Newmont Reports Fourth Quarter and 2007 Financial and Operating Results
DENVER, Feb. 21 /PRNewswire-FirstCall/ — Newmont Mining Corporation today announced fourth quarter and 2007 financial and operating results. For the quarter and year ended December 31, the Company reported a net loss from continuing operations of $933 million (-$2.06 per share) and $963 million (-$2.13 per share), respectively, in 2007, compared with net income from continuing operations of $171 million ($0.38 per share) and $563 million ($1.25 per share), respectively, in 2006. Including discontinued operations, the Company reported a net loss of $289 million (-$0.63 per share) and $1.9 billion (-$4.17 per share), for the quarter and year ended December 31, 2007, respectively, compared with net income of $223 million ($0.50 per share) and $791 million ($1.76 per share) for the quarter and year ended December 31, 2006. Net income was impacted by the following:
Description ($ million, after-tax) Q4 2007 Q4 2006 2007 2006 Continuing operations: Write-down of Exploration goodwill $(1,122) $- $(1,122) $- Loss on settlement of gold contracts $- $- $(358) $(23) Write-down of marketable securities $(39) $- $(39) $- Batu Hijau minority loan repayment $- $- $(25) $- Tax estimate revisions $- $44 $- $35 Discontinued operations: Gain on sale of royalty portfolio and other assets $597 $- $597 $- Write-down of Merchant Banking goodwill $- $- $(1,665) $- Zarafshan expropriation settlement (impairment) $6 $- $60 $(71) Gain on sale of Alberta oil sands $- $- $- $173 Other discontinued operations and asset sales $41 $52 $85 $126
Richard O’Brien, President and Chief Executive Officer, said, “Our operating results in each of our regions continue to improve, with fourth quarter and 2007 performance reflecting our focus on execution and in line with guidance. As we look to 2008 and beyond, we will maintain the momentum established in 2007 by further improving our operating performance through production, cost and capital execution in line with our plans. We will also focus on completing the construction of Boddington in Australia, the Yanacocha gold mill in Peru, and the Nevada power plant, while aggressively exploring at our recently acquired Hope Bay project in Canada.”
Financial ($ million, except per share) Q4 2007 Q4 2006 2007 2006 Revenues $1,410 $1,424 $5,526 $4,882 (Loss) income from continuing operations $(933) $171 $(963) $563 (Loss) income from continuing operations per share $(2.06) $0.38 $(2.13) $1.25 Net (loss) income $(289) $223 $(1,886) $791 Net (loss) income per share $(0.63) $0.50 $(4.17) $1.76 Operating Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces)(1) $1,648 $1,954 $6,184 $7,186 Equity gold sales (000 ounces)(1),(2) $1,405 $1,715 $5,321 $5,870 Average realized gold price ($/ounce) $785 $612 $697 $594 Costs applicable to sales ($/ounce)(3) $384 $324 $406 $303 Net cash provided from continuing operations ($ million) $631 $403 $525 $1,129 Capital expenditures ($ million) $511 $440 $1,670 $1,537 (1) Includes sales from start-up activities which are not included in Revenue, Costs applicable to sales and Depreciation, depletion and amortization per ounce calculations. (2) Includes sales from discontinued operations. (3) Excludes depreciation, depletion and amortization, loss on settlement of price-capped forward sales contracts and Midas redevelopment.
The Company generated net cash from continuing operations of $631 million in the fourth quarter of 2007 compared to $403 million in the year ago quarter. The Company generated net cash from continuing operations of $525 million in 2007, compared to $1.1 billion in 2006. Cash flow from continuing operations during 2007 was negatively impacted by the settlement of the price-capped forward sales contracts ($578 million), the settlement of pre-acquisition income taxes of Normandy ($276 million) and the final settlement of copper collar contracts ($174 million).
During the fourth quarter of 2007, the Company recognized a $1.1 billion non-cash Exploration Segment goodwill impairment as part of continuing operations, primarily due to recent reserve replacement results, required changes to the Company’s valuation model assumptions (primarily the discount rate, reserve growth rate, reserve finding costs, operating and capital costs) and new industry-developed interpretation of the accounting rules for impairment analysis.
In December 2007, the Company closed the sale of its royalty portfolio and other non-core assets to Franco-Nevada Corporation for cash consideration of approximately $1.2 billion, which resulted in a pre-tax gain of $0.9 billion ($0.6 billion after-tax). The Company also completed the sale of its Pajingo mine for $23 million, which resulted in a pre-tax gain of approximately $8 million ($5 million after-tax) in the fourth quarter of 2007. As a result, Pajingo’s results for 2007 and 2006 were reclassified to discontinued operations.
On January 18, 2008, the Company announced the successful completion of its offer to acquire a controlling interest in Miramar Mining Corporation. This transaction is expected to close during the first quarter of 2008.
FOURTH QUARTER AND 2007 REGIONAL HIGHLIGHTS NEVADA Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces)(1) 667 887 2,341 2,534 Equity gold sales (000 ounces)(1) 667 887 2,341 2,427 Costs applicable to sales ($/ounce)(2) $384 $363 $444 $403 Capital expenditures ($ million) $135 $204 $588 $705 (1) Includes sales from start-up activities which are not included in Revenue, Costs applicable to sales and Depreciation, depletion and amortization per ounce calculations. (2) Excludes depreciation, depletion and amortization, loss on settlement of price-capped forward sales contracts, and Midas redevelopment. Nevada Operating Performance
Equity gold sales in Nevada decreased in the fourth quarter to 667,000 ounces from 887,000 ounces in the year ago quarter primarily due to lower mill grades at Carlin and Twin Creeks, limited mining activities at Midas following the suspension of operations in June 2007, higher in-process inventories at year-end and limited production from Lone Tree due to the completion of mining, partially offset by increased production at Leeville. In November 2007, Leeville achieved its design capacity of 3,200 tons per day, completing Leeville’s planned ramp-up to steady-state production. On October 11, 2007, the Mine Safety and Health Administration lifted the restrictive order that required Midas to halt mining activities in June 2007. As a result, the Company has been completing redevelopment work at the mine, with ramp-up in the first quarter of 2008 nearing historical production levels.
