紐蒙特黃金公司 (NEM) 2016 Q3 法說會逐字稿

Good morning and welcome to the Newmont Mining 2016, third quarter earnings conference call. All lines will be on a listen only mode until we open for questions and answers. Today's conference is being recorded. If anyone has any objections, please disconnect at this time. I'd now like to turn the call over to Meredith Bandy, Vice President Investor Relations. You may begin.

Good morning everyone and welcome to Newmont's third quarter earnings conference call. Joining us today are Gary Goldberg, our President and Chief Executive Officer; Laurie Brlas, our Chief Financial Officer, and Tom Palmer, our Chief Operating Officer. With that I'll turn it over to Gary.

Thank you for joining us for joining us this morning.

Our team delivered another strong quarter by executing our strategy, which is to improve the underlying business, strengthen the portfolio, and create value for shareholders. Before we get into the details I want to cover some news.

First, we are welcoming Nancy Buese to the Newmont team as our new Executive Vice President and Chief Financial Officer beginning October 31. Nancy is an accomplished finance leader with extensive expense in the natural resources sector and most recently served as Executive Vice President and CFO for MPLX, a publicly traded energy Company with $6 billion in revenues. Prior to that, she was CFO for Mark West Energy Partners, a publicly traded midstream energy Company, whose valuation grew from $50 million to $16 billion during her 11 year tenure.

I'd like to thank Laurie Brlas for her many contributions to Newmont. Laurie is retiring to focus on her board assignments and spend more time with family. She will remain with us through the end of the year to ensure a smooth and orderly transition. Since Laurie joined Newmont, we have lowered net debt significantly and earned the gold sector's best credit rating.

The second news update I'm pleased to announce increased dividends in the fourth quarter as a result of higher gold prices, and beginning in 2017, through our enhanced dividend policy. We are also putting strong free cash flow to good use by retiring more debt and we announced this morning a $500 million debt tender.

Third, I want to recognize our team in Suriname for delivering Merian into commercial production safely, on schedule, and more than $150 million under budget. Finally, I will point out that Batu Hijau was classified as an asset held for sale and reported as a discontinued operation in our third quarter and prior period financial results.

Turning to slide 2, please take a moment to review our cautionary statement before we turn to Newmont's performance for the quarter on slide 3.

We continued to improve the business by lowering total injury rates by 12% compared to the prior-year quarter. Keeping all in sustaining cost at $925 per ounce, slightly higher than last year but still in line with our 2016 guidance, and increasing gold production by 3% to 1.25 million ounces. Portfolio improvements for the third quarter included completing Merian on schedule and $150 million below budget, and advancing Long Canyon where we expect the first pour of gold next month for about two months ahead of schedule.

We also continued to generate more value by increasing free cash flow by more than 50% over the prior-year quarter to $240 million, improving adjusted EBITDA by 30% to $666 million, lowering our net debt by another 13% and most importantly, doubling our fourth quarter dividend and significantly enhancing our policy for 2017. This performance is underpinned by superior safety and sustainability.

Turning to slide 4. Sending people home safely every day is a matter of principle, and a great indicator of how will our operations are running. We have reduced our injury rates by 54% since 2012.

We are also honored to be named the mining sector's top performer in the Dow Jones sustainability Index for the second year in a row. One of the standout performances for the quarter was at Merian, where the team has worked for five consecutive months without an injury. Which is an exceptional record for an operation that is in transition.

Turning to slide 5 for more on that transition. We poured first gold and achieved commercial production at Merian on October 1. Our newest operation gives us a foothold in a prospective gold district and will deliver more than a decade of profitable production.

Merian also showcases our work to optimize projects and build them on schedule and budget. As well as our successful exploration program. Over the last decade, our geologists have grown Merian from a maiden resource of a couple hundred thousand ounces, to a reserve and resource base of 4.5 million ounces. And we continue to see strong exploration results beneath and near the current mine.

Turning to Long Canyon on slide 6, construction is nearly complete and we began placing ore in the leach pad in April. We are confident that we will reach commercial production next month. We optimize this project by building a Leach facility instead of a mill, relying on refurbished gear versus new gear, and leveraging regional staff and infrastructure. Long Canyon's Internal Rate of Return at a $1200 gold price is in the high teens. Here too we have grown the reserve base to 1.2 million ounces by the drill-bit and mineralization remains open in all directions.

