Newmont Corporation

Good morning and welcome to Newmont's first quarter 2023 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 Tom Palmer, President and Chief Executive Officer, Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining Newmont's first quarter earnings call. Today I'm joined by Rob Atkinson and Brian Tabolt, along with other members of our executive leadership team, and we'll all 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 continues to lead the gold industry in safety, sustainability, profitable production and shareholder returns. Our solid first quarter performance is underpinned by our unmatched portfolio of world-class assets, our proven operating model, a balanced, disciplined approach to capital allocation, and most importantly, our values-driven commitment to leading sustainability practices. With a strong outlook, combined with the strength of our team and the quality of our assets, we remain on track to continue safely delivering long-term value to all of our stakeholders. During the first quarter, Newmont produced 1.3 million ounces of gold and 288,000 gold equivalent ounces from copper, silver, lead and zinc, generating nearly $1 billion in adjusted EBITDA and all in line with the expectations we provided in February for Q1. We continue to expect the gold production for this year will be weighted 55% to the second half, and we remain firmly on track to achieve our full-year guidance ranges. With $6.5 billion in total liquidity, we continue to maintain an investment-grade balance sheet providing the financial strength to sustain our business throughout the price cycle as we continue to invest in our most profitable growth projects and return cash to our shareholders. Through our established dividend framework, we declared a first quarter dividend of 40 cents per share, demonstrating both our ongoing commitment to shareholder returns and the confidence that we have in our business. During the first quarter, we further rationalize Newmont's portfolio with the sale of our interest in Triple Flag, generating $179 million in cash proceeds. And we remain on track to deliver an incremental $440 million of full potential cost of productivity improvements this year, a key part of Newmont's continued efforts to deliver stable production and strong margins from the industry's best portfolio of world-class assets. Our core values are safety, sustainability, integrity, inclusion, and responsibility. They have been developed and embedded over a long period of time and through multiple generations of leaders at Newmont. Together, they are fundamental to how we run our business, where we choose to operate, and how we conduct ourselves on a daily basis. Last week, Newmont launched our 19th annual sustainability report, and our second, annual taxes and royalties contribution report, providing a detailed and transparent look at our values-driven approach to sustainability and an overview of our tax strategy and economic contributions. And next month, we will issue our third annual climate report, outlining Newman's climate-related risks and opportunities, our strategic planning around various climate change scenarios, and the specific actions we are taking to reduce our carbon footprint. Each of these reports are part of a robust set that detail our company's management of the sustainability areas that matter most to our stakeholders and to our business. At the very core of Newmont's leading sustainability practices is our commitment to driving a fatality, injury and illness-free workplace. And this begins with a disciplined laser focus on safety fundamentals. In the first quarter, we completed more than 172,000 interactions by leaders in the field that were focused on the critical controls that must be in place at all times to prevent fatalities. To highlight one of the direct consequences of this work, compared to the same quarter last year, in Q1, we experienced a 56% reduction in potentially fatal incidents, or what we call significant potential events. This improvement could not have been achieved without our dedicated workforce and the supporting systems that we have in place to maintain and improve our safety culture. Last month, we recognized several members of our team through our annual CEO Safety Awards. Acknowledging those teams and individuals that set the standard for high quality health and safety practices. From a pool of over 50 nominees, we selected winners in three categories. Safe leader, safe team and partner in safety. We are really proud to be able to recognise the dedication demonstrated by our team members each and every day. We are also proud of our heritage as a values-driven organization with a clear purpose. We have learned that achieving our purpose requires strong governance and a commitment to accountability and transparency. As part of that commitment, Newmont has been disclosing our sustainability performance since 2004. Among the key highlights shown on this slide from our 2022 sustainability report is one of the most important focus areas for the mining industry today, creating a safe, healthy and equitable workplace, one that values our differences and ensures that everyone feels safe and is safe working at Newmont. Over the last 18 months, the mining industry has come under significant scrutiny following a West Australian parliamentary inquiry into issues of sexism, racism harassment and bullying in the workplace. I'm disappointed to acknowledge that Newmont is not immune to this unacceptable behaviour that is taking place in workplaces across the world. And it is vital that as leaders we make sustainable changes to address and eliminate these behaviours. To manage our response, last year I appointed a senior operational leader reporting directly to me and tasked with listening to our workforce to better understand what is being experienced so that we can make lasting and meaningful change. Over the last few months, more than 1,000 people have provided thoughtful feedback and personal experiences through 100 focus groups and more than 150 one-on-one interviews, assisting us in understanding the extent, nature and root cause of these behaviours in our organisation. We will remain transparent in our acknowledgement of these behaviours and have provided an overview of the emerging themes from these conversations in our annual sustainability report. This ask and listen process is helping us to identify the improvements required in our systems, the symbolic actions that we can take and our changes in our leadership behaviours that will drive a sustainable change in our workplaces. I'll now turn it over to Rob and then Brian to take us through each of our operations and key development projects, along with a review of our quarterly financial highlights. Then I'll wrap up with a brief update on our proposed acquisition of Newcrest. Over to you, Rob.

