Newmont Mining Corp. has released the second quarter financial and operating results, which include a negative $2.12-billion impact of strategic initiatives completed during the second quarter. For the quarter, the company reported a net loss of $2.06-billion $4.57 per share), compared with net income of $161-million (36 cents per share) for the second quarter of 2006.

Richard T. O’Brien, president and chief executive officer, said: “As we refocus our efforts on cost control and operational efficiency, we continue to expect gold sales of between 5.2 million and 5.6 million equity ounces at costs applicable to sales of between $375 and $400 an ounce for the year. For the quarter, our financial results were impacted by several strategic initiatives, including the writedown associated with the discontinuation of our merchant banking segment and the elimination of our remaining gold hedge positions. With the elimination of our gold hedges, Newmont is now the world’s largest unhedged gold producer. In July, we also completed a $1.15-billion convertible senior notes issue, providing further financial flexibility to complete the Boddington project in Australia, the gold mill at Yanacocha in Peru and the power plant in Nevada. As we turn our attention to our core gold business, we continue to optimize plans for our prospective gold opportunities, including the potential development of our Conga project in Peru and the Akyem project in Ghana.”

Nevada operating performance and outlook

Equity gold sales in Nevada increased in the second quarter of 2007 to 531,000 ounces from 496,000 ounces in the prior year quarter. Gold sales increased over the prior 12 months as Leeville and Phoenix both entered their first full year of commercial production. Open-pit ore mined increased 37 per cent to 10.7 million tons in the second quarter of 2007, up from 7.8 million tons in the prior year quarter. Underground ore mined increased 79 per cent in the second quarter of 2007 due to commencement of commercial production at Leeville and steady ramp-up toward full capacity. Ore milled increased 54 per cent to 5.9 million tons from 3.8 million tons in the prior year quarter. Milled ore grade decreased 22 per cent with the processing of lower-grade ore from Phoenix. Ore placed on leach pads decreased by 53 per cent from the prior year quarter due to the completion of mining at Lone Tree in 2006. Additionally, fewer leach ore tons were processed at Carlin, as the ore mined during the quarter contained a higher proportion of mill material.

In June, a ground subsidence occurred in an area of the Midas underground mine, resulting in an employee fatality. The state and federal mine safety regulators have suspended operations at the mine pending further review and investigation. At this time, it cannot be reasonably predicted when the mine will be reopened, however, the company does not expect a material impact on Nevada’s production. The company continues to expect equity gold sales in Nevada of between 2.3 million to 2.6 million ounces for 2007.

Costs applicable to sales increased in the second quarter of 2007 to $485 per ounce from $450 per ounce in the year ago quarter due to higher operating costs at Phoenix, as well as continued deployment of higher-cost underground and maintenance contracted services. Waste removal costs increased as a result of accelerated mining at Pete, Gold Quarry and Twin Creeks. Labour and input commodity cost escalation also continues to impact operating costs.

Costs applicable to sales for the full year in Nevada, excluding the impact of Phoenix, are projected to be within the expected range of between $375 and $400 per ounce. However, ongoing challenges at Phoenix will likely result in costs applicable to sales for Nevada of between $400 and $440 per ounce for the year. Potentially higher grades, improved throughput and increased recoveries at Leeville and Twin Creeks could provide cost-reduction opportunities for the remainder of 2007.

Phoenix update

Phoenix remains the primary risk factor impacting Nevada’s gold sales and costs applicable to sales outlook for the year. During the second quarter of 2007, Phoenix continued to experience lower than expected recoveries and throughput due to hard ore and reduced crusher availability. The company made improvements to the flotation circuit and installed a cyanide detoxification system to improve recoveries during the second quarter. Additionally, blasting improvements were made during the second quarter which enhanced fragmentation of the harder ore and increased throughput. The company continues to evaluate solutions to address continuing metallurgical issues, mill throughput and crusher availability, with a final optimization plan expected by mid-2008.

