Filed by Newmont Mining Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Battle Mountain Gold Company
Commission File No. 1-9666
FOR IMMEDIATE RELEASE
[Graphic - Newmont News Release Letterhead]
NEWMONT MINING CORPORATION, 1700 LINCOLN STREET, DENVER, COLORADO 80203
Media Contact: Doug Hock Investor Relations: Wendy Yang
303-837-5812 303-837-6141
OPERATING CASH FLOW INCREASES 14% IN FIRST HALF
DENVER, July 28, 2000 - Continued cost reductions and increased gold
production enabled Newmont Mining Corporation to generate $190.1 million, or
$1.13 per share, in operating cash flow during the first six months of 2000, a
14 percent increase from $166.1 million, or 99 cents per share, in the first
half of 1999. Equity gold production rose 13 percent to 2.2 million equity
ounces from 1.9 million ounces over the same period. Total cash costs for the
first six months declined to $173 per equity ounce from $182 in the year ago
period, while total production costs were reduced to $230 from $238 an ounce.
Reviewing results for the six month period, Ronald C. Cambre, Newmont's
chairman and chief executive officer, said, "Net income from operations of $21.4
million, or 12 cents per share, increased from $16.6 million, or 10 cents per
share, in the 1999 period. However, a $15.4 million equity loss at Batu Hijau
and $15.7 million in non-cash hedge-related charges in the 2000 first half,
resulted in a net loss of $9.7 million, or 6 cents per share." For the like
period last year, Newmont earned $17 million, or 5 cents per share, including an
$8 million equity loss at Batu Hijau and an $8.4 million gain on the sale of
property.
Looking forward, Cambre said, "With a ramp up in production at Yanacocha
and Nevada in the second half of the year, Batu Hijau progressing well and
excellent results from our exploration program, we are pleased to announce that
our forecasts for 2000 are:
o Record gold production of 4.8 million ounces, 15% higher than for
1999, at a total cash cost of $173 per ounce;
o Cash flow from operating activities of more than $500 million, or
$3 per share, 25% higher than in 1999;
o Debt reduction of $60 million to $70 million from year-end 1999; and
o Replacement of reserves depleted by mining.
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<PAGE>
2
"These forecasts are premised on the current gold price and do not reflect
the pending merger with Battle Mountain Gold Company. While we do not believe
today's gold price reflects continued high demand for the metal, we have aligned
the Company to generate strong cash flow with an improving balance sheet in this
environment. Additionally, we remain positioned to deliver superior shareholder
returns as the gold price recovers."
The merger transaction with Battle Mountain is on schedule for the Fall,
subject to approval by the Battle Mountain shareholders and the satisfaction of
other customary conditions, including governmental approvals. Yesterday Newmont
was informed that the transaction has received early termination of the
Hart-Scott-Rodino waiting period. The preliminary proxy statement for the
required special meetings of Battle Mountain shareholders was filed with the
U.S. Securities and Exchange Commission on July 21, 2000. Cambre added, "Both
companies are working diligently to ensure a smooth transition so that our
shareholders can benefit from the substantial synergies involved."
In the second half of 2000, the Company expects strong growth in
production from mining of high grade ore at the Deep Post open pit mine in
Nevada and expansion at Yanacocha. For the full year, Nevada is expected to
contribute approximately 2.9 million ounces of gold at total cash costs below
$208 an ounce. Yanacocha is expected to contribute approximately one million
equity ounces at a total cash cost of less than $90 an ounce.
First half sales of $713.9 million were up 11 percent from $642.9 million
a year earlier, with an average realized gold price of $285 an ounce, $2 lower
than the 1999 first half. North American production rose to 1.4 million ounces
at a total cash cost of $211 per ounce from 1.3 million ounces at $208 per ounce
in the 1999 first half. Higher throughput, grade and recovery rates at the
Nevada autoclaves and roaster more than offset a decline in production from
oxide ores.
Total overseas production was 788,500 equity ounces at a total cash cost
per ounce of $107, higher than 619,200 equity ounces and lower than total cash
cost of $128 per ounce for the 1999 period. For the first six months of 2000,
production at Yanacocha totaled 840,900 ounces (431,800 equity ounces) at a
total cash cost of $88 compared to 702,400 ounces (360,700 equity ounces) at
$113 in the 1999 half. Production at Zarafshan-Newmont in Uzbekistan was 121,000
equity ounces at a total cash cost of $122 per ounce compared to similar ounces
at a total cash cost of $177 per ounce in the 1999 period. At Minahasa in
Indonesia, production was 172,900 equity ounces at a total cash cost of $144 per
ounce in the 2000 first half versus 136,700 ounces at $127 for the year ago
period.
Batu Hijau in Sumbawa, Indonesia, which began operating late last year,
produced 227.0 million pounds of copper (127.7 million equity pounds) and
111,700 ounces of gold (62,800 equity ounces) during the first six months of
2000 at a total cash cost of 62 cents per pound, net of gold byproduct credits.
The average realized copper price per pound was 80 cents. For the second half of
2000, Batu Hijau is projected to produce approximately 170 million equity pounds
of copper and 115,000 equity ounces of gold at a total cash cost of 55 cents per
pound of copper.
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3
Newmont's earnings in 2000 are impacted by non-cash accounting charges
related to hedge transactions. During the first six months, a charge of $8.5
million was recorded to amortize expiring put option contracts. An additional
unrealized loss of $7.2 million was recorded to mark-to-market the change in
valuation of outstanding call option contracts to reflect both the change in
price and the volatility in the spot gold market since year-end 1999.
