Slide 1: Q4 and FY2014 Earnings Call
Q4 and FY2014 Earnings Call February 20, 2015
Slide 2: Cautionary statement
Cautionary statement Cautionary statement regarding forward looking statements, including outlook: 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,
Slide 3: Overview – Gary Goldberg
Overview – Gary Goldberg
Slide 4: Industry leading safety performance
Industry leading safety performance Total Recordable Incident Frequency Rate (TRIFR) (per 200,000 hours worked) 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2012 2013 2014 February 20, 2015 Newmont Mining Corporation | Q4 and FY2014 Earnings Call | 4
Slide 5: Delivering on our strategy
Delivering on our strategy Achieved $524M in savings1 and lowered AISC2 10% to $1,002/oz Improve the underlying Delivered over 4.8 Moz of attributable gold production offsetting divestments business Reduced total injury rate by 17% to one of the lowest in the industry Began construction on Merian an
Slide 6: Strong production offset divestments
Strong production offset divestments Attributable gold production (Moz) Attributable gold production (Moz) 2013 versus 2014 actuals 2014 guidance ranges Asset sales Actual 199 Koz 4.8 Moz 5.0 Moz 5 5 4.9 Moz 5.1 Moz 4.8 Moz 4.7 Moz 4.5 4.5 4.6 Moz 4 4 3.5 3.5 3 3 2013 2014 Original Improved Q2 Febru
Slide 7: Continuing disciplined cost control
Continuing disciplined cost control Gold all-in sustaining costs2 ($/oz) Gold all-in sustaining costs2 ($/oz) 2012 to 2014 actuals 2014 actual and guidance ranges Actual $1,200 $1,200 $1,175/oz $1,002/oz $1,177/oz $1,120/oz $1,100 $1,100 $1,080/oz $1,113/oz $1,075/oz $1,050/oz $1,020/oz $1,000 $1,00
Slide 8: More than $500 million in adjusted savings
More than $500 million in adjusted savings 2014 Consolidated 5% AISC Savings over 2013 ($M) $1,400 $1,203 $243 $1,200 15% 30% 42% Sustainin $1,000 Processi g Capital $50 15% ng 65% $386 $800 24% $600 Mining $524 $400 $200 $0 Total savings Portfolio Foreign Inventory Adjusted changes exchange/ adjust
Slide 9: Operations deliver sustainable cost savings
Operations deliver sustainable cost savings Adjusted Consolidated AISC Savings1 ($524M) • Lowered truck cycle times • Increased payloads CAS IMPROVEMENTS • Improved ore fragmentation • Reduced mine re-handling • Enhanced maintenance practices SUSTAINING CAPITAL • Reduced supplier costs EXPLORATION A
Slide 10: Gold reserve additions at key projects
Gold reserve additions at key projects Proven and probable gold reserves (Moz) 95 3.3 2.5 90 1.5 88.4 5.5 85 82.2 82.2 80 75 2013 Additions Divestments Revisions Depletions 2014 February 20, 2015 Newmont Mining Corporation | Q4 and FY2014 Earnings Call | 10
Slide 11: Construction progressing well at Merian
Construction progressing well at Merian Update • Government has invested $108M to date in 25% equity share 4 • 2014 Reserve additions of ~600 Koz (half saprolite) bringing total reserves to ~4.8 Moz (100% basis) • Construction progressing on schedule and budget Merian February 20, 2015 Newmont Minin
Slide 12: Financial Results – Laurie Brlas
Financial Results – Laurie Brlas
Slide 13: Significant cost savings achieved
Significant cost savings achieved Gold CAS down* Gold AISC down* 18% 11% Q4 and full Year 2014 vs. prior year Q4 2014 Q4 2013 FY2014 FY2013 Average Realized Gold Price ($/oz) $1,194 $1,267 $1,258 $1,393 Average Realized Copper Price ($/lb) $2.55 $2.96 $2.65 $2.98 Attributable Gold Production (Koz) 1
Slide 14: Robust Free Cash Flow despite lower gold price
Robust Free Cash Flow despite lower gold price Adjusted EBITDA up Cash from continuing operations up Free cash flow up 26% 46% $204M Q4 and full year 2014 vs. prior year Q4 2014 Q4 2013 FY2014 FY2013 Revenue ($M) $2,017 $2,188 $7,292 $8,414 Adjusted Net Income5 ($M) $86 $143 $545 $623 Adjusted Net I
Slide 15: Adjusted Q4 2014 income above consensus
Adjusted Q4 2014 income above consensus 5 Adjusted net income ($M) $43 $86 $14 $10 $15 $23 $24 $3 Net Income attributable to Asset Sales Discontinued Restructuring and Reclamation Impairments and Tax valuation Q4 2014 Adj. Net Income loss provisions settlement Operations allowance NEM stockholders o
Slide 16: Clear capital allocation priorities
Clear capital allocation priorities Improving financial flexibility $0.25B • Nearly $6B in cash, marketable securities and revolver capacity* Marketable Securities • $1,451M in 2014 cash from continuing operations • $341M in 2014 free cash flow De-levering the balance sheet 6 • Potential to pre-pay
Slide 17: Strengthening the balance sheet
Strengthening the balance sheet • Revolver has one financial covenant: maximum net debt to book capital of 62.5%; compared to 24.7% as of 31 December 2014 • Potential to repay $750M of debt in 2015 • Prepayment of debt analyzed in the context of the Company’s cash position, operating performance and
Slide 18: Outlook – Gary Goldberg
Outlook – Gary Goldberg
Slide 19: Maintaining steady production
Maintaining steady production Attributable gold production 2015 – 2017 outlook6 4.7 – 5.1 Moz 4.6 – 4.9 Moz 510 – 560 Koz South America – Merian offsets Yanacocha declines 740 – 800 Koz Africa – lower grades at Ahafo 1.8 – 2.0 Moz APAC – higher grades at Batu Hijau, and higher productivity at Tanami
