LITERATURE REVIEW — Newmont sets new production record at Carlin operations

Gold production during 1996 reached 2.3 million oz., setting a new record for Newmont Gold (NGC-N) and parent Newmont Mining (NEM-N).

Newmont Gold earned US$94 million last year while Newmont Mining, whose sole asset is its 91% ownership of Newmont Gold, earned US$85.1 million.

Newmont Gold expects to produce 2.7 million oz. from its worldwide operations this year, while, at the same time, reducing its total cash costs by about 10%. Much of the improvement is expected to occur later this year as higher-grade ore is mined from the Post pit in Nevada’s Carlin trend.

Newmont’s Carlin operations produced a record 1.7 million oz. in 1996, compared with 1.6 million oz. in 1995. Total cash costs increased to US$243 from US$233 per oz.

As expected, 1996 was a transitional year at Carlin. Ore from open pits decreased, while underground mining and refractory ore processing increased.

As the year progressed, higher production rates and improved ore grades began to offset the increased costs associated with mining and processing refractory material.

Underground production at Carlin nearly tripled last year to 306,800 oz. At the same time, production from milling operations grew 14% to 1.1 million oz., with the roaster contributing 540,000 oz. (52% more than in 1995). Leach production fell to 566,900 oz. from 647,100 oz. in the prior year. And Newmont’s patented refractory leach demonstration project produced 27,820 oz.

— a dramatic increase over the 5,200 oz. produced in 1995.

Farther afield, in Peru, the Yanacocha gold mine turned out 811,400 oz. last year, of which 308,300 oz. were attributable

to Newmont. This is almost twice the production rate in 1995, when 552,000 oz. were produced (209,800 oz. attributable to Newmont). Total cash costs in 1996 were an impressive US$107 per oz.

The Zarafshan-Newmont joint venture in Uzbekistan turned out 326,000 oz. in 1996 — its first full year of operation — at a cash cost of US$219 per oz.

Newmont’s share of production was 163,200 oz.

In Indonesia, the new Minahasa gold mine produced 112,700 oz. during its first three quarters of production. Total cash costs were US$224 per oz.

On the exploration front, Newmont spent US$57.5 million (about the same as in 1995) at various properties around the world. The company has two advanced projects in the pipeline: the Batu Hijau gold-copper property in Indonesia, and La Herradura in Mexico.

La Herradura, a 44%-owned joint venture with Penoles, is expected to produce 140,000 oz. (62,000 equity ounces) gold annually over its 8-year mine life.

Construction of a US$1.9-billion mine at Batu Hijau is expected to start once permits are in hand. Production could begin in 1999.