Edgar Filing: NEWMONT MINING CORP /DE/

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2006

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-31240

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		84-1611629
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1700 Lincoln Street Denver, Colorado		80203
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (303) 863-7414

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12-b2 of the Exchange Act.

(Check one): Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ¨ Yes x No

There were 422,460,240 shares of common stock outstanding on October 30, 2006 (and 27,761,153 exchangeable shares).

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
	(unaudited, in millions except per share)
Revenues
Sales - gold, net	$	1,009		$	914		$	3,095		$	2,556
Sales - copper, net		93			231			432			504

		1,102			1,145			3,527			3,060

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		525			502			1,564			1,437
Copper		66			86			215			226
Depreciation, depletion and amortization		153			155			444			466
Exploration		41			39			120			103
Advanced projects, research and development		19			18			68			47
General and administrative		29			32			103			95
Other expense, net		37			20			64			61

		870			852			2,578			2,435

Other income (expense)
Other income, net (Note 3)		317			66			386			177
Interest expense, net		(28	)		(23	)		(70	)		(75	)

		289			43			316			102

Income from continuing operations before income tax expense, minority interest and equity income of affiliates		521			336			1,265			727
Income tax expense		(206	)		(96	)		(362	)		(191	)
Minority interest in income of consolidated subsidiaries		(52	)		(115	)		(279	)		(248	)
Equity income of affiliates		1			—			1			3

Income from continuing operations		264			125			625			291
Gain (loss) from discontinued operations (Note 5)		(66	)		1			(57	)		(31	)

Net income	$	198		$	126		$	568		$	260

Income per common share (Note 6)
Basic and diluted:
Income from continuing operations	$	0.59		$	0.28		$	1.39		$	0.65
Loss from discontinued operations		(0.15	)		—			(0.13	)		(0.07	)

Net income	$	0.44		$	0.28		$	1.26		$	0.58

Basic weighted-average common shares outstanding		450			446			449			446

Diluted weighted-average common shares outstanding		452			449			451			449

Cash dividends declared per common share	$	0.10		$	0.10		$	0.30		$	0.30

The accompanying notes are an integral part of the condensed consolidated financial statements.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


	At September 30, 2006		At December 31, 2005
	(unaudited, in millions)
ASSETS
Cash and cash equivalents	$	1,059	$	1,082
Marketable securities and other short-term investments (Note 10)		273		817
Trade receivables		150		94
Accounts receivable		148		135
Inventories (Note 11)		372		304
Stockpiles and ore on leach pads (Note 12)		336		241
Deferred stripping costs (Note 2)		—		78
Deferred income tax assets		140		159
Other current assets		115		90

Current assets		2,593		3,000
Property, plant and mine development, net		6,547		5,581
Investments (Note 10)		1,239		955
Long-term stockpiles and ore on leach pads (Note 12)		795		599
Deferred stripping costs (Note 2)		—		100
Deferred income tax assets		814		515
Other long-term assets		202		181
Goodwill		2,895		2,879
Assets of operations held for sale (Note 5)		36		182

Total assets	$	15,121	$	13,992

LIABILITIES
Current portion of long-term debt (Note 13)	$	158	$	195
Accounts payable		251		227
Employee-related benefits		167		176
Derivative instruments (Note 9)		453		270
Other current liabilities (Note 14)		609		471

Current liabilities		1,638		1,339
Long-term debt (Note 13)		1,799		1,723
Reclamation and remediation liabilities (Note 15)		483		442
Deferred income tax liabilities		571		446
Employee-related benefits		284		273
Other long-term liabilities (Note 14)		311		415
Liabilities of operations held for sale (Note 5)		3		47

Total liabilities		5,089		4,685

Commitments and contingencies (Note 18)
Minority interest in subsidiaries		996		931

STOCKHOLDERS’ EQUITY
Common stock		675		666
Additional paid-in capital		6,683		6,578
Accumulated other comprehensive income		572		378
Retained earnings		1,106		754

Total stockholders’ equity		9,036		8,376

Total liabilities and stockholders’ equity	$	15,121	$	13,992

The accompanying notes are an integral part of the condensed consolidated financial statements.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended September 30,
	2006			2005
	(unaudited, in millions)
Operating activities:
Net income	$	568		$	260
Adjustments to reconcile net income to net cash from continuing operations:
Depreciation, depletion and amortization		444			466
Revenue from prepaid forward sales obligation		(48	)		(48	)
Loss from discontinued operations		57			31
Accretion of accumulated reclamation obligations		22			20
Deferred income taxes		(117	)		(34	)
Minority interest expense		279			248
Gain on asset sales, net		(312	)		(36	)
Gain on sale of investments, net		(4	)		(27	)
Hedge loss, net		82			4
Other operating adjustments and write-downs		90			(35	)
Decrease (increase) in operating assets:
Trade and accounts receivable		(51	)		25
Inventories, stockpiles and ore on leach pads		(323	)		(155	)
Other assets		(49	)		—
Increase (decrease) in operating liabilities:
Accounts payable and other accrued liabilities		208			59
Reclamation liabilities		(44	)		(24	)

Net cash provided from continuing operations		802			754
Net cash (used in) provided from discontinued operations		(6	)		7

Net cash from operations		796			761

Investing activities:
Additions to property, plant and mine development		(1,109	)		(884	)
Investments in marketable debt and equity securities		(1,389	)		(2,530	)
Proceeds from sale of marketable debt and equity securities		1,934			2,562
Acquisitions (Note 8)		(348	)		—
Proceeds from sale of assets, net		331			61
Other		(3	)		1

Net cash used in investing activities of continuing operations		(584	)		(790	)
Net cash (used in) provided from investing activities of discontinued operations		(6	)		115

Net cash used in investing activities		(590	)		(675	)

Financing activities:
Proceeds from debt, net		198			584
Repayment of debt		(63	)		(141	)
Early extinguishment of prepaid forward sales obligation		(48	)		—
Dividends paid to common stockholders		(135	)		(134	)
Dividends paid to minority interests		(235	)		(85	)
Proceeds from stock issuance		66			17
Change in restricted cash and other		(11	)		(9	)

Net cash (used in) provided from financing activities of continuing operations		(228	)		232
Net cash used in financing activities of discontinued operations		(7	)		(1	)

Net cash (used in) provided from financing activities		(235	)		231

Effect of exchange rate changes on cash		6			(3	)

Net change in cash and cash equivalents		(23	)		314
Cash and cash equivalents at beginning of period		1,082			781

Cash and cash equivalents at end of period	$	1,059		$	1,095

The accompanying notes are an integral part of the condensed consolidated financial statements.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

(1) BASIS OF PRESENTATION

The interim Condensed Consolidated Financial Statements of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be reported for the entire year. These interim Condensed Consolidated Financial Statements should be read in conjunction with Newmont’s Consolidated Financial Statements included in its Annual Report on Form 10-K/A for the year ended December 31, 2005, filed October 26, 2006.

References to “A$” refer to Australian currency, “CDN$” to Canadian currency, “IDR” to Indonesian currency and “$” to United States currency.

