Good morning and welcome to Newmont's Third Quarter 2020 Earnings Call. All participants will be in listen-only mode. [Operator Instructions]. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Jessica Largent, Vice President of Investor Relations. Please go ahead.

Thank you and good morning everyone. Welcome to Newmont's third quarter 2020 earnings conference call. Joining us on the call today are Tom Palmer, President and Chief Executive Officer; Rob Atkinson, Chief Operating Officer; and Nancy Buese, Chief Financial Officer. They will be available to answer questions at the end of the call along with other members of our executive team. Turning to Slide 2. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found on our website at Newmont.com. And now, I’ll turn it over to Tom on Slide 3.

Thanks, Jess, and thank you for all for joining us this morning. Before I start, I will take this opportunity to thank Jess Largent who will be leaving Newmont at the end of the year after more than five years with us, which included three years as Head of our Investor License Group. For those of you who have not had the chance to meet him, I also like to introduce Eric Colby, our Vice President of Strategic Communications. Eric was appointed to lead a strategic communications function earlier this year. And he combines both Investor Relations and Communications. Eric has been with Newmont since 2007 including three years working at Yanacocha in Peru. And since 2013, Eric has led multiple transactions as part of our corporate development team, playing a key role in the divestiture of Batu Hijau, the acquisition of Goldcorp, and the formation of the Nevada Gold Mines joint venture. I would like to thank Jess for her many contributions to Newmont. The support that she has provided me and my team and wish her the very best of luck as she marks on her next adventure. Turning back to results. I'm very excited to share with you our record for third quarter performance as we continue to deliver on our purpose to create value and improve lives through responsible and sustainable mining. Turning to our quarterly highlights on Slide 4. Newmont has the industry's most diverse, balanced portfolio of world-class assets that provide stable production with significant leverage to rising gold prices. We have continued to manage through the COVID pandemic from a position of strength. With a proven leadership team, operating model and highly attractive workforce, we're building on our track record of superior value creation. I'm incredibly proud of how our teams across the…

Thanks, Tom. Before jumping into the regions, I'll start with a general COVID update. Across our portfolio, we've continued our wide ranging controls and safety protocols to place the health, safety and wellbeing of our teams and our communities above all else. While we've had employees and contractors test positive for the virus, our effective testing, contact tracing and quarantine procedures have proven to be effective in mitigating the spread to other employees and local communities. In the second quarter, with five sites and care maintenance and all five sites were operational in the third quarter. Penasquito ramped up quickly and was achieving pre-COVID record levels in the plant by mid-June. Éléonore and Musselwhite ramped up early in the third quarter, and Yanacocha has returned to nearly full capacity. Cerro Negro is currently operating at about 60% of normal capacity, as the site continues to be impacted by ongoing travel restrictions in Argentina due to the virus. We're working closely with the local authorities and unions and are mitigating the efficiency impacts of reduced staffing levels by consolidating our mining and processing efforts in the near-term. I'm incredibly proud of the commitment of all of our teams during these difficult times, and the efforts that they have demonstrated day in, day out to work and produce safely. Turning to Slide 12 for an update on Australia's performance. At Boddington, we delivered solid third quarter production on the back of higher grades, which partially offset the wet weather that impacted mining productivity. As the stripping campaign winds down, we expect to benefit from higher grades through 2022. Boddington is expected to finish the year strongly with higher production and lower operational costs in the fourth quarter. The Autonomous Haulage System is progressing well, and remains on track to be fully operational…

