2022 and 2042 Senior Notes
In March 2012, the Company completed a two part public offering of $1,500 and $1,000 uncollateralized Senior Notes maturing
on March 15, 2022 and March 15, 2042, respectively. Net proceeds from the 2022 and 2042 Senior Notes were $1,479 and $983,
respectively. The 2022 Senior Notes pay interest semi-annually at a rate of 3.50% per annum and the 2042 Senior Notes pay semi-
annual interest of 4.88% per annum.
In November 2016, the Company purchased approximately $508 of its 2022 Senior Notes through a debt tender offer. The
Company recorded a net pre-tax loss of $31 in Other income, net as a result of the debt tender offer. Additionally, the Company
recognized a loss of $20 in Other income, net from Accumulated other comprehensive income (loss) related to the acceleration of the
unrealized losses on the forward starting swap contracts which were previously settled with the issuance of the Senior Notes.
Using prevailing interest rates on similar instruments, the estimated fair value of the 2022 and 2042 Senior Notes was $1,021
and $1,117, respectively, at December 31, 2017 and $1,016 and $959, respectively, at December 31, 2016. The foregoing fair value
estimates were based on an independent third party pricing source and may or may not reflect the actual trading value of this debt.
148
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
2035 Senior Notes
In March 2005, Newmont issued uncollateralized Senior Notes with a principal amount of $600 due April 2035 bearing an
annual interest rate of 5.88%. Interest on the notes is paid semi-annually in April and October. Using prevailing interest rates on
similar instruments, the estimated fair value of these Senior Notes was $739 and $656 at December 31, 2017 and 2016, respectively.
The foregoing fair value estimate was based on an independent third party pricing source and may or may not reflect the actual trading
value of this debt.
Subsidiary Financings
Ahafo Project Finance Facility
In June 2015, the Company paid the remaining outstanding balance of $25 of the Ahafo Project Finance Facility.
Debt Covenants
The Company’s senior notes and revolving credit facility contain various covenants and default provisions including payment
defaults, limitation on liens, leases, sales and leaseback agreements and merger restrictions.
The corporate revolving credit facility contains a financial ratio covenant requiring the Company to maintain a net debt (total
debt net of cash and cash equivalents) to total capitalization ratio of less than or equal to 62.50% in addition to the covenants noted
above. Furthermore, the corporate revolving credit facility contains covenants limiting the sale of all or substantially all of the
Company’s assets, certain change of control provisions and a negative pledge on certain assets.
At December 31, 2017 and 2016, the Company and its related entities were in compliance with all debt covenants and
provisions related to potential defaults.
NOTE 23 OTHER LIABILITIES
At December 31, At December 31,
2017
2016
Other current liabilities:
Accrued operating costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Reclamation and remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes other than income and mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivative instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Other non-current liabilities:
Holt royalty obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Income and mining taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Power supply agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Social development obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
124 $
100
77
63
52
15
7
1
20
459 $
228 $
47
32
22
13
342 $
99
61
53
52
57
13
8
27
37
407
174
50
31
25
46
326
149
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 24 RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance at December 31, 2015 . . . . . . . . . . . . . . . . . . . . . . $
(43) $
116 $
(207) $
(200) $
(334)
Unrealized Gain
Foreign
Currency
Translation
Securities, net Adjustments
(Loss) on
Marketable
Pension and
Other
Post-retirement
Benefit
Adjustments
Unrealized Gain
(Loss) on
Cash flow
Hedge
Instruments
Total
Change in other comprehensive income (loss) before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications from accumulated other comprehensive
45
2
income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current-period other comprehensive income (loss) . .
Balance at December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . $
(103)
(58)
(101) $
—
2
118 $
(32)
16
(16)
(223) $
11
26
61
72
(128) $
Change in other comprehensive income (loss) before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclassifications from accumulated other comprehensive
income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net current-period other comprehensive income (loss) . .
Balance at December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . $
(10)
(5)
(15)
12
—
12
(116) $
130 $
(3)
5
18
15
(208) $
25
30
(98) $
(26)
—
(334)
4
38
42
(292)
Details about Accumulated Other Comprehensive Income (Loss) Components
Amount Reclassified from
Accumulated Other Comprehensive Income (Loss)
Years Ended December 31,
2016
2015
2017
Affected Line Item in the
Consolidated Statements of
Operations
Marketable securities adjustments:
Sale of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Impairment of marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Pension and other post-retirement benefit adjustments:
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Hedge instruments adjustments:
Operating cash flow hedges (effective portion) . . . . . . . . . . . . . . . . . . . . . $
Operating cash flow hedges (ineffective portion) . . . . . . . . . . . . . . . . . . . .
Interest rate contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Total reclassifications for the period, net of tax . . . . . . . . . . . . . . . . . . . . . . . . $
(5)
—
(5)
—
(5)
23
5
28
(10)
18
27
—
10
37
(12)
25
38
$
$
$
$
$
$
$
(103)
—
(103)
—
(103)
19
6
25
(9)
16
59
(1)
33
91
(30)
61
(26)
$
$
$
$
$
$
$
— Other income, net
107 Other income, net
107
—
107
(1)
24
3 Other expense, net
27
(9)
18
Interest expense, net
66 Costs applicable to sales
(2) Other income, net
18
82
(26)
56
181
(1) This accumulated other comprehensive income (loss) component is included in General and administrative and costs that benefit the
inventory/production process. Refer to Note 2 for information on costs that benefit the inventory/production process.
150
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 25 NET CHANGE IN OPERATING ASSETS AND LIABILITIES
Net cash provided by (used in) operating activities of continuing operations attributable to the net change in operating assets and
liabilities is composed of the following:
Years Ended December 31,
2016
2015
2017
Decrease (increase) in operating assets:
Trade and other accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Inventories, stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . .
EGR refinery and other assets (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increase (decrease) in operating liabilities:
Accounts payable and other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
EGR refinery and other liabilities (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(1)
In July 2015, the Company sold its ownership interest in EGR.
NOTE 26 SUPPLEMENTAL CASH FLOW INFORMATION
(221)
—
(52)
18
—
(78)
93
(174)
66 $
(130) $
(302)
—
(83)
97
(287)
(36)
49
26
—
(54)
59
(484)
$
8
36
(61)
(12)
(206)
$
Years Ended December 31,
2016
2017
2015
Income and mining taxes paid, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . $
Interest paid, net of amounts capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
214 $
239 $
85 $
276 $
77
306
Non-cash Investing Activities
During 2017, the Company recorded a non-cash increase to construction-in-progress included as part of Property, plant and
mine development, net and a corresponding increase to financing obligations included in Debt of $14 under build-to-suit arrangements
related to the Tanami Power project.
During 2016 the Company entered into an agreement at Boddington waiving certain mining requirements which resulted in a
non-cash increase to Other non-current assets of $22.
Non-cash Financing Activities
Distributions declared to noncontrolling interests of $170 and $21 for the years ended December 31, 2017 and 2016,
respectively, represent distributions declared to Staatsolie from Merian. The Company paid $178 and $3 in distributions during the
years ended December 31, 2017 and 2016, respectively, related to current and prior period distributions declared. Differences are due
to timing of payments. There were no distributions prior to Merian achieving commercial production in October 2016.
Cash calls requested from noncontrolling interests of $97, $81 and $90 for the years ended December 31, 2017, 2016 and 2015,
respectively, represent cash calls requested from Staatsolie, of which $94, $66 and $109 had been paid as of December 31, 2017, 2016
and 2015, respectively. Differences are due to timing of receipts.
NOTE 27 OPERATING LEASE COMMITMENTS
The Company leases certain assets, such as equipment and facilities, under operating leases expiring at various dates through
2029. Future minimum annual lease payments are $8 in 2018, $7 in 2019, $5 in 2020, $2 in 2021, $1 in 2022 and $3 thereafter,
totaling $26. Rent expense for 2017, 2016 and 2015 was $43, $43 and $45, respectively.
151
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 28 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The following Condensed Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10(e)
of Regulation S-X resulting from the inclusion of Newmont USA Limited (“Newmont USA”), a wholly-owned subsidiary of
Newmont, as a co-registrant with Newmont on debt securities issued under a shelf registration statement on Form S-3 filed under the
Securities Act of 1933 under which securities of Newmont (including debt securities guaranteed by Newmont USA) may be issued
(the “Shelf Registration Statement”). In accordance with Rule 3-10(e) of Regulation S-X, Newmont USA, as the subsidiary guarantor,
is 100% owned by Newmont, the guarantees are full and unconditional, and no other subsidiary of Newmont guaranteed any security
issued under the Shelf Registration Statement. There are no restrictions on the ability of Newmont or Newmont USA to obtain funds
from its subsidiaries by dividend or loan.
Condensed Consolidating Statement of Operation
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Costs and expenses:
Year Ended December 31, 2017
(Non-Guarantor)
(Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
— $
Newmont
Other
Subsidiaries
1,934 $
5,414 $
Newmont
Mining
Corporation
Eliminations Consolidated
7,348
— $
Costs applicable to sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced projects, research and development . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense):
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income - intercompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense - intercompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income and mining tax and other items . . . . . . . . . .
Income and mining tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . .
Equity income (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . $
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Comprehensive loss (income) attributable to noncontrolling interests . . .
Comprehensive income (loss) attributable to Newmont stockholders . . . . $
—
4
—
—
—
—
—
—
4
41
149
(39)
(222)
(71)
(75)
(34)
11
(98)
—
(98)
1,190
351
49
43
21
80
—
12
1,746
6
43
(4)
(7)
38
226
(21)
(124)
81
—
81
2,848
894
128
136
122
157
14
20
4,319
7
41
(190)
(12)
(154)
941
(1,070)
(16)
(145)
(38)
(183)
—
—
—
—
—
—
—
—
—
—
(233)
233
—
—
—
—
113
113
—
113
—
—
—
(98) $
(56) $
—
(56) $
—
—
—
81 $
92 $
—
92 $
(11)
—
(11)
(194) $
(194) $
(11)
(205) $
—
—
—
113 $
113 $
—
113 $
4,038
1,249
177
179
143
237
14
32
6,069
54
—
—
(241)
(187)
1,092
(1,125)
(16)
(49)
(38)
(87)
(11)
—
(11)
(98)
(45)
(11)
(56)
(1) Excludes Depreciation and amortization and Reclamation and remediation.
