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Newmont Goldcorp (NEM) Q1 2020 Earnings Call Transcript

By Motley Fool Transcribing - May 5, 2020 at 11:02PM

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NEM earnings call for the period ending March 31, 2020.

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Newmont Goldcorp (NEM -2.51%)
Q1 2020 Earnings Call
May 05, 2020, 9:00 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good morning, and welcome to Newmont's first-quarter 2020 earnings call. [Operator instructions] 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.

Jessica Largent -- Vice President of Investor Relations

Thank you, and good morning, everyone. Welcome to Newmont's first-quarter 2020 earnings conference call. 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 at And now I'll turn it over to Tom on Slide 3.

Tom Palmer -- President and Chief Executive Officer

Thanks, Jess. Good morning, and thank you all for joining our call. Newmont's core values of safety, sustainability, integrity, inclusion and responsibility are fundamental to creating long-term value for our investors, host governments, communities and employees. In light of the COVID-19 pandemic, our purpose to create value and improve lives through sustainable and responsible mining is more relevant today than ever before.

Turning to Slide 4 for a review of how we've been responding to these unprecedented times from a position of strength. The health and safety of our people and our host communities is paramount in every decision we make. This is why Newmont moved early and quickly, proactively taking steps to prevent transmission of the coronavirus. By taking an informed approach, with the advice of the World Health Organization, the Center for Disease Control and Prevention and external medical professionals, we fully mobilized our Rapid Response crisis management teams in early March and implemented our business continuity plans across the globe.

We've implemented wide-ranging controls at all of our operations, putting the health, safety and well-being of Newmont's people and communities above all else. These controls include, but are not limited to, canceling all nonessential travel; closing our offices and implementing remote work arrangements in early March, significantly reducing the number of people working at our operating sites to just the essential number of people required to operate and maintain the mines, processing plants and environmental control systems; enhancing temperature and questionnaire screening at entry points to our sites; implementing strict social distancing protocols in planes, buses, light vehicles, offices and dining facilities; developed leadership continuity plans to key roles across the business; increased frequency of deep cleaning and sanitization of surfaces; providing hygiene and health support to nearby communities where our employees and contractors live and work; and proactively ramping down certain operations to reduce the risk of transmission to nearby communities with limited healthcare capacity. We established a global supply chain task force to assess potential risks and develop viable contingency plans that allow us to stay ahead of any potential disruptions. Importantly, we have not experienced any material issues with our supply chain and continue to benefit from our strong relationships and transparent engagement with our suppliers.

Across our sites, we have increased inventory of key supplies to pragmatic levels, ranging from three to six months where possible, and we remain diligent in monitoring critical watchlist items. To date, Newmont has no confirmed cases of COVID-19 at any of its sites. Thanks to the discipline of our workforce in adhering to these protocols. I am incredibly proud of the way our employees have responded to these challenging times.

In addition to their strict adherence to our protocols, they have further demonstrated their commitment by joining the fight against this pandemic in the communities where they live and work. We not only want to protect our people and host communities. We want to build lasting resiliency so that our host communities can thrive after the worst of this pandemic passes. As a global business with operations in eight countries, we are committed to doing our part to combat this disease and protect our people and their livelihoods.

The strength of our business and maintaining robust relationships not only allow us to endure short-term disruptions, but it allows us to reach beyond our sites to create value and improve lives for all of our stakeholders. Associated with this commitment, we have made two important decisions. First, we have committed to maintain pay for all of our employees through until at least the end of June to support them and their families and remove short-term uncertainty. And second, we established a $20 million global community support fund to help host communities, governments and employees.

The Newmont Global Community Support Fund builds upon our other local contributions and efforts we have made over the last two months. With input from local stakeholders, we have identified three focus areas to ensure that our financial support will have the most positive impact and reach those who need it most. These three focus areas are employee and community health, food security, and local economic resilience. We will closely monitor the progress and outcomes of our support so that we are able to fine-tune and improve results along the way, with a view to serving as a catalyst for long-term resiliency and future community development.

Turning to Slide 5 for a framework on how we are preparing for multiple scenarios. As the COVID-19 pandemic continues to evolve, our deep bench of experienced leaders and proven operating model continue to serve as a competitive advantage. We are proactively planning for and evaluating short-, medium- and long-term risk through a comprehensive framework that involves the following actions. Mapping the virus in each of their countries in order to be prepared for a safe and efficient return to more normal operations.

For 2020, we're assuming the greatest impact to operations and financial performance could occur during the second quarter. However, we're also planning for other scenarios where we could see a resurgence of the virus later in 2020 and early '21. And finally, we're evaluating a lower likelihood scenario where there is a recurring seasonal impact from the virus. We are currently in wave 1, and while there is an increasing likelihood for a wave 2, we remain optimistic the worst of the pandemic will have passed in the coming weeks after worldwide efforts to contain or suppress the spread of the virus begin to take hold.

We are ramping up operations at Cerro Negro, Éléonore and Yanacocha, which Rob will discuss further. And assuming Peñasquito is able to ramp up in the coming weeks, our 2020 gold production will be toward the lower end of our previous guidance for approximately 6 million attributable gold ounces, while costs are tracking toward the higher end of the guidance range. In terms of our capital spend, we are still progressing the majority of our development and sustaining capital projects, with our key projects progressing on schedule. These key projects include Tanami Expansion 2, the development of sublevel shrinkage mining method at Subika Underground and our laybacks at Boddington and Ahafo.

However, our capital overall is trending lower than our original guidance, as we have reduced nonessential activities and spending in areas where we were significantly ahead of schedule. For exploration, approximately 80% of our budget is allocated from the mine activity in order that work is continuing. However, we have put our greenfield exploration on hold. Now definitive feasibility study work continues to advance remotely for both Yanacocha Sulfides and Ahafo North.

We will provide further clarity on our 2020 outlook when Peñasquito begins to ramp up. However, it's worth noting that our guidance for 2021 through 2024 still stands. Despite the disruption from COVID-19, we are well-positioned to withstand this pandemic, and most importantly, Newmont's long-term value proposition remains unchanged. Turning to a look at our global diverse portfolio on Slide 6.

Within our portfolio of 12 operating mines and two joint ventures, we have an unmatched eight world-class assets, each of which deliver more than 500,000 ounces of consolidated production per year at all-in sustaining cost of less than $900 per gold equivalent ounce and a mine life that exceeds 10 years. Importantly, particularly in the current context, all are located in top-tier jurisdictions that we define as countries classified in the A and B rating ranges by each of Moody's, S&P and Fitch. In addition to our eight existing world-class assets, Newmont has two emerging world-class assets in Yanacocha and Merian. These emerging assets within our portfolio offer substantial upside through further optimization and development over the coming years.

