Newmont Mining Corp. / NEM (NYSE)

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    Newmont Mining sees temporary decline in equity gold sales


    By Michael Baron
    Last Update: 8:24 AM ET Sep 27, 2006


    NEW YORK (MarketWatch) -- Newmont Mining Corp.(NEM) Wednesday said it expects equity gold sales to temporarily decline before increasing once development projects in Nevada, Ghana and Australia reach full production rates in 2008 and 2009. Denver-based Newmont now expects equity gold sales of 5.6 million to 5.8 million ounces for 2006 and of 5.2 million to 5.6 million ounces for 2007. The company cited lost sales from the Zarafshan-Newmont joint venture and lower than expected production from the Yanacocha project in Peru for the decline. Newmont also said it expects costs related to sales for 2007 to rise between 20% and 25% from its anticipated 2006 level of between $290 and $310 per ounce. The company also said it expects to generate pre-tax gains of about $295 million from the sale of its Black Gold heavy oil property in Canada and the Martabe project in Indonesia. It expects the gains to be partially offset by a $94 million non-cash write-off of the Zarafshan-Newmont joint venture due to the Uzbek government's expropriation of the company's assets. The company also agreed to acquire a 40% interest in Shore Gold Inc.'s Fort a la Corne joint venture, located in Saskatchewan, Canada, for $153 million.

    Newmont Mining (NEM) was among the few losers Wednesday, with its stock down 2% to close at $43.14. Newmont Wednesday said it expects equity gold sales to temporarily decline before increasing once development projects in Nevada, Ghana and Australia reach full production rates in 2008 and 2009. Denver-based Newmont now expects equity gold sales of 5.6 million to 5.8 million ounces for 2006 and of 5.2 million to 5.6 million ounces for 2007.

    Newmont Mining sees temporary decline in equity gold sales (8:24 AM ET) NEW YORK (MarketWatch) -- Newmont Mining Corp. (NEM) Wednesday said it expects equity gold sales to temporarily decline before increasing once development projects in Nevada, Ghana and Australia reach full production rates in 2008 and 2009. Denver-based Newmont now expects equity gold sales of 5.6 million to 5.8 million ounces for 2006 and of 5.2 million to 5.6 million ounces for 2007. The company cited lost sales from the Zarafshan-Newmont joint venture and lower than expected production from the Yanacocha project in Peru for the decline. Newmont also said it expects costs related to sales for 2007 to rise between 20% and 25% from its anticipated 2006 level of between $290 and $310 per ounce. The company also said it expects to generate pre-tax gains of about $295 million from the sale of its Black Gold heavy oil property in Canada and the Martabe project in Indonesia. It expects the gains to be partially offset by a $94 million non-cash write-off of the Zarafshan-Newmont joint venture due to the Uzbek government's expropriation of the company's assets. The company also agreed to acquire a 40% interest in Shore Gold Inc.'s Fort a la Corne joint venture, located in Saskatchewan, Canada, for $153 million.

