Good morning, welcome to Newmont's full year and fourth quarter 2020 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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 Eric Colby, Vice President of Investor Relations and Communications. Please go ahead.
Thank you, and good morning. Welcome to Newmont's full year and fourth quarter 2020 earnings call. Joining us on the call today are Tom Palmer, President and Chief Executive Officer, Rob Atkinson, Chief Operating Officer, Nancy Buese, Chief Financial Officer, and Randy Engel, Executive Vice President of Strategic Development. They will be available to answer questions at the end of the call, along with other members of our executive team. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found at our website. Now I'll turn it over to Tom on slide three.
Thanks, Eric. Good morning. Thank you all for joining our call. 2020 was a year of unprecedented challenges. Through it all, we remained focused on continuing to differentiate ourselves as the clear industry leader. I'm proud to say that we have delivered record-breaking results as a consequence. Turning to slide four for a recap of our major achievements. The safety and wellbeing of our employees and local communities remains a fundamental principle of our company. Unfortunately, the world continues to grapple with the COVID-19 pandemic. We remain disciplined in the application of the key health and safety protocols across our business. Despite the challenges of managing through an unprecedented pandemic, we achieved the best safety performance in our company's history.
This was a result of having a clear focus on managing the fatality risks across our company and ensuring that we have a consistent and rigorous approach to the application of critical controls required to manage these risks. We continue to lead the industry with our ESG practices, setting targets to reduce greenhouse gas emissions 30% by 2030 and achieve net zero carbon by 2050. We met full-year guidance, delivering more than 5.9 million ounces of attributable gold production at all-in sustaining costs of $1,045 per ounce. In addition to this, we produced a further 1 million gold equivalent ounces from copper, silver, lead, and zinc at all-in sustaining costs of $858 per gold equivalent ounce. Last year, our 12 managed operations, supported by an integrated operating model and a culture of continuous improvement, delivered $790 million in cost and productivity improvements through our Full Potential program.
We continue to maintain our discipline of improving margins at $1,200 per ounce, allowing us to capitalize on our significant leverage to higher gold prices and delivering record financial results. In 2020, we generated $3.6 billion in free cash flow, the highest in the industry, and ended the year with $5.5 billion of cash on the balance sheet. The strength and stability of our business supports our industry-leading dividend framework. This framework provides our shareholders with the stability of a base annualized dividend of $1 per share, calibrated at a $1,200 gold price assumption, and the potential to receive 40%-60% of the incremental free cash flow generated at gold prices above $1,200.
Newmont continues to set the standard as the clear industry leader in shareholder returns, which we further differentiated with a 38% increase in our quarterly dividend that we announced yesterday, bringing our quarterly dividend to $0.55 per share and our annualized dividend rate to $2.20 per share. With this increase, our current dividend yield places us in the top 25 dividend players of the large-cap S&P 500. We also recently announced a new $1 billion share buyback program. This follows the $1 billion program we completed in the fourth quarter, which reduced our total share count by 22 million at an average price of $45 per share. Our industry-leading dividend and share repurchase program are a reflection of our commitment to deliver industry-leading shareholders' returns whilst remaining focused on the financial strength and flexibility needed to create value throughout the price cycle. Shifting now to safety.
I'd like to expand a bit more on our 2020 safety performance on slide five. 12 months ago, I outlined a key change that we were making at Newmont around our safety measures, stepping away from the mining industry's traditional use of lagging personal injury rates in our bonus programs to measures that are focused on managing the critical controls that must be in place at all times to prevent fatalities. At the time, I also challenged management teams and boards in our industry to follow our lead. Shift the focus away from personal injury rates to measures that will lead to the creation of a fatality, injury, and illness-free environment. How did we go?
During 2020, we completed over 70,000 interactions by leaders in the field that were focused on ensuring that the critical controls required to prevent a fatality are understood and being effectively managed by our team members exposed to these risks. As a consequence, I'm proud to report we reduced our significant potential events by 63% and achieved the lowest personal injury rates in our company's history, with a total recordable injury frequency rate of 0.33 per 200,000 hours worked. It is no coincidence that visible, felt leadership focused on fatality prevention is driving a significant improvement in all of our safety metrics. Turning now to our portfolio on slide six.
Among our 12 operating mines and two joint ventures, we have nine world-class assets, each of which delivers more than 500,000 gold equivalent ounces per year at all-in sustaining costs of less than $900 per ounce, and with a mine life that exceeds 10 years. Importantly, all are located in top-tier jurisdictions that we define as countries classified in the A and B ratings ranges by Fitch, Moody's, S&P, and Fitch. We firmly believe that we have the right size portfolio to generate sustainable returns from our world-class, responsibly managed assets located in the best gold mining jurisdictions. As we described in some detail on our exploration webcast last week, our portfolio is enhanced by the gold industry's best exploration pipeline of greenfield and brownfield opportunities. This exploration portfolio is managed through our proven integrated operating model, which ensures our exploration teams work hand-in-hand with our projects and operations teams.
