UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

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

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

Commission File Number: 001-31240

NEWMONT MINING CORPORATION

Delaware (State or Other Jurisdiction of Incorporation or Organization)		84-1611629 (I.R.S. Employer Identification No.)
6363 South Fiddler’s Green Circle Greenwood Village, Colorado (Address of Principal Executive Offices)		80111 (Zip Code)

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 definition of “accelerated filer” and “large accelerated filer” in Rule 12-b2 of the Exchange Act. (Check one):

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

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 480,405,625 shares of common stock outstanding on October 23, 2009 (and 9,763,091 exchangeable shares).

 

 

TABLE OF CONTENTS

		Page
PART I
ITEM 1. FINANCIAL STATEMENTS			1
Condensed Consolidated Statements of Income			1
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Cash Flows			3
Notes to Condensed Consolidated Financial Statements			4
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION			47
Selected Financial and Operating Results			47
Consolidated Financial Results			47
Results of Consolidated Operations			53
Liquidity and Capital Resources			59
Environmental			61
Recently Adopted Accounting Pronouncements			62
Recently Issued Accounting Pronouncements and Developments			65
Safe Harbor Statement			65
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			67
ITEM 4. CONTROLS AND PROCEDURES			69
PART II
ITEM 1. LEGAL PROCEEDINGS			70
ITEM 1A. RISK FACTORS			70
ITEM 2. ISSUER PURCHASES OF EQUITY SECURITIES			71
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS			71
ITEM 5. OTHER MATTERS			71
ITEM 6. EXHIBITS			71
SIGNATURES			S-1
EXHIBIT INDEX			E-1
Exhibit 3.1
Exhibit 3.5
Exhibit 12.1
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I—FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

(unaudited, in millions except per share)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Revenues
Sales — gold, net		$	1,653			$	1,281			$	4,401			$	4,094
Sales — copper, net			396				90				786				705
			2,049				1,371				5,187				4,799
Costs and expenses
Costs applicable to sales — gold (1)			694				692				1,983				1,969
Costs applicable to sales — copper (1)			71				88				217				342
Amortization			199				186				566				548
Accretion (Note 23)			8				7				25				23
Exploration			55				57				147				154
Advanced projects, research and development (Note 3)			27				44				100				113
General and administrative			39				37				118				103
Other expense, net (Note 4)			67				69				259				249
			1,160				1,180				3,415				3,501
Other income (expense)
Other income, net (Note 5)			25				66				43				100
Interest expense, net			(10	)			(35	)			(65	)			(98	)
			15				31				(22	)			2
Income from continuing operations before income tax and other items			904				222				1,750				1,300
Income tax expense (Note 8)			(253	)			(6	)			(494	)			(193	)
Equity loss of affiliates			(6	)			(1	)			(14	)			(6	)
Income from continuing operations			645				215				1,242				1,101
Income (loss) from discontinued operations (Note 9)			—				7				(14	)			17
Net income			645				222				1,228				1,118
Net income attributable to noncontrolling interests (Note 10)			(257	)			(31	)			(489	)			(291	)
Net income attributable to Newmont stockholders		$	388			$	191			$	739			$	827
Net income attributable to Newmont stockholders:
Continuing operations		$	388			$	182			$	748			$	809
Discontinued operations			—				9				(9	)			18
		$	388			$	191			$	739			$	827
Income per common share (Note 11)
Basic:
Continuing operations		$	0.79			$	0.40			$	1.54			$	1.78
Discontinued operations			—				0.02				(0.02	)			0.04
		$	0.79			$	0.42			$	1.52			$	1.82
Diluted:
Continuing operations		$	0.79			$	0.40			$	1.54			$	1.77
Discontinued operations			—				0.02				(0.02	)			0.04
		$	0.79			$	0.42			$	1.52			$	1.81
Basic weighted-average common shares outstanding			490				454				485				454
Diluted weighted-average common shares outstanding			491				455				486				456
Cash dividends declared per common share		$	0.10			$	0.10			$	0.30			$	0.30

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in millions)

