NEWMONT Corp /DE/ Q3 FY2023 Earnings Call

good morning and welcome to new month's third quarter 2023 earnings call all participants will be in listen only mode should you need assistance please signal conference specialist by pressing the star key followed by zero after today's presentation there will be an opportunity to ask questions please note this event is being recorded i would now like to turn the conference over to tom palmer president and chief executive officer please go ahead thank you operator good

Good morning everyone and thank you for joining Newmont's third quarter earnings call. Today I'm joined by my executive leadership team including Rob Atkinson and Karen Oberman and we'll all be available to answer your questions at the end of the call. I'd also like to introduce Natasha Villune who officially joined the Newmont executive leadership team at the start of this month. Natasha is a seasoned industry leader and brings more than 30 years of technical, operational and executive leadership experience across a diverse range of commodities and we are very excited to have her join our team at Newmont. Before we begin, please note our cautionary statement and refer to our SEC filings which can be found on our website. during the third quarter we continue to execute on our long-term strategic plan underpinned by a very clear and focused strategy we are leveraging our leadership and collective experience along with the strength of our global portfolio and operating models to build a resilient and sustainable future for newmont our pending acquisition of newcrest is a significant event for our industry it combines two of the sector's top senior gold producers to set the new standard for sustainable responsible gold and copper mining making this a very exciting and transformational time for newmont and all of our stakeholders but before we provide an update on the new crest transaction and what's to come i'd like to start with our review of our safety performance As a company, we have been on a very intentional and significant safety journey, and we are proud that Newmont has not had a fatality in five years. During this time, we redesigned our fatality risk management system to ensure our standards and critical control verifications were focused on risks and behaviours that could result in a fatality. We have completed more than 1.6 million interactions by our leaders in the field that were focused on the critical controls that must be in place at all times to prevent fatalities. We modified the safety targets in our annual incentive program to deliberately move away from the traditional lagging personal injury rates to leading metrics focused on fatality risk reduction and fatigue management. And we focused on doing a few things really, really well, including pre-start meetings, pre-task hazard assessments, and in-field verifications. As a consequence of these actions, we have experienced a significant improvement in our safety performance, which is evidenced by the metrics you see here on this slide. where the health and safety is an area where you must always maintain a sense of chronic unease. We still experience at least one significant potential event every eight days. Each and every one of these are an opportunity to learn from and improve because the safety of our workforce must be considered in everything that we do, every hour, every shift and every day. Turning to our quarterly highlights, during the third quarter, Newark produced 1.3 million ounces of gold and 10,000 tonnes of copper, generating $933 million in adjusted EBITDA and over $1 million of cash from continuing operations, a 53% increase over the prior quarter. And we declared a dividend of $0.40 per share from our established framework. Over the last few months, we achieved a number of important milestones in our key development projects, including fully lining the upper section of the new production shaft at Tanamay in Australia, receiving full funds approval for the Pamor project at Porticayas in Canada, and reaching commercial production at the San Marcos deposit at Cerro Negro in Argentina. importantly earlier this month we also reached a resolution with the Union at our Penasquito mine in Mexico and we are now focused on safely returning our teams to work and ramping up operations at this tier one polymetallic mine throughout the negotiations to resolve this issue we maintained a strong position and held steadfast to our values honoring the collective bargaining agreement that we had in place and ensuring that we protected the long-term value for this mining operation our workforce local community and all of our stakeholders this unnecessary strike has caused significant hardship for many many people and our focus this quarter will be on the safe ramp up of our operations along with the seamless integration of the Newcrest Actors into Newmont's global industry-leading portfolio. Now that we have a resolution to the strike at Penasquito we are updating our outlook for the remainder of the year to incorporate the following three impacts. The first is to reflect the suspension of operations at Penasquito from early June to mid-October. The second is to reflect the lower than anticipated production from both Nevada Gold Bines and Pueblo the Amos and the third is to reflect lower throughput at the Ahapo mill and Rob will provide some more details on these matters in a moment but for 2023 we now expect to produce 5.3 million ounces of gold from the current year month portfolio with a resulting organ sustaining cost of $1,400 an ounce. As a reminder our full year results for 2023 that we'll report in late February next year will incorporate around seven weeks of production from the five acquired Newcrest assets with the transaction currently on track to close on Monday the 5th of November. I'll now turn it to Rob and then Karen to take us through the quarterly results and the important work ahead to deliver a strong fourth quarter. Then I'll provide an update on the new press transaction and what will be the focus of our integration efforts from day one. Over to you Rob. Thank you Tom and good morning everyone. I'll begin my discussion around the high margin tier one assets in our portfolio today starting with Boddington. During the third quarter I had the opportunity to visit Boddington and spend time with the team as they continue to ramp up the planned waste movements in the north and the south pits and prepare for the planned mill maintenance shutdown in the fourth quarter. Laybacks are progressing well, and Boddington delivered solid production in the third quarter as expected. Its strong quarterly performance has helped to offset the impact from mill maintenance and unusually wet weather. Yet despite the heavy rainfall in the third quarter, effective utilisation for the autonomous haul fleet has improved significantly