Newmont Corporation

Good morning and welcome to Newmont's first quarter 2019 earnings call. Our 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. 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 first quarter 2019 earnings conference call. Joining us on the call today are Gary Goldberg, Chief Executive Officer, Nancy Bezey, 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 newmontgoldcorp.com. And now I'll turn it over to Gary on slide three.

Thanks Jess and thank you all for joining our call. Newmont delivered solid first quarter results as we continue to execute our strategy which includes delivering superior operational execution by running our mines safely and efficiently, sustaining a global portfolio of long life assets by advancing profitable expansions and exploration on four continents, and leading the gold sector in profitability and responsibility. Turning to the details on slide four. In the first quarter, Newmont again delivered superior operational execution which we demonstrated by producing over 1.2 million ounces of attributable gold production at all in sustaining costs of $907 per ounce. Pouring our 10 millionth ounce of Tanami since mining began in 1986, and forging an agreement with Barrick to create a joint venture in Nevada by combining our operations to unlock synergies and new opportunities for employees and stakeholders. We also continued to strengthen our portfolio in the first quarter. We commissioned the Tanami Power Project safely and on schedule, lowering power costs and carbon emissions by 20 percent, and paving the way for a second expansion of this world class asset in Australia. We invested in profitable growth through the Ahofo Mill expansion and Ketchermaine projects, which are expected to reach commercial production later this year. We progressed studies for future opportunities across our portfolio, including Tanami expansion two and Yanacocha sulfides, which continue to advance towards full funding decisions. And we announced, and last week closed, our acquisition of GoldCorp, which I'll discuss in more detail later. Finally, we delivered leading financial performance in the first quarter by generating adjusted EBITDA of $687 million and free cash flow of $349 million, maintaining one of the strongest balance sheets in the gold sector, supported by an investment grade credit profile, returning cash to shareholders through an industry leading quarterly dividend of 14 cents per share and a special dividend of 88 cents per share. We also continued to fulfill our commitment to leading environmental, social, and governance performance by upholding human rights, serving as responsible natural resource stewards, and applying lessons to reduce risk and improve health and safety for the benefit of all employees and stakeholders. I invite you to read more about our performance, programs, and targets, as well as areas we can continue to improve on in Beyond the Mine, our annual sustainability report, which is available on our website. Turning to more about sustainability on slide five, we began the year with the total recordable injury frequency rate of 0.52, a step back from our 2018 performance, and a reminder that we need to remain vigilant in reinforcing key safety systems and behaviors among our employees and contractors throughout our business. Earlier this month marked the anniversary of the tragic loss of our six colleagues at the Ahafel Mill expansion project in Ghana. Although a year has passed, the void in the lives of their families and friends remains as their memories live on. We learned critical lessons from the thorough investigation conducted after the accident. These lessons have been applied at our operations and have been shared across the Mining Industry Creating a more responsible and sustainable business is a continuous journey. The tragic failure of Vale's Bermudino tailings facility in Brazil earlier this year highlighted the need for the industry to improve its management of these facilities. Newmont continues to review and improve our existing practices. To improve awareness of our facilities, we published a tailings fact sheet, which can be found on our website. We have 26 tailings facilities in which we safely place more than 100 million tons of tailings every year, guided by strict standards for managing and inspecting our facilities. We also actively support raising standards for tailings management across the mining industry, similar to how we've been able to raise our standards on cyanide management. We are committed to protecting the health and well-being of people and the environment. Turning to slide 6. In January, we announced our intent to combine with GoldCorp, and just last week we closed the transaction after receiving all regulatory and shareholder approvals. Newmont GoldCorp is the world's leading gold business with the strongest portfolio of operating gold mines, projects and reserves in favorable mining jurisdictions. Underpinned by a proven and scalable operating model, we'll target 6 to 7 million ounces per year of sustainable gold production, and we expect to enhance annual revenues by another $1.5 billion through silver, zinc and copper production. We will have the financial flexibility needed to execute our capital priorities, deliver an industry-leading dividend and maintain an investment-grade balance sheet. We have a deep bench of accomplished business leaders and high-performing technical teams with extensive mining industry experience, and we will maintain industry leadership in environmental, social and governance performance. Beyond great assets, prospects and people, our value proposition is supported by our proven strategy and track record. We expect to generate $365 million in annual pre-tax savings through G&A synergies, supply chain efficiencies and full potential improvements. Taken together, these efforts hold the potential to deliver total value creation of $4.4 billion. We also expect to unlock further upside through portfolio optimization, project sequencing, exploration and divestments. As a result, Newmont Gold Corp. is set to deliver stable free cash flow from steady production and improving costs over a decade's long time horizon. Turning to our global portfolio on slide 7. Newmont Gold Corp.'s industry-leading portfolio is based in four regions where we have the stability and proven operating model to create value. With the additional assets in Canada, Argentina and Mexico and the Pueblo Viejo joint venture in the Dominican Republic, we now have the strongest portfolio of operating mines in favorable jurisdictions with 90% of reserves based in the Americas and Australia. Turning to our projects on slide 8. Newmont Gold Corp. has a robust project pipeline creating a foundation for steady production and cash flow for decades to come. This pipeline gives us significant flexibility and we will continue to advance only those projects that meet our minimum hurdle rate of 15% at a $1,200 gold price. The depth of this pipeline also allows us to optimize and sequence projects to ensure that capital is deployed effectively and efficiently based on value and risk. This is the same approach we've taken to successfully deliver 11 projects on four continents on or ahead of schedule and at or below budget over the last six years. Turning to our production profile on slide 9. Here's a look at Newmont Gold Corp.'s production through 2025. We are well positioned for the longer term and over the next seven years the combined portfolio is capable of producing 7 to 8 million ounces of gold annually with all in sustaining costs declining from $945 per ounce in 2019 to $830 per ounce in 2025. I would emphasize that we are still targeting production of 6 to 7 million ounces of gold annually and this outlook does not include the impact of potential divestitures or project optimization. Turning to the Nevada Joint Venture on slide 10. In March we entered into an implementation agreement with Barrick to form a joint venture that will combine our mining operations, assets, reserves and talent in Nevada. We believe this arrangement will generate long term value for all of our stakeholders by unlocking synergies, allowing profitable production to continue well into the future and creating opportunities for employees and other stakeholders through a broader unified mining enterprise in Nevada. Under the terms of the agreement Barrick and Newmont Gold Corp. will hold economic interests equal to .5% and .5% respectively. Barrick will operate the entity with overall management responsibility and will be subject to the supervision and direction of the Joint Ventures Board which will be comprised of three individuals appointed by Barrick along with Tom Palmer and myself. Collectively both companies will have equal representation on the Joint Ventures technical, financial and exploration advisory committees. Our teams have been meeting regularly to facilitate a smooth transition upon closing and ensure a successful partnership into the future. With that I'll turn it over to Nancy on slide 11 to discuss our financial performance.

