Exhibit 99.1
Newmont Mining Corporation Announces Fourth Quarter Net Income of $153 million
($0.36 per share) and 2003 Net Income of $476 million ($1.16 per share)
DENVER, Feb. 4 /PRNewswire-FirstCall/ -- Newmont Mining Corporation
(NYSE: NEM) today announced fourth quarter net income of $153.1 million ($0.36
per share), an increase of 104% from net income of $75.1 million ($0.19 per
share) for the fourth quarter of 2002. Newmont earned net income of $475.7
million ($1.16 per share, basic) for 2003, an increase of 208% from $154.3
million ($0.42 per share, basic) for 2002. Fourth quarter and 2003 highlights
include:
* Equity gold sales(1) for the fourth quarter of 1.7 million ounces at
total cash costs(2) of $197 per ounce; equity gold sales of 7.4 million
ounces at total cash costs of $203 per ounce for 2003;
* Net cash provided by operating activities for the fourth quarter of $151
million, after net working capital increases of approximately $93
million; net cash provided by operating activities of $589 million for
2003, after settlement of cash flow hedges of approximately $121 million
and net working capital increases of $82 million;
* Cash exceeding debt by $237 million at year-end; and
* Record year-end equity gold reserves of 91.3 million ounces.
Wayne W. Murdy, Chairman and Chief Executive Officer of Newmont, said: "We
ended the year with a strong fourth quarter. Our core operations continue to
deliver solid operating results and with higher metal prices, bottom-line
earnings more than tripled to $476 million. In addition, our exploration
results exceeded expectations and as announced today, we reported record year-
end gold reserves."
Fourth Quarter Year
2003 2002 2003 2002
Financial (in millions,
except per share)
Revenues $821.4 $798.7 $3,214.1 $2,657.9
Net cash provided
by operating
activities $151.2 $225.2 $588.8 $670.3
Net income
applicable to
common shares $153.1 $75.1 $475.7 $154.3
Net income per
common share,
basic $0.36 $0.19 $1.16 $0.42
Operating
Equity gold sales
(000 ounces)(1) 1,715.1 2,215.7 7,383.6 7,631.7
Average realized
price ($/ounce) $394 $325 $366 $313
Total cash costs
($/ounce)(2) $197 $178 $203 $189
Total production
costs ($/ounce)(2) $259 $242 $266 $250
1. Equity gold sales ounces are those attributable to Newmont's ownership
or economic interest.
2. For a reconciliation of total cash costs and total production costs per
ounce (non-GAAP measures of performance) to costs applicable to sales
calculated and presented under GAAP, please refer to the Supplemental
Information attached.
Financial & Operating Review
Fourth quarter net income applicable to common shares was $153.1 million
($0.36 per share), compared with net income of $75.1 million ($0.19 per share)
for the fourth quarter of 2002. For 2003, net income applicable to common
shares was $475.7 million ($1.16 per share, basic) compared with net income of
$154.3 million ($0.42 per share, basic), for 2002.
For the fourth quarter, the Company sold 1,715,100 equity ounces of gold,
23% lower than the prior year quarter, largely as a result of lower sales in
Nevada and Australia. The average realized gold price for the fourth quarter
was $394 per ounce, a 21% increase over the prior year quarter.
For 2003, the Company sold 7,383,600 equity ounces of gold, 3% lower than
2002, largely as a result of the divestiture of non-core operations during
2003. The average realized gold price for 2003 was $366 per ounce, a 17%
increase over 2002.
The Company generated cash from operating activities of $151.2 million in
the fourth quarter, after net working capital increases of $93.3 million. The
increase in fourth quarter working capital was driven by in-circuit inventory
increases and the scheduling of gold shipments. The majority of this increase
in working capital is expected to reverse in the first half of 2004. For
2003, cash generated from operating activities totaled $588.8 million after
utilizing $121.0 million for the settlement of effective gold derivative
instruments classified as cash flow hedges and net working capital increases
of $81.9 million.
Net income for the fourth quarter was impacted by the following:
-- a $30 million ($0.07 per share) non-cash, after-tax loss on an
inherited guarantee of QMC Finance Pty Ltd (QMC) debt;
-- a $10 million ($0.02 per share) after-tax loss on the early
extinguishment of debt;
-- an $18 million ($0.04 per share) non-cash, after-tax impairment charge
at Golden Giant in Canada; and
-- a $72 million ($0.17 per share) tax benefit from the release of
valuation allowances.
These items had the net effect of increasing fourth quarter net income by
$14 million ($0.03 per share).
Net income for the fourth quarter of 2002 was impacted by the following:
-- a $17.9 million ($0.04 per share) net after tax loss on derivative
instruments; and
-- a $21.9 million ($0.05 per share) tax benefit.
