ニューモント（NEM）2026年第3四半期決算説明会：19億ドルのフリーキャッシュフローとAISC見通しの低下

主なポイント

• ニューモントの2026年第3四半期における生産量は、金が約130万オンス、銅が2万3,000トン、銀が1,100万オンスとなりました。
• 同社は運転資本調整後の営業キャッシュフローとして28億ドル、フリーキャッシュフローとして19億ドルを創出しました。調整後純利益は1株あたり2.20ドルとなり、経営陣は第3四半期として過去最高記録であると説明しました。
• 第3四半期の金全維持コスト（AISC）は、副産物考慮後ベースで1オンスあたり1,454ドルでした。ニューモントは2026年のAISC見通しを1オンスあたり約1,520ドルに引き下げ、当初の見通しより約10%改善しました。
• 経営陣は、タナミ、セロ・ネグロ、アハフォ・ノース、リヒールにおける品位向上や操業拡大に支えられ、第4四半期の金生産量が140万オンスに達すると見込んでいます。
• ニューモントは、インフレや副産物クレジットの減少により単位コストの上昇が見込まれるものの、2027年のポートフォリオ全体の生産量は1桁台前半から半ばの割合で増加すると予想しています。
• 提案されているレッド・クリス（Red Chris）ブロックケーブ開発の推定資本支出は、100%所有ベースで42億ドルから48億ドルとなっています。取締役会の承認を得ることを前提に、2027年に建設を本格化させ、2033年の商業生産開始を目指しています。

主要財務データ

ニューモントは2026年最初の9ヶ月間で73億ドルのフリーキャッシュフローを創出し、これは2025年通年の創出額にほぼ匹敵します。同社は、年初来のフリーキャッシュフローの80%以上を株主に還元したと発表しました。

前回の決算発表以降、ニューモントは10月の4億5,000万ドル以上を含め、約16億ドルの自社株買いを実施しました。現在の枠組みのもとで約28億ドルが残っています。2024年2月以降、同社は発行済株式数の約10%に相当する1億1,500万株以上を取得しました。

事業および業績の動向

金の生産量は第2四半期と概ね同水準となったものの、銀の増産と銅の平均実現価格の上昇が単位コストの押し下げに寄与しました。経営陣は当四半期の業績について、ポートフォリオ全体での着実な施策実行と一部事業所における操業コストの削減によるものとしています。

タナミでは、第2拡張計画に向けた1.5キロメートルの立坑の建設が完了しました。機械設備の完全竣工は引き続き2026年末に予定されており、商業生産の開始は従来予想より早い2027年第2四半期末までに見込まれています。経営陣は、2028年中に同資産の操業度が過去の最高水準に向けて拡大していくと予想しています。

リヒールでは、9月に予定されていた保守点検による操業停止が計画通り完了しました。第4四半期にはより高品位の鉱石が得られる見通しです。アハフォ・ノースでは、操業拡大が続いており、高品位エリアへの移行が進んでいます。セロ・ネグロは、ベイン・ゾーン（Vein Zone）露天掘りでの採掘開始に加え、生産性と回収率の向上による恩恵を受ける見込みです。

また、ニューモントはヤナコチャにおいて既存のヒープリーチ能力を最適化することにより、少額の資本支出で追加の生産機会を特定しました。同社は、大がかりな資本投資を行うことなく、同資産の操業耐用年数を延長できる可能性があると述べています。

改定されたネバダ・ゴールド・マインズ合弁協定には、フォーマイルおよびファイバー・ラインの拠出が含まれています。ニューモントは取引が第4四半期に完了し、それに伴い19億5,000万ドルの支払いが行われると見込んでいます。

レッド・クリス ブロックケーブ

ニューモントはレッド・クリスの事業化調査を完了し、詳細設計の60%以上が完了しました。更新されたプロジェクト設計では、追加の地質工学的調査を取り入れ、初期ケーブの向きの変更と拡大を行い、計画処理能力を年間900万トンから1,500万トンへ引き上げました。

初期開発により、100%所有ベースで約13年間の鉱山寿命が支えられ、約300万オンスの金および85万トンの銅が生産される見込みです。本格操業開始後の年間生産量は以下のように試算されています。

• 金：27万5,000〜32万5,000オンス
• 銅：6万5,000〜8万5,000トン

ニューモントは、カナダ政府からの見込まれる助成金を含め、100%ベースでの開発資本支出を42億ドルから48億ドルと見積もっています。処理、資材運搬、および関連インフラに計画されている投資の約40%は、将来の拡張を支援することが期待されています。

経営陣による業績見通し

ニューモントは、2026年通年の生産量および資本支出の見通し達成に向けて順調に進んでいます。経営陣は、第4四半期の金生産量が140万オンスに増加し、年間で最も生産量が多い四半期になると見込んでいます。

通年の金AISCは現在、1オンスあたり約1,520ドルになると予想されており、これは2026年初に発表された見通しを約10%下回ります。ただし、維持的資本支出の計上時期、銀の副産物クレジットの減少、およびインフレ圧力により、第4四半期のAISCは1オンスあたり約1,900ドルに上昇する見込みです。

2027年について、経営陣は以下の事項を予想しています。

• 2026年比で、ポートフォリオ全体の総生産量が1桁台前半から半ばの割合で増加。
• マクロ経済的圧力および副産物クレジットの減少による単位コストの上昇。
• 維持的資本支出は2026年と概ね同水準。
• 開発資本支出は、主にレッド・クリスおよびリヒール沿岸バリア事業を反映し、2026年より約5億ドル増加。
• 開発資本支出の増加分のうち約2億ドルは、ヤナコチャの水処理プラントへの支出削減により相殺される見込み。年間効果は2028年以降、約4億ドルに達する見通し。

リスクおよび注視事項

エルニーニョ現象が11月から12月にかけて強まると予想されているため、ニューモントはリヒールにおける水不足のリスクを注視しています。経営陣は、気象の影響の時期や深刻度が第4四半期の生産量とコストに影響を与える可能性があると述べています。緩和策としては、節水、採掘済み鉱石の備蓄、および計画されていた保守点検の前倒しが挙げられます。

