News Release
NEWMONT 3Q 2002 Results
The Gold Company
Newmont Earns Net Income of $24 million and Generates $247 million in Operating
Cash Flow in Third Quarter
DENVER, November 12, 2002 - Newmont Mining Corporation (NYSE: NEM) announced net
income of $24 million ($0.06 per share) for the third quarter of 2002, compared
to net income of $18.8 million ($0.10 per share) for the third quarter of 2001.
For the first nine months, Newmont earned $86.8 million ($0.24 per share),
compared to a net loss of $57.2 million ($0.29 per share) in 2001.
Wayne W. Murdy, chairman and chief executive officer of Newmont, said, "This
quarter's results are symbolic of how far this company has come in the past
twelve months. For the quarter, we generated $24 million in net income and, more
importantly, $247 million in operating cash flow. This strong operating
performance allowed us to continue our debt reduction efforts, one of the key
corporate objectives we outlined at the beginning of the year. In addition, with
over 100 exploration drill rigs in the field and promising results to date, we
are becoming increasingly confident of being able not only to replace reserves
at year-end, but also to begin growing reserves again in 2003."
Third quarter highlights included:
o Sales of 2.1 million equity ounces of gold, on target;
o Total cash costs of $189 per ounce, higher than expected. The increased
cash costs are attributable to higher production costs in Nevada and a
stronger Australian dollar;
o Operating cash flow of $247 million, which represents 55% of the operating
cash flow generated in the first three quarters;
o Net debt reduction of $115 million, with a net debt to total capitalization
ratio of 21% at the end of the quarter;
o Cash and cash equivalents on hand of $292 million at the end of the
quarter. In addition, the company has a portfolio of investments with a
current market value of approximately $280 million; and
o Hedge book reduction of 928,000 total ounces, which reduced committed
ounces outstanding to 5.8 million ounces, roughly equivalent to ten months
of production.
As previously disclosed, PricewaterhouseCoopers was engaged to re-audit the
1999, 2000 and 2001 financial statements. The re-audit is now substantially
complete. As a result of the re-audit, Newmont will be restating its financial
statements to correct the accounting for a prepaid forward sales transaction,
and certain depreciation calculations.
INDEX
Results......................................................................2
Financial Highlights.........................................................2
Exploration..................................................................3
Forecast.....................................................................4
Statements...................................................................4
Operating Statistics.........................................................7
Investor Info...............................................................10
Supplemental Info...........................................................11
INVESTOR CONTACTS
Russell Ball
(303) 837-5927
Wendy Yang
(303) 837-6141
MEDIA CONTACT
Doug Hock
(303) 837-5812
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 1 of 19
THIRD QUARTER RESULTS
Third Quarter Net Income Increases 28%
Net income was $24 million ($0.06 per share) in the third quarter compared with
net income of $18.8 million ($0.10 per share) for the third quarter of 2001.
Contributing to net income was $17.4 million in equity income of affiliates,
including $13.5 million in equity income from Batu Hijau, and higher gold sales
of $698 million at a realized price of $315 per equity ounce.
These factors helped to offset increased total production costs of $255 per
ounce and a non-cash, mark-to-market derivative loss of $11.2 million ($0.03 per
share).
For the first nine months, Newmont earned $86.8 million ($0.24 per share),
compared to a net loss of $57.2 million ($0.29 per share) for the comparable
period in 2001.
Third Quarter Sales and Costs
For the third quarter, gold sales increased from the year ago quarter at
Newmont's Nevada and Yanacocha operations, in line with expectations. Improved
grades and increased mining rates are expected to result in marginally higher
production in the fourth quarter at these sites.
The Nevada operations sold 722,000 ounces at total cash costs of $225 per ounce,
which was 10% more ounces at 5% lower cash costs than for the third quarter of
2001. Total production costs decreased slightly to $282 per ounce. Increased
sales were the result of 14% higher grade refractory ore as the operations moved
16% more tons from underground operations, in each case comparable to the 2001
period. For 2002, Nevada is expected to sell 2.67 million ounces of gold at
total cash costs of $222 per ounce.
At Yanacocha in Peru, the quarter's gold sales were 642,000 ounces (329,600
equity ounces) at total cash costs of $117 per equity ounce. This represents a
25% increase in ounces sold, but at $3 higher total cash costs compared to the
third quarter of 2001. Total production costs were $184 per equity ounce as
depreciation and amortization rose by 37% to $63 per ounce with the first full
year of production from the La Quinua deposit. Yanacocha achieved a record
mining rate of 588,000 tons per day in the third quarter, a 25% increase from a
year ago. For 2002, Yanacocha is expected to sell 2.3 million ounces (1.2
million equity ounces) at total cash costs of $123 per equity ounce.
The Australian gold operations sold 475,300 equity ounces at total cash costs of
$201 per ounce. Total production costs were $274 per ounce, including $18 per
ounce for depreciation costs for the step up in value of the acquired Normandy
Mining Limited ("Normandy") assets. For 2002, the Australian operations are
expected to sell 1.62 million equity ounces at total cash costs of $189 per
ounce.
Batu Hijau had another strong quarter with sales of 203.5 million pounds of
copper (114.5 million equity pounds of copper) at net cash costs of $0.24 and
total costs of $0.38 per pound, after by-product credits of 97,000 ounces of
gold. Compared to the third quarter of 2001, this represented slightly higher
copper sales at $0.05 lower cash costs and $0.04 lower total costs per pound.
Batu Hijau continues to experience positive grade reconciliations and for 2002
is expected to sell between 350 million and 360 million pounds of copper at net
cash costs of $0.36 per pound.
Operating Cash Flows
During the quarter, cash flow from operations was $247 million, more than double
the 2001 period. For the year to date, cash flow from operations was $445
million, compared with $223 million for the 2001 period.
Other Expenditures
General and administrative costs were $29.7 million for the third quarter, and
$78.7 million for the nine months.
For the first nine months of 2002, capital expenditures totaled $238.2 million,
including $97.4 million in the third quarter.
FINANCIAL HIGHLIGHTS
Debt Reduction
Since the mid-February acquisitions of Normandy and Franco-Nevada Mining
Corporation Limited ("Franco-Nevada"), Newmont has reduced its net debt to total
capitalization ratio from approximately 40% to 21% at the end of September 2002.
This is despite the revised accounting treatment for the prepaid forward sales
transaction, which increased long-term debt by $145 million (with a
corresponding reduction of $137.2 million in other long-term liabilities on the
balance sheet).
Cash Position
Cash and cash equivalents amounted to $292 million at the end of the third
quarter, almost double from those a year ago.
Non-core asset sales for the year to date total $221 million (including
pre-acquisition sales by Franco-Nevada and Normandy). An additional $180 million
($90 million in cash and a note receivable of $90 million) is expected from the
sale of the TVX Newmont Americas joint venture interest when the
Kinross/TVX/Echo Bay merger closes. Subject to required shareholder
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 2 of 19
approvals, closing is now anticipated in late 2002 or early 2003.
