Newmont Corporation

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 the event is being recorded. I'd 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 our call. Today I'm joined by my executive leadership team, including Natasha Villioun and Karen Overman, and we'll all be available to answer your questions at the end of the call. Can I please ask you to note our course pre-statement and refer to our SEC filings, which can be found on our website. Before we begin today, I'd like to take a moment to remember the three colleagues who sadly lost their lives working for Newmont this year. Like Kabita Morrison, or Cobby as he was known to his friends and colleagues, was a dedicated and hardworking member of our Halfo North project team and a natural leader. Cobby was a son, a husband, a father, a dear friend to many, and who will be greatly missed. Rosanna Lestermar was a daughter, a wife, and a mother to a young daughter. Civil engineer, Rosanna was part of the original team that developed Cerro Negro 11 years ago and had aspirations to soon become a part-time farmer in Argentina. And Daniel Ochoa, a son, a father to two young boys, a partner and a brother. He has been described by his colleagues as a strong team member with ambitions to further develop his career in mining. The investigations into these tragic incidents have been led by two of our managing directors from different business units with the support of teams of subject matter experts to ensure that we truly understand the cause of the incidents. Our response will include implementing both immediate measures from early observations from the investigations as well as taking a structured approach to reinvigorate our safety systems, tools, and in-field leadership activities that will all have a heavy focus on the quality of application. Sadly, these recent incidents are a stark reminder of the need to maintain discipline and a relentless focus on safety fundamentals. The loss of Adam Kennedy, Cobby, Rosanna and Daniel over the past six months has had a profound impact on the entire Newmont family and it is with great humility and resolve that we will continue to challenge ourselves to ensure that everyone working in our business goes home safely to their loved ones. Turning to our quarterly results, we are firmly on track to deliver our 2024 guidance. We are pleased with our operational performance in the first quarter and remain focused on delivering consistent results as guided over the remainder of this year and beyond. I also want to reiterate the four key commitments that we have made to our shareholders. We continue to make progress on these commitments and I'd like to provide a brief update on our first quarter achievements. starting with strengthening Newmont's position as the gold industry's recognised sustainability leader. Last week, Newmont published our 20th Annual Sustainability Report, along with our third annual Taxes and Royalties Contribution Report, both providing a detailed and transparent look at our values-driven approach to sustainability and the economic contributions we made in the jurisdiction, and communities that we operate in. With this sustainable foundation in place, we have created the industry's strongest portfolio of world-class gold and copper assets in the most favourable mining jurisdictions. And from this portfolio, we produced 1.7 million ounces of gold at an all-in sustaining cost of $1,439 an ounce in the first quarter. We continue to expect these unit costs to improve throughout the year, driven by both higher production in the second half and the delivery of synergies. I'd also note that in the first quarter, our go-forward Tier 1 portfolio produced 1.4 billion ounces of gold at $1,378 an ounce. Our Tier 1 portfolio also produced over 480,000 gold equivalent ounces from copper, silver, lead and zinc, and included in this number is the 35,000 tonnes of copper that we produced and sold. We generated $776 million of cash flow from operating activities in Q1, including a $666 million reduction from working capital, which Karen will cover in a few minutes. And when we exclude the $291 million one-time stamp duty payment we made in February in connection with our acquisition of Eucrest, free cash flow for the quarter would have been $217 million. Our second quarter production and costs are expected to remain relatively consistent with the first quarter. And we continue to expect that our gold production will be weighted to around 53% in the second half of the year, remaining firmly on track to achieve our four-year guidance on both the production and cost basis. In the first quarter, we also continued to progress the divestment of our six high-quality non-core assets this year. And this morning, we announced the sale of our London Gold financing facilities, generating $330 million in cash proceeds and furthering our commitment to maximising shareholder value by monetising our non-core assets. We continue to maintain our exposure to Frida Del Norte through our equity interest in London Gold. Underpinned by the industry's strongest portfolio of gold and copper assets, We remain committed to maintaining a disciplined and balanced approach to capital allocation. As part of this, we declared a first quarter dividend of 25 cents per share, demonstrating our ongoing commitment to returning capital to shareholders. We refinanced approximately $2 billion in debt related to the Newcrest acquisition, and we continue to advance our four key projects we have in execution. Our second expansion at Tanami, our new mine, Harfo North, and our two new block caves at Kadia. And finally, turning to synergies, we remain firmly on track to deliver on our commitments. In the first quarter, we achieved $56 million in synergies, bringing the total delivered to $105 million since we closed our acquisition of Newcrest in November last year, and building solid momentum towards our commitment of delivering a $500 million synergy run rate by the 1st of January, 2026. We have identified a series of initiatives, each with action plans and dedicated resources in place that have us on track to achieve a $335 million run rate by the end of this year, representing two-thirds of our $500 million Synergy commitment and well ahead of the run rate we estimated when we announced this commitment in May of last year. Beginning with the core of this value delivery, we are seeing great opportunities emerging from our full potential work and we are just getting started. At La Hia, we recently completed the first phase of full potential, from which we have identified initiatives that will deliver more than $150 million of value, close to double the synergy target we allocated to this new Tier 1 operation in our portfolio. I've just returned from La Hia, and the key to extracting this value will be simplification. Following a very similar approach to the one we used at Penesquito five years ago, we have key members of our Newmont technical team on the ground in PNG supporting the site team to work on simplifying operations by focusing on the areas that will genuinely move the needle and stopping the non-value activities that have historically plagued this operation. One example of this work is the work we are doing to de-bottleneck the materials handling and crushing circuits, which have been limited by the heirs' different ore properties, resulting in downtime from spillage, blocked chutes and blocked crushers. From this initiative alone, we expect to improve mill throughput and generate over $50 million in annual cash flow improvements. and the future waves of opportunities already identified at La Hia, we remain very excited about the untapped potential at this T1 operation. We are also well into the first phase of our full potential work at Cadia, Red Criss and Brucejack and have already identified several high value opportunities that we will progress in parallel with the initiatives now underway at La Hia. For our supply chain synergies, we have already realised close to $30 million from negotiating more favourable terms and pricing for materials and equipment, as well as first consolidating and then renegotiating service contracts. As we look ahead, we will continue to work closely with our key suppliers, leveraging our unmatched scale and global partnerships to seek improvements through negotiations and tenders over the course of the year. Then turning to G&A, we have already achieved over 80% of the synergies that we committed to, and we expect to exceed our $100 million G&A commitment by the end of this year. Most of our G&A synergies are coming from employee and contractor rationalisation as we expected, and to a lesser extent from reductions in insurance premiums and other administrative fees. We look forward to realising the significant production and cost benefits from our synergy work and we will continue to provide you with updates on our progress each quarter. And with that, I'll now pass it to Natasha and then Karen for an update on our operational and financial performance for the quarter. Over to you, Natasha.

