Newmont Corporation · NYSE:NEM
Newmont — Denver Gold Forum 2019
53 slides from Newmont's conference presentation, September 2019
Slide 1: Tom Palmer, President & incoming CEO – Denver Gold Forum
Tom Palmer, President & incoming CEO Denver Gold Forum September 2019 September 2019 Newmont Goldcorp Corporation I Denver Gold Forum I Slide 1 Tanami Éléonore
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: World's leading gold company
World’s leading gold company • Proven operational performance • Strongest global portfolio in favorable jurisdictions • Focus on growing margins, Reserves and Resources • Deepest pipeline of world-class projects • Disciplined capital allocation and robust investment system • Highest dividend among s
Slide 4: Building on our proven strategy
Building on our proven strategy Differentiated track record of value creation*: Delivered >$2.0B in Full Potential5 improvements Completed eight projects with average IRR >30%6 Generated $1.5B from asset sales Paid down $3.7B of debt Returned $1.2B in dividends Recognized industry leader
Slide 5: Industry-leading safety and sustainability performance
Industry-leading safety and sustainability performance Embedding Newmont discipline: • Driving visible, felt safety leadership • Applying globally-consistent approach to Fatality Risk Management • Integrating systems to enhance Enterprise Risk Management • Implementing robust tailings management ove
Slide 6: Exceeding targeted synergies
Exceeding targeted synergies Annual run-rate improvements3,4,5 ($M) ~$365 Supply chain ~$200 Exploration Supply chain Full Potential ~$145 Full Potential G&A G&A 2019 commitment 2019 run-rate 2021 commitment On track to deliver ~$200M annual run-rate by year end 2019 September 2019 Newmont Goldcorp
Slide 7: Applying Full Potential at Peñasquito
Applying Full Potential at Peñasquito5 Quick wins: ~$50M run-rate by end 2019 • Lower mining costs – parked excess fleet • Shut down near-pit sizing conveyor • Established best practice ore control • Tuning SAG mill control logic Focus areas for 2020: • Debottlenecking mill feed • Optimizing blast f
Slide 8: Balanced global portfolio of long-life assets
Balanced global portfolio of long-life assets Key highlights 14 operating mines + 2 non-operated JV’s 4 Targeting stable production of 6-7Moz 90% of Reserves in Americas and Australia Unparalleled exploration potential Red Lake Porcupine Nevada Gold Mines Éléonore Pueblo Viejo Musselwhite CC
Slide 9: Leading project pipeline and track record
Leading project pipeline and track record Conceptual/ Scoping Prefeasibility CC&V Feasibility Underground Definitive Century Feasibility Nueva Execution Musselwhite Unión JV Expansion Yanacocha Coffee Sulfides Cerro Negro Borden Expansion Galore Ahafo North Creek JV Musselwhite Nueva Unión JV Materi
Slide 10: Delivering steady production into the future
Delivering steady production into the future 1 Indicative attributable gold production profile* (Moz) 10.0 9.0 Gold Equivalent Production 8.0 Current projects** Mid-term projects*** 7.0 6.0 5.0 Existing assets and sustaining projects 4.0 3.0 2.0 1.0 - 2019 2020 2021 2022 2023 2024 2025 *As of March
Slide 11: Focus on returns and disciplined capital allocation
Focus on returns and disciplined capital allocation Growing margins, • Advancing our most profitable projects Reserves and • Investing in exploration across cycles Resources Maintaining • Liquidity of ~$5B and net debt to adj. EBITDA of 1.5x* investment grade • Refinanced 2019 debt with 10-year note
Slide 12: World's leading gold company
World’s leading gold company • Proven operational performance • Strongest global portfolio in favorable jurisdictions • Focus on growing margins, Reserves and Resources • Deepest pipeline of world-class projects • Disciplined capital allocation and robust investment system • Highest dividend among s
Slide 13: Appendix
Appendix September 2019 Newmont Goldcorp Corporation I Denver Gold Forum I Slide 13 Tanami Core
Slide 14: Planned production increase in second half
