Newmont Corporation · NYSE:NEM
Newmont — Investor Presentation (January 2021)
46 slides from Newmont's investor presentation, January 2021
Slide 1: Investor Presentation
Investor Presentation CREATING VALUE & IMPROVING LIVES JANUARY 2021 THROUGH SUSTAINABLE, RESPONSIBLE MINING JANUARY INVESTOR PRESENTATION 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: The World's Leading Gold Company
The World’s Leading Gold Company ✓#1 gold producer with ~8M GEOs/yr 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 operating mod
Slide 4: Creating Value and Improving Lives
Creating Value and Improving Lives 2020 HIGHLIGHTS Protecting the wellbeing of our Delivered superior operational Right-sized portfolio with nine workforce and communities execution from a proven world-class assets in top-tier throughout Covid response operating model jurisdictions Recognized as top
Slide 5: The Industry's Best Portfolio in Top-Tier Jurisdictions
The Industry’s Best Portfolio in Top-Tier Jurisdictions World’s Leading Gold Company ➢ Nine world-class assets in top-tier Musselwhite Jurisdictions* ➢ Industry’s largest gold reserves of Nevada Gold Mines*** Éléonore 96Moz and 63Moz in GEO reserves Turquoise Ridge/Twin Creeks ➢ Stable production of
Slide 6: Steady Long-Term Production with Improving Costs
Steady Long-Term Production with Improving Costs 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 World’s leading gold company with ~8M GEOs
Slide 7: Project Pipeline to Sustain Production into 2040's
Project Pipeline to Sustain Production into 2040’s 7+ YEARS 4 TO 7 YEARS 0 TO 3 YEARS EXECUTION Yanacocha Sulfides Tanami Expansion 2 Peru – Gold/Copper Australia – Gold Definitive Feasibility Ahafo North Goldrush Declines Ghana – Gold (NGM JV) Pueblo Viejo Expansion JV USA – Gold Dominican Republic
Slide 8: Improving Margins and Investing in Our Future
Improving Margins and Investing in Our Future ATTRIBUTABLE PRODUCTION & AISC * (MOZ & $/OZ) ▪ 6.2 – 7.0 million ounces per year through 2025* * $1,500 8.0 Total GEOs ▪ Ahafo North and $1,300 Yanacocha Sulfides ramping up in 2024 7.0 AISC $1,100 ▪ Additional 1.2 – 1.6 million gold equivalent 6.0 ounc
Slide 9: 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 10: 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 $7.8B and cash position f
Slide 11: Industry-leading Dividend Framework
Industry-leading Dividend Framework ▪ Leading $1.00/share sustainable base dividend ANNUALIZED DIVIDEND PAYOUT ▪ Targeting 40% – 60% of incremental attributable Free $2.80 - $3.70 Cash Flow above $1,200/oz returned to shareholders ▪ Evaluating gold price increments of approximately $300/oz $2.20 - $
Slide 12: Appendix
Appendix JANUARY INVESTOR PRESENTATION NEWMONT CORPORATION 12
Slide 13: Twenty Years of Newmont's Corporate Responsibility
Twenty Years of Newmont’s Corporate Responsibility 2000 - 2005 2005 - 2010 2010 - 2015 2015 - 2020 Founding member of ICMM (2001) Initial signatory of the International Adopted Conflict-Free Gold Standard Sustainability and safety targets Cyanide Management Code (2005) (2013) included in compensatio
Slide 14: Intensive Focus on Responsible Business Practices
Intensive Focus on Responsible Business Practices TARGETS RECOGNITION Water Climate Transparency Climate 5% 30% #2 A- reduction in freshwater CDP Climate assessment reduction in absolute and consumption by 2019: most transparent score reflective of intensity based GHG exceeded target - company in th
Slide 15: Sustainability Program Aligned to Leading Practices
Sustainability Program Aligned to Leading Practices Accountability and transparency in setting public sustainability targets – 2021 targets * E Climate – By 2030, reduce emissions by 30%; reduce Scope 3 by 15%, increase renewables to 10% Water – Improve water efficiency; increase multi-stakeholder w
