Newmont Goldcorp Corp (NEM) Q2 2021 Earnings Call Transcript

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Newmont Goldcorp Corp (NEM 12.46%)
Q2 2021 Earnings Call
Jul 22, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning and welcome to Newmont's Second Quarter 2021 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Eric Colby, Vice President of Investor Relations and Communications. Please go ahead.

Eric Colby -- Vice President of Investor Relations and Communications

Good morning and thank you for joining Newmont's Second Quarter 2021 Earnings Call. Today we have Tom Palmer, Rob Atkinson, and Nancy Buese. They will be available to answer questions at the end of the call, along with other members of our executive team. Please note our cautionary statement on Slide 2 and refer to our SEC filings, which can be found on our website.

I'll now turn it over to Tom, on Slide 3.

Tom Palmer -- President & Chief Executive Officer

Thanks, Eric. Good morning and thank you all for joining our call. In May, Newmont celebrated its 100th birthday, marking a major milestone in our Company's long history of creating value and improving lives through sustainable and responsible mining. And while our organization has certainly evolved, our strategy remains clear. We are focused on delivering value to all of our stakeholders from our world-class portfolio of long-life, responsibly managed assets located in the best gold mining jurisdictions. Turning to Slide 4 for a summary of our quarterly performance. During the second quarter, Newmont produced 1.45 million ounces of gold and over 300,000 gold equivalent ounces from copper, silver, lead, and zinc, as we build momentum for a strong second half of the year.

We generated operating cash flow of nearly $1 billion and free cash flow of $578 million, of which 97% is attributable to Newmont. In May, we completed the acquisition of GT Gold, consolidating our position in the highly prospective Golden Triangle District of British Columbia. And last week, we announced the approval of our Ahafo North project, expanding our existing footprint in Ghana and adding more than 3 million ounces of gold production, over a 13-year mine life. This project is expected to deliver an internal rate of return of over 30% at current gold prices, and offers exciting exploration opportunities throughout the land package. Supported by our leading portfolio of operations and projects, we continue to apply a disciplined approach to our capital allocation priorities. Even after the redemption of our 2021 senior notes in April and the completion of the GT Gold acquisition, we have $7.6 billion in total liquidity. We have sustained a net debt to EBITDA ratio of 0.2 times, maintaining our financial flexibility, while we continue to reinvest in our business and return cash to our shareholders.

Yesterday, we declared a second-quarter dividend of $0.55, maintaining an industry-leading dividend yield of over 3.5%. Second [Phonetic] in our established framework, our second-quarter dividend demonstrates our confidence in the strength of both our portfolio and our operating model to generate sustainable long-term value. In June, we published two important ESG focus reports that touched every part of our business and operations. The first, with our 17th Annual Sustainability Report, which continues to provide a transparent and detailed look at our ESG performance, focusing on the issues and metrics that matter most to our stakeholders. /The second was our first Climate Strategy Report which focuses on our approach to achieving our science-based climate targets and aligns with the reporting guidelines from the task force on climate-related financial disclosures. These reports outline the key sustainability strategies that are embedded in our business and our culture at Newmont.

Turning to Slide 5. Newmont is broadly recognized for our robust and disciplined practices when it comes to sustainability reporting, both within our sector and among all corporate reporters. And our long history of taking a leading approach to environmental, social, and governance practices, has positioned us as the gold sector's recognized sustainability leader. Newmont's strong ESG performance creates long-term value for our stakeholders. And drives the period [Technical Issues] results through delivering labor, more efficient and reliable operations, greater productivity from well-managed resources, the ability to operate effectively in a broad range of jurisdictions, a proactive approach to managing risks and emerging issues, and most importantly, a reputation built on trust-based relationships, and a track record of delivering on our commitments. Earlier this month, we hosted a webcast to provide an overview of our ESG journey. What we have done well, where we have learned lessons and our plans to continued improvement. If you weren't able to join us, I would advise you to listen to the replay, which is posted on our website.

Turning now to Slide 6. Newmont is the world's leading gold producer with an unmatched portfolio of world-class long-life operations. Among our 12 operating mines and two joint ventures, we have nine world-class assets, each of which delivers more than 500,000 gold equivalent ounces per year, and all-in sustaining cost of less than $900 per ounce, and with a mine life exceeding 10 years. And we believe that where we choose to operate matters. It is important to note that all of our world-class assets are located in top tier jurisdictions that we define as countries classified in the A and B ratings ranges by each of Moody's, S&P and Fitch. Newmont has the best portfolio of assets located in the most favorable gold mining jurisdictions, that when coupled with the quality of our people and our integrated operating model, positions us to generate sustainable returns for decades to come.

Turning to Slide 7. Our portfolio will produce steady gold production of more than 6 million ounces per year through until at least 2030, balanced across each of our four regions. This profile is further enhanced by the production of more than 1 million gold equivalent ounces from silver, latent zinc at Penasquito, and copper at Boddington and Yanacocha. Combined we will deliver nearly 8 million gold equivalent ounces per year for the next decade, the most of any company in our industry. Moving to Slide 8. Our project pipeline is unmatched in the gold industry and is one of the best in the mining industry. There is significant value to unlock as we optimize and advance our longer-term projects and lay the pathway for steady production and cash flow well into the 2040s. We continue to advance our mid-term projects, including Yanacocha Sulfides, where we are preparing for a full funds approval in December of this year, with a multi-decade mine life that provides exposure to gold, copper, and silver. The Sulfides project generates profitable production and offers additional upside to extend mine life at this cornerstone asset. We are also executing the second expansion project at Tanami, through the development of a 1.6-kilometer deep production shaft and supporting infrastructure, this project supports the site's future as a long-life and low-cost producer, and it also provides a platform for us to further explore a prolific mineral endowment in the Tanami district.

And as mentioned previously, we are pleased to announce that funding for the development of the Ahafo North has been approved, and this project has now advanced into the execution phase. Turning to the next slide for some more detail. Earlier this month, our Board of Directors approved full funding for the Ahafo North project, expanding our existing footprint in Ghana and adding more than 3 million ounces of gold production over an initial 13-year mine life. Located approximately 30 kilometers north of our existing Ahafo South operations, the Ahafo North project will include four open-pit mines, and the construction of a stand-alone mill to produce approximately 300,000 ounces per year, at very attractive all-in sustaining costs. The project is expected to deliver an internal rate of return of about 30% [Phonetic] of current gold prices. Ahafo North is a significant gold mine by any measure. We have conducted extensive regulatory and community engagements, including meetings with traditional leaders and local government agencies, and public forums to ensure that we earn and maintain social acceptance throughout Ahafo North's lifecycle. We will work to create lasting value for host communities through enhanced local sourcing and hiring. One key aspect of the Ahafo North is our workforce planning, which includes a target to achieve gender parity in the workforce when operations begin. We are very excited about progressing Ahafo North and look forward to bringing you updates as we develop this new mine over the next two years.