Thanks Gary. Turning to slide 12 for the financial highlights. Compared to the prior year quarter we delivered revenue of $1.8 billion which was approximately flat despite lower gold price, adjusted net income of $176 million or 33 cents per diluted share and adjusted EBITDAF $687 million, an increase of 7%. Cash from continuing operations was $574 million and free cash flow was $349 million, primarily due to improvements in working capital. Turning to slide 13 for a review of earnings per share in more detail. First quarter gap net income from continuing operations was $113 million or 21 cents per diluted share. Primary adjustments included 11 cents related to transaction and integration costs from the Goldcorp acquisition and the Nevada joint venture. Four cents related to valuation allowances and other tax impacts and three cents primarily related to a change in the fair value of our investments and minor restructuring charges. Taking these adjustments into account we delivered adjusted net income of 33 cents per diluted share. Turning now to slide 14. We remain well positioned to execute our capital priorities including maintaining an investment grade credit profile, investing in the next generation of mines to improve margins and build a stronger reserve base and returning cash to shareholders. Newmont closed the first quarter with one of the strongest balance sheets in the gold sector and over the past month we've executed a number of key financing activities. We declared a first quarter dividend of 14 cents per share and announced a special dividend of 88 cents per share. The special dividend will be paid on May 1st to Newmont shareholders on record as of April 17th. We reset our five year $3 billion revolving credit facility creating a strong banking syndicate and providing for a solid slate of future financing partners. We completed a successful exchange of Goldcorp notes to Newmont and streamlined our capital structure and we paid off $1.25 billion of outstanding Goldcorp debt at closing. Looking forward, 2019 will involve some complex reporting updates as we work to integrate Goldcorp and close the Nevada Joint Venture. In the second quarter we will report consolidated Newmont Goldcorp financial results which will include Goldcorp's performance from the date of close. However it's worth noting the guidance we provided in March assumed a full year of Goldcorp production costs and capital. Impacts from the Nevada Joint Venture have yet to be fully determined but once the transaction is completed we will proportionately consolidate our ownership interest and report the entity as a separate segment in our financials. Despite the reporting changes you will see in 2019, Newmont Goldcorp is well positioned to continue a trajectory of industry leading financial performance by executing our capital priorities and staying focused on long term value creation. And now I'll hand it to Tom for discussion of our operations starting on slide 15.

