4. Market Capitalization
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$10,000
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$20,000
$25,000
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Slide 4
6. Market Capitalization
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$2,000
$3,000
$4,000
$5,000
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Slide 6
7. Market Capitalization
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$400
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Slide 7
8. Exploration Companies
Market Market Market Market
Company Company Company Company
Cap. Cap. Cap. Cap.
Silver Standard Resources Gold Reserve Inc. Acadian Gold Canarc Resource Corp.
$2,447 $307 $104 $43
NovaGold Resources Bear Creek Mining Northern Mining African Gold Group
$1,627 $291 $98 $43
Aurelian Resources Inc. Moto Goldmines Ltd Alexis Minerals Cassidy Gold
$1,046 $283 $88 $41
Fronteer Development Orezone Resources YGC Resources Ltd. Merrex Gold Inc.
$949 $283 $88 $40
Palmarejo Gold Corp. Fortuna Silver Mines Atna Resources Ltd. IMA Exploration Inc.
$740 $187 $87 $39
Gold Eagle Mines Ltd. Chesapeake Gold Keegan Resources Inc. SearchGold Resources
$707 $183 $85 $32
Seabridge Gold New Gold Inc. Exeter Resource Corp. Sulliden Exploration
$605 $180 $81 $31
Osisko Exploration Andina Minerals Pelangio Mines North Atlantic Resources
$585 $179 $81 $28
Metallica Resources Petaquilla Minerals Kimber Resources Inc. Radius Gold
$504 $178 $79 $25
Arizona Star Lake Shore Gold Capital Gold Corp. Gateway Gold
$494 $177 $73 $22
International Minerals San Anton Resource StrataGold Corporation Temex Resources
$479 $171 $73 $20
Banro Corporation Detour Gold Corporati Mines Management Inc Robex Resources
$419 $155 $68 $18
Guyana Goldfields Rubicon Minerals Queenston Mining Trade Winds Ventures
$413 $153 $63 $18
Aquiline Resources Carpathian Gold Goldbelt Resources Maximus Ventures Ltd.
$410 $137 $61 $17
Rusoro Mining Ltd San Gold Corporation Reunion Gold Corp. Tagish Lake Gold
$408 $135 $60 $17
Anatolia Minerals Solitario Resources Plexmar Resources Goldcrest Resources
$393 $131 $56 $15
U.S. Gold Corporation Linear Gold Corp. Gold-Ore Resources Portal Resources
$327 $129 $52 $15
Southwestern Resources Dynasty Metals & Mini Royal Standard Minerals Alturas Minerals Corp.
$323 $126 $52 $14
Minera Andes Inc. Mansfield Minerals Inc Klondex Pacific Comox
$316 $125 $45 $14
Greystar Resources Marathon PGM Corp. Committee Bay Resources Goldrush Resources
$316 $105 $45 $14
Slide 8
9. M&A Universe
175
150
31-Dec-2005 Reserve Ounces (millions oz)
125 Agnico-Eagle Barrick
Meridian
100
New m ont
Bem a
Gold
75 Fields
Lihir
Anglo
Harm ony
Polyus
Gold
New crest
50
Goldcorp
25
Kinross
BUBBLE SIZE DENOTES MARKET CAP
IAMGold
Randgold
0
0.0 2.0 4.0 6.0 8.0 10.0
2007E Production (millions ozs) Slide 9
10. Gold Industry M&A
Gold Industry Overview
Gold Market Valuation
M&A Transactions
Transaction Challenges
Newmont M&A Approach
Slide 10
11. Valuation Factors
Financials Growth
NAV CFPS
CF Reserves/Share
Free Cash Flow Production/Share
Quality
Option Value
Management
Leverage
Premium deposits
Reserves/Share
Margins
Production/Share
Reserve Life
Slide 11
13. Price to Cash Flow
Price to Cash Flow - Senior Producers
25.0x
Sr Cur Yr Sr 1 Yr Out Sr 2 Yr Out
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
14. Gold Industry M&A
Gold Industry Overview
Gold Market Valuation
M&A Transactions
Transaction Challenges
Newmont M&A Approach
Slide 14
19. US/Canada Deal Structure Considerations
Tender Offer Plan of Arrangement
Cash In the market for min. 40-50 days 66.7% threshold, single process
Ability to control the transaction In the market for min. 50-60 days
documentation and transaction timing ×Target controls transaction
Ability to respond fast to competing bid documentation and timing to a greater
degree
×90% threshold for compulsory acquisition
of remainder or 2nd stage “squeeze-out”
transaction (additional 45 days)
Shares In the market for min. 40-50 days 66.7% threshold, single process
Ability to control the transaction May be exempt from SEC review
documentation and transaction timing ×In the market for min. 60-70 days
Ability to respond fast to competing bid ×Target controls transaction
Tax free roll for shareholder documentation and timing to a greater
degree
×90% threshold for compulsory acquisition
of remainder or 2nd stage “squeeze-out” ×43-101 compliance required
transaction (additional 45 days) ×Fairness opinion valuing acquirer
×SEC review and 43-101 compliance
required
×Fairness opinion valuing acquiror
Slide 19
20. Gold Industry M&A
Gold Industry Overview
Gold Market Valuation
M&A Transactions
Transaction Challenges
Newmont M&A Approach
Slide 20
22. Scarcity of Large Deposits
• 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
24. Gold Price Discounted
Gold Price Discounted by
by Seniors
Intermediates
Intermediates at Senior Multiples
Source: BMO Nesbitt Burns
Slide 24
25. Life Cycle of a Project
Full Value
• Competitive High Risk • Sponsorship Opportunities
• Potentially High Value • Few Competitors and lower Risk
10
Exploration Corporate
Focus Focus
8
Relative Value
Speculative Stock
6 Ahead Of Known Value Speculators
Leave
Orphan
4 Institutional
Period
Investing
Begins
2
2-3 Years 2 Years 1 Year
1 - 2 Years Depletion
Feasibility & Development Start-Up
Discovery
Greenfields Pre-Discovery
~4 - 5 Years
Permitting
0
Years
0 5 7 10 12 13
Development Projects Mergers/Acquisitions:
Early Mover Advantage
•Strategic,
• Limited Information •Permitting Issues
•Synergistic
• Portfolio Approach •Lack of Operating/Technical Skills
•Capital Constraints
Slide 25
26. Gold Industry M&A
Gold Industry Overview
Gold Market Valuation
M&A Transaction Valuation
Transaction Challenges
Newmont Growth Strategies
Slide 26
