Newmont Generates First Quarter Net Cash From Continuing Operations of $387 Million ($0.82 per share); Maintaining 2009 Outlook
This release should be read in conjunction with Newmont's First Quarter
2009 Form 10-Q filed with the Securities and Exchange Commission on April 30,
2009 (available at www.newmont.com).
DENVER, April 30 /PRNewswire-FirstCall/ -- Newmont Mining Corporation
(NYSE: NEM) ("Newmont" or the "Company") today announced first quarter
results, with net cash from continuing operations of $387 million ($0.82 per
share) with equity gold sales of 1.27 million ounces at an average realized
gold price of $906 per ounce. Costs applicable to sales were $435 per ounce,
and adjusted net income(1) was $208 million ($0.44 per share). Net income on
a GAAP basis(2) was $189 million ($0.40 per share) for the first quarter,
compared to $365 million ($0.81 per share) in the prior year quarter,
primarily due to lower realized gold and copper prices.
First Quarter 2009 Highlights:
-- Maintaining 2009 outlook for equity gold sales and cost applicable to
sales per ounce;
-- Net cash provided from continuing operations of $387 million ($0.82
per
share);
-- Equity gold sales of 1.27 million ounces at an average realized gold
price of $906 per ounce;
-- Equity copper sales of 43 million pounds at an average realized copper
price of $1.69 per pound; and
-- Adjusted net income(1) of $208 million ($0.44 per share).
"Our operations provided solid results that were in-line with our
expectations and this performance sets us up well to deliver on our operating
plans for the full year in 2009. Project execution is also going well and is
a clear focus for the balance of the year. Completing our Boddington project
by mid-year and successfully ramping up to commercial production is a clear
driver of our 2009 performance," said Richard O'Brien, President and Chief
Executive Officer.
Mr. O'Brien further added, "Lower commodity prices relative to last year
both hurt and helped our performance in the first quarter. Lower copper
prices, in particular, negatively impacted our earnings and cash flow. One
the positive side, lower than expected diesel costs and Australian dollar
exchange rates resulted in lower than expected costs applicable to sales. If
input commodity prices remain at our forecasted levels for the balance of the
year and gold stays in the current trading range, we expect expanding margins
for the rest of the year."
(1) See reconciliation from adjusted net income to GAAP Net income on
page 9 of this release.
(2) In this release, GAAP Net income refers to Net income attributable to
Newmont stockholders.
The Company is maintaining its previously announced 2009 equity gold
sales outlook of between 5.2 and 5.5 million ounces at costs applicable to
sales of between $400 and $440 per ounce. The Company's costs applicable to
sales forecast for 2009 now assumes an oil price of $50 per barrel and an
Australian dollar exchange rate of 0.70 for the balance of the year. Costs
applicable to sales are expected to change by approximately $6 per ounce for
every $10 change in the oil price and by roughly $3 per ounce for every 0.10
change in the Australian dollar exchange rate for the remainder of the year.
Regional Operations
In the first quarter of 2009, the Company reported equity gold sales of
1.27 million ounces at costs applicable to sales of $435 per ounce. The
Company's operations delivered equity gold sales slightly above expectations
as higher than expected sales in Nevada, Australia and at Batu Hijau in
Indonesia were partially offset by lower sales at Yanacocha in Peru. Costs
applicable to sales per ounce were lower than expected in Nevada, in
Australia, at Yanacocha, at Batu Hijau and at Ahafo, partially offset by
higher costs at Kori Kollo in Bolivia.
Nevada - Nevada sold 518,000 equity ounces of gold at costs applicable to
sales of $509 per ounce during the first quarter. Equity gold sales were
higher than expected primarily due to higher throughput at Mill 6 and the Sage
Autoclave and higher underground production from Leeville, Chukar and Carlin
East, partially offset by lower production at Midas due to the temporary
suspension of mining following a ground failure which curtailed production in
March but has since resumed as of the end of April 2009. Although costs
applicable to sales per ounce increased from the prior year quarter due to
lower production, higher underground contracted service costs and lower
by-product credits, results for the first quarter were below expectations due
to higher gold sales and lower diesel costs. The Company continues to expect
2009 equity gold sales from Nevada of between 1.8 and 2.0 million ounces at
costs applicable to sales of between $535 and $575 per ounce.
Yanacocha - Equity gold sales during the first quarter at Yanacocha in
Peru were 241,000 ounces at costs applicable to sales of $324 per ounce.