    Newmont Mining cuts gold sales view through 2007


    Last Update: 8:18 PM ET Sep 27, 2006


    DENVER (AP) -- Newmont Mining Corp. (NEM), coping with electricity shortages in Ghana and a tax dispute in Uzbekistan, on Wednesday cut its gold sales forecast through 2007 while pledging production would increase at newer mines beginning in 2008.
    Newmont Chief Executive Wayne Murdy said the world's largest gold producer is in a transition period as older mines mature and new projects in Nevada, Australia and Ghana are not yet at full production.
    "It's important to note that we didn't have to change our cost guidance for this year. I think we're getting a handle on that," Murdy said at the Denver Gold Forum.
    Newmont estimated equity gold sales between 5.6 million ounces and 5.8 million ounces in 2006, down from an earlier estimate of 5.9 million ounces to 6.2 million ounces. Newmont forecast equity gold sales between 5.2 million ounces and 5.6 million ounces for 2007.
    Costs applicable to sales are expected to be 20 percent to 25 percent higher next year because of costs related to operations at the Yanacocha mine in Peru.
    The revised forecast was blamed on a dispute with the Uzbekistan government over its joint venture, lower production at a Ghana mine caused by electricity shortages and the expected sale of a Canadian mine.
    Newmont said it expects gold sales to increase in 2008 and 2009 after its operations in Nevada, Ghana and Australia reach full production.
    Newmont's stock closed down 87 cents, or 2 percent, to $43.14 a share on the New York Stock Exchange. In the past year, it has traded between $42.08 a share and $62.72 a share.
    Murdy said gold prices, like oil and other commodity prices, have retreated from highs posted at the beginning of the year.
    "We've got to just put our head down, do what we can control and our stock price will take care of itself," he said. "Traditionally, we do much better toward the end of the year than this time of year so we'll see if we can duplicate that this year."
    Argus Research Corp. analyst Bill Selesky expects intermittent changes in guidance to continue as Newmont's mines mature, and speculated investors are adopting a wait-and-see attitude. "A lot of investors are skeptical as to what the company says as far as guidance," he said.
    Newmont, like other global mining companies, will have to concentrate on containing costs in the months ahead, everything from fuel to electricity, he said.
    In Uzbekistan, Newmont has said government authorities were trying to seize part of its Zarafshan-Newmont joint venture.
    The company says the government has frozen its bank accounts and blocked shipments from its mine. A government-run newspaper has said a court declared Newmont's joint venture bankrupt over $48 million in back taxes.
    Murdy said the dispute will be handled through international arbitration.
    The company also said it will generate pretax gains of about $295 million in the third quarter related to the sale of an oil property in Canada and the divestiture of a project in Indonesia. The gain will be partially offset by $94 million in costs related to the Uzbekistan venture.
    The gold forum, held at a downtown hotel, was sponsored by the Denver Gold Group, a not-for-profit organization of companies that deal mostly in precious metals mining.

    Newmont Mining outlook tarnished on Wall Street
    Analysts cut price targets after Newmont lowers gold output for second time


    SAN FRANCISCO (MarketWatch) -- At least three investment banks lowered their outlooks for Newmont Mining Corp. Thursday, a day after the world's largest gold producer revealed that bullion sales would miss previous forecasts for the second time this year.
    Citigroup analyst John Hill cut his forecast for Newmont Mining's (NEM) 2006 to 2008 earnings and lowered his price target on the stock to $62 from $70 after what Hill termed "a depressingly familiar script" of reduced guidance.
    BMO Capital Markets also cut earnings estimates and its target price to $57.50 from $62. And GMP Securities notched down its price target to $66 from $75.
    Shares in Newmont rose 0.3% in midday trading to $43.29 after losing 2% Wednesday.
    Newmont said Wednesday that it expects equity gold sales of 5.6 million and 5.8 million ounces this year, lower than its July outlook of 5.9 million to 6.2 million ounces and still further from the 6.26 million outlook given in February.
    Newmont blamed lower production in Ghana caused by national power shortages, the expected sale of its Holloway mine in Canada and lost sales from its Zarafshan-Newmont Joint Venture in Uzbekistan for the latest revision.
    The government of that Central Asian country has expropriated the mining venture's assets, an action that Newmont is fighting through international arbitration.
    The Denver-based company also said it expects gold sales to decline in 2007, to 5.2 million to 5.6 million ounces, mostly because of the Uzbeki losses and lower production from its Yanacocha mine in Peru. The South American mine suspended operations last month because of local protests but has since reopened it.
    Newmont held its cost guidance for 2006 but said costs applicable to sales should rise 20% to 25% next year.
    Lower output at Yanacocha and higher energy and commodity prices should bring its gold sales to a low point and costs to a peak in 2007, said the company.
    "Beyond 2007, we expect to return to a growth profile with improving costs as we benefit from the ramp-up of our new mines," said Newmont Chief Executive Wayne Murdy in a statement.
    In the third quarter, Newmont expects to make $295 million from selling its Black Gold heavy oil property in Canada and its Martabe mining project in Indonesia. Those gains will offset a $94 million write-off of the Uzbeki joint venture.
    Also on Wednesday, Newmont said it had bought 40% of Shore Gold Inc.'s Fort a la Corne Joint Venture in Saskatchewan, Canada for $153 million, giving it an opportunity to invest in a diamond project.