Hedge Book Reduction
In line with the company's non-hedging philosophy, the Normandy group hedge book
was reduced by 748,000 committed ounces and 180,000 uncommitted ounces during
the quarter. The committed ounce reduction included scheduled deliveries of
478,000 ounces and the buy-back of 270,000 ounces at a cost of $13 million.
At the end of the third quarter, the Normandy group hedge book was reduced to
5.8 million committed ounces of gold, but the mark-to-market valuation grew to a
negative $412 million, primarily due to a higher gold price at the end of the
third quarter.
Through the acceleration of certain hedge contract deliveries and opportunistic
buy-backs, the company expects a further reduction in the number of committed
ounces of at least 279,000 in the fourth quarter of 2002.
Newmont will continue to evaluate opportunities to deliver into, close out or
simplify the Normandy group hedge book.
Accounting Restatements and Changes
Commenting on the status of the 1999, 2000 and 2001 re-audit by
PricewaterhouseCoopers, Mr. Hansen, Senior Vice President and Chief Financial
Officer said, "The re-audit is substantially complete. As previously disclosed,
we corrected our accounting for a prepaid forward sales transaction entered into
in July 1999. The cumulative, three-year impact of this change through June 30,
2002, was a $6.5 million reduction in earnings."
In addition, as a result of the re-audit, Newmont will also be restating its
previous three years of results to correct depreciation calculations at the
equity accounted Batu Hijau operation, and at Yanacocha. The combined impact of
these depreciation changes is a charge of $7.1 million through December 31,
2001. For the first three quarters of 2002 the depreciation changes reduced
earnings by $2.4 million.
Further, in order to conform to the currently preferred accounting methodology,
the company has changed the way it calculates depreciation at underground
operations and will record a positive, cumulative adjustment, net-of-tax, of
$7.7 million for the years prior to 2002, and a positive adjustment of $0.4
million for the first three quarters of 2002 in regard to depreciation,
primarily at the Nevada and Canadian underground operations.
EXPLORATION
Exploration and research expenditures totaled $25.4 million and $55.7 million
for the third quarter and first nine months of 2002, respectively, compared to
$12.8 million and $43.5 million for the third quarter and first nine months of
2001.
Currently, over 100 drills are operating worldwide on approximately 30 projects.
The high level of activity is producing positive results in Nevada (Gold Margin
area between Deep Post and Deep Star, Emigrant Springs and Dos Equis), Yanacocha
(Corimayo and Chaquicocha Sur), Australia (Jundee Westside and Golden Grove),
and Ghana (Akim). Based on results to date, Newmont expects to replace reserves
net of depletion at year-end. Updated reserves are scheduled to be announced
with year-end 2002 financial results in the first quarter of 2003.
In Nevada, underground drilling continues to test the Gold Margin mineralized
area, which may connect to South Deep Post, and has recorded several ore zones
in the 0.5 to 1.0 ounce per ton range. Core drilling of the southern margin of
the Gold Quarry pit (Dos Equis area) is showing grade increases of 10% to 40%
compared to old rotary mud holes. Recent drilling has also increased the
mineralized zone of Emigrant Springs, south of Carlin.
Drilling at Akim in Ghana shows continuity of the ore deposit to almost 1,000
feet at depth over a strike length of 0.8 mile, suggesting that in combination
with ongoing feasibility study work, a reserve could be defined in the future.
The company believes that Ghana has the potential to become a district play for
Newmont.
The Corimayo oxide deposit at Yanacocha has been extended laterally with further
high-grade intersections. Broader spaced drilling suggests that further oxide
mineralization could be present in the area.
The Jundee Westside zone in Western Australia has produced many new high-grade
drill core intersections with visible gold. Reserve calculations for the upper
panel are in progress.
At Batu Hijau, a deep drilling program is augmenting an on-going, in-fill
drilling effort. Lower operating costs combined with improving geotechnical
conditions, positive model reconciliations and the current drilling program
suggest a possible increase in Batu Hijau's copper and gold reserves at
year-end, despite lowering the copper price to calculate reserves from $1.00 to
$0.75 per pound.
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 3 of 19
The details of the updated 2002 forecast are included on pages 6. In summary,
the company expects the following for 2002:
o Sales of 7.5 million equity ounces of gold;
o Total cash costs of approximately $185 per equity ounce;
o Earnings per share, before mark-to-market adjustments, at the lower end of
previous guidance of $0.40 to $0.50, assuming current gold prices;
o Net debt to total capitalization ratio of approximately 20%; and
o Replacement of reserves, net of depletion.
For 2002, cash flow from operations is expected to be between $650 million and
$680 million, assuming current gold prices, versus earlier guidance of $750
million. The revised target reflects changes in assumptions and accounting
treatment of deferred mining costs, the minority interest in a larger than
budgeted dividend at Yanacocha, and management's decision to use cash to
accelerate the reduction of the Normandy group hedge book.
The preliminary 2003 forecast is as follows:
o Sales of 7.0 million to 7.2 million equity ounces of gold, assuming the
sale/exchange of TVX Newmont Americas/Echo Bay; and
o Total cash costs of between $180 and $192 per ounce.
