Condition Based

Asset Management

Program

MINExpo 2008

Background

2

Newmont One Nevada Goals (2006)

• Overall Goal - reduce One Nevada Costs applicable to sales to $300/ounce by Jan 2008

– Offset higher prices in labor, diesel, cyanide, u/g contract services costs

– YTD 2006 $425 YTD 2005 $327

• Maintenance is a piece of this pie

– This project represents approx $2.00 / ounce

• Make this a team effort gaining best from:

– Newmont (One Nevada, Batu Hijau, Peru experience)

– Dingo

– Cashman / Caterpillar

– ConocoPhillips

– Other Newmont OEMS

• Desired relationship:

– Sustainable change, owned by Newmont

– Accountability for results on both sides

– Win-win

– Long term

3

4

Previous Experience

0 5,000 10,000 15,000 20,000 25,000

785 Engine

785

Transmission

789 Engine

Pre 2002 (LT,TC only)

Post 2002 (LT,TC Only)

2004-2006 (All sites)

Hours

Program Scope

5

Scope - Process

•Identify opportunity

•Quantify Financial Return

•Solution

Business Case

•Focus

•Change Management

•Deliverables

•Tools

•Processes

Implement

•WeeklyMeetings

•Measurement

•Condition Intelligence

•Periodic Coaching

Sustained performance

6

6-12 Months Ongoing1 Month

Scope – Newmont Operations

Surface

Twin Creeks

Gold Quarry

Phoenix

Underground

Leevilee

Deep Post

Process

Twin Creeks Mill

Phoenix Mill

SAL

Mill 5

Mill 6

Scope - Programs

Breakdown Avoidance

• Condition Intelligence

• KPI Measurement

• Weekly Meeting

• Troubleshooting Guides

• Sample Point ID’s

Component Life Extension

• Monthly evaluation of all

components:

– approaching expected life

– being “extended” past expected life

and in critical condition.

• Incorporates condition monitoring

data, performance tests and

financial data.

• Monthly on-site component

evaluation review with equipment

group “owners”.

8

Results so far…

9

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000D

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Oct-

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Actual Savings Target Savings Project Costs

Program Results

Cash flow breakeven

in 3 months

Total project Payback in

July 2007

Total project cost $3.5MM

10

Total Benefits to June 2008

$15,111,271

11

Projects/ Sites 12/53 7/34 4/16 1/3 1/5 1/2 1/1

Return on $1 $3.07 $3.70 $5.20 $2.10 $5.00 $4.32 $3.07

Focus

All typesComponent and

lube extension

Breakdown

avoidance

Component

extension

Component and

lube extension,

Breakdown

Avoidance

Component and

lube extension,

Breakdown

Avoidance

Component

extension,

Breakdown

Avoidance

Months 237 132 84 39 36 36 36

Program Return on Investment

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Retu

rn o

n e

ach $

investe

d

General Foreman comments

12

“The program forces communication between the planners and the shop floor – they track down shop floor technicians to get feedback on actions taken as a result of the CI recommendations and work order generated.

Things are going well with the CBAM program; we have made great improvement from the start.”

Ken Andress (Newmont East)

“This will allow our guys to see what is really going on with their components. They get expert condition reports back that will give them specific instructions of what is wrong and how to fix it; vs. the Fax we get now.”

Bilbo Bessert (Process Plants)

Observations

13

How is CBAM different?

14

CBAM is complete system which delivers results, not technology.

Condition Intelligence (find) + Action Tracking (act) produce results,

measured monthly accounting of value of our service

•Find Problems

•Technology

Focus

•Do Something

about them

•Results Focus

Condition

Monitoring

Focus

CBAM

Focus

Key Learning

• CBAM is an ongoing series of Daily, Weekly, Monthly, Quarterly and Annual

activities

• In today’s dynamic environment, Mining companies struggle to maintain the

disciplined routine required to ensure benefits are derived

• Three long term customers have decided that Dingo provides a cost effective

way to ensure the benefits of CBAM, despite strong initial desire to bring totally

in-house

• Newmont experience has been similar.

• Site based planners have a different career path and experience to Dingo

project managers

• Dingo has shifted offering from Project to System in response to these trends

15

The Future

16

Global Labor Shortage Trend

•CBAM enables current workforce to focus on critical activities.

•CBAM enables savings from IP, not in house site-based people

One Nevada - One Database

1818

Group Trending

• All on one database

• Group Trend for 33 Newmont

Nevada 793D Engines

• A powerful way to determine if

results are abnormal for the

component

• Scattergram allows easy, accurate

alert limit settings

Global System

19