Operator 2: Hello, and welcome to Newmont's Q3 2026 results conference call. All participants will be in listen-only mode. 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 Newmont's Group Head of Treasury and Investor Relations, Neil Backhouse. Please go ahead.
Neil Backhouse: Thank you, Rebecca. Hello, everyone, and thank you for joining Newmont's Q3 2026 earnings call. Joining me today are Natascha Viljoen, our President and Chief Executive Officer, Brian Tabolt, our Executive Vice President and Chief Financial Officer, as well as other members of our management team who will be available to answer questions at the end of the call. Before we begin, please take a moment to review our cautionary statement shown here and refer to our SEC filings, which can be found on our website. With that, I will turn the call over to Natascha.
Natascha Viljoen: Thank you, Neil, and hello, everyone. Newmont delivered a stable Q3, demonstrating the quality, resilience, and value generation capacity of our world-class portfolio. Robust safety and operational performance, disciplined cost management, and higher silver production with realized prices enabled us to improve our full-year cost guidance while remaining firmly on track to achieve our production, capital, and other guidance metrics. I want to start with our operational performance. In Q3, Newmont safely produced approximately 1.3 million ounces of gold, 23,000 tons of copper, and a notable 11 million ounces of silver. As we indicated last quarter, gold production was broadly in line with Q2 and reflected strong execution across the portfolio. This operational performance translated into strong financial results, including $1.9 billion of free cash flow and an adjusted net income of $2.20 per share, representing a Q3 record.
Natascha Viljoen: This strong cash generation continues to support our balanced approach to capital allocation. Since our last earnings call, we have returned approximately $1.9 billion to shareholders through our quarterly dividend and ongoing share repurchases. I am also pleased to share that we have now repurchased more than 115 million shares, representing approximately 10% of shares outstanding since launching the repurchase program in February 2024. Beyond our safe operational and financial performance, we achieved several important milestones this quarter. First, we announced an amended joint venture agreement for Nevada Gold Mines, under which the previously excluded Fourmile, Fiberline, and Mike properties will be contributed. We are very pleased with the outcome of this agreement, which aligns the interests of both partners and positions us to maximize the value of one of the world's premier gold districts.
Natascha Viljoen: We continue to work collaboratively with our partner and expect to close the transaction during Q4. At Lihir, we safely completed the planned September shutdown on schedule and according to plan. We continue to expect higher grade ore in Q4 as planned. Finally, at Red Chris, we are finalizing the feasibility study for the block cave project and continue to advance toward a full funds decision early next year. I will provide more detail a little bit later. As we move beyond the production trough previously indicated for in 2026, we expect production growth to begin in 2027. Looking further ahead, our portfolio of operating assets, projects in execution, and future development opportunities position Newmont to grow and sustain production for decades to come.
Natascha Viljoen: Supporting both our near-term production growth and longer-term outlook is the progress we continue to make advancing our projects across the portfolio. In Q3, we continued to advance our development pipeline, achieving key milestones across multiple projects. Most notably at the second expansion at Tanami, we have now completed construction on the 1.5-kilometer shaft. We remain on track for full mechanical completion by the end of this year, and our focus will shift towards commissioning as we move into 2027. We now expect commercial production by the end of Q2 2027, earlier than previously anticipated, with ramp-up activities continuing to the end of the year. At Cadia PC2-3, we remain on track for completion by the end of this year, with the final drawbell fired in September. This represents an important milestone as we begin transitioning activities from the project teams to operations.
Natascha Viljoen: At PC1-2, cave establishment activities continue to advance on schedule, and we are pleased to report that the key regulatory approvals and associated requirements following the April seismic event have been achieved, allowing the project to continue advancing towards cave establishment. The two water treatment plants at Yanacocha are progressing well and are approaching mechanical completion with commissioning activities underway. As these projects advance towards completion in 2027, closure spending is expected to be approximately $200 million lower in 2027 and $400 million lower in 2028 compared with 2026 levels. As this cash flow becomes available, it will be reallocated to growth, partially offsetting an increase in development capital as we continue to invest in future projects and opportunities across our portfolio that generates the highest returns. These project milestones reinforce our confidence in Newmont's proven ability to execute large, complex projects across jurisdictions safely, responsibly, and on schedule.
Natascha Viljoen: With this capability and confidence, we are advancing the Red Chris Block Cave Project, a fully permitted, shovel-ready gold-copper development in British Columbia's Golden Triangle and the next major reinvestment in our business, directly supporting our strategy to lead in gold and grow in copper. With a full funds decision anticipated early next year, Red Chris is positioned to deliver long-term production in one of the industry's premier mining jurisdictions. Red Chris is a multi-phase project anchored by an endowment that supports 70 years of mine life. It represents a rare combination of scale, quality, and growth located within a highly prospective porphyry district.
Natascha Viljoen: With all our regulatory and consent-based approvals already in place, it benefits from strong partnerships with the Tahltan Nation and support from both provincial and federal governments, demonstrated by the government of Canada's announcement of CAD 500 million of funding for the project, recognizing its importance to Canada's critical mineral strategy. This established support creates a stable and predictable environment for investment and reinforces our confidence in the long-term opportunity at Red Chris and the broader Golden Triangle. The Block Cave development will leverage Newmont's extensive experience developing and operating large-scale block cave mines, supported by an established team with over 150 years of combined block cave experience.
