Newmont Corporation · NYSE:NEM
Newmont — Q1 2020 Earnings Presentation
33 slides from Newmont's earnings presentation, May 5, 2020
Slide 1: First Quarter 2020 Earnings
First Quarter 2020 Earnings MAY 5, 2020 FIRST QUARTER 2020 EARNINGS 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: Tom Palmer, President & Chief Executive Officer
Tom Palmer PRESIDENT & CHIEF EXECUTIVE OFFICER FIRST QUARTER 2020 EARNINGS NEWMONT CORPORATION 3
Slide 4: Responding to COVID-19 from Position of Strength
Responding to COVID-19 from Position of Strength COMMITTED TO THE HEALTH, SAFETY AND WELLBEING OF OUR EMPLOYEES & COMMUNITIES Taking an Informed, Resilient Operating Model Global Standards to Caring for our Workforce Supporting Local Proactive Approach & Robust Systems Manage Health & Hygiene Commun
Slide 5: COVID-19 Scenario Planning Framework
COVID-19 Scenario Planning Framework Wave 1 Wave 2 Wave 3+ April 2020 – June 2020 Late 2020 – Early 2021 Recurring Annually unconstrained number of New cases in developed countries start + New cases in China start to decline ✓ + to decline - cases, symptoms mitigated by flu-like vaccine Supply chain
Slide 6: Eight World-Class Assets in Top-Tier Jurisdictions
Eight World-Class Assets in Top-Tier Jurisdictions Musselwhite Newmont world-class assets • +500k GEO’s/year consolidated Éléonore Nevada Gold Mines** • <$900/koz AISC Turquoise Ridge/Twin Creeks • Mine life >10 years Goldstrike/Carlin Porcupine Cortez • Top-Tier Jurisdictions* Pueblo Viejo** CC&V M
Slide 7: Industry-Leading Production Drives Long Term Value
Industry-Leading Production Drives Long Term Value INDICATIVE 10-YEAR GOLD PRODUCTION PROFILE * (ATTRIBUTABLE MOZ PER ANNUM) Total GEOs 8 7 6 5 4 3 6 to 7 Moz of stable production for the next decade 2 1 - 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 ~$1.5 billion in additional GEO revenue
Slide 8: Superior Free Cash Flow Generation Across Cycles
Superior Free Cash Flow Generation Across Cycles FREE CASH FLOW INCREASES WITH HIGHER GOLD PRICE * (INCREMENTAL FROM $1,200 BASE) Assumptions and Indicative Sensitivities Attributable Base Price Change FCF ($M) >$17B Gold ($/oz) $1,200 +$100 +$400 >$15B +$2,400M AUD $0.75 -$0.05 +$40 >$13B +$2,000M
Slide 9: What We Promised and What We Are Delivering
What We Promised and What We Are Delivering Commitments Realized Cash Flow Improvements* ($M) ✓ Portfolio of world-class assets in = Original run-rate commitment top-tier jurisdictions $240 $500 ✓>6Mozs/year through 2029 ✓ Industry-leading 96Moz in gold reserves* ✓Exceeding synergy targets by $120 $
Slide 10: Strength and Resilience in First Quarter 2020
Strength and Resilience in First Quarter 2020 ✓ Produced 1.5M attributable ounces of gold ** * * and reported CAS of $781/oz and AISC of $1,030/oz Reported solid Q1 results: ✓ Produced 339K gold equivalent ounces* from co-product metals ✓ Generated $939M in Operating Cash Flow and Free Cash Flow of
Slide 11: Rob Atkinson, Chief Operating Officer
Rob Atkinson CHIEF OPERATING OFFICER FIRST QUARTER 2020 EARNINGS NEWMONT CORPORATION 11
Slide 12: Majority of Sites Operational Despite COVID-19
Majority of Sites Operational Despite COVID-19 % of 2020 Planned Attrib. Status Sites in Care and Maintenance (C&M) Gold Production Boddington ~11% Operational ▪ Working with authorities and local communities Peñasquito to implement a safe and efficient restart plan Tanami ~8% Operational ▪ Working
Slide 13: Australia Growing Margins and Extending Life
Australia Growing Margins and Extending Life TE2 surface raise bore TE2 mid-shaft collar Q1 2020 ▪ Tanami delivered solid Q1 from consistent throughput and mill recovery ▪ Tanami Expansion 2 progressing well; pilot hole to mid-shaft chamber at Gold production (Koz)* 258 655m, advancing to 1,460m Co-
Slide 14: Africa Investing in Future Growth and Profitability
Africa Investing in Future Growth and Profitability ▪ Akyem delivered steady Q1 production despite lower grades ▪ Ahafo continues stripping in Awonsu and Subika open pits ▪ Subika underground sub-level shrinkage development rates ahead of schedule ▪ Ahafo North project work continues remotely; on-tr