152
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Condensed Consolidating Statement of Operation
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Costs and expenses:
Year Ended December 31, 2016
(Non-Guarantor)
(Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
— $
Newmont
1,972 $
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
6,711
— $
4,739 $
Costs applicable to sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced projects, research and development . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense):
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income - intercompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense - intercompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income and mining tax and other items . . . . . . . . . .
Income and mining tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . .
Equity income (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . $
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Comprehensive loss (income) attributable to noncontrolling interests . . .
Comprehensive income (loss) attributable to Newmont stockholders . . . . $
—
4
—
—
—
—
—
—
4
(69)
132
(45)
(254)
(236)
(240)
232
(619)
(627)
—
(627)
1,227
335
24
35
11
90
1
30
1,753
14
—
—
(6)
8
227
(55)
(1,344)
(1,172)
—
(1,172)
2,545
881
155
113
123
143
976
28
4,964
124
46
(133)
(13)
24
(201)
(740)
411
(530)
(133)
(663)
—
—
—
—
—
—
—
—
—
—
(178)
178
—
—
—
—
1,539
1,539
—
1,539
—
—
—
(627) $
(627) $
—
(627) $
—
—
—
(1,172) $
(1,170) $
—
(1,170) $
570
(274)
296
(367) $
(665) $
296
(369) $
—
—
—
1,539 $
1,539 $
—
1,539 $
3,772
1,220
179
148
134
233
977
58
6,721
69
—
—
(273)
(204)
(214)
(563)
(13)
(790)
(133)
(923)
570
(274)
296
(627)
(923)
296
(627)
(1) Excludes Depreciation and amortization and Reclamation and remediation.
153
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Condensed Consolidating Statement of Operation
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Costs and expenses:
Year Ended December 31, 2015
(Non-Guarantor)
(Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
— $
Newmont
1,829 $
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
6,085
— $
4,256 $
Costs applicable to sales (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Advanced projects, research and development . . . . . . . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment of long-lived assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other income (expense):
Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income - intercompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense - intercompany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (loss) before income and mining tax and other items . . . . . . . . . . .
Income and mining tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity income (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from continuing operations . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) from discontinued operations . . . . . . . . . . . . . . . . . . . . .
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net loss (income) attributable to noncontrolling interests:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (loss) attributable to Newmont stockholders . . . . . . . . . . . . . . $
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Comprehensive loss (income) attributable to noncontrolling interests . . . .
Comprehensive income (loss) attributable to Newmont stockholders . . . . . $
—
4
—
—
—
—
—
—
4
(10)
130
(20)
(289)
(189)
(193)
67
346
220
—
220
1,225
319
25
30
12
72
4
29
1,716
29
8
—
(7)
30
143
(10)
(304)
(171)
—
(171)
2,353
779
228
126
114
169
52
87
3,908
116
23
(141)
(1)
(3)
345
(448)
(7)
(110)
445
335
—
—
—
—
—
—
—
—
—
—
(161)
161
—
—
—
—
(80)
(80)
—
(80)
—
—
—
220 $
364 $
—
364 $
—
—
—
(171) $
(127) $
—
(127) $
140
(284)
(144)
191 $
422 $
(139)
283 $
—
60
60
(20) $
(211) $
55
(156) $
3,578
1,102
253
156
126
241
56
116
5,628
135
—
—
(297)
(162)
295
(391)
(45)
(141)
445
304
140
(224)
(84)
220
448
(84)
364
(1) Excludes Depreciation and amortization and Reclamation and remediation.
154
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Condensed Consolidating Statement of Cash Flows
Operating activities:
Year Ended December 31, 2017
(Non-Guarantor)
(Guarantor)
(Issuer)
Newmont
Mining
Corporation
Newmont
USA
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
Net cash provided by (used in) operating activities of continuing operations . . . . $
Net cash provided by (used in) operating activities of discontinued operations . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:
Additions to property, plant and mine development . . . . . . . . . . . . . . . . . . . . . .
Purchase of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities of continuing operations . . . .
Net cash provided by (used in) investing activities of discontinued operations . . .
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities:
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding from noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for withholding of employee taxes related to stock-based
compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from stock issuance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sale of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net intercompany borrowings (repayments) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities of continuing operations . . . .
Net cash provided by (used in) financing activities of discontinued operations . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash, cash equivalents and restricted cash . . . .
Net change in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . .
Less net cash provided by (used in) Batu Hijau discontinued operations . . . . . . .
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . . . . . $
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Restricted cash included in Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash included in Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . .
Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(129) $
—
(129)
(207) $
—
(207)
2,686 $
(15)
2,671
— $
—
—
2,350
(15)
2,335
—
(114)
—
—
—
—
—
(114)
—
(114)
(575)
—
(134)
—
—
—
—
—
—
955
(3)
243
—
243
—
—
—
—
—
— $
— $
—
—
— $
(253)
—
—
—
—
—
2
(251)
—
(251)
(3)
—
—
—
—
(13)
—
—
—
473
—
457
—
457
—
(1)
—
(1)
1
— $
— $
—
—
— $
(613)
(16)
35
(15)
5
—
8
(596)
—
(596)
(2)
(178)
—
94
(48)
—
—
—
—
(1,428)
(2)
(1,564)
—
(1,564)
6
517
—
517
2,781
3,298 $
3,259 $
1
38
3,298 $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $
— $
—
—
— $
(866)
(130)
35
(15)
5
—
10
(961)
—
(961)
(580)
(178)
(134)
94
(48)
(13)
—
—
—
—
(5)
(864)
—
(864)
6
516
—
516
2,782
3,298
3,259
1
38
3,298
155
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Condensed Consolidating Statement of Cash Flows
Operating activities:
Year Ended December 31, 2016
(Non-Guarantor)
(Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
Newmont
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
2,240 $
—
2,240
1,342 $
—
1,342
123 $
869
992
(1,782) $
—
(1,782)
(261)
—
8
—
—
—
—
(253)
—
(253)
(3)
—
(1,512)
—
—
(6)
—
—
—
(748)
—
(2,269)
—
(2,269)
—
(1,180)
—
(1,180)
1,181
1 $
1 $
—
—
1 $
(872)
(15)
187
(6)
9
920
(4)
219
(46)
173
(2)
(3)
(270)
66
(19)
—
(146)
—
—
1,614
1
1,241
(331)
910
2
2,077
503
1,574
1,207
2,781 $
2,755 $
1
25
2,781 $
1,923
869
2,792
(1,133)
(15)
195
(6)
9
920
(4)
(34)
(46)
(80)
(1,312)
(3)
(67)
66
(19)
(6)
(146)
—
—
—
1
(1,486)
(331)
(1,817)
2
897
503
394
2,388
2,782
—
—
—
—
—
—
—
—
—
—
—
—
1,782
—
—
—
—
—
—
—
—
1,782
—
1,782
—
—
—
—
—
— $
— $
—
—
— $
2,756
1
25
2,782
Net cash provided by (used in) operating activities of continuing operations . . . . $
Net cash provided by (used in) operating activities of discontinued operations . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:
Additions to property, plant and mine development . . . . . . . . . . . . . . . . . . . . .
Purchases of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities of continuing operations . . . .
Net cash provided by (used in) investing activities of discontinued operations . . .
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities:
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding from noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for withholding of employee taxes related to stock-based
compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from stock issuance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . .
Net intercompany borrowings (repayments) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities of continuing operations . . . .
Net cash provided by (used in) financing activities of discontinued operations . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash, cash equivalents and restricted cash . . . .
Net change in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . .
Less net cash provided by (used in) Batu Hijau discontinued operations . . . . . . .
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . . . . $
—
—
—
—
—
—
—
—
—
—
(1,307)
—
(67)
—
—
—
—
—
—
(866)
—
(2,240)
—
(2,240)
—
—
—
—
—
— $
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Restricted cash included in Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash included in Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . .
Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
—
—
— $
156
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Condensed Consolidating Statement of Cash Flows
Operating activities:
Year Ended December 31, 2015
(Non-Guarantor)
(Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
Newmont
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
7 $
—
7
422 $
—
422
1,159 $
557
1,716
— $
—
—
1,588
557
2,145
(1,311)
(17)
29
(823)
203
—
(32)
(1,951)
(90)
(2,041)
(229)
—
(52)
109
(8)
—
(3)
675
37
—
(2)
527
(225)
302
(24)
382
254
128
2,260
2,388
2,363
—
25
2,388
(985)
(17)
4
(2)
83
—
(32)
(949)
(90)
(1,039)
(27)
—
—
109
(8)
—
(3)
—
34
(234)
(1)
(130)
(225)
(355)
(24)
298
254
44
1,163
1,207 $
1,182 $
—
25
1,207 $
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— $
— $
—
—
— $
Net cash provided by (used in) operating activities of continuing operations . . . . $
Net cash provided by (used in) operating activities of discontinued operations . .
Net cash provided by (used in) operating activities . . . . . . . . . . . . . . . . . . . . . . . .
Investing activities:
Additions to property, plant and mine development . . . . . . . . . . . . . . . . . . . . . .
Purchases of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisitions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sales of other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of Batu Hijau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) investing activities of continuing operations . . . .
Net cash provided by (used in) investing activities of discontinued operations . . .
Net cash provided by (used in) investing activities . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities:
Repayment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding from noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payments for withholding of employee taxes related to stock-based
compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from stock issuance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from sale of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . .
Net intercompany borrowings (repayments) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash provided by (used in) financing activities of continuing operations . . . .
Net cash provided by (used in) financing activities of discontinued operations . .
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash, cash equivalents and restricted cash . . . .
Net change in cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . .
Less net cash provided by (used in) Batu Hijau discontinued operations . . . . . . .
Cash, cash equivalents and restricted cash at beginning of period . . . . . . . . . . . . .
Cash, cash equivalents and restricted cash at end of period . . . . . . . . . . . . . . . . . . $
—
—
—
(821)
102
—
—
(719)
—
(719)
(200)
—
(52)
—
—
(326)
—
25
—
18
—
—
(283)
—
(283)
(2)
—
—
—
—
—
—
675
—
291
(2)
712
—
712
—
—
—
—
—
— $
—
—
—
3
(57)
1
(55)
—
(55)
—
84
—
84
1,097
1,181 $
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Restricted cash included in Other current assets . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash included in Other noncurrent assets . . . . . . . . . . . . . . . . . . . . . .