Certain amounts for the three and nine months ended September 30, 2005 and at December 31, 2005 have been reclassified to conform to the 2006 presentation. The Company has reclassified the income statement, balance sheet and cash flow statement amounts for the Golden Grove, Holloway and Zarafshan-Newmont Joint Venture operations from the historical presentation to discontinued operations in the Condensed Consolidated Statements of Income and Cash Flows and to assets and liabilities of operations held for sale on the Condensed Consolidated Balance Sheets for all periods presented.

(2) RECENT ACCOUNTING PRONOUNCEMENTS

Deferred Stripping Costs

On January 1, 2006 the Company adopted Emerging Issues Task Force Issue No. 04-06 (“EITF 04-06”), “Accounting for Stripping Costs Incurred during Production in the Mining Industry.” EITF 04-06 addresses the accounting for stripping costs incurred during the production phase of a mine and refers to these costs as variable production costs that should be included as a component of inventory to be recognized in Costs applicable to sales in the same period as the revenue from the sale of inventory. As a result, capitalization of post-production stripping costs is appropriate only to the extent product inventory exists at the end of a reporting period. The guidance requires application through recognition of a cumulative effect adjustment to opening retained earnings in the period of adoption, with no charge to current earnings for prior periods. The results for prior periods have not been restated. The cumulative effect adjustment reduced opening retained earnings by $81 (net of tax and minority interests) and eliminated the $71 net deferred stripping asset from the balance sheet. Adoption of EITF 04-06 had no impact on the Company’s cash position or net cash from operations.

Prior to 2006 at some of the Company’s mining operations, deferred stripping costs were charged to Costs applicable to sales as gold or copper was produced and sold using the units of production method based on estimated recoverable quantities of proven and probable gold or copper reserves, using a stripping ratio calculated as the ratio of total tons to be moved to total proven and probable ore reserves, which resulted in the recognition of the costs of waste removal activities over the life of the mine as gold or copper was produced. The application of the deferred stripping accounting method generally resulted in an asset (deferred stripping costs), although a liability (advanced stripping costs) arose when the actual stripping ratio incurred to date was less than the expected stripping ratio over the life of the mine. The Advanced stripping costs primarily pertained to the Batu Hijau operation.

Movements in the net deferred stripping cost balance were as follows:


	Nine Months Ended September 30,
	2006			2005
Opening balance	$	71		$	20
Cumulative effect adjustment		(71	)		—
Disposition of Ovacik		—			(4	)
Additions		—			127
Amortization		—			(78	)

Closing balance	$	—		$	65

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

The deferred and advanced stripping cost balances are presented in the balance sheet at December 31, 2005 in other assets or other liabilities as follows:


	At December 31, 2005
Other Assets:
Current	$	78
Long-term		100

		178

Other Liabilities:
Current	$	14
Long-term		93

		107

Deferred stripping, net	$	71

Stock Based Compensation

On January 1, 2006, the Company adopted the fair value recognition provisions of FASB Statement No. 123(R), “Share-Based Payment” (“FAS 123(R)”). Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related Interpretations, as permitted by Financial Accounting Standards Board (“FASB”) Statement No. 123, Accounting for Stock-Based Compensation. In accordance with APB 25, no compensation cost was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant.

The Company adopted FAS 123(R) using the modified prospective transition method. Under this method, compensation cost recognized in the three and nine months ended September 30, 2006 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of FAS 123, and b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of FAS 123(R). The results for prior periods have not been restated.

As a result of adopting FAS 123(R), the Company’s Income from continuing operations and Net income for the three and nine month periods of 2006 is $4 ($0.01 per share, basic and diluted) and $14 ($0.03 per share, basic and diluted) lower, respectively, than if we had continued to account for share-based compensation under APB 25 as we did in the comparable prior year periods. Prior to the adoption of FAS 123(R), cash retained as a result of tax deductions relating to stock-based compensation was included in operating cash flows, along with other tax cash flows, and requires tax benefits relating to the deductibility of increases in the equity instruments issued under share-based compensation arrangements that are not included in Costs applicable to sales (“excess tax benefits”) to be presented in the Statement of Cash Flows as financing cash inflows. The (expense) benefit realized for tax deductions from option exercises totaled $(8) and $4 for the three and nine month periods of 2006, respectively.

The Company currently maintains the 2005 Stock Incentive Plan (“Stock Plan”), approved by stockholders on April 27, 2005, for executives and eligible employees. Under this Stock Plan, options to purchase shares of stock can be granted with exercise prices not less than fair market value of the underlying stock at the date of grant. Fair market value of a share of common stock as of the grant date is the average of the high and low sales prices for a share of the Company’s common stock on the New York Stock Exchange. The Company also maintains prior stock plans, but no longer grants awards under these plans. Options granted under the Company’s stock plans vest over periods ranging from two to four years and are exercisable over a period of time not to exceed 10 years from grant date. At September 30, 2006, 17,570,931 shares were available for future grants under the Company’s Stock Plan.

The value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the input of subjective assumptions, including the expected term of the option award and stock price volatility. The expected term of options granted is derived from historical data on employee exercise and post-vesting employment termination behavior. Expected volatility is based on the historical volatility of our stock. These estimates involve inherent uncertainties and the application of management judgment. In addition, we are required to estimate the expected forfeiture rate and only recognize expense for those options expected to vest. As a result, if other assumptions had been used, our recorded and pro forma stock-based compensation expense could have been different from that reported. The Black-Scholes option-pricing model used the following assumptions for the nine months ended September 30, 2006 and 2005, respectively: weighted-average risk-free interest rates of 4.9% and 3.9%; dividend yields of 0.7% and 1%; expected lives of five years and four years; and volatility of 34%

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

and 40%. 1,238,750 and 1,056,368 stock option awards were granted during the nine months ended September 30, 2006 and 2005, respectively.

The following table summarizes activity for stock options outstanding at September 30, 2006:


	Options Outstanding
	Number of Shares		Weighted Average Exercise Price
Outstanding at beginning of year	9,433,669		$	35.90
Granted	1,238,750		$	57.71
Exercised	(2,146,006	)	$	32.32
Forfeited and expired	(521,159	)	$	54.23

Outstanding at September 30, 2006	8,005,254		$	38.97

Options exercisable at September 30, 2006	4,678,496		$	34.72

The following table summarizes information about stock options outstanding at September 30, 2006, with exercise prices equal to the fair market value on the date of grant with no restrictions on exercisability after vesting:


	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted- Average Remaining Contractual Life (in years)	Weighted- Average Exercise Price		Number Exercisable	Weighted- Average Exercise Price
$0 to $20	1,118,906	2.7	$	18.61	1,118,906	$	18.61
$20 to $30	1,538,022	5.2	$	25.88	1,459,699	$	25.98
$30 to $40	962,439	7.5	$	37.56	459,959	$	37.03
$40 to $50	3,044,420	8.0	$	45.45	1,454,215	$	45.48
$50+	1,341,467	8.7	$	57.18	185,717	$	53.89

Total/average	8,005,254	6.8	$	38.97	4,678,496	$	34.72

As of September 30, 2006, there was $32 of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 2.1 years. The total intrinsic value of options exercised in the third quarter of 2006 and 2005 was $10 and $5, respectively. The total intrinsic value of options exercised in the nine month period of 2006 and 2005 was $48 and $10, respectively. 1,153,974 stock options vested during the nine months ended September 30, 2006. The weighted-average exercise price of the stock options vested was $36.65 in 2006. 1,024,047 stock options vested during the three and nine months ended September 30, 2005. The weighted-average exercise price of the stock options vested was $32.75 in 2005.