Thank you, Tom, and good morning, everyone. After the loss of our colleagues at Ahofo North and Cerro Negro, Tom and I spent time at these two sites and with the project operational and investigations teams to get a first-hand understanding of the incidents to inform our global response to address our safety performance. In addition to AHAFO North and Cerro Negro, I had the privilege of visiting five of our six managed Tier 1 operations and spent time with our colleagues at Boddington, Benesquito, Achim, AHAFO, and Lihir, as well as Yanacocha and Merian. Our operations delivered a strong first quarter performance in line with our business plan and outlook for the year. With full potential underway at many of our sites, we remain confident in our ability to deliver safe and efficient production, keeping us on track to deliver on the commitments Tom just described. I will cover the first water performance and outlook for our Tier 1 operations, starting with Tanami. Tanami achieved planned production for the quarter despite the heavy wet season in the Northern Territory. that resulted in a six-week closure of the Tanami track. In the first quarter, Tanami delivered higher tons mined from deeper underground and successfully completed its planned mold shutdown, positioning the site to deliver at least a 20% increase in mold reduction in the second quarter compared to the first. At Boddington, the stripping of the current laybacks in both the north and south bits continued to ramp up in the first quarter, an investment that will bring forward stronger gold and copper grades starting in 2026. Total material moved increased over the fourth quarter due to improved tons mined and higher shovel productivity through the introduction of double-sided loading for our autonomous truck fleet, representing a major milestone for this ore fleet, as the performance of this technology continues to go from strength to strength. Penesquito delivered strong silver and lead production from the Chile, Colorado pit in the first quarter, as waste stripping continues to progress in the Penasco pit, as previously indicated. As a result, and as planned, we continue to expect gold production to be around 60% weighted towards the second half of the year. at this world-class polymetallic mine. As we return to mining ore from the Penasca pit toward the end of the year, we will have access to these higher gold rates in the fourth quarter and into next year. At Ahofa, we continue to optimize the processing circuits in the first quarter, achieving a 37% increase in mole throughput compared to the prior quarter. The newly fabricated girth gear for one of the two Zagmals has arrived on site, and we remain on track to replace this gear in May of this year. Once the new girth gear is commissioned, we anticipate a 10 to 20-day wrap-up period to reach full processing rates, resulting in even stronger production levels at our half-hour into the second half of the year. Cadia continued to deliver strong gold and copper grades from the current block cave in the first quarter. However, as factored into our guidance, these grades are expected to gradually decline over the remainder of the year as we transition from mining this cave to panel cave 2-3. And the work we are doing on both tailings rectification and expansion at Cadia, as mentioned last quarter, is progressing well. Tom and I visited Lihue in early April and were impressed with the team's dedication and understanding and then implementing full potential work. As Tom said, this work will focus on simplifying the operation and being clear on the highest value options that will drive stability through the mining value chain. In addition, I want to flag that the largest of our four autoclaves at Lihue will come down in quarter three for plant maintenance. This shutdown is included in our guidance. During the first quarter, we continued to progress the four key projects we currently have in execution. At Ohafo North, we are advancing the construction of the processing plant and mine service facilities, along with waste stripping activities to allow the mining of oil to commence towards the end of this year. We are diligently focused on progressing the project safely and efficiently, and looking forward to delivering new, low-cost ounces in the second half of 2025. At the second expansion of Tanami, our focus is on safely lining the lower section of the shaft. And as you can see in the photo, We also continued to progress the construction of the underground infrastructure, including pouring the concrete foundation for the crusher chamber during the first quarter. The two block caves at Cadia are both progressing well. We are advancing cave development to bring production online at Panel 2-3, and we are progressing underground development work for Panel Cave 1-2. With that, I'll turn it over to Karen to cover our financial performance and capital allocation priorities for the remainder of the year. Thank you, Natasha.

