The following discussion provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Newmont Mining Corporation and its subsidiaries (collectively, "Newmont," the "Company," "our" and "we"). References to "A$" refer to Australian currency, "C$" to Canadian currency, "NZ$" to New Zealand currency, "IDR" to Indonesian currency and "$" to United States currency.

This discussion addresses matters we consider important for an understanding of our financial condition and results of operations as of and for the three years ended December 31, 2008, as well as our future results. It consists of the following subsections:

• "Overview," which provides a brief summary of our consolidated results and financial position and the primary factors affecting those results, as well as a summary of our expectations for 2009;

• "Accounting Developments," which provides a discussion of recent changes to our accounting policies that have affected our consolidated results and financial position;

• "Critical Accounting Policies," which provides an analysis of the accounting policies we consider critical because of their effect on the reported amounts of assets, liabilities, income and/or expenses in our consolidated financial statements and/or because they require difficult, subjective or complex judgments by our management;

• "Consolidated Financial Results," which includes a discussion of our consolidated financial results for the last three years;

• "Results of Consolidated Operations," which sets forth an analysis of the operating results for the last three years;

• "Recently Issued Accounting Pronouncements," which summarizes recently published authoritative accounting guidance, how it might apply to us and how it might affect our future results; and

• "Liquidity and Capital Resources," which contains a discussion of our cash flows and liquidity, investing activities and financing activities, contractual obligations and off-balance sheet arrangements.

This item should be read in conjunction with our consolidated financial statements and the notes thereto included in this annual report.

Overview

Newmont is one of the world's largest gold producers and is the only gold company included in the S&P 500 Index and Fortune 500, and was the first gold company included in the Dow Jones Sustainability Index-World. We are also engaged in the exploration for and acquisition of gold properties. We have significant assets or operations in the United States, Australia, Peru, Indonesia, Ghana, Canada, New Zealand and Mexico.

We face key risks associated with our business. One of the most significant risks is fluctuation in the prices of gold and copper, which are affected by numerous factors beyond our control. Other challenges we face include capital and production cost increases and social, political and environmental issues. Operating costs at our mines are subject to variation due to a number of factors, such as changing commodity prices, ore grades, metallurgy, revisions to mine plans and changes in accounting principles. At foreign locations, operating costs are also influenced by currency fluctuations that may affect our U.S. dollar operating costs. In addition, we must continually replace reserves depleted

through production by expanding known ore bodies, by acquisition or by locating new deposits in order to offset the organic decline in production levels which occurs over the long term.

Summary of Consolidated Financial and Operating Performance

The table below highlights key financial and operating results:


                                                        Years Ended December 31,
                                                      2008         2007        2006

     Revenues                                       $  6,199     $  5,526     $ 4,882
     Income (loss) from continuing operations       $    829     $   (963 )   $   563
     Net income (loss)                              $    853     $ (1,886 )   $   791
     Net income (loss) per common share, basic:
     Income (loss) from continuing operations       $   1.83     $  (2.13 )   $  1.25
     Net income (loss)                              $   1.88     $  (4.17 )   $  1.76
     Consolidated gold ounces sold (thousands)(1)      6,255        6,184       7,186
     Consolidated copper pounds sold (millions)          290          428         435
     Average price received, net(2)
     Gold (per ounce)                               $    874     $    697     $   594
     Copper (per pound)                             $   2.59     $   2.86     $  1.54
     Costs applicable to sales(3)
     Gold (per ounce)                               $    440     $    389     $   288
     Copper (per pound)                             $   1.38     $   1.05     $  0.67

(1) Includes incremental start-up ounces of 20, 6 and 100 in 2008, 2007 and 2006, respectively. Incremental start-up includes the removal and production of de minimis saleable materials during development and is recorded as Other income, net of incremental mining and processing costs.

(2) After treatment and refining charges and excluding settlement of price-capped forward sales contracts.

(3) Excludes Amortization, Accretion, the 2007 Loss on settlement of price-capped forward sales contracts and the 2007 Midas redevelopment.

Consolidated Financial Performance

Gold revenues increased in 2008 compared to 2007 primarily due to an increase in the average realized price and an increase in consolidated gold ounces sold. Gold sales increased to 6.3 million ounces in 2008 from 6.2 million ounces in 2007, primarily due to higher production at Yanacocha, Ahafo and Australia/New Zealand, partially offset by lower production at Batu Hijau and Nevada. Copper revenues decreased in 2008 from 2007 due to lower throughput, grade and recovery at Batu Hijau and a decrease in the average realized price (see Results of Consolidated Operations below).

