Q3 2019 Earnings Call
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Welcome to the Barrick 2019 third quarter results conference call. During the presentation. All participants are in listen only mode. Following the presentation, we will conduct a question and answer session.
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As a reminder, this conference call is being recorded and a replay will be available on barracks website. Later today November six 2019, you will now be connected to the conference room, where the presentation will begin momentarily you make your silence until it begins.
Good morning, ladies and gentlemen.
To everyone, particularly dolled any out today and and of course, a very good afternoon to all of you have made they happen to come out yeah, I did a explain when we announce the.
Potential marriage between Randgold in Baghdad, we had come back to London.
And.
Present, you progress and.
There will be pleased to know that yesterday, we had the formal Barrick board meeting in London as well. So we did we did a.
Keep guy would.
And.
So.
It's not just Oh, the 10 months.
Since the merger between.
Rick and Randgold resources went live.
That stay today about the new Barrick wants to create the world's most valued mining company.
And then the prices to set an example of a modern mining business for an industry in need of Invigoration end, there's not been a time to talk about this because really everyone does locks modeling, but it's an absolute gold component of everyday life and we as my does have a big challenge to go.
But accepted by the communities and ER and the investment the investors as well and we had direct call absolutely committed to make sure that we change the way, we do business on a day to day basis.
It's very pleasing today as we report on our results for the.
This quarter or the third quarter since the merger.
She shared with you the progress that we've we've made and.
And where are we going to achieve exactly that goal.
Before we go any further.
Please take note of the caution you know test which is also.
Oh, we have sought for those slurry does or some anybody who wants to sort of delve deeper into the statement.
This is out of school cod that we shared with the world backing on the 23rd of September 2018, when we announced the merger.
As you can see when you compare what we said we would do.
With what we have done.
Every box has been ticked.
Most significantly we reengineered barrick's corporate structure.
And strengthened every team.
For the Nevada joint venture in line without focus on tier one and strategic assets.
Reevaluated and optimized <unk> all bodies, but.
Getting back to the geological basics.
An improved operational performance.
Two generates strong cash flows.
For funding further investment growth and returns to shareholders.
Health and safety about workers.
As a key concern and like we do.
And its management is delivering positive results.
Lost time injuries have decreased for the third quarter in Iraq.
The slot increase in total engines injury frequency rate that you see on the slot.
He is a key leading indicator which results from increased focus.
On recording every single safety incident.
No matter, how small the to us.
The ultimate aim of course.
Just to achieve a zero injury work environment.
Like safety.
Good for the environment and the community is a core component.
Barrick's business philosophy, and certainly for us not just another governance exercise.
I've often spoken about the need for mining companies.
And a social license to operate.
And this is becoming more pricing for us as mine is as I indicated in my introduction.
The recent worldwide extinction rebellion protest or a third the demonstration.
That's society at large is demanding fundamental changes from a industry.
Hello, everyone once our products.
Mining is particularly I loved.
And if we ought to survive in the longer term as I pointed out we will have to align our practices with these expectations and that is intention.
At Barrick.
These are the highlights about third quarter.
And as you can see they showed that Barrick has become a very different company.
Operational performance has improved.
Across the board earnings having sick exist have significantly exceeded the consensus data has been further reduced such that we know about USD one of the strongest balance sheets and the industry.
And the Devon doesn't has been increased by 25%.
We're well on track to.
In the at the high end of our production.
No I end up about cost guidance ranges for 29 team.
When you get it right.
The results on measurable in the numbers.
Driven by positive contribution from Nevada Gold mines.
And with all our assets positioned to take advantage of the higher gold price adjusted earnings per share increased by 67% quarter on quota.
And 88% you're on yeah.
I should point out that's in line with the appropriate to constant continent accounting treatment for the recent formation of the Nevada joint venture.
There's been some fair value adjustments that have impacted the net earnings.
As well as a notable locked up.
At Lumwana way, well improve quanta availability and significant cost reductions contributed to a 947 million dollar increase in its value.
The operating results reflect the progress we've made in driving a proof improvements across the portfolio with the gold mines in line with well ahead of their production guidance ranges and copper production increased by 15%.
From the second quarter, mainly due to record throughput and higher grades at Lumwana driven by the same fundamental and sustainable improvements that have enabled us to rob topics value.
Turning now to this specific operations and starting in Nevada with Cortez.
I must first start by paying tribute to the Nevada joint venture leadership, we have done an outstanding job integrating large and complex operations into a single business in a very short time.
Looking at these operations Cortez achieved the top end of its target.
And when you look at these results the apparent dropping production is due to the fact that the Nevada joint venture reduced barrick's interest in Cortez to 61.5% <unk> from 100%.
Yes, well contained to spot the depletion of the Cortez Hills open pit as we guided at the beginning of the.
And the translates into a higher proportion of the double refractory underground all.
The deep South project has completed its permitting process has now received its record of decision and is scheduled to start contributing to production next year.
Production that call in the form a newmont Gulf Coast mine, which now also includes Barrick gold stock was in line with target.
The combination of a lot cutoff grade step outs and the initial optimization of the underground mining operations is expected to add significant additional ounces to reserves at this complex.
There is lots more to build on at Carlin with brownfields potential around both mines, including the greater Leeville underground extensions and the prospect of a significant inventory increase and then Underexplored Little Baldor basin prospect.
Turquoise Ridge now combined.
Twin creeks.
As an integrated mining and price as an integrated mining and processing.
Operation is a standout example of the benefits of the Nevada joint venture.
Production was up 26% from the second quota.
The cost impact of lower grade open pit ore from twin creeks was partially offset by more tonnes processed from turquoise ridge underground and increased throughput rates at the plot.
The thinking hoist for the third shop project is on track for commissioning in the fourth quarter solve this year.
The shopped will significantly improve the ventilation and that is the big hole hold up in a expanding the under a underground.
Production at the moment deficiencies and synergies brought about from the combination of the two operations has already allowed the reduction in the cutoff grade as again, we full cost.
This is expected to increase the reserve significantly in fact more by more than 1 million ounces.
Phoenix and a long canyon make up the full picture of the mines in the Nevada Gol bond portfolio.