Turning to Slide 10. The global pandemic has and will continue to challenge all of us for some time to come. And our commitment to protect the health and safety of our workforce and host communities remains our top priority. We believe that the COVID-19 vaccine is critical in combating the spread of the virus. We are encouraging our workforce to get vaccinated as soon as they become eligible and we are working with our local communities and host governments to improve availability and deployment at all of our managed operations. These efforts are supported by our Global Community Support Fund, which is seeking to help with vaccine rollout, vaccine education, and awareness campaigns. We are seeing some of the higher speculation rates in the United States and Canada, largely due to the widespread and early availability in those countries. But until the vaccine is available to everyone around the world, our people and operations will continue to be affected by this virus. And recent outbreaks have shown just how difficult this pandemic continues to be, testing our protocols and the resilience of our people and systems.

The impacts of the pandemic are also driving cost inflation around the globe. We are now expecting cost escalation of around 3% to 5% for materials, energy, and labor. And we expect these pressures to continue through until at least at the end of next year. We are currently working on our 2022 business plan. I'm sure that the higher cost through inflation and the application of our wide-ranging controls and safety protocols built into our assumptions going forward. However, despite the impacts from COVID, we remain in line with our guidance ranges. As a reminder, our guidance range is a plus or minus 5% from the midpoints we published in December 2020. We are on track to achieve the midpoint allowing for production and the midpoint to high-end for costs. Production remains back-half weighted for the year, with approximately 53% expected in the second half of the year. As a reminder, our cost guidance assumes a $1,200 gold price. At today's gold prices, you can expect an additional $20 to $30 per ounce for production taxes and royalties.

As we look ahead, toward the second half of this year, we will remain diligent in supporting the vaccination efforts that is so urgently needed around the world. And we encourage everyone to get their vaccine as soon as they're eligible, ensuring that we are all doing our part to end this global pandemic.

And with that, I'll turn it over to Rob Atkinson for a more detailed look at our global projects and operations. Over to you, Rob.

Rob Atkinson -- Chief Operating Officer

Thanks, Tom. Turning to Slide 12, I'll give an update on our regional performance starting with Africa. Akyem delivered another strong performance during the second quarter as higher ore grades from changes in sequencing, largely offset more tons mined due to challenges with some [Phonetic] availability. The site is well-positioned to deliver solid production throughout the year, expecting to reach its highest production during the fourth quarter. Ahafo continues to be a solid contributor delivering higher grade material from our underground operations to offset unplanned mill maintenance and power outages. At Subika, we continued to progress the development of our new underground mining method, sub-level shrinkage. And we expect to see steady increases in grade and underground ore tons mined in the second half of the year. In addition, we expect to reach higher ore grades from the open pit operations in quarter three and quarter four, positioning Ahafo to deliver a strong finish to 2021. And as for finalizing the permitting process with the Ghanaian ETA [Phonetic], our Board of Directors approved full funding of the Ahafo North project earlier this month. Spending will ramp up in the second half of the year and all critical path equipment orders have been placed in support of initial construction activities to ensure timely execution of the project. The development of this prolific ore body will leverage our proven operating model, with the project and resulting mine receiving functional and technical support from our existing world-class Ahafo South operation as we create the next generation of mining in Ghana.

Turning to Slide 13. Tanami delivered solid results in the second quarter as higher ore grades more than offset unplanned mill maintenance and longer haul distances from the bottom of the mine. In late June, we detected our first positive COVID case at Tanami working closely with government representatives and other key stakeholders, we rapidly made the decision to place the site on clear maintenance beginning on June 26 to reduce the spread of the virus and protect the health of our workforce and communities right across Australia. I'd like to thank our team in Australia for their rapid response and courageous decisions during such an extraordinary and dynamic face of [Phonetic] circumstances. And I'm proud of the resilience and strength of our workforce as we continue to learn from and manage the impacts and consequences of this virus. Although our second quarter was largely unaffected, we are forecasting a 40,000-ounce to 50,000-ounce impact for the remainder of the year as a result of the care and maintenance period. We began ramping up out of care and maintenance on July 13, and today Tanami is now operating at 90%. And despite the impacts from COVID, we continue to advance Tanami Expansion 2. During the second quarter, we progressed the hoist structure and our work on the mine shaft, remaining on track to deliver significant ounce, cost, and efficiency improvements in the first half of 2024.

Boddington achieved near-record quarterly mill performance, reaching nearly 11 million tons processed during the second quarter. And we continue to expand the use of the gold industry's first autonomous haul fleet. And today we are operating 20 trucks in the South Pit and we remain on track to deploy the entire fleet of 36 trucks, by the end of quarter three. The efficiencies from the Autonomous Haulage coupled with improved performance from the mill will continue to drive performance at Boddington. The improved mill performance helped to offset more tons mined from ongoing shovel reliability and geotechnical challenges in the South Pit which has the potential to impact our ability to reach as much of the higher grades as we have planned in the second half of the year.

Turning to Slide 14. Penasquito delivered another consistent quarter as we continue to execute on our plan for potential enhancement. And the most recent improvements in metal recovery rates will continue to support planned delivery into the future. The work we've done to optimize Penasquito since we acquired the site in 2019, demonstrates our ability to successfully operate and enhance value at large, complex open-pit mines. The site is well-positioned to remain a strong performer throughout 2021 as we continue to realize higher than planned tons mined and improve recoveries in the Pyrite Leach plant. CC&V delivered lower tons mined due to unplanned fleet maintenance and the site continued to experience geochemistry challenges during the second quarter, resulting in lower grades and recovery. Mill performance was offset by higher leach pad recoveries and grade improvements are expected during the second half of the year, helping to partially overcome some of the challenges experienced in the first quarter and second quarter.

At Porcupine, mill and ongoing equipment maintenance has resulted in lower tons mined and processed during the quarter. As we look toward the second half of the year, we expect underground development and grades will improve. And last month, our Full Potential program identified 20 initiatives at Porcupine, which will deliver efficiency improvements in the coming months. As mentioned previously, we continue to closely monitor the impacts from COVID at Musselwhite. In April, we made the decision to temporarily suspend operations for five days to reduce spread via virus, resulting in mill stoppages, reduced underground development, and more personnel at site in late April and early May.

