Q121 results preview

Newmont Corporation 19 April 2021 Update
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Newmont Corporation

Q121 results preview

Q121 results preview

Metals & mining

19 April 2021

Price

US$64.78

Market cap

US$51,843m

Net debt (US$m) end-December 2020

1,162

Shares in issue

800.3m

Free float

99.7%

Code

NEM, NGT

Primary exchange

NYSE (NEM)

Secondary exchange

TSX (NGT)

Share price performance

%

1m

3m

12m

Abs

5.8

5.7

9.2

Rel (local)

0.2

(4.8)

(27.0)

52-week high/low

US$70.4

US$54.4

Business description

Founded in 1916, Newmont Corporation is the world’s leading gold company with a world-class portfolio of assets in North and South America, Australia and Africa. It is the only gold producer in the S&P 500 Index, and is widely recognised for its ESG practices and as a leader in value creation, safety and mine execution.

Next events

Q121 results

29 April 2021

Ahafo North decision

H121

Yanacocha Sulphides decision

H221

Q221 results

July 2021

Analyst

Charles Gibson

+44 (0)20 3077 5724

Newmont Corporation is a research client of Edison Investment Research Limited

Newmont’s Q121 results are scheduled for release on 29 April. Recent highlights include the acquisition of GT Gold, the redemption of its senior 2021 notes and linking its revolving credit facility to third-party assessments of its scoring on a number of sustainability issues. At the same time, however, the gold price has continued to fall, from US$1,811/oz at the time of our last note to US$1,776/oz at the time of writing, while production continues to be expected to be weighted towards the second half of the year. This note adjusts our earnings forecasts for Q121 to reflect these effects, as well as introducing forecasts for Q2–Q421.

Year end

Revenue (US$m)

PBT
(US$m)

EPS*
(US$)

DPS
(US$)

P/E
(x)

Yield
(%)

12/19

9,740

3,693

1.32

**1.44

49.1

2.2

12/20

11,497

3,143

2.66

1.45

24.4

2.2

12/21e

12,256

3,226

2.49

2.20

26.0

3.4

12/22e

12,329

3,651

2.90

2.20

22.3

3.4

Note: *EPS are normalised, excluding amortisation of acquired intangibles and exceptional items. **Includes US$0.88/share special dividend.

FY21e production weighted 47:53 H121:H221

Production in FY21 is expected to be weighted approximately 47:53 H121:H221, influenced by a rising grade profile at Boddington and Ahafo, in particular, and also (albeit to a lesser extent) Merian, Musselwhite, Porcupine and CC&V. Note that this effect is expected to be particularly pronounced in the first and last quarters of the year. Conversely, costs will be weighted towards H121. In part, this reflects lower production in H121. However, it also reflects higher sustaining capex – in particular, relating to the installation of the autonomous haulage system at Boddington – which will act to inflate all-in sustaining costs (AISC).

Dividend forecasts unchanged

The effect of our adjustments has been to reduce our Q121 EPS forecast by 5.1%. However, we have left our dividend forecast unchanged. Under its current framework, NEM has undertaken to pay shareholders a sustainable base dividend of US$1.00/share (or US$0.25/share per quarter) at a gold price of US$1,200/oz, which it augments by US$0.60–0.90/share (or US$0.15–0.225/share per quarter), evaluated in increments of US$300/oz for gold prices above US$1,200/oz, with the goal of targeting 40–60% of incremental free cash flow returned to shareholders. As such, it has some discretion in the level of the pay-out and also the extent to which it regards the gold price level of US$1,800/oz as being sustainable.

Valuation: US$76.34/share

Pending Q121 results, we are leaving our blended average valuation of Newmont unchanged at US$76.34/share based on nine valuation measures using three different methodologies (see our note The sustainable leader, published on 9 February). This puts Newmont on a premium rating relative to its peers, but at a discount relative to its own historical valuation measures which, on average, imply a share price closer to US$100/share.

