Stock Name: NMC
Amount: CAD 0.35
Announcement Date: 26/07/2012
Record Date: 04/09/2012
Dividend Detail:
Quarterly Dividend of $0.35 per share up 17% from Prior Year Quarter
This release should be read in conjunction with Newmont's Second Quarter 2012 Form 10-Q filed with the Securities and Exchange Commission on July 26, 2012 (available at www.newmont.com).
DENVER, July 26, 2012 /CNW/ - Newmont Mining Corporation (NYSE: NEM) ("Newmont" or the "Company") today reported attributable net income from continuing operations of $279 million, or $0.56 per share, down 47% from $523 million, or $1.06 per share in the second quarter of 2011. Adjusted net income(1) was $294 million, or $0.59 per share, compared with $445 million, or $0.90 per share, for the prior year quarter.
Quarter Highlights:
- Sales revenue of $2.2 billion, a decrease of 6% from the prior year quarter;
- Average realized gold and copper price of $1,598 per ounce and $2.85 per pound, up 6% and down 25%, respectively, from the prior year quarter;
- Attributable gold and copper production of 1.18 million ounces and 38 million pounds, down 3% and 10%, respectively, from the prior year quarter; attributable gold and copper sales of 1.14 million ounces and 29 million pounds, down 6% and 35%, respectively, from the prior year quarter;
- Gold and copper costs applicable to sales ("CAS") of $681 per ounce and $2.35 per pound, up 17% and 75%, respectively, from the prior year quarter;
- Cash flow from continuing operations of $351 million, down 15% from the prior year quarter;
- Third quarter gold price-linked dividend payable of $0.35 per share, up 17% from the prior year quarter; and
- 2012 attributable gold production outlook narrowed to 5.0 to 5.1 million ounces, maintaining CAS outlook of $625 to $675 per ounce, and reducing outlook for attributable capital expenditures to $2.7 billion to $3.0 billion.
"Globally, our portfolio continues to perform in line with our budget. As expected, our second quarter gold production was impacted by annual planned mill maintenance in Nevada and lower gold and copper production from Batu Hijau in Indonesia, as we continue with the planned stripping of Phase 6," said Richard O'Brien, Chief Executive Officer. "Our capital expenditures are expected to be approximately $300 million lower than originally planned for the year, largely as a result of our slower development timetable at Conga in Peru. We also expect our advanced projects, exploration and G&A expenditures to collectively be approximately $100 million lower this year. As we continue to optimize and refine our plans, we expect to deliver further efficiencies and cost savings for 2013 and beyond," added Mr. O'Brien.
(1) Non-GAAP measure. See page 10 for reconciliation.
Newmont is narrowing its previously announced 2012 outlook for attributable gold production to 5.0 to 5.1 million ounces (from 5.0 to 5.2 million ounces), and narrowing its outlook on attributable copper production to 145 to 165 million pounds (from 150 to 170 million pounds). The lower attributable gold production outlook is due to lower tons mined at Tanami. The Company is maintaining its original outlook for gold and copper CAS of between $625 and $675 per ounce (on a co-product basis) and $1.80 and $2.20 per pound, respectively.
Newmont is also revising its 2012 attributable capital expenditure outlook to $2.7 to $3.0 billion (from $3.0 to $3.3 billion), or $3.3 to $3.6 billion (from $3.7 to $4.0 billion) on a consolidated basis. This revision is primarily due to the deferral of development of the Conga project in Peru. As previously disclosed, the Company will take a slower development approach on the Conga project with a focus on the construction of reservoirs for downstream communities. Construction of Conga and the implementation of the independent EIA review recommendations will continue provided it can be done in a safe manner with risk-adjusted returns that justify future investment.
As previously announced, Newmont's Board of Directors approved a third quarter gold price-linked dividend payable of $0.35 per share(2) based upon the average London P.M. Gold Fix for the second quarter.
Operations
North America
Nevada ��� Attributable gold production in Nevada was 378,000 ounces at CAS of $718 per ounce during the second quarter. Gold production increased 6% from the prior year quarter due to higher throughput at Mill 6, partially offset by lower grade at Midas and Phoenix. CAS per ounce increased 13% due to higher underground mining costs, higher royalties and lower by-product credits. The Company is narrowing its outlook for 2012 attributable gold production from Nevada to 1.730 to 1.775 million ounces, and continues to expect CAS of between $575 and $625 per ounce.