We expect that these challenges will persist in the second half of the year and we are continuing our full potential work at Musselwhite, focused on increasing development rates and driving productivity. Eleonore delivered another strong quarter as development rates and mill throughput continued to improve over the prior quarter and prior year, offsetting the impact of lower personnel at site due to COVID. In addition, the site continues to increase the use of tele-remote mucking equipment which has helped to increase tons mined and drawing [Phonetic] important improvements to safety and efficiency. Eleonore will continue to be a solid contributor during 2021 as we expect to sustain consistent production from stable tons mined and processed throughout the year.

Turning to Slide 15. Despite heavy rainfall in the second quarter, Merian remains a strong performer in the South American region. The site continues to utilize an ore blending strategy to optimize mill performance. And during the second quarter, Merian delivered lower throughput as the site focused on processing harder, higher-grade ore. In the second half of the year, Merian will continue to transition from softer saprolite to harder ore, resulting in higher production from improved grades and steady throughput. Cerro Negro continues to improve productivity and performance as the site continues to manage through [Phonetic] the evolving pandemic. During the second quarter, Cerro Negro delivered higher ore grades and despite reduced personnel from COVID, the site continues to increase ore tons mined and processed, each quarter. Due to the pandemic, Cerro Negro has delivered low development rates over the past year, limiting access to higher-grade ore in the late 2021 and into 2022. However, the site is progressing future growth projects such as the development of San Marcos and exploration in Eastern District.

Yanacocha has also experienced significant challenges due to the pandemic, impacting productivity through the year. Yet, despite the challenges from the virus, Yanacocha delivered higher grades and recovery from the leach pads, in addition to an increase in grades and more tons mined from the Carachugo open pit. As we look toward the second half of the year, in Yanacocha, we'll focus on optimal ore placement in the Leach plants, as the safest transition to Leach-only operations ahead of the development of Yanacocha Sulfides. The Yanacocha Sulfides project has the potential to expand Yanacocha's world-class operations well beyond 2040, adding profitable production from one of the largest and most prolific gold districts in South America for decades to come. And despite potential impacts from the elections in Peru and the impacts of COVID, the project is progressing well. The team there is focused on critical path activities such as advanced engineering and procurement, as we prepare for full funds approval in December of this year.

And with that, I'll hand it over to Nancy, on Slide 16.

Nancy Buese -- Chief Financial Officer

Thanks, Rob. Turning to Slide 17 for the financial highlights. Newmont delivered strong performance in the second quarter, with over $3 billion in revenue, an increase of $700 million from the prior year quarter, driven by higher sales volumes and metal prices. Adjusted net income of $670 million or $0.03 per diluted share. Adjusted EBITDA of nearly $1.6 billion, an increase of over 60% in the prior-year quarter. And strong free cash flow of $578 million, also an increase of about 50% from Q2 of 2020. Yesterday, we declared a regular quarterly dividend of $0.55 per share. An increase of $0.30 or 120% over the prior-year quarter. With a yield of over 3.5% at our current share price, Newmont is among the top 10% of the S&P's large-cap dividend payers. Turning to Slide 18 for a review of our adjusted earnings per share in more detail. Second-quarter GAAP net income from continuing operations was $640 million or $0.80 per share. Adjustments included $0.03 related to the unrealized mark-to-market gains on equity investments. $0.02 related to reclamation and remediation adjustments at historical mining site, $0.02 related to tax adjustments and valuation allowance, and $0.02 of other charges. Taking these adjustments into account, we reported second-quarter adjusted net income of $0.83 per diluted share, an increase of almost 160% or $0.51 over the prior-year quarter.

As a reminder, due to our status as a US GAAP filer, our adjustments to net income do not include $19 million of incremental costs incurred this quarter as a result of the COVID pandemic. Adjusting for these costs would have resulted in approximately $0.02 of additional net income per share in the second quarter and we expect these costs to continue throughout the year as we prioritize the health and safety of our workforce and local communities. Turning now to Slide 19. Under our conservative $1,200 gold price assumption, Newmont expects to generate $3.5 billion of attributable free cash flow over a five-year period. In addition, for every $100 increase in gold prices above our base assumption, Newmont delivers $400 million of incremental attributable free cash flow per year. Newmont is the only company in the gold mining industry with the ability to generate these levels of attributable free cash flow, allowing us to balance steady reinvestment in the business, continue to strengthen our balance sheet, and also provide superior shareholder returns through our industry-leading dividend framework and opportunistic share buybacks.

Turning to Slide 20 for more about our dividend. Our dividend framework provides shareholders with a stable, safe annualized dividend of $1 per share at its $1,200 gold price, along with the potential to receive 40% to 60% of the incremental attributable free cash flow generated at gold prices above our plan. We will continue to review our dividend each quarter with management and our Board, evaluating our operational and financial performance and outlook, semiannually, to give us maximum flexibility in determining our dividend within the framework. The dividend declared yesterday was consistent with our first quarter dividend calibrated at an $1,800 gold price assumption and a 40% distribution of incremental free cash flow. Our second-quarter dividend demonstrates our confidence in our future outlook and our ability to maintain capital discipline.

Turning to Slide 21. We continue to drive the business with our clear capital allocation priorities, which include reinvesting in our business through disciplined investments in exploration and organic growth projects, maintaining our financial strength and flexibility, and returning cash to shareholders. During the second quarter, we delivered on each of these priorities by progressing our profitable reinvestment in the business, particularly with the execution of the Tanami expansion, the approval of Ahafo North, and the advancement in Yanacocha Sulfides, investing in exploration with 55 drill rigs working around the globe, completing the GT Gold Transaction in May of this year, maintaining our industry-leading dividend established within our framework to provide stable and predictable returns, repurchasing 2.4 million shares, translating to approximately $150 million of our $1 billion share buyback program, and maintaining a strong balance sheet with a net debt to EBITDA ratio of 0.2 times, giving us the flexibility to reduce our debt outstanding by $550 million with available cash and still maintain cash balances of $4.6 billion at the end of the quarter.

We are confident in our ability to continue delivering strong results and free cash flow to maintain our disciplined approach to capital allocation. The progress we made in the first quarter and second quarter enables Newmont to return over $1 billion to shareholders in the first half of this year, while we continue to reinvest in our business and support our operations with a strong and flexible balance sheet.

With that, I'll hand it back to Tom, on Slide 22.

