Edgar Filing: NEWMONT MINING CORP /DE/

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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 June 30, 2008

¨	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, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):


Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

There were 439,229,312 shares of common stock outstanding on July 18, 2008 (and 14,854,461 exchangeable shares).

TABLE OF CONTENTS


		Page
	PART I
ITEM 1.	FINANCIAL STATEMENTS	1
	Condensed Consolidated Statements of Income (Loss)	1
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Cash Flows	3
	Notes to Condensed Consolidated Financial Statements	4

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION	48
	Selected Financial and Operating Results	48
	Consolidated Financial Results	48
	Results of Consolidated Operations	54
	Liquidity and Capital Resources	65
	Environmental	68
	Recently Adopted Accounting Pronouncements	68
	Recently Issued Accounting Pronouncements	70
	Safe Harbor Statement	72

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	73

ITEM 4.	CONTROLS AND PROCEDURES	75

	PART II
ITEM 1.	LEGAL PROCEEDINGS	76

ITEM 2.	ISSUER PURCHASES OF EQUITY SECURITIES	76

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	76

ITEM 6.	EXHIBITS	77

SIGNATURES		78

EXHIBIT INDEX		79

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 June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Revenues
Sales—gold, net	$	1,339		$	936		$	2,850		$	1,947
Sales—copper, net		183			340			615			553

		1,522			1,276			3,465			2,500
Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		655			586			1,296			1,216
Costs applicable to sales—copper ⁽¹⁾		104			128			254			251
Loss on settlement of price-capped forward sales contracts (Note 3)		—			531			—			531
Amortization		184			186			366			365
Accretion (Note 20)		8			8			16			15
Exploration		59			46			98			85
Advanced projects, research and development		39			13			69			29
General and administrative		37			34			66			67
Write-down of investments		34			—			56			—
Other expense, net (Note 4)		118			78			181			128

		1,238			1,610			2,402			2,687

Other income (expense)
Other income, net (Note 5)		53			37			90			54
Interest expense, net of capitalized interest		(27	)		(25	)		(47	)		(49	)

		26			12			43			5

Income (loss) from continuing operations before income tax, minority interest and equity loss of affiliates		310			(322	)		1,106			(182	)
Income tax benefit (expense) (Note 8)		37			19			(198	)		(25	)
Minority interest in income of consolidated subsidiaries (Note 9)		(68	)		(98	)		(260	)		(154	)
Equity loss of affiliates		—			—			(5	)		—

Income (loss) from continuing operations		279			(401	)		643			(361	)
(Loss) income from discontinued operations (Note 10)		(2	)		(1,661	)		4			(1,633	)

Net income (loss)	$	277		$	(2,062	)	$	647		$	(1,994	)

Income (loss) per common share (Note 12)
Basic:
Income (loss) from continuing operations	$	0.61		$	(0.89	)	$	1.42		$	(0.80	)
Income (loss) from discontinued operations		—			(3.68	)		0.01			(3.62	)

Net income (loss)	$	0.61		$	(4.57	)	$	1.43		$	(4.42	)

Diluted:
Income (loss) from continuing operations	$	0.61		$	(0.89	)	$	1.41		$	(0.80	)
Income (loss) from discontinued operations		—			(3.68	)		0.01			(3.62	)

Net income (loss)	$	0.61		$	(4.57	)	$	1.42		$	(4.42	)

Basic weighted-average common shares outstanding		454			451			454			451

Diluted weighted-average common shares outstanding		456			451			457			451

Cash dividends declared per common share	$	0.10		$	0.10		$	0.20		$	0.20

⁽¹⁾	Exclusive of Loss on settlement of price-capped forward sales contracts, Amortization and Accretion.

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)


	At June 30, 2008			At December 31, 2007
ASSETS
Cash and cash equivalents	$	1,036		$	1,231
Marketable securities and other short-term investments (Note 15)		72			61
Trade receivables		251			177
Accounts receivable		159			168
Inventories (Note 16)		454			463
Stockpiles and ore on leach pads (Note 17)		367			373
Deferred income tax assets		102			112
Other current assets		406			87

Current assets		2,847			2,672
Property, plant and mine development, net		10,032			9,140
Investments (Note 15)		1,933			1,527
Long-term stockpiles and ore on leach pads (Note 17)		901			788
Deferred income tax assets		1,070			1,027
Other long-term assets		271			234
Goodwill		186			186
Assets of operations held for sale (Note 10)		3			24

Total assets	$	17,243		$	15,598

LIABILITIES
Current portion of long-term debt (Note 18)	$	261		$	255
Accounts payable		321			339
Employee-related benefits		147			153
Income and mining taxes		152			88
Other current liabilities (Note 19)		735			665

Current liabilities		1,616			1,500
Long-term debt (Note 18)		3,085			2,683
Reclamation and remediation liabilities (Note 20)		664			623
Deferred income tax liabilities		1,277			1,025
Employee-related benefits		212			226
Other long-term liabilities (Note 19)		153			150
Liabilities of operations held for sale (Note 10)		94			394

Total liabilities		7,101			6,601

Commitments and contingencies (Note 24)
Minority interest in subsidiaries		1,547			1,449

STOCKHOLDERS’ EQUITY
Common stock		703			696
Additional paid-in capital		6,651			6,696
Accumulated other comprehensive income		1,395			957
Retained deficit		(154	)		(801	)

Total stockholders’ equity		8,595			7,548

Total liabilities and stockholders’ equity	$	17,243		$	15,598

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)


	Six Months Ended June 30,
	2008			2007
Operating activities:
Net income (loss)	$	647		$	(1,994	)
Adjustments to reconcile net income (loss) to net cash from continuing operations:
Amortization		366			365
(Income) loss from discontinued operations		(4	)		1,633
Accretion of accumulated reclamation obligations (Note 20)		21			19
Deferred income taxes		(203	)		(143	)
Write-down of investments		56			—
Stock based compensation and other benefits		24			25
Minority interest in income of consolidated subsidiaries		260			154
Gain on asset sales, net		(13	)		(4	)
Other operating adjustments and write-downs		86			47
Net change in operating assets and liabilities (Note 21)		(264	)		(726	)

Net cash provided from (used in) continuing operations		976			(624	)
Net cash (used in) provided from discontinued operations (Note 10)		(112	)		61

Net cash provided from (used in) operations		864			(563	)

Investing activities:
Additions to property, plant and mine development		(897	)		(710	)
Investments in marketable debt and equity securities		(17	)		(158	)
Proceeds from sale of marketable debt and equity securities		17			134
Acquisitions, net (Note 14)		(325	)		—
Cash received on repayment of Batu Hijau carried interest (Note 9)		—			161
Other		(16	)		5

Net cash used in investing activities of continuing operations		(1,238	)		(568	)
Net cash (used in) provided from investing activities of discontinued operations (Note 10)		(6	)		74

Net cash used in investing activities		(1,244	)		(494	)

Financing activities:
Proceeds from debt, net		1,023			1,161
Repayment of debt		(627	)		(418	)
Dividends paid to common stockholders		(91	)		(90	)
Dividends paid to minority interests		(147	)		(115	)
Proceeds from stock issuance		24			14
Change in restricted cash and other		7			2

Net cash provided from financing activities		189			554

Effect of exchange rate changes on cash		(4	)		5

Net change in cash and cash equivalents		(195	)		(498	)
Cash and cash equivalents at beginning of period		1,231			1,166

Cash and cash equivalents at end of period	$	1,036		$	668

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)

NOTE 1 BASIS OF PRESENTATION

The interim Condensed Consolidated Financial Statements (“interim 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 statements are not necessarily indicative of the results that may be reported for the entire year. These interim 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, 2007, filed February 21, 2008. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (GAAP).

References to “A$” refer to Australian currency, “C$” to Canadian currency, “IDR” to Indonesian currency, “NZ$” to New Zealand currency and “$” to United States currency.