Moving to the full portfolio on slide 7. Even after removing Batu Hijau, we have lowered our all in sustaining costs by 22% since 2012, nearly two thirds of these savings other result of cost and efficiency improvements. While our third quarter costs are slightly higher due to inventory changes and ongoing investment and growth, we remain on track to meet our improved 2016 outlook.

Year to date gold production of 3.6 million ounces is on track to meet guidance of between 4.8 and 5.0 million ounces. Key drivers for the quarter included new production at Cripple Creek & Victor, improved throughput at Boddington and KCGM, and strong performance at Carlin and Ahafo. Year to date all in sustaining cost of $910 per ounce are on track to meet guidance between $870 and $930 per ounce.

During the third quarter, lower capital expenditures offset higher costs from inventory changes at Yanacocha and Ahafo. With higher production, lower capital, and an improved gold price, we are on track to generate strong free cash flow in 2016. We look for to sharing our refreshed five-year outlook in the first quarter of 2017. It will reflect effective execution our strategy and feature steady gold production as new ounces offset asset sales, costs that align with previous guidance, and our ongoing investment in core assets and projects, and capital costs that demonstrate both continuous improvement and continued growth.

Turning to slide 8. We positioned ourselves to invest in growth during the downturn and have benefited from lower competition for construction resources and equipment. As a result, we have been able to self-fund five projects that will add about 1 million ounces of gold at average all-in sustaining cost of less than $700 per ounce over the next two years. By advancing our best projects on time and at or below budget, we've also been able to achieve competitive returns. All of our projects provide internal rates of return in excess of 15%.

I'll turn now to slide 9 for brief update on the pending sale of our stake in Batu Hijau. We expect to complete the sale during the fourth quarter and are making good progress. This includes receiving required approvals from the government of Indonesia, our buyer receiving shareholder approval for the transaction, and resolving certain tax matters pertaining to the sale. Outstanding conditions include concurrent closure of the sale of PTMDB stake, and PTNNT, a valid export license at closing, the current export permit is valid through the 22nd of November, and no material adverse events.

With that I'll turn it over to Laurie.

Thanks Gary. And good morning everyone.

I'm pleased to report that we delivered another great quarter with some exceptional financial results. I also want to thank Gary and the Board and everyone at Newmont for their support over the last three years. It's been wonderful to be part of the transformation here, and I feel very confident that Newmont is in good shape and in good hands and I look forward to watching the next chapter unfold.

Now before I get into the reconciliation of GAAP earnings, I want to comment on the accounting treatment of PTNNT. As Gary mentioned, we have made good progress in meeting the conditions precedent for the sale. And as a result, we've met the conditions for held for sale accounting, and we are now treating this as a discontinued operation.

That means that all P&L line items are collapsed and appear in discontinued operations. Balance sheet items are collapsed and appear as assets or liabilities held for sale. You will see this as the case for all periods included in our SEC filings as well is in the press release. As we had indicated would happen with this change, we did record the expected loss. So with that let's look at the reconciliation on this slide.

GAAP Earnings per Share is a loss of $0.67. It includes a $577 million non-cash loss related to the reclassification of Batu Hijau as an asset held for sale. We also adjusted for other discontinued operations and Batu Hijau earnings for the quarter of $0.13.

Net income attributable to Newmont shareholders from continuing operations has been $0.32 per share. The primary adjustments to net income were a $0.03 per share revision related to the La Quinua leach pad due to changes in expected recoveries from releaching the pad and $0.03 per share in other minor adjustments. The net result was adjusted net income of $0.38 per share, an increase of $0.25 over the prior-year quarter.

Now turning to slide 11 for a look at our third quarter financial performance. Increased sales volume, along with higher gold price, enabled us to improve our revenue to $1.8 billion, up 15% from the prior-year quarter. Adjusted net income was almost triple compared to the prior-year and adjusted EBITDA increased by 30% to $666 million.