The gold price increases over the last three years were partially offset by lower production and higher production costs as we have seen significant increases in the costs of labor, fuel, power and other bulk consumables. In addition, our 2008 financial and operating results were impacted by the following:

• Reclamation and remediation costs ($102, primarily at former mining operations);

• Advanced projects, research and development expense ($166, primarily at our Fort a la Corne JV diamond, Hope Bay, Euronimba and Ghana investments);

• Losses on write-down of marketable equity securities and other assets ($251, as the credit crisis affected the market for junior mining companies);

• Write-down of property, plant and mine development ($137, primarily related to assets in Canada, Indonesia and Nevada); and

• Tax planning and restructuring ($159).

Liquidity

Our financial position was as follows:


                                                    December 31,
                                                  2008        2007

                  Total debt                     $ 3,542     $ 2,938
                  Total stockholders' equity     $ 7,102     $ 7,548
                  Cash and cash equivalents      $   435     $ 1,231
                  Marketable equity securities   $   621     $ 1,500

During 2008 our debt and liquidity positions were affected by the following:

• Net proceeds from the issuance of debt of $591;

• Net cash provided from continuing operations of $1,403;

• Capital expenditures of $1,875;

• Completion of the Miramar acquisition for $325;

• Dividends paid to common shareholders of $182;

• Dividends paid to minority interests of $389; and

• Changes in the value of our marketable equity securities as a result of broad declines in the equity markets.

Looking Forward

Certain key factors will affect our future financial and operating results. These include, but are not limited to, the following:

• Fluctuations in gold and copper prices;

• We expect higher 2009 consolidated gold sales of approximately 6.35 to 6.85 million ounces, primarily as a result of the start-up of Boddington, completion of the acquisition of the remaining 33.33% of Boddington, as well as increased gold sales at Yanacocha and Batu Hijau, partially offset by lower sales in Nevada;

• Costs applicable to sales - gold for 2009 are expected to be approximately $400 to $440 per ounce due to the start-up of lower cost production from Boddington (100%), higher expected gold sales from our Yanacocha and Batu Hijau operations, as well as lower oil price and Australian dollar exchange rate assumptions, partially offset by lower by-product credits resulting from lower copper price assumptions;

• We expect 2009 consolidated copper sales of approximately 460 to 510 million pounds at Costs applicable to sales of approximately $0.65 to $0.75 per pound as a result of higher expected sales, processing higher grade ore and lower waste removal costs.

• We anticipate capital expenditures of approximately $1,400 to $1,600 in 2009, with approximately 60% in Australia/New Zealand, 15% in Nevada and the remaining 25% invested at other locations. Approximately 45% of the 2009 capital budget is allocated to sustaining investments, with the remaining 55% allocated to project development initiatives, including completion of the Boddington project (100%) in Australia;

• In March 2009, we expect to close the acquisition transaction for the additional 33.33% interest in Boddington from AngloGold Ashanti Ltd. for $750 payable in cash at closing, $240 payable in cash and/or Newmont common stock, at our option, in December 2009, and a royalty capped at $100, equal to 50% of the average realized operating margin (Revenue less Costs applicable to sales on a by-product basis), if any, exceeding $600 per ounce, payable on one-third of gold sales from Boddington.

• We expect 2009 exploration expenditures of approximately $165 to $175 and 2009 advanced projects, research and development expenditures of approximately $120 to $150.

• In February 2009, we completed a public offering of $518 convertible senior notes, maturing February 15, 2012 for net proceeds of $504.

• In February 2009, we completed a public offering of 34,500,000 of our common shares for net proceeds of $1,233.

• The completion of the Boddington project as well as potential future investments in the Hope Bay project in Canada, the Akyem project in Ghana and the Conga project in Peru will require significant funding. Our operating cash flow may become insufficient to meet the funding requirements of these investments, fund our ongoing business activities and pay dividends. Our ability to raise and service significant new sources of capital will be a function of macroeconomic conditions, future gold and copper prices and our operational performance, among other factors. In the event of lower gold and copper prices, unanticipated operating or financial challenges, or new funding limitations, our ability to pursue new business opportunities, invest in existing and new projects, fund our ongoing business activities and pay dividends could be significantly constrained; and

• Our 2009 expectations, particularly with respect to sales volumes and costs applicable to sales per ounce or pound, may differ significantly from actual quarter and full year results due to the start-up of our Boddington project (100%) and variations in: mine planning and sequencing, ore grades and hardness, metal recoveries, waste removal, commodity input prices, foreign currency exchange rates and gold and copper sales prices.

