NEWMONT Corp /DE/ - Quarter Report: 2018 September (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark One)

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

For the Quarterly Period Ended September 30, 2018

☐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

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NEWMONT MINING CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		84-1611629
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

6363 South Fiddler’s Green Circle
Greenwood Village, Colorado		80111
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code (303) 863-7414

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ☐ Yes ☒ No

There were 532,660,228 shares of common stock outstanding on October 18, 2018.

Table of Contents

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
THIRD QUARTER 2018 RESULTS AND HIGHLIGHTS		1
ITEM 1.	FINANCIAL STATEMENTS	3
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income (Loss)	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statement of Changes in Equity	7
	Notes to Condensed Consolidated Financial Statements	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	54
	Overview	54
	Consolidated Financial Results	54
	Results of Consolidated Operations	60
	Foreign Currency Exchange Rates	67
	Liquidity and Capital Resources	68
	Environmental	70
	Accounting Developments	70
	Non-GAAP Financial Measures	70
	Safe Harbor Statement	80
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	82
ITEM 4.	CONTROLS AND PROCEDURES	84
	PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	85
ITEM 1A.	RISK FACTORS	85
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	85
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	85
ITEM 4.	MINE SAFETY DISCLOSURES	85
ITEM 5.	OTHER INFORMATION	86
ITEM 6.	EXHIBITS	87
SIGNATURES		88

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NEWMONT MINING CORPORATION

THIRD QUARTER 2018 RESULTS AND HIGHLIGHTS

(unaudited, in millions, except per share, per ounce and per pound)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Financial Results:
Sales	$	1,726	$	1,879	$	5,205	$	5,444
Gold	$	1,656	$	1,799	$	4,976	$	5,217
Copper	$	70	$	80	$	229	$	227
Costs applicable to sales (1)	$	995	$	1,053	$	2,989	$	3,009
Gold	$	952	$	1,017	$	2,853	$	2,890
Copper	$	43	$	36	$	136	$	119
Net income (loss) from continuing operations	$	(140)	$	206	$	309	$	453
Net income (loss)	$	(124)	$	199	$	365	$	408
Net income (loss) from continuing operations attributable to Newmont stockholders	$	(161)	$	213	$	283	$	473
Per common share, diluted:
Net income (loss) from continuing operations attributable to Newmont stockholders	$	(0.31)	$	0.39	$	0.53	$	0.88
Net income (loss) attributable to Newmont stockholders	$	(0.27)	$	0.38	$	0.63	$	0.80
Adjusted net income (loss) (2)	$	175	$	184	$	504	$	568
Adjusted net income (loss) per share, diluted (2)	$	0.33	$	0.34	$	0.94	$	1.06
Earnings before interest, taxes and depreciation and amortization (2)	$	222	$	662	$	1,492	$	1,932
Adjusted earnings before interest, taxes and depreciation and amortization (2)	$	636	$	656	$	1,825	$	1,929
Net cash provided by (used in) operating activities of continuing operations					$	1,095	$	1,391
Free Cash Flow (2)					$	332	$	834
Cash dividends declared per common share	$	0.14	$	0.075	$	0.42	$	0.175

Operating Results:
Consolidated gold ounces (thousands):
Produced		1,394		1,441		3,922		4,208
Sold		1,378		1,411		3,914		4,178
Attributable gold ounces (thousands):
Produced		1,286		1,339		3,657		3,925
Sold		1,270		1,313		3,648		3,892
Consolidated and attributable copper pounds (millions):
Produced		26		27		83		87
Sold		28		26		82		84
Average realized price:
Gold (per ounce)	$	1,201	$	1,276	$	1,271	$	1,249
Copper (per pound)	$	2.50	$	3.06	$	2.79	$	2.71
Consolidated costs applicable to sales: (1)(2)
Gold (per ounce)	$	691	$	721	$	729	$	692
Copper (per pound)	$	1.54	$	1.38	$	1.66	$	1.42
All-in sustaining costs: (2)
Gold (per ounce)	$	927	$	941	$	973	$	908
Copper (per pound)	$	1.87	$	1.65	$	2.00	$	1.70

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

See “Non-GAAP Financial Measures” beginning on page 70.

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Third Quarter 2018 Highlights

Net income (loss): Delivered Net income (loss) from continuing operations attributable to Newmont stockholders of $(161) or $(0.31) per diluted share, a decrease of $374 from the prior-year quarter, primarily due to the impairment of exploration and long-lived assets in North America and lower metal prices, partially offset by lower income tax expense.

Adjusted net income (loss): Delivered Adjusted net income (loss) of $175 or $0.33 per diluted share, a 3% decrease from the prior-year quarter (See “Non-GAAP Financial Measures” beginning on page 70).

Adjusted EBITDA: Generated $636 in Adjusted EBITDA, a 3% decrease from the prior-year quarter (See “Non-GAAP Financial Measures” beginning on page 70).

Cash Flow: Reported Net cash provided by (used in) operating activities of continuing operations of $1,095 for the nine months ended September 30, 2018, a 21% decrease from the prior year, and free cash flow of $332 (See “Non-GAAP Financial Measures” beginning on page 70).

Portfolio improvements: Completed the CC&V concentrates project in North America; commissioned the primary crusher at Merian in South America; advanced the Tanami Expansion 2 project to definitive feasibility study in Australia; formed a strategic partnership with Evrim Resources in the Cuale gold project in Mexico; expanded regional exploration activities with an investment in Orosur Mining and an opportunity to participate in Miranda Gold’s Lyra project in Colombia.

Attributable gold production: Decreased 4.0% to 1.29 million ounces of gold, primarily due to lower mill throughput at Carlin, lower leach production at CC&V, and lower grades at Kalgoorlie. These impacts were partially offset by higher grades at Ahafo, Yanacocha and Tanami.

Financial strength: Ended the quarter with $3.1 billion cash on hand and net debt of $1.1 billion; an industry-leading balance sheet with investment-grade credit profile; and a quarterly dividend declared of $0.14 per share, an increase of 87% over the prior-year quarter.

Our global project pipeline

Newmont’s capital-efficient project pipeline supports stable production with improving margins and mine life. Near-term development capital projects are presented below. Funding for Subika Underground, Ahafo Mill Expansion, Quecher Main and Tanami Power projects has been approved and these projects are in execution.

Subika Underground, Africa. This project leverages existing infrastructure and an optimized approach to develop Ahafo’s most promising underground resource. First production was achieved in June 2017 with commercial production expected in the fourth quarter of 2018. The project is expected to have an average annual gold production of between 150,000 and 200,000 ounces per year for the first five years beginning in 2019 with an initial mine life of approximately 11 years. Development capital costs (excluding capitalized interest) since approval were $154, of which $24 related to the third quarter of 2018.

Ahafo Mill Expansion, Africa. This project is designed to maximize resource value by improving production margins and accelerating stockpile processing. The project also supports profitable development of Ahafo’s highly prospective underground resources. The expansion is expected to have an average annual gold production of between 75,000 and 100,000 ounces per year for the first five years beginning in 2020. Development capital costs (excluding capitalized interest) since approval were $102, of which $19 related to the third quarter of 2018. A tragic construction accident occurred in April which resulted in six fatalities. Construction restarted in August following a four-month stop to put in place additional safety measures agreed upon with the government of Ghana. The delay will shift first gold production into the second half of 2019, while commercial production remains in the second half of 2019.

Quecher Main, South America. This project will add oxide production at Yanacocha, leverage existing infrastructure and enable potential future growth at Yanacocha. First production is expected in late 2018 with commercial production in the second half of 2019. Quecher Main extends the life of the Yanacocha operation to 2027 with average annual gold production of about 200,000 ounces per year (on a consolidated basis) between 2020 and 2025. Development capital costs (excluding capitalized interest) since approval were $67, of which $26 related to the third quarter of 2018.

Tanami Power, Australia. This project will lower power costs beginning in 2019, mitigate fuel supply risk and reduce carbon emissions. The project includes a 450 kilometer natural gas pipeline to be constructed connecting the Tanami site to the Amadeus Gas Pipeline, and construction and operation of two on-site power stations. The gas supply, gas transmission and power purchase agreements are for a ten year term with options to extend.

We manage our wider project portfolio to maintain flexibility to address the development risks associated with our projects including permitting, local community and government support, engineering and procurement availability, technical issues, escalating costs and other associated risks that could adversely impact the timing and costs of certain opportunities.

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PART I—FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS.

NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in millions except per share)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Sales (Note 4)	$	1,726	$	1,879	$	5,205	$	5,444

Costs and expenses:
Costs applicable to sales (1)		995		1,053		2,989		3,009
Depreciation and amortization		299		328		879		938
Reclamation and remediation (Note 5)		31		26		96		98
Exploration		48		48		142		135
Advanced projects, research and development		37		41		107		99
General and administrative		59		58		181		171
Impairment of long-lived assets (Note 6)		366		—		366		3
Other expense, net (Note 7)		5		1		29		29
		1,840		1,555		4,789		4,482
Other income (expense):
Other income, net (Note 8)		37		10		197		32
Interest expense, net of capitalized interest		(51)		(56)		(153)		(187)
		(14)		(46)		44		(155)
Income (loss) before income and mining tax and other items		(128)		278		460		807
Income and mining tax benefit (expense) (Note 9)		(3)		(73)		(126)		(350)
Equity income (loss) of affiliates		(9)		1		(25)		(4)
Net income (loss) from continuing operations		(140)		206		309		453
Net income (loss) from discontinued operations (Note 10)		16		(7)		56		(45)
Net income (loss)		(124)		199		365		408
Net loss (income) attributable to noncontrolling interests (Note 11)		(21)		7		(26)		20
Net income (loss) attributable to Newmont stockholders	$	(145)	$	206	$	339	$	428

Net income (loss) attributable to Newmont stockholders:
Continuing operations	$	(161)	$	213	$	283	$	473
Discontinued operations		16		(7)		56		(45)
	$	(145)	$	206	$	339	$	428
Net income (loss) per common share (Note 12):
Basic:
Continuing operations	$	(0.31)	$	0.39	$	0.53	$	0.88
Discontinued operations		0.04		(0.01)		0.11		(0.08)
	$	(0.27)	$	0.38	$	0.64	$	0.80
Diluted:
Continuing operations	$	(0.31)	$	0.39	$	0.53	$	0.88
Discontinued operations		0.04		(0.01)		0.10		(0.08)
	$	(0.27)	$	0.38	$	0.63	$	0.80

Cash dividends declared per common share	$	0.14	$	0.075	$	0.42	$	0.175

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Net income (loss)	$	(124)	$	199	$	365	$	408
Other comprehensive income (loss):
Change in marketable securities, net of tax of $-, $-, $- and $-, respectively		—		5		1		(6)
Foreign currency translation adjustments		4		8		—		12
Change in pension and other post-retirement benefits, net of tax of $(1), $(2), $(4) and $(7), respectively		5		4		14		13
Change in fair value of cash flow hedge instruments, net of tax of $(1), $(4), $(4) and $(11), respectively		3		9		12		23
Other comprehensive income (loss)		12		26		27		42
Comprehensive income (loss)	$	(112)	$	225	$	392	$	450

Comprehensive income (loss) attributable to:
Newmont stockholders	$	(133)	$	232	$	366	$	470
Noncontrolling interests		21		(7)		26		(20)
	$	(112)	$	225	$	392	$	450

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in millions)


	Nine Months Ended September 30,
	2018		2017
Operating activities:
Net income (loss)	$	365	$	408
Adjustments:
Depreciation and amortization		879		938
Stock-based compensation (Note 14)		57		53
Reclamation and remediation		85		92
Loss (income) from discontinued operations (Note 10)		(56)		45
Deferred income taxes		(100)		97
Impairment of long-lived assets (Note 6)		366		3
Gain on asset and investment sales, net		(100)		(21)
Write-downs of inventory and stockpiles and ore on leach pads		220		158
Other operating adjustments		46		71
Net change in operating assets and liabilities (Note 24)		(667)		(453)
Net cash provided by (used in) operating activities of continuing operations		1,095		1,391
Net cash provided by (used in) operating activities of discontinued operations (1)		(8)		(12)
Net cash provided by (used in) operating activities		1,087		1,379

Investing activities:
Additions to property, plant and mine development		(763)		(557)
Acquisitions, net		(138)		—
Proceeds from sales of other assets		23		5
Purchases of investments		(17)		(113)
Proceeds from sales of investments		16		34
Other		(5)		13
Net cash provided by (used in) investing activities		(884)		(618)

Financing activities:
Dividends paid to common stockholders		(226)		(94)
Distributions to noncontrolling interests		(107)		(119)
Repurchase of common stock		(96)		—
Funding from noncontrolling interests		77		70
Proceeds from sale of noncontrolling interests		48		—
Payments for withholding of employee taxes related to stock-based compensation		(39)		(13)
Repayment of debt		(3)		(383)
Other		—		(3)
Net cash provided by (used in) financing activities		(346)		(542)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(4)		3
Net change in cash, cash equivalents and restricted cash		(147)		222
Cash, cash equivalents and restricted cash at beginning of period		3,298		2,782
Cash, cash equivalents and restricted cash at end of period	$	3,151	$	3,004

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	3,068	$	2,969
Restricted cash included in Other current assets		1		—
Restricted cash included in Other noncurrent assets		82		35
Total cash, cash equivalents and restricted cash	$	3,151	$	3,004

⁽¹⁾

Net cash provided by (used in) operating activities of discontinued operations includes $(8) and $(9) related to the Holt royalty obligation and $- and $(3) related to closing costs for the sale of Batu Hijau, all of which were paid out of Cash and cash equivalents held for use for the nine months ended September 30, 2018 and 2017, respectively. For additional information regarding the Company’s discontinued operations, see Note 10.

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in millions)


	At September 30,		At December 31,
	2018		2017
ASSETS
Cash and cash equivalents	$	3,068	$	3,259
Trade receivables (Note 4)		176		124
Other accounts receivables		96		113
Investments (Note 17)		58		62
Inventories (Note 18)		713		679
Stockpiles and ore on leach pads (Note 19)		668		676
Other current assets		156		153
Current assets		4,935		5,066
Property, plant and mine development, net		12,209		12,338
Investments (Note 17)		331		280
Stockpiles and ore on leach pads (Note 19)		1,878		1,848
Deferred income tax assets		600		549
Other non-current assets		606		565
Total assets	$	20,559	$	20,646

LIABILITIES
Accounts payable	$	293	$	375
Employee-related benefits		275		309
Income and mining taxes payable		43		248
Lease and other financing obligations (Note 21)		20		4
Other current liabilities (Note 22)		420		462
Current liabilities		1,051		1,398
Debt (Note 20)		4,043		4,040
Reclamation and remediation liabilities (Note 5)		2,385		2,345
Deferred income tax liabilities		614		595
Employee-related benefits		368		386
Lease and other financing obligations (Note 21)		127		21
Other non-current liabilities (Note 22)		348		342
Total liabilities		8,936		9,127

Contingently redeemable noncontrolling interest (Note 11)		49		—

EQUITY
Common stock		855		855
Treasury stock		(69)		(30)
Additional paid-in capital		9,600		9,592
Accumulated other comprehensive income (loss) (Note 23)		(150)		(292)
Retained earnings		361		410
Newmont stockholders' equity		10,597		10,535
Noncontrolling interests		977		984
Total equity		11,574		11,519
Total liabilities and equity	$	20,559	$	20,646

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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NEWMONT MINING CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(unaudited, in millions)


									Accumulated								Contingently
							Additional		Other								Redeemable
	Common Stock			Treasury Stock			Paid-In		Comprehensive		Retained		Noncontrolling		Total		Noncontrolling
	Shares	Amount		Shares	Amount		Capital		Income (Loss)		Earnings		Interests		Equity		Interest
	(in millions)
Balance at December 31, 2017	534	$	855	(1)	$	(30)	$	9,592	$	(292)	$	410	$	984	$	11,519	$	—
Cumulative-effect adjustment of adopting ASU No. 2016-01	—		—	—		—		—		115		(115)		—		—		—
Net income (loss)	—		—	—		—		—		—		339		25		364		1
Other comprehensive income (loss)	—		—	—		—		—		27		—		—		27		—
Sale of noncontrolling interest	—		—	—		—		—		—		—		—		—		48
Dividends declared	—		—	—		—		—		—		(226)		—		(226)		—
Distributions declared to noncontrolling interests	—		—	—		—		—		—		—		(107)		(107)		—
Cash calls requested from noncontrolling interests (1)	—		—	—		—		—		—		—		75		75		—
Repurchase and retirement of common stock	(3)		(5)	—		—		(44)		—		(47)		—		(96)		—
Withholding of employee taxes related to stock-based compensation	—		—	(1)		(39)		—		—		—		—		(39)		—
Stock-based awards and related share issuances	4		5	—		—		52		—		—		—		57		—
Balance at September 30, 2018	535	$	855	(2)	$	(69)	$	9,600	$	(150)	$	361	$	977	$	11,574	$	49

⁽¹⁾

Cash calls requested from noncontrolling interests of $75 for the nine months ended September 30, 2018 represent cash calls requested from Staatsolie for the Merian mine. Staatsolie paid an additional $2 related to prior periods during the three months ended September 30, 2018.

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 1 BASIS OF PRESENTATION

The interim Condensed Consolidated Financial Statements (“interim statements”) of Newmont Mining Corporation and its subsidiaries (collectively, “Newmont” or the “Company”) are unaudited. In the opinion of management, all adjustments (including normal recurring adjustments) and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. These interim statements should be read in conjunction with Newmont’s Consolidated Financial Statements for the year ended December 31, 2017 filed on February 22, 2018 on Form 10-K and revisions filed April 26, 2018 on Form 8-K. The year-end balance sheet data was derived from the audited financial statements and, in accordance with the instructions to Form 10-Q, certain information and footnote disclosures required by United States (“U.S.”) generally accepted accounting principles (“GAAP”) have been condensed or omitted. References to “A$” refers to Australian currency and “C$” refers to Canadian currency.

In July 2018, Newmont purchased a 50% interest in the Galore Creek Partnership (“Galore Creek”) from NovaGold Resources Inc. (“NovaGold”) for $100 in cash consideration paid on the transaction date; a deferred payment of $75, payable upon the earlier of three years or the completion of a prefeasibility study; a deferred payment of $25, payable upon the earlier of five years or the completion of a feasibility study; and a contingent payment of $75, payable upon the earlier of initiation or approval to construct a mine, mill and all related infrastructure for the Galore Creek project.

The Company accounted for the purchase of Galore Creek as an asset acquisition, as the identifiable assets are primarily concentrated in a single mineral interest. The value of the consideration paid and payable of $189 was allocated to the acquired assets and assumed liabilities based on their estimated fair values on the acquisition date. At the acquisition date, the Company recorded mineral interests of $192, other noncurrent assets of $2, other current liabilities of $2 and noncurrent reclamation and remediation liabilities of $3 within the North America segment. Upon becoming probable of payment, the contingent payment of $75 will be accrued and allocated to the mineral interest. Refer to Note 26 for further details regarding the contingent payment. The Company includes its pro-rata share of operations for Galore Creek in the Consolidated Financial Statements.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Risks and Uncertainties

As a global mining company, the Company’s revenue, profitability and future rate of growth are substantially dependent on prevailing prices for gold and copper. Historically, the commodity markets have been very volatile, and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, access to capital and on the quantities of reserves that the Company can economically produce. The carrying value of the Company’s Property, plant and mine development, net; Inventories; Stockpiles and ore on leach pads and Deferred income tax assets are particularly sensitive to the outlook for commodity prices. A decline in the Company’s price outlook from current levels could result in material impairment charges related to these assets.

In addition to changes in commodity prices, other factors such as changes in mine plans, increases in costs, geotechnical failures, and changes in social, environmental or regulatory requirements can adversely affect the Company’s ability to recover its investment in certain assets and result in impairment charges. As discussed in Note 6, the Company recorded impairment charges of $331 related to exploration properties in North America as a result of changes in exploration plans for the properties and $35 related to its Emigrant operation as a result of mine plan changes.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. The Company must make these estimates and assumptions because certain information used is dependent on future events, cannot be calculated with a

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

high degree of precision from data available or simply cannot be readily calculated based on generally accepted methodologies. Actual results could differ from these estimates.

Contingently Redeemable Noncontrolling Interest

Certain noncontrolling interests in consolidated entities meet the definition of redeemable financial instruments if the ability to redeem the interest is outside of the control of the consolidating entity. In such cases, these financial instruments are required to be classified outside of permanent equity (referred to as temporary equity).

Revenue Recognition

The Company adopted ASC 606, Revenue from contracts with customers, on January 1, 2018. Changes to the accounting policy as a result of adoption are discussed below.

Newmont generates revenue by selling gold and copper produced from its mining operations. Refer to Note 3 for further information regarding the Company’s operating segments.

The majority of the Company’s Sales come from the sale of refined gold; however, the end product at the Company’s gold operations 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 the Company’s refining agreements, the doré bars are refined for a fee, and the Company’s share of the refined gold and the separately-recovered silver is credited to its bullion account. Gold from doré bars credited to its bullion account is typically sold to banks or refiners.

A portion of gold sold from Boddington and Kalgoorlie in Australia, Phoenix in Nevada and CC&V in Colorado is sold in the form of concentrate which includes copper and silver. The Company’s Sales also come from the sale of copper. Copper sales are generally in the form of concentrate, which is sold to smelters for further treatment and refining, and cathode. Copper sold from Boddington in Australia is sold in concentrate form and copper sold from Phoenix in Nevada is sold in either concentrate or cathode form.

Generally, if a metal expected to be mined represents more than 10 to 20% of the life of mine sales value of all the metal expected to be mined, co-product accounting should apply. When the Company applies co-product accounting at an operation, revenue is recognized for each co-product metal sold, and shared costs applicable to sales are allocated based on the relative sales values of the co-product metals produced. Generally, if metal expected to be mined is less than the 10 to 20% of the life of mine sales value, by-product accounting should apply. Revenues from by-product sales, which are immaterial, are credited to Costs applicable to sales as a by-product credit. Copper is produced as a co-product at Phoenix and Boddington. Copper and silver is produced as a by-product at certain of the Company’s other operations.

Gold Sales from Doré Production

The Company recognizes revenue for gold from doré production when it satisfies the performance obligation of transferring gold inventory to the customer, which generally occurs upon transfer of gold bullion credits as this is the point at which the customer obtains the ability to direct the use and obtain substantially all of the remaining benefits of ownership of the asset.

The Company generally recognizes the sale of gold bullion credits at the prevailing market price when gold bullion credits are delivered to the customer. The transaction price is determined based on the agreed upon market price and the number of ounces delivered. Payment is due upon delivery of gold bullion credits to the customer’s account.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Gold and Copper Sales from Concentrate Production

The Company recognizes revenue for gold and copper from concentrate production, net of treatment and refining charges, when it satisfies the performance obligation of transferring control of the concentrate to the customer. This generally occurs as material passes over the vessel's rail at the port of loading based on the date from the bill of lading, as the customer has the ability to direct the use of and obtain substantially all of the remaining benefits from the material and the customer has the risk of loss. Newmont has elected to account for shipping and handling costs for concentrate contracts as fulfillment activities and not as promised goods or services; therefore these activities are not considered separate performance obligations.

The Company generally sells gold and copper concentrate based on the future monthly average market price for a future month, dependent on the relevant contract, following the month in which the delivery to the customer takes place. The amount of revenue recognized for concentrates is initially recorded on a provisional basis based on the forward prices for the estimated month of settlement and the Company’s estimated metal quantities based on assay data. The Company’s sales based on a provisional price contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the concentrates at the forward price at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through Sales each period prior to final settlement. The Company also adjusts estimated metal quantities used in computing provisional sales using new information and assay data from the smelter as it is received (if any).

A provisional payment is generally due upon delivery of the concentrate to the customer. Final payment is due upon final settlement of price and quantity with the customer.

The principal risks associated with recognition of sales on a provisional basis include metal price fluctuations and updated quantities between the date the sale is recorded and the date of final settlement. If a significant decline in metal prices occurs, or assay data results in a significant change in quantity between the provisional pricing date and the final settlement date, it is reasonably possible that the Company could be required to return a portion of the provisional payment received on the sale.

Copper Sales from Cathode Production

The Company recognizes revenue for copper from cathode production when it transfers control of copper cathode to the customer, which occurs when the material is picked up by the carrier. The Company generally sells copper cathode based on the weekly average market price for the week following production. The transaction price is determined based on this agreed upon price and the number of pounds delivered. Payment is due upon final settlement of price and quantity with the customer.

Recently Adopted Accounting Pronouncements

Revenue Recognition

In May 2014, Accounting Standards Update (“ASU”) No. 2014-09 was issued related to revenue from contracts with customers. This ASU was further amended in August 2015, March 2016, April 2016, May 2016, December 2016 and September 2017 by ASU No. 2015-14, No. 2016-08, No. 2016-10, No. 2016-12, No. 2016-20 and No. 2017-13, respectively. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition.

The company retrospectively adopted this standard as of January 1, 2018. As there were no contracts outstanding as of December 31, 2017, there was no cumulative effect adjustment required to be recognized at January 1, 2018. The comparative information has not been adjusted and continues to be reported under the accounting standards in effect for those periods.

The adoption of this standard primarily impacts the timing of revenue recognition on certain concentrate contracts based on the Company’s determination of when control is transferred. Revenue related to concentrate shipments is now generally recognized upon

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

completion of loading the material for shipment to the customer and satisfaction of the Company’s significant performance obligation. Prior to the adoption of this standard, revenue was recognized for these contracts when the price was determinable, the concentrate had been loaded on a vessel or received by the customer, risk and title had been transferred and collection of the sales price was reasonably assured.

Investments

In January 2016, ASU No. 2016-01 was issued related to financial instruments. This ASU was further amended in February 2018 by ASU No. 2018-03. The new guidance requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. This new guidance also updates certain disclosure requirements for these investments. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017, and upon adoption, an entity should apply the amendments with the cumulative effect of initially applying the guidance recognized at January 1, 2018. The Company adopted this standard as of January 1, 2018. Upon adoption, the Company reclassified $115 of unrealized holding gains and losses and deferred income taxes related to investments in marketable equity securities from Accumulated other comprehensive income (loss) to Retained earnings in the Consolidated Balance Sheets.