One of the key benefits of this integration is that we do not reinvent the wheel and duplicate effort. With the majority of our exploration activities occurring near existing operations, we have familiarity not only with geology and terrain, but also the permitting, regulatory, and community relationships surrounding each of our operations. Turning now to the reserve and resources underpinning our asset base on slide seven. Ore reserves are the lifeblood of a mining company, and replacing our reserves is critical to sustaining production. As we reported last week, we ended the year with 94 million ounces of gold reserves. Our team's ability to convert reserves and replace 80% of depletion in such a challenging year was truly remarkable. In addition to our reserves, we also offer substantial future upside through our resource base of over 101 million ounces of gold.
We are in the very fortunate position of also having significant exposure to other metals, including copper, silver, lead, and zinc. These other metals are contributing substantial value to our portfolio today, generating solid cash flows each and every quarter from Peñasquito and Boddington. Turning now to our stable long-term production profile on slide eight. Underpinned by our leading reserve base and exploration program, our portfolio will produce steady gold production of more than 6 million ounces through until at least 2030, balanced across each of our four regions. This profile is further enhanced by the production of more than 1 million gold equivalent ounces from silver, lead, and zinc at Peñasquito and copper at Boddington and Yanacocha. Combined, we will deliver nearly 8 million gold equivalent ounces per year for the next decade, the most of any company in our industry.
Moving to slide nine for a look at our five-year guidance. As we shared in December, our five-year outlook shows that we will steadily increase attributable gold production to nearly 7 million ounces over the next five years, and our all-in sustaining costs will improve in 2021 to $970 per ounce and further improve to between $800 to $900 per ounce by 2024 as we get the benefit from our investments in autonomous haulage at Boddington, improved underground mining methods at Ahafo, the expansion at Tanami, the development of Yanacocha sulfides, and a new mine at Ahafo North, as well as continuing to deliver sustainable value from Full Potential improvements across our portfolio of 12 managed operations. Turning now to our free cash flow generating potential on slide 10.
Our balanced portfolio, combined with our discipline and integrated operating model, provide significant leverage to high gold prices from the largest production and reserve base in the world. For every $100 increase in gold price above our base assumption, Newmont delivers $400 million of incremental attributable free cash flow per year. Using our conservative $1,200 gold price assumption, our base free cash flow would still total $3.5 billion over the next 5 years. At current gold prices, our portfolio would generate more than $15 billion of free cash flow over that same timeframe. To be clear, this is free cash flow that is entirely attributable to Newmont's account, enabling us to provide industry-leading returns. With that, I'll hand it over to Rob to discuss our operational performance on slide 11.
Thanks, Tom. Before jumping into the regions, I'd like to start by saying how very proud I am of our entire team and what they have safely accomplished while navigating such a tough and unprecedented year in 2020. Heading into 2021, we remain very diligent in our application of our wide-ranging controls and safety protocols to place the health, safety, and well-being of our teams and our communities above all else. Turning to slide 12, I'll give an update on Australia's performance. In 2020, Australia produced approximately 1.2 million ounces of gold at all-in sustaining costs of $964 per ounce. At Boddington, we produced approximately 670,000 gold ounces and 56 million pounds of copper in 2020. The site delivered a single-year record for mill performance, reaching 40.5 million tons processed against a nameplate capacity of 35 million tons per annum.
Achieving this level of performance is a testament to the successful implementation and consistent delivery of our proven Full Potential program, which is a direct result of the continuous improvement mindset of our dedicated site leadership personnel. We have completed three Full Potential refreshes at Boddington since 2013 and continue to identify opportunities to take performance to the next level. During the fourth quarter, higher throughput and consistent grades drove strong production. Sustaining capital was higher than normal as we took early receipt of Cat trucks as part of the autonomous haulage system, which drove higher all-in sustaining costs. We're well on our way to operating the world's first open-pit goldmine with an autonomous truck fleet, improving the safety of our employees and extending life at one of Newmont's cornerstone assets.
10 of the 29 new Cat trucks have already arrived on-site, with four of those trucks fully commissioned and being put through their paces on a test circuit. We'll soon begin full deployment of these impressive autonomous vehicles that will increase productivity and improve mining rates. These improved mining rates, coupled with higher grade expected later in the year from the South Pit, positions Boddington to deliver a stronger second half and over 1 million equivalent gold ounces for 2021. I'd also like to highlight something we talked about last week at our exploration webcast. The area between the north and south pits in the picture has had limited drilling to date, but from the knowledge that we do have, we do believe there is a potential to combine the pits into one larger super pit to further extend the mine life.
