Newmont Corp (NEM) — Q3 2024 Earnings Call Transcript

Thank you, operator. Good morning, everyone, and thank you for joining our call. Today, I'm joined by my executive leadership team, including Natascha Viljoen and Karyn Ovelmen, and we'll all be available to answer your questions at the end of the call. Please note our cautionary statement and refer to our SEC filings, which can be found on our website. Before we discuss our third quarter performance, I would like to take a moment to remember Antoine Fortin, who tragically lost his life at our Illinois operation late last month. We recognize that this is our fifth fatality in less than a year, and we are working diligently to strengthen and improve our safety systems along with the key safety tools that we use in the field. We are fully committed to understanding the factors that contributed to this tragedy and are taking decisive action to improve our safety culture. We have a clear focus on effectively controlling all the risks that could lead to a fatality. We will also continue to transparently share the lessons we learn from the investigation with our peers in the industry to help improve the safety performance of our sector. At Newmont, we know that a strong safety culture is fundamental to sustainably delivering on our commitments, and it is our accountability to ensure that everyone working at Newmont returns home safely after each and every shift. Turning now to a summary of our third quarter. I'm honored to have recently been appointed as the next Chair of the International Council of Mining and Metals or ICMM. We look forward to playing an even greater role in advancing sustainability and responsible mining practices both at Newmont and across our industry. During my term as Chair, one of my key priorities will be building support for the consolidated mining standard initiatives, an effort we have strongly supported and actively engaged in over the last few months. These consolidated standards will be essential for strengthening the industry's reputation and providing stakeholders with confidence that the commodities we produce are mined responsibly. Last week, we announced that we have partnered with MKS PAMP to launch our first mined-to-market traceable gold bar for sale in the United States, making Newmont's gold directly accessible to consumers and demonstrating our commitment through transparent sourcing. Shifting to our world-class portfolio of Tier 1 and emerging Tier 1 operations and districts. In the third quarter, we produced nearly 1.7 million ounces of gold and 430,000 gold equivalent ounces from copper, silver, lead, and zinc. Notably, this included 37,000 tons of copper. We generated $1.6 billion of cash flow from operations and $760 million in free cash flow. Our non-core divestment program has advanced meaningfully since our last earnings call with the two recently announced transactions expected to deliver up to $1.5 billion in combined gross proceeds. The first announcement was a definitive agreement to divest the Telfer mine and our 70% interest in the Havieron project in Western Australia, with total proceeds of up to $475 million. We continue to progress the closing conditions and expect to complete the transaction this quarter. The second announcement was a definitive agreement to sell the Akyem mine in Ghana for up to $1 billion in cash consideration. We also expect to close this transaction towards the end of the year. With this solid progress, we remain firmly on track to realize our commitment to generate at least $2 billion in gross proceeds from the divestment of our non-core assets. It is also important to note that this is in addition to the $527 million in cash proceeds that we have already received this year for the Lundin Gold and Batu Hijau transactions. Our divestment progress and strong free cash flow generation have positioned us to continue reducing debt and returning capital to shareholders. Since our last earnings call, we have retired $233 million in debt and returned $786 million to our shareholders through share repurchases and quarterly dividends. We also approved an additional $2 billion share repurchase program, bringing our total authorization to $3 billion. In addition, we continue to safely advance the three projects we have in execution: the second expansion at Tanami, our new mine at Ahafo North, and the Panel Ks at Cadia. Finally, turning to synergies. When we announced our decision to acquire Newcrest, we committed to delivering $5 million in synergies from three areas: G&A, supply chain, and our full potential program. As of today, we have achieved a $500 million synergy run rate. Starting with G&A, a $100 million synergy run rate was achieved through labor rationalization and reductions in both insurance costs and contractor spend. Moving to supply chain, our team has been leveraging the scale of our combined company to achieve improved commercial outcomes that have already brought our synergy run rate from this area to $200 million. Finally, we have begun to realize significant value from our full potential program and are in the delivery stage of our initiatives at Cadia, Red Chris, and Lihir. From this work, we have successfully surpassed a $200 million synergy run rate with potential upside to be realized in future years. The majority of the value realized so far has been attributed to Cadia due to the work we have been doing to more efficiently move stockpile material and optimize the output from our high-pressure grinding roll system in the mill, an initiative that I touched on last quarter. The remaining value has come from Red Chris and Lihir. At Red Chris, we are improving gold and copper recoveries from the optimization of both the grinding and flotation circuits while also increasing throughput by delivering a more consistent ore feed to the mill. At Lihir, we are focused on improving efficiency by debottlenecking the materials handling and crushing circuits, as we mentioned on our first quarter earnings call. With our synergy commitment now met and our divestment program advancing, we are now focused on the sustainable value that we will deliver from our go-forward portfolio of 11 managed large, long-life operations. With that, I'll now turn it over to Natascha for an operational update and then to Karyn to take us through our financial performance for the quarter.