Nevada capital projects

Capital expenditures in Nevada were $119-million in the second quarter of 2007. Capital expenditures for the year are expected to remain between $560-million and $630-million, with spending primarily related to the construction of the power plant, mine equipment replacement and sustaining development. Construction of the 200 megawatt coal-fired power plant was approximately 77-per-cent complete at the end of the second quarter and remains on schedule for completion in mid-2008. Capital costs for the project are expected to remain between $620-million and $640-million. The lower cost of self-generated electricity, when compared with projected future market prices in the region, is expected to reduce Nevada’s costs applicable to sales by approximately $25 per ounce.

Yanacocha operating performance and outlook

Equity gold sales at Yanacocha decreased in the second quarter of 2007 to 160,000 ounces from 403,000 ounces in the prior year quarter due to a higher waste-to-ore ratio and the mining of lower ore grades. Ore mined decreased to 20.7 million tons in the second quarter of 2007 from 29.8 million tons in the prior year quarter. During the same periods, the amount of waste mined increased to 32 million tons from 25.5 million tons. Leached ore grade decreased by 47 per cent from 0.032 to 0.017 ounce per ton for the second quarter of 2007, primarily due to a different mine sequence at the La Quinua pit compared with the prior year quarter.

The company continues to expect equity gold sales of between 775,000 and 825,000 ounces for 2007. Second half production at Yanacocha is weighted to the fourth quarter due to the timing of ore to be placed on leach pads. Yanacocha’s gold sales for the remainder of the year could be adversely impacted by higher waste removal rates. Additional sales opportunities exist from inventory and higher ore grades during the second half of 2007.

Costs applicable to sales increased in the second quarter of 2007 to $426 per ounce from $185 per ounce in the year ago quarter, primarily due to lower production, a higher proportion of waste tons mined, and a valuation charge related to the La Quinua leach pad inventory. However, potential additional sales from higher grades and inventory reductions in the second half of 2007 could result in costs applicable to sales for the year toward the lower end or below the expected range of $340 to $360 per ounce.

Yanacocha capital projects

Consolidated capital expenditures at Yanacocha were $58-million in the second quarter of 2007. Yanacocha’s consolidated capital expenditures for the year are expected to remain between $310-million and $340-million. Progress on the gold mill continues as expected, with construction approximately 68 per cent complete at the end of the second quarter, with commercial production by mid-2008. Capital costs on the project remain between $250-million and $270-million. Once complete, the gold mill is expected to enhance recovery of complex ores, improve financial returns and extend the operating life at Yanacocha.

The company continues to optimize the Conga project with a development decision expected in 2008, pending the completion of further design review and community initiatives.

Australia/New Zealand operating performance and outlook

Australia/New Zealand sales increased in the second quarter of 2007 to 338,000 ounces from 316,000 ounces in the prior year quarter due to increased production at Tanami and Pajingo, partially offset by lower production at Kalgoorlie, Jundee and Waihi (Martha). Gold sales at Tanami increased 43 per cent in the second quarter of 2007 from 2006, due to a 44-per-cent increase in mill ore grade. Gold sales at Pajingo increased 11 per cent in the second quarter of 2007 from 2006 due to a 14-per-cent increase in ore tons mined, a 10-per-cent increase in tons milled and a 2-per-cent increase in mill ore grade as mining and ground conditions improved during the second quarter of 2007. Gold sales at Kalgoorlie decreased 13 per cent in the second quarter of 2007 compared with the prior year quarter, primarily due to an 11-per-cent decrease in mill ore grade due to the planned mining sequence. Gold sales at Jundee decreased 9 per cent in the second quarter of 2007 compared with 2006, primarily due to a 25-per-cent decrease in mill throughput, partially offset by a 28-per-cent increase in mill ore grade. Lower mill throughput was caused by the relocation of the Nimary ball mill to the Jundee mill. Gold sales at Waihi (Martha) decreased 10 per cent in the second quarter of 2007 from 2006, due to the planned transition to underground operations and the ramp-up to steady state milling of underground material. Mill ore grade at Waihi (Martha) increased to 0.378 ounce per ton, up from 0.112 ounce per ton in the prior year quarter due to the transition from open-pit to underground mining. Mill throughput decreased 73 per cent and average recoveries decreased 6 per cent as the mill began processing underground material. The company continues to expect equity gold sales in Australia/New Zealand of between 1.27 million and 1.32 million ounces for 2007.

