Q1 2022 Newmont Corporation Earnings Call
Good morning, and welcome to Newmont's first quarter 2022. Please.
Please signal a conference specialist by pressing 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 Officer. Please go ahead.
Good morning, Thank you for joining <unk> first quarter 2022 earnings call.
Good item joined barbell that concern in that space.
Along with other methods of an incubator.
<unk> question at the end of the call.
Before I begin please note that.
Cautionary statement Richard.
Which can be found on our web site.
You talked a little bit on a challenging third quarter as the operation and the bulk of industry as a whole.
I think that is true yoga crops age over the first three months of this year.
As we have moved to the other part of this is why newmont remains well positioned to deliver solid performance in 2022 legs.
You may begin your scale and proven operating model to deliver long term value from the worlds fifth Bonnie.
<unk>.
The strength of our people and stability.
Portfolio, both Armidale elder fluid Djilas short term disruptions.
The foundation of <unk> clean.
Consistent strategy to create value and improve lives through sustainable and responsible mining.
Turning to our quarterly results, let's take a look at the highlights.
During the first quarter <unk> produced $1 3 billion announced the goal of 350000 gold equivalent ounces from copper silver lead zinc.
Despite challenges from the Elba Cogs search and the knock on impact from this global pandemic, we remain on track to achieve our full year guidance ranges as we built a strong second half.
Our rates by David at a high potent treatment Gavin.
Bobby just bought in Australia.
Significant.
Significant uptake.
Savings are taking to protect the health and safety in a little while continuing to move critical projects forward.
With $7 $3 billion be entitled liquidity, We had a net debt EBITDA ratio three times presenting gave us financial strength.
<unk> can sustain and grow the business.
We also continue to invest in and develop how much profitable mid term projects, including a hotbed mill.
<unk> expects that terabyte.
Janet cutting sulfides.
Just last week, we announced the acquisitions of the combos interest genetic culture.
Which will bring him up mid population and the exciting project to 100%.
And yesterday, we declared a first quarter dividend of <unk> 50 450 per share.
With at Analyst day, plus dividend framework and consistent for the last five quarters.
<unk> core values of safety.
<unk> integrity inclusion and responsibility are essential to creating long term value for our investors place to governments.
<unk>.
Any COVID-19 .
Last week.
<unk> launched Kate.
And you're trying to be able to report.
Putting a transparent look at it.
Jay performance issues in metrics that matter most to our stakeholders.
And in March we committed Paul David.
Bob relief and medical supplies to the mill.
April affected while the award new price.
We take pride in being a very difficult transaction.
Our core values are fundamental to how we run our business and way we choose to operate.
In light of the break the Colgate and the Albemarle has impacted so many around the world.
It could be sustainable and responsible mining is more relevant to die even before.
Very helpful call earnings call in late February we provided an update on how the AUM across search and the lingering effects of the pandemic.
<unk> operations.
And the impacts.
Nichols could expect in the first quarter.
As you can see here on the floor.
First three months of this year, we saw the largest spike positive COVID-19 cases enabled since the start of pandemic.
And this graph.
Positive cases, and does not include exiting from adhering to place concrete constellation protocols.
The rule of thumb.
Every public data thought it's thawed approximately three co workers with St. Paul.
We'll have to wait for a minimum of seven <unk>.
In addition, many of that team opened needed to pipe Tamil <unk>.
Children and family members.
Covid cases spiked and surrounding Covid.
Fortunately <unk> very pipex nice status the severity of any positive cases.
<unk> remained low.
As of today.
12 based operations fully vaccinated workforce of employees and contractors.
Turning up to emerge strongly on the other followed up this way and others that might come.
However, as a consequence of managing through the Homochrome sewage how operations have been impacted during the first quarter.
While lower productivity contact oscillation protocols.
Capacity constraints and breadth of our safety measures.
We are also experiencing pandemic related supply chain disruptions and impacts from various state national border restrictions.