Albeit they are smaller contributors to the joint venture at Phoenix, the timing of copper sales impacted costs, while that long Canyon. The mine had a strong performance with costs noticeably lower than our guidance and our review is underway to extend the life of mine with the phase two.
Expansion.
At the time of announcing.
The Nevada gold mines joint venture, we indicated to the market, rather controversially I might add.
That the Nevada joint venture would deliver synergies to the value of $450 million to $500 million per year over the first five years of the full production of the project.
And I'm pleased to say, we're well on track to achieve that.
These are the key projects in the synergy population and so far we have flipped the coupons.
For a total value of $311 million.
And we expect to get to our guidance by the beginning of next year.
They are still more opportunities in addition to the synergies that we identified.
In the longer term and some of these would include a particularly the the boundaries that was sterilized between the two companies and then the big focus for US is about 10 million ounces up significantly grade or.
Along the boundary between.
Calling and goldstrike and in particular, the portions of the mines, we referred to as deep post Tara and the Nols at North Star front Tia boundary for those you know Nevada at all.
[laughter].
Some of the key projects we are working on.
At Nevada Gold mines include the Turquoise Ridge said shop that I've already referred to the Cortez deep South project again, we've just received a record of decision Robinson Ren Recheck, K, which is an underground block in ER in calling the Leeville underground extension.
Ones, which we're very excited about and they exploration potential across the portfolio, which includes as I referred to earlier or the little Baldor basin, where we've got to boreholes legacy balls that all significant in their intersections the Baltic all lines also has a.
Future growth opportunity at the gold rush or complex, where twin exploration declines are being developed to improve access to the ore body and enable further drilling for resource conversion.
Notably we successfully submitted a plan of operations during the quarter to commence permitting for that project and we expect approval for that project in two years Todd.
This follows the successful receipt as I pointed out of the record of decision for the deep South project in September of this year.
Four mile and gold Rush are now being treated as a single project. Although the full model has not yet being included in the Nevada Gold mines joint venture.
Drilling in the south southern part of full mile has recently returned the best yet intercepts in fact in and literally three quarters, we've had based yet intercepts in the full mild project.
And the and the boundary between gold rush in form of is reduced to just 100 meters and you'll see the into say up there that if im 1940, 60, as a significant incept rehman and solve the original goal struck into sepsis.
Views sort of.
More bleached hey.
People remember that make the [laughter].
And also a about a kilometer to the north of the form our resource we announced a at Denver, and new discovery borehole and and that is very significant you'll see it on the and sit down and the bottom left of the screen.
And and we expect that we will continue to add to the resources and a and we are guiding to a significant increase in resources when we come out with our.
And your reserve and resource statements next year.
Moving north to Canada, and two hemlo.
Which as you would've seen from the recent press releases is being re engineered and refocused as a modern underground operation locked Barrick's African lives.
At the time of the Barrick Randgold merger there was some debate about him lies viability, but the anticipated performance improvements are now expected to secure its future.
In Latin America, Pueblo, Viejo, Hello, which locks the Nevada gold mines is a joint venture between Barrick and human Gokul.
It had a very good quarter with production trending to the top end of its guidance and costs down.
The product expansion project at Pueblo Vaca is one of barrick's, most exciting growth prospects. The project is designed to improve throughput significantly, allowing the mine to maintain annual gold production of some eight hundreds.
<unk> ounces well beyond the next decade.
The Prefeasibility study of the plant expansion project is scheduled for completion by the end of this year and the combined feasibility study for the plant expansion and the new T.C.T.S. SAP.
Scott is a full cost for next year.
Probably a vasco is enormous resource base isn't a class of its own.
And just able just being able to demonstrate.
The viability of the expansion project [laughter] and secure the permitting for the new T.S. Their facility. We estimate will add an additional 11 million ounces of resources to its monopole reserves with dole more likely to come from the.
Ongoing drilling programs at that project.
The Dominican Republic is one of Barrick's go to destinations and a dedicated exploration team is also building a portfolio of opportunities they outside the joint venture.
Further south and then or at a in Argentina Valla Dara was one of our biggest initial challenges on the close job the Oh the transaction and the team there has done a really good job in driving down costs.
Improving efficiencies addressing some mainly environmental legacy issues and rebuilding their relationships with the community the province and the country.
Okay.
In conjunction with our partners edge Shangdong, we're working towards restoring that mine.
True its prior tier one status.
In the meantime.
Connecting valla Dara to the cheaper power available from Pascal across the border in Chile.
We will also reduce operating costs further as well as reduce.
Carbon footprint materially.
Staying in the region, we have identified lots of opportunities in and around valor data, but outside the current mine plan.
Latest results indicate the potential to extend the mines life.
Through the end of next decade.
We're also re looking at the Pascal Lama project as well as that Vaunting advancing their all granda right at the ROE home Grandee.
And the L. tourists targets, along the highly perspective El Indio belt.
We now have dedicated exploration.
Groups in Argentina, Peru, and Chile, all focused on evaluating our current portfolio, which is not.
And substantial as well as us and securing more opportunities along the Andean trend.
Moving now across the Pacific.
And then two Papa New Guinea.
Holger represents both an opportunity.
And a challenge.
In a different operating involved in a very difficult operating environment. The mine increased gold production by 23% quarter on quarter on the backup higher throughput and slightly better grades.
At the same Tom Polgar has been negotiating with the government for a 20 year extension to its recently expired special mining license.
Although our negotiations are directly with the government. There are many interest groups in this process, not least of which other local landowners and provincial government.
So we you can imagine.
The environment is quite dynamic.
And it's probably going to increase.
Until we get final resolution on the terms of the renewal.
VERYX, a new geological focus.
At Panera has identified a multimillion odds potential based on extensions to the known ore bodies and associated structures.
This has the potential to extend polgar his life of mine significantly.
Across the Africa then.
Where the Loulo Gounkoto complex delivered its usual solid performance.
With gold production up 4% on the previous quota.
Lumos currently in the process of commissioning the group's first major solar power.
Plant, which will help to cook cook costs as well as to reduce its carbon footprint.
This is in line with Barrick's policy of switching to low emission energy sources, where ever at cap.
Brownfields exploration at Yalea and gotten caught a continue to replenish the asset base and showing that we all sustain the complex tenure production flat.
