Good morning, and welcome to Newmont’s Second Quarter 2022 Earnings Call. All participants will be in a listen-only mode. Operator provided instructions. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Tom Palmer, President and Chief Executive Officer. Tom, please go ahead.

Thank you, Operator. Good morning, and thank you all for joining Newmont’s second quarter 2022 earnings call. Today, I'm joined by Rob Atkinson and Nancy Buese, along with other members of our executive team. And we will be available to answer questions at the end of the call. Before I begin, please note our cautionary statement and refer to our SEC filings, which can be found on our website. Newmont delivered a solid second quarter as we continue to differentiate ourselves through our leading portfolio of assets and projects, our proven integrated operating model, and our balanced and disciplined approach to capital allocation. And most importantly, our values driven commitment to our purpose of creating value and improving lives through sustainable and responsible mining. Underpinned by these key differentiators and guided by our clear and consistent strategy, Newmont remain well positioned to safely manage through the evolving and unprecedented challenges that our industry and the world at large face. During the second quarter, Newmont produced 1.5 million ounces of gold, an increase of over 150,000 ounces from the first quarter and as expected. In addition, we produced more than 330,000 gold equivalent ounces from copper, silver, lead and zinc, bringing us to well over 1.8 million gold equivalent ounces for the quarter from our balanced global portfolio. We generated significant operating cash flow of $1 billion and free cash flow of $514 million, an improvement of more than $260 million from the first quarter. With $7.3 billion in total liquidity, we have maintained an investment grade balance sheet with a net debt to EBITDA ratio of three times. Preserving our financial flexibility, whilst we continue to invest in our most profitable organic projects and return cash to shareholders. In June, we completed the acquisition of Sumitomo’s interest in Yanacocha, bringing Newmont's ownership in this operation and the exciting sulfides project to 100%. And last week, we declared a second quarter dividend of $0.55, maintaining an attractive dividend yield of between 3% and 4% for the last seven consecutive quarters. Set within our established industry leading framework and calibrated at $1,800 gold price, our second quarter dividend demonstrates our confidence in the strength of both our portfolio and our operating model to deliver sustainable long term value. In May, we published our second annual climate report, part of the suite of reports and our company's non-financial performance. To address climate change and make a real impact, we will need to leverage Newmont’s leading ESG practices, our integrated operating model and the scale and mine life of our global portfolio. These are all important components not only for creating long-term value, but also for addressing the critical issues that our industry must solve, none more important than the elimination of fatalities. Safety is a core company value, and it is at the very heart of operating any sustainable business. I expect it to be the first consideration before anyone begins work at any Newmont location, ensuring that our workforce returns home safely after each and every shift. We have continued our discipline and dedicated approach to safety, maintaining a clear focus on managing the critical controls that must be in place at all times to prevent fatalities. During the second quarter, we completed 155,000 conversations by leaders in the field that were focused on these critical controls. Two years ago, we commissioned mobile technology to gather consistent data globally around these important discussions, which we call critical control verifications. And I'm pleased to say that since then, our leaders have now completed more than 800,000 of these conversations. Over the last three years, Newmont has continued to evolve our approach to safety across our global business, improving our fatality risk management program to ensure it is as effective and as insightful as possible. By combining our learnings from significant potential events and critical control verification data, we are now able to gain a deep understanding of the fatality risks of each operation and importantly, what is needed to be done to reduce these risks. At Newmont, we have created a robust and diverse portfolio of operations, along with a pipeline of more than 20 organic projects with the scale and mine life to deliver strong long-term results. Newmont will produce more than 6 million ounces of gold each year and almost 2 million gold equivalent ounces from copper, silver lead and zinc. Combined, that is nearly 8 million gold equivalent ounces every year for at least the next decade, the most of any company in our industry. Among our 12 operating mines and two joint ventures, nearly 9% of our attributable gold production comes from top tier jurisdictions. Because we firmly believe that where we choose to invest and operate matters. And underpinning our portfolio is a robust foundation of reserves and resources, which combined with the gold industry's best organic project pipeline, provides the pathway to steady production and cash flow well into the 2040s. We are in a period of meaningful reinvestment as we continue to advance our near term projects, including the second expansion at Tanami in Australia's Northern Territory, the development of Ahafo North in Ghana and the Yanacocha Sulfides project, the next exciting chapter in Newmont’s long and profitable journey in Peru. And in addition to our three near term projects, Newmont has a deep pipeline of longer term projects that represent growth opportunities for later in this decade and beyond. These projects and operations are managed through a proven, integrated operating model with a strong track record of delivering long-term value to all of our stakeholders. Newmont's operating model is built upon the fundamental principle that the whole is worth more than the sum of the individual parts. And it is strongly supported by our full potential continuous improvement program, a program that has been in place for over eight years and is more important today than it has ever been. Our team is taking the lessons learned during the pandemic to address the challenges that our industry faces today, including tight labor markets, inflation and supply chain disruptions. As the world is reacting to these pressures we are actively deploying strategies to reduce our exposure. Our global supply chain team is leveraging our scale and the strong partnerships we have developed over many years with our key suppliers and equipment manufacturers. As the industry leader, we have best in class pricing as well as sophisticated rise and fall formulas built into our long term contracts to reduce both volatility and mitigate logistical constraints in order to prevent disruption in our operations. And whilst we can't talk about specific contracts, several of our major equipment and parts suppliers have recently issued comprehensive price increases for the industry that range from 15% to 30%. However, through the efforts of our global supply chain team, we have negotiated lower price increases, in some cases of only 3% to 5% for the coming year. In addition to this, we are challenging the gold industry by implementing new technology to improve productivity and reduce labor risk, such as our transition last year to a fully autonomous whole truck fleet at Boddington. We are leveraging our full potential program, which has been instrumental in delivering value during these unprecedented times, helping to offset the impacts from current market conditions. And we are utilizing real time data and our global team has subject matter experts to share knowledge and talent across our global portfolio, providing critical insights and driving improved performance that our operating teams simply cannot achieve on their own. It's one of the most tangible examples of this. We have designed and implemented three operational support networks covering our core areas of mining, processing and asset management. These global networks bring together our technical experts from around the world providing 24 hour monitoring, coaching and support through a consistent platform. In the mining industry, we traditionally expect our frontline leaders to obtain their own data and insights as they manage everything involved in safely leading a team of people at the start, during and end of a shift. Through our support networks, we help our leaders by monitoring operational performance and providing insights into the areas that need their attention: saving time; improving focus; and removing the need for so many people at our mine sites. And by offering a more flexible work environment, Newmont is able to attract the best talent from within and beyond our industry, creating a more diverse, motivated, and highly skilled team to coach and support not one, but all of our operations. In addition to our dedicated and disciplined approach to cost management, you can also expect that we will remain transparent about what we are experiencing today and what we are anticipating in the future from this unprecedented environment. Over the last eight months, we have observed cost pressures, including the impact from Russia's invasion of Ukraine and increasingly competitive labor market, and the highest global inflation rates our world has seen in nearly 40 years. As a consequence, we are anticipating an additional 7% of cost escalation this year. That is on top of the 5% we had already included in our full-year outlook we established last December. Around one third of this increase is related to labor costs. We are seeing contracted services rates that are more than 10% higher than December last year, driven primarily by strong competition for specialized labor, higher levels of post pandemic accretion resulting in higher demand and the pass-through of higher commodity prices and transportation costs. The next one third of the impact comes from an increase in prices for global commodities and raw materials. We're observing escalation in the range of 20% to 30% for certain items such as cyanide and explosives, which is being driven by the increase in the price of natural gas and the availability of ammonia. As well as an increase in the price of steel that is being used in our grinding media and spare parts. And the final third of the impact is coming from higher fuel and energy costs. As an example, diesel prices have increased by more than $50 per barrel, adding approximately $20 per ounce to our all-in sustaining costs compared to our original guidance. I'll now turn it over to Rob and then Nancy for a more detailed look at our operational and financial performance, and they will discuss how our second quarter results have been impacted by the current environment. I will then wrap up with an overview of our outlook for the remainder of this year, as we remain focused on implementing productivity improvements, and offsetting the impacts of these challenging market conditions. Over to you, Rob.