In the first half of 2000, Newmont made investments of $136.7 million for
capital expenditures and $91.8 million to complete its equity funding in Batu
Hijau; all of the investment in Batu Hijau was in the first quarter. At the end
of the six months, Newmont had long-term debt of $1.07 billion, including the
current portion of long-term debt, and cash and equivalents of $52.2 million.
SECOND QUARTER
Net income from operations in the second quarter of 2000 of $2.6 million,
or 2 cents per share, was more than offset by a $7.3 million equity loss, or 4
cents per share, at Batu Hijau and non-cash, hedge-related accounting charges of
$11.6 million, or 8 cents per share. The net loss for the quarter was $16.3
million, or 10 cents per share. In the second quarter of 1999, Newmont earned
$7.1 million, or 4 cents per share, including $3.6 million, or 2 cents per
share, from operations, a $4.9 million start-up loss at Batu Hijau and an
after-tax gain of $8.4 million from the sale of an exploration property.
Operating cash flow for the quarter was $103.2 million, or 61 cents per
share, compared to $110.9 million, or 66 cents per share, in the 1999 quarter.
Sales for the quarter were $355.4 million, 13 percent higher than the $315.8
million in the year ago quarter. Production increased 14 percent to 1.1 million
ounces of gold. Total cash costs in the quarter declined 7 percent to $171 per
ounce as continuous improvements achieved through the Company's Gold Medal
Performance program offset higher fuel and electric power costs worldwide.
North American production for the second quarter was 717,300 ounces, a 13
percent increase from 634,200 ounces for the 1999 quarter and a 10 percent
increase from 650,400 ounces for the first quarter of 2000. Total cash costs
averaged $203 an ounce for the 2000 quarter, an improvement from $211 an ounce
for the second quarter of 1999.
At Newmont's overseas operations, gold production for the second quarter
of 2000 totaled 371,000 equity ounces compared to 318,100 ounces in the 1999
quarter. Gold production at Yanacocha was 407,400 ounces (209,200 equity ounces)
compared to 363,700 ounces (186,700 equity ounces) in the 1999 quarter. Total
cash costs at Yanacocha were $87 per ounce, a 22 percent drop from $111 per
ounce in the 1999 quarter. Following an accidental mercury spill by a transport
contractor late in the second quarter of 2000, a comprehensive health and
environmental remediation program was initiated by Compania Minera Yanacocha,
51.35 percent owned by Newmont.
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4
At Zarafshan-Newmont in Uzbekistan, lower grade resulted in production of
115,400 ounces (57,700 equity ounces) at a total cash cost of $127 per ounce,
versus 133,800 ounces (66,900 equity ounces) at a total cash cost of $172 for
the 1999 quarter. At Minahasa in Indonesia, production totaled 73,300 equity
ounces at a total cash cost of $178 per ounce compared to 64,500 equity ounces
at $124 per ounce. Cash costs, more so than production, were impacted by a
week-long shutdown of operations during the quarter.
As Batu Hijau continues its ramp up to a steady state of production, tons
mined increased 35 percent to 41.7 million and mill throughput rose 18 percent
to 11.1 million tons from the first to the second quarter. In this second full
quarter of operation since start up, Batu Hijau produced 119.4 million pounds of
copper (67.2 million equity pounds), and 54,700 ounces of gold (30,800 equity
ounces), representing an 11 percent increase in copper and 4 percent decrease in
gold production compared to the first quarter of 2000. The project completion
tests covering mining, processing and environmental aspects of the Batu Hijau
operation are expected to be completed early in the fourth quarter of 2000.
FOR SUPPLEMENTAL INFORMATION RELATING TO THIS PRESS RELEASE
REFER TO NEWMONT'S WEB PAGE AT WWW.NEWMONT.COM UNDER INVESTOR RELATIONS.
---------------
This press release contains "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and
are intended to be covered by the safe harbor created thereby. Such
forward-looking statements include, without limitation, (i) estimates of future
earnings, (ii) estimates of future gold production, (iii) estimates of future
production costs and (iv) estimates of future cash flow. Where the company
expresses an expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to have a
reasonable basis. However, such forward-looking statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. Such risks include, but are not limited to, gold price volatility,
increased production costs and variances in ore grade or recovery rates from
those assumed in mining plans. For a more detailed discussion of such risks and
other factors, see Page 25 of the company's 1999 Annual Report on Form 10-K.
Information regarding the identity of the persons who may, under SEC
rules, be deemed to be participants in the solicitation of stockholders of
Battle Mountain Gold Company in connection with the proposed merger transaction
involving Newmont and Battle Mountain, and their interests in the solicitation,
are set forth in a Schedule 14A filed on June 21, 2000 with the SEC. Newmont and
Battle Mountain will be filing a definitive proxy statement/prospectus and other
relevant documents concerning the proposed merger transaction with the SEC.
Preliminary proxy materials were filed by Battle Mountain with the SEC on July
21, 2000. Investors are urged to read the preliminary proxy materials that are
available now and any other relevant documents (including the definitive proxy
statement/prospectus) that are filed with the SEC because they contain important
information on the proposed merger transaction. Investors are able to obtain the
documents free of charge at the SEC's website (www.sec.gov). In addition,
documents filed with the SEC by Newmont may be obtained free of charge by
contacting Newmont Mining Corporation, 1700 Lincoln Street, Denver, CO 80203,
(303) 863-7414. Documents filed with the SEC by Battle Mountain will be
available free of charge by contacting Battle Mountain Gold Company, 333 Clay
Street, 42nd Floor, Houston, Texas 77002, (713) 650-6400. Investors should read
the definitive proxy statement/prospectus carefully when it becomes available
before making any voting or investment decision.