Free cash flow also improved during the quarter by 51% to $240 million, benefiting from higher gold pricing and lower CapEx. Strong free cash flow enables the to continue to advance our capital priorities to fund profitable growth, repay debt, and return cash to our shareholders.

Gary talked about the efforts to fund the growth and yesterday and today we announced moves to act on the other priorities. This morning we announced a $500 million debt tender targeting our 2019 and 2022 debt towers. Year to date, we have paid down $1.1 billion in debt, including $330 million on PTNNT's credit facility. With a total of $1.6 billion, this tender puts us well ahead of our goal to reduce gross debt by up to $1.3 billion by 2018. After completion of this debt tender, we will have reduced our interest expense, and our debt schedule is clearly very manageable.

Turning to net debt, we continue to target a net debt to EBITDA ratio of about one time at $1200 gold. As you can see on the slide, we are well below our competitors on this metric. The quarter end net debt to EBITDA of 1.1 times is assuming the proceeds from the sale of Batu Hijau to create a consistent comparison at the PTNNT EBITDA is excluded given the accounting treatment. We see potential for this metric to drop even further in the near-term, with the ramp-up of Merian, Long Canyon and CC&V. Reducing our net debt provides flexibility going forward and paying down gross debt reduced our interest expense. So we focus on a balance of the two efforts.

Now I like to spend a few moments on a new dividend policy on slide 13. Yesterday we announced that the fourth quarter dividend will double based on the average gold price achieved during the third quarter in line with our previous dividend policy. We saw also announced an enhanced gold price linked dividend policy starting in the first quarter of 2017. The new policy increases the annual payout levels to provide additional upside to shareholders as gold prices increase.

In addition, because of our confidence in our ability to generate free cash flow at lower gold prices, we have also increased the payout at lower levels. At current spot pricing of $1270 per ounce be expected first quarter dividend would be $0.075 per share, triple the prior year quarter dividend.

The enhanced dividend policy reflects our capital allocation priorities detailed on slide 14. On this slide you can see the primary sources and uses of cash year to date, and how we applied them to deliver on our capital priorities. Year to date cash flow from operating activities of continuing operations totaled over $1.3 billion. Which was deployed to fund profitable growth. We continue to self fund our projects, about half of our capital expenditures to date were used to develop projects at Merian, Long Canyon, Tanami, and CC&V.

In repaid debt, we've repaid nearly $800 million of corporate debt so far this year. The majority of that debt was paid early, lowering our future interest cost and highlighting our comfort levels for future cash generation and returning cash to shareholders. As I've already mentioned, our recently announced dividend was double the previous quarter and we announced the enhanced dividend policy which will pay out at higher levels across all cycles.

With that, we ended the quarter with over $2 billion in consolidated cash. The addition of the proceeds from the sale of Batu Hijau will bring that to nearly $3 billion.

And with that I'll hand it over to Tom to talk about the operational results.

Thanks Laurie.

We continue to deliver strong operating performance in the third quarter. Most notably lowering injury rates by 12% and working without injury at Tanami and Merian. Producing slightly more gold as increases at Cripple Creek & Victor, Carlin, and Boddington more than offset declining production at Yanacocha. And maintaining capital discipline and delivering efficiency gains at our operations and projects.

Our cost performance for the quarter was impacted by some accounting charges including a write-down on the La Quinua leach pad in Peru, and inventory drawdowns in Africa. And some operational changes including lower grade deep transitional at Yanacocha, and a geotechnical event at Silver Star, one of our Carlin surface mines.

Turning to original performance on slide 16. As Gary mentioned, we're conditioning phase one of Long Canyon. We added Sinai to the leach pad last week and we shipped carbon to Carlin for stripping and produce first gold next month. Studies to pave the way to develop phase two of Long Canyon are also underway. We've completed the Cripple Creek & Victor expansion, the mill is producing as expected, and ramp-up of our New Valley leach facility and recovery plant is progressing on course. And this performance keeps us on track to meet our investment case.

Finally, we are extending our Exodus portal mine to the Northwest, work to install [arrays] and some ventilation equipment is underway, and this project will reach full production in 2018.

