Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2011
or
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o |
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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)
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Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
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84-1611629
(I.R.S. Employer
Identification No.) |
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6363 South Fiddlers Green Circle
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80111 |
Greenwood Village, Colorado
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(Zip Code) |
(Address of Principal Executive Offices) |
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Registrants 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. þ Yes o No
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
þ Yes o 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 12-b2 of the
Exchange Act.
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(Check one):
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Large accelerated filer þ
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company.) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of
the Exchange Act). o Yes þ No
There were 488,214,270 shares of common stock outstanding on October 20, 2011 (and 6,601,075
exchangeable shares).
PART IFINANCIAL INFORMATION
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ITEM 1. |
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FINANCIAL STATEMENTS. |
NEWMONT MINING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in millions except per share)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2011 |
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2010 |
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2011 |
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2010 |
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Sales (Note 3) |
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$ |
2,744 |
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$ |
2,597 |
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$ |
7,593 |
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$ |
6,992 |
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Costs and expenses |
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Costs applicable to sales (1) (Note 3) |
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1,008 |
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891 |
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2,865 |
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2,608 |
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Amortization |
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270 |
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242 |
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776 |
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697 |
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Reclamation and remediation (Note 4) |
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6 |
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18 |
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63 |
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44 |
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Exploration |
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104 |
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67 |
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255 |
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163 |
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Advanced projects, research and development (Note 5) |
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93 |
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46 |
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247 |
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149 |
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General and administrative |
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50 |
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45 |
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145 |
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133 |
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Other expense, net (Note 6) |
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36 |
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50 |
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196 |
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200 |
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1,567 |
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1,359 |
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4,547 |
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3,994 |
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Other income (expense) |
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Other income, net (Note 7) |
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(76 |
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5 |
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3 |
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97 |
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Interest expense, net |
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(65 |
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(66 |
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(193 |
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(210 |
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(141 |
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(61 |
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(190 |
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(113 |
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Income before income and mining tax and other items |
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1,036 |
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1,177 |
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2,856 |
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2,885 |
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Income and mining tax expense (Note 10) |
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(371 |
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(360 |
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(863 |
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(784 |
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Equity income (loss) of affiliates |
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10 |
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(3 |
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12 |
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(7 |
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Income from continuing operations |
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675 |
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814 |
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2,005 |
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2,094 |
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Loss from discontinued operations (Note 11) |
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(136 |
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Net income |
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675 |
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814 |
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1,869 |
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2,094 |
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Net income attributable to noncontrolling interests (Note 12) |
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(182 |
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(277 |
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(475 |
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(629 |
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Net income attributable to Newmont stockholders |
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$ |
493 |
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$ |
537 |
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$ |
1,394 |
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$ |
1,465 |
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Net income attributable to Newmont stockholders: |
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Continuing operations |
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$ |
493 |
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$ |
537 |
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$ |
1,530 |
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$ |
1,465 |
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Discontinued operations |
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(136 |
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$ |
493 |
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$ |
537 |
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$ |
1,394 |
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$ |
1,465 |
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Income per common share (2) (Note 13) |
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Basic: |
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Continuing operations |
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$ |
1.00 |
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$ |
1.09 |
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$ |
3.10 |
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$ |
2.98 |
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Discontinued operations |
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(0.28 |
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$ |
1.00 |
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$ |
1.09 |
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$ |
2.82 |
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$ |
2.98 |
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Diluted: |
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Continuing operations |
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$ |
0.98 |
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$ |
1.07 |
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$ |
3.05 |
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$ |
2.94 |
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Discontinued operations |
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(0.27 |
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$ |
0.98 |
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$ |
1.07 |
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$ |
2.78 |
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$ |
2.94 |
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Cash dividends declared per common share |
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$ |
0.30 |
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$ |
0.15 |
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$ |
0.65 |
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$ |
0.35 |
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(1) |
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Excludes Amortization and Reclamation and remediation. |
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(2) |
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Attributable to Newmont stockholders. |
The accompanying notes are an integral part of the condensed consolidated financial statements.
1
NEWMONT MINING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
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Nine Months Ended |
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September 30, |
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2011 |
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2010 |
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Operating activities: |
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Net income |
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$ |
1,869 |
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$ |
2,094 |
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Adjustments: |
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Amortization |
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776 |
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697 |
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Loss from discontinued operations |
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136 |
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Reclamation and remediation |
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63 |
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44 |
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Deferred income taxes |
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(106 |
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(52 |
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Stock based compensation and other non-cash benefits |
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62 |
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54 |
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Impairment of marketable securities |
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175 |
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Gain on asset sales, net |
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(68 |
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(54 |
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Other operating adjustments and write-downs |
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102 |
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138 |
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Net change in operating assets and liabilities (Note 25) |
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(343 |
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(586 |
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Net cash provided from continuing operations |
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2,666 |
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2,335 |
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Net cash used in discontinued operations |
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(4 |
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(13 |
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Net cash provided from operations |
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2,662 |
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2,322 |
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Investing activities: |
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Additions to property, plant and mine development |
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(1,781 |
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(972 |
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Proceeds from sale of marketable securities |
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74 |
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1 |
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Purchases of marketable securities |
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(17 |
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(9 |
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Acquisitions, net |
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(2,301 |
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(2 |
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Proceeds from sale of other assets |
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6 |
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53 |
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Other |
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(9 |
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(73 |
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Net cash used in investing activities |
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(4,028 |
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(1,002 |
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Financing activities: |
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Proceeds from debt, net |
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1,798 |
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Repayment of debt |
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(2,086 |
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(274 |
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Sale of noncontrolling interests |
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229 |
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Acquisition of noncontrolling interests |
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(109 |
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Dividends paid to common stockholders |
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(321 |
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(172 |
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Dividends paid to noncontrolling interests |
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(17 |
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(360 |
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Proceeds from stock issuance, net |
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35 |
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56 |
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Change in restricted cash and other |
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3 |
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46 |
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Net cash used in financing activities |
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(588 |
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(584 |
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Effect of exchange rate changes on cash |
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33 |
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Net change in cash and cash equivalents |
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(1,921 |
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736 |
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Cash and cash equivalents at beginning of period |
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4,056 |
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3,215 |
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Cash and cash equivalents at end of period |
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$ |
2,135 |
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$ |
3,951 |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
2
NEWMONT MINING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)
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At September 30, |
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At December 31, |
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2011 |
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2010 |
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ASSETS |
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Cash and cash equivalents |
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$ |
2,135 |
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$ |
4,056 |
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Trade receivables |
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312 |
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582 |
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Accounts receivable |
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259 |
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88 |
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Investments (Note 19) |
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94 |
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113 |
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Inventories (Note 20) |
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720 |
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658 |
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Stockpiles and ore on leach pads (Note 21) |
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627 |
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617 |
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Deferred income tax assets |
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425 |
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177 |
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Other current assets (Note 22) |
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1,788 |
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962 |
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Current assets |
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6,360 |
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7,253 |
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Property, plant and mine development, net |
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17,019 |
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12,907 |
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Investments (Note 19) |
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1,254 |
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1,568 |
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Stockpiles and ore on leach pads (Note 21) |
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2,096 |
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1,757 |
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Deferred income tax assets |
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1,629 |
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1,437 |
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Other long-term assets (Note 22) |
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781 |
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741 |
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Total assets |
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$ |
29,139 |
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$ |
25,663 |
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LIABILITIES |
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Debt (Note 23) |
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$ |
578 |
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$ |
259 |
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Accounts payable |
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542 |
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427 |
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Employee-related benefits |
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269 |
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288 |
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Income and mining taxes |
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381 |
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355 |
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Other current liabilities (Note 24) |
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2,705 |
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1,418 |
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Current liabilities |
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4,475 |
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2,747 |
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Debt (Note 23) |
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3,659 |
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4,182 |
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Reclamation and remediation liabilities (Note 4) |
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1,031 |
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|
984 |
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Deferred income tax liabilities |
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2,592 |
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1,488 |
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Employee-related benefits |
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350 |
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325 |
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Other long-term liabilities (Note 24) |
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328 |
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221 |
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Total liabilities |
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12,435 |
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9,947 |
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Commitments and contingencies (Note 28) |
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EQUITY |
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Common stock |
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|
781 |
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|
778 |
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Additional paid-in capital |
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8,364 |
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8,279 |
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Accumulated other comprehensive income |
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462 |
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1,108 |
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Retained earnings |
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4,253 |
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|
3,180 |
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Newmont stockholders equity |
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13,860 |
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|
13,345 |
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Noncontrolling interests |
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2,844 |
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|
2,371 |
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Total equity |
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16,704 |
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|
15,716 |
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Total liabilities and equity |
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$ |
29,139 |
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$ |
25,663 |
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The accompanying notes are an integral part of the condensed consolidated financial statements.
3
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 Newmonts Consolidated Financial Statements for the
year ended December 31, 2010 filed February 24, 2011 on Form 10-K. The year-end balance sheet data
was derived from the audited financial statements, but does not include all disclosures required by
United States generally accepted accounting principles (GAAP).
References to A$ refer to Australian currency, C$ to Canadian currency, NZ$ to New
Zealand currency and $ to United States currency.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recently Adopted Accounting Pronouncements
Business Combinations
In December 2010, FASB Accounting Standards Codification (ASC) guidance for business
combinations was updated to clarify existing guidance which requires a public entity to disclose
pro forma revenue and earnings of the combined entity as though the business combination(s) that
occurred during the current year had occurred as of the beginning of the comparable prior annual
period only. The update also expands the supplemental pro forma disclosures required to include a
description of the nature and amount of material, nonrecurring pro forma adjustments directly
attributable to the business combination included in the reported pro forma revenue and earnings.
Adoption of the updated guidance, effective for the Companys fiscal year beginning January 1,
2011, had no impact on the Companys consolidated financial position, results of operations or cash
flows.
Fair Value Accounting
In January 2010, ASC guidance for fair value measurements and disclosure was updated to
require enhanced detail in the level 3 reconciliation. Adoption of the updated guidance, effective
for the Companys fiscal year beginning January 1, 2011, had no impact on the Companys
consolidated financial position, results of operations or cash flows. Refer to Note 17 for further
details regarding the Companys assets and liabilities measured at fair value.
Recently Issued Accounting Pronouncements
Goodwill Impairment
In September 2011, ASC guidance was issued related to goodwill impairment. Under the updated
guidance, an entity will have the option to first assess qualitatively whether it is necessary to
perform the current two-step goodwill impairment test. If the Company believes, as a result of its
qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is
less than its carrying amount, the quantitative impairment test is required. Otherwise, no further
testing is required. The update does not change how the Company performs the two-step test under
current guidance. The update is effective for the Companys fiscal year beginning January 1, 2012
with early adoption permitted. The Company does not expect the updated guidance to have an impact
on the consolidated financial position, results of operations or cash flows.
4
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Comprehensive Income
In June 2011, ASC guidance was issued related to comprehensive income. Under the updated
guidance, an entity will have the option to present the total of comprehensive income either in a
single continuous statement of comprehensive income or in two separate but consecutive statements.
In addition, the update requires certain disclosure requirements when reporting other comprehensive
income. The update does not change the items reported in other comprehensive income or when an item
of other comprehensive income must be reclassified to income. The update is effective for the
Companys fiscal year beginning January 1, 2012. The Company does not expect the updated guidance
to have an impact on the consolidated financial position, results of operations or cash flows.
Fair Value Accounting
In May 2011, ASC guidance was issued related to disclosures around fair value accounting. The
updated guidance clarifies different components of fair value accounting including the application
of the highest and best use and valuation premise concepts, measuring the fair value of an
instrument classified in a reporting entitys shareholders equity and disclosing quantitative
information about the unobservable inputs used in fair value measurements that are categorized in
Level 3 of the fair value hierarchy. The update is effective for the Companys fiscal year
beginning January 1, 2012. The Company does not expect the updated guidance to have a significant
impact on the consolidated financial position, results of operations or cash flows.
5
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 3 SEGMENT INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
|
|
|
Advanced |
|
|
|
|
|
|
|
|
|
|
Applicable to |
|
|
|
|
|
|
Projects and |
|
|
Pre-Tax |
|
|
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
Three Months Ended September 30, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
712 |
|
|
$ |
267 |
|
|
$ |
69 |
|
|
$ |
39 |
|
|
$ |
333 |
|
La Herradura |
|
|
92 |
|
|
|
31 |
|
|
|
6 |
|
|
|
5 |
|
|
|
54 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
51 |
|
|
|
(54 |
) |
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
804 |
|
|
|
298 |
|
|
|
78 |
|
|
|
96 |
|
|
|
331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
544 |
|
|
|
194 |
|
|
|
67 |
|
|
|
8 |
|
|
|
280 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
|
(21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
544 |
|
|
|
194 |
|
|
|
67 |
|
|
|
30 |
|
|
|
259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
245 |
|
|
|
112 |
|
|
|
28 |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
40 |
|
|
|
28 |
|
|
|
6 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
285 |
|
|
|
140 |
|
|
|
34 |
|
|
|
3 |
|
|
|
124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
198 |
|
|
|
58 |
|
|
|
14 |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
233 |
|
|
|
73 |
|
|
|
16 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
431 |
|
|
|
131 |
|
|
|
30 |
|
|
|
2 |
|
|
|
258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Australia/New Zealand |
|
|
437 |
|
|
|
174 |
|
|
|
36 |
|
|
|
14 |
|
|
|
218 |
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
5 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
1,153 |
|
|
|
445 |
|
|
|
101 |
|
|
|
24 |
|
|
|
603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
243 |
|
|
|
71 |
|
|
|
19 |
|
|
|
11 |
|
|
|
134 |
|
Other Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
243 |
|
|
|
71 |
|
|
|
19 |
|
|
|
15 |
|
|
|
128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
32 |
|
|
|
(285 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
2,744 |
|
|
$ |
1,008 |
|
|
$ |
270 |
|
|
$ |
197 |
|
|
$ |
1,036 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
|
|
|
Advanced |
|
|
|
|
|
|
|
|
|
|
Applicable to |
|
|
|
|
|
|
Projects and |
|
|
Pre-Tax |
|
|
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
Three Months Ended September 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
568 |
|
|
$ |
259 |
|
|
$ |
68 |
|
|
$ |
27 |
|
|
$ |
204 |
|
La Herradura |
|
|
52 |
|
|
|
20 |
|
|
|
5 |
|
|
|
2 |
|
|
|
25 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
20 |
|
|
|
(23 |
) |
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
620 |
|
|
|
279 |
|
|
|
77 |
|
|
|
49 |
|
|
|
205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
436 |
|
|
|
149 |
|
|
|
42 |
|
|
|
6 |
|
|
|
221 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
436 |
|
|
|
149 |
|
|
|
42 |
|
|
|
17 |
|
|
|
210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
181 |
|
|
|
91 |
|
|
|
25 |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
38 |
|
|
|
19 |
|
|
|
5 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
219 |
|
|
|
110 |
|
|
|
30 |
|
|
|
1 |
|
|
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
260 |
|
|
|
47 |
|
|
|
12 |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
543 |
|
|
|
96 |
|
|
|
26 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
803 |
|
|
|
143 |
|
|
|
38 |
|
|
|
1 |
|
|
|
607 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Australia/New Zealand |
|
|
351 |
|
|
|
153 |
|
|
|
26 |
|
|
|
10 |
|
|
|
149 |
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
5 |
|
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
1,373 |
|
|
|
406 |
|
|
|
95 |
|
|
|
17 |
|
|
|
793 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
168 |
|
|
|
57 |
|
|
|
22 |
|
|
|
9 |
|
|
|
87 |
|
Other Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
168 |
|
|
|
57 |
|
|
|
22 |
|
|
|
10 |
|
|
|
85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
6 |
|
|
|
20 |
|
|
|
(116 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
2,597 |
|
|
$ |
891 |
|
|
$ |
242 |
|
|
$ |
113 |
|
|
$ |
1,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
|
|
|
Advanced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applicable to |
|
|
|
|
|
|
Projects and |
|
|
Pre-Tax |
|
|
Total |
|
|
Capital |
|
|
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
|
Assets |
|
|
Expenditures(1) |
|
Nine Months Ended September 30, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
1,823 |
|
|
$ |
763 |
|
|
$ |
197 |
|
|
$ |
94 |
|
|
$ |
744 |
|
|
$ |
6,820 |
|
|
$ |
380 |
|
La Herradura |
|
|
238 |
|
|
|
76 |
|
|
|
15 |
|
|
|
14 |
|
|
|
134 |
|
|
|
308 |
|
|
|
55 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
147 |
|
|
|
(157 |
) |
|
|
2,163 |
|
|
|
74 |
|
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
43 |
|
|
|
63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
2,061 |
|
|
|
839 |
|
|
|
222 |
|
|
|
257 |
|
|
|
764 |
|
|
|
9,354 |
|
|
|
509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
1,430 |
|
|
|
537 |
|
|
|
186 |
|
|
|
25 |
|
|
|
661 |
|
|
|
2,683 |
|
|
|
244 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46 |
|
|
|
(47 |
) |
|
|
812 |
|
|
|
448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
1,430 |
|
|
|
537 |
|
|
|
186 |
|
|
|
71 |
|
|
|
614 |
|
|
|
3,495 |
|
|
|
692 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
746 |
|
|
|
329 |
|
|
|
87 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
147 |
|
|
|
83 |
|
|
|
20 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
893 |
|
|
|
412 |
|
|
|
107 |
|
|
|
6 |
|
|
|
368 |
|
|
|
4,439 |
|
|
|
122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
430 |
|
|
|
122 |
|
|
|
28 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
844 |
|
|
|
241 |
|
|
|
54 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,274 |
|
|
|
363 |
|
|
|
82 |
|
|
|
3 |
|
|
|
767 |
|
|
|
3,690 |
|
|
|
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Australia/New Zealand |
|
|
1,227 |
|
|
|
498 |
|
|
|
102 |
|
|
|
36 |
|
|
|
583 |
|
|
|
1,169 |
|
|
|
212 |
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
11 |
|
|
|
(31 |
) |
|
|
415 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
3,394 |
|
|
|
1,273 |
|
|
|
293 |
|
|
|
56 |
|
|
|
1,687 |
|
|
|
9,713 |
|
|
|
491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
708 |
|
|
|
216 |
|
|
|
61 |
|
|
|
26 |
|
|
|
389 |
|
|
|
1,103 |
|
|
|
71 |
|
Other Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 |
|
|
|
(14 |
) |
|
|
424 |
|
|
|
127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
708 |
|
|
|
216 |
|
|
|
61 |
|
|
|
35 |
|
|
|
375 |
|
|
|
1,527 |
|
|
|
198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
83 |
|
|
|
(584 |
) |
|
|
5,050 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
7,593 |
|
|
$ |
2,865 |
|
|
$ |
776 |
|
|
$ |
502 |
|
|
$ |
2,856 |
|
|
$ |
29,139 |
|
|
$ |
1,913 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes an increase in accrued capital expenditures of $132; consolidated capital
expenditures on a cash basis were $1,781. |
8
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs |
|
|
|
|
|
|
Advanced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applicable to |
|
|
|
|
|
|
Projects and |
|
|
Pre-Tax |
|
|
Total |
|
|
Capital |
|
|
|
Sales |
|
|
Sales |
|
|
Amortization |
|
|
Exploration |
|
|
Income |
|
|
Assets |
|
|
Expenditures(1) |
|
Nine Months Ended September 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
1,540 |
|
|
$ |
756 |
|
|
$ |
194 |
|
|
$ |
64 |
|
|
$ |
495 |
|
|
$ |
3,306 |
|
|
$ |
200 |
|
La Herradura |
|
|
149 |
|
|
|
52 |
|
|
|
13 |
|
|
|
5 |
|
|
|
79 |
|
|
|
198 |
|
|
|
33 |
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
70 |
|
|
|
(80 |
) |
|
|
2,046 |
|
|
|
88 |
|
Other North America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
(4 |
) |
|
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
|
1,689 |
|
|
|
808 |
|
|
|
217 |
|
|
|
140 |
|
|
|
490 |
|
|
|
5,601 |
|
|
|
321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
1,321 |
|
|
|
442 |
|
|
|
119 |
|
|
|
17 |
|
|
|
686 |
|
|
|
2,645 |
|
|
|
109 |
|
Other South America |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26 |
|
|
|
(26 |
) |
|
|
256 |
|
|
|
86 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America |
|
|
1,321 |
|
|
|
442 |
|
|
|
119 |
|
|
|
43 |
|
|
|
660 |
|
|
|
2,901 |
|
|
|
195 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
582 |
|
|
|
284 |
|
|
|
81 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
117 |
|
|
|
68 |
|
|
|
18 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
699 |
|
|
|
352 |
|
|
|
99 |
|
|
|
5 |
|
|
|
206 |
|
|
|
4,181 |
|
|
|
106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold |
|
|
595 |
|
|
|
123 |
|
|
|
34 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Copper |
|
|
1,256 |
|
|
|
261 |
|
|
|
72 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
1,851 |
|
|
|
384 |
|
|
|
106 |
|
|
|
1 |
|
|
|
1,284 |
|
|
|
3,281 |
|
|
|
48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Australia/New Zealand |
|
|
973 |
|
|
|
446 |
|
|
|
82 |
|
|
|
21 |
|
|
|
417 |
|
|
|
913 |
|
|
|
111 |
|
Other Asia Pacific |
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
15 |
|
|
|
|
|
|
|
388 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific |
|
|
3,523 |
|
|
|
1,182 |
|
|
|
289 |
|
|
|
42 |
|
|
|
1,907 |
|
|
|
8,763 |
|
|
|
276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
459 |
|
|
|
176 |
|
|
|
58 |
|
|
|
15 |
|
|
|
203 |
|
|
|
1,039 |
|
|
|
80 |
|
Other Africa |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7 |
|
|
|
(7 |
) |
|
|
269 |
|
|
|
49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa |
|
|
459 |
|
|
|
176 |
|
|
|
58 |
|
|
|
22 |
|
|
|
196 |
|
|
|
1,308 |
|
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
65 |
|
|
|
(368 |
) |
|
|
5,803 |
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated |
|
$ |
6,992 |
|
|
$ |
2,608 |
|
|
$ |
697 |
|
|
$ |
312 |
|
|
$ |
2,885 |
|
|
$ |
24,376 |
|
|
$ |
944 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes a decrease in accrued capital expenditures of $28; consolidated capital
expenditures on a cash basis were $972. |
9
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 RECLAMATION AND REMEDIATION
At September 30, 2011 and December 31, 2010, $922 and $904, respectively, were accrued for
reclamation obligations relating to mineral properties. 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, 2011 and December 31, 2010, $166 and $144,
respectively, were accrued for such obligations. These amounts are also included in Reclamation and
remediation liabilities.