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<PAGE>
NEWMONT MINING CORPORATION AND SUBSIDIARIES
FINANCIAL AND OPERATING HIGHLIGHTS
(In millions, except per share and ounces)
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2000 1999 2000 1999
------- ------ ------ -------
Revenues $358.2 $333.0 $719.4 $663.2
Components of net income:
Net income from operations $ 2.6 $3.6 $21.4 $16.6
Batu Hijau start-up loss (7.3) (4.9) (15.4) (8.0)
------- ------ ------ -------
$(4.7) $(1.3) $ 6.0 $ 8.6
Noncash mark-to-market loss on
call options, net of tax (7.3) - (7.2) -
Noncash amortization of put option
contracts, net of tax (4.3) - (8.5) -
------- ------ ------ -------
Net income (loss) before noncash
charges, net of tax (16.3) (1.3) (9.7) 8.6
Other items:
Gain on sale of assets and
investments, net of tax - 8.4 - 8.4
------- ------ ------ -------
Net income (loss) $ (16.3) $ 7.1 $ (9.7) $ 17.0
======= ====== ====== =======
Per share:
Net income from operations $ 0.02 $ 0.02 $ 0.12 $ 0.10
Batu Hijau start-up loss (0.04) (0.03) (0.09) (0.05)
------- ------ ------ -------
$ (0.02) $(0.01) $ 0.03 $ 0.05
Noncash mark-to-market loss on
call options, net of tax (0.05) - (0.04) -
Noncash amortization of put option
contracts, net of tax (0.03) - (0.05) -
------- ------ ------ -------
Net income (loss) before noncash
charges, net of tax $ (0.10) $ (0.01) $(0.06) $ 0.05
Other items:
Gain on sale of assets and
investments, net of tax - 0.05 - 0.05
------- ------ ------ -------
Net income (loss) $ (0.10) $ 0.04 $(0.06) $ 0.10
======= ====== ====== =======
Total gold production included in
financial statements (000 ozs.) 1,255.7 1,129.2 2,502.6 2,250.3
Equity gold production (000 ozs.) 1,088.3 952.3 2,156.3 1,908.6
Total cash cost per equity ounce $ 171 $ 183 $ 173 $ 182
Total production cost per equity
ounce $ 229 $ 240 $ 230 $ 238
Average realized price per equity
ounce $ 283 $ 281 $ 285 $ 287
Average spot price realized
per ounce $ 284 $ 275 $ 286 $ 281
Equity copper production (in
millions of pounds) 67.2 - 127.7 -
Equity copper sales (in millions of
pounds) 59.0 - 120.9 -
Cash cost per equity pound $ 0.60 - $ 0.62 -
Average realized copper price per
pound $ 0.81 - $ 0.80 -
<PAGE>
NEWMONT MINING CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS
(In millions, except per share)
(Unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2000 1999 2000 1999
------- ------ ------ --------
Sales and other income
Sales $355.4 $315.8 $713.9 $642.9
Dividends, interest and other 2.8 17.2 5.5 20.3
------- ------ ------ -------
358.2 333.0 719.4 663.2
------- ------ ------ -------
Costs and expenses
Costs applicable to sales 206.7 198.1 412.1 394.5
Depreciation, depletion and
amortization 68.0 61.2 129.9 120.0
Exploration and research 17.2 14.4 30.8 25.9
General and administrative 12.9 12.6 24.9 25.2
Interest, net of capitalized
interest 19.7 17.1 40.6 35.5
Other 3.4 2.6 4.6 4.3
------- ------ ------ -------
327.9 306.0 642.9 605.4
------- ------ ------ -------
Operating income 30.3 27.0 76.5 57.8
Unrealized mark-to-market loss on
call options (11.3) - (11.1) -
------- ------ ------ -------
Pre-tax income before minority 19.0 27.0 65.4 57.8
interest and equity loss
Income tax provision (4.4) (2.1) (10.9) (7.7)
Minority interest in income of (23.6) (12.9) (48.8) (25.1)
Minera Yanacocha
Equity loss of affiliate (7.3) (4.9) (15.4) (8.0)
------- ------ ------ -------
Net income (loss) $(16.3) $ 7.1 $ (9.7) $ 17.0
======= ====== ====== =======
Net income (loss) per common share,
basic and diluted $(0.10) $ 0.04 $(0.06) $ 0.10
======= ====== ====== =======
Basic weighted average shares
outstanding 167.9 167.4 167.8 167.4
Diluted weighted average shares
outstanding 168.8 167.6 168.4 167.5
Cash dividends declared per common
share $ 0.03 $ 0.03 $ 0.06 $ 0.06
Net income (loss) $(16.3) $ 7.1 $ (9.7) $ 17.0
Unrealized gain (loss) on
investment securities - (0.3) - 5.3
------- ------ ------ -------
Comprehensive income (loss) $(16.3) $ 6.8 $ (9.7) $ 22.3
======= ====== ====== =======
<PAGE>
NEWMONT MINING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
December
June 30, 31,
2000 1999
---------------- ----------
ASSETS
Cash and cash equivalents $ 52.2 $ 55.3
Other current assets 502.3 478.8
---------------- ----------
Current assets 554.5 534.1
Other assets, primarily property,
plant and equipment 2,861.5 2,849.3
---------------- ----------
Total assets $3,416.0 $3,383.4
================ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 215.0 $ 250.6
Current portion of long-term debt 23.7 23.3
Long-term debt 1,045.6 1,014.2
Deferred revenue from sale of
future production 137.2 137.2