Thank you, Tom, and good morning, everyone. Turning to the next slide. Let's dive into our operations and projects starting with Africa. Our team delivered a solid performance in the second quarter due to higher ore grade and tonnes mined in addition to strong mill performance, and the team is working to complete an open pit layback, and we expect stripping to decrease in the third quarter as we begin to reach the ore, and create future optionality for both underground and open pit growth. Ahafo South delivered a strong second quarter performance increasing gold production by more than 25% compared to the first quarter due to improved ore grades, higher underground and open pit ore tonnes mined and steady mill performance. And despite the challenges experienced during the first quarter from supply chain disruptions and global border closures, as a result of COVID, the team continues to successfully ramp up mining rates in the Subika underground, which Tom will discuss later on. We anticipate production at Ahafo to be weighted around 60% to the second half of this year as we continue to increase underground tons through increased development and reach higher grades, positioning Ahafo for a strong finish to the year. And finally, the team continues to progress engineering and procurement for the Ahafo North project. All of the permitting has been completed, and we are encouraged by our recent discussions as we continue the important stakeholder engagement work with local communities, traditional leaders, and regulators to ensure full land access, that it is properly cleared of all structures and quarters. As I have mentioned in previous updates, this will be an important milestone, which will give us the opportunity to update the remaining costs and schedule to develop this prolific ore body, ensuring that we can properly incorporate the impacts from this land access delay. As a consequence of working through this important activity, preliminary capital costs are expected to be approximately 15% higher than our original estimate. And we are anticipating a shift in commercial production from 2024 to mid 2025. We look forward to providing additional detail later this year, as we work to add profitable production from the best unmined gold deposit in West Africa. And now turning to South America, Cerro Negro delivered another strong performance in the second quarter as a result of steady grade and ongoing improvements to mining rates and mill performance. The team continues to advance the first wave of expansions at Cerro Negro, including the expansion of the Marianas district and the development of the Eastern district to extend existing operations beyond 2030. The development of the San Marcos decline is progressing and we have successfully completed the first blast in the Eastern district in May of this year, an exciting accomplishment as we continue to explore and develop the district potential in Argentina. At Merian, the team delivered a steady performance despite very heavy rainfall in the second quarter, impacting mined sequencing and resulting in lower ore tonnes mined and milled in addition to lower grades. We anticipate higher production in the third and fourth quarter, as the rainy season comes to an end, improving mill performance and reaching higher ore grades in the second half of the year. And finally, Yanacocha continued to deliver solid production during the second quarter accelerating ounces from the re-leaching program and improving recoveries from the use of a richer leaching solution. We anticipate production at Yanacocha to be weighted around 55% to the first half of this year, as a site decreases ounces mined and placed on the leach pads while we work to develop the first phase of the Sulfide project. Engineering is nearly 60% complete and procurement is around 45% complete with approximately one third of the local contracts already awarded. And as you can see in the picture here, the team is progressing the camp construction and early earth works as planned, ensuring we have in place proper accommodations for our construction workforce and for future mine operations. The project team is preparing for an investment decision in late 2022, and we currently expect capital spend to be around $2.5 billion from the full funds approval date with commercial production in mid-2026. We look forward to providing an update towards the end of the year, and we remain very excited about the opportunity to develop the Sulfide potential at Yanacocha. And now over to North America. Penasquito delivered another solid quarter as higher gold and silver grades helped to offset the impact from planned mill maintenance and higher costs associated with the workforce negotiation announced earlier this month. As part of the newly established profit-sharing agreement, Newmont Penasquito has agreed to pay an uncapped profit sharing bonus up to 10% of profits from the operation, with an expense of $70 million related to 2021 results, adding more than $65 per ounce to North America's second quarter all-in sustaining costs for gold and over $180 per ounce for gold equivalent ounces. For 2022, we expect the profit sharing bonus to add additional costs of around $15 million at a $1,800 gold price, adding approximately $4 per ounce to North America's all-in sustaining costs for gold and $10 per ounce for gold equivalent ounces. We reached this agreement with the workforce of Penasquito without interruption to the site, and we continue to build an aligned and valued relationship with union leadership to support the safe and viable operation of the mine well into the future. Looking ahead, costs are expected to stabilize as gold production from this large polymetallic mine increases in the third quarter due to higher grades delivered from the Penasco pit, whilst gold equivalent grades from silver, lead and zinc begin to decline in the second half of the year as planned due to mine sequencing. Moving to Canada. Productivity and costs continued to be impacted by ongoing challenges stemming from a very competitive labor market. In addition to these challenges, Eleonore experienced COVID-related absenteeism during the second quarter as flight capacity restrictions and strict protocols remained in place to protect the health of our First Nation communities and workforce. Musselwhite and Porcupine both delivered an improved performance compared to the first quarter, increasing ore tonnes mined and processed with Musselwhite delivering its best monthly performance in over 3 years. Productivity and ore grades at both sites are expected to continue improving in the second half of the year as mining in Musselwhite progresses to the north in the PQ deeps area, and Porcupine reaches higher grades from Hoyle and Borden beginning in the third quarter. And finally, at CC&V, the site delivered improved production compared to the first quarter due to higher ore tonnes mined and processed at our leach facilities. And as Tom will discuss later on, the mine is now operating as a leach facility with steady production from optimized work placement and declining per unit costs for the remainder of the year. And now turning to Australia. As mentioned during the first quarter earnings call, the Western Australian border was reopened in early March, resulting in significantly higher case counts, ongoing testing requirements and strict close contact protocols throughout the state. Approximately one third of the Boddington workforce and half of the Tanami workforce tested positive for COVID in the second quarter and high levels of absenteeism from positive cases and close contact isolation protocols continues to challenge productivity at both sites. In addition, Australia is experiencing a tightening of the labor market as the competition for skilled workers and contracted services has intensified in recent months. Yet despite these challenges, Boddington delivered a strong second quarter performance. The team reported an increase in gold and copper production of more than 25% compared to the first quarter as higher mill throughput and grade more than offset lower tonnes mined due to inclement weather. Performance from Boddington's fleet of fully autonomous haul trucks continues to improve each quarter. And for the remainder of the year, Boddington will focus on achieving record mill throughput rates and increasing tonnes mined from this cornerstone asset. At Tanami, the site also delivered improved production with an increase of more than 25% compared to the first quarter due to higher ore grades, an increase in tonnes mined and improved mill performance, helping to offset the impacts from higher contracted services costs in a very competitive labor market. With the ongoing challenges of securing specialized labor and contracted services, the team continues to successfully progress the second expansion at Tanami, a project that will extend mine life beyond 2040. Nearly 90% of the project engineering and procurement has been completed protecting the project from a number of inflationary pressures. During the third quarter, the team will complete the reaming of the 1.5 kilometer deep, 5.5-meter wide shaft and the installation of the head frame and hoisting infrastructure, which, as you can see here, is nearly 95% complete. And as I have mentioned in previous updates on this project, this will be an important milestone as we evaluate the remaining schedule and cost to complete the project with the key work remaining involving the concrete lining of this production shaft. This process will also ensure that we properly incorporate the significant impacts from COVID-related restrictions and protocols and the current market conditions for labor and materials. We continue to operate in a very competitive labor market in the Northern Territory with significant demand from mining competitors and infrastructure initiatives throughout Australia. Based on our preliminary view, we expect capital costs to be approximately 25% higher than our prior estimate and a shift in commercial production from 2024 into early 2025. We look forward to providing additional detail later this year, and we remain excited to deliver significant pounds, cost and efficiency improvements at this world-class asset. And with that, I'll turn it over to Nancy on the next slide.