Turning to Slide 7 for a look at our production for the next decade. Our stable production profile will generate more than 6 million ounces of gold per year for the next 10 years, underpinned by our world-class assets and further supported by industry-leading exploration program and organic project pipeline. This profile is further enhanced with over $1.5 billion per year in additional revenue from producing between 1.2 million to 1.4 million gold equivalent ounces from coproducts, with silver, lead and zinc from Peñasquito and copper from Boddington. Combined, we will deliver nearly 8 million gold equivalent ounces per year, the most of any company in our industry.

Turning to our free cash flow generation potential on Slide 8. We expect to generate substantial free cash flow throughout the gold price cycle. For every $100 increase in gold price above our base assumption, Newmont delivers appoximately $400 million of incremental attributable free cash flow per year. Using our conservative $1,200 gold price planning assumption, our free cash flow would still total more than $5 billion over the next five years.

In the current gold prices, our portfolio will generate around $15 billion of free cash flow over the same five-year time frame. In addition, we have the potential for further upside with tailwinds from favorable oil prices and foreign currency exchange rates. The excess free cash we generate will be used to reduce our net debt and provide additional returns to shareholders. Looking forward, we are well-positioned to continue executing our capital priorities and staying focused on creating long-term value.

Turning to Slide 9 for a review of our performance against our promises. Simply put, Newmont is delivering on its commitments with world-class efforts in top-tier jurisdictions, gold industry's best production profile of more than 6 million gold ounces per year for the next decade and industry's largest gold reserve base of 96 million ounces. We are firmly positioned for long-term success. In a little over a year since acquiring Goldcorp, we have already realized significant value.

We originally committed to delivering $365 million per year in synergies by the end of 2021 but are now on track to realize $500 million of cash flow improvements in 2021, an increase of nearly 40%. We're accelerating G&A and exploration synergies, along with higher-than-planned, full-potential improvements. It's worth noting that these cash flow improvements do not include our share of synergies from the Nevada Gold Mines joint venture. We have received $1.4 billion in total cash proceeds from divestments, meeting our target of $1 billion to $1.5 billion.

And our commitment to leading shareholder returns remain stronger than ever, as we returned our first quarterly dividend of $0.25 per share. Turning to Slide 10 for a look at our first-quarter highlights. The strength of both our strategy and operating model is shown through our solid first-quarter performance despite the impacts and disruptive nature of the COVID-19 pandemic. In the first quarter, we produced nearly 1.5 million ounces of gold at all-in sustaining costs of $1,030 per ounce.

And we also produced 339,000 gold equivalent ounces from co-products. We generated operating cash flow of $935 million and free cash flow of $611 million. And we continued to progress our full potential program across our portfolio, with a particular focus on the more than $240 million in value we have identified at Peñasquito, Cerro Negro and mines in Canada. During the quarter, we continued to strengthen our investment-grade balance sheet, receiving $1.4 billion in proceeds after completing the sale of KCGM, Continental Gold and Red Lake.

We refinanced approximately $1 billion of debt through the issuance of new senior notes at historically low coupon of 2.25%, and we lowered our net to adjusted EBITDA ratio to 0.7 times. Newmont has one of the strongest balance sheets in the gold sector, with $3.7 billion of cash and total liquidity of $6.6 billion. In April, our board approved a 79% increase to our quarterly dividend to $0.25 per share from $0.14 per share. Newmont's first-quarter dividend will provide investors with the highest dividend yield of any senior gold miner and is a testament to our financial flexibility, balance sheet strength and conviction in the stability of our business.

We also continued to execute our buyback program during the first quarter, buying back approximately $300 million worth of shares. In total, we have now retired $800 million or nearly 19 million shares at an average price of just over $42 per share since initiating this program only five months ago, an excellent outcome. With that, I'll turn it over to our chief operating officer, Rob, on Slide 11 to review our operational performance.

Rob Atkinson -- Chief Operating Officer

Thanks, Tom. Turning to Slide 12 for a summary of our operations. The strength of our diversified global portfolio in top-tier locations, along with our operating model and capable workforce as a key differentiator for Newmont during this unprecedented time. As of today, 10 of 12 operating mines and both of our joint ventures are operating.

These operations represent approximately 90% of our planned 2020 gold production, and the U.S., Australia, Ghana, Suriname, Dominican Republic, Ontario and Argentina have all deemed mining and essential activity. While we have significantly reduced the number of people working on our sites by approximately 50%, which is equivalent to more than 10,000 employees and contractors, our overall productivity remains high, and our workforce is very focused on safely delivering to our plans. We have stopped all nonessential work. Our processing plants are being run near 100% and underground development is progressing mostly to plan.

Moving to even time rosters means there is more downtime at the start and end of shifts. But given the longer rosters now being worked, we can recoup most of this gap. We are no longer hot seating equipment and are making sure to spend the time needed to sanitize all interpersonal areas at our sites. However, I'd consider any time required for these activities as a simply must-do investment to protect the health and the safety of our workforce.

In mid-March, we proactively placed four operations in care and maintenance in order to protect the health of our workforce, neighboring communities and to comply with government-mandated restrictions, and three of these sites, Yanacocha, Cerro Negro and Éléonore have since resumed operations. Yanacocha safely ramped down on March 17 in response to travel restrictions. Limited personnel remained on site to perform essential work, including security, water treatment, environmental protection, and gold production continued from leach pads. We are remobilizing and plan to restart the mill and surface mine operations in the near future.

Given that is part of the Peru economic reactivation plan, the president has decreed that surface mines will be allowed to start. At Cerro Negro, operations were also placed on care maintenance on March 23 due to travel restrictions. Essential personnel remained on-site to maintain infrastructure, continue environmental management, provide security and continue ground control activities. We are executing our safe restart plan, including remobilizing our workforce, and the site is on track to having a significant proportion of operations working again this week.

At Éléonore, we ramped down activities on March 23 to comply with the Quebec government's restriction on nonessential travel within the province in order to mitigate the risk of transmission to Northern and remote First Nations communities. Following the directive given by the Quebec government on April 13, mining activities are no longer restricted. We have been working closely with the Cree First Nation Grand Council and the Cree Health Board to determine an acceptable path forward that protects our employees and communities, as we take the risk of transmission of the virus from other Canadian hubs into communities very seriously. Just last week, we agreed a path forward and have begun ramping up operations at Éléonore.

And at Musselwhite, we proactively moved to care and maintenance on March 23 in order to minimize fly in, fly out activity to prevent the possible transmission of the virus into communities, including nearby First Nations communities in Northern Ontario. We are developing plans to safely and efficiently resume operations. In aggregate, for the first quarter, we incurred approximately $27 million of care and maintenance costs from these four operations, which are not adjusted out of our results or unit costs. Across our entire portfolio, we also incurred approximately $2 million of COVID-19 specific costs related to items, like health screenings, travel arrangements and storage costs.