		At September 30,				At December 31,
		2009				2008
ASSETS
Cash and cash equivalents		$	3,022			$	435
Marketable securities and other short-term investments (Note 17)			19				12
Trade receivables			280				104
Accounts receivable			114				214
Inventories (Note 18)			479				507
Stockpiles and ore on leach pads (Note 19)			354				290
Deferred income tax assets			189				284
Other current assets (Note 20)			581				455
Current assets			5,038				2,301
Property, plant and mine development, net			12,150				10,128
Investments (Note 17)			1,069				655
Stockpiles and ore on leach pads (Note 19)			1,411				1,136
Deferred income tax assets			999				1,039
Other long-term assets (Note 20)			261				207
Goodwill			188				188
Assets of operations held for sale (Note 9)			31				73
Total assets		$	21,147			$	15,727
LIABILITIES
Current portion of long-term debt (Note 21)		$	225			$	165
Accounts payable			338				411
Employee-related benefits			201				170
Income and mining taxes			211				61
Other current liabilities (Note 22)			1,226				770
Current liabilities			2,201				1,577
Long-term debt (Note 21)			4,698				3,072
Reclamation and remediation liabilities (Note 23)			724				699
Deferred income tax liabilities			1,229				1,051
Employee-related benefits			377				379
Other long-term liabilities (Note 22)			236				252
Liabilities of operations held for sale (Note 9)			13				36
Total liabilities			9,478				7,066
Commitments and contingencies (Note 27)
EQUITY
Common stock			768				709
Additional paid-in capital			8,060				6,831
Accumulated other comprehensive income (loss)			454				(253	)
Retained earnings			641				4
Newmont stockholders’ equity			9,923				7,291
Noncontrolling interests			1,746				1,370
Total equity (Note 13)			11,669				8,661
Total liabilities and equity		$	21,147			$	15,727

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

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)

		Nine Months Ended
		September 30,
		2009				2008
Operating activities:
Net income		$	1,228			$	1,118
Adjustments:
Amortization			566				548
Loss (income) from discontinued operations (Note 9)			14				(17	)
Accretion of accumulated reclamation obligations (Note 23)			34				30
Deferred income taxes			7				(222	)
Impairment of marketable securities (Note 17)			6				90
Stock based compensation and other benefits			44				38
Gain on asset sales, net			(3	)			(70	)
Reclamation estimate revisions (Note 23)			—				74
Other operating adjustments and write-downs			77				73
Net change in operating assets and liabilities (Note 24)			(27	)			(494	)
Net cash provided from continuing operations			1,946				1,168
Net cash provided from (used in) discontinued operations (Note 9)			3				(105	)
Net cash provided from operations			1,949				1,063
Investing activities:
Additions to property, plant and mine development			(1,314	)			(1,350	)
Investments in marketable debt and equity securities			—				(18	)
Proceeds from sale of marketable debt and equity securities			10				50
Acquisitions, net (Note 14)			(766	)			(325	)
Other			(18	)			26
Net cash used in investing activities of continuing operations			(2,088	)			(1,617	)
Net cash used in investing activities of discontinued operations (Note 9)			—				(11	)
Net cash used in investing activities			(2,088	)			(1,628	)
Financing activities:
Proceeds from debt, net			4,302				2,801
Repayment of debt			(2,604	)			(2,249	)
Dividends paid to common stockholders			(147	)			(136	)
Dividends paid to noncontrolling interests			(115	)			(247	)
Proceeds from stock issuance, net			1,248				27
Change in restricted cash and other			5				19
Net cash provided from financing activities of continuing operations			2,689				215
Net cash used in financing activities of discontinued operations (Note 9)			(2	)			(3	)
Net cash provided from financing activities			2,687				212
Effect of exchange rate changes on cash			39				(24	)
Net change in cash and cash equivalents			2,587				(377	)
Cash and cash equivalents at beginning of period			435				1,230
Cash and cash equivalents at end of period		$	3,022			$	853

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

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

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 Company has evaluated all subsequent events through October 28, 2009. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with Newmont’s Consolidated Financial Statements for the year ended December 31, 2008 included in its Form 8-K, filed September 15, 2009. The year-end balance sheet data was derived from the audited financial statements, but does not include all disclosures required by U.S. generally accepted accounting principles (“GAAP”).

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

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recently Adopted Accounting Pronouncements

The Accounting Standards Codification

In June 2009, the Financial Accounting Standards Board (“FASB”) established the FASB Accounting Standards Codification (“ASC”) as the single source of authoritative GAAP to be applied by nongovernmental entities. The ASC is a new structure which took existing accounting pronouncements and organized them by accounting topic. Relevant authoritative literature issued by the Securities and Exchange Commission (“SEC”) and select SEC staff interpretations and administrative literature was also included in the ASC. All other accounting guidance not included in the ASC is non-authoritative. The ASC was effective for the Company’s interim quarterly period beginning July 1, 2009. The adoption of the ASC did not have an impact on the Company’s consolidated financial position, results of operations or cash flows.

Subsequent Events

In May 2009, the ASC guidance for subsequent events was updated to establish accounting and reporting standards for events that occur after the balance sheet date but before financial statements are issued or are available to be issued. The update sets forth: (i) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (ii) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet in its financial statements, and (iii) the disclosures that an entity should make about events or transactions occurring after the balance sheet date in its financial statements. The Company adopted the updated guidance for the interim period ended June 30, 2009. The adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Post-Retirement Benefit Plans

In December 2008, the ASC guidance for retirement benefits was updated to expand the requirements of employers’ disclosures about post-retirement benefit plan assets in a defined benefit pension or other post-retirement plan. The objective is to require more detailed disclosures about employers’ plan assets, including employers’ investment strategies, major categories of plan assets, concentrations of risk within plan assets, and valuation techniques used to measure the fair value of plan assets. The Company adopted the updated guidance on January 1, 2009. These disclosures are not required for earlier periods that are presented for comparative purposes.