Open pit ore mined decreased 20% to 10.4 million tons in the fourth quarter of 2007, down from 13.0 million tons in the year ago quarter, primarily due to fewer tons mined at Gold Quarry and increased waste stripping at Phoenix. Underground ore mined decreased 10% in the fourth quarter of 2007 due to the completion of mining at Carlin East and reduced mining activities at Midas. Ore milled increased 6% to 6.9 million tons from 6.5 million tons in the year ago quarter, while milled ore grade decreased 14% during the same period, both driven by the processing of lower grade ore at Phoenix. Ore placed on leach pads decreased 19% in the fourth quarter of 2007 compared to the year ago quarter, primarily as a result of mine sequencing at Gold Quarry and the completion of mining at Lone Tree. Mine sequencing at Gold Quarry also contributed to the 9% increase in leach ore grade from the year ago quarter.
Total costs applicable to sales decreased 19% in the fourth quarter to $255 million from $316 million in the year ago quarter, primarily due to the completion of mining at Lone Tree and Carlin East. Total costs applicable to sales also decreased because fewer in-process and finished goods inventories were sold during the fourth quarter of 2007 compared to the year ago quarter. Costs applicable to sales per ounce increased 6% in the fourth quarter of 2007 to $384 from $363 in the year ago quarter, primarily due to lower production, higher cost production at Phoenix, and reduced mining activities at the lower-cost Midas mine following the suspension of operations.
Phoenix Update
The focus at Phoenix during the fourth quarter was continued progress on optimization projects. The in-fill drill program was increased from 183 to 222 planned drill holes as actual drilling costs were lower than budget. Approximately 80% of the planned drill footage was complete as of December 31, 2007. Favorable results were realized through the implementation of continuous improvement projects, with an emphasis on human resources, equipment productivity and other cost reductions. Mill capacity utilization also improved with nearly 1 million tons processed in each month of the quarter compared to roughly 900,000 tons in the third quarter of 2007. Additionally, the new crusher remains on schedule for start-up by mid-2008 and was approximately 42% complete at the end of the fourth quarter. Phoenix sold 48,700 ounces at costs applicable to sales of $691 per ounce and 181,400 ounces at costs applicable to sales of $729 per ounce for the quarter and year ended December 31, 2007, respectively. The Company continues to expect an updated optimization plan for Phoenix by mid-2008.
Nevada Capital Projects
Capital expenditures in Nevada were $135 million and $588 million for the quarter and year ended December 31, 2007, respectively. Construction of the 200 megawatt coal-fired power plant was approximately 95% complete at the end of the fourth quarter and remains on schedule for completion in the first half of 2008. During the fourth quarter of 2007, the power plant successfully achieved its first fire on oil and in January 2008 the plant achieved first fire on coal. Capital costs are expected to be in line with the previous outlook of between $620 and $640 million. As disclosed previously, the lower cost of self-generated electricity, when compared with projected future market prices in the region, is expected to reduce Nevada’s costs applicable to sales by approximately $25 per ounce.
YANACOCHA Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces) 438 439 1,565 2,572 Equity gold sales (000 ounces) 224 225 803 1,320 Costs applicable to sales ($/ounce)(1) $315 $244 $345 $193 Capital expenditures ($ million) $72 $95 $253 $269 (1) Excludes depreciation, depletion and amortization and loss on settlement of price-capped forward sales contracts. Yanacocha Operating Performance
Equity gold sales at Yanacocha in the fourth quarter were consistent with the year ago quarter at approximately 438,000 ounces with slightly higher gold production offset by an increase in finished goods inventory. Ore mined increased 37% to 32.7 million tons from 23.9 million tons and leach ore grade increased by 31% in the fourth quarter of 2007 compared to the year ago quarter.
Costs applicable to sales increased in the fourth quarter of 2007 to $315 per ounce from $244 per ounce in the year ago quarter. The increase was primarily due to higher labor, diesel, and other commodity prices, as well as higher worker’s participation bonuses and royalties due to increased gold prices.
Yanacocha Capital Projects
Consolidated capital expenditures at Yanacocha were $72 million and $253 million for the quarter and year ended December 31, 2007, respectively. Progress on the gold mill continued as expected, with construction approximately 96% complete at the end of the fourth quarter of 2007. Major milestones during the quarter included completing the primary crusher and the stockpile feed system, and beginning pre-commissioning activities. The Company continues to anticipate commercial production in the first half of 2008. Capital costs on the project are expected to remain in line with the outlook of between $250 and $270 million. Once complete, the gold mill is expected to enhance recovery of complex ores, improve financial returns and extend the operating life at Yanacocha.
AUSTRALIA/NEW ZEALAND Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces) 295 289 1,153 1,176 Equity gold sales (000 ounces) 295 289 1,153 1,176 Costs applicable to sales ($/ounce)(1) $494 $409 $496 $389 Capital expenditures ($ million) $229 $84 $597 $192 (1) Excludes depreciation, depletion and amortization and loss on settlement of price-capped forward sales contracts. Australia/New Zealand Operating Performance
Australia/New Zealand sales increased 2% in the fourth quarter of 2007 to 295,000 ounces from 289,000 ounces in the year ago quarter, primarily due to increased production at Jundee and Waihi, partially offset by decreased production at Tanami and Kalgoorlie.
