NEWMONT MINING POSTS OUTSTANDING 4TH QUARTER EARNINGS
Jan 26, 2000 (AsiaPulse via COMTEX) -- $all $anr $min $id $us (Full
text of a statement. Contact details below.)
DENVER, Jan 27 Asia Pulse - Newmont Mining Corporation (NYSE: NEM)
earned $46.8 million, or 28 cents per share, in the fourth quarter of
1999. This reflects record production, an improvement in the gold price
and significant progress in the company's Gold Medal Performance
program to reduce costs and enhance cash flow. Earnings from operations
were US$49.7 million, or 30 cents per share.
In the final quarter of 1998, the company had operating earnings of
$7.6 million, or 5 cents per share, and a net loss of $421.4 million,
or $2.53 per share, after a one-time, non-cash charge.
Record production of 1.22 million equity ounces during the latest
quarter was up 23 percent from a year earlier. Total cash costs of $164
an ounce (versus $181) and total production costs of $211 an ounce
(versus $246) were significantly below those of a year ago and the
lowest in over a decade. While the company's average realized gold
price of $295 an ounce trailed that of the 1998 quarter by $5 an ounce,
it represented a $24 an ounce recovery from the 1999 third quarter,
when the gold price dropped to its lowest level in 20 years.
For all of 1999, Newmont produced a record 4.18 million ounces of gold
(up from 4.07 million ounces in 1998) at a total cash cost of $175 per
ounce (down from $183 in 1998). Operating earnings were $56.8 million,
or 34 cents per share, before non-recurring and non-cash items, while
net income after such items was $24.8 million, or 15 cents per share.
In 1998, net income before unusuals was $73.4 million, or 46 cents per
share, while the net loss, after one-time charges, was $393.4 million,
or $2.47 per share.
Operating cash flow in 1999 of $402 million, or $2.40 per share,
surpassed the prior year's $373.5 million, or $2.35 per share, despite
a $25 an ounce drop in the realized gold price to $285 from $310.
FOURTH QUARTER RESULTS Gold revenue for the three months ended December
31, 1999 rose 23 percent to $434.3 million from $351.9 million in the
1998 period.
Production from North American operations increased 14 percent to 764,
800 equity ounces of gold, while total cash costs were reduced $10 to
$203 per ounce. Nevada benefited from production of high-grade ore from
the Deep Post open pit deposit and from a 26 percent increase in
throughput at the refractory ore mills as implementation of Gold
Medal-inspired changes in operating procedures lifted tonnage above
design rates.
International operations produced 459,200 equity ounces of gold, a 42
percent increase from the 1998 quarter, as total cash costs fell $13 to
$99 per equity ounce. Yanacocha initiated owner mining during the
quarter. Better recovery rates lifted output at Zarafshan, while
Minahasa benefited from a higher mill grade and initial production from
Indonesia's first heap leach operation.
The Minahasa mine, in the province of North Sulawesi, is continuing to
operate despite a local court's ruling on January 22nd that the mine
should be closed for not paying a tax on removal of overburden. The
ruling cannot take effect unless affirmed by a higher court. The local
government has asserted a claim of approximately $3 million for taxes
due plus $5 million for consequential damages and attorney fees. The
company has been advised by its Indonesian counsel that the closure
ruling and related claims are totally unfounded and in contradiction
with its Contract of Work. The company will vigorously defend its
position.
Start-up of the large Batu Hijau copper/gold mine in Indonesia is
proceeding on schedule. The first shipment of 30,000 tonnes of
concentrate was made on December 13, an additional 50,000 tonnes will
be shipped by the end of this month. Sales in 1999 were 11,300 ounces
of gold (6,300 ounces attributable to Newmont's 56.25 percent economic
interest), and 18.2 million pounds of copper (10.2 million pounds for
Newmont's share).
