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Newmont Announces Third Quarter 2013 Results

Stocks in this article: NEM

Akyem – The Akyem project achieved commercial production in October. The Company is maintaining its 2013 attributable gold production outlook of between 50,000 and 100,000 ounces at CAS of $450 to $500 per ounce.

Capital Update

2013 consolidated capital expenditures outlook was reduced by another $200 million during the third quarter in addition to the $200 million reduction earlier this year. The Company now expects consolidated capital expenditures of between $2.0 to $2.2 billion ($1.7 to $1.9 billion attributable to Newmont). For the first nine months of 2013, capital expenditures in North America were primarily related to the construction of the Phoenix Copper Leach project, the development of the Turf Vent Shaft project, surface and underground mine development and infrastructure improvements in Nevada, as well as mill expansion capital in Mexico. Capital expenditures in South America were primarily related to the Conga and Merian projects, surface mine development, leach pad and other infrastructure improvements 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. Capital expenditures in Africa were related to Akyem development, the Subika expansion project and the Ahafo Mill expansion project, as well as equipment purchases and surface mine development at Ahafo.

                     
         

 

Attributable Production

 

Consolidated CAS inclusive of stockpile write- downs

 

Consolidated CAS exclusive of stockpile write- downs

 

 

Consolidated Capital Expenditures

 

Attributable Capital Expenditures

Region   (Kozs, Mlbs)   ($/oz, $/lb) b   ($/oz, $/lb) b   ($M) c   ($M) c
Nevada a

1,700 - 1,800

$600 - $650

$600 - $650

$500 - $550

$500 - $550

La Herradura  

200 - 250

 

$650 - $700

  $650 - $700  

$125 - $175

 

$125 - $175

North America  

1,900 - 2,000

 

$600 - $650

  $600 - $650  

$625 - $675

 

$625 - $675

Yanacocha

475 - 525

$650 - $700

$600 - $650

$225 - $275

$100 - $150

La Zanja

40 - 50

Conga              

$200 - $250

 

$100 - $125

South America  

550 - 600

 

$650 - $700

  $600 - $650  

$425 - $525

 

$200 - $275

Boddington

700 - 750

$1,050 - $1,150

$850 - $950

$100 - $150

$100 - $150

Other Australia/NZ  

925 - 975

 

$1,000 - $1,100

  $950 - $1,050  

$175 - $225

 

$175 - $225

Australia/ New Zealand

 

1,625 - 1,725

 

$1,000 - $1,100

  $900 - $1,000  

$275 - $325

 

$275 - $325

Batu Hijau, Indonesia d

 

20 - 30

 

$2,100 - $2,300

  $900 - $1,000  

$75 - $125

 

$25 - $75

Ahafo

525 - 575

$550 - $600

$550 - $600

$225 - $275

$225 - $275

Akyem  

50 - 100

 

$450 - $500

  $450 - $500  

$225 - $275

  $225 -$275
Africa  

625 - 675

 

$525 - $575

  $525 - $575  

$475 - $525

 

$475 - $525

Corporate/Other              

$20 - $30

 

$20 - $30

Total Gold  

4,800 - 5,100

 

$750 - $825

  $675 - $750  

$2,000 - $2,200

 

$1,700 - $1,900

Boddington

60 - 70

$2.75 - $2.95

$2.45 - $2.65
Batu - Hijau  

70 - 75

 

$4.70 - $5.10

  $2.20 - $2.40        
Total Copper  

135 - 145

 

$4.05 - $4.40

  $2.25 - $2.50        
 
a Nevada 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 $750 - $825 per ounce inclusive of stockpile write-downs or $675 - $750 per ounce exclusive of stockpile write-downs. CAS Outlook is inclusive of hedge gains and losses.
c Excludes capitalized interest of approximately $88 million, consolidated and attributable.
d Assumes Batu Hijau economic interest of 48.5% for 2013, subject to final divestiture obligations.
 

2013 Expense Outlook 8

   
         
 

 

Consolidated Expenses

Attributable Expenses

Description

    ($M)   ($M)
General & Administrative

$180 - $230

$180 - $230

DD&A excluding stockpile write-downs

$1,050 - $1,100

$900 - $950

DD&A including stockpile write-downs

$1,250 - $1,300

$1,000 - $1,050

Exploration Expense

$250 - $300

$225 - $275

Advanced Projects & R&D

$250 - $300

$225 - $275

Other Expense

$300 - $350

$200 - $250

Sustaining Capital

$1,200 - $1,300

$1,000 - $1,100

Interest Expense

$275 - $325

$250 - $300

Tax Rate a

0% - 5%

0% - 5%

All-in sustaining cost excluding stockpile write-downs ($/ounce) b

$1,100 - $1,200

$1,100 - $1,200

All-in sustaining cost including stockpile write-downs ($/ounce) b  

$1,100 - $1,200

 

