Newmont Corporation · NYSE:NEM
Newmont — Q1 2014 Earnings Presentation
31 slides from Newmont's earnings presentation, Apr 25, 2014
Slide 1: First Quarter Earnings Call | April 25, 2014
First Quarter Earnings Call | April 25, 2014
Slide 2: Cautionary Statement
Cautionary Statement Cautionary Statement Regarding Forward Looking Statements, Including Outlook: 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,
Slide 3: Overview
Overview
Slide 4: Maintaining safe and efficient operations
Maintaining safe and efficient operations Six consecutive quarters of industry leading injury rates 0.49 0.49 0.50 0.46 0.47 0.40 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Carlin welding shop, Nevada April 25, 2014 Newmont Mining Corporation Slide 4
Slide 5: Leveraging strengths to deliver value
Leveraging strengths to deliver value Strong asset portfolio • 70% of production from US, Australia, NZ Stable production base • ~5 Moz of consistent gold production Sharp focus on core competencies • 90% of revenue generated from gold • Superior record on safety and sustainability Continuous cost i
Slide 6: Gold production up 4% and copper up 20%
Gold production up 4% and copper up 20% Attributable gold production (koz) Attributable copper production (kt) 1,210 1,165 24 20 Q1'14 Q1'13 Q1'14 Q1'13 April 25, 2014 Newmont Mining Corporation 6
Slide 7: Q1 production outpaces prior year quarter
Q1 production outpaces prior year quarter Q1 attributable gold production (koz) Q1 attributable copper production (kt) 436 450 435 10 405 9 8 8 6 225 162 122 125 3 8 7 North America Australia / NZ Indonesia North America Australia/NZ South America Africa Indonesia 2014 2013 2014 2013 April 25, 2014
Slide 8: Gold all-in sustaining costs driven down 8%
Gold all-in sustaining costs1 driven down 8% Q1 company gold AISC ($/oz) Q1 regional gold AISC ($/oz) 2,167 2,000 5 48 1,121 1,403 25 1,136 1,126 1,027 958 942 885 10 9 616 1,034 Q1 2013 Remediation Sustaining Capital Adv. Projects & Expl. G&A CAS Q1 2014 America Australia/NZ America Africa Indonesi
Slide 9: Copper AISC higher on mixed results
Copper AISC higher on mixed results Q1 company copper AISC ($/lb) Q1 regional copper AISC ($/lb) 4.63 0.03 0.07 3.75 3.70 0.48 3.27 0.18 2.95 3.67 2.55 0.10 0.01 3.38 Q1 2013 Costs applicable to sales Remediation Other Expense Sustaining Capital Adv. Projects & Expl. Other Q1 2014 North America Aust
Slide 10: Capital spending down 54%
Capital spending down 54% Consolidated capital expenditures ($M) 510 • Sustaining capital reductions of $65 million or ~27% • Delivery of Akyem and Phoenix copper leach projects on-time, on-budget in 2013 235 • Prioritized capital spending on projects Q1'14 Q1'13 April 25, 2014 Newmont Mining Corpor
Slide 11: Optimized practices deliver sustainable improvements
Optimized practices deliver sustainable improvements Tanami • 43% reduction in AISC and 45% reduction in CAS • 40% increase in gold production • 20% increase in ore tonnes mined through improved planning and performance • 32% improvement in grade through optimized mine plans Tanami underground, Aust
Slide 12: Improved 2014 Outlook for Africa
Improved 2014 Outlook2 for Africa Africa gold production (Koz) Africa consolidated capex ($/oz) 790 - 870 785 - 850 130 - 150 115 - 140 Revised Original Revised Original Africa gold AISC ($/oz) Africa CAS ($/oz) 795 - 865 690 - 755 575 - 625 510 - 555 Revised Original Revised Original April 25, 2014
Slide 13: Continuing to seek resolution in Indonesia
Continuing to seek resolution in Indonesia • Ongoing discussions with government • Contract of Work grants us the right to export concentrate • Export permit has not been issued • Portion of current production shipped to Gresik • If no resolution, will proceed with ramp- down in Q2 • Final 7% intere
Slide 14: Financial Results
Financial Results
Slide 15: Q1 financial results
Q1 financial results Q1 2014 Q1 2013 Average Realized Gold Price ($/oz) 1,293 1,631 Average Realized Copper Price ($/lb) 2.50 3.12 Revenue ($M) $1,764 $2,188 Net Income from Cont. Operations ($M) $117 $314 Adjusted Net Income ($M)3 $108 $353 Adjusted Net Income ($ per share)3 $0.22 $0.70 Cash from C