Equity gold sales were below expectations due to a change in mine sequencing
that resulted in lower mill grades, partially offset by higher leach pad
production. Costs applicable to sales per ounce were lower than expected due
to lower input costs partially offset by lower silver by-product credits and
higher royalty and production taxes from higher realized gold prices. The
Company is maintaining its 2009 outlook for equity gold sales of between
975,000 and 1,025,000 ounces at costs applicable to sales of between $290 and
$310 per ounce.
Australia/New Zealand - Equity gold sales during the first quarter in
Australia/New Zealand were 293,000 ounces at costs applicable to sales of $492
per ounce. Equity gold sales exceeded expectations as higher grades and
recoveries at Jundee and Kalgoorlie more than offset lower throughput and
recoveries at Tanami. Costs applicable to sales per ounce were lower than
expected due to higher gold sales and a more favorable Australian dollar
exchange rate during the quarter, partially offset by higher royalties and
production taxes. Regional costs applicable to sales are expected to change
by approximately $15 per ounce for every 0.10 change in the Australian dollar
exchange rate for the remainder of the year. The Company is maintaining its
2009 outlook for equity gold sales of between 1.5 and 1.6 million ounces at
costs applicable to sales of between $440 and $480 per ounce.
Batu Hijau - Equity gold and copper sales during the first quarter at
Batu Hijau in Indonesia were 30,000 ounces and 43 million pounds,
respectively, at costs applicable to sales of $406 per ounce and $0.89 per
pound, respectively. Equity gold and copper sales were higher than expected
primarily due to higher throughput from increased mill availability, higher
recoveries and increased concentrate shipments. Total costs applicable to
sales were lower than expected as a result of lower input costs, partially
offset by additional sales from higher cost concentrate inventories. Costs
applicable to sales allocated to gold were higher than expected due to the
application of co-product accounting, which resulted in a higher allocation of
costs to gold, as the Company realized higher gold revenues relative to copper
during the quarter. For 2009, the Company continues to expect equity gold and
copper sales of between 225,000 and 250,000 ounces and 210 and 230 million
pounds, respectively. As a result of an assumed higher gold price relative to
copper, the Company now expects costs applicable to sales for gold and copper
to be between $280 and $320 per ounce and $0.50 and $0.65 per pound,
respectively.
Ahafo - Equity gold sales during the first quarter at Ahafo in Ghana were
144,000 ounces at costs applicable to sales of $399 per ounce. Equity gold
sales were in-line with expectations as processing of higher grade material
was offset by lower throughput. Costs applicable to sales per ounce were
lower than expected primarily due to lower input costs. The Company is
maintaining its 2009 outlook for equity gold sales of between 500,000 and
525,000 ounces from Ahafo. As a result of lower oil prices and an improved
power availability assumption, the Company has lowered its 2009 outlook for
costs applicable to sales to between $425 and $450 per ounce.
Capital Update
Consolidated capital expenditures were $330 million during the first
quarter, with over 50% attributable to the Boddington project in Australia.
The Company is maintaining its 2009 consolidated capital expenditure outlook
at between $1.4 and $1.6 billion.
Boddington - Development of the Boddington project in Australia was
approximately 95% complete at the end of the first quarter, with start-up
expected in mid-2009 and an anticipated 12-month ramp-up schedule. The Company
continues to expect capital expenditures of between $2.6 and $2.9 billion on a
100% basis. Assuming the completion of the previously announced acquisition
of AngloGold Ashanti Ltd.'s 33.33% interest in the Boddington project, the
Company continues to expect annual gold sales of approximately one million
ounces at costs applicable to sales of approximately $300 per ounce (net of
by-product credits) for the first full five years of operation.
