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Newmont Corporation
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Good morning and welcome to Newmont's Third Quarter 2021 Earnings Call. All participants will be in listen-only mode. Should you need assistance [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Tom Palmer, President and Chief Executive Officer, please go ahead.
Good morning. And thank you for joining new months, Third Quarter 2021 earnings call. Today, I'm joined by Rob Atkinson and Nancy Buese, along with other members of our executive team. And we will be available to answer questions at the end of the call. Before I begin, please note that cautionary statement and refer to our SEC filings, which can be found on our website. Newmont delivered on a challenging Third Quarter, generating strong free cash flow, continuing to provide industry-leading shareholder returns and investing in profitable projects, including our latest Ahafo North, which was approved for AML in July. This quarterly performance was achieved even as we continue to manage through the evolving complexities of the global pandemic. And we remain committed to protecting the health and well-being of our workforce and local communities.
Throughout the mining sector, we are continuing to see the non-health related challenges caused by the pandemic, including labor shortages, rising input costs, and supply chain disruptions. As the industry leader, Newmont is well-positioned to respond to these challenges by leveraging our proven operating model and balanced global portfolio to deliver long-term value from our responsibly managed [Indiscernible]. Turning to our quarterly results, let's take a look at the highlights. During the Third Quarter, Newmont produced 1.4 million ounces of gold and 315 thousand gold equivalent ounces from copper, silver, lead, and zinc. We generated operating cash flow of $1.1 billion and strong free cash flow of $735 million of which $750 million is attributable to new Newmont.
Supported by our clear strategic focus, we continue to apply a disciplined and balanced approach to a capital allocation priorities. With $7.6 billion in total liquidity, we have sustained a net debt to EBITDA ratio of.2 times. Maintaining our financial flexibility, whilst we continue to reinvent in our business and return cash to our shareholders. Earlier this month, we announced the transition to a fully autonomous holdings fleet at Burlington. An important milestones about Newmont and the gold industry as a whole. Our fleet of 36 trucks with improved safety and productivity at these cornerstone asset.
We also continue to invest in and develop how much profitable near-term projects, including [Indiscernible] expansion to the [Indiscernible], the Chinese store more productive underground mining method at a hot buy-sell and Yanacocha sulphides. This quarter, we completed nearly $100 million of opportunistic share repurchases at an average price under $66 per share. And we declared a third quarter of $0.55 per share, resulting in a dividend yield of other 5 or 4%. 12 months ago, we announced that our industry-leading dividend framework, establishing a clear pathway for stable and predictable returns. Over the last four quarters, Newmont has returned more than $2 billion to shareholders through dividends and share buybacks.
Demonstrating our confidence in the long-term value of our business and our ability to maintain financial flexibility while steadily reinvesting in our operations. At Newmont, we have created a robust and diverse portfolio of operations and projects around the globe. And we believe that way we choose to operate matters. Among our 12 operating mines and Tretorn Peintures over 90% of our attributable gold production is from top 2 jurisdictions, which we define as countries classified in the A&B writings ranges by each of Moody's, S&P and FItch. Underpinning our [Indiscernible] fixed organic project pipeline on both greenfield and brownfield opportunities, managed through our integrated operating model with our proven track record of delivering value to follow our psychosis.
You won't [Indiscernible], an unmatched, an industry-leading project pipeline while the top buying to steady production and cash flow well into the 2040s. Every one of our operations has NIM on exploration opportunities that, can leverage our existing infrastructure and extend monologue. With the stability and depth of our brand portfolio, we are able to explore in some of the most perspective greenfield districts in the world in a disciplined and deliberate way. This quarter, we continue to advance our mid term projects, including the second expansion at Panama and Australia's northern territory.
Through the development of a 1.6 kilometer day production shop and supporting infrastructure, these projects supports the thoughts future at the long life and low-cost producer while providing a platform to further explore, I prolific mineral endowment in the Panama district. The development of a hotline all approved in July. These project expands our existing footprint in Ghana adding more than 3 million ounces of gold production over on an initial for [Indiscernible]. And the Yanacocha sulphides project, which makes [Indiscernible] on life at these cornerstone asset for decades to come.
Newmont remains committed to the Yanacocha sulphides project and will reinvesting at least $0.5 billion through 2022 to advance critical path activities including detailed engineering, long-way procurement, third quarter works, and the installation of a combination facilities for the construction workforce. Has previously announced, given the current status of the pandemic in Peru, and the potential for more contagious variance. We have extended our full funds decision COVID result project to the second half of 2022 and will progress the project as the pandemic allows. 2 weeks ago, I had the opportunity to do the [Indiscernible] and you guys have government lean, and other key stakeholders to talk about, sites and mutually beneficial path forward.
All the encouraged bodies interactions, and look forward to this next chapter in light, yet encourages long and profitable history. The global pandemic had and will continue to challenge all of us for some time to come. I would like to take this opportunity to recognize the very significant efforts that are being applied at all of our operations to keep our workforce and local communities safe and healthy. As you can see in this photo, we all had the opportunity to bid with Ghana last quarter and experienced firsthand the important work our team is doing to manage through the current pandemic with agility and resolve. In 2020 and 2021, Newmont has invested more $2.7 million for COVID relief and local support in Ghana, and $1.4 million in full screening and security measures to protect their people and their families.
Throughout converse shifts with Ghana health and education services, big investments helped to establish wide ranging protocols and controls at both the [Indiscernible]. Distribute medical equipment and PPE at our mines, regional health facilities, and other regional institutions. The purchased PCR machines for effective testing and research. To donate cold storage units for temperature monitoring and vaccine storage. To raise awareness and share important health and safety messages through local radio programs and fun radio programs that provide a central lesson plan for students during school closures.
We're also focused on supporting the vaccination effort in Ghana, and working with the American Chamber of Commerce in Ghana, and Ghana Health Services to secure and deploy nearly 100,000 vaccines in in the area. At Newmont, we firmly believe that the COVID-19 vaccines are critical in combating the spread of virus. And until global vaccination rates substantially improve, our people and operations will continue to be affected. We announced [Indiscernible] towards a physician where ultimately all of our global workforce will be fully vaccinated. And we are closely monitoring and adhering to national vaccination mandates already in place. We are taking this important step because we fundamentally believe that effect setting is a critical part of supporting the recovery from a pandemic around the world.
Since March of last year, our focus has been on operating responsibly and efficiently while protecting the health and safety of our workforce and local communities from this virus. The government imposed restrictions on movement and the ongoing application of COVID related protocols. In addition to competitive labor markets in Canada and Australia, we continue to experience productivity impacts at many of our sites. Due to these impacts and some unexpected equipment reliability and weather-related challenges, we have decided to update our full-year 2021 goals.