Tom Palmer -- President & Chief Executive Officer

Thanks, Nancy. And I'll wrap it up on Slide 23. I'm privileged to lead an organization with a proven track record and a long history of value creation. Capitalizing on the strength of our people, assets, and integrated operating model, Newmont is well-positioned to lead the industry with our commitment to create value and improve lives through sustainable and responsible mining. As our Company moves into its next 100 years, we remain focused on delivering value to all of our stakeholders from our world-class portfolio of long-life, responsibly managed assets, located in top-tier jurisdictions.

With that, I'll turn it over to the operator to open the line for questions.

Questions and Answers:

Operator

We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Tyler Langton of JPMorgan. Please go ahead.

Tyler Langton -- JP Morgan -- Analyst

Yeah. Thanks and good morning to Tom, Rob, and Nancy. Just, I guess, I had a question on COVID and I know it's probably tough to calculate, but give a sense -- sort of the impact from COVID restrictions on production in Q2. And then, just as you look out the -- to the second half, Rob, you mentioned the impact at Tanami, but other than sort of operations [Phonetic] just had sort of, you know, sort of, Delta variant spread that you're kind of -- you're particularly sort of watching for risks to production?

Tom Palmer -- President & Chief Executive Officer

Thanks, Tyler. I'll pass across to Rob. But we are certainly continuing to manage the virus across just about every one of our locations. But, Rob, maybe give a bit of color as you [Indecipherable]

Rob Atkinson -- Chief Operating Officer

Thanks, Tyler. And if I can start off with, in Australia, there obviously the Tanami, that -- we had the first positive case and you get two weeks completely shut down and it takes a little while to ramp up and Tanami's now back up at about 90%. So it's two weeks plus a few days. But the biggest worry we've got in Australia is that each one of the states and territories have got different rules and regulations, and they're not necessarily allowing free travel between the States and the quarantine removal, obviously got people that work at the different States. So, that's a risk moving forward that we're carefully watching and carefully managing in Australia. But really, in terms of the biggest area which we're still worried about is South America, is that by far in a way that's where we've had the biggest impacts. Certainly in Cerro Negro, we've had several key outbreaks and we've had to shut down several times in the second quarter. But vaccines are starting to get through there. And building up in similar, Yanacocha, the vaccines are coming through. But it's the absenteeism, Tyler, which is the biggest unpredictable thing that you can sometimes have shovel operators away, you can have mill operators away, and that causes the biggest challenge. But certainly, we -- with the vaccines in that part of the world, that's certainly very positive for us. In terms of Canada, I mentioned about Musselwhite, that we had that week in April and May where we had to go into care and maintenance. So, that had a significant impact, but again, in each one of the Canadian States, the level of absenteeism has sometimes been three times or four times higher than what we've typically had. And that really impacts the development, etc.

And the key thing that I want to get across is that the sites are actually managing the situation very, very well. But it is the unpredictability of the virus and that's the challenge we've got, but with the vaccines coming on, we're certainly very hopeful that that will reduce. But it's a very difficult question to actually put your finger on.

Tom Palmer -- President & Chief Executive Officer

Tyler, and to [Phonetic] build upon that, we will continue to make decisions that put the health and safety of our workforce and local communities front and center. In that Tanami example, it was midnight on a Friday night that that positive case came through. Within two hours, that claim had made the decision to put the operation into care and maintenance, and send 150 people back in their rooms, quarantined, and everything safely buttoned up at the mine site. And had notified 900 people who had flown home in the previous 48 hours to ensure that they were going to home quarantine and doing the appropriate testing. And we will continue to make those decisions and courageous decisions to ensure health and safety about all those [Phonetic] as we look around how we're managing those impacts with a portfolio of our size, with the strength we have of a balanced portfolio around the globe, we believe that we can continue to accommodate these pandemic impacts within the guidance that we have provided.

Tyler Langton -- JP Morgan -- Analyst

No, yeah, that -- that's very helpful. And then, just switching to Ahafo North. And I know there is just a slight increase in the capex, with the full funds' decision versus the previous guidance. I'm just trying to get a sense, the current capex guide -- and sort of what level of input cost does that assume, is it sort of more recent prices for things like use of material and the energy? And I guess, same question, also for, you know for the cost or are you seeing kind of more sort of average prices over the past several years? Just trying to get a sense sort of the impact that sort of current inflationary trends that could potentially have on the capex and operating cost there?

Tom Palmer -- President & Chief Executive Officer

Okay, thanks, Tyler. We certainly -- and the -- that slight bump in the capital costs from what we've been guiding previously was looking at current pricing, looking at COVID impacts, and we've already placed orders on a number of critical path items which is really locking up pricing and schedule. And we're doing some of that at the Yanacocha Sulfides as well to ensure that we can manage both schedule and cost. So it's COVID impacts, but also we have already done similar to locking walking contracts and pricing. So, it takes into account on a capital cost of the considerations around current inflation pressures and COVID. And from an operating things [Phonetic] to a couple of these out before that operation comes online, we do expect these inflationary pressures to be cyclical. And may well be thrown out the other side of that cycle by the time Ahafo North is up and running and producing.

Tyler Langton -- JP Morgan -- Analyst

Great. Makes sense. That's it from me. Thanks so much.

Tom Palmer -- President & Chief Executive Officer

Thanks, Tyler.

Operator

The next question comes from Fahad Tariq of Credit Suisse. Please go ahead.

Fahad Tariq -- Credit Suisse -- Analyst

Hi, good morning. Just building on the last question about the COVID impacts, maybe just remind us where some of the production assets are coming in the second half of the year? By that I mean which operations are expected to kind of make up for some of the COVID issues, predominantly in South America and Australia? Thanks.

Tom Palmer -- President & Chief Executive Officer

Thanks, Fahad, and good morning. And so, our needle-moving insights [Phonetic] really, really [Indecipherable] our portfolio, just movements on a half-year to half-year basis. So, Penasquito is pretty flat. Having very solid year but it's pretty consistent half-on-half, quarter-on-quarter. And at Boddington, we are -- you know, I was down at Boddington about three weeks ago, watching Autonomous Haulage in action and spending some time in the South Pit and the SA five [Phonetic] layback, just looking at our work to move down into the high-grade ore. So, we are moving into the high-grade ore in the latter part of this year. And I've talked a bit about the importance of managing some of the geotechnical challenges, and some of the equipment reliability challenges are really important. We have that discipline and focus to get to that high-grade ore, so Boddington's a key contributor. Tanami has got some higher grade in the latter part of the year. And so, I'm very pleased that we're able to navigate through that positive case, back up and running very smoothly, and will enter into some higher grade starts at Tanami in the latter part of the year. And the other one is Ahafo. We've got a stronger second half in the Ahafo. As we get -- certainly as the underground -- Subika underground sub-level shrinkage comes on, but also as we get into some high-grade ore out of the open pit. So flat for Penasquito, stronger second half for Boddi [Phonetic], Tanami, and Ahafo. So near the operations that move the needle.

