Newmont Corp (NEM) — Q2 2025 Earnings Call Transcript

Thank you, operator. Hello, everyone, and thank you for joining our call. Today, I'm joined by Natascha Viljoen, our President and Chief Operating Officer; Peter Wexler, our Chief Legal Officer; and as recently announced, our Interim Chief Financial Officer, along with the rest of my executive leadership team, and we will 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. As we reported yesterday, on Tuesday this week, two fall of ground incidents occurred at our Red Chris operation in British Columbia, blocking access to the underground work area of our nonproducing project at these sites. At the time of the initial incident, we had three business partner employees working underground, more than 500 meters beyond the affected zone. We asked them to relocate to a designated refuge chamber and confirmed that they have safely arrived in the chamber before the second fall of ground blocked the access way. This second fall of ground also impacted our underground communication system. All appropriate emergency response protocols were immediately activated and operations at Red Chris have been suspended while we're responding to the incident. With the support from emergency responders and teams from nearby mine sites, our focus is on restoring communications to the refuge chamber, safely reestablishing access underground, and bringing our three teammates back to the surface and to their families and friends. We are diligently responding to this incident with excellent support from the broader industry and appreciate your understanding during this very live and evolving situation. Although overshadowed by this incident at Red Chris, Newmont delivered another strong operational performance in the second quarter, keeping us firmly on track to achieve our 2025 guidance. Underscoring this performance are our three key priorities for this year, which remain clear and unchanged. First and most importantly, to strengthen our safety culture; second, to stabilize our 11 managed operations; and third, to execute on capital returns. As I just described, we are concentrating the full force of our organization on the safe recovery of our team members at Red Chris, and we will conduct a thorough and independent investigation into the factors that led to this event. All findings and lessons learned will be leveraged across Newmont to strengthen our Always Safe program and will be shared across the broader mining industry. You can also expect that we will continue to provide regular updates as those efforts progress. Turning to our ongoing work to stabilize our operations, our portfolio of world-class gold and copper assets delivered another solid quarter. We produced 1.5 million ounces of gold and 36,000 tonnes of copper, remaining in line with our full year guidance and the indications we provided on our last call. This strong production supported robust financial results, including $2.4 billion of cash flow from operations after working capital, and an all-time record for quarterly free cash flow of $1.7 billion, of which more than $1.5 billion or 90% was generated by our core managed operations. Our shareholders continue to benefit from our noncore asset divestment program that we successfully completed earlier this year. As we announced last week, we expect to receive approximately $470 million in cash proceeds after taxes and commissions from the sale of our shares in Greatland Gold and Discovery Silver, shares that we received as consideration for the divestments of Telfer and Porcupine, respectively. As a consequence, we now expect to generate $3 billion in after-tax cash proceeds this year from our divestment program. And these proceeds will be used to support our third key priority, returning capital to shareholders. Since our last earnings call, we have retired $372 million of debt and returned over $1 billion to shareholders through both regular dividends and share repurchases. In addition to making meaningful progress on our existing program, our Board has approved an additional $3 billion share repurchase program, doubling our total authorization to $6 billion, of which $2.8 billion has been executed to date. With our strong second quarter results and continued operational and financial momentum, we remain firmly on track to meet our 2025 guidance while also generating industry-leading free cash flow and consistently returning capital to shareholders through a predictable dividend and ongoing share repurchases. With that, I'll now turn it to Natascha for an update on our operations.

