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Newmont has lustrous year
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January 28, 1998: 12:39 p.m. ET
But to keep company on fast track, gold miner plans to cut 500 jobs
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NEW YORK (CNNfn) - Aiming to make 1998 as lustrous a year for profits as 1997, Newmont Mining Corp. said Wednesday it plans to cut its U.S.-based workforce by nearly 500 people, or 11 percent, as part of a more ambitious effort to trim cash outlays.
Denver-based Newmont is the nation's largest gold producer, with worldwide mining interests stretching from Indonesia and Central Asia to South America, Mexico and the United States.
In the fourth quarter, Newmont earned $38.6 million, while its operating subsidiary, Newmont Gold, earned $41.2 million. For all of 1997, those figures were $68.3 million and $72.9 million, respectively. That equals 44 cents per share after merger-related expenses of $104.4 million for Newmont Mining.
Company officials described the impending job cuts as both a response to Newmont's acquisition last May of Santa Fe Pacific Gold Corp. and part of a broader strategy to trim expenditures by up to $250 million through lowered capital spending, revised mining and production plans, and an already announced reduction in quarterly dividends..
The layoffs are expected to affect company mines in Denver; Imperial County, Calif.; and at Carlin Trend, Nev., where 1.5 million ounces of gold, or 75 percent of the company's total production, are mined annually.
The company said Wednesday the merger already has catalyzed company growth, spurring a leap in fourth-quarter earnings to 27 cents per diluted share from 14 cents in the year-earlier period.
Calling 1997 an "outstanding year", Ronald Cambre, Newmont's chairman and chief executive officer, said the company had maintained his market advantage despite a $41-an-ounce drop in the realized price of gold, a precious metal traditionally seen as one of the safest commodity investments.
In November, gold prices dipped below the psychologically significant $300 benchmark. The slump triggered widespread anxiety in the U.S. and abroad, prompting the governor of the bank of England to warn he would be "surprised" if the proposed European central bank decides to keep large gold reserves.
Since then, gold has recovered only slightly, closing at $300.50 Tuesday in trading on Comex.
Cambre said Newmont expects to produce between 3.8 and 4 million ounces of gold annually through the year 2000 at costs below $200 an ounce.
In 1997, Cambre noted, the company achieved a 14 percent reduction in production costs, to $187 per ounce, placing it among the world's lowest-cost major gold producers. 
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Newmont Mining Corp.
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