Certain amounts for the three and six months ended June 30, 2007 have been reclassified to conform to the 2008 presentation. The Company reclassified the World Gold Council dues from General and administrative to Other expense, net, reclassified Accretion from Costs applicable to sales to a separate Accretion line item, reclassified regional administrative and community development from Costs applicable to sales to Other expense, net and reclassified marketing costs from Costs applicable to sales to General and administrative. The Consolidated Statements of Income (Loss) and the Consolidated Statements of Cash Flows have also been reclassified for discontinued operations. These changes were reflected for all periods presented.

NOTE 2 ACCOUNTING DEVELOPMENTS

Recently Adopted Pronouncements

Fair Value Accounting

In September 2006, the Financial Accounting Standards Board (“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 were adopted January 1, 2008. In February 2008, the FASB staff issued Staff Position No. 157-2 “Effective Date of FASB Statement No. 157” (“FSP FAS 157-2”). FSP FAS 157-2 delayed the effective date of FAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The provisions of FSP FAS 157-2 are effective for the Company’s fiscal year beginning January 1, 2009.

FAS 157 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under FAS 157 are described below:


Level 1		Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

NEWMONT MINING CORPORATION

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

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



Level 2		Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3		Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by FAS 157, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.


	Fair Value at June 30, 2008
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	55	$	55	$	—	$	—
Marketable equity securities		1,955		1,955		—		—
Marketable debt securities		34		—		4		30
Trade receivable from provisional copper and gold concentrate sales		125		125		—		—
Derivative instruments, net		59		—		59		—

	$	2,228	$	2,135	$	63	$	30

Liabilities:
8⁵/8% debentures	$	93	$	—	$	93	$	—

The Company’s cash instruments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash instruments that are valued based on quoted market prices in active markets are primarily money market securities and U.S. Treasury securities.

The Company’s marketable equity securities are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company.

The Company’s marketable debt securities include investments in auction rate securities and asset backed commercial paper. The Company reviews fair value for auction rate securities and asset backed commercial paper on at least a quarterly basis. The auction rate securities are valued based on quoted prices in markets that are not active. The Company determined the fair value based on indicative pricing from the underwriting bank. Such instruments are generally classified within Level 2 of the fair value hierarchy. The asset backed commercial paper falls within Level 3 of the fair value hierarchy because it trades infrequently and has little price transparency. The Company allocated an estimated impairment percentage to the various underlying asset classes within the asset backed commercial paper using unobservable inputs. The impairment value was applied sequentially to the various tranches within the asset backed commercial paper, resulting in an estimated fair value for each investment class. This value was supported by an indicative value obtained from a third party, which was facilitated by the Pan-Canadian Investors Committee for Third-Party Structured Asset Backed Commercial Paper.

NEWMONT MINING CORPORATION

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

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

The Company’s trade receivable from provisional copper and gold concentrate sales is valued using quoted market prices based on the forward London Metal Exchange and as such is classified within Level 1 of the fair value hierarchy.

The Company’s derivative instruments are valued using pricing models and the Company generally uses similar models to value similar instruments. Where possible, the Company verifies the values produced by its pricing models to market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs. The Company’s derivatives trade in liquid markets, and as such, model inputs can generally be verified and do not involve significant management judgment. Such instruments are typically classified within Level 2 of the fair value hierarchy.

The Company has fixed to floating swap contracts to hedge the interest rate risk exposure on $100 of its 8⁵/8% uncollateralized debentures due May 2011. The hedged portion of the Company’s 8⁵/8% debentures are valued using pricing models which require inputs, including risk-free interest rates and credit spreads. Because the inputs are derived from observable market data, the hedged portion of the 8⁵/8% debentures is classified within Level 2 of the fair value hierarchy.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial assets (asset backed commercial paper) for the six months ended June 30, 2008.


Balance at beginning of period	$	31
Unrealized losses		(1	)

Balance at end of period	$	30

The total amount of unrealized losses for the period was included in Accumulated other comprehensive income as a result of changes in foreign exchange rates from December 31, 2007.

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 were adopted January 1, 2008. The Company did not elect the Fair Value Option for any of its financial assets or liabilities, and therefore, the adoption of FAS 159 had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards

In June 2007, the EITF reached consensus on Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF 06-11”). EITF 06-11 requires that the tax benefit related to dividend and dividend equivalents paid on equity-classified nonvested shares and nonvested share units, which are expected to vest, be recorded as an increase to additional paid-in capital. EITF 06-11 was to be applied prospectively for tax benefits on dividends declared in the Company’s fiscal year beginning January 1, 2008. The adoption of EITF 06-11 had an insignificant impact on the Company’s consolidated financial position, results of operations or cash flows.

NEWMONT MINING CORPORATION

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

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

Recently Issued Accounting Pronouncements

Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued FASB Statement No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”) which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. generally accepted accounting principles (GAAP). FAS 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with GAAP.” The Company does do not expect the adoption of FAS 162 to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

Accounting for Convertible Debt Instruments

In May 2008, the FASB issued FSP No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP APB 14-1”). FSP APB 14-1 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 FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”). Convertible debt instruments within the scope of FSP APB 14-1 are not addressed by the existing APB 14. FSP APB 14-1 requires that the liability and equity components of convertible debt instruments within the scope of FSP APB 14-1 be separately accounted for in a manner that reflects the entity’s nonconvertible debt borrowing rate. This requires 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 will be reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the effective interest method. FSP APB 14-1 is effective for the Company’s fiscal year beginning January 1, 2009 and will be applied retrospectively to all periods presented. The Company estimates that approximately $350 of debt discount will be recorded and the effective interest rate on the Company’s 2014 and 2017 convertible senior notes (see Note 18 to the Consolidated Financial Statements) will increase by approximately 5 percentage points to 6.0% and 6.25%, respectively, for the non-cash amortization of the debt discount.

Accounting for the Useful Life of Intangible Assets

In April 2008, the FASB issued FSP No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”) which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets” (“FAS 142”). The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset under FAS 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No. 141, “Business Combinations” (“FAS 141”). FSP 142-3 is effective for the Company’s fiscal year beginning January 1, 2009 and will be applied prospectively to intangible assets acquired after the effective date. The Company does do not expect the adoption of FSP 142-3 to have an impact on the Company’s consolidated financial position, results of operations or cash flows.

NEWMONT MINING CORPORATION

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

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

Derivative Instruments

In March 2008, the FASB issued FASB Statement No. 161, “Disclosure about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133” (“FAS 161”) which provides revised guidance for enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and the related hedged items are accounted for under FAS 133, and how derivative instruments and the related hedged items affect an entity’s financial position, financial performance and cash flows. FAS 161 is effective for the Company’s fiscal year beginning January 1, 2009. The Company is currently evaluating the potential impact of adopting this statement on the Company’s derivative instrument disclosures.

Business Combinations

In December 2007, the FASB issued FASB Statement No. 141(R), “Business Combinations” (“FAS 141(R)”) which amends FAS 141, and provides revised guidance for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and any noncontrolling interest in the acquiree. It also provides disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. FAS 141(R) is effective for the Company’s fiscal year beginning January 1, 2009 and is to be applied prospectively. The Company is currently evaluating the potential impact of adopting this statement on the Company’s consolidated financial position, results of operations or cash flows.

Noncontrolling Interests in Consolidated Financial Statements

In December 2007, the FASB issued FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“FAS 160”) which establishes accounting and reporting standards pertaining to (i) ownership interests in subsidiaries held by parties other than the parent, (ii) the amount of net income attributable to the parent and to the noncontrolling interest, (iii) changes in a parent’s ownership interest, and (iv) the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. FAS 160 also requires that the reporting company clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. FAS 160 is effective for the Company’s fiscal year beginning January 1, 2009. The Company is currently evaluating the potential impact of adopting this statement on the Company’s consolidated financial position, results of operations or cash flows.

NOTE 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 FAS 133 “Accounting for Derivative Instruments and Hedging Activities”, as amended. 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 pre-tax loss of $531 ($460 after-tax) on the early settlement of the contracts, after a $47 reversal of previously recognized deferred revenue.

