Newmont Announces Fourth Quarter and Full Year 2013 Financial and Operating Results and Provides Three-Year Outlook

Generating $1.6 Billion in Operating Cash Flow, Reducing Consolidated Spending by $966 Million, and Increasing Financial Flexibility

DENVER--()--Newmont Mining Corporation (NYSE: NEM) (“Newmont” or the “Company”) today reported fourth quarter and full year 2013 financial and operating results and a three-year outlook.

“In 2013, we generated $1.6 billion of operating cash flow from strong results despite the challenging gold price environment. I am proud of how our team delivered nearly $1.0 billion in cost and efficiency improvements during the year,” said Gary Goldberg, President and Chief Executive Officer. “We also achieved the top end of our gold production guidance of 5.1 million ounces, brought Akyem and the Phoenix Copper Leach operations into commercial production on time and on budget, and divested approximately $600 million in non-core assets in 2013. In addition, we recently improved our financial flexibility by modifying our dividend policy and receiving commitments to restructure our near-term debt maturities.”

Highlights for 2013 and fourth quarter

  • Generated operating cash flow1 of $1.6 billion in 2013, including $386 million in the fourth quarter;
  • Reduced spending2 by $966 million or 14 percent compared with 2012;
  • Achieved a 6 percent reduction in gold all-in sustaining costs3 (“AISC”) per ounce for 2013 over 2012, including a 14 percent reduction in the fourth quarter of 2013 compared with the prior year quarter;
  • Achieved adjusted net income4 of $695 million or $1.40 per basic share, which includes a negative impact of $1.11 per share related to impairments of stockpiles and ore on leach pads; GAAP reported net loss attributable to shareholders from continuing operations of $2.5 billion or loss per share of $5.06, primarily due to asset impairments as a direct result of changes in gold pricing assumptions;
  • Delivered fourth quarter adjusted net income of $167 million or $0.33 per basic share which includes a negative impact of $0.48 per share related to impairments of stockpiles and ore on leach pads; GAAP reported net loss attributable to shareholders from continuing operations of $1.2 billion or loss per share of $2.34, primarily due to asset impairments as a direct result of changes in gold pricing assumptions;
  • Commenced commercial production at Akyem in Ghana and Phoenix Copper Leach in Nevada, both on time and on budget;
  • Sold non-core assets for a combined value of approximately $600 million; and
  • Increased gold production to 1.4 million attributable ounces in the fourth quarter and 5.1 million attributable ounces in 2013, at the top end of the Company’s 2013 outlook.

Highlights for the current three-year outlook5

  • Gold production increases in 2015 and 2016 to between 4.8 to 5.2 million attributable ounces compared to 2014;
  • Gold costs applicable to sales (“CAS”) is expected to remain essentially flat over the three-year period compared to 2013 levels while copper CAS is expected to improve; and
  • Gold AISC per ounce are expected to decline through 2016, as a further $600 to $700 million of planned cost and efficiency improvements are expected to more than offset the anticipated impact on costs from inflation.

“Our outlook shows stable annual gold production and additional planned all-in sustaining cost reductions of approximately $600 to $700 million are expected to more than offset inflation from 2014 through 2016,” added Goldberg. “We have also optimized plans across our portfolio, including revitalizing mine plans for Tanami and Waihi. We have improved our economic profiles for a number of organic growth projects and expect to make a decision in the second quarter of 2014 on development of the Merian project in Suriname.”

Financial Results

In 2013, the Company reported net loss from continuing operations attributable to shareholders of $2.5 billion or $5.06 per basic share, compared with net income from continuing operations of $1.9 billion, or $3.80 per share in 2012. As a result of lower gold and copper prices and in accordance with US GAAP, full year net income was adjusted by $3.4 billion, net of taxes and minority interest, for impairments and revaluation. Of that amount, $547 million, net of tax and minority interest, is related to impairments of stockpiles and ore on leach pads. The remaining $2.9 billion, net of tax, is related to impairments of property, plant and mine development and other long-term assets at Boddington and Tanami in Australia and Long Canyon in Nevada. The Company reported adjusted net income4 of $695 million or $1.40 per basic share in 2013, compared with $1.85 billion, or $3.73 per basic share a year earlier when gold prices were 16% higher.

Summary of 2013 financial results compared with 2012:

  • Annual revenue of $8.3 billion compared with $9.9 billion;
  • Gold AISC of $1,104 per ounce for 2013, compared with $1,177 in 2012;
  • Average realized gold and copper price of $1,393 per ounce and $2.96 per pound, respectively compared with $1,662 per ounce and $3.43 per pound, respectively;
  • Gold and copper CAS of $761 per ounce and $4.42 per pound, respectively, in line with 2013 outlook; compared with $677 per ounce and $2.34 per pound, respectively; and
  • Operating cash flow of $1.6 billion compared with $2.4 billion.

Summary of Q4 2013 financial results compared with Q4 2012:

  • Fourth quarter revenue of $2.2 billion compared with $2.5 billion;
  • Average realized gold and copper price of $1,267 per ounce and $2.99 per pound, respectively, compared with $1,703 per ounce and $3.22 per pound, respectively; fourth quarter gold and copper CAS of $755 per ounce and $4.02 per pound; and
  • Operating cash flow of $386 million compared with $846 million.

Balance Sheet and Financial Flexibility

In the fourth quarter, the Company generated $386 million in cash from continuing operations, bringing full year cash from continuing operations to nearly $1.6 billion. The Company ended the year with $1.6 billion in cash and no borrowings on its $3 billion revolving credit facility.

In addition to approximately $600 million in non-core asset sales, the Company expects to divest additional assets or interests that management deems to be non-strategic.

The Company also announced today that it has secured commitments from relationship banks for a five year term loan of $575 million. The term loan is expected to close by the end of March6. The facility is structured to allow for early repayment from free cash flow and provides additional financial flexibility by refinancing an equivalent amount of existing debt that comes due in July 2014.

As announced yesterday, the Company will retain a dividend policy that is linked to the gold price, but has adjusted the annual payout levels to provide financial flexibility while still offering investors continued leverage as gold prices rise.

2013 Operating Results

Summary Gold and Copper Production Table

(Attributable production, Koz and Mlbs)

           
Region   Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
North America   557   526   6%   1,951   1,960   -0.5%
South America   111   134   -17%   588   744   -21%
Australia/New Zealand   483   461   5%   1,804   1,679   7%
Indonesia   6   7   -14%   23   33   -30%
Africa   291   123   137%   699   561   25%
Total Gold   1,448   1,251   16%   5,065   4,977   2%
Total Copper   38   35   9%   144   143   0.7%

Summary Gold All-in Sustaining Costs Table

(Consolidated $/oz)

           
Region   Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
North America   $965   $898   7%   $964   $1,053   -8%
South America   $1,317   $1,370   -4%   $1,032   $1,098   -6%
Australia/New Zealand   $1,091   $1,260   -13%   $1,176   $1,200   -2%
Indonesia   $2,385   $1,947   22%   $2,804   $1,687   66%
Africa   $510   $1,133   -55%   $790   $973   -19%
Total Gold AISC   $1,032   $1,198   -14%   $1,104   $1,177   -6%

In 2013, attributable gold production increased approximately 2 percent from 2012 levels due to higher production from Tanami and Waihi in Australia and New Zealand and the initiation of commercial production at Akyem in Ghana, partially offset by lower production from Peru with the planned ramp down of production at Yanacocha. Attributable copper pounds produced were in line with the prior year due to continued Phase 6 waste mining at Batu Hijau. All-in sustaining cost for gold production in 2013 was reduced by 6 percent due primarily to Newmont’s cost and efficiency improvements.

Attributable Production and Consolidated Costs by Region

North America

Nevada

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     535   478   12%   1,768   1,748   1%
CAS $/oz     $691   $580   19%   $663   $638   4%
 

Fourth quarter attributable gold production increased 12 percent from the prior year quarter due to higher tons and grade at Mill 6, higher grade at the Juniper mill and higher grades at Phoenix as well as higher leach production at Carlin North Area and Emigrant. CAS per ounce increased 19 percent from the prior year quarter mainly due to an impairment of stockpiles and leach pads as a result of lower gold prices and lower by-product credits. This was partially offset by lower royalties paid due to lower metal prices and higher inventory builds.

La Herradura, Mexico

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     22   48   -54%   183   212   -14%
CAS $/oz     $2,524   $759   233%   $967   $621   56%
 

Fourth quarter attributable gold production decreased 54 percent and CAS per ounce increased 233 percent from the prior year quarter due to the suspension of the explosives permit related to a land dispute. This resulted in an impairment to the value of ore on leach pads. The permitting process is continuing.

South America

Yanacocha, Peru

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     95   121   -21%   523   691   -24%
CAS $/oz     $833   $617   35%   $650   $505   29%
 

Fourth quarter attributable gold production decreased 21 percent from the prior year quarter mainly due to planned lower gold production from the leach pads due to lower grades. CAS per ounce increased 35 percent from the prior year quarter due to higher direct mining costs, leach pad write-downs and lower production.

