e10vk
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-K
|
|
|
(Mark One)
|
|
|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Fiscal Year Ended
December 31,
2010
|
or
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
|
|
For the Transition Period
From to
|
Commission File Number:
001-31240
NEWMONT MINING
CORPORATION
(Exact Name of Registrant as
Specified in Its Charter)
|
|
|
Delaware
(State or Other Jurisdiction
of
Incorporation or Organization)
|
|
84-1611629
(I.R.S. Employer
Identification No.)
|
6363 South Fiddlers Green Circle
Greenwood Village, Colorado
(Address of Principal
Executive Offices)
|
|
80111
(Zip
Code)
|
Registrants
telephone number, including area code
(303) 863-7414
Securities registered pursuant to Section 12(b) of the
Act:
|
|
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $1.60 par value
|
|
New York Stock Exchange
|
Securities registered pursuant to Section 12(g) of the
Act:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes þ No o
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Exchange
Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes þ No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2 of the
Exchange Act. (Check one):
|
|
|
|
Large
accelerated
filer þ
|
Accelerated
filer o
|
Non-accelerated
filer o
|
Smaller reporting
company o
|
(Do not check if a smaller
reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
At June 30, 2010, the aggregate market value of the
registrants voting and non-voting common equity held by
non-affiliates of the registrant was $30,366,217,467 based on
the closing sale price as reported on the New York Stock
Exchange. There were 486,564,649 shares of common stock
outstanding (and 6,703,999 exchangeable shares exchangeable into
Newmont Mining Corporation common stock on a
one-for-one
basis) on February 18, 2011.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions of Registrants definitive Proxy Statement
submitted to the Registrants stockholders in connection
with our 2011 Annual Stockholders Meeting to be held on
April 19, 2011, are incorporated by reference into
Part III of this report.
PART I
|
|
ITEM 1.
|
BUSINESS
(dollars in millions except per share, per ounce and per pound
amounts)
|
Introduction
Newmont Mining Corporation is primarily a gold producer with
significant assets or operations in the United States,
Australia, Peru, Indonesia, Ghana, Canada, New Zealand and
Mexico. At December 31, 2010, Newmont had proven and
probable gold reserves of 93.5 million ounces and an
aggregate land position of approximately 27,500 square
miles (71,100 square kilometers). Newmont is also engaged
in the production of copper, principally through its Batu Hijau
operation in Indonesia and Boddington operation in Australia.
Newmont Mining Corporations original predecessor
corporation was incorporated in 1921 under the laws of Delaware.
Newmonts corporate headquarters are in Greenwood Village,
Colorado, USA. In this report, Newmont, the
Company, our and we refer to
Newmont Mining Corporation
and/or our
affiliates and subsidiaries. References to A$ refer
to Australian currency, C$ to Canadian currency,
NZ$ to New Zealand currency, IDR to
Indonesian currency and $ to United States currency.
Newmonts Sales and long-lived assets are
geographically distributed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
Long-Lived Assets
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Indonesia
|
|
|
26
|
%
|
|
|
24
|
%
|
|
|
17
|
%
|
|
|
14
|
%
|
|
|
14
|
%
|
|
|
17
|
%
|
Australia/New Zealand
|
|
|
24
|
%
|
|
|
16
|
%
|
|
|
17
|
%
|
|
|
33
|
%
|
|
|
33
|
%
|
|
|
20
|
%
|
United States
|
|
|
22
|
%
|
|
|
25
|
%
|
|
|
32
|
%
|
|
|
20
|
%
|
|
|
21
|
%
|
|
|
26
|
%
|
Peru
|
|
|
19
|
%
|
|
|
26
|
%
|
|
|
26
|
%
|
|
|
11
|
%
|
|
|
10
|
%
|
|
|
13
|
%
|
Ghana
|
|
|
7
|
%
|
|
|
7
|
%
|
|
|
7
|
%
|
|
|
8
|
%
|
|
|
8
|
%
|
|
|
9
|
%
|
Mexico
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
|
|
1
|
%
|
Canada
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
|
|
13
|
%
|
|
|
13
|
%
|
|
|
14
|
%
|
On February 3, 2011, Newmont and Fronteer Gold Inc.
(Fronteer) announced that they entered into an
agreement under which Newmont will acquire all of the
outstanding common shares of Fronteer by way of a Plan of
Arrangement (Arrangement). Under the Arrangement,
shareholders of Fronteer will receive C$14.00 in cash and one
common share in Pilot Gold Inc., a Canadian corporation, which
will retain certain exploration assets of Fronteer, for each
common share of Fronteer. The Arrangement will be subject to
approval by at least 66% of the votes cast at a special meeting
of Fronteers shareholders, expected to be held in April
2011, and the subsequent approval of the Ontario Superior Court
of Justice. The agreement also contains certain termination
rights for both Newmont and Fronteer including a break fee of
C$85 payable by Fronteer, if the transaction is not completed in
certain specified circumstances. The transaction is expected to
close in the second quarter of 2011 for approximately C$2,300.
Fronteer owns, among other assets, the exploration stage Long
Canyon project, which is located approximately one hundred miles
from the Companys existing infrastructure in Nevada and
provides the potential for significant development and operating
synergies.
Segment
Information, Export Sales, etc.
Our operating segments include North America, South America,
Asia Pacific and Africa. Our North America segment consists
primarily of Nevada in the United States, La Herradura in
Mexico and Hope Bay in Canada. Our South America segment
consists primarily of Yanacocha and Conga in Peru. Our Asia
Pacific segment consists primarily of Boddington in Australia,
Batu Hijau in Indonesia and other smaller operations in
Australia and New Zealand. Our Africa segment consists primarily
of Ahafo and Akyem in Ghana. See Item 1A, Risk Factors,
below and Note 3 to the Consolidated
1
Financial Statements for information relating to our operating
segments, domestic and export sales, and lack of dependence on a
limited number of customers.
Products
References in this report to attributable gold ounces or
attributable copper pounds mean that portion of gold or copper
produced, sold or included in proven and probable reserves based
on our ownership
and/or
economic interest, unless otherwise noted.
Gold
General. We had consolidated gold production
of 6.5 million ounces (5.4 million ounces attributable
to Newmont) in 2010, 6.5 million ounces (5.2 million
ounces) in 2009 and 6.2 million ounces (5.2 million
ounces) in 2008. Of our 2010 consolidated gold production,
approximately 30% came from North America, 23% from South
America, 39% from Asia Pacific and 8% from Africa.
For 2010, 2009 and 2008, 81%, 83% and 88%, respectively, of our
Sales were attributable to gold. Most of our Sales
comes from the sale of refined gold in the international
market. The end product at our gold operations, however, is
generally doré bars. Doré is an alloy consisting
primarily of gold but also containing silver and other metals.
Doré is sent to refiners to produce bullion that meets the
required market standard of 99.95% gold. Under the terms of our
refining agreements, the doré bars are refined for a fee,
and our share of the refined gold and the separately-recovered
silver are credited to our account or delivered to buyers. Gold
sold from Batu Hijau in Indonesia and a portion of the gold from
Boddington in Australia, Phoenix in Nevada and Yanacocha in
Peru, is contained in a saleable concentrate containing other
metals such as copper or silver.
Gold Uses. Gold is generally used for
fabrication or investment. Fabricated gold has a variety of end
uses, including jewelry, electronics, dentistry, industrial and
decorative uses, medals, medallions and official coins. Gold
investors buy gold bullion, official coins and jewelry.
Gold Supply. A combination of current mine
production and draw-down of existing gold stocks held by
governments, financial institutions, industrial organizations
and private individuals make up the annual gold supply. Based on
public information available for the years 2008 through 2010, on
average, current mine production has accounted for approximately
61% of the annual gold supply.
Gold Price. The following table presents the
annual high, low and average daily afternoon fixing prices for
gold over the past ten years on the London Bullion Market
($/ounce):
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
High
|
|
Low
|
|
Average
|
|
2001
|
|
$
|
293
|
|
|
$
|
256
|
|
|
$
|
271
|
|
2002
|
|
$
|
349
|
|
|
$
|
278
|
|
|
$
|
310
|
|
2003
|
|
$
|
416
|
|
|
$
|
320
|
|
|
$
|
363
|
|
2004
|
|
$
|
454
|
|
|
$
|
375
|
|
|
$
|
410
|
|
2005
|
|
$
|
536
|
|
|
$
|
411
|
|
|
$
|
444
|
|
2006
|
|
$
|
725
|
|
|
$
|
525
|
|
|
$
|
604
|
|
2007
|
|
$
|
841
|
|
|
$
|
608
|
|
|
$
|
695
|
|
2008
|
|
$
|
1,011
|
|
|
$
|
713
|
|
|
$
|
872
|
|
2009
|
|
$
|
1,213
|
|
|
$
|
810
|
|
|
$
|
972
|
|
2010
|
|
$
|
1,421
|
|
|
$
|
1,058
|
|
|
$
|
1,225
|
|
2011 (through February 18, 2011)
|
|
$
|
1,389
|
|
|
$
|
1,319
|
|
|
$
|
1,357
|
|
Source: Kitco, Reuters and the London Bullion Market Association
2
On February 18, 2011, the afternoon fixing gold price on
the London Bullion Market was $1,384 per ounce and the spot
market gold price on the New York Commodity Exchange was
$1,388 per ounce.
We generally sell our gold at the prevailing market price during
the month in which the gold is delivered to the customer. We
recognize revenue from a sale when the price is determinable,
the gold has been delivered, the title has been transferred and
collection of the sales price is reasonably assured.
Copper
General. We had consolidated copper production
of 600 million pounds (327 million pounds attributable
to Newmont) in 2010, 504 million pounds (227 million
pounds) in 2009 and 285 million pounds (128 million
pounds) in 2008. Copper production is in the form of saleable
concentrate that is sold to smelters for further treatment and
refining. For 2010, 2009 and 2008, 19%, 17% and 12%,
respectively, of our Sales were attributable to copper.
Copper Uses. Refined copper is incorporated
into wire and cable products for use in the construction,
electric utility, communications and transportation industries.
Copper is also used in industrial equipment and machinery,
consumer products and a variety of other electrical and
electronic applications and is also used to make brass. Copper
substitutes include aluminum, plastics, stainless steel and
fiber optics. Refined, or cathode, copper is also an
internationally traded commodity.
Copper Supply. A combination of current mine
production and recycled scrap material make up the annual copper
supply.
Copper Price. The copper price is quoted on
the London Metal Exchange in terms of dollars per metric ton of
high grade copper. The following table presents the dollar per
pound equivalent of the annual high, low and average daily
prices of high grade copper on the London Metal Exchange over
the past ten years ($/pound):
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
|
|
High
|
|
Low
|
|
Average
|
|
2001
|
|
$
|
0.83
|
|
|
$
|
0.60
|
|
|
$
|
0.72
|
|
2002
|
|
$
|
0.77
|
|
|
$
|
0.64
|
|
|
$
|
0.71
|
|
2003
|
|
$
|
1.05
|
|
|
$
|
0.70
|
|
|
$
|
0.81
|
|
2004
|
|
$
|
1.49
|
|
|
$
|
1.06
|
|
|
$
|
1.30
|
|
2005
|
|
$
|
2.11
|
|
|
$
|
1.39
|
|
|
$
|
1.67
|
|
2006
|
|
$
|
3.99
|
|
|
$
|
2.06
|
|
|
$
|
3.05
|
|
2007
|
|
$
|
3.77
|
|
|
$
|
2.37
|
|
|
$
|
3.24
|
|
2008
|
|
$
|
4.08
|
|
|
$
|
1.26
|
|
|
$
|
3.15
|
|
2009
|
|
$
|
3.33
|
|
|
$
|
1.38
|
|
|
$
|
2.36
|
|
2010
|
|
$
|
4.38
|
|
|
$
|
2.75
|
|
|
$
|
3.43
|
|
2011 (through February 18, 2011)
|
|
$
|
4.62
|
|
|
$
|
4.20
|
|
|
$
|
4.41
|
|
Source: London Metal Exchange
On February 18, 2011, the high grade copper closing price
on the London Metal Exchange was $4.48 per pound.
We generally sell our copper based on the monthly average market
price for the third month following the month in which the
delivery to the customer takes place. We recognize revenue from
a sale when the price is determinable, the concentrate has been
loaded on a vessel, the title has been transferred and
collection of the sales price is reasonably assured. For revenue
recognition, we use a provisional price based on the average
prevailing market price during the two week period prior to
3
completion of vessel loading. The copper concentrate is marked
to market through earnings until final settlement.
Gold and
Copper Processing Methods
Gold is extracted from naturally-oxidized ores by either heap
leaching or milling, depending on the amount of gold contained
in the ore, the amenability of the ore to treatment and related
capital and operating costs. Higher grade oxide ores are
generally processed through mills, where the ore is ground into
a fine powder and mixed with water in slurry, which then passes
through a
carbon-in-leach
circuit. Lower grade oxide ores are generally processed using
heap leaching. Heap leaching consists of stacking crushed or
run-of-mine
ore on impermeable pads, where a weak cyanide solution is
applied to the surface of the heap to dissolve the gold. In both
cases, the gold-bearing solution is then collected and pumped to
process facilities to remove the gold by collection on carbon or
by zinc precipitation.
Gold contained in ores that are not naturally oxidized can be
directly milled if the gold is amenable to cyanidation,
generally known as free milling sulfide ores. Ores that are not
amenable to cyanidation, known as refractory ores, require more
costly and complex processing techniques than oxide or free
milling ore. Higher-grade refractory ores are processed through
either roasters or autoclaves. Roasters heat finely ground ore
to a high temperature, burn off the carbon and oxidize the
sulfide minerals that prevent efficient leaching. Autoclaves use
heat, oxygen and pressure to oxidize sulfide ores.
Some sulfide ores may be processed through a flotation plant or
by bio-milling. In flotation, ore is finely ground, turned into
slurry, then placed in a tank known as a flotation cell.
Chemicals are added to the slurry causing the gold-containing
sulfides to attach to air bubbles and float to the top of the
tank. The sulfides are removed from the cell and converted into
a concentrate that can then be processed in an autoclave or
roaster to recover the gold. Bio-milling incorporates patented
technology that involves inoculation of suitable crushed ore on
a leach pad with naturally occurring bacteria strains, which
oxidize the sulfides over a period of time. The ore is then
processed through an oxide mill.
At Batu Hijau, ore containing copper and gold is crushed to a
coarse size at the mine and then transported from the mine via
conveyor to a concentrator, where it is finely ground and then
treated by successive stages of flotation, resulting in a
concentrate containing approximately 26% to 31% copper. The
concentrate is dewatered and stored for loading onto ships for
transport to smelters.
At Boddington, ore containing copper and gold is crushed to a
coarse size at the mine and then transported via conveyor to a
process plant, where it is further crushed and then finely
ground as a slurry. The ore is initially treated by flotation
which produces a copper/gold concentrate containing
approximately 18% copper. Flotation concentrates are processed
via a gravity circuit to recover fine liberated gold and then
dewatered and stored for loading onto ships for transport to
smelters. The flotation tailing has a residual gold content that
is recovered in a
carbon-in-leach
circuit.
Hedging
Activities
Our strategy is to provide shareholders with leverage to changes
in gold and copper prices by selling our gold and copper at
current market prices and consequently, we do not hedge our gold
and copper sales. We continue to manage certain risks associated
with commodity input costs, interest rates and foreign
currencies using the derivative market.
For additional information, see Hedging in Item 7A,
Quantitative and Qualitative Disclosures about Market Risk, and
Note 17 to the Consolidated Financial Statements.
Gold and Copper
Reserves
At December 31, 2010 we had 93.5 million ounces of
proven and probable gold reserves attributable to Newmont. We
added 8.2 million ounces to proven and probable reserves,
and depleted
4
6.5 million ounces during 2010. We also added
0.3 million ounces to proven and probable reserves through
acquisitions and divested 0.3 million ounces. 2010 reserves
were calculated at a gold price assumption of $950, A$1,100 or
NZ$1,350 per ounce, respectively. A reconciliation of the
changes in proven and probable gold reserves during the past
three years follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
(millions of ounces)
|
|
|
Opening balance
|
|
|
91.8
|
|
|
|
85.0
|
|
|
|
86.5
|
|
Depletion
|
|
|
(6.5
|
)
|
|
|
(6.8
|
)
|
|
|
(6.7
|
)
|
Additions(1)
|
|
|
8.2
|
|
|
|
6.4
|
|
|
|
5.2
|
|
Acquisitions(2)
|
|
|
0.3
|
|
|
|
8.2
|
|
|
|
|
|
Other
divestments(3)
|
|
|
(0.3
|
)
|
|
|
(1.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance
|
|
|
93.5
|
|
|
|
91.8
|
|
|
|
85.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of the changes in proven and probable gold
reserves for 2010 by region is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
South
|
|
|
Asia
|
|
|
|
|
|
|
America
|
|
|
America
|
|
|
Pacific
|
|
|
Africa
|
|
|
|
(millions of ounces)
|
|
|
Opening balance
|
|
|
30.3
|
|
|
|
11.8
|
|
|
|
32.9
|
|
|
|
16.8
|
|
Depletion
|
|
|
(2.3
|
)
|
|
|
(1.0
|
)
|
|
|
(2.5
|
)
|
|
|
(0.7
|
)
|
Additions
|
|
|
5.5
|
|
|
|
0.6
|
|
|
|
1.0
|
|
|
|
1.1
|
|
Acquisitions(2)
|
|
|
|
|
|
|
|
|
|
|
0.3
|
|
|
|
|
|
Other
divestments(3)
|
|
|
|
|
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance
|
|
|
33.5
|
|
|
|
11.4
|
|
|
|
31.4
|
|
|
|
17.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The impact of the change in gold price assumption on reserve
additions was approximately 1.7 million, 1.7 million
and 1.9 million ounces in 2010, 2009 and 2008,
respectively. The gold price assumption was $950 per ounce in
2010, $800 per ounce in 2009, $725 per ounce in 2008 and $575
per ounce in 2007. |
|
(2) |
|
In 2010, we recognized our attributable interest in Regis
Resources Ltd and their reserves in the Duketon belt of Western
Australia for an attributable reserve of 0.3 million
ounces. In 2009, reserves were increased by 6.7 million
ounces through the acquisition of the remaining 33.33% interest
in Boddington. At December 31, 2009, our economic interest
in Batu Hijau increased to 52.44% as a result of transactions
with a noncontrolling partner, increasing reserves by
1.5 million ounces. |
|
(3) |
|
In April 2010, our direct ownership interest in Batu Hijau
decreased from 35.44% to 31.5% (economic interest decreased from
52.44% to 48.50%) as a result of the divestiture required under
the Contract of Work. In November and December 2009, our direct
ownership interest in Batu Hijau decreased from 45% to 35.44% as
a result of the divestiture required under the Contract of Work.
In July 2009 we sold the Kori Kollo operation in Bolivia. |
At December 31, 2010 we had 9,420 million pounds of
proven and probable copper reserves. We added 1,000 million
pounds to proven and probable reserves, depleted
370 million pounds and divested 330 million pounds
during 2010. 2010 reserves were calculated at a copper price of
$2.50 or
5
A$2.95 per pound. A reconciliation of the changes in proven and
probable copper reserves during the past three years is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
|
(millions of pounds)
|
|
|
Opening balance
|
|
|
9,120
|
|
|
|
7,780
|
|
|
|
7,550
|
|
Depletion
|
|
|
(370
|
)
|
|
|
(310
|
)
|
|
|
(210
|
)
|
Additions(1)
|
|
|
1,000
|
|
|
|
400
|
|
|
|
440
|
|
Acquisitions(2)
|
|
|
|
|
|
|
2,040
|
|
|
|
|
|
Other
divestments(3)
|
|
|
(330
|
)
|
|
|
(790
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance
|
|
|
9,420
|
|
|
|
9,120
|
|
|
|
7,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of changes in proven and probable copper
reserves for 2010 by region is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North
|
|
|
South
|
|
|
Asia
|
|
|
|
America
|
|
|
America
|
|
|
Pacific
|
|
|
|
(millions of pounds)
|
|
|
Opening balance
|
|
|
900
|
|
|
|
1,660
|
|
|
|
6,560
|
|
Depletion
|
|
|
(20
|
)
|
|
|
|
|
|
|
(350
|
)
|
Additions
|
|
|
760
|
|
|
|
|
|
|
|
240
|
|
Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
divestments(3)
|
|
|
|
|
|
|
|
|
|
|
(330
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance
|
|
|
1,640
|
|
|
|
1,660
|
|
|
|
6,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The impact of the change in copper price assumption on reserve
additions was 150 million, 290 million and
300 million pounds in 2010, 2009 and 2008, respectively.
The copper price assumption was $2.50 per pound in 2010, $2.00
per pound in 2009, $2.00 per pound in 2008 and $1.75 per pound
in 2007. |
|
(2) |
|
In 2009, reserves were increased by 640 million pounds
through the acquisition of the remaining 33.33% interest in
Boddington. At December 31, 2009, our economic interest in
Batu Hijau increased to 52.44% as a result of transactions with
a noncontrolling partner, increasing reserves by
1,400 million pounds. |
|
(3) |
|
In April 2010, our direct ownership interest in Batu Hijau
decreased from 35.44% to 31.5% (economic interest decreased from
52.44% to 48.50%) as a result of the divestiture required under
the Contract of Work. In November and December 2009, our direct
ownership interest in Batu Hijau decreased from 45% to 35.44% as
a result of the divestiture required under the Contract of Work. |
Our exploration efforts are directed to the discovery of new
mineralized material and converting it into proven and probable
reserves. We conduct near-mine exploration around our existing
mines and greenfields exploration in other regions globally.
Near-mine exploration can result in the discovery of additional
deposits, which may receive the economic benefit of existing
operating, processing, and administrative infrastructures. In
contrast, the discovery of new mineralization through
greenfields exploration efforts will likely require capital
investment to build a separate, stand-alone operation. Our
Exploration expense was $218, $187 and $213 in 2010, 2009
and 2008, respectively.
For additional information, see Item 2, Properties, Proven
and Probable Reserves.
Licenses and
Concessions
Other than operating licenses for our mining and processing
facilities, there are no third party patents, licenses or
franchises material to our business. In many countries, however,
we conduct our mining and exploration activities pursuant to
concessions granted by, or under contract with, the host
6
government. These countries include, among others, Australia,
Canada, Ghana, Indonesia, Mexico, New Zealand, Peru and
Suriname. The concessions and contracts are subject to the
political risks associated with foreign operations. See
Item 1A, Risk Factors, below. For a more detailed
description of our Indonesian Contract of Work, see Item 2,
Properties, below.
Condition of
Physical Assets and Insurance
Our business is capital intensive and requires ongoing capital
investment for the replacement, modernization or expansion of
equipment and facilities. For more information, see Item 7,
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations, Liquidity and
Capital Resources, below.
We maintain insurance policies against property loss and
business interruption and insure against risks that are typical
in the operation of our business, in amounts that we believe to
be reasonable. Such insurance, however, contains exclusions and
limitations on coverage, particularly with respect to
environmental liability and political risk. There can be no
assurance that claims would be paid under such insurance
policies in connection with a particular event. See
Item 1A, Risk Factors, below.
Environmental
Matters
Our United States mining and exploration activities are subject
to various federal and state laws and regulations governing the
protection of the environment, including the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response,
Compensation and Liability Act; the Emergency Planning and
Community
Right-to-Know
Act; the Endangered Species Act; the Federal Land Policy and
Management Act; the National Environmental Policy Act; the
Resource Conservation and Recovery Act; and related state laws.
These laws and regulations are continually changing and are
generally becoming more restrictive. Our activities outside the
United States are also subject to governmental regulations for
the protection of the environment.
We conduct our operations so as to protect public health and the
environment and believe our operations are in compliance with
applicable laws and regulations in all material respects. Each
operating mine has a reclamation plan in place that meets all
applicable legal and regulatory requirements. At
December 31, 2010, $904 was accrued for reclamation costs
relating to current or recently producing properties.