Thanks Rob. Turning to Slide 17 for the financial highlights. We delivered our strongest ever quarterly performance across several financial metrics, including record free cash flow of $1.3 million, of which 97% is attributable to Newmont. Year-to-date, we have generated $2.3 billion in free cash flow of which 96% is attributable to Newmont. Other notable third quarter results include revenue of nearly $3.2 billion, adjusted net income of $697 million or $0.86 per diluted share, adjusted EBITDA of more than $1.6 billion, an increase of 54% from the prior-year quarter, and cash from continuing operations of $1.6 billion ending the quarter with a strong cash position of $4.8 billion. We ended the quarter with liquidity of nearly $8 billion and our net debt to EBITDA ratio improved to 0.4 times. Earlier this month, S&P moved Newmont's outlook from stable to positive and strong free cash flow prospects and reconfirmed our BBB credit rating. As a reminder, our financial results proportionally consolidate the company's ownership interest in Nevada Gold Mine that do not include the contributions from the company's investment in Pueblo Viejo which appears in equity income versus in our operating results. For the third quarter, our 40% of PV reported 87,000 ounces of production and would have added an additional $115 million of EBITDA. Turning to Slide 19 for a review of our earnings per share in more detail. Third quarter GAAP net income from continuing operations was $611 million or $0.76 per share. Adjustments included $0.07 related to the change in fair value of our equity investments, $0.03 related to incremental COVID specific costs such as additional screening protocols, transportation costs, and community fund disbursement, $0.10 related to pension settlement changes related to the Nevada Gold mine transaction, $0.03 related to tax adjustments and valuation allowance, and $0.07 of other charges. Taking these adjustments into account, we've reported third quarter adjusted net income of $0.86 per diluted share. While the adjusted EBITDA for approximately $32 million of non-recurring incremental COVID specific costs from our third quarter net income, we did not adjust out approximately $35 million of care and maintenance costs to Yanacocha, Cerro Negro and Musselwhite ramping up in the third quarter. With that, I'll hand it over to Tom on Slide 19.

Thanks, Nancy. Turning now to Slide 20. Our capital allocation philosophy remains unchanged and continues to balance the following three priorities: reinvesting in our business through disciplined investments in exploration and organic growth projects; maintaining financial strength and flexibility to sustain the business across cross cycles; and returning cash to shareholders. Newmont continues to set new standards as the clear industry leader in shareholder return which we further differentiated with a 50% increase in our quarterly dividend that we announced yesterday, bringing our quarterly dividend to $0.40 per share and an annualized dividend rate to $1.50 per share. This was our second substantial dividend increase this year, demonstrating the strength and stability of our business. Turning to Slide 21 for more details. During 2019 and 2020, we'll have returned more than $2.5 billion to shareholders through dividends and share buybacks, an amount that is more than a total of our next eight competitors combined. Our employees' take the share third quarter dividend represents a 186% increase from the third quarter dividend in 2019 and highlights the strength of our financial position and our ability to continue kind of industry-leading dividend, mostly simultaneously investing and develop our most profitable projects. Our most recent dividend increase was the same within our newly established dividend framework. This framework provided our shareholders with the stability of advice annualized dividend of $1 per share calibrated at a $400 gold price assumption. And the potential to receive 40% to 60% of the incremental free cash flow generated at gold prices above $1,200 per ounce. Our third quarter dividend was calibrated at a conservative and stable $1,500 gold price assumption. As we have disclosed previously, Newmont generates incremental free cash flow of approximately $400 million for every $100 change in the gold price above $1,200. So at…

We'll now begin the question-and-answer session. [Operator Instructions]. Our first question today comes from Fahad Tariq with Credit Suisse.

Hi, good morning, just one question for me. I didn't see in the presentation, anything on synergy targets and what maybe if that's changed or not. But in any case, can you provide some color on -- is the cash flow synergy targets still $500 million for next year? How is that progressing? And anything else you could tell us on that front would be great.

Okay, thanks, Fahad, and good morning. I will talk regarding some cash results and then give you some full results of where we're delivering net value. Yes, we're on track to deliver facility targets, as we've committed, $500 million next year is still very much our commitment that's incorporated in our long-term guidance. I will update our long-term guidance in December in accordance with that. Just this week we have been meeting with our board to review our plan, which forms the basis of our guidance. But I remain very confident we will deliver at least $500 million of free cash flow next year. And as I say, it is still already in our long-term guidance. Rob, you want to give a few stories [ph].

Thanks, Tom and thanks for the question, Fahad. I find a way the engine of our predominance is in Penasquito and that team continues to do particularly well and have over exceeded this year. And as a remainder, the key areas that we're focused on are primarily the front-end of the process plan to allow more water flow through the mill. And we've successfully done that in states. In terms of the mining initiatives, it is about improving the fragmentation to enable more ducting through the plant, but also just bringing greater and greater discipline into how we blast, how would you market, how the shovels dig, et cetera. But beyond that, we've also moved into the total cost of ownership and the supply chain side of things. So, the procurement of non-OEM engineered parts, just to name a few, but we've got 45 initiatives on the order and they're all delivering good value. So very, very pleased with how things are going.

