-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GTT5mqtGbN8qBsFxzBEaIKPJefjuwTVV/GGwF83nssrbq28k1WANRyAFROFXVuOH Hie0j1PJEwK2PTlcF/QCWA== 0000891092-04-000506.txt : 20040204 0000891092-04-000506.hdr.sgml : 20040204 20040204121511 ACCESSION NUMBER: 0000891092-04-000506 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040204 ITEM INFORMATION: FILED AS OF DATE: 20040204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEWMONT MINING CORP /DE/ CENTRAL INDEX KEY: 0001164727 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 841611629 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31240 FILM NUMBER: 04565617 BUSINESS ADDRESS: STREET 1: 1700 LINCOLN STREET CITY: DENVER STATE: CO ZIP: 80203 BUSINESS PHONE: 303-863-7414 MAIL ADDRESS: STREET 1: 1700 LINCOLN STREET CITY: DENVER STATE: CO ZIP: 80203 FORMER COMPANY: FORMER CONFORMED NAME: DELTA HOLDCO CORP DATE OF NAME CHANGE: 20020109 8-K 1 e16803_8k.txt CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 4, 2004 Newmont Mining Corporation ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware ---------------------------------------------- (State or Other Jurisdiction of Incorporation) 001-31240 ------------------------ (Commission File Number) 84-1611629 ----------------------------------- (I.R.S. Employer Identification No. 1700 Lincoln Street, Denver, Colorado 80203 --------------------------------------------------- (Address of principal executive offices) (zip code) (303) 863-7414 ---------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following information is furnished pursuant to Item 9 "Regulation FD Disclosure" and Item 12 "Results of Operations and Financial Condition". On February 4, 2004, Newmont Mining Corporation, a Delaware corporation, issued a news release reporting its financial results for the quarter ended and year ended December 31, 2003. A copy of the news release is furnished as Exhibit 99.1 to this report. 2 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. By: /s/ Britt D. Banks ------------------- Name: Britt D. Banks Title: Vice President, General Counsel and Secretary Dated: February 4, 2004 3 EXHIBIT INDEX Exhibit Number Description of Exhibits 99.1 Press Release dated February 4, 2004 4 EX-99.1 3 e16803ex99_1.txt PRESS RELEASE Exhibit 99.1 Newmont Mining Corporation Announces Fourth Quarter Net Income of $153 million ($0.36 per share) and 2003 Net Income of $476 million ($1.16 per share) DENVER, Feb. 4 /PRNewswire-FirstCall/ -- Newmont Mining Corporation (NYSE: NEM) today announced fourth quarter net income of $153.1 million ($0.36 per share), an increase of 104% from net income of $75.1 million ($0.19 per share) for the fourth quarter of 2002. Newmont earned net income of $475.7 million ($1.16 per share, basic) for 2003, an increase of 208% from $154.3 million ($0.42 per share, basic) for 2002. Fourth quarter and 2003 highlights include: * Equity gold sales(1) for the fourth quarter of 1.7 million ounces at total cash costs(2) of $197 per ounce; equity gold sales of 7.4 million ounces at total cash costs of $203 per ounce for 2003; * Net cash provided by operating activities for the fourth quarter of $151 million, after net working capital increases of approximately $93 million; net cash provided by operating activities of $589 million for 2003, after settlement of cash flow hedges of approximately $121 million and net working capital increases of $82 million; * Cash exceeding debt by $237 million at year-end; and * Record year-end equity gold reserves of 91.3 million ounces. Wayne W. Murdy, Chairman and Chief Executive Officer of Newmont, said: "We ended the year with a strong fourth quarter. Our core operations continue to deliver solid operating results and with higher metal prices, bottom-line earnings more than tripled to $476 million. In addition, our exploration results exceeded expectations and as announced today, we reported record year- end gold reserves." Fourth Quarter Year 2003 2002 2003 2002 Financial (in millions, except per share) Revenues $821.4 $798.7 $3,214.1 $2,657.9 Net cash provided by operating activities $151.2 $225.2 $588.8 $670.3 Net income applicable to common shares $153.1 $75.1 $475.7 $154.3 Net income per common share, basic $0.36 $0.19 $1.16 $0.42 Operating Equity gold sales (000 ounces)(1) 1,715.1 2,215.7 7,383.6 7,631.7 Average realized price ($/ounce) $394 $325 $366 $313 Total cash costs ($/ounce)(2) $197 $178 $203 $189 Total production costs ($/ounce)(2) $259 $242 $266 $250 1. Equity gold sales ounces are those attributable to Newmont's ownership or economic interest. 