Edgar Filing: NEWMONT MINING CORP /DE/

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED September 30, 2002

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

For the transition period from to

Commission File Number: 001-31240

NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction incorporation or organization)		84-1611629 (I.R.S. Employer Identification No.)

1700 Lincoln Street, Denver, Colorado (Address of principal executive offices)		80203 (Zip Code)

303-863-7414

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

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

There were 352,366,303 shares of common stock outstanding on November 11, 2002 (and 49,337,593 exchangeable shares).

PART I—FINANCIAL INFORMATION

ITEM 1. Financial Statements

NEWMONT MINING CORPORATION

STATEMENTS OF CONSOLIDATED OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Unaudited

	Three Months Ended September 30,
	2002			2001
	(in thousands, except per share)
				(as restated)
Sales and other income
Sales—gold	$	697,829		$	424,397
Sales—base metals, net		14,339			—
Royalties		7,900			268
Dividends, interest, foreign currency exchange and other income (loss)		8,278			(3,559	)

		728,346			421,106

Costs and expenses
Costs applicable to sales—gold		409,223			281,932
Costs applicable to sales—base metals		10,450			—
Depreciation, depletion and amortization		150,446			72,097
Exploration and research		25,356			12,843
General and administrative		29,742			13,676
Interest, net of capitalized interest of $1,618 and $2,881, respectively		33,082			24,643
Other		12,794			2,953

		671,093			408,144

Operating income		57,253			12,962
Gain (loss) on derivative instruments		(11,191	)		943

Pre-tax income before minority interest and equity income of affiliates		46,062			13,905
Income tax (expense) benefit		(11,157	)		9,694
Minority interest in income of affiliates		(28,341	)		(19,141	)
Equity income of affiliates		17,470			16,168

Net income	$	24,034		$	20,626
Preferred stock dividend		—			(1,870	)

Net income applicable to common shares	$	24,034		$	18,756

Net income	$	24,034		$	20,626
Other comprehensive income (loss), net of tax		(75,443	)		6,789

Comprehensive income (loss)	$	(51,409	)	$	27,415

Net income per common share, basic and diluted	$	0.06		$	0.10

Basic weighted average shares outstanding		401,422			195,880
Diluted weighted average shares outstanding		402,960			196,068
Cash dividends declared per common share	$	0.03		$	0.03

See Notes to Consolidated Financial Statements

NEWMONT MINING CORPORATION

STATEMENTS OF CONSOLIDATED OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

Unaudited

	Nine Months Ended September 30,
	2002			2001
	(in thousands, except per share)
				(as restated)
Sales and other income
Sales—gold	$	1,789,579		$	1,215,795
Sales—base metals, net		46,644			—
Royalties		22,902			447
Gain on sale of marketable securities of Lihir		47,298			—
Dividends, interest, foreign currency exchange and other income		23,536			3,140

		1,929,959			1,219,382

Costs and expenses
Costs applicable to sales—gold		1,104,818			808,651
Costs applicable to sales—base metals		29,572			—
Depreciation, depletion and amortization		387,726			222,475
Exploration and research		55,711			43,463
General and administrative		78,709			44,552
Interest, net of capitalized interest of $3,912 and $9,523, respectively		99,320			71,357
Merger and restructuring		—			60,510
Other		11,873			8,203

		1,767,729			1,259,211

Operating income (loss)		162,230			(39,829	)
Gain (loss) on derivative instruments		(14,338	)		1,797

Pre-tax income (loss) before minority interest, equity income of affiliates and cumulative effect of a change in accounting principle		147,892			(38,032	)
Income tax (expense) benefit		(44,280	)		8,994
Minority interest in income of affiliates		(54,760	)		(43,281	)
Equity income of affiliates		34,024			20,731

Net income before cumulative effect of a change in accounting principle		82,876			(51,588	)
Cumulative effect of a change in accounting principle, net of tax of $4,147 (Note 1)		7,701			—

Net income (loss)	$	90,577		$	(51,588	)
Preferred stock dividend		(3,738	)		(5,607	)

Net income (loss) applicable to common shares	$	86,839		$	(57,195	)

Net income (loss)	$	90,577		$	(51,588	)
Other comprehensive income (loss), net of tax		(17,737	)		12,088

Comprehensive income (loss)	$	72,840		$	(39,500	)

Net income (loss) before cumulative effect of a change in accounting principle per common share, basic and diluted	$	0.22		$	(0.29	)
Cumulative effect of a change in accounting principle per common share, basic and diluted		0.02			—

Net income (loss) per common share, basic and diluted	$	0.24		$	(0.29	)

Basic weighted average shares outstanding		360,577			194,720
Diluted weighted average shares outstanding		362,023			194,720
Cash dividends declared per common share	$	0.09		$	0.09

See Notes to Consolidated Financial Statements

NEWMONT MINING CORPORATION

CONSOLIDATED BALANCE SHEETS

(unaudited)

	September 30, 2002			December 31, 2001
	(in thousands)
				(as restated)
ASSETS
Cash and cash equivalents	$	292,148		$	149,431
Short-term investments		15,418			8,185
Accounts receivable		39,041			19,088
Inventories		522,042			384,202
Marketable securities of Lihir		—			66,918
Current portion of capitalized mining costs		44,013			71,486
Prepaid taxes		36,874			29,229
Current portion of deferred income tax assets		33,756			12,848
Other current assets		113,555			42,780

Current assets		1,096,847			784,167
Property, plant and mine development, net		4,190,694			2,116,206
Investments		1,019,002			552,492
Capitalized mining costs		18,859			20,145
Long-term inventory		89,832			92,689
Derivative instruments		3,889			2,621
Intangible assets		45,997			—
Deferred income tax assets		499,768			398,391
Other long-term assets		140,128			100,189
Goodwill		2,568,935			—

Total assets	$	9,673,951		$	4,066,900

LIABILITIES
Current portion of long-term debt	$	100,931		$	192,151
Accounts payable		124,896			80,884
Current portion of deferred income tax liabilities		14,589			7,914
Derivative instruments		65,034			1,331
Other accrued liabilities		325,799			212,734

Current liabilities		631,249			495,014
Long-term debt		1,725,428			1,234,718
Reclamation and remediation liabilities		260,287			176,934
Deferred revenue from sale of future production		53,841			53,841
Derivative instruments		391,748			4,559
Deferred income tax liabilities		545,646			135,134
Employee related benefits		162,938			156,896
Other long-term liabilities		197,299			88,661

Total liabilities		3,968,436			2,345,757

Commitments and contingencies (Notes 6, 8 and 15)
Minority interest in affiliates		330,399			251,726

STOCKHOLDERS’ EQUITY
Convertible preferred stock		—			11,500
Common stock		559,734			313,881
Additional paid-in capital		5,060,613			1,458,369
Accumulated other comprehensive loss		(27,185	)		(9,448	)
Retained deficit		(218,046	)		(304,885	)

Total stockholders’ equity		5,375,116			1,469,417

Total liabilities and stockholders’ equity	$	9,673,951		$	4,066,900

See Notes to Consolidated Financial Statements

NEWMONT MINING CORPORATION

STATEMENTS OF CONSOLIDATED CASH FLOW

Unaudited

	Nine Months Ended September 30,
	2002			2001
	(in thousands)
				(as restated)
Operating activities:
Net income (loss)	$	90,577		$	(51,588	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization		387,726			222,475
Amortization of capitalized mining costs, net		28,760			19,389
Deferred tax benefit		(24,170	)		(37,610	)
Foreign currency exchange (gain) loss		(9,990	)		5,283
Minority interest, net of dividends		50,760			38,082
Undistributed earnings of affiliates		(24,399	)		(20,731	)
Cumulative effect of change in accounting principle, net		(7,701	)		—
Gain on sale of marketable securities of Lihir		(47,298	)		—
Noncash merger and restructuring expenses		—			14,667
Gain on sale of assets and other		(5,916	)		(7,592	)
(Increase) decrease in operating assets:
Accounts receivable		17,765			(2,502	)
Inventories		(6,240	)		49,402
Other assets		49,013			21,785
Increase (decrease) in operating liabilities:
Accounts payable and other accrued liabilities		(27,272	)		(41,562	)
Other liabilities		(26,471	)		13,531

Net cash provided by operating activities		445,144			223,029

Investing activities:
Additions to property, plant and mine development		(238,171	)		(318,067	)
Proceeds from sale of short-term investments		407,443			—
Proceeds from sale of marketable securities of Lihir		84,002			—
Proceeds from settlement of cross currency swaps		50,816			—
Net cash effect of acquisitions		(88,114	)		—
Repayments from (advances to) joint ventures and affiliates		(24,750	)		8,780
Proceeds from asset sales and other		18,459			2,073

Net cash provided by (used in) investing activities		209,685			(307,214	)

Financing activities:
Repayment of short-term debt		—			(10,000	)
Proceeds from long-term debt		493,371			1,013,550
Repayment of long-term debt		(1,026,858	)		(931,196	)
Dividends paid on common and preferred stock		(37,931	)		(23,219	)
Decrease in restricted cash		—			40,000
Proceeds from stock issuances		67,964			5,366
Other		(4	)		479

Net cash provided by (used in) financing activities		(503,458	)		94,980

Effect of exchange rate changes on cash		(8,654	)		2,163

Net change in cash and cash equivalents		142,717			12,958
Cash and cash equivalents at beginning of period		149,431			77,558

Cash and cash equivalents at end of period	$	292,148		$	90,516

Supplemental information:
Interest paid, net of amounts capitalized of $3,912 and $9,523, respectively	$	95,624		$	65,389
Income taxes paid, net of refunds	$	65,920		$	56,379

See Notes to Consolidated Financial Statements

NEWMONT MINING CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Basis of Preparation of Financial Statements and Supplemental Accounting Policy Information

These unaudited interim consolidated financial statements of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Such rules and regulations allow the omission of certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles as long as the statements are not misleading. In the opinion of management, all adjustments necessary for a fair presentation of these interim statements have been included, including adjustments designed to capture the anticipated restatements described below. Numbers included have been restated to reflect the necessary adjustments. These adjustments are of a normal recurring nature. These interim financial statements should be read in conjunction with the consolidated financial statements of Newmont included in its 2001 Annual Report on Form 10-K and information on Form 8-K dated February 15, 2002, including Amendment No.1, filed on April 16, 2002, as well as any subsequent amendments to the Form 10-K and the Form 8-K.

The preparation of Newmont’s financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, as well as the reported amount of revenues and expenses during the reporting period. The most critical accounting principles upon which Newmont’s financial position and results of operations depends are those requiring estimates of proven and probable reserves, recoverable ounces therefrom, Newmont’s ability to renew the mining leases upon which certain of those reserves are located, and/or assumptions of future gold prices. Such estimates and assumptions affect the value of inventories (which are stated at the lower of average cost or net realizable value), the potential impairment of long-lived assets and the ability to realize income tax benefits associated with deferred tax assets. These estimates and assumptions also affect the rate at which depreciation and amortization are charged to earnings. As noted above, commodity prices significantly affect Newmont’s profitability and cash flow. In addition, management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties as described below. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions.

On February 13, 2002, Newmont stockholders approved adoption of an Agreement and Plan of Merger that provided for a restructuring of Newmont to facilitate the February 2002 acquisitions described below and to create a flexible corporate structure. Newmont merged with an indirect, wholly-owned subsidiary that resulted in Newmont (or “Old Newmont”) becoming a direct, wholly-owned subsidiary of a newly formed holding company. The new holding company, previously a direct, wholly-owned subsidiary of Old Newmont, was renamed Newmont Mining Corporation. There was no impact to the Consolidated Financial Statements of Newmont as a result of this restructuring and former stockholders of Old Newmont became stockholders of the new holding company. Old Newmont was subsequently renamed Newmont USA Limited.

Restatements

As further discussed in Note 16, Newmont has determined that certain adjustments are required to the Consolidated Financial Statements for the three-month and nine-month periods ended September 30, 2001 and at December 31, 2001. Overall the adjustments reduced net income in the third quarter of 2001 by $2.8 million, or $0.01 per share, and increased the net loss for the nine months ended September 30, 2001 by $6.1 million, or $0.03 per share. The adjustments also increased the retained deficit of the Company at December 31, 2001 by $13.0 million. These adjustments were necessary (i) to account for a prepaid forward sales contract and a forward purchase contract as a single borrowing; (ii) to correct depreciation rates on certain mining assets at the

Company’s subsidiary, Minera Yanacocha; and (iii) to record the impact in the Company’s investment in Batu Hijau, accounted for under the equity method, for incorrectly including non-reserve material in its depreciation calculations. See Note 16 for a detailed description of the effects of this restatement.