Thank you, Tom. As we enter the final quarter of 2024, I'd like to start by re-emphasizing the operational priorities I highlighted at the beginning of the year. Our focus remains on three key objectives. First is making sure that every person walking through a Newmont site is fully equipped and authorized to do their work safely. Second, is continuing to deliver strong performance from our managed assets while also guiding our non-core assets through a respectful and productive process for divestment. And last is enhancing long-term productivity at every one of our 11 managed Tier 1 and emerging Tier 1 operations. Turning to the next slide lets begin with an operational overview. In the third quarter, our managed portfolio delivered a meaningful step-up in production as planned, producing 4% more gold than the second quarter and building momentum for a strong finish to the year with an anticipated 1.8 million ounces of gold in the fourth quarter or an approximately 8% increase over the third quarter. This performance has been largely driven by our six managed Tier 1 operations. I will start with Tanami. We began accessing higher grades from the Liberator ore body and remain on track to deliver this year's strongest grades in the fourth quarter. At Boddington, we continue stripping in the north and south bits, as planned, which is expected to continue through 2025 and will bring forward strong gold and copper grades starting in 2026. Moving to Penasquito, we delivered steady gold, silver, lead, and zinc production in the third quarter from the Chile, Colorado pit and commenced mining ore in the higher gold-grade Penasquito well ahead of plan due to efficient stripping. This will result in an increase in gold production in the fourth quarter and into 2025. Importantly, we have signed a new collective bargaining agreement with the union at Penasquito, which safeguards the rights of all workers and provides a solid foundation for operations at Penasquito through 2026. Turning now to Cadia. As factored in our guidance, grades at Cadia are expected to continue declining in the fourth quarter, as we transition to and ramp up Panel Cave 2-3. We are progressing integrated studies to align cave development with life of mine tailings capacity, setting up Cadia for the next three decades of ore feed. Our focus for tailings is maximizing capacity in the current in-pit storage facility, repairing the southern wall of the northern facility that slumped in 2018, and raising the wall of the southern facility. These efforts are expected to contribute to a period of increased sustaining capital spend at Cadia over the next few years, as we make the necessary but disciplined investment to remedy and expand the current tailing facilities. At Lihir, we continue to progress the planned shutdown of the primary autoclave, which remains on track to deliver an approximate 50% step-up in gold production in the fourth quarter of 2024 compared to the third quarter. As we look ahead to 2025, our operational focus at Lihir will remain on reducing complexity to deliver more sustainable and predictable results at this Tier 1 operation. In the short term, these efforts will result in lower than initially anticipated production next year, due to lower throughput to allow for asset reliability improvement work and changes to the mine sequencing, including the establishment of wider ramps to manage surface water and repositioning all roads to be more effective and efficient. While we complete this work, we will be processing a higher proportion of lower grade stockpiles in 2025, and we anticipate that gold production next year from Lihir will be largely consistent with this year's and around 250,000 ounces lower than our initial guidance for 2025 that we provided back in February. Importantly, this work will simplify and improve operations at Lihir for the long term, establishing it as a more consistent contributor as one of the 11 managed operations in our go-forward portfolio. Similarly, at Brucejack, we have taken a step back this year to do the development and drilling work to ensure that we improve our knowledge of this nuggety ore body. We continue to experience periods of exceptionally high grades including a one-day average of 52 grams per tonne last month, and an average of over 20 grams per ton in the same week. As a result of the work we are doing, we anticipate that the gold production next year from Brucejack will also be largely consistent with this year, or around 100,000 ounces lower than our initial guidance for 2025 that we provided back in February. Moving to Ahafo South, in the third quarter, we achieved a significant increase in gold production of nearly 15% over the second quarter, driven by higher mill throughput following the successful girth gear replacement in April and strong grades from our Subika open pit and underground mines. Looking ahead, we expect our Ahafo South to maintain consistent production levels in the fourth quarter and into next year, before declining in the second half of 2025 when we complete mining activities at the Subika open pit as planned. Finally, during the fourth quarter, we expect to commence mining activities at our Ahafo North and will stockpile ore to be used to commission the mole next year. This will be an essential milestone for our African business unit as Akyem is divested and production is replaced with new low-cost ounces from Ahafo North towards the end of 2025. Continuing with Ahafo North, we have made notable shift from land clearing and earthworks to constructing the infrastructure for this new mine. The carbon in leach tanks are complete and we continue constructing the crushing, conveying and more infrastructure, which you can see in the photo in our presentation. We've recently completed the lining of the timing storage facility and are establishing the ore roads to begin stripping at this new mine in the fourth quarter. At the second expansion at Tanami, our focus remains on the concrete lining of the shaft, and we have completed more than a kilometer of this 1.5 kilometer deep production shaft. As you can see in the photo, the winder building is now largely complete and we are preparing to install the wasting machinery, which will be used to raise and lower our people, equipment, and ore within the mine shaft once complete. Our Cadia Panel Caves project is progressing well. At Panel Caves 2-3 we have achieved cave establishment, meaning that the intended fracturing has begun and gravity is now playing an important role in the mining process. This is a significant milestone for this multi-year project and we are successfully processing gold and copper ore from this cave. Over the next decade, Panel Cave 2-3 is expected to deliver a million ounces of gold and more than 400,000 tons of copper and is anticipated to ramp up to an average of 400,000 gold equivalent ounces between 2027 and 2032. At Panel Cave 1-2, we continue to advance underground development and the construction of the materials handling system. As a much larger cave, Panel Cave 1-2 is expected to deliver nearly 4 million ounces of gold and more than 700,000 tons of copper over its 15 year cave life. It is anticipated to ramp up to an average of 525,000 gold equivalent ounces between 2030 and 2040. With that, I'll turn it over to Karyn.