We are involved in several matters concerning environmental
obligations associated with former, primarily historic, mining
activities. Generally, these matters concern developing and
implementing remediation plans at the various sites. Based upon
our best estimate of our liability for these matters, $144 was
accrued at December 31, 2010 for such obligations
associated with properties previously owned or operated by us or
our subsidiaries. The amounts accrued for these matters are
reviewed periodically based upon facts and circumstances
available at the time.
For a discussion of the most significant reclamation and
remediation activities, see Item 7, Managements
Discussion and Analysis of Consolidated Financial Condition and
Results of Operations, and Notes 4 and 31 to the
Consolidated Financial Statements, below.
In addition to legal and regulatory compliance, we have
developed complimentary programs to guide our company toward
achieving environmental and sustainable development objectives.
Evidencing our managements commitment towards these
objectives, in 2008, we moved our corporate headquarters to an
environmentally sustainable, LEED, gold-certified building. We
are also committed to managing climate change risks and
responsibly reducing our greenhouse gas emissions. We have
reported our greenhouse gas emissions annually to the Carbon
Disclosure Project since 2004, became a Founding Reporter on The
Climate Registry in 2008 and have committed to publicly
reporting our independently-verified greenhouse gas emissions in
the future. As a result of our efforts, we continue to achieve
milestones, such as being the first gold company listed on the
Dow Jones Sustainability Index World (DJSI),
remaining a member of the DJSI for four consecutive years, and
7
receiving International Cyanide Management Code certification at
100% of registered Newmont sites as of the end of 2009.
Employees and
Contractors
Approximately 15,500 people were employed by Newmont at
December 31, 2010. In addition, approximately
18,800 people were working as contractors in support of
Newmonts operations.
Forward-Looking
Statements
Certain statements contained in this report (including
information incorporated by reference) are forward-looking
statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and are intended to
be covered by the safe harbor provided for under these sections.
Our forward-looking statements may include, without limitation:
|
|
|
|
|
Estimates regarding future earnings;
|
|
|
|
Estimates of future mineral production and sales, for specific
operations and attributable to Newmont;
|
|
|
|
Estimates of future costs applicable to sales, other expenses
and taxes for specific operations and on a consolidated basis;
|
|
|
|
Estimates of future cash flows;
|
|
|
|
Estimates of future capital expenditures, construction,
production or closure activities and other cash needs, for
specific operations and on a consolidated basis, and
expectations as to the funding or timing thereof;
|
|
|
|
Estimates as to the projected development of certain ore
deposits, including the timing of such development, the costs of
such development and financing plans for these deposits;
|
|
|
|
Estimates of reserves and statements regarding future
exploration results and reserve replacement and the sensitivity
of reserves to metal price changes;
|
|
|
|
Statements regarding the availability, terms and costs related
to future borrowing, debt repayment and financing;
|
|
|
|
Estimates regarding future exploration expenditures, results and
reserves;
|
|
|
|
Statements regarding fluctuations in financial and currency
markets;
|
|
|
|
Estimates regarding potential cost savings, productivity,
operating performance and ownership and cost structures;
|
|
|
|
Expectations regarding the completion and timing of acquisitions
or divestitures;
|
|
|
|
Expectations regarding the
start-up
time, design, mine life, production and costs applicable to
sales and exploration potential of our projects;
|
|
|
|
Statements regarding modifications to hedge and derivative
positions;
|
|
|
|
Statements regarding political, economic or governmental
conditions and environments;
|
|
|
|
Statements regarding future transactions;
|
|
|
|
Statements regarding the impacts of changes in the legal and
regulatory environment in which we operate;
|
|
|
|
Estimates of future costs and other liabilities for certain
environmental matters; and
|
|
|
|
Estimates of pension and other post-retirement costs.
|
8
Where we express an expectation or belief as to future events or
results, such expectation or belief is expressed in good faith
and believed to have a reasonable basis. However, our
forward-looking statements are subject to risks, uncertainties
and other factors, which could cause actual results to differ
materially from future results expressed, projected or implied
by those forward-looking statements. Such risks include, but are
not limited to: the price of gold, copper and other commodities;
currency fluctuations; geological and metallurgical assumptions;
operating performance of equipment, processes and facilities;
labor relations; timing of receipt of necessary governmental
permits or approvals; domestic and foreign laws or regulations,
particularly relating to the environment and mining; domestic
and international economic and political conditions; our ability
to obtain or maintain necessary financing; and other risks and
hazards associated with mining operations. More detailed
information regarding these factors is included in Item 1,
Business, Item 1A, Risk Factors, and elsewhere throughout
this report. Given these uncertainties, readers are cautioned
not to place undue reliance on our forward-looking statements.
All subsequent written and oral forward-looking statements
attributable to Newmont or to persons acting on its behalf are
expressly qualified in their entirety by these cautionary
statements. Newmont disclaims any intention or obligation to
update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise, except as
may be required under applicable securities laws.
Available
Information
Newmont maintains an internet web site at
www.newmont.com. Newmont makes available, free of charge,
through the Investor Relations section of the web site, its
Annual Reports on
Form 10-K,
Quarterly Reports on
Form 10-Q,
Current Reports on
Form 8-K,
Section 16 filings and all amendments to those reports, as
soon as reasonably practicable after such material is
electronically filed with the Securities and Exchange
Commission. Certain other information, including Newmonts
Corporate Governance Guidelines, the charters of key committees
of its Board of Directors and its Code of Business Ethics and
Conduct are also available on the web site.
|
|
ITEM 1A.
|
RISK
FACTORS (dollars in millions except per share, per ounce and per
pound amounts)
|
Our business activities are subject to significant risks,
including those described below. Every investor or potential
investor in our securities should carefully consider these
risks. If any of the described risks actually occurs, our
business, financial position and results of operations could be
materially adversely affected. Such risks are not the only ones
we face and additional risks and uncertainties not presently
known to us or that we currently deem immaterial may also affect
our business.
A substantial
or extended decline in gold or copper prices would have a
material adverse effect on Newmont.
Our business is dependent on the prices of gold and copper,
which fluctuate on a daily basis and are affected by numerous
factors beyond our control. Factors tending to influence prices
include:
|
|
|
|
|
gold sales or leasing by governments and central banks or
changes in their monetary policy, including gold inventory
management and reallocation of reserves;
|
|
|
|
speculative short positions taken by significant investors or
traders in gold or copper;
|
|
|
|
the strength of the U.S. dollar;
|
|
|
|
expectations of the future rate of inflation;
|
|
|
|
interest rates;
|
9
|
|
|
|
|
recession or reduced economic activity in the United States and
other industrialized or developing countries;
|
|
|
|
decreased industrial, jewelry or investment demand;
|
|
|
|
increased supply from production, disinvestment and scrap;
|
|
|
|
forward sales by producers in hedging or similar
transactions; and
|
|
|
|
availability of cheaper substitute materials.
|
Any decline in our realized gold or copper price adversely
impacts our revenues, net income and cash flows, particularly in
light of our strategy of not engaging in hedging transactions
with respect to gold or copper. We have recorded asset
write-downs in the past and may experience additional
write-downs as a result of lower gold or copper prices in the
future.
In addition, sustained lower gold or copper prices can:
|
|
|
|
|
reduce revenues further through production declines due to
cessation of the mining of deposits, or portions of deposits,
that have become uneconomic at prevailing gold or copper prices;
|
|
|
|
reduce or eliminate the profit that we currently expect from ore
stockpiles and ore on leach pads;
|
|
|
|
halt or delay the development of new projects;
|
|
|
|
reduce funds available for exploration with the result that
depleted reserves may not be replaced; and
|
|
|
|
reduce existing reserves by removing ores from reserves that can
no longer be economically processed at prevailing prices.
|
Also see the discussion in Item 1, Business, Gold or Copper
Price.
We may be
unable to replace gold and copper reserves as they become
depleted.
Gold and copper producers must continually replace reserves
depleted by production to maintain production levels over the
long term and provide a return on invested capital. Depleted
reserves can be replaced in several ways, including by expanding
known ore bodies, by locating new deposits, or by acquiring
interests in reserves from third parties. Exploration is highly
speculative in nature, involves many risks and frequently is
unproductive. Our current or future exploration programs may not
result in new mineral producing operations. Even if significant
mineralization is discovered, it will likely take many years
from the initial phases of exploration until commencement of
production, during which time the economic feasibility of
production may change.
We may consider, from time to time, the acquisition of ore
reserves related to development properties and operating mines.
Such acquisitions are typically based on an analysis of a
variety of factors including historical operating results,
estimates of and assumptions regarding the extent of ore
reserves, the timing of production from such reserves and cash
and other operating costs. Other factors that affect our
decision to make any such acquisitions may also include our
assumptions for future gold or copper prices or other mineral
prices and the projected economic returns and evaluations of
existing or potential liabilities associated with the property
and its operations and projections of how these may change in
the future. In addition, in connection with future acquisitions
we may rely on data and reports prepared by third parties and
which may contain information or data that we are unable to
independently verify or confirm. Other than historical operating
results, all of these factors are uncertain and may have an
impact on our revenue, our cash and other operating issues, as
well as contributing to the uncertainties related to the process
used to estimate ore reserves. In addition, there may be intense
competition for the acquisition of attractive mining properties.
10
As a result of these uncertainties, our exploration programs and
any acquisitions which we may pursue may not result in the
expansion or replacement of our current production with new ore
reserves or operations, which could have a material adverse
effect on our business, prospects, results of operations and
financial position.
Estimates of
proven and probable reserves and non reserve mineralization are
uncertain and the volume and grade of ore actually recovered may
vary from our estimates.
The reserves stated in this report represent the amount of gold
and copper that we estimated, at December 31, 2010 and
2009, could be economically and legally extracted or produced at
the time of the reserve determination. Estimates of proven and
probable reserves are subject to considerable uncertainty. Such
estimates are, to a large extent, based on the prices of gold
and copper and interpretations of geologic data obtained from
drill holes and other exploration techniques. Producers use
feasibility studies to derive estimates of capital and operating
costs based upon anticipated tonnage and grades of ore to be
mined and processed, the predicted configuration of the ore
body, expected recovery rates of metals from the ore, the costs
of comparable facilities, the costs of operating and processing
equipment and other factors. Actual operating costs and economic
returns on projects may differ significantly from original
estimates. Further, it may take many years from the initial
phases of exploration until commencement of production, during
which time, the economic feasibility of production may change.
In addition, if the price of gold or copper declines from recent
levels, if production costs increase or recovery rates decrease,
or if applicable laws and regulations are adversely changed, we
can offer no assurance that the indicated level of recovery will
be realized or that mineral reserves as currently reported can
be mined or processed profitably. If we determine that certain
of our ore reserves have become uneconomic, this may ultimately
lead to a reduction in our aggregate reported reserves.
Consequently, if our actual mineral reserves and resources are
less than current estimates, our business, prospects, results of
operations and financial position may be materially impaired.
Increased
operating costs could affect our profitability.
Costs at any particular mining location are subject to variation
due to a number of factors, such as changing ore grade, changing
metallurgy and revisions to mine plans in response to the
physical shape and location of the ore body. In addition, costs
are affected by the price of input commodities, such as fuel,
electricity, labor, chemical reagents, explosives, steel and
concrete. Commodity costs are, at times, subject to volatile
price movements, including increases that could make production
at certain operations less profitable and changes in laws and
regulations affecting their price, use and transport. Reported
costs may also be affected by changes in accounting standards. A
material increase in costs at any significant location could
have a significant effect on our profitability and operating
cash flow.
We could have significant increases in capital and operating
costs over the next several years in connection with the
development of new projects in challenging jurisdictions and in
sustaining existing operations. Costs associated with capital
expenditures have escalated on an industry-wide basis over the
last several years, as a result of factors beyond our control,
including the prices of oil, steel and other commodities and
labor. Increased costs for capital expenditures may have an
adverse effect on the profitability of existing operations and
economic returns anticipated from new projects.
Estimates
relating to new development projects are uncertain and we may
incur higher costs and lower economic returns than
estimated.
Mine development projects typically require a number of years
and significant expenditures during the development phase before
production is possible. Such projects could experience
unexpected problems and delays during development, construction
and mine
start-up.
11
Our decision to develop a project is typically based on the
results of feasibility studies, which estimate the anticipated
economic returns of a project. The actual project profitability
or economic feasibility may differ from such estimates as a
result of any of the following factors, among others:
|
|
|
|
|
changes in tonnage, grades and metallurgical characteristics of
ore to be mined and processed;
|
|
|
|
higher input commodity and labor costs;
|
|
|
|
the quality of the data on which engineering assumptions were
made;
|
|
|
|
adverse geotechnical conditions;
|
|
|
|
availability of adequate labor force and supply and cost of
water and power;
|
|
|
|
fluctuations in inflation and currency exchange rates;
|
|
|
|
availability and terms of financing;
|
|
|
|
delays in obtaining environmental or other government permits or
changes in the laws and regulations related to those permits;
|
|
|
|
weather or severe climate impacts; and
|
|
|
|
potential delays relating to social and community issues.
|
Our future development activities may not result in the
expansion or replacement of current production with new
production, or one or more of these new production sites or
facilities may be less profitable than currently anticipated or
may not be profitable at all, any of which could have a material
adverse effect on our results of operations and financial
position.
We may
experience increased costs or losses resulting from the hazards
and uncertainties associated with mining.
The exploration for natural resources and the development and
production of mining operations are activities that involve a
high level of uncertainty. These can be difficult to predict and
are often affected by risks and hazards outside of our control.
These factors include, but are not limited to:
|
|
|
|
|
environmental hazards, including discharge of metals, pollutants
or hazardous chemicals;
|
|
|
|
industrial accidents, including in connection with the operation
of mining transportation equipment and accidents associated with
the preparation and ignition of large-scale blasting operations,
milling equipment and conveyor systems;
|
|
|
|
underground fires or floods;
|
|
|
|
unexpected geological formations or conditions (whether in
mineral or gaseous form);
|
|
|
|
ground and water conditions;
|
|
|
|
fall-of-ground
accidents in underground operations;
|
|
|
|
failure of mining pit slopes and tailings dam walls;
|
|
|
|
seismic activity; and
|
|
|
|
other natural phenomena, such as lightning, cyclonic or tropical
storms, floods or other inclement weather conditions.
|
The occurrence of one or more of these events in connection with
our exploration activities and development and production of
mining operations may result in the death of, or personal injury
to, our employees, other personnel or third parties, the loss of
mining equipment, damage to or destruction of mineral properties
or production facilities, monetary losses, deferral or
unanticipated fluctuations in production, environmental damage
and potential legal liabilities, all of which may adversely
affect our reputation, business, prospects, results of
operations and financial position.
12
Shortages of
critical parts, equipment and skilled labor may adversely affect
our operations and development projects.
The mining industry has been impacted by increased demand for
critical resources such as input commodities, drilling
equipment, tires and skilled labor. These shortages have, at
times, impacted the efficiency of our operations, and resulted
in cost increases and delays in construction of projects;
thereby impacting operating costs, capital expenditures and
production and construction schedules.
Mining
companies are increasingly required to consider and provide
benefits to the communities and countries in which they operate,
and are subject to extensive environmental, health and safety
laws and regulations.
As a result of public concern about the real or perceived
detrimental effects of economic globalization and global climate
impacts, businesses generally and large multinational
corporations in natural resources industries, such as Newmont,
in particular, face increasing public scrutiny of their
activities. These businesses are under pressure to demonstrate
that, as they seek to generate satisfactory returns on
investment to shareholders, other stakeholders, including
employees, governments, communities surrounding operations and
the countries in which they operate, benefit and will continue
to benefit from their commercial activities. Such pressures tend
to be particularly focused on companies whose activities are
perceived to have a high impact on their social and physical
environment. The potential consequences of these pressures
include reputational damage, legal suits and social investment
obligations.
In addition, our ability to successfully obtain key permits and
approvals to explore for, develop and operate mines and to
successfully operate in communities around the world will likely
depend on our ability to develop, operate and close mines in a
manner that is consistent with the creation of social and
economic benefits in the surrounding communities. Our ability to
obtain permits and approvals and to successfully operate in
particular communities may be adversely impacted by real or
perceived detrimental events associated with our activities or
those of other mining companies affecting the environment, human
health and safety of communities in which we operate. Delays in
obtaining or failure to obtain government permits and approvals
may adversely affect our operations, including our ability to
explore or develop properties, commence production or continue
operations. Key permits and approvals may be revoked or
suspended or may be varied in a manner that adversely affects
our operations, including our ability to explore or develop
properties, commence production or continue operations.
Our exploration, development, mining and processing operations
are subject to extensive laws and regulations governing worker
health and safety and the protection of the environment, which
generally apply to air and water quality, protection of
protected species, hazardous waste management and reclamation.
We have made, and expect to make in the future, significant
expenditures to comply with such laws and regulations.
Compliance with these laws and regulations imposes substantial
costs and burdens, and can cause delays in obtaining, or failure
to obtain, government permits and approvals which may adversely
impact our operations.
Future changes in applicable laws, regulations and permits or
changes in their enforcement or regulatory interpretation could
substantially increase costs to achieve compliance, lead to the
revocation of existing or future exploration or mining rights or
otherwise have an adverse impact on our results of operations
and financial position. For instance, the operation of our mines
in the United States is subject to regulation by the Federal
Mine Safety and Health Administration (MSHA) under
the Federal Mine Safety and Health Act of 1977 (the Mine
Act). MSHA inspects our mines on a regular basis and
issues various citations and orders when it believes a violation
has occurred under the Mine Act. If such inspections result in
an alleged violation, we may be subject to fines, penalties or
sanctions and our mining operations could be subject to
temporary or extended closures, which could have an adverse
effect on our results of operations and financial position.
Following passage of The Mine Improvement and New Emergency
Response Act of 2006, MSHA significantly increased the
13
numbers of citations and orders charged against mining
operations. The dollar penalties assessed for citations issued
has also increased in recent years.
In addition, the United States Environmental Protection Agency
(EPA) is currently seeking to regulate as hazardous
waste under the Resource Conservation and Recovery Act
(RCRA) secondary streams derived from core
beneficiation operations, such as our roasting operations, in
Nevada. Historically, such streams have been considered exempt
from RCRA and have been regulated by the Nevada Division of
Environmental Protection. The regulation of these streams as
hazardous waste under RCRA could subject us to civil and
criminal penalties for past practices and require us to incur
substantial future costs to modify our waste water collection
systems and retrofit our tailings storage facilities at our
Nevada mining operations, which could have an adverse effect on
our results of operations and financial position.
Increased global attention or regulation on water quality
discharge, such as recently enacted water quality legislation
applicable to our operations in Peru, and on restricting or
prohibiting the use of cyanide and other hazardous substances in
processing activities could similarly have an adverse impact on
our results of operations and financial position due to
increased compliance and input costs.
We have implemented a management system designed to promote
continuous improvement in health and safety, environmental
performance and community relations. However, our ability to
operate, and thus, our results of operations and our financial
position, could be adversely affected by accidents or events
detrimental (or perceived to be detrimental) to the health and
safety of our employees, the environment or the communities in
which we operate.
Mine closure
and remediation costs for environmental liabilities may exceed
the provisions we have made.
Natural resource companies are required to close their
operations and rehabilitate the lands that they mine in
accordance with a variety of environmental laws and regulations.
Estimates of the total ultimate closure and rehabilitation costs
for gold and copper mining operations are significant and based
principally on current legal and regulatory requirements and
mine closure plans that may change materially. For example, we
have conducted extensive remediation work at two inactive sites
in the United States. We are conducting mill remediation
activities at a third site in the United States, an inactive
uranium mine and mill formerly operated by a subsidiary of
Newmont, but remediation at the mine is subject to dispute. In
late 2008, the EPA issued an order regarding water management at
the mine. The environmental standards that may ultimately be
imposed at this site remain uncertain and a risk exists that the
costs of remediation may exceed the financial accruals that have
been made for such remediation by a material amount.
Any underestimated or unanticipated rehabilitation costs could
materially affect our financial position, results of operations
and cash flows. Environmental liabilities are accrued when they
become known, are probable and can be reasonably estimated.
Whenever a previously unrecognized remediation liability becomes
known, or a previously estimated reclamation cost is increased,
the amount of that liability and additional cost will be
recorded at that time and could materially reduce our
consolidated net income attributable to Newmont stockholders in
the related period. In addition, regulators are increasingly
requesting security in the form of cash collateral, credit,
trust arrangements or guarantees to secure the performance of
environmental obligations, which could have an adverse effect on
our financial position. For a more detailed discussion of
potential environmental liabilities, see the discussion in
Environmental Matters, Note 31 to the Consolidated
Financial Statements.
The laws and regulations governing mine closure and remediation
in a particular jurisdiction are subject to review at any time
and may be amended to impose additional requirements and
conditions which may cause our provisions for environmental
liabilities to be underestimated and could materially affect our
financial position or results of operations.
14
Regulations
and pending legislation governing issues involving climate
change could result in increased operating costs which could
have a material adverse effect on our business.
Energy is a significant input to our mining operations, with our
principal energy sources being electricity, purchased petroleum
products, natural gas and coal.
A number of governments or governmental bodies have introduced
or are contemplating regulatory changes in response to the
potential impacts of climate change that are viewed as the
result of emissions from the combustion of carbon-based fuels.
The December 1997 Kyoto Protocol, which ends in 2012,
established a set of greenhouse gas emission targets for
developed countries that have ratified the Protocol, which
include Ghana, Australia and Peru. The Conference of Parties 15
(COP15) of the United Nations Framework Convention
on Climate Change held in Copenhagen, Denmark in December 2009
was to determine the path forward after the Kyoto Protocol ends.
COP15 resulted in the Copenhagen Accord (the
Accord), a non-binding document calling for
economy-wide emissions targets for 2020. Prior to the
January 31, 2010 deadline, the United States, Australia,
New Zealand, Indonesia, Ghana and Peru re-affirmed their
commitment to the Accord. The U.S. Congress and several
U.S. states have initiated legislation regarding climate
change that will affect energy prices and demand for carbon
intensive products. In December 2009, the
U.S. Environmental Protection Agency issued an endangerment
finding under the U.S. Clean Air Act that current and
projected concentrations of certain mixed greenhouse gases,
including carbon dioxide, in the atmosphere threaten the public
health and welfare. It is possible that proposed regulation may
be promulgated in the United States to address the concerns
raised by such endangerment finding. Additionally, the
Australian Government may introduce legislation authorizing a
national emissions trading scheme and mandatory renewable energy
targets.
Legislation and increased regulation regarding climate change
could impose increased costs on us, our venture partners and our
suppliers, including increased energy, capital equipment,
environmental monitoring and reporting and other costs to comply
with such regulations. Until the timing, scope and extent of any
future regulation becomes known, we cannot predict the effect on
our financial condition, financial position, results of
operations and ability to compete.
The potential physical impacts of climate change on our
operations are highly uncertain, and would be particular to the
geographic circumstances in areas in which we operate. These may
include changes in rainfall and storm patterns and intensities,
water shortages, changing sea levels and changing temperatures.
These impacts may adversely impact the cost, production and
financial performance of our operations.
Our operations
are subject to risks of doing business.
