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07.05.2004 Business & Finance

Newmont's first quarter results go up

By GNA

Accra, May 7, GNA- Newmont Mining Corporation, the world's second largest gold miner on Friday said its first quarter operating results reflected higher margins and strong cash flows.

Newmont's 2004 first quarter results hit 133.8 million dollars at 0.30 cents per share but compares lower to the 2003 figure of 151.8 million dollars at 0.38 cents per share.

It included a number of items that generated net gains, primarily related to the acquisition and integration of Franco-Nevada and Normandy Mining in America.

According to a document made available to the Ghana News Agency (GNA), the performance demonstrated the Company's advantage to higher gold prices.

The dip is much felt in the first quarter net income applicable to common shares, which stood at 86.7 million dollars at 0.20 cents per share, compared with net income of 117.3 million dollars at 0.29 cents per share for the first quarter of 2003.

"Net income for the first quarter of 2004 was impacted by a 47.1 million dollars at 0.10 cents after tax," the Company added. The document said during the first quarter, Newmont had equity gold sales of 1.81 million ounces at a total cash cost of 231 dollars per equity ounce.

"A combination of higher gold prices and solid operating performance resulted in net cash provided by operating activities of 328.2 million ounces for the quarter, an increase of 141 per cent from the year ago quarter."

Mr Wayne W. Murdy, Chairman and Chief Executive of the company stressed that Newmont focus on controlling costs, particularly in Nevada, "but we also recognized that higher gold prices bring opportunities to mine additional lower-grade, higher cost ounces that are value-accretive to Newmont shareholders."

He said Newmont, for the first quarter of this year sold 1,812,600 equity ounces of gold, 2 per cent higher than the figures for the previous year. The average realized price was 413 per ounce, an 18 per cent increase over the previous year's quarter.

The Company generated net cash from operating activities of 328.2 million dollars in the first quarter, after net working capital increases of 47.6 million dollars, which is significantly higher than the 136.0 million dollars generated in the first quarter of 2003.

At Ahafo in Ghana, Newmont's engineering, procurement and construction management contract has been awarded while long lead-time equipment tenders are being released.

The initial construction contract for site access and camp infrastructure had been awarded and the contractors were mobilizing to the site.

Newmont's Communications Directors in Accra told the GNA that the Project was on schedule and meetings with stakeholders concerning crop compensation and land acquisition were ongoing and initial gold production was fixed for 2006.

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