Exhibit 99.1
Newmont Mining Corporation Reports Second Quarter Net Income of $37.5 Million
($0.08 per share); Mid-Year Exploration Results Exceed Expectations
DENVER, July 28 /PRNewswire-FirstCall/ -- Newmont Mining Corporation
(NYSE: NEM) today announced second quarter net income of $37.5 million
($0.08 per share). This compares to net income of $90.8 million ($0.22 per
share) for the second quarter of 2003. Net income for the second quarter was
impacted by non-cash asset impairment charges that decreased net income by
$47.8 million ($0.11 per share). During the quarter, Newmont sold 1.64
million equity ounces of gold at total cash costs of $240 per ounce.
Wayne W. Murdy, Chairman and Chief Executive Officer, said: "The decline
in second quarter net income was the result of planned mine closures and
divestitures, processing lower grade material and non-cash asset impairment
charges. Despite lower ounces sold, cash flow generation from operations for
the quarter was $243 million. For the full year, we expect gold sales of in
excess of seven million ounces, with the second half's sales weighted towards
the fourth quarter. Our development projects are proceeding on schedule, and
our exploration results have exceeded expectations, particularly at our two
projects in Ghana. We are optimistic about our ability, similar to 2003, to
grow reserves from exploration in 2004."
Second Quarter Six Months
2004 2003 2004 2003
Financial (in millions,
except per share)
Revenues $1,009.2 $736.8 $2,131.4 $1,470.8
Net cash provided by
operating activities $243.1 $55.8 $567.2 $194.6
Net income applicable
to common shares $37.5 $90.8 $124.2 $208.1
Net income per
common share, basic $0.08 $0.22 $0.28 $0.52
Operating
Equity gold sales
(000 ounces)(1) 1,643.4 1,823.9 3,456.0 3,604.4
Average realized price
($/ounce) $395 $353 $404 $352
Total cash costs
($/ounce)(2) $240 $212 $235 $207
Total production costs
($/ounce)(2) $309 $277 $303 $269
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 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
Second quarter net income applicable to common shares was $37.5 million
($0.08 per share), compared with net income of $90.8 million ($0.22 per share)
for the second quarter of 2003. For the first six months, net income
applicable to common shares was $124.2 million ($0.28 per share), compared
with net income of $208.1 million ($0.52 per share, basic) for the first half
of 2003.
Net income for the second quarter of 2004 was impacted by the following:
-- a $16.3 million ($0.04 per share) non-cash, after-tax write-down of
long-lived assets at Ovacik in Turkey; and
-- a $31.5 million ($0.07 per share) non-cash, after-tax charge for an
other-than-temporary decline in the value of the Company's investment
in Kinross Gold Corporation.
These transactions had the effect of decreasing net income for the second
quarter of 2004 by $47.8 million ($0.11 per share).
Net income for the second quarter of 2003 was impacted by the following:
-- an $11.7 million ($0.03 per share) non-cash, after-tax gain for the
change in fair value of gold derivative instruments that did not
qualify as "effective hedges;"
-- a net $63.9 million ($0.16 per share) non-cash, after-tax gain on the
extinguishment of Newmont Yandal Operations Pty Ltd (Yandal) bonds;
-- a net $53.6 million ($0.13 per share) non-cash, after-tax gain on the
extinguishment of Yandal derivative liabilities on a consolidated
basis;
-- a $107.8 million ($0.27 per share) non-cash, after-tax equity loss
and impairment of the Company's investment in Australian Magnesium
Corporation; and
-- other miscellaneous charges totaling $2.5 million ($0.01 per share).
These transactions had the net effect of increasing net income for the
second quarter of 2003 by $18.9 million ($0.04 per share).
For the second quarter of 2004, the Company sold 1,643,400 equity ounces
of gold, 10% lower than the second quarter of 2003. The average realized
price was $395 per ounce, a 12% increase over the prior year quarter.
During the first six months of 2004, the Company sold 3,456,000 equity
ounces of gold, compared with 3,604,400 equity ounces sold in the first six
months of 2003. The average realized price was $404 per ounce, a 15% increase
over the prior year period.
The Company generated net cash from operating activities of $243.1 million
in the second quarter and $567.2 million for the first six months of 2004.
Net cash provided by operating activities for 2003 was negatively impacted by
the early settlement of derivative instruments classified as cash flow hedges
and does not include consolidated cash flows from Batu Hijau, which was
consolidated effective January 1, 2004.
Operating Highlights - Second Quarter
North America Q2 Q2 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 633.7 637.1 1,340.3 1,384.5
Total cash costs ($/ounce)(1) $276 $251 $278 $238
* Nevada operations sold 560,100 equity ounces in the second quarter
(+5%), as inventory reductions, increased mill throughput and higher
leach tons more than offset lower ore grades processed and associated
lower recoveries. Total cash costs of $275 per ounce (+8%) were
primarily attributable to processing lower grades due to stripping of
laybacks at the Gold Quarry and Twin Creeks Section 30 pits.
* Golden Giant in Canada sold 39,500 ounces in the second quarter (-27%)
at total cash costs of $277 per ounce (+12%). Lower sales were
primarily due to a planned decrease in mill throughput (-27%) as
flexibility in accessing available ore continues to decline with the
mine's maturity, partially offset by an increase in mill ore grade
(+16%) due to more selective mining. On June 28, 2004, the Company
announced a temporary shutdown for shaft repairs. The repairs are
expected to be completed in August 2004.
* Holloway in Canada sold 15,900 equity ounces in the second quarter
(+9%) at total cash costs of $423 per ounce (+36%). Higher sales were
achieved through a reduction in inventory. Increased cash costs were
driven by lower than expected production, and higher manpower, steel
and electricity costs. The Company expects to complete the
acquisition of the nearby Holt McDermott mill from Barrick in the
fourth quarter of 2004. Holloway ore is currently being toll treated
at this facility.
* La Herradura in Mexico sold 18,200 equity ounces in the second quarter
(+2%) at total cash costs of $162 per equity ounce (-19%). Cash costs
for the second quarter decreased due to an increase in leach pad
inventories.
South America Q2 Q2 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 323.3 392.6 740.8 779.5
Total cash costs ($/ounce)(1) $150 $127 $142 $129
* Yanacocha in Peru sold 317,700 equity ounces in the second quarter
(-8%) at total cash costs of $147 per ounce (+25%). Lower second
quarter sales were due to a planned reduction in tons placed on the
pads (-7%) due to increased stripping, and lower ore grades (-27%),
primarily from the La Quinua deposit. Higher cash costs reflected
higher diesel prices and consumption, higher labor and related costs,
the increased stripping and lower production. At La Quinua, gold
recovery is taking longer than originally anticipated, but the Company
does not expect a reduction in ultimate recovery.
* Kori Kollo in Bolivia sold 5,600 equity ounces (-89%) at total cash
costs of $305 per ounce (+62%). Open-pit mining activities were
completed in October 2003 and residual gold production is being
derived from rinsing the leach pads.
Australia Q2 Q2 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 378.0 530.6 899.3 938.4
Total cash costs ($/ounce)(1) $302 $241 $272 $238
* The Australian operations sold 378,000 equity ounces (-29%) in the
second quarter, largely attributable to lower sales at Pajingo and
Tanami, the divestiture of Wiluna in December 2003 and the closure of
Bronzewing in March 2004. Total cash costs of $302 per equity ounce
were up 25% from the year ago quarter, largely due to lower production
and a stronger Australian dollar.
* Kalgoorlie sold 98,500 equity ounces (-5%) at total cash costs of
$318 per equity ounce (+17%) in the second quarter. Lower sales
reflected the mining sequence and lower equipment availability, which
resulted in lower grade ore (-12%) processed in the quarter. Higher
cash costs were primarily attributable to lower production, and higher
processing consumables and site administration costs. In early July,
a shovel was lost following a fire caused by a failure in the fuel
lines. The joint venture is actively seeking to replace the shovel.
If the replacement is delayed, the 2004 production plan should not be
significantly affected, but reduced development work could impact the
2005 production plan.
* Pajingo sold 48,600 ounces (-48%) at total cash costs of $290 per
ounce (+120%) in the second quarter. Lower sales reflected a ground
disturbance during the quarter that limited mining activities and
required the processing of low-grade stockpiles. Higher cash costs
reflected lower production due to the processing of lower grade
stockpiles. Access restrictions have now been resolved.
* Tanami sold 158,900 ounces (-17%) at total cash costs of $277 per
ounce (+21%) in the second quarter. Lower sales reflected lower ore
grades (-15%) with lower grade material being mined at the Granites in
accordance with changes in the mining sequence, and lower grades and
recovery at Groundrush. Higher cash costs reflected increased
underground backfill costs and lower production.
* Yandal sold 72,000 ounces (-49%) at total cash costs of $341 per ounce
(+12%) in the second quarter. Lower sales reflect the Wiluna
divestiture and the closure of Bronzewing. Higher cash costs
reflected lower production, higher open-pit mining costs and higher
overhead charges.
* Golden Grove sold 19.9 million pounds of copper (+23%) and 19.7
million pounds of zinc (-31%) at cash costs of $0.89 (+48%) and
$0.37 (+95%) per pound, respectively, in the second quarter. Higher
cash costs reflected lower silver by-product credits, and higher
development and ground support costs.