At Tanami, we produced nearly 500,000 ounces at an all-in sustaining cost of $745 per ounce, one of our best-performing assets in the entire Newmont portfolio. Tanami continues to deliver productivity improvements, setting new records for underground development and mining rates for the year. The team continues to progress our second Tanami Expansion, which I will now discuss on slide 13. We remain very excited about the second Expansion project at Tanami and the site's future as a long-life and low-cost producer. Through the development of a 1.6-kilometer-deep production shaft and supporting infrastructure, the project will improve production by around 150,000- 200,000 ounces per year while reducing operating costs by approximately 10%. In addition, Tanami Expansion two will provide a platform for us to further explore a prolific mineral endowment in the district, which has the potential to grow annual production to more than 700,000 ounces per year.
As we mentioned during our exploration update, we have added significant reserves and resources at Tanami, and we are especially excited about the potential to advance near mine exploration at Oberon. The Tanami Expansion Project is approximately 25% complete, and we've invested around $130 million so far. We have achieved a significant milestone, finalizing the major construction contracts required to complete the project. The pandemic has had an impact on construction contractors in Australia, which has resulted in higher-than-anticipated contracting rates. In addition, we encountered unanticipated geological structures during the completion of the pilot hole and the raise bore drilling process. As a result, due to vertical deviation from our plan, we've had to increase the shaft diameter from 5.7 m- 6.3 m. The vertical deviation was only 300 mm, less than one foot over the length of a shaft that is nearly one mile deep.
This is less than 0.2%. It's very important to ensure a controlled development and a final shaft that will operate in a safe and optimal manner for decades to come. Taking into account the impact of COVID, higher contracting costs and work resulting from the increased shaft diameter, we have revised our projected total capital costs to between $850 million- $950 million. The project is expected to reach commercial production in the first half of 2024, and we continue to work closely with our EPCM and Worley to safely deliver this important project. It is important to note that this increase does not impact our long-term outlook announced in December. I'm proud of the team at Tanami and the persistence they've shown in executing such a complex project during a challenging year. Turning to Africa on slide 14.
Our assets in Africa had another year of solid performance in 2020, producing over 850,000 ounces at all-in sustaining costs of $890 per ounce. Ahafo delivered a solid quarter, supported by higher grades and improved mill throughput by partnering with the process control team at our operations support hub in Perth. This is how Newmont is leveraging its operating model to consistently drive improved performance and productivity right across our portfolio of operations and projects. As we progress through 2021, the site is well-positioned to deliver higher production and improved costs as it benefits from higher grades ahead of a new layback. Ahafo continued its steady performance in the fourth quarter, as Subika Underground delivered higher tonnes mined and grade. We continue to progress the development of our change mining method at Subika, sublevel shrinkage, which will have safely increased tonnage, reduced mining costs, and capture higher efficiencies.
We expect to continue the ramp-up to full-scale production of the sub-level shrinkage method by bringing on the first full stoping area in quarter two this year. We expect to complete the full-scale ramp-up by mid-2022. In 2021, we expect to see higher grades at Subika and Akyem Open Pit towards the second half of this year, which will drive higher second half production at the Ahafo site. Finally, at Ahafo North, the best unmined deposit in West Africa, we are finalizing the permitting process, and we remain firmly on track for a full fund's decision in the coming months. Turning to South America on slide 15. South America, the region most impacted by the virus, had a strong finish to 2020, producing nearly 1.1 million attributable gold ounces at an all-in sustaining cost of $1,100 per ounce.
At Merian, we exceeded our outlook with nearly 350,000 attributable ounces for the year, and we surpassed 2 million ounces of gold produced since starting operations in October 2016. During the fourth quarter, the site delivered very solid performance based on higher throughput and recovery and utilizing an ore blending strategy that resulted in a single-day record for mill performance of 54,000 tons processed. In 2021, Merian transitions from softer saprolite to harder ore, which supports higher production through improved recoveries and grades, but is partially offset by lower mill throughput. At Cerro Negro, we continue to manage government restrictions related to COVID. Our disciplined safety protocols have allowed for more than 20 shift changes since the pandemic began, and we've performed over 14,000 tests through the company's owned and operated on-site PCR testing lab.