Total cash, cash equivalents and restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
—
—
— $
1,181 $
—
—
1,181 $
157
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Condensed Consolidating Balance Sheet
Assets:
At December 31, 2017
(Guarantor) (Non-Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
Newmont
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and mine development, net . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current intercompany receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
— $
—
—
2,053
—
—
—
—
2,053
17
106
12,086
—
84
1,700
—
16,046 $
Liabilities:
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current intercompany payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
— $
—
1,338
—
—
52
1,390
4,040
—
—
—
7
—
5,437
— $
18
—
4,601
—
181
196
38
5,034
3,067
4
(311)
648
(1)
401
255
9,097 $
1 $
83
2,145
143
18
163
2,553
4
287
121
222
—
18
3,205
Equity:
3,259 $
106
113
3,484
62
498
480
115
8,117
9,210
170
—
1,200
454
7
310
— $
—
—
(10,138)
—
—
—
—
(10,138)
(27)
—
(11,775)
—
—
(2,108)
—
19,468 $ (24,048) $
3 $
292
6,655
166
230
244
7,590
17
1,867
474
164
2,128
324
12,564
— $
—
(10,138)
—
—
—
(10,138)
—
—
—
—
(2,135)
—
(12,273)
3,259
124
113
—
62
679
676
153
5,066
12,267
280
—
1,848
537
—
565
20,563
4
375
—
309
248
459
1,395
4,061
2,154
595
386
—
342
8,933
Newmont stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10,609
—
10,609
16,046 $
5,892
—
5,892
9,097 $
5,883
1,021
6,904
19,468 $ (24,048) $
(11,775)
—
(11,775)
10,609
1,021
11,630
20,563
158
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
At December 31, 2016
Condensed Consolidating Balance Sheet
Assets:
(Guarantor) (Non-Guarantor)
(Issuer)
Newmont
Mining
Corporation USA
Newmont
Other
Subsidiaries
Newmont
Mining
Corporation
Eliminations Consolidated
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Trade receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accounts receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and mine development, net . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments in subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockpiles and ore on leach pads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current intercompany receivable . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Liabilities:
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intercompany payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and mining taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reclamation and remediation liabilities . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employee-related benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current intercompany payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
— $
—
—
7,255
—
—
—
—
7,255
20
—
13,222
—
477
2,219
—
23,193 $
560 $
—
7,720
—
—
62
8,342
4,038
—
9
—
83
—
12,472
1 $
21
2
6,065
—
155
224
83
6,551
3,144
8
537
599
48
606
224
11,717 $
3 $
62
4,795
148
13
109
5,130
4
247
93
269
—
21
5,764
Equity:
2,755 $
139
181
11,347
56
462
539
59
15,538
9,355
199
—
1,265
1,296
955
243
— $
—
—
(24,667)
—
—
—
—
(24,667)
(34)
—
(13,759)
—
(490)
(3,780)
—
28,851 $ (42,730) $
3 $
258
12,152
156
140
236
12,945
7
1,782
980
142
3,731
305
19,892
— $
—
(24,667)
—
—
—
(24,667)
—
—
(490)
—
(3,814)
—
(28,971)
2,756
160
183
—
56
617
763
142
4,677
12,485
207
—
1,864
1,331
—
467
21,031
566
320
—
304
153
407
1,750
4,049
2,029
592
411
—
326
9,157
Newmont stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
10,721
—
10,721
23,193 $
5,953
—
5,953
11,717 $
7,806
1,153
8,959
28,851 $ (42,730) $
(13,759)
—
(13,759)
10,721
1,153
11,874
21,031
NOTE 29 COMMITMENTS AND CONTINGENCIES
General
Estimated losses from contingencies are accrued by a charge to income when information available prior to issuance of the
financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably
estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or
reasonably estimable, disclosure of the contingency and estimated range of loss, if determinable, is made in the financial statements
when it is at least reasonably possible that a material loss could be incurred.
Operating Segments
The Company’s operating and reportable segments are identified in Note 5. Except as noted in this paragraph, all of the
Company’s commitments and contingencies specifically described herein are included in Corporate and Other in Note 5. The
159
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Yanacocha matters relate to the South America reportable segment. The Fronteer matters relate to the North America reportable
segment.
Environmental Matters
The Company’s mining and exploration activities are subject to various laws and regulations governing the protection of the
environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company
conducts its operations so as to protect the public health and environment and believes its operations are in compliance with applicable
laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with
such laws and regulations, but cannot predict the full amount of such future expenditures.
In early 2015, the Peruvian government agency responsible for certain environmental regulations, the Ministry of the
Environment (“MINAM”), issued proposed water quality criteria for designated beneficial uses which apply to mining companies,
including Yanacocha. These criteria would modify the in-stream water quality criteria pursuant to which Yanacocha has been
designing water treatment processes and infrastructure. In December 2015, MINAM issued the final regulation that modified the water
quality standards. In response, in February 2017, Yanacocha submitted its proposed modification to the previously approved
Environmental Impact Assessment to the Mining Ministry (“MINEM”), which is still under review. After approval, MINEM may
allow up to three years to develop and implement the modifications to the water management system. In the event Yanacocha is
unsuccessful in implementing the modifications in compliance with the new regulations and deadlines, it could result in fines and
penalties relating to potential intermittent non-compliant exceedances. In addition, if accepted the treatment options will result in
increased costs. These impacts may adversely impact the future cost and financial performance of our operations in Peru.
In December 2016, the Company completed a comprehensive study of the Yanacocha long-term mining and closure plans as
part of the requirement to submit an updated closure plan to Peruvian regulators every five years. As a result, the Company recorded
an increase to the reclamation obligation at Yanacocha of $425. There were minimal changes to the updated closure plan in 2017 prior
to submitting to Peruvian regulators in September 2017. The regulators completed their review and approved the updated closure plan
in November 2017. See Note 6 and Note 7 for additional information regarding the Company’s update to the Yanacocha long-term
mining and closure plan for submission to the Peruvian regulators and the resulting non-cash impairment charge of $970 recorded for
Yanacocha as of December 31, 2016.
Estimated future reclamation costs are based principally on legal and regulatory requirements. At December 31, 2017 and 2016,
$1,965 and $1,792, respectively, were accrued for reclamation costs relating to currently or recently producing mineral properties in
accordance with asset retirement obligation guidance. The current portions of $59 and $28 at December 31, 2017 and 2016,
respectively, are included in Other current liabilities.
In addition, the Company is involved in several matters concerning environmental obligations associated with former mining
activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. The
Company believes that the related environmental obligations associated with these sites are similar in nature with respect to the
development of remediation plans, their risk profile and the compliance required to meet general environmental standards. Based upon
the Company’s best estimate of its liability for these matters, $289 and $298 were accrued for such obligations at December 31, 2017
and 2016, respectively. These amounts are included in Other current liabilities and Reclamation and remediation liabilities.
Depending upon the ultimate resolution of these matters, the Company believes that it is reasonably possible that the liability for these
matters could be as much as 44% greater or 0% lower than the amount accrued at December 31, 2017. The amounts accrued are
reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are recorded in Reclamation and
remediation in the period estimates are revised.
Refer to Note 6 for further information regarding reclamation and remediation. Details about certain of the more significant
matters are discussed below.
Newmont USA Limited - 100% Newmont Owned
Ross-Adams mine site. By letter dated June 5, 2007, the U.S. Forest Service (“USFS”) notified Newmont that it had expended
approximately $0.3 in response costs to address environmental conditions at the Ross-Adams mine in Prince of Wales, Alaska, and
requested Newmont USA Limited pay those costs and perform an Engineering Evaluation/Cost Analysis (“EE/CA”) to assess what
160
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
future response activities might need to be completed at the site. Newmont agreed to perform the EE/CA, which has been provided to
the USFS. During the first quarter of 2016, the USFS confirmed approval of the EE/CA, and Newmont issued written notice to the
USFS certifying that all requirements of the Administrative Settlement Agreement and Order on Consent (“ASAOC”) between the
USFS and Newmont have been completed. The ASAOC will be final upon USFS concurrence with the notice of completion and
Newmont payment of USFS response costs. Newmont anticipates that the USFS will issue an Action Memorandum to select the
preferred Removal Action alternative identified in the EE/CA. During the third quarter of 2016, Newmont received a notice of
completion of work per the ASAOC from the USFS. Newmont is continuing discussions with the USFS and the U.S. Department of
Justice to determine the next steps. No assurances can be made at this time with respect to the outcome of such negotiations and
Newmont cannot predict the likelihood of additional expenditures related to this matter.
Dawn Mining Company LLC (“Dawn”) - 51% Newmont Owned
Midnite mine site and Dawn mill site. Dawn previously leased an open pit uranium mine, currently inactive, on the Spokane
Indian Reservation in the State of Washington. The mine site is subject to regulation by agencies of the U.S. Department of Interior
(the Bureau of Indian Affairs and the Bureau of Land Management), as well as the U. S. Environmental Protection Agency (“EPA”).
As per the Consent Decree approved by the U.S. District Court for the Eastern District of Washington on January 17, 2012, the
following actions were required of Newmont, Dawn, the Department of the Interior and the EPA: (i) Newmont and Dawn would
design, construct and implement the cleanup plan selected by the EPA in 2006 for the Midnite mine site; (ii) Newmont and Dawn
would reimburse the EPA for its costs associated with overseeing the work; (iii) the Department of the Interior would contribute a
lump sum amount toward past EPA costs and future costs related to the cleanup of the Midnite mine site; (iv) Newmont and Dawn
would be responsible for all other EPA oversight costs and Midnite mine site cleanup costs; and (v) Newmont would post a surety
bond for work at the site.
During 2012, the Department of Interior contributed its share of past EPA costs and future costs related to the cleanup of the
Midnite mine site in a lump sum payment of $42, which Newmont classified as restricted assets with interest on the Consolidated
Balance Sheets for all periods presented. In 2016, Newmont completed the remedial design process (with the exception of the new
water treatment plant (“WTP”) design which was awaiting the approval of the new NPDES permit). Subsequently, the new NPDES
permit was received in 2017 and new WTP design will re-commence in 2018. The procured contractor continued implementing
Phase 1 remedial actions during the 2017 construction season with Pit 4 backfill preparations.