Batu Hijau (Indonesia) Q2 Q2 YTD YTD
2004 2003 2004 2003
Equity copper sales (M lbs) 106.8 91.2 180.7 161.0
Equity gold sales (000 ozs) 111.2 91.9 167.6 146.2
Total cash costs ($/lb Cu)(1,2) $0.46 $0.38 $0.54 $0.40
Total cash costs ($/oz Au)(1,2) $174 n/a $175 n/a
* Effective January 1, 2004, the Company began consolidating Batu Hijau
and 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. As a result, reported gold cash costs per
ounce are sensitive to movements in the copper price.
* Batu Hijau sold 106.8 million equity pounds of copper in the second
quarter (+17%) at total cash costs of $0.46 per pound. Increased
copper sales reflect increased throughput (+12%), reflecting crusher
circuit modifications completed in late 2003, improved operational
efficiencies, increased ore grades (+15%) and increased recovery
(+2%), offset by an inventory increase due to the timing of shipments.
Increased costs reflected higher mine operating and maintenance costs,
increased crushing and grinding costs and higher treatment and
refining costs. The realized copper price for the second quarter was
$1.06, a 38% increase over the second quarter of 2003.
* Batu Hijau sold 111,200 equity ounces of gold (+21%) at total cash
costs of $174 per ounce in the second quarter. Increased gold sales
reflected increased throughput (+12%) and gold grades (+24%), offset
by an increase in inventory.
* Batu Hijau commenced dividend payments during the second quarter and
this will result in a decrease in Newmont's reported economic interest
from 56.25% to 52.875%, in recognition of the economic interest held
by the project's Indonesian shareholder. While the lower economic
interest was applied to reported 2003 year-end copper and gold
reserves, it will only be applied to earnings when Batu Hijau reports
positive retained earnings, which is expected in September 2004.
Other Operations Q2 Q2 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 192.1 166.9 302.7 313.3
Total cash costs ($/ounce)(1) $191 $175 $200 $172
* Zarafshan in Uzbekistan sold 68,900 equity ounces (+12%) at total cash
costs of $144 per ounce (-4%) in the second quarter. Increased sales
were primarily due to a reduction in inventory.
* Ovacik in Turkey sold 69,500 ounces (+36%) at total cash costs of
$193 per ounce (+57%) in the second quarter. Increased sales
reflected the sale of accumulated bullion inventories, partially
offset by lower mill throughput (-20%). Increased cash costs were
driven by increased stripping, lower grades and lower tons milled,
partially offset by increased recoveries.
* Martha in New Zealand sold 30,100 ounces (+9%) at total cash costs of
$206 per ounce (-13%) in the second quarter. Increased sales
reflected increased ore grades (+41%), partially offset by lower
recoveries. Lower cash costs reflected increased silver by-product
credits, lower maintenance costs and higher production.
* Minahasa in Indonesia sold 23,600 equity ounces (-11%) at total cash
costs of $302 per ounce (+13%) in the second quarter. 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 co-product accounting for 2003 and 2004.
Other Highlights
Cash and Debt
At the end of the second quarter, cash and cash equivalents totaled
$1.47 billion and outstanding debt totaled $1.76 billion. Of the outstanding
debt, $805.2 million is Batu Hijau debt that is non-recourse to Newmont.
During the second quarter, the Company eliminated $124.1 million in
infrastructure bonds assumed as part of the Normandy acquisition in 2002.
Newmont Capital
Newmont Capital manages the Company's royalty, dividend and equity
portfolios. For the second quarter, royalty and dividend income was
$15.4 million, compared to $10.5 million for the year ago quarter. The
increase was mostly due to higher oil and gas prices. For the first six
months, royalty and dividend income was $28.5 million, compared with
$24.9 million for the first half of 2003.
During the second quarter, Newmont Capital entered into several
transactions, including the purchase of marketable equity securities for
approximately $94 million. Asset rationalization and portfolio optimization
efforts continue, with agreements entered into for:
-- the possible sale, subject to various financing, governmental, legal
and regulatory approvals, of the Ovacik mine in Western Turkey;
-- the sale, subject to various approvals, of the recently closed
Bronzewing mine in Western Australia; and
-- the purchase of the Holt McDermott mill and mill-related facilities
in Ontario, Canada from Barrick.
Project Development & Exploration
The Leeville underground project in Nevada is on schedule for initial gold
production in late 2005. The production and ventilation shafts were 1,095
feet (59% complete) and 1,365 feet (94% complete), respectively, from surface
at the end of the second quarter. The drift from the Carlin East underground
mine to the Leeville ventilation shaft was approximately 97% complete at the
end of the second quarter. The capital cost estimate has increased from
approximately $190 million to approximately $205 million, attributable in part
to increased dewatering requirements which resulted in the installation of two
additional dewatering wells and pumps.
At Phoenix in Nevada, engineering is 12% complete and civil construction
is expected to commence in early 2005. The project remains on schedule for
initial gold production in 2006.
At Ahafo in Ghana, the EPCM contract has been awarded and long lead-time
equipment is being ordered. The initial construction contract for site access
and camp infrastructure was awarded and construction has commenced. Meetings
with stakeholders on crop and land compensation are progressing well. The
project remains on schedule for initial gold production in 2006.
At Akyem in Ghana, an updated feasibility study is in progress.
Completion of permitting and license requirements is expected by year-end and
a development decision is expected in late 2004 or early 2005.
At Minas Conga in Peru, this year's drilling program is essentially
complete. The feasibility study is ongoing and several trade-off studies are
in progress. The estimated project cost for 2004 is $18 million, all of which
is being expensed.
At Boddington in Australia, the feasibility study update is being actively
progressed by the three joint venture partners, with the aim of completing the
update by mid-2005. Current activities include finalizing additional
metallurgical testwork, refining the geologic model and preparing updated cost
and schedule estimates.
During the second quarter, Newmont completed approximately 775,000 feet of
exploration drilling. Exploration, research and development expenditures of
$48.2 million in the second quarter were 57% higher than the year ago quarter.
The guidance for exploration, research and development expenditures for 2004
has been increased to between $180 million and $200 million on a consolidated
basis, reflecting expanded feasibility study work at Minas Conga in Peru,
Akyem in Ghana and at Martabe in Indonesia, as well as increased drilling at
Phoenix in Nevada and Yanacocha in Peru.
Exploration activities in the first half of 2004 have produced promising
results and the Company is optimistic that it will be able to grow reserves
from exploration in 2004. Reserve additions are possible from Ahafo and Akyem
in Ghana, Martabe in Indonesia, and Phoenix and Gold Quarry in Nevada.
Positive drilling results from beneath the Akyem deposit indicate the
potential to deepen the current reserve pit. At Ahafo, drilling to test
extensions of the Kenyase East, Kenyase Central and Area E deposits has
identified significant, continuous zones of gold mineralization at all three
deposits that extend beyond the reported 2003 year-end reserve pits.
At Martabe in Indonesia, this year's drilling program is focused on
advancing the Purnama and Baskara deposits into reserves. Completion of the
resource model and feasibility study is expected by the end of the year.
In Nevada, drilling has expanded the mineralization at Dos Equis, an
extension of the Gold Quarry open-pit deposit. Drilling continues to
intercept significant zones of oxide leach mineralization, which will augment
future pit expansions. Drilling at Phoenix has provided encouraging results
from the Minnie pit, with an expanded drilling program in the main Phoenix
deposit at the Fortitude pit and Box Canyon area currently underway.
2004 Guidance
The Company reaffirmed 2004 equity gold sales guidance of between
7.0 million and 7.2 million ounces and total cash costs of between $225 and
$235 per ounce. Equity gold sales for the second half of 2004 are weighted
towards the fourth quarter, particularly in Nevada and at Yanacocha in Peru.