Statement of Cash Flows

In August 2016, ASU No. 2016-15 was issued related to the statement of cash flows. This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017. The Company adopted the guidance as of January 1, 2018. Upon adoption, the Company reclassified $196 from Repayment of debt, previously reported as a cash outflow from financing activities, to operating activities on the Consolidated Statements of Cash Flows related to accreted interest from the debt discount on the 2017 convertible notes repaid in July 2017. Additionally, the Company reclassified $9 for the nine months ended September 30, 2017 of Acquisitions, net previously reported as a cash outflow from investing activities, to operating activities on the Consolidated Statements of Cash Flows related to contingent consideration payments.

Intra-Entity Transfers

In October 2016, ASU No. 2016-16 was issued related to the intra-entity transfers of assets other than inventory. This new guidance requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017. The Company adopted this guidance as of January 1, 2018, and determined it had no impact on the Consolidated Financial Statements or disclosures.

Restricted Cash

In November 2016, ASU No. 2016-18 was issued related to the inclusion of restricted cash in the statement of cash flows. This new guidance requires that a statement of cash flows present the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017, and early adoption is permitted. The Company retrospectively adopted this guidance as of December 31, 2017. Upon adoption, the Company included a reconciliation of Cash and cash equivalents and restricted cash reported within the Consolidated Balance Sheets to the total shown in the Consolidated Statements of Cash Flows. Additionally, the Company reclassified $10 for the nine months ended September 30, 2017 from Net cash provided by (used in) financing activities of continuing operations related to restricted movement to the Net change in cash, cash equivalents and restricted cash.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Employee Benefits

In March 2017, ASU No. 2017-07 was issued related to the presentation of net periodic pension and postretirement cost. The new guidance requires the service cost component of net benefit costs to be classified similar to other compensation costs arising from services rendered by employees. Other components of net benefit costs are required to be classified separately from the service cost and outside income from operations. The Company adopted this guidance as of January 1, 2018. The adoption of this guidance resulted in the recognition of other components of net benefit costs within Other income, net rather than Costs applicable to sales or General and administrative and is no longer included in costs that benefit the inventory or production process. Adoption of this guidance did not have a material impact on the Consolidated Financial Statements or disclosures.

Hedging

In August 2017, ASU No. 2017-12 was issued related to hedge accounting. The new guidance expands the ability to hedge nonfinancial risk components, eliminates the current requirement to separately measure and report hedge ineffectiveness, and requires the entire change in fair value of a hedging instrument to be presented in the same income statement line as the hedged item, when reclassified from Accumulated other comprehensive income (loss). The guidance also eases certain hedge effectiveness documentation and assessment requirements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early adoption is permitted. The Company adopted this guidance as of January 1, 2018, and there was no material impact on the Consolidated Financial Statements or disclosures as a result of adoption.

Recently Issued Accounting Pronouncements

Leases

In February 2016, ASU No. 2016-02 was issued related to leases, which was further amended in September 2017 by ASU No. 2017-13, in January 2018 by ASU No. 2018-01 and in July 2018 by ASU No. 2018-10 and ASU No. 2018-11. The new guidance modifies the classification criteria and requires lessees to recognize right-of-use assets and lease liabilities arising from most leases on the balance sheet with additional disclosures about leasing arrangements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early adoption is permitted. The Company anticipates adopting the new guidance as of January 1, 2019.

The Company is still completing its assessment of the new guidance and the impact it will have on the Consolidated Financial Statements and disclosures, and expects to complete its analysis in 2018. To date, the Company has formed a cross-functional implementation team; performed a completeness assessment over the lease population; established new policies, procedures and internal controls related to the new standard; and reviewed existing contracts that are expected to be outstanding as of the adoption date. Additionally, management continues to evaluate the various practical expedients and policy elections that will be adopted and has elected to review existing contracts to evaluate lease classification for contracts containing leases and to not recast the comparative periods presented when transitioning to the new guidance on January 1, 2019.

Management will continue to perform procedures to assess impacts through the adoption date; however, based on the procedures performed, management has identified certain service contracts that contain embedded leases under the revised guidance. In addition to existing capital leases and other financing obligations, the Company expects that the adoption of the new standard will result in the recognition of additional right-of-use assets and lease liabilities related to operating leases of between $25 to $50 and $30 to $55, respectively, and finance leases of between $45 to $80 and $55 to $90, respectively. The Company does not expect there will be a material impact to the Consolidated Statements of Operations or the Consolidated Statements of Cash Flows. The Company is in the process of assessing the required disclosures of the new standard, and expects to provide additional qualitative and quantitative disclosures related to leasing arrangements upon adoption.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Other Comprehensive Income Reclassifications Related to Tax Reform

In February 2018, ASU No. 2018-02 was issued allowing companies the option to reclassify to retained earnings the tax effects related to items in Accumulated other comprehensive income (loss) as a result of the Tax Cuts and Jobs Act (the “Act”) that was enacted on December 22, 2017. This update is effective in fiscal years, including interim periods, beginning after December 15, 2018, and early adoption is permitted. This guidance should be applied either in the period of adoption or retrospectively to each period in which the effects of the change in the U.S. federal income tax rate in the Act is recognized. The Company is still completing its assessment of the impacts but expects to reclassify amounts out of Accumulated other comprehensive income on the balance sheet. The Company anticipates adopting the new guidance as of December 31, 2018.

Fair Value Disclosure Requirements

In August 2018, ASU No. 2018-13 was issued to modify and enhance the disclosure requirements for fair value measurements. This update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted. The Company is still completing its assessment of the impacts and anticipated adoption date of this guidance.

Defined Benefit Plan Disclosure Requirements

In August 2018, ASU No. 2018-14 was issued to modify and enhance the required disclosures for defined benefit plans. This update is effective in fiscal years, including interim periods, ending after December 15, 2020, and early adoption is permitted. The Company is still completing its assessment of the impacts and anticipated adoption date of this guidance.

Capitalization of Certain Cloud Computing Implementation Costs

In August 2018, ASU No. 2018-15 was issued which allows for the capitalization for certain implementation costs incurred in a cloud computing arrangement that is considered a service contract. This update is effective in fiscal years, including interim periods, beginning after December 15, 2019, and early adoption is permitted. The Company is still completing its assessment of the impacts and anticipated adoption date of this guidance.

NOTE 3 SEGMENT INFORMATION

The Company has organized its operations into four geographic regions. The geographic regions include North America, South America, Australia and Africa and represent the Company’s operating segments. The results of these operating segments are reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segments and assess their performance. As a result, these operating segments represent the Company’s reportable segments. Notwithstanding this structure, the Company internally reports information on a mine-by-mine basis for each mining operation and has chosen to disclose this information on the following tables. Income (loss) before income and mining tax and other items from reportable segments does not reflect general corporate expenses, interest (except project-specific interest) or income and mining taxes. Intercompany revenue and expense amounts have been eliminated within each segment in order to report on the basis that management uses internally for evaluating segment performance. Newmont’s business activities that are not considered operating segments are included in Corporate and Other. Although they are not required to be included in this footnote, they are provided for reconciliation purposes.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Unless otherwise noted, the Company presents only the reportable segments of its continuing operations in the tables below. The financial information relating to the Company’s segments is as follows:


							Advanced		Income (Loss)
			Costs		Depreciation		Projects, Research		before Income
			Applicable		and		and Development		and Mining Tax		Capital
	Sales		to Sales		Amortization		and Exploration		and Other Items		Expenditures(1)
Three Months Ended September 30, 2018
Carlin	$	281	$	205	$	59	$	8	$	(30)	$	46
Phoenix:
Gold		44		39		9
Copper		14		10		3
Total Phoenix		58		49		12		1		(7)		9
Twin Creeks		111		57		14		4		(263)		17
Long Canyon		51		21		20		7		4		4
CC&V		99		68		22		4		6		6
Other North America		—		—		—		6		(36)		4
North America		600		400		127		30		(326)		86

Yanacocha		189		116		30		10		23		41
Merian		157		67		22		2		62		13
Other South America		—		—		3		9		(16)		—
South America		346		183		55		21		69		54

Boddington:
Gold		229		146		27
Copper		56		33		6
Total Boddington		285		179		33		—		73		14
Tanami		148		71		19		2		53		21
Kalgoorlie		92		56		6		2		53		4
Other Australia		—		—		1		4		8		2
Australia		525		306		59		8		187		41

Ahafo		125		62		23		4		34		70
Akyem		130		44		32		4		48		11
Other Africa		—		—		—		1		(3)		—
Africa		255		106		55		9		79		81

Corporate and Other		—		—		3		17		(137)		3
Consolidated	$	1,726	$	995	$	299	$	85	$	(128)	$	265

⁽¹⁾

Includes a decrease in accrued capital expenditures of $9; consolidated capital expenditures on a cash basis were $274.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


							Advanced		Income (Loss)
			Costs		Depreciation		Projects, Research		before Income
			Applicable		and		and Development		and Mining Tax		Capital
	Sales		to Sales		Amortization		and Exploration		and Other Items		Expenditures(1)
Three Months Ended September 30, 2017
Carlin	$	330	$	216	$	60	$	6	$	46	$	32
Phoenix:
Gold		68		48		13
Copper		21		11		3
Total Phoenix		89		59		16		1		8		4
Twin Creeks		103		59		16		3		25		16
Long Canyon		70		17		24		6		22		1
CC&V		140		75		35		2		29		9
Other North America		—		—		—		10		(10)		1
North America		732		426		151		28		120		63

Yanacocha		176		150		38		11		(37)		12
Merian		162		62		22		3		75		29
Other South America		—		—		3		12		(18)		—
South America		338		212		63		26		20		41

Boddington:
Gold		236		130		27
Copper		59		25		5
Total Boddington		295		155		32		1		105		17
Tanami		148		72		17		7		50		25
Kalgoorlie		121		64		5		3		47		5
Other Australia		—		—		2		2		(10)		—
Australia		564		291		56		13		192		47

Ahafo		100		57		14		6		21		51
Akyem		145		67		40		3		35		5
Other Africa		—		—		—		—		(3)		—
Africa		245		124		54		9		53		56

Corporate and Other		—		—		4		13		(107)		1
Consolidated	$	1,879	$	1,053	$	328	$	89	$	278	$	208

⁽¹⁾

Includes an increase in accrued capital expenditures of $14; consolidated capital expenditures on a cash basis were $194.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


							Advanced		Income (Loss)
			Costs		Depreciation		Projects, Research		before Income
			Applicable		and		and Development		and Mining Tax		Capital
	Sales		to Sales		Amortization		and Exploration		and Other Items		Expenditures(1)
Nine Months Ended September 30, 2018
Carlin	$	829	$	582	$	154	$	23	$	25	$	118
Phoenix:
Gold		207		145		34
Copper		61		40		11
Total Phoenix		268		185		45		3		29		27
Twin Creeks		335		187		45		9		(199)		57
Long Canyon		166		55		58		19		34		9
CC&V		270		149		51		7		57		24
Other North America		—		—		1		19		(51)		8
North America		1,868		1,158		354		80		(105)		243

Yanacocha		479		322		82		32		(8)		81
Merian		455		195		64		11		182		62
Other South America		—		—		10		24		(45)		1
South America		934		517		156		67		129		144

Boddington:
Gold		659		404		74
Copper		168		96		18
Total Boddington		827		500		92		—		239		40
Tanami		449		221		54		12		163		68
Kalgoorlie		331		178		18		8		154		17
Other Australia		—		—		4		8		4		3
Australia		1,607		899		168		28		560		128

Ahafo		395		242		78		12		56		196
Akyem		401		173		115		11		93		32
Other Africa		—		—		—		3		(8)		—
Africa		796		415		193		26		141		228

Corporate and Other		—		—		8		48		(265)		9
Consolidated	$	5,205	$	2,989	$	879	$	249	$	460	$	752

⁽¹⁾

Includes a decrease in accrued capital expenditures of $11; consolidated capital expenditures on a cash basis were $763.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


							Advanced		Income (Loss)
			Costs		Depreciation		Projects, Research		before Income
			Applicable		and		and Development		and Mining Tax		Capital
	Sales		to Sales		Amortization		and Exploration		and Other Items		Expenditures(1)
Nine Months Ended September 30, 2017
Carlin	$	873	$	594	$	159	$	14	$	100	$	128
Phoenix:
Gold		189		138		36
Copper		71		45		12
Total Phoenix		260		183		48		5		15		14
Twin Creeks		361		170		47		7		132		33
Long Canyon		166		42		55		16		52		8
CC&V		462		224		100		9		128		17
Other North America		—		—		1		17		(20)		4
North America		2,122		1,213		410		68		407		204

Yanacocha		504		403		108		23		(87)		32
Merian		445		174		69		11		189		67
Other South America		—		—		10		31		(53)		—
South America		949		577		187		65		49		99

Boddington:
Gold		726		399		84
Copper		156		74		15
Total Boddington		882		473		99		2		285		46
Tanami		363		180		48		16		125		77
Kalgoorlie		338		171		14		6		142		13
Other Australia		—		—		5		5		(30)		3
Australia		1,583		824		166		29		522		139

Ahafo		326		193		52		22		55		104
Akyem		464		202		114		9		135		17
Other Africa		—		—		—		2		(8)		—
Africa		790		395		166		33		182		121

Corporate and Other		—		—		9		39		(353)		5
Consolidated	$	5,444	$	3,009	$	938	$	234	$	807	$	568

⁽¹⁾

Includes an increase in accrued capital expenditures of $11; consolidated capital expenditures on a cash basis were $557.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 4 SALES

The following table presents the Company’s Sales by mining operation, product and inventory type:


			Gold Sales		Copper Sales
	Gold Sales		from		from		Copper Sales
	from Doré		Concentrate		Concentrate		from Cathode
	Production		Production		Production		Production		Total Sales
Three Months Ended September 30, 2018
Carlin	$	281	$	—	$	—	$	—	$	281
Phoenix		21		23		4		10		58
Twin Creeks		111		—		—		—		111
Long Canyon		51		—		—		—		51
CC&V		99		—		—		—		99
North America		563		23		4		10		600

Yanacocha		189		—		—		—		189
Merian		157		—		—		—		157
South America		346		—		—		—		346

Boddington		59		170		56		—		285
Tanami		148		—		—		—		148
Kalgoorlie		92		—		—		—		92
Australia		299		170		56		—		525

Ahafo		125		—		—		—		125
Akyem		130		—		—		—		130
Africa		255		—		—		—		255

Consolidated	$	1,463	$	193	$	60	$	10	$	1,726

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


			Gold Sales		Copper Sales
	Gold Sales		from		from		Copper Sales
	from Doré		Concentrate		Concentrate		from Cathode
	Production		Production		Production		Production		Total Sales
Three Months Ended September 30, 2017
Carlin	$	330	$	—	$	—	$	—	$	330
Phoenix		33		35		9		12		89
Twin Creeks		103		—		—		—		103
Long Canyon		70		—		—		—		70
CC&V		140		—		—		—		140
North America		676		35		9		12		732

Yanacocha		176		—		—		—		176
Merian		162		—		—		—		162
South America		338		—		—		—		338

Boddington		58		178		59		—		295
Tanami		148		—		—		—		148
Kalgoorlie		114		7		—		—		121
Australia		320		185		59		—		564

Ahafo		100		—		—		—		100
Akyem		145		—		—		—		145
Africa		245		—		—		—		245

Consolidated	$	1,579	$	220	$	68	$	12	$	1,879


			Gold Sales		Copper Sales
	Gold Sales		from		from		Copper Sales
	from Doré		Concentrate		Concentrate		from Cathode
	Production		Production		Production		Production		Total Sales
Nine Months Ended September 30, 2018
Carlin	$	829	$	—	$	—	$	—	$	829
Phoenix		92		115		25		36		268
Twin Creeks		335		—		—		—		335
Long Canyon		166		—		—		—		166
CC&V		270		—		—		—		270
North America		1,692		115		25		36		1,868

Yanacocha		479		—		—		—		479
Merian		455		—		—		—		455
South America		934		—		—		—		934

Boddington		182		477		168		—		827
Tanami		449		—		—		—		449
Kalgoorlie		331		—		—		—		331
Australia		962		477		168		—		1,607

Ahafo		395		—		—		—		395
Akyem		401		—		—		—		401
Africa		796		—		—		—		796

Consolidated	$	4,384	$	592	$	193	$	36	$	5,205

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


			Gold Sales		Copper Sales
	Gold Sales		from		from		Copper Sales
	from Doré		Concentrate		Concentrate		from Cathode
	Production		Production		Production		Production		Total Sales
Nine Months Ended September 30, 2017
Carlin	$	873	$	—	$	—	$	—	$	873
Phoenix		87		102		36		35		260
Twin Creeks		361		—		—		—		361
Long Canyon		166		—		—		—		166
CC&V		451		11		—		—		462
North America		1,938		113		36		35		2,122

Yanacocha		504		—		—		—		504
Merian		445		—		—		—		445
South America		949		—		—		—		949

Boddington		181		545		156		—		882
Tanami		363		—		—		—		363
Kalgoorlie		331		7		—		—		338
Australia		875		552		156		—		1,583

Ahafo		326		—		—		—		326
Akyem		464		—		—		—		464
Africa		790		—		—		—		790

Consolidated	$	4,552	$	665	$	192	$	35	$	5,444

The following table details the receivables included within Trade receivables:


	At September 30,		At December 31,
	2018		2017
Receivables from Sales:
Gold sales from doré	$	59	$	—
Gold and copper sales from concentrate production		117		117
Copper sales from cathode production		—		7
Total receivables from Sales	$	176	$	124

The impact to Sales from revenue initially recognized in previous periods due to the changes in the final pricing and changes in quantities resulting from assays is an increase of $- and $1, respectively, for the three months ended September 30, 2018 and an increase (decrease) of $6 and $(4), respectively, for the three months ended September 30, 2017.

The impact to Sales from revenue initially recognized in previous periods due to the changes in the final pricing and changes in quantities resulting from assays is a decrease of $(5) and $(2), respectively, for the nine months ended September 30, 2018 and an increase (decrease) of $17 and $(2), respectively, for the nine months ended September 30, 2017.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The following tables summarize the impacts of adopting this standard on the Company’s Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2018:


	Three Months Ended September 30, 2018
					Balance without
			Effect of		Adoption
Condensed Consolidated Statement of Operations	As Reported		Change		of ASC 606
Sales	$	1,726	$	(2)	$	1,724
Costs applicable to sales	$	995	$	(2)	$	993
Depreciation and amortization	$	299	$	—	$	299
Income (loss) before income and mining tax and other items	$	(128)	$	—	$	(128)
Income and mining tax benefit (expense)	$	(3)	$	—	$	(3)
Net income (loss)	$	(124)	$	—	$	(124)

Net income (loss) attributable to Newmont stockholders:
Continuing operations	$	(161)	$	—	$	(161)
Discontinued operations		16		—		16
	$	(145)	$	—	$	(145)
Net income (loss) per common share
Basic:
Continuing operations	$	(0.31)	$	—	$	(0.31)
Discontinued operations		0.04		—		0.04
	$	(0.27)	$	—	$	(0.27)
Diluted:
Continuing operations	$	(0.31)	$	—	$	(0.31)
Discontinued operations		0.04		—		0.04
	$	(0.27)	$	—	$	(0.27)

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2018
					Balance without
			Effect of		Adoption
Condensed Consolidated Statement of Operations	As Reported		Change		of ASC 606
Sales	$	5,205	$	(18)	$	5,187
Costs applicable to sales	$	2,989	$	(10)	$	2,979
Depreciation and amortization	$	879	$	(2)	$	877
Income (loss) before income and mining tax and other items	$	460	$	(6)	$	454
Income and mining tax benefit (expense)	$	(126)	$	2	$	(124)
Net income (loss)	$	365	$	(4)	$	361

Net income (loss) attributable to Newmont stockholders:
Continuing operations	$	283	$	(4)	$	279
Discontinued operations		56		—		56
	$	339	$	(4)	$	335
Net income (loss) per common share
Basic:
Continuing operations	$	0.53	$	(0.01)	$	0.52
Discontinued operations		0.11		—		0.11
	$	0.64	$	(0.01)	$	0.63
Diluted:
Continuing operations	$	0.53	$	(0.01)	$	0.52
Discontinued operations		0.10		—		0.10
	$	0.63	$	(0.01)	$	0.62


	Nine Months Ended September 30, 2018
					Balance without
			Effect of		Adoption
Condensed Consolidated Statement of Cash Flows	As Reported		Change		of ASC 606
Operating activities:
Net income (loss)	$	365	$	(4)	$	361
Adjustments:
Depreciation and amortization	$	879	$	(2)	$	877
Net change in operating assets and liabilities	$	(667)	$	6	$	(661)
Net cash provided by (used in) operating activities of continuing operations	$	1,095	$	—	$	1,095

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	At September 30, 2018
					Balance without
			Effect of		Adoption
Condensed Consolidated Balance Sheet	As Reported		Change		of ASC 606
Trade receivables	$	176	$	(18)	$	158
Inventories	$	713	$	12	$	725
Total assets	$	20,559	$	(6)	$	20,553
Income and mining taxes payable	$	43	$	(2)	$	41
Total liabilities	$	8,936	$	(2)	$	8,934
Retained earnings	$	361	$	(4)	$	357
Newmont stockholders' equity	$	10,597	$	(4)	$	10,593
Total equity	$	11,574	$	(4)	$	11,570
Total liabilities and equity	$	20,559	$	(6)	$	20,553

NOTE 5 RECLAMATION AND REMEDIATION

The Company’s mining and exploration activities are subject to various domestic and international laws and regulations governing the protection of the environment. These laws and regulations are continually changing and are generally becoming more restrictive. The Company conducts its operations to protect public health and the environment and believes its operations are in compliance with applicable laws and regulations in all material respects. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. Estimated future reclamation and remediation costs are based principally on current legal and regulatory requirements.

The Company’s Reclamation and remediation expense consisted of:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Reclamation adjustments	$	—	$	—	$	—	$	15
Reclamation accretion		26		22		75		70
Total reclamation expense		26		22		75		85

Remediation adjustments		3		2		17		9
Remediation accretion		2		2		4		4
Total remediation expense		5		4		21		13
	$	31	$	26	$	96	$	98

Reclamation and remediation adjustments. In June 2018, the Company updated assumptions at a historic mine site for future water management costs of $8. In June 2017, the Company updated reclamation liability assumptions at Minera Yanacocha S.R.L. (“Yanacocha”) regarding water treatment costs on non-operating leach pads of $15.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The following are reconciliations of Reclamation and remediation liabilities:


	2018		2017
Reclamation balance at January 1,	$	2,144	$	1,913
Additions, changes in estimates and other		6		16
Payments, net		(22)		(20)
Accretion expense		75		70
Reclamation balance at September 30,	$	2,203	$	1,979


	2018		2017
Remediation balance at January 1,	$	304	$	312
Additions, changes in estimates and other		6		3
Payments, net		(29)		(33)
Accretion expense		4		4
Remediation balance at September 30,	$	285	$	286

The current portion of reclamation liabilities was $59 and $60 at September 30, 2018 and December 31, 2017, respectively, and was included in Other current liabilities. The current portion of remediation liabilities was $44 and $43 at September 30, 2018 and December 31, 2017, respectively, and was included in Other current liabilities.

At September 30, 2018 and December 31, 2017, $2,203 and $2,144, respectively, were accrued for reclamation obligations relating to operating properties.

The Company is also involved in several matters concerning environmental remediation obligations associated with former, primarily historic, mining activities. Generally, these matters concern developing and implementing remediation plans at the various sites involved. At September 30, 2018 and December 31, 2017, $285 and $304, respectively, were accrued for such environmental remediation obligations. Depending upon the ultimate resolution of these matters, the Company believes that it is reasonably possible that the liability for these matters could be as much as 44% greater or 0% lower than the amount accrued at September 30, 2018. These amounts are included in Other current liabilities and Reclamation and remediation liabilities. The amounts accrued are reviewed periodically based upon facts and circumstances available at the time. Changes in estimates are recorded in Reclamation and remediation in the period estimates are revised.

Non-current restricted cash held for purposes of settling reclamation and remediation obligations was $34 and $38 at September 30, 2018 and December 31, 2017, respectively. Of the amounts at September 30, 2018, $25 was related to the Ahafo and Akyem mines in Ghana, Africa, $8 was related to the Con mine in Yellowknife, Northwest Territory, Canada, and $1 was related to the San Jose Reservoir in Yanacocha, Peru. Of the amount at December 31, 2017, $25 was related to the Ahafo and Akyem mines, $6 was related to the Con mine, $6 was related to the San Jose Reservoir, and $1 was related to the Midnite mine in Washington state.

Included in Other non-current assets at September 30, 2018 and December 31, 2017, was $58 and $64, respectively, of non-current restricted investments, which are legally pledged for purposes of settling reclamation and remediation obligations related to the San Jose Reservoir in Yanacocha, Midnight mine site and for various locations in North America.

Refer to Note 26 for further discussion of reclamation and remediation matters.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 6 IMPAIRMENT OF LONG-LIVED ASSETS


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
North America	$	366	$	—	$	366	$	—
South America		—		—		—		2
Australia		—		—		—		1
	$	366	$	—	$	366	$	3

Impairment of long-lived assets totaled $366 for the three and nine months ended September 30, 2018. The 2018 impairments were primarily related to certain exploration properties of $331 and Emigrant, within the Carlin complex, of $35, both reported in the North America segment. The Company determined that an impairment indicator existed at certain North American exploration properties, due to the Company’s decision to focus on advancing other projects, and at Emigrant, due to a change in the mine plan that resulted in a significant decrease in mine life. In addition to the impairment of long-lived assets at Emigrant, the Company also recorded an adjustment to the carrying value of the ore on leach pads resulting from the change in mine plan, impacting Costs applicable to sales and Depreciation and amortization by $22 and $7, respectively.

As a result of the impairment indicators, recoverability tests were performed and the Company concluded the Property, plant and mine development, net at certain North American exploration properties and Emigrant was impaired. The Company measured the impairment at the North American exploration properties using the market approach. The Company measured the impairment at Emigrant by comparing the total fair value of existing operations using the income approach. Refer to Note 15, Fair Value Accounting, for detail of the assumptions used in the determination of the fair value of the long-lived assets tested for impairment.

The 2017 impairments were primarily related to non-cash write-downs of obsolete assets at Yanacocha and Australia.

NOTE 7 OTHER EXPENSE, NET


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Restructuring and other	$	1	$	2	$	16	$	10
Acquisition cost adjustments		—		(3)		—		2
Other		4		2		13		17
	$	5	$	1	$	29	$	29

Restructuring and other. Restructuring and other represents certain costs associated with severance, legal and other settlements for all periods presented.

