Newmont Corporation · NYSE:NEM
Newmont — Newmont Mining — Merger or Acquisition (March 2019)
21 slides from Newmont's merger presentation, Mar 4, 2019
Slide 1: Capturing the Missing Billions: Unprecedented Value Creation Opportunity
Capturing the Missing Billions Unprecedented Value Creation Opportunity for Barrick and Newmont ShareholdersUnlocking Over $7 Billion NPV of Real Synergies
Slide 2: Cautionary Statements
Cautionary Statements 1 Non-SolicitationThis communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale woul
Slide 3: Barrick Newmont Merger Offers Shareholders Unprecedented Value Creation
Free Cash Flow Uplift Drives Future Growth and Sustainable Shareholder Returns Over $7 Billion NPV of Real Synergies2 Best-in-Class Management Team With Track Record of Delivering Significant Shareholder Value Unrivaled Position in Long-Life, Low Cost Nevada Assets with 20+ Year Mine Life Strong Bal
Slide 4: Few Mining M&A Transactions Create Significant Real and Long-Term Value
Few Mining M&A Transactions Create Significant Real and Long-Term Value Premiums Paid Negate PotentialValue Creation for Shareholders O Size for the Sake of Size Only O Transaction Rationale Based On Short-Term Share Price Movements and Trading Multiple Differences O Operations Too Distant Or Dissim
Slide 5: Potential to Unlock ~$5 Billion NPV of Real Synergies From Nevada
Potential to Unlock ~$5 Billion NPV of Real Synergies From Nevada1 Only Gold District With Multi-Billion Dollar Synergies 4 Twin Creeks TurquoiseRidge Phoenix CortezGoldrush / Fourmile Goldstrike Carlin Long Canyon Elko 20 0 10Miles Wells Battle Mountain Winnemucca Barrick Land HoldingNewmont Land H
Slide 6: Nevada Operations – Obvious Synergies
Barrick has the majority of high-grade reserves and resources and Newmont has the majority of processing plant capacity and infrastructureCombination of Barrick and Newmont’s highly complementary assets enables optimisation across the complex, providing the opportunity to unlock 20+ years of profita
Slide 7: Creating a Virtuous Cycle of Value Creation
… Creating a Virtuous Cycle of Value Creation Unprecedented Opportunity for Immediate, Meaningful Synergies… Ensuring 20+ Years of Profitable and Responsible Production in Nevada 6 … Maximizing Nevada’s Potential Optimised Operations Lower Costs / Higher Free Cash Flow Lower Cut-Off Grades Increased
Slide 8: Synergies Are The Premium – Total Real Synergies of Over $7 Billion NPV
$1.2 B Nevada Complex Corporate G&A Savings Exploration & Project Planning Supply Chain Total Synergies NPV of Real Synergies1 1$4.7 B 2 3$0.8 B 4$0.4 B ~$7.1 B Synergies Are The Premium –Total Real Synergies of Over $7 Billion NPV1 7 Represents the NPV of pre-tax synergies projected over a twenty y
Slide 9: Synergies Are The Premium – ~$4.7 Billion NPV From Nevada
Synergies Are The Premium –Potential to Unlock ~$4.7 Billion NPV of Real Synergies From Nevada1 8 Nevada synergies are well understoodSite-based Nevada team has conducted a bottom-up study of synergies and identified potential opportunitiesSynergies average approximately $500 million per annum in th
Slide 10: Value Creation for All Shareholders Driven by Synergies
$35.39 $41.63 Unaffected Newmont Share Price (Wednesday, 20 Feb 2019) Pro Forma Barrick Newmont Share Price (at Current Barrick P/NAV Multiple) Value Creation for All Shareholders Driven by Synergies 9 Source: Thomson One Analytics and Factset as of February 20, 2019. Based on research analyst conse
Slide 11: Tearing down $5 Billion of Fences in Nevada
Tearing down $5 Billion of Fences in Nevada Newmont has not prioritized the realization of Nevada’s full potentialNewmont’s CEO admitted he hasn’t reviewed the opportunity since 2014, and only then a high level review for acouple of daysAttempts by Barrick to jointly study the opportunity and exchan
