Newmont Provides Updated 2019 and Longer-term Outlook

December 6, 2018 ALE

DENVER–(BUSINESS WIRE)–Newmont Mining Corporation (NYSE: NEM) (Newmont or the Company)
announced its 2019 outlook¹ with attributable gold production
guidance of 5.2 million ounces at AISC² of $935 per ounce.

Highlights

Gold costs applicable to sales (CAS): CAS guidance is $710 per
ounce for 2019 and $750 per ounce for 2020; CAS is expected to be
between $690 and $740 per ounce longer-term through 2023.
Gold all-in sustaining costs (AISC): AISC guidance is $935 per
ounce for 2019 and $975 per ounce for 2020; AISC is expected to be
between $875 and $975 longer-term through 2023.
Attributable gold production³: Production
guidance is 5.2 million ounces for 2019 and 4.9 million ounces in
2020; longer-term production is expected to remain stable at between
4.4 and 4.9 million ounces per year through 2023.
Capital: Total consolidated capital guidance for 2019 is $1,070
million and $730 million in 2020; capital is expected to be between
$500 and $600 million longer-term through 2023. Development capital
includes the Ahafo Mill Expansion in Africa, Tanami Power⁴
in Australia and Quecher Main in South America as well as expenditures
to advance studies for future projects. Sustaining capital guidance is
$680 million for 2019 and $660 million for 2020; longer-term
sustaining capital is expected to be between $450 and $550 million
through 2023.

“Our proven strategy will deliver stable gold production at competitive
costs over at least the next five years as we continue to deliver
value-accretive projects across our four regions,” said Gary J.
Goldberg, Chief Executive Officer. “Our investment grade balance sheet
and ample liquidity means we are well positioned to invest in profitable
growth and simultaneously return cash to shareholders through our
industry leading dividend⁵. Newmont remains focused on
leading the gold sector in profitability and responsibility through the
next generation of mines, technology and leaders.”

__________________________
¹		^{Outlook guidance used in this release are considered “forward-looking statements” and users are cautioned that actual results may vary; refer to the cautionary statement at the end of this release.}
²		^{AISC as used in the Company’s outlook is a non-GAAP metric – see below for further information and reconciliation to CAS outlook. 2019 AISC outlook presented has been revised to reflect a differentiation of exploration and advanced project expenses as sustaining versus non-sustaining.}
³		^{Production outlook does not include equity production from stakes in TMAC (28.68%) or La Zanja (46.94%).}
⁴		^{Includes $225-$275M for capital leases related to the Tanami Power Project paid over a 10 year term beginning in 2019.}
⁵		^{2019 dividends have not yet been declared by the Board of Directors and remain subject to approval: refer to cautionary statement at the end of this release.}

Outlook

Newmont’s outlook reflects steady gold production and ongoing investment
in its operating assets and most promising growth prospects. Newmont
does not include development projects that have not yet been funded or
reached execution stage in its outlook which represents upside to
guidance.

Attributable gold production is expected to be 5.2 million ounces
in 2019, primarily driven by a full year of higher grade production from
the recently completed Subika Underground project in Africa. Production
is expected to be 4.9 million ounces in 2020 and longer-term production
is expected to remain stable at between 4.4 and 4.9 million ounces per
year through 2023 excluding development projects which have yet to be
approved.

North America production is expected to be 1.9 million ounces in 2019
as higher grade production from Northwest Exodus and Twin Underground
are offset by the depletion of Silverstar ore at Carlin and lower gold
production at Phoenix as mining shifts to higher copper grade ore from
the Bonanza pit. Production remains at 1.9 million ounces in 2020 and
2021 as higher grades at Long Canyon following the stripping campaign
help offset lower grades at Cripple Creek & Victor (CC&V). North
American production may be impacted by the Gold Quarry wall slip and
mine plan optimization work is ongoing. The Company continues to
pursue profitable growth opportunities at Carlin, Long Canyon, CC&V
and Galore Creek.
South America production is expected to be 650,000 ounces in 2019 as
productivity improvements at Merian offset the transition to harder
ore. Production is expected to decrease to 560,000 ounces in 2020 and
450,000 ounces in 2021 as the Tapado Oeste pit and Yanacocha laybacks
are mined out and Merian transitions from saprolite to hard rock. The
Company continues to advance near-mine growth opportunities at Merian
and both oxide and sulfide potential at Yanacocha.
Australia production is expected to be 1.5 million ounces in 2019 with
higher grades and throughput and productivity gains at Tanami, offset
by lower mining rates at KCGM following the wall slips and the
continuation of stripping at Boddington. Production is expected to be
1.5 million ounces in 2020 and 1.6 million ounces in 2021 as
Boddington accesses higher grade ore. KCGM’s near-term production has
been lowered due to the wall slips, but optimization work continues to
recover the impacted ounces as part of the broader Golden Mile Growth
Study. The Company continues to advance studies for a second expansion
at Tanami and expects to reach a full-funds decision in the second
half of 2019.
Africa production is expected to be 1.1 million ounces in 2019 with a
full year of production from Subika Underground, higher grades from
the Subika open pit and improved mill throughput in the second half of
the year with the mill expansion. Production is expected to be 930,000
ounces in 2020 with lower grades at Akyem and Subika open pit which
are partially offset by higher underground grades at Ahafo and a full
year of production from the Ahafo Mill Expansion. In 2021, production
is expected to be 1 million ounces as Akyem reaches higher grades near
the bottom of the pit. The company continues to advance the Ahafo
North project and other prospective surface and underground
opportunities.