Thank you, Natascha. Turning to the next slide, I'll begin with an overview of our financial performance for the quarter. Building upon Tom and Natascha's remarks, Newmont delivered strong third quarter results. We've reported adjusted EBITDA of $2 billion, driven by sustained gold prices and strong quarterly production. We recorded adjusted net income of $0.81 per diluted share, an increase of $0.09 compared to the second quarter. We also generated $1.6 billion cash flow from operations and $760 million of free cash flow, which does not include the approximately $300 million in cash payments received during the third quarter from the sale of the Lundin Gold financing facilities and Batu Hijau contingent payments announced earlier this year. Free cash flow for the quarter includes $209 million of unfavorable working capital changes, largely due to a build in stockpiles of $202 million mainly at Lihir and Telfer and $107 million of reclamation spend primarily related to the construction of the Yanacocha water treatment facilities. With $273 million in reclamation spent to date, we anticipate an approximate $225 million to be spent next quarter. These unfavorable working capital changes were partially offset by the favorable timing of accrued liability payments. Looking ahead, we expect to reach the year's strongest production volumes in the fourth quarter, positioning us to deliver strong free cash flows and to continue returning capital to shareholders. As Tom mentioned, the divestitures announced to date from our non-core portfolio are expected to generate up to $1.5 billion in gross proceeds on top of the nearly $530 million in cash proceeds received from other investment sales in 2024. As we committed to earlier this year, we have been using the proceeds to create long-term value for our shareholders by strengthening our balance sheet and repurchasing shares. Since our last earnings call, we repurchased 9.4 million shares at an average price of $53.16 per share for a total cost of $500 million including $198 million repurchased during the third quarter and $302 million in October. And with $250 million remaining in the current program, Newmont's Board authorized an additional $2 billion share repurchase program to be executed over the next 24 months, bringing our total authorization to $3 billion. To date, we've now completed $750 million of our $3 billion authorization. Additionally, we declared a fixed common third quarter dividend of $0.25 per share, consistent with the dividend declared for the past three quarters. We purchased $233 million in nominal debt for $210 million for around $0.90 on the dollar, of which $150 million was purchased during the third quarter and $83 million was purchased in October. To date, we've now retired nearly $500 million for the year. We maintained an investment-grade balance sheet and ended the quarter with $7.1 billion in total liquidity. Our gross debt now stands at $8.5 billion compared to our target of $8 billion. In line with our balanced capital allocation strategy, we continue to focus on maintaining a strong balance sheet, steadily funding value-accretive capital projects, and returning capital to shareholders. Looking ahead, we expect approximately 1.8 million ounces of gold production in the fourth quarter as planned. Production from our managed Tier 1 assets continues to drive our strong operational performance, and we remain on track to meet our full-year production guidance. As signaled by our joint venture partner, production from Nevada Gold Mines and Pueblo Viejo is expected to significantly increase in the fourth quarter, which is crucial as these sites comprise just over 20% of our attributable gold production for 2024. All-in sustaining costs for the fourth quarter are expected to be approximately $14.75 an ounce, which represents an 8% reduction compared to the third quarter. This favorable decline is expected to be driven by higher gold production volumes and will be slightly offset by higher sustaining capital reinvestment, primarily anticipated at Nevada Gold Mines based on the run rate through the third quarter, and at Cadia to remedy and expand the current tailings facilities as Natascha described. Increased production taxes and royalties from a higher gold price environment and slightly higher G&A spend, largely due to an increase in contracted labor. Turning to development capital, we expect to spend $320 million during the fourth quarter, keeping us on track to meet our full-year guidance estimates for earlier this year. We continue to expect to invest an average of $1.3 billion per year into projects that will generate the highest returns. With that, I'll pass it back to Tom for closing remarks.