Thank you, Tom, and hello, everyone. Before we jump into the details, I'd like to echo Tom's statements about our team members at Red Chris. Above all else, we are focused on bringing them home safely, and we are leveraging the strength and extensive experience of our global technical, operational, and safety teams with the support of our industry partners. Shifting now to our operational performance, this quarter underscores the resilience of our world-class portfolio, which has been thoughtfully assembled around high-quality, long-life assets. With this robust foundation in place, we are exceptionally well positioned to organically deliver multi-decade value through our high-caliber operations, robust pipeline of projects, and deep bench of technical and operational leaders. Our second quarter operational results outperformed our previous expectations, effectively bookending the first half of the year and establishing a solid foundation for consistent delivery in the second half. This compelling performance was largely driven by production from our core managed operations, including higher-than-expected production from Cadia in the first half of the year due to higher grade ore from the current panel cave. In addition, we have been able to noticeably reduce downtime related to planned maintenance. As previously mentioned, we expect production to decrease in the second half of the year as we continue to transition to our new panel cave, PC2-3. Peñasquito exceeded our gold production expectations in the first half of the year due to higher grade ore from the Peñasco pit. However, production is expected to shift from a higher proportion of gold to a higher proportion of silver, lead, and zinc content, primarily in the fourth quarter as we move to lower gold grade areas in the Peñasco pit as part of a planned sequence in this large polymetallic mine. At Lihir, we delivered consistent production in the first half of the year. However, this will begin to decline in the second half of the year as we begin processing lower-grade material as part of our planned mine sequence. What really stands out at Lihir is the steady progress we're making in bringing stability to both the mine and processing plant. For example, we are beginning to see the benefits from improved drainage and water management around our haul roads, along with cleaner access to both pit and stockpiles, creating a safer and more efficient design for this mine. As a result, we've been able to park nine trucks and materially reduce the contractor footprint, generating significant cost savings from these initiatives alone. For the last two years, we have been on a journey of integration, rationalization, and optimization with a view to creating value over a period of decades. With the rationalization phase largely complete, we have been applying the full force of our operating and technical capability to systematically optimize operations across all 11 of our managed operations. As reflected in our results, these stabilization efforts are delivering tangible benefits, positioning us to confidently continue our optimization work. With a deep understanding of each and every asset, we are working on productivity enhancements and improvements to the cost structure across our managed operations, ensuring each site meets the performance metrics required to earn its place in our world-class portfolio. You saw an example of this at the beginning of the year when we paused our investment in the underground expansion activities at Cerro Negro and again, more recently, with the cost improvement measures we are working on at Merian. Building on the strong production performance from our core managed operations in the first half of the year, we remain firmly on track to meet the full year guidance ranges we issued in February. Turning now to our cost performance. We remain on track and are continuing to focus on driving improvements across our portfolio. As mentioned, sharpening our efforts on cost discipline and productivity enhancements is a primary focus for all of us at Newmont. As a result, our cost applicable to sales and our all-in sustaining costs are in line with the guidance expectations set at the beginning of the year. Finally, our capital spend for 2025 is on track to land within the guidance ranges we set at the beginning of the year. Starting with sustaining capital, we anticipate spending to be approximately 57% weighted towards the second half of the year, driven by deliberate decisions to defer expenditures for key activities across several sites, including planned spending at Tanami associated with our expansion of our ventilation system in the second half of the year, purposefully moving some of our ongoing optimization work at Lihir to the third and fourth quarters focusing on asset integrity and reliability and continued surface work at Red Chris and Brucejack during the warmest summer months in Canada. Higher sustaining capital in the second half of the year will also include an expected increase at Cadia to support the ongoing panel cave development as well as addressing the historical underinvestment in tailings remediation and storage capacity while we continue to evaluate more efficient tailing solutions at this world-class operation. Our development capital follows a similar guidance and is now expected to be 51% second half weighted, primarily due to the timing of spend related to the projects currently in execution. At our Ahafo North project, we are progressing as planned and are preparing to pour first gold in the coming months, keeping us firmly on track to declare commercial production in the fourth quarter as previously indicated. In parallel, we successfully completed the 160-meter raise bore at the bottom of the shaft at our second expansion at Tanami and have removed the pentice or an in-shaft barrier, which allows the safe and efficient completion of this critical path work. Finally, at Cadia, development from PC2-3 has continued according to plan while steadily advancing the underground development for PC1-2 and progressing the important tailings remediation and storage capacity works I mentioned previously. I now will turn it back to Tom to go through our financial results for the quarter.