See "Cautionary Statement" below.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Unaudited)
Three months ended September 30 2002 2001
($ million) (Restated)
- -----------------------------------------------------------------
Sales and other income:
Sales - gold ......................... 697.8 424.4
Sales - base metals, net.............. 14.3 -
Royalties ............................ 7.9 0.3
Dividends, interest, foreign currency
exchange and other income (loss) ... 8.3 (3.6)
- -----------------------------------------------------------------
728.3 421.1
Costs and expenses:
------------------
Costs of sales - gold ................ 409.2 281.9
Costs of sales - base metals.......... 10.4 -
Depreciation, depletion and
amortization........................ 150.4 72.1
Exploration and research ............. 25.4 12.8
General and administrative ........... 29.7 13.7
Interest, net ........................ 33.1 24.6
Other ................................ 12.8 3.0
- -----------------------------------------------------------------
671.0 408.1
Operating income...................... 57.3 13.0
Gain (loss) on derivative instruments. (11.2) 0.9
- -----------------------------------------------------------------
Pre-tax income before minority
interest and equity income............ 46.1 13.9
Income tax (expense) benefit.......... (11.2) 9.7
Minority interest in income of
affiliates.......................... (28.3) (19.1)
Equity income of affiliates........... 17.4 16.1
- -----------------------------------------------------------------
Net income............................ 24.0 20.6
Preferred stock dividend.............. - (1.8)
- -----------------------------------------------------------------
Net income to common shares........... 24.0 18.8
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Net income per common share,
basic and diluted................... $0.06 $0.10
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Basic weighted average shares
outstanding......................... 401.4 195.9
Diluted weighted average shares
outstanding......................... 403.0 196.1
Cash dividends declared per common
share............................... $0.03 $0.03
- -----------------------------------------------------------------
Net income............................ 24.0 20.6
Other comprehensive income
(loss), net of tax.................. (75.4) 6.8
- -----------------------------------------------------------------
Comprehensive income (loss)............ (51.4) 27.4
- -----------------------------------------------------------------
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 4 of 19
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Unaudited)
Nine months ended September 30 2002 2001
($ million) (Restated)
- -----------------------------------------------------------------
Sales and other income:
Sales - gold ......................... 1,789.6 1,215.8
Sales - base metals, net.............. 46.6 -
Royalties............................. 22.9 0.4
Gain on sale of marketable securities
of Lihir............................ 47.3 -
Dividends, interest, foreign currency
exchange and other income .......... 23.5 3.2
- -----------------------------------------------------------------
1,929.9 1,219.4
Costs and expenses:
------------------
Costs of sales - gold................. 1,104.8 808.7
Costs of sales - base metals ......... 29.6 -
Depreciation, depletion and
amortization........................ 387.7 222.5
Exploration and research.............. 55.7 43.5
General and administrative ........... 78.7 44.6
Interest, net ........................ 99.3 71.4
Merger and restructuring.............. - 60.5
Other ................................ 11.9 8.0
- -----------------------------------------------------------------
1,767.7 1,259.2
Operating income (loss)............... 162.2 (39.8)
Gain (loss) on derivative instruments. (14.3) 1.8
- -----------------------------------------------------------------
Pre-tax income (loss) before minority
interest and equity income.......... 147.9 (38.0)
Income tax (expense) benefit ......... (44.3) 9.0
Minority interest in income of
affiliates.......................... (54.7) (43.3)
Equity income of affiliates........... 34.0 20.7
- -----------------------------------------------------------------
Net income (loss) before cumulative
effect of change in accounting
principle........................... 82.9 (51.6)
Cumulative effect of change in
accounting principle, net of tax.... 7.7 -
- -----------------------------------------------------------------
Net income (loss)..................... 90.6 (51.6)
Preferred stock dividend.............. (3.8) (5.6)
- -----------------------------------------------------------------
Net income (loss) to common shares.... 86.8 (57.2)
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Net income (loss) before cumulative
effect of change in accounting
principle per common share, basic
and diluted......................... $0.22 ($0.29)
Cumulative effect of a change in
accounting principle per common
share, basic and diluted............... $0.02 -
- ------------------------------------------------------------------
Net income (loss) per common share,
basic and diluted................... $0.24 ($0.29)
==================================================================
Basic weighted average shares
outstanding......................... 360.6 194.7
Diluted weighted average shares
outstanding......................... 362.0 194.7
Cash dividends declared per
common share........................ $0.09 $0.09
- -------------------------------------------------------------------
Net income (loss)..................... 90.6 (51.6)
Other comprehensive income (loss),
net of tax.......................... (17.8) 12.1
- -------------------------------------------------------------------
Comprehensive income (loss)........... 72.8 (39.5)
- -------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
(Unaudited) (Unaudited)
At September 30 December 31
($ million) 2002 2001
(Restated)
- -------------------------------------------------------------------
Assets
Cash and cash equivalents........... 292.1 149.4
Inventories......................... 522.0 384.2
Other current assets................ 282.7 250.6
- -------------------------------------------------------------------
1,096.8 784.2
Property, plant and mine
development, net... 4,190.7 2,116.2
Investments........................... 1,019.0 552.5
Deferred taxes........................ 499.8 398.4
Other assets.......................... 298.8 215.6
Goodwill.............................. 2,568.9 -
- -------------------------------------------------------------------
Total Assets.......................... 9,674.0 4,066.9
- -------------------------------------------------------------------
Liabilities
Accounts payable and accruals....... 450.7 293.6
Current portion of long-term debt... 100.9 192.2
Derivative instruments.............. 65.0 1.3
Other current liabilities........... 14.6 7.9
- -------------------------------------------------------------------
631.2 495.0
Long-term debt........................ 1,725.4 1,234.7
Derivative instruments................ 391.7 4.6
Deferred taxes........................ 545.6 135.1
Other long-term liabilities........... 674.6 476.4
- -------------------------------------------------------------------
Total Liabilities..................... 3,968.5 2,345.8
- -------------------------------------------------------------------
Minority interest..................... 330.4 251.7
Stockholders' equity.................. 5,375.1 1,469.4
- -------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity... 9,674.0 4,066.9
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NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 5 of 19
CONSOLIDATED CASH FLOW
(Unaudited) (Unaudited)
Nine months ended September 30 2002 2001
($ million) (Restated)
- ----------------------------------------------------------------
Net income (loss)..................... 90.6 (51.6)
Non-cash adjustments:
Depreciation, depletion and
amortization 387.7 222.5
Deferred income taxes............... (24.2) (37.6)
Gain on sale of Lihir .............. (47.3) -
Minority interest and other items... 31.5 49.0
- ----------------------------------------------------------------
438.3 182.3
Changes in working capital............ 6.8 40.7
- ----------------------------------------------------------------
Net cash provided by operating
activities.......................... 445.1 223.0
- ----------------------------------------------------------------
Capital expenditures.................. (238.2) (318.1)
Sale of short-term investments........ 407.4 -
Net cash effect of acquisitions....... (88.1) -
Proceeds from sale of Lihir .......... 84.0 -
Settlement of cross currency swaps.... 50.8 -
Other................................. (6.2) 10.9
- -----------------------------------------------------------------
Net cash provided (used in)
investing activities................ 209.7 (307.2)
- -----------------------------------------------------------------
Net debt (repayments) borrowings...... (533.5) 72.4
Proceeds from stock issuance.......... 68.0 5.4
Dividends............................. (37.9) (23.2)
Other................................. - 40.4
- -----------------------------------------------------------------
Net cash provided (used in)
financing activities................ (503.4) 95.0
- -----------------------------------------------------------------
Exchange rate differences.............. (8.7) 2.1
- -----------------------------------------------------------------
Change in cash and cash equivalents .. 142.7 12.9
Cash and cash equivalents at beginning
of period .......................... 149.4 77.6
- -----------------------------------------------------------------
Cash and cash equivalents at
end of period....................... 292.1 90.5
- -----------------------------------------------------------------
REVISED & UPDATED 2002 FORECAST
Equity Gold Total
Sales Cash Costs
(000 oz) ($/oz)
- -----------------------------------------------------------------
North America
Nevada (100%)......................... 2,670 $222
Mesquite (100%)....................... 50 $170
Golden Giant (100%)................... 300 $184
Holloway (84.65%)..................... 95 $200
La Herradura (44%).................... 65 $175
- ------------------------------------------------------------------
Sub-total............................. 3,180 $216
South America
Yanacocha (51.35%).................... 1,200 $123
Kori Kollo (88%)...................... 250 $155
- ------------------------------------------------------------------
Sub-total ............................ 1,450 $129
Australia
Kalgoorlie (50%)...................... 330 $228
Pajingo (100%)........................ 290 $90
Tanami (85.9%)1....................... 430 $205
Yandal (100%)......................... 570 $205
- ------------------------------------------------------------------
Sub-total............................. 1,620 $189
Other
Martha (92.3%)1....................... 105 $124
Zarafshan (50%)....................... 250 $133
Minahasa (94%)........................ 140 $215
Ovacik (100%)......................... 120 $138
- ------------------------------------------------------------------
Sub-total............................. 615 $151
Equity Investments
Batu Hijau (56.25%)................... 260 -
Echo Bay (45.3%)2..................... 190 -
TVX Newmont Americas (49.9%)2......... 185 -
- ------------------------------------------------------------------
TOTAL................................. ~7,500 ~$185
- ------------------------------------------------------------------
1 Reflects interest ownership as of September 30, 2002.
2 Data assumes a full year of results since close of the pending exchange of
Newmont's equity interest in Echo Bay and sale of TVX NA is expected by
12/31/02.