2. For a reconciliation of total cash costs and total production costs per ounce (non-GAAP measures of performance) to costs applicable to sales calculated and presented under GAAP, please refer to the Supplemental Information attached. Financial & Operating Review Fourth quarter net income applicable to common shares was $153.1 million ($0.36 per share), compared with net income of $75.1 million ($0.19 per share) for the fourth quarter of 2002. For 2003, net income applicable to common shares was $475.7 million ($1.16 per share, basic) compared with net income of $154.3 million ($0.42 per share, basic), for 2002. For the fourth quarter, the Company sold 1,715,100 equity ounces of gold, 23% lower than the prior year quarter, largely as a result of lower sales in Nevada and Australia. The average realized gold price for the fourth quarter was $394 per ounce, a 21% increase over the prior year quarter. For 2003, the Company sold 7,383,600 equity ounces of gold, 3% lower than 2002, largely as a result of the divestiture of non-core operations during 2003. The average realized gold price for 2003 was $366 per ounce, a 17% increase over 2002. The Company generated cash from operating activities of $151.2 million in the fourth quarter, after net working capital increases of $93.3 million. The increase in fourth quarter working capital was driven by in-circuit inventory increases and the scheduling of gold shipments. The majority of this increase in working capital is expected to reverse in the first half of 2004. For 2003, cash generated from operating activities totaled $588.8 million after utilizing $121.0 million for the settlement of effective gold derivative instruments classified as cash flow hedges and net working capital increases of $81.9 million. Net income for the fourth quarter was impacted by the following: -- a $30 million ($0.07 per share) non-cash, after-tax loss on an inherited guarantee of QMC Finance Pty Ltd (QMC) debt; -- a $10 million ($0.02 per share) after-tax loss on the early extinguishment of debt; -- an $18 million ($0.04 per share) non-cash, after-tax impairment charge at Golden Giant in Canada; and -- a $72 million ($0.17 per share) tax benefit from the release of valuation allowances. These items had the net effect of increasing fourth quarter net income by $14 million ($0.03 per share). Net income for the fourth quarter of 2002 was impacted by the following: -- a $17.9 million ($0.04 per share) net after tax loss on derivative instruments; and -- a $21.9 million ($0.05 per share) tax benefit. Operating Highlights - Fourth Quarter North America Q4 2003 Q4 2002 2003 2002 Equity gold sales (000 ozs) 731.9 932.0 2,902.6 3,224.0 Total cash costs ($/ounce)(1) $218 $199 $233 $220 * North American operations sold 731,900 ounces in the fourth quarter, 21% lower than the year ago quarter, due largely to lower sales in Nevada. * Nevada operations sold 625,700 ounces in the fourth quarter (-21%) due to lower grade refractory ores processed, reduced mill throughput due to increased stripping at the Gold Quarry and Section 30 laybacks, and an in-process inventory increase. Total cash costs of $221 per ounce (+11%) were driven by higher labor, power and mine maintenance costs. * Golden Giant in Canada sold 67,900 ounces in the fourth quarter (-15%) at total cash costs of $181 per ounce (-7%). Lower cash costs were driven by changes in the mine plan, which was refocused on eliminating marginal stopes from the limited remaining mine life. The revised mine plan, along with higher projected life-of-mine operating costs due to a stronger Canadian dollar and higher power and labor costs, led to the impairment charge in the fourth quarter. * Holloway in Canada sold 15,000 equity ounces in the fourth quarter (-44%) at total cash costs of $353 per ounce (+52%). Lower sales were due to lower grades processed as a result of temporary production development delays. Higher cash costs were a result of lower sales, higher labor costs and a stronger Canadian dollar. * La Herradura in Mexico sold 16,900 equity ounces in the fourth quarter (+8%) at total cash costs of $137 per ounce (-20%). Lower cash costs were largely due to improved grades. * Mesquite in California sold 6,400 ounces at total cash costs of $259 per ounce. Mesquite was sold effective November 7, 2003. South America Q4 2003 Q4 2002 2003 2002 Equity gold sales (000 ozs) 351.9 411.3 1,626.4 1,426.3 Total cash costs ($/ounce)(1) $128 $119 $126 $131 * In the fourth quarter, Yanacocha in Peru sold 337,900 equity ounces (-4%) at total cash costs of $126 per ounce (+13%). Higher cash costs were driven by increased fuel, labor and royalty costs. * Kori Kollo in Bolivia sold 14,000 equity ounces (-76%) as a result of lower grades processed (-36%) due to the cessation of mining activities in October 2003. The current gold production is being derived from flushing the leach pads. Total cash costs of $165 per ounce were unchanged from a year ago. Australia Q4 2003 Q4 2002 2003 2002 Equity gold sales (000 ozs) 439.0 513.0 1,889.2 1,684.6 Total cash costs ($/ounce)(1) $231 $190 $236 $191 * Australian operations sold 439,000 equity ounces in the fourth quarter (-14%), largely attributable to lower sales at the Yandal operations and at Pajingo. Total cash costs of $231 per ounce were up 22% due to the stronger Australian dollar, which appreciated by approximately 28% from the year ago quarter. * Kalgoorlie sold 95,500 equity ounces (-8%) at