Subsequently, on April 12, Peñasquito moved into care and maintenance, and we have continued to engage with government authorities at all levels to ensure they understand Newmont's industry-leading response to COVID-19 globally and our belief that the mine can operate safely during this time. Once we are able to resume operations, the site is well-positioned to ramp back up quickly and efficiently over a two-week period. As Tom mentioned, we look forward to providing further clarification on our 2020 outlook as we get this operation back up and running. For the sites in care and maintenance, our overall spend is approximately 50% of our normal cash.

We have approximately 30% coming from our important decision to continue to pay employees through June and the remaining 20% of the traditional care and maintenance activities, such as environmental management and security costs. This investment helps to ensure we are very well-positioned to ramp up safely and efficiently, with the full support of our workforce and the local communities. Turning now to Slide 13 for an update on Australia's performance. At Tanami, I am very proud of our team for quickly adapting to the unique requirements of a fly in, fly out operation.

Their adherence to protocols, while altering transportation schedules and shift changes, is commendable. In addition, the willingness and dedication from our workforce to relocate to Darwin in the Northern Territory from other parts of Australia has allowed us to mitigate the risk of interstate border closures and continue operation. At the site, we achieved solid performance during the first quarter as an increase in ore tonnes mined helped to offset lower grade from mine sequencing. And we have improved load and haul productivity by establishing underground waste tonnes to reduce haulage to surface and increase mining rates.

Across Newmont, we are very committed to continually improve our safety performance and utilize technology where it makes sense to do so. One great example is the industry-leading robotic technology for diamond rig drilling we are deploying at Tanami, which removes our employees from the line of fire when drilling and removes the fatality risk associated with equipment entanglement. During 2020, we will integrate five robotic rigs to the fleet, and we'll replicate this impressive technology at other Newmont underground sites globally. Looking ahead, I'm really excited about the progress the team is making at the Tanami Expansion 2 project, which is progressing well as we begin ramping up mine development.

Our team advanced 560 meters in February and March, well exceeding planned rates. In March, we finished the top section of the pilot hole, breaking through to the midshaft chamber at 655 meters, and the teams are now working to establish a raise bore rig underground in preparation for drilling the bottom section of the pilot hole down to 1,460 meters. We continue to award long lead procurement packages and decided to use Australian steel for construction of the crusher and headframe to avoid any potential delays from the delivery of Chinese-sourced products during this period of uncertainty. At Boddington, our three-year stripping campaign in the South Pit is progressing well, and we expect to reach higher grade late this year and continuing through 2021.

We approved the autonomous haulage system in February and our investment of $150 million began in April with an order for 29 new CAT 793 haul trucks, along with plans to retrofit seven existing CAT 793 haul trucks, along with plans to retrofit seven existing CAT 793F. This investment in technology will enhance safety and improve productivity to generate significant value over a 14-year reserve life. And lastly, in January, we completed the sale of our 50% ownership interest at KCGM for cash proceeds of $800 million, and we continue to advance the sale of our power business. Turning to Africa on Slide 14.

After delivering a record 2019, we clearly communicated that the region would have lower production levels in 2020 as we continue to invest in the future of our world-class Ahafo operation. Both of our Ghanaian mines continue to operate, and our team responded quickly to ensure we had preventative controls in place for COVID-19, while progressing critical path items. And Akyem, solid throughput and mill recoveries helped to offset lower grades due to sequencing during the first quarter. The site continues to drive improvements at both the mine and mill, and our team is leveraging the strength of our integrated operating model by working closely with our processing and asset management operation support hubs.

In fact, at Ahafo, we continue to progress stripping at Awonsu and Subika open pit while advancing underground development for the updated mining method at Subika Underground. Our transition to a more productive underground mining method at Subika Underground remains very much on track, and we anticipate ramping up our ore tonnes mined in the second half of this year. In fact, our year-to-date development rate average has been about 35 meters per day. At Ahafo North, our project work is advancing remotely, with a full funds decision still expected in 2021.

Now to our North America operations on Slide 15. In the first quarter, we continued to advance critical path work and our full potential improvement program, which will allow us to maximize value from these assets and step up our performance over time. For example, at Peñasquito, our focus on the basics and rolling out full potential had the site breaking records for tonnage through the augmented feed circuit within just a few months. The site also achieved its highest-ever production of silver, zinc and lead during the month of March and achieved record gold recovery from the Pyrite leach plant.

For those of you who had the opportunity to attend our site tour in February, I trusted our progress toward improving value at this world-class polymetalic operation was evident, and I remain very excited about the opportunity to eliminate constraints, reduce costs and increase productivity, ultimately allowing us to extend mine life through resource conversion. Another significant milestone we recently achieved was to finalize a definitive agreement to resolve all outstanding disputes with the community San Juan de Cedros, one of 25 neighboring communities near the mine in the state of Zacatecas. This agreement was signed with the community-elected representatives and will be ratified in a general assembly that will take place when COVID-19 gathering restrictions are lifted by the government. The agreement was developed and supported through the Dialogue Table sponsored by Mexico's Federal Department of the Interior and representatives of the state government of Zacatecas.

Together with the water plant signed in December 2019, we are pleased and excited to bring months of negotiation with de Cedros community to close and really look forward to sustainably operating in this region for decades to come. The definitive agreement also sets forth terms for the Peñasquito mine to occupy more than 10,000 hectares of de Cedros Ejido's land for exploration, mineral production and other operational purposes and resolves all outstanding disputes between the two parties. This world-class asset already has reserves of approximately 26 million gold equivalent ounces, but the significant exploration potential in this prospective district will allow us to extend the value delivery for decades to come. We are very pleased with the outcome of the agreement and believe it is the best path forward for both parties to develop a long-term partnership to create value and improve lives, shifting the dynamic from confrontation to cooperation.

Lastly, in response to placing the site on care and maintenance on April 12, we are working with the government to determine a time frame for ramp-up of operations. The Zacatecas region has one of the lowest rates of cases of COVID-19, and we believe our workforce can be kept safe by limiting personnel on site and enhancing safety and health protocols around social distancing and hygiene. Turning to Canada. At Éléonore, we previously communicated that we would step down gold production driven by mine sequence changes and our ongoing efforts to integrate our geology and geotechnical models to optimize a life of plan to extend mine life.

With the site previously on care maintenance, the team took the opportunity to proactively refresh the roster schedule to be more efficient, while also progressing full potential remotely as we move into the delivery phase and leverage our experience from other underground operations. The team has also spent time prioritizing the full potential initiatives that will be implemented as we restart, including an asset management improvement plan. With a new general manager in place, we are strongly focused on the day-to-day basics to ensure strong foundation is in place as we start ramping the operation back up. At Musselwhite, our team was exceeding their commitment, and the conveyor installation was approximately 65% complete and well ahead of schedule before we place the site on care and maintenance in late March.

