Newmont Corp (NEM) — Q3 2025 Earnings Call Transcript

Thank you, and hello, everyone. Thank you for joining Newmont's Third Quarter 2025 Results Conference Call. Joining me today are Tom Palmer, our Chief Executive Officer; Natascha Viljoen, our President and Chief Operating Officer; and Peter Wexler, our Chief Legal Officer and Interim Chief Financial Officer. Together with the rest of our executive leadership team, they will be available to answer your questions at the end of the call. Before we begin, please take a moment to review our cautionary statement shown here and refer to our SEC filings, which can be found on our website. With that, I'll turn the call over to Tom for opening remarks.

Thanks, Neil. To begin today's call, I'd like to take a moment to acknowledge the important leadership transition we shared a few weeks ago. Announcing my retirement at the end of this year and appointing Natascha as Newmont's next President and Chief Executive Officer. When I joined Newmont more than a decade ago, I could not have predicted the remarkable transformation our company would undertake. Over these years, we have not only grown as a business but redefined what it means to be the world's leader in gold mining. We have successfully navigated some of the most significant transactions in mining history, fundamentally changing the landscape of our industry and what it means to be a gold company. Today, we stand as the benchmark for responsible gold mining with an operating portfolio that has meaningful copper production and a project pipeline that is the envy of our industry. During my time with Newmont, the mining industry has undergone profound change. Newmont has responded to these changes and actively shaped its destiny. Rather than simply riding the commodity cycle, we have built a long-life, globally diversified portfolio, one that will sustainably deliver shared value to our host communities and governments, shareholders, employees and all of our stakeholders. It has been a privilege to serve as Chief Executive. And as I pass the baton, I am confident that Natascha, who has demonstrated exceptional leadership throughout her 30-year career in our industry, will seize the many opportunities that lie ahead for our business. And with that, I'll turn it over to Natascha to take you through our third quarter operational and financial performance.