total cash costs of $265 per ounce (+30%) in the fourth quarter. Gold production was up 14% due to a combination of increased mill throughput, higher grades from positive grade reconciliations and significantly higher recoveries. * Pajingo sold 71,600 ounces (-18%) at total cash costs of $144 per ounce (+38%) in the fourth quarter. Gold production was down 5% as lower throughput offset higher grades. * Tanami sold 139,300 ounces (+4%) at total cash costs of $244 per ounce (+13%) in the fourth quarter. Gold production was up 13% as a result of higher grades processed (+15%). * Yandal sold 132,600 ounces (-29%) at total cash costs of $240 per ounce (+17%) in the fourth quarter. Gold production was down 9% as reduced mill throughput, due to ore hardness, and scheduled mill maintenance at Jundee more than offset higher grades. In addition, lower production at Bronzewing as it approaches closure in March 2004, and the sale of Wiluna on December 4, 2003, contributed to the production decrease. * Golden Grove sold 28.1 million pounds of copper (+202%) and 41.6 million pounds of zinc (+39%) at net cash costs of $0.67 (+16%) and $0.14 (-39%) per pound, respectively, in the fourth quarter. Copper and zinc production for the fourth quarter were both down compared with the year ago quarter due to lower grades and recoveries, partially offset by increased mill throughput. Batu Hijau (Indonesia) Q4 2003 Q4 2002 2003 2002 Equity copper sales (M lbs) 79.1 90.8 343.4 362.3 Equity gold sales (000 ozs) 66.2 77.8 328.9 278.0 Net cash costs ($/lb Cu)(1) $0.36 $0.30 $0.23 $0.31 * Batu Hijau in Indonesia contributed record equity income of $21.1 million for the fourth quarter, benefiting from a realized copper price of $1.05 per pound, 36% higher than the year ago quarter. * Equity copper sales totaled 79.1 million pounds for the fourth quarter (-13%) at net cash costs of $0.36 per pound (+20%). Copper production was down 4% due to marginally lower grades and recoveries, but largely in accordance with the mine plan. Increased costs were due to higher utilization of the mining fleet, resulting in higher maintenance and fuel costs, and increased grinding media consumption at the mill. * As a result of higher metal prices, improved operating and financial results, and increased life of mine expectations regarding production, costs and economics, Batu Hijau will begin paying dividends in 2004. This will result in a decrease in Newmont's reported economic interest from 56.25% to 52.875%, in recognition of the 6% net economic interest held by the project's Indonesian shareholder. While the lower economic interest has been applied to reported 2003 reserves, it will only be applied with respect to earnings when PT Newmont Nusa Tenggara, the operator of Batu Hijau, reports positive retained earnings. This is expected to occur in the second or third quarter of 2004. Other Operations Q4 2003 Q4 2002 2003 2002 Equity gold sales (000 ozs) 123.1 169.5 587.4 636.5 Total cash costs ($/ounce)(1) $165 $166 $168 $155 * Zarafshan in Uzbekistan sold 46,200 equity ounces (-25%) at total cash costs of $144 per ounce (+9%) in the fourth quarter. Production was down 16% due to lower grades placed on the leach pads (-23%) following depletion of the higher grade stockpiles. * Ovacik in Turkey sold 30,500 ounces (-26%) at total cash costs of $144 per ounce (+33%) in the fourth quarter. Production was essentially unchanged (-3%) as lower tons milled (-18%) were offset by higher grades (+11%) and higher recoveries (+3%). Increased cash costs were due to an increase in mining and site support costs. * Martha in New Zealand sold 35,400 ounces (+6%) at total cash costs of $143 per ounce (-31%) in the fourth quarter. Gold production increased 25% due to higher grades (+12%), higher throughput (+10%) and improved recoveries (+3%). Lower cash costs were due to higher production and increased by-product revenue, more than offsetting the rise in the New Zealand dollar. * Minahasa in Indonesia sold 11,000 equity ounces (-67%) at total costs of $383 per ounce (+48%) in the fourth quarter. Increased cash costs were due to reduced sales and increased reclamation and closure-related expenditures. While mining ceased at Minahasa in October 2001, the processing of stockpiled ore is expected to continue through the second quarter of 2004. 