Newmont Corporation (NYSE:NEM) Q2 2023 Earnings Call Transcript

Anita Soni: Okay. Thanks. I’ll leave it there. Thank you.

Tom Palmer: Anita, probably one other on Ahafo. We’ve got the — we’ve got the stars really lining up in terms of the real sweet spot in the Subika open pit as well as now having the third level of Subika underground open more than 20 draw points open. So we’ve got both the combination of high grades and tonnes coming out of open pit and underground at Ahafo. So it’s another important one to be thinking about as you think about second half of the year. But that’s certainly fourth quarter weighted as that comes through building through the third or the fourth quarter is a strong one at Ahafo with the stars lining up in both open and underground with mine sequences.

Anita Soni: Okay. Thank you very much.

Tom Palmer: Thanks, Anita.

Operator: Thank you. The next question goes to Mike Parkin of National Bank. Mike, please go ahead. Your line is open.

Mike Parkin: Yes, thanks. Can you just give a bit more color in terms of the background on pausing at Cerro Negro in mining? And does it have with what you’ve kind of investigated and decided on a go-forward basis, does it have any material impact on the cost structure of that asset going forward?

Tom Palmer: Good morning, Mike, certainly, absolutely no impact on cost structure going forward. It was from time to time, certainly, my experience and Rob’s experience you’ll get an event, and we had a significant potential event in the underground mine and involved a loader that we weren’t happy that we had the control environment in to be managing as the standard that we’d expect around — basically, it was a piece of equipment involved in an incident. It’s a remote mine. As you know, Cerro Negro is in a very remote part of Argentina and Patagonia. And we wanted to ensure that the standards that we expect, we’re clear across the four crews that were there and that we went through the underground mine and did the appropriate inspections to make sure that equipment and conditions underground were well understood.

You’re obviously working underground in a remote location. So it’s briefly important that we can be satisfied that the expectations are well understood and the conditions underground are well understood. We’re also entering into a second half, which is a step-up in both grade and tons. So we’re moving into a period of time where we’re going to be asking the team to step up and be working more fronts. So we took the time to ensure that conditions were clear and expectations were set. There’s nothing in terms of additional cost base. It’s more about just ensuring that the leaders at all levels and their mining teams are understanding the standards that we expect and that we can confidently move forward with mining what will be a strong second half at Cerro Negro.

Mike Parkin: Okay, great. So pretty much to sum up, it’s more kind of ensuring operational best practices of Newmont being executed at that site?

Tom Palmer: That’s right, Mike. We will do that from time-to-time in my experience. There are times when you must always maintain a chronic unease with safety, and there will be events that come from time-to-time and part of maintaining solid safety performance is recognizing when you may need to just pause and ensure everyone’s got their mind on the game, understand what’s expected and then move forward with confidence. And so that’s something we do from time-to-time. Certainly, Cerro Negro we cited that this needed a couple of weeks down. I’d expect as we do our integration planning for Newcrest and think about five new operations coming into our portfolio, think about the work we might do through November and December. That’s certainly one of the debates we’re having in terms of how do we ensure that the standards that we expect at Newmont are there in place in day one of those new crystal operations.