#1NEVADA Mining Association 2013 MINING INDUSTRY ISSUES AND OPPORTUNITIES#2AL WHAT IS THE OUTLOOK FOR THE MINING INDUSTRY INTERNATIONALLY? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#3Investment Attractiveness Index 2017 Rank 2016 2017 Index Location Rank Score Score 1 Finland 5 89.0 2 Saskatchewan (CA) 1 87.2 3 NEVADA (US) 4 85.5 4 Rep. of Ireland 9 84.4 5 Western Australia 3 83.6 NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#4Policy Perception Index 2017 2016 2017 Index Location Rank Rank Score Score 1 Rep. of Ireland 1 100.0 2 Finland 4 98.8 3 Saskatchewan (CA) 2 91.8 4 Sweden 3 91.1 5 NEVADA (US) 5 90.5 NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#5Best Practices Mineral Potential Index 2017 2016 2017 Index Location Rank Rank Score Score 1 Indonesia 48 84.8 2 Saskatchewan (CA) 3 84.1 3 Queensland (AU) 4 83.7 4 Western Australia 1 83.6 5 Alaska (US) 15 83.3 8 NEVADA (US) 8 82.1 A NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#6Regional Median Investment Attractiveness 74.3 70.1 70.5 67.2 63.9 60.7 58.6 56.4 51.3 Latin American and Caribbean NEVADA Mining Association Africa Argentina Asia Oceania Europe United States Australia Canada MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#7Regional Median Investment Attractiveness Growth -39.4% -22.6% -8.9% 12.3% 10.1% 7.0% 2.6% 2.7% 4.0% Argentina Asia Oceania Europe Latin American and Caribbean Canada United States Australia Africa NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Fraser Institute Survey of Mining Companies (2016 vs. 2017) and Applied Analysis APPLIED ANALYSIS#8Regional Median Policy Perception Index 61.4 54.2 55.7 56.9 47.3 82.6 82.8 83.4 75.7 Oceania Asia Latin American and Caribbean Africa Argentina Australia United States Canada Europe NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#9Regional Median Policy Perception Index Growth -30.9% -18.0% -2.4% 24.3% 15.5% 7.7% 4.9% 5.3% 3.4% Asia Argentina Europe United States Canada Latin American and Caribbean Australia Africa Oceania NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: Fraser Institute Survey of Mining Companies (2016 vs. 2017) and Applied Analysis APPLIED ANALYSIS#10AL WHAT IS THE OUTLOOK FOR THE MINING INDUSTRY NATIONALLY? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#11National Economy 2018 Annual Survey Refused/No Wrong Direction 17.9% Answer 7.1% Right Direction 75.0% NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association "Right Direction" Prior Year Comparison 80.9% 75.0% 2017 2018 Source: NVMA 2018 Survey APPLIED ANALYSIS#12Investment Attractiveness Index United States 49.9 Median: 70.1 85.5 80.7 81.1 78.2 75.7 68.9 70.1 71.4 65.9 66.4 56.8 58.4 Washington NEVADA Mining Association California Wyoming Montana New Mexico Minnesota Idaho Colorado Michigan MINING INDUSTRY ISSUES AND OPPORTUNITIES Utah Alaska Arizona Nevada Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#13-22.5% Investment Attractiveness Index Growth United States Wyoming California NEVADA Mining Association -16.2% -2.3% -4.5% -3.9% -7.4% -7.1% -11.5% -13.8% Idaho New Mexico MINING INDUSTRY ISSUES AND OPPORTUNITIES Montana Minnesota Arizona Utah Nevada Alaska 2.7% 3.7% 1.7% 0.6% Michigan Washington Colorado Source: Fraser Institute Survey of Mining Companies (2016 vs 2017) and Applied Analysis APPLIED ANALYSIS#14Policy Perception Index United States 59.6 Median: 82.6 82.6 84.5 85.3 86.7 87.6 89.2 90.5 74.9 76.8 76.9 69.7 66.1 California NEVADA Mining Association Montana Washington Colorado MINING INDUSTRY ISSUES AND OPPORTUNITIES Minnesota Alaska New Mexico Idaho Arizona Utah Wyoming Michigan Nevada Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#15Policy Perception Index Growth United States Alaska -10.0% NEVADA Mining Association Nevada -7.3% -7.3% -7.2% -7.0% Wyoming Montana Idaho 4.5% 2.5% 0.9% -2.0% -1.5% -1.4% -5.9% Arizona Minnesota Utah Michigan MINING INDUSTRY ISSUES AND OPPORTUNITIES New Mexico Colorado California Washington Source: Fraser Institute