Across the border in Senegal, Barrick's Massawa project is currently being permitted.
The Molly Senegal border region for those who are not away already hosts a large number of gold mining operations with a district mineral inventory estimated at a plus 6 million ounces and it remains highly perspective, and we continue to hold a big piece.
In addition in that region and our geologists always on the handful that next we'll Clos discovery.
Having delivered Massawa geologist focus has shifted to the been by GE joint venture.
Three very interesting car Joe's have already been defined there and some significant targets have been shared yield for drilling when the dry season starts.
Barrick's, new emphasis on exploration is expanding its African footprint.
From its original base in West Africa, Randgold moved into the DRC with Kibali.
And following the Acacia buyout Barrick has now expanding its portfolio across the Congolese and Tanzanian Kratons, which we believe holds the potential for more tier one discoveries.
Operationally kibali is trending well and lock Lula.
Has a solid mine plan for producing plus 600000 ounces per per year for at least 10 years.
The lower income for the quarter I would just point out on the side is attributable to the higher depreciation following the message at fair value adjustments is not really particularly for the actual performance this last quarter.
As that Lula brownfields exploration continues to deliver good results identifying multiple open pits opportunities along in the case dead zone as well as extending the underground reserve base.
We're also working on a project to evaluate the potential for more underground ore bodies similar to the current Casey the underground ore bodies that made kabaddi. The giants. It is a two day.
[laughter].
Engineers like Victoria Gold District has long been an outside.
And the roll up of Acacia has opened up the country for us.
You are familiar with the Acacia story and I don't want to dwell on it again.
But it would be remiss of me not to say that the way the business and operations were previously managed left a lot to be desired.
After green with a government on a settlement of its disputes with a company. Our focus now is on fixing the operations and managing out the legacy liabilities.
I believe the agreement we reached with the Tanzanian government is a ground bake breaking model for partnerships between mining companies and their hosts in Africa.
At a time when the industry.
This is facing a rising tide of resource nationalization.
It provides for the 50 50 sharing of the economic benefits created by our operations in Tanzania.
Which will be managed by a complete jointly owned by the government and a fully transparent mehta.
Known as tweak a.
The Swahili name for Tanzania's National animal that you're off this company recently had its inaugural meeting which was attended by all parties.
We expect the transaction to formally close during this current quarter.
Operationally, Tanzania struggled during the quarter.
With the suspension of mining operations at North Mara for most of the quota and the results reflect this disruption.
As you know operations are assumed to near the end of quarter, three and we expect a more normal quarter during a full quota for.
This is a quick look at the rest of our gold mines, which did not did all did reasonably well with the exception of Kalgoorlie.
As previously highlighted the sales process for Kalgoorlie has been initiated in line without policy of disposing of non core assets, which we expect to advance in quarter four.
We continue to expect to realize.
In excess of one and a half a billion dollars in value from a asset disposals by the end of next year.
As I noted earlier.
The more on a was the stand out to achieve a and out copper portfolio, achieving record throughput and increasing production by 33% quarter on quota.
Sales were impacted that them wanting to buy the refurbishment of one of the smell smelters that process is the mines concentrate and we expect this situation to be resolved by the end of this year.
[laughter].
With the integration of geology and grade control in job mine planning and our first batch.
Had optimized life of mine plans.
As promised.
Towers, a five year outlook for the group.
We have transferred responsibility for all body or reserve and resource Matt modeling as well as mine planning back to the operations as we said we would at the time of the merger.
We are also working on attain you I plan to service the group's foundation for capital allocation budgeting and forecasting.
This will be supported by the rollout of new information management systems designed to drive real time decision, making through the availability of real time data.
We expect to share the tenure production plan.
With the market in our 2019 annual report next year.
As you can see how the group five year plan is very consistent without previous five year guidance of 5.1 to 5.6 million ounces, showing a steady and slightly increasing production profile with costs declining.
Over the period.
Okay.
Looking at the underlying regions in more detail the North American region now includes our interests and the newly formed in Nevada Gold mine joint venture, which has had a significant impact on the group's profile higher cost assets contributed from newmont combined with a significant synergy.
She is we have identified.
And its effect on lowering cutoff grades have all impacted the blended cost profile of the business.
As I mentioned earlier this is our very first efforts at putting this complex business together.
So I have no doubt the team will further refine this profile as we go forward.
The last time and Asia Pacific profile includes I'll first estimates for the expansion of crab Lavaca in Dominican Republic.
Which has had a significant impact on capital and all in sustaining costs, albeit the real benefits from this project will materialize beyond the five year window.
We also making further investments and our Veladero mine to access perspective ground as we strive to return this it asset backed to tier one status.
And in Africa, and the Middle East region. The profile remains relatively consistent with previous guidance given with the exception of course of Tanzania, where we have included outbid model as the base case, you remember the argument we had with a case and we.
Presented out.
That model in particular this includes as of today about $200 million of capital for bully and 2020 , which in all reality is likely to be smoothed over this next year and the your thereafter and there's still dependent.
On the feasibility work we are undertaking as we aim at the restart of underground operations by quarter for 2020.
The copper profile shows the improvement that the improvements that ongoing if.
Yeah.
And the improvement as well in efficiencies and cost reduction as initiatives at Lumwana specifically.
And really this has kept our production profile relatively steady and certainly a viable business even at these low copper prices that were experiencing at the moment.
[laughter] I started.
Without score card.
For the nine months to September .
And pointed out that we had ticked all the boxes.
And so how is out to do list going forward.
And I have no doubt that our team will be able to deliver on these and again a this time next year I'll be taking those boxes as well and I'm sure. We'll find a few more to add a as we go through.
This in your end into next year.
Hi end this presentation as usual with a look at how barrick stacks up in the market against the gold equities and the gold price.
As you can see from the chart, we have been care outperformers versus both the GDX and the gold price since the announcement of the value creating merger with Randgold.
While much has been achieved.
There's no doubt in my mind that much remains to be done.
I hope today's presentation, ladies and gentlemen has given you an insight into the many internal and external opportunities.
For sustainable profit and profitable growth that all within our reach at Barrick.