compared to this time last year. Funds mined are expected to increase in the fourth quarter, and I'm pleased to say that we have successfully completed the commissioning of a further five new cat autonomous haul trucks to accelerate stripping in 2024 and position this cornerstone gold copper mine to reach higher grades in 2025. Turning to Tannermine, our Tier 1 mine in the Northern Territory continues to deliver consistently strong results following the record wet weather and extensive flooding experienced in the region during the first quarter of the year. We achieved record milled throughput in August, beating the previous record we set in March of this year. and we continue to expect to reach the year's highest grades and production levels in the fourth quarter. However, we are closely monitoring the impact and the status of the very large wildfires currently burning in the immediate vicinity of Tanamide and in the Northern Territory and we will continue as always to prioritize the health and the safety of our workforce. We also continued to progress our second expansion project at Tana Mine and I was encouraged to see the headway the team is making during my recent visit. We've achieved a significant milestone in the concrete lining of our 1.5 kilometre deep shaft, fully lining the upper sections and removing the mid-shad plug. And as is typical with projects of this size, we will review the project plan as we commence the lining of the lower sections, taking into account the work that has been done so far, the current ground conditions, and the known overbreak needing to be mitigated in the lower section of the shaft. Once complete, this project will deliver significant ounce and cost improvements, further strengthening the already strong margins at our Tier 1 operation at Tannermine, and we look forward to providing an update with our guidance in February of next year. Getting to a half old. As Tom mentioned, third quarter mill throughput was impacted when routine condition monitoring by our asset management team identified hairline fractures to one of the large grinding mill's girth gear at a half old. To reduce any further deterioration to the gear and to prevent a catastrophic failure, we made the decision to operate at less than full capacity, bringing throughput to around 60% for the third quarter. We have, in October, swapped the girth gears between our two milling circuits at Ahapal to ensure our most productive milling circuit is able to run at 100%. This will allow Ahapal to run at approximately 80% until we again reach full processing rates in the second quarter of 2024, when we will install a brand new girth gear. Also, during the quarter, Ahapo accessed higher grade ore from Sabika underground and successfully commissioned the replacement conveyor ahead of schedule and below budget. The Ahapo North project continues to progress as planned and we have access to all critical parcels of land to commence construction of the processing plant and mine services facilities. Airports are ongoing, heavy mining equipment is being assembled and commissioned, contractors are fully mobilized and we remain on track to commence pre-stripping of the first mining area called the Sibenso pit in the fourth quarter this year. Coming to Penasquito, as Tom mentioned in his opening remarks we reached a definitive agreement with the union and received approval from the Mexican Labor Court on October the 13th. We have safely restarted operations and the ramp up is progressing well so far. We are anticipating a return to full productivity in the next two to three weeks and we have restarted waste stripping in the Penasco pit and are now feeding the crusher with ore from the Chile Colorado pit. We are importantly also continuing to strongly focus on the engagement with our workforce. This unnecessary strike caused significant hardship for all of our employees, contractors, host communities, suppliers and customers. Penasquito is the largest employer in Zacatecas with a direct workforce of more than 5,000 and another 28,000 people in neighbouring communities who are part of the mines local and national supply chain, service providers and contractors. As we look ahead to the exciting and profitable future for Penn Mosquito, we will continue to honour our commitments, work closely with all of our stakeholders, apply with the law and the collective bargaining agreement and work to protect the long-term value of this Tier 1 polymetallic mine. Moving to our non-managed joint ventures. Through our joint venture partnerships, Newmont has an interest in four Tier 1 assets, Pueblo Viejo, Harlan, Cortez, and Turquoise Ridge. The joint ventures are core to Newmont's portfolio and contributed 352,000 ounces, or 27% of attributable gold production in the third quarter. As Tom mentioned, reported performance from our non-managed operations has been below expectations for the year, impacting our ability to achieve our production and cost targets for 2023. We have adjusted our projections for both Pueblo Videho and Nevada Goldmines and look forward to an improved performance in the fourth quarter from our joint venture partners. On top of the 800,000 ounces of gold produced from our Tier 1 operations and joint ventures, the remainder of Newmont portfolio contributed approximately 500,000 ounces of profitable gold production, an increase of more than 100,000 ounces compared to the second quarter. And we anticipate solid results from these efforts through the rest of the year. Before I hand it to Karen, I'd like to take a moment to cover a few highlights from our development projects we are currently executing. On top of the achievements that I already noted at our second expansion at Tannermine and Ahapo North, we also achieved key milestones at Serenegro, orcifying and achievement. At Serenegro we declared commercial production for San Marcos, the first of six ore bodies associated with this exciting district expansion. This opens up a further 650,000 ounces of high-grade gold, which will be mined over the coming 10 years. This milestone was delivered on time and on budget, and we expect to start realising the benefit from these high-grade stoves in the fourth quarter of this year. At Porcupine, the PMOR project has been approved for full funds by the Board. This opens up a further 2.1 million ounces of gold and will be mined over the coming 11 years, which helps extend the porcupine complex's operational life to at least 2035. Our mining team will commence pre-stripping in the fourth quarter and are tracking well to produce first ore in 2024. And finally, we advanced our underground project to the team to the feasibility stage where drilling from the surface has already delivered results that are beyond our initial expectations. And with that I'll pass it over to Karen to cover our financial results. Thank you Rob. Let's get started

