PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 18, 1995)
4,651,163 SHARES
NEWMONT MINING CORPORATION
COMMON STOCK
($1.60 PAR VALUE)
The Common Stock is listed on the New York Stock Exchange under the trading
symbol "NEM." On January 11, 1996, the last reported sale price of the Common
Stock as reported on the New York Stock Exchange Composite Tape was $53.75 per
share.
The shares of Common Stock offered hereby (the "Shares") will be purchased
from the Company by Salomon Brothers Inc (the "Underwriter") at a price of
$51.87 per Share (resulting in $241,255,825 aggregate net proceeds (before
expenses) to the Company). The Company will pay certain expenses of the
offering estimated at approximately $300,000.
The Shares may be offered by the Underwriter from time to time in one or more
transactions (which may involve block transactions) on the New York Stock
Exchange or on other national securities exchanges on which the Common Stock
is traded, in the over-the-counter market, through negotiated transactions or
otherwise at market prices prevailing at the time of the sale or at prices
otherwise negotiated, subject to prior sale, when, as and if delivered to and
accepted by the Underwriter. See "Underwriting."
SEE "RISK FACTORS" BEGINNING ON PAGE S-3 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS IN THE COMMON STOCK.
The Company has agreed to indemnify the Underwriter against certain
liabilities under the Securities Act of 1933, as amended. See "Underwriting."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Shares are offered subject to receipt and acceptance by the Underwriter,
to prior sale and to the Underwriter's right to reject any order in whole or
in part and to withdraw, cancel or modify the offer without notice. It is
expected that delivery of the Shares will be made at the offices of Salomon
Brothers Inc, Seven World Trade Center, New York, New York or through the
facilities of The Depository Trust Company, on or about January 18, 1996.
Salomon Brothers Inc
The date of this Prospectus Supplement is January 11, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY, AND THE COMMON STOCK OF NEWMONT GOLD COMPANY, A SUBSIDIARY OF
THE COMPANY, AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, THE
PARIS BOURSE OR THE BASEL, GENEVA OR ZURICH STOCK EXCHANGES, OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
RISK FACTORS
Prospective purchasers of Shares offered hereby should carefully read
this Prospectus Supplement, the accompanying Prospectus and the documents
incorporated by reference therein. In determining whether to purchase the
Shares being offered hereby, prospective investors should carefully consider
the following factors, in addition to the other information contained in this
Prospectus Supplement or contained in the accompanying Prospectus or
incorporated by reference therein.
GOLD PRICE VOLATILITY
The Company's sole asset is a controlling equity interest in Newmont Gold
Company ("Newmont Gold"), a worldwide company engaged in gold production,
exploration for gold and acquisition of gold properties. The profitability of
the Company's current operations is significantly affected by changes in the
market price of gold. Market gold prices can fluctuate widely and are
affected by numerous factors beyond the Company's control, including
industrial and jewelry demand, expectations with respect to the rate of
inflation, the strength of the U.S. dollar (the currency in which the price of
gold is generally quoted) and of other currencies, interest rates, central
bank sales, forward sales by producers, global or regional political or
economic events, and production and cost levels in major gold-producing
regions such as South Africa. In addition, the price of gold sometimes is
subject to rapid short-term changes because of speculative activities. The
current demand for and supply of gold affect gold prices, but not necessarily
in the same manner as current supply and demand affect the prices of other
commodities. The supply of gold consists of a combination of new mine
production and existing stocks of bullion and fabricated gold held by
governments, public and private financial institutions, industrial
organizations and private individuals. As the amounts produced in any single
year constitute a very small portion of the total potential supply of gold,
normal variations in current production do not necessarily have a significant
impact on the supply of gold or on its price. If the Company's revenue from
gold sales falls for a substantial period below its cost of production at any
or all of its operations, the Company could determine that it is not
economically feasible to continue commercial production at any or all of its
operations or to continue the development of some or all of its projects. The
Company's consolidated weighted average cash cost of equity production (which
is equivalent to the weighted average costs applicable to sales per ounce of
equity production) for its Nevada, Peruvian and Uzbekistan operations was $204
per ounce of gold sold in 1994, $198 in 1993 and $198 in 1992 and $211 for the
first nine months of 1995.