Fair value of written call options 93.5 82.4
Other liabilities 315.4 297.7
Minority interest in Minera
Yanacocha 145.9 126.4
Stockholders' equity 1,439.7 1,451.6
---------------- ----------
Total liabilities and
stockholders' equity $3,416.0 $3,383.4
================ ==========
CONSOLIDATED CASH FLOW INFORMATION
For Six Months Ended
June 30,
-----------------------------
2000 1999
---------------- ----------
OPERATING ACTIVITIES
Net income (loss) $ (9.7) $ 17.0
Adjustments to reconcile net
income (loss) to net cash
provided by operating activities 210.1 124.7
---------------- ----------
200.4 141.7
Change in working capital (10.3) 24.4
---------------- ----------
Net cash provided by operating 190.1 166.1
activities ---------------- ----------
INVESTING ACTIVITIES
Additions to property, plant and
mine development (136.7) (77.3)
Investments in affiliates and Other (79.7) (60.6)
---------------- ----------
Net cash used in investing (216.4) (137.9)
activities ---------------- ----------
FINANCING ACTIVITIES
Net borrowings (repayments) 31.7 (14.8)
Dividends paid (10.1) (10.0)
Other 1.6 (0.6)
---------------- ----------
Net cash provided by (used in)
financing activities 23.2 (25.4)
---------------- ----------
Net change in cash and cash
equivalents (3.1) 2.8
Cash and cash equivalents at
beginning of period 55.3 79.1
---------------- ----------
Cash and cash equivalents at end of
period $ 52.2 $ 81.9
================ ==========
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN OPERATING STATISTICS
FOR THE THREE MONTHS ENDED JUNE 30, 2000
MINE PRODUCTION
(Dry Short Tons 000)
2000 1999
--------- ----------------------------- --------- ----------------------------
Average Mill Leach Average Mill Leach
Grade* Ore Ore Waste Total Grade* Ore Ore Waste Total
-------- ------ ------- ------- ------- -------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NEVADA
Open-Pit Mines
Carlin Trend:
Carlin South 524 1,297 4,274 6,095 1,034 3,737 2,970 7,741
Carlin North-Post 219 15 1,850 2,084 0 0 266 266
Carlin North-Genesis Complex 12 663 2,312 2,987 401 201 1,103 1,705
Carlin North-Other 98 1,825 4,746 6,669 363 1,711 6,857 8,931
Twin Creeks 1,149 2,745 20,316 24,210 832 1,181 23,317 25,330
Lone Tree Complex 568 1,397 7,095 9,060 457 615 8,726 9,798
----- ------ ------ ------ ----- ------ ------ ------
Total Open Pit 0.062 2,570 7,942 40,593 51,105 0.056 3,087 7,445 43,239 53,771
------------------------------ -----------------------------
Nevada Underground
Carlin Trend:
Carlin North 193 0 0 193 165 0 0 165
Carlin Rain 11 20 0 31 13 6 0 19
Rosebud 34 0 0 34 72 0 0 72
----- ------ ------ ------ ----- ------ ------ ------
Total Underground 0.682 238 20 0 258 0.708 250 6 0 256
----- ------ ------ ------ ----- ------ ------ -------
TOTAL NEVADA 0.077 2,808 7,962 40,593 51,363 0.064 3,337 7,451 43,239 54,027
----- ------ ------ ------ ----- ------ ------ -------
CALIFORNIA
Mesquite 0.015 0 3,704 2,303 6,007 0.016 0 3,447 2,236 5,683
----- ------ ------ ------ ----- ------ ------ -------
MEXICO
La Herradura 0.021 0 839 2,551 3,390 0.023 0 638 2,027 2,665
----- ------ ------ ------ ----- ------ ------ -------
TOTAL NORTH AMERICAN MINED 0.055 2,808 12,505 45,447 60,760 0.051 3,337 11,536 47,502 62,375
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
MILL AND LEACH PRODUCTION
2000 1999
--------------------------------------- ---------------------------------------
Ounces Ounces
Dry Tons Average Recovery Produced Dry Tons Average Recovery Produced
(000's) Grade* Rate(%) (000's) (000's) Grade* Rate(%) (000's)
---------- ------- -------- --------- ---------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NEVADA
NEVADA
Oxide Mills
Carlin Trend:
Mill No. 4 0 0.000 0.0 0.0 406 0.107 77.7 33.4
Mill No. 5 915 0.089 65.6 58.8 999 0.097 67.0 70.0
Twin Creeks 361 0.143 91.8 39.5 295 0.184 91.0 35.1
Lone Tree Complex 15 0.255 92.0 3.5 0 N/A N/A 0.0
-------- ------- -------- -------
Total Oxide Mills 1,291 0.106 76.2 101.8 1,700 0.115 76.0 138.5
-------- ------- -------- -------
Refractory Mills:
Carlin Roaster 718 0.265 89.1 175.3 721 0.207 90.1 139.5
Twin Creeks Autoclaves 793 0.259 91.2 182.7 799 0.191 84.7 121.3
Lone Tree Complex 682 0.157 85.8 47.9 533 0.091 89.6 19.3
-------- ------- -------- -------
Total Refractory Mills 2,193 0.229 89.3 405.9 2,053 0.171 87.6 280.1
-------- ------- -------- -------
Total Nevada Mills 3,484 0.183 86.5 507.7 3,753 0.145 83.5 418.6
-------- ------- -------- -------
Leach Production:
Carlin-Oxide 2,719 0.031 N/A 65.1 4,711 0.029 N/A 95.7
Carlin-Refractory 0 0.000 N/A 0.1 0 0.000 N/A 0.8
Twin Creeks-Oxide 2,745 0.039 N/A 65.2 1,179 0.031 N/A 38.0
