Newmont Second Quarter 2010 Adjusted Net Income(1) Increases 79% to $377
million ($0.77 per share); Increases Quarterly Dividend by 50%
This release should be read in conjunction with Newmont's Second Quarter
2010 Form 10-Q filed with the Securities and Exchange Commission on July
28, 2010 (available at www.newmont.com).
</pre>
<p><span class="xn-location">DENVER</span>, <span class="xn-chron">July 28</span> /CNW/ -- Newmont Mining Corporation (NYSE: NEM) ("Newmont" or the "Company") today announced second quarter adjusted net income(1) of <span class="xn-money">$377 million</span> (<span class="xn-money">$0.77</span> per share) compared to <span class="xn-money">$211 million</span> (<span class="xn-money">$0.43</span> per share) in the prior year quarter. Net income attributable to Newmont stockholders was <span class="xn-money">$382 million</span> (<span class="xn-money">$0.78</span> per share) compared to <span class="xn-money">$162 million</span> (<span class="xn-money">$0.33</span> per share) in the second quarter of 2009.</p>
<p/>
<p>In addition, Newmont announced that its Board of Directors approved an increase in the Company's regular quarterly dividend from <span class="xn-money">$0.10</span> per share of common stock to <span class="xn-money">$0.15</span> per share of common stock, payable on <span class="xn-chron">September 29, 2010</span> to holders of record at the close of business on <span class="xn-chron">September 8, 2010</span>.</p>
<pre>
Second Quarter 2010 Highlights:
-- Equity gold and copper production of 1.3 million ounces and 80 million
pounds, respectively;
-- Average realized gold and copper price of $1,200 per ounce and $2.33
per pound, respectively;
-- Costs applicable to sales for gold and copper of $492 per ounce on a
co-product basis ($362 on a by-product basis(2)) and $0.77 per pound,
respectively;
-- Net cash provided from continuing operations of $753 million, up 49%
from the second quarter of 2009;
-- Adjusted net income(1) of $377 million ($0.77 per share), up 79% from
the second quarter of 2009; and
-- Essentially maintaining 2010 outlook for production, operating costs
and capital expenditures.
</pre>
<p>"Today's announcement of a 50% increase of our regular quarterly dividend reflects the confidence we have in our ability to fully fund our project pipeline and exploration programs, keep the door open to value-creating acquisition opportunities and return capital to shareholders, which we feel positions us uniquely in the gold equity market and versus the ETF," said Richard O'Brien, President and Chief Executive Officer. "Our portfolio continues to deliver despite operating costs being higher than expected during our ramp-up at Boddington, where we are experiencing lower gold grades than modeled. As a result, we are maintaining our previously announced 2010 outlook for equity gold production of 5.3 to 5.5 million ounces at a slightly narrower range of costs applicable to sales of between <span class="xn-money">$460</span> and <span class="xn-money">$480</span> per ounce on a co-product basis."</p>
<p/>
<p>The Company anticipates improving operating costs during the remainder of the year, with higher ore grades and lower stripping at Batu Hijau, as well as higher processing plant availability now that regularly scheduled second quarter mill maintenance at a key processing facility in Nevada is complete.</p>
<p/>
<p>Our costs applicable to sales per ounce for the remainder of the year are expected to change by approximately <span class="xn-money">$3</span> for every <span class="xn-money">$10</span> change in the oil price and by approximately <span class="xn-money">$3</span> for every <span class="xn-money">$0.10</span> change in the A$ exchange rate, net of existing hedges. In the event that adverse foreign exchange movements, higher gold royalties and increasing energy prices continue throughout the remainder of the year, the Company's costs applicable to sales could be near or exceed the top end of our current outlook range.</p>
<pre>
Regional Operations
</pre>
<p>In the second quarter of 2010, the Company reported equity gold production of 1.3 million ounces at costs applicable to sales of <span class="xn-money">$492</span> per ounce on a co-product basis. Costs applicable to sales per gold ounce increased 16% in the second quarter of 2010 from 2009 due to higher costs in Nevada, at Yanacocha in <span class="xn-location">Peru</span> and at Batu Hijau in <span class="xn-location">Indonesia</span>, as well as higher-cost production from Boddington, as further described below.</p>
<pre>
North America
</pre>
<p>Nevada - Nevada produced 420,000 equity ounces of gold at costs applicable to sales of <span class="xn-money">$601</span> per ounce during the second quarter. Second quarter 2010 production was slightly higher than the year ago quarter due to higher underground production at Midas and Leeville, partially offset by lower mill throughput at Carlin and Twin Creeks and lower leach tons placed. Costs applicable to sales per ounce increased 9% in the second quarter of 2010 from 2009 due to additional surface mining costs related to the 2009 geotechnical event at Gold Quarry.</p>
