Newmont Announces Quarterly Revenue of $2.5 Billion, Cash Flow from Continuing Operations of $578 Million

This release should be read in conjunction with Newmont's Third Quarter 2012 Form 10-Q filed with the Securities and Exchange Commission on November 1, 2012 (available at www.newmont.com).

DENVER, Nov. 1, 2012 /CNW/ - Newmont Mining Corporation (NYSE: NEM) ("Newmont" or the "Company") today reported attributable net income from continuing operations of $400 million, or $0.81 per share, down 19% from $493 million, or $1.00 per share in the third quarter of 2011. Results for the third quarter of 2012 compared to the third quarter of 2011 were positively influenced by higher production from Nevada and at Yanacocha. Revenue from product sales also benefited from higher copper prices in the quarter. Results were also impacted by lower production and higher costs at Batu Hijau, (due to planned Phase 6 stripping), as well as previously announced lower ore tonnes and grade mined at Tanami and slightly lower grade at Ahafo due to mine sequencing. In addition, the Company incurred previously announced restructuring and other charges of $48 million. Adjusted net income[1] was $426 million, or $0.86 per share, compared with $635 million, or $1.29 per share, for the prior year quarter.

Quarterly Results

  • Consolidated revenue of $2.5 billion, a decrease of 10% from the prior year quarter;
  • Average realized gold and copper price of $1,659 per ounce and $3.55 per pound, down 2% and up 21%, respectively, from the prior year quarter;
  • Attributable gold and copper production of 1.2 million ounces and 35 million pounds, down 5% and 38%, respectively, from the prior year quarter; attributable gold and copper sales of 1.2 million ounces and 37 million pounds, down 4% and 27%, respectively, from the prior year quarter;
  • Gold and copper costs applicable to sales ("CAS") of $693 per ounce and $2.38 per pound, up 11% and 116%, respectively, from the prior year quarter;
  • Cash flow from continuing operations of $578 million, down 54% from the prior year quarter; and
  • Fourth quarter gold price-linked dividend payable of $0.35 per share, consistent with the prior year quarter.

"Balanced performance from our operating portfolio allowed us to deliver results that were on track with our expectations for the quarter with strong performances at both our Nevada complex in North America and Yanacocha in Peru offset by weaker performance in our Asia Pacific region, primarily at Boddington and Tanami in Australia," said Richard O'Brien, Chief Executive Officer. "We are also seeing clear progress on our commitment to deliver profitable ounces from new projects including our Akyem project in Ghana, which is 65% complete and proceeding on budget and on schedule to begin production in late 2013, and in Nevada where our Emigrant mine commenced production this quarter."

Newmont now expects to be at the low end of its previously announced 2012 outlook for attributable gold and copper production of 5.0 to 5.1 million ounces and 145 to 165 million pounds, and at the high end of its narrower CAS outlook range of between $650 and $675 per ounce (on a co-product basis), due to previously announced issues at Tanami, Boddington and Waihi. Newmont also increased its 2012 copper CAS outlook range to between $2.20 and $2.35 per pound, primarily due to higher cost production from Boddington and Batu Hijau in Indonesia.

Newmont is maintaining its 2012 attributable capital expenditure outlook of $2.7 to $3.0 billion, or $3.0 to $3.3 billion on a consolidated basis.

As previously announced, Newmont's Board of Directors approved a fourth quarter gold price-linked dividend payable of $0.35 per share[2] based upon the average London P.M. Gold Fix for the third quarter.

Operations

North America

Nevada – Attributable gold production in Nevada was 457,000 ounces at CAS of $661 per ounce during the third quarter. Gold production increased 7% from the prior year quarter due to higher mill grade at the Carlin Roaster, higher recovery at Mill 5 and higher leach placement as Emigrant commenced production, partially offset by lower grade at Phoenix. CAS per ounce increased 3% due to higher fuel prices, higher underground mining costs and lower capitalization of development costs, partially offset by higher by-product credits.

The Company is narrowing its outlook for 2012 attributable gold production of between 1.76 million and 1.78 million ounces at CAS of between $615 and $645 per ounce.

La Herradura – Attributable gold production at La Herradura in Mexico was 51,000 ounces at CAS of $608 per ounce during the third quarter. Gold production decreased 6% from the prior year quarter due to smelter adjustments, partially offset by additional leach placement. Leach placement was higher due to additional tons mined at Noche Buena. CAS per ounce increased 6% due to higher waste mining and employee profit sharing costs.

The Company is maintaining its outlook for 2012 attributable gold production of between 220,000 and 230,000 ounces at a higher CAS of between $585 and $615 per ounce, due to the expectation of mining lower grade material at Soledad and Dipolos due to mine sequencing.

South America

Yanacocha – Attributable gold production at Yanacocha in Peru was 182,000 ounces at CAS of $520 per ounce during the third quarter. Gold production increased 8% from the prior year quarter due to higher mill and leach pad recovery, partially offset by lower leach placement at Yanacocha, Carachugo and La Quinua. CAS per ounce decreased 15% due to higher production and lower mining costs, partially offset by higher royalties and lower by-product credits.