The Dawn mill site is regulated by the Washington Department of Health and is in the process of being closed. Remediation at
the Dawn mill site began in 2013. The Tailing Disposal Area 1-4 reclamation earthworks component was completed during 2017 with
the exception of the embankment erosion protection anticipated to be completed in 2018. The remaining closure activity will consist
primarily of addressing groundwater issues.
The remediation liability for the Midnite mine site and Dawn mill site is approximately $185 at December 31, 2017.
Other Legal Matters
Minera Yanacocha S.R.L. - 54.05% Newmont Owned
Administrative Actions. The Peruvian government agency responsible for environmental evaluation and inspection, Organismo
Evaluacion y Fiscalizacion Ambiental (“OEFA”), conducts periodic reviews of the Yanacocha site. In 2011, 2012, 2013, 2015, 2016
and 2017, OEFA issued notices of alleged violations of OEFA standards to Yanacocha and Conga relating to past inspections. OEFA
has resolved some alleged violations with minimal or no findings. In 2015 and 2016, the water authority of Cajamarca issued notices
of alleged regulatory violations, and resolved some allegations in 2017 with no findings. The experience with OEFA and the water
authority is that in the case of a finding of violation, remedial action is often the outcome rather than a significant fine. The alleged
OEFA violations currently range from zero to 11,310 units and the water authority alleged violations range from zero to 10,054 units,
with each unit having a potential fine equivalent to approximately $.001224 based on current exchange rates ($0 to $26). Yanacocha
and Conga are responding to all notices of alleged violations, but cannot reasonably predict the outcome of the agency allegations.
Conga Project Constitutional Claim. On October 18, 2012, Marco Antonio Arana Zegarra filed a constitutional claim against
the Ministry of Energy and Mines and Yanacocha requesting the Court to order the suspension of the Conga project as well as to
161
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
declare not applicable the October 27, 2010, directorial resolution approving the Conga project Environmental Impact Assessment
(“EIA”). On October 23, 2012, a Cajamarca judge dismissed the claims based on formal grounds finding that: (i) plaintiffs had not
exhausted previous administrative proceedings; (ii) the directorial resolution approving the Conga EIA is valid, and was not
challenged when issued in the administrative proceedings; (iii) there was inadequate evidence to conclude that the Conga project is a
threat to the constitutional right of living in an adequate environment and; (iv) the directorial resolution approving the Conga project
EIA does not guarantee that the Conga project will proceed, so there was no imminent threat to be addressed by the Court. The
plaintiffs appealed the dismissal of the case. The Civil Court of the Superior Court of Cajamarca confirmed the above mentioned
resolution and the plaintiff presented an appeal. On March 13, 2015, the Constitutional Court published its ruling stating that the case
should be sent back to the first court with an order to formally admit the case and start the judicial process in order to review the claim
and the proofs presented by the plaintiff. Yanacocha has answered the claim. Neither the Company nor Yanacocha can reasonably
predict the outcome of this litigation.
Yanacocha Tax Dispute. In 2000, Yanacocha paid Buenaventura and Minas Conga S.R.L. a total of $29 to assume their
respective contractual positions in mining concession agreements with Chaupiloma Dos de Cajamarca S.M.R.L. The contractual rights
allowed Yanacocha the opportunity to conduct exploration on the concessions, but not a purchase of the concessions. The tax
authority alleges that the payments to Buenaventura and Minas Conga S.R.L. were acquisitions of mining concessions requiring the
amortization of the amounts under the Peru Mining Law over the life of the mine. Yanacocha expensed the amounts at issue in the
initial year since the payments were not for the acquisition of a concession but rather these expenses represent the payment of an
intangible and therefore, amortizable in a single year or proportionally for up to ten years according to Income Tax Law. In 2010, the
tax court in Peru ruled in favor of Yanacocha and the tax authority appealed the issue to the judiciary. The first appellate court
confirmed the ruling of the tax court in favor of Yanacocha. However, in November, 2015, a Superior Court in Peru made an appellate
decision overturning the two prior findings in favor of Yanacocha. Yanacocha has appealed the Superior Court ruling to the Peru
Supreme Court. The potential liability in this matter is in the form of fines and interest in an amount up to $75. While the Company
has assessed that the likelihood of a ruling against Yanacocha in the Supreme Court as remote, it is not possible to fully predict the
outcome of this litigation.
NWG Investments Inc. v. Fronteer Gold Inc.
In April 2011, Newmont acquired Fronteer Gold Inc. (“Fronteer”).
Fronteer acquired NewWest Gold Corporation (“NewWest Gold”) in September 2007. At the time of that acquisition, NWG
Investments Inc. (“NWG”) owned approximately 86% of NewWest Gold and an individual named Jacob Safra owned or controlled
100% of NWG. Prior to its acquisition of NewWest Gold, Fronteer entered into a June 2007 lock-up agreement with NWG providing
that, among other things, NWG would support Fronteer’s acquisition of NewWest Gold. At that time, Fronteer owned approximately
47% of Aurora Energy Resources Inc. (“Aurora”), which, among other things, had a uranium exploration project in Labrador, Canada.
NWG contends that, during the negotiations leading up to the lock-up agreement, Fronteer represented to NWG, among other
things, that Aurora would commence uranium mining in Labrador by 2013, that this was a firm date, that Aurora faced no current
environmental issues in Labrador and that Aurora’s competitors faced delays in commencing uranium mining. NWG further contends
that it entered into the lock-up agreement and agreed to support Fronteer’s acquisition of NewWest Gold in reliance upon these
purported representations. On October 11, 2007, less than three weeks after the Fronteer-NewWest Gold transaction closed, a member
of the Nunatsiavut Assembly introduced a motion calling for the adoption of a moratorium on uranium mining in Labrador. On
April 8, 2008, the Nunatsiavut Assembly adopted a three-year moratorium on uranium mining in Labrador. NWG contends that
Fronteer was aware during the negotiations of the NWG/Fronteer lock-up agreement that the Nunatsiavut Assembly planned on
adopting this moratorium and that its adoption would preclude Aurora from commencing uranium mining by 2013, but Fronteer
nonetheless fraudulently induced NWG to enter into the lock-up agreement.
On September 24, 2012, NWG served a summons and complaint on the Company, and then amended the complaint to add
Newmont Canada Holdings ULC as a defendant. The complaint also named Fronteer Gold Inc. and Mark O’Dea as defendants. The
complaint sought rescission of the merger between Fronteer and NewWest Gold and $750 in damages. In August 2013 the Supreme
Court of New York, New York County issued an order granting the defendants’ motion to dismiss on forum non conveniens.
Subsequently, NWG filed a notice of appeal of the decision and then a notice of dismissal of the appeal on March 24, 2014.
162
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
On February 26, 2014, NWG filed a lawsuit in Ontario Superior Court of Justice against Fronteer Gold Inc., Newmont Mining
Corporation, Newmont Canada Holdings ULC, Newmont FH B.V. and Mark O’Dea. The Ontario complaint is based upon
substantially the same allegations contained in the New York lawsuit with claims for fraudulent and negligent misrepresentation.
NWG seeks disgorgement of profits since the close of the NWG deal on September 24, 2007 and damages in the amount of C$1.2
billion. Newmont, along with other defendants, served the plaintiff with its statement of defense on October 17, 2014. Newmont
intends to vigorously defend this matter, but cannot reasonably predict the outcome.
Investigations
We occasionally identify or are apprised of information or allegations that certain employees, affiliates, agents or associated
persons may have engaged in unlawful conduct for which we might be held responsible. We previously conducted an investigation,
with the assistance of outside counsel, relating to certain business activities of the Company and its affiliates and contractors in
countries outside the U.S. The investigation included a review of compliance with the requirements of the U.S. Foreign Corrupt
Practices Act and other applicable laws and regulations. The Company worked with the U.S. SEC and the U.S. Department of Justice
with respect to the investigation. In March 2016, the Company entered into a one-year agreement with the U.S. SEC tolling the statute
of limitations relating to the investigation, and in April 2016, entered into a similar agreement with the U.S. Department of Justice.
Both of the initial tolling agreements were effective through October 29, 2016. In September 2016, the Company agreed to extend its
tolling agreement with the Department of Justice through April 2017, and agreed to a similar extension with the SEC in October 2016.
In late February 2017, the Company received a declination letter from the SEC relating to this investigation indicating that they
do not intend to recommend an enforcement action. In June 2017, the Company received a similar letter from the U.S. Department of
Justice acknowledging the Company’s cooperation in the investigation and indicating that the Department of Justice had closed its
inquiry into the matter.
Other Commitments and Contingencies
The Company has minimum royalty obligations on one of its producing mines in Nevada for the life of the mine. Amounts paid
as a minimum royalty (where production royalties are less than the minimum obligation) in any year are recoverable in future years
when the minimum royalty obligation is exceeded. Although the minimum royalty requirement may not be met in a particular year,
the Company expects that over the mine life, gold production will be sufficient to meet the minimum royalty requirements. Royalty
payments payable, net of recoverable amounts, are $31 in 2018, $31 in 2019, $22 in 2020, $- in 2021, $- in 2022 and $- thereafter.
On June 25, 2009, the Company completed the acquisition of the remaining 33.33% interest in Boddington from AngloGold
Ashanti Australia Limited (“AngloGold”). Consideration for the acquisition consisted of $982 and a contingent royalty capped at
$100, equal to 50% of the average realized operating margin (Revenue less Costs applicable to sales on a by-product basis), if any,
exceeding $600 per ounce, payable quarterly beginning in the second quarter of 2010 on one-third of gold sales from Boddington. At
the acquisition date, the Company estimated the fair value of the contingent consideration at $62. At December 31, 2017 and 2016, the
estimated fair value of the unpaid contingent consideration was approximately $7 and $14, respectively. This contingent royalty is
capped at $100 in aggregate payments, of which $93 has been paid to date. Changes to the estimated fair value resulting from periodic
revaluations are recorded to Other expense, net. The Company paid $15 and $6 during 2017 and 2016, respectively, and made no
payments during 2015. As of December 31, 2017, the Company expects to pay the remaining $7 of which the Company expects to pay
$3 in the next 12 months.