The following is a reconciliation of Reclamation and remediation liabilities:
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
Balance at beginning of period |
|
$ |
1,048 |
|
|
$ |
859 |
|
Additions, changes in estimates and other |
|
|
20 |
|
|
|
1 |
|
Liabilities settled |
|
|
(24 |
) |
|
|
(32 |
) |
Accretion expense |
|
|
44 |
|
|
|
39 |
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
1,088 |
|
|
$ |
867 |
|
|
|
|
|
|
|
|
The current portion of Reclamation and remediation liabilities of $57 and $64 at
September 30, 2011 and December 31, 2010, respectively, are included in Other current liabilities
(see Note 24).
The Companys reclamation and remediation expenses consisted of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Reclamation |
|
$ |
(9 |
) |
|
$ |
5 |
|
|
$ |
19 |
|
|
$ |
5 |
|
Accretion operating |
|
|
13 |
|
|
|
11 |
|
|
|
38 |
|
|
|
33 |
|
Accretion non-operating |
|
|
2 |
|
|
|
2 |
|
|
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6 |
|
|
$ |
18 |
|
|
$ |
63 |
|
|
$ |
44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 5 ADVANCED PROJECTS, RESEARCH AND DEVELOPMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Hope Bay |
|
$ |
36 |
|
|
$ |
13 |
|
|
$ |
115 |
|
|
$ |
48 |
|
Conga |
|
|
9 |
|
|
|
2 |
|
|
|
15 |
|
|
|
5 |
|
Akyem |
|
|
2 |
|
|
|
|
|
|
|
3 |
|
|
|
4 |
|
Technical and project services |
|
|
20 |
|
|
|
12 |
|
|
|
53 |
|
|
|
35 |
|
Corporate |
|
|
7 |
|
|
|
4 |
|
|
|
16 |
|
|
|
25 |
|
Other |
|
|
19 |
|
|
|
15 |
|
|
|
45 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
93 |
|
|
$ |
46 |
|
|
$ |
247 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 6 OTHER EXPENSE, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Regional administration |
|
$ |
18 |
|
|
$ |
16 |
|
|
$ |
55 |
|
|
$ |
47 |
|
Community development |
|
|
6 |
|
|
|
20 |
|
|
|
46 |
|
|
|
95 |
|
Fronteer acquisition costs |
|
|
1 |
|
|
|
|
|
|
|
22 |
|
|
|
|
|
Indonesian value added tax settlement |
|
|
|
|
|
|
|
|
|
|
21 |
|
|
|
|
|
Western Australia power plant |
|
|
3 |
|
|
|
|
|
|
|
12 |
|
|
|
7 |
|
Other |
|
|
8 |
|
|
|
14 |
|
|
|
40 |
|
|
|
51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
36 |
|
|
$ |
50 |
|
|
$ |
196 |
|
|
$ |
200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 7 OTHER INCOME, NET
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gain on sale of investments, net |
|
$ |
14 |
|
|
$ |
5 |
|
|
$ |
64 |
|
|
$ |
12 |
|
Income from developing projects, net |
|
|
16 |
|
|
|
13 |
|
|
|
36 |
|
|
|
13 |
|
Canadian Oil Sands |
|
|
9 |
|
|
|
14 |
|
|
|
25 |
|
|
|
39 |
|
Foreign currency exchange gain (loss), net |
|
|
39 |
|
|
|
(44 |
) |
|
|
10 |
|
|
|
(48 |
) |
Interest income |
|
|
2 |
|
|
|
3 |
|
|
|
8 |
|
|
|
8 |
|
Gain on asset sales, net |
|
|
1 |
|
|
|
|
|
|
|
4 |
|
|
|
42 |
|
Loss on ineffective portion of derivative
instruments, net |
|
|
(10 |
) |
|
|
|
|
|
|
(12 |
) |
|
|
(1 |
) |
Impairment of marketable securities |
|
|
(174 |
) |
|
|
|
|
|
|
(175 |
) |
|
|
|
|
Other |
|
|
27 |
|
|
|
14 |
|
|
|
43 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(76 |
) |
|
$ |
5 |
|
|
$ |
3 |
|
|
$ |
97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 8 EMPLOYEE PENSION AND OTHER BENEFIT PLANS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Pension benefit costs, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
7 |
|
|
$ |
5 |
|
|
$ |
19 |
|
|
$ |
16 |
|
Interest cost |
|
|
9 |
|
|
|
9 |
|
|
|
29 |
|
|
|
27 |
|
Expected return on plan assets |
|
|
(10 |
) |
|
|
(8 |
) |
|
|
(31 |
) |
|
|
(24 |
) |
Amortization, net |
|
|
5 |
|
|
|
5 |
|
|
|
17 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11 |
|
|
$ |
11 |
|
|
$ |
34 |
|
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Other benefit costs, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
1 |
|
|
$ |
1 |
|
|
$ |
2 |
|
|
$ |
2 |
|
Interest cost |
|
|
2 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
Amortization, net |
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2 |
|
|
$ |
2 |
|
|
$ |
5 |
|
|
$ |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
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 STOCK BASED COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Stock options |
|
$ |
5 |
|
|
$ |
3 |
|
|
$ |
15 |
|
|
$ |
12 |
|
Restricted stock units |
|
|
4 |
|
|
|
4 |
|
|
|
21 |
|
|
|
12 |
|
Performance leveraged stock units |
|
|
3 |
|
|
|
1 |
|
|
|
7 |
|
|
|
7 |
|
Restricted stock |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
2 |
|
Deferred stock |
|
|
|
|
|
|
2 |
|
|
|
3 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
12 |
|
|
$ |
11 |
|
|
$ |
46 |
|
|
$ |
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 10 INCOME AND MINING TAXES
During the third quarter of 2011, the Company recorded estimated income and mining tax expense
of $371 resulting in an effective tax rate of 36%. Estimated income and mining tax expense during
the third quarter of 2010 was $360 for an effective tax rate of 31%. The higher effective tax rate
in the third quarter of 2011 resulted from recording a valuation allowance on the deferred tax
asset that was generated as a result of the impairment loss on specific marketable equity
securities, as well as the change in the jurisdictional blend of the Companys taxable income and
the effect of percentage depletion. During the first nine months of 2011, estimated income and
mining tax expense was $863 resulting in an effective tax rate of 30%. Estimated income and mining
tax expense during the first nine months of 2010 was $784 for an effective tax rate of 27%. The
higher effective tax rate in the first nine months of 2011 was due to recording a valuation
allowance related to the impairment loss on specific marketable equity securities as well as a
large benefit in the prior year resulting from the restructuring of the form of the Companys
non-US subsidiaries.
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 pay the
income 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 Companys
business conducted within the country involved.
During the quarter, the U.S. Internal Revenue Service issued a Technical Advice Memorandum
(TAM) to the Company regarding the U.S. income tax treatment of the Price Capped Forward Sales
Contracts settled in cash in 2007. The TAM provides guidance which is unfavorable to the Company.
The Company intends to vigorously defend its positions through all processes available to it and
believes it should prevail.
At September 30, 2011, the Companys total unrecognized tax benefit was $111 for uncertain
income tax positions taken or expected to be taken on income tax returns. Of this, $44 represents
the amount of unrecognized tax benefits that, if recognized, would affect the Companys effective
income tax rate.
As a result of the statute of limitations that expire in the next 12 months in various
jurisdictions, and 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 net unrecognized income tax
benefits will decrease by approximately $5 to $10 in the next 12 months.
12
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The Companys income and mining tax expense differed from the amounts computed by applying the
United States statutory corporate income tax rate for the following reasons:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Income before income and mining tax and other items |
|
$ |
1,036 |
|
|
$ |
1,177 |
|
|
$ |
2,856 |
|
|
$ |
2,885 |
|
United States statutory corporate income tax rate |
|
|
35 |
% |
|
|
35 |
% |
|
|
35 |
% |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income and mining tax expense computed
at United States statutory corporate income
tax rate |
|
|
(363 |
) |
|
|
(412 |
) |
|
|
(1,000 |
) |
|
|
(1,010 |
) |
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax benefit generated on change in form
of a non-U.S. subsidiary |
|
|
|
|
|
|
|
|
|
|
65 |
|
|
|
127 |
|
Percentage depletion |
|
|
45 |
|
|
|
34 |
|
|
|
156 |
|
|
|
88 |
|
Valuation allowance |
|
|
(38 |
) |
|
|
|
|
|
|
(38 |
) |
|
|
5 |
|
Other |
|
|
(15 |
) |
|
|
18 |
|
|
|
(46 |
) |
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income and mining tax expense |
|
$ |
(371 |
) |
|
$ |
(360 |
) |
|
$ |
(863 |
) |
|
$ |
(784 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 11 DISCONTINUED OPERATIONS
Discontinued operations include Holloway Mining Company, which owned the Holt-McDermott
property (Holt property) and was sold to St. Andrew Goldfields Ltd. (St. Andrew) in 2006. In
2009, the Superior Court issued a decision finding Newmont Canada Corporation (Newmont Canada)
liable for a sliding scale royalty on production from the Holt property, which Newmont Canada
appealed. In December 2010, the Company recognized a $28 charge, net of tax benefits of $12,
related to these legal claims. In May 2011, the Ontario Court of Appeal upheld the Superior Court
ruling resulting in an additional $136 charge, net of tax benefits of $7, in the second quarter.
Net operating cash used in discontinued operations was $4 and $13 in the first nine months of
2011 and 2010, respectively. In 2011, Newmont Canada made payments related to the Holt property
royalty and the 2010 amount related to the Kori Kollo operation in Bolivia which was sold in 2009.
NOTE 12 NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Batu Hijau |
|
$ |
85 |
|
|
$ |
203 |
|
|
$ |
251 |
|
|
$ |
405 |
|
Yanacocha |
|
|
94 |
|
|
|
72 |
|
|
|
226 |
|
|
|
223 |
|
Other |
|
|
3 |
|
|
|
2 |
|
|
|
(2 |
) |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
182 |
|
|
$ |
277 |
|
|
$ |
475 |
|
|
$ |
629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2011, Newmont had a 48.5% effective economic interest in PT Newmont Nusa
Tenggara (PTNNT). PTNNT operates the Batu Hijau copper and gold mine in Indonesia. Based on ASC
guidance for variable interest entities, Newmont continues to consolidate PTNNT in its Condensed
Consolidated Financial Statements.
Newmont has a 51.35% ownership interest in Minera Yanacocha S.R.L. (Yanacocha), with the
remaining interests held by Compañia de Minas Buenaventura, S.A.A. (43.65%) and the International
Finance Corporation (5%).
13
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 INCOME PER COMMON SHARE
Basic income per common share is computed by dividing income available to Newmont common
stockholders by the weighted average number of common shares outstanding during the period. Diluted
income per common share is computed similarly to basic income per common share except that weighted
average common shares is increased to include the potential issuance of dilutive common shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Net income attributable to Newmont
stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
493 |
|
|
$ |
537 |
|
|
$ |
1,530 |
|
|
$ |
1,465 |
|
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
(136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
493 |
|
|
$ |
537 |
|
|
$ |
1,394 |
|
|
$ |
1,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares (millions): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
494 |
|
|
|
493 |
|
|
|
494 |
|
|
|
492 |
|
Effect of employee stock-based awards |
|
|
2 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
Effect of convertible notes |
|
|
8 |
|
|
|
8 |
|
|
|
7 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
504 |
|
|
|
502 |
|
|
|
502 |
|
|
|
498 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont
stockholders per common share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
1.00 |
|
|
$ |
1.09 |
|
|
$ |
3.10 |
|
|
$ |
2.98 |
|
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
(0.28 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1.00 |
|
|
$ |
1.09 |
|
|
$ |
2.82 |
|
|
$ |
2.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.98 |
|
|
$ |
1.07 |
|
|
$ |
3.05 |
|
|
$ |
2.94 |
|
Discontinued operations |
|
|
|
|
|
|
|
|
|
|
(0.27 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
0.98 |
|
|
$ |
1.07 |
|
|
$ |
2.78 |
|
|
$ |
2.94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options to purchase 3 and 2 million shares of common stock at average exercise prices of
$57 and $57 were outstanding at September 30, 2011 and 2010, respectively, but were not included in
the computation of diluted weighted average common shares because their effect would have been
anti-dilutive.
In February 2009 and July 2007, Newmont issued $518 and $1,150, respectively, of Convertible
Senior Notes that, if converted in the future, may have a dilutive effect on the Companys weighted
average number of common shares. The notes issued in 2009 and 2007 are convertible, at the holders
option, equivalent to a conversion price of $45.90 and $45.86, respectively, per share of common
stock. Under the convertible note indenture, Newmont is required to settle the principal amount of
the Convertible Senior Notes in cash and may elect to settle the remaining conversion obligation
(Newmont average share price in excess of the conversion price), if any, in cash, shares or a
combination thereof. The effect of contingently convertible instruments on diluted earnings per
share is calculated under the net share settlement method in accordance with ASC guidance. The
average price of the Companys common stock exceeded the conversion prices for all periods
presented, resulting in additional shares included in the computation of diluted weighted average
common shares.
In connection with the 2007 Convertible Senior Notes offering, the Company entered into Call
Spread Transactions which included the purchase of call options and the sale of warrants. As a
result of the Call Spread Transactions, the conversion price of $45.86 was effectively increased to
$59.81. Should the warrant transactions become dilutive to the Companys earnings per share
(Newmonts average share price exceeds $59.81) the effect of the warrant transactions on diluted
earnings per share will be calculated in accordance with the net share settlement method.
14
NEWMONT MINING CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
The Net income attributable to Newmont stockholders and transfers with noncontrolling
interests was:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Net income attributable to Newmont stockholders |
|
$ |
493 |
|
|
$ |
537 |
|
|
$ |
1,394 |
|
|
$ |
1,465 |
|
Transfers with noncontrolling interests: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in Additional paid in
capital
from PTNNT share transactions,
net of tax of $7 and $40, respectively |
|
|
|
|
|
|
(7 |
) |
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders
and transfers from noncontrolling interests |
|
$ |
493 |
|
|
$ |
530 |
|
|
$ |
1,394 |
|
|
$ |
1,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOTE 14 COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Net income |
|
$ |
675 |
|
|
$ |
814 |
|
|
$ |
1,869 |
|
|
$ |
2,094 |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable
securities |
|
|
(270 |
) |
|
|
58 |
|
|
|
(345 |
) |
|
|
30 |
|
Foreign currency translation adjustments |
|
|
(163 |
) |
|
|
34 |
|
|
|
(36 |
) |
|
|
35 |
|
Pension and other benefit liability
adjustments |
|
|
3 |
|
|
|
3 |
|
|
|
11 |
|
|
|
8 |
|
Change in fair value of cash flow hedge
instruments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change from periodic revaluations |
|
|
(389 |
) |
|
|
163 |
|
|
|
(172 |
) |
|
|
120 |
|
Net amount reclassified to income |
|
|
(32 |
) |
|
|
(15 |
) |
|
|
(104 |
) |
|
|
(50 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrecognized gain (loss) on
derivatives |
|
|
(421 |
) |
|
|
148 |
|
|
|
(276 |
) |
|
|
70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(851 |
) |
|
|
243 |
|
|
|
(646 |
) |
|
|
143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) |
|
$ |
(176 |
) |
|
$ |
1,057 |
|
|
$ |
1,223 |
|
|
$ |
2,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont stockholders |
|
$ |
(355 |
) |
|
$ |
779 |
|
|
$ |
748 |
|
|
$ |
1,607 |
|
Noncontrolling interests |
|
|
179 |
|
|
|
278 |
|
|
|
475 |
|
|
|
630 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(176 |
) |
|
$ |
1,057 |
|
|
$ |
1,223 |
|
|
$ |
2,237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
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 CHANGES IN EQUITY
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
Common stock: |
|
|
|
|
|
|
|
|
At beginning of period |
|
$ |
778 |
|
|
$ |
770 |
|
Stock based awards |
|
|
3 |
|
|
|
4 |
|
Shares issued in exchange for exchangeable shares |
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
At end of period |
|
|
781 |
|
|
|
778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
8,279 |
|
|
|
8,158 |
|
Stock based awards |
|
|
86 |
|
|
|
97 |
|
Shares issued in exchange for exchangeable shares |
|
|
(1 |
) |
|
|
(4 |
) |
Sale of noncontrolling interests |
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
At end of period |
|
|
8,364 |
|
|
|
8,260 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
1,108 |
|
|
|
626 |
|
Other comprehensive income |
|
|
(646 |
) |
|
|
142 |
|
|
|
|
|
|
|
|
At end of period |
|
|
462 |
|
|
|
768 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained earnings: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
3,180 |
|
|
|
1,149 |
|
Net income attributable to Newmont stockholders |
|
|
1,394 |
|
|
|
1,465 |
|
Dividends paid |
|
|
(321 |
) |
|
|
(172 |
) |
|
|
|
|
|
|
|
At end of period |
|
|
4,253 |
|
|
|
2,442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests: |
|
|
|
|
|
|
|
|
At beginning of period |
|
|
2,371 |
|
|
|
1,910 |
|
Net income attributable to noncontrolling interests |
|
|
475 |
|
|
|
629 |
|
Dividends paid |
|
|
(2 |
) |
|
|
(367 |
) |
Other comprehensive income |
|
|
|
|
|
|
1 |
|
Sale of noncontrolling interests, net |
|
|
|
|
|
|
98 |
|
At end of period |
|
|
2,844 |
|
|
|
2,271 |
|
|
|
|
|
|
|
|
Total equity |
|
$ |
16,704 |
|
|
$ |
14,519 |
|
|
|
|
|
|
|
|
16
NEWMONT MINING CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 16 ACQUISITIONS
On February 3, 2011, we announced an agreement with Fronteer Gold, Inc. (Fronteer) to
acquire all of the outstanding common shares of Fronteer. On April 6, 2011, Newmont acquired 153
million common shares of Fronteer pursuant to the Companys offer. Under the Arrangement,
shareholders of Fronteer received C$14.00 in cash and one-fourth common share in Pilot Gold, which
retained certain exploration assets of Fronteer, for each common share of Fronteer. Fronteer owns,
among other assets, the exploration stage Long Canyon project, which is located approximately one
hundred miles from the Companys existing infrastructure in Nevada and provides the potential for
significant development and operating synergies.
In connection with the acquisition, Newmont incurred transaction costs of $22, which were
recorded in Other Expense, net.
The Fronteer purchase price of $2,259 was preliminarily allocated based on the estimated fair
values of assets acquired and liabilities assumed at the April 6, 2011 acquisition date as follows:
|
|
|
|
|
Assets: |
|
|
|
|
Cash |
|
$ |
2 |
|
Property, plant and mine development, net |
|
|
3,208 |
|
Investments |
|
|
281 |
|
Other assets |
|
|
6 |
|
|
|
|
|
|
|
$ |
3,497 |
|
|
|
|
|
Liabilities: |
|
|
|
|
Deferred income tax liability |
|
$ |
1,223 |
|
Other liabilities |
|
|
15 |
|
|
|
|
|
|
|
|
1,238 |
|
|
|
|
|
Net assets acquired |
|
$ |
2,259 |
|
|
|
|
|
The final allocation of the purchase price will be completed in the fourth quarter.
The pro forma impact of the acquisition on Net Income was not material as Fronteer was not in
production.
NOTE 17 FAIR VALUE ACCOUNTING
Fair value accounting 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 are described below:
|
|
|
Level 1
|
|
Unadjusted quoted prices in active markets that are accessible at the
measurement date for identical, unrestricted assets or liabilities; |
|
|
|
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; and |
|
|
|
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 Companys assets and liabilities measured at fair value on
a recurring basis (at least annually) by level within the fair value hierarchy. As required by
accounting guidance, assets and liabilities are classified in their entirety based on the lowest
level of input that is significant to the fair value measurement.
17
NEWMONT MINING CORPORATION
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value at September 30, 2011 |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents |
|
$ |
94 |
|
|
$ |
94 |
|
|
$ |
|
|
|
$ |
|
|
Marketable equity securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Extractive industries |
|
|
1,237 |
|
|
|
1,237 |
|
|
|
|
|
|
|
|
|
Other |
|
|
6 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
Marketable debt securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset backed commercial paper |
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
18 |
|
Corporate |
|
|
9 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
Auction rate securities |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
Trade
receivable from provisional copper and gold concentrate sales, net |
|
|
201 |
|
|
|
201 |
|
|
|
|
|
|
|
|
|
Derivative instruments, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange forward contracts |
|
|
50 |
|
|
|
|
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,620 |
|
|
$ |
1,547 |
|
|
$ |
50 |
|
|
$ |
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative instruments, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward starting swap contracts |
|
$ |
356 |
|
|
$ |
|
|
|
$ |
356 |
|
|
$ |
|
|
Boddington contingent consideration |
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
61 |
|
Holt property royalty |
|
|
179 |
|
|
|
|
|
|
|
|
|
|
|
179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
596 |
|
|
$ |
|
|
|
$ |
356 |
|
|
$ |
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Companys cash equivalent instruments are classified within Level 1 of the fair value
hierarchy because they are valued using quoted market prices. The cash equivalent instruments that
are valued based on quoted market prices in active markets are primarily money market securities
and U.S. Treasury securities.
The Companys 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 securities are
segregated based on industry. 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 Companys marketable debt securities include investments in auction rate securities and
asset backed commercial paper. The Company reviews the fair value for auction rate securities and
asset backed commercial paper on at least a quarterly basis. The auction rate securities are traded
in markets that are not active, trade infrequently and have little price transparency. The Company
estimated the fair value of the auction rate securities based on weighted average risk calculations
using probabilistic cash flow assumptions. The Company estimated the fair value of the asset backed
commercial paper using a probability of return to each class of notes reflective of information
reviewed regarding the separate classes of securities. The auction rate securities and asset backed
commercial paper are classified within Level 3 of the fair value hierarchy. The Companys corporate
marketable debt securities are valued using quoted market prices in active markets and as such are
classified within Level 1 of the fair value hierarchy.
The Companys net trade receivable from provisional copper and gold concentrate sales, subject
to final pricing, is valued using quoted market prices based on forward curves and, as such, is
classified within Level 1 of the fair value hierarchy.
The Companys derivative instruments are valued using pricing models and the Company generally
uses similar models to value similar instruments. 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 Companys derivatives trade in liquid markets, and as such,
model inputs can generally be verified and do not involve significant management judgment. Such
instruments are classified within Level 2 of the fair value hierarchy.
18
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 recorded a contingent consideration liability related to the 2009 acquisition of
the final 33.33% interest in Boddington. The estimated value of the contingent consideration was
determined using a valuation model which simulates future gold and copper prices and costs
applicable to sales. The contingent consideration liability is classified within Level 3 of the
fair value hierarchy.
The Company recorded a sliding scale royalty liability related to the divestiture of the Holt
property. The estimated fair value of the liability was determined using a Monte Carlo valuation
model to simulate future gold prices utilizing a $1,300 per ounce long-term assumption, various
gold production scenarios based on publicly available reserve and resource information for the Holt
property and a 4.2% weighted average discount rate. The contingent royalty liability is classified
within Level 3 of the fair value hierarchy.
The table below sets forth a summary of changes in the fair value of the Companys Level 3
financial assets and liabilities for the nine months ended September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Backed |
|
|
|
|
|
|
Boddington |
|
|
|
|
|
|
|
|
|
Auction Rate |
|
|
Commercial |
|
|
|
|
|
|
Contingent |
|
|
Holt Property |
|
|
Total |
|
|
|
Securities |
|
|
Paper |
|
|
Total Assets |
|
|
Consideration |
|
|
Royalty |
|
|
Liabilities |
|
Balance at beginning of period |
|
$ |
5 |
|
|
$ |
19 |
|
|
$ |
24 |
|
|
$ |
83 |
|
|
$ |
|
|
|
$ |
83 |
|
Unrealized loss |
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Settlements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22 |
) |
|
|
(4 |
) |
|
|
(26 |
) |
Valuation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
183 |
|
|
|
183 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at end of period |
|
$ |
5 |
|
|
$ |
18 |
|
|
$ |
23 |
|
|
$ |
61 |
|
|
$ |
179 |
|
|
$ |
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized losses of $1 were included in Accumulated other comprehensive income as a
result of changes in C$ exchange rates from January 1, 2011 to September 30, 2011. At September 30,
2011, assets and liabilities classified within Level 3 of the fair value hierarchy represent 1% and
40%, respectively, of total assets and liabilities measured at fair value.
NOTE 18 DERIVATIVE INSTRUMENTS
The Companys strategy is to provide shareholders with leverage to changes in gold and copper
prices by selling its production at spot market prices. Consequently, the Company does not hedge
its gold and copper sales. The Company continues to manage certain risks associated with commodity
input costs, interest rates and foreign currencies using the derivative market. All of the
derivative instruments described below were transacted for risk management purposes and qualify as
cash flow or fair value hedges.
Cash Flow Hedges
The foreign currency, diesel and forward starting swap contracts are designated as cash flow
hedges, and as such, the effective portion of unrealized changes in market value have been recorded
in Accumulated other comprehensive income and are reclassified to income during the period in which
the hedged transaction affects earnings. Gains and losses from hedge ineffectiveness are recognized
in current earnings.
Foreign Currency Contracts
Newmont utilizes foreign currency contracts to reduce the variability of the US dollar amount
of forecasted foreign currency expenditures caused by changes in exchange rates. Newmont hedges a
portion of the Companys A$ and NZ$ denominated operating expenditures which results in a blended
rate realized each period. The hedging instruments are fixed forward contracts with expiration
dates ranging up to five years from the date of issue. The principal hedging objective is reduction
in the volatility of realized period-on-period $/A$ and $/NZ$ rates, respectively.
In June 2011, Newmont began hedging a portion of the Companys A$ denominated capital
expenditures related to the construction of the Akyem project in Africa utilizing foreign currency
contracts. The hedging instruments are fixed forward contracts with expiration dates ranging up to
two years.
19
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
In July 2011, Newmont began hedging a portion of the Companys A$ denominated capital
expenditures related to the construction of a mine shaft at Tanami in Australia utilizing foreign
currency contracts. The hedging instruments are fixed forward contracts with expiration dates
ranging up to three years.
Newmont had the following foreign currency derivative contracts outstanding at September 30,
2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/ |
|
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
2014 |
|
|
2015 |
|
|
2016 |
|
|
Average |
|
A$ Operating Fixed Forward Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A$ notional (millions) |
|
|
315 |
|
|
|
1,114 |
|
|
|
863 |
|
|
|
576 |
|
|
|
292 |
|
|
|
63 |
|
|
|
3,223 |
|
Average rate ($/A$) |
|
|
0.87 |
|
|
|
0.90 |
|
|
|
0.91 |
|
|
|
0.89 |
|
|
|
0.86 |
|
|
|
0.90 |
|
|
|
0.90 |
|
Expected hedge ratio |
|
|
84 |
% |
|
|
70 |
% |
|
|
53 |
% |
|
|
37 |
% |
|
|
19 |
% |
|
|
6 |
% |
|
|
|
|
A$ Capital Fixed Forward Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A$ notional (millions) |
|
|
11 |
|
|
|
57 |
|
|
|
51 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
141 |
|
Average rate ($/A$) |
|
|
1.03 |
|
|
|
1.01 |
|
|
|
0.98 |
|
|
|
0.96 |
|
|
|
|
|
|
|
|
|
|
|
0.99 |
|
Expected hedge ratio |
|
|
55 |
% |
|
|
41 |
% |
|
|
28 |
% |
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
NZ$ Operating Fixed Forward Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NZ$ notional (millions) |
|
|
20 |
|
|
|
53 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88 |
|
Average rate ($/NZ$) |
|
|
0.73 |
|
|
|
0.75 |
|
|
|
0.78 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.75 |
|
Expected hedge ratio |
|
|
64 |
% |
|
|
41 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diesel Fixed Forward Contracts
Newmont hedges a portion of its operating cost exposure related to diesel consumed at its
Nevada operations to reduce the variability in realized diesel prices. The hedging instruments
consist of a series of financially settled fixed forward contracts with expiration dates ranging up
to two years from the date of issue.
Newmont had the following diesel derivative contracts outstanding at September 30, 2011:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected Maturity Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/ |
|
|
|
2011 |
|
|
2012 |
|
|
2013 |
|
|
Average |
|
Diesel Fixed Forward Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diesel gallons (millions) |
|
|
6 |
|
|
|
18 |
|
|
|
4 |
|
|
|
28 |
|
Average rate ($/gallon) |
|
|
2.61 |
|
|
|
2.77 |
|
|
|
2.96 |
|
|
|
2.76 |
|
Expected hedge ratio |
|
|
58 |
% |
|
|
39 |
% |
|
|
10 |
% |
|
|
|
|
Forward Starting Swap Contracts
During the three months ended September 30, 2011, Newmont increased its forward starting swaps
position to a total notional value of $2,000. These swaps hedge movements in treasury rates related
to an expected debt issuance. During the third quarter, the Company revised its expected debt
issuance date to the first half of 2012 and extended the terms of the forward starting swap contracts resulting in the
recognition of a $10 charge related to hedge ineffectiveness. At September 30, 2011, the hedge
contracts were in a liability position of $356. The proceeds from the expected debt issuance will
be adjusted by the fair value of the swap contracts at the time of issuance.
20
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Fair Value Hedges
Interest Rate Swap Contracts
Newmont had $222 fixed to floating swap contracts designated as a hedge against debt which
matured in May 2011.
Derivative Instrument Fair Values
Newmont had the following derivative instruments designated as hedges at September 30, 2011
and December 31, 2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
At September 30, 2011 |
|
|
|
Other |
|
|
|
|
|
|
Other |
|
|
Other Long- |
|
|
|
Current |
|
|
Other Long- |
|
|
Current |
|
|
Term |
|
|
|
Assets |
|
|
Term Assets |
|
|
Liabilities |
|
|
Liabilities |
|
Foreign currency exchange contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A$ operating fixed forward contracts |
|
$ |
88 |
|
|
$ |
51 |
|
|
$ |
51 |
|
|
$ |
29 |
|
A$ capital fixed forward contracts |
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
5 |
|
NZ$ operating fixed forward contracts |
|
|
2 |
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
Diesel fixed forward contracts |
|
|
5 |
|
|
|
|
|
|
|
3 |
|
|
|
2 |
|
Forward starting swap contracts |
|
|
|
|
|
|
|
|
|
|
356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative instruments (Note 22 and 24) |
|
$ |
95 |
|
|
$ |
51 |
|
|
$ |
415 |
|
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
At December 31, 2010 |
|
|
|
Other |
|
|
|
|
|
|
Other |
|
|
Other Long- |
|
|
|
Current |
|
|
Other Long- |
|
|
Current |
|
|
Term |
|
|
|
Assets |
|
|
Term Assets |
|
|
Liabilities |
|
|
Liabilities |
|
Foreign currency exchange contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A$ operating fixed forward contracts |
|
$ |
181 |
|
|
|
114 |
|
|
|
|
|
|
|
|
|
NZ$ operating fixed forward contracts |
|
|
5 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Diesel fixed forward contracts |
|
|
7 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Interest rate swap contracts |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative instruments (Note 22 and 24) |
|
$ |
196 |
|
|
$ |
116 |
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
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 tables show the location and amount of gains (losses) reported in the
Companys Condensed Consolidated Financial Statements related to the Companys cash flow and fair
value hedges and the gains (losses) recorded for the hedged item related to the fair value hedges.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency |
|
|
|
|
|
|
|
|
|
|
Forward Starting Swap |
|
|
|
Exchange Contracts |
|
|
Diesel Forward Contracts |
|
|
Contracts |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
For the three months ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss)
recognized in other
comprehensive income
(effective portion) |
|
$ |
(263 |
) |
|
$ |
232 |
|
|
$ |
(7 |
) |
|
$ |
5 |
|
|
$ |
(345 |
) |
|
$ |
|
|
Gain reclassified
from Accumulated other
comprehensive income into
income (effective
portion) (1) |
|
|
50 |
|
|
|
18 |
|
|
|
3 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Loss reclassified
from Accumulated other
comprehensive income into
income (ineffective
portion) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
For the nine months ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss)
recognized in other
comprehensive income
(effective portion) |
|
$ |
(70 |
) |
|
$ |
174 |
|
|
$ |
3 |
|
|
$ |
|
|
|
$ |
(356 |
) |
|
$ |
|
|
Gain reclassified
from Accumulated other
comprehensive income into
income (effective
portion) (1) |
|
|
141 |
|
|
|
63 |
|
|
|
12 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
Loss reclassified
from Accumulated other
comprehensive income into
income (ineffective
portion) (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
|
|
(1) |
|
The gain for the effective portion of foreign exchange and diesel cash flow hedges
reclassified from Accumulated other comprehensive income is included in Costs applicable to sales. |
|
(2) |
|
The ineffective portion recognized for cash flow hedges is included in Other Income,
net. |
22
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Rate |
|
|
8 5/8% Debentures |
|
|
|
Swap Contracts |
|
|
(Hedged Portion) |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
For the three months ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain recognized in
income (effective
portion) (1) |
|
$ |
|
|
|
$ |
1 |
|
|
$ |
|
|
|
$ |
2 |
|
Gain (loss) recognized
in income (ineffective
portion) (2) |
|
|
|
|
|
|
(1 |
) |
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value hedging relationships: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) recognized
in income (effective
portion) (1) |
|
$ |
3 |
|
|
$ |
4 |
|
|
$ |
(6 |
) |
|
$ |
4 |
|
Gain (loss) recognized
in income (ineffective
portion) (2) |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
2 |
|
|
|
|
(1) |
|
The gain (loss) recognized for the effective portion of fair value hedges and
the underlying hedged debt is included in Interest expense, net. |
|
(2) |
|
The ineffective portion recognized for fair value hedges and the underlying hedged
debt is included in Other income, net. |
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 $48.
Provisional Copper and Gold Sales
The Companys 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 gold and copper concentrates at the prevailing indices prices 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.
London Metal Exchange (LME) copper prices averaged $4.07 per pound during the three months ended September 30, 2011,
compared with the Companys recorded average provisional price of $3.91 per pound before
mark-to-market losses and treatment and refining charges. LME copper prices averaged $4.20 per
pound during the nine months ended September 30, 2011, compared with the Companys recorded average
provisional price of $4.17 per pound before mark-to-market losses and treatment and refining
charges. During the three and nine months ended September 30, 2011, changes in copper prices
resulted in a provisional pricing mark-to-market loss of $74 ($0.80 per pound) and $102 ($0.37 per
pound), respectively. At September 30, 2011, Newmont had copper sales of 102 million pounds priced
at an average of $3.24 per pound, subject to final pricing over the next several months.
The average London P.M. fix for gold was $1,702 per ounce during the three months ended
September 30, 2011, compared with the Companys recorded average provisional price of $1,691 per
ounce before mark-to-market gains and treatment and refining charges. The average London P.M. fix
for gold was $1,534 per ounce during the nine months ended September 30, 2011, compared to the
Companys recorded average provisional price of $1,525 per ounce before mark-to-market gains and
treatment and refining charges. During the three and nine months ended September 30, 2011, changes
in gold prices resulted in a provisional pricing mark-to-market gain of $20 ($14 per ounce) and $38
($9 per ounce), respectively. At September 30, 2011, Newmont had gold sales of 79,000 ounces priced
at an average of $1,621 per ounce, subject to final pricing over the next several months.
23
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 19 INVESTMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2011 |
|
|
|
Cost/Equity |
|
|
Unrealized |
|
|
Fair/Equity |
|
|
|
Basis |
|
|
Gain |
|
|
Loss |
|
|
Basis |
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paladin Energy Ltd. |
|
$ |
60 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
60 |
|
Other |
|
|
21 |
|
|
|
17 |
|
|
|
(4 |
) |
|
|
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
81 |
|
|
$ |
17 |
|
|
$ |
(4 |
) |
|
$ |
94 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset backed commercial paper |
|
$ |
24 |
|
|
$ |
|
|
|
$ |
(6 |
) |
|
$ |
18 |
|
Auction rate securities |
|
|
7 |
|
|
|
|
|
|
|
(2 |
) |
|
|
5 |
|
Corporate |
|
|
8 |
|
|
|
1 |
|
|
|
|
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 |
|
|
|
1 |
|
|
|
(8 |
) |
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Oil Sands Ltd. |
|
|
296 |
|
|
|
308 |
|
|
|
|
|
|
|
604 |
|
Gabriel Resources Ltd. |
|
|
74 |
|
|
|
209 |
|
|
|
|
|
|
|
283 |
|
Regis Resources Ltd. |
|
|
23 |
|
|
|
154 |
|
|
|
|
|
|
|
177 |
|
Other |
|
|
94 |
|
|
|
12 |
|
|
|
(21 |
) |
|
|
85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
487 |
|
|
|
683 |
|
|
|
(21 |
) |
|
|
1,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments, at cost |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Affiliates: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La Zanja |
|
|
63 |
|
|
|
|
|
|
|
|
|
|
|
63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
599 |
|
|
$ |
684 |
|
|
$ |
(29 |
) |
|
$ |
1,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2010 |
|
|
|
Cost/Equity |
|
|
Unrealized |
|
|
Fair/Equity |
|
|
|
Basis |
|
|
Gain |
|
|
Loss |
|
|
Basis |
|
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Gold Inc. |
|
$ |
5 |
|
|
$ |
54 |
|
|
$ |
|
|
|
$ |
59 |
|
Other |
|
|
19 |
|
|
|
35 |
|
|
|
|
|
|
|
54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
24 |
|
|
$ |
89 |
|
|
$ |
|
|
|
$ |
113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset backed commercial paper |
|
$ |
25 |
|
|
$ |
|
|
|
$ |
(6 |
) |
|
$ |
19 |
|
Auction rate securities |
|
|
7 |
|
|
|
|
|
|
|
(2 |
) |
|
|
5 |
|
Corporate |
|
|
7 |
|
|
|
3 |
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39 |
|
|
|
3 |
|
|
|
(8 |
) |
|
|
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable Equity Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Oil Sands Ltd. |
|
|
308 |
|
|
|
508 |
|
|
|
|
|
|
|
816 |
|
Gabriel Resources Ltd. |
|
|
78 |
|
|
|
325 |
|
|
|
|
|
|
|
403 |
|
Regis Resources Ltd. |
|
|
23 |
|
|
|
148 |
|
|
|
|
|
|
|
171 |
|
Other |
|
|
39 |
|
|
|
37 |
|
|
|
|
|
|
|
76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
448 |
|
|
|
1,018 |
|
|
|
|
|
|
|
1,466 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investments, at cost |
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in Affiliates: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
La Zanja |
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
555 |
|
|
$ |
1,021 |
|
|
$ |
(8 |
) |
|
$ |
1,568 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in Investments at September 30, 2011 and December 31, 2010 are $9 and $10,
respectively, of long-term marketable debt securities and $6 and $6 of long-term marketable equity
securities, respectively, that are legally pledged for purposes of settling asset retirement
obligations related to the San Jose Reservoir at Yanacocha.