Thanks Nancy. Turning to North America on slide 16. A North American operation has turned in a solid quarter after coming off a very strong fourth quarter and overcoming near term challenges. At Carlin we delivered steady performance and continued our remediation work at Gold Quarry. As previously stated we forecast the impact of geotechnical issues on Carlin's production to be approximately 70,000 ounces in 2019. However we expect to recover a proportion of these ounces over the medium term and we plan to start mining Chukar Underground at Gold Quarry again in June. During the second quarter, Mill 6 will complete its annual plan maintenance shut for approximately three weeks in May. At CCMV we completed the drawdown of stockpile concentrates for processing in Nevada and are running at more steady state production and inventory levels. And at Phoenix we started a shift into higher grade copper zones and away from higher grade gold zones in our mine sequence. Looking forward we remain focused on continued execution and finalising the Nevada Joint Adventure with Barrick as we begin to generate additional value through combining our assets. We are also advancing our studies of CCMV Underground and Galore Creek. Turning to South America on slide 17. At Yanacocha we continued mining higher grades from Tapado Estate Pit and at Mirian first quarter performance was impacted by wet weather but continued improvements in mine and mill productivity helped to offset this. We have reached fresh rock and although we expect variability in the amount of saprolite we process, the primary crusher will help to sustain mill throughput over the course of 2019. Ketchum Mines stripping continues on course and construction of the new leach pad is ongoing as we target commercial production in the fourth quarter of 2019. Once complete Yanacocha is expected to deliver approximately 200,000 ounces per year of consolidated production from 2020 to 2025 and serve as a bridge to developing the extensive sulphide deposits in the years ahead. Detailed engineering work for the Sulphides project continues and in March we achieved a significant milestone for the approval of the overall project's environmental impact assessment. Two subsequent approvals will be required prior to reaching a full funds decision in 2020. Turning to Australia on slide 18. At Tanami we delivered strong performance on the back of high grades and sustained mill improvements. As Gary mentioned, Tanami reached an impressive milestone in March and I'd like to congratulate the team for pouring the operation's 10 millionth ounce. At Boddington, stripping in the South Pit continues and we successfully completed the first of three planned mill maintenance shuts in 2019. KCGM continues to manage geotechnical challenges whilst we draw down stockpiles to help offset reduced ex-pit mining. Mining in the Morrison starter pit is underway. We expect to reach higher grades in the second half of the year, helping to sustain operations as we work to optimise our longer term mine plans. That will continue through most of 2019. Looking forward, study work for Tanami expansion 2 continues to advance towards a full funds decision later this year and shaft sinking has progressed beyond 90 metres. Turning to our latest investment on slide 19. In March the Tanami Power Project was commissioned safely and on schedule. The project included the installation of a 450km natural gas pipeline, two power stations and an interconnected power line. Transitioning the site from diesel to natural gas provides a reliable energy source, lowering power costs and carbon emissions by 20% while paving the way to further extend Tanami's mine life. And the project is expected to generate net cash savings of $34 per ounce from 2019 to 2023 and deliver an internal rate of return of greater than 50%. Tanami is Australia's second largest underground gold mine and we expect it to remain a cornerstone asset in the Newmont Gold Corp portfolio for decades to come. Turning to Africa on slide 20. The Africa region yet again delivered another strong quarter. At a team, the mill continues to perform well on the back of sustained full potential improvements. And at a half hour improved performance was driven by higher grades from both the Sabika underground and Open Pit. The half hour mill expansion remains on track to achieve commercial production in the fourth quarter and once completed will increase production, lower costs and extend mine life at a half hour. We are reaching the peak construction workforce on site and remain focused on safely completing the construction of the stockpile feed conveyor, SAG mill, primary crusher and leach tanks. In the second quarter, we expect