Newmont Corporation · NYSE:NEM
Newmont — Newmont Mining — Investor Presentation (September 2005)
32 slides from Newmont's investor presentation, Sep 28, 2005
Slide 1: Our Competitive Advantage
Our Competitive Advantage — NEWMONT
Slide 2: Executive Speakers
Executive Speakers Wayne W. Murdy Chairman & Chief Executive Officer Pierre Lassonde President September 28, 2005
Slide 3: Cautionary Statement
CAUTIONARY STATEMENT PRIVATE SECURITIES LITIGATION REFORM ACT SAFE HARBOR STATEMENT This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that are intended to be
Slide 4: Top Investor Questions
Top Investor Questions 1) What is driving the gold price? 2) What about gold as currency? 3) Where is the gold price going? 4) Can you replace reserves? 5) Do you need to make acquisitions? 6) Are you looking to diversify? 7) What is your current outlook? 8) How do you manage political risk? 9) Can
Slide 5: 1) What is driving the gold price?
1) What is driving the gold price?
Slide 6: Declining Mine Supply & Rising Jewelry Demand
Declining Mine Supply & Rising Jewelry Demand 3,200 3,000 2,800 Tonnes 2,600 2,400 2,200 2,000 2001 2002 2003 2004 2005F Mine Production Jewelry Demand September 28, 2005 Source: GFMS Mine Production Down On Average 2% per year 2001 – 2004 Mine Production Down 5% in 2004 vs. 2003 Jewelry Demand Incr
Slide 7: 2) What about gold as currency?
2) What about gold as currency?
Slide 8: Deteriorating US$
Deteriorating US$ Gold vs. US Current Account Current Account Deficit Gold Price 2% 1% 0% -1% -2% Percent of GDP -3% -4% -5% -6% -7% 1968 1972 1977 1981 1986 1990 1995 1999 2004 1971 Nixon Gold Window 1978 Carter Bonds 1987 Stock Market Crash Source: Bloomberg - Through March, 2005 $800 $700 $600 $5
Slide 9: Gold Bull Market: Rising in All Currencies
Gold Bull Market: Rising in All Currencies 70% 60% 50% 40% Growth 30% % 20% 10% 0% -10% 2002 2003 2004 2005 USD Gold Yen Gold Euro Gold Source: Bloomberg September 28, 2005
Slide 10: 3) Where is the gold price going?
3) Where is the gold price going?
Slide 11: Bull Market in Hard Assets
Bull Market in Hard Assets Dow Jones Average vs. Gold Dow/Gold 30 20 10 0 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 High of 18.44 in August 1929 3.5 Year Duration Low of 1.95 in February 1933 High of 28.00 in January 1966 High of 42.35 in August 1999 1
Slide 12: 4) Can you replace reserves?
—™ NEWMONT. 4) Can you replace reserves?
Slide 13: Million Acres in World Class Gold Districts
33 Million Acres in World Class Gold Districts 100 80 60 40 20 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 North America Central Asia & Indonesia South America Australia Ghana Newmont Reserve Growth History 110 million ounces at $12.80 per ounce September 28, 2005
Slide 14: 5) Do you need to make acquisitions?
5) Do you need to make acquisitions?
Slide 15: Portfolio & Investment Management Expertise
Portfolio & Investment Management Expertise data(ca;COS.UN) LS: 114.020 NET: 0.020 Canadian Oil Sands Trust Canadian Oil Sands Trust Newmont’s avg. cost = $45.00 120.000 115.000 114.020 110.000 105.000 100.000 95.000 90.000 85.000 80.000 75.000 70.000 65.000 60.000 55.000 50.000 45.000 40.000 Daily
Slide 16: 6) Are you looking to diversify?
6) Are you looking to diversify?
Slide 17: Gold Assets Generate Over 85% of Revenues
Gold Assets Generate Over 85% of Revenues 2004 Revenue Diversified Royalty and Dividend Income 2% Copper Revenue1 13% Gold Revenue 85% Strategic Investment Goals: *Maintain Gold Multiple *Earn Above Average Returns 1) Copper revenue based on proportional ownership of Batu Hijau at 53%. September 28,
Slide 18: 7) What is your current outlook?
7) What is your current outlook?
