Exhibit 99.1
Newmont Mining Corporation Announces First Quarter Income Before Cumulative
Effect of a Change in Accounting Principle of $133.8 Million ($0.30 Per Share)
DENVER, April 28 /PRNewswire-FirstCall/ -- Newmont Mining Corporation
(NYSE: NEM) today announced first quarter income before the cumulative effect
of a change in accounting principle of $133.8 million ($0.30 per share). This
compares to $151.8 million ($0.38 per share) for the first quarter of 2003,
which included a number of items that generated net gains, primarily related
to the acquisition and integration of Franco-Nevada and Normandy Mining.
During the quarter, Newmont had equity gold sales of 1.81 million ounces at
total cash costs of $231 per equity ounce. A combination of higher gold
prices and solid operating performance resulted in net cash provided by
operating activities of $328.2 million for the quarter, an increase of 141%
from the year ago quarter.
Wayne W. Murdy, Chairman and Chief Executive Officer, said: "Our first
quarter operating results reflect higher margins and strong cash flows,
demonstrating our leverage to higher gold prices. We will continue to focus
our efforts on controlling costs, particularly in Nevada, but we also
recognize that higher gold prices bring opportunities to mine additional
lower-grade, higher-cost ounces that are value-accretive to Newmont
shareholders."
First Quarter
2004 2003
Financial (in millions, except per share)
Revenues $1,135.4 $748.5
Net cash provided by operating activities $328.2 $136.0
Income before cumulative effect $133.8 $151.8
Net income applicable to common shares $86.7 $117.3
Income per common share before
cumulative effect $0.30 $0.38
Net income per common share $0.20 $0.29
Operating
Equity gold sales (000 ounces) (1) 1,812.6 1,780.5
Average realized price ($/ounce) $413 $351
Total cash costs ($/ounce) (2) $231 $201
Total production costs ($/ounce) (2) $299 $261
1. Equity gold sales ounces are those attributable to Newmont's
ownership or economic interest.
2. For a reconciliation of total cash costs per ounce and per pound and
total production costs per ounce and per pound (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
First quarter net income applicable to common shares was $86.7 million
($0.20 per share), compared with net income of $117.3 million ($0.29 per
share) for the first quarter of 2003.
Net income for the first quarter of 2004 was impacted by a $47.1 million
($0.10 per share) non-cash, after-tax charge to recognize the cumulative
effect of a change in accounting principle to reflect conforming accounting
policies upon consolidation of Batu Hijau (discussed below).
Net income for the first quarter of 2003 was impacted by the following:
-- a $34.5 million ($0.09 per share) non-cash, after-tax charge to
recognize the cumulative effect of a change in accounting principle
to reflect the implementation of FAS 143, "Accounting for Asset
Retirement Obligations";
-- a $42.2 million ($0.10 per share) non-cash, after-tax gain for the
change in fair value of gold derivative instruments that did not
qualify as "effective hedges" and were thus recognized in income;
-- a net $68.0 million ($0.17 per share) non-cash, after-tax gain on the
exchange of the Company's 45.7% equity investment in Echo Bay for a
13.8% interest in Kinross Gold;
-- a $13.0 million ($0.03 per share) after-tax loss on the
extinguishment of debt; and
-- miscellaneous write-downs and legacy-site reclamation accruals
totaling $20.5 million ($0.05 per share) after-tax, including a
write-down of $11.0 million ($0.03 per share) relating to the
Company's equity investment in Australian Magnesium Corporation.
These items had the net effect of increasing first quarter 2003 net income
by $42.2 million ($0.10 per share).
For the first quarter of 2004, the Company sold 1,812,600 equity ounces of
gold, 2% higher than the prior year quarter. The average realized price was
$413 per ounce, an 18% increase over the prior year quarter.
The Company generated net cash from operating activities of $328.2 million
in the first quarter, after net working capital increases of $47.6 million,
significantly higher than the $136.0 million generated in the first quarter of
2003. Approximately $45 million of the increase was attributable to the
consolidation of Batu Hijau (discussed below).
In December 2003, the FASB issued Financial Interpretation No. 46R,
"Consolidation of Variable Interest Entities," pursuant to which the Company
consolidated Batu Hijau effective January 1, 2004. Previously, the Company
had accounted for its investment in Batu Hijau using the equity method of
accounting.
Upon consolidation, certain changes were necessary to conform Batu Hijau's
accounting policies to Newmont's accounting policies:
-- a change from units-of-production depreciation of processing plant
and mining facilities to straight-line depreciation of such
facilities (a non-cash, after-tax charge of $15.1 million, $0.03 per
share); and
-- a change from allocating costs to stockpile inventories based on
mining costs per ton to allocating costs based on recoverable pounds
of copper equivalent (a non-cash, after-tax charge of $32.0 million,
$0.07 per share).
In addition, effective January 1, 2004, the Company commenced reporting
cash operating costs at Batu Hijau using co-product accounting because it
believes this to be a more meaningful measure of performance for a poly-
metallic orebody such as Batu Hijau.
The Supplemental Information section of this release provides summarized
financial information reflecting the impact of consolidating Batu Hijau on
Newmont's consolidated income statement and balance sheet as of March 31,
2004.
Operating Highlights -- First Quarter
North America Q1 Q1
2004 2003
Equity gold sales (000 ozs) 706.6 747.4
Total cash costs ($/ounce) (1) $281 $226
* Nevada operations sold 617,400 equity ounces in the first quarter
(-2%) due to a decline in average mill grade (-16%) and unscheduled
down time at Mill 6, partially offset by production from Mill 5, which
was shut down in the first quarter of 2003. Total cash costs of $287
per equity ounce (+27%) were negatively impacted by higher labor
costs, higher fuel costs and higher unscheduled maintenance costs.
Production and unit costs were adversely impacted by weather
conditions in Eastern Nevada in January and February, which caused a
shortfall in open pit ore mined at the Carlin and Pete pits, and
resulted in the processing of lower-grade stockpiles during the
quarter to make up for the shortfall.
In April 2004, the Company entered into an agreement with Barrick to
toll mill roaster feed through Barrick's roaster in Nevada. Annual
tonnages processed under this agreement are expected to vary between
250,000 and 1 million tons. The agreement allows both companies to
realize operating synergies and, in the case of Newmont, to process
stockpiled material more economically.
* Golden Giant in Canada sold 52,700 ounces in the first quarter (-19%)
at total cash costs of $245 per ounce (-2%). Lower sales were
primarily due to a 33% decrease in mill throughput due to stope
sequencing and reduced mining faces at this mature mine, partially
offset by a 7% increase in ore grade. Lower operating costs were
offset by the appreciation of the Canadian dollar.
* Holloway in Canada sold 19,200 equity ounces in the first quarter
(+6%) at total cash costs of $322 per equity ounce (+10%). Higher
sales were driven by a 14% increase in ore grade, with increased cash
costs primarily driven by a stronger Canadian dollar.
* La Herradura in Mexico sold 17,300 equity ounces in the first quarter
(+4%) at unchanged total cash costs of $128 per equity ounce.
