Mr. Tom Palmer reports

NEWMONT ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE NEWCREST

Following completion of due diligence, Newmont Corp. has entered into a binding scheme implementation deed (SID), under which Newmont will acquire 100 per cent of the issued share capital in Newcrest Mining Ltd. by way of an Australian court-approved scheme of arrangement.

"The combination of Newmont and Newcrest represents an exceptional value proposition for shareholders and other stakeholders. It creates an industry-leading portfolio with a multidecade gold and copper production profile in the world's most favourable mining jurisdictions," said Tom Palmer, president and chief executive officer of Newmont. "Following a robust due diligence process, we have identified a number of opportunities to unlock substantial value, and will apply our experience and expertise to Newcrest's complementary and exceptional portfolio of long-life, low-cost gold and copper assets. Leveraging our experience from the acquisition of Goldcorp four years ago, we are positioned to deliver an estimated $500-million in annual synergies and an estimated $2-billion in incremental cash flow from portfolio optimization opportunities, both part of our strategy to maximize value for shareholders and other stakeholders."

Mr. Palmer continued: "This transaction also increases Newmont's annual copper production -- a metal vital for the new energy economy -- and adds nearly 50 billion pounds of copper reserves and resources from Newcrest to our robust and balanced portfolio. We intend to quickly realize these opportunities to create superior value for our shareholders, work force, host communities and governments."

Newcrest's chairman, Peter Tomsett, added: "This transaction combines two of the world's leading gold producers, bringing forward significant value to Newcrest shareholders through the recognition of our outstanding growth pipeline. In addition to the ongoing benefits of merging these premier portfolios, the combined group will set a new benchmark in gold production while benefiting from a material and growing exposure to copper and a market-leading position in safety and sustainability. The Newcrest board is unanimously recommending the proposal. We are very proud of the entire Newcrest team for building a world-class metals business, which will form a key part of the combined group. We believe our shareholders and other stakeholders can look forward to an exciting and prosperous future."

Transaction rationale

The new sustainability standard

For the last eight years, Newmont has been recognized as the top gold miner in the Dow Jones Sustainability Index and regularly ranks as the most transparent company for sustainability disclosure in the S&P 500. Beyond Newcrest's well-established sustainability credentials and top-quartile industry ranking, Newmont will apply its proven sustainability practices and leadership to Newcrest's assets by:

• Bringing a clear focus on mitigating safety risks along with visible, felt leadership in the field to drive a fatality-free business;
• Building on Newmont's sustainability leadership and commitment to meaningful social engagement based on inclusion, transparency and integrity to be the partner of choice for governments, host communities, suppliers and work force;
• Remaining committed to Newmont's leading environmental stewardship practices and climate goals;
• Creating a diverse, inclusive and equitable workplace, where everyone is welcome, attracting and retaining the breadth of skills and innovation needed to continuously improve performance.

World-class portfolio

This acquisition would create a world-class portfolio of assets with the highest concentration of Tier 1 operations, primarily in favourable, low-risk mining jurisdictions. Supported by this portfolio, Newmont will be well positioned to generate strong, stable and lasting returns with best-in-class sustainability performance, well into the future.

Through the combination of high-quality operations, projects and reserves, this portfolio is expected to deliver:

• Outstanding depth and breadth of global production focused across stable mining jurisdictions:
  • Approximately eight million ounces of total combined annual gold production upon closing the transaction, with more than five million gold ounces, or two-thirds of total gold production, from 10 large, long-life, low-cost, Tier 1 assets;
  • Combined annual copper production of approximately 350 million pounds from Australia and Canada;
• An extensive portfolio of greenfield and brownfield growth options from the industry's largest reserve and resource base:
  • 96 million ounces of gold reserves declared by Newmont and 52 million ounces declared by Newcrest, along with 111 million and 68 million ounces of gold resources, respectively;
  • Significant majority of combined entity's gold reserves will be located in the Americas and Australia;
  • Value-generating projects across some of the world's most prospective regions, including Canada's Golden Triangle;
• Meaningful increase in copper reserves, a critical metal in facilitating the transition to a new energy economy;
• Maintaining a disciplined approach to mine planning and project development at reserve gold pricing, creating a resilient business to maximize long-term returns.

Delivering synergies

The combined business would be immediately supported by Newmont's scalable, integrated operating model with a deep bench of experienced leaders, subject matter experts, and existing regional teams in Australia and Canada. Building on the experience gained following the acquisition of Goldcorp, Newmont has identified the opportunity for substantial synergies:

• $500-million of total annual pretax synergies anticipated to be achieved within the first 24 months following the completion of the transaction:
  • Approximately $100-million of pretax general and administrative synergies driven by Newmont's scalable, integrated operating model with existing regional teams in Australia and Canada;
  • Approximately $200-million of supply chain synergies from best-in-class pricing and existing strong partnerships with key suppliers, smelters and equipment manufacturers through unprecedented economies of scale;
  • At least $200-million of benefits from Newmont's proven full-potential continuous improvement program, which improves costs and productivity through the rapid replication of leading processes and advanced technology.

Further value creation opportunities are anticipated as the Newcrest portfolio is fully integrated into Newmont, bringing together the industry's best talent and processes across two key mining jurisdictions, including, among other things, the benefits from the experience of Newcrest's world-class block caving team.

Australia

The transaction brings together two of Australia's largest gold producers and would reinforce Newmont's long-standing commitment to safe, profitable and responsible gold and copper production in the country for decades to come.

Newmont will leverage its existing regional operating model in Australia and, following the transaction, will combine and optimize both companies' leaders, subject matter experts, supply chains and regional infrastructure to drive best-in-class performance.