In conjunction with the April 6, 2011 acquisition of Fronteer, Newmont acquired $208 of
Paladin Energy Ltd. securities and $73 of other marketable equity securities and warrants. During
the first nine months of 2011 and 2010, the Company purchased other marketable securities for $17
and $9, respectively. In June 2011, Newmont sold its investment in New Gold Inc. and realized a
gain of $50. In July 2011, Newmont sold its investment in other marketable equity securities and
realized a gain of $14.
During the third quarter of 2011, the Company recognized impairments for other-than-temporary
declines in value in accordance with ASC guidance of $148 for Paladin Energy Ltd. and $26 for other
marketable equity securities acquired in the Fronteer acquisition.
25
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 tables present the gross unrealized losses and fair value of the Companys
investments with unrealized losses that are not deemed to be other-than-temporarily impaired,
aggregated by length of time that the individual securities have been in a continuous unrealized
loss position:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
At September 30, 2011 |
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
Marketable equity securities |
|
$ |
27 |
|
|
$ |
25 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
27 |
|
|
$ |
25 |
|
Asset backed commercial paper |
|
|
|
|
|
|
|
|
|
|
18 |
|
|
|
6 |
|
|
|
18 |
|
|
|
6 |
|
Auction rate securities |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
2 |
|
|
|
5 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
27 |
|
|
$ |
25 |
|
|
$ |
23 |
|
|
$ |
8 |
|
|
$ |
50 |
|
|
$ |
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 Months |
|
|
12 Months or Greater |
|
|
Total |
|
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
|
|
|
|
|
Unrealized |
|
At December 31, 2010 |
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
|
Fair Value |
|
|
Losses |
|
Asset backed commercial paper |
|
$ |
|
|
|
$ |
|
|
|
$ |
19 |
|
|
$ |
6 |
|
|
$ |
19 |
|
|
$ |
6 |
|
Auction rate securities |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
2 |
|
|
|
5 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
24 |
|
|
$ |
8 |
|
|
$ |
24 |
|
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in the tables above are the unrealized losses of $33 and $8 at September 30,
2011 and December 31, 2010, respectively, related to the Companys investments in asset backed
commercial paper, auction rate securities and marketable equity securities as listed in the tables
above. While the fair values of these investments are below their respective cost, the Company
views these declines as temporary. The Company intends to hold its investment in auction rate
securities and asset backed commercial paper until maturity or such time that the market recovers
and therefore considers these losses temporary.
NOTE 20 INVENTORIES
|
|
|
|
|
|
|
|
|
|
|
At September 30, |
|
|
At December 31, |
|
|
|
2011 |
|
|
2010 |
|
In-process |
|
$ |
110 |
|
|
$ |
142 |
|
Concentrate |
|
|
121 |
|
|
|
111 |
|
Precious metals |
|
|
40 |
|
|
|
4 |
|
Materials, supplies and other |
|
|
449 |
|
|
|
401 |
|
|
|
|
|
|
|
|
|
|
$ |
720 |
|
|
$ |
658 |
|
|
|
|
|
|
|
|
26
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 STOCKPILES AND ORE ON LEACH PADS
|
|
|
|
|
|
|
|
|
|
|
At September 30, |
|
|
At December 31, |
|
|
|
2011 |
|
|
2010 |
|
Current: |
|
|
|
|
|
|
|
|
Stockpiles |
|
$ |
426 |
|
|
$ |
389 |
|
Ore on leach pads |
|
|
201 |
|
|
|
228 |
|
|
|
|
|
|
|
|
|
|
$ |
627 |
|
|
$ |
617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term: |
|
|
|
|
|
|
|
|
Stockpiles |
|
$ |
1,787 |
|
|
$ |
1,397 |
|
Ore on leach pads |
|
|
309 |
|
|
|
360 |
|
|
|
|
|
|
|
|
|
|
$ |
2,096 |
|
|
$ |
1,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, |
|
|
At December 31, |
|
|
|
2011 |
|
|
2010 |
|
Stockpiles and ore on leach pads: |
|
|
|
|
|
|
|
|
Nevada |
|
$ |
518 |
|
|
$ |
479 |
|
La Herradura |
|
|
9 |
|
|
|
6 |
|
Yanacocha |
|
|
460 |
|
|
|
496 |
|
Boddington |
|
|
407 |
|
|
|
248 |
|
Batu Hijau |
|
|
1,035 |
|
|
|
879 |
|
Other Australia/New Zealand |
|
|
146 |
|
|
|
145 |
|
Ahafo |
|
|
148 |
|
|
|
121 |
|
|
|
|
|
|
|
|
|
|
$ |
2,723 |
|
|
$ |
2,374 |
|
|
|
|
|
|
|
|
NOTE 22 OTHER ASSETS
|
|
|
|
|
|
|
|
|
|
|
At September 30, |
|
|
At December 31, |
|
|
|
2011 |
|
|
2010 |
|
Other current assets: |
|
|
|
|
|
|
|
|
Refinery metal inventory and receivable |
|
$ |
1,445 |
|
|
$ |
617 |
|
Prepaid assets |
|
|
155 |
|
|
|
65 |
|
Derivative instruments |
|
|
95 |
|
|
|
196 |
|
Other |
|
|
93 |
|
|
|
84 |
|
|
|
|
|
|
|
|
|
|
$ |
1,788 |
|
|
$ |
962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term assets: |
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
188 |
|
|
$ |
188 |
|
Intangible assets |
|
|
149 |
|
|
|
91 |
|
Income tax receivable |
|
|
141 |
|
|
|
119 |
|
Debt issuance costs |
|
|
60 |
|
|
|
39 |
|
Derivative instruments |
|
|
51 |
|
|
|
116 |
|
Restricted cash |
|
|
22 |
|
|
|
25 |
|
Other |
|
|
170 |
|
|
|
163 |
|
|
|
|
|
|
|
|
|
|
$ |
781 |
|
|
$ |
741 |
|
|
|
|
|
|
|
|
27
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 DEBT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At September 30, 2011 |
|
|
At December 31, 2010 |
|
|
|
Current |
|
|
Non-Current |
|
|
Current |
|
|
Non-Current |
|
Sale-leaseback of refractory ore treatment plant |
|
$ |
61 |
|
|
$ |
73 |
|
|
$ |
30 |
|
|
$ |
134 |
|
8 5/8% debentures, net of discount (due 2011) |
|
|
|
|
|
|
|
|
|
|
217 |
|
|
|
|
|
2012 Convertible Senior Notes, net of discount |
|
|
507 |
|
|
|
|
|
|
|
|
|
|
|
488 |
|
2014 Convertible Senior Notes, net of discount |
|
|
|
|
|
|
506 |
|
|
|
|
|
|
|
489 |
|
2017 Convertible Senior Notes, net of discount |
|
|
|
|
|
|
448 |
|
|
|
|
|
|
|
434 |
|
2019 Senior Notes, net of discount |
|
|
|
|
|
|
896 |
|
|
|
|
|
|
|
896 |
|
2035 Senior Notes, net of discount |
|
|
|
|
|
|
598 |
|
|
|
|
|
|
|
598 |
|
2039 Senior Notes, net of discount |
|
|
|
|
|
|
1,087 |
|
|
|
|
|
|
|
1,087 |
|
Ahafo project facility |
|
|
10 |
|
|
|
50 |
|
|
|
10 |
|
|
|
55 |
|
Other capital leases |
|
|
|
|
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
578 |
|
|
$ |
3,659 |
|
|
$ |
259 |
|
|
$ |
4,182 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In May 2011, Newmont repaid the $223 balance outstanding on the 8 5/8% debentures.
Scheduled minimum debt repayments are $5 for the remainder of 2011, $578 in 2012, $42 in 2013, $550
in 2014, $18 in 2015 and $3,044 thereafter.
Corporate Revolving Credit Facility
Effective May 20, 2011, the Company entered into a new uncollateralized $2,500 revolving
credit facility with a syndicate of commercial banks. This new revolving credit facility replaced
the existing revolving credit facility which was cancelled upon the effectiveness of the new
facility. The new facility provides for borrowings in U.S. dollars and contains a letter of credit
sub-facility. The new facility matures in May 2016. Interest rates and facility fees vary based on
the credit ratings of the Companys senior, uncollateralized, long-term debt. Borrowings under the
facility bear interest at a market based rate plus a margin determined by the Companys credit.
Facility fees currently accrue at an annual rate of 0.175% of the aggregate commitments. At
September 30, 2011, there were no borrowings outstanding and $241 outstanding in letters of credit.
Subsidiary Financings
PTNNT Revolving Credit Facility
Effective May 27, 2011, PTNNT entered into a new $600 reducing revolving credit facility with
a syndicate of banks. This new reducing revolving credit facility provides for borrowings in U.S.
dollars. The facility matures in March 2017. The facility is non-recourse to Newmont and
substantially all of PTNNTs assets are pledged as collateral. Borrowings under the facility bear
interest at a rate per annum equal to LIBOR plus a margin of 4.00%. Commitment fees currently
accrue on the daily average unused amount of the commitment of each lender at an annual rate of
2.00%. There were no borrowings outstanding under the facility at September 30, 2011.
28
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts
NOTE 24 OTHER LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
At September 30, |
|
|
At December 31, |
|
|
|
2011 |
|
|
2010 |
|
Other current liabilities: |
|
|
|
|
|
|
|
|
Refinery metal payable |
|
$ |
1,445 |
|
|
$ |
617 |
|
Derivative instruments |
|
|
415 |
|
|
|
|
|
Accrued operating costs |
|
|
245 |
|
|
|
217 |
|
Accrued capital expenditures |
|
|
208 |
|
|
|
83 |
|
Interest |
|
|
86 |
|
|
|
66 |
|
Taxes other than income and mining |
|
|
80 |
|
|
|
135 |
|
Reclamation and remediation liabilities |
|
|
57 |
|
|
|
64 |
|
Boddington contingent consideration |
|
|
51 |
|
|
|
32 |
|
Royalties |
|
|
42 |
|
|
|
90 |
|
Deferred income tax |
|
|
15 |
|
|
|
54 |
|
Holt property royalty |
|
|
13 |
|
|
|
|
|
Other |
|
|
48 |
|
|
|
60 |
|
|
|
|
|
|
|
|
|
|
$ |
2,705 |
|
|
$ |
1,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities: |
|
|
|
|
|
|
|
|
Holt property royalty |
|
$ |
166 |
|
|
$ |
40 |
|
Power supply agreements |
|
|
43 |
|
|
|
45 |
|
Derivative instruments |
|
|
37 |
|
|
|
|
|
Income and mining taxes |
|
|
34 |
|
|
|
36 |
|
Boddington contingent consideration |
|
|
10 |
|
|
|
51 |
|
Other |
|
|
38 |
|
|
|
49 |
|
|
|
|
|
|
|
|
|
|
$ |
328 |
|
|
$ |
221 |
|
|
|
|
|
|
|
|
NOTE 25 NET CHANGE IN OPERATING ASSETS AND LIABILITIES
Net cash provided from operations attributable to the net change in operating assets and
liabilities is composed of the following:
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
Decrease (increase) in operating assets: |
|
|
|
|
|
|
|
|
Trade and accounts receivable |
|
$ |
125 |
|
|
$ |
(63 |
) |
Inventories, stockpiles and ore on leach pads |
|
|
(332 |
) |
|
|
(297 |
) |
EGR refinery assets |
|
|
(855 |
) |
|
|
(200 |
) |
Other assets |
|
|
(109 |
) |
|
|
(50 |
) |
Increase (decrease) in operating liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and other accrued liabilities |
|
|
(3 |
) |
|
|
(144 |
) |
EGR refinery liabilities |
|
|
855 |
|
|
|
200 |
|
Reclamation liabilities |
|
|
(24 |
) |
|
|
(32 |
) |
|
|
|
|
|
|
|
|
|
$ |
(343 |
) |
|
$ |
(586 |
) |
|
|
|
|
|
|
|
29
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 26 SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
Income and mining taxes, net of refunds |
|
$ |
1,301 |
|
|
$ |
926 |
|
Pension plan and other benefits and contributions |
|
$ |
12 |
|
|
$ |
72 |
|
Interest, net of amounts capitalized |
|
$ |
117 |
|
|
$ |
138 |
|
NOTE 27 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
Newmont USA, a 100% owned subsidiary of Newmont Mining Corporation, has fully and
unconditionally guaranteed the 2019, 2035 and 2039 senior notes, the 2012, 2014 and 2017
convertible senior notes and the corporate revolving credit facility. The following 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, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
|
|
|
$ |
1,779 |
|
|
$ |
965 |
|
|
$ |
|
|
|
$ |
2,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales (1) |
|
|
|
|
|
|
623 |
|
|
|
393 |
|
|
|
(8 |
) |
|
|
1,008 |
|
Amortization |
|
|
|
|
|
|
175 |
|
|
|
96 |
|
|
|
(1 |
) |
|
|
270 |
|
Reclamation and remediation |
|
|
|
|
|
|
2 |
|
|
|
4 |
|
|
|
|
|
|
|
6 |
|
Exploration |
|
|
|
|
|
|
52 |
|
|
|
52 |
|
|
|
|
|
|
|
104 |
|
Advanced projects, research and development |
|
|
|
|
|
|
47 |
|
|
|
46 |
|
|
|
|
|
|
|
93 |
|
General and administrative |
|
|
|
|
|
|
41 |
|
|
|
|
|
|
|
9 |
|
|
|
50 |
|
Other expense, net |
|
|
|
|
|
|
17 |
|
|
|
19 |
|
|
|
|
|
|
|
36 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
957 |
|
|
|
610 |
|
|
|
|
|
|
|
1,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
(161 |
) |
|
|
31 |
|
|
|
54 |
|
|
|
|
|
|
|
(76 |
) |
Interest income intercompany |
|
|
39 |
|
|
|
2 |
|
|
|
7 |
|
|
|
(48 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(8 |
) |
|
|
|
|
|
|
(40 |
) |
|
|
48 |
|
|
|
|
|
Interest expense, net |
|
|
(55 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
(65 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(185 |
) |
|
|
27 |
|
|
|
17 |
|
|
|
|
|
|
|
(141 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income and mining tax and other items |
|
|
(185 |
) |
|
|
849 |
|
|
|
372 |
|
|
|
|
|
|
|
1,036 |
|
Income and mining tax expense |
|
|
30 |
|
|
|
(288 |
) |
|
|
(113 |
) |
|
|
|
|
|
|
(371 |
) |
Equity income (loss) of affiliates |
|
|
648 |
|
|
|
(19 |
) |
|
|
81 |
|
|
|
(700 |
) |
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
493 |
|
|
|
542 |
|
|
|
340 |
|
|
|
(700 |
) |
|
|
675 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
(186 |
) |
|
|
(17 |
) |
|
|
21 |
|
|
|
(182 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders |
|
$ |
493 |
|
|
$ |
356 |
|
|
$ |
323 |
|
|
$ |
(679 |
) |
|
$ |
493 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Excludes Amortization and Reclamation and remediation. |
30
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, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
|
|
|
$ |
1,860 |
|
|
$ |
737 |
|
|
$ |
|
|
|
$ |
2,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales (1) |
|
|
|
|
|
|
571 |
|
|
|
326 |
|
|
|
(6 |
) |
|
|
891 |
|
Amortization |
|
|
|
|
|
|
159 |
|
|
|
83 |
|
|
|
|
|
|
|
242 |
|
Reclamation and remediation |
|
|
|
|
|
|
13 |
|
|
|
5 |
|
|
|
|
|
|
|
18 |
|
Exploration |
|
|
|
|
|
|
41 |
|
|
|
26 |
|
|
|
|
|
|
|
67 |
|
Advanced projects, research and development |
|
|
|
|
|
|
26 |
|
|
|
21 |
|
|
|
(1 |
) |
|
|
46 |
|
General and administrative |
|
|
|
|
|
|
37 |
|
|
|
1 |
|
|
|
7 |
|
|
|
45 |
|
Other expense, net |
|
|
|
|
|
|
41 |
|
|
|
9 |
|
|
|
|
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
888 |
|
|
|
471 |
|
|
|
|
|
|
|
1,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
|
|
|
|
1 |
|
|
|
4 |
|
|
|
|
|
|
|
5 |
|
Interest income intercompany |
|
|
35 |
|
|
|
2 |
|
|
|
|
|
|
|
(37 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(3 |
) |
|
|
|
|
|
|
(34 |
) |
|
|
37 |
|
|
|
|
|
Interest expense, net |
|
|
(61 |
) |
|
|
(3 |
) |
|
|
(2 |
) |
|
|
|
|
|
|
(66 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(29 |
) |
|
|
|
|
|
|
(32 |
) |
|
|
|
|
|
|
(61 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income and mining tax and other items |
|
|
(29 |
) |
|
|
972 |
|
|
|
234 |
|
|
|
|
|
|
|
1,177 |
|
Income and mining tax expense |
|
|
(1 |
) |
|
|
(309 |
) |
|
|
(50 |
) |
|
|
|
|
|
|
(360 |
) |
Equity income (loss) of affiliates |
|
|
567 |
|
|
|
1 |
|
|
|
79 |
|
|
|
(650 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
537 |
|
|
|
664 |
|
|
|
263 |
|
|
|
(650 |
) |
|
|
814 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
(346 |
) |
|
|
25 |
|
|
|
44 |
|
|
|
(277 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders |
|
$ |
537 |
|
|
$ |
318 |
|
|
$ |
288 |
|
|
$ |
(606 |
) |
|
$ |
537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Excludes Amortization and Reclamation and remediation. |
31
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, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
|
|
|
$ |
4,765 |
|
|
$ |
2,828 |
|
|
$ |
|
|
|
$ |
7,593 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales (1) |
|
|
|
|
|
|
1,740 |
|
|
|
1,152 |
|
|
|
(27 |
) |
|
|
2,865 |
|
Amortization |
|
|
|
|
|
|
490 |
|
|
|
287 |
|
|
|
(1 |
) |
|
|
776 |
|
Reclamation and remediation |
|
|
|
|
|
|
50 |
|
|
|
13 |
|
|
|
|
|
|
|
63 |
|
Exploration |
|
|
|
|
|
|
133 |
|
|
|
122 |
|
|
|
|
|
|
|
255 |
|
Advanced projects, research and development |
|
|
|
|
|
|
115 |
|
|
|
133 |
|
|
|
(1 |
) |
|
|
247 |
|
General and administrative |
|
|
|
|
|
|
114 |
|
|
|
2 |
|
|
|
29 |
|
|
|
145 |
|
Other expense, net |
|
|
|
|
|
|
138 |
|
|
|
58 |
|
|
|
|
|
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,780 |
|
|
|
1,767 |
|
|
|
|
|
|
|
4,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
(169 |
) |
|
|
98 |
|
|
|
74 |
|
|
|
|
|
|
|
3 |
|
Interest income intercompany |
|
|
115 |
|
|
|
6 |
|
|
|
11 |
|
|
|
(132 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(14 |
) |
|
|
|
|
|
|
(118 |
) |
|
|
132 |
|
|
|
|
|
Interest expense, net |
|
|
(168 |
) |
|
|
(18 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
(193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(236 |
) |
|
|
86 |
|
|
|
(40 |
) |
|
|
|
|
|
|
(190 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income and mining tax and other items |
|
|
(236 |
) |
|
|
2,071 |
|
|
|
1,021 |
|
|
|
|
|
|
|
2,856 |
|
Income and mining tax expense |
|
|
45 |
|
|
|
(607 |
) |
|
|
(301 |
) |
|
|
|
|
|
|
(863 |
) |
Equity income (loss) of affiliates |
|
|
1,585 |
|
|
|
(16 |
) |
|
|
220 |
|
|
|
(1,777 |
) |
|
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