to make a full funds decision for the Iwonsu layback an extension of the current mining operations that will take open pit mine life at a half hour through to 2029. A half hour's performance is expected to continue improving throughout 2019 and they remain on track to deliver a record year. Finally, we continue to advance our regional growth studies and are working to prioritise our many opportunities on a value versus risk basis. Turning to slide 21 for an update on the Goldcorp assets and their integration work. During the first quarter, Goldcorp operations performed as expected with the Borden project at Porcupine on schedule to achieve commercial production in the second half of 2019 and the Pyrate leach project running well with overall recoveries trending higher in Askeeto. And at Red Lake, the Coshinawil project achieved commercial production on April 1st and is expected to contribute approximately 30,000 ounces in 2019. We expect a back half-weighted 2019 for the Goldcorp assets driven by reaching higher grades at both Penaskeeto and Serenegro. However, recent events have created headwinds to achieving Goldcorp's previously forecasted production levels. At Musselwhite, our team is conducting a thorough investigation into the conveyor fire which occurred on March 29. We are also working to establish full access to the mine which is expected to occur over the next two months. As a result, the materials handling project work is currently suspended and will provide additional updates on project timing and impacts to production as information becomes available. At Penaskeeto, we are engaged in active dialogue to successfully resolve an ongoing partial blockade of the site by a group of local stakeholders. During this process, the site has maintained planned production levels through the mill and we expect minimal impacts to 2019 production. But overall mining rates have been reduced. Turning to our integration efforts which are well underway. In March, we announced Newmont Goldcorp's executive leadership team, featuring accomplished mining leaders who are appointed based on a number of criteria including experience, team performance and values based leadership. Most of the changes will take place over the coming months to allow for a seamless transition process through the fourth quarter when I'll succeed Gary as President and Chief Executive Officer. Rob Atkinson will join us on June 1 as Chief Operating Officer leading our operations and projects team which includes our four regional Senior Vice Presidents. These four individuals were appointed based on their exceptional track records of leadership, project execution and commitment to safety and sustainability. Todd White who previously served as Chief Operating Officer for Goldcorp will lead Newmont Goldcorp's new North America region with accountability for our four mines in Canada, CCMV in the US and Penaskeeto in Mexico. After three years successfully leading our Africa region, Alvain Pretorius will move across to lead our South America region with accountability for the Cerro Negro, Mirian and Yanacocha operations. Francois Hardy who is a 16 year veteran with Newmont and led the very successful turnaround of our Tanami mine in Australia from 2012 to 2018 and is currently leading our project development work in Australia has been promoted to replace Alvain as regional Senior Vice President of our Africa region with accountability for our Haafo and Achim operations. And finally Alex Bates, the regional Senior Vice President of our Australia region who has overseen improvements at our Tanami, Boddington and Casey Gem operations will continue in his current capacity. Now that we have appointed all of the senior leaders the next step will be to launch our full potential continuous improvement program at our newly acquired Goldcorp assets starting at Penaskeeto in June and progressing to Cerro Negro and Eleanor over the second half of 2019. Full potential will have a laser focus on the key value drivers for each location however we expect the greatest overall value potential to be in processing improvements which will concentrate on productivity, reliability and cost efficiency. Our teams have been working diligently to begin delivering GNA savings by removing duplication in the areas of labour and consulting services and we're also pursuing near term supply chain efficiencies which include the initial consolidation of supply contracts and utilising our scale to improve global purchasing power. I'm very excited to have the Newmont Goldcorp leadership team in place with highly capable people focused on generating long term value. With that I'll hand it back to Gary to wrap up on slide 22. Thanks Tom.