Operating Highlights - Fourth Quarter
North America Q4 2003 Q4 2002 2003 2002
Equity gold sales
(000 ozs) 731.9 932.0 2,902.6 3,224.0
Total cash costs
($/ounce)(1) $218 $199 $233 $220
* North American operations sold 731,900 ounces in the fourth quarter,
21% lower than the year ago quarter, due largely to lower sales in
Nevada.
* Nevada operations sold 625,700 ounces in the fourth quarter (-21%) due
to lower grade refractory ores processed, reduced mill throughput due to
increased stripping at the Gold Quarry and Section 30 laybacks, and an
in-process inventory increase. Total cash costs of $221 per ounce
(+11%) were driven by higher labor, power and mine maintenance costs.
* Golden Giant in Canada sold 67,900 ounces in the fourth quarter (-15%)
at total cash costs of $181 per ounce (-7%). Lower cash costs were
driven by changes in the mine plan, which was refocused on eliminating
marginal stopes from the limited remaining mine life. The revised mine
plan, along with higher projected life-of-mine operating costs due to a
stronger Canadian dollar and higher power and labor costs, led to the
impairment charge in the fourth quarter.
* Holloway in Canada sold 15,000 equity ounces in the fourth quarter
(-44%) at total cash costs of $353 per ounce (+52%). Lower sales were
due to lower grades processed as a result of temporary production
development delays. Higher cash costs were a result of lower sales,
higher labor costs and a stronger Canadian dollar.
* La Herradura in Mexico sold 16,900 equity ounces in the fourth quarter
(+8%) at total cash costs of $137 per ounce (-20%). Lower cash costs
were largely due to improved grades.
* Mesquite in California sold 6,400 ounces at total cash costs of $259 per
ounce. Mesquite was sold effective November 7, 2003.
South America Q4 2003 Q4 2002 2003 2002
Equity gold sales
(000 ozs) 351.9 411.3 1,626.4 1,426.3
Total cash costs
($/ounce)(1) $128 $119 $126 $131
* In the fourth quarter, Yanacocha in Peru sold 337,900 equity ounces
(-4%) at total cash costs of $126 per ounce (+13%). Higher cash costs
were driven by increased fuel, labor and royalty costs.
* Kori Kollo in Bolivia sold 14,000 equity ounces (-76%) as a result of
lower grades processed (-36%) due to the cessation of mining activities
in October 2003. The current gold production is being derived from
flushing the leach pads. Total cash costs of $165 per ounce were
unchanged from a year ago.
Australia Q4 2003 Q4 2002 2003 2002
Equity gold sales
(000 ozs) 439.0 513.0 1,889.2 1,684.6
Total cash costs
($/ounce)(1) $231 $190 $236 $191
* Australian operations sold 439,000 equity ounces in the fourth quarter
(-14%), largely attributable to lower sales at the Yandal operations and
at Pajingo. Total cash costs of $231 per ounce were up 22% due to the
stronger Australian dollar, which appreciated by approximately 28% from
the year ago quarter.
* Kalgoorlie sold 95,500 equity ounces (-8%) at total cash costs of $265
per ounce (+30%) in the fourth quarter. Gold production was up 14% due
to a combination of increased mill throughput, higher grades from
positive grade reconciliations and significantly higher recoveries.
* Pajingo sold 71,600 ounces (-18%) at total cash costs of $144 per ounce
(+38%) in the fourth quarter. Gold production was down 5% as lower
throughput offset higher grades.
* Tanami sold 139,300 ounces (+4%) at total cash costs of $244 per ounce
(+13%) in the fourth quarter. Gold production was up 13% as a result of
higher grades processed (+15%).
* Yandal sold 132,600 ounces (-29%) at total cash costs of $240 per ounce
(+17%) in the fourth quarter. Gold production was down 9% as reduced
mill throughput, due to ore hardness, and scheduled mill maintenance at
Jundee more than offset higher grades. In addition, lower production at
Bronzewing as it approaches closure in March 2004, and the sale of
Wiluna on December 4, 2003, contributed to the production decrease.
* Golden Grove sold 28.1 million pounds of copper (+202%) and 41.6 million
pounds of zinc (+39%) at net cash costs of $0.67 (+16%) and $0.14 (-39%)
per pound, respectively, in the fourth quarter. Copper and zinc
production for the fourth quarter were both down compared with the year
ago quarter due to lower grades and recoveries, partially offset by
increased mill throughput.
Batu Hijau
(Indonesia) Q4 2003 Q4 2002 2003 2002
Equity copper sales
(M lbs) 79.1 90.8 343.4 362.3
Equity gold sales
(000 ozs) 66.2 77.8 328.9 278.0
Net cash costs
($/lb Cu)(1) $0.36 $0.30 $0.23 $0.31
* Batu Hijau in Indonesia contributed record equity income of $21.1
million for the fourth quarter, benefiting from a realized copper price
of $1.05 per pound, 36% higher than the year ago quarter.
