Newmont Mining Corporation (NYSE: NEM) is the world's second largest gold producer by ounces produced. The company has mining operations in the United States, Australia, Africa, and several other international locations.^[1] Although Newmont maintains silver, copper, and zinc operations, gold accounted for 78% of Newmont's net income in 2007.^[1] Newmont ended that year with gold reserves, or un-mined gold still in the ground, of 86.5 million ounces^[1] and sales of 6.2 million ounces of gold that generated over $4 billion in net revenue.^[2]

Since 2001, Newmont's revenues have benefited from rapidly rising gold prices, which have gone from $271 per ounce in 2001 to as high as $875 per ounce in the first quarter of 2008.^[3] High gold prices have fattened the company's operating margins, resulting in record earnings. Newmont's total gold production, however, decreased 9% between 2005 and 2007 because the company's larger, more mature mines dropped off in production capacity (due to low ore grades from the remaining metals in the mine) at a time when virtually no new discoveries were made across the mining industry.^[4] Newmont depletes its reserves at 10 ounces a minute and needs a replacement discovery rate of near 14 ounces a minute, which is problematic since the gold industry is spending more and more on exploration without discovering reserves as large as it used to - only 4 percent of gold deposits in the world hold more than five million ounces. ^[5]

(Read more at Wikinvest )