As part of its ongoing business and operations, the Company and its affiliates are required to provide surety bonds, bank letters
of credit and bank guarantees as financial support for various purposes, including environmental remediation, reclamation, exploration
permitting, workers compensation programs and other general corporate purposes. At December 31, 2017 and 2016, there were $2,321
and $2,227, respectively, of outstanding letters of credit, surety bonds and bank guarantees. The obligations associated with these
instruments are generally related to performance requirements that the Company addresses through its ongoing operations. As the
specific requirements are met, the beneficiary of the associated instrument cancels and/or returns the instrument to the issuing entity.
Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure.
Generally, bonding requirements associated with environmental regulation are becoming more restrictive. However, the Company
believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements through
existing or alternative means, as they arise.
163
NEWMONT MINING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share, per ounce and per pound amounts)
Newmont is from time to time involved in various legal proceedings related to its business. Except in the above described
proceedings, management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be
required to be paid by reason thereof will have a material adverse effect on the Company’s financial condition or results of operations.
NOTE 30 UNAUDITED SUPPLEMENTARY DATA
Quarterly Data
The following is a summary of selected quarterly financial information (unaudited):
2017
Three Months Ended
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,659 $ 1,875 $
Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
524 $
Income (loss) from continuing operations (2) . . . . . . . . . . . . . . $
192 $
Income (loss) from discontinued operations (2) . . . . . . . . . . . .
(15)
Net income (loss) attributable to Newmont stockholders . . . . $
177 $
Income (loss) per common share
March 31 June 30 September 30 December 31
1,935
487
(534)
7
(527)
1,879 $
470 $
213 $
(7)
206 $
403 $
69 $
(23)
46 $
Basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
0.13 $
(0.04)
0.09 $
0.36 $
(0.03)
0.33 $
0.13 $
(0.04)
0.09 $
0.36 $
(0.03)
0.33 $
Weighted average common shares (millions)
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
532
533
533
535
Cash dividends declared per common share . . . . . . . . . . . . . $ 0.050 $ 0.050 $
Closing price of common stock . . . . . . . . . . . . . . . . . . . . . . . $ 32.96 $ 32.39 $
0.39 $
(0.01)
0.38 $
0.39 $
(0.01)
0.38 $
533
536
0.075 $
37.51 $
(0.99)
0.01
(0.98)
(0.99)
0.01
(0.98)
533
536
0.075
37.52
2016
Three Months Ended
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,462 $ 1,669 $
Gross profit (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
465 $
Income (loss) from continuing operations (2) . . . . . . . . . . . . . . $
14 $
Income (loss) from discontinued operations (2) . . . . . . . . . . . .
9
23 $
Net income (loss) attributable to Newmont stockholders . . . . $
Income (loss) per common share
March 31 June 30 September 30 December 31
1,789
313
(391)
47
(344)
1,791 $
448 $
169 $
(527)
(358) $
314 $
(12) $
64
52 $
Basic:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
Diluted:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
(0.02) $
0.12
0.10 $
0.02 $
0.02
0.04 $
(0.02) $
0.12
0.10 $
0.02 $
0.02
0.04 $
Weighted average common shares (millions)
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
530
531
531
533
Cash dividends declared per common share . . . . . . . . . . . . . $ 0.025 $ 0.025 $
Closing price of common stock . . . . . . . . . . . . . . . . . . . . . . . $ 26.58 $ 39.12 $
0.32 $
(0.99)
(0.67) $
0.32 $
(0.99)
(0.67) $
531
533
0.025 $
39.29 $
(0.73)
0.08
(0.65)
(0.73)
0.08
(0.65)
531
534
0.050
34.07
(1) Sales less Costs applicable to sales, Depreciation and amortization and Reclamation and remediation.
(2) Attributable to Newmont stockholders.
164
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer
have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective
to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to
be disclosed in its reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended
December 31, 2017, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial
reporting.
Management’s Report on Internal Control over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over financial
reporting. Internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal
executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are
subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting at
December 31, 2017. In making this assessment, the Company’s management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework 2013. Based upon its
assessment, management concluded that, at December 31, 2017, the Company’s internal control over financial reporting was effective.
Ernst & Young LLP, an independent registered public accounting firm, who audited the Company’s Consolidated Financial
Statements as of December 31, 2017 and the year then ended included in this Form 10-K, has issued an attestation report on the
Company’s internal control over financial reporting, as of December 31, 2017, which is included herein.
165
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Newmont Mining Corporation
Opinion on Internal Control over Financial Reporting
We have audited Newmont Mining Corporation’s internal control over financial reporting as of December 31, 2017, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (2013 framework), (the COSO criteria). In our opinion, Newmont Mining Corporation (the Company) maintained, in all
material respects, effective internal control over financial reporting as of December 31, 2017, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated statements of
operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December
31, 2017, and the related notes and our report dated February 22, 2018 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on
Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial
reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material
respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Denver, Colorado
February 22, 2018
166
ITEM 9B. OTHER INFORMATION
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information concerning Newmont’s directors, Audit Committee, compliance with Section 16(a) of the Exchange Act and Code
of Ethics is contained in Newmont’s definitive Proxy Statement, filed pursuant to Regulation 14A promulgated under the Securities
Exchange Act of 1934 for the 2018 Annual Meeting of Stockholders and is incorporated herein by reference.
Information concerning Newmont’s executive officers is set forth below:
Name
Gary J. Goldberg . . . . . . . . .
Nancy K. Buese . . . . . . . . . .
Elaine Dorward-King . . . . . .
Randy Engel . . . . . . . . . . . . .
Stephen P. Gottesfeld . . . . . .
Scott P. Lawson . . . . . . . . . .
William N. MacGowan . . . .
Thomas R. Palmer . . . . . . . .
John W. Kitlen . . . . . . . . . . .
Age
59
48
60
51
50
56
60
50
54
Office
President and Chief Executive Officer
Executive Vice President and Chief Financial Officer
Executive Vice President, Sustainability and External
Relations
Executive Vice President, Strategic Development
Executive Vice President and General Counsel
Executive Vice President and Chief Technology Officer
Executive Vice President, Human Resources
Executive Vice President and Chief Operating Officer
Vice President, Controller and Chief Accounting Officer
There are no family relationships by blood, marriage or adoption among any of the above executive officers or members of the
Board of Directors of Newmont. Each executive officer is elected annually by the Board of Directors of Newmont to serve for one
year or until his or her respective successor is elected and qualified. There is no arrangement or understanding between any of the
above executive officers and any other person pursuant to which he or she was selected as an executive officer.
Mr. Goldberg was elected President and Chief Executive Officer in March 2013, having previously served as President and
Chief Operating Officer since July 2012. Mr. Goldberg served as Executive Vice President and Chief Operating Officer since
December 2011. Mr. Goldberg previously served as President and Chief Executive Officer, Rio Tinto Minerals from 2006 to 2011 and
President and Chief Executive Officer, Rio Tinto Borax from 2004 to 2006.
Ms. Buese was elected Executive Vice President and Chief Financial Officer in October 2016. Ms. Buese most recently served
as Executive Vice President and Chief Financial Officer for MPLX, a publicly traded energy company formed by Marathon Petroleum
Corporation. Prior to MPLX’s acquisition of MarkWest Energy Partners in 2015, Ms. Buese served for 11 years as Executive Vice
President and Chief Financial Officer of MarkWest. Ms. Buese also is a former Partner with Ernst & Young and worked in public
accounting for 12 years.
Dr. Dorward-King was elected Executive Vice President of Sustainability & External Relations in March 2013 when she joined
Newmont. Dr. Dorward-King served as Managing Director of Richards Bay Minerals in South Africa from 2011 through 2012.
Dr. Dorward-King previously served as the Global Head of Health, Safety and Environment at Rio Tinto from 2002 to 2010 and also
held leadership positions with Rio Tinto’s copper and borates businesses. Prior to that, she worked for Ebasco Environmental and for
Monsanto Company as a chemist, research specialist and product manager.
Mr. Engel was elected Executive Vice President, Strategic Development in October 2008, having served as Senior Vice
President, Strategy and Corporate Development since July 2007. Mr. Engel served as Vice President, Strategic Planning and Investor
relations from 2006 to 2007; Group Executive, Investor Relations from 2004 to 2006; and Assistant Treasurer from 2001 to 2004.
Mr. Engel has been with Newmont since 1994, and has served in various capacities in the areas of business planning, corporate
treasury and human resources.
167
Mr. Gottesfeld was elected as Executive Vice President and General Counsel in March 2015 after having served as Executive
Vice President, General Counsel and Corporate Secretary since February 2013. He previously served as Senior Vice President,
General Counsel and Corporate Secretary since February 2012 and Vice President and General Counsel since January 2010.
Mr. Gottesfeld was Vice President, Communications and Public Affairs from 2006 to 2010. Mr. Gottesfeld was Newmont's Associate
General Counsel from 2004 to 2006, responsible for Newmont's Latin American, African and Central Asian legal affairs. From 2002
to 2004, Mr. Gottesfeld was Newmont's Associate General Counsel and General Manager of Newmont Peru S.R.L., working in Lima,
Peru. From 1997 to 2001, Mr. Gottesfeld served in various roles, including as Assistant General Counsel and Senior Counsel.
Mr. Lawson was appointed Executive Vice President and Chief Technology Officer for Newmont in May 2016. He was elected
Executive Vice President, Technical Services in March 2015 having previously served as Senior Vice President, Technical Services
since December 2012. Prior to joining Newmont, Mr. Lawson served as Senior Vice President, Engineering Services at Peabody
Energy, responsible for global engineering and technical services support. Mr. Lawson spent 22 years with international miner Rio
Tinto including executive roles and as Vice President, Engineering and Technical Services for Kennecott Utah Copper. He has also
served on the Utah Air Quality Board and the Utah Safety Council Board.
Mr. MacGowan serves as Executive Vice President, Human Resources after having been elected Executive Vice President,
Human Resources and Communications in February 2010. Prior to joining Newmont, Mr. MacGowan served as Executive Vice
President and Chief Human Resources Officer, People and Places for Sun Microsystems from 2006 to 2010; Senior Vice President,
Human Resources, 2004 to 2006; Vice President, Human Resources, Global Centers of Expertise, 2002 to 2004; Vice President,
Human Resources, Engineering and Operations, 2001 to 2002; Vice President, Human Resources, Enterprise Services, 1999 to 2001
and; Director, Human Resources, Enterprise Services, 1998 to 1999.