Thanks, Karyn. We remain confident in the long-term strength of the go-forward portfolio we have assembled and continue to make solid progress on the four key commitments we made at the start of the year to our shareholders. Since our last earnings call, we continue to diligently implement the lessons learned from our recent fatalities and are working to strengthen and improve our safety and risk management systems. We delivered high production as planned keeping us firmly on track to meet our full-year production guidance. We generated $1.6 billion of cash flow from operations and $760 million in free cash flow. We've made meaningful progress on our portfolio rationalization with the announced divestments of Telfer, Havieron, and Akyem. We achieved our synergy run rate target of $500 million. We've demonstrated our commitment to shareholder returns delivering $786 million from both regular dividends and share repurchases. We strengthened our balance sheet with $233 million of debt reductions, and we approved an additional $2 billion share repurchase program bringing our total authorization to $3 billion. Having now gained almost a year of experience working with our new operations, we have developed a much deeper understanding of their long-term contribution to our core portfolio and the work needed to create consistent and lasting value for our shareholders. Looking ahead to 2025, we expect gold production from our go-forward Tier 1 portfolio to remain largely consistent with this year, driven by the lower than previously expected production from two of our new operations in Lihir and Brucejack. We expect unit cost from our core portfolio in 2025 to align with the trends we are observing this year. We also remain committed to the critical tailings work in Cadia, which may result in an annual sustaining capital spend of around $1.8 billion from our core portfolio over the next few years. We continue to see higher previously expected direct costs and G&A spend that with the clarity of our go-forward portfolio, we are now working to manage. With this context, my leadership team and I have a laser focus on the work we need to do to optimize our go-forward portfolio of 11 managed operations and three projects in execution. While we do anticipate production growth over time, our focus is firmly on expanding margins, generating a strong return on capital invested and creating value versus chasing volume. We are taking a critical look at our organic project pipeline and spending time to ensure that any reinvestment we make into our portfolio is both disciplined and deliberate. We are applying an economic lens to the long-term decisions we are making today, ensuring that we deliver on Newmont's purpose to create value and improve lives through sustainable responsible mining for decades to come. With that, I'll thank you for your time today and turn it back over to the operator to open the line for questions.

Hello. Can you hear me okay?

Yes. Loud and clear. Thanks, Dan. Tom here.

Great. Thanks. Yes, sort of two parts to the question. But I mean the first one is perhaps a kind of reflection on the industry as well. But, when I look back to February and you look at your cost profile in medium-term, like many in the gold industry, you've got costs coming down over time over the next few years. Yet this year, yes, all-in sustaining cost $100 higher than you saw in February. Is it realistic and credible to actually assume that unit costs will moderate over time, or should we rather be assuming the best case outcome is limiting inflation?

