Good morning. Welcome to the Newmont Goldcorp 2020 Guidance Webcast. 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 Jessica Largent, Vice President of Investor Relations. Please go ahead.
Thank you. Good morning, everyone. Welcome to Newmont's 2020 Guidance Webcast. 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 two. Please take a moment to review the cautionary statement shown here and refer to our SEC filings, which can be found on our website at newmontgoldcorp.com. Now I'll turn it over to Tom on slide three.
Thanks, Jess. Good morning, thank you all for joining our call. Beginning on slide four. Newmont has a track record of superior operational and financial performance, delivering over a 60% increase in total shareholder returns over the last five years. We are continuing to build on this proven record by exceeding the commitments we laid out earlier this year. We remain focused on the five foundational principles of our strategy. Keeping our people safe with a relentless commitment to our safety culture and systems, growing margins through a rigorous application of operating, technical, and exploration discipline, leveraging our leading exploration program to grow our reserves and resources, optimizing our world-class project pipeline, and maintaining our discipline around the allocation of capital.
In sharing our 2020 guidance and longer-term outlook today, I am excited about the opportunities we have in front of us to safely deliver superior value for all our stakeholders. We have the strongest and most sustainable portfolio in the industry, and our balanced set of global assets are located in the most stable, top-tier jurisdictions. We are the world's top producer of gold at six and a half to seven million ounces per year, and are delivering this with leading safety and sustainability performance. We have a proven track record of executing projects and are continually optimizing our portfolio of mines, projects, and equity investments. We are committed to a culture of cost and productivity improvements, and we are focused on delivering superior free cash flow per share and returning capital to our investors over the long term. Turning to slide five for a look back on this year.
I wanted to take a minute to recap our accomplishments this year as they set important context for 2020 and beyond. We completed two 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 delivered four projects on four continents on time and within budget, recently approved full funds for our next expansion at Tanami. We drove improvements across our portfolio. Building the value that we have delivered through our Full Potential program since we started back in 2013 to more than $2.5 billion. We are now applying all of this knowledge and experience to Peñasquito, Cerro Negro, and our three mines in Canada. In 2019, we identified $240 million in value through Full Potential from these mines.
We are on track to return over $1 billion to shareholders this year, with over $900 million in dividends and our $1 billion share buyback program we announced this morning. We completed a refinancing at the lowest coupon in metals and mining history, paid off $1.25 billion of debt related to the Goldcorp acquisition, divested Red Lake and our interest in Continental, generating $635 million in cash proceeds. Finally, 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. Turning to slide six for a look at the basis for our outlook. At Newmont, we build our plans based on conservative assumptions, including a $1,200 gold price and a disciplined approach through which mine plans are developed based on reserves and the previous best demonstrated performance of plant and equipment.
We have replaced our former Newmont Nevada operations with our ownership interest in the Nevada Gold Mines joint venture, which in comparison to our prior guidance, delivers improved costs in all years, lower near-term production before increasing in 2023 and beyond. Additional considerations for our 2020 outlook include the divestment of Red Lake from our portfolio, a change in our mining method at Subika Underground, which Rob will discuss in more detail. The ramp-up at Musselwhite, which will begin producing in the second quarter of next year, return to normal operations in early October with the conveyor coming back online. The two projects we now have in execution, Tanami Expansion 2 and Musselwhite Materials Handling. Turning to a summary of our production outlook on slide seven.
We will produce a steady 6.5 million to 7 million ounces of gold per year, underpinned by a strong base at Boddington, Tanami, Ahafo, Peñasquito, and Nevada Gold Mines, and further enhanced with production from our other nine operating mines, and our equity ownership in Pueblo Viejo. In addition, we will generate $1.5 billion of revenue per year from producing between 1.2 million to 1.4 million gold equivalent ounces, with silver, lead, and zinc from Peñasquito, and copper from Boddington. Combined, we deliver nearly 8 million gold equivalent ounces per year, the most of any company in our industry. Our guidance for 2020 reflects improved production from 2019, with the benefits from a full year at all of our operations. However, mine sequencing results in free cash flow that will be second half weighted, even with increasing investment through the year on the Tanami 2 project.
Turning to slide eight for a summary of our cost outlook. All-in sustaining costs are expected to improve from $975 an ounce in 2020 to $850 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 for investing approximately $1 billion of sustaining capital per year to cover infrastructure, equipment, and ongoing mine development. Turning to a more detailed look at some of the cost improvement drivers on slide nine. We are making excellent progress and exceeding our commitments of value delivery from our acquisition of Goldcorp. At the onset of the transaction, we committed to deliver $365 million of run rate improvements per annum by the end of 2021.