La Zanja, Peru

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     16   13   23%   65   53   23%
 

Australia/New Zealand

Boddington

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     179   216   -17%   704   724   -3%
Copper Mlbs     16   19   -16%   66   67   -2%
CAS Gold $/oz     $1,115   $856   30%   $1,083   $877   24%
CAS copper $/lb     $3.03   $2.23   36%   $2.75   $2.29   20%
 

Fourth quarter attributable gold and copper production decreased 17 percent and 16 percent, respectively, from the prior year quarter primarily due to lower ore grade and throughput, partially offset by higher recovery. CAS increased 30 percent per ounce and 36 percent per pound, respectively, due to stockpile write-downs.

Other Australia/New Zealand

       
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     304   245   24%   1,100   955   15%
CAS $/oz     $741   $961   -23%   $882   $879   0.3%
     

Fourth quarter attributable gold production increased 24% from the prior year quarter primarily as a result of higher ore grade and higher throughput. CAS per ounce decreased 23% from the prior year quarter due to lower operating costs and higher production at Tanami and KCGM.

Indonesia

Batu Hijau

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     6   7   -14%   23   33   -30%
Copper Mlbs     22   16   38%   78   76   3%
CAS Gold $/oz     $1,946   $1,292   51%   $2,332   $1,071   118%
CAS copper $/lb     $4.36   $2.77   57%   $5.17   $2.36   119%
 

Fourth quarter attributable gold and copper production decreased 14 percent and increased 38 percent, respectively, from the prior year quarter due to lower ore grade for gold and higher ore grade for copper, as well as higher copper metal recovery. CAS increased 51 percent per ounce and 57 percent per pound, respectively, due to stockpile write-downs.

Africa

Ahafo, Ghana

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     162   123   32%   570   561   2%
CAS $/oz     $510   $694   -27%   $542   $596   -9%
 

Fourth quarter attributable gold production increased 32 percent from the prior year quarter due to higher ore grade and throughput. CAS per ounce decreased 27 percent from the prior year quarter due to lower milling costs and higher production.

Akyem

             
      Q4 2013   Q4 2012   Change   Year 2013   Year 2012   Change
Gold koz     129   n/a   n/a   129   n/a   n/a
CAS $/oz     $248   n/a   n/a   $248   n/a   n/a
 

2014 – 2016 Outlook

                   

Summary Three-Year Attributable Production and Consolidated Costs Outlook Table

 
2012 2013 2014 2015 2016
      Actual     Actual     Outlook     Outlook     Outlook
Gold (Attributable Moz)     5.0     5.1     4.6 – 4.9     4.8 – 5.2     4.8 – 5.2
Gold (Consolidated Moz)     5.6     5.5     5.0 – 5.4    

5.5 – 5.9

   

5.5 – 5.9

Gold CAS ($/oz)     $677     $761     $740 - $790     $690 - $740     $740 - $790
Gold AISC ($/oz)     $1,177     $1,104     $1,075 - $1,175     $950 - $1,050     $985 - $1,085
Copper (Attributable kt)     65     65     95 - 110     145 - 160     125 – 140
Copper (Consolidated kt)     102     103     160 – 175    

280 – 295

    225 – 240
Copper CAS ($/lb)     $2.34     $4.42     $2.00 - $2.25     $1.20 - $1.45     $1.40 - $1.65
Copper AISC ($/lb)     n/a     n/a     $2.75 - $2.95     $1.60 - $1.85     $1.80 - $2.05
 

Gold production increases in 2015 and 2016 to between 4.8 to 5.2 million attributable ounces compared to 2014. In 2014, all-in sustaining costs are anticipated to be between $1,075 and $1,175 per gold ounce and $2.75 to $2.95 per copper pound of production. Gold all-in sustaining costs per ounce are expected to decline by eight percent from 2014 through 2016, as $600 to $700 million of additional planned cost and efficiency improvements are expected to more than offset the anticipated impact from inflation. Gold CAS is expected to remain essentially flat over the three-year period compared to 2013 levels while copper CAS is expected to improve as the Batu Hijau mine plan progresses, reaching higher grade ore.

Three-year production outlook, by region

North America: The Turf Vent Shaft is expected to add 100,000 to 150,000 ounces of gold per annum beginning in late 2015 by providing access to higher grade ore at lower costs. Combined with higher gold output at La Herradura, and completion of the Carlin and Twin Creeks stripping campaigns in 2014 and 2015, this will more than offset the 2014 decline in gold production and return to 2013 production rates by 2016. Production forecasts also reflect the February 2014 divestiture of the Midas mine in Nevada. During this time, detailed engineering and permitting for the Long Canyon project will continue working toward a development decision in early 2015.

South America: Gold production levels at Yanacocha are expected to decline with lower grades at its maturing deposits. Newmont is evaluating further options to optimize existing operations through additional laybacks. Although ultimately Conga could add profitable ounces to the portfolio, the Company will continue to pursue the “Water First” approach to gain social acceptance. Also in South America, the Merian project in Suriname represents one of the Company’s most prospective investment opportunities at current metal prices.

Australia and New Zealand: Gold production levels are forecast to remain stable over the three year period, as production increases at Tanami, Boddington, and Waihi associated with productivity and grade improvements offset declines at Jundee, due to planned mining of lower grade ores.

Indonesia: Copper production levels in 2015 and 2016 are expected to be significantly higher and costs significantly lower than 2014 at Batu Hijau as the planned Phase 6 stripping campaign is projected to be completed in the fourth quarter of 2014, providing access to high-grade ore. This is subject to potential operating plan modifications based on recent export regulations issued by the Indonesian government in mid-January. Please see the Company’s press release dated January 22, 2014.

Africa: Gold production in Ghana increases in 2014 with the impact of the full year of Akyem production. For 2015 and 2016, production is expected to decrease with a decline at the Ahafo mine. Potential Ahafo expansion opportunities, such as increasing milling capacity and further developing the Subika Underground deposit, could ultimately offset this decline. These expansion opportunities are being assessed and optimized to determine the best time to invest.

Three-year cost outlook, by region

               

Consolidated CAS ($/oz, $/lb)

 

 

Region

    2013

Actual

    2014

Outlook

    2015

Outlook

    2016

Outlook

North America     $691     $720 - $790     $740 - $810     $680 - $740
South America     $650     $725 - $790     $560 - $615     $920 - $1,010
Australia/New Zealand     $966     $855 - $930     $830 - $910     $850 - $925
Batu Hijau, Indonesia     $2,332     $630 - $690     $380 - $420     $440 - $480
Africa     $487     $575 - $625     $695 - $760     $730 - $800
Total Gold     $761     $740 - $790     $690 - $740     $740 - $790
Total Copper     $4.42     $2.00 - $2.25     $1.20 - $1.45     $1.40 - $1.65
 

Gold costs applicable to sales are expected to remain stable from 2014 through 2016, as planned operating cost and efficiency improvements, as well as throughput and recovery enhancements are anticipated to offset the impacts of inflation. The Company’s 2014-2016 CAS projections assume the impact of 3 percent compound annual inflation, as shown above. Approximately two thirds of the Company’s cost savings are expected to come from operating cost and efficiency improvements, while the remaining third is expected to result from throughput and recovery improvements. North American CAS is expected to benefit from higher grade, lower strip ratios, improved milling and recoveries, as well as increased plant availabilities and efficiencies. South American CAS is expected to benefit from processing plant and facility consolidation to partially mitigate the offsetting impact of maturing deposits. In Africa, benefits from mining fleet optimization and productivity enhancements resulting from improved fragmentation are expected to somewhat offset the impact of lower grade and higher stripping ratios at Ahafo. In Australia and New Zealand, higher throughput, as well as improved shutdown, payload and dispatching management are expected to offset the impact of anticipated inflation. In Indonesia, the completion of Phase 6 stripping and the ramp up of Phase 6 ore mining is expected to significantly improve both gold and copper CAS at Batu Hijau in 2015 and 2016.

               

Consolidated Capital Expenditures ($M)

 

 

Region

    2013

Actual

    2014

Outlook

    2015

Outlook

    2016

Outlook

North America     $553     $540 - $600     $430 - $475     $270 - $295
South America     $438     $200 - $250     $140 - $155     $165 - $180
Australia/New Zealand     $286     $275 - $300     $220 - $245     $190 - $210
Batu Hijau, Indonesia     $105     $125 - $150     $130 - $145     $120 - $130
Africa     $405     $130 - $150     $80 - $90     $80 - $90
Total     $1,799     $1,300 - $1,400     $1,000 - $1,100     $900 - $1,000

Newmont expects to invest approximately $1.3 to $1.4 billion in consolidated capital expenditures in 2014 allocating approximately 90 percent to sustaining capital. To strengthen the portfolio, the Company will prioritize projects that create value, lower cost and extend mine life, such as the Turf Vent Shaft project in Nevada. The Company continues to evaluate projects and spending to preserve its balance sheet and contribute to free cash flow.

