Unveils new global image to reflect Normandy/Franco Acqs
Thu 06 Jun 2002
Published: Thu 06 Jun 2002 11:43:15
Document No: 133401
Document part: A
Market Flag: N
NEWMONT MINING CORPORATION. 2002-06-06 ASX-SIGNAL-G HOMEX - Adelaide +++++++++++++++++++++++++ The world's largest gold producer, Newmont Mining Corporation, (NYSE, ASX: NEM; TSX: NEM) today unveiled a new global corporate image to reflect its expansion through the recent acquisition of Australia's Normandy Mining Limited and Franco-Nevada Mining Corporation Limited. Making the worldwide announcement in Adelaide, Newmont Chairman and Chief Executive Officer Wayne Murdy also outlined the company's strategy and goals for the remainder of 2002. In his first visit to Australia since the acquisitions were completed in February, Mr Murdy also introduced John Dow, who has been appointed Chairman and Managing Director of Newmont Australia (formerly Normandy Mining). Mr Murdy said that with the enduring value of gold once again being recognised in the marketplace, Newmont was on the threshold of a very exciting future. "With the Normandy acquisition, Newmont has added to its trio of core assets with a fourth leg of the stool - Australia," he said. "This new asset mix provides a low political risk profile - over 60 percent of our production and reserves come from AAA-rated countries. The addition of Franco-Nevada strengthens our balance sheet, reducing net debt to book capitalisation from 40 percent to 23 percent. Our objective is to reduce our debt to under 10 percent over the next three years." Mr Murdy said Newmont's non-hedging philosophy gave investors leverage to rising gold prices. "Over time, we will streamline, simplify and reduce the hedge book we inherited from Normandy so that our shareholders can benefit even more from rising gold prices," he said. "Currently, for every $25 increase in the gold price, we generate $160 million in after tax cash flow. With the unwinding of the hedge book, this leverage will increase." ACQUISITION SAVINGS Mr Murdy said Newmont was on track to achieve steady-state synergy savings from the Normandy and Franco-Nevada acquisitions of $70 million to $80 million per year by the end of the fourth quarter. He also outlined several Newmont goals for the remainder of 2002, including: * Equity gold sales of 7.5 million ounces at a total cash cost of approximately $180 per ounce; * Operating cash flow of approximately $750 million at a $300 gold price; * Sales of non-core assets totalling $400 million, of which more than $200 million had already been realised; * Reduction of debt for a net debt-to-total capitalisation ratio of less than 20 per cent by year-end; and * Replacement of reserves net production at year-end. EXPLORATION THRUST Mr Murdy said Newmont has an unrivalled land package in some of the best gold districts in the world. "Our exploration focus will be on major gold districts in Australia, Peru and Nevada, as well as Batu Hijau in Indonesia," he said. "In Australia, we are already pursuing additions to reserves and non-reserve material in the Tanami (Northern Territory) and Yandal (Western Australia) gold districts."