While challenges remain with reduced levels of personnel during the quarter, production rates returned to pre-COVID levels, and focus remains on improving these rates through a number of Full Potential initiatives. In 2021, our focus is on increasing development rates and the development at the Marianas Complex, which we expect will increase ore tons mined and sustain consistent levels of production. At Yanacocha, we managed through significant COVID challenges in 2020, delivering a steady end-of-year performance. Our focus on higher grades for leaching helped to offset the impact of lower tons mined and higher-than-usual rainfall during the fourth quarter. We have also begun our transition to leach-only operations, with a ramp down of the oxide mill ahead of the development of Yanacocha Sulphide, and expect production for 2021 to be weighted to the second half of the year as we leach higher grades.
Study work on the sulfides project is progressing well, is nearing completion. We expect to apply for full funds approval to move the project into execution during the second half of 2021. Turning to North America on slide 16. North America delivered solid fourth quarter results, ending the year with approximately 1.5 million ounces of gold production and nearly 900,000 gold equivalent ounces. At Peñasquito, we delivered a very strong fourth quarter after overcoming a challenging year. The site topped new records for mill throughput since the acquisition, averaging throughput of approximately 105,000 tons per day. We saw record performance from the pyrite leach plant for gold and concentrate production.
At Musselwhite, we completed two important projects that are critical to ensuring the site's future, the new conveyor and the materials handling system. Musselwhite ramped up mining in the fourth quarter and reached its highest ore tons mined for a single quarter since the acquisition. With underground development progressing ahead of plan and the utilization of the new conveyor and materials handling system, Musselwhite is positioned to produce 200,000 ounces in 2021, with a stronger second half as ore tons mined continue to improve. Éléonore delivered its strongest quarter of the year for both production and costs. 2020 was a transformational year for Éléonore, as our site leadership team focused on resetting the operation and improving efficiency and productivity, resulting in higher margins.
Completing the lorer mine materials handling system earlier in October has also enabled the team at Éléonore to achieve higher underground development rates from deeper in the mine. Porcupine delivered solid results for the year with nearly 320,000 ounces of gold production, meeting our full-year guidance. Fourth quarter results remained steady on increased underground development rates at Borden and a higher grade mined at Hoyle. In 2021, Porcupine will produce 360,000 ounces of gold production with higher grades and improved mining rates being achieved in the second half of 2021. At CC&V, we remain focused on safely delivering on our plan with over 250,000 ounces of production in 2021, with higher mill grades being achieved also in the second half of the year. With that, I'll hand it over to Nancy on slide 17.
Thanks, Rob. Turning to slide 18 for the financial highlights. As you can see on the slide, we had an exceptional year and delivered our best quarterly performance of 2020 in the fourth quarter, including $3.4 billion in revenue, an increase of over $400 million from the prior year quarter, driven by higher prices, adjusted net income of $856 million, or $1.06 per diluted share, adjusted EBITDA of nearly $1.8 billion, an increase of 37% from the prior year quarter, and nearly $1.3 billion in free cash flow for the quarter, and an amount entirely attributable to Newmont's account. This strong financial performance allows us to raise our dividend for a third time since the beginning of 2020, with a fourth quarter dividend declared of $0.55 per share, which is almost 4x larger than the fourth quarter dividend from 2019.
Turning to slide 19 for review of our adjusted earnings per share in more detail. Fourth quarter GAAP net income from continuing operations was $806 million, or $1 per share. Adjustments included $0.18 primarily related to the sale of royalty interest and changes in the fair value of our investments, $0.03 related to incremental COVID-specific costs, such as additional screening protocols, transportation costs, and community fund disbursements, $0.20 related to reclamation and remediation adjustments, primarily at Yanacocha, $0.06 related to tax adjustments and valuation allowance, and $0.07 of other charges. Taking these adjustments into account, we reported fourth-quarter adjusted net income of $1.06 per diluted share, an increase of $0.56 over the prior year quarter. Turning now to slide 20.
We continue to execute on our capital allocation priorities, which include maintaining our financial strength and flexibility, reinvesting in our business through disciplined investments in exploration and organic growth projects, and returning cash to shareholders. During the year, Newmont reinforced its position as the clear industry leader for shareholder returns and financial performance. We maintain over $8.5 billion in liquidity, with $5.5 billion of available cash. $550 million of that cash will be used to repay our 2021 senior notes that are due in June of this year. Our net debt to EBITDA ratio is now at 0.2x . In the fourth quarter, we were placed on positive outlook by S&P Global Ratings, and we were upgraded by Moody's to a Baa1 credit rating, further demonstrating our balance sheet strength. We returned over $2.7 billion to shareholders through dividends and share buybacks in 2019 and 2020.