原油価格も引き続きコスト感応度の高い要因です。原油価格が1バレルあたり10ドル変動するごとに、ニューモントは直接的な燃料への影響を約6,000万ドル、化学薬品、爆薬、粉砕メディア、固定プラント投入資材および一部の外部委託サービスを通じた間接的な影響をさらに5,000万ドルと見込んでいます。

2027年の人件費の上昇率は、2026年に採用された約3%の前提を上回ると予想されています。それにもかかわらず経営陣は、離職率は適切に管理されており、ポートフォリオ全体で重大な人手不足は発生していないと述べました。

ペニャスキト（Peñasquito）における銀生産量は、第4四半期には第3四半期水準の約半分に減少する見込みです。2027年については、計画的な採掘順序（マインシーケンシング）により2026年を約30%下回る見込みであり、副産物クレジットの減少につながります。

アナリスト質疑応答の要点

• レッド・クリスの資本およびリターン：経営陣は、インフレやインフラ投資の約40%が将来のケーブ展開に活用できるとしても、初期資本コストを100%負担したうえで、同プロジェクトが単体として魅力的な経済性を生み出さなければならないと説明しました。ニューモントは、該当する国別の割引率を上回る2桁の内部収益率を見込んでいます。
• レッド・クリスの支出プロファイル：2027年の開発資本支出における予想増加額5億ドルのうち、約半数がレッド・クリスに関連するものです。最終投資決定を待つ間、経営陣は投資家が概ね定額的な支出ペースを想定できると述べました。
• ヤナコチャの拡張の機会：ニューモントは、既存のヒープリーチ能力を最適化することにより、露天掘りによる追加の産出量を評価しています。経営陣はこれらを、短期的に実現可能で資本支出が少ない機会と位置付けています。
• タナミの経済性：立坑の拡張により、坑内での資材移動と生産性が向上する見込みです。その効果は2027年のランプアップ期から現れ始め、2028年には操業上の全面的な効果が顕在化すると期待されています。
• リヒールの水管理：水資源の制約によって処理工程が制限されたとしても、採掘および備蓄は継続可能です。経営陣は、プラントの信頼性向上により、環境が正常化すれば遅れを取り戻す能力を確保できると考えています。
• 埋蔵量および鉱物資源量：ニューモントは通常、金価格の過去3年間平均を基準として使用します。経営陣は、2026年末の埋蔵量・資源量評価プロセスにおいて金価格の前提条件がいくらか引き上げられると見込んでいますが、最終的な数値は引き続き検討中であるとしています。

決算説明会 文字起こし全文

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, and welcome to Newmont's Third Quarter 2026 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Newmont's Group Head of Treasury and Investor Relations, Neil Backhouse. Please go ahead.

Neil Backhouse

Thank you, Rebecca. Hello, everyone, and thank you for joining Newmont's Third Quarter 2026 Earnings Call. Joining me today are Natascha Viljoen, our President and Chief Executive Officer; Brian Tabolt, our Executive Vice President and Chief Financial Officer; as well as other members of our management team who will be available to answer questions at the end of the call.

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. With that, I'll turn the call over to Natascha.

Natascha Viljoen

Thank you, Neil, and hello, everyone. Newmont delivered a stable third quarter, demonstrating the quality, resilience and value generation capacity of our world-class portfolio. Robust safety and operational performance, disciplined cost management and higher silver production with realized prices enabled us to improve our full year cost guidance while remaining firmly on track to achieve our production, capital and other guidance metrics.

I want to start with our operational performance. In the third quarter, Newmont safely produced approximately 1.3 million ounces of gold, 23,000 tonnes of copper and a notable 11 million ounces of silver. As we indicated last quarter, gold production was broadly in line with the second quarter and reflected strong execution across the portfolio. This operational performance translated into strong financial results including $1.9 billion of free cash flow and an adjusted net income of $2.20 per share, representing a third quarter record. This strong cash generation continues to support our balanced approach to capital allocation.

Since our last earnings call, we have returned approximately $1.9 billion to shareholders through our quarterly dividend and ongoing share repurchases. I'm also pleased to share that we have now repurchased more than 115 million shares representing approximately 10% of shares outstanding since launching the repurchase program in February 2024. Beyond our safe operational and financial performance, we achieved several important milestones this quarter. First, we announced an amended joint venture agreement for Nevada Gold Mines under which the previously excluded 4 mile, fiber line and my properties will be contributed.

We are very pleased with the outcome of this agreement, which aligns the interest of both partners and positions us to maximize the value of one of the world's premier gold districts. We continue to work collaboratively with our partner and expect to close the transaction during the fourth quarter. At Lihir, we slightly completed the planned September shutdown on schedule and according to plan. We continue to expect higher grade ore in the fourth quarter as planned. And finally, at request, we are finalizing the feasibility study for the Block Cave project and continue to advance toward a full funds decision early next year, and I will provide more detail a little bit later.

As we move beyond the production trough previously indicated for in 2026, we expect production growth to begin in 2027. Looking further ahead, our portfolio of operating assets projects in execution and future development opportunities, position Newmont to grow and sustain production for decades to come. Supporting both our near-term production growth and longer-term outlook is the progress we continue to make advancing our projects across the portfolio.

In the third quarter, we continued to advance our development pipeline achieving key milestones across multiple projects, most notably at the second expansion at Tanami -- we have now completed construction on the 1.5 kilometer shaft. We remain on track for full mechanical completion by the end of this year, and our focus will shift towards commissioning as we move into 2027. We now expect commercial production by the end of the second quarter of 2027, earlier than previously anticipated with ramp-up activities continuing to the end of the year.

At [indiscernible], we remain on track for completion by the end of this year with a final draw bell fired in September. This represents an important milestone as we begin transitioning activities from the project teams to operations. At PC1-2 cave establishment activities continue to advance on schedule and we are pleased to report that the key regulatory approvals and associated requirements following the April seismic event have been achieved, allowing the project to continue advancing towards cave establishment.