Exploration, development, production and mine closure activities
are subject to political, economic and other risks of doing
business, including:
|
|
|
|
|
disadvantages of competing against companies from countries that
are not subject to U.S. laws and regulations, including the
Foreign Corrupt Practices Act;
|
|
|
|
changes in laws or regulations;
|
|
|
|
royalty and tax increases or claims, including retroactive
increases and claims and requests to renegotiate terms of
existing royalties and taxes, by governmental entities,
including such increases, claims
and/or
requests by the governments of Ghana, Indonesia, Australia,
Peru, the United States and the State of Nevada;
|
|
|
|
increases in training and other costs and challenges relating to
requirements by governmental entities to employ the nationals of
the country in which a particular operation is located;
|
|
|
|
delays in obtaining or renewing, or the inability to obtain,
maintain or renew, necessary governmental permits and approvals;
|
15
|
|
|
|
|
claims for increased mineral royalties or ownership interests by
local or indigenous communities;
|
|
|
|
expropriation or nationalization of property;
|
|
|
|
currency fluctuations, particularly in countries with high
inflation;
|
|
|
|
foreign exchange controls;
|
|
|
|
restrictions on the ability of local operating companies to sell
gold offshore for U.S. dollars, or on the ability of such
companies to hold U.S. dollars or other foreign currencies
in offshore bank accounts;
|
|
|
|
import and export regulations, including restrictions on the
export of gold;
|
|
|
|
increases in costs relating to, or restrictions or prohibitions
on, the use of ports for concentrate storage and shipping,
particularly in relation to our Boddington and Batu Hijau
operations where use of alternative ports is not currently
economically feasible;
|
|
|
|
restrictions on the ability to pay dividends offshore or to
otherwise repatriate funds;
|
|
|
|
risk of loss due to civil strife, acts of war, guerrilla
activities, insurrection and terrorism;
|
|
|
|
risk of loss due to criminal activities such as trespass,
illegal mining, theft and vandalism;
|
|
|
|
risk of loss due to disease and other potential endemic health
issues;
|
|
|
|
disadvantages relating to submission to the jurisdiction of
foreign courts or arbitration panels or enforcement or appeals
of judgments at foreign courts or arbitration panels against a
sovereign nation within its own territory; and
|
|
|
|
other risks arising out of foreign sovereignty over the areas in
which our operations are conducted, including risks inherent in
contracts with government owned entities such as unilateral
cancellation or renegotiation of contracts, licenses or other
mining rights.
|
Consequently, our exploration, development and production
activities may be affected by these and other factors, many of
which are beyond our control, some of which could materially
adversely affect our financial position or results of operations.
Our Batu Hijau
operation in Indonesia is subject to political and economic
risks.
We have a substantial investment in Indonesia, a nation that
since 1997 has undergone financial crises and devaluation of its
currency, outbreaks of political and religious violence and acts
of terrorism, changes in national leadership, and the secession
of East Timor, one of its former provinces. These factors
heighten the risk of abrupt changes in the national policy
toward foreign investors, which in turn could result in
unilateral modification of concessions or contracts, increased
taxation, denial of permits or permit renewals or expropriation
of assets.
Presidential and parliamentary elections took place in July
2009, and although the president was re-elected, new ministers
or members of parliament may have different (and potentially
more negative) views relating to mining in general, and our
assets and operations in particular, and may have a preference
for national mining companies to own Indonesias mineral
assets.
Violence committed by radical elements in Indonesia and other
countries, and the presence or increase of U.S. forces in
Iraq and Afghanistan, may increase the risk that operations
owned by U.S. companies will be the target of violence. If
our Batu Hijau operation were so targeted it could have an
adverse effect on our business.
16
Our Batu Hijau
operation in Indonesia may be adversely affected by a delay in
receiving certain permit renewals.
Over the years, we are required to apply for renewals of certain
key permits related to Batu Hijau. PTNNT, the entity operating
Batu Hijau, employs a submarine tailings disposal
(STD) system. The STD system is operated pursuant to
a permit from the government of Indonesia that is up for renewal
in May 2011, and is a key requirement to continue normal
operations at Batu Hijau. A delay or failure to receive a STD
permit renewal could adversely impact Batu Hijau operations and
may adversely impact our future operating and financial results.
Our ownership
interest in Batu Hijau has been reduced in accordance with the
Contract of Work issued by the Indonesian Government and future
reductions in our interest in PTNNT may result in our loss of
control over the Batu Hijau operations.
We operate Batu Hijau and currently have a 31.5% direct
ownership interest, held through the Nusa Tenggara Partnership
(NTP) with an affiliate of Sumitomo Corporation of
Japan. We have a 56.25% interest in NTP and a Sumitomo affiliate
holds the remaining 43.75%. In December 2009, the Company
entered into a transaction with P.T. Pukuafu Indah
(PTPI), an unrelated noncontrolling partner of
PTNNT, whereby we agreed to advance certain funds to PTPI in
exchange for a pledge of the noncontrolling partners 20%
share of PTNNT dividends, net of withholding tax, and the
assignment of certain voting rights and obligations to the
Company. On June 25, 2010, PTPI completed the sale of
approximately a 2.2% interest in PTNNT to PT Indonesia Masbaga
Investama (PTIMI) and the Company entered into a
transaction with PTIMI, whereby we agreed to advance certain
funds to PTIMI in exchange for a pledge of PTIMIs 2.2%
share of PTNNT dividends, net of withholding tax, and the
assignment of certain voting rights and obligations to the
Company. Based on the above transactions, the Company recognized
an additional 17% effective economic interest in PTNNT. Combined
with the Companys 56.25% ownership in NTP, Newmont has a
48.5% effective economic interest in PTNNT and continues to
consolidate Batu Hijau in its Consolidated Financial Statements.
Under the Contract of Work executed in 1986 between the
Indonesian government and PTNNT, 51% of PTNNTs shares must
be offered for sale, first, to the Indonesian government or,
second, to Indonesian nationals by March 31, 2010. Pursuant
to this divestiture provision, the ownership interest in the
Batu Hijau mines production, assets and proven and
probable equity reserves may be reduced in the future to as low
as 27.56% and ownership interest of NTP in PTNNT could be
reduced to 49%, thus reducing our ability to control the
operation at Batu Hijau. Loss of control over PTNNT operations
may result in our deconsolidation of PTNNT for accounting
purposes, which would reduce our reported consolidated sales,
total assets and operating cash flows. See Note 31 to the
Consolidated Financial Statements for more information about the
PTNNT share divestiture.
Furthermore, as part of the negotiation of the share
divestitures with PT Multi Daerah Bersaing (PTMDB),
the consortium of Indonesian regional and local governments and
an unrelated Indonesian company that purchased such shares, the
parties executed an operating agreement under which each
recognizes the right of NTP to operate Batu Hijau and binds the
parties to adhere to NTPs standards for safety,
environmental stewardship and community responsibility. The
operating agreement remains in effect for so long as NTP owns
more shares of PTNNT than PTMDB. If the operating agreement
terminates, we will likely lose effective control over the
operations of Batu Hijau and will be at risk for operations
conducted in a manner that could potentially reduce the value of
PTNNT or results in safety, environmental or social standards
below those adhered to by NTP.
17
The Contract
of Work has been and may continue to be the subject of dispute
or legal review and is subject to termination by the Indonesian
government if we do not comply with our obligations, which would
result in loss of all or much of the value of Batu
Hijau.
The divestiture provisions of the Contract of Work have been the
subject of dispute. In 2008, the Department of Energy and
Mineral Resources of the Indonesian government (the
DEMR) alleged that PTNNT was in breach of its
divestiture requirements under the Contract of Work and
threatened to terminate the Contract of Work if PTNNT did not
agree to divest shares in accordance with the direction of the
DEMR. The matter was resolved by an international arbitration
panel in March 2009. The arbitration decision led to NTP
divesting 24% of PTNNTs shares to PTMDB, the party
nominated by the DEMR. NTP is in the concluding stages of
working with the DEMR to divest the final 7% interest in PTNNT
required to be divested under the Contract of Work. Following
NTPs divestiture of 24% of PTNNTs shares to PTMDB,
PTPI filed lawsuits in the South Jakarta District Court
contending that it owns, or has rights to own, the shares in
PTNNT that were divested by NTP to fulfill the requirements of
the Contract of Work and the March 2009 arbitration award. In
November 2010, the South Jakarta District Court issued a ruling
with respect to one of the lawsuits, finding that PTPI has an
entitlement to receive the full 31% interest in PTNNT required
to be divested under the Contract of Work and awarding PTPI
monetary damages of approximately $27. NTP has appealed the
South Jakarta District Court ruling, a ruling which we believe
contradicts both the Contract of Work and the March 2009
arbitration. Although we are confident that the appellate courts
will reverse the South Jakarta District Court ruling, there can
be no assurance that NTP will prevail in this litigation.
Although the Indonesian government has acknowledged that PTNNT
is currently in compliance with the Contract of Work, future
disputes may arise under the Contract of Work. Moreover, there
have been statements, from time to time, by some within the
Indonesian government who advocate elimination of Contracts of
Work and who may try to instigate future disputes surrounding
the Contract of Work, particularly given that Batu Hijau is one
of the largest businesses within the country. Although any
dispute under the Contract of Work is subject to international
arbitration, there can be no assurance that we would prevail in
any such dispute and any termination of the Contract of Work
could result in substantial diminution in the value of our
interests in PTNNT. See Note 31 to the Consolidated
Financial Statements for more information about the disputes
involving the Contract of Work.
In January 2009, the Indonesian Government passed a new mining
law. While the law preserves the right PTNNT to operate our Batu
Hijau operations pursuant to the Contract of Work, no assurances
can be provided that the Indonesian government will not seek to
renegotiate certain provisions of the Contract of Work to
conform to certain provisions of the new mining law, which could
include requests for, among other things, higher royalty rates.
Our operations
in Peru are subject to political risks.
During the last several years, Yanacocha, in which we own a
51.35% interest, has been the target of numerous local political
protests, some of which blocked the road between the Yanacocha
mine complex and the City of Cajamarca in Peru. We cannot
predict whether similar or more significant incidents will occur
and the recurrence of significant community opposition or
protests could adversely affect Yanacochas assets and
operations. In 2008, 2009, 2010 and thus far in 2011, no
material roadblocks or protests occurred involving Yanacocha.
In December 2006, Yanacocha, along with other mining companies
in Peru, entered into a five-year agreement with the central
government to contribute 3.75% of net profits to fund social
development projects. Although the current government has
generally taken positions promoting private investment, we
cannot predict future government positions on foreign
investment, mining concessions, land tenure, environmental
regulation or taxation. National elections are scheduled in
April 2011 and a change in government positions on these issues
could adversely affect Yanacochas assets and operations,
which could have a material adverse effect on our results of
operations and financial position.
18
Our Company
and the mining industry are facing continued geotechnical
challenges, which could adversely impact our production and
profitability.
Newmont and the mining industry are facing continued
geotechnical challenges due to the older age of certain of our
mines and a trend toward mining deeper pits and more complex
deposits. This leads to higher pit walls, more complex
underground environments and increased exposure to geotechnical
instability and hydrological impacts. As our operations are
maturing, the open pits at many of our sites are getting deeper
and we have experienced certain geotechnical failures at some of
our mines, including, without limitation, in Indonesia at the
Batu Hijau open-pit mine and at our operations in Nevada and
Peru. In January 2010, our affiliate, PTNNT, experienced a
geotechnical failure on a portion of the southeast wall causing
a slide, which regrettably resulted in a fatality of one of the
mine employees. Operations were temporarily suspended to conduct
investigations and operations have since recommenced.
No absolute assurances can be given that unanticipated adverse
geotechnical and hydrological conditions, such as landslides and
pit wall failures, will not occur in the future or that such
events will be detected in advance. Geotechnical instabilities
can be difficult to predict and are often affected by risks and
hazards outside of our control, such as severe weather and
considerable rainfall, which may lead to periodic floods,
mudslides, wall instability, and seismic activity, which may
result in slippage of material.
Geotechnical failures could result in limited or restricted
access to mine sites, suspension of operations, government
investigations, increased monitoring costs, remediation costs,
loss of ore and other impacts, which could cause one or more of
our projects to be less profitable than currently anticipated
and could result in a material adverse effect on our results of
operations and financial position.
Currency
fluctuations may affect our costs.
Currency fluctuations may affect the costs that we incur at our
operations. Gold and copper is sold throughout the world based
principally on the U.S. dollar price, but a portion of our
operating expenses are incurred in local currencies. The
appreciation of those local currencies against the
U.S. dollar increases our costs of production in
U.S. dollar terms at mines located outside the
United States.
The foreign currency that primarily impacts our results of
operations is the Australian dollar. We estimate that every
$0.10 increase in U.S. dollar/Australian dollar exchange
rate increases annually the U.S. dollar Costs applicable
to sales by approximately $79 for each ounce of gold
produced from operations in Australia before taking into account
the impact of currency hedging. From December 31, 2009 to
December 31, 2010, the Australian dollar appreciated by
approximately $0.12 per U.S. dollar, or approximately 13%.
We hedge up to 90% of our future forecasted Australian dollar
denominated operating expenditures to reduce the variability of
our Australian dollar exposure. At December 31, 2010 we
have hedged 72%, 45%, 22%, 17% and 8% of our forecasted
Australian denominated operating costs in 2011, 2012, 2013, 2014
and 2015, respectively. Our Australian dollar derivative
programs will limit the benefit to the Company of future
decreases, if any, in the U.S. dollar/Australian dollar
exchange rates. For additional information, see Item 7,
Managements Discussion and Analysis of Consolidated
Financial Condition and Results of Operations, Results of
Consolidated Operations, Foreign Currency Exchange Rates, below.
For a more detailed description of how currency exchange rates
may affect costs, see discussion in Foreign Currency in
Item 7A, Quantitative and Qualitative Discussions About
Market Risk.
Our business
requires substantial capital investment and we may be unable to
raise additional funding on favorable terms.
The construction and operation of potential future projects
including the Akyem project in Ghana, the Conga project in Peru,
the Hope Bay project in Nunavut, Canada, and various exploration
projects will require significant funding. Our operating cash
flow and other sources of funding may become insufficient to
meet all of these requirements, depending on the timing and
costs of development of these and other projects. As a result,
new sources of capital may be needed to meet the funding
19
requirements of these investments, fund our ongoing business
activities and pay dividends. Our ability to raise and service
significant new sources of capital will be a function of
macroeconomic conditions, future gold and copper prices, our
operational performance and our current cash flow and debt
position, among other factors. In the event of lower gold and
copper prices, unanticipated operating or financial challenges,
or a further dislocation in the financial markets as experienced
in recent years, our ability to pursue new business
opportunities, invest in existing and new projects, fund our
ongoing operations, retire or service all of our outstanding
debt and pay dividends could be significantly constrained.
Any downgrade
in the credit ratings assigned to our debt securities could
increase our future borrowing costs and adversely affect the
availability of new financing.
At December 31, 2010 Standard & Poors
Rating Services rated Newmont Mining Corporation BBB+, with a
stable outlook, and Moodys Investors Service rated Newmont
Mining Corporation Baa1 with a stable outlook. There can be no
assurance that any rating assigned will remain for any given
period of time or that a rating will not be lowered if, in that
rating agencys judgment, future circumstances relating to
the basis of the rating so warrant. If we are unable to maintain
our outstanding debt and financial ratios at levels acceptable
to the credit rating agencies, or should our business prospects
deteriorate, our ratings could be downgraded by the rating
agencies, which could adversely affect the value of our
outstanding securities, our existing debt and our ability to
obtain new financing on favorable terms, if at all, and increase
our borrowing costs, which in turn could impair our results of
operations and financial position.
To the extent
that we seek to expand our operations and increase our reserves
through acquisitions, we may experience issues in executing
acquisitions or integrating acquired operations.
From time to time, we examine opportunities to make selective
acquisitions in order to expand our operations and reported
reserves. The success of any acquisition would depend on a
number of factors, including, but not limited to:
|
|
|
|
|
identifying suitable candidates for acquisition and negotiating
acceptable terms;
|
|
|
|
obtaining approval from regulatory authorities and potentially
the Companys shareholders;
|
|
|
|
maintaining our financial and strategic focus and avoiding
distraction of management during the process of integrating the
acquired business;
|
|
|
|
implementing our standards, controls, procedures and policies at
the acquired business and addressing any pre-existing
liabilities or claims involving the acquired business; and
|
|
|
|
to the extent the acquired operations are in a country in which
we have not operated historically, understanding the regulations
and challenges of operating in that new jurisdiction.
|
There can be no assurance that we will be able to conclude any
acquisitions successfully, or that any acquisition will achieve
the anticipated synergies or other positive results. Any
material problems that we encounter in connection with such an
acquisition could have a material adverse effect on our
business, results of operations and financial position.
Our operations
may be adversely affected by energy shortages.
Our mining operations and development projects require
significant amounts of energy. Our principal energy sources are
electricity, purchased petroleum products, natural gas and coal.
Some of our operations are in remote locations requiring long
distance transmission of power, and in some locations we compete
with other companies for access to third party power generators
or electrical supply networks. A disruption in the transmission
of energy, inadequate energy transmission infrastructure or the
termination of any of our energy supply contracts could
interrupt our energy supply and adversely affect our operations.
We have periodically experienced power shortages in Ghana
resulting primarily from drought, increasing demands for
electricity and insufficient hydroelectric or other generating
capacity which
20
caused curtailment of production at our Ahafo operations. As a
result of the mining industrys agreement to construct and
install an 80 mega-watt power plant during 2007, the Ghanaian
government has agreed, if required, to curtail power consumption
as a result of power shortages and to distribute available power
proportionately between participating mines and other industrial
and commercial users. The need to use alternative sources of
power may result in higher than anticipated costs, which will
affect operating costs. Continued power shortages and increased
costs may adversely affect our results of operations and
financial position.
Continuation
of our mining production is dependent on the availability of
sufficient water supplies to support our mining
operations.
Our mining operations require significant quantities of water
for mining, ore processing and related support facilities. Our
operations in North and South America and Australia are in areas
where water is scarce and competition among users for continuing
access to water is significant. Continuous production at our
mines is dependent on our ability to maintain our water rights
and claims and defeat claims adverse to our current water uses
in legal proceedings. Although each of our operations currently
has sufficient water rights and claims to cover its operational
demands, we cannot predict the potential outcome of pending or
future legal proceedings relating to our water rights, claims
and uses. The loss of some or all water rights for any of our
mines, in whole or in part, or shortages of water to which we
have rights could require us to curtail or shut down mining
production and could prevent us from pursuing expansion
opportunities. Laws and regulations may be introduced in some
jurisdictions in which we operate which could limit our access
to sufficient water resources in our operations, thus adversely
affecting our operations.
The occurrence
of events for which we are not insured may affect our cash flow
and overall profitability.
We maintain insurance policies that mitigate against certain
risks related to our operations. This insurance is maintained in
amounts that we believe are reasonable depending upon the
circumstances surrounding each identified risk. However, we may
elect not to have insurance for certain risks because of the
high premiums associated with insuring those risks or for
various other reasons; in other cases, insurance may not be
available for certain risks. Some concern always exists with
respect to investments in parts of the world where civil unrest,
war, nationalist movements, political violence or economic
crises are possible. These countries may also pose heightened
risks of expropriation of assets, business interruption,
increased taxation or unilateral modification of concessions and
contracts. We do not maintain insurance policies against
political risk. Occurrence of events for which we are not
insured may affect our results of operations and financial
position.
Our business
depends on good relations with our employees.
Production at our mines is dependent upon the efforts of our
employees and, consequently, our maintenance of good
relationships with our employees. Due to union activities or
other employee actions, we could experience labor disputes, work
stoppages or other disruptions in production that could
adversely affect us. At December 31, 2010 union represented
employees constituted approximately 48% of our worldwide work
force. There can be no assurance that any future disputes will
be resolved without disruptions to operations.
We rely on contractors to conduct a significant portion of
our operations and construction projects.
A significant portion of our operations and construction
projects are currently conducted in whole or in part by
contractors. As a result, our operations are subject to a number
of risks, some of which are outside our control, including:
|
|
|
|
|
negotiating agreements with contractors on acceptable terms;
|
|
|
|
the inability to replace a contractor and its operating
equipment in the event that either party terminates the
agreement;
|
|
|
|
reduced control over those aspects of operations which are the
responsibility of the contractor;
|
21
|
|
|
|
|
failure of a contractor to perform under its agreement;
|
|
|
|
interruption of operations or increased costs in the event that
a contractor ceases its business due to insolvency or other
unforeseen events;
|
|
|
|
failure of a contractor to comply with applicable legal and
regulatory requirements, to the extent it is responsible for
such compliance; and
|
|
|
|
problems of a contractor with managing its workforce, labor
unrest or other employment issues.
|
In addition, we may incur liability to third parties as a result
of the actions of our contractors. The occurrence of one or more
of these risks could adversely affect our results of operations
and financial position.
We are subject
to litigation and may be subject to additional litigation in the
future.
We are currently, or may in the future become, subject to
litigation, arbitration or other legal proceedings with other
parties. If decided adversely to Newmont, these legal
proceedings, or others that could be brought against us in the
future, could have a material adverse effect on our financial
position or prospects. For a more detailed discussion of pending
litigation, see Note 31 to the Consolidated Financial
Statements.
In the event of a dispute arising at our foreign operations, we
may be subject to the exclusive jurisdiction of foreign courts
or arbitral panels, or may not be successful in subjecting
foreign persons to the jurisdiction of courts or arbitral panels
in the United States. Our inability to enforce our rights and
the enforcement of rights on a prejudicial basis by foreign
courts or arbitral panels could have an adverse effect on our
results of operations and financial position.
Title to some
of our properties may be defective or challenged.
Although we have conducted title reviews of our properties,
title review does not necessarily preclude third parties from
challenging our title or related property rights. While we
believe that we have satisfactory title to our properties, some
titles may be defective or subject to challenge. In addition,
certain of our Australian properties could be subject to native
title or traditional landowner claims, and our ability to use
these properties is dependent on agreements with traditional
owners of the properties. For information regarding native title
or traditional landowner claims, see the discussion under the
Australia/New Zealand section of Item 2, Properties, below.
Competition
from other natural resource companies may harm our
business.
We compete with other natural resource companies to attract and
retain key executives, skilled labor, contractors and other
employees. We also compete with other natural resource companies
for specialized equipment, components and supplies, such as
drill rigs, necessary for exploration and development, as well
as for rights to mine properties containing gold, copper and
other minerals. We may be unable to continue to attract and
retain skilled and experienced employees, to obtain the services
of skilled personnel and contractors or specialized equipment or
supplies, or to acquire additional rights to mine properties.
Our ability to
recognize the benefits of deferred tax assets is dependent on
future cash flows and taxable income.
We recognize the expected future tax benefit from deferred tax
assets when the tax benefit is considered to be more likely than
not of being realized, otherwise, a valuation allowance is
applied against deferred tax assets. Assessing the
recoverability of deferred tax assets requires management to
make significant estimates related to expectations of future
taxable income. Estimates of future taxable income are based on
forecasted cash flows from operations and the application of
existing tax laws in each jurisdiction. To the extent that
future cash flows and taxable income differ significantly from
estimates, our ability to realize the deferred tax assets could
be impacted. Additionally, future changes in tax laws could
limit our ability to obtain the future tax benefits represented
by our deferred tax assets. At December 31, 2010 the
Companys current and long-term deferred tax assets were
$177 and $1,437, respectively.
22
Returns for
investments in pension plans are uncertain.
We maintain pension plans for certain employees which provide
for specified payments after retirement. The ability of the
pension plans to provide the specified benefits depends on our
funding of the plans and returns on investments made by the
plans. Returns, if any, on investments are subject to
fluctuations based on investment choices and market conditions.
A sustained period of low returns or losses on investments could
require us to fund the pension plans to a greater extent than
anticipated. During the second half of 2008 and early 2009,
market conditions caused the value of the investments in our
pension plans to decrease significantly. As a result, we
contributed $161 and $55 to the pension plans in 2010 and 2009,
respectively. If future plan investment returns are not
sufficient, we may be required to increase the amount of future
cash contributions. For a more detailed discussion of the
funding status and expected benefit payments to plan
participants, see the discussion in Employee Related Benefits,
Note 8 to the Consolidated Financial Statements.
|
|
ITEM 2.
|
PROPERTIES
(dollars in millions except per share, per ounce and per pound
amounts)
|
Production and
Development Properties
Newmonts significant production and development properties
are described below. Operating statistics for each operation are
presented in a table in the next section of Item 2.
North
America
Nevada, USA. We have been mining gold in
Nevada since 1965. Nevada operations include Carlin, located
west of the city of Elko on the geologic feature known as the
Carlin Trend, the Phoenix mine, located 10 miles south of
Battle Mountain, the Twin Creeks mine, located approximately
15 miles north of Golconda, and the Midas mine near the
town of the same name. We also participate in the Turquoise
Ridge joint venture with a subsidiary of Barrick Gold
Corporation (Barrick), which utilizes mill capacity
at Twin Creeks.