Natascha Viljoen: It's important to note that while the initial phase, macro block 1, 2, represents less than 20% of potential mine life at Red Chris, approximately 40% of the planned investment in processing facilities, material handling systems, and other key infrastructure is expected to support future expansions. This foundation positions Red Chris to evolve into an increasingly meaningful contributor to Newmont's future production profile and a significant driver of shareholder value over time. We continue to refine and validate the underlying assumptions and execution plan with a clear focus on ensuring the Red Chris Block Cave project meets our investment criteria and project execution standards. While final review and governance work remain underway, I'm encouraged by the project economics and the value this operation can create for Newmont.
Natascha Viljoen: We have completed a rigorous feasibility study and advanced engineering beyond 60%, resulting in an optimized mine design that improves metal recovery and incorporates geotechnical learnings, execution, and long-term operational experience into our plan. Based on results from the feasibility study and subject to board approval, construction for the project is anticipated to ramp up in 2027, with commercial production targeted for 2033. This builds upon the early works that have already advanced the main decline, conveyor to surface decline, and ventilation raise boring. The initial development is expected to support a mine life of approximately 13 years, producing approximately 3 million ounces of gold and 850,000 tons of copper on a 100% basis over this period.
Natascha Viljoen: Following ramp-up, we expect Red Chris to produce an estimated 275,000 to 325,000 ounces of gold annually, along with 65,000 to 85,000 tons of copper per year, highlighting the quality of the initial cave. We currently estimate development capital to be between $4.2 billion and $4.8 billion US, which is equivalent to CAD 5.6 billion and CAD 6.4 billion on a 100% basis, and includes the benefit from the anticipated grant from the Canadian government. This estimate reflects the latest development plan, updated productivity assumptions, current market inputs, and a mature understanding of the infrastructure, development sequence, capital requirements, and operating profile required to successfully deliver the project. Supported by a robust technical plan and refined execution strategy, we believe Red Chris is well-positioned to meet our investment criteria. As we move towards a full funds decision, I want to spend a moment to reflect on the principles that will guide that decision.
Natascha Viljoen: Regardless of the source of growth, whether advancing the next phase of an existing operation, evaluating an organic development project, or assessing any potential inorganic opportunity, every investment must compete for capital and satisfy three core criteria. First, the opportunity must be a strategic fit for Newmont. We prioritize investments that reinforce our position as the world's leading gold company while supporting organic growth in copper. We look for opportunities that strengthen our presence in attractive mining jurisdictions and leverage our deep technical expertise, capabilities, extensive infrastructure, and established partner relationships. Secondly, the investment must ensure the quality of the portfolio. We focus on opportunities that support durable production profiles, typically with mine lives of 10 years or more, improve free cash flow generation, increase resilience through the commodity cycles, and strengthen the portfolio's overall cost competitiveness.
Natascha Viljoen: Finally, the economics must be compelling and supported by a high degree of technical maturity, project execution capability, and a clear development plan. We expect projects to remain competitive across a range of planning assumptions and commodity price environments while generating a double-digit internal rate of return that exceeds the applicable country-specific discount rate. The initial phase at Red Chris is an example of this approach in action. It aligns with our strategy, enhances the quality and longevity of our portfolio, and delivers compelling returns while meeting the same rigorous standards we apply to every investment before capital is allocated. With that, I will turn it over to Bryan for an update on our Q3 financial performance and outlook for the rest of the year.
Brian Tabolt: Thank you, Natascha, and hello, everyone. Newmont delivered another quarter of robust financial results supported by stable operational performance, disciplined cost management, and continued execution across our portfolio. We realized an average gold price of $4,317 per ounce, generated $2.8 billion of cash flow from operations after working capital, and delivered $1.9 billion of free cash flow. Through the first nine months of the year, we have generated $7.3 billion of free cash flow, which is approximately the total amount generated in 2025, and with our strongest production quarter yet to come, reflecting our continued ability to convert strong operational execution into meaningful cash generation and shareholder value. This strong cash flow continues to underpin our capital allocation framework, enabling us to return more than 80% of free cash flow to shareholders year to date, while making meaningful reinvestment back into the business and maintaining a strong balance sheet.
Brian Tabolt: For the quarter, we also generated $4 billion of adjusted EBITDA and reported adjusted net income of $2.20 per share. As we noted on our last call, the working capital benefit realized in Q2 partially unwound during Q3, reflecting normal timing-related working capital movements across the business. Turning to costs, gold all-in sustaining costs were $1,454 per ounce on a by-product basis. Unit costs improved sequentially from Q2, primarily reflecting higher gold and co-product volumes, including 11 million ounces of silver production, stronger realized copper prices, and lower operating costs at certain operations across the portfolio. Turning now to our capital allocation priorities. We continue to apply the capital allocation framework introduced earlier this year consistently, balancing reinvestment in our world-class portfolio, financial flexibility, and the return of excess cash to shareholders.
