10-K 1 d70495e10vk.htm FORM 10-K e10vk
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
 
     
(Mark One)    
þ
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the Fiscal Year Ended December 31, 2009
or
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the Transition Period From          to
Commission File Number 001-31240
Newmont Mining Corporation
(Exact Name of Registrant as Specified in Its Charter)
 
     
Delaware
(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)
 
Registrant’s telephone number, including area code
(303) 863-7414
Securities registered pursuant to Section 12(b) of the Act:
 
     
Title of Each Class
 
Name of Each Exchange on Which Registered
 
Common Stock, $1.60 par value   New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.  Yes o     No þ
 
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.  Yes þ     No o
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o
 
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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 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 12b-2 of the Exchange Act).  Yes o     No þ
 
At June 30, 2009, the aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant was $20,005,983,973 based on the closing sale price as reported on the New York Stock Exchange. There were 483,029,539 shares of common stock outstanding (and 7,957,841 exchangeable shares exchangeable into Newmont Mining Corporation common stock on a one-for-one basis) on February 17, 2010.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Portions of Registrant’s definitive Proxy Statement submitted to the Registrant’s stockholders in connection with our 2010 Annual Stockholders Meeting to be held on April 23, 2010, are incorporated by reference into Part III of this report.
 


Table of Contents

 
TABLE OF CONTENTS
 
             
        Page
 
  BUSINESS     1  
    Introduction     1  
    Segment Information, Export Sales, etc.      2  
    Products     2  
    Hedging Activities     5  
    Gold Reserves     5  
    Licenses and Concessions     7  
    Condition of Physical Assets and Insurance     7  
    Environmental Matters     8  
    Employees     8  
    Forward-Looking Statements     9  
    Available Information     10  
  RISK FACTORS     10  
  PROPERTIES     22  
    Production Properties     22  
    Other Property        
    Operating Statistics     28  
    Proven and Probable Equity Reserves     30  
  LEGAL PROCEEDINGS     37  
  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS     37  
  EXECUTIVE OFFICERS OF THE REGISTRANT     37  
 
  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES     39  
  SELECTED FINANCIAL DATA     40  
  MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS     41  
    Overview     41  
    Accounting Developments     45  
    Critical Accounting Policies     45  
    Consolidated Financial Results     52  
    Results of Consolidated Operations     62  
    Liquidity and Capital Resources     70  
    Environmental     77  
    Forward Looking Statements     78  
    Non-GAAP Financial Measures     78  
  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     80  
    Metal Price     80  
    Foreign Currency     80  
    Hedging     80  
    Fixed and Variable Rate Debt     84  


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        Page
 
  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA     85  
  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE     175  
  CONTROLS AND PROCEDURES     175  
 
  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT     175  
  EXECUTIVE COMPENSATION     175  
  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS     175  
  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS     176  
  PRINCIPAL ACCOUNTANT FEES AND SERVICES     176  
 
  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES     177  
SIGNATURES     S-1  
EXHIBIT INDEX     E-1  
 EX-10.19
 EX-12.1
 EX-21
 EX-23.1
 EX-24
 EX-31.1
 EX-31.2
 EX-32.1
 EX-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


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This document (including information incorporated herein by reference) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which involve a degree of risk and uncertainty due to various factors affecting Newmont Mining Corporation and our affiliates and subsidiaries. For a discussion of some of these factors, see the discussion in Item 1A, Risk Factors, of this report.
 
PART I
 
ITEM 1.   BUSINESS (dollars in millions except per share, per ounce and per pound amounts)
 
Introduction
 
Newmont Mining Corporation is primarily a gold producer with significant assets or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico. At December 31, 2009, Newmont had proven and probable gold reserves of 91.8 million equity ounces and an aggregate land position of approximately 33,400 square miles (86,500 square kilometers). Newmont is also engaged in the production of copper, principally through its Batu Hijau operation in Indonesia and Boddington operation in Australia. Newmont Mining Corporation’s original predecessor corporation was incorporated in 1921 under the laws of Delaware.
 
Newmont’s corporate headquarters are in Greenwood Village, Colorado, USA. In this report, “Newmont,” the “Company,” “our” and “we” refer to Newmont Mining Corporation and/or our affiliates and subsidiaries.
 
Newmont’s net revenues and long-lived assets are geographically distributed as follows:
 
                                                 
    Revenues     Long-Lived Assets  
    2009     2008     2007     2009     2008     2007  
 
United States
    25 %     32 %     29 %     21 %     26 %     29 %
Peru
    26 %     26 %     20 %     10 %     13 %     13 %
Australia/New Zealand
    16 %     17 %     15 %     33 %     20 %     15 %
Indonesia
    24 %     17 %     29 %     14 %     17 %     17 %
Canada
                      13 %     14 %     16 %
Ghana
    7 %     7 %     6 %     8 %     9 %     9 %
Mexico
    2 %     1 %     1 %     1 %     1 %     1 %
 
In September 2009, the Company completed a two part public offering of $900 and $1,100 senior notes maturing on October 1, 2019 and October 1, 2039, respectively. Net proceeds from the 2019 and 2039 notes were $895 and $1,080, respectively. The 2019 notes pay interest semi-annually at a rate of 5.13% per annum and the 2039 notes pay semi-annual interest of 6.25% per annum.
 
In June 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 was January 1, 2009, and closing adjustments were made to reflect Newmont’s economic ownership from that date. Consideration for the acquisition consisted of $750 less an $8 closing adjustment paid in cash at closing, $240 paid in cash in 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 beginning in the second quarter of 2010. See Item 1A, Risk Factors, Risks Related to Newmont Operations, below.
 
In February 2009, we issued $518 of convertible senior notes, maturing on February 15, 2012. The notes 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. Additionally, on February 3, 2009, we issued 34,500,000 shares of common stock at a price of $37.00, less an


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underwriting discount of $1.17 per share. Net proceeds for the convertible senior notes and common stock offering were $504 and $1,234, respectively.
 
The February and September 2009 offerings were made pursuant to our automatic shelf registration statement on Form S-3. See Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations.
 
Segment Information, Export Sales, etc.
 
Our operating segments include North America, South America, Asia Pacific and Africa. Our North America segment consists primarily of Nevada, La Herradura in Mexico and Hope Bay in Canada. Our South America segment consists primarily of Yanacocha and Conga in Peru. Our Asia Pacific segment consists primarily of Batu Hijau in Indonesia, Boddington in Australia and other smaller operations in Australia/New Zealand. Our Africa segment consists primarily of Ahafo and Akyem in Ghana. See Item 1A, Risk Factors, Risks Related to Newmont Operations, below and Note 31 to the Consolidated Financial Statements for information relating to our operating segments, domestic and export sales, and lack of dependence on a limited number of customers.
 
Products
 
Gold
 
General.  We had consolidated gold sales of 6.5 million ounces (5.3 million equity ounces) in 2009, 6.2 million ounces (5.2 million equity ounces) in 2008 and 6.1 million ounces (5.3 million equity ounces) in 2007. For 2009, 2008 and 2007, 83%, 88% and 78%, respectively, of our net revenues were attributable to gold. Of our 2009 consolidated gold sales, approximately 32% came from North America, 32% from South America, 28% from Asia Pacific and 8% from Africa. References in this report to “equity ounces” or “equity pounds” mean that portion of gold or copper produced, sold or included in proven and probable reserves that is attributable to our ownership or economic interest.
 
Most of our net revenue comes from the sale of refined gold in the international market. The end product at our gold operations, however, is generally doré bars. Doré is an alloy consisting primarily of gold but also containing silver and other metals. Doré is sent to refiners to produce bullion that meets the required market standard of 99.95% gold. Under the terms of our refining agreements, the doré bars are refined for a fee, and our share of the refined gold and the separately-recovered silver are credited to our account or delivered to buyers. Gold sold from Batu Hijau in Indonesia and a portion of the gold from Boddington in Australia, Phoenix in Nevada and Yanacocha in Peru, is contained in a saleable concentrate containing other metals such as copper or silver.
 
Gold Uses.  Gold is generally used for fabrication or investment. Fabricated gold has a variety of end uses, including jewelry, electronics, dentistry, industrial and decorative uses, medals, medallions and official coins. Gold investors buy gold bullion, official coins and jewelry.
 
Gold Supply.  A combination of current mine production and draw-down of existing gold stocks held by governments, financial institutions, industrial organizations and private individuals make up the annual gold supply. Based on public information available for the years 2006 through 2009, on average, current mine production has accounted for approximately 71% of the annual gold supply.


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Gold Price.  The following table presents the annual high, low and average daily afternoon fixing prices for gold over the past ten years on the London Bullion Market ($/ounce).
 
                         
Year
  High     Low     Average  
 
2000
  $ 313     $ 264     $ 279  
2001
  $ 293     $ 256     $ 271  
2002
  $ 349     $ 278     $ 310  
2003
  $ 416     $ 320     $ 363  
2004
  $ 454     $ 375     $ 410  
2005
  $ 536     $ 411     $ 444  
2006
  $ 725     $ 525     $ 604  
2007
  $ 841     $ 608     $ 695  
2008
  $ 1,011     $ 713     $ 872  
2009
  $ 1,213     $ 810     $ 972  
2010 (through February 17, 2010)
  $ 1,153     $ 1,058     $ 1,106  
 
 
Source: Kitco, Reuters and the London Bullion Market Association
 
On February 17, 2010, the afternoon fixing gold price on the London Bullion Market was $1,119 per ounce and the spot market gold price on the New York Commodity Exchange was $1,120 per ounce.
 
We generally sell our gold at the prevailing market price during the month in which the gold is delivered to the customer. We recognize revenue from a sale when the price is determinable, the gold has been delivered, the title has been transferred and collection of the sales price is reasonably assured.
 
Copper
 
General.  We had consolidated copper sales of 507 million pounds (226 million equity pounds) in 2009, 290 million pounds (130 million equity pounds) in 2008 and 428 million pounds (200 million equity pounds) in 2007. For 2009, 2008 and 2007, 17%, 12% and 22%, respectively, of our net revenues were attributable to copper. Copper production at Batu Hijau, in Indonesia, and Boddington, in Australia, is in the form of saleable concentrate that is sold to smelters for further treatment and refining. At December 31, 2009, we had a 35.44% ownership interest but reported a 52.44% economic interest in the Batu Hijau operation in Indonesia, which began production in 1999. Copper production began in 2009 at Boddington.
 
Copper Uses.  Refined copper is incorporated into wire and cable products for use in the construction, electric utility, communications and transportation industries. Copper is also used in industrial equipment and machinery, consumer products and a variety of other electrical and electronic applications and is also used to make brass. Copper substitutes include aluminum, plastics, stainless steel and fiber optics. Refined, or cathode, copper is also an internationally traded commodity.
 
Copper Supply.  A combination of current mine production and recycled scrap material make up the annual copper supply.


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Copper Price.  The copper price is quoted on the London Metal Exchange in terms of dollars per metric ton of high grade copper. The following table presents the dollar per pound equivalent of the annual high, low and average daily prices of high grade copper on the London Metal Exchange over the past ten years ($/pound):
 
                         
Year
  High     Low     Average  
 
2000
  $ 0.91     $ 0.73     $ 0.82  
2001
  $ 0.83     $ 0.60     $ 0.72  
2002
  $ 0.77     $ 0.64     $ 0.71  
2003
  $ 1.05     $ 0.70     $ 0.81  
2004
  $ 1.49     $ 1.06     $ 1.30  
2005
  $ 2.11     $ 1.39     $ 1.67  
2006
  $ 3.99     $ 2.06     $ 3.05  
2007
  $ 3.77     $ 2.37     $ 3.24  
2008
  $ 4.08     $ 1.26     $ 3.15  
2009
  $ 3.33     $ 1.38     $ 2.36  
2010 (through February 17, 2010)
  $ 3.49     $ 2.83     $ 3.23  
 
 
Source: London Metal Exchange
 
On February 17, 2010, the high grade copper closing price on the London Metal Exchange was $3.23 per pound. Our historic ability to sell copper at market prices was limited in some cases by hedging activities, more particularly described in Note 15 to the Consolidated Financial Statements.
 
Gold and Copper Processing Methods
 
Gold is extracted from naturally-oxidized ores by either heap leaching or milling, depending on the amount of gold contained in the ore, the amenability of the ore to treatment and related capital and operating costs. Higher grade oxide ores are generally processed through mills, where the ore is ground into a fine powder and mixed with water in slurry, which then passes through a carbon-in-leach circuit. Lower grade oxide ores are generally processed using heap leaching. Heap leaching consists of stacking crushed or run-of-mine ore on impermeable pads, where a weak cyanide solution is applied to the surface of the heap to dissolve the gold. In both cases, the gold-bearing solution is then collected and pumped to process facilities to remove the gold by collection on carbon or by zinc precipitation.
 
Gold contained in ores that are not naturally oxidized can be directly milled if the gold is amenable to cyanidation, generally known as free milling sulfide ores. Ores that are not amenable to cyanidation, known as refractory ores, require more costly and complex processing techniques than oxide or free milling ore. Higher-grade refractory ores are processed through either roasters or autoclaves. Roasters heat finely ground ore to a high temperature, burn off the carbon and oxidize the sulfide minerals that prevent efficient leaching. Autoclaves use heat, oxygen and pressure to oxidize sulfide ores.
 
Some sulfide ores may be processed through a flotation plant or by bio-milling. In flotation, ore is finely ground, turned into slurry, then placed in a tank known as a flotation cell. Chemicals are added to the slurry causing the gold-containing sulfides to attach to air bubbles and float to the top of the tank. The sulfides are removed from the cell and converted into a concentrate that can then be processed in an autoclave or roaster to recover the gold. Bio-milling incorporates patented technology that involves inoculation of suitable crushed ore on a leach pad with naturally occurring bacteria strains, which oxidize the sulfides over a period of time. The ore is then processed through an oxide mill.
 
At Batu Hijau, ore containing copper and gold is crushed to a coarse size at the mine and then transported from the mine via conveyor to a concentrator, where it is finely ground and then treated by


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successive stages of flotation, resulting in a concentrate containing approximately 30% copper. The concentrate is dewatered and stored for loading onto ships for transport to smelters.
 
At Boddington, ore containing copper and gold is crushed to a coarse size at the mine and then transported via conveyor to a process plant, where it is further crushed and then finely ground as a slurry. The ore is initially treated by flotation which produces a copper/gold concentrate containing approximately 18% copper. Flotation concentrates are processed via a gravity circuit to recover fine liberated gold and then dewatered and stored for loading onto ships for transport to smelters. The flotation tailing has a residual gold content that is recovered in a carbon-in-leach circuit.
 
At Phoenix, a process similar to that followed at Boddington is used to process a concentrate containing approximately 20% copper, which is loaded onto rail cars for transport to the smelter.
 
Hedging Activities
 
Our strategy is to provide shareholders with leverage to changes in the gold and copper prices by selling our gold and copper production at current market prices. Consequently, we do not hedge our gold and copper sales. We continue to manage risks associated with commodity input costs, interest rates and foreign currencies using the derivative market.
 
For additional information, see Hedging in Item 7A, Quantitative and Qualitative Disclosures about Market Risk, and Note 15 to the Consolidated Financial Statements.
 
Gold and Copper Reserves
 
At December 31, 2009 we had 91.8 million equity ounces of proven and probable gold reserves. We added 6.4 million equity ounces to proven and probable reserves, and depleted 6.8 million equity ounces during 2009. We also added 8.2 million equity ounces to proven and probable reserves through acquisitions and divested 1.0 million equity ounces. 2009 reserves were calculated at a gold price assumption of $800, A$1,000 or NZ$1,200 per ounce, respectively. A reconciliation of the changes in proven and probable gold reserves during the past three years follows:
 
                         
    2009     2008     2007  
    (millions of equity ounces)  
 
Opening balance
    85.0       86.5       93.9  
Depletion
    (6.8 )     (6.7 )     (7.3 )
Additions(1)
    6.4       5.2       0.8  
Acquisitions(2)
    8.2              
Other divestments(3)
    (1.0 )           (0.9 )
                         
Closing balance
    91.8       85.0       86.5  
                         
 
 
(1) The impact of the change in gold price assumption on reserve additions was approximately 1.7 million, 1.9 million and 0.7 million equity ounces in 2009, 2008 and 2007, respectively.
 
(2) In June 2009 reserves were increased by 6.7 million equity ounces through the acquisition of the remaining 33.33% interest in Boddington. In December 2009 our economic interest in reserves increased by 1.5 million equity ounces as a result of transactions with a noncontrolling partner at Batu Hijau, which increased our economic interest to 52.44%.
 
(3) In November and December 2009 our ownership in Batu Hijau decreased from 45% to 35.44% as a result of the divestiture required under the Contract of Work. In July 2009 we sold the Kori Kollo operation in Bolivia. In December 2007 we sold the Pajingo operation. In May 2007 our economic interest in Batu Hijau was reduced from 52.88% to 45% when a noncontrolling partner fully repaid a loan from a Newmont subsidiary.


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A reconciliation of the changes in proven and probable gold reserves for 2009 by region is as follows:
 
                                 
    North
    South
    Asia
       
    America     America     Pacific     Africa  
    (millions of equity ounces)  
 
Opening balance
    30.0       13.0       25.0       17.0  
Depletion
    (2.7 )     (1.5 )     (1.9 )     (0.7 )
Additions
    3.0       0.4       2.5       0.5  
Acquisitions(1)
                8.2        
Other divestments(2)
          (0.1 )     (0.9 )      
                                 
Closing balance
    30.3       11.8       32.9       16.8  
                                 
 
 
(1) In June 2009 reserves were increased by 6.7 million equity ounces through the acquisition of the remaining 33.33% interest in Boddington. In December 2009 our economic interest in reserves increased by 1.5 million equity ounces as a result of transactions with a noncontrolling partner at Batu Hijau, which increased our economic interest to 52.44%.
 
(2) In November and December 2009 our ownership in Batu Hijau decreased from 45% to 35.44% as a result of the divestiture required under the Contract of Work. In July 2009 we sold the Kori Kollo operation in Bolivia.
 
At December 31, 2009 we had 9,120 million equity pounds of proven and probable copper reserves. We added 400 million equity pounds to proven and probable reserves and depleted 310 million equity pounds during 2009. We also added 2,040 million equity pounds to proven and probable reserves through acquisitions and divested 790 million equity pounds. 2009 reserves were calculated at a copper price of $2.00 or A$2.40 per pound. A reconciliation of the changes in proven and probable copper reserves during the past three years is as follows:
 
                         
    2009     2008     2007  
    (millions of equity pounds)  
 
Opening balance
    7,780       7,550       7,990  
Depletion
    (310 )     (210 )     (310 )
Additions(1)
    400       440       560  
Acquisitions(2)
    2,040              
Other divestments(3)
    (790 )           (690 )
                         
Closing balance
    9,120       7,780       7,550  
                         
 
 
(1) The impact of the change in copper price assumption on reserve additions was 290 million, 300 million and 1,650 million equity pounds in 2009, 2008 and 2007, respectively.
 
(2) In June 2009 reserves were increased by 640 million equity pounds through the acquisition of the remaining 33.33% interest in Boddington. In December 2009 our economic interest in reserves increased by 1,400 million equity pounds as a result of transactions with a noncontrolling partner at Batu Hijau, which increased our economic interest to 52.44%.
 
(3) In November and December 2009 our ownership in Batu Hijau decreased from 45% to 35.44% as a result of the divestiture required under the Contract of Work. In May 2007 our economic interest in Batu Hijau was reduced from 52.88% to 45% when a noncontrolling partner fully repaid a loan from a Newmont subsidiary.