Our next question comes from Tyler Langton with JP Morgan.

Good morning, hope everyone's doing well. Just first question, I guess with sort of COVID cases rising. I guess is there do you see any increased risk of the shutdown at the mines, especially, I guess, the mines that were previously impacted. And then just with the Cerro Negro, I guess it's operating at 65%. Is it really to get back to 100% of it really just based on having travel restrictions ease or I guess other sort of alternatives you can look at?

Good morning, Tyler. Thank you. There is absolutely nothing wrong with the Cerro Negro operation. The constraints are all around the travel restrictions, but everyone in Argentina will be managing to keep people safe and healthy. We continue to apply our kinds of protocols with discipline across every one of our 12 managed operations, no matter where they're in the world. So in Australia, where there is no spread, there is no community virus in the Western Australia or the Northern Territory with Boddington, and Tanami respectively. We still maintain all of our protocols at those operations to ensure that we manage the risk of this nasty virus spreading. We still have some 10,000 people who are not an operating partner and office environment working virtually, again to protect the health and safety and safety of the communities in which we live and work. Rob Atkinson will give you a story of around Penasquito of the work that's being done, which will be mirrored across every one of our operations to ensure that we keep people health and safety, it's a good story that really demonstrates the extra effort that people are going through, the resilience in our business and why I'm so incredibly proud of our Newmont workforce. Rob?

Thanks, Tom. And really just to build on that is that it also highlights how Newmont is living and managing the constitution with the virus. The Penasquito to give everybody on the line, a sense that when we talk about COVID testing, it's easy to think, yes, that's fairly simple. But in Mexico, we've got 18 testing centers, we've got seven at various airports throughout Mexico, we've got seven at various major bus stations throughout Mexico. And we've got four testing stations onsite, that that also is required to staff those up with nurses and we've got 56 nurses and personnel operating those 18 centers. And as you can imagine, since COVID started, we have performed 10s and 10s of thousands of tests to make sure that our people are safe to go to the site. And also we're testing before people leave the site, so they can go back to the communities safely and with the full knowledge that are clear the virus. But I think that story from Penasquito really highlight just as Tom said, the effort and the commitment that our teams have to make sure that we operate throughout this virus very, very safely.

Thanks. That’s helpful. And then just at the two projects for next year for Yanacocha and Ahafo North, can you maybe give us a sense when you actually might make a decision? And is there any risk just from COVID sort of pushing those decisions out?

Thanks, Tyler. I will pick up Yanacocha -- Ahafo North will come first, it will be early in the new [indiscernible] Ahafo North which is working through with the API on the final permit. It's absolutely down the middle of our warehouse. The blueprints are the same as the original Ahafo, [indiscernible] very, very straightforward mine to do, I repeat a mine mill, 20, 30 kilometers from existing Ahafo operation. And a lot of the work particularly in the first four months is a relocation of the road and then clearing of top soil and starting the initial [indiscernible] all of which is done with local Ghanaian workforce. And we build off the project that is still in place at Ahafo having just recently finished the Ahafo mill expansion and to do underground, so very well-positioned with Ahafo North and lots of water bodies closed, [indiscernible] appears to be closed. At Yanacocha Sulfides, in second half of next year, still doing the final engineering work around the feasibility study and again pretty straightforward in terms of bringing that project 12-months approved. So the layback of the existing Yanacocha pit mine today at Yanacocha starts deploying equipment to that layback. And at the Yanacocha underground mine which we have already developed quite extensively so both [indiscernible] evolve, will advance. The key word is around the construction of a concentrator and the – we will apply on the existing footprint. And again, as you approve that project and do your early works, a lot of that is civil works to lay the foundations for substantial processing plants, so not so unique COVID-related restrictions to being able to bring that project on as we enrich them.

Our next question comes from Greg Barnes with TD Securities.

Thank you, Tom, just rehashing your commentary on the dividend framework. Did I understand that you will reassess the dividend every six months now going forward based on the gold price?