Gold sales at Jundee increased 13% in the fourth quarter of 2007 compared to 2006, primarily due to a 55% increase in mill ore grades and a 3% increase in mill recoveries, partially offset by a 31% decrease in mill throughput. Gold sales at Waihi increased 55% in the fourth quarter of 2007 from 2006, primarily due to a 48% increase in mill throughput, partially offset by a 23% decrease in ore grade resulting from mining a higher proportion of open pit ore. Gold sales at Tanami decreased 11% in the fourth quarter of 2007 from 2006, primarily due to a 20% decrease in milled ore grade from the blending of low grade stockpiles and a 9% decrease in throughput. Gold sales at Kalgoorlie in the fourth quarter of 2007 were comparable to the year ago quarter primarily due to slightly lower throughput and 11% lower mill ore grade, partially offset by the timing of gold sales and a 2% increase in recovery rates.
Costs applicable to sales increased 21% in the fourth quarter of 2007 to $494 per ounce from $409 per ounce in the year ago quarter, primarily due to the strengthening Australian and New Zealand dollar exchange rates, which increased unit costs by approximately $58 per ounce compared to the year ago quarter. Additionally, royalties increased due to higher gold prices, and input costs were higher, particularly related to fuel, electricity and labor.
The following quarter-on-quarter costs applicable to sales variances include the impact of the strengthening Australian and New Zealand dollars. Costs applicable to sales increased 11% at Jundee to $416 per ounce from $374 per ounce, primarily due to higher contract mining and electricity costs. At Waihi, costs applicable to sales increased 30% to $445 per ounce from $343 per ounce primarily due to increased ore re-handling costs and milling costs from higher mill throughput. Costs applicable to sales at Kalgoorlie increased 25% to $673 per ounce from $539 per ounce, primarily due to higher mining costs from sound abatement and increased equipment maintenance. At Tanami, costs applicable to sales increased 24% to $445 per ounce from $360 per ounce, primarily due to lower production.
Australia/New Zealand Capital Projects
Capital expenditures in Australia/New Zealand were $229 million and $597 million for the quarter and year ended December 31, 2007, respectively. Development of the Boddington project was approximately 62% complete at the end of 2007, with mill start-up expected in late 2008 or early 2009. The Company completed its definitive estimate to update the Boddington capital costs and has revised its expected share of total costs on the project to between $1.4 and $1.6 billion, up from $0.9 to $1.1 billion, primarily as a result of the adverse impact of the Australian dollar exchange rate, design optimization, and labor and commodity cost escalation.
BATU HIJAU Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces) 120 169 494 435 Equity gold sales (000 ounces) 54 89 233 230 Costs applicable to sales ($/ounce)(1) $354 $192 $243 $209 Consolidated copper sales (million pounds) $76 $147 $428 $435 Equity copper sales (million pounds) $34 $78 $204 $230 Costs applicable to sales ($/pound)(1) $1.29 $0.64 $1.10 $0.71 Capital expenditures ($ million) $31 $9 $74 $106 Average realized copper price $1.57 $1.63 $2.86 $1.54 (1) Excludes depreciation, depletion and amortization and loss on settlement of price-capped forward sales contracts. Batu Hijau Operating Performance
Equity gold and copper sales decreased in the fourth quarter of 2007 to 54,000 ounces and 34 million pounds, respectively, from 89,000 ounces and 78 million pounds, respectively, in the year ago quarter. Ore tons mined decreased 78% in the fourth quarter compared to the year ago quarter primarily due to mine sequencing in the pit. Lower gold and copper production compared to the year ago quarter was primarily due to a 20% decrease in throughput as a result of unplanned mill downtime in the fourth quarter of 2007, and lower gold and copper recoveries due to a higher ratio of acid-soluble copper content, partially offset by 6% higher gold ore grades. The timing of sales also negatively impacted the fourth quarter of 2007 as concentrate inventory at year-end increased compared to the year ago quarter.
Total costs applicable to sales increased $15 million from the year ago quarter, primarily due to fewer ore tons mined and stockpiled, resulting in a higher portion of mining costs charged in the current year quarter. Additionally, the average waste-to-ore ratio increased compared to the year ago quarter, partially offset by lower fuel costs as a result of fewer operating hours.
Costs applicable to sales per unit increased 84% per ounce of gold and 102% per pound of copper in the fourth quarter of 2007 from 2006, primarily due to decreased sales compared to the year ago quarter. Additionally, a higher proportion of costs were allocated to gold than copper due to the higher proportion of gold revenue in the fourth quarter of 2007 compared to the year ago quarter.
The average realized copper price, after treatment and refining charges, decreased slightly in the fourth quarter of 2007 to $1.57 per pound from $1.63 per pound in the year ago quarter. Although copper sales were completely unhedged in the fourth quarter of 2007, the decline in copper prices during the fourth quarter of 2007 reduced the Company’s provisional pricing market- to-market on third quarter sales revenue by $119 million. This provisional pricing mark-to-market adjustment lowered the average realized price in the fourth quarter of 2007 by approximately $1.54 per pound.
AHAFO Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces) 85 125 446 202 Equity gold sales (000 ounces) 85 125 446 202 Costs applicable to sales ($/ounce)(1) $416 $326 $396 $297 Capital expenditures ($ million) $35 $22 $114 $177 (1) Excludes depreciation, depletion and amortization and loss on settlement of price-capped forward sales contracts. Ahafo Operating Performance
Gold ounces sold at Ahafo decreased 32% in the fourth quarter of 2007 to 85,000 ounces from 125,000 ounces in the year ago quarter. The decrease was primarily due to a 25% decrease in mill throughput as a result of unplanned downtime in December 2007 and the processing of 12% lower mill ore grades, partially offset by a 4% increase in recovery rates. Both total tons and ore tons mined decreased compared to the year ago quarter as a result of longer haul distances as pits deepen and increased waste stripping at the Apensu pit.
