Newmont Corporation · NYSE:NEM
Newmont — Q2 2021 Earnings Presentation
38 slides from Newmont's earnings presentation, Jul 22, 2021
Slide 1: Second Quarter 2021 Earnings
Second Quarter CREATING VALUE & IMPROVING LIVES 2021 Earnings THROUGH SUSTAINABLE, JULY 22, 2021 RESPONSIBLE MINING SECOND QUARTER 2021 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
Tom Palmer CREATING VALUE & IMPROVING LIVES PRESIDENT & CHIEF EXECUTIVE OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING SECOND QUARTER 2021 EARNINGS NEWMONT CORPORATION 3
Slide 4: The World's Leading Gold Company Second Quarter Highlights
The World’s Leading Gold Company SECOND QUARTER HIGHLIGHTS Produced 1.45M attributable Declared industry-leading Published Annual Sustainability ounces of gold* and over 300k dividend of $0.55 per share Report, a transparent review of our GEOs from co-products for Q2** ESG performance Generated $578
Slide 5: External Recognition for Responsible Business Practices
External Recognition for Responsible Business Practices ESG RATINGS ESG RECOGNITION SAM S&P (DJSI) SUSTAINALYTICS TRANSPARENCY CLIMATE 99% Percentile ranking 94%Top decile #3 Most transparent company in A- CDP Climate Scores reflective of global metals and mining sector ESG sector performance S&P 50
Slide 6: World-Class Assets in Top-Tier Jurisdictions
World-Class Assets in Top-Tier Jurisdictions World’s Leading Gold Company ▪ Nine world-class assets in top-tier jurisdictions* Musselwhite ▪ Robust gold reserves of 94Moz and 65Moz 20% in GEO reserves* Éléonore Nevada Gold Mines*** ▪ Stable production of ~8M GEOs* annually Turquoise Ridge/Twin Creek
Slide 7: Steady Production Through Industry-Best Portfolio
Steady Production Through Industry-Best Portfolio 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 ~8 Million Gold Equivalent Ounces per Year
Slide 8: 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 Feasibility Tanami Expansion 2 Definitive Yanacocha Sulfides Peru – Gold (~65%) Copper (~35%) Australia – Gold Ahafo North Pueblo Viejo Expansion JV Ghana – Gold Dominican Republic – Gold Goldrush Decline
Slide 9: Ahafo North Receives Full Funds Approval
Ahafo North Receives Full Funds Approval THE BEST UNMINED DEPOSIT IN WEST AFRICA ▪ Completed permitting process and received full funds approval in July 2021 ▪ Open pit mine, stand-alone mill for processing 3.5Mozs of Reserves and 1.0Mozs of Resource ▪ Mineralization is open in all directions along
Slide 10: Worldwide Vaccination Rates for Total Population
Worldwide Vaccination Rates for Total Population CANADA ▪ 43% fully vaccinated ▪ 69% at least one dose UNITED STATES ▪ 51% fully vaccinated ▪ 55% at least one dose SURINAME MEXICO ▪ 7% fully vaccinated ▪ 16% fully vaccinated ▪ 29% at least one dose ▪ 27% at least one dose GHANA ▪ 1% fully vaccinated
Slide 11: Rob Atkinson
Rob Atkinson CREATING VALUE & IMPROVING LIVES CHIEF OPERATING OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING SECOND QUARTER 2021 EARNINGS NEWMONT CORPORATION 11
Slide 12: Africa Positioned to Deliver Strong H2
Africa Positioned to Deliver Strong H2 ▪ Akyem delivers strong performance due to higher grades from changes to mine sequencing ▪ Ahafo grade improvements expected to continue each quarter in 2021; remains a solid contributor despite mill maintenance and power outages ▪ Progressing Subika undergroun
Slide 13: Australia Building Momentum into H2
Australia Building Momentum into H2 ▪ Tanami was a solid contributor as higher grade mined offset unplanned mill maintenance; managing Covid-related impacts ▪ Tanami Expansion 2 project progressing; continued work on hoist structure and underground shaft ▪ Boddington reached near-record mill perform
Slide 14: North America Delivers Solid Q2 Results
North America Delivers Solid Q2 Results ▪ Peñasquito generated consistent performance; supported by Full Potential improvements to recovery rates ▪ CC&V delivered lower tons mined and continued to experience geochemistry challenges; grades to improve in H2 2021 ▪ Porcupine delivered lower throughput
Slide 15: South America Continues to Manage Covid Impacts
South America Continues to Manage Covid Impacts ▪ Merian delivered steady throughput and higher grades due to ore blending strategy; heavy rainfall limited tons mined ▪ Cerro Negro and Yanacocha continue to manage ongoing Covid- related impacts ▪ Cerro Negro improved productivity while progressing m
Slide 16: Nancy Buese
Nancy Buese CREATING VALUE & IMPROVING LIVES CHIEF FINANCIAL OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING SECOND QUARTER 2021 EARNINGS NEWMONT CORPORATION 16