Brian Tabolt: Beginning with sustaining capital, we spent $525 million in Q3 as we continued to reinvest in the business to support safe production and sustainable free cash flow generation. Turning to our sustainable cash dividend, our framework targets an annual cash dividend of approximately $1.1 billion, paid quarterly. In Q3, we declared a dividend of $0.26 per share. We also continue to invest in development capital, spending $354 million to advance the highest return opportunities within our deep organic growth pipeline. At the same time, we remain committed to maintaining a flexible and resilient balance sheet, anchored by our net cash target of $1 billion, plus or minus $2 billion. This range provides the flexibility to manage through commodity price cycles while continuing to invest in the business and return capital to shareholders.
Brian Tabolt: We ended the quarter with net cash balance of $3.2 billion, which is modestly above the upper end of our target range. It's important to note that this balance does not yet reflect the anticipated $1.95 billion payment associated with the amended Nevada Gold Mines joint venture agreement, which we expect to close in Q4. Finally, once these priorities have been met, excess cash is allocated to ongoing share repurchases. Since our last earnings call, we have repurchased approximately $1.6 billion of shares under the $6 billion share repurchase program authorized by the board in April. This includes more than $450 million of shares repurchased in October to date, leaving approximately $2.8 billion remaining under the current authorization.
Brian Tabolt: Our approach to repurchasing shares over time is already having a meaningful impact. As Natascha mentioned earlier, since we began executing our repurchase programs in February of 2024, we have reduced our share count by more than 115 million shares, or approximately 10% of shares outstanding. As I mentioned last quarter, based on the repurchases completed to date, the formula under our framework would support a quarterly dividend of $0.27 per share at the next annual review while maintaining the same targeted annual cash commitment. Any increase would remain subject to approval and declaration by the board as part of its annual review next February, but we continue to execute the program consistently, reflecting our conviction that Newmont shares continue to represent an attractive long-term investment opportunity. Turning to guidance.
Brian Tabolt: As we look to the remainder of 2026, we remain well on track to achieve our full year production guidance. Production is expected to increase in the Q4 to 1.4 million ounces, making it our strongest quarter of the year, driven primarily by four of our managed operations. At Tanami, as we begin to access higher grade stopes, at Cerro Negro with the start of mining at the Vein Zone open pit, as well as continued productivity improvements and recoveries. At Ahafo North, as the operation continues to ramp up to full production rates, and at Lihir, as we begin to access higher grade ore as planned following the September maintenance shutdown.
Brian Tabolt: I do want to call out that while we continue to expect Lihir to be a strong contributor in the Q4, we are closely monitoring potential water impacts as a result of El Niño conditions, which are forecast to strengthen through November and December before beginning to ease in the Q1 of next year. We are actively managing the operation with these conditions in mind and working to mitigate with water conservation efforts. Though the timing and severity of weather impacts could influence production and costs during the quarter. Turning to costs. Continued operational execution, disciplined cost management, and stronger realized prices for copper, silver, and other co-products have enabled us to improve our full-year cost outlook and now expect gold all-in sustaining costs of approximately $1,520 per ounce, representing an improvement of approximately 10% relative to the guidance we provided at the beginning of the year.
Brian Tabolt: While we continue to expect Q4 all-in sustaining costs to be the highest of the year at approximately $1,900 per ounce, our improved full-year outlook reflects the strength of our year-to-date performance and provides increased confidence in our ability to manage costs within our control. The Q4 cost profile primarily reflects the planned timing of sustaining capital spend, lower co-product credits as silver production at Peñasquito declines to approximately half of Q3 levels, and ongoing inflationary pressures, including fuel-related impacts. With these evolving fuel-related considerations, we have enhanced our oil price sensitivity disclosure, which can be found in the appendix of our presentation. In addition to the approximate $60 million impact from direct fuel consumption, we estimate a further additional approximate $50 million impact to key consumables and inputs for every $10 per barrel change in oil prices.
Brian Tabolt: Providing a more comprehensive view of the potential cost impacts across our business. Finally, sustaining and development capital are expected to be the highest in the Q4, keeping us on track to achieve our full year capital guidance expectations. Looking beyond the current year, we expect total portfolio production in 2027 to increase by a low to mid-single digit percentage compared with 2026. Within our managed portfolio, the principal drivers include higher grade at Lihir and Boddington, supported by planned mine sequencing and the completion of the waste stripping campaign at Boddington this year. Additional ounces from Tanami, with the second expansion progressing well toward commercial production. Incremental ounces at Cerro Negro through the introduction of ore feed from the Vein Zone open pit. At Yanacocha, continued operational success is supporting the evaluation of additional low-cost ounces in 2027 and potentially beyond.
Brian Tabolt: Together, these contributions provide a clear line of sight to production growth beginning in 2027. Shifting to costs, the Q4 profile provides an early indication of several external factors that we continue to monitor and are currently expecting to carry into next year, ultimately impacting our anticipated 2027 cost estimates. Based on current conditions, we anticipate unit costs to trend higher next year, reflecting macroeconomic headwinds and lower co-product credits, primarily from reduced silver production at Peñasquito, where output is expected to be roughly 30% lower than 2026 levels due to planned mine sequencing. While these factors create a more challenging cost environment, we remain focused on rigorous cost discipline, productivity improvements, and performance excellence across the business, ensuring we continue to actively manage the costs that are within our control.
