Newmont Benefits from Lower Costs; Generates Net Cash From Continuing Operations of $503 Million; Boddington Start-Up Underway
This release should be read in conjunction with Newmont’s Second Quarter 2009 Form 10-Q filed with the Securities and Exchange Commission on July 23, 2009 (available at www.newmont.com).
DENVER, July 23, 2009 – Newmont Mining Corporation (NYSE: NEM) (“Newmont” or the “Company”) today announced second quarter results, with equity gold sales of 1.2 million ounces at an average realized price of $915 per ounce and costs applicable to sales of $423 per ounce, resulting in adjusted net income(1) of $213 million ($0.43 per share), compared to $221 million ($0.50 per share) for the prior year quarter. Net income from continuing operations on a GAAP basis(2) was $171 million ($0.35 per share) for the second quarter, compared to $270 million ($0.60 per share) for the year ago quarter. The 2009 decrease is primarily due to lower realized copper prices and a significantly higher tax rate, partially offset by higher sales volumes and lower operating costs.
Second Quarter 2009 Highlights:
| | q | Equity gold sales of 1.2 million ounces at an average realized price of $915 per ounce; |
| | q | Equity copper sales of 47 million pounds at an average realized price of $2.17 per pound; |
| | q | Costs applicable to sales for gold of $423 per ounce, down 4% from $439 per ounce in the year ago quarter; |
| | q | Costs applicable to sales for copper of $0.58 per pound; |
| | q | Net cash provided from continuing operations of $503 million; and |
| | q | Adjusted net income(1) of $213 million ($0.43 per share). |
Richard O’Brien, President and Chief Executive Officer said, “I am pleased to report that our costs applicable to sales were 4% lower than last year’s quarter, resulting in an operating margin of $492 per ounce for the quarter. I am also pleased to report that we have successfully started to transition Boddington from project construction to start-up. As Boddington ramps up towards commercial production, it will become a significant contributor to our portfolio and create sustainable value for our shareholders, employees and host communities.”
With six months of operating results as well as Boddington’s July start-up, the Company revised the top end of its 2009 equity gold sales outlook from 5.5 to 5.4 million ounces. With a revised 2009 equity gold sales outlook of 5.2 to 5.4 million ounces, the Company’s outlook for 2009 costs applicable to sales remains unchanged at between $400 and $440 per ounce. The Company’s costs applicable to sales forecast for 2009 now assumes an oil price of $70 per barrel and an Australian dollar exchange rate of 0.75 for the balance of the year.
| (1) | See reconciliation from adjusted net income to GAAP Net income on page 10 of this release. |
| (2) | In this release, GAAP Net income refers to Net income attributable to Newmont stockholders. |
Costs applicable to sales are expected to change by approximately $3 per ounce for every $10 change in the oil price and by roughly $3 per ounce for every 0.10 change in the Australian dollar exchange rate for the remainder of the year.
Regional Operations
In the second quarter of 2009, the Company reported equity gold sales of 1.2 million ounces at costs applicable to sales of $423 per ounce. The Company’s operations delivered equity gold sales slightly above expectations as higher than expected sales at Yanacocha in Peru, at Batu Hijau in Indonesia and in Australia were partially offset by lower sales in Nevada. Costs applicable to sales per ounce were lower than expected in Nevada, in Australia and at Batu Hijau, partially offset by higher costs at Ahafo in Ghana and at La Herradura in Mexico.
Nevada - Nevada sold 415,000 equity ounces of gold at costs applicable to sales of $549 per ounce during the second quarter. Equity gold sales were slightly lower than expected primarily due to lower throughput and grades at Mill 6 following the annual maintenance period during May, as well as lower production at Midas due to the suspension of mining following a ground failure which curtailed production for most of April. During the quarter, costs applicable to sales per ounce were lower than expected due to higher by-product credits and lower milling costs, partially offset by lower than expected gold sales. The Company updated its 2009 equity gold sales outlook from Nevada to between 1.9 and 2.0 million ounces from the previously announced outlook of between 1.8 and 2.0 million ounces. The outlook for 2009 costs applicable to sales remains unchanged at between $535 and $575 per ounce.
Yanacocha - - Equity gold sales during the second quarter at Yanacocha in Peru were 274,000 ounces at costs applicable to sales of $323 per ounce. Equity gold sales were above expectations due to higher leach pad production as well as higher grades and throughput at the gold mill. Costs applicable to sales per ounce were in-line with expectations as cost decreases associated with higher gold sales were offset by higher royalty and workers participation costs from higher realized gold prices, and from lower by-product credits. The Company increased its 2009 equity gold sales outlook to between 1,000,000 and 1,050,000 ounces from the previously announced outlook of between 975,000 and 1,025,000 ounces. The Company also increased its 2009 outlook for costs applicable to sales to between $300 and $320 per ounce, up slightly from the previously announced guidance of between $290 and $310 per ounce, primarily due to higher royalties and workers participation costs.
