Q4 2022 Newmont Corporation Earnings Call
[music].
Yeah.
Good morning, and welcome to Newmont's fourth quarter results and 2023 guidance conference call.
Participants will be in listening only mode.
Should you need assistance, please signal a conference specialist by pressing the star.
Followed by zero.
After todays presentation, there will be an opportunity to ask questions. Please note. This event is being recorded.
I'd like to turn the call conference over to Tom Palmer, President and Chief Executive Officer. Please go ahead.
Okay.
Thank you operator, good morning, and thank you all for joining newmont's fourth quarter results and 2023 got it cool.
Today, I'm joined by Rob Atkinson, and Brian Tebo interim CFO , along with other members of our executive team.
And we will all be available to answer questions at the end of the call.
Before I begin please note that a cautionary statement and refer to our SEC filings, which can be found on our website.
Okay.
We have quite a bit to cover this morning. So I wanted to give you on either of the topics we will be sharing.
First I'll cover the highlights for 'twenty, two and a strong finish to the year.
But I'll past broad types through the financials.
Next Rob will walk us through our operational results for the fourth quarter and give a preview of what to expect this year from each of our operations and at two key projects.
I'll, then summarize our 2023 and longer term outlook.
Along with our capital allocation strategy.
And the expectations for 2023 dividend.
And finally, I'll wrap up with some comments on our proposed combination with Newcrest.
So with that let's get started with our 2022 follow ups.
<unk> finished the year with a strong fourth quarter.
Leveraging our scale.
<unk> and <unk>.
Unmatched portfolio of World class assets to deliver industry, leading ESG operational and financial results.
We are well positioned to continue leading our sector, whilst remaining firmly grounded in our values and driven by our purpose to create value and improve lives.
Sustainable responsible mining.
As Guillermo.
When we talk about being a values driven organization, we had at the very core of this work.
The protection of the health and safety of our workforce.
This simply must be at the heart of any sustainable and responsible mining business.
And perhaps the most important thing to share with you today is that we have remained fatality free.
About four years.
We remain committed to continuously improve our discipline and dedicated approach to safety.
Maintaining a clear focus on eliminating the risks that could lead to a fatality.
We do this through the globally consistent management of the critical controls that must be implies at all times to prevent a fatality.
Last year, we completed more than 620000 interactions by our leaders in the field that we're focused on these controls a process.
Process, the Waco critical control Verifications.
This was an increase of more than 30% over the previous year.
Demonstrating the importance that we place on visible felt leadership to maintain a safe environment. At every one of our 12 managed operations, our major projects and exploration sites around the world.
We also continue to work to improve the effectiveness of our critical control verifications through increased coaching and development of our frontline leaders.
And last year.
<unk> latest from across the world.
The pilot in field based fatality risks and culture reviews at sites.
Do not typically work at it.
The purpose of these reviews to identify any systemic issues or improvement opportunities at our managed operations.
As a direct consequence of all of this work in 2022, we experienced a 36% reduction in the number of significant potential events from the previous year.
However, health and safety is an area, where you must always find time a sense of chronic.
We still experienced at least one significant potential event every 10 days at each and every one of these are an opportunity to learn and improve.
At Newmont, we recognize that a strong safety culture is not only an indicator of a reliable well run business.
Is fundamental to sustainably delivering on our commitments to our employees.
Contract with partners and our local communities and all of our stakeholders.
Newmont delivered a strong fourth quarter.
Safely meeting our commitments in 'twenty two.
And finishing the year in a position of strength with momentum coming into 'twenty three.
We met our original guidance for production sit back in December 'twenty one.
Producing an industry, leading 6 million ounces of gold and $1 3 million gold equivalent ounces from copper silver later this week.
We ended the year in line with our guidance ranges for unit costs as.
As we continue to manage our exposure to the global pressures on input prices and labor costs that have impacted the entire mining industry.
These results generated $4 6 billion and adjusted EBITDA.
And $3 $2 billion in cash from continuing operations.
With $1 1 billion and free cash flow after reinvesting to $7 billion into our business last year.
As a key part of that reinvestment.
Exploration has always been and continues to be a core competency at jpmorgan.
This is a critical component of our long term strategy.
This morning, we announced that our global reserve base now sits at 96 million ounces.
And we have successfully replace depletion for the year.
In fact in the almost four years since we acquired Goldcorp and established the joint venture in Nevada.
We have replaced all of that inflation with strong reserve additions.
As well as a robust base with gold reserves. We also reported nearly 600 million ounces of silver reserves.
And 6 billion pounds of copper reserves, providing natural exposure to a metal of growing importance for reducing carbon emissions.
Throughout 2022, we maintained a strong flexible investment grade balance sheet, whilst continuing to reinvest in our future.
Providing shareholder returns of more than $1 7 billion.
Try out established dividend framework.
These results along with our stable financial position and strong free cash flow from the world's largest attributable gold production device.
<unk> positioned to safely deliver on our commitments in 2023.
And with that I'll hand, it across the broad to take us through our financial results for the fourth quarter. Thanks, Tom and good morning, everyone.
Let's start with the financial highlights for the quarter.
Newmont had a strong finish to the year in the fourth quarter, we delivered $3 $2 billion in revenue driven by higher sales volumes and strong gold prices adjusted EBITDA of nearly $1 2 billion.
An impressive $4 6 billion for full year, despite historically high and industry wide inflationary pressures and strong free cash flow of $364 million.
It is worth noting that fourth quarter free cash flow included nearly $650 million of capital spending and increase of more than $200 million for the fourth quarter of last year. As we are now firmly in a period of meaningful reinvestment.
This demonstrated commitment to reinvestment as a core component of nuance a clear strategy to progress the most profitable projects and our industry leading organic pipeline.
Other strengthening newmont's portfolio for the long term.
Compared to the third quarter Newmont delivered strong top line performance with a 16% increase in coal sales driven off the back of a strong fourth quarter production.
And an improved realized gold price of $1758 per ounce.
However, fourth quarter GAAP net loss from continuing operations was $1 5 billion or $1 87 per share driven by approximately $2 billion of noncash accounting adjustments.
These adjustments, which are further detailed in our earnings release and 10-K include $700 million of noncash reclamation adjustments primarily related to higher estimated closure costs that kind of culture, and porcupine, resulting from cost inflation and increased water management costs and not on operating portions of the sites.
And $1 3 billion of noncash.
Impairments, which were comprised of approximately.
Approximately $500 million of asset impairments at <unk> and $800 million of goodwill impairments at Cerro <expletive> and <unk>.
The site specific goodwill amounts originated from the Goldcorp purchase price allocation for years ago, which was based on our best estimates of each site's value and country risk assumptions at that time.
It should be noted that are incrementally more value generated a tennis keto than was originally allocated at the time.
As tenants keto alone has since delivered more than $700 million in annual synergies far exceeding the value of these noncash charges.
Taking these adjustments into account along with other immaterial items, we reported fourth quarter adjusted net income $348 million or <unk> 44 per diluted share, which despite slightly higher costs from inventory write downs and royalties represents an increase of 17 <unk> from the previous quarter.
Delivered by our balanced global portfolio. These strong results demonstrate new months continued financial strength and stability, enabling us to be flexible and resilient as we continue to generate long term value for our shareholders heading into 2023.
Now I'll hand, it over to Rob for an update on our operational results for the fourth quarter and a preview of 2023.
Thanks, Brian and good morning, everyone.
As Tom mentioned, our team safely delivered an exceptional finish to the year and we're very proud of what our 30000 strong newmont team was able to achieve during 2022.
Despite the very challenging and volatile operating environment. The whole mining industry was navigating today I'll cover the site level highlights for the fourth quarter, along with an overview of what to expect in 2023 from each of our operations and our two key development projects.
So turning to the next slide let's get started with payment schedule.
When we acquired Goldcorp in 2019, we committed to delivering synergies of $365 million per year by applying the newmont operating model to deliver value from G&A supply chain and most importantly, the implementation of our proven full potential continuous improvement program payments.
<unk> alone has blown that target out of the water delivering more than $700 million in annual synergies since we closed the acquisition nearly four years ago.
Core capability at Newmont is safely operating tier one open pit and underground mines and over 80% of this value is delivered for mining and processing improvements and we have not stopped yet.
<unk> delivered a strong fourth quarter setting a new record in December for the tons, we moved ex pit and exceeding our full year production guidance for the third consecutive year under the new operating model.
During the fourth quarter mining was primarily from the Chile, Colorado pit as planned.
<unk> and lower gold grades and higher levels of silver lead and zinc content.
And as we progress this year, we expect this mining sequence and trend continues at our two pit following the talent mine as previously communicated and in line with our long term mine plans.
In the first quarter, we expect gold grade to declined more than 20% compared to the fourth quarter due to this mine sequence and for the year, we expect gold production to be around 25% lower than 2022, well so our gold equivalent ounces will be steady year on year.
In South America, <unk> delivered slightly higher production during the fourth quarter compared to quarter three.
With higher production expected in 2023 from higher Leach recoveries due to the continued use of injection leaching.
We continue to progress our review of the scope and the pace of the sulfides project and expect to spend approximately $300 million to $350 million of development capital in 2023 and again in 2024.
This spend is related to advanced engineering procurement and completing camp construction.
As Marin the site delivered its highest quarterly production in two years due to record mill performance combined with higher grades mined from both the Miranda and marine two pits.
Marine is expected to deliver lower production and higher unit costs in 2023, as we begin stripping. The next phase of the marine pit, resulting in lower grades presenting to the mill as part of our planned mine sequence for the site.
And in particular in the first quarter, we expect greater declined more than 15% compared to quarter four as we enter the stripping campaign.
And finally at Cerro <expletive> the site delivered another solid quarter due to higher grade and strong mill performance production from Cerro <expletive> is expected to steadily increase each quarter in 2023 due to sustained productivity improvements from our newmont operating model. This will result in progressively higher tonnes mined.
And process throughout the year.
We continue to progress the first wave of district expansions at Cerro <expletive>, which will contribute to the higher production. This year and we just hit an important milestone with the first blast to commence development at the silica cap portal.
In December this project received approval for $200 million.
It will be spent over the next two years to develop Cerro Negros future through both the <unk> and eastern districts and these funds will primarily be spent on underground development activities.
This investment will extend mine life beyond 2030, and we expect to see annual production increase to above 350000 ounces beginning in 2024.
Since we acquired Cerro <expletive> nearly four years ago, we've improved underground development rates by more than 50% and double the size of our land package over a thousand square kilometers demonstrating both our operating capability and our confidence in the untapped growth potential from this highly prospective gold districts.
In Argentina.
In North America, our Canadian operations, all delivered higher production in quarter four.
A combined increase of 30000 ounces compared to quarter, three due to strong grades and improved productivity.
At Eleonore. We finished 2022 was our strongest quarterly performance of the year and importantly key roles are all Phil and the team is ready to deliver higher ounces in 2023.
This increase is largely driven by sustained productivity improvements as higher underground mining rates and strong mill performance will offset lower grades coming through.
At Musselwhite, we delivered our best quarterly performance in terms of gold production development meters and total tonnes mined in more than five years, we anticipate production in 2023 to be wasted around 65% for the second half of the year steadily increasing each quarter as mining continues in the.
PQ deeps area.
Paul campaign delivered its strongest quarterly performance of the year and annual production is expected to slightly improve in 2023 due to higher tonnes mined and higher grade.
We continue to progress the project to replace production from the Hollinger pit production with a layback of the more pet and investment decision is now expected in late 'twenty three as we've been able to implement improvements to extend the life of the hollinger pit.
And then <unk>, we achieved our highest December production in over three years, resulting in a solid fourth quarter from client funds mined and placed on our leach pads.
Production in 2023 is expected to decrease slightly due to lower grades as we extend mine life through the stripping of a layback in the Globe Hill pit.
In 2023 are for North American operations are expected to deliver nearly 1 million ounces of gold. This increase over 2022 will be safely delivered by a strong leadership team of experienced general managers, who are in place.
Stable workforce and without challenges and constraints from Covid that we had to navigate through during the first half of last year.
According to <unk> delivered an exceptionally strong quarter with.
It was 20% higher gold production and more than 50% higher copper production compared to quarter three.
We said two important records in the fourth quarter.
A new all time monthly production record in December for both gold and copper on the back of higher grades and strong mill performance.
And the best quarterly performance for autonomous haul truck fleet for the tons moved per hour a key metric for every open pit mine.
Reaching these important milestones at a cornerstone operation like bought into is a tremendous achievement and we are proud of the hard work and dedication that our team has demonstrated and implementing leading technologies to promote both safety and productivity.
The lessons, we have learned we will benefit not only new modes that the gold industry as a whole and we will look to leverage this technology and our experience at boddington as we expand the use of autonomous solutions across our global business.
In 2023 gold production is expected to remain steady compared to 2022.
Continued strong mill performance and tons mined offset lower grade associated with further stripping and boddington so fit.
Panama and maintain strong production throughout the year and reliably delivered a solid fourth quarter from higher tonnes mined combined with higher grades. Despite an extreme weather event and record rainfall across northwest Australia late in the quarter.
Oil production is expected to be lower in 2023, and 2024 due to lower grades from the planned stope sequencing to allow for the underground construction of the crushing and conveying infrastructure associated with the Turner mine expansion project.
Due to the extreme weather events and associated flooding. The main access route for supplies to turn in line. The tenant line track has been closed from late December through mid February .
And although our fourth quarter was largely unaffected by this event critical consumables, such as cyanide explosives and other reagents that can only come to say by road have not been able to be delivered over the last six to eight weeks.
And we have consumed the stocks that we maintained on site.
As a consequence, we had to cease milling operations at <unk> over the last few weeks and this will have an impact on gold production for the first quarter.
However, the bottleneck autonomy is the mining operation not the Midland plant and mining has continued throughout this period with the ore being stockpiled in front of the mill.
We restart the mill tomorrow and expect to recover the ounces that will be delayed from Q1, but that now means that we will have a production profile. This year that will be strongly weighted to the second half.
And with this impact we expect only around 10% of <unk> 2023 gold production to be delivered during the first quarter.
We also continue to progress the expansion at <unk>.
Overall progress is noted 50% with engineering procurement effectively complete protecting the project from any new inflation rate or supply chain challenges in the coming years.
373 meters of concrete lining has now been installed in the upper part of the 1500 meter deep shaft and this furnishing of the chassis continues to be the critical path work for the project.
Underground development for the project has largely been completed with crusher and conveyor chambers, all fully excavated and ready for construction of infrastructure to commence.
And as I signaled last July following the completion of the four important project milestones of shaft.
Headframe construction underground development and the opening of state and international borders in Australia, We would assess project capital cost and schedule.