Costs applicable to sales increased in the second quarter of 2007 to $456 per ounce from $388 per ounce in the year ago quarter, primarily as a function of adverse movements in the Australian dollar exchange rate, increased royalties due to the higher gold prices, as well as increased diesel, electricity and labour costs. The strengthening Australian dollar increased costs applicable to sales in Australia/New Zealand by approximately $43 per ounce from the prior year quarter. Costs applicable to sales increased 51 per cent at Jundee, primarily attributable to higher labour, maintenance and electricity costs, as well as increased waste removal costs. Electricity prices more than doubled due to higher natural gas prices. At Waihi (Martha), costs applicable to sales were 215 per cent higher, primarily due to the decreased gold production, lower mill throughput and lower average recoveries from the planned transition to underground operations. Costs applicable to sales increased 7 per cent at Kalgoorlie, primarily due to lower gold production caused by lower ore grade compared with the prior year quarter. Costs applicable to sales at Pajingo were steady year over year, primarily due to increased production offsetting the impact of higher maintenance and overhead costs. At Tanami, cost applicable to sales decreased 3 per cent, primarily due to increased production, partially offset by higher hauling charges due to longer hauling distances and increased royalties due to higher gold prices.

The company has revised its costs applicable to sales outlook for Australia/New Zealand for the year to between $490 and $515 per ounce, reflecting the adverse impact of the Australian dollar exchange rate appreciating above 0.75, as well as higher-than-expected operating costs at Jundee. For every 0.01 move in the Australian exchange rate, costs applicable to sales in the second half of 2007 are expected to change by approximately $5 to $6 per ounce above an assumed average exchange rate of 0.80.

Australia/New Zealand capital projects

Capital expenditures in Australia/New Zealand were $129-million in the second quarter of 2007. Including the impact of the strengthening Australian dollar, capital spending for the year is expected to be between $675-million and $730-million. Capital expenditures in Australia for the second half of 2007 are expected to change by roughly $5-million for every 0.01 move in the Australian dollar exchange rate above an assumed average exchange rate of 0.80. Capital expenditures increased during the second quarter, primarily related to Boddington. Development of the Boddington project remains on schedule and was approximately 44 per cent complete at the end of June, 2007, with start-up expected in late 2008 or early 2009. Newmont’s share of Boddington’s expected capital costs remains between $900-million and $1.1-billion.

Batu Hijau operating performance and outlook

On May 25, 2007, a minority partner at Batu Hijau fully repaid their loan and accrued interest, and as a result, the company’s economic interest was reduced to 45 per cent from 52.875 per cent. The company incurred an after-tax charge of $25 million in minority interest expense in the second quarter of 2007 to reflect the lower economic interest. The reduction of Newmont’s economic interest to 45 per cent would have effectively decreased the company’s Dec. 31, 2006, equity gold and copper proven and probable reserves by roughly 750,000 ounces and 700 million pounds, respectively.

Equity gold and copper sales at Batu Hijau decreased in the second quarter of 2007 to 44,000 ounces and 48 million pounds, respectively, from 71,000 ounces and 62 million pounds, respectively, in the prior year quarter. Equity sales decreased primarily due to timing of concentrate shipments at the end of the second quarter of 2007, as concentrate inventories were significantly higher compared with the prior year quarter. Copper production remained steady quarter over quarter, while gold production decreased 23 per cent due to lower gold grade compared with the prior year quarter. Total tons mined decreased by 24 per cent from the prior year quarter, primarily due to longer hauling distances. The waste-to-ore ratio increased to 5.9 in the second quarter of 2007, up from 0.95 in the prior year quarter, in preparation for the next phase of high-grade ore mining.

As a result of Newmont’s reduced 45 per cent equity interest in Batu Hijau, the company now expects equity gold and copper sales of between 210,000 and 230,000 ounces and between 190 million and 210 million pounds, respectively, in 2007, compared with the previous equity guidance of between 230,000 and 250,000 ounces of gold and between 210 million and 230 million pounds of copper. On a consolidated basis, the company continues to expect gold and copper sales to meet or exceed original expectations for 2007. Fewer waste tons were mined in the second quarter as compared with the first quarter and will continue to be lower during the second half of the year as mining progresses through waste material.