Newmont has the unique ability to lead in shareholder returns, maintain strength and financial flexibility, and develop profitable projects, such as the expansion of Tanami, Ahafo North, and Yanacocha Sulfides. Looking ahead in 2021, we will continue executing on our proven track record of superior shareholder returns with a new $1 billion share repurchase program and an industry-leading dividend framework. Turning to slide 21 for more details about the dividend. In October, Newmont established a dividend framework that provides shareholders with a stable base annualized dividend of $1 per share at a $1,200 gold price, along with the potential to receive 40%-60% of the incremental free cash flow generated at gold prices above our base plan. The fourth quarter dividend declared yesterday was calibrated at an $1,800 gold price assumption and a 40% distribution of incremental free cash flow, resulting in a 38% increase over the prior quarter.
As Tom mentioned earlier, at the current share price, our current dividend translates to a yield over 3.5% and places us in the top 25 dividend payers of the large cap S&P 500. The increase to our quarterly dividend reflects the strength and stability of our business, a recognition of the current gold price environment, and our ability to maintain capital discipline. We will continue to assess our dividend on a quarterly basis and are confident that our framework will provide shareholders with an attractive dividend yield and participation in our cash flow generation at these higher gold prices. With that, I'll hand it back to Tom on slide 22.
Thanks, Nancy. Before we move on to Q&A, I'd like to pause and acknowledge Randy Engel, who has made the decision to retire in the second quarter after dedicating 27 years of service to our company. For the past 15 years, Randy has led our strategy and corporate development groups, serving on the senior and executive leadership teams of three CEOs. Over his career, Randy and his team have completed more than $35 billion in transactions, including the purchase of Cripple Creek and Victor, the sale of Batu Hijau, and most importantly, the acquisition of Goldcorp and the establishment of the Nevada Gold Mines joint venture in 2019. I am enormously grateful to Randy for the contributions he has made to our company over his distinguished career, and for the friendship and support that he has provided to me during my time at Newmont.
I wish him all the very best in his well-earned retirement and with whatever he chooses to embark on in the next chapter of his life, which will no doubt include lots of time in the outdoors with his family and friends. With Randy's retirement, Blake Rhodes, currently our Senior Vice President of Strategic Development, will assume responsibility for strategy and corporate development, reporting directly to me. Blake has been with Newmont for 25 years, serving in a variety of positions, including General Counsel and Senior Vice President for our Indonesian business. Blake has played a central role in all of the major transactions we've completed since 2014 and is well prepared to succeed Randy. As I've discussed many times, at Newmont, we believe consistent operational, environmental, and social performance starts with good governance, which includes thoughtful succession planning.
This transition is another example of our commitment to sound governance practices and reflects our deep bench strength of capable leaders. As we near our 100th birthday, I am more confident than ever that we are positioned to generate significant free cash flow and do so for decades to come. Our clear strategy lays the groundwork to truly differentiate Newmont as the world's leading gold company, as we work to continue to demonstrate our commitment to our purpose of creating value and improving lives through sustainable and responsible mining. With that, I'll turn it over to the operator to open the line for questions.
We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question will come from Fahad Tariq of Credit Suisse. Please go ahead.
Hi. Good morning. Thanks for taking my question. I might have missed this, but can you comment on Cerro Negro and the government restrictions that were imposed, I think, in December, and how that impacts production going forward? I know in the commentary you mentioned that the mine is ramping up again, but any color on how long the impact could be or what you're seeing from a mining milling perspective would be helpful. Thanks.
Thanks, and good morning, Fahad. I'll pass that question across to Rob. The specific restrictions were associated with a shutdown around that Christmas and New Year period for the whole of the mining industry in Argentina. Those restrictions or controls for people moving around the country were lifted after that few day period back to what was in place prior to Christmas. We're operating to those same protocols. Rob, did you have any other details or color you wanted to add to that?
No, Tom, you covered it. The most significant one was that whole country one that was imposed between Christmas and New Year, but we're now operating under the same restrictions as before, so nothing else to add.
From a percentage perspective, are you basically saying it's back to 100% of normal capacity? Or is it still below capacity?
I'll just hold on from that, Fahad. Yes, thanks, Tom. Fahad, we're probably running about 80%- 85%. That's primarily because of COVID impacts that Argentina is still suffering from COVID, and we've got a few of our employees testing positive. As a result, we do have a number of people unable to work. That's really meaning that we're averaging about 85% capacity at the moment.
Okay, great. That's pretty clear. That's it for me. Thanks.
Thanks, Fahad.
The next question comes from Jackie Przybylowski of BMO Capital Markets. Please go ahead.
Thanks very much. I wanted to ask you a couple questions about your dividend policy, maybe just to get some clarification. The first question would be the framework that you've set up, the 40%-60% of your incremental cash flows. Can you tell me maybe what you would need to see to move from the 40% that you used for this dividend you reported the other day, up more closer to the 60% level? What would be the driver to change that part of the formula? Just as a follow-up question on the share buyback, do you expect to complete most of that $1 billion this year? I know you have an 18-month window. Just wondering if you could give us some sense on the timing of that and if that's discretionary or if you have a program in place. Thanks very much.
