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, 2007

¨	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 433,040,523 shares of common stock outstanding on October 25, 2007 (and 18,805,306 exchangeable shares).

PART I—FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(unaudited, in millions except per share)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Revenues
Sales - gold, net	$	1,099		$	1,009		$	3,104		$	3,095
Sales - copper, net		547			93			1,100			432

		1,646			1,102			4,204			3,527

Costs and expenses
Costs applicable to sales (exclusive of loss on settlement of price-capped forward sales contracts, Midas redevelopment and depreciation, depletion and amortization, shown separately below)
Gold		627			525			1,931			1,564
Copper		111			66			373			215
Loss on settlement of price-capped forward sales contracts (Note 3)		—			—			531			—
Midas redevelopment (Note 4)		10			—			10			—
Depreciation, depletion and amortization		176			149			557			430
Exploration		47			41			132			120
Advanced projects, research and development		16			22			45			61
General and administrative		40			29			113			103
Other expense, net (Note 5)		19			34			93			61

		1,046			866			3,785			2,554

Other income (expense)
Other income, net (Note 6)		35			(9	)		70			(2	)
Interest expense, net		(28	)		(28	)		(77	)		(70	)

		7			(37	)		(7	)		(72	)

Income from continuing operations before income tax, minority interest and equity income of affiliates		607			199			412			901
Income tax expense (Note 9)		(84	)		(106	)		(105	)		(259	)
Minority interest in income of consolidated subsidiaries (Note 10)		(198	)		(52	)		(352	)		(279	)
Equity income of affiliates		—			1			—			1

Income (loss) from continuing operations		325			42			(45	)		364
Income (loss) from discontinued operations (Note 11)		72			156			(1,552	)		204

Net income (loss)	$	397		$	198		$	(1,597	)	$	568

Income per common share (Note 13)
Basic:
Income (loss) from continuing operations	$	0.72		$	0.09		$	(0.10	)	$	0.81
Income (loss) from discontinued operations		0.16			0.35			(3.44	)		0.45

Net income (loss)	$	0.88		$	0.44		$	(3.54	)	$	1.26

Diluted:
Income (loss) from continuing operations	$	0.72		$	0.09		$	(0.10	)	$	0.81
Income (loss) from discontinued operations		0.16			0.35			(3.43	)		0.45

Net income (loss)	$	0.88		$	0.44		$	(3.53	)	$	1.26

Basic weighted-average common shares outstanding		452			450			451			449

Diluted weighted-average common shares outstanding		453			452			453			451

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

(unaudited, in millions)


	At September 30, 2007			At December 31, 2006
ASSETS
Cash and cash equivalents	$	1,053		$	1,166
Marketable securities and other short-term investments (Note 16)		1,085			109
Trade receivables		352			142
Accounts receivable		147			206
Inventories (Note 17)		387			382
Stockpiles and ore on leach pads (Note 18)		395			378
Deferred income tax assets		143			156
Other current assets		130			93

Current assets		3,692			2,632
Property, plant and mine development, net		7,334			6,594
Investments (Note 16)		351			1,319
Long-term stockpiles and ore on leach pads (Note 18)		782			812
Deferred income tax assets		1,004			796
Other long-term assets		200			178
Goodwill		1,320			1,343
Assets of operations held for sale (Note 11)		301			1,927

Total assets	$	14,984		$	15,601

LIABILITIES
Current portion of long-term debt (Note 19)	$	288		$	159
Accounts payable		265			340
Employee-related benefits		148			182
Derivative instruments (Note 12)		––			174
Income and mining taxes		258			351
Other current liabilities (Note 20)		663			515

Current liabilities		1,622			1,721
Long-term debt (Note 19)		2,745			1,752
Reclamation and remediation liabilities (Note 21)		546			528
Deferred income tax liabilities		422			626
Employee-related benefits		250			309
Other long-term liabilities (Note 20)		150			135
Liabilities of operations held for sale (Note 11)		114			95

Total liabilities		5,849			5,166

Commitments and contingencies (Note 25)
Minority interest in subsidiaries		1,506			1,098

STOCKHOLDERS’ EQUITY
Common stock		690			677
Additional paid-in capital		6,708			6,703
Accumulated other comprehensive income		743			673
Retained (deficit) earnings		(512	)		1,284

Total stockholders’ equity		7,629			9,337

Total liabilities and stockholders’ equity	$	14,984		$	15,601

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


	Nine Months Ended September 30,
	2007			2006
Operating activities:
Net (loss) income	$	(1,597	)	$	568
Adjustments to reconcile net (loss) income to net cash from continuing operations:
Depreciation, depletion and amortization		557			430
Revenue from prepaid forward sales obligation		—			(48	)
Loss (income) from discontinued operations		1,552			(204	)
Accretion of accumulated reclamation obligations		29			22
Deferred income taxes		(268	)		(115	)
Minority interest expense		352			279
Gain on asset sales, net		(13	)		(16	)
Hedge (gain) loss, net		(9	)		82
Other operating adjustments and write-downs		87			107
Net change in operating assets and liabilities (Note 22)		(793	)		(382	)

Net cash (used in) provided from continuing operations		(103	)		723
Net cash provided from discontinued operations (Note 11)		96			73

Net cash (used in) provided from operations		(7	)		796

Investing activities:
Additions to property, plant and mine development		(1,162	)		(1,104	)
Investments in marketable debt securities		(206	)		(1,340	)
Proceeds from sale of marketable debt securities		208			1,928
Acquisitions (Note 15)		—			(348	)
Cash received on repayment of Batu Hijau carried interest (Note 10)		161			—
Other		25			19

Net cash used in investing activities of continuing operations		(974	)		(845	)
Net cash provided from investing activities of discontinued operations (Note 11)		123			255

Net cash used in investing activities		(851	)		(590	)

Financing activities:
Proceeds from debt, net		2,728			198
Repayment of debt		(1,651	)		(63	)
Early extinguishment of prepaid forward sales obligation		—			(48	)
Dividends paid to common stockholders		(136	)		(135	)
Dividends paid to minority interests of consolidated subsidiaries		(116	)		(235	)
Proceeds from stock issuance		20			66
Purchase of Company share call options (Note 19)		(366	)		—
Issuance of Company share warrants (Note 19)		248			—
Change in restricted cash and other		7			(11	)

Net cash provided from (used in) financing activities of continuing operations		734			(228	)
Net cash used in financing activities of discontinued operations (Note 11)		—			(7	)

Net cash provided from (used in) financing activities		734			(235	)

Effect of exchange rate changes on cash		11			6

Net change in cash and cash equivalents		(113	)		(23	)
Cash and cash equivalents at beginning of period		1,166			1,082

Cash and cash equivalents at end of period	$	1,053		$	1,059

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

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

(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 for the year ended December 31, 2006, filed February 26, 2007 and Form 8-K, filed October 15, 2007.