Thanks, Rob. Let's start with a look at the financial highlights. Newmont delivered a solid performance in the second quarter with $3.1 billion in revenue at a realized gold price of $1,836 per ounce, adjusted EBITDA of $1.1 billion and solid free cash flow of $514 million. Our strong cash flow generation allows Newmont to provide superior shareholder returns, largely through our industry-leading dividend framework. Last week, we declared a regular quarterly dividend of $0.55 per share, calibrated at $1,800 per ounce, demonstrating our confidence in our future outlook and our commitment to leading returns. And as Tom mentioned earlier, we're in a period of meaningful reinvestment, an essential component in growing production, improving margins and extending mine life. In the second quarter, we invested more than $600 million through capital, exploration and advanced project spend as we continue to progress our near-term projects and invest in our future. In July, we paid $34 million in advanced project spend, part of our initial $100 million commitment to Caterpillar, as we work to develop autonomous battery electric haul trucks for our open pit CC&V and our underground mine at Tanami. Compared to the first quarter, adjusted net income declined more than $0.20 due to the macroeconomic factors that Tom mentioned earlier, in addition to lower realized metal prices for gold, copper, silver, lead and zinc. We sold 46% of our metal in the month of June at an average gold price of $1,834 per ounce, substantially decreasing our average realized gold price for the quarter compared to the LBMA gold price of $1,871 per ounce. Average realized metal prices were also impacted by $105 million of unfavorable mark-to-market adjustments on provisionally priced sales due to a sharp decline in metal prices on June 30. These impacts alone resulted in a reduction to net income of approximately $0.19 per share compared to the first quarter, largely offsetting a 12% increase in gold sales volumes due to higher production from our operations in Australia and Africa. In addition, we experienced an increase of approximately $80 million from higher labor and materials costs and nearly $50 million from higher diesel and energy prices compared to the first quarter. And as Rob mentioned, we incurred a $70 million expense in the second quarter related to the Penasquito profit-sharing agreement. These impacts, along with smaller, less meaningful items, resulted in second quarter adjusted net income of $362 million or $0.46 per diluted share. Despite the current market environment, our capital allocation priorities remain unchanged with a clear strategy: to reinvest in our business through exploration and organic growth projects; to maintain financial strength and flexibility in our balance sheet and to continue to provide industry-leading returns to shareholders. In the first half of this year, we delivered on each of these priorities by progressing our profitable reinvestment into the business with the advancement of our near-term projects and an ongoing commitment to our robust exploration strategy, enhancing our ownership of world-class assets and proven mining jurisdictions through the acquisition of the remaining interest in Yanacocha and the Sulfides project. Maintaining our industry-leading dividend of $2.20 per share on an annualized basis and sustaining a strong balance sheet with $7.3 billion in liquidity and a net debt-to-EBITDA ratio of 0.3x, preserving Newmont's financial flexibility with no debt due until 2029. As we look towards the second half of the year, we remain confident in our ability to continue delivering strong results and free cash flow to maintain our disciplined approach to capital allocation and creating long-term value for the business and all of our stakeholders. With that, I'll hand it back to Tom to talk about what to expect for the remainder of 2022.