Planned production increase in second half Attributable Sustaining Development 2019 Outlook3 metric CAS AISC1 production4 capital capital (+/- 5%) ($/oz) ($/oz) (Moz) ($M) ($M) North America 1.1 $860 $1,115 $320 $155 South America 1.3 $630 $785 $120 $210 Australia 1.5 $775 $940 $185 $60 Africa 1.1 $
Slide 15: 2019 corporate outlook
2019 corporate outlook Outlook metric3 2019E (+/- 5%) G&A ($M) $325 Interest Expense ($M) $280 DD&A ($M) $2,050 Exploration & Advanced Projects ($M) $450 Consolidated Adjusted Tax Rate (%) 34% - 39% Éléonore September 2019 Newmont Goldcorp Corporation I Denver Gold Forum I Slide 15
Slide 16: Annualized free cash flow sensitivities
Annualized free cash flow sensitivities* FCF Attributable FCF Price Change ($M) ($M) Gold ($/oz) $1,200 +$100 +$470 +$450 Silver ($/oz) $16.00 +$1.00 +$20 +$20 Lead ($/lb) $0.90 +$0.10 +$20 +$20 Zinc ($/lb) $1.05 +$0.10 +$30 +$30 Copper ($/lb) $2.50 +$0.25 +$20 +$20 Australian Dollar $0.75 -$0.05 +$
Slide 17: Delivered >$2B in Full Potential benefits since 2013
Delivered >$2B in Full Potential benefits since 2013 5 Superior operational execution through sustainable productivity improvements and cost efficiencies • Core principles – focused on value and viability, grounded in technical fundamentals • Proven operating model – clear accountability, with site
Slide 18: Full Potential improvements to deliver $165M annually
Full Potential improvements to deliver $165M annually4,5 Annual pre-tax cash flows from Full Potential benefits ($M) Benefits by area ($M) • Greatest total value potential from processing improvements – productivity, reliability and cost efficiency • Additional value from surface and underground min
Slide 19: 2019 Newmont Goldcorp strategy map
2019 Newmont Goldcorp strategy map Purpose Our purpose is to create value and improve lives through sustainable and responsible mining • Deliver superior operational execution Strategy • Sustain a global portfolio of long-life assets • Lead the gold sector in profitability and responsibility Sustain
Slide 20: Executive Leadership Team
Broad management experience Executive Leadership Team1 Gary Goldberg Tom Palmer Rob Atkinson Nancy Buese Randy Engel Director and CEO President EVP and COO EVP and CFO EVP Strategic Dev Dean Gehring Marcelo Godoy Steve Gottesfeld Nancy Lipson Bill MacGowan EVP & CTO SVP Exploration EVP S&ER EVP Gene
Slide 21: Diverse Board led by independent Chair
Diverse Board led by independent Chair 60% of the Board are female or Board Committees ethnically diverse Audit Leadership Corporate Safety & Development & Governance & Sustainability 6 women Compensation Nominating Bruce R. Brook Veronica Hagen Noreen Doyle Jane Nelson 1 African (C) (C) (C) (C) J.
Slide 22: Executive compensation tied to shareholder returns
Executive compensation tied to shareholder returns Base salary 12% Personal objectives Personal Restricted Stock bonus Units 23% 6% Two-thirds of Company bonus Operating compensation 13% performance linked to stock performance Performance Stock Units 46% CEO target compensation September 2019 Newmon
Slide 23: Incentive plan aligned to strategic objectives
Incentive plan aligned to strategic objectives Performance Measures Weighting Health Safety • Proactive risk management and 20% • Total injury rates • Value creation: Operational Excellence - Earnings – adjusted EBITDA per share* 40% - Capital Efficiency – ROCE • Production efficiency (costs) 20% •
Slide 24: Sustainability program aligned to best practice
Sustainability program aligned to best practice Accountability and transparency in setting public sustainability targets Water – reduce freshwater consumption by 5% by YE 2019 ON TRACK E Environmental Climate change – reduce GHG emissions intensity by 16.5% by 2020 Closure – achieve 90% of planned r
Slide 25: Formation of Nevada JV to unlock significant value
Formation of Nevada JV to unlock significant value Joint Venture (JV) highlights1 • 61.5% Barrick, 38.5% Newmont • Operator: Barrick • Board representation and voting power reflects ownership levels • Technical, Finance and Exploration advisory committees: equal representation from Barrick and Newmo
Slide 26: Nevada joint venture agreement key terms