Thank you, Tom, and good morning, everyone. Since the start of the year, I visited three of our four regions in Newmont. I spent underground with the team at Tannemine, reviewing the status of our expansion project at this world-class asset with Mia Gause, our Senior Vice President in Australia, and our experienced leadership team. I travelled to Ghana to see first-hand the progress at our Sabika underground mine and our Half O'North project with Dave Thornton. And I also traveled to each one of our sites in Canada, Eleanor, Musselwhite, and Porcupine to review the productivity improvements we are achieving under the leadership of our North American Senior Vice President, Bernard Vessels. And as Tom just described, our site and regional leaders are very focused on safely delivering their plans whilst continually working to create a safe and inclusive environment for each person working at our operations. So turning to the next slide, let's begin with an update from South America. Penesquito continues to deliver strong meal performance, largely due to the implementation of our full potential program over the last four years and with the ongoing support from our operations support networks. With more than $300 million in annual synergies from processing improvements alone, our team has been hard at work further debottlenecking Penesquito's processing circuit. improving flotation and filtering capacity, as well as optimizing maintenance schedules to increase mill availability. And as a direct result, Penesquito processed 9.9 million tons in the first quarter, putting us on track to mill an impressive 37 million tons of ore in 2023. Mining continues in the Chile, Colorado pit as planned. And whilst gold production was lower when compared to the fourth quarter, it was completely in line with the expectations that we had previously communicated due to mine sequence at this very large polymetallic mine. Linked to this sequence, coal production was strong this quarter, generating $266 million in revenue due to higher silver, lead, and zinc grades being delivered from the Chile-Colorado pitch. And also, please note that 55,000 gold equivalent ounces and finished goods inventory of Penasquito was built up at the end of the quarter as a result of planned timing on concentrate shipments. This concentrate has since been sold and the revenue will be realized in the second quarter. Also in Q2, we expect both gold and silver grades to decline by around 10% compared to Q1 due to the planned mining sequence with the full expectation that higher silver, zinc and lead grades in the second half and resulting gold equivalent ounces will offset the planned lower gold grades in 2023. We expect gold and coal product production of Penasquito to be weighted around 55% to the second half of this year. Turning to our leach-only operations in Peru, Yanacocha delivered steady results in the first quarter. Production is expected to increase by more than 20% beginning in the second quarter when we start to realize the benefits from our continued use of our injection leaching technology combined with our re-leaching programs. At Merion, our team has begun the planned stripping of the next layback in the Merion pit. And as reflected in our guidance, this will result in higher waste tons being mined and lower ore tons and ore grade being processed this year. And finally, in Argentina, Cerro Negro delivered another solid quarter. due to higher underground mining rates and mill throughput. Gold production is expected to steadily increase each quarter from a combination of sustained productivity improvements and the progression of the first wave of our district expansions at Cerro Negro. We anticipate production will be weighted around 56% to the second half of this year, with the site on track to add high-grade ounces from San Marcos beginning in the third quarter. Now, turning to Australia. Boddington continued its momentum from the fourth quarter, delivering strong gold and copper production in the first quarter, whilst also completing a planned seven-day preventative maintenance shutdown of the processing plant. And as we look ahead, the site is expected to deliver improved results during the second quarter, supported by steady ore grades and strong mill performance. And as we ramp up waste stripping in the South Pit in the second half of the year, we expect to increase total material mints around 20 million tons per quarter, helping to maintain steady gold and copper production, despite planned lower ore grades being delivered to the mill. Now moving up to tannamite, and as previously discussed, the Northern Territory in Australia experienced record wet weather and associated extensive flooding during late 2022 and the start of 2023. which resulted in the complete closure of the main access route for supplies to Tannamine from late December, with the Tannamine track only being fully reopened and able to transport normal loads in late February. As described during our last earnings call, this road closure impacted our ability to move key consumables to site, resulting in the depletion of all of our wet weather stocks on site and the cessation of milling operations and gold production However, during this period, our team remained agile and responded to this event with mining operations continuing and ore being stockpiled in front of the mill. Scheduled maintenance was moved forward to reduce downtime in subsequent quarters, and in partnership with the Northern Territory Government and local contractors, we successfully repaired and reopened the Tannamine track. Due to these efforts, Tannermine expects to recover most of the ounces from this event over the course of 2023 and is on track to more than double gold production in the second quarter. It's also important to note that all of our key consumable stocks at site have returned to normal operating levels and we have continued to progress our second expansion at Tannermine. The team has now completed more than 565 metres of the concrete shaft line workforce. And despite the temporary closure of the main access route during the first quarter, the project remains on track to deliver significant ounce and cost improvements in the second half of 2025. And now moving to Africa. A team delivered lower ore grade in the first quarter as our team commenced stripping of the next layback in line with the expectations previously communicated. Strip ratios will remain high throughout the years planned with stronger gold production expected in the second and third quarters due to higher grades coming through. At Ahafo, we delivered a solid quarter, as strong mining rates and plant throughput partially offset lower grades due to planned underground rehabilitation that impacted access to high-grade material at the Sabika Underground. During Q1, the site experienced a conveyor failure that impacted one of the two conveyor systems was able to put a system in place to bypass the conveyor and offset any impact to production. As a result, AHAFO remains on track to achieve its annual guidance range, with steady increases to production each quarter still expected, as we open up additional draw points in the Sabika Underground. We anticipate goal production at AHAFO will be weighted around 60% to the second half of this year, due to higher mining rates and the delivery of more high-grade ore to the mill over the course of the year. Our AHAFO North project continues to progress well, with approximately 85% of the total land area available for construction. And as you can see in the photo on this slide, we have transported a large portion of the necessary civil construction and mining equipment from AHAFO South to AHAFO North as we prepare to develop the Ghana now moving across to North America as discussed during our last earnings call our North American operations have made tremendous progress due to the guidance from our experienced team of leaders the strength of our integrated operating model and the support from our proven full potential program starting with CCMV our leech only operation remains a solid contributor with slightly lower production compared to the previous quarter due to waste stripping in the Globe Hill pit as planned. At Eleanor, the site delivered another strong quarter, driven by improved mining rates and mill performance compared to the fourth quarter. And these improvements, combined with the progress we have made in workforce stability, will enable Eleanor to continue generating steady production levels throughout the year, more than offsetting planned lower ore grade. Musselwhite delivered lower ore grade and mining rates compared to the fourth quarter, as the team focused on backfill activities to expose higher grade stopes. And when combined with the efficiency improvements achieved through double lift stoping, Musselwhite is expected to deliver increased production each quarter in 2023, with nearly 56% of production anticipated in the second half of the year. And finally, Porcupine delivered higher ore grade and improved tons mined, largely offsetting the impact from planned mill maintenance during the first quarter. The PAMOR project continues to progress well as we prepare for an investment decision in late 2023. Collectively, our Canadian sites have improved production by 26% compared to the same quarter last year, primarily due to a continued focus on closely managing labour vacancies and absenteeism, whilst improving productivity and reliability with greater access for our leadership and full potential teams post the Canadian border restrictions. Eleanor, Musselwhite and Porcupine each achieved their highest quarterly performance in terms of development meters. And for comparison, this is an overall improvement of 37% versus Q1 2022. And also as a direct consequence, Tons Mind improved 26% and ore tons processed also increased 7%. These very pleasing results are a true testament to the power of our operating model and its ability to replicate leading practices across our global operations. And these improvements go beyond just the ounces delivered. We have also seen the significant potential event frequency rate at our four North American operations cut in half due to an increased focus on critical control verifications. proving once again that a strong safety culture is key to delivering on our commitments. Finally, to our two non-managed joint ventures. Our 38.5% ownership of Nevada Goldmine and 40% interest in Pueblo Bejejo contributed 321,000 ounces of attributable gold production in the first quarter. representing 20% of our combined non-managed joint venture production guidance for the full year. As highlighted at our full year earnings presentation in February, a tragic workplace fatality occurred at our joint venture in Nevada gold mines. The fatality occurred at the Carlin Gold Strait underground operation on the 23rd of January, and a detailed investigation was carried out by our JV partners. which included one of Newmont's most senior safety leaders as a key member of the investigation team. NGM and Newmont's executive leaders have also met to discuss and share safety strategies, interventions, and tactics to help ensure tragedies of this nature do not occur again at NGM. Both of these joint ventures are core to the Newmont portfolio, and we look forward to continuing to work with our managing partner to help ensure a safe and productive future for Nevada gold mines and Pueblo behavior. And with that, I'll pass it over to Brian to cover our financial results.