The 2 water treating plants at Yanacocha are progressing well and are approaching mechanical completion with commissioning activities underway. As these projects advance towards completion in 2027 closure spending is expected to be approximately $200 million lower in 2027 and $400 million lower in 2028 compared with 2026 levels. As this cash flow becomes available, it will be reallocated to growth, partially offsetting an increase in development capital as we continue to invest in future projects and opportunities across our portfolio that generates the highest returns.

These project milestones reinforce our confidence in Newmont's proven ability to execute large, complex projects across jurisdictions, safely responsibly and on schedule. With this capability and confidence, we are advancing the Red Chris block cave project. a fully permitted, shovel-ready gold copper development in British Columbia's Golden Triangle and the next major reinvestment in our business, directly supporting our strategy to lead in gold and grow in copper. With the full funds decision anticipated early next year, Red Chris is positioned to deliver long-term production in 1 of the industry's premier mining jurisdictions. Red Chris is a multiphase project anchored by an endowment that supports 70 years of mine life. It represents a rare combination of scale, quality and growth. located within a highly prospective [indiscernible] free district. With all our regulatory and consent base approvals already implies, it benefits from strong partnerships with Atalan Nation. -- and support from both provincial and federal governments, demonstrated by the government of Canada's announcement of CAD 500 million of funding for the project. recognizing its importance to Canada's critical mineral strategy.

This established support creates a stable and predictable environment for investment. -- and reinforces our confidence in the long-term opportunity at Refrest and the broader golden triangle. The block out development will leverage Newmont's extensive experience developing and operating large-scale block cave mines, supported by an established team with over 150 years of combined Block have experience. It's important to note that while the initial phase Macrobond represents less than 20% of potential mine life at Red Chris, approximately 40% of the planned investment in processing facilities material handling systems and other key infrastructure is expected to support future expansions. This foundation positions Red Chris to evolve into an increasingly meaningful contributor to Newmont's future production profile and a significant driver of shareholder value over time.

We continue to refine and validate the underlying assumptions and execution plan with a clear focus on ensuring the Red Chris blockade project meets our investment criteria and project execution standards. While final review and governance work remains underway, I'm encouraged by the project economics and the value this operation can create for Newmont. We have completed a rigorous feasibility study and advanced engineering beyond 60%, resulting in an optimized mine design that improves metal recovery and incorporates geotechnical learnings, execution and long-term operational experience into our plan.

Based on results from the feasibility study and subject to board approval, Construction for the project is anticipated to ramp up in 2027 with commercial production targeted for 2033. This builds upon the early works that have already advanced, the mine decline conveyed to service decline and ventilation raise boring. The initial development is expected to support a mine life of approximately 13 years, producing approximately 3 million ounces of gold and 850,000 tonnes of copper on a 100% basis over this period.

Following ramp-up, we expect Red Chris to produce an estimated 275,000 to 325,000 ounces of gold annually, along with 65,000 to 85,000 tonnes of copper per year, highlighting the quality of the initial cave. We currently estimate development capital to be between USD 4.2 billion and USD 4.8 billion, which is equivalent to CAD 5.6 million and CAD 6.4 billion. on a 100% basis and includes the benefit from the anticipated grant from the Canadian government. This estimate reflects the latest development plan, updated productivity assumptions current market inputs and a mature understanding of the infrastructure, development sequence, capital requirements and operating profile required to successfully deliver the project.

Supported by a robust technical plan and refined execution strategy, we believe Reis is well positioned to meet our investment criteria. As we move towards a final investment decision, I want to spend a moment to reflect on the principles that will guide that decision. Regardless of the source of growth, we're advancing the next phase of an existing operation, evaluating an organic development project, or assessing any potential inorganic opportunity, every investment must compete for capital and satisfy 3 criteria.

First, the opportunity must be a strategic fit for Newmont. We prioritize investments that reinforce our position as the world's leading gold company while supporting organic growth in copper. We look for opportunities that strengthen our presence in attractive mining jurisdictions and leverage our deep technical expertise, capabilities, extensive infrastructure and established partner relationships. Secondly, we invest -- the investment must ensure the quality of the portfolio. We focus on opportunities that support durable production profiles, typically with mine lives of 10 years or more. improved free cash flow generation, increased resilience through the commodity cycles and strengthen the portfolio's overall cost competitiveness. And finally, the economics must be compelling and supported by a high degree of technical maturity, project execution capability and a clear development plan.

We expect projects to remain competitive across a range of planning assumptions and commodity price environments while generating a double-digit internal rate of return that exceeds the applicable country-specific discount right. The initial phase at Red Chris is an example of this approach in action. It aligns with our strategy, enhances the quality and longevity of our portfolio and delivers compelling returns while meeting the same rigorous standards we apply to every investment before capital is allocated.

With that, I will turn it over to Brian for an update on our third quarter financial performance and outlook for the rest of the year.

Brian Tabolt

Thank you, Natascha, and hello, everyone. Newmont delivered another quarter of robust financial results, supported by stable operational performance, disciplined cost management and continued execution across our portfolio. We realized an average gold price of $4,317 per ounce, generated $2.8 billion of cash flow from operations after working capital and delivered $1.9 billion of free cash flow. Through the first 9 months of the year, we have generated $7.3 billion of free cash flow, which is approximately the total amount generated in 2025 and with our strongest production quarter yet to come, reflecting our continued ability to convert strong operational execution into meaningful cash generation and shareholder value.

This strong cash flow continues to underpin our capital allocation framework, enabling us to return more than 80% of free cash flow to shareholders year-to-date while making meaningful reinvestment back into the business and maintaining a strong balance sheet. For the quarter, we also generated $4 billion of adjusted EBITDA and reported adjusted net income of $2.20 per share. As we noted on our last call, the working capital benefit realized in the second quarter partially unwound during the third quarter, reflecting normal timing-related working capital movements across the business.

