Newmont Corporation

Good morning and welcome to Newmont's second quarter 2020 earnings call. All participants will be in a 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 second quarter 2020 earnings conference call. Joining us on the call today are Tom Palmer, President and Chief Executive Officer, Rob Atkinson, Chief Operating Officer, and Nancy Beebe, 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 newmont.com. And now I'll turn it over to Tom on slide three.

Thanks, Jess. Good morning and thank you all for joining our call. Newmont continues to manage through the COVID pandemic from a position of strength and our diverse, balanced portfolio of world-class assets provide stable production with significant leverage to rising gold prices. Turning to slide four for a look at our second quarter highlights. Our resilient operating model supported the delivery of solid quarterly results despite the ongoing impacts of the COVID pandemic on our business. We safely resumed operations at Cerro Negro, Yanacocha, Eleanor, Penasquito and Musselwhite. the five sites placed into care and maintenance earlier this year. In the second quarter, we produced 1.3 million ounces of gold at all its sustaining costs of $1,097 per ounce. We generated operating cash flow of $668 million and free cash flow of $388 million. And we continued to safely advance project work at Tanami Expansion 2, to Beaker Underground and Musselwhite. Our investment-grade balance sheet, combined with liquidity of $6.7 billion, provides us with significant financial strength and flexibility. We ended the quarter with $3.8 billion of cash and have lowered our net debt to adjusted EBITDA ratio to 0.6 times. We declared a second quarter dividend of $0.25 per share which remains the highest yielding dividend among senior gold producers. It is also worth noting that over the last 18 months, Newmont has returned more than $2 billion to shareholders, demonstrating our track record of industry-leading returns. At Newmont, we have a fundamental belief that strong environmental, social and governance performance is not only the right thing to do, It is also an indicator of a well-managed business that delivers sustainable, long-term value for shareholders and other stakeholders. In June, we published our 16th Annual Sustainability Report, which details Newmont's strategy, approach, targets and performance related to material DSG issues, ranging from climate, water, tailings, value sharing and human rights, through to corporate governance, tax strategy, ethics and compliance. The report transparently covers what we have done well, where we have learned lessons and how we plan to improve. And I encourage you to take some time to read more about our efforts in this space by visiting the sustainability section of our website at newmont.com. Turning to slide five. Combined with our proven and resilient operating model, Newmont's deep bench of experienced leaders and mature systems remain a competitive advantage in these unprecedented times. We will continue to maintain our wide-ranging COVID protocols at all sites, ensuring that we keep the health, safety and wellbeing of our people and communities above all else. Whilst we have had employees and contractors test positive for the virus, our quarantine and contact tracing procedures have proven effective in mitigating the spread to other employees and local communities. Two weeks ago, I visited our Boddington operation in Western Australia. Even though Western Australia currently has no community spread of this virus, our robust controls remain in place at Boddington. It was great to experience firsthand the work all of our operations are doing to ensure that we do not lose focus on protecting our workforce and communities during this time. The confidence and pride at Boddington was very high and our team there is absolutely focused on safely delivering to their plans. I am incredibly proud of all of our employees for how they are overcoming the challenges we've faced this year with focus and resolve. Across the globe, we are finding new ways to move the business forward by better leveraging technology, fostering greater collaboration, and building a deep sense of community despite having to work apart. We're also strengthening our relationships with external stakeholders by embracing our core values of safety, sustainability, integrity, inclusion and responsibility in every engagement with them. Earlier this year, we established a $20 million global community support fund to assist host communities, governments and employees. With input from local stakeholders, we identified three focus areas, employee and community health, food security and local economic resilience. to ensure that our financial support will have the most positive impact and reach those who need it most. Our efforts have included the provision of personal protective equipment for frontline workers, the construction of an oxygen plant for a regional hospital, partnering with local food banks for families in need, and micro-lending and revolving loans for businesses in host communities. Sadly, one area we have seen significant need as a result of COVID is domestic violence. We have also partnered with agencies who serve women and children in need of safer environments. To date, we've distributed nearly $6 million with another $4 million in process pending completion of a governance process designed to ensure that the funds go where they are intended and are utilised effectively. We committed to managing our fund with collaboration and transparency, and you can find a regularly updated list of all recipient organisations on our website. These efforts will continue in the weeks and months to come so that our host communities can thrive long after this pandemic is behind us. Turning to a look at our global diverse portfolio on slide six, among Our 12 operating mines and two joint ventures, we have eight world-class assets, each of which deliver more than 500,000 ounces of consolidated production per year at all in sustaining costs of less than $900 per gold equivalent ounce and a mine life that exceeds 10 years. Importantly, all are located in top-tier jurisdictions. that we define as countries classified in the A and B ratings ranges by each of Moody's, S&P and Fitch. In addition to our eight existing world-class assets, Newmont has two emerging world-class assets with the Anacotia in Peru and Miriam in Suriname. These emerging assets within our portfolio offer upside through further optimisation and development over the coming years. We also have an unmatched project pipeline, with Tanami Expansion 2 being executed and both Aharfa North and Yanakocha Sulphides advancing towards full-funds decisions next year. It is from this foundation that we can create additional value as we optimize our longer-term projects and deliver decades of profitable production. Turning to slide seven. Our stable production profile will generate more than 6 million ounces of gold per year through to 2029. This decade-long production profile is underpinned by our eight world-class assets, our industry-leading exploration program, and our three key development projects, Tanamai II, which is in execution, along with Ahafa North and Yannikacha Sulfites. This profile is further enhanced with over $1.5 billion per year of additional revenue from producing between 1.2 to 1.4 million gold equivalent ounces from silver, lead and zinc at Penesquito and copper at Boddington. Combined, we will deliver well over 7 million gold equivalent ounces per year for the next decade, the most of any company in our industry. Turning to our free cash flow generation potential on slide eight. We expect to generate substantial free cash flow throughout the gold price cycle. For every $100 increase in gold price above our base assumption, Newmont delivers approximately $400 million of incremental attributable free cash flow per year. Using our conservative $1,200 gold price assumption, our base free cash flow would still total more than $5 billion over the next five years. And at current gold prices, our portfolio will generate more than $17 billion of free cash flow over that same timeframe. In addition, we have the potential for further upside with tailwinds from favourable oil prices and foreign currency exchange rates. Looking forward, we are well-positioned to continue executing our capital priorities and staying focused on long-term value creation. With that, I'll hand it over to Rob to discuss our operational performance on slide 9. Thanks, Tom.