Australia/New Zealand - Equity gold sales during the second quarter in Australia/New Zealand were 283,000 ounces at costs applicable to sales of $500 per ounce. Equity gold sales were slightly higher than expectations as higher grades and recoveries at Jundee were offset by lower grades and recoveries at Tanami and lower production at Waihi in New Zealand following an electrical fire at the mill in early May which halted production for the remainder of the quarter. The Company expects the mill repairs to be completed in August. Costs applicable to sales per ounce were lower than expected due to higher gold sales, partially offset by higher royalty costs. Regional costs applicable to sales are expected to change by approximately $13 per ounce for every 0.10 change in the Australian dollar exchange rate for the remainder of the year.
The Company updated its 2009 outlook for the region for equity gold sales to between 1.4 and 1.5 million ounces, down from the previously announced outlook of between 1.5 and 1.6 million ounces, primarily related to lower expected gold sales at Boddington with the start-up occurring near the back end of our range. The Company also updated the outlook for regional costs applicable to sales to between $460 and $500 per ounce, up slightly from the previously announced outlook of between $440 and $480 per ounce, primarily as a result of the delayed start-up at Boddington.
Batu Hijau - Equity gold and copper sales during the second quarter at Batu Hijau in Indonesia were 48,000 ounces and 47 million pounds, respectively, in line with expectations, at costs applicable to sales of $229 per ounce and $0.58 per pound, respectively. Total costs applicable to sales were lower than expected as a result of lower diesel costs and a higher build in ore stockpile inventory. Costs applicable to sales allocated to gold were lower than expected due to the lower allocation of costs to gold as a result of co-product accounting. For 2009, the Company continues to expect equity gold and copper sales of between 225,000 and 250,000 ounces and 210 and 230 million pounds, respectively, at costs applicable to sales of between $280 and $320 per ounce and $0.50 and $0.65 per pound, respectively.
Ahafo - Equity gold sales during the second quarter at Ahafo in Ghana were 132,000 ounces at costs applicable to sales of $428 per ounce. Equity gold sales were in-line with expectations as slightly lower throughput was offset by slightly higher grades. Costs applicable to sales per ounce were higher than expected due to the processing of higher cost stockpiled material, partially offset by lower fuel costs. The Company continues to have a positive outlook on hydro power availability, with water levels in the supplying lake appearing sufficient to meet power demands for the remainder of the year. The Company continues to expect its 2009 outlook for equity gold sales to be between 500,000 and 525,000 ounces and costs applicable to sales to be between $425 and $450 per ounce for Ahafo.
Other – Equity gold sales at La Herradura in Mexico during the second quarter were 31,000 ounces at costs applicable to sales of $398 per ounce. Equity gold sales were higher than expected due to additional sales from inventory. Costs applicable to sales were also higher than expected due to the processing of higher cost inventory and higher workers participation costs, partially offset by lower input costs and higher by-product credits.
Capital Update
Consolidated capital expenditures were $632 million during the second quarter, with over 70% attributable to the Boddington project in Australia. The Company has narrowed its expectations for capital expenditures at Boddington to between $2.8 and $2.9 billion (excluding capitalized interest) on a 100% basis from the previously announced range of between $2.6 and $2.9 billion (excluding capitalized interest). The Company updated its 2009 consolidated capital expenditure outlook to between $1.5 and $1.7 billion, up from $1.4 to $1.6 billion, primarily related to the later than expected start-up of Boddington, partially offset by lower capital expenditures throughout the rest of the portfolio.
Boddington Update
The Company has begun the start-up phase of the Boddington project in Western Australia. With the successful turnover of the dry plant to operations and wet plant commissioning advancing rapidly, planned start-up is continuing, despite being adversely affected by wet weather and a recent decline in contracted workforce productivity associated with the industry-wide economic slowdown. At full production, Boddington will be Australia’s largest gold mine.
Expected milestones include:
| | q | First waste rock to mills achieved on July 14th; |
| | q | First ore to mills expected by end of July; |
| | q | First production expected in August; and |
| | q | Expected 12 month ramp-up to full production. |
“For a project of its size and complexity, Boddington represents a signature achievement not just for Newmont, but for our industry as a whole,” said Richard O’Brien, President and Chief Executive Officer. “I am especially proud of how our employees in Australia and from across the globe contributed to the successful delivery of this world-class project. As Newmont continues its safety journey, it is especially pleasing to see this project as an industry leader in safety performance.”