South America Q1 Q1
2004 2003
Equity gold sales (000 ozs) 417.5 386.9
Total cash costs ($/ounce) (1) $135 $130
* Yanacocha in Peru sold 410,300 equity ounces in the first quarter
(+22%) at total cash costs of $133 per equity ounce (+7%). Increased
sales were primarily attributable to inventory drawdowns, partially
offset by lower grades (-23%) and fewer tons placed on the leach pads
(-15%), in accordance with the mine plan.
* Kori Kollo in Bolivia sold 7,200 equity ounces (-86%). Open-pit
mining activities were completed in October 2003, with gold production
now derived from flushing the leach pads. Total cash costs of $266
per equity ounce were 55% higher than the year ago quarter on lower
unit sales.
Australia Q1 Q1
2004 2003
Equity gold sales (000 ozs) 521.3 407.8
Total cash costs ($/ounce) (1) $251 $235
* The Australian operations had a strong first quarter, selling
521,300 equity ounces (+28%), largely attributable to higher sales at
Kalgoorlie and Tanami. Total cash costs of $251 per equity ounce
were up 7% from the year ago quarter. In general, lower operating
costs were offset by the appreciation of the Australian dollar.
* Kalgoorlie sold 121,900 equity ounces (+37%) at total cash costs of
$300 per equity ounce (+21%) in the first quarter. Increased sales
were primarily due to inventory drawdowns, a 2% higher mill recovery
rate and 9% higher grade due to greater volumes of higher-grade
underground ore processed. Increased cash costs were attributable to
appreciation of the Australian dollar and higher mining costs at the
Mt. Charlotte underground mine and the Superpit. Higher processing
costs were due in part to increased maintenance costs associated with
SAG mill repairs in January.
* Pajingo sold 75,200 ounces (+2%) at total cash costs of $194 per ounce
(+72%) in the first quarter. Higher sales reflected inventory
drawdowns, partially offset by lower grade (-13%) and lower tons
milled (-4%). Increased cash costs were due to a combination of the
stronger Australian dollar and higher mining costs.
* Tanami sold 183,100 ounces (+74%) at total cash costs of $256 per
ounce, unchanged from the year ago quarter. Sales increased primarily
due to a full quarter of 100% ownership, increased ore grade (+24%)
and a drawdown of inventories.
* Yandal sold 141,100 ounces (+1%) at total cash costs of $231 per ounce
(-16%) in the first quarter. Increased sales reflected 26% higher
grade at Jundee from Westside underground ore, partially offset by the
Wiluna divestiture in December 2003 and lower throughput at Bronzewing
as a result of the closure of the mine during the first quarter.
Lower cash costs largely reflect the divestiture of Wiluna and reduced
operations at Bronzewing.
* Golden Grove sold 2.3 million pounds of copper (-89%) and 45.4 million
pounds of zinc (+82%) at cash costs of $0.46 (-13%) and $0.38 (+23%)
per pound, respectively, in the first quarter. Reduced copper sales
were primarily due to mine plan sequencing that delivered more zinc
ore in the quarter, and the timing of shipments.
Batu Hijau (Indonesia) Q1 Q1
2004 2003
Equity copper sales (M lbs) 73.8 69.8
Equity gold sales (000 ozs) 56.4 54.3
Total cash costs ($/lb Cu) (1, 2) $0.66 $0.42
Total cash costs ($/oz Au) (1, 2) $179 $186
* Effective January 1, 2004, the Company began consolidating Batu Hijau.
In addition, during the first quarter of 2004, the Company changed to
co-product cost accounting for copper and gold whereby production
costs are allocated in proportion to the sales revenue generated by
each product.
* Batu Hijau sold 73.8 million equity pounds of copper in the first
quarter (+6%) at total cash costs of $0.66 per pound (+57%).
Increased copper sales were primarily attributable to higher mill
throughput (+4%) and inventory increases in the year ago quarter as a
result of the timing of shipments, partially offset by lower
recoveries and lower grades, largely in accordance with the mine plan.
Higher operating costs were incurred as a result of increased grinding
costs due to harder ores, higher mining rates and higher mine
maintenance costs as eight additional haul trucks were added to the
fleet.
In general, production in the first and fourth quarters is lower than
the second and third quarters due to the sequencing of increased
stripping, and thus lower grade ore delivery to the concentrator,
during the rainy season.
* Batu Hijau recorded an average realized copper price for the first
quarter of $1.50 per pound, reflecting an average spot price of
$1.24 per pound and provisional pricing and timing and other
miscellaneous adjustments of $0.26 per pound.
* Batu Hijau sold 56,400 equity ounces of gold, largely unchanged from
the year ago quarter as higher throughput and recoveries partially
offset lower grades. Total cash costs for the quarter were $179 per
equity ounce.
* As discussed in last quarter's release, Batu Hijau is expected to
begin paying dividends in 2004 and this will result in a decrease in
Newmont's reported economic interest from 56.25% to 52.875%, in
recognition of the economic interest held by the project's Indonesian
shareholder. While the lower economic interest was applied to
reported 2003 reserves, it will only be applied to earnings when Batu
Hijau reports positive retained earnings. This is expected to occur
in the second half of 2004.
Other Operations (3) Q1 Q1
2004 2003
Equity gold sales (000 ozs) 110.6 146.4
Total cash costs ($/ounce) (1) $215 $169
* Zarafshan in Uzbekistan sold 55,900 equity ounces (-7%) at total cash
costs of $148 per ounce (+4%) in the first quarter. Lower sales
reflected an increase in inventory due to the timing of shipments.
* Ovacik in Turkey sold 5,900 ounces (-83%) at total cash costs of
$302 per ounce (+140%) in the first quarter. Lower sales reflected
recently enacted legislation that eliminates refunds of value added
taxes relating to gold dore exports. Ovacik has inventoried
approximately 30,000 ounces while it attempts to address this issue.
Increased costs reflect lower unit sales, lower mill throughput (-9%)
and lower grade (-12%), partially offset by higher recoveries.
* Martha in New Zealand sold 22,600 ounces (+15%) at total cash costs of
$251 per ounce (+15%) in the first quarter. Increased sales reflect
higher mill throughput (+26%) and inventory draw downs, partially
offset by lower grade (-31%).
* Minahasa in Indonesia sold 26,200 equity ounces (-17%) at total cash
costs of $307 per equity ounce (+30%) in the first quarter. Increased
unit 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 third quarter of 2004.
1. For a reconciliation of total cash costs per ounce and per pound and
total production costs per ounce and per pound (non-GAAP measures of
performance) to costs applicable to sales calculated and presented
under GAAP, please refer to the Supplemental Information attached.
2. Reflects a change to co-product accounting.
3. Excludes Batu Hijau gold sales, which are discussed separately above.
Other Highlights
Cash Position
At the end of the first quarter, cash and cash equivalents totaled
$1.55 billion. During the first quarter, cash was utilized for:
-- the repayment of long-term debt ($22.3 million);
-- additions to property, plant and mine development ($167.9 million);
and
-- payment of common stock dividends ($22.1 million).
