Author: Dorothy Kosich
As Newmont Mining CEO Richard O'Brien reported record quarterly revenue of more than $2 billion, record operating cash flow of more than $1 billion and record quarterly net income of $388 million, CFO Russell Ball told analysts the new Boddington mine in Australia only produced 4,000 ounces during the third quarter due to start up delays.
Newmont officials had originally projected that Boddington would deliver 160,000 ounces of gold during the third quarter.
Executive Vice President Brian Hill said, "At the beginning of the quarter we experienced some differential settlement in our primary crusher tunnel, which did impact the start of the project ramp up. Nevertheless, he added, "This issue is now behind us and we are continuing to ramp up the operation and are very pleased with the early results we are seeing from the project."
Meanwhile, Newmont also experienced a geotechnical failure in the Batu Hijau pit on September 18, but was able to process lower grade ore from stock piles. However, the slope wall failure is expected to delay access to ore which was scheduled for mining in 2010 and 2011.
Although Newmont had originally projected 2009 gold production ranging from 5.2 million to 5.5 million ounces, this year's production will probably be closer to 5.2 million ounces, the company advised. Next year Newmont forecasts a 5% to 10% increase in gold production, based on higher production from Boddington and Batu Hijau.
In response to an analyst's question, O'Brien said he ranks Akyem in Ghana and Conga in Peru as the company's top priorities in Newmont's project pipeline. O'Brien said both projects will "provide nice economic returns for the company, even at lower gold prices than what we're seeing today and with that, they continue to broaden districts," as well as generating community support.
Akyem, which has 7.66 million ounces of gold reserves, is scheduled to begin its first production in late 2013 or early 2014. Gold-copper project Conga has 11.8 million ounces of gold and 3.2 billion pounds of copper in its reserves. Project start-up is anticipated in late 2014 or 2015, Newmont Executive Vice President of Discovery and Development, Guy Lansdown told analysts.
FINANCIALS
For the third-quarter 2009, Newmont reported a net income of $388 million or 79-cents per share, more than double the net income of $191 million and 42-cents/sh reported during the third-quarter 2008.
For the first nine months of this year, Newmont reported a net income of $739 million or $1.52/sh, down from $827 million or $1.82/sh.
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