We now expect to produce approximately 6 million ounces of gold just below our original guidance range. And we are reaffirming our original guidance of 1.3 million gold equivalent ounces from copper, silver, lead, and zinc. Combined 37.3 million gold equivalent ounces. The most of any Company in our industry, and an improvement of almost 400,000 ounces compared to last year. Updates from our original goal production outlook are largely due to challenges of Boddington, Including unusually severe weather and heavy rainfall, shuttle reliability, and operational delays associated with managing bench hygiene as mining moves into deeper sections of the pit.
This was combined with the continued ramp up of the autonomous [Indiscernible] plate and [Indiscernible], technology for operation in a deep, open pit mine for the first time in the mining industry. As a result, Boddington delivered low expect come than expected. Impacting our ability to reach [Indiscernible], reducing volumes hands full year gold production estimate by approximately a 140 thousand ounces. As Rob will discuss later, we remained very confident that the overall efficiencies delivered by autonomous haulage will more than offset any short-term impacts on production at Boddington this year. Also at Nevada gold mines we are experiencing the consequences of the challenges [Indiscernible] operating partners in a relate [Indiscernible].
Carlin and [Indiscernible] are expected to be at the low end of their annual guidance ranges, largely due to the impact of the breakdown and repair to [Indiscernible] has reached is now expected to be below its annual guidance range. As a consequence, annual gold production from Nevada gold mine is expected to be at the low end of our annual guidance range. In addition to these -- as I commented earlier, the global pandemic continues to evolve and impact all of operations. Panama was placed into care and maintenance in late June and early July. And we are continuing to experience lower productivity as a result of COVID -related absenteeism and the tightening of the labor market in Canada.
The impact from lower production volumes coupled with higher middle process, has also increased costs for the year. For 2021, gold cost applicable to sales are expected to be $790 per ounce. And all-in sustaining costs are expected to be a $1050 per ounce. To point it out that our regional guidance was established using a $1200 [Indiscernible] price assumption. And we continue to use this assumption for our long-term mine planning and reserve modeling to ensure that we maintain discipline across all of our operations. However, due to the sustained high gold process throughout this year and the response to feedback from the investor community, we're providing our updated full-year cost outlook using a $1800 gold price assumption.
We expect these gold process to continue through the Fourth Quarter, adding approximately $50 per ounce to our all-in sustaining costs from inflation, higher royalties, and production taxes. Finally, we are decreasing our development capital estimate from $850 million to fit a $700 million with a portion of our spending associated with the second expansion of [Indiscernible] moving into 2022, but not impacting project schedule.
We're currently working to finalize our business plan for 2022. And today, we have a much better understanding of the impacts from the global pandemic than we need at this time last year. Looking ahead to 2022, we anticipate that production costs at $1900 gold price assumption will be similar to this year. Gold production is expected to improve by around 5% compared to 2021 as we continue to manage the impacts from pandemic related labor shortages on productivity across our operations. [Indiscernible] ounce are expected to be largely in lawn 2021, as we're building increased costs from inflation, high metal prices, and ongoing country resided safety protocols, [Indiscernible] scaling forward.
Capital in 2022 remained unchanged from our original outlook, as we enter a period of significant reinvestment. An important component in grind production, improving margins and extending monologue. These reinvestment back into our business will enable Newmont to steadily increase production and improve cost over time for our portfolio of world-class, long life operations. We look forward to providing you additional detail on our long-term outlook in our annual guidance webcast in early December. And with that, I'll turn it over to Rob, for a more detailed out look at global projects and operations. Over to you Rob.
Thank you, Tom. And good morning. As Tom mentioned, the pandemic continues to present challenges across our operations and joint ventures. And I am proud of our people who continues to safely deliver the [Indiscernible]. Well COVID infection rates are declining in vaccination rates on improving near our operations to knock-on effects from supply chain disruptions and tightening lever markets is creating new complexities to manage. There is increased pressure on enthused commodity prices such as steel and diesel. In addition to unpredictable freight costs and timing of deliveries. As an example, digital costs have increased significantly in recent months, adding $7 per ounce to our all-in sustaining costs compared to the previous quarter.
And over $15 per ounce compared to the previous year. We are also keeping a close eye and working hard to reduce voluntary attrition rates across our global business and halt labor markets, particularly in Canada and Australia, by creating an unprecedented labor shortage impacting productivity. These inflation trends may show up in future contract renewals and we expect that we could start seeing additional impacts as early as the fourth quarter. And while it is difficult to predict whether these trends will persist for the long term, I am confident that our scale, strong partnerships, and proven operating model positions Newmont to secure the most competitive supply contracts and limit the impacts in productivity and costs.
Turning to a regional update, starting with South America. Merian remains a strong performer in the South American region and is celebrating our 5th anniversary since declaring commercial production in October 2016. The site continues to utilize an oral blending strategy to optimize mill performance, helping to offset unplanned mill maintenance and minor delays from heavy rain and the start for the quarter. Additionally, Merian delivered higher tons mined and great process. And we expect this trend to continue for the remainder of the year and into 2022. Fedro Negro continues to improve productivity and performance, significantly increasing tons mined and processed in each quarter.
The site team is managing the impacts from the pandemic as well as is possible. And I am proud of the mitigation efforts, shift change optimization, and the overall efficiency improvement delivered to help offset disruptions from earlier in the year. Given the effects of the pandemic, the site has delivered lower development rates in 2021, limiting access to higher grade ore and reducing production in the Fourth Quarter and into 2022. And yet, despite challenges from the virus, the site continues to progress future organic growth projects, including the development of [Indiscernible] costs and the expansion in the Eastern industry, which has the potential to extend mine life beyond 2030.
Yanacocha has also experienced continued challenges from the pandemic impacting productivity, mainly due to reduced labor availability. To offset these challenges, the sites implemented mine sequencing changes, focusing on higher grades, efficient whole [Indiscernible] roads, and optimal or placement on the leach pads. As a result, Yanacocha delivered high grade of ore and improved recovery from the leach pads. As discussed in our third quarter 10Q, we continue to progress detailed study [Indiscernible] to further define water management requirements, along with other closure activities and we will provide an update on this with the fourth quarter results.