We now have every part for the conveyor installation in Thunder Bay, and installation of the conveyor will be the first thing to ramp up after a decision is made to resume operations. The Musselwhite materials handling project is 95% complete and will be ready for a full system test once the conveyor is installed. Full potential is progressing virtually with a focus on improvements in underground development productivity, enhanced trucking performance and technical updates to ore body modeling, and the site is ready to come back stronger than ever. In fact, we currently have four to five stopes open.

And prior to moving to care maintenance, we safely and successfully restarted the mill after nearly 10 months down and produced, well ahead of plan, approximately 15,000 ounces in the first quarter. Overall, we remain well-positioned to ramp back up safely and efficiently once we have support from our neighboring First Nations communities. Should this occur over the next several weeks, we still anticipate being back to full production in early quarter 4. Both Porcupine and CC&V continue without interruption.

And finally, we completed the sale of Red Lake to Evolution Mining for $375 million and future contingent payments of up to an additional $100 million tied to new resource discoveries. Rounding out the regions with South America on Slide 16. At Merian, we delivered strong first-quarter performance with higher ore tonnes mined as the site continues to benefit from productivity gains. In March, Merian's processing team achieved 22 consecutive shifts without downtime, smashing their previous record of 14 shifts, an example of ongoing operational excellence, despite challenging times.

Yanacocha production increased during first quarter as our releaching program successfully delivered higher ounces. And while the site was in care and maintenance, we continue to recover ounces from the leach pad. At Cerro Negro, mine sequencing impacted grade in the first quarter, but we made solid progress to improve operational standards and apply back-to-basics mining practices, which includes improving development, ground control and backfill practices. Our work to develop out Emilia was also progressing well prior to the site ramping down, and we still expect to reach this new mining area later in 2020.

However, we expect 2020 production and cost to be impacted due to the COVID-related shutdown and as we continue to improve operational standards. Looking forward, study and engineering work continues to advance remotely for Yanacocha Sulfides, and we remain on track for a full funds decision in 2021. Finally, an important milestone was passed recently, and I'm very proud of the project team who just surpassed 1 million safe hours worked in March. And with that, I'll hand it over to Nancy on Slide 17.

Nancy Buese -- Chief Financial Officer

Thanks, Rob. Turning to Slide 18 for the financial highlights. During the first quarter, Newmont delivered solid results, with revenue of nearly $2.6 billion, an increase of 43% over the prior-year quarter with the additional sales from our acquired operations and higher gold prices; adjusted net income of $326 million or $0.40 per diluted share; and adjusted EBITDA of more than $1.1 billion, an increase of 63% from the prior-year quarter. Cash from continuing operations was $939 million, driven by higher adjusted EBITDA.

And free cash flow was $611 million, an increase of 75%, to end the quarter with more than $3.7 billion of cash on hand. Turning to Slide 19 for a review of earnings per share in more detail. First-quarter GAAP net income from continuing operations was $837 million or $1.04 per share. Adjustments included $0.73 related to the gains from our sales of KCGM, Continental and Red Lake, $0.22 related to the change in fair value and impairment of investments, $0.09 related to the extinguishment of debt, $0.24 related to tax adjustments and valuation allowance, and $0.02 of other charges.

Taking these adjustments into account, we reported first-quarter adjusted net income of $0.40 per diluted share. Turning to Slide 20. As Tom mentioned, Newmont continues to respond to the COVID-19 pandemic from a position of strength, and there has been no change in our industry-leading capital allocation priority, which include maintaining and strengthening our investment-grade balance sheet, growing our margins through delivery of our full potential program, which drives incremental cost and efficiency improvements, regardless of current gold prices while also growing our reserves and resources through disciplined investment in our highest-returning projects and returning excess cash to our shareholders. We ended the quarter with total liquidity of $6.6 billion, including $3.7 billion of cash on hand and our undrawn and fully available $3 billion revolving credit facility.

Our net debt-to-EBITDA ratio improved to 0.7 times, and we proactively refinanced $1 billion of debt at a historically low coupon of 2.25%, allowing us to save approximately $17 million in annual interest payments and also improving the profile of our out-year maturities. We have continued to invest in profitable projects such as Tanami Expansion 2 and Musselwhite materials handling, and as Rob mentioned, our study work to progress the next wave of profitable production at Ahafo North and Yanacocha Sulfides is advancing. Newmont remains committed to sustainable shareholder returns across the cycles, and we continue to demonstrate this in the first quarter. Two weeks ago, we declared a first-quarter dividend increase of 79% to $0.25 per share, and we continue to execute on our share buyback program, repurchasing approximately $300 million during the first quarter.

Since initiating the program in early December, we have completed 80% of our $1 billion authorization with nearly 19 million shares retired at an average price of $42 per share. With our shares currently trading around $60, our buyback program has been incredibly accretive to shareholders. As a reminder, we build our annual business plan based on conservative assumptions, including a $1,200 gold price. And for every $100 in gold price above our base plan, we'll generate an incremental $400 million in attributable free cash flow annually.

With gold prices currently around $1,700 per ounce and favorable oil prices and foreign exchange rates, these tailwinds will more than offset any short-term disruptions, as we manage through these challenging times. With that, I'll hand it over to Tom to wrap up on Slide 21.

Tom Palmer -- President and Chief Executive Officer

Thanks, Nancy. Concluding on Slide 22. Newmont has a long and proud history of safety leadership, ESG stewardship, developing the industry's best talent and focusing on operating discipline and profitable growth. From this foundation, we remain focused on improving our ability to deliver a differentiated, superior and sustainable shareholder returns.

We will do this by developing our people, optimizing our assets, delivering our best projects, exploring our most prospective properties and strengthening our balance sheet. And I'm very excited to continue strengthening our position as the world's leading gold company, with a workforce and culture of determination that are second to none. Thank you for your time. With that, I'll turn it over to the operator to open the line for questions.

Questions & Answers:


[Operator instructions] And our first question will come from Tyler Langton of JP Morgan. Please go ahead.

Tyler Langton -- J.P. Morgan -- Analyst

Good morning, Tom, Rob and Nancy. Thanks for taking the questions. I hope you're all doing well. I think you mentioned, Tom, on sort of that mines representing sort of 90% of planned production you're operating, I was just wondering, are those operating at full rates? Or are there any sort of limitations on them from COVID? And then just with cost, I think you mentioned that your cash cost would be sort of at the higher end, and that's just kind of what -- trying to get a sense of what you're also assuming for currency and oil and if there's a benefit there.