Equity Method Investments

In November 2008, the ASC guidance for equity method and joint venture investments was updated to clarify the accounting for certain transactions and impairment considerations involving equity method investments. The intent is to provide guidance on: (i) determining the initial measurement of an equity method investment, (ii) recognizing other-than- temporary impairments of an equity method investment and (iii) accounting for an equity method investee’s issuance of shares. The updated guidance was effective for the Company’s fiscal year beginning January 1, 2009 and was applied prospectively. The adoption had no impact on the Company’s consolidated financial position or results of operations.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

Equity-Linked Financial Instruments

In June 2008, the ASC guidance for derivatives and hedging when accounting for contracts in an entity’s own equity was updated to clarify the determination of whether an instrument (or embedded feature) is indexed to an entity’s own stock which would qualify as a scope exception from hedge accounting. The updated guidance was effective for the Company’s fiscal year beginning January 1, 2009. The adoption had no impact on the Company’s consolidated financial position or results of operations.

Accounting for Convertible Debt Instruments

In May 2008, the ASC guidance was updated for convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative. The update requires that the liability and equity components of convertible debt instruments within the scope be separately accounted for in a manner that reflects the entity’s nonconvertible debt borrowing rate. This requires an allocation of convertible debt proceeds between the liability component and the embedded conversion option (i.e., the equity component). The difference between the principal amount of the debt and the amount of the proceeds allocated to the liability component is reported as a debt discount and subsequently amortized to earnings over the instrument’s expected life using the effective interest method. The updated guidance required retrospective application to all periods presented.

During July 2007, the Company completed an offering of $1,150 convertible senior notes due 2014 and 2017, each in the amount of $575. The 2014 notes, maturing on July 15, 2014, pay interest semi-annually at a rate of 1.25% per annum, and the 2017 notes, maturing on July 15, 2017, pay interest semi-annually at a rate of 1.625% per annum. The notes are convertible, at the holder’s option, equivalent to a conversion price of $46.21 per share of common stock (24,887,956 shares of common stock). In connection with the convertible senior notes offering, the Company entered into convertible note hedge transactions and warrant transactions (“Call Spread Transactions”). The Call Spread Transactions included the purchase of call options and the sale of warrants. As a result of the Call Spread Transactions, the conversion price of $46.21 was effectively increased to $60.27. At September 30, 2009, the if-converted value did not exceed the principal amounts.

During February 2009, the Company completed an offering of $518 convertible senior notes due on February 15, 2012. The notes will pay interest semi-annually at a rate of 3.00% per annum. The notes are convertible, at the holder’s option, equivalent to a conversion price of $46.25 per share of common stock (11,189,189 shares of common stock). At September 30, 2009, the if-converted value did not exceed the principal amount.

The Company recorded the following in the Condensed Consolidated Balance Sheets related to the convertible senior notes:

		At September 30, 2009												At December 31, 2008
		Convertible Senior Notes Due												Convertible Senior Notes Due
		2012				2014				2017				2012				2014				2017
Additional paid-in capital		$	46			$	97			$	123			$	—			$	97			$	123
Principal amount		$	518			$	575			$	575			$	—			$	575			$	575
Unamortized debt discount			(60	)			(112	)			(162	)			—				(127	)			(174	)
Net carrying amount		$	458			$	463			$	413			$	—			$	448			$	401

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

As a result of adopting the updated guidance, the effective interest rates increased by approximately 5 percentage points to 8.5%, 6.0% and 6.25% for the 2012, 2014 and 2017 notes, respectively, for the non-cash amortization of the debt discount over the lives of the notes. Interest expense was increased by $9 which decreased the Company’s Income from continuing operations and Net income by $5 ($0.01 per share) for the three months ended September 30, 2008. Interest expense was increased by $25 which decreased the Company’s Income from continuing operations and Net income by $16 ($0.03 per share) for the nine months ended September 30, 2008. Had the update been effective in 2008, the Company would have charged its fourth quarter 2008 dividends to Additional paid-in capital rather than Retained earnings; therefore the Company made the reclassification in 2009. Cash flows from operations were not impacted by the adoption of the updated guidance. The impact on the Company’s 2009 opening balance in Retained earnings was as follows:

		At December 31,
		2008
Balance before application of updated guidance		$	7
Impact of adoption of updated guidance			(31	)
Reclassification of dividends to Additional paid-in capital			28
Balance after application of updated guidance		$	4

For the three months ended September 30, 2009, the Company recorded $8 and $15 of interest expense for the contractual interest coupon and amortization of the debt discount, respectively, related to the convertible senior notes. For the nine months ended September 30, 2009, the Company recorded $22 and $41 of interest expense for the contractual interest coupon and amortization of the debt discount, respectively, related to the convertible senior notes. The remaining unamortized debt discount is amortized over the remaining 3, 5 and 8 year periods of the 2012, 2014 and 2017 convertible senior notes, respectively.