The Company expects to reduce total capital expenditures by 25 percent in 2014 compared to 2013, and achieve a similar total capital reduction in 2015 as compared to 2014. Total capital expenditures is expected to remain essentially flat in 2016. Cost escalation due to inflation of three percent is included for each year of this outlook.

Development Opportunities

Newmont’s long-term asset strategy is to develop assets that offer the best risk-return profile with a continued bias towards gold and copper. The Company is focused on investing organically to ensure sustainable future production and divesting non-core assets. Opportunities are evaluated based on their ability to create value, increase the portfolio mine life, lower the Company’s position on the cost curve, and represent manageable technical, social, and political risks. Factors that influence investment decisions include balance sheet strength, the price environment, and the success of cost and efficiency improvement efforts.

Internal projects that are under consideration include Merian, Long Canyon, Subika Underground, the Ahafo Mill Expansion and Conga (subject to Newmont’s “Water First” approach, and depending on political and social conditions).

Indonesia Update

In January 2014, the Indonesian government issued new regulations pertaining to the export of copper concentrate that contain potentially restrictive conditions in respect of obtaining an export permit and a significant export duty. While the 2009 mining law preserves the validity of PT Newmont Nusa Tenggara’s (“PTNNT”, the entity operating the Batu Hijau mine) Contract of Work (the investment agreement entered into by PTNNT and the Indonesian government in 1986, which includes the right to export copper concentrates and a prohibition against new taxes, duties, and levies), the Indonesia government has stated its intention to apply the new regulations to PTNNT’s operations and has not yet recognized PTNNT’s rights to export copper concentrate and pay taxes, duties, and levies only in accordance with the Contract of Work. The Company believes that these new 2014 regulations conflict with the Contract of Work. PTNNT is continuing to engage with government officials in Indonesia in an effort to resolve this issue and gain clarity regarding the new regulations, while also considering other remedies, including possible legal action. In connection with that process, Newmont is evaluating potential impacts to its operating plans at Batu Hijau. The Company’s ability to achieve its outlook assumes the continuation of our current operating plans at Batu Hijau. For a discussion of factors which could impact future financial performance and operating results in Indonesia, see Item 1A, under the heading “Risk Factors,” of the Company’s Form 10-K, filed on or about February 20, 2014.

Reserves and Resources

Newmont reported gold reserves of 88.4 million ounces and copper reserves of 8.1 billion pounds for 2013. This represents an 11 percent reduction in reported gold reserves and a 15 percent reduction in copper reserves over 2012 due to reductions in gold and copper pricing utilized as well as mine plan and model changes. Removal of lower grade gold and copper reserves plus additions of higher grade gold reserves in 2013 increased overall gold and copper reserve grades by 7 percent. Notable reserve additions for the year include 1.4 million ounces at Tanami, 1.0 million ounces at Long Canyon and 0.5 million ounces at Merian. Gold reserves were calculated at $1,300 per ounce compared with $1,400 per ounce in 2012, and copper reserves were calculated at $3.00 per pound, compared with $3.25 per pound in 2012.

   

Gold Reserves (million ounces)

 
2012 Base     99.2
Additions from exploration drilling, new reserves being declared     5.1
Reductions due to a decreased gold price assumption     -2.5
Revisions due to updated mine designs, model changes and a value over volume analysis     -7.1
Depletion from production     -6.2
2013 Reserves*     88.4

*Totals may not sum due to rounding

   

Copper Reserves (billion pounds)

 
2012 Base     9.5
Reductions due to decreased copper price assumption     -0.5
Revisions due to updated mine designs, model changes and a value over volume analysis     -0.6
Depletion from production     -0.3
2013 Reserves     8.1
 

Newmont also reported an increase in Attributable Measured and Indicated gold and copper resources of 27.8 million ounces and 7.6 billion pounds, respectively, for 2013. In addition, attributable Inferred gold resources were 16 million ounces and attributable Inferred copper resources were 2.0 billion pounds. Resource additions include first-time resource declaration at Elang comprised of Indicated gold and copper resources of 8.1 million ounces and 5.3 billion pounds, respectively, and Inferred gold and copper resources of 1.4 million ounces and 1.0 billion pounds, respectively. Gold resources were calculated using prices of $1,400 per ounce, compared with $1,600 per ounce in 2012. Copper resources were calculated using prices of $3.50 per pound, unchanged from 2012. A $100 increase in gold price would result in an approximate 4 percent increase in gold reserves while a $100 decrease in gold price would result in an approximate 6 percent decrease in gold reserves. A $0.25 increase in copper price would result in an approximate 3 percent increase in copper reserves while a $0.25 decrease in copper price would result in an approximate 5 percent decrease in copper reserves. Mine plan optimization and other revisions accounted for decreases of approximately 7.1 million ounces of gold and 0.6 billion pounds of copper while gold and copper price related reserve revisions accounted for decreases of approximately 2.5 million ounces of gold and 0.5 billion pounds of copper in 2013, as presented in the above tables.

Attributable proven and probable silver reserves for 2013 were 153 million ounces. Attributable Measured and Indicated silver resources for 2013 were 72 million ounces, with additional Inferred silver resources of 31 million ounces. Silver reserves and resources were calculated using prices of $20.00 and $25.00 per ounce, respectively.

For additional details on Newmont’s reported Gold, Copper and Silver Mineral Reserves and Resources, please refer to the tables at the end of this release.

 
NEWMONT MINING CORPORATION
STATEMENTS OF CONSOLIDATED OPERATIONS
(in millions except per share)
                   
Three Months Ended Years Ended

December 31,(1)

December 31,
2013 2012 2013 2012
 
Sales $ 2,169 $ 2,476 $ 8,322 $ 9,868
 
Costs and expenses

Costs applicable to sales (2)

1,453 1,131 5,186 4,238
Amortization 381 281 1,362 1,032
Reclamation and remediation 25 47 81 96
Exploration 52 47 247 356
Advanced projects, research and development 57 90 222 348
General and administrative 45 50 203 212
Write-downs 2,087 52 4,352 52
Other expense, net   40     72     300     449  
  4,140     1,770     11,953     6,783  
Other income (expense)
Other income, net (17 ) 157 349 278
Interest expense, net   (92 )   (59 )   (303 )   (249 )
  (109 )   98     46     29  
Income (loss) before income and mining tax and other items (2,080 ) 804 (3,585 ) 3,114
Income and mining tax benefit (expense) 823 (123 ) 813 (869 )
Equity income (loss) of affiliates   1     (12 )   (5 )   (51 )
Income (loss) from continuing operations (1,256 ) 669 (2,777 ) 2,194
Income (loss) from discontinued operations   8     28     61     (76 )
Net income (loss) (1,248 ) 697 (2,716 ) 2,118
Net loss (income) attributable to noncontrolling interests   82     (24 )   254     (309 )
Net income (loss) attributable to Newmont stockholders $ (1,166 ) $ 673   $ (2,462 ) $ 1,809  
 
Net income (loss) attributable to Newmont stockholders:
Continuing operations $ (1,174 ) $ 645 $ (2,523 ) $ 1,885
Discontinued operations   8     28     61     (76 )
$ (1,166 ) $ 673   $ (2,462 ) $ 1,809  
Income (loss) per common share
Basic:
Continuing operations $ (2.34 ) $ 1.30 $ (5.06 ) $ 3.80
Discontinued operations   0.01     0.06     0.12     (0.15 )
$ (2.33 ) $ 1.36   $ (4.94 ) $ 3.65  
Diluted:
Continuing operations $ (2.34 ) $ 1.30 $ (5.06 ) $ 3.78
Discontinued operations   0.01     0.06     0.12     (0.15 )
$ (2.33 ) $ 1.36   $ (4.94 ) $ 3.63  
 
Cash dividends declared per common share $ 0.20 $ 0.35 $ 1.225 $ 1.40

_________________________________________________________

(1) Unaudited

(2) Excludes Amortization and Reclamation and remediation.