I'm very pleased to say we are now on track to exceed that commitment by nearly 40%, realizing more than $500 million of cash flow improvements in 2021 through accelerating G&A and exploration synergies, along with higher-than-planned Full Potential improvements at Peñasquito and Cerro Negro. In 2020 alone, we expect to achieve $340 million in cash flow improvements, representing over 90% of the commitment we made for value delivery from this transaction. Taking a look at future growth opportunities on slide 10. Exploration is a core competency at Newmont and a priority for investment as a means to generating value across the cycle. Our ability to grow the reserve and resource base across our balanced portfolio is a distinct competitive advantage.
In 2020, we expect to invest approximately $235 million on exploration, with about 80% of that spend dedicated to near mine exploration and the remaining 20% on greenfields exploration. Our reserve and resource work for 2019 is currently wrapping up, and I look forward to sharing the results of our program with you early in the new year. The gold price assumptions we use will remain unchanged at $1,200 an ounce for reserves and $1,400 an ounce for resources. Our 2019 reserve and resource statement will see our former Nevada operations replaced with our share of Nevada Gold Mines, the sale of Red Lake, but with ongoing exploration exposure, and an anticipated movement of reserves to resources for the Coffee and Century projects due to Newmont's feasibility study requirements. We have the deepest pipeline of top-tier projects in the gold industry, providing significant project sequencing flexibility.
We will continue to apply our disciplined and rigorous approach to optimize these projects in order to create value as they advance through our investment system, targeting a 15% or greater return rate. Disciplined exploration, execution, and project delivery remain cornerstones at Newmont and are central to creating long-term shareholder value. I now hand it over to Rob on slide 11 to discuss our operational outlook.
Thanks, Tom. As I've mentioned previously, my teams are very much focused on executing the basics safely and to a very high standard to ensure we not only hit our plan, but we better it. Turning to slide 12. We have the strongest and most sustainable portfolio in the industry. We remain focused on growing margins by applying operating, technical, and exploration discipline day in, day out, one of our biggest differentiators is an engaged and experienced workforce driving operational and technical excellence across our portfolio by collaborating and sharing leading practices and lessons learned. I'm very excited about the potential we have to safely deliver sustainable performance and steadily improving costs year in, year out. Turning now to our regional outlooks, beginning with Australia on slide 13. Australia is a cornerstone region for Newmont, delivering both cost and production improvements over the next three years.
Boddington is the largest gold mine in Australia, with production expected to be 700,000 ounces, with an additional 130,000 gold equivalent ounces from copper in 2020. Our Full Potential work is going strong, we are improving mining rates as we advance our stripping campaign in the south pit, allowing us to reach higher grades earlier in 2021. We are also advancing the autonomous haulage study at Boddington with promising future potential. At KCGM, we continue to focus on improving mine productivity while continuing to address the current geotechnical challenges and associated remediation work in the Fimiston pit. We are also optimizing mill recoveries as the Morrison starter pit begins to present higher-grade ore. In 2020 and 2021, we anticipate delivering high grade and increased throughput as we mine the Golden Pike layback. We are also very pleased to welcome Saracen as our new partner at KCGM.
At Tanami, we will continue to deliver steady production through 2022 ahead of our second expansion, which will begin to contribute significant incremental ounces in the years thereafter. Turning to slide 14 for more on this impressive project. Tanami is truly a world-class asset, capable of producing more than 500,000 ounces per year for many years into the future. The second expansion will deliver significant value through the development of a production shaft and supporting infrastructure to maximize value at depth and enable processing of 3.5 million tons of ore per year. The project also provides a platform for us to further explore a prolific mineral endowment in the Tanami district. Total investment is expected to be in the range of $700 million-$800 million over a three-year construction period.
The project will deliver 150,000 to 200,000 ounces of incremental gold production per year for the first five years through 2027. In short, Tanami Expansion 2 has the potential to extend the mine life beyond 2040, will help to reduce operating costs by over 10%, and will generate an internal rate of return greater than 15%. Turning to Africa on slide 15. 2019 will be a record year for the region, with over 1.1 million ounces of attributable gold production at all-in sustaining costs of approximately $770 per ounce on the back of successfully completing profitable projects.