The gold market generally is characterized by volatile prices. The
volatility of gold prices is illustrated in the following table of annual
high, low and average afternoon fixing prices of gold per ounce on the London
Bullion Market:
<TABLE>
<CAPTION>
Year High Low Average
<PAGE>
<S> <C> <C> <C>
1986 . . . . . . . . . . . . . . . . $438 $326 $368
1987 . . . . . . . . . . . . . . . . 500 390 446
1988 . . . . . . . . . . . . . . . . 484 395 437
1989 . . . . . . . . . . . . . . . . 416 356 381
1990 . . . . . . . . . . . . . . . . 424 346 383
1991 . . . . . . . . . . . . . . . . 403 344 362
1992 . . . . . . . . . . . . . . . . 360 330 344
1993 . . . . . . . . . . . . . . . . 406 326 360
1994 . . . . . . . . . . . . . . . . 395 378 384
1995 . . . . . . . . . . . . . . . . 396 372 384
1996 (through January 11) . . . . . . 400 389 395
____________________
Source of Data: Metals Week
</TABLE>
On January 11, 1996, the afternoon fixing price for gold on the London
Bullion Market was $399 per ounce and the spot market price of gold on the New
York Commodity Exchange was $399.
ORE RESERVE ESTIMATES
The proven and probable ore reserve figures presented in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994, which is
incorporated by reference in the Prospectus accompanying this Prospectus
Supplement, are estimates, and no assurance can be given that the indicated
level of recovery of gold will be realized. Reserve estimates may require
revision based on actual production experience. Market price fluctuations of
gold, as well as increased production costs or reduced recovery rates, may
render proven and probable ore reserves containing relatively lower grades of
mineralization uneconomic to exploit and may ultimately result in a
restatement of the Company's proven and probable ore reserves.
The gold price used in estimating Newmont Gold's proven and probable ore
reserves as of December 31, 1994 was $400 per ounce. Newmont Gold believes
that if its Carlin reserve estimates were to be based on gold prices as low as
$300 per ounce with current operating costs, 1994 year-end reserves would
decrease by approximately 17%.
REGULATION AND ENVIRONMENTAL MATTERS
The Company's domestic and foreign mining operations and exploration
activities are subject to extensive laws and regulations governing
prospecting, developing, production, exports, taxes, labor standards,
occupational health, waste disposal, protection and remediation of the
environment, protection of endangered and protected species, mine safety,
toxic substances and other matters. Mining is subject to potential risks and
liabilities associated with pollution of the environment and the disposal of
waste products occurring as a result of mineral exploration and production.
The Company has been and may in the future be also subject to clean-up
liability under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 and comparable state laws which establish clean-up
liability for the release of hazardous substances. In the context of
environmental permitting, including the approval of reclamation plans, the
Company must comply with standards, existing laws and regulations which may
entail greater or lesser costs and delays depending on the nature of the
activity to be permitted and how stringently the regulations are implemented
by the permitting authority. It is possible that the costs and delays
associated with the compliance with such laws, regulations and permits could
become such that the Company would not proceed with the development of a
project or the operation or further development of a mine.
<PAGE>
During the past three years, the U.S. Congress considered a number of
proposed amendments to the General Mining Law of 1872, as amended (the
"General Mining Law"), which governs mining claims and related activities on
federal lands. In 1992, a holding fee of $100 per claim was imposed upon
unpatented mining claims located on federal lands. In October 1994, a one-
year moratorium on the processing of new patent applications was approved.