Slide 12: Barrick's Recent Value Creation Track Record
Barrick’s Recent Value Creation Track Record Since closing of the Barrick Randgold Merger:Implemented “Miner’s, not Manager’s” ethosIntegrated Barrick / Randgold management teamsRationalised and re-purposed head officeEmpowered regional management structure focused on operationsDeployed mineral reso
Slide 13: Proposal To Newmont
Proposal To Newmont Key Conditions Newmont / Goldcorp transaction terminatedApprovals from shareholders of Barrick and NewmontRegulatory clearance from relevant authoritiesNo financing condition Dividends1 The combined company intends to match Newmont’s annual dividend of $0.56 per share which, base
Slide 14: A Merger With Barrick Creates Far More Real Value for Newmont Shareholders
Source: Thomson One Analytics, company reports and announcements. See Endnote 1.Stated US$100 million pre-tax synergies.Annual average pre-tax synergies for first five full years (2020 – 2024). A Merger With Barrick Creates Far More Real Value for Newmont Shareholders Newmont has estimated total pre
Slide 15: Benefits of the Proposed Merger
Benefits of the Proposed Merger 14 Financial Benefits Operational Benefits Increases Number of Tier One Gold Assets2 ✓ High Quality Exploration and Development Pipeline ✓ Creates Nevada Mining Powerhouse with Fully Optimised Nevada Operations ✓ Best Assets Run by Best Management ✓ Adds High Quality
Slide 16: Leading Portfolio of Eight Tier One Gold Assets
Tier One Gold Assets Non-Tier One Gold Assets 69% 31% Leading Portfolio of Eight Tier One Gold Assets1 15 Majority of combined gold asset value would be comprised of Tier OneGold Assets: CortezGoldstrike / CarlinTurquoise Ridge / Twin CreeksPueblo ViejoMerianLoulo-GounkotoKibaliNewmont Ghana One Tie
Slide 17: Maintains Balanced Political Risk Exposure
Maintains Balanced Political Risk Exposure 16 Barrick Based on company disclosure. 2018 production shown on an attributable basis. Barrick’s production figure include Randgold’s 2018 production figure which was separately reported.Based on company disclosure. Proven and probable gold reserves. Shown
Slide 18: Barrick Outperformed Newmont by 20% Since the Barrick / Randgold Merger Announcement
Barrick Outperformed Newmont by 20% Since the Barrick / Randgold Merger Announcement 17 Total Shareholder Return (Since Barrick / Randgold Announcement1) If we include historical performance, Randgold has outperformed Newmont since Gary Goldberg was appointed CEO2 and by over 480% since 20063 32.4%
Slide 19: Barrick Newmont Merger Offers Shareholders Unprecedented Value Creation
Barrick Newmont Merger Offers Shareholders Unprecedented Value Creation 18 Free Cash Flow Uplift Drives Future Growth and Sustainable Shareholder Returns Over $7 Billion NPV of Real Synergies2 Best-in-Class Management Team With Track Record of Delivering Significant Shareholder Value Unrivaled Posit
Slide 20: Disclaimer
Disclaimer 19 Technical InformationThe scientific and technical information contained in this presentation in respect of Barrick has been reviewed and approved for release by Rodney Quick, Mineral Resource Management and Evaluation Executive of Barrick and Rick Sims, Registered Member SME, Vice Pres
Slide 21: Endnotes
Endnotes 20 A Tier One Gold Asset is a mine with a stated mine life in excess of 10 years with annual production of at least five hundred thousand ounces of gold and total cash cost per ounce within the bottom half of Wood Mackenzie’s cost curve (excluding state-owned and privately owned mines). Tot