Thank you, Tom, and thank you also for your leadership and support since I met you for the first time three years ago and for your leadership of this great company over the past ten years. Your contributions have helped shape the strong foundation we stand on today, and I look forward to leveraging that experience to further unlock the value that we all know this business can deliver. Before diving into the details about our operational and financial performance, I'd like to highlight a few notable milestones and record achievements from the quarter. First and foremost, in July, we safely recovered three teammates at our Red Chris project, a result of robust procedures and systems in place, the swift and trained actions from individuals involved and strong collaboration across the mining industry. As an organization, we are taking a hard and honest look at the findings from the investigation into the circumstances that led to the incident, and we are fully committed to applying and sharing those learnings across our business and the broader industry. Second, we've received nearly $640 million in net cash proceeds from equity and asset sales since the start of the third quarter, marking the successful completion of our asset divestment program and the further streamlining of our noncore equities portfolio. Third, from our portfolio of world-class gold and copper assets, we generated record third-quarter cash flow of $1.6 billion, enabling us to reach an all-time annual record of $4.5 billion, with one quarter still remaining. And we made significant progress on the cost discipline and productivity work we announced at the beginning of the year, which has allowed us to meaningfully improve our 2025 guidance for several cost metrics while maintaining our outlook for production and unit cost in a rising gold price environment, a notable success in today's market. We achieved this by establishing a smaller senior leadership team with a decentralized organizational structure designed to sharpen accountability and simplify how we work. This includes consolidating our structure to two business units, giving our twelve operating sites greater decision-making authority and enabling faster, more agile execution. In addition, we further strengthened our balance sheet and enhanced our financial flexibility, ending the quarter in a near zero debt position after successfully retiring $2 billion of debt. And Moody's upgraded Newmont's issuer credit rating to A3 with a stable outlook, a clear reflection of our improved credit profile, strengthened balance sheet, excellent liquidity position and prudent financial management. We have also continued to share our success with our shareholders, returning $823 million since the last earnings call through a stable dividend and ongoing share repurchases. On top of this financial discipline and excellent performance from our operations, we will also declare commercial production by the end of today at our new exciting mine, Ahafo North, which expands our existing group footprint in Ghana and adds profitable gold production over an initial thirteen years of mine life. With this strong momentum from our operations and projects, we are well positioned to continue creating long-term value for years to come. Building on our cost and productivity work and solid foundation from the first half of the year, our third quarter operational performance reflects our continuous focus on safety and optimization. Our third-quarter production was largely in line with the second quarter, primarily driven by a step-up in production due to higher grades of Brucejack, improved productivity at Cerro Negro and continued success from our patented injection leaching technologies at Yanacocha. As previously signaled, Peñasquito delivered a lower proportion of gold and steady lead, silver and zinc production in the third quarter, consistent with the planned sequence at this polymetallic mine. And at Ahafo South, we completed mining at the Subika open pit during the third quarter as planned, shifting mining activities to lower grades from the Awonsu open pit. And finally, at Lihir, we completed the construction of the engineered wall of the Phase 14a layback, preparing the site to efficiently reach higher grades in the future years. Consistent with our stable production in the third quarter, our unit costs remained largely in line with the second quarter. Our continued focus on cost discipline and productivity has enabled us to offset higher costs from profit-sharing agreements, production taxes and royalties resulting from the stronger gold price environment. In addition, we continue to progress the projects we have in execution and reached several significant milestones during this third quarter. As I mentioned, we poured first gold on September 19 and will be declaring commercial production at our new mine, Ahafo North, by the end of today. At our second expansion at Tanami, we have fully completed the concrete lining of the 1.5 kilometer deep production shaft and are equipping the shaft and completing construction of the underground crushing and associated materials handling system. At Cadia, tailing from PC2-3 has continued according to plan as we advance the underground development for PC1-2, along with critical tailings remediation and storage capacity work, which I will touch on in a little bit more detail in a moment. Moving on to Newmont's operational strength in the third quarter, we delivered another solid financial performance. Newmont generated $3.3 billion in adjusted EBITDA and adjusted net income of $1.71 per share for the third quarter, a 20% increase from the second quarter and more than double last year's results. Also during the third quarter, Newmont generated $2.3 billion of cash flow from operations and $1.6 billion of free cash flow after working capital, marking a record third quarter performance. This achievement represents the fourth consecutive quarter with free cash flow exceeding $1 billion, underscoring Newmont's scale and leverage to favorable gold prices. So far this year, we have generated $4.5 billion of free cash flow, an all-time annual record already, with one quarter still remaining. And since the last earnings call, we have received $640 million in after-tax cash proceeds from successful asset divestitures and further equity sales, bringing our total 2025 proceeds to over $3.5 billion in cash to support Newmont's disciplined capital allocation priorities. These priorities remain unchanged and include maintaining a strong balance sheet, steadily funding cash generative capital projects and continuing to return capital to shareholders. Looking ahead to the remainder of the year, strong execution across all our managed operations during 2025 has positioned us to achieve our full year production guidance. In the fourth quarter, mining at Yanacocha is expected to conclude, and we will continue to evaluate the opportunities in the surrounding regions of Peru. Additionally, we are looking forward to adding new low-cost ounces during the fourth quarter from our new mine, Ahafo North, and we are anticipating higher ounces from Nevada Gold Mines in the fourth quarter, as indicated by our joint venture partners. From a cost perspective, we are already seeing that our savings initiatives are bearing fruit this year, and we have reduced our absolute cost guidance in 2025 for G&A, Exploration, and Advanced Projects by approximately 15%. This