Over to you, Brian. Thanks, Rob, and good morning, everyone. Let's get started with the financial highlights. In the first quarter, Newmont delivered $2.7 billion in revenue at a realized gold price of $1,960. of $481 million, which includes $360 million of unfavorable working capital movements, partly due to the timing of concentrate shipments at Penesquito. As stated previously, we are currently in a period of meaningful reinvestment. With capital spent for the first quarter of $526 million, as we continue to progress our near-term projects and position our portfolio to be profitable and resilient for decades to come. Additionally, Through the continued rationalization of our portfolio, we sold our stake in Triple Flag, which generated $179 million of proceeds, contributing to Newmont's strong liquidity profile at the end of the quarter with $3.5 billion of cash on the balance sheet. This investment-grade balance sheet continues to be an integral part of our capital allocation strategy, maintaining financial strength and flexibility while balancing sustainable reinvestment and leading shareholder returns. and $0.08 related to tax adjustments. Taking these into account, we reported first quarter adjusted net income of $0.40 for diluted share, relatively in line with the previous quarter, despite lower production as planned and previously communicated. These results also include the impact from higher average realized gold price, lower sales volumes, including the impact from the timing of concentrate sales at Penesquito, as mentioned earlier, and lower total cost and higher gold prices. And as a reminder, this higher gold price environment results in both favorable inventory adjustments as well as higher royalties and production taxes. As the year progresses, we anticipate that unit costs will decline as production increases and inflationary pressures stabilize, improving margins and strengthening our financial position. As a reflection of the confidence in our business set within our established framework and in line with our fourth quarter dividend. This continues to be the highest dividend per share in the gold sector and remains within the top 20% of large cap dividend payers in the S&P 500. With this dividend declared, Newmont will have returned $4.5 billion to shareholders through dividends since introducing our framework in October 2020. And we have now maintained a dividend yield above 3% for 10 consecutive quarters. And with that, I'll pass it back to Tom.

