10-K 1 d79003e10vk.htm FORM 10-K e10vk
Table of Contents

 
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, 2010
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 LOGO)
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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  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, 2010, the aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates of the registrant was $30,366,217,467 based on the closing sale price as reported on the New York Stock Exchange. There were 486,564,649 shares of common stock outstanding (and 6,703,999 exchangeable shares exchangeable into Newmont Mining Corporation common stock on a one-for-one basis) on February 18, 2011.
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Portions of Registrant’s definitive Proxy Statement submitted to the Registrant’s stockholders in connection with our 2011 Annual Stockholders Meeting to be held on April 19, 2011, 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.      1  
    Products     2  
    Hedging Activities     4  
    Gold and Copper Reserves     4  
    Licenses and Concessions     6  
    Condition of Physical Assets and Insurance     7  
    Environmental Matters     7  
    Employees and Contractors     8  
    Forward-Looking Statements     8  
    Available Information     9  
  RISK FACTORS     9  
  PROPERTIES     23  
    Production and Development Properties     23  
    Operating Statistics     29  
    Proven and Probable Reserves     31  
  LEGAL PROCEEDINGS     37  
  EXECUTIVE OFFICERS OF THE REGISTRANT     37  
 
PART II
  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     50  
    Results of Consolidated Operations     57  
    Liquidity and Capital Resources     64  
    Environmental     71  
    Forward Looking Statements     72  
    Non-GAAP Financial Measures     72  
  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK     73  
    Metal Price     73  
    Foreign Currency     73  
    Hedging     74  
    Fixed and Variable Rate Debt     76  


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        Page
 
  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA     77  
  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE     153  
  CONTROLS AND PROCEDURES     153  
  OTHER INFORMATION     153  
 
PART III
  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE     154  
  EXECUTIVE COMPENSATION     154  
  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS     154  
  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE     155  
  PRINCIPAL ACCOUNTING FEES AND SERVICES     155  
 
PART IV
  EXHIBITS, FINANCIAL STATEMENT SCHEDULES     156  
    S-1  
EXHIBIT INDEX
    E-1  
 EX-12.1
 EX-21
 EX-23.1
 EX-24
 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2
 EX-99.1
 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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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, 2010, Newmont had proven and probable gold reserves of 93.5 million ounces and an aggregate land position of approximately 27,500 square miles (71,100 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. 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.
 
Newmont’s Sales and long-lived assets are geographically distributed as follows:
 
                                                 
    Sales     Long-Lived Assets  
    2010     2009     2008     2010     2009     2008  
 
Indonesia
    26 %     24 %     17 %     14 %     14 %     17 %
Australia/New Zealand
    24 %     16 %     17 %     33 %     33 %     20 %
United States
    22 %     25 %     32 %     20 %     21 %     26 %
Peru
    19 %     26 %     26 %     11 %     10 %     13 %
Ghana
    7 %     7 %     7 %     8 %     8 %     9 %
Mexico
    2 %     2 %     1 %     1 %     1 %     1 %
Canada
    %     %     %     13 %     13 %     14 %
 
On February 3, 2011, Newmont and Fronteer Gold Inc. (“Fronteer”) announced that they entered into an agreement under which Newmont will acquire all of the outstanding common shares of Fronteer by way of a Plan of Arrangement (“Arrangement”). Under the Arrangement, shareholders of Fronteer will receive C$14.00 in cash and one common share in Pilot Gold Inc., a Canadian corporation, which will retain certain exploration assets of Fronteer, for each common share of Fronteer. The Arrangement will be subject to approval by at least 66% of the votes cast at a special meeting of Fronteer’s shareholders, expected to be held in April 2011, and the subsequent approval of the Ontario Superior Court of Justice. The agreement also contains certain termination rights for both Newmont and Fronteer including a break fee of C$85 payable by Fronteer, if the transaction is not completed in certain specified circumstances. The transaction is expected to close in the second quarter of 2011 for approximately C$2,300. Fronteer owns, among other assets, the exploration stage Long Canyon project, which is located approximately one hundred miles from the Company’s existing infrastructure in Nevada and provides the potential for significant development and operating synergies.
 
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 in the United States, 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 Boddington in Australia, Batu Hijau in Indonesia and other smaller operations in Australia and New Zealand. Our Africa segment consists primarily of Ahafo and Akyem in Ghana. See Item 1A, Risk Factors, below and Note 3 to the Consolidated


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Financial Statements for information relating to our operating segments, domestic and export sales, and lack of dependence on a limited number of customers.
 
Products
 
References in this report to attributable gold ounces or attributable copper pounds mean that portion of gold or copper produced, sold or included in proven and probable reserves based on our ownership and/or economic interest, unless otherwise noted.
 
Gold
 
General.  We had consolidated gold production of 6.5 million ounces (5.4 million ounces attributable to Newmont) in 2010, 6.5 million ounces (5.2 million ounces) in 2009 and 6.2 million ounces (5.2 million ounces) in 2008. Of our 2010 consolidated gold production, approximately 30% came from North America, 23% from South America, 39% from Asia Pacific and 8% from Africa.
 
For 2010, 2009 and 2008, 81%, 83% and 88%, respectively, of our Sales were attributable to gold. Most of our Sales 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 2008 through 2010, on average, current mine production has accounted for approximately 61% of the annual gold supply.
 
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
 
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
  $ 1,421     $ 1,058     $ 1,225  
2011 (through February 18, 2011)
  $ 1,389     $ 1,319     $ 1,357  
 
 
Source: Kitco, Reuters and the London Bullion Market Association


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On February 18, 2011, the afternoon fixing gold price on the London Bullion Market was $1,384 per ounce and the spot market gold price on the New York Commodity Exchange was $1,388 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 production of 600 million pounds (327 million pounds attributable to Newmont) in 2010, 504 million pounds (227 million pounds) in 2009 and 285 million pounds (128 million pounds) in 2008. Copper production is in the form of saleable concentrate that is sold to smelters for further treatment and refining. For 2010, 2009 and 2008, 19%, 17% and 12%, respectively, of our Sales were attributable to copper.
 
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.
 
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
 
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
  $ 4.38     $ 2.75     $ 3.43  
2011 (through February 18, 2011)
  $ 4.62     $ 4.20     $ 4.41  
 
 
Source: London Metal Exchange
 
On February 18, 2011, the high grade copper closing price on the London Metal Exchange was $4.48 per pound.
 
We generally sell our copper based on the monthly average market price for the third month following the month in which the delivery to the customer takes place. We recognize revenue from a sale when the price is determinable, the concentrate has been loaded on a vessel, the title has been transferred and collection of the sales price is reasonably assured. For revenue recognition, we use a provisional price based on the average prevailing market price during the two week period prior to


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completion of vessel loading. The copper concentrate is marked to market through earnings until final settlement.
 
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 successive stages of flotation, resulting in a concentrate containing approximately 26% to 31% 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.
 
Hedging Activities
 
Our strategy is to provide shareholders with leverage to changes in gold and copper prices by selling our gold and copper at current market prices and consequently, we do not hedge our gold and copper sales. We continue to manage certain 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 17 to the Consolidated Financial Statements.
 
Gold and Copper Reserves
 
At December 31, 2010 we had 93.5 million ounces of proven and probable gold reserves attributable to Newmont. We added 8.2 million ounces to proven and probable reserves, and depleted


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6.5 million ounces during 2010. We also added 0.3 million ounces to proven and probable reserves through acquisitions and divested 0.3 million ounces. 2010 reserves were calculated at a gold price assumption of $950, A$1,100 or NZ$1,350 per ounce, respectively. A reconciliation of the changes in proven and probable gold reserves during the past three years follows:
 
                         
    2010     2009     2008  
    (millions of ounces)  
 
Opening balance
    91.8       85.0       86.5  
Depletion
    (6.5 )     (6.8 )     (6.7 )
Additions(1)
    8.2       6.4       5.2  
Acquisitions(2)
    0.3       8.2        
Other divestments(3)
    (0.3 )     (1.0 )      
                         
Closing balance
    93.5       91.8       85.0  
                         
 
A reconciliation of the changes in proven and probable gold reserves for 2010 by region is as follows:
 
                                 
    North
    South
    Asia
       
    America     America     Pacific     Africa  
    (millions of ounces)  
 
Opening balance
    30.3       11.8       32.9       16.8  
Depletion
    (2.3 )     (1.0 )     (2.5 )     (0.7 )
Additions
    5.5       0.6       1.0       1.1  
Acquisitions(2)
                0.3        
Other divestments(3)
                (0.3 )      
                                 
Closing balance
    33.5       11.4       31.4       17.2  
                                 
 
 
(1) The impact of the change in gold price assumption on reserve additions was approximately 1.7 million, 1.7 million and 1.9 million ounces in 2010, 2009 and 2008, respectively. The gold price assumption was $950 per ounce in 2010, $800 per ounce in 2009, $725 per ounce in 2008 and $575 per ounce in 2007.
 
(2) In 2010, we recognized our attributable interest in Regis Resources Ltd and their reserves in the Duketon belt of Western Australia for an attributable reserve of 0.3 million ounces. In 2009, reserves were increased by 6.7 million ounces through the acquisition of the remaining 33.33% interest in Boddington. At December 31, 2009, our economic interest in Batu Hijau increased to 52.44% as a result of transactions with a noncontrolling partner, increasing reserves by 1.5 million ounces.
 
(3) In April 2010, our direct ownership interest in Batu Hijau decreased from 35.44% to 31.5% (economic interest decreased from 52.44% to 48.50%) as a result of the divestiture required under the Contract of Work. In November and December 2009, our direct ownership interest 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, 2010 we had 9,420 million pounds of proven and probable copper reserves. We added 1,000 million pounds to proven and probable reserves, depleted 370 million pounds and divested 330 million pounds during 2010. 2010 reserves were calculated at a copper price of $2.50 or


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A$2.95 per pound. A reconciliation of the changes in proven and probable copper reserves during the past three years is as follows:
 
                         
    2010     2009     2008  
    (millions of pounds)  
 
Opening balance
    9,120       7,780       7,550  
Depletion
    (370 )     (310 )     (210 )
Additions(1)
    1,000       400       440  
Acquisitions(2)
          2,040        
Other divestments(3)
    (330 )     (790 )      
                         
Closing balance
    9,420       9,120       7,780  
                         
 
A reconciliation of changes in proven and probable copper reserves for 2010 by region is as follows:
 
                         
    North
    South
    Asia
 
    America     America     Pacific  
    (millions of pounds)  
 
Opening balance
    900       1,660       6,560  
Depletion
    (20 )           (350 )
Additions
    760             240  
Acquisitions
                 
Other divestments(3)
                (330 )
                         
Closing balance
    1,640       1,660       6,120  
                         
 
 
(1) The impact of the change in copper price assumption on reserve additions was 150 million, 290 million and 300 million pounds in 2010, 2009 and 2008, respectively. The copper price assumption was $2.50 per pound in 2010, $2.00 per pound in 2009, $2.00 per pound in 2008 and $1.75 per pound in 2007.
 
