Gold Market Update Improving Fundamentals N EWMONT January 2002

Gold Market Update

Improving Fundamentals

NEWMONT

January 2002

NewmontMiningCorporation

January 2002 - Gold Market UpdateImproving Fundamentals

Page 2

Improving Market Fundamentals

Primary Bullish Factors

Outlook for Declining Gold Supply

Strong Physical Demand Opportunities & Trends

Coordinated Industry Marketing Program

Reduced Incentives for Hedge-Related Selling

Gold Market Dynamics Overview

Promising Investment Environment



Page 3

Outlook for Declining Gold SupplySignificantly Slowing Production Growth

New mine supply has slowed sharply in recent years

Source: Gold Fields Mineral Services & USB Warburg.

-12%

-8%

-4%

0%

4%

8%

12%

1969 1974 1979 1984 1989 1994 1999 2004E

Ye

ar

on

Ye

ar

% C

ha

ng

e



Page 4

Declining Leading Production Indicators Substantial reductions in capital programs and projects Significant cut-backs in exploration budgets

CAPEX/Oz Produced for Large N.A. Producers

Source: Goldman Sachs,GFMS, Metals Economics Group & Company Annual reports

Outlook for Declining Gold Supply (continued)

0

500

1000

1500

2000

2500

3000

3500

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

US$

millio

ns

190

220

250

280

310

340

370

400

US$

per o

unce

Exploration Expenditure on Gold, US$m Average Gold Price, US$/oz

Exploration Spending & Average Gold Price

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

CAPE

X/O

z. P

rodu

ced



Page 5

Sharpest Decline Expected Since 1976 Consolidation & fewer credible gold projects Little additional production for the next 5 years

0500

1,0001,5002,0002,5003,0003,5004,0004,500

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

e

To

nn

es

Mine production Central bank salesOld gold scrap Net hedgingImplied disinvestment

Source: Goldman Sachs outlook.

0500

1,0001,5002,000

2,5003,0003,5004,0004,500

2001e 2003e 2005e 2007e 2009e

Mine production Central bank salesOld gold scrap Net hedgingImplied disinvestment

To

nn

es

Global Gold Supply (1989-2000) Global Gold Supply (10-Year Outlook)




Page 6

Central Bank Agreement on Gold September 1999 Agreement between 15 European

Central Banks termed the “Washington Agreement” Austria, Germany, France, Italy, Holland, Belgium, Finland, Ireland, Luxembourg,

Portugal, Spain, Sweden, Switzerland, UK, European Central Bank

Source: GFMS & JP Morgan Research

Agreed to limit sales to 400 tonnes annually through 2004

Removed much of the uncertainty over future Central Banks sales & lending activities

U.K. Central Bank 20 tonne bimonthly sales will be completed in 2Q 2002


WA Supporters

37%

WA Signatories

47%

Outside of WA

16%

15,772tonnes

12,313tonnes

5,200tonnes

Composition of C.B. Gold Holding



Page 7

Strong Physical Demand Opportunities

Solid Jewelry Demand Backed by Unprecedented Marketing Initiative

Strong Physical Demand Growth Trends

Initiation of Global Marketing Campaign

Estimated 340-500 additional tonnes of gold jewellery demand by 2006

Possible $30-$40/oz increase in spot price

Actual (WGC)

Actual (GFMS)

Model*

0

100

200

300

400

500

US

T onnes

1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

•Opportunity to improveappeal relative to substituteproducts

•Opportunity to inc reasemedia presence

•Opportunity to enhance thepremium image of gold

*McKinsey modelled changes in demand for gold jewellery as functions of changes in gold price, income per capita and population. There are very high correlations for most countries between actual recorded volumes and the model between 1980 and 1995.