Thanks, Nancy. And turning to the next slide. During our first quarter earnings call in late April, we provided an update on the impacts to our managed operations as a consequence of safely managing through the Omicron surge over the first 4 months of this year. We also discussed the emerging impacts from Russia's invasion of Ukraine, combined with the ongoing impacts from the global pandemic on labor markets and global supply chains, and as a consequence, input costs. We advised that we are closely monitoring these matters during the second quarter and would provide an update with our Q2 earnings in July. As a consequence of this work, we have decided to update our full year guidance to incorporate the following items. First, as we discussed in our earnings call in April, ramp-up mining rates at our new Subika underground mine at Ahafo South have been impacted by supply chain disruptions that have delayed the delivery of the required production drills and global border closures that have impacted labor availability of the key talent necessary to develop this new mine and train our operators. As also discussed in April, I can now confirm that we are advancing the development of a third production level at Subika, which will add optionality for this mine and minimize future disruptions. We expect first ore from this new third level around the middle of next year. Second, as we discussed in April, with the pending conclusion of our contracts to supply concentrate from Cripple Creek & Victor to Nevada Gold Mines, we stepped back to assess our operating strategy at Cripple Creek & Victor to determine if there was the potential for a simpler, higher-value, longer life, leach-only operation that does not carry the complexity and cost of running a mill to process a relatively small amount of the ore mined. This work has now been completed, and we have made the decision to put the mill into care and maintenance and move to a heap leach-only operation reducing production levels into the second half of this year and beyond as a consequence. Third, as Rob discussed, we continue to be impacted by the ongoing challenges associated with safely managing through the global pandemic. These challenges are particularly pronounced in Canada and Australia where we continue to adhere to strict close contact isolation protocols and test requirements impacting productivity and increasing costs. And finally, as I discussed earlier, the impact on our input costs from escalation in the 3 key areas of labor, material and consumables and fuel and energy. These impacts to our managed operations have been built into our second half forecast as we work to address the critical global issues we face today and deliver on our updated guidance. So for 2022, we now expect to produce 6 million ounces of gold, which is within our original guidance range, but now incorporates the following changes from the impacts I just described. 80,000 ounces at our Ahafo South operation, 50,000 ounces across our Canadian operations, 40,000 ounces at Cripple Creek & Victor and 30,000 ounces across our Australian operations. The impact from these lower production volumes, coupled with higher input prices from inflationary pressures, has also increased our gold all-in sustaining cost for this year to $1,150 per ounce. We remain within guidance for sustaining capital. However, we anticipate our spend to be weighted around 55% to the second half of this year due to global supply chain delays in the first half and higher input costs. The unprecedented and evolving market environment has also impacted our expectations for development capital since we established our guidance in December last year. As a consequence, we have reduced our estimate for development capital for this year to $1.1 billion, incorporating delays in spending primarily associated with Ahafo and Yanacocha sulfides. In addition, over the next few months, we will pass through the land access milestone for Ahafo North and the completion of the Shaft Remy milestone for the Tanami expansion and be in a position to clearly evaluate the remaining cost and schedule to complete both these important projects. Building on the trends that Rob just described, we'll be in a position to provide additional detail on both these projects later this year. As we look ahead, we expect that inflationary pressures and the impacts from a competitive labor market will persist into 2023, resulting in production levels and unit costs that will be similar to this year. We are actively working on our 2023 business plan and look forward to providing you additional detail on our long-term outlook when we deliver our annual guidance in early December. We will continue to be transparent regarding the challenges we are managing as a mining industry, and we remain firmly committed to advancing the initiatives that are most important to our business, including climate change. In May, we published our second annual climate report, providing stakeholders with a more comprehensive understanding of how we manage the impacts of climate change at our operations and projects. We believe that climate change is one of the greatest existential threats to our way of life. And this report outlines Newmont's climate-related risks and opportunities, our strategic planning around various climate change scenarios and the specific actions we are taking to reduce our carbon footprint. In addition to our climate report and our annual sustainability report published in April, we will launch Newmont's inaugural tax transparency report during the third quarter, which will provide an overview of the taxes we paid as part of the value we create in the countries where we operate. In closing, we have a tremendous opportunity to address the challenges of our dynamic and changing world from inflationary pressures and global supply chain disruptions to climate change and reducing fatalities in the mining industry. Guided by our clear and consistent strategy, we believe that Newmont has the size, scale, leadership and experience to navigate these challenges as we continue into our next 100 years of sustainable and responsible mining. And we are both ready and excited for what is ahead. And with that, I'll turn it over to the operator to open the line for questions. Thank you, operator.

Thank you. Operator provided instructions. Our first question comes from Mr. Lawson Winder from Bank of America.

I wanted to start on the dividend. In light of everything that's happening in terms of cost inflation and as well as your comments and plans to spend quite a bit on capital projects in 2022, '23, '24 and perhaps even beyond during this period of meaningful investment when free cash flow could be pressured by these two factors, is the current dividend sustainable? And then secondly, you've commented, Nancy, in the past that the dividend payout levels are assessed each quarter. And I'm curious, when you think about that assessment and you go through that process, is it the yield that you're focusing on or is it the payout ratio?

Thanks, Lawson. I'll pick up and Nancy, if you want to chip in, I'll pass across to you. Lawson, the key aspect of our dividend framework is gold price, and we look back at gold price over an extended period of time, not necessarily any volatility you may see in a particular quarter and look at the gold price over an extended period of time and we sit down and have that discussion with our Board to ultimately decide the dividend that we pay and determine the cash that we've generated and our capacity to pay a dividend. If you look back over a 6-month, 9-month, 12-month period, gold price is averaging around between $1,850 an ounce over that period of time. So it's the gold price, which drives our dividend framework. And then we look at our capacity to pay in terms of a percentage of the free cash flow we're generating based upon that gold price. Nancy, you might want to comment on yields, more gold price at Newmont.