This has affected both labor availability and the delivery of equipment and critical stage.
While the Washington version of Ukraine, and has resulted in new and developing them.
Okay equity global supply chains and input costs.
As we described in our guidance webcast lots of sandbox.
Are you sure that escalation factor 2022, when we developed a business plan to account for her replacement expected during this year.
During the first quarter, we remain in line with our inflation assumptions.
We're closely monitoring critical commodity materials.
Natural gas in the amount of use for the production of explosives and following up.
It is difficult to predict at this time.
Okay.
Cost pressures from new supply chain disruptions.
<unk> unit costs by another 3% to date and toward the higher does that guidance range.
We will be closely monitoring it to the second quarter and.
And we will provide you with an update during our Q2 earnings 2000 ounces, allowing viewpoint for golf.
We continue to expect both production and unit cost to improve through the second half.
Back half of the year.
Driven by tenant on behalf of Cerro <expletive> .
In operations.
And as we have demonstrated.
Hey, David.
We'll continue to be transparent as we came with our updates to the market as well, David Jeff Bray with upward either.
Mid term.
Uncontrollable disruptions and deliver long term commitments.
Newmont.
Both operations along with our plan.
Top line of more than 20 organic projects with the scale and boardwalk to deliver long term results.
Good golf, each year and OLED.
Copper silver lead and zinc.
Bye.
Per year for at least.
<unk>.
Sorry.
And it is important to note.
Okay.
<unk> is a tricky.
And through joint ventures.
Knowing that the date of the attributable gold production comes from top tier jurisdictions.
And with the acquisition of the remaining bought the stake.
Again, our culture is a member of our 12 managed operations will be 100 per day.
Ensuring that appetite holders.
Benefit from gearbox clear strategic foot.
Hi, Chris and superior execution.
We said differently the way, we choose to invest and operate methods.
A disciplined geopolitical risk program that ensures we retain a good fit.
<unk> and <unk>.
Our risk tolerance to deliver long term results from established foreign jurisdictions.
On the <unk> portfolio with a robust foundation of reserves and resources.
Which combined with the gold industry best organic project pipeline.
At the top.
Applied to steady production and cash flow well into the 2014.
We are entering a period of data to reinvest as we continue to advance detailed projects, including the second expansion of Panama and Australia as mobile territory. The development of a hospital and done and yet <unk> Sulfides project. The next exciting chapter EBITDA months long and profitable.
History.
And with that I'll turn it over to Bill and the density for a more detailed look at our first quarter performance.
Zero.
Thank you Tom and good morning, everyone.
Turning to the next slide, but it ties into the operations and projects starting with Africa.
Tom and I had the opportunity to physically visit recently and were impressed with the progress at both operations as we continued to advance important growth opportunities in this proven by industry.
Adding some level of shrinking the company granted.
The accumulated back and of course, a couple more.
Sure.
As indicated during our fourth quarter earnings call have a sense of the challenging start to the year.
The site first quarter performance was impacted by supply chain disruptions in global border closures impacting labor availability and the delivery of new equipment and critical spares.
As an example last year the site cordless for new drills for the underground and open pit operations and we only received the pastoral in March this year with delivery of the remaining drill is expected sometime in the third quarter March later than originally planned.
In addition to delay a completion at existing drills as competitive situation, increasing availability challenges with the equipment that we have on hand to date.
Improved performance has helped to offset these delays.
Thanks from the pandemic has affected our ability to buy.
Any rates and Mississippi undergrad.
And as a consequence, we are evaluating ways to improve our mining rates, which may include adding a third production level to access higher grades in late 'twenty two 'twenty three and we expect to have an update with our quarter two earnings in July .
Achieving delivered a solid performance in the first quarter due to sustained throughput and strong recoveries.
The team continues to progress stripping of the next layback of the open pit, which will extend mine life by an additional four years and provide future optionality for both underground and open pit growth.