Thanks, Natascha. I'd like to start this update by acknowledging the recent departure of Karyn Ovelmen, our Chief Financial Officer. While the timing was unfortunate, we respect her decision and thank her for her contributions to Newmont over the last two years. We have commenced a comprehensive search for our next CFO. And while we do that work, we continue to have a very strong and experienced finance team in place, led by Peter Wexler on an interim basis. Importantly, there are no changes to our financial policies or capital allocation strategy, and we remain on track to deliver on our 2025 commitments and continue returning capital to shareholders. As I mentioned at the start of the call, Newmont reported strong financial results in the second quarter, driven by robust production, steady unit costs, and a supportive gold price environment. Gold all-in sustaining costs for the quarter were slightly below our guidance for the full year at $1,593 an ounce on a co-product basis. This is largely due to lower sustaining capital spend in the first half of the year, which, as Natascha just described, is expected to increase in the second half by comparison. As a result, all-in sustaining costs are expected to be higher in the third and fourth quarters, but overall in line with the indications we provided in February for the full year. I also want to highlight that going forward, we plan to more prominently present our unit costs under both the co-product and by-product methodologies to better assist our investor base with industry benchmarking and comparisons to our peers. By providing our unit costs under both methods, we aim to offer our investors better insights into the individual contributions of the metals that we produce in addition to gold while also providing a more comprehensive view of Newmont's overall margin performance. To put this into perspective, on a by-product basis, our gold all-in sustaining costs for the second quarter were $1,375 an ounce, which is more than $200 an ounce lower than our unit costs under the co-product method. From our core managed portfolio in the second quarter, our gold all-in sustaining costs were $1,276 an ounce on a by-product basis. For the second quarter, Newmont generated $3 billion in adjusted EBITDA and reported an adjusted net income of $1.43 per share. The most material adjustments to net income for the quarter include $0.63 related to a gain from the sale of Akyem and Porcupine as part of our noncore asset divestment program, $0.14 related to mark-to-market gains on equity investments, primarily from the gain on the sale of shares received as proceeds for the sale of our Telfer operation and interest in the Havieron project to Greatland Gold, and $0.31 in offsetting taxes primarily related to these adjustments. Most notably, Newmont generated $2.4 billion of cash flow from operations and $1.7 billion of free cash flow, well above the first quarter and setting a new record quarterly cash flow performance. Our operating cash flow in the second quarter benefited from $156 million of favorable working capital adjustments, primarily driven by sales timing and higher revenue and pretax income associated with strong metal prices. We are encouraged by the strength of our cash flow performance in the first half, which underscores the quality and potential of the world-class portfolio we have assembled and continue to shape and optimize. With this in mind, we remain committed to our shareholder-focused capital allocation strategy, which remains unchanged and has three priorities: to maintain a strong balance sheet, to steadily fund cash-generative organic projects, and to continue returning capital to shareholders. Starting with our balance sheet, we finished the quarter and the first half of the year with $6.2 billion in cash, well above our target of $3 billion on average. It's worth noting that this cash balance includes $330 million of the approximately $470 million in cash proceeds, net of taxes and commissions from the sale of our equity shares in Greatland Gold and Discovery Silver. We continue to surpass our debt target of up to $8 billion and reached an outstanding principal balance of $7.4 billion as of June 30. We are proactively assessing opportunities to further reduce our outstanding debt, creating a flexible and resilient balance sheet that is able to navigate the commodity cycle. Turning to shareholder returns, we declared a fixed common second quarter dividend of $0.25 per share, consistent with the past seven quarters. Since our last earnings call in late April, we repurchased $750 million of shares, bringing the total shares repurchased in 2025 to $1.5 billion. In total, since February last year, we have executed $2.8 billion in share repurchases. As I mentioned earlier, our Board has approved an additional $3 billion share repurchase program. This brings our total authorization to $6 billion, demonstrating the confidence that we have in our business and our commitment to rewarding our shareholders with predictable dividends and ongoing share repurchases in 2025 and beyond. In closing, we delivered a strong second quarter and first half of the year and remain on track to achieve our 2025 guidance and deliver on our commitments for the benefit of our shareholders. We achieved an all-time record quarterly free cash flow of $1.7 billion in the second quarter, and we continue to advance our disciplined capital allocation strategy, which includes strengthening our balance sheet through ongoing debt reductions and returning capital to shareholders through a predictable dividend and continued share repurchases, for which we have approved an additional $3 billion. Looking ahead, we will lean into the full capability of our teams and portfolio to leverage the momentum from our core managed operations in the first half of the year and continue building a stable and resilient future for Newmont. In turn, we are well positioned to reward our shareholders through growing free cash flow per share and consistent capital returns. However, we recognize that none of this matters until we bring our three Red Chris teammates home safe and sound. And with that, I'll thank you for your time and turn it back over to the operator to open the line for questions.

Very nice quarterly result, and thank you for today's update. Can I ask about your capital allocation priorities as it pertains to acquisitions? Certainly, your valuation has improved, your results have improved, and you're generating significant free cash flow. Is there an appetite for further acquisitions at Newmont? And then further to that, is copper still viewed as a strategic metal for Newmont as it pertains to acquisitions?

Thanks, Lawson, and good afternoon. I'll be as clear as I can. Our focus is internal. And the best use of our capital is to buy back Newmont stock. And that's where you'll see us spend our time and attention. So internal focus, buying back Newmont stock. The question around copper, we have copper-producing assets in Red Chris, Boddington, and Cadia. We have a magnificent organic project pipeline. Next cab off the rank is likely to be the Red Chris block cave, which is a copper-gold mine. So you will see us focus on a balance of copper in our portfolio as a gold mining company, but that copper exposure will come from our organic growth.

