Exhibit 99.1
Newmont Announces Third Quarter Net Income of
$128.7 million ($0.29 per share); Nine Month Net Income of
$252.9 million ($0.57 per share)
DENVER, Oct. 27 /PRNewswire-FirstCall/ -- Newmont Mining Corporation
(NYSE: NEM) today announced third quarter net income applicable to common
shares of $128.7 million ($0.29 per share) compared with net income of $114.4
million ($0.28 per share) for the third quarter of 2003. Net cash provided by
operating activities for the quarter increased 32% to $339.3 million from
$256.7 million for the third quarter of 2003. Newmont sold 1.73 million
equity ounces of gold at total cash costs of $233 per ounce during the
quarter.
Wayne W. Murdy, Chairman and Chief Executive Officer, said, "Our higher
third quarter cash flow and earnings reflected the strength and flexibility of
our asset portfolio. We continue to expect equity gold sales of approximately
seven million ounces for 2004. We also remain optimistic for reserve growth
in 2004 through our ongoing exploration success in Ghana and elsewhere."
Third Quarter Nine Months
2004 2003 2004 2003
Financial (in millions, except
per share)
Revenues $1,162.7 $881.2 $3,294.1 $2,351.9
Net cash provided by operating
activities $339.3 $256.7 $972.3 $480.5
Net income applicable to
common shares $128.7 $114.4 $252.9 $322.5
Net income per common share,
basic $0.29 $0.28 $0.57 $0.80
Operating
Equity gold sales
(000 ounces)(1) 1,734.7 2,064.1 5,190.4 5,668.5
Average realized price
($/equity ounce) $404 $366 $404 $357
Total cash costs (
$/equity ounce)(2) $233 $201 $235 $205
Total production costs
($/equity ounce)(2) $296 $265 $301 $268
1. Equity gold sales 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
Third quarter net income applicable to common shares was $128.7 million
($0.29 per share), compared with $114.4 million ($0.28 per share) for the
third quarter of 2003. For the first nine months, net income applicable to
common shares was $252.9 million ($0.57 per share), compared with net income
of $322.5 million ($0.80 per share) for the first nine months of 2003.
Net income for the third quarter of 2004 was impacted by the following
items:
- an $8.2 million ($0.02 per share) non-cash write-down of assets in
Australia and at Yanacocha;
- a $6.0 million ($0.01 per share) charge for increased Australian legacy
site reclamation accruals;
- a $7.3 million ($0.02 per share) gain on the sale of the Bronzewing
mine in Australia; and
- other miscellaneous charges of $3.9 million ($0.01 per share).
These transactions had the effect of reducing net income for the third
quarter of 2004 by $10.8 million ($0.02 per share).
Net income for the third quarter of 2003 was impacted by the following
items:
- a net $13.6 million ($0.03 per share) loss on investments, primarily
related to the sale of 28 million shares of Kinross Gold;
- a $32.8 million ($0.08 per share) loss for the change in fair value of
gold derivative instruments that did not qualify as "effective hedges"
and were thus recognized in income;
- a $14.5 million ($0.04 per share) gain on the extinguishment of Yandal
bonds;
- a $20.9 million ($0.05 per share) gain on the extinguishment of Yandal
derivative liabilities; and
- other miscellaneous charges totaling $3.0 million ($0.01 per share).
These transactions had the effect of reducing net income for the third
quarter of 2003 by $14.0 million ($0.03 per share).
For the third quarter of 2004, the Company sold 1,734,700 equity ounces of
gold, 16% lower than the third quarter of 2003. During the first nine months
of 2004, the Company sold 5,190,400 equity ounces of gold, compared with
5,668,500 equity ounces sold in the first nine months of 2003. The decreases
in both periods primarily represented lower sales in Nevada due to increased
stripping and lower grades as well as operations that have been sold.
The average realized gold price in the quarter was $404 per equity ounce,
a 10% increase over the prior year quarter. For the first nine months, the
average realized gold price was $404 per equity ounce, a 13% increase over the
prior year period.
The Company generated net cash from operating activities of $339.3 million
in the third quarter and $972.3 million for the first nine months of 2004. In
the third quarter of 2004, Newmont reclassified dividends paid to minority
interests from the operating activities section to the financing activities
section of the cash flow statement for 2003 and 2004. Previously, dividends
paid to minority interests were netted against "minority interest" in the
operating activities section of the cash flow statement. Net cash provided by
operating activities for 2003 was negatively impacted by the early settlement
of derivative instruments classified as cash flow hedges.
Operating Highlights - Third Quarter
North America Q3 Q3 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 625.8 786.2 1,966.0 2,170.7
Total cash costs ($/ounce)(1) $292 $239 $283 $238
* Nevada operations sold 570,400 equity ounces in the third quarter
(-18%) with 10% lower mill ore grade and 16% lower leach production.
Higher total cash costs of $287 per ounce (+20%) were primarily
attributable to lower grade ore resulting from continued stripping at
Gold Quarry and Twin Creeks as well as higher diesel, electricity and
equipment maintenance costs. Major stripping campaigns at Gold Quarry
and Twin Creeks are expected to augment production and decrease total
cash costs beginning in 2005.
* Golden Giant in Canada sold 26,200 ounces in the third quarter (-39%)
at total cash costs of $418 per ounce (+76%). Lower sales and higher
costs were primarily due to a temporary production suspension caused by
an ore hoisting system failure in late June 2004, from decreasing
access, lower mill ore grades (-24%), and from appreciation of the
Canadian dollar.
* Holloway in Canada sold 13,300 equity ounces in the third quarter
(-24%) at total cash costs of $376 per ounce (+27%). Lower sales
resulted from a 7% decrease in mill throughput and a build in inventory
that was partially offset by 5% higher mill ore grades. Higher unit
costs were attributable to lower production and increased costs for
manpower, steel and electricity and from appreciation of the Canadian
dollar.
* La Herradura in Mexico sold 15,900 equity ounces in the third quarter
(-4%) at total cash costs of $179 per ounce (-1%). Lower leach tons
placed (-5%) offset higher ore grades mined (+6%).
South America Q3 Q3 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 401.0 495.0 1,141.8 1,274.5
Total cash costs ($/ounce)(1) $140 $121 $141 $125
* Yanacocha in Peru sold 397,000 equity ounces in the third quarter
(-12%) at total cash costs of $139 per ounce (+23%). Lower gold sales
resulted from a 9% decrease in leach tons placed and a slower recovery
rate at La Quinua. Increased costs for diesel, reagent and waste
stripping, as well as higher fuel consumption from longer haul
distances impacted costs. The temporary scaling back of mining
operations due to a blockade of the mine's access road during the
quarter did not change the full year 2004 equity gold sales forecast of
1.54 million equity ounces at total cash costs of approximately $135
per ounce.
* Kori Kollo in Bolivia sold 4,000 equity ounces (-91%) at total cash
costs of $235 per ounce (+18%). Open-pit mining activities were
completed in October 2003 with production continuing from residual
leaching.
Australia/New Zealand Q3 Q3 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 472.6 541.6 1,429.8 1,534.1
Total cash costs ($/ounce)(1) $269 $234 $269 $236
* The Australian and New Zealand operations sold 472,600 equity ounces
(-13%) in the third quarter, with lower gold sales largely attributable
to the sale of two Yandal mines. Total cash costs of $269 per equity
ounce were up 15% from the year ago quarter, largely due to stronger
Australian and New Zealand dollar exchange rates and higher fuel and
consumable costs. Over the past 12 months, the Australian and New
Zealand dollars have risen approximately 7% and 14% respectively
against the US dollar. In the third quarter:
* Kalgoorlie sold 124,800 equity ounces (+8%) at total cash costs of
$278 per ounce (+5%). Increased gold sales were the result of 15%
higher ore grades.
* Pajingo sold 58,300 ounces (-36%) at total cash costs of $226 per
ounce (+77%). Lower gold sales were primarily due to lower mill ore
grade (-36%). Higher cash costs reflected lower production due to
lower ore grades.
* Tanami sold 163,800 ounces (+7%) at total cash costs of $273 per
ounce (+13%). Higher sales resulted from higher ore grades (+18%) at
Groundrush, partially offset by lower mill throughput (-5%). Higher
cash costs were impacted by increased underground backfill costs.
* Yandal sold 77,900 ounces (-49%) at total cash costs of $308 per
ounce (+14%). Lower sales largely reflected the sale of the Wiluna
and Bronzewing mines. At Jundee, higher cash costs reflected
increased open-pit mining costs.
* Martha in New Zealand sold 37,600 ounces (+44%) at total cash costs
of $206 per ounce (-5%). Higher gold sales reflected increased ore
grades (+54%), partially offset by a lower recovery rate (-5%).
Lower cash costs resulted from higher production.
* Golden Grove sold 7.4 million pounds of copper (-15%) and 27.3
million pounds of zinc (+188%). Total cash costs were $0.89 and
$0.40 per pound, respectively, compared to the year ago quarter of
$0.47 and $0.05 per pound, respectively. Higher cash costs reflected
lower by-product credits and increased ground support costs.
Indonesia Q3 Q3 YTD YTD
2004 2003 2004 2003
Equity copper sales (M lbs) 111.3 103.2 292.0 264.3
Total cash costs ($/lb Cu)(1),(2) $0.56 $0.34 $0.55 $0.38
Equity gold sales (000 ozs) 154.5 139.6 371.9 343.9
Total cash costs ($/oz Au) (1),(2) $163 $159 $188 $182
* 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 cash costs are
impacted by relative movements in the copper and gold prices.
* Batu Hijau sold 111.3 million equity pounds of copper in the third
quarter (+8%) at total cash costs of $0.56 per pound. Higher copper
sales reflected increased throughput (+7%) from crusher modifications
completed in late 2003. Improved copper ore grades (+7%) were offset
by an inventory increase due to shipment timing. Costs were impacted
by higher treatment and refining charges and higher mining and
processing costs associated with harder ores. The realized copper
price for the third quarter was $1.42 per pound, a 69% increase from
the 2003 third quarter.
* Batu Hijau sold 134,100 equity ounces of gold (+15%) at total cash
costs of $166 per ounce in the third quarter. Increased gold sales
reflected increased throughput (+7%) and higher gold ore grades (+12%),
offset by an increase in inventory.