Thanks, Jackie. I'll kick off, and Nancy, you might want to chime in as well. When we sit down with our board each quarter and look at our dividend, through that framework, Jackie, we look back on a significant period of time in this discussion we had this week with the board, was looking at the second half of 2020, where gold was averaging a bit above $1,800 through that 6-month period. We talked through lifting from the $1,500 zone to the $1,800 zone because of that gold performance. We would continue to have those discussions every quarter. Certainly, as we introduced our framework in October, it's more likely to be a semi-annual move, but with conversations taking place each quarter.
We'd be looking at what gold has been doing over at least that lagging 6-month period, and we'd look into the future and be looking at what the macroeconomics may be indicating in terms of gold as we think about that 40%-60% range. We certainly saw in the discussion that there was good gold price performance that had us lift from the $1,500- $1,800, and then we've still got upside in front of us if gold maintains its current levels or higher. We thought that was a prudent decision within the context of our framework, and we'll have that conversation every quarter with our board. In terms of the share repurchase program, it's up to $1 billion over 18 months.
The previous program was very much linked to our divestments of KCGM, Red Lake, and Continental, where we brought in $1.4 billion, and we returned $1 billion from those divestments in 2019 to shareholders through that buyback through the course of last year. With this program, over an 18-month period, up to $1 billion, we'd be looking to opportunistically go into the market where we saw a disconnect between market value and our assessments of our intrinsic value of the business. For us, it's a dynamic where we'll be looking for that disconnect, and then you could expect to see Newmont buy. I'd also say that the dividend framework in our capital allocation strategy takes primacy over the share buyback as we move forward. Nancy, is there anything you'd add to that?
Tom, just a couple quick things. Just to reiterate, Jackie, that the repurchase program doesn't impact our ability to continue to offer those higher dividends. We are very flexible in that way. I think that's a key differentiator, is our ability to offer both the dividend with full transparency and also the share buyback program. Really, it is a discretionary program, and we will consider a number of factors when we decide to repurchase. The fundamental underlying thesis is that it will be an accretive purchase. Lots of things to think about, but our view is to provide more value to shareholders and in an accretive way. Thanks, Tom.
Thank you very much, Nancy and Tom. I appreciate that. Thanks.
Thanks, Jackie.
The next question comes from Chris Terry of Deutsche Bank. Please go ahead.
Hi, Tom, Rob, and Nancy. Thanks for taking my questions. First one I had is just related to what's built into the guidance around COVID. Are you taking what you're seeing today, or are you allowing for potential hiccups that could occur? Just trying to work out whether the guidance, sort of the midpoint of the outcomes or whether there's upside if things improve better around COVID. Just related to that, just wondering if you could quantify maybe on a dollar per ounce basis what the cost of operating in a COVID environment is today and maybe on an ongoing basis. Thanks.
Yeah. Thanks, Chris. Again, I'll kick off and Nancy or Rob may want to chip in as well. We've included about a $10 an ounce impact for COVID in our guidance. That's a lot to do with the hygiene regimes, the social distancing, the additional logistics of moving people back and forth. I'd anticipate, as we see in the world play out, that we're going to be managing COVID protocols for at least all of 2021 in some shape or form. We may see a little bit of movement around that number, but that's what we're expecting. Rob or Nancy, did you want to provide any additional color? Nancy, point to where there's some more detail in some of the figures that we published.
Tom, just to add to what you said, I think, Chris, we have adapted very well to the situation. One of the key things is that a number of the folks that we've taken off the sites, we're working hard to make sure we stay that way. We've made almost a permanent change. I think the biggest change that we will see is that as the vaccinations are rolled out, as the pandemic eases, being able to go back to that more normality of people in buses, people in cars, et cetera. You need less buses, less cars to transport similar people and similar flights, et cetera. Those are the things which will make the big differences.
I think one of the key things I'd say is that we have adjusted very well to the situation, and I think we'll continue to evolve in a positive way. Nancy?
Thanks.
Thanks. Yeah, just to reiterate, it is about $10 an ounce built into our guidance for 2021. Just as a reminder, the impacts of COVID for this year will be reported and disclosed in the other expense line item of our financial statements. Back to you, Tom.
Thanks, Nancy.
The other question I had just on Peñasquito, now that you've been able to ramp the mine back up in the second half of last year after the COVID impact, I just wondered if you could talk through what you're seeing and whether there's opportunities in terms of recovery rates or mining. I know that was one of your target assets in the Goldcorp acquisition. Just wondered if you could give a more detailed update on that asset and where the potential lies.