Statements of Consolidated Income
Three Months Ended June 30,
2004 2003
(unaudited, in thousands,
except per share)
Revenues
Sales - gold, net $800,590 $724,026
Sales - base metals, net 208,581 12,735
1,009,171 736,761
Costs and expenses
Costs applicable to sales
(exclusive of depreciation, depletion
and amortization shown separately below)
Gold 464,144 422,245
Base metals 93,438 9,973
Depreciation, depletion and amortization 173,156 139,337
Exploration, research and development 48,226 30,621
General and administrative 30,493 31,292
Write-down of long-lived assets 16,300 1,794
Other 8,435 3,296
834,192 638,558
Other income (expense)
Loss on investments, net (41,299) (603)
Gain on derivative instruments, net 958 16,644
Gain on extinguishment of
NYOL bonds, net -- 94,414
Gain on extinguishment of
NYOL derivative liability, net -- 76,578
Loss on extinguishment of debt (222) --
Royalty and dividend income 15,356 10,468
Interest income, foreign currency
exchange and other income 4,718 32,675
Interest expense, net of capitalized
interest of $2,546 and $1,758, respectively (24,931) (22,669)
(45,420) 207,507
Pre-tax income before minority interest,
equity income and impairment of affiliates 129,559 305,710
Income tax expense (31,310) (89,038)
Minority interest in income of subsidiaries (60,858) (35,807)
Equity loss and impairment of
Australian Magnesium Corporation -- (107,758)
Equity income of affiliates 105 17,740
Net income applicable to common shares $37,496 $90,847
Net income per common share,
basic and diluted $0.08 $0.22
Basic weighted average common shares
outstanding 443,145 405,388
Diluted weighted average common shares
outstanding 446,324 408,242
Cash dividends declared per common share $0.075 $0.04
Statement of Consolidated Operations
Six Months Ended June 30,
2004 2003
(unaudited, in thousands,
except per share)
Revenues
Sales - gold, net $1,735,241 $1,438,582
Sales - base metals, net 396,207 32,168
2,131,448 1,470,750
Costs and expenses
Costs applicable to sales
(exclusive of depreciation, depletion
and amortization shown separately below)
Gold 965,693 821,254
Base metals 166,463 25,335
Depreciation, depletion and amortization 355,180 269,930
Exploration, research and development 84,900 52,093
General and administrative 57,651 57,702
Write-down of long-lived assets 16,300 1,794
Other 14,362 25,420
1,660,549 1,253,528
Other income (expense)
(Loss) gain on investments, net (39,494) 84,715
Gain on derivative instruments, net 1,507 71,669
Gain on extinguishment of
NYOL bonds, net -- 94,414
Gain on extinguishment of
NYOL derivative liability, net -- 76,578
Loss on extinguishment of debt (222) (19,530)
Royalty and dividend income 28,518 24,948
Interest income, foreign currency
exchange and other income 16,788 63,638
Interest expense, net of capitalized
interest of $4,898 and $3,048,
respectively (50,433) (52,615)
(43,336) 343,817
Pre-tax income before minority interest,
equity income, impairment of affiliates
and cumulative effect of a change
in accounting principle 427,563 561,039
Income tax expense (117,942) (151,601)
Minority interest in income of subsidiaries (139,915) (73,596)
Equity loss and impairment of
Australian Magnesium Corporation -- (119,485)
Equity income of affiliates 1,609 26,278
Income before cumulative effect
of a change in accounting principle 171,315 242,635
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 $124,177 $208,102
Income per common share before
cumulative effect of a change
in accounting principle, basic $0.39 $0.60
Cumulative effect of a change
in accounting principle per
common share, basic (0.11) (0.08)
Net income per common share, basic $0.28 $0.52
Income per common share before
cumulative effect of a change in
accounting principle, diluted $0.39 $0.60
Cumulative effect of a change
in accounting principle per
common share, diluted (0.11) (0.09)
Net income per common share, diluted $0.28 $0.51
Basic weighted average common shares
outstanding 442,840 403,648
Diluted weighted average common shares
outstanding 446,278 406,305
Cash dividends declared per common share $0.125 $0.08
Consolidated Balance Sheets
June 30, December 31,
2004 2003
(unaudited, in thousands)
ASSETS
Cash and cash equivalents $1,474,825 $1,314,022
Marketable securities and other
short-term investments 201,933 274,593
Trade receivables 75,022 20,055
Accounts receivable 113,436 70,631
Inventories 259,134 225,719
Stockpiles and ore on leach pads 210,820 248,625
Deferred stripping costs 59,363 60,086
Deferred income tax assets 257,597 73,665
Other current assets 62,863 100,280
Current assets 2,714,993 2,387,676
Property, plant and mine development, net 5,268,246 3,715,457
Investments 24,220 733,977
Deferred stripping costs 74,296 30,293
Long-term stockpiles and ore on leach pads 541,732 305,810
Deferred income tax assets 708,383 752,408
Other long-term assets 187,057 106,995
Goodwill 3,088,592 3,042,557
Total assets $12,607,519 $11,075,173
LIABILITIES
Current portion of long-term debt $289,793 $190,866
Accounts payable 221,874 163,164
Employee related benefits 91,905 136,301
Other current liabilities 407,543 368,689
Current liabilities 1,011,115 859,020
Long-term debt 1,466,066 886,633
Reclamation and remediation liabilities 401,879 362,283
Deferred revenue from sale of
future production 51,244 53,841
Deferred income tax liabilities 744,835 633,135
Employee related benefits 256,757 253,726
Advanced stripping costs 74,127 --
Other long-term liabilities 343,648 295,082
Total liabilities 4,349,671 3,343,720
Minority interest in subsidiaries 762,855 346,518
STOCKHOLDERS' EQUITY
Total stockholders' equity 7,494,993 7,384,935
Total liabilities and
stockholders' equity $12,607,519 $11,075,173
Statement of Consolidated Cash Flows
Three Months Ended June 30,
2004 2003
(unaudited, in thousands)
Operating activities:
Net income $37,496 $90,847
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 173,156 139,337
Accretion of accumulated reclamation
obligations 6,025 5,576
Amortization of deferred stripping
costs, net (1,306) (7,752)
Deferred income taxes (8,101) 44,145
Foreign currency exchange loss (gain) 7,994 (27,178)
Minority interest, net of distributions
of $36.6 million and $29.2 million,
respectively 24,228 6,617
Equity (income) loss and impairment
of affiliates, net of dividends 256 90,795
Write-downs of inventories, stockpiles
and ore on leach pads 6,426 10,253
Write-downs of long-lived assets 16,300 1,794
Cumulative effect of a change in
accounting principle, net of tax -- --
Loss (gain) on investments, net 41,299 603
Gain on derivative instruments, net (958) (16,644)
Gain on extinguishment of
NYOL bonds, net -- (94,414)
Gain on extinguishment of
NYOL derivatives liability, net -- (76,578)
Loss on extinguishment of debt 222 --
Gain on sale of assets and other 2,368 (6,820)
(Increase) decrease in operating assets:
Accounts receivable 44,030 2,145
Inventories, stockpiles and ore
on leach pads (9,670) (2,094)
Other assets 10,991 9,323
Increase (decrease) in operating
liabilities:
Accounts payable and other accrued
liabilities (81,645) (20,114)
Derivative instruments (9,225) 4,393
Early settlement of derivative
instruments classified as cash flow
hedges -- (87,209)
Other liabilities (16,802) (11,250)
Net cash provided by operating activities 243,084 55,775
Investing activities:
Additions to property, plant and mine
development (187,164) (136,380)
Investment in marketable equity
securities (93,720) --
Advances to joint venture and
affiliates, net -- 10,021
Cash recorded upon consolidation
of Batu Hijau -- --
Proceeds from the sale of TVX Newmont
Americas -- 9,375
Early settlement of ineffective derivative
instruments -- (26,056)
Cash consideration for acquisition
of minority interests -- (11,195)
Proceeds from asset sales and other 1,754 260
Net cash used in investing activities (279,130) (153,975)
Financing activities:
Proceeds from long-term debt 37,715 115,000
Repayment of long-term debt (54,631) (139,573)
Dividends paid on common stock (33,226) (16,219)
Proceeds from stock issuance 7,050 23,917
Change in restricted cash 10,740 --
Net cash used in financing activities (32,352) (16,875)
Effect of exchange rate changes on cash (5,383) 9,500
Net change in cash and cash equivalents (73,781) (105,575)
Cash and cash equivalents at
beginning of period 1,548,606 380,316
Cash and cash equivalents at
end of period $1,474,825 $274,741
Supplemental information:
Interest paid, net of amounts capitalized $30,780 $37,740
Income taxes paid $103,397 $88,907
Statement of Consolidated Cash Flows
Six Months Ended June 30,
2004 2003
(unaudited, in thousands)
Operating activities:
Net income $124,177 $208,102
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 355,180 269,930
Accretion of accumulated reclamation
obligations 12,854 11,320
Amortization of deferred stripping
costs, net (16,476) (14,114)
Deferred income taxes 14,468 8,745
Foreign currency exchange loss (gain) 8,457 (51,884)
Minority interest, net of distributions
of $65.8 million and $29.2 million,
respectively 74,095 44,406
Equity (income) loss and impairment
of affiliates, net of dividends (119) 99,309
Write-downs of inventories, stockpiles
and ore on leach pads 11,549 17,941
Write-downs of long-lived assets 16,300 1,794
Cumulative effect of a change in
accounting principle, net of tax 47,138 34,533
Loss (gain) on investments, net 39,494 (84,715)
Gain on derivative instruments, net (1,507) (71,669)
Gain on extinguishment of
NYOL bonds, net -- (94,414)
Gain on extinguishment of
NYOL derivatives liability, net -- (76,578)
Loss on extinguishment of debt 222 19,530
Gain on sale of assets and other (6,437) (12,443)
(Increase) decrease in operating assets:
Accounts receivable (14,594) 8,000
Inventories, stockpiles and ore on
leach pads 13,719 (25,574)
Other assets (4,935) 7,332
Increase (decrease) in operating
liabilities:
Accounts payable and other accrued
liabilities (81,471) 40,656
Derivative instruments (7,981) (12,935)
Early settlement of derivative
instruments classified as cash flow
hedges -- (119,988)
Other liabilities (16,983) (12,698)
Net cash provided by operating activities 567,150 194,586
Investing activities:
Additions to property, plant and
mine development (353,406) (219,101)
Investment in marketable equity
securities (93,720) --
Advances to joint venture and
affiliates, net -- (46,203)
Cash recorded upon consolidation
of Batu Hijau 82,203 --
Proceeds from the sale of
TVX Newmont Americas -- 180,000
Early settlement of ineffective
derivative instruments (290) (30,153)
Cash consideration for acquisition
of minority interests -- (11,195)
Proceeds from asset sales and other 12,868 2,641
Net cash used in investing activities (352,345) (124,011)
Financing activities:
Proceeds from long-term debt 37,715 115,000
Repayment of long-term debt (76,900) (322,360)
Dividends paid on common stock (55,373) (32,308)
Proceeds from stock issuance 26,079 24,851
Change in restricted cash 19,244 --
Net cash used in financing activities (49,235) (214,817)
Effect of exchange rate changes on cash (4,767) 17,300
Net change in cash and cash equivalents 160,803 (126,942)
Cash and cash equivalents at
beginning of period 1,314,022 401,683
Cash and cash equivalents at
end of period $1,474,825 $274,741
Supplemental information:
Interest paid, net of amounts capitalized $51,089 $67,297
Income taxes paid $151,544 $110,467
Operating Statistics Summary
Three Months North America South America Australia
Ended June 30, 2004 2003 2004 2003 2004 2003
Production Costs
Per Ounce:
Direct mining and
production costs $308 $262 $150 $127 $281 $227
Capitalized mining
and other (38) (19) (6) (5) 7 --
Cash operating
costs 270 243 144 122 288 227
Royalties and
production taxes 6 8 6 5 14 14
Total cash costs (4) 276 251 150 127 302 241
Reclamation and
mine closure costs 2 4 3 3 3 1
Total costs
applicable to sales 278 255 153 130 305 242
Depreciation and
amortization 59 68 83 64 65 53
Total production
costs (4) $337 $323 $236 $194 $370 $295
Consolidated
gold sales
(000 ounces) 658.9 637.1 625.1 724.7 378.0 530.6
Equity
gold sales
(000 ounces) 633.7 637.1 323.3 392.6 378.0 530.6
Other (1) Equity Investments Total
Three Months Ended and Other (2) (3)
June 30, 2004 2003 2004 2003 2004 2003
Production Costs
Per Ounce:
Direct mining and
production costs $180 $189 -- -- $247 $213
Capitalized mining
and other (1) (18) -- -- (15) (9)
Cash operating
costs 179 171 -- -- 232 204
Royalties and
production taxes 6 4 -- -- 8 8
Total cash
costs (4) 185 175 -- -- 240 212
Reclamation and
mine closure
costs 1 2 -- -- 2 3
Total costs
applicable
to sales 186 177 -- -- 242 215
Depreciation and
amortization 65 66 -- -- 67 62
Total production
costs (4) $251 $243 -- -- $309 $277
Consolidated
gold sales
(000 ounces) 391.3 168.5 5.1 4.8 2,058.4 2,065.7
Equity
gold sales
(000 ounces) 303.3 166.9 5.1 96.7 1,643.4 1,823.9
Average realized
price per
equity ounce $395 $353
Copper Summary (5)
Equity copper
production
(000 pounds) 129,095 96,687
Equity copper
sales
(000 pounds) 126,771 107,362
Total cash cost
per equity pound $0.53 $0.60
Average realized
price per pound $1.08 $0.75
(1) Other includes Batu Hijau (Indonesia) (2004 only), Ovacik (Turkey),
Zarafshan (Uzbekistan), Minahasa (Indonesia) and Martha (New
Zealand).