Turning to costs. Gold all-in sustaining costs were $1,454 per ounce on a byproduct basis. Unit costs improved sequentially from the second quarter, primarily reflecting higher gold and co-product volumes, including 11 million ounces of silver production, stronger realized copper prices and lower operating costs at certain operations across the portfolio.

Turning now to our capital allocation priorities. We continue to apply the capital allocation framework introduced earlier this year consistently, balancing reinvestment in our World Cup class portfolio, financial flexibility, and the return of excess cash to shareholders. Beginning with sustaining capital, we spent $525 million in the third quarter as we continue to reinvest in the business to support safe production and sustainable free cash flow generation.

Turning to our sustainable cash dividend. Our framework targets an annual cash dividend of approximately $1.1 billion, paid quarterly. And in the third quarter, we declared a dividend of $0.26 per share. We also continue to invest in development capital, spending $354 million to advance the highest return opportunities within our deep organic growth pipeline. At the same time, we remain committed to maintaining a flexible and resilient balance sheet, anchored by our net cash target of $1 billion, plus or minus $2 billion.

This range provides the flexibility to manage through commodity price cycles while continuing to invest in the business and return capital to shareholders. We ended the quarter with a net cash balance of $3.2 billion, which is modestly above the upper end of our target range. It's important to note that this balance does not yet reflect the anticipated $1.95 billion payment associated with the amended Nevada Gold Mines joint venture agreement, which we expect to close in the fourth quarter.

And finally, once these priorities have been met, excess cash is allocated to ongoing share repurchases. Since our last earnings call, we have repurchased approximately $1.6 billion of shares under the $6 billion share repurchase program authorized by the Board in April. This includes more than $450 million of shares repurchased in October to date, leaving approximately $2.8 billion remaining under the current authorization.

Our approach to repurchasing shares over time is already having a meaningful impact. And as Natascha mentioned earlier, since we began executing our repurchase programs in February of 2024, we have reduced our share count by more than 115 million shares or approximately 10% of shares outstanding. And as I mentioned last quarter, based on the repurchases completed to date, the formula under our framework would support a quarterly dividend of $0.27 per share at the next annual review, while maintaining the same targeted annual cash commitment. Any increase would remain subject to approval and declaration by the Board as part of its annual review next February, but we continue to execute the program consistently, reflecting our conviction that Newlon shares continue to represent an attractive long-term investment opportunity.

Turning to guidance. As we look to the remainder of 2026, we remain well on track to achieve our full year production guidance. Production is expected to increase in the fourth quarter to 1.4 million ounces, making it our strongest quarter of the year, driven primarily by 4 of our managed operations. At Tanami, as we begin to access higher grade stopes. At Cerro Negro with the start of mining at the Vein Zone open pit as well as continued productivity improvements and recoveries. At Ahafo North, as the operation continues to ramp up to full production rates and at Lihir as we begin to access higher grade ore as planned following the September maintenance shutdown.

I do want to call out that while we continue to expect Lihir to be a strong contributor in the fourth quarter, we are closely monitoring potential water impacts as a result of El Nino conditions which are forecast to strengthen through November and December before beginning to ease in the first quarter of next year. We are actively managing the operation with these conditions in mind and working to mitigate with water conservation efforts. Though the timing and severity of weather impacts could influence production and cost during the quarter.

Turning to costs, continued operational execution, disciplined cost management and stronger realized prices for copper, silver and other coproducts have enabled us to improve our full year cost outlook and now expect gold all-in sustaining costs of approximately $1,520 per ounce, representing an improvement of approximately 10% relative to the guidance we provided at the beginning of the year.

While we continue to expect fourth quarter all-in sustaining costs to be the highest of the year at approximately $1,900 per ounce, our improved full year outlook reflects the strength of our year-to-date performance, and provides increased confidence in our ability to manage costs within our control. The fourth quarter cost profile primarily reflects the planned timing of sustaining capital spend, lower co-product credits as silver production at Penasquito declines to approximately half of third quarter levels and ongoing inflationary pressures, including fuel-related impacts.

With these evolving fuel-related considerations, we have enhanced our oil price sensitivity disclosure, which can be found in the appendix of our presentation. In addition to the approximate $60 million impact from direct fuel consumption, we estimate a further additional approximate $50 million impact that key consumables and inputs for every $10 per barrel change in oil prices, providing a more comprehensive view of the potential cost impacts across our business.

Finally, sustaining and development capital are expected to be the highest in the fourth quarter, keeping us on track to achieve our full year capital guidance expectations. Looking beyond the current year, we expect total portfolio production in 2027 to increase by a low to mid-single-digit percentage compared with 2026.

Within our managed portfolio, the principal drivers include higher grade at Lihir and Boddington supported by planned mine sequencing and the completion of the waste stripping campaign at Boddington this year, additional ounces from Tanami, with the second expansion progressing well towards commercial production, incremental ounces at Cerro Negro through the introduction of ore feed from the Vein Zone open pit and at Yanacocha, continued operational success is supporting the evaluation of additional low-cost ounces in 2027 and potentially beyond.

Together, these contributions provide a clear line of sight to production growth beginning in 2027. Shifting to costs. The fourth quarter profile provides an early indication of several external factors that we continue to monitor and are currently expecting to carry into next year. ultimately impacting our anticipated 2027 cost estimates. Based on current conditions, we anticipate unit cost to trend higher next year, reflecting macroeconomic headwinds and lower co-product credits, primarily from reduced silver production at Penasquito where output is expected to be roughly 30% lower than 2026 levels due to planned mine sequencing.

While these factors create a more challenging cost environment, we remain focused on rigorous cost discipline, productivity improvements and performance excellence across the business, ensuring we continue to actively manage the costs that are within our control. Looking at capital investment for next year. Sustaining capital is expected to remain largely in line with 2026 levels as we continue investing in the long-term reliability and performance of our world-class portfolio of operations. We now expect development capital in 2027 to be approximately $500 million higher than 2026, primarily reflecting planned investment in the Red Chris Block Cave project, subject to Board approval and continued advancement of the Lihir nearshore barrier project.