La Herradura ��� Attributable gold production at La Herradura in Mexico was 59,000 ounces at CAS of $569 per ounce during the second quarter. Gold production increased 11% from the prior year quarter due to higher leach placement as Noche Buena commenced production during the first quarter of 2012. CAS increased 11% from the prior year quarter due to higher waste tons mined, higher diesel and higher employee profit sharing costs. The Company is narrowing its outlook for 2012 attributable gold production from La Herradura to 220,000 to 230,000 ounces at CAS of between $460 and $510 per ounce.
South America
Yanacocha ��� Attributable gold production at Yanacocha in Peru was 200,000 ounces at CAS of $466 per ounce during the second quarter. Gold production increased 14% from the prior year quarter due to higher mill grade and recovery, partially offset by lower leach placement. CAS per ounce decreased 14% from the prior year quarter due to higher production and lower mining costs, partially offset by higher workers' participation costs and lower by-product credits. The Company is narrowing its outlook for 2012 attributable gold production from Yanacocha to 675,000 to 700,000 ounces at CAS of between $475 and $525 per ounce.
La Zanja ��� Attributable gold production during the second quarter at La Zanja in Peru was approximately 13,000 ounces. The Company is narrowing its outlook for 2012 attributable gold production from La Zanja to 50,000 to 60,000 ounces.
(2) Payable on September 28, 2012 to shareholders of record as of September 6, 2012.
Asia Pacific
Boddington ��� Attributable gold and copper production during the second quarter at Boddington in Australia was 180,000 ounces and 18 million pounds, respectively, at CAS of $947 per ounce and $2.79 per pound, respectively. Gold ounces produced were 10% lower than the prior year due to lower mill grade and recovery, partially offset by higher mill throughput. Gold CAS increased 48% due to lower gold production and higher milling costs. Copper pounds produced increased 20% from the prior year quarter due to higher mill throughput and grade, partially offset by lower recovery. CAS per pound increased 44% from the prior year quarter due to higher milling costs, partially offset by higher copper production. The Company is narrowing its outlook for 2012 attributable gold production to 750,000 to 775,000 ounces at CAS of between $800 and $850 per ounce and is maintaining outlook for attributable copper production of 70 to 80 million pounds at CAS of between $2.00 and $2.25 per pound.
Batu Hijau ��� Attributable gold and copper production during the second quarter at Batu Hijau in Indonesia was 8,000 ounces and 20 million pounds, respectively, at CAS of $943 per ounce and $2.20 per pound, respectively. Gold and copper production decreased 68% and 25%, respectively, from the prior year quarter due to processing lower grade stockpile ore. Waste tons mined increased 14% as Phase 6 waste removal continues as planned. CAS per ounce and per pound increased 92% and 79%, respectively, due to lower production and higher waste mining costs, partially offset by an increase in concentrate inventory. The Company is narrowing its outlook for 2012 attributable gold production to 30,000 to 40,000 ounces at CAS of between $925 and $975 per ounce and attributable copper production of 75 to 85 million pounds at CAS of between $1.80 and $2.20 per pound.
Other Australia/New Zealand ��� Attributable gold production during the second quarter was 207,000 ounces at CAS of $880 per ounce. Attributable gold ounces produced decreased 15% from the prior year quarter due to lower underground mining rates at Tanami and a delay in open pit ore production at Waihi, partially offset by higher throughput and grade at Jundee. CAS per ounce increased 38% from the prior year quarter due to lower production, higher operating costs driven by higher power prices and a stronger Australian dollar, net of hedging gains. The Company is narrowing its outlook for 2012 attributable gold production to 950,000 to 990,000 ounces at CAS of between $810 and $860 per ounce.
