Newmont Corporation

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Good morning and welcome to Newmont's full year and fourth quarter 2021 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 Tom Palmer, President and Chief Executive Officer. Please go ahead.

Good morning and thank you for joining Newmont's full year and fourth quarter 2021 earnings call. Today I'm joined by Rob Atkinson and Nancy Beazey, along with other members of our executive team. And we will be available to answer questions at the end of the call. Before I begin, please note our cautionary statement and refer to our SEC filings, which can be found on our website. Newmont delivered a strong finish to the year and has maintained its position as the world's leading gold company, with our unmatched portfolio of operations and projects in the most favourable mining jurisdictions. As we move into our next 100 years of sustainable and responsible mining, Newmont will continue to create long-term value for all of our stakeholders and differentiate ourselves through our clear strategic focus superior operational performance and an unwavering commitment to leading ESG practices. Turning to our highlights for 2021. UMON continued to operate from a position of strength in 2021, leveraging our scale and mine life to deliver strong ESG operational and financial performance. First and foremost, our focus has remained on protecting the health and wellbeing of our workforce and local communities as the world continues to grapple with the pandemic. We continue to be recognised for our leading ESG performance, building new pathways to decarbonisation and publishing our first climate strategy report. And during the fourth quarter, we safely commissioned the gold industry's first autonomous haul fleet at Boddington and formed an industry-leading strategic alliance with Caterpillar to achieve zero-emissions mining and support Newmont's climate initiatives. We finished the year strongly, meeting our updated four-year guidance and producing 16 ounces of gold at all its outstanding costs of $1,062 per ounce, and in addition produced 1.3 million gold-equivalent ounces from copper, silver, lead and zinc. These results generated $4.3 billion in cash from continuing operations and $2.6 billion in free cash flow, more than 99% of which is attributable to Newmont and available to execute on our balanced and disciplined capital allocation priorities. We refinanced near-term debt with the mining industry's first sustainability-linked bonds. preserving Newmont's financial strength and flexibility as we further align our financing strategy with our ESG commitments. In 2021, we returned $1.8 billion through our clear dividend framework and completed $525 million of share repurchases, leading the gold sector in shareholder returns. We also completed the acquisition of GT Gold, continued to advance our most profitable near-term projects. And two weeks ago, we announced the acquisition of Bonaventura's interest in Yanacocha, increasing Newmont's ownership in one of the largest and most productive gold mines in South America. We have successfully operated in Peru for more than 30 years. and we have a deep knowledge of Yanacocha and the value that it brings to Newmont stakeholders. Since 1993, Yanacocha has produced nearly 40 million ounces of gold. And similar to our acquisition of GT Gold in British Columbia's Golden Triangle, this transaction is in line with Newmont's strategy of district consolidation, enhancing our ownership of world-class assets in proven mining jurisdictions. Increasing our ownership in Yanacocha also means that Newmont is increasing our stake in the Salt Flies Project, which is the next exciting chapter in Yanacocha's long and profitable history. With a multi-decade mine life from just the first phase, this project will generate profitable production of more than 500,000 gold equivalent ounces per year at attractive oil and sustaining costs. Importantly, The metal produced from sulphides be approximately 45% gold, 45% copper and 10% silver, substantially increasing Newmont's copper position as the world transitions to a green economy. And looking ahead, we are already evaluating the second and third phases of the sulphides project, which have a potential to both increase production and extend mine life well beyond 2040. We are very fortunate to have had a strong partnership with Bonaventura over several decades and look forward to continuing to work with the people of the Kahamaka region and local agencies to sustainably and responsibly develop the next phases of Yanakocha's long life. Turning now to the strategic value that differentiates our portfolio. Each year, Newmont's portfolio of operations will produce more than 16 ounces of gold, along with nearly 2 million gold equivalent ounces from copper, silver, lead and zinc. Combined, that is nearly 8 million gold equivalent ounces per year for at least the next decade, the most of any company in our industry. At Newmont, we have created a robust and diverse portfolio of operations and projects around the globe. with the scale and mine life to deliver strong, long-term results. Among our 12 operating mines and two joint ventures, over 90% of our critical gold production comes from top-tier jurisdictions. And with the opportunity to acquire the outstanding 5% ownership in Yanakocha, 11 of our 12 managed operations will be 100% owned, ensuring that our stakeholders receive the full benefit from UMON's clear strategic focus and superior execution. Underpinning our portfolio is a robust foundation of reserves and resources. Including our recent acquisition of an increased interest in Yanacocha, UMON's reserve base now sits at 96 million ounces of gold and 68 million gold equivalent ounces from other metals, predominantly copper. We also offer substantial upside through a resource base of over 112 million ounces of gold and a further 112 million gold equivalent ounces from other metals, which includes almost 30 billion pounds of copper. Through our industry-leading organic project pipeline, we have multiple opportunities to increase copper production through the development of Yanacocha sulphides, Saddle North, North Abieto, Neva Union and Galore Creek, providing natural exposure to a metal of growing importance for reducing carbon emissions and facilitating ongoing transition to a new energy economy. Reserve replacement is a long-term process. And as Newmont has done for many years, we develop and implement plans that target