Lone Tree-Oxide 1,436 0.043 N/A 34.2 1,046 0.043 N/A 32.3
-------- ------- -------- -------
Total Nevada Leach 6,900 0.037 164.6 6,936 0.031 166.8
-------- ------- -------- -------
TOTAL NEVADA PRODUCTION 10,384 0.086 672.3 10,689 0.071 585.4
-------- ------- -------- -------
CALIFORNIA
Mesquite-Leach 3,704 0.015 N/A 31.5 3,447 0.016 N/A 39.9
-------- ------- -------- -------
MEXICO
La Herradura-Leach 839 0.021 N/A 13.5 638 0.023 N/A 8.9
-------- ------- -------- -------
TOTAL NORTH AMERICAN PRODUCTION 14,927 0.065 717.3 14,774 0.056 634.2
======== ======= ======== ========
* Ounce per ton
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OVERSEAS OPERATING STATISTICS
FOR THE THREE MONTHS ENDED JUNE 30, 2000
MINE PRODUCTION
(Dry Short Tons 000)
2000 1999
----------------------------------------------- ------------------------------------------------
Average Mill Leach Average Mill Leach
Grade* Ore Ore Waste Total Grade* Ore Ore Waste Total
-------- ------- ------- ----- -------- -------- ------ ------- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BATU HIJAU -copper 0.640 14,576 - 27,140 41,716 0.587 3,953 0 19,252 23,205
-gold 0.007 0.005
MINAHASA -mill 0.275 70 1,475 1,545 0.222 292 0 2,019 2,311
-leach 0.092 407 407
YANACOCHA
Carachugo 0.029 N/A 8,255 4,797 13,052 0.035 N/A 3,378 5,233 8,611
Maqui Maqui 0.029 N/A 1,353 762 2,115 0.043 N/A 4,105 2,264 6,369
San Jose 0.027 N/A 5,185 2,508 7,693 0.040 N/A 5,201 3,926 9,127
Yanacocha 0.031 N/A 5,365 2,082 7,447 0.029 N/A 2,012 1,438 3,450
------- ------- -------- ------- ------- -------
Total Yanacocha Mined 0.029 20,158 10,149 30,307 0.038 14,696 12,861 27,557
------- ------- ------- -------- ----- ------- ------- -------
TOTAL OVERSEAS MINED 0.023 14,646 20,565 38,764 73,975 0.042 4,245 14,696 34,132 53,073
======= ======= ====== ======= ===== ======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
MILL AND LEACH GOLD PRODUCTION
2000 1999
------------------------------------------------ -------------------------------------------------
Ounces Equity Ounces Equity
Dry Tons Average Recovery Produced Ounces Dry Tons Average Recovery Produced Ounces
(000's) Grade* Rate(%) (000's) (000's) (000's) Grade* Rate(%) (000's) (000's)
-------- --------- -------- -------- ------- --------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mill (sales) 11,093 0.008 68.2 54.7 30.8 N/A N/A N/A N/A N/A
MINAHASA
Mill 174 0.328 93.1 56.0 56.0 186 0.376 91.1 64.5 64.5
Leach 505 0.093 N/A 17.3 17.3 N/A N/A N/A N/A N/A
YANACOCHA
Leach 20,158 0.029 N/A 407.4 209.2 14,696 0.038 N/A 363.7 186.7
ZARAFSHAN-NEWMONT
Leach 3,961 0.045 N/A 115.4 57.7 3,746 0.060 N/A 133.8 66.9
------ ----- ----- ------ ----- -----
TOTAL OVERSEAS PRODUCTION 35,891 0.030 650.8 371.0 18,628 0.046 562.0 318.1
====== ======
TOTAL NORTH AMERICAN PRODUCTION 717.3 717.3 634.2 634.2
------- ------- ------- -----
TOTAL GOLD PRODUCTION 1,368.1 1,088.3 1,196.2 952.3
======= ======= ======= =====
</TABLE>
<TABLE>
<CAPTION>
COPPER PRODUCTION
2000 1999
--------------------------------------------------- -------------------------------------------------
Equity Equity
Dry Tons Average Recovery Pounds Pounds Dry Tons Average Recovery Pounds Pounds
(000's) Grade* Rate(%) (000's) (000's) (000's) Grade Rate(%) (000's) (000's)
--------- -------- --------- -------- ------- -------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TOTAL COPPER PRODUCTION
Batu Hijau - Mill 11,093 0.65 82.8 119,401 67,163 N/A N/A N/A N/A N/A
========= ======== ========= ======== =======
TOTAL COPPER SALES 104,837 58,971 N/A N/A
======== =======
*Ounce per ton except copper, which is a percentage.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRODUCTION COSTS
Utilizing the Gold Institute Reporting Standard
For the Three Months Ended June 30, 2000
Nevada La Minera
Operations Mesquite Herradura Minahasa Yanacocha Zarafshan-Newmont Equity Total
---------- ---------- --------- --------- ---------- ----------------- ------------
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NEVADA
Direct mining and
production costs $198 $222 $206 $130 $147 $187 $174 $101 $86 $108 $124 $170 $170 $184
Capitalized mining cost
adjustments 2 (13) (30) 35 0 0 0 18 0 0 0 0 0 (5)
Other 0 0 2 0 (5) (5) 1 3 (3) (1) 3 2 0 (1)
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ---------------
Cash Operating Costs 200 209 178 165 142 182 175 122 83 107 127 172 170 178
Royalties 3 4 15 0 0 0 3 2 4 4 0 0 0 4
Production Taxes 2 1 0 0 0 0 0 0 0 0 0 0 1 1
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ---------------
Total Cash Costs 205 214 193 165 142 182 178 124 87 111 127 172 171 183
Reclamation and