And finally, we continued the development of the half one off project.
Engineering is 90% complete and procurement to 60%.
We continue to work together with local capabilities traditional leaders as <unk>.
<unk> global lending back space and commence construction.
And just in the last few weeks all the dynamics separately with key stakeholders and received strong support for this important project.
And last week, we also achieved an important milestone with the cabinets in Ghana formally approving the divestiture at the highly <unk> assets through a section of the <unk> site.
And operations begin half wood cost is expected to add approximately sourcing and hiring.
Political body.
Now turning to Australia.
As Paul Linton antenna, Mike we experienced on the omicron starts in the first quarter as labor availability and close contact isolation protocols and type to the region.
In addition to the West Australian border was reopened in early March leading to an increase in onsite cases.
Also allowing our teams contractors and business partners to move more freely throughout the country and for the first time in many months.
As Paul Linton, we reported lower production compared to the fourth quarter due to planned maintenance and COVID-19 related apps as.
As we saw our first Covid cases on the site.
These impacts were partially offset by improved mix and higher ore tonnes mined from Boddington fleet.
Related to on those trucks.
The team is diligently working multiple faiths positions in the <unk>.
Access to higher grade ore.
And we expect tons mined and great to remains strong.
As we continue to optimize consistency efficiency and productivity.
On the truck fleet, a key component to delivering a strong finish to the year.
At <unk> the site delivered a strong performance despite the impacts from the <unk> of search in the first quarter and a very competitive labor market in Australia.
The site also delivered lower ore grades during the fourth quarter due to mine sequencing and unplanned maintenance at our processing facilities.
The team continues to progress has taken expansion it sounded like a project with potential to extend mine life beyond 2014.
As you can see here in the photo disabling headframe is nearing completion, which is an important milestone as we transition from the remainder of the shaft to commencing the chef lightning activities.
Nearly 85% of the project engineering and procurement has been completed and over the coming months. The site will focus on the completion of the headframe installation.
Commencement of the shaft lining.
Panama is not much closer delivering significant items cost and efficiency improvements.
And now over to North America.
Hey, mosquito and delivered another solid quarter.
The mill performance that delivered higher co product production license, Inc, offset lower gold production.
Stripping has continued at both Nacho, Chile, Colorado pit with lower gold grade and harder rock coming from Chile, Colorado in the first quarter.
Looking ahead due to efficient sequencing gold production from this large OLED metallic.
It is expected to decrease in the second quarter of increase in the third quarter due to higher grade delivered from an escalating.
Moving to Canada, our operations in the country as a whole continued to be impacted by ongoing challenges stemming from the global pandemic.
A very competitive labor market.
As indicated a couple of months ago, the other concerts reintroduced flight.
The constraints testing requirements of district close contact isolation protocols.
And working closely with our solutions we have.
<unk> changed our stringent protocols and testing regimes, even as restrictions are relaxed.
Due to the remote locations. These impacts were particularly pronounced at musselwhite, and Orlando, where both sites delivered more tonnes mined and processed compared to the fourth quarter.
As an example, we saw absenteeism rates as high as 15%, 20% during the peak of the Omicron starts at our Canadian operations and Musselwhite.
Musselwhite.
Place the sites of care maintenance for seven days in February to reduce the spread of the buyers.
Health of our workforce and communities.
At Porcupine iron ore grade was offset by lower tonnes processed as a result of Covid related labor Absenteeism MLB insurance. In addition to challenging ground conditions and some ventilation constraints at total Cogs.
The site continues to progress among lay back a project that will extend mining occupying 320 35.
Construction of the water treatment plant is well underway.
Deepwater and advance towards full funds approval in the second half of this year.
And finally at <unk> that might be required to mill shutdown from a can be a fire that occurred during the first quarter.
With the pending conclusion of a contract to supply concentrate from CCP to the vertical blinds, we're stepping back to the SaaS, our operating strategy at the site to determine if there is the potential for a simpler.