We are expecting total capital costs of between one two and $1 3 billion and the project completion in the second half of 2025. This is consistent with the direction. We provided last July .
Tena mine expansion two remains a key project newmont's portfolio and underpins 10, <unk> future as a long life low cost producer well into the 20 <unk>.
Yeah.
Turning to Africa.
Our two operations in Ghana delivered this year's strongest quarterly performance in Q4.
Increasing production by more than 45000 ounces compared to Q3.
In December <unk> delivered its strongest monthly production in seven years on the back of higher tonnes mined higher grades and strong mill performance.
In 2023 achieve is expected to deliver lower production as we progress stripping of the next layback in the pit.
And as a consequence 2023 gold production will be around 20% lower than last year as a result of lower grades.
Poor grade is expected to decline by more than 40% in Q1 compared to Q4.
Moving across to Hustle the mill achieved record throughput during the fourth quarter benefiting from higher grade and mining rates at <unk> underground really starts to hit its stride.
In 2023 gold production from a hassle is expected to steadily increase each quarter as we open up more draw points and the <unk> underground lifting mining rates and resulting in the delivery of more higher grade ore to the mill over the course of the year.
As a consequence gold production will be strongly weighted to the second half of the year with around 15% of the year's production to be delivered in the first quarter.
And I am pleased to announce that we are making great progress with our new mine in Ghana have one off where we gained land access and have commenced construction and highway relocation activities.
How far north expands our existing footprint in the a handful complex I think more than 3 million ounces of gold production over an initial 13 year mine life.
And when combined with a half Lasalle just 30 kilometers away, we expect to deliver an average of 850000 big pallet 350000.
We expect to deliver an average of 850000 gold ounces per year through until at least 20 <unk> from a handful of complex.
Leaning into one of newmont's core capabilities, we have conducted extensive regulatory and community engagements to ensure that from the very start to this project.
And maintain social acceptance.
The process of engagement is critical work that cannot and must not be rushed.
As an African proverb that we consistently apply newmont. If you want to go fast you go alone. If you want to go far we go together.
And as I signaled last July gaining land access and commencing construction activities with a key milestone for us to reach in order to assess project capital cost and schedule.
We're expecting total capital costs of between $950 million and $1 5 billion.
And project completion in the second half of 2025. This is consistent with the direction. We provided last July .
We remain very excited about a half a law and look forward to bringing you updates as we develop this new mine over the next two years and create value from the best unmanned gold deposit in West Africa.
Finally to our two non managed joint ventures.
Our 38, 5% ownership of Nevada gold mines, and 40% interest in Pueblo Viejo contributed 145 million ounces of attributable gold production in 2022.
For Nevada Gold mines, disappointingly fourth quarter and full year production fell below the lower end of the guidance range and above the higher end for costs that were provided by Barrick in November 2022.
However, most concerning was that these two non managed joint ventures have experienced three tragic fatalities over the last 12 months.
As per the 2023 guidance provided last week by Barrick Gold production is expected to increase by around 10% from both Nevada Gold mines and Pueblo Viejo in 2023.
Both of these joint ventures are core to the newmont portfolio and we look forward to our managing partners safely delivering on their 2023 commitments and with that I'll hand, it back to Tom.
Thanks, Rob.
So, bringing everything that Rob just to cover together.
We finished 22 strongly and we are bringing that momentum into this year.
As we've been signaling for some time in.
In 2023, we're expecting to produce around 6 million ounces of gold at an all in sustaining cost of around $200 an ounce.
Sustaining capital relates to around $1 1 billion.
Exploration and advanced project spend will be around $500 million.
And we will see our highest development capital spend in a generation at around one 3 billion.
Okay.
At Newmont, we develop that business plan with discipline around the assumptions we make.
In 2023, we anticipate that the current economic environment, we will continue to be volatile.
And with this context belief that it is particularly important to understand the sensitivity of our free cash flow and all in sustaining costs to the key assumptions we have made.
We have taken a conservative view of golf priced for 2023 and.
They are assuming seven to $800 an ounce.
This table provides sensitivities to other metal prices oil as well as the Australian and Canadian exchange rates.
The 23.
We have assumed normalizing levels of inflation as we progress through the year.
With an assumption that the year over year escalation rate will be around 3%.
And as we do each year, we expect that this escalation will be offset by our ongoing discipline and delivering on full potential improvements.
This year, we are also including a guide on the sensitivity to our three mine cost areas.
50% of our direct cost of labor and area under continued pressure in our mining industry.
We have assumed a labor cost will increase four 5% compared to last year before returning to more historical levels.
We are keeping a close eye on contract labor, which tends to be much more volatile.
Materials and consumables account for the next 30%.
We are seeing input process for cyanide and explicit is beginning to normalize with improvements in global supply chain performance.
In addition, the process of steel we use for grinding media and spare parts is now in line with last year's average prices.
These two categories, along with fuel and energy remained highly volatile and impacted by the many macroeconomic events the load is experiencing.
High levels of inflation have a material impact on our unit costs and we will continue to remain transparent with the market as we monitor the inflationary environment over the coming months.
Turning now to seasonality on the next slide.
We anticipate the Gulf production this year will be weighted 55% for the second half.
Driven by a half of <unk>.
<unk> tena.
<unk> and Cerro <expletive> as Rob just explained.
Q1 is expected to be lowest gold production quarter with approximately 21% of annual production.
Although we expect to have relatively steady spending.
Both our sustaining and development capital throughout the year.
We anticipate that production will increase and unit costs will decline each quarter as the year progresses.
Turning to our five year outlook on the next slide.
Supported by the industry's most robust balanced and diverse portfolio of operations and projects.
We expect to deliver strong gold production and improving unit costs over the next five years.
Bringing our OLED sustaining costs to around 1000 to $1100 per ounce by 2025.
This cost improvement will be driven by strong production from our world class assets, Boddington, Panama, a hopper and <unk> combined.
Combined with the delivery of new low cost ounces from our investments in our half on all 10 of my expansion too and the district expansions at Cerro <expletive>.
Our near term cost reductions are also supported by the delivery of full potential cost and productivity improvements across our 12 managed operations.
This solid outlook.
Combined with the strength of that team and the quality of our assets.
The ability to generate substantial attributable cash flows throughout the Gulf Cross cycle.
Allowing us to confidently execute on our capital allocation priorities and maintain our position as the world's leading gold company.
Our capital allocation priorities remain unchanged with a clear and balanced strategy.
First and foremost by time, the industry's strongest balance sheet with financial strength and flexibility.
Second to reinvest in our business through exploration and organic growth.
And finally to return excess cash to shareholders through dividends.
I'll take a moment to step through each of these priorities explaining the significance to <unk> and how they work together in order for us to deliver a long term stable outlook.
Starting with our first priority.
<unk> has maintained an investment grade balance sheet with financial strength and flexibility to ensure we have the right balance between resilience.
<unk> and the ability to react.
We have made deliberate efforts over the last few years to build the industry's strongest balance sheet.
Growing our cash balances to $3 7 billion.
With total liquidity of $6 7 million and no debt due until 2029.
This robust platform has allowed me about to enter the characterize of the commodity cycle.
Uniquely strong financial position.
Enabling us to be resilient and agile in times of market instability.
Our second priority is to reinvest in our business through exploration and organic growth.
Ensuring that our current and future reserve and resource position can continue to support our industry, leading portfolio of operations and projects.
Our long term outlook assumes annual investment of around one to $1 $2 billion in sustaining capital.