Thanks Brian. I'd now like to provide an update on our potential acquisition of Newcrest. To briefly recap the key events and milestones over the last three months. On February 5th, Newmont confirmed that we had submitted a non-binding proposal to acquire Newcrest. Then on February 15th, Newcrest advised that they had rejected our proposal but offered to provide us access to limited non-public information. After negotiating an appropriate non-disclosure agreement, we were provided access to this information. As part of this process, my executive leadership team and I, along with some of our key subject matter experts, held a face-to-face meeting with the Newcrest management team. After reviewing this additional information, we submitted a revised non-binding proposal to the Board of Newcrest with the following terms. a proposal to acquire 100% of the issued share capital by way of an Australian scheme of arrangement under which Newcrest shareholders would receive 0.4 Newmont shares for each Newcrest share. Newcrest would have the right to fund and pay shareholders a special dividend of up to US$1.10 per share to realise the value of franking credits and that the Newmont offer is best and final. subject only to no superior proposal emerging. On April 10th, the Newcrest Board then agreed to grant Newmont access to confirmatory due diligence to enable us to put forward a binding proposal. Newmont has been provided exclusivity for a four-week due diligence period that ends at midnight on May 11th. Our proposed acquisition would combine the assets and talent of two of the sector's top senior gold producers and set the new standard for safe, profitable and responsible gold mining. Newmont has a long history and a shared heritage with Newcrest, establishing our Australian subsidiary way back in 1966, a subsidiary that would become Newcrest some 25 years later. And as part of that shared history, Our companies also have shared commitments to a strong safety culture and leading sustainability practices, which is in addition to the complementary portfolios of world-class assets located in low-risk mining jurisdictions. Our proposed acquisition would strengthen our established position in Australia, creating efficiencies and value with a shared workforce, technical expertise and large-scale supply chain optimisations. and it would build upon the district potential in British Columbia's highly prospective Golden Triangle through a combination of operating mines and development projects that would deliver value through shared technology, local capabilities, and all-body experience. With our scale and track record of successfully managing some of the world's top Tier 1 assets, this transaction would leverage Newmont's experience from the Gold Corp acquisition where we have demonstrated over the last four years that we can generate meaningful improvements to performance, stability, and profitability, especially at large open pit and underground operations. Since we closed the Gold Corp acquisition just over four years ago, on April 18th, 2019, we have delivered more than $1 billion in annual synergies. significantly exceeding our initial commitment of $365 million. More than three-quarters of this synergy value was generated by focusing on the fundamentals of mining and processing and achieved through the disciplined application of our proven full potential program and leveraging our Newmont operating model with an experienced team of leaders and subject matter experts. as the only tier one asset in the Gold Corp acquisition, has been the main driver of this value, generating more than $700 billion in annual synergies. At this very large open pit mine, we have increased the average payload on our fleet of 85 large 330 tonne haul trucks by 17 tonnes per load, with scope for further improvements. This translates to an additional 12 million tonnes of material moved per year for next to zero cost. Combined with other load and haul improvements, we have increased the annual total material moved at Penesquito by more than 20% compared to 2020, with no additional equipment. Then turning to the processing plan at Penesquito, we have worked to understand and then address the bottlenecks in the crushing grinding and flotation circuits of this complex polymetallic operation, delivering a 7% increase in annual throughput compared to 2020, which translates to around $300 million in free cash flow improvements each year from this operation. The Gold Corp acquisition involved the integration of five new operations, of which one, Penosquito, was a Tier 1 asset. It also involved the entry into three new jurisdictions. By comparison, our proposed acquisition of Newcrest would also involve the integration of five new operations. But importantly, only one new jurisdiction. And notably, two of the operations, Cadia and Lahia, are T1 assets. With Red Chris and Bruce Jack representing a T1 district, in the Golden Triangle of British Columbia. In the four years since April 2019, we have delivered on our value proposition and exceeded the commitments that we made. We have strengthened our position as the industry's recognised responsible gold leader. We have enhanced our portfolio through the successful integration of the former Gold Corp assets into our Newmont operating model, delivering over $1 billion in annual synergies. We have optimized our portfolio, generating over $2 billion in proceeds from the divestments of Red Lake, our share of both KCGM and Continental Gold, along with the continued rationalization of our non-core equity portfolio. Notably, $1.5 billion of the proceeds from these divestments was delivered within the first 12 months of the acquisition closing. and we have led the industry on capital returns, returning more than $5.5 billion to shareholders over the last four years, while also completing over $1.5 billion in opportunistic share buybacks. Finally, our successful integration of the Goldcorp assets goes far beyond the synergies, asset investments and leading shareholder returns. We have led the alignment of the former Gold Corp organisation with Newmont's purpose, values, experience and culture. We have fully implemented Newmont's safety systems and processes. We have integrated our sustainability goals and targets. Through our disciplined capital allocation process, the former Gold Corp assets have significantly benefited from the combined entities free cash flow generation capability, And we have learned to operate in three new jurisdictions and forge lasting community and host country relationships. So in closing, I'm not able to provide any further details on the new CRESS proposal at this time as it is a live engagement. But I want to be clear with everyone on today's call that we will continue to be disciplined as we work through the due diligence process and determine best interest of our shareholders. Thank you for your time today and with that I'll now turn it over to the operator to open up the lines for questions.

Thank you. We will now begin the question and answer session. To ask a question you may press one star then one on your touch phone. If you are using a speakerphone please pick up your handset before pressing the keys. To withdraw your question please press star then two. At this time, we'll pause to assemble our voice chat. The first question comes from Jackie Krasnolowski from BMI Capital Markets.