Well go life wheat, shortly operation that does not carry the complexity cost of running the mill to process or expect to have an update with our quarter two earnings in July .
Turning to South America.
<unk> delivered.
Iron ore blending strategy.
Alan steady great strong milk.
Performance.
And kind of culture record rate.
All resulted in a favorable and the declaration of Parisian.
Impacting the site as it continues to deliver lead shortly production.
We've worked to develop the first phase of the sulfides project.
Which continues to advance towards an investment decision in late 2022.
Engineering is approximately 50% complete and the <unk> camp construction activities continue to progress at site.
And more just finished Kent will allow the construction workforce to begin ramping up in 2023.
And finally, Cerro <expletive> delivered a strong performance in the first quarter as a result of higher aggregate might for Diana Naughty Naughty Onocentaur and ongoing improvements in productivity. Despite disruptions from the AMA code strokes.
During the first quarter the team successfully completed the tailing storage facility expansion project and they continue to progress the first wave of expansions at Cerro <expletive> , including the development of the Marianas and eastern districts to extend existing operations beyond 2030.
The cheapest company advancing the development of the San Marcos defined but as you can see in the portal.
<unk> of the roads infrastructure platforms and portal access are all well underway and the eastern district.
And with that I'll turn it over to Nancy on the next slide.
Thanks, Rod, let's start with a look at the financial highlights.
In the first quarter Newmont delivered $3 billion in revenue at a <unk> price of $892 per ounce.
Adjusted net income at $546 million or 69 per diluted share.
Adjusted EBITDA of $1 4 billion.
And solid free cash flow of $252 million.
Which includes unfavorable working capital movements of $465 million in the first quarter, primarily driven by timing of cash collections and over $420 million of tax payments largely attributable to 2021.
Free cash flow was also impacted by higher capital spend as newmont enters a period of significant reinvestment and essential component, Brian production and trading margins and extending mine life.
First quarter GAAP net income from continuing operations was $432 million or <unk> 54 per share.
Adjustments included <unk> 16 related to a noncash loss on the pension and the organization settlement.
Porcelain, primarily related to a loss from the sale of <unk> as part of the transaction to increase our ownership culture.
Chad.
Related to the unrealized mark to market gains on equity investments.
<unk> related to tax adjustments and valuation allowance.
And for.
Other charges.
Taking these adjustments into account we reported first quarter adjusted net income of 69.
Diluted share.
And our balanced portfolio combined with our discipline provide significant leverage to higher gold prices from the largest production based on the world.
For every $100 increase in gold prices above our base assumption newmont delivers $400 million I think prevent all attributable free cash flow per year.
And Newmont is the only company in the bulk mining industry with the ability to generate these levels of attributable free cash flow, allowing.
Allowing us to confidently execute our capital allocation priorities and bill from our position as the world's leading gold company.
The ear in Africa.
<unk> with the first in the global industry to announce a clear dividend framework with a decisive strategy to provide stable and predictable returns yesterday, we declared first quarter dividend of <unk> 55 per share or $2 20 per share on an annualized basis.
<unk> at an 1800 dollar gold price assumption and a conservative 40% distribution that incremental free cash flow.
We continue to review our dividend each quarter with our board.
Assessing gold price performance, along with our operational and financial outlook over the long term.
So determined to payout levels within our dividend framework.
Since its introduction in 18 months ago, Newmont has returned $2 5 billion to shareholders from dividends.
Demonstrating our confidence in the long term value of our business and our ability to maintain financial flexibility while steadily reinvesting in our future.
Our capital allocation priorities remain unchanged with a clear strategy to.
To reinvest in our business through exploration and organic growth projects to maintain.
<unk> financial strength and flexibility on our balance sheet.
And to continue to provide industry, leading returns to shareholders.
