The operator welcomes participants to Newmont's earnings and guidance call and introduces CEO Tom Palmer. The CEO acknowledges the departure of the COO, Rob Atkinson, and his contributions to the company's safety and community relations. The CEO also shares the tragic news of a fatal incident at the Brucejack operation and remembers the victim, Adam Kennedy.

Newmont extends condolences to the loved ones of Adam and emphasizes the importance of maintaining safety in the workplace. They are conducting a safety reset and training to implement their fatality risk management system. The company is also investigating the incident and will share lessons learned with the industry. In terms of performance, Newmont produced 5.5 million ounces of gold and nearly 900,000 gold equivalent ounces from other metals in 2023, in line with their revised outlook.

In 2024, we aim to improve upon our previous performance by focusing on delivering value to our shareholders. We have transformed our business into a collection of the best gold and copper operations and projects after acquiring Newcrest. Our key commitments include setting a sustainability standard, creating a strong portfolio of assets, delivering synergies and optimizing our portfolio, and maintaining a disciplined approach to capital allocation. The integration of the new operations is progressing well and we have announced 4 key actions to enhance our ability to deliver on our strategy, including divesting 6 noncore assets and focusing solely on Tier 1 operations.

Newmont has a strong portfolio focused on Tier 1 gold and copper operations and projects in favorable mining jurisdictions. They have announced a $500 million cost and productivity improvement plan, in addition to a $1 per share dividend and a $1 billion share repurchase program. Their portfolio includes 10 Tier 1 operations, 3 emerging Tier 1 operations, and a robust organic development pipeline. They also have the largest gold and copper resource base in the industry.

Newmont's Tier 1 portfolio offers unmatched depth and quality in gold production. Despite challenges in 2023, such as labor disputes and asset integrity issues, the company prioritized long-term interests and is now focused on improving operating performance for sustainable growth and strong returns. The completion date and capital cost for the Tanami 2 expansion project has been extended due to a reassessment of ground conditions and incorporation of lessons learned.

The company has carefully considered various options to address a line overbreak and line the lower section of the shaft, with input from third-party reviews. This decision has informed the recent cost and schedule update. The company is confident that the chosen method will ensure safe construction and long-term productivity. The operational team is focused on integration and value delivery in 2024, with a global operating model and a dedicated project delivery team.

The company is focused on improving the performance of its 11 managed operations and divesting 6 noncore assets. They are also committed to progressing 4 key projects and ensuring the safe delivery of targets. The success of the company in 2024 will depend largely on the performance of its 6 managed Tier 1 operations, with a focus on integration and delivery. Each operation has its own priorities, such as improving productivity at Boddington and replacing girth gear at Ahafo. The company is also working on simplifying the mine plan and improving asset reliability at Tanami.

Newmont is currently working on several projects at their various operations, including commissioning a new block cave at Cadia and completing tailings rectification and expansion work. They have teams on the ground actively working on these projects and anticipate production to be weighted towards the second half of the year. They are also focused on remediating issues at their Telfer operation and are on track to deliver on their commitments for the year. Additionally, they have four key projects in execution to bring forward new low-cost ounces, including a second expansion at Tanami and two block cave projects at Cadia.

The company is making progress on the construction of a new mine, Ahafo North, and has potential for significant gold production from its Ahafo district. They expect to produce 5.6 million ounces of gold and improve unit costs by 2023. The company will continue to focus on disciplined delivery and capital allocation to ensure future growth and performance.

Over the next 5 years, Newmont expects to see increasing gold production from their managed operations, including the completion of expansions at Boddington, Tanami, and Cadia, as well as the addition of new low-cost ounces from Ahafo. They also anticipate significant copper production, as well as other minerals, from their diversified Tier 1 portfolio. Additionally, the company has identified $500 million in cost and productivity improvements beyond their current commitments.

Newmont is focused on increasing metal production and reducing costs, with a goal of achieving all-in sustaining costs of $1,150 per ounce by 2027. They are taking a practical and disciplined approach to development capital, with plans to spend $1.3 billion per year and prioritize the most profitable projects. They have a strong project pipeline, including 3 world-class copper and gold projects, and 3 long-term opportunities to diversify into copper. The demand for copper is expected to increase significantly in the next 10 years, creating an opportunity for Newmont to meet this demand with their organic copper exposure.

Karyn Ovelmen discusses the company's balanced capital allocation strategy, which is focused on maintaining financial flexibility, generating sustainable free cash flow, and returning capital to shareholders. The company plans to maintain an investment-grade balance sheet, with a target debt level of $8 billion and liquidity of $7 billion. Proceeds from divestments will first be used to maintain a minimum cash balance and then to reduce debt. The company also plans to invest an average of $1.3 billion in development capital over the next 5 years to drive production growth and generate high returns.