Equity Copper and Zinc Sales Net
Cash Costs
(mm lb) ($/lb)
- --------------------------------------------------------------------
Batu Hijau (56.25%) - Copper.......... 350 - 360 $0.36
Golden Grove (100%) - Copper.......... 40 - 45 $0.60
Golden Grove (100%) - Zinc............ 100 $0.28
- --------------------------------------------------------------------
FINANCIAL PROJECTIONS ($ MILLION, EXCEPT TAX RATE)
Third party royalty revenue .......... $32
Depreciation, depletion and
amortization........................ $550 - $600
Exploration and research.............. $75 - $80
General and administrative............ $110
Interest expense, net of capitalized . $130 - $135
Tax rate (assuming current gold
price range)........................ 20% - 25%
Capital expenditures.................. $380 - $400
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 6 of 19
OPERATING STATISTICS - SUMMARY
North South Australia Other1 Equity Total
America America Investments2
Three months ended September 30 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $203 $212 $122 $116 $191 $116 $155 $141 - - $179 $176
Capitalized mining & other 12 14 (3) (2) (1) 1 (9) 4 - - 3 9
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 215 226 119 114 190 117 146 145 - - 182 185
Royalties and production taxes 7 6 4 3 11 11 3 1 - - 7 5
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 222 232 123 117 201 128 149 146 - - 189 190
Reclamation and mine closure costs 2 4 4 4 5 1 5 2 - - 4 3
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 224 236 127 121 206 129 154 148 - - 193 193
Non-cash inventory adjustment - - - - - - - - - - - -
Depreciation and amortization4 56 47 61 50 50 34 51 45 - - 55 48
Depreciation and amortization
adjustment - - - - 18 - 24 - - - 7 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs4 $280 $283 $188 $171 $274 $163 $229 $193 - - $255 $241
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated gold sales (000 oz)3 836.4 777.5 715.7 601.5 497.2 29.6 164.7 140.9 - - 2,215.2 1,549.5
Equity gold sales (000 oz)3 836.4 777.5 394.5 340.9 475.3 29.6 162.9 140.9 217.7 104.4 2,088.0 1,393.3
Average realized price per ounce $314 $275 $314 $273 $319 $273 $315 $271 - - $315 $274
- ------------------------------------------------------------------------------------------------------------------------------------
Copper Summary
--------------
Equity copper production (million lbs) 138.6 103.7
Equity copper sales (million lbs) 127.1 112.0
Net cash cost per pound $0.27 $0.29
Average realized price per pound $0.64 $0.67
- ------------------------------------------------------------------------------------------------------------------------------------
1 Other includes Ovacik (Turkey), Zarafshan (Uzbekistan), Minahasa (Indonesia) and Martha (New Zealand).
2 Equity investments comprise Batu Hijau, TVX Newmont Americas and Echo Bay Mining Limited.
3 Includes 1,200 ounces from the wholly-owned Golden Grove zinc/copper mine.
4 Items impacted by accounting restatement and/or accounting changes.
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 7 of 19
OPERATING STATISTICS - SUMMARY
North South Australia Other1 Equity Total
America America Investments2
Nine months ended September 30 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
- -----------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $215 $209 $134 $125 $180 $100 $156 $121 - - $185 $177
Capitalized mining & other 8 6 (3) (2) 2 2 (8) 12 - - 2 4
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 223 215 131 123 182 102 148 133 - - 187 181
Royalties and production taxes 5 4 3 3 10 6 3 1 - - 6 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 228 219 134 126 192 108 151 134 - - 193 185
Reclamation and mine closure costs 3 5 3 3 5 1 2 2 - - 3 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 231 224 137 129 197 109 153 136 - - 196 189
Non-cash inventory adjustment 1 - - 4 - 2 - - - 1 -
Depreciation and amortization4 51 46 68 55 50 33 50 53 - - 56 48
Depreciation and amortization
adjustment (1) - - - 14 - 19 - - - 4 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs4 $282 $270 $205 $184 $265 $142 $224 $189 - - $257 $237
- ------------------------------------------------------------------------------------------------------------------------------------
Consolidated gold sales
(000 oz)3 2,292.0 2,368.2 1,821.0 1,629.7 1,223.9 90.9 474.3 438.0 - - 5,821.5 4,526.8
Equity gold sales
(000 oz)3 2,292.0 2,368.2 1,015.0 920.6 1,171.6 90.9 467.0 438.0 460.1 235.2 5,416.0 4,052.9
Average realized price
per ounce $306 $269 $306 $268 $314 $268 $308 $267 - - $308 $269
- ------------------------------------------------------------------------------------------------------------------------------------
Copper Summary
--------------
Equity copper production (million lbs) 327.2 292.3
Equity copper sales (million lbs) 309.1 282.5
Net cash cost per pound $0.34 $0.35
Average realized price per pound $0.70 $0.71
- ------------------------------------------------------------------------------------------------------------------------------------
1 Other includes Ovacik (Turkey), Zarafshan (Uzbekistan), Minahasa (Indonesia)
and Martha (New Zealand).
2 Equity investments comprise Batu Hijau, TVX Newmont Americas and Echo Bay
Mining Limited.
3 Includes 10,300 ounces from the wholly-owned Golden Grove zinc/copper mine.
4 Items impacted by accounting restatement and/or accounting changes.
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 8 of 19
For supplemental information relating to this news release, please refer to
Newmont's web site at www.newmont.com under Investor Relations/News Releases.
The Form 10-Q for the third quarter ended September 30, 2002 will be filed with
the SEC and will be available on the company's web site on Thursday, November
14, 2002. The company's conference call is scheduled for today beginning at
11:00 a.m. Eastern Standard Time (9:00 a.m. Mountain Standard Time).
To participate Dial-In Number: (630) 395-0146
Leader: Russell Ball
Password: Newmont
The conference call will also be simultaneously carried on our web site under
Investor Relations/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 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) estimates of 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; (iv)
estimates of future cash flows, and the sensitivity of cash flows to the gold
and other metals prices; (v) statements regarding future debt repayments; (vi)
estimates of future capital expenditures; (vii) statements regarding future
exploration results and the replacement of reserves; (viii) statements regarding
future asset sales or rationalization efforts; and (ix) statements regarding
modifications to the company's hedge position. 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,
as well as 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 Page 8 of the company's 2001
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 any 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.