* Equity copper sales totaled 79.1 million pounds for the fourth quarter
(-13%) at net cash costs of $0.36 per pound (+20%). Copper production
was down 4% due to marginally lower grades and recoveries, but largely
in accordance with the mine plan. Increased costs were due to higher
utilization of the mining fleet, resulting in higher maintenance and
fuel costs, and increased grinding media consumption at the mill.
* As a result of higher metal prices, improved operating and financial
results, and increased life of mine expectations regarding production,
costs and economics, Batu Hijau will begin paying dividends in 2004.
This will result in a decrease in Newmont's reported economic interest
from 56.25% to 52.875%, in recognition of the 6% net economic interest
held by the project's Indonesian shareholder. While the lower economic
interest has been applied to reported 2003 reserves, it will only be
applied with respect to earnings when PT Newmont Nusa Tenggara, the
operator of Batu Hijau, reports positive retained earnings. This is
expected to occur in the second or third quarter of 2004.
Other Operations Q4 2003 Q4 2002 2003 2002
Equity gold sales
(000 ozs) 123.1 169.5 587.4 636.5
Total cash costs
($/ounce)(1) $165 $166 $168 $155
* Zarafshan in Uzbekistan sold 46,200 equity ounces (-25%) at total cash
costs of $144 per ounce (+9%) in the fourth quarter. Production was
down 16% due to lower grades placed on the leach pads (-23%) following
depletion of the higher grade stockpiles.
* Ovacik in Turkey sold 30,500 ounces (-26%) at total cash costs of $144
per ounce (+33%) in the fourth quarter. Production was essentially
unchanged (-3%) as lower tons milled (-18%) were offset by higher grades
(+11%) and higher recoveries (+3%). Increased cash costs were due to an
increase in mining and site support costs.
* Martha in New Zealand sold 35,400 ounces (+6%) at total cash costs of
$143 per ounce (-31%) in the fourth quarter. Gold production increased
25% due to higher grades (+12%), higher throughput (+10%) and improved
recoveries (+3%). Lower cash costs were due to higher production and
increased by-product revenue, more than offsetting the rise in the New
Zealand dollar.
* Minahasa in Indonesia sold 11,000 equity ounces (-67%) at total costs of
$383 per ounce (+48%) in the fourth quarter. Increased cash costs were
due to reduced sales and increased reclamation and closure-related
expenditures. While mining ceased at Minahasa in October 2001, the
processing of stockpiled ore is expected to continue through the second
quarter of 2004.
1. For a reconciliation of total cash costs per ounce or net cash costs
per pound (non-GAAP measures of performance) to costs applicable to
sales calculated and presented under GAAP, please refer to the
Supplemental Information attached.
Other Highlights
Cash Position
Cash and cash equivalents totaled $1.3 billion at the end of 2003,
reflecting net proceeds of $1.0 billion from the November equity offering.
During the fourth quarter, cash was utilized for:
-- the early extinguishment of debt, including related fees and premiums
($309.8 million);
-- additions to property, plant and mine development ($135.0 million); and
-- payment of common stock dividends ($22.1 million).
Debt Reduction
At year-end, the Company's balance sheet reflected outstanding debt of
$1.08 billion, a decrease of $739 million (41%) from year-end 2002. The
Company's cash and cash equivalents exceeded its consolidated debt at the end
of 2003 by $237 million.
On September 22, the Company announced the early redemption of a
subsidiary's $100 million 6% Convertible Subordinated Debentures. The
debentures were fully redeemed on October 29, 2003.
On October 10, the Company announced a tender offer for approximately $177
million of a subsidiary's 8.375% Senior Debentures due 2005. Principal of
approximately $125 million was redeemed on November 13, 2003.
On October 23, the Company announced a tender offer for $90 million of a
subsidiary's 7.5% Notes due 2005. Principal of approximately $70.5 million
was redeemed on November 24, 2003.
Newmont Capital
Portfolio optimization efforts continue. During the quarter, Newmont
Capital:
-- finalized an agreement with Placer Dome for a 25% interest in the
Turquoise Ridge Joint Venture;
-- sold the Mesquite mine in California;
-- sold the Wiluna mine in Western Australia;
-- acquired an interest in a European gold refining and distribution
business to complement Newmont's existing downstream business in
Australia;
-- acquired Moydow's 50% interest in the Ntotoroso property at the Ahafo
project in Ghana;
-- funded a private placement in Southwestern Gold Resources to fund
exploration initiatives; and
-- commenced a drilling program at its Alberta heavy oil project, located
adjacent to EnCana Resources' Christina Lake thermal project.
Newmont Capital also manages the Company's royalty business. For the
quarter, royalty revenues totaled $15.5 million (+21%) on higher gold, oil and
gas prices. For 2003, royalty revenues totaled $56.3 million (+58%).