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, 2006 and as of December 31, 2006 have been reclassified to conform to the 2007 presentation. The Company has reclassified the balance sheet, income statement and cash flow statement amounts for the Merchant Banking Segment and the Zarafshan-Newmont Joint Venture and Holloway operations from the historical presentation to discontinued operations in the Condensed Consolidated Balance Sheet, Condensed Consolidated Statements of Income (Loss) and Cash Flows for all periods presented.

(2)

ACCOUNTING DEVELOPMENTS

Recently Adopted Pronouncements

Income Taxes

The Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) an interpretation of FASB Statement No. 109, “Accounting for Income Taxes” on January 1, 2007. Refer to Note 9 for a discussion regarding the cumulative effect of adopting FIN 48.

The Company’s continuing practice is to recognize interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. The Company had $25 accrued for interest at January 1, 2007. Of this amount, $13 has been considered in the statement of financial position as part of the cumulative effect adjustment to retained earnings.

Recently Issued Pronouncements

Fair Value Option for Financial Assets and Liabilities

In February 2007, the FASB issued FASB Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“FAS 159”). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of improving financial reporting by mitigating volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of FAS 159 are effective for the Company’s fiscal year ending December 31, 2008. The Company is currently evaluating the impact that this statement will have on the Company’s consolidated financial position, results of operations and disclosures, should the Company elect to measure certain financial instruments at fair value.

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.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

Recent Developments

Accounting for Convertible Debt Instruments

On September 5, 2007, the FASB published Proposed FSP No. APB 14-a, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion.” The proposed FSP applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under SFAS 133. Convertible debt instruments within the scope of the proposed FSP are not addressed by the existing APB 14. The proposed FSP would require that the liability and equity components of convertible debt instruments within the scope of the proposed FSP shall be separately accounted for in a manner that reflects the entity’s nonconvertible debt borrowing rate. This will require an allocation of the convertible debt proceeds between the liability component and the embedded conversion option (i.e., the equity component). The difference between the principal amount of the debt and the amount of the proceeds allocated to the liability component would be reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the effective interest method. If the proposed FSP were to be adopted, the Company estimates that approximately $300 million of debt discount would be recorded and the effective interest rate on its 2014 and 2017 convertible senior notes (Note 19) would increase by approximately 5 percentage points for the non-cash amortization of the debt discount.

(3)

PRICE-CAPPED FORWARD SALES CONTRACTS

In 2001, the Company 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, the Company would realize the lower of the spot price on the delivery date or the capped price, ranging from $381 to $392 per ounce. The forward sales contracts were 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.” The initial fair value of the forward sales contracts was recorded as deferred revenue, and the fair value of these contracts was not included on the Condensed Consolidated Balance Sheets.

In June 2007, the Company paid $578 to eliminate its entire 1.85 million ounce price-capped forward sales contracts. The Company reported a $531 pre-tax loss on the early settlement of the contracts, after a $47 reversal of previously recognized deferred revenue.

(4)

MIDAS REDEVELOPMENT

On June 19, 2007, an accident occurred at the Midas mine in Nevada, which resulted in suspension of operations at the mine to initiate rescue and subsequent recovery efforts. As a result, the Mine Safety and Health Administration (“MSHA”) issued an order requiring operations to temporarily cease at the mine. During the third quarter of 2007, activities were undertaken, at the direction of MSHA, to regain entry into the mine in order to ultimately resume commercial production. The redevelopment and holding costs of $10 in the three and nine months ended September 30, 2007 included access development, inspection, preventative repairs and road and mill maintenance.

(5)

OTHER EXPENSE, NET


	Three Months Ended September 30,					Nine Months Ended September 30,
	2007		2006			2007		2006
Reclamation and remediation	$	2	$	4		$	20	$	7
Pension settlement loss (Note 7)		3		—			16		—
Buyat Bay		2		6			10		17
Western Australia power plant		1		(3	)		9		(3	)
Australian office relocation		1		—			6		3
Peruvian royalty		1		19			5		19
Other		9		8			27		18

	$	19	$	34		$	93	$	61

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(6)

OTHER INCOME, NET


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Interest income	$	11		$	16		$	34		$	52
Foreign currency exchange gain, net		14			2			17			11
Gain on sale of other assets, net		9			7			13			16
Gain (loss) on ineffective portion of derivative instruments, net		1			(1	)		1			(60	)
Income from development projects, net		—			5			—			14
Loss on early retirement of debt		—			(40	)		—			(40	)
Other		—			2			5			5

	$	35		$	(9	)	$	70		$	(2	)


(7) EMPLOYEE PENSION AND OTHER BENEFIT PLANS

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Pension benefit costs, net
Service cost	$	5		$	3		$	15		$	11
Interest cost		6			6			18			17
Expected return on plan assets		(5	)		(4	)		(16	)		(13	)
Amortization of prior service cost		—			—			1			1
Amortization of loss		5			2			21			6

	$	11		$	7		$	39		$	22


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Other benefit costs, net
Service cost	$	1		$	1		$	4		$	4
Interest cost		1			1			4			4

	$	2		$	2		$	8		$	8


Pension settlement losses related to senior management retirements of $3 and $16 were recognized in the three and nine months ended September 30, 2007, respectively, and included in Other expense, net. (8) STOCK BASED COMPENSATION The Company recognized stock options and other stock based compensation as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Stock options	$	4		$	6		$	14		$	21
Restricted stock		—			—			3			—
Restricted stock units		—			—			1			—
Deferred stock awards		3			2			7			6

	$	7		$	8		$	25		$	27

For the three months ended September 30, 2007 and 2006, no stock options were granted. For the nine months ended September 30, 2007 and 2006, 1,066,500 and 1,238,750 stock options, respectively, were granted at the weighted-average exercise price of $42 and $58, respectively. At September 30, 2007, there was $16 of unrecognized compensation cost related to unvested stock options. This cost is expected to be recognized over a weighted-average period of approximately 2 years. The total intrinsic value of options exercised in the third quarter of 2007 and 2006 was $4 and $10, respectively. The total intrinsic value of options exercised in the nine month period of 2007 and 2006 was $10 and $48, respectively. During the nine months ended September 30, 2007 and 2006, 1,150,551 and 1,153,974 stock options vested, respectively, at the weighted-average fair market value of $47 and $37, respectively.