Gold cost outlook – CAS is expected to be $710 per ounce
for 2019 following higher production at Ahafo, lower mining costs at
Yanacocha and lower operational costs at Tanami with the completion of
the Tanami Power Project. The Company continues to implement Full
Potential cost and efficiency improvements and advance technology
initiatives to offset inflation and input cost pressures. CAS is
expected to be $750 per ounce for 2020 and between $690 and $740 per
ounce longer-term through 2023. AISC is expected to be $935 per ounce in
2019 on improved CAS in Africa and South America partially offset by
higher sustaining capital. AISC is expected to be $975 per ounce in 2020
and between $875 and $975 longer-term through 2023. Future Full
Potential savings and profitable ounces from projects that are not yet
approved represent additional upside not currently captured in guidance.

North America CAS is expected to be $785 per ounce in 2019 as lower
leach grades drive inventory cost increases at CC&V which are
partially offset by cost improvements across the other North American
operations. CAS is expected to be $760 per ounce in 2020 and $790 per
ounce in 2021 with higher production at Twin Creeks as the Turquoise
Ridge Joint Venture (TRJV) optimization project ramps up. AISC is
expected to be $975 per ounce in 2019 on improved unit CAS. AISC is
expected to be $925 per ounce in 2020 and 2021. North American CAS and
AISC guidance may be impacted by the Gold Quarry wall slip and mine
plan optimization work is ongoing.
South America CAS is expected to be $640 per ounce in 2019 driven by a
lower stripping ratio at Yanacocha partially offset by higher labor
and mill maintenance costs at Merian. CAS is expected to increase to
$825 per ounce in 2020 with higher inventory costs and strip ratio at
Yanacocha. CAS is expected to be $830 per ounce in 2021 as Merian
fully transitions into harder rock which is partially offset by lower
operating costs at Yanacocha as the oxide mill shuts down. AISC is
expected to be $800 per ounce in 2019 due to lower CAS and sustaining
capital. AISC is expected to be $995 per ounce in 2020 and $1,000 per
ounce in 2021 on higher CAS and increases in sustaining capital.
Australia CAS is expected to be $775 per ounce in 2019 driven by
increased stripping at Boddington and the drawdown of lower grade
stockpiles at KCGM, partially offset by higher production and lower
power costs at Tanami from switching to natural gas. CAS is expected
to be $750 per ounce in 2020 and $645 per ounce in 2021 as Boddington
reaches higher grades. AISC is expected to be $945 per ounce in 2019
on increased CAS. AISC is expected to be $925 per ounce in 2020 and
$800 per ounce in 2021.
Africa CAS is expected to be $570 per ounce in 2019 due to higher
grades from Subika Underground and Subika open pit and the Ahafo Mill
Expansion coming online. CAS is expected to be $660 per ounce in 2020
and $625 per ounce in 2021 with mine sequencing at the Ahafo and Akyem
pits driving production changes. AISC is expected to be $735 per ounce
in 2019 on improved unit CAS, partly offset by higher sustaining
capital for the Ahafo tailing storage facility expansion. AISC is
expected to be $830 per ounce in 2020 and $780 per ounce in 2021.

