Newmont Corporation: Adapting to change

Resilient in the face of the coronavirus pandemic, Newmont continues to lead the gold mining industry with its unmatched assets and award winning environmental, social and governance practices.

newmont corporation adapting to change

Newmont, the world’s largest gold company and also a producer of copper, silver, zinc and lead, has a world-class portfolio of assets in favourable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its environmental, social and governance practices.

Newmont was ranked 13th overall in 3BL Media’s (formerly Corporate Responsibility Magazine’s) 100 Best Corporate Citizens list for 2020, moving up from 20th on last year’s list. It was the sole mining company in the top 20 and one of only two miners to make the 21st annual list.

Newmont has also been recognised for its ESG performance by several other independent organizations in the past twelve months, including the Dow Jones Sustainability World Index (DJSI) which named the company the top gold miner for the fifth year in a row in 2019. Newmont was also the top mining company in FORTUNE’s 2020 list of the World’s Most Admired Companies, and Newsweek included Newmont on its first-ever list of America’s Most Responsible Companies for 2020. It’s a legacy to be proud of and a contributory factor, no doubt, in the company’s resilience in the face of the coronavirus pandemic.

Origins

Colonel William Boyce Thompson founded The Newmont Company in 1916 in New York, as a holding company to invest in worldwide mineral, oil and related companies. According to company legend, the name is a portmanteau of New York, where the founder made his money, and Montana, where he was raised. Now confined to mining, the company produces gold, copper, silver, zinc and lead. Reincorporated as Newmont Corporation in 1921, the company has grown steadily by acquisition and diversification to become, as it approaches its 100th anniversary, the largest gold producer in the world. Listed on the New York stock exchange in 1925, Newmont is one of a select few companies to be listed continuously since that time. Now headquartered in Colorado, Newmont’s operations were

initially focused within North America, but the company’s success has led inevitably to global expansion and today Newmont has mining operations in North and South America, Australasia and Africa. The acquisition of Goldcorp in 2019 elevated the company to the no 1 position, only a few months after Barrick Gold had assumed the title with its acquisition of Randgold Resources for $6.5 billion. Joint ventures have been a

characteristic of the company’s strategy over the years, culminating last year in the creation of Nevada Gold Mines, a JV with Barrick Gold in which Newmont owns 38.5 per cent. Newmont added the word Mining to its name in 1925 and spent a few months recently under the title of Newmont Goldcorp, but in January 2020 it reverted to Newmont Corporation. “We successfully completed two historic transactions in 2019, which

“Now headquartered in Colorado, Newmont’s operations were initially focused within North America, but the company’s success has led inevitably to global expansion”

have transformed Newmont into a truly international organization with an unmatched portfolio of assets and prospects in top-tier jurisdictions around the world,” said Tom Palmer, President and Chief Executive Officer. “As this company has done many times in the past, Newmont has demonstrated its ability to adapt to change, which is truly a hallmark of our success over the last 100 years. Updating our brand represents a natural step as we approach

newmont corporation adapting to change

the next 100 years in Newmont’s long and proud legacy of operating discipline, profitable growth, environmental stewardship, and developing the industry’s best talent.”