Costs applicable to sales at Ahafo increased 28% to $416 per ounce in the fourth quarter of 2007 from $326 per ounce in the year ago quarter, primarily due to fewer ounces sold and increased mining and milling costs. Mining costs increased due to higher waste removal costs, as well as the year ago quarter benefiting from the capitalization of pre-production costs and lower maintenance costs. Mining costs also increased due to increased pit dewatering, labor, fuel and tire costs. Milling costs increased compared to the year ago quarter primarily due to increased maintenance costs as the new mill required minimal maintenance in the year ago quarter.
OTHER OPERATIONS Q4 2007 Q4 2006 2007 2006 Consolidated gold sales (000 ounces) 43 45 185 267 Equity gold sales (000 ounces) 40 42 174 252 Costs applicable to sales ($/ounce)(1) $338 $272 $332 $222 Capital expenditures ($ million) $1 $3 $13 $11 (1) Excludes depreciation, depletion and amortization and loss on settlement of price-capped forward sales contracts. Other Operations Performance
Equity gold sales for the Kori Kollo mine in Bolivia and the La Herradura mine in Mexico decreased slightly to 40,000 ounces in the fourth quarter of 2007 from 42,000 ounces in the year ago quarter. Equity gold sales at Kori Kollo decreased 22% in the fourth quarter of 2007 from 2006, primarily due to the timing of production flow from the leach pads. La Herradura gold production was slightly lower in the fourth quarter of 2007 from the year ago quarter, however, gold sales increased 22%, primarily due to the timing of sales in the year ago quarter.
Costs applicable to sales increased in the fourth quarter of 2007 to $338 per ounce from $272 per ounce in the year ago quarter. Costs applicable to sales per ounce decreased 17% at Kori Kollo in the fourth quarter of 2007, primarily due to lower mining costs from a reduction in waste removal costs and increased ore tons mined in the fourth quarter of 2007 compared to the year ago quarter. Costs applicable to sales increased 66% at La Herradura, primarily due to increased waste removal costs.
CAPITAL, TAX RATE AND OTHER
Capital expenditures for the fourth quarter of 2007 were $511 million, primarily for the construction of the power plant and sustaining mine development in Nevada ($135 million), construction of the gold mill and leach pad expansions at Yanacocha in Peru ($72 million), construction of the Boddington project and other sustaining mine development in Australia/New Zealand ($229 million), as well as sustaining mine development at Ahafo in Ghana ($35 million). The Company expensed $163 million of depreciation, depletion and amortization during the fourth quarter of 2007. The Company incurred $38 million of general and administrative expenses and net interest expense of $28 million during the fourth quarter of 2007. The Company incurred $17 million and $45 million of advanced projects, research and development and exploration expenditures, respectively, during the fourth quarter of 2007.
The effective tax rate on the (loss) income from continuing operations for the quarter ended December 31, 2007 was (-11%) compared to 23% in the year ago quarter. Excluding the $1.1 billion Exploration Segment goodwill impairment in the fourth quarter of 2007, which is not deductible for tax purposes, the effective tax rate for the fourth quarter of 2007 would have been 26%.
2008 FINANCIAL OUTLOOK CONSOLIDATED FINANCIAL OUTLOOK ($ MILLIONS, EXCEPT TAX RATE) 2008 Outlook Depreciation, depletion & amortization $725 – $775 Exploration $220 – $230 Advanced projects, research and development $120 – $180 General and administrative $140 – $150 Interest expense, net $110 – $120 Effective tax rate 30% – 34% STATEMENTS OF CONSOLIDATED INCOME Q4 2007 Q4 2006 2007 2006 (in millions, except per share) (unaudited) (audited) Revenues Sales- gold, net $1,289 $1,185 $4,305 $4,211 Sales- copper, net 121 239 1,221 671 1,410 1,424 5,526 4,882 Costs and expenses Costs applicable to sales (exclusive of loss on settlement of price-capped forward sales contracts, Midas redevelopment and depreciation, depletion and amortization shown separately below) Gold 630 627 2,507 2,146 Copper 98 93 471 308 Loss on settlement of price-capped forward sales contracts – – 531 – Midas redevelopment 1 – 11 – Depreciation, depletion and amortization 163 178 695 589 Exploration 45 49 177 166 Advanced projects, research and development 17 20 62 81 General and administrative 38 43 143 136 Write-down of goodwill 1,122 – 1,122 – Write-down of investments 46 – 46 – Write-down of long-lived and other assets 2 – 4 3 Other expense, net 49 91 148 159 2,211 1,101 5,917 3,588 Other income (expense) Other income, net 44 34 144 53 Interest expense, net (28) (27) (105) (97) 16 7 39 (44) (Loss) income from continuing operations before income tax, minority interest and equity (loss) income of affiliates (785) 330 (352) 1,250 Income tax expense (89) (76) (200) (326) Minority interest in income of consolidated subsidiaries (58) (84) (410) (363) Equity (loss) income of affiliates (1) 1 (1) 2 (Loss) income from continuing operations (933) 171 (963) 563 Income (loss) from discontinued operations 644 52 (923) 228 Net (loss) income $(289) $223 $(1,886) $791 Income per common share Basic: (Loss) income from continuing operations $(2.06) $0.38 $(2.13) $1.25 Income (loss) from discontinued operations 1.43 0.12 (2.04) 0.51 Net (loss) income $(0.63) $0.50 $(4.17) $1.76 Diluted: (Loss) income from continuing operations $(2.06) $0.38 $(2.13) $1.25 Income (loss) from discontinued operations 1.43 0.11 (2.04) 0.50 Net (loss) income $(0.63) $0.49 $(4.17) $1.75 Basic weighted-average common shares outstanding 452 450 452 450 Diluted weighted-average common shares outstanding 452 452 452 452 Cash dividends declared per common share $0.10 $0.10 $0.40 $0.40 CONSOLIDATED BALANCE SHEETS At December 31, 2007 2006 (in millions, audited) ASSETS Cash and cash equivalents $1,231 $1,166 Marketable securities and other short-term investments 61 109 Trade receivables 177 142 Accounts receivable 168 206 Inventories 463 376 Stockpiles and ore on leach pads 373 377 Deferred income tax assets 112 156 Other current assets 87 93 Current assets 2,672 2,625 Property, plant and mine development, net 9,140 6,544 Investments 1,527 1,319 Long-term stockpiles and ore on leach pads 788 812 Deferred income tax assets 1,027 793 Other long-term assets 234 178 Goodwill 186 1,338 Assets of operations held for sale 24 1,992 Total assets $15,598 $15,601 LIABILITIES Current portion of long-term debt $255 $159 Accounts payable 339 340 Employee-related benefits 153 182 Derivative instruments 3 174 Income and mining taxes 88 337 Other current liabilities 662 515 Current liabilities 1,500 1,707 Long-term debt 2,683 1,752 Reclamation and remediation liabilities 623 521 Deferred income tax liabilities 1,025 626 Employee-related benefits 226 309 Other long-term liabilities 150 135 Liabilities of operations held for sale 394 116 Total liabilities 6,601 5,166 Minority interests in subsidiaries 1,449 1,098 STOCKHOLDERS’ EQUITY Common stock 696 677 Additional paid-in capital 6,696 6,703 Accumulated other comprehensive income 957 673 Retained (deficit) earnings (801) 1,284 Total stockholders’ equity 7,548 9,337 Total liabilities and stockholders’ equity $15,598 $15,601 STATEMENTS OF CONSOLIDATED CASH FLOW Q4 2007 Q4 2006 2007 2006 (in millions) (unaudited) (audited) Operating activities: Net (loss) income $(289) $223 $(1,886) $791 Adjustments to reconcile net (loss) income to net cash from continuing operations: Write-down of goodwill 1,122 – 1,122 – (Income) loss from discontinued operations (644) (52) 923 (228) Depreciation, depletion and amortization 163 178 695 589 Minority interest expense 58 84 410 363 Deferred income taxes 136 (12) (152) (127) Write-down of investments 46 – 46 – Stock-based compensation expense 10 33 46 50 Accretion of accumulated reclamation obligations 8 8 37 30 Hedge gain, net – (128) (9) (46) Revenue from prepaid forward sales obligation – – – (48) Other operating adjustments and write-downs 11 27 48 102 Net change in operating assets and liabilities(1) 10 42 (755) (347) Net cash provided from continuing operations 631 403 525 1,129 Net cash provided from discontinued operations 39 26 138 96 Net cash from operations 670 429 663 1,225 Investing activities: Additions to property, plant and mine development (511) (440) (1,670) (1,537) Proceeds from sale of marketable debt securities 16 288 224 2,216 Investments in marketable debt and equity securities (18) (107) (258) (1,493) Acquisitions (953) – (953) (348) Cash received on repayment of Batu Hijau carried interest – – 161 – Other 5 4 29 20 Net cash used in investing activities of continuing operations (1,461) (255) (2,467) (1,142) Net cash provided from investing activities of discontinued operations 1,199 41 1,354 338 Net cash used in investing activities (262) (214) (1,113) (804) Financing activities: Proceeds from debt, net 280 – 3,008 198 Repayment of debt (385) (48) (2,036) (111) Dividends paid to minority interests (154) (29) (270) (264) Dividends paid to common stockholders (45) (45) (181) (180) Proceeds from stock issuance 31 12 51 78 Purchase of Company share call options – – (366) – Issuance of Company share warrants – – 248 – Early extinguishment of prepaid forward sales obligation – – – (48) Change in restricted cash and other 4 5 11 (6) Net cash (used in) provided from financing activities of continuing operations (269) (105) 465 (333) Net cash used in financing activities of discontinued operations – – – (7) Net cash (used in) provided from financing activities (269) (105) 465 (340) Effect of exchange rate changes on cash 39 (3) 50 3 Net change in cash and cash equivalents 178 107 65 84 Cash and cash equivalents at beginning of period 1,053 1,059 1,166 1,082 Cash and cash equivalents at end of period $1,231 $1,166 $1,231 $1,166 (1) Net change in operating assets and liabilities Decrease (increase) in operating assets: Trade and accounts receivable $169 $(58) $17 $(110) Inventories, stockpiles