The first one, perhaps on management changes and management succession. Obviously, I guess, Karyn's departure was somewhat unexpected. Certainly, there's been some discussion in the market around Natascha's appointment of President, whether that's a precursor to any other management changes. I wonder if you can make any comments on this and whether Karyn's departure impacts any other potential thinking about succession.

I have some comments to share. As I mentioned earlier, it's unfortunate that Karyn resigned, but I have our finance leadership team here, which consists of a skilled and experienced group of individuals. We will continue to operate smoothly. Peter Wexler is stepping in as our interim Chief Financial Officer, and I have no concerns about the strength and capability of our business. We have a great opportunity to consider the next CFO for the exciting future of Newmont, and this is part of the natural evolution in organizations. I feel confident about our current interim team and am actually quite excited about the recruitment process ahead. Additionally, I didn't mention this in my earlier remarks, but I want to congratulate Natascha on her promotion to President and Chief Operating Officer, which we announced in May. Natascha has been with us for nearly two years and has shown strong leadership as well as a deep commitment to safe and efficient operations. Her new role allows her to focus on both strategic and operational aspects and provides her with the opportunity to utilize her energy, passion, and determination as we aim to enhance safety, cost efficiency, and productivity over time. Her promotion is part of our ongoing leadership development, a tradition at Newmont that has been successful for many years. I wouldn't interpret this as anything more than a natural part of how Newmont has historically operated.

Great. That's some great color. And then the second question, just on cash flow outlook. You benefited from some working capital items during this period, I think payables, receivables. Any color on kind of any reversal and how that might impact free cash flow in 2H? And then the second part of the question, could you just remind us on how much of deferred proceeds from the divestments you have remaining and when they will expect to be coming?

Thanks, Daniel. What you'll see with the free cash flow generation in the second half of the year is it going to be pretty steady production coming through. The third quarter is going to look pretty similar to the second quarter. As mentioned, we'll see a step up in our sustaining capital pushing about 50% weighted in the second half. Obviously, that will affect our free cash flow. The other aspect to look at is our reclamation. If you see first quarter to second quarter, that stepped up due to the momentum around the construction of the two big water treatment plants down at Yanacocha. So you'll continue to see an increase in that spend. I think it's around $600 million we want to spend this year on that. So that will step up to a steady-state rate. With the current gold price levels, we'll start seeing some tax payments from those higher prices as well. Regarding the equity positions, we're out of Discovery Silver. So there's nothing left there. We still have some shares in Greatland Gold. Deferred cash payments for Discovery are around $150 million, and they are payable in equal tranches over a 4-year period starting at the end of 2027. In Greatland, we have some deferred contingent payments of about $100 million, and we have about 9.9% left in Greatland Gold.

I want to focus a little bit on Cadia and Peñasquito, which were clearly very strong in the second quarter on high grades. Can you maybe walk through production, why production is expected to decline specifically in the third quarter for these two mines? I know there's a bit of a transition, but I'm just trying to get more color on how to think about grades into the third quarter and just production at these two mines.

Thanks, Fahad. Your line was a little crackly. For those that might not have heard, just looking for some color in terms of the balance between first half and second half for Cadia and Peñasquito. I'll ask Natascha to talk about those operations and how we see that production grade.

Thanks, Tom. Thanks for that question, Fahad. Obviously, both of these operations are key to our portfolio. Starting with Peñasquito, this year, we're seeing the benefits of the work and investment we've done in that open pit and pushbacks made last year. We've moved into Phase 7 of the Peñasco pit, largely moving out of Chile Colorado. Peñasco pit is a variable ore body, particularly with respect to the different metals. It's just the natural progression as we mine and follow our mine sequence through the Peñasco pit to see different grades coming through. So we will see lower grades of gold in the third quarter, and we will see higher grades of silver, lead, and zinc coming through, which is typical. Indications suggest about 2% higher silver and about 1.5% higher zinc while we anticipate a decrease in gold grades. As far as Cadia is concerned, it is one of the newer operations in our portfolio. We have done quite a bit of work to understand this operation and all of the requirements to run it as a quality asset. As we see the first two block caves, PC1 and PC2 come to the end, we do see some model benefits from PC2, where the model has been predicting lower grades as we come to the end. However, we do see the grades still holding strong as we complete the mining of PC2. Slowly, but surely, we are ramping up PC2-3, expecting it to go through lower grades before ramping up to full production again.