Turning to slide 23. Newmont delivered solid first quarter results and laid the groundwork for an even stronger future for Newmont Goldcorp. Our focus remains on generating long term value for our shareholders. We will do this by continuing to execute our strategy which is to deliver superior operational excellence by focusing on safety and a culture of continuous improvement. Sustain a global portfolio of long life assets by investing in the next generation of minds, technology and leaders across our business. And to lead the gold sector in profitability and responsibility by maintaining high standards and respectful relationships with all of our stakeholders. Thank you for your time and with that I'll turn it over to the operator to open the line for questions.

Thank you. We will now begin the question and answer session. To ask a question you may press star then one on your touch tone phone. If you are using a speaker phone please pick up your handset before pressing the keys. To withdraw your question please press star then two. At this time we will pause for a moment to assemble our roster. Our first question today will come from Fahad Tarek of Credit Suisse. Please go ahead.

Hi, good morning. Thanks for taking my question. On slide 21 you talk a little bit about Goldcorp. Because we don't have any operational results from Q1, can you give some more colour on specifically muscle white with the underground fire and Cerro Negro with the strike, how that impacted Q1 production and any other colour you can give on Q1 that would be really helpful.

That's Tom here. For Cerro Negro the partial blockade hasn't had any impact on Q1 production. So we've, sorry not Cerro Negro, Penisquito, excuse me, hasn't had any impact on Q1 production. We've been able to continue to run the mill as we work through that matter. And the fire at muscle white occurred at the very end of the first quarter. So it's still a fairly recent event that we're working through to understand work methods to come back in and remediate the areas that were damaged by the fire and to do the rectification work. So it's still very early days there but from a Q1 perspective neither of those issues have an impact on Goldcorp's performance.

Thank you.

Thanks for having me. The next question will come from Chris Terry of Deutsche Bank. Please go ahead.

Hi Gary, Tom and Nancy. A few questions from me. The first one just around the integration of the Goldcorp assets, how do you think about getting the right speed there where you can make changes but not I guess be too hasty? Will you start making changes at the asset level before giving the overall guidance? And then what is the timing that we should expect where you'll come out with revised estimates for the total company including the new Goldcorp assets? Thanks, that's my first question.

I'll take the last question and I'll hand the first question back over to Tom. In terms of guidance, the plan would be when we announce our second quarter results in July we'd update the Newmont Goldcorp guidance. As a reminder, that wouldn't include changes that might be impacting guidance from the Nevada JV that we'll take on board once that gets established moving forward. In terms of integration, a lot of work going on on the integration front and has been now for well over two months and I'll hand over to Tom on the details of the work that's going on there.

Thanks, Gary. Morning, Chris. The six Goldcorp assets, in effect there's no change for those six assets. The six general managers remain in place. We'll have five of those assets report through to Todd White as our new North American regional senior vice president. Terre Negre will report through to Alvane Pretorius as our new South America regional senior vice president. We expect that those operations to continue to run under the leadership of those various general managers and regional senior vice presidents. Where you'll see Newmont's impact is as we come in and start to go through our rigorous application of our full potential program, which is a very structured process that takes place over a couple of months of diagnosis and setting up delivery plans. And then there's normally an 18 to 24 month delivery program coming out of that diagnostic work. We'll start in June of Penasquito. We'll move through to Serenegro and then through to Eleanor and I've had full potential up and running at three of the six sites before we complete this year.

Okay, thanks, Tom. And then just on slide nine, the overall production guidance, the six to seven million ounces overall, that really, just to reiterate, that's the medium term. You still can expect the 2019, maybe 2020, et cetera, you're still above that line. Just wanted you to color on the first year where you'd be in that range. I appreciate it. It obviously depends on divestments as well, but just some comments there. Thanks.

Sure thing. And as we said, this did not exclude basically what Goldcarp's production was through April 17th of this year. So we'll be addressing that as we go through and have a full 12 months of that production in 2020. This had 12 months for 2019 and it won't be that high. The other thing it doesn't have is any changes as a result of the Nevada Joint Venture and what might occur due to further project optimization and asset optimization, including potential divestments. So I would stay tuned for what we give in terms of an update in July. Chris, once we have further details to provide on the Goldcarp piece.

OK, thanks. And the last one from me, just in terms of the full potential program specifically on the Goldcarp assets, how much of that is cost out itself? You talked about throughput and efficiencies, et cetera. What are the cost opportunities?

Yeah, the vast majority of the benefits are going to come from processing and then mining improvements and then cost outs is sort of going to come from support and other improvements. It's a relatively small percentage. If you go back to some of our material we've posted on the website that details that, you can see a pie chart that breaks out those six assets and the contributions from processing, mining, support and other. Where you see the contributions from processing and mining, a lot of that is going to come from improved productivity and reliability as opposed to cost out.

OK, thanks. Thanks, Tom. That's it from me. Thanks, Chris.

Our next question will come from John Bridges of JP Morgan. Please go ahead.

Morning, Gary, Nancy, Tom. Thanks for taking the question. I was just wondering now that the contracts are all signed, whether you had, you know, if you could sort of talk about surprises, positive, negative that you've picked up as you've been looking at the Goldcorp assets that you've acquired?