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 9 of 19
INVESTOR INFORMATION
Corporate Address
Newmont Mining Corporation
1700 Lincoln Street
Denver, CO. 80203
Telephone: (303) 863-7414
Facsimile: (303) 837-5837
Web Site
www.newmont.com
Stock Exchange Listings - Ticker
New York Stock Exchange ... NEM
Toronto Stock Exchange .... NMC
Australian Stock Exchange.. NEM
NYSE Share Price Performance (Q3)
Jul `02 Aug `02 Sep `02 3Q `02
------------------------------------
High................. $29.35 $28.64 $29.94 $29.94
Low.................. $20.80 $23.60 $26.39 $20.80
Last................. - - - $27.51
Shareholder Information
Please contact the respective stock transfer agent acting as transfer agent,
registrar and dividend disbursing agent for the securities listed below.
Information regarding shareholder accounts, dividend payments, stock transfer
and related matters for the respective securities should be directed to the
transfer agent listed.
For holders of Newmont Stock (NYSE:NEM)
Mellon Investor Services, LLC
85 Challenger Road
Ridgefield Park, NJ. 07660
Toll free: (888) 216-8104
(between 8:00 a.m. and 8:00 p.m. Eastern Time)
Internet: www.melloninvestor.com
----------------------
For Holders of Newmont Exchangeable
Shares (TSX: NMC)
Computershare Trust Company of Canada
100 University Avenue, 9th Floor
Toronto, Ontario M5J 2Y1
Canada
Toll-Free: (800) 663-9097
Telephone: (416) 981-9633
Internet: caregistryinfo@computershare.com
For Holders of Newmont CHESS Depository Interests (CDIs trading on ASX: NEM)
National Shareholder Services Pty Limited
100 Hutt Street, Adelaide 5000
South Australia, Australia
Shareholder enquires:
Telephone: 61-8-8232-0003
Facsimile: 61-8-8232-0072
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 10 of 19
SUPPLEMENTAL INFORMATION
Gold Ounces Sold Increase 50%
Gold sales for the third quarter increased 50% over the prior year to 2.1
million equity ounces and 13% over the second quarter of 2002. The North
American operations contributed 836,400 equity ounces, the Australian operations
contributed 475,300 equity ounces and Yanacocha contributed 329,600 equity
ounces.
Newmont sold its gold in the third quarter at an average realized price of $315
per equity ounce, $41 higher than the third quarter of 2001.
North America
The Nevada operations, including the recently acquired Midas operation, continue
to be Newmont's largest gold producing district, contributing 722,000 ounces,
35% of total gold sales in the third quarter of 2002. This is a 21% increase
over the second quarter of 2002 and a 10% increase over the year ago quarter.
The increase in sales is attributable to 14% higher grade refractory ore
compared to a year ago. Total cash costs improved 5% over the year ago quarter
to $225 per ounce. For the same period, total production costs improved slightly
to $282 per ounce.
In the third quarter, the contribution of sales from refractory ore sources
increased significantly. For 2002, Nevada's forecasted gold sales are 2.67
million ounces at total cash costs of $222 per ounce.
The Golden Giant underground mine sold 60,400 ounces at total cash costs of $217
per ounce, compared to 72,600 ounces at $202 cash costs per ounce a year ago.
The decline in ounces sold and the higher costs are attributable to mining of
lower grade stopes during the quarter. Higher grades and increased production is
expected in the fourth quarter, which should allow Golden Giant to sell 300,000
ounces for the year at a total cash cost of $184 per ounce.
The Holloway underground mine sold 20,000 equity ounces in the third quarter at
total cash costs of $161 per ounce, compared to 20,500 equity ounces at $216 per
ounce in the year ago quarter. For 2002, Holloway is expected to sell 95,000
equity ounces at total cash costs of $200 per ounce.
The Mesquite mine sold 16,300 ounces at total cash costs of $214 per ounce from
residual heap leaching in the third quarter. For 2002, Mesquite is expected to
sell 50,000 ounces at total cash costs of $170 per ounce.
La Herradura sold 17,600 equity ounces at total cash costs of $169 per ounce in
the third quarter. For 2002, La Herradura is expected to sell 65,000 equity
ounces at total cash costs of $175 per ounce.
South America
For the third quarter, the South American operations sold 394,500 equity ounces
at total cash costs of $123 per ounce, 16% more ounces at $6 higher cash costs
than the 2001 quarter.
Yanacocha sold 329,600 equity ounces at total cash costs of $117 per ounce, 25%
higher sales at similar cash costs from the year ago quarter. Higher gold sales
were the result of increased tons placed on the leach pads, augmented by the La
Quinua crushing and agglomeration facility operating at design rates. For 2002,
Yanacocha is expected to sell 2.3 million ounces (1.2 million equity ounces) at
total cash costs of $123 per ounce.
Kori Kollo sold 64,900 equity ounces at total cash costs of $152 per ounce,
compared to 76,900 equity ounces at $127 per ounce in the year ago quarter. For
2002, Kori Kollo is expected to sell 250,000 equity ounces at total cash costs
of $155 per ounce.
Australia
The Australian operations sold 475,300 equity ounces in the third quarter at
total cash costs of $201 per ounce, compared to 458,000 equity ounces at total
cash costs of $196 per ounce in the second quarter of 2002.
Kalgoorlie sold 94,600 equity ounces at total cash costs of $224 per ounce in
the third quarter. Higher costs were attributable to the unbudgeted continuation
of underground operations at Mount Charlotte and higher unit mining and
processing costs.
Pajingo sold 77,200 ounces at total cash costs of $98 per ounce, compared to
29,600 equity ounces at $128 per ounce for the year ago quarter. Effective
February 15, 2002, Newmont increased its ownership interest in Pajingo from 50%
to 100%. Production was impacted by a temporary substitution of low grade
stockpile feed for the mill in place of higher grade underground ores.
The Tanami operations sold 133,400 equity ounces at total cash costs of $206 per
ounce. The higher costs at Tanami are attributable to the processing of harder
ores and accelerated underground development costs at the Callie deposit.
The Yandal operations under-performed during the quarter. Sales were 170,100
ounces at total cash costs of $231 per ounce. The Yandal operations comprise
Jundee, Bronzewing and Wiluna.
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 11 of 19
At Jundee, 73,100 ounces were sold at total cash costs of $205 per ounce. Lower
than modeled stockpile grades were encountered and unbudgeted costs were
incurred in the completion of open pit mining.
At Bronzewing, 67,400 ounces were sold at total cash costs of $243 per ounce.
Production was adversely impacted by a change in stope sequencing which resulted
in lower grade stopes being accessed in the third quarter, in addition to a
number of one-off costs incurred with the transition to owner mining.
At Wiluna, 29,600 ounces were sold at total cash costs of $269 per ounce.
Wiluna's performance suffered from a delay in the start up of the BIOX tailings
treatment plant.
For 2002, the Australian operations are expected to sell 1.62 million equity
ounces at total cash costs of $189 per ounce.
Other Overseas Operations
For the third quarter, Newmont's other overseas operations contributed sales of
162,900 equity ounces at total cash costs of $149 per ounce, compared to 140,900
equity ounces at total cash costs of $146 per ounce in the year ago quarter.