Thanks, Dan. I'll kick that off, and Karyn might want to jump in as well. Certainly, if I think about the gold industry, there's always been a strong correlation between gold price and the cost of producing an ounce of gold, given that inflation is one of those key structural elements behind the gold price. As you look forward, if gold price eases, then you'd expect the cost of producing an ounce to ease. Obviously, you see some tracking between the cost per ounce and the gold price. Our focus is on what we're putting in place is that we have 11 managed operations going forward, where we're going to be in a position to look over the long-term and strengthen and grow those margins. The other comment I'd like to make before I pass to Karyn, if you wanted to build on that, is when you look at the out-year numbers that we had provided back in February that assumed zero escalation. And so, when you think about any forward-looking numbers, there's no escalation. Obviously, what we're seeing as we get closer to 2025, the run rates we're seeing as we close out this year are largely going to flow into next year. Karyn, anything you'd add to that?

No, I think that's right, Tom. It's just to emphasize those out years, as you mentioned, don't have an escalation in those. Generally speaking, as we indicated, the costs that we're seeing here in 2024, we do expect those to trend into 2025. Costs were higher, driven by higher direct costs primarily, if you think about contracted labor, which is 50% of our cost structure. We've seen those increase into the third quarter and through the year. And so we expect that that's been built in now into our cost estimates as we head into 2025.

Thanks, Karyn. David, did you say you have a second part to your question?

Yes. I had a second part, if that's okay. Again, just thinking about your guidance comments for 2025. You previously looked in February around 6 million ounces from the core portfolio in terms of gold. You highlight in the comments 250,000 ounces lower than your previous plans at Lihir and 100 at Brucejack. Is it fair to then assume 350,000 off the 6 million is the new base when we look into 2025?

Yes. Thanks, Dan. Certainly, there are two movers in terms of our managed portfolio. As I think Natascha said in her remarks followed up with the drivers behind that might take considerably Lihir and getting in front of understanding the resource definition of Brucejack and the development work and the drilling you need to do for that all. Both of those are progressing well, but the ounces for next year reflect that important work. I think the numbers, if you then look at the rest of the portfolio and those trends coming through from 2024 flowing into 2025, the numbers are more like 5.6 million ounces as you think about this portfolio for 2025, the core portfolio for 2025. Obviously, we've got some divestments to close out, and still got some more work to do on that front. Some of that will flow into 2025 as we complete that divestment work with our core portfolio. 5.6 million is about their gold production number for next year.

Okay. Yes, it's sort of broadly flat production and costs into next year is the message. Okay. Thank you.

Thanks, Dan. That's correct.

Hi. Thanks very much. I'm trying to wrap my head around the significant change in cost expectations and some degree production expectations going forward versus what we had been hearing about previously. I guess there's sort of two different aspects at least that I can understand. One is, despite the synergy targets being achieved, it sounds like there are some larger integration issues given the challenges or higher costs mentioned across Brucejack, Lihir, and Cadia. And then, on the other hand, we're hearing significant and unexpected inflation expectation changes, which I guess would be a larger industry-related item. I just want to sort of clarify, how should we be thinking about these things? And am I sort of assessing this appropriately? Thank you.

Thanks, Justin. Let me kick off, and I think Karyn you might want to jump in. I think picking up in a few parts. I think the commentary around Lihir, Cadia, Cerro Negro, I think you mentioned is really the Q3 cost story. It's around Lihir, we had some costs that we had assumed would be in the fourth quarter for the launch, autoclave shutdown specialist labor in the remote part of the world moving into Q3. So that's one of the drivers there. Cadia was power, where high power costs coming off our contract for price taker. Cerro Negro was more around the ramping up following the tragedy earlier this year and making sure we're focused on doing that work safely, some productivity impacts. And then the other factor in the third quarter was we had some concentrate sales out of Penasquito where it didn't get away at the end of Q3 due to some weather impacts that obviously flowed into the fourth quarter. So, that's sort of a bit of a wrap-up of the third quarter cost story. When I look at '24 flying into '25, there are two impacts: the volume impact we just talked about with Dan and the Lihir and Brucejack work next year linked to that; and then the cost impact is sustaining capital and particularly around the work we're putting into the facilities at Cadia. Cadia has a 30-plus year life, several panel caves will come on and there's work we need to do to ensure that that targeted capacity is matched to the volumes coming out of those panel caves. That story is around volume for those couple of key drivers and then sustaining capital. Karyn or Natascha anything you'd be willing to add to that?