Africa
Ahafo ��� Attributable gold production during the first quarter at Ahafo in Ghana was 132,000 ounces at CAS of $583 per ounce. Gold production decreased 10% from the prior year quarter due to lower mill throughput and grade, partially offset by higher recovery. CAS per ounce increased 31% from the prior year quarter due to lower production and higher labor, diesel and mine maintenance costs. The Company is narrowing its outlook for 2012 attributable gold production to 555,000 to 570,000 ounces at CAS of between $550 and $600 per ounce.
Capital Update
Consolidated capital expenditures were $882 million during the second quarter. Newmont is revising its 2012 attributable capital expenditure outlook to $2.7 to $3.0 billion (from $3.0 to $3.3 billion), or $3.3 to $3.6 billion (from $3.7 to $4.0 billion) on a consolidated basis. This revision is primarily due to the deferral of development on the Conga project in Peru. For the remainder of the year, 50% of 2012 consolidated capital expenditures are expected to be associated with major projects, while the remaining 50% is expected to be sustaining capital.
2012 Outlook- Q2 Update
2012 Production, CAS and Capital Outlook | ||||
Attributable Production | Consolidated CAS | Consolidated Capital | Attributable Capital | |
Region | (Kozs, Mlbs) | ($/oz, $/lb) | Expenditures ($M) | Expenditures ($M) |
Nevada | 1,730 - 1,775 | $575 - $625 | $750 - $800 | $750 - $800 |
La Herradura | 220 - 230 | $460 - $510 | $80 - $130 | $80 - $130 |
North America | 1,950 - 2,005 | $570 - $630 | $850 - $900 | $850 - $900 |
Yanacocha | 675 - 700 | $475 - $525 | $530 - $580 | $270 - $310 |
La Zanja | 50 - 60 | n/a | - | - |
Conga | - | - | $500 - $600 | $250 - $300 |
South America | 725 - 760 | $475 - $525 | $1,100 - $1,200 | $550 - $600 |
Boddington | 750 - 775 | $800 - $850 | $150 - $200 | $150 - $200 |
Other Australia/NZ | 950 - 990 | $810 - $860 | $325 - $375 | $325 - $375 |
Batu Hijaud | 30 - 40 | $925 - $975 | $200 - $225 | $100 - $125 |
Asia Pacific | 1,730 - 1,805 | $800 - $850 | $700 - $800 | $600 - $700 |
Ahafo | 555 - 570 | $550 - $600 | $240 - $270 | $240 - $270 |
Akyem | - | - | $370 - $420 | $370 - $420 |
Africa | 555 - 570 | $550 - $600 | $600 - $700 | $600 - $700 |
Corporate/Other | - | - | $55 - $65 | $55 - $65 |
Total Gold | 5,000 - 5,100 | $625 - $675 a,b | $3,300 - $3,600 c | $2,700 - $3,000 |
Boddington | 70 - 80 | $2.00 - $2.25 | - | - |
Batu Hijaud | 75 - 85 | $1.80 - $2.20 | - | - |
Total Copper | 145 - 165 | $1.80 - $2.20 | ||
a 2012 Attributable CAS Outlook is $640 - $690 per ounce. |
b 2012 Net Attributable CAS Outlook (inclusive of by-product credits) is $600 - $650 per ounce. |
cIncludes capitalized interest of approximately $140 million. |
d Assumes Batu Hijau economic interest of 48.5% for 2012, subject to final divestiture obligations. |
2012 Outlook and Assumptions | ||
Description | Consolidated Expenses ($M) | Attributable Expenses ($M) |
General & Administrative | $200 - $220 | $200 - $220 |
Interest Expense | $240 - $260 | $230 - $250 |
DD&A | $1,050 - $1,080 | $890 - $920 |
Exploration Expense | $360 - $390 | $320 - $350 |
Advanced Projects & R&D | $425 - $475 | $375 - $400 |
Tax Rate | 30% - 32% | 30% - 32% |
Assumptions | ||
Gold Price ($/ounce) | $1,500 | $1,500 |
Copper Price ($/pound) | $3.50 | $3.50 |
Oil Price ($/barrel) | $90 | $90 |
AUD Exchange Rate | $1.00 | 1.00 |
NEWMONT MINING CORPORATION | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