1. For a reconciliation of total cash costs per ounce or net cash costs per pound (non-GAAP measures of performance) to costs applicable to sales calculated and presented under GAAP, please refer to the Supplemental Information attached. Other Highlights Cash Position Cash and cash equivalents totaled $1.3 billion at the end of 2003, reflecting net proceeds of $1.0 billion from the November equity offering. During the fourth quarter, cash was utilized for: -- the early extinguishment of debt, including related fees and premiums ($309.8 million); -- additions to property, plant and mine development ($135.0 million); and -- payment of common stock dividends ($22.1 million). Debt Reduction At year-end, the Company's balance sheet reflected outstanding debt of $1.08 billion, a decrease of $739 million (41%) from year-end 2002. The Company's cash and cash equivalents exceeded its consolidated debt at the end of 2003 by $237 million. On September 22, the Company announced the early redemption of a subsidiary's $100 million 6% Convertible Subordinated Debentures. The debentures were fully redeemed on October 29, 2003. On October 10, the Company announced a tender offer for approximately $177 million of a subsidiary's 8.375% Senior Debentures due 2005. Principal of approximately $125 million was redeemed on November 13, 2003. On October 23, the Company announced a tender offer for $90 million of a subsidiary's 7.5% Notes due 2005. Principal of approximately $70.5 million was redeemed on November 24, 2003. Newmont Capital Portfolio optimization efforts continue. During the quarter, Newmont Capital: -- finalized an agreement with Placer Dome for a 25% interest in the Turquoise Ridge Joint Venture; -- sold the Mesquite mine in California; -- sold the Wiluna mine in Western Australia; -- acquired an interest in a European gold refining and distribution business to complement Newmont's existing downstream business in Australia; -- acquired Moydow's 50% interest in the Ntotoroso property at the Ahafo project in Ghana; -- funded a private placement in Southwestern Gold Resources to fund exploration initiatives; and -- commenced a drilling program at its Alberta heavy oil project, located adjacent to EnCana Resources' Christina Lake thermal project. Newmont Capital also manages the Company's royalty business. For the quarter, royalty revenues totaled $15.5 million (+21%) on higher gold, oil and gas prices. For 2003, royalty revenues totaled $56.3 million (+58%). Project Development & Exploration The Leeville underground project in Nevada is approximately 45% complete and is currently on budget and on schedule, with gold production expected in late 2005. The production and ventilation shafts were 405 feet (24%) and 570 feet (40%), respectively, from surface at year-end. Also in Nevada, construction work is expected to begin in the first quarter of 2004 on a bio-flotation circuit for Mill 5 at Carlin, with an expected start-up in the fourth quarter of 2004. Development of the Phoenix project in Nevada was approved in December, with production accelerated by one year to 2006. Phoenix is expected to deliver annual sales of between 400,000 and 450,000 ounces of gold and 18 to 20 million pounds of copper over an anticipated 15-year mine life. Initial development costs are estimated at approximately $205 million. In Ghana, development of the Ahafo project was approved in December following finalization of the foreign investment agreement. Ahafo is expected to deliver steady-state annual gold sales of approximately 500,000 ounces, with higher production in the initial years. Initial development costs are estimated at approximately $350 million and the contract to construct the project was awarded in January 2004. The Company reported record year-end equity gold reserves of 91.3 million ounces, a 5% increase from the 86.9 million ounces reported at year-end 2002. Commenting on the exploration success, President Pierre Lassonde said: "We have said that one of the Company's most valuable assets is its land position of approximately 60,000 square miles. Our exploration success in 2003, when we discovered more than 12 million ounces, bears testimony to this." During 2003, the Company completed a record three million feet (575 miles) of drilling. Exploration, research and development expenditures of $115.2 million were a 30% increase from 2002. More importantly, the Company added 14.6 million equity ounces to reserves, before depletion and divestments, of which 84% was generated through exploration and 16% from acquiring the minority interest at the Ahafo project in Ghana, minority shareholdings at Tanami and Martha, and a 25% interest in the Turquoise Ridge joint venture in Nevada. Another 2.8 million ounces of reserve additions were derived from a higher gold price assumption of $325 per ounce. The largest reserve additions in 2003 were from the Company's newest region, Ghana, and its oldest, Nevada, demonstrating the quality of the Company's diversified portfolio of assets. During the quarter, high-grade intercepts from two core holes at the Kenyase deposit at Ahafo in Ghana reinforced the potential for additional mineralization at depth. Positive results throughout the year at the Subenso, Yamfo Central and Kenyase deposits, as well as at Akyem, contributed to year- end reserves in Ghana of almost 12 million ounces. In Nevada, approximately six million ounces of reserve additions have added significant mine life. Reserves were primarily derived from development drilling on the edges of the Gold Quarry and Twin Creeks pits, adding nearly 2 million ounces in each pit. Lone Tree development drilling contributed over 400,000 reserve ounces and