Newmont's Income Increases 38% to $537 Million ($1.09 per share) on Record
Revenues of $2.6 Billion for the Third Quarter
This release should be read in conjunction with Newmont's Third Quarter
2010 Form 10-Q filed with the Securities and Exchange Commission on
November 2, 2010 (available at www.newmont.com).
</pre>
<p><span class="xn-location">DENVER</span>, <span class="xn-chron">Nov. 2, 2010</span> /CNW/ -- Newmont Mining Corporation (NYSE: NEM) ("Newmont" or the "Company") today announced record quarterly revenue of <span class="xn-money">$2.6 billion</span> for the third quarter compared to <span class="xn-money">$2.0 billion</span> in the prior year quarter. Net income attributable to Newmont stockholders increased 38% to <span class="xn-money">$537 million</span> (<span class="xn-money">$1.09</span> per share), compared to <span class="xn-money">$388 million</span> (<span class="xn-money">$0.79</span> per share) in the prior year quarter. Adjusted net income(1) rose 38% to <span class="xn-money">$534 million</span> (<span class="xn-money">$1.08</span> per share) from <span class="xn-money">$387 million</span> (<span class="xn-money">$0.79</span> per share) in the third quarter of 2009, while the Company's gold operating margin(2) expanded to 61%(<span class="xn-money">$744</span> per ounce) from 58% (<span class="xn-money">$560</span> per ounce).</p>
<pre>
Third Quarter 2010 Highlights:
-- Equity gold and copper production of 1.4 million ounces and 83 million
pounds, respectively;
-- Average realized gold and copper price of $1,221 per ounce and $3.67
per pound, respectively;
-- Costs applicable to sales for gold and copper of $477 per ounce on a
co-product basis and $0.73 per pound, respectively;
-- Adjusted net income of $534 million ($1.08 per share) and reported net
income of $537 million ($1.09 per share);
-- Operating cash flow of $854 million; and
-- Cash and cash equivalents on September 30, 2010 of approximately $4
billion.
</pre>
<p>"With the substantial free cash flow that we continue to generate in the current metal price environment, we remain focused on progressing the development of our next generation of mining projects," stated Richard O'Brien, President and Chief Executive Officer. "This includes Conga in <span class="xn-location">Peru</span>, Akyem in <span class="xn-location">Ghana</span>, and <span class="xn-person">Hope Bay</span> in <span class="xn-location">Canada</span>, as well as a series of satellite deposits in Nevada. Of the <span class="xn-money">$1.3-$1.5 billion</span> in capital we expect to spend this year, approximately 40% will be invested in our development pipeline, with increasing reinvestment expected over the next several years."</p>
<p/>
<p>With three quarters of production completed, the Company is narrowing its previously announced 2010 outlook for equity gold production from 5.3 to 5.5 million ounces to 5.3 to 5.4 million ounces. In addition, Newmont is updating its 2010 outlook for costs applicable to sales from between <span class="xn-money">$460</span> and <span class="xn-money">$480</span> per ounce to between <span class="xn-money">$485</span> and <span class="xn-money">$500</span> per ounce, based on the higher gold price and weaker US dollar.</p>
<pre>
Regional Operations
</pre>
<p>In the third quarter of 2010, the Company reported equity gold production of 1.4 million ounces at costs applicable to sales of <span class="xn-money">$477</span> per ounce on a co-product basis. Costs applicable to sales increased 18% from the prior year quarter due to higher waste mining and royalty costs, a stronger Australian dollar, the addition of higher cost production at Boddington and lower production in <span class="xn-location">South America</span>, partially offset by higher production in <span class="xn-location">Africa</span>.</p>
<pre>
North America
</pre>
<p>Nevada - Nevada produced 453,000 equity ounces of gold at costs applicable to sales of <span class="xn-money">$575</span> per ounce during the third quarter. Gold production decreased 7% from the prior year quarter due to lower leach tons placed at Twin Creeks and Carlin, lower Gold Quarry ore feed to Mill 5 due to the slope failure which occurred in late 2009 and the completion of underground mining at Deep Post in 2009. Costs applicable to sales increased 6% from the prior year quarter due to lower production, partially offset by higher by-product credits.</p>
<p/>
<p>The Company now expects 2010 equity gold production from Nevada of between 1.71 to 1.75 million ounces at costs applicable to sales of between <span class="xn-money">$590</span> and <span class="xn-money">$610</span> per ounce.</p>
