Newmont Corporation · NYSE:NEM
Newmont — Investor Presentation (December 2020)
50 slides from Newmont's investor presentation, December 2020
Slide 1: Investor Presentation
Investor Presentation CREATING VALUE & IMPROVING LIVES DECEMBER 2020 THROUGH SUSTAINABLE, RESPONSIBLE MINING DECEMBER INVESTOR PRESENTATION NEWMONT CORPORATION 1
Slide 2: Cautionary Statement
Cautionary Statement CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS: This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended
Slide 3: The World's Leading Gold Company
The World’s Leading Gold Company #1 gold producer with >7M GEOs/yr through 2029 and significant exposure to other metals Industry’s best portfolio of world-class assets in top-tier jurisdictions Recognized sustainability leader committed to creating value and improving lives Proven operating mod
Slide 4: Newmont's Commitment to Improving Lives
Newmont’s Commitment to Improving Lives Our Commitments What We Value Most Ratings Health & safety Our People Inclusion & diversity MSCI Rating: A; Top quartile global gold mining company Sustainalytics ESG score: 92.1 Community relationships percentile relative to sector peers Local emp
Slide 5: Creating a Fatality, Injury & Illness-Free Environment
Creating a Fatality, Injury & Illness-Free Environment Significant Potential Event (SPE) Focused on eliminating fatalities through global 250 application of critical control management 200 >40,000 critical control-focused conversations in 150 the field this year 100 63% reduction in significan
Slide 6: The Industry's Best Portfolio in Top-Tier Jurisdictions
The Industry’s Best Portfolio in Top-Tier Jurisdictions World’s Leading Gold Company Eight world-class assets in top-tier Jurisdictions* Musselwhite Industry’s largest gold reserves of 95.7Moz and 63Moz in GEO reserves Nevada Gold Mines** Éléonore Stable production of >6Moz annually through 20
Slide 7: Steady Long-Term Production with Improving Costs
Steady Long-Term Production with Improving Costs INDICATIVE 10-YEAR GOLD PRODUCTION PROFILE * (ATTRIBUTABLE MOZ PER YEAR) 8 Total GEOs** 7 6 South America *** 5 Africa 4 Australia 3 2 North America*** 1 - 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 >7M GEO’s per year for the next decade *Indic
Slide 8: Project Pipeline to Sustain Production into 2040's
Project Pipeline to Sustain Production into 2040’s Scoping Prefeasibility Feasibility Definitive Feasibility Execution CC&V Underground Coffee Ahafo North Musselwhite Materials Handling Merian extension Pamour (Porcupine) Gold (Sabajo) Tanami Expansion 2 Oberon (Tanami) Ahafo UG (S
Slide 9: Superior Free Cash Flow Generation Across Cycles
Superior Free Cash Flow Generation Across Cycles ATTRIBUTABLE FREE CASH FLOW INCREASES WITH HIGHER GOLD PRICE* (INCREMENTAL FROM $1,200 BASE) >$19B >$17B +$2,800M >$15B +$2,400M >$13B +$2,000M >$11B +$1,600M >$9B +$1,200M >$7B +$800M >$5B +$400M (+40%) (+80%) (+120%) (+160%) (+200%) (+240%) (+280%)
Slide 10: Disciplined Capital Allocation Priorities
Disciplined Capital Allocation Priorities RESILIENT AND FLEXIBLE CAPITAL STRUCTURE ACROSS CYCLES Returning cash to shareholders Strengthening our balance sheet Investing in organic growth Declared third quarter dividend of Liquidity of $7.8B; cash position Progressing study work for Ahafo $0.4
Slide 11: Increasing Industry-Leading Dividend
Increasing Industry-Leading Dividend NEWMONT DIVIDEND FRAMEWORK Incremental Attributable Annual Free Cash Flow above $1,200/oz gold price* Maintains leading $1.00/share sustainable base dividend Targeting 40% – 60% of incremental attributable Free Cash +$3,600M Flow above $1,200/oz returned to s
Slide 12: Appendix
Appendix DECEMBER INVESTOR PRESENTATION NEWMONT CORPORATION 12
Slide 13: Twenty Years of Newmont's Corporate Responsibility