In 2020, the region will step down to 850,000 ounces as a full year of production from the Ahafo Mill Expansion is offset by lower grades at Akyem, the impact of mining sequencing at the Ahafo's open pits, and a planned change in mining method at the Subika underground, which I will expand upon shortly. Akyem continues to benefit from Full Potential improvements that help offset mine sequencing, and we're advancing our resource confidence for the next phase of growth through either a layback of the existing open pit or the potential development of an underground mine. In 2021 and 2022, regional production will step up again as we complete stripping in the Subika open pit and increase tonnage from the underground. The Ahafo district provides significant potential at Ahafo North and from the underground opportunities at Awonsu, Apensu, and Subika.
The ability for Newmont to expand in this prolific region is underpinned by our successful recent investments that have created a solid platform for our future. Turning to slide 16 for more details. In October, we declared commercial production at the Ahafo Mill Expansion, which accelerates efficient processing of ore from stockpiles, the Subika underground mine, as well as harder, lower-grade ore from Ahafo's existing pits. The additional mill capacity has also allowed us to put in place pragmatic actions to mitigate the higher rock stresses that we encountered at Subika underground, as we shift from long-hole open stoping to a sub-level shrinkage mining method. This planned change in method will allow us to safely increase tonnage from the underground, improve mining costs, and capture higher efficiencies.
As we undertake these changes, production will be lower over the next two years, but will increase in the following years and improve Ahafo's life of mine returns. Over the next five years, our investments have positioned Ahafo to deliver 550,000 to 650,000 ounces of production per annum, improve our all-in sustaining costs by $150-$250 per ounce compared to the 2016 base year. Generate an internal rate of return of greater than 20%. Turning to the Ahafo North project on slide 17. Ahafo North is located 30 kilometers north of our existing Ahafo operations. It is the best unmined gold deposit in West Africa. This potential surface mine operation is centered on nine deposits along a 14-kilometer strike length and contains 3.4 million ounces of reserves and more than one million ounces of resources.
Our current plans include building a standalone mill to process 3.5-4 million tons of ore per year. If approved, the project is expected to deliver approximately 250,000 ounces per year through 2035, for an investment of approximately $700-$800 million over three years. Looking forward, we continue to work through the permitting processes by engaging with government agencies and further building on our existing strong relationships with traditional leaders and local communities. As a matter of practice, we would not take a project to full funds approval until we have all of the necessary permits, and we now anticipate a full funds decision in 2021. We remain excited about this project's potential to enhance Ahafo's already very solid performance and reputation. Turning to North America on slide 18.
The North America region is expected to deliver approximately 1.7 million ounces of gold production at all-in sustaining costs of $995 per ounce in 2020. It is also very important to note that we will benefit from Peñasquito's significant silver, zinc, and lead production, which is expected to add approximately 1.1 million gold equivalent ounces per year. 2020 will be an inflection point for Peñasquito operations and higher grade from the Peñasco Pit, while we continue stripping in Chile Colorado. Our Full Potential work is well underway and has firmly moved into the delivery phase, with $50 million in quick win improvements realized. We have built more than $100 million of further cost and productivity improvement into our three-year outlook as the team particularly focuses on improved primary crushing efficiencies, increased throughput to the processing plants, and improved performance in SAG mills and flotation circuits.
Moving across to Éléonore, we will deliver steady production and recently launched Full Potential, which will provide us a clear path to deliver further improvements to mine and mill performance. At Musselwhite, we will be back to full production by no later than early October next year after the conveyor is back online. Last week, we signed the contract for the construction and installation of this conveyor with Cementation. This is hugely important work. We look forward to working closely with Cementation to ensure it is performed safely, on schedule, and on budget. Our strategic resource development work at Musselwhite continues to advance as well. At Porcupine, the board and underground mine improves unit costs on the back of higher grade. We will launch Full Potential across the Porcupine operations in the second quarter of 2020.
Taking a look at our operation in Colorado, we continue to advance the study work to prove up the underground potential for CC&V as their annual production decreases from lower mill grades and leach pad production. Turning to South America on slide 19. In 2020, the South American region will produce approximately 1.3 million ounces at all-in sustaining costs of $940 per ounce. At Merian, we are mining harder ore, which improves mine productivity and grade but is offset by lower mill throughput. The site will enter next phase of stripping in the Merian pit beginning in 2022 before increased throughput occurs in 2024 with production from other satellite pits. At Cerro Negro, we will mine approximately 10 grams per ton in 2020 as we finish mining from Eureka and begin increasing production from Mariana Norte.