In the first quarter, we delivered on each of these priorities by progressing our profitable reinvestment into the business with the advancement of our near term projects and an ongoing commitment to a robust exploration strategy.
Enhancing our ownership of World class asset moving in mining jurisdictions through the acquisition of the remaining interest in <unk> and the sulfides project.
Maintaining our industry, leading dividend at $3 20 per share on an annualized basis.
Is the saving of strong balance sheet with $7 3 billion in liquidity and a net debt to EBITDA ratio of three times and preserving financial flexibility across price cycles.
As we look ahead, we are confident in our ability to deliver on our disciplined capital allocation priorities, creating long term value for the business and maintaining our position as the world's leading gold company.
With that I'll hand, it back to Tom on Slide 20.
Thanks, Nancy <unk>.
<unk> has a long history of leading change.
ESG.
And these practices have been embedded in our culture and strategy and our woven into the very fabric of that company.
Last week.
Launched in 2021 annual sustainability report.
Part of the suite of reports on a company's ESG practices in the key areas that matter most to web cycle.
Including health safety and security team abroad.
<unk>.
<unk> acceptance.
Governance.
And inclusion and diversity.
Some of the highlights from this year's reporting Covid.
Zero presented fatalities for the third year in a row.
With our focus on therefore, and the critical controls that prevent fatalities and coaching truckload latest to provide feasible.
Felicia.
Continuing to put the health safety and wellbeing of our workforce and communities, but the heart of every decision we made.
And continue to bike during this pandemic.
A key part of this.
Adopting the requirement for all of their workforce to be fully decks limited.
With contributions to our global community support fund.
Supported Covid testing facility.
The wave of campaign and vaccine Rollouts in Aerie near our operations.
We established the industry first sustainability linked bond.
The bond that you want to account for meeting our 2030 emission reductions.
Okay.
And also to reach gender parity.
<unk> or 'twenty.
But looking at the interest rate paid to our ESG performance.
Correct.
Next important step.
Our financial performance.
And finally <unk>.
He will play an important role.
Economic value.
A $10 billion towards operating costs, <unk>, Spain royalties and taxes.
No Clawback report.
Okay.
Risks and opportunities.
Yeah.
As we are taking to achieve.
Our climate targets.
Will you be disclosing adult financial performed regularly ranking as one of the most transparent Eric.
There are companies in the S&P 500.
And positioning newmont.
<unk> sector recognized sustainability.
Is an indicator of a well run organization.
We will only be successful.
If we fold at nine times from partnerships with local community and demonstrate our ability to mine.
Okay.
In order to our great global issues, we face today.
Mining industry will need latest with sky.
Cash flow generation.
80, <unk> practices and we believe that <unk> is one of those layers.
We will.
Through our clear strategic focus and discipline.
Our unmatched global portfolio.
And the integrated operating model.
It should experience platelets as.
As we continue our next 100 years of sustainable and responsible mining.
And with that I'll turn it over to the operator open the line for questions.
Thank you we will now begin the question and answer session to ask a question you May press star followed by one.
Press Star followed by Q.
At this time, we will pause to attend.
Well our roster.
Our first question comes from.
Jackie <unk> with BMO capital markets.
Jackie Your line is now open.
Thanks very much.
I think I wanted to ask a question about your.
Your cash flow statement. It looks like you had a pretty high working capital spend in the quarter and I was wondering if you could give us some color on.
The reasons for that and what.
What youre doing with working capital. Thank you.
Thanks, Jack and good morning.
Just talk to the Cros.
So Nancy to pick that question not for a decade.
Turning to working capital.
Payments made in Q.
Okay tied to.
Kevin and revenue received in Q4 of 2021, so that was the biggest we also have.
Thanks Nancy.
Some of you.
Your capex spending against specific.
Particularly your development Capex spending is.
Little bit below the run rate.
Great.
The full year guidance.
South American Africa, which makes sense because.
The major projects there hasnt been green lit yet, but can you can you give us some color because I.