(unaudited, in millions except per share) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | June 30, | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Sales | $ | 2,229 | $ | 2,384 | $ | 4,912 | $ | 4,849 | |||||
Costs and expenses | |||||||||||||
Costs applicable to sales | 1,002 | 917 | 2,019 | 1,857 | |||||||||
Amortization | 248 | 250 | 479 | 506 | |||||||||
Reclamation and remediation | 16 | 43 | 32 | 57 | |||||||||
Exploration | 106 | 89 | 194 | 151 | |||||||||
Advanced projects, research and development | 82 | 86 | 184 | 154 | |||||||||
General and administrative | 57 | 50 | 111 | 95 | |||||||||
Other expense, net | 126 | 87 | 246 | 160 | |||||||||
1,637 | 1,522 | 3,265 | 2,980 | ||||||||||
Other income (expense) | |||||||||||||
Other income, net | 36 | 48 | 69 | 79 | |||||||||
Interest expense, net | (71) | (63) | (123) | (128) | |||||||||
(35) | (15) | (54) | (49) | ||||||||||
Income before income and mining tax and other items | 557 | 847 | 1,593 | 1,820 | |||||||||
Income and mining tax expense | (175) | (187) | (518) | (492) | |||||||||
Equity income (loss) of affiliates | (11) | - | (30) | 2 | |||||||||
Income from continuing operations | 371 | 660 | 1,045 | 1,330 | |||||||||
Loss from discontinued operations | - | (136) | (71) | (136) | |||||||||
Net income | 371 | 524 | 974 | 1,194 | |||||||||
Net income attributable to noncontrolling interests | (92) | (137) | (205) | (293) | |||||||||
Net income attributable to Newmont stockholders | $ | 279 | $ | 387 | $ | 769 | $ | 901 | |||||
Net income attributable to Newmont stockholders: | |||||||||||||
Continuing operations | $ | 279 | $ | 523 | $ | 840 | $ | 1,037 | |||||
Discontinued operations | - | (136) | (71) | (136) | |||||||||
$ | 279 | $ | 387 | $ | 769 | $ | 901 | ||||||
Income per common share | |||||||||||||
Basic: | |||||||||||||
Continuing operations | $ | 0.56 | $ | 1.06 | $ | 1.69 | $ | 2.10 | |||||
Discontinued operations | - | (0.28) | (0.14) | (0.28) | |||||||||
$ | 0.56 | $ | 0.78 | $ | 1.55 | $ | 1.82 | ||||||
Diluted: | |||||||||||||
Continuing operations | $ | 0.56 | $ | 1.04 | $ | 1.67 | $ | 2.07 | |||||
Discontinued operations | - | (0.27) | (0.14) | (0.27) | |||||||||
$ | 0.56 | $ | 0.77 | $ | 1.53 | $ | 1.80 | ||||||
Cash dividends declared per common share | $ | 0.35 | $ | 0.20 | $ | 0.70 | $ | 0.35 | |||||
NEWMONT MINING CORPORATION | ||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(unaudited, in millions) | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||
Operating activities: | ||||||||||||||
Net income | $ | 371 | $ | 524 | $ | 974 | $ | 1,194 | ||||||
Adjustments: | ||||||||||||||
Amortization | 248 | 250 | 479 | 506 | ||||||||||
Loss from discontinued operations | - | 136 | 71 | 136 | ||||||||||
Reclamation and remediation | 16 | 43 | 32 | 57 | ||||||||||
Deferred income taxes | 67 | (5) | 12 | (38) | ||||||||||
Stock based compensation and other non-cash benefits | 19 | 25 | 36 | 44 | ||||||||||
Impairment of marketable securities | 8 | 1 | 32 | 1 | ||||||||||
Gain on asset sales, net | - | (50) | (10) | (53) | ||||||||||
Other operating adjustments and write-downs | 34 | 51 | 106 | 96 | ||||||||||
Net change in operating assets and liabilities | (412) | (561) | (768) | (540) | ||||||||||
Net cash provided from continuing operations | 351 | 414 | 964 | 1,403 | ||||||||||
Net cash used in discontinued operations | (4) | (2) | (8) | (2) | ||||||||||
Net cash provided from operations | 347 | 412 | 956 | 1,401 | ||||||||||