A slip at the Silver Star mine in the Carlin North area will impact the fourth quarter production. Fortunately we are monitoring the wall and had evacuated people and equipment well ahead of the slip. As context, mining at Silver Star is expected to end this year, so there is no impact to longer-term production or costs.

We're making good progress at [level] underground where we've fine tuned our ground control plans, and developed special [root bolts] designed for the prevailing conditions. We've also changed our mining methods in some areas of the mine to address this challenge. And lastly, Andrew Woodley, an experienced mining leader, will join the Newmont team on January 2 to run our North American business.

Turning to South America on slide 17. Gary and I were in Suriname two weeks ago to congratulate the team shortly after they first poured first gold at Merian. We were pleased with how well and how safely the transition from construction to operation is going.

We are keeping our options open again at Yanacocha through the potential development of Ketchamain to extend oxide production. We're also advancing our sulfide studies. We have three drill rigs operating in our Chaquicocha line and are testing autoclave recoveries at our labs here in Denver.

Finally we are working to revise our reclamation plan for Yanacocha to update the scope, timing, and cost estimates, whilst preserving optionality for future development. We will provide an update with our fourth quarter results.

Turning to Australia on slide 18. We started full potential in Australia nearly four years ago. And the program continues to yield positive results. We delivered record throughput at Boddington and KCGM during the third quarter, and I expect this performance to continue.

I'll also take this opportunity to recognize the team at KCGM, who've achieved significant improvements in safety, costs, and production since Newmont took a stronger leadership position at that operation last May.

At Tanami, the dual decline is in use. Engineering, procurement, and demolition for the mill expansion is complete, and construction of the new facility has begun. Our work to optimize the mine at Tanami continues, including adding ventilation to support future development, and we remain on track to finish the expansion by mid-2017.

Finally turning to Africa on slide 19. The team at Ahafo continue to deliver solid performance achieving steady improvements in mill throughput and recoveries. And Africa remains our lowest region for injuries. Looking forward, we expect to reach a decision to fund the Ahafo mill expansion and some bigger underground projects in the fourth quarter.

I'm pleased with our strong operating performance so far in 2016, but we still have opportunities for further improvement. And I look forward to bringing you up to speed on those improvements in future calls.

With that I'll return the call to Gary on slide 20.

Thanks Tom.

Our project pipeline, which I believe is the best in the gold sector, gives us the flexibility and optionality we need to grow margins while maintaining steady production levels. This version of our pipeline shows a timeframe for delivering projects into production all the way out to our Greenfields exploration prospects on the far left. Earlier stage projects represent an additional upside to our production and cross guidance and the next cabs up the rank are the Ahafo mill expansion, and Subika underground mine in Ghana.

Turning to slide 21. The Ahafo mill expansion is designed to leverage existing infrastructure to build capacity and improve costs. It would also offset lower grade ore and accelerate profitable production from stockpiles. The Subika underground mine will produce ore grades that are three times higher than the current surface mine grades and create a platform to explore the region's significant underground potential.

As Tom mentioned, we expect to reach decisions on both projects in the fourth quarter. If approved, they would add between 225,000 and 300,000 ounces of gold annually with first production in 2018 and lowers Newmont's all-in sustaining costs. Ahafo is a great example of our success in extending mine life and reserves through exploration.

Turning to slide 22. Our team has added 123 million ounces of gold reserves by the drill bit over the last 15 years. Exploration remains a core competency and the most cost-effective way to add high-quality ounces to our reserve base. In fact about 60% of the gold we will mine this year was discovered by Newmont geologists.

Recent success stories include Long Canyon, where we have increased reserves and measured and indicated resources by more than 50% since we began reporting reserves in 2013. At Merian where we have grown the base by more than 165% to about 4.5 million ounces since 2010. At Tanami where we have expanded our base by 200% since 2003 and confirmed the potential to double it again by expanding existing deposits and developing adjacent discoveries. And finally at Ahafo where we have more than doubled our base since 2003. What you are not seeing here are inferred resources or inventory, which require more definition before they are considered viable.

