Second Quarter Earnings Release Conference Call. July 23, 2009

Transcription

1 Second Quarter Earnings Release Conference Call July 23, 2009

2 Cautionary Statement This presentation contains forwardlooking 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 that are intended to be covered by the safe harbor created by such sections and other applicable laws. Words such as expect(s), feel(s), believe(s), will, may, anticipate(s), estimate(s), should, intend(s) and similar expressions are intended to identify forwardlooking statements. Such forwardlooking statements include, without limitation, (i) estimates of future mineral production and sales; (ii) estimates of future costs applicable to sales, other expenses and taxes, for specific operations and on a consolidated basis; (iii) estimates of future capital expenditures, construction, production or closure activities; (iv) statements regarding future exploration expenditures, results and reserves; (v) statements regarding fluctuations in capital and currency markets; (vi) statements regarding potential cost savings, productivity, operating performance, and cost structure; and (vii) expectations regarding the startup time, design, mine life, production and costs applicable to sales and exploration potential of the Boddington project and other projects or operations. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forwardlooking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forwardlooking statements. Such risks include, but are not limited to, gold and other metals price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, political and operational risks in the countries in which we operate, and governmental regulation and judicial outcomes. For a more detailed discussion of such risks and other factors, see the Company s 2008 Annual Report on Form 10K, filed on February 19, 2009, with the Securities and Exchange Commission, as well as the Company s other SEC filings. The Company does not undertake any obligation to release publicly revisions to any forwardlooking statement, to reflect events or circumstances after the date of this news release, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Explanation of NonGAAP Measure and Certain Metrics This presentation contains the nongaap financial measure Adjusted net income and a reconciliation of that measure to the closest equivalent financial measure calculated in accordance with GAAP. Adjusted net income and other non GAAP measures should not be used in isolation or as an alternative to GAAP measures as reflected in the Company's consolidated financial statements and quarterly reports. For further information concerning the company s use of adjusted net income, see the Company s second quarter 2009 earnings release, furnished to the SEC on Form 8K on July 23, /23/09 Second Quarter 2009 Earnings Conference Call 2

3 Second Quarter Highlights Boddington startup underway Equity gold sales of 1.2 Moz at an average realized price of $915/oz and CAS of $423/oz Equity copper sales of 47 Mlbs at an average realized price of $2.17/lb and CAS of $0.58/lb Cash flow from continuing operations of $503 million Adjusted net income (1) of $0.43 per share (2) (1) Refer to slide 17 for a reconciliation to GAAP net income attributable to Newmont stockholders per share (2) 490 million shares of outstanding common stock 07/23/09 Second Quarter 2009 Earnings Conference Call 3

4 Operating Results Inline with Expectations Equity Gold Sales (Kozs) Costs Applicable to Sales ($/oz) Q2 Expectations Q2 Actual $700 $600 $500 $400 $595 $549 $323 $323 $519 $500 $419 Q2 Expectations Q2 Actual $428 $349 $382 $ $300 $229 0 Nevada Yanacocha Australia / NZ Ahafo Batu Hijau Other (1) $200 Nevada Yanacocha Australia / NZ Ahafo Batu Hijau Other (2) (1) Includes equity sales from La Herradura and Kori Kollo (2) CAS does not include Kori Kollo, as this was reclassified to discontinued operations during the second quarter 07/23/09 Second Quarter 2009 Earnings Conference Call 4

5 Operational Performance and Cost Discipline Average Realized Gold Price ($/ounce) $900 Up 2% $915 Costs Applicable to Sales Gold ($/ounce) $439 Down 4% $423 Cash Flow from Continuing Operations ($ million) $503 $381 Up 32% Q Q Q Q Q Q /23/09 Second Quarter 2009 Earnings Conference Call 5