The Zarafshan operation in Uzbekistan turned in a solid third quarter, selling
70,300 equity ounces at total cash costs of $122 per ounce. This represents a
13% improvement in sales and a $7 decrease in cash costs compared to the year
ago quarter. For 2002, Zarafshan is expected to sell 250,000 equity ounces at
total cash costs of $133 per ounce.
The Martha mine in New Zealand sold 27,700 equity ounces at total cash costs of
$138 per ounce. For 2002, Martha is expected to sell 105,000 equity ounces at
total cash costs of $124 per ounce.
The Ovacik mine in Turkey sold 36,600 equity ounces at total cash costs of $123
per ounce. For 2002, Ovacik is expected to sell 120,000 ounces at total cash
costs of $138 per ounce.
The Minahasa mine in Indonesia sold 28,300 equity ounces at total cash costs of
$259 per ounce. For 2002, Minahasa is expected to sell 140,000 equity ounces at
total cash costs of $215 per ounce.
Equity Investments
Equity investments include Batu Hijau, the TVX Newmont Americas joint venture,
Echo Bay, Australian Magnesium Corporation and Australian Gold Refinery, and are
reported under "equity income of affiliates" in the income statement.
For the third quarter, these entities contributed $17.5 million in earnings to
Newmont. Batu Hijau accounted for $13.5 million; TVX Newmont Americas, $3.5
million; Echo Bay, $1.1 million and the two Australian entities had a combined
net loss of approximately $300,000.
In the third quarter of 2002, the equity investments contributed 217,700 equity
ounces of gold sales, comprising 96,900 ounces from Batu Hijau, 54,400 ounces
from TVX Newmont Americas and 66,400 ounces from Echo Bay.
Base Metals
Batu Hijau had a strong quarter, selling 203.5 million pounds of copper (114.5
million equity pounds) at a record net cash cost of $0.24 per pound, compared to
199.1 million pounds (112.0 million equity pounds) at $0.29 per pound a year
ago. The average realized price per pound was $0.62.
Lower cash costs were the result of increased mill throughput and higher average
ore grades. In the third quarter, ore grades averaged 0.85% copper (compared to
0.80% copper for the 2001 third quarter) due to accelerated mining in the deeper
portions of the ore body. The copper grade is expected to decrease in the fourth
quarter. For 2002, Batu Hijau is expected to sell between 350 and 360 million
pounds of copper at a net cash cost of $0.36 per pound.
The Golden Grove zinc and copper mine in Western Australia sold 43.5 million
pounds of zinc and 12.6 million pounds of copper in the third quarter of 2002.
Zinc cash costs in the third quarter were $0.21 per pound while copper cash
costs were $0.55 per pound. Zinc was sold at $0.33 per pound and copper at $0.75
per pound. For 2002, Golden Grove is expected to sell 100 million pounds of zinc
at a cash cost of $0.28 per pound, and to sell 40 million to 45 million pounds
of copper at a cash cost of $0.60 per pound.
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 12 of 19
PRODUCTION SUMMARY - AMERICAS
Nevada Canada Peru Bolivia Other1
Three months ended September 30 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Tons Mined (000 dry short tons)
Open Pit 35,808 32,479 n/a n/a 54,125 43,284 4,894 4,978 2,918 3,170
Underground 359 309 388 445 n/a n/a n/a n/a n/a n/a
Tons Milled/Processed (000)
Oxide 1,230 1,339 382 432 n/a n/a n/a n/a n/a n/a
Refractory 2,673 2,452 n/a n/a n/a n/a 1,952 1,927 n/a n/a
Leach 3,822 7,646 n/a n/a 42,029 22,982 1,569 1,905 1,015 920
Average Ore Grade (oz/ton)
Oxide 0.094 0.115 0.214 0.239 n/a n/a n/a n/a n/a n/a
Refractory 0.250 0.219 n/a n/a n/a n/a 0.049 0.065 n/a n/a
Leach 0.035 0.037 n/a n/a 0.023 0.028 0.019 0.021 0.027 0.026
Average Mill Recovery Rate (%)
Oxide 66.3 72.8 94.7 95.1 n/a n/a n/a n/a n/a n/a
Refractory 87.5 88.0 n/a n/a n/a n/a 58.7 62.1 n/a n/a
Equity Ounces Produced (000)
Oxide 76.5 102.7 75.3 90.6 n/a n/a n/a n/a n/a n/a
Refractory 520.9 420.8 n/a n/a n/a n/a 50.4 70.6 n/a n/a
Leach 93.5 120.6 n/a n/a 328.1 266.0 13.0 4.7 34.0 30.5
- ------------------------------------------------------------------------------------------------------------------------------------
Total 690.9 644.1 75.3 90.6 328.1 266.0 63.4 75.3 34.0 30.5
Equity Ounces Sold (000) 722.0 653.9 80.4 93.1 329.6 264.0 64.9 76.9 34.0 30.5
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $204 $215 $201 $198 $115 $112 $158 $131 $189 $176
Capitalized mining & other 14 17 1 1 (2) (2) (6) (4) (5) (5)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 218 232 202 199 113 110 152 127 184 171
Royalties and production taxes 7 6 1 6 4 4 - - 7 13
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 225 238 203 205 117 114 152 127 191 184
Reclamation and mine closure costs 3 4 6 6 4 3 5 5 1 1
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 228 242 209 211 121 117 157 132 192 185
Non-cash inventory adjustment - - - - - - - - - -
Depreciation and amortization 54 44 65 61 63 46 52 65 54 62
Depreciation and amortization adjustment - - - - - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs $282 $286 $274 $272 $184 $163 $209 $197 $246 $247
- ------------------------------------------------------------------------------------------------------------------------------------
1 Other comprises La Herradura (Mexico) and Mesquite (California).
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 13 of 19
PRODUCTION SUMMARY - AMERICAS
Nevada Canada Peru Bolivia Other1
Nine months ended September 30 2002 2001 2002 2001 2002 2001 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Tons Mined (000 dry short tons)
Open Pit 100,917 105,417 n/a n/a 153,461 111,100 14,631 13,074 9,022 15,967
Underground 980 828 1,171 1,197 n/a n/a n/a n/a n/a n/a
Tons Milled/Processed (000)
Oxide 3,560 3,873 1,180 1,203 n/a n/a n/a n/a n/a n/a
Refractory 7,196 6,872 n/a n/a n/a n/a 5,746 5,741 n/a n/a
Leach 11,582 17,254 n/a n/a 108,549 57,937 4,664 2,161 2,971 6,976
Average Ore Grade (oz/ton)
Oxide 0.092 0.108 0.225 0.235 n/a n/a n/a n/a n/a n/a
Refractory 0.244 0.224 n/a n/a n/a n/a 0.049 0.059 n/a n/a
Leach 0.032 0.034 n/a n/a 0.023 0.030 0.018 0.021 0.026 0.028
Average Mill Recovery Rate (%)
Oxide 65.9 70.7 95.0 95.3 n/a n/a n/a n/a n/a n/a
Refractory 89.0 89.3 n/a n/a n/a n/a 59.6 61.9 n/a n/a
Equity Ounces Produced (000)
Oxide 219.3 306.2 261.2 254.7 n/a n/a n/a n/a n/a n/a
Refractory 1,371.5 1,301.9 n/a n/a n/a n/a 150.7 187.5 n/a n/a
Leach 325.5 373.7 n/a n/a 816.2 708.4 41.5 6.5 92.7 121.0
- ------------------------------------------------------------------------------------------------------------------------------------
Total 1,916.3 1,981.8 261.2 254.7 816.2 708.4 192.2 194.0 92.7 121.0
Equity Ounces Sold (000) 1,927.1 1,986.6 272.2 260.6 823.1 719.5 191.9 201.1 92.7 121.0
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $220 $213 $194 $190 $127 $112 $160 $170 $182 $188
Capitalized mining & other 9 6 1 2 (2) (1) (6) (6) (8) -
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 229 219 195 192 125 111 154 164 174 188
Royalties and production taxes 6 4 - 6 5 4 - - 4 6
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 235 223 195 198 130 115 154 164 178 194
Reclamation and mine closure costs 2 4 6 6 2 3 4 5 2 13
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 237 227 201 204 132 118 158 169 180 207
Non-cash inventory adjustment 1 - - - - - - - - -
Depreciation and amortization 51 44 67 66 73 51 50 68 47 53
Depreciation and amortization adjustment (2) - - - - - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs $287 $271 $268 $270 $205 $169 $208 $237 $227 $260
- ------------------------------------------------------------------------------------------------------------------------------------