Newmont will also restate the Financial Statements contained in its previously filed Amendment No. 1 to the March 31, 2002 Form 10-Q/A, the June 30, 2002 Form 10-Q and the December 31, 2001 Form 10-K to reflect the restatement adjustments discussed in Note 16. All December 31, 2001 comparative financial information contained in this Form 10-Q is considered unaudited until such amendments are filed in the fourth quarter of 2002.

Mining Costs

In general, mining costs are charged to Costs applicable to sales as incurred. However, certain mining costs associated with open-pit deposits that have diverse grades and waste-to-ore ratios over the mine life are deferred. These mining costs are incurred on mining activities that are normally associated with the removal of waste rock at open-pit mines and which is commonly referred to as “deferred stripping.” Amortization, which is calculated using the unit-of-production method based on estimated recoverable ounces of proven and probable gold reserves, is charged to operating costs as gold is produced and sold, using a stripping ratio calculated as the ratio of total tons to be moved to total gold ounces to be recovered over the life of the mine, and result in the recognition of the costs of these mining activities over the life of the mine as gold is produced and sold. The application of the accounting for deferred stripping costs and the resulting differences in timing between costs capitalized and amortization generally results in an asset on the balance sheet (capitalized mining costs), although it is possible that a liability could arise if amortization exceeds costs capitalized.

Historically, Newmont classified capitalized mining costs as a component of Property, Plant and Mine Development on the Consolidated Balance Sheets. Effective January 1, 2002, Newmont began classifying these costs as separate line items, Capitalized mining costs and Current portion of capitalized mining costs, on the Consolidated Balance Sheets. Total capitalized mining costs as of September 30, 2002 were $62.9 million, including current portion of $44.0 million. Total capitalized mining costs as of December 31, 2001 of $91.6 million, including current portion of $71.5 million, have been reclassified to conform to the current period’s presentation. In addition, Newmont has historically classified additions to capitalized mining costs as a component of Additions to property, plant and mine development in Investing activities in the Statements of Consolidated Cash Flows. At June 30 2002, Newmont also began classifying additions to capitalized mining costs as a component of Amortization of capitalized mining costs, net in Operating activities in the Statements of Consolidated Cash Flows. Additions to capitalized mining costs for the nine months ended September 30, 2002 were $13.5 million. Additions to capitalized mining costs for the nine months ended September 30, 2001 in the amount of $11.3 million have been reclassified to conform to the current period’s presentation. The foregoing changes, which have no impact to reported earnings, have been made to more accurately reflect the operating nature of the deferred stripping method.

The average remaining life of the open-pit mine operations where the Company capitalizes mining costs is six years, which represents the time period over which the capitalized mining balance will be amortized. The amortization of these capitalized costs is reflected in the income statement in a pro-rata manner over the remaining life of the open-pit mine operations so that no unamortized balance remains at mine closure. Cash flows from the Company’s individual mining operations are reviewed regularly, and at least annually, for the purpose of assessing whether any write downs to the capitalized mining cost balances are required.

The life-of-mine weighted average waste-to-ore ratio is calculated based on tons mined during the period and is calculated as the ratio of waste tons mined to total ore tons mined. For the three-month periods ended September 30, 2002 and 2001, the waste-to-ore ratio was 1.02 to 1 and 1.32 to 1, respectively, and for the nine- month periods ended September 30, 2002 and 2001 the waste-to-ore ratio was 1.20 to 1 and 1.56 to 1, respectively. The decrease in the waste-to-ore ratios for the comparative three and nine month periods ended September 30, 2002 and 2001, respectively, resulted primarily from an increase in ore tons mined at Minera Yanacocha.

Significant payments related to the acquisition of land and mineral rights are capitalized. The recoverability of the cost of land and mineral rights is significantly impacted by exploration drilling results. The length of time between the acquisition of land and mineral rights and the time when management performs its exploration work will vary depending on the prioritization of the Company’s exploration projects and the magnitude of its exploration budget. Management reviews the carrying values of land and mineral rights at least annually and when events or changes in circumstances indicate that the carrying values may not be recoverable. If a mineable ore body is discovered, such costs are amortized when production begins using the unit-of-production method based on proven and probable reserves. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined the property has no future economic value.

Change In Accounting Policy—Property, Plant and Mine Development, Net

During the third quarter, Newmont changed its accounting policy, retroactive to January 1, 2002, with respect to depreciation, depletion and amortization (“DD&A”) of property, plant and mine development to exclude future estimated development costs expected to be incurred for certain underground operations. Previously, the Company had included these costs and associated reserves in its depreciation calculations at certain of its underground mining operations. In addition, Newmont further revised its policy such that costs incurred to access specific ore blocks or areas that only provide benefit over the life of that area are depreciated over the reserves associated with the specific ore area. These changes were made to better match DD&A with the associated ounces of gold sold and to remove the inherent uncertainty in estimating future development costs in arriving at DD&A rates. The cumulative effect of this change through December 31, 2001 increased net income by $7.7 million, net of tax of $4.1 million, and increased earnings per basic and diluted common share by $0.02 per share.

The effect of the change was to reduce DD&A expense by $1.6 million, $2.4 million and $0.5 million in the first, second and third quarters of 2002, respectively. The effect of the change to net income was an increase of $1.0 million, $1.6 million and $0.3 million in the first, second and third quarters of 2002, respectively. On a pro forma basis, the effect of the change was to reduce DD&A expense by $0.6 million and $0.3 million in the first and third quarters of 2001, respectively, and to increase DD&A expense by $0.6 million in the second quarter of 2001. The pro forma effect of the change to net income was an increase of $0.4 million and $0.2 million in the first and third quarters of 2001, respectively, and a decrease to net income of $0.4 million in the second quarter of 2001. There was no pro forma impact to earnings per share in any of the periods.

Newmont’s revised Property, plant and mine development accounting policy is as follows:

Mineral exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, costs incurred prospectively to develop the property are capitalized as incurred and are depreciated using the unit-of-production depreciation method over the estimated life of the ore body based on proven and probable reserves. At the Company’s surface mines, these costs include costs to further delineate the ore body and remove overburden to initially expose the ore body during the development stage of the project. At the Company’s underground mines, these costs include the cost of building of access ways, shaft sinking and access, lateral development, drift development, ramps and infrastructure development. To the extent that these costs benefit the entire ore body, they are depreciated on a units-of-production basis over the estimated life of the ore body based on proven and probable reserves. Costs incurred to access specific ore blocks or areas that only provide benefit of access to that area are depreciated over the proven and probable reserves of the specific ore area.

Major development costs incurred after the commencement of production, are capitalized as incurred and are depreciated using the unit-of-production depreciation method based on proven and probable reserves.

Ongoing development expenditures to maintain production are charged to operations as incurred.

Accounting for Merchant Banking Activities

Newmont accounts for its merchant banking activities on a historical cost basis in a separate wholly-owned subsidiary, which is included in the consolidated financial statements. Merchant banking activities include the development of value optimization strategies for operating and non operating assets, managing the equity investment portfolio, business development activities related to potential merger and acquisition analysis and negotiations, managing and building the royalty business, mobilizing and monetizing inactive exploration properties, capitalizing on Newmont’s proprietary technology know-how and acting as an internal resource for other corporate divisions to improve and maximize business outcomes. For segment reporting purposes, the merchant banking business is considered to be a separate operating segment because it engages in activities from which it earns revenues and incurs expenses and its operating results are regularly and separately reviewed by the Chief Operating Decision Maker.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Foreign Currency Translation

The functional currency for the majority of the Company’s operations, including the Australian operations, is the U.S. dollar. The functional currency of the Canadian operations is the Canadian dollar. All assets and liabilities recorded in functional currencies other than U.S. dollars are translated at current exchange rates. The resulting adjustments are charged or credited directly to Accumulated other comprehensive income (loss) in Stockholders’ equity. Revenues and expenses in foreign currencies are translated at the weighted average exchange rates for the period. All realized and unrealized transaction gains and losses are included in income in Dividends, interest, foreign currency exchange and other income. References to “A$” refers to Australian currency, and “$” or “US$”, to United States currency.

(2) Acquisitions of Normandy and Franco-Nevada

In November 2001, Newmont announced proposed acquisitions of Normandy Mining Limited (“Normandy”), an Australian company, and Franco-Nevada Mining Corporation Limited (“Franco-Nevada”), a Canadian company. On February 16, 2002, Newmont completed the acquisition of Franco-Nevada pursuant to a Plan of Arrangement. On February 20, 2002, Newmont gained control of Normandy through an off-market bid for all of the ordinary shares in the capital of Normandy. For accounting purposes, the effective date of the Normandy acquisition was the close of business on February 15, 2002, when Newmont received binding tenders for more than 50% of the shares of Normandy. Accordingly, the results of operations of Normandy and Franco-Nevada have been included in the accompanying financial statements from February 16, 2002 forward. On February 26, 2002, when the off-market bid for Normandy expired, Newmont had a relevant interest in more than 96% of Normandy’s outstanding shares. Newmont exercised its compulsory acquisition rights under Australian law to acquire the remaining shares of Normandy in April 2002.

Consideration paid for Normandy included 3.85 shares of Newmont common stock for every 100 ordinary shares of Normandy (including ordinary shares represented by American depository receipts) plus A$0.50 per Normandy share, or the U.S. dollar equivalent of that amount for Normandy stockholders outside Australia. Pursuant to a Canadian Plan of Arrangement, Newmont acquired Franco-Nevada in a stock-for-stock transaction in which Franco-Nevada common stockholders received 0.8 of a share of Newmont common stock or 0.8 of a Canadian exchangeable share (exchangeable for Newmont common), for each common share of Franco-Nevada.

The exchangeable shares are substantially equivalent to Newmont common shares. The purchase price for these acquisitions totaled $4.4 billion, composed of 197.4 million Newmont shares (or share equivalents), $462.1 million in cash and approximately $90 million of direct costs. The value of Newmont shares (or share equivalents) was $19.01 per share based on the average market price of the shares over the two-day period before and after January 2, 2002, the last trading day before the final and revised terms for the acquisitions were announced.

The combination of Newmont, Normandy and Franco-Nevada was executed to create a platform for rational growth and for delivering superior returns to shareholders. With a larger global operating base, a broad and balanced portfolio of development projects and a stable income stream from mineral royalties and investments, the combined company will have opportunities to continually optimize returns. Newmont also expects to realize synergies through rationalization of corporate overhead and exploration programs, realization of operating efficiencies, and reductions in operating and procurement costs, interest expense and income taxes. Following the February 2002 acquisitions, Normandy was renamed Newmont Australia Limited and Franco-Nevada was renamed Newmont Mining Corporation of Canada Limited.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 141 “Business Combinations,” the acquisitions were accounted for using the purchase method of accounting whereby assets acquired and liabilities assumed were recorded at their fair market values as of the date of acquisition. The excess of the purchase price over such fair value was recorded as goodwill. In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill was preliminarily assigned to specific reporting units. Goodwill and other identifiable intangibles not subject to amortization will be reviewed for possible impairment at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. The following reflects the preliminary purchase allocation for the acquisition of 100% of Normandy (in millions, except per share data; unaudited):

Shares of NMC common stock issued to Normandy stockholders, including shares attributable to Franco-Nevada’s 19.8% investment in Normandy		86.8
Value of NMC stock per share	$	19.01

Fair value of NMC common stock issued	$	1,649.9
Plus-Cash consideration of A$0.50 per share		462.1
Plus-Fair value of Normandy stock options cancelled by Newmont		6.0
Plus-Estimated direct acquisition costs incurred by Newmont		60.0
Plus-Other		1.0

Total Purchase Price		2,179.0
Plus-Fair value of liabilities assumed by Newmont:
Current liabilities, excluding accrued acquisition costs and settlement of stock options		195.7
Long-term debt, including current portion		935.7
Derivative instrument liabilities		414.5
Other long-term liabilities		453.1
Minority interests acquired		37.2
Less-Fair value of assets acquired by Newmont:
Current assets		(460.6	)
Property, plant and equipment, including mineral reserves		(1,171.9	)
Purchased undeveloped mineral interests		(640.9	)
Exploration properties		(33.1	)
Equity investments in mining operations		(216.5	)
Other long-term assets		(279.1	)
Intangible assets		(12.7	)

Residual purchase price allocated to goodwill	$	1,400.4

The following table reflects the preliminary purchase allocation for the acquisition of Franco-Nevada (in millions, except per share data; unaudited):

Shares of NMC common stock (or equivalents) issued to Franco-Nevada stockholders, excluding shares attributable to Franco-Nevada’s 19.8% investment in Normandy		110.6
Value of NMC stock per share	$	19.01

Fair value of NMC common stock issued	$	2,101.2
Plus-Fair value of Franco-Nevada options assumed by Newmont		30.4
Plus-Fair value of Franco-Nevada warrants assumed by Newmont		13.3
Plus-Estimated direct acquisition costs incurred by Newmont		30.0

Total Purchase Price		2,174.9
Plus-Fair value of liabilities assumed by Newmont:
Current liabilities, excluding accrual of acquisition costs		8.5
Other liabilities		209.9
Less-Fair value of assets acquired by Newmont:
Current assets		(712.6	)
Fair value of mining royalty properties		(404.2	)
Fair value of investments in affiliated companies (excluding the 19.8% interest in Normandy)		(108.0	)

Residual purchase price allocated to goodwill	$	1,168.5

The purchase price allocations for Normandy and Franco-Nevada are preliminary and will be finalized following the completion of an independent appraisal expected to be available by the end of 2002. The final purchase price allocations may differ from the preliminary allocation presented above, particularly with respect to the amounts allocated to acquired property, plant and equipment, mineral reserves, undeveloped mineral interests, exploration properties, equity investments in mining operations, intangibles and goodwill. The final purchase price allocation may result in increases in future depreciation, depletion and amortization charges. The Company does not currently anticipate this goodwill to be deductible for tax purposes.

