- 2014 Performance
- Future Focus
Newmont is committed to building a sustainable, competitive business that benefits our stakeholders.
Guiding our approach to creating value for our stakeholders is our business strategy, which is to achieve first quartile shareholder returns by:
- Securing the gold franchise – by running our existing business more efficiently and effectively
- Strengthening the portfolio – by building a longer-life, lower-cost asset portfolio
- Enabling the strategy – through capabilities and systems that create competitive advantage
The success of our strategy depends on our ability to deliver on our commitments. Despite continued metal price volatility and an export ban on copper concentrates in Indonesia that shut down production for three months, we made significant changes to create a more focused and profitable business.
We ended the year meeting or exceeding the targets we set to measure our performance across our five strategic pillars:
- Health and safety – achieved the lowest injury rates in Newmont history for the second year in a row and led industry efforts to prevent the spread of the world’s worst Ebola outbreak
- Operational excellence – delivered steady gold production and achieved notable cost, efficiency and technical foundation improvements including a step-change in performance at Tanami; realignment of mining and milling rates at Ahafo; and a solid first-year performance at Akyem
- Growth – divested nearly $1.4 billion in non-core assets since 2012 and, when combined with cost reductions, provided the means to advance projects such as the Turf Vent Shaft in Nevada and Merian, a new gold mine in the highly prospective Guiana Shield gold district in Suriname
- People – advanced a fit-for-purpose corporate headquarters and refreshed our Code of Conduct, policies, vision and values
- Sustainability and external relations – implemented new country risk and water management practices to improve Newmont’s social and environmental performance
|(as of December 31, 2014)||2011||2012||2013||2014|
|Attributable gold production (Koz)||5,166||4,977||5,065||4,845|
|Attributable copper production (Mlbs)||223||173||179||191|
|Average realized gold price ($/ounce)||$1,562||$1,662||$1,393||$1,258|
|Average realized copper price ($/lb)||$3.54||$3.43||$2.98||$2.65|
|Sales (in millions)||$10,441||$9,964||$8,414||$7,292|
|Dividends paid per share||$1.00||$1.40||$1.225||$0.225|
Note: In 2014, we filed a Form 8-K regarding a change to our reportable segments. Revisions to address this change were incorporated for all periods dating back to 2011.
Other significant developments in 2014 include:
- Provided update to the public regarding the new regulations in Indonesia regarding the export of copper concentrate that took effect on January 12, 2014
- Completed the sale of the Midas underground operation in Nevada to Klondex Mines Ltd. for total consideration in excess of $83 million
- Closed five-year, amortizing term loan of $575 million and renewed $3.0 billion corporate revolving credit facility
- Suffered the tragic loss of Simon Donkor as a result of an accident at the Akyem mine in Ghana
- Divested 5.4 percent equity interest in Paladin Energy for cash proceeds of $24 million
- Suffered the tragic loss of George Ayamah, a contracted security guard at the Ahafo mine in Ghana
- Approved a new Code of Conduct and the policies that support the standards all Newmont representatives agree to uphold
- Published Newmont’s 2013 sustainability report
- Published first Conflict-Free Gold Report as part of the Company’s commitment to responsible and ethical business practices
- Announced agreement to sell the Jundee underground mine in Australia
- Suspended operations and invoked the force majeure clause of the Contract of Work (CoW) at the Batu Hijau mine in Indonesia due to the government’s restrictions on the export of copper concentrate
- Completed the sale of the Jundee underground operation in Australia to Northern Star Resources Limited for total proceeds of approximately $91 million
- Launched the Corporate Full Potential program to deliver cost and efficiency improvements and a fit-for-purpose corporate headquarters
- Announced decision to develop new Merian gold mine in Suriname marking an important milestone in the Company’s portfolio optimization process
- Announced decision to develop Correnso underground mine in New Zealand to further extend the life of the Waihi operation
- Secured Right of Exploitation from the government of Suriname, the final milestone to commence construction of the Merian project
- Announced agreement to sell stake in Penmont joint venture in Mexico
- Recognized in the Dow Jones Sustainability World Index for the eighth consecutive year
- Secured export permit from the government of Indonesia and safely resumed operations at Batu Hijau
- Completed sale of interest in Penmont joint venture for $450 million
- Announced decision by the government of Suriname to exercise its option to participate in a fully funded 25 percent equity ownership stake in the Merian project
- Employees, community members, government officials and other leaders celebrated the ground breaking of the Merian project in Suriname
- Excavation of the Turf Vent Shaft reached its full depth of 2,050 feet with the project on track to achieve commercial production in late 2015
In 2015, we will continue to execute our strategy, which is to improve our underlying business, strengthen our portfolio, and develop the people, systems and capabilities we need to become the world’s leading gold business.
Our focus is on continuing to reduce our injury rates and sharpening our focus on health.
Cost and efficiency improvements are expected to more than offset inflation. We expect to increase attributable gold production with increased production in Suriname and Nevada and improvements in Australia are expected to offset declining production in Peru. We will fund and progress our best projects and exploration prospects while maintaining positive free cash flow.
Finally, we will build on our strong technical fundamentals and investments in systems, strengthen our financial flexibility and effectively engage with shareholders, employees and other stakeholders.