Key operating highlights for Boddington are expected to include:
| | q | First five year average annual gold production: ~1,000,000 ounces; |
| | q | First five year average costs applicable to sales (net of by-product credits): $300 per ounce; |
| | q | Proven and probable gold reserves: 20.1 million ounces; and |
| | q | Estimated mine life in excess of 24 years. |
In June, Newmont completed the acquisition of the remaining 33.33% interest in the Boddington project from AngloGold Ashanti Australia Limited (“AngloGold”), a wholly-owned subsidiary of AngloGold Ashanti Ltd. In connection with the acquisition closing, Newmont incurred transaction costs of $59 million which were expensed in the second quarter. Additionally, Newmont paid cash of $182 million to reimburse AngloGold for its share of capital and other expenditures from January 1, 2009, the effective date of the transaction.
Transactions Update
Kori Kollo - On July 17th, the Company sold its interest in Empresa Minera Inti Raymi ("Inti Raymi" or “Kori Kollo”) in Bolivia to Compania Procesadora de Minerales S.A., a company controlled by its long-time Bolivian partner. As part of the transaction, a reclamation trust fund will be established with the proceeds to be made available exclusively to pay for closure and reclamation costs when operations eventually cease. The buyer assumed all obligations of the operation and has agreed to pay Newmont a nominal royalty from future production. The Company recognized a $14 million charge, net of tax benefits, in the second quarter as a result of the pending sale of its interest in Inti Raymi and has reported the results of operations for Kori Kollo as part of discontinued operations. With the sale of Inti Raymi, Newmont has no remaining operations in Bolivia.
Batu Hijau Divestiture - Significant progress has been made, in cooperation with the Government of Indonesia (the “GOI”), to implement the international arbitration panel’s decision of March 31, 2009, relating to the divestment of a portion of Newmont and Sumitomo’s interest in Batu Hijau.
In its award, the international arbitration panel ruled that Newmont and Sumitomo must implement the following by the end of September:
| | q | Pay a portion of the GOI’s costs associated with the arbitration; |
| | q | Ensure the release of pledges on 31% of PTNNT’s shares held by the Senior Lenders; |
| | q | Transfer for value the 3% shares from 2006 and 7% shares from 2007 to the local and regional governments or their designee; and |
| | q | Reach agreement with the GOI on the valuation of the 2008 7% divestiture shares and offer those shares to the GOI. |
In April 2009, Newmont and Sumitomo paid the required $1.7 million of the GOI’s arbitration costs and in May secured the release of 31% of PTNNT’s shares pledged to the Senior Lenders. In addition, the 2006 and 2007 shares have been re-offered to the local and regional governments for $109 million and $282 million, respectively. In July, Newmont and Sumitomo and the GOI agreed to value the 14% interest in PTNNT, associated with the 2008 and 2009 divestiture shares at approximately $494 million ($3.526 billion for 100%) of PTNNT, and the 2008 and 2009 divestiture shares were re-offered to the GOI.
“We are pleased to have reached a final valuation for the 2008 and 2009 shares with the Government, and we appreciate the collaborative approach taken to reaching agreement in a timely fashion,” said Newmont’s President and Chief Executive Officer, Richard O’Brien. “Now that this milestone has been achieved, we look forward to the Government advising us to whom Newmont and Sumitomo should transfer the unpledged shares in order to complete implementation of the international arbitration panel’s award within the 180-day timeframe.”
Consolidated Statements of Income (unaudited, in millions, except per share)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Revenues | | | | | | | | | | | | | | | | |
