Newmont Corporation · NYSE:NEM
Newmont — Q1 2018 Earnings Presentation
38 slides from Newmont's earnings presentation, Apr 26, 2018
Slide 1: Q1 2018 Earnings
Q1 2018 Earnings April 26, 2018
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, President and Chief Executive Officer
Gary Goldberg President and Chief Executive Officer
Slide 4: In memoriam
In memoriam Kwadwo Asare Kojo Bismark Ben Brako Amankwah Gideon Ebenezer Sarfo Agyei Wale April 26, 2018 Newmont Mining Corporation I Q1 2018 earnings I Slide 4
Slide 5: Strong first quarter results
Strong first quarter results AISC1 of $973/oz – in line with guidance Superior operational 1.2 Moz of gold production – in line with back-end weighted production profile execution Full Potential improvements continue – piloting centralized process control in Australia Leading growth pipeline – on tr
Slide 6: Costs tracking in line with guidance
Costs tracking in line with guidance All-in sustaining cost1 ($/oz) $1,169 $1,099 $965 – $1,025 $997 $935 $913 $924 Q1 = $973/oz 2012 2013 2014 2015 2016 2017 2018E April 26, 2018 Newmont Mining Corporation I Q1 2018 earnings I Slide 6
Slide 7: Gold production in line with back-half weighting
Gold production in line with back-half weighting Attributable gold production (Moz) 5.3 4.9 – 5.4 4.9 5.0 4.9 4.7 4.6 Q1 = 1.2 Moz 2012 2013 2014 2015 2016 2017 2018E April 26, 2018 Newmont Mining Corporation I Q1 2018 earnings I Slide 7
Slide 8: On track to deliver 3 profitable projects in 2018
On track to deliver 3 profitable projects in 2018 Mine life Cost Production Capital IRR Project (years) (AISC/oz) (Koz/yr) ($M) (%) Northwest Exodus +10 ~$25 lower 50 – 75 $50 – $70 >40% Ahafo Mill Expansion – 75 – 100 $140 – $180 >20% reduced by $250 – $350** Subika Underground 11 150 – 200 $160 –
Slide 9: 2018 outlook unchanged
2018 outlook unchanged Guidance5 metric 2018E 2019E 2020E – 2022E Gold production (Moz) 4.9 – 5.4 Moz 4.9 – 5.4 Moz 4.6 – 5.1 Moz CAS ($/oz) $700 – $750 $620 – $720 $650 – $750 AISC ($/oz) $965 – $1,025 $870 – $970 $870 – $970 Sustaining capital ($M) $600 – $700 $600 – $700 $550 – $650 Development c
Slide 10: Progressing long-term growth options
Progressing long-term growth options • North America – UG expansions (Carlin, Twin, Long Canyon); Greenfields (Canada, US) • South America – Expansions (Yanacocha, Sabajo); Greenfields (Andes, Guiana Shield) • Africa – UG expansions (Ahafo, Akyem); Greenfields (Ethiopia) • Australia – UG expansions
Slide 11: Nancy Buese, EVP and Chief Financial Officer
Nancy Buese EVP and Chief Financial Officer
Slide 12: Adjusted EBITDA up 12% on higher revenue
Adjusted EBITDA up 12% on higher revenue Financial metric Q1 2017 Q1 2018 Change Revenue ($M) $1,690 $1,817 +8% Adjusted Net Income6 ($M) $136 $185 +36% Adjusted Net Income ($/diluted share) $0.26 $0.35 +35% Adjusted EBITDA4 ($M) $574 $644 +12% Cash from continuing operations ($M) $377 $266 -29% Div
Slide 13: Q1 adjusted net income of 35 cents per share
Q1 adjusted net income of 35 cents per share GAAP to adjusted net income ($/diluted share) $0.02 $0.01 $0.35 $0.32 Net income from Restructuring Valuation allowance Adjusted net income continuing operations and other and other tax adjustments April 26, 2018 Newmont Mining Corporation I Q1 2018 earni
Slide 14: Financial flexibility to execute capital priorities
Financial flexibility to execute capital priorities Maintaining investment grade balance sheet • Liquidity of $6.0B as of Q1 2018 • Net debt to adjusted EBITDA of 0.4x Growing margins, Reserves and Resources Returning cash to shareholders • Expected annualized dividends of ~$300M7 • Repurchased8 1.7
Slide 15: Tom Palmer, EVP and Chief Operating Officer
Tom Palmer EVP and Chief Operating Officer
Slide 16: Africa positioned for strong second half
Africa positioned for strong second half • Ahafo Mill Expansion project suspended pending safe restart • Strong mill performance offset harder ores and lower grades at Ahafo and Akyem in Q1 • Subika Underground on schedule with seven stopes progressing • Ahafo North advances to definitive feasibilit
Slide 17: North America leveraging portfolio strength
North America leveraging portfolio strength • Carlin delivers strong performance with higher grade from underground mines • CC&V concentrate shipments underway; higher than expected recoveries • Resequencing at Twin Creeks due to geotechnical challenges • Long Canyon Phase 2 advances to prefeasibili
Slide 18: South America delivering solid performance
South America delivering solid performance • Merian delivers strong Q1 performance with first ore from Maraba; primary crusher on course • Yanacocha improves full year cost guidance despite lower Q1 leach recoveries • Quecher Main under development and Chaquicocha Oxides added to project pipeline •
Slide 19: Australia focused on operational excellence