Accounting for the Useful Life of Intangible Assets

In April 2008, the ASC guidance for Goodwill and Other Intangibles was updated to amend the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The intent of this update is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset under guidance for business combinations. The updated guidance was effective for the Company’s fiscal year beginning January 1, 2009 and was applied prospectively to intangible assets acquired after the effective date. The adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Derivative Instruments

In March 2008, the ASC guidance for derivatives and hedging was updated for enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and the related hedged items are accounted for, and how derivative instruments and the related hedged items affect an entity’s financial position, financial performance and cash flows. The Company adopted the updated guidance on January 1, 2009. The adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows. See Note 16 for the Company’s derivative instruments disclosure.

Business Combinations

In December 2007, the ASC guidance for business combinations was updated to provide new guidance for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and any noncontrolling interest in the acquiree. The updated guidance also provides disclosure requirements to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The Company adopted the updated guidance on January 1, 2009 and applied it to the acquisition of the remaining 33.33% interest in the Boddington project completed on June 25, 2009 (see Note 14).

In April 2009, the guidance was updated to address application issues on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. This update is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The adoption of the updated guidance did not have any impact on the Company’s acquisition of the remaining 33.33% interest in the Boddington project completed on June 25, 2009 (see Note 14).

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

Noncontrolling Interests

In December 2007, the ASC guidance for Noncontrolling Interests was updated to establish accounting and reporting standards pertaining to: (i) ownership interests in subsidiaries held by parties other than the parent (“noncontrolling interest”), (ii) the amount of net income attributable to the parent and to the noncontrolling interest, (iii) changes in a parent’s ownership interest, and (iv) the valuation of any retained noncontrolling equity investment when a subsidiary is deconsolidated. If a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary is measured at fair value and a gain or loss is recognized in net income based on such fair value. For presentation and disclosure purposes, the guidance requires noncontrolling interests to be classified as a separate component of equity. The Company adopted the updated guidance on January 1, 2009. Except for presentation changes, the adoption had no impact on the Company’s consolidated financial position, results of operations or cash flows.

Fair Value Accounting

In September 2006, the ASC guidance for fair value measurements and disclosure was updated to define fair value, establish a framework for measuring fair value, and expand disclosures about fair value measurements. The Company adopted the updated guidance for assets and liabilities measured at fair value on a recurring basis on January 1, 2008. In February 2008, the FASB staff issued an update to the guidance which delayed the effective date for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The Company adopted the updated guidance for the Company’s nonfinancial assets and liabilities measured at fair value on a nonrecurring basis on January 1, 2009.

In April 2009, the guidance was further updated to provide additional guidance on determining fair value when the volume and level of activity for the asset or liability have significantly decreased and identifying circumstances that indicate when a transaction is not orderly. In April 2009, the guidance for investments in debt and equity securities was updated to: (i) clarify the interaction of the factors that should be considered when determining whether a debt security is other than temporarily impaired, (ii) provide guidance on the amount of an other-than-temporary impairment recognized for a debt security in earnings and other comprehensive income and (iii) expand the disclosures required for other-than-temporary impairments for debt and equity securities. Also in April 2009, the guidance for financial instruments was updated to require disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. Adoption of this updated guidance was required for the Company’s interim reporting period beginning April 1, 2009 with early adoption permitted. The Company adopted the updated guidance for the interim period ended March 31, 2009. Refer to Note 15 for further details regarding the Company’s assets and liabilities measured at fair value.

Recently Issued Accounting Pronouncements

Fair Value Accounting

In August 2009, the ASC guidance for fair value measurements and disclosure was updated to further define fair value of liabilities. This update provides clarification for circumstances in which: (i) a quoted price in an active market for the identical liability is not available, (ii) the liability has a restriction that prevents its transfer, and (iii) the identical liability is traded as an asset in an active market in which no adjustments to the quoted price of an asset are required. The updated guidance is effective for the Company’s interim reporting period beginning October 1, 2009. The Company is evaluating the potential impact of adopting this guidance on the Company’s consolidated financial position, results of operations and cash flows.