Slide 16: Q1 adjusted net income reflects lower metals pricing
Q1 adjusted net income3 reflects lower metals pricing US$ 353 304 28 108 22 27 29 7 Q1 2013 Metals Price Tax Rate Costs Au / Cu Volume Adv. Projects & G&A & Other Q1 2014 applicable to Exploration Expense sales April 25, 2014 Newmont Mining Corporation 16
Slide 17: Q1 CAS demonstrates cost control
Q1 CAS demonstrates cost control Q1 gold CAS ($/oz) Q1 copper CAS ($/lb) 1,283 3.20 1,075 2.99 993 2.71 922 2.63 2.39 2.35 751 760 766 783 2.27 726 2.05 576 555 428 Company North America Australia / NZ Indonesia Company North America Australia / NZ South America Africa Indonesia 2014 2013 2014 2013
Slide 18: Disciplined capital allocation
Disciplined capital allocation Improved financial flexibility • Cash balance of approximately $1.5B, no borrowings on $3B revolver • Cash from Continuing Operations of $183M in Q1 • Secured commitments to refinance $575 million of debt due in 2014 with 5-year term loan Enhance Portfolio • Invest in
Slide 19: Improved 2014 Outlook
Improved 2014 Outlook • Lowered interest expense by $25 million to $325 - $350 million • Increase in tax rate to 37% - 40% • Improved production, CAS, AISC, and capital Outlook in Africa • Reiterating guidance overall across the rest of the organization Yanacocha, South America April 25, 2014 Newmon
Slide 20: Summary
Summary
Slide 21: Vision for the future
Vision for the future • Positioned to capture benefits of economic recovery, demand growth • Portfolio of longer-life, lower-cost assets • Steady production profile • Ongoing cost and capital discipline • Investment grade balance sheet and financial flexibility • Stronger growth pipeline • Compellin
Slide 22: Questions
Questions
Slide 23: Appendix
Appendix
Slide 24: 2014 Outlook
2014 Outlook 2014 2014 2014 2014 All-in 2014 2014 Consolidated Attributable Consolidated Sustaining Consolidated Description Consolidated Region Production Production CAS Costs b Capital Expenses ($M) Expenditures (Kozs, Kt) (Kozs, kt) ($/oz, $/lb) ($/oz, $/t) ($M) General & Administrative $175 - $2
Slide 25: 2014 – 2016 Outlook
2014 – 2016 Outlook 2012 2013 2014 2015 2016 Actual Actual Outlook Outlook Outlook 5.0 5.1 4.6 – 4.9 4.8 – 5.2 4.8 – 5.2 Gold (Attributable Moz) 5.6 5.5 5.0 – 5.4 5.6 – 6.0 5.4 – 5.7 Gold (Consolidated Moz) $677 $761 $740 - $790 $690 - $740 $740 - $790 Gold CAS ($/oz) $1,177 $1,104 $1,075 - $1,175 $
Slide 26: 2014 – 2016 Outlook
2014 – 2016 Outlook Consolidated CAS ($/oz, $/lb) 2014 2015 2016 Region Outlook Outlook Outlook North America $720 - $790 $740 - $810 $680 - $740 South America $725 - $790 $560 - $615 $920 - $1,010 Australia/New Zealand $855 - $930 $830 - $910 $850 - $925 Batu Hijau, Indonesia $630 - $690 $380 - $42
Slide 27: Adjusted net income
Adjusted net income Non-GAAP Financial Measures Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles (“GAAP”). These measures should not be considered in isolation or as a substitut
Slide 28: All-in sustaining costs
All-in sustaining costs Newmont has worked to develop a metric that expands on GAAP measures such as cost of goods sold and non-GAAP measures to provide visibility into the economics of our gold mining operations related to expenditures, operating performance and the ability to generate cash flow fr
Slide 29: All-in sustaining costs
All-in sustaining costs Ounces All-In Costs Advanced Other Treatment and All-In (000)/ Sustaining (1) Excludes Amortization and Reclamation and remediation. Pounds Three Months Ended Applicable Remediation Projects and General and Expense, Refining Sustaining Sustaining (millions) Costs (2) Includes
Slide 30: All-in sustaining costs
All-in sustaining costs Treatment Ounces All-In Costs Advanced Other and All-In (000)/ Sustaining (1) Excludes Amortization and Reclamation and Pounds remediation. Three Months Ended Applicable Remediation Projects and General and Expense, Refining Sustaining Sustaining (millions) Costs March 31, 20
Slide 31: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the following notes footnotes, the Cautionary Statement on slide 2 and the factors described under the “Risk Factors” section of the Company’s most recent Form 10-K, filed with the SEC on Feb