improvement in G&A expense is the direct result of our deliberate efforts to simplify the organization and drive down labor and contractor costs. And on the back of progressing labor reductions, our Exploration and Advanced Project guidance is also reflecting the optimization work we are doing to ensure we are managing costs efficiently, including how we deploy resources and equipment, sequence studies, and focus exploration on areas that will generate the highest value. Turning now to unit cost. It is important to note that our 2025 guidance was established using a $2,500 per ounce gold price assumption at the start of the year. With sustained high gold prices, our fourth quarter all-in sustaining cost outlook includes increased cost from profit sharing, royalties, and production taxes. However, through ongoing optimization and cost improvements, combined with supportive macroeconomic tailwinds, we expect to largely offset these impacts, enabling us to maintain our guidance for cost applicable to sales and all-in sustaining cost per ounce. Finally, now shifting to capital spend. Sustaining capital spend in the current year is tracking below our guidance published in February 2025, primarily due to the timing of spend related to our investments in the tailings work at Cadia. The team has done outstanding work this year, thoroughly assessing every option to ensure we're deploying capital in the most efficient way. Our focus continues to be maximizing capacity in the current in-pit storage facility, repairing the southern wall of the Northern facility, and then raising the wall of the Southern facility. With this plan in place, we are ramping up our spend, ensuring that we achieve the right balance between responsible capital management and the tailings capacity needed to support this very long life mine. Similarly, development capital spend is also tracking below our initial guidance, primarily due to a deliberate shift in the timing of spend related to the study and underground development work to support the potential expansion project at Red Chris. Taking everything into account and looking ahead to 2026, gold production from our managed operations is expected to be within the same guidance range we provided in 2025, but towards the lower end due to the planned mine sequence at our world-class operations. As previously indicated, lower ounces from Ahafo South next year will be largely replaced by new low-cost ounces from Ahafo North mine. In addition, the decrease in expected production next year will be driven by a lower proportion of gold production from Peñasquito as we transition into the next scheduled phase of mining at the Peñasco pit while slightly increasing our output of silver, lead, and zinc. Lower leach production at Yanacocha as we conclude the mining activities at the Quecher Main pit and lower gold and copper production from Cadia as PC1 and PC2 come to an end and we transition to the next panel cave, PC2-3. In addition, following the anticipated $200 million improvement to capital guidance in 2025, we expect capital spending to be elevated in 2026 as a result, keeping our two-year average largely in line with expectations. Lastly, building on cost and productivity improvements achieved in 2025, we expect to realize the full benefits of our cost-saving initiatives, which will be reflected in our 2026 guidance to be provided in February next year. However, if elevated gold prices persist into next year, increased profit sharing, royalties, and production taxes could offset a significant portion of the benefits we expect to realize from our cost savings initiatives in 2026. These ongoing efforts demonstrate our disciplined approach to cost control and our continued commitment to driving margin expansion, with more work underway to capture additional efficiencies even in a rising price environment. With our guidance reflecting continued operational and financial discipline, I'll next turn to capital allocation, where our focus remains on striking the right balance between financial flexibility, reinvestment in the business, and returning capital to shareholders. We remain committed to our shareholder-focused capital allocation strategies, which are three key priorities and remained unchanged. Beginning with our strong and flexible balance sheet, we ended the quarter with $5.6 billion in cash, and we reduced gross debt to $5.4 billion, ending the quarter in a near zero net debt position and reinforcing our financial resilience in today's unpredictable environment. Secondly, we continue to steadily reinvest in our business, in line with our long-term planning cycle and external guidance, with a goal of generating sustainable free cash flow. And finally, we continue to return capital to shareholders. We declared a fixed common quarter dividend of $0.25 per share and repurchased $550 million of shares since our last earnings call in late July. This year, we executed $2.1 billion in share repurchases, bringing the total to $3.3 billion in share repurchases since February of last year, with approximately $2.7 billion remaining in our $6 billion program. We will continue to be disciplined and balanced in our capital allocation priorities. Despite the record level gold price environment, ensuring that Newmont is well positioned to drive consistent long-term shareholder value. With another strong quarter behind us, we remain well positioned to continue delivering on our commitments to our shareholders. Driven by the consistent operational performance we have seen so far this year, we are firmly on track to achieve the improved 2025 guidance that I outlined earlier. And from this stable and efficient operational performance, we have generated $4.5 billion in free cash flow so far this year, achieving a full year record in just the first three quarters. From this position of strength, we have focused our time and attention towards optimizing our assets, taking deliberate actions to improve our cost structure and unlock the full value of our world-class portfolio. Alongside our operational strength and financial discipline, we will declare commercial production at our Ahafo North project at the end of today, setting us up to deliver new low-cost ounces for many years to come. In addition, we have successfully completed our asset divestment program and the further streamlining of our noncore equity portfolio, generating more than $3.5 billion in after-tax cash proceeds from asset divestitures in 2025 to support Newmont's disciplined capital allocation priorities. Over the last two years, we have repaid $3.9 billion of debt and have returned over $5.7 billion to shareholders through our common dividend and share repurchases, delivering approximately $250 million in annual savings from these actions alone. Even amid unprecedented gold prices, our commitment remains to disciplined, balanced capital allocation, cost management, and productivity improvement, driving long-term shareholder value and financial resilience. As we look to the future, Newmont is well positioned to continue generating industry-leading free cash flow, strengthening our business and rewarding shareholders through a predictable dividend and ongoing share repurchases. Lastly and most importantly, I would like to sincerely thank Tom for his leadership and contributions that helped to put Newmont on such a strong footing. And with that, I'll turn it back over to you, Tom, one last time for closing remarks.