<p/>
<p>La Herradura - Equity gold production at La Herradura in <span class="xn-location">Mexico</span> during the third quarter was 42,000 ounces at costs applicable to sales of <span class="xn-money">$464</span> per ounce. Gold production increased 75% from the prior year quarter due to the commencement of production from the Soledad and Dipolos pits in <span class="xn-chron">January 2010</span>. Costs applicable to sales per ounce increased 32% from the prior year quarter due to higher mining costs associated with waste removal from the two new pits.</p>
<p/>
<p>The Company now expects La Herradura equity gold production of between 155,000 to 165,000 ounces in 2010 at costs applicable to sales of between <span class="xn-money">$405</span> and <span class="xn-money">$420</span> per ounce.</p>
<pre>
South America
</pre>
<p>Yanacocha - Equity gold production during the third quarter at Yanacocha in <span class="xn-location">Peru</span> was 182,000 ounces at costs applicable to sales of <span class="xn-money">$420</span> per ounce. Gold production decreased 35% from the prior year quarter due to mine sequencing resulting in lower leach tons placed, transitional ore stockpiling at La Quinua and lower mill grade and recovery. Costs applicable to sales increased 43% from the prior year quarter due to lower production, higher waste mining and higher diesel and royalty costs, partially offset by higher silver by-product credits.</p>
<p/>
<p>The Company now expects 2010 equity gold production at Yanacocha of between 760,000 and 770,000 ounces at costs applicable to sales of between <span class="xn-money">$400</span> and <span class="xn-money">$420</span> per ounce.</p>
<p/>
<p>Other <span class="xn-location">South America</span> - Approximately 15,000 equity ounces of production is expected in 2010 at La Zanja, which began commercial production in the third quarter.</p>
<pre>
Asia Pacific
</pre>
<p>Boddington - Boddington produced 180,000 ounces of gold and 14 million pounds of copper during the third quarter at costs applicable to sales of <span class="xn-money">$617</span> per ounce (<span class="xn-money">$487</span> per ounce on a by-product(3) basis) and <span class="xn-money">$1.81</span> per pound, respectively. Unplanned mill maintenance resulted in lower throughput and production for July and August, while higher mill grades resulted in higher gold and copper production in September. Compared to the second quarter of 2010, gold and copper production decreased by 2% and 12%, respectively. Commercial production was declared at Boddington during the fourth quarter 2009, thus it is compared on a quarter over quarter, rather than year over year basis.</p>
<p/>
<p>Gold production for 2010 is now expected to be between 700,000 and 750,000 ounces at costs applicable to sales of between <span class="xn-money">$575 to $595</span> per ounce. Copper production for 2010 is now expected to be between 50 to 60 million pounds, at costs applicable to sales of between <span class="xn-money">$1.75</span> and <span class="xn-money">$1.95</span> per pound.</p>
<p/>
<p>Batu Hijau - Equity gold and copper production during the third quarter at Batu Hijau in <span class="xn-location">Indonesia</span> was 106,000 ounces and 69 million pounds, respectively, at costs applicable to sales of <span class="xn-money">$211</span> per ounce and <span class="xn-money">$0.65</span> per pound, respectively. Equity gold and copper production increased 14% and 9%, respectively, from the prior year quarter due to higher mill throughput, partially offset by lower recovery. Costs applicable to sales for gold and copper increased 19% and 30%, respectively, from the prior year quarter due to higher waste mining costs. Phase 5 mining and Phase 6 waste removal were delayed during the quarter due to abnormally high "dry season" rainfall, which restricted access to the bottom of the pit and resulted in processing a higher proportion of stockpiled ore.</p>
<p/>
<p>The Company now expects 2010 equity gold and copper production at Batu Hijau of between 310,000 and 340,000 ounces, and between 250 and 265 million pounds, respectively. The Company expects 2010 gold and copper costs applicable to sales of between <span class="xn-money">$250</span> and <span class="xn-money">$270</span> per ounce and <span class="xn-money">$0.65</span> and <span class="xn-money">$0.75</span> per pound, respectively.</p>
<p/>
<p>In the fourth quarter 2010, the company plans to suspend mining at the bottom of Phase 5 and begin processing ore from stockpiles as mining will be primarily for Phase 6 waste removal. The Company expects Phase 6 ore to become the primary ore feed commencing in 2014.</p>