John, it's Tom here. No surprises. Our due diligence and subsequent work we've done to prepare for integration is all holding firm. We remain very excited about what we can bring to improve those assets under a Newmont operating model. And the other thing that is proven as through the integration process is the alignment between the two cultures at Newmont and Goldcorp. I've been, over the course of my career, involved in a number of integration exercises. This has been, by far and away, the smoothest integration exercise. We moved through day one last week without a blip, and I think that's a credit to both the teams at Newmont and Goldcorp and a reflection on the alignment between the two cultures of our organisations.

OK, great. Just sort of a follow-up. I didn't see any mention, although it's early stage, of the Colombian assets that I remember being added as a sort of risk, you know, to add a little spice to the portfolio. You know, now that you're differentiating yourself as being a lower-risk gold mining alternative, where do you think Colombia fits, or does it fit, in the new portfolio?

Thanks, John. I'm going to hand over to Randy Engel to cover that.

Hi, John. Thanks for the question. John, we still think there's very good potential in Colombia. We view it as a long-term opportunity for us, and as we step back and take a look at the entire portfolio, we will be, of course, looking at the exploration potential of Colombia relative to all other regions out there.

Yeah, OK. That asset's going to need some funding shortly, isn't it?

Yeah, it will. It will need ongoing funding as they continue to ramp up toward production.

OK, cool. Thanks, guys. Good luck. Well done.

Thanks, John.

Once again, ladies and gentlemen, if you would like to ask a question, please press star and then one. The next question will come from Greg Barnes of TD Securities. Please go ahead.

Thank you, Tom. I think it's a question for you. 365 million synergies. I think the impression was always that that would be a number that could be achieved relatively quickly, but what kind of ramp-up do you expect? What run rate should we be looking for over the next couple of years and towards getting to that number?

Thanks for the question, Greg. It's... We'll certainly get through the three Goldcorp sites that have the greatest value contribution. So we're predicting in that 365 penaschito to be 50 million, Serenegro 35 and Eleonore 25. We'll have been through our diagnostic process and be delivering value from the full potential work before the end of the year at each of those three sites and then rolling through into the remaining three sites in the first part of 2020. So we will, through our full potential process, you'll identify quick wins and so you'd expect to start to see value coming from that. There'll be some other activities that might take the order of 12 to 18 months through the full potential program. Then in terms of other synergies, the $100 million for GNA, that will come very quickly in terms of rationalising. In fact, we're well down the path of rationalising the workforce between Vancouver and Denver and so on and so forth and then the non-labour costs that come from that. We are actively involved in starting to get some of the supply chain efficiencies coming through. So we will start to see run rates starting immediately. It will ramp up as we roll out full potential over the course of the next 12 months across the six Goldcorp assets.

Could I imply that by, let's say, the end of 2020, you think you'll be close to or at that full run rate, 365 million?

I think that's a very good estimate to make,

Greg. And just cycle back to Muscleweight. How serious was that fire? I'm hearing numbers out there like you could be not back in the mine fully operational until six months from now.

It's still early days. It was a serious fire. Any conveyor fire underground is serious. Fortunately, it occurred at a shift change. There was no one underground. The fire was contained. But you have to go through, when you have an underground fire that involves a conveyor system, you've got to go through a very robust process to understand how you access that area, understand the work to rehabilitate the tunnel and then to remove the damaged conveyor, both burnt rubber and conveyor structure. So the team there are currently working through, in parallel with the investigation, a work method to be able to remediate both the tunnel and to remove the damaged equipment. It's still early days to understand that remediation method and then how we might be able to then work through that conveyor tunnel and affect those repairs. It's just too early, Greg, to make an estimate of how long that will take. Okay. Okay. Thanks, Tom.

The next question will come from Tanya Jakosonic of Deutsche Bank. Please go ahead.

Great. It's Tanya from Scotiabank. Thank you.

Yeah. You're always moving banks, Tanya.

I know. I know. One day I'll be at BMO and Royal too. Okay. I just wanted to come back to a technical question for Tom and then a financial for Nancy. Just, Tom, you know, and again, we didn't have the Goldcorp numbers, but do you have a sense at least on Muscle White what the guidance would have been for the year without this fire? So we at least would know what Q1 was like and what was the guidance for the year so we could take a stab at what we think could happen at the facet?