Tom Palmer -- President and Chief Executive Officer

Thanks, Tyler. And please bear with us, Tyler, and the other people who ask questions. We're all located at different locations around the globe on our telephones at our homes, so hopefully, technology bears with us. And I hope everyone on the call is -- and your families are all safe and healthy.

Tyler, probably, the operations that we're ramping up in Cerro Negro and Éléonore and, to a lesser extent, Yanacocha, there will be a fairly slow ramp-up at Éléonore and Cerro Negro as we work our way through the logistics of moving people around Argentina to get them to work. So we'll want to work with our employees and work with the various stakeholders at a national, provincial and local township level to make sure we can move people through the country, through the provinces to get them to work. So ramp-up will be a little bit slower at Cerro Negro as a consequence. And similar to Éléonore, we held back when the Québec government lifted the restrictions because we wanted to have the full engagement of the First Nations at Cree, and we've been working with them to work through the protocols we have for operating.

And again, we want to work with them and then slowly bring people back and demonstrate to them that we can safely manage the risk of spread of infection around those communities. Yanacocha, with the decree from the Peruvian government in the last couple of days, it will allow us to ramp back up, both milling and mining operations, so that will move out of care and maintenance pretty smartly. The rest of our operations around the globe, as Rob indicated in his remarks, are largely operating as expected. We are seeing delays at shift change.

We are seeing delays associated with hot seat changes where you can't do that. You need to clean down our vehicles before another person gets on. But a number of locations, we've extended our shift roster through this time. And so you win back some of that efficiency through those longer roster times.

What I might do is ask Rob to talk to some of the costs that -- the question you asked, and I'll get Nancy to talk to some of the tailwinds and when and how we might see that coming through. Just in terms of our broader cost, we are tracking to the higher end of our guidance. We're really wanting to see -- as we indicated in our remarks, we're wanting to see Peñasquito come back out of care and maintenance. We're cautiously optimistic on that front.

We've got some very good engagement going on with the Mexican government. We have presented our plan for how we would operate Peñasquito and manage the risk of infection. We've based that plan on what I consider the benchmark on the mining industry globally, the work of the Australian government and Australian mining industry has done. So we have leveraged that work.

Those discussions have gone very well. We've also got great support from the U.S. government and the U.S. Embassy in those discussions with the Mexican government.

But we're cautiously optimistic. We want to see through and out the other side of a decision being made to come out of care and maintenance, and then we'd be in a position to provide some update on our guidance, both production and looking at cost. Rob is there anything you'd add in terms of Tyler's question around costs?

Rob Atkinson -- Chief Operating Officer

Thanks, Tom. I'd just add a couple of things, Tom. Tyler, I think just working from the basics, what we've clearly outlined is that when we're in care and maintenance, that's typically 20% of our cash. Because of the decision that we made to provide continuity in pay, that takes it up to 50%, even when you're in care and maintenance.

So that's the kind of base point. Now as Tom mentioned, at the likes of Éléonore, at the likes of Cerra Negro, that we're progressively building up, so you can expect to see that to go from 50% to 60% to 75% over the coming weeks. So that's roughly the way in which I would approach it.

Tom Palmer -- President and Chief Executive Officer

And Nancy, do you want to cover some of those tailwinds on foreign exchange and oil?

Nancy Buese -- Chief Financial Officer

Yes. Thanks, Tom. Yes, we do publish an annual sensitivity guidance, and just a couple of notes on that. So we had budgeted oil at $60 a barrel, and our sensitivity is for every $10 change in the price of -- to dollar price and a barrel of oil, it's a $25 million increase in attributable free cash flow.

So you can do some of the math around on that. Likewise, on the Aussie dollar, we budgeted a $0.75 rate. If a nickel change in the Aussie dollar rate, that's $40 million of additional attributable free cash flow. So there certainly will be some tailwinds associated with WTI and with FX, as we think about where we might land versus plan.

Tyler Langton -- J.P. Morgan -- Analyst

OK. That's helpful. And just a final question just on capital allocation. I guess you ended the quarter with a $3.7 billion of cash and have completed 80% of the buyback.

Obviously, I mean, I understand that COVID sort of creates some uncertainty, but could you just share some thoughts around capital allocation going forward with sort of buybacks and the dividend?

Tom Palmer -- President and Chief Executive Officer

Thanks, Tyler. Nancy, do you want to pick that one up as well?

Nancy Buese -- Chief Financial Officer

Yes, yes. So I think the important point on our discipline around capital allocation certainly has not changed. And we've been very clear about sharing to shareholders and also reinvesting back on our business, and we will continue to adhere to those principles. So when you think about the dividend, that increase was predicated, as we've announced earlier this year, on an oil price -- or sorry, on a gold price of $1,200.

And so if we still maintain that $1,200, that dividend is certainly affordable. And then on the share buyback, our view is that we had the $1 billion program. We're about 80% into that. We were able to get almost all of those shares well under $45.

And so our view is we'll continue to keep that program outstanding, and we'll continue to think about what we will do. But if you consider how our capital allocation will be, it will be about half back in the business. And then on the other half, we'll continue to focus on balance sheet, dividend and share buybacks. So all of those tools are still in the toolbox and up for consideration.

Tyler Langton -- J.P. Morgan -- Analyst

Great. Thanks so much.


Our next question comes from Chris Terry of Deutsche Bank. Please go ahead.

Chris Terry -- Deutsche Bank -- Analyst

Hi, Tom, Rob and Nancy. I hope you're doing well. I had a couple of questions. Just firstly on the free cash flow, just thinking about that in the next couple of quarters.

With the operations you have offline, I just wondered whether there's like a working capital implications from, I guess, overstocking some of the raw materials on site, which is, obviously, sensible, just some of the moving parts on the cost side. Just wondered if you can comment maybe, Nancy, on the free cash flow expectations or some of the moving parts for 2Q and maybe 3Q. Thanks.

Nancy Buese -- Chief Financial Officer

Sure. I'd be happy to take that one. Yes, I really don't think we'll see much. No real significant changes.

You might see, later on in the year, there will be some tax payments in Q2. But fundamentally, in order to get what we need at site, I just -- it's not going to be material to have a significant change on working capital numbers.

Chris Terry -- Deutsche Bank -- Analyst

OK, OK. And then just another one maybe again for Nancy. Just in terms of the capex, I think it was mentioned earlier in the call it's likely to be lower this year. Do we just think of that as being the same amount out to 2024, so whatever you don't spend in 2020, you would spend in later years?

Nancy Buese -- Chief Financial Officer

Yes. I think what you'll see is just as a result of some of these sites being in care and maintenance. We'll just see some of that capex roll from 2020 into '21 and, likewise, off the backside of '21. And so just some of that will get pushed over time.

I wouldn't anticipate a big "catch-up," if you will, in the plan period as we've announced.