with the financial highlights. During the third quarter revenue was $2.5 billion at a realized gold price of $1,920 per ounce. An adjusted EBITDA was $933 million dollars of 10 percent from the third quarter of last year driven by higher gold prices and lower direct operating costs. We also generated one billion dollars of cash from operations and 397 million dollars of free cash flow for the quarter which is net of more than 600 million dollars of capital spend as we continue to move through a period of significant reinvestment back into our business. And we closed the quarter with a steady cash position of 3.2 billion dollars and a leverage ratio of 0.7 times net debt to adjusted EBDA. From a financial standpoint, our goal is to maintain a best-in-class investment grade balance sheet while funding value accretive projects and delivering healthy returns. And in recognition of NUMA's ongoing balance sheet strength and financial flexibility, I am pleased to say that we have received a first-time A- rating from Fitch with a stable outlook. We also maintain solid margins in the third quarter despite the challenges that Rob mentioned for Penasquito, AHAFO, and our non-managed short ventures. Third quarter gap net income from continuing operations was $157 million for 20 cents per deleted share. Adjustments this quarter included 14 cents related to revisions in reclamation and remediation plans at former operations, 5 cents related to unrealized mark-to-market losses on equity investments, 2 cents related to transaction costs associated with our pending acquisition of MISBEST, and 5 cents related to tax adjustments and other items. Taking these into account, we reported third quarter adjusted net income of 36 cents per diluted share. As a reference to those modeling included in our quarterly results are $131 million in operating costs and depreciation at Penasquito. This quarter, we declared a dividend of $0.40 per share or $1.60 per share on an annualized basis. This dividend was declared within our established framework, calibrated at a gold price of $1,700 per ounce, and in line with our 2023 dividend payout range of $1.40 to $1.80 per share. Newmont has paid over $5 billion in dividends since closing the Gold Corp transaction in 2019, demonstrating our commitment to our shareholders. On the close of the new press acquisition, Newmont will integrate five new operations into our robust global operating model. February of next year, we expect to provide our 2024 outlook for the combined company with our fourth quarter and four-year results. Consistent with our process, our outlook will inform our 2024 dividend payout range, which we will calibrate within our established dividend framework. As a reminder, we assess the variable portion of our dividends annually in alignment with the business planning cycle, projected cash flows, and the current macroeconomic environment. Similar to this year, our 2024 dividend payout range will apply to our fourth quarter dividend to be declared in February and will be reviewed and approved by our Board of Directors each For a longer-term view of our portfolio, we will apply a disciplined and thoughtful approach to setting market guidance for the combined company. We expect to provide our long-term outlook after we've had some time on the ground with new crest assets and following our annual strategy session with our board of directors which typically takes place in june we look forward to these events and providing more information on the exciting opportunities ahead for both current and future stakeholders and with that i'll pass it on to tom for an update on the new crest transaction thanks karen

