Newmont Corporation · NYSE:NEM
Newmont — Q3 2019 Earnings Presentation
33 slides from Newmont's earnings presentation, Nov 5, 2019
Slide 1: Third quarter 2019 results
Third quarter 2019 results November 5, 2019 November 2019 Newmont Goldcorp Corporation I Third quarter 2019 results 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: Tom Palmer, President and Chief Executive Officer
Tom Palmer President and Chief Executive Officer
Slide 4: Building momentum for a strong fourth quarter
Building momentum for a strong fourth quarter Delivered 1.64Moz* and AISC of $987/oz1 – generating Adjusted EBITDA of ~$1.1B6 Q3 highlights Advanced Full Potential – identified $60M in quick wins at Peñasquito and Cerro Negro8 Delivered three projects within budget – Borden, Ahafo Mill Expansion, Qu
Slide 5: Focused on safety and sustainability improvement
Focused on safety and sustainability improvement Embedding Newmont discipline across portfolio: • Driving visible, felt safety leadership • Applying globally-consistent approach to Fatality Risk Management • Enhancing robust tailings management oversight • Maintaining proactive environmental steward
Slide 6: Balanced global portfolio of long-life assets
Balanced global portfolio of long-life assets Key highlights 14 operating mines + 2 non-operated JV’s 4 Targeting stable production of 6-7Moz 2 90% of Reserves in Americas and Australia Unparalleled exploration potential Red Lake Porcupine Nevada Gold Mines Éléonore Pueblo Viejo Musselwhite
Slide 7: Leading project pipeline and track record
Leading project pipeline and track record Conceptual/ Scoping Prefeasibility CC&V Feasibility Underground Definitive Century Feasibility Nueva Execution Musselwhite Unión JV Expansion Yanacocha Coffee Sulfides Musselwhite Cerro Negro Materials Handling Expansion Galore Ahafo North Creek JV Awonsu Sa
Slide 8: Achieving synergy value faster than expected
Achieving synergy value faster than expected Annual run-rate improvements3,4,8 ($M) ~$240 Exploration Supply chain ~$145 Full Potential Exceeding 2019 commitment by $95M G&A G&A 2019 commitment 2019 run-rate On track to achieve ~65% of total $365M annual improvements by 2019 November 2019 Newmont Go
Slide 9: Rob Atkinson, Chief Operating Officer
Rob Atkinson Chief Operating Officer
Slide 10: North America focused on improving performance
North America focused on improving performance • Peñasquito safely resumed operations and is delivering quick wins • Borden achieves commercial production; Porcupine on track for strong Q4 • Musselwhite targeting 3-4 open stopes going into 2020, reaching full production early October • Éléonore Full
Slide 11: South America generates solid results in Q3
South America generates solid results in Q3 • Merian sustained mine productivity and mill performance • Yanacocha production stable with drawdown of existing leach pads • Quecher Main achieved commercial production under budget, improving expected IRR to 15% • Cerro Negro realizing quick wins with i
Slide 12: Australia creating platform for sustainable value
Australia creating platform for sustainable value • Tanami delivers another solid quarter; access to higher grade stopes expected in Q4 • Boddington advancing stripping and completed maintenance shut; unit costs improving • KCGM focused on increasing productivity with mining activity to increase in
Slide 13: Project execution positions Africa for record 2019
Project execution positions Africa for record 2019 • Ahafo delivered solid performance and is well positioned for exceptional Q4 • Ahafo Mill Expansion achieved commercial production on-schedule and within budget • Akyem implemented Advanced Process Control; collaborating with Perth hub • Refining A
Slide 14: 2019 production and costs weighted to Q4
2019 production and costs weighted to Q4 Attributable Sustaining Development 2019 Outlook3,4 metric CAS AISC1 production capital capital (+/- 5%) ($/oz) ($/oz) (Moz) ($M) ($M) Africa 1.1 $585 $770 $125 $110 Australia 1.4 $740 $920 $195 $65 North America 1.1 $895 $1,210 $305 $125 South America 1.3 $6
