Good morning, and welcome to Newmont's Full Year and 4th Quarter 2019 Earnings Call. All participants will be in listen only mode. 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 Jessica Largent, Vice President of Investor Relations.
Please go ahead.
Thank you, and good morning, everyone. Welcome to Newmont's full year and Q4 2019 earnings conference Joining us on the call today are Tom Palmer, President and Chief Executive Officer Rob Atkinson, Chief Operating Officer and Nancy Buese, Chief Financial Officer. They will be available to answer questions at the end of the call along with other members of our executive team. Turning to Slide 2. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found on our website atnewmont.com.
And now, I'll turn it over to Tom on Slide 3.
Thanks, Jess. Good morning and thank you all for joining our call. Newmont has a track record of superior operating and financial performance And we are continuing to build on this proven record by exceeding the commitments we made early last year. As we enter our centenary year, I'm excited about the opportunities we have in front of us to safely deliver superior value for all of our stakeholders. Turning to Slide 4 for a recap of our major achievements.
In 2019, we continue to lead in environmental, social and governance stewardship by achieving our public targets and being recognized as the gold industry leader for our performance. Last year, we completed 2 historic transactions, creating the most balanced portfolio of long life assets with the ability to generate robust free cash flow for decades to come. We produced 6,900,000 gold equivalent ounces, including 6,300,000 ounces of gold at all in sustaining costs of $9.66 an ounce in line with our full year guidance. We generated $3,700,000,000 in adjusted EBITDA and have realized significant value from the Goldcorp acquisition exceeding our targets. We also reported the largest reserves in company history with an industry leading 100,000,000 ounces of gold reserves.
We drove improvement across our portfolio and have now delivered $2,700,000,000 in value through our full potential program since 2013. We also delivered 4 projects on 4 continents on time and within budget and approved full funds for our next expansion at Tanami. We reached agreement to divest Red Lake, KCGM and our holdings in Continental to generate more than unprecedented $1,400,000,000 to shareholders last year with $900,000,000 in dividends and $500,000,000 in share buybacks. This is unmatched in the gold industry. Our 2019 performance is evidence that we continue to deliver on our commitments.
Turning to Slide 5. We are making excellent progress and exceeding our commitments to value delivery from our 5 new operations. At the start of last year, we made a commitment to deliver $365,000,000 of run rate improvements per annum by the end of 2021. I'm very pleased that we are on track to exceed that commitment by nearly 40%, realizing more than 5 $100,000,000 of cash flow improvements in 2021 through accelerating G and A and exploration synergies along with higher than planned full potential improvements at Penasquito and Cerro Negro. This year alone, we expect to achieve $340,000,000 in cash flow improvements, representing over 90% of the commitment we made for value delivery from this transaction.
Each of our accomplishments were grounded in the safety of our people and the sustainability of our operations. Turning to Slide 6. Improving safety remains a relentless focus for all of us here at Newmont. Ensuring that everyone working in our business can return home safely to their family and friends is paramount. Through our visible caring leadership and the integrated systems we put into place to manage risk consistently across our global operations, we are working to significantly and sustainably improve our safety performance.
My expectation is that everyone who works in our business understands 1st and foremost the fatality risks associated with their work and are ensuring that the critical controls that are required to manage them are in place at all times. A robust safety culture is one that is constantly reinforcing systems, behaviors and actively sharing lessons learned from serious incidents. This is fundamental to the well-being of our people and underpins our operating performance. Our sustainability performance is also about consistent application of sound governance practices across our global business, coupled with the quality of our engagement and the relationships with key stakeholders. As a measure of our industry leading performance, we were honored to be recognized as the top gold mining company by the Dow Jones Sustainability Index for the 5th year in a row.
Turning to a look at our global portfolio on slide 7. Our world class assets are located in the most balanced and favorable jurisdictions. We have the industry's largest gold reserves at 100,000,000 ounces with nearly 90% located in the Americas and Australia. This offers Newmont shareholders exposure to 124 gold reserve ounces per 1,000 shares. Our reserve base also provides significant exposure to copper, silver, zinc and lead, representing an additional 63,000,000 gold equivalent ounces.
Across our 12 operated mines and 2 non operated joint ventures, we have an average reserve life greater than 10 years with mine lives at our largest assets Boddington, Panamay, Penasquito and Ahafo extending well into the 2030s underpinning the strongest and most sustainable portfolio in the industry. Turning to Slide 8. We will produce a steady 6,200,000 to 6,700,000 ounces of gold per year through 2024. In addition, we will generate $1,500,000,000 in revenue each year from producing between 1,200,000 to 1,400,000 gold equivalent ounces with silver, zinc and lead from Penasquito and copper from Boddington. Combined, we deliver nearly 8,000,000 gold equivalent ounces per year, the most of any company in our industry.
Turning to Slide 9. Even during a year involving the closing of 2 historic transactions, our full potential program remained as strong as ever, delivering $430,000,000 of value in 2019. Looking forward, all in sustaining costs are expected to improve from $9.75 an ounce in 20.20 to $8.50 an ounce in 2023 through the delivery of our full potential program and ongoing investment in profitable projects. Over this time, we will maintain our capital discipline through investing approximately $1,000,000,000 of sustaining capital per year to cover infrastructure, equipment and ongoing mine development. With that, I'll turn it over to our Chief Operating Officer, Rob Atkinson on Slide 10 to review our operational performance.
Thanks, Tom. And I'll start with an update on Australia's performance on Slide 11. In 2019, Australia produced more than 1,400,000 ounces of gold at all in sustaining costs of $908 per ounce. At Tanamine, we delivered a record year for production and costs with 500,000 ounces at an all in sustaining cost of less than $7.25 per ounce. Through our full potential program, we delivered significant value from improvements at the PACE plant and with greater pace fill reliability, the site can continue to sustainably increase mine productivity.
Successful delivery of the first Tanamine expansion project in 2017 and the Tanamine power project in early 2019 have enabled this performance and established a foundation for us to continue expanding this terrific asset. Our next phase of investment in Tanami Expansion 2 has the potential to extend the life beyond 2,040. Will reduce operating costs by over 10% and will provide a platform for us to further explore a prolific mineral endowment in the Tanami District. At Boddington, we produced approximately 850,000 gold equivalent ounces in 2019 as full potential programs in mining and processing led to improvements in truck and shovel productivities as well as increased gold recovery. Our planned stripping campaign in the South Pit is progressing very well.
In fact, full potential improvements to truck and shovel productivities has accelerated the time when we will reach higher grades to earlier in 2021. And at KCGM, we completed the sale of our 50% ownership in early January. We are supporting Northern Star and Sarazen by providing transitional services through the Q2. The Australia region has consistently exceeded conversion targets by more than offsetting depletion. During 2019, Tanamine added 1,500,000 ounces of gold reserves.
And over the last 7 years, reserves have grown by more than 2 50 percent and resources have also increased by nearly 200%. Lastly, Boddington's autonomous haulage system was approved by our Board of Directors earlier this week, and this world class asset is positioned to realize improved productivity and significant value over a 14 year reserve life. Turning to a bit more detail on Boddington's autonomous haulage system on Slide 12. Over the last several years, Boddington has delivered a step change improvement in operational performance, which has increased mine and mill productivities, added 4,200,000 ounces of gold reserves and extended mine life well into the 2030s. These successes have now positioned the operation to make its next step change improvement, the full automation of its haulage fleet.
Borington will invest $150,000,000 to purchase 29 new CAT 793 haul trucks. It will retrofit 7 existing trucks at the site and install the Caterpillar Command autonomous haulage system. This investment will enhance safety by removing people from the line of fire and reduce the potential for vehicle to vehicle interactions. These systems will also improve productivity and create a more controlled, predictable and efficient haulage operation and ultimately lower Boddington's mining cost per ton, generating an internal rate of return of more than 35%. With the improved costs, mine life is extended by at least 2 years from additional laybacks in the North Pit.
The support we will receive from CAT will be essential to the success of this work, and we have a very strong working relationship with them, which has been formed over many years. And we're also uniquely positioned to support effective implementation and operation of the fleet, thanks to the technical capabilities and previous experience of leaders throughout our business. The adoption of autonomous haulage has true replication potential and will inform our approach to implementing these systems at other Newmont operations and projects. Now to our Africa operations on Slide 13. 2019 was a record year for the Africa region with 1,100,000 ounces of attributable gold production at all in sustaining costs of less than $800 per ounce on the back of successfully completing Ahafo's expansion projects.
We declared commercial production at the Ahafo Mill expansion, which will maximize value from higher grade underground ore, efficiently process ore from existing open pits and stockpiles, allowing us to deliver stable production well beyond 2,030. Achieam delivered yet another solid quarter and offset lower grade as the site team worked closely with the process control team at our operations support hub in Perth to drive sustainable SAG mill throughput improvements. This is just one example of how Newmont is leveraging its global capability to consistently drive improved performance and productivity right across our portfolio of operations and projects. Looking forward, as previously highlighted in our guidance, the region will step down to 850,000 ounces in 2020 as Ahafo progresses its stripping campaign for Phase 4 at Subika open pit and advances underground development for the updated mining method at Subika Underground. With the transition a more productive underground mining method, Ahafo has increased its reserve and resource base, collectively adding 1,000,000 ounces in 2019.
Now to discuss our North America operations on Slide 14. North America produced more than 1,000,000 ounces of gold in 2019 with a strong 4th quarter as expected. At Porcupine, we successfully ramped up the Borden underground mine, providing additional higher grade ore. At CC and V, we recovered ounces from the VLF-one leach pad that had been deferred from prior quarters. And at Eleonore, we delivered a strong 4th quarter with higher grades at Horizon 5, but expect a softer Q1 as a result of mine sequence changes.
Eleonora is a complex ore body when taking into account stope sequencing, backfill requirements and grade presentation. Our technical services and exploration teams are strongly supporting the operation to integrate our geology and geotechnical models to optimize a life of mine plan that will safely and sustainably mine our reserves and extend the life of this ore body. At Musselwhite, rehabilitation work is nearing completion, and our contractor cementation is progressing well with the construction and installation of the conveyor. We're on track to have the conveying system fully commissioned and the mine back at full production by the start of October at the latest. Over the last 6 months, we've been mining ore and building a stockpile ready to feed the mill.
This stock pile currently contains approximately 50,000 ounces of gold. Commissioning of the mill is progressing very well. In fact, we just processed 1st ore from our stockpiles through the mill this week. At Penasquito, our work to sustainably improve the cost base offers the potential to build upon an already exceptional reserve and resource base similar to what we have achieved at Boddington. In 2019, we declared gold equivalent reserves of more than 24,000,000 ounces underpinning our current reserve life of 12 years.
And operationally, we delivered a strong finish to the year, which we expect to continue into 2020 as we reach higher grades in the main Penasco pit. Turning to Slide 15 for more detail. In 2019, we delivered more than $50,000,000 in cash flow improvements from quick win initiatives at Penasquito, exceeding our market commitment for full potential delivery at that operation. When we launched full potential at site, our team quickly identified that the crushing circuit at the front end of the mill, what we call the augmented feed circuit, was the key bottleneck in the processing plant. And that working this bottleneck to sustainably increase throughput and improve the quality of crushed ore provided to the SAG mills would lift the overall performance of the processing plant.
Early quick wins in the augmented feed circuit came at the secondary crusher and high pressure grinding rollers, where we replicated our success at Boddington and did a direct lift and shift of control logic to immediately improve the quality and quantity of feed. Taken together, these initiatives delivered record crushing throughput and record metal production for silver, zinc and lead in November. In 2020, we will continue to work this bottleneck hard. And for those coming to Penasquito next week, I'm very much looking forward to taking you through more detail on this and other important work we are doing to deliver more than $100,000,000 of further cost and productivity improvements at Penasquito by 2021. Rounding out the regions with South America on Slide 16.
South America produced nearly 1,300,000 ounces of gold and delivered all in sustaining costs approximately $8.15 per ounce in 2019. At Marion, we delivered better than expected 4th quarter performance and have transitioned into mining harbor ore at the Merion II pit. Fresh rock will present higher grade and improve mine productivity, which helps to offset reduced mill throughput rates. The Catcher Main pit as we move out of higher grade ore in the Tapado Aste pit, and we are now placing Catcher Main ore on the new Caratugo leach pad and we expect to see recovery of these ounces during 2020. At Cerra Negro, we mined higher grades as expected from Eureka and Mariana Norte and work to develop out to Amelia is progressing well as production begins to ramp up from this new mining area later in 2020.
And with that, I'll hand it over to Nancy on Slide 17.
Thanks, Rob. Turning to Slide 18 for the financial highlights. I'm pleased to report strong Q4 2019 results. During the Q4, Newmont delivered revenue of nearly $3,000,000,000 an increase of 45% over the prior year quarter with the additional sales from our new operations and higher gold prices. Adjusted net income of $410,000,000 or $0.50 per diluted share and adjusted EBITDA of nearly $1,300,000,000 an increase of 70% from the prior year quarter.