the combination of newmont and new crest represents an exceptional value proposition for shareholders and all our other stakeholders through an unrivaled platform featuring the industry's best talent running the highest concentration of tier one assets in the most favorable jurisdictions dimont is uniquely positioned to generate superior returns for decades to come recognizing the strategic rationale to create the industry's strongest portfolio of world-class gold and copper assets. 96% of votes cast by Newmont shareholders and 93% of votes cast by Newquest shareholders were overwhelmingly in favour of this transformational transaction. All of the regulatory approvals and shareholder votes now secured. We expect to close the transaction on monday the 6th of november and set the new standard for gold and copper mining across the industry following the close of the transaction the core of our portfolio will be 10 tier 1 assets representing more than half of the world's top tier gold mines and these assets will have the scale mine life cost profile and resilience to position Newmont to deliver strong and stable returns for several decades leveraging the learning from operating our current tier 1 assets along with our comprehensive asset strategy work we will be applying the strength of our operating model our people and our systems to the newly acquired tier 1 assets in Lahir and Cadia as well as Bruce Jack and Red Chris in our emerging T1 district of British Columbia there is no doubt that Newmont will be operating the world's best gold copper portfolio under one umbrella benefiting from our existing portfolio operating model sustainability practices and disciplined capital allocation process every one of our assets is managed through our integrated global operating model supported by a deep bench of experienced leaders and subject matter experts with a track record of safely delivering value and within this global operating model we will have six regional business units each led by a dedicated managing director from the start of november natasha will assume accountability for our australian business unit led by Mia House, our North American business unit led by Bernard Vessels and Papua New Guinea where we have Alvain Pretorius returning to Newmont to head up this newly established business unit. Through early 2024, GOLF will continue to have accountability for our African business unit led by Dave Thornton, our Latin American and Caribbean business unit led by Mark Rogers and our Peruvian business unit led by Rachman Amadou. We are very fortunate to have Rob as a continuing member of our executive leadership team particularly during this important integration period. Natasha and Rob will work together closely in the coming months and both leaders will be pivotal in delivering synergies for the new press acquisition and driving operational results that demonstrate our position as the benchmark gold equity in just a few days we'll be welcoming our new crest colleagues to newmont and on day one my extended leadership team and i will be on site across every new crest location as we begin our integration work with the new crest team we'll be focused on three key systems that have been fundamental to our success at newmont The first is our fatality risk management program, which is at the very core of our safety approach. And put simply, great companies do not kill people. Second is our respect at work program. A key benefit from bringing these two companies together is the alignment in our values and culture, in particular around safe and inclusive workplaces. We have the opportunity to learn from each other with the programs we both have in place. Like many other companies in the mining industry, we know there are systemic issues that allow sexism, racism, discrimination, harassment and bullying to continue to be experienced in our workplaces. These disrespectful behaviours have no place at Newmont. and we'll be working together to take actions to create a workplace where everyone is welcome and safe. The third key system is our Full Potential program which we'll commence rolling out both Lahir and Katia in November to support the delivery of our synergy commitments. Full Potential is a program that I have led at Newmont over the last decade. It is the most sustainable improvement program that I've worked with in my 35-year career in the industry and it was key to delivering over $1 billion in synergies from our acquisition of Goldcorp some four years ago. However, Full Potential delivers much more than just cost savings and productivity improvements. It sustains and improves our culture by breaking down barriers and encouraging active participation, collaboration, global collaboration and sharing lessons learnt across our organisation. During our due diligence work back in May, we identified and submitted to $500 million in annual synergies across three categories, G&A, supply chain and full potential. As we look ahead to the closing of the transaction and the delivery of these synergies over the first 24 months we are very excited about the long-term value and opportunities it will bring to both sets of stakeholders and our combined workforce this transaction creates the best possible collection of tier one gold and copper assets in the industry all supported by the industry's best talent technical capabilities sustainability practices and different discipline capital allocation process. We'll also increase our investor outreach welcoming shareholders from Australia that will form an important part of our shareholder base as we look to establish and then grow our listing on the ASX. We have a long history and a shared heritage in Australia and we will be strengthening our presence in this key mining jurisdiction where upon the close of this transaction around 30% percent of our revenues will be derived we're looking forward to welcoming the experienced and talented team at Newcrest and providing our first integration update on the combined business in the first quarter of next year and with that I'll thank you for your time today and turn it over to the operator open the line for questions thank you we will now begin the question

and answer session to ask a question you may press start then one on your touchtone phone. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause to assemble our roster. The first question today comes from the line of Lawson Window with Bank of America. Please go ahead. Your line is now open. Great. Thank you very much, Operator,

and thank you for taking the question, Tom and team. You've all discussed the likelihood for the combined company to have lower production than a combined eight million ounces annually. What is the urgency with which you intend to sell any non-core assets to reduce from that level and improve the overall combined

portfolio? Thanks for the question and good morning. In terms of, as Karen talked about, in terms of us taking time to work through the long return outlook with with more like a mid-year and we'll run a capital market state to share that. What we'll look to do almost immediately after close is we have a reserve and resource review team. We call it our 3R review. We'll have that team go into each of the five operations at Newcrest and establish the reserve and resources to the Newmont definition. And then with that reserve and resource review done, we'll then establish Newmont-based resource models and then start to develop our mine plans based upon previous best demonstrated performance and then have those start to convert into business plans and then we'll iterate and work those. So we'll certainly work to reduce a 2024 budget for the combined portfolio, but we're going to take our time to really understand and work those mine plans to understand the potential of those operations, ensure we can deliver on those operations, but also understand projects across that portfolio and how they re-sequence together. so that's going to be work we'll do diligently over the starting in early November for the first few months of next year. In terms of the full portfolio of 17 managed operations as I've described in my remarks Lawson we can very comfortably manage those those operations within our global operating model. This in intensive purposes is a bolt-on of five operations in the new months operating model. Two operations in the Australian Business Unit when I was running Australian Business Unit some years ago I had that number and a couple more from memory. Two operations into North American Business Unit Bernard Vessels very capable to accommodate those two operations and manage them and then standing up our new business unit in Papua New Guinea and as I mentioned one of the one of the very best leaders ever to work at Newmont, Albain Pretorius who retired to go and work on his family farm in South Africa is coming back to be based in Fort Mawson to stand up that business unit. So someone who's very experienced having run very successfully our business unit in Africa some years ago and then our Latin American Carambee business unit. He understands developing world, he understands Newmont and he's really well placed to stand up that new P&G business. So we will capably run those 17 operations and Peter Toth and his team will then look at where the opportunities might be to optimize our portfolio. We have a commitment of $2 billion over the first 24 months that'll be a combination of project re-sequencing will become part of that business planning work that we'll do but we'll also be looking to where the opportunity is to rationalize our portfolio and we'll be looking at those those operations that are tier two and we have a number of T2 operations in our portfolio several have a potential to grow to T1 but we have a number that are clearly T2 and it will work through a very structured process to think about how we might rationalize the portfolio but we are very comfortable also to be able to run 17 operations in our business.