mine closure 3 2 0 0 6 (9) 2 2 3 3 2 1 3 2
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ---------------
Total Costs 208 216 193 165 148 173 180 126 90 114 129 173 174 185
Applicable to Sales
Depreciation, depletion 55 51 87 42 63 51 81 88 47 65 49 42 55 55
and amortization
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ---------------
Total Production $263 $267 $280 $207 $211 $224 $261 $214 $137 $179 $178 $215 $229 $240
Costs
======= ====== ======= ====== ============== ====== ====== ====== ====== ======== ======= ===============
Equity ounces produced 672.3 585.4 31.5 39.9 13.5 8.9 73.3 64.5 209.2 186.7 57.7 66.9 1,057.5 952.3
Average gold price $274 $276 $283 $276 $280 $269 $357 $361 $285 $273 $282 $269 $283 $281
</TABLE>
<TABLE>
<CAPTION>
Newmont-Batu Hijau
(Equity Interest)
Co-Product
-----------------------
By-Product Copper Gold Total
---------- ------- ------ -------
2000 1999
---- ----
<S> <C> <C> <C> <C> <C> <C>
Cost applicable to sales per Revenue $47,817 $47,817 $8,710 $56,527
financial statements $206.7 $198.1
Minority interest in (23.1) (22.1) Cash production costs 44,035 37,250 6,785 44,035
Minera Yanacocha By-product credits (9,181) (398) (72) (470)
------- -------- ------ -------
Reclamation accruals (2.7) (1.7) Total Cash
------ ------- Costs 34,854 36,852 6,713 43,565
Total cash costs for per $180.9 $174.3 Noncash costs 10,906 9,225 1,681 10,906
ounce calculations ------- ------ ------ ------
====== ======= Total Production
Equity ounces produced 1,057.5 952.3 Costs 45,760 46,077 8,394 54,471
====== ====== ===== ======
Equity cash cost per ounce
produced $171 $183
Pounds of copper
sold (000's) 58,970 58,970
Ounces of gold sold
(000's) 30.8 30.8
Reported cash cost
per pound $ 0.60 $ 0.62
Reported noncash
cost per pound 0.18 0.16
-------- -------
Total costs
per pound $ 0.78 $ 0.78
Reported cash cost
per ounce $ 218
Reported noncash
cost per ounce 54
-------
Total costs
per ounce $ 272
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
North American Operating Statistics
For the Six Months Ended June 30, 2000
MINE PRODUCTION
(Dry Short Tons 000)
2000 1999
-------------------------------------------- -----------------------------------------
Average Mill Leach Average Mill Leach
Grade* Ore Ore Waste Total Grade* Ore Ore Waste Total
-------- -------- -------- ------ -------- ------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Nevada
Open-Pit Mines
Carlin Trend
Carlin South 1,516 3,770 7,608 12,894 2,405 6,924 6,258 15,587
Carlin North-Post 343 15 2,327 2,685 0 0 3,592 3,592
Carlin North-Genesis Complex 12 796 5,144 5,952 589 810 2,837 4,236
Carlin North-Other 172 3,623 9,393 13,188 571 3,491 12,521 16,583
Twin Creeks 3,288 6,169 42,618 52,075 1,426 2,648 49,206 53,280
Lone Tree Complex 1,198 2,992 14,616 18,806 839 1,724 17,296 19,859
-------- -------- ------ -------- -------- --------- -------- --------
Total Open Pit 0.062 6,529 17,365 81,706 105,600 0.054 5,830 15,597 91,710 113,137
----------------------------------- ------------------------------------
Nevada Underground
Carlin Trend:
Carlin North 378 0 0 378 314 0 0 314
Carlin Rain 13 45 0 58 14 6 0 20
Rosebud 61 0 0 61 141 0 0 141
-------- -------- ------ -------- -------- --------- -------- --------
Total Underground 0.621 452 45 0 497 0.700 469 6 0 475
-------- -------- ------ -------- -------- --------- -------- --------
TOTAL NEVADA 0.074 6,981 17,410 81,706 106,097 0.064 6,299 15,603 91,710 113,612
-------- -------- ------ -------- -------- --------- -------- --------
California
Mesquite 0.015 0 6,863 5,649 12,512 0.016 0 6,972 5,013 11,985
-------- -------- ------ -------- -------- --------- -------- --------
Mexico
La Herradura 0.022 0 1,536 4,701 6,237 0.023 0 1,134 3,771 4,905
-------- -------- ------ -------- -------- --------- -------- --------
TOTAL NORTH AMERICAN MINED 0.055 6,981 25,809 92,056 124,846 0.052 6,299 23,709 100,494 130,502
======== ======== ====== ======== ======== ========= ======== ========
</TABLE>
<TABLE>
<CAPTION>
MILL AND LEACH PRODUCTION
2000 1999
------------------------------------ -------------------------------------
Ounces Ounces
Dry Tons Average Recovery Produced Dry Tons Average Recovery Produced
(000's) Grade* Rate(%) (000's) (000's) Grade* Rate (%) (000's)
-------- -------- -------- -------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Nevada
Oxide Mills
Carlin Trend:
Mill No. 4 0 0.000 0.0 0.2 617 0.107 76.5 46.6
Mill No. 5 2,014 0.083 68.7 126.8 2,206 0.103 73.1 170.6
Twin Creeks 686 0.141 89.9 74.6 542 0.188 97.8 64.2
Lone Tree Complex 63 0.124 89.0 6.9 0 N/A N/A 0.0
-------- -------- -------- --------
Total Oxide Mills 2,763 0.103 75.5 208.5 3,365 0.117 78.5 281.4