Cash from continuing operations was $1,200,000,000 driven by higher adjusted EBITDA. Free cash flow of over $775,000,000 an increase of more than $300,000,000 from the prior year quarter. With a solid finish to the year, we generated adjusted EBITDA of approximately $3,700,000,000 and free cash flow of more than $1,400,000,000 or $1.92 per share, of which we paid an annual dividend of $0.56 per share. We also paid out an additional $470,000,000 in 20.19 in the form of a special dividend. Finally, in association with the $1,000,000,000 share buyback we announced in December 2019, we have already repurchased $500,000,000 worth of shares.
Turning to Slide 19 for a review of earnings per share in more detail. 4th quarter GAAP net income from continuing operations was $537,000,000 or $0.66 per share. Adjustments included $0.11 related to the change in fair value of investments, dollars 0.10 related to tax adjustments and valuation allowance and $0.05 of other charges. Taking these adjustments into account, we reported 4th quarter adjusted net income of $5.0 per diluted share. Turning to Slide 20.
At Newmont, we build our annual business plan based on conservative including a $1200 gold price and a disciplined approach through which mine plans are developed based on reserves and the best demonstrated performance of plants and equipment. Our base plan at $1200 gold price allows us to maintain an investment grade balance sheet with a focus on our maturity profile, to maintain our infrastructure and invest in mine development through a steady $1,000,000,000 of sustaining capital to continue investing in organic growth, including approximately $600,000,000 to $700,000,000 of development capital expenditures and another $250,000,000 of exploration and $150,000,000 of advanced project investment per annum and return cash to shareholders through an industry leading annual dividend. In January, we announced the plan to increase our annual dividend by 79% to $1 per share, reflecting the confidence we have in our business to deliver substantial cash flows well into the future. The increased dividend will be effective upon approval and declaration of our Q1 2020 dividend in April. Turning to Slide 21.
We expect to generate significant free cash flow through the cycle. At current gold prices, our portfolio will generate more than $10,000,000,000 of free cash flow over the next 5 years. And even using our more conservative $1200 gold price base, free cash flow would still total $5,000,000,000 over that same period. As shown on this slide, for every $100 per ounce increase in gold prices above our base assumption, will deliver approximately $400,000,000 of incremental attributable free cash flow per year. Excess free cash will be used towards debt reduction and further shareholder returns.
Looking forward, we are well positioned to continue a trajectory of industry leading financial performance by executing our capital priorities and staying focused on long term value creation. And now I'll hand it over to Tom to wrap up on Slide 22.
Thanks, Nancy. Turning to Slide 23. We continue to build momentum and are taking the necessary steps to position our business for long term success. We remain focused on the 5 foundational principles of our strategy: keeping our people safe with our relentless commitment to our safety culture and systems, growing margins through the application of our operating, technical and exploration discipline, leveraging our exploration program and unmatched portfolio to grow reserves and resources, optimizing our world class project pipeline and maintaining discipline around capital allocation. Thank you for your time.
And with that, I'll turn it over to the operator to open the line for questions.
Thank you. We will now begin the question and answer session. And our first question comes from Matthew Murphy of Barclays. Please go ahead.
Hi. I had some questions on some of the former Goldcorp asset reserves. I mean, if we start with Eleonore, you're getting down there in reserve life now. And I'm just wondering what your confidence is to extend that back out. And what are the key factors?
Is it exploration? Or is it more about getting costs down so you can bring in more economic ounces?
Yes. I'll start off, Matt. And I've got my Chief Technology Officer, Dan Gearing with me here who might have a few comments as well. But the story for me at Eleonore is a parallel to the story you'll have seen us follow at Leeville where you've got a complex ore body where you need to make sure that geology model and your geotechnical model are well aligned and integrated to form your life of mine plan and you're taking into consideration stope sequencing and backfill and the like. That is a key focus for us at that operation.
So we've applied our Newmont discipline to how we determine reserves and resources. We actually have the same people that worked through the very good work we did at Leighville several years ago, Kate Williams and Dave Thornton. The very same people are working on the ground with the team at Eleonore to build those integrated plans. And if you look at Leighville today and look at the life that it has in front of it, a great deal of credit can be put in the hands of Dave and Kate for that work. So we're getting those basic models and plans in place and then combining that with an exploration program combined with full potential bringing cost down to look to extend the life with reserves and resources that meet the Newmont standard.