Around $4 million to $500 million in exploration and studies.
And around 800 to a billion dollars in development capital.
Combined this is an average annual investment of around $2 5 billion.
A critical component.
Strategy to sustain strong production levels.
Over the long term.
Okay.
We are currently period.
Okay.
The projects that we have in execution.
And Panama.
Yes.
Nope.
Due to the higher capital.
Capital spending this year.
<unk> expects to reinvest approximately $2 million in 2023.
Which is around $400 million.
Average.
Right.
And it's also important to note.
But exclude our equity made contributions to support the pillow via expansion.
Operator.
Okay.
Maintaining our strong production profile for the next decade.
2030 years.
Our portfolio of operations and organic project pipeline.
Produce more than 6 million ounces of attributable.
Each year.
At least 2032.
Of any company.
Yeah.
This profile.
While the production of approximately 1 million gold equivalent ounces from copper silver lead and zinc.
Importantly.
The majority of this metal production comes from the most favorable body jurisdictions.
Balanced across 12 finished operations to not managed joint ventures in non countries around the world.
And it is this strength and scale that.
That enables me to confidently execute on a clear and consistent long term strategy to deliver value to our workforce and our local communities and to our shareholders.
Then our final capital allocation priority is to return excess cash to shareholders, which is primarily done through our industry leading dividend framework.
Recognizing the importance of shareholder returns two and a half years ago <unk> was the first in the gold industry to introduce a structured dividend framework.
This framework provides shareholders with a stable base dividend of $1 per share.
Set of that gold reserve price of $14 40 to $800 per ounce.
And that variable component based on incremental free cash flow above that base assumption.
As we do each year, we have a value added for 2023 dividend payout in conjunction with our annual business planning process.
The expected Brian to the dividends to be paid this year is $1 40 to $1 <unk> per.
Sure and this range has been calibrated at a conservative 7900 dollar gold price.
Anticipated incremental free cash flow in 2023 has been adjusted to incorporate the current input cost being experienced across the mining industry.
<unk> levels of global inflation.
The $400 million of higher capital spend above our long term average.
And considering the strength of our balance sheet during this period of meaningful reimbursement.
Taking all of these considerations into account.
And in line with what we have been discussing since our last earnings call in October .
<unk>, we declared a fourth quarter dividend of <unk> 40 per share $1 60 per share on an annualized basis.
This continues to be the highest dividend per share in the golf sector.
And within the top 80% of large cap dividend payers in the S&P 500.
With this dividend declared.
We will have returned over $4 billion to shareholders through dividends since introducing our framework in October 2020.
Maintaining a dividend yield above 3% for nine consecutive quarters.
Our proven track record of returning cash to shareholders clearly demonstrates our ongoing commitment to shareholder returns and the balanced long term approach, we apply to our capital allocation strategy.
<unk> is well positioned to create value for many decades to come.
So.
I've just taken you through the gold industry's strongest business.
Now from that solid foundation.
Let me walk you through the value proposition for our potential combination with new threats.
Before I begin.
Please understand other than these prepaid remarks.
I want to provide any further details about the new price proposal at this time.
<unk> is a live engagement.
Our proposal would combined two of the sector's top senior gold producers.
And set the standard for sustainable and responsible gold mining.
Newmont has a long history and shared heritage with Newcrest.
Establishing our Australian subsidiary way back in <unk> 66.
Our subsidiary that would become Newcrest. Some 25 is lighter.
As part of that shared history. Our companies also have shared commitment to a strong safety culture and leading ESG practices.
It is in addition to the complementary portfolios of World class assets located in low risk Bonnie jurisdictions.
Our proposed combination with strengthen our established position in Australia, creating efficiencies and value with a shared workforce and large scale supply chain optimization opportunities.
And it will build upon the district potential in British Columbia as holiday perspective Golden Triangle.
Through a combination of operating mines and development projects that will deliver value through shared technology local capabilities and ore body experience.
With our scale and track record of successfully managing some of the work Monte worlds top tier one assets.
This combination would leverage <unk> experience from the Goldcorp acquisition.
Which demonstrated that we can generate meaningful improvements to performance stability and profitability.
Specially at large open pit and underground operations.
We have delivered more than $1 billion in annual synergies from our Goldcorp acquisition in 2019.
Far surpassing our initial estimate of $365 million.
And improving the ongoing performance of the acquired assets through new months operating model.
At payment <unk> alone, we have generated over $700 million of annual synergies by optimizing the processing plant and mining fleet.
While sustainably addressing community relations issues that had to disrupt disrupted that sought for over a decade.
And as a reminder.
Upon completion of the Goldcorp acquisition, we focused on optimizing the combined portfolio.
<unk> asset sales of more than $1 $5 billion from that combined portfolio within the first 12 months.
And given the challenges that the mining industry is currently facing from a volatile macroeconomic environment. There has never been a better time for newmont and newcrest to come together.
We are disappointed that the decrease board rejected our proposal.
And we are currently engaging with the new credit team in relation to their offer to provide us access to more information.
And if we can reach an agreement.
This combination of industry leading talent.
And decades of collective experience would create significant value across the global business with an ideal mix of gold and copper strengthening new months overall position.
As the world's leading gold company.
As I indicated I will not be out of Mike provide any further details on the new crisp proposal at this time as this is a lot of engagement.
But I want to be clear with everyone on today's call that we will continue to be disciplined as we assess all of the options to move forward and we will act in the best interest of our shareholders.
Yeah.
Thank you and with that I'll now turn it over to the operator open the lines up with questions.
Certainly we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone.
If youre 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 will pause to assemble our roster.
The first question comes from the line of Emily <unk> of Goldman Sachs. Please proceed.
Good morning, Tom and team. Thank you for the update this morning.
My first question is just around the two expansion projects that you have going on Tom Mike Hoffman NAS.
I know you're targeting first gold by the second half of 2025, but can you talk through what perhaps.
Key constraints that you may face in achieving that timeline is it labor or is it supply chain I guess, how much buffer is being built into that construction period.
Thanks, Emily and good morning.
But size projects.
As Rob was describing important milestones.
That allow us to.
Assess both schedule and cost to complete.
So for US I had to hop I know it was achieving land axis, which which we have achieved so that means we can now essentially <unk> back and build a mine that we've built three talks before.
<unk> is a hopper to sign modest Jim it's the same modest Miriam our EPC contractor is like a podium who had been apple pay partner in Ghana.
20 years, so we know how to build a hopper north very well we've hit the key milestone in terms of land access.
Communication towers are going up land buying playbook, a cat gear on hard stance temporary fuel facilities in place.
And are.
They the schedule and the cost we provide we are highly confident in delivering because we've hit that critical mass.
For Panama two.
A critical milestone for us was completing the raising of the shaft.
<unk> the development underground so it's a massive chambers underground that our monarch team has very successfully completed its slightly completed the installation of the headframe about that shopped and the mobilization of the key the key team very specialized team that will spend the next two years.
Hello, I am heading down that shaft.
Forming concrete and then installing parts of the infrastructure and then a separate team that will get underground to install provides and crushers. So with that key milestone we have confidence in both the schedule and the cost to run that project to complete engineering done procurements done with 50% complete so that as well.
Two important milestones, which is why we hold back to know before we provided the update so Emily you should have a high degree of confidence Nemo team to deliver those projects, we didn't schedule and cost.
Great. That's very helpful and just a follow up around the cost outlook for the next couple of years.