-------- -------- -------- --------
Refractory Mills:
Carlin Roaster 1,405 0.269 88.8 335.9 1,387 0.196 90.6 254.1
Twin Creeks Autoclaves 1,636 0.244 89.6 358.2 1,613 0.200 86.0 291.4
Lone Tree Complex 1,311 0.147 87.2 82.6 984 0.088 87.7 30.1
-------- -------- -------- --------
Total Refractory Mills 4,352 0.224 88.8 776.7 3,984 0.171 88.0 575.6
-------- -------- -------- --------
Total Nevada Mills 7,115 0.177 85.8 985.2 7,349 0.147 84.5 857.0
-------- -------- -------- --------
Leach Production:
Carlin-Oxide 5,789 0.033 N/A 133.4 9,724 0.029 N/A 185.8
Carlin-Refractory 0 0.000 N/A 0.1 0 0.000 N/A 3.7
Twin Creeks-Oxide 6,169 0.037 N/A 105.8 2,646 0.030 N/A 81.4
Lone Tree-Oxide 3,083 0.043 N/A 57.2 2,181 0.036 N/A 64.2
-------- -------- -------- --------
Total Nevada Leach 15,041 0.037 296.5 14,551 0.030 335.1
-------- -------- -------- --------
TOTAL NEVADA PRODUCTION 22,156 0.082 1281.7 21,900 0.069 1,192.1
-------- -------- -------- --------
California
Mesquite-Leach 6,863 0.015 N/A 62.3 6,972 0.016 N/A 81.7
-------- -------- -------- --------
Mexico
La Herradura-Leach 1,536 0.022 N/A 23.8 1,134 0.023 N/A 15.6
-------- -------- -------- --------
TOTAL NORTH AMERICAN PRODUCTION 30,555 0.064 1,367.8 30,006 0.055 1,289.4
======== ======== ======== ========
* Ounce per ton
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Overseas Operating Statistics
For the Six Months Ended June 30, 2000
MINE PRODUCTION
(Dry Short Tons 000)
2000 1999
-------------------------------------------- ---------------------------------------------
Average Mill Leach Average Mill Leach
Grade* Ore Ore Waste Total Grade* Ore Ore Waste Total
--------------- -------- -------- ---------- --------------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Batu Hijau - copper 0.660 28,808 0 43,885 72,693 0.597 5,139 0 31,529 36,668
- gold 0.008 0.005
Minahasa - mill 0.304 87 2,329 2,416 0.254 433 0 4,596 5,029
- leach 0.081 772 772
Yanacocha
Carachugo 0.030 N/A 15,457 8,689 24,146 0.033 N/A 6,543 10,146 16,689
Maqui Maqui 0.028 N/A 2,278 1,887 4,165 0.043 N/A 5,159 3,031 8,190
San Jose 0.031 N/A 9,968 4,940 14,908 0.037 N/A 9,356 6,869 16,225
Yanacocha 0.030 N/A 11,124 3,756 14,880 0.029 N/A 3,048 2,786 5,834
-------- -------- -------- --------- -----------------
Total Yanacocha Mined 0.030 38,827 19,272 58,099 0.036 24,106 22,832 46,938
------- -------- -------- -------- ------- --------- -----------------
TOTAL OVERSEAS MINED 0.021 28,895 39,599 65,486 133,980 0.040 5,572 24,106 58,957 88,635
======= ======== ======== ========== ======= ========= ===================
</TABLE>
<TABLE>
<CAPTION>
MILL AND LEACH GOLD PRODUCTION
2000 1999
-------------------------------------------- ---------------------------------------------
Ounces Equity Ounces Equity
Dry Tons Average Recovery Produced Ounces Dry Tons Average Recovery Produced Ounces
(000's) Grade* Rate (%) (000's) (000's) (000's) Grade* Rate (%) (000's) (000's)
--------------- -------- -------- ---------- --------------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Batu Hijau
Mill (sales) 20,536 0.008 70.5 111.7 62.8 N/A N/A N/A N/A N/A
Minahasa
Mill 359 0.427 93.1 149.2 149.2 358 0.399 92.3 136.7 136.7
Leach 1,003 0.083 N/A 23.7 23.7 N/A N/A N/A N/A N/A
Yanacocha
Leach 38,827 0.030 N/A 840.9 431.8 24,106 0.036 N/A 702.4 360.7
Zarafshan-Newmont
Leach 7,743 0.049 N/A 242.0 121.0 7,402 0.057 N/A 243.6 121.8
------- -------- ---------- -------- -------- ---------
TOTAL OVERSEAS PRODUCTION 68,468 0.029 1,367.5 788.5 31,866 0.045 1,082.7 619.2
======== ========
TOTAL NORTH AMERICAN PRODUCTION 1,367.8 1,367.8 1,289.4 1,289.4
-------- ---------- -------- ---------
TOTAL GOLD PRODUCTION 2,735.3 2,156.3 2,372.1 1,908.6
======== ========== ======== =========
</TABLE>
<TABLE>
<CAPTION>
COPPER PRODUCTION
2000 1999
-------------------------------------------- ---------------------------------------------
Equity Equity
Dry Tons Average Recovery Pounds Pounds Dry Tons Average Recovery Pounds Pounds
(000's) Grade* Rate (%) (000's) (000's) (000's) Grade Rate (%) (000's) (000's)
-------- ------- -------- -------- ---------- -------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total Copper Production
Batu Hijau - Mill 20,536 0.66 84.2 226,996 127,685 N/A N/A N/A N/A N/A
====== ======= ======== ======= =======
Total Copper Sales
214,899 120,881 N/A N/A
======== =======
* Ounce per ton except copper, which is a percentage.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRODUCTION COSTS
Utilizing the Gold Institute Reporting Standard
For the Six Months Ended June 30, 2000
Nevada La Minahasa Minera Zarafshan-