* Newmont's economic interest in Batu Hijau for the third quarter was
56.25%. Effective October 1, 2004, Newmont's economic interest
decreased to 52.875%, reflecting cumulative positive retained earnings
at the end of the third quarter resulting in the initiation of dividend
payments to the minority partner.
* Minahasa in Indonesia sold 20,400 equity ounces (-12%) at total cash
costs of $146 per ounce (-20%) in the third quarter. Although mining
ceased at Minahasa in October 2001, stockpiled ore was processed until
the mine closed in August 2004.
* Following recent accusations related to alleged pollution in Buyat Bay
near the Minahasa mine, five Minahasa employees were detained for
questioning by Indonesian police during the quarter. Independent tests
conducted by the World Health Organization, the Indonesian Government
and the Australian Commonwealth Scientific and Industrial Research
Organization have all demonstrated that Minahasa has not caused
environmental pollution. The five Minahasa employees were recently
released from the police detention facility in Jakarta. Newmont
remains steadfast that Minahasa did not cause environmental pollution
and will continue to defend Minahasa, its employees and the Company's
reputation against all accusations.
Central Asia/Europe Q3 Q3 YTD YTD
2004 2003 2004 2003
Equity gold sales (000 ozs) 80.8 101.7 280.9 309.6
Total cash costs ($/ounce)(1) $169 $141 $168 $138
* Zarafshan in Uzbekistan sold 46,100 equity ounces (-8%) at total cash
costs of $165 per ounce (+8%) in the third quarter. Lower gold sales
were primarily attributable to lower leach grade (-9%) due to the
transition to a lower grade ore zone and decreased crusher throughput
(-5%) from a conveyor change over.
* Ovacik in Turkey sold 34,700 ounces (-33%) at total cash costs of $174
per ounce (+36%) in the third quarter. In July 2004, a Turkish court
ordered the suspension of operating permits pending the completion of
certain additional permitting requirements, including the submission of
an updated environmental impact assessment. The operation is complying
with the court's order and is working with the Turkish authorities to
obtain permission to reopen the mine. Lower sales reflected the
suspension, partially offset by a reduction in inventories. Increased
cash costs were the result of lower production.
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. 2003 total cash costs for Indonesia included pro forma results for
Batu Hijau to reflect the change to co-product accounting effective
January 1, 2004.
Other Highlights
Cash, Marketable Securities and Debt
At the end of the third quarter, cash and cash equivalents totaled $1.4
billion and outstanding debt totaled $1.7 billion. Of the outstanding debt,
$784.1 million was Batu Hijau debt that is non-recourse to Newmont. During
the third quarter, outstanding debt decreased by $66 million.
At the close of markets on September 30, the value of the Company's marketable
securities and other short-term investments portfolio was $413.4 million.
Newmont Capital
Newmont Capital manages the Company's royalty and marketable securities
portfolios as well as asset transactions. For the third quarter, royalty and
dividend income was $19.1 million compared to $15.8 million for the year ago
quarter. For the nine months, royalty and dividend income was $47.6 million
compared with $40.8 million for the same period in 2003. The increases
primarily reflected higher oil and gas prices and distributions from the
Canadian Oil Sands Trust investment made in 2004.
During the third quarter, Newmont Capital entered into or closed the
following transactions and agreements, reflecting new strategic investments
and ongoing portfolio optimization efforts:
- the purchase of additional units of the Canadian Oil Sands Trust,
increasing Newmont's position to 6 million units (or approximately 6.8%
of units outstanding) and raising the total cost basis of the
investment to approximately $200 million;
- the acquisition of a 10.2% equity interest in Gabriel Resources Ltd,
which is advancing the Rosia Montana gold project in Romania;
- the sale of the Bronzewing mine in Western Australia;
- an agreement to facilitate the restructuring of Australian Magnesium
Corporation (AMC) and eliminate all remaining associated Newmont
guarantees and obligations in exchange for an injection of subordinated
debt, pending approval by AMC shareholders in the fourth quarter in
2004; and
- an agreement to sell Newmont's joint venture minority interest in the
Midwest uranium deposit in Saskatchewan to Denison Mines Ltd.
Project Development & Exploration
The Leeville project in Nevada remains on schedule for initial gold
production in late 2005. The production and ventilation shafts were 1,441
feet (79% complete) and 1,380 feet (94% complete), respectively, from the
surface at the end of the third quarter. The drift from the Carlin East
underground mine to the Leeville ventilation shaft was completed during the
quarter.
At Phoenix in Nevada, engineering is approximately 51% complete with
construction scheduled to commence in the fourth quarter. This project
remains on schedule for initial gold production in mid-2006.
At Gold Quarry/Dos Equis, ongoing stripping has started to uncover higher
grade refractory ores. Year-end 2003 reserves were 6 million ounces after
2003 additions extended the mine life from 6 to 11 years. Exploration results
this year have identified mineralization extensions containing additional
refractory and oxide ores.
At the Ahafo project in Ghana, engineering work is progressing with
long-lead-time equipment ordered. Camp and infrastructure construction have
commenced, along with earth work preparation for the mill and the water
storage dam. The Afaho project remains on schedule for initial gold
production in the second half of 2006.
At Akyem in Ghana, the feasibility study update is progressing on
schedule. A development decision is expected in the first quarter of 2005.
At Boddington in Australia, completion of the feasibility study update is
expected by mid-2005. The community engagement planning process and a
detailed social impact assessment commenced in October with metallurgical test
work and geological modeling continuing.
Kori Chaca, a new oxide satellite deposit at the Kori Kollo mine in
Bolivia, is scheduled for development in 2005 with leaching expected to begin
in the second half of 2005. Pre-production capital expenditures are estimated
to be approximately $20 million. Kori Kollo is expected to produce
approximately 250,000 to 300,000 equity ounces in total from 2005 to 2008.
Exploration activities during the third quarter continued, with ongoing
success in Ghana and a focus on replacing and growing reserves net of
depletion for 2004.
Third quarter exploration, research and development expenditures were
$54.1 million, compared with $30.6 million in the year ago quarter. Guidance
for exploration, research and development expenditures for 2004 remains
between $180 million and $200 million on a consolidated basis, reflecting
expanded feasibility study work at Minas Conga in Peru, Akyem in Ghana and
Martabe in Indonesia.
Reserve additions at Phoenix in Nevada are expected for 2004 from the
ongoing 150-hole infill and extension drilling program.
2004 Guidance
For 2004, the Company expects gold sales of approximately 7 million equity
ounces at total cash costs of approximately $230 to $235 per ounce.
Statement of Consolidated Income
Three Months Ended
September 30,
2004 2003
(unaudited, in thousands,
except per share)
Revenues
Sales-gold, net $889,553 $870,949
Sales-base metals, net 273,142 10,211
1,162,695 881,160
Costs and expenses
Costs applicable to sales (exclusive of
depreciation, depletion and amortization
shown separately below)
Gold 481,223 456,467
Base metals 101,426 4,881
Depreciation, depletion and amortization 167,964 151,443
Exploration, research and development 54,093 30,646
General and administrative 22,298 28,954
Write-down of long-lived assets 9,565 3,582
Other 34,343 7,014
870,912 682,987
Other income (expense)
Gain (loss) on investments, net 299 (3,322)
Loss on derivative instruments, net (600) (46,927)
Gain on extinguishment of NYOL bonds, net -- 19,617
Gain on extinguishment of NYOL derivative
liability, net -- 29,928
Royalty and dividend income 19,088 15,841
Interest income, foreign currency exchange
and other income 27,170 22,367
Interest expense, net of capitalized
interest of $3,702 and $2,617, respectively (26,976) (18,756)
18,981 18,748
Pre-tax income before minority interest
and equity income (loss) and impairment
of affiliates 310,764 216,921
Income tax expense (92,096) (80,977)
Minority interest in income of subsidiaries (90,439) (57,125)
Equity income of affiliates 498 35,615
Net income applicable to common shares $128,727 $114,434
Net income per common share, basic and diluted $0.29 $0.28
Basic weighted average common shares
outstanding 443,457 408,379
Diluted weighted average common shares
outstanding 447,060 412,922
Cash dividends declared per common share $0.075 $0.04
Statement of Consolidated Income
Nine Months Ended
September 30,
2004 2003
(unaudited, in thousands,
except per share)
Revenues
Sales-gold, net $2,624,794 $2,309,531
Sales-base metals, net 669,349 42,379
3,294,143 2,351,910
Costs and expenses
Costs applicable to sales (exclusive of
depreciation, depletion and amortization
shown separately below)
Gold 1,446,916 1,277,721
Base metals 267,889 30,216
Depreciation, depletion and amortization 523,144 421,373
Exploration, research and development 138,993 82,739
General and administrative 79,949 86,656
Write-down of long-lived assets 25,865 5,376
Other 48,705 32,433
2,531,461 1,936,514
Other income (expense)
(Loss) gain on investments, net (39,195) 81,393
Gain on derivative instruments, net 907 24,742
Gain on extinguishment of NYOL bonds, net -- 114,031
Gain on extinguishment of NYOL derivative
liability, net -- 106,506
Loss on extinguishment of debt (222) (19,530)
Royalty and dividend income 47,606 40,789
Interest income, foreign currency exchange
and other income 43,958 86,004
Interest expense, net of capitalized
interest of $8,600 and $5,665, respectively (77,409) (71,371)
(24,355) 362,564
Pre-tax income before minority interest and
equity income (loss) of affiliates and
cumulative effect of a change in accounting
principle 738,327 777,960
Income tax expense (210,038) (232,578)
Minority interest in income of subsidiaries (230,354) (130,721)
Equity loss and impairment of Australian
Magnesium Corporation -- (120,059)
Equity income of affiliates 2,107 62,467
Income before cumulative effect of a change
in accounting principle 300,042 357,069