Project Development & Exploration
The Leeville underground project in Nevada is approximately 45% complete
and is currently on budget and on schedule, with gold production expected in
late 2005. The production and ventilation shafts were 405 feet (24%) and 570
feet (40%), respectively, from surface at year-end.
Also in Nevada, construction work is expected to begin in the first
quarter of 2004 on a bio-flotation circuit for Mill 5 at Carlin, with an
expected start-up in the fourth quarter of 2004.
Development of the Phoenix project in Nevada was approved in December,
with production accelerated by one year to 2006. Phoenix is expected to
deliver annual sales of between 400,000 and 450,000 ounces of gold and 18 to
20 million pounds of copper over an anticipated 15-year mine life. Initial
development costs are estimated at approximately $205 million.
In Ghana, development of the Ahafo project was approved in December
following finalization of the foreign investment agreement. Ahafo is expected
to deliver steady-state annual gold sales of approximately 500,000 ounces,
with higher production in the initial years. Initial development costs are
estimated at approximately $350 million and the contract to construct the
project was awarded in January 2004.
The Company reported record year-end equity gold reserves of 91.3 million
ounces, a 5% increase from the 86.9 million ounces reported at year-end 2002.
Commenting on the exploration success, President Pierre Lassonde said: "We
have said that one of the Company's most valuable assets is its land position
of approximately 60,000 square miles. Our exploration success in 2003, when
we discovered more than 12 million ounces, bears testimony to this."
During 2003, the Company completed a record three million feet (575 miles)
of drilling. Exploration, research and development expenditures of $115.2
million were a 30% increase from 2002. More importantly, the Company added
14.6 million equity ounces to reserves, before depletion and divestments, of
which 84% was generated through exploration and 16% from acquiring the
minority interest at the Ahafo project in Ghana, minority shareholdings at
Tanami and Martha, and a 25% interest in the Turquoise Ridge joint venture in
Nevada. Another 2.8 million ounces of reserve additions were derived from a
higher gold price assumption of $325 per ounce. The largest reserve additions
in 2003 were from the Company's newest region, Ghana, and its oldest, Nevada,
demonstrating the quality of the Company's diversified portfolio of assets.
During the quarter, high-grade intercepts from two core holes at the
Kenyase deposit at Ahafo in Ghana reinforced the potential for additional
mineralization at depth. Positive results throughout the year at the Subenso,
Yamfo Central and Kenyase deposits, as well as at Akyem, contributed to year-
end reserves in Ghana of almost 12 million ounces.
In Nevada, approximately six million ounces of reserve additions have
added significant mine life. Reserves were primarily derived from
development drilling on the edges of the Gold Quarry and Twin Creeks pits,
adding nearly 2 million ounces in each pit. Lone Tree development drilling
contributed over 400,000 reserve ounces and added a year to the mine life to
2006, with residual production in 2007. Results in each case reflect
increased grade and more continuous high grade mineralization. Further
successes are anticipated in each of these pits, with follow-up drilling
planned for 2004. Further, significant high grade discovery holes at Midas,
Chukar Footwall and Genesis will provide further drilling targets for 2004.
In Indonesia, generative exploration and drilling at a satellite copper-
gold prospect near Batu Hijau is underway to delineate identified zones of
copper and gold mineralization. In addition, progress continues on the
feasibility study for the Martabe project on Sumatra.
In Peru, a team has been assembled and work has commenced on feasibility
studies for an oxide mill at Yanacocha and for the large, gold-copper Minas
Conga project.
Given the increased reserves and positive development progress, the
Company has updated its long-term outlook. In general, production estimates
have increased as a result of the addition of Turquoise Ridge, the
acceleration of Phoenix by one year and further mine plan optimization
efforts. The Company expects that production will range between 7.0 million
and 7.5 million ounces per year through 2006, increasing thereafter. The
Company now expects that future total cash costs will range between $210 and
$230 per ounce, with the increase largely attributable to increased Australian
and Canadian dollar exchange rate assumptions and higher energy-related costs.
In general, excluding the impacts of currency movements and energy-related
costs, total cash costs are expected to trend downwards over time as older,
mature operations are closed and lower cost operations, particularly in Ghana,
are brought into production.
2004 Guidance
The Company expects 2004 equity gold sales of between 7.0 million and 7.2
million ounces at total cash costs of between $220 and $230 per ounce.
Increased cash costs are largely attributable to a stronger Australian dollar
assumption of $0.74, higher energy-related consumable costs, lower grades
processed in Nevada (as mine plans are adjusted to reflect higher gold prices)
and at Yanacocha in Peru, and increased royalties and other taxes as a result
of higher assumed gold prices.