The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition provisions of FAS 123(R) to options granted under our stock option plans in the three and nine month periods of 2005:


	Three Months Ended September 30, 2005			Nine Months Ended September 30, 2005
Net income, as reported	$	126		$	260
Less: Compensation expense determined under the fair value method, net of tax		(5	)		(14	)

Pro forma net income	$	121		$	246

Net income per common share, basic and diluted:
As reported	$	0.28		$	0.58
Pro forma net income	$	0.27		$	0.55

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

Other Stock-Based Compensation

The Company grants restricted stock to certain employees. Shares of restricted stock are granted upon achievement of certain financial and operating thresholds at fair market value on the grant date. Prior to vesting, these shares of restricted stock are subject to certain restrictions related to ownership and transferability. Holders of restricted stock are entitled to vote the shares and to receive any dividends declared on the shares. For the nine months ended September 30, 2006 and 2005, 102,491 and 155,061 shares of restricted stock, respectively, were granted and issued, of which 100,258 and 90,618 shares remained unvested at September 30, 2006 for the 2006 and 2005 grants, respectively. The weighted-average fair market value of the stock grants issued were $58 and $45 in 2006 and 2005, respectively. Compensation expense recorded for restricted stock was $nil and $2 for the three months ended September 30, 2006 and 2005, respectively, and $nil and $7 for the nine months ended September 30, 2006 and 2005, respectively. The shares of restricted stock vest in equal increments annually over three years.

Restricted stock units also are granted, upon achievement of certain financial and operating thresholds, to employees in certain foreign jurisdictions. For the nine months ended September 30, 2006, the Company granted 19,181 restricted stock units at the weighted-average fair market value of $58 per underlying share of the Company’s common stock. For the nine months ended September 30, 2005, the Company granted 27,386 restricted stock units at the weighted-average fair market value of $45 per underlying share of the Company’s common stock. Compensation expense recorded for the foreign jurisdiction restricted stock units was $nil for the three months ended September 30, 2006 and 2005, respectively, and $nil and $1 for the nine months ended September 30, 2006 and 2005, respectively. These restricted stock units vest in equal increments annually over three years. Upon vesting, the employee is entitled to receive for each restricted stock unit one share of the Company’s common stock.

The Company grants deferred stock awards to certain other employees. The deferred stock awards vest over periods between two and three years. For the nine months ended September 30, 2006 and 2005 there were 237,946 and 98,379 deferred stock awards granted by the Company, respectively. At September 30, 2006 and December 31, 2005, 428,263 and 303,002 deferred stock awards, respectively, remained unvested. Compensation expense recorded for deferred stock awards was $2 and $2 for the three months ended September 30, 2006 and 2005, respectively, and $6 and $5 for the nine months ended September 30, 2006 and 2005, respectively. Upon vesting, the employee is entitled to receive the number of shares of the Company’s common stock specified in the deferred stock award.

Income Taxes

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 requires that the Company recognize in its financial statements, the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The provisions of FIN 48 are effective beginning January 1, 2007 with the cumulative effect of the change in accounting principle recorded as an adjustment to the opening balance of retained earnings. The Company is currently evaluating the impact of adopting FIN 48 on the Company’s consolidated financial position, results of operations and disclosures.

Fair Value Measurements

In September 2006, the FASB issued FASB Statement No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of FAS 157 are effective for the Company’s fiscal year ending December 31, 2008. The Company is currently evaluating the impact that the adoption of this statement will have on the Company’s consolidated financial position, results of operations and disclosures.

Pensions

In September 2006, the FASB issued FASB Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“FAS 158”). FAS 158 requires employers that sponsor one or more defined benefit plans to (i) recognize the funded status of a benefit plan in its statement of financial position, (ii) recognize the gains or losses and prior service costs or credits that arise during the period as a component of other comprehensive income, net of tax, (iii) measure the defined benefit plan assets and obligations as of the date of the employer’s

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

fiscal year-end statement of financial position, and (iv) disclose in the notes to the financial statements additional information about certain effects on net periodic cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. The provisions of FAS 158 are effective for the Company’s fiscal year ending December 31, 2006. The Company is currently evaluating the impact that the adoption of this statement will have on the Company’s consolidated financial position, results of operations and disclosures.

(3) OTHER INCOME, NET


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Gain on sale of Alberta oil sands project	$	266		$	—		$	266		$	—
Royalty and dividend income		30			18			88			57
Interest income		16			17			52			41
Gain on sale of Martabe project		30			—			30			—
Income from development projects, net		5			—			14			—
Gain on sale of property, plant and equipment		4			1			12			4
Foreign currency exchange gains		2			8			11			10
Gain (loss) on sale of other assets, net		3			(1	)		4			32
Gain on sale of investments, net		—			21			4			27
Loss on early retirement of debt		(40	)		—			(40	)		—
(Loss) gain on ineffective portion of derivative instruments, net		(1	)		1			(60	)		2
Other		2			1			5			4

	$	317		$	66		$	386		$	177

During the third quarter of 2006, Newmont sold its Alberta oil sands project to the Korean National Oil Corporation and its Martabe gold project in Indonesia to Agincourt Resources Limited (“Agincourt”). Newmont received net cash proceeds of $271 for the Alberta oil sands project resulting in a $266 pre-tax gain. Newmont received $42 net cash proceeds and approximately 43 million Agincourt shares valued at $37 for the Martabe project, resulting in a $30 pre-tax gain.

The gain on investments during 2005 was primarily attributable to the sale of Newmont’s investment in Kinross Gold Corporation which resulted in a $20 pre-tax gain.

(4) EMPLOYEE PENSION AND OTHER BENEFIT PLANS


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Pension benefit costs, net
Service cost	$	3		$	3		$	11		$	10
Interest cost		6			4			17			14
Expected return on plan assets		(4	)		(4	)		(13	)		(12	)
Amortization of prior service cost		—			1			1			1
Amortization of loss		2			2			6			5

	$	7		$	6		$	22		$	18


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Other benefit costs, net
Service cost	$	1		$	1		$	4		$	4
Interest cost		1			2			4			4

	$	2		$	3		$	8		$	8

A pension settlement loss of $4 was recognized in the nine months ended September 30, 2005 and included in Other expense, net.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(5) DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE

In early July 2006, Newmont’s Board of Directors approved a plan to sell the Company’s 50% interest in the Zarafshan-Newmont Joint Venture. However, as a result of the Uzbek government’s expropriation of the Company’s assets in August 2006, an impairment loss of $101 was recognized for the three and nine months ended September 30, 2006. The Company will continue to challenge the Uzbek government’s actions through international arbitration.

During the fourth quarter of 2005, Newmont committed to plans to divest its Holloway operation in Canada. In September 2006, Newmont reached an agreement with St. Andrew Goldfields Ltd. to sell the Holloway operation for cash proceeds of $40 plus certain royalties. Newmont expects the sale of Holloway to be completed during the fourth quarter of 2006.

