Newmont Generates First Quarter 2010 Operating Cash Flow of $728 Million; Adjusted Net Income(1) of $408 million, up 105% from First Quarter 2009

DENVER, April 27 /PRNewswire-FirstCall/ -- Newmont Mining Corporation (NYSE: NEM) ("Newmont" or  the "Company") today announced first quarter results, with net cash from continuing operations of $728 million.  Equity gold production for the quarter was 1.3 million ounces and the average realized gold price was $1,106 per ounce.  Costs applicable to sales for gold were $480 per ounce on a co-product basis, resulting in adjusted net income(1) of $408 million ($0.83 per share) compared to $199 million ($0.42 per share) in the prior year quarter. Net income attributable to Newmont stockholders on a GAAP basis was $546 million ($1.11 per share) compared to $189 million ($0.40 per share) in the prior year quarter.

First Quarter 2010 Highlights:

• Equity gold and copper production of 1.3 million ounces and 90 million pounds, respectively;
• Average realized gold and copper price of $1,106 per ounce and $3.33 per pound, respectively;
• Costs applicable to sales for gold and copper of $480 per ounce on a co-product basis ($241 on a by-product basis) and $0.78 per pound, respectively;
• Sales of $2.2 billion, an increase of 46% over the first quarter of 2009;
• Gold operating margin(2) of 57%, up from 52% in the first quarter of 2009;
• Net cash provided from continuing operations of $728 million, up 91% from the first quarter of 2009;
• Adjusted net income(1) of $408 million ($0.83 per share), up 105% (98% on a per share basis) from the first quarter of 2009; and
• Maintaining 2010 outlook for gold production, costs applicable to sales and capital expenditures.

"With a 22% increase in our average realized gold price, our net gold operating margin expanded by 32% to $626 per ounce, further demonstrating our ability to provide significant gold price leverage through expanding cash operating margins," said Richard O'Brien, President and Chief Executive Officer.  "We also recently secured the mining lease for our Akyem project in Ghana and continue our dialogue with local communities and Ghanaian authorities. In addition, we are advancing our development plans at Conga in Peru following a successful public meeting with local stakeholders. The strength of our balance sheet coupled with the progress being made on our advanced development assets, Newmont is well positioned to invest in our project pipeline while maintaining our financial strength and flexibility."

The Company is maintaining its previously announced 2010 outlook for equity gold production of 5.3 to 5.5 million ounces and costs applicable to sales of between $450 and $480 per ounce on a co-product basis.  Costs applicable to sales are expected to change by approximately $5 per ounce for every $10 change in the oil price and by roughly $5 per ounce for every 0.10 change in the Australian dollar exchange rate for the remainder of the year.

Regional Operations

In the first quarter of 2010, the Company reported equity gold production of 1.3 million ounces at costs applicable to sales of $480 per ounce on a co-product basis, in line with management's expectations. Costs applicable to sales per gold ounce increased 11% in the first quarter of 2010 from 2009 due to higher mining and milling costs and lower production in Nevada and at Yanacocha in Peru.

North America

Nevada – Nevada produced 433,000 equity ounces of gold at costs applicable to sales of $610 per ounce during the first quarter.  Equity gold production met expectations and costs applicable to sales were slightly higher than expected due to lower by-product credits, higher underground mining costs and higher production taxes.  Gold ounces produced decreased 16% in the first quarter of 2010 from 2009 due to lower grade, throughput and recovery. Costs applicable to sales per ounce increased 20% in the first quarter of 2010 from 2009 due to lower production and higher surface mining costs related to geotechnical issues at Gold Quarry and lower capitalized mine development activities.

The Company continues to expect 2010 equity gold production from Nevada of approximately 1.6 to 1.7 million ounces at costs applicable to sales of between $590 and $630 per ounce.

La Herradura – Equity gold production at La Herradura in Mexico during the first quarter was 40,000 ounces at costs applicable to sales of $344 per ounce.  Equity gold production was slightly higher than expected and costs applicable to sales were lower than expected due to higher leach placement and production from the new Soledad and Dipolos deposits.  Gold ounces produced increased 60% in the first quarter of 2010 from 2009 due to the commencement of production from the Soledad and Dipolos pits in January 2010. Costs applicable to sales per ounce decreased 11% in the first quarter of 2010 from 2009 due to higher production.

The Company expects La Herradura equity gold production to reach 140,000 to 150,000 ounces in 2010 with costs applicable to sales of between $400 and $430 per ounce.  