For the three months ended September 30, 2007 and 2006, no shares of restricted stock were granted. For the nine months ended September 30, 2007 and 2006, 175,114 and 102,491 shares of restricted stock, respectively, were granted and issued, at the weighted-average fair market value of $45 and $58, respectively.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

For the three months ended September 30, 2007 and 2006, no shares of restricted stock units were granted. For the nine months ended September 30, 2007 and 2006, 20,212 and 19,181 shares of restricted stock units, respectively, were granted, at the weighted-average fair market value of $45 and $58, respectively, per underlying share of the Company’s common stock.

For the three months ended September 30, 2007 and 2006, no deferred stock awards were granted. For the nine months ended September 30, 2007 and 2006, 365,776 and 237,946 deferred stock awards, respectively, were granted.

(9)

INCOME TAXES

The Company operates in numerous countries around the world and accordingly is subject to, and pays, annual income taxes under the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with the local government, and others are defined by the general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and to pay the taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time the Company is subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved. The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” (“FIN 48”) an interpretation of FASB Statement No. 109, “Accounting for Income Taxes” on January 1, 2007. FIN 48 clarifies the accounting and reporting for uncertainties in income tax law. The interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. Through September 30, 2007, as a result of this adoption, the Company recognized a $97 increase in its net liability for unrecognized income tax benefits. Through September 30, 2007, the beginning balance of net deferred tax assets was reduced by $45 (primarily, as a result of utilization of foreign tax credits and net operating losses as part of the FIN 48 measurement process, offset, in part, by the impact of the interaction of the Alternative Minimum Tax rules), goodwill increased by $5, minority interest increased by $4, and retained earnings decreased by $108. Also through September 30, 2007, the Company reclassified $16 of income tax liabilities from current to non-current liabilities because payment of cash is not anticipated within one year of the balance sheet date. As of September 30, 2007, the Company had $247 of total gross unrecognized tax benefits. Of this, $108 represents the amount of net unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various states and in foreign jurisdictions. With limited exception, the Company is no longer subject to U.S. federal, state and local income or non-U.S. income tax audits by taxing authorities for years through 1999. As a result of statute of limitations that will begin to expire within the next 12 months, the Company believes that it is reasonably possible that the total amount of unrecognized tax benefit will decrease between $15 to $25.

In December 2006, the Company entered into an in-principle heads of agreement with the Australian Taxation Office. The heads of agreement specifies the terms of a proposed settlement of the outstanding audit issues relating to Normandy for the tax years 1994-1999. The issues relate to years before the Company acquired Normandy. At the date of the business combination, Normandy had recorded no income tax liability with respect to the tax positions taken in reporting certain transactions, therefore the Company’s initial best estimate of the income tax contingency relating to these issues was recorded as a tax liability at the date of acquisition, February 15, 2002, by increasing the purchase price of Normandy. At December 31, 2006, the long-term income tax liability balance relating to this proposed settlement was reclassified to current income taxes payable. The $276 (A$336) income tax liability was paid in the second quarter of 2007. On July 13, 2007, the Company received a closure letter from the Australian Tax Office stating that all audit issues for the tax years 1994-1999 are settled.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(10)

MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES

Newmont has a 45% ownership interest in the Batu Hijau mine, held through a partnership (“NTP”) with an affiliate of Sumitomo Corporation of Japan. Newmont has a 56.25% interest in NTP and the Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 80% of P.T. Newmont Nusa Tenggara (“PTNNT”), the Indonesian subsidiary that owns the Batu Hijau mine. Newmont identified NTP as a Variable Interest Entity and has fully consolidated Batu Hijau in its consolidated financial statements since January 1, 2004. The remaining 20% interest in PTNNT is owned by P.T. Pukuafa Indah (“PTPI”), an unrelated Indonesian company. Because PTPI’s interest was a carried interest, and because PTPI had been advanced a loan by NTP, Newmont reported a 52.875% economic interest in Batu Hijau, which reflected its actual economic interest in the mine until such time as the loan was fully repaid (including accrued interest). On May 25, 2007, PTPI fully repaid the loan (including accrued interest) from NTP. As a result of the loan repayment, Newmont’s economic interest in Batu Hijau was reduced from 52.875% to 45% and the Company recorded a net charge of $25 (after-tax) against Minority interest expense in the second quarter of 2007.

(11)

DISCONTINUED OPERATIONS

Discontinued operations include the Company’s Merchant Banking Segment, its 50% interest in the Zarafshan-Newmont Joint Venture (“ZNJV”), expropriated by the Uzbekistan government in August 2006, and the Holloway mine sold in November 2006.

During June 2007, Newmont’s Board of Directors approved a plan to cease Merchant Banking activities. Merchant Banking previously provided advisory services to assist in managing the Company’s portfolio of operating and property interests. Merchant Banking was also engaged in developing value optimization strategies for operating and non-operating assets, business development activities, merger and acquisition analysis and negotiations, monetizing inactive exploration properties, capitalizing on proprietary technology and know-how and acting as an internal resource for other corporate groups to improve and maximize business outcomes. As a result of the Board’s approval of management’s plan to cease Merchant Banking activities, the Company recorded a $1,665 non-cash charge to impair the goodwill associated with the Merchant Banking Segment in the second quarter of 2007. The Company has decided to dispose of its royalty portfolio and a portion of its existing equity investments within the next nine months and will not make further investments in equity securities that do not support its core gold mining business.

During July 2007, the Company and certain Uzbekistan parties settled a dispute involving ZNJV. The Company received proceeds of $80 and recognized a pre-tax gain of $77 in the third quarter of 2007. Under the agreements, the Company’s interest in ZNJV transferred to the Uzbekistan parties.

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 Income (loss) from discontinued operations in the Condensed Consolidated Statements of Income (Loss) for all periods presented. The Condensed Consolidated Statements of Cash Flows have been reclassified for discontinued operations for all periods presented.