<p/>
<p>Other Australia/New Zealand - Equity gold production at our other Australia/New Zealand operations during the third quarter was 284,000 ounces at costs applicable to sales of <span class="xn-money">$552</span> per ounce. Gold production decreased slightly from the prior year quarter due to lower mill grade at Jundee and Waihi, partially offset by higher mill grade and recovery at Kalgoorlie and Tanami. Costs applicable to sales increased 5% from the prior year quarter due to lower production and a stronger Australian dollar.</p>
<p/>
<p>The Company now expects 2010 equity gold production at the Company's other Australia/New Zealand operations of between 1.09 and 1.11 million ounces at costs applicable to sales of between <span class="xn-money">$550 to $570</span> per ounce.</p>
<pre>
Africa
</pre>
<p>Ahafo - Gold production during the third quarter at Ahafo in <span class="xn-location">Ghana</span> was 156,000 ounces at costs applicable to sales of <span class="xn-money">$422</span> per ounce. Gold production increased 8% from the prior year quarter due to higher grade ore, partially offset by lower throughput. Costs applicable to sales per ounce decreased 5% from the prior year quarter due to higher production and increases in ore stockpiles, partially offset by higher diesel and royalty costs.</p>
<p/>
<p>Third quarter 2010 production included 16,000 incremental start-up ounces from the Amoma pit, resulting in net sales of <span class="xn-money">$13 million</span> included in Other income, net. Commercial production for the Amoma pit occurred on <span class="xn-chron">October 1</span>.</p>
<p/>
<p>The Company expects 2010 gold production at Ahafo of between 520,000 and 540,000 ounces at costs applicable to sales of between <span class="xn-money">$430</span> and <span class="xn-money">$470</span> per ounce.</p>
<pre>
Capital Update
</pre>
<p>Consolidated capital expenditures were <span class="xn-money">$344 million</span> during the third quarter, down from <span class="xn-money">$404 million</span> in the third quarter of 2009 as the Boddington capital spend was substantially completed at the end of 2009. The Company is lowering its 2010 consolidated capital expenditure outlook to <span class="xn-money">$1.3 billion to $1.5 billion</span>, with approximately 30% to be invested in each of the <span class="xn-location">North America</span> and Asia Pacific regions, and the remaining 40% at other locations. Approximately 40% of 2010 consolidated capital expenditures are expected to be related to major project initiatives, including further development of the Akyem project in <span class="xn-location">Ghana</span>, the Conga project in <span class="xn-location">Peru</span>, <span class="xn-person">Hope Bay</span> in <span class="xn-location">Canada</span>, and the Nevada project portfolio, while the remaining 60% is expected to be for maintenance and sustaining expenditures.</p>
<pre>
2010 Outlook - Q3 Update(4)
</pre>
<p>Our current outlook for 2010 equity production, CAS and consolidated capital expenditures is as follows:</p>
<pre>
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
2010 Outlook -Q3 2010 Outlook -Q3 2010 Outlook -Q3
Update Update Update
Region Equity Production CAS Consolidated Capital
(Kozs, Mlbs) ($/oz, $/lb) Expenditures ($M)
------------ ------------ -----------------
Nevada 1,710 - 1,750 $590 - $610 $355 - $375
La Herradura 155 - 165 $405 - $420 $55 - $65
Hope Bay $65 - $75
North America 1,865 - 1,915 $575 - $595 $475 - $515
------------- ------------- ----------- -----------
Yanacocha 760 - 770 $400 - $420 $135 - $155
La Zanja 10 - 20 - -
Conga - - $155 - $165
South America 770 - 790 $400 - $420 $290 - $320
------------- --------- ----------- -----------
Boddington -
Gold (a) 700 - 750 $575 - $595 $140 - $155
Other
Australia/
NZ 1,090 - 1,110 $550 - $570 $200 - $215
Batu Hijau -
Gold(b) 310 - 340 $250 - $270 $100 - $120
Asia Pacific 2,100 - 2,200 $475 - $500 $440 - $490
------------ ------------- ----------- -----------
Ahafo 520 - 540 $430 - $470 $110 - $120
Akyem - - $95 - $105
Africa 520 - 540 $430 - $470 $205 - $235
------ --------- ----------- -----------
Corporate/
Other $48 - $52
---------- ---------
Total Gold 5,300 - 5,400 $485 - $500 $1,300 - $1,500
---------- ------------- ----------- ---------------
Boddington -
Copper (a) 50 - 60 $1.75 - $1.95
Batu Hijau -
Copper (b) 250 - 265 $0.65 - $0.75
---------------- --------- -------------
Total Copper 300 - 325 $0.85 - $0.95
------------ --------- -------------
</pre>
<p> </p>
<p> </p>
<pre>
(a) Boddington shown on a co-product basis.
