Newmont Batu Hijau copper sales up 17%

Denver-based mining giant Newmont Mining Corporation reported Thursday its equity copper sales from the Batu Hijau mine in West Nusa Tenggara had increased by 17 percent to 106.84 million pounds of copper in the second quarter of this year from the previous year's same quarter at total cash costs of US$0.46 per pound.

Newmont said increased copper sales reflect increased throughput (+12 percent), reflecting crusher circuit modifications completed in late 2003, improved operational efficiencies, increased ore grades (+15 percent) and increased recovery (+2 percent), offset by an inventory increase due to the timing of shipments.

Meanwhile, increased costs reflected higher mine operating and maintenance costs, increased crushing and grinding costs and higher treatment and refining costs. The realized copper price for the second quarter was $1.06, a 38 percent increase over the second quarter of 2003.

Newmont also reported that the Batu Hijau sold 111,200 equity ounces of gold (+21 percent) at total cash costs of $174 per ounce in the second quarter. Increased gold sales reflected increased throughput (+12 percent) and gold grades (+24 percent), offset by an increase in inventory.

Newmont added that the Batu Hijau commenced dividend payments during the second quarter and this will result in a decrease in Newmont's reported economic interest from 56.25 percent to 52.875 percent, in recognition of the economic interest held by the project's Indonesian shareholder.

“While the lower economic interest was applied to reported 2003 year-end copper and gold reserves, it will only be applied to earnings when Batu Hijau reports positive retained earnings, which is expected in September 2004,” Newmont said. (Robert)