(2) Equity investments for 2003 only is Batu Hijau.
(3) Includes 5,100 and 4,800 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.
Six Months Ended North America South America Australia
June 30, 2004 2003 2004 2003 2004 2003
Production Costs
Per Ounce:
Direct mining and
production costs $308 $247 $142 $128 $257 $225
Capitalized mining
and other (36) (18) (6) (4) 1 --
Cash operating costs 272 229 136 124 258 225
Royalties and
production taxes 6 9 6 5 14 13
Total cash costs (4) 278 238 142 129 272 238
Reclamation and
mine closure costs 3 3 2 3 3 2
Total costs
applicable to sales 281 241 144 132 275 240
Depreciation and
amortization 58 61 77 59 66 56
Total production
costs (4) $339 $302 $221 $191 $341 $296
Consolidated
gold sales
(000 ounces) 1,400.7 1,384.5 1,432.3 1,436.3 899.3 955.8
Equity
gold sales
(000 ounces) 1,340.3 1,384.5 740.8 779.5 899.3 938.4
Other (1) Equity Investments Total
Six Months Ended and Other (2) (3)
June 30, 2004 2003 2004 2003 2004 2003
Production Costs
Per Ounce:
Direct mining and
production costs $193 $176 -- -- $243 $207
Capitalized mining
and other (7) (8) -- -- (16) (9)
Cash operating costs 186 168 -- -- 227 198
Royalties and
production taxes 5 4 -- -- 8 9
Total cash costs (4) 191 172 -- -- 235 207
Reclamation and
mine closure costs 1 2 -- -- 3 2
Total costs
applicable to sales 192 174 -- -- 238 209
Depreciation and
amortization 68 66 -- -- 65 60
Total production
costs (4) $260 $240 -- -- $303 $269
Consolidated
gold sales
(000 ounces) 603.8 318.3 5.3 6.8 4,341.4 4,101.7
Equity
gold sales
(000 ounces) 470.3 313.3 5.3 188.7 3,456.0 3,604.4
Average realized
price per
equity ounce $404 $352
Copper Summary (5)
Equity copper
production
(000 pounds) 212,002 196,107
Equity copper
sales (000 pounds) 202,855 198,500
Total cash cost
per equity pound $0.57 $0.56
Average realized
price per pound $1.24 $0.80
(1) Other includes Batu Hijau (Indonesia) (2004 only), Ovacik (Turkey),
Zarafshan (Uzbekistan), Minahasa (Indonesia) and Martha (New
Zealand).
(2) Equity investments comprise Batu Hijau (2003 only), TVX Newmont
Americas and Echo Bay Mining Limited.
(3) Includes 5,300 and 6,800 ounces from the wholly-owned Golden Grove
zinc/copper mine in 2004 and 2003, respectively.
(4) For a reconciliation of total cash costs and total production costs
per ounce (non-GAAP measures of performance) to costs applicable to
sales calculated and presented under GAAP, please refer to the
Supplemental Information attached.
(5) Represents both Batu Hijau and Golden Grove except total cash cost
and average realized price per equity pound for 2003 are only
Golden Grove.
2004 Guidance
Equity Gold Total
Sales Cash Costs
(000 oz) ($/oz)
North America
Nevada 2,500 $280
Golden Giant 145 $310
Holloway 80 $330
La Herradura 70 $170
Sub-total 2,795 $280
South America
Yanacocha 1,540 $135
Kori Kollo 20 $315
Sub-total 1,560 $138
Australia (1)
Kalgoorlie 440 $305
Pajingo 275 $190
Tanami 650 $275
Yandal 365 $280
Sub-total 1,730 $270
Other
Batu Hijau 380 $170
Martha 120 $210
Zarafshan 200 $160
Minahasa 70 $270
Ovacik (2) 170 $195
Sub-total 940 $185
TOTAL (3) 7,000-7,200 $225-$235
Equity
Copper & Total
Zinc Sales Cash Costs
(million lbs) ($/lb)
Batu Hijau - Copper 380 $0.53
Golden Grove - Copper 40 $0.85
Golden Grove - Zinc 135 $0.41
Consolidated Financial (in millions, except tax rate)
Royalty revenue $52-$57
Depreciation, depletion & amortization $710-$730
Exploration, research and development $180-$200
- Exploration $115-$125
- Advanced projects $42-$47
- Merchant banking $8-$10
- Research, development and other $15-$18
General and administrative $100-$110
Interest expense, net $100-$105
Tax rate (assuming $400/oz gold) 23%-28%
Capital expenditures $750-$800
Notes:
1. Total cash costs are based on an A$1 = $0.69 exchange rate assumption
for the second half of 2004.
2. Based on 100% ownership for the full year. There is a preliminary
agreement in place for the sale of Ovacik.
3. Excludes Golden Grove by-product sales of approximately 20,000
ounces.