Slide 15: North America Advancing Critical Path Work
North America Advancing Critical Path Work Musselwhite conveyor installation Musselwhite 90mRL conveyor transfer Q1 2020 ▪ Peñasquito achieved record tonnage through Augmented Feed Circuit; highest-ever production of Ag, Zn & Pb; record Au production from PLP Gold production (Koz)* 376 ▪ Éléonore pr
Slide 16: South America Resuming Operations
South America Resuming Operations ▪ Merian delivered strong Q1 with higher ore tonnes mined ▪ Yanacocha delivered solid performance from higher leach production ▪ Cerro Negro improving operational standards; Tailings Storage Facility study work continues remotely ▪ Yanacocha Sulfides study work and
Slide 17: Nancy Buese, Chief Financial Officer
Nancy Buese CHIEF FINANCIAL OFFICER FIRST QUARTER 2020 EARNINGS NEWMONT CORPORATION 17
Slide 18: Generated Strong Q1 Free Cash Flow of $611 million
Generated Strong Q1 Free Cash Flow of $611 million FINANCIAL METRIC Q1 2019 Q1 2020 Revenue ($M) $1,803 $2,581 +43% Adjusted Net Income ($M) * $176 $326 +85% Adjusted Net Income ($/diluted share) * $0.33 $0.40 +21% Adjusted EBITDA ($M)* $687 $1,118 +63% Cash from continuing operations ($M) $574 $939
Slide 19: Q1 Adjusted Net Income of 40 cents per Share
Q1 Adjusted Net Income of 40 cents per Share GAAP TO ADJUSTED NET INCOME ($/DILUTED SHARE) ** $0.09 $1.04 $0.22 $0.02 ($0.24) ($0.73) $0.40 Net income from Gain on asset and Change in fair value Debt Tax adjustments Other* Adjusted net continuing investment sales and impairments of extinguishment an
Slide 20: Industry-Leading Returns to Shareholders
Industry-Leading Returns to Shareholders STRONG FINANCIAL POSITION AND DISCIPLINED CAPITAL ALLOCATION PRI ORITIES Strengthening our balance sheet ✓ Liquidity of ~$6.6B – strong cash position of $3.7B ✓ Net debt to adjusted EBITDA** ratio of 0.7x ✓ Generated $1.4B cash proceeds from divestitures ✓ Re
Slide 21: Tom Palmer, President & Chief Executive Officer
Tom Palmer PRESIDENT & CHIEF EXECUTIVE OFFICER FIRST QUARTER 2020 EARNINGS NEWMONT CORPORATION 21
Slide 22: The World's Leading Gold Company
The World’s Leading Gold Company INDUSTRY’S BEST PORTFOLIO #1 GOLD PRODUCER LEADING SUSTAINABILITY PERFORMANCE ➢ 8 world-class assets ➢ +6Mozs/year through 2029 ➢ #1 gold mining company in DJSI ➢ 2 emerging world-class assets ➢ 1.2-1.4M GEO/year ➢ #1 gold company in the Corporate ➢ +90% in Top-Tier
Slide 23: Appendix
Appendix FIRST QUARTER 2020 EARNINGS NEWMONT CORPORATION 23
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: All-in Sustaining Costs
All-in Sustaining Costs Advanced Sustaining Projects, Capital Costs Research and Treatment and All-In Applicable General Other and All-In Ounces Sustaining Development Lease Three Months Ended to Reclamation and and Expense, Refining Related Sustaining (000) Costs per March 31, 2020 Sales (1)(2)(3)
Slide 30: All-in Sustaining Costs
All-in Sustaining Costs Advanced Projects, Sustaining Costs Research and Treatment Capital All-In Applicable General Other and and Lease All-In Ounces Sustaining Development Three Months Ended to Reclamation and and Expense, Refining Related Sustaining (000) Costs per March 31, 2019 Sales (1)(2)(3)
Slide 31: Net Debt to Pro Forma Adjusted EBITDA Ratio
Net Debt to Pro Forma Adjusted EBITDA Ratio Three months Three months Three months Three months Management uses net debt to Pro forma Adjusted EBITDA as non-GAAP measures to evaluate the ended ended ended ended Company’s operating performance, including our ability to generate earnings sufficient to
Slide 32: 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 March 31, 2020 filed with the SEC on May 5, 2020 (including without limitation the risks related to COVID-19 under the heading “Risk Factors”),
Slide 33: Endnotes
Endnotes Adjusted Net Income is a non-GAAP metric. Adjusted Net Income per share refers to Adjusted Net Income per diluted share. See slides 24-25 or more information and reconciliation to the nearest GAAP metric. Free Cash Flow. FCF or Free cash flow are used herein is a forward-looking statement a