newmont mining Paydirt_Gold_Conference_Newmont_Presentation

305 views
250 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
305
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
7
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

newmont mining Paydirt_Gold_Conference_Newmont_Presentation

  1. 1. “Reinvesting in the Gold Bull Market” Paydirt Gold Conference Russell Clark May 21-22, 2007
  2. 2. 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, that are intended to be covered by the safe harbor created by such sections. Such forward-looking statements include, without limitation, (i) estimates of future gold and copper production and sales; (ii) estimates of future costs applicable to sales; (iii) estimates of future capital expenditures, royalty and dividend income, tax rates and expenses; (iv) estimates regarding timing of future development, construction, production or closure activities; (v) statements regarding future exploration results and the replacement of reserves; and (vi) statements regarding cost structure and competitive position. 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, forward-looking 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 forward-looking 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 2006 Annual Report on Form 10-K, filed February 26, 2007 which is on file 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 “forward-looking 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. Slide 2
  3. 3. Newmont - A World Leading Gold Company Only Major US Gold Company Approximately $19 Billion1 Market Capitalization Only Gold Stock in the S&P 500 and Fortune 500 Approximately $285 Million/Day1 Highly Liquid Gold Stock 29 Million Square Acres of Land in the World’s Best Gold Districts Gold Price Leverage “No Gold Hedge” Philosophy 1. Market Capitalization based on 9 May 2007 share price of $41.60, 451 million shares outstanding and 6.6 million average shares traded daily. Slide 3
  4. 4. Changing Gold Industry Fundamentals
  5. 5. Gold Industry – Declining Production 8.0 2,700 Mine Production 7.6 NEM Equity Production (oz mm) Global Production (tonnes) 7.5 Pre-Merger NEM Equity Production (oz/mm) (5.5 mm ozs) 7.0 2,600 6.5 6.0 2,500 5.9 5.5 5.0 2,400 2001 2002 2003 2004 2005 2006 Source: GFMS Slide 5
  6. 6. Gold Industry – Cost Escalation Trends Industry Average Process Plant Construction Costs (Source: Global Insights) 1.80 1.70 1.60 Index (2002 = 1.00) 1.50 1.40 1.30 1.20 1.10 1.00 0.90 2002 2003 2004 2005 2006 Equipment Steel Labor Total Slide 6
  7. 7. Gold Price Leverage Expanding Margins $800 Increasing Earnings $700 $599 Gold Price Leverage $600 $500 $441 $412 $295 $366 $400 $313 $205 $271 $196 $300 $170 $126 $93 $200 $304 $236 $216 $100 $196 $187 $178 $- 2001 2002 2003 2004 2005 2006 CAS/Oz Operating Margin/Oz Realized Price/Oz Slide 7
  8. 8. 2007 First Quarter Financial & Operating Summary
  9. 9. Newmont’s Gold Assets Africa North America Ghana Nevada South America Asia Pacific Peru Indonesia, Australia, New Zealand • 5.9 Million Equity Gold Ounces Sold in 2006 from 11 Mine-sites Globally • Over 29 Million Square Acres of Land in the World’s Best Gold Districts Slide 9
  10. 10. Newmont’s Reserve Growth Track Record & Discovery Cycles 100 Ghana 29 Million Acres in World Class Gold Districts Australia 80 South America 60 Central Asia & Indonesia North 40 America 20 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Slide 10
  11. 11. 2007 First Quarter Financial & Operating Summary Financial (millions except per share) Q1 2007 Q1 2006 Revenues $1,256 $1,132 Net Income1 $68 $209 Net income per common share $0.15 $0.47 Operating Q1 2007 Q1 2006 Consolidated gold sales (000 ounces)2 1,605 1,809 Equity gold sales (000 ounces)2, 3 1,342 1,392 Average realized gold price ($/ounce) $653 $556 Costs applicable to sales ($/ounce) $421 $275 Cash operating margin ($/ounce) $232 $281 (1) Includes 14,200 ounces sold (consolidated and equity) for the quarter ended March 31, 2006 from Phoenix and Leeville start-up activities which are not included in Revenue, Costs applicable to sales and Depreciation, depletion and amortization per ounce calculations prior to commencing operations on October 1, 2006 and October 14, 2006, respectively. Revenues and costs during start-up activities are included in Other income, net. (2) Includes sales from Holloway and Zarafshan discontinued operation for the quarter ended March 31, 2006. (3) Cash operating margin is defined as the Average realized gold price less Costs applicable to sales. Slide 11