<p/>
<p>The Company continues to expect 2010 equity gold production from Nevada of approximately 1.6 to 1.725 million ounces at costs applicable to sales of between <span class="xn-money">$590</span> and <span class="xn-money">$630</span> per ounce.</p>
<p/>
<p>La Herradura - Equity gold production at La Herradura in <span class="xn-location">Mexico</span> during the second quarter was 43,000 ounces at costs applicable to sales of <span class="xn-money">$431</span> per ounce. Production increased 43% in the second quarter of 2010 from 2009 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 8% in the second quarter of 2010 from 2009 due to higher mining costs associated with two new pits.</p>
<p/>
<p>The Company continues to expect La Herradura equity gold production of 140,000 to 150,000 ounces in 2010 with costs applicable to sales of between <span class="xn-money">$400</span> and <span class="xn-money">$430</span> per ounce.</p>
<pre>
South America
</pre>
<p>Yanacocha - Equity gold production during the second quarter at Yanacocha in <span class="xn-location">Peru</span> was 181,000 ounces at costs applicable to sales of <span class="xn-money">$389</span> per ounce. Production decreased 32% in the second quarter of 2010 from 2009 due to lower leach tons placed related to mine sequencing combined with lower mill ore grade. Costs applicable to sales per ounce increased 20% in the second quarter of 2010 from 2009 due to lower production, higher waste mining and maintenance costs, partially offset by higher by-product credits.</p>
<p/>
<p>The Company continues to expect 2010 equity gold production at Yanacocha of between 750,000 and 810,000 ounces at costs applicable to sales near the high end of the outlook range of <span class="xn-money">$360</span> and <span class="xn-money">$400</span> per ounce, due primarily to higher royalties and workers participation costs as a result of higher realized gold prices.</p>
<pre>
Asia Pacific
</pre>
<p>Boddington -Boddington continues to ramp-up to full production and produced 184,000 ounces of gold and 15 million pounds of copper during the second quarter at costs applicable to sales of <span class="xn-money">$582</span> per ounce (<span class="xn-money">$503</span> per ounce on a by-product basis(3)) and <span class="xn-money">$1.55</span> per pound. Compared with the first quarter of 2010, gold and copper production increased by 16% and 13%, respectively.</p>
<p/>
<p>The processing plant continues to perform in line with expectations with recoveries exceeding Feasibility Study expectations, and the high pressure grinding rolls and wet plant performing better than anticipated. However, production has been lower than expected as the Company has mined approximately 12% less contained gold, partially offset by 23% more contained copper, than originally modeled. As a result of lower gold production, higher direct mining costs and a stronger Australian dollar, gold production for 2010 is now expected between 750,000 and 825,000 ounces at costs applicable to sales of <span class="xn-money">$475 to $550</span> per ounce (compared with an original outlook of 800,000 to 875,000 ounces at costs applicable to sales of <span class="xn-money">$375 to $395</span> per ounce). A stronger Australian dollar accounts for approximately 25% of the expected increase in operating costs, with increased mining costs accounting for approximately 50% and lower volume and other factors accounting for the remainder. Copper production outlook for 2010 remains unchanged at between 65 and 75 million pounds, at costs applicable to sales now of between <span class="xn-money">$1.55</span> and <span class="xn-money">$1.75</span> per pound (compared with an original outlook of between <span class="xn-money">$1.30</span> and <span class="xn-money">$1.45</span> per pound).</p>
<p/>
<p>For 2011, the Company expects gold production at Boddington of between 850,000 and 925,000 ounces at costs applicable to sales of between <span class="xn-money">$475</span> and <span class="xn-money">$525</span> per ounce as the operation begins its first year of steady-state production. It is still too early in the ramp-up process to conclusively determine any longer-term impacts of the lower gold ore grades experienced to date (with less than 2% of total reserves mined thus far).</p>
<p/>
<p>Batu Hijau - Equity gold and copper production during the second quarter at Batu Hijau in <span class="xn-location">Indonesia</span> were 82,000 ounces and 65 million pounds, respectively, at costs applicable to sales of <span class="xn-money">$294</span> per ounce and <span class="xn-money">$0.66</span> per pound, respectively. Equity gold and copper production increased 49% and 27% in the second quarter of 2010 from 2009, respectively, due to higher grade ore from Phase 5, partially offset by lower recovery. Costs applicable to sales increased 28% and 14% for gold and copper, respectively, in the second quarter of 2010 from 2009 due to higher waste mining and milling costs. Production during the second quarter was adversely affected by unusually heavy rainfall.</p>
<p/>