The Company is narrowing its outlook for 2012 attributable gold production to between 680,000 and 690,000 ounces at CAS of between $485 and $515 per ounce.

La Zanja – Attributable gold production during the third quarter at La Zanja in Peru was approximately 14,000 ounces.

The Company is maintaining its outlook for 2012 attributable gold production of between 50,000 and 60,000 ounces.

Asia Pacific

Boddington – Attributable gold and copper production during the third quarter at Boddington in Australia was 166,000 ounces and 16 million pounds, respectively, at CAS of $928 per ounce and $2.29 per pound, respectively. Gold and copper production increased 1% and 7%, respectively, from the prior year quarter due to higher mill grade. Gold CAS per ounce increased 25% from the prior year quarter due to higher mill maintenance costs and the impact of the carbon tax, which took effect in July 2012. Copper CAS increased 2% per pound due to higher mill maintenance costs, partially offset by higher copper production. CAS per ounce and per pound were also impacted by a stronger Australian dollar, net of hedging gains.

The Company is reducing its outlook for 2012 attributable gold production to between 725,000 and 750,000 ounces due to unplanned mill downtime, at a higher CAS of between $865 and $895 per ounce due to higher mill maintenance costs. The Company is maintaining its outlook for attributable copper production of between 70 and 80 million pounds at a slightly higher CAS of between $2.25 and $2.40 per pound, due to higher mill maintenance costs.

Batu Hijau – Attributable gold and copper production during the third quarter at Batu Hijau in Indonesia was 7,000 ounces and 19 million pounds, respectively, at CAS of $1,115 per ounce and $2.38 per pound, respectively. Gold and copper production decreased 89% and 54%, respectively, due to processing lower grade stockpile ore. Waste tons mined increased 57% from the prior year quarter as Phase 6 waste removal continues as planned. CAS increased 134% per ounce and 164% per pound, respectively, due to lower production and higher waste mining costs.

The Company is maintaining its outlook for 2012 attributable gold production of between 30,000 and 40,000 ounces of gold at a higher CAS of between $955 and $985 per ounce, due to higher waste mining costs. The Company is maintaining its outlook for attributable copper production of 75 to 85 million pounds at a slightly higher CAS of between $2.15 and $2.30 per pound, due to higher waste mining costs.

Other Australia/New Zealand – Attributable gold production during the third quarter was 222,000 ounces at CAS of $931 per ounce. Gold production decreased 14% from the prior year quarter due to lower underground mining rates at Tanami, a delay in open pit ore production at Waihi and lower grade at Jundee and Kalgoorlie, partially offset by higher throughput at Jundee and higher grade at Tanami. CAS per ounce increased 36% from the prior year quarter due to lower production, higher operating costs, a stronger Australian dollar, net of hedging gains and the impact of the carbon tax in Australia.

The Company is reducing its outlook for 2012 attributable gold production to between 935,000 and 960,000 ounces due to continued lower tonnes mined at Tanami and Waihi, at a higher CAS of between $885 and $915 per ounce due to lower production.

Africa

Ahafo – Attributable gold production during the third quarter at Ahafo in Ghana was 131,000 ounces at CAS of $561 per ounce. Gold production decreased 10% from the prior year quarter due to lower ore grade, partially offset by higher throughput and a drawdown of in-process inventory. CAS per ounce increased 12% from the prior year quarter due to lower production and higher labor costs, partially offset by lower power and mill maintenance costs.

The Company is maintaining its outlook for 2012 attributable gold production of between 555,000 to 570,000 ounces and narrowing its expected range of CAS to between $560 and $590 per ounce.

Capital Update

Consolidated capital expenditures were $811 million during the third quarter. Capital expenditures in North America were primarily related to the construction of the Phoenix secondary crusher and development of the Emigrant mine. Capital expenditures in South America were primarily related to the Conga and Merian projects, and the majority of capital expenditures in Asia Pacific were for surface and underground development. Capital expenditures in Africa were primarily related to the Akyem project. For the remainder of the year, 50% of 2012 consolidated capital expenditures are expected to be associated with major projects, while the remaining 50% is expected to be sustaining capital. Newmont is maintaining its 2012 attributable capital expenditure outlook to $2.7 to $3.0 billion, or $3.3 to $3.6 billion on a consolidated basis.