Slide 20: Targeting AISC of $1,000 or less at all operations
Targeting AISC of $1,000 or less at all operations Gold All-in sustaining cost per ounce outlook ($/oz) $960 – South America – lower cost production from Merian $925 – $1,020/oz $1,025/oz Africa – increased stripping and lower grades APAC – higher grades at Batu Hijau, higher grades and productivity
Slide 21: Holding the line on sustaining capital
Holding the line on sustaining capital Total Consolidated Capex ($M) $1,600 $1,400 $1,200 $850 – $950M $1,000 $800 $600 $400 $200 $0 2015 2016 2017 Sustaining capital Merian Turf Vent Shaft Sustaining capital averages $900 million per annum through 2017 February 20, 2015 Newmont Mining Corporation |
Slide 22: Strong pipeline drives long-term value creation
Strong pipeline drives long-term value creation February 20, 2015 Newmont Mining Corporation | Q4 and FY2014 Earnings Call | 22
Slide 23: Investing in profitable growth
Investing in profitable growth Turf Vent Shaft Merian Correnso • Adds 100 – 150 Koz and • 400 – 500 Koz/year at AISC • Extends Waihi’s life by 3 higher grade feed to Mill 6 of $650 – $750/oz (first five years at first quartile AISC years; 100% basis) • Reached full depth of 2,052 • Construction on s
Slide 24: Next wave of optimized projects in 2015
Next wave of optimized projects in 2015 Long Canyon Phase 1 Tanami Expansion Ahafo Mill Expansion • Adds 100 – 150Koz* • Adds 50 – 60Koz* • Adds 100 – 125 Koz* • $250 – $300M investment • $100M - $120M investment • $140M - $160M investment • First production in 2017 • First production in 2017 • Firs
Slide 25: On track to capture gold sector leadership
On track to capture gold sector leadership Where Where Newmont Newmont is today? is Today Where Newmont Where Newmont is heading? is Heading Safety Industry-leading safety performance Zero injuries and illnesses AISC $1,002/oz, down 15% from 2012 At or below $1,000/oz Cost $524M in savings in 2014 S
Slide 26: Questions
Questions
Slide 27: Appendix
Appendix
Slide 28: 2015 Outlook
2015 Outlooka Consolidated Attributable All-in Sustaining Consolidated a2015 Outlook projections used in this presentation Production Production Consolidated CAS Costsb Capital (“Outlook”) are considered “forward-looking statements” and represent management’s good faith estimates or (kozs, kt) (kozs
Slide 29: Adjusted net income
Adjusted net income Adjusted net income (loss) Management of the Company 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 analy
Slide 30: Adjusted EBITDA
Adjusted EBITDA We also present adjusted earnings before interest, taxes, depreciation, and amortization ("adjusted EBITDA") as a non-GAAP measure. Our management uses adjusted net income, adjusted net income per diluted share and adjusted EBITDA as measures of operating performance to assist in com
Slide 31: 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 to provide visibility into the economics of our gold mining operations related to expenditures, operating performance and the ability to generate cash flow fr
Slide 32: All-in sustaining costs
All-in sustaining costs Ounces Costs Advanced Treatment (000)/ All-In (1) Excludes Depreciation and Applicable Projects Other and All-In Pounds Sustaining to Sales (1) Remediation and General and Expense, Refining Sustaining Sustaining (millions) Costs per amortization and Reclamation and Three Mont
Slide 33: All-in sustaining costs
All-in sustaining costs Ounces Costs Advanced Treatment (000)/ All-In (1) Excludes Depreciation and Applicable Projects Other and All-In Pounds Sustaining to Sales (1) Remediation and General and Expense, Refining Sustaining Sustaining (millions) Costs per amortization and Reclamation and (2)(3) (4)
Slide 34: All-in sustaining costs
All-in sustaining costs Ounces Costs Advanced Treatment (000)/ All-In (1) Excludes Depreciation and Applicable Projects Other and All-In Pounds Sustaining to Sales (1) Remediation and General and Expense, Refining Sustaining Sustaining (millions) Costs per amortization and Reclamation and (2)(3) Thr
Slide 35: All-in sustaining costs
All-in sustaining costs Ounces (1) Excludes Depreciation and Costs Advanced Treatment (000)/ All-In Applicable Projects Other and All-In Pounds Sustaining amortization and Reclamation and to Sales (1) Remediation and General and Expense, Refining Sustaining Sustaining (millions) Costs per remediatio
Slide 36: All-in sustaining costs
All-in sustaining costs (1) Excludes Depreciation and Ounces Costs Advanced Treatment (000)/ All-In amortization and Reclamation and Applicable Projects Other and All-In Pounds Sustaining to Sales (1) Remediation and General and Expense, Refining Sustaining Sustaining (millions) Costs per remediatio
Slide 37: Adjusted Consolidated All-in Sustaining Cost Savings
Adjusted Consolidated All-in Sustaining Cost Savings (1) Portfolio changes include impacts from Jundee (sold on July 1, 2014), Midas as a component of Twin Creeks segment (sold on February 11, 2014), La Herradura (sold on October 6, 2014); Akyem start-up (reached commercial production in October 201
Slide 38: 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 most recent Form 10-K, filed with the SEC on February 19,