Slide 15: Nancy Buese, Chief Financial Officer
Nancy Buese Chief Financial Officer
Slide 16: Third quarter Adjusted EBITDA of ~$1.1 billion
Third quarter Adjusted EBITDA of ~$1.1 billion Financial metric Q3 2018 Q3 2019 Change Revenue ($M) $1,726 $2,713 +57% Adjusted Net Income5 ($M) $175 $292 +67% Adjusted Net Income ($/diluted share) $0.33 $0.36 +9% Adjusted EBITDA6 ($M) $636 $1,079 +70% Cash from continuing operations ($M) $428 $793
Slide 17: Q3 adjusted net income of 36 cents per share
Q3 adjusted net income of 36 cents per share GAAP to adjusted net income ($/diluted share)5 $2.71 ($2.88) $0.03 $0.01 $0.49 $0.36 Net income from Gain on Tax adjustments Transaction Other* Adjusted net continuing formation of and valuation related costs income operations Nevada Gold allowance Mines
Slide 18: Focus on returns and disciplined capital allocation
Focus on returns and disciplined capital allocation Maintaining an • Liquidity of >$5B and net debt to adj. EBITDA of 1.4x* investment grade • Refinanced 2019 debt with 10-year notes at 2.8% balance sheet • Preserving balance sheet optionality and flexibility Growing margins, • Advancing our most pr
Slide 19: Tom Palmer, President and Chief Executive Officer
Tom Palmer President and Chief Executive Officer
Slide 20: World's leading gold company
World’s leading gold company • Proven operational performance • Strongest global portfolio in favorable jurisdictions • Focus on growing margins, Reserves and Resources • Deepest pipeline of world-class projects • Disciplined capital allocation and robust investment system • Highest dividend among s
Slide 21: Questions?
Questions? November 2019 Newmont Goldcorp Corporation I Third quarter 2019 results I Slide 21
Slide 22: 2019 outlook by region
2019 outlooka by region Consolidated Consolidated Consolidated Sustaining Development Consolidated Attributable Consolidated All-in Sustaining Capital Capital 2019 Outlook +/- 5% Production Production CAS Costsb Expenditures Expenditures (Koz, GEO Koz) (Koz, GEO Koz) ($/oz) ($/oz) ($M) ($M) North Am
Slide 23: 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 24: Adjusted net income (loss)
Adjusted net income (loss) Three Months Ended Nine Months Ended (1) Net loss (income) attributable to Newmont stockholders from discontinued operations relates to (i) September 30, September 30, adjustments in our Holt royalty obligation, presented net of tax expense (benefit) of $-, $6, $- and $15,
Slide 25: 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 26: 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 27: Net debt to pro forma Adjusted EBITDA ratio
Net debt to pro forma Adjusted EBITDA ratio Management uses net debt to Pro forma 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 Pro forma Adjusted EBITDA represents the rati
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 Projects, (1) Excludes Depreciation and amortization and Research and Treatment Sustaining All-In Reclamation and remediation. Costs Development General Other and Capital and All-In Sustaining (2) Includes by-product credits of $31 and excludes Three Months Ended App
Slide 30: All-in sustaining costs – 2019 outlook gold
All-in sustaining costs – 2019 outlook gold A reconciliation of the 2019 Gold AISC outlook to the 2019 Gold CAS outlook is 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 Sec
Slide 31: All-in sustaining costs – 2019 outlook co-products
All-in sustaining costs – 2019 outlook co-products A reconciliation of the 2019 Co-products AISC outlook to the 2019 Co-Products CAS outlook is 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
Slide 32: 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-K, filed with the SEC on November 5, 2019 and disc
Slide 33: Endnotes
Endnotes 7. Free cash flow is a non-GAAP metric and is generated from Net cash provided from operating activities of continuing operations less Additions to property, plant and mine development. See slide 25 for more information and for a reconciliation to the nearest GAAP metric. 8. Full Potential: