Newmont Announces First Quarter 2013 Results Consolidated spending(1) down $217 million or 13% vs. prior year quarter; 2013 capital expenditure guidance lowered by $100 million

This release should be read in conjunction with Newmont's First Quarter 2013 Form 10-Q filed with the Securities and Exchange Commission on April 29, 2013 (available at www.newmont.com).

DENVER, April 29, 2013 /PRNewswire/ -- Newmont Mining Corporation (NYSE: NEM) ("Newmont" or the "Company") today reported attributable net income from continuing operations of $315 million, or $0.63 per basic share, down 44% from $561 million, or $1.13 per basic share in the first quarter of 2012. As previously reported, results for the first quarter of 2013 compared to the first quarter of 2012 were influenced by lower grade and recovery at Carlin and lower grade at Twin Creeks in Nevada, and shipping delays resulting in lower concentrate sales.  Adjusted net income2 was $354 million, or $0.71 per basic share, compared with $578 million, or $1.17 per basic share, for the prior year quarter.

Quarterly Highlights3

  • Attributable gold and copper production of 1.165 million ounces and 38 million pounds, down 11% and up 9%, respectively, from the prior year quarter; attributable gold and copper sales of 1.142 million ounces and 31 million pounds, down 11% and 16%, respectively, from the prior year quarter;
  • Attributable all-in sustaining costs1 down 7% or $92 million vs. prior year quarter;
  • Gold and copper costs applicable to sales ("CAS") of $758 per ounce and $2.19 per pound, up 22% and up 11%, respectively, from the prior year quarter;
  • Consolidated spending1 down $217 million, or 13% vs. prior year quarter;
  • Lowering 2013 capital expenditure guidance by $100 million;
  • Maintaining attributable gold and copper production and CAS guidance for the year; and
  • Second quarter dividend payable of $0.35 per share in accordance with the Company's gold-price-linked dividend policy and consistent with the prior year quarter.

"We made progress on our plans to build long-term shareholder value through disciplined capital allocation and cost and efficiency improvements," said Gary Goldberg, President and Chief Executive Officer.  "We cut planned 2013 capital expenditure guidance by $100 million and reduced our consolidated spending by $217 million compared to the first quarter of 2012. This drove our all-in sustaining cost per ounce to the lower end of guidance despite some production challenges. We continue to build on this and the $130 million savings we realized last year by streamlining operating and overhead costs and investing in more profitable production to improve shareholder returns. We expect first production at Akyem in Ghana later this year, and the ramp up Phase 6 ore mining at Batu Hijau in Indonesia late next year, to enhance free cash flow in 2014 and 2015," added Goldberg.

The Company continues to expect full year 2013 attributable gold and copper production of 4.8 – 5.1 million ounces and 150 – 170 million pounds, respectively.  Planned production is expected to increase in the second half of the year primarily as a result of greater mill throughput in Nevada and the ramp up of first production at Akyem in Ghana.

Newmont is lowering its 2013 attributable and consolidated capital expenditure outlook by $100 million to $2.0 to $2.2 billion, and to $2.3 to $2.5 billion, respectively.  

As previously announced, Newmont's Board of Directors approved a second quarter gold price-linked dividend in accordance with the Company's gold price-linked dividend policy of $0.35 per share4 based upon the average London P.M. Gold Fix for the first quarter. 

Operations

North America

Nevada – Attributable gold production in Nevada was 381,000 ounces at CAS of $774 per ounce during the first quarter. Gold production decreased 12% from the prior year quarter due to lower grade and recovery at Mill 5 and Mill 6 and lower grade at the Twin Creeks autoclave, partially offset by new production at Emigrant and higher throughput at Phoenix. CAS per ounce increased 25% due to lower ounces sold and lower capitalized mine development activities in 2013 compared to 2012.

The Company continues to expect 2013 attributable gold production of between 1.7 million and 1.8 million ounces at CAS of between $600 and $650 per ounce and is lowering its 2013 capital expenditure outlook range by $50 million to between $550 to $600 million, consolidated and attributable. The Board also recently approved full funding of $398 million for the Turf/Leevile vent shaft scheduled for completion in 2015.

La Herradura – Attributable gold production at La Herradura in Mexico was 55,000 ounces at CAS of $717 per ounce during the first quarter.  Gold production increased 2% from the prior year quarter due to higher leach placement and grade. CAS per ounce increased 23% due to mining additional waste tons compared to 2012.

The Company continues to expect 2013 attributable gold production of between 225,000 and 275,000 ounces at CAS of between $650 and $700 per ounce.