Chris Terry -- Deutsche Bank -- Analyst

And then just the last one for me on Musselwhite. Is the decision there on the delayed start-up, is it purely based on COVID? Or have you taken the time right now while it's offline to do further work on materials handling, etc., and there's an advantage to spending the time while it's offline, getting that all right and then bringing it back online? Just wondered if you could clarify some of the thinking there.

Tom Palmer -- President and Chief Executive Officer

Yes. Thanks, Chris. The decision to put Musselwhite into care and maintenance was made on the basis of the engagement we have with the local communities, the local First Nation communities in around that mine. And there are very serious concerns around the vulnerability of those communities to the spread of infection, particularly when you have a workforce that heads up into Northern Ontario from Southern Ontario and further afield.

So engaging with that community and addressing their concerns, we made, proactively, the decision to put that operation into care and maintenance, and that includes the team we had constructing that conveying system. So there's a small team on-site who are basically keeping equipment turning over, so it's ready to restart again and managing environmental control systems. And we continue to engage very closely with those communities, as we're doing in other parts of the world to demonstrate the protocol we have in place that are working very effectively around the world and remain hopeful that as we can demonstrate our ability to manage the risk of the infection that we can start that operation back up again and get the construction of that conveyor completed. But just confirming that we have stopped all work at Musselwhite, including the conveyor construction.

Chris Terry -- Deutsche Bank -- Analyst

OK. Thanks, Tom. Actually, just one other one or maybe two small parts. But just to clarify on the 90% of production that's currently running, do we just adjust on a geo basis, obviously, with Peñasquito offline, just adjust directly for Peñasquito to think about it on a percentage of geos online? Is that the right way to think about that?

Tom Palmer -- President and Chief Executive Officer

We're just looking at each other on Webex. Nancy or Jess, do you want to pick up that one? Or we can take it offline with you, Chris, and give you some direction on that.

Chris Terry -- Deutsche Bank -- Analyst

OK, OK. Actually, one other one. Just reading on Suriname a little bit, just wondered if you could comment a little bit on the repatriation, some of the currency constraints within that country. Does that impact anything at all? Thanks.

Tom Palmer -- President and Chief Executive Officer

Yes. Thanks, Chris. I'll get Nancy, probably best to comment on that one.

Nancy Buese -- Chief Financial Officer

Yes. Absolutely, Chris. And on your other question, sorry, I was pausing for a moment, picking myself up quickly enough. But the question on that was it is not geos.

That's really gold only. And so on the Suriname question, no, we do not have concerns there. We have a ratified investment agreement that covers this particular issue, and so we are not concerned about the currency constraints there.

Chris Terry -- Deutsche Bank -- Analyst

OK. Thanks, everyone. Appreciate it.

Tom Palmer -- President and Chief Executive Officer

Thanks, Chris. Take care.


Our next question comes from Greg Barnes of TD Securities. Please go ahead.

Greg Barnes -- TD Securities -- Analyst

Yes. Thank you. On the definitive agreement that you've concluded with the Cedros community, are there financial terms in that deal that you need to address?

Tom Palmer -- President and Chief Executive Officer

Thanks, Greg. Rob, did you want to pick that one up? Or we do have Steve Gottesfeld on the line? He could pick that up as well. I might get one of you both to answer Greg's question.

Rob Atkinson -- Chief Operating Officer

OK. Tom, I might just kick off and then ask Steve to pick it up. Greg, there most definitely is financial implications to the agreement. Certainly, that's been a large part of the negotiation.

But as you remember, the negotiation, it involves land rental. It involved water. It involved compensation. It involves infrastructure improvement and as well as employment, work opportunities, etc., so there's a variety of things.

But what I would certainly say before Steve comes in is that we are very, very pleased with those outcomes. And certainly, we believe that it's very fair, very reasonable, and it gives us that certainty moving forward. But Steve, do you want to add to that?

Steve Gottesfeld -- Executive Vice President, Chief Sustainability and External Affairs Officer

Sure. Thanks, Rob. The only thing I would add really is that it was all within our budgeted plan. So where we ended up landing, all consistent with where we had expected to go.

And so while there's a water component to this, which is a longer-term commitment, which was also part of the plan, the other amounts really have all come in line. So no impacts on anything to do with guidance or anything like that based on these agreements.

Greg Barnes -- TD Securities -- Analyst

That's great. That's very helpful. On the capex...

Tom Palmer -- President and Chief Executive Officer

Greg, that was a relatively low -- sorry, Greg. The numbers are relatively low. It's not hundreds of millions of dollars. It's a few million dollars.

Greg Barnes -- TD Securities -- Analyst

OK, good. That's great. On the capex, it was low in the quarter relative to the old guidance. Does that reflect just delays in spending at some of the operations that were shut down, or is it a conscious effort to bring capex down for this year?

Tom Palmer -- President and Chief Executive Officer

It's mainly COVID-related, Greg. So we have -- you are seeing COVID-related delays, and it's largely linked to where we have made a deliberate decision to move nonessential people or only keep on-site people who are essential to keeping mines, processing plants and environmental trial systems running. So we were well ahead on sustaining capital spend, and we've made a decision to slow that down, and you can actually move people off-site and delay some of that spend and protect the risk of infection spreading. Similarly, with some of the development capital projects, like Tanami 2, we focused on what the critical path was on that project and then dropping off some work in areas, for example, where we're building a new camp out where the shaft -- where the underground mine is.

We've slowed that work down because it's not on the critical path. Sustaining capital this year is probably tracking to around the $900 million mark, development capital around the $500 million mark. So some of those rates you're seeing now will probably hold through the year. So we're probably looking capital up somewhere around $1.5 billion -- $1.4 billion, rather, across both the sustaining and development capital.

Greg Barnes -- TD Securities -- Analyst

Great. Thanks, Tom. That's helpful.


Our next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.

Tanya Jakusconek -- Scotiabank -- Analyst

Good morning, everybody. Thank you for taking my questions. Rob, maybe for yourself and for Tom, I'm just looking out. You gave us some amount for the impact of COVID on your cost structure in Q1.

But as we go through this COVID and, let's say, everything sort of normalizes to the new norm, are we going to be taking additional costs through the cost structure for COVID, either all of this social distancing that's impacting us through additional cost and/or productivity?

Tom Palmer -- President and Chief Executive Officer

Tanya, I'll kick off and I might get Rob to comment, and Nancy might even want to chip in with a few comments as well. I think we're in a new normal. I think for many, many months, we're going to be managing social distancing, and we're going to be managing screening onto our sites. So as I think about moving people around the site on buses, think about pre-start meetings, think about dining facilities, think about office cleaning, think about plane flights, think about the people you have doing temperature screening at the entry point to sites, I think we're going to be -- I think that's going to be with us -- with the mining industry for a long time to come.