(2) In 2009, reserves were increased by 640 million pounds through the acquisition of the remaining 33.33% interest in Boddington. At December 31, 2009, our economic interest in Batu Hijau increased to 52.44% as a result of transactions with a noncontrolling partner, increasing reserves by 1,400 million pounds.
 
(3) In April 2010, our direct ownership interest in Batu Hijau decreased from 35.44% to 31.5% (economic interest decreased from 52.44% to 48.50%) as a result of the divestiture required under the Contract of Work. In November and December 2009, our direct ownership interest 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. Our Exploration expense was $218, $187 and $213 in 2010, 2009 and 2008, respectively.
 
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


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government. These countries include, among others, Australia, Canada, Ghana, Indonesia, Mexico, New Zealand, Peru and Suriname. The concessions and contracts are subject to the political risks associated with foreign operations. See Item 1A, Risk Factors, 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, below.
 
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. At December 31, 2010, $904 was accrued for reclamation costs relating to current or recently producing properties.
 
We are 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. Based upon our best estimate of our liability for these matters, $144 was accrued at December 31, 2010 for such obligations associated with properties previously owned or operated by us or our subsidiaries. The amounts accrued for these matters are reviewed periodically based upon facts and circumstances available at the time.
 
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 4 and 31 to the Consolidated Financial Statements, below.
 
In addition to legal and regulatory compliance, we have developed complimentary 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 reducing 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 (“DJSI”), remaining a member of the DJSI for four consecutive years, and


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receiving International Cyanide Management Code certification at 100% of registered Newmont sites as of the end of 2009.
 
Employees and Contractors
 
Approximately 15,500 people were employed by Newmont at December 31, 2010. In addition, approximately 18,800 people were working as contractors in support of Newmont’s operations.
 
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 may include, without limitation:
 
  •  Estimates regarding future earnings;
 
  •  Estimates of future mineral production and sales, for specific operations and attributable to Newmont;
 
  •  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.


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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 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 Relations 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. Certain other information, including 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 position 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 prices of gold and copper, which fluctuate on a daily basis and 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;
 
  •  expectations of the future rate of inflation;
 
  •  interest rates;


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  •  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 gold or copper. We have recorded asset write-downs in the past and may experience additional write-downs as a result of lower 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 prevailing gold or copper prices;
 
  •  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. Even if significant mineralization is discovered, it will likely take many years from the initial phases of exploration until commencement of 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 or copper 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.


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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 position.
 
Estimates of proven and probable reserves and non reserve mineralization are uncertain and the volume and grade of ore actually recovered may vary from our estimates.
 
The reserves stated in this report represent the amount of gold and copper that we estimated, at December 31, 2010 and 2009, could be economically and legally extracted or produced at the time of the reserve determination. Estimates of proven and probable reserves are subject to considerable uncertainty. Such estimates are, to a large extent, based on the prices of gold and copper 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 phases of exploration until commencement of production, during which time, the economic feasibility of production 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 position 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 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 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 operations and economic returns anticipated from new 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. Such projects could experience unexpected problems and delays during development, construction and mine start-up.


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Our decision to develop a project is typically based on the results of feasibility studies, 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:
 
  •  changes in tonnage, grades and metallurgical characteristics of ore to be mined and processed;
 
  •  higher input commodity and labor costs;
 
  •  the quality of the data on which engineering assumptions were made;
 
  •  adverse geotechnical conditions;
 
  •  availability of adequate labor force and supply and cost of water and power;
 
  •  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;
 
  •  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 position.
 
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, milling equipment and conveyor systems;
 
  •  underground fires or floods;
 
  •  unexpected geological formations or conditions (whether in mineral or gaseous form);
 
  •  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 lightning, cyclonic or tropical storms, floods or other inclement weather conditions.
 
The occurrence of one or more of these events in connection with our exploration activities and development and production of mining operations may result in the death of, or personal injury to, our employees, other personnel or third parties, 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 reputation, business, prospects, results of operations and financial position.


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Shortages of critical parts, equipment and skilled labor may adversely affect our operations and development projects.
 
The mining 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, impacted the efficiency of our operations, and resulted in cost increases and delays in construction of projects; thereby impacting operating costs, capital expenditures and production and construction schedules.
 
Mining companies are increasingly required to consider and provide benefits to the communities and countries in which they operate, and are subject to extensive environmental, health and safety laws and regulations.
 
As a result of public concern about the real or perceived detrimental effects of economic globalization and global climate impacts, businesses generally and large multinational corporations in natural resources industries, such as Newmont, in particular, face increasing public scrutiny of their activities. These businesses are under pressure to demonstrate that, as they seek to generate satisfactory returns on investment to shareholders, other stakeholders, including employees, governments, communities surrounding operations and the countries in which they operate, benefit and will continue to benefit from their commercial activities. Such pressures tend to be particularly focused on companies whose activities are perceived to have a high impact on their social and physical environment. The potential consequences of these pressures include reputational damage, legal suits and social investment obligations.
 
In addition, our ability to successfully obtain key permits and approvals to explore for, develop and operate mines and to successfully operate 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 creation of social and economic benefits in the surrounding communities. Our ability to obtain permits and approvals and to successfully operate in particular communities may be adversely impacted by real or perceived detrimental events associated with our activities or those of other mining companies affecting the environment, human health and safety of communities in which we operate. Delays in obtaining or failure to obtain government permits and approvals may adversely affect our operations, including our ability to explore or develop properties, commence production or continue operations. Key permits and approvals may be revoked or suspended or may be varied in a manner that adversely affects our operations, including our ability to explore or develop properties, commence production or continue operations.
 
Our exploration, development, mining and processing operations are subject to extensive laws and regulations governing worker health and safety and the protection of the environment, which generally apply to air and water quality, protection of protected species, hazardous waste management and reclamation. We have made, and expect to make in the future, significant expenditures to comply with such laws and regulations. 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.
 
Future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could substantially increase costs to achieve compliance, lead to the revocation of existing or future exploration or mining rights or otherwise have an adverse impact on our results of operations and financial position. For instance, the operation of our mines in the United States is subject to regulation by the Federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA inspects our mines on a regular basis and issues various citations and orders when it believes a violation has occurred under the Mine Act. If such inspections result in an alleged violation, we may be subject to fines, penalties or sanctions and our mining operations could be subject to temporary or extended closures, which could have an adverse effect on our results of operations and financial position. Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the


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numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued has also increased in recent years.
 
In addition, the United States Environmental Protection Agency (“EPA”) is currently seeking to regulate as hazardous waste under the Resource Conservation and Recovery Act (“RCRA”) secondary streams derived from core beneficiation operations, such as our roasting operations, in Nevada. Historically, such streams have been considered exempt from RCRA and have been regulated by the Nevada Division of Environmental Protection. The regulation of these streams as hazardous waste under RCRA could subject us to civil and criminal penalties for past practices and require us to incur substantial future costs to modify our waste water collection systems and retrofit our tailings storage facilities at our Nevada mining operations, which could have an adverse effect on our results of operations and financial position.
 
Increased global attention or regulation on water quality discharge, such as recently enacted water quality legislation applicable to our operations in Peru, and on restricting or prohibiting the use of cyanide and other hazardous substances in processing activities could similarly have an adverse impact on our results of operations and financial position due to increased compliance and input costs.
 
We have implemented a management system 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 position, 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.
 
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. For example, 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.
 
Any underestimated or unanticipated rehabilitation costs could materially affect our financial position, results of operations and cash flows. Environmental liabilities are accrued when they become known, are 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 attributable to Newmont stockholders in the related period. In addition, regulators are increasingly requesting security in the form of cash collateral, credit, trust arrangements or guarantees to secure the performance of environmental obligations, which could have an adverse effect on our financial position. For a more detailed discussion of potential environmental liabilities, see the discussion in Environmental Matters, Note 31 to the Consolidated Financial Statements.
 
The laws and regulations governing mine closure and remediation in a particular jurisdiction are subject to review at any time and may be amended to impose additional requirements and conditions which may cause our provisions for environmental liabilities to be underestimated and could materially affect our financial position or results of operations.


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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.
 
Energy is a significant input to our mining operations, with our principal energy sources being electricity, purchased petroleum products, natural gas and coal.
 
A number of governments or governmental bodies have introduced or are contemplating regulatory changes in response to the potential impacts of climate change that are viewed as the result of emissions from the combustion of carbon-based fuels. 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 emissions targets for 2020. Prior to the January 31, 2010 deadline, the United States, Australia, New Zealand, 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 United States to address the concerns raised by such endangerment finding. Additionally, the Australian Government may introduce legislation authorizing a national emissions trading scheme and mandatory renewable energy targets.
 
Legislation and increased regulation regarding climate change could impose increased 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. Until the timing, scope and extent of any future regulation becomes known, we cannot predict the effect on our financial condition, financial position, results of operations and ability to compete.
 
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 are subject to risks of doing business.
 
Exploration, development, production and mine closure activities are subject to political, economic and other risks of doing business, 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, including retroactive increases and claims and requests to renegotiate terms of existing royalties and taxes, by governmental entities, including such increases, claims and/or requests by the governments of Ghana, Indonesia, Australia, Peru, the United States and the State of Nevada;
 
  •  increases in training and other costs and challenges relating to requirements by governmental entities to employ the nationals of the country in which a particular operation is located;
 
  •  delays in obtaining or renewing, or the inability to obtain, maintain or renew, necessary governmental permits and approvals;


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  •  claims for increased mineral royalties or ownership interests by local or indigenous communities;
 
  •  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;
 
  •  increases in costs relating to, or restrictions or prohibitions on, the use of ports for concentrate storage and shipping, particularly in relation to our Boddington and Batu Hijau operations where use of alternative ports is not currently economically feasible;
 
  •  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 criminal activities such as trespass, illegal mining, theft and vandalism;
 
  •  risk of loss due to disease and other potential endemic health issues;
 
  •  disadvantages relating to submission to the jurisdiction of foreign courts or arbitration panels or enforcement or appeals of judgments at foreign courts or arbitration panels against a sovereign nation within its own territory; 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.
 
Consequently, our exploration, development and production activities 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.
 
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.
 
Presidential and parliamentary elections took place in July 2009, 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, and our assets and operations in particular, and may have a preference for national mining companies to own Indonesia’s mineral assets.
 
Violence committed by radical elements in Indonesia and other countries, and the presence or increase 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.


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Our Batu Hijau operation in Indonesia may be adversely affected by a delay in receiving certain permit renewals.
 