Great quarter, and we wish you great success in this rescue operation. I wanted to ask a question about Lihir. It seems to be doing really well. Natascha, you talked about some of the improvements being realized, and that's even before you've spent much CapEx on it. As the spend picks up in the back half, how does that set it up for 2026?

Matthew, a really great question, and it is one of our big operations that we feel quite excited about. For a period of time, we've been talking about how we build stability in that operation. It has offered us the opportunity to reconsider the mine design, including basic elements like road design, specifically around water management on various roads. This has resulted in far higher productivities for us in the mine because we can manage water better off our haul roads. Our fleet can run faster, allowing for the parking of a number of trucks, as I noted earlier. We've built on that by creating a buffer between the mine and the plant with intermediate stockpiles, ensuring stable feed into the plant while providing more consistent grades. Significant progress is being made in asset management, particularly concerning big shutdowns, ensuring effective execution. I must recognize that we still have improvements to make, particularly in terms of asset management and reliability at the plant. We continue building our capability, planning, and execution capacity on site.

Maybe just a couple of builds on Natascha's summary. We're very much focused on setting up Lihir for the long term. The actions we're taking today reflect the aspirations and expectations of a big asset that has been significant in our portfolio, now sitting alongside other major operations. We're making deliberate decisions to enhance this mine's longevity. Our current general manager, Dawid Pretorius, is extremely capable, and our investment there is focused on sustainable development.

Great job on the cost containment for total cash cost year-to-date. I'm wondering if you can provide any more details on some of the trends you're seeing in your underlying cost structure, including inflation rates and if there's anything notable regionally as well?

Yes, thanks, Josh. Largely, what we're seeing play out is consistent with expectations we set in our business plan. Some swings and roundabouts with fuel, energy, materials, and consumables, but not significant. The costs we expected this year are being realized. Labor is stabilizing as well, both contracted services and our own employees. The inflationary impacts we anticipated across various categories remain inline with our assumptions, even in the elevated gold price environment. Taxes and royalties are higher, but we remain focused on productivity improvements and enhancements to our cost structure. We are actively working to ensure all operations meet expectations and industry benchmarks, continuing to identify ways to optimize.

Got it. And as you navigate stabilizing the operations, when we think about 2026 and what we should expect at that point, has there been any thought towards larger project updates that we could expect and whether the outlook will go beyond just a 12-month basis?

A couple of thoughts to answer that question. We're at the halfway mark, focused on ensuring we safely deliver the second half of this year, which is critical after the challenges we faced. Building our business plan for next year is an active process at the moment, and our intention is to provide guidance for 2026 in February next year. We are focused on safe delivery, first gold and commercial production out of Ahafo North, progressing the Tanami expansion, and continuing the development of the two panel caves at Cadia. Our project pipeline, including Red Chris, is being worked on to ensure we complete a feasibility study to a Newmont standard.

How should we read production guidance? I think you beat your own plans by circa 100,000 ounces this quarter. Just trying to clarify, was that unexpected bonus versus the plan? Was it a bringing forward of stuff in the second half to the first half? Or how do you see guidance moving?

Thanks, Daniel. To think about the production, we certainly benefitted from strong performance at both Cadia and Peñasquito. Cadia is moving into lower grades, and we are being sober about the model's predictions for the second half. Peñasquito is performing well, but we are transitioning to lower grades in the third quarter. Nevada Gold Mines will be a critical contributor in the second half, so we want to remain cautious as we guide for that. We're firmly on track to meet our initial production guidance for the full year.

Just a follow-up question, possibly for Natascha. Can you please expand on the Tanami shaft works? Is the risk of overbreak now behind us? Is that concrete lined? Maybe go into a bit more detail? And then just on Ahafo, can you expand on the works remaining to first production and any risks that are front of mind?

Thank you, Daniel. Let me start with the Tanami expansion. The risk of overbreak on the lower part of the shaft is truly behind us. We have completed the raise bore through the concrete lining that we implemented at the beginning of the year. The pentice has been removed, giving us clear access to the entire shaft. We started with the lining at the bottom half to ensure alignment with the top half, providing smooth access below. The equipping of the top half is progressing well, and as we finish the lining in the bottom half, we will complete the equipping. Underground operations are on schedule, and the highest risk elements are behind us. Now the focus is on completing the remaining work under the leadership of our strong project director, General Manager, Leigh Cox. Ahafo North is making good progress, we have started commissioning in certain areas of the plant, and we are stockpiling material in preparation for the plant's commissioning. We're very well on track, with only minor works remaining; generally, we are ready for the first gold pour.

