The operator welcomes listeners to Newmont's Third Quarter 2023 Earnings Call, and the President and CEO, Tom Palmer, introduces the executive leadership team and a new member, Natascha Viljoen. He also mentions the company's clear and focused strategy and the pending acquisition of Newcrest, which will make Newmont one of the top senior gold producers. Palmer then discusses the company's safety performance and their commitment to safety.

During this time, we made changes to our fatality risk management system and focused on critical controls to prevent fatalities. We also modified our safety targets and saw an improvement in our safety performance. However, we still experience potential safety events every 8 days, which we use as opportunities to learn and improve. In the third quarter, we produced 1.3 million ounces of gold and 10,000 tonnes of copper, generating strong financial results and declaring a dividend. We also achieved important milestones at our key development projects, including fully mining the upper section of the new production shaft at Tanami, receiving funds approval for the Pamour project, and reaching commercial production at the San Marcos deposit.

In the third paragraph, the speaker discusses the recent resolution with the union at the Peñasquito mine in Mexico and the focus on safely returning teams to work and ramping up operations. They highlight the company's values and commitment to honoring the collective bargaining agreement and protecting the long-term value for all stakeholders. The speaker also mentions the impact of the strike on the company's outlook for the year, with adjustments being made to reflect the suspension of operations at Peñasquito and lower production and throughput at other mines. They conclude by mentioning the upcoming integration of Newcrest assets and the expected production and cost figures for 2023. The paragraph emphasizes the company's efforts to overcome challenges and deliver strong results.

Robert Atkinson discusses the high-margin Tier 1 assets in the company's portfolio, starting with Boddington. Despite challenges such as mill maintenance and heavy rainfall, Boddington delivered solid production and plans to increase funds mined in the fourth quarter. The commissioning of new autonomous haul trucks will accelerate stripping and position the mine for higher grades in 2025. Tanami, the company's Tier 1 mine in the Northern Territory, has consistently strong results and achieved record mill throughput in August. However, the team is closely monitoring the impact of wildfires in the area and prioritizing the safety of their workforce. The second expansion project at Tanami is also progressing well.

The company has completed a significant milestone in the concrete lining of their deep shaft and will review the project plan for the lower sections. This project will bring improvements and cost savings to the Tanami operation. At Ahafo, a grinding mill issue caused reduced throughput, but a solution has been implemented and the Ahafo North project is progressing as planned.

The company is making progress on various projects, including building airports and assembling mining equipment. They have reached an agreement with the union at Peñasquito and have restarted operations. The company is committed to working closely with stakeholders and protecting the value of the mine. Non-managed joint ventures have contributed a significant portion of gold production, but performance has been below expectations for the year.

The company has adjusted projections for its joint venture partners and expects improved performance in the fourth quarter. They have achieved key milestones at several development projects and are on track to produce significant amounts of gold in the coming years. The company's financial results are also strong, with an increase in profitable gold production compared to the previous quarter.

Newmont reported strong financial results for the third quarter, with revenue of $2.5 billion and adjusted EBITDA of $933 million. They also generated $1 billion in cash from operations and closed the quarter with a cash position of $3.2 billion. The company maintains a best-in-class investment-grade balance sheet and received an A- rating from Fitch. Despite challenges at some operations, Newmont maintained solid margins and reported GAAP net income of $157 million. Adjusted net income was $0.36 per diluted share. The company also declared a dividend of $0.40 per share for the quarter.

Newmont has declared a dividend within their established framework and in line with their 2023 payout range. They have paid over $5 billion in dividends since the Goldcorp transaction in 2019 and will integrate 5 new operations into their global operating model with the Newcrest acquisition. They will provide their 2024 outlook in February and assess the variable portion of their dividends annually. They will also provide a longer-term outlook after their annual strategy session in June. The Newcrest transaction is expected to bring great value to shareholders and stakeholders.

Newmont is uniquely positioned to generate superior returns through its unrivaled platform, top talent, and concentration of Tier 1 assets in favorable jurisdictions. The recent shareholder and regulatory approvals have paved the way for the company to close its transformational transaction and set a new standard for gold and copper mining. With 10 Tier 1 assets and a strong operating model, Newmont is expected to deliver strong and stable returns for decades to come. The company will leverage its learnings and apply its operating model to its newly acquired assets, including those in British Columbia. Newmont's integrated global operating model, supported by experienced leaders, will be managed through 6 regional business units.

In November, Natascha will take over the Australian business unit while Rob will continue to lead the African, Latin American, and Peruvian units. They will work together to integrate Newcrest and focus on safety and inclusive workplace programs. Both companies have a shared value of creating safe and respectful work environments.

The company is committed to creating a welcoming and safe workplace for all employees. They will be implementing their Full Potential program in November to support their synergy commitments. This program has been successful in delivering cost savings and productivity improvements in the past. The company has identified $500 million in annual synergies and is excited about the long-term value it will bring. They also plan to increase their investor outreach and establish a presence in Australia, where 30% of their revenues will come from after the transaction.

The speaker is looking forward to welcoming Newcrest's team and providing an update on the combined business in the first quarter of next year. They plan to take their time to understand and work on mine plans and projects across the portfolio before making any decisions on reducing production levels. They will also conduct a reserve and resource review and establish Newmont-based resource models.