The third priority of the company's capital allocation approach is to balance shareholder returns through a base dividend and share repurchases. The annualized base dividend is $1 per share and will be paid from free cash flow. The company's free cash flow generation is expected to increase in the second half of 2024. The company's Board has also authorized a $1 billion share repurchase program, which will be funded with free cash flow and asset sale proceeds. Free cash flow and proceeds from divestments will be prioritized for these purposes.

Newmont's first priority is to maintain a minimum cash balance, with the second priority being to reduce debt to $8 billion and the third being share repurchases. They believe this will create value for shareholders and improve the company's financial position. The company's Tier 1 portfolio of assets is considered the best in the industry and provides exposure to high-quality assets in favorable mining jurisdictions. Newmont plans to continue working on transforming their portfolio and will provide updates on their progress later in the year. They are confident in their team's ability to deliver on their commitments and maintain their position as a top gold equity.

The speaker is limiting questions to one and asks about the decline in gold reserves at Newcrest. The speaker explains that the decline is due to reporting changes and that the reserves and resources are consistent with what was assumed during due diligence. They suggest setting up a detailed session to answer specific questions. The next question is about the company's decision to shift capital from dividends to share buybacks.

The decision to make a transfer of capital return was driven by the acquisition of Newcrest and the transformation of the company's portfolio. The company looked at their balance sheet and the debt and shares issued during the transaction to determine the appropriate capital allocation approach. The main priority was to build up cash and pay down debt, followed by reinvestment in the business and a fixed dividend. Any additional free cash flow would be returned through a share buyback.

The company is linking the return of capital to their free cash flow and believes that their current base dividend is at the right level for their future cash flow generation. They also plan to use a variable portion of the return for share repurchases. There have been metallurgical changes at Peñasquito, resulting in a reduction of reserves for gold and silver. This is due to infill drilling and the company is still working to incorporate the impacted area into their plans.

The main focus at Peñasquito is improving operational efficiency and increasing productivity over the next decade. The block models and reconciliations have shown positive results for silver, lead, and zinc, but gold has been slightly lower. The block models are managed separately and have been updated based on the reconciliations. At Tanami, there has been an issue with overbreak at the bottom of the 1.5 kilometer deep production shaft, which is being addressed.

The bottom of the 6-meter diameter shaft has experienced overbreak, meaning that the shaft is wider than intended due to poor ground conditions. This is a common occurrence in underground mining and shaft sinking. The company has developed a safe and effective methodology to rectify the overbreak, which involves rock bolting and concrete filling before lining the shaft. This will ensure a safe and high-quality shaft that can be used for decades to access the ore body at depth.

The speaker explains the process of filling overbreak areas and clarifies the term "underbreak." They then address a question about Lihir, a mine that has underperformed in the past, and explain how being part of a larger portfolio can help balance out the challenges of a complex mine.

The speaker discusses the potential of Lihir in Newmont's portfolio and the opportunities for improvement in equipment reliability and simplifying the mine plan. They also mention the positive cultural changes that have occurred since Newmont acquired Lihir. The speaker then addresses a question about another asset, Wafi-Golpu.

Thomas Palmer, the speaker, is talking about the Wafi-Golpu project, which is a copper and gold mine in a promising location. The project is still in the study phase and not much money is being spent on it currently. The focus is on negotiations with partners and the government to secure a favorable investment regime. The project is one of four in the company's pipeline and will be an important contributor to the world's need for copper. However, the appropriate investment environment and further study work are needed before the project can move forward.

The speaker discusses the importance of understanding the ore body and development costs before making decisions about new mines. They mention specific projects and a question is asked about the company's dividend policy. The speaker responds by saying they plan to have a fixed dividend and any additional cash will likely go towards share buybacks. They also mention their goal to maintain financial flexibility and an investment-grade rating, with a target net debt to EBITDA ratio of 1x.

The speaker is discussing the potential for growth in the Golden Triangle area in the next few years. They mention the Brucejack and Red Chris mines as well as the development of Galore Creek. They emphasize the importance of understanding the ore bodies and building the mines efficiently to ensure long-term success.

Tanya Jakusconek asks Newcrest CEO Thomas Palmer about upcoming information, including new life of mine plans and Cadia news. Palmer confirms that all reserves and resources are now up to Newmont standard and that they will be working on strategic mine plans and a longer-term outlook for the portfolio. This information will be shared at an Investor Day in the second half of the year.

The company is considering holding an Investor Day in November to discuss their strategic lifeline plan and provide a longer-term outlook for their portfolio. They expect to sell 6 noncore assets by the end of the first quarter of 2024 and will report on them as assets held for sale. The company's financials will be impacted by this change. The conference call has now ended.

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