Thanks very much for taking my question, and I'm going to apologize because I acknowledge that you've just mentioned you don't want to give more information about the Newcrest transaction, but if I could ask on that anyway. Let's say you finish the due diligence on this schedule where the exclusivity period is still intact and it's approved by all shareholders. Can you talk a little bit about the timeline for when the earliest transaction closing would be and what your thoughts would be for integration of the assets?

Thanks, Jackie. I love it. the restrictions on being able to comment. We're certainly in due diligence. So first and foremost, we'll go through that due diligence process. It's an exclusivity period for four weeks, but we'll remain disciplined in terms of understanding that information and assessing that and making our judgments and decisions. And it is a core capability of Newmont. Part of our operating model is the capability of our operating and technical teams. And so when it comes to due diligence, We have a very strong team who are very experienced at doing this work, so we are applying the full force of the Newmont organization on this due diligence exercise. We'll work diligently through that process and then make our judgments. Assuming that that all worked well and... Sorry, Jacqui?

Sorry. Sorry. Sorry. Go ahead. Go ahead. I'm sorry. I didn't mean to interrupt.

Sorry, Jacqui. Assuming that progresses well and we reached a binding agreement, then there would be the regulatory approvals to work through. You've got the Australian, the Papua New Guinea, the United States and Canada. It really becomes an understanding of those approval pathways and ultimately moving to close is dependent upon that. That's still a little bit into the future and work in progress. That normally takes a few months to work through those steps. In terms of one of the real strengths and the strategic rationale of this deal, of which there are many, one of the real strengths is that we already have an operating model and an infrastructure in Australia and in Canada. So if you think about an integration exercise, we already have Mia Gauss and a full business unit operating out of Australia. General managers report to Mia. We have a finance team, an HR team, a legal team, a sustainability and external relations team, a technical team. So an integration in Australia involves two operations becoming part of Mia's team. She currently has Boddington and Tanami. When I was RSVP down in Australia, we had Boddington, Tanami, we had Waihi over in New Zealand, we had Jundi, we had KCGM. So we're scalable in terms of being able to accommodate additional operations. Exactly the same circumstance plays out in Canada, where we already have Eleanor Musselwhite-Forkypine, Cripple Creek and Victor reporting through to Bernard Vessels and his North American leadership team. So again, Bruce Jack and Red Chris can fit very comfortably into that scalable organisation. For La Hia, Papua New Guinea is a new jurisdiction, very similar to when we were in Indonesia with Bata Hijau. I joined him over nine years ago as the Senior Vice President for Indonesia, based in Jakarta, managing the external relations with Indonesia and the Bata Hijau operation, and I think there are some analogies between how I think about or how we think about over here in a PNG and what we did very successfully for for many, many years in Indonesia. So, Jackie, hopefully that gives you some flavor of how we think about integration.

No, that's helpful. Thanks, Tom. I mean, I think when you talked or when the media talked about this transaction initially, the thought was sort of a year-end or early 2024 closing. But I would expect that as this process has gone on, that that gets pushed back. Is that fair? Like, you'd be kind of

mid 2024 at the earliest sort of time frame i'm just thinking from a modeling perspective yeah jackie i i think um i think that's too far into the future as best you can look into the crystal ball um working through those approval processes is um it's still we're in the hands of working through appropriate those approval processes but i think it's um i think it's a shorter time frame than what you just articulated okay

Okay, that's helpful. Thank you. And maybe just as a follow-up question or a related question, you've mentioned maybe potential sanctioning decision or investment decision for POMOR in late 2023. And I know previously you've talked about Yanacocha Sulfide's investment decision as well. Can you talk a little bit about what you're going to be looking for either independently of this NUCRIS transaction or potentially in light of this NUCRIS transaction, what you're looking for in order to make a positive sanction decision on the projects that you've got in your portfolio today?

Thanks, Jackie. as part of the closure plans, then palm oil is really Hollinger's replacement in terms of the provision of the lower-grade oil to supplement Borden and Hoyle Ponds' higher-grade underground oil through the mill at Porchley Pines. So it's a very straightforward lay-back open-pit replacement investment decision. full funds at the end of the year. We've got some early long lead items coming in in terms of getting some fleet on the ground as the water comes out of that pit to be able to get a good start at it. So that sits there independent of anything else that may be happening. It's just a natural progression of events in that mine and that decision, assuming it continues to meet our hurdle rates, will enable Porcupine to run for many more years to come profitably. Yanacocha sulfides, we've got Dean Gehring still dedicated as our Chief Development Officer, Peru, focused on understanding all options for Yanacocha sulfides through to and including, not proceeding with the project and putting it into care and maintenance. And Dean is still diligently working through that process with the team in Peru. And we've got a second half of 2024 decision to be made there. So that is also independent of anything that may be happening externally. That is a process that Dean will continue to work through with that timeframe in mind. More generally, if we were to be successful in the acquisition, I would point you to our track record with Goldcorp, where within the first 12 months we did work to rationalise the portfolio and to look to resequence projects so that we stay true to our capital allocation strategy in terms of the strength of our balance sheet, a steady reinvestment in the business and leading returns to our shareholders. And that would be the same strategy that we would apply if we were in a situation where we were working through an integration of a combined portfolio. The mantra at Newmont, which has been a key philosophy of how we approach our work, for well over a decade is value over volume, and value over volume would apply if this transaction were to be successful.