The speaker discusses the capability of Newmont to effectively manage their portfolio of 17 operations, which includes a recent addition of 5 operations through a bolt-on acquisition. They mention the experienced leaders in charge of each business unit and their ability to optimize the portfolio through project resequencing and potential rationalization of Tier 2 operations. Overall, they are confident in their ability to successfully run all 17 operations.

Thomas Palmer, during a Q&A session, was asked about the Full Potential program and synergies after the NCM acquisition. He mentioned that $500 million, $200 million of which is from Full Potential work, will come from two Peñasquitos in the Newcrest portfolio, Lihir and Cadia. They plan to focus on improving mining basics, ore consistency, and asset management at Lihir, and to work on processing plant bottlenecks and improving throughput and recovery at Cadia. This is similar to their approach at Peñasquito, which has yielded successful results.

The speaker discusses the impact of recent issues on the production downgrade and how it will affect operations in 2024. They mention that Peñasquito has been reset and is expected to improve, but the mine sequence will be different. They also mention Ahafo, where they will be nursing a girth gear on the mill.

Newmont's girth gear on the main feed to the process plant is currently undergoing maintenance, causing the plant to run at 70-80% of its full throughput. This is expected to continue until the end of the first quarter or start of the second quarter in 2024. There may also be impacts on other plants in 2024, but none of these issues affect the company's reserves. The market should remember that the gold is still in the ground and these issues are just temporary delays.

The speaker is asked about the possibility of a buyback to communicate the long-term value of Newmont's stock, given its current underperformance. The speaker explains that they will first focus on business planning and developing budgets for the next few years, including for their new assets. They will then consider their capital allocation strategy, with a focus on maintaining a strong balance sheet, reinvesting in the business, and providing returns to shareholders through dividends. The primary debate and discussion will be around calibrating the dividend framework based on assumptions about gold prices and other economic factors.

The speaker discusses the pending Newcrest merger and how it will affect Newmont's reserves and resources. They mention that there will be adjustments made, similar to when they acquired Goldcorp, and that a technical team will be assessing the reserves and resources at each operation. There may be differences in classification due to different reporting standards, but Newmont has a high standard for reserves.

The company has made various announcements since the binding agreement was announced, and they will report reserves and resources separately for the two companies. They plan to update reserves and resources for the combined portfolio in February, but they have not had access to any additional information since April. They will have access to reserves and resources on November 6th, and they expect to see a similar shift from reserves to resources as seen in the Goldcorp experience.

The speaker discusses the upcoming changes in accounting and definitions for stockpiles and sustaining capital due to the transition to U.S. GAAP accounting. They also mention that a 5-year guidance outlook will be provided after the Board strategy meetings in June and that there will be more severance and restructuring costs in Q4 and Q1.

Thomas Palmer, responding to a question from Tanya Jakusconek, discusses the impact of the transaction and the upcoming index rebalancing on the company's stock performance. He mentions that there are many moving parts, including the volatility of gold prices, and it may take a month or two for things to settle out. He predicts that there could be a movement of up to AUD 10 billion and that the company's market cap could be between AUD 10 billion to AUD 15 billion on the ASX. He also mentions that there will be some volatility and liquidity before things settle out, and the company's primary and secondary listings will represent 20% to 30% of their market cap.

The speaker discusses the volatility and liquidity of the market for the next few months due to rebalancing and the Australian listing. They also mention the potential positive impact on the portfolio from the Australian market and passive investments. In response to a question about costs, the speaker notes that there are many moving parts and that the current production levels and costs are impacted by external factors, but the direct cost base is in line with expectations for the year.

The direct cost base for next year is expected to remain steady, with inflation stabilizing. The company will be dividing its portfolio into Tier 1 operations, emerging Tier 1 operations, non-managed joint ventures, and Tier 2 assets, and will be challenging the cost base of the non-managed joint ventures. The company's plan for 2024 is expected to have a similar cost base to this year, with efforts to overcome challenges such as bush fires, flooding, and strikes. The speaker is unsure if they can provide any details or review on a specific topic.

Anita Soni asked Newcrest's CEO, Thomas Palmer, about the company's capital allocation plans and whether the $2 billion expected from portfolio optimization could be used to support dividends. Palmer clarified that the optimization would come from resequencing projects and divesting assets, which would generate free cash flow to support the dividend. The proceeds from divestments would first be used to strengthen the balance sheet before being allocated for other purposes.

The speaker discusses the company's experience with Goldcorp and the potential for share buybacks. They also address questions about Boddington's production and the impact of waste movement and stockpiling. Finally, they mention the revised development capital for the Tanami project due to rainfall events.

Anita asks Thomas Palmer about the capital at Tanami expansion and whether an update should be expected due to unit cost escalation. Palmer explains that an important milestone has been reached at Tanami and they are currently working on the lower part of the shaft. He also mentions the key cost pressure in capital projects is labor and an update on costs and schedule will be provided with the 2024 guidance in February. Palmer confirms that guidance for 2024 will be provided in February and a combined portfolio 5-year guidance will be provided midyear. He also mentions that the dividends for next year will be discussed in February as well.

Thomas Palmer stated that the dividend for 2024 will be adjusted and the information will be shared in the February 2024 guidance. The operator then concluded the question-and-answer session and turned the conference back over to Tom Palmer for closing remarks. John Tumazos thanked everyone for attending and the call ended.

This summary was generated with AI and may contain some inaccuracies.