The following table details selected financial information included in Income (loss) from discontinued operations in the Condensed Consolidated Statements of Income (Loss):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Sales - gold, net	$	—		$	5		$	—		$	52

Income from operations	$	34		$	25		$	116		$	74
Gain on sale of Alberta oil sands project		—			266			—			266
Gain on sale of Martabe project		—			30			—			30
Loss on impairment		—			(101	)		(1,665	)		(101	)
Gain on sale of ZNJV		77			—			77			—

Pre-tax gain (loss)		111			220			(1,472	)		269
Income tax expense		(39	)		(64	)		(80	)		(65	)

Income (loss) from discontinued operations	$	72		$	156		$	(1,552	)	$	204

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

The major classes of Assets and Liabilities of operations held for sale in the Condensed Consolidated Balance Sheets are as follows:


	At September 30, 2007		At December 31, 2006
Assets:
Accounts receivable	$	32	$	10
Property, plant and mine development		262		253
Deferred income tax assets		7		3
Goodwill		—		1,661

Total assets of operations held for sale	$	301	$	1,927

Liabilities:
Accounts payable	$	1	$	—
Income and mining taxes		60		13
Deferred income tax liabilities		49		77
Other liabilities		4		5

Total liabilities of operations held for sale	$	114	$	95

The following table details selected financial information included in Net cash provided from discontinued operations and Net cash provided from (used in) investing and financing activities of discontinued operations:


	Nine Months Ended September 30,
	2007			2006
Net cash provided from discontinued operations:
(Loss) income from discontinued operations	$	(1,552	)	$	204
Depreciation, depletion and amortization		8			18
Deferred income taxes		41			(41	)
Gain on asset sales, net		(77	)		(296	)
Gain on investments, net		(39	)		(4	)
Goodwill impairment		1,665			—
Other operating adjustments and write-downs		12			95
Decrease in net operating assets		38			97

	$	96		$	73

Net cash provided from (used in) investing activities of discontinued operations:
Additions to property, plant and mine development	$	(2	)	$	(11	)
Investments in marketable equity securities		(37	)		(49	)
Proceeds from sale of marketable equity securities		85			6
Proceeds from asset sales, net		77			313
Other		—			(4	)

	$	123		$	255

Net cash used in financing activities of discontinued operations:
Repayment of debt	$	—		$	(7	)

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(12)

SALES CONTRACTS, COMMODITY AND DERIVATIVE INSTRUMENTS

For the three months ended September 30, 2007 and 2006, gains of $1 and losses 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, 2007 and 2006, gains of $1 and losses of $60, 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 gain of approximately $9. The maximum period over which hedged forecasted transactions are expected to occur is 4 years.

Newmont had the following derivative contracts outstanding at September 30, 2007:


	Expected Maturity Date										Fair Value
	2007		2008		2009		2010		Total/ Average		At September 30, 2007		At December 31, 2006
IDR:
$ (millions)	$	28	$	59	$	—	$	—	$	87	$	1	$	4
Average rate (IDR/$)		9,351		9,399		—		—		9,384
A$:
$ (millions)	$	11	$	45	$	44	$	28	$	128	$	8	$	—
Average rate ($/A$)		0.8175		0.8090		0.7960		0.7834		0.7997

Newmont had copper collar contracts with a fair value of $(173) and gold put option contracts of $(1) outstanding at December 31, 2006. Final delivery under the copper collar contracts occurred in February 2007.

Australian Dollar Fixed Forward Contracts

During the third quarter of 2007, Newmont began a layered fixed forward contract program to hedge a portion of its A$ denominated operating expenditures. The hedges include a series of fixed forward contracts with expiration dates ranging up to three years.

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.

At September 30, 2007 and 2006, Batu Hijau had the following gross revenues (before treatment and refining charges) subject to final price adjustments:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Gross revenue subject to final price adjustments
Copper	$	594		$	309		$	706		$	405
Gold	$	31		$	9		$	39		$	19

The average final price adjustments realized were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Average final price adjustments
Copper		3	%		26	%		3	%		39	%
Gold		4	%		(4	)%		3	%		4	%

Interest Rate Swap Contracts

At September 30, 2007, Newmont had $100 fixed to floating swap contracts designated as a hedge against a portion of its $275 8 5/8% debentures expiring in 2011. Under the hedge contract terms, the Company receives fixed-rate interest payments at 8.625% and pays floating-rate interest amounts based on periodic London Interbank Offered Rate (“LIBOR”) settings plus a spread, ranging from 2.60% to 3.49%. For the three and nine months ended September 30, 2007 and 2006, these transactions had an insignificant impact on interest expense. The fair value of the interest rate swaps was $1 at September 30, 2007 and December 31, 2006.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(13)

INCOME (LOSS) PER COMMON SHARE

Basic income (loss) 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 (loss) 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,
	2007			2006			2007			2006
Numerator:
Income (loss) from continuing operations	$	325		$	42		$	(45	)	$	364
Income (loss) from discontinued operations		72			156			(1,552	)		204

Net income (loss)	$	397		$	198		$	(1,597	)	$	568

Denominator:
Basic		452			450			451			449
Effect of employee stock-based awards		1			2			2			2

Diluted		453			452			453			451

Income (loss) per common share
Basic:
Income (loss) from continuing operations	$	0.72		$	0.09		$	(0.10	)	$	0.81
Income (loss) from discontinued operations		0.16			0.35			(3.44	)		0.45

Net income (loss)	$	0.88		$	0.44		$	(3.54	)	$	1.26

Diluted:
Income (loss) from continuing operations	$	0.72		$	0.09		$	(0.10	)	$	0.81
Income (loss) from discontinued operations		0.16			0.35			(3.43	)		0.45

Net income (loss)	$	0.88		$	0.44		$	(3.53	)	$	1.26


Options to purchase 2.1 million shares of common stock at average exercise prices of $51.42 and $52.45 were outstanding at September 30, 2007 and 2006, respectively, but were not included in the computation of diluted weighted average number of common shares because their effect would have been anti-dilutive. (14) COMPREHENSIVE INCOME

	Three Months Ended September 30,						Nine Months Ended September 30,
	2007			2006			2007			2006
Net income (loss)	$	397		$	198		$	(1,597	)	$	568
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on marketable equity securities (Note 16)		(75	)		(83	)		(44	)		172
Foreign currency translation adjustments		20			7			85			26
Change in pension and other benefit liabilities:
Net amount reclassified to income		5			—			22			—
Change in fair value of cash flow hedge instruments:
Net change from periodic revaluations		5			(18	)		9			(198	)
Net amount reclassified to income		(1	)		64			(2	)		194

Net unrecognized gain (loss) on derivatives		4			46			7			(4	)

		(46	)		(30	)		70			194

Comprehensive income (loss)	$	351		$	168		$	(1,527	)	$	762

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(15)

ACQUISITIONS

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

In March 2006, Newmont acquired Newcrest Mining Limited’s 22.22% interest in the Boddington unincorporated joint venture for total consideration of $173, bringing its interest in the project to 66.67%.