For information purposes only, the following unaudited pro forma data reflect the consolidated results of operations of Newmont as if the acquisitions of Normandy and Franco-Nevada had taken place on January 1, 2001 and 2002, respectively, (in millions, except per share data):

	Nine months ended
	September 30, 2002			September 30, 2001
	(unaudited)
				(restated)
Sales and other income	$	2,085.3		$	1,931.4
Net loss applicable to common shares	$	(52.3	)	$	(136.1	)
Basic and diluted loss per common share	$	(0.13	)	$	(0.35	)

Basic and diluted weighted average common shares outstanding	$	396.5		$	392.0

On a pro forma basis during the first nine months of 2002 and 2001, the net loss reflects mark-to-market losses on derivative instruments totaling $174.7 million and $132.3 million, respectively, net of tax. The above pro forma amounts do not include the application of hedge accounting prior to the acquisition to significant portions of acquired derivative instruments as hedge accounting documentation was not in place during these periods. The net loss for the first nine months of 2001 includes $43.7 million of expenses, net of tax, associated with Newmont’s merger with Battle Mountain Gold Company (“Battle Mountain”). The pro forma information is not indicative of the results of operations that would have occurred had the acquisitions been consummated on January 1, 2001 and 2002, respectively. The information is not indicative of the combined Company’s future results of operations.

As part of the purchase of Normandy and Franco-Nevada during the first nine months of 2002, Newmont acquired identifiable intangible assets, other than goodwill, of $46.0 million, primarily for exploration properties. These intangible assets are not subject to amortization and will be tested for impairment at least annually.

The allocation of goodwill to reporting units is preliminary and is expected to be finalized by the end of 2002; therefore, the final allocation could differ from the preliminary allocation. Changes in the carrying amount of goodwill by reporting unit during the first nine months of 2002 are summarized in the following table (in millions, and unaudited):

	Nevada		Other North America		Total North America		Yanacocha		Other South America		Total South America
Balance at January 1, 2002	$	—	$	—	$	—	$	—	$	—	$	—
Preliminary purchase price allocation		252.6		—		252.6		—		—		—
Impairment losses		—		—		—		—		—		—
Gain (loss) on disposal of separate reporting units		—		—		—		—		—		—

Balance at March 31, 2002	$	252.6	$	—	$	252.6	$	—	$	—	$	—
Preliminary purchase price allocation for compulsory acquisition of Normandy		9.8		—		9.8		—		—		—
Impairment losses		—		—		—		—		—		—
Gain (loss) on disposal of separate reporting units		—		—		—		—		—		—

Balance at June 30, 2002	$	262.4	$	—	$	262.4	$	—	$	—	$	—

Balance at September 30, 2002	$	262.4	$	—	$	262.4	$	—	$	—	$	—


	Pajingo		Other Australia		Total Australia		Zarafshan-Newmont		Other International Operations		Total Gold
Balance at January 1, 2002	$	—	$	—	$	—	$	—	$	—	$	—
Preliminary purchase price allocation		75.2		601.1		676.3		—		288.7		1,217.6
Impairment losses		—		—		—		—		—		—
Gain (loss) on disposal of separate reporting units		—		—		—		—		—		—

Balance at March 31, 2002	$	75.2	$	601.1	$	676.3	$	—	$	288.7	$	1,217.6
Preliminary purchase price allocation for compulsory acquisition of Normandy		3.3		26.5		29.8		—		14.5		54.1
Impairment losses		—		—		—		—		—		—
Gain (loss) on disposal of separate reporting units		—		—		—		—		—		—

Balance at June 30, 2002	$	78.5	$	627.6	$	706.1	$	—	$	303.2	$	1,271.7

Balance at September 30, 2002	$	78.5	$	627.6	$	706.1	$	—	$	303.2	$	1,271.7

	Base Metals		Exploration		Merchant Banking		Corporate and Other		Consolidated
Balance at January 1, 2002	$	—	$	—	$	—	$	—	$	—
Preliminary purchase price allocation		159.0		—		1,130.3		—		2,506.9
Impairment losses		—		—		—		—		—
Gain (loss) on disposal of separate reporting units		—		—		—		—		—

Balance at March 31, 2002	$	159.0	$	—	$	1,130.3	$	—	$	2,506.9
Preliminary purchase price allocation for compulsory acquisition of Normandy		7.9		—		—		—		62.0
Impairment losses		—		—		—		—		—
Gain (loss) on disposal of separate reporting units		—		—		—		—		—

Balance at June 30, 2002	$	166.9	$	—	$	1,130.3	$	—	$	2,568.9

Balance at September 30, 2002	$	166.9	$	—	$	1,130.3	$	—	$	2,568.9

(3) Inventories

	At September 30, 2002		At December 31, 2001
	(unaudited and in thousands)
Current:
Ore and in-process inventories	$	365,106	$	280,419
Precious metals		49,714		10,302
Materials and supplies		107,112		92,556
Other		110		925

	$	522,042	$	384,202

Long-term:
Ore in stockpiles	$	89,832	$	92,689

(4) Property, Plant and Mine Development

	At September 30, 2002							At December 31, 2001
	Cost		Accumulated Depreciation, Depletion and Amortization			Net Book Value		Cost		Accumulated Depreciation, Depletion and Amortization			Net Book Value
	(unaudited and in thousands)
										(restated)
Land and Mineral Claims
Mining:
Producing property
Net smelter returns	$	243,079	$	(8,022	)	$	235,057	$	—	$	—		$	—
Net profit interest		57,699		(970	)		56,729		—		—			—
Working interest		1,486,616		(228,211	)		1,258,405		281,359		(166,259	)		115,100

		1,787,394		(237,203	)		1,550,191		281,359		(166,259	)		115,100

Non-producing property
Net smelter returns		12,367		—			12,367		—		—			—
Net profit interest		—		—			—		—		—			—
Working interest		—		—			—		—		—			—

		12,367		—			12,367		—		—			—

Total land and mineral claims		1,799,761		(237,203	)		1,562,558		281,359		(166,259	)		115,100

Oil and gas
Producing property
Net refining returns		50,947		(3,357	)		47,590		—		—			—
Working interest		24,022		(762	)		23,260		—		—			—

		74,969		(4,119	)		70,850		—		—			—
Non-producing property
Net refining returns		13,008		—			13,008		—		—			—
Working interest		4,747		—			4,747		—		—			—

		17,755		—			17,755		—		—			—

Total oil and gas		92,724		(4,119	)		88,605		—		—			—

		1,892,485		(241,322	)		1,651,163		281,359		(166,259	)		115,100

Buildings and equipment		3,942,031		(2,298,121	)		1,643,910		3,491,231		(2,068,149	)		1,423,082
Mine development		1,340,237		(631,920	)		708,317		1,054,725		(574,555	)		480,170
Construction-in-progress		187,304		—			187,304		97,854		—			97,854

Total	$	7,362,057	$	(3,171,363	)	$	4,190,694	$	4,925,169	$	(2,808,963	)	$	2,116,206

(5) Investments

	At September 30, 2002		At December 31, 2001
	(unaudited and in thousands)
Investments in affiliates:
Batu Hijau	$	603,037	$	552,492
TVX Newmont Americas		168,564		—
Echo Bay Mines		109,796		—
Australian Magnesium Corporation		33,526		—
Australian Gold Refinery		11,213		—

		926,136		552,492

Other:
Infrastructure bond		92,866		—

	$	1,019,002	$	552,492

Investments in Affiliated Companies

Batu Hijau

Newmont has an indirect 45% interest in P.T. Newmont Nusa Tenggara (PTNNT), the owner of the Batu Hijau copper/gold mine in Indonesia, through its 56.25% interest in the Nusa Tenggara Partnership (NTP) which owns 80% of PTNNT. The equity investment in Batu Hijau was $603.0 million and $552.5 million at September 30, 2002 and December 31, 2001, respectively, based on accounting principles generally accepted in the U.S. Differences between 56.25% of NTP’s net assets and Newmont’s investment include (i) $197.8 million for the fair market value adjustment recorded by NTP in conjunction with Newmont’s initial contribution, (ii) $30.5 million for intercompany charges, (iii) $110.5 million for the fair market value adjustment recorded by Newmont in conjunction with the purchase of a subsidiary minority interest, and (iv) $139.8 million for contributions recorded by Newmont that were classified as debt by NTP. Certain of these amounts are amortized or depreciated on a unit-of-production basis. (See Note 14 for a description of Newmont’s equity income (loss) in Batu Hijau, where the net income (loss) reflects the elimination of interest between PTNNT and NTP).

PTNNT’s senior debt $1.0 billion project financing facility was guaranteed by Newmont and its partner until project completion tests were met in October 2000, at which time such debt became non-recourse to Newmont. Scheduled repayments of this debt are in semi-annual installments of $43.4 million through November 2010, and $22.1 million from May 2011 through November 2013.

On May 9, 2002, PTNNT completed a restructuring of its $1.0 billion project financing facility that provides PTNNT the capability to defer up to a total of $173.5 million in principal payments scheduled for 2002 and 2003. Any deferred principal amounts will be repaid between 2004 and 2010. Under this restructuring, PTNNT is not permitted to pay dividends or make other restricted payments to NTP’s partners as long as any amount of deferred principal is outstanding. However, there is no restriction on prepaying any of the deferred principal amounts. Amounts outstanding under the project financing facility total $913.3 million at September 30, 2002.

Newmont and its partner provide a contingent support line of credit to PTNNT. During the first nine months of 2002, Newmont funded $24.8 million under this contingent support facility as its pro-rata share for capital expenditures. Additional support from NTP’s partners available under this facility amounts to $115.0 million, of which Newmont’s pro-rata share is $64.7 million.

Following is NTP summarized financial information based on U.S. generally accepted accounting principles:

	Three months ended September 30,				Nine months ended September 30,
	2002		2001		2002		2001
	(unaudited and in thousands)
Revenues, net of smelter and refining costs	$	95,922	$	102,354	$	261,910	$	278,885
Revenues from by-product sales credited to production costs	$	53,837	$	52,027	$	113,311	$	115,100
Net income (loss) (1)	$	16,051	$	17,789	$	20,944	$	(2,513	)

	At September 30, 2002		At December 31, 2001
	(unaudited and in thousands)
Current assets	$	274,523	$	164,723
Property, plant and mine development, net (1)	$	1,887,608	$	1,948,072
Other assets (1)	$	266,144	$	248,177
Debt and related interest to partners and affiliate	$	258,583	$	254,891
Other current liabilities	$	190,740	$	201,884
Long-term debt-third parties (including current portion)	$	935,771	$	935,771
Other liabilities	$	59,249	$	55,130

(1)

As restated. See Note 16.