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 $252,904 $322,536
Income per common share before cumulative
effect of a change in accounting principle,
basic $0.68 $0.88
Cumulative effect of a change in accounting
principle per common share, basic (0.11) (0.08)
Net income per common share, basic $0.57 $0.80
Income per common share before cumulative
effect of a change in accounting principle,
diluted $0.67 $0.88
Cumulative effect of a change in accounting
principle per common share, diluted (0.10) (0.09)
Net income per common share, diluted $0.57 $0.79
Basic weighted average common shares
outstanding 443,017 405,243
Diluted weighted average common shares
outstanding 446,607 407,941
Cash dividends declared per common share $0.20 $0.12
Consolidated Balance Sheets
September 30, December 31,
2004 2003
(unaudited, in thousands)
ASSETS
Cash and cash equivalents $1,417,004 $1,314,022
Marketable securities and other
short-term investments 413,444 274,593
Trade receivables 169,151 20,055
Accounts receivable 84,160 70,631
Inventories 239,677 225,719
Stockpiles and ore on leach pads 241,223 248,625
Deferred stripping costs 37,834 60,086
Deferred income tax assets 193,957 56,682
Other current assets 70,496 100,280
Current assets 2,866,946 2,370,693
Property, plant and mine development, net 5,263,960 3,715,457
Investments 24,749 733,977
Deferred stripping costs 92,252 30,293
Long-term stockpiles and ore on leach pads 535,892 305,810
Deferred income tax assets 361,268 369,764
Other long-term assets 183,923 106,995
Goodwill 3,088,592 3,042,557
Total assets $12,417,581 $10,675,546
LIABILITIES
Current portion of long-term debt $329,004 $190,866
Accounts payable 207,926 163,164
Employee-related benefits 110,977 136,301
Other current liabilities 415,806 351,706
Current liabilities 1,063,713 842,037
Long-term debt 1,361,222 886,633
Reclamation and remediation liabilities 410,336 362,283
Deferred revenue from sale of future
production 49,120 53,841
Deferred income tax liabilities 377,581 250,491
Employee-related benefits 224,386 253,726
Advanced stripping costs 103,227 --
Other long-term liabilities 341,842 295,082
Total liabilities 3,931,427 2,944,093
Minority interest in subsidiaries 823,751 346,518
STOCKHOLDERS' EQUITY
Total stockholders' equity 7,662,403 7,384,935
Total liabilities and stockholders'
equity $12,417,581 $10,675,546
Statement of Consolidated Cash Flows
Three Months Ended
September 30,
2004 2003
(unaudited, in thousands)
Operating activities:
Net income $128,727 $114,434
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 167,964 151,443
Accretion of accumulated reclamation
obligations 6,532 5,799
Amortization of deferred stripping
costs, net 24,897 (15,599)
Deferred income taxes 39,360 6,346
Foreign currency exchange gain (3,442) (18,937)
Minority interest expense 90,439 57,125
Equity income and impairment of
affiliates, net of dividends (498) (35,615)
Write-downs of inventories, stockpiles
and ore on leach pads 7,596 2,492
Write-down of long-lived assets 9,565 3,582
(Gain) loss on investments, net (299) 3,322
Loss on derivative instruments, net 600 46,927
Gain on extinguishment of NYOL bonds, net -- (19,617)
Gain on extinguishment of NYOL derivatives
liability, net -- (29,928)
Gain on sale of assets and other (28,626) (1,029)
(Increase) decrease in operating assets:
Accounts receivable (24,239) (3,220)
Inventories, stockpiles and ore
on leach pads (9,101) 6,450
Other assets (8,216) (4,429)
Increase (decrease) in operating liabilities:
Accounts payable and other accrued
liabilities (46,037) (4,640)
Early settlement of derivative
instruments classified as cash
flow hedges -- 1,397
Reclamation liabilities (15,897) (9,595)
Net cash provided by operating activities 339,325 256,708
Investing activities:
Additions to property, plant and mine
development (166,504) (147,084)
Investment in marketable equity securities (125,484) --
Advances to joint ventures and affiliates,
net -- 6,190
Proceeds from sale of investments 2,852 232,190
Early settlement of ineffective derivative
instruments 5,495 (27,588)
Proceeds from asset sales and other 6,153 (1,028)
Net cash (used in) provided by investing
activities (277,488) 62,680
Financing activities:
Proceeds from long-term debt -- 377,478
Repayment of long-term debt (64,188) (516,223)
Dividends paid on common stock (33,353) (16,387)
Dividends paid to minority interests (28,667) (51,083)
Proceeds from stock issuance 7,299 29,997
Change in restricted cash and other (2,676) --
Net cash used in financing activities (121,585) (176,218)
Effect of exchange rate changes on cash
gain (loss) 1,927 1,500
Net change in cash and cash equivalents (57,821) 144,670
Cash and cash equivalents at beginning of
period 1,474,825 274,741
Cash and cash equivalents at end of period $1,417,004 $419,411
Supplemental information:
Interest paid, net of amounts capitalized $12,147 $30,116
Income taxes paid $52,482 $34,690
Statement of Consolidated Cash Flows
Nine Months Ended
September 30,
2004 2003
(unaudited, in thousands)
Operating activities:
Net income $252,904 $322,536
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 523,144 421,373
Accretion of accumulated reclamation
obligations 19,386 17,119
Amortization of deferred stripping
costs, net 8,421 (29,713)
Deferred income taxes 53,828 15,091
Foreign currency exchange loss (gain) 5,015 (70,821)
Minority interest expense 230,354 130,721
Equity (income) loss and impairment
of affiliates, net of dividends (617) 63,694
Write-downs of inventories, stockpiles
and ore on leach pads 19,145 20,433
Write-downs of long-lived assets 25,865 5,376
Cumulative effect of a change in
accounting principle, net of tax 47,138 34,533
Loss (gain) on investments, net 39,195 (81,393)
Gain on derivative instruments, net (907) (24,742)
Gain on extinguishment of NYOL bonds, net -- (114,031)
Gain on extinguishment of NYOL derivatives
liability, net -- (106,506)
Loss on extinguishment of debt 222 19,530
Gain on sale of assets and other (52,563) (13,472)
(Increase) decrease in operating assets:
Accounts receivable (21,333) 4,780
Inventories, stockpiles and ore on
leach pads 4,618 (19,124)
Other assets (13,151) 2,903
Increase (decrease) in operating
liabilities:
Accounts payable and other accrued
liabilities (135,379) 13,878
Early settlement of derivative
instruments classified as cash
flow hedges -- (118,591)
Reclamation liabilities (32,991) (13,090)
Net cash provided by operating activities 972,295 480,484
Investing activities:
Additions to property, plant and mine
development (519,910) (366,185)
Investment in marketable equity securities (219,204) --
Advances to joint ventures and affiliates,
net -- (40,013)
Cash recorded upon consolidation of
Batu Hijau 82,203 --
Proceeds from the sale of investments 2,852 232,190
Proceeds from the sale of TVX Newmont Americas -- 180,000
Early settlement of ineffective derivative
instruments 5,205 (57,741)
Cash consideration for acquisition of
minority interests -- (11,195)
Proceeds from asset sales and other 19,021 1,613
Net cash used in investing activities (629,833) (61,331)
Financing activities:
Proceeds from long-term debt 37,715 492,478
Repayment of long-term debt (141,088) (838,583)
Dividends paid on common stock (88,726) (48,695)
Dividends paid to minority interests (94,487) (80,273)
Proceeds from stock issuance 33,378 54,848
Change in restricted cash and other 16,568 --
Net cash used in financing activities (236,640) (420,225)
Effect of exchange rate changes on cash
(loss) gain (2,840) 18,800
Net change in cash and cash equivalents 102,982 17,728
Cash and cash equivalents at beginning of
period 1,314,022 401,683
Cash and cash equivalents at end of period $1,417,004 $419,411
Supplemental information:
Interest paid, net of amounts capitalized $63,236 $97,413
Income taxes paid $214,693 $145,157
Operating Statistics Summary
Australia/
New Zealand
North America South America (1)
Three Months Ended September 30, 2004 2003 2004 2003 2004 2003
Production Costs Per Ounce:
Direct mining and production
costs $307 $254 $140 $120 $234 $237
Capitalized mining and other (17) (20) (6) (4) 20 (15)
Cash operating costs 290 234 134 116 254 222
Royalties and production
taxes 2 5 6 5 15 12
Total cash costs (5) 292 239 140 121 269 234
Reclamation and mine closure
costs 2 4 2 3 3 2
Total costs applicable to sales 294 243 142 124 272 236
Depreciation and amortization 55 57 69 58 62 65
Total production costs (5) $349 $300 $211 $182 $334 $301
Consolidated gold sales
(000 ounces) 652.8 786.2 777.6 928.5 472.6 541.6
Equity gold sales (000 ounces) 625.8 786.2 401.0 495.0 472.6 541.6
Average realized price per
equity ounce
Copper Summary (6)
Equity copper production
(000 pounds)
Equity copper sales (000 pounds)
Total cash cost per equity pound
Average realized price per
equity pound
(1) Includes 10,200 and 3,600 ounces from the wholly-owned Golden
Grove zinc/copper mine in 2004 and 2003, respectively. Golden
Grove is excluded from the cost per ounce calculations.
(2) Indonesia includes Batu Hijau and Minahasa
(3) Central Asia/Europe includes Zarafshan (Uzbekistan) and Ovacik
(Turkey)
(4) 2003 includes equity investments comprise Batu Hijau, TVX
Newmont Americas and Echo Bay Mining Limited.
(5) 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.
(6) Represents both Batu Hijau and Golden Grove except total cash
cost and average realized price per equity pound for 2003 are only
Golden Grove.
Equity
Central Invest-
Asia/Europe ments
Indonesia (2) (3) (4) Total
Three Months Ended
September 30, 2004 2003 2004 2003 2003 2004 2003
Production Costs Per
Ounce:
Direct mining and
production costs $128 $173 $173 $143 -- $226 $208
Capitalized mining
and other 24 3 (10) (9) -- -- (14)
Cash operating costs 152 176 163 134 -- 226 194
Royalties and
production taxes 11 6 6 7 -- 7 7
Total cash costs (5) 163 182 169 141 -- 233 201
Reclamation and mine
closure costs 3 6 2 1 -- 3 3
Total costs applicable
to sales 166 188 171 142 -- 236 204
Depreciation and
amortization 26 97 102 66 -- 60 61
Total production
costs (5) $192 $285 $273 $208 -- $296 $265
Consolidated gold sales
(000 ounces) 260.2 24.6 80.8 101.7 -- 2,244.0 2,382.6
Equity gold sales
(000 ounces) 154.5 23.1 80.8 101.7 116.5 1,734.7 2,064.1
Average realized price
per equity ounce $404 $366
Copper Summary (6)
Equity copper
production (000
pounds) 121,934 125,478
Equity copper sales
(000 pounds) 118,702 111,957
Total cash cost per
equity pound $0.58 $0.47
Average realized price
per equity pound $1.44 $0.77
(1) Includes 10,200 and 3,600 ounces from the wholly-owned Golden
Grove zinc/copper mine in 2004 and 2003, respectively. Golden
Grove is excluded from the cost per ounce calculations.