While such moratorium currently remains in effect, its future is unclear. In
addition, a variety of legislation is now pending before the U.S. Congress to
amend further the General Mining Law. The proposed legislation would, among
other things, change the current patenting procedures, impose royalties, and
enact new reclamation, environmental controls and restoration requirements.
The royalty proposals range from a 2% royalty on "net profits" from mining
claims to an 8% royalty on modified gross income/net smelter returns.
Although the extent of any such changes is not presently known, approximately
92% of Newmont Gold's proven and probable ore reserves in the U.S. are located
on private land and, therefore, are not subject to such amendments.
Amendments to current laws and regulations governing operations and
activities of mining companies or more stringent implementation thereof are
actively considered from time to time and could have a material adverse impact
on the Company.
RISKS OF FOREIGN INVESTMENTS
Certain of the Company's projects are located in foreign countries. The
Company's foreign investments, which include projects in the Republic of
Uzbekistan, Peru and Indonesia, are subject to the risks normally associated
with conducting business in foreign countries, including labor disputes and
uncertain political and economic environments, as well as risks of war and
civil disturbances or other risks which may limit or disrupt the projects,
restrict the movement of funds or result in the deprivation of contract rights
or the taking of property by nationalization or expropriation without fair
compensation laws or policies of particular countries, foreign taxation,
limitations on ownership and on repatriation of earnings, and foreign exchange
controls and currency fluctuations. Although the Company has not experienced
any significant problem in foreign countries arising from such risks, there
can be no assurance that such problems will not arise in the future. While
political risk insurance from the Overseas Private Investment Corporation
and/or the Multilateral Investment Guarantee Agency has been obtained to cover
a portion of the Company's investments in Peru and the Republic of Uzbekistan
against certain expropriation, war, civil unrest and political violence risks,
such insurance is limited by its terms to the particular risks specified
therein and is subject to certain exclusions. There can therefore be no
assurance that claims would be paid under such insurance in connection with a
particular event in a foreign country. Foreign investments may also be
adversely affected by laws and policies of the U.S. affecting foreign trade,
investment and taxation.
SPECULATIVE NATURE OF GOLD EXPLORATION AND DEVELOPMENT
Gold exploration is highly speculative in nature, involves many risks and
frequently is nonproductive. There can be no assurance that the Company's
gold exploration efforts will be successful. Once gold mineralization is
discovered, it may take a number of years from the initial phases of drilling
until production is possible, during which time the economic feasibility of
production may change. Substantial expenditures are required to establish
proven and probable ore reserves through drilling, to determine metallurgical
processes to extract the metals from the ore and, in the case of new
properties, to construct mining and processing facilities. As a result of
these uncertainties, no assurance can be given that the Company's exploration
programs will result in the expansion or replacement of current production
with new proven and probable ore reserves.
<PAGE>
Development projects have no operating history upon which to base
estimates of future cash operating costs. Particularly for development
projects, estimates of proven and probable ore reserves and cash operating
costs are, to a large extent, based upon the interpretation of geologic data
obtained from drill holes and other sampling techniques, and feasibility
studies which derive estimates of cash operating costs based upon anticipated
tonnage and grades of ore to be mined and processed, the configuration of the
ore body, expected recovery rates of the gold from the ore, comparable
facility and equipment operating costs, anticipated climatic conditions and
other factors. As a result, it is possible that actual cash operating costs
and economic returns may differ significantly from those currently estimated.
It is not unusual in new mining operations to experience unexpected problems
during the start-up phase.
MINING RISKS AND INSURANCE
The business of gold mining is generally subject to a number of risks and
hazards, including environmental hazards, industrial accidents, labor
disputes, encountering unusual or unexpected geologic formations, cave-ins,
flooding, rock falls, periodic interruptions due to inclement or hazardous
weather conditions, gold bullion losses and other acts of God. Such risks
could result in damage to, or destruction of, mineral properties or producing
facilities, personal injury or death, environmental damage, delays in mining,
monetary losses and possible legal liability. The Company maintains insurance
against risks which are typical in the operation of its business and in
amounts which the Company believes to be reasonable, but no assurance can be
given that such insurance will continue to be available, will be available at
economically acceptable premiums or will be adequate to cover any resulting
liability.