Dean, is there anything you wanted to add to that? Yes. Thanks, Tom. Matthew, one of the things
a couple of things I'd like to add to that. One is, as you probably know, at Newmont, we provide and apply very high standards to how we determine our reserves and resources. And let me provide a little bit of background, I'll also get and lead up to some specifics around your question around Eleonore. So our standard for our study requirements and our drill spacing far exceeds any regulatory agencies and current codes like JORC, SEC or 40 3 101. And I would also say we don't apologize for having those high standards because it has resulted in us that disciplined approach has resulted in us being very consistent delivering against our plan.
But to illustrate the point of how that plays through in our reserves and resource calculations, we can look at a mine like Cerro Negro as a starting point. And so as we applied our standards to that site, we ended up reclassifying about 1,500,000 ounces, but it went from reserves to resources. And because of it's still a highly prospective area, we're confident that those resources are going to come right back into reserves just as we do a little bit more work. And just quickly to illustrate the point further, if we look at Penasquito, we see that the reserves there maintained what they were before. But through our work, we actually added an additional 3,000,000 ounces on the resource side.
But switching to Eleonore specifically your question, if we go back to what Rob mentioned earlier, Eleonore is a complex ore body. And when we apply our demonstrated performance to the mining widths and the dilutions, we ended up revising about 1,000,000 ounces out of there. The rest of the revisions really came from geologic model updates similar to what Tom mentioned earlier. So the net of all those revisions resulted in resources remaining about the same at 1,000,000 ounces. But those resources that we have there are at a much higher level of confidence than they were before.
But I think what's important to recognize out of all this is that we know how to mine deposits like Eleonore. To Tom's point, we have a strong technical team that allows us to deploy the resources where they're needed and it allows us to take full advantage of our full potential program and also to rapidly replicate our best practices. So I'm fully confident that we're going to continue to extend the mine life there and that we're not looking at a short mine life.
Okay. Thank you very much. And you touched on Cerro Negro, so I'll leave it there. Thanks a lot.
Thanks, Matt.
Our next question comes from Chris Terry of Deutsche Bank. Please go ahead.
Tom, Nancy and Rob, thanks for taking my questions. The first one is just around the autonomous opportunity that you've mentioned at Boddington. Just wondering if you can give a bit more color on the actual savings on per ton of mining. And also just as a follow-up, will you likely wait until seeing how that goes at Boddington? Or are you looking at other sites between now and 2021 in advance of that?
Thanks.
Thanks, Chris. I'll take the second part of your question and Rob just pulling out, see if he can give you the answer to the second part. If not, we can go offline and get those numbers to you. Very important part of autonomous haulage is to bed it down and improve the operation of that technology in our gold mining environment and to manage through the change management process associated with that. So very important part of Boddington achieving the level of performance that it has and through that level of performance extending its mine life to underpin the replacement of a mining fleet with an autonomous mining fleet is an excellent opportunity for us to bring autonomous into our business.
We'd be looking 1st and foremost at using that technology to prove up the base case for some of the key projects that we have in our project pipeline. So it'd be the very large gold copper deposits that we've got a prefeasibility study. So proving up Boddington and having that inform those prefeasibility studies would be the first. And then if there were opportunities around our business to either replace fleet or convert fleet, we would consider that. You need to have the mine life in front of you in order to be able to justify the replacement of a mining fleet.
So those opportunities may present, but the it's more about presenting the base case for those very important studies we have at pre feasibility stage. Rob?
Chris, thanks very much for the question. And we're conservatively estimating that we're going to get a 20% improvement in productivity with the trucks in terms of the material that they can move. And that will obviously transfer to a lower cost per ton. The key areas that we'll be focusing on most of all are around the shift changes. Obviously, that disappears.
The maintenance requirements, the increased speed and also the ability to get greater payloads. So all in all, where we're sitting is about a 20% initial estimate. But obviously, we're going to be hoping to push that very, very hard. And we've certainly seen some great performance in other mining companies, and we certainly believe we can do that and some moving forward.
Thanks, Tom and Rob. And then just in terms of the operations thinking about the 2020 progression, just wondered if you could highlight just sort of the quarter to quarter and half to half split. I noticed you mentioned Eleonore weaker in the Q1, obviously, Musselwhite second half weighted. You've gone through a couple of the other assets, but I just wondered if you could make some comments on that. Thanks.