Many thanks and if I could follow up just one final question on your full potential comments in your prepared remarks and the synergies can you comment on which assets might get the greatest attention for that program post-closing on the on the NCM side and put another way is there a penasquito in the NCM portfolio that could materially exceed expectations including in the included in the initial last energy guidance thanks very much

thanks for the total of the $500 million $200 million is attributed to a full potential worth. There are two conosquitos in the Newcrest portfolio, Lahir and Kadia. That's where we'll be focusing our time and attention of the of the $200 million we see the order of $90 million coming out of Lahir as we think about the opportunities to improve the work we do around the mine, the basics of mining from Gill and Blast to Lowden Hall and how the maintenance or asset management works. So we're presenting the best ore consistently to the four auto-claves in that processing plant. We'll have people on the ground next month to start really getting in and understanding those opportunities that we saw during due diligence. I think we certainly planned to tell a story out of Lahir that was very similar to the story we've told out of Peniceto and then Acadia, the other very large tier one operation in the Newcrest portfolio with the opportunities in the processing plant. A big block cave mine, roughly 35 million tons a year coming out of that underground mine. The opportunities we see are to work the bottlenecks in the processing plant, the availability, the reliability, getting consistent throughput through the crushing and grinding circuit so that you've got consistent feed to the flotation circuit and then improve both throughput and recovery. Again very similar to where we worked Penosquito with a big mill crushing and grinding circuit with multiple rotation circuits. So Penosquito story and the Boddington story in terms of working the mill is where we see the analogy or the analogue to Acadia. and then working a mine that will be very similar to the work that Rob and the team led at Penasquito to deliver civility improvement out of that mine to present the ought to a very hungry mill at Penasquito.

Thanks. Fantastic. I look forward to further updates and congratulations.

The next question comes from Daniel Morgan with Baron Jerry. Daniel, please go ahead. Your line is open.

Hi, Tom and Tim. My first question is about the issues that you've had this year. How much of the issues you've had, you know, that has led to the production downgrade today, how much does that follow into 2024? Obviously Panasquito doesn't, but can you just run through, you know, through some of the assets and whether some of the issues run into 2024?

Thanks Daniel and good morning and good morning to you I think it is and thank you for staying up in Australia to listen in and thank you for your coverage. But if you look at the big assets in the Newmont portfolio today Penosquito now that we're up and running we're very confident that there's been a reset of expectations with our workforce and the union that represent them so we go into 24 very confident about the ability to continue to get after cost and productivity improvement safely at that operation the impact on 24 is the mine sequence so where we were in the mine sequence when uh when the operation with operations were suspended um means that what we thought would happen in 24 would be different now it's a polymetallic mine so we're in the chilly colorado pit which is more of the other metals than gold so we won't swing back into Penasco now to Toledo so therefore it will be the balance of metals that come out of Penasco that will be different in 2024 and the gold equivalent ounces emerging so to say. At a Harpo we will be nursing the girth gear that's now on the mill so there's two big sag mills at Tahapho. The girth gear on the the main feed to the processing plant which is two-thirds of the throughput for the mill is now tickety-boo and that can run it and run at 100%. Now it will now nurse the girth gear with the hairline cracks on the smaller mill which is about a third of the throughput through until the end of the first quarter, start of the second quarter of next year. So the processing plant at Tahapho will run at around 80%, 70-80% of throughput as we get through that very managed transition. They're probably the two impacts on our big tier one operations we think into 24. We're still to see fans out of our non-managed joint ventures. They make up about 30% of Giamont's portfolio today. At Pueblo Viejo we're commissioning a very significant expansion to a pressure oxidation circuit so as that is understood and plans are built for 24 that will reflect the latest information from that commissioning exercise and then three big mines in Nevada and as you work through 23 and then understand impacts on on 23 performance and what that means for mine sequence and other things in 24 potentially some impacts there that we'll learn about in the in the next couple of months as we work with our joint venture partners on those plans so hopefully Daniel that gives you some color as to how we think about the impacts from 2023 by 2024. I think the important thing is that with all of the events we've had this year, all of that metal is still in the ground and this is just a process of the time at which that metal presents. None of those issues have any impact in terms of the reserves that we have and it's just a timing at which they can be converted into metal and sold.