USE OF PROCEEDS
The $241.3 million net proceeds to the Company from the sale of the Shares
to the Underwriter pursuant to the agreement described under "Underwriting"
will be used by the Company to purchase an equal number of shares of common
stock of Newmont Gold, which in turn will use such proceeds for its capital
program and general corporate purposes.
THE COMPANY
GENERAL
The Company is a U.S. company whose sole asset is a controlling equity
interest in Newmont Gold. Newmont Gold is a worldwide company engaged in gold
production, exploration for gold and acquisition of gold properties. The
Company owns 90% of the common stock and options to purchase additional shares
of common stock of Newmont Gold.
Newmont Gold currently produces gold from the Carlin Trend in Nevada.
Newmont Gold also produces gold through a 38% owned venture in Peru, which
commenced operations in August 1993, and a 50% owned venture in Uzbekistan,
which commenced gold production in September 1995. Newmont Gold additionally
has two projects in Indonesia, Minahasa and Batu Hijau, both of which are 80%
owned by Newmont Gold. Gold production is scheduled to commence at the
Minahasa project by mid-1996. The Batu Hijau project is currently in the
feasibility stage. The mineral rights for the Batu Hijau project are held
pursuant to a Contract of Work between the Republic of Indonesia and P.T.
Newmont Nusa Tenggara ("PTNNT"), which is 80% owned by Newmont Gold. During
the third quarter of 1995 PTNNT recognized that, given the size, complexity
and nature of this large porphyry copper/gold project and the cost of
developing the project, it would require more time to complete feasibility
studies beyond the December 1, 1995 date provided for in the Contract of Work.
Accordingly, in October 1995, PTNNT requested from the government of Indonesia
<PAGE>
an extension of the feasibility studies period. In late December 1995, PTNNT
was advised by the Indonesian government that it needed more time to review
PTNNT's request for an extension and that the time period provided for
feasibility studies in the Contract of Work was suspended pending the
Indonesian government's decision. Meanwhile, feasibility study activities
continue on the project.
In addition to exploration activities conducted in connection with the
above-referenced operations and projects, Newmont Gold continues to explore
for gold and/or is conducting joint venture discussions in various countries,
including Mexico, Canada, Ecuador, Laos and in the United States. Newmont
Gold had approximately 26.1 million equity ounces of proven and probable gold
ore reserves at December 31, 1994 and produced approximately 1.7 million
equity ounces of gold in 1994.
In December 1994, the Company concluded that the geological model used by
the previous owner of the Grassy Mountain property in Oregon was inadequate to
support mine development. Pending completion of additional evaluations,
996,000 ounces of previously classified proven and probable reserves were then
no longer classified as reserves as of December 31, 1994. After evaluating
the deposit during 1995 to determine its economic potential, the Company
concluded that the deposit does not meet its criteria for development and
announced on January 5, 1996 that it is writing off in the fourth quarter of
1995 its $33.8 million investment in this property, which is expected to
reduce earnings per share by approximately $0.23 per share after taxes.
The Company redeemed on December 14, 1995 the shares of its $5.50
Convertible Preferred Stock, par value $5.00 per share, that had not been
previously converted into Common Stock.
Since the Company's only asset is a controlling equity interest in Newmont
Gold, the rights of the Company to participate in any distribution of assets
of Newmont Gold upon its liquidation or reorganization or otherwise (and thus
the ability of holders of the shares of Common Stock to benefit from such
distribution) are subject to prior claims of creditors of Newmont Gold, except
to the extent that the Company may itself be a creditor with recognized claims
against Newmont Gold. Claims on Newmont Gold by creditors may include claims
of holders of indebtedness and claims of creditors in the ordinary course of
business. Such claims may increase or decrease, and additional claims may be
incurred in the future.
