Newmont nets US$161 million in Q2

Vancouver – Shares of Newmont Mining (NMC-T, NEM-N) slipped almost 5% on July 27th trading despite the gold giant delivering strong earnings of US$161 million (36 per share) in its latest second quarter, up 83% from last year’s corresponding Q2. Latest earnings were slightly off from the US$209 million booked in this year’s Q1, but that figure included a US$48 million positive tax adjustment.

Strong second quarter bullion prices buoyed performance in spite of gold output slipping 6% at 1.87 million ozs. (1.38 million equity ozs.) in the latest quarter, versus 2005-Q2, at costs applicable to sales of US$298 per oz. while realizing an average sale price of US$605 per oz. Rising energy, labour and consumable costs all negatively effected the gold giant’s worldwide operations and offset a significant portion of the metal’s gains.

Dropping ore grades saw second quarter Nevada gold sales slip 10% versus last year while costs applicable to those sales rose 43%. Production from the Lone Tree operation continued to decline as the mine enters wind down phase with closure planned in late-2006. Additionally, processing of ore from the company’s Phoenix mine ramped up during the quarter with full production of 300,000-to-350,000 ozs. per year anticipated by the third quarter. The Leeville underground mine is also progressing through its ramp-up phase and is expected to reach its annual production rate of 400,000-to-450,000 ozs. of gold by the end of 2007.

Gold output from Yanacocha operations in northern Peru rose almost 9% in the latest quarter over the corresponding period of 2005.

Australian and New Zealand gold sales dropped 19% in the latest quarter due to a combination of lower ore grades and throughput at the region’s operations with a 17% increase in operating costs.

Despite a 24% increase in ore mined, copper and gold sales from Batu Hijau in Indonesia slumped 24% in the second quarter of 2006 from 2005 due to a drop in ore grades resulting from mine phase sequencing at the open pit operation.

Newmont’s Zarafshan operation in Uzbekistan experienced an 8% drop in gold sales in Q2 resulting from leach pad flow issues. The joint venture was recently dealt a blow with a government ruling to collect about US$48 million in taxes. The company is appealing the rulings and is examining all possible options to recover its invested capital to date, including the possible sale of the mine.

The Kori Kollo mine in Bolivia saw second quarter gold sales rise almost threefold from last year due to a boost in ore placed on the leach pad and a new pit coming on-stream in late 2005.

With ore processing having commenced in June, commercial output from the company’s Ahafo mine in Ghana has commenced with the initial gold pour in mid-July.

Subsequent to the end of the second quarter, the company also booked US$280 million in the sale of its Black Gold oil sands project in northern Alberta.

Following announcement of its second quarter results, shares of Newmont closed at US$50.53 on New York Stock Exchange trading. The stock has a 52-week price range of US$37.43-to-US$62.60.