10-QPeriod: Q3 FY2005

NEWMONT Corp /DE/ Quarterly Report for Q3 Ended Sep 30, 2005

Filed October 28, 2005For Securities:NEMNEMCL

Summary

Newmont Mining Corporation (NEM) reported third quarter and nine-month results for the period ending September 30, 2005. For the third quarter, the company posted net income of $126 million, or $0.28 per diluted share, a slight decrease from $129 million, or $0.29 per diluted share, in the same period of the prior year. For the nine-month period, net income was $260 million, or $0.58 per diluted share, up from $253 million, or $0.57 per diluted share, in the prior year. The company benefited from higher realized gold and copper prices, though this was partially offset by increased commodity costs and lower sales volumes for both gold and copper. Significant events during the period included the sale of the Golden Grove operation, a gain on the sale of its investment in Kinross Gold Corporation, and ongoing exploration and development projects. The company's balance sheet shows a healthy increase in cash and cash equivalents to $1,095 million from $781 million at the end of 2004, indicating strong liquidity. Long-term debt also increased significantly, reflecting new debt issuances and project financing.

Key Highlights

  • 1Net income for the third quarter was $126 million ($0.28/share), slightly down from $129 million ($0.29/share) in Q3 2004.
  • 2Nine-month net income was $260 million ($0.58/share), an increase from $253 million ($0.57/share) in the same period of 2004.
  • 3Revenue from gold sales increased 4% year-over-year for the quarter, driven by higher average realized prices, though ounces sold decreased.
  • 4Copper sales revenue decreased by 6% for the quarter due to lower volumes, partially offset by higher prices.
  • 5Cash and cash equivalents increased significantly to $1,095 million from $781 million at year-end 2004.
  • 6Long-term debt increased to $1,790 million from $1,316 million at year-end 2004.
  • 7The company reported a $20 million pre-tax gain from the sale of its investment in Kinross Gold Corporation in Q3 2005.

Frequently Asked Questions

For the third quarter ended September 30, 2005, Newmont reported a net income of $126 million, or $0.28 per diluted share, which is slightly lower than the $129 million, or $0.29 per diluted share, reported for the same period in 2004. This marginal decrease was influenced by higher commodity costs and lower sales volumes, which offset the benefit of increased gold and copper prices.

Newmont's liquidity strengthened, with cash and cash equivalents increasing to $1,095 million as of September 30, 2005, up from $781 million at December 31, 2004. However, the company's long-term debt also increased, rising to $1,790 million from $1,316 million at the end of 2004, reflecting new debt issuances and project financing.

Yes, Newmont recorded a $20 million pre-tax gain in the third quarter of 2005 from the sale of its investment in Kinross Gold Corporation. Additionally, the company completed the sale of its Golden Grove copper-zinc operation in Australia during the period.

Costs applicable to sales increased due to higher diesel and other commodity prices, as well as increased labor and contract service costs, particularly in North America. These increases were partially offset by improved operational efficiencies at certain sites and favorable currency movements in some regions.