Thanks, Natascha. As only the tenth CEO in Newmont's 104-year history, it has been a privilege to serve this great company. I'd like to thank our Board for its guidance and partnership throughout my time in the role, our executive leadership team, and all of our teams across the world for their support in shaping our business into the industry leader that it is today. And with that, I'll hand the line back to the operator to open the call up for questions.

Congratulations, Natascha. And Tom, good luck in the future. So yes, a couple of questions. The first one, just on capital allocation and the balance sheet. You've been returning cash to shareholders at a healthy rate, but the balance sheet is effectively net debt zero, well below your net debt target. How do you see that going into 2026 if gold prices stay at this sort of level? Would you look to build cash? Or would you look to accelerate the rate of buybacks and cash returns to get closer to your net debt target?

Thank you for that question, Daniel. As we've said in our prepared remarks, we remain firstly committed to I think a very well-defined capital allocation framework. Within that framework, we've made some good progress, and we will continue to review our returns to shareholders within the flexibility that we have in the capital allocation framework, and we will remain disciplined towards that. And of course, just to add, we do review that on a quarterly basis with our Board.

Okay. So if prices stay at this level, would it be reasonable to assume that you would increase the rate of cash returns instead of moving into a larger net cash position?

Daniel, I would rather steer towards we'll remain disciplined within that framework. And we will continue to review that as we have greater certainty of what the gold prices do in the future. What's in our control, certainly, is to continue to focus on our operational performance, our safety, cost, and productivity work.

Okay. And then the second question is just on the project pipeline, previously indicated that Red Chris block cave would be the next project that would potentially be approved. Has there been any delays to that potential timeline with the incident last quarter? And is there any other updates on the other kind of longer-dated projects, Yanacocha, Wafi-Golpu, et cetera?

Daniel, firstly, on Red Chris, we remain on track to deliver a proposal to the Board towards the middle of next year. And we have, as we said earlier, done quite a bit of work to do a thorough investigation on the incident that we had. And we are building all of those learnings into the work that we're doing through the feasibility study. The progress remains on track. In terms of longer-dated projects, those are part of our studies pipeline. All of them will have to earn their right in the portfolio and for us to allocate capital to any future decision.

Congratulations, Tom, on retirement and Natascha on the appointment. When you described giving the sites more autonomy and just some of the restructuring, I'm interested, what that means for your team? Are there key appointments that you're still looking to make? Or do you feel like you have the team to carry out that strategy already?

Matthew, as you know, we currently have a vacancy for our CFO, with our finance function being capably led by Peter Wexler and his strong team. Filling that position is a priority for us. We have a solid depth in our operational teams that we will be utilizing. We have restructured our business into two units, each managed by strong directors who oversee six of our assets. Additionally, we have prominent leaders in our projects and studies as well as health, safety, security, and environment, all focused on ensuring operations and projects meet our objectives sustainably and safely. Furthermore, the restructuring framework enables us to maintain a strong functional team across all critical areas that will continue to support our defined goals. I am confident in the capability of our team across operations, projects, and functions.