Debt
At the end of the first quarter, the Company's balance sheet reflected
total outstanding debt of $1.91 billion. The increase in debt during the
first quarter reflects the consolidation of Batu Hijau, which increased
consolidated debt by approximately $849 million. Of this amount, $740 million
is project finance debt, which is non-recourse to Newmont, with the balance of
$109 million reflecting subordinated debt from an affiliate of Sumitomo
Corporation, which is also non-recourse to Newmont.
Newmont Capital
Portfolio optimization efforts continue. During the first quarter,
Newmont Capital entered into several small transactions, including:
-- the acquisition of the La Carpa copper-gold property in Peru, which
is located adjacent to the existing Yanacocha land package;
-- the acquisition of a further 5% interest in the Martabe project in
Indonesia, with an option to acquire the remaining 5% minority
interest in 2005;
-- the completion of this season's drilling program at the Alberta heavy
oil project; and
-- the sale, subject to governmental approvals, of the non-core Perama
asset in Greece.
Newmont Capital also manages the Company's royalty and equity portfolios.
For the quarter, royalty revenues totaled $13.2 million (-9%), in-line with
expectations.
Project Development & Exploration
The Leeville underground project in Nevada is currently on schedule for
initial gold production in late 2005. The production and ventilation shafts
were 780 feet (43%) and 1,006 feet (72%), respectively, from surface at the
end of the quarter. The drift from the Carlin East underground mine to the
Leeville ventilation shaft was approximately 90% complete at the end of the
quarter.
At Phoenix, the engineering, procurement and construction management
(EPCM) contract was awarded in March and orders have been placed for long
lead-time items. The project remains on schedule for initial gold production
in 2006.
At Ahafo in Ghana, the EPCM contract was awarded and long lead-time
equipment tenders are being released. The initial construction contract for
site access and camp infrastructure has been awarded and the contractors are
mobilizing to site. Meetings with stakeholders in regard to crop compensation
and land acquisition are ongoing. The project remains on schedule for initial
gold production in 2006.
During the first quarter of 2004, Newmont completed approximately 720,000
feet of exploration drilling, using up to 73 drill rigs. Exploration,
research and development expenditures of $36.7 million were 71% higher than
the year ago quarter. The guidance for exploration, research and development
expenditures for 2004 was increased to between $160 million and $170 million,
reflecting increased regional exploration expenses, particularly at Yanacocha,
and the consolidation of Batu Hijau's exploration expenditures.
2004 Guidance
The Company reaffirmed 2004 equity gold sales guidance of between
7.0 million and 7.2 million ounces. The Company now expects total cash costs
of between $225 and $235 per ounce, largely attributable to higher cash costs
in Nevada in the first quarter and ongoing cost pressures in respect of
consumable and energy-related costs.
Statements of Consolidated Income
Three Months Ended
March 31,
2004 2003
(unaudited, in thousands,
except per share)
Revenues
Sales - gold, net $934,651 $714,556
Sales - base metals, net 187,626 19,433
Royalties 13,162 14,480
1,135,439 748,469
Costs and expenses
Costs applicable to sales (exclusive of
depreciation, depletion and amortization
shown separately below)
Gold 501,549 399,009
Base metals 73,025 15,362
Depreciation, depletion and amortization 182,024 130,593
Exploration, research and development 36,674 21,472
General and administrative 27,158 26,410
Other 5,927 22,124
826,357 614,970
Other income (expense)
Gain on investments, net -- 85,318
Gain on derivative instruments, net 549 55,025
Loss on extinguishment of debt -- (19,530)
Dividends, interest income, foreign
currency exchange and other income 13,875 30,963
Interest expense, net of capitalized
interest of $2,352 and $1,290,
respectively (25,502) (29,946)
(11,078) 121,830
Pre-tax income before minority interest,
equity income, impairment of affiliates
and cumulative effect of a change in
accounting principle 298,004 255,329
Income tax expense (86,632) (62,563)
Minority interest in income of subsidiaries (79,057) (37,789)
Equity loss and impairment of
Australian Magnesium Corporation -- (11,727)
Equity income of affiliates 1,504 8,538
Income before cumulative effect of a
change in accounting principle 133,819 151,788
Cumulative effect of a change in
accounting principle, net of tax of
$25,382 and $11,188, respectively (47,138) (34,533)
Net income applicable to common shares $86,681 $117,255
Income per common share before
cumulative effect of a change in
accounting principle, basic and diluted $0.30 $0.38
Cumulative effect of a change in
accounting principle per common
share, basic and diluted (0.10) (0.09)
Net income per common share,
basic and diluted $0.20 $0.29
Basic weighted average common shares
outstanding 442,535 401,890
Diluted weighted average common shares
outstanding 446,638 404,219
Cash dividends declared per
common share $0.05 $0.04
Consolidated Balance Sheets
March 31, December 31,
2004 2003
(unaudited, in thousands)
ASSETS
Cash and cash equivalents $1,548,606 $1,314,022
Marketable securities and other
short-term investments 269,241 274,593
Trade receivables 139,328 20,055
Accounts receivable 75,654 70,631
Inventories 282,678 225,719
Stockpiles and ore on leach pads 248,242 248,625
Deferred stripping costs 78,745 60,086
Deferred income tax assets 182,086 73,665
Other current assets 130,560 100,280
Current assets 2,955,140 2,387,676
Property, plant and mine development, net 3,917,785 2,347,984
Mineral interests and other intangible
assets, net 1,357,843 1,379,101
Investments 24,422 733,977
Deferred stripping costs 36,488 30,293
Long-term stockpiles and ore on leach pads 490,938 305,810
Deferred income tax assets 766,841 752,408
Other long-term assets 177,854 95,367
Goodwill 3,084,686 3,042,557
Total assets $12,811,997 $11,075,173
LIABILITIES
Current portion of long-term debt $380,874 $190,866
Accounts payable 216,147 163,164
Employee related benefits 114,649 136,301
Other current liabilities 477,932 368,689
Current liabilities 1,189,602 859,020
Long-term debt 1,526,879 886,633
Reclamation and remediation liabilities 405,725 362,283
Deferred revenue from sale of
future production 53,841 53,841
Deferred income tax liabilities 734,951 633,135
Employee related benefits 252,114 253,726
Deferred stripping credits 76,969 --
Other long-term liabilities 357,521 295,082