The Batu Hijau operation produces a metal concentrate, which contains payable copper and gold and minor values of payable silver. PTNNT has entered into long-term contracts for the sale of these metal concentrates with highly reputable refiners in Japan, Korea, Australia, China (“Non-European Refiners”) and Europe (“European Refiners”). In accordance with the contracts, title to the concentrates and the risk of loss are passed to the buyer when the concentrates are moved over the vessel’s rail at the Port (loading Port for Non-European Refiners and unloading Port for European Refiners). The contract terms provide that 90% of a provisional sales price, which is calculated in accordance with terms specified in the individual contracts based on an initial assay and weight certificate, is collected within three business days after the concentrates arrive at the smelter (“final delivery”). Factors entering into the calculation of the provisional sales price are (1) metals prices, pursuant to the terms of related contracts, calculated using quoted London Metals Exchange (“LME”) prices for the second calendar week prior to shipment and (2) treatment and refining charges. The balance of the sales price is received at final settlement and is based on final assays and weights, and final metal prices during the respective metal quotational periods. The quotational period for copper is the average LME price in the third month following the month of final delivery. The quotational period for gold and silver is the average LME price in the month of shipment. Final delivery to Non-European Refiners and European Refiners takes approximately 14 days and 30 days, respectively. The majority of the Batu Hijau concentrates are shipped to Non-European Refiners. Accordingly, the time between initial recording of revenue and final settlement averages approximately three and one-half months but could be as long as four months.

In accordance with U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 101 (“SAB 101”), certain conditions must be met prior to recognizing revenue. These conditions are persuasive evidence of a contract exists; delivery has occurred; the price is fixed or determinable; and collectability is reasonably assured. In accordance with SAB 101, PTNNT recognizes metal sales revenues following: (1) the passage of title after the loading or unloading of the concentrates, (2) issuance of an initial assay and weight certificate, and (3) issuance of a provisional invoice. At this point in time, the sales price is determinable since it is based on defined contract terms, initial assays are available, and it can be reasonably estimated by reference to published price indices on actively and freely traded commodity exchanges. Additionally, there is no significant uncertainty as to collectability given that all of the refiners are of high-credit quality and that 90% of the provisional price is paid within 3 days of final delivery at the refiner.

Concentrate sales are initially recorded based on 100% of the provisional sales prices. Until final settlement occurs, adjustments to the provisional sales prices are made to take into account metal price changes, based upon the forward price for the estimated month of final settlement and metal quantities upon receipt of the final assay and weight certificates, if different from the initial certificate. The principal risks associated with recognition of sales on a provisional basis include metal price fluctuations between the date recorded and the date of final settlement. In addition, in the event of a significant decline in metal prices between the provisional pricing date and the final settlement-pricing period, it is reasonably possible that PTNNT would be required to return a portion of the sales proceeds received based on the provisional invoice. For the nine months ended September 30, 2002 and 2001, PTNNT had recorded revenues of $85 million and $71 million, respectively, which were subject to final pricing adjustments. The average price adjustment for copper was 2.8% and (3.9%) for the nine months ended September 30, 2002 and 2001, respectively. The average price adjustment for gold was 1.3% and (0.2%) for the nine months ended September 30, 2002 and 2001, respectively.

PTNNT’s sales based on a provisional sales price contain an embedded derivative which is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the forward LME price at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked-to-market through earnings each period prior to final settlement. At September 30, 2002, PTNNT had consolidated embedded copper derivatives on 129 million pounds recorded at an average price of $0.66 per pound. These derivatives are expected to be finally priced during the fourth quarter of 2002. A one-cent movement in the average price used for these derivatives will have an approximate $1.3 million impact on PTNNT’s 2002 net income.

PTNNT previously marked to market its provisional sales based on the month end spot prices. Effective January 1, 2002, PTNNT changed its methodology to mark to market its provisional sales based on the forward price for the estimated month of settlement. This change in methodology did not have a material effect on net income for the nine months ended September 30, 2002.

Revenue from the sale of by-products is credited to costs applicable to sales in the determination of net income for each period presented. These by-product commodities, gold and silver, represented 56% and 51% of revenues and reduced production costs by 72% and 61% for the three-month periods ended September 30, 2002 and 2001, respectively, and 43% and 41% of revenues and reduced production costs by 57% and 49% for the nine-month periods ended September 30, 2002 and 2001, respectively. Gold and silver revenues, which are recorded as by-product credits, are significant to the economics of the Batu Hijau operations. At current copper prices, the Batu Hijau operation would not be profitable without these credits.

PTNNT does not acquire, hold or issue financial instruments for trading or speculative purposes. Financial instruments are used to manage certain market risks resulting from fluctuations in commodity prices (such as copper and diesel fuel) and foreign currency exchange rates. Copper is an internationally traded commodity, and its prices are effectively determined by the LME. On a limited basis, PTNNT hedges sales commitments by entering into copper swap contracts. These swap contracts are generally settled against the LME average monthly price in accordance with the terms of the contracts. Currently, PTNNT has put in place derivative instruments against the price of copper, Australian dollar and some of its diesel purchases. The derivative instruments on the Australian dollar relate to Australian denominated purchases.

Consistent with the contracts described above, PTNNT entered into a series of copper hedging transactions that were completed by September 30, 2002.

The outstanding Australian dollar contracts at September 30, 2002 in the amount of US$0.8 million (A$1.5 million) were settled in October 2002.

PTNNT entered into two diesel hedging contracts for 360,000 barrels each at a fixed price of US$27.39 per barrel and US$27.98 per barrel, respectively. Each of these contracts covers purchases of 15,000 barrels monthly

and will expire in August and September of 2003, respectively. Each contract is settled monthly. At September 30, 2002, 345,000 barrels are outstanding for these contracts.

TVX Newmont Americas

Newmont has a 49.9% interest in TVX Newmont Americas. The principal assets of TVX Newmont Americas are interests in the following operating gold mines in South America and Canada:

Mine	Interest of TVX Newmont Americas	Location
Paracatu	49%	Brazil
Crixas	50%	Brazil
La Coipa	50%	Chile
Musselwhite	31.9%	Canada
New Britannia	50%	Canada

Echo Bay Mines Ltd.

Newmont obtained a 48.8% interest in Echo Bay through its acquisition of Franco-Nevada in February 2002. Franco-Nevada purchased capital securities debt obligations of Echo Bay with face value of $72.4 million in June 2001. In January 2002, $4.6 million of these capital securities debt obligations were sold. Newmont acquired Franco-Nevada’s remaining holdings of Echo Bay’s capital securities debt obligations in connection with Newmont’s acquisition of Franco-Nevada. Subsequent to this acquisition, an agreement was reached with Echo Bay and the capital securities holders to exchange the capital securities debt obligations for common stock of Echo Bay. This exchange of capital securities debt obligations for common stock occurred on April 3, 2002 and resulted in Newmont Mining Corporation of Canada Limited (a wholly-owned subsidiary of Newmont Mining Corporation) owning 48.8% of Echo Bay which decreased to 45.3% at September 30, 2002 as a result of equity issuances by Echo Bay. From April 3, 2002, Newmont Mining Corporation of Canada Limited has accounted for its investment in Echo Bay under the equity method.

Newmont has agreed to support the proposed combination announced in June 2002 of Kinross Gold Corporation, TVX Gold Inc. and Echo Bay Mines Ltd. The proposed combination will include the exchange of Newmont’s 49.9% interest in TVX Newmont Americas for $180 million and the exchange of Newmont’s 48.8% interest in Echo Bay for an approximate interest of 14% in the new Kinross. The transaction is subject to regulatory and shareholder approvals by Kinross, TVX Gold Inc. and Echo Bay, and we expect it to close in the fourth quarter of 2002 or first quarter of 2003. We are currently evaluating the expected financial statement impact of the transaction.

Australian Magnesium Corporation

Newmont has a 22.8% voting interest in Australian Magnesium Corporation (“AMC”), which raised equity to support the development of a project involving a proprietary chemical and dehydration process for producing anhydrous magnesium chloride as feed for an electrolytic cell to produce molten magnesium metal and magnesium alloys. Newmont has an obligation to contribute to AMC A$100 million (approximately $54 million) in equity by January 31, 2003. Newmont is guarantor of AMC’s subsidiary, QMC Finance Pty. Limited’s (“QMC”), A$71 million (approximately $39 million) corporate facility. Newmont provided an A$90 million (approximately $49 million) contingency equity commitment in the event the project does not achieve certain specified production and operating criteria by December 2006, which commitment is being renegotiated to provide for an A$75 million convertible debt and equity facility. Newmont has also guaranteed a $30 million obligation payable by AMC to Ford Motor Company in the event the project does not meet certain specified production and operating criteria by November 2005.

A series of foreign exchange contracts have been entered into by QMC. All obligations related to these contracts have been guaranteed by Newmont Australia and certain of its wholly-owned subsidiaries. These

contracts are designed to convert the receipt of Euro dollars and US$ revenue from the sale of magnesium into A$ cash flows to cover A$ operating costs and the servicing of A$ denominated debt. The contracts include foreign exchange forward contracts and bought put options.

(6) Long-Term Debt

A summary of Newmont’s debt is as follows:

	September 30, 2002			December 31, 2001
	(unaudited and in thousands)
Sale-leaseback of refractory ore treatment plant	$	307,880		$	318,092
8.375% debentures, net		204,860			200,583
8.625% notes (2002)		—			150,000
8.625% notes, due April 1, 2011, net		277,961			272,386
6% convertible subordinated debentures		99,980			99,980
Newmont Australia 7.625% notes, net		152,750			—
Newmont Australia 7.5% notes, net		101,890			—
Newmont Yandal 8.875% notes, net		237,220			—
Medium-term notes		32,000			32,000
Newmont Australia infrastructure bonds		96,170			—
Prepaid forward sales obligation (1)		145,000			145,000
Project financings		181,211			208,240
Interest rate swaps		(10,563	)		588

		1,826,359			1,426,869
Current maturities		(100,931	)		(192,151	)

	$	1,725,428		$	1,234,718

(1)

As restated. See Note 16.

Scheduled minimum long-term debt repayments are $22 million for the remainder of 2002, $79 million in 2003, $166 million in 2004, $494 million in 2005, $95 million in 2006, $71 million in 2007 and $899 million thereafter.

In April 2002, Newmont repaid its $150 million 8.625% notes. In May 2002, Newmont repaid the $170.6 million outstanding under the A$490 million committed revolving multi-option facility, closed it, and increased the Newmont $600 million facility to $750 million, with the addition of a $150 million Australian bank tranche. In 1998, Newmont Australia issued guaranteed $100 million seven year notes at 7.5% interest and $150 million ten year notes at 7.625% interest. Interest is paid semi-annually. At September 30, 2002, Newmont Australia had $48 million of debt outstanding for project financing.

In March 2002, Newmont, through an indirect, wholly-owned subsidiary, made an offer to repurchase any and all of the outstanding 8.875% Senior Notes due 2008 of Newmont Yandal Operations Limited (“Newmont Yandal”), an indirect wholly-owned subsidiary of Newmont. As of the offer date, $300 million principal amount of notes was outstanding. The repurchase offer was made pursuant to the terms of an Indenture dated as of April 7, 1998, between Newmont Yandal and The Bank of New York, as Trustee. The Indenture requires that Newmont Yandal, following a “Change of Control” as defined in the Indenture, make an offer to repurchase the notes at a repurchase price of 101% of the principal amount of the notes, plus accrued and unpaid interest to the repurchase date. Although the applicable provisions of the Indenture can be read to the contrary, Newmont took the position that a Change of Control occurred on February 20, 2002 when Newmont acquired control of Normandy. The

Indenture provides that Newmont Yandal is not required to make the Change of Control Offer if a third party makes the offer. Newmont’s offer, however, should not be construed as a commitment by Newmont to provide ongoing financial or credit support to Newmont Yandal. The Change of Control Offer was open until May 14, 2002 and resulted in redemption of $62.8 million of the outstanding notes.