The Company was incorporated in 1921 under the laws of Delaware and
maintains its principal executive offices at 1700 Lincoln Street, Denver,
Colorado 80203 (telephone: (303) 863-7414).
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell, and the Underwriter has agreed to
purchase from the Company, 4,651,163 Shares. Under the terms and conditions
of the Underwriting Agreement, the Underwriter is committed to take and pay
for all of the Shares, if any are taken.
It is expected that all or a substantial portion of the Shares may be sold
by the Underwriter to purchasers in one or more transactions (which may
involve block transactions) on the New York Stock Exchange or on other
securities exchanges on which the Common Stock is traded or otherwise. The
distribution of the Shares may also be effected from time to time in special
offerings, exchange distributions and/or secondary distributions pursuant to
and in accordance with the rules of the New York Stock Exchange or such other
exchanges, in the over-the-counter market, in negotiated transactions through
the writing of options on the Shares (whether such options are listed on an
options exchange or otherwise) or otherwise, or in a combination of such
<PAGE>
methods at prevailing market prices or at negotiated prices. The Underwriter
may effect such transactions by selling Shares to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the Underwriter and/or the purchasers of such Shares for whom
they may act as agents or to whom they may sell as principal.
In connection with the sale of the Shares, the Underwriter will receive
compensation in the form of commissions or discounts and will also receive
compensation from purchasers of the Shares for whom it may act as agent or to
whom it may sell as principal in the form of commissions, in each case in
amounts which will not exceed those customary in the types of transactions
involved. Underwriters and dealers that participate in the distribution of
the Shares may be deemed to be underwriters, and any discounts received by
them from the Company and any compensation received by them on the resale of
the Shares by them may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended (the "Act").
The Company has agreed that it will not, for a period of 90 days after the
date hereof, without the prior written consent of the Underwriter, offer, sell
or contract to sell, or otherwise dispose of directly or indirectly, shares of
Common Stock or any securities convertible into, or exchangeable for, shares
of Common Stock (other than the Common Stock offered hereby or pursuant to
existing stock option or other incentive or benefit plans of the Company,
arrangements made to persons becoming an employee of the Company, pursuant to
the Company's junior preferred share rights or in connection with corporate
acquisitions).
The Underwriting Agreement provides that the Company will indemnify the
Underwriter against certain liabilities, including liabilities under the Act,
or contribute to payments that the Underwriter may be required to make in
respect thereof.
Salomon Brothers Inc has performed various investment banking services for
the Company and Newmont Gold in the ordinary course of business for which it
has received customary compensation.
4,651,163 SHARES
NEWMONT MINING CORPORATION
COMMON STOCK
($1.60 PAR VALUE)
SALOMON BROTHERS INC
Prospectus Supplement
Dated January 11, 1996
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained in or
incorporated by reference in this Prospectus Supplement or the Prospectus in
connection with the offer contained in this Prospectus Supplement and
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company, Salomon Brothers Inc
or any dealer. Neither the delivery of this Prospectus Supplement or the
Prospectus nor any sale made hereunder shall, under any circumstances, create
an implication that there has been no change in the facts set forth in this
Prospectus Supplement and Prospectus, or in the affairs of the Company since
the date hereof. This Prospectus Supplement and the Prospectus do not
<PAGE>
constitute an offer or solicitation by anyone in any jurisdiction in which
such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to anyone to whom it
is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
PROSPECTUS SUPPLEMENT
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-6
Underwriting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-7
PROSPECTUS
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
3
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Description of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Description of Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Description of Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Description of Convertible Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Description of Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Federal Tax Considerations as a Real Property Holding Corporation . . . . . . . . . . . . . . . . . . . . . . . . 28
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Validity of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
<PAGE>