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

(16)

INVESTMENTS


	At September 30, 2007									At December 31, 2006
			Unrealized									Unrealized
	Cost/Equity Basis		Gain		Loss			Fair/Equity Value		Cost/Equity Basis		Gain		Loss			Fair/Equity Value
Current:
Marketable debt securities:
Auction rate securities	$	8	$	—	$	(1	)	$	7	$	10	$	—	$	—		$	10

Marketable equity securities:
Canadian Oil Sands Trust		308		710		—			1,018		—		—		—			—
Agincourt Resources		—		—		—			—		37		10		—			47
Other		16		34		—			50		10		33		—			43

		324		744		—			1,068		47		43		—			90

Other investments, at cost		10		—		—			10		9		—		—			9

	$	342	$	744	$	(1	)	$	1,085	$	66	$	43	$	—		$	109

Long-term:
Marketable equity securities:
Canadian Oil Sands Trust	$	—	$	—	$	—		$	—	$	265	$	603	$	—		$	868
Gabriel Resources, Ltd.		111		7		—			118		69		104		—			173
Shore Gold, Inc.		104		—		(53	)		51		90		—		—			90
Miramar Mining Corp.		32		55		—			87		28		57		—			85
Other		25		11		(2	)		34		34		17		(4	)		47

		272		73		(55	)		290		486		781		(4	)		1,263

Other investments, at cost		12		—		—			12		12		—		—			12

Investment in affiliates:
European Gold Refineries		27		—		—			27		17		—		—			17
AGR Matthey JV		17		—		—			17		16		—		—			16
Regis Resources NL		5		—		—			5		11		—		—			11

		49		—		—			49		44		—		—			44

	$	333	$	73	$	(55	)	$	351	$	542	$	781	$	(4	)	$	1,319

During the third quarter of 2007, Newmont sold shares of Queenston Mining, Inc. and other marketable equity securities recognizing a gain of $3. Newmont recognized a $6 and $10 impairment of its investment in Southwestern Resources for an other-than-temporary decline in value of marketable equity securities in the three and nine months ended September 30, 2007, respectively. During the nine month period of 2007, the unrealized value of the Company’s investments in marketable equity securities decreased by $58, primarily related to a decline in value of Shore Gold, Inc. and Gabriel Resources, Ltd.

In June 2007, the Board of Directors of Newmont approved a plan to discontinue its Merchant Banking Segment. Specifically, the Company has decided to dispose of a portion of its existing equity investments within the next twelve months and not to make further investments in equity securities that do not support its core gold mining business. As a result, Newmont’s investment in Canadian Oil Sands Trust has been reclassified to current. In addition, the realized investment gains and impairments have been reclassified to Income (loss) from discontinued operations on the Condensed Consolidated Statements of Income (Loss). For more information on the discontinued operation of the Merchant Banking Segment, see Note 11 to the Condensed Consolidated Financial Statements.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(17)

INVENTORIES


	At September 30, 2007		At December 31, 2006
In-process	$	63	$	61
Concentrate		14		6
Precious metals		16		43
Materials, supplies and other		294		272

	$	387	$	382

(18)

STOCKPILES AND ORE ON LEACH PADS


	At September 30, 2007		At December 31, 2006
Current:
Stockpiles	$	212	$	216
Ore on leach pads		183		162

	$	395	$	378

Long-term:
Stockpiles	$	530	$	527
Ore on leach pads		252		285

	$	782	$	812

(19)

DEBT


	At September 30, 2007				At December 31, 2006
	Current		Non-Current		Current		Non-Current
Sale-leaseback of refractory ore treatment plant	$	22	$	213	$	21	$	235
Corporate revolving credit facility		—		20		—		—
5 7/8% notes, net of discount		—		597		—		597
8 5/8% debentures, net of discount		—		217		—		217
2014 convertible senior notes		—		575		—		—
2017 convertible senior notes		—		575		—		—
Newmont Australia 7 5/8% guaranteed notes, net of premium		119		—		—		120
PTNNT project financing facility		87		350		87		393
PTNNT shareholder loan		36		—		36		—
Yanacocha credit facility		14		79		10		90
Yanacocha bonds		—		100		—		100
Project financings, capital leases and other		10		19		5		—

	$	288	$	2,745	$	159	$	1,752

Scheduled minimum debt repayments at September 30, 2007 are $85 for the remainder of 2007, $253 in 2008, $136 in 2009, $138 in 2010, $321 in 2011 and $2,100 thereafter.

During July 2007, the Company completed a private offering of $1,150 convertible senior notes due 2014 and 2017, each in the amount of $575. The 2014 Notes, maturing on July 15, 2014, will pay interest semi-annually at a rate of 1.25% per annum, and the 2017 Notes, maturing on July 15, 2017, will pay interest semi-annually at a rate of 1.625% per annum. The Notes are convertible, at the holder’s option, equivalent to a conversion price of $46.21 per share of common stock. Upon conversion, the principle amount and all accrued interest will be repaid in cash and any conversion premium will be settled in shares of our common stock or, at our election, cash or any combination of cash and shares of our common stock. The Company does not have an option to redeem the notes prior to their applicable stated maturity date. The net proceeds from the offering, after expenses, were approximately $1,126.

In connection with the convertible senior notes offering, the Company entered into convertible note hedge transactions and warrant transactions (“Call Spread Transactions”). These transactions included the purchase of call options and the sale of warrants. The purchased call options cover, in the aggregate and subject to customary anti-dilution adjustments, 24,887,956 shares of the Company’s common stock, par value $1.60 per share. The Company sold warrants to purchase, in the aggregate and subject to customary anti-dilution adjustments, 24,887,956 shares of common stock at a price of $60.27 per share. In most cases, the warrants may not be exercised prior to the maturity of the notes. As a result of the call option and warrant transactions, the conversion price of $46.21 was effectively increased to $60.27. The aggregate cost to the Company of the purchased call options was $366, partially offset by $248 that the Company received from the sale of the warrants. The Company has analyzed the Call Spread Transactions

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

under EITF Issue No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock,” and other relevant literature, and determined that they meet the criteria for classification as equity transactions. As a result, the Company recorded the purchase of the call options as a reduction in paid-in capital and the proceeds of the warrants as an addition to paid-in capital, and the Company will not recognize subsequent changes in fair value of the agreements.