NEWMONT MINING CORPORATION

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

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

NOTE 4 OTHER EXPENSE, NET


	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Reclamation estimate revisions (Note 20)	$	59	$	17	$	61	$	17
Community development		18		13		32		27
Regional administration		12		10		21		21
Western Australia power plant		8		2		13		7
Peruvian royalty		4		1		11		4
Pension settlement loss (Note 6)		—		13		11		13
World Gold Council dues		2		3		5		6
Accretion non-operating (Note 20)		3		2		5		4
Other		12		17		22		29

	$	118	$	78	$	181	$	128

NOTE 5 OTHER INCOME, NET


	Three Months Ended June 30,					Six Months Ended June 30,
	2008			2007		2008			2007
Canadian Oil Sands Trust income	$	31		$	11	$	55		$	19
Interest income		7			10		17			23
Gain on sale of investments, net		10			—		10			—
Income from development projects, net		9			—		9			—
Foreign currency exchange (losses) gains, net		(7	)		8		(13	)		3
Other		3			8		12			9

	$	53		$	37	$	90		$	54

NOTE 6 EMPLOYEE PENSION AND OTHER BENEFIT PLANS


	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Pension benefit costs, net
Service cost	$	4		$	5		$	8		$	10
Interest cost		8			6			15			12
Expected return on plan assets		(7	)		(6	)		(14	)		(11	)
Amortization of prior service cost		—			1			—			1
Amortization of loss		1			14			2			16

	$	6		$	20		$	11		$	28

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 June 30,					Six Months Ended June 30,
	2008			2007		2008			2007
Other benefit costs, net
Service cost	$	1		$	2	$	1		$	3
Interest cost		1			2		2			3
Amortization of gain		(1	)		—		(1	)		—

	$	1		$	4	$	2		$	6

For the three months ended June 30, 2008 and 2007, the Company recognized pension settlement losses of $nil and $13, respectively, related to senior management retirements. For the six months ended June 30, 2008 and 2007, the Company recognized pension settlement losses of $11 and $13, respectively, related to senior management retirements. These costs were recorded in Other expense, net (see Note 4).

NOTE 7 STOCK BASED COMPENSATION

The Company recognized stock options and other stock based compensation as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Stock options	$	5	$	6	$	8	$	10
Restricted stock		1		1		3		3
Restricted stock units		—		—		—		1
Deferred stock awards		3		2		5		4

	$	9	$	9	$	16	$	18

For the three and six months ended June 30, 2008 and 2007, 1,112,463 and 1,066,500 stock options, respectively, were granted at the weighted-average exercise price of $44 and $42, respectively. At June 30, 2008, there was $24 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 second quarter of 2008 and 2007 was $14 and $2, respectively. The total intrinsic value of options exercised in the first half of 2008 and 2007 was $25 and $7, respectively. During the six months ended June 30, 2008 and 2007, 616,914 and 1,112,947 stock options vested, respectively, at the weighted-average fair market value of $48 for both years.

For the three months ended June 30, 2008 and 2007, 6,743 and 33,286 shares of restricted stock, respectively, were granted and issued, at the weighted-average fair market value of $44 and $42, respectively. For the six months ended June 30, 2008 and 2007, 114,663 and 175,114 shares of restricted stock, respectively, were granted and issued, at the weighted-average fair market value of $48 and $45, respectively.

For the three months ended June 30, 2008 and 2007, 3,855 and nil shares of restricted stock units, respectively, were granted at the weighted average fair market value of $49 and $nil, respectively. For the six months ended June 30, 2008 and 2007, 8,927 and 20,212 shares of restricted

NEWMONT MINING CORPORATION

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

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

stock units, respectively, were granted, at the weighted-average fair market value of $49 and $45, respectively, per underlying share of the Company’s common stock.

For the three and six months ended June 30, 2008 and 2007, 393,533 and 365,776 deferred stock awards, respectively, were granted.

NOTE 8 INCOME TAXES

The Company operates in numerous countries around the world and accordingly it 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 paid 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. At June 30, 2008, the Company’s total unrecognized tax benefit was $163 for uncertain tax positions taken or expected to be taken on tax returns. Of this, $100 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate. Also included in the balance at June 30, 2008 is $15 of tax positions that, due to the impact of deferred tax accounting, the disallowance of which would not affect the annual effective tax rate.

On June 25, 2008, the United States Tax Court issued an opinion for Santa Fe Pacific Gold Company and Subsidiaries (“Santa Fe”), by and through its successor in interest, Newmont USA Limited, a member of the Newmont Mining Corporation affiliated group. The Tax Court issued the ruling for the tax years 1994—1997, which were years prior to Newmont’s acquisition of Santa Fe. The Tax Court ruled unfavorably on certain issues relating to the method in which Santa Fe was calculating adjustments related to percentage depletion in its Alternative Minimum Tax calculation. As a direct result of that decision, the Company increased its liability for uncertain income tax positions under FIN 48 by $27. Since the increase in the Company’s FIN 48 liability is attributable to additional alternative minimum tax amounts owed, these amounts can be used in the future by the Company as a credit against its regular US corporate tax liability. Management is currently exploring its legal options in order to decide how to proceed in response to the Tax Court opinion. As a result of the unfavorable Tax Court ruling, the Company increased its amount of accrued interest and penalties by $12 at June 30, 2008.

As a result of (i) statute of limitations that will begin to expire within the next 12 months in various jurisdictions, (ii) a possible payment to the United States taxing authority in connection with the recent Tax Court decision concerning the calculation of the Company’s alternative minimum taxes and (iii) possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its unrecognized income tax benefits will decrease between $45 to $55.

NEWMONT MINING CORPORATION

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

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

NOTE 9 MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES


	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Yanacocha	$	48	$	7	$	139	$	41
Batu Hijau		19		91		120		112
Other		1		––		1		1

	$	68	$	98	$	260	$	154

Newmont has a 45% ownership interest in the Batu Hijau mine, held through the Nusa Tenggara partnership (“NTP”) with an affiliate of Sumitomo Corporation of Japan (“Sumitomo”). 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 operates the Batu Hijau mine. Newmont identified NTP as a Variable Interest Entity as a result of certain capital structures and contractual relationships. As a result, Newmont fully consolidates Batu Hijau in its consolidated financial statements. The remaining 20% interest in PTNNT is owned by P.T. Pukuafu Indah (“PTPI”), an unrelated Indonesian company. Because PTPI had been advanced a loan by NTP and was not obligated to absorb the expected losses of PTNNT, PTPI’s interest was considered a carried interest and Newmont reported a 52.875% economic interest in Batu Hijau, which reflected Newmont’s 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. During the second quarter of 2008, PTNNT advanced PTPI $20, which is included in Other current assets.

Newmont has a 51.35% ownership interest in the Yanacocha mine with the remaining interests held by Compañia de Minas Buenaventura, S.A.A. (43.65%) and the International Finance Corporation (5%).

In April 2008, the Company purchased 15,960 additional shares of European Gold Refineries SA joint venture (“EGR”) for $11 in cash increasing its ownership interest to 56.67% from 46.72%. Swiss residents and Mitsubishi International Corporation hold the remaining 43.33%. The additional interest in EGR resulted in the consolidation of EGR and the remaining 43.33% is included in Other above as of May 1, 2008. Prior to consolidation, the Company accounted for EGR using the equity method of accounting.

NOTE 10 DISCONTINUED OPERATIONS

Discontinued operations include the Company’s royalty portfolio and Pajingo operation, both sold in December 2007.

For the six months ended June 30, 2008, the Company recognized a $5 gain primarily related to additional royalty portfolio revenue in excess of the 2007 estimate and a $1 gain related to Pajingo asset sales. Additionally, the Company received $5 in cash and $5 in marketable securities related to the Pajingo asset sales.

