Daniel Morgan

Daniel Morgan asked if Newmont sees opportunities for increased debottlenecking and brownfield expansion, given current high gold and copper prices, and how this aligns with a capital allocation strategy that appears to prioritize returning cash over growth. He also requested insights into specific assets across the portfolio that present such brownfield expansion opportunities beyond Red Chris.

Answer

Natascha Viljoen, President and CEO of Newmont, affirmed that the company continuously evaluates such opportunities, ensuring sustainable baseline production. She stated that Newmont actively pursues short-term, low-capital, quick-to-market opportunities, considering constraints like tailings capacity and processing plants, citing an additional cut at Yanacocha as an example. Ms. Viljoen then listed several brownfield expansion opportunities: Ahafo South (underground development), Ahafo North (duplication potential), Lihir (access to high-grade ore via nearshore barrier), Tanami (post-expansion opportunities), Brucejack (stope size optimization), Cerro Negro (open pit access), and Cadia (PC 2-3 and PC 1-2 ramp-up).

Daniel Morgan questioned whether Newmont sees opportunities for more debottlenecking and brownfield expansion, given high gold and copper prices, contrasting this with a capital allocation strategy focused on returning cash. He also asked for specific brownfield expansion opportunities across the portfolio.

Answer

Natascha Viljoen, President and CEO, Newmont, stated that Newmont continuously evaluates short-term, low-capital, quick-to-market opportunities, considering constraints like tailings capacity. She highlighted brownfield opportunities at Ahafo South, Ahafo North, Lihir, Tanami, Brucejack, Cerro Negro, and the ongoing Cadia Panel Caves development.

Daniel Morgan followed up on the 2026 qualitative guidance, asking if taking the lower bound of 4.0 million ounces for managed production (5% lower than 4.2 million ounces) would be too conservative as a midpoint. He also inquired about Newmont's internal debate regarding reserve discussions, specifically how the company balances gold price assumptions for reserves with maintaining higher margins.

Answer

Natascha Viljoen, President and COO of Newmont Corporation, reiterated that the 2026 guidance is directional and still a work in progress. She explained that the expected lower production is driven by dynamics at Yanacocha (ending pit production), Peñasquito (normal sequencing, lower gold), and Cadia (transitioning between block caves). On reserves, Ms. Viljoen stated that the focus is always on prioritizing the highest grade ounces and ensuring economic ounces from a tailings perspective. She emphasized that Newmont will continue to focus on underlying cost and productivity to drive margins, independent of gold price, and also noted the impact of recent divestments on resources and reserves.

Daniel Morgan sought further clarification on the 2026 managed production guidance, asking if the 'lower end of the range' (implying 4.0 million ounces from 4.2 million ounces +/- 5%) was too conservative for the market. He also inquired about Newmont's internal debate regarding reserve discussions, specifically how the company balances higher gold prices with maintaining higher margins when considering reserve pricing.

Answer

Natascha Viljoen, President and COO, reiterated that the 2026 guidance is directional and still a work in progress, explaining that the anticipated decrease is driven by dynamics at Yanacocha (ending pit mining), Peñasquito (normal sequencing, lower gold), and Cadia (transitioning from BC1/BC2 to BC2/3). On reserves, Ms. Viljoen stated that the focus is on prioritizing the highest-grade ounces through available capacity, considering tailings costs as a bottleneck, and driving margins through underlying cost and productivity improvements, independent of gold price. She also noted the impact of recent divestments on reserves.

Daniel Morgan from Barrenjoey asked why production guidance was not raised after a significant Q2 beat and requested updates on the Tanami shaft works and remaining risks at the Ahafo North project.

Answer

President and CEO Tom Palmer explained the guidance remains prudent due to expected grade declines in H2 and commissioning risks at Ahafo North. President and COO Natascha Viljoen confirmed the highest-risk work at the Tanami shaft is complete and that Ahafo North is on track, with major construction finished and commissioning underway.

Daniel Morgan posed a philosophical question about how the record-high gold price might change the way Newmont manages its business and asked for an update on the growth project pipeline, including timelines for potential board-level consideration.

Answer

Executive Tom Palmer emphasized that despite high gold prices, the company's focus remains soberly on delivering safety, cost, and productivity improvements within its newly defined portfolio. He noted the company is in an investment cycle to lower unit costs. Regarding growth, Palmer identified the Red Chris project as being in the 'prime position' to be the next project sanctioned, with a feasibility study underway this year, contingent on project economics and permitting.

Daniel Morgan from Barrenjoey questioned the narrow $80/oz margin between the 2025 AISC guidance and the new $1,700/oz reserve price, asking if this implies peak costs. He also asked for an update on the go-forward plan and reinvestment timeline for the Lihir asset.

Answer

CEO Tom Palmer explained that reserve pricing and annual cost guidance are separate processes. He acknowledged the 2025 AISC of $1,620/oz is high due to significant capital investment at Cadia and that costs need to come down. Regarding Lihir, he confirmed the mine plan is optimized and the focus is now on a multi-year stripping campaign to access higher grades, which will lift production starting in 2028.

Daniel Morgan of Barrenjoey inquired about the alignment of cash flow with production and sales, the potential for mining development ore from the Merrin mine, and specific tonnage and production expectations for Merrin in 2026. He also asked about the mine's breakeven production level.

Answer

CFO Morne Engelbrecht confirmed the company aims to match cash flow with production quarterly, noting a recent pre-sale of concentrate to align cash with Q1 output. CEO Michael James McMullen added that development ore from Merrin will be mined opportunistically and provided 2026 run-rate estimates, including 150,000 tonnes at 5-6% copper and 150,000 tonnes at 9% zinc. McMullen highlighted that Merrin will smooth production volatility and estimated the mine's breakeven is likely in the high 20s to 30,000 tonnes per annum.

Daniel Morgan inquired about the primary drivers for 2025 production growth, asking whether it would come from increased tonnes or higher grade. He also sought clarity on the expected trend for mined ore tonnes in the upcoming quarter and the scope of the February resource and reserve update.

Answer

Executive Michael James McMullen explained that the key driver for 2025 production growth is more tonnes mined and improved consistency, rather than a significant change in grade, which is expected to hover around 4%. He noted that the company exited Q4 at the midpoint of the new year's guidance. Regarding the resource update, McMullen confirmed it would include QTS North, Central, East West, and the newly drilled QTS South Upper, with a potential zinc resource update to follow.

Daniel Morgan of Barrenjoey asked about the status of discussions with Sprott regarding the mezzanine debt, the strategy for engaging the broader lending group, the drivers of 2025 production growth, the quantifiable impact of recent dilution improvements, and the timeline for the next resource and reserve update.

Answer

Executive Michael James McMullen confirmed that discussions with Sprott and the broader lender group are ongoing and parallel, aimed at reducing cost and complexity. He projected 2025 production growth would come from slightly more tonnes at a similar grade, noting they are seeing 10-15% less dilution than planned. The next resource and reserve update is expected by the end of February, with a data cut-off at the end of October.

Daniel Morgan of Barrenjoey inquired about the status of discussions with Sprott regarding the mezzanine debt facility, the primary drivers for 2025 production growth (tonnes vs. grade), and requested quantification of recent dilution improvements compared to reserve assumptions.

Answer

Executive Michael James McMullen confirmed that proactive discussions with the entire lender group, including Sprott, are a "work in progress" aimed at reducing cost and complexity. He stated that 2025 growth will come from slightly more tonnes at a similar grade, and noted that recent mining has seen 10-15% less dilution than assumed in the reserves, which may lead to a reserve grade increase in the next update.