Acquisition cost adjustments. Acquisition cost adjustments represent net adjustments during 2017 to the contingent consideration and related liabilities associated with the acquisition of the final 33.33% interest in Boddington in June 2009.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 8 OTHER INCOME, NET


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Gain (loss) on asset and investment sales, net	$	1	$	5	$	100	$	21
Interest		15		9		39		19
Foreign currency exchange, net		16		(9)		37		(30)
Insurance proceeds		25		—		25		13
Change in fair value of marketable equity securities		(26)		—		(21)		—
Other		6		5		17		9
	$	37	$	10	$	197	$	32

Gain (loss) on asset and investment sales, net. In June 2018, the Company exchanged certain royalty interests carried at cost for cash consideration, an equity ownership in Maverix Metals Inc. ("Maverix") and warrants in Maverix, resulting in a pre-tax gain of $100. For additional information regarding this transaction, see Note 17.

In June 2017, the Company exchanged its interest in the Fort á la Corne joint venture for equity ownership in Shore Gold Inc., resulting in a pre-tax gain of $15.

Foreign currency exchange, net. Although the majority of the Company’s balances are denominated in U.S. dollars, foreign currency exchange gains (losses) are recognized on balances to be satisfied in local currencies. These balances primarily relate to the timing of payments for employee-related benefits and other liabilities in Australia, Peru and Suriname.

Insurance proceeds. In September 2018, the Company recorded business interruption insurance proceeds of $25 associated with the East wall slips at Kalgoorlie in the first half of 2018. In June 2017, the Company recorded business interruption insurance proceeds of $13 associated with the heavy rainfall at Tanami during the first quarter of 2017.

NOTE 9 INCOME AND MINING TAXES

A reconciliation of the U.S. federal statutory tax rate to the Company’s effective income tax rate follows:


	Three Months Ended September 30,								Nine Months Ended September 30,
	2018				2017				2018				2017
Income (loss) before income and mining tax and other items			$	(128)			$	278			$	460			$	807

U.S. Federal statutory tax rate	21	%	$	(27)	35	%	$	97	21	%	$	97	35	%	$	282
Reconciling items:
Percentage depletion	16			(21)	3			10	(10)			(46)	(8)			(64)
Change in valuation allowance on deferred tax assets	(10)			13	(14)			(39)	4			16	12			100
Adjustment to provisional expense related to the Tax Cuts and Job Act	—			—	—			—	(10)			(45)	—			—
Mining and other taxes	(13)			17	—			(1)	10			47	4			34
Foreign rate differential	(29)			37	—			—	18			83	—			—
U.S. tax effect of noncontrolling interest attributable to non-U.S. investees	8			(11)	1			5	(5)			(23)	1			5
Effect of foreign earnings, net of credits	5			(6)	—			(1)	(2)			(9)	—			(1)
Other	—			1	1			2	1			6	(1)			(6)
Income and mining tax expense	(2)	%	$	3	26	%	$	73	27	%	$	126	43	%	$	350

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The Company expects to record additional updates to the provisional amounts for the impacts of US tax reform during the fourth quarter of 2018 following completion of the 2017 income tax returns and within the 12 month time frame provided under the SEC’s Staff Accounting Bulletin 118. There are no new estimates associated with US tax reform in the income tax expense for the three months ended September 30, 2018.

NOTE 10 NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS

The details of Net income (loss) from discontinued operations are set forth below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Holt royalty obligation	$	19	$	(7)	$	55	$	(45)
Batu Hijau contingent consideration (1)		(3)		—		1		—
Net income (loss) from discontinued operations	$	16	$	(7)	$	56	$	(45)

⁽¹⁾

See Note 16 for details on the Batu Hijau contingent consideration.

The Holt Royalty Obligation

At September 30, 2018 and December 31, 2017, the estimated fair value of the Holt royalty obligation was $165 and $243, respectively. Changes to the estimated fair value resulting from periodic revaluations are recorded to Net income (loss) from discontinued operations, net of tax. During the three and nine months ended September 30, 2018, the Company recorded a gain (loss) of $19 and $55, net of a tax benefit (expense) of $(6) and $(15), respectively, related to the Holt royalty obligation. During the three and nine months ended September 30, 2017, the Company recorded a gain (loss) of $(7) and $(45), net of tax benefit (expense) of $4 and $25, respectively, related to the Holt royalty obligation.

During the nine months ended September 30, 2018 and 2017, the Company paid $8 and $9, respectively, related to the Holt royalty obligation. Refer to Note 15 for additional information on the Holt royalty obligation.

NOTE 11 NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Merian	$	14	$	17	$	42	$	43
Yanacocha		7		(24)		(16)		(62)
Other		—		—		—		(1)
	$	21	$	(7)	$	26	$	(20)

Newmont has a 75.0% economic interest in Suriname Gold Project C.V. (“Merian”), with the remaining interests held by Staatsolie Maatschappij Suriname N.V. (“Staatsolie”), a company wholly owned by the Republic of Suriname. Newmont consolidates Merian, through its wholly-owned subsidiary, Newmont Suriname LLC., in its Condensed Consolidated Financial Statements as the primary beneficiary in the variable interest entity.

In December 2017, Yanacocha repurchased a 5% ownership interest from International Finance Corporation, which resulted in Newmont’s ownership in Yanacocha increasing from 51.35% to 54.05%, with the remaining interests held by Buenaventura (which increased from 43.65% to 45.95%). In June 2018, Yanacocha sold a 5% ownership interest to Summit Global Management II VB, a subsidiary of Sumitomo Corporation (“Sumitomo”), in exchange for $48 in cash, which resulted in Newmont’s and Buenaventura’s ownership returning to 51.35% and 43.65%, respectively.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Under the terms of the transaction, Sumitomo has the option to require Yanacocha to repurchase the interest for $48 if the Yanacocha Sulfides project does not adequately progress by June 2022 or if the project is approved with an incremental rate of return below a contractually agreed upon rate. Consequently, Sumitomo’s interest has been classified outside of permanent equity as Contingently redeemable noncontrolling interest on the Condensed Consolidated Balance Sheets. Under the terms of the sales agreement, the cash paid by Sumitomo at closing has been placed in escrow for repayment in the event the option is exercised. As a result of this transaction, the Company concluded that Newmont will continue to consolidate Yanacocha in its Condensed Consolidated Financial Statements under the voting interest model.

The following summarizes the assets and liabilities of Merian, (including noncontrolling interests):


	At September 30, 2018		At December 31, 2017
Current assets:
Cash and cash equivalents	$	71	$	27
Trade receivables		29		—
Inventories		83		79
Stockpiles and ore on leach pads		32		21
Other current assets (1)		2		6
		217		133
Non-current assets:
Property, plant and mine development, net		768		769
Other non-current assets (2)		3		8
Total assets	$	988	$	910

Current liabilities:
Accounts payable	$	24	$	22
Other current liabilities (3)		27		28
		51		50
Non-current liabilities:
Reclamation and remediation liabilities		18		18
Other non-current liabilities (4)		1		1
Total liabilities	$	70	$	69

⁽¹⁾

Other current assets include other accounts receivables, prepaid assets and other current assets.

⁽²⁾

Other non-current assets include intangibles, stockpiles and ore on leach pads.

⁽³⁾

Other current liabilities include employee-related benefits and other current liabilities.

⁽⁴⁾

Other non-current liabilities include employee-related benefits.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 12 NET INCOME (LOSS) PER COMMON SHARE

Basic net income (loss) per common share is computed by dividing income available to Newmont common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed similarly, except that weighted average common shares is increased to reflect all dilutive instruments, including employee stock awards and convertible debt instruments. The dilutive effects of Newmont’s dilutive securities are calculated using the treasury stock method and only those instruments that result in a reduction in net income per share are included in the calculation.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income (loss) attributable to Newmont stockholders:
Continuing operations	$	(161)	$	213	$	283	$	473
Discontinued operations		16		(7)		56		(45)
	$	(145)	$	206	$	339	$	428

Weighted average common shares (millions):
Basic		533		533		533		533
Effect of employee stock-based awards		2		3		2		1
Diluted		535		536		535		534

Net income (loss) per common share attributable to Newmont stockholders:
Basic:
Continuing operations	$	(0.31)	$	0.39	$	0.53	$	0.88
Discontinued operations		0.04		(0.01)		0.11		(0.08)
	$	(0.27)	$	0.38	$	0.64	$	0.80
Diluted:
Continuing operations	$	(0.31)	$	0.39	$	0.53	$	0.88
Discontinued operations		0.04		(0.01)		0.10		(0.08)
	$	(0.27)	$	0.38	$	0.63	$	0.80

The Company reported a loss from continuing operations attributable to Newmont stockholders for the three months ended September 30, 2018. Therefore, the potentially dilutive effects for the three months ended September 30, 2018 were not included in the computation of diluted loss per common share attributable to Newmont stockholders because their inclusion would have been anti-dilutive to the computation.

During the three and nine months ended September 30, 2018, the Company repurchased and retired approximately 0.8 million shares and 2.7 million shares of its common stock for $26 and $96, respectively, of which approximately 0.7 million shares related to common stock that was held by participants in the Retirement Savings Plan of Newmont and the Retirement Savings Plan for Hourly-Rated Employees of Newmont. During the three and nine months ended September 30, 2018, the Company withheld a nominal amount and 1.0 million shares for payments of employee withholding taxes related to the vesting of stock awards.

When treasury shares are retired, the Company's policy is to allocate the excess of the repurchase price over the par value of shares acquired to both Retained earnings and Additional paid-in capital. The portion allocated to Additional paid-in capital is calculated on a pro-rata basis of the shares to be retired and the total shares issued and outstanding as of the date of the retirement.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 13 EMPLOYEE PENSION AND OTHER BENEFIT PLANS


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Pension benefit costs, net (1):
Service cost	$	7	$	7	$	23	$	22
Interest cost		10		11		31		33
Expected return on plan assets		(17)		(15)		(51)		(46)
Amortization, net		8		7		24		21
Settlements		—		1		—		5
	$	8	$	11	$	27	$	35


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Other benefit costs (credits), net (1):
Service cost	$	—	$	—	$	1	$	1
Interest cost		—		1		2		3
Amortization, net		(2)		(1)		(6)		(5)
	$	(2)	$	—	$	(3)	$	(1)

⁽¹⁾

Service costs are included in Costs applicable to sales or General and administrative and the other components of benefit costs and settlements are included in Other income, net.

NOTE 14 STOCK-BASED COMPENSATION


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Stock-based compensation:
Restricted stock units	$	12	$	9	$	34	$	26
Performance leveraged stock units		7		9		23		26
Strategic stock units		—		—		—		1
	$	19	$	18	$	57	$	53

NOTE 15 FAIR VALUE ACCOUNTING

Fair value accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

Level 1Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2Quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, quoted prices or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Level 3Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following tables set forth the Company’s assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.


	Fair Value at September 30, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	3,068	$	3,068	$	—	$	—
Restricted cash		83		83		—		—
Trade receivable from provisional gold and copper concentrate sales, net		111		—		111		—
Diesel forward derivative contracts		7		—		7		—
Marketable equity securities		159		144		15		—
Restricted marketable debt securities		52		22		30		—
Restricted other assets		6		6		—		—
Batu Hijau contingent consideration		23		—		—		23
	$	3,509	$	3,323	$	163	$	23
Liabilities:
Debt (1)	$	4,323	$	—	$	4,323	$	—
Holt royalty obligation		165		—		—		165
	$	4,488	$	—	$	4,323	$	165


	Fair Value at December 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	3,259	$	3,259	$	—	$	—
Restricted cash		39		39		—		—
Trade receivable from provisional gold and copper concentrate sales, net		111		—		111		—
Diesel forward derivative contracts		6		—		6		—
Marketable equity securities		165		165		—		—
Restricted marketable debt securities		55		17		38		—
Restricted other assets		9		9		—		—
Batu Hijau contingent consideration		23		—		—		23
	$	3,667	$	3,489	$	155	$	23
Liabilities:
Debt (1)	$	4,671	$	—	$	4,671	$	—
Foreign exchange forward derivative contracts		1		—		1		—
Holt royalty obligation		243		—		—		243
	$	4,915	$	—	$	4,672	$	243

⁽¹⁾

Debt, exclusive of capital leases, is carried at amortized cost. The outstanding carrying value was $4,043 and $4,040 at September 30, 2018 and December 31, 2017, respectively. The fair value measurement of debt was based on an independent third party pricing source.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The fair values of the derivative instruments in the table above are presented on a net basis. The gross amounts related to the fair value of the derivative instruments above are included in Note 16. All other fair value disclosures in the above table are presented on a gross basis.

The Company’s cash and cash equivalents and restricted cash and restricted cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. The cash and cash equivalent instruments and restricted cash are valued based on quoted market prices in active markets and are primarily money market securities and U.S. Treasury securities.

The Company’s net trade receivables from provisional gold and copper concentrate sales, which contain an embedded derivative and are subject to final pricing, are valued using quoted market prices based on forward curves for the particular metal. As the contracts themselves are not traded on an exchange, these receivables are classified within Level 2 of the fair value hierarchy.

The Company’s derivative instruments are valued using pricing models, and the Company generally uses similar models to value similar instruments. Valuation models require a variety of inputs, including contractual terms, market prices, forward curves, measures of volatility, and correlations of such inputs. The Company’s derivatives trade in liquid markets, and as such, model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.

The Company’s marketable equity securities with readily determinable fair values are valued using quoted market prices in active markets and as such are classified within Level 1 of the fair value hierarchy. The fair value of the marketable equity securities are calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by the Company. The Company’s marketable equity securities without readily determinable fair values are primarily comprised of warrants in publicly traded companies and are valued using a Black-Scholes model using quoted market prices in active markets of the underlying securities. As the contracts themselves are not traded on the exchange, these equity securities are classified within Level 2 of the fair value hierarchy.

The Company’s restricted marketable debt securities are primarily U.S. government issued bonds and international bonds. The Company’s South American debt securities are classified within Level 1 of the fair value hierarchy, using published market prices of actively traded securities. The Company’s North American debt securities are classified within Level 2 of the fair value hierarchy as they are valued using pricing models which are based on prices of similar, actively traded securities.

The Company’s restricted other assets primarily consist of bank issued certificate of deposits that have maturities over 90 days and marketable equity securities. Both are classified within Level 1 of the fair value hierarchy as their fair values are based on quoted prices available in active markets.

The estimated value of the Batu Hijau contingent consideration was determined using (i) a discounted cash flow model, (ii) a Monte Carlo valuation model to simulate future copper prices using the Company’s long-term copper price, and (iii) estimated production and/or development dates for Batu Hijau Phase 7 and the Elang projects in Indonesia. The contingent consideration is classified within Level 3 of the fair value hierarchy.

The estimated fair value of the Holt royalty obligation was determined using (i) a discounted cash flow model, (ii) a Monte Carlo valuation model to simulate future gold prices using the Company’s long-term gold price, (iii) various gold production scenarios from reserve and resource information and (iv) a weighted average discount rate. The royalty obligation is classified within Level 3 of the fair value hierarchy.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The following tables set forth a summary of the quantitative and qualitative information related to the unobservable inputs used in the calculation of the Company’s Level 3 financial assets and liabilities at September 30, 2018 and December 31, 2017:


	At September 30,				Range/Weighted
Description	2018		Valuation technique	Unobservable input	average
Batu Hijau contingent consideration	$	23	Monte Carlo	Discount rate		17.50	%
				Short-term copper price	$	2.77
				Long-term copper price	$	3.00
Holt royalty obligation	$	165	Monte Carlo	Discount rate		4.13	%
				Short-term gold price	$	1,213
				Long-term gold price	$	1,300
				Gold production scenarios (in 000's of ounces)		318 - 1,560


	At December 31,				Range/Weighted
Description	2017		Valuation technique	Unobservable input	average
Batu Hijau contingent consideration	$	23	Monte Carlo	Discount rate		17.50	%
				Short-term copper price	$	3.09
				Long-term copper price	$	3.00
Holt royalty obligation	$	243	Monte Carlo	Discount rate		3.32	%
				Short-term gold price	$	1,275
				Long-term gold price	$	1,300
				Gold production scenarios (in 000's of ounces)		402 - 1,779

The following tables set forth a summary of changes in the fair value of the Company’s Level 3 financial assets and liabilities:


	Batu Hijau				Holt
	Contingent		Total		Royalty		Total
	Consideration (1)		Assets		Obligation (1)		Liabilities
Fair value at December 31, 2017	$	23	$	23	$	243	$	243
Settlements		—		—		(8)		(8)
Revaluation		—		—		(70)		(70)
Fair value at September 30, 2018	$	23	$	23	$	165	$	165


	Asset
	Backed		Batu Hijau				Holt
	Commercial		Contingent		Total		Royalty		Total
	Paper (2)		Consideration (1)		Assets		Obligation (1)		Liabilities
Fair value at December 31, 2016	$	18	$	13	$	31	$	187	$	187
Settlements		(18)		—		(18)		(9)		(9)
Revaluation		—		—		—		70		70
Fair value at September 30, 2017	$	—	$	13	$	13	$	248	$	248

⁽¹⁾

The gain (loss) recognized is included in Net income (loss) from discontinued operations.

⁽²⁾

The gain (loss) recognized is included in Other income, net.

During the third quarter of 2018, the Company performed a non-recurring fair value measurement (i.e. Level 3 of the fair value hierarchy) in connection with recoverability and impairment tests performed at certain North American exploration properties due to the Company’s decision to focus on advancing other projects and at Emigrant due to a change in the mine plan that resulted in a decrease in mine life.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The estimated fair value of the North American exploration properties was determined using comparable transactions. The estimated fair value of Emigrant’s existing operations was determined using (i) a country specific discount rate of 5.2%, (ii) a short-term gold price of $1,213 based on the third quarter average of the London PM fix, (iii) a long-term gold price of $1,300, and (iv) updated cash flow information from the Company’s business plan. For further information regarding the impairment charges, see Note 6.

NOTE 16 DERIVATIVE INSTRUMENTS

The Company’s strategy is to provide shareholders with leverage to changes in gold and copper prices by selling its production at spot market prices. Consequently, the Company does not hedge its gold and copper sales. The Company has and will continue to manage certain risks associated with commodity input costs, interest rates and foreign currencies using the derivative market.

Cash Flow Hedges

The Company uses hedge programs to mitigate the variability of its operating costs primarily related to diesel price fluctuations. Prior to adoption of ASU No. 2017-12, Newmont’s hedge portfolio consisted of Nevada diesel swaps and Australian dollar foreign currency forwards. Subsequent to the adoption of this ASU, the Company initiated new diesel hedge programs for all of its Nevada sites in North America, Merian in South America and Boddington, Tanami and Kalgoorlie in Australia.

The following diesel contracts were transacted for risk management purposes and qualify as cash flow hedges. The unrealized changes in market value have been recorded in Accumulated other comprehensive income (loss) and are reclassified to income during the period in which the hedged transaction affects earnings.

The Company had the following diesel derivative contracts outstanding at September 30, 2018:


	Expected Maturity Date
					Total/
	2018	2019	2020	2021	Average
Diesel Fixed Forward Contracts:
North America
Diesel gallons (millions)	3	4	4	1	12
Average rate ($/gallon)	1.68	1.87	2.00	2.07	1.89

South America
Diesel gallons (millions)	—	—	2	—	2
Average rate ($/gallon)	—	2.07	1.89	2.03	1.92

Australia
Diesel barrels (thousands)	—	18	91	29	138
Average rate ($/barrel)	—	85.96	78.66	82.15	80.34

The hedging instruments consist of a series of financially settled fixed forward contracts, which run through the second quarter of 2021 in South America and the third quarter of 2021 in North America and Australia.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Derivative Instrument Fair Values

The Company had the following derivative instruments designated as hedges at September 30, 2018 and December 31, 2017:

Fair Values of Derivative Instruments

At September 30, 2018

Other

Current

Non-current

Current

Non-current

Assets

Liabilities

Diesel fixed forwards

—


	Fair Values of Derivative Instruments
	At December 31, 2017
	Other		Other		Other		Other
	Current		Non-current		Current		Non-current
	Assets		Assets		Liabilities		Liabilities
A$ operating fixed forwards	$	—	$	—	$	1	$	—
Diesel fixed forwards		6		—		—		—
	$	6	$	—	$	1	$	—

As of September 30, 2018 and December 31, 2017, all hedging instruments held by the Company were subject to enforceable master netting arrangements held by various financial institutions. In general, the terms of the Company’s agreements provide for offsetting of amounts payable or receivable between it and the counterparty, at the election of both parties, for transactions that occur on the same date and in the same currency. The Company’s agreements also provide that in the event of an early termination, the counterparties have the right to offset amounts owed or owing under that and any other agreement with the same counterparty. The Company’s accounting policy is to not offset these positions in its accompanying balance sheets. As of September 30, 2018 and December 31, 2017, the potential effect of netting derivative assets against liabilities due to the master netting agreement was not significant.

The following table shows the effect of cash flow hedge accounting in the Company’s Condensed Consolidated Statements of Operations.


	(Gain) Loss Recognized from Cash Flow Hedges
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Total Costs applicable to sales	$	995	$	1,053	$	2,989	$	3,009
Amount of (gain) loss reclassified from Accumulated other comprehensive income (loss) into income (loss) from foreign currency hedging instruments	$	1	$	5	$	6	$	20
Amount of (gain) loss reclassified from Accumulated other comprehensive income (loss) into income (loss) from diesel hedging instruments	$	(2)	$	—	$	(6)	$	3
Total Interest expense, net	$	51	$	56	$	153	$	187
Amount of (gain) loss reclassified from Accumulated other comprehensive income (loss) into income (loss) from discontinued interest rate hedging instruments	$	2	$	2	$	8	$	7

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

The following table shows the location and amount of (gains) losses reported in the Company’s Condensed Consolidated Financial Statements related to the Company’s hedges.


	Foreign Currency				Diesel Fixed				Interest
	Exchange Contracts				Forward Contracts				Rate Contracts
	2018		2017		2018		2017		2018		2017
For the three months ended September 30,
Cash flow hedging relationships:
(Gain) loss recognized in Other comprehensive income (loss)	$	—	$	(1)	$	(3)	$	(5)	$	—	$	—
(Gain) loss reclassified from Accumulated other comprehensive income (loss) into income (loss)	$	1	$	5	$	(2)	$	—	$	2	$	2
For the nine months ended September 30,
Cash flow hedging relationships:
(Gain) loss recognized in Other comprehensive income (loss)	$	—	$	(5)	$	(8)	$	1	$	—	$	—
(Gain) loss reclassified from Accumulated other comprehensive income (loss) into income (loss)	$	6	$	20	$	(6)	$	3	$	8	$	7

Over the next 12 months, the Company expects to reclassify from Accumulated other comprehensive income (loss) to income a loss of approximately $6, net of tax, related to unrealized hedge losses.

Batu Hijau Contingent Consideration

Consideration received by the Company in conjunction with the sale of PT Newmont Nusa Tenggara included the Contingent Payment and the Elang Development deferred payment deeds, which were determined to be financial instruments that met the definition of a derivative, but do not qualify for hedge accounting, under ASC 815. See Note 15 for additional information. Contingent consideration of $23 was included in Other non-current assets in the Company's Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017.

Provisional Gold and Copper Sales

The Company’s provisional gold and copper concentrate sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the gold and copper concentrates at the prevailing indices’ prices at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each period prior to final settlement.

The impact to Sales from revenue recognized due to the changes in the final pricing is a (decrease) increase of $(9) and $8 for the three months ended September 30, 2018 and 2017, respectively, and a (decrease) increase of $(17) and $18 for the nine months ended September 30, 2018 and 2017, respectively.

At September 30, 2018, Newmont had gold and copper sales of 113,000 ounces and 18 million pounds priced at an average of $1,190 per ounce and $2.80 per pound, respectively, subject to final pricing over the next several months.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 17 INVESTMENTS


	At September 30, 2018
	Fair Value/
	Equity Basis (1)
Current:
Marketable equity securities	$	58

Non-current:
Marketable equity securities:
Continental Gold Inc.	$	76
Warrants		15
Other marketable equity securities		10
		101

Other investments		7

Equity method investments:
TMAC Resources Inc. (28.68%)		100
Maverix Metals Inc. (27.85%)		80
Minera La Zanja S.R.L. (46.94%)		43
		223
	$	331

Non-current restricted investments: (2)
Marketable debt securities (3)	$	52
Other assets		6
	$	58

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	At December 31, 2017
	Cost/Equity		Unrealized				Fair Value/
	Basis		Gain		Loss		Equity Basis (1)
Current:
Marketable equity securities	$	38	$	32	$	(8)	$	62

Non-current:
Marketable equity securities:
Continental Gold Inc.	$	109	$	—	$	(8)	$	101
Warrants		7		—		—		7
Other marketable equity securities		4		—		(2)		2
		120		—		(10)		110

Other investments		5		—		—		5

Equity method investments:
TMAC Resources Inc. (28.79%)		115		—		—		115
Minera La Zanja S.R.L. (46.94%)		50		—		—		50
		165		—		—		165
	$	290	$	—	$	(10)	$	280

Non-current restricted investments: (2)
Marketable debt securities	$	58	$	—	$	(3)	$	55
Other assets		8		1		—		9
	$	66	$	1	$	(3)	$	64

⁽¹⁾

Subsequent to the adoption of ASU No. 2016-01 on January 1, 2018, unrealized gains and losses related to marketable equity securities are recorded in Other income, net. Previously, gains and losses related to unrealized marketable equity securities were recorded in Other comprehensive income (loss).

⁽²⁾

Non-current restricted investments are legally pledged for purposes of settling reclamation and remediation obligations and are included in Other non-current assets. For further information regarding these amounts, see Note 5.

⁽³⁾

There were nominal unrealized gains or losses recorded in Accumulated other comprehensive income (loss) as of September 30, 2018, related to marketable debt securities.

In June 2018, Newmont sold $11 of restricted marketable debt securities as a result of remediation work completed at the Midnite Mine.

In June 2018, Newmont exchanged certain royalty interests for cash consideration of $17, received in July, and non-cash consideration comprised of 60 million common shares in Maverix and 10 million common share warrants in Maverix, with fair values upon closing of $78 and $5, respectively. Following the transaction, Newmont held a 27.98% equity ownership in Maverix. The Company determined the Maverix investment qualified as an equity method investment.