Statements of Consolidated Operations and Comprehensive Income
Three Months Ended December 31,
2003 2002
(in thousands, except per share)
Revenues
Sales - gold $773,405 $777,254
Sales - base metals, net 32,441 8,677
Royalties 15,530 12,816
821,376 798,747
Costs and expenses
Costs applicable to sales
(exclusive of depreciation,
depletion and amortization
shown below)
Gold 375,297 436,541
Base metals 14,057 6,050
Depreciation, depletion and amortization 143,108 146,161
Exploration, research and development 32,873 33,175
General and administrative 43,636 36,543
Write-down of long-lived assets 29,884 3,369
Other 19,670 23,207
658,525 685,046
Other income (expense)
Gain (loss) on investments, net 1,773 (212)
Loss on gold commodity derivative
instruments, net (1,866) (25,467)
Loss on extinguishment of debt (14,302) --
Loss on guarantee of QMC debt (30,000) --
Dividends, interest income,
foreign currency exchange and
other income 46,752 16,371
Interest, net (17,208) (30,245)
(14,851) (39,553)
Pre-tax income before minority interest,
equity income (loss) and impairment
of affiliates 148,000 74,148
Income tax benefit 25,628 21,865
Minority interest in income of subsidiaries (42,457) (35,113)
Equity loss and impairment of
Australian Magnesium Corporation -- (601)
Equity income of affiliates 21,960 14,810
Net income applicable to common shares $153,131 $75,109
Net income $153,131 $75,109
Other comprehensive loss, net (6,319) (36,841)
Comprehensive income $146,812 $38,268
Net income per common share,
basic and diluted $0.36 $0.19
Basic weighted average common
shares outstanding 426,498 401,692
Diluted weighted average common
shares outstanding 430,944 403,017
Statements of Consolidated Operations and Comprehensive Income
Years Ended December 31,
2003 2002
(in thousands, except per share)
Revenues
Sales - gold $3,082,936 $2,566,833
Sales - base metals, net 74,820 55,321
Royalties 56,303 35,718
3,214,059 2,657,872
Costs and expenses
Costs applicable to sales (exclusive of
depreciation, depletion and
amortization shown below)
Gold 1,655,989 1,580,347
Base metals 44,273 36,040
Depreciation, depletion and amortization 564,481 505,598
Exploration, research and development 115,238 88,886
General and administrative 130,292 115,252
Write-down of long-lived assets 35,260 3,652
Other 49,506 29,372
2,595,039 2,359,147
Other income (expense)
Gain on investments, net 83,166 47,086
Gain (loss) on gold commodity
derivative instruments, net 22,876 (39,805)
Gain on extinguishment of NYOL bonds, net 114,031 --
Gain on extinguishment of NYOL derivative
liability, net 106,506 --
Loss on extinguishment of debt (33,832) --
Loss on guarantee of QMC debt (30,000) --
Dividends, interest income,
foreign currency exchange
and other income 132,198 39,885
Interest, net (88,579) (129,565)
306,366 (82,399)
Pre-tax income before minority interest,
equity income (loss) and impairment
of affiliates and cumulative effect
of a change in accounting principle 925,386 216,326
Income tax expense (206,950) (19,900)
Minority interest in income of subsidiaries (173,178) (97,442)
Equity loss and impairment of Australian
Magnesium Corporation (119,485) (1,775)
Equity income of affiliates 84,427 53,151
Net income before cumulative effect
of a change in accounting principle 510,200 150,360
Cumulative effect of a change in
accounting principle, net of tax (34,533) 7,701
Net income 475,667 158,061
Preferred stock dividends -- (3,738)
Net income applicable to common shares $475,667 $154,323
Net income $475,667 $158,061
Other comprehensive income (loss), net of tax 86,853 (54,578)
Comprehensive income $562,520 $103,483
Net income before cumulative effect of
a change in accounting principle
per common share, basic $1.24 $0.40
Cumulative effect of change in accounting
principle per common share, basic (0.08) 0.02
Net income per common share, basic $1.16 $0.42
Net income before cumulative effect
of a change in accounting principle
per common share, diluted $1.23 $0.39
Cumulative effect of change in accounting
principle per common share, diluted (0.08) 0.02
Net income per common share, diluted $1.15 $0.41
Basic weighted average common
shares outstanding 410,600 370,940
Diluted weighted average common
shares outstanding 413,723 372,975
Consolidated Balance Sheets
At December 31,
2003 2002
(in thousands)
ASSETS
Cash and cash equivalents $1,314,022 $401,683
Marketable securities 144,711 13,188
Accounts receivable 90,686 82,310
Inventories 225,719 169,324
Stockpiles and ore on leach pads 248,625 328,993
