Newmont Corporation · NYSE:NEM
Newmont — Q1 2019 Earnings Presentation
36 slides from Newmont's earnings presentation, Apr 25, 2019
Slide 1: Q1 2019 Earnings
Q1 2019 Earnings April 25, 2019
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: Gary Goldberg, Chief Executive Officer
Gary Goldberg Chief Executive Officer
Slide 4: Newmont delivers solid first quarter results
Newmont delivers solid first quarter results Delivered 1.23Moz at AISC of $907/oz – in line with guidance Superior operational Produced 10 millionth ounce at Tanami – through continued cost and capital discipline execution Forged joint venture with Barrick – to capture synergies across Nevada Commis
Slide 5: Leading sustainability performance
Leading sustainability performance Total injury rates (total recordable injuries per 200,000 hours worked) 0.72 0.58 0.44 0.46 0.46 0.52 0.40 2013 2014 2015 2016 2017 2018 Q1 2019 Gold Quarry April 25, 2019 Newmont Goldcorp Corporation I Q1 2019 earnings I Slide 5
Slide 6: Newmont Goldcorp combination closed
Newmont Goldcorp combination closed The world’s leading gold company • Strongest portfolio of operating gold mines, projects, and Reserves in favorable jurisdictions • Proven and scalable operating model • Targeting sustainable production of 6 to 7 million* ounces of gold annually1 • Industry-leadin
Slide 7: Newmont Goldcorp's industry leading portfolio
Newmont Goldcorp’s industry leading portfolio* % of combined Reserves3: ~90% in Americas and Australia Éléonore USA Musselwhite Latin 19% Porcupine America Nevada JV* Red Lake 30% CC&V Australia Peñasquito 18% Mexico 8% Canada Ghana 15% 10% Ahafo Cerro Negro Akyem Merian Yanacocha Boddington Pueblo
Slide 8: Newmont Goldcorp's leading project pipeline
Newmont Goldcorp’s leading project pipeline* Conceptual/ Scoping Prefeasibility CC&V Feasibility Underground Definitive Akyem Golden Mile Underground Nueva Feasibility Execution Growth Unión JV Apensu Ahafo North Underground Ahafo Mill Sabajo Expansion Chaquicocha Awonsu Oxides Subika UG Quecher Mai
Slide 9: Newmont Goldcorp stable long-term production
Newmont Goldcorp stable long-term production 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 Average annual attributable development capital of $60
Slide 10: Formation of Nevada JV to unlock significant value
Formation of Nevada JV to unlock significant value Joint Venture (JV) Terms1 • 61.5% Barrick, 38.5% Newmont • Operator: Barrick • Board representation and voting power will reflect ownership levels • Technical, Finance and Exploration advisory committees: equal representation from Barrick and Newmon
Slide 11: Nancy Buese, EVP and Chief Financial Officer
Nancy Buese EVP and Chief Financial Officer
Slide 12: First quarter Adjusted EBITDA of $687 million
First quarter Adjusted EBITDA of $687 million Financial metric Q1 2018 Q1 2019 Change Revenue ($M) $1,817 $1,803 -1% Adjusted Net Income8 ($M) $185 $176 -5% Adjusted Net Income ($/diluted share) $0.35 $0.33 -6% Adjusted EBITDA5 ($M) $644 $687 +7% Cash from continuing operations ($M) $266 $574 >100%
Slide 13: Q1 adjusted net income of 33 cents per share
Q1 adjusted net income of 33 cents per share GAAP to adjusted net income ($/diluted share)8 $0.04 ($0.03) $0.11 $0.33 $0.21 Net income from Transaction related Tax adjustments Other* Adjusted net continuing costs and valuation income operations allowance *Other includes change in fair value of inves
Slide 14: Financial flexibility to execute capital priorities
Financial flexibility to execute capital priorities Newmont Goldcorp capital priorities • Maintaining investment grade balance sheet • Growing margins, Reserves and Resources • Returning cash to shareholders Recent capital and financing activities • Declared Q1 dividend of $0.14/share • Special divi
Slide 15: Tom Palmer, President and Chief Operating Officer
Tom Palmer President and Chief Operating Officer
Slide 16: North America overcoming near-term challenges
North America overcoming near-term challenges • Carlin delivered steady performance – continuing remediation work at Gold Quarry • CC&V continues processing concentrates in Nevada • Phoenix impacted by mine sequencing and ore chemistry • Advancing project studies for CC&V Underground and Galore Cree
Slide 17: South America progressing profitable growth