And as Tom mentioned, we're progressing Yanacocha sulphides. A project with the potential to extend mine life at this cornerstone asset well beyond 2040. Turning to our North American region, on our Canadian operations Musselwhite, Eleonore, and Porcupine we continue to be impacted by COVID absenteeism and a tightening of the Canadian labor market. And we expect these sites to be at the low-end or below our annual production guidance ranges. We expect these labor trends to continue into 2022 with the effects having been particularly impactful at Musselwhite and Eleonore. As labor shortages and access to specialized services has resulted in lower tons mined and processed than planned.
Porcupine delivered Clarksons mine from the Hollinger open pit, helping to balance the impact of higher than expected levels of graphite and the Hoyle Pond on the grid, which resulted in drilling delays, and as a consequence, resulted in less high grade or being mindful in the grid. I presented our Canadian operations last month, and I'm pleased to report that we are making a lot of positive enrollments at Musselwhite, Eleonore and Porcupine to increase development rates through the use of jumbos and Tele -Remote loaders in driving productivity hard through the execution of the suite of our Full Potential initiatives.
With the full support of our subject matter experts deployed to these sites, these initiatives will improve efficiency and production. Moving to CCMV, the mine experienced lower grades and recovery in the third quarter. However, higher tons mined and changes to mine sequencing during the third quarter, are expected to increase leach pad production in the fourth quarter and into 2022. And finally, Penasquito delivered another strong performance in the third quarter due to higher tons mined and processed. In addition to strong recovery rates from a number of full potential improvements.
Since acquisition, Penasquito has delivered over $375 million in free cash flow improvements with more than 80% of this value delivered from mining and processing improvements, which continued to generate value today and will do so well into the future. Shifting to Australia. Canada mine delivered solid performance in the third quarter as higher grades helped to offset lower tons mined and processed as a consequence of the coal LED-related care maintenance period in May, June, and the end of July. Although this periods has reduced the sites through year production by approximately 40 thousand ounces. Panama is fully operational, performing very well, and is fully expected to deliver a strong finish to the year.
In addition, the team further advanced Panamanian expansion 2. And during the third quarter, we progressed the construction of the headframe, and have now completed nearly 70% of the rimming, of the nearly one mile deep shaft remaining on track to deliver significant ounce, cost, and efficiency improvements in the first-half of 2024. As Tom mentioned, Burlington experienced heavy rainfall in the third quarter impacting the ramp-up over autonomous haulage, and reducing tons [Indiscernible].
I'm pleased to share that Boddington continues to achieve superior mill performance, reaching nearly 11 million tons processed during the third quarter. We are also proud to deliver the gold industry's first autonomous haul truck fleet that first service gained in our sector. I'd like to thank our team and our partners at Caterpillar for their ongoing partnership, dedication, and drive as Boddington continues to ramp up the truck fleet to full productivity, and to fine tune the technology for a very productive operation and a deep open pit mine.
Delivering this project on time and on budget during a global pandemic is an enormous accomplishment, leveraging Newmont's scale, technical expertise and partnerships to manufacture, deliver, [Indiscernible] commission and operate a fleet of 36 autonomous trucks in less than 18 months. As we look ahead, we expect to reach improved grades and achieve higher tons mined during pump to the efficiencies from autonomous haulage, increasing production in the Fourth Quarter and into 2022. And finally, turning to Africa.
Achieving delivered another consistent performance despite very heavy rainfall third quarter as higher through third strong recoveries helped to offset unplanned mill and equipment maintenance. The site is well-positioned to reach high grade and deliver its highest production of the year during the Fourth Quarter. We delivered a very strong Third Quarter. As higher tonnage mine for the CBPO open pit, and improved mill performance helped to offset challenges with whole truck availability at our underground operation.
That's [Indiscernible], we continue to progress the development of our new underground mining method, sub level shrinkage, and we expect to reach full production by year-end as planned. Improving grade and underground tons mined. In addition, the team continues to advance Ahafo North. We have begun mobilizing key personnel and I'm pleased to see that engineering is approximately 80% complete. We continue to engage with local communities and regulators to ensure a mutually beneficial path forward as we develop this prolific ore body and create the next-generation of mining in Ghana. And with that, I will turn it over to Nancy on the next slide.
Thanks, Rob. For the strength of our assets and integrated operating model, new mines is, in invest financial position and it's a 100 year history. Building long-term value with the most disciplined and balanced approach to capital allocation in the industry. Let's take a look at the financial highlights. In the third quarter, Newmont delivered $2.9 billion in revenue at an average realized gold price of $1,700.78 per ounce. Adjusted Net Income of $483 million or $0.60 per diluted share. Adjusted EBITDA of over $1.3 billion, a decrease from the prior year's quarter due to lower gold prices, lower sales volumes, and cost pressures stemming from the global pandemic. And strong free cash flow of $735 million of which 97% is attributable to Newmont.
Although quarterly free cash flow is lower than our record performance last year, we achieved a 27% improvement compared to the second quarter. Our unmatched cash flow generation, allows Newmont to provide superior shareholder return, largely through our industry-leading dividend framework. This week, we declared a regular quarterly dividend, $0.55 per share, an increase of 38% over the prior year, and consistent with our last three quarters. With a yield of approximately 4%, our regular dividend is the highest in the gold industry placing Newmont among the top 10% of the S&P large cap dividend payers.
Third Quarter GAAP net loss from continuing operations was $8 million or $0.01 per share. Adjustments included $0.46 related to a loss recognized on the pending sale of the [Indiscernible] currently in care and maintenance in Peru, The sale of these assets reduced the storage costs while we maintained long term optionality around the future development of the project. Adjustments also included $0.12 related to unrealized mark-to-market losses on equity investments. $0.10 related to reclamation and remediation adjustments at historical mining sites. $0.08 related to tax adjustments and valuation allowance and $0.01 of other charges.
Making these adjustments into account, we reported third quarter adjusted Net Income of $0.60 per Diluted shares. As a reminder, due to our status as a U.S. GAAP filer, our adjustments to net income do not include $23 million of incremental costs incurred this quarter as a result of the COVID pandemic. Adjusting for these costs would have resulted in approximately $0.03 of additional net income per share. And we expect these costs to continue throughout the year as we prioritize the health and safety of our workforce and local community. Newmont dividend framework is based on our unmatched ability to generate attributable free cash flow, for every $100 increase in gold prices above our ACE assumption of $1200.
Newmont delivers $400 million of incremental attributable, free cash flow per year. And Numark is the only Company in the gold mining industry with the ability to generate these levels of attributable free cash flow. As Tom mentioned, we announced our dividend framework, one-year ago, providing shareholders with a stable base, annualized dividend of $1 per share and the potential to receive between 40 and 60% of the incremental attributable free cash flow generated above the $1200 gold price. This framework provides stable and unpredictable industry-leading returns for our shareholders, and demonstrates our confidence in our long-term outlook and our ability to maintain capital discipline.