NOTE 18 INVENTORIES


	At September 30,		At December 31,
	2018		2017
Materials and supplies	$	441	$	416
In-process		138		131
Concentrate and copper cathode		95		83
Precious metals		39		49
	$	713	$	679

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 19 STOCKPILES AND ORE ON LEACH PADS


	At September 30,		At December 31,
	2018		2017
Current:
Stockpiles	$	327	$	330
Ore on leach pads		341		346
	$	668	$	676
Non-current:
Stockpiles	$	1,473	$	1,502
Ore on leach pads		405		346
	$	1,878	$	1,848


	At September 30,		At December 31,
	2018		2017
Stockpiles and ore on leach pads:
Carlin	$	443	$	441
Phoenix		68		68
Twin Creeks		337		340
Long Canyon		40		34
CC&V		325		314
Yanacocha		252		270
Merian		32		25
Boddington		447		431
Tanami		2		4
Kalgoorlie		123		125
Ahafo		401		409
Akyem		76		63
	$	2,546	$	2,524

During the three and nine months ended September 30, 2018, the Company recorded write-downs of $59 and $211, respectively, classified as components of Costs applicable to sales, and write-downs of $19 and $76, respectively, classified as components of Depreciation and amortization to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs during the three months ended September 30, 2018, $52 is related to Carlin, of which $29 is related to Emigrant as discussed in Note 6, $6 to Twin Creeks, $7 to CC&V and $13 to Yanacocha. Of the write-downs during the nine months ended September 30, 2018, $109 is related to Carlin, $39 to Twin Creeks, $7 to CC&V, $39 to Yanacocha, $46 to Ahafo and $47 to Akyem.

During the three and nine months ended September 30, 2017, the Company recorded write-downs of $60 and $146, respectively, classified as components of Costs applicable to sales, and write-downs of $23 and $54, respectively, classified as components of Depreciation and amortization to reduce the carrying value of stockpiles and ore on leach pads to net realizable value. Of the write-downs during the three months ended September 30, 2017, $28 was related to Carlin, $16 to Twin Creeks, $28 to Yanacocha and $11 to Akyem. Of the write-downs during the nine months ended September 30, 2017, $62 was related to Carlin, $32 to Twin Creeks, $69 to Yanacocha, $18 to Ahafo and $19 to Akyem.

NOTE 20 DEBT

Scheduled minimum debt repayments are $- for the remainder of 2018, $626 in 2019, $- in 2020, $- in 2021, $992 in 2022 and $2,474 thereafter.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 21 LEASE AND OTHER FINANCING OBLIGATIONS

Scheduled minimum capital lease repayments are $1 in 2018, $3 in 2019, $1 in 2020, $1 in 2021, $1 in 2022 and $1 thereafter.

In December 2017, the Company began the early phases of the Tanami Power project which includes the construction of a gas pipeline to the Tanami site, and construction and operation of two on-site power stations under agreements that qualify for build-to-suit lease accounting. As of September 30, 2018 and December 31, 2017, the financing obligations under the build-to-suit arrangements were $140 and $14, of which $17 was classified as current as of September 30, 2018.

NOTE 22 OTHER LIABILITIES


	At September 30,		At December 31,
	2018		2017
Other current liabilities:
Accrued operating costs	$	129	$	124
Reclamation and remediation liabilities		103		103
Accrued capital expenditures		65		77
Accrued interest		62		52
Royalties		30		63
Holt royalty obligation		12		15
Taxes other than income and mining		6		7
Derivative instruments		—		1
Other		13		20
	$	420	$	462

Other non-current liabilities:
Holt royalty obligation	$	153	$	228
Galore Creek deferred payments		88		—
Income and mining taxes		45		47
Power supply agreements		29		32
Social development obligations		22		22
Other		11		13
	$	348	$	342

NOTE 23 RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)


					Pension and		Unrealized Gain
	Unrealized Gain		Foreign		Other		(Loss) on
	(Loss) on		Currency		Post-retirement		Cash flow
	Marketable		Translation		Benefit		Hedge
	Securities, net		Adjustments		Adjustments		Instruments		Total
Balance at December 31, 2017	$	(116)	$	130	$	(208)	$	(98)	$	(292)
Cumulative effect adjustment of adopting ASU No. 2016-01		115		—		—		—		115
Net current-period other comprehensive income (loss):
Change in other comprehensive income (loss) before reclassifications		1		—		—		6		7
Reclassifications from accumulated other comprehensive income (loss)		—		—		14		6		20
Other comprehensive income (loss)		1		—		14		12		27
Balance at September 30, 2018	$	—	$	130	$	(194)	$	(86)	$	(150)

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)								Affected Line Item in the Condensed Consolidated Statements of Operations
	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Marketable securities adjustments:
Sale of marketable securities	$	—	$	(5)	$	—	$	(5)	Other income, net
Total before tax		—		(5)		—		(5)
Tax		—		—		—		—
Net of tax	$	—	$	(5)	$	—	$	(5)

Pension and other post-retirement benefit adjustments:
Amortization	$	6	$	6	$	18	$	16	Other income, net
Settlements		—		1		—		5	Other income, net
Total before tax		6		7		18		21
Tax		(1)		(2)		(4)		(7)
Net of tax	$	5	$	5	$	14	$	14

Hedge instruments adjustments:
Operating cash flow hedges	$	(1)	$	5	$	—	$	23	Costs applicable to sales
Interest rate contracts		2		2		8		7	Interest expense, net
Total before tax		1		7		8		30
Tax		—		(2)		(2)		(10)
Net of tax	$	1	$	5	$	6	$	20
Total reclassifications for the period, net of tax	$	6	$	5	$	20	$	29

NOTE 24 NET CHANGE IN OPERATING ASSETS AND LIABILITIES

Net cash provided by (used in) operating activities of continuing operations attributable to the net change in operating assets and liabilities is composed of the following:


	Nine Months Ended September 30,
	2018		2017
Decrease (increase) in operating assets:
Trade and other accounts receivables	$	(18)	$	46
Inventories, stockpiles and ore on leach pads		(274)		(145)
Other assets		(23)		(11)
Increase (decrease) in operating liabilities:
Accounts payable		(78)		(1)
Reclamation and remediation liabilities		(51)		(53)
Other accrued liabilities		(223)		(289)
	$	(667)	$	(453)

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 25 CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The following Condensed Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10(e) of Regulation S-X resulting from the inclusion of Newmont USA Limited (“Newmont USA”), a wholly-owned subsidiary of Newmont, as a co-registrant with Newmont on debt securities issued under a shelf registration statement on Form S-3 filed under the Securities Act of 1933 under which securities of Newmont (including debt securities guaranteed by Newmont USA) may be issued (the “Shelf Registration Statement”). In accordance with Rule 3-10(e) of Regulation S-X, Newmont USA, as the subsidiary guarantor, is 100% owned by Newmont, the guarantees are full and unconditional, and no other subsidiary of Newmont guaranteed any security issued under the Shelf Registration Statement. There are no restrictions on the ability of Newmont or Newmont USA to obtain funds from its subsidiaries by dividend or loan.


	Three Months Ended September 30, 2018
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Statement of Operation	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Sales	$	—	$	417	$	1,309	$	—	$	1,726
Costs and expenses:
Costs applicable to sales (1)		—		293		702		—		995
Depreciation and amortization		1		85		213		—		299
Reclamation and remediation		—		4		27		—		31
Exploration		—		13		35		—		48
Advanced projects, research and development		—		8		29		—		37
General and administrative		—		20		39		—		59
Impairment of long-lived assets		—		336		30		—		366
Other expense, net		—		—		5		—		5
		1		759		1,080		—		1,840
Other income (expense):
Other income, net		(32)		9		60		—		37
Interest income - intercompany		16		14		12		(42)		—
Interest expense - intercompany		(10)		—		(32)		42		—
Interest expense, net		(45)		(3)		(3)		—		(51)
		(71)		20		37		—		(14)
Income (loss) before income and mining tax and other items		(72)		(322)		266		—		(128)
Income and mining tax benefit (expense)		16		79		(98)		—		(3)
Equity income (loss) of affiliates		(89)		(13)		(9)		102		(9)
Net income (loss) from continuing operations		(145)		(256)		159		102		(140)
Net income (loss) from discontinued operations		—		—		16		—		16
Net income (loss)		(145)		(256)		175		102		(124)
Net loss (income) attributable to noncontrolling interests:		—		—		(21)		—		(21)
Net income (loss) attributable to Newmont stockholders	$	(145)	$	(256)	$	154	$	102	$	(145)
Comprehensive income (loss)	$	(133)	$	(246)	$	165	$	102	$	(112)
Comprehensive loss (income) attributable to noncontrolling interests		—		—		(21)		—		(21)
Comprehensive income (loss) attributable to Newmont stockholders	$	(133)	$	(246)	$	144	$	102	$	(133)

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	Three Months Ended September 30, 2017
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Statement of Operation	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Sales	$	—	$	494	$	1,385	$	—	$	1,879
Costs and expenses:
Costs applicable to sales (1)		—		318		735		—		1,053
Depreciation and amortization		1		94		233		—		328
Reclamation and remediation		—		3		23		—		26
Exploration		—		10		38		—		48
Advanced projects, research and development		—		10		31		—		41
General and administrative		—		18		40		—		58
Impairment of long-lived assets		—		—		—		—		—
Other expense, net		—		—		1		—		1
		1		453		1,101		—		1,555
Other income (expense):
Other income, net		11		2		(3)		—		10
Interest income - intercompany		67		11		11		(89)		—
Interest expense - intercompany		(11)		—		(78)		89		—
Interest expense, net		(51)		(5)		—		—		(56)
		16		8		(70)		—		(46)
Income (loss) before income and mining tax and other items		15		49		214		—		278
Income and mining tax benefit (expense)		(5)		(19)		(49)		—		(73)
Equity income (loss) of affiliates		196		(52)		(3)		(140)		1
Net income (loss) from continuing operations		206		(22)		162		(140)		206
Net income (loss) from discontinued operations		—		—		(7)		—		(7)
Net income (loss)		206		(22)		155		(140)		199
Net loss (income) attributable to noncontrolling interests		—		—		7		—		7
Net income (loss) attributable to Newmont stockholders	$	206	$	(22)	$	162	$	(140)	$	206
Comprehensive income (loss)	$	232	$	(13)	$	146	$	(140)	$	225
Comprehensive loss (income) attributable to noncontrolling interests		—		—		7		—		7
Comprehensive income (loss) attributable to Newmont stockholders	$	232	$	(13)	$	153	$	(140)	$	232

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2018
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Statement of Operation	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Sales	$	—	$	1,348	$	3,857	$	—	$	5,205
Costs and expenses:
Costs applicable to sales (1)		—		898		2,091		—		2,989
Depreciation and amortization		3		247		629		—		879
Reclamation and remediation		—		11		85		—		96
Exploration		—		39		103		—		142
Advanced projects, research and development		—		22		85		—		107
General and administrative		—		61		120		—		181
Impairment of long-lived assets		—		336		30		—		366
Other expense, net		—		2		27		—		29
		3		1,616		3,170		—		4,789
Other income (expense):
Other income, net		(29)		36		190		—		197
Interest income - intercompany		67		36		33		(136)		—
Interest expense - intercompany		(29)		—		(107)		136		—
Interest expense, net		(142)		(5)		(6)		—		(153)
		(133)		67		110		—		44
Income (loss) before income and mining tax and other items		(136)		(201)		797		—		460
Income and mining tax benefit (expense)		29		58		(213)		—		(126)
Equity income (loss) of affiliates		446		(90)		(25)		(356)		(25)
Net income (loss) from continuing operations		339		(233)		559		(356)		309
Net income (loss) from discontinued operations		—		—		56		—		56
Net income (loss)		339		(233)		615		(356)		365
Net loss (income) attributable to noncontrolling interests		—		—		(26)		—		(26)
Net income (loss) attributable to Newmont stockholders	$	339	$	(233)	$	589	$	(356)	$	339
Comprehensive income (loss)	$	366	$	(223)	$	605	$	(356)	$	392
Comprehensive loss (income) attributable to noncontrolling interests		—		—		(26)		—		(26)
Comprehensive income (loss) attributable to Newmont stockholders	$	366	$	(223)	$	579	$	(356)	$	366

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2017
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Statement of Operation	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Sales	$	—	$	1,435	$	4,009	$	—	$	5,444
Costs and expenses:
Costs applicable to sales (1)		—		901		2,108		—		3,009
Depreciation and amortization		3		259		676		—		938
Reclamation and remediation		—		10		88		—		98
Exploration		—		32		103		—		135
Advanced projects, research and development		—		13		86		—		99
General and administrative		—		53		118		—		171
Impairment of long-lived assets		—		—		3		—		3
Other expense, net		—		8		21		—		29
		3		1,276		3,203		—		4,482
Other income (expense):
Other income, net		37		5		(10)		—		32
Interest income - intercompany		114		35		33		(182)		—
Interest expense - intercompany		(33)		(4)		(145)		182		—
Interest expense, net		(172)		(8)		(7)		—		(187)
		(54)		28		(129)		—		(155)
Income (loss) before income and mining tax and other items		(57)		187		677		—		807
Income and mining tax benefit (expense)		20		(41)		(329)		—		(350)
Equity income (loss) of affiliates		465		(286)		(16)		(167)		(4)
Net income (loss) from continuing operations		428		(140)		332		(167)		453
Net income (loss) from discontinued operations		—		—		(45)		—		(45)
Net income (loss)		428		(140)		287		(167)		408
Net loss (income) attributable to noncontrolling interests		—		—		20		—		20
Net income (loss) attributable to Newmont stockholders	$	428	$	(140)	$	307	$	(167)	$	428
Comprehensive income (loss)	$	470	$	(122)	$	269	$	(167)	$	450
Comprehensive loss (income) attributable to noncontrolling interests		—		—		20		—		20
Comprehensive income (loss) attributable to Newmont stockholders	$	470	$	(122)	$	289	$	(167)	$	470

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2018
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Statement of Cash Flows	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Operating activities:
Net cash provided by (used in) operating activities of continuing operations	$	(123)	$	339	$	879	$	—	$	1,095
Net cash provided by (used in) operating activities of discontinued operations		—		—		(8)		—		(8)
Net cash provided by (used in) operating activities		(123)		339		871		—		1,087
Investing activities:
Additions to property, plant and mine development		—		(203)		(560)		—		(763)
Acquisitions, net		—		—		(138)		—		(138)
Proceeds from sales of other assets		—		—		23		—		23
Purchases of investments		(4)		—		(13)		—		(17)
Proceeds from sales of investments		—		12		4		—		16
Other		—		1		(6)		—		(5)
Net cash provided by (used in) investing activities		(4)		(190)		(690)		—		(884)
Financing activities:
Dividends paid to common stockholders		(226)		—		—		—		(226)
Distributions to noncontrolling interests		—		—		(107)		—		(107)
Repurchase of common stock		(96)		—		—		—		(96)
Funding from noncontrolling interests		—		—		77		—		77
Proceeds from sale of noncontrolling interests		—		—		48		—		48
Payments for withholding of employee taxes related to stock-based compensation		—		(39)		—		—		(39)
Repayment of debt		—		—		(3)		—		(3)
Net intercompany borrowings (repayments)		449		(109)		(340)		—		—
Other		—		(1)		1		—		—
Net cash provided by (used in) financing activities		127		(149)		(324)		—		(346)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		—		—		(4)		—		(4)
Net change in cash, cash equivalents and restricted cash		—		—		(147)		—		(147)
Cash, cash equivalents and restricted cash at beginning of period		—		—		3,298		—		3,298
Cash, cash equivalents and restricted cash at end of period	$	—	$	—	$	3,151	$	—	$	3,151

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	—	$	—	$	3,068	$	—	$	3,068
Restricted cash included in Other current assets		—		—		1		—		1
Restricted cash included in Other noncurrent assets		—		—		82		—		82
Total cash, cash equivalents and restricted cash	$	—	$	—	$	3,151	$	—	$	3,151

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	Nine Months Ended September 30, 2017
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Statement of Cash Flows	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Operating activities:
Net cash provided by (used in) operating activities of continuing operations	$	(307)	$	375	$	1,323	$	—	$	1,391
Net cash provided by (used in) operating activities of discontinued operations		—		—		(12)		—		(12)
Net cash provided by (used in) operating activities		(307)		375		1,311		—		1,379
Investing activities:
Additions to property, plant and mine development		—		(171)		(386)		—		(557)
Acquisitions, net		—		—		—		—		—
Proceeds from sales of other assets		—		—		5		—		5
Purchases of investments		(109)		—		(4)		—		(113)
Proceeds from sales of investments		—		—		34		—		34
Other		—		2		11		—		13
Net cash provided by (used in) investing activities		(109)		(169)		(340)		—		(618)
Financing activities:
Dividends paid to common stockholders		(94)		—		—		—		(94)
Distributions to noncontrolling interests		—		—		(119)		—		(119)
Repurchase of common stock		—		—		—		—		—
Funding from noncontrolling interests		—		—		70		—		70
Proceeds from sale of noncontrolling interests		—		—		—		—		—
Payments for withholding of employee taxes related to stock-based compensation		—		(13)		—		—		(13)
Repayment of debt		(379)		(2)		(2)		—		(383)
Net intercompany borrowings (repayments)		892		(192)		(700)		—		—
Other		(3)		—		—		—		(3)
Net cash provided by (used in) financing activities		416		(207)		(751)		—		(542)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		—		—		3		—		3
Net change in cash, cash equivalents and restricted cash		—		(1)		223		—		222
Cash, cash equivalents and restricted cash at beginning of period		—		1		2,781		—		2,782
Cash, cash equivalents and restricted cash at end of period	$	—	$	—	$	3,004	$	—	$	3,004

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	—	$	—	$	2,969	$	—	$	2,969
Restricted cash included in Other current assets		—		—		—		—		—
Restricted cash included in Other noncurrent assets		—		—		35		—		35
Total cash, cash equivalents and restricted cash	$	—	$	—	$	3,004	$	—	$	3,004

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	At September 30, 2018
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Balance Sheet	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Assets:
Cash and cash equivalents	$	—	$	—	$	3,068	$	—	$	3,068
Trade receivables		—		17		159		—		176
Other accounts receivables		—		1		95		—		96
Intercompany receivable		6,190		4,788		8,076		(19,054)		—
Investments		—		—		58		—		58
Inventories		—		196		517		—		713
Stockpiles and ore on leach pads		—		204		464		—		668
Other current assets		—		37		119		—		156
Current assets		6,190		5,243		12,556		(19,054)		4,935
Property, plant and mine development, net		15		2,743		9,481		(30)		12,209
Investments		86		5		240		—		331
Investments in subsidiaries		13,048		(481)		—		(12,567)		—
Stockpiles and ore on leach pads		—		640		1,238		—		1,878
Deferred income tax assets		98		—		502		—		600
Non-current intercompany receivable		701		628		7		(1,336)		—
Other non-current assets		—		248		358		—		606
Total assets	$	20,138	$	9,026	$	24,382	$	(32,987)	$	20,559
Liabilities:
Accounts payable	$	—	$	65	$	228	$	—	$	293
Intercompany payable		5,426		2,473		11,155		(19,054)		—
Employee-related benefits		—		117		158		—		275
Income and mining taxes		—		14		29		—		43
Lease and other financing obligations		—		1		19		—		20
Other current liabilities		62		118		240		—		420
Current liabilities		5,488		2,788		11,829		(19,054)		1,051
Debt		4,043		—		—		—		4,043
Reclamation and remediation liabilities		—		319		2,066		—		2,385
Deferred income tax liabilities		—		123		491		—		614
Employee-related benefits		3		200		165		—		368
Lease and other financing obligations		—		3		124		—		127
Non-current intercompany payable		7		—		1,359		(1,366)		—
Other non-current liabilities		—		14		334		—		348
Total liabilities		9,541		3,447		16,368		(20,420)		8,936
Contingently redeemable noncontrolling interest		—		—		49		—		49
Equity:
Newmont stockholders’ equity		10,597		5,579		6,988		(12,567)		10,597
Noncontrolling interests		—		—		977		—		977
Total equity		10,597		5,579		7,965		(12,567)		11,574
Total liabilities and equity	$	20,138	$	9,026	$	24,382	$	(32,987)	$	20,559

Table of Contents

NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)


	At December 31, 2017
	(Issuer)		(Guarantor)		(Non-Guarantor)				Newmont
	Newmont								Mining
	Mining		Newmont		Other				Corporation
Condensed Consolidating Balance Sheet	Corporation		USA		Subsidiaries		Eliminations		Consolidated
Assets:
Cash and cash equivalents	$	—	$	—	$	3,259	$	—	$	3,259
Trade receivables		—		18		106		—		124
Other accounts receivables		—		—		113		—		113
Intercompany receivable		2,053		4,601		3,484		(10,138)		—
Investments		—		—		62		—		62
Inventories		—		181		498		—		679
Stockpiles and ore on leach pads		—		196		480		—		676
Other current assets		—		38		115		—		153
Current assets		2,053		5,034		8,117		(10,138)		5,066
Property, plant and mine development, net		17		3,082		9,266		(27)		12,338
Investments		106		4		170		—		280
Investments in subsidiaries		12,012		(311)		—		(11,701)		—
Stockpiles and ore on leach pads		—		648		1,200		—		1,848
Deferred income tax assets		84		5		460		—		549
Non-current intercompany receivable		1,700		401		7		(2,108)		—
Other non-current assets		—		255		310		—		565
Total assets	$	15,972	$	9,118	$	19,530	$	(23,974)	$	20,646
Liabilities:
Accounts payable	$	—	$	83	$	292	$	—	$	375
Intercompany payable		1,338		2,145		6,655		(10,138)		—
Employee-related benefits		—		143		166		—		309
Income and mining taxes		—		18		230		—		248
Lease and other financing obligations		—		1		3		—		4
Other current liabilities		52		163		247		—		462
Current liabilities		1,390		2,553		7,593		(10,138)		1,398
Debt		4,040		—		—		—		4,040
Reclamation and remediation liabilities		—		309		2,036		—		2,345
Deferred income tax liabilities		—		121		474		—		595
Employee-related benefits		—		222		164		—		386
Lease and other financing obligations		—		4		17		—		21
Non-current intercompany payable		7		—		2,128		(2,135)		—
Other non-current liabilities		—		18		324		—		342
Total liabilities		5,437		3,227		12,736		(12,273)		9,127
Contingently redeemable noncontrolling interest		—		—		—		—		—
Equity:
Newmont stockholders’ equity		10,535		5,891		5,810		(11,701)		10,535
Noncontrolling interests		—		—		984		—		984
Total equity		10,535		5,891		6,794		(11,701)		11,519
Total liabilities and equity	$	15,972	$	9,118	$	19,530	$	(23,974)	$	20,646

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

NOTE 26 COMMITMENTS AND CONTINGENCIES

General

Estimated losses from contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the contingency and estimated range of loss, if determinable, is made in the financial statements when it is at least reasonably possible that a material loss could be incurred.

Operating Segments

The Company’s operating and reportable segments are identified in Note 3. Except as noted in this paragraph, all of the Company’s commitments and contingencies specifically described herein are included in Corporate and Other. The Yanacocha matters relate to the South America reportable segment. The Fronteer matters relate to the North America reportable segment.

Environmental Matters

Refer to Note 5 for further information regarding reclamation and remediation. Details about certain of the more significant matters are discussed below.

Newmont USA Limited - 100% Newmont Owned

Ross-Adams mine site. By letter dated June 5, 2007, the U.S. Forest Service (“USFS”) notified Newmont that it had expended approximately $0.3 in response costs to address environmental conditions at the Ross-Adams mine in Prince of Wales, Alaska, and requested Newmont USA Limited pay those costs and perform an Engineering Evaluation/Cost Analysis (“EE/CA”) to assess what future response activities might need to be completed at the site. Newmont agreed to perform the EE/CA pursuant to the requirements of an Administrative Settlement Agreement and Order on Consent (“ASAOC”) between the USFS and Newmont. The EE/CA was provided to the USFS in April 2015. During the first quarter of 2016, the USFS confirmed approval of the EE/CA, and Newmont issued written notice to the USFS certifying that all requirements of the ASAOC had been completed. During the third quarter of 2016, Newmont received a notice of completion of work per the ASAOC from the USFS, which finalized the ASAOC. The USFS issued an Action Memorandum in April 2018 to select the preferred Removal Action alternative identified in the EE/CA. Newmont is continuing to negotiate the terms of a future agreement with the USFS for Newmont to implement the approved Removal Action. No assurances can be made at this time with respect to the outcome of such negotiations and Newmont cannot predict the likelihood of additional expenditures related to this matter.

Dawn Mining Company LLC (“Dawn”) - 51% Newmont Owned

Midnite mine site and Dawn mill site. Dawn previously leased an open pit uranium mine, currently inactive, on the Spokane Indian Reservation in the State of Washington. The mine site is subject to regulation by agencies of the U.S. Department of Interior (the Bureau of Indian Affairs and the Bureau of Land Management), as well as the U.S. Environmental Protection Agency (“EPA”).

As per the Consent Decree approved by the U.S. District Court for the Eastern District of Washington on January 17, 2012, the following actions were required of Newmont, Dawn, the Department of the Interior and the EPA: (i) Newmont and Dawn would design, construct and implement the cleanup plan selected by the EPA in 2006 for the Midnite mine site; (ii) Newmont and Dawn would reimburse the EPA for its costs associated with overseeing the work; (iii) the Department of the Interior would contribute a lump sum amount toward past EPA costs and future costs related to the cleanup of the Midnite mine site; (iv) Newmont and Dawn

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

would be responsible for all other EPA oversight costs and Midnite mine site cleanup costs; and (v) Newmont would post a surety bond for work at the site.

During 2012, the Department of Interior contributed its share of past EPA costs and future costs related to the cleanup of the Midnite mine site in a lump sum payment of $42, which Newmont classified as restricted assets with interest on the Condensed Consolidated Balance Sheets for all periods presented. In 2016, Newmont completed the remedial design process (with the exception of the new water treatment plant (“WTP”) design which was awaiting the approval of the new National Pollutant Discharge Elimination System (“NPDES”) permit). Subsequently, the new NPDES permit was received in 2017 and the WTP design commenced in 2018. Newmont is managing the remediation project to implement Phase 1 remedial actions during the 2018 construction season with a focus on preparations to backfill Pit 4. In June 2018, $11 was released from the trust account for remedial work completed.