Over the years, we are required to apply for renewals of certain key permits related to Batu Hijau. PTNNT, the entity operating Batu Hijau, employs a submarine tailings disposal (“STD”) system. The STD system is operated pursuant to a permit from the government of Indonesia that is up for renewal in May 2011, and is a key requirement to continue normal operations at Batu Hijau. A delay or failure to receive a STD permit renewal could adversely impact Batu Hijau operations and may adversely impact our future operating and financial results.
 
Our ownership interest in Batu Hijau has been reduced in accordance with the Contract of Work issued by the Indonesian Government and future reductions in our interest in PTNNT may result in our loss of control over the Batu Hijau operations.
 
We operate Batu Hijau and currently have a 31.5% direct 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%. 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 certain voting rights and obligations to the Company. On June 25, 2010, PTPI completed the sale of approximately a 2.2% interest in PTNNT to PT Indonesia Masbaga Investama (“PTIMI”) and the Company entered into a transaction with PTIMI, whereby we agreed to advance certain funds to PTIMI in exchange for a pledge of PTIMI’s 2.2% share of PTNNT dividends, net of withholding tax, and the assignment of certain voting rights and obligations to the Company. Based on the above transactions, the Company recognized an additional 17% effective economic interest in PTNNT. Combined with the Company’s 56.25% ownership in NTP, Newmont has a 48.5% effective economic interest in PTNNT and continues to consolidate Batu Hijau in its Consolidated Financial Statements.
 
Under the Contract of Work executed in 1986 between the Indonesian government and PTNNT, 51% of PTNNT’s shares must be offered for sale, first, to the Indonesian government or, second, to Indonesian nationals by March 31, 2010. Pursuant to this divestiture provision, the ownership interest in the Batu Hijau mine’s production, assets and 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. Loss of control over PTNNT operations may result in our deconsolidation of PTNNT for accounting purposes, which would reduce our reported consolidated sales, total assets and operating cash flows. See Note 31 to the Consolidated Financial Statements for more information about the PTNNT share divestiture.
 
Furthermore, as part of the negotiation of the share divestitures with PT Multi Daerah Bersaing (“PTMDB”), the consortium of Indonesian regional and local governments and an unrelated Indonesian company that purchased such shares, 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 remains in effect for so long as NTP owns more shares of PTNNT than PTMDB. If the operating agreement terminates, we will likely lose effective control over the operations of Batu Hijau and will be at risk for operations conducted in a manner that could potentially reduce the value of PTNNT or results in safety, environmental or social standards below those adhered to by NTP.


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The Contract of Work has been and may continue to be the subject of dispute or legal review and is subject to termination by the Indonesian government if we do not comply with our obligations, which would result in loss of all or much of the value of Batu Hijau.
 
The divestiture provisions of the Contract of Work have been the subject of dispute. In 2008, the Department of Energy and Mineral Resources of the Indonesian government (the “DEMR”) alleged that PTNNT was in breach of its divestiture requirements under the Contract of Work and threatened to terminate the Contract of Work if PTNNT did not agree to divest shares in accordance with the direction of the DEMR. The matter was resolved by an international arbitration panel in March 2009. The arbitration decision led to NTP divesting 24% of PTNNT’s shares to PTMDB, the party nominated by the DEMR. NTP is in the concluding stages of working with the DEMR to divest the final 7% interest in PTNNT required to be divested under the Contract of Work. Following NTP’s divestiture of 24% of PTNNT’s shares to PTMDB, PTPI filed lawsuits in the South Jakarta District Court contending that it owns, or has rights to own, the shares in PTNNT that were divested by NTP to fulfill the requirements of the Contract of Work and the March 2009 arbitration award. In November 2010, the South Jakarta District Court issued a ruling with respect to one of the lawsuits, finding that PTPI has an entitlement to receive the full 31% interest in PTNNT required to be divested under the Contract of Work and awarding PTPI monetary damages of approximately $27. NTP has appealed the South Jakarta District Court ruling, a ruling which we believe contradicts both the Contract of Work and the March 2009 arbitration. Although we are confident that the appellate courts will reverse the South Jakarta District Court ruling, there can be no assurance that NTP will prevail in this litigation.
 
Although the Indonesian government has acknowledged that PTNNT is currently in compliance with the Contract of Work, future disputes may arise under the Contract of Work. 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. See Note 31 to the Consolidated Financial Statements for more information about the disputes involving the Contract of Work.
 
In January 2009, the Indonesian Government passed a new mining law. While the law preserves the right PTNNT to operate our Batu Hijau operations pursuant to the Contract of Work, no assurances can be provided that the Indonesian government will not seek to renegotiate certain provisions of the Contract of Work to conform to certain provisions of the new mining law, which could include requests for, among other things, higher royalty rates.
 
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, some of which blocked the road between the Yanacocha mine complex and the City of Cajamarca in Peru. 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 2008, 2009, 2010 and thus far in 2011, 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 results of operations and financial position.


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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 the older age of certain of our mines and 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 and hydrological impacts. 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 and at our operations in Nevada and Peru. In January 2010, our affiliate, PTNNT, experienced a geotechnical failure 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 and hydrological conditions, such as 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, wall instability, and seismic activity, which may result in slippage of material.
 
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 position.
 
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 $79 for each ounce of gold produced from operations in Australia before taking into account the impact of currency hedging. From December 31, 2009 to December 31, 2010, the Australian dollar appreciated by approximately $0.12 per U.S. dollar, or approximately 13%. We hedge up to 90% of our future forecasted Australian dollar denominated operating expenditures to reduce the variability of our Australian dollar exposure. At December 31, 2010 we have hedged 72%, 45%, 22%, 17% and 8% of our forecasted Australian denominated operating costs in 2011, 2012, 2013, 2014 and 2015, respectively. Our Australian dollar derivative programs will limit the benefit to the Company of future decreases, if any, in the U.S. 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


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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 of our outstanding debt and pay dividends could be significantly constrained.
 
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, 2010 Standard & Poor’s Rating Services rated Newmont Mining Corporation BBB+, with a stable outlook, and Moody’s Investors Service rated Newmont Mining Corporation Baa1 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 position.
 
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 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;
 
  •  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 addressing any pre-existing liabilities or claims involving 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, results of operations and financial position.
 
Our operations may be adversely affected by energy shortages.
 
Our mining operations and development projects require significant amounts of energy. Our principal energy sources are electricity, purchased petroleum products, natural gas and coal. Some of our operations are in remote locations requiring long distance transmission of power, and in some locations we compete with other companies for access to third party power generators or electrical supply networks. A disruption in the transmission of energy, inadequate energy transmission infrastructure or the termination of any of our energy supply contracts could interrupt our energy supply and adversely affect our operations.
 
We have periodically experienced power shortages in Ghana resulting primarily from drought, increasing demands for electricity and insufficient hydroelectric or other generating capacity which


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caused curtailment of production at our Ahafo operations. As a result of the mining industry’s agreement 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. The need to use 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 position.
 
Continuation of our mining production is dependent on the availability of sufficient water supplies to support our mining operations.
 
Our mining operations require significant quantities of water for mining, ore processing and related support facilities. Our operations in North and South America and Australia are in areas where water is scarce and competition among users for continuing access to water is significant. Continuous production at our mines is dependent on our ability to maintain our water rights and claims and defeat claims adverse to our current water uses in legal proceedings. Although each of our operations currently has sufficient water rights and claims to cover its operational demands, we cannot predict the potential outcome of pending or future legal proceedings relating to our water rights, claims and uses. The loss of some or all water rights for any of our mines, in whole or in part, or shortages of water to which we have rights could require us to curtail or shut down mining production and could prevent us from pursuing expansion opportunities. Laws and regulations may be introduced in some jurisdictions in which we operate which could limit our access to sufficient water resources in our operations, thus adversely affecting our operations.
 
The 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.
 
Production at our mines is dependent upon the efforts of our employees and, consequently, our maintenance of good relationships 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, 2010 union represented employees constituted approximately 48% of our worldwide work force. There can be no assurance that any future disputes will be resolved without disruptions to operations.
 
We rely on contractors to conduct a significant portion of our operations and construction projects.
 
A significant portion of our operations and construction projects are currently conducted in whole or in part by contractors. As a result, our operations are subject to a number of risks, some of which are outside our control, including:
 
  •  negotiating agreements with contractors on acceptable terms;
 
  •  the inability to replace a contractor and its operating equipment in the event that either party terminates the agreement;
 
  •  reduced control over those aspects of operations which are the responsibility of the contractor;


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  •  failure of a contractor to perform under its agreement;
 
  •  interruption of operations or increased costs in the event that a contractor ceases its business due to insolvency or other unforeseen events;
 
  •  failure of a contractor to comply with applicable legal and regulatory requirements, to the extent it is responsible for such compliance; and
 
  •  problems of a contractor with managing its workforce, labor unrest or other employment issues.
 
In addition, we may incur liability to third parties as a result of the actions of our contractors. The occurrence of one or more of these risks could adversely affect our results of operations and financial position.
 
We are subject to litigation and may be subject to additional litigation in the future.
 
We are currently, or may in the future become, subject to litigation, arbitration or other legal proceedings with other parties. If decided adversely to Newmont, these legal proceedings, or others that could be brought against us in the future, could have a material adverse effect on our financial position or prospects. For a more detailed discussion of pending litigation, see Note 31 to the Consolidated Financial Statements.
 
In the event of a dispute arising at our foreign operations, we may be subject to the exclusive jurisdiction of foreign courts or arbitral panels, or may not be successful in subjecting foreign persons to the jurisdiction of courts or arbitral panels in the United States. Our inability to enforce our rights and the enforcement of rights on a prejudicial basis by foreign courts or arbitral panels could have an adverse effect on our results of operations and financial position.
 
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 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, and our ability to use these properties is dependent on agreements with traditional owners 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 natural resource companies may harm our business.
 
We compete with other natural resource companies to attract and retain key executives, skilled labor, contractors and other employees. We also compete with other natural resource companies for specialized equipment, components and supplies, such as drill rigs, necessary for exploration and development, as well as for rights to mine properties containing gold, copper 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, 2010 the Company’s current and long-term deferred tax assets were $177 and $1,437, 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, market conditions caused the value of the investments in our pension plans to decrease significantly. As a result, we contributed $161 and $55 to the pension plans in 2010 and 2009, respectively. If future plan investment returns are not sufficient, 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 8 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 and development 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 production from Nevada was approximately 1.7 million ounces for 2010 with ore mined from eight open pit and six underground mines. At December 31, 2010, we reported 31.2 million ounces of gold reserves in Nevada, with 81% of those ounces in open pit mines and 19% 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 79% of Nevada’s gold production in 2010, compared with 77% in 2009, and 72% in 2008. With respect to remaining reserves, we estimate that approximately 85% are refractory ores and 15% 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.
 