Im thinking at least organically, which itself by the <unk> decision.
It's probably the same in Africa.
Can you give us some color in terms of like what.
But the spending.
Well look like do you expect to have pickup in spending before a full funds decision is reached or should we really expect to see those third and fourth quarter.
Thanks Jackie.
I'll pick up <unk> first you will see spending pick up a head of Palestine.
Decisions.
First quarter was certainly the losses to <unk> as a metric.
On a three quarters so it's.
We'll build through the second quarter half to half Whiting.
42% as stated in the first half versus CPI opposite statements.
So we will be building that stayed towards from fund approval at the at the end of the year yet Katja.
And Youre right, a similar story with ISI know.
With important work with the regulators with the traditional lasers around getting the the areas of land cleave of structures.
And the like to be able to do that.
First of all our cabinet and for us to come in and really start to break ground, which will which we expected.
Moving through.
And so as you get which you really start to build up the workforce to get paper on that Brian .
During the earthworks you'll see that.
As noted in the second half.
So obviously getting a similar widening.
Our hospitals in the second half.
If you are modeling.
Certainly more at 45.
Our <unk> thought for <unk> budgeted.
Perfect. That's all my questions, Thanks, very much Tom and Nancy.
Okay. Thanks, Eddie Thank you Jackie.
Our next question comes from Josh.
Josh Wolfson with RBC capital markets.
Josh Your line is now open.
Great. Thank you very much.
Thank you for the additional color.
Cogs personally I'm wondering that 3% to 5% upside and that could take you towards the higher end of our guidance.
Great SaaS is that assuming current spot prices continue for the duration of the year or are there other sort of factors at play.
Yes, Thanks, Josh I'll, just talk you through another another level of detail in terms of what makes up that operating costs has us looking towards that.
That populated with guidance and if you if you are modeling.
Okay.
Off the back of that if you think about our unit cost of the golf.
Pulp prices is probably closer to 5% than the three.
As we look across our portfolio and the title model somewhere between three and five stock, but if you look at the drivers of it 50, the sale of our stake.
He is saliva.
And Thats contracted labor as well as employee so what we are seeing starting to come through with contracted services, whether it be specialized lab services or in general liability, bringing for large maintenance shops, we are audit LIBOR as well as widespread use.
Cutting into that.
For the first quarter.
Pat.
Actually reduced.
We couldnt get the arms and legs.
Culmination of labor availability in Western Australia.
Thomas.
That relates to that into that community.
So you will see.
So think about three.
<unk>, 50% of your operating costs a lot of it driven by what we're starting to see come through.
For some of our contracted services around around our operations globally.
And given the quantity of that commodity than that 5% is sort of indicative of what we're seeing flow through.
Because it is a moving feast.
We want to really see how that plays out through the second quarter, and just that will play through to exploration and that real estate plus.
Some other contracts contracted services, we're bringing forward, bringing in for some of our capital projects. So we're watching that carefully.
The next 30 to say if materials is achievable.
The real driver in that space is.
Ammonia.
Yes.
And to an extent.
Grinding media.
Okay.
Rising steel prices.
We are seeing.
Increasing pricing, probably embraces a 12% to 30% trial landed cost.
Two really representing now.
A small portion of our operating cost probably late fees.
Feedback impact plus growth.
What we're monitoring more carefully on the material.
Sales of consumables is what's happening in the global supply chain.
There's obviously a higher freight costs, but it's also monitoring carefully to ensure.
That remains to keep our operations running sour privacy.
Keeping a wary eye on cost, but more of that actively monitoring our so Paulo summarized Creek.
Nicole materials and consumables and then the last one.
50% is energy.
The energy and the driver of that stable, we should see.
With over $100 a barrel.
That's flowing Josh I think what's going to drive.
That number will be will be labor.
As we look at our business through the remaining part of the.
Yes.
Great. Thank you for that.
Okay.