1,394 |
|
|
|
1,448 |
|
|
|
940 |
|
|
|
(1,777 |
) |
|
|
2,005 |
|
Loss from discontinued operations |
|
|
|
|
|
|
7 |
|
|
|
(143 |
) |
|
|
|
|
|
|
(136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
1,394 |
|
|
|
1,455 |
|
|
|
797 |
|
|
|
(1,777 |
) |
|
|
1,869 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
(551 |
) |
|
|
(7 |
) |
|
|
83 |
|
|
|
(475 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders |
|
$ |
1,394 |
|
|
$ |
904 |
|
|
$ |
790 |
|
|
$ |
(1,694 |
) |
|
$ |
1,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Excludes Amortization and Reclamation and remediation. |
32
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, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Statement of Income |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
|
|
|
$ |
4,862 |
|
|
$ |
2,130 |
|
|
$ |
|
|
|
$ |
6,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales (1) |
|
|
|
|
|
|
1,635 |
|
|
|
990 |
|
|
|
(17 |
) |
|
|
2,608 |
|
Amortization |
|
|
|
|
|
|
445 |
|
|
|
253 |
|
|
|
(1 |
) |
|
|
697 |
|
Reclamation and remediation |
|
|
|
|
|
|
32 |
|
|
|
12 |
|
|
|
|
|
|
|
44 |
|
Exploration |
|
|
|
|
|
|
97 |
|
|
|
66 |
|
|
|
|
|
|
|
163 |
|
Advanced projects, research and development |
|
|
|
|
|
|
80 |
|
|
|
70 |
|
|
|
(1 |
) |
|
|
149 |
|
General and administrative |
|
|
|
|
|
|
112 |
|
|
|
2 |
|
|
|
19 |
|
|
|
133 |
|
Other expense, net |
|
|
|
|
|
|
156 |
|
|
|
44 |
|
|
|
|
|
|
|
200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,557 |
|
|
|
1,437 |
|
|
|
|
|
|
|
3,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
|
|
|
|
|
15 |
|
|
|
82 |
|
|
|
|
|
|
|
97 |
|
Interest income intercompany |
|
|
106 |
|
|
|
6 |
|
|
|
2 |
|
|
|
(114 |
) |
|
|
|
|
Interest expense intercompany |
|
|
(8 |
) |
|
|
|
|
|
|
(106 |
) |
|
|
114 |
|
|
|
|
|
Interest expense, net |
|
|
(187 |
) |
|
|
(19 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
(210 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(89 |
) |
|
|
2 |
|
|
|
(26 |
) |
|
|
|
|
|
|
(113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income and mining tax and other items |
|
|
(89 |
) |
|
|
2,307 |
|
|
|
667 |
|
|
|
|
|
|
|
2,885 |
|
Income and mining tax expense |
|
|
149 |
|
|
|
(775 |
) |
|
|
(158 |
) |
|
|
|
|
|
|
(784 |
) |
Equity income (loss) of affiliates |
|
|
1,405 |
|
|
|
2 |
|
|
|
209 |
|
|
|
(1,623 |
) |
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
1,465 |
|
|
|
1,534 |
|
|
|
718 |
|
|
|
(1,623 |
) |
|
|
2,094 |
|
Net income attributable to noncontrolling interests |
|
|
|
|
|
|
(774 |
) |
|
|
20 |
|
|
|
125 |
|
|
|
(629 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Newmont stockholders |
|
$ |
1,465 |
|
|
$ |
760 |
|
|
$ |
738 |
|
|
$ |
(1,498 |
) |
|
$ |
1,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Excludes Amortization and Reclamation and remediation. |
33
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, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Statement of Cash Flows |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
1,394 |
|
|
$ |
1,455 |
|
|
$ |
797 |
|
|
$ |
(1,777 |
) |
|
$ |
1,869 |
|
Adjustments |
|
|
193 |
|
|
|
542 |
|
|
|
(1,372 |
) |
|
|
1,777 |
|
|
|
1,140 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in operating assets and liabilities |
|
|
(5 |
) |
|
|
(375 |
) |
|
|
37 |
|
|
|
|
|
|
|
(343 |
) |
Net cash provided from (used in) continuing operations |
|
|
1,582 |
|
|
|
1,622 |
|
|
|
(538 |
) |
|
|
|
|
|
|
2,666 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in discontinued operations |
|
|
|
|
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) operations |
|
|
1,582 |
|
|
|
1,622 |
|
|
|
(542 |
) |
|
|
|
|
|
|
2,662 |
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and mine development |
|
|
|
|
|
|
(1,190 |
) |
|
|
(591 |
) |
|
|
|
|
|
|
(1,781 |
) |
Proceeds from sale of marketable securities |
|
|
|
|
|
|
62 |
|
|
|
12 |
|
|
|
|
|
|
|
74 |
|
Purchases of marketable securities |
|
|
|
|
|
|
|
|
|
|
(17 |
) |
|
|
|
|
|
|
(17 |
) |
Acquisitions, net |
|
|
|
|
|
|
|
|
|
|
(2,301 |
) |
|
|
|
|
|
|
(2,301 |
) |
Proceeds from sale of other assets |
|
|
|
|
|
|
(56 |
) |
|
|
62 |
|
|
|
|
|
|
|
6 |
|
Other |
|
|
|
|
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
|
|
|
(1,184 |
) |
|
|
(2,844 |
) |
|
|
|
|
|
|
(4,028 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowings (repayments) |
|
|
(7 |
) |
|
|
(276 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
(288 |
) |
Net intercompany borrowings (repayments) |
|
|
(1,289 |
) |
|
|
(2,240 |
) |
|
|
3,529 |
|
|
|
|
|
|
|
|
|
Dividends paid to common stockholders |
|
|
(321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(321 |
) |
Dividends paid to noncontrolling interests |
|
|
|
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
(17 |
) |
Proceeds from stock issuance, net |
|
|
35 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35 |
|
Change in restricted cash and other |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) financing activities |
|
|
(1,582 |
) |
|
|
(2,533 |
) |
|
|
3,527 |
|
|
|
|
|
|
|
(588 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
|
|
|
|
(3 |
) |
|
|
36 |
|
|
|
|
|
|
|
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
|
|
|
|
(2,098 |
) |
|
|
177 |
|
|
|
|
|
|
|
(1,921 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
3,877 |
|
|
|
179 |
|
|
|
|
|
|
|
4,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
1,779 |
|
|
$ |
356 |
|
|
$ |
|
|
|
$ |
2,135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
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, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Statement of Cash Flows |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
1,465 |
|
|
$ |
1,534 |
|
|
$ |
718 |
|
|
$ |
(1,623 |
) |
|
$ |
2,094 |
|
Adjustments |
|
|
(98 |
) |
|
|
496 |
|
|
|
(1,194 |
) |
|
|
1,623 |
|
|
|
827 |
|
Net change in operating assets and liabilities |
|
|
(43 |
) |
|
|
(415 |
) |
|
|
(128 |
) |
|
|
|
|
|
|
(586 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) continuing operations |
|
|
1,324 |
|
|
|
1,615 |
|
|
|
(604 |
) |
|
|
|
|
|
|
2,335 |
|
Net cash used in discontinued operations |
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) operations |
|
|
1,324 |
|
|
|
1,602 |
|
|
|
(604 |
) |
|
|
|
|
|
|
2,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to property, plant and mine development |
|
|
|
|
|
|
(478 |
) |
|
|
(494 |
) |
|
|
|
|
|
|
(972 |
) |
Proceeds from sale of marketable securities |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
1 |
|
Purchases of marketable securities |
|
|
|
|
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
|
(9 |
) |
Acquisitions, net |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
(2 |
) |
Proceeds from sale of other assets |
|
|
|
|
|
|
8 |
|
|
|
45 |
|
|
|
|
|
|
|
53 |
|
Other |
|
|
|
|
|
|
|
|
|
|
(73 |
) |
|
|
|
|
|
|
(73 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
|
|
|
|
(470 |
) |
|
|
(532 |
) |
|
|
|
|
|
|
(1,002 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net repayments |
|
|
|
|
|
|
(269 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
(274 |
) |
Net intercompany borrowings (repayments) |
|
|
(1,216 |
) |
|
|
(11 |
) |
|
|
1,325 |
|
|
|
(98 |
) |
|
|
|
|
Sale of noncontrolling interests |
|
|
|
|
|
|
229 |
|
|
|
|
|
|
|
|
|
|
|
229 |
|
Acquisition of noncontrolling interests |
|
|
|
|
|
|
|
|
|
|
(109 |
) |
|
|
|
|
|
|
(109 |
) |
Dividends paid to common stockholders |
|
|
(172 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(172 |
) |
Dividends paid to noncontrolling interests |
|
|
|
|
|
|
(458 |
) |
|
|
|
|
|
|
98 |
|
|
|
(360 |
) |
Proceeds from stock issuance, net |
|
|
56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56 |
|
Change in restricted cash and other |
|
|
|
|
|
|
47 |
|
|
|
(1 |
) |
|
|
|
|
|
|
46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided from (used in) financing activities |
|
|
(1,332 |
) |
|
|
(462 |
) |
|
|
1,210 |
|
|
|
|
|
|
|
(584 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
|
|
|
|
2 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash and cash equivalents |
|
|
(8 |
) |
|
|
672 |
|
|
|
72 |
|
|
|
|
|
|
|
736 |
|
Cash and cash equivalents at beginning of period |
|
|
8 |
|
|
|
3,067 |
|
|
|
140 |
|
|
|
|
|
|
|
3,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
|
|
|
$ |
3,739 |
|
|
$ |
212 |
|
|
$ |
|
|
|
$ |
3,951 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35
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, 2011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Balance Sheet |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
1,779 |
|
|
$ |
356 |
|
|
$ |
|
|
|
$ |
2,135 |
|
Trade receivables |
|
|
|
|
|
|
273 |
|
|
|
39 |
|
|
|
|
|
|
|
312 |
|
Accounts receivable |
|
|
1,458 |
|
|
|
3,152 |
|
|
|
773 |
|
|
|
(5,124 |
) |
|
|
259 |
|
Investments |
|
|
60 |
|
|
|
8 |
|
|
|
26 |
|
|
|
|
|
|
|
94 |
|
Inventories |
|
|
|
|
|
|
370 |
|
|
|
350 |
|
|
|
|
|
|
|
720 |
|
Stockpiles and ore on leach pads |
|
|
|
|
|
|
547 |
|
|
|
80 |
|
|
|
|
|
|
|
627 |
|
Deferred income tax assets |
|
|
121 |
|
|
|
253 |
|
|
|
51 |
|
|
|
|
|
|
|
425 |
|
Other current assets |
|
|
|
|
|
|
149 |
|
|
|
1,639 |
|
|
|
|
|
|
|
1,788 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
1,639 |
|
|
|
6,531 |
|
|
|
3,314 |
|
|
|
(5,124 |
) |
|
|
6,360 |
|
Property, plant and mine development, net |
|
|
|
|
|
|
6,351 |
|
|
|
10,690 |
|
|
|
(22 |
) |
|
|
17,019 |
|
Investments |
|
|
|
|
|
|
21 |
|
|
|
1,233 |
|
|
|
|
|
|
|
1,254 |
|
Investments in subsidiaries |
|
|
15,535 |
|
|
|
43 |
|
|
|
2,789 |
|
|
|
(18,367 |
) |
|
|
|
|
Stockpiles and ore on leach pads |
|
|
|
|
|
|
1,475 |
|
|
|
621 |
|
|
|
|
|
|
|
2,096 |
|
Deferred income tax assets |
|
|
685 |
|
|
|
690 |
|
|
|
254 |
|
|
|
|
|
|
|
1,629 |
|
Other long-term assets |
|
|
3,765 |
|
|
|
615 |
|
|
|
865 |
|
|
|
(4,464 |
) |
|
|
781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
21,624 |
|
|
$ |
15,726 |
|
|
$ |
19,766 |
|
|
$ |
(27,977 |
) |
|
$ |
29,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt |
|
$ |
507 |
|
|
$ |
61 |
|
|
$ |
10 |
|
|
$ |
|
|
|
$ |
578 |
|
Accounts payable |
|
|
3,024 |
|
|
|
1,257 |
|
|
|
1,375 |
|
|
|
(5,114 |
) |
|
|
542 |
|
Employee-related benefits |
|
|
|
|
|
|
197 |
|
|
|
72 |
|
|
|
|
|
|
|
269 |
|
Income and mining taxes |
|
|
8 |
|
|
|
131 |
|
|
|
242 |
|
|
|
|
|
|
|
381 |
|
Other current liabilities |
|
|
436 |
|
|
|
399 |
|
|
|
3,842 |
|
|
|
(1,972 |
) |
|
|
2,705 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
3,975 |
|
|
|
2,045 |
|
|
|
5,541 |
|
|
|
(7,086 |
) |
|
|
4,475 |
|
Debt |
|
|
3,534 |
|
|
|
74 |
|
|
|
51 |
|
|
|
|
|
|
|
3,659 |
|
Reclamation and remediation liabilities |
|
|
|
|
|
|
721 |
|
|
|
310 |
|
|
|
|
|
|
|
1,031 |
|
Deferred income tax liabilities |
|
|
|
|
|
|
525 |
|
|
|
2,067 |
|
|
|
|
|
|
|
2,592 |
|
Employee-related benefits |
|
|
5 |
|
|
|
256 |
|
|
|
89 |
|
|
|
|
|
|
|
350 |
|
Other long-term liabilities |
|
|
563 |
|
|
|
60 |
|
|
|
4,192 |
|
|
|
(4,487 |
) |
|
|
328 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
8,077 |
|
|
|
3,681 |
|
|
|
12,250 |
|
|
|
(11,573 |
) |
|
|
12,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
|
|
|
|
|
|
|
|
61 |
|
|
|
(61 |
) |
|
|
|
|
Common stock |
|
|
781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
781 |
|
Additional paid-in capital |
|
|
8,051 |
|
|
|
3,017 |
|
|
|
5,730 |
|
|
|
(8,434 |
) |
|
|
8,364 |
|
Accumulated other comprehensive income |
|
|
462 |
|
|
|
(121 |
) |
|
|
843 |
|
|
|
(722 |
) |
|
|
462 |
|
Retained earnings |
|
|
4,253 |
|
|
|
5,754 |
|
|
|
(317 |
) |
|
|
(5,437 |
) |
|
|
4,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont stockholders equity |
|
|
13,547 |
|
|
|
8,650 |
|
|
|
6,317 |
|
|
|
(14,654 |
) |
|
|
13,860 |
|
Noncontrolling interests |
|
|
|
|
|
|
3,395 |
|
|
|
1,199 |
|
|
|
(1,750 |
) |
|
|
2,844 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
13,547 |
|
|
|
12,045 |
|
|
|
7,516 |
|
|
|
(16,404 |
) |
|
|
16,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
21,624 |
|
|
$ |
15,726 |
|
|
$ |
19,766 |
|
|
$ |
(27,977 |
) |
|
$ |
29,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont |
|
|
|
Newmont |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining |
|
|
|
Mining |
|
|
Newmont |
|
|
Other |
|
|
|
|
|
|
Corporation |
|
Condensed Consolidating Balance Sheet |
|
Corporation |
|
|
USA |
|
|
Subsidiaries |
|
|
Eliminations |
|
|
Consolidated |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
3,877 |
|
|
$ |
179 |
|
|
$ |
|
|
|
$ |
4,056 |
|
Trade receivables |
|
|
|
|
|
|
501 |
|
|
|
81 |
|
|
|
|
|
|
|
582 |
|
Accounts receivable |
|
|
2,222 |
|
|
|
802 |
|
|
|
265 |
|
|
|
(3,201 |
) |
|
|
88 |
|
Investments |
|
|
|
|
|
|
72 |
|
|
|
41 |
|
|
|
|
|
|
|
113 |
|
Inventories |
|
|
|
|
|
|
388 |
|
|
|
270 |
|
|
|
|
|
|
|
658 |
|
Stockpiles and ore on leach pads |
|
|
|
|
|
|
513 |
|
|
|
104 |
|
|
|
|
|
|
|
617 |
|
Deferred income tax assets |
|
|
|
|
|
|
170 |
|
|
|
7 |
|
|
|
|
|
|
|
177 |
|
Other current assets |
|
|
|
|
|
|
77 |
|
|
|
885 |
|
|
|
|
|
|
|
962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
2,222 |
|
|
|
6,400 |
|
|
|
1,832 |
|
|
|
(3,201 |
) |
|
|
7,253 |
|
Property, plant and mine development, net |
|
|
|
|
|
|
5,364 |
|
|
|
7,562 |
|
|
|
(19 |
) |
|
|
12,907 |
|
Investments |
|
|
|
|
|
|
25 |
|
|
|
1,543 |
|
|
|
|
|
|
|
1,568 |
|
Investments in subsidiaries |
|
|
12,295 |
|
|
|
35 |
|
|
|
1,909 |
|
|
|
(14,239 |
) |
|
|
|
|
Stockpiles and ore on leach pads |
|
|
|
|
|
|
1,347 |
|
|
|
410 |
|
|
|
|
|
|
|
1,757 |
|
Deferred income tax assets |
|
|
638 |
|
|
|
690 |
|
|
|
109 |
|
|
|
|
|
|
|
1,437 |
|
Other long-term assets |
|
|
2,675 |
|
|
|
496 |
|
|
|
584 |
|
|
|
(3,014 |
) |
|
|
741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
17,830 |
|
|
$ |
14,357 |
|
|
$ |
13,949 |
|
|
$ |
(20,473 |
) |
|
$ |
25,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt |
|
$ |
|
|
|
$ |
249 |
|
|
$ |
10 |
|
|
$ |
|
|
|
$ |
259 |
|
Accounts payable |
|
|
355 |
|
|
|
1,269 |
|
|
|
1,996 |
|
|
|
(3,193 |
) |
|
|
427 |
|
Employee-related benefits |
|
|
|
|
|
|
222 |
|
|
|
66 |
|
|
|
|
|
|
|
288 |
|
Income and mining taxes |
|
|
19 |
|
|
|
261 |
|
|
|
75 |
|
|
|
|
|
|
|
355 |
|
Other current liabilities |
|
|
56 |
|
|
|
373 |
|
|
|
2,959 |
|
|
|
(1,970 |
) |
|
|
1,418 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
430 |
|
|
|
2,374 |
|
|
|
5,106 |
|
|
|
(5,163 |
) |
|
|
2,747 |
|
Debt |
|
|
3,991 |
|
|
|
135 |
|
|
|
56 |
|
|
|
|
|
|
|
4,182 |
|
Reclamation and remediation liabilities |
|
|
|
|
|
|
676 |
|
|
|
308 |
|
|
|
|
|
|
|
984 |
|
Deferred income tax liabilities |
|
|
|
|
|
|
513 |
|
|
|
975 |
|
|
|
|
|
|
|
1,488 |
|
Employee-related benefits |
|
|
5 |
|
|
|
244 |
|
|
|
76 |
|
|
|
|
|
|
|
325 |
|
Other long-term liabilities |
|
|
375 |
|
|
|
56 |
|
|
|
2,824 |
|
|
|
(3,034 |
) |
|
|
221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
4,801 |
|
|
|
3,998 |
|
|
|
9,345 |
|
|
|
(8,197 |
) |
|
|
9,947 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock |
|
|
|
|
|
|
|
|
|
|
61 |
|
|
|
(61 |
) |
|
|
|
|
Common stock |
|
|
778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
778 |
|
Additional paid-in capital |
|
|
7,963 |
|
|
|
2,722 |
|
|
|
3,894 |
|
|
|
(6,300 |
) |
|
|
8,279 |
|
Accumulated other comprehensive income |
|
|
1,108 |
|
|
|
(75 |
) |
|
|
1,180 |
|
|
|
(1,105 |
) |
|
|
1,108 |
|
Retained earnings |
|
|
3,180 |
|
|
|
4,850 |
|
|
|
(1,109 |
) |
|
|
(3,741 |
) |
|
|
3,180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newmont stockholders equity |
|
|
13,029 |
|
|
|
7,497 |
|
|
|
4,026 |
|
|
|
(11,207 |
) |
|
|
13,345 |
|
Noncontrolling interests |
|
|
|
|
|
|
2,862 |
|
|
|
578 |
|
|
|
(1,069 |
) |
|
|
2,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
13,029 |
|
|
|
10,359 |
|
|
|
4,604 |
|
|
|
(12,276 |
) |
|
|
15,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
17,830 |
|
|
$ |
14,357 |
|
|
$ |
13,949 |
|
|
$ |
(20,473 |
) |
|
$ |
25,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
NOTE 28 COMMITMENTS AND CONTINGENCIES
General
The Company follows ASC guidance in determining its accruals and disclosures with respect to
loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge
to income when information available prior to issuance of the financial statements indicates that
it is probable (greater than a 75% probability) that a liability could be incurred and the amount
of the loss can be reasonably estimated. Legal expenses associated with the contingency are
expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of
the loss contingency is made in the financial statements when it is at least reasonably possible
that a material loss could be incurred.
