In the opening of Newmont's Third Quarter 2024 Earnings Call, CEO Tom Palmer acknowledges the tragic death of an employee, Antoine Fortin, and emphasizes the company's commitment to improving safety practices after experiencing multiple fatalities in the past year. He highlights Newmont's dedication to understanding the causes of these incidents and improving safety culture, sharing lessons with the industry for better performance. Palmer also announces his recent appointment as Chair of the International Council of Mining and Metals, reflecting Newmont's commitment to sustainability and responsible mining practices.

During the author's term as Chair, a key focus is supporting consolidated mining standard initiatives to enhance industry reputation and stakeholder confidence through responsible mining. The company partnered with MKS PAMP to launch a traceable gold bar in the U.S., showcasing their commitment to transparent sourcing. In the third quarter, they produced 1.7 million ounces of gold and significant copper, silver, lead, and zinc output, generating substantial cash flow. Their non-core asset divestment program is progressing, with agreements to divest the Telfer mine in Australia and the Akyem mine in Ghana expected to bring up to $1.5 billion, aiding their $2 billion divestment goal.

The paragraph discusses the company's financial activities and strategic initiatives. It highlights $527 million already received from transactions, a reduction of $233 million in debt, and returning $786 million to shareholders. An additional $2 billion share repurchase program has been approved. The company is advancing projects at Tanami, Ahafo North, and Cadia. In acquiring Newcrest, they aimed for $500 million in synergies across G&A, supply chain, and other programs, achieving this through labor rationalization, insurance and contractor cost reductions, and improved supply chain outcomes. Significant value has been realized, particularly at Cadia, by optimizing operational efficiency, with further potential expected in the future.

The paragraph discusses the operational and financial strategies of Newmont, highlighting improvements at Red Chris and Lihir. At Red Chris, enhancements in gold and copper recovery are being achieved through grinding and flotation circuit optimization, along with increased throughput from consistent ore feed delivery. Lihir is focused on improving efficiency by addressing bottlenecks in materials handling and crushing circuits. With their synergy goals met and divestment plans progressing, Newmont is concentrating on delivering sustainable value from 11 managed large, long-life operations. Natascha Viljoen, in an operational update, emphasizes safety, strong performance from managed assets, and productivity enhancements. In the third quarter, the managed portfolio saw a 4% gold production increase from the second quarter, aiming for a strong finish with an anticipated 1.8 million ounces in the fourth quarter, driven by six Tier 1 operations.

The paragraph discusses various mining operations and their progress at different sites. At Tanami, the focus is on accessing higher-grade ore, expecting the strongest grades in the fourth quarter. At Boddington, the stripping process continues, aiming for strong gold and copper grades by 2026. Penasquito has seen steady production and advanced mining, promising increased gold production in the near future, along with a new worker agreement. Cadia is experiencing declining grades with a transition to a new ore panel and is investing in tailings capacity and integrated studies for long-term operations. Lihir is preparing for a major production increase with the shutdown of a primary autoclave, expected to significantly boost gold production by the fourth quarter of 2024.

The paragraph discusses the company's operational focus for its Lihir and Brucejack mines, highlighting a commitment to reducing complexity and improving sustainability at Lihir, which will cause short-term production reductions due to asset reliability work and mine sequencing changes. Consequently, Lihir's gold production in 2025 will be about 250,000 ounces lower than initially projected, while Brucejack's will be about 100,000 ounces lower. Despite these adjustments, future operations are expected to be more consistent. Meanwhile, Ahafo South experienced a nearly 15% increase in gold production in the third quarter, attributed to improved mill throughput and strong grades from specific mining areas.

The paragraph discusses the future plans and current progress of the company's mining projects. Production at Ahafo South is expected to remain stable until declining in 2025 after completing mining at Subika open pit. Mining activities will begin at Harford North in the fourth quarter, stockpiling ore for commission next year. The project at Ahafo North has shifted from land clearing to infrastructure construction, including the completion of carbon in leach tanks and lining of the timing storage facility. Progress is reported at the Tanami project with concrete lining of a shaft and upcoming installation of wasting machinery. Lastly, successful cave establishment at Cadia Panel Caves marks a key milestone, enabling gravity-assisted mining to process gold and copper ore.

The paragraph discusses the expected production and development of two mining projects, Panel Cave 2-3 and Panel Cave 1-2, highlighting anticipated gold and copper yields and ramp-up timelines. It then shifts to Newmont's strong financial performance in the third quarter, noting a $2 billion adjusted EBITDA and a $0.81 adjusted net income per diluted share, which is an increase from the previous quarter. The company reported $1.6 billion cash flow from operations and $760 million in free cash flow, excluding $300 million from asset sales. The paragraph also mentions a $209 million negative impact on working capital due to stockpile building and reclamation spending, while expecting $225 million more in reclamation spending next quarter. These negatives were partially mitigated by favorable timing in liability payments.