The third quarter dividend and declared was consistent with our second quarter, calibrated at $1,800 gold price assumption, and 40% distribution, and incremental free cash flow. And we continue to review our dividend on a quarterly basis with our Board, evaluating our operational and financial performance and outlook over a long period of time. Our capital allocation priorities remain clear. To reinvest in our business through exploration in organic growth projects, to maintain financial strength and optionality on our Balance Sheet and should provide industry-leading returns to shareholders.
Throughout the year, we delivered on each of these priorities by progressing our profitable reinvestment in the business, particularly with the advancement of the Panama expansion, Ahafo North, and Yanacocha Sulphides. Delivering the first autonomous haulage fleet in the gold mining industry, improving safety, and productivity at Burlington, completing the GT gold transaction in May of this year, returning more than $1.3 billion to shareholders per dividends and nearly $250 million through opportunistic share buybacks. And maintaining a strong balance sheet with $7.6 billion in liquidity and a net debt to EBITDA ratio of 0.25, preserving Newmont 's financial strength and flexibility to sustain the business across price SEC [Indiscernible].
With one of the industry's lowest [Indiscernible] average cost of debt at 4.3%. As we look ahead, we are confident in our ability to deliver on our disciplined capital allocation priorities, creating long-term value for the business, and maintaining our position as the world's leading gold Company. And with that, I'll hand it back to Tom to wrap up.
Thanks, Nancy. Newmont has an unmatched portfolio of world-class long-wall operations. And an organic project pipeline that is the best in the industry. And while we and the broader mining industry continue to face a range of challenges brought forth by this global pandemic. I am confident that our key strategic focused proven operating model, superior execution, and leading ASG practices has positioned Newmont to remind the world's leading gold Company and continue to deliver long-term value to all of our cycle orders. And with that, I'll turn it over to the operator to open the line for questions.
We will now begin the Question-and-Answer session. [Operator instructions]. And our first question comes from Fahad Tariq of Credit Suisse, please go ahead.
Hi. Good morning. Thanks for taking my question. Maybe, first on slide 11, on the North American operation s. Can you talk a little bit about what steps are being taken to address the absenteeism at Musselwhite and Eleonore? As far as I can tell, some of your Canadian competitors aren't facing similar issues. I'm just curious, what exactly is happening there and what steps are being taken? Thanks.
Thanks, Fahad and good morning. I'll pass the question across to Rob. We saying that's a combination of two things I think Rob can expand on in terms of actions we're taking. Voluntary attrition, particularly a couple of flying [Indiscernible] that enables that you typically expect in a [Indiscernible] they might change 12,14%. But and what we're seeing on top of that, is the compounding absenteeism associated with COVID. So you can get a 10% to 15% absenteeism. On top of that, people are unable to attend work because of COVID related absences. That sits behind the number. Two of our three thoughts are, a far-cry thoughts and I'll get what we focus on the actions we're taking to mitigate some control that trend.
Thanks Tom. And the other thing I just mentioned to build on what Tom said, was certainly fun to be [Indiscernible] as points in the third quarter were some of the highest infection rates of COVID in Canada as well. And in particular in Musselwhite, we were up to 15% absenteeism because of what Tom spoke about. [Indiscernible] taken -- we're taking the basic steps where every person [Indiscernible] is being case managed, very high-profile in terms of who's at work, who's not, the reasons why, and the follow-up and the necessary management.
There's also in terms of recruitment, we've got a very focused team, dedicated team just on the Canadian [Indiscernible] market to make sure that we are [Indiscernible] around employments as quickly as possible, [Indiscernible] new employees and on boarding them very, very quickly. But certainly, it bits boils into the basics as the vaccination rates go up, as the controls enter and really doing the basics of managing well. If there are people that we're seeing regularly off, they're being managed very, very closely. But, there's nothing -- no rocket science, it's really just doing the basics very, very well.
Okay, great. And then maybe just switching gears to a household. I don't think the guidance change for the full year, so it implies a really high production rate in Q4. Rob, maybe if you could just speak to that. Is that the expectation?
I don't pick that up again, [Indiscernible] Cluster Rob (Ph) but you lost certainly is say I strong fourth-quarter out of Ahafo compared to the first 3 quarters, we were pretty consistent. Rob make sure you talk to the drivers behind that strong fourth-quarter.
Certainly. Underground continues to come along very well and we did our first firing earlier in the year for the sub-level shrinkage so we are seeing higher grade come through there and the performance of Ahafo in generally in the open pit, hand in the middle has been very positive. I think it's again, just the factors of this decision remains around the underground really starting to bear fruit, as well as good productivity elsewhere in the operation.
Okay, great. That's it for me. Thank you.
Thanks Fahad.
The next question comes from Michael Glick of J.P. Morgan. Please go ahead.
On TASC, could you walk us through, what you're currently seeing down to a specific item such as, consumables and other raw materials? And how you're working to mitigate inflation from the Capex and OpEx perspective going forward. And then kind of based on what you're seeing in 4Q, how should the cost trajectory look into 2022?
Thanks, Mark. I'll kick-off -- give Rob to provide some color [Indiscernible] I would ask Dean Gehring to get Chief Technology Officer [Indiscernible] global supply chain to make some comments on [Indiscernible] as well. We've been flagging at the end of last quarter that we see in cost inflation trends [Indiscernible] starting to see some of those flow-through now and it's part of our fourth quarter restoring, and we're certainly seeing those flying through into at least 2022. And it was part of comments about how we are starting to see 2022 shape up. So 2022, I think that will be for the mining industry a cost escalation story.
We've got pretty consistent, little un -improvement on production. So it's certainly a cost escalation story. We are seeing it's still upwards at around 5% when you aggregate it all together across materials, energy, and Liva. But we are seeing some pretty significant movements within that aggregated number. In fixed -- in some instances, we're seeing some improved costs. Adversely in Australia, Caterpillar parts are coming in shaper, has consequences, exchange rates and the like. But we are seeing some -- some significant cranes, as I have described, Jayco guided around the 5% market. Rob, if you wanted to add any color that you can build on.