Operating Segments
The Companys operating segments are identified in Note 3. Except as noted in this paragraph,
all of the Companys commitments and contingencies specifically described in this Note 28 relate to
the Corporate and Other reportable segment. The PT Newmont Minahasa Raya and PTNNT matters relate
to the Asia Pacific reportable segment. The Yanacocha matters relate to the South America
reportable segment.
Environmental Matters
The Companys mining and exploration activities are subject to various laws and regulations
governing the protection of the environment. These laws and regulations are continually changing
and are generally becoming more restrictive. The Company conducts its operations so as to protect
the public health and environment and believes its operations are in compliance with applicable
laws and regulations in all material respects. The Company has made, and expects to make in the
future, expenditures to comply with such laws and regulations, but cannot predict the full amount
of such future expenditures.
Estimated future reclamation costs are based principally on legal and regulatory requirements.
At September 30, 2011 and December 31, 2010, $922 and $904, respectively, were accrued for
reclamation costs relating to currently or recently producing mineral properties in accordance with
asset retirement obligation guidance. The current portions of $40 and $46 at September 30, 2011 and
December 31, 2010, respectively, are included in Other current liabilities.
In addition, the Company is involved in several matters concerning environmental obligations
associated with former mining activities. Generally, these matters concern developing and
implementing remediation plans at the various sites involved. The Company believes that the related
environmental obligations associated with these sites are similar in nature with respect to the
development of remediation plans, their risk profile and the compliance required to meet general
environmental standards. Based upon the Companys best estimate of its liability for these matters,
$166 and $144 were accrued for such obligations at September 30, 2011 and December 31, 2010,
respectively. These amounts are included in Other current liabilities and Reclamation and
remediation liabilities. Depending upon the ultimate resolution of these matters, the Company
believes that it is reasonably possible that the liability for these matters could be as much as
141% greater or 4% lower than the amount accrued at September 30, 2011. The amounts accrued are
reviewed periodically based upon facts and circumstances available at the time. Changes in
estimates are recorded in Reclamation and remediation in the period estimates are revised.
Details about certain of the more significant matters involved are discussed below.
Dawn Mining Company LLC (Dawn) 51% Newmont Owned
Midnite Mine Site. Dawn previously leased an open pit uranium mine, currently inactive, on the
Spokane Indian Reservation in the State of Washington. The mine site is subject to regulation by
agencies of the U.S. Department of Interior (the Bureau of Indian Affairs and the Bureau of Land
Management), as well as the United States Environmental Protection Agency (EPA).
38
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
In 1991, Dawns mining lease at the mine was terminated. As a result, Dawn was required to
file a formal mine closure and reclamation plan. The Department of Interior commenced an analysis
of Dawns proposed plan and alternate closure and reclamation plans for the mine. Work on this
analysis has been suspended indefinitely. In mid-2000, the mine was included on the National
Priorities List under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA). In March 2003, the EPA notified Dawn and Newmont that it had thus
far expended $12 on the Remedial Investigation/Feasibility Study (RI/FS) under CERCLA. In October
2005, the EPA issued the RI/FS on this property in which it indicated a preferred remedy that it
estimated to cost approximately $150. Newmont and Dawn filed comments on the RI/FS with the EPA in
January 2006. On October 3, 2006, the EPA issued a final Record of Decision in which it formally
selected the preferred remedy identified in the RI/FS.
On January 28, 2005, the EPA filed a lawsuit against Dawn and Newmont under CERCLA in the U.S.
District Court for the Eastern District of Washington. The EPA has asserted that Dawn and Newmont
are liable for reclamation or remediation work and costs at the mine. Dawn does not have sufficient
funds to pay for the reclamation plan it proposed or for any alternate plan, or for any additional
remediation work or costs at the mine.
On July 14, 2008, after a bench trial, the Court held Newmont liable under CERCLA as an
operator of the Midnite Mine. The Court previously ruled on summary judgment that both the U.S.
Government and Dawn were liable under CERCLA. On October 17, 2008, the Court issued its written
decision in the bench trial. The Court found Dawn and Newmont jointly and severally liable under
CERCLA for past and future response costs, and ruled that each of Dawn and Newmont are responsible
to pay one-third of such costs. The Court also found the U.S. Government liable on Dawns and
Newmonts contribution claim, and ruled that the U.S. Government is responsible to pay one-third of
all past and future response costs. In November 2008, all parties appealed the Courts ruling. Also
in November 2008, the EPA issued an Administrative Order pursuant to Section 106 of CERCLA ordering
Dawn and Newmont to conduct water treatment, testing and other preliminary remedial actions.
Newmont has initiated those preliminary remedial actions.
As of September 30, 2011, Newmont, Dawn, the Department of Interior, the EPA and the
Department of Justice entered into a Consent Decree for remediation of the Midnite Mine site, and
filed the Consent Decree with the U.S. District Court for the Eastern District of Washington. All
parties moved to dismiss the appeal of the trial court findings. The Court shall elicit public
comments regarding the Consent Decree. If the Court approves the Consent Decree following the
public comment process: 1) Newmont and Dawn will design, construct and implement the cleanup plan
selected by the EPA in 2006 for the Midnite Mine site; 2) Newmont and Dawn will reimburse the EPA
for its costs associated with overseeing the work; 3) the Department of the Interior will
contribute a lump sum of approximately $54 toward past EPA costs and future costs related
to the cleanup of the Midnite Mine site; and 4) Newmont and Dawn will be responsible for all other
EPA oversight costs and Midnite Mine site cleanup costs.
Dawn Mill Site. Dawn also owns a uranium mill site facility, located on private land near
Ford, Washington, which is subject to state and federal regulation. In late 1999, Dawn sought and
later received approval from the State of Washington for a revised closure plan that expedites the
reclamation process at the site. The currently approved plan for the site is guaranteed by Newmont.
Newmont USA Limited 100% Newmont Owned
Grey Eagle Mine Site. By letter dated September 3, 2002, the EPA notified Newmont that the EPA
had expended $3 in response costs to address environmental conditions associated with a historic
tailings pile located at the Grey Eagle Mine site near Happy Camp, California, and requested that
Newmont pay those costs. The EPA has identified four potentially responsible parties, including
Newmont. Newmont does not believe it has any liability for environmental conditions at the Grey
Eagle Mine site, and intends to vigorously defend any formal claims by the EPA. Newmont cannot
reasonably predict the likelihood or outcome of any future action against it arising from this
matter.
Ross-Adams Mine Site. By letter dated June 5, 2007, the U.S. Forest Service notified Newmont
that it had expended approximately $0.3 in response costs to address environmental conditions at
the Ross-Adams mine in Prince of Wales, Alaska, and requested Newmont USA Limited pay those costs
and perform an Engineering Evaluation/Cost Analysis (EE/CA) to assess what future response
activities might need to be completed at the site. Newmont intends to vigorously defend any formal
claims by the EPA. Newmont has agreed to perform the EE/CA. Newmont cannot reasonably predict the
likelihood or outcome of any future action against it arising from this matter.
39
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
PT Newmont Minahasa Raya (PTNMR) 80% Newmont Owned
On March 22, 2007, an Indonesian non-governmental organization named Wahana Lingkungan Hidup
Indonesia (WALHI) filed a civil suit against PTNMR, the Newmont subsidiary that operated the
Minahasa mine in Indonesia, and Indonesias Ministry of Energy & Mineral Resources and Ministry of
Environment, alleging pollution from the government-approved and permitted disposal of mill tailings into Buyat Bay, and seeking a court order
requiring PTNMR to fund a 25-year monitoring program in relation to Buyat Bay. In December 2007,
the court ruled in PTNMRs favor and found that WALHIs allegations of pollution in Buyat Bay were
without merit. In March 2008, WALHI appealed this decision to the Indonesian High Court. On January
27, 2010, the Indonesian High Court upheld the December 2007 ruling in favor of PTNMR. On May 17,
2010, WALHI filed an appeal of the January 27, 2010 Indonesian High Court ruling seeking review
from the Indonesian Supreme Court. Independent sampling and testing of Buyat Bay water and fish, as
well as area residents, conducted by the World Health Organization and the Australian Commonwealth
Scientific and Industrial Research Organization, confirm that PTNMR has not polluted the Buyat Bay
environment, and, therefore, has not adversely affected the fish in Buyat Bay or the health of
nearby residents. The Company remains steadfast that it has not caused pollution or health
problems.
Other Legal Matters
Minera Yanacocha S.R.L. (Yanacocha) 51.35% Newmont Owned
Choropampa. In June 2000, a transport contractor of Yanacocha spilled approximately 151
kilograms of elemental mercury near the town of Choropampa, Peru, which is located 53 miles (85
kilometers) southwest of the Yanacocha mine. Elemental mercury is not used in Yanacochas
operations but is a by-product of gold mining and was sold to a Lima firm for use in medical
instruments and industrial applications. A comprehensive health and environmental remediation
program was undertaken by Yanacocha in response to the incident. In August 2000, Yanacocha paid
under protest a fine of 1,740,000 Peruvian soles (approximately $0.5) to the Peruvian government.
Yanacocha has entered into settlement agreements with a number of individuals impacted by the
incident. As compensation for the disruption and inconvenience caused by the incident, Yanacocha
entered into agreements with and provided a variety of public works in the three communities
impacted by this incident. Yanacocha cannot predict the likelihood of additional expenditures
related to this matter.
Additional lawsuits relating to the Choropampa incident were filed against Yanacocha in the
local courts of Cajamarca, Peru, in May 2002 by over 900 Peruvian citizens. A significant number of
the plaintiffs in these lawsuits entered into settlement agreements with Yanacocha prior to filing
such claims. In April 2008, the Peruvian Supreme Court upheld the validity of these settlement
agreements, which the Company expects to result in the dismissal of all claims brought by
previously settled plaintiffs. Yanacocha has also entered into settlement agreements with
approximately 350 additional plaintiffs. The claims asserted by approximately 200 plaintiffs
remain. In 2011, Yanacocha was served with 22 complaints alleging grounds to nullify the
settlements entered between Yanacocha and the plaintiffs. Yanacocha has answered the complaints and
will continue to vigorously defend its position. Neither the Company nor Yanacocha can reasonably
estimate the ultimate loss relating to such claims.
PT Newmont Nusa Tenggara (PTNNT) 31.5% Newmont Owned
Under the Batu Hijau Contract of Work, beginning in 2006 and continuing through 2010, a
portion of PTNNTs shares were required to be offered for sale, first, to the Indonesian government
or, second, to Indonesian nationals, equal to the difference between the following percentages and
the percentage of shares already owned by the Indonesian government or Indonesian nationals (if
such number is positive): 23% by March 31, 2006; 30% by March 31, 2007; 37% by March 31, 2008; 44%
by March 31, 2009; and 51% by March 31, 2010. As PT Pukuafu Indah (PTPI), an Indonesian national,
owned a 20% interest in PTNNT at all relevant times, in 2006, a 3% interest was required to be
offered for sale and, in each of 2007 through 2010, an additional 7% interest was required to be
offered (for an aggregate 31% interest). The price at which such interests were to be offered for
sale to the Indonesian parties is the highest of the then-current replacement cost, the price at
which shares would be accepted for listing on the Indonesian Stock Exchange, or the fair market
value of such interest as a going concern, as agreed with the Indonesian government.
40
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 Contract of Work, an offer to sell a 3% interest was made to the
Indonesian government in 2006 and an offer for an additional 7% interest was made in each of 2007,
2008, 2009 and 2010. While the central government declined to participate in the 2006 and 2007
offers, local governments in the area in which the Batu Hijau mine is located expressed interest in
acquiring shares, as did various Indonesian nationals. After disagreement with the government over
whether the governments first right to purchase had expired and receipt of Notices of Default from
the government claiming breach and threatening termination of the Contract of Work, on March 3,
2008, the Indonesian government filed for international arbitration as provided under the Contract
of Work, as did PTNNT. In the arbitration proceeding, PTNNT sought a declaration that the
Indonesian government was not entitled to terminate the Contract of
Work and additional declarations pertaining to the procedures for divesting the shares. For
its part, the Indonesian government sought declarations that PTNNT was in default of its
divestiture obligations, that the government may terminate the Contract of Work and recover damages
for breach of the Contract of Work, and that PTNNT must cause shares subject to divestiture to be
sold to certain local governments.
An international arbitration panel (the Panel) was appointed to resolve these claims and
other claims that had arisen in relation to divestment and a hearing was held in Jakarta in
December 2008. On March 31, 2009, the Panel issued its final award and decision on the matter. In
its decision, the Panel determined that PTNNTs foreign shareholders had not complied with the
divestiture procedure required by the Contract of Work in 2006 and 2007, but the Panel ruled that
the Indonesian government was not entitled to immediately terminate the Contract of Work and
rejected the Indonesian governments claim for damages. The Panel granted PTNNT 180 days from the
date of notification of the final award to effect transfer of the 2006 3% interest and the 2007 7%
interest in PTNNT to the local governments or their respective nominees. The Panel also applied a
180-day cure period to the 2008 7% interest, requiring that PTNNT effect the offer of the 2008 7%
interest to the Indonesian government or its nominee within such 180-day period, and ensure the
transfer of such shares if, after agreement on the transfer price, the Indonesian government
invoked its right of first refusal under the Contract of Work. On July 14, 2009, the Company
reached agreement with the Indonesian government on the price of the 2008 7% interest and the 2009
7% interest. PTNNT effected the reoffer of the 2008 7% interest and the 2009 7% interest to the
Indonesian government at this newly agreed price. In November and December 2009, sale agreements
were concluded pursuant to which the 2006, 2007 and 2008 shares were transferred to PT Multi Daerah
Bersaing (PTMDB), the nominee of the local governments, and the 2009 shares were transferred to
PTMDB in February 2010, resulting in PTMDB owning a 24% interest in PTNNT.
On December 17, 2010, the Ministry of Energy & Mineral Resources, acting on behalf of the
Indonesian government, accepted the offer to acquire the final 7% interest in PTNNT. Subsequently,
the Indonesian government designated Pusat Investasi Pemerintah (PIP), an agency of the Ministry
of Finance, as the entity that will buy the final stake. On May 6, 2011, PIP and the foreign
shareholders entered into a definitive agreement for the sale and purchase of the final 7%
divestiture stake. Closing of the transaction is pending receipt of approvals from certain
Indonesian government ministries. Subsequent to signing the agreement, a disagreement arose between the Ministry of Finance and the Indonesian parliament in regard to whether
parliamentary approval was needed to allow PIP to make the share purchase. In October 2011, press reports stated that Indonesias Supreme Audit Agency had determined that parliamentary approval is required. The Ministry of Finance
continues to dispute the need for parliamentary approval and further disputes may arise in regard to the divestiture of the
2010 shares.
As part of the negotiation of the sale agreements with PTMDB, the parties executed an
operating agreement (the Operating Agreement) under which each recognizes the rights of the
Company and Sumitomo to apply their operating standards to the management of PTNNTs operations,
including standards for safety, environmental stewardship and community responsibility. The
Operating Agreement became effective upon the completion of the sale of the 2009 shares in February
2010 and will continue for so long as the Company and Sumitomo own more shares of PTNNT than PTMDB.
If the Operating Agreement terminates, then the Company may lose control over the applicable
operating standards for Batu Hijau and will be at risk for operations conducted in a manner that
either detracts from value or results in safety, environmental or social standards below those
adhered to by the Company and Sumitomo.
In the event of any future disputes under the Contract of Work or Operating Agreement, there
can be no assurance that the Company would prevail in any such dispute and any termination of such
contracts could result in substantial diminution in the value of the Companys interests in PTNNT.
Effective as of January 1, 2011, the local government in the region where the Batu Hijau mine
is located commenced the enforcement of local regulations that purport to require PTNNT to pay
additional taxes based on revenue and the value of PTNNTs contracts. In addition, the regulations
purport to require PTNNT to obtain certain export-related documents from the regional government
for purposes of shipping copper concentrate. PTNNT is required to and has obtained all export
related-documents in compliance with the laws and regulations of the central government. PTNNT
believes that the new regional regulations are not enforceable as they expressly contradict higher
level Indonesian laws that set out the permissible taxes that can be imposed by a regional
government and all effective export requirements. PTNNTs position is supported by Indonesias
Ministry of Energy & Mineral Resources, Ministry of Trade, and the provincial government. To date,
PTNNT has not been forced to comply with these new contradictory regional regulations. On February
4, 2011, PTNNT filed legal proceedings seeking to have the regulations declared null and void
because they conflict with the laws of Indonesia. Subsequently, the Ministry of Home Affairs issued
a decree declaring these local regulations to be contrary to Indonesian law and thus unenforceable.
Further disputes with the local government could arise in relation to these regulations. PTNNT
intends to vigorously defend its position in this dispute.
41
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Additionally, in September 2011, WALHI brought an administrative law claim against Indonesias
Ministry of Environment to challenge the May 2011 renewal of PTNNTs submarine tailings permit.
PTNNT and the regional government of KSB (KSB) filed separate applications for intervention into
the proceedings, both of which were accepted by the Administrative Court. KSB intervened on the
side of WALHI, and PTNNT joined on the side of the Ministry of Environment. PTNNT will defend its
submarine tailings permit and is confident that the Ministry of Environment acted properly in
renewing PTNNTs permit.
Newmont Mining Corporation claim relating to PTNNT divestiture
The Company is aware of a lawsuit apparently filed by Indonesian citizens living in the
province of Nusa Tenggara Barat against Indonesias Ministry of Finance and other government
officials (as defendants) and against PTNNT and the Company (as co-defendants). Plaintiffs claim
that the purchase by the central government of the final 7% divestiture stake in PTNNT violates, or
would violate, their human rights. PTNNTs alleged liability appears to arise from being a party
involved in the process of divestiture, and the Companys status as a holding company of PTNNT.
The allegations regarding liability are vague and unclear. Plaintiffs
seek various relief, including an order requiring the defendants and co-defendants to transfer the
final 7% stake to the regional government of Nusa Tenggara Barat and a payment of approximately $247 in
damages. The Company considers that there has been no proper service of process, that there is lack
of jurisdiction, and that the claims pertaining to it are entirely without merit.
PT Pukuafu Indah Litigation
In October 2009, PTPI filed a lawsuit in the Central Jakarta District Court against PTNNT and
the Indonesian government seeking to cancel the March 2009 arbitration award pertaining to the
manner in which divestiture of shares in PTNNT should proceed (refer to the discussion of PTNNT
above for the arbitration results). On October 11, 2010, the District Court ruled in favor of PTNNT
and the Indonesian government finding, among other things, that PTPI lacks standing to contest the
validity of the arbitration award. PTPI has filed a notice of appeal of the courts ruling.
Subsequent to its initial claim, PTPI filed numerous additional lawsuits, two of which have
been withdrawn, against Newmont Indonesia Limited (NIL) and Nusa Tenggara Mining Corporation
(NTMC), a subsidiary of Sumitomo, in the South Jakarta District Court. Fundamentally, the cases
all relate to PTPIs contention that it owns, or has rights to own, the shares in PTNNT that have
or will be divested to fulfill the requirements of the PTNNT Contract of Work and the March 2009
arbitration award. PTPI also makes various other allegations, including alleged rights in or to the
Companys or Sumitomos non-divestiture shares in PTNNT, and PTPI asserts claims for significant
damages allegedly arising from NILs and NTMCs unlawful acts in transferring the divestiture
shares to a third party. On November 30, 2010, the South Jakarta District Court rendered a decision
in favor of PTPI in one of the cases which included an order that NIL/NTMC transfer 31% of PTNNT
shares to PTPI and pay PTPI $26 in damages and certain monetary penalties. The order is not final
and binding until the appeal process is completed. NIL and NTMC appealed the decision. On June 28,
2011, the South Jakarta District Court ruled in favor of NIL and NTMC in one of PTPIs lawsuits
contending that PTPI has rights in or to NILs and NTMCs non-divestiture shares. In the Companys
view, this ruling further conflicts with the November 30, 2010 ruling finding that PTPI has rights
in the divestiture shares. PTPI has filed a notice of appeal.
In January 2010, PTPI also filed a lawsuit against PTNNTs President Director, Mr. Martiono
Hadianto, alleging wrongful acts associated with the arbitration, including failure to properly
share certain information. The South Jakarta District Court issued a decision partially in favor of
PTPI against the PTNNT President Director, requiring the production of arbitration documents. The
PTNNT President Director has appealed the decision which is nonbinding until the appeal process is
completed.