In the fourth quarter, the company anticipates its highest production volumes, which will bolster free cash flows and allow continued capital returns to shareholders. It plans to generate up to $1.5 billion from divestitures of non-core assets, supplementing the $530 million from other sales in 2024. With the proceeds, the company aims to enhance shareholder value by strengthening its balance sheet and repurchasing shares. It repurchased 9.4 million shares for $500 million, with an additional $2 billion repurchase program approved, bringing total authorization to $3 billion. A fixed dividend of $0.25 per share was declared for the third quarter. The company also retired nearly $500 million in debt, maintaining a strong balance sheet with $7.1 billion in liquidity and a gross debt of $8.5 billion, targeting $8 billion. The focus remains on a balanced capital allocation strategy.

The company anticipates producing 1.8 million ounces of gold in the fourth quarter, maintaining its annual production targets. With increased output expected from Nevada Gold Mines and Pueblo Viejo, these locations will contribute significantly to the next year's production. The cost of gold production is projected to decrease by 8% due to higher production volumes, despite increased capital reinvestment and taxes. They plan to spend $320 million in development capital, aligning with their annual investment guidance. The company is focused on high-return projects and addressing safety improvements, reinforcing their long-term strategy and commitments to shareholders.

The company is on track to meet its full-year production targets, generating $1.6 billion in operational cash flow and $760 million in free cash flow. Significant progress has been made in portfolio rationalization with announced divestments. They achieved a synergy target of $500 million and returned $786 million to shareholders through dividends and share repurchases. The balance sheet was strengthened by reducing debt by $233 million and authorizing an additional $2 billion share repurchase program. As they gain more experience with new operations, they aim to create lasting shareholder value, despite anticipating lower gold production from Lahir and Brucejack in 2025. The company will manage higher costs and spending while focusing on tailings work in Cadia, projecting an annual sustaining capital spend of $1.8 billion. The leadership team is focused on optimizing their portfolio, consisting of 11 operations and three ongoing projects.

The paragraph discusses Newmont's strategic focus on expanding margins and generating strong returns on capital rather than simply increasing production volume. The company is carefully evaluating its project pipeline and making disciplined and deliberate reinvestments. Newmont aims to create value and improve lives through sustainable mining. The paragraph then transitions to a Q&A session where Daniel Major from UBS questions whether the expectation of decreasing costs in the gold industry is realistic, given the existing inflationary pressures, to which Thomas Palmer responds by noting a historical correlation between gold prices and production costs, implying that cost reductions could be expected if gold prices decrease.

The paragraph discusses the financial management and future projections of a company's gold operations. The company operates 11 managed operations and aims to strengthen and grow its margins long-term. They provided financial estimates earlier without accounting for cost escalation. As they approach 2025, they expect current cost trends, driven by higher direct and contracted labor costs, to persist into the next 12 to 15 months. Karyn Ovelmen and Thomas Palmer discuss the expectations for cost trends and their impact on future estimates. Daniel Major asks about the company's 2025 guidance, noting reduced gold output from Lihir and Brucejack, suggesting a lowering of previous projections by 350,000 ounces. Thomas Palmer confirms adjustments to the managed portfolio projections.

The paragraph discusses the progress and expectations for the Lihir and Brucejack mining projects. The speaker mentions that both projects are advancing well, but their output for the next year is influenced by key developments and drilling efforts. The core portfolio for 2025 is expected to yield a 5.6% gold production, despite ongoing divestments that may extend into 2025. Production and costs are projected to remain stable into next year. Josh Wolfson from RBC Capital Markets raises concerns about changes in cost and production expectations, particularly related to integration challenges at Brucejack, Lihir, and Cadia, as well as unexpected inflation. Thomas Palmer acknowledges these points.

The paragraph discusses the cost dynamics and operational challenges experienced in the third quarter, focusing on Lihir, Cadia, Cerro Negro, and Penasquito. Lihir faced timing issues with shutdown costs, Cadia dealt with high power costs, Cerro Negro focused on safe productivity post-tragedy, and Penasquito's concentrate sales were delayed by weather. Looking ahead to 2024 and 2025, the focus shifts to managing volume and sustaining capital, especially in facilities like Cadia. Karyn Ovelmen adds that in 2024, a third of cost increases are due to lower sales volumes, particularly in Telfer and Brucejack, and another third is linked to higher sustaining capital, mainly in Nevada.

The paragraph discusses the financial and operational challenges faced by a company involved in gold production, specifically mentioning the impact of higher royalties due to increased gold prices and general and administrative (G&A) costs. It highlights synergy efforts and performance challenges, including issues at various sites and supply chain concerns. There is a focus on integrating Newcrest and Newmont operations. During a conference call, the discussion shifts to the company's experience with inflation, noting that input costs like renewables and fuel align with global trends, but labor costs, particularly for contracted labor, are escalating. The segment concludes with a question about the production outlook for 2025, seeking clarification on projected growth and cost reductions.

Thomas Palmer discusses Newmont's future outlook, focusing on cost management and production targets. He highlights the relationship between gold prices and production costs, noting that any fluctuation in gold prices will directly impact costs. Newmont plans to refocus on its core operations by completing divestments and concentrating on 11 managed operations and three active projects. These efforts are expected to increase production to a 6 million ounce run rate and 150,000 tons of copper by 2026-2027, with a focus on maximizing margins rather than merely increasing volume. Additionally, Palmer emphasizes the significant investments in tailings facilities to ensure long-term operational sustainability, acknowledging that these investments can lead to periods of elevated capital expenditure.

