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Rating Action:

Moody's upgrades Newmont's Ratings; Newmont Mining Sr. Unsecured to Baa1; rating outlook stable

26 Jul 2010

Approximately $3.1 billion of debt upgraded

New York, July 26, 2010 -- Moody's Investors Service upgraded Newmont Mining Corporation's (Newmont) senior unsecured debt ratings to Baa1 from Baa2 and the senior unsecured shelf rating to (P)Baa1 from (P)Baa2. At the same time, Moody's upgraded Newmont USA Limited's senior unsecured ratings to Baa1 from Baa3. Newmont USA is a wholly owned subsidiary of Newmont Mining Corporation, the parent holding company.

The upgrade reflects the improved financial profile of Newmont and stronger debt protection metrics as evidenced by the LTM March 31, 2010 EBIT/interest ratio of 12x and debt/EBITDA ratio of 1.1x. While stronger gold prices have been a key driver to the improved performance, Newmont has been able to increase production levels over the last several years and maintain a reasonable cost applicable to sales position, contributing therefore to improvement in realized margins. While we expect gold prices to moderate, we believe that the improved metrics are sustainable at levels appropriate for a Baa1 rating. The upgrade also considers Newmont's substantive cash position ($3.4 billion at March 31, 2010), which, together with expected strong cash flow generation, will support stronger internal funding of strategic growth projects over the next several years ($1.4 billion to $1.6 billion consolidated capital spending indicated for 2010 in the 10Q dated March 31, 2010).

The equalization of Newmont USA's rating to that of its parent reflects the strong revenue, earnings and cash flow contribution from Newmont USA to the consolidated performance and our expectation that this entity will continue to be a significant driver of performance over the next several years relative to other subsidiaries. The Baa1 rating for Newmont USA also reflects our expectation that Newmont will continue to manage its overall capital structure and liquidity in a way that will not negatively impact this strategically important subsidiary.

Newmont's rating reflects the company's position as a leading gold producer (5.3 million equity ounces sold in 2009) with important contributions from co product copper sales (226 million equity copper pounds sold in 2009), particularly from the Boddington and Batu Hijau mines. The rating also acknowledges the company's geographic diversity with production derived approximately 32% from each of North and South America, 28% Asia Pacific, and 8% Africa but considers the geopolitical and operating risks associated with mining assets in Indonesia and Africa. However, the rating considers the ongoing need for reinvestment in new projects to maintain and grow production profiles given the depleting nature of the ore bodies as well as the inherent volatility in gold and copper prices.

The stable outlook reflects our expectation that Newmont will be able to meet its advised production profile of between 6.3 to 6.8 million ounces of gold and 540 to 560 million pounds of copper (both on a 100% basis). The outlook also incorporates our belief that gold prices will remain robust through 2010 and into 2011 given ongoing economic uncertainty on a global basis and as a consequence, Newmont should continue to evidence healthy metal margins and cash flow.

Given the ongoing capital investment requirements for Newmont to maintain and grow production levels, upward rating pressure over the next twelve to fifteen months is unlikely. However, the rating or outlook could be favorably impacted should the company be able to sustain, in a lower gold price environment, operating cash flow less dividends /debt of at least 30%, debt/EBITDA of no more than 2.5x and continue to maintain a solid liquidity position.

Negative pressure could develop should the company's liquidity position contract sharply, operating cash flow less dividends/debt track below 25%, debt/EBITDA track at 3x or greater or the company be negative free cash flow generative, other than on a temporary basis.

Upgrades:

..Issuer: Newmont Mining Corporation

....Multiple Seniority Shelf, Upgraded to (P)Baa1 from (P)Baa2

....Senior Unsecured Regular Bond/Debenture, Upgraded to Baa1 from Baa2

..Issuer: Newmont USA Limited

....Senior Secured Pass-Through, Upgraded to Baa1 from Baa3

....Senior Unsecured Regular Bond/Debenture, Upgraded to Baa1 from Baa3

Moody's last rating action on Newmont was September 15, 2009 when we assigned a Baa2 rating to the company's senior unsecured note issuance.

The principal methodology used in rating Newmont was Moody's Global Mining Industry Rating Methodology published in May 2009 and available on www.moodys.com in the Rating Methodologies sub-directory under the Research & Ratings tab. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Rating Methodologies sub-directory on Moody's website.

Headquartered in Greenwood Village, Colorado, Newmont Mining Corporation had revenues of $8.4 billion for the twelve months ended March 31, 2010.

New York
Brian Oak
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Carol Cowan
VP - Senior Credit Officer
Corporate Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgrades Newmont's Ratings; Newmont Mining Sr. Unsecured to Baa1; rating outlook stable
No Related Data.
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