$1,100 - $1,200

 
aAlthough, the Company expects to remain in a pretax loss for the year, it does not anticipate being in an overall tax benefit position. Income tax expense equal to 0-5% of the loss is projected. This projected expense primarily relates to mining taxes in Nevada and Peru.
bAll-in sustaining cost (“AISC”) is a non-GAAP metric defined as the sum of cost applicable to sales (including all direct and indirect costs related to current gold production incurred to execute on the current mine plan), remediation costs (including operating accretion and amortization of asset retirement costs), G&A, exploration expense, advanced projects and R&D, other expense, net of one-time adjustments and sustaining capital. Note that the Company has updated this metric to now include the sum of costs associated with producing and selling an ounce of gold, exclusively, from all operations. See the AISC disclosure starting on page 15 of this release.
 
1Non-GAAP measure. See page 18 for reconciliation to costs applicable to sales which was $3,733 million and $3,107 million for the nine months ended September 30, 2013 and 2012, respectively.
2Non-GAAP measure. See page 13 for reconciliation to net income attributable to stockholders which was ($1,296) million and $1,136 million for the nine months ended September 30, 2013 and 2012, respectively.
3Amounts reported are on a consolidated basis, unless otherwise indicated.
4Non-GAAP measure. See pages 15 to 18 for reconciliation to gold costs applicable to sales which was $885 million and $950 million for the three months ended September 30, 2013 and 2012, respectively.
5CAS excludes Amortization and Reclamation and remediation. See pages 13 to 14.
6Payable on December 27, 2013 to shareholders of record as of December 5, 2013.
7Includes 14,000 and 7,000 attributable ounces in the third quarter 2013 and 2012, respectively, from our interest in Duketon.

82013 Outlook and 2013 Expense Outlook referenced in this release are based upon management’s good faith estimates as of October 31, 2013, and are considered “forward-looking statements.” References to outlook guidance are based on current mine plans, assumptions including, without limitation, metal prices, oil prices, Australian dollar exchange rate, current geotechnical, metallurgical, hydrological and other physical conditions, which are subject to risk and uncertainty as discussed in the “Cautionary Statement” on page 19 and in the section entitled “Risk Factors” in the Company’s Form 10-K filed with the SEC on February 22, 2013.

 

NEWMONT MINING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(unaudited, in millions except per share)
           
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
 
Sales $ 1,983 $ 2,480 $ 6,153 $ 7,392
 
Costs and expenses
Costs applicable to sales (1) 1,036 1,088 3,733 3,107
Amortization 299 272 981 751
Reclamation and remediation 20 17 56 49
Exploration 60 115 195 309
Advanced projects, research and development 67 74 165 258
General and administrative 48 51 158 162
Write-downs 3 - 2,265 -
Other expense, net   84     131     260     377  
  1,617     1,748     7,813     5,013  
Other income (expense)
Other income, net 290 52 366 121
Interest expense, net   (76 )   (67 )   (211 )   (190 )
  214     (15 )   155     (69 )
Income (loss) before income and mining tax and other items 580 717 (1,505 ) 2,310
Income and mining tax benefit (expense) (154 ) (228 ) (10 ) (746 )
Equity loss of affiliates   1     (9 )   (6 )   (39 )
Income (loss) from continuing operations 427 480 (1,521 ) 1,525
Income (loss) from discontinued operations   (21 )   (33 )   53     (104 )
Net income (loss) 406 447 (1,468 ) 1,421
Net loss (income) attributable to noncontrolling interests   2     (80 )   172     (285 )
Net income (loss) attributable to Newmont stockholders $ 408   $ 367   $ (1,296 ) $ 1,136  
 
Net income (loss) attributable to Newmont stockholders:
Continuing operations $ 429 $ 400 $ (1,349 ) $ 1,240
Discontinued operations   (21 )   (33 )   53     (104 )
$ 408   $ 367   $ (1,296 ) $ 1,136  
Income (loss) per common share
Basic:
Continuing operations $ 0.86 $ 0.81 $ (2.72 ) $ 2.50
Discontinued operations   (0.04 )   (0.07 )   0.11     (0.21 )
$ 0.82   $ 0.74   $ (2.61 ) $ 2.29  
Diluted:
Continuing operations $ 0.86 $ 0.81 $ (2.72 ) $ 2.48
Discontinued operations   (0.04 )   (0.07 )   0.11     (0.21 )
$ 0.82   $ 0.74   $ (2.61 ) $ 2.27  
 
Cash dividends declared per common share $ 0.25 $ 0.35 $ 1.025 $ 1.05

_____________________________________________________________

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