Deferred stripping costs 60,086 32,085
Deferred income tax assets 73,665 51,451
Newmont Australia infrastructure bonds 127,674 --
Other current assets 75,280 34,222
Current assets 2,360,467 1,113,256
Property, plant and mine
development, net 2,347,984 2,287,030
Mineral interests and other
intangible assets, net 1,379,101 1,415,348
Investments 733,977 1,199,583
Deferred stripping costs 30,293 23,302
Long-term stockpiles and ore on leach pads 305,810 199,761
Deferred income tax assets 752,407 761,428
Other long-term assets 97,576 123,112
Goodwill 3,042,557 3,024,576
Total assets $11,050,173 $10,147,396
LIABILITIES
Current portion of long-term debt $190,866 $115,322
Accounts payable 163,164 105,277
Deferred income tax liabilities 18,182 28,469
Derivative instruments 6,074 74,999
Employee related benefits 135,323 114,622
Other current liabilities 320,411 247,652
Current liabilities 834,020 686,341
Long-term debt 886,633 1,701,282
Reclamation and remediation liabilities 362,283 288,536
Deferred revenue from sale of
future production 53,841 53,841
Derivative instruments 7,088 388,659
Deferred income tax liabilities 633,135 656,452
Employee related benefits 203,217 234,103
Other long-term liabilities 338,503 364,376
Total liabilities 3,318,720 4,373,590
Minority interest in subsidiaries 346,518 354,558
STOCKHOLDERS' EQUITY
Total stockholders' equity 7,384,935 5,419,248
Total liabilities and stockholders' equity $11,050,173 $10,147,396
Statement of Consolidated Cash Flows
Three Months Ended December 31,
2003 2002
(in thousands)
Operating activities:
Net income $153,131 $75,109
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation, depletion and amortization 143,108 146,161
Accretion of accumulated
reclamation obligations 5,491 --
Amortization of deferred stripping
costs, net (6,784) 8,436
Deferred income taxes (51,274) (73,606)
Foreign currency exchange (gain) loss (22,437) 11,249
Minority interest, net of dividends (23,221) 10,269
Equity income and impairment
of affiliates, net of dividends (20,687) (8,053)
Write-down of inventories,
stockpiles and ore on leach pads 4,512 6,831
Write-down of long-lived assets 29,884 3,369
(Gain) loss on investments, net (1,773) 212
Loss on gold commodity derivative
instruments, net 1,866 25,467
Loss on extinguishment of debt 14,302 --
Loss on guarantee of QMC debt 30,000 --
(Gain) loss on asset sales and other (11,541) 10,150
(Increase) decrease in operating assets:
Accounts receivable (1,005) 7,102
Inventories, stockpiles and
ore on leach pads (53,703) 2,380
Other assets (11,052) 3,370
Increase (decrease) in
operating liabilities:
Accounts payable and other
accrued liabilities (40,645) 13,258
Derivative instruments (931) (15,817)
Early settlement of derivative
instruments classified as cash
flow hedges -- 1,168
Other liabilities 14,001 (1,891)
Net cash provided by
operating activities 151,242 225,164
Investing activities:
Additions to property, plant and
mine development (135,000) (61,886)
Receipts from joint ventures
and affiliates, net 23,110 --
Proceeds from sale of investments -- 8,658
Early settlement of ineffective
derivative instruments -- (9,199)
Investments in affiliates (13,848) --
Cash consideration for Normandy shares -- (2,186)
Investments in marketable equity
securities and other (13,798) (32,962)
Net cash used in investing activities (139,536) (97,575)
Financing activities:
Proceeds from debt 363 --
Repayments of debt (323,584) (13,949)
Dividends paid on common
and preferred stock (22,064) (12,051)
Proceeds from stock issuance 1,231,903 (618)
Other -- 1
Net cash provided by (used in)
financing activities 886,618 (26,617)
Effect of exchange rate changes on cash (3,713) 8,563
Net change in cash and cash equivalents 894,611 109,535
Cash and cash equivalents at beginning
of period 419,411 292,148
Cash and cash equivalents at end of period $1,314,022 $401,683
Statement of Consolidated Cash Flows
Years Ended December 31,
2003 2002
(in thousands)
Operating activities:
Net income $475,667 $158,061
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation, depletion and amortization 564,481 505,598
Accretion of accumulated reclamation
obligations 22,610 --
Amortization of deferred stripping
costs, net (36,497) 37,195
Deferred income taxes (36,183) (100,291)
Foreign currency exchange (gain) loss (75,670) 1,259
Minority interest, net of dividends 27,228 68,598
Equity loss (income) and impairment
of affiliates, net of dividends 42,467 (35,595)
Write-down of inventories, stockpiles
and ore on leach pads 24,945 44,439