1 Other comprises La Herradura (Mexico) and Mesquite (California).
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 14 of 19
PRODUCTION SUMMARY - AUSTRALIA
Kalgoorlie Pajingo Tanami Yandal
Three months ended September 30 2002 2001 2002 2001 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Tons Mined (000 dry short tons) 11,492 - 158 96 4,103 - 1,001 -
Tons Milled/Processed (000 dry short tons) 1,702 - 196 93 1,112 - 1,417 -
Average Ore Grade (oz/ton) 0.059 - 0.366 0.346 0.147 - 0.122 -
Average Mill Recovery Rate (%) 81.9 96.6 96.9 96.4 - 91.3 -
Equity Ounces Produced (000) 94.1 - 69.6 30.9 134.7 - 165.9 -
Equity Ounces Sold (000) 94.6 - 77.2 29.6 133.4 - 170.1 -
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $199 - $96 $116 $187 - $232 -
Capitalized mining & other 18 - (3) 1 (2) - (8) -
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 217 - 93 117 185 - 224 -
Royalties and production taxes 7 - 5 11 21 - 7 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 224 - 98 128 206 - 231 -
Reclamation and mine closure costs 4 - 4 1 5 - 5 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 228 - 102 129 211 - 236 -
Non-cash inventory adjustment 1 - - - - - - -
Depreciation and amortization 21 - 41 34 38 - 80 -
Depreciation and amortization adjustment 7 - 54 - 37 - (6) -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs $257 - $197 $163 $286 - $310 -
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCTION SUMMARY - AUSTRALIA
Kalgoorlie Pajingo Tanami Yandal
Nine months ended September 30 2002 2001 2002 2001 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Tons Mined (000 dry short tons) 28,334 - 472 277 16,833 - 8,241 -
Tons Milled/Processed (000 dry short tons) 4,438 - 537 268 2,722 - 3,416 -
Average Ore Grade (oz/ton) 0.059 - 0.381 0.350 0.144 - 0.136 -
Average Mill Recovery Rate (%) 82.7 - 96.8 96.9 96.6 - 92.1 -
Equity Ounces Produced (000) 223.1 - 203.8 92.0 328.6 - 437.9 -
Equity Ounces Sold (000) 221.1 - 208.6 90.9 318.1 - 423.8 -
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $202 - $87 $100 $183 - $211 -
Capitalized mining & other 11 - (3) 2 1 - 1 -
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 213 - 84 102 184 - 212 -
Royalties and production taxes 7 - 7 6 18 - 8 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 220 - 91 108 202 - 220 -
Reclamation and mine closure costs 5 - 4 1 5 - 5 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 225 - 95 109 207 - 225 -
Non-cash inventory adjustment 10 - 4 - 3 - 1 -
Depreciation and amortization 22 - 41 33 35 - 82 -
Depreciation and amortization adjustment 4 - 43 - 36 - (13) -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs $261 - $183 $142 $281 - $295 -
- ------------------------------------------------------------------------------------------------------------------------------------
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 15 of 19
PRODUCTION SUMMARY - OTHER OVERSEAS OPERATIONS
Uzbekistan Other1
Three months ended September 30 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Tons Mined (000 dry short tons) n/a n/a 3,357 1.811
Tons Milled/Processed (000)
Leach 2,053 2,001 - 522
Mill n/a n/a 604 208
Average Ore Grade (oz/ton) 0.055 0.042 0.173 0.158
Average Mill Recovery Rate (%) n/a n/a 91.4 89.4
Equity Ounces Produced (000) 67.1 58.9 96.4 88.4
Equity Ounces Sold (000) 70.3 62.5 92.6 78.4
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs ($/oz)
Direct mining and production costs $120 $125 $182 $153
Capitalized mining & other 2 4 (18) 3
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 122 129 164 156
Royalties and production taxes - - 5 3
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 122 129 169 159
Reclamation and mine closure costs (3) 1 12 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 119 130 181 161
Non-cash inventory adjustment - - - -
Depreciation and amortization 27 40 69 50
Depreciation and amortization adjustment - - 42 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs $146 $170 $292 $211
- ------------------------------------------------------------------------------------------------------------------------------------
1 Other comprises Ovacik (Turkey), Martha (New Zealand) and Minahasa
(Indonesia).
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 16 of 19
PRODUCTION SUMMARY - OTHER OVERSEAS OPERATIONS
Uzbekistan Other1
Nine months ended September 30 2002 2001 2002 2001
- ------------------------------------------------------------------------------------------------------------------------------------
Tons Mined (000 dry short tons) n/a n/a 7,303 5,253
Tons Milled/Processed (000)
Leach 5,912 5,839 - 1.367
Mill n/a n/a 1,586 549
Average Ore Grade (oz/ton) 0.052 0.043 0.183 0.180
Average Mill Recovery Rate (%) n/a n/a 91.3 91.4
Equity Ounces Produced (000) 200.8 162.0 273.5 267.0
Equity Ounces Sold (000) 194.0 162.6 273.0 275.4
- ------------------------------------------------------------------------------------------------------------------------------------
Production Costs Per Ounce ($/oz)
Direct mining and production costs $133 $133 $173 $113
Capitalized mining & other 2 3 (16) 18
- ------------------------------------------------------------------------------------------------------------------------------------
Cash operating costs 135 136 157 131
Royalties and production taxes - - 5 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total cash costs 135 136 162 133
Reclamation and mine closure costs (2) 1 6 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total costs applicable to sales 133 137 168 135
Non-cash inventory adjustment - - 4 -
Depreciation and amortization 29 51 62 55
Depreciation and amortization adjustment - - 33 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total production costs $162 $188 $267 $190
- ------------------------------------------------------------------------------------------------------------------------------------
1 Other comprises Ovacik (Turkey), Martha (New Zealand) and Minahasa
(Indonesia).