Brian Tabolt: Looking at capital investment for next year, sustaining capital is expected to remain largely in line with 2026 levels as we continue investing in the long-term reliability and performance of our world-class portfolio of operations. We now expect development capital in 2027 to be approximately $500 million higher than 2026, primarily reflecting planned investment in the Red Chris block cave project, subject to board approval, and continued advancement of the Lihir Near Shore Barrier project. Importantly, as Natascha mentioned, approximately $200 million of the increase in development capital spend in 2027 is expected to be offset by cash flow becoming available as spending on the Yanacocha water treatment plants declines. As the project reaches completion, this benefit is expected to increase to approximately $400 million annually beginning in 2028.
Brian Tabolt: Taken together, these preliminary indications reflect a portfolio positioned for a return to production growth in 2027, supported by continued operating discipline and selective investment in our highest return opportunities. With that, I'll turn the call back to Natascha for closing remarks.
Natascha Viljoen: Thank you, Brian. In closing, our Q3 results demonstrate the strength of Newmont's world-class portfolio and the consistency of execution across our business. We remain firmly on track to achieve our 2026 production, capital, and improved cost guidance, supported by strong operational performance, disciplined cost management, and continued free cash flow generation. The strength of our portfolio allows us to simultaneously reinvest in the business, maintain a resilient balance sheet, and return significant capital to shareholders through our capital allocation framework, which continues to deliver value through a predictable dividend and ongoing share repurchases. Looking ahead, we are entering an exciting period for Newmont with a clear strategy, leading in gold and growing in copper.
Natascha Viljoen: Supported by our world-class portfolio, deep technical expertise, and proven project delivery capabilities, we are well-positioned to deliver production growth beginning in 2027, generate substantial free cash flow, create additional scale for decades to come, and continue increasing value for shareholders on a per-share basis. With that, we look forward to your questions.
Operator 2: We will now begin the question and answer session. We ask that you please limit inquiries to one primary question and one follow-up question. If you would like to ask a question, please press star, then 1 to raise your hand. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, press star, then 1 again. At this time, we will pause to assemble our roster. Your first question comes from Daniel Major with UBS. Daniel, please go ahead.
Daniel Major: Hi, Natascha, Brian, and congratulations. A good set of numbers and no curveballs from the 2027 guidance that I can see. I guess the first one, just looking at the Red Chris project and the preliminary details that you've given, can you provide us a little bit more detail on the scope changes that you talked to as the first part. Then secondly, you talked to this as being the first phase that is the foundation for further expansions. Can you also just provide a little bit more color about what that would entail and the potential timeframe around that?
Natascha Viljoen: Thank you, Daniel, and some really good questions. I think it's firstly important to recognize that this project now is for the first time on a technical and commercial level, fully on a right feasibility study level. As we think about scope changes, it's important to also think about the technical executability and long-term sustainability of the project. The scope changes certainly included our increase and improved understanding of geotechnical realities. It allowed us to make sure that the positioning and the design of the cave, plus the operational infrastructure and materials handling, is appropriately positioned in areas that can be supported in the long term, and that does allow for long-term high levels of productivity to support the low-cost expectations of this project.
Natascha Viljoen: Secondly, we see increased throughput through the plant that allows us for higher yearly plant throughputs and then associated with the right tailings capacity. Those are the major changes. We have then also made sure that from a project execution point of view, we reflect current and demonstrated development performance as well as really current rates for that development. Then if we look at the future of this endowment, Daniel, on slide 5, you will see that we have clearly marked out the first macro block 1 and 2. My apologies, I think it might be slide 6. For Eddie, slide 5. I thought I had the wrong number here for a minute.
Natascha Viljoen: I want you to firstly look at both the east and west expansion of the ore body, and you will see that macro block 1 and 2 is positioned in a very small portion of what we currently see as our endowment. Our endowment includes everything from our East Ridge to the far west and does not include any exploration potential further to the east and the west as this ore body is still open to the east and the west. So the 70 years that we are talking about is within the context of what you can see on the slide. The next expansion would be logical to go into MB3 and then East Ridge after that. Those project development evaluations is underway as we speak, and as we bring them to a more mature phase, we will certainly be able to share more information.
Natascha Viljoen: I think I might just-
Daniel Major: Great. Thank-
Natascha Viljoen: I might just add and remind you that 40% of the capital that we're spending now will be capital that would be appropriate for further extensions into macro block 3 and East Ridge.
Daniel Major: Okay, thanks. Sorry, just to clarify on that, when you say 40% of capital, do you mean mine development capital rather than surface infrastructure?
Natascha Viljoen: No, it would be between surface infrastructure and underground materials handling infrastructure that would be reused for future expansions.
Daniel Major: Okay. That's clear. Thank you. Second question, thanks for the color on the drivers of the production into next year. Could you provide a bit more color on the expectations around Yanacocha? Obviously, production's coming off, but it appears that's continued to contribute more than you previously guided. Can you give us just an update on how you see that both 2027 and beyond?
Natascha Viljoen: Daniel, firstly, I think it is important to bring us back to the asset reviews that we have done that allowed us to stand back and unconstrained look at every asset. Yanacocha has benefited from that process in that as we had an unconstrained view on the potential of the asset, definitely supported by a change in gold price assumptions, and then aligning with our near-term to brownfields opportunities. Looking for low capital near-term projects that can increase our production. Also important, we always look at natural constraints in the value or in the system. So typically looking at tailings dams and process capacity. In this case, it would be heap leach capacity. So really optimizing what we have, in terms of heap leach capacity, no material capital investment, opened up additional opportunities in the open pit that we will be exploring to extend the life of that asset.