Thank you for your attention and we'll be happy to take questions. We've actually got quite a big contingent of direct people had the audience. A show we can take pretty much deal with any questions you could come up with we get a start with the.
The call people first and then we'll come into back to two you people here in London.
We will now begin the question and answer session along the phone to join the question Q You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request.
If you are using his speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press Star then to.
Our first question comes from Chris Terry of Deutsche Bank.
Hi, Mark and team and thanks for taking my questions I have a few I'm just wanted to start with a five year guidance as you could make some comments on the conservatism or what you've actually baked into it for example, the Nevada synergies that you still still go.
Through and made great progress on just wanted whether youre, putting the full number in for that for example, I'm just other areas of improvement and whether you've Justin just at this point put in projects at a fully approved I'm just getting an idea given you've been towards the top end in 2019 as that gardens if its.
Essentially conservative for or or mid case. Thanks.
So as you know I've never one who sort of.
And the provinces under promises to over a de lever. So this is our best business case based on what we believe we can deliver.
Our opportunities yeah. Some of them that I'll point you for instance, how we can bring PV I expansion on and whether we can improve efficiencies, but as we stand. This is our first bacheta at a scoping study we've got the Prefeas running now with the processing plant we have.
Quite finalized the detail in the and the Flowsheet side. There is I would say, there's some option upside opportunity. There of course, there's ongoing drilling well between the two current pets and that has some opportunity, but as far as our current reserves at our current ore body Mark.
Those are we that we've included all that HM Valla Dara has some opportunities that we don't we're not till we not don't have sort of visibility on yet because there's still quite a bit of drilling to be done to be able to lift the the life of mine we know.
So that it looks very prospective but again that'll come out in that 10 year plan rather than the current five year plan.
Nevada, we have baked in those synergies that we can see and that we've identified we've got no doubt that there will be proven those improvements are largely expected to come from the continued optimization of our.
<unk> ore bodies and also there is.
They we needed we need to do some work on the call and processing facilities in particular the.
Low six the rise stuff, which at the moment is quite expensive its operating costs a high it's a single bed rose to and we are going to be expanding that because it's an important facility for gold rush and we'll be improving both its.
Ability to scrub mercury out of the oil and also due to take a bigger throughput. So it'll drop the cost goldstrike grossed is what are the most efficient rise does a on this planet when it comes to running at at just over $20, an ounce and Oh $20 there.
Oh, sorry, John corrected me, there and ER and Carlin is running in the upper 30, So we've got some opportunity.
In that process and then a and then it's just what we can find an anda and I'd remind you why do we do this and we there's no other company that does this and we did it in Randgold is that this is it's always fascinated me that the mining industry.
Allocates capital on the long term tells you about their development and the life of bonds and that ever give you the detail and when you have a detailed plan you can see the the road hot and the speed bumps you cannot any body opportunities and we've always shared that with our without stakeholders.
Transfer that met at hold us accountable to deliver against that and if you go back and a the 23 years of Randgold, we delivered long term the lateral roles evened out to our first big dividend. We said we had to do it on this at the end of that that particular yard we did and so it's a yeah. It's an important.
Part of being a modern company is to tell people, where you guy and a and said so can we improve on that I'm confident we will.
Exactly what it is that we got to improve on that's a spread of opportunities that will disclose as and when we'd like them.
So thanks, Thanks, Mark for the color just just in terms of the balance sheet, you're obviously now below three and a half billion net debt I'm. Just wondering if you comment a little bit on potential use of proceeds from the one and a half billion of asset sales you flagged, you've obviously increase the dividend a little bit on this quarter.
This is lost quota. So just just wondering where are you thinking about the use of use of proceeds. Thanks.
So.
If your definition of a little bit is 25% I wonder, what you're saying because a lot.
So we've got a you know many opportunities to create value for our stakeholders. We said we are doing this because we what we saw the value and being the stand out.
Gold company with the dominant <unk> ownership of tier one assets and as you've seen almost surprisingly, it's now three quarters into project and we've been able to.
Juan down the debt increase the cash positions, a we rolled over Oh revolver facility and dropped to two $3 billion because we're comfortable about where we are we came out with an early dividend because again as.
As you point out and the when you look at our five year plan, what's clear is there some investment we need to making.
2022 to sort of tidy up the organization, but then if you look at the five year plan that the the costs are coming down capital is coming down and we've got a real focus on sustaining capital and of course when cost come down and capital come comes down cash flows GAAP.
So that's the whole objective of doing business, what we do with those proceeds we've again.
Yeah, something that is I really believe and as that.
ER in mining you should deliver it tends to your shareholders and in particular, the best way as as dividends.
They are other mechanisms that we can consider and we'll consider lock buying back shares as we change our asset portfolio show sort of color, but at the same time I believe that we got to replace.
Some of the assets that we got to sell with better looking assets not that the ones reselling all bad.
Hey, just done set a specific investment voltus.
And and we have not very much a very much depleted debt a short term debt.
Pat So we got a little but more to do but not much and the remaining debt and the organization as long dated data, it's very expensive to two to settle a we will look at ways to do that on an opportunistic basis, but you know that means our cash will build up and and.
We we vote bearing randgold moved to a position where wed it's sought to have a available cash of a certain amount and then it would pay the rest out. So you know that's a that's something we look forward to be able to debate with our board going forward right now we are cleaning up.
The balance sheet and and we've done it consecutively every quarter, we expect to continue.
To to attend to that and dividends. We said is gonna be our drive of this business. It again, where were mindful were not one for anodes special dividends or fancy ways to return a.
Cash to shareholders will do it in a structured way.
We've debated share buybacks many times in my career with my respective board colleagues. They will I'm sure that the vital continue to be had a going forward the positive.
Message as we gonna have all those debates because we generate cash and that a good debates to have.
Thanks, Thanks, not just the last one from me, what's the timing you thinking for the potential inclusion of four mall into the JV. Thanks, that's it.
Yeah, that's that's a in a.
We were we want S bank that property Eros now with that new discovery whole layout, a kilometer from any of our resource estimates it really does open that opportunity substantially and and we've got.
Lot of a comfort that gold rush is a you know is at a stage, where it's a matter of process to bank at and then then it's about access to the four mile deposit with a we'd do it by our gold rush infrastructure, we bring.