(2) Indonesia includes Batu Hijau and Minahasa
(3) Central Asia/Europe includes Zarafshan (Uzbekistan) and Ovacik
(Turkey)
(4) 2003 includes equity investments comprise Batu Hijau, TVX
Newmont Americas and Echo Bay Mining Limited.
(5) 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.
(6) Represents both Batu Hijau and Golden Grove except total cash
cost and average realized price per equity pound for 2003 are only
Golden Grove.
Australia/
North America South America New Zealand (1)
Nine Months Ended
September 30, 2004 2003 2004 2003 2004 2003
Production Costs Per
Ounce:
Direct mining and
production costs $307 $249 $141 $125 $253 $231
Capitalized
mining and
other (29) (18) (6) (4) 2 (7)
Cash operating
costs 278 231 135 121 255 224
Royalties and
production taxes 5 7 6 4 14 12
Total cash costs (5) 283 238 141 125 269 236
Reclamation and
mine closure
costs 2 3 3 4 3 2
Total costs
applicable to sales 285 241 144 129 272 238
Depreciation and
amortization 58 61 74 59 67 61
Total production
costs (5) $343 $302 $218 $188 $339 $299
Consolidated gold
sales (000 ounces) 2,053.5 2,170.7 2,209.9 2,364.8 1,429.8 1,552.8
Equity gold sales
(000 ounces) 1,966.0 2,170.7 1,141.8 1,274.5 1,429.8 1,534.1
Average realized
price per equity
ounce
Copper Summary (6)
Equity copper
production (000
pounds)
Equity copper sales
(000 pounds)
Total cash cost per
equity pound
Average realized
price per equity
pound
(1) Includes 15,500 and 10,400 ounces from the wholly-owned Golden
Grove zinc/copper mine in 2004 and 2003, respectively. Golden Grove
is excluded from the cost per ounce calculations.
(2) Indonesia includes Batu Hijau and Minahasa
(3) Central Asia/Europe includes Zarafshan (Uzbekistan) and Ovacik
(Turkey)
(4) 2003 includes equity investments comprise Batu Hijau, TVX Newmont
Americas and Echo Bay Mining Limited.
(5) 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.
(6) Represents both Batu Hijau and Golden Grove except total cash
cost and average realized price per equity pound for 2003 are only
Golden Grove.
Equity
Central Invest-
Asia/Europe ments
Indonesia (2) (3) (4) Total
Nine Months Ended
September 30, 2004 2003 2004 2003 2003 2004 2003
Production Costs Per
Ounce:
Direct mining and
production costs $157 $222 $170 $135 -- $238 $207
Capitalized mining
and other 22 3 (8) (2) -- (11) (10)
Cash operating
costs 179 225 162 133 -- 227 197
Royalties and
production taxes 9 6 6 5 -- 8 8
Total cash costs (5) 188 231 168 138 -- 235 205
Reclamation and
mine closure costs 1 4 1 1 -- 2 2
Total costs applicable
to sales 189 235 169 139 -- 237 207
Depreciation and
amortization 37 68 85 63 -- 64 61
Total production
costs (5) $226 $303 $254 $202 -- $301 $268
Consolidated gold
sales (000 ounces) 611.0 86.4 280.9 309.6 -- 6,585.1 6,484.3
Equity gold sales (000
ounces) 371.9 81.2 280.9 309.6 298.4 5,190.4 5,668.5
Average realized price
per equity ounce $404 $357
Copper Summary (6)
Equity copper
production (000
pounds) 333,936 321,586
Equity copper sales
(000 pounds) 321,556 310,457
Total cash cost per
equity pound $0.58 $0.54
Average realized price
per equity pound $1.31 $0.79
(1) Includes 15,500 and 10,400 ounces from the wholly-owned Golden
Grove zinc/copper mine in 2004 and 2003, respectively. Golden Grove
is excluded from the cost per ounce calculations.
(2) Indonesia includes Batu Hijau and Minahasa
(3) Central Asia/Europe includes Zarafshan (Uzbekistan) and Ovacik
(Turkey)
(4) 2003 includes equity investments comprise Batu Hijau, TVX Newmont
Americas and Echo Bay Mining Limited.
(5) For a reconciliation of total cash costs and total production
costs per ounce (non-GAAP measures of performance) to costs
applicable to sales calculated and presented under GAAP, please refer
to the Supplemental Information attached.
(6) Represents both Batu Hijau and Golden Grove except total cash
cost and average realized price per equity pound for 2003 are only
Golden Grove.
2004 Guidance
Equity Gold Total
Sales Cash Costs
(000 oz) ($/oz)
North America
Nevada 2,425 $280
Golden Giant 150 $310
Holloway 70 $340
La Herradura 70 $165
Sub-total 2,715 $280
South America
Yanacocha 1,540 $135
Kori Kollo 25 $260
Sub-total 1,565 $137
Australia(1)/New Zealand
Kalgoorlie 450 $310
Pajingo 265 $220
Tanami 660 $280
Yandal 370 $285
Martha 125 $220
Sub-total 1,870 $276
Indonesia
Batu Hijau 390 $170
Minahasa 70 $260
Sub-total 460 $184
Central Asia/Europe
Zarafshan 215 $160
Ovacik (2) 125 $215
Sub-total 340 $180
TOTAL (3) ~7,000 $230-$235
Equity Copper Total
& Zinc Sales Cash Costs
(million lbs) ($/lb)
Batu Hijau -- Copper 380 $0.53
Golden Grove -- Copper 35 $0.88
Golden Grove -- Zinc 135 $0.43
Consolidated Financial (in millions, except tax rate)
Royalty and dividend income $55-$58
Depreciation, depletion & amortization $700-$715
Exploration, research and development $180-$200
-- Exploration $115-$125
-- Advanced projects $45-$50
-- Research, development and other $20-$25
General and administrative $110-$115
Interest expense, net $100-$105
Tax rate (assuming $400/oz gold) 23%-28%
Capital expenditures $730-$760
Notes:
1. Total cash costs are based on an A$1 = $0.715 exchange rate
assumption for the fourth quarter of 2004.
2. Based on 100% ownership for the full year. The proposed sale of
Ovacik, which suspended operations in August 2004, has been deferred
pending a resolution of its operating permits.
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,
assuming all other factors remain constant.
Supplemental Information
1. Gold Production Summary -- Americas
Nevada Canada (1) Other (2)
Three Months Ended
September 30, 2004 2003 2004 2003 2004 2003
Tons Mined (000 dry short
tons):
Open-Pit 44,076 43,475 n/a n/a 2,993 3,042
Underground 416 414 215 267 n/a n/a
Tons Milled/Processed (000):
Oxide 1,148 1,036 214 275 n/a n/a
Refractory 2,187 2,355 n/a n/a n/a n/a
Leach 5,135 5,016 n/a n/a 998 1,050
Average Ore Grade (oz/ ton):
Oxide 0.116 0.116 0.205 0.259 n/a n/a
Refractory 0.199 0.221 n/a n/a n/a n/a
Leach 0.027 0.029 n/a n/a 0.028 0.026
Average Mill Recovery Rate:
Oxide 79.5% 77.0% 93.8% 95.6% n/a n/a
Refractory 90.4% 91.3% n/a n/a n/a n/a
Ounces Produced (000): 597.7 696.0 39.5 60.5 15.9 29.1
Equity Ounces Produced (000):
Oxide 103.8 87.1 39.5 60.5 n/a n/a
Refractory 388.0 514.7 n/a n/a n/a n/a
Leach 78.9 94.2 n/a n/a 15.9 29.1
Total 570.7 696.0 39.5 60.5 15.9 29.1
Equity Ounces Sold (000) 570.4 696.9 39.5 60.2 15.9 29.1
Production Costs Per Ounce:
Direct mining and
production costs $304 $258 $402 $244 $189 $183
Capitalized mining and
other (19) (22) 2 5 (10) (3)
Cash operating costs 285 236 404 249 179 180
Royalties and production
taxes 2 4 -- 6 -- 7
Total cash costs 287 240 404 255 179 187
Reclamation and mine
closure costs 3 3 2 9 2 4
Total costs applicable to
sales 290 243 406 264 181 191
Depreciation and
amortization 50 55 96 81 104 65
Total production costs $340 $298 $502 $345 $285 $256
(1) Includes Golden Giant and Holloway
(2) Other includes La Herradura and for 2003, Mesquite
Kori Kollo,
Yanacocha, Peru Bolivia
Three Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons):
Open-Pit 50,258 53,268 n/a 1,425
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 n/a n/a 1,764
Leach 36,913 40,524 n/a 978
Average Ore Grade (oz/ ton):
Oxide n/a n/a n/a n/a
Refractory n/a n/a n/a 0.035
Leach 0.028 0.027 n/a 0.018
Average Mill Recovery Rate:
Oxide n/a n/a n/a n/a
Refractory n/a n/a n/a 60.9%
Ounces Produced (000): 754.5 862.4 5.1 48.4