Nevada joint venture agreement key terms Economic • Barrick and Newmont to own 61.5% and 38.5%, respectively Interest Barrick Newmont • Cortez • Carlin Contributed • Goldstrike • Long Canyon Assets • Turquoise Ridge (75% Interest) • Twin Creeks • Goldrush • Phoenix • Turquoise Ridge (25% interest) O
Slide 27: 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 28: Investing in profitable projects across the cycle
Investing in profitable projects across the cycle Mine life Production4 Project Cost† (AISC/oz) Capital ($M) IRR4,6 (%) (yrs) (Koz/yr) P Merian (75%) 15 $650 – $750 300 – 375 ~$525 >25% P Long Canyon Phase 1 8 $500 – $600 100 – 150 ~$225 >25% P Tanami expansion +3 $700 – $750 ~ 80 ~$120 >35% P Twin
Slide 29: Tanami Power completed safely and on schedule
Tanami Power completed safely and on schedule • 450km natural gas pipeline, two power stations Metrics Tanami Power and interconnected power line installed Completion date March 2019 • Reduces power costs and CO2 emissions by 20% Capital* ~$230M Net cash savings (2019 – 2023) $34/oz • Mitigates fuel
Slide 30: Tanami Expansion 2 next phase of profitable growth
Tanami Expansion 2 next phase of profitable growth Potential to extend mine life to 2040 • Includes production shaft to maximize value from 1,200 – 2,600m below surface and optimizes processing capacity • Staged investment of $650 to $750 million; full funds decision expected H2 2019 • Adds ~100,000
Slide 31: Ahafo expansion projects extend mine life to 2029
Ahafo expansion projects extend mine life to 2029 From 2020 to 2024, projects will improve*: Subika Ahafo Mill Metrics Underground Expansion • Production by ~70% to 550 – 650 Koz/yr Production 150 – 200 Koz 75 – 100 Koz Development capital ~$185M $140 – $180M • CAS by $150 - $250 per ounce First pro
Slide 32: Ahafo North a prospective new district
Ahafo North a prospective new district • Open pit mine, stand-alone mill for processing 3.4Mozs of Reserve and 1.0Mozs of Resource* • Investment of $700 to $800 million with a three year development timeline • Incremental 250,000 ounces per year over 13 year mine life • Permitting and community enga
Slide 33: Quecher Main to extend Yanacocha life to 2027
Quecher Main to extend Yanacocha life to 2027 From 2020 – 2025, Quecher Main delivers: Metrics Quecher Main • Yanacocha production ~200 Koz/year* Production* 200 Koz Development capital $250 – $300M • Average CAS of $750 – $850/oz** First production Late 2018 • Average AISC of $900 – $1,000/oz** Com
Slide 34: Optimizing approach to sulfide development
Optimizing approach to sulfide development Project to develop Yanacocha’s sulfide deposits reaches definitive feasibility study • Potential to extend operational life to 2039; favorable drilling and process test results continue • First phase focuses on developing most profitable deposits to optimiz
Slide 35: Goldcorp projects provide long-term optionality
Goldcorp projects provide long-term optionality Borden • Canada’s first all-electric underground gold mine • Enhances long-term economics of Porcupine • Evaluating 1,000 square kilometer land package to develop a portfolio of targets Musselwhite Materials Handling • Improves movement of ore to the m
Slide 36: Exploration strength through combined investments
Exploration strength through combined investments Astro | Evrim Resources Arcus Development Azimut Exploration Triumph Gold TMAC Quebec Precious Newmont Goldcorp Strategic Equity Investments Independence Gold Auryn Resources Sirios Resources Lucky Strike Resources Independence Gold Probe Newmont Gol
Slide 37: Proprietary technologies drive discovery program
Proprietary technologies drive discovery program Oberon/Tanami, Australia, DSG footprint Antonio/Yanacocha NEWDAS and DSG integrated targeting Deep Sensing Geochemistry (DSG) 3D Distributed Acquisition System (NEWDAS) • State-of-the-art proprietary technology • 3D data acquisition system • Depth of
Slide 38: Digital assessments guide fit-for-purpose approach
Digital assessments guide fit-for-purpose approach Autonomous Advanced Centralized Connected Advanced Smart Mine fleet process control support worker analytics Apply control Provide a Enable Leverage Provide insight Maximize use of logic & AI to consistent site improved wearable & foresight producti