In July 1999, Newmont entered into a prepaid forward sales contract (“Prepaid Forward”) under which it agreed to sell 483,333 ounces of gold to be delivered in June of each of 2005, 2006 and 2007 in annual installments of 161,111 ounces. The Prepaid Forward also included semi-annual delivery requirements of 17,951 ounces of gold, beginning June 2000 through June 2007 for a total delivery obligation over the life of the contract of 752,598 ounces. The Company received net proceeds from this transaction of $137.2 million ($145.0 million of gross proceeds before transaction costs of $653,000 and the purchase of a $7.1 million surety bond) that was recorded as deferred revenue, included in the long-term liabilities section of the balance sheet and was to be recognized into income incrementally when the 161,111 ounce annual gold deliveries were made in 2005, 2006 and 2007. At the time the Company entered into the Prepaid Forward, it also entered into a forward gold purchase contract (“Forward Purchase”), with the same counterparty, to hedge the price risk with respect to the Semi-Annual Delivery Requirements. The Forward Purchase provides for semi-annual purchases of 17,951 ounces of gold on each semi-annual delivery date under the Prepaid Forward at prices increasing from $263 per ounce in 2000 to $354 per ounce in 2007. On each semi-annual delivery date, the ounces purchased under the Forward Purchase were delivered in satisfaction of the Company’s delivery requirements under the Prepaid Forward. As discussed in Note 16, Newmont determined that the accounting treatment for this transaction required correction as the contract did not meet the technical criteria necessary to be accounted for in the manner reflected in the historical financial statements. To properly account for the transaction, the Company’s long-term debt was increased by $145.0 million as the Prepaid Forward and related Forward Purchase are treated under a financing accounting model and accounted for as a single borrowing of $145 million in July 1999, with interest accruing, based on an effective interest rate recognized over the full term of the borrowing. See Note 16 for a complete description of the accounting for the transaction and resulting restatement.

(7) Sales Contracts, Commodity and Derivative Instruments

Newmont generally sells production at spot market prices. Newmont has, on a limited basis, entered into derivative contracts to protect the selling price for certain anticipated gold production and to manage risks associated with sales contracts, commodities, interest rates and foreign currency. In addition, at the time of acquisition, Normandy and its affiliates had a substantial derivative instrument position. Newmont is not required to place collateral with respect to commodity instruments and there are no margin calls associated with such contracts. Credit risk is minimized by dealing only with major financial institutions/counterparties.

Effective January 1, 2001, Newmont adopted SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” to recognize derivative instruments on the balance sheet as either assets or liabilities and measurement at fair value. Unless specific hedging criteria are met, changes in the derivative’s fair value are recognized currently in earnings. Gains and losses on derivative hedging instruments are recorded in either other comprehensive income (loss) or current earnings (loss), depending on the nature of the instrument.

Gold Commodity Contracts

The tables below are expressed in thousands of ounces of gold, and prices for contracts denominated in A$ have been translated to US$ at the exchange rate at September 30, 2002 of US$0.54 per A$1. For all floating rate instruments, the average prices quoted are gross contractual prices. The net forward prices ultimately realized on floating gold hedging contracts are the sum of the gross contractual forward prices less any associated future financing costs arising from gold borrowing commitments related to such floating rate instruments. Floating put option valuations include a deferred premium cost which is payable in gold ounces upon expiration of the options.

For the nine months ended September 30, 2002, a net loss of $2.6 million was included in income for the ineffective portion of derivative instruments designated as cash flow hedges and a net loss of $11.7 million for

the change in fair value of gold commodity contracts that do not qualify as hedges (included in Gain (loss) on derivative instruments). The amount to be reclassified from Other comprehensive income (“OCI”) to income for derivative instruments during the next 12 months is a debit of approximately $0.4 million. The maximum period over which hedged forecasted transactions are expected to occur is 9.2 years.

Gold Forward Sales Contracts

Newmont had the following gold forward sales contracts at September 30, 2002 (unaudited):

Gold Forward Sales Contracts:	Expected Maturity Date or Transaction Date										Total/ Average		Fair Value
Gold Forward Sales Contracts:	2002		2003	2004	2005		2006		Thereafter		Total/ Average		US$ (000)
(A$ Denominated)
Fixed Forwards:
Ounces		272	1,161	1,060		227		52		26		2,798	$	(137,050	)
Average price	$	313	$288	$288	$	282	$	255	$	244	$	289
Floating Rate Forwards:
Ounces		7	16	—		61		231		140		455	$	(30,041	)
Average price	$	333	$333	$—	$	319	$	329	$	338	$	331
Synthetic Forwards:
Ounces		—	39	80		80		80		160		439	$	(31,245	)
Average price	$	—	$301	$293	$	293	$	293	$	293	$	294
Total:
Ounces		279	1,216	1,140		368		363		326		3,692	$	(198,336	)
Average Price	$	313	$289	$288	$	291	$	310	$	308	$	295

Notes: Fixed forward sales contracts provide for delivery of a specified number of ounces at a specified price and date and are accounted for as cash flow hedges. Floating rate forward contracts provide for a gold lease rate component in the price that takes into account market lease rates over the term of the contract. Gold lease rates reflect the borrowing cost for gold. Floating rate forwards are accounted for as cash flow hedges. Synthetic forward contracts represent combinations of purchased put options and written call options at the same strike price, maturity date and number of ounces. The combination achieves the same risk management result as gold forward sales contracts.

Gold Put Option Contracts

Newmont had the following gold put option contracts outstanding at September 30, 2002 (unaudited):

Put Option Contracts:	Expected Maturity Date or Transaction Date												Total/ Average		Fair Value
Put Option Contracts:	2002		2003		2004		2005		2006		Thereafter		Total/ Average		US$ (000)
US$ Denominated Fixed Purchased Puts:
Ounces		52		209		203		205		100		20		789	$	(4,145	)
Average price	$	292	$	292	$	292	$	292	$	338	$	397	$	301
A$ Denominated Fixed Purchased Puts:
Ounces		37		91		88		49		—		—		265	$	(3,776	)
Average price	$	292	$	300	$	305	$	296	$	—	$	—	$	300
A$ Denominated Floating Purchased Puts:
Ounces		16		16		—		207		69		287		595	$	(11,439	)
Average price	$	304	$	304	$	—	$	319	$	329	$	330	$	325
Total:
Ounces		105		316		291		461		169		307		1,649	$	(19,359	)
Average Price	$	294	$	295	$	296	$	305	$	334	$	334	$	309

Notes: Fixed purchased put option contracts provide the right, but not the obligation, to sell a specified number of ounces at a specified strike price and are accounted for as cash flow hedges. Floating forward purchased put option contracts provide for a variable gold lease rate component in the strike price. These options are accounted for as cash flow hedges.

Convertible Put Options and Other Instruments

Newmont had the following gold convertible put option contracts and other instruments outstanding at September 30, 2002 (unaudited):

Convertible Put Options and Other Instruments:	Expected Maturity Date or Transaction Date										Total/ Average		Fair Value
Convertible Put Options and Other Instruments:	2002	2003		2004		2005		2006		Thereafter	Total/ Average		US$ (000)
(A$ Denominated)
Ounces	—		46		37		82		65	1,304		1,534	$	(129,457	)
Average price	—	$	298	$	298	$	296	$	293	$355	$	346

Notes: Convertible put option contracts and other instruments are composed of: a) Convertible option contracts that provide minimum price protection for covered ounces, while providing the opportunity to participate in higher market prices under certain market conditions, and are accounted for as cash flow hedges; b) Knock-out/knock-in option contracts are contingent sold call options that either terminate (or knock-out) and maintain upside gold price potential or convert (or knock-in) to sold call options, depending on certain market conditions, and are marked to market with the change reflected in income; and c) Indexed forward contracts that are potentially convertible to purchased put options, depending on the market gold price at set future value dates during the term of the contract, and are marked to market, with the change reflected in income.

Price-Capped Sales Contracts

In mid-1999, Newmont purchased near-term put option contracts for 2.85 million ounces of gold, with a strike price of $270 per ounce. These contracts expired between August 1999 and December 2000. This purchase was paid for by selling call option contracts for 2.35 million ounces at average strike prices ranging from $350 to $386 per ounce. The initial fair value of the put options of $37.6 million was amortized over the term of the

options. The call option contracts, with an initial fair value of $37.6 million, were marked to market at each reporting date. Non-cash gains of $0.9 million $1.8 million were recorded for the third quarter and first nine months of 2001, respectively.

In September 2001, Newmont entered into transactions that closed out these call options. The options were replaced with a series of forward sales contracts requiring physical delivery of the same quantity of gold over slightly extended future periods. Under the terms of the contracts, Newmont will realize the lower of the spot price on the delivery date or the capped price ranging from $350 per ounce in 2005 to $392 per ounce in 2011. The fair value of the forward sales contracts of $53.8 million was recorded as deferred revenue and will be included in sales revenue as delivery occurs in 2005 through 2011. The forward sales contracts are accounted for as normal sales contracts under SFAS 133.

Newmont had the following price-capped forward sales contracts outstanding at September 30, 2002 (unaudited):

Price-capped contracts:	Expected Maturity Date or Transaction Date												Total/ Average		Fair Value US$ (000)
Price-capped contracts:	2002		2003		2004		2005		2006		Thereafter		Total/ Average		Fair Value US$ (000)
(US$ Denominated)
Ounces		—		—		—		500		—		1,850		2,350	n/a
Average price	$	—	$	—	$	—	$	350	$	—	$	384	$	377

US$/Gold Swap Contracts

Newmont Australia entered into a US$/gold swap contract whereby principal payments on US$ bonds are swapped into gold-denominated payments of 600,000 ounces in 2008. We also receive US$ fixed interest payments and pay gold lease rates, which are indexed to market rates. This instrument is marked to market at each period end, with the change reflected in income, and at September 30, 2002 had a negative fair value of $66.3 million.

Offsetting Commodity Instruments

In December 2001, Newmont entered into a series of equal and offsetting positions with respect to commodity instruments for certain Battle Mountain operations that were outstanding at that time. These contracts effectively closed out the combination matched put and call options and flat forward contracts. The offsetting put and call option contracts were undesignated as cash flow hedges and were subsequently marked to market in earnings. The original forward sales contracts remained designated as normal sales contracts. The offsetting forward purchase contracts were undesignated as hedges and were marked to market through earnings prospectively. Subsequently, during the second quarter of 2002, the majority of these offsetting positions were contractually terminated and effectively closed out. The close out of the flat forward purchase contracts resulted in a $1.9 million realized gain included in Gain (loss) on derivative instruments on the Statements of Consolidated Operations for the nine-month period ended September 30, 2002. The remaining flat forward contracts had offsetting fair values, covered approximately 11,000 ounces and were closed out in the quarter ended September 30, 2002 with no impact to income.

Other Sales Contracts, Commodity and Derivative Instruments

Foreign Currency Contracts

Newmont acquired certain cross currency swap contracts in the Normandy transaction intended to hedge the currency risk on repayment of US$-denominated debt. These contracts were closed out during the quarter ended June 30, 2002 for net proceeds of $50.8 million. The contracts were accounted for on a mark-to-market basis until closed out.

Newmont also acquired currency swap contracts to receive A$ and pay US$ designated as hedges of A$-denominated debt. The A$-denominated debt was repaid during the quarter ended June 30, 2002 and the contracts are currently undesignated. The contracts are accounted for on a mark-to-market basis. At September 30, 2002, they had a negative fair value of $28.9 million.

Interest Rate Swap Contracts

In the Normandy transaction, Newmont acquired A$125 million of interest rate swap contracts covering a portion of its US$100 million, 7-year bonds. These contracts were closed out during the quarter ended June 30, 2002 for a net cash out-flow of $1 million. The contracts were accounted for on a mark-to-market basis until closed out.

During the last half of 2001, Newmont entered into contracts to hedge the interest rate risk exposure on a portion of its $275 million 8.625% notes and its $200 million 8.375% debentures. Newmont receives fixed-rate interest payments at 8.625% and 8.375% and pays floating-rate interest amounts based on periodic LIBOR settings plus a spread, ranging from 2.60% to 4.25%. The notional principal amount of these transactions (representing the amount of principal tied to floating interest rate exposure) was $200 million at September 30, 2002. Half of these contracts expire in July 2005 and half expire in May 2011. These transactions resulted in a reduction in interest expense of $1.4 million and $4.2 million for the quarter and the nine-month period ended September 30, 2002, respectively. These transactions have been designated as fair value hedges and had a fair value of $10.6 million and ($0.6) million at September 30, 2002 and December 31, 2001, respectively.