Sure. Just to add a little more granularity in terms of 2024. About a third of that is increased due to that lower sales volume including in Telfer, and here in Brucejack. Another third relates to that higher sustaining capital that we've been talking about largely driven by Nevada. The remaining third half that is about royalties due to higher gold price and half associated with the G&A. So our run rate synergies are driven by the targeted benefits at Cadia, Red Chris, and Lihir. However, we've also had performance challenges within the business including the Telfer tailings as well as the non-management of underperformed expectations. I think further to that supply chain and G&A benefits have been impacted by our need to invest in the future of this combined Tier 1 portfolio with a key focus on areas with the integration from Newcrest and Newmont as needed. But we're not happy with where we're at and we're working to reduce these costs.

Thanks, Ken. And if I can add, sir, to the follow-up question. Just sort of understanding if there's a quantum that can be provided in terms of maybe what the inflation trend is, the company is seeing, something that we can think about for modeling forecasts on operating costs or capital costs? Is there sort of any initial impressions you have on what inflation rates are running at currently?

Yes. Josh, we're seeing in terms of input costs around renewables, fuel, materials, that's largely in line with what the world is seeing. There's nothing particularly surprising for us there. It's the labor cost where we're seeing that escalation, particularly the contracted labor. We were seeing some of those escalations come through and then incorporating that in our commentary or the steer we're giving for what flows into next year.

Hi. I'm wondering if you can elaborate a little more on what this outlook for 2025 means going forward in terms of those initial graphical kind of indications you put out had production growing over 6,000,000 ounces; costs falling to, call it, the mid 1200s an ounce. I mean, should we be thinking about 2025 continuing, in 2026 and beyond? Is this a 5.5 million ounce a year, 1500 AISC type company that we're going to see going forward?

Good morning, Matt. When I look at costs, there was no increase in the outlook provided in February. Assuming inflation impacts and its relation to gold prices, this will significantly affect the cost of producing gold at Newmont and other mining companies. If gold prices decrease, we expect costs to decline as well. As we complete our divestments early next year, we will focus on our 11 managed operations and three ongoing projects. These projects should yield new ounces towards the end of next year, contributing further in 2026 and 2027. We will have new lower-cost ounces coming on board, supporting a long-term operation rate of about 6 million ounces and around 150,000 tons of copper. Our aim isn't to pursue volume at any cost but to enhance margins and secure the best returns on our investments. Additionally, our all-in sustaining costs are influenced by our investment in tailings facilities, ensuring they meet the needs of our long-term operations. This spending varies over time, with certain periods requiring more investment as we maintain our tailings facilities. This will also play a role in our outlook for 2025 and 2026.

If I can probably...

Go ahead. Sorry.

I wanted to build a little bit on Tom's point on the 6 million run rate. And just as a reminder, Boddington is in two years of high stripping and lower than normal ounces. So, Boddington will keep getting back to its normal production. But in Telfer, we'll start to see coming back in the New Year. Cadia we have been predicting all along that we will see lower grades coming through, but as PC 2-3 comes in during the next two years, we'll see Cadia production step up as well. And then Lihir is also two years of high investment and we'll start to get back into higher grade ores in the near-term. That's to just build a little bit of granularity on Tom's point.

Particularly, we get more ounces out of the shaft, Tanami as it gets commissioned into '27, '28. We got half our north to start to produce gold in the second half of next year. So we've got that reinvestment back in the business that brings ounces on that complement the numbers we're talking about for this year and next year.

Okay. Is there a timeline where you're thinking you'll be able to provide more formal asset-by-asset, multiyear guidance? Is that the plan maybe early next year?

It will be in due course, Matt, into next year. We'll certainly be focusing on giving greater granularity on the 2025 numbers in February. We're busy still, and we're still in this near the end of the second phase of the divestment of our North American assets and that work's progressing well, but we need to close out that work. As we've got that clear line of sight to completing that divestment program, focusing on our 11 managed operations going forward and those three projects in execution. With that clarity, we'll look to come back with some more color on this go-forward portfolio into next year.

Yes. One of the questions that I guess are now part of the questions I had were all very detail-oriented but don't seem that relevant anymore. Could I just ask you in terms of I guess longer-term Cadia the dust emissions, like, when do you expect to get approvals for that? That's what gets you to 35 million tons per annum right?

Sorry, Anita. I'm not sure, if I could just put a little clarity, dust emissions. I just want to make sure that I understand your question.

Sorry. On Cadia, the original goal or target was to get to, I think, 35 million tons per annum. Is that still valid? And what kind of approvals do you need? And when do you expect those?

