Newmont reported highest net profit in 90 years

Newmont Mining CEO Richard O'Brien said Thursday that the company "generated the highest revenue, net income and operating cash flow in our 90-year history" last year, thanks to rising metals prices converging "with our emphasis on operational execution."

During a conference call with analysts, Newmont Executive Vice President of Discovery and Development, Guy Lansdown said the company is particularly encouraged by over 8 million new gold ounces in reserves and 33 million new pounds of copper.

"As a large senior gold producer, we are thrilled to be in a position to boost our reserves on a net basis and primarily through the drill bit," he remarked.

On Thursday Newmont reported attributable gold reserves of 93.5 million ounces and record attributable copper reserves of 9.4 billion pounds.

In 2010 Newmont reported attributable gold production of 5.4 million ounces and attributable copper production of 327 million pounds, a 44% increase over copper production in 2009. Gold production increased last year due to the first full year of production at Boddington and a full year of mining higher grade ore at Batu Hijau.

However, gold production in Nevada dropped 13% last year due to the completion of underground mining at Deep Post, lower Gold Quarry ore mined due to a pit wall failure, and lower leach tons placed at Twin Creeks and Carlin.

Brian Hill, Newmont's executive vice president of operations, told analysts "Our Africa region had a terrific year" due to 540,000 ounces of gold production. He forecast this year's African production to range from 550,000 to 590,000 ounces, primarily due to higher expected ore grades.

Newmont says this year's total attributable gold production is expected to range from 5.1 million to 5.3 million ounces with attributable copper production of 190 million to 220 million pounds.

FINANCIALS

The company reported that adjusted net income rose 39% to a record $1.9 billion or $3.85 per share in 2010, compared to $1.4 billion or $2.79/sh in 2009. Net income increased 76% to $2.3 billion or $4.63 per share in 2010, compared to $1.3 billion or $2.26/sh in 2009.

Adjusted net income for the fourth-quarter 2010 was reported at $574 million or $1.16 per share, up slightly from $561 million or $1.14 per share reported during the same quarter of 2009. Net income for the fourth-quarter 2010 was reported at $812 million or $1.65 per share, up from $588 million or $1.14/sh reported during the fourth-quarter 2009.

Meanwhile, Newmont has budgeted for $2.1 billion to $2.5 billion in capital expenditures this year, up from $1.4 billion in 2010. Approximately 40% of the capex is expected to be related to major project initiates including further development of Akyem in Ghana, the Conga Project in Peru, Hope Bay in Canada, and the Nevada project portfolio.

In a statement, O'Brien said, "We continue to advance our Conga Project in Peru, which contains over 6 million attributable ounces of gold and 1.6 billion attributable pounds of copper reserves. Similarly, we continue to advance with our Akyem Project in Ghana, which contains over 7 million attributable ounces of gold reserves."

"Advancing these two world-class mining projects, as well as continuing our drilling programs at Hope Bay in Canada, remain some of our top priorities in 2011," he added.

Newmont also has budgeted $335 million to $345 million for exploration programs in 2011.

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