We come in where there's an opportunity to common from an old pets or on the other side of the trend. There's a couple of things that we still want to do and I think first of all that's bull the portfolio, we've only got with Rod it's.
Declarations early next year.
I would say it's a couple of years before we are comfortable that we've got a critical mass to warrant.
You know moving that feasibility east stage project, what I would add and it's something that we've had great debates over his rodders.
As head of.
Projects and evaluation is starting to take a much bigger focus on this.
Project now because it's reasonably well framed.
And and so a lot of process rather than expiration endeavor, and we've encouraged rather and his I mean rub crishman often as team to move away and found the next one.
And not get bogged down by ongoing drilling in this project.
You want to add anything to that.
Oh, Yeah, sorry, I'll, just I'll just repeat that because of my comment on that that based hole that we that we reported this this quarter.
And.
Yeah some of the.
Some of the based day, obviously, the best result, there. So you know these these opportunity.
On the west inside as well and within four model as well.
The westernmost age of that have that current form all resources very much open so there's quite a bunch of drilling to be done.
This this coming next 12 months to actually.
Side, how big that format the current resources.
So I just do for those yeah, and I Wonder if you can see my point out, but what a rods talking about is that this trend which is that there's the greater gold rush for mile trained what we seeing is on the on the west inside that's the thought that there tends to be a.
A plan to the ore body.
There and they're in there and so I met and gold rush and so we havent drove that Weston edge of the mineralization and we are expecting to bell they extend their mineralization to the waste. So we've still got quite a bit of work to do.
To close off those those trains.
There are big thing for me is there's more to fund.
Yeah, we've got.
Blobs dial trend, which is sub parallel to the gold rush for mile trained to the west of the of that they're trained as you see on that slide and then we've got an another couple of.
Outline intersections positive intersections to the east and so are they sub parallel trains to this Maine.
Mineralized trend going forward.
Our next question comes from Matthew Murphy of Barclays.
Hi.
Just chewing through some of the five year guidance here and looking at North America, the turquoise ridge production looks fairly steady through 2024.
Despite that third shaft coming on so I guess should we be reading from that that cut off grade theyre going to get dropped further in the 2020 to 2023 timeframe.
Absolutely. So that's I mean, that's one of our big issues is that when we took the Barrick Barrick was absolutely obsessed with high grading, it's all bodies and it was appropriate for that phase and that's laugh because it was dealing with some massive debt coming from $12 billion of debt.
But we said at the time, we would re optimize the ore body and allow the ore bodies to two to manage the life of mine and that's critical because.
When you have tier one assets.
There is to.
Hi.
And there too.
Components of value that you have for your shareholders. One is there, but the margin and the gold price. The other is the cyclical letters of the gold industry and with a tier one asset plus 10 years, you get that cycle and so you don't want to gone over mine Youre all body you want to optimize it fold.
Long term and that's what we've done and we will continue to do I mean, turquoise ridge's got significant upside opportunity in it in the brownfields extensions of the northern reserves remember the reserves are significant at turquoise Ridge and we've still got more we've got the old.
Go get getchell or extensions the open pit opportunities.
The tradeoff of whether we go underground all come back and take a bigger lower grade cut but right now we've brought the.
Cut off grades down from over 12 grams a tonne.
And our target is to get down to about six and a half is the target.
You want to Ed.
Anything on it it took us which is very much work in progress yeah. We've we've we've just obviously the bottom Nick.
Business from a from a administration point of view, Tim My point of view, so so thats out of the way we pushing obviously the plot you would have seen the the initial increases coming through this quarter, but obviously, that's working progress because.
How hard we can push that front.
The various feeds and then.
In unison to that as Marcus saying, how big the ore body and then re optimize the whole.
The ground mine.
And and open pits et cetera to to fill that plant with the base grade weekend with you know with a long term view.
So.
There's a lot of work still to come from from the whole T. RTC conflicts.
Gotcha, Okay, and then just as it relates to that the near term synergy shows you've already done 73 million executed are advancing there do you see upside to that near term synergy number.
Sure of course, we do.
So one of them as well as as Rod says they plan to expansion, Yeah, Weve and again, one would just bear in mind, we've just changed or the whole management structure at turquoise Ridge in fact as for the Barrick Group I think the only two people in senior management and their operations that were there.
When we arrived the rest is on you and we've just change the the leadership on the processing plant at twin creeks.
And and Weve jacked up the throughput so there's a there's a lot more work to do on efficiencies I think John and his team I've got a ready showing that just even an approach that the the standard operating procedures. When it comes to order Clive is how we manage the the fuel in the order caves in the tempered.
And the ability to treat higher energy, if a higher fuel or we've got a lot of work to do.
Right across the the group and but turquoise ridge in particular.
John you want to add something to that you're going to push the button.
Over there.
We'll go rate yeah, Okay got it I think the first phase that twin creeks was really just raising the densities in the feed to the orthoclase to give us an additional 15% to 20%, but we're trialing that it's going well.
It's really a tradeoff slight trade off against recovery, but the key is maximizing the owns production and the cost programs and that's what we're chasing there.
And Matt We've also got a lot of work to do and right now we constrain the through the environment now that's why the that the shaft is so critical because it changes on tire.
Ventilation protocol.
And that will end in the meantime, we're working hard at fully automating the mining in ER and turquoise ridge. It's a it's geotech conditions are challenging so it or you know automate self minus which were but we've got a second one in in the steps now is it.
Important we have already got.
Back full process fully automated and will yeah, that's our focus and and and of course.
Electric we underground vehicles will also help in managing the environment. They got a lot of stuff to do to be able to.
Pick up the efficiencies there, but this is based on what we can do today.
Interesting okay, great. Thank you.
Our next question comes from Tanya Jakusconek Scotiabank.
Thanks, Good afternoon, everybody and thanks for taking my question I have two questions.
First one has to deal with a five year guidance I'm, just a bit more clarity I know you have some thought notes at the end.
Inpatient bad just wanted to ask first and long Canyon faced Hill included in your forecast.
No.
Hi.
And then maybe Mark why has something changed my Salah that you included and into your forecast side I was under the impression it didn't meet your hurdle right.
Maybe some things change there.