Variable Interest Entities

In June 2009, the ASC guidance for consolidation accounting was updated to require an entity to perform a qualitative analysis to determine whether the enterprise’s variable interest gives it a controlling financial interest in a variable interest entity (“VIE”). This analysis identifies a primary beneficiary of a VIE as the entity that has both of the following characteristics: (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses or receive benefits from the entity that could potentially be significant to the VIE. The updated guidance also requires ongoing reassessments of the primary beneficiary of a VIE. The updated guidance is effective for the Company’s fiscal year beginning January 1, 2010. The Company currently accounts for Nusa Tenggara Partnership (“NTP”) as a VIE and is evaluating the potential impact of adopting this guidance on the Company’s consolidated financial position, results of operations and cash flows.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 3 ADVANCED PROJECTS, RESEARCH AND DEVELOPMENT

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Boddington		$	11			$	1			$	24			$	3
Hope Bay			2				16				18				29
Technical and project services			6				5				18				15
Corporate			3				3				10				10
Nevada underground			1				1				9				1
Akyem			2				2				5				5
Fort a la Corne JV			—				6				1				19
Other			2				10				15				31
		$	27			$	44			$	100			$	113

NOTE 4 OTHER EXPENSE, NET

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Boddington acquisition costs (Note 14)		$	—			$	—			$	67			$	—
Regional administration			14				10				40				31
Community development			12				15				33				47
Western Australia power plant			18				2				27				15
Peruvian royalty			8				4				19				15
Workforce reduction			—				—				15				—
Batu Hijau divestiture			3				2				9				7
Accretion, non-operating (Note 23)			3				2				9				7
World Gold Council dues			2				3				8				8
Reclamation estimate revisions (Note 23)			—				13				—				74
Pension settlement loss (Note 6)			—				1				—				12
Provision for bad debts			—				11				—				11
Other			7				6				32				22
		$	67			$	69			$	259			$	249

NOTE 5 OTHER INCOME, NET

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Canadian Oil Sands Trust income		$	7			$	36			$	16			$	91
Refinery income			9				2				13				2
Interest income			2				7				11				24
Gain on sale of investments, net			2				19				2				29
Foreign currency exchange gains (losses), net			2				(7	)			—				(20	)
Gain on sale of exploration property			—				32				—				32
Income from development projects, net			—				3				—				12
(Loss) gain on ineffective portion of derivative instruments, net (Note 16)			(1	)			3				(5	)			5
Impairment of marketable securities (Note 17)			—				(34	)			(6	)			(90	)
Other			4				5				12				15
		$	25			$	66			$	43			$	100

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 EMPLOYEE PENSION AND OTHER BENEFIT PLANS

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Pension benefit costs, net
Service cost		$	5			$	4			$	14			$	12
Interest cost			8				7				24				22
Expected return on plan assets			(8	)			(7	)			(22	)			(21	)
Amortization of prior service cost			—				—				1				—
Amortization of loss			4				—				11				2
		$	9			$	4			$	28			$	15

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Other benefit costs, net
Service cost		$	1			$	—			$	2			$	1
Interest cost			1				1				4				3
Amortization of gain			—				—				—				(1	)
		$	2			$	1			$	6			$	3

For the three months ended September 30, 2009 and 2008, the Company recognized pension settlement losses of $nil and $1, respectively, related to senior management retirements. For the nine months ended September 30, 2009 and 2008, the Company recognized pension settlement losses of $nil and $12, respectively, related to senior management retirements. These costs were recorded in Other expense, net (see Note 4).

NOTE 7 STOCK BASED COMPENSATION

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Stock options		$	3			$	5			$	11			$	13
Restricted stock units			3				—				6				—
Deferred stock awards			2				3				10				8
Restricted stock awards			—				1				3				4
		$	8			$	9			$	30			$	25

For the three months ended September 30, 2009 and 2008, no stock options were granted. For the nine months ended September 30, 2009 and 2008, 1,157,825 and 1,116,963 stock options, respectively, were granted at a weighted-average exercise price of $40 and $44, respectively, per underlying share of the Company’s common stock. At September 30, 2009, unrecognized compensation costs related to unvested stock options was $22. This cost is expected to be recognized over a weighted-average period of approximately 2.2 years.

For the three months ended September 30, 2009 and 2008, no shares of restricted stock units were granted. For the nine months ended September 30, 2009 and 2008, 490,273 and 8,927 shares of restricted stock units, respectively, were granted, at a weighted-average fair market value of $42 and $49, respectively.

No deferred stock awards were granted during the three and nine months ended September 30, 2009, and the three months ended September 30, 2008. For the nine months ended September 30, 2008, 394,095 deferred stock awards were granted at a weighted-average fair market value of $44.