Yes. It's certainly around gold price and margins much more. We're not solving for a particular yield. I would also indicate, too, we've been on the more conservative side with the 40% payout at $1,800 as we were entering this period of reinvestment. And the other piece I would note was when we put the framework in place several years ago, we started and have continued to enjoy quite high cash balances. And we indicated at that time that that gives us quite a glide path if prices were to change. So we have a great deal of conservatism built into the framework and the ability to continue to consider and evaluate based on those cash balances and our ongoing outlook.

Thanks, Nancy. To build on that, we also recognize that as a long-term business that we'll reinvest from time to time, you'll have periods of greater reinvestment and lower reinvestment over year-on-year or over a period of time. So we take that long-term view into consideration as we look at the spend profile of development capital.

Maybe I would ask it, just one follow-up along the lines of the dividend, which is when you speak of your capital allocation framework, which is reinvest in the business and maintain the balance sheet and then industry-leading returns. Should we think of it as being 1, 2, 3? So reinvesting first, strong balance sheet second and then sort of if there's capital left over, that then goes into the dividend? Or is there a bit of give and take there, for example, could you sort of delay some of these projects in order to maintain a sort of more competitive dividend?

Yes. So the health that we have is a long-term stability of the business, and that absolutely requires reinvestment in these significant capital projects. So that will continue to be a very high priority for us. And certainly, our investment-grade ratings and our balance sheet stability are also important. So we will endeavor to maintain our margins, so we can deliver on all three of those priorities. But certainly, the long-term value of the business is very important to us. So we'll continue to calibrate and balance across all three of those imperatives, but I would say reinvestment is certainly quite critical.

And then just maybe sort of a conceptual bit of a longer-term question. But when you look at the cost pressures that you're facing and particularly the labor difficulties, does this create an imperative to accelerate your automation program and do what you did at Boddington with a greater number of mines? And to what extent can you accelerate that?

Yes. Thanks, Lawson. Good question. I think technology is clearly part of the lever you have as a mining company to improve productivity and reduce costs. And Rob, you might want to comment. I think we have significantly benefited from having autonomous haulage in place at Boddington, probably less so from the cost pressure at this point in time, and more directly from the productivity impact given what Western Australia has seen in terms of the introduction of the virus to that state over the course of the second quarter. But Rob, I think if we had still had conventional people operating trucks at Boddington, they would have been quite a significant impact through the second quarter. I think some mining companies who have conventional fleets in Western Australia will have experienced through the second quarter of this year.

Without a doubt, Tom, and the unpredictability of the virus not knowing who's going to turn up each day would have really impacted operations. To have 36 trucks guaranteed running day in, day out has really delivered operational certainty and continued productivity. So it's been a good outcome for us.

And Lawson, we actually moved to a fallback control room that oversees this fleet of autonomous trucks in the latter part of last year, knowing that borders would eventually open up in Western Australia. We actually built a fallback control room on the village on the Boddington mine site, with several rooms set up from which you could control Boddington so that if we did end up with a case of some of the key operators testing positive, they could continue to isolate and manage the mine from the comfort of their room in the village. And so we're well positioned to use technology in this particular instance. But I think it will be a key driver in the mining industry when we think about how we can manage some of the cost and inflationary pressures that we're experiencing in certain jurisdictions.

I'm going to ask one more. I apologize to my colleagues if I've asked too many questions here, but I just wanted to get your thoughts on buy versus build. Just given the CapEx inflationary pressures here, is there an incentive here to perhaps look at additional M&A opportunities and particularly larger, more meaningful M&A opportunities?

Thanks, Lawson. And for those waiting in line, we'll stay on the call with everyone’s questions. Lawson, our strategy doesn't change. We are very much focused on running our business and investing back in our business. The best investments you can make here are back within the projects that you know very, very well. So that is our main focus, delivering value from our well-managed operations and bringing on and developing our organic project pipeline. But that doesn't mean that our radar isn't turned on. And if an opportunity presented where we could pick up an asset or a portfolio that met Newmont's criteria around size, scale, cost profile and jurisdiction, then we would run the ruler over that. If we felt that we could add more value with that asset or portfolio sitting within our operations. But to be frank, 99% of the people who work at Newmont are focused on delivering value from the portfolio that we are managing today.

Our second question comes from Fahad Tariq from Credit Suisse.

First, on the labor shortage that you're seeing, particularly in Australia and Canada. Can you just touch on the steps you are taking to address that shortage going forward?

Thanks. I'll kick off, and Rob, you might want to build on both of those countries. So if you think about labor, our workforce of Newmont employees is relatively stable. We're seeing turnover or voluntary attrition that is at higher levels than we've maybe seen in the past, towards the higher level but still within manageable levels of what we've seen in the past. So the inflationary pressure is really coming from contracted services or the particular technical expertise that we see. So the labor you need to bring in to do large shutdowns or to repair specialized equipment or to do particular contracted services work. And there's the additional costs that we're starting to see as people bid for the work that is an area that we're watching very carefully. But the area that equally is important to me, if not more important to me, is actually having the people you need to do the work. So we have a scope of work we need to do for our shutdown of a mill that you might take down a couple of times a year. And if we can't get all of the people that you need, how are we thinking about the scope of work to ensure that when we button that mill up and recommission it that we can run reliably until its next shutdown. So there's the cost pressure. But probably more important for me is ensuring that we get the right people working on the equipment to ensure that it's maintained at the right level. Rob, do you want to build on that in Australia and Canada?

Yes. I'll just give one example, Fahad: at the last Boddington shutdown, we were relying on 260 contractors to shore and literally, we had some companies defaulting on entire packages of work. So that really means that we are spending a lot more time with our contractors and our business partners to make sure that we're aligned with those ones, not only for the short term, but also for the long term and continuing to deepen those relationships. And I think just going back to what Tom said about our own employees: the value proposition that Newmont offers with the safety aspect or environmental credentials as well as the leadership and the working conditions, that is very, very attractive to many people, both inside our company and outside. So it really is around our contracting partners where we're spending most time and most work to deepen those relationships.