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 and six months ended June 30, 2007, the Company recorded a $1,665 non-cash charge to impair the goodwill associated with the royalty portfolio reclassification to discontinued operations in the second quarter of 2007.

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) income 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 assets held for sale and discontinued operations for all periods presented.

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


	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Sales—gold, net	$	—		$	26		$	—		$	58

Income from operations:
Royalty portfolio	$	—		$	21		$	—		$	63
Pajingo		—			2			—			6

		—			23			—			69
Loss on impairment of goodwill		—			(1,665	)		—			(1,665	)
Additional (loss) gain from royalty portfolio		(2	)		—			5			—
(Loss) gain on sale of Pajingo assets		(1	)		—			1			—

Pre-tax (loss) income		(3	)		(1,642	)		6			(1,596	)
Income tax benefit (expense)		1			(19	)		(2	)		(37	)

(Loss) income from discontinued operations	$	(2	)	$	(1,661	)	$	4		$	(1,633	)


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

	At June 30, 2008			At December 31, 2007
Assets:
Accounts receivable	$	3		$	20
Property, plant and mine development		—			3
Deferred income tax assets		—			1

Total assets of operations held for sale	$	3		$	24

Liabilities:
Income and mining taxes	$	87		$	378
Other liabilities		7			16

Total liabilities of operations held for sale	$	94		$	394

NEWMONT MINING CORPORATION

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

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

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


	Six Months Ended June 30,
	2008			2007
Net cash (used in) provided from discontinued operations:
Income (loss) from discontinued operations	$	4		$	(1,633	)
Amortization		—			24
Deferred income taxes		—			8
Gain on sale of investments, net		—			(40	)
Loss on impairment of goodwill		—			1,665
Other operating adjustments and write-downs		—			11
(Decrease) increase in net operating liabilities		(116	)		26

	$	(112	)	$	61

Net cash (used in) provided from investing activities of discontinued operations:
Investments in marketable securities	$	—		$	(2	)
Proceeds from sale of marketable securities		—			79
Proceeds from asset sales, net		5			—
Royalty portfolio sale expenses		(11	)		—
Additions to property, plant and mine development		—			(3	)

	$	(6	)	$	74

NOTE 11 DERIVATIVE INSTRUMENTS

For the three months ended June 30, 2008 and 2007, losses of $1 and gains of $2, respectively, were included in Other income, net for the ineffective portion of derivative instruments designated as cash flow hedges. For the six months ended June 30, 2008 and 2007, gains of $2 and $nil, respectively, were included in Other income, net for the ineffective portion of derivative instruments designated as cash flow hedges. The amount to be reclassified from Accumulated other comprehensive income, net of tax to income for derivative instruments during the next 12 months is a gain of approximately $23. The maximum period over which hedged forecasted transactions are expected to occur is 3 years.

Foreign Currency Contracts

Newmont has entered into a series of foreign currency contracts to hedge the variability of the US dollar amount of forecasted foreign currency expenditures caused by changes in currency rates. Newmont entered into $/IDR forward purchase contracts with expiration dates ranging up to one year which reduced Batu Hijau Costs applicable to sales by $nil and $2 for the three months ended June 30, 2008 and 2007, respectively. For the six months ended June 30, 2008 and 2007, the $/IDR forward purchase contracts reduced Batu Hijau Costs applicable to sales by $1 and $3, respectively. During the third quarter of 2007, Newmont began a layered fixed forward contract program to hedge a portion of its A$ denominated operating expenditures and during the first quarter of 2008 began a layered fixed forward contract program to hedge a portion of its NZ$ denominated operating expenditures. The

NEWMONT MINING CORPORATION

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

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

programs include a series of fixed forward contracts with expiration dates of up to three years from the date of issue. For the three months ended June 30, 2008, the A$ and NZ$ operating hedge programs reduced Australia/New Zealand Costs applicable to sales by $4 and $nil, respectively. For the six months ended June 30, 2008, the A$ and NZ$ operating hedge programs reduced Australia/New Zealand Costs applicable to sales by $5 and $nil, respectively. All of the currency contracts were designated as cash flow hedges, and as such, unrealized changes in market value have been recorded in Accumulated other comprehensive income.

During the fourth quarter of 2007, Newmont began a program to hedge a portion of its A$ denominated capital expenditures related to the construction of Boddington. The program consists of a series of fixed forward contracts and bought call option contracts with expiration dates of up to one year from the date of issue. The A$ denominated contracts have been designated as cash flow hedges of future Boddington capital expenditures, and as such, changes in the market value have been recorded in Accumulated other comprehensive income. The realized gains and losses associated with the capital expenditure hedge program will impact Amortization during future periods in which Boddington assets are placed into service and affect earnings.

Newmont had the following foreign currency derivative contracts outstanding at June 30, 2008:


	Expected Maturity Date										Fair Value
	2008		2009		2010		2011		Total/ Average		At June 30, 2008⁽¹⁾			At December 31, 2007⁽²⁾
IDR Forward Purchase Contracts:
$ (millions)	$	59	$	15	$	—	$	—	$	74	$	1		$	(1	)
Average rate (IDR/$)		9,484		9,652		—		—		9,518

A$ Operating Forward Purchase Contracts:
$ (millions)	$	127	$	224	$	168	$	24	$	543	$	38		$	—
Average rate ($/A$)		0.88		0.85		0.83		0.83		0.85

NZ$ Operating Forward Purchase Contracts:
$ (millions)	$	14	$	22	$	4	$	—	$	40	$	(1	)	$	—
Average rate ($/NZ$)		0.77		0.74		0.71		—		0.75

A$ Capital Forward Purchase Contracts:
$ (millions)	$	141	$	116	$	—	$	—	$	257	$	14		$	(1	)
Average rate ($/A$)		0.87		0.91		—		—		0.89

A$ Capital Call Option Contracts:
$ (millions)	$	56	$	—	$	—	$	—	$	56	$	1		$	1
Average rate ($/A$)		0.95		—		—		—		0.95

⁽¹⁾

At June 30, 2008, the fair value of the IDR operating forward purchase contracts includes $1 in Other current assets, the fair value of the A$ operating forward purchase contracts includes $20 in Other current assets and $18 in Other long-term assets, the fair value of the NZ$ operating forward purchase contracts includes $(1) in Other current liabilities, and the fair value of the capital hedge program related to Boddington includes $14 in Other current assets for A$ forward purchase contracts and $1 in Other current assets for A$ bought call option contracts.

⁽²⁾	At December 31, 2007, the fair value of the IDR operating forward purchase contracts includes $(1) in Other current liabilities, the fair value of the A$ operating forward purchase contracts

NEWMONT MINING CORPORATION

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

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

includes $2 in Other current assets, $2 in Other Long-term assets, $(1) in Other current liabilities, and $(3) in Other long-term liabilities, and the fair value of the capital hedge program related to Boddington includes $(1) in Other current liabilities for A$ forward purchase contracts and $1 in Other current assets for A$ bought call option contracts.

Diesel Fixed Forward Contracts

During the first quarter of 2008, Newmont implemented a program to hedge a portion of its operating cost exposure related to diesel prices of fuel consumed at its Nevada operations. The program consists of a series of financially settled fixed forward contracts with expiration dates of up to one year from the date of issue. The contracts have been designated as cash flow hedges of future diesel purchases, and as such changes in the market value have been recorded in Accumulated other comprehensive income.

Newmont had the following diesel derivative contracts outstanding at June 30, 2008:


	Expected Maturity Date						Fair Value
	2008		2009		Total/ Average		At June 30, 2008		At December 31, 2007
Diesel Forward Purchase Contracts:
$ (millions)	$	11	$	7	$	18	$	2	$	—
Average rate ($/gallon)		3.42		3.50		3.45

Interest Rate Swap Contracts

At June 30, 2008, Newmont had $100 fixed to floating swap contracts designated as a hedge against a portion of its $223 8⁵/8% 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 six months ended June 30, 2008 and 2007, the hedge contracts decreased Interest expense, net of capitalized interest by $1 and $nil, respectively. The fair value of the interest rate swaps was $4 at June 30, 2008 and December 31, 2007.