<p>The Company continues to expect 2010 equity gold and copper production at Batu Hijau of between 365,000 and 400,000 ounces, and between 265 and 290 million pounds, respectively. The Company continues to expect 2010 costs applicable to sales of between <span class="xn-money">$265</span> and <span class="xn-money">$285</span> per ounce and <span class="xn-money">$0.75</span> and <span class="xn-money">$0.85</span> per pound, respectively.</p>
<p/>
<p>Other Australia/New Zealand - Equity gold production at our other Australia/New Zealand operations during the second quarter was 256,000 ounces at costs applicable to sales of <span class="xn-money">$549</span> per ounce. Equity gold production decreased 3% in the second quarter of 2010 from 2009 due to lower grade as a result of ore dilution and lower mill throughput as a result of maintenance at Tanami and lower ore grade at Jundee, partially offset by higher ore grade at Kalgoorlie and higher mill throughput at Waihi. Costs applicable to sales increased 10% in the second quarter of 2010 from 2009, primarily due to the stronger Australian dollar and lower production.</p>
<p/>
<p>The Company continues to expect 2010 equity gold production at the Company's other Australia/New Zealand operations of between 1.06 and 1.16 million ounces at costs applicable to sales near the high end of our original outlook range of <span class="xn-money">$530 to $570</span> per ounce.</p>
<pre>
Africa
</pre>
<p>Ahafo -Gold production during the second quarter at Ahafo in <span class="xn-location">Ghana</span> was 132,000 ounces at costs applicable to sales of <span class="xn-money">$416</span> per ounce. Gold production was consistent with the prior year quarter with lower ore grade and recovery offset by higher mill throughput. Costs applicable to sales decreased 3% in the second quarter of 2010 from 2009 due to lower milling costs resulting from softer ore processed, partially offset by higher diesel costs.</p>
<p/>
<p>Due to higher than projected production in the first half of 2010, the Company now expects 2010 gold production at Ahafo of between 500,000 and 530,000 ounces (up from between 460,000 and 500,000 ounces) at costs applicable to sales between <span class="xn-money">$475</span> and <span class="xn-money">$515</span> per ounce (lower than our original outlook of between <span class="xn-money">$515 to $555</span> per ounce), based on higher grades than projected.</p>
<pre>
Capital Update
</pre>
<p>Consolidated capital expenditures were <span class="xn-money">$319 million</span> during the second quarter, down from <span class="xn-money">$580 million</span> in the second quarter of 2009 as the Boddington capital spending was substantially completed at the end of 2009. The Company is maintaining its 2010 consolidated capital expenditure outlook of between <span class="xn-money">$1.4</span> and <span class="xn-money">$1.6 billion</span>, with approximately 30% to be invested in each of the <span class="xn-location">North America</span> and Asia Pacific regions, and the remaining 40% at other locations. Approximately 40% of 2010 consolidated capital expenditures are expected to be related to major project initiatives, including further development of the Akyem project in <span class="xn-location">Ghana</span>, the Conga project in <span class="xn-location">Peru</span>, <span class="xn-person">Hope Bay</span> in <span class="xn-location">Canada</span>, and the Nevada project portfolio, while the remaining 60% is expected to be for maintenance and sustaining expenditures.</p>
<pre>
2010 Outlook - Q2 Update(4)
</pre>
<p>Our current outlook for 2010 production, CAS and capital expenditures is as follows:</p>
<pre>
(Changes to previous outlook are shaded in following tables).
</pre>
<p> </p>
<p> </p>
<pre>
2010 Outlook - Q2 Update
Region Equity Production
(Kozs, Mlbs)
------------
Nevada 1,600 - 1,725
La Herradura 140 - 150
Hope Bay
North America 1,740 - 1,875
------------- -------------
Yanacocha 750 - 810
Conga
South America 750 - 810
------------- ---------
Boddington - Gold a 750 - 825
Other Australia/NZ 1,060 - 1,160
Batu Hijau - Gold b 365 - 400
Asia Pacific 2,175 - 2,385
------------ -------------
Ahafo 500 - 530
Akyem
Africa 500 - 530
------ ---------
Corporate/Other
---------------
Total Gold 5,300 - 5,500
---------- -------------
Boddington - Copper a 65 - 75
Batu Hijau - Copper b 265 - 290
--------------------- ---------
Total Copper 330 - 360
------------ ---------
</pre>
<p> </p>
<p> </p>
<pre>
2010 Outlook - Q2 Update
Region CAS
($/oz, $/lb)
------------
Nevada $590 - $630
La Herradura $400 - $430
Hope Bay -
North America $575 - $615
------------- -----------
Yanacocha $360 - $400
Conga -
South America $360 - $400
------------- -----------
Boddington - Gold a $475 - $550
Other Australia/NZ $530 - $570
Batu Hijau - Gold b $265 - $285
Asia Pacific $440 - $480
------------ -----------
Ahafo $475 - $515
Akyem -
Africa $475 - $515
------ -----------
Corporate/Other -
--------------- --
Total Gold $460 - $480
---------- -----------
Boddington - Copper a $1.55 - $1.75
Batu Hijau - Copper b $0.75 - $0.85
--------------------- -------------
Total Copper $0.85 - $0.95
------------ -------------
</pre>
<p> </p>
<p> </p>
<pre>