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
June 30, 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry short tons):
Open-Pit 52,026 42,929 n/a n/a 51,926 53,988
Underground 351 436 256 323 n/a n/a
Tons Milled/Processed
(000):
Oxide 975 348 263 322 n/a n/a
Refractory 2,262 2,115 n/a n/a n/a n/a
Leach 5,583 4,537 n/a n/a 37,358 39,971
Average Ore Grade
(oz/ ton):
Oxide 0.125 0.191 0.224 0.213 n/a n/a
Refractory 0.189 0.213 n/a n/a n/a n/a
Leach 0.022 0.031 n/a n/a 0.021 0.029
Average Mill
Recovery Rate:
Oxide 81.5% 86.1% 94.0% 94.9% n/a n/a
Refractory 90.3% 91.3% n/a n/a n/a n/a
Ounces Produced (000): 566.7 536.9 55.2 67.2 612.0 682.1
Equity Ounces Produced
(000):
Oxide 100.3 56.9 55.2 67.2 n/a n/a
Refractory 362.0 388.1 n/a n/a n/a n/a
Leach 79.1 91.9 n/a n/a 314.3 350.3
Total 541.4 536.9 55.2 67.2 314.3 350.3
Equity Ounces Sold
(000) 560.1 535.3 55.4 68.4 317.7 343.7
Production Costs
Per Ounce:
Direct mining and
production costs $312 $267 $313 $260 $147 $117
Capitalized mining
and other (43) (21) 2 1 (6) (4)
Cash operating costs 269 246 315 261 141 113
Royalties and
production taxes 6 8 4 1 6 5
Total cash costs 275 254 319 262 147 118
Reclamation and mine
closure costs 3 3 2 8 2 2
Total costs applicable
to sales 278 257 321 270 149 120
Depreciation and
amortization 56 66 87 81 83 69
Total production costs $334 $323 $408 $351 $232 $189
Kori Kollo,
Three Months Ended Bolivia Other (1)
June 30, 2004 2003 2004 2003
Tons Mined
(000 dry short tons):
Open-Pit n/a 2,894 2,888 3,118
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 1,842 n/a n/a
Leach n/a 1,242 1,126 1,060
Average Ore Grade
(oz/ ton):
Oxide n/a n/a n/a n/a
Refractory n/a 0.038 n/a n/a
Leach n/a 0.017 0.027 0.026
Average Mill
Recovery Rate:
Oxide n/a n/a n/a n/a
Refractory n/a 61.8% n/a n/a
Ounces Produced (000): 6.9 55.2 18.2 33.4
Equity Ounces Produced
(000):
Oxide n/a n/a n/a n/a
Refractory n/a 37.9 n/a n/a
Leach 6.1 10.8 18.2 33.4
Total 6.1 48.7 18.2 33.4
Equity Ounces Sold
(000) 5.6 48.9 18.2 33.4
Production Costs
Per Ounce:
Direct mining and
production costs $299 $199 $157 $179
Capitalized mining
and other (11) (11) 5 (5)
Cash operating costs 288 188 162 174
Royalties and
production taxes 17 -- -- 5
Total cash costs 305 188 162 179
Reclamation and
mine closure costs 42 13 1 3
Total costs applicable
to sales 347 201 163 182
Depreciation and
amortization 86 32 58 74
Total production costs $433 $233 $221 $256
(1) Other includes La Herradura in 2004 and La Herradura and Mesquite
in 2003
(2) Includes Golden Giant and Holloway
Six Months Ended Nevada Canada (2) Yanacocha, Peru
June 30, 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry short tons):
Open-Pit 100,447 87,789 n/a n/a 98,036 101,448
Underground 707 842 526 659 n/a n/a
Tons Milled/Processed
(000):
Oxide 2,042 759 526 668 n/a n/a
Refractory 4,354 4,510 n/a n/a n/a n/a
Leach 9,076 7,603 n/a n/a 65,166 72,793
Average Ore Grade
(oz/ ton):
Oxide 0.139 0.193 0.245 0.235 n/a n/a
Refractory 0.190 0.214 n/a n/a n/a n/a
Leach 0.023 0.030 n/a n/a 0.021 0.028
Average Mill
Recovery Rate:
Oxide 78.7% 87.5% 94.5% 95.1% n/a n/a
Refractory 90.6% 90.3% n/a n/a n/a n/a
Ounces Produced
(000): 1,159.1 1,163.2 124.3 151.7 1,415.6 1,321.5
Equity Ounces
Produced (000):
Oxide 226.5 130.3 124.3 151.7 n/a n/a
Refractory 703.1 846.2 n/a n/a n/a n/a
Leach 169.0 186.7 n/a n/a 726.9 678.6
Total 1,098.6 1,163.2 124.3 151.7 726.9 678.6
Equity Ounces Sold
(000) 1,177.5 1,168.2 127.3 151.7 728.0 678.8
Production Costs
Per Ounce:
Direct mining and
production costs $315 $250 $285 $258 $140 $119
Capitalized mining
and other (41) (21) 1 1 (7) (3)
Cash operating costs 274 229 286 259 133 116
Royalties and
production taxes 7 10 3 1 6 5
Total cash costs 281 239 289 260 139 121
Reclamation and
mine closure costs 3 2 1 7 2 2
Total costs applicable
to sales 284 241 290 267 141 123
Depreciation and
amortization 56 58 78 92 76 63
Total production costs $340 $299 $368 $359 $217 $186
Kori Kollo,
Six Months Ended Bolivia Other (1)
June 30, 2004 2003 2004 2003
Tons Mined
(000 dry short tons):
Open-Pit n/a 6,213 5,516 5,876
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 3,636 n/a n/a
Leach n/a 2,718 2,114 2,017
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 0.026 0.026
Average Mill
Recovery Rate:
Oxide n/a n/a n/a n/a
Refractory n/a 63.1% n/a n/a
Ounces Produced (000): 14.5 113.0 35.5 64.6
Equity Ounces Produced
(000):
Oxide n/a n/a n/a n/a
Refractory n/a 75.2 n/a n/a
Leach 12.8 24.3 35.5 64.6
Total 12.8 99.5 35.5 64.6
Equity Ounces Sold
(000) 12.8 100.7 35.5 64.6
Production Costs
Per Ounce:
Direct mining and
production costs $277 $191 $145 $163
Capitalized mining
and other (10) (11) -- (5)
Cash operating costs 267 180 145 158
Royalties and
production taxes 16 -- -- 6
Total cash costs 283 180 145 164
Reclamation and
mine closure costs 36 10 2 3
Total costs applicable
to sales 319 190 147 167
Depreciation and
amortization 111 34 63 66
Total production costs $430 $224 $210 $233
(1) Other includes La Herradura in 2004 and La Herradura and Mesquite
in 2003
(2) Includes Golden Giant and Holloway
2. Gold Production Summary - Australia
Three Months
Ended Kalgoorlie Pajingo Tanami Yandal
June 30, 2004 2003 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry
short tons) 11,615 11,856 136 199 4,687 5,622 1,948 874
Tons Milled/
Processed
(000) 1,833 1,807 207 201 1,116 1,134 659 1,259
Average Ore
Grade
(oz/ton) 0.066 0.076 0.224 0.464 0.140 0.165 0.110 0.120
Average Mill
Recovery
Rate 85.3% 86.0% 96.2% 96.9% 94.7% 96.7% 92.0% 89.1%
Ounces
Produced
(000) 98.8 101.8 47.1 93.8 152.3 181.0 69.4 137.8
Equity Ounces
Produced
(000) 98.8 101.8 47.1 93.8 152.3 180.9 69.4 137.8
Equity Ounces
Sold (000) 98.5 104.2 48.6 93.8 158.9 190.7 72.0 141.9
Production Costs
Per Ounce:
Direct mining
and production
costs $307 $240 $288 $124 $239 $217 $335 $298
Capitalized
mining and
other 1 22 (7) (4) 17 (8) (1) (2)
Cash operating
costs 308 262 281 120 256 209 334 296
Royalties and
production
taxes 10 10 9 12 21 20 7 9
Total cash
costs 318 272 290 132 277 229 341 305
Reclamation
and mine
closure costs 5 3 2 (1) 3 2 4 3
Total costs
applicable
to sales 323 275 292 131 280 231 345 308
Depreciation
and
amortization 39 29 126 73 63 55 62 52
Total
production
costs $362 $304 $418 $204 $343 $286 $407 $360
Six Months
Ended Kalgoorlie Pajingo Tanami Yandal
June 30, 2004 2003 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry
short tons) 23,479 23,051 310 372 8,430 10,981 4,583 1,729
Tons Milled/
Processed
(000) 3,433 3,444 392 394 2,211 2,232 1,560 2,616
Average
Ore Grade
(oz/ton) 0.069 0.071 0.280 0.431 0.150 0.148 0.124 0.115
Average Mill
Recovery
Rate 86.3% 85.8% 96.2% 96.8% 95.3% 96.3% 92.8% 90.6%
Ounces
Produced
(000) 204.7 193.6 113.3 167.1 317.7 316.4 188.3 282.9
Equity Ounces
Produced
(000) 204.7 193.6 113.3 167.1 317.7 297.2 188.3 282.9
Equity Ounces
Sold (000) 220.4 193.2 123.8 167.8 342.0 296.2 213.1 281.2
Production Costs
Per Ounce:
Direct
mining and
production
costs $302 $239 $228 $116 $236 $229 $261 $274
Capitalized
mining
and other (3) 12 (7) (3) 7 (11) (1) 7
Cash
operating
costs 299 251 221 113 243 218 260 281
Royalties and
production
taxes 9 10 11 11 23 20 8 9
Total cash
costs 308 261 232 124 266 238 268 290
Reclamation
and mine
closure costs 4 3 -- (1) 1 1 5 4
Total costs
applicable
to sales 312 264 232 123 267 239 273 294
Depreciation
and
amortization 33 24 122 74 59 59 79 64