Okay, great. Can you share any updates on the ramp-up of Ahafo North? You've put it into commercial production. Has that gone as planned? How does the ramp-up look for Q4?

Yes. We will officially declare commercial production by the end of today. This means we have operated for an average of 30 days at more than 65% of the design capacity, which equates to about 300 tonnes per hour. The ramp-up is on schedule, and we are very excited about this new mine. Tom and I will be visiting next week, and I believe this will be a significant achievement for Tom and for us as we get this operation up and running. We will celebrate with the team that brought this asset online next week to officially open it. We are thrilled to include this new mine in our portfolio.

I recognize it might be a bit early to ask, but is there any sort of perspective you can provide on reserve pricing, gold assumptions for next year? And then also in that context, whether we should expect a growth in the reserves?

Josh, you're right. It is a little bit early. As you would expect, we're right in the middle of our budgeting cycle, also busy with our resource and reserve review. And we will definitely give you an outcome of that work in February next year.

Okay, I understand. Regarding the 2026 guidance, I believe there are two aspects to consider. First, you mentioned that the average CapEx for 2025 and 2026 would stay the same. If CapEx decreases by $200 million in 2025, should we expect the figure for next year to remain the same as 2025, or would it be $3.2 billion plus an additional $200 million? Secondly, concerning AISC, I understand there are several factors at play. While no clear direction was given, does the text imply that AISC costs will remain stable, or would one of the optimizations and synergies offset the impact of higher gold prices?

Josh, yes, firstly starting off with capital. I think you're accurate. And if you consider that over the two years, '25 and '26, that we will remain within the guidance that we've given. 2026 will be higher. So you can assume that, that will flow through into 2026. If we look then at all-in sustaining cost, the two elements that will impact our all-in sustaining cost, firstly, would be the guidance that we've given or the indication of that we've given for the guidance next year of where our ounce profile will be for our managed operations. I want to just add that. And the impact would be predominantly from Ahafo South, where we — our Subika open pit operation has stopped, and we've moved into an Awonsu pit with lower grades. But our Ahafo North would largely offset that. The reductions then further will be Yanacocha from the Quecher Main pit, where we stop mining, and we will only be focusing on leaching activities. Peñasquito, we see a move into GEOs and our goal, just due to where we are from the mining profile, and Cadia as we wait for PC2-3 to ramp up. So the combination of what we think would be on the lower end of our guidance for ounces and moving of sustaining capital into 2026. Saying that, however, despite the good progress that we've made on our cost and productivity work and we start to see those benefits flowing through, that work will continue with a focus on cost and productivity. So to help offset any increases due to higher gold prices or what we've seen in the higher capital or lower ounces next year.

And Tom, congratulations on concluding your very notable career at Newmont. And then Natascha, I just want to say congratulations on your appointment as CEO. I do look forward to following this next chapter in Newmont's history. If I could, I'd like to ask about capital allocation again, but just from a slightly different point of view. Obviously, there's a lot of extra capital for which Newmont can consider allocating in a variety of different ways. It sounds like capital return is a priority. The balance sheet is already very strong. How do you think about acting on asset or company acquisition opportunities? Is that something that's still within the wheelhouse of potential capital allocation? When you think about growth and investing in growth assets, is that on the docket?

Lawson, thank you for that question. Firstly, we believe that with the wealth of the portfolio that we have, the best investment for us is in our own assets and in share buybacks. So definitely, we will remain disciplined around that. And just as a reminder, those three elements, you've touched on it. The one is certainly strengthening our balance sheet and our resilience. We've made some good progress there, the investments that I've just touched on. And the progress that we are making on bringing Tanami 2 and the two block caves at Cadia still online, disciplined in making sure that we spend our money well in those projects and bringing them online in time. And then lastly, we still have our ongoing share buyback program and our fixed dividend policy. So we will remain committed, and that investment will only be made where we know that it's value accretive.