Our board will look at every quarter, Greg. But I'll look back at a semiannual gold price period. So if you look at the discussion we went through with the board this week include that dividend, we look back the semiannual period track on is the first half of this year, gold was averaging around $1,550 for the first half of the year, we took conservative view to lower that to $1,500 and applied a 40% on the lower end of that range to that $1,500. So we'll look every quarter as a board but they look back over that semiannual period.

Okay. So in Q1, if you look back over the second half of 2020 let’s say the average $1,900 which is exactly will, you do something like $1,800 as the basis of dividend?

I think as you use our framework and my -- did those calculations, and you saw that in your report this morning, that is absolutely the discussion that our board will be going through. So you could do that calculation side of 40% to 60%, could be somewhere between 0 to 20, 0 to 40, that would be subject to the board, looking at not just the gold price but all of a number of other factors. But that's just sort of discussion and we'll be having that framework allow us to have that discussion, and allows us you and the investment community to make those determination.

And since I'm interested in your comments on copper and the projects in your portfolio, is that an expression of increasing interest in copper or just a factoid out there that those projects have copper exposure from an interesting angle?

Yes, it's just purely a factoid. We don't need to do anything other than develop an organic project pipeline, we'll get a natural exposure to copper at a time it will be an important thing in the global community.

Our next question comes from Chris Terry with Deutsche Bank.

Hi, Tom, Nancy and Rob, a couple of questions from me, first on the cash balance now at $4.8 billion, just seeing that the mechanics of that, looking back, I guess the last couple of years, you have had a balance about $2 billion or so I think. But generally, it's a reasonably high cash balance. But as you think about going forward, as a cash yield, you pay somewhat into dividends, and then you show it on our numbers become net cash relatively quickly. How do you think about the actual cash balance? So what you'll do with that is that you're going to be used to pay debt, or what physical will you do with the actual cash? Thanks.

Yes, absolutely. I'll take that one. You got this right. We have indicated publicly that we would like to keep cash balances, somewhere in the $2 billion -- $2 billion to $3 billion range. And I think in the time of COVID uncertainty that remains prudent. We've also indicated that we’ll continue to use that cash for things like paying down our 2021 through 2023 debt, things like the share buybacks that we initiated last year, and certainly contributions to the dividend as well as reinvesting in our business. So all of those things combined will give us that financial flexibility, and optionality. But yes, in today's world, I think holding a bit more cash on the balance sheet is certainly something we'll continue to do.

Okay, thanks. Thanks, Nancy. And then just in terms of the project pipeline on Slide 9, you talked about Ahafo North and Yanacocha Sulfides, 750, I think so the Ahafo North CapEx and Yanacocha Sulfides' second half next year decision, can you just remind us the time period and the rough capital that that would be spent over, I think it's a pretty long-dated project, but just wanted to get an update. Thanks.

Thanks, Chris. It's round down to $2 billion where 51.35% is in Yanacocha, so it's roughly a $1 billion to Newmont's account and its three-year development. But you look at the big -- the three big capital projects, and if you look at our -- going to model our development capital going out on the back of those, certain pieces for Tanami, certain pieces for Ahafo North, and a billion for Yanacocha Sulfides over the next four maybe five years. That's about roughly I'll say on development capital. [indiscernible] and that's another important factor behind the -- we've got the primaries, we've got a steady $1 dollars in sustaining capital, steady $400 million combined between advanced projects and exploration, and roughly a steady $800 million to $1 billion in development capital in mine time. Our prime work that allow us to share excess cash to our shareholders.

Okay, that makes sense. So next year, those two main updates and then looking at Slide 9, any of the other sort of pre-feasibility type projects will move to the next stage?

Yes, I think the ones to keep in mind that will mean our project pipeline is what we don't show and is seeking a shaft at Turquoise Ridge around 38.5% of that, our [indiscernible] expansion which we earn 40% of that getting close to full fund, so there are a couple of other very important catalysts within the Newmont portfolio and then we will be continuing to optimize the three big mega projects will operate more at a norm. And we have to do one of those at one time, very end of that mix. So far more and overall on the second underground of Ahafo, Apensu moving underground Ahafo seems to layback [indiscernible] push through execution. And then Coffee, we’re just starting up a drilling program in calendar winter. And Coffee would be another potential Ahafo North type project that we could be bringing through the follow-on, we’ve got Tanami 2, Ahafo North, it’s Coffee a potential follow-on from that so plenty of activity happening in that feasibility study front.