On the topic.
There were some disclosures there.
Apply chain challenges as well as I guess earlier commentary Rob provided on.
Yeah.
Some of the challenges in Ghana.
Wondering maybe I have some naysayers back from 2008 2019 these issues as well.
Yes.
A jurisdiction or kind of localized item on the supply chain for <unk>.
Specific.
Areas or is it specific components.
Is it across the board.
Yes, its more its both specific components Josh.
In the Africa.
Vehicle.
It's getting drilled.
We paid <unk> pit and underground to two to the opening up development fronts.
And it's the equipment suppliers biggest one.
Thank you Monica.
All the components together, but there are some components that build up which means there is a line that equipment coming through for the African example, it's drills, which will be impacting the bonding industry likely just a particularly it's a bigger underground drills at critical time, you're not putting up sublingual shrinkage side of that.
That's the specific fitbit talk of equipment.
While our China issues.
And then the.
The borders of the global border closures with specifically Western Australia, and some of the key resource people that come out of Western Australia, and so we've had.
Some challenges navigating back and forth for some of those border restrictions that are now open.
That flowing.
So that is less of an issue, but we're still seeing those supply chain constraints.
Getting some critical.
Got it really was.
Specifically drills.
The last project received keeping our whole trucks are great those are water trucks. So there.
Those are coming through but as Tom rightly says it is specific types of tier specific types of parts.
Great and is there anything else that you could think beyond drilling equipment that had that below that level.
Hi.
Is that really kind of number one.
I would say okay.
I think the talk.
Equipment saw that's the one that's a particular issue for us Josh.
<unk>.
The area that is going to be Cogs.
For our supply and cost that we need to monitor.
Kind of earlier was going to be live I.
I think that's going to be <unk>.
Robert.
And obviously some of the consumables just to ensure that we're managing out relating to our global supply chain is long term relationships and we've been monitoring that very very closely it's all suddenly.
Decisions, we're making to two.
De risk.
Some of our operations.
Knowing that vis vis issues potentially going to be weak.
The load in Nevada industry for some time that decision, we're looking at around a bigger underground to dropdown and open up a third level and have more headings for which to payout to tight or is this derisking that operation civic.
<unk> backed by key investment now too.
That operation that beta managed some of this volatility and disruption is coming ahead. So we're starting to make decisions.
Managed some of these issues going forward.
Okay. Thank you very much.
Thanks, Josh.
Thank you Josh.
Our next question comes from.
Tanya.
With Scotia Bank.
Your line is now open.
Great. Good morning, everyone and thank you for taking my question so on the money that al.
Sorry, if I could.
Just wanted to just come back to the guidance. Thank.
Thank you provided and thank you for that I, just wanted to make sure I heard it correctly.
But a static on the phone.
Tom did you say that we're looking at a 100000 ounces below $6 2 million.
For this year.
Yes, good morning, tenured, yes, that's correct and if I give you a little bit more color on that.
So that's the.
100000 ounces below the six to eight point that were starting to say open up.
Turning to doing that.
Is that a ramp of about 100000 ounces.
70% of that.
Will come from <unk>.
Debates around to really Derisk that operations.
As we move forward.
I think about 20% will come from.
Cripple Creek.
Good look to move towards that simpler operation just modeling and hateful H C.
The license was saying the truth.
The impact of the <unk> surge through the latter part of last year and the start of this year plus a very.
Fully vaccinated at that site. So we have got.
So work to do now.
To get ahead of.
But on the pads.
And the move to a simpler loan along the last operation will contribute about 20% and then the remaining 10% was made up across the street.
<unk>.
Pretty soon.
The first quarter so.
Around about 100000 ounces 70, 70%, so Baker underground 20%.
So it's a bit of activity not impressions.
Okay and.
Does your guidance you mentioned that 50, <unk> second half and obviously.
In our first patent is going to be repacked.
That result.
Asset.
