Newmont Corporation · NYSE:NEM
Newmont — Newmont Mining — Merrill Lynch Global Metals, Mining & Steel Conference 2004
29 slides from Newmont's conference presentation, May 11, 2004
Slide 1: Take Stock in Gold
Exhibit 99.1 Take Stock in Gold Wayne W. Murdy Chairman & Chief Executive Officer Merrill Lynch Global Metals, Mining & Steel Conference Boston, MA May 12, 2004
Slide 2: 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 Section 21E of the Securities Exchange Act of 1934, as amended, that are intend
Slide 3: Introduction: Outline
Introduction Outline •Strategic Overview •Gold Fundamentals •Operating & Financial Results •2004 Guidance •Reserves and Exploration •Conclusion
Slide 4: Strategic Overview – Introduction
Strategic Overview –Introduction Gold Company “No Gold Hedging” Philosophy Large Land Position Conservative Balance Sheet Economic Value Drivers NAV per share Long-term Reserve replacement Free cash flow per share Short-term EPS May 12, 2004—Slide 4
Slide 5: Strategic Overview – Global Footprint
Strategic Overview –Global Footprint Gold Copper/Other Midas Twin Creeks Carlin Lone Tree Phoenix NEVADA Leeville
Slide 6: Gold Fundamentals – Historical Perspective
Gold Fundamentals – Historical Perspective Source: Bloomberg
Slide 7: Gold Fundamentals – Seasonality of Gold Prices
Gold Fundamentals –”Seasonality” of Gold Prices Spring/Early Summer Decline Source: Merrill Lynch Gold Price Index 1 1) Index reflects TSE Gold & Precious Metals Index (1989-2003); S&P/TSX Gold Index for 2004
Slide 8: Gold Fundamentals – Seasonality of Gold Prices
Gold Fundamentals –”Seasonality” of Gold Prices Summer/Early Fall Rally Source: Merrill Lynch Gold Price Index1 1) Index reflects TSE Gold & Precious Metals Index (1989-2003) May 12, 2004—Slide 8
Slide 9: Gold Fundamentals – Supply and Demand
Gold Fundamentals – Supply and Demand 1993 2000 2003 SUPPLY (tonnes) Mine Production 2,291 2,591 2,593 Official Sector Sales 468 479 606 Scrap 577 610 943 Producer Hedging (Dehedging) 142 (15) (310) 3,478 3,665 3,832 DEMAND (tonnes) Jewelry Fabrication 2,559 3,222 2,533 Other Fabrication 491 555 516
Slide 10: Gold Fundamentals – Mine Production
Gold Fundamentals – Mine Production Source: GFMS, Bloomberg
Slide 11: Gold Fundamentals – US Dollar and Gold
Gold Fundamentals – US Dollar and Gold Gold price and the USD/Euro Exchange Rate (September 1, 2001 to April 30, 2004) US/Euro
Slide 12: Gold Fundamentals – US Dollar: Long-Term
Gold Fundamentals – US Dollar: Long-Term - US Current Account Surplus/Deficit (% of GDP) Source: Bloomberg Asian Holdings of Long-Dated US Treasuries December 2003 $1.2 trillion Source: US Treasury
Slide 13: Gold Fundamentals – Interest Rates
Gold Fundamentals – Interest Rates Gold Price 10-Year Treasury Yield
Slide 14: Gold Fundamentals – Interest Rates
Gold Fundamentals – Interest Rates Nominal Federal Funds % Source: HSBC Real Federal Funds % Source: HSBC
Slide 15: Gold Fundamentals – Paper vs. Hard Assets
Gold Fundamentals – Paper vs. Hard Assets . Source: Bloomberg
Slide 16: Operating & Financial Results
Operating & Financial Results
Slide 17: Operating Results – Gold Sales & Reserves
Operating Results –Gold Sales & Reserves Equity Gold Sales Equity Gold Reserves Interests in Echo Bay and TVX Newmont America JV, which were exchanged/sold on January 31, 2003. Data for 1999 and 2000 reflect Newmont reserves before the 2001 acquisitions.
Slide 18: Financial Results – Revenues & Net Income
Financial Results –Revenues & Net Income Revenues Net Income (Loss) 1) Before cumulative effect of a change in accounting principle to conform Batu Hijau’s accounting policies on consolidation
Slide 19: Financial Results – Focus on Margins
Financial Results –Focus on Margins Total Cash Costs1 Total Production Costs1 Margin1, 2 1) Please refer to the attached Supplemental Information for an explanation of non-GAAP performance measures. 2) Average realized gold price less total production costs per ounce.
Slide 20: Financial Results – Margin Pressure
Financial Results –Margin Pressure Gold Price in Local Currencies United States Canada South Africa Australia Source: Bloomberg
Slide 21: Core Operating Districts
Core Operating Districts 35.2 2.9 0.7 Q1`04 `04E `03 North America 16.3 1.6 .41 Q1`04 `04E `03 Yanacocha 11.9 `03 Ghana Copper 6,290 Q1`04`04E `03 Gold 7.1 0.05 0.36 Q1`04 `04E `03 Batu Hijau 16.9 1.7 0.5 Q1`04 `04E `03 Australia
Slide 22: Financial Results – Newmont Capital
Financial Results –Newmont Capital Portfolio Optimization • Semi-annual strategic asset review • Acquisition of minority interests • Acquisition of 25% interest in Turquoise Ridge joint venture • Sale of non-core Wiluna, TVX NA and Mesquite operations Royalty Business • “Natural hedge” • Revenues up
Slide 23: 2004 Guidance
2004 Guidance Gold Sales • 7.0 to 7.2 million equity ounces – 1.8 million equity ounces in Q1 – Approximate 10% decline in Q2 (vs. Q1) – Stronger second half of the year •$ 225 to $235 total cash costs per ounce Copper Sales • 420 million equity pounds •$ 0.63 total cash cost per pound CAPEX1 •$ 750
Slide 24: Reserves & Exploration
Reserves & Exploration
Slide 25: Reserves & Exploration – Equity Gold Reserves
Reserves & Exploration –Equity Gold Reserves
Slide 26: Reserves & Exploration – Reserve Sensitivity
Reserves & Exploration –Reserve Sensitivity Drill constrained rather than mineralization constrained at higher prices
Slide 27: Conclusion
Conclusion Gold Market Fundamentals Remain Positive Strong Operating and Financial Results Record 91.3 Million Reserve Ounces (at $325 gold) Large, Prospective Land Position Strengthened Balance Sheet Merger Integration Complete Only S&P 500 Gold Stock
Slide 28: Take Stock in Gold
Take Stock in Gold Wayne W. Murdy Chairman & Chief Executive Officer Merrill Lynch Global Metals, Mining & Steel Conference Boston, MA May 12, 2004
Slide 29: Supplemental Information – Reconciliation of Costs to Total Cash Costs Per Ounce
SUPPLEMENTAL INFORMATION – Reconciliation of Costs Applicable to Sales to Total Cash Costs Per Ounce Year ended Q1 2004 2003 2002 December 31, ($ million) Consolidated Consolidated Consolidated Costs applicable to sales under GAAP $ 501.5 $ 1,700.3 $ 1,616.4 Minority interest (62.8) (192.2) (173.0)
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