Importantly, as Natasha mentioned, approximately $200 million of the increase in development capital spend in 2027 is expected to be offset by cash flow becoming available as spending on the Yanacocha water treatment plants declines. As the project reaches completion, this benefit is expected to increase to approximately $400 million annually beginning in 2028.

Taken together, these preliminary indications reflect the portfolio positioned for a return to production growth in 2027, supported by continued operating discipline and selective investment in our highest return opportunities.

With that, I'll turn the call back to Natascha for closing remarks.

Natascha Viljoen

Thank you, Brian. In closing, our third quarter results demonstrate the strength of Newmont's world-class portfolio and the consistency of execution across our business. We remain firmly on track to achieve our 2026 production capital and improved cost guidance, supported by strong operational performance, disciplined cost management and continued free cash flow generation. The strength of our portfolio allows us to simultaneously reinvesting the business, maintain a resilient balance sheet and return significant capital to shareholders through our capital allocation framework, which continues to deliver value through a predictable dividend and ongoing share repurchases.

Looking ahead, we are entering an exciting period for Newmont with a clear strategy, leading in gold and growing in copper, supported by our world-class portfolio, deep technical expertise and proven project delivery capabilities, we are well positioned to deliver production growth beginning in 2027, generate substantial free cash flow, create additional scale for decades to come and continue increasing value for shareholders on a per share basis.

And with that, we look forward to your questions.

Operator

[Operator Instructions] Your first question comes from Daniel Major with UBS. Daniel, please go ahead.

質疑応答

Daniel Major

Congratulations on a good set of numbers and no curve balls from the '27 guidance that I can see. But yes, I guess the first 1 -- just looking at the Red Chris, Red Chris project and the preliminary preliminary details that you've given. Can you give provide just a little bit more detail on the scope changes that you talked to sort of the first part. And then secondly, you talked to this as being the first sort of phase that is the foundation for further expansions. Can you also just provide a little bit more color about what that kind of would entail and the potential time frame around that?

Natascha Viljoen

Thank you, Daniel, and some really, really good questions. So I think it's firstly important to recognize that this project now is for the first time on a technical and commercial level fully on a right feasibility study level. So as we think about scope changes, it's important to also think about the technical executability and long-term sustainability of the project. So the scope changes certainly included our increase and improved understanding of geotechnical realities. It allowed us to make sure that the positioning and the design of the cave plus the operational infrastructure and materials handling is appropriately positioned in areas that can be supported in the long term, and that does allow for long-term productivity -- high levels of productivity to support the low-cost expectations of this project.

Secondly, we see increased throughput through the plant that allows us for higher yearly [indiscernible] throughput and then associated with the right timings capacity. So those are the major changes. We have been also made sure that from a project execution point of view, that we reflect current and demonstrated development performance as well as really current rights for that development.

Then if we look at the future of this endowment, Daniel, on Slide 5, you will see that we've clearly marked out the first macro block 1 and 2. My apologies, I think it might be Slide 6, slide 5, I thought I had the wrong number here for a minute. I want you to firstly look at both the East and West expansion of the ore body. And you will see that macro block 1 and 2 is positioned in a very small portion of what we currently see as our endowment. Our endowment includes everything from our East reach to the Far West and does not include any exploration potential further to the east and the west as body, the ore bodies still open to the east and the west.

So the 70 years that we're talking about is within the context of what you can see on this slide. The next expansion would be logical to go into MBI and then East reach after that. Those development project development valuations is underway as we speak. And as we bring them to a more mature phase, we will certainly be able to share more information.

I think I might just add and remind you that 40% of the capital that we're spending now will be capital that would be appropriate for further extensions into Macro Block 3 and East reach.

Daniel Major

Okay. So just to clarify on that, when you say 40% of capital, do you mean mine development capital rather than surface infrastructure.

Natascha Viljoen

No, it would be between service infrastructure and underground materials handling infrastructure that would be reused for future expansions. .

Daniel Major

Okay. That's clear. And second question, and thanks for the color on the drivers of the sort of production into next year. Could you provide a bit more color on the expectations around Yanacocha. Obviously, production is coming off, but it appears that's continued to contribute more than you previously guided. Can you give us some -- just an update on how you see that both 2027 and beyond?

Natascha Viljoen

Daniel, first, I think it's important to bring us back to the asset reviews that we have done that allowed us to stand back and unconstrained look at every asset. Yanacocha has benefited from that process in that as we had an unconstrained view on the potential of the asset, definitely supported by a change in in gold price assumptions and then aligning with our near term to brownfields opportunities. Looking for low capital near-term projects that can increase our production. Also important, we always look at natural constraints in the value or in the system. So typically looking at signings dams and process capacity in this case, it would be heap leach capacity. So really optimizing what we have in terms of heap leach capacity, no material capital investment, opened up additional opportunities in the open pit that we will be exploring to extend the life of that asset.

Operator

Your next question comes from the line of Fahad Tariq with Jefferies. .

Fahad Tariq

I wanted to ask a little bit more about the indirect impact of the oil prices and thanks for providing that sensitivity. Can you just clarify whether that includes any impact on labor cost inflation?

Brian Tabolt

Yes. Fahad, No, it does not. The primary impact associated with the indirect impacts that we've incorporated in that $50 million is associated with chemicals. -- explosives, grinding media, fixed plant, a bit of the contracted services in terms of how those dynamics flow through contracted services. But in terms of the primary employee base, that's not included as part of the labor assumption.

Fahad Tariq

Okay. And then just my follow-up question. What are you seeing in terms of labor cost inflation? And if you can maybe speak to -- we've heard about labor market tightness, particularly in Nevada and Western Australia. Maybe just comment on what you're seeing there in terms of availability.

Brian Tabolt

Yes. I mean I think in terms of labor cost assumption, -- we are looking at a general escalation across the organization that will exceed our 2026 assumption, which was about 3%. And -- so I think that, that's probably a good place to start grounding in terms of just general costs in terms of inflationary pressures. And I think a lot of us are all monitoring the general cost environment -- and I think a recognition in showing the indirect impacts of oil is a bit of a recognition that we are seeing a bit more of that stickiness associated with diesel prices and not just the oil price, but also the crack spread in terms of how that's impacting diesel and how that's flowing through the inflationary dynamic across the economy.