Fuel Hedges

From time to time, Newmont has used certain derivative instruments to hedge a portion of its exposure to fuel price market fluctuations. Newmont had contracts covering approximately 1.8 million gallons of diesel fuel at its Nevada operations at prices ranging from approximately $0.61 to $0.69 per gallon. These transactions were designated as cash flow hedges and had a positive fair value of $1.3 million at December 31, 2001. These contracts expired during the quarter ended September 30, 2002.

(8) Dividends, Interest, Foreign Currency Exchange and Other Income (Loss)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002		2001
	(unaudited)
	(in thousands)
Interest income	$	2,920		$	1,469		$	10,818	$	3,177
Foreign currency exchange gain (loss)		2,411			(4,496	)		2,426		(5,283	)
Gain (loss) on sale of properties		(769	)		946			5,633		4,727
Other		3,716			(1,478	)		4,659		519

Total	$	8,278		$	(3,559	)	$	23,536	$	3,140

(9) Merger and Restructuring Expenses

In conjunction with the Newmont/Battle Mountain merger, expenses of $28.1 million were incurred in the nine months ended September 30, 2001. Total merger expenses of $35.0 million, of which $6.9 million were incurred in 2000, included $19.8 million for investment/professional advisory fees, $11.7 million for employee benefits and severance costs and $3.5 million for office closures and related disposals of redundant assets. Expenses associated with restructuring Newmont’s exploration program and a voluntary early retirement program were $32.4 million and included $22.1 million for retirement benefits and $10.3 million for employee severance and office closures. As of September 30, 2002, substantially all obligations associated with the merger have been paid.

(10) Recent Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (“FASB”) issued SFAS Nos. 141 and 142, “Business Combinations” and “Goodwill and Other Intangible Assets,” respectively. The adoption of these standards on January 1, 2002 did not impact Newmont’s historical financial statements or results of operations. As previously noted, the 2002 acquisitions of Normandy and Franco-Nevada were accounted for as purchases as prescribed by SFAS No.141 and $2.6 billion of the $4.4 billion purchase price represents goodwill, resulting from the excess of the purchase price over the fair value of net assets acquired. Such goodwill will not be amortized, but will be subject to impairment testing at least annually, as prescribed by SFAS No. 142. The purchase price allocations for Normandy and Franco-Nevada are preliminary and will be finalized following the completion of an independent appraisal expected to be available by the end of 2002.

In August 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations,” that established a uniform methodology for accounting for estimated reclamation and abandonment costs. The statement will be adopted January 1, 2003, when Newmont will record the estimated present value of reclamation liabilities and increase the carrying amount of property, plant and mine development. Subsequently, reclamation costs will be allocated to expense over the life of the related assets and will be adjusted for changes resulting from the passage of time and revisions to either the timing or amount of the original present value estimate. Newmont is in the process of quantifying the effect of adoption on January 1, 2003.

In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which established a single accounting model, based on the framework of SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,” for long-lived assets to be disposed of by sale. The statement was effective January 1, 2002, and there was no impact upon adoption.

In May 2002, the FASB issued SFAS No. 145 “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” The statement nullified SFAS 4, SFAS 44 and SFAS 64 and established that gains and losses from extinguishment of debt should be classified as extraordinary items only if they meet the criteria of APB Opinion No. 30 “Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.” The Statement also amends SFAS Statement No. 13 “Accounting for Leases” to require sale-leaseback accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions and makes technical corrections to various other FASB statements. For the provisions of the statement relating to the extinguishment of debt, SFAS 145 is effective for fiscal years beginning after May 15, 2002. The provisions relating to SFAS 13 are effective for transactions occurring after May 15, 2002, and all other provisions are effective for financial statements issued on or after May 15, 2002. We do not anticipate any impact upon adoption.

In June 2002, the FASB issued SFAS No. 146 “Accounting for Costs Associated with Exit or Disposal Activities” which addressed financial accounting and reporting for costs associated with exit or disposal activities. It nullified Emerging Issues Task Force (“EITF”) Issue No. 94-3 “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred rather than at the date of an entity’s commitment to an exit plan as was required under EITF No. 94-3. SFAS 146 also establishes that fair value is the objective for initial measurement of the liability. SFAS 146 is effective for exit or disposal activities initiated after December 31, 2002, and we do not anticipate any impact upon adoption except with respect to those exit or disposal activities that are initiated by the Company after that date.

(11) Stockholders’ Equity

Exchangeable Shares

In connection with the acquisition of Franco-Nevada, certain holders of Franco-Nevada common stock received 0.8 of an exchangeable share of Newmont Mining Corporation of Canada Limited (formerly Franco-Nevada) for each share of common stock held. These exchangeable shares are convertible, at the option of the holder, into shares of Newmont common stock on a one-for-one basis, and entitle holders to dividend and other rights economically equivalent to holders of Newmont common stock. At September 30, 2002, the value of these shares was included in Additional paid-in capital.

Preferred Stock

In April 2002, Newmont announced the redemption of all issued and outstanding shares of its $3.25 convertible preferred stock as of May 15, 2002. Pursuant to the terms of the convertible preferred stock, Newmont paid a redemption price of $50.325 per share, plus $0.8125 per share for dividends that accrued on the convertible preferred stock at the redemption date. In settlement of the total redemption price of $51.1375 per preferred share, Newmont issued to holders of record 1.9187 shares of its common stock and cash for any remaining fractional interest. This redemption eliminated $7.5 million of annual preferred stock dividends prospectively.

(12) Statement of Other Comprehensive Income (Loss)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
	(unaudited and in thousands)
				(as restated)						(as restated)
Other comprehensive income (loss), net of tax:
Realized gain on sale of Lihir marketable securities	$	—		$	—		$	(18,273	)	$	—
Unrealized gain (loss) on marketable equity securities		(3,369	)		7,670			(656	)		16,650
Foreign currency translation adjustments		(14,091	)		883			4,034			(5,247	)
Changes in fair value of cash flow hedge instruments		(57,983	)		(1,764	)		(2,842	)		685

Total other comprehensive income	$	(75,443	)	$	6,789		$	(17,737	)	$	12,088

(13) Segment Information

Newmont predominantly operates in a single industry as a worldwide corporation engaged in gold production, exploration for gold and acquisition of gold properties. Newmont’s major operations are in North America, South America and Australia. Other international mining operations include small gold producing properties in New Zealand, Indonesia, Uzbekistan and Turkey. Newmont also has a base metal operations segment engaged in copper and zinc production, an exploration segment engaged in green fields exploration activities not associated with our existing operating and development properties and a merchant banking segment. Earnings from operations do not include general corporate expenses, interest (except project-specific interest) or income taxes (except for equity investments). In conjunction with the acquisitions described in Note 2, the Company has modified its reporting structure and related segment disclosure.

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

Three Months Ended September 30, 2002

(unaudited and in millions)

	North America							South America						Australia
	Nevada		Other North America			Total North America		Yanacocha		Other South America		Total South America		Pajingo		Other Australia			Total Australia
Sales, net	$	226.7	$	36.2		$	262.9	$	201.6	$	23.2	$	224.8	$	24.6	$	133.7		$	158.3
Royalties	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	0.3		$	0.3
Interest income	$	—	$	0.1		$	0.1	$	—	$	—	$	—	$	0.1	$	2.5		$	2.6
Interest expense	$	—	$	—		$	—	$	1.6	$	—	$	1.6	$	—	$	15.6		$	15.6
Exploration and research expense	$	4.0	$	0.1		$	4.1	$	3.8	$	—	$	3.8	$	0.8	$	3.2		$	4.0
Depreciation, depletion and amortization	$	39.3	$	7.0		$	46.3	$	36.9	$	3.8	$	40.7	$	7.6	$	28.5		$	36.1
Pre-tax income (loss) before minority interest and equity income	$	11.3	$	4.6		$	15.9	$	81.8	$	7.8	$	89.6	$	7.9	$	(13.1	)	$	(5.2	)
Equity income of affiliates	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	3.3		$	3.3
Amortization of capitalized mining, net	$	20.0	$	(0.1	)	$	19.9	$	—	$	—	$	—	$	—	$	—		$	—
Capital expenditures	$	12.7	$	1.6		$	14.3	$	39.7	$	0.3	$	40.0	$	1.2	$	13.4		$	14.6
Total assets	$	1,801.7	$	151.2		$	1,952.9	$	1,076.0	$	34.6	$	1,110.6	$	205.5	$	2,176.0		$	2,381.5

	Zarafshan- Newmont		Other International Operations		Total Gold		Base Metals			Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net	$	22.0	$	29.9	$	697.9	$	14.3		$	—		$	—	$	—		$	712.2
Royalties	$	—	$	—	$	0.3	$	—		$	—		$	7.4	$	0.2		$	7.9
Interest income	$	0.1	$	—	$	2.8	$	—		$	—		$	0.1	$	—		$	2.9
Interest expense	$	0.2	$	—	$	17.4	$	—		$	—		$	—	$	15.7		$	33.1
Exploration and research expense	$	—	$	0.7	$	12.6	$	0.5		$	6.7		$	—	$	5.6		$	25.4
Depreciation, depletion and amortization	$	2.5	$	10.5	$	136.1	$	5.2		$	0.8		$	6.8	$	1.5		$	150.4
Pre-tax income (loss) before minority interest and equity income	$	11.1	$	4.1	$	115.5	$	(2.9	)	$	(7.6	)	$	8.7	$	(67.6	)	$	46.1
Equity income of affiliates	$	—	$	—	$	3.3	$	—		$	—		$	1.1	$	13.1		$	17.5
Amortization of capitalized mining, net	$	—	$	—	$	19.9	$	—		$	—		$	—	$	—		$	19.9
Capital expenditures	$	0.7	$	4.0	$	73.6	$	5.3		$	—		$	3.2	$	15.3		$	97.4
Total assets	$	100.9	$	521.3	$	6,067.2	$	485.0		$	226.0		$	2,046.0	$	849.8		$	9,674.0

Three Months Ended September 30, 2001

(unaudited and in millions)

	North America									South America						Australia
	Nevada			Other North America			Total North America			(1) Yanacocha		Other South America		(1) Total South America		Pajingo		Other Australia		Total Australia
Sales, net	$	179.7		$	34.4		$	214.1		$	140.2	$	23.9	$	164.1	$	8.1	$	—	$	8.1
Royalties	$	—		$	—		$	—		$	—	$	—	$	—	$	—	$	—	$	—
Interest income	$	—		$	0.1		$	0.1		$	0.5	$	0.1	$	0.6	$	—	$	—	$	—
Interest expense	$	0.1		$	—		$	0.1		$	0.7	$	—	$	0.7	$	—	$	—	$	—
Exploration and research expense	$	3.0		$	—		$	3.0		$	1.7	$	0.4	$	2.1	$	0.4	$	—	$	0.4
Depreciation, depletion and amortization	$	29.0		$	7.5		$	36.5		$	20.8	$	5.7	$	26.5	$	1.0	$	—	$	1.0
Pre-tax income (loss) before minority interest and equity income	$	(9.7	)	$	1.1		$	(8.6	)	$	54.2	$	5.9	$	60.1	$	2.9	$	—	$	2.9
Equity income of affiliates	$	—		$	—		$	—		$	—	$	—	$	—	$	—	$	—	$	—
Amortization of capitalized mining, net	$	11.8		$	(0.1	)	$	11.7		$	—	$	—	$	—	$	—	$	—	$	—
Capital expenditures	$	12.7		$	3.0		$	15.7		$	73.7	$	2.2	$	75.9	$	0.6	$	—	$	0.6
Total assets	$	1,383.2		$	163.6		$	1,546.8		$	989.0	$	56.1	$	1,045.1	$	32.2	$	—	$	32.2