No the Salah if it wasn't randgold, we would have developed at.
It is a busy we are we brought up a business plan for it we are applying for the permits and we will we will deal with it as and when we have secured or the permits Ryan wants to say something.
Well, just going to say that 1200 gold, which is that correct. So we use.
Our investment decisions now it does.
Yes.
Okay. They have moved I thought we were still at a thousand dollars that hurdle rate of 20% and move to 1200.
You've clearly haven't read the footnotes.
Okay, well I think I did that.
Maybe just coming back to just kept Sally and I think Mike you mentioned plus 600000 ounces over the next 10 years from add assets I'm, just a little bit more clarity is some of that coming from the El pen pet additional open pit material from their drilling that youve encountering lately.
So we've got a whole lot of new opportunities, we have got the news there, saying a pet we've got the.
And it will change as we go at Comed, Colombia is is a pit that's already in the mine plan, which is open pit. We've got a number of targets. We are evaluating as I stated in the presentation along the Kaizad zone.
There's a prospect of a superpit and the you know joining this is saying he and Casey de pets.
So, but right now what that plan entails is only the reserves, we haven't added resources or soon to be discovered ounces salmon that's correct.
Okay, and then just slow Taliban also.
Just write some is going to.
10 years.
Jim online profile open cost runs for the entirety of the 10 year period. So that Simon says the tenure plan has opened cost material for the entire tenure, okay. I think it was a bit defendants and Todd Yeah, we've got visibility of some significant millions of ounces of pertain.
Joel resources that are have the every reason for us to consider them to be.
Converted to reserves.
Yes at Loulo.
At quarter end at Kibali, and I'd point out that that's where we want to get the full group to that's where we guy that these are legacy randgold assets. They have a rolling 10 year plan and that's where our objective is for the rest of the group.
Okay, and similarly, with Loulo gounkoto that longer on the capital side.
Doug on court or there's two things one is the petters produced more ounces than our original feasibility are they the point I would always make.
On behalf of our team has.
Feasibility studies have all been delivered against and some.
And so the gotten caught up pet is you know it is certainly going to beat its plan as original Superpit plan and then we've got a a new underground section at current quarter. So another phase of investments Foregone Carter and again that 10 year plan does it include.
Good.
Every all the potential that we see in extending the the high grade zone of Veolia, which we referred to in todays results, which again has delivered some significant step out results and so and we've still got Loulo three that we've got a lot of work to do.
And and so we're not short of potential in the in the Loulo Gounkoto District.
Okay, and then maybe just on the copper guidance on the I am happy chloride Leach and for example desire and that plan can you remind me Graeme what the capital is for that.
Yes, so the approximate amount is about $170 million.
Okay.
And we haven't finished that feasibility study Tanya we're busy with it so.
Yeah, Okay, and then maybe just and my second question is actually for both Robert Rod, It's got to do with the reserves and resources that are coming out and I guess it February .
And I think we you had talked about getting reserves that 1200 and resources at 1500.
And I think Mark you talked a lot also on the call about areas, where you see reserves, increasing and resource increasing so I wanted to circle back with Robin Rod on a couple of these assets I think leeville. Thank you said this multi ounce potential there will that be in the resource category.
Yes at year end legal Sanyo will still take some time to get into resource, but there's a lot of inventory potentially that will be coming.
Just looking at it sort of reserves.
Goldstrike underground and the Carlin underground mines in total will more than replenish depletion.
Kibali, we've mentioned is going to it is going to do well.
Loulo Gounkoto is doing pretty well so.
Yes, those are obviously some of the key assets Veladero PV will PV not units. So the feasibility comes there's a lot of potential this sitting.
Outside reserve and resource and just waiting for that feasibility to come but that won't come from this year.
Yes. So so you are there is some some good news obviously from a from a barrick perspective, there will be increases because of acquisitions and obviously the merger with Randgold Sir.
That coming through the JV helps us in Nevada, obviously.
Yes, there's quite a big uptick there in ounces coming through in that JV will that 61%, but it's a lot more.
Turquoise Ridge, Rob I think you're going to be changing the cut off grade there so that multi million ounces, adding to reserves there.
Yeah, we will be obviously, we are we going from 75 down to 61 at turquoise Ridge in particular, but it's the whole complex that you're looking at and yes, obviously dropping the cut off immediately because of that T. Amaze RV increases increases answers. So that's the cut off grade if you look do the math, it's about him to.
North of a million ounces that as Ed and you look at the depletion for that asset even with a 61%. The mass said, yes. It should be better yes, I think ill tell you know one thing I would point out to you is we are we have used 1200.
On a estimating alpha mines, we will be using 1200 and filters 1200 long term goal Prost flat.
And the 15% IR are.
And now it's sort of filters.
On TV, you need to know that.
The conversion Rod refers to is from measured and indicated so those ounces all day and net economic at 1200.
All we need as to prove that we can put the tailings somewhere and they become reserves. So it's important for you to appreciate that there's no extra drilling on the additional 11 million ounces, we referred to in the report there's no extra drilling to bell to convert that into reserves Israeli as just the.
The permitting of the TSS, yeah, but were not expecting that at year end I think Rob said that we will as Rod says its and we've said at its through through next year.
Yes.
Is that the 1200 moving from 1000 Twotwo hundred I mean is really on the affecting the legacy randgold assets and both those ore bodies. So the new Concord ore bodies and the and the Kibali already is very geologically constraints. So it's actually these increases were talking about are coming from the loan volume.
Not well not driven by that 200 dollar increase they real actual body expansions that we bringing and we've actually brought in very little with that adjustment.
Okay. Okay.
Okay, I'll I'll, let someone else asked question. Thanks, a lot guy.
Yep.
Our next question comes from Anita Soni of CBC.
Good morning, guys. My question is a little bit more high level could you given I give me a sort of a breakout in 2020 and 2021, what the difference between the standing in the project capital expenditure is.
Hi, good but I worked.
[laughter] well that won't help me modeling.
On this my next question.
Can you highlight to me then the a major drivers for.
The difference between <expletive> the current sustaining or total capital expenditures. This year at 1.4 to 1.7, I know you're moving up towards like a 1.91 or $2 billion for the next couple of years what are the geared to pinpoint related thing. It's just a next year or 22, any and you can see it on the on the chart. So.