The Dawn mill site is regulated by the Washington Department of Health and is in the process of being closed. Remediation at the Dawn mill site began in 2013. The Tailing Disposal Area 1-4 reclamation earthworks component was completed during 2017 with the embankment erosion protection completed in the second quarter of 2018. The remaining closure activity will consist primarily of addressing groundwater issues.

The remediation liability for the Midnite mine site and Dawn mill site is approximately $163 at September 30, 2018.

Other Legal Matters

Minera Yanacocha S.R.L. – 51.35% Newmont Owned

Administrative Actions. The Peruvian government agency responsible for environmental evaluation and inspection, Organismo Evaluacion y Fiscalizacion Ambiental (“OEFA”), conducts periodic reviews of the Yanacocha site. In 2011, 2012, 2013, 2015, 2016, 2017 and 2018, OEFA issued notices of alleged violations of OEFA standards to Yanacocha and Conga relating to past inspections. OEFA has resolved some alleged violations with minimal or no findings. In 2015 and 2016, the water authority of Cajamarca issued notices of alleged regulatory violations, and resolved some allegations in 2017 with no findings. The experience with OEFA and the water authority is that in the case of a finding of violation, remedial action is often the outcome rather than a significant fine. The alleged OEFA violations currently range from zero to 46,500 units and the water authority alleged violations range from zero to 59 units, with each unit having a potential fine equivalent to approximately $.001245 based on current exchange rates ($0 to $60). Yanacocha and Conga are responding to all notices of alleged violations, but cannot reasonably predict the outcome of the agency allegations.

Conga Project Constitutional Claim. On October 18, 2012, Marco Antonio Arana Zegarra filed a constitutional claim against the Ministry of Energy and Mines and Yanacocha requesting the Court to order the suspension of the Conga project as well as to declare not applicable the October 27, 2010, directorial resolution approving the Conga project Environmental Impact Assessment (“EIA”). On October 23, 2012, a Cajamarca judge dismissed the claims based on formal grounds finding that: (i) plaintiffs had not exhausted previous administrative proceedings; (ii) the directorial resolution approving the Conga EIA is valid, and was not challenged when issued in the administrative proceedings; (iii) there was inadequate evidence to conclude that the Conga project is a threat to the constitutional right of living in an adequate environment and; (iv) the directorial resolution approving the Conga project EIA does not guarantee that the Conga project will proceed, so there was no imminent threat to be addressed by the Court. The plaintiffs appealed the dismissal of the case. The Civil Court of the Superior Court of Cajamarca confirmed the above mentioned resolution and the plaintiff presented an appeal. On March 13, 2015, the Constitutional Court published its ruling stating that the case should be sent back to the first court with an order to formally admit the case and start the judicial process in order to review the claim and the proofs presented by the plaintiff. Yanacocha has answered the claim. Neither the Company nor Yanacocha can reasonably predict the outcome of this litigation.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Yanacocha Tax Dispute. In 2000, Yanacocha paid Buenaventura and Minas Conga S.R.L. a total of $29 to assume their respective contractual positions in mining concession agreements with Chaupiloma Dos de Cajamarca S.M.R.L. The contractual rights allowed Yanacocha the opportunity to conduct exploration on the concessions, but not a purchase of the concessions. The tax authority alleges that the payments to Buenaventura and Minas Conga S.R.L. were acquisitions of mining concessions requiring the amortization of the amounts under the Peru Mining Law over the life of the mine. Yanacocha expensed the amounts at issue in the initial year since the payments were not for the acquisition of a concession but rather these expenses represent the payment of an intangible and therefore, amortizable in a single year or proportionally for up to ten years according to Income Tax Law. In 2010, the tax court in Peru ruled in favor of Yanacocha and the tax authority appealed the issue to the judiciary. The first appellate court confirmed the ruling of the tax court in favor of Yanacocha. However, in November, 2015, a Superior Court in Peru made an appellate decision overturning the two prior findings in favor of Yanacocha. Yanacocha has appealed the Superior Court ruling to the Peru Supreme Court. The potential liability in this matter is in the form of fines and interest in an amount up to $83. While the Company has assessed that the likelihood of a ruling against Yanacocha in the Supreme Court as remote, it is not possible to fully predict the outcome of this litigation.

NWG Investments Inc. v. Fronteer Gold Inc.

In April 2011, Newmont acquired Fronteer Gold Inc. (“Fronteer”).

Fronteer acquired NewWest Gold Corporation (“NewWest Gold”) in September 2007. At the time of that acquisition, NWG Investments Inc. (“NWG”) owned approximately 86% of NewWest Gold and an individual named Jacob Safra owned or controlled 100% of NWG. Prior to its acquisition of NewWest Gold, Fronteer entered into a June 2007 lock-up agreement with NWG providing that, among other things, NWG would support Fronteer’s acquisition of NewWest Gold. At that time, Fronteer owned approximately 47% of Aurora Energy Resources Inc. (“Aurora”), which, among other things, had a uranium exploration project in Labrador, Canada.

NWG contends that, during the negotiations leading up to the lock-up agreement, Fronteer represented to NWG, among other things, that Aurora would commence uranium mining in Labrador by 2013, that this was a firm date, that Aurora faced no current environmental issues in Labrador and that Aurora’s competitors faced delays in commencing uranium mining. NWG further contends that it entered into the lock-up agreement and agreed to support Fronteer’s acquisition of NewWest Gold in reliance upon these purported representations. On October 11, 2007, less than three weeks after the Fronteer-NewWest Gold transaction closed, a member of the Nunatsiavut Assembly introduced a motion calling for the adoption of a moratorium on uranium mining in Labrador. On April 8, 2008, the Nunatsiavut Assembly adopted a three-year moratorium on uranium mining in Labrador. NWG contends that Fronteer was aware during the negotiations of the NWG/Fronteer lock-up agreement that the Nunatsiavut Assembly planned on adopting this moratorium and that its adoption would preclude Aurora from commencing uranium mining by 2013, but Fronteer nonetheless fraudulently induced NWG to enter into the lock-up agreement.

On September 24, 2012, NWG served a summons and complaint on the Company, and then amended the complaint to add Newmont Canada Holdings ULC as a defendant. The complaint also named Fronteer Gold Inc. and Mark O’Dea as defendants. The complaint sought rescission of the merger between Fronteer and NewWest Gold and $750 in damages. In August 2013 the Supreme Court of New York, New York County issued an order granting the defendants’ motion to dismiss on forum non conveniens. Subsequently, NWG filed a notice of appeal of the decision and then a notice of dismissal of the appeal on March 24, 2014.

On February 26, 2014, NWG filed a lawsuit in Ontario Superior Court of Justice against Fronteer Gold Inc., Newmont Mining Corporation, Newmont Canada Holdings ULC, Newmont FH B.V. and Mark O’Dea. The Ontario complaint is based upon substantially the same allegations contained in the New York lawsuit with claims for fraudulent and negligent misrepresentation. NWG seeks disgorgement of profits since the close of the NWG deal on September 24, 2007 and damages in the amount of C$1.2 billion. Newmont, along with other defendants, served the plaintiff with its statement of defense on October 17, 2014. Newmont intends to vigorously defend this matter, but cannot reasonably predict the outcome.

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NEWMONT MINING CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(dollars in millions, except per share, per ounce and per pound amounts)

Other Commitments and Contingencies

Newmont is from time to time involved in various legal proceedings related to its business. Except in the above described proceedings, management does not believe that adverse decisions in any pending or threatened proceeding or that amounts that may be required to be paid by reason thereof will have a material adverse effect on the Company’s financial condition or results of operations.

In connection with our investment in Galore Creek, Newmont will owe NovaGold Resources Inc. $75 upon the earlier of approval to construct a mine, mill and all related infrastructure for the Galore Creek project or the initiation of construction of a mine, mill or any related infrastructure. The amount due is non-interest bearing. The decision for an approval and commencement of construction is contingent on the results of a prefeasibility and feasibility study, neither of which have occurred. As such, this amount has not been accrued.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in millions, except per share, per ounce and per pound amounts)

The following Management’s Discussion and Analysis (“MD&A”) 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 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 Measures” beginning on page 70. References to “A$” refers to Australian currency and “C$” refers to Canadian currency.

This item should be read in conjunction with our interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this quarterly report. Additionally, the following discussion and analysis should be read in conjunction with Management’s Discussion and Analysis of Consolidated Financial Condition and Results of Operations and the consolidated financial statements included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2017 filed February 22, 2018 and revisions filed April 26, 2018 on Form 8-K.

Overview

Newmont is one of the world’s largest gold producers and is the only gold company included in the S&P 500 Index and Fortune 500. We have been included in the Dow Jones Sustainability Index-World for 12 consecutive years and have adopted the World Gold Council’s Conflict-Free Gold Policy. We are also engaged in the exploration for and acquisition of gold and copper properties. We have significant operations and/or assets in the United States (“U.S.”), Australia, Peru, Ghana and Suriname.

We continue to focus on improving safety and efficiency at our operations, maintaining leading environmental, social and governance practices, and building a stronger portfolio of longer-life, lower cost mines to generate the financial flexibility we need to fund our best projects, reduce debt, and return cash to shareholders.

During the third quarter of 2018, we purchased a 50% interest in the Galore Creek Partnership (“Galore Creek”) from NovaGold Resources Inc. for cash consideration of $100 as well as deferred payments of $100 and contingent payments of $75. Refer to Note 1 of the Condensed Consolidated Financial Statements for further details regarding this transaction. Additionally, in the third quarter of 2018, we purchased interests in Evrim Resources, Orosur Mining and Miranda Gold, totaling $8, to secure rights to highly prospective properties in Mexico and Colombia.

Consolidated Financial Results

The details of our Net income (loss) from continuing operations attributable to Newmont stockholders are set forth below:


	Three Months Ended
	September 30,				Increase
	2018		2017		(decrease)
Net income (loss) from continuing operations attributable to Newmont stockholders	$	(161)	$	213	$	(374)
Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted	$	(0.31)	$	0.39	$	(0.70)


	Nine Months Ended
	September 30,				Increase
	2018		2017		(decrease)
Net income (loss) from continuing operations attributable to Newmont stockholders	$	283	$	473	$	(190)
Net income (loss) from continuing operations attributable to Newmont stockholders per common share, diluted	$	0.53	$	0.88	$	(0.35)

The decreases in Net income (loss) from continuing operations attributable to Newmont stockholders for the three and nine months ended September 30, 2018, compared to the same periods in 2017, are primarily due to the impairment of long-lived assets

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related to certain exploration properties and the Emigrant operation in North America and lower production at various sites, including CC&V, Boddington, Akyem and Carlin, partially offset by lower income tax expense and a gain from the sale of our royalty portfolio in June 2018. The three month comparison was also negatively impacted by lower average realized gold prices. For discussion regarding variations in production volumes and unit cost metrics, see Results of Consolidated Operations below.

The details of our Sales are set forth below. See Note 4 to our Condensed Consolidated Financial Statements for additional information.


	Three Months Ended
	September 30,				Increase		Percent
	2018		2017		(decrease)		Change
Gold	$	1,656	$	1,799	$	(143)	(8)	%
Copper		70		80		(10)	(13)
	$	1,726	$	1,879	$	(153)	(8)	%


	Nine Months Ended
	September 30,				Increase		Percent
	2018		2017		(decrease)		Change
Gold	$	4,976	$	5,217	$	(241)	(5)	%
Copper		229		227		2	1
	$	5,205	$	5,444	$	(239)	(4)	%

The following analysis summarizes consolidated gold sales:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Consolidated gold sales:
Gross before provisional pricing	$	1,668	$	1,806	$	5,007	$	5,232
Provisional pricing mark-to-market		(5)		2		(10)		9
Gross after provisional pricing		1,663		1,808		4,997		5,241
Treatment and refining charges		(7)		(9)		(21)		(24)
Net	$	1,656	$	1,799	$	4,976	$	5,217
Consolidated gold ounces sold (thousands)		1,378		1,411		3,914		4,178
Average realized gold price (per ounce)(1):
Gross before provisional pricing	$	1,210	$	1,281	$	1,279	$	1,253
Provisional pricing mark-to-market		(4)		1		(3)		2
Gross after provisional pricing		1,206		1,282		1,276		1,255
Treatment and refining charges		(5)		(6)		(5)		(6)
Net	$	1,201	$	1,276	$	1,271	$	1,249

⁽¹⁾

Per ounce measures may not recalculate due to rounding.

The change in consolidated gold sales is due to:


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018 vs. 2017		2018 vs. 2017
Change in consolidated ounces sold	$	(41)	$	(330)
Change in average realized gold price		(104)		86
Change in treatment and refining charges		2		3
	$	(143)	$	(241)

The decrease in gold sales during the three months ended September 30, 2018, compared to the same period in 2017, is primarily due to lower average realized gold prices and lower production at various sites, including Carlin and CC&V. The decrease in gold sales during the nine months ended September 30, 2018, compared to the same period in 2017, is primarily due to lower

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production at various sites, including CC&V, Boddington, Akyem and Carlin, partially offset by higher average realized gold prices. For further discussion regarding changes in volumes, see Results of Consolidated Operations below.

The following analysis summarizes consolidated copper sales:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Consolidated copper sales:
Gross before provisional pricing	$	78	$	77	$	246	$	228
Provisional pricing mark-to-market		(4)		6		(7)		9
Gross after provisional pricing		74		83		239		237
Treatment and refining charges		(4)		(3)		(10)		(10)
Net	$	70	$	80	$	229	$	227
Consolidated copper pounds sold (millions)		28		26		82		84
Average realized copper price (per pound)(1):
Gross before provisional pricing	$	2.77	$	2.98	$	3.00	$	2.73
Provisional pricing mark-to-market		(0.14)		0.20		(0.08)		0.10
Gross after provisional pricing		2.63		3.18		2.92		2.83
Treatment and refining charges		(0.13)		(0.12)		(0.13)		(0.12)
Net	$	2.50	$	3.06	$	2.79	$	2.71

⁽¹⁾

Per pound measures may not recalculate due to rounding.

The change in consolidated copper sales is due to:


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2018 vs. 2017		2018 vs. 2017
Change in consolidated pounds sold	$	6	$	(5)
Change in average realized copper price		(15)		7
Change in treatment and refining charges		(1)		—
	$	(10)	$	2

The decrease in copper sales during the three months ended September 30, 2018, compared to the same period in 2017, is primarily due to lower average realized copper prices. Copper sales remained relatively flat during the nine months ended September 30, 2018, compared to the same period in 2017, as production volumes and average realized copper prices were in line with the prior year. For further discussion regarding changes in volumes, see Results of Consolidated Operations below.

The details of our Costs applicable to sales are set forth below. See Note 3 to our Condensed Consolidated Financial Statements for additional information.


	Three Months Ended
	September 30,				Increase		Percent
	2018		2017		(decrease)		Change
Gold	$	952	$	1,017	$	(65)	(6)	%
Copper		43		36		7	19
	$	995	$	1,053	$	(58)	(6)	%


	Nine Months Ended
	September 30,				Increase		Percent
	2018		2017		(decrease)		Change
Gold	$	2,853	$	2,890	$	(37)	(1)	%
Copper		136		119		17	14
	$	2,989	$	3,009	$	(20)	(1)	%

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The decrease in Costs applicable to sales for gold during the three months ended September 30, 2018, compared to the same period in 2017, is primarily due to lower production at various sites and a favorable Australian dollar foreign currency exchange rate, partially offset by higher oil prices. Costs applicable to sales for gold during the nine months ended September 30, 2018, remained relatively flat, compared to the same period in 2017, as lower production at various sites was largely offset by higher stockpile and leach pad inventory adjustments and higher oil prices.

The increases in Costs applicable to sales for copper during the three and nine months ended September 30, 2018, compared to the same periods in 2017, are primarily due to a higher co-product allocation of costs to copper based on a higher relative copper sales value.

For discussion regarding variations in operations, see Results of Consolidated Operations below.

The details of our Depreciation and amortization are set forth below. See Note 3 to our Condensed Consolidated Financial Statements for additional information.


	Three Months Ended
	September 30,				Increase		Percent
	2018		2017		(decrease)		Change
Gold	$	283	$	311	$	(28)	(9)	%
Copper		9		8		1	13
Other		7		9		(2)	(22)
	$	299	$	328	$	(29)	(9)	%


	Nine Months Ended
	September 30,				Increase		Percent
	2018		2017		(decrease)		Change
Gold	$	827	$	886	$	(59)	(7)	%
Copper		29		27		2	7
Other		23		25		(2)	(8)
	$	879	$	938	$	(59)	(6)	%

The decreases in Depreciation and amortization for gold during the three and nine months ended September 30, 2018, compared to the same periods in 2017, are primarily due to lower production at various sites. The decrease in the nine-month comparison was partially offset by higher stockpile and leach pad inventory adjustments.

The increases in Depreciation and amortization for copper during the three and nine months ended September 30, 2018, compared to the same periods in 2017, are primarily due to a higher co-product allocation of costs to copper based on a higher relative copper sales value.

For discussion regarding variations in operations, see Results of Consolidated Operations below.

Reclamation and remediation increased by $5 during the three months ended September 30, 2018, compared to the same period in 2017, primarily due to increased accretion. Reclamation and remediation decreased by $2 during the nine months ended September 30, 2018, compared to the same period in 2017, primarily due to updated reclamation liability assumptions at Minera Yanacocha S.R.L. (“Yanacocha”) regarding water treatment costs on non-operating leach pads in 2017, partially offset by updated assumptions at a historic mine site for future water management costs along with increased accretion in 2018.

Exploration remained relatively flat during the three months ended September 30, 2018, compared to the same period in 2017, as expenditures were in line with the prior year. Exploration increased by $7 during the nine months ended September 30, 2018, compared to the same period in 2017, primarily due to increased expenditures at various projects in North America and Australia as we continue to focus on developing future reserves.

Advanced projects, research and development decreased by $4 during the three months ended September 30, 2018, compared to the same period in 2017, primarily due to lower consulting costs associated with full potential opportunities in North America and prior-year costs associated with the Tanami Expansion 2 project. Advanced projects, research and development increased by $8

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during the nine months ended September 30, 2018, compared to the same period in 2017, primarily due to on-going study costs associated with the Long Canyon Phase 2 project in North America and the Yanacocha Sulfides and Chaquicocha Oxides projects in South America.

General and administrative remained relatively flat during the three months ended September 30, 2018, compared to the same period in 2017, as expenditures were in line with the prior year. General and administrative increased by $10 during the nine months ended September 30, 2018, compared to the same periods in 2017, primarily due to higher IT project and services costs.

Impairment of long-lived assets increased by $366 and $363 during the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017, primarily due to the impairment of long-lived assets at certain exploration properties and the Emigrant operation in North America, due to the Company’s decision to focus on advancing other projects and a change in mine plan resulting in a significant decrease in mine life at Emigrant, respectively. For additional information regarding these impairments, see Note 6 and 15 to our Condensed Consolidated Financial Statements. The 2017 impairments were primarily related to non-cash write-downs of obsolete assets at Yanacocha and Australia.

Other expense, net increased by $4 during the three months ended September 30, 2018, compared to the same period in 2017, primarily due to prior-year net adjustments to the contingent consideration and related liabilities associated with the acquisition of the final 33.33% interest in Boddington in June 2009 in addition to increased other expenses in Africa and South America in 2018. Other expense, net remained consistent during the nine months ended September 30, 2018, compared to the same period in 2017.

Other income, net increased by $27 and $165 during the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017. For the three month comparison, the increase is primarily due to business interruption insurance proceeds of $25 recorded in September 2018 associated with the East wall slips at Kalgoorlie in the first half of 2018 and decreases in Australia-denominated liabilities from a weaker Australian dollar, partially offset by unrealized holding losses on marketable equity securities related primarily to Continental Gold Inc. For the nine month comparison, the increase is primarily due to a gain from the exchange of certain royalty interests for cash consideration and an equity ownership and warrants in Maverix Metals Inc. (“Maverix”) in June 2018, decreases in Australia-denominated liabilities from a weaker Australian dollar, an increase in interest income, and an increase in business interruption insurance proceeds, partially offset by unrealized holding losses on marketable equity securities related primarily to Continental Gold Inc.

Interest expense, net decreased by $5 and $34 during the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017, primarily due to reduced debt balances as a result of the repayment of the 2017 Convertible Senior Notes in July 2017 and higher capitalized interest related to various development projects in 2018.

Income and mining tax expense (benefit) was $3 and $126, and $73 and $350 during the three and nine months ended September 30, 2018 and September 30, 2017, respectively. The effective tax rate is driven by a number of factors and the comparability of our income tax expense for the reported periods will be primarily affected by (i) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) impacts of the enactment of tax reform; (iv) the non-recognition of tax assets; (v) percentage depletion; (vi) and the impact of specific transactions and assessments. As a result, the effective tax rate will

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fluctuate, sometimes significantly, year to year. This trend is expected to continue in future periods. See Note 9 for further discussion of income taxes.


	Three months ended September 30, 2018(1)								Nine months ended September 30, 2018(1)
						Income Tax								Income Tax
	Income		Effective			Expense			Income		Effective			Benefit
	(Loss)(2)		Tax Rate			(Benefit)			(Loss)(2)		Tax Rate			(Provision)
Nevada	$	(342)		26	%	$	(90)	(3)	$	(172)		37	%	$	(63)	(3)
CC&V		4		25			1	(4)		54		11			6	(4)
Corporate & Other		(102)		5			(5)	(5)		(178)		19			(34)	(5)
Total US		(440)		21			(94)			(296)		31			(91)
Australia		172		41			71	(6)		516		28			147	(6)
Ghana		82		32			26			138		33			45
Suriname		46		26			12			137		26			36
Peru		14		0			—	(7)		(33)		(9)			3	(7)
Other Foreign		(2)		0			—			(2)		—			—
Rate adjustments		—		N/A			(12)	(8)		—		N/A			(14)	(8)
Consolidated	$	(128)		(2)	%	$	3		$	460		27	%	$	126

⁽¹⁾

The September 30, 2017 information has not been presented as such comparison would not be meaningful as a result of tax restructuring implemented by the Company at December 31, 2017. Due to changes the Tax Cuts and Jobs Act made to certain international tax provisions, it was prudent for the Company to restructure the holding of its non-U.S. operations for U.S. federal income tax purposes. This was accomplished by executing and filing various “check the box” elections with respect to certain non-U.S. subsidiaries of the Company. The elections resulted in the conversions of these subsidiaries from branches and/or foreign partnerships to regarded foreign corporations.

⁽²⁾

Represents income (loss) from continuing operations by geographic location before income taxes and equity in affiliates. These amounts will not reconcile to the Segment Information for the reasons stated in Note 3.

⁽³⁾

Includes deduction for percentage depletion of $(7) and $(26) and mining taxes of $(11) and $(1), respectively.

⁽⁴⁾

Includes deduction for percentage depletion of $(1) and $(7), respectively.

⁽⁵⁾

Includes valuation allowance of $13 and $2, respectively.

⁽⁶⁾

Includes mining taxes of $24 and $44 and valuation allowance of $- and $(46), respectively.

⁽⁷⁾

Includes valuation allowance of $(2) and $8 and mining taxes of $- and $3, respectively.

⁽⁸⁾

In accordance with applicable accounting rules, the interim provision for income taxes is adjusted to equal the consolidated tax rate.

We expect to record additional updates to the provisional amounts for the impacts of US tax reform during the fourth quarter of 2018 following completion of the 2017 income tax returns and within the 12 month time frame provided under the SEC’s Staff Accounting Bulletin 118. There are no new estimates associated with US tax reform in the income tax expense for the three months ended September 30, 2018.

Equity income (loss) of affiliates decreased by $10 and $21 during the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017, primarily due to increased losses recognized at TMAC Resources Inc. and Minera La Zanja S.R.L.

Net income (loss) from discontinued operations increased by $23 and $101 during the three and nine months ended September 30, 2018, respectively, compared to the same periods in 2017, primarily due to the impacts on the Holt royalty obligation from an increase in discount rate and a decrease in gold price. The nine-month period was also impacted by a decrease in expected production from prior periods. For additional information regarding our discontinued operations, see Note 10 to our Condensed Consolidated Financial Statements.

Net loss (income) attributable to noncontrolling interests from continuing operations changed from a loss of $7 to income of $21 during the three months ended September 30, 2018, compared to the same period of 2017, primarily due to income at Yanacocha in the third quarter of 2018 compared to losses in the third quarter of 2017. Net loss (income) attributable to noncontrolling interests from continuing operations changed from a loss of $20 to income of $26 during the nine months ended September 30, 2018, compared to the same period of 2017, primarily due to decreased losses at Yanacocha.

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Results of Consolidated Operations


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Three Months Ended September 30,
Gold	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
North America	511	573	$	803	$	742	$	254	$	265	$	998	$	912
South America	286	271		636		806		193		240		879		1,049
Australia	385	406		691		670		134		128		819		821
Africa	212	191		505		646		259		281		713		802
Total/Weighted-Average	1,394	1,441	$	691	$	721	$	210	$	226	$	927	$	941
Attributable to Newmont	1,286	1,339

Copper	(pounds in millions)		($ per pound sold)				($ per pound sold)				($ per pound sold)
North America	8	7	$	1.86	$	1.57	$	0.50	$	0.43	$	2.41	$	1.71
Australia	18	20		1.46		1.32		0.27		0.26		1.73		1.63
Total/Weighted-Average	26	27	$	1.54	$	1.38	$	0.32	$	0.30	$	1.87	$	1.65

Copper	(tonnes in thousands)
North America	3	3
Australia	9	9
Total/Weighted-Average	12	12


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Nine Months Ended September 30,
Gold	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
North America	1,431	1,655	$	789	$	710	$	242	$	241	$	997	$	884
South America	728	755		704		760		212		246		953		989
Australia	1,142	1,167		703		658		131		132		841		794
Africa	621	631		670		624		310		262		852		782
Total/Weighted-Average	3,922	4,208	$	729	$	692	$	217	$	218	$	973	$	908
Attributable to Newmont	3,657	3,925

Copper	(pounds in millions)		($ per pound sold)				($ per pound sold)				($ per pound sold)
North America	22	26	$	1.91	$	1.67	$	0.51	$	0.44	$	2.37	$	1.96
Australia	61	61		1.57		1.30		0.29		0.26		1.87		1.58
Total/Weighted-Average	83	87	$	1.66	$	1.42	$	0.35	$	0.32	$	2.00	$	1.70

Copper	(tonnes in thousands)
North America	10	12
Australia	28	28
Total/Weighted-Average	38	40

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 70.