| Sales - gold, net | | $ | 1,373 | | | $ | 1,320 | | | $ | 2,748 | | | $ | 2,813 | |
| Sales - copper, net | | | 229 | | | | 183 | | | | 390 | | | | 615 | |
| | | | 1,602 | | | | 1,503 | | | | 3,138 | | | | 3,428 | |
| Costs and expenses | | | | | | | | | | | | | | | | |
Costs applicable to sales - gold (1) | | | 635 | | | | 645 | | | | 1,289 | | | | 1,277 | |
Costs applicable to sales - copper (1) | | | 61 | | | | 104 | | | | 146 | | | | 254 | |
| Amortization | | | 176 | | | | 183 | | | | 367 | | | | 362 | |
| Accretion | | | 8 | | | | 8 | | | | 17 | | | | 16 | |
| Exploration | | | 51 | | | | 58 | | | | 92 | | | | 97 | |
| Advanced projects, research and development | | | 42 | | | | 39 | | | | 73 | | | | 69 | |
| General and administrative | | | 40 | | | | 37 | | | | 79 | | | | 66 | |
| Other expense, net | | | 116 | | | | 118 | | | | 192 | | | | 180 | |
| | | | 1,129 | | | | 1,192 | | | | 2,255 | | | | 2,321 | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Other income, net | | | 9 | | | | 19 | | | | 18 | | | | 34 | |
| Interest expense, net | | | (23 | ) | | | (35 | ) | | | (55 | ) | | | (63 | ) |
| | | | (14 | ) | | | (16 | ) | | | (37 | ) | | | (29 | ) |
| Income from continuing operations before income tax (expense) benefit and other items | | | 459 | | | | 295 | | | | 846 | | | | 1,078 | |
| Income tax (expense) benefit | | | (136 | ) | | | 42 | | | | (241 | ) | | | (187 | ) |
| Equity loss of affiliates | | | (3 | ) | | | –– | | | | (8) | | | | (5) | |
| Income from continuing operations | | | 320 | | | | 337 | | | | 597 | | | | 886 | |
| (Loss) income from discontinued operations | | | (14 | ) | | | 2 | | | | (14 | ) | | | 10 | |
| Net income | | | 306 | | | | 339 | | | | 583 | | | | 896 | |
| Less: Net income attributable to noncontrolling interests | | | 144 | | | | 68 | | | | 232 | | | | 260 | |
| Net income attributable to Newmont stockholders | | $ | 162 | | | $ | 271 | | | $ | 351 | | | $ | 636 | |
| | | | | | | | | | | | | | | | | |
| Net income attributable to Newmont stockholders: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 171 | | | $ | 270 | | | $ | 360 | | | $ | 627 | |
| Discontinued operations | | | (9 | ) | | | 1 | | | | (9 | ) | | | 9 | |
| | | $ | 162 | | | $ | 271 | | | $ | 351 | | | $ | 636 | |
| | | | | | | | | | | | | | | | | |
| Income per common share | | | | | | | | | | | | | | | | |
| Basic: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.35 | | | $ | 0.60 | | | $ | 0.75 | | | $ | 1.38 | |
| Discontinued operations | | | (0.02 | ) | | | –– | | | | (0.02 | ) | | | 0.02 | |
| | | $ | 0.33 | | | $ | 0.60 | | | $ | 0.73 | | | $ | 1.40 | |
| Diluted: | | | | | | | | | | | | | | | | |
| Continuing operations | | $ | 0.35 | | | $ | 0.59 | | | $ | 0.75 | | | $ | 1.37 | |
| Discontinued operations | | | (0.02 | ) | | | –– | | | | (0.02 | ) | | | 0.02 | |
| | | $ | 0.33 | | | $ | 0.59 | | | $ | 0.73 | | | $ | 1.39 | |
| Basic weighted-average common shares outstanding | | | 490 | | | | 454 | | | | 483 | | | | 454 | |
| Diluted weighted-average common shares outstanding | | | 491 | | | | 456 | | | | 484 | | | | 457 | |
| Cash dividends declared per common share | | $ | 0.10 | | | $ | 0.10 | | | $ | 0.20 | | | $ | 0.20 | |
(1) Exclusive of Amortization and Accretion.
Consolidated Balance Sheets (unaudited, in millions)
| | | At June 30, 2009 | | | At December 31, 2008 | |
| ASSETS | | | | | | |
| Cash and cash equivalents | | $ | 544 | | | $ | 435 | |
| Marketable securities and other short-term investments | | | 19 | | | | 12 | |
| Trade receivables | | | 229 | | | | 104 | |
| Accounts receivable | | | 283 | | | | 214 | |
| Inventories | | | 481 | | | | 507 | |
| Stockpiles and ore on leach pads | | | 318 | | | | 290 | |
| Deferred income tax assets | | | 188 | | | | 284 | |
| Other current assets | | | 395 | | | | 455 | |
| Current assets | | | 2,457 | | | | 2,301 | |
| Property, plant and mine development, net | | | 11,825 | | | | 10,128 | |