I know you've mentioned, we should expect to see costs come down by 2026 on some increased production, but as we think about the 2024 and 2025 outlook is the step down there from 23 through 26 also attributable to some production.
Increases.
Is there any sort of expectations.
Labor and consumable cost also coming down in that period is small.
You assert was certainly expecting cost inflation levels that this year to be the same as 22.
We do assume a little bit of easing in 'twenty four five and six so that is partly a driver.
In 'twenty four.
There's also the work we're doing on productivity improvements and the additional ounces that you see coming through in that production profile.
Big Martin there is some that contributes to that as kind of scale.
It's a poly metallic mine the gold equivalent ounces stay pretty stable, but depending on which people are in the gold ounces change quite significantly year on year as you're saying 22 to 23, so it'd be a year of high gold ounces that obviously helps your all in sustaining cost per gold. So there's some easing of inflation in 'twenty full productivity.
<unk> and 'twenty for some some more ounces from lower cost operations coming through 'twenty five 'twenty six 'twenty seven is really driven by the low cost ounces coming in from the investments, we're making Cerro <expletive> Panama.
And from a non managed joint ventures will say, some low cost ounces coming through from the Pip Levy Idaho expansion.
A number of factors.
Great. Thank you.
Thanks Emily.
Thank you.
Next question comes from.
Jackie.
Chris below ski.
With BMO capital markets. Please proceed.
Okay.
Thanks, very much and congratulations on the quarter.
First question I wanted to ask regarding your press release, you came out with a little while ago.
Im sorry.
Is that what you announced with Natasha.
I think it is.
I just wanted to be joining you at some point maybe in about a year or so as your CLO can you talk a little bit about.
But what he thought of bringing them on and maybe what Rob I think there's going to be doing in his new role.
Good morning, Jackie and Natasha withdrawn and maybe they'll private feels better.
Clutter pronounce he's not.
What part of a well governed.
Company.
I think part of our hallmark of Newmont for many many years.
Is the work we do to ensure that we continue to develop our internal talent, we continue to strengthen our team.
Bye bye looking for opportunities to bring in external talent.
As I do the work with with our board and with my Executive team. We are constantly challenging ourselves to where we can we continue to continue to strengthen what is already a strong to ensure that we are positioned to address the but the risks and opportunities out in front of us.
So over the course of this last 12 months, we have strengthen that general manager to a.
Across our 12 managed operations, we have the strongest set of general managers in my decade, with Nemo and there is a mixture of internal promotions and bringing in some external talent.
We have strengthened our CIT, therefore, five senior Vice President team, so David fraud coming into run out projects one of the best in the industry for project delivery and a future later of Newmont joined Us last year.
For senior Vice Presidents.
<unk> is coming out.
Internal appointments.
And promotions within our organization and I would argue we have our strongest operational team in App in my 10 years at Veeva.
We've brought in Arab Qunar, joining us from Anglo American was running anglos copper business in Chile, strengthening the leadership and our technical team.
Take us too.
Our next chapter.
You must journey and attached his appointment is a continuation of looking to continue to do.
To build on what is already a strong thing.
The nature of these sorts of some appointments as their long term.
Are you looking to understand how you strengthen this business over the long term. So as you saw the announcement Natasha could be up to 12 months before she joins us.
And there'll be a very orderly transition at that time with Rob and then rolled off to more than four years in the CFO role will then turn his mind working with me on the next opportunities that we have within our portfolio. So this is about looking at where we want to place their organization strategically insurer.
We're looking to continually build a strong team and ensuring that we've got a well governed.
Stable team for the long term.
Thank you if I could ask a second question.
Your dividend.
$700 gold price and I know you've noted that.
It looks fairly conservative today.
It is obviously very volatile.
Can you talk a little bit about how you plan to address.
That dividend or or if there's any upside or somewhere.
Somewhere around current levels.
Or could we see.
That does that range that you mentioned earlier.
Maybe call offer.
Darren.
Yeah, Thanks, Jackie I think I.
I think we've.
When we take a conservative view to Gulf prices I'll stay tuned.
Sitting at a seven or $800. We are in a volatile world. There's a lot of experience that we bring into into our consideration of 23 based upon.
<unk> 22 flight out.
There are a couple of years before that so.
There are certainly lots of upside risk on Gulf prices, you look into 2023 equally there are a lot of factors that predict downside risk to go process. We look into 2023, you already have to get back to late October .
So the gold price was sitting down at $6 50.
We're enjoying it sitting above <unk> hundred dollars at the moment.
When we sit here in February .
My title fairly cyber view as to how 2023 might play out both in terms of golf products and in terms of inflation and we're ensuring that we are positioning <unk> to be strong and resilient through what I anticipate will be a volatile year.
We've set up our range at a 700 dollar gold price of $1 40 to $1.
And the dividend we declared this morning is set at $1 60, so that gives us some opportunity within that range to assess how the year plays out and I'm confident that every quarter, we'll have some good robust device without board around what the appropriate payout is but we certainly built a range that allows for some potential upside in golf.
Cost to play out through the year, but we'd want to see that play out rather than attempt to predict what gold baidu or inflation might do.
Our anticipated, but you have very volatile.
I like to sneak in one more question.
Guy for Jackie.
Alright, thank you.
We had dinner.
Yes.
December in New York, and you talked about.
And meaningful growth at that point in talking about how that would help irrelevant or.
Maybe.
Some new shareholders your new funds.
On the dental side and so there's no question.
Suppose the.
I think it's very consistent with that.
For whatever reason.
The combination of Newmont's Newcrest.
Linda end up working out.
You look to another.
Gross vehicle another M&A transaction.
And the key background, there or what would be or.
What would be your response to your plan going forward.
If this transaction does not happen.
Thank you Jackie.
Let me attempt to answer this question, but staying away from the comments I made.
We spent most of the.
Coal covering we have the best golf business and the industry by.
By a long shot.
We are very comfortable with the foundation that we have and we will continue to act with discipline.
Fixing any opportunities and ensuring that we are running safely running our business to deliver on our commitments.
It's part of your first question when we think about how we continue to strengthen our strong team, we do think about our strategy.
We have paid it off staying with us now for six or nine months supporting.
The board and my executive team and thinking about our strategy.
And as part of that work, we have a very clear eyed understanding of our capabilities as an organization today in 2023.
I think we're in Australia.
And we believe that we run very large computing underground mines very well.
We understand that capability within look at one of the Mega trends impacting.
The world our industry and our company.
And let's make it trades are coming from society of investors they.
Are they coming from technology and.
They are coming from geopolitical.
Just around the world as we're seeing playing out.
So we understand and assist those mega trends and determine what set of capabilities and what sort of organization, we need to be 10 years from now 50 years from now 20 years from now and.
And we can do that because we transformed our business banking 21, let's say with the acquisition of Goldcorp and the establishment of the Nevada Gold mines joint venture.
So from that knowledge and that understanding we then looked at what it means to continue to be the responsible gold later.
We then look to what it means in terms of that gold industry. That's subject to those same mega trends that has to consolidate.
And then we look to what it means in terms of diversification, particularly as you think about Copa and we have as I said in my remarks 16 billion pounds of copper in our organic project pipeline. If we do nothing else we are diversifying into copper as we ship at that project pipeline through.
Jackie that's the that's the lens with which we look at our organization. That's the lens, which if you look to try and bringing talent to ensure good.
A team that can lead this organization for the next 10 15 20 years and that's how we assess our business today and that's how we assess any external opportunities at Microsoft.