Three months ended September 30, 2018 compared to 2017

Consolidated gold production decreased 3% primarily due to lower production at Carlin due to lower mill throughput, lower leach production at CC&V in North America and lower ore grade milled at Kalgoorlie in Australia, partially offset by higher ore grade milled at Ahafo in Africa and Yanacocha in South America.

Consolidated copper production decreased 4% primarily due to lower ore grade milled at Boddington in Australia.

Costs applicable to sales per consolidated gold ounce decreased 4% primarily due to a lower co-product allocation of costs to gold based on a lower relative gold sales value and a favorable Australian dollar foreign currency exchange rate, partially offset by lower ounces sold, higher oil prices and higher costs at Phoenix. Costs applicable to sales per consolidated copper pound increased 12% primarily due to a higher co-product allocation of costs to copper based on a higher relative copper sales value.

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Depreciation and amortization per consolidated gold ounce decreased 7% primarily due to lower amortization rates. Depreciation and amortization per consolidated copper pound increased 7% primarily due to a higher co-product allocation of costs to copper based on a higher relative copper sales value.

All-in sustaining costs per consolidated gold ounce were in line with the prior year as lower costs applicable to sales per ounce were offset by higher sustaining capital spend. All-in sustaining costs per consolidated copper pound increased 13% primarily due to higher costs applicable to sales per pound.

Nine months ended September 30, 2018 compared to 2017

Consolidated gold production decreased 7% primarily due to lower ore grade milled and recovery at CC&V and Carlin in North America, in addition to a build up of concentrate inventory at CC&V, lower ore grade milled and recovery at Boddington in Australia and lower mill throughput and ore grade at Akyem in Africa, partially offset by higher mill throughput and ore grade milled at Tanami in Australia and higher ore grade milled at Ahafo in Africa.

Consolidated copper production decreased 5% primarily due to lower ore grade milled at Phoenix in North America.

Costs applicable to sales per consolidated gold ounce increased 5% primarily due to lower ounces sold, higher stockpile and leach pad inventory adjustments and higher oil prices, partially offset by a lower co-product allocation of costs to gold. Costs applicable to sales per consolidated copper pound increased 17% primarily due to a higher co-product allocation of costs to copper.

Depreciation and amortization per consolidated gold ounce was in line with the prior year. Depreciation and amortization per consolidated copper pound increased 9% primarily due to a higher co-product allocation of costs to copper and lower copper pounds sold.

All-in sustaining costs per consolidated gold ounce increased 7% primarily due to higher costs applicable to sales per ounce and higher sustaining capital spend. All-in sustaining costs per consolidated copper pound increased 18% primarily due to higher costs applicable to sales per pound.

North America Operations


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Three Months Ended September 30,
Gold	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Carlin	237	268	$	892	$	834	$	254	$	232	$	1,042	$	992
Phoenix	55	58		1,010		889		226		241		1,306		1,037
Twin Creeks	93	82		620		728		154		198		794		926
Long Canyon	44	56		485		309		473		436		584		327
CC&V	82	109		825		682		261		318		952		791
Total/Weighted-Average (3)	511	573	$	803	$	742	$	254	$	265	$	998	$	912

Copper	(pounds in millions)		($ per pound sold)				($ per pound sold)				($ per pound sold)
Phoenix	8	7	$	1.86	$	1.57	$	0.50	$	0.43	$	2.41	$	1.71

Copper	(tonnes in thousands)
Phoenix	3	3

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	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Nine Months Ended September 30,
Gold	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Carlin	651	700	$	901	$	851	$	238	$	228	$	1,092	$	1,063
Phoenix	171	169		855		879		200		229		1,058		1,051
Twin Creeks	261	287		716		588		172		163		851		727
Long Canyon	131	133		420		318		447		417		504		341
CC&V	217	366		710		605		241		268		878		686
Total/Weighted-Average (3)	1,431	1,655	$	789	$	710	$	242	$	241	$	997	$	884

Copper	(pounds in millions)		($ per pound sold)				($ per pound sold)				($ per pound sold)
Phoenix	22	26	$	1.91	$	1.67	$	0.51	$	0.44	$	2.37	$	1.96

Copper	(tonnes in thousands)
Phoenix	10	12

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 70.

⁽³⁾

All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.

Three months ended September 30, 2018 compared to 2017

Carlin, USA. Gold production decreased 12% primarily due to lower mill throughput at Mill 6 from unscheduled downtime and ore chemistry, as well as lower leach tons placed. Costs applicable to sales per ounce increased 7% primarily due to lower ounces sold and higher stockpile and leach-pad inventory adjustments. Total stockpile and leach pad inventory adjustments at Carlin include $22 related to a write-down at Emigrant from a change in mine plan, resulting in a significant decrease in mine life in the third quarter of 2018. Depreciation and amortization per ounce increased 9% primarily due to higher stockpile and leach-pad inventory adjustments mainly at Emigrant and lower ounces sold. All-in sustaining costs per ounce increased 5% primarily due to higher sustaining capital spend.

Phoenix, USA. Gold production decreased 5% primarily due to lower leach production from reduced ore placement and lower grade at Lone Tree, as well as lower mill recovery, partially offset by higher mill throughput. Copper production increased 14% primarily due to higher ore grade milled and throughput. Costs applicable to sales per ounce increased 14% primarily due to lower ounces sold and higher maintenance costs. Costs applicable to sales per pound increased 18% primarily due to a higher co-product allocation of costs to copper. Depreciation and amortization per ounce decreased 6% primarily due to lower amortization rates. Depreciation and amortization per pound increased 16% primarily due to a higher co-product allocation of costs to copper. All-in sustaining costs per ounce increased 26% primarily due to higher costs applicable to sales per ounce and higher sustaining capital spend. All-in sustaining costs per pound increased 41% primarily due to higher costs applicable to sales per pound and higher sustaining capital spend.

Twin Creeks, USA. Gold production increased 13% primarily due to higher mill throughput and leach tons placed, in addition to a draw down of in-circuit inventory as compared to a build up in the prior year. Costs applicable to sales per ounce decreased 15% primarily due to higher ounces sold and lower stockpile and leach pad inventory adjustments. Depreciation and amortization per ounce decreased 22% primarily due to higher ounces sold and lower stockpile and leach pad inventory adjustments. All-in sustaining costs per ounce decreased 14% primarily due to lower costs applicable to sales per ounce.

Long Canyon, USA. Gold production decreased 21% primarily due to lower ore grade mined. Costs applicable to sales per ounce increased 57% primarily due to lower ounces sold and an unfavorable strip ratio. Depreciation and amortization per ounce increased 8% primarily due to lower ounces sold and higher amortization rates. All-in sustaining costs per ounce increased 79% primarily due to higher costs applicable to sales per ounce and higher sustaining capital spend.

CC&V, USA. Gold production decreased 25% primarily due to lower ore grade mined resulting in lower leach production. Costs applicable to sales per ounce increased 21% primarily due to lower ounces sold. Depreciation and amortization per ounce decreased

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18% primarily due to lower amortization rates, driven by reserve life additions, partially offset by lower ounces sold. All-in sustaining costs per ounce increased 20% primarily due to higher costs applicable to sales per ounce.

Nine months ended September 30, 2018 compared to 2017

Carlin, USA. Gold production decreased 7% primarily due to lower leach tons placed and lower leach recovery, as well as lower ore grade milled. Costs applicable to sales per ounce increased 6% primarily due to higher stockpile and leach pad inventory adjustments and lower ounces sold. Total stockpile and leach pad inventory adjustments at Carlin include $22 related to a write-down at Emigrant from a change in mine plan, resulting in a significant decrease in mine life in the third quarter of 2018. Depreciation and amortization per ounce increased 4% due to higher stockpile and leach pad inventory adjustments related to the write-down at Emigrant and lower ounces sold. All-in sustaining costs per ounce was in line with the prior year.

Phoenix, USA. Gold production was in line with the prior year. Copper production decreased 15% primarily due to lower ore grade milled. Costs applicable to sales per ounce were in line with the prior year as higher maintenance costs were offset by higher ounces sold. Costs applicable to sales per pound increased 14% primarily due to lower copper pounds sold. Depreciation and amortization per ounce decreased 13% primarily due to higher ounces sold and lower amortization rates. Depreciation and amortization per pound increased 16% primarily due to lower copper pounds sold. All-in sustaining costs per ounce were in line with the prior year. All-in sustaining costs per pound increased 21% primarily due to the higher costs applicable to sales per pound and higher sustaining capital spend.

Twin Creeks, USA. Gold production decreased 9% primarily due to lower ore grades mined and milled as a result of mine sequencing. Costs applicable to sales per ounce increased 22% primarily due to lower ounces sold and higher stockpile and leach pad inventory adjustments. Depreciation and amortization per ounce increased 6% primarily due to lower ounces sold. All-in sustaining costs per ounce increased 17% primarily due to higher costs applicable to sales per ounce, partially offset by lower sustaining capital spend.

Long Canyon, USA. Gold production was in line with the prior year as lower ore grade mined were offset by higher leach tons placed. Costs applicable to sales per ounce increased 32% primarily due to lower ore grade mined. Depreciation and amortization per ounce increased 7% primarily due to higher amortization rates. All-in sustaining costs per ounce increased 48% primarily due to higher costs applicable to sales per ounce and higher sustaining capital spend.

CC&V, USA. Gold production decreased 41% primarily due to lower ore grade mined, a build up of concentrate inventory to be shipped and processed in Nevada and lower leach tons placed at Valley Leach Fill 2. Costs applicable to sales per ounce increased 17% primarily due to lower ounces sold. Depreciation and amortization per ounce decreased 10% primarily due to lower amortization rates driven by reserve life additions. All-in sustaining costs per ounce increased 28% primarily due to higher costs applicable to sales per ounce and higher sustaining capital spend.

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South America Operations


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Three Months Ended September 30,	(ounces in thousands)			($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Yanacocha	153	142	$	740	$	1,087	$	192	$	275	$	945	$	1,312
Merian	133	129		513		496		169		176		651		608
Total / Weighted Average (3)	286	271	$	636	$	806	$	193	$	240	$	879	$	1,049
Yanacocha (48.65%) (4)	(75)	(69)
Merian (25.00%)	(33)	(33)
Attributable to Newmont	178	169


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Nine Months Ended September 30,	(ounces in thousands)			($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Yanacocha	373	400	$	855	$	993	$	218	$	266	$	1,071	$	1,224
Merian	355	355		544		493		179		195		699		578
Total / Weighted Average (3)	728	755	$	704	$	760	$	212	$	246	$	953	$	989
Yanacocha (48.65%) (4)	(176)	(194)
Merian (25.00%)	(89)	(89)
Attributable to Newmont	463	472

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 70.

⁽³⁾

All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.

⁽⁴⁾

In December 2017, Yanacocha repurchased a 5% interest held by the International Finance Corporation, increasing Newmont’s ownership in Yanacocha from 51.35% to 54.05% as of December 31, 2017. In June 2018, Yanacocha sold a 5% ownership interest to a subsidiary of Sumitomo Corporation, reducing Newmont’s ownership to 51.35%. See Note 11 to our Condensed Consolidated Financial Statements.

Three months ended September 30, 2018 compared to 2017

Yanacocha, Peru. Gold production increased 8% primarily due to higher ore grade milled, recovery and throughput partially offset by lower leach production. Costs applicable to sales per ounce decreased 32% primarily due to lower stockpile and leach pad inventory adjustments and higher ounces sold. Depreciation and amortization per ounce decreased 30% primarily due to lower stockpile and leach pad inventory adjustments and higher ounces sold. All-in sustaining costs per ounce decreased 28% primarily due to lower costs applicable to sales per ounce partially offset by higher sustaining capital spend.

Merian, Suriname. Gold production was in line with the prior year. Costs applicable to sales per ounce were in line with the prior year. Depreciation and amortization per ounce decreased 4% due to lower amortization rates. All-in sustaining costs per ounce increased 7% primarily due to higher support costs and higher sustaining capital spend.

Nine months ended September 30, 2018 compared to 2017

Yanacocha, Peru. Gold production decreased 7% primarily due to lower leach production. Costs applicable to sales per ounce decreased 14% due to lower stockpile and leach pad inventory adjustments and higher by-product credits from the sale of copper and silver concentrates. Depreciation and amortization per ounce decreased 18% primarily due to lower stockpile and leach pad inventory adjustments and lower amortization rates. All-in sustaining costs per ounce decreased 13% due to lower costs applicable to sales per ounce.

Merian, Suriname. Gold production was in line with the prior year as lower ore grade milled and recovery were offset by higher throughput and a draw down of in-circuit inventory as compared to a build up in the prior year. Costs applicable to sales per ounce increased 10% primarily due to lower ore grade mined. Depreciation and amortization per ounce decreased 8% primarily due to lower amortization rates from reserve life additions. All-in sustaining costs per ounce increased 21% primarily due to higher sustaining capital spend and higher costs applicable to sales per ounce.

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Australia Operations


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Three Months Ended September 30,
Gold	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Boddington	187	197	$	741	$	695	$	138	$	144	$	838	$	807
Tanami	123	114		583		626		150		148		730		800
Kalgoorlie	75	95		736		674		77		53		824		768
Total/Weighted-Average (3)	385	406	$	691	$	670	$	134	$	128	$	819	$	821

Copper	(pounds in millions)		($ per pound sold)				($ per pound sold)				($ per pound sold)
Boddington	18	20	$	1.46	$	1.32	$	0.27	$	0.26	$	1.73	$	1.63

Copper	(tonnes in thousands)
Boddington	9	9


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Nine Months Ended September 30,
Gold	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Boddington	547	611	$	756	$	686	$	138	$	144	$	860	$	790
Tanami	341	286		629		623		153		166		794		782
Kalgoorlie	254	270		692		636		70		52		798		714
Total/Weighted-Average (3)	1,142	1,167	$	703	$	658	$	131	$	132	$	841	$	794

Copper	(pounds in millions)		($ per pound sold)				($ per pound sold)				($ per pound sold)
Boddington	61	61	$	1.57	$	1.30	$	0.29	$	0.26	$	1.87	$	1.58

Copper	(tonnes in thousands)
Boddington	28	28

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 70.

⁽³⁾

All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.

Three months ended September 30, 2018 compared to 2017

Boddington, Australia. Gold production decreased 5% primarily due to lower ore grade milled in addition to a lower draw down of in-circuit inventory. Copper production decreased 10% primarily due to lower ore grade milled. Costs applicable to sales per ounce increased 7% primarily due to higher oil prices and higher mill maintenance costs, partially offset by a lower co-product allocation of costs to gold and a favorable Australian dollar foreign currency exchange rate. Costs applicable to sales per pound increased 11% primarily due to higher oil prices, higher mill maintenance costs and a higher co-product allocation of costs to copper, partially offset by a favorable Australian dollar foreign currency exchange rate. Depreciation and amortization per ounce decreased 4% primarily due to a lower co-product allocation of costs to gold. Depreciation and amortization per pound increased 4% primarily due to a higher co-product allocation of costs to copper. All-in sustaining costs per ounce increased 4% primarily due to higher costs applicable to sales per ounce, partially offset by lower sustaining capital spend. All-in sustaining costs per pound increased 6% primarily due to higher costs applicable to sales per pound.

Tanami, Australia. Gold production increased 8% primarily due to higher ore grade milled and a draw down of in-circuit inventory as compared to a build up in the prior year partially offset by lower mill throughput. Costs applicable to sales per ounce decreased 7% primarily due to higher ounces sold and a favorable Australian dollar foreign currency exchange rate, partially offset by higher mine maintenance costs, higher paste-fill activity and higher oil prices. Depreciation and amortization per ounce was in line with the prior year. All-in sustaining costs per ounce decreased 9% primarily due to lower costs applicable to sales per ounce and lower sustaining capital spend.

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Kalgoorlie, Australia. Gold production decreased 21% primarily due to lower ore grades milled and a lower draw down of in-circuit inventory, partially offset by higher mill throughput. The lower ore grade milled was a result of reduced ore tons mined from the pit due to a failure in the East wall of the pit, leading to the processing of lower-grade stockpiles. Costs applicable to sales per ounce increased 9% primarily due to lower ounces sold, higher mining costs per ton as a result of the failure in the East wall of the pit, higher site support costs and higher oil prices partially offset by a favorable Australian dollar foreign currency exchange rate. Depreciation and amortization per ounce increased 45% primarily due to lower ounces sold, asset additions and higher amortization rates. All-in sustaining costs per ounce increased 7% primarily due to higher costs applicable to sales per ounce.

Nine months ended September 30, 2018 compared to 2017

Boddington, Australia. Gold production decreased 10% primarily due to lower ore grade milled and recovery, partially offset by higher mill throughput. Copper production was in line with the prior year. Costs applicable to sales per ounce increased 10% primarily due to lower ounces sold and higher oil prices partially offset by a lower co-product allocation of costs to gold. Costs applicable to sales per pound increased 21% primarily due to higher oil prices and a higher co-product allocation of costs to copper. Depreciation and amortization per ounce decreased 4% due to a lower co-product allocation of costs to gold, partially offset by lower ounces sold. Depreciation and amortization per pound increased 12% primarily due to a higher co-product allocation of costs to copper. All-in sustaining costs per ounce increased 9% primarily due to higher costs applicable to sales per ounce. All-in sustaining costs per pound increased 18% primarily due to higher costs applicable to sales per pound.

Tanami, Australia. Gold production increased 19% primarily due to higher mill throughput, ore grade milled and recovery. Throughput was higher primarily due to the Tanami Expansion project achieving commercial production in the third quarter of 2017, coupled with the mill being placed into care and maintenance for 21 days in early 2017 following record high rainfall that blocked transport routes, limiting access to fuel and other resources. Costs applicable to sales per ounce was in line with the prior year. Depreciation and amortization per ounce decreased 8% primarily due to higher ounces sold. All-in sustaining costs per ounce were in line with the prior year.

Kalgoorlie, Australia. Gold production decreased 6% primarily due to lower ore grade milled and a build up of in-circuit inventory compared to a draw down in the prior year partially offset by higher mill throughput and recovery. The lower ore grade milled was a result of reduced ore tons mined from the pit due to a failure in the East wall of the pit, leading to the processing of lower-grade stockpiles. Costs applicable to sales per ounce increased 9% primarily due to lower ounces sold, higher mining costs per ton as a result of the failure in the East wall of the pit, higher site support costs and higher oil prices. Depreciation and amortization per ounce increased 35% primarily due to lower ounces sold, asset additions and higher amortization rates. All-in sustaining costs per ounce increased 12% primarily due to higher costs applicable to sales per ounce and higher sustaining capital spend.

Africa Operations


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Three Months Ended September 30,	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Ahafo	105	78	$	605	$	731	$	211	$	179	$	787	$	910
Akyem	107	113		408		588		296		351		574		693
Total / Weighted Average (3)	212	191	$	505	$	646	$	259	$	281	$	713	$	802


	Gold or Copper		Costs Applicable				Depreciation and				All-In Sustaining
	Produced		to Sales (1)				Amortization				Costs (2)
	2018	2017	2018		2017		2018		2017		2018		2017
Nine Months Ended September 30,	(ounces in thousands)		($ per ounce sold)				($ per ounce sold)				($ per ounce sold)
Ahafo	308	260	$	789	$	739	$	251	$	199	$	917	$	927
Akyem	313	371		553		543		368		306		715		624
Total / Weighted Average (3)	621	631	$	670	$	624	$	310	$	262	$	852	$	782

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

All-In Sustaining Costs is a non-GAAP financial measure. See Non-GAAP Financial Measures beginning on page 70.

⁽³⁾

All-In Sustaining Costs and Depreciation and amortization include expense for other regional projects.

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Three months ended September 30, 2018 compared to 2017

Ahafo, Ghana. Gold production increased 35% primarily due to higher ore grade milled from the ramp up of mining at Subika Underground and higher mill recovery, partially offset by lower mill throughput. Costs applicable to sales per ounce decreased 17% primarily due to higher ounces sold and lower power costs, partially offset by higher oil prices. Depreciation and amortization per ounce increased 18% primarily due to higher amortization rates from asset additions. All-in sustaining costs per ounce decreased 14% primarily due to lower costs applicable to sales per ounce, partially offset by higher sustaining capital spend.

Akyem, Ghana. Gold production decreased 5% primarily due to lower mill throughput and recovery partially offset by higher ore grade milled. Costs applicable to sales per ounce decreased 31% primarily due to stockpile inventory adjustments in the prior year and lower power costs, partially offset by higher oil prices. Depreciation and amortization per ounce decreased 16% primarily due to stockpile inventory adjustments in the prior year. All-in sustaining costs per ounce decreased 17% primarily due to lower costs applicable to sales per ounce partially offset by higher sustaining capital spend.

Nine months ended September 30, 2018 compared to 2017

Ahafo, Ghana. Gold production increased 18% primarily due to higher ore grade milled and recovery, as well as a draw down of in-circuit inventory as compared to a build up in the prior year, partially offset by lower mill throughput. Costs applicable to sales per ounce increased 7% primarily due to higher stockpile inventory adjustments and higher oil prices partially offset by higher ounces sold and lower power costs. Depreciation and amortization per ounce increased 26% primarily due to higher stockpile inventory adjustments and higher amortization rates. All-in sustaining costs per ounce were in line with the prior year.

Akyem, Ghana. Gold production decreased 16% primarily due to lower mill throughput, ore grade and recovery. Costs applicable to sales per ounce were in line with the prior year as lower ounces sold, higher stockpile inventory adjustments and higher oil prices were offset by lower power costs and a favorable strip ratio. Depreciation and amortization per ounce increased 20% primarily due to lower ounces sold and higher stockpile inventory adjustments. All-in sustaining costs per ounce increased 15% primarily due to higher sustaining capital spend.

Foreign Currency Exchange Rates

Our foreign operations sell their gold and copper production based on U.S. dollar metal prices. Fluctuations in foreign currency exchange rates do not have a material impact on our revenue since gold and copper are sold throughout the world in U.S. dollars. Despite selling gold in London, we have no exposure to the euro or the British pound.

Foreign currency exchange rates can increase or decrease profits to the extent costs are paid in foreign currencies, including the Australian dollar, the Peruvian sol and the Surinamese dollar. Approximately 33% and 31% of Costs applicable to sales for our foreign operations were paid in currencies other than the U.S. dollar during the three months ended September 30, 2018 and 2017, respectively, including approximately 28% denominated in the Australian dollar in the current year. Approximately 34% and 32% of Costs applicable to sales for our foreign operations were paid in currencies other than the U.S. dollar during the nine months ended September 30, 2018 and 2017, respectively, including approximately 29% denominated in the Australian dollar in the current year. Variations in the local currency exchange rates in relation to the U.S. dollar at our foreign mining operations decreased Costs applicable to sales by $13 per ounce, net of hedging losses, during the three months ended September 30, 2018, compared to the same period in 2017, primarily in Australia. Variations in the local currency exchange rates in relation to the U.S. dollar at our foreign mining operations decreased Costs applicable to sales by $4 per ounce, net of hedging losses, during the nine months ended September 30, 2018, compared to the same periods in 2017, primarily in Australia.

Our Merian mine is located in the country of Suriname, which has been considered a hyperinflationary environment in recent years with a cumulative inflation rate of over 100% for the last three years. Although we have balances denominated in Surinamese dollars that relate to labor and payroll liabilities, substantially all of Merian’s activity is denominated in U.S. dollars. As a result, our exposure to fluctuations in the Surinamese dollar exchange rate is not significant to Newmont’s financial statements.

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Liquidity and Capital Resources

Liquidity Overview

We have a disciplined cash management strategy of maintaining financial flexibility to execute our capital priorities and provide long-term value to our shareholders. Consistent with that strategy, we aim to self-fund development projects and make strategic partnerships focused on profitable growth, while reducing our debt and returning cash to stockholders through dividends.

At September 30, 2018, the Company had $3,068 in Cash and cash equivalents, of which $871 was held in foreign subsidiaries and is primarily held in U.S. dollar denominated accounts with the remainder in foreign currencies readily convertible to U.S. dollars. At September 30, 2018, $364 of the consolidated cash and cash equivalents was attributable to noncontrolling interests primarily related to our Peru and Suriname operations, which is being held to fund those operations. At September 30, 2018, $748 in consolidated cash and cash equivalents ($403 attributable to Newmont) was held at certain foreign subsidiaries that, if repatriated, may be subject to withholding taxes. We expect that there would be no additional tax burden upon repatriation after considering the cash cost associated with the withholding taxes. We believe that our liquidity and capital resources from U.S. operations are adequate to fund our U.S. operations and corporate activities.

We believe our existing consolidated cash and cash equivalents, available capacity on our revolving credit facility, and cash generated from continuing operations will be adequate to satisfy working capital needs, fund future growth, meet debt obligations, pay dividends and meet other liquidity requirements for the foreseeable future. At September 30, 2018, no borrowings were outstanding under our revolving credit facility.

Our financial position was as follows:


	At September 30,		At December 31,
	2018		2017
Cash and cash equivalents	$	3,068	$	3,259
Debt		4,043		4,040
Leases and other financing obligations		147		25
Net Debt	$	1,122	$	806
Borrowing capacity on revolving credit facility expiring May 2022	$	2,914	$	2,920

Cash Flows

Our Condensed Consolidated Statements of Cash Flows are summarized as follows:


	September 30,
	2018		2017
Net cash provided by (used in) operating activities of continuing operations	$	1,095	$	1,391
Net cash provided by (used in) operating activities of discontinued operations		(8)		(12)
Net cash provided by (used in) operating activities	$	1,087	$	1,379

Net cash provided by (used in) investing activities	$	(884)	$	(618)

Net cash provided by (used in) financing activities	$	(346)	$	(542)

Net cash provided by (used in) operating activities of continuing operations was $1,095 during the nine months ended September 30, 2018, a decrease of $296 from the nine months ended September 30, 2017, primarily due to lower sales and slightly higher costs, coupled with unfavorable working capital changes including an increase in accounts receivable, increase in stockpiles and ore on leach pads, timing of payments on accounts payable and increased tax payments, partially offset by $196 attributable to interest on our Convertible Senior Notes repayment in 2017 and higher realized metal prices.

Net cash provided by (used in) investing activities was $(884) during the nine months ended September 30, 2018, an increase in cash used of $266 from the nine months ended September 30, 2017, primarily due to higher Additions to property, plant and mine

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development in 2018 driven by higher capital expenditures on development projects, and mineral interest acquisitions of $138, including our investment in Galore Creek of $100, partially offset by higher Purchases of investments in 2017.