In Nevada, mining taxes are assessed on up to 5% of net proceeds of a mine. Net proceeds are calculated as the excess of gross yield over direct costs. Gross yield is determined as the value received when minerals are sold, exchanged for anything of value or removed from the state. Direct costs generally include the costs to develop, extract, produce, transport, refine and market minerals.
 
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 production of 38,000 ounces in 2010, 39,000 ounces in 2009 and 45,000 ounces in 2008 were attributable to Newmont, based on our 25% ownership interest.
 
We have an ore sale agreement with Yukon-Nevada Gold Corporation (“Yukon-Nevada”) to process the Company’s ore. We recognized attributable gold sales, net of treatment charges, of 15,000 ounces in 2010, 700 ounces in 2009 and 8,000 ounces in 2008, pursuant to this agreement. During 2008, Yukon-Nevada discontinued operations; however, during the second half of 2009, they resumed operations on a limited basis.
 
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 produced 174,000 attributable ounces of gold in 2010 and at December 31, 2010 we reported 2.3 million ounces of gold reserves.
 
Hope Bay, Canada.  We own 100% of the Hope Bay project, a large undeveloped gold project in the Nunavut Territory of Canada. Hope Bay is an 80 kilometer district in the Canadian arctic and is one of the last known undeveloped greenstone belts in the world. The exploration success over the last few


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years continues to confirm the district’s significant long-term potential. In 2010, we commenced an underground decline at the Doris North deposit and expect the Doris phase 1 project to provide access for test stoping and development drilling, progressing to a construction decision by the end of 2011.
 
South America
 
The properties of Minera Yanacocha S.R.L. (“MYSRL”) include the mining operations at Yanacocha and the Conga project. We hold a 51.35% interest in MYSRL with the remaining interests held by Compañia de Minas Buenaventura, S.A.A. (“Buenaventura”) (43.65%) and the International Finance Corporation (5%).
 
MYSRL has mining rights with respect to a large land position consisting of concessions granted by the Peruvian government to MYSRL and a related entity. These mining concessions provide for both the right to explore and exploit. However, MYSRL must first obtain the respective exploration and exploitation permits, which are generally granted in due course. MYSRL 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. MYSRL, 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 five years.
 
Yanacocha, Peru.  Yanacocha is 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 and 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 production for 2010 was 1.5 million ounces (750,000 attributable ounces) and at December 31, 2010 we reported 5.0 million ounces of gold reserves.
 
Conga, Peru.  The Conga project is located within close proximity of existing operations at Yanacocha. Feasibility studies on our preferred development option were completed in late 2009 and we continue to progress into the development stage with an emphasis on project engineering and obtaining all required permits. In 2010, we selected and mobilized the project engineering procurement and construction contractor. In October 2010, the project’s Environmental Impact Assessment was approved by the Peruvian authorities. A construction decision is expected in the first half of 2011. If all permits are secured, the commencement of production is expected in late 2014 or early 2015. At December 31, 2010 we reported 6.1 million ounces of gold reserves and 1,660 million pounds of copper reserves at Conga.
 
La Zanja, Peru.  Newmont holds a 46.94% interest in La Zanja, a gold project near the city of Cajamarca, Peru. The remaining interests are held by Buenaventura. The mine commenced operations in September 2010 and is operated by Buenaventura. The site will consist of two small open pits and one oxide leach pad. La Zanja produced 21,000 attributable gold ounces in 2010 and at December 31, 2010 we reported 0.3 million ounces of gold reserves.
 
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.


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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 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.
 
Native title claims are not expected to 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 and taxes are paid to state and territorial governments, typically based on a percentage of gross revenues or earnings. Indigenous communities have negotiated royalty payments as a condition to granting access to areas where they have native title or other property rights.
 
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 in September 2009 and commenced commercial production in November 2009. Boddington produced 728,000 ounces of gold and 58 million pounds of copper in 2010 and at December 31, 2010 we reported 20.3 million ounces of gold reserves and 2,360 million pounds of copper reserves.
 
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 2010, the Kalgoorlie operations produced 754,000 ounces of gold (377,000 attributable ounces) and at December 31, 2010 we reported 3.8 million ounces of gold reserves.
 
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 2010, with mill feed supplemented from oxide stockpiles for blending purposes. Jundee produced 335,000 ounces of gold in 2010 and at December 31, 2010 we reported 0.8 million ounces of gold reserves.
 
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 2010, the Tanami operations produced 250,000 ounces of gold and at December 31, 2010 we reported 2.0 million ounces of gold reserves.


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Waihi.  Waihi (100% owned) is located within the town of Waihi, approximately 68 miles (110 kilometers) southeast of Auckland, New Zealand and currently consists of the Favona underground deposit and the Martha open pit. The Waihi operation produced 108,000 ounces of gold in 2010 and at December 31, 2010 we reported 0.5 million ounces of gold reserves.
 
Duketon.  We have a 16.22% interest in Regis Resources Ltd. (“Regis”), a mineral company with significant gold and nickel exploration properties in Eastern Goldfields of Western Australia. Regis owns 100% of the Duketon gold project, which is located approximately 200 miles northeast of Kalgoorlie. Duketon commenced production in the third quarter of 2010 and produced 5,000 attributable ounces of gold in 2010. At December 31, 2010, we reported 0.3 million ounces of gold reserves.
 
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 late 1999. In 2010, Batu Hijau produced 542 million pounds of copper (269 million attributable pounds) and 737,000 ounces of gold (364,000 attributable ounces). At December 31, 2010 we reported 3,760 million pounds of copper reserves and 3.7 million ounces of gold reserves at Batu Hijau.
 
We own 31.50% 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 56% of PT Newmont Nusa Tenggara (“PTNNT”), the Indonesian subsidiary that owns Batu Hijau. Newmont entered into transactions with P.T. Pukuafu Indah (“PTPI”) and PT Indonesia Masbaga Investama (“PTIMI”), unrelated noncontrolling partners of PTNNT, whereby we agreed to advance certain funds in exchange for a pledge of the shares as security, an assignment of the noncontrolling partners’ combined 20% share of PTNNT dividends, net of withholding tax, and certain voting rights and obligations to the Company. As a result, PTPI and PTIMI were determined to be Variable Interest Entities (“VIEs”) as they have minimal attributable capital and certain voting rights and obligations to their 20% interest in PTNNT reside with Newmont. As a result, our effective economic interest in PTNNT increased by 17% to 48.50% at December 31, 2010. The remaining 24% interest in PTNNT is owned by PT Multi Daerah Bersaing (“PTMDB”). 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 51% of PTNNT’s shares must have been offered for sale, first, to the Indonesian government or, second, to Indonesian nationals by March 31, 2010. Pursuant to this provision, the ownership interest in the Batu Hijau mine’s proven and probable 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. Furthermore, as part of the negotiation of the sale agreements with PTMDB, the parties executed an operating agreement under which each party 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 remains in effect 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 could potentially reduce the value of PTNNT or result in safety, environmental or social standards below those adhered to by NTP. Such loss of control may cause us to deconsolidate PTNNT for accounting purposes, which would reduce


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our reported consolidated sales, cost applicable to sales, amortization, total assets and operating cash flow attributable to PTNNT. See Note 31 to the Consolidated Financial Statements.
 
Africa
 
Ahafo, Ghana.  Ahafo (100% owned) is located in the Brong-Ahafo Region of Ghana, approximately 180 miles (290 kilometers) northwest of Accra. We currently operate four open pits at Ahafo with reserves contained in 11 pits. Commercial production in the fourth pit, Amoma, began in October 2010. The process plant consists of a conventional mill and carbon-in-leach circuit. Ahafo produced 545,000 ounces of gold in 2010 and at December 31, 2010 we reported 10.0 million ounces of gold reserves.
 
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 $14 in Income and mining tax expense to date under the levy.
 
Akyem, Ghana.  Akyem (100% owned) is located approximately 80 miles (125 kilometers) northwest of Accra. In January 2010, we received the mining lease for Akyem. We continue to progress into the development stage with an emphasis on project engineering and obtaining all required land access and permits. In 2010, we selected and mobilized the project engineering procurement and construction contractor and we are advancing the project towards a construction decision in the first half of 2011. If all permits are secured, we expect this project to commence production in late 2013 or early 2014. At December 31, 2010, we reported 7.2 million ounces of gold reserves.


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Operating Statistics
 
The following tables detail operating statistics related to gold production, sales and production costs per ounce:
 
                                                 
    North America     South America  
Year Ended December 31,   2010     2009     2008     2010     2009     2008  
 
Tons mined (000 dry short tons):
                                               
Open pit
    233,359       239,102       222,222       199,467       197,559       211,525  
Underground
    2,452       2,740       2,500                    
Tons processed (000 dry short tons):
                                               
Mill
    23,497       24,702       24,755       6,832       6,242       4,196  
Leach
    17,240       19,697       26,210       58,691       136,293       97,823  
Average ore grade (oz/ton):
                                               
Mill
    0.085       0.085       0.093       0.081       0.118       0.082  
Leach
    0.019       0.022       0.025       0.019       0.018       0.018  
Average mill recovery rate
    78.9 %     81.8 %     81.8 %     82.5 %     86.4 %     88.2 %
Ounces produced (000):
                                               
Mill
    1,540       1,700       1,878       421       630       304  
Leach
    366       398       476       1,038       1,428       1,505  
Development(1)
    3       1       1       3              
                                                 
Consolidated
    1,909       2,099       2,355       1,462       2,058       1,809  
                                                 
Attributable to Newmont
    1,909       2,099       2,355       771       1,057       929  
                                                 
Consolidated ounces sold (000)
    1,898       2,117       2,319       1,463       2,068       1,842  
                                                 
Production costs per ounce sold:
                                               
Direct mining and production costs
  $ 601     $ 535     $ 461     $ 444     $ 318     $ 354  
By-product credits
    (72 )     (55 )     (38 )     (50 )     (31 )     (27 )
Royalties and production taxes
    15       15       16       32       18       16  
Other
    7       6       6       5       5       3  
                                                 
Costs applicable to sales
    551       501       445       431       310       346  
Amortization
    153       128       110       111       81       92  
Reclamation and remediation
    4       3       3       10       6       5  
                                                 
Total production costs
  $ 708     $ 632     $ 558     $ 552     $ 397     $ 443  
                                                 
 


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    Asia Pacific     Africa  
Year Ended December 31,   2010     2009     2008     2010     2009     2008  
 
Tons mined (000 dry short tons):
                                               
Open pit
    238,725       204,814       244,220       51,054       51,971       50,567  
Underground
    3,564       3,778       3,896                    
Tons milled (000 dry short tons)
    89,293       58,853       50,074       8,372       8,335       8,262  
Average ore grade (oz/ton)
    0.033       0.034       0.033       0.077       0.074       0.075  
Average mill recovery rate
    86.3 %     88.3 %     88.0 %     86.1 %     87.2 %     89.7 %
Ounces produced (000):
                                               