That's really helpful. Thanks very much for the color. Thanks, Tom.

Thanks, Jackie.

Thank you. We now have Tanya Jakusnik from Scotia Bank.

Great. Good morning, everybody. Thank you so much for taking my questions. I'm just going to circle back Tom if I can just on the new crest potential acquisition. I just wanted to check with you, do we not require also Mexican approval for that as well or is that not needed?

No, I don't believe there's Mexican approvals needed.

Okay, so it's only the four that you mentioned. Okay, that's helpful. Thank you. Just one less country to deal with. And then just on the shareholder votes, just to confirm that you need 66 and two-thirds votes of the new Crest shareholders and 50 plus one for Newmont. Just want to make sure that I have those right.

We'll circle back and clarify that.

Okay, perfect. Thank you so much. I really appreciate that. And just wanted to just talk about your co-product guidance for the year. You know, we were quite low. Sorry, we're a bit too high, I think, on Q1, and so you came in a bit lower. Can you just kind of guide me through, and I know Rob did this, and I think I missed some of it, but just overall for Newmont, how should I think about the co-products going through the year? I know we talked about it at Panosquito that I think we were supposed to have improvement second half weighted for the year. I just want to know, 55% weighted for the year, but I just want to know as new month for a whole, how should I be thinking of the co-products?

Yes, certainly for starting point, the co-product will be firmly within guidance. There's no changes there. And then in terms of the weighting, If I look across, Boddington and Penesquito is where we have the co-products, Tanya. So copper at Boddington. Boddington were in the higher grades in the first half, moving to lower grades, part of the second. So copper production, 52 first half, 48 second half, copper production out of Boddington. And then when you look at Penascuto, we are weighted to the second half for silver, lead and zinc. Silver, $44.56, first half to second half. Zinc, about $40.60, first half to second half. And lead, about $45.55, first half to second half. And as I say, the GEO for the year firmly within the guidance ranges that we've provided.

Daniel, that was very helpful, thank you. I was a bit off on that one. And then if I could just finally ask just maybe your thoughts about the Mexican law or changes thereof and what your thoughts and how you're reading into that please and thank you.

Yeah, thanks Tanya. Maybe for the others on the call that might not be following Mexico as closely, just in the last week or so, The Congress in Mexico approved an amendment to a version of an initiative that's around reforming a legal framework for the mining industry. So it's gone through Congress and in their legislative process that now continues through and to the Senate for further debate and discussion. So there's still some uncertainty around the scope of the reform. So it's difficult to speculate on what the impacts might be on the mining industry or specifically on Newmont. as this is working its way through, we're certainly going through our process of doing our legal reviews of what's been proposed in that initiative and closely monitoring that process, but working also through the Mexican mining chamber, who has taken the lead with this matter on behalf of the mining industry in Mexico. It's an important legal reform, and so we would expect and hope that the Senate promote some open and constructive dialogue with all parties that are involved. And that's just not the mining companies, that's the communities, the local and municipal governments and the lawmakers responsible for analysing this initiative. So it's in that stage where we would hope and expect that there is a very active discussion and debate on this reform. There are some, you know, when you start to review mining frameworks, it is an opportunity to promote greater competition, to promote greater transparency in the sector, to work towards better safety and compliance standards, provide more job opportunities and have benefits in terms of social and economic benefits. So I would hope that that debate is conducted well and with the full group of stakeholders involved involved and looking to improve circumstances in Mexico as a consequence. So early days, long way to go. Our expectation and our hope is that there is a critical debate that takes place in Mexico.

And is your understanding that whatever claims you have in effect would be grandfathered from any changes on tenure, etc.? ?

That's our understanding, Tanya. As I say, that's our understanding, but we're working through to make sure we fully understand that. It's more about future concessions as opposed to current.

Okay. Great. Thank you so much.

Thanks, Tanya.

Thank you. Our next question comes from Saad Tariq of Credit Suisse.

Hi, good morning. Thanks for taking my two questions. Both related to the Canadian operation. Maybe first, Rob, you were talking a little bit about improvements in labour availability. Can you just give some more colour? Is that more or less resolved now? Do you have the right number of people on site across the Canadian operation? Thanks.

Good morning, Fahad. Yes, we do. We really focus on two areas. Very strong recruitment and and also just really making sure that our current workforce are turning up for work. So a very strong focus on absenteeism and leave management, and those are both paying off very significant dividends. So the situation we had last year is vastly different this year, so we're in good shape.

Okay, good. That's good to hear. And then as a follow-up on the Canadian operations, it sounds like the milling operations, mining operations, lots of productivity improvements year over year, but the ASIC remains elevated. Is there something that's part of the equation that maybe we're missing? Is it just higher sustaining capex this quarter?

I'll touch on the first issue. So we're very, very pleased with the physical performance. And that also goes into the way in which the plant operates, so recovery, solution losses, et cetera, as well as the undergrounds. So across the board, we're very pleased with the productivities. But Brian's got some detailed answers in terms of the assets.

Yeah, thank you, Rob, and thanks for the question, Fahad. I think as it relates to the muscle weight, I think if you look at our earnings release, Our ounces sold were lower, and our sustaining capital is a bit higher for the quarter. And that's largely in line with what we expected for Muscle White for the period. So that's what drove the higher ASIC.