Twenty Years of Newmont’s Corporate Responsibility 2000 - 2005 2005 - 2010 2010 - 2015 2015 - 2020 Founding member of ICMM (2001) Initial signatory of the International Adopted Conflict-Free Gold Standard Sustainability and safety targets Cyanide Management Code (2005) (2013) included in compensatio
Slide 14: Intensive Focus on Responsible Business Practices
Intensive Focus on Responsible Business Practices TARGETS RECOGNITION Water Climate Transparency Climate 5% 30% #2 B reduction in freshwater CDP Climate assessment Reduction in absolute consumption by 2019: most transparent score reflective of and intensity based GHG exceeded target - company in the
Slide 15: Sustainability Program Aligned to Leading Practices
Sustainability Program Aligned to Leading Practices Accountability and transparency in setting public sustainability targets – 2021 targets * E Climate – By 2030, reduce emissions 30%; reduce Scope 3 15%, increase renewables 10% Water – Improve water efficiency; increase multi-stakeholder watershed
Slide 16: Creating Value; Momentum into Q4 and 2021
Creating Value; Momentum into Q4 and 2021 Record Produced 1.5M attributable ounces of gold** & 273K GEOs from co-products Q3 results Generated $1.6B in Operating Cash Flow and $1.3B of Free Cash Flow* Strong Q3 performance, on track to achieve 2020 guidance Superior operational execution Adv
Slide 17: Record Quarterly Free Cash Flow of $1.3 Billion
Record Quarterly Free Cash Flow of $1.3 Billion FINANCIAL METRIC Q3 2019 Q3 2020 Revenue ($M) $2,713 $3,170 +17% Adjusted Net Income ($M) * $292 $697 +139% Adjusted Net Income ($/diluted share) * $0.36 $0.86 +139% Adjusted EBITDA ($M)* $1,079 $1,663 +54% Cash from continuing operations ($M) $793 $1,
Slide 18: >95Moz in Gold Reserves with Substantial Resources
>95Moz in Gold Reserves with Substantial Resources Largest gold reserves in the industry Percent of Gold Reserves by Jurisdiction 2019 Reserve Highlights North America* South America Australia Africa 95.7 MOZ 63 MOZ Industry’s largest gold Gold equivalents from copper, 13% Reserves** silver, zinc, a
Slide 19: Eight World-Class Assets in Top-Tier Jurisdictions
Eight World-Class Assets in Top-Tier Jurisdictions Carlin Turquoise Ridge Cortez Boddington Tanami Ahafo Peñasquito Nevada (38.5%) >1 Million GEOs* 500–600,000 ozs* ~700,000 ozs** >1.5 Million GEOs* ~1.5Moz gold in 2019 AISC of ~$800/oz* AISC of ~$650/oz* AISC of ~$800/oz** AISC of
Slide 20: Sustainable, Stable Production Profile
Sustainable, Stable Production Profile ATTRIBUTABLE PRODUCTION (MOZ * ) Stable production 8.0 outlook of 6.2 – 6.7M Total GEOs 7.0 ounces per year (#1 in industry) 6.0 Additional 1.2 to 1.4M 5.0 gold equivalent ounces produced per year 4.0 ~$1.5B in additional 3.0 revenue per year generated fr
Slide 21: Culture of Cost Discipline and Productivity
Culture of Cost Discipline and Productivity CAS & AISC ($/OZ * ) Delivered $430M of $1,100 sustainable value from Full Potential program in $1,000 2019 $900 AISC declining to $800- $800 $900/oz by 2023 $700 Capital discipline maintained with $600 ~$1.0B of sustaining 2020E 2021E 2022E 2023E 20
Slide 22: What We Promised and What We Are Delivering
What We Promised and What We Are Delivering Commitments Realized Cash Flow Improvements* ($M) Portfolio of world-class assets in = Original run-rate commitment top-tier jurisdictions $240 $500 >7M GEOs/yr through 2029 Industry-leading 96Moz in gold reserves* Exceeding synergy targets by $120 $
Slide 23: Five Year Cost and Production Outlook
Five Year Cost and Production Outlook Guidance metric 2020E 2021E 2022E 2023E 2024E * Gold production (Mozs) 6.0 6.2 – 6.7 6.2 – 6.7 6.2 – 6.7 6.2 – 6.7 ** Other metal production (Mozs) 1.0 1.0 – 1.2 1.1 – 1.3 1.3 – 1.5 1.3 – 1.5 Total GEO production (Mozs) 7.0 7.3 – 7.8 7.3 – 7.8 7.6 – 8.1 7.6 – 8.