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A reconciliation of changes in proven and probable copper reserves for 2009 by region is as follows:
 
                         
    North
    South
    Asia
 
    America     America     Pacific  
    (millions of equity pounds)  
 
Opening balance
    890       1,660       5,230  
Depletion
    (50 )           (260 )
Additions
    60             340  
Acquisitions(1)
                2,040  
Other divestments(2)
                (790 )
                         
Closing balance
    900       1,660       6,560  
                         
 
 
(1) In June 2009 reserves were increased by 640 million equity pounds through the acquisition of the remaining 33.33% interest in Boddington. In December 2009 our economic interest in reserves increased by 1,400 million equity pounds as a result of transactions with a noncontrolling partner at Batu Hijau, which increased our economic interest to 52.44%.
 
(2) In November and December 2009 our ownership in Batu Hijau decreased from 45% to 35.44% as a result of the divestiture required under the Contract of Work.
 
Our exploration efforts are directed to the discovery of new mineralized material and converting it into proven and probable reserves. We conduct near-mine exploration around our existing mines and greenfields exploration in other regions globally. Near-mine exploration can result in the discovery of additional deposits, which may receive the economic benefit of existing operating, processing, and administrative infrastructures. In contrast, the discovery of new mineralization through greenfields exploration efforts will likely require capital investment to build a separate, stand-alone operation. We expensed $187 in 2009, $213 in 2008 and $177 in 2007 on Exploration.
 
For additional information, see Item 2, Properties, Proven and Probable Reserves.
 
Licenses and Concessions
 
Other than operating licenses for our mining and processing facilities, there are no third party patents, licenses or franchises material to our business. In many countries, however, we conduct our mining and exploration activities pursuant to concessions granted by, or under contract with, the host government. These countries include, among others, Australia, Canada, Ghana, Indonesia, Mexico, New Zealand and Peru. The concessions and contracts are subject to the political risks associated with foreign operations. See Item 1A, Risk Factors, Risks Related to Newmont, below. For a more detailed description of our Indonesian Contract of Work, see Item 2, Properties, below.
 
Condition of Physical Assets and Insurance
 
Our business is capital intensive and requires ongoing capital investment for the replacement, modernization or expansion of equipment and facilities. For more information, see Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations, Liquidity and Capital Resources, below.
 
We maintain insurance policies against property loss and business interruption and insure against risks that are typical in the operation of our business, in amounts that we believe to be reasonable. Such insurance, however, contains exclusions and limitations on coverage, particularly with respect to environmental liability and political risk. There can be no assurance that claims would be paid under such insurance policies in connection with a particular event. See Item 1A, Risk Factors, Risks Related to Newmont, below.


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Environmental Matters
 
Our United States mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment, including the Clean Air Act; the Clean Water Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Endangered Species Act; the Federal Land Policy and Management Act; the National Environmental Policy Act; the Resource Conservation and Recovery Act; and related state laws. These laws and regulations are continually changing and are generally becoming more restrictive. Our activities outside the United States are also subject to governmental regulations for the protection of the environment.
 
We conduct our operations so as to protect public health and the environment and believe our operations are in compliance with applicable laws and regulations in all material respects. Each operating mine has a reclamation plan in place that meets all applicable legal and regulatory requirements. We have made, and expect to make in the future, expenditures to comply with such laws and regulations. We have made estimates of the amount of such expenditures, but cannot precisely predict the amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements. At December 31, 2009, $698 was accrued for reclamation costs relating to current or recently producing properties.
 
In addition to legal and regulatory compliance, we have developed programs to guide our company toward achieving environmental and sustainable development objectives. Evidencing our management’s commitment towards these objectives, in 2008, we moved our corporate headquarters to an environmentally sustainable, LEED, gold-certified building. We are also committed to managing climate change risks and responsibly reduce our greenhouse gas emissions. We have reported our greenhouse gas emissions annually to the Carbon Disclosure Project since 2004, became a Founding Reporter on The Climate Registry in 2008 and have committed to publicly reporting our independently-verified greenhouse gas emissions in the future. As a result of our efforts, we continue to achieve milestones, such as being the first gold company listed on the Dow Jones Sustainability Index World and receiving International Cyanide Management Code certification at 100% of registered Newmont sites as of the end of 2009.
 
We are also 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. We believe 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 activities required to meet general environmental standards. Based upon our best estimate of our liability for these matters, $161 was accrued at December 31, 2009 for such obligations associated with properties previously owned or operated by us or our subsidiaries. These amounts are included in Other current liabilities and Reclamation and remediation liabilities. Depending upon the ultimate resolution of these matters, which is difficult to predict due to the legal and regulatory uncertainty of the related matters, we believe that it is reasonably possible that the liability for these matters could be as much as 148% greater or 3% lower, than the amount accrued at December 31, 2009. The amounts accrued for these matters are reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are charged to costs and expenses in the period when estimates are revised.
 
For a discussion of the most significant reclamation and remediation activities, see Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations, and Notes 25 and 33 to the Consolidated Financial Statements, below.
 
Employees and Contractors
 
Approximately 14,500 people were employed by Newmont at December 31, 2009. In addition, approximately 15,900 people were working as contractors in support of Newmont’s operations.


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Forward-Looking Statements
 
Certain statements contained in this report (including information incorporated by reference) are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provided for under these sections. Our forward-looking statements include, without limitation:
 
  •  Estimates regarding future earnings;
 
  •  Estimates of future mineral production and sales, for specific operations and on a consolidated or equity basis;
 
  •  Estimates of future costs applicable to sales, other expenses and taxes for specific operations and on a consolidated basis;
 
  •  Estimates of future cash flows;
 
  •  Estimates of future capital expenditures, construction, production or closure activities and other cash needs, for specific operations and on a consolidated basis, and expectations as to the funding or timing thereof;
 
  •  Estimates as to the projected development of certain ore deposits, including the timing of such development, the costs of such development and financing plans for these deposits;
 
  •  Estimates of reserves and statements regarding future exploration results and reserve replacement and the sensitivity of reserves to metal price changes;
 
  •  Statements regarding the availability, terms and costs related to future borrowing, debt repayment and financing;
 
  •  Estimates regarding future exploration expenditures, results and reserves;
 
  •  Statements regarding fluctuations in financial and currency markets;
 
  •  Estimates regarding potential cost savings, productivity, operating performance, and ownership and cost structures;
 
  •  Expectations regarding the completion and timing of acquisitions or divestitures;
 
  •  Expectations regarding the start-up time, design, mine life, production and costs applicable to sales and exploration potential of our projects;
 
  •  Statements regarding modifications to hedge and derivative positions;
 
  •  Statements regarding political, economic or governmental conditions and environments;
 
  •  Statements regarding future transactions;
 
  •  Statements regarding the impacts of changes in the legal and regulatory environment in which we operate;
 
  •  Estimates of future costs and other liabilities for certain environmental matters; and
 
  •  Estimates of pension and other post-retirement costs.
 
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Such risks include, but are not limited to: the price of gold, copper and other commodities; currency fluctuations; geological and metallurgical assumptions; operating performance of equipment, processes and facilities; labor relations; timing of receipt of necessary governmental permits or


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approvals; domestic and foreign laws or regulations, particularly relating to the environment and mining; domestic and international economic and political conditions; our ability to obtain or maintain necessary financing; and other risks and hazards associated with mining operations. More detailed information regarding these factors is included in Item 1, Business, Item 1A, Risk Factors, and elsewhere throughout this report. Given these uncertainties, readers are cautioned not to place undue reliance on our forward-looking statements.
 
All subsequent written and oral forward-looking statements attributable to Newmont or to persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Newmont disclaims any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
 
Available Information
 
Newmont maintains an internet web site at www.newmont.com. Newmont makes available, free of charge, through the Investor Information section of the web site, its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Section 16 filings and all amendments to those reports, as soon as reasonably practicable after such material is electronically filed with the Securities and Exchange Commission. Newmont’s Corporate Governance Guidelines, the charters of key committees of its Board of Directors and its Code of Business Ethics and Conduct are also available on the web site.
 
ITEM 1A.   RISK FACTORS (dollars in millions except per share, per ounce and per pound amounts)
 
Our business activities are subject to significant risks, including those described below. Every investor or potential investor in our securities should carefully consider these risks. If any of the described risks actually occurs, our business, financial condition and results of operations could be materially adversely affected. Such risks are not the only ones we face and additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business.
 
A substantial or extended decline in gold or copper prices would have a material adverse effect on Newmont.
 
Our business is dependent on the price of gold and copper, which are affected by numerous factors beyond our control. Factors tending to influence prices include:
 
  •  gold sales or leasing by governments and central banks or changes in their monetary policy, including gold inventory management and reallocation of reserves;
 
  •  speculative short positions taken by significant investors or traders in gold or copper;
 
  •  the strength of the U.S. dollar;
 
  •  recession or reduced economic activity in the United States and other industrialized or developing countries;
 
  •  decreased industrial, jewelry or investment demand;
 
  •  increased supply from production, disinvestment and scrap;
 
  •  forward sales by producers in hedging or similar transactions; and
 
  •  availability of cheaper substitute materials.
 
Any decline in our realized gold or copper price adversely impacts our revenues, net income and cash flows, particularly in light of our strategy of not engaging in hedging transactions with respect to


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gold or copper. We have recorded asset write-downs in the past and may experience additional write-downs as a result of low gold or copper prices in the future.
 
In addition, sustained lower gold or copper prices can:
 
  •  reduce revenues further through production declines due to cessation of the mining of deposits, or portions of deposits, that have become uneconomic at the then-prevailing gold or copper price;
 
  •  reduce or eliminate the profit that we currently expect from ore stockpiles and ore on leach pads;
 
  •  halt or delay the development of new projects;
 
  •  reduce funds available for exploration with the result that depleted reserves may not be replaced; and
 
  •  reduce existing reserves by removing ores from reserves that can no longer be economically processed at prevailing prices.
 
Also see the discussion in Item 1, Business, Gold or Copper Price.
 
We may be unable to replace gold and copper reserves as they become depleted.
 
Gold and copper producers must continually replace reserves depleted by production to maintain production levels over the long term and provide a return on invested capital. Depleted reserves can be replaced in several ways, including by expanding known ore bodies, by locating new deposits, or by acquiring interests in reserves from third parties. Exploration is highly speculative in nature, involves many risks and frequently is unproductive. Our current or future exploration programs may not result in new mineral producing operations. In addition, for the year 2009, the global exploration budget was reduced significantly as compared to prior years, which may adversely affect the timing and extent of new mineral discoveries and the future replacement of reserves. Even if significant mineralization is discovered, it will likely take many years from the initial phases of exploration until production, during which time the economic feasibility of production may change.
 
We may consider, from time to time, the acquisition of ore reserves related to development properties and operating mines. Such acquisitions are typically based on an analysis of a variety of factors including historical operating results, estimates of and assumptions regarding the extent of ore reserves, the timing of production from such reserves and cash and other operating costs. Other factors that affect our decision to make any such acquisitions may also include our assumptions for future gold prices or other mineral prices and the projected economic returns and evaluations of existing or potential liabilities associated with the property and its operations and projections of how these may change in the future. In addition, in connection with future acquisitions we may rely on data and reports prepared by third parties and which may contain information or data that we are unable to independently verify or confirm. Other than historical operating results, all of these factors are uncertain and may have an impact on our revenue, our cash and other operating issues, as well as contributing to the uncertainties related to the process used to estimate ore reserves. In addition, there may be intense competition for the acquisition of attractive mining properties.
 
As a result of these uncertainties, our exploration programs and any acquisitions which we may pursue may not result in the expansion or replacement of our current production with new ore reserves or operations, which could have a material adverse effect on our business, prospects, results of operations and financial condition.


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Estimates of proven and probable reserves are uncertain and the volume and grade of ore actually recovered may vary from our estimates.
 
Estimates of proven and probable reserves are subject to considerable uncertainty. Such estimates are, to a large extent, based on the price of gold and interpretations of geologic data obtained from drill holes and other exploration techniques. Producers use feasibility studies to derive estimates of capital and operating costs based upon anticipated tonnage and grades of ore to be mined and processed, the predicted configuration of the ore body, expected recovery rates of metals from the ore, the costs of comparable facilities, the costs of operating and processing equipment and other factors. Actual operating costs and economic returns on projects may differ significantly from original estimates. Further, it may take many years from the initial phase of exploration before production and, during that time, the economic feasibility of exploiting a discovery may change.
 
In addition, if the price of gold or copper declines from recent levels, if production costs increase or recovery rates decrease, or if applicable laws and regulations are adversely changed, we can offer no assurance that the indicated level of recovery will be realized or that mineral reserves as currently reported can be mined or processed profitably. If we determine that certain of our ore reserves have become uneconomic, this may ultimately lead to a reduction in our aggregate reported reserves. Consequently, if our actual mineral reserves and resources are less than current estimates, our business, prospects, results of operations and financial condition may be materially impaired.
 
Increased operating costs could affect our profitability.
 
Costs at any particular mining location are subject to variation due to a number of factors, such as changing ore grade, changing metallurgy and revisions to mine plans in response to the physical shape and location of the ore body. In addition, costs are affected by the price of input commodities, such as fuel, electricity, labor, chemical reagents, explosives, steel and concrete. Commodity costs are, at times, subject to volatile price movements, including increases that could make production at certain operations less profitable, and to changes in laws and regulations affecting their price, use and transport. Reported costs may also be affected by changes in accounting standards. A material increase in costs at any significant location could have a significant effect on our profitability and operating cash flow.
 
We could have significant increases in capital and operating costs over the next several years in connection with the development of new projects in challenging jurisdictions and in sustaining existing operations. Costs associated with capital expenditures have escalated on an industry-wide basis over the last several years, as a result of major factors beyond our control, including the prices of oil, steel and other commodities and labor. Increased costs for capital expenditures may have an adverse effect on the profitability of existing mining operations and economic returns anticipated from new mining projects.
 
Estimates relating to new development projects are uncertain and we may incur higher costs and lower economic returns than estimated.
 
Mine development projects typically require a number of years and significant expenditures during the development phase before production is possible. Our decision to develop a project is typically based on the feasibility studies results which estimate the anticipated economic returns of a project. The actual project profitability or economic feasibility may differ from such estimates as a result of any of the following factors, among others:
 
  •  unanticipated changes in tonnage, grades and metallurgical characteristics of ore to be mined and processed;
 
  •  higher than anticipated input commodity and labor costs;
 
  •  the quality of the data on which engineering assumptions were made;
 
  •  unanticipated adverse geotechnical conditions;
 
  •  availability of adequate labor force and supply and cost of water and power;


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  •  fluctuations in inflation and currency exchange rates;
 
  •  availability and terms of financing;
 
  •  delays in obtaining environmental or other government permits or changes in the laws and regulations related to those permits;
 
  •  unanticipated weather or severe climate impacts; and
 
  •  potential delays relating to social and community issues.
 
Our future development activities may not result in the expansion or replacement of current production with new production, or one or more of these new production sites or facilities may be less profitable than currently anticipated or may not be profitable at all, any of which could have a material adverse effect on our results of operations and financial condition.
 
We may experience increased costs or losses resulting from the hazards and uncertainties associated with mining.
 
The exploration for natural resources and the development and production of mining operations are activities that involve a high level of uncertainty. These can be difficult to predict and are often affected by risks and hazards outside of our control. These factors include, but are not limited to:
 
  •  environmental hazards, including discharge of metals, pollutants or hazardous chemicals;
 
  •  industrial accidents including in connection with the operation of mining transportation equipment and accidents associated with the preparation and ignition of large-scale blasting operations;
 
  •  underground fires or floods;
 
  •  encountering unexpected geological formations;
 
  •  unanticipated ground and water conditions;
 
  •  fall-of-ground accidents in underground operations;
 
  •  failure of mining pit slopes and tailings dam walls;
 
  •  seismic activity; and
 
  •  other natural phenomena, such as floods or inclement weather conditions.
 
The occurrence of one or more of these events in connection with our mining operations may result in the death of, or personal injury to, our employees or other personnel, the loss of mining equipment, damage to or destruction of mineral properties or production facilities, monetary losses, deferral or unanticipated fluctuations in production, environmental damage and potential legal liabilities, all of which may adversely affect our business, prospects, results of operations and financial condition.
 
Shortages of critical parts, equipment and skilled labor may adversely affect our operations and development projects.
 
The industry has been impacted by increased demand for critical resources such as input commodities, drilling equipment, tires and skilled labor. These shortages have, at times, caused unanticipated cost increases and delays in delivery times, thereby impacting operating costs, capital expenditures and production schedules.


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Compliance with the extensive and constantly changing environmental laws and regulations affecting mining operations requires ongoing expenditures from us, and actual or alleged non-compliance may subject us to significant penalties or to the revocation of existing or future exploration or mining rights.
 
Our exploration, mining and processing operations are regulated in all countries in which we operate under various federal, state, provincial and local laws relating to the protection of the environment, which generally include air and water quality, protection of protected species, hazardous waste management and reclamation. Compliance with these laws and regulations imposes substantial costs and burdens, and can cause delays in obtaining, or failure to obtain, government permits and approvals which may adversely impact our operations. The regulatory environment in which we operate is constantly changing and may change in ways that would substantially increase costs to achieve compliance, or otherwise could have a material adverse effect on our operations or financial position. Additionally, our operations result in emissions of certain greenhouse gases that may be subject to regulation under legislative and regulatory measures recently enacted or in discussion. Such measures, if implemented, could result in increased costs to us and could adversely affect our business, financial condition or results of operations. For a more detailed discussion of potential environmental liabilities, see the discussion in Environmental Matters, Note 33 to the Consolidated Financial Statements.
 
Mine closure and remediation costs for environmental liabilities may exceed the provisions we have made.
 
Natural resource companies are required to close their operations and rehabilitate the lands that they mine in accordance with a variety of environmental laws and regulations. Estimates of the total ultimate closure and rehabilitation costs for gold and copper mining operations are significant and based principally on current legal and regulatory requirements and mine closure plans that may change materially. Any underestimated or unanticipated rehabilitation costs could materially affect our asset values, earnings and cash flows. Environmental liabilities are accrued when they become known, probable and can be reasonably estimated. Whenever a previously unrecognized remediation liability becomes known, or a previously estimated reclamation cost is increased, the amount of that liability and additional cost will be recorded at that time and could materially reduce our consolidated net income in the related period. In addition, regulators are increasingly requesting security in the form of cash collateral, credit, or trust arrangements or guarantees to secure the performance of environmental obligations, which could have an adverse effect on our financial condition.
 
We have conducted extensive remediation work at two inactive sites in the United States. We are conducting mill remediation activities at a third site in the United States, an inactive uranium mine and mill formerly operated by a subsidiary of Newmont, but remediation at the mine is subject to dispute. In late 2008, the EPA issued an order regarding water management at the mine. The environmental standards that may ultimately be imposed at this site remain uncertain and a risk exists that the costs of remediation may exceed the financial accruals that have been made for such remediation by a material amount. For a more detailed discussion of potential environmental liabilities, see the discussion in Environmental Matters, Note 33 to the Consolidated Financial Statements.
 
Regulations and pending legislation governing issues involving climate change could result in increased operating costs which could have a material adverse effect on our business.
 