| Investments | | | 902 | | | | 655 | |
| Stockpiles and ore on leach pads | | | 1,326 | | | | 1,136 | |
| Deferred income tax assets | | | 1,126 | | | | 1,039 | |
| Other long-term assets | | | 218 | | | | 207 | |
| Goodwill | | | 188 | | | | 188 | |
| Assets of operations held for sale | | | 69 | | | | 73 | |
| Total assets | | $ | 18,111 | | | $ | 15,727 | |
| LIABILITIES | | | | | | | | |
| Current portion of long-term debt | | $ | 221 | | | $ | 165 | |
| Accounts payable | | | 310 | | | | 411 | |
| Employee-related benefits | | | 162 | | | | 170 | |
| Income and mining taxes | | | 90 | | | | 61 | |
| Other current liabilities | | | 1,071 | | | | 770 | |
| Current liabilities | | | 1,854 | | | | 1,577 | |
| Long-term debt | | | 2,810 | | | | 3,072 | |
| Reclamation and remediation liabilities | | | 721 | | | | 699 | |
| Deferred income tax liabilities | | | 1,237 | | | | 1,051 | |
| Employee-related benefits | | | 404 | | | | 379 | |
| Other long-term liabilities | | | 277 | | | | 252 | |
| Liabilities of operations held for sale | | | 54 | | | | 36 | |
| Total liabilities | | | 7,357 | | | | 7,066 | |
| | | | | | | | | |
| STOCKHOLDERS’ EQUITY | | | | | | | | |
| Common stock | | | 768 | | | | 709 | |
| Additional paid-in capital | | | 8,052 | | | | 6,831 | |
| Accumulated other comprehensive income (loss) | | | 141 | | | | (253 | ) |
| Retained earnings | | | 302 | | | | 4 | |
| Total Newmont stockholders’ equity | | | 9,263 | | | | 7,291 | |
| Noncontrolling interests | | | 1,491 | | | | 1,370 | |
| Total stockholders’ equity | | | 10,754 | | | | 8,661 | |
| Total liabilities and stockholders’ equity | | $ | 18,111 | | | $ | 15,727 | |
Consolidated Statements of Cash Flows (unaudited, in millions)
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Operating activities: | | | | | | | | | | | | | | | | |
| Net income | | $ | 306 | | | $ | 339 | | | $ | 583 | | | $ | 896 | |
| Adjustments: | | | | | | | | | | | | | | | | |
| Amortization | | | 177 | | | | 183 | | | | 367 | | | | 362 | |
| Loss (income) from discontinued operations | | | 14 | | | | (2 | ) | | | 14 | | | | (10 | ) |
| Accretion of accumulated reclamation obligations | | | 11 | | | | 10 | | | | 23 | | | | 20 | |
| Deferred income taxes | | | 6 | | | | (157 | ) | | | (13 | ) | | | (208 | ) |
| Write-down of investments | | | –– | | | | 34 | | | | 6 | | | | 56 | |
| Stock based compensation and other benefits | | | 16 | | | | 13 | | | | 30 | | | | 24 | |
| Other operating adjustments and write-downs | | | 21 | | | | 67 | | | | 53 | | | | 90 | |
| Net change in operating assets and liabilities | | | (48 | ) | | | (106 | ) | | | (177 | ) | | | (259 | ) |
| Net cash provided from continuing operations | | | 503 | | | | 381 | | | | 886 | | | | 971 | |
| Net cash provided from (used in) discontinued operations | | | 4 | | | | (11 | ) | | | 8 | | | | (107 | ) |
| Net cash provided from operations | | | 507 | | | | 370 | | | | 894 | | | | 864 | |
| Investing activities: | | | | | | | | | | | | | | | | |
| Additions to property, plant and mine development | | | (580 | ) | | | (445 | ) | | | (910 | ) | | | (893 | ) |
| Investments in marketable debt and equity securities | | | –– | | | | (14 | ) | | | –– | | | | (17 | ) |
| Proceeds from sale of marketable debt and equity securities | | | 5 | | | | 17 | | | | 5 | | | | 17 | |
| Acquisitions, net | | | (741 | ) | | | (7 | ) | | | (760 | ) | | | (325 | ) |
| Other | | | (2 | ) | | | (20 | ) | | | (7 | ) | | | (16 | ) |
| Net cash used in investing activities of continuing operations | | | (1,318 | ) | | | (469 | ) | | | (1,672 | ) | | | (1,234 | ) |
| Net cash used in investing activities of discontinued operations | | | –– | | | | (5 | ) | | | –– | | | | (10 | ) |
| Net cash used in investing activities | | | (1,318 | ) | | | (474 | ) | | | (1,672 | ) | | | (1,244 | ) |
| Financing activities: | | | | | | | | | | | | | | | | |
| Proceeds from debt, net | | | 125 | | | | 451 | | | | 1,494 | | | | 1,023 | |