In 2021, grade is expected to increase to 12.7 grams per ton as we continue mining Mariana Central and Norte, while production from Amelia starts ramping up. In late 2022, we'll ramp up mining in the prospective Eastern District and remain excited about further opportunities from near mine exploration. At Yanacocha, we'll continue stripping the Quecher main pit while the site depletes high-grade ore from Tapado Oeste. Based on the current plan, we will start to ramp down the oxide mill in early 2021, delivering only leach pad production in the following years. However, the opportunity to expand both the oxide and sulfide potential at Yanacocha remains very high. Turning to slide 20 for more on details on our approach. Yanacocha has been a cornerstone asset to the Newmont portfolio for decades, and our ongoing drilling continues to generate promising results.
As the oxide and sulfide resources continue to grow, we will take the necessary time to ensure we understand the full potential of these deposits and are confident we are moving forward with the best value pathway. We've now combined the Chaquicocha oxides project with the greater sulfides project, because as we continue to drill the Chaquicocha Central and main deposits, we continue to find more sulfide resources, and both remain open along strike. As you can see here, the first phase of the sulfides project is expected to produce approximately 500,000 gold equivalent ounces per annum through 2030. As we continue to better understand the potential of these deposits and optimize our approach, we expect at this time to proceed with a full funds decision in 2021.
We are also advancing further work to further bridge the gap to sulfides as we find additional oxide material to extend the current mill's life and look forward to providing you an update in due course. Now to Nevada Gold Mines on slide 21. As Tom mentioned, our historic transaction to establish Nevada Gold Mines early this year will deliver significant benefits for Newmont well into the future. Our ownership interest of 38.5% will contribute nearly 1.4 million ounces of production for the next three years, and costs are expected to improve over the period to about $850 per ounce. We continue to support our partner, Barrick, as we work to deliver the improvements currently being advanced, which is approximately $135 million annually for our share, with an additional $35 million-$60 million of upside to these figures when they reach their full commitment of $450 million-$500 million.
We expect Nevada Gold Mines will prove to be an exceptional transaction for our shareholders. It is important to note that in comparison to our former Newmont Nevada outlook, we have improved average annual production by 180,000 ounces and improved unit costs by 25% for the next decade, despite seeing lower production in the next two years. I'll hand it over to Nancy to review our financial outlook on slide 22.
Thanks, Rob. Turning to slide 23. Looking forward, we are well-positioned to continue our path of industry-leading financial performance and value creation. We remain focused on executing with discipline around our capital priorities, including maintaining an investment-grade balance sheet, growing margins, reserves, and resources, and returning cash to shareholders. We have one of the strongest balance sheets in the gold sector, with more than $5 billion of liquidity and manageable debt maturities with a weighted average cost of debt around 4.5%. We are targeting a net debt-to-EBITDA ratio of one times or lower. Over the next five years, we will invest approximately half a billion dollars per year in exploration and advanced projects to develop the next generation of mines and maintain a strong reserve base. Our attributable capital will average $1.3 billion per annum over the same time period as we continue to invest in organic growth.
We prioritize returning cash to our shareholders through our sustainable annual dividend of $0.56 per share. Turning to slide 24. We expect to generate significant free cash flow through the cycle. At current gold prices, our portfolio will generate more than $10 billion of free cash flow over the next five years. Using our more conservative $1,200 gold price base, free cash flow would still total $5 billion over the same period. As shown on the graph, for every $100 per ounce increase in gold prices above our base assumption, we'll deliver approximately $400 million of incremental attributable free cash flow per year. Excess free cash will be used towards further shareholder returns and debt reduction. Turning to slide 25 for a look at one of these programs.
As Tom mentioned, this morning we announced a $1 billion share repurchase program after receiving unanimous approval from our board and generating $635 million in cash proceeds from selling Red Lake and our stake in Continental. We believe our current share price does not properly reflect the inherent value of the world's leading gold company, and we intend to execute the buyback using periodic open market repurchases throughout the authorization period. These repurchase activities will be immediately accretive to shareholders, reducing total shares outstanding and improving per-share financial metrics. Coupled with our dividend, executing a buyback program of this scale further demonstrates confidence in our future and commitment to providing leading shareholder returns. Turning to our corporate expense outlook on slide 26.
We continue to invest in our future. For 2020, we expect G&A costs to decrease to $265 million as we deliver higher than expected synergies of $120 million. Interest expense to increase to $300 million, primarily due to a full year of interest from the additional debt taken on as a result of the Goldcorp acquisition. Depreciation increases, reflecting the step-up in fair value for Nevada Gold Mines and four projects entering production in 2019. We will invest approximately $460 million in exploration and advanced projects. Finally, our consolidated adjusted tax rate is expected to be between 38% and 42% at an average gold price of $1,400 per ounce, which includes 8%-10% related to mining taxes. With that, I'll hand it back to Tom on slide 27.