Equity Ounces Produced (000):
Oxide n/a n/a n/a n/a
Refractory n/a n/a n/a 32.9
Leach 387.4 442.8 4.5 9.7
Total 387.4 442.8 4.5 42.6
Equity Ounces Sold (000) 397.0 451.2 4.0 43.8
Production Costs Per Ounce:
Direct mining and production costs $139 $111 $231 $216
Capitalized mining and other (6) (3) (12) (17)
Cash operating costs 133 108 219 199
Royalties and production taxes 6 5 16 --
Total cash costs 139 113 235 199
Reclamation and mine closure costs 2 2 58 17
Total costs applicable to sales 141 115 293 216
Depreciation and amortization 69 60 81 34
Total production costs $210 $175 $374 $250
(1) Includes Golden Giant and Holloway
(2) Other includes La Herradura and for 2003, Mesquite
Nevada Canada (1) Other (2)
Nine Months Ended
September 30, 2004 2003 2004 2003 2004 2003
Tons Mined (000 dry short
tons):
Open-Pit 144,523 131,264 n/a n/a 8,509 8,918
Underground 1,123 1,256 740 926 n/a n/a
Tons Milled/Processed (000):
Oxide 3,190 1,795 740 943 n/a n/a
Refractory 6,541 6,865 n/a n/a n/a n/a
Leach 14,211 12,619 n/a n/a 3,112 3,067
Average Ore Grade (oz/ ton):
Oxide 0.131 0.148 0.233 0.242 n/a n/a
Refractory 0.193 0.216 n/a n/a n/a n/a
Leach 0.024 0.029 n/a n/a 0.027 0.026
Average Mill Recovery Rate:
Oxide 79.0% 82.7% 94.3% 95.3% n/a n/a
Refractory 90.5% 90.7% n/a n/a n/a n/a
Ounces Produced (000): 1,756.9 1,859.2 164.7 212.2 51.4 93.7
Equity Ounces Produced
(000):
Oxide 330.3 217.4 164.7 212.2 n/a n/a
Refractory 1,091.1 1,360.9 n/a n/a n/a n/a
Leach 247.9 280.9 n/a n/a 51.4 93.7
Total 1,669.3 1,859.2 164.7 212.2 51.4 93.7
Equity Ounces Sold (000) 1,747.8 1,865.1 166.8 211.9 51.4 93.7
Production Costs Per Ounce:
Direct mining and
production costs $311 $253 $312 $254 $158 $169
Capitalized mining and
other (33) (22) 2 2 (2) (4)
Cash operating costs 278 231 314 256 156 165
Royalties and production
taxes 5 8 2 3 -- 6
Total cash costs 283 239 316 259 156 171
Reclamation and mine
closure costs 3 3 1 7 1 3
Total costs applicable to
sales 286 242 317 266 157 174
Depreciation and
amortization 54 57 83 89 76 66
Total production costs $340 $299 $400 $355 $233 $240
(1) Includes Golden Giant and Holloway
(2) Other includes La Herradura and for 2003, Mesquite
Kori Kollo,
Yanacocha, Peru Bolivia
Nine Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons):
Open-Pit 148,295 154,716 n/a 7,638
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 n/a n/a 5,400
Leach 102,079 113,317 n/a 3,696
Average Ore Grade (oz/ ton):
Oxide n/a n/a n/a n/a
Refractory n/a n/a n/a 0.036
Leach 0.024 0.028 n/a 0.017
Average Mill Recovery Rate:
Oxide n/a n/a n/a n/a
Refractory n/a n/a n/a 62.4%
Ounces Produced (000): 2,170.0 2,183.9 19.6 161.4
Equity Ounces Produced (000):
Oxide n/a n/a n/a n/a
Refractory n/a n/a n/a 108.1
Leach 1,114.3 1,121.4 17.2 34.0
Total 1,114.3 1,121.4 17.2 142.1
Equity Ounces Sold (000) 1,125.0 1,130.0 16.8 144.5
Production Costs Per Ounce:
Direct mining and production costs $139 $116 $266 $199
Capitalized mining and other (6) (3) (10) (13)
Cash operating costs 133 113 256 186
Royalties and production taxes 6 5 16 --
Total cash costs 139 118 272 186
Reclamation and mine closure costs 2 2 41 12
Total costs applicable to sales 141 120 313 198
Depreciation and amortization 74 62 103 34
Total production costs $215 $182 $416 $232
(1) Includes Golden Giant and Holloway
(2) Other includes La Herradura and for 2003, Mesquite
2. Gold Production Summary -- Australia/New Zealand
Pajingo Yandal (1) Tanami
Three Months Ended September 30, 2004 2003 2004 2003 2004 2003
Tons Mined (000 dry short tons) 161 204 1,738 1,002 2,732 4,948
Tons Milled/Processed (000) 209 204 637 1,394 1,157 1,214
Average Ore Grade (oz/ton) 0.296 0.466 0.134 0.120 0.152 0.129
Average Mill Recovery Rate 97.1% 96.8% 92.6% 90.1% 95.1% 95.7%
Ounces Produced (000) 58.3 91.2 78.0 150.7 166.0 151.3
Equity Ounces Produced (000) 58.3 91.2 78.0 150.7 166.0 151.3
Equity Ounces Sold (000) 58.3 90.9 77.9 151.8 163.8 153.1
Production Costs Per Ounce:
Direct mining and production
costs $223 $131 $297 $258 $214 $215
Capitalized mining and other (8) (13) -- 3 33 3
Cash operating costs 215 118 297 261 247 218
Royalties and production
taxes 11 10 11 8 26 23
Total cash costs 226 128 308 269 273 241
Reclamation and mine closure
costs 2 -- 4 3 2 1
Total costs applicable to
sales 228 128 312 272 275 242
Depreciation and amortization 116 90 63 80 56 58
Total production costs $344 $218 $375 $352 $331 $300
(1) 2004 includes Jundee. 2003 includes Jundee, Bronzewing and Wiluna.
Kalgoorlie Martha
Three Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons) 10,549 13,178 1,250 1,549
Tons Milled/Processed (000) 1,839 1,883 345 354
Average Ore Grade (oz/ton) 0.079 0.069 0.121 0.078
Average Mill Recovery Rate 88.2% 84.0% 89.6% 93.9%
Ounces Produced (000) 124.2 115.6 37.9 26.4
Equity Ounces Produced (000) 124.2 115.6 37.9 26.3
Equity Ounces Sold (000) 124.8 116.0 37.6 26.2
Production Costs Per Ounce:
Direct mining and production costs $225 $283 $232 $401
Capitalized mining and other 43 (25) (26) (184)
Cash operating costs 268 258 206 217
Royalties and production taxes 10 8 -- --
Total cash costs 278 266 206 217
Reclamation and mine closure costs 4 4 2 2
Total costs applicable to sales 282 270 208 219
Depreciation and amortization 35 19 100 129
Total production costs $317 $289 $308 $348
(1) 2004 includes Jundee. 2003 includes Jundee, Bronzewing and Wiluna.
Pajingo Yandal (1) Tanami
Nine Months Ended
September 30, 2004 2003 2004 2003 2004 2003
Tons Mined (000 dry short
tons) 471 576 6,321 2,731 11,162 15,929
Tons Milled/Processed (000) 601 598 2,197 4,010 3,368 3,446
Average Ore Grade (oz/ton) 0.286 0.442 0.127 0.117 0.151 0.141
Average Mill Recovery Rate 96.5% 96.8% 92.7% 90.4% 95.2% 96.1%
Ounces Produced (000) 171.6 258.3 266.3 433.6 483.6 467.7
Equity Ounces Produced (000) 171.6 258.3 266.3 433.6 483.6 448.5
Equity Ounces Sold (000) 182.0 258.7 291.0 433.0 505.7 449.3
Production Costs Per Ounce:
Direct mining and
production costs $227 $122 $271 $268 $229 $225
Capitalized mining and
other (8) (8) (1) 6 15 (7)
Cash operating costs 219 114 270 274 244 218
Royalties and production
taxes 11 11 9 9 24 21
Total cash costs 230 125 279 283 268 239
Reclamation and mine
closure costs -- -- 5 3 2 1
Total costs applicable to
sales 230 125 284 286 270 240
Depreciation and
amortization 121 80 74 70 57 59
Total production costs $351 $205 $358 $356 $327 $299
(1) 2004 includes Jundee for six months and Bronzewing for the first
quarter. 2003 includes Jundee, Bronzewing and Wiluna.
Kalgoorlie Martha
Nine Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons) 34,028 36,229 3,624 3,839
Tons Milled/Processed (000) 5,272 5,327 1,057 990
Average Ore Grade (oz/ton) 0.073 0.071 0.096 0.082
Average Mill Recovery Rate 87.0% 85.2% 90.2% 91.8%
Ounces Produced (000) 329.0 309.2 90.5 74.5
Equity Ounces Produced (000) 329.0 309.2 90.5 72.8
Equity Ounces Sold (000) 345.3 309.2 90.3 73.5
Production Costs Per Ounce:
Direct mining and production costs $274 $256 $302 $331
Capitalized mining and other 14 (2) (85) (106)
Cash operating costs 288 254 217 225
Royalties and production taxes 9 9 -- --
Total cash costs 297 263 217 225
Reclamation and mine closure costs 4 3 3 2
Total costs applicable to sales 301 266 220 227
Depreciation and amortization 34 23 111 111
Total production costs $335 $289 $331 $338
(1) 2004 includes Jundee for six months and Bronzewing for the first
quarter. 2003 includes Jundee, Bronzewing and Wiluna.