Australia focused on operational excellence • Optimized Boddington maintenance strategy defers production • Re-sequencing mine plan at KCGM to manage impacts from west wall slip • Improving mine productivity at Tanami through refreshed Full Potential program • Tanami Power Project construction under
Slide 20: 2018 earnings and cash flow weighted to Q4
2018 earnings and cash flow weighted to Q4 • North America – higher stripping and maintenance in first half; Silverstar production in Q4 • Australia – stable production at Tanami; Boddington stripping and KCGM remediation ongoing • South America – increasing Merian haul capacity and expect higher gr
Slide 21: Gary Goldberg, President and Chief Executive Officer
Gary Goldberg President and Chief Executive Officer
Slide 22: Global portfolio of long-life assets
Global portfolio of long-life assets Operations and sustaining projects Improvements since 2012 Current projects 3 new lower cost mines Mid-term projects Long-term projects 9 profitable expansions Average project IRR >20% $2.8B in non-core asset sales North America Carlin Improved value and risk pro
Slide 23: Leading project pipeline and track record
Leading project pipeline and track record Long-term projects (>3 years; not in outlook) Mid-term projects (<3 years; not in outlook) Greenfields Sustaining projects (in outlook) Conceptual/ Scoping Current projects (in outlook) Prefeasibility/ Colombia Feasibility Definitive Pete Bajo Expansion Feas
Slide 24: Steady long-term production profile
Steady long-term production profile Projected production profile (Moz)* Industry-leading long-term pipeline 6.0 Divested Current Mid-term Feasibility projects projects projects** 5.0 4.0 3.0 Existing assets and sustaining projects 2.0 1.0 - 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 25: Reserve base represents competitive advantage
Reserve base represents competitive advantage 128oz 12yrs 73% 1.14g/t Reserves per Kshare Operating Reserves Reserves based in Reserve grade vs gold sector vs gold sector US, Australia, vs 2017 mined grade average of 72oz/Kshares* average of 10 yrs** Canada and Western of 1.16 g/tonne vs gold sector
Slide 26: Leading in profitability and responsibility
Leading in profitability and responsibility • Safe, stable and profitable gold production over longer horizon • Ongoing margin, Reserves and Resources growth across four anchor regions • Superior balance sheet, dividends and sustainability performance Gold pour at Carlin April 26, 2018 Newmont Minin
Slide 27: Questions?
Questions?
Slide 28: 2018 Outlook
2018 Outlooka Consolidated a2018 Outlook in the table above are considered “forward-looking All-in Consolidated statements” and are based upon certain assumptions, including, but not Consolidated Attributable Consolidated Sustaining Total Capital limited to, metal prices, oil prices, certain exchang
Slide 29: Adjusted net income
Adjusted net income 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 contin
Slide 30: Adjusted net income
Adjusted net income Three Months Ended March 31, (1) Net loss (income) attributable to Newmont stockholders from discontinued 2018 2017 operations relates to (i) adjustments in our Holt royalty obligation, presented Net income (loss) attributable to Newmont stockholders $ 192 $ 47 net of tax expense
Slide 31: 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 32: 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 33: 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, such as Costs applicable to sales per ounce, to provide visibility into the economics of our mining operations related to expenditures, operating performan
Slide 34: All-in sustaining costs
All-in sustaining costs Advanced Projects, (1) Excludes Depreciation and Research and Treatment All-In amortization and Reclamation and Costs Development General Other and All-In Ounces Sustaining remediation. Three Months Ended Applicable Reclamation and and Expense, Refining Sustaining Sustaining
Slide 35: All-in sustaining costs
All-in sustaining costs Advanced (1) Excludes Depreciation and Projects, amortization and Reclamation and Research and Treatment All-In Costs Development General Other and All-In Ounces Sustaining remediation. Year Ended Applicable Reclamation and and Expense, Refining Sustaining Sustaining (000)/Po
Slide 36: All-in sustaining costs – 2018 outlook
All-in sustaining costs – 2018 outlook Similar to the historical AISC amounts presented above, AISC outlook is also a non-GAAP financial measure. A reconciliation of the 2018 Gold AISC outlook range to the 2018 CAS outlook range is provided below. The estimates in the table below are considered “for
Slide 37: 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-Q, filed with the SEC on April 26, 2018 and disclo
Slide 38: Endnotes
Endnotes 7. Anticipated annualized dividends of ~$300M represents management’s current expectation based upon an assumed annual dividend of $0.56/share on ~533M shares outstanding. However, 2018 dividends beyond Q1 2018 have not yet been approved or declared by the Board of Directors. Management’s e