Newmont Corporation · NYSE:NEM
Newmont — Investor Presentation (April 2020)
44 slides from Newmont's investor presentation, April 2020
Slide 1: Investor Presentation
Investor Presentation APRIL 2020 APRIL INVESTOR PRESENTATION NEWMONT CORPORATION 1
Slide 2: Cautionary Statement
Cautionary Statement 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 to be covered by the safe harbor created by such sections a
Slide 3: The World’s Leading Gold Company
The World’s Leading Gold Company INDUSTRY’S BEST PORTFOLIO #1 GOLD PRODUCER LEADING SUSTAINABILITY PERFORMANCE 8 world-class assets +6Mozs/year through 2029 #1 gold mining company in DJSI 2 emerging world-class assets 1.2-1.4M GEO/year #1 gold company in the Corporate +90% in Top-Tier
Slide 4: Responding to COVID-19 from Position of Strength
Responding to COVID-19 from Position of Strength COMMITTED TO THE HEALTH, SAFETY, AND WELLBEING OF OUR EMPLOYEES & COMMUNITIES Taking an Informed and Proven Operating Model & Global Standards to Caring for our Workforce Supporting Local Proactive Approach Robust Systems Manage Health & Hygiene Commu
Slide 5: Creating a Fatality, Injury & Illness Free Environment
Creating a Fatality, Injury & Illness Free Environment ADAPTING INCENTIVE PROGRAM TO PROMOTE FATALITY-FREE WORK ENVIRONMENT 15 2.50 From 2012 to 2018: 12 2.00 ICMM member companies have averaged 65 9 1.50 fatalities per annum with no change in the trend 6 7 1.00 5 Over that same time 4 4 period
Slide 6: Intensive Focus on Responsible Business Practices
Intensive Focus on Responsible Business Practices TARGETS RECOGNITION Water Climate Transparency Climate 5% 16.5% #3 B reduction in GHG CDP Climate assessment Reduction in freshwater Most transparent score reflective of * emissions intensity by consumption by YE 2019 ** company in the S&P 500 coordi
Slide 7: What We Promised and What We Delivered
What We Promised and What We Delivered* OPERATIONAL COMMITMENTS FINANCIAL COMMITMENTS CAPITAL ALLOCATION COMMITMENTS >6Mozs of production through 2029 Paid off $~1.7B in Sustainable dividend 79% to $1.25B debt refinanced at lowest coupon in Increased annual dividend by $1.00 per share of Goldc
Slide 8: Superior Free Cash Flow Generation Across Cycle
Superior Free Cash Flow Generation Across Cycle FREE CASH FLOW ACCELERATES WITH GOLD PRICE (ANNUAL INCREMENTAL FCF FROM $1,200 BASE) Capital Allocation Priorities >$17B >$15B +$2,400M $600-$700M/yr** for project development >$13B +$2,000M >$11B +$1,600M ~$400M/yr for exploration and adv projects
Slide 9: Consistency and Longevity of Production Profile
Consistency and Longevity of Production Profile INDICATIVE 10-YEAR GOLD PRODUCTION PROFILE * (ATTRIBUTABLE KOZ) Total GEOs 8 #1 in gold industry 7 Leading project pipeline 6 5 Leading exploration program 4 6 to 7 Moz of stable gold production for the next decade ~$1.5B/yr revenue from GEOs 3
Slide 10: Portfolio Includes Eight World-Class Assets
Portfolio Includes Eight World-Class Assets Musselwhite Newmont world-class assets • +500kGEO’s/year consolidated Éléonore Nevada Gold Mines • <$900/koz AISC Turquoise Ridge/Twin Creeks • Mine life >10 years Goldstrike/Carlin Porcupine Cortez • Top-Tier Jurisdictions* Pueblo Viejo CC&V Merian Akyem
Slide 11: Eight World-Class Assets in Top-Tier Jurisdictions
Eight World-Class Assets in Top-Tier Jurisdictions Carlin Turquoise Ridge Cortez Boddington Tanami Ahafo Peñasquito Nevada (38.5%) >1 Million GEOs* 500–600,000 ozs* ~700,000 ozs** >1.5 Million GEOs* ~1.5Moz gold in 2019 AISC of ~$800/oz* AISC of ~$650/oz* AISC of ~$800/oz** AISC of
Slide 12: >95Moz in Gold Reserves with Substantial Resources
>95Moz in Gold Reserves with Substantial Resources Largest gold reserves in the industry Percent of Gold Reserves by Jurisdiction 2019 Reserve Highlights North America* South America Australia Africa 95.7 MOZ 63 MOZ Industry’s largest gold Gold equivalents from copper, 13% Reserves** silver, zinc, a
Slide 13: The World’s Leading Gold Company
The World’s Leading Gold Company INDUSTRY’S BEST PORTFOLIO #1 GOLD PRODUCER LEADING SUSTAINABILITY PERFORMANCE 8 world-class assets +6Mozs/year through 2029 #1 gold mining company in DJSI 2 emerging world-class assets 1.2-1.4M GEO/year #1 gold company in the Corporate +90% in Top-Tier
Slide 14: Appendix
Appendix APRIL INVESTOR PRESENTATION NEWMONT CORPORATION 14
Slide 15: Sustainability Program Aligned to Best Practice