added a year to the mine life to 2006, with residual production in 2007. Results in each case reflect increased grade and more continuous high grade mineralization. Further successes are anticipated in each of these pits, with follow-up drilling planned for 2004. Further, significant high grade discovery holes at Midas, Chukar Footwall and Genesis will provide further drilling targets for 2004. In Indonesia, generative exploration and drilling at a satellite copper- gold prospect near Batu Hijau is underway to delineate identified zones of copper and gold mineralization. In addition, progress continues on the feasibility study for the Martabe project on Sumatra. In Peru, a team has been assembled and work has commenced on feasibility studies for an oxide mill at Yanacocha and for the large, gold-copper Minas Conga project. Given the increased reserves and positive development progress, the Company has updated its long-term outlook. In general, production estimates have increased as a result of the addition of Turquoise Ridge, the acceleration of Phoenix by one year and further mine plan optimization efforts. The Company expects that production will range between 7.0 million and 7.5 million ounces per year through 2006, increasing thereafter. The Company now expects that future total cash costs will range between $210 and $230 per ounce, with the increase largely attributable to increased Australian and Canadian dollar exchange rate assumptions and higher energy-related costs. In general, excluding the impacts of currency movements and energy-related costs, total cash costs are expected to trend downwards over time as older, mature operations are closed and lower cost operations, particularly in Ghana, are brought into production. 2004 Guidance The Company expects 2004 equity gold sales of between 7.0 million and 7.2 million ounces at total cash costs of between $220 and $230 per ounce. Increased cash costs are largely attributable to a stronger Australian dollar assumption of $0.74, higher energy-related consumable costs, lower grades processed in Nevada (as mine plans are adjusted to reflect higher gold prices) and at Yanacocha in Peru, and increased royalties and other taxes as a result of higher assumed gold prices. Statements of Consolidated Operations and Comprehensive Income Three Months Ended December 31, 2003 2002 (in thousands, except per share) Revenues Sales - gold $773,405 $777,254 Sales - base metals, net 32,441 8,677 Royalties 15,530 12,816 821,376 798,747 Costs and expenses Costs applicable to sales (exclusive of depreciation, depletion and amortization shown below) Gold 375,297 436,541 Base metals 14,057 6,050 Depreciation, depletion and amortization 143,108 146,161 Exploration, research and development 32,873 33,175 General and administrative 43,636 36,543 Write-down of long-lived assets 29,884 3,369 Other 19,670 23,207 658,525 685,046 Other income (expense) Gain (loss) on investments, net 1,773 (212) Loss on gold commodity derivative instruments, net (1,866) (25,467) Loss on extinguishment of debt (14,302) -- Loss on guarantee of QMC debt (30,000) -- Dividends, interest income, foreign currency exchange and other income 46,752 16,371 Interest, net (17,208) (30,245) (14,851) (39,553) Pre-tax income before minority interest, equity income (loss) and impairment of affiliates 148,000 74,148 Income tax benefit 25,628 21,865 Minority interest in income of subsidiaries (42,457) (35,113) Equity loss and impairment of Australian Magnesium Corporation -- (601) Equity income of affiliates 21,960 14,810 Net income applicable to common shares $153,131 $75,109 Net income $153,131 $75,109 Other comprehensive loss, net (6,319) (36,841) Comprehensive income $146,812 $38,268 Net income per common share, basic and diluted $0.36 $0.19 Basic weighted average common shares outstanding 426,498 401,692 Diluted weighted average common shares outstanding 430,944 403,017 Statements of Consolidated Operations and Comprehensive Income Years Ended December 31, 2003 2002 (in thousands, except per share) Revenues Sales - gold $3,082,936 $2,566,833 Sales - base metals, net 74,820 55,321 Royalties 56,303 35,718 3,214,059 2,657,872 Costs and expenses Costs applicable to sales (exclusive of depreciation, depletion and amortization shown below) Gold 1,655,989 1,580,347 Base metals 44,273 36,040 Depreciation, depletion and amortization 564,481 505,598 Exploration, research and development 115,238 88,886 General and administrative 130,292 115,252 Write-down of long-lived assets 35,260 3,652 Other 49,506 29,372 2,595,039 2,359,147 Other income (expense) Gain on investments, net 83,166 47,086 Gain (loss) on gold commodity derivative instruments, net 22,876 (39,805) Gain on extinguishment of NYOL bonds, net 114,031 -- Gain on extinguishment of NYOL derivative liability, net 106,506 -- Loss on extinguishment of debt (33,832) -- Loss on guarantee of QMC debt (30,000) -- Dividends, interest income, foreign currency exchange and other income 132,198 39,885 Interest, net (88,579) (129,565) 306,366 (82,399) Pre-tax income before minority interest, equity income (loss) and impairment of affiliates and cumulative effect of a change in accounting principle 925,386 216,326 Income tax expense (206,950) (19,900) Minority interest in income of subsidiaries (173,178) (97,442) Equity loss and impairment of Australian Magnesium Corporation (119,485) (1,775) Equity income of affiliates 84,427 53,151 Net income before cumulative effect of a change in accounting principle 510,200 150,360 Cumulative effect of a change in accounting principle, net of tax (34,533) 7,701 Net income 475,667 158,061 Preferred stock dividends -- (3,738) Net income applicable to common shares $475,667 $154,323 Net income $475,667 $158,061 Other comprehensive income (loss), net of tax 86,853 (54,578) Comprehensive income $562,520 $103,483 Net income before cumulative effect of a change in accounting principle per common share, basic $1.24 $0.40 Cumulative effect of change in accounting principle per common share, basic (0.08) 0.02 Net income per common share, basic $1.16 $0.42 Net income before cumulative effect of a change in accounting principle per common share, diluted $1.23 $0.39 Cumulative effect of change in accounting principle per common share, diluted (0.08) 0.02 Net income per common share, diluted $1.15 $0.41 Basic weighted average common shares outstanding 410,600 370,940 Diluted weighted average common shares outstanding 413,723 372,975 Consolidated Balance Sheets At December 31, 2003 2002 (in thousands) ASSETS Cash and cash equivalents $1,314,022 $401,683 Marketable securities 144,711 13,188 Accounts receivable 90,686 82,310 Inventories 225,719 169,324 Stockpiles and ore on leach pads 248,625 328,993 Deferred stripping costs 60,086 32,085 Deferred income tax assets 73,665 51,451 Newmont Australia infrastructure bonds 127,674 -- Other current assets 75,280 34,222 Current assets 2,360,467 1,113,256 Property, plant and mine development, net 2,347,984 2,287,030 Mineral interests and other intangible assets, net 1,379,101 1,415,348 Investments 733,977 1,199,583 Deferred stripping costs 30,293 23,302 Long-term stockpiles and ore on leach pads 305,810 199,761 Deferred income tax assets 752,407 761,428 Other long-term assets 97,576 123,112 Goodwill 3,042,557 3,024,576 Total assets $11,050,173 $10,147,396 LIABILITIES Current portion of long-term debt $190,866 $115,322 Accounts payable 163,164 105,277 Deferred income tax liabilities 18,182 28,469 Derivative instruments 6,074 74,999 Employee related benefits 135,323 114,622 Other current liabilities 320,411 247,652 Current liabilities 834,020 686,341 Long-term debt 886,633 1,701,282 Reclamation and remediation liabilities 362,283 288,536 Deferred revenue from sale of future production 53,841 53,841 Derivative instruments 7,088 388,659 Deferred income tax liabilities 633,135 656,452 Employee related benefits 203,217 234,103 Other long-term liabilities 338,503 364,376 Total liabilities 3,318,720 4,373,590 Minority interest in subsidiaries 346,518 354,558 STOCKHOLDERS' EQUITY Total stockholders' equity 7,384,935 5,419,248 Total liabilities and stockholders' equity $11,050,173 $10,147,396 Statement of Consolidated Cash Flows Three Months Ended December 31, 2003 2002 (in thousands) Operating activities: Net income $153,131 $75,109 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, depletion and amortization 143,108 146,161 Accretion of accumulated reclamation obligations 5,491 -- Amortization of deferred stripping costs, net (6,784) 8,436 Deferred income taxes (51,274) (73,606) Foreign currency exchange (gain) loss (22,437) 11,249 Minority interest, net of dividends (23,221) 10,269 Equity income and impairment of affiliates, net of dividends (20,687) (8,053) Write-down of inventories, stockpiles and ore on leach pads 4,512 6,831 Write-down of long-lived assets 29,884 3,369 (Gain) loss on investments, net (1,773) 212 Loss on gold commodity derivative instruments, net 1,866 25,467 Loss on extinguishment of debt 14,302 -- Loss on guarantee of QMC debt 30,000 -- (Gain) loss on asset sales and other (11,541) 10,150 (Increase) decrease in operating assets: Accounts receivable (1,005) 7,102 Inventories, stockpiles and ore on leach pads (53,703) 2,380 Other assets (11,052) 3,370 Increase (decrease) in operating liabilities: Accounts payable and other accrued liabilities (40,645) 13,258 Derivative instruments (931) (15,817) Early settlement of derivative instruments classified as cash flow hedges -- 1,168 Other liabilities 14,001 (1,891) Net cash provided by operating activities 151,242 225,164 Investing activities: Additions to property, plant and mine development (135,000) (61,886) Receipts from joint ventures and affiliates, net 23,110 -- Proceeds from sale of investments -- 8,658 Early settlement of ineffective derivative instruments -- (9,199) Investments in affiliates (13,848) -- Cash consideration for Normandy shares -- (2,186) Investments in marketable equity securities and other (13,798) (32,962) Net