Fahad Tariq -- Credit Suisse -- Analyst

Okay, that's really clear. Thanks.

And my only other question, just on the Yanacocha Sulfides, as you work toward the full funds decision, if there was a situation where your joint venture partner was unable to contribute like much to the funding because of balance sheet issues, etc., would there be appetite from Newmont to maybe consider buying out larger stake of the project? Thanks.

Tom Palmer -- President & Chief Executive Officer

We're very excited about Yanacocha Sulfides, we're very excited about the long-life potential of Sulfides, so Sulfides project is built of -- and the economics are built of the first wave, what we call the first wave, which is another layback at the Yanacocha, [Indecipherable] I think, and Chaquicocha Underground. But there is a second wave, and a third wave, and a fourth wave of Sulfides ore that come after, even stall that processing infrastructure. It's a story that will play out like Carlin did for Newmont, from the early 90s to mid-90s and over the last 25 years, 30 years. So we're very excited about the potential of the Yanacocha. We see Yanacocha as a cornerstone asset in a key district that we want to be in for a very long time. It's -- and it's gold and copper, which we're very excited about. So, it's the opportunity. When we think about M&A activity, we look at where we can consolidate in districts. What we did with GT Gold and the Golden Triangle, over the earlier part of this year. And certainly, if we can consolidate our position at an operating asset in a prolific district around Yanacocha, if that opportunity presented and we could pick up more of that asset for fair value, we would be interested.

Fahad Tariq -- Credit Suisse -- Analyst

That's very clear. Thank you.

Tom Palmer -- President & Chief Executive Officer

Thanks, Fahad.

Operator

The next question comes from Josh Wilson of RBC. Please go ahead.

Tom Palmer -- President & Chief Executive Officer

Josh, we can't hear you. If you're -- you might be on mute or something. Operator, it looks like we might have a connection issue with Josh.

Operator

Yes, we will move on to Greg Barnes of TD Securities. Please go ahead.

Greg Barnes -- TD Securities -- Analyst

Yes, thank you. Tom, I'm just trying to understand the Boddington commentary because Rob seemed to imply that you're not going to get as much high grade in the second half of the year as perhaps expected, but you still expect production to be up, stronger than [Speech Overlap] half of the year. Just trying to reconcile those two comments.

Tom Palmer -- President & Chief Executive Officer

Thanks. Thanks, Greg. So we're moving down into the higher grades in the South Pit. So we should move into those higher grades, you progressively start to build into higher, higher grades that are coming out of the South Pit, and obviously feeding into the mill. So you are going to see -- we will see a trend of higher production in the second half as you do that. It's really going to be that mine sequence and how much of that high grade you get by December 31. And how much [Indecipherable] are there into January as we move through. So it's going to be a stronger second half because we're entering the high-grade area. It's about how many weeks in the six months we get to that high-grade material, and how much is coming off a medium-grade stockpile into a mill, that is absolutely humming. So, it will progressively increase. It's just how much that high grade we can creep into 2021 versus tipping into 2022. And that's what we're very focused on in terms of making sure we step down those benches, manage the bench hygiene to ensure that we're looking at the geotechnical issues. And then we've had some reliability issues with a very large hydraulic shovel, both engine issues and very large hydraulic oil pump issues that you wouldn't typically see in these machines. So, working with the -- working very closely with the supplier of that machine to ensure we get that reliability and maximize the amount of high-grade ore we did in the second half.

Greg Barnes -- TD Securities -- Analyst

Okay. So there's going to be a little less production from Boddington in the second half of the year, perhaps than you were previously expecting, as well, I think I'm hearing.

Tom Palmer -- President & Chief Executive Officer

Potentially, there is a risk at some pits in -- into the early part of '21, but we have -- we still have six months in front of us, Greg. So we're still very much focused on making sure we manage that page turnover very, very carefully. I said I was down there for a period of time, about three weeks ago, spending a fair bit of time climbing over that shovel and in that pit with the mining team, just understanding how they're working their way through there.

Greg Barnes -- TD Securities -- Analyst

Okay. And, Tom, your comments about inflationary pressures in the second half of the year and into 2022, I think that's a bit of a change from the actual figure [Phonetic], say in the beginning of the [Indecipherable] I don't think you are seeing much impact from those cost pressures. But now, it does appear to be coming through. Where is it coming through from?

Tom Palmer -- President & Chief Executive Officer

Thanks, Greg. It is as we -- as we've been sitting here, right in the middle of our business planning process now. So as we -- as our global supply chain team then starts to look at some of those trends, we are seeing across, I mean, 50% of our care is labor. And we are seeing both in Canada and Australia, quite hot labor markets for mining. And so we are seeing -- that has been up an uptick, certainly in both of those countries over the course of this year. And we expect to see that flow through at least all of next year. And then, materials and energy make up the next 40% to 45%.

So across labor, materials, and energy, you've got -- you've got our cost base and we are seeing in terms of steel and fuel and oils, as we pull together our plans, work with our various suppliers, that uptick -- if we bundle it all together, aggregate it all together, we're seeing the order of about that 5%. We are seeing it not structure, we are seeing it as cyclical, so that we are seeing that following through. And considering that that will play out for at least all of 2022, and starting to factor that into our planning process. We've got our continuous improvement program, Full Potential, which is very mature, but we are leaning into it hard to look forward and offset some of those headwinds. But we certainly are seeing that inflation trend. And of course, at some -- it does set us up nicely for some pretty positive gold price outlook as we're seeing that. But it's -- but that's going to pull in together the detailed analysis for our business plan, that we are seeing those trends flow through.

Greg Barnes -- TD Securities -- Analyst

Okay. So, likely upward pressure on 2022 cost guidance, unless you had the [Speech Overlap] compliance.

Tom Palmer -- President & Chief Executive Officer

That's right, Greg. And as we see the Midstream in our planning process, looking at about that -- round about that 5% aggregated number.

Greg Barnes -- TD Securities -- Analyst

Okay, great. Thanks, Tom.

Tom Palmer -- President & Chief Executive Officer

Thanks, Greg.