South America

Yanacocha – Attributable gold production at Yanacocha in Peru was 147,000 ounces at CAS of $568 per ounce during the first quarter. Gold production decreased 22% from the prior year quarter due to lower mill grade and lower leach ore placement from Chaquicocha. CAS per ounce increased 24% due to lower production and lower silver by-product credits.

The Company continues to expect 2013 attributable gold production of between 475,000 and 525,000 ounces at CAS of between $600 and $650 per ounce.

La Zanja – Attributable gold production during the first quarter at La Zanja in Peru was approximately 15,000 ounces. 

The Company continues to expect 2013 attributable gold production of between 40,000 and 50,000 ounces.

Australia/New Zealand

Boddington – Attributable gold and copper production during the first quarter at Boddington in Australia was 177,000 ounces and 18 million pounds, respectively, at CAS of $873 per ounce and $2.35 per pound, respectively.  Gold and copper production increased 9% and 29%, respectively, from the prior year quarter due to higher mill grade. CAS increased 12% per ounce and increased 21% per pound from the prior year quarter due to a higher strip ratio, higher mill maintenance costs, and the impact of the carbon tax which took effect in July 2012. Copper costs applicable to sales were also affected by the higher co-product cost allocated to copper compared to the prior year quarter.

The Company continues to expect 2013 attributable gold production of between 700,000 and 750,000 ounces at CAS of between $850 and $950 per ounce and attributable copper production of between 70 and 80 million pounds at CAS of between $2.45 and $2.65 per pound.

Other Australia/New Zealand – Attributable gold production5 during the first quarter was 258,000 ounces at CAS of $962 per ounce. Gold production decreased 4% from the prior year quarter due to lower mill grade at Jundee, Kalgoorlie, and Tanami coupled with lower throughput at Tanami and partly offset by higher throughput at Waihi. CAS per ounce increased 27% primarily due to lower production, higher operating costs, and the impact of the carbon tax.

The Company continues to expect 2013 attributable gold production of between 925,000 and 975,000 ounces at CAS of between $950 and $1,050 per ounce and is lowering its 2013 capital expenditure outlook range by $25 million to between $200 to $250 million, consolidated and attributable.

Indonesia

Batu Hijau – Attributable gold and copper production during the first quarter at Batu Hijau in Indonesia was 7,000 ounces and 20 million pounds, respectively, at CAS of $993 per ounce and $2.05 per pound, respectively. Gold and copper production decreased 36% and 5%, respectively, due to lower grade and recovery as a result of processing lower grade stockpiled material as Phase 6 stripping continues. CAS increased 9% per ounce and 3% per pound, respectively, due to lower production partially offset by lower mill maintenance costs.

The Company continues to expect 2013 attributable gold production of between 20,000 and 30,000 ounces at CAS of between $900 and $1,000 per ounce and attributable copper production of between 75 and 90 million pounds at CAS of between $2.20 and $2.40 per pound.

Africa

Ahafo – Attributable gold production during the first quarter at Ahafo in Ghana was 125,000 ounces at CAS of $555 per ounce. Gold production decreased 29% from the prior year quarter due to an increase of in-process inventory and lower milled grade, partly offset by higher recovery. CAS per ounce decreased 2% from the prior year quarter due to lower mining and milling costs compared to the prior year quarter. 

The Company continues to expect 2013 attributable gold production at Ahafo of between 525,000 and 575,000 ounces at CAS of between $550 and $600 per ounce.

The Company is lowering its 2013 capital expenditure outlook range for Africa by $25 million to between $625 to $675 million, consolidated and attributable.

All-in Sustaining Costs Update

Consolidated spending is down $217 million, or 13% vs. prior year quarter. Consolidated all-in sustaining costs were $1,086 per ounce during the first quarter, or $1,115 per ounce on an attributable basis, due to lower gold and copper production, partially offset by lower advanced projects, exploration and sustaining capital spending. The Company continues to expect all-in sustaining costs of between $1,100 to $1,200 per ounce on both a consolidated and attributable basis for 2013.   

The following table reconciles this non-GAAP measure to the most directly comparable GAAP measure:

              

All-In Sustaining Costs ($M)

Three Months Ended March 31,





2013


2012



Cost applicable to sales 


1,044 



1,017



Advanced projects, research and development, and Exploration


111 



190



General and administrative


56 



54



Other expense, net(1)


46 



70



Sustaining capital(2)


238 



381



Consolidated Spending

$

1,495


$

1,712



Copper sales

$

(135)


$

(233)




Consolidated all-in sustaining costs

$

1,360 


$

1,479




Noncontrolling interests

$

(119)


$

(146)




Attributable all-in sustaining costs

$

1,241 


$

1,333












Gold ounces sold (thousands)









Consolidated


1,252 



1,455




Noncontrolling interests


(139)



(181)




Attributable(3)


1,113



1,274












All-in sustaining costs (per ounce)









Consolidated

$

1,086


$

1,016




Attributable

$

1,115


$

1,046












(1)

Other expense, net is adjusted for restructuring of $9 and TMAC transaction costs of $45 for 2013 and Hope Bay care and maintenance of $50 for 2012.