  12. 12. 2006 Merchant Banking Results Royalty and Dividend Income Royalty and Other Income: Record $120 million (+52% over 2005) Equity Portfolio and Investment Growth Market value of marketable securities portfolio: $1.4 billion Alberta Heavy Oil Investment: $20 million investment $280 million sale proceeds Canadian Oil Sands Trust: $268 million investment $800 million market value Value Creation Investments $152 million investment in Shore Gold Inc.’s FALC – Diamond Project Other Assets - Iron Ore and Coal, Arctic Gas, Gold Refineries Slide 12
  13. 13. North America Nevada (100%) Q1 Q1 NEVADA 2007 2006 Consolidated gold sales (000 ounces) 560 535 Consolidated costs applicable to sales $493 $395 ($/ounce) Opportunities First full year of commercial production at Leeville and Phoenix Power plant construction and fleet reinvestment targeting cost savings Challenges Ongoing cost pressures Skilled and experienced labor Slide 13
  14. 14. South America Peru (51.35%) Q1 Q1 YANACOCHA 2007 2006 Consolidated gold sales (000 ounces) 455 770 Consolidated costs applicable to sales ($/ounce) $310 $161 Opportunities Began construction of gold mill during 2006 Optimizing development plan for Conga Yanacocha sulfides provide future upside Challenges Decreasing ore grades Increasing stripping ratios Slide 14
  15. 15. Africa Ghana (100%) Q1 Q1 Ahafo 2007 2006 Consolidated gold sales (000 ozs) 125 - Consolidated costs applicable to sales ($/oz) $341 - Opportunities First full year of commercial production at the Ahafo mine Ahafo expansion opportunities Akyem project Challenges Higher cost as a result of diesel power generation due to drought causing nation-wide power rationing Higher anticipated labor and contract service expenditures Slide 15
  16. 16. Asia Pacific - Indonesia (53%) Q1 Q1 2007 2006 Batu Hijau Consolidated copper sales (M lbs) 91 81 Consolidated costs applicable to sales ($/lb Cu) $1.40 $0.81 Consolidated gold sales (000 ozs) 84 73 Consolidated costs applicable to sales ($/oz Au) $330 $208 Opportunities Stable production at a low-cost operation Higher planned grades and throughput in 2007 Copper hedges have expired Challenges Higher stripping ratios/harder ores Higher fuel, energy and consumable prices Slide 16
  17. 17. Asia Pacific - Australia/New Zealand AUSTRALIA/NEW ZEALAND Q1 Q1 2007 2006 Consolidated gold sales (000 ounces) 332 333 Consolidated costs applicable to sales $519 $384 ($/ounce) Tanami Pajingo Jundee Kalgoorlie Boddington Waihi Gold Slide 17
  18. 18. Waihi – Cornish Pumphouse move Slide 18
  19. 19. Australian Growth Opportunities
  20. 20. Tanami Operations Groundr ush Darwin Ro sh ul dru Tanami ad Ha oun Gr Leased Alice Springs Treatment Plant 20 Miles 30 Kilometers N O RTH Dead Bullock Ro ad Haul Soak T Alice o The Granites Springs Slide 20
  21. 21. Discovery Hole - 2004 Slide 21
  22. 22. 2005 Deep Exploration Success Slide 22
  23. 23. Resources – December 2006 Wilson Drill Decline Callie Decline Slide 23
  24. 24. Resources – December 2009 1.3km Slide 24
  25. 25. The Callie Deeps Vision Slide 25
  26. 26. Boddington Update (66.6% Owned) Boddington • 130 km South east of Perth • The mine is 5 km out of town • Today Wandering Dwellingup population Boddington approx 1400 • This will double Quindanning Williams Slide 26
  27. 27. Boddington Project over Perth CBD North Pit South Pit km 4.2 km 1.6 Slide 27
  28. 28. Boddington Update (66.6% Owned) Slide 28
  29. 29. Primary Crusher Foundation Slide 29
  30. 30. Secondary Crusher Foundation Slide 30
  31. 31. Flotation Cells Onsite Slide 31
  32. 32. Phase 1a RDA Liner Slide 32
  33. 33. The Gold Company of Choice for a Gold Bull Market Fifth Consecutive Year of Reserve Growth Growing Operating Margins (+44% in 2006) Building New Lower-cost Mines Balanced Global Portfolio Strong, Liquid Balance Sheet “No Gold Hedging” Philosophy Slide 33

×