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to the potential impacts of climate change. The December 1997 Kyoto Protocol, which ends in 2012, established a set of greenhouse gas emission targets for developed countries that have ratified the Protocol, which include Ghana, Australia and Peru. The Conference of Parties 15 (“COP15”) of the United Nations Framework Convention on Climate Change held in Copenhagen, Denmark in December 2009 was to determine the path forward after the Kyoto Protocol ends. COP15 resulted in the Copenhagen Accord (the “Accord”), a non-binding document calling for economy-wide


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emissions targets for 2020. Prior to the January 31, 2010 deadline, the United States, Australia, New Zealand and Indonesia, Ghana and Peru re-affirmed their commitment to the Accord. The U.S. Congress and several U.S. states have initiated legislation regarding climate change that will affect energy prices and demand for carbon intensive products. In December 2009, the U.S. Environmental Protection Agency issued an endangerment finding under the U.S. Clean Air Act that current and projected concentrations of certain mixed greenhouse gases, including carbon dioxide, in the atmosphere threaten the public health and welfare. It is possible that proposed regulation may be promulgated in the U.S. to address the concerns raised by such endangerment finding. Additionally, the Australian Government may potentially reintroduce a national emissions trading scheme and mandatory renewable energy targets. Legislation and increased regulation regarding climate change could impose significant costs on us, our venture partners and our suppliers, including increased energy, capital equipment, environmental monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations. Until the timing, scope and extent of any future regulation becomes known, we cannot predict the effect on our financial condition, operating performance and ability to compete. Furthermore, even without such regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may adversely impact the cost, production and financial performance of our operations.
 
Our operations, particularly those outside North America and Australia/New Zealand, are subject to risks of doing business.
 
Exploration, development, production and mine closure activities, particularly those outside of North America and Australia/New Zealand, potentially are subject to political and economic risks, including:
 
  •  disadvantages of competing against companies from countries that are not subject to U.S. laws and regulations, including the Foreign Corrupt Practices Act;
 
  •  changes in laws or regulations;
 
  •  royalty and tax increases or claims by governmental entities, including retroactive increases and claims and requests to renegotiate terms of existing royalties and taxes;
 
  •  delays in obtaining or the inability to obtain or maintain necessary governmental permits;
 
  •  expropriation or nationalization of property;
 
  •  currency fluctuations, particularly in countries with high inflation;
 
  •  foreign exchange controls;
 
  •  restrictions on the ability of local operating companies to sell gold offshore for U.S. dollars, or on the ability of such companies to hold U.S. dollars or other foreign currencies in offshore bank accounts;
 
  •  import and export regulations, including restrictions on the export of gold;
 
  •  restrictions on the ability to pay dividends offshore or to otherwise repatriate funds;
 
  •  risk of loss due to civil strife, acts of war, guerrilla activities, insurrection and terrorism;
 
  •  risk of loss due to disease and other potential endemic health issues; and
 
  •  other risks arising out of foreign sovereignty over the areas in which our operations are conducted, including risks inherent in contracts with government owned entities such as unilateral cancellation or renegotiation of contracts, licenses or other mining rights.


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Consequently, our exploration, development and production activities, particularly those outside of North America and Australia/New Zealand, may be affected by these and other factors, many of which are beyond our control, some of which could materially adversely affect our financial position or results of operations. Furthermore, if a dispute arises from such activities, we may be subject to the exclusive jurisdiction of courts outside North America or Australia/New Zealand, which could adversely affect the outcome of a dispute.
 
Our Batu Hijau operation in Indonesia is subject to political and economic risks.
 
We have a substantial investment in Indonesia, a nation that since 1997 has undergone financial crises and devaluation of its currency, outbreaks of political and religious violence and acts of terrorism, changes in national leadership, and the secession of East Timor, one of its former provinces. These factors heighten the risk of abrupt changes in the national policy toward foreign investors, which in turn could result in unilateral modification of concessions or contracts, increased taxation, denial of permits or permit renewals or expropriation of assets. Subsequent to the commencement of operations, the government designated the land surrounding Batu Hijau as a protection forest, which could make operating permits more difficult to obtain. We have been in discussions with the Indonesian government to obtain an additional forest use permit necessary to make certain amendments to the Batu Hijau environmental management plan and environmental monitoring plan, including modifications with respect to the mine’s pit slope stability. This permit is a key requirement to continue to operate Batu Hijau efficiently and to the ultimate life of the mine and recoverability of reserves. However, the permit has not been received as of the date of this Annual Report. No assurances can be made regarding when or whether the permit and any related plan amendments will be approved. The resulting delay may adversely impact the Batu Hijau mine plan, and may adversely impact future operating and financial results, including deferment or cancellation of future development and operations.
 
Presidential and parliamentary elections recently took place, and although the president was re-elected, new ministers or members of parliament may have different (and potentially more negative) views relating to mining in general, a preference for national mining companies to own such countries mineral assets, or relative to our assets and operations.
 
Violence committed by radical elements in Indonesia and other countries, and the presence of U.S. forces in Iraq and Afghanistan, may increase the risk that operations owned by U.S. companies will be the target of violence. If our Batu Hijau operation were so targeted it could have an adverse effect on our business.
 
Our ownership interest in PT Newmont Nusa Tenggara (“PTNNT”) in Indonesia has been reduced in accordance with the Contract of Work issued by the Indonesian Government. The Contract of Work has been and may continue to be the subject of dispute, and future reductions in our interest in PTNNT may result in our loss of control over the Batu Hijau operations. Moreover the Contract of Work is subject to termination if we do not comply with our obligations, and loss of the Contract of Work would result in loss of all or much of the value of Batu Hijau.
 
We operate Batu Hijau and currently have a 35.44% ownership interest, held through the Nusa Tenggara Partnership (“NTP”) with an affiliate of Sumitomo Corporation of Japan. We have a 56.25% interest in NTP and a Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 63% of PTNNT, the Indonesian subsidiary that owns Batu Hijau. In December 2009, the Company entered into a transaction with P.T. Pukuafu Indah (“PTPI”), an unrelated noncontrolling partner of PTNNT, whereby we agreed to advance certain funds to PTPI in exchange for a pledge of the noncontrolling partner’s 20% share of PTNNT dividends, net of withholding tax, and the assignment of its voting rights to the Company. As a result, PTPI was determined to be a Variable Interest Entity (“VIE”) as it has minimal equity capital and the voting rights to its 20% interest in PTNNT reside with Newmont. Based on the above transaction, the Company recognized an additional 17% effective economic interest in PTNNT. Combined with the Company’s 56.25% ownership in NTP, Newmont has a 52.44% effective economic interest in PTNNT and continues to consolidate Batu Hijau in its Consolidated Financial Statements. The remaining 17% in PTNNT is owned by PT Multi Daerah Bersaing


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(“PTMDB”), a consortium comprised of Indonesian regional and local governments, and PT Multicapital, an unrelated Indonesian company.
 
Under the Contract of Work executed in 1986 between the Indonesian government and PTNNT, beginning in 2006 and continuing through 2010, a portion of PTNNT’s shares must be offered for sale, first, to the Indonesian government or, second, to Indonesian nationals, such portion 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. The price at which such interest must 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 Jakarta Stock Exchange, or the fair market value of such interest as a going concern, as agreed with the Indonesian government. Pursuant to this provision, the ownership interest in the Batu Hijau mine’s proven and probable equity reserves may be reduced in the future to as low as 27.56% and ownership interest of NTP in PTNNT could be reduced to 49%, thus reducing our ability to control the operation at Batu Hijau. In addition to affecting our level of control over operations over PTNNT, such loss of control may cause us to deconsolidate PTNNT for accounting purposes, which would reduce our reported consolidated sales, cost applicable to sales, amortization, total assets and operating cash flow attributable to PTNNT. See Note 32 to the Consolidated Financial Statements.
 
PTPI has owned and continues to own a 20% interest in PTNNT, and therefore NTP was required to offer a 3% interest in the shares of PTNNT for sale in 2006 and an additional 7% interest in each of 2007, 2008 and 2009. In accordance with the Contract of Work, an offer to sell a 3% interest was made to the Indonesia government in 2006 and an offer for an additional 7% interest was made in each of 2007, 2008 and 2009. Following notifications from the Department of Energy and Mineral Resources (the “DEMR”) alleging that PTNNT was in breach of its divestiture requirements under the Contract of Work and threatening to issue a notice to terminate the Contract of Work if PTNNT did not agree to divest the 2006, 2007, and 2008 shares in accordance with the direction of the DEMR, the matter was submitted to an international arbitration panel. That panel ruled in March 2009 that the 2006, 2007 and 2008 shares were required to be transferred by the end of September 2009, a deadline that was extended until November 23, 2009 by agreement between PTNNT and the Indonesian Government. In July 2009, the Company reached agreement with the Indonesian government on the price of the 2008 7% interest and the 2009 7% interest and reoffered the 2008 7% interest and the 2009 7% interest to the Indonesian government at this newly agreed price. In November and December 2009, sales agreements were concluded pursuant to which the 2006, 2007, and 2008 shares were transferred to PTMDB and 2009 shares were committed to be transferred to PTMDB. Although the Indonesian government has acknowledged that PTNNT is no longer in breach of the Contract of Work, future disputes may arise as to the further divestiture of the shares. It is uncertain who will acquire any future divestiture shares, and the nature of our relations with the new owners of the 2006 through 2009 shares and any future divestiture shares remain uncertain.
 
As part of the negotiation of the sale agreements with PTMDB, the parties executed an operating agreement under which each recognizes the right of NTP to operate Batu Hijau and binds the parties to adhere to NTP’s standards for safety, environmental stewardship and community responsibility. The operating agreement becomes effective upon the completion of the sale of the 2009 shares and continues for so long as NTP owns more shares of PTNNT than PTMDB. If the operating agreement terminates, then we will likely lose effective control over the operations of 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 NTP. Moreover, there have been statements from time to time by some within the Indonesian government who advocate elimination of Contracts of Work and who may try to instigate future disputes surrounding the Contract of Work, particularly given that Batu Hijau is one of the largest businesses within the country. Although any dispute under the Contract of Work is subject to international arbitration, there can be no assurance that we would prevail in any such dispute and any termination of the Contract of Work could result in substantial diminution in the value of our interests in PTNNT.


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Our Company and the mining industry are facing continued geotechnical challenges, which could adversely impact our production and profitability.
 
Newmont and the mining industry are facing continued geotechnical challenges due to a trend toward mining deeper pits and more complex deposits. This leads to higher pit walls, more complex underground environments and increased exposure to geotechnical instability. As our operations are maturing, the open pits at many of our sites are getting deeper and we have experienced certain geotechnical failures at some of our mines, including, without limitation, in Indonesia at the Batu Hijau open-pit mine. In September 2009, our affiliate, PTNNT, experienced a geotechnical failure of a portion of the west wall. Batu Hijau utilizes an advanced monitoring system that measures movement in the pit walls. As a result, no personnel were in the pit at the time of the failure and no injuries occurred. However, operations were temporarily suspended in order to engage in geotechnical review. Following the completion of remediation work, mining operations resumed at such location again in October 2009. Subsequently, in January 2010, a failure also occurred on a portion of the southeast wall causing a slide, which regrettably resulted in a fatality of one of the mine employees. Operations were temporarily suspended to conduct investigations and operations have since recommenced.
 
No absolute assurances can be given that unanticipated adverse geotechnical conditions, such a landslides and pit wall failures, will not occur in the future or that such events will be detected in advance. Geotechnical instabilities can be difficult to predict and are often affected by risks and hazards outside of our control, such as severe weather and considerable rainfall, which may lead to periodic floods, mudslides and wall instability, and seismic activity, which may result in slippage of material or mud/topsoil slides.
 
Geotechnical failures could result in limited or restricted access to mine sites, suspension of operations, government investigations, increased monitoring costs, remediation costs, loss of ore and other impacts, which could cause one or more of our projects to be less profitable than currently anticipated and could result in a material adverse effect on our results of operations and financial condition.
 
Our operations in Peru are subject to political risks.
 
During the last several years, Yanacocha, in which we own a 51.35% interest, has been the target of numerous local political protests, including ones that blocked the road between the Yanacocha mine complex and the City of Cajamarca in Peru. In 2004, local opposition to the Cerro Quilish project (which is located adjacent to Yanacocha) became so pronounced that Yanacocha decided to relinquish its drilling permit for Cerro Quilish and the deposit was reclassified from proven and probable reserves to non-reserve mineralization. In 2006 a road blockade was carried out by members of the Combayo community. This blockade was unrelated to Cerro Quilish and resulted in a brief cessation of mining activities. We cannot predict whether similar or more significant incidents will occur and the recurrence of significant community opposition or protests could adversely affect Yanacocha’s assets and operations. In 2007, 2008, 2009 and thus far in 2010, no material roadblocks or protests occurred involving Yanacocha.
 
In December 2006, Yanacocha, along with other mining companies in Peru, entered into a five-year agreement with the central government to contribute 3.75% of net profits to fund social development projects. Although the current government has generally taken positions promoting private investment, we cannot predict future government positions on foreign investment, mining concessions, land tenure, environmental regulation or taxation. National elections are scheduled in April 2011 and a change in government positions on these issues could adversely affect Yanacocha’s assets and operations, which could have a material adverse effect on our consolidated financial position and results of operations.
 
Our success depends on our social and environmental performance.
 
Our ability to operate successfully in communities around the world will likely depend on our ability to develop, operate and close mines in a manner that is consistent with the health and safety of our employees, the protection of the environment, and the creation of long-term economic and social opportunities in the communities in which we operate. We have implemented a management system


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designed to promote continuous improvement in health and safety, environmental performance and community relations. However, our ability to operate, and thus, our results of operations and our financial condition, could be adversely affected by accidents or events detrimental (or perceived to be detrimental) to the health and safety of our employees, the environment or the communities in which we operate.
 
Remediation costs for environmental liabilities may exceed the provisions we have made.
 
We have conducted extensive remediation work at two inactive sites in the United States. We are conducting mill remediation activities at a third site in the United States, an inactive uranium mine and mill formerly operated by a subsidiary of Newmont, but remediation at the mine is subject to dispute. In late 2008 the EPA issued an order regarding water management at the mine. The environmental standards that may ultimately be imposed at this site remain uncertain and a risk exists that the costs of remediation may exceed the financial accruals that have been made for such remediation by a material amount. For a more detailed discussion of potential environmental liabilities, see the discussion in Environmental Matters, Note 33 to the Consolidated Financial Statements.
 
Whenever a previously unrecognized remediation liability becomes known, or a previously estimated reclamation cost is increased, the amount of that liability and additional cost will be recorded at that time and could materially reduce net income in that period.
 
Currency fluctuations may affect our costs.
 
Currency fluctuations may affect the costs that we incur at our operations. Gold and copper is sold throughout the world based principally on the U.S. dollar price, but a portion of our operating expenses are incurred in local currencies. The appreciation of those local currencies against the U.S. dollar increases our costs of production in U.S. dollar terms at mines located outside the United States.
 
The foreign currency that primarily impacts our results of operations is the Australian dollar. We estimate that every $0.10 increase in U.S. dollar/Australian dollar exchange rate increases annually the U.S. dollar Costs applicable to sales by approximately $40 for each ounce of gold produced from operations in Australia before taking into account the impact of currency hedging. From December 31, 2008 to December 31, 2009, the Australian dollar appreciated by approximately $0.21 per U.S. dollar, or approximately 30%. In mid-2007, we implemented derivative programs to hedge up to 85% of our future forecasted Australian dollar denominated operating and capital expenditures to reduce the variability in our Australian dollar denominated expenditures. At December 31, 2009 we have hedged 60%, 37% and 13% of our forecasted Australian denominated operating costs in 2010, 2011 and 2012, respectively. Our Australian dollar derivative programs will limit the benefit to the Company of future decreases if any, in the US dollar/Australian dollar exchange rates. For additional information, see Item 7, Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations, Results of Consolidated Operations, Foreign Currency Exchange Rates, below. For a more detailed description of how currency exchange rates may affect costs, see discussion in Foreign Currency in Item 7A, Quantitative and Qualitative Discussions About Market Risk.
 
Our business requires substantial capital investment and we may be unable to raise additional funding on favorable terms.
 
The construction and operation of potential future projects including the Akyem project in Ghana, the Conga project in Peru, the Hope Bay project in Nunavut, Canada, and various exploration projects will require significant funding. Our operating cash flow and other sources of funding may become insufficient to meet all of these requirements, depending on the timing and costs of development of these and other projects. As a result, new sources of capital may be needed to meet the funding requirements of these investments, fund our ongoing business activities and pay dividends. Our ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, future gold and copper prices, our operational performance and our current cash flow and debt position, among other factors. In the event of lower gold and copper prices, unanticipated operating or financial challenges, or a further dislocation in the financial markets as experienced in recent years, our ability to pursue new business opportunities, invest in existing and new projects, fund our ongoing operations, retire or service all outstanding debt and pay dividends could be significantly constrained.


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Any downgrade in the credit ratings assigned to our debt securities could increase our future borrowing costs and adversely affect the availability of new financing.
 
At December 31, 2009 Standard & Poor’s Rating Services rated Newmont Mining Corporation BBB+, with a stable outlook, and Moody’s Investors Service rated Newmont Mining Corporation Baa2 with a stable outlook. There can be no assurance that any rating assigned will remain for any given period of time or that a rating will not be lowered if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, so warrant. If we are unable to maintain our outstanding debt and financial ratios at levels acceptable to the credit rating agencies, or should our business prospects deteriorate, our ratings could be downgraded by the rating agencies, which could adversely affect the value of our outstanding securities, our existing debt and our ability to obtain new financing on favorable terms, if at all, and increase our borrowing costs, which in turn could impair our results of operations and financial condition. See also “Future Funding Requirements may Affect our Business” and “Current Global Financial Conditions could Adversely Affect the Availability of New Financing and our Operations.”
 
To the extent that we seek to expand our operations and increase our reserves through acquisitions, we may experience issues in executing acquisitions or integrating acquired operations.
 
From time to time, we may examine opportunities to make selective acquisitions in order to expand our operations and reported reserves. The success of any acquisition would depend on a number of factors, including, but not limited to:
 
  •  identifying suitable candidates for acquisition and negotiating acceptable terms for any such acquisition;
 
  •  obtaining approval from regulatory authorities and potentially the Company’s shareholders;
 
  •  maintaining our financial and strategic focus and avoiding distraction of management during the process of integrating the acquired business;
 
  •  implementing our standards, controls, procedures and policies at the acquired business; and
 
  •  to the extent the acquired operations are in a country in which we have not operated historically, understanding the regulations and challenges of operating in that new jurisdiction.
 
There can be no assurance that we will be able to conclude any acquisitions successfully, or that any acquisition will achieve the anticipated synergies or other positive results. Any material problems that we encounter in connection with such an acquisition could have a material adverse effect on our business, operating results and financial condition.
 
Our operations may be adversely affected by power shortages.
 
We have periodically experienced power shortages in Ghana resulting primarily from drought, increasing demands for electricity and insufficient hydroelectric or other generating capacity which caused curtailment of production at our Ahafo operations. As a result of the mining industry’s initiative to construct and install an 80 mega-watt power plant during 2007, the Ghanaian government has agreed, if required, to curtail power consumption as a result of power shortages and to distribute available power proportionately between participating mines and other industrial and commercial users. Alternative sources of power may result in higher than anticipated costs, which will affect operating costs. Continued power shortages and increased costs may adversely affect our results of operations and financial condition.


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Occurrence of events for which we are not insured may affect our cash flow and overall profitability.
 
We maintain insurance policies that mitigate against certain risks related to our operations. This insurance is maintained in amounts that we believe are reasonable depending upon the circumstances surrounding each identified risk. However, we may elect not to have insurance for certain risks because of the high premiums associated with insuring those risks or for various other reasons; in other cases, insurance may not be available for certain risks. Some concern always exists with respect to investments in parts of the world where civil unrest, war, nationalist movements, political violence or economic crises are possible. These countries may also pose heightened risks of expropriation of assets, business interruption, increased taxation or unilateral modification of concessions and contracts. We do not maintain insurance policies against political risk. Occurrence of events for which we are not insured may affect our results of operations and financial position.
 
Our business depends on good relations with our employees.
 