	Zarafshan- Newmont		Other International Operations		Total Gold		Base Metals		Exploration			Merchant Banking		(1) Corporate and Other			(1) Consolidated
Sales, net	$	16.9	$	21.2	$	424.4	$	—	$	—		$	—	$	—		$	424.4
Royalties	$	—	$	—	$	—	$	—	$	—		$	—	$	0.3		$	0.3
Interest income	$	0.3	$	—	$	1.0	$	—	$	—		$	—	$	0.5		$	1.5
Interest expense	$	0.2	$	—	$	1.0	$	—	$	—		$	—	$	23.6		$	24.6
Exploration and research expense	$	—	$	—	$	5.5	$	—	$	2.2		$	—	$	5.1		$	12.8
Depreciation, depletion and amortization	$	2.5	$	3.9	$	70.4	$	—	$	0.1		$	—	$	1.6		$	72.1
Pre-tax income (loss) before minority interest and equity income	$	6.2	$	4.5	$	65.1	$	—	$	(2.3	)	$	—	$	(48.9	)	$	13.9
Equity income of affiliates	$	—	$	—	$	—	$	—	$	—		$	—	$	16.2		$	16.2
Amortization of capitalized mining, net	$	—	$	—	$	11.7	$	—	$	—		$	—	$	—		$	11.7
Capital expenditures	$	11.3	$	—	$	103.5	$	—	$	—		$	—	$	4.6		$	108.1
Total assets	$	101.6	$	78.4	$	2,804.1	$	—	$	24.6		$	—	$	1,160.0		$	3,988.7

Nine Months Ended September 30, 2002

(unaudited and in millions)

	North America							South America						Australia
	Nevada		Other North America			Total North America		Yanacocha		Other South America		Total South America		Pajingo			Other Australia			Total Australia
Sales, net	$	589.5	$	112.7		$	702.2	$	490.8	$	66.6	$	557.4	$	64.5		$	319.6		$	384. 1
Royalties	$	—	$	—		$	—	$	—	$	—	$	—	$	—		$	1.1		$	1.1
Interest income	$	—	$	0.1		$	0.1	$	0.2	$	—	$	0.2	$	0.5		$	7.9		$	8.4
Interest expense	$	0.1	$	—		$	0.1	$	7.0	$	0.2	$	7.2	$	0.2		$	31.5		$	31.7
Exploration and research expense	$	10.3	$	0.1		$	10.4	$	8.1	$	0.6	$	8.7	$	1.4		$	6.3		$	7.7
Depreciation, depletion and amortization	$	94.5	$	22.7		$	117.2	$	108.3	$	11.1	$	119.4	$	17.8		$	65.9		$	83.7
Pre-tax income (loss) before minority interest, equity income and cumulative effect of a change in accounting principle	$	14.5	$	16.6		$	31.1	$	147.8	$	20.5	$	168.3	$	25.5		$	(18.6	)	$	6.9
Equity income of affiliates	$	—	$	—		$	—	$	—	$	—	$	—	$	—		$	6.3		$	6.3
Cumulative effect of a change in accounting principle, net of tax of $4.1	$	0.9	$	7.2		$	8.1	$	—	$	—	$	—	$	(0.4	)	$	—		$	(0.4	)
Amortization of capitalized mining, net	$	29.5	$	(0.7	)	$	28.8	$	—	$	—	$	—	$	—		$	—		$	—
Asset write-down (2)	$	5.4	$	—		$	5.4	$	—	$	—	$	—	$	—		$	0.3		$	0.3
Capital expenditures	$	33.4	$	8.5		$	41.9	$	109.4	$	0.9	$	110.3	$	6.9		$	35.0		$	41.9
Total assets	$	1,801.7	$	151.2		$	1,952.9	$	1,076.0	$	34.6	$	1,110.6	$	205.5		$	2,176.0		$	2,381.5

	Zarafshan- Newmont		Other International Operations		Total Gold		Base Metals		Exploration			Merchant Banking		Corporate and Other			Consolidated
Sales, net	$	59.4	$	86.5	$	1,789.6	$	46.6	$	—		$	—	$	—		$	1,836.2
Royalties	$	—	$	—	$	1.1	$	—	$	—		$	21.2	$	0.6		$	22.9
Interest income	$	0.1	$	—	$	8.8	$	—	$	—		$	1.2	$	0.8		$	10.8
Interest expense	$	0.5	$	—	$	39.5	$	—	$	—		$	—	$	59.8		$	99.3
Exploration and research expense	$	—	$	1.3	$	28.1	$	1.7	$	14.1		$	—	$	11.8		$	55.7
Depreciation, depletion and amortization	$	7.5	$	26.5	$	354.3	$	13.7	$	2.4		$	13.1	$	4.2		$	387.7
Pre-tax income (loss) before minority interest, equity income and cumulative effect of a change in accounting principle	$	26.0	$	13.0	$	245.3	$	2.0	$	(16.5	)	$	16.4	$	(99.3	)	$	147.9
Equity income of affiliates	$	—	$	—	$	6.3	$	—	$	—		$	1.8	$	25.9		$	34.0
Cumulative effect of a change in accounting principle, net of tax of $4.1	$	—	$	—	$	7.7	$	—	$	—		$	—	$	—		$	7.7
Amortization of capitalized mining, net	$	—	$	—	$	28.8	$	—	$	—		$	—	$	—		$	28.8
Capital expenditures	$	3.4	$	9.9	$	207.4	$	9.4	$	0.2		$	3.8	$	17.4		$	238.2
Total assets	$	100.9	$	521.3	$	6,067.2	$	485.0	$	226.0		$	2,046.0	$	849.8		$	9,674.0

Nine Months Ended September 30, 2001

(unaudited and in millions)

	North America								South America						Australia
	Nevada			Other North America		Total North America			(1) Yanacocha		Other South America		(1) Total South America		Pajingo		Other Australia		Total Australia
Sales, net	$	534.4		$	103.0	$	637.4		$	375.7	$	61.3	$	437.0	$	24.4	$	—	$	24.4
Royalties	$	—		$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—
Interest income	$	—		$	0.1	$	0.1		$	1.4	$	0.1	$	1.5	$	—	$	—	$	—
Interest expense	$	0.2		$	—	$	0.2		$	1.9	$	0.3	$	2.2	$	—	$	—	$	—
Exploration and research expense	$	8.0		$	0.3	$	8.3		$	10.2	$	0.7	$	10.9	$	1.2	$	—	$	1.2
Depreciation, depletion and amortization	$	86.7		$	23.7	$	110.4		$	65.3	$	15.5	$	80.8	$	3.0	$	—	$	3.0
Pre-tax income (loss) before minority interest and equity income	$	(16.5	)	$	0.2	$	(16.3	)	$	126.4	$	4.3	$	130.7	$	10.2	$	—	$	10.2
Equity income of affiliates	$	—		$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—
Amortization of capitalized mining, net	$	15.3		$	—	$	15.3		$	—	$	—	$	—	$	—	$	—	$	—
Capital expenditures	$	41.3		$	7.8	$	49.1		$	232.7	$	9.4	$	242.1	$	2.1	$	—	$	2.1
Total assets	$	1,383.2		$	163.6	$	1,546.8		$	989.0	$	56.1	$	1,045.1	$	32.2	$	—	$	32.2


	Zarafshan- Newmont		Other International Operations		Total Gold		Base Metals		Exploration			Merchant Banking		(1) Corporate and Other			(1) Consolidated
Sales, net	$	43.6	$	73.4	$	1,215.8	$	—	$	—		$	—	$	—		$	1,215.8
Royalties	$	—	$	—	$	—	$	—	$	—		$	—	$	0.4		$	0.4
Interest income	$	0.3	$	0.1	$	2.0	$	—	$	—		$	—	$	1.2		$	3.2
Interest expense	$	0.7	$	—	$	3.1	$	—	$	—		$	—	$	68.3		$	71.4
Exploration and research expense	$	—	$	—	$	20.4	$	—	$	7.4		$	—	$	15.7		$	43.5
Depreciation, depletion and amortization	$	8.3	$	15.0	$	217.5	$	—	$	0.4		$	—	$	4.6		$	222.5
Pre-tax income (loss) before minority interest and equity income	$	13.0	$	20.7	$	158.3	$	—	$	(9.4	)	$	—	$	(186.9	)	$	(38.0	)
Equity income of affiliates	$	—	$	—	$	—	$	—	$	—		$	—	$	20.7		$	20.7
Amortization of capitalized mining, net	$	—	$	4.1	$	19.4	$	—	$	—		$	—	$	—		$	19.4
Capital expenditures	$	17.2	$	—	$	310.5	$	—	$	—		$	—	$	7.6		$	318.1
Total assets	$	101.6	$	78.4	$	2,804.1	$	—	$	24.6		$	—	$	1,160.0		$	3,988.7

(1)

As restated. See Note 16.

The merchant banking segment is consolidated in the financial results of the Company. The Company accounts for the merchant banking business as a separate operating segment because such business engages in activities from which it earns revenues and incurs expenses, its operating results are regularly reviewed by the Chief Operating Decision Maker and there is discrete financial information available for the business.

Total assets include a preliminary allocation amount for goodwill, representing the excess of the purchase price paid over the fair value of assets acquired at the date of the acquisition of Normandy and Franco-Nevada. This goodwill is included in the Nevada, Pajingo, Other Australia, Other International Operations, Base Metals, and the Merchant Banking Segments. See detail of goodwill by segment in Note 2.

Newmont operates the Batu Hijau mine in Indonesia that is accounted for as an equity investment. Batu Hijau financial information, based on U.S. generally accepted accounting principles, was as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2002		2001			2002		2001
			(restated)					(restated)
	(unaudited and in millions)
Copper sales, net of smelting and refining	$	95.5	$	102.0		$	261.1	$	278.1
Interest expense	$	18.2	$	27.4		$	54.2	$	98.1
Depreciation, depletion and amortization	$	32.6	$	26.0		$	92.0	$	76.7
Net income (loss)	$	14.9	$	12.2		$	16.0	$	(25.2	)
Capital expenditures	$	4.8	$	(0.6	)	$	59.0	$	(30.3	)
Total assets						$	2,299.4	$	n/a

Newmont’s third quarter equity income for Batu Hijau was $13.5 million and $16.2 million for 2002 and 2001, respectively. For 2002, income was based on 56.25% of Batu Hijau’s income, adjusted for the elimination of $2.5 million of inter-company interest, $2.7 million of inter-company management fees, and amortization adjustments of ($0.1) million. For the comparable 2001 period, the income was $16.2 million based on 56.25% of Batu Hijau’s income, adjusted for the elimination of $5.2 million of inter-company interest, $2.8 million of inter-company management fees, and amortization adjustments of $1.3 million. For the nine months ended September 30, 2002, equity income of Batu Hijau was $26.3 million based on 56.25% of Batu Hijau’s income, adjusted for the elimination of $6.1 million of inter-company interest, $7.8 million of inter-company management fees, and amortization adjustments of $3.4 million. For the comparable 2001 period, income was $20.7 million, based on 56.25% of Batu Hijau’s income, adjusted for the elimination of $22.6 million of inter-company interest, $8.5 million of inter-company management fees, and amortization adjustments of $3.8 million.

(14) Contingencies

(a) Reclamation Obligations

Newmont’s mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. Newmont conducts its operations so as to protect the public health and environment and believes its operations are in compliance with all applicable laws and regulations. Newmont has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the amount of such future expenditures. Estimated future reclamation costs are based principally on legal and regulatory requirements. At September 30, 2002 and December 31, 2001, $200.0 million and $128.4 million, respectively, were accrued for reclamation costs relating to currently producing mineral properties.

In addition, Newmont is involved in several matters concerning environmental obligations associated with former mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. Newmont believes that the related environmental obligations associated with these sites are similar in nature with respect to the development of remediation plans, their risk profile and the compliance required to meet general environmental standards. Based upon Newmont’s best estimate of its liability for these matters, $84.3 million and $57.3 million were accrued for such obligations at September 30, 2002 and December 31, 2001, respectively. These amounts are included in Other accrued liabilities and Reclamation and remediation liabilities. Depending upon the ultimate resolution of these matters, Newmont believes that it is reasonably

possible that the liability for these matters could be as much as 50% greater or 30% lower than the amount accrued. The amounts accrued for these matters are reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are charged to Costs and expenses, Other in the period estimates are revised. Details about certain of the more significant sites involved are discussed below.

Idarado Mining Company (“Idarado”)—80.1% owned

In July 1992, Newmont and Idarado signed a consent decree with the State of Colorado (“State”) that was agreed to by the U.S. District Court of Colorado to settle a lawsuit brought by the State under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), generally referred to as the “Superfund Act.”

Idarado agreed in the consent decree to undertake specified remediation work at its former mining site in the Telluride/Ouray area of Colorado. Remediation work at this property is substantially complete. If the remediation does not achieve specific performance objectives defined in the consent decree, the State may require Idarado to implement supplemental activities at the site, also as defined in the consent decree. Idarado and Newmont have obtained a $5.8 million reclamation bond to secure their potential obligations under the consent decree. In addition, Idarado settled natural resources damages and past and future response costs, and agreed to habitat enhancement work, under the consent decree.