Thanks, Nancy. Wrapping it up on slide 28. As we head into 2020, we are well-positioned to generate significant free cash flow in the near term and for decades to come. Our strategy and business plan lay the groundwork to truly differentiate Newmont as the world's leading gold company, as we continue to demonstrate our commitment to creating superior value for all of our stakeholders. 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 and two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Michael Dudas of Vertical Research Partners. Please go ahead.
Good morning, everyone. Hello? Can you hear me?
Michael, it's Tom here. Can you hear me?
I can hear you fine. Can you hear me now?
Yep, all loud and clear. Thanks, mate.
Great. Thank you. First question, maybe elaborate a little bit on your comments relative to Nevada Gold Mines and what has changed from the original expectations, solo versus the combined and new process? Those are pretty impressive reductions or additive to value so far.
Thanks, Michael. What we were seeing over the longer term or the medium term with our Nevada assets before the JV was our Carlin operation maturing. We were nearing the end of the open pit mine life, which is important blending material for the underground resource that is still quite extensive. One of the exciting things for us with the JV was the opportunity to combine the processing plants and the resources across Newmont and Barrick, and that really opens up value for us. We saw that back in March when we negotiated the JV, and we're certainly seeing it in the plans that are coming through now. We wanted to give you some color to what that meant for us over the long term. We certainly get significant benefit from that JV.
Second question would be, looking at relative to final investment decisions you mentioned on Yanacocha, Ahafo. As you're looking through the five-year plan and longer, is two-year within the appetite of what the balance sheet and the operational profile and the management talent can handle relative to all the issues trying to upgrade the former Goldcorp assets? Is it still going to be a little bit more opportunistic depending on funding, excess cash flows, maybe better than expected results on these feasibilities?
Yeah. Thanks, Michael. As we look at our project pipeline and how we're sequencing it, looking at over the long run, from both a project execution risk and also managing a steady spend of development capital, we would only ever do one, what we would call a major project, which is a project of the size of a Tanami 2 or Ahafo North. They're somewhere between $500 million and $1 billion. We'd only ever do one of those at any one time, and we'd only ever do a mega project, something north of $1 billion at any one time. If you look at our timeline over the next five or six years, Tanami 2 followed by Ahafo North and Yanacocha Sulfides in parallel is the sequence we would see that's managing both development cash flow and execution risk.
That's going to be around about $600 million-$700 million of development capital on average per year in managing those projects. That takes us well out into the second half of next decade.
Excellent. My final question would be maybe for Nancy, talking about capital allocation and free cash flow. How to read the asset sale versus share repurchase announcement, or the asset sales and repurchase announcement this morning, dividend payments, free cash flow sustainability at current prices versus what your plan is. If prices were to stay where they are today, is this more of a sustainable capital return number that would come to shareholders relative to what you have on the plans? Is this opportunistic because of the asset sales or share prices? Maybe flesh that a little bit more to look at longer term, how you can balance the investment relative to capital returns to shareholders. Thank you.
Sure. Great question. How I would think about it is the asset sales will be somewhat matched by the share repurchase. Again, we feel at today's valuation that there's a lot of room for us to move, reinvest in ourselves. I would think about the share repurchase to tie to the sale of Red Lake and our Continental interest. Past that, we'll continue even at today's gold price or at $1,200, we would continue to think about paying down our debt and shoring up the balance sheet. The other piece is at stronger gold prices, we will continue to evaluate our dividend policy. All of those things, and it's really the way to think about it is discipline around our capital allocation and reinvesting in the business, and then also shoring up balance sheet and sharing those returns with shareholders.
It's all of those things, but the share repurchase is clearly in our minds tied to the asset sales.
That's very helpful. Thanks, Nancy. Thanks, everyone. Good luck.
Thanks, Greg. Thanks, Michael. Greg's next.
Our next question comes from Greg Barnes of TD Securities. Please go ahead.
Yes. Thank you. Nancy, just wanted to confirm that the $1 billion share back is a commitment. You will do the entire $1 billion over the next 12 months?
We're going to say up to $1 billion, but yes, that's our plan is to move forward with that. It's really tied to the asset sale, so we'll start with those proceeds, but our authorization is for up to $1 billion by the end of 2020.
Okay. Just turning to Cerro Negro, you've got $75 million of growth CapEx for 2020. I wonder what the growth project is at Cerro Negro.
Yeah, I'll pass over to Rob to answer that. It'll be associated with opening up the Eastern District.
That's great, Tom. It's a pregnant pause. What we're really focusing on Cerro Negro is a number of things, certainly, we are looking at the growth opportunities, which we believe is still very significant, as well as just focusing on the basics. This is the most sensible near-term development that we're doing.