Alright, thanks, very much that's really helpful color Congrats again on the quarter. Thank you. Thanks.
Thanks Jack.
Thank you. The next question comes from Kerry Mcqueary of Canaccord Genuity.
Please proceed.
Hey, good morning, Tom I'm, just in your comments on capital allocation.
You Didnt mentioned share buybacks. So I'm just wondering is that something you would still consider as an option or is the focus really on the dividend going forward.
Yeah, Thanks, Kerry and good morning.
Our primary I, probably vehicle for free cash to shareholders.
It's always been.
Since we introduced that.
The dividend framework back in October 2025th.
Just to return cash through dividends and that's our primary vehicle.
We don't have an approved buyback program at the moment.
<unk>.
And if you look back.
Majority of the.
The share buybacks that we have done over the last two or three years, it's been linked to asset sales. So when we saw case of GM Red Lake.
And our share in continental and the British project in Columbia sites priced sites.
Primarily the vehicles that we use for share buybacks and that's typically what we would do otherwise dividends our primary vehicle.
Got it and then without trying to ask about Newcrest I'm. Just wondering if you can just share more broadly how you think about Papua New Guinea I know you.
Indonesia quite a few years back just any thoughts on how the beginning of the mining jurisdiction.
Okay.
Again, Gary I'll avoid the direct question, but maybe.
It might be extra more broke robot when we when we think about.
Our balanced diverse portfolio.
Think about our capabilities.
Have demonstrated if I if I look at our Pascal at Mexico, local what newmont have done going into <unk> in the first year in 2019 to be able to work with government and communities to address a decade long it.
You should and then deliver sensational performance out of that operation, beating guidance and three consecutive years since we've had that operation.
We have a core capability that is running very large open pit and underground mines. We also have a core capability around social responsibility and being able to engage with communities and in a balanced portfolio.
That has a foundation top tier jurisdictions, we can afford to balance some other jurisdictions that are that that wouldn't fit the top tier category.
Today, our portfolio to date has this in Ghana is the same.
Sure enough with that in Argentina, we're in Peru, we're exploring in French Guiana, so for us it's about understanding core capabilities.
Stay on the offense I should that business and then issue you've got a balanced diverse portfolio that allows you to types of managed risk.
Yeah.
Great. Thanks for that thanks, Tom.
Thanks Kerry.
Okay.
Thank you next question comes from Anita Soni with CIBC World markets. Please proceed.
Hi, Thanks, Good morning, and thanks for taking my question.
I had a lot to ask about the deal, but I guess I won't be able to articulate that covered your question.
But let.
Let me focus in on the dividend and.
Given the seasonality that you have.
You mentioned that this year, but the development capex and sustaining capital are relatively flat could we see that dividends you know sort of a change.
Change over the course of the year quarter to quarter like maybe hitting the bottom end of that.
140, and then perhaps the top now closer to the higher end at 180, <unk> as you progress through the year or would you be more inclined to do that.
I guess I'm, just trying to understand how you would like.
What gets you to the $1 40, what got you to the Navy.
Yeah. Thanks, good morning, a nadir and apologies I got you.
If your questions do you want to cover <unk>.
The dividend is a dividend is a bad thing started with predictable long term and it is about.
That using the strong balance sheet and the cash that we've generated from high gold prices at the time that the outfits that have strong balance sheet. So as we have.
Those discussions and debates around.
The free cash flow that you might generate in <unk>.
Any given quarter or the level of investment in any given quarter, we don't look to have Andy.
In whipsaw quarter to quarter, we look to give.
Our shareholders some ability of confidence to stability in our dividend as we move forward and not have it jumping up and down quarter to quarter. So and we'll use we will use our balance sheet to support that stability and predictability.
Okay. So then so then I guess the second part of that question was basically then.
In one instance would you be inclined to use the 140 rather than <unk>.
So thanks for that or if you think about the world, we're living in and the volatility around gold price and.
And inflation is basically look at this year conservatively. We think have unit cost is going to be $1200 and seven to 800 dollar gold price and we've paid a dividend for the first quarter at $44 60, now, but I'll preface this by saying our board the authority to approve every quarter. So I would I would.
<unk>.
Point to those key assumptions.
Two out sensitivities that are provided insight there is a there is a circumstance here where the world.
Jumped to six to 800 calls we get a third eight hundreds that would that would be a circumstance, where we would then look at do we need to think about the lower into that range equally.
The circumstances, where cost could be a little bit better than 1200 golf stubbornly above our 800 that would give cause for us to have a discussion with our board.
Around.
Around what we might do.
Over the course of this year.
And we were making decisions around that range for the 2023 year, we'll come back and revisit it for 2024 much lighter industry.
So the 42 to clarify key points, probably a good guidepost.
Sorry changes to what we're looking at.
That's about fair yes.
I think we've put a marker rapidly for you in terms of as we sit here in mid February .
Both on a dollar golf seven or 800 1200 dollar unit costs 700 dollar Gulf Cross <unk> 40 per share dividend is a good market for it.
I'm going to ask this question it relates to the deal, but the bid on the table or the indication but.
I mean, how does the dividend change and evolve given that Newcrest and I are happy to cover new quest is a negative free cash flow.
Very dramatically with Atlas, they've got there and a very heavy capital investment cycle and how does that impact you were.
Most stable dividend post this year.
Given.
The offers that are on the table right now.
The Australia at night up I'm sorry.
Okay.
Let me come back and answer you.
So I'll try to answer your question.
We spent a lot of time talking about out our capital allocation hierarchy.
And the tension between balanced rates balance sheet strength reinvesting in our business at the right level of Spain.
The cash you can afford to do it but also your ability for parts of the execution.
Ensure that you can have a successful project and we understand the importance of industry, leading returns to shareholders suffer us anymore.
Eva scenario we're in.
It's that triangle of tension between balance sheet strength right investment leading shareholder return.
And that doesn't change that's part of what Novartis.
Okay, and then one last one in terms of the capital outlook.
You have noted that doesn't include you on a clutch of sulfides in the out years.
Just trying to get an understanding of the development capital. We Havent conversation every every year, but the development capital I mean, when you look at the development capital.
In 2026 and 27.
Probably only going to come up to the level of 2025, and 2024 and you mentioned 2023 is a little higher than normal, but you probably should come up like we should be using the 2020 for 2025 level at the out years.
Okay. Thanks for that.
I'll just clarify that for you what we what we tried to be very very disciplined with what the guidance. We provided in development capital, but I'd point you to that long long run average $800 billion is what I would encourage you to use if you're modeling out into the future and this year and next year some of the biggest reinvestment.
We have done since we'd go back to back in the early two thousands. So this this is an extraordinary period of rate base, but the long term average is much more like it.
Okay I'll pass it off to someone else. Thank you very much for asking my question alright, thanks for that.
Thank you next question comes from Cleve Rueckert.
With UBS. Please proceed.
Hey, good morning, everybody, Thanks, Robin Brian for all the color.
Tommy well done on managing all the information I feel like we could spend the next year discussing this.
Slides and everything Thats been presented.
Just a couple of follow ups previously just on the guidance you had provided kind of two sets of guidance. One at your base case kind of explaining the assumptions behind that and then another one.
With.
Mostly different cost assumptions at kind of the spot scenario and then you know that framework, because obviously incorporated into the dividend and cascaded down.
Slide.
Is the cost the cost structure that you've presented today is that the base case or is sort of that base $1 dividend.
At $400, an ounce gold, assuming slightly lower cost basis.