23
Gold production from Nevada was approximately 1.7 million
ounces for 2010 with ore mined from eight open pit and six
underground mines. At December 31, 2010, we reported
31.2 million ounces of gold reserves in Nevada, with 81% of
those ounces in open pit mines and 19% in underground mines. We
are pursuing several development opportunities in Nevada with
significant reserve expansion potential.
The Nevada operations produce gold from a variety of ore types
requiring different processing techniques depending on economic
and metallurgical characteristics. To ensure the best use of
processing capacity, we use a linear programming model to guide
the flow of both mining sequence selection and routing of ore
streams to various plants. Refractory ores, which require more
complex, higher cost processing methods, generated 79% of
Nevadas gold production in 2010, compared with 77% in
2009, and 72% in 2008. With respect to remaining reserves, we
estimate that approximately 85% are refractory ores and 15% are
oxide ores. Higher-grade oxide ores are processed by
conventional milling and cyanide leaching at Carlin (Mill
5) and Twin Creeks (Juniper). Lower-grade material with
suitable cyanide solubility is treated on heap leach pads at
Carlin and Twin Creeks. Higher-grade refractory ores are
processed through either a roaster at Carlin (Mill 6) or
autoclaves at Twin Creeks (Sage). Lower-grade refractory ores
are processed at Carlin by either bio-oxidation/flotation or
direct flotation at Mill 5. Mill 5 flotation concentrates are
then processed at the Carlin roaster or the Twin Creeks
autoclaves and additional gold is recovered from the flotation
tails by cyanide leaching. The Phoenix mill produces a gravity
gold concentrate and a copper/gold flotation concentrate and
recovers additional gold from cyanide leaching of the flotation
tails. Ore from the Midas mine is processed by conventional
milling and Merrill-Crowe zinc precipitation. Activated carbon
from the various leaching circuits is treated to produce gold
ore at the Carlin or Twin Creeks refineries. Zinc precipitate at
Midas is refined
on-site.
We own, or control through long-term mining leases and
unpatented mining claims, all of the minerals and surface area
within the boundaries of the present Nevada mining operations
(except for the Turquoise Ridge joint venture described below).
The long-term leases extend for at least the anticipated mine
life of those deposits. With respect to a significant portion of
the Gold Quarry mine at Carlin, we own a 10% undivided interest
in the mineral rights and lease the remaining 90%, on which we
pay a royalty equivalent to 18% of the mineral production. We
wholly-own or control the remainder of the Gold Quarry mineral
rights, in some cases subject to additional royalties. With
respect to certain smaller deposits in Nevada, we are obligated
to pay royalties on production to third parties that vary from
1% to 8% of production.
In Nevada, mining taxes are assessed on up to 5% of net proceeds
of a mine. Net proceeds are calculated as the excess of gross
yield over direct costs. Gross yield is determined as the value
received when minerals are sold, exchanged for anything of value
or removed from the state. Direct costs generally include the
costs to develop, extract, produce, transport, refine and market
minerals.
We have a 25% interest in a joint venture with Barrick in the
Turquoise Ridge mine. Newmont has an agreement to provide up to
2,000 tons per day of milling capacity at Twin Creeks to the
joint venture. Barrick is the operator of the joint venture.
Gold production of 38,000 ounces in 2010, 39,000 ounces in 2009
and 45,000 ounces in 2008 were attributable to Newmont, based on
our 25% ownership interest.
We have an ore sale agreement with Yukon-Nevada Gold Corporation
(Yukon-Nevada) to process the Companys ore. We
recognized attributable gold sales, net of treatment charges, of
15,000 ounces in 2010, 700 ounces in 2009 and 8,000 ounces in
2008, pursuant to this agreement. During 2008, Yukon-Nevada
discontinued operations; however, during the second half of
2009, they resumed operations on a limited basis.
Mexico. We have a 44% interest in
La Herradura, which is located in Mexicos Sonora
desert. La Herradura is operated by Fresnillo PLC (which
owns the remaining 56% interest) and comprises open pit
operations with
run-of-mine
heap leach processing. La Herradura produced 174,000
attributable ounces of gold in 2010 and at December 31,
2010 we reported 2.3 million ounces of gold reserves.
Hope Bay, Canada. We own 100% of the Hope Bay
project, a large undeveloped gold project in the Nunavut
Territory of Canada. Hope Bay is an 80 kilometer district in the
Canadian arctic and is one of the last known undeveloped
greenstone belts in the world. The exploration success over the
last few
24
years continues to confirm the districts significant
long-term potential. In 2010, we commenced an underground
decline at the Doris North deposit and expect the Doris phase 1
project to provide access for test stoping and development
drilling, progressing to a construction decision by the end of
2011.
South
America
The properties of Minera Yanacocha S.R.L. (MYSRL)
include the mining operations at Yanacocha and the Conga
project. We hold a 51.35% interest in MYSRL with the remaining
interests held by Compañia de Minas Buenaventura, S.A.A.
(Buenaventura) (43.65%) and the International
Finance Corporation (5%).
MYSRL has mining rights with respect to a large land position
consisting of concessions granted by the Peruvian government to
MYSRL and a related entity. These mining concessions provide for
both the right to explore and exploit. However, MYSRL must first
obtain the respective exploration and exploitation permits,
which are generally granted in due course. MYSRL may retain
mining concessions indefinitely by paying annual fees and,
during exploitation, complying with production obligations or
paying assessed fines. Mining concessions are freely assignable
or transferable. MYSRL, along with other mining companies in
Peru, agreed with the central government in December 2006 to
contribute 3.75% of its net profits to fund social development
projects for a period of five years.
Yanacocha, Peru. Yanacocha is located
approximately 375 miles (604 kilometers) north of Lima and
30 miles (48 kilometers) north of the city of Cajamarca, in
Peru. Yanacocha began production in 1993 and currently has three
active open pit mines, Cerro Yanacocha, La Quinua and
Chaquicocha. Reclamation
and/or
backfilling activities at Carachugo, San José and
Maqui Maqui are currently underway. Yanacocha has four leach
pads, three processing facilities, and one mill, which began
commercial production in the second quarter of 2008.
Yanacochas gold production for 2010 was 1.5 million
ounces (750,000 attributable ounces) and at December 31,
2010 we reported 5.0 million ounces of gold reserves.
Conga, Peru. The Conga project is located
within close proximity of existing operations at Yanacocha.
Feasibility studies on our preferred development option were
completed in late 2009 and we continue to progress into the
development stage with an emphasis on project engineering and
obtaining all required permits. In 2010, we selected and
mobilized the project engineering procurement and construction
contractor. In October 2010, the projects Environmental
Impact Assessment was approved by the Peruvian authorities. A
construction decision is expected in the first half of 2011. If
all permits are secured, the commencement of production is
expected in late 2014 or early 2015. At December 31, 2010
we reported 6.1 million ounces of gold reserves and
1,660 million pounds of copper reserves at Conga.
La Zanja, Peru. Newmont holds a 46.94%
interest in La Zanja, a gold project near the city of
Cajamarca, Peru. The remaining interests are held by
Buenaventura. The mine commenced operations in September 2010
and is operated by Buenaventura. The site will consist of two
small open pits and one oxide leach pad. La Zanja produced
21,000 attributable gold ounces in 2010 and at December 31,
2010 we reported 0.3 million ounces of gold reserves.
Asia
Pacific
Australia/New Zealand. In Australia, mineral
exploration and mining titles are granted by the individual
states or territories. Mineral titles may also be subject to
native title legislation or, in the Northern Territory, to
Aboriginal freehold title legislation that entitles indigenous
persons to compensation calculated by reference to the gross
value of production. In 1992, the High Court of Australia held
that Aboriginal people who have maintained a continuing
connection with their land according to their traditions and
customs may hold certain rights in respect of the land (such
rights commonly referred to as native title). Since
the High Courts decision, Australia has passed legislation
providing for the protection of native title and established
procedures for Aboriginal people to claim these rights. The fact
that native title is claimed with respect to an area, however,
does not necessarily mean that native title exists, and disputes
may be resolved by the courts.
25
Generally, under native title legislation, all mining titles
granted before January 1, 1994 are valid. Titles granted
between January 1, 1994 and December 23, 1996,
however, may be subject to invalidation if they were not
obtained in compliance with applicable legislative procedures,
though subsequent legislation has validated some of these
titles. After December 23, 1996, mining titles over areas
where native title is claimed to exist became subject to
legislative processes that generally give native title claimants
the right to negotiate with the title applicant for
compensation and other conditions. Native title holders do not
have a veto over the granting of mining titles, but if agreement
cannot be reached, the matter can be referred to the National
Native Title Tribunal for decision.
Native title claims are not expected to have a material adverse
effect on any of our operations in Australia. The High Court of
Australia determined in an August 2002 decision, which refined
and narrowed the scope of native title, that native title does
not subsist in minerals in Western Australia and that the rights
granted under a mining title would, to the extent inconsistent
with asserted native title rights, operate to extinguish those
native title rights. Generally, native title is only an issue
for Newmont with respect to obtaining new mineral titles or
moving from one form of title to another, for example, from an
exploration title to a mining title. In these cases, the
requirements for negotiation and the possibility of paying
compensation may result in delay and increased costs for mining
in the affected areas. Similarly, the process of conducting
Aboriginal heritage surveys to identify and locate areas or
sites of Aboriginal cultural significance can result in
additional costs and delay in gaining access to land for
exploration and mining-related activities.
In Australia, various ad valorem royalties and taxes are paid to
state and territorial governments, typically based on a
percentage of gross revenues or earnings. Indigenous communities
have negotiated royalty payments as a condition to granting
access to areas where they have native title or other property
rights.
Boddington. Boddington (100% owned) is located
81 miles (130 kilometers) southeast of Perth in Western
Australia. Boddington has been wholly owned since June 2009 when
Newmont acquired the final 33.33% interest from AngloGold
Ashanti Australia Limited (AngloGold). Boddington
poured its first gold in September 2009 and commenced commercial
production in November 2009. Boddington produced 728,000 ounces
of gold and 58 million pounds of copper in 2010 and at
December 31, 2010 we reported 20.3 million ounces of
gold reserves and 2,360 million pounds of copper reserves.
Kalgoorlie. Kalgoorlie (50% owned) comprises
the Fimiston open pit (commonly referred to as the Super Pit)
and Mt. Charlotte underground mine at Kalgoorlie-Boulder,
373 miles (600 kilometers) east of Perth in Western
Australia. The mines are managed by Kalgoorlie Consolidated Gold
Mines Pty Ltd for the joint venture owners, Newmont and Barrick.
The Super Pit is one of Australias largest gold mines in
terms of gold production and annual mining volume. During 2010,
the Kalgoorlie operations produced 754,000 ounces of gold
(377,000 attributable ounces) and at December 31, 2010 we
reported 3.8 million ounces of gold reserves.
Jundee. Jundee (100% owned) is situated
approximately 435 miles (700 kilometers) northeast of Perth
in Western Australia. We mined ore at Jundee solely from
underground sources in 2010, with mill feed supplemented from
oxide stockpiles for blending purposes. Jundee produced 335,000
ounces of gold in 2010 and at December 31, 2010 we reported
0.8 million ounces of gold reserves.
Tanami. Tanami (100% owned) includes the
Granites treatment plant and associated mining operations, which
are located in the Northern Territory approximately
342 miles (550 kilometers) northwest of Alice Springs,
adjacent to the Tanami highway, and the Dead Bullock Soak mining
operations, approximately 25 miles (40 kilometers) west of
the Granites. Operations are predominantly focused on the Callie
underground mine at Dead Bullock Soak and ore is processed
through the Granites treatment plant. During 2010, the Tanami
operations produced 250,000 ounces of gold and at
December 31, 2010 we reported 2.0 million ounces of
gold reserves.
26
Waihi. Waihi (100% owned) is located within
the town of Waihi, approximately 68 miles (110 kilometers)
southeast of Auckland, New Zealand and currently consists of the
Favona underground deposit and the Martha open pit. The Waihi
operation produced 108,000 ounces of gold in 2010 and at
December 31, 2010 we reported 0.5 million ounces of
gold reserves.
Duketon. We have a 16.22% interest in Regis
Resources Ltd. (Regis), a mineral company with
significant gold and nickel exploration properties in Eastern
Goldfields of Western Australia. Regis owns 100% of the Duketon
gold project, which is located approximately 200 miles
northeast of Kalgoorlie. Duketon commenced production in the
third quarter of 2010 and produced 5,000 attributable ounces of
gold in 2010. At December 31, 2010, we reported
0.3 million ounces of gold reserves.
Batu Hijau, Indonesia. Batu Hijau is located
on the island of Sumbawa, approximately 950 miles (1,529
kilometers) east of Jakarta. Batu Hijau is a large porphyry
copper/gold deposit, which Newmont discovered in 1990.
Development and construction activities began in 1997 and
start-up
occurred in late 1999. In 2010, Batu Hijau produced
542 million pounds of copper (269 million attributable
pounds) and 737,000 ounces of gold (364,000 attributable
ounces). At December 31, 2010 we reported
3,760 million pounds of copper reserves and
3.7 million ounces of gold reserves at Batu Hijau.
We own 31.50% of the Batu Hijau mine through the Nusa Tenggara
Partnership (NTP) with an affiliate of Sumitomo
Corporation of Japan. We have a 56.25% interest in NTP and the
Sumitomo affiliate holds the remaining 43.75%. NTP in turn owns
56% of PT Newmont Nusa Tenggara (PTNNT), the
Indonesian subsidiary that owns Batu Hijau. Newmont entered into
transactions with P.T. Pukuafu Indah (PTPI) and
PT Indonesia Masbaga Investama (PTIMI), unrelated
noncontrolling partners of PTNNT, whereby we agreed to advance
certain funds in exchange for a pledge of the shares as
security, an assignment of the noncontrolling partners
combined 20% share of PTNNT dividends, net of withholding tax,
and certain voting rights and obligations to the Company. As a
result, PTPI and PTIMI were determined to be Variable Interest
Entities (VIEs) as they have minimal attributable
capital and certain voting rights and obligations to their 20%
interest in PTNNT reside with Newmont. As a result, our
effective economic interest in PTNNT increased by 17% to 48.50%
at December 31, 2010. The remaining 24% interest in PTNNT
is owned by PT Multi Daerah Bersaing (PTMDB). We are
currently the operator of Batu Hijau.
In Indonesia, rights are granted to foreign investors to explore
for and to develop mineral resources within defined areas
through Contracts of Work entered into with the Indonesian
government. In 1986, PTNNT entered into a Contract of Work with
the Indonesian government covering Batu Hijau, under which PTNNT
was granted the exclusive right to explore in the contract area,
construct any required facilities, extract and process the
mineralized materials, and sell and export the minerals
produced, subject to certain requirements including Indonesian
government approvals and payment of royalties to the government.
Under the Contract of Work, PTNNT has the right to continue
operating the project for 30 years from operational
start-up, or
longer if approved by the Indonesian government.
Under the Contract of Work 51% of PTNNTs shares must have
been offered for sale, first, to the Indonesian government or,
second, to Indonesian nationals by March 31, 2010. Pursuant
to this provision, the ownership interest in the Batu Hijau
mines proven and probable reserves may be reduced in the
future to as low as 27.56% and ownership interest of NTP in
PTNNT could be reduced to 49%, thus reducing our ability to
control the operation at Batu Hijau. Furthermore, as part of the
negotiation of the sale agreements with PTMDB, the parties
executed an operating agreement under which each party
recognizes the right of NTP to operate Batu Hijau and binds the
parties to adhere to NTPs standards for safety,
environmental stewardship and community responsibility. The
operating agreement remains in effect for so long as NTP owns
more shares of PTNNT than PTMDB. If the operating agreement
terminates, then we will likely lose effective control over the
operations of Batu Hijau and will be at risk for operations
conducted in a manner that could potentially reduce the value of
PTNNT or result in safety, environmental or social standards
below those adhered to by NTP. Such loss of control may cause us
to deconsolidate PTNNT for accounting purposes, which would
reduce
27
our reported consolidated sales, cost applicable to sales,
amortization, total assets and operating cash flow attributable
to PTNNT. See Note 31 to the Consolidated Financial
Statements.
Africa
Ahafo, Ghana. Ahafo (100% owned) is located in
the Brong-Ahafo Region of Ghana, approximately 180 miles
(290 kilometers) northwest of Accra. We currently operate four
open pits at Ahafo with reserves contained in 11 pits.
Commercial production in the fourth pit, Amoma, began in October
2010. The process plant consists of a conventional mill and
carbon-in-leach
circuit. Ahafo produced 545,000 ounces of gold in 2010 and at
December 31, 2010 we reported 10.0 million ounces of
gold reserves.
In December 2003, Ghanas Parliament unanimously ratified
an Investment Agreement between Newmont and the Government of
Ghana. The Agreement establishes a fixed fiscal and legal
regime, including fixed royalty and tax rates, for the life of
any Newmont project in Ghana. Under the Agreement, we will pay
corporate income tax at the Ghana statutory tax rate (presently
25% but not to exceed 32.5%) and fixed gross royalties on gold
production of 3.0% (3.6% for any production from forest reserve
areas). The Government of Ghana is also entitled to receive 10%
of a projects net cash flow after we have recouped our
investment and may acquire up to 20% of a projects equity
at fair market value on or after the 15th anniversary of such
projects commencement of production. The Investment
Agreement also contains commitments with respect to job training
for local Ghanaians, community development, purchasing of local
goods and services and environmental protection. In 2009, the
Minister of Finance implemented the National Fiscal
Stabilization levy, which is an additional tax of profits.
Negotiations are ongoing with the commissioner of the Ghana
Internal Revenue Service on the applicability of the levy, given
Newmonts Investment Agreement. While negotiations are
pending, we have paid and included $14 in Income and mining
tax expense to date under the levy.
Akyem, Ghana. Akyem (100% owned) is located
approximately 80 miles (125 kilometers) northwest of Accra.
In January 2010, we received the mining lease for Akyem. We
continue to progress into the development stage with an emphasis
on project engineering and obtaining all required land access
and permits. In 2010, we selected and mobilized the project
engineering procurement and construction contractor and we are
advancing the project towards a construction decision in the
first half of 2011. If all permits are secured, we expect this
project to commence production in late 2013 or early 2014. At
December 31, 2010, we reported 7.2 million ounces of
gold reserves.
28
Operating
Statistics
The following tables detail operating statistics related to gold
production, sales and production costs per ounce:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
South America
|
|
Year Ended December 31,
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Tons mined (000 dry short tons):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open pit
|
|
|
233,359
|
|
|
|
239,102
|
|
|
|
222,222
|
|
|
|
199,467
|
|
|
|
197,559
|
|
|
|
211,525
|
|
Underground
|
|
|
2,452
|
|
|
|
2,740
|
|
|
|
2,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons processed (000 dry short tons):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill
|
|
|
23,497
|
|
|
|
24,702
|
|
|
|
24,755
|
|
|
|
6,832
|
|
|
|
6,242
|
|
|
|
4,196
|
|
Leach
|
|
|
17,240
|
|
|
|
19,697
|
|
|
|
26,210
|
|
|
|
58,691
|
|
|
|
136,293
|
|
|
|
97,823
|
|
Average ore grade (oz/ton):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill
|
|
|
0.085
|
|
|
|
0.085
|
|
|
|
0.093
|
|
|
|
0.081
|
|
|
|
0.118
|
|
|
|
0.082
|
|
Leach
|
|
|
0.019
|
|
|
|
0.022
|
|
|
|
0.025
|
|
|
|
0.019
|
|
|
|
0.018
|
|
|
|
0.018
|
|
Average mill recovery rate
|
|
|
78.9
|
%
|
|
|
81.8
|
%
|
|
|
81.8
|
%
|
|
|
82.5
|
%
|
|
|
86.4
|
%
|
|
|
88.2
|
%
|
Ounces produced (000):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill
|
|
|
1,540
|
|
|
|
1,700
|
|
|
|
1,878
|
|
|
|
421
|
|
|
|
630
|
|
|
|
304
|
|
Leach
|
|
|
366
|
|
|
|
398
|
|
|
|
476
|
|
|
|
1,038
|
|
|
|
1,428
|
|
|
|
1,505
|
|
Development(1)
|
|
|
3
|
|
|
|
1
|
|
|
|
1
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
1,909
|
|
|
|
2,099
|
|
|
|
2,355
|
|
|
|
1,462
|
|
|
|
2,058
|
|
|
|
1,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Newmont
|
|
|
1,909
|
|
|
|
2,099
|
|
|
|
2,355
|
|
|
|
771
|
|
|
|
1,057
|
|
|
|
929
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated ounces sold (000)
|
|
|
1,898
|
|
|
|
2,117
|
|
|
|
2,319
|
|
|
|
1,463
|
|
|
|
2,068
|
|
|
|
1,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs per ounce sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct mining and production costs
|
|
$
|
601
|
|
|
$
|
535
|
|
|
$
|
461
|
|
|
$
|
444
|
|
|
$
|
318
|
|
|
$
|
354
|
|
By-product credits
|
|
|
(72
|
)
|
|
|
(55
|
)
|
|
|
(38
|
)
|
|
|
(50
|
)
|
|
|
(31
|
)
|
|
|
(27
|
)
|
Royalties and production taxes
|
|
|
15
|
|
|
|
15
|
|
|
|
16
|
|
|
|
32
|
|
|
|
18
|
|
|
|
16
|
|
Other
|
|
|
7
|
|
|
|
6
|
|
|
|
6
|
|
|
|
5
|
|
|
|
5
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales
|
|
|
551
|
|
|
|
501
|
|
|
|
445
|
|
|
|
431
|
|
|
|
310
|
|
|
|
346
|
|
Amortization
|
|
|
153
|
|
|
|
128
|
|
|
|
110
|
|
|
|
111
|
|
|
|
81
|
|
|
|
92
|
|
Reclamation and remediation
|
|
|
4
|
|
|
|
3
|
|
|
|
3
|
|
|
|
10
|
|
|
|
6
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total production costs
|
|
$
|
708
|
|
|
$
|
632
|
|
|
$
|
558
|
|
|
$
|
552
|
|
|
$
|
397
|
|
|
$
|
443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
Africa
|
|
Year Ended December 31,
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Tons mined (000 dry short tons):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Open pit
|
|
|
238,725
|
|
|
|
204,814
|
|
|
|
244,220
|
|
|
|
51,054
|
|
|
|
51,971
|
|
|
|
50,567
|
|
Underground
|
|
|
3,564
|
|
|
|
3,778
|
|
|
|
3,896
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tons milled (000 dry short tons)
|
|
|
89,293
|
|
|
|
58,853
|
|
|
|
50,074
|
|
|
|
8,372
|
|
|
|
8,335
|
|
|
|
8,262
|
|
Average ore grade (oz/ton)
|
|
|
0.033
|
|
|
|
0.034
|
|
|
|
0.033
|
|
|
|
0.077
|
|
|
|
0.074
|
|
|
|
0.075
|
|
Average mill recovery rate
|
|
|
86.3
|
%
|
|
|
88.3
|
%
|
|
|
88.0
|
%
|
|
|
86.1
|
%
|
|
|
87.2
|
%
|
|
|
89.7
|
%
|
Ounces produced (000):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill
|
|
|
2,535
|
|
|
|
1,776
|
|
|
|
1,464
|
|
|
|
529
|
|
|
|
532
|
|
|
|
506
|
|
Development(1)
|
|
|
|
|
|
|
56
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
2,535
|
|
|
|
1,832
|
|
|
|
1,464
|
|
|
|
545
|
|
|
|
532
|
|
|
|
525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Newmont
|
|
|
2,167
|
|
|
|
1,517
|
|
|
|
1,316
|
|
|
|
545
|
|
|
|
532
|
|
|
|
525
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated ounces sold (000)
|
|
|
2,407
|
|
|
|
1,803
|
|
|
|
1,486
|
|
|
|
528
|
|
|
|
546
|
|
|
|
503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs per ounce sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct mining and production costs
|
|
$
|
457
|
|
|
$
|
395
|
|
|
$
|
502
|
|
|
$
|
411
|
|
|
$
|
414
|
|
|
$
|
380
|
|
By-product credits
|
|
|
(14
|
)
|
|
|
(10
|
)
|
|
|
(9
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Royalties and production taxes
|
|
|
28
|
|
|
|
24
|
|
|
|
20
|
|
|
|
38
|
|
|
|
29
|
|
|
|
27
|
|
Other
|
|
|
3
|
|
|
|
1
|
|
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales
|
|
|
474
|
|
|
|
410
|
|
|
|
515
|
|
|
|
450
|
|
|
|
444
|
|
|
|
408
|
|
Amortization
|
|
|
109
|
|
|
|
100
|
|
|
|
99
|
|
|
|
150
|
|
|
|
125
|
|
|
|
126
|
|
Reclamation and remediation
|
|
|
5
|
|
|
|
4
|
|
|
|
5
|
|
|
|
4
|
|
|
|
4
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total production costs
|
|
$
|
588
|
|
|
$
|
514
|
|
|
$
|
619
|
|
|
$
|
604
|
|
|
$
|
573
|
|
|
$
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gold
|
|
Year Ended December 31,
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Ounces produced (000):
|
|
|
|
|
|
|
|
|
|
|
|
|
Mill
|
|
|
5,025
|
|
|
|
4,638
|
|
|
|
4,152
|
|
Leach
|
|
|
1,404
|
|
|
|
1,826
|
|
|
|
1,981
|
|
Development(1)
|
|
|
22
|
|
|
|
57
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
6,451
|
|
|
|
6,521
|
|
|
|
6,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to
Newmont(2)
|
|
|
5,392
|
|
|
|
5,237
|
|
|
|
5,201
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated ounces sold (000)
|
|
|
6,296
|
|
|
|
6,534
|
|
|
|
6,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs per ounce sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct mining and production costs
|
|
$
|
493
|
|
|
$
|
418
|
|
|
$
|
432
|
|
By-product credits
|
|
|
(39
|
)
|
|
|
(30
|
)
|
|
|
(25
|
)
|
Royalties and production taxes
|
|
|
26
|
|
|
|
20
|
|
|
|
18
|
|
Other
|
|
|
5
|
|
|
|
3
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales
|
|
|
485
|
|
|
|
411
|
|
|
|
429
|
|
Amortization
|
|
|
126
|
|
|
|
105
|
|
|
|
103
|
|
Reclamation and remediation
|
|
|
6
|
|
|
|
4
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total production costs
|
|
$
|
617
|
|
|
$
|
520
|
|
|
$
|
536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Ounces from the removal and production of de minimis saleable
materials during development. Sales from development are
recorded in Other income, net of incremental mining and
processing costs. |
|
(2) |
|
Includes 32 and 76 thousand ounces from discontinued operations
at Kori Kollo, Bolivia in 2009 and 2008, respectively. |
30
The following table details operating statistics related to
copper production, sales and production costs per pound.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
Year Ended December 31,
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Tons milled (000 dry short tons)
|
|
|
77,155
|
|
|
|
47,087
|
|
|
|
37,818
|
|
Average grade
|
|
|
0.46
|
%
|
|
|
0.60
|
%
|
|
|
0.47
|
%
|
Average recovery rate
|
|
|
85.1
|
%
|
|
|
89.2
|
%
|
|
|
80.6
|
%
|
Consolidated pounds produced (millions)
|
|
|
600
|
|
|
|
504
|
|
|
|
285
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to Newmont
|
|
|
327
|
|
|
|
227
|
|
|
|
128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated pounds sold (millions)
|
|
|
539
|
|
|
|
507
|
|
|
|
290
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production costs per pound sold:
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales
|
|
$
|
0.80
|
|
|
$
|
0.64
|
|
|
$
|
1.38
|
|
Amortization
|
|
|
0.21
|
|
|
|
0.16
|
|
|
|
0.28
|
|
Reclamation and remediation
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total production costs
|
|
$
|
1.02
|
|
|
$
|
0.81
|
|
|
$
|
1.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proven and
Probable Reserves
We had proven and probable gold reserves of 93.5 million
ounces at December 31, 2010, calculated at a gold price
assumption of $950, A$1,100 or NZ$1,350 per ounce, respectively.