Just to build a little more on that, Fahad, in my remarks I talked about one of the measures we've got in place to mitigate some of these inflationary pressures: our operational support networks, one of those is in asset management, which is around how we do our maintenance work. Through that asset management program, we are now looking at our maintenance shutdowns across our 12 managed operations around the globe and looking at how we can smooth out the timing of those shutdowns and when we do the different scopes of work. So as there are particular specialist skills that are rare around the world, we're ensuring that we're able to balance their use across our various operations to ensure that we mitigate that risk of not having that critical resource available to do important maintenance work.

And just my second question, switching gears to Yanacocha Sulfide. I noticed the CapEx estimate didn't change in this press release. Just curious if that is going to be reviewed quarterly or monthly or if we should expect something as part of the investment decision? And if the CapEx review was done and the estimate wasn't changed, what's different about the dynamics there versus other parts of the world where you're seeing labor and materials inflation?

So where we're at with the Sulfides project is, we’re past the 50% engineering mark, and for a project of this size that means a significant amount of engineering completed at this stage. We are finalizing quantities as we build towards the investment decision and using those quantities to determine both the definitive schedule and the definitive estimate. The key amount of work that remains with Sulfides is the bulk steel to build the plant and all the steel involved in fabricating the tanks and pipes for the processing facility. So there's the cost of steel and specialist steel fabrication and labor. In the Peruvian context, labor will be very much a local workforce and we have a lot of control to manage that. So the risk is in the escalations we are seeing around the cost of steel. In giving an indication in this update of $2.5 billion from the point of full funds approval, we are incorporating an early look into some of the escalation we're seeing in steel for that go-forward number. So there is some consideration for that, as we're right in the middle of doing our definitive estimate and schedule as we speak.

Our next question comes from Jackie Przybylowski from BMO Capital Markets. Jackie, unfortunately, we are not receiving any audio from you. Can you please make sure that you are unmuted locally? We will take the next caller while Jackie reconnects. Our next question comes from Josh Wolfson from RBC Capital Markets.

Back to the topic of capital allocation, Tom and Nancy. On the theme of the dividend, the existing policy in place had talked about $300 gold price increments being the key factor determining what the payout was going to be. Nancy, I believe you mentioned that there had been some conservatism incorporated in there. We're seeing in the current environment that gold prices have come off and still cost inflation is meaningful. So does the current policy still maintain its relevance? Or should we be thinking about something beyond the $300 increment determining payout?

Thanks, Josh. I might pick that up and Nancy can build on it. I think our dividend policy is deliberately set up to be stable and robust over the longer term. So although we're seeing some volatility in gold price during the last few weeks, we need to see how that plays out going forward. We will continue to follow that framework, look back at the gold price over an extended period of time, the cash we've generated and are generating and make judgments within our framework. I think the area as we look forward in terms of the dividend framework is the debate we're having around what the floor is in the gold price and, ultimately, what gold price we use for mine planning and for determining our reserves and resources. We're still midstream in that debate and if we were to lift the gold price used for mine planning and for reserve setting then we would step back and look at the dividend framework and the construct around that floor and the gold price, which will have moved. So that's probably the most material thing in terms of your question.

Yes, that's exactly right, Tom. When we set our framework, we indicated a dollar-based dividend at a $1,200 gold price and through the inflationary pressures and what we are seeing around reserve pricing, the question becomes what is that floor today. So you may end up seeing a slight shift in the framework, but we have the ability and we'll retain the ability to pay a dividend into the future.

And then also on the share buyback, I noticed there hasn't been much activity year-to-date. What's the current thought process on how cash is allocated towards the buyback?

We continue to evaluate share buybacks. As we've indicated previously, it's a very opportunistic tool, and we will use that at certain times. As we've been doing the work over the past quarter to evaluate the impact of inflationary pressures on our capital projects, we have made the decision to think carefully about where we want to spend our dollars and that's what's resulted in us holding for the moment. We will continue to evaluate our share price and the use of our cash. We do have just a bit under $0.5 billion remaining on the existing program.

Our next question comes from Tanya Jakusconek from Scotiabank.

Can you hear me? I have a couple. I'm going to start the first one maybe to Rob. I don't want to figure out what's happening at Tanami Phase 2 because I was quite surprised at the increase in capital to that extent of 25%. That was a big number for me and also the slippage of over a year was quite a slippage for me. So I'm trying to understand what exactly is happening there to have that amount of capital increase and slippage when we were quite advanced in that project?

Thanks, Tanya, I'll pick that up and then pass to Rob for more color. The key milestone with the production shaft is that it is 1.5 kilometers deep and 5.5 meters wide. As you get to this point where we now have a hole almost finished, we're able to survey the shaft all the way down to understand the condition of the wall and the work required to line that shaft with concrete and install the supporting infrastructure. The process of lining that shaft and installing the hoisting infrastructure is very material and takes time. We haven't provided an update on Tanami Phase 2 cost or schedule since the beginning of last year. So what you're seeing us update now is an indication of the time and materials to complete that work with a clearer understanding of what the shaft looks like and a clear understanding of what the inflationary conditions are in the Australian market. So today's pricing and therefore cost and schedule are based upon a hole that is now largely open. The increases you're seeing aren't dissimilar to escalations that we have seen as an industry, particularly in Australia over that 18-month period. Rob, do you want to provide any additional color?

Yes. To add to Tom's comments, about 60% of the increase is related to COVID impacts, including labor availability—we had around half our project team based in Western Australia and experienced delays, and we had at one point a COVID case at Tanami that resulted in a shutdown of the operation and at least a six-week delay. Absenteeism, labor shortages and logistics have caused significant delay and cost increases. Another roughly 25% is due to increased engineering maturity: now that we've actually completed the shaft hole we can see the actual geology, overbreak and specifics and the engineering maturity has changed. The final point is that, despite these increases, significant work has been accomplished safely during the pandemic and we're proud of that. This reflects the impact of the last 18 months on the project and is the outcome we're sharing today.

Thanks, Rob. This is still an exceptional project. The production shaft and the underlying infrastructure open up one of the great gold resources in the world. We're still incredibly excited about delivering this project as we've reached this milestone and have greater clarity on the cost and schedule to complete it.