replacing our annual depletion on average over time. In 2021, we replaced more than 80% of reserve depletion despite the challenges created by the pandemic. And it is important to note that this does not include the 3 million ounces of gold reserves we just acquired through our purchase of Bonaventura's interest in Yanacocha. At Newmont, we firmly believe that the COVID-19 vaccine is critical in combating the spread of the virus and preventing severe illness and death. As you can see in this slide, the vaccination rates at our managed operations exceed national rates in all of the jurisdictions in which we operate. We took the important step of deliberately moving towards a position where all of our global workforce will be required to be vaccinated. To support this, Newmont continues to deliver vaccination awareness programs while also working with local communities and governments to both provide and improve access to the vaccines. And one of the most meaningful contributions that our leaders have made in the fight against COVID-19 is the time that they have spent with their teams, holding individual meetings, answering difficult questions, coordinating facilitated sessions with health professionals and guiding our workforce as they make the important decision to protect themselves and their loved ones. We are very proud of the work we have done and we will continue to be a values-driven organisation that makes decisions that prioritise the health and safety of our workforce and local communities above all else. Over the first two months of this year, the Omicron surge has impacted our operations and the mining industry as a whole. Fortunately, due to our high vaccination status, the severity of any positive cases has been low. Our workforce remains healthy and we are well positioned as we emerge on the other side of this current surge. However, as a consequence of safely managing through this surge, we expect that our production results in the first quarter of 2022 could be impacted by as much as 150,000 ounces. Around one third of that impact is coming from our Canadian operations and Cripple Preconvicta, as flight capacity constraints at our fly-in, fly-out operations and close contact isolation protocols have impacted productivity. Another third comes from Africa, where we are experiencing COVID-related supply chain disruptions and global border closures, which are impacting the availability of skilled workers from Australia and the delivery of critical spares and equipment. And the final third comes from our operations in Australia, but we're seeing the impacts of productivity and labour availability as we adhere to interstate border closures and close contact isolation protocols. We are closely monitoring the reopening of the Western Australian border, which is currently planned for March 5th. And this may lead to a surge of cases impacting the mining industry in that state. However, the reopening of this border will also allow one third of our team of Tanami who live in Western Australia to now move freely between work and home for the first time in months. As we near the end of February, we are encouraged to see declining case counts and have reported only one hospitalisation associated with the Omicron surge. Despite the challenges presented by managing the Omicron surge, we remain on track to end the year within our guidance ranges. We expect that production and unit costs will substantially improve each quarter, with approximately 53% of our production weighted to the back half of this year, driven by Boddington, AHAFO, Cerro Negro and our Canadian operations. And with that, I'll turn it over to Rob and then Nancy for a more detailed look at our four-quarter performance. Over here, Rob. Thank you, Tom, and good morning, everyone. To echo what Tom said, the pandemic continues to present challenges across our operations and the mining industry as a whole. I'm very proud of the resilience of our people and our systems, and I'd like to recognize the very significant efforts that continue to be applied at all of our operations in order to keep our teams safe and healthy. Turning to the next slide, let's take a deeper look, starting with Australia. Tannermine delivered another strong performance in the fourth quarter, as higher grades and strong mill performance more than offset impacts to productivity from COVID. And despite a tightening labour market and heightened protocols, the team added more than 800,000 ounces in reserve editions through drilling. We expect Tannermine to remain a solid contributor throughout the year due to steady production and higher grade as we progress our investment in the second expansion of Tannermine. A project with the potential to extend mine life beyond 2040. The team continues to advance the construction of the head frame. Eighty percent of the nearly one mile deep shaft has now been reamed. And more than 80 percent of the project engineering procurement has been completed. An important step in locking in long lead time materials and limiting exposure to rising costs. At Boddington, we delivered the site's best quarterly performance of 2021, overcoming challenges encountered during the third quarter and reporting improved production and lower costs as the team reached higher gold and copper grades in the South Pit. We expect tons mined and grade to further improve starting in the second quarter with 52% of production expected in the second half of the year. I am very pleased to announce that the gold industry's first autonomous haulage fleet at Boddington has reached full productivity, increasing Orton's mind in the fourth quarter and positioning Boddington to deliver a strong performance this year. Early in 2020, our Newmont team came together with our partners at Caterpillar to plan, construct, test and deploy the gold sector's first fully autonomous haul truck fleet. Despite facing some challenges while fine-tuning this new technology to operate in a deep, open-pit mine for the first time, the Bonnington AHS project was completed on budget and in record time, a major accomplishment for Newmont and the industry as a whole. Today, our autonomous trucks are operating at parity with the conventional haul truck. and we have a deep pipeline of optimisation projects aimed at improving consistency, efficiency and productivity throughout the year. The introduction of this technology allowed the site to replace 41 conventional trucks with 36 autonomous vehicles, resulting in important safety