 
 
NEWMONT MINING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
                   
Three Months Ended Years Ended

December 31,(1)

December 31,
2013 2012 2013 2012
Operating activities:
Net income (loss) $ (1,248 ) $ 697 $ (2,716 ) $ 2,118
Adjustments:
Amortization 381 281 1,362 1,032
Stock based compensation and other non-cash benefits 9 17 64 72
Reclamation and remediation 25 47 81 96
Revaluation of contingent consideration (18 ) 12 (18 ) 12
Loss (income) from discontinued operations (8 ) (28 ) (61 ) 76
Write-downs 2,087 52 4,352 52
Impairment of marketable securities 53 8 105 47
Deferred income taxes (744 ) (10 ) (1,314 ) 15
Gain on asset and investment sales, net (4 ) (95 ) (286 ) (107 )
Other operating adjustments and write-downs 402 (101 ) 1,099 48
Net change in operating assets and liabilities   (549 )   (34 )   (1,107 )   (1,073 )
Net cash provided from continuing operations 386 846 1,561 2,388
Net cash used in discontinued operations   (4 )   (4 )   (18 )   (16 )
Net cash provided from operations   382     842     1,543     2,372  
Investing activities:
Additions to property, plant and mine development (372 ) (816 ) (1,900 ) (3,210 )
Acquisitions, net - (3 ) (13 ) (25 )
Sale of marketable securities 1 1 589 210
Purchases of marketable securities - (11 ) (1 ) (220 )
Proceeds from sale of other assets 8 28 63 41
Other   (13 )   (12 )   (51 )   (60 )
Net cash used in investing activities   (376 )   (813 )   (1,313 )   (3,264 )
Financing activities:
Proceeds from debt, net 276 181 1,538 3,524
Repayment of debt (90 ) (20 ) (1,150 ) (1,976 )
Payment of conversion premium on debt - - - (172 )
Proceeds from stock issuance, net - 4 2 24
Sale of noncontrolling interests - - 32 -
Acquisition of noncontrolling interests (4 ) (10 ) (17 ) (10 )
Dividends paid to noncontrolling interests - - (2 ) (3 )
Dividends paid to common stockholders (102 ) (174 ) (611 ) (695 )
Other   -     (1 )   (4 )   (3 )
Net cash provided from financing activities   80     (20 )   (212 )   689  
Effect of exchange rate changes on cash   (6 )   3     (24 )   4  
Net change in cash and cash equivalents 80 12 (6 ) (199 )
Cash and cash equivalents at beginning of period   1,475     1,549     1,561     1,760  
Cash and cash equivalents at end of period $ 1,555   $ 1,561   $ 1,555   $ 1,561  
 

(1) Unaudited

NEWMONT MINING CORPORATION

CONSOLIDATED BALANCE SHEETS

             
At December 31, At December 31,
2013 2012
(in millions)
ASSETS
Cash and cash equivalents $ 1,555 $ 1,561
Trade receivables 230 283
Accounts receivable 252 577
Investments 78 86
Inventories 717 796
Stockpiles and ore on leach pads 783 786
Deferred income tax assets 253 195
Other current assets   1,006     1,661
Current assets 4,874 5,945
Property, plant and mine development, net 14,277 18,010
Investments 439 1,446
Stockpiles and ore on leach pads 2,723 2,896
Deferred income tax assets 1,607 481
Other long-term assets   844     872
Total assets $ 24,764   $ 29,650
LIABILITIES
Debt $ 595 $ 10
Accounts payable 478 657
Employee-related benefits 341 339
Income and mining taxes 13 51
Other current liabilities   1,313     2,084
Current liabilities 2,740 3,141
Debt 6,145 6,288
Reclamation and remediation liabilities 1,513 1,457
Deferred income tax liabilities 635 858
Employee-related benefits 325 586
Other long-term liabilities   342     372
Total liabilities   11,700     12,702
 
EQUITY
Common stock - $1.60 par value; 789 787
Authorized - 750 million shares
Issued and outstanding -

Common: 493 million and 492 million shares issued, less 322,000
and 277,000 treasury shares, respectively

Exchangeable: 56 million shares issued, less 51 million and 51
million redeemed shares, respectively

Additional paid-in capital 8,441 8,330

Accumulated other comprehensive income (loss)

(182 ) 490
Retained earnings   1,093     4,166
Newmont stockholders’ equity 10,141 13,773
Noncontrolling interests   2,923     3,175
Total equity   13,064     16,948
Total liabilities and equity $ 24,764   $ 29,650
 

 

Regional Operating Statistics

Production Statistics Summary
  Three Months Ended December 31,     Years Ended December 31,
2013     2012 2013     2012
Consolidated gold ounces produced (thousands):
North America
Nevada 535 478 1,768 1,748
La Herradura 22 48 183 212
557 526 1,951 1,960
South America
Yanacocha 184 236 1,017 1,346
 
Australia/New Zealand
Boddington 179 216 704 724
Other Australia/New Zealand 291 230 1,044 924
470 446 1,748 1,648
 
Indonesia
Batu Hijau 12 14 48 68
 
Africa
Ahafo 162 123 570 561
Akyem 129 - 129 -
291 123 699 561
1,514 1,345 5,463 5,583
 
Consolidated copper pounds produced (millions):
Boddington 16 19 66 67
Batu Hijau 46 33 161 157
62 52 227 224
 
Attributable gold ounces produced (thousands):
North America
Nevada 535 478 1,768 1,748
La Herradura 22 48 183 212
557 526 1,951 1,960
South America
Yanacocha 95 121 523 691
Other South America Equity Interests 16 13 65 53
111 134 588 744
 
Australia/New Zealand
Boddington 179 216 704 724
Other Australia/New Zealand 291 230 1,044 924
Other Australia/New Zealand Equity Interests 13 15 56 31
483 461 1,804 1,679
 
Indonesia
Batu Hijau 6 7 23 33
 
Africa
Ahafo 162 123 570 561
Akyem 129 - 129 -
291 123 699 561
1,448 1,251 5,065 4,977
 
Attributable copper pounds produced (millions):
Boddington 16 19 66 67
Batu Hijau 22 16 78 76
38 35 144 143
 

               
CAS and Capital Expenditures
Gold Costs Applicable to Sales ($/ounce) (1) Three Months Ended December 31, Years Ended December 31,
2013 2012 2013 2012
North America
Nevada $ 691 $ 580 $ 663 $ 638
La Herradura   2,524   759   967   621
  764   596   691   636
South America
Yanacocha 833 617 650 505
 
Australia/New Zealand
Boddington 1,115 856 1,083 877
Other Australia/New Zealand   741   961   882   879
  892   912   966   878
Indonesia
Batu Hijau 1,946 1,292 2,332 1,071
Africa
Ahafo 510 694 542 596
Akyem   248   -   248   -
  393   694   487   596
Average $ 755 $ 720 $ 761 $ 677
Attributable to Newmont $ 744 $ 726 $ 765 $ 698
Copper Costs Applicable to Sales ($/pound) (1)
Boddington $ 3.03 $ 2.23 $ 2.75 $ 2.29
Batu Hijau   4.36   2.77   5.17   2.36
Average $ 4.02 $ 2.61 $ 4.42 $ 2.34
Attributable to Newmont $ 3.81 $ 2.52 $ 4.00 $ 2.33
(1)Consolidated Costs applicable to sales excludes Amortization and Reclamation and remediation.
 
Consolidated Capital Expenditures ($ million) Three Months Ended December 31, Years Ended December 31,
2013 2012 2013 2012
North America
Nevada $ 90 $ 157 $ 450 $ 646
La Herradura 20 39 102 89
Other North America   -   -   1   31
  110   196   553   766
South America
Yanacocha 41 118 177 510
Conga 6 115 190 582
Other South America   6   12   71   66
  53   245   438   1,158
Australia/New Zealand
Boddington 32 64 113 141
Other Australia/New Zealand   50   70   173   296
  82   134   286   437
Indonesia
Batu Hijau   23   50   105   148
  23   50   105   148
Africa
Ahafo 30 52 169 228
Akyem   27   83   236   388
  57   135   405   616
Corporate and Other   5   5   12   27
Total - Accrual Basis $ 330 $ 765 $ 1,799 $ 3,152
Change in Capital Accrual   42   51   101   58
Total - Cash Basis $ 372 $ 816 $ 1,900 $ 3,210
Attributable to Newmont (Accrual Basis) $ 295 $ 626 $ 1,566 $ 2,545
 

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 (loss) to GAAP Net Income (loss)

Management uses the non-GAAP financial measure Adjusted net income (loss) to evaluate the Company’s operating performance, and for planning and forecasting future business operations. The Company believes the use of Adjusted net income (loss) 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 (loss) are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts.

Net income (loss) attributable to Newmont stockholders is reconciled to Adjusted net income (loss) as follows:

        Three Months Ended December 31,     Years Ended December 31,
2013     2012 2013     2012  
Net income (loss) attributable to Newmont stockholders $ (1,166 ) $ 673 $ (2,462 ) $ 1,809
Loss (income) from discontinued operations (8 ) (28 ) (61 ) 76
Impairments 1,345 42 2,875 80
Tax valuation allowance - - 535 -
Asset Sales (3 ) (82 ) (246 ) (90 )
TMAC transaction costs - - 30 -
Boddington contingent consideration (12 ) - (12 ) 8
Restructuring and other 11 6 36 26
Income tax benefit from internal restructuring   -     (59 )   -     (59 )
Adjusted net income (loss) $ 167   $ 552   $ 695   $ 1,850  
Adjusted net income (loss) per share, basic $ 0.33 $ 1.11 $ 1.40 $ 3.73
Adjusted net income (loss) per share, diluted $ 0.33 $ 1.11 $ 1.40 $ 3.71
 

Net income (loss) attributable to Newmont stockholders for the three and twelve months ended December 31, 2013 was impacted by stockpile and leach pad write-downs of $237 and $547, respectively, net of tax and minority interest, which is not reflected in the table above.