Daniel Major: Great. Thanks so much.
Operator 2: Your next question comes from the line of Fahad Tariq with Jefferies. Please go ahead.
Fahad Tariq: Hi. Thanks for taking my question. I wanted to ask a little bit more about the indirect impact of the oil prices, and thanks for providing that sensitivity. Can you just clarify whether that includes any impact on labor cost inflation? Thanks.
Brian Tabolt: Yeah. Hi, Fahad. No, it does not. The primary impact associated with the indirect impacts that we have incorporated in that $50 million is associated with chemicals, explosives, grinding media, fixed plant, a bit of the contracted services in terms of how those dynamics flow through contracted services. But in terms of the primary employee base, that is not included as part of the labor assumption.
Fahad Tariq: Okay. Then just my follow-up question, what are you seeing in terms of labor cost inflation? If you can maybe speak to, we have heard about labor market tightness, particularly in Nevada and Western Australia. Maybe just comment on what you are seeing there in terms of availability. Thanks.
Brian Tabolt: Yeah. I think in terms of labor cost assumption, we are looking at a general escalation across the organization that will exceed our 2026 assumption, which was about 3%. So I think that that is probably a good place to start grounding in terms of just general costs, in terms of inflationary pressures. I think a lot of us are all monitoring the general cost environment. I think a recognition in showing the indirect impacts of oil is a bit of a recognition that we are seeing a bit more of that stickiness associated with diesel prices. Not just the oil price, but also the crack spread in terms of how that is impacting diesel and how that is flowing through the inflationary dynamic across the economy.
Brian Tabolt: I think also with regards to costs, there are other dynamics that we are monitoring as it relates to the Australian dollar, and the continued royalty sensitivity is driven by gold price. But in terms of labor cost itself, I think that the indicator right now would be that more general inflationary environment, and we are continuing to monitor it. Natascha, I do not know if there is anything additionally you might add in terms of availability of labor across the business.
Natascha Viljoen: Thanks, Brian. Fahad, generally, we know that the industry is always looking for technical capability. So technical capability is certainly the first area that we are always very careful around talent management and attracting and retention of good technical capability. If I look across our business, our labor turnover is within good control, and we do not by and large see any major labor shortages.
Fahad Tariq: Great. Thank you.
Brian Tabolt: Thanks, Fahad.
Operator 2: Your next question comes from the line of Richard Garchitorena with Barclays. Please go ahead.
Richard Garchitorena: Great. Thanks, everybody. My first question is on the Tanami Q2 completion in H1 of next year now expected. I am just wondering how you expect that to impact sort of cash costs through 2027, and how should we think about that benefiting 2027, 2028?
Natascha Viljoen: Thank you, Richard. That is a really good question. We are really pleased with the progress that the team has made at completing the shaft and the infrastructure around the shaft. As we go into commercial production next year, we will start to see opportunities to open up and develop the areas at depth. It will have a material positive impact in our ability to move ore out of underground. As we ramp up 2027, we could expect to see Tanami going back to previous performance into 2028. I think it is important. We will definitely start to see an impact immediately, but we will see the full impact as we ramp that asset back up to expected production.
Brian Tabolt: Richard, I might just add to Natascha Viljoen's comments as it relates to cash costs. We are not in a position at this point to provide site level cost guidance, but I would direct you to the general macroeconomic comments that I had, both in the prepared remarks as well as the previous response.
Natascha Viljoen: Yeah, I think that is important. We have been next-
Richard Garchitorena: Great. Thanks.
Natascha Viljoen: of any macroeconomic, but certainly from a productivity point of view, we will see that come through. Thanks for that.
Richard Garchitorena: Okay. Thank you. On Red Chris, the CapEx, the guidance, can you talk about how we should think about that flowing through over the next 6 years of development? I know you raised your development CapEx expectations for 2027 by $500 million. How much is Red Chris a part of that? Will it be fairly linear, as you develop the mine or is more lumpy as we go forward?
Natascha Viljoen: Thanks, Richard. I think firstly, 50% of the expected increase is associated with Red Chris. We certainly have other projects like our Lihir Near Shore Barrier that is also included in that capital increase, which is also a really value accretive project for us. Until we give more color around the project, assuming FID early next year, I think it is fair for you to assume a linear spend profile. Certainly we will be able to give you more color with FID in February.
Richard Garchitorena: Great. Thank you.
Operator 2: Your next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.
Tanya Jakusconek: Well, great. Good evening. Thank you so much for taking my questions. Natascha, just wanted to come back to Red Chris and trying to reconcile some of the differences of the Newcrest pre-feas and your feasibility study. I am just trying to understand, you said that the processing facility is larger. Can you remind me what size you are thinking and how much larger that was than Newcrest? Also, when you think about the ore body itself, are you looking at more caves than they originally had anticipated? Just trying to figure out the discrepancy between the two capitals.