Okay, perfect. That makes sense. That's it for me. Thank you.

Thanks, Fahad.

We now have Anita Soni. from CIBC World Markets.

Hi, good morning, Tom and team. I guess my first question is with respect broadly to strategy and the acquisition of Newcrest. So you were talking about how your operations are scalable. And I was just trying to understand, are we to understand that when you, if you were to acquire Newcrest, that your intention would be to basically run the two million ounces of assets that they have and add that to the six or so million ounces and you'd be a, I guess, seven million ounce producer. Would there be some asset rationalization in there in your going forward plan?

Thanks and good morning, Anita. I think there are probably two parts to answer that question. We have an operating model that is scalable at Newcrest with our 12 managed operations and manage those operations safely and effectively. But our focus is on value over volume. So we've still got a lot of work to do in the context of Newcrest. It would be inappropriate to comment specifically on Newcrest given its a lot of engagement, but we certainly look back at our playbook and our experience with Goldcorp where we divested KCGM, Red Lake, Continental Gold, within the first 12 months and brought in the $1.5 billion in proceeds. So as we work through our due diligence on this live transaction and we think about portfolio rationalisation, value over volume and synergies, we've got four years of experience, muscle memory, capability within our team that we draw upon. And we look to that experience So I know I'm being a bit vague because it's a lot of engagement, but hopefully you can see the playbook that we have followed over the last four years with value over volume being front and center.

Sure. Okay. Remind me of the divestitures that you did with the Goldcorp transaction. I think there were just two, right?

Redlake and... So it was Redlake. our 50% share in KCGM. And if you recall, we had an interest in continental gold in the Burritica project in Colombia. So we completed those three divestments within the first 12 months, and that was $1.5 billion. And then we spent the last four years cleaning up the non-core equity portfolio, which triple flag was one of the last pieces of that. And that's actually brought in over $700 million of proceeds over the last four years.

Okay, and then I guess my next question would be, I mean, it's been about four years since the last major transaction. If this deal were to close, do you think you'd be done for a while, or would you be, you know, looking to do something else, I guess? I thought I'd ask.

Thanks, Anita.

It's on my mind.

This is a live engagement. We will remain disciplined in terms of decisions we've made as to whether it proceeds or not. And we know very, very well if we were successful what's involved in integrating and delivering synergies. If this were to come off, it's a transformational transaction. And our focus would be on delivering on our commitments. And we have... the experience of knowing what's involved in that. And we will be applying all of that experience for some time to deliver that value.

Okay, I just want to ask one more question. So not with relation to the transaction, but a little bit more on the operations. So I did notice that you mentioned in your ASIC commentary that costs were higher as a result of lower volumes and royalties on higher gold price. So that's the world's good problem to have. But the comment about lower consumables and inputs, could we read into that? We're starting to see some input cost pressures alleviating. How should we think about that over the course of the year from a unit cost perspective, not necessarily from a volume perspective?

Sure. Thanks, Anita. The low consumables, primarily the fact That's the main contributor to that Q1 explanation for consumables in terms of the cost base. As you said, the Q1 unit cost is driven by the 21% weighting in the first quarter. As we look at the end of March and thinking about the remaining nine months, the assumptions we made around inflation across our cost base fuel and energy, the assumptions we've made after the three months of the year are holding true. So not seeing any alleviation on our assumptions yet. We're watching that very closely, but not seeing anything that's particularly different from what we've assumed.

Okay, so you're good for ending up at 920 at the midpoint of the guidance range for the year at this point?

Yeah, that's via CADS, isn't it? Yes. Yep, still on track for landing on that midpoint of our gardens, as you say.

Okay, thank you very much.

Thanks, Annetta.

We now have Greg Bonds from TD Securities.

Yes, thank you. Tom, I just wanted to ask about your views on the safety culture at MGM and what, in your perspective, perhaps improvements that could happen there.

Good morning Greg. I'm going to kick off and Rob will talk to Peter at NGM every couple of weeks. There's a very close working relationship and often that is about less so around ounces and costs and more so around how we can work together on improving safety performance. Probably a couple of comments I think, Greg, is it's important we always have a chronic unease around safety performance, although we've had a period of time where we've been fatality-free as an organisation. I've certainly, in my 35 years in mining, lived through some tragic fatal accidents, and we still have, on average, every 10 days, a significant potential event that could have been a fatality. So it's a sense of chronic unease and the things you need to be doing to understand your fatality risks and those critical controls that need to be in place. We don't spend a lot of time on the ground in the operations that we don't manage. So we don't have that in-depth knowledge of what may or may not be happening on the ground at an operation that we don't manage. But we do have a whole bunch of things that we do and we look to share. And I think that's the best thing that we can do whether it be with NGM as a non-managed joint venture or whether it be with a mining company we've got no working relationship with, but we're in the same industry. Robert, maybe give you a flavour of how we think about supporting whether it be NGM or anyone else when it comes to some of the things we try and do when it comes to improving safety performance.