That's probably a good segue, Tom, into my next question, which is the market can sometimes get fixated on short-term issues and forget that the gold is still there. So if the market does do that and the share price underperforms as it has year to date, is it an opportune time at some point soon to look to a buyback to maybe communicate to the market that there is long-term value in the in the share price and um that the market may not be pricing in

and thanks daniel i'd certainly say for anyone looking at newmont stock today there's some tremendous buying out there um in terms of the transaction we're about to close and the portfolio that we'll be stewarding um in only less than two weeks time uh daniel the process will work through So we'll diligently work through our business planning. As I was mentioning in the answer to the previous question, we've got five new assets to develop new, my face, my plans too. And work through a process of determining our 2024 budget and continuing in parallel work on the longer term plan. That will then inform our capital allocation process. So for us is ensuring we're maintaining a strong balance sheet, ensuring that we're directing appropriate levels of cash towards reinvestment back in the business to extend life and for growth and ensure we've got returns available to our shareholders. Our capital allocation strategy adds returns first and foremost being through our dividend framework so we'll work through our business planning process particularly for 2024 years and look to how we calibrate our dividend framework and we think about assumptions about gold price the cash will be generating and some of the other macroeconomic events that will be impact in our business and our world at that time. That will be the primary debate and discussion we'll have but as we as we have that debate and we present those numbers to our board and we look at the cash we're generating we look at our share price it is an area that we will continue to debate as a second order capital allocation element returns to shareholders and whether there would be some benefit in terms of how we're seeing the business and whether there would be any benefit in in seeking a mission from the board to establish a bi-bank program so be part of a debate but now first order returns to to our shareholders is through the given in framework I think so much Tom and I look

forward to meeting you in the coming weeks thanks Daniel likely see you in a

couple of weeks maybe in Australia our next question comes from the line of Tanya just goose connect with Scotiabank please go ahead Tanya your line is open

Oh, great. Good morning, everybody, and thank you so much for taking my questions. I just have a couple that I just need some clarity on. Tom, can we just go back to the Newcrest merger that is pending? Can we just talk about Newcrest's reserves and resources? When you report your guidance in February of 2024 for the year and your reserves and resources, Will you be adjusting those reserves and resources based on your input, just like you did with Goldcorp when you took over? You've made adjustments from the reserve to the resource category. And if so, can you review with us some of the minds that we may see some shift? Thank you. That's my first question.

Thanks, Tanya. Yes, you can expect something very similar to what took place when we acquired Goldcorp. So we'll have a team, a technical team on the ground across those five operations through November and December assessing the reserves and resource at each of those operations and assessing those against how you want definitions. So we obviously report under SEC rules and Newcrest report under JORC. So there will be some differences in terms of what is classified as reserve and resource, and we also have a very high standard at Newmont. A Newmont reserve is a higher standard in the industry, so you will see some movement back and forth. In the various announcements we've made since we announced the binding agreement you'll see us talk about a couple of instances of about reserves and resources and you'll see us report them separately for the two companies because there are two different definitions for those. So we we are working towards with that February timeframe to update reserves and resources for the combined portfolio. In terms of any sort of signalling we haven't, I think it's important for everybody, is we had we had access to a data room for four weeks back in April and May to assess and to submit a binding offer and to determine our synergy values and to make some judgments about portfolio optimisation. Since that time both companies are required to run as independent companies and so we have had an integration team working on planning for integration but we have not had any access to any additional Newcrest information since that time. We get the keys to the car on Monday the 6th of November that's the first time we get access to reserves and resources mine plans and the like and can start that work so it's in front of

us Tanya in a couple weeks time. Okay so there isn't anything that you can think of you know for example the Lahire where some of those reserves I think about three million ounces or thereabouts are in the reserve category that needs the additional layback from the I think the dam wall to be included whether something like that could shift from reserves to resources given you know new month's stricter definition have you I'm just giving that as an example I'm just wondering if there's anything between the two accounting the two IFRS and US GAAP on the reserves that just is glaring to you at this point nothing nothing

is at that level of granularity Tanya but the expectation will be similar to Goldcorp experience you will see without going into specifics you will see Newcrest reported reserves in some instances move into Newmont reported resources. You'll also see as I think many people fully understand as we move from interest reporting to accounting for US GAAP accounting our definitions for stockpiles and for sustainable capital and other things will change our co-product by-product accounting will change there'll be some moving paths around all of that as well but we don't

have we don't have that granularity yet Tanya. Okay so and then just on the long-term guidance I think um I heard that um that will be provided after the board strategy meetings in June so should we be thinking mid-year for a five-year guidance outlook? That's that's what we're

that's what we're planning to do Tanya we want to get through that good working session with our board and then really look to set up a capital market stay where we can come together and work through that longer term view. Certainly the five year and certainly the portfolio we're creating here will be looking to show the five to ten year view of the strength of this portfolio. But we certainly want to work with those mine plans over the first few months of next year to really have a roadmap story to share with the market.