Natascha Viljoen: Yes. Tanya, I will probably touch on a couple of things, and thank you for that question because I think that is probably top of mind. Firstly, you have pointed out that the numbers that is available was pre-feasibility study, and this is now a fully, really well-developed full feasibility study with at least 60% of engineering completed. We have, in some of our packages, much higher levels of engineering completed. I think firstly, important learnings for us is I think between 2021, 2022, and where we are today. The first learning was certainly around the geotechnical realities around that ore body. We have been able to improve our understanding of the geotech that has resulted in quite material changes in underground support, also major cavities, the support for major cavities. It allowed us to re-orientate the cave.
Natascha Viljoen: The cave is now larger, and it is also orientated to prevent any intersection with major fault lines. We have been thoughtful on where we position underground infrastructure, both in terms of tippers and broader materials handling, to ensure that it is in more competent areas in underground. Actually ensuring for long-term sustainability of the use of that infrastructure. If you just look at what to ensure stable infrastructure underground in a cave that is not impacted by geotechnical structures, that would certainly be the first element. The second element is we will go from 9 million tons per year to 15 million tons per year in the processing plant. That was not part of the original study.
Natascha Viljoen: I think the last element that I will touch on as three main elements is we have now got proven development rates as well as cost to ensure that, as we think about our capital estimates, that the financials and cost assumptions are robust as we have developed the economics around the project.
Tanya Jakusconek: If I was to think of those three points that you mentioned, so all of the geotech, one, the larger processing facility, and then thirdly on the inflation, I guess I should say inflation, the present day costing versus, I think it is about six years old or thereabout. I forget how long ago that was, five, six years. How would you take that? Would you say it is a third each, or how would you take these three categories and allocate the discrepancy?
Natascha Viljoen: Tanya, I think the level of detail that we can give you at this stage, I am going to limit it to that because we continue to, and as we said in the prepared remarks, we continue to ensure that we understand that as we go in our underlying assumptions, we are currently going through our technical review, our financial review, and when we get it through to a FID, we will be able to give you more detail.
Tanya Jakusconek: Okay. Any change in the ore body itself, like when you looked at it from a caving standpoint, besides the geotechnicals, or did you extend additional caves beyond what they had?
Natascha Viljoen: No, I think the caves, the major changes there, the orientation of macro block 1, and as we continue the work on the extended ore body, we will continue to develop our thinking there.
Operator 2: Your next question comes from the line of Hugo Nicolaci with Goldman Sachs. Please go ahead.
Hugo Nicolaci: Oh, hi, Natascha and team. Congrats on continuing to deliver in a not-so-easy operating environment. Firstly on Lihir, I just wanted to dig into your comments on the potential for an El Niño impact to water availability at site. In the release, you talk about the potential risks in Q4 this year, but can you just give me a bit more detail around where you see the potential for water availability into next year, just given Lihir is one of the key drivers of production growth and what you are doing to mitigate that risk there?
Natascha Viljoen: Yeah, and thank you, and hello, Hugo. A really good question. Firstly, important to note that we have not been impacted yet. It is something that we are closely monitoring due to just our normal water storage areas. I think it is important to note that the expectation is for El Niño to increase and get harsher towards the end of the year, and probably we will see less of that going into the new year. A couple of priorities for us here. Firstly, on the Lihir Island, the communities are reliant on us for water distribution, so that will be, without a doubt, our first priority. Secondly, not all of our operation will be impacted by water shortage if we get there. We will be able to continue to mine and stock our material.
Natascha Viljoen: That will enable us to continue to build stockpile, do blending, and be ready for a consistent and blended feed into the plant. The team is also looking at, if that is the case, that we can bring maintenance forward from next year to allow us then to run more consistently. My view on this is normally when you lose volume, when you lose mining, that is hard to catch up. But as long as mining is done and we get that onto stockpiles, you have a fairly good chance of making up that volume. In addition, we have also seen Lihir continuing to improve its throughput through the plant. With the work that the team has been doing on reliability of the plant, we have seen increased reliability and consistency of throughput. So we believe that we will have a level of catch-up capacity through the plant.
Natascha Viljoen: I think, Hugo, I probably just want to, on a little bit more of a broader context also, remind you that the benefit of having a portfolio of assets is that not all of the assets are constrained with the same headwinds. If you consider this year, we had Boddington bushfires, we had Tanami bushfires, we had seismic events at Cadia, we had a number of headwinds. But with the benefit of a global portfolio, we do have opportunity to offset certain headwinds.
Hugo Nicolaci: Great. Thanks for that, Natascha. That is helpful color. Then sort of dovetailing nicely into my second question then, good to see Cadia PC1-2 cave establishments have resumed, but this has maybe added sort of 6 months or so delay to timing to ramping that up later this decade. On your point around that portfolio flexibility, able to just talk to where that flexibility might be to continue to support the group getting back to that 6 million ounce target and where flexibility at Cadia might be to catch up some of that timing.
Natascha Viljoen: Hugo, firstly, as we have worked through the rehabilitation work, the agreement with the regulator, we have been, and I think we have commented this in previous sessions, that we are working to mitigate any potential impact on the project, and we have actually been able to do that. As I said in my prepared remarks, PC1-2 is on schedule. We are back with the development and at least up to the point that we get to hydraulic radius. I think that is just from a PC1-2 point of view and PC2-3 on track, as I have commented on. So those two projects well in hand. If we look a little bit longer term on how we build back to our 6 million ounces, I think Brian, in his prepared remarks, did touch on Q4. I will probably just touch on a little bit longer dated.
