What were the primary drivers of the revenue decrease in the third quarter of 2008?

The primary drivers of the revenue decrease were lower sales volumes for both gold and copper, as well as a significant decrease in realized copper prices, which more than offset the higher realized gold prices.

How has the increase in operating costs impacted Newmont's performance?

The increase in operating costs, particularly 'Costs applicable to sales,' has compressed profit margins. This increase was attributed to higher commodity prices for inputs like fuel, unfavorable currency exchange rates (especially the Australian dollar), and increased royalty expenses, leading to higher per-ounce costs for gold and per-pound costs for copper.

What is the company's outlook regarding commodity prices and their impact?

Newmont acknowledges the significant weakening of global economic conditions leading to increased volatility in commodity prices. They note that declines in gold and copper prices adversely impact revenues, net income, and cash flows. Sustained low prices could lead to production declines, reduced profitability from stockpiles, delayed project development, reduced exploration funding, and the removal of lower-grade ores from reserves.

What significant capital investments were made during this period, and how are they being funded?

Significant capital expenditures were made for the acquisition of Miramar Mining Corporation and the ongoing development of projects like Boddington and Hope Bay. The company noted that operating cash flow alone is insufficient to meet all expenditures, and future capital needs may require new sources of capital, such as equity issuance or debt, while considering the impact on their investment grade rating and existing debt levels.

NEM/NEMCL 10-Q Quarterly Report Q3 FY2008

Summary

Newmont Mining Corporation's Q3 2008 results show a decline in revenue compared to the previous year, primarily driven by lower sales volumes for both gold and copper, coupled with reduced realized copper prices. While gold prices saw an increase, this was insufficient to offset the volume decrease and higher operating costs. The company experienced a significant increase in costs applicable to sales, influenced by rising commodity prices, unfavorable currency movements (particularly the Australian dollar), and increased royalty expenses. Capital expenditures remained substantial, largely due to ongoing development of major projects like Boddington and Hope Bay. Despite these challenges, Newmont reported positive income from continuing operations, albeit lower than the prior year. The company also highlighted efforts to manage market risks through hedging strategies for foreign currency expenditures.

Financial Highlights

27 data points

Beta

Net Income

$191.00M

EPS (Diluted)

$0.42

Cash & Equivalents

$853.00M

Free Cash Flow

$199.00M

Financial Statements

Beta

R&D Expenses	$44.00M
Operating Expenses	$1.18B
Operating Income	$809.00M
Interest Expense	$35.00M
Net Income	$191.00M
EPS (Basic)	$0.42
EPS (Diluted)	$0.42
Shares Outstanding (Basic)	454.00M
Shares Outstanding (Diluted)	455.00M

Key Highlights

1Revenue decreased to $1.39 billion in Q3 2008 from $1.62 billion in Q3 2007, mainly due to lower gold and copper sales volumes.
2Income from continuing operations fell to $177 million ($0.39/share) from $331 million ($0.73/share) in the prior year's quarter.
3Costs applicable to sales increased significantly, with gold costs per ounce up 28% and copper costs per pound up substantially, driven by higher input costs and unfavorable currency exchange rates.
4Net income for the nine months ended September 30, 2008 was $843 million, a significant turnaround from a net loss of $1.60 billion in the same period of 2007, mainly due to higher commodity prices and the absence of a large loss on price-capped forward sales contracts from the prior year.
5Capital expenditures increased to $1.36 billion for the first nine months of 2008, up from $1.16 billion in the prior year, largely due to the acquisition of Miramar and continued development of projects like Boddington.
6The company experienced a significant decrease in copper sales volume (73% in Q3) and production at the Batu Hijau mine.
7Newmont is actively hedging foreign currency expenditures to mitigate risk from local currency fluctuations.

NEWMONT Corp /DE/ Quarterly Report for Q3 Ended Sep 30, 2008

Summary

Financial Highlights

Key Highlights

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