Total liabilities 4,597,602 3,343,720
Minority interest in subsidiaries 741,750 346,518
STOCKHOLDERS' EQUITY
Total stockholders' equity 7,472,645 7,384,935
Total liabilities and stockholders' equity $12,811,997 $11,075,173
Statement of Consolidated Cash Flows
Three Months Ended March 31,
2004 2003
(unaudited, in thousands)
Operating activities:
Net income $86,681 $117,255
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 182,024 130,593
Accretion of accumulated reclamation
obligations 6,829 5,744
Amortization of deferred stripping
costs, net (15,170) (6,362)
Deferred income taxes 22,569 (35,400)
Foreign currency exchange loss (gain) 2,282 (27,769)
Minority interest, net of dividends 49,867 37,789
Equity loss (income) and impairment
of affiliates, net of dividends (375) 8,514
Write-downs of inventories, stockpiles
and ore on leach pads 5,123 7,688
Cumulative effect of a change
in accounting principle, net of tax 47,138 34,533
Gain on investments, net -- (85,318)
Gain on derivative instruments, net (549) (55,025)
Loss on extinguishment of debt -- 19,530
Gain on sale of assets and other (10,610) (5,623)
(Increase) decrease in operating assets:
Accounts receivable (58,624) 5,855
Inventories, stockpiles and
ore on leach pads 23,389 (23,480)
Other assets (15,926) (1,991)
Increase (decrease) in operating
liabilities:
Accounts payable and other
accrued liabilities 2,506 61,018
Derivative instruments 1,244 (17,328)
Early settlement of derivative
instruments classified as cash flow
hedges -- (32,779)
Other liabilities (181) (1,448)
Net cash provided by operating activities 328,217 135,996
Investing activities:
Additions to property, plant and
mine development (167,874) (81,311)
Investments in affiliates -- (56,224)
Cash recorded on consolidation
of Batu Hijau 82,203 --
Proceeds from the sale of
TVX Newmont Americas -- 170,625
Early settlement of ineffective
derivative instruments (290) (4,097)
Proceeds from asset sales and other 11,114 2,381
Net cash (used in) provided by
investing activities (74,847) 31,374
Financing activities:
Repayment of long-term debt (22,269) (182,787)
Dividends paid on common (22,147) (16,089)
Proceeds from stock issuance 19,029 934
Other 8,504 --
Net cash used in financing activities (16,883) (197,942)
Effect of exchange rate changes on cash (1,903) 9,205
Net change in cash and cash equivalents 234,584 (21,367)
Cash and cash equivalents at
beginning of period 1,314,022 401,683
Cash and cash equivalents at end of period $1,548,606 $380,316
Supplemental information:
Interest paid, net of amounts capitalized $20,309 $29,557
Income taxes paid $48,147 $21,560
Operating Statistics Summary
North America South America Australia
Three Months Ended
March 31, 2004 2003 2004 2003 2004 2003
Production Costs
Per Ounce:
Direct mining
and production
costs $307 $234 $136 $130 $240 $222
Capitalized
mining and
other (33) (17) (7) (4) (4) 1
Cash operating
costs 274 217 129 126 236 223
Royalties and
production taxes 7 9 6 4 15 12
Total cash
costs (4) 281 226 135 130 251 235
Reclamation and
mine closure
costs 2 3 3 4 2 2
Total costs
applicable to
sales 283 229 138 134 253 237
Depreciation and
amortization 58 56 72 54 67 60
Total production
costs (4) $341 $285 $210 $188 $320 $297
Consolidated
gold sales
(000 ounces) 741.8 747.4 807.2 711.6 521.3 425.2
Equity gold sales
(000 ounces) 706.6 747.4 417.5 386.9 521.3 407.8
Average realized
price per equity
ounce
Other (1) Equity Investments Total
and Other (2)(3)
Three Months Ended
March 31, 2004 2003 2004 2003 2004 2003
Production Costs
Per Ounce:
Direct mining
and production
costs $217 $161 -- -- $240 $200
Capitalized
mining and
other (19) 4 -- -- (17) (8)
Cash operating
costs 198 165 -- -- 223 192
Royalties and
production taxes 5 4 -- -- 8 9
Total cash
costs (4) 203 169 -- -- 231 201
Reclamation and
mine closure
costs 2 2 -- -- 3 3
Total costs
applicable to
sales 205 171 -- -- 234 204
Depreciation and
amortization 71 65 -- -- 65 57
Total production
costs (4) $276 $236 -- -- $299 $261
Consolidated
gold sales
(000 ounces) 212.5 149.8 0.2 2.0 2,283.0 2,036.0
Equity gold sales
(000 ounces) 167.0 146.4 0.2 92.0 1,812.6 1,780.5
Average realized
price per
equity ounce $413 $351
Copper Summary (5)
Equity copper
production
(000 pounds) 82,906 99,420
Equity copper
sales
(000 pounds) 76,084 91,137
Total cash cost
per equity pound $0.65 $0.53
Average realized
price per pound $1.50 $0.84
(1) Other includes Batu Hijau (Indonesia), Ovacik (Turkey), Zarafshan
(Uzbekistan), Minahasa (Indonesia) and Martha (New Zealand).
(2) Equity investments comprise TVX Newmont Americas and Echo Bay Mining
Limited.
(3) Includes 200 and 2,000 ounces from the wholly-owned Golden Grove
zinc/copper mine in 2004 and 2003, respectively.
(4) For a reconciliation of total cash costs and total production costs
per ounce (non-GAAP measures of performance) to costs applicable to
sales calculated and presented under GAAP, please refer to the
Supplemental Information attached.
(5) Represents both Batu Hijau and Golden Grove except total cash cost
and average realized price per equity pound for 2003 are only
Golden Grove.
2004 Guidance
Equity Gold Total
Sales Cash Costs
(000 oz) ($/oz)
North America
Nevada 2,600 $265
Golden Giant 155 $310
Holloway 85 $330
La Herradura 70 $170
Sub-total 2,910 $267
South America
Yanacocha 1,570 $135
Kori Kollo 20 $325
Sub-total 1,590 $137
Australia
Kalgoorlie 440 $315
Pajingo 260 $205
Tanami 660 $275
Yandal 365 $280
Sub-total 1,725 $276
Other
Batu Hijau 360 $160
Martha 120 $235
Zarafshan 190 $170
Minahasa 50 $300
Ovacik 160 $190
Sub-total 880 $188
TOTAL 7,000 - 7,200 $225 - $235
Equity
Copper & Total
Zinc Sales Cash Costs
(million lbs) ($/lb)
Batu Hijau - Copper 370 $0.60
Golden Grove - Copper 50 $0.83
Golden Grove - Zinc 150 $0.41
Financial (in millions, except tax rate) (1)
Royalty revenue $48-$50
Depreciation, depletion & amortization $720-$740
Exploration, research and development $160-$170
General and administrative $100-$110
Interest expense, net $100-$105
Tax rate (assuming $400/oz gold) 25% - 30%
Capital expenditures $750-$800
Notes: 1. Guidance now includes 100% of Batu Hijau, effective
January 1, 2004.
Sensitivities
An annualized $10 change in the gold price changes annual net income by
approximately $50 million and cash generated by operating activities by
approximately $55 million, assuming all other factors remain constant.
An annualized $0.05 change in the copper price changes annual net income
by approximately $12 million and annual cash generated by operating activities
by approximately $17 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 approximately $0.80 per ounce.
