Newmont Generates First Quarter Net Cash Of $387 Million

 

DENVER, CO - Newmont Mining Corporation reported first quarter results, with net cash from continuing operations of $387 million with equity gold sales of 1.27 million ounces at an average realized gold price of $906 per ounce. Costs applicable to sales were $435 per ounce, and adjusted net incomewas $208 million. Net income on a GAAP basis(2) was $189 million for the first quarter, compared to $365 million in the prior year quarter, primarily due to lower realized gold and copper prices.

"Our operations provided solid results that were in-line with our expectations and this performance sets us up well to deliver on our operating plans for the full year in 2009. Project execution is also going well and is a clear focus for the balance of the year. Completing our Boddington project by mid-year and successfully ramping up to commercial production is a clear driver of our 2009 performance," said Richard O'Brien, President and Chief Executive Officer.

O'Brien further added, "Lower commodity prices relative to last year both hurt and helped our performance in the first quarter. Lower copper prices, in particular, negatively impacted our earnings and cash flow. One the positive side, lower than expected diesel costs and Australian dollar exchange rates resulted in lower than expected costs applicable to sales. If input commodity prices remain at our forecasted levels for the balance of the year and gold stays in the current trading range, we expect expanding margins for the rest of the year."

(1) See reconciliation from adjusted net income to GAAP Net income on page 9 of this release.

(2) In this release, GAAP Net income refers to Net income attributable to Newmont stockholders.

The Company is maintaining its previously announced 2009 equity gold sales outlook of between 5.2 and 5.5 million ounces at costs applicable to sales of between $400 and $440 per ounce. The Company's costs applicable to sales forecast for 2009 now assumes an oil price of $50 per barrel and an Australian dollar exchange rate of 0.70 for the balance of the year. Costs applicable to sales are expected to change by approximately $6 per ounce for every $10 change in the oil price and by roughly $3 per ounce for every 0.10 change in the Australian dollar exchange rate for the remainder of the year.

In the first quarter of 2009, the Company reported equity gold sales of 1.27 million ounces at costs applicable to sales of $435 per ounce. The Company's operations delivered equity gold sales slightly above expectations as higher than expected sales in Nevada, Australia and at Batu Hijau in Indonesia were partially offset by lower sales at Yanacocha in Peru. Costs applicable to sales per ounce were lower than expected in Nevada, in Australia, at Yanacocha, at Batu Hijau and at Ahafo, partially offset by higher costs at Kori Kollo in Bolivia.

Nevada sold 518,000 equity ounces of gold at costs applicable to sales of $509 per ounce during the first quarter. Equity gold sales were higher than expected primarily due to higher throughput at Mill 6 and the Sage Autoclave and higher underground production from Leeville, Chukar and Carlin East, partially offset by lower production at Midas due to the temporary suspension of mining following a ground failure which curtailed production in March but has since resumed as of the end of April 2009. Although costs applicable to sales per ounce increased from the prior year quarter due to lower production, higher underground contracted service costs and lower by-product credits, results for the first quarter were below expectations due to higher gold sales and lower diesel costs. The Company continues to expect 2009 equity gold sales from Nevada of between 1.8 and 2.0 million ounces at costs applicable to sales of between $535 and $575 per ounce.

Equity gold sales during the first quarter at Yanacocha in Peru were 241,000 ounces at costs applicable to sales of $324 per ounce. Equity gold sales were below expectations due to a change in mine sequencing that resulted in lower mill grades, partially offset by higher leach pad production. Costs applicable to sales per ounce were lower than expected due to lower input costs partially offset by lower silver by-product credits and higher royalty and production taxes from higher realized gold prices. The Company is maintaining its 2009 outlook for equity gold sales of between 975,000 and 1,025,000 ounces at costs applicable to sales of between $290 and $310 per ounce.

Equity gold sales during the first quarter in Australia/New Zealand were 293,000 ounces at costs applicable to sales of $492 per ounce. Equity gold sales exceeded expectations as higher grades and recoveries at Jundee and Kalgoorlie more than offset lower throughput and recoveries at Tanami. Costs applicable to sales per ounce were lower than expected due to higher gold sales and a more favorable Australian dollar exchange rate during the quarter, partially offset by higher royalties and production taxes. Regional costs applicable to sales are expected to change by approximately $15 per ounce for every 0.10 change in the Australian dollar exchange rate for the remainder of the year. The Company is maintaining its 2009 outlook for equity gold sales of between 1.5 and 1.6 million ounces at costs applicable to sales of between $440 and $480 per ounce.

Equity gold and copper sales during the first quarter at Batu Hijau in Indonesia were 30,000 ounces and 43 million pounds, respectively, at costs applicable to sales of $406 per ounce and $0.89 per pound, respectively. Equity gold and copper sales were higher than expected primarily due to higher throughput from increased mill availability, higher recoveries and increased concentrate shipments. Total costs applicable to sales were lower than expected as a result of lower input costs, partially offset by additional sales from higher cost concentrate inventories. Costs applicable to sales allocated to gold were higher than expected due to the application of co-product accounting, which resulted in a higher allocation of costs to gold, as the Company realized higher gold revenues relative to copper during the quarter. For 2009, the Company continues to expect equity gold and copper sales of between 225,000 and 250,000 ounces and 210 and 230 million pounds, respectively. As a result of an assumed higher gold price relative to copper, the Company now expects costs applicable to sales for gold and copper to be between $280 and $320 per ounce and $0.50 and $0.65 per pound, respectively.

Equity gold sales during the first quarter at Ahafo in Ghana were 144,000 ounces at costs applicable to sales of $399 per ounce. Equity gold sales were in-line with expectations as processing of higher grade material was offset by lower throughput. Costs applicable to sales per ounce were lower than expected primarily due to lower input costs. The Company is maintaining its 2009 outlook for equity gold sales of between 500,000 and 525,000 ounces from Ahafo. As a result of lower oil prices and an improved power availability assumption, the Company has lowered its 2009 outlook for costs applicable to sales to between $425 and $450 per ounce.

Capital Update

Development of the Boddington project in Australia was approximately 95% complete at the end of the first quarter, with start-up expected in mid-2009 and an anticipated 12-month ramp-up schedule. The Company continues to expect capital expenditures of between $2.6 and $2.9 billion on a 100% basis. Assuming the completion of the previously announced acquisition of AngloGold Ashanti Ltd.'s 33.33% interest in the Boddington project, the Company continues to expect annual gold sales of approximately one million ounces at costs applicable to sales of approximately $300 per ounce (net of by-product credits) for the first full five years of operation.

The company’s address is 6363 South Fiddler's Green Circle, Greenwood Village, CO 80111, 303.837.5114, fax: 303.837.5085, www.newmont.com.