As I say to 200 million.
On.
On Bali, which is quite a sort of variable at the moment. It that's what we used in our bed model. We don't have the ability to share Gillette in any detail that'll come with the feasibility study.
We've got the additional capital NPV again, that's a long term capital commitment and there's some extra capital in a loulo gounkoto on development and the rest is pretty much as per the shared job is a bit more capital invalid, there as well.
All right HM.
So you should take how much do you say the capital was I'm looking at this chart and I'm like maybe my ruler is incorrect or I need better glasses, but the delved deep Blue line that you have here basically shows it sort of pretty flat from 2020 to 2021 for the total capital number at $2 billion.
Yes.
As Mark says a lot of that is to do with the investment that's going in.
For the development of Veladero for the development of PV, some extra capital as you like to ensure that we got a 10 year plan. So a lot of this capital is really.
As Mark mentioned in his speech.
Give us benefits in the tenure plan and not so much in the five year plan, but of course, we yeah, we working towards the long term business yet.
And I think a.
The need to just too.
Softened.
Graham's under diplomatic responds to the split and sustaining capital is that it's an absolute obsession of mine.
To bring the sustaining capital they are and then we've got a lot of focus and in that part of our business and once we get some.
Granularity on that will start sharing it with you.
Thank you very much.
Our next question comes from Greg Burns of TD Securities.
Thank you.
Mark.
Given the free cash flow this company should generation.
No we debate about the dividends in the past, but do you see a model where Eric could commit to doing something like a major diversifies too, which is paying out 30% to 50% of.
Net profits on an ongoing basis is a dividend.
You know Greg.
Well I can say as I refer you back to Iran. Gold business, you know we might we paid 13 years of increasing dividends on the back of a long term plan the spot what the gold price did you know it went up and down not necessarily a that order through that period.
So you know on more of the view that there's a there's in any business, there's a sort of requirement of.
Our cash reserves to ensure that you can deliver the business and the one thing you know I've I've been in this industry longer than most people on this call in this room and ER and the one thing you'd never one to be is beholden on the market for money.
And so that's our business, it's a long term business everyone says it but very few people manage their business on a long term basis, we do and so you know we we will work as a goal business. If you our job is to give Ah Onez Matt.
Some exposure to the goal process, which we and I have done and so in my entire career and I expect to be able to continue to do that so.
We we have no doubt that we can deliver that five year plan and the 10 year plan that we working on and the life of mine plan at any conceivable gold price without having to big any money from anyone.
And I and I have no intention of putting that strength at risk. So you know we've seen through my career as you have Greg People's try to link dividends to gold price dividends to this everyone has a fad.
My job is to convert reserves into cash flow make sure we've got enough to be able to invest in Iran feature and give us the race to.
Our shareholders and a substantial part of that to our stakeholders locker host countries in the form of.
Profit stacks.
Great. Thanks, Mark.
Our next question.
Andrew Kaip of BMO.
Hi, Good morning, gentlemen, congratulations on good quarter I've got just three quick questions one of them is.
Just looking at the Nevada Gold mine near term synergies it looks like you've reclassified.
Buckets between turquoise ridge and regional on site based into racks.
During if you can just confirm that.
Yeah, Andrew let me onto that first if you go back to.
Publish presentation on our website.
For the Nevada.
Analysts visit you would've seen that we shifted the shape of the pie little bit and we'll continue to do that you know so there's some away there's some swings and roundabouts unless and that's what we effectively doing so what you're observing is correct. Okay. Thanks, and then look I'm wondering if somebody can help me under.
Dan or yeah, the scope and then metallurgical test work, that's being done at play Levine Anyhow I notice in the discussion you're also you're starting to look at flash oxidation.
I'm just wondering what the the opportunities and risks are relative to fine grinding and flotation.
As as a means to expand the operation.
So I think we've gone past that.
And ER and it's not a flex flash oxidation, it's up using flash vessels to cool down and allow the the autoclave to process.
Hi, I energy feed so so their original if you remember before I pass it onto the expert their original Flowsheet was a combination of flotation and then partial or.
Leach upper upper oxidation using water and the heap and then it was.
When John got there we looked at vessel oxidation, so flotation more flotation floating most of the feet apart from the high grade fleet, and then ultra fine grinding it and then.
With the oxygen doing partial oxidation of the sulfides and vessels. This why is a much more effective why it's proven technology and the platinum industry. So it's not a it's not new technology at all it just hasn't been applied and in the gold industry, because the gold industry doesn't have lots of all.
Our piles of sulfide so.
How do how did I do John .
[laughter], yes, that's exactly it we've we've gone down the of testing the ultra fine grind the tanker oxidation, where we get about.
40% the sulfide oxidized, but we're very familiar and the operators are very familiar with pressure oxidation. So this proposal to adult slash recycle or flash that can recycle is a is extremely attractive to the operation because it's known technology and an era.
Location to.
Oxidize and release the heat from a higher sorry, five feet, it's ideal for us so thats the opportunity for us it's lower capital is lower offer opex in terms of our approach so that the.
The number one priority for us at the moment and no replaces.
The ultra fine grind tank constellation as our priority Flowsheet. So it will be flash that can recycle is the optimum that will be pursuing going forward into the pre feasibility and it also reduces the footprint on the as far as the operating footprint guys because.
Don't have so much infrastructure and and there and AD space is quite critical that PV for us.
All right and it sounded like that that you were moving in that route. So thanks very much and then one final question just quickly on Laguna sits on care and maintenance, but are you going to continue residual leaching at that operation or you are you shutting that down.
No. So so again yeah. This is important about having proper plants.
It's still got significant Chris <unk> potential reserves in the form of sulfide ore refractory or.
Yeah, I got to a point, where the oxide ores running out it was very complicated process to try and do it on a heat and our view is that a put it on care and maintenance.
And ER and make sure that we use that cash flow from the residual ongoing leaching.
To invest in NY exploration endeavor around lagunas, and we have three significant oxide targets, one quite well defined.
Which we busy permitting and.
And then we've also got three in addition to the ongoing drilling we doing in the current pet.
To expand the reserve base.