Net cash provided by (used in) financing activities was $(346) during the nine months ended September 30, 2018, a decrease in cash used of $196 from the nine months ended September 30, 2017, primarily due to higher debt repayment related to the Convertible Senior Notes in 2017, Proceeds from the sale of noncontrolling interests of $48 and lower net distributions to noncontrolling interests in 2018. This was partially offset by higher dividends paid of $226, Repurchase of common stock for $96 and higher Payments for withholding of employee taxes related to stock-based compensation of $39.

Capital Expenditures

Cash generated from operations is used to execute our capital priorities, which include sustaining and developing our global portfolio of long-lived assets. We consider sustaining capital as those capital expenditures that are necessary to maintain current production and execute the current mine plan. Capital expenditures to develop new operations, or related to projects at existing operations where these projects will enhance production or reserves, are considered non-sustaining or development capital.

For the nine months ended September 30, 2018 and 2017, we had Additions to property, plant and mine development as follows:


	Nine Months Ended September 30,
	2018						2017
	Development		Sustaining				Development		Sustaining
	Projects		Capital		Total		Projects		Capital		Total
North America	$	36	$	207	$	243	$	14	$	190	$	204
South America		80		64		144		52		47		99
Australia		24		104		128		40		99		139
Africa		170		58		228		76		45		121
Corporate and other		1		8		9		1		4		5
Accrual basis	$	311	$	441	$	752	$	183	$	385	$	568
Decrease (increase) in non-cash adjustments						11						(11)
Cash basis					$	763					$	557

For the nine months ended September 30, 2018, development projects included Twin Creeks Underground in North America; Merian and Quecher Main in South America; the Tanami Expansion 2 project in Australia; and, Subika Underground, Ahafo Mill Expansion and Ahafo North in Africa. For the nine months ended September 30, 2017, development projects included Merian in South America, the Tanami Expansion project in Australia and Subika Underground and the Ahafo Mill Expansion in Africa.

For the nine months ended September 30, 2018 and 2017, sustaining capital included the following:

North America. Capital expenditures primarily related to surface and underground mine development, tailings facility construction and capitalized component purchases;

South America. Capital expenditures primarily related to a tailings facility expansion, capitalized component purchases and infrastructure improvements.

Australia. Capital expenditures primarily related to equipment and capitalized component purchases, underground mine development and tailings and support facilities.

Africa. Capital expenditures primarily related to water treatment plant construction, a tailings facility expansion, Awonsu Phase 3 and 4 layback and capitalized component purchases.

Additionally, in December 2017, the Company began the early phases of the Tanami Power project in Australia which includes the construction of a gas pipeline to the Tanami site, and construction and operation of two on-site power stations under agreements that qualify for build-to-suit lease accounting. As of September 30, 2018, the financing obligations under the build-to-suit arrangements were $140.

Refer to our global project pipeline discussion above for additional details. Refer to Note 3 to our Condensed Consolidated Financial Statements and Part I, Item 2 Non-GAAP Financial Measures All-In Sustaining Costs for further information.

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Contractual Obligations

There have been no material changes in our contractual obligations since December 31, 2017, except as discussed in Note 1 of our Condensed Consolidated Financial Statements. Refer to Part II, Item 7 in our annual report on Form 10-K, and revisions filed April 26, 2018 on Form 8-K, for the year ended December 31, 2017, for information regarding our contractual obligations.

Off-Balance Sheet Arrangements

There have been no material changes in our off-balance sheet arrangements since December 31, 2017. Refer to Part II, Item 7 in our annual report on Form 10-K, and revisions filed April 26, 2018 on Form 8-K, for the year ended December 31, 2017, for information regarding our off-balance sheet arrangements.

Environmental

Our mining and exploration activities are subject to various federal and state laws and regulations governing the protection of the environment. We have made, and expect to make in the future, expenditures to comply with such laws and regulations, but cannot predict the full amount of such future expenditures. We perform a comprehensive review of our reclamation and remediation liabilities annually and review changes in facts and circumstances associated with these obligations at least quarterly. As of September 30, 2018, with the exception of an adjustment of $8 to a historical mine site obligation for future water management costs, there have been no material changes to our reclamation and remediation obligation since December 31, 2017.

For a complete discussion of the factors that influence our reclamation obligations and the associated risks, refer to Part II, Item 7, Managements’ Discussion and Analysis of Consolidated Financial Condition and Results of Operations under the headings “Environmental” and “Critical Accounting Policies” and refer to Part I, Item 1A, Risk Factors under the heading “Mine closure, reclamation and remediation costs for environmental liabilities may exceed the provisions we have made” for the year ended December 31, 2017, filed February 22, 2018 on Form 10-K, and revisions filed April 26, 2018 on Form 8-K.

For more information on the Company’s reclamation and remediation liabilities, see Notes 5 and 26 to the Condensed Consolidated Financial Statements.

Accounting Developments

For a discussion of Recently Adopted and Recently Issued Accounting Pronouncements, see Note 2 to the Condensed Consolidated Financial Statements.

Non-GAAP Financial Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by U.S. generally accepted accounting principles (“GAAP”). These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Unless otherwise noted, we present the Non-GAAP financial measures of our continuing operations in the tables below. For additional information regarding our discontinued operations, see Note 10 to the Condensed Consolidated Financial Statements.

Earnings before interest, taxes and depreciation and amortization and Adjusted earnings before interest, taxes and depreciation and amortization

Management uses Earnings before interest, taxes and depreciation and amortization (“EBITDA”) and EBITDA adjusted for non-core or certain items that have a disproportionate impact on our results for a particular period (“Adjusted EBITDA”) as non-GAAP measures to evaluate the Company’s operating performance. EBITDA and Adjusted EBITDA do not represent, and should not be considered an alternative to, net income (loss), operating income (loss), or cash flow from operations as those terms are defined by GAAP, and do not necessarily indicate whether cash flows will be sufficient to fund cash needs. Although Adjusted EBITDA and similar measures are frequently used as measures of operations and the ability to meet debt service requirements by other companies, our calculation of Adjusted EBITDA is not necessarily comparable to such other similarly titled captions of other companies. The Company believes that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our

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operating results in the same manner as our management and Board of Directors. Management’s determination of the components of Adjusted EBITDA are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to EBITDA and Adjusted EBITDA as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income (loss) attributable to Newmont stockholders	$	(145)	$	206	$	339	$	428
Net income (loss) attributable to noncontrolling interests		21		(7)		26		(20)
Net loss (income) from discontinued operations (1)		(16)		7		(56)		45
Equity loss (income) of affiliates		9		(1)		25		4
Income and mining tax expense (benefit)		3		73		126		350
Depreciation and amortization		299		328		879		938
Interest expense, net		51		56		153		187
EBITDA	$	222	$	662	$	1,492	$	1,932
Adjustments:
Impairment of long-lived assets (2)	$	366	$	—	$	366	$	3
Loss (gain) on asset and investment sales (3)		(1)		(5)		(100)		(21)
Emigrant leach pad write-down (4)		22		—		22		—
Change in fair value of marketable equity securities (5)		26		—		21		—
Restructuring and other (6)		1		2		16		10
Reclamation and remediation charges (7)		—		—		8		3
Acquisition cost adjustments (8)		—		(3)		—		2
Adjusted EBITDA	$	636	$	656	$	1,825	$	1,929

⁽¹⁾

Net loss (income) from discontinued operations relates to (i) adjustments in our Holt royalty obligation, presented net of tax expense (benefit) of $6, $(4), $15 and $(25), respectively, and (ii) adjustments to our Batu Hijau Contingent Consideration, presented net of tax expense (benefit) of $(1), $-, $-, and $-, respectively. For additional information regarding our discontinued operations, see Note 10 to our Condensed Consolidated Financial Statements.

⁽²⁾

Impairment of long-lived assets, included in Impairment of long-lived assets, represents non-cash write-downs of long-lived assets. The 2018 impairments include $366 related to long-lived assets in North America in the third quarter of 2018. See Note 6 to our Condensed Consolidated Financial Statements for further information.

⁽³⁾

Loss (gain) on asset and investment sales, included in Other income, net, primarily represents a gain from the exchange of certain royalty interests for cash consideration and an equity ownership and warrants in Maverix in June 2018, and a gain from the exchange of our interest in the Fort á la Corne joint venture for equity ownership in Shore Gold Inc. (“Shore Gold”) in June 2017.

⁽⁴⁾

The Emigrant leach pad write-down, included in Costs applicable to sales, represents a write-down to reduce the carrying value of the leach pad to net realizable value at Emigrant due to a change in mine plan resulting in a significant decrease in mine life in the third quarter of 2018.

⁽⁵⁾

Change in fair value of marketable equity securities, included in Other income, net, primarily represents unrealized holding gains and losses on marketable equity securities related primarily to Continental Gold Inc.

⁽⁶⁾

Restructuring and other, included in Other expense, net, represents certain costs associated with severance, legal and other settlements.

⁽⁷⁾

Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to remediation plans at the Company’s former historic mining operations.

⁽⁸⁾

Acquisition cost adjustments, included in Other expense, net, represent net adjustments to the contingent consideration and related liabilities associated with the acquisition of the final 33.33% interest in Boddington in June 2009.

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Adjusted net income (loss)

Management uses Adjusted net income (loss) to evaluate the Company’s operating performance and for planning and forecasting future business operations. The Company believes the use of Adjusted net income (loss) allows investors and analysts to understand the results of the continuing operations of the Company and its direct and indirect subsidiaries relating to the sale of products, by excluding certain items that have a disproportionate impact on our results for a particular period. Adjustments to continuing operations are presented before tax and net of our partners’ noncontrolling interests, when applicable. The tax effect of adjustments is presented in the Tax effect of adjustments line and is calculated using the applicable regional tax rate. Management’s determination of the components of Adjusted net income (loss) are evaluated periodically and based, in part, on a review of non-GAAP financial measures used by mining industry analysts. Net income (loss) attributable to Newmont stockholders is reconciled to Adjusted net income (loss) as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income (loss) attributable to Newmont stockholders	$	(145)	$	206	$	339	$	428
Net loss (income) attributable to Newmont stockholders from discontinued operations (1)		(16)		7		(56)		45
Net income (loss) attributable to Newmont stockholders from continuing operations		(161)		213		283		473
Impairment of long-lived assets, net (2)		366		—		366		2
Loss (gain) on asset and investment sales, net (3)		(1)		(5)		(100)		(21)
Emigrant leach pad write-down (4)		29		—		29		—
Change in fair value of marketable equity securities (5)		26		—		21		—
Restructuring and other, net (6)		1		1		13		8
Reclamation and remediation charges (7)		—		—		8		3
Acquisition cost adjustments (8)		—		(3)		—		2
Tax effect of adjustments (9)		(104)		4		(88)		3
Valuation allowance and other tax adjustments (10)		19		(26)		(28)		98
Adjusted net income (loss)	$	175	$	184	$	504	$	568

Net income (loss) per share, basic (11)	$	(0.27)	$	0.38	$	0.64	$	0.80
Net loss (income) attributable to Newmont stockholders from discontinued operations		(0.04)		0.01		(0.11)		0.08
Net income (loss) attributable to Newmont stockholders from continuing operations		(0.31)		0.39		0.53		0.88
Impairment of long-lived assets, net		0.69		—		0.69		—
Loss (gain) on asset and investment sales, net		(0.01)		(0.01)		(0.19)		(0.04)
Emigrant leach pad write-down		0.05		—		0.05		—
Change in fair value of marketable equity securities		0.05		—		0.04		—
Restructuring and other, net		—		—		0.02		0.01
Reclamation and remediation charges		—		—		0.01		0.01
Acquisition cost adjustments		—		(0.01)		—		—
Tax effect of adjustments		(0.18)		0.01		(0.15)		0.01
Valuation allowance and other tax adjustments		0.04		(0.03)		(0.05)		0.20
Adjusted net income (loss) per share, basic	$	0.33	$	0.35	$	0.95	$	1.07

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	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net income (loss) per share, diluted (11)	$	(0.27)	$	0.38	$	0.63	$	0.80
Net loss (income) attributable to Newmont stockholders from discontinued operations		(0.04)		0.01		(0.10)		0.08
Net income (loss) attributable to Newmont stockholders from continuing operations		(0.31)		0.39		0.53		0.88
Impairment of long-lived assets, net		0.69		—		0.68		—
Loss (gain) on asset and investment sales, net		(0.01)		(0.01)		(0.19)		(0.04)
Emigrant leach pad write-down		0.05		—		0.05		—
Change in fair value of marketable equity securities		0.05		—		0.04		—
Restructuring and other, net		—		—		0.02		0.01
Reclamation and remediation charges		—		—		0.01		0.01
Acquisition cost adjustments		—		(0.01)		—		—
Tax effect of adjustments		(0.18)		0.01		(0.16)		0.01
Valuation allowance and other tax adjustments		0.04		(0.04)		(0.04)		0.19
Adjusted net income (loss) per share, diluted	$	0.33	$	0.34	$	0.94	$	1.06

Weighted average common shares (millions):
Basic		533		533		533		533
Diluted		535		536		535		534

⁽¹⁾

Net loss (income) attributable to Newmont stockholders from discontinued operations relates to (i) adjustments in our Holt royalty obligation, presented net of tax expense (benefit) of $6, $(4), $15 and $(25), respectively, and (ii) adjustments to our Batu Hijau Contingent Consideration, presented net of tax expense (benefit) of $(1), $-, $- and $- respectively. For additional information regarding our discontinued operations, see Note 10 to our Condensed Consolidated Financial Statements.

⁽²⁾

⁽³⁾

⁽⁴⁾

The Emigrant leach pad write-down, included in Costs applicable to sales and Depreciation and amortization, represents a write-down to reduce the carrying value of the leach pad to net realizable value at Emigrant due to a change in mine plan resulting in a significant decrease in mine life in the third quarter of 2018.

⁽⁵⁾

Change in fair value of marketable equity securities, included in Other income, net, represents unrealized holding gains and losses on marketable equity securities related primarily to Continental Gold Inc.

⁽⁶⁾

Restructuring and other, included in Other expense, net, primarily represents certain costs associated with severance, legal and other settlements. Amounts are presented net of income (loss) attributable to noncontrolling interests of $-, $(1), $(3) and $(2), respectively.

⁽⁷⁾

Reclamation and remediation charges, included in Reclamation and remediation, represent revisions to remediation plans at the Company’s former historic mining operations.

⁽⁸⁾

⁽⁹⁾

The tax effect of adjustments, included in Income and mining tax benefit (expense), represents the tax effect of adjustments in footnotes (2) through (8), as described above, and are calculated using the applicable regional tax rate.

⁽¹⁰⁾

Valuation allowance and other tax adjustments, included in Income and mining tax benefit (expense), is recorded for items such as foreign tax credits, alternative minimum tax credits, capital losses and disallowed foreign losses. The adjustment in the three and nine months ended September 30, 2018 is due to increases to net operating losses, tax credit carryovers and other deferred tax assets of $13 and $32 respectively, and other tax adjustments of $5 and $4, respectively. The adjustment in the nine months ended September 30, 2018 is also due to a second quarter reduction to the provisional expense for the Tax Cuts and Jobs Act of $(45) and a release of valuation allowance on capital losses of $(15). Amounts are presented net of income (loss) attributable to noncontrolling interests of $1, $-, $(4), and $-, respectively. The adjustment in the three and nine months ended September 30, 2017 is due to increases in tax credit carryovers of $(39) and $100, respectively, partially offset by other tax adjustments of $13 and $(2), respectively.

⁽¹¹⁾

Per share measures may not recalculate due to rounding.

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Free Cash Flow

Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is Net cash provided by (used in) operating activities less Net cash provided by (used in) operating activities of discontinued operations less Additions to property, plant and mine development as presented on the Condensed Consolidated Statements of Cash Flows. The Company believes Free Cash Flow is also useful as one of the bases for comparing the Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of Free Cash Flow is not necessarily comparable to such other similarly titled captions of other companies.

The presentation of non-GAAP Free Cash Flow is not meant to be considered in isolation or as an alternative to net income as an indicator of the Company’s performance, or as an alternative to cash flows from operating activities as a measure of liquidity as those terms are defined by GAAP, and does not necessarily indicate whether cash flows will be sufficient to fund cash needs. The Company’s definition of Free Cash Flow is limited in that it does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore, the Company believes it is important to view Free Cash Flow as a measure that provides supplemental information to the Company’s Condensed Consolidated Statements of Cash Flows.

The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to Net cash provided by (used in) operating activities, which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow, as well as information regarding Net cash provided by (used in) investing activities and Net cash provided by (used in) financing activities.


	Nine Months Ended September 30,
	2018		2017
Net cash provided by (used in) operating activities	$	1,087	$	1,379
Less: Net cash used in (provided by) operating activities of discontinued operations		8		12
Net cash provided by (used in) operating activities of continuing operations		1,095		1,391
Less: Additions to property, plant and mine development		(763)		(557)
Free Cash Flow	$	332	$	834

Net cash provided by (used in) investing activities (1)	$	(884)	$	(618)
Net cash provided by (used in) financing activities	$	(346)	$	(542)

⁽¹⁾

Net cash provided by (used in) investing activities includes Additions to property, plant and mine development, which is included in the Company’s computation of Free Cash Flow.

Costs applicable to sales per ounce/pound

Costs applicable to sales per ounce/pound are non-GAAP financial measures. These measures are calculated by dividing the costs applicable to sales of gold and copper by gold ounces or copper pounds sold, respectively. These measures are calculated for the periods presented on a consolidated basis. Costs applicable to sales per ounce/pound statistics are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently.

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The following tables reconcile these non-GAAP measures to the most directly comparable GAAP measures.

Costs applicable to sales per ounce


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Costs applicable to sales (1)	$	952	$	1,017	$	2,853	$	2,890
Gold sold (thousand ounces)		1,378		1,411		3,914		4,178
Costs applicable to sales per ounce (2)	$	691	$	721	$	729	$	692

⁽¹⁾

Includes by-product credits of $10 and $41 during the three and nine months ended September 30, 2018, respectively, and $16 and $42 during the three and nine months ended September 30, 2017, respectively.

⁽²⁾

Per ounce measures may not recalculate due to rounding.

Costs applicable to sales per pound


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Costs applicable to sales (1)	$	43	$	36	$	136	$	119
Copper sold (million pounds)		28		26		82		84
Costs applicable to sales per pound (2)	$	1.54	$	1.38	$	1.66	$	1.42

⁽¹⁾

Includes by-product credits of $1 and $3 during the three and nine months ended September 30, 2018, respectively, and $- and $3 during the three and nine months ended September 30, 2017, respectively.

⁽²⁾

Per pound measures may not recalculate due to rounding.

All-In Sustaining Costs

Newmont has worked to develop a metric that expands on GAAP measures, such as cost of goods sold, and non-GAAP measures, such as Costs applicable to sales per ounce, to provide visibility into the economics of our mining operations related to expenditures, operating performance and the ability to generate cash flow from our continuing operations.

Current GAAP measures used in the mining industry, such as cost of goods sold, do not capture all of the expenditures incurred to discover, develop and sustain production. Therefore, we believe that all-in sustaining costs is a non-GAAP measure that provides additional information to management, investors and analysts that aid in the understanding of the economics of our operations and performance compared to other producers and in the investor’s visibility by better defining the total costs associated with production.

All-in sustaining cost (“AISC”) amounts are intended to provide additional information only and do not have any standardized meaning prescribed by GAAP and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The measures are not necessarily indicative of operating profit or cash flow from operations as determined under GAAP. Other companies may calculate these measures differently as a result of differences in the underlying accounting principles, policies applied and in accounting frameworks such as in International Financial Reporting Standards (“IFRS”), or by reflecting the benefit from selling non-gold metals as a reduction to AISC. Differences may also arise related to definitional differences of sustaining versus development capital activities based upon each company’s internal policies.

The following disclosure provides information regarding the adjustments made in determining the all-in sustaining costs measure:

Costs applicable to sales. Includes all direct and indirect costs related to current production incurred to execute the current mine plan. We exclude certain exceptional or unusual amounts from Costs applicable to sales (“CAS”), such as significant revisions to recovery amounts. CAS includes by-product credits from certain metals obtained during the process of extracting and processing the primary ore-body. CAS is accounted for on an accrual basis and excludes Depreciation and amortization and Reclamation and remediation, which is consistent with our presentation of CAS on the Condensed Consolidated Statements of Operations. In determining AISC, only the CAS associated with producing and selling an ounce of gold is included in the measure. Therefore, the amount of gold CAS included in AISC is derived from the CAS presented in the Company’s Condensed Consolidated Statements of

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Operations less the amount of CAS attributable to the production of copper at our Phoenix and Boddington mines. The copper CAS at those mine sites is disclosed in Note 3 to the Condensed Consolidated Financial Statements. The allocation of CAS between gold and copper at the Phoenix and Boddington mines is based upon the relative sales value of gold and copper produced during the period.

Reclamation costs. Includes accretion expense related to Reclamation liabilities and the amortization of the related Asset Retirement Cost (“ARC”) for the Company’s operating properties. Accretion related to the Reclamation liabilities and the amortization of the ARC assets for reclamation does not reflect annual cash outflows but are calculated in accordance with GAAP. The accretion and amortization reflect the periodic costs of reclamation associated with current production and are therefore included in the measure. The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Phoenix and Boddington mines.

Advanced projects, research and development and exploration. Includes incurred expenses related to projects that are designed to increase or enhance current production and exploration. We note that as current resources are depleted, exploration and advanced projects are necessary for us to replace the depleting reserves or enhance the recovery and processing of the current reserves. As this relates to sustaining our production, and is considered a continuing cost of a mining company, these costs are included in the AISC measure. These costs are derived from the Advanced projects, research and development and Exploration amounts presented in the Condensed Consolidated Statements of Operations less the amount attributable to the production of copper at our Phoenix and Boddington mines. The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Phoenix and Boddington mines.

General and administrative. Includes costs related to administrative tasks not directly related to current production, but rather related to support our corporate structure and fulfill our obligations to operate as a public company. Including these expenses in the AISC metric provides visibility of the impact that general and administrative activities have on current operations and profitability on a per ounce basis.

Other expense, net. We exclude certain exceptional or unusual expenses from Other expense, net, such as restructuring, as these are not indicative to sustaining our current operations. Furthermore, this adjustment to Other expense, net is also consistent with the nature of the adjustments made to Net income (loss) attributable to Newmont stockholders as disclosed in the Company’s non-GAAP financial measure Adjusted net income (loss). The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Phoenix and Boddington mines.

Treatment and refining costs. Includes costs paid to smelters for treatment and refining of our concentrates to produce the salable metal. These costs are presented net as a reduction of Sales on our Condensed Consolidated Statements of Operations.

Sustaining capital. We determined sustaining capital as those capital expenditures that are necessary to maintain current production and execute the current mine plan. Capital expenditures to develop new operations, or related to projects at existing operations where these projects will enhance production or reserves, are generally considered non-sustaining or development capital. We determined the classification of sustaining and development capital projects based on a systematic review of our project portfolio in light of the nature of each project. Sustaining capital costs are relevant to the AISC metric as these are needed to maintain the Company’s current operations and provide improved transparency related to our ability to finance these expenditures from current operations. The allocation of these costs to gold and copper is determined using the same allocation used in the allocation of CAS between gold and copper at the Phoenix and Boddington mines.

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					Advanced
					Projects,
					Research and						Treatment							All-In
	Costs				Development		General		Other		and				All-In		Ounces	Sustaining
Three Months Ended	Applicable		Reclamation		and		and		Expense,		Refining		Sustaining		Sustaining		(000)/Pounds	Costs per
September 30, 2018	to Sales (1)(2)(3)		Costs (4)		Exploration(5)		Administrative		Net (6)		Costs		Capital (7)		Costs		(millions) Sold	oz/lb (8)
Gold
Carlin	$	183	$	1	$	7	$	2	$	—	$	—	$	46	$	239	229	$	1,042
Phoenix		39		5		1		—		—		1		5		51	39		1,306
Twin Creeks		57		1		4		—		—		—		11		73	92		794
Long Canyon		21		—		—		—		—		—		4		25	43		584
CC&V		68		—		4		1		—		—		6		79	82		952
Other North America		—		—		14		—		—		—		3		17	—		—
North America		368		7		30		3		—		1		75		484	485		998

Yanacocha		116		15		2		1		—		—		14		148	156		945
Merian		67		—		2		1		3		—		12		85	131		651
Other South America		—		—		17		2		—		—		—		19	—		—
South America		183		15		21		4		3		—		26		252	287		879

Boddington		146		2		—		—		—		6		12		166	198		838
Tanami		71		1		2		—		—		—		16		90	122		730
Kalgoorlie		56		1		2		—		—		—		4		63	77		824
Other Australia		—		—		4		1		—		—		1		6	—		—
Australia		273		4		8		1		—		6		33		325	397		819

Ahafo		62		1		3		—		1		—		14		81	102		787
Akyem		44		5		1		1		—		—		11		62	107		574
Other Africa		—		—		5		2		—		—		—		7	—		—
Africa		106		6		9		3		1		—		25		150	209		713

Corporate and Other		—		—		17		48		—		—		2		67	—		—
Total Gold	$	930	$	32	$	85	$	59	$	4	$	7	$	161	$	1,278	1,378	$	927

Copper
Phoenix	$	10	$	—	$	—	$	—	$	—	$	—	$	4	$	14	6	$	2.41
Boddington		33		—		—		—		—		4		2		39	22		1.73
Total Copper	$	43	$	—	$	—	$	—	$	—	$	4	$	6	$	53	28	$	1.87

Consolidated	$	973	$	32	$	85	$	59	$	4	$	11	$	167	$	1,331

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

Includes by-product credits of $11 and excludes co-product revenues of $70.

⁽³⁾

Includes stockpile and leach pad inventory adjustments of $18 at Carlin, $4 at Twin Creeks, $5 at CC&V and $10 at Yanacocha. Total stockpile and leach pad inventory adjustments at Carlin of $40 were adjusted above by $22 related to the write-down at Emigrant due to a change in mine plan, resulting in a significant decrease in mine life in the third quarter of 2018.

⁽⁴⁾

Reclamation costs include operating accretion and amortization of asset retirement costs of $17 and $15, respectively, and exclude non-operating accretion and reclamation and remediation adjustments of $11 and $3, respectively.

⁽⁵⁾

Advanced projects, research and development and Exploration of $1 at Carlin, $7 at Long Canyon, $8 at Yanacocha, $1 at Ahafo and $3 at Akyem are recorded in “Other” of the respective region for development projects.