Q121 results preview

Newmont’s Q121 results are scheduled for release on Thursday 29 April. Recent highlights within the quarter include the acquisition of GT Gold as well as the redemption of Newmont’s senior 2021 notes and revisions to its revolving credit facility such that its pricing is now linked to Newmont’s scoring (according to third parties) on a variety of sustainability linked issues – demonstrating, among other things, Newmont’s commitment to environmental, social and governance issues.

From a financial perspective, the gold price has continued to fall, from US$1,811/oz at the time of our last note (see The full Newmonty, published on 26 February 2021) to US$1,683/oz on 8 March, before recovering to US$1,776/oz at the time of writing – a decline of 1.9%. The prices of silver (-8.2%) and lead (-3.7%) have been similarly weak, although they have been partially offset by increases in the prices of copper (+12.0%) and zinc (+3.5%). As noted at the time of Newmont’s Q420/FY20 results, both (higher) production and (lower) costs are anticipated to be weighted towards H221. That is to say, production will be higher in H221 cf H121 approximately in the ratio 53:47. In part, this pattern will reflect rising grade profiles at Boddington and Ahafo, in particular (NB the H1:H2 ratio of production at Boddington will also be enhanced by productivity improvements from the autonomous haulage system ramp-up, while that at Ahafo will also be volume-driven by productivity improvements throughout the year from the change in mining method at Subika underground). However, Merian, Musselwhite, Porcupine and CC&V are all expected to exhibit rising production profiles as the year progresses as well. Note that this effect is expected to be particularly pronounced in the first and last quarters of the financial year. At the same time, costs will be weighted in the other direction – that is to say, H121 costs will be higher than H221 costs. In part, this will reflect lower production in H121. However, it will also reflect higher sustaining capital costs in H121 – in particular, relating to the autonomous haulage system being implemented at Boddington – which is likely to cause a disproportionate increase in AISC relative to Q420.

Edison’s forecasts for Q121 and FY21 already anticipated a c 47:53 split in production over the course of the year. However, we have now adjusted them to reflect the lower gold price in Q121, which we also now assume will prevail over the course of the remainder of the year as well. Consequently, we have revised our forecasts downwards slightly for both Q121 and FY21 (note: our forecasts for FY22 and beyond remain unchanged except for the effect of our FY21 revisions on FY22’s net interest expense and base metals prices). In general, the 1.9% decline in the assumed gold price has resulted in a 1.7% decline in our revenue forecast for FY21, a 6.1% decline in our pre-tax profit forecast and a 6.6% decline in our basic adjusted EPS forecast.

In the light of these changes (and with the usual caveats surrounding the volatility of quarterly earnings and quarterly earnings forecasts), our best estimate of Newmont’s likely Q121 and FY21 results (by quarter) is as shown in Exhibit 1, below:

Exhibit 1: Newmont quarterly income statement, Q120–Q421e cf Edison prior forecast

US$m (unless otherwise indicated)

Q120

Q220

Q320

Q420

FY20

Q121e
(prior)

Q121e
(current)

Q221e

Q321e

Q421e

FY21e

Sales

2,581

2,365

3,170

3,381

11,497

3,002

2,958

2,962

3,163

3,172

12,256

Costs and expenses

– Costs applicable to sales

1,332

1,058

1,269

1,355

5,014

1,314

1,314

1,336

1,357

1,351

5,357

– Depreciation and amortisation

565

528

592

615

2,300

591

594

602

610

618

2,424

– Reclamation and remediation

38

40

38

250

366

54

54

54

54

54

215

– Exploration

44

26

48

69

187

63

63

63

63

63

250

– Advanced projects, research and development

27

26

39

30

122

35

35

35

35

35

140

– General and administrative

65

72

68

64

269

65

65

65

65

65

260

– Impairment of long-lived assets

0

5

24

20

49

0

0

0

0

0

0

– Care and maintenance

20

125

26

7

178

0

0

0

0

0

0

– Other expense, net

33

54

68

51

206

69

69

69

69

69

276

Total

2,124

1,934

2,172

2,461

8,691

2,190

2,193

2,223

2,252

2,255

8,923

Other income/(expenses)