Sorry, just Chris, is there an operation in particular you want to talk about?
Just wondering in general as you go through your yearly guidance just thinking about it maybe first half versus second half or just items to look for on a quarterly progression just overall? I know you don't guide specifically to the quarter, but just things that we should look out for as the year goes on?
Chris, Tom here. You are going to see a little bit softer first half to second half. You're looking at maybe softer I mean like 48% versus 52% half to half. So in my world that's a pretty even year. Mine sequence certainly at Eleonore as you're seeing some lower gold ounces particularly in the Q1.
Musselwhite, you're going to obviously see a lower first half to second half as we start to feed ore and We're already feeding ore. In fact, Rob's being a little bit conservative. We actually produced our first gold this week from Musselwhite and we'll ramp up that plant in the second half of the year. Just looking down the list of mine sites, you're going to see in Africa weighted to the second half of the year, particularly at Ahafo as we start to get in some high grade ore at Subika. We're going to be weighted to the second half of the year at Achim as we get in some high grade ore in their open pit.
Pretty even year through Tanami. Boddington you're going to start to see them get into some high grade in the second half of the year. So there's a weight into the second half of Boddington pretty even through Pueblo Viejo, Cerro Negro pretty even. Myriam you'll start to see them softer in the second half as we start to get into more of a higher grade, but harder ore and then start to price that through the primary crusher you'll lose mill productivities. Yanacocha as we get into the Quecher Main stripping campaign, you'll see a bit lower in the second half to the first.
Penasquito, you'll start to see us move into higher grade ores in the second half, so a bit stronger in the second half. Eleonore talked about Pinasquito a pretty even year. And CCV, we'll start to see some high leach ounces coming through in the second half of the year. Does that give you some flavor?
Yes, yes. That's great. That's very helpful. It's exactly what I was after. And then the last one
One other, Chris, to keep in mind, as you're looking at cash flow, we'll start to ramp up our spend on development capital as we start to ramp up our work at Tanami 2. So you will see that in the second half as well.
Okay, great. Thanks for that. And the last one for me. I mean, you've obviously done the main divestments Kalgoorlie, Red Lake. Where the portfolio stands today, is there anything that's non core?
I don't think so, but I just wanted to check.
So Chris, there are 12 operations that we're going to drive value from. So you can see us absolutely focused on delivering and exceeding our commitments from those 12 operations. There are a couple of areas that we're working on that aren't part of our core operations. One is that we have a power business in Kalgoorlie that we're working through if you remember from the announcement with Northern Star they've got first rights to make an offer for that. That's material in terms of the value of that power business.
And the other area we're doing is cleaning up our equity portfolio. So we're actively working that. And you might see the order of through the combination of all of those things up to $300,000,000 of proceeds $200,000,000 to $300,000,000 of proceeds that may come from that. So I'd call that sweeping up, but it's a material number as we work to clean house in the first half of this year.
Okay, great. That's all for me. All the best for the year. Thanks.
Thanks, Matt.
Our next question comes from Greg Barnes of TD Securities. Please go ahead.
Yes, thank you. A question for Rob Atkinson on Penasquito. Just curious on the work you're doing on the front end of the plant and how that debottlenecking is improving the throughput versus when you acquired the asset to where you think you can get it to?
Thanks very much, Greg. And very, very clear, that's where the bottleneck is. It's sitting at a rate of 37,000,000 ton throughput for the year. We're looking at getting that up to 39,000,000 very quickly. Now that certainly isn't the end to it, but as you balance the different products between the gold and the zinc and the lead and the silver.
You do have to balance the back end of the plant with the front end, but we've certainly been able to choke feed through that front end, and we're looking at 39,000,000 tonne throughput. Greg, are you coming to Penasquito next week because we're going to go into some detail with folks that are visiting.
Yes, I am absolutely coming in. Just wanted to jump the gun a little bit, Tom.
No worries.
And full potential, have you fully deployed that across all of the Goldcorp operations now?
Rob, you want to Not quite yet, but we've Eleonore is very well advanced. Obviously, Penasquito is fully advanced, but porcupine is ramping up. And given where Musselwhite is at with the conveyor, that's going to be the last one to ramp up. But on the whole, we're making very, very good progress. And even though full potential isn't ramped up fully at porcupine and Musselwhite, the level of engagement between our technical teams and our operational teams is very significant.