Investing activities: | ||||||||||||||
Additions to property, plant and mine development | (882) | (618) | (1,578) | (1,020) | ||||||||||
Sale of marketable securities | 106 | 55 | 106 | 55 | ||||||||||
Purchases of marketable securities | (53) | (3) | (196) | (15) | ||||||||||
Acquisitions, net | (11) | (2,284) | (22) | (2,291) | ||||||||||
Proceeds from sale of other assets | 1 | - | 13 | 6 | ||||||||||
Other | (20) | (12) | (37) | (15) | ||||||||||
Net cash used in investing activities | (859) | (2,862) | (1,714) | (3,280) | ||||||||||
Financing activities: | ||||||||||||||
Proceeds from debt, net | (3) | 775 | 3,343 | 775 | ||||||||||
Repayment of debt | (34) | (942) | (1,941) | (973) | ||||||||||
Payment of conversion premium on debt | - | - | (172) | - | ||||||||||
Dividends paid to common stockholders | (174) | (99) | (347) | (173) | ||||||||||
Dividends paid to noncontrolling interests | (3) | (2) | (3) | (17) | ||||||||||
Proceeds from stock issuance, net | 13 | 5 | 15 | 8 | ||||||||||
Other | 1 | - | (1) | - | ||||||||||
Net cash provided from (used in) financing activities | (200) | (263) | 894 | (380) | ||||||||||
Effect of exchange rate changes on cash | (3) | 35 | 1 | 58 | ||||||||||
Net change in cash and cash equivalents | (715) | (2,678) | 137 | (2,201) | ||||||||||
Cash and cash equivalents at beginning of period | 2,612 | 4,533 | 1,760 | 4,056 | ||||||||||
Cash and cash equivalents at end of period | $ | 1,897 | $ | 1,855 | $ | 1,897 | $ | 1,855 | ||||||
NEWMONT MINING CORPORATION | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(unaudited, in millions) | |||||||
At June 30, | At December 31, | ||||||
2012 | 2011 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 1,897 | $ | 1,760 | |||
Trade receivables | 290 | 300 | |||||
Accounts receivable | 359 | 320 | |||||
Investments | 132 | 94 | |||||
Inventories | 803 | 714 | |||||
Stockpiles and ore on leach pads | 798 | 671 | |||||
Deferred income tax assets | 255 | 396 | |||||
Other current assets | 738 | 1,133 | |||||
Current assets | 5,272 | 5,388 | |||||
Property, plant and mine development, net | 16,936 | 15,881 | |||||
Investments | 1,185 | 1,472 | |||||
Stockpiles and ore on leach pads | 2,579 | 2,271 | |||||
Deferred income tax assets | 1,686 | 1,605 | |||||
Other long-term assets | 1,002 | 857 | |||||
Total assets | $ | 28,660 | $ | 27,474 | |||
LIABILITIES | |||||||
Debt | $ | 40 | $ | 689 | |||
Accounts payable | 574 | 561 | |||||
Employee-related benefits | 293 | 307 | |||||
Income and mining taxes | 173 | 250 | |||||
Other current liabilities | 1,287 | 2,133 | |||||
Current liabilities | 2,367 | 3,940 | |||||
Debt | 6,088 | 3,624 | |||||
Reclamation and remediation liabilities | 1,270 | 1,169 | |||||
Deferred income tax liabilities | 2,056 | 2,147 | |||||
Employee-related benefits | 487 | 459 | |||||
Other long-term liabilities | 403 | 364 | |||||
Total liabilities | 12,671 | 11,703 | |||||
EQUITY | |||||||
Common stock | 786 | 784 | |||||
Additional paid-in capital | 8,291 | 8,408 | |||||
Accumulated other comprehensive income | 361 | 652 | |||||
Retained earnings | 3,474 | 3,052 | |||||
Newmont stockholders' equity | 12,912 | 12,896 | |||||
Noncontrolling interests | 3,077 | 2,875 | |||||
Total equity | 15,989 | 15,771 | |||||
Total liabilities and equity | $ | 28,660 | $ | 27,474 | |||
Regional Operating Statistics | |||||||
Production Statistics Summary | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2012 | 2011 | 2012 | 2011 | ||||