– Gain on formation of Nevada Gold Mines

0

0

0

0

0

– Gain on asset and investment sales, net

593

(1)

1

84

677

– Other income, net

(189)

198

(44)

3

(32)

42

42

42

42

42

168

– Interest expense, net of capitalised interest

(82)

(78)

(75)

(73)

(308)

(88)

(78)

(76)

(69)

(52)

(275)

322

119

(118)

14

337

(46)

(36)

(34)

(27)

(10)

(107)

Income/(loss) before income and mining tax

779

550

880

934

3,143

766

730

705

885

907

3,226

Income and mining tax benefit/(expense)

23

(164)

(305)

(258)

(704)

(310)

(298)

(291)

(351)

(353)

(1,294)

Effective tax rate (%)

(3.0)

29.8

34.7

27.6

23.4

40.5

40.9

41.4

39.7

39.0

40.1

Profit after tax

802

386

575

676

2,439

455

431

413

534

553

1,931

Equity income/(loss) of affiliates

37

29

53

70

189

35

33

32

32

32

130

Net income/(loss) from continuing operations

839

415

628

746

2,628

490

465

445

566

585

2,061

Net income/(loss) from discontinued operations

(15)

(68)

228

18

163

0

0

0

0

0

0

Net income/(loss)

824

347

856

764

2,791

490

465

445

566

585

2,061

Minority interest

2

3

17

(60)

(38)

19

18

16

16

16

65

Do (%)

0.2

0.9

2.0

(7.9)

(1.4)

3.9

3.9

3.6

2.8

2.7

3.2

Net income/(loss) attributable to stockholders

822

344

839

824

2,829

471

447

429

550

570

1,996

Adjustments to net income

(496)

(83)

(142)

32

(689)

0

0

0

0

0

0

Adjusted net income

326

261

697

856

2,140

471

447

429

550

570

1,996

Net income/(loss) per common share (US$)

Basic

– Continuing operations

1.037

0.513

0.761

1.01

3.32

0.587

0.557

0.537

0.687

0.712

2.493

– Discontinued operations

(0.019)

(0.085)

0.284

0.02

0.20

0.000

0.000

0.000

0.000

0.000

0.000

– Total

1.019

0.428

1.045

1.03

3.52

0.587

0.557

0.537

0.687

0.712

2.493

Diluted

– Continuing operations

1.035

0.512

0.758

1.00

3.31

0.583

0.554

0.533

0.682

0.707

2.475

– Discontinued operations

(0.019)

(0.084)

0.283

0.02

0.20

0.000

0.000

0.000

0.000

0.000

0.000

– Total

1.016

0.427

1.041

1.02

3.51

0.583

0.554

0.533

0.682

0.707

2.475

Basic adjusted net income per share (US$)

0.404

0.325

0.868

1.07

2.66

0.587

0.557

0.537

0.687

0.712

2.493

Diluted adjusted net income per share (US$)

0.403

0.324

0.865

1.06

2.66

0.583

0.554

0.533

0.682

0.707

2.475

DPS (US$/share)

0.250

0.250

0.400

0.55

1.45

0.550

0.550

0.550

0.550

0.550

2.200

Source: Newmont, Edison Investment Research

Note that, all other things being equal, Newmont’s results for Q121 (when the gold price averaged US$1,796/oz), might be expected to fall between those of Q220 (when the gold price averaged US$1,713/oz) and Q320 (when it averaged US$1,911/oz). Within that context, our EPS forecast of US$0.557/share for Q121 and US$2.493/share for FY21 compare to the market consensus, as follows:

Exhibit 2: FY21 Basic adjusted EPS forecast, Edison cf consensus (US$/share)

