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Maintaining 2011 Outlook for Production, Costs Applicable to Sales and
Capital Expenditures
This release should be read in conjunction with Newmont's Third Quarter
2011 Form 10-Q filed with the Securities and Exchange Commission on
October
27, 2011 (available at www.newmont.com).
DENVER, Oct. 27, 2011 /CNW/ — Newmont Mining Corporation (NYSE: NEM) (“Newmont” or the “Company”) today reported consolidated revenue of $2.7 billion for the third quarter of 2011 and $7.6 billion year-to-date, as well as operating cash flow of $1.3 billion for the third quarter of 2011 and $2.7 billion year-to-date.
Third Quarter Highlights:
-- Record consolidated revenue of $2.7 billion, an increase of 6% from
the
prior year quarter;
-- Average realized gold and copper price of $1,695 per ounce and $2.94
per pound, up 39% and down 20%, respectively, from the prior year
quarter;
-- Attributable gold and copper production of 1.3 million ounces and 58
million pounds, down 7% and 30%, respectively, from the prior year
quarter;
-- Record cash flow from continuing operations of $1.3 billion, up 48%
from the prior year quarter;
-- Gold and copper costs applicable to sales ("CAS") of $622 per ounce
and
$1.10 per pound, up 32% and up 51%, respectively, from the prior year
quarter ($628 per ounce and $1.25 per pound on an attributable
basis(1), up 27% and up 58%, respectively, from the prior year
quarter); and
-- Maintaining 2011 Outlook for production, CAS, and capital
expenditures.
“We are pleased to announce record revenue and operating cash flow for both the quarter and year-to-date. Our operating cash flow increased by 48% to $1.3 billion compared with a 39% increase in our average realized gold price over the prior year’s quarter,” said Richard O’Brien, President and Chief Executive Officer. “Our unique combination of per share operating and financial leverage, as well as our industry-leading gold price-linked dividend policy, offers investors a compelling investment opportunity,” added Mr. O’Brien.
Newmont’s third quarter 2011 adjusted net income(2) increased 19% to $635 million ($1.29 per share) for the third quarter of 2011, from $533 million ($1.08 per share) for the third quarter of 2010. Attributable net income from continuing operations was impacted by a non-cash impairment of $142 million ($0.29 per share) net of tax, related to certain marketable securities, including shares of Paladin Energy Ltd. (“Paladin”) and Pilot Gold Inc., acquired as part of the Fronteer Gold Inc. and Long Canyon acquisition in April 2011. Paladin is a uranium producer and the value of the Paladin securities has declined since Japan’s nuclear crisis in March 2011. As a result of the decline in these securities, partially offset by a gain of the sale of certain other marketable equity securities, third quarter 2011 attributable net income from continuing operations decreased 8% to $493 million ($1.00 per share) compared to $537 million ($1.09 per share) for the third quarter of 2010.
Newmont is maintaining its previously announced 2011 Outlook for attributable gold production of 5.1 to 5.3 million ounces at CAS of between $560 and $590 per ounce (on a co-product basis). Potentially lower grades due to mine sequencing at Gold Quarry and lower grades at Exodus in Nevada could result in the Company’s attributable gold production for the year to be near the bottom of this range. Potentially lower production in Nevada as well as higher operating costs at Boddington in Australia, and a higher co-product allocation of costs to gold could result in the Company’s CAS for the year to be near the top of this range.
Newmont is maintaining its previously announced 2011 Outlook for attributable copper production of 190 to 220 million pounds at CAS of between $1.25 and $1.50 per pound. A lower co-product allocation of costs to copper could result in the Company’s CAS for the year to be below or near the bottom of this range.
Newmont is maintaining its 2011 attributable capital expenditure Outlook of $2.1 to $2.5 billion, or $2.7 to $3.0 billionon a consolidated basis. Capital spending through the first three quarters of 2011 has been lower than expected across the portfolio, but is expected to accelerate in the last quarter of the year as development at Akyem and Conga accelerates.
As previously announced, Newmont’s Board of Directors approved a fourth quarter 2011 gold price-linked dividend of$0.35 per share(3) based on the Company’s average realized gold price of $1,695 per ounce for the third quarter of 2011, an increase of 17% over the $0.30 dividend paid in the third quarter of 2011, and an increase of 133% over the$0.15 dividend paid in the fourth quarter of 2010.
