Newmont Corporation · NYSE:NEM
Newmont — FY2020 Earnings Presentation
39 slides from Newmont's earnings presentation, Feb 18, 2021
Slide 1: Full Year and Q4 2020 Earnings
Full Year and Q4 2020 CREATING VALUE & IMPROVING LIVES Earnings THROUGH SUSTAINABLE, FEBRUARY 18, 2021 RESPONSIBLE MINING FULL YEAR & FOURTH QUARTER 2020 EARNINGS 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: Tom Palmer
Tom Palmer CREATING VALUE & IMPROVING LIVES PRESIDENT & CHIEF EXECUTIVE OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING FULL YEAR & FOURTH QUARTER 2020 EARNINGS NEWMONT CORPORATION 3
Slide 4: 2020 Key Accomplishments
2020 Key Accomplishments SETTING RECORDS DESPITE A CHALLENGING YEAR PROTECTED OUR DELIVERED SUPERIOR CONTINUED INDUSTRY- ACHIEVED RECORD PROVIDED LEADING WORKFORCE & OPERATIONAL LEADING ESG PRACTICES FINANCIAL PERFORMANCE SHAREHOLDER RETURNS COMMUNITIES PERFORMANCE ✓ Navigating Covid from ✓ Set targ
Slide 5: Journey to Fatality and Injury-Free Environment
Journey to Fatality and Injury-Free Environment RECORD SAFETY PERFORMANCE IN 2020 ✓ Focused on eliminating fatalities through global application of critical control management ✓ >70,000 critical control-focused conversations in the field ✓ 63% reduction in significant potential events from 2019 ✓ Ac
Slide 6: World-Class Assets in Top-Tier Jurisdictions
World-Class Assets in Top-Tier Jurisdictions World’s Leading Gold Company ▪ Nine world-class assets in top-tier jurisdictions* Musselwhite ▪ Industry’s largest gold reserves of 94Moz 20% and 65Moz in GEO reserves Éléonore Nevada Gold Mines*** ▪ Stable production of ~8M GEOs* annually Turquoise Ridge
Slide 7: Largest Gold Reserves in Top-Tier Jurisdictions
Largest Gold Reserves in Top-Tier Jurisdictions REPLACED 80 PERCENT OF DEPLETION IN 2020 GOLD GOLD EQUIVALENT OUNCES Africa Silver 12% 12% North America 35% Other Australia 94 Moz 65 Moz 13% 20% Gold Reserves* & GEO Reserves* & 101 Moz 107 Moz Gold Resources** GEO Resources** Copper South America 75
Slide 8: Steady production through industry-best portfolio
Steady production through industry-best portfolio INDICATIVE 10-YEAR GOLD PRODUCTION PROFILE * (ATTRIBUTABLE MOZ PER YEAR) 9 Total GEOs ** 8 7 6 South America*** 5 Africa 4 Australia 3 2 North America*** 1 - 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 ~ 8 MILLION GOLD EQUIVALENT OUNCES FOR THE
Slide 9: Improving Margins and Investing in Our Future
Improving Margins and Investing in Our Future ATTRIBUTABLE PRODUCTION & AISC * (MOZ & $/OZ) $1,500 ▪ 2020 delivered 5.9 million 8.0 ounces** with AISC of $1,045/oz Total GEOs $1,300 ▪ 6.2 – 7.0 million ounces per 7.0 year for 2021 through 2025* * $1,100 AISC ▪ Ahafo North and Yanacocha 6.0 Sulfides
Slide 10: 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) ~$21.5B +$3,600M ~$15.5B +$2,400M ~$9.5B +$1,200M ~$3.5B (+171%) (+343%) (+514%) $1,200 $1,500 $1,800 $2,100 5 Year Cumulative Attributable Free Cash Flow**
Slide 11: Rob Atkinson
Rob Atkinson CREATING VALUE & IMPROVING LIVES CHIEF OPERATING OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING FULL YEAR & FOURTH QUARTER 2020 EARNINGS NEWMONT CORPORATION 11
Slide 12: Australia Well-Positioned for Growth in 2021
Australia Well-Positioned for Growth in 2021 Boddington South and North Pits Q4 2020 FY 2020 2021E ▪ Boddington delivered strong production from record mill performance; achieved throughput of 40.5Mt Gold production (Koz)* 304 1,165 1,330 ▪ Implementation of Autonomous Haulage progressing ahead of s
Slide 13: Tanami Expansion 2 Extends Mine Life to 2040
Tanami Expansion 2 Extends Mine Life to 2040 EXTENDS MINE LIFE NEW INFRASTRUCTURE ADDS PRODUCTION IMPROVES COSTS UPSIDE POTENTIAL Supports Tanami’s Delivers a 1.6km deep Annual production* Improves operating District expansion has future as a long-life, production shaft to increase of 150koz – costs
Slide 14: Africa Positioned to Deliver Higher Ounces in 2021
Africa Positioned to Deliver Higher Ounces in 2021 ▪ Akyem delivered strong production on higher grades and mill productivity improvements ▪ Ahafo generated consistent performance from higher grades at the open pits and underground ▪ Subika underground mining method change progressing ahead of sched
Slide 15: South America Delivers Strong Finish to 2020
South America Delivers Strong Finish to 2020 ▪ Merian achieved record mill throughput and recovery; produced 2 Moz of gold since reaching commercial production ▪ Cerro Negro focused on operating efficiency; improvement in ore tonnes mined and higher grade ▪ Yanacocha delivered higher grades as trans
Slide 16: North America Sets New Records in Q4
North America Sets New Records in Q4 CC&V Q4 2020 FY 2020 2021E ▪ Peñasquito delivered the year’s strongest quarterly performance, reaching higher gold grades and achieving record mill and Pyrite Gold production (Koz)* 435 1,457 1,760 Leach Plant performance ▪ Musselwhite conveyor and materials hand
Slide 17: Nancy Buese