CAS per Ounce/Pound

Costs applicable to sales per ounce/pound are non-GAAP financial measures. These measures are calculated by dividing the costs applicable to sales of gold and copper by gold ounces or copper pounds sold, respectively. These measures are calculated on a consistent basis for the periods presented on both a consolidated and attributable to Newmont basis. Attributable costs applicable to sales are based on our economic interest in production from our mines. For operations where we hold less than a 100 percent economic share in the production, we exclude the share of gold or copper production attributable to the non-controlling interest. We include attributable costs applicable to sales per ounce/pound to provide management, investors and analysts with information with which to compare our performance to other gold producers. Costs applicable to sales per ounce/pound statistics are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.

Net attributable costs applicable to sales per ounce measures the benefit of copper produced in conjunction with gold, as a credit against the cost of producing gold. A number of other gold producers present their costs net of the contribution from copper and other non-gold sales. We believe that including a measure on this basis provides management, investors and analysts with information with which to compare our performance to other gold producers, and to better assess the overall performance of our business. In addition, this measure provides information to enable investors and analysts to understand the importance of associated non-gold revenues to our cost structure.

The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measures.

 
Costs applicable to sales per ounce/pound
      Gold(1)     Copper(2)
Years Ended December 31, Years Ended December 31,
2013     2012     2011 2013     2012     2011  
 
Costs applicable to sales:
Consolidated per financial statements $ 4,176 $ 3,703 $ 3,440 $ 1,010 $ 535 $ 450
Noncontrolling interests(3)   (377 )   (362 )   (442 )   (420 )   (198 )   (171 )
Attributable to Newmont $ 3,799   $ 3,341   $ 2,998   $ 590   $ 337   $ 279  
 
Gold/Copper sold (thousand ounces/million pounds):
Consolidated 5,489 5,466 5,820 229 229 356
Noncontrolling interests(3)   (521 )   (679 )   (795 )   (81 )   (84 )   (153 )
Attributable to Newmont(4)   4,968     4,787     5,025     148     145     203  
 
Costs applicable to sales per ounce/pound:
Consolidated $ 761 $ 677 $ 591 $ 4.42 $ 2.34 $ 1.26
Attributable to Newmont $ 765 $ 698 $ 597 $ 4.00 $ 2.33 $ 1.37
 

(1)Consolidated Costs applicable to sales per financial statements includes by-product credits of $198, $231 and $291 for 2013, 2012 and 2011, respectively.

(2)Consolidated Costs applicable to sales per financial statements includes by-product credits of $4, $11, and $28 for 2013, 2012 and 2011, respectively.
(3)Relates to partners' interests in Batu Hijau and Yanacocha.
(4)Does not include any sales from our non-consolidated interests in La Zanja and Duketon.
 

 
Net attributable costs applicable to sales per ounce
  Years Ended December 31,
2013     2012     2011
 
Attributable costs applicable to sales:
Gold $ 3,799 $ 3,341 $ 2,998
Copper   590     337     279  
  4,389     3,678     3,277  
 
Copper revenue:
Consolidated (677 ) (785 ) (1,262 )
Noncontrolling interests(1)   240     289     542  
  (437 )   (496 )   (720 )
Net attributable costs applicable to sales $ 3,952   $ 3,182   $ 2,557  
 
Attributable gold ounces sold (thousands) 4,968 4,787 5,025
 
Net attributable costs applicable to sales per ounce $ 795 $ 665 $ 509
 
(1)Relates to partners' interests in Batu Hijau.
 

All-In Sustaining Costs

Newmont has worked to develop a metric that expands on GAAP measures such as cost of goods sold and non-GAAP measures to provide visibility into the economics of our gold mining operations related to expenditures, operating performance and the ability to generate cash flow from operations.

Current GAAP-measures used in the gold industry, such as cost of goods sold, do not capture all of the expenditures incurred to discover, develop, and sustain gold production. Therefore, we believe that all-in sustaining costs and attributable all-in sustaining costs are non-GAAP measures that provide additional information to management, investors, and analysts that aid in the understanding of the economics of our operations and performance compared to other gold producers and in the investor’s visibility by better defining the total costs associated with producing gold.

All-in sustaining cost (“AISC”) amounts are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently as a result of differences in the underlying accounting principles, policies applied and in accounting frameworks such as in International Financial Reporting Standards, or by reflecting the benefit from selling non-gold metals as a reduction to AISC. Differences may also arise related to definitional differences of sustaining versus development capital activities based upon each company’s internal policies.

The following disclosure provides information regarding the adjustments made in determining the all-in sustaining costs measure:

Cost Applicable to Sales - Includes all direct and indirect costs related to current gold production incurred to execute the current mine plan. Costs applicable to sales (“CAS”) included by-product credits from certain metals obtained during the process of extracting and processing the primary ore-body. CAS is accounted for on an accrual basis and excludes Amortization and Reclamation and remediation, which is consistent with our presentation of CAS on the Statement of Consolidated Income. In determining all-in sustaining costs, only the CAS associated with producing and selling an ounce of gold is included in the measure. Therefore, the amount of gold CAS included in AISC is derived from the CAS presented in the Company’s Statement of Consolidated Income less the amount of CAS attributable to the production of copper at our Boddington and Batu Hijau mines. The copper CAS at those mine sites is disclosed in Note 3 – Segments that accompanies the Consolidated Financial Statements in the Company’s form 10-K for the year ended December 31, 2013, which is expected to be filed on February 20, 2014. The allocation of CAS between gold and copper at the Boddington and Batu Hijau mines is based upon the relative sales percentage of copper and gold sold during the period.

Remediation Costs - Includes accretion expense related to asset retirement obligations (“ARO”) and the amortization of the related Asset Retirement Cost (“ARC”) for the Company’s operating properties recorded as an ARC asset. Accretion related to ARO and the amortization of the ARC assets for reclamation and remediation do not reflect annual cash outflows but are calculated in accordance with GAAP. The accretion and amortization reflect the periodic costs of reclamation and remediation associated with current gold production and are therefore included in the measure. The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Boddington and Batu Hijau mines.

Advanced Projects and Exploration - Includes incurred expenses related to projects that are designed to increase or enhance current gold production and gold exploration. We note that as current resources are depleted, exploration and advance projects are necessary for us to replace the depleting reserves or enhance the recovery and processing of the current reserves. As this relates to sustaining our gold production, and is considered a continuing cost of a mining company, these costs are included in the AISC measure. These costs are derived from the Advanced projects, research and development and Exploration amounts presented in the Company’s Statement of Consolidated Income less the amount attributable to the production of copper at our Boddington and Batu Hijau mines. The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Boddington and Batu Hijau mines.

General and Administrative - Includes cost related to administrative tasks not directly related to current gold production, but rather related to support our corporate structure and fulfilling our obligations to operate as a public company. Including these expenses in the AISC metric provides visibility of the impact that general and administrative activities have on current operations and profitability on a per ounce basis.

Other Expense, net - Includes costs related to regional administration and community development to support current gold production. We exclude certain exceptional or unusual expenses from Other expense, net, such as restructuring, as these are not indicative to sustaining our current gold operations. Furthermore, this adjustment to Other expense, net is also consistent with the nature of the adjustments made to Net income (loss) as disclosed in the Company’s non-GAAP financial measure Adjusted net income (loss). The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Boddington and Batu Hijau mines.

Treatment and Refining Costs - Includes costs paid to smelters for treatment and refining of our concentrates to produce the salable precious metal. These costs are presented net as a reduction of Sales.

Sustaining Capital - We determined sustaining capital as those capital expenditures that are necessary to maintain current gold production and execute the current mine plan. Capital expenditures to develop new operations, or related to projects at existing operations where these projects will enhance gold production or reserves, are considered development. We determined the breakout of sustaining and development capital costs based on a systematic review of our project portfolio in light of the nature of each project. Sustaining capital costs are relevant to the AISC metric as these are needed to maintain the Company’s current gold operations and provide improved transparency related to our ability to finance these expenditures from current operations. The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Boddington and Batu Hijau mines.