6 2009 Operating Outlook (1) Updating the top end of equity gold sales outlook to 5.4 from 5.5 million equity ounces Updating consolidated capital expenditure outlook to $1.5B $1.7B from $1.4B $1.6B CAS outlook remains unchanged Equity Gold Sales (000 ozs) CAS ($/oz) Consolidated CapEx ($ million) Nevada 1,900 2,000 $535 $575 $230 $260 Yanacocha 1,000 1,050 $300 $320 $145 $155 Australia/New Zealand 1,400 1,500 $460 $500 $950 $1,050 Batu Hijau $280 $320 $45 $55 Ahafo $425 $450 $80 $90 Newmont 5,200 5,400 $400 $440 $1,500 $1,700 (m lbs) ($/lb) Batu Hijau Copper $0.50 $0.65 N/A (2) (1) Refer to slide 16 for original outlook (2) Included in gold capital expenditure above Indicates update to previously announced outlook 07/23/09 Second Quarter 2009 Earnings Conference Call 6

7 Corporate Scorecard 2009 Delivering on Our Commitments Continued focus on operating and project performance Demonstrated leadership in safety, environmental stewardship and social responsibility Improved production profile at competitive costs applicable to sales with Boddington acquisition Strengthened balance sheet with $1.7B in additional financing Complete Boddington project Fulfill arbitration panel s decision regarding Batu Hijau divestiture Deliver 2009 operating performance inline with expectations Ongoing demonstration of leadership in safety, environmental stewardship and social responsibility Optimize and evaluate project pipeline against external opportunities Create operating and business efficiencies across One Newmont 07/23/09 Second Quarter 2009 Earnings Conference Call 7

8 Boddington Plant Startup Underway Dry plant commissioned and operating Wet plant commissioning underway First waste rock to mills achieved July 14 First ore to mills expected by end of July First production expected in August Expected 12 month rampup to full production 2009 production will be lower than expected due to construction workforce productivity issues and significant wet weather 07/23/09 Second Quarter 2009 Earnings Conference Call 8

9 Boddington Plant Startup Underway Description Capital Cost (excluding Capitalized Interest) Schedule CAS (including byproduct credits) Sales 2009 Production/Reserves: 1 st full 5 years (annual average) Reserves Mine Life Current Outlook $2.8 $2.9 billion Mid st 5 years: <$300/oz koz ~ 1 Moz ~ 20 Moz ~24 years Previous Outlook $2.6 $2.9 billion Mid st 5 years: <$300/oz koz ~ 1 Moz ~ 20 Moz +20 years Indicates update to previously announced outlook 07/23/09 Second Quarter 2009 Earnings Conference Call 9

10 Conga Capture Current Market and Regional Opportunities Business Objectives Sustain and grow regional presence, leveraging regional targets Reserves (equity at 51.35%) 6.1 million ounces gold at 0.66 gpt 1.7 billion pounds copper at 0.26% Cu NonReserve Mineralization (equity at 51.35%) Gold: 124 million tonnes at 0.4 gpt Copper: 124 million tonnes at 0.18% Cu Status Synergy options identified Updating capital costs in current market 07/23/09 Second Quarter 2009 Earnings Conference Call 10

11 Akyem Evaluate Current Opportunities Business Objectives Leverage existing region Reserves 7.7 million ounces gold at 1.8 gpt NonReserve Mineralization 14.7 million tonnes at 1.6 gpt Status Received environmental permit Capital cost evaluation in current market Evaluating longterm power alternatives Infill drilling underway 07/23/09 Second Quarter 2009 Earnings Conference Call 11

12 Hope Bay Advancing District Exploration Project Development Expanding District Potential Doris Madrid Targeted Areas of Interest Regional framework study has identified 22 new targets across 80 km belt Followup in progress with geophysics 1 st drill testing on priority targets anticipated by year end Focus on project option evaluation Includes large openpit, underground and variable mill options 35,000 meters of drilling completed year to date Boston Prospectivity Map 07/23/09 Second Quarter 2009 Earnings Conference Call 12