Consolidated Statements of Income
Three Months Ended
March 31,
----------
2009 2008
---- ----
Revenues
Sales - gold, net $1,391 $1,511
Sales - copper, net 161 432
--- ---
1,552 1,943
----- -----
Costs and expenses
Costs applicable to sales - gold (1) 668 641
Costs applicable to sales - copper (1) 85 150
Amortization 192 182
Accretion 9 8
Exploration 41 39
Advanced projects, research and development 31 30
General and administrative 39 29
Other expense, net 77 63
-- --
1,142 1,142
----- -----
Other income (expense)
Other income, net 9 15
Interest expense, net (32) (28)
-- --
(23) (13)
Income from continuing operations before income
tax expense and other items 387 788
Income tax expense (105) (232)
--- ---
Equity loss of affiliates (5) (5)
-- --
Income from continuing operations 277 551
Income from discontinued operations -- 6
--- ---
Net income 277 557
Less: Net income attributable to noncontrolling
interests 88 192
Net income attributable to Newmont stockholders $189 $365
=== ===
Net income attributable to Newmont stockholders:
Continuing operations $189 $359
Discontinued operations -- 6
$189 $365
Income per common share
Basic:
Continuing operations $0.40 $0.80
Discontinued operations -- 0.01
--- ----
$0.40 $0.81
==== ====
Diluted:
Continuing operations $0.40 $0.79
Discontinued operations -- 0.01
--- ----
$0.40 $0.80
==== ====
Basic weighted-average common shares outstanding
472 453
=== ===
Diluted weighted-average common shares
outstanding 473 457
=== ===
Cash dividends declared per common share $0.10 $0.10
==== ====
(1) Exclusive of Amortization and Accretion.
Consolidated Balance Sheets
At At
March 31, December 31,
2009 2008
---- ----
(unaudited, in millions)
ASSETS
Cash and cash equivalents $1,451 $435
Marketable securities and other short-term
investments 13 12
Trade receivables 166 104
Accounts receivable 383 223
Inventories 475 519
Stockpiles and ore on leach pads 319 324
Deferred income tax assets 194 286
Other current assets 350 458
--- ---
Current assets 3,351 2,361
Property, plant and mine development, net 10,194 10,132
Investments 753 655
Stockpiles and ore on leach pads 1,237 1,145
Deferred income tax assets 1,120 1,039
Other long-term assets 182 207
Goodwill 188 188
--- ---
Total assets $17,025 $15,727
====== ======
LIABILITIES
Current portion of long-term debt $223 $169
Accounts payable 276 412
Employee-related benefits 172 178
Income and mining taxes 98 58
Other current liabilities 802 779
--- ---
Current liabilities 1,571 1,596
Long-term debt 2,749 3,072
Reclamation and remediation liabilities 717 716
Deferred income tax liabilities 1,124 1,051
Employee-related benefits 384 379
Other long-term liabilities 251 252
--- ---
Total liabilities 6,796 7,066
----- -----
STOCKHOLDERS' EQUITY
Common stock 766 709
Additional paid-in capital 8,024 6,831
Accumulated other comprehensive loss (208) (253)
Retained earnings 189 4
--- ---
Total Newmont stockholders' equity 8,771 7,291
Noncontrolling interests 1,458 1,370
----- -----
Total stockholders' equity 10,229 8,661
------ -----
Total liabilities and stockholders'
equity $17,025 $15,727
====== ======
Consolidated Statements of Cash Flows
Three Months Ended
March 31,
---------
2009 2008
(unaudited, in millions)
Operating activities:
Net income $277 $557
Adjustments:
Amortization 192 182
Income from discontinued operations -- (6)
Accretion of accumulated reclamation
obligations 12 10
Deferred income taxes (19) (51)
Write-down of investments 6 22
Stock based compensation and other
benefits 14 11
Other operating adjustments and
write-downs 35 23
Net change in operating assets and liabilities (130) (154)
Net cash provided from continuing operations 387 594
Net cash used in discontinued operations -- (100)
Net cash provided from operations 387 494
Investing activities:
Additions to property, plant and mine
development (330) (450)
Investments in marketable debt and
equity securities -- (3)
Acquisitions, net (11) (318)
Other (13) 4
Net cash used in investing activities
of continuing operations (354) (767)
Net cash used in investing activities
of discontinued operations -- (3)
Net cash used in investing activities (354) (770)
Financing activities:
Proceeds from debt, net 1,369 572
Repayment of debt (1,590) (376)
Dividends paid to common stockholders (49) (45)
Dividends paid to noncontrolling interests -- (98)
Proceeds from stock issuance, net 1,239 17
Change in restricted cash and other 13 1
Net cash provided from financing
activities 982 71
Effect of exchange rate changes on cash 1 (12)
Net change in cash and cash equivalents 1,016 (217)
Cash and cash equivalents at beginning
of period 435 1,231
Cash and cash equivalents at end of
period $1,451 $1,014
Sales Statistics
Three Months Ended
March 31,
----------
2009 2008
---- ----
Gold
------
Consolidated ounces sold (thousands):
North America
Nevada (1) 518 526
La Herradura 25 24
-- --
543 550
--- ---
South America
Yanacocha 470 540
Kori Kollo 18 20
-- --
488 560
--- ---
Asia Pacific
Jundee 94 91
Tanami 85 95
Kalgoorlie 74 69
Waihi 40 31
Batu Hijau 66 120
-- ---
359 406
--- ---
Africa
Ahafo 144 105
--- ---
1,534 1,621
===== =====
Equity ounces sold (thousands):
North America
Nevada (1) 518 526
La Herradura 25 24
-- --
543 550
--- ---
South America
Yanacocha 241 277
Kori Kollo 16 18
-- --
257 295
--- ---
Asia Pacific
Jundee 94 91
Tanami 85 95
Kalgoorlie 74 69
Waihi 40 31
Batu Hijau 30 54
-- --
323 340
--- ---
Africa
Ahafo 144 105
--- ---
1,267 1,290
===== =====
Copper
--------
Batu Hijau pounds sold (millions):
Consolidated 95 105
Equity 43 47
(1) Includes incremental start-up ounces of 1 for the first
quarter of 2008.