2010 Outlook - Q2 Update
Region Consolidated Capital
Expenditures ($M)
-----------------
Nevada $355 - $375
La Herradura $55 - $65
Hope Bay $65 - $75
North America $475 - $515
------------- -----------
Yanacocha $165 - $175
Conga $155 - $165
South America $320 - $340
------------- -----------
Boddington - Gold a $140 - $155
Other Australia/NZ $210 - $225
Batu Hijau - Gold b $110 - $130
Asia Pacific $460 - $510
------------ -----------
Ahafo $120 - $130
Akyem $95 - $105
Africa $215 - $235
------ -----------
Corporate/Other $48 - $52
--------------- ---------
Total Gold $1,400 - $1,600
---------- ---------------
Boddington - Copper a -
Batu Hijau - Copper b -
--------------------- --
Total Copper -
------------ --
</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>The Company has increased its exploration forecast by approximately <span class="xn-money">$30 million</span> due to successful drilling at the Leeville/Turf operation in Nevada. In addition, the Company now expects full-year General & Administrative expenses to be at or above the high end of our original outlook range of <span class="xn-money">$160 to $170 million</span> based on higher overall labor costs. It is also anticipated that Advanced Projects and R&D spending will be at the high end of our original outlook of <span class="xn-money">$230 to $250 million</span> due to higher spending on the <span class="xn-person">Hope Bay</span> project. Financial and other overhead outlook is as follows:</p>
<p/>
<p> </p>
<p> </p>
<p> </p>
<pre>
Description 2010 Outlook - Q2 Update
($M)
----
General & Administrative $160 - $170
Interest, net $270 - $290
DD&A $970 - $1,000
Exploration $220 - $245
Advanced Projects & R&D $230 - $250
Tax Rate 24% - 28%
---------
Assumptions
Gold Price ($/oz) $1,100
Copper Price ($/lb) $3.00
Oil Price ($/barrel) $80
Australian Dollar Exchange Rate 0.90
------------------------------- ----
</pre>
<p>(1) See reconciliation from by-product costs applicable to sales to GAAP costs applicable to sales at end of release.</p>
<p/>
<p>(2) See reconciliation from by-product costs applicable to sales to GAAP costs applicable to sales at end of release.</p>
<pre>
(3) Outlook referenced in the table at end of release.
</pre>
<p>(4) Outlook referenced in the table above and elsewhere in this release are based upon management's good faith estimates as of <span class="xn-chron">July 28, 2010</span> and are considered "forward-looking statements." References to outlook guidance are based on current mine plans, assumptions and current geotechnical, metallurgical, hydrological and other physical conditions and are subject to risk and uncertainty as discussed in the "Cautionary Statement" at end of release.</p>
<pre>
</pre>
<p> </p>
<p> </p>
<p>Condensed Statements of Consolidated Income (unaudited, in millions)</p>
<p> </p>
<pre>
Three Months Ended June 30,
2010 2009
---- ----
(unaudited, in millions, except per share)
</pre>
<p> </p>
<p> Sales <span class="xn-money">$2,153</span> <span class="xn-money">$1,602</span></p>
<p> </p>
<pre>
Costs and expenses
Costs applicable to sales
(1) 858 696
Amortization 231 176
Reclamation and remediation 13 12
Exploration 53 51
Advanced projects, research
and development 57 42
General and administrative 43 40
Other expense, net 61 112
1,316 1,129
----- -----
</pre>
<p> </p>
<pre>
Other income (expense)
Other income, net 44 9
Interest expense, net (69) (23)
--- ---
(25) (14)
--- ---
Income from continuing
operations before income
tax and other items 812 459
Income tax expense (273) (136)
Equity income (loss) of
affiliates (2) (3)
--- ---
Income from continuing
operations 537 320
Income (loss) from
discontinued operations - (14)
--- ---
Net income 537 306
Net income attributable to
noncontrolling interests (155) (144)
---- ----
Net income attributable to
Newmont stockholders $382 $162
==== ====
</pre>
<p> </p>
<pre>
Net income attributable to
Newmont stockholders:
Continuing operations $382 $171
Discontinued operations - (9)
--- ---
$382 $162
==== ====
</pre>
<p> </p>
<pre>
Basic weighted-average
common shares outstanding 492 490
=== ===
Diluted weighted-average
common shares outstanding 499 491
=== ===
</pre>
<p> </p>
<pre>
Net income per common share
Basic:
Continuing operations $0.78 $0.35
Discontinued operations - (0.02)
--- -----
$0.78 $0.33
===== =====
</pre>
<p> </p>
<pre>
Diluted:
Continuing operations $0.77 $0.35
Discontinued operations - (0.02)
--- -----
$0.77 $0.33
===== =====
</pre>
<p> </p>
<pre>
Cash dividends declared per
common share $0.10 $0.10
===== =====
</pre>
<p> </p>
<p> </p>
<p> </p>
<p> </p>
<pre>
Six Months Ended June 30,
2010 2009
---- ----
(unaudited, in millions, except per share)
</pre>
<p> </p>
<p> Sales <span class="xn-money">$4,395</span> <span class="xn-money">$3,138</span></p>
<p> </p>
<pre>
Costs and expenses
Costs applicable to sales
(1) 1,733 1,435
Amortization 455 367
Reclamation and remediation 26 24
Exploration 96 92
Advanced projects, research
and development 103 73
General and administrative 88 79
Other expense, net 150 185
2,651 2,255
----- -----
</pre>
<p> </p>
<pre>
Other income (expense)
Other income, net 92 18
Interest expense, net (144) (55)
---- ---
(52) (37)