Mr. Palmer became the Executive Vice President and Chief Operating Officer for Newmont on May 1, 2016. Previously,
Mr. Palmer was elected Senior Vice President, Asia Pacific in February 2015 after serving as Senior Vice President, Indonesia since
March 2014. Prior to joining Newmont, he was the Chief Operating Officer, Pilbara Mines at Rio Tinto Iron Ore. Over a 20-year
career with Rio Tinto, Mr. Palmer worked in a variety of roles across a number of commodities, including General Manager,
Technology for the Bauxite and Alumina business; General Manager, Operations at Hail Creek coal mine; and General Manager,
Asset Management at Palabora Mining Company in South Africa.
Mr. Kitlen became the Vice President, Controller and Chief Accounting Officer in June 2016. He was elected Vice President,
Internal Audit in October 2012, having previously served as Director, Internal Audit since joining Newmont in February 2011. Prior to
joining Newmont, Mr. Kitlen served as Director, Internal Audit at Sun Microsystems for four years. Previously, he served as the
Internal Audit Director for StorageTek and spent more than seven years with Level 3 Communications in various roles including Vice
President of Internal Audit, Assistant Corporate Controller and Director of Finance. Mr. Kitlen began his career in public accounting
with Deloitte and Touche.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning this item is contained in Newmont’s definitive Proxy Statement, filed pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934 for the 2018 Annual Meeting of Stockholders and is incorporated herein by
reference.
168
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Information concerning this item is contained in Newmont’s definitive Proxy Statement, filed pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934 for the 2018 Annual Meeting of Stockholders and incorporated herein by
reference.
Equity Compensation Plan Information
The following table sets forth at December 31, 2017 information regarding Newmont’s Common Stock that may be issued
under Newmont’s equity compensation plans:
Plan Category
Equity compensation plans approved by security holders (2) . .
Equity compensation plans not approved by security
Number of Securities to be
issued upon exercise of
outstanding options,
warrants and rights
(a)
Weighted average exercise
price of outstanding
options, warrants and
rights
(b) (1)
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
6,320,009
51.74
11,339,741 (3)
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
N/A
—
(1) The weighted average exercise price does not take into account the shares issuable upon vesting of restricted stock units, performance leveraged
stock units or strategic stock units.
(2) Newmont’s 2013 Stock Incentive Plan was approved by the stockholders on April 24, 2013. A maximum of 14,500,000 shares of Newmont's
Common Stock, plus up to 7,842,793 shares available for grant under the 2005 Incentive Plan as of December 31, 2013, were authorized to be
issued under the 2013 Stock Incentive Plan at that time. There are currently 11,339,741shares registered and available to grant under the 2013
Stock Incentive Plan. There are no equity compensation plans not approved by stockholders.
(3) Securities remaining available for future issuance under the 2013 Stock Incentive Plan. No additional grants or awards will be made under any
of the Company’s other plans.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information concerning this item is contained in Newmont’s definitive Proxy Statement, filed pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934 for the 2018 Annual Meeting of Stockholders and incorporated herein by
reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information concerning this item is contained in Newmont’s definitive Proxy Statement, filed pursuant to Regulation 14A
promulgated under the Securities Exchange Act of 1934 for the 2018 Annual Meeting of Stockholders and incorporated herein by
reference.
169
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
The following documents are filed as a part of this report:
(a) Financial Statements
(1) The Consolidated Financial Statements, together with the report thereon of Ernst & Young LLP dated February 22, 2018,
are included as part of Item 8, Financial Statements and Supplementary Data, commencing on page 94 above.
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Comprehensive Income (Loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Changes in Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
94
95
96
97
99
100
101
(2) Financial Statement Schedules:
Included on page SCH-1 is Schedule II – Valuation and Qualifying Accounts.
(3) Exhibits:
Exhibit
Number
2.1
—
Description
Stock Purchase Agreement, dated as of June 8, 2015 by and among Registrant and AngloGold Ashanti
North America Inc., AngloGold Ashanti USA Incorporated, AngloGold Ashanti (Colorado) Corp., GCGC
LLC and, for limited purposes, AngloGold Ashanti Limited. Incorporated by reference to Exhibit 2.1 to
Registrant’s Form 8-K filed with the Securities and Exchange Commission on June 10, 2015.
2.2
—
NTPBV Share Sale and Purchase Agreement by and among Nusa Tenggara Partnership BV, as vendor,
Newmont Mining Corporation, as vendor guarantor, Sumitomo Corporation, as vendor guarantor, and PT
Amman Mineral Internasional, as purchaser, dated June 30, 2016. Incorporated by reference to Registrant’s
Form 8-K filed with the Securities and Exchange Commission on July 5, 2016.
2.3
—
Sale and Purchase Agreement – PTPI Loan by and among NVL (USA) Limited, as original lender,
Newmont Mining Corporation, as original lender guarantor, and PT Amman Mineral Internasional, as new
lender, dated June 30, 2016. Incorporated by reference to Registrant’s Form 8-K filed with the Securities
and Exchange Commission on July 5, 2016.
3.1
—
Certificate of Incorporation of Registrant, restated as of October 28, 2009. Incorporated by reference to
Exhibit 3.1 to Registrant’s Form 10-Q for the period ended September 30, 2009, filed with the Securities
and Exchange Commission on October 29, 2009.
3.2
—
By-Laws of the Registrant as amended and restated effective as of February 12, 2016. Incorporated by
reference to Exhibit 3.2 to Registrant’s Form 10-K for the year ended December 31, 2015 filed with the
Securities and Exchange Commission on February 17, 2016.
4.1
—
Indenture, dated as of March 22, 2005, among Registrant, Newmont USA Limited and Citibank, N.A.
Incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed with the Securities and Exchange
Commission on March 22, 2005.
170
4.2
—
Form of 5.875% Note due 2035 issued pursuant to Indenture, dated as of March 22, 2005, among
Registrant, Newmont USA Limited and Citibank, N.A. Incorporated by reference to Exhibit 4.2 to
Registrant’s Form 8-K filed with the Securities and Exchange Commission on March 22, 2005.
4.3
—
Base Indenture, dated September 18, 2009, among Registrant, Newmont USA Limited and The Bank of
New York Mellon Trust Company, N.A., as trustee. Incorporated by reference to Exhibit 4.1 to Registrant’s
Form 8-K filed with the Securities and Exchange Commission on September 18, 2009.
4.4
—
First Supplemental Indenture, dated September 18, 2009, among Registrant, Newmont USA Limited and
The Bank of New York Mellon Trust Company, N.A., as trustee (including form of 5.125% Senior Note due
2019, form of 6.250% Senior Note due 2039, and forms of Guaranty for the 2019 Notes and 2039 Notes).
Incorporated by reference to Exhibit 4.2 to Registrant’s Form 8-K filed with the Securities and Exchange
Commission on September 18, 2009.
4.5
—
See footnote(1).
10.1*
—
Savings Equalization Plan, amended and restated, of Newmont USA Limited, a wholly owned subsidiary of
the Registrant, effective December 31, 2008. Incorporated by reference to Exhibit 10.1 to Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange
Commission on February 19, 2009.
10.2*
—
Amendment One to the December 31, 2008 restated Savings Equalization Plan of Newmont USA Limited, a
wholly owned subsidiary of the Registrant, effective January 1, 2010 and Amendment Two to the December
31, 2008 restated Savings Equalization Plan of Newmont USA Limited, a wholly owned subsidiary of the
Registrant, effective January 1, 2011, both incorporated by reference to Exhibit 10.59 to Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange
Commission on February 24, 2012.
10.3*
—
Amendment Three to the December 31, 2008 restated Savings Equalization Plan of Newmont USA Limited,
a wholly owned subsidiary of the Registrant, effective January 1, 2013, incorporated by reference to Exhibit
10.1 to Registrant’s Form 10-Q for the period ended September 30, 2013, filed with the Securities and
Exchange Commission on October 31, 2013.
10.4*
—
Amendment Four to the December 31, 2008 restated Savings Equalization Plan of Newmont USA Limited,
a wholly owned subsidiary of the Registrant, effective September 1, 2013, incorporated by reference to
Exhibit 10.2 to Registrant’s Form 10-Q for the period ended September 30, 2013, filed with the Securities
and Exchange Commission on October 31, 2013.
10.5*
—
Amendment Five to the December 31, 2008 restated Savings Equalization Plan of Newmont USA Limited,
a wholly owned subsidiary of the Registrant, effective January 1, 2016, incorporated by reference to Exhibit
10.5 to Registrant’s Form 10-K for the period ended December 31, 2016, filed with the Securities and
Exchange Commission on February 21, 2017.
10.6*
—
Pension Equalization Plan, amended and restated, of Newmont USA Limited, a wholly owned subsidiary of
the Registrant, effective December 31, 2008. Incorporated by reference to Exhibit 10.2 to Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange
Commission on February 19, 2009.
10.7*
—
Amendment One to the December 31, 2008 restated Pension Equalization Plan of Newmont USA Limited, a
wholly owned subsidiary of the Registrant, effective January 1, 2014, Incorporated by reference to Exhibit
10.1 to Registrant’s Form 10-Q for the period ended June 30, 2014 filed, with the Securities and Exchange
Commission on July 30, 2014.
171
10.8*
—
Amendment Two to the December 31, 2008 restated Pension Equalization Plan of Newmont USA Limited,
a wholly owned subsidiary of the Registrant, effective January 1, 2016, incorporated by reference to Exhibit
10.8 to Registrant’s Form 10-K for the period ended December 31, 2016, filed with the Securities and
Exchange Commission on February 21, 2017.
10.9*
—
2005 Stock Incentive Plan, amended and restated effective October 26, 2005. Incorporated by reference to
Exhibit 10.1 of Registrant’s Form 8-K filed with the Securities and Exchange Commission on October 31,
2005.
10.10*
—
2013 Stock Incentive Plan. Incorporated by reference to Appendix A of the Registrant’s Schedule 14A filed
with the Securities and Exchange Commission on March 7, 2013.
10.11*
—
Form of Award Agreement used for Executive Officers to grant stock options pursuant to Registrant’s 2005
Stock Incentive Plan. Incorporated by reference to Exhibit 10.2 of Registrant’s Form 8-K filed with the
Securities and Exchange Commission on October 31, 2005.