Let's get started with a review of the financial highlights for the quarter. Newmont delivered solid first quarter earnings driven by strong production volumes and favorable metal prices. And as a reminder, results included only two months of equity investment in lending gold, which is accounted for one quarter in arrears. In the first quarter, Newmont delivered $4 billion in revenue at an average realized gold price of $2,090 per ounce and copper price of $3.72 per pound. Adjusted EBITDA of $1.7 billion and adjusted net income of 55 cents per diluted share. The most notable adjustment to net income for the quarter was a 43 cents ADVAC related to non-cash impairments of non-core assets that were classified as held for sale as of March 31st. Under U of S GAAP, assets that are classified as held for sale require a specific evaluation and need to be recorded at the lower of the carrying value or fair value less cost to sell. As a result of this evaluation, Newmont realized a non-cash loss on assets held for sale including the associated tax impact of $485 million, primarily related to the coffee project, as opposed to assets that are currently operational. As I indicated on our previous call, we anticipated minimal free cash flow in the first quarter, primarily due to the timing of production and payment. We generated over $1.4 billion of cash flow from operations in the first quarter before a working capital reduction of $666 million. These changes in working capital included a one-time payment of $291 million related to stamp duty tax stemming from the acquisition of Newcrest, which was accrued for last year, a build in stockpiles, primarily at our newly acquired sites of $193 million, a bill that accounts receivable of $84 million, largely due to the ramp-up of operations at Penesquito in the first quarter and the timing of concentrate sales, and $59 million of reclamation spend primarily related to the construction of the Hanakocha Water Treatment Facilities. The Anacocha's ongoing closure advanced to the feasibility state at the end of last year and continues to address several complex closure issues, including water management, social impacts, and tailings. This long-term water management solution will replace five existing water treatment facilities with two. We commenced our construction of the Anacocha water treatment plants as planned this quarter and expect spending to ramp up throughout the year and continue to adversely impact working capital. Historically, Newmont's standalone reclamation spend averaged around $200 to $300 million per annum, but we expect to spend around $600 million in 2024 and peak around $700 million in 2025 before beginning to decline in 2026. As previously mentioned, the first half of the year traditionally tends to produce adverse working capital changes, and this normal trend is expected to continue into the second quarter, but with a slightly lower impact due to the regular timing of cash tax and interest payments. And with reduction also weighted toward the second half of the year, we anticipate that the majority of our cash flow after working capital will be realized in the third and fourth quarter, positioning Newmont for a stronger second half of the year from both an earnings and cash flow perspective as we continue to focus on operational delivery. As Tom mentioned, we remain firmly on track to achieve our full year guidance for production, costs, and capital spec. Production is expected to increase in the second half of the year, with the year's strongest performance anticipated in the fourth quarter, primarily driven by strong grades at Penesquito, AHAFEL, and Panama. And unit costs will be closely correlated to production with the added benefit of full potential improvements and additional synergies realized in the second half of the year. Capital discipline is a key focus area for us with our transformed portfolio. As mentioned on our last call, we continue to expect to invest an average of $1.3 billion per year of development capital in projects that will generate the highest returns, which we plan to provide more information about during our Capital Markets Day in the fourth quarter of 2024. During the first quarter, we continued to execute our balanced capital allocation strategy, which focuses on maintaining a strong balance sheet steadily funding cash generative capital projects and returning capital to shareholders. We maintained an investment-grade balance sheet and ended the quarter with $6.7 billion in total liquidity when including the cash reclassified to current assets held for sale. We reinvested $317 million of development capital as we continue to advance our highest return projects from our deep organic pipeline. And finally, we declared a fixed common first quarter dividend of 25 cents per share in line with the dividend declared during the fourth quarter. Looking ahead, our capital allocation priorities have not changed and the cash flows generated from our operations and the proceeds from investments will be allocated first to have an approximate cash balance of $3 billion and then to reduce debt up to $8 billion over the next few years. Additionally, once we have line of sight on meeting our balance sheet targets, we intend to repurchase shares as we see value in buying back our shares. Maintaining a disciplined and structured approach to capital allocation throughout the year will better position Newmont to deliver value to our shareholders. With that, I'll hand it to Tom for closing remarks.