Natascha Viljoen: Lihir, we are starting to move into high-grade areas as we have committed to do. We have completed the engineered wall at phase 24, and we are also going into a different phase 19, all with higher grade. Boddington, as we have committed to, has completed its stripping and additional pushback. So Boddington is in high-grade areas, and Tanami will go into higher-grade areas as well. On a previous question, I have commented on Yanacocha and the additional opportunities that we see at Yanacocha. Lastly, we will start to see CNE1, the Cerro Negro expansion project, as well as Vein Zone. The open pit that we opened and we actually intersected some early low-grade ore reading. We will see that coming through. Then on our non-managed partners, both in NGM JV and Fruta del Norte, there is an indicated growth that we are assuming their forecast as well.
Natascha Viljoen: I think we are well set up to build back to the 6 million ounces. Then projects like Red Chris will then secure that longer term sustaining of a really robust production profile.
Hugo Nicolaci: Thanks, Natascha. That is helpful. Thanks a lot.
Natascha Viljoen: Thanks, Hugo.
Operator 2: Your next question comes from Lawson Winder with Bank of America. Please go ahead.
Lawson Winder: Thank you very much, operator. Hello, Natascha and team, and thank you for today's update. Great quarter. Could I ask about your 2026 year-end reserve and resource planning? Just as you think of all the different moving parts, so $2,000 per ounce gold price assumption used last year, what are you thinking would be an appropriate gold price assumption for year-end 2026? How might the Lihir and Cerro Negro life extensions play into this? Then just overall commentary on whether Newmont anticipates replacing reserves at year-end 2026. Maybe actually one other question to kind of fit in along with this theme is, do you anticipate any impact on Cadia's reserves as a result? I gather from your prior response that that's not the case, but I think just specifically with respect to reserves, not resources, do you anticipate any impact? Thank you.
Natascha Viljoen: Lawson, hi there. We didn't clearly hear your third question. You had our assumptions around resources, then the last one was around Cadia reserves. The second and the third question, you didn't come through clear. If you don't mind repeating those, please.
Lawson Winder: Yeah, and I apologize for that. But the basic gist of the question is, does Newmont ultimately anticipate replacing reserves at year-end 2026? And what are some of the moving parts around that, including gold price and the various operating changes at some of the assets?
Natascha Viljoen: Okay. Brian will take your reserve process question, and I'll jump in straight after.
Brian Tabolt: Yeah. Thanks, Lawson. I think as it relates to the pricing considerations for reserves and resources, I think we've shared in the past, we tend to be grounded in looking at the three-year trailing average. Obviously, a lot of different dynamics that have gone on over the course of the last three years. So we do take that into consideration as well in terms of the volatility of gold price. But I'd say that that's a good anchor to note. And so we will anticipate, as a result, a bit of an increase in terms of the reserve and resource numbers that we'll come out with.
Brian Tabolt: But we're very much from a process perspective in the midst of that important work on our reserve and resource, grounded in price for sure, but there's obviously a lot of other dynamics associated with progressing the reserve and resource declaration that we're in a position to do that and announce that as part of our year-end close process tied to our business plan and cost outlook. So that's a bit of flavor of what I would share with you with regards to kind of where we're at from a process perspective. But you can anticipate a bit of an increase in gold price.
Natascha Viljoen: I think your follow-on question to that was how does that impact our thinking about Cerro Negro, Vein Zone, and Yanacocha. I think important, and Lawson, I think we've had a little bit of a conversation about this before. Resource and reserves, we're also quite conservative, where we think about mine design optimization for productivity of mine design and any near or short-term low capital opportunities like Vein Zone and Yanacocha. We do take a different approach to thinking about gold price, and we do consider near-term gold price. Both of these instances is no real capital allocation, quick ounces. It's a quick turnaround that should able to benefit from the higher gold price environment that we are seeing at the moment. Your question around Cadia. No, the incidents that we've had will not impact our reserve assumptions around Cadia.
Lawson Winder: Okay, that's great. Thank you very much.
Natascha Viljoen: Thanks, Lawson.
Operator 2: Your next question comes from Daniel Morgan with Barrenjoey. Please go ahead.
Daniel Morgan: Hi, Natascha. Back to Red Chris. The returns and IRR of double-digit given, is that just for the first 13 years? I presume only macro block 1, 2. Is there any benefit from future caves included in that, i.e., macro block 3? Would you leverage the same crusher for macro block 3? I am just trying to marry up, there is obviously a lot of life in mine infrastructure which happens in phase 1, but perhaps you have not got the benefits and the returns. I am just trying to understand that. Thank you.
Natascha Viljoen: Yeah, Daniel, I think that is a good assumption. As we indicated, for about 40% of the capital that we spend is for infrastructure that will benefit future block caves. These economics will assume 100% of the capital. That is part of our standard. So this project needs to be standalone, have the right economics on a standalone basis. I think that is important. So certainly, we will be able. Perhaps the way you can think about it is just to look at the benefit that we see at Cadia, where we have similar benefits of using shared infrastructure across future caves, and the economics just continue to improve.