| Repayment of debt | | | (79 | ) | | | (250 | ) | | | (1,668 | ) | | | (625 | ) |
| Dividends paid to common stockholders | | | (49 | ) | | | (46 | ) | | | (98 | ) | | | (91 | ) |
| Dividends paid to noncontrolling interests | | | (112 | ) | | | (49 | ) | | | (112 | ) | | | (147 | ) |
| Proceeds from stock issuance, net | | | 8 | | | | 7 | | | | 1,247 | | | | 24 | |
| Change in restricted cash and other | | | (8 | ) | | | 6 | | | | 5 | | | | 7 | |
| Net cash (used in) provided from financing activities of continuing operations | | | (115 | ) | | | 119 | | | | 868 | | | | 191 | |
| Net cash used in financing activities of discontinued operations | | | (1 | ) | | | (1 | ) | | | (2 | ) | | | (2 | ) |
| Net cash (used in) provided from financing activities | | | (116 | ) | | | 118 | | | | 866 | | | | 189 | |
| Effect of exchange rate changes on cash | | | 20 | | | | 8 | | | | 21 | | | | (4 | ) |
| Net change in cash and cash equivalents | | | (907 | ) | | | 22 | | | | 109 | | | | (195 | ) |
| Cash and cash equivalents at beginning of period | | | 1,451 | | | | 1,014 | | | | 435 | | | | 1,231 | |
| Cash and cash equivalents at end of period | | $ | 544 | | | $ | 1,036 | | | $ | 544 | | | $ | 1,036 | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Gold | | | | | | | | | | | | | | | | |
| Consolidated ounces sold (thousands): | | | | | | | | | | | | | | | | |
| North America | | | | | | | | | | | | | | | | |
Nevada (1) | | | 415 | | | | 554 | | | | 933 | | | | 1,080 | |
| La Herradura | | | 31 | | | | 25 | | | | 56 | | | | 49 | |
| | | | 446 | | | | 579 | | | | 989 | | | | 1,129 | |
| South America | | | | | | | | | | | | | | | | |
| Yanacocha | | | 534 | | | | 432 | | | | 1,004 | | | | 972 | |
| | | | | | | | | | | | | | | | | |
| Asia Pacific | | | | | | | | | | | | | | | | |
| Jundee | | | 108 | | | | 109 | | | | 202 | | | | 200 | |
| Tanami | | | 88 | | | | 95 | | | | 173 | | | | 190 | |
| Kalgoorlie | | | 71 | | | | 63 | | | | 146 | | | | 132 | |
| Waihi | | | 16 | | | | 34 | | | | 56 | | | | 65 | |
| Batu Hijau | | | 107 | | | | 37 | | | | 173 | | | | 158 | |
| | | | 390 | | | | 338 | | | | 750 | | | | 745 | |
| Africa | | | | | | | | | | | | | | | | |
Ahafo (2) | | | 132 | | | | 134 | | | | 276 | | | | 239 | |
| | | | 1,502 | | | | 1,483 | | | | 3,019 | | | | 3,084 | |
| Equity ounces sold (thousands): | | | | | | | | | | | | | | | | |
| North America | | | | | | | | | | | | | | | | |
Nevada (1) | | | 415 | | | | 554 | | | | 933 | | | | 1,080 | |
| La Herradura | | | 31 | | | | 25 | | | | 56 | | | | 49 | |
| | | | 446 | | | | 579 | | | | 989 | | | | 1,129 | |
| South America | | | | | | | | | | | | | | | | |
| Yanacocha | | | 274 | | | | 222 | | | | 515 | | | | 499 | |
| | | | | | | | | | | | | | | | | |
| Asia Pacific | | | | | | | | | | | | | | | | |
| Jundee | | | 108 | | | | 109 | | | | 202 | | | | 200 | |
| Tanami | | | 88 | | | | 95 | | | | 173 | | | | 190 | |
| Kalgoorlie | | | 71 | | | | 63 | | | | 146 | | | | 132 | |
| Waihi | | | 16 | | | | 34 | | | | 56 | | | | 65 | |
| Batu Hijau | | | 48 | | | | 17 | | | | 78 | | | | 71 | |
| | | | 331 | | | | 318 | | | | 655 | | | | 658 | |
| Africa | | | | | | | | | | | | | | | | |
Ahafo (2) | | | 132 | | | | 134 | | | | 276 | | | | 239 | |
| | | | 1,183 | | | | 1,253 | | | | 2,435 | | | | 2,525 | |
| Discontinued Operations | | | | | | | | | | | | | | | | |
| Kori Kollo | | | 15 | | | | 18 | | | | 31 | | | | 36 | |
| | | | 1,198 | | | | 1,271 | | | | 2,466 | | | | 2,561 | |
| Copper | | | | | | | | | | | | | | | | |
| Batu Hijau pounds sold (millions): | | | | | | | | | | | | | | | | |
| Consolidated | | | 105 | | | | 51 | | | | 201 | | | | 157 | |
| Equity | | | 47 | | | | 23 | | | | 90 | | | | 70 | |
(1) Includes incremental start-up ounces of 1 for both the second quarter and first half of 2009 and the first half of 2008.
(2) Includes incremental start-up ounces of 16 for both the second quarter and first half of 2008.
