Newmont’s move results in $8.8 million loss

The decision by Newmont Mining Corp. (NYSE) to move its head office from New York to Denver in 1989 generated an $8.8 million loss for the third quarter, compared to a $21.4 million profit a year earlier. Nine month earnings totaled $125 million compared to $336.9 million in the first three quarters of 1987.

The company established a $22.1 million pre-tax reserve for the relocation to Denver which also involves the consolidation of Newmont functions and personnel from offices in Tucson, Ariz., and Danbury, Conn., to Denver. A number of prominent mining companies have moved to Denver in recent years because of its central location and low rental costs.

It’s 90%-owned subsidiary, Newmont Gold (NYSE) continued to be a strong performer, posting a third quarter profit of $27.2 million versus a net of $23 million a year earlier. For the first nine months, net income was $70.9 million compared to $62 million the year before.

The expansion program at Newmont Gold’s Carlin operations in Nevada sharply increased treatment capacity for conventional and heap leach ores during the latest quarter. As a result, third quarter sales were a record 251,300 oz, up from the previous record of 194,500 oz the quarter before. Nine month sales amounted to 585,800 oz, a 34% rise from 1987.

There were a number of highlights during the quarter including the commissioning of the No 3 mill at the Rain mine. The mill turned over for the first time in July, a month ahead of schedule, and within a week it was operating at design capacity of 2,100 tons per day. The new one million ton per annum leach system at Rain was commissioned in September.

Meanwhile at the Gold Quarry mine, the first phase of mill No 5 went into operation in September. One of its circuits has been linked with the No 2 mill which effectively increased the capacity of the latter from 9,000 to 12,000 tons per day. Construction work on the balance of the No 5 mill should be completed in December, the company notes. The combined capacity for the two mills will then be 25,000 tons per day, more than double the previous capacity in this area.

Newmont Gold is treating ore from five of its 16 deposits along the Carlin trend. In 1988, the company expects to be the largest gold producer in North America with sales of 830,000 oz gold.