South America

Yanacocha – Equity gold production during the first quarter at Yanacocha in Peru was 217,000 ounces at costs applicable to sales of $372 per ounce.  Equity gold production was lower than expected due to lower leach production partially offset by higher mill production. Costs applicable to sales were higher than expected due to higher milling costs, lower leach production, higher royalties and lower by-product credits.  Gold ounces produced decreased 15% in the first quarter of 2010 from 2009 due to lower mill grade and recovery combined with lower leach tons placed related to mine sequencing. Costs applicable to sales per ounce increased 15% in the first quarter of 2010 from 2009 due to lower production, higher waste mining and higher costs related to maintenance, workers' participation and royalties.

The Company continues to expect 2010 equity gold production at Yanacocha of between 750,000 and 810,000 ounces at costs applicable to sales of between $360 and $400 per ounce.

Asia Pacific

Boddington – As the Company continues to ramp-up to full production at Boddington, equity gold and copper production during the first quarter was 158,000 ounces and 14 million pounds, respectively, at costs applicable to sales of $532 per ounce ($436 per ounce on a by-product basis(3)) and $2.15 per pound.  

The Company continues to expect 2010 equity gold production at Boddington of 800,000 to 875,000 ounces with costs applicable to sales of $375 to $395 per ounce on a co-product basis ($295 to $315 per ounce on a by-product basis) and 2010 equity copper production of 65 to 75 million pounds at costs applicable to sales of between $1.30 and $1.45 per pound.  

Batu Hijau – Equity gold and copper production during the first quarter at Batu Hijau in Indonesia were 88,000 ounces and 76 million pounds, respectively, at costs applicable to sales of $215 per ounce and $0.67 per pound, respectively. Equity gold and copper production were in line with expectations and costs applicable to sales were slightly better than expected due to lower mining costs and a lower allocation of costs to gold. Copper and gold produced increased 79% and 181% in the first quarter of 2010 from 2009, respectively, due to higher throughput and grade as a result of mining in the bottom of Phase 5. Costs applicable to sales decreased 25% and 47% for copper and gold, respectively, in the first quarter of 2010 from 2009 due to higher production and lower mining costs.

The Company expects 2010 equity gold and copper production at Batu Hijau to decrease to between 365,000 and 400,000 ounces, and to between 270 and 295 million pounds, respectively, due to the 2009 7% share divestiture completed in March 2010.  The Company's current economic interest at Batu Hijau is 48.5%.  The Company continues to expect 2010 costs applicable to sales of between $265 and $285 per ounce and $0.75 and $0.85 per pound.  

Other Australia/New Zealand - Equity gold production during the first quarter was 276,000 ounces at costs applicable to sales of $558 per ounce.  Equity gold production was in line with expectations as higher production at Kalgoorlie was offset by lower production at Tanami.  Costs applicable to sales were slightly higher than expected due to the stronger Australian dollar.  Gold ounces produced decreased 10% in the first quarter of 2010 from 2009, due to lower production at Tanami, Jundee and Waihi, partially offset by increased production at Kalgoorlie. Production decreased due to lower grade at Tamami, Jundee and Waihi and lower throughput as a result of mill maintenance at Tanami. Production increased at Kalgoorlie due to higher grade and throughput. Costs applicable to sales per ounce increased 13% in the first quarter of 2010 from 2009 due to lower production and the stronger Australian dollar.

The Company continues to expect 2010 equity gold production at the Company's other Australia/New Zealand operations of between 1.06 and 1.16 million ounces at costs applicable to sales of $530 to $570 per ounce.

Africa

Ahafo – Equity gold production during the first quarter at Ahafo in Ghana was 120,000 ounces at costs applicable to sales of $542 per ounce, in line with expectations.  Gold ounces produced decreased 8% in the first quarter of 2010 from 2009 due to lower grade and recovery, partially offset by higher throughput. Costs applicable to sales per ounce increased 36% in the first quarter of 2010 from 2009 due to lower production and higher labor and fuel costs.

The Company continues to expect 2010 equity gold production at Ahafo of between 460,000 and 500,000 ounces at costs applicable to sales of $515 to $555 per ounce.

Capital Update

Consolidated capital expenditures were $309 million during the first quarter. The Company is maintaining its 2010 consolidated capital expenditure outlook of between $1.4 and $1.6 billion with approximately 30% to be invested in each of the North America and Asia Pacific regions, and the remaining 40% at other locations.  Approximately 40% of 2010 consolidated capital expenditures is expected to be related to major project initiatives, including further development of the Company's Akyem project in Ghana, the Conga project in Peru, Hope Bay in Canada and other projects, while the remaining 60% is expected to be for maintenance and sustaining expenditures.

