Newmont Corporation · NYSE:NEM
Newmont — Newmont Goldcorp — BofAML Global Metals, Mining & Steel Conference 2019
44 slides from Newmont's conference presentation, May 15, 2019
Slide 1: Gary Goldberg, CEO
Gary Goldberg, CEO BofAML Global Metals, Mining & Steel Conference May 2019 May 2019 Newmont Goldcorp Corporation I BAML Global Metals and Mining Conference I Slide 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: Proven strategy for long-term value creation
Proven strategy for long-term value creation 2013-14 2015 2016 2017 2018 2019 Akyem on line Waihi sold PTNNT sold TEP on line Twin UG on line Nevada JV announced Phoenix copper Long Canyon Merian on line Ahafo Exp funded NW Exodus on line leach on line funded Tanami Power on Long Canyon on Outlook i
Slide 4: Newmont Goldcorp the world's leading gold company
Newmont Goldcorp the world’s leading gold company • Strongest portfolio of operating gold mines, projects, and Reserves in favorable jurisdictions • Targeting sustainable production of 6 to 7 million* ounces of gold annually1 • Industry-leading dividend and investment-grade balance sheet • Featuring
Slide 5: Leading sustainability performance
Leading sustainability performance 2018 highlights*: Total injury rates** Distributed more than $6.5 billion in economic value in host communities 0.52 Recognized for leading practices in inclusion and diversity by Bloomberg Gender-Equality Index and National Association of Corporate Directors’
Slide 6: Leading portfolio across four continents
Leading portfolio across four continents* % 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 Viejo
Slide 7: Leading project pipeline and track record
Leading project pipeline and track record* 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 Main
Slide 8: Stable long-term profile with optionality
Stable long-term profile with optionality 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 $600M†
Slide 9: Steady long-term production with improving costs
Steady long-term production with improving costs1 Attributable gold production* (Moz) +/-5% 7.4 7.5 7.3 7.3 7.3 7.0 6.7 2019E** 2020E 2021E 2022E 2023E 2024E 2025E Newmont Goldcorp outlook Estimated Goldcorp 1/1 - 4/17 (~530kozs) All-in sustaining cost*** ($/oz) +/-5% $945 $935 $890 $875 $835 $810 $
Slide 10: Integration efforts well underway
Integration efforts well underway Goldcorp first quarter results as expected • Cochenour achieves commercial production • Borden project on track to reach commercial production in H2 • 2019 back-half weighted with higher grades at Peñasquito, Éléonore and Cerro Negro in H2 Addressing near-term chall
Slide 11: 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 Potential6 execution Accelerating technology program based on value and viability Geographically diverse portfol
Slide 12: Appendix
Appendix May 2019 Newmont Goldcorp Corporation I BAML Global Metals and Mining Conference I Slide 12
Slide 13: 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 14: Executive Leadership Team
Broad management experience Executive Leadership Team Gary Goldberg, Tom Palmer Nancy Buese Elaine Dorward-King CEO President and COO EVP and CFO EVP S&ER Randy Engel Marcelo Godoy Steve Gottesfeld Scott Lawson Bill MacGowan EVP Strategic Dev SVP Exploration EVP and Gen Counsel EVP and CTO EVP HR Di
Slide 15: Diverse Board led by independent Chair
Diverse Board led by independent Chair 58% of the Board are female or Board Committees ethnically diverse Audit Leadership Corporate Safety & Development & Governance & Sustainability 5 women Compensation Nominating Bruce R. Brook Veronica Hagen Noreen Doyle Joseph A. 1 African (C) (C) (C) Carrabba
Slide 16: 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 May 2019 Newmont Gold
Slide 17: 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 – EBITDA per share* 40% - Capital Efficiency – ROCE • Production efficiency (costs) 20% • Project e
Slide 18: Sustainability program aligned to best practice
Sustainability program aligned to best practice Active participation in leading organizations and initiatives Industry leader in setting and meeting public sustainability targets Water – all sites complete annual water action plan E Environmental Climate change – reduce GHG emissions intensity Closu
Slide 19: Delivered >$2B in Full Potential benefits since 2013
Delivered >$2B in Full Potential benefits since 2013 6 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 20: Newmont Goldcorp value creation potential of >$4.4B
Newmont Goldcorp value creation potential of >$4.4B7 Annual identified cost efficiency and productivity improvements1,6 ($M) $165M $365M Full Potential improvements $100M Total annual improvements Integration planning identified $100M in efficiencies: Supply chain • $90M procurement efficiencies • $