I think also with regards to costs, there are other dynamics that we're monitoring as it relates to the Australian dollar and the continued royalty sensitivity is driven by gold price, but in terms of labor cost itself, I think that the indicator right now would be that more general inflationary environment, and we're continuing to monitor it. Natasha, I don't know think additionally you might add in terms of availability of labor across the business?

Natascha Viljoen

Thanks, Brian. Fahad, generally, we know that the industry is always looking for technical capabilities. So technical capability is certainly the first area that we're always very careful around talent management and attracting retention of good technical capability. If I look at across our business, our labor turnover is within good control and we don't, by and large, see any major labor shortages

Operator

Your next question comes from the line of Richard Garchitorena with Barclays.

Richard Garchitorena

My first question is on the Tanami Q2 completion in the first half of next year now expected. I'm just wondering how that -- you expect that to impact so cash costs through the 27? And how should we think about that benefiting 27, 28?

Natascha Viljoen

Thank you, Richard. And a really good question. We're really pleased with the progress that the team has made at completing the shaft and the the infrastructure around the shaft. As we go into commercial production next year, we'll start to see opportunities to open up and develop the areas at depth. It will have a material positive impact in our ability to move all out of underground.

As we ramp up '27, we could expect to see Tanami going back to previous performance into 2028. So I think it's important we'll definitely start to see an impact immediately, but we'll see the full impact as we ramp that asset back up to expected production.

Brian Tabolt

And Richard, I might just add to Natasha's comments as it relates to cash costs. We're not in a position at this point to provide cost -- site-level cost guidance. but I would direct you to the general macroeconomic comments that I had both in the prepared remarks as well as the previous response.

Peter Toth

Yes. I think that's important. -- we'd be net of cash flow economic, but certainly from a productivity point of view, we'll see that come through.

Richard Garchitorena

And then on Red Chris, the CapEx guidance. Can you talk about how we should think about that flowing through over the next 6 years of development? I know you raised your CapEx -- development CapEx expectations for '27 by $500 million. How much is Red Chris a part of that? And then will it be fairly linear as you develop the mine or is more lumpy to go forward?

Natascha Viljoen

Thanks, Richard. I think, firstly, 50% of the expected increase is associated with Red Chris. We certainly have other projects like our Lihir [indiscernible] barrier that is also included in that capital increase, which is also really value accretive project for us.

Until we give more color around the project, assuming FID early next year. I think it's safe for you to assume a linear [indiscernible] spend profile. But certainly, we'll be able to give you more color, more color with FID in February.

Operator

Your next question comes from Tanya Jakusconek with Scotiabank.

Tanya Jakusconek

Great. Natasha, I just wanted to go back to Red Chris and trying to reconcile some of the differences of the new crust feasibility -- prefeas and your feasibility study. I'm just trying to understand, you said that the processing facility is larger. Can you remind me what size your thinking and how much larger that was than crested Also, when you think about the ore body itself, are you looking at more caves than they originally had anticipated? Just trying to figure out discrepancy between the 2 capital.

Natascha Viljoen

Yes. Tania, I'll probably cover a touch on a couple of things, and thank you for that question because I think that's -- that is probably top of mind. Firstly, you've pointed out that the numbers that's available was pre-feasibility study, and this is now a fully really well-developed full feasibility study with at least 60% of engineering completed. We have in some of our packages much higher levels of engineering completed. I think, firstly, important learnings for us as I think, between 2021, 2022 and where we are today. The first learning was certainly around the geotechnical realities around that ore body. We have been able to improve our understanding of [indiscernible] that has resulted in changing quite material changes in support, underground support, also major cavities, the support for major cities.

It allowed us to reorientate the cave. The cave is now larger, and it's also orientated to prevent any intersection with major fault lines. We have been thoughtful on where we position underground infrastructure, both in terms of materials, [indiscernible] and material, broader materials handling. -- to ensure that it is in more competent areas in underground actually ensuring for long-term sustainability of the use of that infrastructure. So if you just look at what -- to ensure stable infrastructure underground in a cave that's not impacted by geotechnical structures that would certainly be the first element.

The second element is we will go from 9 million tonnes per year to 15 million tonnes per year. in the processing plant. And that has not been -- that was not part of the original study. I think the last element that I'll touch on as 3 mine elements is we have now got proven development rights as well as cost to ensure that as we think about our capital estimates that we have financial and cost -- and the financials and cost assumptions are robust. -- as we've developed that the economics around the project.

Tanya Jakusconek

So if I was to think of those 3 points that you mentioned, so all of the geotech 1 of the larger processing facility. And then thirdly, on the inflation, I guess, I should say, inflation at the present day costing versus I think it's about 6 years old or thereabout, I forget how long ago that was 5, 6 years. How would you take that? Like would you say it's 1/3 each? Or how would you take these 3 categories and allocate the discrepancy? .

Natascha Viljoen

I think what I -- Tanya,I think the level of detail that we can give you at this side, I'm going to limit it to that because we continue to -- and as we said in the prepared remarks, we continue to ensure that we understand that we regain our underlying assumptions. We are currently going through our technical review, our financial review. And when we get it through to FID will be able to give you more detail. .

Tanya Jakusconek

Okay. And any change in the ore body itself, like when you looked at it from a caving standpoint, besides the geotechnical or did you extend additional caves beyond what they had.

Natascha Viljoen

No. I think the as the major changes the orientation of Macro Block 1 and then as we continue the work on the extended ore body, we'll continue to develop our thinking there.

Operator

Your next question comes from the line of Hugo Nicolaci with Goldman Sachs.

Hugo Nicolaci

Congrats on continuing to deliver in a not so easy operating environment. Firstly, on Lihir, I just wanted to dig into your comments on the potential for an El Nino impact to water availability at site. In the release, you talked the potential risks in the fourth quarter this year. But can you just give me more detail around where you see the potential for water availability into next year, just given the Lihir is 1 of the key drivers of production growth and what you're doing to mitigate that risk there?