Turning to our market outlook on slide 23, low or even negative real interest rates are making gold an increasingly attractive investment, and gold exchange traded fund holdings have increased by 18 million ounces or nearly 40% since the beginning of the year. In the medium-term we expect prices to rise on improved fundamentals. On the supply side, three year average gold discoveries have dropped by more than 75% between 2007 and 2012. And mine supply is expected to decrease by about 6% from 2015 to 2020 due to aging ore bodies and slower project development.

On the demand side we expect a rising middle class in China and India to drive steady growth. Taken together, the two countries represent more than 50% of current consumer gold demand. Despite these positive signs, our strategy remains the same.

Turning to slide 24. We have built a solid foundation over the last 3.5 years and our work to put improve our performance, portfolio, and balance sheet continues. But we are not relying on rising gold prices or resting on our achievements. Our goal is to be the world's most profitable and responsible gold business, and you can count on us to continue raising our game by delivering world-class safety, sustainability, and technical performance, continuing to optimize our operations and our portfolio, maintaining a strong balance sheet, and leveraging it to grow value, repay debt, and return cash to shareholders.

Thank you for your time. I will now turn it over to the operator for questions.

(Operator Instructions)

Andrew Quail, Goldman Sachs.

Good morning Gary, Laurie, and Tom. First off, thank you Laurie very much for your help over the last few years. It's been excellent working with you, and all of the best for the future and retirement.

I have a question, on -- my first question is on Ahafo. Obviously we saw a jump in cash costs and obviously the ore and sustaining cash cost. What drove that? I know you said there's inventory or negative inventory adjustment. Can you guys just elaborate on what you expect going forward at that operation?

Sure thing Andrew, and thanks for your comment. At Ahafo, we are into a point where we are going to start to draw down on the stockpile. From a cash flow standpoint that's a very positive because we have less tied up on the balance sheet. But those are generally going to be higher cost ounces than what we are mining today, so you will see a bit of a negative P&L impact on it, but we al focused on cash so it's a positive on the cash side.

Is that something that goes on for a couple quarters?

I think you're going to see that going into next year, that will come through in full detail with the 2017 guidance, but as we wait for the Ahafo mill and Subika underground, I think you'll see that continue for a bit.

Great. And then next question is on Merian. I know you guys obviously you're up to commercial production, can you guys just discuss what the upside is there on a longer term view? Sort of a 3-5 year view, especially with something like how much exploration spend you guys are going to allocate to the site?

I think a couple of things Andrew, first of all I think there is potential upside in mill throughput as we get things ramped up, we will have a better idea on what the actual potential of the mill is but we see that as a potential upside. We are not building that in in our current guidance as we look into 2017 because I'd like to give them a few months of actual experience to see before we try to build that up but I see that as one upside.

I think exploration and as I alluded to in my comments, it is still open in all directions there. We continue to see good results, whether it is an underground potential deposit or actually an expansion of the current open pit, the results we see could lead to just a bigger open pit there, with much higher grades than what the current ore body average is. And that shows up -- I don't think we've got it in this slide pack, but in the last quarter slides we had some cross-sections that showed some of that drilling below the pits.

I am very encouraged there and we continue to look, Savio is in the region, it's about 30, 35 kilometers away and that's an additional deposit. What is good about that is it's the saprolite softer ore so it would be good in terms of improving and continuing the throughput characteristics at Merian. So overall still very pleased with the potential there. Of course none of that has been built into our current guidance.

Thanks Gary.

Thanks Andrew.

David Haughton, CIBC.

Good morning Gary and Tom and good luck for the future Laurie. Got a question on Merian. So early days I know, but you been mining there for a while. Just wondering how the ore is behaving. Is it reconciling to your block-model expectations, is it going through the mill, as expected? The slide that you'd shown as a backdrop there of the stockpile looks like it was really soft ore, I wonder if you could just talk to some of those items please.

Sure. I think in terms of reconciliation, we are probably reconciling with a bit higher tons than what was expected and that's not unusual as the upper parts of the ore body on the fringes to have found that but as we get in grade as reconciling very close to what we expected. As you may recall when we announced the project, I talked about the fact we did an additional roughly $25 million worth of drilling to understand that ore body, so I'm not surprised that its coming in but that's coming in well.