(b) Assumes Batu Hijau economic interest of 48.5% for the remainder of
2010
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
2010 Outlook -Q3
Description Update
($M)
----
General &
Administrative $180 - $190
Interest Expense $270 - $290
DD&A $925 - $950
Exploration Expense $220 - $245
Advanced Projects &
R&D $230 - $250
Tax Rate 26% - 28%
Assumptions
-----------
Gold Price ($/ounce) $1,100
Copper Price ($/pound) $3.00
Oil Price ($/barrel) $80
Australian Dollar
Exchange Rate 0.90
(1) See reconciliation to GAAP net income on page 11.
</pre>
<p>(2) Gold operating margin calculated as average realized gold price per ounce, less gold cost applicable to sales per ounce, divided by average realized gold price per ounce.</p>
<p/>
<p>(3) See reconciliation from by-product costs applicable to sales to GAAP costs applicable to sales on page 12.</p>
<p/>
<p>(4) Outlook referenced in the table above and elsewhere in this release is based upon management's good faith estimates as of <span class="xn-chron">November 2, 2010</span> and are considered "forward-looking statements." References to outlook guidance are based on current mine plans, assumptions noted above and current geotechnical, metallurgical, hydrological and other physical conditions, which are subject to risk and uncertainty as discussed in the "Cautionary Statement" on page 13.</p>
<pre>
Condensed Statements of Consolidated Income (unaudited, in millions)
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2010 2009 2010 2009
---- ---- ---- ----
</pre>
<p> </p>
<p>Sales <span class="xn-money">$2,597</span> <span class="xn-money">$2,049</span> <span class="xn-money">$6,992</span> <span class="xn-money">$5,187</span></p>
<p> </p>
<pre>
Costs and expenses
Costs applicable to
sales 903 765 2,636 2,200
Amortization 242 199 697 566
Reclamation and
remediation 18 10 44 34
Exploration 67 55 163 147
Advanced projects,
research and
development 46 27 149 100
General and
administrative 45 39 133 118
Other expense, net 50 65 200 250
--- --- --- ---
1,371 1,160 4,022 3,415
----- ----- ----- -----
Other income
(expense)
Other income, net 5 25 97 43
</pre>
<p> </p>
<pre>
Interest expense, net (66) (10) (210) (65)
--- --- ---- ---
(61) 15 (113) (22)
--- --- ---- ---
Income from
continuing
operations before
income tax
And other items 1,165 904 2,857 1,750
Income tax expense (348) (253) (756) (494)
Equity income (loss)
of affiliates (3) (6) (7) (14)
--- --- --- ---
Income from
continuing
operations 814 645 2,094 1,242
Income (loss) from
discontinued
operations - - - (14)
--- --- --- ---
Net income 814 645 2,094 1,228
Net income
attributable to
noncontrolling
interests (277) (257) (629) (489)
---- ---- ---- ----
</pre>
<p> </p>
<pre>
Net income
attributable to
Newmont stockholders $537 $388 $1,465 $739
==== ==== ====== ====
</pre>
<p> </p>
<pre>
Net income
attributable to
Newmont
stockholders:
</pre>
<p> </p>
<pre>
Continuing operations $537 $388 $1,465 $748
Discontinued
operations - - - (9)
--- --- --- ---
$537 $388 $1,465 $739
==== ==== ====== ====
Income per common
share
Basic:
</pre>
<p> </p>
<pre>
Continuing operations $1.09 $0.79 $2.98 $1.54
Discontinued
operations - - - (0.02)
--- --- --- -----
$1.09 $0.79 $2.98 $1.52
===== ===== ===== =====
Diluted:
</pre>
<p> </p>
<pre>
Continuing operations $1.07 $0.79 $2.94 $1.54
Discontinued
operations - - - (0.02)
--- --- --- -----
$1.07 $0.79 $2.94 $1.52
===== ===== ===== =====
</pre>
<p> </p>
<pre>
Cash dividends
declared per common
share $0.15 $0.10 $0.35 $0.30
Condensed Statements of Consolidated Cash Flow (unaudited, in millions)
</pre>
<p> </p>
<p> </p>
<pre>
Three Months Ended
September 30,
------------------
2010 2009
---- ----
</pre>
<p> </p>
<pre>
Operating activities:
Net income $814 $645
Adjustments:
Amortization 242 199
Loss from discontinued operations - -
Reclamation and remediation 18 10
Deferred income taxes 34 20
Stock based compensation and other
benefits 15 14
Other operating adjustments and write-
downs 66 21
Net change in operating assets and
liabilities (335) 151
---- ---
Net cash provided from continuing
operations 854 1,060
Net cash provided from (used in)
discontinued operations - (5)
--- ---
Net cash provided from operations 854 1,055
--- -----
Investing activities:
Additions to property, plant and mine
development (344) (404)
Investments in marketable debt and
equity securities (2) -
Acquisitions, net (2) (6)
Proceeds from sale of other assets 1 1
Other (50) (7)
--- ---
Net cash used in investing activities (397) (416)
---- ----
Financing activities:
Proceeds from debt, net - 2,808
Repayment of debt (11) (936)
Sale of subsidiary shares to
noncontrolling interests - -
Acquisition of subsidiary shares from
noncontrolling interests - -
Dividends paid to common stockholders (74) (49)
Dividends paid to noncontrolling
interests (53) (3)
Proceeds from stock issuance, net 26 1
Change in restricted cash and other (2) -
--- ---
Net cash provided from (used in)
financing activities of continuing
operations (114) 1,821
Net cash used in financing activities of
discontinued operations - -
--- ---
Net cash provided from (used in)
financing activities (114) 1,821
Effect of exchange rate changes on cash 6 18
--- ---
Net change in cash and cash equivalents 349 2,478
Cash and cash equivalents at beginning
of period 3,602 544
----- ---
Cash and cash equivalents at end of
period $3,951 $3,022
====== ======
</pre>
<p> </p>
<p> </p>
<pre>
Nine Months Ended
September 30,
-----------------
2010 2009
---- ----
</pre>
<p> </p>
<pre>
Operating activities:
Net income $2,094 $1,228
Adjustments:
Amortization 697 566
Loss from discontinued operations - 14
Reclamation and remediation 44 34
Deferred income taxes (52) 7
Stock based compensation and other
benefits 54 44
Other operating adjustments and write-
downs 84 80
Net change in operating assets and
liabilities (586) (27)
---- ---
Net cash provided from continuing
operations 2,335 1,946
Net cash provided from (used in)
discontinued operations (13) 3
--- ---
Net cash provided from operations 2,322 1,949
----- -----
Investing activities:
Additions to property, plant and mine
development (972) (1,314)
Investments in marketable debt and
equity securities (9) -
Acquisitions, net (2) (766)
Proceeds from sale of other assets 53 3
Other (72) (11)
--- ---
Net cash used in investing activities (1,002) (2,088)
------ ------
Financing activities:
Proceeds from debt, net - 4,302
Repayment of debt (274) (2,604)
Sale of subsidiary shares to
noncontrolling interests 229 -
Acquisition of subsidiary shares from
noncontrolling interests (109) -
Dividends paid to common stockholders (172) (147)
Dividends paid to noncontrolling
interests (360) (115)
Proceeds from stock issuance, net 56 1,248
Change in restricted cash and other 46 5
--- ---
Net cash provided from (used in)
financing activities of continuing
operations (584) 2,689
Net cash used in financing activities of
discontinued operations - (2)
--- ---
Net cash provided from (used in)
financing activities (584) 2,687
Effect of exchange rate changes on cash - 39
--- ---
Net change in cash and cash equivalents 736 2,587
Cash and cash equivalents at beginning
of period 3,215 435
----- ---
Cash and cash equivalents at end of
period $3,951 $3,022
====== ======
Condensed Consolidated Balance Sheets (unaudited, in millions)
</pre>
<p> </p>
<p> </p>
<p> </p>
<pre>
At September At December
30, 31,
2010 2009
---- ----
ASSETS
Cash and cash equivalents $3,951 $3,215
Trade receivables 489 438
