DBRS Confirms Newmont Mining Corp. at A (low) and R-1 (low)

Dominion Bond Rating Service (“DBRS”) has today confirmed the Senior Unsecured Debt and Commercial Paper ratings of Newmont Mining Corporation (“Newmont” or the “Company”) at A (low) and R-1 (low), respectively. The trends are Stable.

The confirmation reflects Newmont’s stature as the world’s largest gold miner, its conservative financial profile, and its competitive cash cost position. In 2004, the Company produced record revenues, operating, and net income on the back of a strong gold price (the 2004 average realized gold price for Newmont was US$412/ounce). These record earnings translated into a record cash flow from operations of US$1.4 billion (up 55% from 2003).

For the first half of 2005 (H1 2005), DBRS notes that the Company’s performance continues to be strong; however, it will not match the records posted in 2004. DBRS believes that this is due to a combination of lower gold production (2005 production will be 5% lower than the previous year due to lower grades at its operations) and higher costs (increasing raw materials, consumables, and energy prices).

Due to its significant operations in the U.S. (about 40% of its 2003 production) and the fact that about 70% of its operating costs are denominated in U.S. dollars, Newmont is less affected by currency fluctuations than many of its peers, although some exposure exists (especially with the Australian and Canadian dollars). The Company has a non-gold hedging policy, exposing it to the upside of the gold price (though increasing the volatility of earnings). However, a relatively stable earnings stream from its investment portfolio (US$66 million in 2004) and diversification from its low-cost copper operations reduce earnings volatility. Profitability has increased over the past two years (return on equity was 7.6% for 2003 and 2004), yet is still low for the rating.

The balance sheet is one of the most conservative in the industry, with gross debt of 19% and net debt of 6% (as of June 30, 2005). Cash flow-to-total debt remains strong at 0.5 times (as of June 30, 2005). Newmont will fund its growth program (budgeted capex of US$1.2 billion for 2005) with future cash flows and cash balances (US$1.8 billion at June 30, 2005). New debt issuance will likely be limited to that required for political risk mitigation. Newmont’s development portfolio should allow it to return to the 7.0 million ounce production level by 2007.

DBRS expects Newmont’s balance sheet to weaken somewhat in the short term, as the Company funds its capex program. In the long term, the balance sheet should strengthen as the new mines come into production.

Based on the strength of the Company’s operational cash flows, pipeline of development projects, large reserve base, and strong balance sheet, DBRS expects Newmont to maintain its strong credit profile.