Costs Applicable to Sales and Consolidated Capital Expenditures Statistics
Three Months Ended
March 31,
--------
2009 2008
---- ----
Gold
------
Costs Applicable to Sales ($/ounce) (1)
North America
Nevada $509 $409
La Herradura 387 324
--- ---
$503 $405
---- ----
South America
Yanacocha $324 $311
Kori Kollo 779 447
--- ---
$341 $316
---- ----
Asia Pacific
Jundee $353 $420
Tanami 574 524
Kalgoorlie 643 778
Waihi 367 455
Batu Hijau 406 308
--- ---
$476 $475
---- ----
Africa
Ahafo $399 $464
---- ----
Average $435 $396
==== ====
Copper
--------
Costs Applicable to Sales ($/pound) (1)
Batu Hijau $0.89 $1.43
Three Months Ended
March 31,
--------
2009 2008
---- ----
Consolidated Capital Expenditures ($ million)
North America
Nevada $58 $92
Hope Bay 1 9
La Herradura 9 11
- --
$68 $112
--- ----
South America
Yanacocha $39 $39
Kori Kollo - 2
- -
$39 $41
--- ---
Asia Pacific
Boddington $174 $204
Jundee 6 9
Tanami 10 9
Kalgoorlie 2 2
Waihi 2 9
Batu Hijau 11 29
-- --
$205 $262
---- ----
Africa
Ahafo $12 $31
Akyem 1 2
- -
$13 $33
--- ---
Corporate and Other $5 $2
-- --
Total $330 $450
==== ====
(1) Excludes Amortization and Accretion.
Supplemental Information
Classification Reporting Changes - Certain amounts for the three months
ended March 31, 2008 and at December 31, 2008 have been revised. The
adjustments are of a normal recurring nature except as discussed below. The
Company retrospectively adopted FSP No. APB 14-1, "Accounting for Convertible
Debt Instruments That May be Settled in Cash upon Conversion (Including
Partial Cash Settlement)" ("FSP APB 14-1"), which requires an allocation of
convertible debt proceeds between the liability component and the embedded
conversion option (i.e., the equity component). Additionally, the Company
prospectively adopted FASB Statement No. 160, "Noncontrolling Interests in
Consolidated Financial Statements - an amendment of ARB No. 51" ("FAS 160"),
with the exception of the presentation requirements which were adopted
retrospectively. FAS 160 requires the noncontrolling interests to be
classified as a separate component of stockholders' equity and net income.
Reconciliation of Adjusted Net Income to GAAP Net Income - Management of
the Company uses the non-GAAP financial measure Adjusted net income to
evaluate the Company's operating performance, and for planning and forecasting
future business operations. The Company believes the use of Adjusted net
income allows investors and analysts to compare the results of the continuing
operations of the Company and its direct and indirect subsidiaries relating to
the production and sale of minerals to similar operating results of other
mining companies, by excluding exceptional or unusual items, income or loss
from discontinued operations and the permanent impairment of assets, including
marketable securities and goodwill. Management's determination of the
components of Adjusted net income are evaluated periodically and based, in
part, on a review of non-GAAP financial measures used by mining industry
analysts.
Adjusted net income is not, and should not be used as, an alternative to
GAAP Net income as reflected in the consolidated financial statements of the
Company. Adjusted net income is not a measure of financial performance under
GAAP and this measure should not be considered in isolation or as a substitute
to performance measures calculated in accordance with GAAP. The table below
sets forth a reconciliation of Adjusted net income to GAAP Net income, which
is the most directly comparable GAAP financial measure.