Gold | |||||||
Consolidated ounces produced (thousands): | |||||||
North America | |||||||
Nevada | 378 | 357 | 813 | 790 | |||
La Herradura | 59 | 53 | 113 | 102 | |||
437 | 410 | 926 | 892 | ||||
South America | |||||||
Yanacocha | 390 | 342 | 756 | 630 | |||
Asia Pacific | |||||||
Boddington | 180 | 201 | 342 | 364 | |||
Batu Hijau | 16 | 50 | 38 | 143 | |||
Other Australia/New Zealand | 207 | 244 | 472 | 543 | |||
403 | 495 | 852 | 1,050 | ||||
Africa | |||||||
Ahafo | 132 | 146 | 307 | 332 | |||
1,362 | 1,393 | 2,841 | 2,904 | ||||
Copper | |||||||
Consolidated pounds produced (millions): | |||||||
Asia Pacific | |||||||
Boddington | 18 | 15 | 32 | 28 | |||
Batu Hijau | 42 | 56 | 85 | 141 | |||
60 | 71 | 117 | 169 | ||||
Gold | |||||||
Attributable ounces produced (thousands): | |||||||
North America | |||||||
Nevada | 378 | 357 | 813 | 790 | |||
La Herradura | 59 | 53 | 113 | 102 | |||
437 | 410 | 926 | 892 | ||||
South America | |||||||
Yanacocha | 200 | 175 | 388 | 323 | |||
Other South America Equity Interests | 13 | 18 | 26 | 30 | |||
213 | 193 | 414 | 353 | ||||
Asia Pacific | |||||||
Boddington | 180 | 201 | 342 | 364 | |||
Batu Hijau | 8 | 25 | 19 | 69 | |||
Other Australia/New Zealand | 207 | 244 | 472 | 543 | |||
Other Asia Pacific Equity Interests | 5 | 4 | 9 | 8 | |||
400 | 474 | 842 | 984 | ||||
Africa | |||||||
Ahafo | 132 | 146 | 307 | 332 | |||
1,182 | 1,223 | 2,489 | 2,561 | ||||
Copper | |||||||
Attributable pounds produced (millions): | |||||||
Asia Pacific | |||||||
Boddington | 18 | 15 | 32 | 28 | |||
Batu Hijau | 20 | 27 | 41 | 68 | |||
38 | 42 | 73 | 96 | ||||
CAS and Capital Expenditures | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Gold | ||||||||||||
Costs Applicable to Sales ($/ounce)(1) | ||||||||||||
North America | ||||||||||||
Nevada | $ | 718 | $ | 636 | $ | 663 | $ | 640 | ||||
La Herradura | 569 | 514 | 574 | 456 | ||||||||
697 | 620 | 652 | 619 | |||||||||
South America | ||||||||||||
Yanacocha | 466 | 545 | 462 | 561 | ||||||||
Asia Pacific | ||||||||||||
Boddington | 947 | 641 | 862 | 620 | ||||||||
Batu Hijau | 943 | 490 | 924 | 384 | ||||||||
Other Australia/New Zealand | 880 | 638 | 812 | 595 | ||||||||
911 | 620 | 837 | 570 | |||||||||
Africa | ||||||||||||
Ahafo | 583 | 446 | 575 | 449 | ||||||||
Average | $ | 681 | $ | 583 | $ | 649 | $ | 570 | ||||
Attributable to Newmont | $ | 711 | $ | 588 | $ | 672 | $ | 575 | ||||
Copper | ||||||||||||
Costs Applicable to Sales ($/pound)(1) | ||||||||||||
Asia Pacific | ||||||||||||
Boddington | $ | 2.79 | $ | 1.94 | $ | 2.34 | $ | 2.06 | ||||
Batu Hijau | 2.20 | 1.23 | 2.08 | 1.07 | ||||||||
Average | $ | 2.35 | $ | 1.34 | $ | 2.14 | $ | 1.21 | ||||
Attributable to Newmont | $ | 2.40 | $ | 1.41 | $ | 2.17 | $ | 1.32 | ||||
(1) Consolidated Costs applicable to sales excludes Amortization and Reclamation and remediation. | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Consolidated Capital Expenditures ($ million) | ||||||||||||
North America | ||||||||||||
Nevada | $ | 213 | $ | 133 | $ | 370 | $ | 228 | ||||
La Herradura | 8 | 11 | 29 | 27 | ||||||||
Other North America | - | 22 | - | 41 | ||||||||
221 | 166 | 399 | 296 | |||||||||
South America | ||||||||||||
Yanacocha | 150 | 86 | 243 | 127 | ||||||||
Conga | 195 | 187 | 342 | 251 | ||||||||
345 | 273 | 585 | 378 | |||||||||
Asia Pacific | ||||||||||||
Boddington | 29 | 26 | 52 | 75 | ||||||||
Batu Hijau | 28 | 48 | 61 | 88 | ||||||||