Slide 39: Recent capital and financing activities
Recent capital and financing activities • Declared Q2 dividend of $0.14/share and paid special dividend of $0.88/share on May 1 • Reset $3.0B revolver to five-year term; total liquidity of $4.8B • Paid off ~$1.25B of Goldcorp debt at closing; completed exchange of Goldcorp senior notes • Net debt to
Slide 40: Approach to portfolio optimization
Approach to portfolio optimization High Mine life, cost position, returns De-risk Maintain Value Close or divest Improve value Low High Risk Low Country and technical risk September 2019 Newmont Goldcorp Corporation I Denver Gold Forum I Slide 40
Slide 41: Capacity for demand growth in China and India
Capacity for demand growth in China and India 2018 Gold consumer demand per capita (grams) 8 6 4 2 0 2018 Gold production by country (tonnes) 500 400 300 200 100 0 Source: World Gold Council; see endnote 7 September 2019 Newmont Goldcorp Corporation I Denver Gold Forum I Slide 41
Slide 42: ETF investment increasing with market uncertainty
ETF investment increasing with market uncertainty • Gold remains key strategic diversifier as geopolitical uncertainty continues • Strong growth in ETF holdings continues • Structural economic reforms in India and China likely to support long-term demand ETF gold holdings (Moz) and gold price* ($/oz
Slide 43: 2019 outlook by region
2019 outlooka by region Consolidated Consolidated Consolidated Sustaining Development Consolidated Attributable Consolidated All-in Sustaining Capital Capital 2019 Outlook +/- 5% Production Production CAS Costsb Expenditures Expenditures (Koz, GEO Koz) (Koz, GEO Koz) ($/oz) ($/oz) ($M) ($M) North Am
Slide 44: 2019 outlook by site
2019 outlooka by site Consolidated Consolidated a2019 Outlook in the tables shown are considered Consolidated Sustaining Development “forward-looking statements” and are based upon Consolidated Attributable Consolidated All-in Sustaining Capital Capital b certain assumptions; figures include the imp
Slide 45: Indicative longer-term outlook
Indicative longer-term outlook Outlook +/- 5% 2020E 2021E 2022E 2023E 2024E 2025E Attributable Production (koz) 7,400 7,500 7,300 7,300 7,300 6,700 Consolidated CAS ($/oz) 720 705 690 630 630 670 Consolidated All-in Sustaining Costs ($/oz) 935 890 875 835 810 830 Consolidated Sustaining Capital Expe
Slide 46: 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 47: Net debt to pro forma adjusted EBITDA ratio
Net debt to pro forma adjusted EBITDA ratio Management uses net debt to Pro forma 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 Pro forma Adjusted EBITDA represents the rati
Slide 48: 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 49: All-in sustaining costs – 2019 outlook gold
All-in sustaining costs – 2019 outlook gold A reconciliation of the 2019 Gold AISC outlook to the 2019 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 50: All-in sustaining costs – 2019 outlook co-products
All-in sustaining costs – 2019 outlook co-products A reconciliation of the 2019 Co-products AISC outlook to the 2019 Co-Products 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
Slide 51: All-in sustaining costs – 2020 outlook
All-in sustaining costs – 2020 outlook A reconciliation of 2020 Gold AISC outlook to the 2020 Gold CAS outlook is provided below. Outlook, including the estimates in the tables below, are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amen
Slide 52: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the most recent Form 10-Q filed with the SEC on July 25, 2019, and with the Cautionary Statement on slide 2 and following notes. 1. AISC or All-in sustaining cost is a non-GAAP metric. See sl
Slide 53: Endnotes
Endnotes 6. IRR on slides 4 and 9 calculated for Newmont projects delivered between 2015-H12019. See also endnote 4. 7. This presentation contains industry, market and competitive position data which have come from a third party sources, World Gold Council and Bloomberg. Third party industry publica