Sustainability Program Aligned to Best Practice Accountability and transparency in setting public sustainability targets E Water – reduce freshwater consumption by 5% by YE 2019 Climate change – reduce GHG emissions intensity by 16.5% by YE 2020 Environmental Closure – achieve 90% of planned rec
Slide 16: Delivered strong Q4 and Full Year Results
Delivered strong Q4 and Full Year Results Generated $3.7B of Adjusted EBITDA** and $1.4B of Free cash flow ** in 2019 FINANCIAL METRIC Q4 2018 Q4 2019 2018 2019 Revenue ($M) $2,048 $2,967 45% $7,253 $9,740 34% Adjusted Net Income ($M)** $214 $410 92% $718 $970 35% Adjusted Net Income ($/diluted shar
Slide 17: Sustainable, Stable Production Profile
Sustainable, Stable Production Profile * ATTRIBUTABLE PRODUCTION (MOZ ) Stable production 8.0 outlook of 6.2 – 6.7M Total GEOs ounces per year (#1 in 7.0 industry) Additional 1.2 to 1.4M 6.0 gold equivalent ounces produced per year 5.0 ~$1.5B in additional revenue per year generated from co- 4
Slide 18: Culture of Cost Discipline and Productivity
Culture of Cost Discipline and Productivity * CAS & AISC ($/OZ ) Delivered $430M of $1,000 sustainable value from Full Potential program in $900 2019 $800 AISC declining to $800- $900/oz by 2023 $700 Capital discipline maintained with $600 ~$1.0B of sustaining 2021E 2022E 2023E 2024E capital p
Slide 19: Cost and Production Outlook
Cost and Production Outlook Guidance metric 2021E 2022E 2023E 2024E Gold production* 6.2 – 6.7 6.2 – 6.7 6.2 – 6.7 6.2 – 6.7 Other metal production** 1.0 – 1.2 1.1 – 1.3 1.3 – 1.5 1.3 – 1.5 Total GEO production (Mozs) 7.3 – 7.8 7.3 – 7.8 7.6 – 8.1 7.6 – 8.1 CAS*** ($/oz) $650 – $750 $650 – $750 $600
Slide 20: Recent Capital and Financing Activities
Recent Capital and Financing Activities * DEBT REPAYMENT SCHEDULE ($M) Industry-leading quarterly dividend increased by 79% to $0.25/share Initiated $1 billion share repurchase plan - $506M $1,000 executed as of YE 2019 $1,000 $874 Refinanced 2019 debt $700 $600 with 10-year notes at $550 $492
Slide 21: Leading Project Pipeline and Track Record
Leading Project Pipeline and Track Record Scoping Prefeasibility Feasibility Definitive Feasibility Execution CC&V Underground Century Nueva Unión JV Yanacocha Sulfides Musselwhite Materials Handling Merian extension Coffee Ahafo North (Sabajo) Tanami Expansion 2 Galore Creek JV
Slide 22: Tanami Expansion 2 Increases Profitable Production
Tanami Expansion 2 Increases Profitable Production INDICATIVE TANAMI PRODUCTION PROFILE (KOZ) Supports 550 – 600kozs at $600 – $700/oz AISC 800 Provides platform for future 600 growth at world-class asset Production* 150 – 200koz 400 Unit cost >10% improvement** 200 Capital $700 – $800M Internal
Slide 23: Ahafo Projects Extend Life, Improve Costs
Ahafo Projects Extend Life, Improve Costs Subika Underground Updated Mining Method Extends life with Safely captures Mining cost per ton Lower near-term higher underground higher efficiencies improvements production tons (2020 – 2021) 2020 – 2024 metrics Ahafo with investment Production (kozs) 550 –
Slide 24: Ahafo North - Best Unmined Deposit in West Africa
Ahafo North - Best Unmined Deposit in West Africa INDICATIVE AHAFO NORTH PRODUCTION PROFILE (KOZS) Open pit mine, stand-alone mill for processing 3.5Mozs of 1,200 Reserve and 1.0Mozs of * 1,000 Resource 800 Investment of $700 to $800 million with a three year 600 development timeline 400 Incre
Slide 25: Yanacocha Sulfides Optimizing Approach
Yanacocha Sulfides Optimizing Approach INDICATIVE YANACOCHA PRODUCTION PROFILE * (GEO * * KOZS, 100%) First phase focuses on developing most profitable deposits to 800 optimize risk and returns Potential to extend operational 600 life to 2041; favorable drilling at Advancing further Chaqui Centr
Slide 26: Exploration Strength Through Investments
Exploration Strength Through Investments Astro | Evrim Resources Triumph Gold Independence Gold Golden Sky Minerals Aurion Resources Colorado Resources Mawson Resources TMAC Auryn Resources Independence Gold GT Gold Azimut Exploration Quebec Precious Sirios Resources Irving Resources Contact Gold Pr
Slide 27: Nevada Joint Venture Processes
Nevada Joint Venture Processes For contributing excluded assets Four Mile (Barrick), Fiberline (Newmont) and Mike (Newmont): Party that owns asset has obligation to contribute upon completion of successful Feasibility Study, which requires a project IRR of at least 15% Feasibility Study must be