Natascha Viljoen

Yes, thank you. And hello, Hugo, A really good question. So firstly, important to note that we have not been impacted yet. It is something that we are closely monitoring due to just our normal water storage areas. I think it's important to note that we -- the expectation is for El Nino to increase and get the harsh towards the end of the year. and probably we'll see less of that going into the new year. A couple of priorities for us here. Firstly, on the Lear Island, the communities are reliant on us for water distribution. So that will be, without a doubt, our first priority.

Secondly, not all of our operations will be impacted by water shortage if we get there. we will be able to continue to mine and stockpile material that will enable us to continue to build stockpile, do blending and be ready for a consistent and blended feed into the plant. The team is also looking at if we -- if that is the case, that we can bring maintenance forward from next year to allow us then to run more consistently. So my view on this is normally when you lose volume when you lose mining, that's hard to catch up. But as long as mining is done and we get that onto stockpiles, you have a fairly good chance of making up that volume.

In addition, we've also seen Lihir continuing to improve its throughput through the plant, with the work that the team has been doing on reliability of the plant, we've seen increased reliability and consistency of throughput. So we will be -- we believe that we will have a level of catch-up capacity through the plant.

I think I probably just want to -- a little bit more of a broader context also remind you that the benefit of having a portfolio of assets is that not all of the assets are constrained with the same headwinds. And if you consider this year, we had Boddington bush fires. We had Tanami bush fires. We had seismic events at Cadia. We had a number of headwinds, but with the benefit of a global portfolio we do have opportunity to offset certain headwinds

Hugo Nicolaci

Great. That's helpful color. And then sort of dusting nicely into my second question then good to see [indiscernible] have resumed, but this is maybe added sort of 6 months or so delay to timing to ramping that up later this decade. On your point around that portfolio flexibility, how do you just talk to where that flexibility might be to continue to support the group getting back to that 6 million-ounce target and where flexibility Acadia might be to catch up some of that timing? .

Natascha Viljoen

So you go, firstly, as we've worked through the rehabilitation work, the agreement with the regulator, -- we have been, and I think we've commented this on in previous sessions that we are working to mitigate any potential impact on the project, and we have actually been able to do that. So as I said in my prepared remarks, PC1-2 is on schedule. We are back with the development and at least up to the point that we get to hydraulic [indiscernible]. I think that's just from PC1-2 point-of view and PC2-3 on track, as I've commented on. So those 2 projects are well in hand.

If we look a little bit longer term on how we build back to our our 6 million ounces. I think with Brian in his prepared remarks, did touch on Q4. I'll probably just touch on a little bit longer dated. Lihir, we are starting to move into high ride areas as we've committed to do. We've completed the engineering engineered wall at Phase 2, and we're also going into a different phase, Phase 19, all with higher grade. Boddington, as we've committed to, has completed its stripping and additional pushbacks Boddington is in hybrid areas and Tanami will go into hybrid areas as well.

On a previous question, I've commented on Yanacocha and the additional be opportunities that we see at Yanacocha. And lastly, -- we'll start to see [indiscernible], the Cerro Negro expansion project as well as [indiscernible], the open pit that we're starting to -- that we still -- we opened and we actually intersected some early low-grade ore reading. We'll see that coming through.

And then on our non-managed partners, both in NGM PV and [indiscernible] an indication -- indicated growth that we are assuming the forecast as well. So I think we are well set up to build back to the 6 million ounces and then projects like Red Chris if we'll then secure that longer-term sustaining of a really robust production profile.

Operator

Your next question comes from Lawson Winder with Bank of America.

Lawson Winder

Great quarter. Could I ask about your 2026 year-end reserve and resource planning -- and just as you think of all the different moving parts, so $2,000 per ounce gold price assumption used last year, what are you thinking would be an appropriate gold price assumption for year-end 2026? How might the Lihir and Cerro Negro life extensions play into this? And then just overall commentary on whether Newmont anticipates replacing reserves at year-end 2026.

And maybe actually 1 other question to kind of fit in along with this theme is, do you anticipate any impact on Cadia's reserves as a result? I mean, I gather from your prior response is that's not the case. But I think just specifically with respect to reserves, not resources, do you anticipate any impact?

Natascha Viljoen

Lawson, I just -- we didn't clearly hear your third question. You had our assumptions around resources. And the last one was around Cadia reserves, sorry, the second and the third question, you didn't come through clear, if you don't mind repeating those, please?

Lawson Winder

Yes. And I apologize for that. But just the basic gist of the question is, does Newmont ultimately anticipate replacing reserves at year-end '26? And what are some of the moving parts around that, including gold price and the various operating changes at some of the assets. .

Natascha Viljoen

Okay. So Brian will take your reserve for this question, and I'll jump in straight after.

Brian Tabolt

Yes. Thanks, Lawson. I think as it relates to the pricing considerations for reserves and resources, I think we've shared in the past, we tend to be grounded in looking at the 3-year trailing average Obviously, a lot of different dynamics that have gone on over the course of the last 3 years. So we do take that into consideration as well in terms of the volatility of gold price -- but I'd say that, that's a good anchor to note. And so we will anticipate as a result, a bit of an increase in terms of the reserve and resource numbers that we'll come out with. But we're very much from a process perspective in the midst of that important work on our reserve and resource rounded in price for sure, but there's obviously a lot of other dynamics associated with progressing the reserve and resource declaration that we're in a position to do that and announce that as part of our year-end close process tied to our business plan and cost outlook. So that's a bit of flavor of what I would share with you with regards to kind of where we're at from a process perspective, but you can't anticipate a bit of an increase in the coal price.

Natascha Viljoen

I think your follow-on question to that was, how does that impact our thinking about Cerro Negro, [indiscernible] and Yanacocha. I think important and Lawson and I think we've had a little bit of conversation about this before. resource and reserves. We're also quite conservative where we think about mine design optimization for productivity of mine design and any near or short-term low capital opportunities, like [indiscernible] and Yanacocha. We do take a different approach to thinking about gold price and we do consider near-term gold price.