Back to you, Tom. Thanks, Karen. In closing, and as we look ahead to our priorities for the year, I'd like to reiterate our focus areas and key commitments. we will reinvigorate our established safety program and continue to strengthen Newmont's position as the gold industry's recognised sustainability leader. Second, we will continue operating the industry's strongest portfolio of world-class gold and copper assets in the most favourable mining jurisdictions. Third, over the next two years, we will deliver $500 million of annual synergies an additional $500 million in cost and productivity improvements, and over $2 billion in cash from portfolio optimisation. And finally, we will drive a disciplined, balanced approach to capital allocation, creating a resilient and returns-focused future for our organisation and our shareholders. From our Go Forward portfolio, focused on Tier 1 gold and copper operations, we are well positioned to deliver on these commitments and more, creating an attractive value proposition for new and existing investors during this unique time in the gold industry. And with that, I'll thank you for your time today and turn it over to the operator to open the line for questions.

We'll now begin the question and answer session. We ask that you please limit inquiries to one primary question and one follow-up question. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your headset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause to assemble our roster. Our first question comes from Lawson Winder of Bank of America.

Thank you, operator. Good morning, Tom and team. Very nice quarterly results and thanks for the update today. Can I start off by asking about asset sales? First of all, congratulations on realizing value from the sales and lending stream and offtake. But with respect to that, first of all, When would you receive that cash, first of all? And then second of all, will it be applied entirely to debt repayment? And then just looking at the asset sales more broadly, we've seen public indications of interest, fairly substantial interest in Achievement Telfer. How would you describe the interest in the other assets? And what is your timeline currently? I'm thinking to be able to announce some transactions on these assets. Thank you.

from the London transaction. So six high quality non-core assets that are now held for divestment. So we've moved into that accounting classification as Karen talked to. We have started a formal process on every one of those assets. So we're in phase one for each and every one of those assets. So we're in the price discovery phase. And there is a high level of interest across across all of those processes. When we classify as assets held for sale we are laying out a program as we've committed to that we will work to divest those assets all fair value over the next 12 months. Our preference is on cash and that's what we'll be looking at, optimised value and cash but the process has started on all six of them and there's a high degree of interest clearly getting an asset out of a Newmont portfolio was attracting a lot of interest in the marketplace. I'll pass to Karen in terms of your question around the use of the proceeds. They come in two tranches, Karen, and then where we propose to use them.

Yes, in terms of the use of proceeds, so the first payment second quarter, the second payment in the third quarter, our capital allocation priorities are consistent, as I discussed in my prepared remarks. And as we've indicated through 2024, the beginning part of the year, we will be drawing on cash as we go through the year. And so the first proceeds would be used to kind of replenish those cash balances as we go forward.