Slide 24: Recent Financing and Capital Activities
Recent Financing and Capital Activities DEBT REPAYMENT SCHEDULE * ($M) Strong, investment grade balance sheet: $1,000 Net debt to adjusted EBITDA* $1,000 = 0.4x as of September 30, $874 2020 $700 In Q3’19, refinanced ~$700M $600 with 10-year notes at 2.8% $550 $492 $450 In Q1’20, refinanced ~$
Slide 25: Tanami Expansion 2 Increases Profitable Production
Tanami Expansion 2 Increases Profitable Production INDICATIVE TANAMI PRODUCTION PROFILE (KOZS) Supports 550 – 600kozs at $600 – $700/oz AISC 800 Provides platform for future 600 growth at world-class asset * Production 150 – 200kozs 400 Unit cost ** >10% improvement 200 Capital $700 – $800M Inte
Slide 26: Ahafo Projects Extend Life, Improve Costs
Ahafo Projects Extend Life, Improve Costs Subika Underground Updated Mining Method Extends life with Safely captures Mining cost per ton Lower near-term higher underground higher efficiencies improvements production tons (2020 – 2021) 2020 – 2024 metrics Ahafo with investment Production (kozs) 550 –
Slide 27: Ahafo North - Best Unmined Deposit in West Africa
Ahafo North - Best Unmined Deposit in West Africa INDICATIVE AHAFO NORTH PRODUCTION PROFILE (KOZS) Open pit mine, stand-alone mill for processing 3.5Mozs of Reserve and 1,200 1.0Mozs of Resource* 1,000 Full funds decision expected 2021 800 Investment of $700-$800M with three year development t
Slide 28: Yanacocha Sulfides Advances Towards 2021 Approval
Yanacocha Sulfides Advances Towards 2021 Approval INDICATIVE YANACOCHA PRODUCTION PROFILE * (GEO ** KOZS, 100%) First phase focused on developing most profitable deposits to optimize risk and returns 800 Potential to extend operational life 600 to 2041; favorable drilling at Chaqui Central and N
Slide 29: Newmont's Years of Significant Gold Discoveries
Newmont’s 57 Years of Significant* Gold Discoveries GREENFIELDS 1979 2003 Gold Quarry Merian / Maggie 1991 Creek Elang 1963 Batu Hijau 2005 2009 2014 1988 Amulsar JV (Sold) Carlin Yanacocha 2004 Saramacca Illari La Herrandura JV (Sold) Diyadin 1982 (Sold) 2008 1972 Rain / Moolart McPhillamy’s JV 199
Slide 30: Exploration Strength Through Investments
Exploration Strength Through Investments GT Gold Triumph Gold Independence Gold Colorado Resources TMAC* Auryn Resources Azimut Exploration Aurion Resources Quebec Precious Metals Mawson Resources Sirios Resources Metals Creek Resources Probe Metals Pure Gold Mining Eleonore South JV Wabamisk JV Lib
Slide 31: Nevada Joint Venture Processes
Nevada Joint Venture Processes For contributing excluded assets Four Mile (Barrick), Fiberline (Newmont) and Mike (Newmont): Party that owns asset has obligation to contribute upon completion of successful Feasibility Study, which requires a project IRR of at least 15% Feasibility Study must be
Slide 32: Executive Leadership Team
Broad Management Experience Executive Leadership Team Tom Palmer Rob Atkinson Nancy Buese Jen Cmil President and CEO EVP and COO EVP and CFO EVP HR Dean Gehring Randy Engel Steve Gottesfeld Nancy Lipson EVP and CTO EVP Strategic Dev EVP and CSO EVP General Counsel Board of Directors Noreen Doyle, Gr
Slide 33: Diverse Board Led by Independent Chair
Diverse Board Led by Independent Chair Independent Directors Board Committees Audit Leadership Safety & Corporate Development & Sustainability Governance & Compensation Nominating Bruce R. Brook (C) Veronica Hagen (C) Jane Nelson (C) Noreen Doyle (C) Maura Clark Maura Clark Gregory Boyce (VC) Gregor
Slide 34: Executive Compensation Structure
Executive Compensation Structure Incentive vehicles balance key performance elements Pay mix (CEO % shown) Objectives/Alignment Personal Stock Price Value varies with NEM performance Bonus Performance Retention component 6% Base Salary Relative Long-term incentive to outperform gold 14% Stock co
Slide 35: 2020 Short-Term Incentive Plan
2020 Short-Term Incentive Plan Focus on metrics of high priority to improve focus and ability to execute Aligns with the strategy map and the mining business cycle Functional/personal goals cover additional annual strategic priorities Metrics Weighting Rationale Health & Safety • Focus on core
Slide 36: 2020 Strategy Map
2020 Strategy Map Environment, Social Health & Safety Operational Excellence Growth People and Governance OUR PURPOSE • A fatality, injury and illness free • Culture of continuous • Value accretive growth • Competitive advantage through • Access to land, resources and To create value and OBJECTIVES