improvements and substantial cost savings over the long term. Already, our AHS fleet has moved over 45 million tonnes of material, and these trucks have travelled more than 1 million kilometres, generating tremendous results so far. Vehicle damage has declined nearly 50% in 2021 compared to 2020, and tyre damage decreased 93% for more controlled and efficient haulage. But more importantly, we've reported zero injuries in the mine since going live in October last year. In addition to improving productivity, an autonomous haul fleet is fundamentally safer, removing the exposure to potential vehicle interactions and the risks associated with fatigue. In November, we took another step forward in the use of technology to improve mining. announcing a revolutionary strategic alliance with Caterpillar to deliver first-of-a-kind battery electric autonomous vehicles at Tannemine and at CC&V as we make progress towards achieving zero-emissions mining. We will look to leverage our team of experts within both Newmont and Caterpillar, along with the lessons that we learned at Barrington, as we continue to implement important improvements to safety and productivity throughout our portfolio while also building pathways to decarbonization. Shifting to North America, Penesquito delivered another strong quarter with sustained mill performance and higher gold grade. The site is expected to deliver lower gold production and steady coal product production this year due to the Plan 9 sequencing at the Penasco and the Chile-Colorado pit, combined with lower grade and harder ore coming from the Chile-Colorado pit. Stripping in the Penasco pit will continue through 2022, and the site will also begin stripping the next phase of the Chile-Colorado pit in the second half of the year. And in the first half of this year, Penasquito will increase capital spend as the site expands camp facilities, ensuring that our team members have the appropriate privacy and accommodation to get proper rest, as well as improving their ability to manage the spread of any future surges of COVID variants. Turning to our Canadian operations, Eleanor delivered solid fourth-quarter results due to improved ore tons mined in mill. In addition, the site added more than 800,000 ounces in reserves from drilling and favourable revisions. Muscle white generated the year's strongest quarterly performance from higher-grade mine and improved mill performance in the fourth quarter. and Porcupine delivered consistent fourth-quarter results as higher throughput and recovery rates helped to offset less hydrate that were being mined from Hoyle Pond. In addition, the site continues to advance the Pamore project, just 10 kilometers from our existing plant infrastructure. This project involves a significant layback of the Pamore pit and will extend mining at Porcupine through 2035. The Pallore pit will need to be dewatered as part of this project, and the concrete foundations for the associated water treatment plant have been completed. Study work is progressing as the project prepares for full funds approval in the second half of this year. And finally, at CC&V, the mine continued to experience lower grades and recoveries in the fourth quarter, in addition to lower labour availability due to COVID. Turning to Africa. A team delivered another solid performance in the fourth quarter from higher grades, sustained throughput and strong recoveries. The team has begun stripping the next layback, extending mine life and providing future optionality as we continue to evaluate underground and open pit growth opportunities. A HAPO delivered a strong finish to the year, having more than 400,000 ounces in reserve additions from drilling, and generating a 19 per cent production improvement over the prior quarter due to higher tons mined from the Sabica open pit, coupled with strong mill performance, which more than offset challenges with labour and equipment availability at our Sabica underground operation. These challenges were driven by Covid-related supply chain disruptions and international border closures at a time that we are ramping up sub-level shrinkage at Sabica underground Consequently, we are expecting production at Ahapo to be weighted around 60 per cent for the second half of this year, as we increase underground tonnes and reach higher grade. Finally, in Africa, we continue to advance our Ahapo North project. In the fourth quarter, we received the tailings storage facility and water infrastructure permits from the EPA. and we expect to gain full land access later this year, as we work together with local communities and regulators to develop this prolific ore body. Now, turning to South America. Marion remains a strong performer, delivering higher throughput and steady grade in the fourth quarter, while adding nearly 400,000 ounces in reserve editions, primarily from drilling at the Maraba open pit, Production is expected to slightly increase this year as ore grade continues to improve through the first half and the site continues to utilise an ore blending strategy to maintain strong mill performance. The Anacocha continues to deliver leach only production while we develop the first phase of the sulphides project. Early stage engineering continues to progress as the pandemic allows And accommodation facilities for the construction and full-time workforce are expected to be completed in the first half of the year as the site prepares for an investment decision in late 2022. And finally, productivity and performance continues to improve at Serenegro, as higher ore tons mined were partially offset by lower grade in the fourth quarter. We expect production this year to remain in line with 2021, with around 55% weighted toward the second half of the year. Our team continues to advance the San Marcos decline and the first wave of district expansions, which includes the development of the Marianas and eastern districts to extend operations beyond 2030 and provide a platform for further exploration and future waves of expansions. The drilling and earthworks contracts have been put in place, and Cerro Negro added more than 1.1 million ounces to reserves for drilling in the eastern district, more than offsetting revisions and reinforcing the growth potential in this highly prospective and under-explored gold district. We look forward to bringing you further updates about our progress at Cerro Negro as we bring this project for full funds approval next year. And with that, I'll turn it over to Nancy on the next slide.