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    It invests primarily in companies that mine, process, deal in or hold precious metals including gold, silver, platinum and palladium, both in the U.S. and abroad. As of June 30, some of its top holdings include Newmont Mining (NEM), Barrick Gold (ABX) and Gold Fields (GFI).

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    Last Update: 8:31 AM ET Sep 27, 2006


    Sep 27, 2006 (Dow Jones Commodities News via Comtex) -- DOW JONES NEWSWIRES
    Newmont Mining Corp. (NEM) Wednesday said it expects equity gold sales to temporarily decline before increasing once development projects in Nevada, Ghana and Australia reach full production rates in 2008 and 2009.
    Denver-based Newmont now expects equity gold sales of 5.6 million to 5.8 million ounces for 2006 and of 5.2 million to 5.6 million ounces for 2007.
    The company cited lost sales from the Zarafshan-Newmont joint venture and lower than expected production from the Yanacocha project in Peru for the decline.
    Newmont also said it expects costs related to sales for 2007 to rise between 20% and 25% from its anticipated 2006 level of between $290 and $310 per ounce.
    The company also said it expects to generate pretax gains of about $295 million from the sale of its Black Gold heavy oil property in Canada and the Martabe project in Indonesia. It expects the gains to be partially offset by a $94 million noncash write-off of the Zarafshan-Newmont joint venture due to the Uzbek government's expropriation of the company's assets.
    Newmont also agreed to acquire a 40% interest in Shore Gold Inc.'s Fort a la Corne joint venture, located in Saskatchewan, Canada, for $153 million.

    Last Update: 10:20 AM ET Sep 27, 2006


    LONDON, Sep 27, 2006 (Dow Jones Commodities News via Comtex) -- TOP STORIES: Newmont Mining Sees Equity Gold Sales Falling Temporarily
    Newmont Mining Corp. (NEM) Wednesday said it expects equity gold sales to temporarily decline before increasing once development projects in Nevada, Ghana and Australia reach full production rates in 2008 and 2009.

    Newmont Mining (NEM) said equity gold sales are expected to temporarily decline before increasing after development projects in Nevada, Ghana and Australia achieve full production rates in 2008 and 2009.


    The Denver-based miner expects equity gold sales of between 5.6 million to 5.8 million ounces for 2006. Newmont cited expropriation of its 50% interest in the Zarafshan-Newmont Joint Venture in Uzbekistan, lower production in Ghana caused by nationwide power shortages, and the expected sale of the Holloway mine in Canada.


    Costs applicable to sales for the remainder of 2006, however, are expected to be in line with previous guidance of $290 to $310 per ounce.


    For the year 2007 the company expects equity gold sales between 5.2 million to 5.6 million ounces, primarily as a result of lost sales from the Zarafshan- Newmont joint venture and the previously announced lower expected production from Yanacocha in Peru.


    Due to the pressure of higher costs at Yanacocha, the company estimates costs applicable to sales for the year 2007 to be about 20% to 25% higher than 2006.

    Newmont Mining (NEM) slid 4% after the miner warned of a drop in gold sales next year. The company expects equity gold sales of 5.6 million to 5.8 million ounces for 2006, but predicts that will drop to 5.2 million to 5.6 million ounces in 2007. Newmont said the temporary decline is the result of expropriation of the company's 50% interest in the Zarafshan-Newmont joint venture in Uzbekistan, lower production in Ghana caused by nationwide power shortages, and the expected sale of its Holloway mine in Canada.

    Among the miners, Newmont Mining (NEM) announced that its gold sales will dip to between 5.2 million and 5.6 million ounces in 2007, down from a forecasted 5.6 million to 5.8 million in 2006. The company cites the expropriation of its 50% stake in the Zarafshan-Newmont joint venture in Uzbekistan.