(2)

Excludes capital expenditures for development projects at Conga, Akyem, Phoenix Copper Leach, and Turf Vent Shaft for 2013 and 2012 and additionally, excludes Emigrant for 2012 only.                                    





(3)

Excludes attributable production from La Zanja and Duketon.

 

Capital Update

Capital expenditures in North America during the first quarter of 2013 were primarily related to the construction of the Phoenix Copper Leach project, the development of the Turf/Leeville vent shaft, surface and underground mine development in both Nevada and Mexico and infrastructure improvements in Nevada. Capital expenditures in South America were primarily related to the Conga and Merian projects, surface mine development and equipment purchases. The majority of capital expenditures in Australia and New Zealand were for underground mine development, tailings facility construction, mining equipment purchases and infrastructure improvements. Capital expenditures in Batu Hijau were primarily for equipment and equipment component purchases and infrastructure improvements. Capital expenditures in Africa were primarily related to Akyem development and the Subika expansion project, equipment purchases and surface mine development at Ahafo.

We remain focused on the progression of our next generation of mining projects. Approximately 40% of our 2013 capital expenditures will be allocated as development capital, including the Akyem project, the Phoenix Copper Leach project, the Ahafo Mill Expansion, the Conga project and other expansion projects in Nevada and at La Herradura, with the remaining 60% expected to be spent on sustaining capital. Additional capital investment is also possible at the Merian project in Suriname in 2013 pending the outcome of further dialogue with the government and project economic evaluation. We continue to manage our wider project portfolio to maintain flexibility to address the development risks associated with our projects including permitting, local community and government support, engineering and procurement availability, technical issues, escalating costs and other associated risks that could adversely impact the timing and costs of certain opportunities.

2013 Outlook6,7 

2013 Attributable Production, Consolidated CAS and Capital Outlook

Region

Attributable Production

(Kozs, Mlbs)

Consolidated CAS

($/oz, $/lb) b

Consolidated Capital

Expenditures ($M) c

Attributable Capital

Expenditures ($M)c

Nevada a

1,700 - 1,800

$600 - $650

$550 - $600

$550 - $600

La Herradura 

225 - 275

$650 - $700

$125 - $175

$125 - $175

  North America

1,950 - 2,050

$600 - $650

$700 - $750

$700 - $750

Yanacocha

475 - 525

$600 - $650

$225 - $275

$100 - $150

La Zanja

40 - 50

-

-

-

Conga

-

-

$250 - $300

$125 - $175

  South America

550 - 600

$600 - $650

$550 - $600

$250 - $300

Boddington

700 - 750

$850 - $950

$125 - $175

$125 - $175

Other Australia/NZ  

925 - 975

$950 - $1,050

$200 - $250

$200 - $250

 Australia/New Zealand

1,625 - 1,725

$900 - $1,000

$350 - $400

$350 - $400

 Batu Hijau, Indonesiad

20 - 30

$900 - $1,000

$75 - $125

$25 - $75

Ahafo

525 - 575

$550 - $600

$375 - $425

$375 - $425

Akyem

50 - 100

$450 - $500

$225 - $275

$225 - $275

  Africa

625 - 675

$525 - $575

$625 - $675

$625 - $675

Corporate/Other

-

-

$20 - $30

$20 - $30

Total Gold

4,800 - 5,100

$675 - $750

$2,300 - $2,500

$2,000 - $2,200

Boddington 

70 - 80

$2.45 - $2.65

-

-

Batu Hijau

75 - 90

$2.20 - $2.40

-

-

Total Copper

150 - 170

$2.25 - $2.50



aNevada CAS includes by-product credits from an estimated 30-40 million pounds of copper production at Phoenix, net of treatment and refining charges.

b 2013 Attributable CAS Outlook is $700 - $750 per ounce.

cExcludes capitalized interest of approximately $142 million, consolidated and attributable.

d Assumes Batu Hijau economic interest of 44.56% for 2013, subject to final divestiture obligations.