Thanks very much, Tom. And just building on that, Greg, is that we certainly are very, very open to sharing that We've been on a journey which has had an awful lot of lessons in the past and those lessons have led to some of the systems that we've developed and we're very open to sharing those and we have shared those with our colleagues at NGM. There's certainly very good people at NGM who are working very hard and for us and what they believe could work there. But, you know, they've certainly had some challenges, major turnover, et cetera, a lot of new people at Nevada gold mines. And, you know, they are very committed to changing there, but we have shared our fatality risk management system very much a caring culture. And those are the things which I'm absolutely sure will be duly considered and taken on board. But the conversations we have, make no mistake that Peter Richardson and the team are certainly working very hard to improve their safety performance.

Thank you for that. And Tom and Rob, perhaps your views on the safety culture at Newcrest, if you have any, or can talk about it even.

Thanks, Greg. When we think about confirmatory due diligence, there's all the stuff you do going into data rooms and pouring through resource models and mine plans and the like. An important part of confirmatory due diligence is getting on the ground. So whether it be Newcrest or any other any other potential acquisition we might be looking at, what's very important for us in making our judgment about whether it's a fair value and a transaction we proceed with is getting on the ground with our technical people, but also senior leaders. So as we think about due diligence and site visits, folks like Rob, Aaron Puna, Dean Gehring, all on my team, with the Bernard vessels, the Mia Gausses, the Francois Hardys, so all very senior operational leaders. As I say, whether it be in the context of a live engagement or any other due diligence we do, having senior leaders on the ground, you only need to spend a day, but you learn a lot walking around an operation within a day in terms of the culture of that operation, in particularly the safety culture, and that is a very important part of our due diligence process. and certainly part of a due diligence process that we would be doing in this live engagement. So I can't comment specifically on this particular engagement, but rather that it is an important part of our decision-making process and we send our most senior people to site, and safety and safety culture is a fundamental part of that due diligence process. Okay, great.

Thanks, Tom.

Thanks, Greg.

We now have Mike Parkin of National Bank.

Thanks, guys. All my questions have been answered. Congrats on the good quarter.

All right. Thanks, Mike. Good to hear your voice.

We have our final question on the line from Anita Sonny of CIBC World Markets.

Hi. Thanks for taking my follow-up. I wanted to talk about the issues you talked about in Western Australia. If it was important enough to make your conference call, we should probably delve into that a little bit more. And I do recall meeting the gentleman that you appointed, I can't recall his name, but to head up that initiative. But it's no secret that Newcrest has been at the center of some of these issues. So I'm just trying to understand how Ultimately, you propose to improve some of their operations, but also deal with the cultural issues that Newcrest has around sexual harassment and respect at work. They have a program in place called Respect at Work, which I'm not sure if it's yielded any results yet or not, but I just wanted to see how you guys were thinking about that and would approach that. Obviously, you acknowledge that you've had some issues yourself. But I just want to see how you're thinking about that in the context of a larger company that is now far more focused in Australia.

Yeah, thanks, Anita. Really, really important question. And Alex Bates is the name of the person who you're remembering who was the Senior Vice President of our Australian operation and has been working directly for me over the last year, spending time at each of our sites in, as I say, These are issues that exist in society, in such every workplace, whether in mining or everywhere else, and around the world. And I can say that with confidence now because we're in eight countries around the world and Alex has completed his engagements at every one of our operations and the consistency and the stories and the personal experiences reflect that these issues exist in every society and certainly in the countries that we work in. So it exists in every workplace, including ours, and I'm confident to say every other mining company as a result. When we think about the work we need to do to change behaviours and improve workplace culture, I very deliberately asked Alex to do the work. One, because he has the operational experience, he understands operations and what happens on Saturday nights on back shifts, on night shifts and all the rest of it. He also is representative of the group of people whose behaviour needs to change in order for us to change the culture in the workplace. It's those people with power and privilege. It's people with power and privilege who need to change their behaviour. And typically in our mining industry, certainly in the Western world, they look a lot like Alex and they look a lot like me. They're middle-aged white men. And so it is about creating dissonance in terms of whose behaviour needs to change and how do we change our behaviour to create a more respectful workplace. When I think about any potential transaction and integration, whether it be Newcrest or any other company, our approach would be to apply the same things that we're going to have to do within our own operations in terms of setting expectations for what is acceptable behaviour, to be equipping our leaders with the skills to understand what is inappropriate behaviour and address it early on, to ensure that we're creating safe work environments. Many mining operations have accommodation camps. How are we thinking about safe work environments in our accommodation camps, not only for the the men and women who work in our mining operations, but importantly for those people who cater and clean in those accommodation villages. How do we ensure that we have the person at the center of any event that occurs? And we're supporting the person as we work through any particular issue that might present in terms of bullying, harassment, racism and the like. So that the actions that we're looking to develop and take at Newmont, if we were successful in acquiring Newcrest, would be exactly the same actions that we would be applying at a set of Newcrest operations. So nothing specifically that we do. We have a lot of work to do. The industry has a lot of work to do. Quite frankly, society has a lot of work to do to improve the behaviour that's in workplaces around the world.

Okay. Well, thank you for that work. As a woman in mining and one who spent some time in the field, it's definitely important work for sure. Thanks.

Thanks for the question, Anita. I think, operator, is that it for questions?

Yes, I can confirm this concludes the question and answer session. I'd like to turn the conference back over to Tom Palmer for some closing remarks.

Thanks, operator, and thank you, everyone, for your time this morning, and please enjoy the rest of your day. Thanks, all.

Thank you all for joining. I can confirm that does conclude today's call. Please have a lovely day, and you may now disconnect.