Yeah. Thanks, Chris. We're really pleased with how Peñasquito's not only ramped up out of care and maintenance, but is performing and the upside opportunity. Rob, do you want to provide a little color to that, Chris?
No, certainly will. Just to reemphasize that what we've achieved at Peñasquito has been, I think, quite remarkable. When you actually look at last year, there's about 13 records that we broke. The reason I just say that is that those are based around the augmented feed. Not only have we increased it on average, but we've still got some room to go. If we compare what we did at Boddington at 40.5 million tons through the mill on a nameplate capacity of 36, we've still got a long way to go at Peñasquito to really make sure that we're sustaining those. We're working very positively.
I think in the mine as well, the basics such as payload and, for example, we've been able to increase payload there by nearly 13 tons per truck, which may not seem a lot, but given the size of the fleet, that's 25,000 tons a day that we're able to do. When you couple that with the drill and blast improvements, the supply chain improvements, the pyrite leach performance, where we also saw a record performance in the last four months of last year, that it's a site which is showing that it really can perform across a whole number of things. In short, very pleased with it. I think the potential upside is still very significant, just doing the basics, and the Full Potential process that Newmont has used over many years is a fundamental part of that.
Thanks, Rob, and that's it from me. All the best, Randy, in your retirement. Thanks.
Thanks very much.
Thanks, Chris.
Appreciate it. The next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.
Good morning, everybody, and thanks for taking my question. I'll start with the easy one, which is, Randy, congratulations on your retirement.
Thanks, Tanya.
You're welcome. Moving on to just a second easier one, which is just on the production profile for 2021. I just want to make sure I had all of the mines that were second half weighted. That was Ahafo, Yanacocha, Musselwhite, Porcupine, CC&V. Is that correct? Those are the only ones?
That sounds correct, Tanya. I'd say if you want to get into a macro level, the rough trend's going to be maybe 47, 48, 52, 53, first half, second half. It's going to be the bigger mines that will drive that. It'll be Boddington and Ahafo. The other ones will contribute, but in terms of the big mines that contribute to that, you'll see our North American region and our South American region largely even through the year, just a little bit to the second half. Then you'll see both Australia and Africa probably more like 45/55 because of the big contributions from those big assets coming in the second half.
Okay. Boddington is also second half?
Yeah. Boddington's second half, you really get it in second half and into the latter part of the second half as you get that autonomous fleet up and running, you get into some really good grades in the second half of the year.
There's nothing with Peñasquito that we should be aware of? Because that one can be quite grade dependent per quarter.
Yeah. Rob, any comments you'd want to make on Peñasquito?
No. At the moment, Tanya, we're in pretty good shape there. It's looking as though it's going to hold up to a fairly even first half to second half.
Okay, perfect. Now that I have you on, Rob, I just wanted to circle back to Tanami, and just wanted to talk about the capital increase. Just so that I understand, it's about $150 million. I'm just trying to understand. A part of it is to do with increase in contractor pricing, some of it with change in scope, and I think some of it is also a bit defer in startup. Is that correct?
I'll just continue on that, Tanya. The other part is really COVID itself. If I give an example, that we had planned to do all of our engineering in South Africa, but because of the logistics, the bandwidth, et cetera, we had to move that to Santiago in Chile. That, coupled with just getting people in and out of Australia, has proven to be quite difficult. Then, as you may remember, that we had to change manufacturing plants from China back into Australia. There is that kind of 30% related to COVID as well.
Okay. 30% COVID, and then the other 70% is pretty much change of scope, higher contract pricing, and a bit on timing. Would that be fair?
The change of scope would include that, the larger diameter of shaft. If you include that, most definitely. Certainly the competitive market that we're seeing in Australia, especially for those shaft-sinking contractors. Those are certainly the big ones.
Okay. Lastly, given what we're seeing here, just wanted to make sure I ask about inflationary pressures. Are we starting to see inflationary pressures come through the capital and cost structure at all?
I think it's quite a unique circumstance in Australia, Tanya, with the nature of sinking a mile-deep shaft in a remote location in a country that's got international borders closed. As we look into Ahafo North, which will be the next project where we're doing work, a lot of the work in 2021 is ground clearing, road diversion, and using local contractors with some of the plant coming through in 2022. You'd expect to see some of the COVID restrictions lifting. Not seeing the same level of cost escalation there as we're seeing in quite some unique circumstances for the scope of the work and the location for Tanami.
Okay. No, that's good to hear. Thank you very much for that.
Thanks, Tanya.
The next question comes from Anita Soni of CIBC World Markets. Please go ahead.