Okay, that's clear. And the last one for me with the automation at Boddington due I think early next year what's the latest thoughts on how long you'd assess that for before you'd maybe look at other sites and rolling that out on other operations?

We don't need to do much assessing at the time relative further, I implemented the first autonomous mine in the Pilbara almost 10 years ago. So it is proven technology, there's no piloting or assessing, it's changing a fleet either, and it's going to be a business case. So once you went through the existing operations and you got to have enough log in front of you and a value proposition to change that obviously. Boddington presented that business case, so there has to be business case. And then just some, very important part of that statement is improving lives. And we're going to think about those communities in which we live and work and whether Autonomous Haulage is part of that equation when you think about some of the locations that we're in. So we'll continue to assess whether there's opportunities for Autonomous Surface Haulage there is plenty of opportunities for underground autonomous operation, and we're doing quite a bit of that already. So I expect to see more underground autonomous before another open pit. The real opportunity for us is to increase the value proposition around those mega projects with sort of pre-feasibility. When you have within your portfolio an autonomous operation, you can train and you will bolster [ph] in that operations and underpin a base case for those projects, too bigger risk to be doing your first radio with a sort of fall into a brand new project. So that's one of the strategic elements of that.

Our next question comes from Anita Soni with CIBC World Markets.

Thanks, guys. Thanks for taking my question I would want to delve a little bit further into Slide 9 and Slide 10, which was the capital and the projects? So I think you just mentioned that Coffee, you were talking about them in the context of Tanami and Ahafo North. So do I understand mean that the capital would be in the range of $700 million to $800 million? Is that what you trend out that way?

Not quite, Anita. I think it'd be a lower number. But I categorized by the two broad categories I have for projects are major and mega. For major project, anything $300 million, could be anything from $300 million up to $1 billion. And then mega project is anything greater than $1 billion, that's actually consistent from my experience with the projects, different way we implement those two types of projects. So Coffee is similar size to Ahafo North, more accountable, I'd say different place of the work. So --

So it's more along the range of like 250,000 ounces, 300,000 ounces rather than five.

Yes, yes.

Okay, all right. Second question. Just, I'm trying to understand this free cash flow profile that you have a little bit further. Not Included in there is the Ahafo North and Yanacocha Sulfides and obviously all the other projects that we've talked about, but what is included is Tanami which is an execution, right?

That's correct, Anita. So that's one of those projects moving to full fund. Then those projects will take some of the free cash flow that we're showing there, however that's only showing free cash flow from gold. It's not showing the free cash flow from the other metals, so that that challenge you read from both of those perspectives.

All right. But it does include the gold all that kicks in for those but I think was only kicked in around 2024, 2025 anyway, right?

Those projects are in the back-end -- back end of five years. But they are very important projects, I'm excited to be able to bring them forward and show you what those projects stood for production protocol and cost.

Okay. And then with respect to exploration, that's something that's I am just interested, looking at the exploration budget going forward next year, do you guys have an idea of whether or not they'll see the same increase? Or, what are you looking at this stage?

This is the time year-on-year [indiscernible] in exploration, Anita, 80% of that's being in Newmont, it’s been around conversions and extending lives.

Our next question comes from Mike Jalonen with Bank of America.

Hi, Tom, and everyone. So you intrigued me on the MR open pit Century project have gotten pretty quiet since the merger, it's coming back to life. What's changed from the prior owner was saying about Century versus smaller pits not moving any buildings. Just curious, what kind of tax rate could it be? Thanks.

Thanks Mike and we're really pleased with the question from you each quarter. Look forward to have a question from you each quarter. I will pass it over to Rob to give you some color on that.

Hey, Mike. Good morning. It really is the simplicity of it and the lack of complexity, to be honest, that obviously is an existing name that just needs to be watered, we've got a good geological model there, we can use the current plant infrastructure. And it also provides us with kind of 10, 11,12 years of mine life that allows us to further explore the bottom, the oil pond and the do orebodies. So it really was just a fairly simple value equation. And we just don't know the simplest road, but also the most value accretive road.

So where do you go from here with this project? I'm trying to get some numbers on some timeline?