Operations
North America
Nevada – Attributable gold production in Nevada was 428,000 ounces at CAS of $641 per ounce during the third quarter. Gold production decreased 6% from the prior year quarter due to lower mill grade ore and throughput, partially offset by higher leach placement and recoveries. Open pit ore tons mined increased 167% as the remediation of the Gold Quarry pit slope failure was completed and also due to additional ore tons from Twin Creeks due to mine sequencing. CAS increased 15% from the prior year quarter due to lower production, lower by-product credits and higher royalty costs.
As a result of lower grades due to mine sequencing at Gold Quarry, temporary lack of access to the Chukar mine and lower tonnage and grades at Exodus, the Company now expects 2011 attributable gold production from Nevada of approximately 1.7 to 1.8 million ounces at CAS of between $565 and $615 per ounce.
La Herradura – Attributable gold production at La Herradura in Mexico was 54,000 ounces at CAS of $575 per ounce during the third quarter. Gold production increased 29% from the prior year quarter due to higher leach placement at Soledad – Dipolos. CAS increased 24% from the prior year quarter due to higher mining, leaching and employee profit sharing costs, partially offset by higher production and by-product credits.
The Company continues to expect 2011 attributable gold production from La Herradura of approximately 180,000 to 200,000 ounces at CAS of between $480 and $510 per ounce.
South America
Yanacocha – Attributable gold production at Yanacocha in Peru was 169,000 ounces at CAS of $610 per ounce during the third quarter. Gold production decreased 8% from the prior year quarter due to lower leach placement at Carachugo and La Quinua as a result of mine sequencing and lower equipment availability, partially offset by higher mill grade. Ore tons mined decreased 29% due to mine sequencing at El Tapado. CAS per ounce increased 45% from the prior year quarter due to lower production, higher diesel, worker’s participation and royalty costs, lower by-product credits and an unfavorable leach pad recovery estimate adjustment.
As a result of the lower leach placement mentioned above, the Company now expects 2011 attributable gold production at Yanacocha of approximately 650,000 to 670,000 ounces at CAS of between $560 and $600 per ounce.
La Zanja – Attributable gold production during the third quarter at La Zanja in Peru was 19,000 ounces.
As a result of better than expected performance, the Company now expects 2011 attributable gold production at La Zanja of between 50,000 and 60,000 ounces.
Asia Pacific
Boddington – Attributable gold and copper production during the third quarter at Boddington in Australia were 166,000 ounces and 17 million pounds, respectively, at CAS of $743 per ounce and $2.25 per pound, respectively. Gold production decreased 8% from the prior year quarter due to lower mill grade, partially offset by higher mill throughput. Copper production increased 21% from the prior year quarter due to higher mill throughput, partially offset by lower recovery. Gold CAS increased 20% per ounce from the prior year quarter due to lower gold production, higher royalty costs and diesel prices, partially offset by higher by-product credits. Copper CAS increased 24% per pound due to higher royalty costs and diesel prices, partially offset by higher by-product credits and copper production. CAS per ounce and per pound were also impacted by a stronger Australian dollar and a higher allocation of costs to gold.
The Company continues to expect 2011 attributable gold production at Boddington of approximately 750,000 to 800,000 ounces. As a result of higher mill maintenance costs and a higher co-product allocation of costs to gold, the Company now expects CAS of between $650 and $690 per ounce. The Company continues to expect 2011 attributable copper production of 70 to 80 million pounds at CAS of between $1.80 and $2.20 per pound.
Batu Hijau – Attributable gold and copper production during the third quarter at Batu Hijau in Indonesia were 66,000 ounces and 41 million pounds, respectively, at CAS of $476 per ounce and $0.90 per pound, respectively. Gold and copper production decreased 37% and 40% from the prior year quarter, respectively, as planned, due to lower mill grade, throughput and recovery as a result of processing more stockpiled material compared to higher grade Phase 5 ore in 2010 and the completion of mill motor replacements. Waste tons mined increased 104% as Phase 6 waste removal continues as planned. CAS increased 126% per ounce and 38% per pound from the prior year quarter due to lower production and higher waste mining costs, partially offset by higher by-product credits. CAS per ounce and per pound were also impacted by a higher allocation of costs to gold.
As a result of processing additional higher grade Phase 5 ore during the quarter, the Company now expects 2011 attributable gold production for Batu Hijau of approximately 140,000 to 160,000 ounces at CAS of between $440 and$460 per ounce. The Company continues to expect attributable copper production to be approximately 120 to 140 million pounds at CAS of between $1.10 and $1.30 per pound.