And maybe just on the other projects, and I know Josh asked about the CapEx at Yanacocha Sulfides. I'm just wondering, you mentioned that you've done the costing as of now, but you still are working on some steel and other items. So as we get to December, when you have to make an investment decision on that one, should we expect a further update on that one, and perhaps on Cerro Negro and Pamour as well?

Why don't I pick up Sulfides again, and Rob will cover where Cerro Negro and Pampa are. For Sulfides, as I said, we're past 50% engineering and we've ordered a number of long-lead items such as autoclave shells, oxygen plants and key electrical equipment to de-risk cost and schedule. In providing the Sulfides number of $2.5 billion from full funds approval, we are incorporating an early view of escalation on steel and other items. We still need to finalize the definitive estimate, which will give us quoted numbers. Rob?

For Pampa (Pamour) the work is progressing; a large part of the project is about dewatering the current pit and we're on track for dewatering and mechanical completion by the end of this year. We'll take it to the investment committee in the latter part of this year for the layback and be able to provide assumptions and the estimate after that. For Cerro Negro, good progress is being made: we're advancing portals and development work and successfully completed the first blast in the Eastern district. We're still looking at about $300 million development CapEx for Cerro Negro in total. We'll provide more detailed updates through the year, but it's mainly about progress and development milestones.

Okay. And then lastly, just another technical question. How should we think about CC&V going forward from an operational standpoint? I know you gave us guidance of reduction for this year, but I'm keen on understanding this asset longer term—should we think of it as roughly a 150,000 to 200,000 ounce producer run efficiently?

CC&V is moving to focus on open pit mining and heap leach only. We will work to have CC&V run as simply and efficiently as possible because it's focused on mining efficiently and stacking on the heap leach efficiently. With that focus, we expect a long-life operation due to that simplicity and efficiency.

For me, it's about how we strip as much cost out of that operation as possible, leveraging the operating support networks, proximity to Denver and the technology we're developing with Caterpillar. The key is the simple mining and leaching operation and we expect that to deliver a long-life asset that is an important part of the Newmont portfolio.

Is this going to be a 100,000 ounce producer? Is that how I should think about it?

No, Tanya. We would expect it to be more than that—closer to 150,000 to 200,000 ounces if run efficiently, rather than trying to push for higher production with complexity from processing concentrate.

Our next question comes from Anita Soni from CIBC.

I'm just going to ask one more question about the dividend and then move down to Yanacocha Sulfides. On the dividend, Nancy, you mentioned 40% as the calibration. I'm calculating it nearly like 80% to 90% of your free cash flow for the past few quarters. So are we talking about the same basis of free cash flow for how you use it for the dividend?

Thanks, Anita. We think about it over our plan period and forecasting, and we calibrate over the cash we believe we will generate during our planning period, which for us is a five-year planning period and certainly over the much longer term. So in terms of our forecasting and modeling, our view is that we are around the 40% payout calibration at the $1,800 gold price.

Okay. So you're factoring in a better outlook rather than what's near term and happening currently?

I would say that we're investing in our business and investing in our future, and those are the indicated returns from these capital projects from the cash flow they will generate when complete.

Okay. And then the second question was Yanacocha Sulfides. Just to be clear, how much do you plan on spending this year and would that be included in the $2.5 billion estimate?

We're planning to spend about $300 million to $400 million this year on the project as we build up to full funds approval. That includes procurement of long lead items, early earthworks using local contractors, construction of the construction camp with about 4,000 beds to derisk the project, and engineering work with Bechtel and Hatch to derisk the definitive estimate and schedule. Those expenditures this year are part of our development capital profile leading into the definitive decision. Also note we've adjusted our development capital estimate for the year to $1.1 billion.

Okay. And then my last question is with the outlook into 2024. You said production in 2023 may be similar to 2022. If we look into 2024, would you expect a similar profile as well or is there potential improvement in 2024 outside of those two projects?

If you look beyond 2023 to 2024 you're going to see a relatively flat production profile year-on-year as those project delays push the uplift into 2025. So 2024 looks pretty consistent with 2023, and then 2025 will start to see increases from Tanami Phase 2 and beyond, and Yanacocha Sulfides in the following years. Our aim is to be a steady producer of gold at around six to 6.5 million ounces per year and about 7.5 to 8 million gold equivalent ounces all-in.

Our next question comes from Brian MacArthur from Raymond James.

Most asked, but I want to follow up a little on provisional pricing. You mentioned realized price for zinc was $1.08 and given where it closed it seems low. Did you have a lot of open pounds quarter-over-quarter to just settle? You said 46% were settled in June, but even the June price was a lot higher than that. So can you just go through how that works again specifically at Penasquito? And then is some of this cash versus accounting because provisional pricing can swing cash?

Thanks, Brian. That's an important area to unpack. Nancy will start and Daniel Horton from our commercial team can add color.

We did have a big change from March to June. Our concentrate sales take three to six months to finalize, which had a significant impact in the quarter, and we also had outstanding ounces at the end of Q2. Our mark-to-market adjustments were about $40 million for zinc and $23 million for copper, gold was about $21 million and silver $15 million. Those were the largest components driving the provisional pricing adjustments. Daniel, anything else you'd add?

Yes, that's right. Maybe the only other thing I'd add is the average gold price in June was around $1,830 per ounce, which was significantly lower than earlier in the quarter. Also, where gold price is trending now, we could expect another similar adjustment if prices continue to decline in the third quarter.

What's the general timing lag on gold versus base metals? Gold dore settles near term, but what's the typical lag for concentrate gold sales?

The majority of our gold production comes in the form of dore and that settles in the near term, so that's not where we see the biggest impact. Our concentrate shipments settle in about three months on average, and sometimes up to six months, so that represents 20% to 30% of our total production in concentrate form and can have a significant impact on realized prices when markets move rapidly.

Makes sense. How do you think about byproduct adjustments over the long term when you're setting things like the dividend? This quarter you had roughly $90 million in adjustments from byproducts, how are those factored into longer-term planning?

We look at the longer term when considering these matters and when we put the framework in place two years ago we thought about these puts and takes. We have long-term economic guidelines and we do work regularly to look at the forward curve and consensus, and the impact on our plan. Over the long term, peaks and valleys flatten out. This quarter was unusual in its timing and pricing; over the long term the trend line aligns with our economic guidelines.