Due to union activities or other employee actions, we could experience labor disputes, work stoppages or other disruptions in production that could adversely affect us. At December 31, 2009 union represented employees constituted approximately 54% of our worldwide work force. Currently, there are labor agreements in effect for all of these workers. The labor agreement for Yanacocha expires on February 28, 2010 and is currently being re-negotiated. There can be no assurance that any future disputes will be resolved without disruptions to operations.
 
Title to some of our properties may be defective or challenged.
 
Although we have conducted title reviews of our properties, title review does not necessarily preclude third parties from challenging our title or related property rights. While we believe that we have satisfactory title to our properties, some risk exists that some titles may be defective or subject to challenge. In addition, certain of our Australian properties could be subject to native title or traditional landowner claims, but such claims would not deprive us of the properties. For information regarding native title or traditional landowner claims, see the discussion under the Australia/New Zealand section of Item 2, Properties, below.
 
Competition from other mining companies may harm our business.
 
We compete with other mining companies to attract and retain key executives, skilled labor, contractors and other employees. We compete with other mining companies for the services of skilled personnel and contractors and for specialized equipment, components and supplies, such as drill rigs, necessary for exploration and development. We also compete with other mining companies for rights to mine properties containing gold and other minerals. We may be unable to continue to attract and retain skilled and experienced employees, to obtain the services of skilled personnel and contractors or specialized equipment or supplies, or to acquire additional rights to mine properties.
 
Our ability to recognize the benefits of deferred tax assets is dependent on future cash flows and taxable income.
 
We recognize the expected future tax benefit from deferred tax assets when the tax benefit is considered to be more likely than not of being realized, otherwise, a valuation allowance is applied against deferred tax assets. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize the deferred tax assets could be impacted. Additionally, future changes in tax laws could limit our ability to obtain the future tax benefits represented by our deferred tax assets. At December 31, 2009 the Company’s current and long-term deferred tax assets were $215 and $937, respectively.


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Returns for investments in pension plans are uncertain.
 
We maintain pension plans for certain employees which provide for specified payments after retirement. The ability of the pension plans to provide the specified benefits depends on our funding of the plans and returns on investments made by the plans. Returns, if any, on investments are subject to fluctuations based on investment choices and market conditions. A sustained period of low returns or losses on investments could require us to fund the pension plans to a greater extent than anticipated. During the second half of 2008 and early 2009, the value of the investments in our pension plans decreased significantly. While the plans have sufficient assets to meet benefit payments in the near term, the plans are underfunded for purposes of long-term sustainable payout to all employees. During the later part of 2009, the value of the investments in our pension plans improved, but not to the mid-2008 levels. If the plan investment values do not recover sufficiently, we may be required to increase the amount of future cash contributions. For a more detailed discussion of the funding status and expected benefit payments to plan participants, see the discussion in Employee-Related Benefits, Note 22 to the Consolidated Financial Statements.
 
ITEM 2.   PROPERTIES (dollars in millions except per share, per ounce and per pound amounts)
 
(MAP)
 
Production and Development Properties
 
Newmont’s significant production properties are described below. Operating statistics for each operation are presented in a table in the next section of Item 2.
 
North America
 
Nevada, USA.  We have been mining gold in Nevada since 1965. Nevada operations include Carlin, located west of the city of Elko on the geologic feature known as the Carlin Trend, the Phoenix mine, located 10 miles south of Battle Mountain, the Twin Creeks mine, located approximately 15 miles north of Golconda, and the Midas mine near the town of the same name. We also participate in the Turquoise Ridge joint venture with a subsidiary of Barrick Gold Corporation (“Barrick”), which utilizes mill capacity at Twin Creeks.


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Gold sales from Nevada totaled approximately 2.0 million ounces for 2009 with ore mined from eight open pit and six underground mines. At December 31, 2009 we reported 28.5 million equity ounces of gold reserves in Nevada, with 84% of those ounces in open pit mines and 16% in underground mines. We are pursuing several development opportunities in Nevada with significant reserve expansion potential.
 
The Nevada operations produce gold from a variety of ore types requiring different processing techniques depending on economic and metallurgical characteristics. To ensure the best use of processing capacity, we use a linear programming model to guide the flow of both mining sequence selection and routing of ore streams to various plants. Refractory ores, which require more complex, higher cost processing methods, generated 77% of Nevada’s gold production in 2009, compared with 72% in 2008, and 75% in 2007. With respect to remaining reserves, we estimate that approximately 82% are refractory ores and 18% are oxide ores. Higher-grade oxide ores are processed by conventional milling and cyanide leaching at Carlin (Mill 5) and Twin Creeks (Juniper). Lower-grade material with suitable cyanide solubility is treated on heap leach pads at Carlin and Twin Creeks. Higher-grade refractory ores are processed through either a roaster at Carlin (Mill 6) or autoclaves at Twin Creeks (Sage). Lower-grade refractory ores are processed at Carlin by either bio-oxidation/flotation or direct flotation at Mill 5. Mill 5 flotation concentrates are then processed at the Carlin roaster or the Twin Creeks autoclaves and additional gold is recovered from the flotation tails by cyanide leaching. The Phoenix mill produces a gravity gold concentrate and a copper/gold flotation concentrate and recovers additional gold from cyanide leaching of the flotation tails. Ore from the Midas mine is processed by conventional milling and Merrill-Crowe zinc precipitation. Activated carbon from the various leaching circuits is treated to produce gold ore at the Carlin or Twin Creeks refineries. Zinc precipitate at Midas is refined on-site.
 
We own, or control through long-term mining leases and unpatented mining claims, all of the minerals and surface area within the boundaries of the present Nevada mining operations (except for the Turquoise Ridge joint venture described below). The long-term leases extend for at least the anticipated mine life of those deposits. With respect to a significant portion of the Gold Quarry mine at Carlin, we own a 10% undivided interest in the mineral rights and lease the remaining 90%, on which we pay a royalty equivalent to 18% of the mineral production. We wholly-own or control the remainder of the Gold Quarry mineral rights, in some cases subject to additional royalties. With respect to certain smaller deposits in Nevada, we are obligated to pay royalties on production to third parties that vary from 1% to 8% of production.
 
We have a 25% interest in a joint venture with Barrick in the Turquoise Ridge mine. Newmont has an agreement to provide up to 2,000 tons per day of milling capacity at Twin Creeks to the joint venture. Barrick is the operator of the joint venture. Gold sales of 39,000 ounces in 2009, 50,100 ounces in 2008 and 62,800 ounces in 2007 were attributable to Newmont, based on our 25% ownership interest.
 
We have ore sale agreements with Barrick and Yukon-Nevada Gold Corporation (“Yukon-Nevada”) to process the Company’s ore. We recognized attributable gold sales, net of treatment charges, of 700 ounces in 2009, 8,000 ounces in 2008 and 58,600 ounces in 2007, pursuant to these agreements. During 2008, Yukon-Nevada discontinued operations; however, during the second half of 2009, they resumed operations on a limited basis.
 
We have sales and refining agreements with Gerald Metals, Peñoles, Johnson Matthey, Just Refiners and Glencore to process intermediate gold bearing product.
 
Mexico.  We have a 44% interest in La Herradura, which is located in Mexico’s Sonora desert. La Herradura is operated by Fresnillo PLC (which owns the remaining 56% interest) and comprises open pit operations with run-of-mine heap leach processing. La Herradura sold 112,500 ounces of gold attributable to Newmont in 2009 and at December 31, 2009 we reported 1.8 million equity ounces of gold reserves at La Herradura. La Herradura is currently developing two new deposits, Soledad and Dipolos, for production scheduled to begin in 2010.
 
Hope Bay, Canada.  We own 100% of the Hope Bay project, a large undeveloped gold project in the Nunavut Territory of Canada. Since acquiring this property in early 2008, we have made significant


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infrastructure improvements and identified an additional 45 new drilling targets. The Company is currently evaluating an underground operation to advance production.
 
South America
 
Yanacocha, Peru.  The properties of Minera Yanacocha S.R.L. (“Yanacocha”) are located approximately 375 miles (604 kilometers) north of Lima and 30 miles (48 kilometers) north of the city of Cajamarca, in Peru. Yanacocha began production in 1993. We hold a 51.35% interest in Yanacocha with the remaining interests held by Compañia de Minas Buenaventura, S.A.A. (“Buenaventura”) (43.65%) and the International Finance Corporation (5%).
 
Yanacocha has mining rights with respect to a large land position consisting of concessions granted by the Peruvian government to Yanacocha and a related entity. These mining concessions provide for both the right to explore and exploit. However, Yanacocha must first obtain the respective exploration and exploitation permits, which are generally granted in due course. Yanacocha may retain mining concessions indefinitely by paying annual fees and, during exploitation, complying with production obligations or paying assessed fines. Mining concessions are freely assignable or transferable.
 
Yanacocha currently has three active open pit mines, Cerro Yanacocha, La Quinua and Chaquicocha. Reclamation and/or backfilling activities at Carachugo, San José and Maqui Maqui are currently underway. Yanacocha has four leach pads, three processing facilities, and one mill, which began commercial production in the second quarter of 2008. Yanacocha’s gold sales for 2009 totaled 2.1 million ounces (1.1 million equity ounces) and at December 31, 2009 we reported 5.4 million equity ounces of gold reserves at Yanacocha.
 
Yanacocha, along with other mining companies in Peru, agreed with the central government in December 2006 to contribute 3.75% of its net profits to fund social development projects for a period of up to five years, contingent upon metal prices remaining high.
 
Conga, Peru.  The Conga project (51.35% owned) is located within close proximity of existing operations at Yanacocha. Feasibility studies on our preferred development option were completed in late 2009 and a construction decision is expected in the fourth quarter of 2010 assuming government approval. The project is progressing into the development stage with production expected in late 2014 to 2015. At December 31, 2009 we reported 6.1 million equity ounces of gold reserves and 1,660 million equity pounds of copper reserves at Conga.
 
Asia Pacific
 
Australia/New Zealand.  In Australia, mineral exploration and mining titles are granted by the individual states or territories. Mineral titles may also be subject to native title legislation or, in the Northern Territory, to Aboriginal freehold title legislation that entitles indigenous persons to compensation calculated by reference to the gross value of production. In 1992, the High Court of Australia held that Aboriginal people who have maintained a continuing connection with their land according to their traditions and customs may hold certain rights in respect of the land (such rights commonly referred to as “native title”). Since the High Court’s decision, Australia has passed legislation providing for the protection of native title and established procedures for Aboriginal people to claim these rights. The fact that native title is claimed with respect to an area, however, does not necessarily mean that native title exists, and disputes may be resolved by the courts.
 
Generally, under native title legislation, all mining titles granted before January 1, 1994 are valid. Titles granted between January 1, 1994 and December 23, 1996, however, may be subject to invalidation if they were not obtained in compliance with applicable legislative procedures, though subsequent legislation has validated some of these titles. After December 23, 1996, mining titles over areas where native title is claimed to exist became subject to legislative processes that generally give native title claimants the “right to negotiate” with the title applicant for compensation and other


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conditions. Native title holders do not have a veto over the granting of mining titles, but if agreement cannot be reached, the matter can be referred to the National Native Title Tribunal for decision.
 
We do not expect that native title claims will have a material adverse effect on any of our operations in Australia. The High Court of Australia determined in an August 2002 decision, which refined and narrowed the scope of native title, that native title does not subsist in minerals in Western Australia and that the rights granted under a mining title would, to the extent inconsistent with asserted native title rights, operate to extinguish those native title rights. Generally, native title is only an issue for Newmont with respect to obtaining new mineral titles or moving from one form of title to another, for example, from an exploration title to a mining title. In these cases, the requirements for negotiation and the possibility of paying compensation may result in delay and increased costs for mining in the affected areas. Similarly, the process of conducting Aboriginal heritage surveys to identify and locate areas or sites of Aboriginal cultural significance can result in additional costs and delay in gaining access to land for exploration and mining-related activities.
 
In Australia, various ad valorem royalties are paid to state and territorial governments, typically based on a percentage of gross revenues and earnings.
 
Boddington.  Boddington (100% owned) is located 81 miles (130 kilometers) southeast of Perth in Western Australia. Boddington has been wholly owned since June 2009 when Newmont acquired the final 33.33% interest from AngloGold Ashanti Australia Limited (“AngloGold”). Boddington poured its first gold on September 30, 2009, commenced commercial production in November 2009 and expects a 12 month ramp-up period to design capacity. Boddington sold 103,300 ounces of gold, including 8,200 incremental start-up ounces, and 9.0 million pounds of copper and at December 31, 2009 we reported 21.0 million equity gold ounces and 2,040 million equity copper pounds of reserves at Boddington.
 
Jundee.  Jundee (100% owned) is situated approximately 435 miles (700 kilometers) northeast of Perth in Western Australia. We mined ore at Jundee solely from underground sources in 2009, with mill feed supplemented from oxide stockpiles for blending purposes. Jundee sold 412,300 ounces of gold in 2009 and at December 31, 2009 we reported 1.2 million equity ounces of gold reserves at Jundee.
 
Kalgoorlie.  Kalgoorlie (50% owned) comprises the Fimiston open pit (commonly referred to as the Super Pit) and Mt. Charlotte underground mine at Kalgoorlie-Boulder, 373 miles (600 kilometers) east of Perth in Western Australia. The mines are managed by Kalgoorlie Consolidated Gold Mines Pty Ltd for the joint venture owners, Newmont and Barrick. The Super Pit is one of Australia’s largest gold mines in terms of gold production and annual mining volume. During 2009, the Kalgoorlie operations sold 335,800 equity ounces of gold and at December 31, 2009 we reported 4.2 million equity ounces of gold reserves at Kalgoorlie.
 
Tanami.  Tanami (100% owned) includes the Granites treatment plant and associated mining operations, which are located in the Northern Territory approximately 342 miles (550 kilometers) northwest of Alice Springs, adjacent to the Tanami highway, and the Dead Bullock Soak mining operations, approximately 25 miles (40 kilometers) west of the Granites. Operations are predominantly focused on the Callie underground mine at Dead Bullock Soak and ore is processed through the Granites treatment plant. During 2009, the Tanami operations sold 290,900 ounces of gold and at December 31, 2009 we reported 1.6 million equity ounces of gold reserves at Tanami.
 
Waihi.  Waihi (100% owned) is located within the town of Waihi, approximately 68 miles (110 kilometers) southeast of Auckland, New Zealand and consists of the Favona underground deposit and the Martha open pit. The Waihi operation sold 118,200 ounces of gold in 2009 and at December 31, 2009 we reported 0.4 million equity ounces of gold reserves at Waihi.
 
Batu Hijau, Indonesia.  Batu Hijau is located on the island of Sumbawa, approximately 950 miles (1,529 kilometers) east of Jakarta. Batu Hijau is a large porphyry copper/gold deposit, which Newmont discovered in 1990. Development and construction activities began in 1997 and start-up occurred in


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late 1999. In 2009, copper sales were 497.7 million pounds (217.0 million equity pounds), while gold sales were 550,500 ounces (239,700 equity ounces) and at December 31, 2009 we reported 4,520 million equity pounds of copper reserves and 4.5 million equity ounces of gold reserves at Batu Hijau.
 
We own 35.44% of the Batu Hijau mine through the Nusa Tenggara Partnership (“NTP”) with an affiliate of Sumitomo Corporation of Japan. We have a 56.25% interest in NTP and the Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns 63% of PT Newmont Nusa Tenggara (“PTNNT”), the Indonesian subsidiary that owns Batu Hijau. In December 2009, Newmont entered into a transaction with P.T. Pukuafu Indah (“PTPI”), an unrelated noncontrolling partner of PTNNT, whereby we agreed to advance certain funds to PTPI in exchange for a pledge of the noncontrolling partner’s 20% share of PTNNT dividends, net of withholding tax, and the assignment of its voting rights to the Company. As a result, PTPI was determined to be a Variable Interest Entity (“VIE”) as it has minimal equity capital and the voting rights to its 20% interest in PTNNT reside with Newmont. As a result, our effective economic interest in PTNNT increased by 17% to 52.44% at December 31, 2009. The remaining 17% interest in PTNNT is owned by PTMDB, a consortium comprised of regional and local governments near the Batu Hijau mine, and PT Multicapital, an unrelated Indonesia company. We are currently the operator of Batu Hijau.
 
In Indonesia, rights are granted to foreign investors to explore for and to develop mineral resources within defined areas through Contracts of Work entered into with the Indonesian government. In 1986, PTNNT entered into a Contract of Work with the Indonesian government covering Batu Hijau, under which PTNNT was granted the exclusive right to explore in the contract area, construct any required facilities, extract and process the mineralized materials, and sell and export the minerals produced, subject to certain requirements including Indonesian government approvals and payment of royalties to the government. Under the Contract of Work, PTNNT has the right to continue operating the project for 30 years from operational start-up, or longer if approved by the Indonesian government.
 
Under the Contract of Work executed in 1986 between the Indonesian government and PTNNT, beginning in 2006 and continuing through 2010, a portion of PTNNT’s shares must be offered for sale, first, to the Indonesian government or, second, to Indonesian nationals, such portion 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. The price at which such interest must 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 Jakarta Stock Exchange, or the fair market value of such interest as a going concern, as agreed with the Indonesian government. Pursuant to this provision, the ownership interest in the Batu Hijau mine’s proven and probable equity reserves may be reduced in the future to as low as 27.56% and ownership interest of NTP in PTNNT could be reduced to 49%, thus reducing our ability to control the operation at Batu Hijau. In addition to affecting our level of control over operations over PTNNT, such loss of control may cause us to deconsolidate PTNNT for accounting purposes, which would reduce our reported consolidated sales, cost applicable to sales, amortization, total assets and operating cash flow attributable to PTNNT. See Note 32 to the Consolidated Financial Statements.
 
PTPI has owned and continues to own a 20% interest in PTNNT, and therefore NTP (the Newmont-Sumitomo partnership) was required to offer a 3% interest in PTNNT for sale in 2006 and an additional 7% interest in each of 2007, 2008 and 2009. 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 and 2009. Following notifications from the Department of Energy and Mineral Resources (the “DEMR”) alleging that PTNNT was in breach of its divestiture requirements under the Contract of Work and threatening to issue a notice to terminate the Contract of Work if PTNNT did not agree to divest the 2006, 2007 and 2008 shares in accordance with the direction of the DEMR, the matter was submitted to an international arbitration panel. That panel ruled in March 2009 that the 2006, 2007 and 2008 shares were required to be transferred by


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the end of September 2009, a deadline that was extended until November 23, 2009 by agreement between PTNNT and the Indonesian Government. In July 2009, the Company reached agreement with the Indonesian government on the price of the 2008 7% interest and the 2009 7% interest and reoffered the 2008 7% interest and the 2009 7% interest to the Indonesian government at this newly agreed price. In November and December 2009, sales agreements were concluded pursuant to which the 2006, 2007, and 2008 shares were transferred to PTMDB and 2009 shares were committed to be transferred to PTMDB. Although the Indonesian government has acknowledged that PTNNT is no longer in breach of the Contract of Work, future disputes may arise as to the further divestiture of the shares. It is uncertain who will acquire any future divestiture shares, and the nature of our relations with the new owners of the 2006-2009 shares and any future divestiture shares remain uncertain.
 
As part of the negotiation of the sale agreements with PTMDB, the parties executed an operating agreement under which each recognizes the right of NTP to operate Batu Hijau and binds the parties to adhere to NTP’s standards for safety, environmental stewardship and community responsibility. The operating agreement becomes effective upon the completion of the sale of the 2009 shares and continues for so long as NTP owns more shares of PTNNT than PTMDB. If the operating agreement terminates, then we will likely lose effective control over the operations of 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 NTP.
 