Slide 19: 2005 Outlook
2005 Outlook North America 2005E 2.9 Million Ounces at $305 per ounce South America 2005E 3.1 Million Ounces at $146 per ounce Australia/NZ 2005E 1.6 Million Ounces at $308 per ounce Indonesia 2005E 0.7 Million Ounces at $150 per ounce 8.4 – 8.5 million consolidated gold ounces 6.5 – 6.6 million equ
Slide 20: 8) How do you manage political risk?
8) How do you manage political risk?
Slide 21: Portfolio With Balanced Political Exposure
Portfolio With Balanced Political Exposure 2004 Gold Sales: 7.0mm equity ozs 2004 Reserves: 92.4mm equity ozs AUSTRALIA/ NEW ZEALAND 1.9 mm ozs NORTH AMERICA 2.7 mm ozs 27% 39% 38% 23% 7% 4% PERU 1.6 mm ozs INDONESIA 0.5 mm ozs CENTRAL ASIA 0.3 mm ozs AUSTRALIA/ NEW ZEALAND 15.1 mm ozs NORTH AMERICA
Slide 22: 9) Can you manage cost pressures?
9) Can you manage cost pressures?
Slide 23: Cost Inflation Rate of Less Than 1.5% Per Annum
Cost Inflation Rate of Less Than 1.5% Per Annum $450 $400 $350 Gold Price ( $/ounce) $300 $250 $200 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 $275 $250 $225 $200 Total Cash Cost $175( $/ounce) $150 Newmont Total Cash Costs Long - Term Newmont Cost Trend Gold September 28, 2005
Slide 24: Over Two Thirds US$ Denominated Costs
Over Two Thirds US$ Denominated Costs $700 $600 $500 $400 $300 $200 $100 $0 Newmont Cash Cost Percentiles1 2002 = 56th Percentile 2004 = 38th Percentile 2005E = 38th–40th Percentile H1 2005 Industry Cash Costs (2) 2004 Industry Cash Costs 2002 Industry Cash Costs Improved Competitive Cost Position 0
Slide 25: 10) What are you doing to address costs and future growth?
10) What are you doing to address costs and future growth ?
Slide 26: 1.8 Million Ounces Annually at < $220 per Ounce
1.8 Million Ounces1 Annually at < $220 per Ounce Future Projects Leeville, Nevada Production Begins: Q4 2005E Reserves: 2.6 mm ozs Annual Production: ~500,000 ounces Phoenix, Nevada Production Begins: 1Q 2006E Reserves: 8.5 mm ozs Annual Production: ~380,000 ounces Ahafo, Ghana Production Begins: 2H
Slide 27: 11) What will you do with your surplus cash flow?
11) What will you do with your surplus cash flow?
Slide 28: Financial Flexibility
Financial Flexibility Industry Leading Balance Sheet Investments + Net Debt + Mark-to-Market 1.0 .5 .0 (.5) billions (1.0) $ (1.5) (2.0) (2.5) (3.0) NEM (0.3) 0.0 (0.7) (1.6) (1.0) Net Debt Investments Derivatives MTM Source: Company June 30, 2005 financials. Annual dividends raised from $0.12/share
Slide 29: Newmont's Competitive Advantages
Newmont’s Competitive Advantages 33 Million Acres of Land in the World’s Best Gold Districts Newmont Capital’s Portfolio and Investment Management Expertise Industry Leading Balance Sheet and Financial Flexibility Gold Price Leverage “No Gold Hedging” Philosophy Most Liquid Gold Stock ~$200 Million/
Slide 30: Our Competitive Advantage
Our Competitive Advantage — NEWMONT
Slide 31: Supplemental Information
Supplemental Information Year ended 2003 2004 December 31, ($ million) Total Gold Total Gold Costs applicable to sales under GAAP $1,655.8 $1,935.9 Minority interest (192.2) (262.1) Reclamation/accretion expense (13.1) (16.9) Write-down inventories (12.9) (13.1) Purchase ore and other (33.7) (37.4)
Slide 32: Supplemental Information
Supplemental Information Year ended 2000 2001 2002 December 31, ($ million) Total Gold Total Gold Total Gold Costs applicable to sales under GAAP $1,065.9 $1,118.1 $1,580.5 Minority interest (91.9) (123.7) (173.0) Reclamation/accretion expense (18.7) (19.8) (25.4) Write-down inventories (5.0) (25.1)
Newmont Mining — Investor Presentation (September 2005) on 6ix