Thanks, Tom. And I may just talk about [Indiscernible] in terms of what are we doing in terms of [Indiscernible] and before handing over to [Indiscernible] the prices and the inflation. Michael very much to full potential is what we're focused on. Is it all operations. They got the sweeter projects, which not only assist productivity, but it's also about cost reduction. And the big movers that we're focused on is things that Penasquito, including the recovery, which we're seeing significant benefits as a result of that. In the Canadian sites, we've moved across to jumbo rigs instead of the clean bolsters and tele remote loaders, which is improving our productivity significantly.
And even doing more of the basics, at Fedro Negro, where we just follow further equipment. We took a further 15 pieces of [Indiscernible] in the third quarter to make sure that we're running that fleets as efficiently as possible. And as such, just managing the consumables that we are going to need. But before potential as the way in which we are managing [Indiscernible].
Yes, thanks, Rob. One of the big areas we'll receive probably the largest variabilities actually is freight. And -- but we don't back out a bit freight makes up about 2.5 to 5% of all of our line of costs for major consumables. So you need to keep that in perspective. But one of the things we're doing to mitigate that as we're looking for opportunity using the [Indiscernible] our global supply chain, looking at our operations in a global sense, I think what we can do to maximize the amount of [Indiscernible] we put on these ships or in containers so we get the best pricing possible.
The other thing that we do is along the lines of mitigation is, we actually put in place pricing mechanisms that are transparent and they are really based on -- largely on the input pricing of all the commodities that we have. And those helps to actually softened the impact of inflation that we see.
And then just -- could you talk about that -- your view on industry consolidation, just all the things you just mentioned, we'd seen the point that a more scale is the more effective way to operate in this environment.
Thanks, [Indiscernible] a lot. I certainly see we industry with the number of publicly listed companies in the Gulf spices order of magnitude more than any other commodity that in itself, safety surfing, opportunity for consolidation in terms of the additional [Indiscernible] that you have. The elevated gold process, I think probably [Indiscernible] off a lot of that consolidation. I think -- [Indiscernible] delays that it will be necessarily some of these needs to medium-term cost escalation that will drive consolidation.
I think the belief that the issue around the work that needs to take place for old mining companies to achieve 2030 carbon reduction targets, greenhouse gas reduction targets, and ambitions to achieve net zero about 2050, which we are clearly seeing many governments around the world saw an opportunity. In order to achieve those targets, you'll need a scale and you will need life. And over the course of this decade, we will see consolidation driven by that imperatives. Our predict climate change will be the drive or rather than some new term COVID related escalation.
Understood. Thank you very much.
Thanks, Michael.
The next question comes from Greg Barnes of TD Securities. Please go ahead.
Thank you. Tom, I don't understand the deployment of the autonomous trucks to that Boddington. I know you did it on time on budget that you seem to be having some challenges to get it working the way you want it to work. What are those challenges and what are you doing to address it?
Thanks, Greg. And good morning. The key challenge behind commissioning the autonomous gate and I'll get Rob to provide some more color was associated with the significant whether that you had in that mine at the [Indiscernible] to commission the trucks with through and now got the crafts commissions. And some of those shooting issues in place. And as is a pass across the globe to give you some color on how the fleet is performing now that we've had about a month under our belt of fully autonomous operation in that mine, which is one of the factors when you can actually move to fully autonomous and you're not managing the interaction with vehicles that have people inside of them.
And as Rob provides you some data what's in the context of whether it's continued in Southwest and Australia in fact October was the already -- not even the end of the month is already the wettest month since records began in that part of the world, so with that context, I'll get Rob to give you some color on how autonomous [Indiscernible] is performing.
Thanks Tom and thanks for the question. Greg, is it certainly with every passing weeks it's on [Indiscernible] is more and more productive. And just to tell a little bit of the story is that, since we initiated zero injuries, [Indiscernible] over 600 thousand kilometers were up above the 21 million tons. And we've connected all the machines. So there's an awful lot of good work which is going on. At the start of September, we were round about 53% a year, which is one of the critical metrics of making sure that the trucks are utilized as much as possible. We're now off about the 61% over the last week and we've actually hit shift by shift up around the 68%, 69% a year. We've got to achieve that on a consistent basis but one of the critical things particularly important for next year's.
Next year's tonnage is roughly averaging about a 135 thousand tons out of fit. We've already achieved 160 thousand and Hyundai's. So wells we're still rough things, just a high amount and to fine tune as Tom said whether it be some road widths, whether it's the road conditions as a result of the wet weather etc. We are very pleased with about how things are progressing. We've got terrific support from Caterpillar. We've got a number of people from Caterpillar dedicated there on the site. So certainly, we think things are progressing well. But the rain played havoc. I'll be honest. But in term of commissioning, we've still got some members being the quickest commissioning of any EHS system that's been achieved to date.
And so far that every causing week, as I said things get better. And [Indiscernible] expert tons are presenting to the middle east running exceptionally well and it's running at record right. So we're confident around the Fourth Quarter, particularly as we enter into the next year for that truck fleet to deliver both expedite tons and will know which is performing well.
I'm not sure what 68% EU mean Rob.
Sorry, Greg. Basically, it's essentially seeing how often is your truck running, doing productive work. And typically one of the key reasons that we went to Tony 's, if you've got humans operating them typically you've got lunch delays, you've got toilet breaks, you get things like that. And the EU is one of the key --
The EU is an effective utilization, Greg.
Okay, so what's the targeted EU for the autonomous fleet versus human's fleet, I guess.
It would be that, the target that we justified it on is 68%. And certainly way or we will be planning is certainly trying to achieve a lower tile in that.
So you've already achieved the targeted rate then?
No. We've achieved that inter shift levels, where we have just been running the averages [Indiscernible] that 60, 61%. So as I said with each passing shift, we're getting further insights, further improvements, for this I'm very confident we will be up there and hitting those targets day in day out next year.
Okay, great. Thank you.
Thanks Greg.
The next question comes from Josh Wolfson of RBC Capital Markets. Please go ahead.
Thank you very much for taking my questions. I appreciate the disclosure for the 2022 pretty beyond the expectations. Looking at the existing 5 year guidance, there were some expectation for cost reduction into 2022. There's a big step down there previously and then, the results, some reduction expected thereafter in future years 2023 and '24 as well. When you look at the trends that we're seeing in the sector, you should -- we still expect that kind of trajectory longer-term? Or is there a potential that some of the operating improvements are going to be offset by these trends just to mean they continue.