Other Australia/New Zealand – Attributable gold production during the third quarter in other Australia/New Zealand was 263,000 ounces at CAS of $684 per ounce. Attributable gold production was 9% lower from the prior year quarter due to lower mill throughput at Tanami, Jundee and Kalgoorlie and lower grade at Waihi, partially offset by higher grade at Tanami and Jundee and a drawdown of inventory at Jundee. CAS increased 27% from the prior year quarter due to lower production and higher operating costs which were driven by higher power and diesel prices and a stronger Australian dollar, net of hedging gains.
The Company continues to expect 2011 attributable gold production at the Other Australia/New Zealand operations of approximately 1.0 to 1.05 million ounces. As a result of lower operating costs and favorable inventory changes at Kalgoorlie, the Company now expects the Other Australia/New Zealand CAS of between $640 and $660 per ounce.
Africa
Ahafo – Attributable gold production during the third quarter at Ahafo in Ghana was 146,000 ounces at CAS of $501per ounce. Gold production decreased 6% from the prior year quarter due to processing lower mill grade, partially offset by higher recovery. CAS per ounce increased 19% from the prior year quarter due to lower production and higher labor, diesel and royalty costs.
As a result of slightly higher than expected grades and recoveries, the Company now expects 2011 attributable gold production at Ahafo of approximately 560,000 to 590,000 ounces at CAS of between $470 and $500 per ounce.
Capital Update
Consolidated capital expenditures were $761 million during the third quarter. Newmont is maintaining its 2011 attributable capital expenditure Outlook of $2.1 to $2.5 billion, or $2.7 to $3.0 billion on a consolidated basis. Capital spending through the first three quarters of 2011 has been lower than expected across the portfolio, but is expected to increase in the last quarter of the year as development at Akyem and Conga accelerates. For the remainder of the year, 40% of 2011 consolidated capital expenditures are expected to be associated with major project initiatives, including further development of the Akyem project in Ghana, the Conga project in Peru, Hope Bay in Canada, and the Nevada project portfolio, while the remaining 60% is expected to correspond with growth and sustaining capital.
2011 Outlook- Q3 Update(4),(5)
------------------------------
2011 Outlook 2011 Outlook 2011
Outlook 2011 Outlook
Attributable Consolidated
Consolidated Attributable
Region Production CAS Capital
Capital
(Kozs, Mlbs) ($/oz, $/lb)
Expenditures Expenditures
------------ ------------
------------ ------------
Nevada 1,700 - 1,800 $565 - $615 $525 -
$600 $525 - $600
La
Herradura 180 - 200 $480 - $510 $70 -
$80 $70 - $80
Hope
Bay - - $90 -
$100 $90 - $100
North
America 1,880 - 2,000 $560 - $600 $685 -
$780 $685 - $780
------- ------------- -----------
----------- -----------
Yanacocha 650 - 670 $560 - $600 $320 -
$370 $160 - $200
La
Zanja 50 - 60 n/a
- -
Conga - - $630 -
$680 $300 - $350
South
America 700 - 730 $560 - $600 $950 -
$1,050 $500 - $550
------- --------- -----------
------------- -----------
Boddington
-
Gold 750 - 800 $650 - $690 $200 -
$230 $200 - $230
Other
Australia/
NZ 1,000 - 1,050 $640 - $660 $295 -
$315 $295 - $315
Batu
Hijau
-
Gold
(a) 140 - 160 $440 - $460 $210 -
$230 $95 - $105
Asia
Pacific 1,900 - 2,010 $600 - $675 $700 -
$775 $590 - $650
------- ------------- -----------
----------- -----------
Ahafo 560 - 590 $470 - $500 $125 -
$150 $125 - $150
Akyem - - $225 -
$250 $225 - $250
Africa 560 - 590 $470 - $500 $350 -
$400 $350 - $400
------ --------- -----------
----------- -----------
Corporate/
Other $60 -
$70 $60 - $70
----------
Total
Gold 5,100 - 5,300 $560 - $590(b,c) $2,700 -
$3,000 $2,100 - $2,500
----- ------------- ----------------
--------------- ---------------
Boddington
-
Copper 70 - 80 $1.80 - $2.20
- -
Batu
Hijau
-
Copper
(a) 120 - 140 $1.10 - $1.30
- -
Total
Copper 190 - 220 $1.25 - $1.50
------ --------- -------------
Assumes Batu Hijau economic interest
a of 48.5% for 2011
2011 Outlook Attributable CAS is $570
b -$600 per ounce
2011 Outlook Net Attributable CAS (by-
product basis) is $485 - $515 per
c ounce
2011 Outlook
Consolidated
Description Expenses
($M)
----
General & Administrative $190 - $200
Interest Expense $235 - $245
DD&A $1,025 - $1,035
Exploration Expense $335 - $345
Advanced Projects & R&D $405 - $415
Tax Rate 29% - 31%
--------
Assumptions
Gold Price ($/ounce) $1,600
Copper Price ($/pound) $4.00
Oil Price ($/barrel) $90
Australian Dollar
Exchange Rate 1.00
----------------- ----
See page 12 for reconciliation between
consolidated, attributable, and net
1. attributable CAS.