So we're making very good progress.
And how about the Cerro Negro, Rob?
Beg your pardon. The Cerro Negro is was one of the first to kick off. That's proceeding well. And again, we have a terrific SME support down there. And we're focusing on some key things down there, just a handful of things which will make a difference.
And the big one is improving the development rates there and the productivity of the equipment in general. And we're certainly seeing some good early wins there.
Greg, both Penasquito and Cerro Negro are through the diagnosis and design phases and firmly their delivery phases. So we're through that and we're into the 18 months delivery. Eleonore is now in there. They've been through the diagnosis and they're now under the design phase. So the two assets that deliver significant value and Penasquito delivers huge value, we're firmly in the deliver phase.
Yeah. Looks like
you could see that in the Q4 results. Thanks, Tom.
Thanks, Greg. Thanks, Greg.
Our next question comes from Josh Wolfson of RBC. Please go ahead.
Hi. Just switching over to the capital allocation side of things. With the buyback, I guess, half complete within a pretty short timeframe, if and when that's ultimately exhausted, I guess, prior to the full sort of timelines, how do you see that program going forward? And I guess, what's the motivation to look at allocating funds towards that versus a dividend?
Yes, Josh, thanks for the question. So on the buybacks, I think I would consider that really tied to our asset sales. And so between that and an opportunity to buy back shares at a very, very attractive share price, we feel like that was the right thing to do. And so we will continue that program through the end of 2020. And we will also consider at these gold prices, when we think about capital allocation, we'll continue to manage the balance sheet and we'll think about other shareholder friendly actions.
Certainly, a key one of those will be to determine our appropriate level of dividend on a go forward and sustainable basis. So that's something that we will continue to evaluate and truly to remember that the dividend at $1 is sustainable at a $1200 gold price. So at more robust pricing going forward, that's something we will be definitely continuing to revisit.
Okay. So safe to say, I guess, the approach seems to be windfall cash flow is attributed to the buyback and business sustainability is the focus for the dividend?
Yes, that's correct.
Okay, great. Thank you.
Thanks, Josh.
Our next question comes from Anita Soni of CIBC. Please go ahead.
Good morning, everyone. Just looking at Porcupine, could you just talk about the changes to the reserves there? I know you moved Dome from or you said you were going to move Dome from reserves into Resources. But to me it looks like you've taken 8,000,000 ounces out totally out of the global inventory. Is that correct?
Probably need to go offline with you on that one, Anita. We certainly moved some century out of reserve into resource and we certainly kept some reserve in where we could still mine those ounces. So that might be one that we can quickly get, Jess and Don Do and Dean to jump up the line and take you through.
Right. And then when you were you talked about or Rob talked about applying your more rigorous drill requirements. Did you also take a look at and this is to the overall Goldcorp, all of the assets. Did you also take a look at Goldcorp's cost assumptions at this stage? Or is that still to come?
I'll get Dean to comment on that one for
you, Anita. Yes, Anita, we looked at the whole suite of variables go into calculating the reserves. So we looked at the cost assumptions. And also as Nancy mentioned during her part of the presentation, we also consider best demonstrated performance. So we don't build in, stretch or upside into any of our reserves or resource determinations.
Right. And so given that, Musselwhite perhaps won't be looking to grow as it previously did, you're okay with the cost structure that's supporting the current reserves right now?
Yes. And we also took a look at that too in terms of its best demonstrated performance.
All right. And then just in terms of areas where we saw declines at other assets that you own. So that were within your portfolio. Can you talk about so you had some wins at Tanami and you talked a bit about that. But could you just talk about what was happening at Ahafel South as well as at Marion?
Again, Anita, we can probably go offline on that detail. But I mean, there was a half way south is there's ounces coming in with the change in mining method. And Merian, we've got ounces coming in as we continue to drill out around there. Terrific story at Tanami. And the story you'll hear us talking more about is the Oberon deposit with the 1st ounces coming into resource.
That's going to be a terrific addition to the Tanami story. But more than happy to maybe jump offline and go through asset by asset and take you through that detail.
All right. Thank you. I look forward to that call.
Thanks, Anita.
Our next question comes from Mike Gellanen of Bank of America. Please go ahead.
Good morning, Tom, everyone. I just had a question. We haven't really heard much of Nevada gold mines. I know Mark Bristow spoke about it. But on Page 5, your synergy value chart, Mark spoke about another $60,000,000 of synergies in Nevada lowering the cutoff grade on his call last week.