Q121e

Q221e

Q321e

Q421e

Sum Q1-Q421e

FY21e

Edison forecast

0.557

0.537

0.687

0.712

2.493

2.493

Consensus forecast

0.83

0.87

0.93

0.92

3.55

3.67

High

1.10

1.10

1.12

1.14

4.46

5.21

Low

0.58

0.72

0.64

0.49

2.43

2.67

Source: Edison Investment Research, Refinitiv (13 April 2021)

Although Edison’s forecasts are low in the context of the range of analysts’ expectations, we note that the average expected realised price of gold for Newmont in FY21 appears to be in the order of US$1,900/oz (cf US$1,947/oz at the time of our last note) compared with our US$1,776/oz (ie the current spot price) for the remainder of the year, which may go some way to explaining the difference. Otherwise, excluding external factors, we recognise two specific (upside) risks relating to Edison’s estimates, being 1) the reclamation and remediation charge and 2) the tax charge.

Edison’s reclamation and remediation charge estimate of US$215m for FY21 compares with Newmont’s guidance of US$160m. In this case, Edison’s estimate has been skewed upwards by the unusually large reclamation and remediation charge incurred in Q420 (see Exhibit 1). However, we will reconsider this charge after the Q121 results. In the case of the tax charge, Edison’s FY21 effective tax charge estimate of 40.1% compares with Newmont guidance of 34–38%. This difference, we suspect, is a consequence of Newmont depreciating centrally held assets and being able to charge that cost against income earned from producing assets. Note that, all other things being equal, the more the gold price rises, the more Newmont’s effective tax rate falls as lower tax operations contribute proportionately more to pre-tax profits.

If Newmont’s reclamation and remediation charge for the full year is c US$160m and its effective tax rate is 35.8% (ie approximately in the middle of the guidance range), then our basic adjusted EPS forecasts would increase to the following:

Exhibit 3: Edison FY21 EPS forecast sensitivity (US$/share)

Q121e

Q221e

Q321e

Q421e

Sum Q1–Q421e

FY21e

Basic adjusted EPS

0.557

0.537

0.687

0.712

2.493

2.493

Ditto*

0.622

0.597

0.744

0.764

2.727

2.728

Increase (US$/share)

+0.065

+0.060

+0.057

+0.052

+0.234

+0.235

Increase (%)

+11.7%

+11.2%

+8.3%

+7.3%

+9.4%

+9.4%

Source: Edison Investment Research. Note: *Adjusted for reclamation & remediation and effective tax rate guidance.

Dividend

While the gold price has dropped below US$1,800/oz since the time of our last note, we have left our dividend forecast for the quarter unchanged at US$0.55/share. Readers are reminded that, at the time of its Q320 results in October 2020, Newmont unveiled a new dividend framework whereby it formally re-based its dividend to a ‘base’ pay-out of US$1.00/share (or US$0.25/share per quarter) at a gold price of US$1,200/oz, but also stated explicitly that it would return 40–60% of incremental attributable free cash flow that it generated above a gold price of US$1,200/oz to shareholders. Under the new framework, Newmont will augment the ‘base’ pay-out in increments of US$0.60–0.90/share per year (or US$0.15–0.225/share per quarter), evaluated in increments of US$300/oz for gold prices above US$1,200/oz, with the goal of targeting 40–60% of incremental free cash flow above a gold price of US$1,200/oz returned to shareholders. Thus a (sustainable) gold price at US$1,800/oz should (on this basis) result in a quarterly dividend of US$0.55/share (ie the same as the one paid in Q420), although a gold price of US$1,776/oz could result in one of US$0.40/share. In this context however, it is worth noting that Newmont affords itself a degree of latitude in the level of the ultimate pay-out in that, should it decide to pay out nearer 60% of incremental attributable free cash flow to shareholders that it generates above a US$1,200/oz gold price, rather than 40%, then there is scope for the quarterly dividend to remain at the higher level, notwithstanding the gold price being temporarily fractionally below the US$1,800/oz level, as is the case currently. In consequence, we have left our dividend forecasts for both Q121 and FY21 unchanged on the basis that we believe that the gold price being momentarily below US$1,800/oz is unlikely to result in any readjustment in the quarterly distribution relative to its Q420 level.