3. Gold Production Summary -- Indonesia and Central Asia/Europe
Batu Hijau, Minahasa,
Indonesia Indonesia
Three Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons) 59,595 60,928 n/a n/a
Tons Milled/Processed (000):
Leach n/a n/a n/a n/a
Mill 13,213 12,300 105 172
Average Ore Grade (oz/ton) 0.023 0.020 0.167 0.142
Average Mill Recovery Rate 83.3% 83.4% 91.6% 93.0%
Ounces Produced (000) 246.2 208.4 16.9 22.2
Equity Ounces Produced (000) 138.5 117.2 15.9 20.9
Equity Ounces Sold (000) 134.1 116.5 20.4 23.1
Production Costs Per Ounce:
Direct mining and production costs $129 n/a $116 $173
Capitalized mining and other 28 n/a 3 3
Cash operating costs 157 n/a 119 176
Royalties and production taxes 9 n/a 27 6
Total cash costs 166 n/a 146 182
Reclamation and mine closure costs 1 n/a 13 6
Total costs applicable to sales 167 n/a 159 188
Depreciation and amortization 33 n/a (19) 97
Total production costs $200 n/a $140 $285
Zarafshan, Ovacik,
Uzbekistan Turkey
Three Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons) n/a n/a 1,086 2,152
Tons Milled/Processed (000):
Leach 1,986 2,082 n/a n/a
Mill n/a n/a 90 151
Average Ore Grade (oz/ton) 0.038 0.042 0.346 0.338
Average Mill Recovery Rate n/a n/a 96.2% 93.7%
Ounces Produced (000) 44.3 51.6 33.8 48.0
Equity Ounces Produced (000) 44.3 51.6 33.8 48.0
Equity Ounces Sold (000) 46.1 50.2 34.7 51.5
Production Costs Per Ounce:
Direct mining and production costs $162 $151 $187 $136
Capitalized mining and other 3 2 (27) (21)
Cash operating costs 165 153 160 115
Royalties and production taxes -- -- 14 13
Total cash costs 165 153 174 128
Reclamation and mine closure costs 2 2 3 1
Total costs applicable to sales 167 155 177 129
Depreciation and amortization 51 49 169 82
Total production costs $218 $204 $346 $211
Batu Hijau, Minahasa,
Indonesia Indonesia
Nine Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons) 171,907 174,275 n/a n/a
Tons Milled/Processed (000):
Leach n/a n/a n/a n/a
Mill 39,819 36,951 441 544
Average Ore Grade (oz/ton) 0.017 0.016 0.158 0.158
Average Mill Recovery Rate 81.0% 80.7% 90.5% 91.1%
Ounces Produced (000) 546.1 480.7 63.8 78.4
Equity Ounces Produced (000) 307.2 270.4 59.9 73.7
Equity Ounces Sold (000) 301.7 262.7 70.2 81.2
Production Costs Per Ounce:
Direct mining and production costs $135 n/a $248 $222
Capitalized mining and other 28 n/a 2 3
Cash operating costs 163 n/a 250 225
Royalties and production taxes 8 n/a 8 6
Total cash costs 171 n/a 258 231
Reclamation and mine closure costs 2 n/a 4 4
Total costs applicable to sales 173 n/a 262 235
Depreciation and amortization 37 n/a 32 68
Total production costs $210 n/a $294 $303
Zarafshan, Ovacik,
Uzbekistan Turkey
Nine Months Ended September 30, 2004 2003 2004 2003
Tons Mined (000 dry short tons) n/a n/a 4,659 4,061
Tons Milled/Processed (000):
Leach 5,929 6,116 n/a n/a
Mill n/a n/a 331 435
Average Ore Grade (oz/ton) 0.043 0.043 0.320 0.335
Average Mill Recovery Rate n/a n/a 95.4% 93.6%
Ounces Produced (000) 166.1 170.1 104.8 136.1
Equity Ounces Produced (000) 166.1 170.1 104.8 136.1
Equity Ounces Sold (000) 170.9 171.9 110.0 137.7
Production Costs Per Ounce:
Direct mining and production costs $149 $146 $202 $120
Capitalized mining and other 2 2 (23) (6)
Cash operating costs 151 148 179 114
Royalties and production taxes -- -- 14 12
Total cash costs 151 148 193 126
Reclamation and mine closure costs 2 2 2 1
Total costs applicable to sales 153 150 195 127
Depreciation and amortization 47 46 143 82
Total production costs $200 $196 $338 $209
4. Base Metal Summary -- Batu Hijau and Golden Grove
Three Months Ended Nine Months Ended
September 30, September 30,
Batu Hijau 2004 (1) 2003 (1) 2004 (1) 2003 (1)
Total tons mined (000) 59,595 60,928 171,907 174,275
Dry tons processed (000) 13,213 12,300 39,819 36,951
Average copper grade 0.88% 0.82% 0.78% 0.74%
Average recovery rate 89.7% 90.7% 88.8% 89.2%
Copper produced (000 lbs) 204,217 184,154 546,021 488,168
Equity copper produced (000 lbs) 114,872 103,587 307,137 274,595
Equity copper sold (000 lbs) 111,285 103,246 291,951 264,290
Realized copper price per pound $1.42 $0.84 $1.31 $0.80
Total cash cost per equity pound $0.56 $0.34 $0.55 $0.38
Noncash cost per equity pound 0.11 0.11 0.13 0.13
Total production cost per equity pound $0.67 $0.45 $0.68 $0.51
(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 Nine Months Ended
September 30, September 30,
Golden Grove 2004 2003 2004 2003
Total tons mined (000) 359 370 1,049 1,064
Dry tons processed (000) 354 346 1,028 1,045
Average copper grade 2.33% 4.68% 3.15% 4.84%
Average copper recovery rate 85.3% 92.9% 86.7% 92.0%
Copper produced (000 lbs) 7,062 21,891 26,799 46,991
Copper sold (000 lbs) 7,417 8,711 29,605 46,167
Realized copper price per pound $1.78 $0.77 $1.37 $0.79
Copper cash cost per pound $0.89 $0.47 $0.85 $0.54
Average zinc grade 8.96% 13.42% 9.93% 12.37%
Average zinc recovery rate 87.3% 90.0% 88.9% 90.5%
Zinc produced (000 lbs) 29,622 12,518 88,699 87,394
Zinc sold (000 lbs) 27,325 9,504 92,443 63,132
Realized zinc price per pound $0.48 $0.39 $0.48 $0.36
Zinc cash cost per pound $0.40 $0.05 $0.38 $0.22
Gold sold (000 ounces) 10.2 3.6 15.5 10.4
Silver sold (000 ounces) 543.9 391.0 857.6 1,165.8
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
La Total
Three Months Ended September 30, Golden Hollo- Herrad- North
2004 Nevada Giant way Canada ura America
Costs applicable to sales under
GAAP $170.8 $11.0 $4.9 $15.9 $2.9 $189.6
Minority interest -- -- -- -- -- --
Accretion expense (1.5) (0.1) -- (0.1) -- (1.6)
Write-down of inventories -- -- -- -- -- --
Purchased ore and other (5.6) -- -- -- -- (5.6)
Total cash cost for per ounce
calculations 163.7 10.9 4.9 15.8 2.9 182.4
Accretion expense and other 1.5 0.1 -- 0.1 -- 1.6
Depreciation, depletion and
amortization 29.0 2.6 1.2 3.8 1.7 34.5
Minority interest and other -- -- -- -- -- --
Total production cost for per
ounce calculations $194.2 $13.6 $6.1 $19.7 $4.6 $218.5
Equity ounces sold (000) 570.4 26.2 13.3 39.5 15.9 625.8
Equity cash cost per ounce sold $287 $418 $376 $404 $179 $292
Equity total production cost per
ounce sold $340 $520 $465 $502 $285 $349
Three Months Ended Kori South
September 30, 2004 Yanacocha Kollo America Pajingo Yandal Tanami
Costs applicable to
sales under GAAP $112.8 $1.3 $114.1 $13.7 $24.3 $46.4
Minority interest (56.5) (0.2) (56.7) -- -- --
Accretion expense (0.8) (0.2) (1.0) (0.1) (0.3) (0.3)
Write-down of inventories -- -- -- (0.5) -- (1.4)
Purchased ore and other (0.4) -- (0.4) -- -- --
Total cash cost for per ounce
calculations 55.1 0.9 56.0 13.1 24.0 44.7
Accretion expense and other 0.8 0.2 1.0 0.1 0.3 0.3
Depreciation, depletion and
amortization 49.0 0.3 49.3 6.8 4.9 9.0
Minority interest and other (21.5) -- (21.5) -- -- --
Total production cost for per
ounce calculations $83.4 $1.4 $84.8 $20.0 $29.2 $54.0
Equity ounces sold (000) 397.0 4.0 401.0 58.3 77.9 163.8
Equity cash cost per ounce sold $139 $235 $140 $226 $308 $273
Equity total production cost
per ounce sold $210 $374 $211 $344 $375 $331
Three Months Ended Australia/
September 30, New Batu
2004 Kalgoorlie Martha Zealand Hijau Minahasa Indonesia
Costs applicable
to sales under
GAAP $35.2 $7.8 $127.4 $31.4 $3.5 $34.9
Minority
interest -- --- -- (14.2) -- (14.2)
Accretion
expense (0.4) (0.1) (1.2) (0.2) (0.3) (0.5)
Write-down of
inventories -- -- (1.9) -- -- --
Purchased ore
and other -- -- -- 5.2 (0.2) 5.0
Total cash cost
for per ounce
calculations 34.8 7.7 124.3 22.2 3.0 25.2
Accretion expense
and other 0.4 0.1 1.2 0.2 0.3 0.5
Depreciation,
depletion and
amortization 4.4 3.8 28.9 7.8 (0.5) 7.3
Minority interest
and other -- -- -- (3.4) -- (3.4)
Total production
cost for per
ounce
calculations $39.6 $11.6 $154.4 $26.8 $2.8 $29.6
Equity ounces
sold (000) 124.8 37.6 462.4 134.1 20.4 154.5
Equity cash cost
per ounce sold $278 $206 $269 $166 $146 $163
Equity total
production cost
per ounce sold $317 $308 $334 $200 $140 $192
Three Months Ended Central Asia Total
September 30, 2004 Zarafshan Ovacik /Europe Gold
Costs applicable
to sales under GAAP $7.7 $7.5 $15.2 $481.2
Minority interest -- -- -- (70.9)
Accretion expense (0.1) (0.1) (0.2) (4.5)
Write-down of inventories -- (1.3) (1.3) (3.2)
Purchased ore and other -- -- -- (1.0)
Total cash cost for per
ounce calculations 7.6 6.1 13.7 401.6
Accretion expense and other 0.1 0.1 0.2 4.5
Depreciation, depletion and
amortization 2.3 5.9 8.2 128.2
Minority interest and other -- -- -- (24.9)
Total production cost
