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Gold Industry Overview Gold Market Valuation M&A Transactions Transaction Challenges Newmont M&A Approach
Slide 2
Gold Price
Market Capitalization
$10,000
$15,000
$20,000
$25,000
$30,000
$5,000
$0
Slide 4
Slide 5
Market Capitalization
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$0
Slide 6
Market Capitalization
$1,000 $1,200 $200 $400 $600 $800 $0
re C w ry s t M Go al i ra l d l G ex m a Co ab In r rp rie ter Mi . l R n a ni n e tio g R sou na Al io N rc l am a es rc H Mi n os G ea ig e o h Pe Ri fin d l d C um a ve e be Au k G r G rs D K rl an ri zo old ol d un i r d n L de k la R M td e nd es ine . Pr L ou s e R ci o ak e rce Et ed u G s ru sc B s M ol d a an Se ck eta R M l G J a e s m a in s BS g ou fo in g u G ar rc e Inc N old M s . ev in In su Int ing c . n ern In R a c es tio . AX ou na C Gl la en M rce l ud c IN s e air In O Ce R n c ly n e m tu P s o Go . pu ry a ur ld s M ci ce Q Ne Pa ini fi c s ue v a ci ng Ri m e d fic St ns a P M Cor A tak ac i ne p. nd e ifi ra re Re c G ls w s o G ou l d o l rc df e ie s ld s
Slide 7
Exploration Companies
Company Silver Standard Resources NovaGold Resources Aurelian Resources Inc. Fronteer Development Palmarejo Gold Corp. Gold Eagle Mines Ltd. Seabridge Gold Osisko Exploration Metallica Resources Arizona Star International Minerals Banro Corporation Guyana Goldfields Aquiline Resources Rusoro Mining Ltd Anatolia Minerals U.S. Gold Corporation Southwestern Resources Minera Andes Inc. Greystar Resources
Market Cap.
$2,447 $1,627 $1,046 $949 $740 $707 $605 $585 $504 $494 $479 $419 $413 $410 $408 $393 $327 $323 $316 $316
Company Gold Reserve Inc. Bear Creek Mining Moto Goldmines Ltd Orezone Resources Fortuna Silver Mines Chesapeake Gold New Gold Inc. Andina Minerals Petaquilla Minerals Lake Shore Gold San Anton Resource Detour Gold Corporati Rubicon Minerals Carpathian Gold San Gold Corporation Solitario Resources Linear Gold Corp. Dynasty Metals & Mini Mansfield Minerals Inc Marathon PGM Corp.
Market Cap.
$307 $291 $283 $283 $187 $183 $180 $179 $178 $177 $171 $155 $153 $137 $135 $131 $129 $126 $125 $105
Company Acadian Gold Northern Mining Alexis Minerals YGC Resources Ltd. Atna Resources Ltd. Keegan Resources Inc. Exeter Resource Corp. Pelangio Mines Kimber Resources Inc. Capital Gold Corp. StrataGold Corporation Mines Management Inc Queenston Mining Goldbelt Resources Reunion Gold Corp. Plexmar Resources Gold-Ore Resources Royal Standard Minerals Klondex Committee Bay Resources
Market Cap.
$104 $98 $88 $88 $87 $85 $81 $81 $79 $73 $73 $68 $63 $61 $60 $56 $52 $52 $45 $45
Company Canarc Resource Corp. African Gold Group Cassidy Gold Merrex Gold Inc. IMA Exploration Inc. SearchGold Resources Sulliden Exploration North Atlantic Resources Radius Gold Gateway Gold Temex Resources Robex Resources Trade Winds Ventures Maximus Ventures Ltd. Tagish Lake Gold Goldcrest Resources Portal Resources Alturas Minerals Corp. Pacific Comox Goldrush Resources
Market Cap.
$43 $43 $41 $40 $39 $32 $31 $28 $25 $22 $20 $18 $18 $17 $17 $15 $15 $14 $14 $14
Slide 8
M&A Universe
175
125
Agnico-Eagle Meridian
Barrick
100
Bem a Gold Fields Polyus Harm ony
New m ont
75
Lihir
Anglo Gold
50
25
Kinross IAMGold
0 0.0
Randgold
2.0
4.0
6.0
8.0
10.0
Slide 9
Gold Industry Overview Gold Market Valuation M&A Transactions Transaction Challenges Newmont M&A Approach
Slide 10
Valuation Factors
Growth CFPS Reserves/Share Production/Share Quality Management Premium deposits Margins Reserve Life
Slide 11
1/98
1/99
1/00
1/01
1/02
1/03
1/04
1/05
1/06
1/07
Slide 12
20.0x
15.0x
10.0x
5.0x
1/97 1/98 1/99 1/00 1/01 1/02 1/03 1/04 1/05 1/06 1/07
Slide 13
Gold Industry Overview Gold Market Valuation M&A Transactions Transaction Challenges Newmont M&A Approach
Slide 14
Slide 15
Premium to NAV
Slide 16
NAV Accretion
Slide 17
Slide 18
Plan of Arrangement
66.7% threshold, single process In the market for min. 50-60 days Target controls transaction documentation and timing to a greater degree
Shares
66.7% threshold, single process May be exempt from SEC review In the market for min. 60-70 days Target controls transaction documentation and timing to a greater degree 43-101 compliance required Fairness opinion valuing acquirer
Slide 19
Gold Industry Overview Gold Market Valuation M&A Transactions Transaction Challenges Newmont M&A Approach
Slide 20
Frequency
Slide 21
Industry Data from Schodde (1985-2003) 190 deposits > 1 Moz containing 895 Moz discovered Discovery rate is about 10 deposits > 1Moz per year Approximately 5 of 10 are >3Moz Only 14 of the total 190 deposits are >10 Moz
Slide 22
18000
750
16000
700
14000
650
12000
600
GBS (ASX) Lyxor GBS (LSE) GLD(NYSE) Barclays iShares Gold Price
550
8000
500
6000
450
4000
400
2000
350
0
2003 Source: Murenbeeld 2004 2005 2006
300
Slide 23
Slide 24
10 8 6 4 2
Greenfields ~4 - 5 Years
Full Value
Relative Value
Exploration Focus
Speculative Stock Ahead Of Known Value Orphan Period
Corporate Focus
Speculators Leave Institutional Investing Begins 2 Years Development 1 Year Start-Up Depletion
Pre-Discovery
1 - 2 Years Discovery
Years
Slide 25
Gold Industry Overview Gold Market Valuation M&A Transaction Valuation Transaction Challenges Newmont Growth Strategies
Slide 26
99%
17% 68% 0% -15% -51% 0% 4% 127% 65% -100% 484% 484% 264% 213%
Slide 27
Barrick
Diamond Explorers 2006 Diversified Miners 2006
Newmont
140 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 2006
AngloGold
Gold Fields
Slide 28
Growth Strategies
Core Operations Regional Operating Units Partnering Strategy Stake in future large deposits Investment/Diversification Non-core assets
Slide 29
Thank You
Slide 30