During June 2005, Newmont announced the pending sale of its Golden Grove copper-zinc operation in Western Australia to Oxiana Limited (“Oxiana”) for cash of A$190 and 82 million Oxiana shares. The sale was completed on July 26, 2005.

Newmont has accounted for these dispositions in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets.” The Company has reclassified the balance sheet amounts and the income statement results from the historical presentation to Assets and Liabilities of operations held for sale on the Condensed Consolidated Balance Sheets and to Loss from discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. The Condensed Consolidated Statements of Cash Flows have been reclassified for assets held for sale and discontinued operations for all periods presented.

The following table details selected financial information included in the Gain (loss) from discontinued operations:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Sales - gold, net	$	5		$	19		$	52		$	63
Sales - base metals, net		—			1			—			38

	$	5		$	20		$	52		$	101

Gain (loss) from operations	$	(1	)	$	(2	)	$	6		$	(10	)
Gain (loss) on impairment		(101	)		6			(101	)		(33	)

Pre-tax (loss) gain		(102	)		4			(95	)		(43	)
Income tax benefit (expense)		36			(3	)		38			12

Gain (loss) from discontinued operations	$	(66	)	$	1		$	(57	)	$	(31	)

The major classes of Assets and Liabilities of operations held for sale are as follows:


	At September 30, 2006		At December 31, 2005
Assets:
Accounts receivable	$	—	$	2
Inventories		2		20
Stockpiles and ore on leach pads		—		18
Property, plant and mine development		21		129
Other assets		13		13

Total assets of operations held for sale	$	36	$	182

Liabilities:
Accounts payable	$	—	$	7
Reclamation and remediation		3		5
Other liabilities		—		35

Total liabilities of operations held for sale	$	3	$	47

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(6) INCOME PER COMMON SHARE

Basic income per common share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted income per common share is computed similarly to basic income per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.


	Three Months Ended September 30,					Nine Months Ended September 30,
	2006			2005		2006			2005
Numerator:
Income from continuing operations	$	264		$	125	$	625		$	291
Gain (loss) from discontinued operations		(66	)		1		(57	)		(31	)

Net income	$	198		$	126	$	568		$	260

Denominator:
Basic		450			446		449			446
Effect of employee stock-based awards		2			3		2			3

Diluted		452			449		451			449

Income per common share
Basic and diluted:
Income from continuing operations	$	0.59		$	0.28	$	1.39		$	0.65
Gain (loss) from discontinued operations		(0.15	)		—		(0.13	)		(0.07	)

Net income	$	0.44		$	0.28	$	1.26		$	0.58

Options to purchase 2.1 million and 1.6 million shares of common stock at average exercise prices of $52.45 and $53.34 were outstanding as of September 30, 2006 and 2005, respectively, but were not included in the computation of diluted weighted average number of common shares because their effect would have been anti-dilutive.

(7) COMPREHENSIVE INCOME


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Net income	$	198		$	126		$	568		$	260
Other comprehensive income (loss), net of tax:
Unrealized (loss) gain on marketable equity securities		(83	)		209			172			279
Foreign currency translation adjustments		7			19			26			11
Changes in fair value of cash flow hedge instruments		46			(24	)		(4	)		(38	)

		(30	)		204			194			252

Comprehensive income	$	168		$	330		$	762		$	512

(8) ACQUISITIONS

On September 27, 2006, Newmont acquired a 40% interest in Shore Gold Inc.’s Fort a la Corne Joint Venture in Saskatchewan, Canada for $152.

On March 20, 2006, Newmont acquired Newcrest Mining Limited’s 22.22% interest in the Boddington Project, bringing its interest in the project to 66.67%, for total consideration of $164 plus stamp duty of $9 paid in the third quarter of 2006.

On January 20, 2006, Newmont acquired the remaining 15% interest in the Akyem project for total consideration of $23, bringing its interest in the project to 100%.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(9) SALES CONTRACTS, COMMODITY AND DERIVATIVE INSTRUMENTS

For the three months ended September 30, 2006 and 2005, losses of $1 and gains of $1, respectively, were included in Other income, net for the ineffective portion of derivative instruments designated as cash flow hedges. For the nine months ended September 30, 2006 and 2005, losses of $60 and gains of $2, respectively, were included in Other income, net for the ineffective portion of derivative instruments designated as cash flow hedges. The amount anticipated to be reclassified from Accumulated other comprehensive income to income for derivative instruments during the next 12 months is a loss of approximately $50. The maximum period over which hedged forecasted transactions are expected to occur is 5 years.

Newmont had the following derivative contracts outstanding at September 30, 2006:


	Expected Maturity Date or Transaction Date						Fair Value
	2006		2007		Total/ Average		At September 30, 2006			At December 31, 2005
Gold Put Option Contracts
($ denominated):
Ounces (thousands)		10		20		30	$	(2	)	$	(3	)
Average price	$	393	$	397	$	396
Copper Collar Contracts ⁽³⁾
($ denominated):
Pounds (millions) ⁽⁴⁾		93		84		177	$	(351	)⁽¹⁾	$	(261	)⁽²⁾
Average cap price	$	1.38	$	1.41	$	1.39
Average floor price	$	1.10	$	1.10	$	1.10
$/IDR Forward Purchase Contracts ⁽³⁾:
$ (millions)	$	21	$	50	$	71	$	3		$	—
Average rate (IDR/$)		10,261		9,725		9,881

⁽¹⁾

The fair value does not include amounts payable ($100) on derivative contracts that were closed out in September 2006 with the net settlement due in October 2006. At September 30, 2006, $451 was included in Current liabilities, Derivative instruments.

⁽²⁾

The fair value does not include amounts payable ($36) on derivative contracts that were closed out in December 2005 with the net settlement due and paid in January 2006.

⁽³⁾

56.25% guaranteed by Newmont, 43.75% guaranteed by an affiliate of Sumitomo Corporation.

⁽⁴⁾

Of the contracts maturing in 2007, 71 million pounds are designated against expected 2006 sales. The remainder are designated against 2007 sales.

Provisional Copper and Gold Sales

The Company’s provisional copper and gold sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the copper concentrates at the forward London Metal Exchange price at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each period prior to final settlement.

For the three and nine months ended September 30, 2006 and 2005, the Company recorded the following gross revenues before treatment and refining charges, which were subject to final price adjustments at September 30, 2006 and 2005, as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Gross revenue subject to final price adjustments
Copper	$	309		$	326		$	405		$	443
Gold	$	9		$	21		$	19		$	21

The average final price adjustments realized were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Average final price adjustments
Copper		26	%		12	%		39	%		10	%
Gold		(4	)%		3	%		4	%		—

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

Price-Capped Forward Sales Contracts

In 2001, Newmont entered into transactions that closed out certain call options. The options were replaced with a series of forward sales contracts requiring physical delivery of the same quantity of gold over slightly extended future periods. Under the terms of the contracts, Newmont will realize the lower of the spot price on the delivery date or the capped price ranging from $381 to $392 per ounce. The initial fair value of the forward sales contracts was recorded as deferred revenue. At September 30, 2006, $47 remained in deferred revenue and will be included in revenue as delivery occurs. The forward sales contracts are accounted for as normal sales contracts under SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities” and SFAS No. 138 “Accounting for Certain Derivative Instruments and Certain Hedging Activities-an Amendment to SFAS No. 133.”