Accounts receivable 93 102
Investments 46 56
Inventories 526 493
Stockpiles and ore on leach pads 538 403
Deferred income tax assets 195 215
Other current assets 1,218 900
----- ---
Current assets 7,056 5,822
Property, plant and mine development, net 12,532 12,370
Investments 1,278 1,186
Stockpiles and ore on leach pads 1,722 1,502
Deferred income tax assets 1,086 937
Other long-term assets 702 482
Total assets $24,376 $22,299
======= =======
LIABILITIES
Debt $289 $157
Accounts payable 396 396
Employee-related benefits 227 250
Income and mining taxes 265 200
Other current liabilities 1,621 1,317
----- -----
Current liabilities 2,798 2,320
Debt 4,289 4,652
Reclamation and remediation liabilities 820 805
Deferred income tax liabilities 1,432 1,341
Employee-related benefits 349 381
Other long-term liabilities 169 174
Liabilities of operations held for sale - 13
--- ---
Total liabilities 9,857 9,686
----- -----
</pre>
<p> </p>
<pre>
EQUITY
Common stock 778 770
Additional paid-in capital 8,260 8,158
Accumulated other comprehensive income 768 626
Retained earnings 2,442 1,149
----- -----
Newmont stockholders' equity 12,248 10,703
Noncontrolling interests 2,271 1,910
----- -----
Total equity 14,519 12,613
------ ------
Total liabilities and equity $24,376 $22,299
======= =======
Production Statistics
</pre>
<p> </p>
<p> </p>
<pre>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2010 2009 2010 2009
---- ---- ---- ----
Gold
----
Consolidated ounces
produced
(thousands):
North America
Nevada 453 486 1,306 1,421
La Herradura 42 24 125 79
495 510 1,431 1,500
--- --- ----- -----
South America
Yanacocha 355 543 1,131 1,559
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 180 4 522 4
Jundee 87 103 267 304
Tanami 69 64 183 235
Kalgoorlie 102 95 288 241
Waihi 26 30 78 81
Batu Hijau 219 208 554 387
683 504 1,892 1,252
--- --- ----- -----
Africa
Ahafo 156 145 408 409
1,689 1,702 4,862 4,720
===== ===== ===== =====
</pre>
<p> </p>
<pre>
Copper
------
Consolidated pounds
produced (millions):
Asia Pacific
Boddington 14 1 43 1
Batu Hijau 142 141 420 336
156 142 463 337
=== === === ===
</pre>
<p> </p>
<pre>
Gold
----
Equity ounces
produced
(thousands):
North America
Nevada 453 486 1,306 1,421
La Herradura 42 24 125 79
495 510 1,431 1,500
--- --- ----- -----
South America
Yanacocha 182 280 580 801
Other South America
Non-consolidated
Equity Interests 5 - 5 -
187 280 585 801
--- --- --- ---
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 180 4 522 4
Jundee 87 103 267 304
Tanami 69 64 183 235
Kalgoorlie 102 95 288 241
Waihi 26 30 78 81
Batu Hijau 106 93 276 174
570 389 1,614 1,039
--- --- ----- -----
Africa
Ahafo 156 145 408 409
</pre>
<p> </p>
<pre>
Discontinued
Operations
Kori Kollo - 2 - 32
1,408 1,326 4,038 3,781
===== ===== ===== =====
</pre>
<p> </p>
<pre>
Copper
------
Equity pounds
produced (millions):
Asia Pacific
Boddington 14 1 43 1
Batu Hijau 69 63 210 151
--- --- --- ---
83 64 253 152
=== === === ===
CAS and Capital Expenditures
</pre>
<p> </p>
<p> </p>
<pre>
Three Months Ended
September 30,
------------------
2010 2009
---- ----
Gold
----
Costs Applicable to Sales
($/ounce) (1)
North America
Nevada $575 $541
La Herradura 464 352
--- ---
565 532
--- ---
South America
Yanacocha 420 294
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 617 -
Jundee 381 329
Tanami 707 684
Kalgoorlie 550 638
Waihi 726 518
Batu Hijau 211 178
---
451 380
--- ---
Africa
Ahafo 422 446
--- ---
Average $477 $404
==== ====
</pre>
<p> </p>
<pre>
Copper
------
Costs Applicable to Sales
($/pound) (1)
Asia Pacific
Boddington $1.81 $-
Batu Hijau 0.65 0.50
Average $0.73 $0.50
===== =====
</pre>
<p> </p>
<p> </p>
<pre>
Three Months Ended
September 30,
-------------------
2010 2009
---- ----