Write-down of long-lived assets 35,260 3,652
Cumulative effect of change in
accounting principle, net 34,533 (7,701)
Gain on investments, net (83,166) (47,086)
(Gain) loss on gold commodity
derivative instruments, net (22,876) 39,805
Gain on extinguishment of
NYOL bonds, net (114,031) --
Gain on extinguishment of NYOL
derivatives liability, net (106,506) --
Loss on extinguishment of debt 33,832 --
Loss on guarantee of QMC debt 30,000 --
Gain on asset sales and other (24,473) (10,103)
(Increase) decrease in operating assets:
Accounts receivable 3,775 24,867
Inventories, stockpiles and
ore on leach pads (72,828) (9,546)
Other assets (5,052) 52,383
Increase (decrease) in
operating liabilities:
Accounts payable and other
accrued liabilities 23,286 (12,216)
Derivative instruments (16,318) (33,202)
Early settlement of derivative
instruments classified as
cash flow hedges (120,993) (11,857)
Other liabilities (14,739) 2,048
Net cash provided by operating activities 588,752 670,308
Investing activities:
Additions to property, plant
and mine development (501,400) (300,057)
Receipts from (advances to)
joint ventures and affiliates, net 39,321 (24,750)
Proceeds from sale of investments 232,190 500,103
Proceeds from the sale of
TVX Newmont Americas 180,000 --
Proceeds from settlement of
cross currency swaps -- 50,816
Early settlement of ineffective
derivative instruments (55,339) (21,056)
Investments in affiliates (70,072) --
Cash consideration for acquisition
of Newmont NFM minority interest (11,195) --
Cash consideration for Normandy shares -- (461,717)
Cash received from acquisitions,
net of transaction costs -- 371,417
Investments in marketable
equity securities and other (15,283) (2,646)
Net cash (used in) provided
by investing activities (201,778) 112,110
Financing activities:
Proceeds from debt 492,841 493,371
Repayments of debt (1,162,167) (1,040,807)
Dividends paid on common
and preferred stock (70,759) (49,982)
Proceeds from stock issuances 1,286,751 67,346
Other -- (3)
Net cash provided by (used in)
financing activities 546,666 (530,075)
Effect of exchange rate changes on cash (21,301) (91)
Net change in cash and cash equivalents 912,339 252,252
Cash and cash equivalents at beginning of year 401,683 149,431
Cash and cash equivalents at end of year $1,314,022 $401,683
Operating Statistics Summary
North America South America Australia
Three months ended December 31, 2003 2002 2003 2002 2003 2002
Production Costs Per Ounce:
Direct mining and production
costs $229 $179 $125 $119 $217 $202
Capitalized mining & other (15) 14 (3) (4) (6) (25)
Cash operating costs 214 193 122 115 211 177
Royalties and production
taxes 4 6 6 4 20 13
Total cash costs 218 199 128 119 231 190
Reclamation and mine closure
costs (7) 4 4 5 (1) 5
Total costs applicable to
sales 211 203 132 124 230 195
Non-cash inventory adjustment - - - - - 22
Depreciation and amortization 65 47 60 55 58 52
Depreciation and amortization
adjustment - - - - - 3
Total production costs $276 $250 $192 $179 $288 $272
Consolidated gold sales (000
ozs.) 731.9 932.0 674.0 754.4 439.0 535.1
Equity gold sales (000 ozs.) 731.9 932.0 351.9 411.3 439.0 513.0
Equity
Other (1) Investments Total
and Other
(2) (3)
Three months ended December 31, 2003 2002 2003 2002 2003 2002
Production Costs Per Ounce:
Direct mining and
production costs $182 $165 - - $199 $171
Capitalized mining &
other (22) (2) - - (10) -
Cash operating costs 160 163 - - 189 171
Royalties and production
taxes 5 3 - - 8 7
Total cash costs 165 166 - - 197 178
Reclamation and mine
closure costs 7 13 - - (1) 5
Total costs applicable to
sales 172 179 - - 196 183
Non-cash inventory
adjustment - 15 - - - 7
Depreciation and
amortization 78 54 - - 63 50
Depreciation and
amortization adjustment - 15 - - - 2
Total production costs $250 $263 - - $259 $242
Consolidated gold sales (000
ozs.) 123.8 171.6 3.0 3.3 1,971.7 2,396.4
Equity gold sales (000 ozs.) 123.1 169.5 69.2 189.9 1,715.1 2,215.7
Average realized price per
equity ounce $394 $325
Copper Summary (4)
Equity copper production
(millions of lbs.) 92.9 103.7
Equity copper sales (millions
of lbs.) 107.2 98.9
Net cash cost per equity
pound $0.44 $0.32
Average realized price per
pound $1.03 $0.76
(1) Other includes Ovacik (Turkey), Zarafshan (Uzbekistan),
Minahasa (Indonesia) and Martha (New Zealand).
(2) Equity investments comprise Batu Hijau.
(3) Includes 3,000 and 3,300 ounces from the wholly-owned Golden
Grove zinc/copper mine in 2003 and 2002, respectively.
(4) Represents Batu Hijau and Golden Grove.