Newmont had the following price-capped forward sales contracts outstanding at September 30, 2006:


	Scheduled Maturity Date or Transaction Date								Fair Value
	2008		2009		2011		Total/ Average		At September 30, 2006			At December 31, 2005
Ounces (thousands)		1,000		600		250		1,850	$	(486	)	$	(338	)
Average price	$	384	$	381	$	392	$	384

Interest Rate Swap Contracts

In 2001, Newmont entered into contracts to hedge the interest rate risk exposure on a portion of its $275 8 5/8% notes and its $200 8 3/8% debentures. For the three months ended September 30, 2006 and 2005, these transactions resulted in a reduction in interest expense of $nil and $1, respectively. For the nine months ended September 30, 2006 and 2005, these transactions resulted in a reduction in interest expense of $nil and $3, respectively. The fair value of the interest rate swaps was $1 and $2 at September 30, 2006 and December 31, 2005, respectively.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(10) INVESTMENTS


	At September 30, 2006
			Unrealized
	Cost/Equity Basis		Gain		Loss			Fair/Equity Value
Current:
Marketable Debt Securities:
Auction rate securities	$	197	$	—	$	—		$	197

Marketable Equity Securities:
Agincourt Resources		37		—		(3	)		34
Other		10		23		—			33

		47		23		(3	)		67

Other investments, at cost		9		—		—			9

	$	253	$	23	$	(3	)	$	273

Long-term:
Marketable Equity Securities:
Canadian Oil Sands Trust	$	268	$	551	$	—		$	819
Gabriel Resources, Ltd.		72		91		—			163
Shore Gold, Inc.		94		—		(7	)		87
Miramar Mining Corporation		29		48		—			77
Other		32		13		(1	)		44

		495		703		(8	)		1,190

Other investments, at cost		12		—		—			12

Investment in Affiliates:
European Gold Refineries		15		—		—			15
AGR Matthey Joint Venture		15		—		—			15
Other		7		—		—			7

		37		—		—			37

	$	544	$	703	$	(8	)	$	1,239


	At December 31, 2005
			Unrealized
	Cost/Equity Basis		Gain		Loss			Fair/Equity Value
Current:
Marketable Debt Securities:
Auction rate securities	$	785	$	—	$	—		$	785

Marketable Equity Securities:
Other		11		12		—			23

Other investments, at cost		9		—		—			9

	$	805	$	12	$	—		$	817

Long-term:
Marketable Equity Securities:
Canadian Oil Sands Trust	$	240	$	410	$	—		$	650
Gabriel Resources, Ltd.		53		29		—			82
Shore Gold, Inc.		89		22		—			111
Miramar Mining Corporation		27		19		—			46
Other		20		8		—			28

		429		488		—			917

Other investments, at cost		10		—		—			10

Investment in Affiliates:
European Gold Refineries		15		—		—			15
AGR Matthey Joint Venture		13		—		—			13

		28		—		—			28

	$	467	$	488	$	—		$	955

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(11) INVENTORIES


	At September 30, 2006		At December 31, 2005
In-process	$	78	$	72
Concentrate		12		3
Precious metals		13		3
Materials, supplies and other		269		226

	$	372	$	304

(12) STOCKPILES AND ORE ON LEACH PADS


	At September 30, 2006		At December 31, 2005
Current:
Stockpiles	$	183	$	128
Ore on leach pads		153		113

	$	336	$	241

Long-term:
Stockpiles	$	522	$	404
Ore on leach pads		273		195

	$	795	$	599

(13) DEBT


	At September 30, 2006				At December 31, 2005
	Current		Non-Current		Current		Non-Current
Sale-leaseback of refractory ore treatment plant	$	21	$	235	$	19	$	256
5⁷/8% notes, net of discount		—		597		—		597
8⁵/8% debentures, net of discount		—		217		—		218
Newmont Australia 7⁵/8% guaranteed notes, net of premium		—		120		—		120
Prepaid forward sales obligation		—		—		48		48
PTNNT project financing facility		87		436		87		479
PTNNT shareholder loan		39		—		39		—
Yanacocha credit facility		7		93		—		—
Yanacocha bonds		—		100		—		—
Project financings, capital leases and other		4		1		2		5

	$	158	$	1,799	$	195	$	1,723

Scheduled minimum debt repayments at September 30, 2006 are $83 for the remainder of 2006, $122 in 2007, $243 in 2008, $125 in 2009, $133 in 2010 and $1,251 thereafter.

On September 27, 2006, Newmont settled its remaining obligations under the prepaid forward gold sales contract and forward gold purchase contract for which it was required to deliver 17,951 ounces of gold in December 2006 and 179,062 ounces of gold in June 2007. This settlement resulted in cash payments of approximately $96, a $48 reduction to the current portion of long-term debt and a pre-tax loss on extinguishment of debt of approximately $40. During June 2006, 161,111 ounces of gold were physically delivered in connection with the prepaid forward sales obligation and the Company recorded a non-cash reduction in debt of $48.

On July 27, 2006, Yanacocha issued $100 of bonds into the Peruvian capital markets under a $200 bond program approved by the Peruvian securities regulatory authority. The bonds are held by various Peruvian entities, including pension funds, mutual funds, government funds and insurance companies. The issuance is comprised of $42 of floating interest rate bonds bearing interest at a rate of Libor plus 1.4375%; and $58 of fixed rate bonds bearing interest at 7.0%. The bonds have a four year grace period and amortize quarterly over six years. The bonds are unsecured and are non-recourse to Newmont.

On May 19, 2006, Yanacocha entered into an unsecured $100 bank financing with a syndicate of Peruvian commercial banks, comprised of Banco de Credito del Peru, Banco Continental and Banco Wiese Sudameris. Quarterly repayments begin in May 2007 with final maturity May 2014. Borrowings under the facility bear interest at a rate of Libor plus 1.875%. The loan is non-recourse to Newmont.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(14) OTHER LIABILITIES


	At September 30, 2006		At December 31, 2005
Other current liabilities:
Income and mining taxes	$	203	$	77
Accrued operating costs		121		79
Accrued capital expenditures		93		78
Reclamation and remediation costs		53		63
Interest		53		42
Royalties		22		26
Taxes other than income and mining		16		18
Deferred income tax liabilities		4		4
Deferred revenue		4		17
Advanced stripping costs		—		14
Other		40		53

	$	609	$	471


	At September 30, 2006		At December 31, 2005
Other long-term liabilities:
Income taxes	$	230	$	220
Deferred revenue from the sale of future product		47		47
Derivative instruments		—		30
Advanced stripping costs		—		93
Other		34		25

	$	311	$	415

(15) RECLAMATION AND REMEDIATION (ASSET RETIREMENT OBLIGATIONS)

At September 30, 2006 and December 31, 2005, $467 and $428, respectively, were accrued for reclamation obligations relating to mineral properties in accordance with SFAS No. 143, “Accounting for Asset Retirement Obligations.” In addition, the Company is involved in several matters concerning environmental obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At September 30, 2006 and December 31, 2005, $69 and $77, respectively, were accrued for such obligations. These amounts are also included in Reclamation and remediation liabilities.

