1. Real Client Managed Portfolio April 4, 2013 Dan Ballantine Heziyou Xu Lingtao Zhou

2.  Introduction  Macroeconomic Outlook  Industry Overview  Company Overview  Financial Analysis  Valuation  Recommendation

3.  One of the world’s largest gold producers  Only gold company included in the S&P 500 Index and Fortune 500  Founded in 1921, publicly traded since 1925  Headquartered in Greenwood Village, Colorado  40,000 employees and contractors worldwide Source: Newmont website

4.  Precious metals industry is heavily dependent on metal spot prices  Precious metals are often used as a hedge against inflation and crisis  Very relevant to concerns about currency strength around the globe  Strong performance of gold and copper over the past five years primary driver of the drilling market is energy consumption

5. Source: KitCo

7.  Bullish leanings on gold and copper due to increasing demand and future implications of current monetary policies  Low interest rate environment may lead to considerable inflation in the future  Weaker US Dollar leads to increased demand for gold and precious metals  Future inflation could increase gold prices

8. Rivalry: HIGH Buyers: High Substitutes: LOW Suppliers: MODERATE New Entrants: LOW

9.  Bargaining Power of Suppliers: HIGH ◦ Complex mining process ◦ Large number of suppliers ◦ Governmental and environmental regulations  Bargaining Power of Buyers: HIGH ◦ Commodity products ◦ Little control over product pricing  Threat of New Entrants: LOW ◦ Capital intensive ◦ Limited mine resources ◦ Mining requires considerable specific knowledge

10.  Threat of Substitutes: LOW ◦ Precious metals are not imitable ◦ Only substitute is paper currency  Rivalry among Competitors: HIGH ◦ Number of firms in the industry ◦ Significant exit barriers ◦ Complex operations

11.  Gold producer with significant operations in United States, Australia, Peru, Indonesia, Ghana, New Zealand and Mexico  Considerable reserves ◦ Gold: 99.2 million ounces ◦ Copper: 9.51 billion pounds  24 mines in five continents ◦ North America: 9 mines, 37.7 million gold ounces ◦ South America: 3 mines, 12.6 million gold ounces ◦ Asia/Pacific: 8 mines, 29.9 million gold ounces ◦ Africa: 4 mines, 19.0 million gold ounces

12. Region201220112010 United States29%26%22% Australia/New Zealand29%28%24% Peru22%19% Ghana9%8%7% Indonesia7%15%26% Mexico4% 2% Source: Newmont 10-K

13.  First gold-linked dividend in the industry  Leading safety, environmental compatibility and sustainability in the industry Source: Newmont website

14.  Refined gold and copper  Major end product: doré bars Source: The Telegram

15. Exposure to gold and copper spot prices Difficulty of operations in remote locations Government and environmental regulations Relations with local communities of mines Labor relation issues

16. Strengths Weaknesses Leading sustainability in the industry New strategy Diversified mine reserves Weak operating cash flow Track record of management team Past misallocation of capital Rising production costs Dividend commitment OpportunitiesThreats Quantitative easing macroeconomic environment Additional value created by spinning out and restructuring Potential future inflation Global currency strength issues Developing mining companies outside US under relatively loose code and law restrictions; Recently volatile gold prices Stronger global currencies

17.  More selective regarding capital investments  Invest capital efficiently to maintain current mine projects  Increase profitability through cost reduction and more efficient operations  Improve relations with local stakeholders of its mines

18.  Stable gold and copper production in 2013  Rising production costs in 2013  Increase operating cash flows in 2014 and 2015 due to significant cost reductions  Reduced exploration, research & development, and capital expenditures by 15-20% in 2013  Expect gold and copper prices to increase

19.  April 3, 2013: NEM hits a new 52-week low  March 1, 2013: new CEO, Gary Goldberg, formerly the COO  October 2012: Labor and government issues at Batu Hijau mine in Indonesia  April 2012: Protests over water pollution at Conga mine in Peru  February 2012: $1.6 billion write-down of Hope Bay project Source: Newmont Website

20. Source: Newmont 10-K

21. Source: Capital IQ, Yahoo Finance MetricValue Current Stock Price $38.47 Trailing P/E 10.54 Forward P/E 9.5 Dividend Yield 4.42% Market Cap $19.1 B

22. Source: Newmont website

25. CompanyRevenueMarket CapEBIT MarginNet Margin Agnico-Eagle Mines1,929.9 6,977.1 26.3%16.2% Barrick Gold14,762.1 29,060.5 -5.6%-4.6% Freeport-McMoran21,853.4 30,752.3 32.0%16.9% Goldcorp5,958.0 27,153.3 40.9%32.1% Kinross Gold4,442.4 8,979.4 29.3%-58.1% Yamana Gold2,830.2 11,372.2 37.5%18.9% Newmont Mining9,868.0 19,109.6 34.1%18.3% Source: Capital IQ

26. Source: Yahoo Finance

27. Source: Capital IQ

32.  Strengths: ◦ Good fit in portfolio based on GICS map ◦ Positive long-term macroeconomic outlook ◦ Dividend yield ◦ Comparable company valuation  Concerns: ◦ Lack of strong management team ◦ Previous misallocation of capital ◦ Developing project issues ◦ Variation in historical returns ◦ Rising production costs ◦ Sensitivity to gold prices

33.  Valuation Summary: ◦ Current Stock Price: $38.47/share ◦ Comparable Companies Valuation: $51.98/share ◦ DCF Valuation: $34.37/share  Recommendation: Watch List