Gold: Do they Pan Out?

Newmont Gold Company

The Company

NGC produces gold from the Carlin Trend in Nevada. It also produces gold through a 51.35% owned company in Peru which commenced gold production in August 1993 and a 50% owned venture in Uzbekistan which commenced gold production in September 1995. NGC additionally has an 80% interest in an Indonesian company which commenced gold production in March 1996 and an 80% interest in a second Indonesian company that holds an interest in a large copper/gold project which is currently in the pre-construction stage. NGC also has a 44% interest in a project in Mexico which is undergoing development and is scheduled to commence production in 1998. In addition to exploration activities conducted in connection with these operations and projects, NGC continues to explore for gold and/or is conducting joint venture activities in other parts of these countries as well as Canada, Ecuador and certain countries in the Caribbean and Asia. NGC had 37.1 million equity ounces of proven and probable gold reserves at December 31, 1996 and 28.8 million equity ounces of proven and probable gold reserves at December 31, 1995.

Latest Financials

Newmont Gold Company and Newmont Mining Corporation earned 86 cents per share in 1996 compared with 81 cents before an asset sale and write-offs in 1995. Equity gold production increased 23 percent to a record 2.28 million ounces from 1.86 million equity ounces a year earlier. During 1996, Newmont Gold earned $94.0 million and Newmont Mining, whose sole asset is its 91 percent ownership of Newmont Gold, earned $85.1 million. In 1995, Newmont Gold had net income of $124.9 million ($1.17 per share) including an after-tax gain of $72 million (74 cents per share) from the sale of the company's interest in Southern Peru Copper Corporation and after-tax charges of $37.1 million (38 cents per share) from the write-off and reclamation provision of two exploration properties. Newmont Mining's net income in 1995 totaled $112.7 million. Higher production and a $5 increase in the average realized gold price to $390 per ounce contributed to a 21 percent increase in gold sales to $768.5 million in 1996.

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