The following is a reconciliation of the liability for asset retirement obligations:


	Nine Months Ended September 30,
	2006			2005
Balance at beginning of period	$	505		$	469
Additions, changes in estimates and other		51			9
Liabilities settled		(42	)		(23	)
Disposition of liability		—			(7	)
Accretion expense		22			20

Balance at end of period	$	536		$	468

The current portions of Reclamation and remediation liabilities of $53 and $63 at September 30, 2006 and December 31, 2005, respectively, are included in Other current liabilities. The additions in 2006 relate to expansions of waste dumps at Batu Hijau ($33) and Nevada ($8), and the acquisition of an additional interest at Boddington ($10).

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(16) SEGMENT INFORMATION

Financial information relating to Newmont’s segments is as follows:


	Three Months Ended September 30, 2006
	Nevada		Yanacocha		Australia/ New Zealand		Batu Hijau		Africa		Other Operations
Sales, net:
Gold	$	309	$	358	$	221	$	35	$	47	$	37
Copper	$	—	$	—	$	—	$	93	$	—	$	—
Cost applicable to sales:
Gold	$	224	$	121	$	134	$	16	$	19	$	11
Copper	$	—	$	—	$	—	$	66	$	—	$	—
Depreciation, depletion and amortization:
Gold	$	37	$	46	$	32	$	7	$	6	$	5
Copper	$	—	$	—	$	—	$	12	$	—	$	—
Other	$	—	$	—	$	1	$	—	$	—	$	—
Exploration	$	8	$	3	$	5	$	—	$	4	$	1
Advanced projects, research and development	$	4	$	1	$	2	$	2	$	6	$	—
Other income, net	$	4	$	4	$	4	$	1	$	1	$	(39	)
Interest expense, net	$	—	$	9	$	—	$	11	$	—	$	1
Pre-tax income (loss) before minority interest and equity income of affiliates	$	40	$	158	$	60	$	13	$	11	$	(24	)
Additions to property, plant and mine development	$	211	$	61	$	53	$	13	$	65	$	1


	Three Months Ended September 30, 2006
	Total Operations			Exploration			Merchant Banking			Corporate and Other			Consolidated
Sales, net:
Gold	$	1,007		$	—		$	—		$	2		$	1,009
Copper	$	93		$	—		$	—		$	—		$	93
Cost applicable to sales:
Gold	$	525		$	—		$	—		$	—		$	525
Copper	$	66		$	—		$	—		$	—		$	66
Depreciation, depletion and amortization:
Gold	$	133		$	—		$	—		$	—		$	133
Copper	$	12		$	—		$	—		$	—		$	12
Other	$	1		$	—		$	5		$	2		$	8
Exploration	$	21		$	20		$	—		$	—		$	41
Advanced projects, research and development	$	15		$	—		$	(2	)	$	6		$	19
Other income, net	$	(25	)	$	1		$	298		$	43		$	317
Interest expense, net	$	21		$	—		$	—		$	7		$	28
Pre-tax income (loss) before minority interest and equity income of affiliates	$	258		$	(20	)	$	294		$	(11	)	$	521
Additions to property, plant and mine development	$	404		$	—		$	3		$	—		$	407

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Three Months Ended September 30, 2005
	Nevada			Yanacocha		Australia/ New Zealand			Batu Hijau		Africa			Other Operations
Sales, net:
Gold	$	256		$	338	$	167		$	126	$	—		$	40
Copper	$	—		$	—	$	—		$	231	$	—		$	—
Cost applicable to sales:
Gold	$	212		$	111	$	121		$	38	$	—		$	20
Copper	$	—		$	—	$	—		$	86	$	—		$	—
Depreciation, depletion and amortization:
Gold	$	32		$	50	$	29		$	11	$	—		$	5
Copper	$	—		$	—	$	—		$	20	$	—		$	—
Other	$	—		$	—	$	—		$	—	$	—		$	—
Exploration	$	6		$	2	$	5		$	—	$	2		$	—
Advanced projects, research and development	$	—		$	2	$	—		$	—	$	6		$	1
Other income, net	$	1		$	1	$	4		$	—	$	—		$	—
Interest expense, net	$	—		$	—	$	—		$	11	$	—		$	—
Pre-tax income (loss) before minority interest and equity income of affiliates	$	7		$	172	$	14		$	191	$	(8	)	$	(6	)
Amortization of deferred (advanced) stripping, net	$	(16	)	$	—	$	(3	)	$	16	$	—		$	(1	)
Additions to property, plant and mine development	$	118		$	62	$	27		$	24	$	94		$	8


	Three Months Ended September 30, 2005
	Total Operations			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net:
Gold	$	927		$	—		$	—	$	(13	)	$	914
Copper	$	231		$	—		$	—	$	—		$	231
Cost applicable to sales:
Gold	$	502		$	—		$	—	$	—		$	502
Copper	$	86		$	—		$	—	$	—		$	86
Depreciation, depletion and amortization:
Gold	$	127		$	—		$	—	$	—		$	127
Copper	$	20		$	—		$	—	$	—		$	20
Other	$	—		$	1		$	3	$	4		$	8
Exploration	$	15		$	24		$	—	$	—		$	39
Advanced projects, research and development	$	9		$	—		$	3	$	6		$	18
Other income, net	$	6		$	1		$	39	$	20		$	66
Interest expense, net	$	11		$	—		$	—	$	12		$	23
Pre-tax income (loss) before minority interest and equity income of affiliates	$	370		$	(23	)	$	33	$	(44	)	$	336
Amortization of deferred (advanced) stripping, net	$	(4	)	$	—		$	—	$	—		$	(4	)
Additions to property, plant and mine development	$	333		$	—		$	1	$	20		$	354

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2006
	Nevada		Yanacocha		Australia/ New Zealand		Batu Hijau			Africa			Other Operations
Sales, net:
Gold	$	913	$	1,274	$	599	$	159		$	47		$	133
Copper	$	—	$	—	$	—	$	432		$	—		$	—
Cost applicable to sales:
Gold	$	664	$	390	$	385	$	58		$	19		$	48
Copper	$	—	$	—	$	—	$	215		$	—		$	—
Depreciation, depletion and amortization:
Gold	$	108	$	138	$	86	$	17		$	6		$	14
Copper	$	—	$	—	$	—	$	46		$	—		$	—
Other	$	—	$	—	$	2	$	—		$	1		$	—
Exploration	$	22	$	7	$	15	$	—		$	9		$	3
Advanced projects, research and development	$	10	$	2	$	2	$	2		$	23		$	1
Other income, net	$	14	$	13	$	4	$	(48	)	$	1		$	(24	)
Interest expense, net	$	—	$	10	$	—	$	33		$	—		$	1
Pre-tax income (loss) before minority interest and equity income of affiliates	$	119	$	710	$	108	$	170		$	(11	)	$	7
Additions to property, plant and mine development	$	501	$	174	$	115	$	97		$	200		$	8
Total assets from continuing operations	$	2,470	$	1,760	$	1,262	$	2,494		$	914		$	150


