Newmont Corporation

Good morning and welcome to the Newmont Gold Corp's third quarter 2019 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. 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 Gold Corp's third quarter 2019 earnings conference call. Joining us on the call today are Tom Palmer, President and Chief Executive Officer, Rob Atkinson, Chief Operating Officer, and Nancy Beze, Chief Financial 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 Tom on slide three.

Thanks, Jess, and thank you all for joining our call. It has been just over a month since I moved into the CEO role, and I'm very honored to be only the 10th CEO in Newmont Gold Corp's almost 100-year history. and I am very excited about the strength of our portfolio, the capability of our people and the opportunities we have in front of us to safely deliver superior value for all our stakeholders. Turning to the third quarter, we delivered solid performance and have made excellent progress in delivering on the value we promised to establish Newmont Gold Corp as the world's leading gold business. Recent highlights include completing three profitable projects on schedule and within budget, exceeding our commitments of value delivery from the Gold Corp acquisition through an acceleration of synergies and full potential improvements, closing the Nevada Gold Mines joint venture and contributing our Newmont Nevada assets in good order, and continuing to improve our safety performance and advancing our reputation for sustainability. Turning to the details on slide four. In the third quarter, we produced 1.6 million ounces of gold and all in sustaining costs of $987 per ounce, generating $1.1 billion in adjusted EBITDA and $365 million in free cash flow. We completed site visits to support the sales process for our Red Lake operation. We commissioned three projects in Borden, the Half O'Mill expansion and Ketchum, Maine, and we approved the Tanami Expansion 2 project. I'm pleased to report that we are exceeding our synergy targets from the Goldcorp acquisition, with run rate improvements expected to reach $240 million by the end of this year, including $60 million in quick wins from Penasquito and Cerro Negro alone. We also continue to lead the gold sector in stewardship. We declared a quarterly dividend of 14 cents per share putting us on course to return approximately $900 million to shareholders this year. We maintain a strong balance sheet with over $5 billion of liquidity, and we were recognised as the top gold miner by the Dow Jones Sustainability Index for our leading ESG performance. Leading mining companies have at their core an unwavering commitment to safety and sustainability. Turning to slide five. As Chief Executive Officer, you can expect from me a relentless focus on ensuring that everyone who works in our business can do so safely. Through our leadership and through the systems and processes we put in place to manage risk, there is nothing more important. My expectation is that everyone who works in our business understands the fatality risks associated with their work and are ensuring that the critical controls that are required to manage them are in place at all times. A robust safety culture is one that constantly reinforces key systems, safe behaviour and actively shares lessons learned from serious incidents. This is fundamental to the wellbeing of our people and underpins our operating performance. Turning to a look at our global portfolio on slide 6. We have the strongest and most sustainable portfolio in the industry. Our assets are located in the most balanced and favourable jurisdictions in the world with 14 operated mines and two non-operated joint ventures. With more than 90% of our reserves in the Americas and Australia, our global position provides an unmatched platform for near mine, brownfields and greenfield exploration. As announced in September, we have initiated a sales process for Red Lake and interested parties have now completed their site visits. We have also divested our position in the NIMBA iron ore project in Guinea and are strategically reviewing our equity investment portfolio. Turning to our industry leading project pipeline on slide 7, we have the deepest pipeline of world class projects in the gold industry. giving us significant project sequencing flexibility. We will continue to apply a disciplined and rigorous approach to optimise these projects and advance them through our investment system. Consistent project delivery and disciplined operational execution remain the cornerstones of our business and are central to creating long-term shareholder value. We have successfully delivered four projects on four continents and in the past month alone declared commercial production for three of these projects, Ketchamain, Yehafa Mill Expansion and Borden. Ketchamain was safely delivered on schedule and under budget and is on track to generate an internal rate of return of 15%, an improvement from 10% when we approved the project just two years ago. Our half-hour mill expansion was also brought online within budget for approximately $175 million, increasing mill capacity to nearly 10 million tonnes per annum, whilst adding 75,000 to 100,000 ounces per year of annual gold production from 2020 to 2024. And at Borden, we are extending the life of the porcupine complex and leading the advancement of safe and sustainable underground mining globally through state of the art health and safety controls, digital mining technologies and processes and low carbon emission vehicles. We have also continued to advance profitable growth. Last month our board unanimously approved moving the Tanami Expansion 2 project into the execution phase. We are very excited about this project's ability to extend life beyond 2040 at our world-class Tanami mine in our core Newmont region. This project also provides a platform for us to further explore a prolific mineral endowment at Tanami. We will provide further details on this project in the context of our long-term guidance at our webcast in December. For our two mid-term projects, Yannacocha Sulfides and Aharfo North, we continue to advance and optimise them through our definitive feasibility study work. Finally, looking at the earlier stage projects in our pipeline, we are taking a patient and deliberate approach to optimising and sequencing our larger projects, including Neva Union, Galore Creek and Norte Avierto. These projects will compete for future capital investment, so we are proactively engaging with our joint venture partners to ensure that the projects only advance after specific hurdles are achieved. Our robust project pipeline is a key differentiator in the gold industry and provides us with a solid pathway to steady production and cash flow generation for decades to come. Turning to slide 8 for a look at progress on the Goldcorp integration. I am very pleased with the pace at which we are delivering value from this acquisition. On the G&A front, we have both accelerated and increased the total synergies to $120 million per annum. This is $35 million and more than 40% higher than our initial $85 million commitment. For supply chain, our team is actively targeting value across several fronts, including quick wins through the extension of best pricing and rebates and leveraging our increased scale and volume to reduce our input costs. Our world-class exploration team has identified over $25 million of annual program efficiencies, a figure that wasn't considered in our initial commitment. Our full potential program is well and truly underway at the former Goldcorp operations. We are seeing the same improvement opportunities at these new operations to those that we have delivered from Newmont's assets over the last seven years. and we are able to accelerate value delivery by leveraging this experience. We launched full potential at Penesquito at the start of June and have had Newmont's strongest team on the ground supporting the site during their diagnose and design work. We have made excellent progress and the site is tracking to achieve $50 million in quick win improvements this year alone. Full potential has now moved into the deliver phase at Penesquito. At Cerro Negro, full potential was kicked off in July and the site is tracking to achieve $10 million in improvements that we also expect to achieve this year. In just six months since we acquired Goldcorp, we are exceeding our commitments and are tracking towards delivering $240 million in annual run rate improvements by the end of this year. This is two-thirds of the commitment we made for the end of 2021 after only six months. With that I'll turn it over to our Chief Operating Officer Rob Atkinson on slide 9 to review our operational performance.