Okay.
Yes, thanks, Cleveland the boating, certainly we've tried to simplify our what we've what we provide and transfer guarding information and it's taking the lessons we've learned from the volatility that we've all experienced over the last couple of years.
And really just saying as best you can predict this year at seven 800 build of God and hearing numbers for this year.
Look for as you look forward into the out years.
We are building on plans on a 4800 dollar reserve for us.
And then we will make assumptions around.
What the gold price will be for revenue and therefore, what does that mean in terms of taxes and royalties and those sorts of things and linked to that is what do we issue for them.
The cost of producing that so that's all that's all flowing through more of a department of what we predict the world.
We looked at consensus numbers to draw that rather than have a some sort of arbitrary.
<unk> revenue cross nothing, but we built our MA plans on $4800.
And we expect to have you should expect from Denmark.
One dollar shape ice dividend year in year out.
It's the variable component that will move year on year out depending on what what's happening adult price, what's happening to input costs and will take consideration in terms of what might be best.
The $1 a share base dividend put it in the bank. That's what you want would deliver at $800.
Oil price.
Alright, and then just just to just to clarify I mean, you've got the sensitivities on the.
On the guidance is that is that one dollar base case dividend is that assuming kind of like.
$900 cash cost 850 to $900 cash cost or is it a lower level.
It's.
The numbers all the sensitivities you say they are linked to <unk> seven 800 dollar gold price assumptions around that.
Al.
If gold went to <unk> the price of gold with a four to $800.
Is it revenue.
With Pi $1 share dividend is what the base dividend is.
Yeah, Yeah, okay.
That makes sense.
And then I just wanted to follow up at the MLP asked the question earlier, but I just wanted to clarify.
On the.
Declining.
Costs cost declines specifically from 24 to 25.
Appreciate that you've got some some volume growth built into the plan and that helps with that.
With the cost, but there isn't any volume growth really at the mid point from 24 to 25 so.
Is that is that mix.
Trading higher cost volumes for lower cost volumes in the plan between those years.
That's right, that's where you start to see lower cost ounces come in some more lower cost ounces coming into that profile from the reinvestments that with the investments we're making in stops the ounces coming in from Panama ounces coming in from a hopper no ounces coming in from <unk>.
Outflows coming in from.
Cerro <expletive>, so, it's lower cost ounces coming into that production profile.
Yeah, Okay I just wanted to make sure that was clear and then just one last quick one for me.
I just wanted to ask an operational question about boddington.
<unk> had a good quarter theres been some volatility there around weather and around the autonomous fleet and obviously, some some learnings with the deployment of that fleet.
I guess are there any risks that you see around the autonomous fleet.
Are you still monitoring or.
What's the level of comfort there that.
You've kind of been able to to iron out some of the.
I guess some of the growing pains.
Around the weather and some of the variables.
Autonomous fleet might be a little bit more susceptible to.
Yes, thanks clay.
100% confident in autonomous haulage.
Is it is reliable derivative I implemented the first one was hopefully.
In 2011. This is proven technology just knew in the gold industry.
This is bulletproof proven technology in the future of Monty and its cipher fundamentally sypher and de risking of Magic Magic cost area. So there was some fluctuating lost some.
So todd areas of the pit youll mining that conventional trucks would've had similar issues with.
So let.
Let me just spell any myths about autonomous haulage is proven technology bulletproof.
Got it and you can expect to see more ton of a slate side getting underground across a GMO business going forward.
That's very clear thanks, a lot for taking my questions I appreciate it.
Thanks Glenn.
Thank you. The next question comes from the line of.
Tariq with credit Suisse. Please proceed.
Hi, Good morning, Thanks for taking my question, there's a sentence in the press release that talks about your adequate yourself.
The different options up to and including transitioning <unk> operations into full closure can you just provide more color on what.
That would look like.
What specifically that would mean for capex.
Hey, good morning, what are your thoughts certainly since we since you made the decision to defer the pool funds approval, but to use after the second half of 'twenty full and appointed I think going to chip development also focused on Peru, and yet a culture.
Scott used to look at every option around yet cut yourself thoughts, including.
Notwithstanding with the project to put in the operation into into care and maintenance and that as we've.
Talked about before.
That is about making sure you go to the H I understand the out of what might be possible in terms of a profitable project you've gotta coach saltwater because countries one of the great Copa districts of the world. It is a huge sulfide deposit with both gold and copper and its right next door to Congo, which is one of the one of them one of them.
Corporate deposits such strategically long term.
Hum.
Copper and gold will be produced from this part of the world.
But part of that Scott is to look at the full spectrum and that could include us, making a decision to move the existing operation into pleasure.
Ah the spend you see in our guidance.
It's reflecting the spin that we would make this year and next year to get to a full funds decision we continue to.
Two of them have long lead time items, and the engineering and the construction of the cancer.
That will be necessary for closure and it will be necessary for closure activities in particular, the construction of a water treatment plant. So.
Those funds will be essential anyway. So.
If we were to have a scenario that <unk> moved into closure.
Then you would you would see us building, which we would be doing in any event.
Water treatment plants to process the Mont effect.
That contains asset.
And to treat that water to neutralize that discharge it into surrounding.
Surrounding assistance.
And that would be a lot yet to.
Kacha forever.
We are at the end of coach up forever.
At closure liability estimate 50 years of a water treatment that is.
Lee County, Florida that balance sheet, and we would skew at that operation in the closet.
That was the decision that we recommended to our board.
That's very clear thank you.
Yeah.
Thanks to the hard look with where he until we have answered all questions. So we'll just keep working through everybody. If you're if you're able to stay with US we love the people in the field will answer everybody.
<unk>.
Thank you. The next question comes from Lawson Winder.
Bank of America. Please proceed.
Okay.
Thank you operator, and good morning, Tom and Rob Nice quarterly result, and thank you for remaining on the call to sit in these additional questions.
To ask you about.
Youre thinking around potential noncore assets and so in the context of when you acquired Goldcorp you highlighted a few of the assets as potentially noncore that would need to prove their worth to remain in the portfolio. So in light of some of the impairments I wanted to get your thoughts on whether any of these assets might now be under consideration.
Sure.
For monetization.
Thanks, Louis and good morning, maybe just maybe just a quick bit of color either some of these payments, which I think you're seeing play through the mining industry in general just the when you've got the macroeconomic environments or country discount rates supplying into that.
We've got some redistribution.
What we assumed for synergy value out of the Goldcorp acquisition, where it came from as Brian talked about the big difference that you've got some some of that activity going on as we balance.
Some of that out and we strategically chose.
To move say same V. Two I I electronically operation and there's some adjustments are such that it was a strategic decision around sort of the same but.
80, well run organization should have a very clear eyed view.
On the access that they manage.
Where the opportunities are to run them, where the opportunities might be to transform them, where the opportunities might be to grow them and ultimately where they might be a time, where those assets are better in someone else's hands.
Any well governed organization should have a clear view of each of the operating assets in the portfolio as a whole and ensuring that.
Why are they taking decisions that are in the best interests of the shareholders of that organization.
We do that work that doesn't mean that we have a whole list of asset set up for divestment.
It's similar to the answer I was just giving you the hot around the other coaches sulfides.
It is essentially part of that exercise to go to the edge and say what would the world look like if that exit were divested and what would we do if that was what would happen if that was in someone else's hands.
Does that mean for us in terms of what we could do with that operation to be accretive against performance. So we are constantly working through that process challenging and debating and with that set of 12 finished operations. We have today, we have a very clear idea of the improvement opportunities when I get off.