	Nine Months Ended September 30, 2006
	Total Operations			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net:
Gold	$	3,125		$	—		$	—	$	(30	)	$	3,095
Copper	$	432		$	—		$	—	$	—		$	432
Cost applicable to sales:
Gold	$	1,564		$	—		$	—	$	—		$	1,564
Copper	$	215		$	—		$	—	$	—		$	215
Depreciation, depletion and amortization:
Gold	$	369		$	—		$	—	$	—		$	369
Copper	$	46		$	—		$	—	$	—		$	46
Other	$	3		$	—		$	14	$	12		$	29
Exploration	$	56		$	63		$	—	$	1		$	120
Advanced projects, research and development	$	40		$	—		$	7	$	21		$	68
Other income, net	$	(40	)	$	3		$	361	$	62		$	386
Interest expense, net	$	44		$	—		$	—	$	26		$	70
Pre-tax income (loss) before minority interest and equity income of affiliates	$	1,103		$	(63	)	$	337	$	(113	)	$	1,265
Additions to property, plant and mine development	$	1,095		$	—		$	5	$	9		$	1,109
Total assets from continuing operations	$	9,050		$	1,141		$	3,192	$	1,702		$	15,085
Assets held for sale												$	36

Total assets												$	15,121

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2005
	Nevada			Yanacocha		Australia/ New Zealand		Batu Hijau			Africa			Other Operations
Sales, net:
Gold	$	762		$	976	$	523	$	232		$	—		$	96
Copper	$	—		$	—	$	—	$	504		$	—		$	—
Cost applicable to sales:
Gold	$	585		$	334	$	383	$	80		$	—		$	55
Copper	$	—		$	—	$	—	$	226		$	—		$	—
Depreciation, depletion and amortization:
Gold	$	92		$	148	$	87	$	25		$	—		$	14
Copper	$	—		$	—	$	—	$	67		$	—		$	—
Other	$	—		$	—	$	2	$	—		$	1		$	2
Exploration	$	14		$	5	$	15	$	—		$	6		$	3
Advanced projects, research and development	$	—		$	2	$	—	$	—		$	13		$	5
Other income, net	$	4		$	2	$	7	$	3		$	—		$	—
Interest expense, net	$	—		$	—	$	—	$	32		$	—		$	—
Pre-tax income (loss) before minority interest and equity income of affiliates	$	64		$	485	$	40	$	309		$	(21	)	$	(19	)
Amortization of deferred (advanced) stripping, net	$	(48	)	$	—	$	1	$	(1	)	$	—		$	(2	)
Additions to property, plant and mine development	$	324		$	169	$	72	$	52		$	206		$	24
Total assets from continuing operations	$	1,961		$	1,421	$	1,063	$	2,311		$	575		$	220


	Nine Months Ended September 30, 2005
	Total Operations			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net:
Gold	$	2,589		$	—		$	—	$	(33	)	$	2,556
Copper	$	504		$	—		$	—	$	—		$	504
Cost applicable to sales:
Gold	$	1,437		$	—		$	—	$	—		$	1,437
Copper	$	226		$	—		$	—	$	—		$	226
Depreciation, depletion and amortization:
Gold	$	366		$	—		$	—	$	—		$	366
Copper	$	67		$	—		$	—	$	—		$	67
Other	$	5		$	3		$	15	$	10		$	33
Exploration	$	43		$	60		$	—	$	—		$	103
Advanced projects, research and development	$	20		$	—		$	12	$	15		$	47
Other income, net	$	16		$	3		$	115	$	43		$	177
Interest expense, net	$	32		$	—		$	—	$	43		$	75
Pre-tax income (loss) before minority interest and equity income of affiliates	$	858		$	(60	)	$	80	$	(151	)	$	727
Amortization of deferred (advanced) stripping, net	$	(50	)	$	—		$	—	$	—		$	(50	)
Additions to property, plant and mine development	$	847		$	—		$	3	$	34		$	884
Total assets from continuing operations	$	7,551		$	1,135		$	2,989	$	2,147		$	13,822
Assets held for sale													133

Total assets												$	13,955

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)

(17) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Newmont USA, a 100 percent owned subsidiary of Newmont Mining Corporation, has fully and unconditionally guaranteed the 5⁷/8% publicly traded notes. The following condensed consolidating financial information is provided for Newmont USA, as guarantor, and for Newmont Mining Corporation, as issuer, as an alternative to providing separate financial statements for the guarantor. The accounts of Newmont Mining Corporation are presented using the equity method of accounting for investments in subsidiaries.


	Three Months Ended September 30, 2006
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	755		$	254		$	—		$	1,009
Sales - copper, net		—			93			—			—			93

		—			848			254			—			1,102

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			381			146			(2	)		525
Copper		—			66			—			—			66
Depreciation, depletion and amortization		—			114			39			—			153
Exploration		—			31			10			—			41
Advanced projects, research and development		—			11			8			—			19
General and administrative		—			31			(4	)		2			29
Other		—			36			2			(1	)		37

		—			670			201			(1	)		870

Other income (expense)
Other income (expense), net		82			(17	)		253			(1	)		317
Interest income - intercompany		31			23			—			(54	)		—
Interest expense - intercompany		(2	)		—			(52	)		54			—
Interest expense, net		(4	)		(22	)		(2	)		—			(28	)

		107			(16	)		199			(1	)		289

Income from continuing operations before taxes, minority interest and equity income of affiliates		107			162			252			—			521
Income tax (expense) benefit		(52	)		(8	)		(146	)		—			(206	)
Minority interest in income of subsidiaries		—			(52	)		(5	)		5			(52	)
Equity income (loss) of affiliates		143			(1	)		10			(151	)		1

Income from continuing operations		198			101			111			(146	)		264
Loss from discontinued operations		—			(66	)		—			—			(66	)

Net income (loss)	$	198		$	35		$	111		$	(146	)	$	198

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Three Months Ended September 30, 2005
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	759		$	155		$	—		$	914
Sales - copper, net		—			231			—			—			231

		—			990			155			—			1,145

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			386			116			—			502
Copper		—			86			—			—			86
Depreciation, depletion and amortization		—			125			30			—			155
Exploration		—			26			13			—			39
Advanced projects, research and development		—			9			9			—			18
General and administrative		—			31			2			(1	)		32
Other		—			21			(1	)		—			20

		—			684			169			(1	)		852

Other income (expense)
Other income (expense), net		7			14			45			—			66
Interest income, foreign currency exchange and other income - intercompany		28			12			—			(40	)		—
Interest expense - intercompany		(2	)		—			(38	)		40			—
Interest expense, net		(10	)		(12	)		(1	)		—			(23	)

		23			14			6			—			43

Income from continuing operations before taxes, minority interest and equity income of affiliates		23			320			(8	)		1			336
Income tax (expense) benefit		(26	)		(70	)		—			—			(96	)
Minority interest in income of subsidiaries		—			(116	)		—			1			(115	)
Equity income (loss) of affiliates		129			—			27			(156	)		—

Income from continuing operations		126			134			19			(154	)		125
Loss from discontinued operations		—			(1	)		2			—			1

Net income (loss)	$	126		$	133		$	21		$	(154	)	$	126

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2006
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	2,482		$	613		$	—		$	3,095
Sales - copper, net		—			432			—			—			432