I think it's still early days for us to be able to sort of give you that sort of guidance. I'd hope by the time we come out with our second quarter results we'll be able to give you a better direction and we'll have greater clarity on the remaining... Oh, yeah. No worries

on that, Tom. What was the guide? What did Muscle White do in Q1 and what was the original guidance for the year for Muscle White for 2019? Yeah,

the issue with Muscle White is that the materials handling system was an important part of their production for this year and that will be delayed in ramping up in the second half. So that's why it's something that we need to work our way through. And

back to the core of your question, it was a little over 200,000 ounces was what was planned for the full year out of a Muscle White tangent just to give you a flavour. So even if you took that out of our overall guidance, it's pretty small.

Yeah, no, and I just wondered if we had similar production in Q4-2018 would have been similar to Q1 just for us to play around with that number. Okay, I'll play around with it. Just looking then, Tom, at any of the other Gold Corp assets, you said all of the other ones performed in line for Q1. You flagged that Penasquito and Sierra Negro, the grades are ramping up so better second half of the year. Are there any other assets, Borden coming in commercial, are there any other assets that we should be, you want to flag to our attention within the Gold Corp portfolio that may differ from that guidance that was originally put out?

No, there isn't, Tanya. There's no other, everything's pretty consistent with what they had provided.

Okay, that's helpful. And maybe then just for Nancy, just coming in, you mentioned to look at everything from April 17th for the guidance for Gold Corp. Obviously on the Barrick joint venture side on Nevada, it would be your share from when the deal closes. Can I just ask, besides that from an operational standpoint, what other costs do we look at for yourself that we may be incurring in Q2 that we haven't thought about? We obviously have the goodwill allocation. That we'll take a stab at that. Are there any other costs that we should be factoring in or accounting that would have an impact in our forecast?

Yeah, from an accounting perspective, you've got it right. There will certainly be some noise in the system around the timing of these various transactions and the changes in reporting fundamentally will be the biggest piece of that and then certainly we'll have integration costs for both of the transactions which will report to you and then those will be adjusted out for earnings purposes. But yeah, fundamentally we'll be very transparent about those, but there will be additional integration costs for sure and we will net everything out and then give you our best bridges to understanding both the impact of the Gold Corp transaction and then the Nevada joint venture when that concludes or when that closes.

Okay, we already have some integration costs, so how much more are we getting through to Q2? Do we have an idea there?

We really aren't in a position to give guidance on that, but we'll certainly report it and be transparent about it upon conclusion.

Okay, so more on Q2. And just on your Nevada joint venture with Barrick, costs will be reported differently. I would suspect you're under U.S. GAAP, they're under IFRS. Will adjustments have to be made for yourselves when we see those numbers?

Yes, absolutely. So Barrick will create the financial statements that underlie the joint venture. Those adjustments will be made and then we will report our share from a proportional consolidation basis and that will be a separate segment in Newmont's financial statement. So that's how you'll see that running through.

And then you'll adjust for your U.S. GAAP costs?

Correct. It will be reported under our standards.

Anything else different from that joint venture besides that to look forward to?

No, you know, we're still working with Barrick as you would imagine on how will we receive all of the financial information that comes through, but again, we'll report that to the best of our ability through as a separate segment. So you'll have good visibility to our 38 point whatever share of the entire venture. But I would say most of the information and guidance and financial results of the joint venture, you should look to Barrick for those.

Okay, and then maybe lastly, when will you be hosting your investor day so we have a lot more clarity on all of this?

We're still working to determine that date. Again, we are in the process today of absorbing and gathering all of our information for the combined Newmont Goldcorp entity. The piece of that we'll have to work for is getting the very material impacts of the Nevada JV. That will be something Barrick will compile. Once we feel like we're in a position to have all of those data points, we would want to provide a very complete picture to the marketplace. So that will sort of TBD based on when we believe we'll have best information on the Nevada JV.

Okay, that's helpful. Thank you very much.

The next question will come from Stephen Walker of RBC Capital Markets. Please go ahead.

Great. Thank you. Good morning. Just a question, Tom, if you would. At Penasquito, the blockage, the roadblock, the disruption around the gate, can you talk a little bit about what triggered that and kind of how the discussions are going? My understanding there's an issue with water or materials handling or some, there was some sort of catalyst that triggered that blockage around, I believe it was water?