10.12*
—
Form of Award Agreement used for non-employee Directors to grant director stock units pursuant to the
2005 Stock Incentive Plan. Incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed with
the Securities and Exchange Commission on June 17, 2005.
10.13*
—
Form of Award Agreement used for non-employee Directors to grant director stock units pursuant to
Registrant’s 2013 Stock Incentive Plan. Incorporated by reference to Exhibit 10.8 to Registrant’s Quarterly
Report on Form 10-Q for the period ended June 30, 2013, filed with the Securities and Exchange
Commission on July 26, 2013.
10.14*
—
2014 Form of Award Agreement used for Executive Officers to grant restricted stock units, pursuant to
Registrant’s 2013 Stock Incentive Plan. Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q
for the period ended March 31, 2014, filed with the Securities and Exchange Commission on April 25, 2014.
10.15*
—
2014 Form of Award Agreement used for Executive Officers to grant restricted stock units, pursuant to
Registrant’s 2013 Stock Incentive Plan. Incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q
for the period ended March 31, 2014, filed with the Securities and Exchange Commission on April 25, 2014.
10.16*
—
2016 Form of Award Agreement used for Executive Officers to grant restricted stock units, pursuant to
Registrant’s 2013 Stock Incentive Plan. Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q
for the period ended March 31, 2016, filed with the Securities and Exchange Commission on April 20, 2016.
10.17*
—
2016 Restricted Stock Unit Agreement for supplemental restricted stock unit award to E. Randall Engel,
dated February 22, 2016. Incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q for the period
ended March 31, 2016, filed with the Securities and Exchange Commission on April 20, 2016.
10.18*
—
2016 Restricted Stock Unit Agreement for supplemental restricted stock unit award to Stephen P.
Gottesfeld, dated February 22, 2016. Incorporated by reference to Exhibit 10.3 to Registrant’s Form 10-Q
for the period ended March 31, 2016, filed with the Securities and Exchange Commission on April 20, 2016.
10.19*
—
2017 Form of Award Agreement used for Executive Officers to grant restricted stock units, pursuant to
Registrant’s 2013 Stock Incentive Plan, incorporated by reference to Exhibit 10.6 to Registrant’s Form 10-Q
for the period ended June 30, 2017, filed with the Securities and Exchange Commission on July 25, 2017.
10.20*
—
2017 Form of Award Agreement used for Executive Officers to grant performance leveraged stock units,
pursuant to Registrant’s 2013 Stock Incentive Plan, incorporated by reference to Exhibit 10.7 to Registrant’s
Form 10-Q for the period ended June 30, 2017, filed with the Securities and Exchange Commission on July
25, 2017.
172
10.21*
—
Strategic Stock Unit Bonus Program for Grades E-5 to E-6 of Registrant, effective January 1, 2014.
Incorporated by reference to Exhibit 10.3 to Registrant’s Form 10-Q for the period ended March 31, 2014,
filed with the Securities and Exchange Commission on April 25, 2014.
10.22*
—
Senior Executive Compensation Program of Registrant, as amended and restated effective January 1, 2014.
Incorporated by reference to Exhibit 10.5 to Registrant’s Form 10-Q for the period ended March 31, 2014,
filed with the Securities and Exchange Commission on April 25, 2014.
10.23*
—
Section 16 Officer and Senior Executive Annual Incentive Compensation Program of Registrant, effective
January 1, 2015. Incorporated by reference to Exhibit 10.6 to Registrant’s Form 10-Q for the period ended
March 31, 2015, filed with the Securities and Exchange Commission on April 24, 2015.
10.24*
—
Senior Executive Compensation Program of Registrant, effective January 1, 2015. Incorporated by reference
to Exhibit 10.7 to Registrant’s Form 10-Q for the period ended March 31, 2015, filed with the Securities and
Exchange Commission on April 24, 2015.
10.25*
—
Senior Executive Compensation Program of Registrant, as amended and restated effective January 1, 2016.
Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q for the period ended June 30, 2016,
filed with the Securities and Exchange Commission on July 20, 2016.
10.26*
—
Section 16 Officer and Senior Executive Annual Incentive Compensation Program, amended and restated
effective January 1, 2016. Incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q for the
period ended June 30, 2016, filed with the Securities and Exchange Commission on July 20, 2016.
10.27*
—
Senior Executive Compensation Program of Registrant, effective January 1, 2017, incorporated by reference
to Exhibit 10.3 to Registrant’s Form 10-Q for the period ended June 30, 2017, filed with the Securities and
Exchange Commission on July 25, 2017.
10.28*
—
Section 16 Officer and Senior Executive Annual Incentive Compensation Program, effective January 1,
2017, filed herewith.
10.29*
—
Equity Bonus Program for Grades E-5 to E-6, effective January 1, 2017, incorporated by reference to
Exhibit 10.5 to Registrant’s Form 10-Q for the period ended June 30, 2017, filed with the Securities and
Exchange Commission on July 25, 2017.
10.30*
—
Officers’ Death Benefit Plan as Amended and Restated effective January 1, 2013, of Newmont USA
Limited, a wholly owned subsidiary of Registrant. Incorporated by reference to Exhibit 10.21 to Registrant’s
Form 10-K for the period ended December 31, 2015, filed with the Securities and Exchange Commission on
February 17, 2016.
10.31*
—
Amendment One to the Officer’s Death Benefit Plan as Amended and Restated effective January 1, 2013, of
Newmont USA Limited, a wholly owned subsidiary of Registrant, incorporated by reference to Exhibit
10.29 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the
Securities and Exchange Commission on February 21, 2017.
10.32*
Amendment Two to the Officer’s Death Benefit Plan as Amended and Restated effective January 1, 2013,
of Newmont USA Limited, a wholly owned subsidiary of Registrant, filed herewith.
10.33*
—
Executive Change of Control Plan, amended and restated effective December 31, 2008, of Newmont USA
Limited, a wholly owned subsidiary of Registrant. Incorporated by reference to Exhibit 10.20 to Registrant’s
Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange
Commission on February 19, 2009.
173
10.34*
—
Amendment One to the December 31, 2008 Executive Change of Control Plan of Newmont, amended and
restated by Newmont USA Limited, a wholly owned subsidiary of Registrant, effective January 1, 2012, and
Amendment Two to the December 31, 2008 Executive Change of Control Plan of Newmont, amended and
restated by Newmont USA Limited, a wholly owned subsidiary of Registrant, effective January 1, 2012.
Incorporated by reference to Exhibit 10.58 to Registrant’s Annual Report on Form 10-K for the year ended
December 31, 2011, filed with the Securities and Exchange Commission on February 24, 2012.
10.35*
—
Amendment Three to the December 31, 2008 Executive Change of Control Plan of Newmont, amended and
restated by Newmont USA Limited, a wholly owned subsidiary of Registrant, effective January 1, 2012,
filed herewith.
10.36*
—
Form of Waiver and Release Agreement to the December 31, 2008 Executive Change of Control Plan of
Newmont USA Limited, a wholly owned subsidiary of Registrant, effective December 31, 2017, filed
herewith.
10.37*
—
2012 Executive Change of Control Plan, effective January 1, 2012, of Newmont USA Limited, a wholly
owned subsidiary of Registrant. Incorporated by reference to Exhibit 10.57 to Registrant’s Annual Report
on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission
on February 24, 2012.
10.38*
—
2014 Executive Severance Plan of Newmont, amended and restated effective January 1, 2014. Incorporated
by reference to Exhibit 10.68 to Registrant’s Form 10-K for the year ended December 31, 2014, filed with
the Securities and Exchange Commission on February 20, 2015.
10.39*
—
Amendment One to the Executive Severance Plan of Newmont, amended and restated effective January 1,
2014. Incorporated by reference to Exhibit 10.69 to Registrant’s Form 10-K for the year ended December
31, 2014, filed with the Securities and Exchange Commission on February 20, 2015.
10.40*
—
Amendment Two to the Executive Severance Plan of Newmont. Incorporated by reference to Exhibit 10.1 to
Registrant’s Form 10-Q for the period ended September 30, 2015, filed with the Securities and Exchange
Commission on October 29, 2015.
10.41*
—
Amendment Three to the Executive Severance Plan of Newmont, incorporated by reference to Exhibit
10.36 to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the
Securities and Exchange Commission on February 21, 2017.
10.42
—
Amendment and Restatement Agreement, dated as of May 25, 2017, restating the Credit Agreement, dated
as of May 20, 2011 (as amended by the First Amendment dated as of May 15, 2012, the Second
Amendment dated as of March 31, 2014 and the Third Amendment dated as of March 3, 2015), by and
among Newmont Mining Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent, incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed with the
Securities and Exchange Commission on May 26, 2017.
10.43
—
Reaffirmation Agreement, dated May 25, 2017, by Newmont USA Limited and JPMorgan Chase Bank,
N.A., as Administrative Agent, incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed
with the Securities and Exchange Commission on May 26, 2017.
10.44
—
Mineral Agreement dated and effective as of November 22, 2013, between the Republic of Suriname and
Suriname Gold Company, LLC., a wholly owned subsidiary of the Registrant, as clarified by bulletin and
letters dated September 10, 2013 and November 21, 2013, respectively. Incorporated by reference to Exhibit
10.2 to Registrant’s Form 10-Q for the period ended June 30, 2014 filed with the Securities and Exchange
Commission on July 30, 2014.
174
10.45
—
2015 Investment Agreement between the Republic of Ghana and Newmont Ghana Gold Limited.
Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed with the Securities and Exchange
Commission on December 22, 2015.
10.46
—
2015 Investment Agreement between the Republic of Ghana and Newmont Golden Ridge Limited.
Incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed with the Securities and Exchange
Commission on December 22, 2015.
12.1
—
Statement re Computation of Ratio of Earnings to Fixed Charges, filed herewith.
21
—
Subsidiaries of Newmont Mining Corporation, filed herewith.
23.1
—
Consent of Ernst & Young LLP, filed herewith.
24
—
Power of Attorney, filed herewith.
31.1
—
Certification Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by the Principal Executive Officer, filed
herewith.
31.2
—
Certification Pursuant to Rule 13A-14 or 15D-14 of the Securities Exchange Act of 1934, as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by the Principal Financial Officer, filed
herewith.