Mill
    2,535       1,776       1,464       529       532       506  
Development(1)
          56             16             19  
                                                 
Consolidated
    2,535       1,832       1,464       545       532       525  
                                                 
Attributable to Newmont
    2,167       1,517       1,316       545       532       525  
                                                 
Consolidated ounces sold (000)
    2,407       1,803       1,486       528       546       503  
                                                 
Production costs per ounce sold:
                                               
Direct mining and production costs
  $ 457     $ 395     $ 502     $ 411     $ 414     $ 380  
By-product credits
    (14 )     (10 )     (9 )     (1 )     (1 )     (1 )
Royalties and production taxes
    28       24       20       38       29       27  
Other
    3       1       2       2       2       2  
                                                 
Costs applicable to sales
    474       410       515       450       444       408  
Amortization
    109       100       99       150       125       126  
Reclamation and remediation
    5       4       5       4       4       3  
                                                 
Total production costs
  $ 588     $ 514     $ 619     $ 604     $ 573     $ 537  
                                                 
 
                         
    Total Gold  
Year Ended December 31,   2010     2009     2008  
 
Ounces produced (000):
                       
Mill
    5,025       4,638       4,152  
Leach
    1,404       1,826       1,981  
Development(1)
    22       57       20  
                         
Consolidated
    6,451       6,521       6,153  
                         
Attributable to Newmont(2)
    5,392       5,237       5,201  
                         
Consolidated ounces sold (000)
    6,296       6,534       6,150  
                         
Production costs per ounce sold:
                       
Direct mining and production costs
  $ 493     $ 418     $ 432  
By-product credits
    (39 )     (30 )     (25 )
Royalties and production taxes
    26       20       18  
Other
    5       3       4  
                         
Costs applicable to sales
    485       411       429  
Amortization
    126       105       103  
Reclamation and remediation
    6       4       4  
                         
Total production costs
  $ 617     $ 520     $ 536  
                         
 
 
(1) Ounces from the removal and production of de minimis saleable materials during development. Sales from development are recorded in Other income, net of incremental mining and processing costs.
 
(2) Includes 32 and 76 thousand ounces from discontinued operations at Kori Kollo, Bolivia in 2009 and 2008, respectively.

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The following table details operating statistics related to copper production, sales and production costs per pound.
 
                         
    Asia Pacific  
Year Ended December 31,   2010     2009     2008  
 
Tons milled (000 dry short tons)
    77,155       47,087       37,818  
Average grade
    0.46 %     0.60 %     0.47 %
Average recovery rate
    85.1 %     89.2 %     80.6 %
Consolidated pounds produced (millions)
    600       504       285  
                         
Attributable to Newmont
    327       227       128  
                         
Consolidated pounds sold (millions)
    539       507       290  
                         
Production costs per pound sold:
                       
Costs applicable to sales
  $ 0.80     $ 0.64     $ 1.38  
Amortization
    0.21       0.16       0.28  
Reclamation and remediation
    0.01       0.01       0.02  
                         
Total production costs
  $ 1.02     $ 0.81     $ 1.68  
                         
 
Proven and Probable Reserves
 
We had proven and probable gold reserves of 93.5 million ounces at December 31, 2010, calculated at a gold price assumption of $950, A$1,100 or NZ$1,350 per ounce, respectively. Our 2010 reserves would decline by approximately 5% (4.9 million ounces), if calculated at a $900 per ounce gold price. An increase in the gold price to $1,000 per ounce would increase reserves by approximately 3% (3.1 million ounces), all other assumptions remaining constant. For 2009, reserves were calculated at a gold price assumption of $800, A$1,000 or NZ$1,200 per ounce, respectively.
 
At December 31, 2010, our proven and probable gold reserves in North America were 33.5 million ounces. Outside of North America, year-end proven and probable gold reserves were 60.0 million ounces, including 31.4 million ounces in Asia Pacific, 17.2 million ounces in Africa and 11.4 million ounces in South America.
 
Our proven and probable copper reserves at December 31, 2010 were 9,420 million pounds. For 2010, reserves were calculated at a copper price assumption of $2.50 or A$2.95 per pound, increased from $2.00 or A$2.40 per pound, used in 2009.
 
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 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 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 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


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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 will recalculate reserves at December 31, 2011, taking into account metal prices, changes, if any, in future production and capital costs, divestments and depletion as well as any acquisitions and additions during 2011.
 
The following tables detail gold proven and probable reserves reflecting only those reserves attributable to Newmont’s ownership or economic interest at December 31, 2010 and 2009:
 
                                                                                         
          December 31, 2010(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 %     36,600       0.064       2,340       226,900       0.040       8,980       263,500       0.043       11,320       75 %
Carlin Underground, Nevada
    100 %     5,800       0.272       1,570       8,800       0.330       2,910       14,600       0.307       4,480       88 %
Midas, Nevada(5)
    100 %     200       0.394       100       300       0.264       90       500       0.319       190       95 %
Phoenix, Nevada(6)(7)
    100 %                         329,800       0.018       6,090       329,800       0.018       6,090       73 %
Twin Creeks, Nevada
    100 %     11,400       0.097       1,110       46,400       0.071       3,280       57,800       0.076       4,390       79 %
Turquoise Ridge, Nevada(8)
    25 %     1,400       0.458       640       1,700       0.456       770       3,100       0.457       1,410       92 %
Nevada In-Process(9)
    100 %     28,500       0.022       610                           28,500       0.022       610       62 %
Nevada Stockpiles(10)
    100 %     33,900       0.077       2,630       2,800       0.028       80       36,700       0.074       2,710       78 %
                                                                                         
Total Nevada(11)
            117,800       0.076       9,000       616,700       0.036       22,200       734,500       0.042       31,200       78 %
La Herradura, Mexico(12)
    44 %     44,600       0.023       1,010       61,100       0.021       1,280       105,700       0.022       2,290       66 %
                                                                                         
              162,400       0.062       10,010       677,800       0.035       23,480       840,200       0.040       33,490       77 %
                                                                                         
South America
                                                                                       
Conga, Peru(6)(13)
    51.35 %                         317,200       0.019       6,080       317,200       0.019       6,080       79 %
Yanacocha, Peru Open Pits(14)
    51.35 %     23,500       0.028       650       118,800       0.032       3,790       142,300       0.031       4,440       70 %
Yanacocha, Peru In-Process(9)(14)
    51.35 %     21,300       0.025       540                         21,300       0.025       540       74 %
                                                                                         
Total Yanacocha, Peru
    51.35 %     44,800       0.027       1,190       118,800       0.032       3,790       163,600       0.030       4,980       71 %
La Zanja, Peru(15)
    46.94 %     10,100       0.018       180       10,500       0.016       160       20,600       0.017       340       66 %
                                                                                         
              54,900       0.025       1,370       446,500       0.022       10,030       501,400       0.023       11,400       75 %
                                                                                         
Asia Pacific
                                                                                       
Batu Hijau Open Pit(6)(16)
    48.50 %     168,800       0.014       2,420       124,600       0.006       700       293,400       0.011       3,120       78 %
Batu Hijau Stockpiles(6)(10)(16)
    48.50 %                         170,700       0.004       610       170,700       0.004       610       69 %
                                                                                         
Total Batu Hijau, Indonesia
    48.50 %     168,800       0.014       2,420       295,300       0.004       1,310       464,100       0.008       3,730       76 %
Boddington, Western Australia(6)
    100 %     181,900       0.021       3,760       885,900       0.019       16,540       1,067,800       0.019       20,300       82 %
Duketon, Western Australia(17)
    16.22 %     1,800       0.056       100       4,500       0.055       250       6,300       0.055       350       94 %
Jundee, Western Australia(18)
    100 %     3,100       0.051       160       1,600       0.373       600       4,700       0.160       760       91 %
Kalgoorlie Open Pit and Underground
    50 %     15,000       0.061       910       40,700       0.059       2,390       55,700       0.059       3,300       85 %
Kalgoorlie Stockpiles(10)
    50 %     15,100       0.031       470                           15,100       0.031       470       78 %
                                                                                         
Total Kalgoorlie, Western Australia(19)
    50 %     30,100       0.046       1,380       40,700       0.059       2,390       70,800       0.053       3,770       84 %
Tanami, Northern Territories(20)
    100 %     6,400       0.151       970       7,900       0.134       1,070       14,300       0.142       2,040       95 %
Waihi, New Zealand(21)
    100 %                       4,200       0.110       460       4,200       0.110       460       89 %
                                                                                         
              392,100       0.022       8,790       1,240,100       0.018       22,620       1,632,200       0.019       31,410       83 %
                                                                                         
Africa
                                                                                       
Ahafo Open Pits(22)
    100 %                         148,300       0.064       9,540       148,300       0.064       9,540       87 %
Ahafo Stockpiles(10)
    100 %     14,100       0.033       460                           14,100       0.033       460       86 %
Total Ahafo, Ghana
    100 %     14,100       0.033       460       148,300       0.064       9,540       162,400       0.062       10,000       87 %
Akyem, Ghana(23)
    100 %                         137,900       0.052       7,200       137,900       0.052       7,200       88 %
                                                                                         
              14,100       0.033       460       286,200       0.059       16,740       300,300       0.057       17,200       88 %
                                                                                         
Total Gold
            623,500       0.033       20,630       2,650,600       0.027       72,870       3,274,100       0.029       93,500       81 %
                                                                                         
 


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          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
    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
    100 %     400       0.480       200       300       0.347       100       700       0.425       300       95 %
Phoenix, Nevada
    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(8)
    25 %     1,100       0.480       550       1,500       0.527       810       2,600       0.507       1,360       92 %
Nevada In-Process(9)
    100 %     33,800       0.021       730                           33,800       0.021       730       65 %
Nevada Stockpiles(10)
    100 %     27,000       0.079       2,140       2,500       0.028       70       29,500       0.075       2,210       79 %
                                                                                         
Total Nevada
            100,600       0.075       7,560       570,200       0.037       20,950       670,800       0.042       28,510       77 %
La Herradura, Mexico
    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
    51.35 %                         317,200       0.019       6,080       317,200       0.019       6,080       79 %
Yanacocha, Peru Open Pits
    51.35 %     7,800       0.035       270       123,700       0.036       4,480       131,500       0.036       4,750       69 %
Yanacocha, Peru In-Process(9)
    51.35 %     26,400       0.025       660                           26,400       0.025       660       74 %
                                                                                         
Total Yanacocha, Peru
    51.35 %     34,200       0.027       930       123,700       0.036       4,480       157,900       0.034       5,410       69 %
La Zanja, Peru
    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
    52.44 %     201,100       0.015       2,970       167,700       0.005       810       368,800       0.010       3,780       76 %
Batu Hijau Stockpiles(10)
    52.44 %                         193,800       0.004       720       193,800       0.004       720       70 %
                                                                                         
Total Batu Hijau, Indonesia
    52.44 %     201,100       0.015       2,970       361,500       0.004       1,530       562,600       0.008       4,500       75 %
Boddington, Western Australia
    100 %     184,600       0.025       4,640       781,800       0.021       16,320       966,400       0.022       20,960       82 %
Jundee, Western Australia
    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(10)
    50 %     14,300       0.031       440                           14,300       0.031       440       78 %
                                                                                         
Total Kalgoorlie, Western Australia
    50 %     35,500       0.049       1,720       39,600       0.062       2,470       75,100       0.056       4,190       84 %
Tanami, Northern Territories
    100 %     5,200       0.160       830       7,900       0.102       810       13,100       0.125       1,640       96 %
Waihi, New Zealand
    100 %                         4,000       0.101       410       4,000       0.101       410       90 %
                                                                                         
              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
    100 %                         128,700       0.068       8,810       128,700       0.068       8,810       87 %
Ahafo Stockpiles(10)
    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
    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 %
                                                                                         
 
 
(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 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

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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.
 