Just wondering, do any do those fit on Page 5 anywhere? Or is this just Newmont?
Good day, Mark, and terrific to get a
question from you.
Slide 5 is just the Goldcorp synergy. So we have built into our guidance for Nevada Gold Mines the synergies that Barrick have provided publicly. So that's built into our plan. But in the $500,000,000 of cash flow that we will deliver in 2021 in the $340,000,000 of cash flow that we will deliver this year, All of that comes from the 5 new operations that came into our business from Goldcorp.
Okay. All right. Well, thank you for that clarification. See you and Greg Barnes next week.
Thanks, Mark.
Our next question comes from Adam Graf of B. Riley. Please go ahead.
Hey, everyone. Just a quick question. Just thinking down the line a bit longer term, you guys have some big projects that are JV ed with some base metal producers who have their own projects and their own balance sheet capacity. And I was just curious if you maybe could give us some color on how you're coordinating longer term with your JV partners in regards to the development and the timing of those projects considering their own they're not benefiting from the higher gold price.
Thanks, Adam. So one of the beauties of our portfolio is that some as it's now positioned is that we have across those 12 operations and the ore bodies that sit underneath them and the 3 projects that we have in either definitive feasibility study or execution, so Tanami 2, Ahafo North and Yanacocha Sulfides, the ability to sequence those projects in and they're the 3 projects that underpin the 6000000 to 7000000 ounces of steady development capital spend over the better part of this decade that Nancy was talking about. Those three projects plus the exploration potential at our existing assets and the opportunity to improve the performance of our existing assets give us a steady profile north of 6,000,000 ounces for this decade at least. So we'll talk more about that in the weeks ahead. But what that allows us to do with those 3 big projects, not Abieto, Neve Union and Galore Creek that I see sitting in pre feasibility study is for us to work with our joint venture partners to apply some of our key strategic mine planning methodology that we have within Newmont, understand those ore bodies, to optimize those ore bodies, to establish a competition for capital and see which of those come forward first because we'll only implement those in series, which of those will come first towards the latter part of this decade, if not the start of the next decade for implementation.
And I think that sits pretty consistently with how our joint venture partners are thinking about those projects. So I think we're aligned. The beauty of our portfolio is that we have plenty of time to really optimize those projects and bring them on. And we will get from each of those projects along with Yanacocha Sulfides an excellent exposure to copper as the globe goes through the energy transition. So I'm very excited about our organic pipeline and I think we can work well with our JV partners to bring them on when they're ready to come on.
Excellent. Thank you very much.
Thanks,
Adam.
Our next question comes from John Tumazos of John Tumazos Very Independent Research. Please go ahead.
Thank you for taking my question. With the interruptions at Musselwhite and Penasquito and the declassifications at Eleonore in the Yukon and Dome and the Red Lake sale. All in all, are you still happy with the Goldcorp purchase? You appeared to buy it almost at the bottom and at about 30% of what Goldcorp had spent on its assets?
John, in a word, yes, it's a fantastic acquisition. Those assets are terrific ore bodies. There's excellent infrastructure and they're in very good hands and we're going to deliver huge value from them. So it was a fantastic acquisition. And I think we're demonstrating what those assets can really do when they're in the hands of an operating company like Newmont.
Is it a reasonable hope or expectation for the Eleonore resources to come back to reserves and also the Coffey, Yukon and Dome Century Resources or should we limit that optimism just to Eleonore?
Yes, you should be optimistic about Eleonore and the upside potential as we apply Newmont exploration skills to that asset. For coffee, we've put that study back where it should be in pre feasibility study. And it's one of the deposits that our Head of Exploration is very excited about and we won at least 2 seasons of drilling to prove out that ore body. And what we're looking at with the SENTRI project is understanding what that next life, what that next layback is at Porcupine. So we're actively working that project at the right level to look to see what we can do to bring those ounces into that business and we're working and we'll continue to work bloody hard at porcupine to get their productivities up and improve their cost, which will further enhance the ability to bring essentially what will be a layback back into that mine.
Thank you for your service to the company.
Thanks, John.
This concludes our question and answer session. I would like to turn the conference back over to Tom Palmer for closing remarks.
Thank you everyone for joining us and thank you for your continued interest in Newmont. Have a good day. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.