Newmont intends to apply for a foreign exempt listing on the Australian Securities Exchange and establish clearing house electronic subregister system depositary interests (CDIs) on the Australian Securities Exchange. Newcrest shareholders may elect to receive CDIs representing a unit of beneficial ownership in Newmont common stock based on their country of residence.

Papua New Guinea

Upon closing of the transaction, Newmont will establish a regional presence and in-country offices in Papua New Guinea, committed to building and maintaining strong, pro-active and mutually beneficial relationships with host governments and local communities while supporting safe and profitable operations.

Canada

Once complete, the transaction will solidify Newmont's position in Canada through the combination of operating mines and development projects, creating a Tier 1 district in British Columbia's highly prospective Golden Triangle.

The combination will also leverage Newmont's existing regional operating model in North America to combine and optimize both company's leaders, subject matter experts, supply chains and regional infrastructure to drive best-in-class performance.

Looking ahead, the company's expanded footprint in Canada, together with shared ore body experience and technical expertise, could unlock gold and copper opportunities from the combined organic project pipeline, including the key projects Galore Creek and Saddle North.

Newmont will maintain its current listing on the Toronto Stock Exchange following closing of the transaction.

Driving capital allocation

Newmont remains committed to its capital allocation strategy, which starts with maintaining an investment-grade balance sheet with strength and flexibility. The combined company's balance sheet will be supported by an even stronger, lower-cost, diversified portfolio focused in low-risk mining jurisdictions. With the sector's largest reserve and resource base, the combined business will be in a very strong position to advance the most value-accretive development opportunities and sustainably improve overall shareholder returns.

The transaction is highly accretive to Newmont shareholders which is further improved when anticipated synergies are fully realized within the first 24 months of closing. Additionally, Newmont intends to enhance cash flow by at least $2-billion in the first two years after closing through portfolio optimization.

Newmont will remain committed to maintaining its industry-leading dividend framework with a robust platform to drive leading returns throughout the price cycle.

• $1 per share at reserve pricing assumption of $1,400 per ounce;
• Variable component is calibrated in gold price increments of $300 per ounce;
• Variable component is assessed annually in alignment with the business planning cycle, considering the current macroeconomic environment and the current level of reinvestment in the business;
• Supported by strong and flexible investment-grade balance sheet;
• Dividend payouts are reviewed and approved quarterly by Newmont's board of directors.

Transaction summary and close timeline:

• Under the terms of the scheme, Newmont will acquire all outstanding Newcrest shares, and Newcrest shareholders will receive 0.400 Newmont share (or 0.400 Newmont CDI) for each Newcrest share held.
• Newcrest will also finance and pay to its shareholders a franked special dividend of up to $1.10 (U.S.) per Newcrest share, conditional on the scheme becoming effective.
• Under the terms of the scheme and based on current market prices, the implied equity value of Newcrest is $26.2-billion (Australian), including the dividend, with an enterprise value of $28.8-billion (Australian).
• Upon implementation of the scheme, Newmont and Newcrest shareholders will own approximately 69 per cent and 31 per cent of the combined entity, respectively.
• The scheme is subject to customary conditions, including:
  • Shareholder approvals from both companies:
    • Newcrest: more than 50 per cent of shareholders voting and at least 75 per cent of votes cast.
    • Newmont: more than 50 per cent of votes cast.
  • The independent expert concluding that the scheme is in the best interests of Newcrest shareholders;
  • Relevant regulatory approvals;
  • No material adverse event or prescribed occurrences in respect of either company.
• Newcrest and Newmont are each subject to customary exclusivity restrictions, including no-shop, no-talk and no-diligence restrictions, subject to certain customary exceptions.
• The SID contemplates a break/termination fee (payable by Newcrest) and a reverse break/termination fee (payable by Newmont) in certain circumstances, with the quantum of each determined by reference to 1 per cent of the equity value of the corresponding party (with a discounted amount of the reverse break fee payable, only to reimburse Newcrest for its third party costs, if Newmont stockholder approval is not ultimately obtained).
• Newmont intends to apply for a foreign exempt listing and establish CDIs on the ASX with respect to Newmont shares issued to Newcrest shareholders.
• The transaction is expected to close in the fourth quarter of 2023.

Governance

Gregory Boyce will continue as chair of Newmont's board of directors, and the board will select two directors from Newcrest to join the Newmont board. Mr. Palmer will continue as president and chief executive officer of Newmont, and will lead the combined company with a focus on safely and responsibly leading the combined work force, integrating the acquired assets and delivering on shareholder commitments.

Analyst and investor webcast and conference call

Newmont -- business update

May 15, 2023, at 8 a.m. Eastern Daylight Time (10 p.m. Australian Eastern Standard Time)

Conference call details

Dial-in number:  833-470-1428

International dial-in number:  404-975-4839

Dial-in access code:  984641

Conference name:  Newmont

Replay number:  866-813-9403

Replay access code:  375213

Webcast details

Title:  Newmont -- business update

The webcast materials will be available before the conference call in the investor relations section of the company's website. Additionally, the conference call will be archived for a limited time on the company's website.

Advisers and counsel

In connection with the transaction, Newmont has engaged BofA Securities, Centerview Partners LLC, Lazard and BMO Capital Markets as its financial advisers, and King & Wood Mallesons and White & Case LLP as its legal advisers. Mackenzie Partners Inc. will act as proxy solicitation agent.

About Newmont Corp.

Newmont is the world's leading gold company and a producer of copper, silver, zinc and lead. The company's world-class portfolio of assets, prospects and talent is anchored 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 principled environmental, social and governance practices. The company is an industry leader in value creation, supported by robust safety standards, superior execution and technical expertise. Newmont was founded in 1921 and has been publicly traded since 1925.

At Newmont, its purpose is to create value and improve lives through sustainable and responsible mining.

We seek Safe Harbor.