Total costs applicable to sales increased 38 per cent from the prior year quarter, primarily due to increased waste stripping and more ore processed from stockpiles during the second quarter of 2007 compared with the prior year quarter. Costs applicable to sales increased 14 per cent per ounce of gold and nearly doubled per pound of copper in the second quarter of 2007 from 2006, as a higher proportion of total operating costs were allocated to costs applicable to sales of copper during the second quarter of 2007 compared with the prior year quarter.

The company continues to expect costs applicable to sales to remain between $225 and $240 per ounce of gold and between $1.10 and $1.20 per pound of copper for the year as more ore tons are expected to be mined during the remainder of 2007. Additionally, a higher proportion of total operating costs could be allocated to costs applicable to sales of gold if gold prices and gold sales volumes continue to increase at a higher rate than copper prices and volumes.

The average realized copper price increased 74 per cent to $3.92 per pound from $2.25 per pound in the prior year quarter, as copper sales were completely unhedged in the second quarter of 2007. Copper sales in the prior year quarter were fully hedged, which reduced the average realized copper price.

Batu Hijau capital projects

Consolidated capital expenditures at Batu Hijau were $17-million during the second quarter of 2007. Batu Hijau’s consolidated capital expenditures for the year are expected to be at the lower end or below the current range of $140-million to $150-million, with spending focused primarily on sustaining mine development for the remainder of the year.

Ahafo operating performance and outlook

Ahafo sold 123,000 ounces in the second quarter of 2007, as ore tons mined and mill throughput were both in line with expectations. During the second quarter, mill ore grades continued to be higher than expected. The company continues to expect gold sales of between 410,000 and 450,000 ounces in 2007. Potential production opportunities may exist from continued higher ore grades, however, the risk of increased power rationing during the second half of the year could offset these benefits.

Ahafo’s costs applicable to sales were $384 per ounce for the second quarter of 2007, primarily due to lower-than-anticipated self-generated power requirements. Additionally, higher production helped to reduce unit costs applicable to sales. Continuing lower-than-anticipated power costs and higher than expected ore grades could reduce costs applicable to sales for the year to be at the lower end or below the expected range of $460 to $500 per ounce.

Construction of an 80-megawatt power plant was substantially complete at the end of the second quarter of 2007, with completion testing progressing well. Power production is expected to be available within a month. As a result of the mining industry’s initiative to install the power plant, the Ghanaian government has agreed, if required, to ration power proportionately between participating mines and other industrial and commercial customers.

Ghana capital projects

Capital expenditures in Ghana were $19-million in the second quarter. Capital expenditures for the year are expected to be at the lower end or below the current range of $180-million to $200-million. For the rest of 2007, capital projects in Ghana are targeted for surface mining equipment, cyanide recovery, permitting and resettlement.

Other operations performance and outlook

Equity gold sales for the Kori Kollo mine in Bolivia, the La Herradura mine in Mexico, and the Golden Giant mine in Canada decreased to 52,000 ounces in the second quarter of 2007 from 60,000 ounces in the year ago quarter. Gold sales decreased due to the completion of mining at Golden Giant, with remnant sales of 9,000 ounces in the second quarter of 2007, down from 14,000 in the year ago quarter. Gold sales at Kori Kollo decreased 23 per cent in the second quarter of 2007 from 2006. La Herradura gold sales increased 15 per cent in the second quarter of 2007 from the prior year quarter, primarily as a result of a 20-per-cent increase in ore tons mined and placed on the leach pad. The company expects equity gold sales of between 155,000 and 190,000 ounces in 2007 from its other operations.

Costs applicable to sales increased in the second quarter of 2007 to $295 per ounce from $251 per ounce in the prior year quarter. Costs applicable to sales increased 19 per cent at Kori Kollo in the second quarter of 2007, primarily due to lower production and higher waste removal costs. Costs applicable to sales increased 16 per cent at La Herradura also due to higher waste removal costs. The company continues to expect costs applicable to sales of between $305 and $325 per ounce for the year from Kori Kollo, La Herradura and Golden Giant.