Costs Applicable to Sales and Consolidated Capital Expenditures Statistics
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Gold | | | | | | | | | | | | |
Costs Applicable to Sales ($/ounce) (1) | | | | | | | | | | | | |
| North America | | | | | | | | | | | | |
Nevada (1) | | $ | 549 | | | $ | 430 | | | $ | 527 | | | $ | 420 | |
| La Herradura | | | 398 | | | | 388 | | | | 393 | | | | 357 | |
| | | | 538 | | | | 429 | | | | 519 | | | | 417 | |
| South America | | | | | | | | | | | | | | | | |
| Yanacocha | | | 323 | | | | 374 | | | | 324 | | | | 339 | |
| | | | | | | | | | | | | | | | | |
| Asia Pacific | | | | | | | | | | | | | | | | |
| Jundee | | | 338 | | | | 401 | | | | 345 | | | | 410 | |
| Tanami | | | 599 | | | | 605 | | | | 586 | | | | 565 | |
| Kalgoorlie | | | 607 | | | | 860 | | | | 625 | | | | 817 | |
| Waihi | | | 582 | | | | 441 | | | | 426 | | | | 448 | |
| Batu Hijau | | | 229 | | | | 518 | | | | 297 | | | | 358 | |
| | | | 426 | | | | 560 | | | | 450 | | | | 514 | |
| Africa | | | | | | | | | | | | | | | | |
| Ahafo | | | 428 | | | | 390 | | | | 413 | | | | 425 | |
| Average | | $ | 423 | | | $ | 439 | | | $ | 427 | | | $ | 416 | |
| | | | | | | | | | | | | | | | | |
| Copper | | | | | | | | | | | | | | | | |
Costs Applicable to Sales ($/pound1) | | | | | | | | | | | | | | | | |
| Batu Hijau | | $ | 0.58 | | | $ | 2.02 | | | $ | 0.73 | | | $ | 1.62 | |
| | | Three Months Ended June 30, | | | Six Months Ended June 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| Consolidated Capital Expenditures ($ millions): | | | | | | | | | | | | | | | | |
| North America | | | | | | | | | | | | | | | | |
| Nevada | | $ | 58 | | | $ | 70 | | | $ | 111 | | | $ | 140 | |
| Hope Bay | | | 2 | | | | 21 | | | | 3 | | | | 30 | |
| La Herradura | | | 10 | | | | 1 | | | | 19 | | | | 12 | |
| | | | 70 | | | | 92 | | | | 133 | | | | 182 | |
| South America | | | | | | | | | | | | | | | | |
| Yanacocha | | | 29 | | | | 45 | | | | 62 | | | | 81 | |
| | | | | | | | | | | | | | | | | |
| Asia Pacific | | | | | | | | | | | | | | | | |
| Boddington | | | 468 | | | | 187 | | | | 684 | | | | 392 | |
| Jundee | | | 9 | | | | 10 | | | | 14 | | | | 19 | |
| Tanami | | | 18 | | | | 11 | | | | 28 | | | | 21 | |
| Kalgoorlie | | | –– | | | | 4 | | | | 2 | | | | 5 | |
| Waihi | | | 2 | | | | 9 | | | | 3 | | | | 19 | |
| Batu Hijau | | | 17 | | | | 26 | | | | 23 | | | | 54 | |
| Other Asia Pacific | | | –– | | | | –– | | | | 1 | | | | –– | |
| | | | 514 | | | | 247 | | | | 755 | | | | 510 | |
| Africa | | | | | | | | | | | | | | | | |
| Ahafo | | | 14 | | | | 33 | | | | 23 | | | | 60 | |
| Akyem | | | –– | | | | (1 | ) | | | 1 | | | | 1 | |
| | | | 14 | | | | 32 | | | | 24 | | | | 61 | |
| Corporate and Other | | | 5 | | | | 4 | | | | 8 | | | | 6 | |
| Total - Accrual Basis | | | 632 | | | | 420 | | | | 982 | | | | 840 | |
| Change in Capital Accrual | | | (52 | ) | | | 26 | | | | (72 | ) | | | 53 | |
| Total - Cash Basis | | $ | 580 | | | $ | 446 | | | $ | 910 | | | $ | 893 | |
(1) Excludes Amortization and Accretion.
Reconciliation of Adjusted Net Income to GAAP Net Income - Management of the Company uses the non-GAAP financial measure Adjusted net income to evaluate the Company’s operating performance, and for planning and forecasting future business operations. The Company believes the use of Adjusted net income allows investors and analysts to compare the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the production and sale of minerals to similar operating results of other mining companies, by excluding exceptional or unusual items, income or loss from discontinued operations and the permanent impairment of assets, including marketable securities and goodwill. Management’s determination of the components of Adjusted net income are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.
Adjusted net income is not, and should not be used as, an alternative to GAAP Net income as reflected in the consolidated financial statements of the Company. Adjusted net income is not a measure of financial performance under GAAP and this measure should not be considered in isolation or as a substitute to performance measures calculated in accordance with GAAP. The table below sets forth a reconciliation of Adjusted net income to GAAP Net income, which is the most directly comparable GAAP financial measure.