Great. Thank you very much. Thanks, Wilson.

Our next question comes from Tanya Jakusinek of Scotiabank.

Oh, great. Good morning. Thank you for taking my question. Natasha, I wanted to ask you just on the year on the GEO side, you gave us the $47.53 on the gold front. Can you give us some guidance on the other metals, maybe just on the GEOs, how they progress at the year, and particularly at Penesquito, please?

Tania, thank you for that question. I think starting off just broadly, we will see higher contribution from Benesquito on GEOs this year because we are mining predominantly in the Chile-Colorado that we know is higher in GEOs. If we look at our GEO production across the the last four quarters, we will see that the GE output action for solar would be around 9 million ounces a quarter in the order of about 28 million ounces for lead. Sorry, 28,000 tons and 58,000 tons of zinc across the four quarters. Just chipping in there, Tanya,

Getting to that sort of coming out of Chile, Colorado to the fourth quarter and head back to Vanasco, pretty flat on silver and lead, but probably a little bit more zinc maybe in the fourth quarter.

Okay, now that's helpful. Thank you.

The copper's pretty steady through the year. The copper's pretty steady, Tanya, sorry.

Okay. And could I ask, just still on the operational side, Natasha, you mentioned Lahir maintenance in Q3. Are there any other big maintenance that we should be aware of in your portfolio, particularly Nevada, Goldmine, Pueblo Viejo, Cadia?

The only other area would be O'Harf herself, where we will be replacing the Gurskia, as I mentioned in the prepared comments. And that will happen now in the second quarter. And then after that, we should see a wrap-up back to normal production levels for a half-o. You might remember, Tanya, we did say that we've reduced production out of a half-o to make sure that we keep the two mill streams running. But that will then return to normal production rights after that shut.

Okay. That's very helpful. And then just finally on operations, and I'll leave it for someone else to ask. I'm just interested in, as you know, the costs were quite good in Q1, even with the lower production level that you are going to expect better production going through the year. Anything on the inflationary front that you could flag for us? Any easing that you're seeing? Anything that you're seeing some benefits on?

We've certainly seen some easing in three areas. We've seen it in contractor costs, diesel and explosives. But then we've also seen some increase in our steel wool costs related to steel price and then also cyanide costs. The other aspect would probably be energy. In certain areas, we see a reduction in energy. That is, I think, quite surprising for us from 2023.

And just to remind you, about half battery cost is labor, and that's been pretty flat. Yes.

So just as I understood, because it faded in and out, and I apologize for that, just on where you're seeing reductions or easing as in contractor costs, diesel and some consumables and energy, is that a correct statement? Yeah, explosives specifically.

And then overall LIBOR costs, yeah, overall LIBOR costs dying floods for owned LIBOR. That's about 50% of our cost, Micah.

Okay. Thank you so much for taking my questions, and I'll pass it to someone else. Thank you.

Thanks, Tanya. Our next question comes from Josh Wolfson of RBC Capital Markets.

Hey, thanks very much. The team has painted a fairly rosy picture here on what the prospects are for asset dispositions and then also what the free cash flow outlook will look like absent some of these working capital headwinds. In that context, I'm wondering how flexible is the company's buyback policy And I'm noticing the stock being a lot higher today than it was when the plans were announced for this at the fourth quarter results. Thank you.

Thanks, Josh. Yeah, as we go through the divestitures, and as I've indicated, as our free cash flow picks up in the second half of the year, first priority is to ensure that we've got our cash replenished on our balance sheet. And then there will be flexibility in terms of, as long as we have line of sight in terms of that debt reduction over the next 24 months, we would, at that point in time, if we were in a position, start to think about executing on share buybacks.

And a reminder, Josh, we've got an approved $1 billion buyback program ready to go. If or when that scenario, Karen, maps out, takes place.

Okay. And then just sort of to clarify, when I look at even what a flat quarter would look like at much higher gold prices today. And again, without some of the larger working capital challenges, even maybe one or two of these asset dispositions would put you in line aside of that. So is it fair to say that the prospects for this buyback could happen sooner than maybe what the initial criteria were outlined for the balance sheet requirements?

Yeah, the expectations for the divestitures is that those will be executed within the next 12 months, hence the classification on the balance sheet as assets held for sale. So expectation is through first quarter of 2025 that we will have executed or made decisions around the divestitures. And so the timing is contingent upon that.