Also in connection with the convertible senior notes offering, the Company entered into a Registration Rights Agreement dated as of July 17, 2007 (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed to file a shelf registration statement covering resales of the convertible senior notes and the shares of common stock issuable upon conversion of the notes. On October 15, 2007, the Company filed the registration statement with the SEC, and it became effective immediately upon filing. On October 16, 2007, the Company filed a prospectus supplement naming the selling security holders eligible to resell notes and common stock under the shelf registration statement. The Company is required to file amendments and supplements to the shelf registration statement from time to time to update the identification of selling security holders.

Pursuant to the Registration Rights Agreement, the Company agreed that we would, at our cost and subject to certain rights to suspend use of the shelf registration statement, use commercially reasonable efforts to keep the shelf registration statement effective for a period of two years after the closing of the offering of the notes or until the earlier of (i) the sale or transfer pursuant to a shelf registration statement of all of the notes and common stock issuable upon conversion of the notes, (ii) the date when holders (other than holders that are affiliates of the Company) of the notes and common stock issuable upon conversion of the notes are able to sell all such securities immediately without restriction, and (iii) the date on which all of the notes have been converted or all of the notes and common stock issuable upon conversion of the notes otherwise cease to be outstanding. In the event that the shelf registration statement is not effective for reasons other than the Company’s right to suspend its use, additional interest will accrue at a rate per year equal to 0.25% for the first 90 days after the occurrence of the event and 0.50% after the first 90 days until an effective registration statement is re-established. The Company expects that the shelf registration statement will remain effective for the required period of time and accordingly, has not recorded a liability for potential payments resulting from the additional interest provisions of the Registration Rights Agreement.

(20)

OTHER LIABILITIES


	At September 30, 2007		At December 31, 2006
Other current liabilities:
Accrued capital expenditures	$	173	$	128
Deferred income tax liabilities		133		9
Accrued operating costs		132		156
Reclamation and remediation liabilities		89		77
Interest		53		34
Royalties		29		39
Taxes other than income and mining		27		18
Deferred revenue		4		9
Other		23		45

	$	663	$	515


	At September 30, 2007		At December 31, 2006
Other long-term liabilities:
Income taxes	$	114	$	54
Deferred revenue from the sale of future production		—		47
Other		36		34

	$	150	$	135

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(21)

RECLAMATION AND REMEDIATION LIABILITIES (ASSET RETIREMENT OBLIGATIONS)

At September 30, 2007 and December 31, 2006, $524 and $520, 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, 2007 and December 31, 2006, $111 and $85, 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,
	2007			2006
Balance at beginning of period	$	605		$	505
Additions, changes in estimates and other		38			51
Liabilities settled		(37	)		(42	)
Accretion expense		29			22

Balance at end of period	$	635		$	536

The current portions of Reclamation and remediation liabilities of $89 and $77 at September 30, 2007 and December 31, 2006, respectively, are included in Other current liabilities.

(22)

NET CHANGE IN OPERATING ASSETS AND LIABILITIES

Net cash (used in) provided from operating activities attributable to the net change in operating assets and liabilities is composed of the following:


	Nine Months Ended September 30,
	2007			2006
Increase in operating assets:
Trade and accounts receivable	$	(152	)	$	(52	)
Inventories, stockpiles and ore on leach pads		(38	)		(323	)
Other assets		(4	)		(49	)
(Decrease) increase in operating liabilities:
Accounts payable and other accrued liabilities		(562	)		86
Reclamation liabilities		(37	)		(44	)

	$	(793	)	$	(382	)

The decrease in accounts payable and other accrued liabilities includes $276 from the settlement of pre-acquisition Australian income taxes of Normandy and $174 from the final settlement of copper collar contracts.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(23)

SEGMENT INFORMATION

The Company has reclassified its segment presentation to eliminate the Merchant Banking segment for all periods presented (Notes 1 and 11). Financial information relating to Newmont’s segments is as follows:


	Three Months Ended September 30, 2007
	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau		Africa		Other Operations
Sales, net:
Gold	$	392		$	245		$	219		$	140	$	76	$	27
Copper	$	—		$	—		$	—		$	547	$	—	$	—
Cost applicable to sales:
Gold	$	249		$	129		$	153		$	29	$	51	$	16
Copper	$	—		$	—		$	—		$	111	$	—	$	—
Midas redevelopment	$	10		$	—		$	—		$	—	$	—	$	—
Depreciation, depletion and amortization:
Gold	$	48		$	42		$	36		$	5	$	11	$	4
Copper	$	—		$	—		$	—		$	24	$	—	$	—
Other	$	—		$	—		$	—		$	—	$	—	$	—
Exploration	$	—		$	—		$	—		$	—	$	—	$	—
Advanced projects, research and development	$	1		$	2		$	2		$	1	$	4	$	—
Other income, net	$	4		$	3		$	(1	)	$	1	$	1	$	8
Interest expense, net	$	—		$	1		$	(2	)	$	9	$	—	$	1
Pre-tax income (loss) before minority interest and equity income of affiliates	$	87		$	68		$	22		$	507	$	11	$	18
Equity income of affiliates	$	—		$	—		$	(3	)	$	—	$	—	$	—
Capital expenditures	$	176		$	67		$	144		$	19	$	38	$	4

	Three Months Ended September 30, 2007
	Total Operations			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	1,099		$	—		$	—		$	1,099
Copper	$	547		$	—		$	—		$	547
Cost applicable to sales:
Gold	$	627		$	—		$	—		$	627
Copper	$	111		$	—		$	—		$	111
Midas redevelopment	$	10		$	—		$	—		$	10
Depreciation, depletion and amortization:
Gold	$	146		$	—		$	—		$	146
Copper	$	24		$	—		$	—		$	24
Other	$	—		$	—		$	6		$	6
Exploration	$	—		$	47		$	—		$	47
Advanced projects, research and development	$	10		$	—		$	6		$	16
Other income, net	$	16		$	—		$	19		$	35
Interest expense, net	$	9		$	—		$	19		$	28
Pre-tax income (loss) before minority interest and equity income of affiliates	$	713		$	(48	)	$	(58	)	$	607
Equity income of affiliates	$	(3	)	$	—		$	3		$	—
Capital expenditures	$	448		$	—		$	1		$	449