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 17 of 19
Base Metals
EQUITY PRODUCTION AND COST SUMMARY
BATU HIJAU
Three Months Ended September 30 2002 2001
- --------------------------------------------------------------------------------
Tons mined (000)........................................ 67,634 49,222
Dry tons processed (000)................................ 14,226 12,320
Average copper grade (%)................................ 0.85 0.80
Average recovery rate (%)............................... 90.4 92.1
Copper pounds produced (000)............................ 219,645 184,415
Equity copper pounds produced (000)..................... 123,550 103,733
Equity copper pounds sold (000)......................... 114,487 111,997
Realized copper price ($/lb) ........................... $0.62 $0.67
Copper net cash cost ($/lb) ............................ $0.24 $0.29
Nine Months Ended September 30 2002 2001
- --------------------------------------------------------------------------------
Tons mined (000)........................................ 185,261 133,351
Dry tons processed (000)................................ 39,026 35,317
Average copper grade (%)................................ 0.73 0.80
Average recovery rate (%) .............................. 89.3 90.4
Copper pounds produced (000)............................ 505,375 519,657
Equity copper pounds produced (000)..................... 284,273 292,307
Equity copper pounds sold (000)......................... 271,427 282,491
Realized copper price ($/lb) ........................... $0.70 $0.71
Copper net cash cost ($/lb) ............................ $0.31 $0.35
Three months ended September 30, 2002 Co- Product
($ million) By-Product Copper Gold Total
- --------------------------------------------------------------------------------
Revenue $71,455 $71,455 $29,089 $100,544
- --------------------------------------------------------------------------------
Cash production costs 58,090 41,284 16,806 58,090
By-product credits (30,283) (849) (345) (1,194)
- --------------------------------------------------------------------------------
Total cash costs 27,807 40,435 16,461 56,896
Non-cash costs 16,203 11,515 4,688 16,203
- --------------------------------------------------------------------------------
Total production costs $44,010 $51,950 $21,149 $73,099
- --------------------------------------------------------------------------------
Pounds of copper sold (000) 114,487
Ounces of gold sold (000) 96.9
- --------------------------------------------------------------------------------
Reported cash cost ($/lb) $0.24 $0.35 $170
Reported non-cash cost ($/lb) $0.14 $0.10 $48
- --------------------------------------------------------------------------------
Total cost ($/lb) $0.38 $0.45 $218
- --------------------------------------------------------------------------------
BATU HIJAU CONTINUED
Nine months ended September 30, 2002 Co- Product
($ million) By-Product Copper Gold Total
- --------------------------------------------------------------------------------
Revenue $190,466 $190,466 $60,981 $251,447
- --------------------------------------------------------------------------------
Cash production costs 147,563 111,776 35,787 147,563
By-product credits (63,738) (2,088) (669) (2,757)
- --------------------------------------------------------------------------------
Total cash costs 83,825 109,688 35,118 144,806
Non-cash costs 49,064 37,165 11,899 49,064
- --------------------------------------------------------------------------------
Total production costs $132,889 $146,853 $47,017 $193,870
- --------------------------------------------------------------------------------
Pounds of copper sold (000) 271,427
Ounces of gold sold (000) 200.2
- --------------------------------------------------------------------------------
Reported cash cost ($/lb) $0.31 $0.40 $175
Reported non-cash cost ($/lb) $0.18 $0.14 $60
- --------------------------------------------------------------------------------
Total cost ($/lb) $0.49 $0.54 $235
- --------------------------------------------------------------------------------
GOLDEN GROVE
Three Months Ended September 30 2002 2001
- --------------------------------------------------------------------------------
Tons mined (000)........................................ 386,003 -
Tons processed (000).................................... 363,350 -
Copper head grade (%) .................................. 4.8% -
Copper pounds produced (000)............................ 15,078 -
Copper pounds sold (000)................................ 12,594 -
Copper price ($/lb)..................................... $0.75 -
Copper cash cost ($/lb) ................................ $0.55 -
Zinc head grade (%) .................................... 15.3% -
Zinc pounds produced (000).............................. 35,174 -
Zinc pounds sold (000).................................. 43,455 -
Zinc price ($/lb) ...................................... $0.33 -
Zinc cash cost ($/lb)................................... $0.21 -
Ounces of gold sold (000) .............................. 1.2 -
Ounces of silver sold (000)............................. 46.1 -
- --------------------------------------------------------------------------------
Nine Months Ended September 30 2002 2001
- --------------------------------------------------------------------------------
Tons mined (000)........................................ 951,971 -
Tons processed (000).................................... 917,362 -
Head grade copper (%)................................... 5.2% -
Copper pounds produced (000)............................ 42,927 -
Copper pounds sold (000)................................ 37,669 -
Copper price ($/lb) .................................... $0.73 -
Copper cash cost ($/lb) ................................ $0.56 -
Zinc head grade (%) .................................... 13.8% -
Zinc pounds produced (000).............................. 76,062 -
Zinc pounds sold (000).................................. 112,837 -
Zinc price ($/lb) ...................................... $0.34 -
Zinc cash cost ($/lb)................................... $0.21 -
Ounces of gold sold (000)............................... 10.3 -
Ounces of silver sold (000)............................. 899.5 -
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 18 of 19
GOLD HEDGE POSITION - CURRENT MATURITY SUMMARY1
(000 oz)
Normandy Group Book3 Legacy Newmont Book
- -------------------------------------------------------------------------------------------------------------------------------
Gold Purchased Gold Forward Combination | Price Capped
Put Options Sales Options & Other | Contracts
Date Ounces Price2 Ounces Price2 Ounces Price2 | Ounces Price2
- -------------------------------------------------------------------------------------------------------------------------------
2002 Q4 105 $297 279 $302 |
2003 316 $296 1,216 $299 14 $979 |
2004 291 $293 1,140 $299 21 $525 |
2005 461 $309 368 $301 82 $296 | 500 $350
2006 169 $335 363 $318 65 $293 |
2007 20 $401 215 $297 256 $335 |
2008 118 $332 80 $304 933 $323 | 1,000 $384
2009 169 $325 31 $347 300 $350 | 600 $381
2010 208 $384 |
2011 208 $380 | 250 $392
- -------------------------------------------------------------------------------------------------------------------------------
Total/Average 1,649 $310 3,692 $302 2,087 $344 | 2,350 $377
- -------------------------------------------------------------------------------------------------------------------------------
Notes
1 For more detailed descriptions, definition and explanations, refer to the
company's Form 10-Q filing.
2 Prices quoted are gross contract prices, which represent the gross cashflow
per ounce of each contract. Not included in this price is the additional
cash outflow 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.
3 The mark-to-market value of the Normandy hedge book was negative $412
million at September 30, 2002. The breakdown of this is as follows: Newmont
Australia Limited (28%), Newmont NFM (6%) and Newmont Yandal Operations
Limited (66%).
NEWMONT 3Q 2002 RESULTS (NOVEMBER 12, 2002) Page 19 of 19