Okay. And then sorry, one question if I can sneak in. I noticed the book value for the assets that are held for sale is $5.7 billion, which is quite a large number as compared to the $2 billion targeted. Any sort of comments there on how we should think about pricing or what the targets are effectively?

No, not necessarily. I think from an accounting convention perspective and how they're recorded from a GAAP perspective will be obviously considered, I would assume, by potential buyers. But in essence, the process of going through the commercial view of the assets and the value to the potential buyers, that will produce something most likely different, whether it's up or down in association versus what Great.

Thank you very much.

Thanks, Josh.

Our next question comes from Jackie Przybylowski of BMO Capital Markets.

Yeah, thanks very much for taking my questions. Maybe I'll ask the first question on the full potential program. So I had the privilege of visiting Penasquito in March. Definitely the team did a great job of outlining how the full potential program has benefited there. And I know you're working very hard on rolling that out in some of the newer acquired assets like Lahir. Can you talk a little bit about how that's going so far and what you're seeing in terms of achievements or maybe potential for future achievements?

Thanks, Jackie. Good morning. I'll kick off, and Natasha might want to build on that. We'll have Dave Gehring in the room as well. He might want to chip in as well. We're most advanced at Lahir, and Lahir was the site we saw as the most opportunity, which is why we jumped into there literally on day one. Three main productivity and cost opportunities at Lahir. The one I mentioned in the prepared remarks is really around consistent oil feed so that you can manage and address materials handling. So ensuring you've got the right balance of different oils so that you've got managing conveyor belts and block shoots and block crushers, just allowing the big plan to get a good consistent feed coming into it is a key value driver. Asset management and improving plant availability and other plant losses, a real opportunity at Lahere, just the basics of good quality work management, reliability engineering with the strength of the team that we have to support Lahere. And then the third one is down into the pit, improving mine efficiency and mine productivity. Just getting back to the the basics of drill and blast, load and haul through the mine. So very similar as we discussed at Peniskitto in late February. Move across to maybe just a touch on CADIA and Redcrisp in particular. There's an enabler at CADIA, a really important enabler in terms of resolving the tailings constraints, so understanding the work to rectify the tailings at Kadia and then expand those tailings to ensure you've got the tailings capacity to support productivity improvements from both the mine and the processing plant. Underground it's unlocking panel development. We're clearly opening up PC23, so progressing the opening up of the draw points over the next couple of years in PC23, ensuring that you're bringing on the development work for PC12. And then there's a fine balance between the mine and the processing plant. ensuring that as we're doing that work, we're also unlocking processing capability. We're still in that first phase of full potential, but we do identify some early quick wins. And I would argue that we are specialists in high-pressure grinding roles at Boddington. Over the last dozen years, we have worked with those HPGRs and we have a very efficient way of operating and maintaining that important crushing circuit such that we have regular visits to Boddington to understand how we both operate and maintain those HPGRs. So the opportunity for us to quickly get across to the HPGRs at Cadia, understand the power draw, understand the process control logic and optimise those HPGRs is a really early, quick win that we're getting after even before we finish the diagnostic phase. And then I'll maybe touch on Redcris. Redcris, that processing plant, is going to be there through the end of the open pit mine and as we ultimately move into the block cave. So really focusing on the opportunities to stabilise mill operations. Again, the basics around reliability and having uptime of that facility with consistent feed. And after you've stabilised, then optimising copper and gold recoveries and improving process controls so that you have a mill that's performing very well the remaining life of the open pit as they bring on the ore from their block cave in future years. Tasha, anything to add?

No, I think that was a really comprehensive answer. Thanks, Tom.

Hopefully, Jackie, that gives you some sense of the excitement we have sitting behind full potential and the confidence we have in that run rate through to the end of this year, the run rate to the end of next year and why we've gone after the upside on top of that $500 million.

And that was a super helpful answer. Thanks, Tom. And maybe if I can ask as a second question, just going back to your divestment strategy, I know you have a number of assets that you're looking to sell in Canada specifically, but also, you know, I guess globally as well. Can you comment at all? Do you have a preference of selling assets into groups or bundles, or are they all expected to be sold individually to different buyers? I don't know if you can make any comments on how you're thinking about that.