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 and gold 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 June 30, 2008 and 2007, Batu Hijau had the following gross revenues before treatment and refining charges subject to final price adjustments:

NEWMONT MINING CORPORATION

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

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

The average final price adjustments realized were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Average final price adjustments
Copper	20	%	26	%	12	%	4	%
Gold	(3	)%	2	%	3	%	2	%

NOTE 12 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 (loss) 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 June 30,						Six Months Ended June 30,
	2008			2007			2008		2007
Numerator:
Income (loss) from continuing operations	$	279		$	(401	)	$	643	$	(361	)
Income (loss) from discontinued operations		(2	)		(1,661	)		4		(1,633	)

Net income (loss)	$	277		$	(2,062	)	$	647	$	(1,994	)

Denominator:
Basic		454			451			454		451
Effect of employee stock-based awards		2			—			3		—

Diluted		456			451			457		451

Income (loss) per common share
Basic:
Income (loss) from continuing operations	$	0.61		$	(0.89	)	$	1.42	$	(0.80	)
Income (loss) from discontinued operations		—			(3.68	)		0.01		(3.62	)

Net income (loss)	$	0.61		$	(4.57	)	$	1.43	$	(4.42	)

Diluted:
Income (loss) from continuing operations	$	0.61		$	(0.89	)	$	1.41	$	(0.80	)
Income (loss) from discontinued operations		—			(3.68	)		0.01		(3.62	)

Net income (loss)	$	0.61		$	(4.57	)	$	1.42	$	(4.42	)

Options to purchase 1.1 million and 2.2 million shares of common stock at average exercise prices of $54.87 and $51.43 were outstanding at June 30, 2008 and 2007, respectively, but were not included in the computation of diluted weighted average common shares because the strike price of the options exceeded the price of the common stock and their effect would have been anti-dilutive.

Other outstanding options to purchase 2.8 million and 2.1 million shares of common stock were not included in the computation of diluted weighted average common shares for the three and six months ended June 30, 2007, respectively, because their effect would have been anti-dilutive.

NEWMONT MINING CORPORATION

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

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

NOTE 13 COMPREHENSIVE INCOME (LOSS)


	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net income (loss)	$	277		$	(2,062	)	$	647		$	(1,994	)
Other comprehensive income (loss), net of tax:
Unrealized gain on marketable equity securities (Note 15)		369			135			404			31
Foreign currency translation adjustments		59			59			(17	)		65
Pension and other benefit liability adjustments		1			15			8			17
Change in fair value of cash flow hedge instruments:
Net change from periodic revaluations		34			—			51			4
Net amount reclassified to income		(5	)		(2	)		(8	)		(1	)

Net unrecognized gain (loss) on derivatives		29			(2	)		43			3

		458			207			438			116

Comprehensive income (loss)	$	735		$	(1,855	)	$	1,085		$	(1,878	)

NOTE 14 ACQUISITIONS

On December 27, 2007, pursuant to a tender offer dated October 9, 2007, the Company purchased 155 million common shares of Miramar Mining Corporation (“Miramar”). The 155 million shares represented approximately 70% of the common shares of Miramar which, in addition to the 18.5 million shares previously owned by the Company, brought the Company’s interest in Miramar to approximately 78%. During the first quarter of 2008, the Company completed the acquisition by purchasing the remaining 50 million shares, bringing the Company’s interest in Miramar to 100%. All shares were purchased for C$6.25 per share in cash.

With the completion of the Miramar acquisition, the Company controls the Hope Bay project, a large undeveloped gold project in Nunavut, Canada. The Hope Bay Project is consistent with the Company’s strategic focus on exploration and project development and was acquired with the intention of adding higher grade ore reserves and developing a new core gold mining district in a AAA-rated country.

NEWMONT MINING CORPORATION

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

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

In accordance with the purchase method of accounting, the purchase price paid has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values on the respective closing dates. The Company is continuing to evaluate the assets acquired and liabilities assumed, and there may be adjustments to the estimated purchase date fair values. The Company will finalize the purchase price allocation in 2008. The preliminary purchase price allocation based on the estimated fair values of assets acquired and liabilities assumed is as follows:


Assets:
Cash and cash equivalents	$	38
Property, plant and mine development, net		1,865
Investments		40
Deferred income tax assets		94
Other assets		36

		2,073

Liabilities:
Accrued liabilities		41
Deferred income tax liabilities		679

		720

Net assets acquired	$	1,353

The results of operations for Miramar have been included in the Company’s Condensed Consolidated Statement of Income (Loss). For the three and six months ended June 30, 2008, the Hope Bay project incurred a pre-tax loss of $10 and $13, respectively, primarily related to advanced projects, salaries and general and administrative costs. See Note 22 for more information on the Hope Bay segment.

In April 2008, the Company purchased 15,960 additional shares of EGR for $11 in cash bringing its ownership interest to 56.67% from 46.72%. Swiss residents and Mitsubishi International Corporation hold the remaining 43.33%. EGR owns 100% of Valcambi SA (“Valcambi”), a gold refinery business, and 100% of Finorafa SA (“Finorafa”), a gold distribution business. Valcambi is a London Gold Delivery precious metals refiner and manufacturer of semi-finished products for the Swiss luxury watch industry, and Finorafa is a distributor and financier of gold products in the Italian market, which is currently inactive. The additional interest in EGR resulted in the consolidation of EGR as of May 1, 2008 and increased Other current assets and Other current liabilities by $229 and $206, respectively. EGR’s revenue and expenses are included in Other income, net reflecting the service fee and secondary nature of EGR’s business to the Company’s central operations. Prior to consolidation, the Company accounted for EGR using the equity method of accounting.

NEWMONT MINING CORPORATION

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

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

NOTE 15 INVESTMENTS


	At June 30, 2008									At December 31, 2007
			Unrealized									Unrealized
	Cost/Equity Basis		Gain		Loss			Fair/Equity Value		Cost/Equity Basis		Gain		Loss			Fair/Equity Value
Current:
Marketable Equity Securities	$	31	$	43	$	(2	)	$	72	$	19	$	39	$	—		$	58
Other investments, at cost		—		—		—			—		3		—		—			3

	$	31	$	43	$	(2	)	$	72	$	22	$	39	$	—		$	61

Long-term:
Marketable Debt Securities
Auction rate securities	$	7	$	—	$	(3	)	$	4	$	7	$	—	$	(2	)	$	5
Asset backed securities		30		—		—			30		31		—		—			31

		37		—		(3	)		34		38		—		(2	)		36

Marketable Equity Securities
Canadian Oil Sands Trust		306		1,377		—			1,683		316		907		—			1,223
Gabriel Resources Ltd.		89		49		—			138		94		—		—			94
Shore Gold Inc.		45		—		—			45		80		—		—			80
Other		17		1		(1	)		17		37		15		(7	)		45

		457		1,427		(1	)		1,883		527		922		(7	)		1,442

Other investments, at cost		1		—		—			1		—		—		—			—

Investment in Affiliates:
European Gold Refineries		—		—		—			—		29		—		—			29
AGR Matthey Joint Venture		14		—		—			14		17		—		—			17
Regis Resources NL		1		—		—			1		3		—		—			3

		15		—		—			15		49		—		—			49

	$	510	$	1,427	$	(4	)	$	1,933	$	614	$	922	$	(9	)	$	1,527

During the second quarter of 2008, the Company recognized impairments in its investments for other-than-temporary declines in value of $23 in Shore Gold Inc.and $11 in other marketable securities, resulting in total impairments in the first half of 2008 of $32 in Shore Gold Inc., $13 in Gabriel Resources Ltd. and $11 in other marketable securities.

During the second quarter of 2008, the Company sold shares of marketable equity securities recognizing a gain of $10. During the first six month period of 2008, the unrealized value of the

NEWMONT MINING CORPORATION

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

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

Company’s investments in marketable equity securities increased by $513, primarily related to appreciation in the value of Canadian Oil Sands Trust.