Total
production
costs $345 $288 $354 $197 $326 $298 $352 $358
3. Gold Production Summary - Other
Batu Hijau, Zarafshan, Ovacik,
Three Months Indonesia Uzbekistan Turkey
Ended June 30, 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry short tons) 54,393 61,712 n/a n/a 2,092 1,019
Tons Milled/Processed
(000):
Leach n/a n/a 1,965 2,040 n/a n/a
Mill 13,528 12,063 n/a n/a 125 157
Average Ore Grade
(oz/ton) 0.019 0.015 0.045 0.044 0.347 0.355
Average Mill
Recovery Rate 79.4% 80.1% n/a n/a 95.5% 93.7%
Ounces Produced (000) 204.8 147.8 60.7 60.6 41.1 50.6
Equity Ounces
Produced (000) 115.2 83.2 60.7 60.6 41.1 50.6
Equity Ounces
Sold (000) 111.2 91.9 68.9 61.6 69.5 51.2
Production Costs
Per Ounce:
Direct mining and
production costs $136 n/a $143 $148 $192 $113
Capitalized mining
and other 30 n/a 1 2 (12) (1)
Cash operating costs 166 n/a 144 150 180 112
Royalties and
production taxes 8 n/a -- -- 13 11
Total cash costs 174 n/a 144 150 193 123
Reclamation and
mine closure costs 1 n/a 1 2 2 1
Total costs applicable
to sales 175 n/a 145 152 195 124
Depreciation and
amortization 42 n/a 45 47 125 74
Total production costs $217 n/a $190 $199 $320 $198
Martha, Minahasa,
Three Months Ended New Zealand Indonesia
June 30, 2004 2003 2004 2003
Tons Mined
(000 dry short tons) 1,229 1,526 n/a n/a
Tons Milled/Processed
(000):
Leach n/a n/a n/a n/a
Mill 343 343 170 187
Average Ore Grade
(oz/ton) 0.103 0.073 0.158 0.151
Average Mill
Recovery Rate 90.8% 91.4% 90.1% 90.8%
Ounces Produced (000) 30.5 23.0 24.5 25.7
Equity Ounces
Produced (000) 30.5 23.1 23.0 24.1
Equity Ounces
Sold (000) 30.1 27.7 23.6 26.4
Production Costs
Per Ounce:
Direct mining and
production costs $299 $356 $308 $259
Capitalized mining
and other (93) (119) 3 3
Cash operating costs 206 237 311 262
Royalties and
production taxes -- -- (9) 5
Total cash costs 206 237 302 267
Reclamation and
mine closure costs 3 2 (6) 5
Total costs applicable
to sales 209 239 296 272
Depreciation and
amortization 108 100 5 61
Total production costs $317 $339 $301 $333
Batu Hijau, Zarafshan, Ovacik,
Six Months Ended Indonesia Uzbekistan Turkey
June 30, 2004 2003 2004 2003 2004 2003
Tons Mined
(000 dry
short tons) 112,313 113,347 n/a n/a 3,573 1,909
Tons Milled/
Processed
(000):
Leach n/a n/a 3,944 4,034 n/a n/a
Mill 26,606 24,651 n/a n/a 241 284
Average Ore Grade
(oz/ton) 0.014 0.014 0.046 0.044 0.311 0.334
Average Mill
Recovery Rate 79.2% 78.7% n/a n/a 95.0% 93.5%
Ounces Produced (000) 299.9 272.3 121.8 118.5 71.1 88.1
Equity Ounces
Produced (000) 168.7 153.2 121.8 118.5 71.1 88.1
Equity Ounces
Sold (000) 167.6 146.2 124.8 121.7 75.4 86.2
Production Costs
Per Ounce:
Direct mining and
production costs $140 n/a $144 $144 $208 $111
Capitalized mining
and other 27 n/a 2 2 (20) 2
Cash operating costs 167 n/a 146 146 188 113
Royalties and
production taxes 8 n/a -- -- 14 12
Total cash costs 175 n/a 146 146 202 125
Reclamation and
mine closure costs 2 n/a 1 2 1 --
Total costs applicable
to sales 177 n/a 147 148 203 125
Depreciation and
amortization 42 n/a 47 45 131 83
Total production costs $219 n/a $194 $193 $334 $208
Martha, Minahasa,
Six Months Ended New Zealand Indonesia
June 30, 2004 2003 2004 2003
Tons Mined
(000 dry short tons) 2,374 2,290 n/a n/a
Tons Milled/Processed
(000):
Leach n/a n/a n/a n/a
Mill 712 636 336 372
Average Ore Grade
(oz/ton) 0.084 0.083 0.155 0.165
Average Mill
Recovery Rate 90.6% 90.8% 90.1% 90.4%
Ounces Produced (000) 52.6 48.1 46.8 56.2
Equity Ounces
Produced (000) 52.6 46.5 44.0 52.8
Equity Ounces
Sold (000) 52.7 47.3 49.8 58.1
Production Costs
Per Ounce:
Direct mining and
production costs $352 $293 $302 $242
Capitalized mining
and other (127) (64) 2 3
Cash operating costs 225 229 304 245
Royalties and
production taxes -- -- -- 5
Total cash costs 225 229 304 250
Reclamation and
mine closure costs 3 3 -- 4
Total costs applicable
to sales 228 232 304 254
Depreciation and
amortization 120 100 53 56
Total production costs $348 $332 $357 $310
4. Base Metal Summary - Batu Hijau and Golden Grove
Three Months Ended Six Months Ended
June 30, June 30,
Batu Hijau 2004 (1) 2003 (1) 2004 (1) 2003 (1)
Total tons mined (000) 54,393 61,712 112,313 113,347
Dry tons processed (000) 13,528 12,063 26,606 24,651
Average copper grade 0.82% 0.71% 0.73% 0.70%
Average recovery rate 90.4% 88.7% 88.3% 88.3%
Copper produced (000 lbs) 200,735 151,706 341,804 304,014
Equity copper produced
(000 lbs) 112,913 85,335 192,265 171,008
Equity copper sold (000 lbs) 106,848 91,195 180,667 161,044
Realized copper price per
pound $1.06 $0.77 $1.24 $0.77
Total cash cost per equity
pound $0.46 $0.38 $0.54 $0.40
Noncash cost per equity pound 0.12 0.14 0.14 0.15
Total production cost
per equity pound $0.58 $0.52 $0.68 $0.55
(1) 2003 cash and total cost per pound have been presented pro forma on
a co-product basis for comparability to 2004.
Three Months Ended Six Months Ended
June 30, June 30,
Golden Grove 2004 2003 2004 2003
Total tons mined (000) 380 370 689 693
Dry tons processed (000) 368 353 674 699
Average copper grade 3.64% 4.27% 3.56% 5.00%
Average copper
recovery rate 87.3% 91.8% 87.2% 91.3%
Copper produced (000 lbs) 16,182 11,352 19,737 25,099
Copper sold (000 lbs) 19,923 16,167 22,188 37,456
Realized copper price per pound $1.22 $0.75 $1.24 $0.80
Copper cash cost per pound $0.89 $0.60 $0.84 $0.56
Average zinc grade 10.55% 11.82% 10.46% 12.21%
Average zinc recovery rate 87.3% 88.4% 89.6% 90.6%
Zinc produced (000 lbs) 18,783 35,071 59,077 74,876
Zinc sold (000 lbs) 19,670 28,715 65,118 53,628
Realized zinc price
per pound $0.47 $0.34 $0.47 $0.35
Zinc cash cost per pound $0.37 $0.19 $0.37 $0.25
Gold sold (000 ounces) 5.2 4.8 5.3 6.8
Silver sold (000 ounces) 299.9 551.5 313.7 774.8
5. 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
June 30, 2004 Total
La Golden North
Nevada Herradura Giant Holloway America Yanacocha
Costs
applicable
to sales
under GAAP $162.2 $3.0 $11.0 $6.6 $182.8 $96.0
Minority
interest -- -- -- -- -- (48.6)
Accretion
expense (1.3) -- -- -- (1.3) (0.7)
Write-down of
inventories -- -- -- -- -- --
Purchased ore
and other (6.8) -- -- 0.1 (6.7) --
Total cash cost
for per ounce
calculations 154.1 3.0 11.0 6.7 174.8 46.7
Accretion
expense and
other 1.3 -- -- -- 1.3 0.8
Depreciation,
depletion and
amortization 31.6 1.0 3.2 1.6 37.4 47.9
Minority
interest
and other -- -- -- -- -- (21.6)
Total production
cost for
per ounce
calculations $187.0 $4.0 $14.2 $8.3 $213.5 $73.8
Equity ounces
sold (000) 560.1 18.2 39.5 15.9 633.7 317.7
Equity cash
cost per
ounce sold $275 $162 $277 $423 $276 $147
Equity total
production
cost per
ounce sold $334 $221 $361 $524 $337 $232
Three Months Ended
June 30, 2004 Total
Kori South
Kollo America Pajingo Kalgoorlie Yandal Tanami
Costs applicable
to sales
under GAAP $4.6 $100.6 $14.6 $31.8 $25.1 $44.4
Minority
interest (0.5) (49.1) -- -- -- --
Accretion
expense (0.3) (1.0) (0.1) (0.5) (0.2) (0.4)
Write-down of
inventories (2.1) (2.1) (0.5) -- (0.2) --
Purchased ore
and other -- -- -- -- -- --
Total cash cost
for per ounce
calculations 1.7 48.4 14.0 31.3 24.7 44.0
Accretion expense
and other 0.3 1.1 0.1 0.5 0.2 0.4
Depreciation,
depletion and
amortization 0.5 48.4 6.1 3.9 4.4 10.0
Minority interest
and other (0.1) (21.7) -- -- -- --
Total production
cost for
per ounce
calculations $2.4 $76.2 $20.2 $35.7 $29.3 $54.4
Equity ounces
sold (000) 5.6 323.3 48.6 98.5 72.0 158.9
Equity cash cost
per ounce sold $305 $150 $290 $318 $341 $277