Other Australia/New Zealand | 67 | 72 | 137 | 134 | ||||||||
Other Asia Pacific | 5 | 2 | 8 | 4 | ||||||||
129 | 148 | 258 | 301 | |||||||||
Africa | ||||||||||||
Ahafo | 58 | 22 | 108 | 37 | ||||||||
Akyem | 104 | 39 | 189 | 67 | ||||||||
162 | 61 | 297 | 104 | |||||||||
Corporate and Other | (1) | 4 | 37 | 18 | ||||||||
Total - Accrual Basis | $ | 856 | $ | 652 | $ | 1,576 | $ | 1,097 | ||||
Change in Capital Accrual | 26 | (34) | 2 | (77) | ||||||||
Total - Cash Basis | $ | 882 | $ | 618 | $ | 1,578 | $ | 1,020 | ||||
Attributable to Newmont (Accrual Basis) | $ | 674 | $ | 494 | $ | 1,260 | $ | 868 | ||||
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 ended | Six months ended | |||||
June 30, | June 30, | |||||
(in millions except per share, after-tax) | 2012 | 2011 | 2012 | 2011 | ||
GAAP Net income | $ 279 | $ 387 | $ 769 | $ 901 | ||
Impairment of Hope Bay assets | - | - | - | - | ||
Other impairments/asset sales | 7 | (30) | 24 | (32) | ||
Fronteer acquisition costs | - | 17 | - | 18 | ||
Boddington contingent consideration | 8 | - | 8 | - | ||
PTNNT community contribution | - | - | - | - | ||
Income tax planning, net | - | (65) | - | (65) | ||
Loss from discontinued operations | - | 136 | 71 | 136 | ||
Adjusted net income | $ 294 | $ 445 | $ 872 | $ 958 | ||
Net income per share, basic | $0.56 | $0.78 | $1.55 | $1.82 | ||
Adjusted net income per share, basic | $0.59 | $0.90 | $1.76 | $1.94 | ||
Adjusted net income per share, diluted | $0.59 | $0.89 | $1.74 | $1.91 | ||
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 June 30, | Six Months Ended June 30, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Costs applicable to sales: | |||||||||||
Consolidated | $ | 894 | $ | 811 | $ | 1,796 | $ | 1,634 | |||
Noncontrolling interests (1) | (96) | (111) | (187) | (205) | |||||||
Attributable to Newmont | $ | 798 | $ | 700 | $ | 1,609 | $ | 1,429 | |||
Gold sold (000 ounces): | |||||||||||
Consolidated | 1,313 | 1,391 | 2,768 | 2,869 | |||||||
Noncontrolling interests (1) | (191) | (201) | (373) | (383) | |||||||
Attributable to Newmont | 1,122 | 1,190 | 2,395 | 2,486 | |||||||
Costs applicable to sales per ounce: | |||||||||||
Consolidated | $ | 681 | $ | 583 | $ | 649 | $ | 570 | |||
Attributable to Newmont | $ | 711 | $ | 588 | $ | 672 | $ | 575 | |||
Costs applicable to sales per pound | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Costs applicable to sales: | |||||||||||
Consolidated | $ | 108 | $ | 106 | $ | 223 | $ | 223 | |||
Noncontrolling interests (1) | (36) | (41) | (80) | (87) | |||||||
Attributable to Newmont | $ | 72 | $ | 65 | $ | 143 | $ | 136 | |||
Copper sold (million lbs): | |||||||||||
Consolidated | 46 | 79 | 104 | 184 | |||||||
Noncontrolling interests (1) | (16) | (33) | (38) | (81) | |||||||
Attributable to Newmont | 30 | 46 | 66 | 103 | |||||||
Costs applicable to sales per pound: | |||||||||||
Consolidated | $ | 2.35 | $ | 1.34 | $ | 2.14 | $ | 1.21 | |||
Attributable to Newmont | $ | 2.40 | $ | 1.41 | $ | 2.17 | $ | 1.32 | |||
Net attributable costs applicable to sales per ounce | |||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Attributable costs applicable to sales: | |||||||||||
Gold | $ | 798 | $ | 700 | $ | 1,609 | $ | 1,429 | |||
Copper | 72 | 65 | 143 | 136 | |||||||
$ | 870 | $ | 765 | $ | 1,752 | $ | 1,565 | ||||
Copper revenue: | |||||||||||
Consolidated | $ | (130) | $ | (296) | $ | (363) | $ | (718) | |||