cash used in investing activities (139,536) (97,575) Financing activities: Proceeds from debt 363 -- Repayments of debt (323,584) (13,949) Dividends paid on common and preferred stock (22,064) (12,051) Proceeds from stock issuance 1,231,903 (618) Other -- 1 Net cash provided by (used in) financing activities 886,618 (26,617) Effect of exchange rate changes on cash (3,713) 8,563 Net change in cash and cash equivalents 894,611 109,535 Cash and cash equivalents at beginning of period 419,411 292,148 Cash and cash equivalents at end of period $1,314,022 $401,683 Statement of Consolidated Cash Flows Years Ended December 31, 2003 2002 (in thousands) Operating activities: Net income $475,667 $158,061 Adjustments to reconcile net income to net cash provided by operating activities Depreciation, depletion and amortization 564,481 505,598 Accretion of accumulated reclamation obligations 22,610 -- Amortization of deferred stripping costs, net (36,497) 37,195 Deferred income taxes (36,183) (100,291) Foreign currency exchange (gain) loss (75,670) 1,259 Minority interest, net of dividends 27,228 68,598 Equity loss (income) and impairment of affiliates, net of dividends 42,467 (35,595) Write-down of inventories, stockpiles and ore on leach pads 24,945 44,439 Write-down of long-lived assets 35,260 3,652 Cumulative effect of change in accounting principle, net 34,533 (7,701) Gain on investments, net (83,166) (47,086) (Gain) loss on gold commodity derivative instruments, net (22,876) 39,805 Gain on extinguishment of NYOL bonds, net (114,031) -- Gain on extinguishment of NYOL derivatives liability, net (106,506) -- Loss on extinguishment of debt 33,832 -- Loss on guarantee of QMC debt 30,000 -- Gain on asset sales and other (24,473) (10,103) (Increase) decrease in operating assets: Accounts receivable 3,775 24,867 Inventories, stockpiles and ore on leach pads (72,828) (9,546) Other assets (5,052) 52,383 Increase (decrease) in operating liabilities: Accounts payable and other accrued liabilities 23,286 (12,216) Derivative instruments (16,318) (33,202) Early settlement of derivative instruments classified as cash flow hedges (120,993) (11,857) Other liabilities (14,739) 2,048 Net cash provided by operating activities 588,752 670,308 Investing activities: Additions to property, plant and mine development (501,400) (300,057) Receipts from (advances to) joint ventures and affiliates, net 39,321 (24,750) Proceeds from sale of investments 232,190 500,103 Proceeds from the sale of TVX Newmont Americas 180,000 -- Proceeds from settlement of cross currency swaps -- 50,816 Early settlement of ineffective derivative instruments (55,339) (21,056) Investments in affiliates (70,072) -- Cash consideration for acquisition of Newmont NFM minority interest (11,195) -- Cash consideration for Normandy shares -- (461,717) Cash received from acquisitions, net of transaction costs -- 371,417 Investments in marketable equity securities and other (15,283) (2,646) Net cash (used in) provided by investing activities (201,778) 112,110 Financing activities: Proceeds from debt 492,841 493,371 Repayments of debt (1,162,167) (1,040,807) Dividends paid on common and preferred stock (70,759) (49,982) Proceeds from stock issuances 1,286,751 67,346 Other -- (3) Net cash provided by (used in) financing activities 546,666 (530,075) Effect of exchange rate changes on cash (21,301) (91) Net change in cash and cash equivalents 912,339 252,252 Cash and cash equivalents at beginning of year 401,683 149,431 Cash and cash equivalents at end of year $1,314,022 $401,683 Operating Statistics Summary North America South America Australia Three months ended December 31, 2003 2002 2003 2002 2003 2002 Production Costs Per Ounce: Direct mining and production costs $229 $179 $125 $119 $217 $202 Capitalized mining & other (15) 14 (3) (4) (6) (25) Cash operating costs 214 193 122 115 211 177 Royalties and production taxes 4 6 6 4 20 13 Total cash costs 218 199 128 119 231 190 Reclamation and mine closure costs (7) 4 4 5 (1) 5 Total costs applicable to sales 211 203 132 124 230 195 Non-cash inventory adjustment - - - - - 22 Depreciation and amortization 65 47 60 55 58 52 Depreciation and amortization adjustment - - - - - 3 Total production costs $276 $250 $192 $179 $288 $272 Consolidated gold sales (000 ozs.) 731.9 932.0 674.0 754.4 439.0 535.1 Equity gold sales (000 ozs.) 731.9 932.0 351.9 411.3 439.0 513.0 Equity Other (1) Investments Total and Other (2) (3) Three months ended December 31, 2003 2002 2003 2002 2003 2002 Production Costs Per Ounce: Direct mining and production costs $182 $165 - - $199 $171 Capitalized mining & other (22) (2) - - (10) - Cash operating costs 160 163 - - 189 171 Royalties and production taxes 5 3 - - 8 7 Total cash costs 165 166 - - 197 178 Reclamation and mine closure costs 7 13 - - (1) 5 Total costs applicable to sales 172 179 - - 196 183 Non-cash inventory adjustment - 15 - - - 7 Depreciation and amortization 78 54 - - 63 50 Depreciation and amortization adjustment - 15 - - - 2 Total