Okay. Fantastic. And in that same vein, I mean, there will be an opportunity to consider a significant investment into Nevada Gold Mines from the point of view of Fourmile, which is now 100% controlled by Barrick. I mean, there's also a demonstrated significant upside at Goldrush as a result of the work that's been done at Fourmile. I mean, how do you think about those two investment options? Is one preferred over the other? And when you look at Fourmile potentially coming into the portfolio several years down the road, do you think of it as another project to which to allocate capital? Or is that a separate decision from the project allocation?

Thank you, Lawson. Firstly, on Goldrush, is already part of Nevada Gold Mines. So already included in that portfolio, and the capital required is included in the capital forecast as we have it from Barrick today. From a Fourmile point of view, and if you look at that Nevada Gold Mine district, we know that it's a district that still has a wealth of resources and a long future in terms of mining. And as Barrick has concluded their pre-feasibility last year, and from the results that we have seen, which is the same results that you have seen and just from what we know from that district, we're very excited about the opportunity that we have that's included in the current agreement for us to have an option to continue our share of that project as well. So we are waiting for Barrick to give us more information so that we can make an informed decision. And as you would have indicated a little bit earlier, it will be a project that will compete for capital against all of our other projects, and we will be disciplined in also making this capital decision when we have the information available as per our JV agreement.

Congratulations, Tom, on your retirement and Natascha, on your appointment as CEO. I have a couple of detailed questions about Yanacocha. You mentioned that the tapers are expected to close in the fourth quarter. They had a really strong quarter this time. Is that expected to continue into the fourth quarter?

So Anita, yes. Thank you for that question. Into the fourth quarter, we do see slightly lower than the third quarter. And that is as we in the mining, in Quecher Main pit. And then we will be fully focused on the injection leaching through those in the heap leaches that they have. And that's where our main production source would be. Sorry, Anita.

That's fine. As you mentioned, if you expect to be at the lower end of similar levels to 2025 for your managed operations, I assume that refers to the lower end of the plus or minus 5%. Within that, are you predicting Cadia will see a decline in grade next year? Or could there be a positive surprise in that area as well?

Anita, that's a very good question. We are planning based on the best estimates from our models. So far this year, we have seen some upside. We will continue to monitor PC1 and PC2 as they approach the end. The models indicate that we will see a decrease heading into next year, and that is what we have included in our planning for next year.

All right. For the last question regarding cost, you mentioned that in the fourth quarter, the cash costs are around $1,260. As a reference for next year, considering current gold prices and the operational efficiencies achieved, would that figure be a reasonable average run rate for next year, taking into account higher gold prices and potential grade declines as you mentioned?

Anita, our fourth quarter CAS is typically cyclical by nature, so that's the first assumption to keep in mind. We do not expect that to be the run rate going into next year. From the CAS perspective, it will mainly be affected by our normal inflation, and also influenced by gold prices, increases in taxes, royalties, and worker participation. However, it's still a work in progress as we finalize the last quarter and prepare for guidance in February.

All right. And then one last quick one for me. On the Ahafo North, my prior assumption was production of around 300,000 ounces for next year as it ramps fully. Does that mean that Ahafo South would decline by the same amount? Or is 300,000 ounces too aggressive for the first year of operations at Ahafo North?

I think if we look at the two operations, you could assume a similar kind of run rate that we've had for this year between the two operations.

Natascha, congratulations on your new appointment. And Tom, congratulations on the retirement, and hope it's going to be a good one and a great adventure. Three questions, if I could. Just Natascha, starting off on Nevada Gold Mines, you said you're waiting for Barrick to provide you with information so you can make your decision. Just trying to understand, is that information the feasibility study that we need to wait on? Or is there something else before that? I think the feasibility study is not until 2029.

Yes. That's right, Tanya. We're waiting for that feasibility study.