The forest use permit was received on September 1, 2009 and the permit renewal is valid until 2025. We have been in discussions with the Indonesian government to obtain an additional forest use permit necessary to make certain amendments to the Batu Hijau environmental management plan and environmental monitoring plan, including modifications with respect to the mine’s pit slope stability. These permits are key requirements to continue to operate Batu Hijau efficiently and to the ultimate life of the mine and recoverability of reserves. However, the additional forest use permit has not been received as of the date of this Annual Report. No assurances can be made regarding when or whether the permit and any related plan amendments will be approved. The resulting delay may adversely impact the Batu Hijau mine plan, and may adversely impact future operating and financial results, including deferment or cancellation of future development and operations.
 
Africa
 
Ahafo.  Ahafo (100% owned) is located in the Brong-Ahafo Region of Ghana, approximately 180 miles (290 kilometers) northwest of Accra. We currently operate three open pits at Ahafo with reserves contained in 17 pits. Development of a fourth pit, Amoma, is underway and production is expected to begin in late 2010. The process plant consists of a conventional mill and carbon-in-leach circuit. Ahafo sold 546,400 ounces of gold in 2009 and at December 31, 2009 we reported 9.1 million equity ounces of gold reserves at Ahafo.
 
In December 2003, Ghana’s Parliament unanimously ratified an Investment Agreement between Newmont and the Government of Ghana. The Agreement establishes a fixed fiscal and legal regime, including fixed royalty and tax rates, for the life of any Newmont project in Ghana. Under the Agreement, we will pay corporate income tax at the Ghana statutory tax rate (presently 25% but not to exceed 32.5%) and fixed gross royalties on gold production of 3.0% (3.6% for any production from forest reserve areas). The Government of Ghana is also entitled to receive 10% of a project’s net cash flow after we have recouped our investment and may acquire up to 20% of a project’s equity at fair market value on or after the 15th anniversary of such project’s commencement of production. The Investment Agreement also contains commitments with respect to job training for local Ghanaians, community development, purchasing of local goods and services and environmental protection. In 2009 the Minister of Finance implemented the National Fiscal Stabilization levy, which is an additional tax of profits. Negotiations are ongoing with the commissioner of the Ghana Internal Revenue Service on the applicability of the levy, given Newmont’s Investment Agreement. While negotiations are pending, we have paid and included $3 in Income tax expense to date under the levy.


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Akyem, Ghana.  Akyem (100% owned) is located approximately 80 miles (125 kilometers) northwest of Accra. We recently received the Environmental Permit and the Mining Lease for Akyem and we are advancing the project towards a development decision in the second half of 2010, which could result in production in late 2013 to 2014. At December 31 2009 we reported 7.7 million equity ounces of gold reserves at Akyem.
 
Operating Statistics
 
The following tables detail operating statistics related to gold production, sales and production costs.
 
                                                 
    North America     South America  
Year Ended December 31,
  2009     2008     2007     2009     2008     2007  
 
Tons mined (000 dry short tons):
                                               
Open pit
    239,102       222,222       237,933       197,559       211,525       208,871  
Underground
    2,740       2,500       1,942                    
Tons processed (000 dry short tons):
                                               
Mill
    24,702       24,755       25,526       6,242       4,196        
Leach
    19,697       26,210       19,313       136,293       97,823       98,319  
Average ore grade (oz/ton):
                                               
Mill
    0.085       0.093       0.098       0.118       0.082        
Leach
    0.022       0.025       0.031       0.018       0.018       0.019  
Average mill recovery rate
    81.8 %     81.8 %     81.2 %     86.4 %     88.2 %      
Ounces produced (000):
                                               
Mill
    1,700       1,878       2,016       630       304        
Leach
    398       476       418       1,428       1,505       1,565  
Incremental start-up(1)
    1       1       6                    
                                                 
      2,099       2,355       2,440       2,058       1,809       1,565  
                                                 
Ounces sold (000):
                                               
Consolidated
    2,118       2,320       2,439       2,068       1,843       1,565  
Less noncontrolling interests
                      (1,006 )     (897 )     (762 )
                                                 
Equity(2)
    2,118       2,320       2,439       1,062       946       803  
                                                 
Production costs per ounce:
                                               
Direct mining and production costs
  $ 535     $ 461     $ 440     $ 319     $ 354     $ 310  
By-product credits
    (55 )     (38 )     (26 )     (31 )     (27 )     (22 )
Royalties and production taxes
    27       28       12       18       16       13  
Other
    6       6       6       5       3       12  
                                                 
Costs applicable to sales
    513       457       432       311       346       313  
Amortization
    128       110       94       81       92       103  
Reclamation/accretion expense
    3       3       2       6       5       6  
                                                 
Total production costs
  $ 644     $ 570     $ 528     $ 398     $ 443     $ 422  
                                                 
 


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    Asia Pacific     Africa  
Year Ended December 31,
  2009     2008     2007     2009     2008     2007  
 
Tons mined (000 dry short tons):
                                               
Open pit
    204,814       244,220       301,166       51,971       50,567       44,235  
Underground
    3,778       3,896       3,547                    
Tons milled (000 dry short tons)
    58,853       50,074       58,714       8,335       8,262       8,090  
Average ore grade (oz/ton)
    0.034       0.033       0.032       0.074       0.075       0.060  
Average mill recovery rate
    88.3 %     88.0 %     88.0 %     87.2 %     89.7 %     92.0 %
Ounces produced (000):
                                               
Mill
    1,776       1,464       1,665       532       506       456  
Incremental start-up(1)
    56                         19        
                                                 
      1,832       1,464       1,665       532       525       456  
                                                 
Ounces sold (000):
                                               
Consolidated
    1,811       1,486       1,647       546       521       446  
Less noncontrolling interests
    (311 )     (164 )     (264 )                  
                                                 
Equity(2)
    1,500       1,322       1,383       546       521       446  
                                                 
Production costs per ounce:
                                               
Direct mining and production costs
  $ 395     $ 502     $ 382     $ 414     $ 380     $ 355  
By-product credits
    (10 )     (9 )     (6 )     (1 )     (1 )     (1 )
Royalties and production taxes
    32       29       25       29       27       21  
Other
    1       2       4       2       2       1  
                                                 
Costs applicable to sales
    418       524       405       444       408       376  
Amortization
    100       99       81       125       126       96  
Reclamation/accretion expense
    4       5       5       4       3       1  
                                                 
Total production costs
  $ 522     $ 628     $ 491     $ 573     $ 537       473  
                                                 
 
                         
    Total Gold  
Year Ended December 31,
  2009     2008     2007  
 
Ounces produced (000):
                       
Mill
    4,638       4,152       4,137  
Leach
    1,826       1,981       1,983  
Incremental start-up(1)
    57       20       6  
                         
      6,521       6,153       6,126  
                         
Ounces sold (000):
                       
Consolidated
    6,543       6,170       6,097  
Less noncontrolling interests
    (1,317 )     (1,061 )     (1,026 )
Discontinued operations(3)
    33       75       247  
                         
Equity(2)
    5,259       5,184       5,318  
                         
Production costs per ounce:
                       
Direct mining and production costs
  $ 418     $ 432     $ 385  
By-product credits
    (30 )     (25 )     (18 )
Royalties and production taxes
    26       25       17  
Other
    3       4       6  
                         
Costs applicable to sales
    417       436       390  
Amortization
    105       103       93  
Reclamation/accretion expense
    4       4       4  
                         
Total production costs
  $ 526     $ 543     $ 487  
                         
 
 
(1) Incremental start-up includes the removal and production of de minimis saleable materials during development and is recorded as Other income, net of incremental mining and processing costs.

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(2) Gold ounces sold attributable to Newmont after noncontrolling interests.
 
(3) Gold ounces sold attributable to Newmont from discontinued operations at Kori Kollo, Bolivia and Pajingo, Australia.
 
The following table details operating statistics related to copper production, sales and production costs.
 
                         
    Asia Pacific  
Year Ended December 31,
  2009     2008     2007  
 
Tons milled (000 dry short tons)
    47,087       37,818       46,782  
Average copper grade
    0.60 %     0.47 %     0.60 %
Average copper recovery rate
    89.2 %     80.6 %     86.1 %
Copper pounds produced (millions)
    499       285       484  
Copper pounds sold (millions):
                       
Consolidated
    507       290       428  
Less noncontrolling interests
    (281 )     (160 )     (228 )
                         
Equity(1)
    226       130       200  
                         
Production costs per pound:
                       
Costs applicable to sales
  $ 0.64     $ 1.38     $ 1.05  
Amortization
    0.16       0.28       0.22  
Reclamation/accretion expense
    0.01       0.02       0.01  
                         
Total production costs
  $ 0.81     $ 1.68     $ 1.28  
                         
 
 
(1) Equity copper pounds sold attributable to Newmont after noncontrolling interests.
 
Proven and Probable Equity Reserves
 
We had proven and probable gold reserves of 91.8 million equity ounces at December 31, 2009, calculated at a gold price assumption of $800, A$1,000 or NZ$1,200 per ounce, respectively. Our 2009 reserves would decline by approximately 7% (6.6 million ounces), if calculated at a $750 per ounce gold price. An increase in the gold price to $850 per ounce would increase reserves by approximately 3% (3.1 million ounces), all other assumptions remaining constant. For 2008, reserves were calculated at a gold price assumption of $725, A$850 or NZ$1,000 per ounce, respectively.
 
At December 31, 2009 our proven and probable gold reserves in North America were 30.3 million equity ounces. Outside of North America, year-end proven and probable gold reserves were 61.5 million equity ounces, including 32.9 million equity ounces in Asia Pacific, 16.8 million equity ounces in Africa and 11.8 million equity ounces in South America.
 
Our proven and probable copper reserves at December 31, 2009 were 9,120 million equity pounds. For 2009, reserves were calculated at a copper price assumption of $2.00 or A$2.40 per pound, respectively, unchanged from 2008.
 
Under our current mining plans, all of our reserves are located on fee property or mining claims or will be depleted during the terms of existing mining licenses or concessions, or where applicable, any assured renewal or extension periods for such licenses or concessions.
 
Proven and probable equity reserves are based on extensive drilling, sampling, mine modeling and metallurgical testing from which we determined economic feasibility. The price sensitivity of reserves depends upon several factors including grade, metallurgical recovery, operating cost, waste-to-ore ratio and ore type. Metallurgical recovery rates vary depending on the metallurgical properties of each deposit and the production process used. The reserve tables below list the average metallurgical recovery rate for each deposit, which takes into account the several different processing


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methods that we use. The cut-off grade, or lowest grade of mineralized material considered economic to process, varies with material type, metallurgical recoveries, operating costs and co- or by-product credits.
 
The proven and probable equity reserve figures presented herein are estimates based on information available at the time of calculation. No assurance can be given that the indicated levels of recovery of gold and copper will be realized. Ounces of gold or pounds of copper included in the proven and probable reserves are calculated without regard to any losses during metallurgical treatment. Reserve estimates may require revision based on actual production. Market fluctuations in the price of gold and copper, as well as increased production costs or reduced metallurgical recovery rates, could render certain proven and probable reserves containing relatively lower grades of mineralization uneconomic to exploit and might result in a reduction of reserves.
 
We publish reserves annually, and we will recalculate reserves at December 31, 2010, taking into account metal prices, changes, if any, in future production and capital costs, divestments and depletion as well as any acquisitions and additions to reserves during 2010.


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The following tables detail gold proven and probable equity reserves(1) reflecting only those reserves owned by Newmont at December 31, 2009 and 2008:
 
                                                                                         
          December 31, 2009(1)        
          Proven Reserves     Probable Reserves     Proven and Probable Reserves        
    Newmont
          Grade
                Grade
                Grade
          Metallurgical
 
Deposits/Districts
  Share     Tonnage(2)     (oz/ton)     Ounces(3)     Tonnage(2)     (oz/ton)     Ounces(3)     Tonnage(2)     (oz/ton)     Ounces(3)     Recovery(3)  
          (000)           (000)     (000)           (000)     (000)           (000)        
 
North America
                                                                                       
Carlin Open Pits, Nevada(4)
    100 %     24,400       0.067       1,640       234,900       0.042       9,760       259,300       0.044       11,400       74 %
Carlin Underground, Nevada
    100 %     4,600       0.307       1,400       5,100       0.315       1,590       9,700       0.311       2,990       88 %
Midas, Nevada(5)
    100 %     400       0.480       200       300       0.347       100       700       0.425       300       95 %
Phoenix, Nevada(6)
    100 %                       285,000       0.020       5,670       285,000       0.020       5,670       73 %
Twin Creeks, Nevada
    100 %     9,300       0.097       900       40,900       0.072       2,950       50,200       0.077       3,850       80 %
Turquoise Ridge, Nevada(7)
    25 %     1,100       0.480       550       1,500       0.527       810       2,600       0.507       1,360       92 %
Nevada In-Process(8)
    100 %     33,800       0.021       730                         33,800       0.021       730       65 %
Nevada Stockpiles(9)
    100 %     27,000       0.079       2,140       2,500       0.028       70       29,500       0.075       2,210       79 %
                                                                                         
Total Nevada(10)
            100,600       0.075       7,560       570,200       0.037       20,950       670,800       0.042       28,510       77 %
La Herradura, Mexico(11)
    44 %     46,100       0.019       900       47,100       0.019       880       93,200       0.019       1,780       66 %
                                                                                         
              146,700       0.058       8,460       617,300       0.035       21,830       764,000       0.040       30,290       77 %
                                                                                         
South America
                                                                                       
Conga, Peru(12)
    51.35 %                       317,200       0.019       6,080       317,200       0.019       6,080       79 %
Yanacocha, Peru Open Pits(13)
    51.35 %     7,800       0.035       270       123,700       0.036       4,480       131,500       0.036       4,750       69 %
Yanacocha, Peru In-Process(8)(13)
    51.35 %     26,400       0.025       660                         26,400       0.025       660       74 %
                                                                                         
Total Yanacocha, Peru
            34,200       0.027       930       123,700       0.036       4,480       157,900       0.034       5,410       69 %
La Zanja, Peru(14)
    46.94 %                       18,800       0.018       340       18,800       0.018       340       67 %
                                                                                         
              34,200       0.027       930       459,700       0.024       10,900       493,900       0.024       11,830       74 %
                                                                                         
Asia Pacific
                                                                                       
Batu Hijau Open Pit(15)
    52.44 %     201,100       0.015       2,970       167,700       0.005       810       368,800       0.010       3,780       76 %
Batu Hijau Stockpiles(9)(15)
    52.44 %                       193,800       0.004       720       193,800       0.004       720       70 %
                                                                                         
Total Batu Hijau, Indonesia
            201,100       0.015       2,970       361,500       0.004       1,530       562,600       0.008       4,500       75 %
Boddington, Western Australia(16)
    100 %     184,600       0.025       4,640       781,800       0.021       16,320       966,400       0.022       20,960       82 %
Jundee, Western Australia(17)
    100 %     4,100       0.065       260       3,300       0.273       910       7,400       0.159       1,170       90 %
Kalgoorlie Open Pit and Underground
    50 %     21,200       0.061       1,280       39,600       0.062       2,470       60,800       0.062       3,750       85 %
Kalgoorlie Stockpiles(9)
    50 %     14,300       0.031       440                         14,300       0.031       440       78 %
                                                                                         
Total Kalgoorlie, Western Australia(18)
    50 %     35,500       0.049       1,720       39,600       0.062       2,470       75,100       0.056       4,190       84 %
Waihi, New Zealand(19)
    100 %                       4,000       0.101       410       4,000       0.101       410       90 %
Tanami, Northern Territories(20)
    100 %     5,200       0.160       830       7,900       0.102       810       13,100       0.125       1,640       96 %
                                                                                         
              430,500       0.024       10,420       1,198,100       0.019       22,450       1,628,600       0.020       32,870       82 %
                                                                                         
Africa
                                                                                       
Ahafo Open Pits(21)
    100 %                       128,700       0.068       8,810       128,700       0.068       8,810       87 %
Ahafo Stockpiles(9)
    100 %     9,300       0.034       320                         9,300       0.034       320       87 %
                                                                                         
Total Ahafo, Ghana
    100 %     9,300       0.034       320       128,700       0.068       8,810       138,000       0.066       9,130       87 %
Akyem, Ghana(22)
    100 %                       147,200       0.052       7,660       147,200       0.052       7,660       89 %
                                                                                         
              9,300       0.033       320       275,900       0.060       16,470       285,200       0.059       16,790       88 %
                                                                                         
Total Gold
            620,700       0.032       20,130       2,551,000       0.028       71,650       3,171,700       0.029       91,780       80 %
                                                                                         
 


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          December 31, 2008(1)        
          Proven Reserves     Probable Reserves     Proven and Probable Reserves        
    Newmont
          Grade
                Grade
                Grade
          Metallurgical
 
Deposits/Districts
  Share     Tonnage(2)     (oz/ton)     Ounces(3)     Tonnage(2)     (oz/ton)     Ounces(3)     Tonnage(2)     (oz/ton)     Ounces(3)     Recovery(3)  
          (000)           (000)     (000)           (000)     (000)           (000)        
 
North America
                                                                                       
Carlin Open Pits, Nevada
    100 %     12,000       0.072       860       190,400       0.043       8,190       202,400       0.045       9,050       74 %
Carlin Underground, Nevada
    100 %     1,700       0.256       430       10,000       0.322       3,220       11,700       0.313       3,650       89 %
Midas, Nevada
    100 %     600       0.498       280       300       0.332       110       900       0.436       390       95 %
Phoenix, Nevada
    100 %                       299,800       0.021       6,310       299,800       0.021       6,310       72 %
Twin Creeks, Nevada
    100 %     9,200       0.098       900       42,500       0.072       3,060       51,700       0.077       3,960       80 %
Turquoise Ridge, Nevada(7)
    25 %     1,900       0.507       970       700       0.483       360       2,600       0.500       1,330       92 %
Nevada In-Process(8)
    100 %     36,000       0.026       940                         36,000       0.026       940       66 %
Nevada Stockpiles(9)
    100 %     32,000       0.075       2,400       2,200       0.030       60       34,200       0.072       2,460       78 %
                                                                                         
Total Nevada
            93,400       0.073       6,780       545,900       0.039       21,310       639,300       0.044       28,090       78 %
La Herradura, Mexico
    44 %     36,900       0.025       910       39,200       0.025       980       76,100       0.025       1,890       66 %
                                                                                         
              130,300       0.059       7,690       585,100       0.038       22,290       715,400       0.042       29,980       77 %
                                                                                         
South America
                                                                                       
Conga, Peru
    51.35 %                       317,200       0.019       6,080       317,200       0.019       6,080       79 %
Yanacocha, Peru Open Pits
    51.35 %     19,200       0.023       430       188,300       0.030       5,720       207,500       0.030       6,150       69 %
Yanacocha, Peru In-Process(8)
    51.35 %     20,800       0.026       530                         20,800       0.026       530       74 %
                                                                                         
Total Yanacocha, Peru
            40,000       0.024       960       188,300       0.030       5,720       228,300       0.029       6,680       69 %
Kori Kollo, Bolivia(23)
    88 %     9,100       0.018       160       2,400       0.014       30       11,500       0.017       190       52 %
                                                                                         
              49,100       0.023       1,120       507,900       0.023       11,830       557,000       0.023       12,950       74 %
                                                                                         
Asia Pacific
                                                                                       
Batu Hijau Open Pit(15)
    45 %     166,000       0.013       2,110       182,800       0.009       1,570       348,800       0.011       3,680       76 %
Batu Hijau Stockpiles(9)(15)
    45 %                       131,400       0.003       410       131,400       0.003       410       72 %
                                                                                         
Total Batu Hijau, Indonesia
            166,000       0.013       2,110       314,200       0.006       1,980       480,200       0.009       4,090       76 %
Boddington, Western Australia
    66.67 %     125,500       0.026       3,310       457,700       0.022       10,060       583,200       0.023       13,370       81 %
Jundee, Western Australia
    100 %     3,500       0.096       340       2,800       0.337       930       6,300       0.202       1,270       91 %
Kalgoorlie Open Pit and Underground
    50 %     23,100       0.061       1,410       40,600       0.063       2,560       63,700       0.062       3,970       85 %
Kalgoorlie Stockpiles(9)
    50 %     14,400       0.031       450                         14,400       0.031       450       76 %
                                                                                         
Total Kalgoorlie, Western Australia
    50 %     37,500       0.049       1,860       40,600       0.063       2,560       78,100       0.056       4,420       84 %
Waihi, New Zealand
    100 %     300       0.267       80       2,600       0.107       280       2,900       0.124       360       89 %
Tanami Underground and Open Pits
    100 %     4,000       0.167       660       5,600       0.136       760       9,600       0.149       1,420       96 %
Tanami Stockpiles(9)
    100 %                       1,900       0.029       60       1,900       0.030       60       94 %
                                                                                         
Total Tanami, Northern Territory
    100 %     4,000       0.167       660       7,500       0.108       820       11,500       0.129       1,480       96 %
              336,800       0.025       8,360       825,400       0.020       16,630       1,162,200       0.022       24,990       82 %
                                                                                         
Africa
                                                                                       
Ahafo, Ghana
    100 %     5,900       0.039       230       119,200       0.077       9,150       125,100       0.075       9,380       87 %
Akyem, Ghana
    100 %                       147,200       0.052       7,660       147,200       0.052       7,660       89 %
                                                                                         
              5,900       0.039       230       266,400       0.063       16,810       272,300       0.063       17,040       88 %
                                                                                         
Total Gold
            522,100       0.033       17,400       2,184,800       0.031       67,560       2,706,900       0.031       84,960       80 %
                                                                                         
 
 
(1) The term “reserve” means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve determination.
 