I would like to ask more about Red Chris. Could you confirm if the initial fall of ground occurred in the decline before the workers were directed to a refuge station?

Yes, the decline, about 200 meters down the decline. There was an initial fall of ground detected. So the emergency response protocols kicked in place. We only had those three people in that area. So it's not an operating mine; it's some development being done to prepare for the Red Chris project. When that event occurred, the call went out to make their way to the refuge chamber, which they did. They safely reported to the chamber before a larger fall of ground blocked access and disrupted communication with the refuge chamber. We are focused on reestablishing communication and determining the safest and most effective rescue plan for the three people. Various methodologies are being considered for access to them, with incredible support from the industry in terms of solutions and equipment.

I hope they're safe and well and you get them out quickly. My second question is with respect to some of the changes that you made regarding capital spending. I want to understand why the capital spending was shifted. I think you said it was deliberately, specifically to maintain the integrity of the mine at Lihir. Could you just elaborate on those comments?

Anita, as I mentioned earlier, our asset integrity work at Lihir is crucial. Capital discipline is essential; our plans ensure that when we spend, we do so effectively. We made a deliberate decision to defer some capital to ensure readiness for effective spending. Additionally, work related to our ventilation system at Tanami is establishing the need for enhancements to support productivity and development. This will take place in the second half of the year. Lastly, the summer period work at Brucejack and Red Chris also resulted in some delays in planned spending to the second half.

Again, I just hope that the miners get out safely as well. Just a couple of questions. The first one is just coming back to your portfolio. I think Tom, this is for you. You mentioned Greatland Gold, and you still have some position there. You noted they’re noncore, so those could potentially be divested, along with Orla, which you have an equity investment in. Is that position also considered noncore?

The simplest answer is yes. We think about the Newmont portfolio and how we want to focus our efforts to simplify it as much as possible. Both Greatland and Orla will fit in the noncore category.

I wanted to check where your Lundin Gold position stands as that's also a big position.

We're very comfortable with our 32% interest in Lundin Gold and the Fruta del Norte asset. There’s still much knowledge to gain from a great operator like Ron Hochstein, and we're eager to learn while benefiting from this partnership.

Lastly, I want to ask about Wafi-Golpu. Have you had a chance to evaluate that? Does it fit at all?

Wafi-Golpu is an important project in our organic pipeline. We are actively working towards converting a memorandum of understanding with the PNG government into a mineral development contract, which would allow us to secure a special mining lease. We're working closely with the Harmony team on this and see it as a crucial aspect of our project pipeline.

As we look at our core portfolio, we see various opportunities for productivity improvement across our assets. While it's difficult to pinpoint one asset, both Lihir and Cerro Negro present unique opportunities. At Lihir, we have the potential for major step changes in stability and performance through operational enhancements. On the other hand, Cerro Negro's challenges are more focused on lifting productivity, so we're committed to working closely with our teams to optimize performance there.

Congrats on the quarter and the first half. A couple of operational questions; firstly, on Nevada, the production improvements in the second quarter looking promising, but the costs there are remaining high. How much of that is due to the ongoing production improvement works in fleet replacement versus just underlying cost pressures? How confident are you in the full-year cost guidance?

For Nevada, I think that question is best placed for the operator. Natascha, Francois, and I will be visiting Nevada next week, and we’ll discuss second-quarter performance with the team to unpack those queries. So if that's alright, Hugo, this is better suited for when the operator reports later.

Fair enough, Tom. On Boddington, it looks like the mill ran above nameplate capacity in the quarter for the first time in about four years. Can you talk to the productivity improvements and sustainability of that level?

Yes, this is indeed the case. Since we installed an autonomous haul fleet at Boddington during COVID, ongoing learning and adaptation have allowed us to achieve significant improvements in productivity, approximately 10%. The mine is still in a pushback campaign, benefiting from total materials movement that has increased dramatically year-on-year without increasing fleet numbers. Scrumpling and efficient asset management on both mining and plant sides are also key components of sustaining performance at nameplate capacity.

Thank you, operator, and thank you, everyone, for taking the time to join our call today, and I appreciate your full range of questions. Please enjoy the rest of your day or your evenings. Thanks, everyone.