So some of those costs that you're seeing, we'll get more efficient with those costs. But I think some of those costs that we're seeing, you'll see part of our cost base going forward. In the overall scheme of things, they're not huge, but they will be part of the cost going forward. Nancy or Rob, do you want to chip in on Tanya's question?

Rob Atkinson -- Chief Operating Officer

I'll kick off, Tom. Tanya, I think what COVID-19 has also done for us, it's also sharpening our focus. We already had a very keen eye on productivity before this. But what we have found is that because we stood down about 50% of people at our sites as nonessential personnel, it really allows us to take the opportunity to say, well, are they actually needed back on-site? Or should they be based in regions? Should they work from home? Or ultimately, should they still be working for us at all? So it does give us the opportunity to really think about how the business is running and what we can do.

And I think similar to doing the earnings call this way today, it's also allowing us to think about the travel that we've been doing in the past and the way in which we've been communicating, the face-to-face meetings, etc. So there's a whole host of improvement, I think, that we can make as a result of this. But just to echo what Tom said, we are into the new normal, that, certainly, we have got additional costs. But I'm very hopeful that given the creative minds that we've got, given the use of technology, given the way in which we plan, that we may, in fact, see in some areas a significant increase in productivity rather than a reduction.

But Nancy, do you want to add anything?

Nancy Buese -- Chief Financial Officer

I think that's exactly right. It's a great time for us to really evaluate our processes and consider how we think about productivity across the globe. I would note that we will be adjusting out any specific COVID-related costs. And some of those care and maintenance costs for us, in particular, as a U.S.

GAAP filer compared to other miners, is going to be a little bit less. And so the rules around the U.S. adjustments will be smaller than you'll see in other places, but we will capture those and indicate those on our filings. So there's the two pieces of it.

It's the actual cost related to COVID, but I think Rob makes the point that it's just a really good opportunity for us to take a new glance at everything and really think about our productivity at all sites and everywhere across the globe. We'll keep on that path.

Tanya Jakusconek -- Scotiabank -- Analyst

OK. And maybe, Rob, like, when you were reviewing some of the assets and some of your development work that you were doing and you had said at several sites, it was ahead of schedule. It appears that from some areas, your productivity is still quite high. It has not been impacted.

Is that a fair statement?

Rob Atkinson -- Chief Operating Officer

That's correct, Tanya. We've got some areas, which are progressing very well. And if I pick on a few, it's Subika Underground with sublevel shrinkage, the advance rates there at Tanami. And even at Musselwhite, before we stopped there, we were making terrific progress on the conveyor belt.

At Peñasquito, one of the unfortunate things post the visit, we've broken a whole host of records for the site as well. So in general, we've been very, very pleased about how things have been operating. But the likes of Boddington, Akyem, Ahafo, Tanami, CC&D, Porcupine, they are all still producing very well and very nicely, Tanya.

Tanya Jakusconek -- Scotiabank -- Analyst

OK, that's good to hear. Thank you very much, and good luck, everyone.

Tom Palmer -- President and Chief Executive Officer

Thanks, Tanya. Stay safe.


[Operator instructions] And our next question will come from Anita Soni of CIBC. Please go ahead.

Anita Soni -- CIBC -- Analyst

Thank you. Good morning guys. I just had a question on Peñasquito. I'm assuming that one is -- continues to remain shut down at this point.

And I apologize I jumped on late. But could you give us an idea of how you view that reramp going over the next couple of quarters?

Tom Palmer -- President and Chief Executive Officer

Thanks, Anita. It's Tom here. And again, I'll start off and maybe get Rob to chip in as well. I think on Peñasquito, if I understood your question correctly, it still is in care and maintenance, ramped down in mid-April.

We are cautiously optimistic. We've had some very good engagement with the government and good support from the U.S. government, U.S. Embassy in helping us engage with the government.

And we've also presented, in fact, a couple of times -- in fact, more than a couple of times now with multiple iterations outplan for a restart. And we have been able to draw upon the protocols we have in place elsewhere, which are working very, very effectively to demonstrate to the Mexican government that we can safely ramp up Peñasquito, particularly given its location -- remote location in a province that has a very low rate of the virus in a mine site. As you know, that's remote with its own airstrip and self-contained accommodation. So we remain cautiously optimistic that through the course of this month that we will start to get some approvals to restart.

But we want to see that happen before we take a step and start to update guidance and the like. So we continue to engage with the government, answer the questions they have of us, and cautiously optimistic that it can ramp-up in the near future. If we do get that green light, it's only a week or two to get Peñasquito back up and running, and then it's back to where we were through the first quarter. Rob, is there anything you'd add to that?

Rob Atkinson -- Chief Operating Officer

I think just a couple of other background things, Tom. And certainly, while we are lobbying very hard, that 18th of May is the date that we are very much focused on, and that's what the government has said that industries who can demonstrate the COVID and controls place can start. And just to add to what Tom said, currently in Mazapil, there have been zero COVID cases, and that's obviously where the mine is at, so that all helps. So again, we're cautiously optimistic.

We're working hard, the sites are in great condition. And when we do and are able to ramp up, it will be straight to Phase 6 and pit, hopefully, where there is higher grade and get back on track as quickly as possible.

Anita Soni -- CIBC -- Analyst

Thank you. That's it for my questions.

Tom Palmer -- President and Chief Executive Officer

Right. Thanks, Anita. Take care.


Our next question will come from Jackie Przybylowski of BMO Capital Markets. Please go ahead.

Jackie Przybylowski -- BMO Capital Markets -- Analyst

Thanks very much. I just want to follow up a little bit more on Anita's last question. Under the impression that the Mexican government has approved restarting mines just generally on May 30, so is that the case where if you are able to demonstrate the safe ability to restart, you may be able to restart earlier, but the worst-case scenario would be May 30? Or do you envision there's a potential that you could be closed longer than that if they don't decide on your favor?

Tom Palmer -- President and Chief Executive Officer

Jackie, I think there's a couple of aspects to answer this question. One is the Mexican government has many governments. And Mexico, in particular, is -- I think the virus hit Mexico a bit later than some other countries, but the Mexican government is still grappling with how they manage the spread of this virus. And so as they work through that, those circumstances for them more broadly can move and change.

What we're working with on that basis is that our plans that we have presented to the Mexican government are robust. They're very pleased with those. We operate in a location in Mexico that is remote. And we can manage our protocols very well, and they've indicated to us that we'd be part of the pool of companies that they'd be looking at for some approvals around May 18.

But I don't want to get in front of the government. Engagement is good. We've got good plans in place. But I want to see that approval come through, and then we can go forward and provide some direction about Peñasquito.

So we continue to support the government and wait for them to go through their process and give us the approval. So we're cautiously optimistic but don't want to get ahead of ourselves. Rob, would you add anything to that?