Accounting Developments

Variable Interest Entities

In December 2008, the Financial Accounting Standards Board ("FASB") issued Staff Position No. FAS 140-4 and FIN 46(R)-8, "Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities" ("FSP FAS 140-4 and FIN 46(R)-8"). This FSP amends FASB Statement No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities" to require public entities to provide additional disclosures about transfers of financial assets. It also amends FASB Interpretation No. 46 "Consolidation of Variable Interest Entities" as revised to require public enterprises to provide additional disclosures about their involvement with Variable Interest Entities ("VIEs"). FSP FAS 140-4 and FIN 46(R)-8 are effective for the Company's fiscal year ending December 31, 2008. Newmont has adopted the disclosure requirements of FSP FAS 140-4 and FIN 46(R)-8 in the Company's VIE disclosures.

Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued FASB Statement No. 162, "The Hierarchy of Generally Accepted Accounting Principles" ("FAS 162") which identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with U.S. generally accepted accounting principles ("GAAP"). FAS 162 was effective November 15, 2008, which was 60 days following the Security and Exchange Commission's approval of the Public Company Accounting Oversight Board amendments to AU Section 411, "The Meaning of Present Fairly in Conformity with GAAP." The

adoption of FAS 162 has had no impact on our consolidated financial position, results of operations or cash flows.

Fair Value Accounting

In September 2006, the FASB issued FASB Statement No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of FAS 157 were adopted January 1, 2008. In February 2008, the FASB staff issued FSP No. 157-2 "Effective Date of FASB Statement No. 157" ("FSP FAS 157-2"). FSP FAS 157-2 delayed the effective date of FAS 157 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The provisions of FSP FAS 157-2 are effective for our fiscal year beginning January 1, 2009, and are not expected to have a significant impact on the Company.

In October 2008, the FASB issued FSP No. FAS 157-3, "Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active" ("FSP FAS 157-3"), which clarifies the application of FASB Statement No. 157, "Fair Value Measurements" ("FAS 157") in an inactive market. The intent of this FSP is to provide guidance on how the fair value of a financial asset is to be determined when the market for that financial asset is inactive. FSP FAS 157-3 states that determining fair value in an inactive market depends on the facts and circumstances, requires the use of significant judgment and in some cases, observable inputs may require significant adjustment based on unobservable data. Regardless of the valuation technique used, an entity must include appropriate risk adjustments that market participants would make for nonperformance and liquidity risks when determining fair value of an asset in an inactive market. FSP FAS 157-3 was effective upon issuance. We have incorporated the principles of FSP FAS 157-3 in determining the fair value of financial assets when the market for those assets is not active, specifically its marketable debt securities.

FAS 157 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 under FAS 157 are described below:

 Level 1     Unadjusted quoted prices in active markets that are accessible at
             the measurement date for identical, unrestricted assets or
             liabilities;
 Level 2     Quoted prices in markets that are not active, or inputs that are
             observable, either directly or indirectly, for substantially the
             full term of the asset or liability;
 Level 3     Prices 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 table sets forth our financial assets and liabilities measured at fair value by level within the fair value hierarchy. As required by FAS 157, 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 December 31, 2008
                                                        Total          Level 1         Level 2        Level 3

Assets:
Cash equivalents                                       $     14       $      14       $       -      $       -
Marketable equity securities                                621             621               -              -
Marketable debt securities                                   27               -               -             27

                                                       $    662       $     635       $       -      $      27

Liabilities:
Trade payable from provisional copper and gold
concentrate sales, net                                 $      5       $       5       $       -      $       -
Derivative instruments, net                                 140               -             140              -
85/8% debentures (hedged portion)                            92               -              92              -

                                                       $    237       $       5       $     232      $       -

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

Our marketable equity securities 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 is calculated as the quoted market price of the marketable equity security multiplied by the quantity of shares held by us.

Our marketable debt securities include investments in auction rate securities and asset backed commercial paper. We review fair value for auction rate securities and asset backed commercial paper on at least a quarterly basis. The auction rate securities are traded in markets that are not active, trade infrequently and have little price transparency. We estimated the fair values based on weighted average risk calculations using probabilistic cash flow assumptions. In January 2009, the investments in our asset backed commercial paper were restructured under court order. The restructuring allowed an interest distribution to be made to investors. The auction rate securities and asset backed commercial paper are classified within Level 3 of the fair value hierarchy.

Our net trade payable from provisional copper and gold concentrate sales is valued using quoted market prices based on the forward London Metal Exchange ("LME") (copper) and the London Bullion Market Association P.M. fix ("London P.M. fix") (gold) and, as such, is classified within Level 1 of the fair value hierarchy.

