Newmont Mining Corporation (NEM)

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Newmont Mining Corporation (NEM)

Q4 2013 Preliminary Production and Sales Results and 2014 Outlook Conference Call

January 31, 2014 10:00 ET


Kirsten Benefiel - Senior Director, Investor Relations

Gary Goldberg - President and Chief Executive Officer

Laurie Brlas - Executive Vice President and Chief Financial Officer


John Bridges - JPMorgan

Patrick Chidley - HSBC

Brian MacArthur - UBS Securities

Jorge Beristain - Deutsche Bank

Adam Graf - Cowen & Company

Andrew Quail - Goldman Sachs

Brian Yu – Citi

Paretosh Misra - Morgan Stanley

Tanya Jakusconek - Scotiabank

Carly Mattson - Goldman Sachs



Good morning, and welcome to the Newmont Mining Fourth Quarter and Full Year 2013 and 2014 Outlook Preliminary Operations Results Conference Call. All lines will be in listen-only mode until we open for questions and answers. Today’s conference is being recorded. If anyone has any objections, please disconnect at this time.

I would now like to turn the call over to Kirsten Benefiel, Senior Director of Investor Relations. You may begin.

Kirsten Benefiel

Thank you, Melinda, and good morning, everyone. Welcome to Newmont’s Q4 and full year 2013 preliminary operations results and 2014 outlook conference call. With us in the room today are Gary Goldberg, President and CEO and Laurie Brlas, Executive Vice President and CFO.

Turning to Slide 2. I’d like to refer you to our cautionary statement as we will be discussing forward-looking information, which is subject to a number of risks, as further described in our SEC filings, which can be found on our website at

I will now turn the call over to Gary.

Gary Goldberg

Thanks Kirsten and thanks to our callers for joining us this morning. Please join me in welcoming Kirsten Benefiel to her new role as Head of Investor Relations for Newmont and I hope you find her as valuable research as we do. Today, we will present our strong production and sales results for the fourth quarter and full year of 2013 and giving some insight into our cost expectations for the period. I also want to update you on Indonesia and how we are managing our business in a shifting regulatory environment. Finally, Laurie will discuss our 2014 outlook and what we are doing to sustain steady production and solid cost and capital discipline in the year ahead. We will discuss full year 2013 results with you on February 21. So please join us then for more specifics.

Turning to Slide 3. I will begin with a look at our safety performance for 2013. Safety is our most important value at Newmont and we delivered our lowest injury rates in company history this year. In Newmont terms, our total injury rates of 0.47 injuries per 200,000 hours worked translates to 176 fewer injuries than in 2012. We are proud of reaching a new record, but we will not be satisfied until we eliminate all workplace injuries and illnesses. Our ultimate goal is to send our people home safely every day and we believe our safety performance is strongly linked to our overall performance. Continuous improvement is the way of life at Newmont and we are delivering on that commitment across the business.

Turning to Slide 4. Our strategy is to optimize cost and efficiency at each of our operations to build the stronger portfolio of gold and copper assets and to leverage our social and technical expertise for competitive advantage. Newmont has been a successful business for nearly a century and we are confident this strategy will position the business to thrive for another 100 years. We adopted our refresh strategy last year and our results show that we are translating our words into actions. First we have shifted our focus from volume to value. We’re known as the leading gold business but we also have significant experience and expertise in copper and a solid asset base in our Phoenix, Boddington and Batu Hijau operations. The type of commodity however is not as important as the value we can drive from it. We prioritize opportunities based on four criteria and we will pursue those that one create value, two, increase the portfolio mine lines, three, lower our position on the cost curve and four that represent technical and social-political risk that we understand and are confident we can manage. These priorities are reflected in the capital projects we delivered in 2013.

We brought our Akyem gold production in Ghana and Phoenix Copper Leach in Nevada into full commercial production in the fourth quarter delivering both project safely, on time and on budget. We also invested in our Turf Vent Shaft in Nevada which will improve value, mine life and production. Shaft sinking began earlier this month. Our priorities are also reflected in our cost performance. Third quarter year-to-date results demonstrate that we’re sustainably improving cost and efficiency across the business. Through the third quarter we reduced our 2013 consolidated spending by $700 million or $13 from 2012 and we have solid programs in place to continue that trajectory.

Our Tanami operation in Australia is a great example of our ability to achieve a step change in performance by focusing on value. This was a marginally profitable operation in 2012 but as a result of improved haulage efficiency and our great modeling our team turned it into one of our best performance improvements of the year.

Finally we divested assets that no longer fit our strategy. We will generate more than $600 million by selling our interest in Canadian Oil Sands and divesting our Midas operation in Nevada. Sharpening our focus on efficiency improvements also helped us meet the high end of regional [ph] production outlook.

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