No restricted stock awards were granted during the three and nine months ended September 30, 2009. For the three and nine months ended September 30, 2008, 4,034 and 118,697 shares of restricted stock, respectively, were granted and issued, at a weighted-average fair market value of $50 and $49, respectively.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 8 INCOME TAXES

The Company operates in numerous countries around the world and accordingly it is subject to, and pays annual income taxes under, the various income tax regimes in the countries in which it operates. Some of these tax regimes are defined by contractual agreements with the local government, and others are defined by the general corporate income tax laws of the country. The Company has historically filed, and continues to file, all required income tax returns and paid the taxes reasonably determined to be due. The tax rules and regulations in many countries are highly complex and subject to interpretation. From time to time, the Company is subject to a review of its historic income tax filings and in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or application of certain rules to the Company’s business conducted within the country involved. At September 30, 2009, the Company’s total unrecognized tax benefit was $120 for uncertain tax positions taken or expected to be taken on tax returns. Of this, $93 represents the amount of unrecognized tax benefits that, if recognized, would affect the Company’s effective income tax rate. Also included in the balance at September 30, 2009 is $12 of tax positions that, due to the impact of deferred tax accounting, the potential disallowance of which would not affect the annual effective tax rate.

In April 2009, the United States Tax Court issued an opinion for Santa Fe Pacific Gold Company and Subsidiaries (“Santa Fe”), by and through its successor in interest, Newmont USA Limited, a member of the Newmont Mining Corporation (“Newmont”) affiliated group. The Tax Court ruled in favor of Santa Fe regarding the deductibility of a termination fee that had been paid in 1997 as part of a merger agreement. At September 30, 2009, Newmont had not been notified by the Commissioner of the Internal Revenue Service (“Commissioner”) regarding a decision to appeal the Tax Court Ruling. If the Commissioner does not file an appeal, the Company will be decreasing its liability and accrued interest for uncertain income tax positions in the fourth quarter of 2009.

As a result of (i) statute of limitations that expire in the next 12 months in various jurisdictions, (ii) the effects of the aforementioned closure with respect to the Santa Fe matters described above and (iii) possible settlements of audit-related issues with taxing authorities in various jurisdictions, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease by approximately $55 to $87 in the next 12 months.

NOTE 9 DISCONTINUED OPERATIONS

Discontinued operations include the Company’s Kori Kollo operation sold in July 2009 and the royalty portfolio and Pajingo operations, both sold in December 2007.

The Company has reclassified the historical balance sheet amounts and the income statement results to Assets and Liabilities of operations held for sale on the Condensed Consolidated Balance Sheets and to Income (loss) from discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. The Condensed Consolidated Statements of Cash Flows have been reclassified for assets held for sale and discontinued operations for all periods presented.

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Sales — gold, net		$	—			$	21			$	32			$	58
Income (loss) from operations		$	—			$	(19	)		$	1			$	(7	)
Loss on impairment			—				—				(44	)			—
Gain on sale of royalty portfolio			—				—				—				5
Gain on sale of Pajingo assets			—				—				—				1
Pre-tax loss			—				(19	)			(43	)			(1	)
Income tax benefit			—				26				29				18
Income (loss) from discontinued operations		$	—			$	7			$	(14	)		$	17

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

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

		At September 30,				At December 31,
		2009				2008
Assets:
Accounts receivable		$	—			$	9
Inventories			—				12
Stockpiles and ore on leach pads			—				43
Property, plant and mine development			—				4
Deferred income tax assets			31				2
Other assets			—				3
Total assets of operations held for sale		$	31			$	73
Liabilities:
Current and long-term debt		$	—			$	4
Accounts payable			—				1
Employee-related benefits			—				8
Reclamation and remediation liabilities			—				17
Other liabilities			13				6
Total liabilities of operations held for sale		$	13			$	36

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

		Nine Months Ended
		September 30,
		2009				2008
Net cash provided from (used in) discontinued operations:
(Loss) income from discontinued operations		$	(14	)		$	17
Impairment of assets held for sale			44				—
Write-down of inventory			7				—
Amortization			3				7
Deferred income taxes			(30	)			(1	)
Other operating adjustments			1				15
Decrease in net operating liabilities			(8	)			(143	)
		$	3			$	(105	)
Net cash used in investing activities of discontinued operations:
Additions to property, plant and mine development		$	—			$	(5	)
Proceeds from asset sales, net			—				(6	)
		$	—			$	(11	)
Net cash used in financing activities of discontinued operations:
Repayment of debt		$	(2	)		$	(3	)
		$	(2	)		$	(3	)

NOTE 10 NONCONTROLLING INTERESTS

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Batu Hijau		$	156			$	(17	)		$	248			$	103
Yanacocha			99				49				243				188
Other			2				(1	)			(2	)			—
		$	257			$	31			$	489			$	291

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

Newmont currently has a 45% ownership interest in Batu Hijau, held through NTP with an affiliate of Sumitomo Corporation of Japan (“Sumitomo”). Newmont has a 56.25% interest in NTP and the Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 80% of P.T. Newmont Nusa Tenggara (“PTNNT”), the Indonesian subsidiary that operates the Batu Hijau mine. Newmont identified NTP as a VIE as a result of certain capital structures and contractual relationships and has fully consolidated Batu Hijau in its consolidated financial statements since January 1, 2004. The remaining 20% interest in PTNNT is owned by P.T. Pukuafu Indah (“PTPI”), an unrelated Indonesian company. NTP’s interest in PTNNT was the subject of an international arbitration proceeding and a final award concerning PTNNT’s interest was issued by the arbitration panel on March 31, 2009. For further information concerning the arbitration award, see Note 27.