Thanks, Josh and good morning. You certainly going to see costs at a Newmont on to add in the industry all about it because of the escalation purchase that we've been talking about, the inflation purchase, that the cost improvement is still coming at Newmont. Because it's associated with the reinvestment when I came back in our business study, We'll continue to see improvements out of Boddington with autonomous haulage as it is now being commissioned, as Rob was just talking about how you can choose a very predictable autonomous system, because of the automation now of the [Indiscernible]. We will see improvements from how the commission yields the shut [Indiscernible] we can bring all the servers much more efficiently.
The underground mining method at Subika, the NIM and Ahafo North and Yanacocha sulphides, are all investments that we're making that will deliver improved costs over the guidance for 5 plus year period. What we're seeing -- so those investments being made [Indiscernible] opening costs will come in as investments because we'll be delivering and producing answers at much better margins. What we're seeing is a consequence of COVID is those 3 key development projects [Indiscernible] Ahafo North, and Yanacocha sulphides have been delayed and sitting on top of the each other some more.
So we will see through '22 and '23 a significant development capital spend. In fact, it will be a development capital spend that, we haven't executed at Newmont generation, so it's a significant rate investment in that business. And we really start to see the benefit from that investment, later part of '23 in to '24, '25, '26, and '27 with some of those projects. A slight delay in terms of when we say the most -- better margin ounces coming through and some stacking up about development capitals or consequence of managing our own private --
Okay, thank you. And then on the capital numbers similarly, it has been a number of changes for some of the existing projects and sequencing obviously with Yanacocha Sulphides, how should we be thinking about that? And it sounds like the baseline sustaining capital numbers maybe should be higher longer term is that reasonable to assume?
Just -- sustaining capital for a portfolio of MSRs is really about a billion dollars that might be 951 year and be a 950 another year that has all look at a business plan. So it's a pretty steady spin for a portfolio that MSRs around 81 billion. For the development capital, market Rob, just to provide more color, but for those Telmar expansion to and Ahafo North. Some of the factors that impact cost, we've got locked in. I will get Rob to cover those to see Yanacocha Sulphides, obviously, we're delighted the full fund due to COVID to the second half is mixed.
We continue to do all the detailed engineering. We continuing to do the critical path procurement, which is locking in factories slots. They're oxygen plants and specialized steel for the likes and the likes. We are de -risking Yanacocha sulphides in this environment. And then [Indiscernible] Panama North in terms of cost.
Thanks so much Tom. In terms of channeling to that, the engineering is progressing very well and inside that high level where you could hide a degree of confidence around what you need to do. The vast majority of the cost and time of mine is around the reaming and fixing the shafts. So we're certainly confident at this point in time that, that work is contained. The biggest challenge we've got is fixed around the labor rates. And again, the post COVID world in Australia in terms of orders and that's managed. But that's where the majority of costs are. And we've got a good partner in [Indiscernible] and then [Indiscernible].
And as I said, the engineering being so well progress is so key. And Ahafo North, we pre -ordered all the equipment and it also goes by recruitment is making its way over or being manufactured as we speak. The engineering gain was at a very high level. And we've got a little bit of contingency there but we're not seeing anything at the moment. That's overly worrying us. They are thoughtful what Dean said in terms of potential delays and you don't see its nature of the [Indiscernible] business. But all-in-all because the engineering so well progress, I think we've got a high degree of confidence.
Thank you very much.
Thanks, Josh.
The next question comes from Tanya Jakusconek of Scotia Bank. Please go ahead.
Good morning, everyone. Thank you so much for taking my questions. Rob, can I just keep you on again, just to clarify on Boddington and Greg assets and I didn't know what that EU was either, but wanted to just make sure I understood that with the rain, hopefully behind us, keeping the road clear and clean, these automated trucks are performing as you expect? Because they kept dropping. So I'm just wondering if we've taken out that the issues than just stopping like we've cleaned it out with Caterpillar?
Yes. In terms of the communication [Indiscernible] those are the things which we have found out there's going to be time to time where you do get a communication issue for very general reasons and the system is built that if there is a communication issue, things stop. And we certainly manage to do that very well, especially the deep mine that there's some new techniques being done compared to fuel growth. But in terms of the roads, the feedback that I have had from the volumes in [Indiscernible] roads are in better shape than they've ever been and [Indiscernible] some of these trucks are able to pickup a lot of detail, whether it be rafting, whether it'd be rocks coming into the road, whether it be washers from bounds, etc.
So there is a huge amount of attention there and man will talk about what work the team has done an enormous amounts of work. But all-in-all, tenure that certainly we are in good shape for routing in good shape, the technology is in good shape. The only thing that's still see it's still raining. And that's something we'll continue to manage but on the plus side, the experience we're getting here sets us up very well for what seasons in the future. So just building on that tenure [Indiscernible] is performing at record levels or required levels even during a [Indiscernible] October. In Burlington, we're about to enter into summer in Western Australia. And you don't see a cloud in the sky from about November through to March, April, so the system is tuned and well set up to have a very similar run over the next 6 months and beyond.
And we're getting better grades on top of that, right?
Sitting right on top of the hog rides in the [Indiscernible] component.
And maybe just in Australia. Rob on Panama expansion like you mentioned, that there has been deferral of $150 million in capital and it has not impacted the timeline. Can you just share with us more details on what exactly is being deferred? And should I take that $150 and add it to the 2020 capital, which I think Tom mentioned was going to be similar -- like no change to Capex for 2022, so maybe just some clarity there.
In terms of the cash-pay spending is going to spread over '22 and '23. It's not all going to cover '22. And in terms of the key work, it really is around completing the reasoning and starting to [Indiscernible] the shafts. So in terms of the schedule that work is still very much on track. That capsule will be spread over the next couple of years rather than just next year. And tended to this broader question, development capital of Spain will be similar levels to what we currently guarding to '22 and '23. And what do you what you'll see into '24 is a little bit of that, a little bit more capital in 24 as a consequence of the 3 key projects sitting on top of each other [Indiscernible] So similar Spain levels a little bit more in 24.
Okay. Great, that's helpful. and then, Tom, I'll have you on -- just two questions for you. You've mentioned supply chain disruptions. I'd like to get better clarity on what you're seeing, and that's the first question. The second question is, as we are seeing these inflationary pressures come through the cost structures, are we looking at you adjusting gold prices for your reserves and resources next year? And also, given the higher gold price, can we see you have a higher gold price for guidance for costs for next year?