Resurrection Mining Company (“Resurrection”)—100% owned

Newmont, Resurrection and other defendants were named in lawsuits filed by the State of Colorado, under the Superfund Act in 1983, and subsequently consolidated with a lawsuit filed by the U.S. Environmental Protection Agency (“EPA”) in 1986.

These proceedings sought to compel the defendants to remediate the impacts of pre-existing, historic mining activities near Leadville, Colorado which date back to the mid-1800’s, and which the government agencies claim are causing substantial environmental problems in the area.

In 1988 and 1989, the EPA issued administrative orders with respect to one area on the site and the defendants have collectively implemented those orders by constructing a water treatment plant, which was placed in operation in early 1992. Remaining remedial work for this area primarily consists of water treatment plant operation and continuing environmental monitoring and maintenance activities. Newmont and Resurrection are currently responsible for 50 percent of these costs; their share of such costs could increase in the event other defendants become unable to pay their share of such costs.

The parties also have entered into a consent decree with respect to the remaining areas at the site, which apportions liabilities and responsibilities for these areas. The EPA has approved remedial actions for selected components of Resurrection’s portion of the site, which were initiated in 1995. The EPA has not yet selected the final remedy for the site. Accordingly, Newmont cannot yet determine the full extent or cost of its share of the remedial action that will be required. The government agencies may also seek to recover for damages to natural resources. In March 1999, the parties entered into a Memorandum of Understanding (“MOU”) to facilitate the settlement of natural resources damages claims under CERCLA for the upper Arkansas River Basin. The MOU provides a structure for evaluation of damages and possible restoration activities that may be required if it is concluded such damages have occurred.

Dawn Mining Company LLC (“Dawn”)—51% owned

Dawn previously leased an open-pit uranium mine, currently inactive, on the Spokane Indian Reservation in the State of Washington. The mine site is subject to regulation by agencies of the U.S. Department of Interior (the Bureau of Indian Affairs and the Bureau of Land Management), as well as the EPA. Dawn also owns a nearby uranium millsite facility, located on private land, which is subject to federal and state regulation.

In 1991, Dawn’s mining lease at the mine was terminated. As a result, Dawn was required to file a formal mine closure and reclamation plan. The Department of Interior commenced an analysis of Dawn’s proposed plan and alternate closure and reclamation plans for the mine. Work on this analysis has been suspended indefinitely. In mid-2000, the mine was included on the National Priorities List under CERCLA, and the EPA has initiated a remedial investigation/feasibility study under CERCLA to determine environmental conditions and remediation options at the site. In addition, in August 2002, certain natural resource trustees notified Dawn and Newmont that they were commencing a natural resources damages assessment related to the site.

The EPA has asserted that Dawn and Newmont are liable for reclamation or remediation work and costs at the mine. Dawn does not have sufficient funds to pay for the reclamation plan it proposed or for any alternate plan, or for any additional remediation work or costs at the mine. Newmont will vigorously contest any claims as to its liability.

Newmont cannot reasonably predict the likelihood or outcome of any future action against Dawn or Newmont arising from this matter.

In late 1999, Dawn initiated state approval for a revised mill closure plan that, if implemented, would expedite the reclamation process at the mill. The State of Washington has approved this revised plan. The currently approved plan for the mill is secured by a $14.1 million bond, which is guaranteed by Newmont.

San Luis, Colorado—100% owned

The San Luis open-pit gold mine in southern Colorado was operated by a subsidiary of Battle Mountain and ceased operations in November 1996. Since then, substantial closure and reclamation work has been performed. In August 1999, the Colorado Department of Public Health and Environment (“CDPHE”) issued a notice of violation of the Water Quality Control Act and in October 1999 amended the notice to authorize operation of a water treatment facility and the discharge of treated water. Battle Mountain has made all submittals required by the CDPHE notice and conducted the required response activities. Battle Mountain negotiated a settlement with CDPHE resolving alleged violations that was effective September 1, 2000. In October 2000, the CDPHE received an “Application for Reconsideration of Order for Civil Penalty” filed by project opponents, seeking to appeal the terms of the settlement. The application was denied by CDPHE. Project opponents have filed a judicial appeal in the District Court for Costilla County, Colorado, naming the CDPHE as defendant. Battle Mountain has intervened in the appeal to protect its interests in the settlement. This litigation was recently decided in favor of CDPHE.

Newmont Mining Corporation

By letter dated September 3, 2002, the United States Environmental Protection Agency (“EPA”) notified the Company that the EPA had expended $2.6 million in response costs to address environmental conditions associated with a historic tailings pile located at the Grey Eagle Mine site near Happy Camp, California, and requested that the Company pay those costs. The EPA has identified four potentially responsible parties, including the Company. The Company does not believe it has any liability for environmental conditions at the Grey Eagle Mine site, and intends to vigorously defend any formal claims by the EPA.

(b) Other

Minera Yanacocha—51.35% owned

Choropampa

In June 2000, a transport contractor of Minera Yanacocha spilled approximately 151 kilograms of mercury near the town of Choropampa, Peru, which is located 53 miles southwest of the mine. Mercury is a byproduct of

gold mining and was sold to a Lima firm for use in medical instrumentation and industrial applications. A comprehensive health and environmental remediation program was undertaken by Minera Yanacocha in response to the incident. In August 2000, Minera Yanacocha paid under protest a fine of 1,740,000 soles (approximately $500,000) to the Peruvian government. Minera Yanacocha has entered into settlement agreements with a number of individuals impacted by the incident. In addition, it has entered into agreements with three of the communities impacted by this incident to provide a variety of public works as compensation for the disruption and inconvenience caused by the incident.

On September 10, 2001, Minera Yanacocha, various wholly-owned subsidiaries of Newmont, and other defendants were named in a lawsuit filed by over 900 Peruvian citizens in Denver District Court for the State of Colorado. This action seeks compensatory and punitive damages based on claims associated with the mercury spill incident. This action was dismissed by the Denver District Court on May 22, 2002, and this ruling was reaffirmed by the court on July 30, 2002. Plaintiffs’ attorneys have appealed this dismissal.

In July 2002, other lawsuits were served against Minera Yanacocha, various wholly-owned subsidiaries of Newmont, and other defendants in the Denver District Court for the State of Colorado and in the United States District Court for the District of Colorado, by approximately 140 Peruvian plaintiffs and by the same plaintiffs who filed the September 2001 lawsuit. These actions also seek compensatory and punitive damages based on claims associated with the mercury spill incident.

Additional lawsuits relating to the Choropampa incident were filed against Minera Yanacocha in the local courts of Cajamarca, Peru, in May 2002, by over 750 Peruvian citizens. A significant number of the plaintiffs in this lawsuit previously have entered into settlement agreements with Minera Yanacocha.

Neither Newmont nor Minera Yanacocha can reasonably predict the final outcome of any of the above described lawsuits.

Cerro Quilish

The level of conflict between the central government and local governments throughout Peru over regulatory authority, privatization policy, entitlement to revenue streams, and other issues continues to be high. Minera Yanacocha is involved in a dispute with the Provincial Municipality of Cajamarca regarding the authority of that governmental body to regulate the development of the Company’s Cerro Quilish ore deposit (which contains reserves of 1.9 million equity ounces). Cerro Quilish is located in the same watershed in which the City of Cajamarca is located. The Municipality has enacted an ordinance declaring Cerro Quilish and its watershed to be a reserved and natural protected area. Minera Yanacocha has challenged this ordinance on the grounds that, under Peruvian law, local governments lack authority to create such areas. In May 2002, the Peruvian Constitutional Tribunal was fully empanelled in Lima to hear the case. The panel is expected to hear the case and to rule later this year or early next year.

Even if the Constitutional Tribunal determines that the municipal ordinance is valid, Peruvian law provides that pre-existing rights are to be respected. Minera Yanacocha acquired the mining concessions in the Cerro Quilish area many years before the adoption of the contested ordinance.

Minera Yanacocha is committed to completing a full environmental impact study prior to initiating any future development at Cerro Quilish, and will adopt mitigation measures necessary to protect the quality and quantity of the water supply of the City of Cajamarca. While the central government has the primary responsibility and the necessary technical expertise to regulate this matter, the company is also committed to working with the local government and other affected stakeholders in completing the required studies and designing and implementing any necessary mitigation measures.

Newmont Australia Limited—100% Owned

In a Federal Court action brought by the Australian Securities and Investment Commission (“ASIC”) against Yandal Gold Pty Ltd, a subsidiary of Newmont Australia Limited (“Newmont Australia”), Edensor Nominees Pty Ltd (“Edensor”), and others in relation to the 1999 acquisition of Great Central Mines (“GCM,” now named Newmont Yandal Operations Limited), the judge found violations of the Australian Corporations Law and ordered payment by Edensor to ASIC of A$28.5 million for distribution to former GCM shareholders. The judge also entered an order allowing the former shareholders to elect to reacquire their shares in GCM. After appeals to the Full Federal Court and the High Court on jurisdictional matters, the Full Federal Court rejected Edensor’s appeal on the merits and in September 2002 the High Court declined further review of the matter. Newmont Australia had previously agreed to pay one-half of the A$28.5 million and, after finalizing an additional commercial transaction with Edensor in relation to certain mining properties and interests, Newmont Australia paid the full A$28.5 million plus interest to ASIC in September 2002 all of which has been accounted for as part of the Normandy purchase price allocation. Newmont Australia has filed a motion with the Federal Court to remove that portion of its original order granting former GCM shareholders the right to reacquire their shares. ASIC has consented to the orders sought in this motion. A hearing is scheduled for February 2003.

In February 1999, Normandy (now Newmont Australia Limited) sold certain subsidiary companies in a transaction that resulted in net cash proceeds of $A663 million. The sale did not give rise to any tax liability to Newmont Australia Limited because of the tax basis that Newmont Australia Limited had in the shares in the subsidiaries and the capital losses available to Newmont Australia Limited to offset the net gain on the sale. This transaction is currently the subject of a review by the Australian Taxation Office (“ATO”) which commenced in early 2001 and is still ongoing. The ATO has sought documents from Newmont Australia Limited, the buyer of the subsidiaries and other parties. It is not yet known whether the ATO will disagree with the tax treatment of the transaction. Newmont Australia Limited believes that its tax treatment was in accordance with the provisions of the relevant tax laws. The Company cannot reasonably predict what future action the ATO may take in relation to this matter.

(15) Condensed Consolidating Financial Information

The following Condensed Consolidating Financial Information is presented to satisfy disclosure requirements of Rule 3-10(e) of Regulation S-X resulting from the inclusion of Newmont USA Limited (“Newmont USA”), a wholly-owned subsidiary of Newmont Mining Corporation, as a co-registrant with Newmont Mining Corporation on a shelf registration statement on Form S-3 filed under the Securities Act of 1933 under which securities of Newmont Mining Corporation (including debt securities which may be guaranteed by Newmont USA) may be issued from time to time (the “Shelf Registration Statement”). This Shelf Registration Statement has not yet been declared effective by the Securities and Exchange Commission. To the extent which Newmont Mining Corporation issues debt securities under the Shelf Registration Statement, it is expected that Newmont USA will provide a guarantee of that debt. In accordance with Rule 3-10(e) of Regulation S-X, Newmont USA, as the subsidiary guarantor, is 100% owned by Newmont Mining Corporation, the guarantee will be full and unconditional, and it is not expected that any other subsidiary of Newmont Mining Corporation will guarantee any security issued under the Shelf Registration Statement. There are no significant restrictions on the ability of Newmont USA to obtain funds from its subsidiaries by dividend or loan.

Consolidating Statement of Operations	Newmont Mining Corporation		Newmont USA		Other Subsidiaries		Eliminations			Newmont Mining Corporation Consolidated
	(unaudited and in millions)
Three Months Ended September 30, 2002
Sales and other income
Sales—gold	$	—	$	530.7	$	167.1	$	—		$	697.8
Sales—base metals, net		—		—		14.3		—			14.3
Royalties		—		0.2		8.7		(1.0	)		7.9
Dividends, interest and other income—intercompany		4.8		2.8		8.3		(15.9	)		—
Dividends, interest, foreign currency exchange and other income (loss)		2.9		3.9		1.5		—			8.3

		7.7		537.6		199.9		(16.9	)		728.3

Costs and Expenses