Newmont, Sumitomo and PTNNTs management believe that all of PTPIs claims in these matters
are without merit and constitute a material breach of a written release agreement executed by PTPI
in 2009, in which it and its shareholders committed to cease prosecution of all then-pending
lawsuits and not to initiate new proceedings, in conjunction with Newmonts provision of financing
to PTPI in late 2009.
42
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
In August 2010, NIL and NVL USA Limited (NVL) commenced an arbitration against PTPI in the
Singapore International Arbitration Centre, as provided in relevant financing agreements, seeking
declarations that PTPI has violated the release agreement by failing to dismiss its Indonesian
lawsuits, that PTPI is in breach of the November 2009 loan facility and related agreements, and
that NIL and NVL are entitled to damages arising from PTPIs and its shareholders conduct.
On October 1, 2010, NIL and NVL requested, based upon the release agreement, that the arbitral
tribunal issue an interim order requiring PTPI and its shareholders to discontinue the various
Indonesian court proceedings and refrain from bringing additional lawsuits. On October 15, 2010,
the tribunal issued an order granting NIL and NVLs request. The order of the tribunal restrains
PTPI and its agents from proceeding with or continuing with or assisting or participating in the
prosecution of the Indonesian [s]uits and from commencing additional proceedings relating to the
same subject matter as the Indonesian lawsuits. NIL and NVL are in the process of enforcing the
interim award in Indonesian and Singapore courts but it is not known the extent to which the courts
will enforce the award or whether PTPI and its shareholders will, in any event, abide by the award
and any related court orders. PTPI and its shareholders have commenced proceedings in Singapore
court to contest enforcement of the interim award.
On April 7, 2011, the arbitral tribunal issued a final award, while keeping the proceedings
open to allow NIL and NVL to seek further relief as necessary, finding PTPI and its shareholders in
breach of various provisions of the financing agreements, including the release agreement. The
tribunal, for the second time, ordered PTPI and its agents to restrain from proceeding with the
Indonesian lawsuits or filing new lawsuits relating to the same subject matter. In addition, the
tribunal ordered PTPI and other shareholder defendants, collectively, to pay more than $11 in
damages, costs and expenses. The Company has aggressively sought enforcement of the interim award
and will continue to do so with regard to the April 7, 2011 award in Indonesian and Singapore
courts.
The Company intends to continue vigorously defending the PTPI lawsuits and pursuing its claims
against PTPI.
NWG Investments Inc. v. Fronteer Gold, Inc.
In April 2011, Newmont acquired Fronteer Gold Inc. (Fronteer). Fronteer has been named as a
defendant in a lawsuit filed in New York State Supreme Court by NWG Investments Inc. (NWG).
Fronteer acquired NewWest Gold Corporation (NewWest Gold) in September 2007. At the time of
that acquisition, NWG owned approximately 86% of NewWest Gold and an individual named Jacob Safra
owned or controlled 100% of NWG. Prior to its acquisition of NewWest Gold, Fronteer entered into a
June 2007 lock-up agreement with NWG providing that, among other things, NWG would support
Fronteers acquisition of NewWest Gold. At that time, Fronteer owned approximately 42% of Aurora
Energy Resources Inc. (Aurora), which, among other things, had a uranium exploration project in
Labrador, Canada.
NWG contends that, during the negotiations leading up to the lock-up agreement, Fronteer
represented to NWG that Aurora would commence uranium mining in Labrador by 2013, that this was a
firm date, that Fronteer was not aware of any obstacle to doing so, that Aurora faced no serious
environmental issues in Labrador and that Auroras competitors faced greater delays in commencing
uranium mining. NWG further contends that it entered into the lock-up agreement and agreed to
support Fronteers acquisition of NewWest Gold in reliance upon these purported representations. On
October 11, 2007, less than three weeks after the Fronteer-NewWest Gold transaction closed, a
member of the Nunatsiavut Assembly introduced a motion calling for the adoption of a moratorium on
uranium mining in Labrador. On April 8, 2008, the Nunatsiavut Assembly adopted a three-year
moratorium on uranium mining in Labrador. NWG contends that Fronteer was aware during the
negotiations of the NWG/Fronteer lock-up agreement that the Nunatsiavut Assembly planned on
adopting this moratorium and that its adoption would preclude Aurora from commencing uranium mining
by 2013, but Fronteer nonetheless fraudulently induced NWG to enter into the lock-up agreement.
NWG has not yet filed or served a complaint upon Fronteer or Newmont. Newmont intends to
defend this matter, but cannot reasonably predict the outcome.
43
NEWMONT MINING CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)
Other Commitments and Contingencies
Tax contingencies are provided for in accordance with ASC income tax guidance (see Note 10).
The Company has minimum royalty obligations on one of its producing mines in Nevada for the
life of the mine. Amounts paid as a minimum royalty (where production royalties are less than the
minimum obligation) in any year are recoverable in future years when the minimum royalty obligation
is exceeded. Although the minimum royalty requirement may not be met in a particular year, the
Company expects that over the mine life, gold production will be sufficient to meet
the minimum royalty requirements. Minimum royalty payments payable are $28 in 2011, $28 in
2012 through 2015 and $251 thereafter.
As part of its ongoing business and operations, the Company and its affiliates are required to
provide surety bonds, bank letters of credit and bank guarantees as financial support for various
purposes, including environmental reclamation, exploration permitting, workers compensation
programs and other general corporate purposes. At September 30, 2011 and December 31, 2010, there
were $1,341 and $1,191, respectively, of outstanding letters of credit, surety bonds and bank
guarantees. The surety bonds, letters of credit and bank guarantees reflect fair value as a
condition of their underlying purpose and are subject to fees competitively determined in the
market place. The obligations associated with these instruments are generally related to
performance requirements that the Company addresses through its ongoing operations. As the specific
requirements are met, the beneficiary of the associated instrument cancels and/or returns the
instrument to the issuing entity. Certain of these instruments are associated with operating sites
with long-lived assets and will remain outstanding until closure. Generally, bonding requirements
associated with environmental regulation are becoming more restrictive. However, the Company
believes it is in compliance with all applicable bonding obligations and will be able to satisfy
future bonding requirements, through existing or alternative means, as they arise.
Newmont is from time to time involved in various legal proceedings related to its business.
Except in the above-described proceedings, management does not believe that adverse decisions in
any pending or threatened proceeding or that amounts that may be required to be paid by reason
thereof will have a material adverse effect on the Companys financial condition or results of
operations.
NOTE 29 SUPPLEMENTARY DATA
Ratio of Earnings to Fixed Charges
The ratio of earnings to fixed charges for the nine months ended September 30, 2011 was 13.1.
The ratio of earnings to fixed charges represents income before income and mining tax expense,
equity income (loss) of affiliates, loss from discontinued operations and net income attributable
to noncontrolling interests, divided by interest expense. Interest expense includes amortization of
capitalized interest and the portion of rent expense representative of interest. Interest expense
does not include interest on income tax liabilities. The computation of the ratio of earnings to
fixed charges can be found in Exhibit 12.1.
44
|
|
|
ITEM |
|
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (dollars in millions, except per share, per ounce and per pound amounts) |
The following discussion provides information that management believes is relevant to an
assessment and understanding of the consolidated financial condition and results of operations of
Newmont Mining Corporation and its subsidiaries (collectively, Newmont, the Company, our and
we). We use certain non-GAAP financial performance measures in our MD&A. For a detailed
description of each of the non-GAAP financial measures used in this MD&A, please see the discussion
under Non-GAAP Financial Performance Measures beginning on page 64. References to A$ refer to
Australian currency, C$ to Canadian currency, NZ$ to New Zealand currency and $ to United
States currency.
This item should be read in conjunction with our interim unaudited Condensed Consolidated
Financial Statements and the notes thereto included in this quarterly report. Additionally, the
following discussion and analysis should be read in conjunction with Managements Discussion and
Analysis of Consolidated Financial Condition and Results of Operations and the consolidated
financial statements included in Part II of our Annual Report on Form 10-K for the year ended
December 31, 2010 filed February 24, 2011.
Overview
Newmont is one of the worlds largest gold producers and is the only gold company included in
the S&P 500 Index and Fortune 500, and was the first gold company included in the Dow Jones
Sustainability Index-World. We are also engaged in the exploration for and acquisition of gold and
gold/copper properties. We have significant assets and/or operations in the United States,
Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico.
Our vision is to be the most valued and respected mining company through industry leading
performance. We remain focused on the development of our next generation of mining projects.
Approximately 40% of our 2011 capital expenditures are being invested in these projects and the
development of our project pipeline, as we continue to deliver solid leverage to the gold price.
Third quarter 2011 highlights are included below and discussed further in Results of Consolidated
Operations.
Delivering strong operating performance
|
|
|
Record Sales of $2,744 and $7,593 for the third quarter and first nine months of
2011, respectively; |
|
|
|
Record Net cash provided from continuing operations of $2,666 for the first nine
months of 2011; |
|
|
|
Record average realized gold price of $1,695 and $1,526 per ounce for the third
quarter and first nine months of 2011, respectively; |
|
|
|
Average realized copper price of $2.94 and $3.58 per pound for the third quarter
and first nine months of 2011, respectively; |
|
|
|
Attributable gold production of 1.3 million and 3.9 million ounces at consolidated
Costs applicable to sales of $622 and $587 per ounce, for the third quarter and first
nine months of 2011, respectively; |
|
|
|
Attributable copper production of 58 million and 159 million pounds at consolidated
Costs applicable to sales of $1.10 and $1.17 per pound, for the third quarter and
first nine months of 2011, respectively; and |
|
|
|
Maintaining 2011 Outlook for attributable gold and copper production, costs
applicable to sales and capital expenditures. |
45
Advancing our project pipeline
As previously disclosed, our current plans reflect the intended development of assets within
our global development portfolio that would increase annual attributable gold production to
approximately 7 million ounces by 2017. This production target represents a potential aggregate
increase of approximately 35% in anticipated 2017 annual production from the Companys previously
announced 2011 attributable gold production outlook of 5.1 to 5.3 million ounces. We also manage
our wider project portfolio to maintain flexibility to address the development risks associated
with our projects, including permitting, local community and government support, engineering and
procurement availability, technical issues, escalating costs, and other associated risks that could
adversely impact the timing and costs of certain opportunities.
Our development opportunities that have advanced to full funding approval during 2011 and
comprise a significant part of the Companys growth strategy include Akyem in Ghana, Conga in Peru
and the Tanami Shaft in Australia, as described further below.
Akyem, Ghana Since full funding approval by the Board of Directors (the Board) in March
2011, the project has continued to advance with confirmation of the main civil and mechanical
construction contracts, commencement of bulk earthworks and civil activities, the first structural
concrete pour and the establishment of the first set of resettlement villages. First production is
anticipated in late 2013 to early 2014 with approximately three to six months expected for ramp-up
to commercial production. Gold production is expected to average approximately 350,000 to 450,000
ounces per year at Costs applicable to sales of $450 to $550 per ounce for the first five years of
the mines operating life of approximately 16 years (based on current gold reserves). Capital
costs are estimated at $850 to $1,100. At December 31, 2010, we had 7.2 million ounces of gold
reserves at Akyem.
Conga, Peru Following the full funding approval by the Board in July 2011, the project has
continued to progress infrastructure works, earthworks construction, drilling, detailed
engineering, procurement of materials and equipment and securing remaining permits needed for
construction. First production is expected in late 2014 to early 2015 with approximately six
months expected for ramp-up to commercial production. Average annual estimated attributable gold
production of approximately 300,000 to 350,000 ounces per year are expected during the first five
years of production at average Costs applicable to sales of $400 to $450 per ounce. Average annual
estimated attributable copper production of approximately 80 to 120 million pounds per year are
expected during the first five years of production at average Costs applicable to sales of $1.25 to
$1.75 per pound. The project has an anticipated mine life of approximately 19 years, with
additional district exploration potential. Capital costs are estimated at $4,000 to $4,800 ($2,000
to $2,400 attributable to Newmont). At December 31, 2010, we reported 6.1 million attributable
ounces of gold reserves and 1.7 billion attributable pounds of copper reserves at Conga.
Tanami Shaft, Australia - Following the full funding approval by the Board in July 2011,
development efforts have progressed according to plans. The project will support underground
expansion at the Callie and Auron ore bodies, reduce cut-off grade, enhance productivity and
facilitate possible additional mine expansion. The project is expected to add average annual
attributable gold production of approximately 60,000 to 90,000 ounces during the first five years
of production while lowering Costs applicable to sales for the first five years by approximately
$100 per ounce. First production is expected in late 2014 to early 2015. Capital costs are
expected to be approximately $400 to $450 million based on the recent average Australian dollar
exchange rate.
In addition to the projects receiving full funding decisions in 2011, as described above, we
advanced approximately 20 earlier stage development assets through our project pipeline in each of
our four operating regions. The exploration, construction and operation of these earlier stage
development assets may require significant funding, some of which are described further below:
Merian, Suriname Feasibility Study work for the Merian project began in the third quarter
of 2011 and is expected to be completed in the fourth quarter of 2012. The Company has also
recently commenced negotiations for a mineral agreement with the government of Suriname. The
development of the Merian project allows Newmont to pursue a new district with upside potential and
the opportunity to grow and extend the operating life of the South American region. First
production is targeted for 2015 with initial estimated gold production of approximately 300,000
ounces per year.
Long Canyon, Nevada Since completing the acquisition of Fronteer Gold, Inc. in April 2011,
the project entered into the pre-feasibility stage as we further develop our understanding of what
we expect could be another Carlin-type trend at Long Canyon. We have received an expanded
exploration area permit allowing access to project targets. We continue to make progress on the
drilling program, to date we have completed 40 kilometers of drilling with an expected additional
10 kilometers in the remainder of 2011. We have engaged engineering firms to assist in developing
our plan of operations. Our intention is to bring the project into production in 2017 with initial
estimated gold production of approximately 300,000 ounces per year.
Hope Bay, Canada Hope Bay is a Canadian Arctic greenstone district with a strike length of
approximately 80 kilometers by 20 kilometers. Early stage exploration has identified numerous
targets within the district. Drilling results to date, including approximately 70 kilometers of
diamond drilling completed in 2011, continue to support our view of the approximately 10 million
ounce exploration resource potential, none of which are currently in
reserves. Diamond drill operations are ongoing in addition to the
exploration decline at Doris North which commenced in late 2010. We continue to evaluate
development options and economic feasibility for Hope Bay comparatively with other development
opportunities within the Companys wider project pipeline.
Enhanced Gold Price-Linked Dividend
Under the enhanced gold price-linked dividend policy announced in September 2011, our annual
dividend has the potential to increase to $4.70 per share if the Companys average realized gold
price exceeds $2,500 per ounce.
46
The enhanced policy will continue to link the quarterly dividend rate to changes in the gold
price but will also provide an additional step up of 7.5 cents per share when the Companys
realized gold price for a quarter exceeds $1,700 per ounce and a further step up of 2.5 cents per
share when the Companys realized gold price for a quarter exceeds $2,000 per ounce. At average
realized gold prices below $1,700 per ounce, the dividend policy remains unchanged. Under the
policy, unless otherwise determined by the Board, the dividend will be calculated based upon the
average realized gold price during the preceding quarter in the manner highlighted in the table
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized |
|
Quarterly Dividend |
|
|
Annualized Dividend |
|
Gold Price |
|
Prior |
|
|
Enhanced |
|
|
Prior |
|
|
Enhanced |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$1,100 - $1,199 |
|
$ |
0.100 |
|
|
$ |
0.100 |
|
|
$ |
0.400 |
|
|
$ |
0.400 |
|
$1,200 - $1,299 |
|
$ |
0.150 |
|
|
$ |
0.150 |
|
|
$ |
0.600 |
|
|
$ |
0.600 |
|
$1,300 - $1,399 |
|
$ |
0.200 |
|
|
$ |
0.200 |
|
|
$ |
0.800 |
|
|
$ |
0.800 |
|
$1,400 - $1,499 |
|
$ |
0.250 |
|
|
$ |
0.250 |
|
|
$ |
1.000 |
|
|
$ |
1.000 |
|
$1,500 - $1,599 |
|
$ |
0.300 |
|
|
$ |
0.300 |
|
|
$ |
1.200 |
|
|
$ |
1.200 |
|
$1,600 - $1,699 |
|
$ |
0.350 |
|
|
$ |
0.350 |
|
|
$ |
1.400 |
|
|
$ |
1.400 |
|
$1,700 - $1,799 |
|
$ |
0.400 |
|
|
$ |
0.425 |
|
|
$ |
1.600 |
|
|
$ |
1.700 |
|
$1,800 - $1,899 |
|
$ |
0.450 |
|
|
$ |
0.500 |
|
|
$ |
1.800 |
|
|
$ |
2.000 |
|
$1,900 - $1,999 |
|
$ |
0.500 |
|
|
$ |
0.575 |
|
|
$ |
2.000 |
|
|
$ |
2.300 |
|
$2,000 - $2,099 |
|
$ |
0.550 |
|
|
$ |
0.675 |
|
|
$ |
2.200 |
|
|
$ |
2.700 |
|
$2,100 - $2,199 |
|
$ |
0.600 |
|
|
$ |
0.775 |
|
|
$ |
2.400 |
|
|
$ |
3.100 |
|
$2,200 - $2,299 |
|
$ |
0.650 |
|
|
$ |
0.875 |
|
|
$ |
2.600 |
|
|
$ |
3.500 |
|
$2,300 - $2,399 |
|
$ |
0.700 |
|
|
$ |
0.975 |
|
|
$ |
2.800 |
|
|
$ |
3.900 |
|
$2,400 - $2,499 |
|
$ |
0.750 |
|
|
$ |
1.075 |
|
|
$ |
3.000 |
|
|
$ |
4.300 |
|
$2,500 - $2,599 |
|
$ |
0.800 |
|
|
$ |
1.175 |
|
|
$ |
3.200 |
|
|
$ |
4.700 |
|
The fourth quarter 2011 dividend under this policy of $0.35 per share (based on a third
quarter 2011 average realized gold price of $1,695 per ounce) represents an increase of 17% over
the $0.30 dividend paid in the third quarter of 2011, and an increase of 133% over the fourth
quarter 2010 dividend. This dividend policy is intended as a non-binding guideline which will be
periodically reviewed and reassessed by the Board. The declaration and payment of future dividends
remains at the discretion of the Board and will depend on the Companys financial results, cash
requirements, future prospects and other factors deemed relevant by the Board.
47
Selected Financial and Operating Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Sales |
|
$ |
2,744 |
|
|
$ |
2,597 |
|
|
$ |
7,593 |
|
|
$ |
6,992 |
|
Income from continuing operations |
|
$ |
675 |
|
|
$ |
814 |
|
|
$ |
2,005 |
|
|
$ |
2,094 |
|
Net income |
|
$ |
675 |
|
|
$ |
814 |
|
|
$ |
1,869 |
|
|
$ |
2,094 |
|
Net income attributable to Newmont
stockholders |
|
$ |
493 |
|
|
$ |
537 |
|
|
$ |
1,394 |
|
|
$ |
1,465 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per common share, basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
attributable to
Newmont stockholders |
|
$ |
1.00 |
|
|
$ |
1.09 |
|
|
$ |
3.10 |
|
|
$ |
2.98 |
|
Net income attributable to Newmont
stockholders |
|
$ |
1.00 |
|
|
$ |
1.09 |
|
|
$ |
2.82 |
|
|
$ |
2.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (1) |
|
$ |
635 |
|
|
$ |
533 |
|
|
$ |
1,593 |
|
|
$ |
1,319 |
|
Adjusted net income per share (1) |
|
$ |
1.29 |
|
|
$ |
1.08 |
|
|
$ |
3.23 |
|
|
$ |
2.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated gold ounces (thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced (2) |
|
|
1,519 |
|
|
|
1,689 |
|
|
|
4,433 |
|
|
|
4,862 |
|
Sold |
|
|
1,458 |
|
|
|
1,651 |
|
|
|
4,327 |
|
|
|
4,778 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated copper pounds (millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced (3) |
|
|
102 |
|
|
|
156 |
|
|
|
278 |
|
|
|
463 |
|
Sold |
|
|
92 |
|
|
|
158 |
|
|
|
276 |
|
|
|
434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average price received, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
1,695 |
|
|
$ |
1,221 |
|
|
$ |
1,526 |
|
|
$ |
1,176 |
|
Copper (per pound) |
|
$ |
2.94 |
|
|
$ |
3.67 |
|
|
$ |
3.58 |
|
|
$ |
3.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce) |
|
$ |
622 |
|
|
$ |
470 |
|
|
$ |
587 |
|
|
$ |
477 |
|
Copper (per pound) |
|
$ |
1.10 |
|
|
$ |
0.73 |
|
|
$ |
1.17 |
|
|
$ |
0.76 |
|
|
|
|
(1) |
|
See Non-GAAP Financial Measures on page 64. |
|
(2) |
|
Contained basis. (Attributable production after smelter recoveries was 1,306 and
1,403 thousand gold ounces for the third quarter 2011 and 2010, respectively. Attributable
production after smelter recoveries was 3,867 and 4,022 thousand gold ounces for the first
nine months 2011 and 2010, respectively.) |
|
(3) |
|
Contained basis. (Attributable production after smelter recoveries was 55 and 80
million copper pounds for the third quarter 2011 and 2010, respectively. Attributable
production after smelter recoveries was 152 and 243 million copper pounds for the first nine
months 2011 and 2010, respectively.) |
Consolidated Financial Results
Net income attributable to Newmont stockholders for the third quarter of 2011 was $493 ($1.00
per share) compared to $537 ($1.09 per share) for the third quarter of 2010. Results for the third
quarter of 2011 compared to the third quarter of 2010 were impacted by higher realized gold prices,
partially offset by lower copper prices, lower sales volumes, higher production costs, and a $174
impairment of marketable equity securities. Net income attributable to Newmont stockholders for the
first nine months of 2011 was $1,394 ($2.82 per share) compared to $1,465 ($2.98 per share) for the
first nine months of 2010. Results for the first nine months of 2011 compared to the first nine
months of 2010 were impacted by higher realized gold and copper prices, partially offset by lower
sales volumes, higher production costs and income taxes, a $175 impairment of marketable equity
securities, a $136 Loss from discontinued operations, acquisition related expenses and a large tax
benefit resulting from the restructuring of the form of the Companys non-US subsidiaries realized
in 2010.