Exhibit 4: Financial summary

Accounts: US GAAP, year end: December, US$m

 

 

2018

2019

2020

2021e

2022e

2023e

2024e

2025e

Income statement

 

 

 

 

 

 

 

 

 

 

Total revenues

 

 

7,253

9,740

11,497

12,256

12,329

11,808

12,380

12,051

Cost of sales

 

 

(4,093)

(5,195)

(5,014)

(5,357)

(5,114)

(5,101)

(5,611)

(5,611)

Gross profit

 

 

3,160

4,545

6,483

6,898

7,216

6,707

6,769

6,439

SG&A (expenses)

 

 

(244)

(313)

(269)

(260)

(260)

(260)

(260)

(260)

R&D costs

 

 

(350)

(415)

(309)

(390)

(390)

(390)

0

0

Other income/(expense)

 

 

(406)

(253)

(831)

(323)

(323)

(323)

(215)

(214)

Exceptionals and adjustments

 

(424)

2,220

214

0

0

0

0

0

Depreciation and amortisation

 

(1,215)

(1,960)

(2,300)

(2,424)

(2,558)

(2,666)

(2,878)

(2,764)

Reported EBIT

 

945

3,994

3,451

3,501

3,685

3,068

3,416

3,201

Finance income/(expense)

 

(207)

(301)

(308)

(275)

(34)

340

7

20

Other income/(expense)

 

0

0

0

0

0

0

0

0

Exceptionals and adjustments

 

0

0

0

0

0

0

0

0

Reported PBT

 

738

3,693

3,143

3,226

3,651

3,408

3,423

3,221

Income tax expense (includes exceptionals)

 

 

(419)

(737)

(515)

(1,165)

(1,254)

(1,040)

(1,070)

(1,074)

Reported net income

 

 

380

2,884

2,791

2,061

2,397

2,368

2,353

2,147

Basic average number of shares, m

 

 

533

735

804

801

800

800

800

800

Basic EPS (US$/share)

 

 

0.64

3.82

3.52

2.49

2.90

2.91

2.86

2.54

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

2,584

3,734

5,537

5,925

6,243

5,734

6,294

5,965

Adjusted EBIT

 

 

1,369

1,774

3,237

3,501

3,685

3,068

3,416

3,201

Adjusted PBT

 

 

1,162

1,473

2,929

3,226

3,651

3,408

3,423

3,221

Adjusted EPS (US$/share)

 

 

1.35

1.32

2.66

2.49

2.90

2.91

2.86

2.54

Adjusted diluted EPS (US$/share)

 

 

1.34

1.32

2.66

2.47

2.87

2.89

2.84

2.53

 

 

 

 

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment

 

 

12,258

25,276

24,281

23,758

23,600

23,234

21,856

20,292

Goodwill

 

 

58

2,674

2,771

2,771

2,771

2,771

2,771

2,771

Intangible assets

 

 

0

0

0

0

0

0

0

0

Other non-current assets

 

 

3,122

5,752

5,812

5,812

5,812

5,812

5,812

5,812

Total non-current assets

 

 

15,438

33,702

32,864

32,341

32,183

31,817

30,439

28,875

Cash and equivalents

 

 

3,397

2,243

5,540

5,648

5,959

6,653

9,224

12,138

Inventories

 

 

630

1,014

963

1,145

1,152

1,104

1,157

1,126

Trade and other receivables

 

 

254

373

449

369

372

356

373

363

Other current assets

 

 

996

2,642

1,553

1,553

1,553

1,553

1,553

1,553

Total current assets

 

 

5,277

6,272

8,505

8,716

9,036

9,665

12,307

15,181

Non-current loans and borrowings

 

 

3,608

6,734

6,045

5,495

5,003

4,589

4,589

4,589

Other non-current liabilities

 

 

3,808

8,438

8,076

8,098

8,121

8,144

8,167

8,190

Total non-current liabilities

 