The term “economically,” as used in the definition of reserve, means that profitable extraction or production has been established or analytically demonstrated in a full feasibility study to be viable and justifiable under reasonable investment and market assumptions.
 
The term “legally,” as used in the definition of reserve, does not imply that all permits needed for mining and processing have been obtained or that other legal issues have been completely

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resolved. However, for a reserve to exist, Newmont must have a justifiable expectation, based on applicable laws and regulations, that issuance of permits or resolution of legal issues necessary for mining and processing at a particular deposit will be accomplished in the ordinary course and in a timeframe consistent with Newmont’s current mine plans.
 
The term “proven reserves” means reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (b) grade and/or quality are computed from the results of detailed sampling; and (c) the sites for inspection, sampling and measurements are spaced so closely and the geologic character is sufficiently defined that size, shape, depth and mineral content of reserves are well established.
 
The term “probable reserves” means reserves for which quantity and grade are computed from information similar to that used for proven reserves, but the sites for sampling are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
 
References to “equity ounces” or “equity pounds” mean that portion of gold or copper produced, sold or included in proven and probable reserves that is attributable to our ownership or economic interest.
 
Proven and probable equity reserves were calculated using different cut-off grades. The term “cut-off grade” means the lowest grade of mineralized material considered economic to process. Cut-off grades vary between deposits depending upon prevailing economic conditions, mineability of the deposit, by-products, amenability of the ore to gold or copper extraction, and type of milling or leaching facilities available.
 
2009 reserves were calculated at a gold price of $800, A$1,000 or NZ$1,200 per ounce unless otherwise noted.
 
2008 reserves were calculated at a gold price of $725, A$850 or NZ$1,000 per ounce unless otherwise noted.
 
(2) Tonnages include allowances for losses resulting from mining methods. Tonnages are rounded to the nearest 100,000.
 
(3) Ounces or pounds are estimates of metal contained in ore tonnages and do not include allowances for processing losses. Metallurgical recovery rates represent the estimated amount of metal to be recovered through metallurgical extraction processes. Ounces are rounded to the nearest 10,000.
 
(4) Includes undeveloped reserves at the Emigrant deposit of 1.2 million ounces.
 
(5) Also contains reserves of 4.6 million ounces of silver with a metallurgical recovery of 88%.
 
(6) Gold cut-off grade varies with level of copper credits.
 
(7) Reserve estimates provided by Barrick, the operator of the Turquoise Ridge joint venture.
 
(8) In-process material is the material on leach pads at the end of the year from which gold remains to be recovered. In-process material reserves are reported separately where tonnage or ounces are greater than 5% of the total site-reported reserves and ounces are greater than 100,000.
 
(9) Stockpiles are comprised primarily of material that has been set aside to allow processing of higher grade material in the mills. Stockpiles increase or decrease depending on current mine plans. Stockpile reserves are reported separately where tonnage or ounces are greater than 5% of the total site-reported reserves and ounces are greater than 100,000.
 
(10) Cut-off grades utilized in Nevada 2009 reserves were as follows: oxide leach material not less than 0.006 ounce per ton; oxide mill material not less than 0.025 ounce per ton; flotation material not less than 0.025 ounce per ton; and refractory mill material not less than 0.046 ounce per ton.
 
(11) Cut-off grade utilized in 2009 reserves not less than 0.006 ounce per ton.
 
(12) Deposit is currently undeveloped. Gold cut-off grade varies with level of copper credits.


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(13) Reserves include the currently undeveloped deposit at Tapado Oeste (formerly called Corimayo), which contains reserves of 1.2 million equity ounces. Cut-off grades utilized in 2009 reserves were as follows: oxide leach material not less than 0.005 ounce per ton; and oxide mill material not less than 0.014 ounce per ton.
 
(14) Reserve estimates provided by Buenaventura, the operator of the La Zanja project. Cut-off grade utilized in 2009 reserves not less than 0.005 ounce per ton.
 
(15) Percentage reflects Newmont’s economic interest at December 31, 2009. In November and December 2009 our economic interest increased from 45% to 52.44% as a result of transactions with a noncontrolling partner, partially offset by the divestiture required under the Contract of Work. Gold cut-off grade varies with level of copper credits.
 
(16) Newmont acquired the remaining 33.33% of Boddington from AngloGold in June 2009. Gold cut-off grade varies with level of copper credits.
 
(17) Cut-off grade utilized in 2009 reserves not less than 0.020 ounce per ton.
 
(18) Cut-off grade utilized in 2009 reserves not less than 0.026 ounce per ton.
 
(19) Cut-off grade utilized in 2009 reserves not less than 0.020 ounce per ton.
 
(20) Cut-off grade utilized in 2009 reserves not less than 0.045 ounce per ton.
 
(21) Includes undeveloped reserves at eight pits in the Ahafo trend totaling 3.7 million ounces. Cut-off grade utilized in 2009 reserves not less than 0.016 ounce per ton.
 
(22) Deposit is undeveloped. Cut-off grade utilized in 2009 reserves not less than 0.012 ounce per ton.
 
(23) Newmont divested its interest in Kori Kollo in July 2009.
 
The following tables detail copper proven and probable equity reserves(1) reflecting only those reserves owned by Newmont at December 31, 2009 and 2008:
 
                                                                                         
    December 31, 2009(1)  
          Proven Reserves     Probable Reserves     Proven and Probable Reserves        
    Newmont
          Grade
                Grade
                Grade
          Metallurgical
 
Deposits/Districts
  Share     Tonnage(2)     (Cu%)     Pounds(3)     Tonnage(2)     (Cu%)     Pounds(3)     Tonnage(2)     (Cu%)     Pounds(3)     Recovery(3)  
          (000)           (millions)     (000)           (millions)     (000)           (millions)        
 
                                                                                         
North America
                                                                                       
                                                                                         
Phoenix, Nevada(4)
    100 %                       287,500       0.16 %     900       287,500       0.16 %     900       61 %
                                                                                         
South America
                                                                                       
                                                                                         
Conga, Peru(5)
    51.35 %                       317,200       0.26 %     1,660       317,200       0.26 %     1,660       85 %
                                                                                         
Asia Pacific
                                                                                       
                                                                                         
Batu Hijau Open Pit(6)
    52.44 %     201,100       0.51 %     2,070       167,700       0.32 %     1,060       368,800       0.42 %     3,130       77 %
                                                                                         
Batu Hijau Stockpiles(6)(7)
    52.44 %                       193,800       0.36 %     1,390       193,800       0.36 %     1,390       66 %
                                                                                         
                                                                                         
Total Batu Hijau, Indonesia
    52.44 %     201,100       0.51 %     2,070       361,500       0.34 %     2,450       562,600       0.40 %     4,520       74 %
                                                                                         
Boddington, Western Australia(8)
    100 %     184,600       0.11 %     400       781,800       0.10 %     1,640       966,400       0.11 %     2,040       84 %
                                                                                         
                                                                                         
Total Asia Pacific
            385,700       0.32 %     2,470       1,143,300       0.18 %     4,090       1,529,000       0.21 %     6,560       77 %
                                                                                         
                                                                                         
Total Copper
            385,700       0.32 %     2,470       1,748,000       0.19 %     6,650       2,133,700       0.21 %     9,120       77 %
                                                                                         
 


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    December 31, 2008(1)  
          Proven Reserves     Probable Reserves     Proven and Probable Reserves        
    Newmont
          Grade
                Grade
                Grade
          Metallurgical
 
Deposits/Districts
  Share     Tonnage(2)     (Cu%)     Pounds(3)     Tonnage(2)     (Cu%)     Pounds(3)     Tonnage(2)     (Cu%)     Pounds(3)     Recovery(3)  
          (000)           (millions)     (000)           (millions)     (000)           (millions)        
 
                                                                                         
North America
                                                                                       
                                                                                         
Phoenix, Nevada
    100 %                       302,000       0.15 %     890       302,000       0.15 %     890       61 %
                                                                                         
South America
                                                                                       
                                                                                         
Conga, Peru
    51.35 %                       317,200       0.26 %     1,660       317,200       0.26 %     1,660       85 %
                                                                                         
Asia Pacific
                                                                                       
                                                                                         
Batu Hijau Open Pit
    45 %     166,000       0.48 %     1,600       182,800       0.40 %     1,460       348,800       0.44 %     3,060       77 %
                                                                                         
Batu Hijau Stockpiles(7)
    45 %                       131,400       0.34 %     890       131,400       0.34 %     890       67 %
                                                                                         
                                                                                         
Total Batu Hijau, Indonesia
    45 %     166,000       0.48 %     1,600       314,200       0.37 %     2,350       480,200       0.41 %     3,950       75 %
                                                                                         
Boddington, Western Australia
    66.67 %     125,500       0.11 %     280       457,700       0.11 %     1,000       583,200       0.11 %     1,280       83 %
                                                                                         
                                                                                         
Total Asia Pacific
            291,500       0.11 %     1,880       771,900       0.11 %     3,350       1,063,400       0.11 %     5,230       83 %
                                                                                         
                                                                                         
Total Copper
            291,500       0.32 %     1,880       1,391,100       0.21 %     5,900       1,682,600       0.23 %     7,780       77 %
                                                                                         
 
 
(1) See footnote (1) to the Gold Proven and Probable Equity Reserves tables above. Copper reserves for 2009 and 2008 were calculated at a copper price of $2.00 or A$2.40 per pound.
 
(2) See footnote (2) to the Gold Proven and Probable Equity Reserves tables above. Tonnages are rounded to nearest 100,000.
 
(3) See footnote (3) to the Gold Proven and Probable Equity Reserves tables above. Pounds are rounded to the nearest 10 million.
 
(4) Copper cut-off grade varies with level of gold credits.
 
(5) Deposit is undeveloped. Copper cut-off grade varies with level of gold credits.
 
(6) Percentage reflects Newmont’s economic interest at December 31, 2009. In November and December 2009 our economic interest increased from 45% to 52.44% as a result of transactions with a noncontrolling partner, partially offset by the divestiture required under the Contract of Work. Copper cut-off grade varies with level of gold credits.
 
(7) Stockpiles are comprised primarily of material that has been set aside to allow processing of higher grade material in the mills. Stockpiles increase or decrease depending on current mine plans. Stockpiles are reported separately where tonnage or contained metal are greater than 5% of the total site reported reserves.
 
(8) Newmont acquired the remaining 33.33% of Boddington from AngloGold in June 2009. Copper cut-off grade varies with level of gold credits.
 
The following table reconciles year-end 2009 and 2008 gold and copper proven and probable equity reserves:
 
                 
    Equity Ounces     Equity Pounds  
    (in millions)     (in millions)  
 
December 31, 2008
    85.0       7,780  
Depletion(1)
    (6.8 )     (310 )
Revisions and Additions, net(2)
    6.4       400  
Acquisitions
    8.2       2,040  
Other divestments
    (1.0 )     (790 )
                 
December 31, 2009
    91.8       9,120  
                 
 
 
(1) Reserves mined and processed in 2009.
 
(2) Revisions and additions are due to reserve conversions, optimizations, model updates, metal price changes and updated operating costs and recoveries.

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ITEM 3.   LEGAL PROCEEDINGS
 
For a discussion of legal proceedings, see Note 33 to the Consolidated Financial Statements.
 
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the quarter ended December 31, 2009.
 
ITEM 4A.   EXECUTIVE OFFICERS OF THE REGISTRANT
 
Newmont’s executive officers at February 17, 2010 were:
 
             
Name
 
Age
 
Office
 
Richard T. O’Brien
    55     President and Chief Executive Officer
Russell Ball
    41     Executive Vice President and Chief Financial Officer
Alan R. Blank
    53     Executive Vice President, Legal and External Affairs
Randy Engel
    43     Executive Vice President, Strategic Development
Brian A. Hill
    50     Executive Vice President, Operations
Guy Lansdown
    49     Executive Vice President, Discovery and Development
Thomas Kerr
    49     Senior Vice President, North American Operations
Jeffrey R. Huspeni
    54     Senior Vice President, African Operations
Carlos Santa Cruz
    54     Senior Vice President, South American Operations
Tim Netscher
    59     Senior Vice President, Asia Pacific Operations
David Gutierrez
    55     Vice President, Planning and Tax
Roger Johnson
    52     Vice President and Chief Accounting Officer
Thomas P. Mahoney
    54     Vice President and Treasurer
 
There are no family relationships by blood, marriage or adoption among any of the above executive officers or members of the Board of Directors of Newmont. Each executive officer is elected annually by the Board of Directors of Newmont to serve for one year or until his respective successor is elected and qualified. There is no arrangement or understanding between any of the above executive officers and any other person pursuant to which he was selected as an executive officer.
 
Mr. O’Brien was elected President and Chief Executive Officer in July 2007, having served as President and Chief Financial Officer from April 2007 to July 2007, Executive Vice President and Chief Financial Officer from September 2006 to April 2007 and Senior Vice President and Chief Financial Officer during 2005 and 2006. Mr. O’Brien was Executive or Senior Vice President and Chief Financial Officer of AGL Resources from 2001 to 2005.
 
Mr. Ball was elected Executive Vice President and Chief Financial Officer in October 2008, having served as Senior Vice President and Chief Financial Officer since July 2007. Mr. Ball served as Vice President and Controller from 2004 to 2007. Previously, he served as Group Executive, Investor Relations, from 2002 to 2004 and as Financial Director and Controller for Newmont’s Indonesian business unit. Mr. Ball joined Newmont in 1994 as senior internal auditor after practicing as a Chartered Accountant (SA) with Coopers and Lybrand in Durban, South Africa.
 
Mr. Blank was elected Executive Vice President, Legal and External Affairs, in October 2008, having served as Senior Vice President, Legal and External Affairs since July 2008. Prior to joining Newmont, Mr. Blank was a partner at the law firm of Stoel Rives LLP in Portland, Oregon, where he practiced since 1988.


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Mr. Engel was elected Executive Vice President, Strategic Development, in October 2008, having served as Senior Vice President, Strategy and Corporate Development, since July 2007. Mr. Engel served as Vice President, Strategic Planning and Investor relations from 2006 to 2007; Group Executive, Investor Relations from 2004 to 2006; and Assistant Treasurer from 2001 to 2004. Mr. Engel has been with Newmont since 1994, and has served in various capacities in the areas of business planning, corporate treasury and human resources.
 
Mr. Hill was elected Executive Vice President, Operations, in October 2008, having served as Vice President, Asia Pacific Operations, since January 2008. Mr. Hill previously served as Managing Director and Chief Executive Officer of Norilsk Nickel Australia Pty Ltd in 2007; Managing Director and Chief Executive Officer of Equatorial Mining Ltd from 2004 to 2006; and Managing Director of Falconbridge (Australia) Pty Ltd from 2000 to 2004.
 
Mr. Lansdown was elected Executive Vice President, Discovery and Development, in October 2008, having previously served as Senior Vice President, Project Development and Operations Services, since July 2007. Mr. Lansdown served as Vice President, Project Engineering and Construction from 2006 to 2007; Project Executive, Boddington, from 2005 to 2006; and Operations Manager, Yanacocha from 2003 to 2005. Mr. Lansdown joined Newmont in 1993 after serving as an associate with Knight Piesold and as the manager of projects Group Five in South Africa.
 
Mr. Kerr was elected Senior Vice President, North American Operations, in December 2009, having served as Vice President, Newmont USA Limited, North American Operations since November 2008. Mr. Kerr previously served as Phoenix Project Manager, Senior Manager-Surface Operations and General Manager-Twin Creeks Operation from 2004 to 2008, Midas Site Manager from 2003 to 2004 and Project Manager of Newmont’s Corporate Development Transformation Project from 2002 to 2003.
 
Mr. Huspeni was elected Senior Vice President, African Operations, in October 2008, having served as Vice President, African Operations, since January 2008. Mr. Huspeni previously served as Vice President, Exploration Business Development from 2005 to 2008 and Vice President, Mineral District Exploration, from 2002 to 2005.
 
Mr. Santa Cruz was named Senior Vice President, South American Operations, in October 2008, having served as Vice President, South American Operations, since 2001. He served as General Manager of Minera Yanacocha S.R.L. from 1997 to 2001 after having previously served as Assistant General Manager from 1995 to 1997 and Operations Manager from 1992 to 1995.
 
Mr. Netscher was elected Senior Vice President, Asia Pacific Operations in May 2009. Prior to joining Newmont, he held positions as Managing Director of Vale Australia from 2007 to 2008, Senior Vice President and Chief Operating Officer of PT Inco in Indonesia from 2006 to 2007, Managing Director and Chief Operating Officer of QNI Pty Limited from 2001 to 2005 and Executive Director of Impala Platinum Limited from 1991 to 1997.
 
Mr. Gutierrez was elected Vice President, Planning and Tax in November 2009, having served as Vice President, Accounting and Tax from 2007 to 2009 and Vice President, Tax from 2005 to 2007. Prior to joining Newmont he was a partner with KPMG LLP from 2002 to 2005, serving as the Denver office Tax Managing Partner from 2003 to 2005.
 
Mr. Johnson was elected Vice President and Chief Accounting Officer in February 2008. Mr. Johnson previously served as Controller and Chief Accounting Officer from July 2007 to February 2008; Assistant Controller from 2004 to 2007; Operations Controller and Regional Controller, Australia from 2003 to 2004. Before joining Newmont, Mr. Johnson served as Senior Vice President, Finance and Administration at Pasminco Zinc, Inc.
 
Mr. Mahoney was elected Vice President and Treasurer of Newmont in 2002. He served as Treasurer of Newmont from 2001 to 2002. Previously, he served as Assistant Treasurer from 1997 to 2001. Mr. Mahoney joined Newmont as Assistant Treasurer, International in 1994.


