Newmont Corporation (NEM) Earnings Call Transcript & Summary

Good morning, everybody, and always a tough act to follow to go after Amar and really good presentation there, Amar. So hello, everyone, and thank you for having us here this morning. I wanted to share how Newmont has become a stronger, more focused business and how we are positioning the company to create enduring value through safe, reliable operations and project delivery, disciplined capital allocation from our world-class portfolio. Our focus is straightforward: operate safely and reliably, improve productivity, invest and deliver in highest return growth opportunities and return excess cash to our shareholders. These priorities support our ambition to lead in gold while building an organic growth engine in copper. Following my remarks today, Newmont recently appointed Chief Technical Officer, Dave Thornton, here on the stage, will join me to answer some questions with Matt. 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 as well. Newmont today is a fundamentally stronger business, uniquely positioned at the intersection of 3 powerful investment themes, a constructive gold market, the leverage offered by a high-quality gold equity and the ability to convert that leverage into sustainable per share value. While we are the world's largest gold producer, our investment case is about far more than scale. It is built on the quality and longevity of our portfolio, the strength of our bus sheet and a disciplined approach to capital allocation. Over the past several years, we have deliberately reshaped our business through the integration and rationalization of our portfolio, the strengthening of our balance sheet and embedding the operating discipline to perform consistently through the cycle. Equally important has been the strength and the continuity of the team. Many of the leaders who helped build today's portfolio and execute this transformation are the same leaders responsible for delivering the next phase of this value creation with clear ownership and a strong track record of execution. That progress is increasingly evident as our operational performance is driving record free cash flow, reliable delivery and its guidance and significant returns to our shareholders. Our path forward is grounded in a clear strategy and a focused set of priorities. First and always is safety and our commitment to making sure that everyone who walks through our guys on a daily basis go home safely. Second, we are continuously improving our operations by embedding efficiency across the business, improving consistency and productivity at site label and maintaining a strong focus on cost. Third, we are investing in the future by prioritizing the highest return opportunities in our portfolio, particularly those that extend mine lives, leveraging existing infrastructure and strengthening our production profile for decades to come. And finally, we are focused on translating the strength of our portfolio into lasting value for shareholders by improving the underlying economics of our business, maintaining a world-class balance sheet and returning excess cash through our consistent capital allocation framework. Over time, this disciplined approach increases the value generated by each share, allowing shareholders to benefit more fully from the cash flow, growth and long-term potential of Newmont's portfolio. Today, Newmont is the world's largest gold producer with an unrivaled portfolio of gold operations and gold copper projects located in many of the world's most favorable jurisdictions. What truly differentiates Newmont. however, it's not simply the scale of this portfolio, but the combination of quality, longevity and resilience that very few companies can match. Both on the side -- built on some of the world's base gold mines our portfolio supports a stable and resilient multi-decade production profile, unlike anything seen in the gold industry. When that foundation is combined with greater operational consistency, improved productivity and a continued focus on costs, it creates a powerful opportunity to generate value on a per share basis over time. This results in meaningful leverage to higher commodity prices, stronger margins and a robust free cash flow generation as reflected in the results we have already delivered through the first half of this year. Through the first 6 months of 2026, our operational performance combined with strong commodity prices and continued cost discipline, generated a record $5.3 billion of free cash flow. And as of our second quarter earnings call, we have returned of $4.6 billion to shareholders through quarterly dividends and ongoing share repurchases, translating the strength of our business into growing value on a per share basis. Additionally, our first half performance positions us well to achieve our full year 2026 guidance while maintaining a continuous focus on safe, consistent execution. I want to spend a minute on our capital allocation framework that I believe is a key differentiator for Newmont. It establishes a clear and disciplined order of priorities. We want to reinvest in our world-class portfolio. We want to maintain our resilient balance sheet and return excess cash to shareholders through ongoing share repurchases and a dividend designed to grow on a per share basis. As of our most recent earning calls, those repurchases have reduced our share count by more than 100 million shares or approximately 9%. As a result, each remaining share today represents ownership of a larger portion of Newman's earnings, free cash flow and long-term growth opportunities than it did at the beginning of the year. Importantly, the lowest share count also creates a pathway for dividend growth on a share per share basis, while maintaining the same targeted annual cash commitment. Price on the repurchases completed today, the formula and our framework would support a quarterly dividend of $0.27 per share at the next annual review, which would present an 8% increase since we introduced the enhanced framework only back in February this year. Ultimately, our capital allocation framework allows us to invest in the longevity and growth of our business. preserve balance sheet strength and provide shareholders with growing per share exposure to the value generated by our portfolio. In closing, Newmont has the portfolio. We have the team. We have the discipline to convert a constructive gold market into enduring shareholder value. Our focus remains on safe, reliable execution, continuous improvement and disciplined investment in the highest return opportunities. We are accountable for making the most of the resources entrusted to us and for unearthing value sustainably to advanced lives by executing with transparency, discipline and integrity, we will continue to earn our position as the gold equity of choice. With that, I will now join Dave and Matt on stage, and we'll hand over to some questions and answers.