Operator

The next question comes from Jackie Przybylowski of BMO Capital Markets. Please go ahead.

Jackie Przybylowski -- BMO Capital Markets -- Analyst

All right. Thanks very much. I guess I'll just sort of follow on Greg's question on -- in inflation. So you -- you're kind of warning that you're expecting to see inflation on the operating cost side. And it sounds like maybe on the capital cost side too with things like steel. But your guidance is more or less unchanged, I guess. It looks like there is a few areas at least in 2021 on both development and sustaining capex spend, where we've actually seen it goes down by a little bit. And it looks like also maybe in 2023 with development capex, so how should we be thinking about the guidance? Is this something that, I mean, did you have sort of a wiggle room built into it that the inflation is just sort of going in, or is there any risk that we might see either your capex or your opex guidance go up by subsequent quarters by year-end? Thanks.

Tom Palmer -- President & Chief Executive Officer

Thanks, Jackie. So for 2021, we're certainly seeing on the cost side, somewhere between the midpoint and the high-end. So that high-end is plus 5%. So we're going to correct somewhere within there. So we -- as we sit here today and looking at some of those inflationary pressures so that we can and will accommodate our costs this year within that. Certainly, as we look to 2022 and out and update our long-term guidance in December, we're certainly seeing that cost pressure I was just talking with Greg about. And on the development capital side, we have built into the Tanami and we've built into the Ahafo North our understanding of where cost is. And that's accommodated within the outlook we've given for both those projects. We are continuing to derisk Yanacocha Sulfides where we are on the critical path. We are going to ensure they get factory slots and prices for some different critical path items, for instance, oxygen plants and the like. So, we're making sure we're managing that process ahead of a full funds' decision so that when they come out with hopefully a full funds decision in December that the -- what we've got through is accommodating some of those capital cost inflationary pressures. And then just, maybe on the development capital side, as we go, I'd say less the inflationary pressures, more of a sequence of those projects, as you've got different COVID impacts. So -- and it was how is the spend profile looking for Ahafo North and Yanacocha Sulfides, and at Tanami, is more going to be the influence of our development capital number in 2022 versus '23 versus '24.

Jackie Przybylowski -- BMO Capital Markets -- Analyst

All right. Let me pause [Phonetic] and thank you -- thank you for clarifying that. Maybe I'll just follow up with the point on Yanacocha's Sulfide. And Tom, I know you've been asked this 100 times, probably already, but with the changes in Peru, with the recent election and it looks like there is a formal signing of Castillo's [Phonetic]. Is there anything that would -- that you could see between now and December that would make you to pause on sanctioning Yanacocha Sulfides or independent of the project itself? I'm talking more about the political or regulatory environment, is there anything that would worry you or are you fairly confident that you'd be able to manage that in whatever environment you're in?

Tom Palmer -- President & Chief Executive Officer

Yeah, thanks, Jackie. It's certainly, I think a very important step is the declaration of President Castillo. Next step for us to be to see how he assembles his cabinet. And then whether we know who we can engage with and understand. But we're about to embark upon a couple of billion-dollar investments in their country. I think -- I think it's clear that I acknowledge the importance of mining to Peru's economy, and a country that's probably the worst hit from the pandemic around the world. And so, the opportunity to have an investment into the mining industry that's going to help the Peruvian economy, I'm optimistic that that that discussion will be well received as we can start engaging with the new cabinet. We've been in Peru for 30 years. Yanacocha Sulfides will position us to be in Peru for at least another 30 years or 40 years. And we are taking a very long-term view on this decision. But pleased to see that we've got a decision in the election, which will allow us then to start engaging over the next six months with some of those key leaders in government.

Jackie Przybylowski -- BMO Capital Markets -- Analyst

Thank you very much. As that's all my questions. Thanks, Tom.

Tom Palmer -- President & Chief Executive Officer

Right. Thanks, Jackie.

Operator

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

Tanya Jakusconek -- Scotiabank -- Analyst

Thanks. Good morning, everyone, and thank you for taking my question. Just maybe coming to Rob or Tom, I just wanted to follow back on to this inflation question. Appreciate the 3% to 5%. And you mentioned labor in Canada and Australia. I just want to dig deeper, if there is any aspects of labor that you're seeing much higher inflationary pressures on, is it underground miners? I'm just trying to understand if there is pockets of that that's occurring that you're seeing?

Tom Palmer -- President & Chief Executive Officer

Yes. Good morning, Tanya. Thank you for the question. We are certainly seeing in Canada, high demand for our key technical staff. A number of projects around the country and then, so you're starting to see that mobility of folks moving on to different opportunities. And we're seeing that impact in terms of operators in maintenance for the mine beginning. Particularly, you've got the fly in flight operations, that is being able to switch from one plan to another. So we are seeing those pressures, you know, they're heating [Phonetic] up our market in Canada. And very similar in Western Australia, where you've got a very significant boom happening on the back of some record annual process. So very high demand, but I think the construction of the expansions to -- or it's the expansion of those iron ore mines to maintain throughput. There's a high demand for operators, maintainers, and technical people. So professionals in an environment that Rob was talking about earlier, where the State governments, the provincial governments in Australia are constantly opening-closing borders. And so there is a real push on to the employing out of the State, so you've got that reliability in the staff being within the State. And we're likely to have in Australia those interstate pressures for still some time to come, given the slow take-up of the vaccination, which is certainly the [Indecipherable] now with the Delta strain of the virus. One of the things that we are doing which is going to significantly offset the pressure on operators, in particular, is the implementation of the Autonomous Haulage at Boddington. If you think about our fleet of 36 trucks across four shifts, and then the additional numbers of people you have to cover shift breaks and annual leave, and those sorts of things, you're talking of the order of 180 people that are no longer needed to draw trucks because you're running autonomously and that takes some pressure out of the system in terms of that labor pressure for operators and maintainers.

But it's lots of projects in both those countries and limited supply in both professionals and operators and maintainers. Rob, would you have anything to -- to add?

Rob Atkinson -- Chief Operating Officer

I think the only thing I'd add, Tom, at least, Tanya, it also applies to contractors where maintenance shuts that there is such demand, competing priorities, and as Tom said, if you're trying to do a major shift in Western Australia and you're limited to contractors there, sometimes you can't do all the work you need to, and as such, should go to looking at it as the failed work, etc. And similar to what Tom said, in Canada, we've also seen exploration contractors also, with fair prices as well. So those are definitely the two toughest in all of those markets.