It's not expanding production. It's more extending production, I guess, is what you're looking at?
No, it's not expanding. It's really just, again, providing further options for us in the future and just other mining phases and just making sure that we've got that certainty moving into the future.
Okay.
Greg, just to further clarify, in terms of the Cerro Negro operation, as you open up those next set of deposits, which is about maintaining current production, that's classified as development capital, some of the money you spend to do that.
Okay, fair enough.
That's investing into a new deposit.
Yep. Thank you. Fair enough. That's enough for me.
Thanks, Greg.
Again, if you would like to ask a question, please press star then one. Our next question comes from Carey MacRury of Canaccord Genuity. Please go ahead.
Good morning. Just wondering if you can give a little bit of detail around the throughput assumptions at Cerro Negro, Éléonore, and Peñasquito for the next couple of years that are baked in the guidance?
Thanks, Carey. I'll pass across to Rob to give you some comments on that. What's important as he's just gathering that material to answer that question is that we have stepped back and looked at previous best demonstrated performance for both mining equipment and processing plants at all of our operations, including the ones that you've mentioned, and then built our plan and our Full Potential improvements off that base. I might get Rob to just give you a bit of a flavor of that, and then happy to go offline with some more detail as needed.
Yeah. Thanks very much for that question. I'll start off at Peñasquito, and really one of the key things that we spoke about in the Full Potential was just improving the front end, and some of the biggest amounts of value that we can deliver there is getting more throughput through the plant. We are targeting up to another 6 million tons going through the plant. That's what we're really targeting in next year. As Tom said, it is based on best demonstrable performance. Certainly, at Peñasquito, that's where the key focus is. At Éléonore, it really is about a consistency in production that we are hoping to achieve. Similarly with Cerro Negro, that we're not going to see any great increases.
It really is about making sure that we've got the basics in place, the foundations in place, and we're also operating it like a Newmont site of old. In short, Peñasquito, the plant operation is really where we're going to ratchet it up, and then it will be a steady performance at Éléonore and Cerro Negro.
At Peñasquito, I think Goldcorp was averaging 105,000, 110,000 tons per day. Is that the sort of run rate we can expect, and then add 6 million tons to that number?
Well, we're certainly not looking at tons per day anymore. It really is over the annualized rate. Certainly, the 6 million tons is what we're targeting over the annualized. That would be a good assumption to make.
Then maybe just on Peñasquito as well, maybe just the grade profile over the next couple of years?
Let me just have a look at that.
Just while Rob's pulling out some of those grade numbers for you, Carey, the real focus for us at Peñasquito is a very similar story to Boddington over the last five, six, seven years. It's the interface between the mine and the mill. Our focus is on understanding fragmentation of the ore that's being presented to the crushing systems and ensuring we're presenting the right size material to the SAG mill so that they are working at their optimum and then presenting the right fragmentation size to the flotation plants to optimize recovery. Our focus is on looking at that front end of the mill, the mine performance, and the front end of the mill performance in order to get best throughput and recovery for that mine rather than focusing on an instantaneous tons per day number.
We're looking at what generates greatest value for Peñasquito as a result of that work.
Just following up on the grade issue, what we are going to see next year is an increase in the amount of gold per ton. This year we've been averaging around about the 0.5 and that we will see it going up to about the 0.65, 0.7 grams per ton.
Okay, great. Maybe one final question. Musselwhite ramping up next year. I'm just wondering what sort of ounces you have in the 2021, 2022 relating to Musselwhite.
Let me just look at my notes here.
Rob, I can jump in with that one. I've got them here in front of me. You'll be somewhere around the 200-220,000 ounces. That's about Musselwhite's performance.
Okay, great. Thank you.
Thanks, Carey.
Our next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.
Great. Thanks a lot. Just wanted to continue on Peñasquito, and now that Rob has the grade profile ahead of him. You mentioned the grade going to 0.65 to 0.7 grams per tonne in 2020. In the old technical study, we had two years of higher grade and then sort of coming off. What does the 2021 and 2022 grade profile look like?
What you said is exactly what we're still seeing is with the stripping and the mine sequencing, that we will see it kind of peak in the 2020, and then it will come off slightly in the 2021 and 2022.
When you say slightly, like the 0.65-0.7, do we go to the lower end of the 0.65 to 2021 and then slip below that in 2020? I'm just trying to understand the grade.
Yeah. Tanya, I'd look at the numbers for 2020 and 2021, what you talked about 2022 getting back to levels similar to this year.