--- ---
Income from continuing
operations before income
tax and other items 1,692 846
Income tax expense (408) (241)
Equity income (loss) of
affiliates (4) (8)
--- ---
Income from continuing
operations 1,280 597
Income (loss) from
discontinued operations - (14)
--- ---
Net income 1,280 583
Net income attributable to
noncontrolling interests (352) (232)
---- ----
Net income attributable to
Newmont stockholders $928 $351
==== ====
</pre>
<p> </p>
<pre>
Net income attributable to
Newmont stockholders:
Continuing operations $928 $360
Discontinued operations - (9)
--- ---
$928 $351
==== ====
</pre>
<p> </p>
<pre>
Basic weighted-average
common shares outstanding 491 483
=== ===
Diluted weighted-average
common shares outstanding 496 484
=== ===
</pre>
<p> </p>
<pre>
Net income per common share
Basic:
Continuing operations $1.89 $0.75
Discontinued operations - (0.02)
--- -----
$1.89 $0.73
===== =====
</pre>
<p> </p>
<pre>
Diluted:
Continuing operations $1.87 $0.75
Discontinued operations - (0.02)
--- -----
$1.87 $0.73
===== =====
</pre>
<p> </p>
<pre>
Cash dividends declared per
common share $0.20 $0.20
===== =====
</pre>
<p> </p>
<p> </p>
<p>(1) Exclusive of Amortization and Accretion.</p>
<p> </p>
<pre>
The Company's financial statements can be found on its website at
www.newmont.com.
</pre>
<p> </p>
<p> </p>
<p> </p>
<p>Condensed Statements of Consolidated Cash Flow (unaudited, in millions)</p>
<p> </p>
<pre>
Three Months Ended
June 30,
2010 2009
---- ----
</pre>
<p> </p>
<pre>
(unaudited in millions)
Operating activities:
Net income $537 $306
Adjustments:
Amortization 231 176
Income from discontinued operations - 14
Reclamation and remediation 13 12
Deferred income taxes 16 6
Stock based compensation and other
benefits 21 16
Other operating adjustments and
write-downs 13 23
Net change in operating assets and
liabilities (78) (48)
--- ---
Net cash provided from continuing
operations 753 505
Net cash provided from (used in)
discontinued operations - 4
--- ---
Net cash provided from operations 753 509
--- ---
Investing activities:
Additions to property, plant and
mine development (319) (580)
Investments in marketable debt and
equity securities (4) -
Acquisitions, net - (749)
Proceeds from sale of other assets 14 2
Other (11) 9
--- ---
Net cash used in investing
activities (320) (1,318)
---- ------
Financing activities:
Proceeds from debt, net - 125
Repayment of debt (13) (79)
Sale of subsidiary shares to
noncontrolling interests - -
Acquisition of subsidiary shares
from noncontrolling interests (70) -
Dividends paid to common
stockholders (49) (49)
Dividends paid to noncontrolling
interests (87) (112)
Proceeds from stock issuance, net 27 8
</pre>
<p> </p>
<pre>
Change in restricted cash and other 2 (8)
--- ---
Net cash provided from (used in)
financing activities of continuing
operations (190) (115)
Net cash used in financing
activities of discontinued
operations - (1)
--- ---
Net cash provided from (used in)
financing activities (190) (116)
Effect of exchange rate changes on
cash (5) 20
--- ---
Net change in cash and cash
equivalents 238 (905)
Cash and cash equivalents at
beginning of period 3,364 1,449
----- -----
Cash and cash equivalents at end of
period $3,602 $544
====== ====
</pre>
<p> </p>
<p> </p>
<pre>
Six Months Ended June 30,
---------------------
2010 2009
---- ----
</pre>
<p> </p>
<pre>
(unaudited in millions)
Operating activities:
Net income $1,280 $583
Adjustments:
Amortization 455 367
Income from discontinued
operations - 14
Reclamation and remediation 26 24
Deferred income taxes (86) (13)
Stock based compensation and
other benefits 39 30
Other operating adjustments and
write-downs 18 59
Net change in operating assets
and liabilities (251) (178)
---- ----
Net cash provided from
continuing operations 1,481 886
Net cash provided from (used
in) discontinued operations (13) 8
--- ---
Net cash provided from
operations 1,468 894
----- ---
Investing activities:
Additions to property, plant
and mine development (628) (910)
Investments in marketable debt
and equity securities (7) -
Acquisitions, net - (760)
Proceeds from sale of other
assets 52 2
Other (22) (4)
--- ---
Net cash used in investing
activities (605) (1,672)
---- ------
Financing activities:
Proceeds from debt, net - 1,494
Repayment of debt (263) (1,668)
Sale of subsidiary shares to
noncontrolling interests 229 -
Acquisition of subsidiary
shares from noncontrolling
interests (109) -
Dividends paid to common
stockholders (98) (98)
Dividends paid to
noncontrolling interests (307) (112)
Proceeds from stock issuance,
net 30 1,247
Change in restricted cash and
other 48 5
--- ---
Net cash provided from (used
in) financing activities of
continuing operations (470) 868
Net cash used in financing
activities of discontinued
operations - (2)
--- ---
Net cash provided from (used
in) financing activities (470) 866
Effect of exchange rate changes
on cash (6) 21
--- ---
Net change in cash and cash
equivalents 387 109
Cash and cash equivalents at
beginning of period 3,215 435
----- ---
Cash and cash equivalents at
end of period $3,602 $544
====== ====
</pre>
<p> </p>
<pre>
The Company's financial statements can be found on its website at
www.newmont.com.