I think in terms of the ore quality yes, and that's the nature of saprolite, it is soft. We have duplicated how [rosabell] handled that material in terms of using bulldozers and a backhoe to help feed into the mill and that process is going well. I think early on here for the first several months as we are in that very surface part of the ore body, we encounter -- actually, you're right at the surface where you've got roots and things from plant material, so some of that has come through but a think the teams work through a method for handling that. That's been probably the only thing that they've had to manage. I wouldn't say it was a surprise but it adds some complexity to the start up, but I think the start up and ramp-up has been going very well, and all according to plan.

Excellent. Just switching over to Long Canyon coming on-stream by year end it looks like. Wondering if at this stage you could give us an idea of how the CapEx is going. So ahead of time, is it looking like it's within your budget or better?

I think at this stage Long Canyon we haven't updated. I'd like to get it up to the commercial production point and then at that point we will update our guidance on the capital. But it's going very well.

Alright, thank you very much Gary.

Thanks David.

Andrew Kaip of BMO.

Hi Gary and Laurie, congratulations on a good quarter. David hit the -- got to my question first on Long Canyon and just the CapEx and wondering how you were tracking in that regard.

Okay. I think the same as what we told David. We are tracking -- we will give an update when we achieve first commercial production but we are tracking very well against what we expected.

Okay, thanks very much.

Thank you.

Tanya Jakusconek, Scotiabank.

Good morning everybody. And Laurie, congratulations on your future Board work. Questions, on some technical questions if I may, just coming back to Merian. Gary, saying that some things have started off well, why then the 20,000 downward revision to guidance for that asset for this year?

I know I'm splitting hairs, but maybe there is something with the plants or the roots that had to make adjustments. I'm just trying to understand what changed your guidance.

I'm going to hand over for Tom to give an update on that one.

Okay, thank you.

Good morning Tanya. We commissioned the facility exactly as we planned to this year. What we assumed in our plan which goes to those 20,000 ounces, is we thought as we are building gold inventory and circuit that before we declared commercial production we would pull off around 20,000 ounces.

As it turned out commissioning went very smoothly, but we didn't drop the first ounce of that out of the circuit until essentially October 1. Just the way the commissioning went, that 20,000 ounces didn't present in the pre-commissioning. So we started first gold for October 1, so a slight offset as we move into the remaining part of this year, around the 100,000 ounces [dropped] from 120,000 ounces.

Really a matching production-to-sales piece, because of the sales timing.

There is gold in circuit.

Okay that's fine I just wanted to know because it didn't seem with everything else, your tonnage and your grade on the block model seem to be reconciling, so just trying to understand what happened. That is helpful.

And maybe if I can continue still on the technical side, just on the geotechnical issues in Nevada. I know it is something that you mentioned for Q4, we will see a bit weaker. What is weaker? What will we lose from these geotechnical issues?

You will see our guidance for Carlin, for production we are dropping from I think a range of 1,040 to 1,100 down to 970 to 1,030. That is the impact of those geotechnical issues.

With the slip at Silverstar, we are monitoring that, we are right near the end of mining that pit, which we understood that fault, we're monitoring that area. We have stepped out to just add a bit of protection and then the slip slowly came down as I said in my notes we had people and equipment well clear of that area. That is the main driver of the impact on the revised production guidance for Carlin for this year.

Some of those ounces we are pushing to 2017. So, we were expected to be out of that mine at the end of this year. The result of this issue we push into the first part of the first quarter and some of those ounces will move across into next year.

What do you think would move across? Is it half of them, or what would be a guesstimate?

I think half would be a reasonable estimate.

Okay and then maybe just on Boddington, obviously great throughput in the quarter, maybe just what is happening there. With that operation.

I think what you're seeing at Boddington, four years of full potential work, excellent leadership from Alex Bateson that the team there at Boddington, that mill is really hitting it's straps, but all the work we've done over several years, that team is driving that mill to record performance. We have had record months, we have had record weeks, and it's really the fruition of a lot of hard work to improve the availability and reliability of that facility there at Boddington.

You think that is sustainable?