North America South America Australia
Year ended December 31, 2003 2002 2003 2002 2003 2002
Production Costs Per
Ounce:
Direct mining and
production costs $244 $205 $125 $130 $224 $186
Capitalized
mining & other (17) 9 (4) (3) (3) (6)
Cash operating
costs 227 214 121 127 221 180
Royalties and
production taxes 6 6 5 4 15 11
Total cash costs 233 220 126 131 236 191
Reclamation and
mine closure
costs 1 2 3 3 1 6
Total costs
applicable to sales 234 222 129 134 237 197
Non-cash
inventory
adjustment - - - - - 9
Depreciation and
amortization 61 50 60 55 58 49
Depreciation and
amortization
adjustment - (1) - - - 10
Total production
costs $295 $271 $189 $189 $295 $265
Consolidated gold
sales (000 ozs.) 2,902.6 3,224.0 3,038.8 2,575.4 1,906.5 1,759.0
Equity gold sales
(000 ozs.) 2,902.6 3,224.0 1,626.4 1,426.3 1,889.2 1,684.6
Equity
Other (1) Investments Total
and Other
(2) (3)
Year ended December 31, 2003 2002 2003 2002 2003 2002
Production Costs Per Ounce:
Direct mining and
production costs $181 $159 - - $205 $181
Capitalized mining &
other (18) (7) - - (10) 1
Cash operating costs 163 152 - - 195 182
Royalties and production
taxes 5 3 - - 8 7
Total cash costs 168 155 - - 203 189
Reclamation and mine
closure costs 3 5 - - 2 3
Total costs applicable to
sales 171 160 - - 205 192
Non-cash inventory
adjustment - 6 - - - 3
Depreciation and
amortization 72 51 - - 61 51
Depreciation and
amortization adjustment - 18 - - - 4
Total production costs $243 $235 - - $266 $250
Consolidated gold sales (000
ozs.) 594.6 645.9 13.4 13.6 8,455.9 8,217.9
Equity gold sales (000 ozs.) 587.4 636.5 378.0 660.3 7,383.6 7,631.7
Average realized price per
equity ounce $366 $313
Copper Summary (4)
Equity copper production
(millions of lbs.) 414.5 430.9
Equity copper sales
(millions of lbs.) 417.7 407.0
Net cash cost per equity
pound $0.30 $0.34
Average realized price per
pound $0.86 $0.73
(1) Other includes Ovacik (Turkey), Zarafshan (Uzbekistan),
Minahasa (Indonesia) and Martha (New Zealand).
(2) Equity investments comprise Batu Hijau (and TVX Newmont
Americas and Echo Bay Mining Limited through January 31, 2003).
(3) Includes 13,400 and 13,600 ounces from the wholly-owned Golden
Grove zinc/copper mine in 2003 and 2002, respectively.
(4) Represents Batu Hijau and Golden Grove.
2004 Guidance
Equity Gold Total
Sales Cash Costs
(000 oz) ($/oz)
North America
Nevada 2,600 $250
Golden Giant 150 $320
Holloway 90 $305
La Herradura 70 $200
Sub-total 2,910 $255
South America
Yanacocha 1,580 $135
Kori Kollo 20 $280
Sub-total 1,600 $135
Australia
Kalgoorlie 430 $315
Pajingo 275 $185
Tanami 660 $270
Yandal 350 $295
Sub-total 1,715 $275
Other
Martha 120 $225
Zarafshan 180 $175
Minahasa 50 $330
Ovacik 150 $210
Sub-total 500 $215
Equity Investments
Batu Hijau 360 --
TOTAL 7,000-7,200 $220-$230
Equity
Copper & Net
Zinc Sales Cash Costs
(million lbs) ($/lb)
Batu Hijau - Copper 360-400 $0.24-$0.28
Golden Grove - Copper 50-60 $0.66-$0.70
Golden Grove - Zinc 150-160 $0.34-$0.38
Financial (in millions, except tax rate)
Royalty revenue $45-$50
Depreciation, depletion & amortization $580-$600
Exploration, research and development $140-$150
General and administrative $100-$110
Net interest expense $40-$50
Tax rate (assuming $400/oz gold) 25%-30%
Capital expenditures $700-$750
Sensitivities
An annualized $10 change in the gold price changes annual net income by
approximately $50 million, assuming all other factors remain constant.
An annualized $10 change in the gold price changes annual cash generated
by operating activities by approximately $55 million, assuming all other
factors remain constant.
An annualized $0.01 change in the Australian dollar exchange rate changes
total cash costs (on a Company-wide basis) by $0.85 per ounce.
SOURCE Newmont Mining Corporation
-0- 02/04/2004
/CONTACT: investors, Russell Ball, +1-303-837-5927,
Russell.ball@newmont.com, Wendy Yang, +1-303-837-6141, wendy.yang@newmont.com,
or media, Doug Hock, +1-303-837-5812, doug.hock@newmont.com, all of Newmont
Mining Corporation/
/FIRST AND FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW/
/Web site: http://www.melloninvestor.com /
/Web site: http://www.newmont.com /
(NEM NMC.)
CO: Newmont Mining Corporation
ST: Colorado, Ontario
IN: MNG
SU: ERN CCA