Tanya Jakusconek -- Scotiabank -- Analyst

Okay. And then maybe, if I can get a bit of clarity on material, energy, I understand, but just on material, are you just seeing it in steel? Is it cement? Is it cyanide? Maybe just a little bit more clarity exactly in the materials' side.

Tom Palmer -- President & Chief Executive Officer

Yes, it predominantly is steel, that we're seeing come through on the materials side. And what I would also tuck in underneath materials when we think about that element of our costs tenure is freight. So it's particularly as we've got to concentrate, we're moving out of Penasquito and Boddington, we are seeing freight costs increase. So that will be the two materials areas where we're seeing that pressure.

Tanya Jakusconek -- Scotiabank -- Analyst

And then just on two other assets that we didn't touch on or for maybe Boddington, we did a little bit. Can you just remind me of what exactly the geotechnical issue is in the pit?

Tom Palmer -- President & Chief Executive Officer

Rob, do you want to pick that one up as we bring our ventures down?

Rob Atkinson -- Chief Operating Officer

Yeah. Tanya, it's, this is quite a seasonal issue there as well is that Australia, as that part of the world tends to get quite heavy rain, and when you've got heavy rain, there's always the risk to the walls where we stand off a little bit further, and that's something which we've been managing very, very carefully. So it's things as practical as that. And just for a piece of information that this month of July has seen some of the record rainfalls in Australia. So, we just had to stand off the walls a little bit further, and that causes a slight slowdown in the trucks.

Tom Palmer -- President & Chief Executive Officer

And there is some -- and there is making sure that you're keeping your catch benches clear as you're stepping down. So, I think you're starting to see, because of some of that that were there -- I mean, if you remember in the Boddington pit term, 10-year renewal there, few years ago, it's quite fractious material, so it's making sure you got those sites as clean, you're keeping your catch benches clean, and making sure you've got that hygiene as you're stepping down, so you're not creating problems for you still into the future because you're not looking after your bench hygiene.

Tanya Jakusconek -- Scotiabank -- Analyst

Okay. And then just on the Goldstrike Roaster, like I don't know if Rob can share with us the impact of that roaster, portion of the roaster being down for Q3. What that would be as an impact to you like you gave us for Tanami?

Tom Palmer -- President & Chief Executive Officer

Sure. And, Rob's in regular. I mean, Rob's -- [Indecipherable] would talk every week there, every couple of weeks. So it's the -- it's the mill feed in the roaster and it's the clipping on the mill that's had the fiery [Phonetic] arms being replaced. And I'll let Rob give a bit of color in your understanding of the impact from an MGM [Phonetic] perspective.

Rob Atkinson -- Chief Operating Officer

Yeah, certainly. Tanya, is it -- obviously, it has been a major failure [Indecipherable] end of May. We're expecting it to come up sometime in September. What the team at MGM has been able to do is run a different type of feat there, whether it's the high carbon materials to make sure that there's still material that were going through that particular mill. But in terms of the impact, when we look at the roaster and also some of the challenges that are occurring at Turquoise Ridge, we are looking at for Newmont about 40,000-ounce impact.

Tanya Jakusconek -- Scotiabank -- Analyst

Okay [Speech Overlap]

Rob Atkinson -- Chief Operating Officer

Sorry, Tanya.

Tanya Jakusconek -- Scotiabank -- Analyst

Yeah. Then in Q3, for your shaft [Phonetic].

Rob Atkinson -- Chief Operating Officer

For the second half -- for the rest of the year.

Tom Palmer -- President & Chief Executive Officer

Rest of the year.

Tanya Jakusconek -- Scotiabank -- Analyst

Rest of the year. Okay. And [Speech Overlap]

Tom Palmer -- President & Chief Executive Officer

Rob and I are also hitting up to -- across [Indecipherable] on Sundays, where our quarterly Board meetings [Phonetic], so we're going to have a chance to have a bit of a look there as well.

Tanya Jakusconek -- Scotiabank -- Analyst

And if I could just get -- squeeze one more in, just on the status of the illegal miners that are going on in Ghana, and maybe what's happening there?

Tom Palmer -- President & Chief Executive Officer

If Rob or Steve [Phonetic] -- [Indecipherable] got some here as well [Phonetic] So, Rob or Steve, want to pick up that one?

Rob Atkinson -- Chief Operating Officer

All right, I'll kick off, Steve. And, Tanya, one of the key things I'd say is it, year-to-date there's actually been quite a remarkable turnaround there in terms of actually on site. The presence of the illegal miners on the site has been managed particularly well, that the Canadian authorities are working closely with us to make sure that we're not only targeting the illegal miners, but also where the gold is getting processed is also getting sold. And the response from the Ghanaian authorities has been first class.

At the same time, we've increased our intelligence and monitoring our response, etc. So in many ways, the way in which we are managing what we can manage on-site is actually going quite well with a clear partnership with the Canadian authorities. There has obviously been some issues offsite, and perhaps, Steve, if you want to just talk about that?

Stephen P. Gottesfeld -- Executive Vice President and Chief Sustainability & External Affairs Officer

Sure, Rob. So I guess, I would just add that, as Rob was saying, we obviously rely on the government authority to provide security as well as our own security, as you know, we're committed to the Voluntary Principles on Security [Indecipherable] those trainings are already ongoing. Maybe as particular a case, there were several dozen individuals who were clearly [Technical Issues] the mining activities and have a mandate to engage in protective action. We have a robust ASM [Phonetic] program. We focus on maximizing local hiring, local procurement, and alternative livelihood work. We will continue to do that. Partner as closely as we can with the government and also the local stakeholders and traditional authorities. They're after all of the owners [Technical Issues] We believe that the steps being taken will calm the situation now, but -- and we'll be watching it very carefully.

Tanya Jakusconek -- Scotiabank -- Analyst

Thank you so much for taking my questions.

Tom Palmer -- President & Chief Executive Officer

Thanks, Tanya.

Operator

The next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Anita Soni -- CIBC World Markets -- Analyst

Good morning, everyone. So the question I guess, is just a little bit more on the input cost or the inflationary pressures that you're seeing. So, as I look at the guidance, you said you'd be at midpoint to top-end of the guidance range there, on the plus or minus 5%. So for year-to-date, you've hit the middle of that range. So is that to say the second half of the year could be on the plus -- plus 5% or higher for second half cost structure?