Supplemental Information
1. Gold Production Summary - Americas
Three Months Ended Nevada Canada (2) Yanacocha, Peru
March 31, 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry short tons):
Open-Pit 48,421 44,860 n/a n/a 46,110 47,460
Underground 356 406 270 336 n/a n/a
Tons Milled/
Processed (000):
Oxide 1,067 411 263 346 n/a n/a
Refractory 2,092 2,395 n/a n/a n/a n/a
Leach 3,493 3,066 n/a n/a 27,808 32,822
Average Ore Grade
(oz/ ton):
Oxide 0.153 0.194 0.265 0.255 n/a n/a
Refractory 0.191 0.215 n/a n/a n/a n/a
Leach 0.025 0.028 n/a n/a 0.021 0.027
Average Mill
Recovery Rate:
Oxide 76.6% 88.6% 94.9% 95.3% n/a n/a
Refractory 90.8% 89.5% n/a n/a n/a n/a
Ounces Produced
(000): 592.5 626.3 69.1 84.5 803.6 639.4
Equity Ounces
Produced (000):
Oxide 126.1 73.4 69.1 84.5 n/a n/a
Refractory 341.2 458.1 n/a n/a n/a n/a
Leach 89.9 94.8 n/a n/a 412.6 328.3
Total 557.2 626.3 69.1 84.5 412.6 328.3
Equity Ounces
Sold (000) 617.4 632.9 71.9 83.3 410.3 335.1
Production Costs
Per Ounce:
Direct mining and
production costs $318 $235 $262 $256 $133 $121
Capitalized mining
and other (39) (20) 1 2 (6) (2)
Cash operating
costs 279 215 263 258 127 119
Royalties and
production taxes 8 11 2 1 6 5
Total cash costs 287 226 265 259 133 124
Reclamation and
mine closure costs 2 2 2 6 2 2
Total costs
applicable to
sales 289 228 267 265 135 126
Depreciation and
amortization 57 50 70 102 71 58
Total production
costs $346 $278 $337 $367 $206 $184
Kori Kollo,
Three Months Ended Bolivia Other (1)
March 31, 2004 2003 2004 2003
Tons Mined
(000 dry short
tons):
Open-Pit n/a 4,398 2,627 2,758
Underground n/a n/a n/a n/a
Tons Milled/
Processed (000):
Oxide n/a n/a n/a n/a
Refractory n/a 1,794 n/a n/a
Leach n/a 1,476 989 957
Average Ore Grade
(oz/ ton):
Oxide n/a n/a n/a n/a
Refractory n/a 0.037 n/a n/a
Leach n/a 0.017 0.025 0.026
Average Mill
Recovery Rate:
Oxide n/a n/a n/a n/a
Refractory n/a 64.3% n/a n/a
Ounces Produced
(000): 7.6 57.8 17.3 31.2
Equity Ounces
Produced (000):
Oxide n/a n/a n/a n/a
Refractory 6.7 37.3 n/a n/a
Leach n/a 13.5 17.3 31.2
Total 6.7 50.8 17.3 31.2
Equity Ounces
Sold (000) 7.2 51.8 17.3 31.2
Production Costs
Per Ounce:
Direct mining and
production costs $261 $183 $132 $145
Capitalized mining
and other (11) (11) (4) (4)
Cash operating
costs 250 172 128 141
Royalties and
production taxes 16 -- -- 8
Total cash costs 266 172 128 149
Reclamation and
mine closure
costs 32 8 2 3
Total costs
applicable to
sales 298 180 130 152
Depreciation and
amortization 129 36 68 56
Total production
costs $427 $216 $198 $208
(1) Other includes La Herradura and Mesquite
(2) Includes Golden Giant and Holloway
2. Gold Production Summary - Australia
Kalgoorlie Pajingo
Three Months Ended March 31, 2004 2003 2004 2003
Tons Mined (000 dry short tons) 11,864 11,195 174 173
Tons Milled/Processed (000) 1,600 1,637 185 193
Average Ore Grade (oz/ton) 0.073 0.067 0.342 0.395
Average Mill Recovery Rate 87.3% 85.6% 96.3% 96.8%
Ounces Produced (000) 105.9 91.8 66.2 73.3
Equity Ounces Produced (000) 105.9 91.8 66.2 73.3
Equity Ounces Sold (000) 121.9 89.0 75.2 74.0
Production Costs Per Ounce:
Direct mining and production costs $297 $238 $190 $107
Capitalized mining and other (6) -- (8) (4)
Cash operating costs 291 238 182 103
Royalties and production taxes 9 9 12 10
Total cash costs 300 247 194 113
Reclamation and mine closure costs 3 5 (1) --
Total costs applicable to sales 303 252 193 113
Depreciation and amortization 29 18 120 75
Total production costs $332 $270 $313 $188
Tanami Yandal
Three Months Ended March 31, 2004 2003 2004 2003
Tons Mined (000 dry short tons) 3,743 5,359 2,635 855
Tons Milled/Processed (000) 1,095 1,098 901 1,357
Average Ore Grade (oz/ton) 0.161 0.130 0.134 0.111
Average Mill Recovery Rate 95.8% 95.7% 93.3% 92.1%
Ounces Produced (000) 165.4 135.4 118.9 145.1
Equity Ounces Produced (000) 165.4 116.3 118.9 145.1
Equity Ounces Sold (000) 183.1 105.5 141.1 139.3
Production Costs Per Ounce:
Direct mining and production costs $235 $253 $224 $250
Capitalized mining and other (4) (16) (1) 16
Cash operating costs 231 237 223 266
Royalties and production taxes 25 20 8 9
Total cash costs 256 257 231 275
Reclamation and mine closure costs -- (2) 6 5
Total costs applicable to sales 256 255 237 280
Depreciation and amortization 55 62 87 76
Total production costs $311 $317 $324 $356
3. Gold Production Summary - Other
Batu Hijau, Zarafshan, Ovacik,
Three Months Ended Indonesia Uzbekistan Turkey
March 31, 2004 2003 2004 2003 2004 2003
Tons Mined (000
dry short tons) 57,920 51,635 n/a n/a 1,482 890
Tons Milled/
Processed (000):
Leach n/a n/a 1,979 1,994 n/a n/a
Mill 13,078 17,687 n/a n/a 116 127
Average Ore Grade
(oz/ton) 0.009 0.013 0.047 0.044 0.272 0.307
Average Mill
Recovery Rate 78.9% 77.2% n/a n/a 94.4% 93.2%
Ounces Produced
(000) 95.1 124.5 61.1 57.9 30.0 37.5
Equity Ounces
Produced (000) 53.5 70.0 61.1 57.9 30.0 37.5
Equity Ounces
Sold (000) 56.4 54.3 55.9 60.1 5.9 35.0
Production Costs
Per Ounce:
Direct mining
and production
costs $149 n/a $147 $140 $398 $108
Capitalized
mining and
other 20 n/a 1 2 (113) 6
Cash operating
costs 169 n/a 148 142 285 114
Royalties and
production
taxes 10 n/a -- -- 17 12
Total cash costs 179 n/a 148 142 302 126
Reclamation and
mine closure
costs 2 n/a 2 2 (4) 1
Total costs
applicable to
sales 181 n/a 150 144 298 127
Depreciation and
amortization 42 n/a 48 42 200 97
Total production
costs $223 n/a $198 $186 $498 $224
Martha, Minahasa,
Three Months Ended New Zealand Indonesia
March 31, 2004 2003 2004 2003
Tons Mined (000
dry short tons) 1,146 764 n/a n/a
Tons Milled/
Processed (000):
Leach n/a n/a n/a n/a
Mill 368 293 166 185
Average Ore Grade
(oz/ton) 0.066 0.096 0.152 0.179
Average Mill
Recovery Rate 90.3% 90.2% 90.1% 90.0%
Ounces Produced
(000) 22.1 25.1 22.3 30.5
Equity Ounces
Produced (000) 22.1 23.4 21.0 28.7
Equity Ounces
Sold (000) 22.6 19.6 26.2 31.7
Production Costs