Our 2010 reserves would decline by approximately 5%
(4.9 million ounces), if calculated at a $900 per ounce
gold price. An increase in the gold price to $1,000 per ounce
would increase reserves by approximately 3% (3.1 million
ounces), all other assumptions remaining constant. For 2009,
reserves were calculated at a gold price assumption of $800,
A$1,000 or NZ$1,200 per ounce, respectively.
At December 31, 2010, our proven and probable gold reserves
in North America were 33.5 million ounces. Outside of North
America, year-end proven and probable gold reserves were
60.0 million ounces, including 31.4 million ounces in
Asia Pacific, 17.2 million ounces in Africa and
11.4 million ounces in South America.
Our proven and probable copper reserves at December 31,
2010 were 9,420 million pounds. For 2010, reserves were
calculated at a copper price assumption of $2.50 or A$2.95 per
pound, increased from $2.00 or A$2.40 per pound, used in 2009.
Under our current mining plans, all of our reserves are located
on fee property or mining claims or will be depleted during the
terms of existing mining licenses or concessions, or where
applicable, any assured renewal or extension periods for such
licenses or concessions.
Proven and probable reserves are based on extensive drilling,
sampling, mine modeling and metallurgical testing from which we
determined economic feasibility. The price sensitivity of
reserves depends upon several factors including grade,
metallurgical recovery, operating cost,
waste-to-ore
ratio and ore type. Metallurgical recovery rates vary depending
on the metallurgical properties of each deposit and the
production process used. The reserve tables below list the
average metallurgical recovery rate for each deposit, which
takes into account the several different processing methods that
we use. The cut-off grade, or lowest grade of mineralized
material considered economic to process, varies with material
type, metallurgical recoveries, operating costs and co- or
by-product credits.
The proven and probable reserve figures presented herein are
estimates based on information available at the time of
calculation. No assurance can be given that the indicated levels
of recovery of gold and copper will be realized. Ounces of gold
or pounds of copper included in the proven and probable reserves
are calculated without regard to any losses during metallurgical
treatment. Reserve estimates may require revision based on
actual production. Market fluctuations in the price of gold
31
and copper, as well as increased production costs or reduced
metallurgical recovery rates, could render certain proven and
probable reserves containing relatively lower grades of
mineralization uneconomic to exploit and might result in a
reduction of reserves.
We publish reserves annually, and will recalculate reserves at
December 31, 2011, taking into account metal prices,
changes, if any, in future production and capital costs,
divestments and depletion as well as any acquisitions and
additions during 2011.
The following tables detail gold proven and probable reserves
reflecting only those reserves attributable to Newmonts
ownership or economic interest at December 31, 2010 and
2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2010(1)
|
|
|
|
|
|
|
Proven Reserves
|
|
|
Probable Reserves
|
|
|
Proven and Probable Reserves
|
|
|
|
|
|
|
Newmont
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
Metallurgical
|
|
Deposits/Districts
|
|
Share
|
|
|
Tonnage(2)
|
|
|
(oz/ton)
|
|
|
Ounces(3)
|
|
|
Tonnage(2)
|
|
|
(oz/ton)
|
|
|
Ounces(3)
|
|
|
Tonnage(2)
|
|
|
(oz/ton)
|
|
|
Ounces(3)
|
|
|
Recovery(3)
|
|
|
|
|
|
|
(000)
|
|
|
|
|
|
(000)
|
|
|
(000)
|
|
|
|
|
|
(000)
|
|
|
(000)
|
|
|
|
|
|
(000)
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlin Open Pits,
Nevada(4)
|
|
|
100
|
%
|
|
|
36,600
|
|
|
|
0.064
|
|
|
|
2,340
|
|
|
|
226,900
|
|
|
|
0.040
|
|
|
|
8,980
|
|
|
|
263,500
|
|
|
|
0.043
|
|
|
|
11,320
|
|
|
|
75
|
%
|
Carlin Underground, Nevada
|
|
|
100
|
%
|
|
|
5,800
|
|
|
|
0.272
|
|
|
|
1,570
|
|
|
|
8,800
|
|
|
|
0.330
|
|
|
|
2,910
|
|
|
|
14,600
|
|
|
|
0.307
|
|
|
|
4,480
|
|
|
|
88
|
%
|
Midas,
Nevada(5)
|
|
|
100
|
%
|
|
|
200
|
|
|
|
0.394
|
|
|
|
100
|
|
|
|
300
|
|
|
|
0.264
|
|
|
|
90
|
|
|
|
500
|
|
|
|
0.319
|
|
|
|
190
|
|
|
|
95
|
%
|
Phoenix,
Nevada(6)(7)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
329,800
|
|
|
|
0.018
|
|
|
|
6,090
|
|
|
|
329,800
|
|
|
|
0.018
|
|
|
|
6,090
|
|
|
|
73
|
%
|
Twin Creeks, Nevada
|
|
|
100
|
%
|
|
|
11,400
|
|
|
|
0.097
|
|
|
|
1,110
|
|
|
|
46,400
|
|
|
|
0.071
|
|
|
|
3,280
|
|
|
|
57,800
|
|
|
|
0.076
|
|
|
|
4,390
|
|
|
|
79
|
%
|
Turquoise Ridge,
Nevada(8)
|
|
|
25
|
%
|
|
|
1,400
|
|
|
|
0.458
|
|
|
|
640
|
|
|
|
1,700
|
|
|
|
0.456
|
|
|
|
770
|
|
|
|
3,100
|
|
|
|
0.457
|
|
|
|
1,410
|
|
|
|
92
|
%
|
Nevada
In-Process(9)
|
|
|
100
|
%
|
|
|
28,500
|
|
|
|
0.022
|
|
|
|
610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,500
|
|
|
|
0.022
|
|
|
|
610
|
|
|
|
62
|
%
|
Nevada
Stockpiles(10)
|
|
|
100
|
%
|
|
|
33,900
|
|
|
|
0.077
|
|
|
|
2,630
|
|
|
|
2,800
|
|
|
|
0.028
|
|
|
|
80
|
|
|
|
36,700
|
|
|
|
0.074
|
|
|
|
2,710
|
|
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Nevada(11)
|
|
|
|
|
|
|
117,800
|
|
|
|
0.076
|
|
|
|
9,000
|
|
|
|
616,700
|
|
|
|
0.036
|
|
|
|
22,200
|
|
|
|
734,500
|
|
|
|
0.042
|
|
|
|
31,200
|
|
|
|
78
|
%
|
La Herradura,
Mexico(12)
|
|
|
44
|
%
|
|
|
44,600
|
|
|
|
0.023
|
|
|
|
1,010
|
|
|
|
61,100
|
|
|
|
0.021
|
|
|
|
1,280
|
|
|
|
105,700
|
|
|
|
0.022
|
|
|
|
2,290
|
|
|
|
66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162,400
|
|
|
|
0.062
|
|
|
|
10,010
|
|
|
|
677,800
|
|
|
|
0.035
|
|
|
|
23,480
|
|
|
|
840,200
|
|
|
|
0.040
|
|
|
|
33,490
|
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conga,
Peru(6)(13)
|
|
|
51.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
317,200
|
|
|
|
0.019
|
|
|
|
6,080
|
|
|
|
317,200
|
|
|
|
0.019
|
|
|
|
6,080
|
|
|
|
79
|
%
|
Yanacocha, Peru Open
Pits(14)
|
|
|
51.35
|
%
|
|
|
23,500
|
|
|
|
0.028
|
|
|
|
650
|
|
|
|
118,800
|
|
|
|
0.032
|
|
|
|
3,790
|
|
|
|
142,300
|
|
|
|
0.031
|
|
|
|
4,440
|
|
|
|
70
|
%
|
Yanacocha, Peru
In-Process(9)(14)
|
|
|
51.35
|
%
|
|
|
21,300
|
|
|
|
0.025
|
|
|
|
540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,300
|
|
|
|
0.025
|
|
|
|
540
|
|
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Yanacocha, Peru
|
|
|
51.35
|
%
|
|
|
44,800
|
|
|
|
0.027
|
|
|
|
1,190
|
|
|
|
118,800
|
|
|
|
0.032
|
|
|
|
3,790
|
|
|
|
163,600
|
|
|
|
0.030
|
|
|
|
4,980
|
|
|
|
71
|
%
|
La Zanja,
Peru(15)
|
|
|
46.94
|
%
|
|
|
10,100
|
|
|
|
0.018
|
|
|
|
180
|
|
|
|
10,500
|
|
|
|
0.016
|
|
|
|
160
|
|
|
|
20,600
|
|
|
|
0.017
|
|
|
|
340
|
|
|
|
66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,900
|
|
|
|
0.025
|
|
|
|
1,370
|
|
|
|
446,500
|
|
|
|
0.022
|
|
|
|
10,030
|
|
|
|
501,400
|
|
|
|
0.023
|
|
|
|
11,400
|
|
|
|
75
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau Open
Pit(6)(16)
|
|
|
48.50
|
%
|
|
|
168,800
|
|
|
|
0.014
|
|
|
|
2,420
|
|
|
|
124,600
|
|
|
|
0.006
|
|
|
|
700
|
|
|
|
293,400
|
|
|
|
0.011
|
|
|
|
3,120
|
|
|
|
78
|
%
|
Batu Hijau
Stockpiles(6)(10)(16)
|
|
|
48.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170,700
|
|
|
|
0.004
|
|
|
|
610
|
|
|
|
170,700
|
|
|
|
0.004
|
|
|
|
610
|
|
|
|
69
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau, Indonesia
|
|
|
48.50
|
%
|
|
|
168,800
|
|
|
|
0.014
|
|
|
|
2,420
|
|
|
|
295,300
|
|
|
|
0.004
|
|
|
|
1,310
|
|
|
|
464,100
|
|
|
|
0.008
|
|
|
|
3,730
|
|
|
|
76
|
%
|
Boddington, Western
Australia(6)
|
|
|
100
|
%
|
|
|
181,900
|
|
|
|
0.021
|
|
|
|
3,760
|
|
|
|
885,900
|
|
|
|
0.019
|
|
|
|
16,540
|
|
|
|
1,067,800
|
|
|
|
0.019
|
|
|
|
20,300
|
|
|
|
82
|
%
|
Duketon, Western
Australia(17)
|
|
|
16.22
|
%
|
|
|
1,800
|
|
|
|
0.056
|
|
|
|
100
|
|
|
|
4,500
|
|
|
|
0.055
|
|
|
|
250
|
|
|
|
6,300
|
|
|
|
0.055
|
|
|
|
350
|
|
|
|
94
|
%
|
Jundee, Western
Australia(18)
|
|
|
100
|
%
|
|
|
3,100
|
|
|
|
0.051
|
|
|
|
160
|
|
|
|
1,600
|
|
|
|
0.373
|
|
|
|
600
|
|
|
|
4,700
|
|
|
|
0.160
|
|
|
|
760
|
|
|
|
91
|
%
|
Kalgoorlie Open Pit and Underground
|
|
|
50
|
%
|
|
|
15,000
|
|
|
|
0.061
|
|
|
|
910
|
|
|
|
40,700
|
|
|
|
0.059
|
|
|
|
2,390
|
|
|
|
55,700
|
|
|
|
0.059
|
|
|
|
3,300
|
|
|
|
85
|
%
|
Kalgoorlie
Stockpiles(10)
|
|
|
50
|
%
|
|
|
15,100
|
|
|
|
0.031
|
|
|
|
470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,100
|
|
|
|
0.031
|
|
|
|
470
|
|
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Kalgoorlie, Western
Australia(19)
|
|
|
50
|
%
|
|
|
30,100
|
|
|
|
0.046
|
|
|
|
1,380
|
|
|
|
40,700
|
|
|
|
0.059
|
|
|
|
2,390
|
|
|
|
70,800
|
|
|
|
0.053
|
|
|
|
3,770
|
|
|
|
84
|
%
|
Tanami, Northern
Territories(20)
|
|
|
100
|
%
|
|
|
6,400
|
|
|
|
0.151
|
|
|
|
970
|
|
|
|
7,900
|
|
|
|
0.134
|
|
|
|
1,070
|
|
|
|
14,300
|
|
|
|
0.142
|
|
|
|
2,040
|
|
|
|
95
|
%
|
Waihi, New
Zealand(21)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,200
|
|
|
|
0.110
|
|
|
|
460
|
|
|
|
4,200
|
|
|
|
0.110
|
|
|
|
460
|
|
|
|
89
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
392,100
|
|
|
|
0.022
|
|
|
|
8,790
|
|
|
|
1,240,100
|
|
|
|
0.018
|
|
|
|
22,620
|
|
|
|
1,632,200
|
|
|
|
0.019
|
|
|
|
31,410
|
|
|
|
83
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo Open
Pits(22)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
148,300
|
|
|
|
0.064
|
|
|
|
9,540
|
|
|
|
148,300
|
|
|
|
0.064
|
|
|
|
9,540
|
|
|
|
87
|
%
|
Ahafo
Stockpiles(10)
|
|
|
100
|
%
|
|
|
14,100
|
|
|
|
0.033
|
|
|
|
460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,100
|
|
|
|
0.033
|
|
|
|
460
|
|
|
|
86
|
%
|
Total Ahafo, Ghana
|
|
|
100
|
%
|
|
|
14,100
|
|
|
|
0.033
|
|
|
|
460
|
|
|
|
148,300
|
|
|
|
0.064
|
|
|
|
9,540
|
|
|
|
162,400
|
|
|
|
0.062
|
|
|
|
10,000
|
|
|
|
87
|
%
|
Akyem,
Ghana(23)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137,900
|
|
|
|
0.052
|
|
|
|
7,200
|
|
|
|
137,900
|
|
|
|
0.052
|
|
|
|
7,200
|
|
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,100
|
|
|
|
0.033
|
|
|
|
460
|
|
|
|
286,200
|
|
|
|
0.059
|
|
|
|
16,740
|
|
|
|
300,300
|
|
|
|
0.057
|
|
|
|
17,200
|
|
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gold
|
|
|
|
|
|
|
623,500
|
|
|
|
0.033
|
|
|
|
20,630
|
|
|
|
2,650,600
|
|
|
|
0.027
|
|
|
|
72,870
|
|
|
|
3,274,100
|
|
|
|
0.029
|
|
|
|
93,500
|
|
|
|
81
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2009(1)
|
|
|
|
|
|
|
Proven Reserves
|
|
|
Probable Reserves
|
|
|
Proven and Probable Reserves
|
|
|
|
|
|
|
Newmont
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
Metallurgical
|
|
Deposits/Districts
|
|
Share
|
|
|
Tonnage(2)
|
|
|
(oz/ton)
|
|
|
Ounces(3)
|
|
|
Tonnage(2)
|
|
|
(oz/ton)
|
|
|
Ounces(3)
|
|
|
Tonnage(2)
|
|
|
(oz/ton)
|
|
|
Ounces(3)
|
|
|
Recovery(3)
|
|
|
|
|
|
|
(000)
|
|
|
|
|
|
(000)
|
|
|
(000)
|
|
|
|
|
|
(000)
|
|
|
(000)
|
|
|
|
|
|
(000)
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carlin Open Pits, Nevada
|
|
|
100
|
%
|
|
|
24,400
|
|
|
|
0.067
|
|
|
|
1,640
|
|
|
|
234,900
|
|
|
|
0.042
|
|
|
|
9,760
|
|
|
|
259,300
|
|
|
|
0.044
|
|
|
|
11,400
|
|
|
|
74
|
%
|
Carlin Underground, Nevada
|
|
|
100
|
%
|
|
|
4,600
|
|
|
|
0.307
|
|
|
|
1,400
|
|
|
|
5,100
|
|
|
|
0.315
|
|
|
|
1,590
|
|
|
|
9,700
|
|
|
|
0.311
|
|
|
|
2,990
|
|
|
|
88
|
%
|
Midas, Nevada
|
|
|
100
|
%
|
|
|
400
|
|
|
|
0.480
|
|
|
|
200
|
|
|
|
300
|
|
|
|
0.347
|
|
|
|
100
|
|
|
|
700
|
|
|
|
0.425
|
|
|
|
300
|
|
|
|
95
|
%
|
Phoenix, Nevada
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
285,000
|
|
|
|
0.020
|
|
|
|
5,670
|
|
|
|
285,000
|
|
|
|
0.020
|
|
|
|
5,670
|
|
|
|
73
|
%
|
Twin Creeks, Nevada
|
|
|
100
|
%
|
|
|
9,300
|
|
|
|
0.097
|
|
|
|
900
|
|
|
|
40,900
|
|
|
|
0.072
|
|
|
|
2,950
|
|
|
|
50,200
|
|
|
|
0.077
|
|
|
|
3,850
|
|
|
|
80
|
%
|
Turquoise Ridge,
Nevada(8)
|
|
|
25
|
%
|
|
|
1,100
|
|
|
|
0.480
|
|
|
|
550
|
|
|
|
1,500
|
|
|
|
0.527
|
|
|
|
810
|
|
|
|
2,600
|
|
|
|
0.507
|
|
|
|
1,360
|
|
|
|
92
|
%
|
Nevada
In-Process(9)
|
|
|
100
|
%
|
|
|
33,800
|
|
|
|
0.021
|
|
|
|
730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,800
|
|
|
|
0.021
|
|
|
|
730
|
|
|
|
65
|
%
|
Nevada
Stockpiles(10)
|
|
|
100
|
%
|
|
|
27,000
|
|
|
|
0.079
|
|
|
|
2,140
|
|
|
|
2,500
|
|
|
|
0.028
|
|
|
|
70
|
|
|
|
29,500
|
|
|
|
0.075
|
|
|
|
2,210
|
|
|
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Nevada
|
|
|
|
|
|
|
100,600
|
|
|
|
0.075
|
|
|
|
7,560
|
|
|
|
570,200
|
|
|
|
0.037
|
|
|
|
20,950
|
|
|
|
670,800
|
|
|
|
0.042
|
|
|
|
28,510
|
|
|
|
77
|
%
|
La Herradura, Mexico
|
|
|
44
|
%
|
|
|
46,100
|
|
|
|
0.019
|
|
|
|
900
|
|
|
|
47,100
|
|
|
|
0.019
|
|
|
|
880
|
|
|
|
93,200
|
|
|
|
0.019
|
|
|
|
1,780
|
|
|
|
66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
146,700
|
|
|
|
0.058
|
|
|
|
8,460
|
|
|
|
617,300
|
|
|
|
0.035
|
|
|
|
21,830
|
|
|
|
764,000
|
|
|
|
0.040
|
|
|
|
30,290
|
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conga, Peru
|
|
|
51.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
317,200
|
|
|
|
0.019
|
|
|
|
6,080
|
|
|
|
317,200
|
|
|
|
0.019
|
|
|
|
6,080
|
|
|
|
79
|
%
|
Yanacocha, Peru Open Pits
|
|
|
51.35
|
%
|
|
|
7,800
|
|
|
|
0.035
|
|
|
|
270
|
|
|
|
123,700
|
|
|
|
0.036
|
|
|
|
4,480
|
|
|
|
131,500
|
|
|
|
0.036
|
|
|
|
4,750
|
|
|
|
69
|
%
|
Yanacocha, Peru
In-Process(9)
|
|
|
51.35
|
%
|
|
|
26,400
|
|
|
|
0.025
|
|
|
|
660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,400
|
|
|
|
0.025
|
|
|
|
660
|
|
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Yanacocha, Peru
|
|
|
51.35
|
%
|
|
|
34,200
|
|
|
|
0.027
|
|
|
|
930
|
|
|
|
123,700
|
|
|
|
0.036
|
|
|
|
4,480
|
|
|
|
157,900
|
|
|
|
0.034
|
|
|
|
5,410
|
|
|
|
69
|
%
|
La Zanja, Peru
|
|
|
46.94
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,800
|
|
|
|
0.018
|
|
|
|
340
|
|
|
|
18,800
|
|
|
|
0.018
|
|
|
|
340
|
|
|
|
67
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,200
|
|
|
|
0.027
|
|
|
|
930
|
|
|
|
459,700
|
|
|
|
0.024
|
|
|
|
10,900
|
|
|
|
493,900
|
|
|
|
0.024
|
|
|
|
11,830
|
|
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau Open Pit
|
|
|
52.44
|
%
|
|
|
201,100
|
|
|
|
0.015
|
|
|
|
2,970
|
|
|
|
167,700
|
|
|
|
0.005
|
|
|
|
810
|
|
|
|
368,800
|
|
|
|
0.010
|
|
|
|
3,780
|
|
|
|
76
|
%
|
Batu Hijau
Stockpiles(10)
|
|
|
52.44
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
193,800
|
|
|
|
0.004
|
|
|
|
720
|
|
|
|
193,800
|
|
|
|
0.004
|
|
|
|
720
|
|
|
|
70
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau, Indonesia
|
|
|
52.44
|
%
|
|
|
201,100
|
|
|
|
0.015
|
|
|
|
2,970
|
|
|
|
361,500
|
|
|
|
0.004
|
|
|
|
1,530
|
|
|
|
562,600
|
|
|
|
0.008
|
|
|
|
4,500
|
|
|
|
75
|
%
|
Boddington, Western Australia
|
|
|
100
|
%
|
|
|
184,600
|
|
|
|
0.025
|
|
|
|
4,640
|
|
|
|
781,800
|
|
|
|
0.021
|
|
|
|
16,320
|
|
|
|
966,400
|
|
|
|
0.022
|
|
|
|
20,960
|
|
|
|
82
|
%
|
Jundee, Western Australia
|
|
|
100
|
%
|
|
|
4,100
|
|
|
|
0.065
|
|
|
|
260
|
|
|
|
3,300
|
|
|
|
0.273
|
|
|
|
910
|
|
|
|
7,400
|
|
|
|
0.159
|
|
|
|
1,170
|
|
|
|
90
|
%
|
Kalgoorlie Open Pit and Underground
|
|
|
50
|
%
|
|
|
21,200
|
|
|
|
0.061
|
|
|
|
1,280
|
|
|
|
39,600
|
|
|
|
0.062
|
|
|
|
2,470
|
|
|
|
60,800
|
|
|
|
0.062
|
|
|
|
3,750
|
|
|
|
85
|
%
|
Kalgoorlie
Stockpiles(10)
|
|
|
50
|
%
|
|
|
14,300
|
|
|
|
0.031
|
|
|
|
440
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,300
|
|
|
|
0.031
|
|
|
|
440
|
|
|
|
78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Kalgoorlie, Western Australia
|
|
|
50
|
%
|
|
|
35,500
|
|
|
|
0.049
|
|
|
|
1,720
|
|
|
|
39,600
|
|
|
|
0.062
|
|
|
|
2,470
|
|
|
|
75,100
|
|
|
|
0.056
|
|
|
|
4,190
|
|
|
|
84
|
%
|
Tanami, Northern Territories
|
|
|
100
|
%
|
|
|
5,200
|
|
|
|
0.160
|
|
|
|
830
|
|
|
|
7,900
|
|
|
|
0.102
|
|
|
|
810
|
|
|
|
13,100
|
|
|
|
0.125
|
|
|
|
1,640
|
|
|
|
96
|
%
|
Waihi, New Zealand
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000
|
|
|
|
0.101
|
|
|
|
410
|
|
|
|
4,000
|
|
|
|
0.101
|
|
|
|
410
|
|
|
|
90
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
430,500
|
|
|
|
0.024
|
|
|
|
10,420
|
|
|
|
1,198,100
|
|
|
|
0.019
|
|
|
|
22,450
|
|
|
|
1,628,600
|
|
|
|
0.020
|
|
|
|
32,870
|
|
|
|
82
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo Open Pits
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128,700
|
|
|
|
0.068
|
|
|
|
8,810
|
|
|
|
128,700
|
|
|
|
0.068
|
|
|
|
8,810
|
|
|
|
87
|
%
|
Ahafo
Stockpiles(10)
|
|
|
100
|
%
|
|
|
9,300
|
|
|
|
0.034
|
|
|
|
320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,300
|
|
|
|
0.034
|
|
|
|
320
|
|
|
|
87
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Ahafo, Ghana
|
|
|
100
|
%
|
|
|
9,300
|
|
|
|
0.034
|
|
|
|
320
|
|
|
|
128,700
|
|
|
|
0.068
|
|
|
|
8,810
|
|
|
|
138,000
|
|
|
|
0.066
|
|
|
|
9,130
|
|
|
|
87
|
%
|
Akyem, Ghana
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147,200
|
|
|
|
0.052
|
|
|
|
7,660
|
|
|
|
147,200
|
|
|
|
0.052
|
|
|
|
7,660
|
|
|
|
89
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,300