32.1
32.2
95
101
—
—
—
—
Statement Required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 signed by Principal Executive Officer, furnished herewith.
Statement Required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 signed by Principal Financial Officer, furnished herewith.
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the
Dodd-Frank Wall Street Reform and Consumer Protection Act, filed herewith.
101.INS XBRL Instance
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation
101.LAB XBRL Taxonomy Extension Labels
101.PRE XBRL Taxonomy Extension Presentation
101.DEF XBRL Taxonomy Extension Definition
*
(1)
These exhibits relate to executive compensation plans and arrangements.
In reliance upon Item 601(b)(4)(iii) of Regulation S-K, various instruments defining the rights of holders of non-current debt of
Newmont Mining Corporation are not being filed herewith because the total of securities authorized under each such instrument
does not exceed 10% of the total assets of Newmont Mining Corporation. Registrant hereby agrees to furnish a copy of any such
instrument to the Commission upon request.
175
(This page has been left blank intentionally.)
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
NEWMONT MINING CORPORATION
By:
/s/ STEPHEN P. GOTTESFELD
Stephen P. Gottesfeld
Executive Vice President and General Counsel
February 22, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on February 22, 2018.
Signature
*
Gary J. Goldberg
*
Nancy K. Buese
*
John W. Kitlen
Title
Chief Executive Officer and Director
(Principal Executive Officer)
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer)
Gregory H. Boyce*
Bruce R. Brook*
J. Kofi Bucknor*
Vincent A. Calarco*
Joseph A. Carrabba*
Noreen Doyle*
Veronica M. Hagen*
Sheri E. Hickok*
Jane Nelson*
Julio M. Quintana*
Molly P. Zhang*
*By:
/s/ STEPHEN P. GOTTESFELD
Stephen P. Gottesfeld
Attorney-in-Fact
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
Director
S-1
(This page has been left blank intentionally.)
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
Deferred Income Tax Valuation Allowance
Balance at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions to deferred income tax expense . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction of deferred income tax expense . . . . . . . . . . . . . . . . . . . . . . . . .
Reduction due to Tax Cuts and Jobs Act . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,844 $
574
(443)
(1,180)
$ 2,795 $
2,735 $ 2,565
530
1,612
(360)
(503)
—
—
3,844 $ 2,735
Years Ended December 31,
2015
2016
2017
(in millions)
Refer to Note 10 of the Consolidated Financial Statements for additional information.
SCH-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of Newmont Mining Corporation
Opinion on the Financial Statement Schedule
We have audited the consolidated financial statements of Newmont Mining Corporation (the Company) as of December 31,
2017 and 2016, and for each of the three years in the period ended December 31, 2017, and have issued our report thereon dated
February 22, 2018 (included elsewhere in this Form 10-K). Our audits also included the financial statement schedule listed in Item
15(a)(2) of this Form 10-K. In our opinion, the financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly, in all material respects the information set forth therein.
Basis for Opinion
This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this schedule
based on our audits. We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
Denver, Colorado
February 22, 2018
SCH-2
(This page has been left blank intentionally.)
Board of Directors
Gregory H. Boyce
Retired Executive Chairman and
Chief Executive Officer of Peabody
Energy Corporation
Joseph A. Carrabba
Retired Chairman, President and
Chief Executive Officer of Cliffs
Natural Resources Inc.
Sheri E. Hickok
General Manager, Global Product
Development, Onshore Wind of GE
Renewable Energy
Bruce R. Brook
Former Chairman of Programmed
Group; retired Chief Financial Officer
of WMC Resources Limited
J. Kofi Bucknor
Chief Executive Officer of J. Kofi
Bucknor & Associates
Vincent A. Calarco
Retired Chairman, President and
Chief Executive Officer of
Crompton Corporation
Noreen Doyle
Non-Executive Chair of Newmont
Mining Corporation; retired First Vice
President of the European Bank for
Reconstruction and Development
Gary J. Goldberg
President and Chief Executive Officer
of Newmont Mining Corporation
Jane Nelson
Founding Director of the Harvard
Kennedy School’s Corporate
Responsibility Initiative
Julio M. Quintana
Retired Director, President and
Chief Executive Officer of
Tesco Corporation
Veronica M. Hagen
Retired Chief Executive Officer of
Polymer Group, Inc.
Molly P. Zhang
Retired Vice President, Asset
Management of Orica Limited
Executive Leadership Team
Gary J. Goldberg
President and Chief Executive Officer
Nancy K. Buese
Executive Vice President and Chief
Financial Officer
Elaine Dorward-King
Executive Vice President,
Sustainability and External Relations
Randy Engel
Executive Vice President,
Strategic Development
Scott P. Lawson
Executive Vice President and
Chief Technology Officer
Stephen P. Gottesfeld
Executive Vice President and
General Counsel
William N. MacGowan
Executive Vice President,
Human Resources
Susan Keefe
Vice President, Strategic Relations
Thomas R. Palmer
Executive Vice President and
Chief Operating Officer
Senior Officers
Alexander N. Bates
Senior Vice President, Australia
Joshua P. Hallenbeck
Vice President, Finance and Treasurer
Ramzi R. Fawaz
Senior Vice President, Projects
Dean R. Gehring
Senior Vice President, South America
Alwyn Pretorius
Senior Vice President, Africa
Grigore Simon
Senior Vice President, Exploration
Andrew Woodley
Senior Vice President, North America
Jennifer Cmil
Vice President, Talent Management
Nick Cotts
Vice President, External Relations and
Social Responsibility
Mary Beth Donnelly
Vice President, North American
Government Relations
Marcelo Godoy
Vice President, Resource Evaluation
and Mine Planning
Logan Hennessey
Vice President, Associate General
Counsel and Corporate Secretary
Rich Herold
Vice President,
Global Government Relations
Andy Holleman
Associate General Counsel and
Chief Compliance Officer
David McLaren
Vice President, Investment and
Value Management
Ramsey Musa
Vice President, Supply Chain
Suresh Rajapakse
Vice President,
Health, Safety and Security
Blake Rhodes
Vice President, Corporate
Development
Shelly Huff
Vice President, Tax
Phillip Starkle
Vice President, Operations Finance
John W. Kitlen
Vice President, Controller and
Chief Accounting Officer
Javier Velarde
Vice President, General Manager
(Peru) and Corporate Affairs
David Kristoff
Vice President, Total Rewards and
Human Resources Systems
Jessica Largent
Vice President, Investor Relations
Alison White
Vice President, Internal Audit
Mike Wundenberg
Vice President, Operational
Technology and Innovation
Nancy Lipson
Vice President and
Deputy General Counsel
Jim Zetwick
Vice President and
Chief Information Officer
The above slates are as of February 2018.
Shareholder
Information
Investor Relations
Corporate Headquarters
6363 South Fiddler’s Green Circle
Greenwood Village, Colorado 80111 USA
303.863.7414
www.newmont.com
Share Information
High
Annual Meeting
The 2018 Annual Meeting of Stockholders of Newmont
Mining Corporation will be held at 9:00 a.m. MDT on
Wednesday, April 25, 2018, at the Hilton Inverness Hotel,
200 Inverness Drive West, Englewood, Colorado 80112 USA.
Transfer Agent
Questions about shareholder accounts, dividend payments,
change of addresses, lost certificates, direct registration
system (DRS), stock transfers and related matters should
be directed to the transfer agent, registrar and dividend
disbursement agent listed below:
For Holders of Newmont Common Stock (NYSE: NEM)
Shareholder correspondence should be mailed to:
Computershare
P.O. Box 505000
Louisville, Kentucky 40233 USA
Overnight correspondence should be mailed to:
Computershare
462 South 4th Street, Suite 1600
Louisville, Kentucky 40202 USA
Toll-free 888.216.8104
Telephone 201.680.6578
8 a.m. – 8 p.m. ET
Shareholder website
www.computershare.com/investor
Shareholder online inquiries
https://www-us.computershare.com/investor/Contact
Average
daily
Low
volume Dividend
Close (million) per share
2017
$ 37.94 $ 32.40 $ 34.93 6.77 $ 0.050
First Quarter
Second Quarter $ 35.51 $ 32.23 $ 33.68 5.40 $ 0.050
$ 39.60 $ 31.89 $ 36.32 4.99 $ 0.075
Third Quarter
$ 0.075
$ 38.59 $ 34.59 $ 36.77 4.36
Fourth Quarter
2016
First Quarter
Second Quarter $ 39.12 $ 26.30 $ 39.12
$ 45.86 $ 38.15 $ 39.29
Third Quarter
$ 38.10 $ 30.91 $ 34.07
Fourth Quarter
$ 27.79 $ 16.31 $ 26.58 10.66 $ 0.025
8.74 $ 0.025
7.06 $ 0.025
8.06 $ 0.050
Newmont declared and paid quarterly dividends per share
in 2017 on its Common Stock as shown in the table above.
The Company currently intends to pay dividends on a
quarterly basis in 2018 in such amount as determined by
the Board of Directors.
Comparison Of 5 Year Cumulative Total Return*
Among Newmont, S&P 500 Index, Philadelphia Gold &
Silver Index (XAUSM), Peer Group** and Gold Price***
$200
$150
$100
$50
$0
12/12
12/13
12/14
12/15
12/16
12/17
NEM
S&P 500
XAU
Peer Group Gold price
*$100 invested on 12/31/12 in stock or index, including
reinvestment of dividends. Fiscal year ending December 31.
**Includes AEM, AULGF, ABX, BVN, FCX, GFIOF, GG, HMY,
KGC, NCM and AUY.
***LBMA gold price has been included for reference as
Newmont is primarily a gold producer and share price
performance is highly correlated to gold price.
12/12
12/13
12/14
12/15 12/16
12/17
$ 100 $ 51 $ 43 $ 41 $ 78 $ 86
Newmont
$ 100 $ 132 $ 151 $ 153 $ 171 $ 208
S&P 500
XAU
$ 100 $ 58 $ 46 $ 29 $ 48 $ 54
Peer Group $ 100 $ 59 $ 43 $ 26 $ 44 $ 50
Gold Price $ 100 $ 73 $ 73 $ 64 $ 69 $ 78
3/2/18 2:43 PM
Newmont Mining Corporation
6363 South Fiddler’s Green Circle
Greenwood Village, Colorado 80111 USA
303.863.7414
www.newmont.com
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