Non-GAAP measure; see page 11 for
2. reconciliation.
Payable on December 30, 2011 to
shareholders of record as of December
3. 8, 2011.
Outlook referenced in the table above
and elsewhere in this release is
based upon management's good faith
estimates as of October 27, 2011 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
4. "Cautionary Statement" on page 13.
2011 Annual CAS, inclusive of hedge
gains and losses, are expected to
change by approximately $5 per ounce
for every $10 change in the oil price
and by approximately $2 per ounce for
every $0.10 change in the Australian
5. dollar exchange rate.
NEWMONT MINING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS
OF INCOME
(unaudited, in millions except per
share)
Three Nine
Months Months
Ended Ended
September September
30, 30,
---------- ----------
2011 2010 2011 2010
---- ---- ---- ----
Sales $2,744 $2,597 $7,593 $6,992
Costs and
expenses
Costs
applicable
to sales (1) 1,008 891 2,865
2,608
Amortization 270 242 776
697
Reclamation
and
remediation 6 18 63
44
Exploration 104 67 255
163
Advanced
projects,
research and
development 93 46 247
149
General and
administrative 50 45 145
133
Other
expense, net 36 50 196
200
--- --- ---
---
1,567 1,359 4,547
3,994
----- ----- -----
-----
Other income
(expense)
Other income,
net (76) 5 3
97
Interest
expense, net (65) (66) (193)
(210)
--- --- ----
----
(141) (61) (190)
(113)
---- --- ----
----
Income before
income and
mining tax
and other
items 1,036 1,177 2,856 2,885
Income and
mining tax
expense (371) (360) (863)
(784)
Equity income
(loss) of
affiliates 10 (3) 12
(7)
--- --- ---
---
Income from
continuing
operations 675 814 2,005
2,094
Loss from
discontinued
operations - - (136)
-
--- --- ----
---
Net income 675 814 1,869
2,094
Net income
attributable
to
noncontrolling
interests (182) (277) (475) (629)
---- ---- ----
----
Net income
attributable to
Newmont
stockholders $493 $537 $1,394
$1,465
==== ==== ======
======
Net income
attributable
to Newmont
stockholders:
Continuing
operations $493 $537 $1,530
$1,465
Discontinued
operations - - (136)
-
--- --- ----
---
$493 $537 $1,394
$1,465
==== ==== ======
======
Income per
common share
(2)
Basic:
Continuing
operations $1.00 $1.09 $3.10
$2.98
Discontinued
operations - - (0.28)
-
--- --- -----
---
$1.00 $1.09 $2.82
$2.98
===== ===== =====
=====
Diluted:
Continuing
operations $0.98 $1.07 $3.05
$2.94
Discontinued
operations - - (0.27)
-
--- --- -----
---
$0.98 $1.07 $2.78
$2.94
===== ===== =====
=====
Cash dividends
declared per
common share $0.30 $0.15 $0.65
$0.35
Excludes Amortization and Reclamation
(1) and remediation.
(2) Attributable to Newmont stockholders.