The paragraph discusses the future production outlook and investment plans for several mining operations, emphasizing expected improvements and increased production in the coming years. Karyn Ovelmen highlights transitions at Boddington, Telfer, Cadia, and Lihir, each experiencing temporary production challenges but projected to recover. Thomas Palmer adds that increased ounces will emerge from investments, including the Tanami shaft, starting in late next year. Matthew Murphy inquires about more detailed future guidance, and Palmer indicates that more detailed figures, specifically for 2025, will be shared early next year as they finalize a divestment program and focus on 11 managed operations.

In this paragraph, Anita Soni from CIBC asks about the status and future plans for dust emission approvals and production targets at Cadia, aiming for 35 million tons per annum, and Cerro Negro, with an original target of 3.5 million tons per annum. Karyn Ovelmen clarifies the situation at Cadia, noting ongoing work and permit applications related to the tailings dam, while balancing capital efficiency. Natascha Viljoen addresses Cerro Negro's focus on improving productivity to meet its original production targets, emphasizing the availability of mining areas and equipment.

The paragraph discusses a conversation between Mike Parkin and Thomas Palmer about achieving a $500 million synergy target. Palmer explains that less than half of the savings came from operational cost improvements, with the remainder from productivity and volume enhancements. The focus is on adjusting G&A costs to align with the future business size after completing divestments, and Palmer indicates that efforts are underway to reduce these costs. Mike Parkin asks if these improvements are reflected in the third quarter numbers.

The paragraph is a transcript of a conversation about the company's financial outlook and priorities. The first part involves a question about the company's 7% quarter-over-quarter increase in operating expenses and how this aligns with their fourth-quarter financial guidance, especially considering previous synergies. Thomas Palmer responds by highlighting that improvements in the fourth quarter will mainly come from a strong gold production quarter that will help reduce unit costs as guided. The second part includes a question from Lawson Winder of Bank of America regarding capital allocation decisions. He asks whether the recent push by the Prime Minister of Papua New Guinea for swift finalization of mining agreements for the Wafi project indicates that this project might be prioritized over others. Thomas Palmer greets Lawson and acknowledges the question but doesn't provide a clear response in the excerpt.

The paragraph discusses ongoing negotiations with Joint Venture Partners, Harmony, and the PNG government to establish a mineral development contract and special mining lease. The company emphasizes its disciplined approach to project execution, focusing on understanding feasibility studies, costs, timelines, and returns on invested capital. Currently, their projects at Tanami expansion two, Ahafo North, and the Panel Caves at Cadia are in execution, with future projects, including Wafi-Golpu, competing for capital. Lawson Winder asks about labor inflation affecting costs, noting a budgeted 4% labor inflation for 2024. Thomas Palmer responds, explaining that labor constitutes half of their direct costs, with the employee base accounting for half of that.

In the paragraph, it is discussed that Newmont is experiencing cost escalations beyond initial assumptions, especially in contracted services, which include maintenance and employee logistics. Wage increases are averaging around 4% across nine countries. For 2025, cost projections are being adjusted to reflect current trends. During a Q&A, Alex Hacking from HSBC inquires about production assumptions for Newmont's Tier 1 operations, focusing on the Nevada gold mine. Thomas Palmer responds with general guidance on production expectations but avoids specific figures. There's also a discussion on the mid-term outlook for gold production, with the target of 6.7 million ounces in 2028 under review, while 6 million ounces is considered a mid-term target.

The paragraph discusses a conversation during a call where an analyst, Tanya Jakusconek from Scotiabank, asks about Newmont's cost structure, specifically distinguishing between costs related to Newmont's operations and those affected by broader industry trends. She queries whether the only industry-related cost is labor, noting that 50% is attributed to contractors. She references previous mentions by Tom of contractor inflation rates at 12% or 14% and requests an update on current contractor inflation. The discussion also touches on lower volumes at specific sites and additional sustaining capital needs, emphasizing the focus on growth in margins.

The discussion in the paragraph revolves around financial and operational expectations for the transition from 2024 to 2025. Thomas Palmer explains that labor costs, including both employees and contractors, are expected to remain stable, not experiencing the 12% to 14% inflation previously mentioned. The primary drivers affecting costs and performance are lower volume and sustaining capital. Tanya Jakusconek then shifts the focus to Cadia's production, noting an expected decline from 370,000 ounces as certain operations (PC 1 and PC 2) near the end of their life, while the ramp-up of PC 2-3 is underway, anticipated to reach full production in the next two years. Natascha Viljoen provides insights into these developments and confirms the projected production decline and ramp-up timeline.

The paragraph discusses the replacement of lower production from PC 1 and PC 2 by PC 2-3, targeting PC 1-2 towards the end of the day. It concludes with Thomas Palmer thanking participants and the operator ending the conference. Participants are now instructed to disconnect.

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