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

In April 2008, the Company purchased 15,960 additional shares of European Gold Refineries SA joint venture (“EGR”) for $11 in cash increasing its ownership interest to 56.67% from 46.72%. The acquisition of the additional interest resulted in the consolidation of EGR. In November 2008, EGR repurchased 6.55% of its own shares from a minority shareholder bringing Newmont’s ownership to 60.64%. Swiss residents hold the remaining 39.36%. Prior to consolidation, the Company accounted for EGR using the equity method of accounting.

NOTE 11 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 the denominator is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Numerator:
Net income attributable to Newmont stockholders
Continuing operations		$	388			$	182			$	748			$	809
Discontinued operations			—				9				(9	)			18
		$	388			$	191			$	739			$	827
Denominator:
Basic			490				454				485				454
Effect of employee stock-based awards			1				1				1				2
Diluted			491				455				486				456
Net income attributable to Newmont stockholders per common share
Basic:
Continuing operations		$	0.79			$	0.40			$	1.54			$	1.78
Discontinued operations			—				0.02				(0.02	)			0.04
		$	0.79			$	0.42			$	1.52			$	1.82
Diluted:
Continuing operations		$	0.79			$	0.40			$	1.54			$	1.77
Discontinued operations			—				0.02				(0.02	)			0.04
		$	0.79			$	0.42			$	1.52			$	1.81

In February 2009, the Company completed a public offering of 34,500,000 shares of common stock at $37 per share for net proceeds of $1,233.

Options to purchase 5.1 million and 1.1 million shares of common stock at average exercise prices of $46 and $55 were outstanding at September 30, 2009 and 2008, respectively, but were not included in the computation of diluted weighted average number of common shares because the exercise prices of the options exceeded the price of the common stock.

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 2007 and February 2009, Newmont issued $1,150 and $518, respectively, of convertible notes that, if converted in the future, would have a potentially dilutive effect on the Company’s stock. Under the indenture for the convertible notes, upon conversion Newmont is required to settle the principal amount of the convertible notes in cash and may elect to settle the remaining conversion obligation (stock price in excess of the conversion price) 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 accounting guidance for earnings per share. Under the net share settlement method, the Company includes the amount of shares it would take to satisfy the conversion obligation, assuming that all of the convertible notes are surrendered. The average closing price of the Company’s common stock for each of the periods presented is used as the basis for determining dilution. The average price of the Company’s common stock for all periods presented did not exceed the conversion price of $46.25 and $46.21 for the notes issued in 2009 and 2007, respectively, and therefore, did not have a dilutive effect on earnings per share.

In connection with the 2007 convertible senior notes offering, the Company entered into Call Spread Transactions. These transactions included the purchase of call options and the sale of warrants. As a result of the Call Spread Transactions, the conversion price of $46.21 was effectively increased to $60.27. Should the warrant transactions become dilutive to the Company’s earnings per share (i.e. Newmont’s share price exceeds $60.27) the underlying shares will be included in the computation of diluted income per common share.

NOTE 12 COMPREHENSIVE INCOME (LOSS)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Net income		$	645			$	222			$	1,228			$	1,118
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on marketable securities (Note 17)			120				(481	)			312				(77	)
Foreign currency translation adjustments			118				(103	)			207				(120	)
Pension and other benefit liability adjustments			3				1				6				9
Change in fair value of cash flow hedge instruments:
Net change from periodic revaluations			77				(106	)			163				(55	)
Net amount reclassified to income			(5	)			(2	)			19				(10	)
Net unrecognized gain (loss) on derivatives			72				(108	)			182				(65	)
			313				(691	)			707				(253	)
Comprehensive income (loss)		$	958			$	(469	)		$	1,935			$	865
Comprehensive income (loss) attributable to:
Newmont stockholders		$	700			$	(498	)		$	1,444			$	576
Noncontrolling interests			258				29				491				289
		$	958			$	(469	)		$	1,935			$	865