Both of these instances is no real capital allocation quick answers. It's a quick turnaround that should able to benefit from the higher gold price environment that we are seeing at the moment.

Your question around Cardio, No, it would not impact the incidents that we've had will not impact our reserve assumptions around Cadia.

Operator

Your next question comes from Daniel Morgan with Barrenjoey.

Daniel Morgan

Back to Red Chris. The returns in IRR of double-digit given, is that just for the first 13 years, and I presume only [indiscernible] i.e., is there any benefit from future caves included in that, i.e., micro block 3? Would you leverage the same crusher for micro block 3? I'm just trying to marry up -- there's obviously a lot of life of mine infrastructure, which happens in Phase I, but perhaps you haven't got the benefits and the returns. Just trying to understand that.

Natascha Viljoen

Yes, Daniel, I think that's a good assumption. As we indicated, about 40% of the capital that we spend leasable infrastructure that will be -- will benefit future blocks. This -- these economics will assume 100% of the capital. That's part of our standard. So this project needs to be standalone -- have the right economics on a stand-alone basis. I think that's important. So certainly, we'll be able. And perhaps the way you can think about it is just to look at the benefit that we see at Cadia, where we have similar benefits of using share infrastructure across future caves and the economics just continue to improve. .

Daniel Morgan

Yes. And just to ask about the funding. I see that you're looking to plan -- obviously, you've got a very strong balance sheet. What are the rights you have under your JV partner agreement? And might you contemplate investment more than potentially your 70% interest and get a higher proportion of the project.

Natascha Viljoen

Yes. Daniel, we are in discussion with our partner, and they have full visibility of the project capital. And we're working closely with them as they run it through their relevant processes.

Operator

Your next question comes from Adam Baker with Macquarie. .

Adam Baker

Just during the quarter, you've reached an agreement with Barrick to bend for mile into the Nevada JV for USD 1.95 billion. Just wondering how you could give us some color to how these discussions came about, including the timing on our and also how you landed on the $1.95 billion because this optically appear to be a great deal for you guys.

Natascha Viljoen

Adam, the final agreement had a number of different components. As you've pointed out, we have formal and fiber line that was contributed to the joint venture agreement. We had the opportunity to relook the agreement also from a governance point of view and an opportunity for us as joint venture partners to work closer together to optimize that district. I think I'm personally quite excited about that district because it's the first time that we can look at that district unencumbered to improve its performance. So I think it's important to know that a number of different components that come together in the outcome of the $1.95 billion. We're pleased that we were able to conclude this with a modernized agreement. And I think a really bright outlook for the asset.

Operator

Your next question comes from Martin Pradier with Veritas Investment Research.

Martin Pradier

So my question is on depreciation. The depreciation year-to-date has been [ 1,170 million ] rounding. So about 630 million for the quarter. You are guiding 2,815 million which implies that roughly you have to get a 950 million in the last quarter. Is that realistic? Or should I think that it should be more like in the previous quarters? And the second question would be on the remediation where you have in the 9 months, $358 million, and the guidance is $385 million. So you have very little left. So if you can provide some guidance on those 2 items, [indiscernible].

Brian Tabolt

Yes, Martin, thanks for the question. As it relates to the depreciation, the way I would think about that is, we mentioned that -- we do have our highest production quarter in the fourth quarter. So naturally, there will be a bit more depreciation coming off as we round out the year. I think as it relates to the guidance that we had at the beginning of the year, there is an element of uncertainty associated with that depreciation estimate. And certainly, there's an element that we do anticipate that we'll probably be at the closer towards the lower end of the range as it relates to that depreciation guidance.

On the remediation and reclamation if I'm thinking of the -- what you're referring to as it relates to Yanacocha water treatment plants. We are -- as I think we mentioned in the prepared remarks, quite pleased in terms of where the water treatment plants are relative to their construction and their readiness. And so some of that's reflected in the year-to-date spend. And so there -- we're well on pace as it relates to closing those projects out and getting them compliant in 2027.

Martin Pradier

So you'll be close to that $385 million guidance? Or you'll be well ahead of that? That's really the core of the question. .

Brian Tabolt

Okay. Sorry. Is it -- if it's related to the accretion, this would be tied to a core accretion -- what you may be seeing is that there's an element of remediation liability that we booked in the third quarter as it relates to our midnight mine operation in the state of Washington. And that's a bit of a one-off. It's not related specifically to accretion.

Operator

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

Anita Soni

My apologies if this has been asked before. But I just wanted to understand the transaction with [indiscernible] sorry, for 4 miles. Has that been tapered, I understand that it's 30 days from the day that the contract gets written up and that's when you'll have to deliver. Has that happened yet? .

Brian Tabolt

No. Anita, that was reflected in the opening remarks. We are on pace to close out the vend-in process. But the payment, you're right, is 30 days after the completion of the vend-in. The vend in itself has not yet occurred, but we are anticipating at closing in the fourth quarter.

Anita Soni

Okay. And then 1 other question, just on Ahafo North. I was just wondering about the ramp-up Sorry, I was just wondering about the ramp-up at Ahafo North in the fourth quarter and going into next year. I think it was a little sluggish this quarter compared to my expectations. So -- just wondering how that evolves over the next 4 or 5 quarters. .

Natascha Viljoen

Yes, Anita, thank you for that question. So we do see, as we continue the ramp up Ahafo North moving into higher-grade areas into the next quarter. So you will see that continuous increase to -- as we ramp up.

Operator

This concludes the question-and-answer session. I will now turn the call back to Newmont's CEO for closing remarks.

Natascha Viljoen

Thank you so much, Rebecca. And just to say thank you, everyone, for joining our call today. We always enjoy talking to you, and we're excited about the opportunities ahead, and we're looking forward to updating you on our progress next quarter.

Operator

Thank you for attending today's presentation. You may now disconnect.