Yes. Morning, Stephen. It's a complex issue and it's an issue that sort of covers some community members from a local community with some concerns around water and some issues around a trucking contractor. So it's a complex issue in that it involves a couple of issues coming together. The blockade is partial and the discussions taking place with those folks are very active and I think I'm quite positive that they'll work through to a sensible resolution in the near term. So it's a complex issue. It's a contractor and some community issues and I think our team on the ground there working with local authorities and those stakeholders are actively working through a resolution of those matters.

And just as a follow up, I know that there was a negotiation to get access to water or transport water over properties. Is it just a revisiting of those previous issues with the landholders or is there something more serious with respect to water material handling? I guess water sourcing or water effluent that may be escaping. Is it use of

water or is it water that's... No new issues, Stephen. So it's associated with supply of water rather than issues with water quality or anything like that. Perfect. Okay. Thank you, Tom.

The next question will come from Michael Dudas of Vertical Research Partners. Please go ahead.

Good morning, gentlemen. Nancy, for Gary and Tom, maybe you could share a little bit relative to your initial expectations going into the joint venture with Barrick in Nevada and some of the meetings you've had on the board level with them. Have expectations been met, exceeded? How do you think about that relative to the joint venture guys have created finally?

I think it's still early days, Michael, Gary here, as we work very closely with Barrick in terms of items in regards to integration, how you bring the two workforces together has been a big focus. Right now I'd say we're moving as expected at this stage. Regular meetings, in fact it's been weekly meetings at the board level and meetings not just at the board level, a number of folks, whether it's financial folks, human resources, technical folks, as we work to help set this joint venture up with Barrick.

And my follow-up is when you think about certainly since January's announcement of the GoldCore transaction and your announcement of the vestiture potential in the range, have certainly a lot of phone calls back and forth. Do you feel like you can be patient on that front or is the marketplace any signals that can maybe generate some better interest and some opportunities here in the more near-intermediate term or is it just trying to get everything under control relative to the integration of both companies to kind of set up where that might be and how we could see those divestitures come through?

No, I think we gave that guidance back in January just to give a flavor that we weren't going to be locked on to any particular asset going forward. We want to make sure we understand the full potential of each of the assets, which is why we're going through the process to make sure we bring in our operating model and take a good look at each of the assets before we make any decisions to move ahead maybe too hastily on divestiture. So we continue to get inbounds as you suggest from a variety of different folks and we'll take those on board, but we want to really make sure that we understand the assets well before moving forward. And frankly, we didn't have any divestments built into our acquisition model as we went forward, so we're under no pressure to divest in any kind of a timeframe.

That makes sense, Gary. Thank you.

Thanks, Michael.

The next question will come from John Tomazos of John Tomazos Independent Research. Please go ahead.

Thank you very much. Could you provide a little more explanation of the 38 percent JV terms in Nevada with Barrick? It looks like it's proportional to gold reserves maybe giving a little credit for what's on the ground. It's not going to come at gold rush in Four Mile and at your Carlin Underground or Long Canyon without giving Newmont enough credit for maybe saving Barrick three-quarter billion for another roaster and the land, water rights and infrastructure of Newmont's bigger land position.

Well, thanks, John. I think quite simply the 38.5 percent versus 61.5 that we came up with was based on consensus NAV by a number of analysts and it took the median of those numbers and came up with that. You could have gone at it lots of different ways and as you know in the past we tried lots of different ways and never came to a landing. I think we came to a very successful landing both for Newmont and for Barrick here going forward. If there's additional reserves that are found on our property that aren't currently in a reserve resource, we have a one and a half percent NSR royalty that would get paid to either one of the parties. The one asset that was excluded by Barrick was Four Mile because that's one that they still continue to go through and hadn't taken to a point where they understand the reserve position so that has a process in which we can bring that into the joint venture going forward. I'm actually quite pleased with where we landed here and how we're bringing things forward and continue to work well with Barrick to bring this joint venture to reality in the next couple of months.

Thank you.

Ladies and gentlemen, this will conclude our question and answer session. At this time I'd like to turn the conference back over to Gary Goldberg for closing remarks.

Thank you for joining our call this morning. I'd really like to thank the entire Newmont Goldcorp team for their efforts to continue to deliver safe and strong business results. We look forward to providing you updates on Newmont Goldcorp, the world's leading gold company throughout the year. Thanks very much.

Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation. You may now disconnect your lines.