</pre>
<p> </p>
<pre>
Condensed Consolidated Balance Sheets (unaudited, in millions)
</pre>
<p> </p>
<p> </p>
<pre>
At December
At June 30, 31,
2010 2009
---- ----
ASSETS
Cash and cash equivalents $3,602 $3,215
Trade receivables 358 438
Accounts receivable 106 102
Investments 64 56
Inventories 510 493
Stockpiles and ore on leach pads 527 403
Deferred income tax assets 202 215
Other current assets 702 900
--- ---
Current assets 6,071 5,822
Property, plant and mine development, net 12,399 12,370
Investments 1,146 1,186
Stockpiles and ore on leach pads 1,607 1,502
Deferred income tax assets 1,083 937
Other long-term assets 463 482
Total assets $22,769 $22,299
======= =======
LIABILITIES
Debt $295 $157
Accounts payable 366 396
Employee-related benefits 194 250
Income and mining taxes 197 200
Other current liabilities 1,143 1,317
----- -----
Current liabilities 2,195 2,320
Debt 4,280 4,652
Reclamation and remediation liabilities 810 805
Deferred income tax liabilities 1,320 1,341
Employee-related benefits 394 381
Other long-term liabilities 215 174
Liabilities of operations held for sale - 13
--- ---
Total liabilities 9,214 9,686
----- -----
</pre>
<p> </p>
<pre>
EQUITY
Common stock 775 770
Additional paid-in capital 8,235 8,158
Accumulated other comprehensive income 526 626
Retained earnings 1,979 1,149
----- -----
Newmont stockholders' equity 11,515 10,703
Noncontrolling interests 2,040 1,910
----- -----
Total equity 13,555 12,613
------ ------
Total liabilities and equity $22,769 $22,299
======= =======
</pre>
<p> </p>
<pre>
The Company's financial statements can be found on its website at
www.newmont.com.
</pre>
<p> </p>
<p> </p>
<p>Production Statistics</p>
<p> </p>
<p> </p>
<p> </p>
<pre>
Three Months Ended June
30,
------------------------
2010 2009
--- ---
Gold
----
Consolidated ounces produced
(thousands):
North America
Nevada 420 417
La Herradura 43 30
463 447
--- ---
South America
Yanacocha 353 517
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 184 -
Jundee 88 99
Tanami 61 82
Kalgoorlie 82 70
Waihi 25 12
Batu Hijau 169 120
609 383
--- ---
Africa
Ahafo 132 134
1,557 1,481
===== =====
</pre>
<p> </p>
<pre>
Copper
------
Consolidated pounds produced
(millions):
Asia Pacific
Boddington 15 -
Batu Hijau 133 114
148 114
=== ===
</pre>
<p> </p>
<pre>
Gold
----
Equity ounces produced
(thousands):
North America
Nevada 420 417
La Herradura 43 30
463 447
--- ---
South America
Yanacocha 181 265
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 184 -
Jundee 88 99
Tanami 61 82
Kalgoorlie 82 70
Waihi 25 12
Batu Hijau 82 55
522 318
--- ---
Africa
Ahafo 132 134
1,298 1,164
----- -----
Discontinued Operations
Kori Kollo - 15
1,298 1,179
===== =====
</pre>
<p> </p>
<pre>
Copper
------
Equity pounds produced
(millions):
Asia Pacific
Boddington 15 -
Batu Hijau 65 51
80 51
=== ===
</pre>
<p> </p>
<p> </p>
<pre>
Six Months Ended June 30,
-------------------------
2010 2009
-- --
Gold
----
Consolidated ounces produced
(thousands):
North America
Nevada 853 935
La Herradura 83 55
936 990
--- ---
South America
Yanacocha 776 1,016
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 342 -
Jundee 180 201
Tanami 114 171
Kalgoorlie 186 146
Waihi 52 51
Batu Hijau 335 179
1,209 748
----- ---
Africa
Ahafo 252 264
3,173 3,018
===== =====
</pre>
<p> </p>
<pre>
Copper
------
Consolidated pounds produced
(millions):
Asia Pacific
Boddington 29 -
Batu Hijau 278 195