Slide 21: Full Potential improvements to deliver $165M annually
Full Potential improvements to deliver $165M annually1,6 Annual pre-tax cash flows from Full Potential benefits ($M) Benefits by area ($M) • Greatest total value potential from processing improvements – productivity, reliability and cost efficiency • Additional value from surface and underground min
Slide 22: Formation of Nevada JV to unlock significant value
Formation of Nevada JV to unlock significant value Joint Venture (JV) Terms1 • 61.5% Barrick, 38.5% Newmont • Operator: Barrick • Board representation and voting power will reflect ownership levels • Technical, Finance and Exploration advisory committees: equal representation from Barrick and Newmon
Slide 23: Investing in profitable projects across the cycle
Investing in profitable projects across the cycle Mine life Project Cost† (AISC/oz) Production (Koz/yr) Capital ($M) IRR (%) (yrs) Merian (75%) 15 $650 – $750 300 – 375 ~$525 >25% Long Canyon Phase 1 8 $500 – $600 100 – 150 ~$225 >25% Tanami expansion +3 $700 – $750 ~ 80 ~$120 >35% Twin Unde
Slide 24: 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 25: 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 26: 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 27: 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 • Full funds decision expected
Slide 28: 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 29: 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 30: 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 31: Exploration strength through combined investments
Exploration strength through combined investments Astro | Evrim Resources Arcus Development Azimut Exploration Goldcorp Strategic Equity Investments (19) Triumph Gold TMAC Quebec Precious Independence Gold Auryn Resources Sirios Resources Newmont Strategic Equity Investments (10) Lucky Strike Resour
Slide 32: 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 33: 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 34: Recent capital and financing activities
Recent capital and financing activities • Declared Q1 dividend of $0.14/share and paid special dividend of $0.88/share on May 1 • Reset $3.0B revolver to five-year term • Completed exchange of Goldcorp Senior notes • Paid off ~$1.25B of Goldcorp debt at closing Debt repayment schedule as of April 30
Slide 35: Approach to portfolio optimization
Approach to portfolio optimization High Mine life, cost position, returns De-risk Maintain Value Close or divest Improve value Low High Risk Low Country and technical risk May 2019 Newmont Goldcorp Corporation I BofAML Global Metals, Mining & Steel Conference I Slide 35
Slide 36: Capacity for demand growth in China and India
Capacity for demand growth in China and India 2018 Gold consumer demand per capita (grams) 8 6 4 2 0 2018 Gold production by country (tonnes) 500 400 300 200 100 0 Source: World Gold Council; see Endnote 9 May 2019 Newmont Goldcorp Corporation I BofAML Global Metals, Mining & Steel Conference I Slid
Slide 37: ETF investment increasing with market uncertainty
ETF investment increasing with market uncertainty • Gold remains key strategic diversifier as geopolitical uncertainty continues • Strong growth in ETF holdings continues • North American ETF’s shifted to gold inflows in late 2018 with market volatility ETF gold holdings (Moz) and gold price* ($/oz)
Slide 38: Newmont Goldcorp long-term outlook
a Newmont Goldcorp long-term outlook Outlook +/- 5% 2019E 2020E 2021E 2022E 2023E 2024E 2025E Attributable Productionb (koz) 7,000* 7,400 7,500 7,300 7,300 7,300 6,700 Consolidated CAS ($/oz) 715 720 705 690 630 630 670 Consolidated All-in Sustaining Costs ($/oz) 945 935 890 875 835 810 830 Consolid
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 – 2019 outlook
All-in sustaining costs – 2019 outlook A reconciliation of 2019 Gold AISC outlook to the 2019 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 41: 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 42: 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 43: 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 April 25, 2019, and with the Cautionary Statement on slide 2 and following notes. 1. Caution Regarding Projections: Projections used in this pr
Slide 44: Endnotes
Endnotes 7. Net Present Value (NPV) creation as used in this presentation is a management estimate provided for illustrative purposes, and should not be considered a GAAP or non-GAAP financial measure. NPV creation represents management’s combined estimate of pre-tax synergies, supply chain efficien
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