Okay, and then just maybe on any more severance and or restructuring costs that we are going to be incurring in Q4, or have these all been taken in Q3?

The severance costs in Q3 are largely unrelated to this transaction. They were associated with the reset work happening down at Yana Kocha, as we're ramping down there. We've got folks taking some voluntary redundancies. so the we will start to see the transaction related severances flow in the fourth quarter and then they'll flow into the third quarter of next year is where you'll see them probably the larger numbers will be in the first quarter of next year than the fourth quarter of this year okay so more cost

in Q4 and Q1 to come and then my last question if I could is I just kind of would like yeah okay with the transaction yeah um and then just my last question is just your view on sort of all of these index rebalancing from now until your end um could you give us some you know overall um qualitative information in terms of what quantitative do you have in terms of how you see all of these index rebalancing occurring you know what your view is on that from now until year-end. It's a little hard with all this movement in the share prices as we

look at the stock, yeah. Thanks, Sam. Lots of moving paths happening at the moment, certainly with the right live in that process of the index rebalancing as new crests coming off the ASX and our secondary listing coming on the ASX and all of that work happening as well as the volatility in terms of gold price movements and so there's lots of moving paths affecting stock performance at the moment. When we look at the we look at our modeling um getting through and out the other side of the rebalancing between um the our headstock and the new york stock exchange and the secondary listing and the asx it's likely to be a month or two for that to settle out so we anticipate with and certainly as we've had conversations with uh shareholders in australia and and describing describing what you can anticipate happening quite a bit of volatility and liquidity before things start settle out in terms of New York Stock Exchange and ASX. We think there'll be some movement of potentially up to 10 billion Aussie that could flow from one to the other. We also anticipate that we'll have something of the order of 10 to 15 billion Aussie market cap sitting on the ASX representing 20 to 30 percent of our market cap. That will be the starting point that we'll lean into and then look to work that secondary listing alongside our primary listing. So We've got some modeling that sort of shows some scenarios as to where we might land between New York Stock Exchange and ASX, and we fully anticipate that it will be volatile and liquid for a month, a couple of months, before everything settles down and you can get a line of sight on the board.

Okay, so what I take on that is some outflows from now until year-end with all of this rebalancing and then settling in, and then, you know, obviously on the positive side would be Australian listing.

The positive side of the Australian listing with a very savvy mining investment community and some very sticky funds with the big super funds there and lots of interest as we've engaged with that investment community. And then you'll also see, I think you'll see positive trends from a passive standpoint with our larger market cap as things settle out. I think you're going to see some of that flow as well. So noisy, but there's some very good signs as to what this portfolio is going to be able to attract.

I appreciate it. Thank you so much for taking my questions.

Our next question comes from Josh Wolfson with RBC. Please go ahead. Your line is now open.

Yeah, thanks very much. I understand there's a lot of moving parts here, but is it possible to provide some goalposts or some indication of what the cost structure looks like, even just for the Newmont portfolio going forward? When we take a look at the numbers, fourth quarter, based on guidance, looks to be an annualized rate of 6 million ounces, which is, let's call it average for the company, and the implied AISC is closer to about 1350, which would be quite a bit higher than where the company was discussing costs, at least for 2024 under the old structure. So I understand a lot of different parts, but just anything on inflation or costs for the new model portfolio going forward.

Thanks, Josh, and good morning. It's a tricky one this year because of some of the events we've managed, which are really impacting ounce production. They've been having a flow and impact on unit cost. But when we look through that to our direct cost base, it's very much in line with what we're expecting for this year. and then as we look into next year that direct cost base is looking pretty steady so it's sort of staying at the levels that we've seen and the sort of stabilising out of inflation very much as we look into next year as we're doing our early planning work the direct cost base looks very similar this year so then for us it'll be working through the ounce profile for this combined portfolio. I'm thinking about, we'll think about our portfolio in a couple of different chunks as we're building our plan. What'll be the tier one operations and the emerging tier one operations that we manage and how we think about those. We'll be thinking about three non-managed joint ventures that we'll have in our portfolio. Nevada Goldmines, Peblo Viejo and Frigid Onolto. And then we'll be thinking about those tier two assets and how we manage those tier two assets and those candidates that uh would be more likely to be part of that portfolio optimization so we would think about what's our cost base for the tier one operations and emerging tier one portfolio that we manage we'll be challenging our non-managed joint ventures around their cost base uh and then we'll be looking at how we manage our tier two assets going forward so we'll be having those debates and turn these and build our business plans. But the high level answer to your question is our direct cost base is very consistent with what we see this year and we'll be working to ensure that we've got some of those, that we're through and out the other side of some of those challenges that we've had with push fires and flooding, a strike and you know a manufacturing fault with a earth gear and a harpo. So we'll certainly be looking at the plan for 24 being pretty consistent in their profile from those operations of a pretty consistent cost basis okay and then

another question I'm not sure if you can provide many details a review of this but you know this is following the new crest recent operating update I'm just wondering you know the performance of these assets has that affected your views on maybe some of the complexity or the strategy for integrating this portfolio or maybe how you're going to manage that process? No Josh, nothing's

changed from our due diligence. We're crystal clear on how we'll manage those operations and how we'll integrate them into our operating model and well advanced in planning in terms of what we'll do on day one, week one, month one and the first 100 days. So there's nothing about anything happened in sort of the more recent times that changes our long-term view on those assets and how we've integrated into them. Thank you very much. Thanks, Martin. Our final question today

comes from Anita Soni with CIBC World Markets. Anita, please go ahead. Your line is open.