 

7,416

15,172

14,121

13,593

13,124

12,733

12,756

12,779

Trade and other payables

 

 

303

539

493

483

461

460

506

506

Current loans and borrowings

 

 

653

100

657

657

657

657

657

657

Other current liabilities

 

 

831

1,746

2,219

2,219

2,219

2,219

2,219

2,219

Total current liabilities

 

 

1,787

2,385

3,369

3,359

3,337

3,336

3,382

3,382

Equity attributable to company

 

 

10,502

21,420

23,008

23,141

23,697

24,266

25,270

26,026

Non-controlling interest

 

 

1,010

997

871

964

1,061

1,148

1,338

1,869

 

 

 

 

 

 

 

 

 

 

 

Cashflow statement

 

 

 

 

 

 

 

 

 

 

Profit for the year

 

 

380

2,884

2,791

2,061

2,397

2,368

2,353

2,147

Taxation expenses

 

 

386

832

704

1,294

1,397

1,204

1,229

1,180

Profit before tax

 

 

0

0

0

0

0

0

0

0

Net finance expenses

 

 

207

301

308

275

34

(340)

(7)

(20)

EBIT

 

 

0

0

0

0

0

0

0

0

Depreciation and amortisation

 

 

1,215

1,960

2,300

2,424

2,558

2,666

2,878

2,764

Share based payments

 

 

76

97

72

0

0

0

0

0

Other adjustments

 

 

749

(2,131)

(654)

215

215

215

215

214

Movements in working capital

 

 

(743)

(309)

295

(306)

(224)

(129)

(216)

(151)

Interest paid / received

 

 

(207)

(301)

(308)

(275)

(34)

340

7

20

Income taxes paid

 

 

(236)

(498)

(926)

(1,294)

(1,397)

(1,204)

(1,229)

(1,180)

Cash from operations (CFO)

 

 

1,827

2,866

4,882

4,395

4,946

5,121

5,229

4,975

Capex

 

 

(1,032)

(1,463)

(1,302)

(1,901)

(2,400)

(2,300)

(1,500)

(1,200)

Acquisitions & disposals net

 

 

(98)

224

1,463

0

0

0

0

0

Other investing activities

 

 

(47)

41

65

0

0

0

0

0

Cash used in investing activities (CFIA)

 

 

(1,177)

(1,226)

91

(1,901)

(2,400)

(2,300)

(1,500)

(1,200)

Net proceeds from issue of shares

 

 

(98)

(479)

(521)

(102)

0

0

0

0

Movements in debt

 

 

0

(1,186)

(175)

(550)

(492)

(414)

0

0

Dividends paid

 

 

(301)

(889)

(834)

(1,819)

(1,822)

(1,790)

(1,319)

(1,350)

Other financing activities

 

 

(56)

(223)

(150)

85

77

77

160

490

Cash from financing activities (CFF)

 

 

(455)

(2,777)

(1,680)

(2,385)

(2,236)

(2,127)

(1,158)

(860)

Currency translation differences and other

 

 

(4)

(3)

6

0

0

0

0

0

Increase/(decrease) in cash and equivalents

 

 

191

(1,140)

3,299

108

310

694

2,571

2,915

Currency translation differences and other

 

 

0

0

0

0

0

0

0

0

Cash and equivalents at end of period

 

 

3,489

2,349

5,648

5,756

6,067

6,761

9,332

12,246

Net (debt) cash

 

 

(864)

(4,591)

(1,162)

(504)

299

1,407

3,978

6,892

Movement in net (debt) cash over period

 

 

(864)

(3,727)

3,429

658

802

1,108

2,571

2,915

Source: Company sources, Edison Investment Research

General disclaimer and copyright

This report has been commissioned by Newmont Corporation and prepared and issued by Edison, in consideration of a fee payable by Newmont Corporation. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

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United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

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United States of America

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Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Newmont Corporation and prepared and issued by Edison, in consideration of a fee payable by Newmont Corporation. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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