In Canada the <unk>.
Is that really on a.
Six or seven months ago as.
As Rob said, we have got.
Three very experienced general managers now in place across those operations.
And Robyn I'll have focused on delivering the value for all of <unk> operations that we havent had.
License to do because of not being able to get across the border into Canada, having having the operations shut down at different times, having kind of protocols in place 23 is the year when we start to demonstrate what those assets can do so clear eyed view loss.
About our portfolio, but in terms of twenty-three, where we're very much focused on delivering value from that 12 national crushed.
Okay fantastic.
I'd like to also ask about Ghana sort of.
As a jurisdiction so two of your African based peers have had some.
Sort of a minor tax disputes, but from a new my point of view outside of their requirement to sell go to the government and steady I mean, I've seen nothing similar perhaps a reflection of your excellent local relationships there.
Do you see any signs of fiscal regulatory environment changing.
Thanks.
Yeah. Thanks, <unk>, obviously been in Ghana.
20 years.
I think we're the largest taxpayer in gun or we pay our taxes in U S dollars.
We're pretty we're pretty important player in the Ghanaian context, and we have long term robust relationships with all stakeholders and garner, including including the government you Gotta go to look at the.
The coordinated process that we have been going through to get the full land access to a hopper north.
Of all the traditional latest youth and traditional is at the random onsite working with Deer Hunter Heaney, the Cumulus Asia working with several live with government to two.
To productively and sustainably works for that process.
That those relationships also Florida, when you sit down and talk about how we can support the government the pie face taxes.
But also to support investment in the country.
And to help manage through that process. So we are very confident of our position in Guyana, the relationships and outstanding to be able to navigate through.
Some of the some of the noise that you're right about at the moment.
Yeah.
Excellent and if I if I can maybe ask a very similar question just on Argentina.
Thinking about Cerro <expletive> and the somewhat difficult financial regulatory environment there.
Newmont currently successful.
Extracting profits from that operation.
And Thats it for me thank you.
Yes. Thanks.
The size the size of that marine at Cerro <expletive> is actually reinvesting back in the business. So as we as we're generating a profit from our mine as Ralph said, it's getting more and more profitable.
Sinking that money back in to some pretty significant expansion of Cerro <expletive> with with several underground Moss thing develop that will in future years increased production with lower cost ounces at this point in time, we're in a position with it.
That profit, we're generating we're putting back into that Cerro <expletive> business.
Thanks, a lot very much.
Thank you.
The next question comes from.
Tanya.
Nekoosa connect with Scotiabank. Please proceed.
Great.
Afternoon, everyone. Thank you Sir.
Thank you for taking my name right that's right.
Just wanted to ask.
In a different way it is about the Newcrest offer I just wanted to confirm palm that you did say that you are in negotiations with new quest right now is <unk>.
And there.
Also providing you with the nonpublic information on a non exclusive basis on an exclusive and nonexclusive basis then.
Obviously, they wanted a signature a noncompete on that and just wanted to confirm that that's what you said.
Yeah.
Thanks tenure, and we haven't begun that long I think it's still morning in Toronto.
So somewhere else I've been up very early.
[laughter], Massachusetts laptop.
Look I tell you the best thing I can do is just repeat what I said.
Which is we are disappointed that the new Cros you Chris Board rejected our proposal.
And we are currently engaging with the <unk> team in relation to the offer to provide access to more information and a better to leave it at that in terms of repeating that cycle.
Okay.
From a bigger picture then you know you talked about newmont.
And taking pride in their ESG rack.
Record ESG focus and so I guess I have a question that pertained to the steel.
Just how do you think about submarine tailings disposal.
Is that something that meets your filter for ESG.
You look at that.
Thank you Tania and again I'll I'll attempt to answer this question with that.
That's trying into the specifics gain motor actually experts in submarine filings, where you do we use that technology at a hopper and Indonesia and about the age out very successfully.
And all of US if you remember I was the senior Vice President for Indonesia, and accountable for about the AGL when it was.
When it was in March and have kept that accountability.
There'll be time senior Vice President for Asia Pacific and then the Chief operating Officer.
Within the new Motor organization, there is a lot of knowledge and capability around submarine titles.
So if I didn't answer your question more broadly as I've said many times before.
Outright is turned on and if we see opportunities to pick up a tier one asset.
That we believe is a core capability, whether that'd be Peter underground.
We will look at that that opportunity irrespective of where it is in the world. It is the first instance.
And if an asset has submarines tailings or some other aspect one of the questions. We would ask because we they can step through those filters.
Is this asset better than newmont portfolio, where someone else's NK and Kevin can I, a sustainable performance, we delivered for the Newmont operating model and the newmont capability.
Now with disciplined many talks with them outside and I don't want to pay to do that.
Would it not have that feel to trip because it had some aspects such as submarine titles or some other aspect that might be of environmental and social aspects.
Again, if I bring it back to Peter Scott.
We could look to pay the SCADA, let's say goodness familiar I don't think anyone can resolve the community blockades.
That's a big risk with Ya man, we backed out sales in that capability to go on their resolve that social issue sustainably. So you wouldnt stop us looking at a particular opportunity.
Because of a particular, social environmental issue, but we would.
We will reflect upon our capabilities and whether that asset is better in your months portfolio on though.
Okay now that's what I thought.
That's fair and then just maybe finally for because I do also also kind of a new class just maybe on that.
Any dealings with.
With Australia, and usually it takes a lot in terms of closing a transaction. So hypothetically I think you have a loss to occur could you just review in block three less what what what is needed obviously shareholder approvals and then obviously.
Im fine with me.
Sorry, I'm not going to get into that detail because of the because of the way we see I'll just cite.
Australia is a jurisdiction within where they basically in Australia, a few years in the noughties.
For almost 60 years, we're up we're a taxpayer in Australia with two big Gulf bonds in Australia, we're exploring in Australia, It's outback yacht.
So kind of talk about the particular question, but Australia areas.
Literally up back yet.
Okay fair enough. Thank you very much and yes. It is still morning.
Yes.
Yeah.
Yeah.
Okay.
Thank you and our final question comes from the line of Greg Barnes of TD Securities. Please proceed.
Yeah, Hi, Tom sorry to drag this on.
The variable portion of the dividend and the old framework, you paid out 40% to 60% of free cash flow with it I think Jim mentioned of that this time around is the variable really just at your discretion or is there a formula behind that.
Thanks, Greg and good morning, we could certainly suddenly get Daniel just to take you through that detail.
But it does it does the numbers do it up so for every $100 increase in gold price above that 1400 dollar we generate $400 million of free cash flow out of our portfolio on average out of that I should look at that portfolio going forward.
To do a notch up from 4800 to 1700 is 12 $1.2 billion.
But the 23, we're going to take off.
$400 million of that because.
Because of the reinvestment this year that gives you $800 million and we're returning.
Between 40, and 90% of that amount through that dividend rights of way providers, so that that.
That ratio still holds with the math and we can certainly jump into the detail with you offline if you'd like to see.
No Thats fine that works thanks, Tom.
Yes.
Thanks, Greg.
Is that it for questions operator.
Thank you all this actually concludes our question Oh go ahead.
Sorry to jump across it.
Well. Thank you everyone for staying on to answer all the questions and.
And in.
And place a have a good day and.
But as investors on the call to protest thing some of you next week if they bought okay. Thank you everyone.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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