Survey of Mining Companies (2016 vs 2017) and Applied Analysis APPLIED ANALYSIS 10.4%#16United States Best Practices Mineral Potential Index 36.7 38.9 Median: 65.8 82.1 83.3 78.3 72.5 69.1 65.8 66.7 63.6 60.5 55.0 55.6 Washington NEVADA Mining Association Wyoming California New Mexico Idaho Minnesota Montana Michigan Colorado MINING INDUSTRY ISSUES AND OPPORTUNITIES Utah Arizona Nevada Alaska Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#17Best Practices Mineral Potential Growth United States -37.8% -26.7% Wyoming California NEVADA Mining Association -3.4% -5.7% -5.7% -7.5% -10.9% -21.1% -19.3% New Mexico Idaho MINING INDUSTRY ISSUES AND OPPORTUNITIES Minnesota Montana Utah Washington Arizona Nevada 8.5% 4.5% 4.8% 1.7% Colorado Michigan Alaska Source: Fraser Institute Survey of Mining Companies (2016 vs 2017) and Applied Analysis APPLIED ANALYSIS#18AL WHAT IS THE OUTLOOK FOR THE MINING INDUSTRY IN NEVADA? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#19Nevada's Economy 2018 Annual Survey NEVADA Mining Association Right Direction 92.9% Wrong Direction 7.1% MINING INDUSTRY ISSUES AND OPPORTUNITIES "Right Direction" Prior Year Comparison 95.7% 92.9% 2017 2018 Source: NVMA 2018 Survey APPLIED ANALYSIS#20Business Environment in Nevada Past 12 Months 25.0% 42.9% 32.1% 0.0% Much Better Somewhat Better About The Same Somewhat Worse NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association 0.0% Much Worse Source: NVMA 2018 Survey APPLIED ANALYSIS#21State Business Tax Climate Nevada has the 5th Best Business Tax Climate in the U.S. Best Tax Climate Worst Tax Climate NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Tax Foundation APPLIED ANALYSIS#22Business Environment in Nevada Next 12 Months 17.9% 46.4% 35.7% 0.0% Much Better Somewhat Better About The Same Somewhat Worse NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association 0.0% Much Worse Source: NVMA 2018 Survey APPLIED ANALYSIS#23Areas in Nevada that Mining Companies Encourage the Most Investments Security Availability of Labor/Skills Uncertainty Concerning the Administration, Interpretation and Enforcement of Existing Regulations Political Stability Quality of Infrastructure NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association 50.9% 49.1% 45.5% 44.6% 64.2% Source: Fraser Institute Survey of Mining Companies (2017) and Applied Analysis APPLIED ANALYSIS#24AL ARE COMMODITY PRICES GOING TO INCREASE? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#25Commodity Price Next 12 Months COMMODITY INCREASE STAY ABOUT THE SAME DECREASE Copper 70% 25% 5% Gold 45% 50% 5% Silver 45% 50% 5% NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: NVMA 2018 Survey APPLIED ANALYSIS#26Price Change Over the Past Year OVER THE PAST YEAR PROJECTED IN NEXT 12 MONTHS COMMODITY AUGUST 2018 AUGUST 2017 INCREASE DECREASE Copper (per Pound) $2.75 $3.08 70% 5% Gold (per Troy Oz.) $1,197 $1,312 45% 5% Silver (per Troy Oz.) $14.67 $17.88 45% 5% NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: London Metal Exchange; London Bullion Market Association; NVMA 2018 Survey APPLIED ANALYSIS#27Price of Copper USD per Pound $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 Peak to Present: -$1.17 (-29.9%) www '15 '16 '17 '12 NEVADA Mining Association '13 '14 MINING INDUSTRY ISSUES AND OPPORTUNITIES $2.75 '18 Source: London Metal Exchange APPLIED ANALYSIS#28Price of Copper Next 12 Months $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 '12 '13 NEVADA Mining Association '14 ww '15 '16 '17 MINING INDUSTRY ISSUES AND OPPORTUNITIES '18 '19 -70% 25% 5% Source: London Metal Exchange; NVMA 2018 Survey APPLIED ANALYSIS#29Price of Gold USD per Troy Ounce $2,000 $1,800 $1,600 Peak to Present: $1,400 -$698 (-36.8%) $1,200 $1,000 $800 $600 $400 $200 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES '17 '18 $1,197 Source: London Bullion Market Association APPLIED ANALYSIS#30Price of Gold Next 12 Months $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES '17 '18 '19 45% 50% 5% Source: London Bullion Market Association; NVMA 2018 Survey APPLIED ANALYSIS#31Price of Silver USD per Troy Ounce $60 $50 $40 $30 $20 Peak to Present: -$34.04 (-69.9%) $10 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES $14.67 '18 '17 Source: London Bullion Market Association APPLIED ANALYSIS#32Price of Silver Next 12 Months $60 $50 $40 $30 $20 $10 $0 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES '17 '18 '19 45% 50% 5% Source: London Bullion Market Association; NVMA 2018 Survey APPLIED ANALYSIS#33AL HOW STABLE IS MINING PRODUCTION IN NEVADA? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#34Nevada Mining Operations 104 Active Operations In 2017 Au G BG Au L B Barite Bn Bentonite Li Lithium Mg Magnesium Au Bn C D G Au Do G Gy L B Fe C Clay Cu Copper Mo Molybdenum DGL Pe Au Cu Au PS □ Diatomite □ Opals P Perlite Do Dolomite Pe Petroleum C G G Au G Geothermal S Salt Gy L C Au Mg | Pe Au Gold Si Silica P BCD Au Li Gy Gypsum Ag Silver Fe Iron Ore T Turquoise Gy L Si L Limestone NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Nevada Department of Taxation APPLIED ANALYSIS#35Nevada Mining Operations $8.1B Gross Proceeds of Minerals in 2017 Au G BG Au L B Barite Bn Bentonite Li Lithium Mg Magnesium Au Bn C D G Au Do G Gy L B Fe C Clay Cu Copper Mo Molybdenum DGL Pe Au Cu Au PS □ Diatomite □ Opals P Perlite Do Dolomite Pe Petroleum C G G Au G Geothermal S Salt Gy L C Au Mg | Pe Au Gold Si Silica P BCD Au Li Gy Gypsum Ag Silver Fe Iron Ore T Turquoise Gy L Si L Limestone NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Nevada Department of Taxation APPLIED ANALYSIS#36Nevada Mining Operations +9.1% Annual Gross Proceeds Growth From 2016 to 2017 NEVADA Mining Association Au G BG Au L B Barite Bn Bentonite Li Lithium Mg Magnesium Au Bn C D G Au Do G Gy L B Fe C Clay Cu Copper Mo Molybdenum DGL Pe Au Cu Au PS □ Diatomite □ Opals P Perlite Do Dolomite Pe Petroleum C G G Au G Geothermal S Salt Gy L C Au Mg | Pe Au Gold Si Silica P BCD Au Li Gy Gypsum Ag Silver Fe Iron Ore T Turquoise Gy L Si L Limestone MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Nevada Department of Taxation APPLIED ANALYSIS#37Education Transportation/Warehousing 5.3% 4.9% Health Care/Social Assistance 4.6% Admin/Waste Management Mining Government Management of Companies Finance/Insurance Other 3.5% 3.1% i 3.0% 2.8% Nondurable Goods 2.8% 2.8% 2.7% Information 2.7% Retail Trade 2.1% Wholesale Trade 2.0% Accommodation/Food Arts/Entertainment/Recreation Prof/Scientific/Tech Services Real Estate/Rental/Leasing Agriculture Durable Goods 1.5% 1.4% 1.4% 1.2% 1.0% 0.2% Utilities -0.9% Construction -4.7% Nevada GDP Growth by Sector 2007-2017 Compound Annual Growth Rate All Industries Total: +1.7% NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: United States Bureau of Economic Analysis APPLIED ANALYSIS#38Mineral Production Past 12 Months NEVADA Mining Association 22% 11% Increased 67% Decreased Remained About the Same Source: NVMA 2018 Survey MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#39Mining 18.1% i Durable Goods 13.6% Construction 9.4% Nevada GDP Growth by Sector Education Wholesale Trade Admin/Waste Management Real Estate/Rental/Leasing Health Care/Social Assistance Management of Companies Government Other 2016-2017 Compound Annual Transportation/Warehousing Growth Rate All Industries Total: +5.5% Prof/Scientific/Tech Services Finance/Insurance Retail Trade Nondurable Goods Accommodation/Food 8.8% 8.5% 7.2% 6.6% 6.0% 5.9% 5.8% 5.6% 5.2% 4.6% 4.5% 4.2% 3.6% 2.4% Information 2.3% Agriculture 0.8% Utilities -0.4% Arts/Entertainment/Recreation -7.2% NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: United States Bureau of Economic Analysis APPLIED ANALYSIS#40Mineral Production Next 12 Months NEVADA Mining Association 22% 11% Increase 67% Decrease Remain About the Same MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: NVMA 2018 Survey APPLIED ANALYSIS#41Mining Gross Domestic Product (In Billions) Nevada $5.3 $4.1 $4.2 $3.5 $6.7 $6.8 $5.2 $4.8 $4.1 $4.0 $3.5 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Source: United States Bureau of Economic Analysis NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS Mining Association#42Mining GDP Share of All Industry Total Nevada 3.5% 3.2% 2.6% 4.4% 5.4% 5.4% 4.1% 3.1% 3.0% 2.7% 2.4% '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Source: United States Bureau of Economic Analysis NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS Mining Association#43Business Revenues or Sales Past 12 Months 46.4% Increased 25.0% 21.4% Decreased NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Remained About the Same 7.1% Refused/No Answer Source: NVMA 2018 Survey APPLIED ANALYSIS#44Business Revenues or Sales Next 12 Months 53.6% 42.9% Increase 0.0% Decrease Stay About the Same NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association 3.6% Refused/No Answer Source: NVMA 2018 Survey APPLIED ANALYSIS#45AL WHAT IS THE OUTLOOK FOR MINING EMPLOYMENT IN NEVADA? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#46Nevada Employment Annual Employment Millions Year-over-Year Growth 1.4 0.8 0.6 0.4 0.0 6120 % OT NO 8% 6% 4% 2% 0% الابر -2% -4% -6% -8% -10% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '00 '02 '02 '04 '06 '08 '10 '12 '14 '16 '18 YTD YTD NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: U.S. Bureau of Labor Statistics APPLIED ANALYSIS#47Employment Growth by Sector Nevada | Prior Year vs. Present Construction Trade, Transportation & Utilities Manufacturing Education & Health Services Government Professional & Business Services 7,108 6,617 6,142 6,025 5,667 2,917 2,575 1.725 1,325 408 Net Growth +40,517 Information 8 Leisure & Hospitality Financial Activities Other Services Mining & Logging NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: U.S. Bureau of Labor Statistics APPLIED ANALYSIS#48Employment Growth by Sector Nevada | Prior Year vs. Present Manufacturing Construction Education & Health Services Government Other Services Mining & Logging Financial Activities Trade, Transportation & Utilities. Professional & Business Services 13.5% 8.8% 4.6% 3.6% 3.2% 2.9% 2.7% 2.7% 1.6% 0.7% Information 0.1% Leisure & Hospitality Net Growth Rate +3.1% NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: U.S. Bureau of Labor Statistics APPLIED ANALYSIS#49Nevada Mining Employment Annual Employment Year-over-Year Growth 18,000 20% 16,000 15% 14,000 10% 12,000 10,000 5% 8,000 90 6,000 -5% TT" 4,000 2,000 -10% 0 -15% '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 YTD NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association YTD Source: U.S. Bureau of Labor Statistics APPLIED ANALYSIS#50Mining Employment Share by Age 21.4% 55 Years and Over 45 to 54 years 23.9% 55 to 64 years 19.9% 65 years and over 1.5% 16 to 19 years 0.6% 20 to 24 years 5.6% 35 to 44 years 23.0% 25 to 34 years 25.7% NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: NVMA 2018 Survey APPLIED ANALYSIS#51NEVADA Mining Association AL HOW MUCH DOES THE MINING INDUSTRY PAY IN TAXES TO NEVADA? MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#52RANK TAXPAYER NAME TOTAL (IN MILLIONS) 1 MGM Resorts International $3,730 2 NV Energy (1,4) $2,515 3 Caesars Entertainment Corporation $2,052 Ten Highest Assessed 4 Las Vegas Sands Corporation $963 5 Wynn Resorts Limited $935 6 Taxpayers 2017-2018 NEWMONT MINING (3,4) $837 7 Station Casinos Incorporated $739 8 BARRICK MINING (2.4) $542 8 Boyd Gaming Corporation $485 10 Ruby Pipeline LLC $458 TOTAL $13,255 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Nevada Department of Taxation APPLIED ANALYSIS#53Roll Assessed Value by Class 2016-2017 Other 96.9% NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining- Related 3.1% Source: Nevada Department of Taxation APPLIED ANALYSIS#54Net Proceeds of Minerals Taxes Paid By Nevada Mining Industry, Including Royalty Recipients Millions $300 $250 $200 $255.6 $216.7 $150 $97.6 $91.8 $100 $75.7 $62.6 $50 $163.0 $171.0 $155.1 $136.6 $103.2 $101.6 $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES 2016 2017 Source: Nevada Department of Taxation APPLIED ANALYSIS#55Share of Net Proceeds Tax Generated by Specific Minerals (2017) Geothermal Gypsum $155 M Total Net Proceeds Tax Generated NEVADA Mining Association Gold/Silver 93.3% 1.2% 0.1% Oil 0.2% Other 2.3% MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Nevada Department of Taxation (Operators and Royalties Combined) APPLIED ANALYSIS#56Share of Net Proceeds Tax Generated by Specific Minerals (2017) $145 M Net Proceeds Tax Generated by Gold/Silver NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Gold/Silver 93.3% Source: Nevada Department of Taxation (Operators and Royalties Combined) APPLIED ANALYSIS#57Lander Humboldt Elko $418.10 $1,319.35 $350.04 $291.90 $244.42 $191.74 Net Proceeds Tax Generated by County 2017 | In Millions Eureka NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Nye $41.85 White Pine $27.60 Pershing $20.89 Esmeralda Churchill $11.09 Clark $3.65 Mineral $3.00 Lyon $0.93 Storey Washoe $0.91 Douglas $0.00 $0.00 Lincoln Carson City Source: Nevada Department of Taxation APPLIED ANALYSIS $0.00#58Lander Humboldt Elko $1,319.35 $418.10 Net Proceeds Tax Generated by County 2017 | In Millions $350.04 NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association 71.4% Of Total Net Proceeds Tax Generated by Top 3 Counties Source: Nevada Department of Taxation APPLIED ANALYSIS#59Total Estimated Major Taxes Paid by Nevada Mining $500 ■Net Proceeds of Minerals and Royalties ■Modified Business Tax Property Tax Sales/Use Tax Millions $431.4 $450 $400 $388.1 $349.5 $350 $314.0 $312.4 $300 $255.6 $292.3 $216.7 $250 $171.0 $245.8 $235.5 $223.6 $203.7 $163.0 $136.6 $155.1 $200 $103.2 $91.8 $101.6 $150 $97.6 $100 $50 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: NVMA Member Survey; Natural Resource Industry Institute (2008 - 2010), NV Dept of Taxation and Industry Surveys Note: Historical figures may be adjusted to reflect the latest available information. APPLIED ANALYSIS#60AL WHAT ARE THE IMPACTS OF MINING IN NEVADA? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#61Employment Impacts for Nevada Mining Industry Operations (2017) 11,200 10,285 11,492 32,976 Total Jobs Supported by Nevada Mining Industry Operations Direct NEVADA Mining Association Indirect Induced MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis APPLIED ANALYSIS#62Employment Impacts for Nevada Mining Industry Operations 29,188 32,234 34,495 30,162 29,754 29,350 32,976 32,976 Total Jobs Supported by Nevada Mining Industry Operations 2010 2011 2012 2014 2015 2016 2017 Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#63Wage/Salary Impacts for Nevada Mining Industry Operations (2017) $1.3 B $0.8 B $0.5 B $2.6B Total Labor Income Supported by Nevada Mining Industry Operations Direct NEVADA Mining Association Indirect Induced MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis APPLIED ANALYSIS#64Wage/Salary Impacts for Nevada Mining Industry Operations $2.3 B $2.6 B $2.8 B $2.6 B $2.4 B $2.4 B $2.4 B $2.6B Total Labor Income Supported by Nevada Mining Industry Operations 2010 2011 2012 2014 2015 2016 2017 Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS Mining Association#65Value-Added Impacts for Nevada Mining Industry Operations (2017) $3.6 B $1.4 B $1.0 B $6.0B Total GDP Supported by Nevada Mining Industry Operations Direct NEVADA Mining Association Indirect Induced MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis APPLIED ANALYSIS#66Value-Added Impacts for Nevada Mining Industry Operations $7.3 B $6.8 B $6.2 B $6.0 B $5.9 B $6.1 B $6.0 B $6.0B Total GDP Supported by Nevada Mining Industry Operations 2010 2011 2012 2014 2015 2016 2017 Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS Mining Association#67Economic Output for Nevada Mining Industry Operations (2017) $8.1 B $2.6 B $1.7 B $12.4B Total Economic Output Generated by Nevada Mining Industry Operations Direct NEVADA Mining Association Indirect Induced MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis APPLIED ANALYSIS#68Economic Output for Nevada Mining Industry Operations $14.0 B $13.0 B $12.4 $11.9 B $11.1 $11.3 $10.9 2010 2011 2012 2014 2015 2016 2017 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES $12.4B Total Economic Output Generated by Nevada Mining Industry Operations Source: U.S. Bureau of Labor Statistics; Nevada Department of Taxation; IMPLAN; Applied Analysis APPLIED ANALYSIS#69AL BEYOND THE ECONOMICS, WHAT ARE THE INDUSTRY CONTRIBUTIONS? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#70Charitable Gifts Donated Calendar Year 2017 $3.0M $2.0M $1.8M $1.5M $1.4M Monetary Donations to Educational Scholarships Other Giving to Higher Non-Profit/Charitable Educational Institutions Organizations Contributions to Capital Improvement Projects in the Local Community NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Other Source: NVMA 2018 Survey APPLIED ANALYSIS#71Total Charitable Gifts Donated Calendar Year 2017 $9.7 M Donated NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: NVMA 2018 Survey APPLIED ANALYSIS#72Volunteer Hours Donated Calendar Year 2017 3,020 Hours Donated NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: NVMA 2018 Survey APPLIED ANALYSIS#73AL HOW WILL NEW LAWS AND REGULATIONS IMPACT THE MINING INDUSTRY? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#74Public Lands Withdrawals/Restricted Access for Exploration 0.0% 24.0% 32.0% 24.0% 12.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk Very High Or Significant Risk NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: NVMA 2018 Survey APPLIED ANALYSIS#75Public Lands Withdrawals/Restricted Access for Mineral Development 24.0% 36.0% 20.0% 12.0% 0.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk Very High Or Significant Risk NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: NVMA 2018 Survey APPLIED ANALYSIS#76Exploitation of Environmental Law/Regulations 24.0% 36.0% 12.0% 20.0% 0.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk Very High Or Significant Risk NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: NVMA 2018 Survey APPLIED ANALYSIS#77Monetary Policies (Impact on Inflation/Gold Prices) 4.0% 16.0% 36.0% 24.0% 16.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk Very High Or Significant Risk NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: NVMA 2018 Survey APPLIED ANALYSIS#78Access to Capital and/or Financing for Operations 4.0% 28.0% 28.0% 20.0% 16.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk Very High Or Significant Risk NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Source: NVMA 2018 Survey APPLIED ANALYSIS#79Cost of Equipment and/or Capital Purchases 0.0% 20.0% 28.0% 28.0% 20.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk Very High Or Significant NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association Risk Source: NVMA 2018 Survey APPLIED ANALYSIS#80Tax Cuts & Jobs Act • Statutory rate reduction • Percentage depletion retained. Repeal of corporate AMT, retention of individual AMT • Increase in bonus depreciation Limit net interest expense deduction NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association APPLIED ANALYSIS#81AL HOW WILL CHANGES IN THE ENERGY INDUSTRY IMPACT THE MINING INDUSTRY? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#82Energy • Uncertainty around Question 3 and Question 6. ● Increased shareholder and general public scrutiny of energy sources and uses Record-low solar PPAs being signed New storage technologies help assure reliability/redundancy NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association APPLIED ANALYSIS#83Climate Change Impact on Energy Usage/Demand 4.0% 28.0% 16.0% 44.0% No Risk Somewhat Low Risk Moderate Risk Somewhat High Risk NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES 4.0% Very High Or Significant Risk Source: NVMA 2018 Survey APPLIED ANALYSIS#84NEVADA Mining Association AL HOW WILL