Yes. This is the result of a lot of hard work, a very capable Leadership Team and I fully expect that performance to continue and to look to improve.

Okay. That is good. And maybe one for you Gary, I know we talked about Batu Hijau, hopefully the completion of the sale very soon. And I was writing viciously some of the things that are still left outstanding.

Can you just review again what exactly are we waiting for to just complete this? What have we done, and what are we waiting for? Sorry I just missed that.

The number of the conditions precedent have been met in terms of different approval of the buyer, shareholders for instance. The resolution of certain tax issues and government approvals and I was over there last month with Randy.

We had an opportunity to meet with the team on the ground in Batu Hijau and Jakarta to thank them for all their work through the transition and all the work they've done, especially through some of the challenging last three years as we have had to work through the changed approach to getting export permits. Also had the opportunity to meet with government officials in that process as well to thank them for their support.

In terms of the key outstanding item remaining is actually getting the concurrent sale, or the sale of one of the partners. Basically [debacharies MVV] and having that sale go through. There are elements of that we are not in control of. It's stuff that they need to work through as they go through that process as that comes to a conclusion that's really the key main item that is left outstanding.

Okay so the rest of the other ones you have mentioned you pretty much have that in place. Obviously the export permit you said sometime in November it expires and you're looking to have that one renewed.

That is correct. We have submitted our application there.

Okay we look forward to closing and getting the monies. Thank you very much. So do we, thank you Tanya.

Anita Soni, Credit Suisse.

That's okay. Tanya asked the question which was in regards to the production at Merian. So I will take it off-line. Thanks.

Thanks Anita, I know you guys have a busy day today with lots of earnings coming out.

Thanks.

Chris Terry, Deutsche Bank.

Hi guys, two questions for me. Just on slide 20 where you've got the project pipeline laid out. In terms of the pre-feasibility study projects in the middle, can you just give a quick rundown on the timing that we should expect for some of those projects please?

Sure I will run through -- they all vary as you can imagine based on their complexity. The Anacostia sulfides at the top is about a two-year process to work that through pre-fease and onto definitive feasibility. Awonsu and Apensu Deeps are really underground extensions around Ahafo and that's really primarily a combination of drilling and how things work. That's probably more of the two to three-year time frame.

Ahafo North is more in the three-year timeframe as we work through the next stages for that project. Tanami expansion 2, I would see in that same sort of two- to three-year time frame, so -- it says below three to five years at the bottom. And then Federation the same thing, it's really getting the extension. Tanami expansion 2 by the way is a shaft is what we are looking at for production there because the deposit extends so much at depth.

So hopefully that gives you an idea, and that was the idea of putting the years at the bottom. Three to five as a general kind of a rule. But they all vary little bit around there.

Thanks, thanks guys. I was just wondering whether we should expect any of those a bit sooner.

And just a question on to Laurie on Batu closing. I'm sorry if you answered this before, but the $920 million gross proceeds, can you just give an update on how the amount that you will actually receive to Newmont post-closeout of any internal debt in Indonesia actually flows through to you and how that might vary depending on the exact closure date of the deal.

The debt is all paid off, so there is no debt coming, that is something that we handled already so that will not effect it. There are some deposits that the buyers already made. So that has an impact on it. And then we will also, from an accounting standpoint, we will note any cost of it. But for the most part you will get most of that money just coming directly through the $875 million that is on the slide is what we expect to come through.

Okay, thanks Laurie.

Thanks Chris.

(Operator Instructions)

As of this time we have no questions on queue. I'll turn the call over to Mr. Gary Goldberg.

Thank you and thank you all for joining the call this morning. I know you've got lots of activity going on in this space. The Newmont Team delivered another strong quarter and our work to raise our performance to the next level continues.

We are also pleased to share good news which includes appointing experience Finance Leader Nancy Buese to the role of Executive Vice President and CFO effective October 31, announcing higher dividends in the fourth quarter, and an enhanced dividend policy for 2017, and a $500 million debt tender. Delivering Merian into commercial production safely on schedule, and more than $150 million under budget. Thank you again for your time and have a safe day.

Thank you, sir. And that will conclude today's conference call. Thank you for participating. You may now disconnect.