Per Ounce:
Direct mining
and production
costs $422 $209 $296 $228
Capitalized
mining and
other (171) 10 3 3
Cash operating
costs 251 219 299 231
Royalties and
production
taxes -- -- 8 5
Total cash costs 251 219 307 236
Reclamation and
mine closure
costs 2 3 5 4
Total costs
applicable
to sales 253 222 312 240
Depreciation and
amortization 135 101 96 50
Total production
costs $388 $323 $408 $290
4. Base Metal Summary - Batu Hijau and Golden Grove
Three Months Ended March 31,
Batu Hijau 2004 (1) 2003 (1)
Total tons mined (000) 57,920 51,635
Dry tons processed (000) 13,078 12,588
Average copper grade 0.64% 0.69%
Average recovery rate 85.6% 87.9%
Copper produced (000 lbs) 141,069 152,308
Equity copper produced (000 lbs) 79,351 85,673
Equity copper sold (000 lbs) 73,819 69,848
Realized copper price per pound $1.50 $0.84
Total cash cost per equity pound $0.66 $0.42
Noncash cost per equity pound 0.16 0.16
Total production cost per equity pound $0.82 $0.58
(1) 2003 cash and total cost per pound have been presented pro forma on
a co-product basis for comparability to 2004. See below for
reconciliation between co-product and by-product accounting for
2003.
Three Months Ended March 31,
Golden Grove 2004 2003
Total tons mined (000) 309 323
Dry tons processed (000) 307 346
Average copper grade 3.17% 5.79%
Average copper recovery rate 86.6% 90.8%
Copper produced (000 lbs) 3,555 13,747
Copper sold (000 lbs) 2,265 21,289
Realized copper price per pound $1.37 $0.84
Copper cash cost per pound $0.46 $0.53
Average zinc grade 10.42% 12.60%
Average zinc recovery rate 90.7% 92.6%
Zinc produced (000 lbs) 40,294 39,805
Zinc sold (000 lbs) 45,448 24,913
Realized zinc price per pound $0.47 $0.36
Zinc cash cost per pound $0.38 $0.31
Gold sold (000 ounces) 0.2 2.0
Silver sold (000 ounces) 13.8 223.3
Reconciliation between co-product and by-product accounting at
Batu Hijau for 2003:
Co-Product Method
For the Three Months By-Product
Ended March 31, 2003 Method Copper Gold Total
(in millions, except per ounce amounts)
Revenue $53,063 $53,063 $18,209 $71,272
Cash production costs $40,337 $30,032 $10,305 $40,337
By-product credits (18,907) (520) (178) (698)
Total Cash Cost 21,430 29,512 10,127 39,639
Noncash costs 15,232 11,341 3,891 15,232
Total Production
Costs $36,662 $40,853 $14,018 $54,871
Pounds of copper
sold (000) 69,848
Ounces of gold
sold (000) 54.3
Cash cost per lb./oz $0.31 $0.42 $186
Noncash cost per lb./oz 0.21 0.16 72
Total costs per lb./oz. $0.52 $0.58 $258
5. Impact of Consolidating Batu Hijau on Newmont's Consolidated Income
Statement and Balance Sheet
Three Months Ended March 31, 2004
Amounts Before Impact of
Consolidation Consolidating Consolidated
of Batu Hijau Batu Hijau Amounts
(unaudited, in thousands)
Revenues
Sales - gold, net $899,449 $35,202 $934,651
Sales - base metals, net 15,208 172,418 187,626
Royalties 13,162 -- 13,162
927,819 207,620 1,135,439
Costs and expenses
Costs applicable to
sales - gold 488,094 13,455 501,549
Costs applicable to
sales - base metals 8,854 64,171 73,025
Depreciation, depletion
and amortization 156,491 25,533 182,024
Other costs and expenses 68,805 954 69,759
722,244 104,113 826,357
Other income (expense)
Interest expense (14,474) (11,028) (25,502)
Other income 14,066 358 14,424
(408) (10,670) (11,078)
Pre-tax income before
minority interest, equity
income of affiliates and
cumulative effect of a
change in accounting
principle 205,167 92,837 298,004
Income tax expense (53,115) (33,517) (86,632)
Minority interest in
income of subsidiaries (53,726) (25,331) (79,057)
Equity income of affiliates 35,493 (33,989) 1,504
Income before cumulative
effect of a change in
accounting principle 133,819 -- 133,819
Cumulative effect of a
change in accounting
principle, net -- (47,138) (47,138)
Net income $133,819 $(47,138) $86,681
As of March 31, 2004
Amounts Before Impact of
Consolidation Consolidating Consolidated
of Batu Hijau Batu Hijau Amounts
(unaudited, in thousands)
Current assets $2,537,876 $417,264 $2,955,140
Property, plant and
mine development, net 2,378,280 1,539,505 3,917,785
Mineral interests and
other intangible
assets, net 1,351,284 6,559 1,357,843
Investments 756,217 (731,795) 24,422
Long-term stockpiles and
ore on leach pads 263,336 227,602 490,938
Goodwill 3,084,686 -- 3,084,686
Other assets 897,575 83,608 981,183
Total Assets $11,269,254 $1,542,743 $12,811,997
Current portion of
long-term debt $185,393 $195,481 $380,874
Other current liabilities 668,369 140,359 808,728
Long-term debt 873,797 653,082 1,526,879
Long-term deferred
income tax liabilities 633,489 101,462 734,951
Other liabilities 1,017,369 128,801 1,146,170
Total Liabilities 3,378,417 1,219,185 4,597,602
Minority interest in
subsidiaries 371,054 370,696 741,750
Total stockholders'
equity 7,519,783 (47,138) 7,472,645
Total liabilities and
stockholders' equity $11,269,254 $1,542,743 $12,811,997
6. Reconciliation of Costs Applicable to Sales to Total Cash Costs Per
Ounce and Per Pound, and Total Production Costs Per Ounce and Per
Pound (dollars in millions except per ounce amounts)
The total cash costs and total production costs per ounce or pound
are non-GAAP performance measures that are intended to provide
investors with information about the cash generating capacities and
profitability of Newmont's mining operations. Newmont's management
uses these measures for the same purpose and for monitoring the
performance of its mining operations. These measures differ from
measures determined in accordance with GAAP and should not be
considered in isolation or as a substitute for measures of
performance or liquidity determined in accordance with GAAP. These
measures were developed in conjunction with gold mining companies
associated with the Gold Institute in an effort to provide a level of
comparability; however, Newmont's measures may not be comparable to
similarly-titled measures of other companies.