Okay. That's helpful. And just on the capital returns to shareholders, you focused a lot on share buyback. Should I be assuming that in February, our $1 per share dividend remains intact and constant?

Tanya, as you know, within the capital allocation framework, we currently have a fixed dividend that the Board reviews on a quarterly basis.

Okay. So it could be possible, I guess, that part of your return to shareholders could include an increase in dividend in addition to your share buyback?

Yes. Tanya, it's absolutely not something that I think I can give you any indication on, I think. I think the commitment that we have is to remain disciplined within the framework that we're very familiar with.

Okay. Maybe on the restructuring then, if I could. Understand that you flatlined a lot. I'm just trying to understand, I'm trying to draw an organizational chart. Natascha, how many people do you have reporting or divisions do you have reporting to you at this point?

So Tanya, we have restructured the organization to have two business units, each of them fixed assets. So it's a good spread of an equal spread of operations and also a good spread from a jurisdiction point of view. So if I look at a future structure where I have the operations and the two managing directors, the group head for projects and the group head for safety, health, and environment still reporting to me, it would be a team of eight people. Sorry, Tanya, just want to correct that. If I add the CFO, it would be nine, yes.

I’d like to clarify the production guidance for 2026. I believe I caught two different points earlier and want to ensure I understand correctly. You're stating that the production level for the core portfolio will be within the same range as in 2025, which is 5.6 million ounces. However, you're also suggesting it might be lower. Should I interpret that as potentially being up to 5% less than 5.6 million ounces?

The 5.6 million includes both managed and non-managed operations. For the non-managed operations, we are waiting for guidance from Barrick, as usual. For the managed operations, we typically provide a guidance range of plus or minus 5%. We expect that next year's production will be closer to the lower end of the managed guidance, around 4.2 million ounces.

Okay. That's very clear. And then in all the cost commentary, I didn't hear anything about cost inflation. You mentioned that some of the cost saving initiatives at the unit cost level are being offset by higher royalties, profit sharing, taxes, but that's all gold price driven. Are you seeing any underlying cost inflation on labor, consumables, fuel, anything?

It will be part of our budget, Fahad. There will be a normal increase in that we normally do for our labor increases. And then we'll, obviously, there would be economic factors from some of our major consumables. I think the biggest challenge that we normally have around inflation would be taxes, royalties, and worker participation. And that we've been able to offset a large portion of through the cost savings initiatives.

Just a follow-up on the 2026 qualitative guidance chart. So to clarify, your managed guidance, 2025 is 4.2 million. You say today that it's expected to be similar but close to the bottom end of the range, which implies 5% lower at a roll down of 4.0 million ounces. Is that too conservative a view for the market to take as the midpoint for 2026 guidance?

I think, Daniel, considering that you very rightly commented that it's indicative from where we are going for the next year. We're in the middle of that work. So it is directional. And just to remind you, the impacts that we are having, firstly, I think probably just to take a step back. At the beginning of the year, we've given a clear indication of the work that we're doing to support the long-term profile through the projects and the projects that are in delivery. And those like Ahafo North that we just delivered, they are all on track for delivery. Then we have other production improvements that we're working on, amongst others, with the laybacks that we are doing at Boddington and Lihir, all of those underway for that long-term guidance and making sure that we're consistent with around that 6 million ounces for next year. However, the areas that we are focusing on that we have seen come down is Yanacocha because we have stopped production at the Quecher Main pit. So we're absolutely now required and reliant on the injection meeting. Peñasquito, where we're seeing that we're taking another layback. And that's just due to the normal sequencing of that pit, we'll see lower gold and slightly higher ounces, GEO ounces. And then Cadia, as we work on bringing PC2-3 online, which is well on track to deliver on time, we see a period for where we see PC1 and PC2 lower grades as they come to an end. So the impact on 2026 is driven by those dynamics.