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PART II
 
ITEM 5.   MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES
 
Our common stock is listed and principally traded on the New York Stock Exchange (under the symbol “NEM”) and is also listed in the form of CHESS Depositary Interests (“CDIs”) (under the symbol “NEM”) on the Australian Stock Exchange (“ASX”). In Australia, Newmont is referred to as “Newmont Mining Corporation ARBN 099 065 997 organized in Delaware with limited liability.” Since July 1, 2002, Newmont CDIs have traded on the ASX as a Foreign Exempt Listing granted by the ASX, which provides an ancillary trading facility to Newmont’s primary listing on NYSE.
 
Holders of Australia CDIs were notified on November 9, 2009 that Newmont had elected to suspend the CDIs from trading on the ASX on February 10, 2010 and to delist the CDIs at February 17, 2010. The election was made in light of the relatively low volume of Newmont CDIs now traded on the ASX in comparison with other exchanges on which Newmont shares may be traded, and the fact that investors in Australia seeking to trade in Newmont common stock no longer must hold CDIs but may instead trade in common shares on the New York Stock Exchange. Following the delisting in February 2010, CDI holders can convert their CDIs to the underlying Newmont common stock or participate in a voluntary share sale facility of the underlying Newmont common stock. If the CDI holders take no action the underlying Newmont common stock will be sold in a compulsory sale following the expiration of the voluntary share sale facility.
 
Newmont Mining Corporation of Canada Limited’s exchangeable shares (“Exchangeable Shares”) are listed on the Toronto Stock Exchange (under the symbol “NMC”).
 
The following table sets forth, for the periods indicated, the closing high and low sales prices per share of Newmont’s common stock as reported on the New York Stock Exchange Composite Tape.
 
                                 
    2009     2008  
   
High
   
Low
   
High
   
Low
 
 
First quarter
  $ 47.31     $ 34.40     $ 56.22     $ 45.30  
Second quarter
  $ 49.84     $ 37.54     $ 52.68     $ 42.93  
Third quarter
  $ 48.00     $ 36.77     $ 53.37     $ 33.73  
Fourth quarter
  $ 59.45     $ 41.45     $ 40.70     $ 21.54  
 
On February 17, 2010, there were outstanding 483,029,539 shares of Newmont’s common stock (including shares represented by CDIs), which were held by approximately 13,818 stockholders of record. A dividend of $0.10 per share of common stock outstanding was declared in each quarter of 2009 and 2008, for a total of $0.40 during each year.
 
The determination of the amount of future dividends will be made by Newmont’s Board of Directors from time to time and will depend on Newmont’s future earnings, capital requirements, financial condition and other relevant factors.
 
On February 17, 2010, there were outstanding 7,957,841 Exchangeable Shares, which were held by 43 holders of record. The Exchangeable Shares are exchangeable at the option of the holders into Newmont common stock. Holders of Exchangeable Shares are therefore entitled to receive dividends equivalent to those that Newmont declares on its common stock.
 
No shares or other units of any class of Newmont’s equity securities registered pursuant to Section 12 of the Exchange Act of 1934, as amended, were purchased by the Company, or any affiliated purchaser, during the period October 1, 2009 to December 31, 2009.


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ITEM 6.   SELECTED FINANCIAL DATA (dollars in millions, except per share)
 
                                         
    Years Ended December 31,  
    2009     2008     2007     2006     2005  
 
Revenues
  $ 7,705     $ 6,124     $ 5,465     $ 4,805     $ 4,221  
Income (loss) from continuing operations
  $ 2,109     $ 1,147     $ (580 )   $ 900     $ 647  
Net income (loss)
  $ 2,093     $ 1,160     $ (1,485 )   $ 1,154     $ 702  
Net income (loss) attributable to Newmont stockholders(1)
  $ 1,297     $ 831     $ (1,895 )   $ 791     $ 322  
Income (loss) per common share attributable to Newmont stockholders:
                                       
Basic:
                                       
Continuing operations
  $ 2.68     $ 1.80     $ (2.18 )   $ 1.20     $ 0.60  
Discontinued operations
    (0.02 )     0.03       (2.01 )     0.56       0.12  
                                         
    $ 2.66     $ 1.83     $ (4.19 )   $ 1.76     $ 0.72  
                                         
Diluted:
                                       
Continuing operations
  $ 2.68     $ 1.80     $ (2.18 )   $ 1.19     $ 0.60  
Discontinued operations
    (0.02 )     0.03       (2.01 )     0.56       0.12  
                                         
    $ 2.66     $ 1.83     $ (4.19 )   $ 1.75     $ 0.72  
                                         
Dividends declared per common share
  $ 0.40     $ 0.40     $ 0.40     $ 0.40     $ 0.40  
 
                                         
    At December 31,  
    2009     2008     2007     2006     2005  
 
Total assets
  $ 22,299     $ 15,727     $ 15,474     $ 15,601     $ 13,992  
Long-term debt, including current portion
  $ 4,809     $ 3,237     $ 2,597     $ 1,911     $ 1,918  
Newmont stockholders’ equity
  $ 10,703     $ 7,291     $ 7,759     $ 9,337     $ 8,376  
 
 
(1) Net income (loss) attributable to Newmont stockholders includes income (loss) from discontinued operations for Kori Kollo, Merchant Banking, Pajingo, Zarafshan, Holloway and Golden Grove of ($11), $15, ($907), $251 and $53 net of tax in 2009, 2008, 2007, 2006 and 2005, respectively.


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ITEM 7.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS (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 measures used in this MD&A, please see the discussion under “Non-GAAP Financial Performance Measures” beginning on page 78. References to “A$” refer to Australian currency, “C$” to Canadian currency, “NZ$” to New Zealand currency, “IDR” to Indonesian currency and “$” to United States currency.
 
This discussion addresses matters we consider important for an understanding of our financial condition and results of operations at and for the three years ended December 31, 2009, as well as our future results. It consists of the following subsections:
 
  •  “Overview,” which provides a brief summary of our consolidated results and financial position and the primary factors affecting those results, as well as a summary of our expectations for 2010;
 
  •  “Accounting Developments,” which provides a discussion of recent changes to our accounting policies that have affected our consolidated results and financial position;
 
  •  “Critical Accounting Policies,” which provides an analysis of the accounting policies we consider critical because of their effect on the reported amounts of assets, liabilities, income and/or expenses in our consolidated financial statements and/or because they require difficult, subjective or complex judgments by our management;
 
  •  “Consolidated Financial Results,” which includes a discussion of our consolidated financial results for the last three years;
 
  •  “Results of Consolidated Operations,” which provides an analysis of the regional operating results for the last three years;
 
  •  “Liquidity and Capital Resources,” which contains a discussion of our cash flows and liquidity, investing activities and financing activities, contractual obligations and off-balance sheet arrangements; and
 
  •  “Non-GAAP Financial Measures,” which includes descriptions of the various non-GAAP financial performance measures used by management, the reasons for their usage and a tabular reconciliation of these measures to the closest equivalent US GAAP measure.
 
This item should be read in conjunction with our consolidated financial statements and the notes thereto included in this annual report.
 
Overview
 
Newmont is one of the world’s 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 or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico.
 
2009 was a year of execution as Newmont continued on its journey of transformation and evolution. In our drive to be the most valued and respected mining company through industry leading performance, we have successfully executed on the key benchmarks that we set out for the Company at the beginning of the year.


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Delivered strong operating performance.
 
  •  Consolidated gold sales of approximately 6.5 million ounces at Costs applicable to sales of $417 per ounce;
 
  •  Consolidated copper sales of approximately 507 million pounds at Costs applicable to sales of $0.64 per pound;
 
  •  Revenues of $7.7 billion, an increase of 26% over 2008;
 
  •  Gold operating margin (realized price per ounce less Costs applicable to sales per ounce) of $451 per ounce in 2009, an increase of 28% over 2008 compared to an increase of 12% in the realized gold price for the same period;
 
  •  Record net income attributable to Newmont stockholders of $2.66 per share;
 
  •  Record cash flow from continuing operations of $2.9 billion, an increase of 109%; and
 
  •  Net increase of 6.8 million equity ounces of gold reserves to report 91.8 million equity ounces at December 31, 2009.
 
Added significant new production capabilities with the successful completion of the world-class Boddington project, which will soon become Australia’s largest gold mine and a cornerstone asset for the Company.
 
  •  Acquired the remaining 33.33% interest from AngloGold in June 2009;
 
  •  Achieved commercial production in November 2009, just three months after construction completion;
 
  •  Total gold reserves in excess of 20 million equity ounces and copper reserves in excess of 2,000 million equity pounds; and
 
  •  When fully operational, Boddington’s average annual production for the first five years will be approximately 1 million ounces at Costs applicable to sales of approximately $375 per ounce, on a co-product basis ($300 per ounce, on a by-product basis; see “Non-GAAP Financial Measures” on page 78).
 
Advancing the development of our project pipeline.
 
  •  Akyem, Ghana — Currently in the development phase with a construction decision expected in the second half of 2010. In January 2010 we received the Mining Lease from the government. This project is expected to be in production in late 2013 to 2014 producing between 480,000 and 550,000 ounces of gold per year for the first full five years at Costs applicable to sales of $350 to $450 per ounce;
 
  •  Conga, Peru — Feasibility studies on our preferred option were completed in late 2009 and a construction decision is expected in the fourth quarter of 2010 assuming government approval. Production is expected in late 2014 to 2015 with gold production of 650,000 to 750,000 ounces (330,000 to 385,000 equity ounces) per year for the first full five years (at Costs applicable to sales of $300 to $400 per ounce) and copper production of 160 million to 210 million pounds (80 to 108 million equity pounds) per year for the first full five years (at Costs applicable to sales of $0.95 to $1.25 per pound);
 
  •  Hope Bay, Nunavut, Canada — Made significant progress in locating gold mineralization and identified an additional 45 drilling targets. We are currently evaluating a small underground operation to quickly advance production, while enhancing valuable experience and knowledge about mining in the challenging arctic environment; and


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  •  Nevada Growth — Leveraging our expertise and infrastructure in Nevada to potentially develop 4 to 7 million ounces in this historic and prolific gold district.
 
Implemented Business Excellence initiatives to further drive continuous improvement and business efficiencies throughout our organization.
 
  •  Continuing to deliver on expectations through a fully aligned and integrated Executive Leadership Team;
 
  •  Unhedged revenue streams;
 
  •  Creating deep alignment to maximize assets and control costs;
 
  •  Continuing evolution to a process-driven culture;
 
  •  Developing and cultivating a strong portfolio of new projects;
 
  •  Maintaining our industry-leading environmental, social and community relations commitments.
 
  •  Striving to remain a member of the Dow Jones Sustainability World Index;
 
  •  Continuing to improve our safety performance; and
 
  •  Investing in people and innovation.
 
We are proud of our accomplishments to date, but remain focused on continuing our pursuit of excellence in 2010 and beyond.
 
Summary of Consolidated Financial and Operating Performance
 
The table below highlights key financial and operating results:
 
                         
    Years Ended December 31,  
    2009     2008     2007  
 
Revenues
  $ 7,705     $ 6,124     $ 5,465  
Income (loss) from continuing operations
  $ 2,109     $ 1,147     $ (580 )
Net income (loss)
  $ 2,093     $ 1,160     $ (1,485 )
Net income attributable to Newmont stockholders
  $ 1,297     $ 831     $ (1,895 )
Per common share, basic
                       
Income (loss) from continuing operations attributable to Newmont stockholders
  $ 2.68     $ 1.80     $ (2.18 )
Net income (loss) attributable to Newmont stockholders
  $ 2.66     $ 1.83     $ (4.19 )
Adjusted net income(1)
  $ 1,359     $ 792     $ 524  
Adjusted net income per share(1)
  $ 2.79     $ 1.74     $ 1.16  
Consolidated gold ounces sold (thousands)(2)
    6,543       6,170       6,097  
Equity gold ounces sold (thousands)(3)(4)
    5,259       5,184       5,318  
Consolidated copper pounds sold (millions)
    507       290       428  
Equity copper pounds sold (millions)(4)
    226       130       200  
Average price received, net(5)
                       
Gold (per ounce)
  $ 977     $ 874     $ 697  
Copper (per pound)
  $ 2.60     $ 2.59     $ 2.86  
Costs applicable to sales(6)
                       
Gold (per ounce)
  $ 417     $ 436     $ 390  
Copper (per pound)
  $ 0.64     $ 1.38     $ 1.05  
 
 
(1) See “Non-GAAP Financial Measures” on page 78.


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(2) Includes incremental start-up ounces of 9, 20 and 6 in 2009, 2008 and 2007, respectively. Incremental start-up includes the removal and production of de minimis saleable materials during development and is recorded as Other income, net of incremental mining and processing costs.
 
(3) Includes sales from discontinued operations of 33, 75 and 247 ounces in 2009, 2008 and 2007, respectively.
 
(4) Equity gold ounces and copper pounds sold attributable to Newmont after noncontrolling interests.
 
(5) After treatment and refining charges and excluding settlement of price-capped forward sales contracts.
 
(6) Excludes Amortization, Accretion, the 2007 Loss on settlement of price-capped forward sales contracts and the 2007 Midas redevelopment.
 
Consolidated Financial Performance
 
Gold revenues increased in 2009 compared to 2008 primarily due to an increase in the average realized price and consolidated ounces sold. Gold sales increased to 6.5 million ounces in 2009 from 6.2 million ounces in 2008, primarily due to the start-up of Boddington and higher production at Yanacocha and Batu Hijau, partially offset by lower production in Nevada. Copper revenues increased in 2009 from 2008 due to higher sales volume at Batu Hijau and the start-up of Boddington. In addition, our 2009 financial and operating results were impacted by the following:
 
  •  Boddington acquisition costs and revaluation of contingent consideration ($90, pre-tax);
 
  •  Advanced projects, research and development expense ($135, primarily at Boddington, Hope Bay, Nevada growth and Ghana investments); and
 
  •  Loss on the sale of the Kori Kollo operations ($43, pre-tax).
 
Liquidity
 
Our financial position was as follows:
 
                 
    December 31,  
    2009     2008  
 
Total debt
  $ 4,809     $ 3,237  
Newmont stockholders’ equity
  $ 10,703     $ 7,291  
Cash and cash equivalents
  $ 3,215     $ 435  
Marketable equity securities
  $ 1,175     $ 621  
 
During 2009 our debt and liquidity positions were affected by the following:
 
  •  Net cash provided from continuing operations of $2,914;
 
  •  Capital expenditures of $1,769;
 
  •  Issuance of debt of $1,568, net;
 
  •  Net proceeds of $1,234 from the public offering of 34,500,000 shares of common stock;
 
  •  Acquisition of the remaining 33.33% interest in Boddington for $996;
 
  •  Proceeds from the sale of Batu Hijau shares to noncontrolling interests of $638;
 
  •  Acquisition of Batu Hijau economic interest from noncontrolling interests for $287;
 
  •  Dividends paid to common shareholders of $196; and
 
  •  Dividends paid to noncontrolling interests of $394.


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Looking Forward
 
Certain key factors will affect our future financial and operating results. These include, but are not limited to, the following:
 
  •  Fluctuations in gold and copper prices;
 
  •  We expect 2010 consolidated gold production of approximately 6.3 to 6.8 million ounces, primarily as a result of the ramp-up of Boddington, partially offset by lower production at Nevada and Yanacocha;
 
  •  Costs applicable to sales — gold for 2010 are expected to be approximately $450 to $480 per ounce due to higher energy costs, labor and contracted services and lower expected production at Nevada and Yanacocha;
 
  •  We expect 2010 consolidated copper production of approximately 540 to 600 million pounds at Costs applicable to sales of approximately $0.85 to $0.95 per pound;
 
  •  We anticipate capital expenditures of approximately $1,400 to $1,600 in 2010, with approximately 30% invested in each of the North America and Asia Pacific regions and the remaining 40% at other locations. Approximately 60% of the 2010 capital budget is allocated to sustaining investments, with the remaining 40% allocated to project development, including the development of the Akyem project in Ghana and the Conga project in Peru;
 
  •  We expect 2010 exploration expenditures of approximately $190 to $220 and 2010 advanced projects, research and development expenditures of approximately $185 to $210;
 
  •  Our 2010 expectations, particularly with respect to production volumes and Costs applicable to sales per ounce or pound, may differ significantly from actual quarter and full year results due to variations in mine planning and sequencing, ore grades and hardness, metal recoveries, waste removal, commodity input prices and foreign currency exchange rates; and
 
  •  Potential future investments in the Hope Bay project in Canada, the Akyem project in Ghana and the Conga project in Peru will require significant funding. Our operating cash flow may become insufficient to meet the funding requirements of these investments, fund our ongoing business activities and pay dividends. Our ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, future gold and copper prices and our operational performance, among other factors. In the event of lower gold and copper prices, unanticipated operating or financial challenges, or new funding limitations, our ability to pursue new business opportunities, invest in existing and new projects, fund our ongoing business activities and pay dividends could be significantly constrained.
 
Accounting Developments
 
For a discussion of Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements see Note 2 to the Consolidated Financial Statements.
 
Critical Accounting Policies
 
Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported.
 
Carrying Value of Goodwill
 
At December 31, 2009, the carrying value of goodwill was approximately $188. Goodwill represents the excess of the aggregate purchase price over the fair value of the identifiable net assets. Goodwill was assigned to various mine site reporting units in the Asia Pacific Segment. Our approach to allocating goodwill was to identify those reporting units that we believed had contributed


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to such excess purchase price. We then performed valuations to measure the incremental increases in the fair values of such reporting units that were attributable to the acquisitions, and that were not already captured in the fair values assigned to such units’ identifiable net assets.
 
We evaluate, on at least an annual basis during the fourth quarter, the carrying amount of goodwill to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. To accomplish this, we compare the estimated fair value of our reporting units to their carrying amounts. If the carrying value of a reporting unit exceeds its estimated fair value, we compare the implied fair value of the reporting unit’s goodwill to its carrying amount, and any excess of the carrying value over the fair value is charged to earnings. Our fair value estimates are based on numerous assumptions and it is possible that actual fair value will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold and other commodity prices, production levels, operating costs and capital requirements are each subject to significant risks and uncertainties.
 
Mine Site Goodwill
 
The assignment of goodwill to mine site reporting units was based on synergies that have been incorporated into our operations and business plans over time. The amount of goodwill assigned to each segment or reporting unit was based on discounted cash flow analyses that assumed risk-adjusted discount rates over the remaining lives of the applicable mining operations. We believe that triggering events with respect to the goodwill assigned to mine site reporting units could include, but are not limited to: (i) a significant decrease in our long-term gold and copper price assumptions; (ii) a decrease in reserves; (iii) a significant reduction in the estimated fair value of mine site exploration potential; and (iv) any event that might otherwise adversely affect mine site production levels or costs. We performed our annual impairment test of mine site goodwill at December 31, 2009 and determined that the fair value of each mine site reporting unit was in excess of the relevant carrying value at December 31, 2009. For more information on the discounted cash flows used to value mine site reporting units, see Carrying Value of Long-Lived Assets, below.
 
Exploration Segment Goodwill
 
In the fourth quarter of 2007, the Exploration Segment was impaired and the full value of goodwill was written-off. The Exploration Segment was responsible for all activities, whether near-mine or greenfield, associated with our efforts to discover new mineralized material that could ultimately advance into proven and probable reserves. As discussed in greater detail below, when performing our Exploration Segment goodwill impairment testing, we used historic additions to proven and probable reserves as an indication of the expected future performance of the Exploration Segment.
 
The Exploration Segment’s valuation model attributed all cash flows expected to be derived from future greenfield exploration discoveries, to the Exploration Segment. The valuation model included management’s best estimates of future reserve additions from exploration activities and all revenues and costs associated with their discovery, development and production. Historical proven and probable reserve additions, excluding acquisitions, were used as an indicator of the Exploration Segment’s ability to discover additional reserves in the future. The valuation model assumed that we would be able to perpetually develop and produce the assumed additions to proven and probable reserves from future discoveries at existing or new mine site reporting units. Actual reserve additions have varied significantly from year to year due to the time required to advance a deposit from initial discovery to proven and probable reserves and based on the timing of when proven and probable reserves can be reported under the Securities and Exchange Commission Industry Guide 7.
 