Breakdowns that you provided in your Q4 numbers still stand the only one I noticed that was what.
Steve I think guidance had been equally weighted but I think you mentioned Q2 is going to be weaker just wanted to make sure I understood that correctly.
That's correct you will see you will see.
When you look the whole production with way with Bonnie it kind of scale yet to see a bit of a say sold for the course of the year. So you will see on ball, let's see.
The crop in the.
Second quarter, you will get a call and again in the third and it will drop again in the fall, but its about evenly weighted across the two highest with a bit of that fleets or effect.
You're just saying the different the different metals come through as we monitor the different.
The different sizes of Bud months tenure.
Okay and just my last question.
On the guidance I just wanted to see how have your APRA farmer Mac's Dan.
With respect to one across these jurisdictions have you seen an improvement in productivity and performance.
Certain accounting certainly coming out the other side.
Quickly walk through the four regions.
Kenya coming out the other side certainly in Canada.
Six four.
In Norway, we are still.
Very strict with our protocols of testing.
And also lighting because of our close connections with the first nation communities around that months away, we have kicked some pretty stringent controls in place.
But in general certainly say, Canada and in the U S Cripple Creek and Victor open up.
Ghana is.
As is common in settings.
<unk> is progressing well.
Australia is way.
I think Australia in general is awash with the borrowers at the moment sorry.
<unk> is still being impacted through Panama ability, but started to come out. The other side of that is that you're really going to hurt a bit in the communities that are in Australia.
<unk> solid.
And.
Pretty solid through the <unk> yet.
<unk> and Cerro <expletive> and <unk>.
Okay. So it looks like youre coming through it.
And then I will leave it to one more question just if I could.
You mentioned that closely monitoring.
Labor and obviously consumables can I ask about labor do you have.
Yes.
Contract Union contracts are out there at that come up for renewal this year that could put more pressure on your costs above and beyond.
We have got.
Our contract negotiations in process currently in Ghana.
Mexico scheduled for July <unk> and processing and then Suriname.
It's been delayed a number quite a number of sites that are covered by collective agreements.
Dave.
But.
Theres nothing that were seeing unusual in terms of how those negotiations are proceeding.
Okay. So that's within your guidance range assume whatever wage inflation is assumed in your guidance for these contracts.
That's correct.
And what about your supply chain global supply chains do you have any renewals on cyanide and our other that's coming through.
No theres nothing nothing coming through in the.
Medium term on that front tenure for that was more more managing the landed cost from the input cost of gas.
And the logistics costs of getting it to where it needs to go.
Okay and nothing else is in the supply chain that has to be renegotiated.
Nothing nothing material dependent.
Okay perfect. Thank you so much Alan I'll, let someone else ask.
Thanks Damian.
Thank you Danielle.
Our next question comes from <unk>.
Boston, Linda with Bank of America.
Your line is now open.
Thank you operator, good morning, Tom Nancy and Rob as well thanks for the update today.
If I could maybe just.
Good morning, and congratulations on your new role.
Yes.
Talking about that guidance.
Brian .
And within our guidance range, but certainly saying a push towards the top 5% that is making assumptions around.
Our fuel levels, and and incorporating netting out our costs and <unk>.
Is that a retained dollar.
Put barrel change in oil price.
Our free cash flow was impacted by $50 million per year.
But for every $100 increase in gold price, we generated an additional $400 million of free cash flow for the revenue side is certainly compensating for the additional cost of diesel oil.
But.
The assumptions, we're making around the current oil prices and as we're thinking about what oil is going to do going forward. This year that is that is being incorporated into that indication, we're giving around the move to the top end of that guidance, but obviously, we want to understand that this world a bit more through this quarter and.
As I indicated in the in doubt.
That will provide a further update with the Q2 earnings.
Okay. That's excellent color. Thank you and then on the cyanide costs typically cyanide pricing is very regional so I'd be curious to know if youre seeing.