NEWMONT MINING CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOW
(unaudited, in millions)
Three
Months Nine Months
Ended Ended
September September
30, 30,
---------- ------------
2011 2010 2011
2010
---- ---- ----
----
Operating
activities:
Net income $675 $814 $1,869
$2,094
Adjustments:
Amortization 270 242 776
697
Loss from
discontinued
operations - - 136
-
Reclamation and
remediation 6 18 63
44
Deferred income
taxes (68) 34 (106)
(52)
Stock based
compensation and
other non-cash
benefits 18 15 62
54
Impairment of
marketable
securities 174 - 175
-
Gain on asset
sales, net (15) (5) (68)
(54)
Other operating
adjustments and
write-downs 6 71 102
138
Net change in
operating assets
and liabilities 197 (335) (343)
(586)
--- ---- ----
----
Net cash provided
from continuing
operations 1,263 854 2,666
2,335
Net cash used in
discontinued
operations (2) - (4)
(13)
--- --- ---
---
Net cash provided
from operations 1,261 854 2,662
2,322
----- --- -----
-----
Investing
activities:
Additions to
property, plant
and mine
development (761) (344) (1,781)
(972)
Proceeds from sale
of marketable
securities 19 - 74
1
Purchases of
marketable
securities (2) (2) (17)
(9)
Acquisitions, net (10) (2) (2,301)
(2)
Proceeds from sale
of other assets - 1 6
53
Other 6 (50) (9)
(73)
--- --- ---
---
Net cash used in
investing
activities (748) (397) (4,028)
(1,002)
---- ---- ------
------
Financing
activities:
Proceeds from debt,
net 1,023 - 1,798
-
Repayment of debt (1,113) (11) (2,086)
(274)
Sale of
noncontrolling
interests - - -
229
Acquisition of
noncontrolling
interests - - -
(109)
Dividends paid to
common
stockholders (148) (74) (321)
(172)
Dividends paid to
noncontrolling
interests - (53) (17)
(360)
Proceeds from stock
issuance, net 27 26 35
56
Change in
restricted cash
and other 3 (2) 3
46
--- --- ---
---
Net cash used in
financing
activities (208) (114) (588)
(584)
Effect of exchange
rate changes on
cash (25) 6 33
-
--- --- ---
---
Net change in cash
and cash
equivalents 280 349 (1,921)
736
Cash and cash
equivalents at
beginning of
period 1,855 3,602 4,056
3,215
----- ----- -----
-----
Cash and cash
equivalents at end
of period $2,135 $3,951 $2,135
$3,951
====== ====== ======
======
NEWMONT MINING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
At At
September December
30, 31,
2011 2010
---- ----
ASSETS
Cash and cash equivalents $2,135 $4,056
Trade receivables 312 582
Accounts receivable 259 88
Investments 94 113
Inventories 720 658
Stockpiles and ore on leach
pads 627 617
Deferred income tax assets 425 177
Other current assets 1,788 962
----- ---
Current assets 6,360 7,253
Property, plant and mine
development, net 17,019 12,907
Investments 1,254 1,568
Stockpiles and ore on leach
pads 2,096 1,757
Deferred income tax assets 1,629 1,437
Other long-term assets 781 741
Total assets $29,139 $25,663
======= =======
LIABILITIES
Debt $578 $259
Accounts payable 542 427
Employee-related benefits 269 288
Income and mining taxes 381 355
Other current liabilities 2,705 1,418
----- -----
Current liabilities 4,475 2,747
Debt 3,659 4,182
Reclamation and remediation
liabilities 1,031 984
Deferred income tax
liabilities 2,592 1,488
Employee-related benefits 350 325
Other long-term liabilities 328 221
Total liabilities 12,435 9,947
------ -----
EQUITY
Common stock 781 778
Additional paid-in capital 8,364 8,279
Accumulated other
comprehensive income 462 1,108
Retained earnings 4,253 3,180
----- -----
Newmont stockholders'
equity 13,860 13,345
Noncontrolling interests 2,844 2,371
----- -----
Total equity 16,704 15,716
------ ------
Total liabilities and
equity $29,139 $25,663
======= =======
Regional Operating Statistics
Production Statistics Summary
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
2011 2010 2011 2010
---- ---- ---- ----
Gold
----
Consolidated ounces produced
(thousands):
North America
Nevada 428 453 1,218 1,306
La Herradura 54 42 156 125
482 495 1,374 1,431
--- --- ----- -----
South America
Yanacocha 328 355 958 1,131
Asia Pacific
Boddington 166 180 536 522
Batu Hijau 138 219 285 554
Other Australia/New Zealand 259 284 802 816
563 683 1,623 1,892