Okay.
Then it'll come up a little bit post that as we go through mining sequence. As we're going through those lower gold grades, we actually come into higher silver and zinc grades. You do get some GEO offset for those lower gold grades that we need to keep in mind.
Okay. If I understand it correctly, 0.5 for this year, we go to the 0.65 to 0.7, slightly lower than that in 2021, and then back to 0.5 in 2022, and then back up again in 2023.
Tanya, it's greater than 0.7 in 2020.
it's greater than 0.7 in 2020.
Yes.
Okay, that's helpful. Still at that throughput rate that Rob mentioned, no change in throughput over this period.
No. Well, hopefully we'll see an increased throughput over the years that this is really the first step, and it's going to be working the plant, and associated infrastructure as hard as possible. Hopefully it will be greater. I expect you'll see a Boddington story play out at Peñasquito, Tanya.
Okay.
Much of the equipment's the same, the ore's a similar hardness. We know all of that work. You can expect to see a similar story over that timeframe.
In your guidance that was provided today, you haven't factored that in.
Yeah. We've did some of that in, because that's built into our Full Potential improvement that's delivering the $100 million of additional value that Rob talked about. In million tons per annum, you're looking at, it might give you numbers similar to Boddington. It's sitting at around 41 million tons per annum next year and climbing up north of that the year after. Very similar rates to Boddington.
Okay. No, that's helpful. Thank you very much. Just maybe coming back to the other assets, Éléonore and Cerro Negro, when you said consistency in production for Éléonore, are you looking at this mine in your guidance in the 350-400,000 ounce range?
Yes, we are. That's correct. I think, again, as Tom says, that we are at a very exciting point at Cerro Negro. We've identified a lot of opportunities in terms of the way in which the site is run. We certainly expect that to be a key focus moving forward. The range that you just stated is exactly where we're targeting.
That's for Éléonore. Cerro Negro, would that be similar in that 400,000 ounce range?
Certainly in 2020, it's at the 400,000 at this point, and certainly in the upper 300s, as well in those outer years. Again, as I mentioned that we are at the point where having these assets for a little over six months, that we see there's a lot of improvements that we can make, especially in the productivity side underground with the development and the materials handling. Those are things which will get factored into the out years in the future. Certainly, again, the guidance which you're suggesting is where we're aiming for.
Okay. Maybe just one more on guidance. The Nevada assets. You mentioned your share. I'm just going to find the page of the guidance. I'm sorry, I'm going back. Trying to get back to Nevada. North America. You mentioned that in the Nevada mines, that you have $135 million per annum included in synergies, which is your 38.5%, which puts about $350 million. Is that the number that you're running long term with, or is that just the 2020 number?
That's the number we've built into our plan. We talked about the upside that would be on top of what we've guided to as we expect to see the full synergy value come through. That $135 million is built into our plan and flows through year-on-year.
Year on year. Okay. Maybe, Tom, I have you on, and my last one is just, we saw that the Continental sale, you had mentioned in your Q3 that you were reviewing your investment portfolio or [the TMAC]. Are those under review?
Tanya, I've got Randy here with me, so I'll get him to talk to what we're looking at with our equity portfolio.
Hi, Tanya. Thanks for the question. We are indeed reviewing the full equity portfolio and would expect to see some progress on transactions over the coming quarter.
Perfect. Great. Thank you so much.
Thanks, Tanya.
Our next question comes from Matthew Murphy of Barclays. Please go ahead.
Hi. Just some questions from your cost discussions. One is on Boddington, the autonomous haulage. Are you still just studying that, or is the spend on actually a rollout?
What you see in our guidance is an assumption that we proceed with autonomous haulage at Boddington. That's built into our guidance, Matt.
Okay. Is that a significant investment to make that conversion?
What you're looking to do is, as we look at the work we've done, there's a couple of things that come with autonomous haulage. One is the improved productivity and safety that you get from an autonomous haulage fleet. The other thing that's happened at Boddington is the work that we've done over the last five or six years has enabled us to move a whole lot of resource into reserve and extend the life of that operation. We're at a point now where we can look at a fleet change-out, and change out the fleet of Caterpillar 793s with a fleet of autonomous 793 Caterpillar trucks, and we can get a full life of that fleet, given the mine life we have in front of us at Boddington. We're looking at a fleet replacement.
It'll be buying a new fleet of the order of 40 793 haul trucks, and then we'd get some revenue from selling the old fleet. That's what we're working through at the moment.