In the fourth quarter of 2007, we performed an impairment test of the Exploration Segment goodwill. Based on the Exploration Segment’s historic additions to proven and probable reserves and management’s best estimates of future reserve additions from exploration activities and all revenues and costs associated with their discovery, development and production, the Exploration Segment’s


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estimated fair value was negligible. The decreased value attributable to the Exploration Segment resulted primarily from adverse changes in valuation assumptions and the application of a revised industry definition of value beyond proven and probable reserves (“VBPP”). The changes to valuation assumptions included: (i) a significantly lower assumed annual reserve growth rate (from 4% to 3%), (ii) a significant change in the financial markets resulting in a significant increase in the discount rate (from 8% to 10%), and (iii) an increase in finding costs due to a combination of increased spending and reduced exploration success. The revised definition of VBPP ascribes more value to tangible mineral interest than the original definition used. As a result of applying the new definition of VBPP, the higher value ascribed to the Exploration Segment’s tangible mineral interests reduced the implied value of the Exploration Segment’s goodwill to a negligible value. Based on the negligible valuation, the Exploration Segment goodwill was impaired and the full $1,122 of goodwill was recorded as a non-cash write-down at December 31, 2007.
 
Merchant Banking Goodwill
 
During June 2007, our Board of Directors approved a plan to cease Merchant Banking activities, and Merchant Banking was subsequently sold in December 2007. Merchant Banking previously provided advisory services to assist in managing our portfolio of operating and property interests. Merchant Banking was also engaged in developing value optimization strategies for operating and non-operating assets, business development activities, merger and acquisition analysis and negotiations, monetizing inactive exploration properties, capitalizing on proprietary technology and know-how and acting as an internal resource for other corporate groups to improve and maximize business outcomes. As a result of the Board’s approval of management’s plan to cease Merchant Banking activities, we recorded a $1,665 non-cash charge to impair the goodwill associated with the Merchant Banking Segment during the second quarter of 2007.
 
Amortization
 
Expenditures for new facilities or equipment and expenditures that extend the useful lives of existing facilities or equipment are capitalized and amortized using the straight-line method at rates sufficient to amortize such costs over the estimated future lives of such facilities or equipment. These lives do not exceed the estimated mine life based on proven and probable reserves as the useful lives of these assets are considered to be limited to the life of the relevant mine.
 
Costs incurred to develop new properties are capitalized as incurred, where it has been determined that the property can be economically developed based on the existence of proven and probable reserves. At our surface mines, these costs include costs to further delineate the ore body and remove overburden to initially expose the ore body. At our underground mines, these costs include the cost of building access ways, shaft sinking and access, lateral development, drift development, ramps and infrastructure development. All such costs are amortized using the units-of-production (“UOP”) method over the estimated life of the ore body based on estimated recoverable ounces to be produced from proven and probable reserves.
 
Major development costs incurred after the commencement of production are amortized using the UOP method based on estimated recoverable ounces to be produced from proven and probable reserves. To the extent that such costs benefit the entire ore body, they are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of the entire ore body. Costs incurred to access specific ore blocks or areas that only provide benefit over the life of that block or area are amortized over the estimated recoverable ounces or pounds in proven and probable reserves of that specific ore block or area.
 
The calculation of the UOP rate of amortization, and therefore the annual amortization charge to operations, could be materially impacted to the extent that actual production in the future is different from current forecasts of production based on proven and probable reserves. This would generally occur to the extent that there were significant changes in any of the factors or assumptions used in


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determining reserves. These changes could include: (i) an expansion of proven and probable reserves through exploration activities; (ii) differences between estimated and actual costs of production, due to differences in grade, metal recovery rates and foreign currency exchange rates; and (iii) differences between actual commodity prices and commodity price assumptions used in the estimation of reserves. If reserves decreased significantly, amortization charged to operations would increase; conversely, if reserves increased significantly, amortization charged to operations would decrease. Such changes in reserves could similarly impact the useful lives of assets depreciated on a straight-line basis, where those lives are limited to the life of the mine, which in turn is limited to the life of the proven and probable reserves.
 
The expected useful lives used in amortization calculations are determined based on applicable facts and circumstances, as described above. Significant judgment is involved in the determination of useful lives, and no assurance can be given that actual useful lives will not differ significantly from the useful lives assumed for the purpose of amortization calculations.
 
Carrying Value of Stockpiles
 
Stockpiles represent ore that has been extracted from the mine and is available for further processing. Stockpiles are measured by estimating the number of tons added and removed from the stockpile, the number of contained ounces or pounds (based on assay data), and the estimated metallurgical recovery rates (based on the expected processing method). Stockpile ore tonnages are verified by periodic surveys. Costs are allocated to stockpiles based on relative values of material stockpiled and processed using current mining costs incurred up to the point of stockpiling the ore, including applicable overhead and amortization relating to mining operations. Costs are added to a stockpile based on current mining costs and removed at each stockpile’s average cost per recoverable ounce of gold or pound of copper in the stockpile. Stockpiles are reduced as material is removed and processed further. At December 31, 2009 and 2008, our stockpiles had a total carrying value of $1,387 (Batu Hijau, $834; Nevada, $269; Other Australia/New Zealand, $121; Boddington, $59; others, $104) and $990 (Batu Hijau, $612; Nevada, $214; Other Australia/New Zealand, $95; others, $69), respectively.
 
Costs that are incurred in or benefit from the productive process are accumulated as stockpiles. We record stockpiles at the lower of average cost or net realizable value (“NRV”), and carrying values are evaluated at least quarterly. NRV represents the estimated future sales price based on short-term and long-term metals prices, less estimated costs to complete production and bring the product to sale. The primary factors that influence the need to record write-downs of stockpiles include short-term and long-term metals prices and costs for production inputs such as labor, fuel and energy, materials and supplies, as well as realized ore grades and actual production levels. The significant assumptions in determining the NRV for each mine site reporting unit at December 31, 2009 included production cost and capitalized expenditure assumptions unique to each operation, a long-term gold price of $900 per ounce, a long-term copper price of $2.50 per pound and U.S. to Australian dollar exchange rate of $0.80 per A$1.00. If short-term and long-term metals prices decrease, the value of the stockpiles decrease, and it may be necessary to record a write-down of stockpiles to NRV. During 2009, 2008 and 2007, write-downs of stockpiles to NRV totaled $nil, $2 and $14, respectively.
 
Cost allocation to stockpiles and the NRV measurement involves the use of estimates and assumptions unique to each mining operation regarding current and future operating and capital costs, metal recoveries, production levels, commodity prices, proven and probable reserve quantities, engineering data and other factors. A high degree of judgment is involved in determining such assumptions and estimates and no assurance can be given that actual results will not differ significantly from those estimates and assumptions.


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Carrying Value of Ore on Leach Pads
 
Ore on leach pads represent ore that has been mined and placed on leach pads where a weak cyanide solution is applied to the surface of the heap to dissolve the gold. Costs are added to ore on leach pads based on current mining costs, including applicable amortization relating to mining operations. Costs are removed from ore on leach pads as ounces are recovered based on the average cost per estimated recoverable ounce of gold on the leach pad.
 
Estimates of recoverable gold on the leach pads are calculated from the quantities of ore placed on the leach pads (measured tons added to the leach pads), the grade of ore placed on the leach pads (based on assay data) and a recovery percentage (based on ore type). In general, leach pads recover between 50% and 95% of the recoverable ounces in the first year of leaching, declining each year thereafter until the leaching process is complete.
 
Although the quantities of recoverable gold placed on the leach pads are reconciled by comparing the grades of ore placed on pads to the quantities of gold actually recovered (metallurgical balancing), the nature of the leaching process inherently limits the ability to precisely monitor inventory levels. As a result, the metallurgical balancing process is constantly monitored and estimates are refined based on actual results over time. Historically, our operating results have not been materially impacted by variations between the estimated and actual recoverable quantities of gold on its leach pads. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to NRV are accounted for on a prospective basis. The significant assumptions in determining the NRV for each mine site reporting unit at December 31, 2009 apart from production cost and capitalized expenditure assumptions unique to each operation, included a long-term gold price of $900 per ounce. If short-term and long-term metals prices decrease, the value of the ore on leach pads decrease, and it may be necessary to record a write-down of ore on leach pads to NRV.
 
Carrying Value of Long-Lived Assets
 
We review and evaluate our long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An asset impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the asset, including goodwill, if any. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on estimated quantities of recoverable minerals, expected gold and other commodity prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The significant assumptions in determining the NRV for each mine site reporting unit at December 31, 2009 apart from production cost and capitalized expenditure assumptions unique to each operation, included a long-term gold price of $900 per ounce, a long-term copper price of $2.50 per pound and U.S. to Australian dollar exchange rate of $0.80 per A$1.00. During 2009, 2008 and 2007, we recorded write-downs of $7, $137 and $10, respectively, to reduce the carrying value of property, plant and mine development.
 
Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other than proven and probable reserves and other material that is not part of the measured, indicated or inferred resource base, are included when determining the fair value of mine site reporting units at acquisition and, subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount of gold or other commodities that will be obtained after taking into account losses during ore processing and treatment. Estimates of recoverable minerals from such exploration stage mineral interests are risk adjusted based on management’s relative confidence in such materials. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups.


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As discussed above under Amortization, various factors could impact our ability to achieve our forecasted production schedules from proven and probable reserves. Additionally, production, capital and reclamation costs could differ from the assumptions used in the cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.
 
Derivative Instruments
 
With the exception of the Call Spread Transactions (as described in Note 12 to the Consolidated Financial Statements), all financial instruments that meet the definition of a derivative are recorded on the balance sheet at fair market value. Changes in the fair market value of derivatives are recorded in the statements of consolidated income (loss), except for the effective portion of the change in fair market value of derivatives that are designated as a cash flow hedge and qualify for cash flow hedge accounting. Management applies significant judgment in estimating the fair value of instruments that are highly sensitive to assumptions regarding commodity prices, market volatilities, foreign currency exchange rates and interest rates. Variations in these factors could materially affect amounts credited or charged to earnings to reflect the changes in fair market value of derivatives. Certain derivative contracts are accounted for as cash flow hedges, whereby the effective portion of changes in fair market value of these instruments are deferred in Accumulated other comprehensive income (loss) and will be recognized in the statements of consolidated income (loss) when the underlying transaction designated as the hedged item impacts earnings. The derivative contracts accounted for as cash flow hedges are designated against future foreign currency expenditures or future diesel expenditures, where management believes the forecasted transaction is probable of occurring. To the extent that management determines that such future foreign currency or diesel expenditures are no longer probable of occurring, gains and losses deferred in Accumulated other comprehensive income (loss) would be reclassified to the statements of consolidated income (loss) immediately.
 
Reclamation and Remediation Obligations (Asset Retirement Obligations)
 
Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and remediation costs. The asset retirement obligation is based on when the spending for an existing environmental disturbance will occur. We review, on at least an annual basis, the asset retirement obligation at each mine site in accordance with guidance for accounting for asset retirement obligations.
 
Future remediation costs for inactive mines are accrued based on management’s best estimate of the costs expected to be incurred at a site. Such cost estimates include, where applicable, ongoing care, maintenance and monitoring costs. Changes in estimates at inactive mines are reflected in earnings in the period an estimate is revised.
 
Accounting for reclamation and remediation obligations requires management to make estimates unique to each mining operation of the future costs we will incur to complete the reclamation and remediation work required to comply with existing laws and regulations. Actual costs incurred in future periods could differ from amounts estimated. Additionally, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required. Any such increases in future costs could materially impact the amounts charged to earnings for reclamation and remediation.


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Income and Mining Taxes
 
We recognize the expected future tax benefit from deferred tax assets when the tax benefit is considered to be more likely than not of being realized. Assessing the recoverability of deferred tax assets requires management to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecasted cash flows and the application of existing tax laws in each jurisdiction. Refer above under Carrying Value of Long-Lived Assets for a discussion of the factors that could cause future cash flows to differ from estimates. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize deferred tax assets recorded at the balance sheet date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which we operate could limit our ability to obtain the future tax benefits represented by our deferred tax assets recorded at the reporting date.
 
Our operations involve dealing with uncertainties and judgments in the application of complex tax regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. At January 1, 2007, we adopted income tax guidance to record these liabilities (refer to Note 8 of the Consolidated Financial Statements for additional information). We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If an estimate of tax liabilities proves to be greater than the ultimate assessment, a tax benefit would result. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense.


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Consolidated Financial Results
 
Sales — gold, net for 2009 increased $1,014 compared to 2008 due to a $103 per ounce increase in the average realized price after treatment and refining charges and 384,000 additional ounces sold. Sales — gold, net for 2008 increased $1,128 compared to 2007 due to a $177 per ounce increase in the average realized price after treatment and refining charges and 59,000 additional ounces sold. For a complete discussion regarding variations in gold volumes, see Results of Consolidated Operations below.
 
The following analysis summarizes the changes in consolidated gold sales:
 
                         
    Years Ended December 31,  
    2009     2008     2007  
 
Consolidated gold sales:
                       
Gross before provisional pricing
  $ 6,397     $ 5,387     $ 4,258  
Provisional pricing mark-to-market
    15       (2 )     13  
                         
Gross after provisional pricing
    6,412       5,385       4,271  
Less: Treatment and refining charges
    (26 )     (13 )     (27 )
                         
Net
  $ 6,386     $ 5,372     $ 4,244  
                         
Consolidated gold ounces sold (thousands):
                       
Gross
    6,543       6,170       6,097  
Less: Incremental start-up sales(1)
    (9 )     (20 )     (6 )
                         
Net
    6,534       6,150       6,091  
                         
Average realized gold price per ounce:
                       
Gross before provisional pricing
  $ 979     $ 876     $ 699  
Provisional pricing mark-to-market
    2             2  
                         
Gross after provisional pricing
    981       876       701  
Less: Treatment and refining charges
    (4 )     (2 )     (4 )
                         
Net
  $ 977     $ 874     $ 697  
                         
 
The change in consolidated gold sales is due to:
 
                 
    2009 vs.
    2008 vs.
 
    2008     2007  
 
Increase in consolidated ounces sold
  $ 337     $ 41  
Increase in average realized gold price
    690       1,073  
Decrease (increase) in treatment and refining charges
    (13 )     14  
                 
    $ 1,014     $ 1,128  
                 
 
 
(1) Incremental start-up includes the removal and production of de minimis saleable materials during development and is recorded as Other income, net of incremental mining and processing costs.
 
Sales — copper, net increased in 2009 compared to 2008 due to 217 million additional pounds sold. Sales — copper, net decreased in 2008 compared to 2007 due to 138 million fewer pounds sold and lower realized prices. For a complete discussion regarding variations in copper volumes, see Results of Consolidated Operations below.


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The following analysis reflects the changes in consolidated copper sales:
 
                         
    Years Ended December 31,  
    2009     2008     2007  
 
Consolidated copper sales:
                       
Gross before provisional pricing
  $ 1,283     $ 878     $ 1,409  
Provisional pricing mark-to-market
    173       (47 )     (34 )
Hedging losses
                (1 )
                         
Gross after provisional pricing
    1,456       831       1,374  
Less: Treatment and refining charges
    (137 )     (79 )     (153 )
                         
Net
  $ 1,319     $ 752     $ 1,221  
                         
Consolidated copper pounds sold (millions)
    507       290       428  
Average realized price per pound:
                       
Gross before provisional pricing
  $ 2.53     $ 3.03     $ 3.30  
Provisional pricing mark-to-market
    0.33       (0.16 )     (0.09 )
                         
Gross after provisional pricing
    2.86       2.87       3.21  
Less: Treatment and refining charges
    (0.26 )     (0.28 )     (0.35 )
                         
Net
  $ 2.60     $ 2.59     $ 2.86  
                         
 
The change in consolidated copper sales is due to:
 
                 
    2009 vs.
    2008 vs.
 
    2008     2007  
 
Increase (decrease) in consolidated pounds sold
  $ 623     $ (443 )
Increase (decrease) in average realized copper price
    2       (100 )
Decrease (increase) in treatment and refining charges
    (58 )     74  
                 
    $ 567     $ (469 )
                 


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The following is a summary of consolidated gold and copper sales, net:
 
                         
    Years Ended December 31,  
    2009     2008     2007  
 
Gold
                       
North America:
                       
Nevada
  $ 1,943     $ 1,929     $ 1,616  
La Herradura
    113       83       60  
Other North America
                8  
                         
      2,056       2,012       1,684  
South America:
                       
Yanacocha
    2,013       1,613       1,093  
Asia Pacific:
                       
Batu Hijau
    550       261       351  
Jundee
    413       342       214  
Kalgoorlie
    329       264       224  
Tanami
    280       321       305  
Waihi
    116       123       66  
Boddington
    101              
                         
      1,789       1,311       1,160  
Africa:
                       
Ahafo
    528       435       306  
Corporate and other
          1       1  
                         
    $ 6,386     $ 5,372     $ 4,244  
                         
Copper
                       
Asia Pacific:
                       
Batu Hijau
  $ 1,292     $ 752     $ 1,221  
Boddington
    27              
                         
    $ 1,319     $ 752     $ 1,221  
                         
 
Costs applicable to sales — gold increased in 2009 compared to 2008 due to higher sales volumes, higher royalty and workers participation expenses, partially offset by higher by-product sales and lower diesel costs. The increase in 2008 compared to 2007 was due to higher diesel costs and higher royalty and workers participation expenses, partially offset by lower waste removal costs at Batu Hijau and higher by-product sales. Costs applicable to sales — copper decreased in 2009 from 2008 due to lower diesel and mining costs, partially offset by higher labor costs and the start-up of Boddington production. The decrease in 2008 from 2007 was due to lower waste removal costs, partially offset by higher diesel, labor and milling costs. For a complete discussion regarding variations in operations, see Results of Consolidated Operations below.
 
Amortization increased in 2009 from 2008 due to the start-up of Boddington, higher underground production at Nevada and Jundee, development of North Lantern in Nevada, a full year’s amortization of Hope Bay infrastructure and higher production at Batu Hijau. Amortization increased in 2008 from 2007 due to increased production at Jundee, Waihi and Ahafo, a larger portion of Nevada production being sourced from the Phoenix and Leeville operations and the start-up of the gold mill at Yanacocha and the power plant in Nevada. Amortization expense fluctuates as capital expenditures increase or decrease and as production levels increase or decrease due to the use of the units-of production amortization method for mineral interests and mine development. For a complete discussion, see


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Results of Consolidated Operations, below. We expect Amortization to increase to approximately $940 to $970 in 2010.
 
The following is a summary of Costs applicable to sales and Amortization by operation:
 
                                                 
    Costs Applicable to Sales     Amortization  
    Years Ended December 31,     Years Ended December 31,  
    2009     2008     2007     2009     2008     2007  
 
Gold
                                               
North America:
                                               
Nevada
  $ 1,045     $ 1,022     $ 1,021     $ 261     $ 246     $ 220  
La Herradura
    42       38       29       11       8       7  
Other North America
                2                    
                                                 
      1,087       1,060       1,052       272       254       227  
South America:
                                               
Yanacocha
    642       637       490       168       170       160  
Asia Pacific:
                                               
Batu Hijau
    118       124       114       30       25       25  
Jundee
    136       149       138       49       34       26  
Kalgoorlie
    210       231       191       15       16       24  
Tanami
    189       220       181       47       39       37  
Waihi
    57       55       42       25       33       22  
Boddington
    45                   15              
                                                 
      755   &nb