307 195
=== ===
</pre>
<p> </p>
<pre>
Gold
----
Equity ounces produced
(thousands):
North America
Nevada 853 935
La Herradura 83 55
936 990
--- ---
South America
Yanacocha 398 521
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 342 -
Jundee 180 201
Tanami 114 171
Kalgoorlie 186 146
Waihi 52 51
Batu Hijau 170 81
1,044 650
----- ---
Africa
Ahafo 252 264
2,630 2,425
----- -----
Discontinued Operations
Kori Kollo - 30
2,630 2,455
===== =====
</pre>
<p> </p>
<pre>
Copper
------
Equity pounds produced
(millions):
Asia Pacific
Boddington 29 -
Batu Hijau 141 88
170 88
=== ===
</pre>
<p> </p>
<p> </p>
<p>CAS and Capital Expenditures</p>
<p> </p>
<p> </p>
<pre>
Three Months Ended June 30,
---------------------------
2010 2009
--- ---
Gold
----
Costs Applicable to Sales ($/ounce)
(1)
North America
Nevada $601 $549
La Herradura 431 398
--- ---
585 538
--- ---
South America
Yanacocha 389 323
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 582 -
Jundee 397 338
Tanami 733 599
Kalgoorlie 539 607
Waihi 666 582
Batu Hijau 294 229
---
498 426
--- ---
Africa
Ahafo 416 428
--- ---
Average $492 $423
==== ====
</pre>
<p> </p>
<pre>
Copper
------
Costs Applicable to Sales ($/pound)
(1)
Asia Pacific
Boddington $1.55 $-
Batu Hijau 0.66 0.58
Average $0.77 $0.58
===== =====
</pre>
<p> </p>
<p> </p>
<pre>
Three Months Ended June 30,
---------------------------
2010 2009
--- ---
Consolidated Capital Expenditures ($
million)
North America
Nevada $69 $58
Hope Bay 39 2
La Herradura 8 10
116 70
</pre>
<p> </p>
<pre>
South America
Yanacocha 28 24
Conga 26 5
54 29
</pre>
<p> </p>
<p> </p>
<pre>
Asia Pacific
Boddington 33 468
Jundee 11 9
Tanami 19 18
Kalgoorlie 3
Waihi 2 2
Batu Hijau 5 17
Other Asia Pacific 1
74 514
</pre>
<p> </p>
<pre>
Africa
Ahafo 30 14
Akyem 16
46 14
</pre>
<p> </p>
<p> Corporate and Other 8 5</p>
<p> </p>
<p> Total - Accrual Basis 298 632</p>
<p> </p>
<p> </p>
<p> Change in Capital Accrual 21 (52)</p>
<p> </p>
<pre>
Total - Cash Basis $319 $580
==== ====
</pre>
<p> </p>
<p> </p>
<pre>
Six Months Ended June 30,
-------------------------
2010 2009
--- ---
Gold
----
Costs Applicable to Sales ($/ounce)
(1)
North America
Nevada $605 $527
La Herradura 389 393
--- ---
586 519
--- ---
South America
Yanacocha 380 324
</pre>
<p> </p>
<pre>
Asia Pacific
Boddington 560 -
Jundee 391 345
Tanami 786 586
Kalgoorlie 539 625
Waihi 660 426
Batu Hijau 253 297
---
479 450
--- ---
Africa
Ahafo 475 413
--- ---
Average $486 $427
==== ====
</pre>
<p> </p>
<pre>
Copper
------
Costs Applicable to Sales ($/pound)
(1)
Asia Pacific
Boddington $1.80 $-
Batu Hijau 0.66 0.73
Average $0.78 $0.73
===== =====
</pre>
<p> </p>
<p> </p>
<pre>
Six Months Ended June 30,
-------------------------
2010 2009
--- ---
Consolidated Capital Expenditures ($
million)
North America
Nevada $117 $111
Hope Bay 48 3
La Herradura 22 19
187 133
</pre>
<p> </p>
<pre>
South America
Yanacocha 68 51
Conga 43 11
111 62
</pre>
<p> </p>
<p> </p>
<pre>
Asia Pacific
Boddington 81 684
Jundee 21 14
Tanami 38 28
Kalgoorlie 7 2
Waihi 5 3
Batu Hijau 33 23
Other Asia Pacific 3 1
188 755
</pre>
<p> </p>
<pre>
Africa
Ahafo 51 23
Akyem 22 1
73 24
</pre>
<p> </p>
<pre>
Corporate and Other 11 8
Total - Accrual Basis 570 982
</pre>
<p> </p>
<p> </p>
<p> Change in Capital Accrual 58 (72)</p>
<p> </p>
<pre>
Total - Cash Basis $628 $910
==== ====
</pre>
<p> </p>
<pre>
(1) Excludes Amortization and Reclamation and remediation.