Copper – Attributable production is expected to be 45,000
tonnes in 2019 and 2020 as Phoenix reaches higher copper in Bonanza ore
which is offset by lower production at Boddington. Copper production
increases to between 45,000 and 65,000 tonnes longer-term through 2023
driven primarily from higher grades at Boddington following completion
of the next stripping campaign. CAS is expected to rise to $2.05 per
pound in 2019 and $2.10 per pound in 2020 due to higher stripping at
Boddington. CAS is expected to improve to $1.55 to $1.75 per pound
longer-term through 2023 as production at Boddington increases
offsetting lower copper grades at Phoenix. AISC is expected to rise to
$2.45 per pound in 2019 on increased CAS. AISC is expected to be $2.55
per pound in 2020 and $1.80 to $2.10 per pound longer-term.

Capital – Total consolidated capital is expected to be $1,070
million for 2019 and $730 million for 2020. Development capital of $390
million in 2019 includes investments in the Tanami Power Project in
Australia, Ahafo Mill Expansion in Africa, Quecher Main in South
America, and the TRJV third shaft in North America and expenditures to
advance studies for future projects. Development capital is expected to
be $70 million in 2020 and approximately $50 million longer-term until
additional projects are approved. Sustaining capital is expected to be
$680 million for 2019, $660 million for 2020 and between $450 and $550
million per year longer-term to cover infrastructure, equipment and
ongoing mine development.

Consolidated expense outlook – Interest expense increases to $215
million for 2019 from leases related to the Tanami Power Project and
lower capitalized interest. Investment in exploration and advanced
projects is expected to be $430 million in 2019 with increased near-mine
and greenfield exploration spend across all regions and higher advanced
project spend in North America. 2019 outlook for general &
administrative costs is stable at $245 million and guidance for
depreciation and amortization is expected to be $1,370 million as Subika
Underground and the Tanami Power Project come into service.

Assumptions and sensitivities – Newmont’s outlook assumes
$1,200 per ounce gold price, $2.50 per pound copper price, $0.75 USD/AUD
exchange rate and $65 per barrel WTI oil price. Assuming a 35% portfolio
tax rate, $100 per ounce increase in gold price would deliver an
expected $335 million improvement in attributable free cash flow.
Similarly, a $10 per barrel reduction in the price of oil and a $0.05
favorable change in the Australian dollar would deliver an expected $25
million and $45 million improvement in attributable free cash flow,
respectively. These estimates exclude current hedge programs; please
refer to Newmont’s Form 10-Q which was filed with the SEC on October 25,
2018 for further information on hedging positions.

Projects update

Ahafo Mill Expansion (Africa) 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 second half of 2019
with commercial production also expected in the second half of 2019.
The expansion is expected to increase average annual gold production
by between 75,000 and 100,000 ounces per year for the first five years
beginning in 2020. Capital costs for the project are estimated between
$140 and $180 million with expenditure of approximately $35 to $45
million in 2019. The project has an IRR of more than 20 percent.

The
Ahafo Mill Expansion, together with the Company’s recently completed
Subika Underground project, will improve Ahafo’s production to between
550,000 and 650,000 ounces per year for the first five full years of
production (2020 to 2024). During this period Ahafo’s CAS is expected
to be between $650 and $750 per ounce and AISC is expected to be
between $800 and $900 per ounce. This represents average production
improvement of between 200,000 and 300,000 ounces at CAS improvement
of between $150 and $250 per ounce and AISC improvement of $250 to
$350 per ounce, compared to 2016 actuals.

Quecher Main (South America) will add
oxide production at Yanacocha, leverage existing infrastructure and
enable potential future growth at Yanacocha. First production is
expected in late 2018 with commercial production expected in the
second half of 2019. Quecher Main extends the life of the Yanacocha
operation to 2027 with average annual gold production of approximately
200,000 ounces per year between 2020 and 2025 (100 percent basis).
During the same period, incremental CAS is expected to be between $750
and $850 per ounce and AISC between $900 and $1,000 per ounce. Capital
costs for the project are expected to be between $250 and $300 million
with expenditure of $95 to $105 million in 2019. The project IRR is
expected to be greater than 10 percent.
Tanami Power (Australia) will lower
Tanami power costs by approximately 20 percent beginning in the first
quarter of 2019, mitigate fuel supply risk and reduce carbon emissions
by 20 percent. The project includes a 450 kilometer natural gas
pipeline that is under construction to connect 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 10 year term with options to extend. The project
is expected to result in net cash savings of approximately $34 per
ounce beginning in 2019. Capital costs are estimated between $225 and
$275 million with annual cash lease payments over a 10 year term
beginning in 2019. The project IRR is expected to be greater than 50
percent at $0.75 AUD.