| Description ($million except per share, after-tax) | | | Q2 2009 | | | Per Share | | | | Q2 2008 | | | Per Share | |
| Adjusted net income | | $ | 213 | | | $ | 0.43 | | | $ | 221 | | | $ | 0.50 | |
| Boddington acquisition costs | | | (42 | ) | | | (0.08 | ) | | | - | | | | - | |
| Income taxes | | | - | | | | - | | | | 129 | | | | 0.28 | |
| Legacy reclamation obligations | | | - | | | | - | | | | (41 | ) | | | (0.09 | ) |
| Write-down of marketable securities | | | - | | | | - | | | | (34 | ) | | | (0.08 | ) |
| Western Australia gas interruption | | | - | | | | - | | | | (5 | ) | | | (0.01 | ) |
GAAP income from continuing operations (1) | | | 171 | | | | 0.35 | | | | 270 | | | | 0.60 | |
Loss from discontinued operations (1) | | | (9 | ) | | | (0.02 | ) | | | 1 | | | | 0.00 | |
GAAP net income (1) | | $ | 162 | | | $ | 0.33 | | | $ | 271 | | | $ | 0.60 | |
(1) Attributable to Newmont stockholders
2009 Annual Guidance - The table below sets forth the Company’s current outlook and forecast assumptions:
Description | | Q2 Update | | Q1 Update | | 2009 Original |
| Equity gold sales (million ounces) | | 5,200 - 5,400 | | 5,200 - 5,500 | | 5,200 - 5,500 |
| Costs applicable to sales ($/ounce) | | $400 - $440 | | $400 - $440 | | $400 - $440 |
| Equity copper sales (million pounds) | | 210 - 230 | | 210 - 230 | | 210 - 230 |
| Costs applicable to sales ($/pound) | | $0.50 - $0.65 | | $0.50 - $0.65 | | $0.65 - $0.75 |
| Consolidated capital expenditures ($ million) | | $1,500 - $1,700 | | $1,400 - $1,600 | | $1,400 - $1,600 |
| Amortization ($ million) | | $740 - $780 | | $775 - $825 | | $775 - $825 |
| Exploration ($ million) | | $165 - $175 | | $165 - $175 | | $165 - $175 |
| Advanced projects, research and development ($ million) | | $140 - $160 | | $120 - $150 | | $120 - $150 |
| General & administrative ($ million) | | $150 - $160 | | $140 - $150 | | $140 - $150 |
| Interest expense, net ($ million) | | $100 - $110 | | $150 - $160 | | $150 - $160 |
| Effective tax rate | | 27% - 31% | | 27% - 31% | | 28% - 32% |
| Forecast Assumptions | | Q2 Update | | Q1 Update | | 2009 Original |
| Gold Price ($/ounce) | | $925 | | $875 | | $750 |
| Copper price ($/pound) | | $2.00 | | $1.50 | | $2.00 |
| Oil price ($/barrel) | | $70 | | $50 | | $70 |
| Australian dollar exchange rate | | 0.75 | | 0.7 | | 0.75 |
To view complete financial disclosure, including regional mine statistics, Results of Consolidated Operations, Liquidity and Capital Resources, Management’s Discussion & Analysis, the Form 10-Q, and a complete outline of the 2009 Operating and Financial guidance by region, please see www.newmont.com.
The Company’s second quarter earnings conference call and webcast presentation will be held on Thursday, July 23, 2009 beginning at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time). To participate:
| Dial-In Number | 888.469.2059 |
| Intl Dial-In Number | 210.234.0057 |
| Leader | Richard O’Brien |
| Pass code | Newmont |
| Replay Number | 866.483.9088 |
| Intl Reply Number | 203.369.1587 |
| Replay Pass code | 6396668 |
The conference call will also be simultaneously carried on the Company’s website at www.newmont.com under Our Investors/Events and Presentations and will be archived there for a limited time.
| Investor Contact | | |
| John Seaberg | 303.837.5743 | john.seaberg@newmont.com |
| | | |
| Media Contact | | |
| Omar Jabara | 303.837.5114 | omar.jabara@newmont.com |
Cautionary Statement
This news release contains “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 that are intended to be covered by the safe harbor created by such sections and other applicable laws. 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. Such forward-looking statements include, without limitation, (i) estimates of future mineral production and sales; (ii) estimates of future costs applicable to sales, other expenses and taxes, for specific operations and on a consolidated basis; (iii) estimates of future capital expenditures, construction, production or closure activities; (iv) statements regarding future exploration expenditures, results and reserves; (v) statements regarding fluctuations in capital and currency markets; (vi) statements regarding potential cost savings, productivity, operating performance, and ownership and cost structures; (vii) expectations regarding the completion and timing of the remaining interest in Boddington acquisition and other acquisitions or divestitures; and (viii) expectations regarding the start-up time, design, mine life, production and costs applicable to sales and exploration potential of the Boddington project and other projects. Where the Company expresses or implies 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, 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 such forward-looking statements. Such risks include, but are not limited to, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, political and operational risks in the countries in which we operate, and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company’s 2008 Annual Report on Form 10-K, filed on February 19, 2009, with the Securities and Exchange Commission, as well as the Company’s other SEC filings. The Company does not undertake any obligation to release publicly revisions to any “forward-looking statement,” to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