Equity total
production cost
per ounce sold $433 $236 $418 $362 $407 $343
Three Months Ended
June 30, 2004
Total Batu
Australia Hijau Zarafshan Minahasa Martha Ovacik
Costs
applicable
to sales
under GAAP $115.9 $27.2 $10.1 $7.7 $6.3 $13.5
Minority
interest -- (12.4) -- -- -- --
Accretion
expense (1.2) (0.2) -- 0.1 (0.1) (0.1)
Write-down of
inventories (0.7) -- -- (0.2) -- --
Purchased ore
and other -- 4.6 (0.1) (0.5) -- --
Total cash cost
for per ounce
calculations 114.0 19.2 10.0 7.1 6.2 13.4
Accretion
expense
and other 1.2 0.2 -- (0.1) 0.1 0.1
Depreciation,
depletion and
amortization 24.4 8.2 3.1 0.1 3.2 8.7
Minority interest
and other -- (3.6) -- -- -- --
Total production
cost for
per ounce
calculations $139.6 $24.0 $13.1 $7.1 $9.5 $22.2
Equity ounces
sold (000) 378.0 111.2 68.9 23.6 30.1 69.5
Equity cash cost
per ounce sold $302 $174 $144 $302 $206 $193
Equity total
production cost
per ounce sold $370 $217 $190 $301 $317 $320
Three Months Ended
June 30, 2004
Total Other Total
International Gold
Costs applicable
to sales
under GAAP $64.8 $464.1
Minority
interest (12.4) (61.5)
Accretion
expense (0.3) (3.8)
Write-down
of inventories (0.2) (3.0)
Purchased ore
and other 4.0 (2.7)
Total cash cost
for per ounce
calculations 55.9 393.1
Accretion expense
and other 0.3 3.9
Depreciation,
depletion and
amortization 23.3 133.5
Minority interest
and other (3.6) (25.3)
Total production
cost for
per ounce
calculations $75.9 $505.2
Equity ounces
sold (000) 303.3 1,638.3
Equity cash cost
per ounce sold $185 $240
Equity total
production
cost per
ounce sold $251 $309
Three Months Ended
June 30, 2003 Total
La Golden North
Nevada Mesquite Herradura Giant Holloway America
Costs applicable
to sales
under GAAP $138.4 $2.4 $3.5 $13.8 $4.7 $162.8
Minority
interest -- -- -- -- -- --
Accretion
expense (1.5) - - (0.5) (0.1) (2.1)
Write-down of
inventories -- -- -- -- -- --
Purchased ore
and other (3.2) -- -- -- -- (3.2)
Total cash cost
for per ounce
calculations 133.7 2.4 3.5 13.3 4.6 157.5
Accretion
expense
and other 1.5 -- -- 0.4 0.1 2.0
Depreciation,
depletion and
amortization 34.7 1.6 0.9 4.4 1.1 42.7
Minority interest
and other -- -- -- -- -- --
Total production
cost for
per ounce
calculations $169.9 $4.0 $4.4 $18.1 $5.8 $202.2
Equity ounces
sold (000) 535.3 15.6 17.8 53.8 14.6 637.1
Equity cash cost
per ounce sold $254 $153 $201 $248 $310 $251
Equity total
production cost
per ounce sold $323 $260 $253 $338 $396 $323
Three Months Ended
June 30, 2003
Total
Kori South
Yanacocha Kollo America Pajingo Kalgoorlie Yandal
Costs
applicable
to sales
under GAAP $83.5 $11.2 $94.7 $12.4 $29.7 $45.4
Minority
interest (42.3) (1.3) (43.6) -- -- --
Accretion
expense (0.9) (0.7) (1.6) (0.1) (0.3) (0.4)
Write-down of
inventories -- -- -- -- (1.0) (1.7)
Purchased ore
and other -- -- -- -- -- --
Total cash cost
for per ounce
calculations 40.3 9.2 49.5 12.3 28.4 43.3
Accretion
expense
and other 0.9 0.7 1.6 (0.1) 0.3 0.4
Depreciation,
depletion and
amortization 40.4 1.7 42.1 6.9 3.0 7.4
Minority interest
and other (16.9) (0.2) (17.1) -- -- --
Total production
cost for
per ounce
calculations $64.7 $11.4 $76.1 $19.1 $31.7 $51.1
Equity ounces
sold (000) 343.7 48.9 392.6 93.8 104.2 141.9
Equity cash cost
per ounce sold $118 $188 $127 $132 $272 $305
Equity total
production cost
per ounce sold $189 $233 $194 $204 $304 $360
Three Months Ended
June 30, 2003
Total Batu
Tanami Australia Hijau(1) Zarafshan Minahasa Martha
Costs
applicable
to sales
under GAAP $45.8 $133.3 n/a $9.4 $7.7 $7.8
Minority
interest 0.1 0.1 n/a -- -- (0.1)
Accretion
expense (0.6) (1.4) n/a (0.1) (0.3) (0.1)
Write-down of
inventories (2.0) (4.7) n/a -- -- (1.2)
Purchased ore
and other -- -- n/a -- (0.5) --
Total cash cost
for per ounce
calculations 43.3 127.3 n/a 9.3 6.9 6.4
Accretion
expense
and other 0.2 0.8 n/a 0.1 0.3 --
Depreciation,
depletion and
amortization 11.1 28.4 n/a 2.9 1.7 2.9
Minority
interest
and other 0.1 0.1 n/a -- (0.1) (0.1)
Total production
cost for
per ounce
calculations $54.7 $156.6 n/a $12.3 $8.8 $9.2
Equity ounces
sold (000) 190.7 530.6 n/a 61.6 26.4 27.7
Equity cash cost
per ounce sold $229 $241 n/a $150 $267 $237
Equity total
production
cost per
ounce sold $286 $295 n/a $199 $333 $339
Three Months Ended
June 30, 2003
Total
Other Total
Ovacik International Gold
Costs applicable
to sales
under GAAP $6.5 $31.4 $422.2
Minority
interest -- (0.1) (43.6)
Accretion
expense -- (0.5) (5.6)
Write-down of
inventories -- (1.2) (5.9)
Purchased ore
and other -- (0.5) (3.7)
Total cash cost
for per ounce
calculations 6.5 29.1 363.4
Accretion
expense
and other (0.1) 0.3 4.7
Depreciation,
depletion and
amortization 3.8 11.3 124.5
Minority
interest
and other -- (0.2) (17.2)
Total production
cost for
per ounce
calculations $10.2 $40.5 $475.4
Equity ounces
sold (000) 51.2 166.9 1,727.2
Equity cash cost
per ounce sold $123 $175 $212
Equity total
production cost
per ounce sold $198 $243 $277
Six Months Ended
June 30, 2004
Total
La Golden North
Nevada Herradura Giant Holloway America Yanacocha
Costs
applicable
to sales
under GAAP $354.9 $5.2 $23.9 $12.8 $396.8 $207.9
Minority
interest -- -- -- -- -- (105.0)
Accretion
expense (2.7) -- (0.1) -- (2.8) (1.5)
Write-down of
inventories -- -- -- -- -- --
Purchased ore
and other (20.9) -- 0.1 0.1 (20.7) (0.1)
Total cash cost
for per ounce
calculations 331.3 5.2 23.9 12.9 373.3 101.3
Accretion
expense
and other 2.7 -- 0.1 -- 2.8 1.5
Depreciation,
depletion and
amortization 66.7 2.2 6.5 3.4 78.8 102.2
Minority
interest
and other -- -- -- -- -- (46.7)
Total production
cost for
per ounce
calculations $400.7 $7.4 $30.5 $16.3 $454.9 $158.3
Equity ounces
sold (000) 1,177.5 35.5 92.2 35.1 1,340.3 728.0
Equity cash
cost per
ounce sold $281 $145 $259 $368 $278 $139
Equity total
production
cost per
ounce sold $340 $210 $331 $466 $339 $217
Six Months Ended
June 30, 2004
Total
Kori South
Kollo America Pajingo Kalgoorlie Yandal Tanami
Costs
applicable
to sales
under GAAP $7.0 $214.9 $29.3 $68.8 $58.5 $94.2
Minority
interest (0.8) (105.8) -- -- -- --
Accretion
expense (0.5) (2.0) (0.2) (0.9) (1.1) (0.6)
Write-down of
inventories (2.1) (2.1) (0.5) -- (0.2) (2.7)
Purchased ore
and other -- (0.1) -- -- -- --
Total cash cost
for per ounce
calculations 3.6 104.9 28.6 67.9 57.2 90.9
Accretion
expense
and other 0.5 2.0 -- 0.9 1.1 0.4
Depreciation,
depletion and
amortization 1.6 103.8 15.2 7.4 16.7 20.0
Minority
interest
and other (0.2) (46.9) -- -- -- --
Total production
cost for
per ounce
calculations $5.5 $163.8 $43.8 $76.2 $75.0 $111.3
Equity ounces
sold (000) 12.8 740.8 123.8 220.4 213.1 342.0
Equity cash cost
per ounce sold $283 $142 $232 $308 $268 $266
Equity total
production cost
per ounce sold $430 $221 $354 $345 $352 $326
Six Months Ended
June 30, 2004
Total Batu
Australia Hijau Zarafshan Minahasa Martha Ovacik
Costs
applicable
to sales
under GAAP $250.8 $40.8 $18.5 $16.4 $12.1 $15.4
Minority
interest -- (18.5) -- -- -- --
Accretion
expense (2.8) (0.3) (0.1) -- (0.2) (0.2)
Write-down of
inventories (3.4) -- -- (0.2) -- --
Purchased ore
and other -- 7.3 (0.1) (1.0) -- --
Total cash cost
for per ounce
calculations 244.6 29.3 18.3 15.2 11.9 15.2
Accretion
expense
and other 2.4 0.3 0.1 -- 0.2 0.1
Depreciation,
depletion and
amortization 59.3 12.5 5.8 2.8 6.3 9.9
Minority
interest
and other -- (5.5) -- (0.2) -- --
Total production
cost for
per ounce
calculations $306.3 $36.6 $24.2 $17.8 $18.4 $25.2
Equity ounces