Thanks, Jackie. As I mentioned in an earlier question, the process has started on all six assets. So we have engaged banks and have started a process on all six assets, and we're in the process of price discovery through a phase one, so an active interest. getting a good feel for the level of interest in these assets and the competitive environment that we're hoping to enjoy. And we're running three separate processes in terms of, because they're in different locations. So there's a process for Telfer in the Australian context with a dedicated team looking after that. There's a process for Achim in the African or Ghanaian context with a separate team looking after that. And there's a process for our North American assets, the four operations plus the coffee project and a team getting after that. All being led by Peter Todd and Scott Langley, but up and running and very active. As I say, we're in phase one and quite excited about the level of interest and the competitive environment which we're presenting these assets to prospective buyers.

I appreciate the color. Thanks very much.

Thanks, Jackie.

Our next question comes from Mike Parkin of National Bank.

Hi, guys. Thanks for taking my question. Just looking for a bit of additional color with the Anacocha and the water treatment plants. This might be a bit old, but just looking for what's the main driver there? doing the two new plants versus the five existing ones? Is it capacity, or just the old ones don't have the technology kind of need to have implemented there?

Good morning, Mike. It is both capacity and technology. So just to paint a picture for you, we've been operating and mining the oxide ore at Anacotia for the better part of the last 30 years. and disturbed at the top of the Andes, an area that is the equivalent of three quarters of Manhattan. So to give you a sense of the scale of the disturbed land at the top of the Andes, a significant rainfall every year and a watershed into both the Atlantic and the Pacific Oceans. So there is a significant amount of disturbed land, a very significant amount of water at the top of the Andes, and that water every drop of water that touched that disturbed land, we need to capture, process, treat and then discharge to different qualities. Some instances the discharge needs to be to drinking water quality and some instances to agricultural standards as defined by the permits we have from the regulatory authorities in Peru. So as has been accrued for within our closure liability, We have been moving into the stage of closure for Yanakocha that involves the construction of two large water treatment plants over the next few years that then will treat water in perpetuity, forever. These plants are designed to be there processing water and discharging water forever. So we're in the building of the plant phase now for a set of facilities that will operate for three decades out in front of us. Just to put into perspective the size of these water treatment plants, we are designing and building these plants to treat 8,000 meters cubed per hour. That is a plant equivalent to treating the water required by a city the size of Seattle. So that's the size of the water treatment plants we're building up in Kanakocha.

And the cost of those, I guess, that's all kind of flowing through this year and next year. Is that in your capital budget or is that running through the income statement? You normally have... Sorry, Mike.

I might want to build on this. You don't have a capital or a sustaining capital.

That's correct. It's accrued on our balance sheet as a liability. You'll see that the $600 million that we expect to spend in 2024 is considered a current liability, but that you will not see that as time indicated flowing through sustaining or developing capital.

Okay. So is it more working capital changes as the current liability drops down?

consistent with first quarter you'll see that flow through working capital okay thanks very much that's it for me all right thanks bud our next question comes from anita sony of cibc um just a little bit of a follow-on to uh to what mike just asked um so with the anacocha originally you guys took a you know you did a provision of about two billion dollars And it was basically the cost of treating this water in perpetuity. So at least that's what we understood or what you had previously talked about. So do we still have those costs as well? Or is this like once you've built this plant, you wouldn't have ongoing expenses in terms of the water treatment plant? Like I'm not quite sure if this is now additive to the original $2 billion. Yes.

So, Anita, in terms of the provisions that we've had in our closure liabilities, that's all been there. There's no new information there that's fully accounted for in terms of our closure liabilities for Yanacocha. And as part of that, there's always been the spend to build the water treatment plants, which takes place over 24, 25, 26. And then the cost to operate those water treatment plants. We're then looking at around $40 million, $50 million a year to operate these water treatment plants in perpetuity. The cost to both operate those plants and to construct those plants are included in our closure liability.

So what's that total closure liability now then?

Well, Yanacocha is sitting at, just looking at my number, It is sitting at about $4.8 billion. But in the... Sorry, the liability... I'll pass it across to Aaron to cover the liability rather than me trying to battle with balance sheets.

Yeah, this time it's referring to the total reclamation and remediation liabilities is around 6.6. But for Yannick Kocha, it is the 1.7 that it has been accrued for on our balance sheet.

Sorry, $1.7 billion.

Yes, for the water treatment plant, Anita. So this Yanacocha has a bunch of other closure activities. You've got to reshape leach pads and waste dumps and tailings facilities. So the water treatment plant is a component of that. The total closure liability for Yanacocha is $4.8 billion.