Slide 16: Leading Approach to Climate Resiliency
Leading Approach to Climate Resiliency Climate Commitments by 2030* 1. Absolute Emissions: 30% reduction of combined emissions (Scope 1 & 2) 2. Emissions Intensity: 30% reduction of combined emissions intensity (Scope 1 & 2) 3. Scope 3 Emissions: 15% reduction from supply chain and partnerships 4. E
Slide 17: Directing $500M to Climate Initiatives over 5 Years
Directing $500M to Climate Initiatives over 5 Years Renewable energy Energy efficiency Fuel switching Carbon capture PATHWAYS TO LOWER CARBON FOOTPRINT INITIATIVES UNDER CONSIDERATION ▪ Funds directed to support 2030 climate targets and ▪ Solar and wind projects at Peñasquito, Ahafo, goal of net zer
Slide 18: Record Quarterly Free Cash Flow of $1.3 Billion
Record Quarterly Free Cash Flow of $1.3 Billion FINANCIAL METRIC Q3 2019 Q3 2020 Revenue ($M) $2,713 $3,170 +17% Adjusted Net Income ($M) * $292 $697 +139% Adjusted Net Income ($/diluted share) * $0.36 $0.86 +139% Adjusted EBITDA ($M)* $1,079 $1,663 +54% Cash from continuing operations ($M) $793 $1,
Slide 19: Five Year Cost and Production Outlook
Five Year Cost and Production Outlook Guidance metric (+/- 5%) 2021E 2022E 2023E 2024E 2025E * Gold production (Mozs) 6.5 6.2 – 6.7 6.2 – 6.7 6.5 – 7.0 6.5 – 7.0 ** Other metal production (Mozs) 1.3 1.2 – 1.4 1.4 – 1.6 1.4 – 1.6 1.4 – 1.6 Total GEO production (Mozs) 7.8 7.5 – 8.0 7.7 – 8.2 8.0 – 8.5
Slide 20: Well-Positioned with Industry-Leading Portfolio
Well-Positioned with Industry-Leading Portfolio AUSTRALIA NORTH AMERICA SOUTH AMERICA AFRICA NEVADA GOLD MINES Growing Margins & Unlocking Value Investing in Future Growth Investment to Deliver Record (38.5%) Production Performance ▪ Boddington sustains strong ▪ Peñasquito delivers ▪ Cerro Negro imp
Slide 21: Tanami Growing Position as a World-Class Asset
Tanami Growing Position as a World-Class Asset OPERATIONAL EFFICIENCY IMPROVES MARGINS TANAMI EXPANSION 2 BUILDING ON SOLID BASE ✓ Replicating successes & leveraging best practices ✓ Supports Tanami’s future as a long-life, low-cost producer ✓ Optimized mine plans, improved throughput & recovery ✓ E
Slide 22: Yanacocha Sulfides Advances Towards 2021 Approval
Yanacocha Sulfides Advances Towards 2021 Approval INDICATIVE YANACOCHA PRODUCTION PROFILE * ▪ First phase focuses on Yanacocha (GEO ** KOZS, 100%) Verde and Chaquicocha deposits to profitably extend Yanacocha 800 operations beyond 2040 700 ▪ Decision to proceed expected in 600 2021 with three year d
Slide 23: Ahafo North – Best Unmined Deposit in West Africa
Ahafo North – Best Unmined Deposit in West Africa INDICATIVE AHAFO NORTH PRODUCTION PROFILE (KOZS) ▪ Open pit mine, stand-alone mill for processing 3.5Mozs of Reserve and 1.0Mozs of Resource* 1,600 ▪ Full funds decision expected 2021 1,400 ▪ Investment of $700-$800M with 1,200 three year development
Slide 24: World-Class Exploration in Top-Tier Jurisdictions
World-Class Exploration in Top-Tier Jurisdictions Exploration Investment** Coffee Galore Creek 20% Musselwhite Éléonore $250M Japan Porcupine in 2021 Nevada Gold Mines* CC&V 80% Peñasquito Mexico Ethiopia Merian Espérance Akyem Ahafo Yanacocha Tanami Andes Centralian LEGEND Boddington Lachlan LEGEND
Slide 25: Robust Near-Mine Exploration Opportunities
Robust Near-Mine Exploration Opportunities NORTH AMERICA Peñasquito: Large resource base and prospective land package with potential to extend mine life to 2040 Éléonore: New district targets for 2021 with <20% property drill tested to date CC&V Underground: Significant potential to extend mine life