for per ounce
calculations $10.0 $12.1 $22.1 $509.4
Equity ounces sold (000) 46.1 34.7 80.8 1,724.5
Equity cash cost per
ounce sold $165 $174 $169 $233
Equity total production
cost per ounce sold $218 $346 $273 $296
Three Months Ended
September 30, 2003 Golden La
Nevada Giant Holloway Canada Mesquite Herradura
Costs applicable
to sales under
GAAP $172.1 $10.6 $5.3 $15.9 $2.6 $3.1
Minority
interest -- -- -- -- -- --
Accretion
expense (1.7) (0.3) (0.2) (0.5) (0.1) (0.1)
Write-down
of inventories (1.9) -- -- -- -- --
Purchased ore
and other (7.7) -- -- -- -- --
Total cash cost
for per ounce
calculations 160.8 10.3 5.1 15.4 2.5 3.0
Accretion
expense and
other 1.7 0.3 0.2 0.5 0.1 0.1
Depreciation,
depletion and
amortization 37.1 3.4 1.4 4.8 1.1 0.8
Minority interest
and other -- -- -- -- -- --
Total production
cost for per
ounce
calculations $199.6 $14.0 $6.7 $20.7 $3.7 $3.9
Equity ounces
sold (000) 696.9 42.8 17.4 60.2 12.6 16.5
Equity cash cost
per ounce sold $240 $238 $297 $255 $196 $181
Equity total
production cost
per ounce sold $298 $328 $388 $345 $289 $231
Three Months Ended
September 30, North Kori South
2003 America Yanacocha Kollo America Pajingo Yandal
Costs applicable
to sales
under GAAP $193.7 $105.3 $10.8 $116.1 $11.7 $41.7
Minority
interest -- (53.3) (1.3) (54.6) -- --
Accretion
expense (2.4) (0.8) (0.7) (1.5) -- (0.5)
Write-down
of inventories (1.9) -- -- -- -- (0.3)
Purchased ore
and other (7.7) -- -- -- -- --
Total cash cost
for per ounce
calculations 181.7 51.2 8.8 60.0 11.7 40.9
Accretion expense
and other 2.4 0.8 0.7 1.5 (0.1) 0.4
Depreciation,
depletion and
amortization 43.8 48.5 1.7 50.2 8.2 12.2
Minority interest
and other -- (21.2) (0.2) (21.4) -- --
Total production
cost for per
ounce
calculations $227.9 $79.3 $11.0 $90.3 $19.8 $53.5
Equity ounces
sold (000) 786.2 451.2 43.8 495.0 90.9 151.8
Equity cash cost
per ounce sold $239 $113 $199 $121 $128 $269
Equity total
production cost
per ounce sold $300 $175 $250 $182 $218 $352
Three Months Ended Australia/
September 30, New
2003 Tanami Kalgoorlie Martha Zealand Minahasa Zarafshan
Costs applicable
to sales under
GAAP $37.2 $31.3 $5.8 $127.7 $4.6 $7.7
Minority
interest 0.1 -- 0.1 0.2 -- --
Accretion
expense (0.3) (0.3) (0.1) (1.2) (0.1) --
Write-down
of inventories -- -- -- (0.3) -- --
Purchased ore
and other -- -- -- -- (0.3) --
Total cash cost
for per ounce
calculations 37.0 31.0 5.8 126.4 4.2 7.7
Accretion expense
and other -- 0.3 -- 0.6 0.1 --
Depreciation,
depletion and
amortization 8.8 2.3 3.3 34.8 2.4 2.5
Minority
interest
and other -- -- -- -- (0.1) --
Total production
cost for per
ounce
calculations $45.8 $33.6 $9.1 $161.8 $6.6 $10.2
Equity ounces
sold (000) 153.1 116.0 26.2 538.0 23.1 50.2
Equity cash cost
per ounce sold $241 $266 $217 $234 $182 $153
Equity total
production cost
per ounce sold $300 $289 $348 $301 $285 $204
Central
Three Months Ended September 30, 2003 Ovacik Asia/Europe Total Gold
Costs applicable to sales under GAAP $6.7 $14.4 $456.5
Minority interest -- -- (54.4)
Accretion expense (0.1) (0.1) (5.3)
Write-down of inventories -- -- (2.2)
Purchased ore and other -- -- (8.0)
Total cash cost for per ounce
calculations 6.6 14.3 386.6
Accretion expense and other 0.1 0.1 4.7
Depreciation, depletion and
amortization 4.2 6.7 137.9
Minority interest and other -- -- (21.5)
Total production cost for per ounce
calculations $10.9 $21.1 $507.7
Equity ounces sold (000) 51.5 101.7 1,944.0
Equity cash cost per ounce sold $128 $141 $201
Equity total production cost per
ounce sold $211 $208 $265
La
Nine Months Ended September Golden Herrad- North
30, 2004 Nevada Giant Holloway Canada ura America
Costs applicable to sales
under GAAP $525.6 $34.8 $17.9 $52.7 $8.1 $586.4
Minority interest -- -- -- -- -- --
Accretion expense (4.2) (0.2) -- (0.2) (0.1) (4.5)
Write-down of inventories -- -- -- -- -- --
Purchased ore and other (26.5) 0.1 0.1 0.2 -- (26.3)
Total cash cost for per
ounce calculations 494.9 34.7 18.0 52.7 8.0 555.6
Accretion expense and
other 4.2 0.2 -- 0.2 0.1 4.5
Depreciation, depletion
and amortization 95.7 9.2 4.5 13.7 3.9 113.3
Minority interest and
other -- -- -- -- -- --
Total production cost for
per ounce calculations $594.8 $44.1 $22.5 $66.6 $12.0 $673.4
Equity ounces sold (000) 1,747.8 118.4 48.4 166.8 51.4 1,966.0
Equity cash cost per ounce
sold $283 $294 $370 $316 $156 $283
Equity total production cost
per ounce sold $340 $373 $465 $400 $233 $343
Nine Months Ended Kori South
September 30, 2004 Yanacocha Kollo America Pajingo Yandal Tanami
Costs applicable to sales
under GAAP $320.7 $8.3 $329.0 $43.1 $82.8 $140.7
Minority interest (161.5) (1.0) (162.5) -- -- ---
Accretion expense (2.3) (0.7) (3.0) (0.2) (1.4) (0.9)
Write-down of inventories -- (2.1) (2.1) (1.0) (0.2) (4.1)
Purchased ore and other (0.5) -- (0.5) -- -- --
Total cash cost for per
ounce calculations 156.4 4.5 160.9 41.9 81.2 135.7
Accretion expense and
other 2.3 0.7 3.0 0.1 1.4 0.7
Depreciation, depletion
and amortization 151.2 2.0 153.2 22.0 21.6 29.1
Minority interest and
other (68.2) (0.2) (68.4) -- -- --
Total production cost for
per ounce calculations $241.7 $7.0 $248.7 $64.0 $104.2 $165.5
Equity ounces sold (000) 1,125.0 16.8 1,141.8 182.0 291.0 505.7
Equity cash cost per ounce
sold $139 $272 $141 $230 $279 $268
Equity total production
cost per ounce sold $215 $416 $218 $351 $358 $327
Australia
Nine Months Ended /New Batu Mina- Indo-
September 30, 2004 Kalgoorlie Martha Zealand Hijau hasa nesia
Costs applicable to sales
under GAAP $103.9 $19.9 $390.4 $72.3 $19.8 $92.1
Minority interest -- -- -- (32.7) -- (32.7)
Accretion expense (1.3) (0.3) (4.1) (0.4) (0.3) (0.7)
Write-down of inventories -- -- (5.3) -- (0.2) (0.2)
Purchased ore and other -- -- -- 12.5 (1.2) 11.3
Total cash cost for per ounce
calculations 102.6 19.6 381.0 51.7 18.1 69.8
Accretion expense and other 1.3 0.3 3.8 0.4 0.3 0.7
Depreciation, depletion and
amortization 11.8 10.0 94.5 20.3 2.4 22.7
Minority interest and other -- -- -- (8.9) (0.1) (9.0)
Total production cost for per
ounce calculations $115.7 $29.9 $479.3 $63.5 $20.7 $84.2
Equity ounces sold (000) 345.3 90.3 1,414.3 301.7 70.2 371.9
Equity cash cost per ounce
sold $297 $217 $269 $171 $258 $188
Equity total production cost
per ounce sold $335 $331 $339 $210 $294 $226
Central
Nine Months Ended Asia/ Total
September 30, 2004 Zarafsha Ovacik Europe Gold
Costs applicable to sales
under GAAP $26.2 $22.8 $49.0 $1,446.9
Minority interest -- -- -- (195.2)
Accretion expense (0.3) (0.3) (0.6) (12.9)
Write-down of inventories -- (1.3) (1.3) (8.9)
Purchased ore and other (0.1) -- (0.1) (15.6)
Total cash cost for per ounce
calculations 25.8 21.2 47.0 1,214.3
Accretion expense and other 0.3 0.2 0.5 12.5
Depreciation, depletion and
amortization 8.1 15.7 23.8 407.5
Minority interest and other -- -- -- (77.4)
Total production cost for per ounce
calculations $34.2 $37.1 $71.3 $1,556.9
Equity ounces sold (000) 170.9 110.0 280.9 5,174.9
Equity cash cost per ounce sold $151 $193 $168 $235
Equity total production cost per
ounce sold $200 $338 $254 $301
La
Nine Months Ended Golden Herrad-
September 30, 2003 Nevada Giant Holloway Canada Mesquite ura
Costs applicable to sales
under GAAP $456.0 $41.0 $15.4 $56.4 $7.6 $8.8
Minority interest -- -- -- -- -- --
Accretion expense (4.8) (1.2) (0.4) (1.6) (0.2) (0.1)
Write-down of inventories (2.9) -- -- -- -- --
Purchased ore and other (10.9) -- -- -- -- --
Total cash cost for
per ounce calculations 437.4 39.8 15.0 54.8 7.4 8.7
Accretion expense
and other 4.8 1.2 0.4 1.6 0.2 0.1
Depreciation, depletion
and amortization 103.4 15.0 3.8 18.8 3.6 2.5
Minority interest
and other -- -- -- -- -- --
Total production cost
for per
ounce calculations $545.6 $56.0 $19.2 $75.2 $11.2 $11.3
Equity ounces sold (000) 1,865.1 161.8 50.1 211.9 42.8 50.9
Equity cash cost per ounce
sold $239 $246 $300 $259 $172 $171
Equity total production cost
per ounce sold $299 $347 $384 $355 $261 $222
Nine Months Ended North Kori South
September 30, 2003 America Yanacocha Kollo America Pajingo Yandal
Costs applicable to sales
under GAAP $528.8 $274.3 $32.6 $306.9 $32.5 $126.8
Minority interest -- (138.7) (3.9) (142.6) -- --
Accretion expense (6.7) (2.5) (1.8) (4.3) (0.1) (1.6)
Write-down of
inventories (2.9) -- -- -- -- (2.7)
Purchased ore and other (10.9) -- -- -- -- --
Total cash cost for per
ounce calculations 508.3 133.1 26.9 160.0 32.4 122.5
Accretion expense and
other 6.7 2.5 1.8 4.3 (0.2) 1.5
Depreciation, depletion