		—			2,914			613			—			3,527

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			1,184			386			(6	)		1,564
Copper		—			215			—			—			215
Depreciation, depletion and amortization		—			343			101			—			444
Exploration		—			90			30			—			120
Advanced projects, research and development		—			34			34			—			68
General and administrative		—			97			1			5			103
Other		—			54			11			(1	)		64

		—			2,017			563			(2	)		2,578

Other income (expense)
Other income (expense), net		99			(17	)		305			(1	)		386
Interest income - intercompany		90			53			—			(143	)		—
Interest expense - intercompany		(6	)		—			(137	)		143			—
Interest expense, net		(17	)		(47	)		(6	)		—			(70	)

		166			(11	)		162			(1	)		316

Income from continuing operations before taxes, minority interest and equity income of affiliates		166			886			212			1			1,265
Income tax (expense) benefit		(65	)		(255	)		(42	)		—			(362	)
Minority interest in income of subsidiaries		—			(281	)		(15	)		17			(279	)
Equity income (loss) of affiliates		467			(2	)		67			(531	)		1

Income from continuing operations		568			348			222			(513	)		625
Loss from discontinued operations		—			(57	)		—			—			(57	)

Net income (loss)	$	568		$	291		$	222		$	(513	)	$	568

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2005
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	2,063		$	493		$	—		$	2,556
Sales - copper, net		—			504			—			—			504

		—			2,567			493			—			3,060

Costs and expenses
Costs applicable to sales (exclusive of depreciation, depletion and amortization shown separately below)
Gold		—			1,076			367			(6	)		1,437
Copper		—			226			—			—			226
Depreciation, depletion and amortization		—			366			100			—			466
Exploration		—			68			35			—			103
Advanced projects, research and development		—			17			30			—			47
General and administrative		—			88			3			4			95
Other		—			49			12			—			61

		—			1,890			547			(2	)		2,435

Other income (expense)
Other income (expense), net		12			72			93			—			177
Interest income, foreign currency exchange and other income - intercompany		89			33			1			(123	)		—
Interest expense - intercompany		(6	)		—			(117	)		123			—
Interest expense, net		(21	)		(47	)		(7	)		—			(75	)

		74			58			(30	)		—			102

Income from continuing operations before taxes, minority interest and equity income of affiliates		74			735			(84	)		2			727
Income tax (expense) benefit		(19	)		(222	)		50			—			(191	)
Minority interest in income of subsidiaries		—			(251	)		2			1			(248	)
Equity income of affiliates		205			—			57			(259	)		3

Income from continuing operations		260			262			25			(256	)		291
Loss from discontinued operations		—			(1	)		(30	)		—			(31	)

Net income (loss)	$	260		$	261		$	(5	)	$	(256	)	$	260

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	At September 30, 2006
Condensed Consolidating Balance Sheets	Newmont Mining Corporation		Newmont USA			Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
Assets
Cash and cash equivalents	$	1	$	792		$	266	$	—		$	1,059
Marketable securities and other short-term investments		1		213			59		—			273
Trade receivables		—		146			4		—			150
Accounts receivable		1,761		560			703		(2,876	)		148
Inventories		—		308			64		—			372
Stockpiles and ore on leach pads		—		294			42		—			336
Deferred income tax assets		—		119			21		—			140
Other current assets		—		90			25		—			115

Current assets		1,763		2,522			1,184		(2,876	)		2,593
Property, plant and mine development, net		—		4,521			2,041		(15	)		6,547
Investments		—		270			969		—			1,239
Investments in subsidiaries		5,990		4			4,406		(10,400	)		—
Long-term stockpiles and ore on leach pads		—		744			51		—			795
Deferred income tax assets		31		623			160		—			814
Other long-term assets		1,734		1,206			93		(2,831	)		202
Goodwill		—		—			2,895		—			2,895
Assets of operations held for sale		—		36			—		—			36

Total assets	$	9,518	$	9,926		$	11,799	$	(16,122	)	$	15,121

Liabilities
Current portion of long-term debt	$	—	$	154		$	4	$	—		$	158
Accounts payable		50		2,276			800		(2,875	)		251
Employee related benefits		—		133			34		—			167
Derivative instruments		—		452			1		—			453
Other current liabilities		101		348			161		(1	)		609

Current liabilities		151		3,363			1,000		(2,876	)		1,638
Long-term debt		597		1,081			121		—			1,799
Reclamation and remediation liabilities		—		359			124		—			483
Deferred income tax liabilities		53		231			262		25			571
Employee-related benefits		1		260			23		—			284
Other long-term liabilities		263		147			2,885		(2,984	)		311
Liabilities of operations held for sale		—		3			—		—			3

Total liabilities		1,065		5,444			4,415		(5,835	)		5,089

Minority interest in subsidiaries		—		1,038			340		(382	)		996

Stockholders’ equity
Preferred stock		—		—			61		(61	)		—
Common stock		675		—			—		—			675
Additional paid-in capital		6,100		2,220			5,191		(6,828	)		6,683
Accumulated other comprehensive income (loss)		572		(39	)		314		(275	)		572
Retained earnings		1,106		1,263			1,478		(2,741	)		1,106

Total stockholders’ equity		8,453		3,444			7,044		(9,905	)		9,036

Total liabilities and stockholders’ equity	$	9,518	$	9,926		$	11,799	$	(16,122	)	$	15,121

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Continued

(dollars in millions, except per share, per ounce and per pound amounts)


	At December 31, 2005
Condensed Consolidating Balance Sheets	Newmont Mining Corporation			Newmont USA		Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
Assets
Cash and cash equivalents	$	1		$	979	$	102	$	—		$	1,082
Marketable securities and other short-term investments		—			794		23		—			817
Trade receivables		—			93		1		—			94
Accounts receivable		1,733			263		561		(2,422	)		135
Inventories		—			262		42		—			304
Stockpiles and ore on leach pads		—			215		26		—			241
Deferred stripping costs		—			67		11		—			78
Deferred income tax assets		—			139		20		—			159
Other current assets		3			72		15		—			90

Current assets		1,737			2,884		801		(2,422	)		3,000
Property, plant and mine development, net		(11	)		4,078		1,514		—			5,581
Investments		—			198		757		—			955
Investments in subsidiaries		5,180			111		3,979		(9,270	)		—
Long-term stockpiles and ore on leach pads		—			562		37		—			599
Deferred stripping costs		—			92		8		—			100
Deferred income tax assets		12			407		96		—			515
Other long-term assets		1,646			850		188		(2,503	)		181
Goodwill		—			—		2,879		—			2,879
Assets of operations held for sale		—			134		48		—			182

Total assets	$	8,564		$	9,316	$	10,307	$	(14,195	)	$	13,992

Liabilities
Current portion of long-term debt	$	—		$	194	$	1	$	—		$	195
Accounts payable		50			2,165		437		(2,425	)		227
Employee related benefits		—			151		25		—			176
Derivative instruments		—			267		3		—			270
Other current liabilities		38			296		138		(1	)		471

Current liabilities		88			3,073		604		(2,426	)		1,339
Long-term debt		597			1,002		124		—			1,723
Reclamation and remediation liabilities		—			330		112		—			442
Deferred income tax liabilities		52			231