sold (000) 899.3 167.6 124.8 49.8 52.7 75.4
Equity cash cost
per ounce sold $272 $175 $146 $304 $225 $202
Equity total
production cost
per ounce sold $341 $219 $194 $357 $348 $334
Six Months Ended
June 30, 2004
Total Other Total
International Gold
Costs
applicable
to sales
under GAAP $103.2 $965.7
Minority
interest (18.5) (124.3)
Accretion
expense (0.8) (8.4)
Write-down of
inventories (0.2) (5.7)
Purchased ore
and other 6.2 (14.6)
Total cash cost
for per ounce
calculations 89.9 812.7
Accretion
expense
and other 0.7 7.9
Depreciation,
depletion and
amortization 37.3 279.2
Minority
interest
and other (5.7) (52.6)
Total production
cost for
per ounce
calculations $122.2 $1,047.2
Equity ounces
sold (000) 470.3 3,450.7
Equity cash cost
per ounce sold $191 $235
Equity total
production
cost per
ounce sold $260 $303
Six Months Ended
June 30, 2003
Total
La Golden North
Nevada Mesquite Herradura Giant Holloway America
Costs
applicable
to sales
under GAAP $283.9 $5.0 $5.7 $30.5 $10.1 $335.2
Minority
interest -- -- -- -- -- --
Accretion
expense (3.1) (0.1) - (1.0) (0.2) (4.4)
Write-down of
inventories (1.0) -- -- -- -- (1.0)
Purchased ore
and other (3.2) -- -- -- -- (3.2)
Total cash cost
for per ounce
calculations 276.6 4.9 5.7 29.5 9.9 326.6
Accretion
expense
and other 3.1 0.1 -- 0.9 0.2 4.3
Depreciation,
depletion and
amortization 66.3 2.5 1.7 11.6 2.4 84.5
Minority
interest
and other -- -- -- -- -- --
Total production
cost for
per ounce
calculations $346.0 $7.5 $7.4 $42.0 $12.5 $415.4
Equity ounces
sold (000) 1,168.2 30.2 34.4 119.0 32.7 1,384.5
Equity cash cost
per ounce sold $239 $163 $166 $249 $301 $238
Equity total
production cost
per ounce sold $299 $250 $218 $353 $382 $302
Six Months Ended
June 30, 2003
Total
Kori South
Yanacocha Kollo America Pajingo Kalgoorlie Yandal
Costs
applicable
to sales
under GAAP $169.0 $21.8 $190.8 $20.8 $52.1 $85.1
Minority
interest (85.4) (2.6) (88.0) -- -- --
Accretion
expense (1.7) (1.1) (2.8) (0.1) (0.8) (1.1)
Write-down of
inventories -- -- -- -- (1.0) (2.4)
Purchased ore
and other -- -- -- -- -- --
Total cash cost
for per ounce
calculations 81.9 18.1 100.0 20.7 50.3 81.6
Accretion
expense
and other 1.7 1.1 2.8 (0.1) 0.8 1.1
Depreciation,
depletion and
amortization 75.9 3.9 79.8 12.5 4.6 18.0
Minority
interest
and other (33.1) (0.5) (33.6) -- -- --
Total production
cost for
per ounce
calculations $126.4 $22.6 $149.0 $33.1 $55.7 $100.7
Equity ounces
sold (000) 678.8 100.7 779.5 167.8 193.2 281.2
Equity cash cost
per ounce sold $121 $180 $129 $124 $261 $290
Equity total
production cost
per ounce sold $186 $224 $191 $197 $288 $358
Six Months Ended
June 30, 2003
Total Batu
Tanami Australia Hijau(1) Zarafshan Minahasa Martha
Costs
applicable
to sales
under GAAP $77.4 $235.4 n/a $18.0 $17.1 $13.9
Minority
interest (4.3) (4.3) n/a -- -- (0.4)
Accretion
expense (0.5) (2.5) n/a (0.2) (0.3) (0.2)
Write-down of
inventories (2.0) (5.4) n/a -- (1.3) (2.6)
Purchased ore
and other -- -- n/a -- (1.0) --
Total cash cost
for per ounce
calculations 70.6 223.2 n/a 17.8 14.5 10.7
Accretion
expense
and other 0.1 1.9 n/a 0.2 0.3 0.1
Depreciation,
depletion and
amortization 18.7 53.8 n/a 5.5 3.4 4.9
Minority
interest
and other (1.0) (1.0) n/a -- (0.2) (0.1)
Total production
cost for
per ounce
calculations $88.4 $277.9 n/a $23.5 $18.0 $15.6
Equity ounces
sold (000) 296.2 938.4 n/a 121.7 58.1 47.3
Equity cash cost
per ounce sold $238 $238 n/a $146 $250 $229
Equity total
production cost
per ounce sold $298 $296 n/a $193 $310 $332
Six Months Ended
June 30, 2003
Total Other Total
Ovacik International Gold
Costs applicable
to sales
under GAAP $10.9 $59.9 $821.3
Minority
interest -- (0.4) (92.7)
Accretion
expense (0.1) (0.8) (10.5)
Write-down of
inventories -- (3.9) (10.3)
Purchased ore
and other -- (1.0) (4.2)
Total cash cost
for per ounce
calculations 10.8 53.8 703.6
Accretion
expense
and other -- 0.6 9.6
Depreciation,
depletion and
amortization 7.2 21.0 239.1
Minority interest
and other -- (0.3) (34.9)
Total production
cost for
per ounce
calculations $18.0 $75.1 $917.4
Equity ounces
sold (000) 86.2 313.3 3,415.7
Equity cash cost
per ounce sold $125 $172 $207
Equity total
production cost
per ounce sold $208 $240 $269
6. Reconciliation of Batu Hijau Costs Applicable to Sales to Total
Production Cost Per Equity Copper Pound
(in millions, except per pound)
Three Months Ended Six Months Ended
June 30, June 30,
2004 (1) 2003 (1) 2004 (1) 2003 (1)
Costs applicable to sales
per financial statements $70.8 $31.8 $134.6 $61.1
Minority interest (31.8) (5.0) (61.0) (12.5)
Accretion expense (0.4) (0.8) (0.9) (1.7)
Smelting and refining 10.7 9.1 25.0 17.5
Total cash cost for
per pound calculation 49.3 35.1 97.7 64.4
Accretion expense 0.4 0.7 0.9 1.8
Depreciation, depletion
and amortization 21.5 19.9 42.6 38.6
Minority interest (9.5) (8.7) (18.7) (16.9)
Total production cost
for per pound calculation $61.7 $47.0 $122.5 $87.9
Equity copper sold
(000 lbs) 106,848 91,195 180,667 161,044
Total cash cost
per equity pound $0.46 $0.38 $0.54 $0.40
Total production cost
per equity pound $0.58 $0.52 $0.68 $0.55
(1) 2004 and 2003 cash and total production cost per pound presented on
a co-product basis.
7. Reconciliation of Golden Grove Costs Applicable to Sales to Copper
and Zinc Cash Costs Per Pound (in millions, except per pound)
Three Months Ended June 30,
2004 2003
Total Copper Zinc Total Copper Zinc
Costs applicable
to sales per
financial
statements $22.3 $16.6 $5.7 $9.7 $8.8 $0.9
Accretion expense (0.2) (0.1) (0.1) (0.1) (0.1) --
Write-down
inventories (3.5) (0.9) (2.6) (3.6) (1.5) (2.1)
Smelting and
refining 6.2 2.1 4.1 9.1 2.6 6.5
Total cash cost
for per pound
calculation $24.8 $17.7 $7.1 $15.1 $9.8 $5.3
Total sold
(000 lbs) n/a 19,923 19,670 n/a 16,167 28,715
Total cash cost
per pound sold n/a $0.89 $0.37 n/a $0.60 $0.19
Six Months Ended June 30,
2004 2003
Total Copper Zinc Total Copper Zinc
Costs applicable
to sales per
financial
statements $31.4 $17.1 $14.3 $24.9 $17.8 $7.1
Accretion expense (0.3) (0.1) (0.2) (0.2) (0.1) (0.1)
Write-down
inventories (3.5) (0.9) (2.6) (6.8) (2.9) (3.9)
Smelting and
refining 15.3 2.6 12.7 16.3 6.2 10.1
Total cash cost
for per pound
calculation $42.9 $18.7 $24.2 $34.2 $21.0 $13.2
Total sold
(000 lbs) n/a 22,188 65,118 n/a 37,456 53,628
Total cash cost
per pound sold n/a $0.84 $0.37 n/a $0.56 $0.25
8. Gold Hedge Position - Current Maturity Summary (1) (000 ounces)
Gold Put Price
Option Capped
Contracts Contracts
Years Ozs Price (2) Ozs Price (2)
2004 98 $293 -- --
2005 205 $292 500 $350
2006 100 $338 -- --
2007 20 $397 -- --
2008 -- -- 1,000 $384
2009 -- -- 600 $381
2010 -- -- -- --
2011 -- -- 250 $392
Total/Average 423 $308 2,350 $377
The mark-to-market value of the gold put option contracts was negative
$9 million at June 30, 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 second quarter earnings conference call and web cast
presentation will be held on Wednesday, July 28, 2004 beginning at 4:00 p.m.
Eastern Time (2:00 p.m. Mountain Time). To participate:
Dial-In Number: (312) 470-7109
Leader: Russell Ball
Password: Newmont
The conference call will also be simultaneously carried on our web site at
www.newmont.com 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- 07/28/2004 AA LAW040
/PRNewswire -- July 28/
/FIRST AND FINAL ADD/
/Web site: http://www.newmont.com/
(NEM)
CO: Newmont Mining Corporation
ST: Colorado
IN: MNG
SU: ERN ERP CCA