Supplemental Information
Non-GAAP Financial Measures
</pre>
<p>Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles ("GAAP"). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.</p>
<pre>
Reconciliation of Adjusted Net Income to GAAP Net Income
</pre>
<p>Management of the Company uses the non-GAAP financial measure Adjusted net income to evaluate the Company's operating performance, and for planning and forecasting future business operations. The Company believes the use of Adjusted net income allows investors and analysts to compare the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the production and sale of minerals to similar operating results of other mining companies, by excluding exceptional or unusual items, income or loss from discontinued operations and the permanent impairment of assets, including marketable securities and goodwill. Management's determination of the components of Adjusted net income are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.</p>
<p/>
<p>Net income attributable to Newmont stockholders is reconciled to Adjusted net income as follows:</p>
<p/>
<p> </p>
<p> </p>
<p>Earnings release - Adjusted Net Income</p>
<p> </p>
<pre>
Three months ended
June 30,
--------
($ million except per share, after-tax) 2010 2009
--------------------------------------- --- ---
GAAP Net income attributable to Newmont
stockholders $382 $162
Income tax benefit from internal restructuring - -
Net gain on asset sales (7) -
PTNNT community contribution - -
Impairment of assets 2 1
Boddington acquisition costs - 39
Loss from discontinued operations - 9
--------------------------------- --- ---
Adjusted net income $377 $211
=================== ==== ====
Adjusted net income per share $0.77 $0.43
============================= ===== =====
</pre>
<p> </p>
<p> </p>
<pre>
Six months ended
June 30,
--------
($ million except per share, after-tax) 2010 2009
--------------------------------------- --- ---
GAAP Net income attributable to Newmont
stockholders $928 $351
Income tax benefit from internal restructuring (127) -
Net gain on asset sales (31) -
PTNNT community contribution 13 -
Impairment of assets 3 5
Boddington acquisition costs - 44
Loss from discontinued operations - 9
--------------------------------- --- ---
Adjusted net income $786 $409
=================== ==== ====
Adjusted net income per share $1.60 $0.85
============================= ===== =====
</pre>
<p>Reconciliation of Co-Product Costs Applicable to Sales to By-Product Costs Applicable to Sales</p>
<p/>
<p>Sales and Costs applicable to sales for Boddington are presented in the Condensed Consolidated Financial Statements for both gold and copper due to the significant portion of copper production (approximately 15-20% of total revenue based on the latest life-of-mine plan and metal price assumptions). The co-product method allocates costs applicable to sales to each metal based on specifically identifiable costs where applicable and on a relative proportion of sales values for other costs. Management also assesses the performance of the Boddington mine on a by-product basis due to the majority of sales being derived from gold and to determine contingent consideration payments to AngloGold. The by-product method deducts copper sales from costs applicable to sales as shown in the following table:</p>
<p/>
<p> </p>
<p> </p>
<pre>
Three months ended
June 30, 2010
-------------
Boddington Consolidated
---------- ------------
($ million)
Co-product costs applicable to sales
- gold $113 $760
Less copper margin:
Sales - copper 40 298
Costs applicable to sales - copper (25) (98)
Copper margin 15 200
------------- - ---
</pre>
<p> </p>
<pre>
By-product costs applicable to sales
- gold $98 $560
==================================== === ====
</pre>
<p> </p>
<pre>
Costs applicable to sales -gold
($/oz)
Co-product $582 $492
By-product $503 $362
</pre>
<p> </p>
<pre>
Gold ounces sold (thousands) 194 1,546
---------------------------- --- -----
</pre>
<p> </p>
<p> </p>
<pre>
Six months ended
June 30, 2010
-------------
Boddington Consolidated
---------- ------------
($ million)
Co-product costs applicable to sales
- gold $193 $1,519
Less copper margin:
Sales - copper 79 792
Costs applicable to sales - copper (49) (214)
Copper margin 30 578
------------- --- ---
</pre>
<p> </p>
<pre>
By-product costs applicable to sales
- gold $163 $941
==================================== ==== ====
</pre>
<p> </p>
<pre>
Costs applicable to sales -gold
($/oz)
Co-product $560 $486
By-product $474 $301
</pre>
<p> </p>
<pre>
Gold ounces sold (thousands) 344 3,127
---------------------------- --- -----
</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 second quarter and earnings conference call and web cast presentation will be held on <span class="xn-chron">Wednesday, July 28, 2010</span> beginning at <span class="xn-chron">9:30 a.m. Eastern Time</span> (<span class="xn-chron">7:30 a.m. Mountain Time</span>). To participate:</p>
<p/>
<p> </p>
<p> </p>
<pre>
Dial-In Number 888.566.1822
Intl Dial-In Number 312.470.0189
Leader John Seaberg
Passcode Newmont
Replay Number 888.662.6653
Intl Replay Number 402.220.6417
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 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 potential, expenditures, results, reserves resources and NRM; (v) statements regarding fluctuations in capital and currency markets; (vi) statements regarding potential cost savings, productivity, operating performance, and cost structure; (vii) expectations regarding the development, growth, mine life, production and costs applicable to sales and exploration potential of Boddington, Batu Hijau, Ahafo, Akyem, Yanacocha, Conga, La Herradura, <span class="xn-person">Hope Bay</span> and the Company's other projects, including in Nevada and Australia/New Zealand; and (viii) expectations regarding the impacts of operating, technical or geotechnical issues in connection with the Company's projects or operations. 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: John Seaberg, +1-303-837-5743, [email protected], or Media, Omar Jabara, +1-303-837-5114, [email protected], both of Newmont Mining Corporation Web Site: http://www.newmont.com
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