2019 Outlook^a

2019 Outlook+/- 5%	Consolidated Production	Attributable Production	Consolidated CAS	Consolidated All-in Sustaining Costs^b	Consolidated Sustaining Capital Expenditures	Consolidated Development Capital Expenditures
	(Koz, Kt)	(Koz, Kt)	($/oz, $/lb)	($/oz, $/lb)	($M)	($M)
North America	1,935	1,935	785	975	280	15
South America	1,030	650	640	800	75	175
Australia	1,470	1,470	775	945	205	70	^f
Africa	1,140	1,140	570	735	115	130
Total Gold^h	5,600	5,200	710	935	680	390

Total Copper	45	45	2.05	2.45

2019 Consolidated Expense Outlookⁱ($M) +/-5%
General & Administrative					245
Interest Expense					215
Depreciation and Amortization					1,370
Advanced Projects & Exploration					430
Adjusted Tax Expense^j					210

2019 Site Outlook^a as of December 6, 2018

	Consolidated Production	Attributable Production	Consolidated CAS	Consolidated All-in Sustaining Costs^b	Consolidated Sustaining Capital Expenditures	Consolidated Development Capital Expenditures
	(Koz, Kt)	(Koz, Kt)	($/oz, $/lb)	($/oz, $/lb)	($M)	($M)
Carlin	895	895	850	1,050	150
Phoenix^c	190	190	795	945	20
Twin Creeks^d	325	325	670	850	40	15
CC&V	360	360	880	1,030	35
Long Canyon	165	165	430	505	10
Other North America					25

Yanacocha^e	510	265	720	900	25	175
Merian^e	520	390	565	685	50
Other South America

Boddington	680	680	960	1,090	75
Tanami	495	495	495	690	80	70	^f
Kalgoorlie^g	290	290	810	940	35
Other Australia					15

Ahafo	720	720	560	720	85	60
Akyem	420	420	580	730	25
Ahafo North						70
Other Africa

Corporate/Other					10

Phoenix – Copper	20	20	1.80	2.15
Boddington – Copper	25	25	2.25	2.65

^a		2019 Outlook in the above table are considered “forward-looking statements” and are based upon certain assumptions. For example, 2019 Outlook assumes $1,200/oz Au, $2.50/lb Cu, $0.75 USD/AUD exchange rate and $65/barrel WTI; AISC and CAS estimates do not include inflation, for the remainder of the year. Production, CAS, AISC and capital estimates exclude projects that have not yet been approved. The potential impact on inventory valuation as a result of lower prices, input costs, and project decisions are not included as part of this Outlook. Such assumptions may prove to be incorrect and actual results may differ from those anticipated, including variation beyond a +/- 5% range. Amounts may not recalculate to totals due to rounding. See cautionary note at the end of this release.
^b		All-in sustaining costs or AISC as used in the Company’s Outlook is a non-GAAP metric; see below for further information and reconciliation to consolidated 2019 CAS outlook.
^c		Includes Lone Tree operations.
^d		Includes TRJV operations shown on a pro-rata basis with a 25% ownership interest.
^e		Consolidated production for Yanacocha and Merian is presented on a total production basis for the mine site; attributable production represents a 51.35% interest for Yanacocha and a 75% interest for Merian.
^f		Includes $225-$275M for capital leases related to the Tanami Power Project paid over a 10 year term beginning in 2019.
^g		Both consolidated and attributable production are shown on a pro-rata basis with a 50% ownership for Kalgoorlie.
^h		Production outlook does not include equity production from stakes in TMAC (28.68%) or La Zanja (46.94%) as of September 30, 2018.
ⁱ		Consolidated expense outlook is adjusted to exclude extraordinary items, such as certain tax valuation allowance adjustments.
^j		Consists of $75 of mining taxes and $135 of income taxes and is based on a $1,200/oz. gold price and $2.50/lb. copper price. Income taxes and mining taxes are particularly sensitive to pricing and actual expense will vary if realized prices differ significantly from these amounts.

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.

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.

All-In Sustaining Costs

Newmont has developed 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 provides investors 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 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 Company recently revised its calculation of AISC to exclude
development expenditures related to developing new or major projects at
existing operations where these projects will materially benefit the
operation included in Advanced projects, research and
development and Exploration amounts presented in
the Consolidated Statements of Operations.

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 3 to the Consolidated Financial Statements.

Contacts

Newmont Mining Corporation
Investor
Contact
Jessica Largent, 303-837-5484
jessica.largent@newmont.com

Media
Contact
Omar Jabara, 303-837-5114
omar.jabara@newmont.com

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