Our derivative instruments are valued using pricing models and we generally use similar models to value similar instruments. Where possible, we verify the values produced by our pricing models to market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measures of volatility, and correlations of such inputs. Our 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.

We have fixed to floating swap contracts to hedge a portion of the interest rate risk exposure of our 85/8% uncollateralized debentures due May 2011. The hedged portion of our 85/8% debentures are valued using pricing models which require inputs, including risk-free interest rates and credit spreads. Because the inputs are derived from observable market data, the hedged portion of the 85/8% debentures is classified within Level 2 of the fair value hierarchy.

The table below sets forth a summary of changes in the fair value of our Level 3 financial assets (asset backed commercial paper and auction rate securities) for the year ended December 31, 2008.

                  Balance at beginning of period           $ 31
                  Unrealized losses                          (7 )
                  Transfers in - auction rate securities      3

                  Balance at end of period                 $ 27

Unrealized losses of $6 for the period were included in Accumulated other comprehensive (loss) income as a result of changes in C$ exchange rates from December 31, 2007. Unrealized losses of $1 for the period were included in Accumulated other comprehensive (loss) income as a result of mark-to-market changes from December 31, 2007. As of December 31, 2008, the assets classified within Level 3 of the fair value hierarchy represent 4% of the total assets measured at fair value.

In February 2007, the FASB issued FASB Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("FAS 159"). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value, with the objective of improving financial reporting by mitigating volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The provisions of FAS 159 were adopted January 1, 2008. We did not elect the Fair Value Option for any of our financial assets or liabilities, and therefore, the adoption of FAS 159 had no impact on our consolidated financial position, results of operations or cash flows.

Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards

In June 2007, the Emerging Issues Task Force ("EITF") reached consensus on Issue No. 06-11, "Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards" ("EITF 06-11"). EITF 06-11 requires that the tax benefit related to dividend and dividend equivalents paid on equity-classified nonvested shares and nonvested share units, which are expected to vest, be recorded as an increase to additional paid-in capital. EITF 06-11 has been applied prospectively for tax benefits on dividends declared in our fiscal year beginning January 1, 2008. The adoption of EITF 06-11 had an insignificant impact on our consolidated financial position, results of operations or cash flows.

Income Taxes

On January 1, 2007, we adopted the provisions of FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes," ("FIN 48") an interpretation of FASB Statement No. 109, "Accounting for Income Taxes." FIN 48 clarifies the accounting and reporting for uncertainties in the application of the income tax laws to our operations. The interpretation prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax provisions taken or expected to be taken in income tax returns. The cumulative effects of applying this interpretation were recorded as a decrease in retained earnings of $108, an increase of $5 in goodwill, an increase of $4 in minority interest, a decrease in net deferred tax assets of $37 (primarily, as a result of utilization of foreign tax credits and net operating losses as part of the FIN 48 measurement process, offset, in part, by the impact of the interaction of the Alternative Minimum Tax rules) and an increase of $72 in the net liability for unrecognized income tax benefits.

Pensions

As of December 31, 2006, we adopted the provisions of FASB Statement No. 158, "Employers' Accounting for Defined Benefit Pension and Other Post-Retirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)" ("FAS 158"). FAS 158 requires employers that sponsor one or more defined benefit plans to (i) recognize the funded status of a benefit plan in its statement of financial position, (ii) recognize the gains or losses and prior service costs or credits that arise during the period as a component of other comprehensive income, net of tax, (iii) measure the defined

benefit plan assets and obligations as of the date of the employer's fiscal year-end statement of financial position, and (iv) disclose in the notes to the financial statements additional information about certain effects on net periodic cost for the next fiscal year that arise from delayed recognition of the gains or losses, prior service costs or credits, and transition asset or obligation. The impact of adopting FAS 158 decreased Accumulated other comprehensive income by $27 as of December 31, 2006.

Stock Based Compensation

On January 1, 2006, we adopted the fair value recognition provisions of FASB Statement No. 123(R), "Share-Based Payment " ("FAS 123(R)"). We adopted FAS 123(R) using the modified prospective transition method. Under this method, compensation cost recognized in 2006 included: a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant-date fair value estimated in accordance with the original provisions of FAS 123, and b) compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of FAS 123(R). As a result of adopting FAS 123(R), our Income from continuing operations and Net income for 2008 and 2006 was $10 ($0.02 per share) and $19 ($0.04 per share) lower, . . .