TECHNOLOGY IMPACT THE MINING INDUSTRY? MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#85THE CHALLENGE OF THE FOURTH INDUSTRIAL REVOLUTION NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED Mining Association ANALYSIS#86NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#8710000 D 002 10 700010 101 011 中帽口 000000 0 1110 110 000 00110 011 011 001 0 11 10 01 0101 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES 11 01 00 0 011 10 110 01 001 11 000 01 APPLIED ANALYSIS#88Forbes THE 4TH INDUSTRIAL REVOLUTION: HOW MINING COMPANIES ARE USING AI, MACHINE LEARNING AND ROBOTS "In an industry such as mining where improving efficiency and productivity is crucial to profitability, even small improvements in yields, speed and efficiency can make an extraordinary impact." NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: Forbes, 9/7/2018 APPLIED ANALYSIS#89"...already been using autonomous haul trucks that can carry 350 tons and operate totally independently since 2008. These trucks have impacted the company's bottom line by reducing fuel use by 13 percent and are safer to operate." NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES PAIKOISEL 930E-AT 06H198 KOMATSU NO UNAUTHORISED 98 PARKING WITHIN Source: Forbes; Business Insider APPLIED ANALYSIS#90NEVADA Mining Association Assembly Bill No. 69-Committee on Transportation CHAPTER AN ACT relating to transportation; revising requirements for the testing or operation of an autonomous vehicle on a highway within this State; authorizing the use of driver-assistive platooning technology; authorizing the use of a fully autonomous vehicle to provide transportation services in certain circumstances by persons licensed by the Department of Motor Vehicles, Nevada Transportation Authority or Taxicab Authority: providing for the regulation of autonomous vehicle network companies; providing penalties: and providing other matters properly relating thereto. Legislative Counsel's Digest: Existing law requires the Department of Motor Vehicles to adopt regulations authorizing the operation of autonomous vehicles on highways within this State. (NRS 482A.100) Existing law also provides certain requirements which must be met before an autonomous vehicle is tested or operated on a highway within this State (NRS 482A.060-182A080) Sections 5.6 of this bill produits a local government from imposing a tax, fee or other requirement on an automated driving system or autonomous vehicle. Section 5.8 of this bill requires a person responsible for the testing of an autonomous vehicle to report certain crashes to the Department. Section 6 of this bill authorizes the Department to impose an administrative fine for violations of laws and regulations relating to autonomous vehicles. Section $ of this bill allows a fully autonomous vehicle to be tested or operated on a highway within this State with the automated driving system engaged and without a human operator if the vehicle is capable of achieving a minimal risk condition upon a failure of its automated driving system. Section 9 of this bill allows an autonomous vehicle or fully autonomous vehicle to be tested or operated on a highway within this State if the vehicle satisfies certain requirements relating to safety if an automated driving systems fails. Section 9.5 of this bill extends immaly from liability for damages caused by modifications by an immathorized third party to the original manufacturer or developer of an automated driving system. Section 18 of this bill authorizes the Department to adopt certain regulations relating to autonomous vehicles. Section 5.4 of this bill authorizes the use of driver assistive platooning technology within this State Section 11.7 of this bill excludes a vehicle using driver-assistive platooning technology from the provisions of law prohibiting the driver of a velucle from following another velicle too closely. Section 115 of this bill defines the term "driver" for the purposes of the traffic laws of this State to