Proven and probable reserves include gold or copper attributable to Newmont’s ownership or economic interest.
 
Proven and probable 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.
 
2010 reserves were calculated at a gold price of $950, A$1,100 or NZ$1,350 per ounce unless otherwise noted.
 
2009 reserves were calculated at a gold price of $800, A$1,000 or NZ$1,200 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 2.8 million ounces of silver with a metallurgical recovery of 88%.
 
(6) Gold cut-off grade varies with level of copper credits.
 
(7) Also contains reserves of 86.3 million ounces of silver with a metallurgical recovery of 36%.
 
(8) Reserve estimates provided by Barrick, the operator of the Turquoise Ridge joint venture.
 
(9) 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.
 
(10) 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.
 
(11) Cut-off grades utilized in Nevada 2010 reserves were as follows: oxide leach material not less than 0.006 ounce per ton; oxide mill material not less than 0.026 ounce per ton; flotation material not less than 0.011 ounce per ton; and refractory mill material not less than 0.042 ounce per ton.
 
(12) Cut-off grade utilized in 2010 reserves not less than 0.009 ounce per ton. Includes undeveloped attributable reserves at the Noche Buena deposit of 0.3 million ounces.


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(13) Deposit is currently undeveloped. Reserves estimates will be recalculated in 2011 upon completion of Feasibility Study Update.
 
(14) Reserves include the currently undeveloped deposit at La Quinua Sur, which contains attributable reserves of 0.8 million ounces. Cut-off grades utilized in 2010 reserves were as follows: oxide leach material not less than 0.003 ounce per ton; and oxide mill material not less than 0.014 ounce per ton. Also contains attributable reserves of 16.5 million ounces of silver with a metallurgical recovery of 21%.
 
(15) Reserve estimates provided by Buenaventura, the operator of the La Zanja project. Cut-off grade utilized in 2010 reserves not less than 0.004 ounce per ton.
 
(16) Percentage reflects Newmont’s economic interest at December 31, 2010. In April 2010 our economic interest decreased from 52.44% to 48.50% as a result of the divestiture required under the Contract of Work. Also contains attributable reserves of 12.9 million ounces of silver with a metallurgical recovery of 78%.
 
(17) Reserve estimates provided by Regis Resources Ltd., in which Newmont holds a 16.22% interest. Gold cut-off grades utilized in 2010 reserves not less than 0.015 ounce per ton.
 
(18) Cut-off grade utilized in 2010 reserves not less than 0.020 ounce per ton.
 
(19) Cut-off grade utilized in 2010 reserves not less than 0.026 ounce per ton.
 
(20) Cut-off grade utilized in 2010 reserves not less than 0.045 ounce per ton.
 
(21) Cut-off grade utilized in 2010 reserves not less than 0.015 ounce per ton.
 
(22) Includes undeveloped reserves at seven pits in the Ahafo trend totaling 3.2 million ounces. Cut-off grade utilized in 2010 reserves not less than 0.014 ounce per ton.
 
(23) Deposit is undeveloped. Cut-off grade utilized in 2010 reserves not less than 0.020 ounce per ton.
 
The following tables detail copper proven and probable reserves reflecting only those reserves attributable to Newmont’s ownership or economic interest at December 31, 2010 and 2009:
 
                                                                                         
    December 31, 2010(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 Mill, Nevada(4)
    100 %                         332,600       0.15 %     1,030       332,600       0.15 %     1,030       61 %
                                                                                         
Phoenix Copper Leach, Nevada(5)
    100 %                         132,900       0.23 %     610       132,900       0.23 %     610       53 %
                                                                                         
                                                                                         
                                  465,500       0.18 %     1,640       465,500       0.18 %     1,640       58 %
                                                                                         
South America
                                                                                       
                                                                                         
Conga, Peru(6)
    51.35 %                         317,200       0.26 %     1,660       317,200       0.26 %     1,660       85 %
                                                                                         
Asia Pacific
                                                                                       
                                                                                         
Batu Hijau Open Pit(7)
    48.50 %     168,800       0.50 %     1,700       124,600       0.34 %     860       293,400       0.44 %     2,560       80 %
                                                                                         
Batu Hijau Stockpiles(7)(8)
    48.50 %                         170,700       0.35 %     1,200       170,700       0.35 %     1,200       66 %
                                                                                         
                                                                                         
Total Batu Hijau, Indonesia
    48.50 %     168,800       0.50 %     1,700       295,300       0.35 %     2,060       464,100       0.40 %     3,760       76 %
                                                                                         
Boddington, Western Australia(9)
    100 %     181,900       0.10 %     380       885,900       0.11 %     1,980       1,067,800       0.11 %     2,360       84 %
                                                                                         
                                                                                         
              350,700       0.30 %     2,080       1,181,200       0.17 %     4,040       1,531,900       0.20 %     6,120       79 %
                                                                                         
                                                                                         
Total Copper
            350,700       0.30 %     2,080       1,963,900       0.19 %     7,340       2,314,600       0.20 %     9,420       76 %
                                                                                         
 


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    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
    100 %                         287,500       0.16 %     900       287,500       0.16 %     900       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
    52.44 %     201,100       0.51 %     2,070       167,700       0.32 %     1,060       368,800       0.42 %     3,130       77 %
                                                                                         
Batu Hijau Stockpiles(8)
    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
    100 %     184,600       0.11 %     400       781,800       0.10 %     1,640       966,400       0.11 %     2,040       84 %
                                                                                         
              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 %
                                                                                         
 
 
(1) See footnote (1) to the Gold Proven and Probable Reserves tables above. Copper reserves for 2010 were calculated at a copper price of $2.50 or A$2.95 per pound. 2009 copper reserves 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 Reserves tables above. Tonnages are rounded to nearest 100,000.
 
(3) See footnote (3) to the Gold Proven and Probable Reserves tables above. Pounds are rounded to the nearest 10 million.
 
(4) Copper cut-off grade varies with level of gold credits.
 
(5) Copper cut-off grade varies with level of leach solubility.
 
(6) Deposit is undeveloped. Copper cut-off grade varies with level of gold credits. Reserve estimates will be recalculated in 2011 upon completion of Feasibility Study Update.
 
(7) Percentage reflects Newmont’s economic interest at December 31, 2010. In April 2010 our economic interest decreased from 52.44% to 48.50% as a result of the divestiture required under the Contract of Work. Copper cut-off grade varies with level of gold credits.
 
(8) 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.
 
(9) Copper cut-off grade varies with level of gold credits.
 
The following table reconciles year-end 2010 and 2009 gold and copper proven and probable reserves:
 
                 
    Gold Ounces     Copper Pounds  
    (in millions)     (in millions)  
 
December 31, 2009
    91.8       9,120  
Depletion(1)
    (6.5 )     (370 )
Revisions and additions, net(2)
    8.2       1,000  
Acquisitions
    0.3        
Other divestments
    (0.3 )     (330 )
                 
December 31, 2010
    93.5       9,420  
                 
 
 
(1) Reserves mined and processed in 2010.
 
(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 31 to the Consolidated Financial Statements.
 
ITEM 4A.   EXECUTIVE OFFICERS OF THE REGISTRANT
 
Newmont’s executive officers at February 18, 2011 were:
 
             
Name   Age   Office
 
Richard T. O’Brien
    56     President and Chief Executive Officer
Russell Ball
    42     Executive Vice President and Chief Financial Officer
Randy Engel
    44     Executive Vice President, Strategic Development
Brian A. Hill
    51     Executive Vice President, Operations
Guy Lansdown
    50     Executive Vice President, Discovery and Development
William N. MacGowan
    53     Executive Vice President, Human Resources
Jeffrey R. Huspeni(1)
    55     Senior Vice President, African Operations
Thomas Kerr
    50     Senior Vice President, North American Operations
Carlos Santa Cruz
    55     Senior Vice President, South American Operations
Tim Netscher(2)
    60     Senior Vice President, Asia Pacific Operations
David Gutierrez
    56     Vice President, Planning and Tax
Roger Johnson
    53     Vice President and Chief Accounting Officer
Thomas P. Mahoney
    55     Vice President and Treasurer
 
 
(1) Effective April 1, 2011, Mr. Huspeni will replace Mr. Netscher as Senior Vice President, Asia Pacific Operations, and David Schummer who, as of the date of this Annual Report, serves as Group Executive Operations, North America, will replace Mr. Huspeni as Senior Vice President, African Operations. For this reason, Mr. Schummer’s biographical information is also included below.
 
(2) Effective March 31, 2011, Mr. Netscher will retire from such position.
 
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. 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.


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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 for Group Five in South Africa.
 
Mr. MacGowan was elected Executive Vice President, Human Resources, in February 2010, when he joined Newmont. Mr. MacGowan previously served as Executive Vice President and Chief Human Resources Officer, People and Places from 2006 to 2010; Senior Vice President, Human Resources, 2004 to 2006; Vice President, Human Resources, Global Centers of Expertise, 2002 to 2004; Vice President, Human Resources, Engineering and Operations, 2001 to 2002; Vice President, Human Resources, Enterprise Services, 1999 to 2001 and; Director, Human Resources, Enterprise Services, 1998 to 1999 for Sun Microsystems.
 
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.
 
Effective April 1, 2011, Mr. Schummer, age 39, will replace Mr. Huspeni as Senior Vice President, African Operations. He has served as Group Executive Operations, North America and Group Executive Business Excellence since 2010, General Manager Operations Yanacocha, Peru from 2007 to 2010, Mine Manager and Mine Superintendent at Yanacocha, Peru from 2003 to 2006. Previously, he served as Mine Superintendent and General Foreman in Sumbawa, Indonesia for the Batu Hijau Project from 1999 to 2003.
 