Okay, got it. And then you mentioned it's taking place over 24, 25, and then 26. Can you tell us what the number that we would see in working capital outflow in 26 would be?

Yeah, so as I indicated in my preferred marks, so $600 million in terms of 24, peaking at $700 in 2025, and then starting to come down from there in 2026.

Our final question comes from Daniel Major of UBS.

Hi there. Yeah, thanks.

Go for it, Daniel.

OK, sorry. I'll keep it quick if you don't have time. Thanks. Yeah, two questions. One, just on following up on the working capital and looking at your slide 10 in the presentation, You've talked at length on the reclamation payments, but can you give us a sense of any other key moving parts we should expect in the coming quarters and where you would expect the net balance change year on year to be from a cash working capital perspective, including the stamp duty or excluding it, whichever?

Sure. So the only additional stamp duty we'll have is in the third quarter for approximately $30 million. You'll see some additional seasonal changes as we head into second quarter as it relates to cash taxes as well as interest from a cash perspective. Those will flow through in the second quarter as well. And you'll see higher reclamation liabilities to cash outflow associated with that as we go through 2024. And then in addition to that, you'll see the traditional timing as it relates to sales and inventory changes as we go through the year.

So if you stand now, what would you expect the net change to be over the full year in terms of total net build and working capital?

That really depends on the timing in terms of that, as well as, of course, pricing as we go through 2024.

okay thanks and then um the second one um you've talked uh detailed a lot of the progress you've made since the um since the integration in new crest um in these kind of deals i guess there's always positives and negatives what's what's the toughest part what's been the most challenging or almost difficult part of the integration um so far i'll pick that one up um the the

By far and away, Daniel, is the tragic loss of Adam Kennedy's life at Bruce Jack on the 20th of December last year. And as you reflect upon the integration, you reflect upon what things could we have done differently, what decisions could we have made differently that wouldn't have led to Adam being killed that day at Bruce Jack. I think, as you've said in some of our remarks as well, I think stepping back from the loss of Adam and safety, I think the two areas that we're working through diligently are tailings facilities. We've talked about Telford and we've talked about Acadia and a little bit around Redcrisp. So just bringing those tailings facilities into the new mod standard and ensuring that we have the appropriate rigour and discipline around those. in managing them here and now and ensuring as we shepherd those going forward that they have the appropriate standard. And then the third one would be bringing the all-body knowledge levels up to a Newmont standard so that we've got really robust all-body knowledge underpinning our mine plan. So that would be the three areas where there's been, I guess, the hard work. I think if I step back from that with the perspective of having lived through a similar integration and transaction five years ago. I think when I step back from those three areas, I think the integration has gone very well, and I think we had the benefit of being able to apply the lessons we learned from integrating the five Gold Corp assets back in 2019 to this exercise, and that's put us in good stead.

Great. Thanks so much. Good luck.

Thanks, mate. You've had a follow-up question from Anita Soni of CIBC.

Yeah, sorry, I got cut off there before the end of the question. But I was hoping, I'm assuming that the 2026 spend for Yanacocha water treatment would be 400 million. I think you said it was 1.7 billion just for the buildup of those plants. So you're doing 600 and then 700. So the remainder would be 400, is that correct?

And the expectation is that this will be commissioned in 2027, and there'll be obviously some continued, as Tom said, continued approximately around $50 million a year associated with that going forward.

So we certainly see the step up through those three years, and then back to, as best you can predict that far in the future, back to the sort of normal long-run levels for closure and reclamation activities.

okay um i'm gonna so the second question that i wanted to ask was about sarah negro so um definitely unfortunate that two people lost their lives i i did want to ask a little bit about um you know does it have anything to do with long-term structural support there these i mean these guys were or a gentleman and a lady were um mind within the mine technical services group so not a little bit unexpected for that group for that to happen. So I was just trying to find out if you had any color on that.

Thanks, Anita. I might ask Natasha to comment.

Anita, absolutely not structural. So from a geotechnical point of view and from a quality of acid point of view, very high quality and no material geotech challenges for us. This was procedural by nature. So definitely not linked to any long-term predictions.

Okay. All right. Thank you. That's it for my questions.

Thanks, Anita. And as we close out our investigation, we will share those lessons widely with the industry. So as we're up to, we will. Thanks, Anita.

This concludes the question and answer session. I would like to turn the conference back over to Tom Palmer for closing remarks.

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

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.