Consolidated Capital
Expenditures ($ million)
North America
Nevada $83 $43
Hope Bay 40 1
La Herradura 11 15
134 59
--- ---
South America
Yanacocha 41 27
Conga 43 5
84 32
--- ---
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 25 277
Jundee 9 7
Tanami 21 14
Kalgoorlie 7 4
Waihi 3 3
Batu Hijau 15 7
Other Asia Pacific 8 1
88 313
--- ---
Africa
Ahafo 29 19
Akyem 27 3
--- ---
56 22
--- ---
Corporate and Other 12 4
--- ---
Total - Accrual Basis 374 430
--- ---
</pre>
<p> </p>
<p> Change in Capital Accrual (30) (26)</p>
<p> </p>
<pre>
Total - Cash Basis $344 $404
==== ====
</pre>
<p> </p>
<p> </p>
<pre>
Nine Months Ended
September 30,
-----------------
2010 2009
---- ----
Gold
----
Costs Applicable to Sales
($/ounce) (1)
North America
Nevada $595 $532
La Herradura 415 381
--- ---
579 524
--- ---
South America
Yanacocha 392 313
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 577 -
Jundee 388 339
Tanami 756 613
Kalgoorlie 543 630
Waihi 681 457
Batu Hijau 235 232
---
469 422
--- ---
Africa
Ahafo 456 424
--- ---
Average $483 $419
==== ====
</pre>
<p> </p>
<pre>
Copper
------
Costs Applicable to Sales
($/pound) (1)
Asia Pacific
Boddington $1.80 $-
Batu Hijau 0.66 0.63
Average $0.76 $0.63
===== =====
</pre>
<p> </p>
<p> </p>
<pre>
Nine Months Ended
September 30,
------------------
2010 2009
---- ----
Consolidated Capital
Expenditures ($ million)
North America
Nevada $200 $154
Hope Bay 88 4
La Herradura 33 34
321 192
--- ---
South America
Yanacocha 109 78
Conga 86 16
195 94
--- ---
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 106 961
Jundee 30 21
Tanami 59 42
Kalgoorlie 14 6
Waihi 8 6
Batu Hijau 48 30
Other Asia Pacific 11 2
276 1,068
--- -----
Africa
Ahafo 80 42
Akyem 49 4
129 46
--- ---
Corporate and Other 23 12
Total - Accrual Basis 944 1,412
--- -----
</pre>
<p> </p>
<p> Change in Capital Accrual 28 (98)</p>
<p> </p>
<pre>
Total - Cash Basis $972 $1,314
==== ======
</pre>
<p> </p>
<pre>
(1) Excludes Amortization and Reclamation and remediation.
Supplemental Information
Non-GAAP Financial Measures
</pre>
<p>Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles ("GAAP"). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.</p>
<pre>
Reconciliation of Adjusted Net Income to GAAP Net Income
</pre>
<p>Management of the Company uses the non-GAAP financial measure Adjusted net income to evaluate the Company's operating performance, and for planning and forecasting future business operations. The Company believes the use of Adjusted net income allows investors and analysts to compare the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the production and sale of minerals to similar operating results of other mining companies, by excluding exceptional or unusual items, income or loss from discontinued operations and the permanent impairment of assets, including marketable securities and goodwill. Management's determination of the components of Adjusted net income are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.</p>
<p/>
<p>Net income attributable to Newmont stockholders is reconciled to Adjusted net income as follows:</p>
<p/>
<p> </p>
<p> </p>
<p> </p>
<pre>
Three months ended Nine months ended
September 30, September 30,
($million except per share,
after-tax) 2010 2009 2010 2009
</pre>
<p> </p>
<pre>
GAAP Net income (1) $537 $388 $1,465 $739
Income tax benefit from
internal restructuring - - (127) -
Net gain on asset sales (3) (2) (35) (2)
PTNNT community contribution - - 13 -
Impairment of assets - 1 3 6
Boddington acquisition costs - - - 44
Loss from discontinued
operations (1) - - - 9
Adjusted net income $534 $387 $1,319 $796
Adjusted net income per share $ 1.08 $ 0.79 $ 2.68 $ 1.64
</pre>
<p> </p>
<pre>
(1) Attributable to Newmont stockholders.