Nevada Gold Mines

Prior to the joint venture with Barrick, Newmont had been mining gold, copper and silver in Nevada for over 50 years, from multiple locations along a 100mile corridor in the northern part of the state. On 4 May 1965, Newmont poured its first gold bar from the Carlin Mine in Nevada, marking the beginning of what has become one of the largest and most productive gold mining districts in the world. Newmont Carlin Trend operations have since generated millions of ounces of gold, created thousands of jobs and helped the communities of northern Nevada grow and thrive over the last five decades. The combined assets of Nevada Gold Mines now comprise 10 underground and 12 open pit mines, two autoclave facilities, two roasting facilities, four oxide mills, a flotation plant and five heap leach facilities. The new JV will rank as the largest gold producing complex in the world by a wide margin, with three of the world’s top 10 tier one gold assets (Barrick’s Cortez; the combination of Barrick’s Goldstrike and Newmont’s Carlin; and Barrick’s Turquoise Ridge with Newmont’s Twin Creeks). Identified synergies are expected to deliver up to $500 million per year over the first five years from 2020, then stepping down over time. These will come mainly from integrated mine planning, optimized mining and processing, cost reductions and the combination of Turquoise Ridge and Twin Creeks into a single mine. Carlin’s integrated mining operations consist of three open pits and four underground mines. The open pits include the Emigrant pit and the Gold Quarry pit in the South end of the Carlin Trend and the Silverstar pit at the North end of the Carlin Trend. The underground mines include Leeville, which is a shaft mine, along with Chukar, Pete Bajo and Exodus, which are portal mines. The Phoenix property comprises the Phoenix and Lone Tree operations. Phoenix, an open pit operation acquired through the Battle Mountain Gold merger, began operations in 2006. The open pit Lone Tree was acquired through the Santa Fe merger and began operations in 1991. Long Canyon is an open pit mine that began operations in 2016.

Other North America

Newmont also has a mine in the US state of Colorado – the Cripple Creek & Victor Mine (CC&V) in Teller County, southwest of Pikes Peak. CC&V was formed as an operating company for mining operations in 1976, with mining in its Cresson Project starting in 1995. CC&V’s modern, high-tech operations allow for surface mining of various ore types. The majority of the ore is processed in a zero-discharge, valleytype, leach pad to recover gold and silver. In 2015 CC&V commissioned a rod, ball, and flotation mill which processes CC&V’s higher grade, nonoxidized ore. Through the acquisition of Goldcorp, Newmont became the owner four producing mines and three development projects in Canada. The Porcupine operation in Timmins, Ontario, is in one of the world’s great gold producing camps. The Red Lake Mine, one of the world’s largest gold mines, is in another prolific gold district, approximately 150 miles northwest of Dryden, Ontario. Red Lake was sold this year to Evolution Mining for $375 million, plus future contingent payments of up to $100 million tied to new resource discoveries. Musselwhite mine is a fly-in/fly-out operation in northwestern Ontario, 300 miles north of Thunder Bay, while Éléonore is a major new mine in an exciting gold-producing district in the James Bay region of Quebec. Éléonore is a world-class, state-of-theart facility that is among the largest gold mines in Quebec. Its first gold pour was on 1 October 2014, and commercial production was achieved on 1 April 2015. On 23 March 2020, the operation was placed into care and maintenance after consultation with the local First Nation communities, to mitigate the risk of transmission of the coronavirus to the remote northern communities and to comply with the Quebec government’s

restriction on non-essential travel within the province. The Quebec government lifted restrictions on 13 April and Newmont engaged with the Cree First Nation Grand Council and the Cree Health Board to determine an acceptable path forward to protect its workforce and communities. Éléonore began rampingup operations in early May and the mill restarted shortly afterwards. Newmont recently opened another new mine, Borden, near Chapleau, Ontario, which achieved commercial production in September 2019. The mine features state-of-the-art health and safety controls, digital mining technologies and processes, and low-carbon energy vehicles. At 1,000 square kilometres, Borden’s land package represents

additional exploration up-side as the deposit remains open at depth in a favourable mining jurisdiction. Ore from Borden is processed at the existing mill at Porcupine in Timmins, profitably extending operations at the gold mining complex. At Musselwhite, a materials handling project has been undertaken to improve material movement from the mine’s two main zones below Lake Opapimiskan. An underground shaft will hoist ore from the underground crushers, reducing haulage distances and ventilation costs. The project is 95 per cent complete and will be ready for a full system test once the conveyor is installed. The conveyor installation was approximately 65 per cent complete before the site was placed on care and