Okay. Thank you, Tom and team, for taking my question. So the first one I think is related to capital allocation. When you deliver on the $2 billion in portfolio optimisation, Can you give us an idea whether or not that could be used to support a dividend if needed? Or, you know, do you think you have uses for that capital in terms of reinvesting in your portfolio?

Yeah, thanks, Anita, and good morning. So the portfolio optimization will come from two categories. One will be re-sequencing the projects of the combined portfolio. And so if you match the two portfolios together, what would have been the cash going towards development projects and reinvesting? So that will change and that will then lead to free cash flow that we're generating that would then be informing the decisions we make around calibrating our dividend framework. So that portfolio optimisation will actually lead to generating free cash flow for support of the dividend. Then the portfolio optimisation with the proceeds that we receive from divestments of ActEVs. First and foremost we would bring that on to our balance sheet to strengthen our balance sheet and then make judgments about how we how we use the cash on our balance sheet and certainly as we did with the gold corp um we look back to our gold corp experience and we look at where our to the answer to the earlier question we look at where our share price is trading we have a robust view of where we're valued and if we thought that there was some opportunity um to buy back some shares then that would be the fight we would have uh with our board but the first and foremost that cash would come onto our balance sheet and be used to strengthen and bolster a balance sheet

of a combined organization. Okay, thank you. Second question, just more a little more on the nitty-gritty. Looking at Boddington, is that an appropriate run rate this quarter? Is that kind of what you'll be doing in terms of throughput in grades as you go into 2024 and continue with that lay back or will that you know become more I guess exacerbated and more more stockpile use and more waste stripping happening certainly a bit of

the high sustaining capital Anita was around but getting getting our hands on five trucks to get after the and we had access to those five trucks are getting in earlier to get after the waste movement in the north pit to really start to open up the north and south picture for the next swing into the higher grade ore. So we'll move through 24 and 25 into some more waste movement, some a run of mine ore coming into the plant but also starting to supplement that with stockpile ore. So you will see a movement into in that normal cycle of body tension moving into more waste and some stockpiles and so some lower gold and copper in that normal band that Boddington operates through. So you will see a bit of that dynamic playing out in 2024-2025 before you get back into the high-grade ore in both the more banks out there.

Okay, thanks. And then the final question is with regards to the projects and particularly Tanami where I think you, you know, you pared back some, you revised your development capital number citing the rainfall events that you had. I just wanted to understand when you guys review the projects in the capital and where you basically – do you think you're okay on your capital at Tanamai Expansion 2 right now, or should we be expecting to see an update there? And I ask this because we've seen unit cost escalation across the board, and we just haven't had an update on

those capital numbers for about a year or so. Thanks, Anita. So we've reached an important milestone at Tanami where we've removed the mid-shaft plug and we've lined the upper part of the of the shaft and now we're at that mid-shaft level setting up the infrastructure and then get after the lining of the lower part of the shaft so it's an important milestone where you pause and understand the work in front what you've learned from lining the top part of the shaft how you're going to apply those learnings to the bottom half of the shaft and what the condition of the bottom half of the shaft is as you now go to the run home that work is happening right now. As we're seeing in the Australian market, I think the key cost pressure in capital projects is labour and so just ensuring we understand the labour. We have one have a labour there and full cruise as we get set to go for that second round of sharp lining. That work is live as we're working that through as part of our planning processes and doing our cost and schedule for the run home, that would certainly be something that we would be expecting to provide an update with our 2024 guidance in the latter part of February next year. So we're at the milestone of the project, and it's nicely lined up with a February 2024 update.

Okay, so just on that note, can you just go over, so February 2024, you will provide guidance for the combined portfolio for 2024, sorry, for 2024 only, and then June you will provide the combined portfolio or mid-year you'll provide provide a five year for the combined portfolio is that correct that's correct okay and then lastly on the dividend you know that what you would set it for for next year

that would be in February as well right 2024 dividend would be calibrated for 2024 and we will be sharing that information with our guidance in

February 2024. Okay, thank you. That's it for my question. Thanks Anita. This concludes the

question and answer session. I would like to turn the conference back over to Tom Parler for closing

remarks. Thanks operator and thank you all for taking the time to muster our call today and please enjoy the rest of your day. Thank you. The conference is now concluded. Thank you for

attending today's presentation. You may now disconnect.