Three Months Ended
March 31, 2004
Total
La Golden North
Nevada Herradura Giant Holloway America Yanacocha
Costs applicable
to sales
under GAAP $192.7 $2.2 $12.9 $6.2 $214.0 $111.9
Minority
interest -- -- -- -- -- (56.4)
Accretion
expense (1.4) -- (0.1) -- (1.5) (0.8)
Write-down of
inventories -- -- -- -- -- --
Purchased ore
and other (14.1) -- 0.1 -- (14.0) (0.1)
Total cash cost
for per ounce
calculations 177.2 2.2 12.9 6.2 198.5 54.6
Accretion
expense and
other 1.4 -- 0.1 -- 1.5 0.7
Depreciation,
depletion and
amortization 35.1 1.2 3.3 1.8 41.4 54.3
Minority
interest
and other -- -- -- -- -- (25.1)
Total production
cost for
per ounce
calculations $213.7 $3.4 $16.3 $8.0 $241.4 $84.5
Equity ounces
sold (000) 617.4 17.3 52.7 19.2 706.6 410.3
Equity cash
cost per
ounce sold $287 $128 $245 $322 $281 $133
Equity total
production cost
per ounce sold $346 $198 $308 $417 $341 $206
Three Months Ended
March 31, 2004
Total
Kori South
Kollo America Pajingo Kalgoorlie Yandal Tanami
Costs applicable
to sales
under GAAP $2.4 $114.3 $14.7 $37.0 $33.4 $49.8
Minority
interest (0.3) (56.7) -- -- -- --
Accretion
expense (0.2) (1.0) (0.1) (0.4) (0.9) (0.2)
Write-down
of inventories -- -- -- -- -- (2.7)
Purchased ore
and other -- (0.1) -- -- -- --
Total cash cost
for per ounce
calculations 1.9 56.5 14.6 36.6 32.5 46.9
Accretion
expense
and other 0.2 0.9 (0.1) 0.4 0.9 --
Depreciation,
depletion and
amortization 1.1 55.4 9.1 3.5 12.3 10.0
Minority
interest
and other (0.1) (25.2) -- -- -- --
Total production
cost for
per ounce
calculations $3.1 $87.6 $23.6 $40.5 $45.7 $56.9
Equity ounces
sold (000) 7.2 417.5 75.2 121.9 141.1 183.1
Equity cash cost
per ounce sold $266 $135 $194 $300 $231 $256
Equity total
production cost
per ounce sold $427 $210 $313 $332 $324 $311
Three Months Ended
March 31, 2004
Total Batu
Australia Hijau Zarafshan Minahasa Martha Ovacik
Costs applicable
to sales
under GAAP $134.9 $13.5 $8.4 $8.7 $5.8 $1.9
Minority
interest -- (6.1) -- -- -- --
Accretion
expense (1.6) (0.1) (0.1) (0.1) (0.1) (0.1)
Write-down of
inventories (2.7) -- -- -- -- --
Purchased ore
and other -- 2.8 -- (0.5) -- --
Total cash cost
for per ounce
calculations 130.6 10.1 8.3 8.1 5.7 1.8
Accretion
expense and
other 1.2 0.1 0.1 0.1 0.1 --
Depreciation,
depletion and
amortization 34.9 4.3 2.7 2.7 3.1 1.2
Minority
interest and
other -- (1.9) -- (0.2) -- --
Total production
cost for
per ounce
calculations $166.7 $12.6 $11.1 $10.7 $8.9 $3.0
Equity ounces
sold (000) 521.3 56.4 55.9 26.2 22.6 5.9
Equity cash cost
per ounce sold $251 $179 $148 $307 $251 $302
Equity total
production cost
per ounce sold $320 $223 $198 $408 $388 $498
Three Months Ended
March 31, 2004
Total
Other Total
International Gold
Costs
applicable
to sales
under GAAP $38.3 $501.5
Minority
interest (6.1) (62.8)
Accretion
expense (0.5) (4.6)
Write-down of
inventories -- (2.7)
Purchased ore
and other 2.3 (11.8)
Total cash cost
for per ounce
calculations 34.0 419.6
Accretion
expense and
other 0.4 4.0
Depreciation,
depletion and
amortization 14.0 145.7
Minority
interest
and other (2.1) (27.3)
Total production
cost for
per ounce
calculations $46.3 $542.0
Equity ounces
sold (000) 167 1,812.4
Equity cash cost
per ounce sold $203 $231
Equity total
production cost
per ounce sold $276 $299
Three Months Ended
March 31, 2003
Total
La Golden North
Nevada Mesquite Herradura Giant Holloway America
Costs applicable
to sales
under GAAP $145.5 $2.6 $2.2 $16.7 $5.4 $172.4
Minority
interest -- -- -- -- -- --
Accretion
expense (1.6) (0.1) -- (0.5) (0.1) (2.3)
Write-down of
inventories (1.0) -- -- -- -- (1.0)
Purchased ore
and other -- -- -- -- -- --
Total cash cost
for per ounce
calculations 142.9 2.5 2.2 16.2 5.3 169.1
Accretion
expense and
other 1.6 0.1 -- 0.5 0.1 2.3
Depreciation,
depletion and
amortization 31.6 0.9 0.8 7.2 1.3 41.8
Minority
interest
and other -- -- -- -- -- --
Total production
cost for
per ounce
calculations $176.1 $3.5 $3.0 $23.9 $6.7 $213.2
Equity ounces
sold (000) 632.9 14.6 16.6 65.2 18.1 747.4
Equity cash cost
per ounce sold $226 $173 $128 $249 $294 $226
Equity total
production cost
per ounce sold $278 $239 $180 $366 $370 $285
Three Months Ended
March 31, 2003
Total
Kori South
Yanacocha Kollo America Pajingo Kalgoorlie Yandal
Costs applicable
to sales
under GAAP $85.5 $10.6 $96.1 $8.4 $22.4 $39.7
Minority
interest (43.1) (1.3) (44.4) -- -- --
Accretion
expense (0.8) (0.4) (1.2) -- (0.5) (0.7)
Write-down of
inventories -- -- -- -- -- (0.7)
Purchased ore
and other -- -- -- -- -- --
Total cash cost
for per ounce
calculations 41.6 8.9 50.5 8.4 21.9 38.3
Accretion
expense
and other 0.8 0.4 1.2 -- 0.5 0.7
Depreciation,
depletion and
amortization 35.5 2.2 37.7 5.6 1.6 10.6
Minority
interest
and other (16.2) (0.3) (16.5) -- -- --
Total production
cost for
per ounce
calculations $61.7 $11.2 $72.9 $14.0 $24.0 $49.6
Equity ounces
sold (000) 335.1 51.8 386.9 74.0 89.0 139.3
Equity cash cost
per ounce sold $124 $172 $130 $113 $247 $275
Equity total
production cost
per ounce sold $184 $216 $188 $188 $270 $356
Three Months Ended
March 31, 2003
Total Batu
Tanami Australia Hijau(1) Zarafshan Minahasa Martha
Costs applicable
to sales
under GAAP $31.6 $102.1 n/a $8.6 $9.4 $6.1
Minority
interest (4.4) (4.4) n/a -- -- (0.3)
Accretion
expense 0.1 (1.1) n/a (0.1) -- (0.1)
Write-down of
inventories -- (0.7) n/a -- (1.3) (1.4)
Purchased ore
and other -- -- n/a -- (0.5) --
Total cash cost
for per ounce
calculations 27.3 95.9 n/a 8.5 7.6 4.3
Accretion
expense
and other (0.1) 1.1 n/a 0.1 -- 0.1