Slide 17: Strong Financial Performance in the Second Quarter
Strong Financial Performance in the Second Quarter METRICS Q2 2020 Q2 2021 Profit Metrics Revenue ($M) $2,365 $3,065 +30% Adjusted Net Income ($M)* $261 $670 +157% Adjusted Net Income ($/diluted share)* $0.32 $0.83 +159% Adjusted EBITDA ($M)* $984 $1,591 +62% Cash Flow Metrics Cash from continuing o
Slide 18: Q2 Adjusted Net Income of $0.83 per Share
Q2 Adjusted Net Income of $0.83 per Share GAAP TO ADJUSTED NET INCOME ($/DILUTED SHARE) * $0.02 $0.02 $0.02 ($0.03) $0.80 $0.83 GAAP Net income from Fair value of marketable Reclamation and Tax adjustments and Other** Adjusted net income continuing operations equity securities remediation adjustment
Slide 19: Superior Free Cash Flow Across Cycles
Superior Free Cash Flow Across Cycles ATTRIBUTABLE FREE CASH FLOW INCREASES WITH HIGHER GOLD PRICE* 5-Year Cumulative Attributable Free Cash Flow ** ~$21.5B +$3,600M Per Year ~$15.5B INCREMENTAL FCF +$2,400M Per Year ~$9.5B +$1,200M Per Year ~$3.5B BASE $1,200 $1,500 $1,800 $2,100 +$400M FCF per ann
Slide 20: Industry-Leading Dividend Framework
Industry-Leading Dividend Framework ▪ Leading $1.00/share sustainable base dividend ANNUALIZED DIVIDEND PAYOUT $2.80 - $3.70 ▪ Targeting 40% – 60% of incremental attributable Free Cash Flow above $1,200/oz returned to shareholders ▪ Evaluating gold price increments of ~$300/oz $2.20 - $2.80 ▪ Approv
Slide 21: Delivering on Capital Allocation Strategy in Q2
Delivering on Capital Allocation Strategy in Q2 ✓ Approved full funds for Ahafo North INVESTING IN ORGANIC ✓ Yanacocha Sulfides expected to be approved in December 2021 GROWTH ✓ Completed GT Gold transaction, increasing our interest in the prospective Golden Triangle ✓ Maintained industry-leading di
Slide 22: Tom Palmer
Tom Palmer CREATING VALUE & IMPROVING LIVES PRESIDENT & CHIEF EXECUTIVE OFFICER THROUGH SUSTAINABLE, RESPONSIBLE MINING SECOND QUARTER 2021 EARNINGS NEWMONT CORPORATION 22
Slide 23: #1 gold producer with ~8M GEOs per year through 2030
#1 gold producer with ~8M Proven operating model and Focused on industry-leading GEOs* per year through 2030 and deep bench of experienced returns to shareholders with significant exposure to other leaders with strong track record disciplined capital allocation metals through the cycle Strong Free C
Slide 24: Appendix
Appendix SECOND QUARTER 2021 EARNINGS NEWMONT CORPORATION 24
Slide 25: Outlook
Outlooka *Attributable basis; **Attributable co-product gold equivalent ounces; includes copper, silver, lead and zinc; ***Consolidated basis for gold 2021 Consolidated Expense Outlook ($M) (+/-5%) a 2021 outlook projections used in this presentation are considered forward-looking statements and rep
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 others to understand the results of the c
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: 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: 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 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 Care and Sustaining Advanced Projects, Maintenance Treatment Capital and All-In Costs Research and and Other and Lease All-In Ounces Sustaining Three Months Ended Applicable to Reclamation Development and General and Expense, Refining Related Sustaining (000) Costs Per June 3
Slide 32: All-in Sustaining Costs
All-in Sustaining Costs Care and Sustaining Advanced Projects, Maintenance Treatment Capital and All-In Costs Research and and Other and Lease All-In Ounces Sustaining Six Months Ended Applicable to Reclamation Development and General and Expense, Refining Related Sustaining (000) Costs Per June 30,
Slide 33: 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 are 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 Se
Slide 34: 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 35: 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 36: 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 June 30, 2021 filed with the SEC on July 22, 2021, and with the Cautionary Statement on slide 2 and the following notes below Outlook Assumptio
Slide 37: Endnotes
Endnotes Reserves Estimates: The reserves stated in this presentation were prepared in compliance with Industry Guide 7 published by the United States SEC and represent the amount of gold, copper, silver, lead and zinc that we estimated, at December 31, 2020, could be economically and legally extrac
Slide 38: 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 for 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 and