Great. Thank you. That was a great overview. Sure -- maybe first question for you, Natasha. You formally started as CEO at the start of this year. but had a very good run up to it. We're executing on quite a bit late last year. We heard about some of those efforts at the Mining Forum last year. And you've got your executive team in place now. So Dave, congratulations on your appointment to Chief Technical Officer, but a busy year of change. And I'm wondering how you view Newmont right now. Is there still a transition, transformation underway at Newmont? Or has your focus evolved into running the current portfolio?

I think, Matt, it's such a good question. If we consider the journey that we've had up to today. We've really been able to transform the portfolio. The next level of transformation is going to be in ensuring that we execute on the underlying value in that portfolio. think very pleased with where we are with the 12 assets in our portfolio. Really pleased with the progress that we've made recently with our joint venture partners in Nevada with shade objectives, clearly cleaning the slide for us to in each and every one of our operations with -- that we manage ourselves or through our joint venture partners to really optimize the value. So I think the next transformation with a clean shot is -- clean sheet is going to be absolutely the focus on delivering.

And I think technical capabilities will play a role in that. So Dave, maybe you can tell us a bit about your background and what are you most excited about in this position?

Yes. Thanks, Matt. So been a background around me. I've been in the mining industry now for a bit over 25 years, had a range of different experiences, both in open pit and in underground mining. Joined Newmont a little over 10 years ago in our Nevada operations when Newmont had the Nevada operations, and then moved into roles looking after our African business unit, spent some time in Latin America, the Caribbean business unit and then more recently, looking after the Americas. What that's really enabled me to do is have a good understanding of the portfolio and really importantly, our important resource of our people and our teams and the capabilities we've got there. What I'm really excited about is thinking about how do we integrate the technical capability that's really strong in Newmont into our operations and projects to continue to improve the growth journey and the performance and value that we drive out of those assets. So a really exciting time for a new one.

And you mentioned the Nevada background. So maybe we'll jump into Nevada Gold Mines. A very important part of the Newmont portfolio. You recently reached an agreement with Barrick to modernize the joint venture. There are several significant development properties in. Can you take us through what the agreement means at a high level for Newmont shareholders? How does it position NGM to perform, realize its full potential?

Thanks, Matt. Nevada is a big portion of our portfolio and a really important asset in our portfolio. I think this modernized agreement that we have reached allows for the first time in the history of this district, unconstrained optimization of an integrated portfolio of assets in that district. I think it allows us to really leverage on the strength of Barrick, the strength that we have in Newmont to identify all of the near-, medium- and long-term options for -- and taking that portfolio or that district to its full potential. We've heard the Barrick team talk about it earlier, and we're truly excited to be part of that district and that partnership.

I consider Newmont fairly bless geologically. So I also want to pay attention to many of the other assets where you've been exploring and looking to add value. Can you go through parts of your business today, where you see some of the more exciting exploration opportunities, how that can contribute to mine lives or future value?

Yes. Perfect Matt. When we think about our exploration pipeline, it's really, really exciting. And I'll touch on 3 specific areas. This year, we're going to invest about $240 million into our exploration pipeline and 80% of that is focused on brownfields growth, which is really important to our scaling story. When we think about our Brucejack asset, which is up in British Columbia, previous to Newcrest or post Newcrest acquisition, we identified a new area called the dose zone, which is about 700 meters from existing infrastructure and we're really excited that, that has the potential to be equivalent to value of the king, which is what the basis of what Brucejack was built on. Similarly in Merian. We took a step back a couple of years ago. thought about what's the district potential within Merian that's continuing to grow more holes and put in the ground, the potential for that asset to significantly grow and potentially grow production to sort of double what we're currently seeing now is another example. And I'll finish off with the half South, where we've been operating in Ghana for a long period of time. We've got Sabajo that continues to be open at depth. We've got a pension underground. And so there are just some examples of brownfield targets that we've got across the exploration pipeline, which are very exciting.