10-QPeriod: Q1 FY2010

NEWMONT Corp /DE/ Quarterly Report for Q1 Ended Mar 31, 2010

Filed April 27, 2010For Securities:NEMNEMCL

Summary

Newmont Mining Corporation reported a strong first quarter for 2010, with net income attributable to stockholders soaring to $546 million, or $1.11 per share, a significant increase from $189 million, or $0.40 per share, in the same period of 2009. This robust performance was driven by higher realized gold and copper prices, increased sales volumes, and a beneficial tax adjustment related to the conversion of non-U.S. tax-paying entities. The company also highlighted its progress in advancing its project pipeline, including the Akyem and Conga projects, which are moving towards development decisions. Liquidity remains strong, with substantial net cash provided from continuing operations, and the company is well-positioned to manage its debt obligations. Overall, the quarter demonstrated Newmont's operational strength and strategic execution in a favorable commodity price environment.

Financial Highlights

50 data points
Beta

Net Income

$546.00M

EPS (Diluted)

$1.11

Total Assets

$22.64B

Cash & Equivalents

$3.36B

Free Cash Flow

$715.00M

Financial Statements
Beta
Gross Profit$1.14B
R&D Expenses$46.00M
Operating Expenses$1.33B
Operating Income$546.00M
Interest Expense$75.00M
Net Income$546.00M
EPS (Basic)$1.11
EPS (Diluted)$1.11
Shares Outstanding (Basic)491.00M
Shares Outstanding (Diluted)493.00M

Key Highlights

  • 1Net income attributable to Newmont stockholders surged to $546 million ($1.11 per share) in Q1 2010, up from $189 million ($0.40 per share) in Q1 2009.
  • 2Sales increased by 46% to $2,242 million, driven by higher realized gold and copper prices and increased sales volumes.
  • 3The company reported a significant tax benefit of $127 million related to the conversion of non-U.S. tax-paying entities, which lowered the effective tax rate to 15% from 27% in the prior year.
  • 4Net cash provided from continuing operations increased by 91% to $728 million, reflecting improved operational and market conditions.
  • 5Progress was made on key development projects, Akyem and Conga, with construction decisions expected in the latter half of 2010 and late 2010, respectively.
  • 6The company declared a regular quarterly dividend of $0.10 per common share, consistent with the prior year.
  • 7Costs applicable to sales for gold increased to $480 per ounce, while copper costs decreased to $0.78 per pound, reflecting operational changes and commodity price impacts.

Frequently Asked Questions

The primary drivers of Newmont's significantly improved profitability were higher realized gold and copper prices, increased sales volumes, and a substantial tax benefit of $127 million resulting from the conversion of non-U.S. tax-paying entities to entities subject to U.S. income tax. These factors collectively led to a nearly threefold increase in net income attributable to stockholders.

Newmont demonstrated strong liquidity in the first quarter of 2010, with net cash provided from continuing operations increasing significantly to $728 million. The company also reported scheduled debt repayments and indicated it expects to fund future maturities from operating cash flow, short-term investments, existing cash balances, and available credit facilities. At the end of the quarter, Newmont was in compliance with all debt covenants.

Newmont is making progress on its key development projects. Akyem in Ghana is in the development phase with a construction decision expected in the second half of 2010. Conga in Peru has completed feasibility studies on its preferred option, with a construction decision anticipated in the fourth quarter of 2010, pending government approval. These projects are expected to contribute significantly to future gold and copper production.

The company is involved in several environmental and legal matters, including ongoing litigation related to the Midnite Mine site and a dispute over royalty obligations in Canada. Additionally, there are environmental matters concerning former mining activities. While Newmont intends to vigorously defend these situations, the outcomes are uncertain and could potentially lead to significant liabilities or remediation costs, as detailed in Note 26 of the filing. However, management does not believe that adverse decisions in most pending or threatened proceedings will have a material adverse effect on the company's financial condition or results of operations.