Depreciation,
depletion and
amortization 7.6 25.4 n/a 2.6 1.7 2.0
Minority
interest
and other (1.1) (1.1) n/a -- (0.1) --
Total production
cost for
per ounce
calculations $33.7 $121.3 n/a $11.2 $9.2 $6.4
Equity ounces
sold (000) 105.5 407.8 n/a 60.1 31.7 19.6
Equity cash cost
per ounce sold $257 $235 n/a $142 $236 $219
Equity total
production cost
per ounce sold $317 $297 n/a $186 $290 $323
Three Months Ended
March 31, 2003
Total
Other Total
Ovacik International Gold
Costs applicable
to sales
under GAAP $4.4 $28.5 $399.1
Minority interest -- (0.3) (49.1)
Accretion expense (0.1) (0.3) (4.9)
Write-down of
inventories -- (2.7) (4.4)
Purchased ore
and other -- (0.5) (0.5)
Total cash cost
for per ounce
calculations 4.3 24.7 340.2
Accretion expense
and other 0.1 0.3 4.9
Depreciation,
depletion and
amortization 3.4 9.7 114.6
Minority interest
and other -- (0.1) (17.7)
Total production
cost for per ounce
calculations $7.8 $34.6 $442.0
Equity ounces
sold (000) 35.0 146.4 1,688.5
Equity cash cost
per ounce sold $126 $169 $201
Equity total
production cost
per ounce sold $224 $236 $261
7. Reconciliation of Batu Hijau Costs Applicable to Sales to Total
Production Cost Per Equity Copper Pound (in millions,
except per pound)
Three Months Ended March 31, 2004 (1) 2003 (1)
Costs applicable to sales per
financial statements $63.8 $29.3
Minority interest (29.2) (7.4)
Accretion expense (0.5) (0.8)
Smelting and refining 14.3 8.5
Total cash cost for per pound calculation 48.4 29.6
Accretion expense 0.5 0.8
Depreciation, depletion and amortization 21.1 18.7
Minority interest (9.2) (8.2)
Total production cost for per pound calculation $60.8 $40.9
Equity copper sold (000 lbs) 73,819 69,848
Total cash cost per equity pound $0.66 $0.42
Total production cost per equity pound $0.82 $0.58
(1) 2004 and 2003 cash and total production cost per pound presented on
a co-product basis.
8. Reconciliation of Golden Grove Costs Applicable to Sales to Copper
and Zinc Cash Costs Per Pound (in millions, except per pound)
Three Months Ended March 31,
2004 2003
Total Copper Zinc Total Copper Zinc
Costs applicable
to sales per
financial
statements $9.1 $0.5 $8.6 $15.2 $9.0 $6.2
Accretion expense (0.1) -- (0.1) (0.1) -- (0.1)
Write-down
inventories -- -- -- (3.2) (1.4) (1.8)
Smelting and
refining 9.1 0.5 8.6 7.2 3.6 3.6
Total cash cost
for per pound
calculation $18.1 $1.0 $17.1 $19.1 $11.2 $7.9
Total sold
(000 lbs) n/a 2,265 45,448 n/a 21,289 24,913
Total cash cost
per pound sold n/a $0.46 $0.38 n/a $0.53 $0.31
9. Gold Hedge Position - Current Maturity Summary (1) (000 ounces)
Gold Put Price Capped
Option Contracts
Contracts
Years Ozs Price (2) Ozs Price (2)
2004 150 $292 -- --
2005 205 $292 500 $350
2006 100 $338 -- --
2007 20 $397 -- --
2008 1,000 $384
2009 -- -- 600 $381
2010 -- -- -- --
2011 -- -- 250 $392
Total/Average 475 $306 2,350 $377
The mark-to-market value of the gold put option contracts was negative
$12.0 million at March 31, 2004.
Notes:
(1) For more detailed descriptions, definitions and explanations, refer
to the Company's Annual Report on Form 10-K for the year ended
December 31, 2003.
(2) Prices quoted are gross contract prices, which represent the gross
cash flow per ounce of each contract. Not included in these prices
are the additional cash outflows associated with borrowing gold over
the life of the contract where the contracts are floating in nature.
The rate at which gold is borrowed is determined over the life of the
contract based on the prevailing market gold lease rate for the time
period that the borrowing is fixed. The borrowing can be fixed for
varying periods over the life of the contract.
The Company's first quarter earnings conference call and web cast
presentation is scheduled for Wednesday, April 28, 2004 beginning at 4:00 p.m.
Eastern Daylight Time (2:00 p.m. Mountain Daylight Time). To participate:
Dial-In Number: (712) 257-0014
Leader: Russell Ball
Password: Newmont
The conference call will also be simultaneously carried on our web site
under Investor Information/Presentations and will be archived there for a
limited time.
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. Such forward-looking
statements include, without limitation, (i) statements regarding future
earnings, and the sensitivity of earnings to the gold and other metals prices;
(ii) estimates of future gold and other metals production and sales; (iii)
estimates of future cash costs and total production costs; (iv) statements of
future cash flows, and the sensitivity of cash flows to the gold and other
metals prices; (v) estimates of future capital expenditures, expenses and tax
rates; (vi) estimates regarding timing of future production or closure
activities; (vii) statements regarding future exploration results and the
replacement of reserves; (viii) statements regarding future asset sales or
rationalization efforts; and (ix) estimates of future royalty revenues 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 2003
Annual Report on Form 10-K, which is on file 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.
SOURCE Newmont Mining Corporation
-0- 04/28/2004
/CONTACT: investors, Russell Ball, +1-303-837-5927,
Russell.ball@newmont.com, Wendy Yang, +1-303-837-6141, wendy.yang@newmont.com,
or media, or Doug Hock, +1-303-837-5812, doug.hock@newmont.com, all of Newmont
Mining Corporation/
/Web site: http://www.newmont.com/
(NEM)
CO: Newmont Mining Corporation; Franco-Nevada; Normandy Mining
ST: Colorado
IN: MNG
SU: ERN ERP CCA