------- --- -------- ------- ----------
Operations Mesquite Herradura Yanacocha Newmont Equity Total
---------- ------- --------- --------- ------- ------------
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Direct mining and $197 $220 $221 $131 $151 $191 $139 $121 $86 $109 $119 $175 $165 $185
production costs
Capitalized mining cost 10 (14) (39) 21 0 0 0 0 0 0 0 0 5 (8)
adjustments
Other 1 1 2 1 (5) (3) 2 3 (2) 0 3 2 0 1
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ------- -----
Cash Operating Costs 208 207 184 153 146 188 141 124 84 109 122 177 170 178
Royalties 3 4 15 0 0 0 3 3 4 4 0 0 2 3
Production Taxes 2 1 0 0 0 0 0 0 0 0 0 0 1 1
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ------- -----
Total Cash Costs 213 212 199 153 146 188 144 127 88 113 122 177 173 182
Reclamation and 3 2 0 0 5 (3) 2 2 3 3 1 1 3 2
mine closure
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ------- -----
Total Costs
Applicable to Sales 216 214 199 153 151 185 146 129 91 116 123 178 176 184
Depreciation, depletion
and amortization 53 51 87 43 60 55 68 84 45 57 47 46 54 54
------- ------ ------- ------ -------------- ------ ------ ------ ------ -------- ------- ------- -----
Total Production $269 $265 $286 $196 $211 $240 $214 $213 $136 $173 $170 $224 $230 $238
Costs
======= ====== ======= ====== ============== ====== ====== ====== ====== ======== ======= ======= =====
Equity ounces produced 1,281.7 1,192.1 62.2 81.7 23.8 15.6 172.9 136.7 431.8 360.7 121.0 121.8 2,093.5 1,908.6
Average gold price $277 $282 $287 $280 $290 $267 $348 $360 $286 $280 $284 $277 $285 $287
</TABLE>
<TABLE>
<CAPTION>
Newmont-Batu Hijau
(Equity Interest)
Co-Product
------------------------
By-Product Copper Gold Total
---------- ------- ------- --------
2000 1999 <C> <C> <C> <C>
---- ----
<S> <C> <C>
Cost applicable to sales per Revenue $ 97,259 $97,259 17,779 115,038
financial statements $412.1 $394.5 Cash
production costs 94,033 79,500 14,533 94,033
Minority interest in (43.9) (45.2)
Minera Yanacocha By-product
credits (18,758) (827) (151) (978)
-------- ------- ------- --------
Total Cash Costs 75,275 78,673 14,382 93,055
Reclamation (5.3) (3.8)
accruals Noncash costs 20,067 16,966 3,101 20,067
------ ------- -------- ------- ------- --------
Total cash costs for per $362.9 $345.5 Total Production
ounce calculations ====== ======= Costs 95,342 95,639 17,483 113,122
======== ======= ======= ========
Equity ounces produced 2,093.5 1,908.6
Equity cash cost per ounce $173 $182 Pounds of copper
sold (000's) 120,881 120,881
Ounces of gold
sold (000's) 62.8 62.9
Reported cash cost
per pound $ 0.62 $ 0.65
Reported noncash
cost per pound 0.17 0.14
-------- -------
Total costs per
pound $ 0.79 $ 0.79
Reported cash cost
per ounce $ 229
Reported noncash
cost per ounce 49
-------
Total costs $ 278
</TABLE>
NEWMONT MINING CORPORATION
SUPPLEMENTAL COMMODITY FINANCIAL INSTRUMENT INFORMATION
Newmont remains one of the least hedged Companies in the gold industry. During
the first half of 2000, deliveries of 62,500 ounces were made under a forward
sales contract at $454 an ounce. This involved production from the Minahasa mine
in Indonesia.
On December 31, 1999, the Company had put options, giving it the right, but not
the obligation, to sell 1.18 million ounces of gold at $270 an ounce. Options on
800,000 ounces expired during the first half of 2000. Non-cash after-tax
amortization of the put option premium of $8.5 million for the first half of
2000 was treated as a deduction from sales.
The following table summarizes the status of Newmont's hedge book as of June 30,
2000.
PUT FORWARD CALL
--------------------------------------------------------------------------------
Total Total Total
Production Notional Price Notional Price Price Notional Price
Year Quantity Floor Quantity Floor Cap Quantity Cap
--------------------------------------------------------------------------------
2000 383,333 $270 62,500 $454 +40%
2004 250,000 $350
2005 161,111* $300 $380 250,000 $350
2006 161,111* $300 $380
2007 161,111* $300 $380
2008 1,000,000 $386
2009 850,000 $385
--------------------------------------------------------------------------------
Grand Total 383,333 $270 545,833 $317 $380 2,350,000 $378
*Associated with these prepaid forward sales is a requirement to
deliver 35,900 ounces per year in 2000-2007. These deliveries,
however, have been offset with simultaneously executed forward
purchase contracts at prices increasing from $263 per ounce in 2000
to $354 per ounce in 2007.
For additional information on the Company's hedging strategy, please see press
releases issued on October 13, 1999 and November 10, 1999 on our website.
# # #