Noncontrolling interests (1) | 45 | 125 | 134 | 315 | |||||||
(85) | (171) | (229) | (403) | ||||||||
Net attributable costs applicable to sales | $ | 785 | $ | 594 | $ | 1,523 | $ | 1,162 | |||
Attributable gold ounces sold (thousands) | 1,122 | 1,190 | 2,395 | 2,486 | |||||||
Net attributable costs applicable to sales per ounce | $ | 700 | $ | 499 | $ | 636 | $ | 467 | |||
(1) Relates to partners' interests in Batu Hijau and Yanacocha. | |||||||||||
Conference Call Information
A conference call will be held on Friday, July 27, 2012 at 10:00 a.m. Eastern Time (8:00 a.m. Mountain Time); it will also be carried on the Company's website.
Conference Call Details | ||||
Dial-In Number | 888.566.1822 | |||
Intl Dial-In Number | 312.470.7116 | |||
Leader | John Seaberg | |||
Passcode | Newmont | |||
Replay Number | 800.294.3093 | |||
Intl Replay Number | 203.369.3228 | |||
Replay Passcode | 2012 | |||
Webcast Details | ||||
URL | http://services.choruscall.com/links/newmont120727.html | |||
Please download the free Newmont Investor Relations iPad application from the Apple Online App Store, keyword search "Newmont".
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 and expectations regarding the Company's strategy and plans; (ii) estimates of future mineral production and sales; (iii) estimates of future operating costs, costs applicable to sales and other costs; (iv) estimates of future capital expenditures and consolidated advanced projects, research and development expenditures; and (v) the Company's exploration pipeline and expectations regarding the development, growth and exploration potential of the Company's projects, including project start dates, ramp up, life, pipeline timelines (including commencement of mining, drilling and stage gate advancement and expansion opportunities) and expected project returns; (vi) potential ounces or tons of reserves, non-reserve mineralization and potential resources; (vii) dividend payments and increases; (viii) future liquidity, cash and balance sheet expectations; and (ix) other financial outlook for the Company's operations and 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, social and legal 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 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 such supplies otherwise being available on bases consistent with the Company's current expectations; and (vii) the accuracy of our current mineral reserve and mineral resource estimates and exploration information. 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: (i) gold and other metals price volatility; (ii) currency fluctuations; (iii) increased capital and operating costs and scarcity of competition for required labor and supplies; (iv) variances in ore grade or recovery rates from those assumed in mining plans; (v) political and operational risks; (vi) community relations, conflict resolution and outcome of projects or oppositions; and (vii) governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company's 2011 Annual Report on Form 10-K, filed on February 24, 2012, 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.
SOURCE: Newmont Mining Corporation
For further information:
Media, Omar Jabara, +1-303-837-5114, omar.jabara@newmont.com. or Diane Reberger +1-303-967-9455, diane.reberger@newmont.com, or Investor, John Seaberg +1-303-837-5743, john.seaberg@newmont.com, or Karli Anderson, +1-303-837-6049, karli.anderson@newmont.com
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