Newmont Corporation Q2 FY2025 earnings call

Red Chris Incident

• Two fall of ground incidents occurred at Red Chris, suspending operations. Focus is on safely recovering 3 teammates, restoring communications, and conducting an independent investigation. Lessons will be shared to strengthen safety programs.

Operational Performance

• Portfolio of gold and copper assets delivered a solid quarter with production in line with guidance. Core managed operations generated over 90% of the $1.7 billion free cash flow. Noncore asset divestment program completed with proceeds to support capital returns.

Key Priorities

• Strengthen safety culture, stabilize 11 managed operations, and execute on capital returns. Stabilization efforts are delivering tangible benefits across operations, with focus on productivity enhancements and cost structure improvements.

Cost and Capital Spend

• Cost applicable to sales and all-in sustaining costs in line with guidance. Sustaining capital spending is ~57% weighted to the second half, driven by deferrals and specific site activities. Development capital is 51% weighted to the second half, with projects like Ahafo North progressing towards commercial production, Tanami shaft works advancing, and Cadia's panel cave development ongoing.

Newmont's portfolio of world-class gold and copper assets delivered a strong quarter. They produced 1.5 million ounces of gold and 36,000 tonnes of copper, remaining in line with full-year guidance. Cash flow from operations after working capital was $2.4 billion, and quarterly free cash flow reached an all-time record of $1.7 billion, with over $1.5 billion (90%) generated by core managed operations. The noncore asset divestment program was successful, with expected $470 million in cash proceeds after taxes and commissions from the sale of shares in Greatland Gold and Discovery Silver, leading to an expected $3 billion in after-tax cash proceeds from divestments this year.

Newmont remains firmly on track to meet 2025 guidance. Second quarter results support this, with strong production, cash flow, and free cash flow. The Board approved an additional $3 billion share repurchase program, doubling total authorization to $6 billion. Production of 1.5 million ounces of gold and 36,000 tonnes of copper remained in line with full-year guidance. Adjusted EBITDA was $3 billion, and free cash flow was a record $1.7 billion.

• Red Chris fall of ground incident with ongoing risks to recovering the 3 teammates and restoring operations. Risks related to project execution, such as potential delays in Ahafo North commissioning or Tanami expansion, and commodity price fluctuations impacting financial results.

Q: Can I ask about your capital allocation priorities as it pertains to acquisitions?

A: Our focus is internal. Best use of capital is buying back Newmont stock. Copper exposure will come from organic growth like the Red Chris block cave project.

Q: On management changes and succession, any comments?

A: Karyn's departure is handled by interim team. Natascha's promotion to President and COO is a natural progression in leadership development.

Q: Focus on Cadia and Peñasquito production decline in third quarter?

A: Peñasquito moves into lower gold grades with higher silver, lead, and zinc; Cadia sees lower grades from panel caves but ramps up PC2-3. Production aligns with expected mine sequences.

Q: Lihir improvements and 2026 outlook?

A: Lihir has seen productivity improvements from water management and asset management, with continued work on stability and productivity for 2026.

Q: Cost containment trends and 2026 project updates?

A: Costs meeting guidance assumptions, with focus on productivity. 2026 business plan in progress, focusing on projects like Ahafo North commissioning and Tanami expansion.

Q: Red Chris details and capital spending shift?

A: Red Chris incident in decline area; capital spending shifted deliberately for asset integrity, ventilation, and seasonal works.

Q: Portfolio positions, Wafi-Golpu?

A: Noncore positions like Greatland Gold and Discovery Silver are managed, comfortable with Lundin Gold position, and actively negotiating Wafi-Golpu project.

Q: Nevada and Boddington productivity and cost?

A: Details on Nevada and Boddington productivity deferred to in-person discussions, but focus on asset management and productivity improvements.