include the owner of a fully autonomous vehicle and the person who causes the automated driving system of any other autonomous vehicle to engage. Exosting law requires: (1) each person operating as a common, contract or private motor camer in this State to obtain a license from the Department of Motor Vehicles; (2) cach person who engages in the taxicab business in certain counties to hold a certificate of public convenience and necessity issued by the Public Service Commission of Nevada before July 1, 1981, or by the Taxicab Authority; and (3) each person who engages in the business of a transportation network company in this State to hold a permit issued by the Nevada Transportation Authority (NRS 706.491, 706.881, 706.8827, 706A. (10) Sections 14.2-149 of this bill provide for "This legislation establishes Nevada as a leader in embracing self- driving vehicles and puts the people of Nevada at the forefront for the opportunity to realize the many benefits of self-driving vehicles." -General Motors, 6/19/2017 79th Session (2017) MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#91Automation: It's REAL and It's Coming ☑ NOT A FAD Every sector is experiencing or will experience real disruption MINING JOBS Up to 50% of mining jobs are ripe for automation DATA COLLECTION & ANALYSIS in addition to physical work can be automated NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#92Largest Companies by Market Cap 2001 2006 2011 2016 2018 1 1 1 EXON 1 EXON 1 2 Microsoft 2 GE 2 2 Alphabet 2 amazon 3 EXXON 3 3 3 Microsoft 3 Microsoft TOTAL PetroChina 4 citi 4 Microsoft 4 4 amazon 4 Alphabet 5 Walmart 5 cíti 5 E3 5 f 5 f NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association APPLIED ANALYSIS#93How Are You Thinking About Digital Integration? Face • From mine to customer, thousands of digital integrations coming • IoT Blockchain • Artificial Intelligence • Automation NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association APPLIED ANALYSIS#94How Are You Thinking About Digital Integration? • Increase operational productivity Better maintain assets Enhance employee safety NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association APPLIED ANALYSIS#95Barriers to Innovation A $ RISK AVERSION SHORT-TERM SHAREHOLDER VALUE CASH FLOW REGULATORY RESTRICTIONS NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#96AL HOW WILL POLITICAL CHANGES IMPACT THE MINING INDUSTRY? NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#97BATTLE BORN NEVADA 2018 State Elections NEVADA MINING INDUSTRY ISSUES AND OPPORTUNITIES Mining Association APPLIED ANALYSIS#98Houses of State Government Transitioning in 2018 Governor Senate 2017 Session GREAT THE SEAL OF THE STA ALL FOR OUR COUNTRY NEVADA *** Up for Election OF Assembly 2017 Session 15 11 11 10 42 27 11 Seats up for Election NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES All 42 Seats up for Election APPLIED ANALYSIS#99NEVADA Mining Association RECOVERY RECESSION MINING INDUSTRY ISSUES AND OPPORTUNITIES APPLIED ANALYSIS#1002nd Longest Expansion in U.S. History Years 0 1 2 3 4 5 6 7 8 9 10 11 1945-48 1949-53 1954-57 1958-60 1961-69 1970-73 1975-80 1980-81 1982-90 1991-01 2001-07 2009-18 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: National Bureau of Economic Research, The Wall Street Journal, Applied Analysis APPLIED ANALYSIS#101The Next Recession 2019 2020 2021 2022 Sometime after 2022 0% 10% 20% 30% 40% 50% 60% NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Economists have predicted nine out of the last five recessions? Source: Wall Street Journal Survey of Economists Conducted May 4-8, 2018, 5/10/18 APPLIED ANALYSIS#102Consumer Confidence Recession ―Future Expectations -Present Situation 200 180 160 140 120 100 80 Ш 60 40 20 0 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 NEVADA Mining Association MINING INDUSTRY ISSUES AND OPPORTUNITIES Source: The Conference Board APPLIED ANALYSIS#103NEVADA Mining Association 2013 MINING INDUSTRY ISSUES AND OPPORTUNITIES