During the first half of 2008, the Company purchased marketable equity securities of Gabriel Resources for $11 and other marketable securities for $6.

In April 2008, the Company purchased 15,960 shares of EGR for $11 in cash bringing its ownership interest to 56.67% from 46.72%, resulting in the consolidation of EGR. Prior to consolidation, the Company accounted for EGR using the equity method of accounting. The net investment was included in investments in affiliates until the purchase of the additional shares.

NOTE 16 INVENTORIES


	At June 30, 2008		At December 31, 2007
In-process	$	78	$	64
Concentrate		17		69
Precious metals		19		27
Materials, supplies and other		340		303

	$	454	$	463

NOTE 17 STOCKPILES AND ORE ON LEACH PADS


	At June 30, 2008		At December 31, 2007
Current:
Stockpiles	$	141	$	204
Ore on leach pads		226		169

	$	367	$	373

Long-term:
Stockpiles	$	668	$	528
Ore on leach pads		233		260

	$	901	$	788

NEWMONT MINING CORPORATION

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

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

NOTE 18 DEBT


	At June 30, 2008				At December 31, 2007
	Current		Non-Current		Current		Non-Current
Sale-leaseback of refractory ore treatment plant	$	24	$	188	$	22	$	212
Corporate revolving credit facility		—		475		—		—
5⁷/8% notes, net of discount		—		597		—		597
8⁵/8% debentures, net of discount		—		216		—		218
2014 convertible senior notes		—		575		—		575
2017 convertible senior notes		—		575		—		575
Newmont Australia 7⁵/8% guaranteed notes, net of premium		119		—		119		—
PTNNT project financing facility		87		263		87		306
Yanacocha credit facility		14		69		14		76
Yanacocha bonds		—		100		—		100
Project financings, capital leases and other		17		27		13		24

	$	261	$	3,085	$	255	$	2,683

During the first half of 2008, Newmont borrowed net proceeds of $475 under its $2,000 senior revolving credit facility. Scheduled minimum debt repayments at June 30, 2008 are $178 for the remainder of 2008, $142 in 2009, $147 in 2010, $323 in 2011, $610 in 2012 and $1,946 thereafter.

NOTE 19 OTHER LIABILITIES


	At June 30, 2008		At December 31, 2007
Other current liabilities:
Refinery metal accounts payable	$	223	$	—
Accrued operating costs		161		147
Accrued capital expenditures		118		172
Reclamation and remediation (Note 20)		78		71
Interest		38		40
Royalties		31		34
Taxes other than income and mining		28		23
Deferred revenue		7		3
Deferred income tax		5		131
Derivative instruments		1		3
Other		45		41

	$	735	$	665

Other long-term liabilities:
Income taxes	$	119	$	113
Derivative instruments		—		3
Other		34		34

	$	153	$	150

NEWMONT MINING CORPORATION

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

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

NOTE 20

RECLAMATION AND REMEDIATION LIABILITIES (ASSET RETIREMENT OBLIGATIONS)

At June 30, 2008 and December 31, 2007, $563 and $569, 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 June 30, 2008 and December 31, 2007, $179 and $125, 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:


	Six Months Ended June 30,
	2008			2007
Balance at beginning of period	$	694		$	598
Additions, changes in estimates and other		59			35
Liabilities settled		(32	)		(24	)
Accretion expense		21			19

Balance at end of period	$	742		$	628

The current portions of Reclamation and remediation liabilities of $78 and $71 at June 30, 2008 and December 31, 2007, respectively, are included in Other current liabilities.

The Company’s reclamation and remediation expenses consisted of:


	Three Months Ended June 30,				Six Months Ended June 30,
	2008		2007		2008		2007
Accretion—operating	$	8	$	8	$	16	$	15
Accretion—non-operating (Note 4)		3		2		5		4
Reclamation estimate revisions—non-operating (Note 4)		59		17		61		17

	$	70	$	27	$	82	$	36

Reclamation estimate revisions for the first half of 2008 primarily relate to an increase in the reclamation liability at the former Mt. Leyshon and Midnite mine sites. The Mt. Leyshon reclamation revision was for site characterization, stabilization and long-term surface water management due to overflow discharge from heavy rain. The Midnite mine reclamation increased in light of the recent decisions made in the U.S. District Court for the Eastern District of Washington. Reclamation estimate revisions for the first half of 2007 relate to the former Resurrection and Empire mines.

NEWMONT MINING CORPORATION

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

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

NOTE 21 NET CHANGE IN OPERATING ASSETS AND LIABILITIES

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


	Six Months Ended June 30,
	2008			2007
Increase in operating assets:
Trade and accounts receivable	$	(31	)	$	(16	)
Inventories, stockpiles and ore on leach pads		(102	)		(10	)
Other assets		(29	)		(39	)
Decrease in operating liabilities:
Accounts payable and other accrued liabilities		(70	)		(637	)
Reclamation liabilities		(32	)		(24	)

	$	(264	)	$	(726	)

The decrease in accounts payable and other accrued liabilities in 2007 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)

NOTE 22 SEGMENT INFORMATION

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

Three Months Ended June 30, 2008


	Nevada		Yanacocha			Australia/ New Zealand			Batu Hijau			Africa		Other Operations
Sales, net:
Gold	$	495	$	388		$	272		$	35		$	107	$	41
Copper	$	—	$	—		$	—		$	183		$	—	$	—
Cost applicable to sales:
Gold	$	238	$	161		$	170		$	19		$	46	$	21
Copper	$	—	$	—		$	—		$	104		$	—	$	—
Amortization:
Gold	$	60	$	44		$	31		$	3		$	18	$	5
Copper	$	—	$	—		$	—		$	20		$	—	$	—
Other	$	—	$	—		$	1		$	—		$	—	$	—
Accretion	$	1	$	3		$	2		$	2		$	—	$	—
Exploration	$	—	$	—		$	—		$	—		$	—	$	—
Advanced projects, research and development	$	2	$	1		$	2		$	—		$	3	$	2
Write-down of investments	$	—	$	—		$	—		$	—		$	—	$	—
Other expense	$	8	$	20		$	13		$	9		$	4	$	1
Other income, net	$	3	$	3		$	12		$	(1	)	$	9	$	—
Interest expense, net of capitalized interest	$	—	$	3		$	—		$	6		$	—	$	1
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	189	$	157		$	65		$	55		$	45	$	13
Equity loss of affiliates	$	—	$	—		$	—		$	—		$	—	$	—
Capital expenditures	$	80	$	38		$	236		$	32		$	35	$	3

	Total Operations		Hope Bay			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	1,338	$	—		$	—		$	1		$	1,339
Copper	$	183	$	—		$	—		$	—		$	183
Cost applicable to sales:
Gold	$	655	$	—		$	—		$	—		$	655
Copper	$	104	$	—		$	—		$	—		$	104
Amortization:
Gold	$	161	$	—		$	—		$	—		$	161
Copper	$	20	$	—		$	—		$	—		$	20
Other	$	1	$	—		$	—		$	2		$	3
Accretion	$	8	$	—		$	—		$	—		$	8
Exploration	$	—	$	—		$	59		$	—		$	59
Advanced projects, research and development	$	10	$	9		$	1		$	19		$	39
Write-down of investments	$	—	$	—		$	—		$	34		$	34
Other expense	$	55	$	—		$	—		$	63		$	118
Other income, net	$	26	$	—		$	1		$	26		$	53
Interest expense, net of capitalized interest	$	10	$	—		$	—		$	17		$	27
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	524	$	(10	)	$	(59	)	$	(145	)	$	310
Equity loss of affiliates	$	—	$	—		$	—		$	—		$	—
Capital expenditures	$	424	$	21		$	—		$	3		$	448