South America progressing profitable growth • Yanacocha continued mining higher grades and delivered steady mill performance • Merian Full Potential improvements help mitigate seasonal weather impacts • Quecher Main expected to reach commercial production in Q4 • Yanacocha Sulfides Environmental Imp
Slide 18: Australia preparing for next phase of profitable growth
Australia preparing for next phase of profitable growth • Tanami delivers strong performance with higher grade from mine sequencing • Boddington stripping campaign ongoing; planned mill maintenance completed in Q1 • KCGM continues to manage geotechnical challenges; Morrison starter pit operational •
Slide 19: 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 20: Africa delivers another solid quarter
Africa delivers another solid quarter • Akyem improved mill performance helps offset lower grade in Q1 • Ahafo achieved improved performance with higher grades at Subika underground and open pit • Ahafo Mill Expansion advancing construction; on track for commercial production in Q4 • Regional growth
Slide 21: Newmont Goldcorp integration update
Newmont Goldcorp integration update Goldcorp first quarter results as expected Leadership solidified • Appointed executive leadership team • Regional operational leaders in place Launching Full Potential in H2 2019 • Peñasquito – increase mill throughput; improve plant reliability • Cerro Negro – in
Slide 22: Gary Goldberg, Chief Executive Officer
Gary Goldberg Chief Executive Officer
Slide 23: Newmont Goldcorp focused on long-term value
Newmont Goldcorp focused on long-term value Stable production profile targeting 6-7Mozs over decades-long time horizon1 Superior operational >$2.0B in improvements since 2013 through Full Potential10 execution Accelerating technology program based on value and viability Geographically diverse portfo
Slide 24: Questions?
Questions?
Slide 25: 2019 Newmont outlook by region
2019 Newmont outlooka by region Consolidated Sustaining Consolidated Consolidated Capital & Development Consolidated Attributable Consolidated All-in Sustaining Finance Lease Capital 2019 Outlook +/- 5% Production Production CAS Costsb Payments Expenditures (Koz, Kt) (Koz, Kt) ($/oz, $/lb) ($/oz, $/
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: Adjusted net income (loss)
Adjusted net income (loss) Three Months Ended (1) Net loss (income) attributable to Newmont stockholders from discontinued March 31, 2019 2018 operations relates to (i) adjustments in our Holt royalty obligation, presented net of Net income (loss) attributable to Newmont stockholders $ 87 $ 192 tax
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: 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 30: 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 31: All-in sustaining costs
All-in sustaining costs Advanced Projects, (1) Excludes Depreciation and amortization and Research and Treatment Sustaining All-In Reclamation and remediation. Costs Development General Other and Capital and All-In Ounces Sustaining (2) Includes by-product credits of $8 and Three Months Ended Applic
Slide 32: All-in sustaining costs
All-in sustaining costs Advanced Projects, (1) Excludes Depreciation and amortization and Research and Treatment All-In Reclamation and remediation. Costs Development General Other and All-In Ounces Sustaining (2) Includes by-product credits of $14 and Three Months Ended Applicable Reclamation and a
Slide 33: Return on Capital Employed (ROCE) – TTM Q1
Return on Capital Employed (ROCE) – TTM Q1 Management uses Return on Capital Employed (“ROCE”) as a non-GAAP measure to evaluate the Company’s operating performance. ROCE does not represent, and should not be considered an alternative to, net earnings (loss), operating earnings (loss), or cash flow
Slide 34: All-in sustaining costs – 2019 outlook
All-in sustaining costs – 2019 outlook 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 Section
Slide 35: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the following notes, the Cautionary Statement on slide 2 and the factors described under the “Risk Factors” section of the Company’s Form 10-K, filed with the SEC on April 25, 2019 and disclo
Slide 36: Endnotes
Endnotes 8. Adjusted Net Income is a non-GAAP metric. Adjusted Net Income per share refers to Adjusted Net Income per diluted share. See slides 26-27 for more information and reconciliation to the nearest GAAP metric. 9. 2019 dividends beyond Q2 2019 have not yet been approved or declared by the Boa