Updated 2010 Outlook(4)

In addition to the minor production outlook adjustments related to the recent Batu Hijau share divestiture, the Company is increasing outlook for Advanced Products and R&D spending to $230 to $250 million.  The increase is primarily related to higher anticipated spending at Hope Bay as preparations are being made to develop the decline in the second half of 2010.

The Company's financial statements can be found on its website at www.newmont.com.

The Company's financial statements can be found on its website at www.newmont.com.

The Company's financial statements can be found on its website at www.newmont.com.

Supplemental Information

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles ("GAAP"). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Reconciliation of Adjusted Net Income to GAAP Net Income

Management of the Company uses the non-GAAP financial measure Adjusted net income to evaluate the Company's operating performance, and for planning and forecasting future business operations.  The Company believes the use of Adjusted net income allows investors and analysts to compare the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the production and sale of minerals to similar operating results of other mining companies, by excluding exceptional or unusual items, income or loss from discontinued operations and the permanent impairment of assets, including marketable securities and goodwill.  Management's determination of the components of Adjusted net income are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.  

The table below sets forth a reconciliation of adjusted net income to GAAP net income, the directly comparable GAAP financial measure.

Reconciliation of Co-Product Costs Applicable to Sales to By-Product Costs Applicable to Sales

Sales and Costs applicable to sales for Boddington are presented in the Condensed Consolidated Financial Statements for both gold and copper due to the significant portion of copper production (approximately 15-20% of total sales based on the latest life-of-mine plan and metal price assumptions). The co-product method allocates costs applicable to sales to each metal based on specifically identifiable costs where applicable and on a relative proportion of sales values for other costs. Management also assesses the performance of the Boddington mine on a by-product basis due to the majority of sales being derived from gold and to determine contingent consideration payments to AngloGold. The by-product method deducts copper sales from costs applicable to sales as shown in the following tables:

To view complete financial disclosure, including regional mine statistics, Results of Consolidated Operations, Liquidity and Capital Resources, Management's Discussion & Analysis, the Form 10-Q, and a complete outline of the 2009 Operating and Financial guidance by region, please see www.newmont.com.  

The Company's first quarter and earnings conference call and web cast presentation will be held on Tuesday, April 27, 2010 beginning at 11:00 a.m. Eastern Time (9:00 a.m. Mountain Time).  To participate:

The conference call also will be simultaneously carried on our web site at www.newmont.com under Investor Relations/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 which are intended to be covered by the safe harbor created by such sections and other applicable laws.  Such forward-looking statements include, without limitation: (i) estimates of future production and sales; (ii) estimates of future capital expenditures, costs applicable to sales, other expenses and taxes, for specific operations and on a consolidated basis; (iii) statements regarding future exploration expenditures, results and reserves; (iv) statements regarding fluctuations in capital and currency markets; (v) statements regarding potential cost savings, productivity, operating performance, and cost structure; and (vi) expectations regarding the ramp-up, development, mine life, production and costs applicable to sales and exploration potential of the Company's projects, including Boddington, Akyem, Conga and Hope Bay.  Estimates or expectations of future events or results are based upon certain assumptions, which may prove to be incorrect.  Such assumptions, include, but are not limited to: (i) there being no significant change to current geotechnical, metallurgical, hydrological and other physical conditions; (ii) permitting, development, operations and expansion of the Company's projects being consistent with current expectations and mine plans; (iii) political developments in any jurisdiction in which the Company operates being consistent with its current expectations; (iv) certain exchange rate assumptions for the Australian dollar to the U.S. dollar, as well as other the exchange rates being approximately consistent with current levels; (v) certain price assumptions for gold, copper and oil; (vi) certain assumptions for taxes, royalties and other expenses; (vii) prices for key supplies being approximately consistent with current levels; and (viii) the accuracy of our current mineral reserve and mineral resource estimates. 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 future results expressed, projected or implied by such forward-looking statements.  Such risks include, but are not limited to, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, political and operational risks in the countries in which we operate, and governmental regulation and judicial outcomes.  For a more detailed discussion of such risks and other factors, see the Company's 2009 Annual Report on Form 10-K, filed on February 25, 2010, with the Securities and Exchange Commission, as well as the Company's other SEC filings.  The Company does not undertake any obligation to release publicly revisions to any "forward-looking statement," to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

(1) See reconciliation of adjusted net income to net income on a GAAP basis on page 10.

(2 ) “Gold operating margin” defined as average realized price per ounce less costs applicable to sales per ounce, excluding amortization and reclamation per ounce.

(3) See reconciliation from by-product costs applicable to sales to GAAP costs applicable to sales on page 11.

SOURCE Newmont Mining Corporation

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