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 June 30, 2007

	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau			Africa		Other Operations
Sales, net:
Gold	$	349		$	208		$	201		$	59		$	82	$	36
Copper	$	—		$	—		$	—		$	340		$	—	$	—
Cost applicable to sales:
Gold	$	254		$	122		$	131		$	19		$	45	$	15
Copper	$	—		$	—		$	—		$	128		$	—	$	—
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	—		$	—		$	—	$	—
Amortization:
Gold	$	66		$	40		$	27		$	5		$	13	$	3
Copper	$	—		$	—		$	—		$	26		$	—	$	—
Other	$	—		$	—		$	1		$	—		$	—	$	—
Accretion	$	2		$	2		$	2		$	2		$	—	$	—
Exploration	$	—		$	—		$	—		$	—		$	—	$	—
Advanced projects, research and development	$	2		$	2		$	1		$	—		$	3	$	—
Other expense, net	$	10		$	11		$	10		$	7		$	2	$	4
Other income, net	$	2		$	5		$	1		$	1		$	—	$	1
Interest expense, net of capitalized interest	$	—		$	1		$	2		$	10		$	—	$	—
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	17		$	35		$	29		$	205		$	18	$	13
Equity income (loss) of affiliates	$	—		$	—		$	(1	)	$	—		$	—	$	—
Capital expenditures	$	119		$	58		$	128		$	17		$	19	$	5

	Total Operations			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	935		$	—		$	1		$	936
Copper	$	340		$	—		$	—		$	340
Cost applicable to sales:
Gold	$	586		$	—		$	—		$	586
Copper	$	128		$	—		$	—		$	128
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	531		$	531
Amortization:
Gold	$	154		$	—		$	—		$	154
Copper	$	26		$	—		$	—		$	26
Other	$	1		$	—		$	5		$	6
Accretion	$	8		$	—		$	—		$	8
Exploration	$	—		$	46		$	—		$	46
Advanced projects, research and development	$	8		$	—		$	5		$	13
Other expense, net	$	44		$	—		$	34		$	78
Other income, net	$	10		$	1		$	26		$	37
Interest expense, net of capitalized interest	$	13		$	—		$	12		$	25
Pre-tax income (loss) before minority interest and equity income of affiliates	$	317		$	(45	)	$	(594	)	$	(322	)
Equity income (loss) of affiliates	$	(1	)	$	—		$	1		$	—
Capital expenditures	$	346		$	—		$	4		$	350

NEWMONT MINING CORPORATION

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

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


Six Months Ended June 30, 2008

	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau			Africa			Other Operations
Sales, net:
Gold	$	986		$	887		$	542		$	147		$	204		$	83
Copper	$	—		$	—		$	—		$	615		$	—		$	—
Cost applicable to sales:
Gold	$	453		$	329		$	326		$	56		$	95		$	37
Copper	$	—		$	—		$	—		$	254		$	—		$	—
Amortization:
Gold	$	110		$	88		$	56		$	11		$	31		$	9
Copper	$	—		$	—		$	—		$	51		$	—		$	—
Other	$	—		$	—		$	2		$	—		$	—		$	—
Accretion	$	3		$	5		$	3		$	4		$	—		$	1
Exploration	$	—		$	—		$	—		$	—		$	—		$	—
Advanced projects, research and development	$	3		$	3		$	4		$	—		$	5		$	3
Write-down of investments	$	—		$	—		$	—		$	—		$	—		$	—
Other expense	$	15		$	41		$	23		$	16		$	6		$	1
Other income, net	$	4		$	7		$	22		$	2		$	9		$	—
Interest expense, net of capitalized interest	$	—		$	3		$	—		$	13		$	—		$	1
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	406		$	424		$	149		$	359		$	75		$	33
Equity loss of affiliates	$	—		$	—		$	(5	)	$	—		$	—		$	—
Capital expenditures	$	172		$	77		$	468		$	61		$	68		$	16

	Total Operations			Hope Bay			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	2,849		$	—		$	—		$	1		$	2,850
Copper	$	615		$	—		$	—		$	—		$	615
Cost applicable to sales:
Gold	$	1,296		$	—		$	—		$	—		$	1,296
Copper	$	254		$	—		$	—		$	—		$	254
Amortization:
Gold	$	305		$	—		$	—		$	—		$	305
Copper	$	51		$	—		$	—		$	—		$	51
Other	$	2		$	—		$	—		$	8		$	10
Accretion	$	16		$	—		$	—		$	—		$	16
Exploration	$	—		$	—		$	98		$	—		$	98
Advanced projects, research and development	$	18		$	13		$	1		$	37		$	69
Write-down of investments	$	—		$	—		$	—		$	56		$	56
Other expense	$	102		$	—		$	—		$	79		$	181
Other income, net	$	44		$	—		$	1		$	45		$	90
Interest expense, net of capitalized interest	$	17		$	—		$	—		$	30		$	47
Pre-tax income (loss) before minority interest and equity loss of affiliates	$	1,446		$	(13	)	$	(98	)	$	(229	)	$	1,106
Equity loss of affiliates	$	(5	)	$	—		$	—		$	—		$	(5	)
Capital expenditures	$	862		$	30		$	—		$	5		$	897

NEWMONT MINING CORPORATION

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

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


Six Months Ended June 30, 2007

	Nevada			Yanacocha			Australia/ New Zealand			Batu Hijau			Africa		Other Operations
Sales, net:
Gold	$	710		$	505		$	385		$	115		$	163	$	68
Copper	$	—		$	—		$	—		$	553		$	—	$	—
Cost applicable to sales:
Gold	$	525		$	250		$	279		$	46		$	86	$	30
Copper	$	—		$	—		$	—		$	251		$	—	$	—
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	—		$	—		$	—	$	—
Amortization:
Gold	$	121		$	82		$	53		$	11		$	23	$	8
Copper	$	—		$	—		$	—		$	54		$	—	$	—
Other	$	—		$	—		$	2		$	—		$	—	$	—
Accretion	$	3		$	4		$	4		$	3		$	—	$	1
Exploration	$	—		$	—		$	—		$	—		$	—	$	—
Advanced projects, research and development	$	2		$	4		$	2		$	—		$	9	$	—
Other expense, net	$	18		$	28		$	22		$	11		$	5	$	(9	)
Other income, net	$	3		$	11		$	8		$	5		$	1	$	1
Interest expense, net of capitalized interest	$	—		$	2		$	2		$	20		$	1	$	—
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	44		$	147		$	31		$	277		$	40	$	37
Equity income (loss) of affiliates	$	—		$	—		$	(2	)	$	—		$	—	$	—
Capital expenditures	$	277		$	114		$	224		$	24		$	56	$	8

	Total Operations			Exploration			Corporate and Other			Consolidated
Sales, net:
Gold	$	1,946		$	—		$	1		$	1,947
Copper	$	553		$	—		$	—		$	553
Cost applicable to sales:
Gold	$	1,216		$	—		$	—		$	1,216
Copper	$	251		$	—		$	—		$	251
Loss on settlement of price-capped forward sales contracts	$	—		$	—		$	531		$	531
Amortization:
Gold	$	298		$	—		$	—		$	298
Copper	$	54		$	—		$	—		$	54
Other	$	2		$	—		$	11		$	13
Accretion	$	15		$	—		$	—		$	15
Exploration	$	—		$	85		$	—		$	85
Advanced projects, research and development	$	17		$	—		$	12		$	29
Other expense, net	$	75		$	—		$	53		$	128
Other income, net	$	29		$	1		$	24		$	54
Interest expense, net of capitalized interest	$	25		$	—		$	24		$	49
Pre-tax income (loss) before minority interest and equity income (loss) of affiliates	$	576		$	(85	)	$	(673	)	$	(182	)
Equity income (loss) of affiliates	$	(2	)	$	—		$	2		$	—
Capital expenditures	$	703		$	—		$	7		$	710

NEWMONT MINING CORPORATION

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

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



	At June 30, 2008		At December 31, 2007
Goodwill:
Australia/New Zealand	$	186	$	186