|
|
|
|
0.033
|
|
|
|
320
|
|
|
|
275,900
|
|
|
|
0.060
|
|
|
|
16,470
|
|
|
|
285,200
|
|
|
|
0.059
|
|
|
|
16,790
|
|
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gold
|
|
|
|
|
|
|
620,700
|
|
|
|
0.032
|
|
|
|
20,130
|
|
|
|
2,551,000
|
|
|
|
0.028
|
|
|
|
71,650
|
|
|
|
3,171,700
|
|
|
|
0.029
|
|
|
|
91,780
|
|
|
|
80
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The term reserve means that part of a mineral
deposit that can be economically and legally extracted or
produced at the time of the reserve determination. |
|
|
|
The term economically, as used in the definition of
reserve, means that profitable extraction or production has been
established or analytically demonstrated in a full feasibility
study to be viable and justifiable under reasonable investment
and market assumptions. |
|
|
|
The term legally, as used in the definition of
reserve, does not imply that all permits needed for mining and
processing have been obtained or that other legal issues have
been completely resolved. However, for a reserve to exist,
Newmont must have a justifiable expectation, based on applicable
laws and regulations, that issuance of permits or resolution of
legal issues necessary |
33
|
|
|
|
|
for mining and processing at a particular deposit will be
accomplished in the ordinary course and in a timeframe
consistent with Newmonts current mine plans. |
|
|
|
The term proven reserves means reserves for which
(a) quantity is computed from dimensions revealed in
outcrops, trenches, workings or drill holes; (b) grade
and/or
quality are computed from the results of detailed sampling; and
(c) the sites for inspection, sampling and measurements are
spaced so closely and the geologic character is sufficiently
defined that size, shape, depth and mineral content of reserves
are well established. |
|
|
|
The term probable reserves means reserves for which
quantity and grade are computed from information similar to that
used for proven reserves, but the sites for sampling are farther
apart or are otherwise less adequately spaced. The degree of
assurance, although lower than that for proven reserves, is high
enough to assume continuity between points of observation. |
|
|
|
Proven and probable reserves include gold or copper attributable
to Newmonts ownership or economic interest. |
|
|
|
Proven and probable reserves were calculated using different
cut-off grades. The term cut-off grade means the
lowest grade of mineralized material considered economic to
process. Cut-off grades vary between deposits depending upon
prevailing economic conditions, mineability of the deposit,
by-products, amenability of the ore to gold or copper extraction
and type of milling or leaching facilities available. |
|
|
|
2010 reserves were calculated at a gold price of $950, A$1,100
or NZ$1,350 per ounce unless otherwise noted. |
|
|
|
2009 reserves were calculated at a gold price of $800, A$1,000
or NZ$1,200 per ounce unless otherwise noted. |
|
(2) |
|
Tonnages include allowances for losses resulting from mining
methods. Tonnages are rounded to the nearest 100,000. |
|
(3) |
|
Ounces or pounds are estimates of metal contained in ore
tonnages and do not include allowances for processing losses.
Metallurgical recovery rates represent the estimated amount of
metal to be recovered through metallurgical extraction
processes. Ounces are rounded to the nearest 10,000. |
|
(4) |
|
Includes undeveloped reserves at the Emigrant deposit of
1.2 million ounces. |
|
(5) |
|
Also contains reserves of 2.8 million ounces of silver with
a metallurgical recovery of 88%. |
|
(6) |
|
Gold cut-off grade varies with level of copper credits. |
|
(7) |
|
Also contains reserves of 86.3 million ounces of silver
with a metallurgical recovery of 36%. |
|
(8) |
|
Reserve estimates provided by Barrick, the operator of the
Turquoise Ridge joint venture. |
|
(9) |
|
In-process material is the material on leach pads at the end of
the year from which gold remains to be recovered. In-process
material reserves are reported separately where tonnage or
ounces are greater than 5% of the total site-reported reserves
and ounces are greater than 100,000. |
|
(10) |
|
Stockpiles are comprised primarily of material that has been
set aside to allow processing of higher grade material in the
mills. Stockpiles increase or decrease depending on current mine
plans. Stockpile reserves are reported separately where tonnage
or ounces are greater than 5% of the total site-reported
reserves and ounces are greater than 100,000. |
|
(11) |
|
Cut-off grades utilized in Nevada 2010 reserves were as
follows: oxide leach material not less than 0.006 ounce per ton;
oxide mill material not less than 0.026 ounce per ton; flotation
material not less than 0.011 ounce per ton; and refractory mill
material not less than 0.042 ounce per ton. |
|
(12) |
|
Cut-off grade utilized in 2010 reserves not less than 0.009
ounce per ton. Includes undeveloped attributable reserves at the
Noche Buena deposit of 0.3 million ounces. |
34
|
|
|
(13) |
|
Deposit is currently undeveloped. Reserves estimates will be
recalculated in 2011 upon completion of Feasibility Study Update. |
|
(14) |
|
Reserves include the currently undeveloped deposit at
La Quinua Sur, which contains attributable reserves of
0.8 million ounces. Cut-off grades utilized in 2010
reserves were as follows: oxide leach material not less than
0.003 ounce per ton; and oxide mill material not less than
0.014 ounce per ton. Also contains attributable reserves of
16.5 million ounces of silver with a metallurgical recovery
of 21%. |
|
(15) |
|
Reserve estimates provided by Buenaventura, the operator of the
La Zanja project. Cut-off grade utilized in 2010 reserves
not less than 0.004 ounce per ton. |
|
(16) |
|
Percentage reflects Newmonts economic interest at
December 31, 2010. In April 2010 our economic interest
decreased from 52.44% to 48.50% as a result of the divestiture
required under the Contract of Work. Also contains attributable
reserves of 12.9 million ounces of silver with a
metallurgical recovery of 78%. |
|
(17) |
|
Reserve estimates provided by Regis Resources Ltd., in which
Newmont holds a 16.22% interest. Gold cut-off grades utilized in
2010 reserves not less than 0.015 ounce per ton. |
|
(18) |
|
Cut-off grade utilized in 2010 reserves not less than 0.020
ounce per ton. |
|
(19) |
|
Cut-off grade utilized in 2010 reserves not less than 0.026
ounce per ton. |
|
(20) |
|
Cut-off grade utilized in 2010 reserves not less than 0.045
ounce per ton. |
|
(21) |
|
Cut-off grade utilized in 2010 reserves not less than 0.015
ounce per ton. |
|
(22) |
|
Includes undeveloped reserves at seven pits in the Ahafo trend
totaling 3.2 million ounces. Cut-off grade utilized in 2010
reserves not less than 0.014 ounce per ton. |
|
(23) |
|
Deposit is undeveloped. Cut-off grade utilized in 2010 reserves
not less than 0.020 ounce per ton. |
The following tables detail copper proven and probable reserves
reflecting only those reserves attributable to Newmonts
ownership or economic interest at December 31, 2010 and
2009:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2010(1)
|
|
|
|
|
|
|
Proven Reserves
|
|
|
Probable Reserves
|
|
|
Proven and Probable Reserves
|
|
|
|
|
|
|
Newmont
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
Metallurgical
|
|
Deposits/Districts
|
|
Share
|
|
|
Tonnage(2)
|
|
|
(Cu %)
|
|
|
Pounds(3)
|
|
|
Tonnage(2)
|
|
|
(Cu %)
|
|
|
Pounds(3)
|
|
|
Tonnage(2)
|
|
|
(Cu %)
|
|
|
Pounds(3)
|
|
|
Recovery(3)
|
|
|
|
|
|
|
(000)
|
|
|
|
|
|
(millions)
|
|
|
(000)
|
|
|
|
|
|
(millions)
|
|
|
(000)
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phoenix Mill,
Nevada(4)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
332,600
|
|
|
|
0.15
|
%
|
|
|
1,030
|
|
|
|
332,600
|
|
|
|
0.15
|
%
|
|
|
1,030
|
|
|
|
61
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phoenix Copper Leach,
Nevada(5)
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132,900
|
|
|
|
0.23
|
%
|
|
|
610
|
|
|
|
132,900
|
|
|
|
0.23
|
%
|
|
|
610
|
|
|
|
53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
465,500
|
|
|
|
0.18
|
%
|
|
|
1,640
|
|
|
|
465,500
|
|
|
|
0.18
|
%
|
|
|
1,640
|
|
|
|
58
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conga,
Peru(6)
|
|
|
51.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
317,200
|
|
|
|
0.26
|
%
|
|
|
1,660
|
|
|
|
317,200
|
|
|
|
0.26
|
%
|
|
|
1,660
|
|
|
|
85
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau Open
Pit(7)
|
|
|
48.50
|
%
|
|
|
168,800
|
|
|
|
0.50
|
%
|
|
|
1,700
|
|
|
|
124,600
|
|
|
|
0.34
|
%
|
|
|
860
|
|
|
|
293,400
|
|
|
|
0.44
|
%
|
|
|
2,560
|
|
|
|
80
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau
Stockpiles(7)(8)
|
|
|
48.50
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
170,700
|
|
|
|
0.35
|
%
|
|
|
1,200
|
|
|
|
170,700
|
|
|
|
0.35
|
%
|
|
|
1,200
|
|
|
|
66
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Batu Hijau, Indonesia
|
|
|
48.50
|
%
|
|
|
168,800
|
|
|
|
0.50
|
%
|
|
|
1,700
|
|
|
|
295,300
|
|
|
|
0.35
|
%
|
|
|
2,060
|
|
|
|
464,100
|
|
|
|
0.40
|
%
|
|
|
3,760
|
|
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington, Western
Australia(9)
|
|
|
100
|
%
|
|
|
181,900
|
|
|
|
0.10
|
%
|
|
|
380
|
|
|
|
885,900
|
|
|
|
0.11
|
%
|
|
|
1,980
|
|
|
|
1,067,800
|
|
|
|
0.11
|
%
|
|
|
2,360
|
|
|
|
84
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,700
|
|
|
|
0.30
|
%
|
|
|
2,080
|
|
|
|
1,181,200
|
|
|
|
0.17
|
%
|
|
|
4,040
|
|
|
|
1,531,900
|
|
|
|
0.20
|
%
|
|
|
6,120
|
|
|
|
79
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Copper
|
|
|
|
|
|
|
350,700
|
|
|
|
0.30
|
%
|
|
|
2,080
|
|
|
|
1,963,900
|
|
|
|
0.19
|
%
|
|
|
7,340
|
|
|
|
2,314,600
|
|
|
|
0.20
|
%
|
|
|
9,420
|
|
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2009(1)
|
|
|
|
|
|
|
Proven Reserves
|
|
|
Probable Reserves
|
|
|
Proven and Probable Reserves
|
|
|
|
|
|
|
Newmont
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
|
|
|
Grade
|
|
|
|
|
|
Metallurgical
|
|
Deposits/Districts
|
|
Share
|
|
|
Tonnage(2)
|
|
|
(Cu %)
|
|
|
Pounds(3)
|
|
|
Tonnage(2)
|
|
|
(Cu %)
|
|
|
Pounds(3)
|
|
|
Tonnage(2)
|
|
|
(Cu %)
|
|
|
Pounds(3)
|
|
|
Recovery(3)
|
|
|
|
|
|
|
(000)
|
|
|
|
|
|
(millions)
|
|
|
(000)
|
|
|
|
|
|
(millions)
|
|
|
(000)
|
|
|
|
|
|
(millions)
|
|
|
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phoenix, Nevada
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
287,500
|
|
|
|
0.16
|
%
|
|
|
900
|
|
|
|
287,500
|
|
|
|
0.16
|
%
|
|
|
900
|
|
|
|
61
|
%
|
South America
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conga, Peru
|
|
|
51.35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
317,200
|
|
|
|
0.26
|
%
|
|
|
1,660
|
|
|
|
317,200
|
|
|
|
0.26
|
%
|
|
|
1,660
|
|
|
|
85
|
%
|
Asia Pacific
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau Open Pit
|
|
|
52.44
|
%
|
|
|
201,100
|
|
|
|
0.51
|
%
|
|
|
2,070
|
|
|
|
167,700
|
|
|
|
0.32
|
%
|
|
|
1,060
|
|
|
|
368,800
|
|
|
|
0.42
|
%
|
|
|
3,130
|
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau
Stockpiles(8)
|
|
|
52.44
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
193,800
|
|
|
|
0.36
|
%
|
|
|
1,390
|
|
|
|
193,800
|
|
|
|
0.36
|
%
|
|
|
1,390
|
|
|
|
66
|
%
|
Total Batu Hijau, Indonesia
|
|
|
52.44
|
%
|
|
|
201,100
|
|
|
|
0.51
|
%
|
|
|
2,070
|
|
|
|
361,500
|
|
|
|
0.34
|
%
|
|
|
2,450
|
|
|
|
562,600
|
|
|
|
0.40
|
%
|
|
|
4,520
|
|
|
|
74
|
%
|
Boddington, Western Australia
|
|
|
100
|
%
|
|
|
184,600
|
|
|
|
0.11
|
%
|
|
|
400
|
|
|
|
781,800
|
|
|
|
0.10
|
%
|
|
|
1,640
|
|
|
|
966,400
|
|
|
|
0.11
|
%
|
|
|
2,040
|
|
|
|
84
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
385,700
|
|
|
|
0.32
|
%
|
|
|
2,470
|
|
|
|
1,143,300
|
|
|
|
0.18
|
%
|
|
|
4,090
|
|
|
|
1,529,000
|
|
|
|
0.21
|
%
|
|
|
6,560
|
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Copper
|
|
|
|
|
|
|
385,700
|
|
|
|
0.32
|
%
|
|
|
2,470
|
|
|
|
1,748,000
|
|
|
|
0.19
|
%
|
|
|
6,650
|
|
|
|
2,133,700
|
|
|
|
0.21
|
%
|
|
|
9,120
|
|
|
|
77
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
See footnote (1) to the Gold Proven and Probable Reserves
tables above. Copper reserves for 2010 were calculated at a
copper price of $2.50 or A$2.95 per pound. 2009 copper reserves
were calculated at a copper price of $2.00 or A$2.40 per pound. |
|
(2) |
|
See footnote (2) to the Gold Proven and Probable Reserves
tables above. Tonnages are rounded to nearest 100,000. |
|
(3) |
|
See footnote (3) to the Gold Proven and Probable Reserves
tables above. Pounds are rounded to the nearest 10 million. |
|
(4) |
|
Copper cut-off grade varies with level of gold credits. |
|
(5) |
|
Copper cut-off grade varies with level of leach solubility. |
|
(6) |
|
Deposit is undeveloped. Copper cut-off grade varies with level
of gold credits. Reserve estimates will be recalculated in 2011
upon completion of Feasibility Study Update. |
|
(7) |
|
Percentage reflects Newmonts economic interest at
December 31, 2010. In April 2010 our economic interest
decreased from 52.44% to 48.50% as a result of the divestiture
required under the Contract of Work. Copper cut-off grade varies
with level of gold credits. |
|
(8) |
|
Stockpiles are comprised primarily of material that has been set
aside to allow processing of higher grade material in the mills.
Stockpiles increase or decrease depending on current mine plans.
Stockpiles are reported separately where tonnage or contained
metal are greater than 5% of the total site reported reserves. |
|
(9) |
|
Copper cut-off grade varies with level of gold credits. |
The following table reconciles year-end 2010 and 2009 gold and
copper proven and probable reserves:
|
|
|
|
|
|
|
|
|
|
|
Gold Ounces
|
|
|
Copper Pounds
|
|
|
|
(in millions)
|
|
|
(in millions)
|
|
|
December 31, 2009
|
|
|
91.8
|
|
|
|
9,120
|
|
Depletion(1)
|
|
|
(6.5
|
)
|
|
|
(370
|
)
|
Revisions and additions,
net(2)
|
|
|
8.2
|
|
|
|
1,000
|
|
Acquisitions
|
|
|
0.3
|
|
|
|
|
|
Other divestments
|
|
|
(0.3
|
)
|
|
|
(330
|
)
|
|
|
|
|
|
|
|
|
|
December 31, 2010
|
|
|
93.5
|
|
|
|
9,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Reserves mined and processed in 2010. |
|
(2) |
|
Revisions and additions are due to reserve conversions,
optimizations, model updates, metal price changes and updated
operating costs and recoveries. |
36
|
|
ITEM 3.
|
LEGAL
PROCEEDINGS
|
For a discussion of legal proceedings, see Note 31 to the
Consolidated Financial Statements.
|
|
ITEM 4A.
|
EXECUTIVE
OFFICERS OF THE REGISTRANT
|
Newmonts executive officers at February 18, 2011 were:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Office
|
|
Richard T. OBrien
|
|
|
56
|
|
|
President and Chief Executive Officer
|
Russell Ball
|
|
|
42
|
|
|
Executive Vice President and Chief Financial Officer
|
Randy Engel
|
|
|
44
|
|
|
Executive Vice President, Strategic Development
|
Brian A. Hill
|
|
|
51
|
|
|
Executive Vice President, Operations
|
Guy Lansdown
|
|
|
50
|
|
|
Executive Vice President, Discovery and Development
|
William N. MacGowan
|
|
|
53
|
|
|
Executive Vice President, Human Resources
|
Jeffrey R.
Huspeni(1)
|
|
|
55
|
|
|
Senior Vice President, African Operations
|
Thomas Kerr
|
|
|
50
|
|
|
Senior Vice President, North American Operations
|
Carlos Santa Cruz
|
|
|
55
|
|
|
Senior Vice President, South American Operations
|
Tim
Netscher(2)
|
|
|
60
|
|
|
Senior Vice President, Asia Pacific Operations
|
David Gutierrez
|
|
|
56
|
|
|
Vice President, Planning and Tax
|
Roger Johnson
|
|
|
53
|
|
|
Vice President and Chief Accounting Officer
|
Thomas P. Mahoney
|
|
|
55
|
|
|
Vice President and Treasurer
|
|
|
|
(1) |
|
Effective April 1, 2011, Mr. Huspeni will replace
Mr. Netscher as Senior Vice President, Asia Pacific
Operations, and David Schummer who, as of the date of this
Annual Report, serves as Group Executive Operations, North
America, will replace Mr. Huspeni as Senior Vice President,
African Operations. For this reason, Mr. Schummers
biographical information is also included below. |
|
(2) |
|
Effective March 31, 2011, Mr. Netscher will retire
from such position. |
There are no family relationships by blood, marriage or adoption
among any of the above executive officers or members of the
Board of Directors of Newmont. Each executive officer is elected
annually by the Board of Directors of Newmont to serve for one
year or until his respective successor is elected and qualified.
There is no arrangement or understanding between any of the
above executive officers and any other person pursuant to which
he was selected as an executive officer.
Mr. OBrien was elected President and Chief
Executive Officer in July 2007, having served as President and
Chief Financial Officer from April 2007 to July 2007, Executive
Vice President and Chief Financial Officer from September 2006
to April 2007 and Senior Vice President and Chief Financial
Officer during 2005 and 2006. Mr. OBrien was
Executive or Senior Vice President and Chief Financial Officer
of AGL Resources from 2001 to 2005.