</pre>
<p>Reconciliation of Co-Product Costs Applicable to Sales to By-Product Costs Applicable to Sales</p>
<p/>
<p>Sales and Costs applicable to sales for Boddington are presented in the Condensed Consolidated Financial Statements for both gold and copper due to the significant portion of copper production (approximately 15-20% of total revenue based on the latest life-of-mine plan and metal price assumptions). The co-product method allocates costs applicable to sales to each metal based on specifically identifiable costs where applicable and on a relative proportion of sales values for other costs. Management also assesses the performance of the Boddington mine on a by-product basis due to the majority of sales being derived from gold and to determine contingent consideration payments to AngloGold. The by-product method deducts copper sales from costs applicable to sales as shown in the following table:</p>
<p/>
<p> </p>
<p> </p>
<pre>
Three months ended
September 30, 2010
------------------
Boddington Consolidated
---------- ------------
($ millions)
Co-product costs applicable to sales
- gold $91 $788
</pre>
<p> </p>
<pre>
Less copper margin:
Sales - copper 38 581
Costs applicable to sales - copper (19) (115)
Copper margin 19 466
------------- - ---
</pre>
<p> </p>
<pre>
By-product costs applicable to sales
- gold $72 $322
==================================== === ====
</pre>
<p> </p>
<pre>
Costs applicable to sales -gold (per
ounce)
Co-product $617 $477
By-product $487 $195
</pre>
<p> </p>
<pre>
Gold ounces sold (thousands) 148 1,651
---------------------------- --- -----
</pre>
<p> </p>
<p> </p>
<pre>
Nine months ended
September 30, 2010
------------------
Boddington Consolidated
---------- ------------
($ millions)
Co-product costs applicable to sales
- gold $284 $2,307
</pre>
<p> </p>
<pre>
Less copper margin:
Sales - copper 117 1,373
Costs applicable to sales - copper (68) (329)
Copper margin 49 1,044
------------- --- -----
</pre>
<p> </p>
<pre>
By-product costs applicable to sales
- gold $235 $1,263
==================================== ==== ======
</pre>
<p> </p>
<pre>
Costs applicable to sales -gold (per
ounce)
Co-product $577 $483
By-product $478 $264
</pre>
<p> </p>
<pre>
Gold ounces sold (thousands) 492 4,778
---------------------------- --- -----
</pre>
<p>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 2010 Operating and Financial guidance by region, please see <a href="http://www.newmont.com">www.newmont.com</a>.</p>
<p/>
<p>The Company's third quarter and earnings conference call and web cast presentation will be held on <span class="xn-chron">Tuesday, November 2, 2010</span> beginning at <span class="xn-chron">11:30 a.m. Eastern Time</span> (<span class="xn-chron">9:30 a.m. Mountain Time</span>). To participate:</p>
<p/>
<p> </p>
<p> </p>
<pre>
Dial-In Number 888.566.1822
Intl Dial-In Number 312.470.7119
Leader John Seaberg
Passcode Newmont
Replay Number 888.293.8913
Intl Replay Number 203.369.3024
Replay Passcode 2010
</pre>
<p>The conference call also will be simultaneously carried on our web site at <a href="http://www.newmont.com">www.newmont.com</a> under Investor Relations/Presentations and will be archived there for a limited time.</p>
<pre>
Cautionary Statement
</pre>
<p>This 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 which are intended to be covered by the safe harbor created by such sections and other applicable laws. Such forward-looking statements may include, without limitation: (i) estimates of future mineral production and sales; (ii) estimates of future costs applicable to sales; (iii) estimates of future capital expenditures; and (iv) expectations regarding the development, growth and exploration potential of the Company's projects. Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect. Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company's projects being consistent with current expectations and mine plans; (iii) political developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) certain exchange rate assumptions for the Australian dollar to the U.S. dollar, as well as other the exchange rates being approximately consistent with current levels; (v) certain price assumptions for gold, copper and oil; (vi) prices for key supplies being approximately consistent with current levels; and (vii) the accuracy of our current mineral reserve and mineral resource estimates. 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, such 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 the "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 2009 Annual Report on Form 10-K, filed on <span class="xn-chron">February 25, 2010</span>, 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," including, without limitation, outlook, 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. Investors should not assume that any lack of update to a previously issued "forward-looking statement" constitutes a reaffirmation of that statement. Continued reliance on "forward-looking statements" is at investors' own risk.</p>
<pre>
For further information: Investors, John Seaberg, +1-303-837-5743, [email protected], or Karli Anderson, +1-303-837-6049, [email protected], or Monica Brisnehan, +1-303-837-5836, [email protected], or Media, Omar Jabara, +1-303-837-5114, [email protected], all of Newmont Mining Corporation Web Site: http://www.newmont.com
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