Cash flow, capital and other

The company used net cash from continuing operations of $654-million in the second quarter of 2007, after a $469-million decrease in working capital, compared with net cash provided from continuing operations of $310-million in the prior year quarter. Cash flow used in operations during the second quarter of 2007 was primarily impacted by the pretax settlement of the price-capped forward sales contracts for $578-million, settlement of preacquisition Australia income taxes of Normandy for $276-million, fewer gold ounces and copper pounds sold and higher operating costs, partially offset by higher realized gold and copper prices.

Capital expenditures for the second quarter of 2007 were $351-million, primarily for the construction of the power plant and sustaining development in Nevada ($119-million), construction of the gold mill and leach pad expansions at Yanacocha in Peru ($58-million), construction of the Boddington project and other sustaining development in Australia/New Zealand ($129 million), as well as sustaining development in Ghana ($19-million). The company continues to expect consolidated capital expenditures of between $1.8-billion and $2.0-billion for 2007. The company expensed $193-million of depreciation, depletion and amortization for the second quarter of 2007, and has revised its depreciation, depletion and amortization outlook for the year to approximately $750-million to $800-million.

The 2007 tax rate (assuming $650 per ounce gold) was revised upward to between 42 per cent and 47 per cent. The tax rate range was revised due to certain second quarter, one-time transactions that had the impact of creating United States net operating losses, which caused the company to realize fewer foreign tax credits for the year, resulting in a higher effective tax rate.

The company incurred $36-million of general and administrative expenses during the second quarter of 2007, with anticipated expenses of between $155 and $165-million for the year. Including $25-million of net interest expense during the second quarter of 2007, the company continues to expect net interest expense of approximately $95-million to $105-million for the year. Including $13-million of advanced projects, research and development expenditures during the second quarter of 2007, the company continues to expect spending to be between $85-million and $100-million for the year.

Exploration review

Exploration expenditures for the second quarter of 2007 were $45-million, compared with $46-million in the prior year quarter. Near mine expenditures in the second quarter were $24-million, compared with $28-million in the prior year quarter. Greenfield expenditures in the second quarter of 2007 were $15-million, compared with $13-million in the second quarter of 2006. For 2007, the company continues to expect exploration expenditures between $170-million and $175-million, with roughly 55 per cent focused on near mine activity, approximately 20 per cent focused on greenfields initiatives and the remaining 25 per cent split between follow-up opportunity funds and technical support.

Exploration spending in North America is primarily focused on near mine programs in Nevada on the Carlin trend, Battle Mountain-Eureka trend and the Northern Nevada rift. Expenditures for the year are expected to be approximately $37-million, including $12-million of exploration spending that occurred during the second quarter.

Exploration spending in South America is primarily targeted on near mine programs at Yanacocha in Peru, as well as greenfield projects in the Guiana shield in South America and the Andes in Peru. Including $14-million of exploration spending during the second quarter, exploration expenditures for 2007 are expected to be approximately $34-million in the region, or approximately 20 per cent of the company’s total exploration budget. Oxide target drilling continued at Maqui Maqui and La Quinua. Infill drilling began at the company’s Merian II and Maraba discoveries at the Nassau joint venture in Suriname.

Including second quarter expenditures of $6-million in Australia/New Zealand, exploration spending for 2007 is expected to be approximately $24-million, or approximately 14 per cent of the company’s total exploration budget. Development drilling at Boddington intensified with up to nine core drill rigs targeting non-reserve material and reserve expansion. Deep drilling for extensions of the Callie deposit in the Tanami will employ three surface core rigs. Development drilling from underground platforms at the Jundee mine is progressing according to schedule.

Including exploration spending during the second quarter in Indonesia and other Asia districts, exploration spending for the year is expected to total approximately 2 per cent of the company’s exploration budget. Exploration programs in the region are primarily focused on greenfield initiatives in China and Indonesia.

Exploration spending in Africa totalled approximately $4-million during the second quarter. Exploration expenditures for the year are anticipated to be approximately $18-million, or roughly 10 per cent of the company’s total exploration budget for the year. Regional exploration programs throughout 2007 will focus on near mine programs in the Sefwi belt in Ghana, as well as other greenfield projects in the Greenstone belts of West Africa. Drill programs at Ahafo are exploring possible reserve and non-reserve mineralization expansions at depth, as well as potential underground targets.

Visit Newmont Mining online at www.newmont.com