Interesting. Okay. Thanks. Then just on Africa, I guess, there's discussion around changing some of the sequencing, changing the mining method, and just as I look at all-in sustaining costs, you've got 2022 in sort of the $800-$900 range. I think it used to be around $780 or so. Is there anything that has changed that prevents you eventually getting below that range?
No, Matt, it's more about some higher costs in the early years as we change to that different mining method, which is a form of caving. Just you don't have the parent rock cave-in. You keep a cracker in place and drop waste material on top. There's some cost associated with setting up that mining method over next year and the year after, and then we get back to the mining costs that we had expected to see at Ahafo, and then we get greater production. We get more ounces over the long run, over longer term.
I think, Tom, as well that we are in the natural part of the sequence where we are doing that waste stripping to get to that ore in future years. Certainly as Tom says, Matthew, that there's no reason why we can't get back to those historic levels.
Okay, great. Thanks.
Thanks, Matt.
Our next question comes from Anita Soni of CIBC. Please go ahead.
Good morning, everyone. My first question is with respect to the sustaining capital when you calculate your all-in sustaining costs. I think it says 880, and then there's also a finance and lease payments of $30 million. Is the $30 million included in the 975 total cap or sustaining capital for this year?
Yes, Anita, it is.
Okay. Adding those two together, we're at $910. What did not get included in your all-in sustaining costs then, out of that $975?
Anita, why don't we go offline and work through the detail with you? I'll get Jess to give you a call after this to work through the detail of that question.
Yeah. There's a reconciliation in the appendix, and we can walk you through that, what's in all the all-in sustaining costs, but we'd be happy to walk you through that in more detail.
That's slide 39.
I think that's what I'm looking at. I'm just trying to understand that. We can go offline. In terms of Cerro Negro, can you just remind me what's in the Eastern District? Which veins are in the Eastern District?
Yeah. We can give you some of those names. You've got the Silica Cap.
Okay.
I'll just have to blow up my picture so I can give you the names of those veins. You've got Bajo Negro. You've got
Bajo Negro? Okay.
Yeah. There's a third one, which is going to be very difficult to pronounce. Gato Salvaje. There's three deposits there. Silica Cap, Gato Salvaje, Bajo Negro.
Okay. As we go into the next few years, into 2023, basically Eureka is depleted. You're mining the remnants of Mariana Central, and you're mining Mariana Norte and the Amelia zone?
Yeah, there's more Marianas than you've articulated there. There's still quite a bit of mining in the Marianas.
Okay
before we move across the Eastern District.
Your point about Eureka getting mined out.
And then just-
Anita, Amelia is in the Marianas.
Yep
when you hear us refer to Ahafo Mill Expansion.
Yep. Okay. In terms of at Peñasquito, just to close out the loop on the recovery rates, given that Goldcorp had just gone commercial on that PLP circuit, could you give us an idea of what you expect in terms of recovery rates for the next few years at Peñasquito?
Yeah, Anita. You're going to see us in the mid 70%.
Okay. On gold, and then on silver as well? Can you tell me?
Don't have those numbers at our fingertips. I'll just check with Rob if he does. Otherwise, we'll go offline and get you those details.
All right. That's it for my questions. Thank you very much.
Thanks, Anita.
Our next question comes from Adam Graf of B. Riley FBR. Please go ahead.
Thank you. Good morning, everyone. Just a couple of quick questions. Tom, I think you mentioned that Century and Coffee, you're moving those back from resources to reserves. I can assume they're also moving up from the pre-feasibility to your feasibility gate, and maybe you could give us some color on the timing of decisions on those projects now that they've moved to your feasibility gate.
Sorry, Adam, they've moved the other way. Goldcorp had them at feasibility. We've moved them back to pre-feasibility. Because we need a feasibility study to underpin a reserve declaration, we're moving their reserves back to resources. It's the opposite direction.
I misunderstood. Maybe also a question about Pueblo Viejo and Barrick's expansion there. Have you guys been in conversation, and how will your participation decision be made going forward?
Yeah, thanks, Adam. We've been active and patient. We've had a number of our technical team working with the Barrick team on that project scope, working very well together. We also participate through the Pueblo Viejo board meeting, and there's a number of committees that sit underneath that. We support that expansion project, and we'll participate as required.
Excellent. As soon as they make a decision, it'll go into your capital cost estimates.
It's already built into our estimates that we provided you in our guidance.
Excellent. I didn't realize that. Thank you very much.
Thanks, Adam.
This concludes our question and answer session. I'd like to turn the conference back over to Tom Palmer for closing remarks.
Thank you, operator, and thank you all for your time and for your ongoing interest in Newmont. Thank you.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.