Mr. Ball was elected Executive Vice President and
Chief Financial Officer in October 2008, having served as Senior
Vice President and Chief Financial Officer since July 2007.
Mr. Ball served as Vice President and Controller from 2004
to 2007. Previously, he served as Group Executive, Investor
Relations, from 2002 to 2004 and as Financial Director and
Controller for Newmonts Indonesian business unit.
Mr. Ball joined Newmont in 1994 as senior internal auditor
after practicing as a Chartered Accountant (SA) with Coopers and
Lybrand in Durban, South Africa.
Mr. Engel was elected Executive Vice President,
Strategic Development, in October 2008, having served as Senior
Vice President, Strategy and Corporate Development, since July
2007. Mr. Engel served as Vice President, Strategic
Planning and Investor relations from 2006 to 2007; Group
Executive, Investor Relations from 2004 to 2006; and Assistant
Treasurer from 2001 to 2004. Mr. Engel has been with
Newmont since 1994, and has served in various capacities in the
areas of business planning, corporate treasury and human
resources.
37
Mr. Hill was elected Executive Vice President,
Operations, in October 2008, having served as Vice President,
Asia Pacific Operations, since January 2008. Mr. Hill
previously served as Managing Director and Chief Executive
Officer of Norilsk Nickel Australia Pty Ltd in 2007; Managing
Director and Chief Executive Officer of Equatorial Mining Ltd
from 2004 to 2006; and Managing Director of Falconbridge
(Australia) Pty Ltd from 2000 to 2004.
Mr. Lansdown was elected Executive Vice President,
Discovery and Development, in October 2008, having previously
served as Senior Vice President, Project Development and
Operations Services, since July 2007. Mr. Lansdown served
as Vice President, Project Engineering and Construction from
2006 to 2007; Project Executive, Boddington, from 2005 to 2006;
and Operations Manager, Yanacocha from 2003 to 2005.
Mr. Lansdown joined Newmont in 1993 after serving as an
associate with Knight Piesold and as the manager of projects for
Group Five in South Africa.
Mr. MacGowan was elected Executive Vice President,
Human Resources, in February 2010, when he joined Newmont.
Mr. MacGowan previously served as Executive Vice President
and Chief Human Resources Officer, People and Places from 2006
to 2010; Senior Vice President, Human Resources, 2004 to 2006;
Vice President, Human Resources, Global Centers of Expertise,
2002 to 2004; Vice President, Human Resources, Engineering and
Operations, 2001 to 2002; Vice President, Human Resources,
Enterprise Services, 1999 to 2001 and; Director, Human
Resources, Enterprise Services, 1998 to 1999 for Sun
Microsystems.
Mr. Huspeni was elected Senior Vice President, African
Operations, in October 2008, having served as Vice President,
African Operations, since January 2008. Mr. Huspeni
previously served as Vice President, Exploration Business
Development from 2005 to 2008 and Vice President, Mineral
District Exploration, from 2002 to 2005.
Effective April 1, 2011, Mr. Schummer, age 39,
will replace Mr. Huspeni as Senior Vice President, African
Operations. He has served as Group Executive Operations, North
America and Group Executive Business Excellence since 2010,
General Manager Operations Yanacocha, Peru from 2007 to 2010,
Mine Manager and Mine Superintendent at Yanacocha, Peru from
2003 to 2006. Previously, he served as Mine Superintendent and
General Foreman in Sumbawa, Indonesia for the Batu Hijau Project
from 1999 to 2003.
Mr. Kerr was elected Senior Vice President, North American
Operations, in December 2009, having served as Vice President,
Newmont USA Limited, North American Operations since November
2008. Mr. Kerr previously served as Phoenix Project
Manager, Senior Manager-Surface Operations and General
Manager-Twin Creeks Operation from 2004 to 2008, Midas Site
Manager from 2003 to 2004 and Project Manager of Newmonts
Corporate Development Transformation Project from 2002 to 2003.
Mr. Santa Cruz was named Senior Vice President, South
American Operations, in October 2008, having served as Vice
President, South American Operations, since 2001. He served as
General Manager of Minera Yanacocha S.R.L. from 1997 to 2001
after having previously served as Assistant General Manager from
1995 to 1997 and Operations Manager from 1992 to 1995.
Mr. Netscher was elected Senior Vice President, Asia
Pacific Operations in May 2009. Prior to joining Newmont, he
held positions as Managing Director of Vale Australia from 2007
to 2008, Senior Vice President and Chief Operating Officer of PT
Inco in Indonesia from 2006 to 2007, Managing Director and Chief
Operating Officer of QNI Pty Limited from 2001 to 2005 and
Executive Director of Impala Platinum Limited from 1991 to 1997.
Mr. Gutierrez was elected Vice President, Planning
and Tax in November 2009, having served as Vice President,
Accounting and Tax from 2007 to 2009 and Vice President, Tax
from 2005 to 2007. Prior to joining Newmont he was a partner
with KPMG LLP from 2002 to 2005, serving as the Denver office
Tax Managing Partner from 2003 to 2005.
Mr. Johnson was elected Vice President and Chief
Accounting Officer in February 2008. Mr. Johnson previously
served as Controller and Chief Accounting Officer from July 2007
to February 2008; Assistant Controller from 2004 to 2007;
Operations Controller and Regional Controller, Australia from
2003 to 2004. Before joining Newmont, Mr. Johnson served as
Senior Vice President, Finance and Administration at Pasminco
Zinc, Inc.
Mr. Mahoney was elected Vice President and Treasurer
of Newmont in 2002. He served as Treasurer of Newmont from 2001
to 2002. Previously, he served as Assistant Treasurer from 1997
to 2001. Mr. Mahoney joined Newmont as Assistant Treasurer,
International in 1994.
38
PART II
|
|
ITEM 5.
|
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASE OF EQUITY SECURITIES
|
Our common stock is listed and principally traded on the New
York Stock Exchange under the symbol NEM.
On November 9, 2009, Newmont announced its intention to
seek removal from the official list of the Australian Stock
Exchange (ASX) and to suspend trading of the CHESS
Depositary Interests (CDIs). The announcement was
due to a low level of CDIs quoted on the ASX with low levels of
trading when compared to other exchanges where it may trade.
Further, investors seeking to purchase shares in Newmont could
do so on the NYSE. The CDIs were suspended from trading on the
ASX on February 10, 2010 and removed from the official list
of the ASX on February 17, 2010.
Newmont Mining Corporation of Canada Limiteds exchangeable
shares (Exchangeable Shares) are listed on the
Toronto Stock Exchange under the symbol NMC.
The following table sets forth, for the periods indicated, the
closing high and low sales prices per share of Newmonts
common stock as reported on the New York Stock Exchange
Composite Tape:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
First quarter
|
|
$
|
51.94
|
|
|
$
|
42.86
|
|
|
$
|
46.90
|
|
|
$
|
35.03
|
|
Second quarter
|
|
$
|
61.74
|
|
|
$
|
51.53
|
|
|
$
|
48.87
|
|
|
$
|
38.14
|
|
Third quarter
|
|
$
|
64.94
|
|
|
$
|
55.40
|
|
|
$
|
47.12
|
|
|
$
|
37.89
|
|
Fourth quarter
|
|
$
|
64.72
|
|
|
$
|
58.09
|
|
|
$
|
55.83
|
|
|
$
|
41.50
|
|
On February 18, 2011, there were 486,564,649 shares of
Newmonts common stock outstanding, which were held by
approximately 12,995 stockholders of record. A dividend of $0.15
per share of common stock outstanding was declared in the third
and fourth quarters of 2010, while a dividend of $0.10 per share
of common stock outstanding was declared in the first and second
quarters of 2010, for a total of $0.50 during 2010. A dividend
of $0.10 per share of common stock outstanding was declared in
each quarter of 2009, for a total of $0.40 during 2009.
The determination of the amount of future dividends will be made
by Newmonts Board of Directors from time to time and will
depend on Newmonts future earnings, capital requirements,
financial condition and other relevant factors.
On February 18, 2011, there were outstanding 6,703,999
Exchangeable Shares, which were held by 39 holders of record.
The Exchangeable Shares are exchangeable at the option of the
holders into Newmont common stock. Holders of Exchangeable
Shares are therefore entitled to receive dividends equivalent to
those that Newmont declares on its common stock.
No shares or other units of any class of Newmonts equity
securities registered pursuant to Section 12 of the
Exchange Act of 1934, as amended, were purchased by the Company,
or any affiliated purchaser, during the period October 1,
2010 to December 31, 2010.
39
|
|
ITEM 6.
|
SELECTED
FINANCIAL DATA (dollars in millions, except per
share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Sales
|
|
$
|
9,540
|
|
|
$
|
7,705
|
|
|
$
|
6,124
|
|
|
$
|
5,465
|
|
|
$
|
4,805
|
|
Income (loss) from continuing operations
|
|
$
|
3,144
|
|
|
$
|
2,109
|
|
|
$
|
1,147
|
|
|
$
|
(580
|
)
|
|
$
|
900
|
|
Net income (loss)
|
|
$
|
3,116
|
|
|
$
|
2,093
|
|
|
$
|
1,160
|
|
|
$
|
(1,485
|
)
|
|
$
|
1,154
|
|
Net income (loss) attributable to Newmont
stockholders(1)
|
|
$
|
2,277
|
|
|
$
|
1,297
|
|
|
$
|
831
|
|
|
$
|
(1,895
|
)
|
|
$
|
791
|
|
Income (loss) per common share attributable to Newmont
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
4.69
|
|
|
$
|
2.68
|
|
|
$
|
1.80
|
|
|
$
|
(2.18
|
)
|
|
$
|
1.20
|
|
Discontinued operations
|
|
|
(0.06
|
)
|
|
|
(0.02
|
)
|
|
|
0.03
|
|
|
|
(2.01
|
)
|
|
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.63
|
|
|
$
|
2.66
|
|
|
$
|
1.83
|
|
|
$
|
(4.19
|
)
|
|
$
|
1.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
4.61
|
|
|
$
|
2.68
|
|
|
$
|
1.80
|
|
|
$
|
(2.18
|
)
|
|
$
|
1.19
|
|
Discontinued operations
|
|
|
(0.06
|
)
|
|
|
(0.02
|
)
|
|
|
0.03
|
|
|
|
(2.01
|
)
|
|
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
4.55
|
|
|
$
|
2.66
|
|
|
$
|
1.83
|
|
|
$
|
(4.19
|
)
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
Total assets
|
|
$
|
25,663
|
|
|
$
|
22,299
|
|
|
$
|
15,727
|
|
|
$
|
15,474
|
|
|
$
|
15,601
|
|
Debt, including current portion
|
|
$
|
4,441
|
|
|
$
|
4,809
|
|
|
$
|
3,237
|
|
|
$
|
2,597
|
|
|
$
|
1,911
|
|
Newmont stockholders equity
|
|
$
|
13,345
|
|
|
$
|
10,703
|
|
|
$
|
7,291
|
|
|
$
|
7,759
|
|
|
$
|
9,337
|
|
|
|
|
(1) |
|
Net income (loss) attributable to Newmont stockholders includes
income (loss) from discontinued operations of $(28), $(11), $15,
$907 and $251 net of tax in 2010, 2009, 2008, 2007 and
2006, respectively. |
40
|
|
ITEM 7.
|
MANAGEMENTS
DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (dollars in millions, except per share,
per ounce and per pound amounts)
|
The following discussion provides information that management
believes is relevant to an assessment and understanding of the
consolidated financial condition and results of operations of
Newmont Mining Corporation and its subsidiaries (collectively,
Newmont, the Company, our
and we). We use certain non-GAAP financial
performance measures in our MD&A. For a detailed
description of each of the non-GAAP measures used in this
MD&A, please see the discussion under
Non-GAAP Financial Performance Measures
beginning on page 72. References to A$ refer to
Australian currency, C$ to Canadian currency,
NZ$ to New Zealand currency, IDR to
Indonesian currency and $ to United States currency.
This discussion addresses matters we consider important for an
understanding of our consolidated financial condition and
results of operations at and for the three years ended
December 31, 2010, as well as our future results. It
consists of the following subsections:
|
|
|
|
|
Overview, which provides a brief summary of
our consolidated results and financial position and the primary
factors affecting those results, as well as a summary of our
expectations for 2011;
|
|
|
|
Accounting Developments, which provides a
discussion of recent changes to our accounting policies that
have affected our consolidated results and financial position;
|
|
|
|
Critical Accounting Policies, which provides
an analysis of the accounting policies we consider critical
because of their effect on the reported amounts of assets,
liabilities, income
and/or
expenses in our consolidated financial statements
and/or
because they require difficult, subjective or complex judgments
by our management;
|
|
|
|
Consolidated Financial Results, which
includes a discussion of our consolidated financial results for
the last three years;
|
|
|
|
Results of Consolidated Operations, which
provides an analysis of the regional operating results for the
last three years;
|
|
|
|
Liquidity and Capital Resources, which
contains a discussion of our cash flows and liquidity, investing
activities and financing activities, contractual obligations and
off-balance sheet arrangements; and
|
|
|
|
Non-GAAP Financial Measures, which
includes descriptions of the various non-GAAP financial
performance measures used by management, the reasons for their
usage and a tabular reconciliation of these measures to the
closest equivalent generally accepted accounting principle
(GAAP) measure.
|
This item should be read in conjunction with our consolidated
financial statements and the notes thereto included in this
annual report.
Overview
Newmont is one of the worlds largest gold producers and is
the only gold company included in the S&P 500 Index and the
Fortune 500, and was the first gold company included in the Dow
Jones Sustainability Index-World. We are also engaged in the
exploration for and acquisition of gold and gold/copper
properties. We have significant assets
and/or
operations in the United States, Australia, Peru, Indonesia,
Ghana, Canada, New Zealand and Mexico.
Our vision is to be the most valued and respected mining company
through industry leading performance. In 2010, we have
successfully executed on the key benchmarks that we set out at
the beginning of the year.
41
Delivered
strong operating performance.
|
|
|
|
|
Consolidated gold production of approximately 6.5 million
ounces (5.4 million ounces attributable to Newmont) at
Costs applicable to sales of $485 per ounce;
|
|
|
|
Consolidated copper production of approximately 600 million
pounds (327 million pounds attributable to Newmont) at
Costs applicable to sales of $0.80 per pound;
|
|
|
|
Record Sales of $9,540, an increase of 24% over 2009;
|
|
|
|
Gold operating margin (average realized price less consolidated
Costs applicable to sales) of $737 per ounce in 2010, an
increase of 30% over 2009 compared to an increase of 25% in the
average realized gold price for the same period;
|
|
|
|
Record Net income attributable to Newmont stockholders of
$4.63 per share, basic;
|
|
|
|
Record Cash flow from continuing operations of $3,180, an
increase of 9% over 2009; and
|
|
|
|
Net increase of 1.7 million ounces of gold reserves to
93.5 million ounces at December 31, 2010.
|
Advanced the
development of our project pipeline.
|
|
|
|
|
Akyem, Ghana In January 2010 we received the mining
lease from the Ghanaian government. We continue to progress into
the development stage with an emphasis on project engineering
and obtaining all required land access and permits. In 2010, we
selected and mobilized the project engineering procurement and
construction contractor, and we are advancing the project
towards a construction decision in the first half of 2011. If
all permits are secured on the currently articulated schedule,
we expect this project to commence production in late 2013 or
early 2014. At December 31, 2010, we reported
7.2 million ounces of gold reserves at Akyem;
|
|
|
|
Conga, Peru Feasibility studies on our preferred
option were completed in late 2009 and we continue to progress
into the development stage with an emphasis on project
engineering and obtaining all required permits. In 2010, we
selected and mobilized the project engineering procurement and
construction contractor. In October 2010, the projects
Environmental Impact Assessment was approved by the Peruvian
authorities. A construction decision is expected in the first
half of 2011. If all permits are secured, production is expected
to commence in late 2014 or early 2015. At December 31,
2010 we reported 6.1 million attributable ounces of gold
reserves and 1,660 million attributable pounds of copper
reserves at Conga; and
|
|
|
|
Hope Bay, Nunavut, Canada Hope Bay is an 80
kilometer district in the Canadian arctic and is one of the last
known undeveloped greenstone belts in the world. The exploration
success over the last few years continues to confirm the
districts significant long-term potential. In 2010, we
commenced an underground decline at the Doris North deposit and
expect the Doris phase 1 project to provide access for test
stoping and development drilling in 2011 progressing to a
construction decision by the end of 2011.
|
Implemented
Business Excellence initiatives to further drive continuous
improvement and business efficiencies throughout our
organization.
|
|
|
|
|
Continuing to improve our safety performance;
|
|
|
|
Applying trained resources to identify and realize cost
reductions, value creation and operational efficiencies;
|
|
|
|
Maintaining our industry-leading environmental, social and
community relations commitments;
|
|
|
|
Remaining a leading member of the Dow Jones Sustainability World
Index; and
|
|
|
|
Investing in people and innovation.
|
42
Summary of
Consolidated Financial and Operating Performance
The table below highlights key financial and operating results:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
2010
|
|
2009
|
|
2008
|
|
Sales
|
|
$
|
9,540
|
|
|
$
|
7,705
|
|
|
$
|
6,124
|
|
Income from continuing operations
|
|
$
|
3,144
|
|
|
$
|
2,109
|
|
|
$
|
1,147
|
|
Net income
|
|
$
|
3,116
|
|
|
$
|
2,093
|
|
|
$
|
1,160
|
|
Net income attributable to Newmont stockholders
|
|
$
|
2,277
|
|
|
$
|
1,297
|
|
|
$
|
831
|
|
Per common share, basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to Newmont
stockholders
|
|
$
|
4.69
|
|
|
$
|
2.68
|
|
|
$
|
1.80
|
|
Net income attributable to Newmont stockholders
|
|
$
|
4.63
|
|
|
$
|
2.66
|
|
|
$
|
1.83
|
|
Adjusted net
income(1)
|
|
$
|
1,893
|
|
|
$
|
1,359
|
|
|
$
|
792
|
|
Adjusted net income per
share(1)
|
|
$
|
3.85
|
|
|
$
|
2.79
|
|
|
$
|
1.74
|
|
Gold ounces produced (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
6,451
|
|
|
|
6,521
|
|
|
|
6,153
|
|
Attributable to
Newmont(2)
|
|
|
5,392
|
|
|
|
5,237
|
|
|
|
5,201
|
|
Copper pounds produced (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
600
|
|
|
|
504
|
|
|
|
285
|
|
Attributable to Newmont
|
|
|
327
|
|
|
|
227
|
|
|
|
128
|
|
Gold ounces sold (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
6,296
|
|
|
|
6,534
|
|
|
|
6,150
|
|
Attributable to Newmont
|
|
|
5,274
|
|
|
|
5,217
|
|
|
|
5,089
|
|
Copper pounds sold (millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
539
|
|
|
|
507
|
|
|
|
290
|
|
Attributable to Newmont
|
|
|
292
|
|
|
|
226
|
|
|
|
130
|
|
Average price realized,
net(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce)
|
|
$
|
1,222
|
|
|
$
|
977
|
|
|
$
|
874
|
|
Copper (per pound)
|
|
$
|
3.43
|
|
|
$
|
2.60
|
|
|
$
|
2.59
|
|
Costs applicable to
sales(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold (per ounce)
|
|
$
|
485
|
|
|
$
|
411
|
|
|
$
|
429
|
|
Copper (per pound)
|
|
$
|
0.80
|
|
|
$
|
0.64
|
|
|
$
|
1.38
|
|
|
|
|
(1) |
|
See Non-GAAP Financial Measures on page 72. |
|
(2) |
|
Includes production from discontinued operations of 32 and 76
ounces in 2009 and 2008, respectively. |
|
(3) |
|
After treatment and refining charges. |
|
(4) |
|
Consolidated Costs applicable to sales excludes
Amortization and Reclamation and remediation. |
Consolidated
Financial Performance
Sales increased 24% in 2010 compared to 2009 due to higher
average realized gold and copper prices and higher consolidated
copper pounds sold, partially offset by fewer consolidated gold
ounces sold. The average realized gold price increased 25% to
$1,222 per ounce in 2010 from $977 per ounce in 2009. The
average realized copper price, including $120 favorable mark to
market adjustments on provisionally priced copper sales and net
of treatment and refining charges, increased 32% to $3.43 per
pound in 2010 compared to $2.60 per pound in 2009. Copper pounds
sold increased in 2010 compared to 2009 due to higher production
at Batu Hijau and a full year of
ramp-up
43
production at Boddington. Gold ounces sold decreased in 2010
compared to 2009 due to higher concentrates held in inventory at
December 31, 2010 and lower production in North and South
America, partially offset by higher production in Asia Pacific,
primarily Boddington. Costs applicable to sales increased
16% in 2010 compared to 2009 due to a full year of Boddington
production and higher waste mining and milling costs, partially
offset by lower gold sales volumes, higher by-product credits
and a
build-up of
inventories and stockpiles. In addition, the effective income
and mining tax rate was lower in 2010 due to $440 in benefits
resulting from income tax planning for certain
non-U.S. subsidiaries.
Liquidity
Our financial position was as follows:
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
|
|
2010
|
|
2009
|
|
Debt (including current portion)
|
|
$
|
4,441
|
|
|
$
|
4,809
|
|
Newmont stockholders equity
|
|
$
|
13,345
|
|
|
$
|
10,703
|
|
Cash and cash equivalents
|
|
$
|
4,056
|
|
|
$
|
3,215
|
|
Investments (including current portion)
|
|
$
|
1,681
|
|
|
$
|
1,242
|
|
During 2010, our debt and liquidity positions were affected by
the following:
|
|
|
|
|
Net cash provided from continuing operations of $3,180;
|
|
|
|
Capital expenditures of $1,402;
|
|
|
|
Income and mining taxes paid of $1,185;
|
|
|
|
Proceeds from the sale of Batu Hijau shares to noncontrolling
interests of $229;
|
|
|
|
Debt pre-payment of $368;
|
|
|
|
Pension and other benefit contributions of $163;
|
|
|
|
Acquisition of additional 17% Batu Hijau economic interest from
noncontrolling interests for $110;
|
|
|
|
Dividends paid to common shareholders of $246; and
|
|
|
|
Dividends paid to noncontrolling interests of $462.
|
Looking
Forward
We will continue to focus on operational and project excellence
in 2011 to deliver on our plans and continue the advancement of
our project pipeline, resulting in the following expectations
for 2011:
|
|
|
|
|
Attributable gold production of approximately 5.1 to
5.3 million ounces, primarily due to lower production at
Batu Hijau as it moves into Phase 6 stripping, partially offset
by higher production at Nevada and Ahafo;
|
|
|
|
Costs applicable to sales per consolidated gold ounce
sold of $560 to $590 due to lower production at Batu Hijau
combined with higher costs for energy, labor and contracted
services;
|
|
|
|
Attributable copper production of approximately 190 to
220 million pounds at Costs applicable to sales per
consolidated copper pound sold of approximately $1.25 to $1.50;
|
|
|
|
We expect to close the Fronteer acquisition for approximately
C$2,300 in the second quarter;
|
|
|
|
Consolidated capital expenditures of approximately $2,700 to
$3,000 in 2011, with approximately 40% to be spent on major
project initiatives, including further development of the Akyem
project in Ghana, the Conga project in Peru, the Hope Bay
project in Canada and the Nevada project portfolio. The
remaining 60% is expected to be spent on several expansion and
|
44
|
|
|
|
|
optimization projects, routine replacements, new project
development and other mine life extension efforts;
|
|
|
|
|
|
Exploration expense of approximately $335 to
$345; and
|
|
|
|
Advanced projects, research and development expense of
approximately $405 to $415.
|
Certain key factors will affect our future financial and
operating results. These include, but are not limited to, the
following:
|
|
|
|
|
Our 2011 expectations, particularly with respect to production
volumes and Costs applicable to sales per ounce or pound,
may differ significantly from actual quarter and full year
results due to variations in mine planning and sequencing, ore
grades and hardness, metal recoveries, waste removal, commodity
input prices and foreign currency exchange rates; and
|
|
|
|
Potential future investments in the Hope Bay project in Canada,
the Akyem project in Ghana, the Conga project in Peru and the
Long Canyon project in Nevada to be acquired from Fronteer will
require significant funding. Our operating cash flow may become
insufficient to meet the funding requirements of these
investments, fund our ongoing business activities and pay
dividends. Our ability to raise and service significant new
sources of capital will be a function of macroeconomic
conditions, future gold and copper prices and our operational
performance, among other factors. In the event of lower gold and
copper prices, unanticipated operating or financial challenges,
or new funding limitations, our ability to pursue new business
opportunities, invest in existing and new projects, fund our
ongoing business activities and pay dividends could be
significantly constrained.
|
Accounting
Developments
For a discussion of Recently Adopted Accounting Pronouncements
and Recently Issued Accounting Pronouncements, see Note 2
to the Consolidated Financial Statements.