Thanks Tanya. We will continue to try and do a long-term mine planning reserve and resources at 1200. That is my time to discipline, strategic mine planning, and ensuring that we're then making very conscious decisions, if we want to try and cut off grades to bring [Indiscernible] so we'll start seeing. So we -- strategic mine planning and acquisition of reserves or resource has not changed to the 1200. And yes, we will provide you cost guidance next year at the $1800 gold price assumption. And as I commented in my in the script. All in sustaining costs next year, assuming gold is at $1,800, is going to be pretty much the same number that you're seeing for this year. As we start to pull together our plan the sooner, a few moving parts on Nevada Gold Mines due to come in. But it's -- everything is directionally pulling to similar levels to this year at an $1,800 gold price.
Drivers become more cost than production drivers as it had been for this year. And gold production is sitting up around 5% more than this year. So if you want to put a pin on that number, it's probably going to be around 6.2 million ounces until next year. We will continue to provide a view of all standing costs at a $1,200 gold revenue products. So we'll continue to provide that as a reference point in our guidance that we will give you the $1,800 or should $19,00 flat for the fall of views with regard to and show you that cost profile. During a market you've just to talk to the 10 year fiscal the question around supply chain disruption and what we're saying that sort of.
Tom thanks. Can you -- the main place that we're seeing the supply chain disruption is really on the logistics, the Frackville shipping. And what's driving that is availability on inland shipping and freight is just the availability of truck drivers. We're seeing that the manufacturers, the factories is kind of work their way through COVID. They're getting back up to production. But the consensus -- market consensus is we're still going to see that this persistent pressure through the end of the year, and largely driven by the availability of people to move the products around.
Okay. Thank you for that. Thanks so much. I just wanted to make sure those cost were at 1800 and not at 1200 and then, I have to adjust backward. So thanks for the clarity.
Thanks, Tanya. And [Indiscernible] for the people on the call, we'll keep going and take everyone's questions if you've got the time available, we'll stay on the call as long as need be to answer questions so, Operator, we're ready for the next one.
Your next question comes from Anita Soni of CIBC World Markets. Please go ahead.
Sorry. So a couple of questions still remain. I'm going to build back your -- if you said that the cash costs around 790 and your prior guidance was 650 to 750, right? And now you're saying, 6.2 as the production numbers that you're kind of at the low end of your original guidance range on production. So I just want to build back that 5% escalation and how much additionally, on the price change. And then just seeing it back up to that 6 and 790. So could you tell me how much fees the royalties would impact the difference in the gold price first?
So, Anita, I just want to make sure I understood your question. So you're talking about 2022?
Yes. I'm talking about 2022 and I'm just saying like, I'm basically looking at the fact that you're talking about 5% escalation. I mean that keep coming on the cost side. But the midpoint of the old range would have said that's about $35 an ounce. So I guess we're not at the midpoint because we're not on midpoint on production. So I'd be at the higher end on that and then just trying to build back the difference to try to get to the 790, if there's some missing component that I don't have in getting to 790?
So you've got production impact, you've got inflation impact of about 5% and then you got your taxes, production taxes and royalties. The combination of those three will bridge the gap between our $1,200 to our $1,800 number in 2022.
Is the royalty impact about $15 to $20 per ounce? Is that
No, more, at least 30.
Okay. $30 per ounce. And then the $115 million ton of my deferral, you maintain the 2 to 2.2 million for 2022, I'm just -- I would've expected that to go up if you're deferring autonomy of my deferral -- I'm sorry, deferring [Indiscernible] Capex or is it just a matter that the [Indiscernible] being pushed out consistently so that the 2022?trend really just economize in questions plane? 2023 and perhaps some into 2024. Is that the way it works or is there some offset?
No, it's essentially that way moving to Panama from '21 in to '22 and what was in '22 moving to '23. And then if you look at our overall development capital number, there's some Ahafo North numbers that we'd shared in '21, but moved in to '22 and then pushes out into '23 and '24. And then Yanacocha Sulphides has a similar cells where, it's a combination of the three with that spin moving around that ends up with some more issues when we go to see some more development capital in '24. It's similar rights for the Newmont portfolio in '22 and '23.
And the new guide in December, it will continue to not include the Yanacocha Sulphides spend, because it hasn't really gotten full funds decision? Is that --
No. We will include -- so the Yanacocha Sulphides spend is included in our current guidance. Yanacocha Sulphides spend with a delay in full funds approval to the second half of the year will be in our updated guidance in early December. The nature of the timing of that project is that when you look at a five-year view of their production, you already understand is a very small number of the gold and copper coming into our production profile. We really get the benefit of that gold and copper at good process in '27, '28 and beyond. So we're going to see the spend, but we're not going to see the benefit in the five-year guidance.
Just to reiterate the intense capital spend that you have in the next 2 years includes your Yanacocha Sulphides spend the $2 billion for the next year?
Yes, it does. Okay.
Alright. Thank you. Sorry. And actually probably the profitable and what I'm more to the point that the fall of 2024, that also includes Yanacocha sulphides spend?
That's right. So what you are seeing in our development capital spend out of 5 year current guidance includes the big ticket items of Panama to Ahafo North and Yanacocha Sulphides.
Okay. Thank you.
The next question comes from Brian McArthur of Raymond James. Please go ahead.
Good morning. I think you just answered my question there, but one other thing I just wanted to follow up on it's congress. So, I have 3 questions. What triggered this to do this now where there's anything to do with changing government or anything? Second, sold book value of 570 for 68 and you talked about equipment analysis, So I assume 68 as equipment nasty if there's something else. But any clarity on this, I'm just trying to fear what's in there and then 3, there's still 900 million on the boxes. Is there stuff there that you can use in Yanacocha sulphides, other equipment or stuff? I'm just trying to figure out exactly what that transaction is.
Thanks, Brian. And I'll take you first and [Indiscernible] to talk to the book value. So the $900 million that's there is the deposit -- it's the reserves and value of that. And then we constructed quite significant dam. So that infrastructure is still there and valued. And of course we had them on it once upon a time, so we know that nobody? We're going to do them on. They once were Thomson other ore body variant. Savory? need for care maintenance because the middle and all it's bits and pieces in good condition. It's a very large mill. In fact, at the time it was the largest mill in the world. And so it's quite unique in terms of who would buy that piece of equipment and use it.
So when we had an approach from somebody to buy that equipment because they had a place to sell it, then, you take the opportunity to sell that mill. So the timing really time from someone coming to knocking at door to say, we're interested in taking that mill off your hands. We side to care and maintenance costs studying in any future. The development of [Indiscernible], which is still some tom off the flush, it will be very different, but wouldn't involve flush shape with a very large middle. So that trigger wars. an approach for somebody who has is prepared to take quite a unique piece of equipment and for us to get some money, Nancy do you want to talk to the book values question.