 

2013 Expense Outlook





Description

Consolidated

Expenses ($M)

Attributable

Expenses ($M)



General & Administrative

$200 - $250

$200 - $250


DD&A

$1,050 - $1,100

$850 - $900


Exploration Expense

$250 - $300

$225 - $275


Advanced Projects & R&D

$350 - $400

$300 - $350


Other Expense

$200 - $250

$150 - $200


Sustaining Capital

$1,400 - $1,500

$1,200 - $1,300


Interest Expense

$200 - $250

$175 - $225


Tax Rate

30% - 32%

30% - 32%


All-in sustaining cost ($/ounce)a,b,c

$1,100 - $1,200

$1,100 - $1,200


Key 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








a All-in sustaining cost is a non-GAAP metric defined by the Company as the sum of costs applicable to sales, copper by-product credits, G&A, exploration expense, advanced projects and R&D, other expense, and sustaining capital. 

b All-in sustaining cost per ounce is calculated by dividing all-in sustaining cost by the midpoint of estimated sales, less non-consolidated interests in La Zanja and Duketon and development ounces.

c The Company's methodology for calculating all-in sustaining costs was developed independently, and is subject to change due to a number of factors including the possible adoption of formal industry guidelines from the World Gold Council.

 

NEWMONT MINING CORPORATION










CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited, in millions except per share)














Three Months Ended




March 31,





2013


2012










Sales


$

2,177


$

2,683










Costs and expenses








Costs applicable to sales (1)



1,044



1,017


Amortization



267



231


Reclamation and remediation



18



16


Exploration 



59



88


Advanced projects, research and development



52



102


General and administrative 



56



54


Other expense, net



100



120






1,596



1,628

Other income (expense)








Other income, net



26



33


Interest expense, net 



(65)



(52)






(39)



(19)

Income before income and mining tax and other items



542



1,036

Income and mining tax expense



(181)



(343)

Equity income (loss) of affiliates 



(4)



(19)

Income from continuing operations 



357



674

Income (loss) from discontinued operations



-



(71)

Net income 



357



603

Net income attributable to noncontrolling interests



(42)



(113)

Net income attributable to Newmont stockholders 


$

315


$

490










Net income attributable to Newmont stockholders:








Continuing operations 


$

315


$

561


Discontinued operations 



-



(71)





$

315


$

490

Income per common share








Basic:









Continuing operations 


$

0.63


$

1.13



Discontinued operations 



-



(0.14)




$

0.63


$

0.99


Diluted:









Continuing operations 


$

0.63


$

1.11



Discontinued operations 



-



(0.14)




$

0.63


$

0.97










Cash dividends declared per common share 


$

0.425


$

0.35










(1) Excludes Amortization and Reclamation and remediation.

 

 

NEWMONT MINING CORPORATION










CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)














Three Months Ended





March 31,





2013


2012

Operating activities:








Net income 


$

357


$

603


Adjustments:









Amortization 



267



231



Stock based compensation and other non-cash benefits 



19



17



Reclamation and remediation



18



16



Loss from discontinued operations



-



71



Impairment of marketable securities



4



24



Deferred income taxes 



(11)



(55)



Gain on asset sales, net



(1)



(10)



Other operating adjustments and write-downs 



74



72



Net change in operating assets and liabilities



(288)



(356)

Net cash provided from continuing operations 



439



613

Net cash used in discontinued operations



(6)



(4)

Net cash provided from operations 



433



609

Investing activities:








Additions to property, plant and mine development 



(510)



(696)


Acquisitions, net  



(8)



(11)


Sale of marketable securities



1



-


Purchases of marketable securities 



(1)



(143)


Proceeds from sale of other assets



25



12


Other 



(14)



(17)

Net cash used in investing activities 



(507)



(855)

Financing activities:








Proceeds from debt, net



80



3,346


Repayment of debt 



-



(1,907)


Payment of conversion premium on debt



-



(172)


Proceeds from stock issuance, net 



1



2


Sale of noncontrolling interests



32



-


Acquisition of noncontrolling interests



(6)



-


Dividends paid to common stockholders 



(211)



(173)


Other 



(1)



(2)

Net cash provided from (used in) financing activities



(105)



1,094

Effect of exchange rate changes on cash 



(4)



4

Net change in cash and cash equivalents 



(183)



852

Cash and cash equivalents at beginning of period 



1,561



1,760

Cash and cash equivalents at end of period 


$

1,378


$

2,612










 


NEWMONT MINING CORPORATION










CONDENSED CONSOLIDATED BALANCE SHEETS


(unaudited, in millions)












At March 31,


At December 31,




2013


2012


ASSETS







Cash and cash equivalents 


$

1,378


$

1,561

Trade receivables 



212



283

Accounts receivable 



553



577

Investments