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 CHANGES IN EQUITY

		Nine Months Ended
		September 30,
		2009				2008
Common stock:
At beginning of period		$	709			$	696
Common stock offering			55				—
Stock based compensation			2				2
Shares issued in exchange for exchangeable shares			2				6
At end of period			768				704
Additional paid-in capital:
At beginning of period			6,831				6,916
Common stock offering			1,178				—
Convertible debt issuance			46				—
Common stock dividends			(45	)			(136	)
Stock based compensation			53				71
Shares issued in exchange for exchangeable shares			(3	)			(7	)
At end of period			8,060				6,844
Accumulated other comprehensive income (loss):
At beginning of period			(253	)			957
Other comprehensive income (loss) (Note 12)			707				(253	)
At end of period			454				704
Retained earnings (deficit):
At beginning of period			4				(809	)
Net income attributable to Newmont stockholders			739				827
Common stock dividends			(102	)			—
At end of period			641				18
Noncontrolling interests:
At beginning of period			1,370				1,449
Net income attributable to noncontrolling interests			489				291
Dividends paid to noncontrolling interests			(115	)			(247	)
Other comprehensive income (loss)			2				(2	)
Acquisition of noncontrolling interest in Miramar Mining Corporation			—				(39	)
Acquisition of noncontrolling interest in EGR			—				24
At end of period			1,746				1,476
Total equity		$	11,669			$	9,746

On February 3, 2009, the Company completed a public offering of $518 convertible senior notes, including notes offered to cover over-allotments, maturing on February 15, 2012 for net proceeds of $504 after deducting the underwriters discount and expenses of the offering (see Note 21). Additionally, on February 3, 2009, the Company completed a public offering of 34,500,000 shares of common stock, including shares offered to cover over-allotments, at a price of $37 per share, for net proceeds of $1,233 after deducting the underwriters discount and expenses of the offering.

NOTE 14 ACQUISITIONS

On June 25, 2009, the Company completed the acquisition of the remaining 33.33% interest in Boddington from AngloGold Ashanti Australia Limited (“AngloGold”). The valuation date for the transaction is January 1, 2009, and closing adjustments were made to reflect Newmont’s economic ownership from that date. Consideration for the acquisition consists of $750 less an $8 closing adjustment paid in cash at closing, $240 payable in cash and/or Newmont common stock, at the Company’s option, by December 2009, and a contingent royalty capped at $100, equal to 50% of the average realized operating margin (Revenue less Costs applicable to sales on a by-product basis), if any, exceeding $600 per ounce, payable quarterly on one-third of gold sales from Boddington.

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

The following table summarizes the consideration to acquire the remaining interest in Boddington:

Cash		$	742
Cash and/or common shares			240
Contingent consideration (fair value)			62
		$	1,044

The Company estimates that the fair value of the contingent consideration is approximately $62, and recognized this as part of the purchase price at the acquisition date. Amounts are payable under the contingent royalty beginning in the second quarter of 2010. The range of undiscounted amounts the Company could pay is between $0 and $100. The fair value of the contingent royalty recognized was estimated by applying the income approach. See Note 15 for a description of the key inputs used in deriving fair value.

In connection with the acquisition, Newmont incurred transaction costs of $67 (shown in Note 4, Other expense, net), including Australian stamp duties. $14 of these costs were paid at September 30, 2009. Additionally, in June 2009, Newmont paid $182 to reimburse AngloGold for its share of capital and other project expenditures from January 1, 2009 to June 25, 2009. The reimbursement of capital expenditures is included in Property, plant and mine development, net, and as Additions to property, plant and mine development on the cash flow statement.

The purchase price allocation based on the estimated fair values of assets acquired and liabilities assumed is as follows:

Assets:
Cash		$	1
Property, plant and mine development, net			1,073
Inventories and stockpiles			7
Deferred income tax asset			28
Other assets			11
		$	1,120
Liabilities:
Accrued liabilities		$	33
Reclamation liabilities			15
Deferred income tax liability			28
			76
Net assets acquired		$	1,044

In the first quarter of 2009, La Herradura (of which Newmont owns 44%) purchased a mining property near its Mexico operation for cash consideration of $11 (Newmont’s 44% share).

The pro forma impact of all 2009 acquisitions on Net Income was not material.

In December 2007, the Company purchased approximately 70% of the common shares of Miramar Mining Corporation (“Miramar”), which, in addition to the shares previously owned, brought the Company’s interest in Miramar to approximately 78%. During the first quarter of 2008, the Company completed the acquisition of 100% of Miramar.

NOTE 15 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).

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Continued)
(dollars in millions, except per share, per ounce and per pound amounts)

The following table sets forth the Company’s 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.

		Fair Value at September 30, 2009
		Total				Level 1				Level 2				Level 3
Assets:
Cash equivalents		$	1,733			$	1,733			$	—			$	—
Marketable equity securities			1,029				1,029				—				—
Corporate marketable debt securities			10				10				—				—
Other marketable debt securities:
Asset backed commercial paper			18				—				—				18
Auction rate securities			5				—				—				5
Trade receivable from provisional copper and gold concentrate sales, net			191				191				—				—
Derivative instruments, net			149				—				149				—
		$	3,135			$	2,963			$	149			$	23
Liabilities:
8 5/8% debentures ($100 hedged portion)		$	97			$	—			$	97			$	—
Boddington contingent consideration			62				—				—				62
		$	159			$	—			$	97			$	62