Description ($ million
except per share,
after-tax) Q1 2009 Per Share Q1 2008 Per Share
------------------------ --------- ----------- --------- -----------
Adjusted net income $208 $0.44 $381 $0.85
Workforce reduction (9) (0.02) - -
Costs related to Boddington
acquisition (5) (0.01) - -
Write-down of marketable
securities (5) (0.01) (22) (0.05)
-------------------------- -- ----- --- -----
GAAP income from continuing
operations (1) $189 $0.40 $359 $0.80
Income from discontinued
operations (1) - - 6 0.01
------------------------- - --- --- ----
GAAP Net income (1) $189 $0.40 $365 $0.81
-------------------- ---- ----- ---- -----
(1) Attributable to Newmont stockholders.
2009 Annual Guidance - The table below sets forth the Company's current
outlook and forecast assumptions:
Description Q1 Update 2009 Original
----------- --------- -------------
Equity gold sales
(million ounces) 5,200 - 5,500 5,200 - 5,500
-------------------- ------------- -------------
Costs applicable to
sales ($/ounce) $400 - $440 $400 - $440
---------------------- ----------- -----------
Equity copper sales
(million pounds) 210 - 230 210 - 230
--------------------- --------- ---------
Costs applicable to
sales ($/pound) $0.50 - $0.65 $0.65 - $0.75
---------------------- ------------- -------------
Consolidated capital
expenditures ($ million) $1,400 - $1,600 $1,400 - $1,600
--------------------------- --------------- ---------------
Amortization ($ million) $775 - $825 $775 - $825
-------------------------- ----------- -----------
Exploration ($ million) $165 - $175 $165 - $175
------------------------- ----------- -----------
Advanced projects, research and
development ($ million) $120 - $150 $120 - $150
---------------------------------- ----------- -----------
General & administrative
($ million) $140 - $150 $140 - $150
--------------------------- ----------- -----------
Interest expense, net ($ million) $150 - $160 $150 - $160
-------------------- ----------- -----------
Effective tax rate 27% - 31% 28% - 32%
-------------------- --------- ---------
Forecast Assumptions Q1 Update 2009 Original
-------------------- --------- -------------
Oil price ($/barrel) $50 $70
-------------------- --- ---
Australian dollar exchange rate 0.7 0.75
------------------ --- ----
Copper price ($/pound) $1.50 $2.00
------------- ----- -----
To view complete financial disclosure, including regional mine
statistics, Results of Consolidated Operations, Liquidity and Capital
Resources, Management's Discussion & Analysis, the Form 10-Q, and a complete
outline of the 2009 Operating and Financial guidance by region, please see
www.newmont.com.
The Company's first quarter earnings conference call and webcast
presentation will be held on Thursday, April 30, 2009 beginning at 10:00 a.m.
Eastern Time (8:00 a.m. Mountain Time). To participate:
Dial-In Number 800-619-4068
Intl Dial-In Number 415-228-4564
Leader John Seaberg
Password Newmont
Replay Number 800-679-6944
Intl Reply Number 203-369-3316
The conference call will also be simultaneously carried on the Company's
website at www.newmont.com under Our Investors/Events and Presentations and
will be archived there for a limited time.
Cautionary Statement
This news release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended that are intended to be
covered by the safe harbor created by such sections and other applicable laws.
Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may",
"anticipate(s)", "estimate(s)", "should", "intend(s)" and similar expressions
are intended to identify forward-looking statements. Such forward-looking
statements include, without limitation, (i) estimates of future mineral
production and sales; (ii) estimates of future costs applicable to sales,
other expenses and taxes, for specific operations and on a consolidated basis;
(iii) estimates of future capital expenditures, construction, production or
closure activities; (iv) statements regarding future exploration expenditures,
results and reserves; (v) statements regarding fluctuations in capital and
currency markets; (vi) statements regarding potential cost savings,
productivity, operating performance, and ownership and cost structures; (vii)
expectations regarding the completion and timing of the remaining interest in
Boddington acquisition and other acquisitions or divestitures; and (viii)
expectations regarding the start-up time, design, mine life, production and
costs applicable to sales and exploration potential of the Boddington project
and other projects. 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 2008 Annual Report on Form 10-K,
filed on February 19, 2009, 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.
For further information: Investors, John Seaberg, +1-303-837-5743,
john.seaberg@newmont.com, or Media, Omar Jabara, +1-303-837-5114,
omar.jabara@newmont.com, both of Newmont Mining Corporation Web Site:
http://www.newmont.com
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