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, 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	$	—	$	—		$	—		$	—		$	—	$	—
Advanced projects, research and development	$	4	$	1		$	2		$	2		$	6	$	—
Other income, net	$	4	$	4		$	4		$	1		$	1	$	3
Interest expense, net	$	—	$	9		$	—		$	11		$	—	$	1
Pre-tax income (loss) before minority interest and equity income of affiliates	$	48	$	161		$	65		$	13		$	16	$	27
Equity income of affiliates	$	—	$	—		$	—		$	—		$	—	$	—
Capital expenditures	$	211	$	61		$	53		$	13		$	65	$	1

	Three Months Ended September 30, 2006
	Total Operations		Exploration			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	$	—		$	3		$	4
Exploration	$	—	$	41		$	—		$	41
Advanced projects, research and development	$	15	$	—		$	7		$	22
Other income, net	$	17	$	1		$	(27	)	$	(9	)
Interest expense, net	$	21	$	—		$	7		$	28
Pre-tax income (loss) before minority interest and equity income of affiliates	$	330	$	(40	)	$	(91	)	$	199
Equity income of affiliates	$	—	$	—		$	1		$	1
Capital expenditures	$	404	$	—		$	—		$	404

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, 2007
	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau		Africa		Other Operations
Sales, net:
Gold	$	1,102		$	750		$	662		$	255	$	239	$	95
Copper	$	—		$	—		$	—		$	1,100	$	—	$	—
Cost applicable to sales:
Gold	$	783		$	403		$	480		$	77	$	141	$	47
Copper	$	—		$	—		$	—		$	373	$	—	$	—
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	—		$	—	$	—	$	—
Midas redevelopment	$	10		$	—		$	—		$	—	$	—	$	—
Depreciation, depletion and amortization:
Gold	$	169		$	124		$	105		$	16	$	34	$	12
Copper	$	—		$	—		$	—		$	78	$	—	$	—
Other	$	—		$	—		$	2		$	—	$	—	$	—
Exploration	$	—		$	—		$	—		$	—	$	—	$	—
Advanced projects, research and development	$	3		$	6		$	4		$	1	$	13	$	—
Other income, net	$	7		$	14		$	(10	)	$	6	$	2	$	9
Interest expense, net	$	—		$	3		$	—		$	29	$	1	$	1
Pre-tax income (loss) before minority interest and equity income of affiliates	$	131		$	214		$	42		$	784	$	51	$	55
Equity income of affiliates	$	—		$	—		$	(5	)	$	—	$	—	$	—
Capital expenditures	$	453		$	181		$	371		$	43	$	94	$	12

	Nine Months Ended September 30, 2007
	Total Operations			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	3,103		$	—		$	1		$	3,104
Copper	$	1,100		$	—		$	—		$	1,100
Cost applicable to sales:
Gold	$	1,931		$	—		$	—		$	1,931
Copper	$	373		$	—		$	—		$	373
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	531		$	531
Midas redevelopment	$	10		$	—		$	—		$	10
Depreciation, depletion and amortization:
Gold	$	460		$	—		$	—		$	460
Copper	$	78		$	—		$	—		$	78
Other	$	2		$	—		$	17		$	19
Exploration	$	—		$	132		$	—		$	132
Advanced projects, research and development	$	27		$	—		$	18		$	45
Other income, net	$	28		$	1		$	41		$	70
Interest expense, net	$	34		$	—		$	43		$	77
Pre-tax income (loss) before minority interest and equity income of affiliates	$	1,277		$	(133	)	$	(732	)	$	412
Equity income of affiliates	$	(5	)	$	—		$	5		$	—
Capital expenditures	$	1,154		$	—		$	8		$	1,162

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	$	—		$	—		$	—		$	—		$	—		$	—
Advanced projects, research and development	$	10		$	2		$	2		$	2		$	23		$	1
Other income, net	$	14		$	13		$	4		$	(48	)	$	1		$	7
Interest expense, net	$	—		$	10		$	—		$	33		$	—		$	1
Pre-tax income (loss) before minority interest and equity income of affiliates	$	141		$	717		$	123		$	170		$	(2	)	$	61
Equity income of affiliates	$	—		$	—		$	—		$	—		$	—		$	—
Capital expenditures	$	501		$	174		$	115		$	97		$	195		$	8

	Nine Months Ended September 30, 2006
	Total Operations			Exploration			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		$	2		$	10		$	15
Exploration	$	—		$	120		$	—		$	120
Advanced projects, research and development	$	40		$	—		$	21		$	61
Other income, net	$	(9	)	$	3		$	4		$	(2	)
Interest expense, net	$	44		$	—		$	26		$	70
Pre-tax income (loss) before minority interest and equity income of affiliates	$	1,210		$	(119	)	$	(190	)	$	901
Equity income of affiliates	$	—		$	—		$	1		$	1
Capital expenditures	$	1,090		$	—		$	14		$	1,104

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, 2007		At December 31, 2006
Goodwill:
Australia/New Zealand	$	191	$	214
Exploration		1,129		1,129

	$	1,320	$	1,343

Total assets:
Nevada	$	2,936	$	2,652
Yanacocha		1,848		1,827
Australia/New Zealand		1,720		1,333
Batu Hijau		2,877		2,441
Africa		1,045		964
Other operations		149		163
Exploration		1,321		1,296
Corporate and other		2,787		2,998

Total assets from continuing operations		14,683		13,674
Assets held for sale		301		1,927

	$	14,984	$	15,601

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)

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

(24)

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Newmont USA, a 100% owned subsidiary of Newmont Mining Corporation, has fully and unconditionally guaranteed certain publicly traded notes. The following condensed consolidating financial statements are 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, 2007
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	819		$	280		$	—		$	1,099
Sales - copper, net		—			547			—			—			547

		—			1,366			280			—			1,646

Costs and expenses
Costs applicable to sales (exclusive of loss on settlement of price-capped forward sales contracts, Midas redevelopment and depreciation, depletion and amortization, shown separately below)
Gold		—			431			202			(6	)		627
Copper		—			111			—			—			111
Midas redevelopment		—			10			—			—			10
Depreciation, depletion and amortization		—			133			44			(1	)		176
Exploration		—			27			20			—			47
Advanced projects, research and development		—			7			9			—			16
General and administrative		—			31			2			7			40
Other expense, net		—			18			1			—			19

		—			768			278			—			1,046

Other income (expense)
Other income (expense), net		12			37			(14	)		—			35
Interest income - intercompany		85			(15	)		—			(70	)		—
Interest expense - intercompany		(3	)		—			(67	)		70			—
Interest expense, net		(15	)		(12	)		(1	)		—			(28	)