⁽⁶⁾

Other expense, net is adjusted for restructuring and other costs of $1.

⁽⁷⁾

Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $107. The following are major development projects: Twin Creeks Underground, Quecher Main, Tanami Expansion 2, Ahafo North, Subika Underground and Ahafo Mill Expansion.

⁽⁸⁾

Per ounce and per pound measures may not recalculate due to rounding.

Table of Contents


					Advanced
					Projects,
					Research and						Treatment							All-In
	Costs				Development		General		Other		and				All-In		Ounces	Sustaining
Three Months Ended	Applicable		Reclamation		and		and		Expense,		Refining		Sustaining		Sustaining		(000)/Pounds	Costs per
September 30, 2017	to Sales (1)(2)(3)		Costs (4)		Exploration(5)		Administrative		Net (6)		Costs		Capital (7)		Costs		(millions) Sold	oz/lb (8)
Gold
Carlin	$	216	$	2	$	6	$	2	$	—	$	—	$	31	$	257	259	$	992
Phoenix		48		1		—		1		1		1		4		56	54		1,037
Twin Creeks		59		1		3		1		1		—		10		75	81		926
Long Canyon		17		—		—		1		—		—		—		18	55		327
CC&V		75		1		2		—		—		—		9		87	110		791
Other North America		—		—		16		—		(1)		—		2		17	—		—
North America		415		5		27		5		1		1		56		510	559		912

Yanacocha		150		14		6		1		1		—		9		181	138		1,312
Merian		62		1		3		—		—		—		10		76	125		608
Other South America		—		—		17		3		(1)		—		—		19	—		—
South America		212		15		26		4		—		—		19		276	263		1,049

Boddington		130		2		—		—		—		7		12		151	187		807
Tanami		72		1		2		—		—		—		17		92	115		800
Kalgoorlie		64		1		3		—		—		1		4		73	95		768
Other Australia		—		—		7		3		(1)		—		1		10	—		—
Australia		266		4		12		3		(1)		8		34		326	397		821

Ahafo		57		2		3		—		—		—		9		71	78		910
Akyem		67		3		2		—		—		—		7		79	114		693
Other Africa		—		—		4		—		—		—		—		4	—		—
Africa		124		5		9		—		—		—		16		154	192		802

Corporate and Other		—		—		13		46		2		—		1		62	—		—
Total Gold	$	1,017	$	29	$	87	$	58	$	2	$	9	$	126	$	1,328	1,411	$	941

Copper
Phoenix	$	11	$	—	$	1	$	—	$	—	$	—	$	—	$	12	7	$	1.71
Boddington		25		—		1		—		—		3		2		31	19		1.63
Total Copper	$	36	$	—	$	2	$	—	$	—	$	3	$	2	$	43	26	$	1.65

Consolidated	$	1,053	$	29	$	89	$	58	$	2	$	12	$	128	$	1,371

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

Includes by-product credits of $16 and exclude co-product revenues of $80.

⁽³⁾

Includes stockpile and leach pad inventory adjustments of $21 at Carlin, $10 at Twin Creeks, $22 at Yanacocha and $7 at Akyem.

⁽⁴⁾

Reclamation costs include operating accretion and amortization of asset retirement costs of $20 and $9, respectively, and exclude non-operating accretion and reclamation and remediation adjustments of $4 and $2, respectively.

⁽⁵⁾

Advanced projects, research and development and Exploration of $6 at Long Canyon, $5 at Yanacocha, $5 at Tanami, $3 at Ahafo and $1 at Akyem are recorded in “Other” of the respective region for development projects.

⁽⁶⁾

Other expense, net is adjusted for net acquisition cost adjustments of $(3) and restructuring and other costs of $2.

⁽⁷⁾

Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $66. The following are major development projects: Merian, Subika Underground and the Tanami and Ahafo Mill Expansions.

⁽⁸⁾

Per ounce and per pound measures may not recalculate due to rounding.

Table of Contents


					Advanced
					Projects,
					Research and						Treatment							All-In
	Costs				Development		General		Other		and				All-In		Ounces	Sustaining
Nine Months Ended	Applicable		Reclamation		and		and		Expense,		Refining		Sustaining		Sustaining		(000)/Pounds	Costs per
September 30, 2018	to Sales (1)(2)(3)		Costs (4)		Exploration(5)		Administrative		Net (6)		Costs		Capital (7)		Costs		(millions) Sold	oz/lb (8)
Gold
Carlin	$	560	$	6	$	16	$	5	$	—	$	—	$	118	$	705	645	$	1,092
Phoenix		145		6		3		1		—		5		19		179	169		1,058
Twin Creeks		187		2		9		1		1		—		22		222	261		851
Long Canyon		55		1		—		—		—		—		9		65	130		504
CC&V		149		3		7		2		1		—		24		186	211		878
Other North America		—		—		45		1		2		—		7		55	—		—
North America		1,096		18		80		10		4		5		199		1,412	1,416		997

Yanacocha		322		34		18		1		3		—		25		403	376		1,071
Merian		195		1		11		1		3		—		39		250	358		699
Other South America		—		—		38		8		1		—		—		47	—		—
South America		517		35		67		10		7		—		64		700	734		953

Boddington		404		8		—		—		—		16		32		460	535		860
Tanami		221		2		10		—		1		—		45		279	351		794
Kalgoorlie		178		3		8		—		—		—		17		206	258		798
Other Australia		—		2		10		6		(3)		—		2		17	—		—
Australia		803		15		28		6		(2)		16		96		962	1,144		841

Ahafo		242		3		7		1		2		—		27		282	307		917
Akyem		173		17		1		1		1		—		31		224	313		715
Other Africa		—		—		18		5		—		—		—		23	—		—
Africa		415		20		26		7		3		—		58		529	620		852

Corporate and Other		—		—		48		148		1		—		8		205	—		—
Total Gold	$	2,831	$	88	$	249	$	181	$	13	$	21	$	425	$	3,808	3,914	$	973

Copper
Phoenix	$	40	$	1	$	—	$	—	$	—	$	1	$	8	$	50	21		2.37
Boddington		96		1		—		—		—		9		8		114	61		1.87
Total Copper	$	136	$	2	$	—	$	—	$	—	$	10	$	16	$	164	82	$	2.00

Consolidated	$	2,967	$	90	$	249	$	181	$	13	$	31	$	441	$	3,972

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

Includes by-product credits of $44 and excludes co-product copper revenues of $229.

⁽³⁾

Includes stockpile and leach pad inventory adjustments of $64 at Carlin, $30 at Twin Creeks, $5 at CC&V, $29 at Yanacocha, $33 at Ahafo and $28 at Akyem. Total stockpile and leach pad inventory adjustments at Carlin of $86 were adjusted above by $22 related to the write-down at Emigrant due to a change in mine plan, resulting in a significant decrease in mine life in the third quarter of 2018.

⁽⁴⁾

Reclamation costs include operating accretion and amortization of asset retirement costs of $47 and $43, respectively, and exclude non-operating accretion and reclamation and remediation adjustments of $32 and $17, respectively.

⁽⁵⁾

Advanced projects, research and development and Exploration of $7 at Carlin, $19 at Long Canyon, $14 at Yanacocha, $2 at Tanami, $5 at Ahafo and $10 at Akyem are recorded in “Other” of the respective region for development projects.

⁽⁶⁾

Other expense, net is adjusted for restructuring and other costs of $16.

⁽⁷⁾

Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $322. The following are major development projects: Twin Creeks Underground, Quecher Main, Merian, Tanami Expansion 2, Ahafo North, Subika Underground and Ahafo Mill Expansion.

⁽⁸⁾

Per ounce and per pound measures may not recalculate due to rounding.

Table of Contents


					Advanced
					Projects,
					Research and						Treatment							All-In
	Costs				Development		General		Other		and				All-In		Ounces	Sustaining
Nine Months Ended	Applicable		Reclamation		and		and		Expense,		Refining		Sustaining		Sustaining		(000)/Pounds	Costs per
September 30, 2017	to Sales (1)(2)(3)		Costs (4)		Exploration(5)		Administrative		Net (6)		Costs		Capital (7)		Costs		(millions) Sold	oz/lb (8)
Gold
Carlin	$	594	$	5	$	14	$	3	$	—	$	—	$	126	$	742	698	$	1,063
Phoenix		138		4		4		1		1		7		10		165	157		1,051
Twin Creeks		170		3		7		2		1		—		27		210	289		727
Long Canyon		42		1		—		1		—		—		1		45	132		341
CC&V		224		3		9		1		—		—		17		254	370		686
Other North America		—		—		33		—		2		—		4		39	—		—
North America		1,168		16		67		8		4		7		185		1,455	1,646		884

Yanacocha		403		45		13		3		4		—		29		497	406		1,224
Merian		174		1		11		—		—		—		18		204	353		578
Other South America		—		—		41		9		—		—		—		50	—		—
South America		577		46		65		12		4		—		47		751	759		989

Boddington		399		5		1		—		1		16		38		460	582		790
Tanami		180		2		3		—		—		—		41		226	289		782
Kalgoorlie		171		2		6		—		—		1		12		192	269		714
Other Australia		—		—		18		7		(1)		—		3		27	—		—
Australia		750		9		28		7		—		17		94		905	1,140		794

Ahafo		193		5		14		—		2		—		28		242	261		927
Akyem		202		9		3		—		1		—		17		232	372		624
Other Africa		—		—		16		5		—		—		—		21	—		—
Africa		395		14		33		5		3		—		45		495	633		782

Corporate and Other		—		—		39		139		6		—		4		188	—		—
Total Gold	$	2,890	$	85	$	232	$	171	$	17	$	24	$	375	$	3,794	4,178	$	908

Copper
Phoenix	$	45	$	1	$	1	$	—	$	—	$	1	$	5	$	53	27	$	1.96
Boddington		74		1		1		—		—		9		5		90	57		1.58
Total Copper	$	119	$	2	$	2	$	—	$	—	$	10	$	10	$	143	84	$	1.70

Consolidated	$	3,009	$	87	$	234	$	171	$	17	$	34	$	385	$	3,937

⁽¹⁾

Excludes Depreciation and amortization and Reclamation and remediation.

⁽²⁾

Includes by-product credits of $45 and excludes co-product revenues of $227.

⁽³⁾

Includes stockpile and leach pad inventory adjustments of $48 at Carlin, $21 at Twin Creeks, $52 at Yanacocha, $13 at Ahafo and $12 at Akyem.

⁽⁴⁾

Reclamation costs include operating accretion and amortization of asset retirement costs of $60 and $27, respectively, and exclude non-operating accretion and reclamation and remediation adjustments of $14 and $24, respectively.

⁽⁵⁾

Advanced projects, research and development and Exploration of $16 at Long Canyon, $10 at Yanacocha, $13 at Tanami, $8 at Ahafo and $6 at Akyem are recorded in “Other” of the respective region for development projects.

⁽⁶⁾

Other expense, net is adjusted for restructuring and other costs of $10 and acquisition cost adjustments of $2.

⁽⁷⁾

Excludes development capital expenditures, capitalized interest and changes in accrued capital, totaling $172. The following are major development projects: Merian, Long Canyon, Tanami Expansion, Subika Underground and Ahafo Mill Expansion.

⁽⁸⁾

Per ounce and per pound measures may not recalculate due to rounding.

Safe Harbor Statement

Certain statements contained in this report (including information incorporated by reference herein) are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to be covered by the safe harbor provided for under these sections. Words such as “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)”, “estimate(s)”, “should”, “intend(s)” and similar expressions are intended to identify forward-looking statements. Our forward-looking statements may include, without limitation:

estimates regarding future earnings and the sensitivity of earnings to gold, copper and other metal prices;

estimates of future mineral production and sales;

estimates of future production costs, other expenses and taxes for specific operations and on a consolidated basis;

estimates of future cash flows and the sensitivity of cash flows to gold and other metal prices;

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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 other capital costs, financing plans for these deposits and expected production commencement dates;

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 of, and terms and costs related to, future borrowing or financing and expectations regarding future debt repayments or debt tender transactions;

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 statements regarding future transactions, including, without limitation, statements related to future acquisitions and projected benefits, synergies and costs associated with acquisitions and related matters;

expectations regarding the start-up time, design, mine life, production and costs applicable to sales and exploration potential of our projects;

statements regarding future hedge and derivative positions or modifications thereto;

statements regarding political, economic or governmental conditions and environments;

statements regarding the impacts of changes in the legal and regulatory environment in which we operate;

estimates of future costs, accruals for reclamation costs and other liabilities for certain environmental matters, including without limitation with respect to our Yanacocha operation;

estimates of income taxes and expectations relating to tax contingencies or tax audits; and

estimates of pension and other post-retirement costs.

Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Such risks include, but are not limited to:

the price of gold, copper and other metal prices and commodities;

the cost of operations;

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, mining and processing;

changes in tax laws;

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 the section titled Item 1, Business; Item 1A, Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2017 filed February 22, 2018 and elsewhere throughout this report. Many of these factors are beyond our ability to control or predict. 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. We disclaim 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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (dollars in millions, except per ounce and per pound amounts).

Metal Prices

Changes in the market price of gold significantly affect our profitability and cash flow. Gold prices can fluctuate widely due to numerous factors, such as demand; forward selling by producers; central bank sales, purchases and lending; investor sentiment; the strength of the U.S. dollar; inflation, deflation, or other general price instability and global mine production levels. Changes in the market price of copper also affect our profitability and cash flow. Copper is traded on established international exchanges and copper prices generally reflect market supply and demand, but can also be influenced by speculative trading in the commodity or by currency exchange rates.

Decreases in the market price of gold and copper can also significantly affect the value of our product inventory, stockpiles and leach pads, and it may be necessary to record a write-down to the net realizable value. Net realizable value 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 our stockpiles, leach pads and product inventory 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 recovery rates. The significant assumptions in determining the stockpile, leach pad and product inventory adjustments for each mine site reporting unit at September 30, 2018 included production cost and capitalized expenditure assumptions unique to each operation, a short-term and long-term gold price of $1,213 and $1,300 per ounce, respectively, a short-term and long-term copper price of $2.77 and $3.00 per pound, respectively, and a short-term and long-term U.S. to Australian dollar exchange rate of $0.73 and $0.80, respectively.

The net realizable value 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.

Hedging

Our strategy is to provide shareholders with leverage to changes in gold and copper prices by selling our production at spot market prices. Consequently, we do not hedge our gold and copper sales. We have and may continue to manage certain risks associated with commodity input costs, interest rates and foreign currencies using the derivative market.

By using hedges, we are affected by credit risk, market risk and market liquidity risk. Credit risk is the risk that a third party might fail to fulfill its performance obligations under the terms of a financial instrument. We mitigate credit risk by entering into derivatives with high credit quality counterparties, limiting the amount of exposure to each counterparty and monitoring the financial condition of the counterparties. Market risk is the risk that the fair value of a derivative might be adversely affected by a change in underlying commodity prices, interest rates or currency exchange rates, and that this in turn affects our financial condition. We manage market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. We mitigate this potential risk to our financial condition by establishing trading agreements with counterparties under which we are not required to post any collateral or be subject to any margin calls on our derivatives. Our counterparties cannot require settlement solely because of an adverse change in the fair value of a derivative. Market liquidity risk is the risk that a derivative cannot be eliminated quickly, by either liquidating it or by establishing an offsetting position. Under the terms of our trading agreements, counterparties cannot require us to immediately settle outstanding derivatives, except upon the occurrence of customary events of default such as covenant breaches, including financial covenants, insolvency or bankruptcy. We further mitigate market liquidity risk by spreading out the maturity of our derivatives over time.

Cash Flow Hedges

The diesel derivative and foreign currency contracts are designated as cash flow hedges, and as such, the unrealized changes in market value have been recorded in Accumulated other comprehensive income (loss) and are reclassified to income during the period in which the hedged transaction affects earnings.

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Diesel Price Risk

We had the following diesel derivative contracts outstanding at September 30, 2018:


	Expected Maturity Date
					Total/
	2018	2019	2020	2021	Average
Diesel Fixed Forward Contracts:
North America
Diesel gallons (millions)	3	4	4	1	12
Average rate ($/gallon)	1.68	1.87	2.00	2.07	1.89

South America
Diesel gallons (millions)	—	—	2	—	2
Average rate ($/gallon)	—	2.07	1.89	2.03	1.92

Australia
Diesel barrels (thousands)	—	18	91	29	138
Average rate ($/barrel)	—	85.96	78.66	82.15	80.34

The fair value of the diesel derivative contracts was a net asset position of $7 at September 30, 2018 and $6 at December 31, 2017.

Foreign Currency Exchange Risk

The fair value of A$ foreign currency derivative contracts was a net liability position of $1 at December 31, 2017.

Commodity Price Exposure

Our provisional gold and copper sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of the gold and copper concentrates at the prevailing indices’ prices at the time of sale. The embedded derivative, which does not qualify for hedge accounting, is marked to market through earnings each period prior to final settlement.

At September 30, 2018, Newmont had gold sales of 113,000 ounces priced at an average of $1,190 per ounce, subject to final pricing over the next several months. Each $25 change in the price for provisionally priced gold sales would have an approximate $2 effect on our Net income (loss) attributable to Newmont stockholders. The London Bullion Market Association P.M. closing settlement price at September 30, 2018 for gold was $1,187 per ounce.

At September 30, 2018, Newmont had copper sales of 18 million pounds priced at an average of $2.80 per pound, subject to final pricing over the next several months. Each $0.10 change in the price for provisionally priced copper sales would have an approximate $1 effect on our Net income (loss) attributable to Newmont stockholders. The LME closing settlement price at September 30, 2018 for copper was $2.80 per pound.

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ITEM 4. CONTROLS AND PROCEDURES.

During the fiscal period covered by this report, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the required time periods and are designed to ensure that information required to be disclosed in its reports is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended September 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Information regarding legal proceedings is contained in Note 26 to the Condensed Consolidated Financial Statements contained in this Report and is incorporated herein by reference.

ITEM 1A. RISK FACTORS.

There were no material changes to the risk factors disclosed in Item 1, Business; Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the SEC on February 22, 2018.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


	(a)	(b)		(c)	(d)
				Total Number of	Maximum Number (or
	Total			Shares Purchased	Approximate Dollar Value)
	Number	Average		as Part of	of Shares that may
	of Shares	Price Paid		Publicly Announced	yet be Purchased
Period	Purchased(1)(2)	Per Share(1)(2)		Plans or Programs(3)	under the Plans or Programs(3)
July 1, 2018 through July 31, 2018	2,313	$	37.45	—	$	19,691,707
August 1, 2018 through August 31, 2018	788,014	$	33.21	33,383	$	18,520,502
September 1, 2018 through September 30, 2018	—	$	—	—	$	18,520,502

⁽¹⁾

The total number of shares purchased (and the average price paid per share) reflects: (i) shares purchased pursuant to the repurchase program described in (3) below; and (ii) represents shares delivered to the Company from stock awards held by employees upon vesting for the purpose of covering the recipients’ tax withholding obligations, totaling 2,313 shares, 14,653 shares and 0 shares for the fiscal months of July, August and September 2018, respectively.

⁽²⁾

In August 2018, the Company repurchased and retired approximately 739,978 shares of its common stock that were held by participants in the Retirement Savings Plan of Newmont and the Retirement Savings Plan for Hourly-Rated Employees of Newmont for $25 million.

⁽³⁾

On February 20, 2018, the Company’s Board of Directors authorized a stock repurchase program, under which the Company was authorized to repurchase shares of outstanding common stock to offset the dilutive impact of employee stock award vesting in the current year, provided that the aggregate value of shares of common stock repurchased does not exceed $90 million, and no shares of common stock may be repurchased under the program after December 31, 2018. The Company repurchased 33,383 shares in the third quarter under the repurchase program, representing an aggregate value of $1 million, and such shares were then retired. To the extent additional employee stock award vesting occurs later in the year in connection with retirements, terminations or previously scheduled vestings, the Company intends to use the repurchase program exclusively to offset dilution, subject to the limitations set forth above. The repurchase program may be discontinued at any time, and the program does not obligate the Company to acquire any specific number of shares of its common stock. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including trading volume, market conditions, legal requirements, business conditions and other factors.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

At Newmont, safety is a core value. No work-related fatalities occurred at any Newmont site or facility during the third quarter. However, a tragic event occurred in April 2018, which resulted in the death of six contractors who were working on the construction of a structure at the Ahafo Mill Expansion project in Ghana. We deeply grieve these losses along with families, friends, colleagues and the entire Newmont family. Newmont Ghana has fully cooperated with the Government of Ghana’s Minerals Commission to support their investigation of the accident. We are committed to honoring our obligations and working closely with the Minerals Commission to develop detailed action plans to address their investigation report’s findings and to integrate lessons across its business. This tragic accident stands as a sobering reminder that we must forever remain vigilant in continually improving our safety culture. It is with great humility and resolve that we renew our commitment to making sure our people go home safe every day.

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Our health and safety management system, which includes detailed standards and procedures for safe production, addresses topics such as employee training, risk management, workplace inspection, emergency response, accident investigation and program auditing. In addition to strong leadership and involvement from all levels of the organization, these programs and procedures form the cornerstone of safety at Newmont, ensuring that employees are provided a safe and healthy environment and are intended to reduce workplace accidents, incidents and losses, comply with all mining-related regulations and provide support for both regulators and the industry to improve mine safety.

In addition, we have established our “Rapid Response” process to mitigate and prevent the escalation of adverse consequences if existing risk management controls fail, particularly if an incident may have the potential to seriously impact the safety of employees, the community or the environment. This process provides appropriate support to an affected site to complement their technical response to an incident, so as to reduce the impact by considering the environmental, strategic, legal, financial and public image aspects of the incident, to ensure communications are being carried out in accordance with legal and ethical requirements and to identify actions in addition to those addressing the immediate hazards.

The operation of our U.S. based mines 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. Following passage of The Mine Improvement and New Emergency Response Act of 2006, MSHA significantly increased the numbers of citations and orders charged against mining operations. The dollar penalties assessed for citations issued has also increased in recent years.

Newmont is required to report certain mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, and that required information is included in Exhibit 95 and is incorporated by reference into this Quarterly Report. The fatalities in Ghana are not represented in Exhibit 95 due to the fact that our operations in Ghana are not regulated by MSHA.

ITEM 5. OTHER INFORMATION.

Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

On October 23, 2018, Newmont Mining Corporation appointed Tom Palmer, age 51, President and Chief Operating Officer, effective as of November 1, 2018, which is an expansion of his current role with the Company as Executive Vice President and Chief Operating Officer and is subject to no fixed term. In this role, he will continue leading the Company’s global operations, projects, and health, safety and security teams. Mr. Palmer served as Executive Vice President and Chief Operating Officer since May 2016. Previously, Mr. Palmer served as Senior Vice President, Asia Pacific beginning in February 2015 after serving as Senior Vice President, Indonesia since March 2014. Prior to joining Newmont, he was the Chief Operating Officer, Pilbara Mines at Rio Tinto Iron Ore. During his extensive career, Mr. Palmer also worked in a variety of roles across a number of commodities, including General Manager, Technology for the Bauxite and Alumina business; General Manager, Operations at Hail Creek coal mine; and General Manager, Asset Management at Palabora Mining Company in South Africa. Mr. Palmer has extensive experience leading teams and delivering production and projects while implementing safety culture programs and improving diversity.

There is no arrangement or understanding between Mr. Palmer and any other persons pursuant to which he was appointed as President and Chief Operating Officer. Mr. Palmer does not have a family relationship with any member of the Board of Directors or any executive officer of the Company, and Mr. Palmer has not been a participant or had any interest in any transaction with the Company that is reportable under Item 404(a) of Regulation S-K. In the President and Chief Operating Officer position with the Company, Mr. Palmer will have a base salary of $850,000. Mr. Palmer’s cash bonus and long-term equity incentives shall be delivered according to the Company’s incentive programs as described in the Company’s 2018 Proxy Statement.

Amendments to By-Laws

On October 24, 2018, in connection with the separation of the role of Chief Executive Officer and President, Newmont’s Board of Directors approved amendments to its By-Laws to clarify the respective roles of the Chief Executive Officer (principal executive officer) and the President (principal administrative officer) (Article I, Sections 2 and 8; Article II, Section 3; Article IV, Sections 1, 4, 5, 8, 10 and 12; and Article V, Section 1). The amended By-Laws also include language defining the role of the Chief Financial Officer (principal financial officer) (Article IV, Sections 1 and 7) and clarifying the roles of the Controller (principal accounting

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officer) and the Treasurer (Article IV, Sections 8 and 10). Additionally, the listing of officers has been re-ordered throughout Article IV. The amendments were adopted to avoid technical overlaps in duties and better reflect the current organization of the Company and became effective immediately upon approval by the Board of Directors. The foregoing description of the amendments to the By-Laws is qualified in its entirety by reference to the complete text of the By-Laws, as amended and restated effective as of October 24, 2018, filed as Exhibit 3.1 to this Form 10-Q and incorporated herein by reference.

ITEM 6. EXHIBITS.

Exhibit Number		Description

3.1		By-Laws of the Company, as amended and restated on October 24, 2018, filed herewith

10.1*		Amendment Three to the Pension Equalization Plan of Newmont, filed herewith.

31.1	-	Certification Pursuant to Rule 13A-14 or 15-D-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by the Principal Executive Officer, filed herewith.

31.2	-	Certification Pursuant to Rule 13A-14 or 15-D-14 of the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by the Principal Financial Officer, filed herewith.

32.1	-	Statement Required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by the Principal Executive Officer, furnished herewith.

32.2	-	Statement Required by 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 signed by the Principal Financial Officer, furnished herewith.

95	-	Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, filed herewith.

101	-	101.INS	XBRL Instance
		101.SCH	XBRL Taxonomy Extension Schema
		101.CAL	XBRL Taxonomy Extension Calculation
		101.DEF	XBRL Taxonomy Extension Definition
		101.LAB	XBRL Taxonomy Extension Labels
		101.PRE	XBRL Taxonomy Extension Presentation

* This exhibit relates to compensatory plans or arrangements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		NEWMONT MINING CORPORATION
		(Registrant)

Date: October 25, 2018		/s/ NANCY K. BUESE
		Nancy K. Buese
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)

Date: October 25, 2018		/s/ JOHN W. KITLEN
		John W. Kitlen
		Vice President, Controller and Chief Accounting Officer
		(Principal Accounting Officer)