Rob Atkinson -- Chief Operating Officer

I think, Jackie, the only other additional one, I would say, is that since the order from the government came out, we've been working with the government from day 1. And I think, as Tom said, that we've been -- every single day, we've been working with them. We've presented our case, so we think we have got a very strong position. But the 18th of May is what the government has indicated.

But as Tom rightly said, that could change. But that's what we're focused on at the moment. And given that our processes and our procedures are of a very, very high order, we remain quite hopeful. But we've had a tremendous amount of lobbying.

This is not a last-minute case at all, and we've been with the government and supporting the government and communities every step of the way. So we're known about, we're understood and, yes, very hopeful we can be one of the first to lead the way and show the Mexican mining industry how to best do it.

Jackie Przybylowski -- BMO Capital Markets -- Analyst

Got it. Thanks. And maybe just a second question. If you wouldn't mind maybe giving us an update on what you're thinking on capital allocation.

I know you've just recently raised the dividend. With strong gold prices, can you maybe just give us update on what your thinking is in terms of dividend, buyback and other capital allocation decisions you're making? Thanks.

Tom Palmer -- President and Chief Executive Officer

Thanks, Jackie. I'll ask Nancy. Nancy, just giving a warning now to get off mute, Nancy. Just kidding.

Look, she's had a few technical challenges.

Nancy Buese -- Chief Financial Officer

Yes, I'm failing at the bingo game this morning. Thanks very much. No, Jackie, it's really our commitment to discipline in capital allocation has not changed. And the way we're thinking about it is continuing to consider about half of the free cash flow invested back in the business in terms of the long-term side of things from a projects and advanced work and exploration and some of those pieces.

And then the other piece is really returning cash to shareholders. And as a reminder, with our five-year guidance, and now even the 10-year guidance that we've given, we're really thinking about our contributions on our free cash flow through the cycle with prices both high and low. So you'll see us continue to invest in the business on the one side. And on the other side of the ledger, you'll see us continue to do the work that we've demonstrated around improving the balance sheet, really working on our out-year debt towers and improving those rates and improving the way that looks over time.

And we'll do exactly what we've done on the share buyback, which was incredibly accretive to shareholders. And then the other piece of that was really what we've done with the dividend. And so as we are in this period of time where we're generating significant free cash flow, as those principles around capital allocation have not changed, and we'll continue to adhere to those and consider ways to provide value back to our shareholders but also maintain that investment around the business. The discipline, really, hasn't changed in any way.

Jackie Przybylowski -- BMO Capital Markets -- Analyst

Great. Thanks very much.

Tom Palmer -- President and Chief Executive Officer

Thanks, Jackie. Take care.


Our next question is from Brian MacArthur of Raymond James. Please go ahead.

Brian MacArthur -- Raymond James -- Analyst

Good morning. I want to follow up a little bit on Tanya's question. Just can you remind me where we are on getting autonomous haulage working at Boddington? And the second part, I guess, is just in this COVID-19 world and looking longer term cost structures. Does this all accelerate moving autonomous haulage to some of the other mines? Obviously, there'd be a distancing advantage there and, potentially, a cost saving.

Tom Palmer -- President and Chief Executive Officer

Thanks, Brian. I'll kick off and then pass to Rob. I think it's more than just autonomous haulage. I think it's the use of technology and automation, whether it be open pit or underground.

So I think there is certainly an opportunity that we're seeing where we're implementing technology now that's even more of a business case, we're implementing technology and allowing more work to be done, whether in -- with automated equipment. But the other thing we're seeing, it's the investment we made in technology to be able to work remotely is working very effective. So as Rob talked about, the ability to have less people on operating site but still be able to work very effectively, supporting an operating site out of a regional location or a central location, like Denver, is working very, very well, but also just how many people do you actually need to run our business sustainably. I think in this new normal that we're going to have going forward, the technology beyond automation is giving us many opportunities.

And we're actually seeing how it can work very effectively, so that is something that we -- as we talk about the three scenarios that we're looking at and we're modeling, we are actively talking about how do we reshape this business in the context of having impacts from this pandemic that are going to live with us for many months, many years ahead. In terms of your specific question around autonomous haulage at Boddington, Rob, did you want to pick that one up?

Rob Atkinson -- Chief Operating Officer

I certainly will, Tom. And thanks for the question, Brian. It's moving at pace that we have ordered the 29 793s. So that's well and truly in the CAT system, and we'll start seeing those arrive later on in the year.

So we continue to be very excited about what that's going to be like, but that's well and truly on track. And as you rightly said, it not only improves safety. It can improve productivity very significantly, and that's what the team is very much focused on is how do we improve the productivity with these trucks. I think just to build on a couple of other things that Tom said is that in terms of our automation plans, the sublevel shrinkage in Africa, one of the key reasons for changing to that was the ability to potentially automate that in the future.

Our relationships with the likes of CAT and the introduction of MineStar, the autonomous drills that we've got at Peñasquito, so we've got the hardware, but it's also the data. And what you do with that data is just so important. And one of the key differentiators, I think, with Newmont is the operating support hubs that we've got in Perth and we've got in Denver where you actually monitor the maintenance performance of all your equipment and also your mill performance, and you're able to give that feedback real time. So in many ways, it's not just automated, which I think more of it.

It's also where you're able to use data and putting it to work and place people where you put your expertise and giving that real live feedback to our personnel out in the field. But the good news is the autonomous trucks at Boddington is very much on track.

Brian MacArthur -- Raymond James -- Analyst

Thank you very much.

Tom Palmer -- President and Chief Executive Officer

Thanks, Brian. Take care.


This concludes the question-and-answer session. I would like to turn the conference back over to Tom Palmer for any closing remarks.

Tom Palmer -- President and Chief Executive Officer

Well, thank you, everyone, for joining us today on this call. Thank you for your interest in Newmont. And most importantly, please take care of your safety, your health. And please look after your families and look forward to speaking to you in the not-too-distant future.

Thank you, everyone.


[Operator signoff]

Duration: 79 minutes

Call participants:

Jessica Largent -- Vice President of Investor Relations

Tom Palmer -- President and Chief Executive Officer

Rob Atkinson -- Chief Operating Officer

Nancy Buese -- Chief Financial Officer

Tyler Langton -- J.P. Morgan -- Analyst

Chris Terry -- Deutsche Bank -- Analyst

Greg Barnes -- TD Securities -- Analyst

Steve Gottesfeld -- Executive Vice President, Chief Sustainability and External Affairs Officer

Tanya Jakusconek -- Scotiabank -- Analyst

Anita Soni -- CIBC -- Analyst

Jackie Przybylowski -- BMO Capital Markets -- Analyst

Brian MacArthur -- Raymond James -- Analyst

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