We’re just doing the studies at the moment. And as that slides indicated is that we’re still at the early stages. So I would expect we'll be able to give you more of a timeline in next year, once we've progressed a bit more. But just kind of rule of thumb that we're expecting, it's going to be a three to four year kind of planning, preparation stage. And then we're expecting around the 12 year, 13 year kind of life at between 150,000 to 200,000 and scheme of things. So that's broad brush, but certainly make its early days, the team is working hard on at the moment to come up with suitable main designs and watching schedules and certainly in the New Year, we'll be able to provide more color.

Okay. And I guess that's turning to Oberon, I can't remember if that was discussed when we were at Tanami there in November, a couple of years ago. Maybe just remind me where that is and to set things pretty exciting.

Yes, Mike it’s again I wasn't on that tour, which I think might -- we have touched on it in terms of geological overview that Chris Robinson peaked, although we've done a pad or drilling since your update literally.

No, not one. But it literally is just a stone's throw away. It's less than 30 kilometers from the underground.

Hope you had a strong arm.

And certainly, there's a huge amount of synergies that we can get there. It is an open pit, but it's also got underground potential as well. So in terms of proximity, it’s very, very close, which allows us to potentially use the existing infrastructure. And that's certainly one that, the team is focused very hard on, as I mentioned that the drilling program, we've struggled this year because of COVID, not being allowed to drill on average on land. But we've got those approvals and hold for the right season where you can [indiscernible] pad again.

Our next question comes from Michael Dudas with Vertical Research Partners.

Yes, hi. Good afternoon every person and [indiscernible] everyone. Just maybe, you mentioned briefly about ESG in your prepared remarks, et cetera. Thinking about from the energy standpoint, when you're looking at your development projects, obviously you're probably really looking like, I've always looked them from the best environmental and social efforts from a development standpoint, but any queries or thoughts on less decarbonizing from that standpoint, or, are you looking into investments that you haven't talked about until the development work, that may lead towards some requirement versus to improve that metric from a currency standpoint?

Thanks, Michael. We're quoting what amount until our 2030 targets, but we're resetting out our mission targets both [indiscernible] but to a science base and we’re also providing an aspirational target for 2050. And because we've got a long line to follow, we can actually see after that far, and just talk about how we support the global community in terms of how we develop our projects and our operations. We have -- our portfolio had a natural move to underground mining. So as we move to more underground and open pit, we reduce both our emissions and intensity and carbon sizes, we look at where our power sources are coming from. But all that we can do to convert power and we’re pulling power off the grid, what the supplies are doing, how we can encourage supplies to, encourage conditioned intensity, for instance, in Ghana we supported installation of solar power cells that go into the grid as part of that, that process. And then if we're serious, then we need to be thinking about what we're doing with our investments to ensure that we’re around with it, we're reducing our emission intensity, so that is the move to more electric equipment. The move to autonomous haulage allow us to diesel fired trucks and you're more efficient, because the automation doesn't have the human element in terms of how our engines are operated. We then look at different fuel sources. We already apply a carbon price to some of our key investments $20 a ton and $40 a ton to assess what we do. Our full potential program, our full continuous improvement program, a key element of that is improving energy efficiency, which brings improve the cost, improve productivity, and reduce emissions. And we need to think about and that the industry needs to be part of the discussion around where are we putting our money, where our amount is with these targets and with our explorations and starting to develop technologies that can ultimately lead to a carbon neutral world and make the device we're having right now. I think if you want to be a leader in this industry, then you have to be demonstrating through your actions, the industry leadership. So we're having those debates and stay tuned we're going to talk about our new targets next month. And we continue to talk about how we can minimize in weeks and months beyond that.

So if I could just add just to build on that, Michael it's Dean Gehring, who leads our Technical Services also employing some key specialists in this domain. And we've got power and electricity specialists, which will really help us in terms of not only managing the current power that we're pulling from that, whether it's the stranded power or whether it's from the grid. But also working with the suppliers, as Tom said about the future, whether it's gas plants, solar plants, other type of electricity plants. So again, it isn't just where the targets is, we're actually building the teams that we need to do that work.

This concludes our question-and-answer session. And I would like to turn the call back over to Tom Palmer for any closing remarks.

Thank you operator and thank you everyone for joining us today. And please you and your families stay safe and well. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.