                                           
Costs Advanced Other Treatment and All-In Ounces All-In Sustaining
Three Months Ended Applicable Remediation Projects and General and Expense, Refining Sustaining Sustaining Sold Costs
December 31, 2013 to Sales(1)(2)(3) Costs(4) Exploration(5) Administrative Net(6) Costs Capital(7)(8) Costs (000 )(9) per ounce
 
Nevada $ 365 $ 5 $ 16 $ - $ 4 $ 2 $ 60 $ 452 527 $ 858
La Herradura 55 - 11 - - - 13 79 22 3,591
Other North America   -   -   2   -   (3 )   -   -   (1 )   -      
North America   420   5   29   -   1     2   73   530     549     965
 
Yanacocha 154 22 9 - 2 - 40 227 186 1,220
Conga - - 8 - 1 - - 9 -
Other South America   -   -   8   -   1     -   -   9     -      
South America   154   22   25   -   4     -   40   245     186     1,317
Attributable to Newmont   130   96     1,354
 
Boddington 227 1 - - - 1 26 255 203 1,256
Other Australia/New Zealand   224   7   8   -   9     -   48   296     302     980
Australia/New Zealand   451   8   8   -   9     1   74   551     505     1,091
 
Batu Hijau   26   1   -   -   1     1   2   31     13     2,385
Indonesia   26   1   -   -   1     1   2   31     13     2,385
Attributable to Newmont   16     6     2,385
 
Ahafo 81 1 15 - 3 - 11 111 159 698
Akyem 32 - - - 3 - - 35 129 271
Other Africa   -   -   2   -   (1 )   -   -   1     -     -
Africa   113   1   17   -   5     -   11   147     288     510
 
Corporate and Other   -   -   29   45   9     -   4   87     -     -
Consolidated $ 1,164 $ 37 $ 108 $ 45 $ 29   $ 4 $ 204 $ 1,591     1,541   $ 1,032
Attributable to Newmont $ 1,461     1,444   $ 1,012
 
(1)   Excludes Amortization and Reclamation and remediation.
(2) Excludes copper Costs applicable to sales at Boddington and Batu Hijau of $289.
(3) Includes gold by-product credits of $ 44.
(4) Remediation costs include operating accretion of $15 and amortization of asset retirement costs of $ 25 which is further reduced by the copper allocation of Remediation costs of $3.
(5) Excludes the copper allocation of Advanced projects and Exploration of $1.
(6) Other expense, net is adjusted for restructuring of $17, the copper allocation of $12 offset by $18 for Boddington Contingent Consideration.
(7) Excludes development capital expenditures, capitalized interest, and the decrease in capital accrual of $140. The following are major development projects; Phoenix Copper Leach, Turf Vent Shaft, Yanacocha Bio Leach, Conga, Merian, Ahafo Mill Expansion, and Akyem for 2013.
(8) Excludes the copper allocation of $ 28.
(9) Excludes attributable gold sales from La Zanja and Duketon.
 

                                           
Costs Advanced Other Treatment and All-In Ounces All-In Sustaining
Three Months Ended Applicable Remediation Projects and General and Expense, Refining Sustaining Sustaining Sold Costs
December 31, 2012 to Sales(1)(2)(3) Costs(4) Exploration(5) Administrative Net(6) Costs Capital(7)(8) Costs (000 )(9) per ounce
 
Nevada $ 281 $ 3 $ 14 $ - $ 1 $ 3 $ 95 $ 397 483 $ 822
La Herradura 36 - 13 - - - 33 82 48 1,708
Other North America   -   -   -   -   (2 )   -   -   (2 )   -      
North America   317   3   27   -   (1 )   3   128   477     531     898
 
Yanacocha 146 9 10 - 22 - 104 291 238 1,223
Conga - - 13 - - - - 13 - -
Other South America   -   -   10   -   2     -   10   22     -     -
South America   146   9   33   -   24     -   114   326     238     1,370
Attributable to Newmont   179     123     1,455
 
Boddington 174 1 - - 1 1 51 228 204 1,118
Other Australia/New Zealand   223   7   18   -   8     -   64   320     231     1,385
Australia/New Zealand   397   8   18   -   9     1   115   548     435     1,260
 
Batu Hijau   24   -   2   -   2     1   8   37     19     1,947
Indonesia   24   -   2   -   2     1   8   37     19     1,947
Attributable to Newmont   18     9     1,947
 
Ahafo 73 1 11 - 6 - 19 110 105 1,048
Akyem - - 4 - 1 - - 5 - -
Other Africa   -   -   4   -   -     -   -   4     -     -
Africa   73   1   19   -   7     -   19   119     105     1,133
 
Corporate and Other   -   -   29   50   (1 )   -   6   84     -     -
Consolidated $ 957 $ 21 $ 128 $ 50 $ 40   $ 5 $ 390 $ 1,591     1,328   $ 1,198
Noncontrolling interests   166     125     1,328
Attributable to Newmont $ 1,425     1,203   $ 1,185
(1)   Excludes Amortization and Reclamation and remediation.
(2) Excludes copper Costs applicable to sales at Boddington and Batu Hijau of $174.
(3) Includes gold by-product credits of $ 67.
(4) Remediation costs include operating accretion of $13 and amortization of asset retirement costs of $ 11 which is further reduced by the copper allocation of Remediation costs of $3.
(5) Excludes the copper allocation of Advanced projects and Exploration of $9.
(6) Other expense, net is adjusted for Hope Bay Care and Maintenance of $15, restructuring of $10, and the copper allocation of $7.
(7) Excludes development capital expenditures, capitalized interest, and the decrease in capital accrual of $373. The following are major development projects; Emigrant, Phoenix Copper Leach, Turf Vent Shaft, Yanacocha Bio Leach, Conga, Tanami Vent Shaft, Ahafo Mill Expansion, and Akyem for 2012.
(8) Excludes the copper allocation of $ 53.
(9) Excludes attributable gold sales from La Zanja and Duketon.
 

                                           
Costs Advanced Other Treatment and All-In Ounces All-In Sustaining
Years Ended Applicable Remediation Projects and General and Expense, Refining Sustaining Sustaining Sold Costs
December 31, 2013 to Sales(1)(2)(3) Costs(4) Exploration(5) Administrative Net(6) Costs Capital(7)(8) Costs (000 )(9) per ounce
 
Nevada $ 1,164 $ 15 $ 94 $ - $ 17 $ 23 $ 258 $ 1,571 1,756 $ 895
La Herradura 177 - 42 - - - 74 293 183 1,601
Other North America   -   -   4   -   1     -   1   6     -      
North America   1,341   15   140   -   18     23   333   1,870     1,939     964
 
Yanacocha 663 90 41 - 63 - 148 1,005 1,022 983
Conga - - 24 - 3 - - 27 -
Other South America   -   -   22   -   1     -   -   23     -      
South America   663   90   87   -   67     -   148   1,055     1,022     1,032
Attributable to Newmont   553   525     1,053
 
Boddington 805 6 1 - 2 4 90 908 743 1,222
Other Australia/New Zealand   921   26   39   -   41     -   166   1,193     1,044     1,143
Australia/New Zealand   1,726   32   40   -   43     4   256   2,101     1,787     1,176
 
Batu Hijau 107 2 2 - 3 5 12 131 46 2,848
Other Indonesia   -   -   -   -   (2 )   -   -   (2 )   -      
Indonesia   107   2   2   -   1     5   12   129     46     2,804
Attributable to Newmont   62     22     2,818
 
Ahafo 307 3 51 - 24 - 109 494 566 873
Akyem 32 - 7 - 3 - - 42 129 326
Other Africa   -   -   13   -   -     -   -   13     -      
Africa   339   3   71   -   27     -   109   549     695     790
 
Corporate and Other   -   -   117   203   25     -   12   357     -      
Consolidated $ 4,176 $ 142 $ 457 $ 203 $ 181   $ 32 $ 870 $ 6,061     5,489   $ 1,104
Attributable to Newmont $ 5,492     4,968   $ 1,105
(1)   Excludes Amortization and Reclamation and remediation.
(2) Excludes copper Costs applicable to sales at Boddington and Batu Hijau of $1,010.
(3) Includes gold by-product credits of $198.
(4) Remediation costs include operating accretion of $61 and amortization of asset retirement costs of $94 which is further reduced by the copper allocation of Remediation costs of $13.
(5) Excludes the copper allocation of Advanced projects and Exploration of $12.
(6) Other expense, net is adjusted for restructuring of $67, TMAC transaction costs of $45, and the copper allocation of $25 offset by $18 for Boddington Contingent Consideration.
(7) Excludes development capital expenditures, capitalized interest, and the decrease in accrued capital of $915. The following are major development projects; Phoenix Copper Leach, Turf Vent Shaft, Yanacocha Bio Leach, Conga, Merian, Ahafo Mill Expansion, and Akyem for 2013.
(8) Excludes the copper allocation of $115.
(9) Excludes attributable gold sales from La Zanja and Duketon.
 

