Newmont Corporation

Good morning and welcome to the year end in fourth quarter 2018 earnings call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jessica Largent, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to Newmont's full year and fourth quarter 2018 earnings conference call. Joining us on the call today are Gary Goldberg, Chief Executive Officer, Nancy Beezy, Chief Financial Officer, and Tom Palmer, President and Chief Operating Officer. They will be available to answer questions at the end of the call, along with other members of our executive team. Turning to slide two. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found on our website at newmont.com. Turning to slide three. Here you will find additional information on the proposed transaction between Newmont and Gold Corp. Our preliminary proxy statement was filed this morning and is also available on our website. Now I'll hand it over to Gary on slide four.

Thanks, Jess. Good morning, and thank you all for joining this call. Newmont finished the year with a strong fourth quarter as we reached commercial production at Subicca Underground, delivering another profitable project on time and within budget. But before we get into the details, I want to congratulate our Newmont team for continuing to stay focused on meeting our commitments and for laying the groundwork to lead the gold sector in profitability and sustainability. Turning to more details on slide five. In 2018, Newmont delivered superior operational execution, which we demonstrated by producing 5.1 million ounces of gold at all in sustaining costs of $909 per ounce, overcoming geotechnical challenges and the impacts of planned stripping campaigns in North America and Australia, generating $640 million in cost and efficiency improvements from our full potential continuous improvement program, more than offsetting inflation, and bringing total improvements to more than $2 billion since 2013, and advancing our most promising digital initiatives to improve safety, optimize how we mine and process ore, improve process control systems, and monitor mobile equipment health from a centralized base. We also strengthened our global portfolio of long-life assets in all four regions. In North America, we completed the Twin Creeks Underground and Northwest Exodus projects, extending mine life and adding lower-cost production in Nevada. We delivered the Cripple Creek and Victor Concentrate project to improve recoveries, and we advanced Long Canyon Phase II to feasibility study. In South America, we commissioned the new primary crusher at Merion, mined first gold at Ketcher, Maine, ahead of schedule, and declared first reserves at Yanacocha Sulfides. In Australia, we progressed the Tanami Power Project to pave the way for a second expansion of this world-class asset. In Africa, we reached commercial production at Sabika Underground, adding higher-grade, lower-cost production at a HOFL while advancing future growth opportunities throughout the region. And we outperformed our global exploration targets by adding 6.7 million ounces of reserve and 9.5 million ounces of resource by the drill bit. Finally, we progressed in our goal of leading the gold sector in both profitability and responsibility by generating adjusted EBITDA of $2.6 billion and maintaining an investment-grade credit profile with over $6.3 billion of liquidity, returning approximately $400 million to shareholders through an industry-leading dividend and share repurchases, reflecting confidence in our ability to deliver returns while investing in profitable growth, and being recognized as the mining sector leader in sustainability, management performance, and for the advancement of diversity and inclusion in the workplace. I'll expand on this topic on slide six. We finished the year with a total recordable injury frequency rate of 0.40, which was a 13% improvement from 2017. However, this performance was overshadowed by the deaths of seven colleagues. While we will never fully recover from these losses, we have made every effort to learn from them, strengthen our controls, and share our lessons across the mining industry. Managing risk and embedding controls to prevent fatalities remain at the heart of our safety program and safer operations are also the foundation for driving further efficiency. We remain focused on driving visible, felt leadership by reinforcing key safety systems and behaviors among our employees and contractors. Our long-term success also rests on the standards we set and the values we uphold. In 2018, we were honored to be recognized as the top mining company in the Dow Jones Sustainability Index for the fourth consecutive year and to be named one of the Wall Street Journal's top 250 best managed companies. Newmont's commitment to inclusion and diversity was also recognized by the National Association of Corporate Directors and in Bloomberg's Gender Equality Index. This recognition speaks to the caliber of our team, as well as our success in executing our strategy and living our values. Turning to cost and production on slide 7. Our track record shows a steady trajectory of improvement as our full potential program more than offset inflation and helped to mitigate the unit cost impact from planned stripping campaigns at Carlin, Twin Creeks, and Boddington. And through continued outperformance across our portfolio, we delivered 5.1 million attributive allowances at all-in sustaining costs of $909 per ounce in 2018, below our full-year guidance of $915 to $955 per ounce. Looking forward, 2019 all-in sustaining costs are expected to be $935 per ounce, with lower cost production at Sabica Underground and reduced power costs at Tanami, helping to offset headwinds such as geotechnical challenges at Carlin and KCGM and input cost pressures. In 2019, we expect to produce approximately 5.2 million ounces, driven primarily by higher grades at O'Hoffel and the completion of the O'Hoffel Mill expansion, which offsets lower grades in North America and ongoing stripping at Boddington. Turning to our latest projects on slide eight. In November, we reached commercial production at Sebeka Underground in Africa, on schedule and within budget. And we are currently executing three projects that will be completed before the end of 2019. In South America, we're extending oxide production through Ketcher, Maine, where we reached the first gold in December, and mining continues on schedule. In Africa, we continue to make good progress on the Ahafo Mill expansion, which together with Sabica Underground will extend profitable production until at least 2029. Finally, in Australia, our Tanami Power project is nearing completion to lower costs and emissions while facilitating future growth. These projects are expected to deliver an average internal rate of return above 20%. Turning to our reserve and resource delivery on slide 9. In 2018, we added 6.7 million ounces of reserves, exceeding our exploration target of 4 million ounces, all by the drill bit. We achieved these results while maintaining the same $1,200 reserve gold price as the prior year. Exploration also added 9.5 million ounces of resources, more than offsetting the conversion of resource ounces to reserves. We also added 5.3 million ounces of resource through our acquisition of a 50% interest in the Galore Creek project. As you can see on this waterfall chart, reserve additions of 6.7 million ounces exceeded depletion of 6.1 million ounces, but were offset by revisions of 3.6 million ounces, largely driven by ore body and metallurgical model changes at Phoenix, and pit design changes at Carlin, driven by increased costs and the removal of a layback at Gold Quarry. Our reserve additions were spread equally across our four regions, and our resource additions were primarily in Australia and South America. Positive additions and revisions to our resource base included a first-time declaration of 2.2 million ounces from Yanacocha sulfides as this project moved into definitive feasibility, 800,000 ounces at Tanami from conversion of resource ounces at Oran, 600,000 ounces at CC&V due to mine planning improvements, 550,000 ounces at Boddington from drilling and pit optimization, and 360,000 ounces at AHAFO due to improved wall control guidelines allowing for steeper slopes. Our average reserve grade also increased 4% to 1.19 grams per ton, largely due to higher grade additions from several of these sites and the reclassification to resource of lower grade ounces at Carlin and Phoenix. I want to acknowledge our exploration and our operations teams for their collaboration in delivering these results. With that, I'll turn it over to Nancy on slide 10 to discuss our financial performance.