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. 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”.
 
On November 9, 2009, Newmont announced its intention to seek removal from the official list of the Australian Stock Exchange (“ASX”) and to suspend trading of the CHESS Depositary Interests (“CDIs”). The announcement was due to a low level of CDIs quoted on the ASX with low levels of trading when compared to other exchanges where it may trade. Further, investors seeking to purchase shares in Newmont could do so on the NYSE. The CDIs were suspended from trading on the ASX on February 10, 2010 and removed from the official list of the ASX on February 17, 2010.
 
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:
 
                                 
    2010     2009  
    High     Low     High     Low  
 
First quarter
  $ 51.94     $ 42.86     $ 46.90     $ 35.03  
Second quarter
  $ 61.74     $ 51.53     $ 48.87     $ 38.14  
Third quarter
  $ 64.94     $ 55.40     $ 47.12     $ 37.89  
Fourth quarter
  $ 64.72     $ 58.09     $ 55.83     $ 41.50  
 
On February 18, 2011, there were 486,564,649 shares of Newmont’s common stock outstanding, which were held by approximately 12,995 stockholders of record. A dividend of $0.15 per share of common stock outstanding was declared in the third and fourth quarters of 2010, while a dividend of $0.10 per share of common stock outstanding was declared in the first and second quarters of 2010, for a total of $0.50 during 2010. A dividend of $0.10 per share of common stock outstanding was declared in each quarter of 2009, for a total of $0.40 during 2009.
 
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 18, 2011, there were outstanding 6,703,999 Exchangeable Shares, which were held by 39 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, 2010 to December 31, 2010.


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ITEM 6.   SELECTED FINANCIAL DATA (dollars in millions, except per share)
 
                                         
    Years Ended December 31,  
    2010     2009     2008     2007     2006  
 
Sales
  $ 9,540     $ 7,705     $ 6,124     $ 5,465     $ 4,805  
Income (loss) from continuing operations
  $ 3,144     $ 2,109     $ 1,147     $ (580 )   $ 900  
Net income (loss)
  $ 3,116     $ 2,093     $ 1,160     $ (1,485 )   $ 1,154  
Net income (loss) attributable to Newmont stockholders(1)
  $ 2,277     $ 1,297     $ 831     $ (1,895 )   $ 791  
Income (loss) per common share attributable to Newmont stockholders:
                                       
Basic:
                                       
Continuing operations
  $ 4.69     $ 2.68     $ 1.80     $ (2.18 )   $ 1.20  
Discontinued operations
    (0.06 )     (0.02 )     0.03       (2.01 )     0.56  
                                         
    $ 4.63     $ 2.66     $ 1.83     $ (4.19 )   $ 1.76  
                                         
Diluted:
                                       
Continuing operations
  $ 4.61     $ 2.68     $ 1.80     $ (2.18 )   $ 1.19  
Discontinued operations
    (0.06 )     (0.02 )     0.03       (2.01 )     0.56  
                                         
    $ 4.55     $ 2.66     $ 1.83     $ (4.19 )   $ 1.75  
                                         
Dividends declared per common share
  $ 0.50     $ 0.40     $ 0.40     $ 0.40     $ 0.40  
 
                                         
    At December 31,  
    2010     2009     2008     2007     2006  
 
Total assets
  $ 25,663     $ 22,299     $ 15,727     $ 15,474     $ 15,601  
Debt, including current portion
  $ 4,441     $ 4,809     $ 3,237     $ 2,597     $ 1,911  
Newmont stockholders’ equity
  $ 13,345     $ 10,703     $ 7,291     $ 7,759     $ 9,337  
 
 
(1) Net income (loss) attributable to Newmont stockholders includes income (loss) from discontinued operations of $(28), $(11), $15, $907 and $251 net of tax in 2010, 2009, 2008, 2007 and 2006, 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 72. 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 consolidated financial condition and results of operations at and for the three years ended December 31, 2010, 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 2011;
 
  •  “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 generally accepted accounting principle (“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 the Fortune 500, and was the first gold company included in the Dow Jones Sustainability Index-World. We are also engaged in the exploration for and acquisition of gold and gold/copper properties. We have significant assets and/or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico.
 
Our vision is to be the most valued and respected mining company through industry leading performance. In 2010, we have successfully executed on the key benchmarks that we set out at the beginning of the year.


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Delivered strong operating performance.
 
  •  Consolidated gold production of approximately 6.5 million ounces (5.4 million ounces attributable to Newmont) at Costs applicable to sales of $485 per ounce;
 
  •  Consolidated copper production of approximately 600 million pounds (327 million pounds attributable to Newmont) at Costs applicable to sales of $0.80 per pound;
 
  •  Record Sales of $9,540, an increase of 24% over 2009;
 
  •  Gold operating margin (average realized price less consolidated Costs applicable to sales) of $737 per ounce in 2010, an increase of 30% over 2009 compared to an increase of 25% in the average realized gold price for the same period;
 
  •  Record Net income attributable to Newmont stockholders of $4.63 per share, basic;
 
  •  Record Cash flow from continuing operations of $3,180, an increase of 9% over 2009; and
 
  •  Net increase of 1.7 million ounces of gold reserves to 93.5 million ounces at December 31, 2010.
 
Advanced the development of our project pipeline.
 
  •  Akyem, Ghana — In January 2010 we received the mining lease from the Ghanaian government. We continue to progress into the development stage with an emphasis on project engineering and obtaining all required land access and permits. In 2010, we selected and mobilized the project engineering procurement and construction contractor, and we are advancing the project towards a construction decision in the first half of 2011. If all permits are secured on the currently articulated schedule, we expect this project to commence production in late 2013 or early 2014. At December 31, 2010, we reported 7.2 million ounces of gold reserves at Akyem;
 
  •  Conga, Peru — Feasibility studies on our preferred option were completed in late 2009 and we continue to progress into the development stage with an emphasis on project engineering and obtaining all required permits. In 2010, we selected and mobilized the project engineering procurement and construction contractor. In October 2010, the project’s Environmental Impact Assessment was approved by the Peruvian authorities. A construction decision is expected in the first half of 2011. If all permits are secured, production is expected to commence in late 2014 or early 2015. At December 31, 2010 we reported 6.1 million attributable ounces of gold reserves and 1,660 million attributable pounds of copper reserves at Conga; and
 
  •  Hope Bay, Nunavut, Canada — Hope Bay is an 80 kilometer district in the Canadian arctic and is one of the last known undeveloped greenstone belts in the world. The exploration success over the last few years continues to confirm the district’s significant long-term potential. In 2010, we commenced an underground decline at the Doris North deposit and expect the Doris phase 1 project to provide access for test stoping and development drilling in 2011 progressing to a construction decision by the end of 2011.
 
Implemented Business Excellence initiatives to further drive continuous improvement and business efficiencies throughout our organization.
 
  •  Continuing to improve our safety performance;
 
  •  Applying trained resources to identify and realize cost reductions, value creation and operational efficiencies;
 
  •  Maintaining our industry-leading environmental, social and community relations commitments;
 
  •  Remaining a leading member of the Dow Jones Sustainability World Index; and
 
  •  Investing in people and innovation.


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Summary of Consolidated Financial and Operating Performance
 
The table below highlights key financial and operating results:
 
                         
    Years Ended December 31,
    2010   2009   2008
 
Sales
  $ 9,540     $ 7,705     $ 6,124  
Income from continuing operations
  $ 3,144     $ 2,109     $ 1,147  
Net income
  $ 3,116     $ 2,093     $ 1,160  
Net income attributable to Newmont stockholders
  $ 2,277     $ 1,297     $ 831  
Per common share, basic
                       
Income from continuing operations attributable to Newmont stockholders
  $ 4.69     $ 2.68     $ 1.80  
Net income attributable to Newmont stockholders
  $ 4.63     $ 2.66     $ 1.83  
Adjusted net income(1)
  $ 1,893     $ 1,359     $ 792  
Adjusted net income per share(1)
  $ 3.85     $ 2.79     $ 1.74  
Gold ounces produced (thousands)
                       
Consolidated
    6,451       6,521       6,153  
Attributable to Newmont(2)
    5,392       5,237       5,201  
Copper pounds produced (millions)
                       
Consolidated
    600       504       285  
Attributable to Newmont
    327       227       128  
Gold ounces sold (thousands)
                       
Consolidated
    6,296       6,534       6,150  
Attributable to Newmont
    5,274       5,217       5,089  
Copper pounds sold (millions)
                       
Consolidated
    539       507       290  
Attributable to Newmont
    292       226       130  
Average price realized, net(3)
                       
Gold (per ounce)
  $ 1,222     $ 977     $ 874  
Copper (per pound)
  $ 3.43     $ 2.60     $ 2.59  
Costs applicable to sales(4)
                       
Gold (per ounce)
  $ 485     $ 411     $ 429  
Copper (per pound)
  $ 0.80     $ 0.64     $ 1.38  
 
 
(1) See “Non-GAAP Financial Measures” on page 72.
 
(2) Includes production from discontinued operations of 32 and 76 ounces in 2009 and 2008, respectively.
 
(3) After treatment and refining charges.
 
(4) Consolidated Costs applicable to sales excludes Amortization and Reclamation and remediation.
 
Consolidated Financial Performance
 
Sales increased 24% in 2010 compared to 2009 due to higher average realized gold and copper prices and higher consolidated copper pounds sold, partially offset by fewer consolidated gold ounces sold. The average realized gold price increased 25% to $1,222 per ounce in 2010 from $977 per ounce in 2009. The average realized copper price, including $120 favorable mark to market adjustments on provisionally priced copper sales and net of treatment and refining charges, increased 32% to $3.43 per pound in 2010 compared to $2.60 per pound in 2009. Copper pounds sold increased in 2010 compared to 2009 due to higher production at Batu Hijau and a full year of ramp-up


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production at Boddington. Gold ounces sold decreased in 2010 compared to 2009 due to higher concentrates held in inventory at December 31, 2010 and lower production in North and South America, partially offset by higher production in Asia Pacific, primarily Boddington. Costs applicable to sales increased 16% in 2010 compared to 2009 due to a full year of Boddington production and higher waste mining and milling costs, partially offset by lower gold sales volumes, higher by-product credits and a build-up of inventories and stockpiles. In addition, the effective income and mining tax rate was lower in 2010 due to $440 in benefits resulting from income tax planning for certain non-U.S. subsidiaries.
 