                                           
Costs Advanced Other Treatment and All-In Ounces All-In Sustaining
Years Ended Applicable Remediation Projects and General and Expense, Refining Sustaining Sustaining Sold Costs
December 31, 2012 to Sales(1)(2)(3) Costs(4) Exploration(5) Administrative Net(6) Costs Capital(7)(8) Costs (000 )(9) per ounce
 
Nevada $ 1,098 $ 12 $ 138 $ - $ 18 $ 22 $ 499 $ 1,787 1,719 $ 1,040
La Herradura 132 - 41 - - - 71 244 212 1,151
Other North America   -   -   2   -   1     -   -   3     -      
North America   1,230   12   181   -   19     22   570   2,034     1,931     1,053
 
Yanacocha 669 34 59 - 70 - 479 1,311 1,325 989
Conga - - 61 - - - - 61 -
Other South America   -   -   69   -   4     -   10   83     -      
South America   669   34   189   -   74     -   489   1,455     1,325     1,098
Attributable to Newmont   788   681     1,157
 
Boddington 623 6 6 - 3 7 112 757 711 1,065
Other Australia/New Zealand   796   24   84   -   47     -   231   1,182     905     1,306
Australia/New Zealand   1,419   30   90   -   50     7   343   1,939     1,616     1,200
 
Batu Hijau 71 2 5 - 8 7 23 116 67 1,731
Other Indonesia   -   -   -   -   (3 )   -   -   (3 )   -      
Indonesia   71   2   5   -   5     7   23   113     67     1,687
Attributable to Newmont   53     32     1,656
 
Ahafo 314 4 53 - 24 - 85 480 527 911
Akyem - - 19 - 1 - - 20 -
Other Africa   -   -   12   -   1     -   -   13     -      
Africa   314   4   84   -   26     -   85   513     527     973
 
Corporate and Other   -   -   126   212   18     -   25   381     -      
Consolidated $ 3,703 $ 82 $ 675 $ 212 $ 192   $ 36 $ 1,535 $ 6,435     5,466   $ 1,177
Attributable to Newmont $ 5,708     4,787   $ 1,192
(1)   Excludes Amortization and Reclamation and remediation.
(2) Excludes copper Costs applicable to sales at Boddington and Batu Hijau of $535.
(3) Includes gold by-product credits of $231.
(4) Remediation costs include operating accretion of $55 and amortization of asset retirement costs of $40 which is further reduced by the copper allocation of Remediation costs of $13.
(5) Excludes the copper allocation of Advanced projects and Exploration of $29.
(6) Other expense, net is adjusted for restructuring of $58, Hope Bay care and maintenance of $144, Boddington Contingent Consideration of $12, and the copper allocation of $43.
(7) Excludes development capital expenditures, capitalized interest, and the decrease in accrued capital of $1,523. The following are major development projects; Emigrant, Phoenix Copper Leach, Turf Vent Shaft, Yanacocha Bio Leach, Conga, Tanami Vent Shaft, Ahafo Mill Expansion, and Akyem for 2012.
(8) Excludes the copper allocation of $ 152.
(9) Excludes attributable gold sales from La Zanja and Duketon.
 

       
Consolidated Spending ($M) Three Months Ended December 31, Year Ended December 31,
2013     2012 2013     2012
 
Costs applicable to sales $

1,453

$ 1,131 $ 5,186 $ 4,238

CAS inventory, stockpiles and leach pad write-downs

(348 ) (7 ) (972 ) (33 )
Advanced projects, research and development and Exploration 109 137 469 704
General and administrative 45 50 203 212
Other expense, net (1)

39

47 206 235
Sustaining capital   231       444       985       1,687  
Consolidated Spending $

1,529

  $ 1,802   $ 6,077   $ 7,043  
 

(1) Other expense, net is adjusted for restructuring of $67, TMAC transaction costs of $45, and Boddington contingent consideration of ($18) for 2013; 2012 other expense, net is adjusted for Hope Bay care and maintenance of $144, restructuring costs of $58, and Boddington contingent consideration of $12.

 

Reserve and Resource Tables

Proven and Probable reserves are based on extensive drilling, sampling, mine modeling and metallurgical testing from which we determine economic feasibility. Metal price assumptions follow SEC guidance not to exceed a three year trailing average. The price sensitivity of reserves depends upon several factors including grade, metallurgical recovery, operating cost, waste-to-ore ratio and ore type. Metallurgical recovery rates vary depending on the metallurgical properties of each deposit and the production process used. The reserve tables included in this release list the average metallurgical recovery rate for each deposit, which takes into account the relevant processing methods. The cut-off grade, or lowest grade of mineralized material considered economic to process, varies with material type, price, metallurgical recoveries, operating costs and co- or by-product credits. The Proven and Probable reserve figures presented herein are estimates based on information available at the time of calculation. No assurance can be given that the indicated levels of recovery of gold and copper will be realized. Ounces of gold and silver or pounds of copper included in the proven and probable reserves are those contained prior to losses during metallurgical treatment. Reserve estimates may require revision based on actual production. Market fluctuations in the price of gold or copper, as well as increased production costs or reduced metallurgical recovery rates, could render certain proven and probable reserves containing relatively lower grades of mineralization uneconomic to exploit and might result in a reduction of reserves.

The Measured, Indicated, and Inferred resource figures presented herein are estimates based on information available at the time of calculation and are exclusive of reserves. A “Mineral Resource” is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade, or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. Ounces of gold and silver or pounds of copper included in the Measured, Indicated and Inferred resources are those contained prior to losses during metallurgical treatment. Market fluctuations in the price of gold and copper, as well as increased production costs or reduced metallurgical recovery rates, could change future estimates of resources.

We publish reserves and resources annually, and will recalculate reserves and resources at year-end 2014, taking into account metal prices, changes, if any, in future production and capital costs, mine designs, model changes, divestments and depletion as well as any acquisitions and additions during 2014.

 

Attributable Proven, Probable, and Combined Gold Reserves(1), U.S. Units

December 31, 2013     December 31, 2012
Deposits/Districts by Reporting Unit     Proven Reserves   Probable Reserves   Proven and Probable Reserves   Metallurgical Recovery     Proven + Probable Reserves
      Newmont Tonnage   Grade   Gold   Tonnage   Grade   Gold   Tonnage   Grade   Gold       Tonnage   Grade   Gold
          Share   (x1000 tons)   (oz/ton)   (x1000 ozs)   (x1000 tons)   (oz/ton)   (x1000 ozs)   (x1000 tons)   (oz/ton)   (x1000 ozs)         (x1000 tons)   (oz/ton)   (x1000 ozs)
North America
Carlin Open Pits, Nevada 100% 71,200 0.054 3,870 200,400 0.029 5,860 271,600 0.036 9,730 76% 313,200 0.037 11,650
Carlin Underground, Nevada 100% 17,800 0.258 4,590 6,100 0.233 1,420 23,900 0.252 6,010 85% 23,500 0.265 6,230
Midas, Nevada(2) 100% 50 0.135 10 200 0.083 20 250 0.093 30 85% 600 0.095 50
Phoenix, Nevada 100% 21,000 0.019 390 314,800 0.017 5,270 335,800 0.017 5,660 73% 439,900 0.017 7,430
Twin Creeks, Nevada 100% 5,800 0.109 640 33,600 0.051 1,720 39,400 0.060 2,360 73% 58,300 0.058 3,400
Long Canyon(3) 100% 0 0 15,700 0.065 1,010 15,700 0.065 1,010 78% - - -
Turquoise Ridge, Nevada(4) 25% 1,500 0.538 820 1,800 0.499 870 3,300 0.517 1,690 92% 5,100 0.381 1,940
Nevada In-Process(5) 100% 22,400 0.018 390 - - - 22,400 0.018 390 61% 25,500 0.018 450
Nevada Stockpiles(6) 100% 68,800 0.059 4,030 3,400 0.028 90 72,200 0.057 4,120 73% 72,300 0.054 3,920
Total Nevada 208,550 0.071 14,740 576,000 0.028 16,260 784,550 0.040 31,000 77% 938,400 0.037 35,070
  La Herradura, Mexico   44%   61,000   0.020   1,240   48,400   0.019   940   109,400   0.020   2,180   74%     158,100   0.017   2,610
TOTAL NORTH AMERICA       269,550   0.059   15.980   624,400   0.028   17,200   893,950   0.037   33,180   77%     1,096,500   0.034   37,680
South America
Conga, Peru(7) 51.35% - - - 303,400 0.021 6,460 303,400 0.021 6,460 75% 303,400 0.021 6,460
Yanacocha Open Pits 51.35% 21,700 0.047 1,010 73,100 0.017 1,280 94,800 0.024 2,290 73% 96,400 0.024 2,360
Yanacocha In-Process(5) 51.35% 9,100 0.020 190 - - - 9,100 0.020 190 72% 8,600 0.026 220
Yanacocha Stockpiles(6) 51.35% 8,800 0.054 480 - - - 8,800 0.054 480 64% 8,400 0.054 460
Total Yanacocha, Peru 51.35% 39,600 0.042 1,680 73,100 0.017 1,280 112,700 0.026 2,960 71% 113,400 0.027 3,040
La Zanja, Peru(8) 46.94% 1,200 0.020 20 7,500 0.021 150 8,700 0.021 170 66% 12,500 0.018 230
  Merian, Suriname(9)   80%   -   -   -   95,500   0.035   3,390   95,500   0.035   3,390   93%     79,800   0.036   2,850
TOTAL SOUTH AMERICA       40,800   0.042   1,700   479,500   0.024   11,280   520,300   0.025   12,980   79%     509,100   0.025   12,580
Australia/New Zealand