48
Gold Sales increased 23% and 17% in the third quarter and first nine months of 2011,
respectively, compared to the same periods in 2010 due to higher realized prices, partially offset
by lower sales volumes. The following analysis summarizes the change in consolidated gold sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Consolidated gold sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing |
|
$ |
2,468 |
|
|
$ |
2,028 |
|
|
$ |
6,607 |
|
|
$ |
5,632 |
|
Provisional pricing mark-to-market |
|
|
20 |
|
|
|
5 |
|
|
|
38 |
|
|
|
27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing |
|
|
2,488 |
|
|
|
2,033 |
|
|
|
6,645 |
|
|
|
5,659 |
|
Treatment and refining charges |
|
|
(17 |
) |
|
|
(17 |
) |
|
|
(43 |
) |
|
|
(40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
2,471 |
|
|
$ |
2,016 |
|
|
$ |
6,602 |
|
|
$ |
5,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated gold ounces sold (thousands): |
|
|
1,458 |
|
|
|
1,651 |
|
|
|
4,327 |
|
|
|
4,778 |
|
Average realized gold price (per ounce): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing |
|
$ |
1,693 |
|
|
$ |
1,229 |
|
|
$ |
1,527 |
|
|
$ |
1,179 |
|
Provisional pricing mark-to-market |
|
|
14 |
|
|
|
3 |
|
|
|
9 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing |
|
|
1,707 |
|
|
|
1,232 |
|
|
|
1,536 |
|
|
|
1,185 |
|
Treatment and refining charges |
|
|
(12 |
) |
|
|
(11 |
) |
|
|
(10 |
) |
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
1,695 |
|
|
$ |
1,221 |
|
|
$ |
1,526 |
|
|
$ |
1,176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The change in consolidated gold sales is due to:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2011 vs. 2010 |
|
|
2011 vs. 2010 |
|
Change in consolidated ounces sold |
|
$ |
(237 |
) |
|
$ |
(533 |
) |
Change in average realized gold price |
|
|
692 |
|
|
|
1,519 |
|
Change in treatment and refining charges |
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
$ |
455 |
|
|
$ |
983 |
|
|
|
|
|
|
|
|
49
Copper Sales decreased 53% in the third quarter of 2011 compared to the third quarter of
2010 due to lower sales volumes and lower realized prices. Copper Sales decreased 28% in the first
nine months of 2011 compared to the same period in 2010 due to lower sales volumes, partially
offset by higher realized prices. The following analysis summarizes the change in consolidated
copper sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Consolidated copper sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing |
|
$ |
363 |
|
|
$ |
539 |
|
|
$ |
1,154 |
|
|
$ |
1,433 |
|
Provisional pricing mark-to-market |
|
|
(74 |
) |
|
|
78 |
|
|
|
(102 |
) |
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing |
|
|
289 |
|
|
|
617 |
|
|
|
1,052 |
|
|
|
1,463 |
|
Treatment and refining charges |
|
|
(16 |
) |
|
|
(36 |
) |
|
|
(61 |
) |
|
|
(90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
273 |
|
|
$ |
581 |
|
|
$ |
991 |
|
|
$ |
1,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated copper pounds sold (millions) |
|
|
92 |
|
|
|
158 |
|
|
|
276 |
|
|
|
434 |
|
Average realized copper price (per pound): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing |
|
$ |
3.91 |
|
|
$ |
3.41 |
|
|
$ |
4.17 |
|
|
$ |
3.31 |
|
Provisional pricing mark-to-market |
|
|
(0.80 |
) |
|
|
0.49 |
|
|
|
(0.37 |
) |
|
|
0.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing |
|
|
3.11 |
|
|
|
3.90 |
|
|
|
3.80 |
|
|
|
3.38 |
|
Treatment and refining charges |
|
|
(0.17 |
) |
|
|
(0.23 |
) |
|
|
(0.22 |
) |
|
|
(0.21 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net |
|
$ |
2.94 |
|
|
$ |
3.67 |
|
|
$ |
3.58 |
|
|
$ |
3.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The change in consolidated copper sales is due to:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2011 vs. 2010 |
|
|
2011 vs. 2010 |
|
Change in consolidated pounds sold |
|
$ |
(254 |
) |
|
$ |
(528 |
) |
Change in average realized copper price |
|
|
(74 |
) |
|
|
117 |
|
Change in treatment and refining charges |
|
|
20 |
|
|
|
29 |
|
|
|
|
|
|
|
|
|
|
$ |
(308 |
) |
|
$ |
(382 |
) |
|
|
|
|
|
|
|
50
The following is a summary of consolidated gold and copper sales, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
712 |
|
|
$ |
568 |
|
|
$ |
1,823 |
|
|
$ |
1,540 |
|
La Herradura |
|
|
92 |
|
|
|
52 |
|
|
|
238 |
|
|
|
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
804 |
|
|
|
620 |
|
|
|
2,061 |
|
|
|
1,689 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
544 |
|
|
|
436 |
|
|
|
1,430 |
|
|
|
1,321 |
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
245 |
|
|
|
181 |
|
|
|
746 |
|
|
|
582 |
|
Batu Hijau |
|
|
198 |
|
|
|
260 |
|
|
|
430 |
|
|
|
595 |
|
Other Australia/New Zealand |
|
|
437 |
|
|
|
351 |
|
|
|
1,227 |
|
|
|
973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
880 |
|
|
|
792 |
|
|
|
2,403 |
|
|
|
2,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
243 |
|
|
|
168 |
|
|
|
708 |
|
|
|
459 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,471 |
|
|
|
2,016 |
|
|
|
6,602 |
|
|
|
5,619 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau |
|
|
233 |
|
|
|
543 |
|
|
|
844 |
|
|
|
1,256 |
|
Boddington |
|
|
40 |
|
|
|
38 |
|
|
|
147 |
|
|
|
117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
273 |
|
|
|
581 |
|
|
|
991 |
|
|
|
1,373 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,744 |
|
|
$ |
2,597 |
|
|
$ |
7,593 |
|
|
$ |
6,992 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales for gold increased in the third quarter and first nine months
of 2011 compared to the same periods in 2010 due to higher waste mining activities, higher milling
and royalty costs, higher diesel prices, a stronger Australian dollar and a higher co-product
allocation of costs to gold, partially offset by lower workers participation costs. Costs
applicable to sales for copper decreased in the third quarter and first nine months of 2011
compared to the same periods in 2010 due to a lower co-product allocation of costs to copper,
partially offset by higher waste mining costs at Batu Hijau and higher mill maintenance costs at
Boddington. For a complete discussion regarding variations in operations, see Results of
Consolidated Operations below.
Amortization increased in the third quarter of 2011 compared to the third quarter of 2010 due
to higher mine development and asset retirement costs at Yanacocha and higher mine development
costs at Other Australia/New Zealand. Amortization increased in the first nine months of 2011
compared to the first nine months of 2010 due to higher mine development and asset retirement costs
at Yanacocha and higher mine development costs at Other Australia/New Zealand, partially offset by
lower production from Batu Hijau. We continue to expect Amortization to be approximately $1,025 to
$1,035 in 2011.
51
The following is a summary of Costs applicable to sales and Amortization by operation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable |
|
|
|
|
|
|
|
|
|
|
Costs Applicable |
|
|
|
|
|
|
to Sales |
|
|
Amortization |
|
|
to Sales |
|
|
Amortization |
|
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gold |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada |
|
$ |
267 |
|
|
$ |
259 |
|
|
$ |
69 |
|
|
$ |
68 |
|
|
$ |
763 |
|
|
$ |
756 |
|
|
$ |
197 |
|
|
$ |
194 |
|
La Herradura |
|
|
31 |
|
|
|
20 |
|
|
|
6 |
|
|
|
5 |
|
|
|
76 |
|
|
|
52 |
|
|
|
15 |
|
|
|
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
298 |
|
|
|
279 |
|
|
|
75 |
|
|
|
73 |
|
|
|
839 |
|
|
|
808 |
|
|
|
212 |
|
|
|
207 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha |
|
|
194 |
|
|
|
149 |
|
|
|
67 |
|
|
|
42 |
|
|
|
537 |
|
|
|
442 |
|
|
|
186 |
|
|
|
119 |
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington |
|
|
112 |
|
|
|
91 |
|
|
|
28 |
|
|
|
25 |
|
|
|
329 |
|
|
|
284 |
|
|
|
87 |
|
|
|
81 |
|
Batu Hijau |
|
|
58 |
|
|
|
47 |
|
|
|
14 |
|
|
|
12 |
|
|
|
122 |
|
|
|
123 |
|
|
|
28 |
|
|
|
34 |
|
Other Australia/New
Zealand |
|
|
174 |
|
|
|
153 |
|
|
|
36 |
|
|
|
26 |
|
|
|
498 |
|
|
|
446 |
|
|
|
102 |
|
|
|
82 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
344 |
|
|
|
291 |
|
|
|
78 |
|
|
|
63 |
|
|
|
949 |
|
|
|
853 |
|
|
|
217 |
|
|
|
197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo |
|
|
71 |
|
|
|
57 |
|
|
|
19 |
|
|
|
22 |
|
|
|
216 |
|
|
|
176 |
|
|
|
61 |
|
|
|
58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
907 |
|
|
|
776 |
|
|
|
239 |
|
|
|
200 |
|
|
|
2,541 |
|
|
|
2,279 |
|
|
|
676 |
|
|
|
581 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau |
|
|
73 |
|
|
|
96 |
|
|
|
16 |
|
|
|
26 |
|
|
|
241 |
|
|
|
261 |
|
|
|
54 |
|
|
|
72 |
|
Boddington |
|
|
28 |
|
|
|
19 |
|
|
|
6 |
|
|
|
5 |
|
|
|
83 |
|
|
|
68 |
|
|
|
20 |
|
|
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101 |
|
|
|
115 |
|
|
|
22 |
|
|
|
31 |
|
|
|
324 |
|
|
|
329 |
|
|
|
74 |
|
|
|
90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hope Bay |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
10 |
|
Asia Pacific |
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
2 |
|
Corporate and other |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
14 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
26 |
|
|
|
26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,008 |
|
|
$ |
891 |
|
|
$ |
270 |
|
|
$ |
242 |
|
|
$ |
2,865 |
|
|
$ |
2,608 |
|
|
$ |
776 |
|
|
$ |
697 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration expense increased $37 in the third quarter of 2011 compared to the third
quarter of 2010 due to additional expenditures in all regions, with the largest increases
at Long Canyon and Hope Bay. Exploration expense increased $92 in the first nine months of 2011
compared to the first nine months of 2010 due to additional expenditures in all regions,
with the largest increases at Long Canyon and other operations at Nevada, Hope Bay, Ahafo and
Jundee. We continue to expect Exploration expense to be approximately $335 to $345 in 2011.
52
Advanced projects, research and development expense in the third quarter and first nine months
of 2011 and 2010 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Hope Bay |
|
$ |
36 |
|
|
$ |
13 |
|
|
$ |
115 |
|
|
$ |
48 |
|
Conga |
|
|
9 |
|
|
|
2 |
|
|
|
15 |
|
|
|
5 |
|
Akyem |
|
|
2 |
|
|
|
|
|
|
|
3 |
|
|
|
4 |
|
Technical and project services |
|
|
20 |
|
|
|
12 |
|
|
|
53 |
|
|
|
35 |
|
Corporate |
|
|
7 |
|
|
|
4 |
|
|
|
16 |
|
|
|
25 |
|
Other |
|
|
19 |
|
|
|
15 |
|
|
|
45 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
93 |
|
|
$ |
46 |
|
|
$ |
247 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We continue to expect Advanced projects, research and development expenses to be
approximately $405 to $415 in 2011.
General and administrative expenses increased by $5 and $12 for the third quarter and first
nine months of 2011, respectively, compared to the same periods of 2010 due to higher compensation
and benefit costs resulting mainly from a larger workforce to support our growth plans. We continue
to expect General and administrative expenses to be approximately $190 to $200 in 2011.
Other expense, net decreased by $14 in the third quarter of 2011 compared to the third quarter
of 2010 mainly due to lower community development costs. Other expense, net decreased by $4 in the
first nine months of 2011 compared to the first nine months of 2010 due to lower community
development costs, partially offset by the Indonesian value added tax settlement and Fronteer
acquisition costs.
Other income, net decreased by $81 in the third quarter of 2011 compared to the third quarter
of 2010 due to the impairment loss on Paladin Energy Ltd. (Paladin) of $148 and other marketable
equity securities of $26, partially offset by the gain on the sale of other marketable equity
securities and foreign currency exchange gains in 2011 compared to losses in 2010. Paladin is a
uranium producer and our investment was acquired with the Fronteer acquisition. The value of the
Paladin securities has declined since Japans nuclear crisis in March 2011. Other income, net
decreased by $94 in the first nine months of 2011 compared to the first nine months of 2010 due to
the impairment loss on Paladin of $148 and other marketable equity securities of $27 and the sale
of non-core assets in 2010 partially offset by the gain on the sale of New Gold, Inc. and other
marketable equity securities and foreign currency exchange gains in 2011 compared to losses in
2010.
Interest expense, net decreased by $1 and $17 in the third quarter and first nine months of
2011, respectively, compared to the same periods in 2010 due to the prepayment of the Yanacocha
senior notes and credit facility in 2010 and higher capitalized interest, partially offset by
commitment fees on the PTNNT revolving credit facility. Capitalized interest increased by
$9 and $19 in the third quarter and first nine months of 2011, respectively, compared to the same
periods in 2010 due to higher capitalized costs related to the advancement of our Conga and Akyem
projects. We continue to expect Interest expense, net to be approximately $235 to $245 in 2011.
Income and mining tax expense during the third quarter of 2011 was $371 resulting in an
effective tax rate of 36%. Income and mining tax expense during the third quarter of 2010 was $360
for an effective tax rate of 31%. The higher effective rate in 2011 resulted from recording a
valuation allowance on the deferred tax asset generated as a result of the impairment loss on
specific marketable equity securities and the change in the jurisdictional blend of our taxable
income and the effect it has on the overall rate impact from percentage depletion. Income and
mining tax expense during the first nine months of 2011 was $863 resulting in an effective tax rate
of 30%. Income and mining tax expense during the first nine months of 2010 was $784 for an
effective tax rate of 27%. The higher effective tax rate in the first nine months of 2011 was due
to recording a valuation allowance related to the impairment loss on specific marketable equity
securities as well as a large benefit in the prior year resulting from the restructuring of the
form of the Companys non-US subsidiaries. The effective tax rates are different from the United
States statutory rate of 35% primarily due to the above mentioned tax benefits and U.S. percentage
depletion. For a complete discussion of the factors that influence our effective tax rate, see
Managements Discussion and Analysis of Consolidated Financial Condition and Results of Operations
in Newmonts Annual Report on Form 10-K for the year ended December 31, 2010 filed February 24,
2011.
During the quarter, the U.S. Internal Revenue Services issued a Technical Advice Memorandum
(TAM) to us regarding the income tax treatment of the 2007 cash settlement of the Price Capped
Forward Sales Contracts. The TAM provides unfavorable guidance and we intend to vigorously defend
our positions through all available processes.
53
During the quarter, Peru enacted four new tax laws. The enactment of the new Peruvian taxes is
not anticipated to necessitate adjustment to deferred tax assets or deferred tax liabilities. The
new tax laws are not anticipated to have a material impact on the Companys Income and mining tax expense.
We expect the 2011 consolidated tax rate to be approximately 29% to 31%, assuming an average
realized gold price of $1,600 per ounce in the remainder of the year.
Net income attributable to noncontrolling interests decreased to $182 in the third quarter of
2011 compared to $277 in the third quarter of 2010 as a result of decreased earnings at Batu Hijau,
partially offset by increased earnings at Yanacocha. Net income attributable to noncontrolling
interests decreased to $475 in the first nine months of 2011 compared to $629 in the first nine
months of 2010 as a result of decreased earnings at Batu Hijau.
Loss from discontinued operations includes the accrual of St. Andrew Goldfields Ltd.s Holt
property royalty in the second quarter of 2011. In 2009, the Superior Court issued a decision
finding Newmont Canada Corporation (Newmont Canada) liable for a sliding scale royalty on
production from the Holt property, which Newmont Canada appealed. In May 2011, the Ontario Court of
Appeal upheld the Superior Court ruling resulting in a $136 charge, net of tax benefits of $7.
Results of Consolidated Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold or Copper Produced(1) |
|
|
Costs Applicable to Sales(2) |
|
|
Amortization |
|
Three Months Ended September 30, |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gold |
|
(ounces in thousands)
|
|
($ per ounce)
|
|
($ per ounce)
|
North America |
|
|
482 |
|
|
|
495 |
|
|
$ |
633 |
|
|
$ |
549 |
|
|
$ |
158 |
|
|
$ |
144 |
|
South America |
|
|
328 |
|
|
|
355 |
|
|
|
610 |
|
|
|
420 |
|
|
|
211 |
|
|
|
118 |
|
Asia Pacific |
|
|
563 |
|
|
|
683 |
|
|
|
652 |
|
|
|
445 |
|
|
|
146 |
|
|
|
96 |
|
Africa |
|
|
146 |
|
|
|
156 |
|
|
|
501 |
|
|
|
422 |
|
|
|
140 |
|
|
|
160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/Weighted-Average |
|
|
1,519 |
|
|
|
1,689 |
|
|
$ |
622 |
|
|
$ |
470 |
|
|
$ |
164 |
|
|
$ |
121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Newmont(3)(4) |
|
|
1,311 |
|
|
|
1,408 |
|
|
$ |
628 |
|
|
$ |
496 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Attributable to Newmont(4) |
|
|
|
|
|
|
|
|
|
$ |
556 |
|
|
$ |
323 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper |
|
(pounds in millions) |
|
($ per pound)
|
|
($ per pound)
|
Asia Pacific |
|
|
102 |
|
|
|
156 |
|
|
$ |
1.10 |
|
|
$ |
0.73 |
|
|
$ |
0.24 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Newmont(4) |
|
|
58 |
|
|
|
83 |
|
|
$ |
1.25 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold or Copper Produced(1) |
|
|
Costs Applicable to Sales(2) |
|
|
Amortization |
|
Nine Months Ended September 30, |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gold |
|
(ounces in thousands) |
|
($ per ounce) |
|
($ per ounce) |
North America |
|
|
1,374 |
|
|
|
1,431 |
|
|
$ |
624 |
|
|
$ |
565 |
|
|
$ |
157 |
|
|
$ |
145 |
|
South America |
|
|
958 |
|
|
|
1,131 |
|
& |