Nancy Buese CREATING VALUE & IMPROVING LIVES CHIEF FINANCIAL OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING FULL YEAR & FOURTH QUARTER 2020 EARNINGS NEWMONT CORPORATION 17
Slide 18: Record Financial Performance in the Fourth Quarter
Record Financial Performance in the Fourth Quarter METRICS Q4 2019 Q4 2020 FY 2019 FY 2020 Profit Metrics Revenue ($M) $2,967 $3,381 +14% $9,740 $11,497 +18% Adjusted Net Income ($M)* $410 $856 +109% $970 $2,140 +121% Adjusted Net Income ($/diluted share)* $0.50 $1.06 +112% $1.32 $2.66 +102% Adjuste
Slide 19: Q4 Adjusted Net Income of $1.06 per Share
Q4 Adjusted Net Income of $1.06 per Share GAAP TO ADJUSTED NET INCOME ($/DILUTED SHARE) ** $0.20 $0.07 $0.03 ($0.06) ($0.18) $1.00 $1.06 GAAP Net income Sale of assets and COVID-19 specific Reclamation and Tax adjustments Other* Adjusted net from continuing fair value costs remediation and valuation
Slide 20: Disciplined Capital Allocation Priorities
Disciplined Capital Allocation Priorities RESILIENT AND FLEXIBLE CAPITAL STRUCTURE ACROSS CYCLES INVESTING IN RETURNING CASH MAINTAINING ORGANIC GROWTH TO SHAREHOLDERS FINANCIAL FLEXIBILITY ✓ Sustaining capital of ~$1B per year ✓ Industry-leading dividend and ✓ Liquidity of $8.5B and cash position o
Slide 21: Industry-leading Dividend Framework
Industry-leading Dividend Framework ▪ Leading $1.00/share sustainable base dividend ANNUALIZED DIVIDEND PAYOUT $2.80 - $3.70 ▪ Targeting 40% – 60% of incremental attributable Free Cash Flow above $1,200/oz returned to shareholders ▪ Evaluating gold price increments of ~$300/oz $2.20 - $2.80 ▪ Approv
Slide 22: Tom Palmer
Tom Palmer CREATING VALUE & IMPROVING LIVES PRESIDENT & CHIEF EXECUTIVE OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING FULL YEAR & FOURTH QUARTER 2020 EARNINGS NEWMONT CORPORATION 22
Slide 23: The World's Leading Gold Company
The World’s Leading Gold Company ✓ #1 gold producer with ~8M GEOs* per year through 2030 and significant exposure to other metals ✓ Industry’s best portfolio of world-class assets in top-tier jurisdictions ✓ Recognized sustainability leader committed to creating value and improving lives ✓ Proven op
Slide 24: Appendix
Appendix CREATING VALUE & IMPROVING LIVES THROUGH SUSTAINABLE, RESPONSIBLE MINING FULL YEAR & FOURTH QUARTER 2020 EARNINGS NEWMONT CORPORATION 24
Slide 25: 2021 Outlook by Region
2021 Outlooka by Region Consolidated Attributable Consolidated All-In Consolidated Consolidated Attributable Attributable b Production (Koz, GEOs Production (Koz, GEOs Consolidated CAS ($/ Sustaining Costs ($/ Sustaining Capital Development Capital Sustaining Capital Development Capital 2021 Outlook
Slide 26: 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 27: 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 28: 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 29: 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 30: Attributable free cash flow
Attributable free cash flow Three Months Ended December 31, 2019 Year Ended December 31, 2019 Attributable to Attributable to Attributable to Attributable to noncontrolling Newmont noncontrolling Newmont (1) (1) Consolidated interests Stockholders Consolidated interests Stockholders Net cash provide
Slide 31: 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 32: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Care and Sustaining Costs Research and Maintenance Treatment Capital All-In Applicable Development and Other and and Lease All-In Ounces Sustaining Three Months Ended to Reclamation and General and Expense, Refining Related Sustaining (000) Costs Per (1)(2)
Slide 33: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Care and Sustaining Costs Research and Maintenance Treatment Capital All-In Applicable Development and Other and and Lease All-In Ounces Sustaining Year Ended to Reclamation and General and Expense, Refining Related Sustaining (000) Costs Per (1)(2)(3) (4)
Slide 34: Gold All-in Sustaining Costs - 2021 Outlook
Gold All-in Sustaining Costs - 2021 Outlook A reconciliation of the 2021 Gold AISC outlook to the 2021 Gold CAS outlook are 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 Se
Slide 35: Co-Product All-in Sustaining Costs - 2021 Outlook
Co-Product All-in Sustaining Costs - 2021 Outlook A reconciliation of the 2021 Co-products AISC outlook to the 2021 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 36: 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 37: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the most recent Form 10-K for the year ended December 31, 2020 filed with the SEC on February 18, 2021 (including without limitation the risks related to COVID-19 under the heading “Risk Fact
Slide 38: Endnotes
Endnotes Reserves Estimates: The reserves stated in this presentation were prepared in compliance with Industry Guide 7 published by the United States SEC and represent the amount of gold, copper, silver, lead and zinc that we estimated, at December 31, 2020, could be economically and legally extrac
Slide 39: 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