Boddington, Open Pit

100% 88,000 0.021 1,860 528,100 0.020 10,730 616,100 0.020 12,590 80% 930,500 0.019 17,660
Boddington Stockpiles 100% 27,500 0.016 440 42,300 0.013 540 69,800 0.014 980 81% 63,800 0.015 940
Total Boddington, Western Australia 100% 115,500 0.020 2,300 570,400 0.020 11,270 685,900 0.020 13,570 80% 994,300 0.019 18,600
Duketon, Western Australia(10) 19.52% 1,100 0.043 50 12,100 0.040 480 13,200 0.040 530 95% 12,600 0.045 570
Jundee, Western Australia 100% 1,700 0.064 110 1,600 0.192 300 3,300 0.124 410 91% 3,900 0.130 510
Kalgoorlie Open Pit and Underground 50% 9,900 0.059 580 31,600 0.056 1,770 41,500 0.057 2,350 85% 50,400 0.057 2,870
Kalgoorlie Stockpiles(6) 50% 59,700 0.023 1,370 - - - 59,700 0.023 1,370 76% 57,900 0.023 1,330
Total Kalgoorlie, Western Australia 50% 69,600 0.028 1,950 31,600 0.056 1,770 101,200 0.037 3,720 81% 108,300 0.039 4,200
Tanami, Northern Territory 100% 4,000 0.159 640 13,800 0.172 2,370 17,800 0.169 3,010 94% 13,900 0.161 2,220
  Waihi, New Zealand   100%   200   0.252   60   2,000   0.080   160   2,200   0.098   220   90%     3,000   0.101   300
TOTAL AUSTRALIA/NEW ZEALAND       192,100   0.027   5,110   631,500   0.026   16,350   823,600   0.026   21,460   83%     1,136,000   0.023   26,400
Indonesia
Batu Hijau Open Pit(11) 48.5% 119,000 0.014 1,660 144,100 0.009 1,340 263,100 0.011 3,000 76% 297,900 0.010 3,110
  Batu Hijau Stockpiles(6)(11)   48.5%   -       -   138,200   0.003   430   138,200   0.003   430   65%     140,600   0.003   440
TOTAL INDONESIA       119,000   0.014   1,660   282,300   0.006   1,770   401,300   0.009   3,430   75%     438,500   0.008   3,550
Africa
Ahafo Open Pits(12) 100% 8,000 0.069 560 126,800 0.061 7,770 134,800 0.062 8,330 88% 183,100

0.055

10,150
Ahafo Underground(13) 100% - - 4,900 0.129 630 4,900 0.129 630 91% 4,900

0.129

630
Ahafo Stockpiles(6) 100% 37,300 0.031 1,160 - - - 37,300 0.031 1,160 86% 27,200

0.030

800

 

Total Ahafo, Ghana 100% 45,300 0.038 1,720 131,700 0.064 8,400 177,000 0.057 10,120 88% 215,200

0.054

11,580

 

Akyem Open Pit 100% - - 137,800 0.049 6,810 137,800 0.049 6,810 88% 144,600

0.051

7,380

 

Akyem Stockpiles(6) 100% 5,500 0.068 370 - - - 5,500 0.068 370 90%

-

-

-

 

  Total Akyem, Ghana(14)   100%   5,500   0.068   370   137,800   0.049   6,810   143,300   0.050   7,180   88%     144,600  

0.051

  7,380
TOTAL AFRICA       50,800   0.041   2,090   269,500   0.056   15,210   320,300   0.054   17,300   88%     359,800   0.053   18,960

TOTAL NEWMONT WORLDWIDE

      672,250   0.039   26,540   2,287,200   0.027   61,810   2,959,450   0.030   88,350   81%     3,539,900   0.028   99,170
(1)   Reserves are calculated at a gold price of $1,300, A$1,415 or NZ$1,675 per ounce unless otherwise noted. 2012 reserves were calculated at a gold price of $1,400, A$1,400 or NZ$1,800 per ounce unless otherwise noted. Tonnage amounts have been rounded to the nearest 100,000 unless they are less than 50,000, and gold ounces have been rounded to the nearest 10,000.
(2) Property sold to Klondex Mines on February 11, 2014. Values in the table above are as of December 31, 2013.
(3) Project is currently undeveloped.
(4) Reserve estimates provided by Barrick, the operator of the Turquoise Ridge joint venture.
(5) In-process material is the material on leach pads at the end of the year from which gold remains to be recovered. In-process material reserves are reported separately where tonnage or contained ounces are greater than 5% of the total site-reported reserves and contained ounces are greater than 100,000.
(6) Stockpiles are comprised primarily of material that has been set aside to allow processing of higher grade material in the mills. Stockpiles increase or decrease depending on current mine plans. Stockpile reserves are reported separately where tonnage or contained ounces are greater than 5% of the total site-reported reserves and contained ounces are greater than 100,000.
(7) Project is under development.
(8) Reserve estimates were provided by Buenaventura, the operator of the La Zanja project.
(9)

Project has completed Feasibility and awaits construction decision. Percentage reflects Newmont’s economic interest at December 31, 2013. As of February 19, 2014, Newmont’s economic interest was 100%.

(10) Reserve estimates provided by Regis Resources Ltd., in which Newmont holds a 19.52% interest.
(11) Percentage reflects Newmont’s economic interest as of December 31, 2013.
(12) Includes undeveloped reserves at Yamfo South, Yamfo Central, Techire West, Subenso South, Subenso North, Yamfo Northeast, and Susuan totaling 3.2 million ounces.
(13) Subika Underground project is under development.
(14) Project reached commercial production in November 2013.
 

 

Attributable Proven, Probable, and Combined Gold Reserves(1), Metric Units

December 31, 2013     December 31, 2012
Deposits/Districts by Reporting Unit     Proven Reserves   Probable Reserves   Proven and Probable Reserves   Metallurgical Recovery     Proven + Probable Reserves
      Newmont Tonnage   Grade   Gold   Tonnage   Grade   Gold   Tonnage   Grade   Gold       Tonnage   Grade   Gold
          Share   (x1000 tonnes)   (g/tonne)   (x1000 ozs)   (x1000 tonnes)   (g/tonne)   (x1000 ozs)   (x1000 tonnes)   (g/tonne)   (x1000 ozs)         (x1000 tonnes)   (g/tonne)   (x1000 ozs)
North America
Carlin Open Pits, Nevada 100% 64,500 1.87 3,870 181,800 1.00 5,860 246,300 1.23 9,730 76% 284,200 1.28 11,650
Carlin Underground, Nevada 100% 16,100 8.85 4,590 5,500 7.99 1,420 21,600 8.63 6,010 85% 21,300 9.09 6,230
Midas, Nevada(2) 100% 40 4.64 10 200 2.84 20 240 3.19 30 85% 500 3.25 50
Phoenix, Nevada 100% 19,000 0.64 390 285,600 0.57 5,270 304,600 0.58 5,660 73% 399,000 0.58 7,430
Twin Creeks, Nevada 100% 5,300 3.75 640 30,400 1.76 1,720 35,700 2.05 2,360 73% 52,900 2.00 3,400
Long Canyon(3) 100% 0 0 14,200 2.22 1,010 14,200 2.22 1,010 78% - -
Turquoise Ridge, Nevada(2) 25% 1,400 18.44 820 1,600 17.12 870 3,000 17.73 1,690 92% 4,700 13.07 1,940
Nevada In-Process(5) 100% 20,300 0.60 390 - - 20,300 0.60 390 61% 23,200 0.61 450
Nevada Stockpiles(6) 100% 62,400 2.01 4,030 3,100 0.95 90 65,500 1.96 4,120 73% 65,500 1.86 3,920
Total Nevada 189,040 2.42 14,740 522,400 0.97 16,260 711,440 1.35 31,000 77% 851,300 1.28 35,070
  La Herradura, Mexico   44%   55,300   0.70   1,240   43,900   0.67   940   99,200   0.68   2,180   74%     143,400   0.57   2,610
TOTAL NORTH AMERICA       244,340   2.03   15,980   566,300   0.95   17,200   810,640   1.27   33,180   77%     994,700   1.18   37,680
South America
Conga, Peru(7) 51.35% - - 275,200 0.73 6,460 275,200 0.73 6,460 75% 275,200 0.73 6,460
Yanacocha Open Pits 51.35% 19,600 1.60 1,010 66,300 0.60 1,280 85,900 0.83 2,290 73% 87,500 0.84 2,360
Yanacocha In-Process(5) 51.35% 8,300 0.70 190 - - 8,300 0.70 190 72% 7,800 0.88 220
Yanacocha Stockpiles(6) 51.35% 8,000 1.86 480 - - 8,000 1.86 480 64% 7,600 1.86 460
Total Yanacocha, Peru 51.35% 35,900 1.45 1,680 66,300 0.60 1,280 102,200 0.90 2,960 71% 102,900 0.92 3,040
La Zanja, Peru(8) 46.94% 1,100 0.70 20 6,800 0.70 150 7,900 0.70 170 66% 11,400 0.61 230
  Merian, Suriname(9)   80%   -       -   86,600   1.22   3,390   86,600   1.22   3,390   93%     72,400   1.22   2,850
TOTAL SOUTH AMERICA       37,000   1.43   1,700   434,900   0.81   11,280   471,900   0.86   12,980   79% </