and amortization 128.3 124.4 5.6 130.0 20.7 30.2
Minority interest and
other -- (54.3) (0.7) (55.0) -- --
Total production cost for
per ounce calculations $643.3 $205.7 $33.6 $239.3 $52.9 $154.2
Equity ounces sold (000) 2,170.7 1,130.0 144.5 1,274.5 258.7 433.0
Equity cash cost per
ounce sold $238 $118 $186 $125 $125 $283
Equity total production
cost per ounce sold $302 $182 $232 $188 $205 $356
Australia
Nine Months Ended /New
September 30, 2003 Tanami Kalgoorlie Martha Zealand Minahasa Zarafshan
Costs applicable
to sales
under GAAP $114.6 $83.4 $19.7 $377.0 $21.7 $25.7
Minority interest (4.2) -- (0.3) (4.5) -- --
Accretion expense (0.8) (1.1) (0.3) (3.9) (0.4) (0.2)
Write-down of
inventories (2.0) (1.0) (2.6) (8.3) (1.3) --
Purchased ore
and other -- -- -- -- (1.3) --
Total cash cost for
per ounce
calculations 107.6 81.3 16.5 360.3 18.7 25.5
Accretion expense
and other 0.1 1.1 0.1 2.6 0.4 0.2
Depreciation,
depletion and
amortization 27.5 6.9 8.2 93.5 5.8 8.0
Minority interest
and other (1.0) -- (0.1) (1.1) (0.3) --
Total production cost
for per ounce
calculations $134.2 $89.3 $24.7 $455.3 $24.6 $33.7
Equity ounces
sold (000) 449.3 309.2 73.5 1,523.7 81.2 171.9
Equity cash cost
per ounce
sold $239 $263 $225 $236 $231 $148
Equity total
production cost
per ounce sold $299 $289 $338 $299 $303 $196
Central
Nine Months Ended September 30, 2003 Ovacik Asia/Europe Total Gold
Costs applicable to sales under GAAP $17.6 $43.3 $1,277.7
Minority interest -- -- (147.1)
Accretion expense (0.2) (0.4) (15.7)
Write-down of inventories -- -- (12.5)
Purchased ore and other -- -- (12.2)
Total cash cost for per ounce
calculations 17.4 42.9 1,090.2
Accretion expense and other 0.1 0.3 14.3
Depreciation, depletion and
amortization 11.4 19.4 377.0
Minority interest and other -- -- (56.4)
Total production cost for per ounce
calculations $28.9 $62.6 $1,425.1
Equity ounces sold (000) 137.7 309.6 5,359.7
Equity cash cost per ounce sold $126 $138 $205
Equity total production cost per
ounce sold $209 $202 $268
6. Reconciliation of Costs Applicable to Sales to Total Cash Cost Per
Ounce, and Total Production Cost Per Ounce (dollars in millions
except per ounce amounts)
Three Months Ended Nine Months Ended
September 30, 2003 September 30, 2003
Batu Batu
Hijau Mina- Indo- Hijau Mina- Indo-
(1) hasa nesia (1) hasa nesia
Costs applicable to sales under
GAAP $13.4 $4.6 $18.0 $38.1 $21.7 $59.8
Minority interest (0.1) - (0.1) (5.2) - (5.2)
Accretion expense (0.3) (0.1) (0.4) (1.0) (0.4) (1.4)
Write-down of inventories - - - - (1.3) (1.3)
Purchased ore and other 5.0 (0.3) 4.7 12.1 (1.3) 10.8
Total cash cost for per ounce
calculations 18.0 4.2 22.2 44.0 18.7 62.7
Accretion expense and other 0.3 0.1 0.4 1.0 0.4 1.4
Depreciation, depletion and
amortization 9.8 2.4 12.2 25.4 5.8 31.2
Minority interest and other (4.3) (0.1) (4.4) (11.1) (0.3) (11.4)
Total production cost for per
ounce calculations $23.8 $6.6 $30.4 $59.3 $24.6 $83.9
Equity ounces sold (000) 116.5 23.1 139.6 262.7 81.2 343.9
Equity cash cost per ounce sold $154 $182 $159 $168 $231 $182
Equity total production cost per
ounce sold $204 $285 $217 $226 $303 $244
(1) Cash and total production cost per ounce presented on a pro forma
co-product basis.
7. Reconciliation of Batu Hijau Costs Applicable to Sales to Total Cash
Cost Per Equity Pound, and Total Production Cost Per Equity Pound
(dollars in millions except per pound amounts)
Three Months Ended Nine Months Ended
Batu Hijau September 30, September 30,
2004 2003 (1) 2004 2003 (1)
Costs applicable to sales per
financial statements $86.9 $25.4 $221.5 $86.5
Minority interest (39.4) 0.6 (100.4) (11.9)
Accretion expense (0.4) (0.6) (1.3) (2.3)
Smelting and refining 14.8 10.0 39.8 27.5
Total cash cost for per pound
calculation 61.9 35.4 159.6 99.8
Accretion expense 0.4 0.6 1.3 2.4
Depreciation, depletion and
amortization 22.3 19.0 64.9 57.6
Minority interest (9.7) (8.3) (28.4) (25.2)
Total production cost for per pound
calculation $74.9 $46.7 $197.4 $134.6
Equity copper sold (000 lbs) 111,285 103,246 291,951 264,290
Total cash cost per equity pound $0.56 $0.34 $0.55 $0.38
Total production cost per equity pound $0.67 $0.45 $0.68 $0.51
(1) 2003 cash and total production cost per pound presented on a pro
forma co-product basis.
8. Reconciliation of Golden Grove Costs Applicable to Sales to Total Cash
Cost Per Pound, and Total Production Cost Per Equity Pound
(dollars in millions except per pound amounts)
Three Months Ended September 30,
2004 2003
Total Copper Zinc Total Copper Zinc
Costs applicable to sales
per financial statements $14.5 $8.3 $6.2 $4.7 $4.3 $0.4
Accretion expense (0.1) - (0.1) (0.1) - (0.1)
Write-down inventories (4.5) (1.5) (3.0) (0.3) (1.1) 0.8
Smelting and refining and
purchased concentrates 7.8 (0.2) 8.0 0.2 0.9 (0.7)
Total cash cost for per
pound calculation $17.7 $6.6 $11.1 $4.5 $4.1 $0.4
Total sold (000 lbs) n/a 7,417 27,325 n/a 8,711 9,504
Total cash cost per pound
sold n/a $0.89 $0.40 n/a $0.47 $0.05
Nine Months Ended September 30,
2004 2003
Total Copper Zinc Total Copper Zinc
Costs applicable to sales
per financial statements $45.8 $25.3 $20.5 $29.7 $22.1 $7.6
Accretion expense (0.4) (0.2) (0.2) (0.3) (0.2) (0.1)
Write-down inventories (7.9) (2.3) (5.6) (7.1) (4.0) (3.1)
Smelting and refining and
purchased concentrates 23.1 2.4 20.7 16.5 7.2 9.3
Total cash cost for per
pound calculation $60.6 $25.2 $35.4 $38.8 $25.1 $13.7
Total sold (000 lbs) n/a 29,605 92,443 n/a 46,167 63,132
Total cash cost per pound
sold n/a $0.85 $0.38 n/a $0.54 $0.22
9. Reconciliation of Total Newmont Costs Applicable to Sales to Total
Copper Cash Cost Per Equity Pounds,
(dollars in millions except per pound amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 (1) 2004 2003 (1)
Costs applicable to sales per
financial statements $95.2 $29.7 $246.8 $108.6
Minority interest (39.4) 0.6 (100.4) (11.9)
Accretion expense (0.4) (0.6) (1.5) (2.5)
Write-down inventories (1.5) (1.1) (2.3) -
Smelting and refining 14.6 10.9 42.2 34.7
Total cash cost for per pound
calculation $68.5 $39.5 $184.8 $128.9
Equity copper sold (000 lbs) 118,702 111,957 321,556 310,457
Total cash cost per equity pound $0.58 $0.35 $0.58 $0.40
(1) 2003 total cash cost per equity pound presented on a pro forma
co-product basis.
10. Gold Hedge Position -- Current Maturity Summary (1) (000 ounces)
Gold Put Price Capped
Option Contracts Contracts
Years Ozs Price(2) Ozs Price(2)
2004 48 $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 373 $310 2,350 $377
The mark-to-market value of the gold put option contracts was negative
$9.5 million at September 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 third quarter earnings conference call and web cast
presentation will be held on Wednesday, October 27, 2004 beginning at
4:00 p.m. Eastern Time (2:00 p.m. Mountain Time). To participate:
Dial-In Number: (773) 756-4602
Leader: Randy Engel
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.
Investor Contacts
Randy Engel
Telephone: (303) 837-6033
Email: randy.engel@newmont.com
Wendy Yang
Telephone: (303) 837-6141
Email: wendy.yang@newmont.com
Jennifer Van Dinter
Telephone: (303) 837-5165
Email: jennifer.vandinter@newmont.com
Media Contacts
Doug Hock
Telephone: (303) 837-5812
Email: doug.hock@newmont.com
Cautionary Statement
This news release contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, that are intended to be
covered by the safe harbor created by such sections. 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 net income and cash flows to the
gold and other metals prices; (v) the sensitivity of cash costs to the
Australian dollars exchange rate; (vi) estimates of future capital
expenditures, expenses and tax rates; (vii) estimates regarding timing of
future production or closure activities; (viii) statements regarding future
exploration results and the replacement of reserves; (ix) statements regarding
future asset sales or rationalization efforts; and (x) 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- 10/27/2004
/CONTACT: Investors, Randy Engel, +1-303-837-6033,
randy.engel@newmont.com, or Wendy Yang, +1-303-837-6141,
wendy.yang@newmont.com, or Jennifer Van Dinter, +1-303-837-5165,
jennifer.vandinter@newmont.com, or Media, Doug Hock, +1-303-837-5812,
doug.hock@newmont.com, all of Newmont Mining Corporation/
/FIRST ADD -- SUPPLEMENTAL INFORMATION -- TO FOLLOW/
/Web site: http://www.newmont.com/
(NEM)
CO: Newmont Mining Corporation
ST: Colorado
IN: MNG
SU: ERN CCA