Source:Murenbeeld & Associates; GFMS; WGC; McKinsey analysis

US Jewelry Demand



Page 8

Reduced Incentives for Hedgers

“To Hedge or Not to Hedge?” Views of Non-Hedgers

Preserve gold equity’s embedded option value– Maintain unlimited upside appreciation potential

Reduce the “supply acceleration” impact of hedging Views of Active Hedgers

Take advantage of gold’s contango to enhance revenues– Significantly reduced contango during 2001

Reduce cash flow volatility & downside risk– Requires the sale of some gold upside optionality



Page 9

Significantly Compressed Contango

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Mar

-00

May

-00

Jun-

00

Aug

-00

Sep-

00

Oct

-00

Dec

-00

Jan-

01

Mar

-01

Apr

-01

Jun-

01

Jul-

01

Aug

-01

Oct

-01

Nov

-01

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.01-Year Lease Rate

1-Year LIBOR ($US)

Contango

`

Declining US$ interest rates

+ Stable to higher gold lease rates

= Lower contango At 1.0% contango,

1-year forward gold prices are less than $3 higher than spot prices

Reduced Incentives for Hedgers

Source: JP Morgan Research



Page 10

Gold Market Dynamics Overview

Central Bank Lending & Producer Hedging OverviewGold Players Central Bank Lending

Facilitates short selling Bullion Banks &

Speculative Investors Borrow gold & sell short Require future gold flow

to repay borrowed gold Gold Producers

Sell gold forward Provides source of

liquidity for short sales

Gold on Loan

Gold Sold intoM arket

$ Proceedsfrom G old Sale

Invested

Return flow ofleased gold

with deliveryfrom Producer

on forwardcontracts

$ $ $ $

$$$$

$

$

Gold delivery stream onForward Contract

$ Proceeds stream from Sale of Goldat Forward Price on Contango at 4%

$ Interest & principle stream onInvested Gold Sales Proceeds at 6%

$ LeasePayment

stream forLeased Gold

at 2%

$

Central Banks(Large Gold

Reserveson Deposit)

$

Open MoneyMarket

$ $

$

Open GoldMarket

1

2

3

4

Gold MiningCompanies(Producers)

Gold BullionDealers/ Trading

Banks



Page 11

Weakening US$ Could Improve Gold Price Gold Behaving as Currency

US$ trading at 16 year highs Gold stocks can hedge against US$ weakness

Source - JP Morgan

US Trade Weighted Dollar versus Gold PriceStrong Inverse Correlation USTW$ & US$ Gold


y = -3.8582x + 744.97

R2 = 0.9041

$225

$250

$275

$300

$325

$350

$375

$400

$425

85 95 105 115 125 135

US Trade Weighted Index (Federal Reserve Board Dollar Index)

US

$ G

old

Pri

ce

pe

r O

un

ce

December 20, 2001

$200

$250

$300

$350

$400

$450

1994 1995 1996 1997 1998 1999 2000 2001

80

90

100

110

120

130

140

US$ Gold US Trade Weighted Index (Federal Reserve Board Dollar Index)



Page 12

Hedge funds less active in shorting gold

Increasing US equity market uncertainty

Increasing global economic uncertainty

Gold Stocks Up 25% YTD,S&P500 Down 14%

Source - M. Murenbeeld Associates Inc.


S&P 500 Index/Gold Price (1871–2001)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1871

1876

1881

1886

1891

1896

1901

1906

1911

1916

1921

1926

1931

1936

1941

1946

1951

1956

1961

1966

1971

1976

1981

1986

1991

1996

2001

Inde

x/(U

S$/

oz.)



Page 13

Changing Real Interest Rate Environment

250

270

290

310

330

350

370

390

410

430

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

US

Dol

lars

90-Day T-Bill less 12 Month Inflation Rate

-0.500.000.501.001.502.002.503.003.504.004.50

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001Yi

eld

(%)


US$ Gold Prices

Potential negative real interest rates

The last time real interest rates were negative…

US$ gold prices rose from $330 to $410 per oz.



Page 14

Gold Poised for Significant Upside Appreciation Mine output set to decline Industry marketing initiative holds significant

potential Hedging market fundamentals deteriorating Central bank sales stabilizing World economic & political uncertainty increasing

Improving Fundamentals - Conclusions



Page 15

Safe Harbor StatementPRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT

These materials include forward-looking information and statements are intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Forward-looking statements are generally identified by the words "expect," "anticipates," "believes," "intends," "estimates" and similar expressions. The forward-looking information and statements in these materials are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Newmont, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the public filings with the U.S. Securities and Exchange Commission (SEC) made by Newmont. Such risks include, but are not limited to, gold price volatility, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans.

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Gold Market Update Improving Fundamentals N EWMONT January 2002