Slide 28: Executive Leadership Team
Broad Management Experience Executive Leadership Team Tom Palmer Rob Atkinson Nancy Buese Jen Cmil President and CEO EVP and COO EVP and CFO EVP HR Dean Gehring Randy Engel Steve Gottesfeld Nancy Lipson EVP and CTO EVP Strategic Dev EVP and CSO EVP General Counsel Board of Directors Noreen Doyle, Gr
Slide 29: Diverse Board Led by Independent Chair
Diverse Board Led by Independent Chair Board Committees Audit Leadership Safety & Corporate Development & Sustainability Governance & Compensation Nominating Bruce R. Brook (C) Veronica Hagen (C) Jane Nelson (C) Noreen Doyle (C) Maura Clark Noreen Doyle Gregory Boyce (VC) Gregory Boyce (VC) René Méd
Slide 30: Executive Compensation Structure
Executive Compensation Structure Incentive vehicles balance key performance elements Pay mix (CEO % shown) Objectives/Alignment Personal Stock Price Value varies with NEM performance Bonus Performance Retention component 6% Base Salary Relative Long-term incentive to outperform gold 14% Stock co
Slide 31: 2020 Short-Term Incentive Plan
2020 Short-Term Incentive Plan* Focus on metrics of high priority to improve focus and ability to execute Aligns with the strategy map and the mining business cycle Functional/personal goals cover additional annual strategic priorities Metrics Weighting Rationale Health & Safety • Focus on cor
Slide 32: 2020 Strategy Map
2020 Strategy Map Environment, Social Health & Safety Operational Excellence Growth People and Governance OUR PURPOSE • A fatality, injury and illness free • Culture of continuous • Value accretive growth • Competitive advantage through • Access to land, resources and To create value and OBJECTIVES
Slide 33: Longer-term Outlook
Longer-term Outlook Outlook 2021E 2022E 2023E 2024E Attributable Production (koz) 6,200 - 6,700 6,200 - 6,700 6,200 - 6,700 6,200 - 6,700 Attributable Co-products (GEOs Koz) 1,000 - 1,200 1,100 - 1,300 1,300 - 1,500 1,300 - 1,500 Consolidated Gold CAS ($/oz) 650 - 750 650 - 750 600 - 700 600 - 700 C
Slide 34: 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 35: 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 36: 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 37: 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 38: All-in Sustaining Costs
All-in Sustaining Costs (1) Excludes Depreciation and amortization and Reclamation and remediation. (2) Includes by-product credits of $32 and excludes co- product revenues of $294. (3) Includes stockpile and leach pad inventory adjustments of $2 at CC&V, $6 at Yanacocha, and $9 at NGM. (4) Reclamat
Slide 39: All-in Sustaining Costs
All-in Sustaining Costs (1) Excludes Depreciation and amortization and Reclamation and remediation. (2) Includes by-product credits of $9 and excludes co-product copper revenues of $74. (3) Includes stockpile and leach pad inventory adjustments of $28 at Carlin, $2 at Twin Creeks, $10 at Yanacocha,
Slide 40: All-in Sustaining Costs
All-in Sustaining Costs (1) Excludes Depreciation and amortization and Reclamation and remediation. (2) Includes by-product credits of $94 and excludes co- product revenues of $691. (3) Includes stockpile and leach pad inventory adjustments of $12 at CC&V, $16 at Yanacocha, $19 at Boddington, $20 at
Slide 41: All-in Sustaining Costs
All-in Sustaining Costs (1) Excludes Depreciation and amortization and Reclamation and remediation. (2) Includes by-product credits of $53 and excludes co- product revenues of $303. (3) Includes stockpile and leach pad inventory adjustments of $5 at CC&V, $39 at Yanacocha, $33 at Ahafo, $34 at Akyem
Slide 42: 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 43: Endnotes
Endnotes Investors are encouraged to read the information contained in this presentation in conjunction with the most recent Form 10-K for the year ended December 31, 2019 filed with the SEC on February 20, 2020, and with the Cautionary Statement on slide 2 and following notes below. Outlook Assumpt
Slide 44: Endnotes
Endnotes All-in Sustaining Cost. AISC or All-in sustaining cost is a non-GAAP metric. See slides 37-41 for more information and a reconciliation to the nearest GAAP metric. AISC as used in the Company’s outlook is a forward-looking statement and is therefore subject to uncertainties. AISC a non-GAAP