Daniel Morgan: Yeah. Thank you. I just wanted to ask about the funding. I see that you are looking to plan it. Obviously, you have got a very strong balance sheet. What are the rights you have under your JV partner agreement, and might you contemplate investment more than potentially your 70% interest and get a higher proportion of the project? Thank you.
Natascha Viljoen: Yeah, Daniel, we are in discussion with our partner and they have full visibility of the project capital, and we are working closely with them as they run it through their relevant processes.
Daniel Morgan: Okay. Thank you, Natascha, for your perspectives.
Natascha Viljoen: Thanks, Daniel.
Operator 2: Your next question comes from Adam Baker with Macquarie. Please go ahead.
Adam Baker: Hi, Natascha and team. Thanks for the opportunity. Just during the quarter, you reached an agreement with Barrick to vend Fourmile into the Nevada JV for $1.95 billion. Just wondering how you can give us some color to how these discussions came about, including the timing, why now, and also how you landed on the $1.95 billion because this optically appeared to be a great deal for you guys. Thank you.
Natascha Viljoen: Adam, the final agreement had a number of different components. As you've pointed out, we have Fourmile, Mike, and Fiberline that was contributed to the joint venture agreement. We had the opportunity to re-look the agreement also from a governance point of view and an opportunity for us as joint venture partners to work closer together to optimize that district. I think I'm personally quite excited about that district because it's the first time that we can look at that district unencumbered to improve its performance. I think it's important to know that a number of different components that came together in the outcome of the $1.95 billion. We're pleased that we were able to conclude this with a modernized agreement and I think a really bright outlook for the asset.
Adam Baker: All right. I'll let you know. Thank you.
Natascha Viljoen: Thanks, Adam.
Operator 2: Your next question comes from Martin Pradier with Veritas Investment Research. Please go ahead.
Martin Pradier: Thank you for taking my question. My question is on depreciation. The depreciation year-to-date has been $1,870 million, rounding, so about $630 million per quarter. You are guiding $2,815 million, which implies that roughly you have to get $950 million in the last quarter. Is that realistic, or should I think that it should be more like the previous quarters? The second question would be on the remediation, where you have in the 9 months, $358 million, and the guidance is $385 million, so you have very little left. If you can provide some guidance on those two items. Thank you.
Brian Tabolt: Martin, thanks for the question. As it relates to the depreciation, the way I would think about that is, we mentioned that we do have our highest production quarter in Q4, so naturally there will be a bit more depreciation coming off as we round out the year. I think as it relates to the guidance that we had at the beginning of the year, there is an element of uncertainty associated with that depreciation estimate. Certainly there is an element that we do anticipate that we will probably be closer towards the lower end of the range as it relates to that depreciation guidance.
Brian Tabolt: On the remediation and reclamation, if I am thinking of what you are referring to as it relates to Yanacocha water treatment plants, we are, as I think we mentioned in the prepared remarks, quite pleased in terms of where the water treatment plants are relative to their construction and their readiness. Some of that is reflected in the year-to-date spend, so we are well on pace as it relates to closing those projects out and getting them compliant in 2027.
Martin Pradier: So you will be close to that $385 million guidance, or you will be well ahead of that? That is really the core of the question.
Brian Tabolt: Okay. Sorry. If it is related to the accretion, this would be tied to a core accretion. What you may be seeing is that there is an element of remediation liability that we booked in Q3 as it relates to our Midnight Mine operation in the state of Washington. That is a bit of a one-off. It is not related specifically to accretion.
Martin Pradier: Oh, okay.
Brian Tabolt: Thanks, Martin.
Operator 2: Your next question comes from Anita Soni with CIBC World Markets. Please go ahead.
Anita Soni: Thanks for taking my question. My apologies if this has been asked before, but I just wanted to understand, the transaction with Barrick for NGM, sorry, for Fourmile, has that been papered? I understand that it is 30 days from the day that the contract gets written up, and that is when you will have to deliver. Has that happened yet?
Brian Tabolt: No, Anita, that was reflected in the opening remarks. We are on pace to close out the vend-in process, but the payment, you are right, is 30 days after the completion of the vend-in. The vend-in itself has not yet occurred, but we are anticipating it closing in Q4.
Anita Soni: Okay. One other question, just on Ahafo North. I was just wondering about the ramp up. I was just wondering about the ramp up at Ahafo North in Q4 and going into next year. I think it was a little sluggish this quarter compared to my expectations. So just wondering how that evolves over the next four or five quarters.
Natascha Viljoen: Yes, Anita. Thank you for that question. So we do see as we continue the ramp up, Ahafo North moving into higher grade areas into the next quarter. So you will see that continuous increase as we ramp up.
Anita Soni: Okay. Thank you. That is all my questions.
Natascha Viljoen: Thanks, Anita.
Operator 2: This concludes the question and answer session. I will now turn the call back to Newmont's CEO for closing remarks.
Natascha Viljoen: Thank you so much, Rebecca. Just to say thank you, everyone, for joining our call today. We always enjoy talking to you, and we are excited about the opportunities ahead, and we are looking forward to updating you on our progress next quarter.
Operator 2: Thank you for attending today's presentation. You may now disconnect. This event has now concluded. Access the Newmont USA Limited IR website for more information. This line will now disconnect.