Good morning, everyone. Tanya asked similar questions to what I was going to ask about grade and then also about Tanami, and then you answered into the read-through on Ahafo North. Could you just remind me what capital we're looking at Ahafo, what the old guidance was?
I think the old guidance, correct me, Eric, if I get this wrong, but it's $750 million, off the top of my head, for the Ahafo North field.
Okay. We could see a little bit higher, but not to the extent that Tanami increased.
Yeah. I'd say you're looking at a $700 million-$800 million range for Ahafo. We're not seeing the same challenges for that project and its scope as we're seeing with Tanami.
Okay. That leaves me with just one more question, which is the dividend. To go back to that. You said you would assess it every quarter, but it'd probably be sort of like a reassessment on the gold price every 6 months or so. Given that we're
Yeah
slightly under on the $1,800 that you're using right now, also that you have like 40% versus the 40%-60% framework that you had outlined. If we remain at like this $1,775 level, some maybe even $1,750.
Yeah
three months, how do you think that dividend would evolve? There is enough buffer room, right, to maintain the $0.55.
Yeah
What the dividends, the excess could be this year? Should we expect $0.55 for the next three quarters, or could you see that being pared back next quarter or in quarter three?
The key thing with our dividend framework was to have stability and predictability with it, Tanya.
Yeah.
We were certainly were not looking to have it go up and down on a quarterly basis. Certainly, at the end of the day, it's a board decision, and we need to look at the circumstances at the time. Having those $300 increments-Looking at it every quarter, but really starting to orient over the longer term on a semiannual basis for lifting or lowering or keeping the dividend the same, because we're not looking for it to have to go up and down. We would look back at an April meeting, we'd look back at the gold price over the last six to nine months and make judgments about where it's at, and where we see the macroeconomics going forward. We'd look at the strength of our balance sheet and our ability to maintain certain dividend levels.
It's very much looking to have stability and predictability for our shareholders, based upon a long-term view of gold price, both retrospectively and having a view going forward, as well as our business performance.
Yeah. The $1,500 was-
For clarity.
Sorry, the $1,500 gave us a little bit more buffer room. Now that we're with this little bit of wobble, I just wanted to understand a little bit more, in finer detail exactly.
Yeah
where you were, what your thoughts are. It sounds like it's more close to $1,800 would be enough-
to maintain the $1,800.
Yeah. We look not only at the gold price, but we look at the cash reserve on the balance sheet as well, as we make those judgments.
Okay. You could draw on cash reserves if needed? Okay. Thank you very much.
I'm conscious that you'll have another call coming up at the top of the hour. Maybe we'll take one more question and then allow you to get to your next call and we can follow up for those who we missed out on.
The next question comes from Danielle Shigemira of Bernstein. Please go ahead.
Great. Thank you. One follow-up on Australian inflation. Is it accurate to say that the inflation that you're seeing there is really on the CapEx side because of the specific work that you're doing, rather than on the OpEx side? Just a broader question around COVID.
That-
Sorry, go ahead and I'll ask the other one later.
It's quite unique capital escalation, both in terms of the nature of the job and the quite unique contractors who can sink a shaft and line a shaft of this depth. When you've got international border restrictions, then you're further constrained in terms of who are the quality contractors you can access. That particular scope of work, that contractor market is hardened due to COVID-19. We're not seeing the cost escalations in our operating side. We have long-term contracts in place with strategic suppliers. Our labor turnover, which is an important input cost, is at very healthy levels. We're not seeing operating cost escalations.
Great. Thank you. That's very clear. Just secondly, on COVID. For where you operate in South America and Ghana, are you engaging with the governments on how you guys can help in terms of vaccine deployment, whether that's using your own facilities or funding vaccines directly for your employees and local communities? What kind of conversations are you having there?
Yes. We operate across eight countries around the world, and they're all in different phases of rolling out vaccines. We're engaging with governments in every one of those countries, particularly places like Ghana and through those Latin American countries, to see where we can help and support them in terms of not only the rollout of the vaccine, but helping with the education around the importance of vaccinations. Yes to that engagement. It's a continuation of the engagement we've had with all of those governments as we've managed our way through the pandemic and looked to protect the health of our host communities, and ensure that we can operate safely. It's a continuation of those relationships and discussions that we've strengthened through the last 12 months with this pandemic.
Okay. That's useful. Thank you.
This concludes the question and answer session. I would like to turn the conference back over to Tom Palmer for closing remarks.
Thank you, operator. My apologies we couldn't get to all of your questions today. I was conscious that you've got another call to get on. Please know that Eric saw who was in the queue, and we'll be back in touch with you to make sure we follow up with you on your questions. Thank you for your time, and I wish you all a good rest of your day. Thanks, everyone.
The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.