2012 Outlook



Attributable Production

Consolidated CAS

Consolidated Capital

Attributable Capital

Region

(Kozs, Mlbs)

($/oz, $/lb)

Expenditures ($M)

Expenditures ($M)






Nevada

1,760 - 1,780

$615 - $645

$750 - $800

$750 - $800

La Herradura

220 - 230

$585 - $615

$80 - $130

$80 - $130

North America

1,980 - 2,010

$615 - $645

$850 - $900

$850 - $900

Yanacocha

680 - 690

$485 - $515

$530 - $580

$270 - $310

La Zanja

50 - 60

n/a

-

-

Conga

-

-

$500 - $600

$250 - $300

South America

730 - 750

$485 - $515

$1,100 - $1,200

$550 - $600

Boddington

725 - 750

$865 - $895

$150 - $200

$150 - $200

Other Australia/NZ

935 - 960

$885 - $915

$325 - $375

$325 - $375

Batu Hijaud

30 - 40

$955 - $985

$200 - $225

$100 - $125

Asia Pacific

1,690 - 1,750

$870 - $900

$700 - $800

$600 - $700

Ahafo

555 - 570

$560 - $590

$240 - $270

$240 - $270

Akyem

-

-

$370 - $420

$370 - $420

Africa

555 - 570

$560 -$590

$600 - $700

$600 - $700

Corporate/Other

-

-

$55 - $65

$55 - $65

Total Gold

5,000 - 5,100

$650 - $675 a,b

$3,300 - $3,600 c

$2,700 - $3,000

Boddington

70 - 80

$2.25 - $2.40

-

-

Batu Hijaud

75 - 85

$2.15 - $2.30

-

-

Total Copper

145 - 165

$2.20 - $2.35




a 2012 Attributable CAS Outlook is $640 - $690 per ounce.

b 2012 Net Attributable CAS Outlook (inclusive of by-product credits) is $600 - $650 per ounce.

c Includes capitalized interest of approximately $140 million.

d Assumes Batu Hijau economic interest of 48.5% for 2012, subject to final divestiture obligations.










2012 Outlook and Assumptions


Description

Consolidated Expenses ($M)

Attributable Expenses ($M)




General & Administrative

$200 - $220

$200 - $220

Interest Expense

$240 - $260

$230 - $250

DD&A

$1,050 - $1,080

$890 - $920

Exploration Expense

$370 - $400

$340 - $370

Advanced Projects & R&D

$410 - $440

$350 - $380

Tax Rate

~32%

~32%

Assumptions



Gold Price ($/ounce)

$1,500

$1,500

Copper Price ($/pound)

$3.50

$3.50

Oil Price ($/barrel)

$90

$90

AUD Exchange Rate

$1.00

1.00

NEWMONT MINING CORPORATION


CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in millions except per share)


















Three Months Ended


Nine Months Ended




September 30,


September 30,




2012


2011


2012


2011















Sales

$

2,480


$

2,744


$

7,392


$

7,593















Costs and expenses













Costs applicable to sales (1)


1,088



1,008



3,107



2,865


Amortization


272



270



751



776


Reclamation and remediation


17



6



49



63


Exploration


115



104



309



255


Advanced projects, research and development


74



93



258



247


General and administrative


51



50



162



145


Other expense, net


131



36



377



196





1,748



1,567



5,013



4,547

Other income (expense)













Other income, net


52



(76)



121



3


Interest expense, net


(67)



(65)



(190)



(193)





(15)



(141)



(69)



(190)

Income before income and mining tax and other items


717



1,036



2,310



2,856

Income and mining tax expense


(228)



(371)



(746)



(863)

Equity income (loss) of affiliates


(9)



10



(39)



12

Income from continuing operations


480



675



1,525



2,005

Loss from discontinued operations


(33)



-



(104)



(136)

Net income


447



675



1,421



1,869

Net income attributable to noncontrolling interests


(80)



(182)



(285)



(475)

Net income attributable to Newmont stockholders

$

367


$

493


$

1,136


$

1,394















Net income attributable to Newmont stockholders:














Continuing operations

$

400


$

493


$

1,240


$

1,530



Discontinued operations


(33)



-



(104)



(136)




$

367


$

493


$

1,136


$

1,394

Income per common share













Basic:














Continuing operations

$

0.81


$

1.00


$

2.50


$

3.10



Discontinued operations


(0.07)



-



(0.21)



(0.28)




$

0.74


$

1.00


$

2.29


$

2.82


Diluted:














Continuing operations

$

0.81


$

0.98


$

2.48


$

3.05



Discontinued operations


(0.07)



-



(0.21)



(0.27)




$

0.74


$

0.98


$

2.27


$

2.78















Cash dividends declared per common share

$

0.35


$

0.30


$

1.05


$

0.65















(1) Excludes Amortization and Reclamation and remediation.

NEWMONT MINING CORPORATION




CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(unaudited, in millions)










Three Months Ended September 30,



Nine Months Ended September 30,



2012


2011



2012


2011

























Operating activities:














Net income


$

447


$

675



$

1,421


$

1,869

Adjustments:














Amortization



272



270




751



776

Loss from discontinued operations



33



-




104



136

Reclamation and remediation



17



6




49



63

Deferred income taxes



13



(68)




25



(106)

Stock based compensation and other non-cash benefits



19



18




55



62

Impairment of marketable securities



7



174




39



175

Gain on asset sales, net



(2)



(15)




(12)



(68)

Other operating adjustments and write-downs



43



6




149



102

Net change in operating assets and liabilities



(271)



197




(1,039)



(343)

Net cash provided from continuing operations



578



1,263




1,542



2,666

Net cash used in discontinued operations



(4)



(2)




(12)



(4)

Net cash provided from operations



574



1,26