13 Batu Hijau Divestiture Update Newmont Divestiture Obligations per Arbitration Panel s Decision: Paid award costs to Government of Indonesia associated with arbitration Ensured the release of pledges on 31% of PTNNT shares held by senior lenders Reoffered 3% for 2006 and 7% for 2007 divestiture shares to local and regional governments Reached an agreement with Government of Indonesia on valuation for the % and % divestiture shares, totaling ~ $494 million Reoffered % divestiture shares to the Government of Indonesia Prepared to transfer the 2006, 2007 and 2008 divestiture shares Government of Indonesia Divestiture Obligations per Arbitration Panel s Decision: Reached an agreement on the valuation price for the % divestiture shares Local and regional governments to designate buyer(s) for the 3% 2006 and 7% 2007 divestiture shares Government of Indonesia to designate a buyer for the 7% 2008 divestiture shares Designated buyers to fund purchase of shares Government of Indonesia to approve transfer of shares 07/23/09 Second Quarter 2009 Earnings Conference Call 13

14 Industry Leading Community Relations & Safety Standards Community Relationships Review (CRR) Implementation Completed broad distribution of CRR Community relations performance standards under review and revision New standards to be completed by end of 2009 Injury Frequency Rates Newmont s Safety Journey Accident frequency rates trending downward 2009 YTD: > 11 million exposure hours at South American operations without a lost time accident LTAFR TRAFR 07/23/09 Second Quarter 2009 Earnings Conference Call 14

15 Reference Slides

16 2009 Outlook Description Q2 Update Q1 Update 2009 Original Equity gold sales (million ounces) 5,200 5,400 5,200 5,500 5,200 5,500 Costs applicable to sales ($/ounce) $400 $440 $400 $440 $400 $440 Equity copper sales (million pounds) Costs applicable to sales ($/pound) $0.50 $0.65 $0.50 $0.65 $0.65 $0.75 Consolidated capital expenditures ($ million) $1,500 $1,700 $1,400 $1,600 $1,400 $1,600 Amortization ($ million) $740 $780 $775 $825 $775 $825 Exploration ($ million) $165 $175 $165 $175 $165 $175 Advanced projects, research and development ($ million) $140 $160 $120 $150 $120 $150 General & administrative ($ million) $150 $160 $140 $150 $140 $150 Interest expense, net ($ million) $100 $110 $150 $160 $150 $160 Effective tax rate 27% 31% 27% 31% 28% 32% Forecast Assumptions Q2 Update Q1 Update 2009 Original Gold Price ($/ounce) $925 $875 $750 Copper price ($/pound) $2.00 $1.50 $2.00 Oil price ($/barrel) $70 $50 $70 Australian dollar exchange rate /23/09 Second Quarter 2009 Earnings Conference Call 16

17 Reconciliation from Adjusted Net Income to GAAP Net Income (1) Description ($ million except per share, aftertax) Q Per Share Q Per Share Adjusted net income $ 213 $ 0.43 $ 221 $ 0.50 Costs related to Boddington acquisition (42) (0.08) Income taxes Legacy reclamation obligations (41) (0.09) Writedown of marketable securities (34) (0.08) Western Australia gas interruption (5) (0.01) GAAP income from continuing operations (1) $ 171 $ 0.35 $ 270 $ 0.60 Income from discontinued operations (1) (9) (0.02) GAAP net income (1) $ 162 $ 0.33 $ 271 $ 0.60 (1) Attributable to Newmont stockholders 07/23/09 Second Quarter 2009 Earnings Conference Call 17

18 Q vs. Q GAAP Net Income (1) Higher taxes and lower realized copper prices outweigh increased sales and lower input costs $400 $ million $325 $250 $175 $100 (1) Attributable to Newmont stockholders $270 Higher Sales Volume Net Income Q (1) Lower Input Costs Realized Copper Price 2008 Tax Benefit Miniority Interests $171 Net Income Q (1) 07/23/09 Second Quarter 2009 Earnings Conference Call 18