production costs $250 $263 - - $259 $242 Consolidated gold sales (000 ozs.) 123.8 171.6 3.0 3.3 1,971.7 2,396.4 Equity gold sales (000 ozs.) 123.1 169.5 69.2 189.9 1,715.1 2,215.7 Average realized price per equity ounce $394 $325 Copper Summary (4) Equity copper production (millions of lbs.) 92.9 103.7 Equity copper sales (millions of lbs.) 107.2 98.9 Net cash cost per equity pound $0.44 $0.32 Average realized price per pound $1.03 $0.76 (1) Other includes Ovacik (Turkey), Zarafshan (Uzbekistan), Minahasa (Indonesia) and Martha (New Zealand). (2) Equity investments comprise Batu Hijau. (3) Includes 3,000 and 3,300 ounces from the wholly-owned Golden Grove zinc/copper mine in 2003 and 2002, respectively. (4) Represents Batu Hijau and Golden Grove. North America South America Australia Year ended December 31, 2003 2002 2003 2002 2003 2002 Production Costs Per Ounce: Direct mining and production costs $244 $205 $125 $130 $224 $186 Capitalized mining & other (17) 9 (4) (3) (3) (6) Cash operating costs 227 214 121 127 221 180 Royalties and production taxes 6 6 5 4 15 11 Total cash costs 233 220 126 131 236 191 Reclamation and mine closure costs 1 2 3 3 1 6 Total costs applicable to sales 234 222 129 134 237 197 Non-cash inventory adjustment - - - - - 9 Depreciation and amortization 61 50 60 55 58 49 Depreciation and amortization adjustment - (1) - - - 10 Total production costs $295 $271 $189 $189 $295 $265 Consolidated gold sales (000 ozs.) 2,902.6 3,224.0 3,038.8 2,575.4 1,906.5 1,759.0 Equity gold sales (000 ozs.) 2,902.6 3,224.0 1,626.4 1,426.3 1,889.2 1,684.6 Equity Other (1) Investments Total and Other (2) (3) Year ended December 31, 2003 2002 2003 2002 2003 2002 Production Costs Per Ounce: Direct mining and production costs $181 $159 - - $205 $181 Capitalized mining & other (18) (7) - - (10) 1 Cash operating costs 163 152 - - 195 182 Royalties and production taxes 5 3 - - 8 7 Total cash costs 168 155 - - 203 189 Reclamation and mine closure costs 3 5 - - 2 3 Total costs applicable to sales 171 160 - - 205 192 Non-cash inventory adjustment - 6 - - - 3 Depreciation and amortization 72 51 - - 61 51 Depreciation and amortization adjustment - 18 - - - 4 Total production costs $243 $235 - - $266 $250 Consolidated gold sales (000 ozs.) 594.6 645.9 13.4 13.6 8,455.9 8,217.9 Equity gold sales (000 ozs.) 587.4 636.5 378.0 660.3 7,383.6 7,631.7 Average realized price per equity ounce $366 $313 Copper Summary (4) Equity copper production (millions of lbs.) 414.5 430.9 Equity copper sales (millions of lbs.) 417.7 407.0 Net cash cost per equity pound $0.30 $0.34 Average realized price per pound $0.86 $0.73 (1) Other includes Ovacik (Turkey), Zarafshan (Uzbekistan), Minahasa (Indonesia) and Martha (New Zealand). (2) Equity investments comprise Batu Hijau (and TVX Newmont Americas and Echo Bay Mining Limited through January 31, 2003). (3) Includes 13,400 and 13,600 ounces from the wholly-owned Golden Grove zinc/copper mine in 2003 and 2002, respectively. (4) Represents Batu Hijau and Golden Grove. 2004 Guidance Equity Gold Total Sales Cash Costs (000 oz) ($/oz) North America Nevada 2,600 $250 Golden Giant 150 $320 Holloway 90 $305 La Herradura 70 $200 Sub-total 2,910 $255 South America Yanacocha 1,580 $135 Kori Kollo 20 $280 Sub-total 1,600 $135 Australia Kalgoorlie 430 $315 Pajingo 275 $185 Tanami 660 $270 Yandal 350 $295 Sub-total 1,715 $275 Other Martha 120 $225 Zarafshan 180 $175 Minahasa 50 $330 Ovacik 150 $210 Sub-total 500 $215 Equity Investments Batu Hijau 360 -- TOTAL 7,000-7,200 $220-$230 Equity Copper & Net Zinc Sales Cash Costs (million lbs) ($/lb) Batu Hijau - Copper 360-400 $0.24-$0.28 Golden Grove - Copper 50-60 $0.66-$0.70 Golden Grove - Zinc 150-160 $0.34-$0.38 Financial (in millions, except tax rate) Royalty revenue $45-$50 Depreciation, depletion & amortization $580-$600 Exploration, research and development $140-$150 General and administrative $100-$110 Net interest expense $40-$50 Tax rate (assuming $400/oz gold) 25%-30% Capital expenditures $700-$750 Sensitivities An annualized $10 change in the gold price changes annual net income by approximately $50 million, assuming all other factors remain constant. An annualized $10 change in the gold price changes annual cash generated by operating activities by approximately $55 million, assuming all other factors remain constant. An annualized $0.01 change in the Australian dollar exchange rate changes total cash costs (on a Company-wide basis) by $0.85 per ounce. SOURCE Newmont Mining Corporation -0- 02/04/2004 /CONTACT: investors, Russell Ball, +1-303-837-5927, Russell.ball@newmont.com, Wendy Yang, +1-303-837-6141, wendy.yang@newmont.com, or media, Doug Hock, +1-303-837-5812, doug.hock@newmont.com, all of Newmont Mining Corporation/ /FIRST AND FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW/ /Web site: http://www.melloninvestor.com / /Web site: http://www.newmont.com / (NEM NMC.) CO: Newmont Mining Corporation ST: Colorado, Ontario IN: MNG SU: ERN CCA -----END PRIVACY-ENHANCED MESSAGE-----