Slide 26: Full Potential Demonstrates Newmont's Discipline
Full Potential Demonstrates Newmont’s Discipline >$3B OF VALUE DELIVERED SINCE 2014* 2020 PEÑASQUITO ACCOMPLISHMENTS ▪ Program engrained in Newmont's ✓ Delivered >$200M in Full Potential value over last 12 months operating model and culture ✓ Debottlenecked Augmented Feed Circuit ▪ Delivering >$300M
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: Executive Leadership Team
Broad Management Experience Executive Leadership Team Tom Palmer Rob Atkinson Nancy Buese Jen Cmil President and CEO EVP and COO EVP and CFO EVP HR Dean Gehring Randy Engel Steve Gottesfeld Nancy Lipson EVP and CTO EVP Strategic Dev EVP and CSO EVP General Counsel Board of Directors Noreen Doyle, Gr
Slide 29: Diverse Board Led by Independent Chair
Diverse Board Led by Independent Chair Independent Directors Board Committees Audit Leadership Safety & Corporate Development & Sustainability Governance & Compensation Nominating Bruce R. Brook (C) Veronica Hagen (C) Jane Nelson (C) Noreen Doyle (C) Maura Clark Maura Clark Gregory Boyce (VC) Gregor
Slide 30: Executive Compensation Structure
Executive Compensation Structure Incentive vehicles balance key performance elements Pay mix (CEO % shown) Objectives/Alignment Personal Stock Price ▪ Value varies with NEM performance Bonus Performance ▪ Retention component 6% Base Salary Relative Long-term incentive to outperform gold 14% Stock co
Slide 31: 2021 Strategy Map
2021 Strategy Map Environment, Social Health & Safety Operational Excellence Growth People and Governance OUR PURPOSE • A fatality, injury and illness free • Culture of continuous • Value accretive growth • Culture is a competitive • Access to land, resources and OBJECTIVES To create value and STRAT
Slide 32: 2021 Outlook by Region
2021 Outlooka by Region Consolidated Consolidated Attributable Attributable Consolidated All- Sustaining Development Sustaining Development Consolidated Attributable in Sustaining Capital Capital Capital Capital 2021 Outlook +/- 5% Production Production Consolidated CAS Costsb Expenditures Expenditu
Slide 33: Longer-term Outlook
Longer-term Outlooka Outlook 2021E (+/- 5%) 2022E 2023E 2024E 2025E Attributable Production (koz) 6,500 6,200 - 6,700 6,200 - 6,700 6,500 - 7,000 6,500 - 7,000 Attributable Co-products (GEOs Koz) 1,300 1,200 - 1,400 1,400 - 1,600 1,400 - 1,600 1,400 - 1,600 Consolidated Gold CAS ($/oz) 750 650 - 750
Slide 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Care and Sustainin Costs Research and Maintenanc g Capital All-In Treatment Applicable Development General and e and Other and and Lease All-In Ounces Sustaining Three Months Ended to Reclamatio and Administrativ Expense, Refining Related Sustaining (000) C
Slide 41: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Research Sustainin Costs and Care and g Capital Applicabl Developmen Maintenanc and All-In Treatmen e to t and General and e and Other t and Lease All-In Ounces Sustainin Nine Months Ended Sales(1)(2)(3 Reclamatio Exploration(5 Administrativ Expense, Refini
Slide 42: 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 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 43: 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 44: 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 45: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the most recent Form 10-Q for the quarter ended September 30, 2020, and with the Cautionary Statement on slide 2 and the following notes below Outlook Assumptions. Outlook and projections use
Slide 46: 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. Cash Flow Improvement Projections. Expected cash flow improvements, realized value for 202