“Joint ventures have been a characteristic of the company’s strategy over the years, culminating last year in the creation of Nevada Gold Mines, a JV with Barrick Gold in which Newmont owns 38.5 per cent”

maintenance in late March. All the parts for the conveyor installation are now in Thunder Bay, and installation will be the first thing to ramp up after a decision is made to resume operations. In Mexico, Goldcorp brought to the new entity its 100 per cent owned Peñasquito mine. Located about 780 kilometres northwest of Mexico City and the country’s largest gold producer, Peñasquito also produces silver, lead and zinc. On 12 April 2020 the operation was placed into care and maintenance to comply with the Mexican government’s response to COVID-19 – the temporary suspension of all non-essential activities. Peñasquito began to ramp up activities again on 18 May and production has now recommenced.

newmont corporation adapting to change

Production at Peñasquito was further disrupted this year, however, as a result of blockades by local community protesters over land use, water availability, infrastructure and social investments. In April, Peñasquito reached a definitive agreement with the San Juan de Cedros community (one of 25 neighbouring communities) in Zacatecas, Mexico, which resolves all outstanding disputes between the two parties and also includes access to more than 10,000 hectares of the Cedros Ejido’s land for exploration, mineral production and other operational purposes. The agreement expressly states that any future disputes will be resolved through dialogue and free of blockades. The Cedros General Assembly ratified the agreement on 20 August 2020. “This world-class asset already has reserves of approximately 26 million gold equivalent ounces,” said Robert D. Atkinson, Executive VP & COO, “but the significant exploration potential in this prospective district will allow us to extend the value delivery for decades to come. We are very pleased with the outcome of the agreement and believe it is the best path forward for both parties to develop a long-term partnership to create value and improve lives, shifting the dynamic from confrontation to cooperation.”

South America

In Peru, Newmont has a 51.35 per cent stake in Yanacocha, the largest gold mine in South America. The other stakeholders are Minas Buenaventura (43.65%) and Sumitomo (5%). Yanacocha, in the province and department of Cajamarca, approximately 800 kilometres northeast of Lima, is situated between 3,500 and 4,100 metres above sea level. It poured its first gold ore bar on 7 August 1993. In October 2018, Newmont’s board of directors approved full funding for Quecher Main, a new open pit which achieved commercial production on 31 October 2019. This extends Yanacocha’s oxide mine life to 2027, and also serves as a bridge to future growth options, including development of Yanacocha’s extensive sulphide deposits. The Yanacocha Sulphides project involves expanding open pit and underground operations, producing gold and copper from sulphide and oxide material. Newmont expects to make a decision on Yanacocha Sulphides in 2021, with a three-year development schedule for first production in 2024. If approved it has the potential to extend operations to 2041. On 17 March this year, the Yanacocha operation ramped down in response to travel restrictions imposed by the Peruvian government. Limited personnel remained on-site to perform essential work, including security, water treatment, environmental protection, and gold production continued from leach pads. In early May, the operation began remobilizing following the confirmation that Peru’s economic reactivation plan allowed surface mining. Mining and milling operations restarted shortly afterwards. Also in South America is the Merian mine in northeastern Suriname, approximately 150 km southeast of the capital city of Paramaribo. Merian is owned by Suriname Gold Project CV, a partnership between Newmont Suriname (75 per cent) and the state-owned oil company Staatsolie Maatschappij Suriname (25 per cent). Newmont Suriname operates the mine on behalf of the limited partnership. Construction of the Merian mine began in August 2014, and commercial production was achieved on 1 October 2016. A significant milestone was reached a mere two years later with the pouring of the one millionth ounce of gold. In 2018, the second phase of the Merian project was completed safely, on time and within budget with the construction of a primary crusher to process harder ores being recovered as the mine gets deeper. Newmont’s Cerro Negro mine sits 600 metres above sea level on the low Patagonian plains in southern Argentina, in the province of Santa Cruz. It’s a two-hour drive south from the closest community, Perito Moreno, and a six-hour drive southwest from Comodoro Rivadavia, where the closest commercial airport with flights to Buenos Aires is located. Newmont Cerro Negro has three highgrade underground operating mines, Eureka, Mariana Central and Mariana Norte, and two underground deposits being developed, Emilia and San