Slide 37: 2020 Outlook by Region
2020 Outlooka by Region Consolidated Attributable Consolidated All-In Consolidated Consolidated Attributable Attributable Production (Koz, GEOS Production (Koz, GEOs Consolidated CAS Sustaining Costs b Sustaining Capital Development Capital Sustaining Capital Development Capital 2020 Outlook (+/-5%)
Slide 38: Longer-term Outlook
Longer-term Outlooka Outlook 2020E (+/-5%) 2021E 2022E 2023E 2024E Attributable Production (koz) 6,000 6,200 - 6,700 6,200 - 6,700 6,200 - 6,700 6,200 - 6,700 Attributable Co-products (GEOs Koz) 1,010 1,000 - 1,200 1,100 - 1,300 1,300 - 1,500 1,300 - 1,500 Consolidated Gold CAS ($/oz) 760 650 - 750
Slide 39: Adjusted net income (loss)
Adjusted net income (loss) Management uses Adjusted net income (loss) to evaluate the Company’s operating performance and for planning and forecasting future business operations. The Company believes the use of Adjusted net income (loss) allows investors and analysts to understand the results of the
Slide 40: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA Management uses Earnings before interest, taxes and depreciation and amortization (“EBITDA”) and EBITDA adjusted for non-core or certain items that have a disproportionate impact on our results for a particular period (“Adjusted EBITDA”) as non-GAAP measures to evaluate th
Slide 41: Free Cash Flow
Free Cash Flow Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is Net cash provided by (used in) operating activities less Net cash provided by (used in) operating activities of discontinued operations less Additions to property, p
Slide 42: Attributable Free Cash Flow
Attributable Free Cash Flow Management uses Attributable Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations that are attributable to the Company. Attributable Free Cash Flow is Net cash provided by (used in) operating activities after deducting net cash flows from o
Slide 43: All-in Sustaining Costs
All-in Sustaining Costs Newmont has developed a metric that expands on GAAP measures, such as cost of goods sold, and non-GAAP measures, such as costs applicable to sales per ounce, to provide visibility into the economics of our mining operations related to expenditures, operating performance and t
Slide 44: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Care and Sustainin Costs Research and Maintenanc g Capital All-In Treatment Applicable Development General and e and Other and and Lease All-In Ounces Sustaining Three Months Ended to Reclamatio and Administrativ Expense, Refining Related Sustaining (000) C
Slide 45: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Research Sustainin Costs and Care and g Capital Applicabl Developmen Maintenanc and All-In Treatmen e to t and General and e and Other t and Lease All-In Ounces Sustainin Nine Months Ended Sales(1)(2)(3 Reclamatio Exploration(5 Administrativ Expense, Refini
Slide 46: Gold All-in Sustaining Costs - 2020 Outlook
Gold All-in Sustaining Costs - 2020 Outlook A reconciliation of the 2020 Gold AISC outlook to the 2020 Gold CAS outlook is provided below. The estimates in the table below are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Sec
Slide 47: Co-Product All-in Sustaining Costs - 2020 Outlook
Co-Product All-in Sustaining Costs - 2020 Outlook A reconciliation of the 2020 Co-products AISC outlook to the 2020 Co-Products CAS outlook is provided below. The estimates in the table below are considered “forward-looking statements” within the 27A of the Securities Act of 1933, as amended, and Se
Slide 48: Net Debt to Adjusted EBITDA Ratio
Net Debt to Adjusted EBITDA Ratio Management uses net debt to Adjusted EBITDA as non-GAAP measures to evaluate the Company’s operating performance, including our ability to generate earnings sufficient to service our debt. Net debt to Adjusted EBITDA represents the ratio of the Company’s debt, net o
Slide 49: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the most recent Form 10-Q for the quarter ended September 30, 2020, and with the Cautionary Statement on slide 2 and the following notes below Outlook Assumptions. Outlook and projections use
Slide 50: Endnotes
Endnotes Adjusted Net Income is a non-GAAP metric. Adjusted Net Income per share refers to Adjusted Net Income per diluted share. See appendix or more information and reconciliation to the nearest GAAP metric. Free Cash Flow. FCF or Free cash flow are used herein is a forward-looking statement and i