Non-recurring items during the 1999 quarter included charges, net of
tax, of $3.5 million, or 2 cents per share, to terminate a mining
contract in Peru; $2.3 million, or 1 cent per share, to write off a
low-grade stockpile in Nevada, and $1.3 million, or 1 cent per share,
in start-up losses at Batu Hijau, partially offset by a gain of $4.2
million, or 2 cents per share, on the mark-to-market adjustment of the
company's written call options. In the 1998 quarter, net-of-tax charges
included $424.7 million, or $2.55 per share, to write-down the carrying
value of certain North American assets and $4.3 million, or 3 cents per
share, in Batu Hijau losses.
FULL YEAR RESULTS Gold revenue of $1.42 billion was essentially
unchanged from $1.45 billion in 1998 despite an 9 percent drop in the
realized gold price. Gold production rose 3 percent from the previous
record in 1998, while total cash costs were reduced $8 per ounce and
total production costs were trimmed $21 to $228 per ounce.
North American production of 2.70 million ounces compared with 2.94
million ounces produced in 1998 with the depletion of oxide ores in
Nevada and at the Mesquite mine in California. Total cash costs
declined to $208 per ounce from $211.
International operations posted a 30 percent production increase to
1.47 million equity ounces from 1.13 million ounces a year ago as each
site posted record output. Continued expansion at Yanacocha in Peru saw
total production increase to 1.66 million ounces (Newmont's equity
share 850,300 ounces); revised crushing standards and improved
recoveries lifted output from Zarafshan in Uzbekistan to 543,000 ounces
(Newmont's share 271,500), while Minahasa boosted its production to 343,
900 ounces. Total cash costs declined 6 percent to $114 per equity
ounce.
Depreciation, depletion and amortization declined $50 million to $239.6
million following the asset write-down in 1998, exploration expense was
trimmed $11 million to $57.5 million, while interest expense was
reduced $16 million to $62.6 million due to increased capitalized
interest at Batu Hijau. General and administrative expense increased
slightly to $52.7 million in response to the company's expanded global
reach and initiation of the Gold Medal Performance effort.
Non-recurring items in 1999 included, net of tax, a gain of $13.6
million, or 8 cents per share, from the sale of the True North and
Argentina Gold exploration properties, offset by charges of $10.7
million, or 7 cents per share, for the Batu Hijau loss; $3.5 million,
or 2 cents per share, from the Peru contract termination, and $2.3
million, or 1 cent per share, for the stockpile write-off. In addition,
a non-cash mark-to-market loss of $29.1 million, or 17 cents per share,
was taken on the company's forward call options. After-tax
non-operating charges in 1998, in addition to the asset impairment,
included $32.9 million, or 21 cents per share, to retroactively adopt a
new accounting standard expensing start-up costs, and $9.2 million, or
5 cents per share, for start-up losses at Batu Hijau.
Investments of $379.8 million during the year included capital
expenditures for new projects in Nevada and Peru and for final
construction at Batu Hijau. In 1998, such investments totaled $422.9
million.
During the year the company repaid $211 million in long-term debt,
including $137 million through a prepaid forward gold sale. At
year-end, the company had $55.3 million in cash on hand and long-term
debt of $1.04 billion, representing 40 percent of debt-to-total
capital. This compares with cash of $79.1 million and long-term debt of
$1.25 billion, or 44.9 percent of total capital, at year-end 1998.
OUTLOOK "We enter the new millennium in the strongest position in our
history," Cambre said. "Reserves have more than doubled over the past
five years, production has increased 150 percent, and total production
costs have been reduced $38 an ounce. Our target for 2000 of 4.5
million equity ounces of gold at a total cash cost of under $175 per
ounce is clearly achievable. Coupled with an anticipated rise in the
gold price, this will translate into a significant improvement in
earnings, cash flow and returns for our shareholders. Even at the
current gold price, operating cash flow is expected to increase at
least 15 percent from 1999."
Looking forward, growth in 2000 and beyond will come from ramping up
Batu Hijau to full production, bringing the La Quinua deposit at
Yanacocha into production, developing the Deep Post underground mine
and Gold Quarry expansion at Carlin, Nevada, and from the continued
success of the company's global exploration effort.
SOURCE Newmont Mining Corporation CONTACT: Media: Doug Hock,
303-837-5812, or Investors: Jack Morris, 303-837-5977, both of Newmont
Mining Corporation |