--- --- ----- -----
Africa
Ahafo 146 156 478 408
1,519 1,689 4,433 4,862
===== ===== ===== =====
Copper
------
Consolidated pounds produced
(millions):
Asia Pacific
Boddington 17 14 47 43
Batu Hijau 85 142 231 420
102 156 278 463
=== === === ===
Gold
----
Attributable ounces produced
(thousands):
North America
Nevada 428 453 1,218 1,306
La Herradura 54 42 156 125
482 495 1,374 1,431
--- --- ----- -----
South America
Yanacocha 169 182 492 580
Other South America Equity
Interests 19 5 49 5
188 187 541 585
--- --- --- ---
Asia Pacific
Boddington 166 180 536 522
Batu Hijau 66 106 138 276
Other Australia/New Zealand 259 284 802 816
Other Asia Pacific Equity
Interests 4 - 12 -
495 570 1,488 1,614
--- --- ----- -----
Africa
Ahafo 146 156 478 408
1,311 1,408 3,881 4,038
===== ===== ===== =====
Copper
------
Attributable pounds produced
(millions):
Asia Pacific
Boddington 17 14 47 43
Batu Hijau 41 69 112 210
58 83 159 253
=== === === ===
CAS and Capital Expenditures
Three Months Ended September
Nine Months Ended September
30,
30,
-----------------------------
----------------------------
2011 2010
2011 2010
---- ----
---- ----
Gold
----
Costs Applicable to Sales ($/ounce) (1)
North America
Nevada $641 $556
$640 $579
La Herradura 575 464
498 415
--- ---
--- ---
633 549
624 565
--- ---
--- ---
South America
Yanacocha 610 420
578 392
Asia Pacific
Boddington 743 617
657 577
Batu Hijau 476 211
423 235
Other Australia/New Zealand 684 539
623 543
652 445
597 464
--- ---
--- ---
Africa
Ahafo 501 422
465 456
--- ---
--- ---
Average $622 $470
$587 $477
==== ====
==== ====
Attributable to Newmont $628 $496
$593 $503
==== ====
==== ====
Copper
------
Costs Applicable to Sales ($/pound) (1)
Asia Pacific
Boddington $2.25 $1.81
$2.12 $1.80
Batu Hijau 0.90 0.65
1.01 0.66
Average $1.10 $0.73
$1.17 $0.76
===== =====
===== =====
Attributable to Newmont $1.25 $0.79
$1.30 $0.84
===== =====
===== =====
Consolidated Costs applicable to sales excludes Amortization and Reclamation and remediation.
Three Months
Ended Nine Months Ended
September
30, September 30,
------------------- ------------------
2011
2010 2011 2010
----
---- ---- ----
Consolidated Capital Expenditures ($
million)
North America
Nevada $152
$83 $380 $200
Hope Bay 33
40 74 88
La Herradura 28
11 55 33
213
134 509 321
---
--- --- ---
South America
Yanacocha 114
41 244 109
Conga 197
43 448 86
311
84 692 195
---
--- --- ---
Asia Pacific
Boddington 47
25 122 106
Batu Hijau 61
15 149 48
Other Australia/New Zealand 78
40 212 111
Other Asia Pacific 4
8 8 11
190
88 491 276
---
--- --- ---
Africa
Ahafo 34
29 71 80
Akyem 60
27 127 49
94
56 198 129
---
--- --- ---
Corporate and Other 8
12 23 23
---
---
Total - Accrual Basis $816
$374 $1,913 $944
---
--- ------ ---
Change in Capital Accrual (55)
(30) (132) 28
Total - Cash Basis $761
$344 $1,781 $972
====
==== ====== ====
Attributable to Newmont (Accrual Basis) $632
$326 $1,500 $826
====
==== ====== ====
Supplemental Information
Non-GAAP Financial Measures
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.
Reconciliation of Adjusted Net Income to GAAP Net Income
Management 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.
Net income attributable to Newmont stockholders is reconciled to Adjusted net income as follows:
Three months Nine Months
ended ended
September
September 30, 30,
------------- ----------
(in millions except per share,
after-tax) 2011 2010 2011 2010
------------------------------ ---- ---- ---- ----
GAAP Net income (1) $493 $537 $1,394 $1,465
Fronteer acquisition costs - - 18 -
Impairment of assets - - - -
PTNNT community contribution - - - 13
Impairments/asset sales, net 142 (4) 110 (32)
Income tax benefit from internal
restructuring - - (65) (127)
Boddington contingent
consideration - - - -
Loss from discontinued operations - - 136 -
--------------------------------- --- --- --- ---
Adjusted net income $635 $533 $1,593 $1,319
=================== ==== ==== ====== ======
Adjusted net income per share,
basic $1.29 $1.08 $3.23 $2.68
============================== ===== ===== ===== =====
(1) Attributable to Newmont
stockholders.