		79			10			(82	)		—			7

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		79			608			(80	)		—			607
Income tax expense		(41	)		(43	)		—			—			(84	)
Minority interest in income of subsidiaries		—			(229	)		—			31			(198	)
Equity income (loss) of affiliates		287			4			68			(359	)		—

Income (loss) from continuing operations		325			340			(12	)		(328	)		325
Income (loss) from discontinued operations		72			13			57			(70	)		72

Net income (loss)	$	397		$	353		$	45		$	(398	)	$	397

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, 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			35			—			149
Exploration		—			31			10			—			41
Advanced projects, research and development		—			11			11			—			22
General and administrative		—			31			(4	)		2			29
Other		—			37			(3	)		—			34

		—			671			195			—			866

Other income (expense)
Other income (expense), net		(1	)		(17	)		9			—			(9	)
Interest income - intercompany		31			23			—			(54	)		—
Interest expense - intercompany		(2	)		—			(52	)		54			—
Interest expense, net		(4	)		(22	)		(2	)		—			(28	)

		24			(16	)		(45	)		—			(37	)

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		24			161			14			—			199
Income tax (expense) benefit		(49	)		(50	)		(7	)		—			(106	)
Minority interest in income of subsidiaries		—			(52	)		(5	)		5			(52	)
Equity income (loss) of affiliates		67			(2	)		14			(78	)		1

Income (loss) from continuing operations		42			57			16			(73	)		42
Income (loss) from discontinued operations		156			(23	)		100			(77	)		156

Net income (loss)	$	198		$	34		$	116		$	(150	)	$	198

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, 2007
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales - gold, net	$	—		$	2,238		$	866		$	—		$	3,104
Sales - copper, net		—			1,100			—			—			1,100

		—			3,338			866			—			4,204

Costs and expenses
Costs applicable to sales (exclusive of loss on settlement of price-capped forward sales contracts, Midas redevelopment and depreciation, depletion and amortization, shown separately below)
Gold		—			1,334			610			(13	)		1,931
Copper		—			373			—			—			373
Loss on settlement of price-capped forward sales contracts		—			531			—			—			531
Midas redevelopment		—			10			—			—			10
Depreciation, depletion and amortization		—			426			132			(1	)		557
Exploration		—			85			47			—			132
Advanced projects, research and development		—			23			22			—			45
General and administrative		—			95			4			14			113
Other expense, net		—			86			7			—			93

		—			2,963			822			—			3,785

Other income (expense)
Other income (expense), net		29			85			(44	)		—			70
Interest income - intercompany		151			36			—			(187	)		—
Interest expense - intercompany		(6	)		—			(181	)		187			—
Interest expense, net		(33	)		(36	)		(8	)		—			(77	)

		141			85			(233	)		—			(7	)

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		141			460			(189	)		—			412
Income tax (expense) benefit		(62	)		(93	)		50			—			(105	)
Minority interest in income of subsidiaries		—			(383	)		(8	)		39			(352	)
Equity (loss) income of affiliates		(124	)		4			39			81			—

(Loss) income from continuing operations		(45	)		(12	)		(108	)		120			(45	)
(Loss) income from discontinued operations		(1,552	)		25			(1,571	)		1,546			(1,552	)

Net (loss) income	$	(1,597	)	$	13		$	(1,679	)	$	1,666		$	(1,597	)

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			87			—			430
Exploration		—			90			30			—			120
Advanced projects, research and development		—			32			28			1			61
General and administrative		—			97			1			5			103
Other		—			55			6			—			61

		—			2,016			538			—			2,554

Other income (expense)
Other income (expense), net		13			(21	)		6			—			(2	)
Interest income - intercompany		90			53			—			(143	)		—
Interest expense - intercompany		(6	)		—			(137	)		143			—
Interest expense, net		(17	)		(47	)		(6	)		—			(70	)

		80			(15	)		(137	)		—			(72	)

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		80			883			(62	)		—			901
Income tax (expense) benefit		(62	)		(285	)		88			—			(259	)
Minority interest in income of subsidiaries		—			(281	)		(15	)		17			(279	)
Equity income (loss) of affiliates		346			(2	)		77			(420	)		1

Income (loss) from continuing operations		364			315			88			(403	)		364
Income (loss) from discontinued operations		204			(24	)		145			(121	)		204

Net income (loss)	$	568		$	291		$	233		$	(524	)	$	568

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, 2007
Condensed Consolidating Balance Sheets	Newmont Mining Corporation		Newmont USA		Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
Assets
Cash and cash equivalents	$	—	$	887	$	166	$	—		$	1,053
Marketable securities and other short-term investments		—		9		1,076		—			1,085
Trade receivables		—		348		4		—			352
Accounts receivable		1,856		1,338		363		(3,410	)		147
Inventories		—		307		80		—			387
Stockpiles and ore on leach pads		—		361		34		—			395
Deferred income tax assets		—		88		55		—			143
Other current assets		1		89		40		—			130

Current assets		1,857		3,427		1,818		(3,410	)		3,692
Property, plant and mine development, net		—		5,056		2,298		(20	)		7,334
Investments		—		1		350		—			351
Investments in subsidiaries		4,428		23		1,072		(5,523	)		—
Long-term stockpiles and ore on leach pads		—		717		65		—			782
Deferred income tax assets		135		724		145		—			1,004
Other long-term assets		3,172		321		108		(3,401	)		200
Goodwill		—		—		1,320		—			1,320
Assets of operations held for sale		—		23		278		—			301

Total assets	$	9,592	$	10,292	$	7,454	$	(12,354	)	$	14,984

Liabilities
Current portion of long-term debt	$	—	$	169	$	119	$	—		$	288
Accounts payable		181		2,227		1,268		(3,411	)		265
Employee related benefits		—		109		39		—			148
Income and mining taxes		49		198		11		—			258
Other current liabilities		23		316		326		(2	)		663

Current liabilities		253		3,019		1,763		(3,413	)		1,622
Long-term debt		1,768		977		—		—			2,745
Reclamation and remediation liabilities		—		404		142		—			546
Deferred income tax liabilities		53		190		179		—			422
Employee-related benefits		1		219		30		—			250
Other long-term liabilities		264		90		3,217		(3,421	)		150
Liabilities of operations held for sale		9		84		21		—			114

Total liabilities		2,348		4,983		5,352		(6,834	)		5,849

Minority interest in subsidiaries		—		1,591		554		(639	)		1,506

Stockholders’ equity
Preferred stock		—		—		61		(61	)		—
Common stock		690		—		—		—			690
Additional paid-in capital		6,323		2,224		2,858		(4,697