Critical
Accounting Policies
Listed below are the accounting policies that we believe are
critical to our financial statements due to the degree of
uncertainty regarding the estimates or assumptions involved and
the magnitude of the asset, liability, revenue or expense being
reported.
Amortization
Expenditures for new facilities or equipment and expenditures
that extend the useful lives of existing facilities or equipment
are capitalized and amortized using the straight-line method at
rates sufficient to amortize such costs over the estimated
future lives of such facilities or equipment and their
components. These lives do not exceed the estimated mine life
based on proven and probable reserves as the useful lives of
these assets are considered to be limited to the life of the
relevant mine.
Costs incurred to develop new properties are capitalized as
incurred, where it has been determined that the property can be
economically developed based on the existence of proven and
probable reserves. At our surface mines, these costs include
costs to further delineate the ore body and remove overburden to
initially expose the ore body. At our underground mines, these
costs include the cost of building access ways, shaft sinking
and access, lateral development, drift development, ramps and
infrastructure development. All such costs are amortized using
the
units-of-production
(UOP) method over the estimated life of the ore body
based on estimated recoverable ounces to be produced from proven
and probable reserves.
Major development costs incurred after the commencement of
production are amortized using the UOP method based on estimated
recoverable ounces to be produced from proven and probable
reserves. To the extent that such costs benefit the entire ore
body, they are amortized over the
45
estimated recoverable ounces or pounds in proven and probable
reserves of the entire ore body. Costs incurred to access
specific ore blocks or areas that only provide benefit over the
life of that block or area are amortized over the estimated
recoverable ounces or pounds in proven and probable reserves of
that specific ore block or area.
The calculation of the UOP rate of amortization, and therefore
the annual amortization charge to operations, could be
materially impacted to the extent that actual production in the
future is different from current forecasts of production based
on proven and probable reserves. This would generally occur to
the extent that there were significant changes in any of the
factors or assumptions used in determining reserves. These
changes could include: (i) an expansion of proven and
probable reserves through exploration activities;
(ii) differences between estimated and actual costs of
production, due to differences in grade, metal recovery rates
and foreign currency exchange rates; and (iii) differences
between actual commodity prices and commodity price assumptions
used in the estimation of reserves. If reserves decreased
significantly, amortization charged to operations would
increase; conversely, if reserves increased significantly,
amortization charged to operations would decrease. Such changes
in reserves could similarly impact the useful lives of assets
depreciated on a straight-line basis, where those lives are
limited to the life of the mine, which in turn is limited to the
life of the proven and probable reserves.
The expected useful lives used in amortization calculations are
determined based on applicable facts and circumstances, as
described above. Significant judgment is involved in the
determination of useful lives, and no assurance can be given
that actual useful lives will not differ significantly from the
useful lives assumed for the purpose of amortization
calculations.
Carrying Value
of Stockpiles
Stockpiles represent ore that has been extracted from the mine
and is available for further processing. Stockpiles are measured
by estimating the number of tons added and removed from the
stockpile, the number of contained ounces or pounds (based on
assay data), and the estimated metallurgical recovery rates
(based on the expected processing method). Stockpile ore
tonnages are verified by periodic surveys. Costs are allocated
to stockpiles based on relative values of material stockpiled
and processed using current mining costs incurred up to the
point of stockpiling the ore, including applicable overhead and
amortization relating to mining operations. Costs are added to a
stockpile based on current mining costs and removed at each
stockpiles average cost per recoverable ounce of gold or
pound of copper in the stockpile. Stockpiles are reduced as
material is removed and processed further. At December 31,
2010 and 2009, our stockpiles had a total carrying value of
$1,786 and $1,387, respectively.
The following is a summary of our ore stockpiles:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
|
|
At December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
|
($ in millions)
|
|
|
($ per ounce)
|
|
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada
|
|
$
|
324
|
|
|
$
|
269
|
|
|
$
|
175
|
|
|
$
|
150
|
|
Yanacocha
|
|
|
69
|
|
|
|
32
|
|
|
|
167
|
|
|
|
167
|
|
Boddington
|
|
|
192
|
|
|
|
46
|
|
|
|
348
|
|
|
|
189
|
|
Other Australia/New Zealand
|
|
|
145
|
|
|
|
121
|
|
|
|
308
|
|
|
|
282
|
|
Batu Hijau
|
|
|
142
|
|
|
|
133
|
|
|
|
172
|
|
|
|
140
|
|
Ahafo
|
|
|
121
|
|
|
|
72
|
|
|
|
307
|
|
|
|
252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/Weighted Average
|
|
$
|
993
|
|
|
$
|
673
|
|
|
$
|
220
|
|
|
$
|
173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
|
|
At December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
|
($ in millions)
|
|
|
($ per pound)
|
|
|
Copper
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington
|
|
$
|
56
|
|
|
$
|
13
|
|
|
$
|
0.95
|
|
|
$
|
0.51
|
|
Batu Hijau
|
|
|
737
|
|
|
|
701
|
|
|
|
0.47
|
|
|
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/Weighted Average
|
|
$
|
793
|
|
|
$
|
714
|
|
|
$
|
0.49
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs that are incurred in or benefit from the productive
process are accumulated as stockpiles. We record stockpiles at
the lower of average cost or net realizable value
(NRV), and carrying values are evaluated at least
quarterly. NRV represents the estimated future sales price based
on short-term and long-term metals prices, less estimated costs
to complete production and bring the product to sale. The
primary factors that influence the need to record write-downs of
stockpiles include short-term and long-term metals prices and
costs for production inputs such as labor, fuel and energy,
materials and supplies, as well as realized ore grades and
actual production levels. The significant assumptions in
determining the NRV for each mine site reporting unit at
December 31, 2010 included production cost and capitalized
expenditure assumptions unique to each operation, a long-term
gold price of $1,100 per ounce, a long-term copper price of
$3.00 per pound and U.S. to Australian dollar exchange rate
of $0.90 per A$1.00. If short-term and long-term metals prices
decrease, the value of the stockpiles decrease, and it may be
necessary to record a write-down of stockpiles to NRV. During
2008, we recorded a write-down of stockpiles to NRV of $2.
Cost allocation to stockpiles and the NRV measurement involves
the use of estimates and assumptions unique to each mining
operation regarding current and future operating and capital
costs, metal recoveries, production levels, commodity prices,
proven and probable reserve quantities, engineering data and
other factors. A high degree of judgment is involved in
determining such assumptions and estimates and no assurance can
be given that actual results will not differ significantly from
those estimates and assumptions.
Carrying Value
of Ore on Leach Pads
Ore on leach pads represent ore that has been mined and placed
on leach pads where a weak cyanide solution is applied to the
surface of the heap to dissolve the gold. Costs are added to ore
on leach pads based on current mining costs, including
applicable amortization relating to mining operations. Costs are
removed from ore on leach pads as ounces are recovered based on
the average cost per estimated recoverable ounce of gold on the
leach pad.
Estimates of recoverable gold on the leach pads are calculated
from the quantities of ore placed on the leach pads (measured
tons added to the leach pads), the grade of ore placed on the
leach pads (based on assay data) and a recovery percentage
(based on ore type). In general, leach pads recover between 50%
and 95% of the recoverable ounces in the first year of leaching,
declining each year thereafter until the leaching process is
complete.
Although the quantities of recoverable gold placed on the leach
pads are reconciled by comparing the grades of ore placed on
pads to the quantities of gold actually recovered (metallurgical
balancing), the nature of the leaching process inherently limits
the ability to precisely monitor inventory levels. As a result,
the metallurgical balancing process is constantly monitored and
estimates are refined based on actual results over time.
Historically, our operating results have not been materially
impacted by variations between the estimated and actual
recoverable quantities of gold on its leach pads. Variations
between actual and estimated quantities resulting from changes
in assumptions and estimates that do not result in write-downs
to NRV are accounted for on a prospective basis. The significant
assumptions in determining the NRV for each mine site reporting
unit at December 31, 2010 apart from production cost and
capitalized expenditure assumptions unique to each operation
included a long-term gold price of $1,100 per ounce. If
short-term and long-term metals prices
47
decrease, the value of the ore on leach pads decrease, and it
may be necessary to record a write-down of ore on leach pads to
NRV. At December 31, 2010 and 2009, our leach pads had a
total carrying value of $588 and $518, respectively.
The following is a summary of our ore on leach pads:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31,
|
|
|
At December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
|
|
($ in millions)
|
|
|
($ per ounce)
|
|
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada
|
|
$
|
155
|
|
|
$
|
176
|
|
|
$
|
431
|
|
|
$
|
362
|
|
La Herradura
|
|
|
6
|
|
|
|
5
|
|
|
|
526
|
|
|
|
450
|
|
Yanacocha
|
|
|
427
|
|
|
|
337
|
|
|
|
558
|
|
|
|
357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total/Weighted Average
|
|
$
|
588
|
|
|
$
|
518
|
|
|
$
|
517
|
|
|
$
|
360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Value
of Long-Lived Assets
We review and evaluate our long-lived assets for impairment when
events or changes in circumstances indicate that the related
carrying amounts may not be recoverable. Asset impairment is
considered to exist if the total estimated future cash flows on
an undiscounted basis are less than the carrying amount of the
asset, including goodwill, if any. An impairment loss is
measured and recorded based on discounted estimated future cash
flows. Future cash flows are estimated based on estimated
quantities of recoverable minerals, expected gold and other
commodity prices (considering current and historical prices,
trends and related factors), production levels, operating costs,
capital requirements and reclamation costs, all based on
life-of-mine
plans. The significant assumptions in determining the future
cash flows for each mine site reporting unit at
December 31, 2010 apart from production cost and
capitalized expenditure assumptions unique to each operation,
included a long-term gold price of $1,100 per ounce, a long-term
copper price of $3.00 per pound and U.S. to Australian
dollar exchange rate of $0.90 per A$1.00. During 2008, we
recorded an impairment of $120 to reduce the carrying value of
property, plant and mine development as part of Write-down of
property, plant and mine development.
Existing proven and probable reserves and value beyond proven
and probable reserves, including mineralization other than
proven and probable reserves and other material that is not part
of the measured, indicated or inferred resource base, are
included when determining the fair value of mine site reporting
units at acquisition and, subsequently, in determining whether
the assets are impaired. The term recoverable
minerals refers to the estimated amount of gold or other
commodities that will be obtained after taking into account
losses during ore processing and treatment. Estimates of
recoverable minerals from such exploration stage mineral
interests are risk adjusted based on managements relative
confidence in such materials. In estimating future cash flows,
assets are grouped at the lowest level for which there are
identifiable cash flows that are largely independent of future
cash flows from other asset groups.
As discussed above under Amortization, various factors could
impact our ability to achieve our forecasted production
schedules from proven and probable reserves. Additionally,
production, capital and reclamation costs could differ from the
assumptions used in the cash flow models used to assess
impairment. The ability to achieve the estimated quantities of
recoverable minerals from exploration stage mineral interests
involves further risks in addition to those factors applicable
to mineral interests where proven and probable reserves have
been identified, due to the lower level of confidence that the
identified mineralized material could ultimately be mined
economically. Assets classified as exploration potential have
the highest level of risk that the carrying value of the asset
can be ultimately realized, due to the still lower level of
geological confidence and economic modeling.
48
Derivative
Instruments
With the exception of the Call Spread Transactions (as described
in Note 14 to the Consolidated Financial Statements), all
financial instruments that meet the definition of a derivative
are recorded on the balance sheet at fair market value. Changes
in the fair market value of derivatives are recorded in the
statements of consolidated income, except for the effective
portion of the change in fair market value of derivatives that
are designated as a cash flow hedge and qualify for cash flow
hedge accounting. Management applies judgment in estimating the
fair value of instruments that are highly sensitive to
assumptions regarding commodity prices, market volatilities,
foreign currency exchange rates and interest rates. Variations
in these factors could materially affect amounts credited or
charged to earnings to reflect the changes in fair market value
of derivatives. Certain derivative contracts are accounted for
as cash flow hedges, whereby the effective portion of changes in
fair market value of these instruments are deferred in
Accumulated other comprehensive income and will be
recognized in the statements of consolidated income when the
underlying transaction designated as the hedged item impacts
earnings. The derivative contracts accounted for as cash flow
hedges are designated against future foreign currency
expenditures or future diesel expenditures, where management
believes the forecasted transaction is probable of occurring. To
the extent that management determines that such future foreign
currency or diesel expenditures are no longer probable of
occurring, gains and losses deferred in Accumulated other
comprehensive income would be reclassified to the statements
of consolidated income immediately.
Reclamation
and Remediation Obligations
Reclamation costs are allocated to expense over the life of the
related assets and are periodically adjusted to reflect changes
in the estimated present value resulting from the passage of
time and revisions to the estimates of either the timing or
amount of the reclamation and remediation costs. Reclamation
obligations are based on when the spending for an existing
environmental disturbance will occur. We review, on at least an
annual basis, the reclamation obligation at each mine site in
accordance with guidance for accounting for asset retirement
obligations.
Reclamation obligations for inactive mines are accrued based on
managements best estimate of the costs expected to be
incurred at a site. Such cost estimates include, where
applicable, ongoing care, maintenance and monitoring costs.
Changes in estimates at inactive mines are reflected in earnings
in the period an estimate is revised.
Accounting for reclamation and remediation obligations requires
management to make estimates unique to each mining operation of
the future costs we will incur to complete the reclamation and
remediation work required to comply with existing laws and
regulations. Actual costs incurred in future periods could
differ from amounts estimated. Additionally, future changes to
environmental laws and regulations could increase the extent of
reclamation and remediation work required. Any such increases in
future costs could materially impact the amounts charged to
earnings for reclamation and remediation.
Income and
Mining Taxes
We recognize the expected future tax benefit from deferred tax
assets when the tax benefit is considered to be more likely than
not of being realized. Assessing the recoverability of deferred
tax assets requires management to make significant estimates
related to expectations of future taxable income. Estimates of
future taxable income are based on forecasted cash flows and the
application of existing tax laws in each jurisdiction. Refer
above to Carrying Value of Long-Lived Assets for a discussion of
the factors that could cause future cash flows to differ from
estimates. To the extent that future cash flows and taxable
income differ significantly from estimates, our ability to
realize deferred tax assets recorded at the balance sheet date
could be impacted. Additionally, future changes in tax laws in
the jurisdictions in which we operate could limit our ability to
obtain the future tax benefits represented by our deferred tax
assets recorded at the reporting date.
49
Our operations involve dealing with uncertainties and judgments
in the application of complex tax regulations in multiple
jurisdictions. The final taxes paid are dependent upon many
factors, including negotiations with taxing authorities in
various jurisdictions and resolution of disputes arising from
federal, state, and international tax audits. We recognize
potential liabilities and record tax liabilities for anticipated
tax audit issues in the U.S. and other tax jurisdictions
based on our estimate of whether, and the extent to which,
additional taxes will be due. We adjust these reserves in light
of changing facts and circumstances; however, due to the
complexity of some of these uncertainties, the ultimate
resolution may result in a payment that is materially different
from our current estimate of the tax liabilities. If our
estimate of tax liabilities proves to be less than the ultimate
assessment, an additional charge to expense would result. If an
estimate of tax liabilities proves to be greater than the
ultimate assessment, a tax benefit would result. We recognize
interest and penalties, if any, related to unrecognized tax
benefits in Income and mining tax expense.
Consolidated
Financial Results
Gold Sales increased $1,306 in 2010 compared to 2009 due
to a $245 per ounce increase in the average realized price after
treatment and refining charges, partially offset by 238,000
fewer ounces sold. Gold Sales increased $1,014 in 2009
compared to 2008 due to a $103 per ounce increase in the average
realized price after treatment and refining charges and 384,000
additional ounces sold. For a complete discussion regarding
variations in gold volumes, see Results of Consolidated
Operations below.
The following analysis summarizes the changes in consolidated
gold sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Consolidated gold sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing
|
|
$
|
7,706
|
|
|
$
|
6,397
|
|
|
$
|
5,387
|
|
Provisional pricing
mark-to-market
|
|
|
41
|
|
|
|
15
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing
|
|
|
7,747
|
|
|
|
6,412
|
|
|
|
5,385
|
|
Less: Treatment and refining charges
|
|
|
(55
|
)
|
|
|
(26
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
7,692
|
|
|
$
|
6,386
|
|
|
$
|
5,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated gold ounces sold (thousands)
|
|
|
6,296
|
|
|
|
6,534
|
|
|
|
6,150
|
|
Average realized gold price (per ounce):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing
|
|
$
|
1,224
|
|
|
$
|
979
|
|
|
|
876
|
|
Provisional pricing
mark-to-market
|
|
|
7
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing
|
|
|
1,231
|
|
|
|
981
|
|
|
|
876
|
|
Less: Treatment and refining charges
|
|
|
(9
|
)
|
|
|
(4
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
1,222
|
|
|
$
|
977
|
|
|
|
874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The change in consolidated gold sales is due to:
|
|
|
|
|
|
|
|
|
|
|
2010 vs.
|
|
|
2009 vs.
|
|
|
|
2009
|
|
|
2008
|
|
|
Increase (decrease) in consolidated ounces sold
|
|
$
|
(234
|
)
|
|
$
|
337
|
|
Increase in average realized gold price
|
|
|
1,569
|
|
|
|
690
|
|
Increase in treatment and refining charges
|
|
|
(29
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,306
|
|
|
$
|
1,014
|
|
|
|
|
|
|
|
|
|
|
Copper Sales increased $529 in 2010 compared to 2009 due
to an $0.83 per pound increase in the average realized price
after treatment and refining charges and 32 million
additional pounds sold.
50
Copper Sales increased $567 in 2009 compared to 2008 due
to 217 million additional pounds sold. For a complete
discussion regarding variations in copper volumes, see
Results of Consolidated Operations below.
The following analysis reflects the changes in consolidated
copper sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Consolidated copper sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing
|
|
$
|
1,842
|
|
|
$
|
1,283
|
|
|
$
|
878
|
|
Provisional pricing
mark-to-market
gain
|
|
|
120
|
|
|
|
173
|
|
|
|
(47
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing
|
|
|
1,962
|
|
|
|
1,456
|
|
|
|
831
|
|
Less: Treatment and refining charges
|
|
|
(114
|
)
|
|
|
(137
|
)
|
|
|
(79
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
1,848
|
|
|
$
|
1,319
|
|
|
$
|
752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated copper pounds sold (millions)
|
|
|
539
|
|
|
|
507
|
|
|
|
290
|
|
Average realized copper price (per pound):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross before provisional pricing
|
|
$
|
3.42
|
|
|
$
|
2.53
|
|
|
$
|
3.03
|
|
Provisional pricing
mark-to-market
gain
|
|
|
0.22
|
|
|
|
0.33
|
|
|
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross after provisional pricing
|
|
|
3.64
|
|
|
|
2.86
|
|
|
|
2.87
|
|
Less: Treatment and refining charges
|
|
|
(0.21
|
)
|
|
|
(0.26
|
)
|
|
|
(0.28
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
|
|
$
|
3.43
|
|
|
$
|
2.60
|
|
|
$
|
2.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The change in consolidated copper sales is due to:
|
|
|
|
|
|
|
|
|
|
|
2010 vs.
|
|
|
2009 vs.
|
|
|
|
2009
|
|
|
2008
|
|
|
Increase in consolidated pounds sold
|
|
$
|
88
|
|
|
$
|
623
|
|
Increase in average realized copper price
|
|
|
418
|
|
|
|
2
|
|
Decrease (increase) in treatment and refining charges
|
|
|
23
|
|
|
|
(58
|
)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
529
|
|
|
$
|
567
|
|
|
|
|
|
|
|
|
|
|
51
The following is a summary of consolidated gold and copper
sales, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
North America:
|
|
|
|
|
|
|
|
|
|
|
|
|
Nevada
|
|
$
|
2,111
|
|
|
$
|
1,943
|
|
|
$
|
1,929
|
|
La Herradura
|
|
|
217
|
|
|
|
113
|
|
|
|
83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,328
|
|
|
|
2,056
|
|
|
|
2,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South America:
|
|
|
|
|
|
|
|
|
|
|
|
|
Yanacocha
|
|
|
1,778
|
|
|
|
2,013
|
|
|
|
1,613
|
|
Asia Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|
Boddington
|
|
|
834
|
|
|
|
101
|
|
|
|
|
|
Batu Hijau
|
|
|
776
|
|
|
|
550
|
|
|
|
261
|
|
Kalgoorlie
|
|
|
463
|
|
|
|
329
|
|
|
|
264
|
|
Jundee
|
|
|
416
|
|
|
|
413
|
|
|
|
342
|
|
Tanami
|
|
|
311
|
|
|
|
280
|
|
|
|
321
|
|
Waihi
|
|
|
131
|
|
|
|
116
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,931
|
|
|
|
1,789
|
|
|
|
1,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ahafo
|
|
|
655
|
|
|
|
528
|
|
|
|
435
|
|
Corporate and other
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,692
|
|
|
|
6,386
|
|
|
|
5,372
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Copper
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia Pacific:
|
|
|
|
|
|
|
|
|
|
|
|
|
Batu Hijau
|
|
|
1,686
|
|
|
|
1,292
|
|
|
|
752
|
|
Boddington
|
|
|
162
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,848
|
|
|
|
1,319
|
|
|
|
752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
9,540
|
|
|
$
|
7,705
|
|
|
$
|
6,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs applicable to sales for gold increased in 2010
compared to 2009 due to a full year of Boddington production and
higher mining and milling costs, partially offset by lower sales
volumes, higher by-product credits and a
build-up of
inventories and stockpiles. The increase in 2009 compared to
2008 was due to higher sales volumes and higher royalty and
workers participation costs, partially offset by higher
by-product sales and lower diesel costs. Costs applicable to
sales for copper increased in 2010 from 2009 due to higher
production and waste mining costs at Batu Hijau and a full year
of Boddington production. The decrease in 2009 from 2008 was due
to lower diesel and mining costs, partially offset by higher
labor costs and the
start-up of
Boddington production. For a complete discussion regarding
variations in operations, see Results of Consolidated
Operations below.
Amortization expense increased in 2010 from 2009 due to a
full year of Boddington production, additional equipment
purchases and higher capitalized mine development.
Amortization expense increased in 2009 from 2008 due to
the start-up
of Boddington, higher underground production at Nevada and
Jundee, development of North Lantern in Nevada, a full
years amortization of Hope Bay infrastructure and higher
production at Batu Hijau. Amortization expense fluctuates
as capital expenditures increase or decrease and as production
levels increase or decrease due to the use of the
units-of-production
amortization method for mineral interests and mine development.
For a
52
complete discussion, see Results of Consolidated
Operations, below. We expect Amortization expense to
be approximately $1,025 to $1,035 in 2011.
The following is a summary of Costs applicable to sales
and Amortization by operation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs Applicable to Sales
|
|
|
Amortization
|
|
|
|
Years Ended December 31,
|
|
|
Years Ended December 31,
|
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
2010
|
|
|
2009
|
|
|
2008
|
|
|
Gold
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America:
|
|
|
|
|
|
|
|
|
&nb |