Newmont Corporation

Good morning and welcome to Newmont's full year and fourth quarter 2020 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 Eric Kolbe, Vice President of Investor Relations and Communications. please go ahead.

Thank you and good morning. Welcome to Newmont's full year and fourth quarter 2020 earnings call. Joining us on the call today are Tom Palmer, President and Chief Executive Officer, Rob Atkinson, Chief Operating Officer, Nancy Beezy, Chief Financial Officer, and Randy Engel, Executive Vice President of Strategic Development. They will be available to answer questions at the end of the call along with other members of our executive team. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found at our website. And now I'll turn it over to Tom on slide three.

Thanks, Eric. Good morning and thank you all for joining our call. 2020 was a year of unprecedented challenges, but through it all, we remain focused on continuing to differentiate ourselves as the clear industry leader. And I'm proud to say that we have delivered record-breaking results as a consequence. Turning to slide four for a recap of our major achievements. The safety and wellbeing of our employees and local communities remains a fundamental principle of our company. Unfortunately, the world continues to grapple with the COVID-19 pandemic, And we remain disciplined in the application of the key health and safety protocols across our business. Despite the challenges of managing through an unprecedented pandemic, we achieved the best safety performance in our company's history. This was a result of having a clear focus on managing the fatality risks across our company. and ensuring that we have a consistent and rigorous approach to the application of critical controls required to manage these risks. We continue to lead the industry with our ESG practices, setting targets to reduce greenhouse gas emissions 30% by 2030 and achieve net zero carbon by 2050. We met full-year guidance, delivering more than 5.9 million ounces of attributable gold production at all in sustaining costs of $1,045 per ounce. In addition to this, we produced a further 1 million gold equivalent ounces from copper, silver, lead and zinc at all in sustaining costs of $858 per gold equivalent ounce. Last year, our 12 managed operations, supported by an integrated operating model and a culture of continuous improvement, delivered $790 million in cost and productivity improvements through our full potential program. We continue to maintain our discipline of improving margins at $1,200 per ounce, allowing us to capitalise on our significant leverage to higher gold prices and delivering record financial results. In 2020, we generated $3.6 billion in free cash flow, the highest in the industry and ended the year with $5.5 billion of cash on the balance sheet. The strength and stability of our business supports our industry-leading dividend framework. This framework provides our shareholders with the stability of a base annualised dividend of $1 per share, calibrated at a $1,200 gold price assumption, and the potential to receive 40 to 60% of the incremental free cash flow generated at gold prices above $1,200. Newmont continues to set the standard as the clear industry leader in shareholder returns, which we further differentiated with a 38% increase in our quarterly dividend that we announced yesterday. Bringing our quarterly dividend to 55 cents per share, and our annualised dividend rate to $2.20 per share. With this increase, our current dividend yield places us in the top 25 dividend players of the large-cap S&P 500. We also recently announced a new $1 billion share buyback program. This follows the $1 billion program we completed in the fourth quarter which reduced our total share count by $22 million at an average price of $45 per share. Our industry-leading dividend and share repurchase program are a reflection of our commitment to deliver industry-leading shareholders' returns whilst remaining focused on the financial strength and flexibility needed to create value throughout the price cycle. Shifting now to safety. I'd like to expand a bit more on our 2020 safety performance on slide five. Twelve months ago, I outlined a key change that we were making at Newmont around our safety measures. Stepping away from the mining industry's traditional use of lagging personal injury rates in our bonus programs to measures that are focused on managing the critical controls that must be in place at all times to prevent fatalities. At the time, I also challenged management teams and boards in our industry to follow our lead and shift the focus away from personal injury rates to measures that will lead to the creation of a fatality, injury and illness-free environment. So how did we go? During 2020, we completed over 70,000 interactions by leaders in the field that were focused on ensuring that the critical controls required to prevent a fatality are understood and being effectively managed by our team members exposed to these risks. As a consequence, I'm proud to report we reduced our significant potential events by 63% and achieved the lowest personal injury rates in our company's history. with a total recordable injury frequency rate of 0.33 per 200,000 hours worked. It is no coincidence that visible felt leadership focused on fatality prevention is driving a significant improvement in all of our safety metrics. Turning now to our portfolio on slide six. Among our 12 operating mines and two joint ventures, we have nine world-class assets. each of which delivers more than 500,000 gold equivalent ounces per year at all in sustaining costs of less than $900 per ounce and with 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 Moody's, S&P and Fitch. We firmly believe that we have the right size portfolio to generate sustainable returns from our world class, responsibly managed assets located in the best gold mining jurisdictions. As we described in some detail on our exploration webcast last week, our portfolio is enhanced by the gold industry's best exploration pipeline of greenfield and brownfield opportunities. This exploration portfolio is managed through our proven integrated operating model, which ensures our exploration teams work hand in hand with our projects and operations teams. One of the key benefits of this integration is that we do not reinvent the wheel and duplicate effort. With the majority of our exploration activities occurring near existing operations, we have familiarity not only with geology and terrain, but also the permitting, regulatory and community relationships surrounding each of our operations. Turning now to the reserve and resources underpinning our asset base on slide seven. All reserves are the lifeblood of a mining company, and replacing our reserves is critical to sustaining production. As we reported last week, we ended the year with 94 million ounces of gold reserves. Our team's ability to convert reserves and replace 80% of depletion in such a challenging year was truly remarkable. In addition to our reserves, we also offer substantial future upside through our resource base of over 101 million ounces of gold. And we are in the very fortunate position of also having significant exposure to other metals, including copper, silver, lead and zinc. These other metals are contributing substantial value to our portfolio today, generating solid cash flows each and every quarter from Penesquito and Boddington. Turning now to our stable long-term production profile on Slideake. Underpinned by our leading reserve base and exploration program, our portfolio will produce steady gold production of more than 6 billion ounces through until at least 2030. balanced across each of our four regions. This profile is further enhanced by the production of more than 1 million gold equivalent ounces from silver, lead and zinc at Penasquito and copper at Boddington and Yanacocha. Combined, we will deliver nearly 8 million gold equivalent ounces per year for the next decade, the most of any company in our industry. Then moving to slide nine for a look at our five-year guidance. As we shared in December, our five-year outlook shows that we will steadily increase attributable gold production to nearly 7 million ounces over the next five years. And our all-in sustaining costs will improve in 2021 to $970 per ounce and further improve to between $800 to $900 per ounce by 2024. as we get the benefit from our investments in autonomous haulage at Boddington, improved underground mining methods at Aharfo, the expansion at Tanami, the development of the Anacocha sulphides and a new mine at Aharfo North, as well as continuing to deliver sustainable value from full potential improvements across our portfolio of 12 managed operations. Turning now to our free cash flow generating potential on slide 10. Our balanced portfolio, combined with our disciplined and integrated operating model, provide significant leverage to high gold prices from the largest production and reserve base in the world. But every $100 increase in gold price above our base assumption Newmont delivers $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 $3.5 billion over the next five years. And at current gold prices, our portfolio would generate more than $15 billion of free cash flow over that same time frame. To be clear, this is free cash flow that is entirely attributable to Newmont's account, enabling us to provide industry-leading returns. With that, I'll hand it over to Rob to discuss our operational performance on slide 11.