Newmont sees soaring profits

Vancouver – The third quarter of 2003 was a stellar one for the world’s largest gold miner.

Newmont Mining (NEM-N) posted a five fold jump profits in the three month period ended Sept. 30, as higher gold prices led to significantly improved profit margins.

The Denver-based company tallied earnings of US$114.4 million, or US$0.28 a share, for the quarter ended Sept. 30, compared with US$20.8 million, or US$0.05 cents, a share in the same period of 2002.

“Higher gold prices and significantly higher margins are being reflected in strong bottom-line earnings per share growth.” Says Newmont’s CEO, Wayne Murdy.

Revenues came in at US$897 million a 25% jump from the US$720.1 million recorded in the third quarter of 2002. Operating cash flows during the quarter tallied US$209.5 million. Driving the increase was a much higher realized gold price of US$366 per oz, up from the US$315 per oz banked in 2002. During the quarter, Newmont sold 2.06 million oz of gold, slightly lower than the 2.09 million ozs sold a year ago.

The Yanacocha mine in Peru continued to deliver the goods with production coming in at 451,200 oz during the quarter, a 37% increase of last year. Total cash costs rang in a favourable US$113 per oz.

Another big performer was the Batu Hijau copper-gold mine in Indonesia where realized net cash costs tallied US$0.10 per lb, a record low. This marks a signifcant improvement ofver the costs of US$0.24 per lb tallied a year earlier. The operation benfitted from higher ore grades and higher gold by-product credits were received. The operation produced 103.2 million lbs of copper for the third quarter, some 10% lower than a year earlier but the mine contributed equity income of US$36.0 million in the third quarter, thanks to a 36% higher realized copper price of US$0.84 per lb, compared to US$0.62 for the year ago quarter. Gold sales rang in at 116,500 ozs, up from the 96,900 last year.

On the down side, total cash cost of production rose to US$201 an oz, from US$189 an oz last year.

Overall, the North American operations contributed 786,200 oz of gold, some 6% lower than the third quarter of 2002 as lower gold sales from Nevada and a 25% decline in sales from the Canadian operations hit the bottom line.

In South America, the nearly depleted Kori Kollo mine in Bolivia added 43,800 equity ozs, tot he Yanacocha total. Total cash costs jumped 31% to US$199 per oz., giving the district total of 495,000 oz of gold at a total cash cost of US$121 per oz.

Newmont’s Australian mines posted higher output, which was offset by higher costs. Total sales for the region came in at 511,800 oz in the quarter, up from 475,300 poured last year. Total cash costs rose to US$235 per oz, from US$201, due to a 25% rise in the Australian dollar over the past year.

Newmont also repaid US$138.7 million in long-term debt during the quarter and at Sept. 30, held US$419.4 million in cash. In addition, the company boosted its quarterly dividend by 25% to US$0.05 per share.

For 2003 gold production is slated to hit 7.2 million to 7.4 million oz at total cash costs of US$202-to-US$208 per oz.