Costs Applicable to Sales per Ounce/Pound
Costs applicable to sales per ounce/pound are non-GAAP financial measures. These measures are calculated by dividing the costs applicable to sales of gold and copper by gold ounces or copper pounds sold, respectively. These measures are calculated on a consistent basis for the periods presented on both a consolidated and attributable to Newmont basis. Attributable costs applicable to sales are based on our economic interest in production from our mines. For operations where we hold less than a 100% economic share in the production, we exclude the share of gold or copper production attributable to the non-controlling interest. We include attributable costs applicable to sales per ounce/pound to provide management, investors and analysts with information with which to compare our performance to other gold producers. Costs applicable to sales per ounce/pound statistics are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.
Net attributable costs applicable to sales per ounce measures the benefit of copper produced in conjunction with gold, as a credit against the cost of producing gold. A number of other gold producers present their costs net of the contribution from copper and other non-gold sales. We believe that including a measure of this basis provides management, investors and analysts with information with which to compare our performance to other gold producers, and to better assess the overall performance of our business. In addition, this measure provides information to enable investors and analysts to understand the importance of non-gold revenues to our cost structure.
Costs
applicable
to
sales
per
ounce
Three Months Ended Nine Months
Ended
September 30, September 30,
2011 2010 2011
2010
---- ---- ----
----
Costs
applicable
to
sales:
Consolidated $907 $776 $2,541
$2,279
Noncontrolling
interests
(1) (128) (99) (333)
(285)
Attributable
to
Newmont $779 $677 $2,208
$1,994
Gold
sold
(000
ounces):
Consolidated 1,458 1,651 4,327
4,778
Noncontrolling
interests
(1) (218) (287) (601)
(811)
Attributable
to
Newmont 1,240 1,364 3,726
3,967
===== ===== =====
=====
Costs
applicable
to
sales
per
ounce:
Consolidated $622 $470 $587
$477
Attributable
to
Newmont $628 $496 $593
$503
Costs
applicable
to
sales
per
pound
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011
2010
---- ---- ----
----
Costs
applicable
to
sales:
Consolidated $101 $115 $324
$329
Noncontrolling
interests
(1) (37) (50) (124)
(131)
Attributable
to
Newmont $64 $65 $200
$198
Copper
sold
(million
lbs):
Consolidated 92 158 276
434
Noncontrolling
interests
(1) (41) (76) (122)
(198)
Attributable
to
Newmont 51 82 154
236
=== === ===
===
Costs
applicable
to
sales
per
pound:
Consolidated $1.10 $0.73 $1.17
$0.76
Attributable
to
Newmont $1.25 $0.79 $1.30
$0.84
Net
attributable
costs
applicable to
sales per
ounce
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011
2010
---- ---- ----
----
Attributable
costs
applicable
to
sales:
Gold $779 $677 $2,208
$1,994
Copper 64 65 200
198
$843 $742 $2,408
$2,192
Copper
revenue:
Consolidated $(273) $(581) $(991)
$(1,373)
Noncontrolling
interests
(1) 119 279 434
631
(154) (302) (557)
(742)
---- ---- ----
----
Net
attributable
costs
applicable
to
sales $689 $440 $1,851 $1,450
Attributable
gold
ounces
sold
(thousands) 1,240 1,364 3,726 3,967
Net
attributable
costs
applicable
to
sales
per
ounce $556 $323 $497 $366
(1) Relates to
partners'
interests in
Batu Hijau and
Yanacocha.
Conference Call Information:
The third quarter conference call will be held on Friday, October 28, at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time) and it will also be carried on the Company’s website.
Conference Call Details
-----------------------
Dial-In Number 888.566.1822
Intl Dial-In Number 312.470.7065
Leader John Seaberg
Passcode Newmont
Replay Number 866.462.8985
Intl Replay Number 203.369.1370
Replay Passcode 2011
Webcast Details
---------------
URL http://www.newmont.com/our-investors
The Third Quarter 2011 results and related financial and statistical information will be available prior to market open onOctober 28, 2011 on the “Investor Relations” section of the Company’s web site, www.newmont.com. Additionally, the conference call will be archived for a limited time on the Company’s website.
Cautionary Statement
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 2010 Annual Report on Form 10-K, filed on February 24, 2011, 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.