Total assets:
Nevada	$	3,220	$	3,104
Yanacocha		2,132		1,908
Australia/New Zealand		2,383		1,876
Batu Hijau		2,337		2,471
Africa		1,146		1,082
Other operations		189		157
Hope Bay		1,877		1,566
Exploration		27		24
Corporate and other		3,929		3,386

Total assets from continuing operations		17,240		15,574
Assets held for sale		3		24

	$	17,243	$	15,598

NEWMONT MINING CORPORATION

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

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

NOTE 23 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 June 30, 2008
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	960		$	379		$	—		$	1,339
Sales—copper, net		—			183			—			—			183

		—			1,143			379			—			1,522

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			439			222			(6	)		655
Costs applicable to sales—copper ⁽¹⁾		—			104			—			—			104
Amortization		—			136			49			(1	)		184
Accretion		—			6			2			—			8
Exploration		—			34			25			—			59
Advanced projects, research and development		—			13			26			—			39
General and administrative		—			30			1			6			37
Write-down of investments		—			—			34			—			34
Other expense, net		—			63			54			1			118

		—			825			413			—			1,238

Other income (expense)
Other income, net		4			5			44			—			53
Interest income—intercompany		76			3			—			(79	)		—
Interest expense—intercompany		(2	)		—			(77	)		79			—
Interest expense, net of capitalized interest		(10	)		(15	)		(2	)		—			(27	)

		68			(7	)		(35	)		—			26

Income (loss) from continuing operations before taxes, minority interest and equity income (loss) of affiliates		68			311			(69	)		—			310
Income tax (expense) benefit		(48	)		67			18			—			37
Minority interest in income of subsidiaries		—			(75	)		7			—			(68	)
Equity income (loss) of affiliates		259			—			33			(292	)		—

Income (loss) from continuing operations		279			303			(11	)		(292	)		279
Income (loss) from discontinued operations		(2	)		—			(1	)		1			(2	)

Net income (loss)	$	277		$	303		$	(12	)	$	(291	)	$	277

⁽¹⁾	Exclusive of Amortization and Accretion.

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 June 30, 2007
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	647		$	289		$	—		$	936
Sales—copper, net		—			340			—			—			340

		—			987			289			—			1,276

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			410			179			(3	)		586
Costs applicable to sales—copper ⁽¹⁾		—			128			—			—			128
Loss on settlement of price-capped forward sales contracts		—			531			—			—			531
Amortization		—			146			40			—			186
Accretion		—			5			3			—			8
Exploration		—			32			14			—			46
Advanced projects, research and development		—			8			5			—			13
General and administrative		—			32			—			2			34
Other expense, net		—			59			18			1			78

		—			1,351			259			—			1,610

Other income (expense)
Other income, net		15			30			(8	)		—			37
Interest income—intercompany		35			26			(1	)		(60	)		—
Interest expense—intercompany		(1	)		—			(59	)		60			—
Interest expense, net of capitalized interest		(9	)		(12	)		(4	)		—			(25	)

		40			44			(72	)		—			12

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		40			(320	)		(42	)		—			(322	)
Income tax (expense) benefit		(15	)		(12	)		46			—			19
Minority interest in income of subsidiaries		—			(99	)		(4	)		5			(98	)
Equity (loss) income of affiliates		(426	)		—			(47	)		473			—

(Loss) income from continuing operations		(401	)		(431	)		(47	)		478			(401	)
(Loss) income from discontinued operations		(1,661	)		21			(1,672	)		1,651			(1,661	)

Net (loss) income	$	(2,062	)	$	(410	)	$	(1,719	)	$	2,129		$	(2,062	)

⁽¹⁾	Exclusive of Loss on settlement of price-capped forward sales contracts, Amortization and Accretion.

NEWMONT MINING CORPORATION

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

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


	Six Months Ended June 30, 2008
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	2,104		$	746		$	—		$	2,850
Sales—copper, net		—			615			—			—			615

		—			2,719			746			—			3,465

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			876			430			(10	)		1,296
Costs applicable to sales—copper ⁽¹⁾		—			254			—			—			254
Amortization		—			278			89			(1	)		366
Accretion		—			12			4			—			16
Exploration		—			60			38			—			98
Advanced projects, research and development		—			24			45			—			69
General and administrative		—			53			2			11			66
Write-down of investments		—			—			56			—			56
Other expense, net		—			115			66			—			181

		—			1,672			730			—			2,402

Other income (expense)
Other income, net		(9	)		53			46			—			90
Interest income—intercompany		145			20			—			(165	)		—
Interest expense—intercompany		(4	)		—			(161	)		165			—
Interest expense, net of capitalized interest		(20	)		(22	)		(5	)		—			(47	)

		112			51			(120	)		—			43

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		112			1,098			(104	)		—			1,106
Income tax (expense) benefit		(69	)		(163	)		34			—			(198	)
Minority interest in income of subsidiaries		—			(271	)		8			3			(260	)
Equity (loss) income of affiliates		600			1			72			(678	)		(5	)

Income (loss) from continuing operations		643			665			10			(675	)		643
Income (loss) from discontinued operations		4			1			3			(4	)		4

Net income (loss)	$	647		$	666		$	13		$	(679	)	$	647

⁽¹⁾	Exclusive of Amortization and Accretion.

NEWMONT MINING CORPORATION

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

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


	Six Months Ended June 30, 2007
Condensed Consolidating Statement of Income	Newmont Mining Corporation			Newmont USA			Other Subsidiaries			Eliminations			Newmont Mining Corporation Consolidated
Revenues
Sales—gold, net	$	—		$	1,390		$	557		$	—		$	1,947
Sales—copper, net		—			553			—			—			553

		—			1,943			557			—			2,500

Costs and expenses
Costs applicable to sales—gold ⁽¹⁾		—			850			373			(7	)		1,216
Costs applicable to sales—copper ⁽¹⁾		—			251			—			—			251
Loss on settlement of price-capped forward sales contracts		—			531			—			—			531
Amortization		—			287			78			—			365
Accretion		—			10			5			—			15
Exploration		—			58			27			—			85
Advanced projects, research and development		—			16			13			—			29
General and administrative		—			60			—			7			67
Other expense, net		—			108			20			—			128

		—			2,171			516			—			2,687

Other income (expense)
Other income, net		17			48			(11	)		—			54
Interest income—intercompany		66			51			—			(117	)		—
Interest expense—intercompany		(3	)		—			(114	)		117			—
Interest expense, net of capitalized interest		(18	)		(24	)		(7	)		—			(49	)

		62			75			(132	)		—			5

Income (loss) from continuing operations before taxes, minority interest and equity income of affiliates		62			(153	)		(91	)		—			(182	)
Income tax (expense) benefit		(21	)		(50	)		46			—			(25	)
Minority interest in income of subsidiaries		—			(154	)		(8	)		8			(154	)
Equity (loss) income of affiliates		(402	)		—			(30	)		432			—

(Loss) income from continuing operations		(361	)		(357	)		(83	)		440			(361	)
(Loss) income from discontinued operations		(1,633	)		17			(1,641	)		1,624			(1,633	)

Net (loss) income	$	(1,994	)	$	(340	)	$	(1,724	)	$	2,064		$	(1,994	)

⁽¹⁾	Exclusive of Loss on settlement of price-capped forward sales contracts, Amortization and Accretion.

NEWMONT MINING CORPORATION

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

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


	At June 30, 2008
Condensed Consolidating Balance Sheets	Newmont Mining Corporation		Newmont USA		Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
Assets
Cash and cash equivalents	$	—	$	763	$	273	$	—		$	1,036
Marketable securities and other short-term investments		1		3		68		—			72
Trade receivables		—		239		12		—			251
Accounts receivable		1,427		587		377		(2,232	)		159
Inventories		—		351		103		—			454
Stockpiles and ore on leach pads		—		320		47		—			367
Deferred income tax assets		—		81		21		—			102
Other current assets		1		100		305

At June 30,

Gross revenue subject to final price adjustments