Liquidity
 
Our financial position was as follows:
 
                 
    At December 31,
    2010   2009
 
Debt (including current portion)
  $ 4,441     $ 4,809  
Newmont stockholders’ equity
  $ 13,345     $ 10,703  
Cash and cash equivalents
  $ 4,056     $ 3,215  
Investments (including current portion)
  $ 1,681     $ 1,242  
 
During 2010, our debt and liquidity positions were affected by the following:
 
  •  Net cash provided from continuing operations of $3,180;
 
  •  Capital expenditures of $1,402;
 
  •  Income and mining taxes paid of $1,185;
 
  •  Proceeds from the sale of Batu Hijau shares to noncontrolling interests of $229;
 
  •  Debt pre-payment of $368;
 
  •  Pension and other benefit contributions of $163;
 
  •  Acquisition of additional 17% Batu Hijau economic interest from noncontrolling interests for $110;
 
  •  Dividends paid to common shareholders of $246; and
 
  •  Dividends paid to noncontrolling interests of $462.
 
Looking Forward
 
We will continue to focus on operational and project excellence in 2011 to deliver on our plans and continue the advancement of our project pipeline, resulting in the following expectations for 2011:
 
  •  Attributable gold production of approximately 5.1 to 5.3 million ounces, primarily due to lower production at Batu Hijau as it moves into Phase 6 stripping, partially offset by higher production at Nevada and Ahafo;
 
  •  Costs applicable to sales per consolidated gold ounce sold of $560 to $590 due to lower production at Batu Hijau combined with higher costs for energy, labor and contracted services;
 
  •  Attributable copper production of approximately 190 to 220 million pounds at Costs applicable to sales per consolidated copper pound sold of approximately $1.25 to $1.50;
 
  •  We expect to close the Fronteer acquisition for approximately C$2,300 in the second quarter;
 
  •  Consolidated capital expenditures of approximately $2,700 to $3,000 in 2011, with approximately 40% to be spent on major project initiatives, including further development of the Akyem project in Ghana, the Conga project in Peru, the Hope Bay project in Canada and the Nevada project portfolio. The remaining 60% is expected to be spent on several expansion and


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  optimization projects, routine replacements, new project development and other mine life extension efforts;
 
  •  Exploration expense of approximately $335 to $345; and
 
  •  Advanced projects, research and development expense of approximately $405 to $415.
 
Certain key factors will affect our future financial and operating results. These include, but are not limited to, the following:
 
  •  Our 2011 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, the Conga project in Peru and the Long Canyon project in Nevada to be acquired from Fronteer 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.
 
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 and their components. 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


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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 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, 2010 and 2009, our stockpiles had a total carrying value of $1,786 and $1,387, respectively.
 
The following is a summary of our ore stockpiles:
 
                                 
    At December 31,     At December 31,  
    2010     2009     2010     2009  
    ($ in millions)     ($ per ounce)  
 
Gold
                               
Nevada
  $ 324     $ 269     $ 175     $ 150  
Yanacocha
    69       32       167       167  
Boddington
    192       46       348       189  
Other Australia/New Zealand
    145       121       308       282  
Batu Hijau
    142       133       172       140  
Ahafo
    121       72       307       252  
                                 
Total/Weighted Average
  $ 993     $ 673     $ 220     $ 173  
                                 
 


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    At December 31,     At December 31,  
    2010     2009     2010     2009  
    ($ in millions)     ($ per pound)  
 
Copper
                               
Boddington
  $ 56     $ 13     $ 0.95     $ 0.51  
Batu Hijau
    737       701       0.47       0.38  
                                 
Total/Weighted Average
  $ 793     $ 714     $ 0.49     $ 0.38  
                                 
 
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, 2010 included production cost and capitalized expenditure assumptions unique to each operation, a long-term gold price of $1,100 per ounce, a long-term copper price of $3.00 per pound and U.S. to Australian dollar exchange rate of $0.90 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 2008, we recorded a write-down of stockpiles to NRV of $2.
 
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.
 
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, 2010 apart from production cost and capitalized expenditure assumptions unique to each operation included a long-term gold price of $1,100 per ounce. If short-term and long-term metals prices

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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. At December 31, 2010 and 2009, our leach pads had a total carrying value of $588 and $518, respectively.
 
The following is a summary of our ore on leach pads:
 
                                 
    At December 31,     At December 31,  
    2010     2009     2010     2009  
    ($ in millions)     ($ per ounce)  
 
Gold
                               
Nevada
  $ 155     $ 176     $ 431     $ 362  
La Herradura
    6       5       526       450  
Yanacocha
    427       337       558       357  
                                 
Total/Weighted Average
  $ 588     $ 518     $ 517     $ 360  
                                 
 
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. 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 future cash flows for each mine site reporting unit at December 31, 2010 apart from production cost and capitalized expenditure assumptions unique to each operation, included a long-term gold price of $1,100 per ounce, a long-term copper price of $3.00 per pound and U.S. to Australian dollar exchange rate of $0.90 per A$1.00. During 2008, we recorded an impairment of $120 to reduce the carrying value of property, plant and mine development as part of Write-down 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.
 
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.


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Derivative Instruments
 
With the exception of the Call Spread Transactions (as described in Note 14 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, 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 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 and will be recognized in the statements of consolidated income 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 would be reclassified to the statements of consolidated income immediately.
 
Reclamation and Remediation 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. Reclamation obligations are based on when the spending for an existing environmental disturbance will occur. We review, on at least an annual basis, the reclamation obligation at each mine site in accordance with guidance for accounting for asset retirement obligations.
 
Reclamation obligations 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.
 
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 to 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.


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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. 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 and mining tax expense.
 
Consolidated Financial Results
 
Gold Sales increased $1,306 in 2010 compared to 2009 due to a $245 per ounce increase in the average realized price after treatment and refining charges, partially offset by 238,000 fewer ounces sold. Gold Sales increased $1,014 in 2009 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. 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,  
    2010     2009     2008  
 
Consolidated gold sales:
                       
Gross before provisional pricing
  $ 7,706     $ 6,397     $ 5,387  
Provisional pricing mark-to-market
    41       15       (2 )
                         
Gross after provisional pricing
    7,747       6,412       5,385  
Less: Treatment and refining charges
    (55 )     (26 )     (13 )
                         
Net
  $ 7,692     $ 6,386     $ 5,372  
                         
Consolidated gold ounces sold (thousands)
    6,296       6,534       6,150  
Average realized gold price (per ounce):
                       
Gross before provisional pricing
  $ 1,224     $ 979       876  
Provisional pricing mark-to-market
    7       2        
                         
Gross after provisional pricing
    1,231       981       876  
Less: Treatment and refining charges
    (9 )     (4 )     (2 )
                         
Net
  $ 1,222     $ 977       874  
                         
 
The change in consolidated gold sales is due to:
 
                 
    2010 vs.
    2009 vs.
 
    2009     2008  
 
Increase (decrease) in consolidated ounces sold
  $ (234 )   $ 337  
Increase in average realized gold price
    1,569       690  
Increase in treatment and refining charges
    (29 )     (13 )
                 
    $ 1,306     $ 1,014  
                 
 
Copper Sales increased $529 in 2010 compared to 2009 due to an $0.83 per pound increase in the average realized price after treatment and refining charges and 32 million additional pounds sold.


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Copper Sales increased $567 in 2009 compared to 2008 due to 217 million additional pounds sold. For a complete discussion regarding variations in copper volumes, see Results of Consolidated Operations below.
 
The following analysis reflects the changes in consolidated copper sales:
 
                         
    Years Ended December 31,  
    2010     2009     2008  
 
Consolidated copper sales:
                       
Gross before provisional pricing
  $ 1,842     $ 1,283     $ 878  
Provisional pricing mark-to-market gain
    120       173       (47 )
                         
Gross after provisional pricing
    1,962       1,456       831  
Less: Treatment and refining charges
    (114 )     (137 )     (79 )
                         
Net
  $ 1,848     $ 1,319     $ 752  
                         
Consolidated copper pounds sold (millions)
    539       507       290  
Average realized copper price (per pound):
                       
Gross before provisional pricing
  $ 3.42     $ 2.53     $ 3.03  
Provisional pricing mark-to-market gain
    0.22       0.33       (0.16 )
                         
Gross after provisional pricing
    3.64       2.86       2.87  
Less: Treatment and refining charges
    (0.21 )     (0.26 )     (0.28 )
                         
Net
  $ 3.43     $ 2.60     $ 2.59  
                         
 
The change in consolidated copper sales is due to:
 
                 
    2010 vs.
    2009 vs.
 
    2009     2008  
 
Increase in consolidated pounds sold
  $ 88     $ 623  
Increase in average realized copper price
    418       2  
Decrease (increase) in treatment and refining charges
    23       (58 )
                 
    $ 529     $ 567  
                 


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The following is a summary of consolidated gold and copper sales, net:
 
                         
    Years Ended December 31,  
    2010     2009     2008  
 
Gold
                       
North America:
                       
Nevada
  $ 2,111     $ 1,943     $ 1,929  
La Herradura
    217       113       83  
                         
      2,328       2,056       2,012  
                         
South America:
                       
Yanacocha
    1,778       2,013       1,613  
Asia Pacific:
                       
Boddington
    834       101        
Batu Hijau
    776       550       261  
Kalgoorlie
    463       329       264  
Jundee
    416       413       342  
Tanami
    311       280       321  
Waihi
    131       116       123  
                         
      2,931       1,789       1,311  
                         
Africa:
                       
Ahafo
    655       528       435  
Corporate and other
                1  
                         
      7,692       6,386       5,372  
                         
Copper
                       
Asia Pacific:
                       
Batu Hijau
    1,686       1,292       752  
Boddington
    162       27        
                         
      1,848       1,319       752  
                         
    $ 9,540     $ 7,705     $ 6,124  
                         
 
Costs applicable to sales for gold increased in 2010 compared to 2009 due to a full year of Boddington production and higher mining and milling costs, partially offset by lower sales volumes, higher by-product credits and a build-up of inventories and stockpiles. The increase in 2009 compared to 2008 was due to higher sales volumes and higher royalty and workers participation costs, partially offset by higher by-product sales and lower diesel costs. Costs applicable to sales for copper increased in 2010 from 2009 due to higher production and waste mining costs at Batu Hijau and a full year of Boddington production. The decrease in 2009 from 2008 was due to lower diesel and mining costs, partially offset by higher labor costs and the start-up of Boddington production. For a complete discussion regarding variations in operations, see Results of Consolidated Operations below.
 
Amortization expense increased in 2010 from 2009 due to a full year of Boddington production, additional equipment purchases and higher capitalized mine development. Amortization expense 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 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


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complete discussion, see Results of Consolidated Operations, below. We expect Amortization expense to be approximately $1,025 to $1,035 in 2011.
 
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,  
    2010     2009     2008     2010     2009     2008  
 
Gold
                                               
North America:
                                               
Nevada
  $ 974     $ 1,019     $ 993     $ 271