    Newmont Mining Cuts Gold Sales View Through 2007


    Last Update: 6:35 PM ET Sep 27, 2006


    DENVER, Sep 27, 2006 (Dow Jones Commodities News via Comtex) -- Newmont Mining Corp. (NEM), coping with electricity shortages in Ghana and a tax dispute in Uzbekistan, on Wednesday cut its gold sales forecast through 2007 while pledging production would increase at newer mines beginning in 2008.
    Newmont Chief Executive Wayne Murdy said the world's largest gold producer is in a transition period as older mines mature and new projects in Nevada, Australia and Ghana are not yet at full production.
    "It's important to note that we didn't have to change our cost guidance for this year. I think we're getting a handle on that," Murdy said at the Denver Gold Forum.
    Newmont estimated equity gold sales between 5.6 million ounces and 5.8 million ounces in 2006, down from an earlier estimate of 5.9 million ounces to 6.2 million ounces. Newmont forecast equity gold sales between 5.2 million ounces and 5.6 million ounces for 2007.
    Costs applicable to sales are expected to be 20 percent to 25 percent higher next year because of costs related to operations at the Yanacocha mine in Peru.
    The revised forecast was blamed on a dispute with the Uzbekistan government over its joint venture, lower production at a Ghana mine caused by electricity shortages and the expected sale of a Canadian mine.
    Newmont said it expects gold sales to increase in 2008 and 2009 after its operations in Nevada, Ghana and Australia reach full production.
    Newmont's stock closed down 87 cents, or 2 percent, to $43.14 a share on the New York Stock Exchange. In the past year, it has traded between $42.08 a share and $62.72 a share.
    Murdy said gold prices, like oil and other commodity prices, have retreated from highs posted at the beginning of the year.


    "We've got to just put our head down, do what we can control and our stock price will take care of itself," he said. "Traditionally, we do much better toward the end of the year than this time of year so we'll see if we can duplicate that this year."
    Argus Research Corp. analyst Bill Selesky expects intermittent changes in guidance to continue as Newmont's mines mature, and speculated investors are adopting a wait-and-see attitude. "A lot of investors are skeptical as to what the company says as far as guidance," he said.
    Newmont, like other global mining companies, will have to concentrate on containing costs in the months ahead, everything from fuel to electricity, he said.
    In Uzbekistan, Newmont has said government authorities were trying to seize part of its Zarafshan-Newmont joint venture.
    The company says the government has frozen its bank accounts and blocked shipments from its mine. A government-run newspaper has said a court declared Newmont's joint venture bankrupt over $48 million in back taxes.
    Murdy said the dispute will be handled through international arbitration.
    The company also said it will generate pretax gains of about $295 million in the third quarter related to the sale of an oil property in Canada and the divestiture of a project in Indonesia. The gain will be partially offset by $94 million in costs related to the Uzbekistan venture.
    The gold forum, held at a downtown hotel, was sponsored by the Denver Gold Group, a not-for-profit organization of companies that deal mostly in precious metals mining.

    Newmont Shares Slip on Sales Shortfall
    The mining outfit warned of lower gold sales stemming from problems in Uzbekistan and Ghana


    Newmont Mining (NEM) shares fell nearly 4% on Sept. 27, after the Denver-based company warned of lower gold sales.


    Newmont expects to have equity gold sales -- those produced in its own mines -- of between 5.6 and 5.8 million ounces for 2006. The company had said in July that it would have between 5.9 and 6.2 million ounces, according to press reports.


    The company blamed its shortfall on government expropriation of its 50% interest in the Zarafshan-Newmont joint venture in Uzbekistan. Newmont plans to keep fighting the expropriation through international arbitration, but anticipates taking a $94 million, non-cash write-off of the venture. The company also noted nationwide power shortages that dented its production in Ghana, among other things.


    Newmont's stock price sank 3.8% to $42.34 per share in early afternoon trading on the New York Stock Exchange.


    Newmont expects gold sales in 2007 of between 5.2 and 5.6 million ounces. The company has suffered development delays amid power shortages at its Akyem project in Ghana. At Yanacocha in Peru, production will be lower than expected and costs are rising.


    "With the higher commodity and energy prices impacting the industry, and lower gold production at Yanacocha, we expect gold sales to reach a low point and costs to peak in 2007," said Chairman and Chief Executive Officer Wayne Murdy in a press release.


    But he sees better times ahead. He thinks gold sales will increase after development projects in Nevada, Ghana and Australia achieve full production rates in 2008 and 2009. But Murdy didn't pin a target number on the prospective boost in the recent press release.

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