and ore on leach pads (59) (61) (95) (382) Other assets 10 24 6 (25) Increase (decrease) in operating liabilities: Accounts payable and other accrued liabilities (92) 153 (629) 230 Reclamation liabilities (18) (16) (54) (60) 10 42 (755) (347) OPERATING STATISTICS SUMMARY Q4 2007 Q4 2006 2007 2006 Gold Consolidated ounces sold (000): Nevada (1) 667 887 2,341 2,534 Yanacocha 438 439 1,565 2,572 Batu Hijau 120 169 494 435 Australia/New Zealand Tanami 103 116 439 418 Kalgoorlie 74 76 323 332 Jundee 87 77 298 306 Waihi 31 20 93 120 295 289 1,153 1,176 Ahafo 85 125 446 202 Other Kori Kollo 21 26 87 129 La Herradura 22 18 86 79 Golden Giant – 1 12 59 43 45 185 267 1,648 1,954 6,184 7,186 Equity ounces sold (000): Nevada (1) 667 887 2,341 2,427 Yanacocha 224 225 803 1,320 Batu Hijau 54 89 233 230 Australia/New Zealand Tanami 103 116 439 418 Kalgoorlie 74 76 323 332 Jundee 87 77 298 306 Waihi 31 20 93 120 295 289 1,153 1,176 Ahafo 85 125 446 202 Other Kori Kollo 18 23 76 114 La Herradura 22 18 86 79 Golden Giant – 1 12 59 40 42 174 252 1,365 1,657 5,150 5,607 Discontinued Operations Pajingo 40 58 171 175 Zarafshan – – – 62 Holloway – – – 26 1,405 1,715 5,321 5,870 Copper Batu Hijau (pounds sold in millions): Consolidated 76 147 428 435 Equity 34 78 204 230 (1) Includes sales from start-up activities which are not included in Revenue, Costs applicable to sales and Depreciation, depletion and amortization per ounce calculations. OPERATING STATISTICS – NEVADA BY LOCATION Q4 2007 Q4 2006 2007 2006 Mine production: Open pit ore mined (000 dry short tons): Carlin 3,056 6,648 17,792 22,768 Phoenix 3,252 4,330 12,241 4,330 Twin Creeks 4,062 1,303 12,529 7,676 Lone Tree – 680 – 3,672 10,370 12,961 42,562 38,446 Average ore grade (oz/ton) 0.055 0.047 0.058 0.048 Open pit waste mined (000 dry short tons): Carlin 12,312 19,593 84,045 75,012 Phoenix 10,846 7,780 44,963 7,780 Twin Creeks 8,882 13,654 42,557 59,709 Lone Tree – 604 – 10,491 32,040 41,631 171,565 152,992 Underground ore mined (000 dry short tons): Carlin – Carlin East – 106 151 241 Carlin – Deep Post 84 99 308 388 Carlin – Chukar 133 114 428 336 Carlin – Leeville 302 232 700 232 Midas 46 97 236 333 Turquoise Ridge 31 12 119 121 596 660 1,942 1,651 Average ore grade (oz/ton) 0.418 0.467 0.399 0.471 Mill throughput (000 dry short tons): Carlin – Mill 5 1,370 1,312 5,301 4,799 Carlin – Mill 6 836 757 3,058 2,739 Twin Creeks – Juniper 279 263 1,032 957 Twin Creeks – Sage 784 759 3,222 3,202 Lone Tree 522 648 1,819 2,708 Phoenix 2,914 2,531 10,443 2,531 Midas 50 95 234 331 Other 190 175 417 615 6,945 6,540 25,526 17,882 Average ore grade (oz/ton) 0.099 0.115 0.098 0.127 Average mill recovery rate 79.6% 80.2% 81.2% 81.1% OPERATING STATISTICS – NEVADA Q4 2007 Q4 2006 2007 2006 Tons mined (000 dry short tons): Open pit Ore 10,370 12,961 42,562 38,446 Waste 32,040 41,631 171,565 152,992 Total 42,410 54,592 214,127 191,438 Underground 596 660 1,942 1,651 Tons milled/processed (000 dry short tons): Mill 6,945 6,540 25,526 17,882 Leach 3,839 4,768 14,042 22,138 Average ore grade (oz/ton): Mill 0.099 0.115 0.098 0.127 Leach 0.035 0.032 0.035 0.026 Average mill recovery rate 79.6% 80.2% 81.2% 81.1% Gold ounces produced (thousands): Mill 559 735 2,004 2,059 Leach 100 124 332 364 Incremental start-up 6 17 6 100 Consolidated 665 876 2,342 2,523 Equity 665 876 2,342 2,416 Gold ounces sold (thousands): Consolidated 667 887 2,341 2,534 Equity 667 887 2,341 2,427 Gold production costs (millions): Costs applicable to sales $255 $316 $1,036 $980 Depreciation, depletion and amortization $51 $72 $220 $180 Gold production costs (per ounce sold): Direct mining and production costs $390 $376 $454 $406 By-product credits (23) (22) (26) (15) Royalties and production taxes 15 7 14 9 Reclamation/accretion expense 2 2 2 3 Costs applicable to sales $384 $363 444 $403 Depreciation, depletion, and amortization $78 $84 $94 $74 (1) Includes sales from start-up activities which are not included in Revenue, Costs applicable to sales and Depreciation, depletion and amortization per ounce calculations. OPERATING STATISTICS – YANACOCHA Q4 2007 Q4 2006 2007 2006 Tons mined (000 dry short tons): Ore 32,718 23,918 98,595 115,795 Waste 19,523 27,990 110,276 101,706 Total 52,241 51,908 208,871 217,501 Tons processed (000 dry short tons) 32,442 26,666 98,319 118,551 Average ore grade (oz/ton) 0.021 0.016 0.019 0.026 Gold ounces produced (thousands): Consolidated 470 456 1,565 2,612 Equity 241 234 803 1,341 Gold ounces sold (thousands): Consolidated 438 439 1,565 2,572 Equity 224 225 803 1,320 Gold production costs (millions): Costs applicable to sales $138 $107 $540 $498 Depreciation, depletion and amortization $36 $34 $160 $172 Gold production costs (per ounce sold): Direct mining and production costs $312 $257 $348 $202 By-product credits (18) (21) (22) (16) Royalties and production taxes 16 5 13 4 Reclamation/accretion expense 5 3 6 3 Costs applicable to sales $315 $244 $345 $193 Depreciation, depletion, and amortization $83 $78 $103 $67 OPERATING STATISTICS – BATU HIJAU Q4 2007 Q4 2006 2007 2006 Tons mined (000 dry short tons): Ore 4,583 21,101 29,543 127,255 Waste 57,700 54,670 215,364 165,904 Total 62,283 75,771 244,907 293,159 Tons milled (000 dry short tons) 10,177 12,755 46,782 47,026 Average ore grade: Gold (oz/ton) 0.018 0.017 0.014 0.012 Copper 0.61% 0.65% 0.60% 0.55% Average mill recovery rate: Gold 80.7% 81.2% 81.9% 79.5% Copper 84.3% 90.7% 86.1% 87.3% Gold ounces produced (thousands): Consolidated 151 176 548 448 Equity 68 93 258 237 Gold ounces sold (thousands): Consolidated 120 169 494 435 Equity 54 89 233 230 Copper pounds produced (millions): Consolidated 105 151 484 454 Equity 47 80 230 240 Copper pounds sold (millions): Consolidated 76 147 428 435 Equity 34 78 204 230 Gold production costs (millions): Costs applicable to sales $43 $32 $120 $91 Depreciation, depletion and amortization $8 $6 $25 $20 Gold production costs (per ounce sold): Direct mining and production costs $345 $188 $233 $203 By-product credits (12) (10) (8) (9) Royalties and production taxes 17 12 15 13 Reclamation/accretion expense 4 2 3 2 Costs applicable to sales $354 $192 $243 $209 Depreciation, depletion, and amortization $69 $38 $50 $46 Copper production costs (millions): Costs applicable to sales $98 $94 $471 $308 Depreciation, depletion and amortization $17 $17 $96 $66 Copper production costs (per pound sold): Direct mining and production costs $1.29 $0.63 $1.11 $0.71 By-product credits (0.04) (0.03) (0.04) (0.03) Royalties and production taxes 0.03 0.03 0.02 0.02 Reclamation/accretion expense 0.01 0.01 0.01 0.01 Costs applicable to sales $1.29 $0.64 $1.10 $0.71 Depreciation, depletion, and amortization $0.23 $0.11 $0.22 $0.15 OPERATING STATISTICS – AHAFO Q4 2007 Q4 2006 2007 2006 Tons mined (000 dry short tons): Ore 2,063 2,690 8,923 5,033 Waste 8,617 9,221 35,312 14,966 Total 10,680 11,911 44,235 19,999 Tons milled (000 dry short tons): 1,628 2,171 8,090 3,515 Average ore grade (oz/ton) 0.060 0.068 0.060 0.065 Average mill recovery rate 90.4% 86.7% 92.0% 88.3% Gold ounces produced (thousands): Consolidated 93 119 456 197 Equity 93 119 456 197 Gold ounces sold (thousands): Consolidated 85 125 446 202 Equity 85 125 446 202 Gold production costs (millions): Costs applicable to sales $35 $41 $176 $60 Depreciation, depletion and amortization $9 $13 $43 $19 Gold production costs (per ounce sold): Direct mining and production costs $392 $308 $375 $279 By-product credits (1) (1) (1) (1) Royalties and production taxes 24 18 21 18 Reclamation/accretion expense 1 1 1 1 Costs applicable to sales $416 $326 $396 $297 Depreciation, depletion, and amortization $106 $101 $96 $94 OPERATING STATISTICS – JUNDEE AND TANAMI Q4 2007 Q4 2006 2007 2006 JUNDEE Tons mined (000 dry short tons): Open pit Ore 223 177 966 812 Waste 661 1,522 5,430 5,810 Total 884 1,699 6,396 6,622 Underground 254 257 1,040 1,166 Tons milled (000 dry short tons) 439 638 1,827 2,460 Average ore grade (oz/ton) 0.215 0.139 0.174 0.136 Average mill recovery rate 95.5% 92.8% 92.9% 92.3% Gold ounces produced (thousands): Consolidated 87 83 291 313 Equity 87 83 291 313 Gold ounces sold (thousands): Consolidated 87 77 298 306 Equity 87 77 298 306 Gold production costs (millions): Costs applicable to sales $36 $28 $143 $113 Depreciation, depletion and amortization $8 $8 $26 $26 Gold production costs (per ounce sold): Direct mining and production costs $392 $354 $458 $350 By-product credits (2) (2) (2) (2) Royalties and production taxes 20 17 18 16 Reclamation/accretion expense 6 5 6 5 Costs applicable to sales $416 $374 $480 $369 Depreciation, depletion, and amortization $88 $110 $88 $85 TANAMI Tons mined (000 dry short tons) 497 539 2,032 2,136 Tons milled (000 dry short tons) 737 806 3,029 3,151 Average ore grade (oz/ton) 0.134 0.167 0.147 0.144 Average mill recovery rate 94.5% 95.5% 95.1% 95.2% Gold ounces produced (thousands): Consolidated 95 129 427 431 Equity 95 129 427 431 Gold ounces sold (thousands): Consolidated 103 116 439 418 Equity 103 116 439 418 Gold production costs (millions): Costs applicable to sales $46 $42 $187 $155 Depreciation, depletion and amortization $10 $9 $37 $30 Gold production costs (per ounce sold): Direct mining and production costs $435 $295 $373 $314 By-product credits (1) (1) (1) (1) Royalties and production taxes 9 63 51 54 Reclamation/accretion expense 2 3 2 3 Costs applicable to sales $445 $360 $425 $370 Depreciation, depletion, and amortization $98 $76 $85 $72 OPERATING STATISTICS – KALGOORLIE AND WAIHI Q4 2007 Q4 2006 2007 2006 KALGOORLIE Tons mined (000 dry short tons): Open pit Ore 1,722 1,715 6,741 7,037 Waste 9,786 9,267 36,412 38,687 Total 11,508 10,982 43,153 45,724 Underground 55 51 206 207 Tons milled (000 dry short tons) 1,609 1,633 6,527 6,434 Average ore grade (oz/ton) 0.051 0.057 0.054 0.062 Average mill recovery rate 86.9% 85.3% 85.6% 84.6% Gold ounces produced (thousands): Consolidated 76 87 314 342 Equity 76 87 314 342 Gold ounces sold (thousands): Consolidated 74 76 323 332 Equity 74 76 323 332 Gold production costs (millions): Costs applicable to sales $50 $41 $196 $163 Depreciation, depletion and amortization $5 $6 $24 $25 Gold production costs (per ounce sold): Direct mining and production costs $668 $517 $585 $471 By-product credits (3) (3) (3) (3) Royalties and production taxes 20 18 17 16 Reclamation/accretion expense (12) 7 6 6 Costs applicable to sales $673 $539 $605 $490 Depreciation, depletion, and amortization $64 $83 $74 $76 WAIHI Tons mined (000 dry short tons): Open pit Ore 428 45 614 890 Waste 442 826 3,490 987 Total 870 871 4,104 1,877 Underground 85 86 269 149 Tons milled (000 dry short tons) 260 176 550 1,025 Average ore grade (oz/ton) 0.139 0.181 0.173 0.135 Average mill recovery rate 90.9% 86.4% 89.7% 91.9% Gold ounces produced (thousands): Consolidated 31 29 85 130 Equity 31 29 85 130 Gold ounces sold (thousands): Consolidated 31 20 93 120 Equity 31 20 93 120 Gold production costs (millions): Costs applicable to sales $14 $7 $47 $27 Depreciation, depletion and amortization $6 $1 $21 $10 Gold production costs (per ounce sold): Direct mining and production costs $494 $404 $526 $294 By-product credits (63) (74) (40) (79) Royalties and production taxes 7 3 7 1 Reclamation/accretion expense 7 10 9 7 Costs applicable to sales $445 $343 $502 $223 Depreciation, depletion, and amortization $206 $36 $226 $83 OPERATING STATISTICS – KORI KOLLO AND GOLDEN GIANT Q4 2007 Q4 2006 2007 2006 KORI KOLLO Tons mined (000 dry short tons): Ore 2,564 1,920 9,178 9,516 Waste 2,550 4,317 12,445 14,294 Total 5,114 6,237 21,623 23,810 Tons processed (000 dry short tons) 2,564 1,920 9,178 9,516 Average ore grade (oz/ton) 0.020 0.021 0.020 0.021 Gold ounces produced (thousands): Consolidated 22 26 89 129 Equity 19 22 78 114 Gold ounces sold (thousands): Consolidated 21 26 87 129 Equity 18 23 76 114 Gold production costs (millions): Costs applicable to sales $5 $8 $30 $27 Depreciation, depletion and amortization $3 $2 $10 $9 Gold production costs (per ounce sold): Direct mining and production costs $253 $314 $345 $217 By-product credits (20) (25) (21) (17) Royalties and production taxes – – – – Reclamation/accretion expense 16 12 16 10 Costs applicable to sales $249 $301 $340 $210 Depreciation, depletion, and amortization $126 $92 $117 $68 GOLDEN GIANT Tons mined (000 dry short tons) – – – 13 Tons milled (000 dry short tons) – – – 17 Average ore grade (oz/ton) – – – 0.627 Average mill recovery rate – – – 96.9% Gold ounces produced (thousands): Consolidated – 1 12 59 Equity – 1 12 59 Gold ounces sold (thousands): Consolidated – 1 12 59 Equity – 1 12 59 Gold production costs (millions): Costs applicable to sales $- $- $2 $13 Depreciation, depletion and amortization $- $- $- $1 Gold production costs (per ounce sold): Direct mining and production costs $- $- $188 $203 By-product credits – – (3) (1) Royalties and production taxes – – (9) (2) Reclamation/accretion expense – – 29 14 Costs applicable to sales $- $- $205 $214 Depreciation, depletion, and amortization $- $- $- $10 OPERATING STATISTICS – LA HERRADURA Q4 2007 Q4 2006 2007 2006 LA HERRADURA Tons mined (000 dry short tons): Ore 1,332 1,219 5,272 4,263 Waste 4,963 3,902 18,533 13,926 Total 6,295 5,121 23,805 18,189 Tons processed (000 dry short tons) 1,332 1,219 5,272 4,263 Average ore grade (oz/ton) 0.022 0.024 0.022 0.023 Gold ounces produced (thousands): Consolidated 22 24 86 79 Equity 22 24 86 79 Gold ounces sold (thousands): Consolidated 22 18 86 79 Equity 22 18 86 79 Gold production costs (millions): Costs applicable to sales $9 $5 $29 $20 Depreciation, depletion and amortization $2 $2 $7 $9 Gold production costs (per ounce sold): Direct mining and production costs $430 $267 $357 $254 By-product credits (10) (25) (17) (10) Royalties and production taxes – – – – Reclamation/accretion expense 1 12 1 4 Costs applicable to sales $421 $254 $341 $248 Depreciation, depletion, and amortization $76 $129 $77 $114
The Company’s fourth quarter and year-end earnings conference call and web cast presentation will be held on February 21, 2008 beginning at 4:00 p.m. Eastern Time (2:00 p.m. Mountain Time). To participate:
Dial-In Number: 210-234-0000 Leader: John Seaberg Password: Newmont Replay Number: 203-369-0752
The conference call will also be simultaneously carried on our web site at http://www.newmont.com/ under Investor Information/Presentations and will be archived there for a limited time.
Cautionary Statement:
This news 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 that are intended to be covered by the safe harbor created by such sections. Such forward-looking statements include, without limitation, (i) estimates of future capital expenditures, project costs, tax rates and expenses; (ii) estimates regarding timing of future development, construction, production or closure activities; and (iii) statements regarding potential cost savings, productivity, operating performance, cost structure and competitive position. 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, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from futur