Tom Palmer -- President & Chief Executive Officer

One of the things to monitor with our cost guidance is we guided a $1,200 gold price. And so, when [Speech Overlap] you see our year-to-date actual costs, they include production taxes and royalties of some $20 to $30 an ounce, because we've been at or around $1,800. So it's factoring a few -- it's factoring in that $20 to $30 assuming gold price stays at its current levels, will continue to flow through in our actual cost going forward.

Anita Soni -- CIBC World Markets -- Analyst

Okay. I'm not sure if that made it better or worse, but let me think about that. The second question, I guess, would be around the moving to the second half of the year -- or sorry, moving into 2022, thinking about the guidance that you've given on costs. So, if I'm going to summarize all the commentary, I think you're basically saying, development costs are encapsulated already in the two guides you've given for the two projects as they stand for Ahafo North and Tanami. And then secondly, sustaining costs and operating costs, you're seeing a 3% to 5% increase, and that includes, I guess, all kinds of input and labor escalation. Does it include COVID impacts as well?

Tom Palmer -- President & Chief Executive Officer

Yes, yes. So we are -- and we're building our plans now, Anita. But we are incorporating. We do expect those kinds of protocols and costs to continue into next year. So, we are building assumptions around those into our costs as we build our plans. In that, when I talk about 3% to 5%, that's including in the provisions we made for that.

Anita Soni -- CIBC World Markets -- Analyst

Okay. And then as you mentioned, it's done a $1,200 gold. So is there any thoughts to increasing that number for next year, so that when we look at this chart next year with those royalties being better captured with the higher gold price?

Tom Palmer -- President & Chief Executive Officer

We certainly -- we certainly are maintaining our discipline internally with our business plan to build at that $1,200 assumption to ensure we've got the robustness and that discipline in our culture. And we're devoting that at the moment, how we think about providing our cost guidance for next year, whether we maintain an assumption on a $1,200 revenue gold price for -- or whether we were to traject to some other numbers. So we are considering that as we -- as we pull together our numbers.

Nancy, do you want to make a comment?

Nancy Buese -- Chief Financial Officer

Yeah, Anita, I would also add, we will continue to provide you with sensitivities around all the important drivers. So, even in a $1,200 gold price, you'll be able to articulate and make good assumptions about different gold prices and outputs. So, for example, the comment that Tom made on the taxes and royalties about the prices higher than $1,200, we will continue to guide clarity around those so you can get a better picture, even at the $1,200 level.

Anita Soni -- CIBC World Markets -- Analyst

Okay, all right. Thank you very much.

Tom Palmer -- President & Chief Executive Officer

Thanks, Anita.

Operator

The next question comes from Mike Parkin of National Bank. Please go ahead.

Mike Parkin -- National Bank Financial -- Analyst

Hi, guys. Thanks for taking my questions. In Peru, there certainly seems to be a fair bit of issue, not specific to Yanacocha but to just the mining industry in general, about kind of a lack of investment and flow of monies earned back into local communities. Can you give us some color in terms of what your stakeholder engagement has been like with your local communities that are impacted by Yanacocha? And what, if anything, you're kind of planning to do differently if you do go ahead with a full funds decision on the Sulfide project?

Tom Palmer -- President & Chief Executive Officer

Thanks, Mike. Great question, and I'll pass it across Steve Gottesfeld to give you some color in terms of some of the aspects of the work we're doing there.

Stephen P. Gottesfeld -- Executive Vice President and Chief Sustainability & External Affairs Officer

Thanks, Tom. And thank you, Mike, for the question. I think, as you know, Peru really is a [Phonetic] pillar in the quarter. And really a cornerstone for the Peruvian economy and we've been there for well over three decades now. And our relationship with the government, Mike, [Phonetic] has really improved over the years. Obviously, the Yanacocha is a huge presence in Cajamarca and the community has grown substantially over time. I mean, there have been challenges for sure with regard to delivery of value coming from the central government in form of taxes [Phonetic] as to where that money gets distributed. And over time, they've -- you know, with different administrations, we've seen more or less funds come back into the region.

Obviously, we value through -- I mean, extensive [Phonetic] and formal local hiring, local content. And I would say, honestly, that as hard-hit areas, Peru and copper market have been in this COVID pandemic environment, our relationship has really strengthened during this period of time. In fact, we just had a vaccination clinic opening up in our offices in Cajamarca, and I believe it's the only mining company that's been able to do that in Peru, to date. So our intention certainly is and has been the focus on the value provided to our stakeholders in Cajamarca. Our relationship is not only with the many people [Indecipherable] around our operation but also with the regional government, continues to strengthen. Our intention would be throughout this process to continue to work with them to find ways, especially as we look at moving forward with Yanacocha's [Phonetic] Sulfides and maximizing that value. Certainly, we want to partner with the central government to determine how to best provide the return of those dollars back into the community. And I'd also encourage you to take a look at our sustainability report on the programs that we have more broadly in the copper market, and the efforts we've made and the economic contribution that's occurred.

Mike Parkin -- National Bank Financial -- Analyst

All right. No, thanks for that. And one other one, just back to mentioning how freight is weighing in on the inflation, can you -- are you seeing any major challenges with access to securing container availability. Reading a few reports out there saying that's becoming quite a challenge. Is that something that's impacting either the movement of concentrate or supplies into sites, or whatever color you can kind of provide would be appreciated.

Tom Palmer -- President & Chief Executive Officer

Yes. Thanks, Mike. No, we're not seeing any impact on that perspective around freight.

Mike Parkin -- National Bank Financial -- Analyst

Okay. And that's it from me guys. Thanks so much.

Tom Palmer -- President & Chief Executive Officer

Thanks a lot.

Operator

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

Tom Palmer -- President & Chief Executive Officer

Thank you, operator. And thank you all for joining us today. And please, as this virus continues to play out, stay safe and healthy, and look after your family. Thanks, everyone.

Operator

[Operator Closing Remarks]

Duration: 69 minutes

Call participants:

Eric Colby -- Vice President of Investor Relations and Communications

Tom Palmer -- President & Chief Executive Officer

Rob Atkinson -- Chief Operating Officer

Nancy Buese -- Chief Financial Officer

Stephen P. Gottesfeld -- Executive Vice President and Chief Sustainability & External Affairs Officer

Tyler Langton -- JP Morgan -- Analyst

Fahad Tariq -- Credit Suisse -- Analyst

Greg Barnes -- TD Securities -- Analyst

Jackie Przybylowski -- BMO Capital Markets -- Analyst

Tanya Jakusconek -- Scotiabank -- Analyst

Anita Soni -- CIBC World Markets -- Analyst

Mike Parkin -- National Bank Financial -- Analyst

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