I know it's still early, but regarding the upcoming reserve discussion, there's clearly a significant amount of discretion involved, which I'm sure you are debating. Given that the gold price has risen considerably, how are you approaching the balance between reserves and maintaining higher margins? I'm curious about how your team is currently thinking about this internally.

From a reserve and resource pricing perspective, we are currently engaged in that discussion. Regardless of how we consider resource and reserve prices, our primary focus is to prioritize the highest grade ounces first with the available capacity. This is crucial, especially as we assess the cost of tailings, which presents a significant challenge for us. We must ensure that we are focusing on economic ounces from a tailings standpoint as well. These are key considerations as we evaluate resource and reserve price impacts. Additionally, I want to emphasize that, irrespective of gold price fluctuations, we will continue to concentrate on our underlying costs and productivity to enhance margins. That remains our absolute focus. It's also worth mentioning the divestments we've made throughout the year, which are important for you to consider.

Just going from previous comments, congratulations. Tom, on your tenure at the helm and Natascha, as you take the baton. I wanted to ask a more strategic question on the project pipeline. How do you maximize the value of your currently longer-dated projects here? Does the gold price let you accelerate some of these given the reduced balance sheet risk from your position now? Or is there maybe room to monetize additional assets like the stakes in some of these multimillion ounce projects like Galore Creek and Nueva Unión as you go forward if they're not medium-term priorities?

I think, Hugo, you have heard me say this probably five times on the call so far. So we're going to remain disciplined in terms of that capital allocation. So we have these projects in study phase in various sizes in the pipeline. They will all, as per the Fourmile comments a little bit earlier, all compete for capital within the profile or within the portfolio. I think it's important to consider that we have many opportunities, both brownfields and greenfields. The most value-accretive projects will have the benefit of capital allocation. Obviously, within that framework of maintaining a resilient balance sheet and returning capital to shareholders through share buybacks and dividends. So that remains the focus. And as we develop those projects, when the time is right, we will make those decisions.

Got it. So to clarify, the projects not competing for capital in, say, the next five years is a divestment an option?

We are consistently assessing our portfolio to ensure we maximize the value of our assets. If we determine that certain assets do not provide value, we will consider adjusting their role within the portfolio.

Got it. Fair enough. And then lastly, if I could, Tom, as you take a step back, maybe what excites you the most about the future of Newmont?

Thanks, Hugo. Thanks for giving me a chance to use my voice. Hugo, this portfolio we've built is unsurpassed in the gold industry. The long-life operations, the project pipeline you were just asking about, that can be developed with discipline over time to be able to make decisions and lay out a portfolio of gold production, supported by copper and a few other metals coming through. Never been seen before in this industry. What I'm going to be looking forward to watching from Cottesloe Beach is in the years to come, '27, '28, '29, '30, 2035, looking at Newmont sustaining the sorts of production levels and margins that no other gold company can compete with. That's the thing that excites me, Hugo.

Best wishes and congratulations on the management changeover and transition. Just one question from me, Natascha. When I look at this $450 million in Exploration and Advanced Projects, how much of that reduction is due to rationalization and asset sales, and it's just sort of catch-up adjustments versus the original guidance? And how much was from strategic capital allocation decisions aimed at say, cost savings where exploration was either pulled back or advanced at certain assets?

Thank you, Ralph. Over the past 18 months, we have undertaken significant efforts to evaluate all of our assets in light of our future portfolio. We considered not only the current status of each asset but also their long-term potential and any exploration opportunities. This analysis, along with our advanced projects, formed the basis for reexamining our future work for Newmont, ensuring we focus on maximizing value from each asset. This foundation also influenced our organizational structure and decentralized design. Although that may not address your question directly, it's vital context. Within that framework, we are strategically directing our exploration funding towards the areas where we see the most promise for future growth and understanding of these assets. Therefore, the reduction we observed was not incidental but rather a thoughtful evaluation to ensure we are investing in the right areas for our assets. This has been a conscious effort on our part.

Thank you, operator. I was expecting that to go to Natascha. Thank you, everyone, for your time, and please enjoy your evening or the rest of your day. Thank you.