Yes, the carrying value really just represents what was on the book minus depreciation over the period of time that we held it. And for the loss just triggered by the actual sale but truly nothing more than that. It's been there for quite some time.
Great. Thank you very much.
Thanks, Brian.
The next question comes from Danielle Chigumira of Bernstein. Please go ahead.
Good morning and thanks for taking my question. Another follow-up from the [Indiscernible] expansion. I just wanted to get some clarity on the fact that, we have delayed $150 million of Capex, but kept the overall Capex budgets at flat versus the previous quadrant. And what gives you confidence that the overall budget wont inflate, given the tightness that we're seeing in the major markets and selling? That's the first question.
Thanks, Daniel. And I'll kick-off and pass across to Rob. The nature of where we're at with the Telmar expansion project having largely activity the same-center shaft now, you really in a very cereal prices with dedicated contracted to the end along that shop consultants as just serious prices that takes quite a number of months to concrete [Indiscernible] the wall of the shaft and put the various supporting infrastructure around it. So were very clear given the amount of progress we've made on the pathway in front of us.
And we've got the base contract during the business mobilized to saw to do that work, and because you've got that clarity in terms of your contracted clarity in terms of the amount of work we have done in the shade and in front of us, we have confidence around now. But that should [Indiscernible] but Rob, do you want to put a bit cover on that?
I am just building a little bit more on that, Daniel, is it in to -- you will see in the presentation the picture a head frame and that's come along well, the refrigeration has progressed well, we finished the crusher chamber on the ground, power station extensions continues, the bolt [Indiscernible] have been done, so as Tom said, we haven't got anything to stop and really it is making sure that we can -- we maintain and keep hold of the expertise that we need to do the reaming and to do that shaft lining. So that's -- those are the key things.
And Daniel the risks thing with that nature work in front of you is being able to get people to the mine site to do the work. And as vaccination rights in Australia are now up in the mid-70% and very much on a trajectory to clearly the NII to be 90+% across the whole of the country. The -- some of the challenges of being able to move people around the country through to start boarders will drop away in the first quarter. And we'll have a clear run through to the [Indiscernible] had for basically the arms and make some select to do the work.
Thank you. That's very useful. And on a completely different track. For Penasquito, have you seen any impact of the new labor law introduced in September in terms of limitating subcontractors, does that impact you at all?
None whatsoever, Daniel and we fully comply with size, as like a requirements, but now we have some effect Penasquito is running supposedly is really hitting it strengths.
Thank you. That's useful.
Thanks, Daniel.
The next question comes from Adam Josephson of KeyBanc. Please go ahead.
Good morning, everyone. Thanks very much for taking my questions. Appreciate you're doing so. Tom, on your production comments for next year, given what you've experienced this year, what gives you confidence in that 5% growth forecast for next year, and along somewhat similar aligns, how do you feel about the 2023 outlook that you gave last December in light of what you've seen thus far this year?
Thanks, Adam. Very confident in the number that we're looking at for next year. And I look at that number and we have a number of world-class assets that my [Indiscernible] that production numbers so in Australia, Boddington and [Indiscernible] are important contributors. The [Indiscernible] areas is just about through the worst of all the constraints they've had around COVID restrictions. Hot wider market so it's more cost issue [Indiscernible], it's just [Indiscernible] Boddington, which is the largest area for labor at Boddington. If you didn't have a total mason trucks, we've just mitigated that area with that fleet, so that production number underpinned by those two big exits in Australia, very confident.
A HAFFA staff in Ghana, underground mining that had coming on stream as we speak. It set up for very [Indiscernible], very, very much rolling at the vaccines now in Ghana. As I mentioned in my comments, a 100 thousand vaccines that we're looking to distribute. Not only to our workforce, but their families and the communities in which we live and work. Penasquito, I just mentioned into Danielle 's
question, it is really hitting a streps running well, that is the engine room of Newmont. And then divide the gold lines. Column, Quarters and [Indiscernible] is rich, fully expect that those 3 big world-class assets along with Pivotal VAO. We'll continue to deliver on the commitments. We'll color on pit in IHO. We had a few of our [Indiscernible] down there last couple of weeks. Their vaccination rights are essentially a 100%. So the ability for that operation, the Dominican Republic to continue to run well, so [Indiscernible] will live up on. It's production at multipiece does assets that I mentioned deliver on there can be considered. I'm confident that's been as assets will return to 2023 -- Sorry, return to 2023, you will have an impact. COVID is going to be with us for awhile.
So you will have an impact where we've had a couple of years, we haven't been able to do the development rights that you would have obviously locked too as you manage your health and safety and all the other controls. So that will have a flow on throughput, throw an impact through 2022 and 2023, as well as some of the delays on our development capital spending when you can get some of the outs and lines through from those project. So I think you'll see a COVID related impact on '22 and '23. So it's fairly flat. And then you'll get some benefits coming more than '24 and '25. So a little bit of delay as a result of both COVID. As COVID impacts those operating in which doing to develop in mines, as well as shed the development in key growth capital spend.
I appreciate that and only inflation topic and you said, I think on the last call that you expected that the inflation of the 5 - 5% to run through at least the end of next year. I'm just wondering, based on your experience in previous cycles, how long have these inflation cycles typically lasted? And what do you expect? what point consequently would you expect it's inflation is start to abate is it just a situation of high prices of a cure for high prices. And eventually these high prices are going to show costs, some economic growth, or how are you thinking along those lines?
Thanks, Adam, I think the world is uncharted territory in terms of these inflation. So, obviously I don't believe it's structural. I believe it will be cyclical but I think it will be a longer cycle than normal and COVID is going to dictate that cycle so, certainly seeing all the indicators so we are going to have elevated processing and that's going to be with us through 2022 and outside too early to predict? pretty to say whether that softwood income's down again in 23 or will state they will look at a lot with? a lot of attention into our 2022 cost guidance to include inflation. And then typically we don't tend to try and predict that far out into the future with our costs numbers. So we would talk to our 23 and beyond numbers, and not fully having accommodated inflation, we'll just do it mid-next year. It's very hard to predict that.
Really appreciate that, Tom. Thank you.
Thanks, Adam.
This concludes our question-and-answer session. I would like to turn the conference back over to Tom Palmer for closing remarks.
Thank you, Operator. And thank you, everyone, for joining us. And please, as the world is starting to open up, please take care of your health and safety and the safety of your loved ones, particularly as we enter into the winter months in the northern hemisphere. But thank you for your time everyone.
The conference has now concluded. Thank you for attending today's presentation, and you may now disconnect.