Our next question comes from Greg Barnes from TD Securities.

Just a question around the inflationary pressures that you're seeing. Are they peaking now? Or do you sense that what we've seen in the first half of this year is going to continue in the second half?

Good question. At a commodity level, many prices have peaked and are flattening out. Labor is the more difficult issue—specialized labor remains tight due to competing infrastructure projects and demand for people in places like Australia and Canada. We've built about $20 per ounce into our AISC to reflect diesel increases and other impacts. We are focused on things we can control: operational support networks, supply chain relationships, building inventories and moving to more local or regional supply where practical. So while commodity pressures may moderate, labor and some logistics issues may persist into 2023.

Maybe a technical question for Nancy: why are gold sales often back-weighted to the end of the quarter? It seems 46% in June alone is a lot.

That's common for many miners. We typically schedule dore shipments to align with the end of a month or quarter to close everything out. Transportation contracts and disruptions can also affect timing. In this quarter, some transportation and logistical issues contributed to the back weighting.

Our next question comes from Adam Josephson from KeyBanc.

Tom, forgive me if you addressed this, but you talked about your expectation that gold costs will be flattish next year. You've entered into some contracts that embed some degree of inflation next year, but you also have onetime costs this quarter at Penasquito that won't repeat. Many global commodity prices have fallen recently. How do all those factors weigh into your preliminary thinking that gold cost will be flattish next year and how much upside or downside risk do you see to that?

Production is a key driver of costs; with production expected to be similar year-on-year, that supports the view of flat unit costs. We're in the middle of our business planning process and evaluating contract assumptions for labor, diesel, spare parts, explosives and cyanide. We feed these into our models and the current preliminary view for 2023 is unit costs similar to 2022. Nancy will also provide sensitivities in our December guidance so you can see impacts of changes in key inputs.

We will continue to provide sensitivity analysis around critical inputs in our guidance in December. At this point, our preliminary planning shows costs in 2023 at or around similar levels to 2022, but we haven't finished all of our planning work yet.

On the labor piece, how sticky do you think that inflation is likely to be? If the global economy goes into recession, could some of the labor pressure ease as workers shift back to mining jobs?

I think it's most pronounced in the United States, Canada and Australia. In Canada and Australia there are big projects and demand for labor is diminishing the pool for mining. I would predict that labor pressures will be reasonably sticky into 2023 in those markets. We're deploying measures like operational support networks and smoothing shutdown schedules to better utilize specialist skills across our global operations.

I agree—those countries in particular will likely see continued demand and pressure for specialized labor. We're working closely with our partners and contractors to manage and deepen relationships.

One last question: If gold prices are high, why does the industry struggle to increase production? It seems supply constraints—COVID, labor, supply chain—are preventing growth despite high prices.

Our strategy is to maintain steady, long-term production—about six to 6.5 million ounces of gold and nearly 8 million gold equivalent ounces when including byproducts. Growth for us focuses on lower-cost ounces and extending mine life rather than short-term production spikes. Our investments in projects like Tanami Phase 2, Ahafo North and Sulfides are aimed at improving margins and mine life, not just short-term ounce increases.

Our next question comes from Mike Parkin from National Bank.

You mentioned contractor service labor competition tied to government infrastructure builds. My other question is on concentrate processing: are you seeing pressures in smelters' ability to process concentrates or rising processing costs due to input commodity price increases?

I'll pass that to Daniel who leads our commercial team to give detail on smelter relationships and concentrate processing.

Thanks, Michael. Our strategy with customers is long-term. While we may see periodic disruptions or changes in smelting costs, our relationships with smelters are very strong and long-standing. We haven't seen anything at this point we would flag as a material risk. Our Penasquito concentrates are unique and in high demand by smelters, so we are not seeing major issues in their willingness or ability to process our material.

Our next question comes from Bob Brackett from Bernstein Research.

Regarding the Ahafo North delayed land access, do you have a sense of where the stakeholder concerns are and how tractable they are and how quickly they may be addressed?

We have robust relationships with all key stakeholders. The government, including regional ministers and regulators, the traditional leaders such as the Asantehene, and the five communities and chiefs around Ahafo North are all engaged. We are working closely with them to resolve outstanding matters so we can clear crops and structures and start work. We will not proceed until we have alignment and support from all stakeholders. This is a hallmark of how we operate—it's critical to secure long-term, sustainable social license before major development activity.

I'd add that this type of development is critical for economic development in the area. The vast majority of people see the benefits and want the project, but the key is ensuring full alignment before we take ground.

Our next question comes from John Tumazos from Very Independent Research.

Thanks to the Newmont team for the service and keeping the results this good in a tough time. Is it fair to interpret that with the background macro uncertainty you are looking through short-term volatility because your long-term view is stable, and given your strong balance sheet you could borrow a bit for CapEx or to fund the dividend? Specifically, with gold price falling and costs up, you're taking a long-term view rather than reacting to short-term moves?

John, you characterized our approach well. We take a long-term view, maintain a very strong balance sheet to provide resilience to volatility, and remain confident in the long-term outlook for gold. We will continue to evaluate current conditions but our strategy is to preserve margins and add cash to the balance sheet during strong cycles to give us flexibility across the cycle.

We know the gold price is cyclical, and we've engineered the business to navigate all parts of the cycle. We've preserved cash and maintained a strong production profile and will continue to evaluate all those factors.

So reinvesting in projects now to strengthen the company for five, ten, twenty years from now remains paramount?

Exactly, John. The strength of the company over the past several years has come from capital investments made through previous cycles. We take a long-term view, invest in projects that generate long-term value and manage through cycles.

Ladies and gentlemen, this concludes the question-and-answer session. I would like to turn the conference call back over to Tom Palmer for any closing remarks. Tom, please go ahead.

Thank you, operator, and thank you, everyone, for your questions today and for taking the time to sit through our summary of the second quarter, a discussion on where we sit for the remainder part of this year. Please enjoy the rest of your week. Thank you, everyone.

Ladies and gentlemen, the conference has now concluded. Thank you for attending today's presentation. You may disconnect your lines now.