Yes. Okay. Thank you. I just wanted to make sure that because the dust is not necessarily directly related to the tiling stamp approvals. There's a couple of things that need to happen around the tiling stamp that is all underway. The first thing as I've mentioned is the repay of the southern wall of the northern dam. And then, there's further expansions that are underway. There's a number of permit applications that are in place and underway. We are balancing the permitting requirements, the expansion of the timings dam, and Cadia Panel Cave development to make sure that we've got optimal capital efficiency.

Cerro Negro originally aimed for a production of around 3.5 million tons per year, but it seems you are significantly below that target and have been for some time. When do you anticipate reaching the original production target, or is that goal still relevant?

Cerro Negro, our largest focus area for Cerro Negro is in productivity and making sure that the baseline operation gets back to where we need it to be from a productivity point of view. We've got all of the mining areas available. We have all of the equipment available. The focus is 100% on productivity to bring us back to where we need to be.

Hi, guys. Congrats on getting the synergy target achieved. Of the $500 million how much of that flowed through OpEx?

Good morning, Mike. Obviously, the G&A component of that is part of your OpEx. The supply chain is a combination between improving costs and opportunity to get to productivity and volume. A lot of the full potential work is around volume. So you get more productivity with the current gold price, you get that benefit flowing through. Probably of the amount of that delivery, it's probably less than half has come from that operational exit of cost improvements, as opposed to the productivity and volume improvements and the free cash flow that you get coming through. If I look through that, if I look at where we sit, it's one of the earlier questions as we're closing out the integration, an important part of closing out the integration is completing our divestments and having a clear line of sight to 11 managed operations through projects and execution. I'm not happy with the G&A that we have for that go-forward business and that's an area that we're going to be focusing on to get that number down to match the go-forward business. That's a little bit of that high cost to carry as you look through that transition, but as we get that clarity on the remaining divestments going out the door, we need to ensure that our G&A is matching the size of the go-forward business and we expect to see some be working hard to get some improvement in that area in the months ahead.

Okay. Just a follow-up on that. Because you've achieved that, is that fully reflected in your third quarter numbers? Just wondering, if you look at your quarter-over-quarter OpEx, you're up about 7% quarter-over-quarter, trying to understand how where the savings come in with the fourth quarter guidance if all the synergies have already been realized, or is it a bit of a deferral in terms of when they start to flow through the financials?

Yes. You can see that the factors affecting our cost base are present in our direct costs. The main driver for improvement in the fourth quarter will be strong gold production, and we are well positioned to meet our commitments during that time. The anticipated increase in production will contribute to improved sales, allowing us to match production levels and ensure that unit costs align with our guidance for the fourth quarter.

Thank you, operator. Good morning, Tom and team, and thank you for the update. I just wanted to ask about capital allocation and in the context of a new story that the Prime Minister of PNG, recently called on all stakeholders involved Wafi, to finalize the special mining lease and the mine development contract sort of ASAP. I think he actually set a deadline of like December of this year. And so, that got me thinking, in terms of capital allocation, is that a sign that Wafi might be taking precedent as a preferred project in the portfolio over some of the other options?

Good morning, Lawson. We continue to work very closely with our Joint Venture Partners, Harmony and the PNG government on those negotiations, to convert what is a very robust and competitive framework, MOU, through the mineral development contract, not only a special mining lease, that would then move into a process of starting to understand updates to feasibility studies and a whole bunch of study work that would come once you've reached that conclusion of those negotiations. So important work and working very constructively with all of the parties around the table. Any project in our pipeline is competing for capital, and we're going to be very disciplined in terms of any project that we take into execution, going to have confidence in terms of the cost to build it, the time to deliver it, and the returns from that invested capital. Our plate is full with three projects in execution, our Tanami expansion two at Ahafo North, and the Panel Caves at Cadia. We're going to ensure that we properly deliver on our commitments on those projects, and then and only then we bring on our next project. Wafi-Golpu sits there in the pipeline with five other very interesting projects to compete for capital.

Okay. Thanks very much for that context. And then, just as a follow-up on some of the earlier questions on the labor inflation that drove the cost a little higher in the quarter. I believe yourselves and some of your peers budgeted approximately 4% labor inflation for 2024. I mean, it would be helpful to kind of put some numbers around that in terms of what's the realized experience in terms of labor inflation so far this year? Are you expecting that versus that 4% that seems to be the industry standard at the start of the year?

Yes. Thanks, Lawson. In our direct costs, half the cost is labor. About half of that is our employee base and that's the 4%. When you think about the people who work for Newmont across nine countries, when you average, aggregate the wage escalation, it's about 4%. The other cost base is the cost to all the contracted services we use, whether that be maintenance shutdowns, maintenance that you use to supplement your workforce, cost of running camps, cost of flying people to and from plants, all of those sorts of costs. That's where we're seeing some escalation beyond what we assumed at the start of the year. As we look into 2025, then that's what we're guiding to today in terms of how we're seeing those costs flow through. Obviously, those costs have escalated over the course of this year and looking to capture that level of escalation that we see flowing through to next year in terms of that broader unit cost for Newmont in 2025.

Yes, thanks. I just wanted to clarify some of the guidance commentary from earlier. So on next year, production from Tier 1 is going to be flattish. What assumption is embedded in that Nevada gold mine? Thank you.

Yes. Thanks, Alex. To answer that question, we provided granularity on Lihir and Brucejack in terms of pretty significant movers in our managed portfolio. The rest of the operations in our core portfolio going forward, we're assuming that the run rates you're seeing through the course of this year will flow through 2025.

Just to clarify, Nevada gold mines flat next year?

Alex, I'm answering that question in terms of the rest of our portfolio without getting specific.

Okay. And then, on the following up on Matt's question on the mid-term outlook, it sounds like 6.7 million ounces in 2028 is under review, let's say. But did I hear you say, Tom, that 6 million ounces is kind of a mid-term target or did I mishear that? Thanks.

Thanks, Alex. When I look at our 11 managed operations and the three projects we've got in execution that will deliver ounces over the next three to five years into that portfolio of operations. It remains 11 managed operations because they're all essentially brownfield expansions and long life. I mean, each of those orebodies underneath those 11 managed operations has got several decades out in front of them. I look at that portfolio and say it can produce over the long-term at an average around 6 million ounces of gold, about 150,000 tons of copper. Might have some years we pushed north of six and there'll be other years where you're south of six, but over the long term, that's how we think about this portfolio we've assembled. Eleven plus three, six, 150,000. Our growth is in margins, Alex, where we focus our time. Thanks, Alex.

Great. Good morning, everyone. Thank you so much for taking my questions. Just wanted to come back to the cost, so just so that we understand what is Newmont related and what is industry related. Just want to make sure, Tom and Natascha, understand that what's Newmont related in these costs has to do with your particular operations on volumes, which you've given us on lower volumes at Lihir and Brucejack. And then, you've given us the additional sustaining capital that you have at Cadia on your tailings and Nevada Gold Mines, some other stuff there. You mentioned G&A as well on your all-in sustaining. Is it fair to assume that the only industry-related cost is your labor which pertains to the contractors, which is half your labor cost and 50% is your contractors? If that's the case, Tom, I remember you mentioning that in contractor inflation was 12% or 14%, if I can remember correctly. Can you just maybe share with us where you are seeing this contractor inflation? Is it related in Australia? Is it in the U.S.? I'm just trying to understand, that's my first question. Just I'm trying to understand, if I understand this correctly.

Thanks, Tanya. Good morning. Just clarifying, you're talking about '25 versus '24, as you're looking at your numbers?

Yes.

Yes. I think certainly the '24 to '25 story is the volume story and the sustaining capital story. Largely what you're seeing is the cost we're seeing this year for labor, whether it be employees or contractor labor, staying about the same going into next year. The driver is lower volume, and the sustaining capital '24 to '25.

But this labor, that's contractors, am I correct to say that 12% to 14% inflation in your contractors? Has that not changed? I'm just trying to understand if that's still the case.

Yes. I think about answering at this point, Tanya, in terms of what's in our cost run rate as we close out '24, it's flowing into '25. We're not seeing a step-up of the percentages you're talking about. The rates of our costs as we close out the year, we're seeing that slowing to '25.

Hi again. Just a final detail question. What was the total volume of production for the quarter? If you could just help on that?

Yes. I'm happy to answer that. We produced nearly 1.7 million ounces of gold and 430,000 ounces of gold equivalent from copper, silver, lead and zinc this quarter.

Thank you, operator, and thank you everyone for joining us this morning and have a good rest of your day. Thank you.