We have three additional satellite sulfide SASSA lots that we will also be evaluating the objective is to lift the reserves to a level where it would warrant.
It would support the investment in.
And I are refractory style process, where you know which for US is would would probably have to be roasting.
John .
Yes, given the description of the geologists have of extremely carbonaceous material with we'd be supporting a roasting route.
You want to add anything rod.
Hi, good ROI degrees.
Alright, Thank you very much.
Our next question comes from John Tumazos of John Tumazos, very independent research.
Thanks for taking my call and congratulations on all the good work.
Could you refresh us.
As to the.
Reallocation procedure in the 61 of the half 38.
Percent, Nevada gold breakdown.
Does it change.
If the origin of production as one company or the other or is it reserves.
And as an example.
Four mile plus the one kilometer north of four mile turned out to be 10 million ounces of reserves.
With the.
New JV Stakes B.
Okay that John .
Now, let me answer it so the joint venture Air of interest that's what we put in and Newmont Port and that's a goes to the 61 and a half 30 age and a half split.
Meanwhile is outside the joint venture.
If you if what we have to do as there's there's a set formula.
Where we have to demonstrate against pre.
It's sort of a set equation I project that delivers more than 15% IR are assuming a gold price, which is estimated on a formula.
A spot first look back formula on the call process.
Once that's done and we have the right.
To force that into the joint venture and ER and the end it'll be a in introduced or included in a joint venture at fair market value.
And included an addition to the fair market value. We would also add the cost of the feasibility study.
And ER and Newmont had tests to options it either pays us out in cash to keep the 38.5% ratio or a dilutes that's how it works.
Thank you for that explanation. Thank you very much.
Okay, So I'm going to move to London now its a.
But is there one more.
Well no okay.
Our final question from the phone comes from Adam Graf of B. Riley financial.
Hey, guys. Thanks for taking my question I I just have a couple of quick questions about Levada, what something you said Mark piqued my interest about the sterilized or that you guys are now we're examining at Carlin and I was just curious about batch.
How that came about because like I was under the under heavy understanding bet.
Previously Newmont and Eric had a layback agreement, so I'm curious, where the where the sterilized or is coming from.
So I can assure you that you wanted back had very few agreements they might not have add to the intention to reach an agreement, but there's always there's been a lot of I mean, just a at turquoise Ridge Twin Creek as well there was opportunities to rationalize the resource.
It is across the boundary where it was accessible from one or not the other and the same goes for Karlan goldstrike and and the the three projects that I referred to in my presentation, all along that call and goldstrike trained and it's about a million ounces.
Small amount is from the pets and others are from underground with easily accessible from goldstrike, but it's in the call inside and vice versa. So it's that as it's a those sort of things I mean, there's lots.
There's a there's ability to use now that we own all surface building roads, which again, we it was always made difficult because of the sort of bureaucratic and Pos between the corporates.
And there's a number of other opportunities for us to unlock.
Synergies, because we no longer have aligned or offense that that their demands some sort of settlement agreement.
Yep Yep.
And then just you mentioned the deep drill holes that hit the high grade ore at little Boulder base and that's it that's two kilometers down and I was curious conceptually.
You know with with current technology is that something that's that's actually a you believe it's actually accessible at this point.
So I'm I come from South Africa.
Two kilometers down as luck grass roots.
These are massive intersections.
The debate, then and and you can look at it to the section, but the debates is they have drilled through the the intrusive and hit the sort of target packages below their intrusive to question is is that intrusive study data large pop potential resource or where we fall.
And that if we carry on drilling and that's so right now we're drilling a single how to check it out and will or will you will.
Let you know decide out once we pulled that they've done that whole.
And.
I thought there were a waste dumps that we're sitting above it are you drilling through the waste dumps begin to.
To get under there are you able to drill a directionally.
No.
Now we just rolled through from surface you know, it's a big area and we just want to get through the say intrusive and and check the the stratigraphy.
And the ended our as you know you're gonna have to get down there underground so waste dumps on are not an important.
Prospects are not playing to do an open pit down to two kilometers no certainly not [laughter] failure leeville.
Multi you guys believed that there is a multi multi millionaire expansion potential there with though that you guys can define with overtime with with additional definition drilling.
Yeah, there's a patent drilling or in Levo, a you know again the approach to Nevada, both in even in Barrick, but certainly in a newmont was more driven by density and pattern. Then we're much more geocentric and the way, we do things and you know weve.
Looked at the core and we see a continuity of the ore body from one borehole to the other and it's about some part of that is down to 150 meters for 500 foot.
Spacing and a and so you know as an inventory, it's definitely very attractive and its multi multi million ounces or.
Potential there, but we've got some work to do before we can.
Specifically.
Frame it.
Do you believe that continues north the past the old standpoint, they are pretty the the continuation as north its and its north and then start the waste. So it's on either side of the main infrastructure money instructor and actually in the middle of that infrastructures, Rita K, which is largely.
Evaluated through drilling, which again wasn't done them on plan, which we are now moving into our reserve and planning share Joel.
Fantastic Fantastic. Thank you for answering all my questions.
Pleasure.
Yeah, London.
I think the guys in the funded or your job.
Just switching market.
Okay.
Thank you for giving you talk presentation without mentioning the World Cup Red Bee once much appreciated.
The you haven't heard my finishing remarks, yet [laughter].
You mentioned at the start of your presentation the importance of BSG, which is okay. There's another battle ground that you're going to have to win on relative to paper and we can currently some safety cost and data.
And I mean is there an opportunity for you to publish them environmental hopefully data in a C O two emissions food withdrawals something like that.
On the on a constant basis I'm sure there.
Yeah. So that's a good question, but the pointed on my CPI is that this is a battlefield or when it come see CSR because for us it's not compliance it's a way of doing business. Its deep an idea and I can tell you right now that our emissions are down and our carbon footprint as Dan.
Quarter on quarter, and and what what my challenge to everyone is.
You know fund managers.
Uh huh.
They they get these sort of.
Compliance.
The bonds and then they throw that the mining industry without even thinking about it and you know and again, we as an industry. All it does is it puts everything at risk. It's about how do we actually work differently, how do we actually allocate long term capital and one of the C.S.G. and and and.
Not only community, but yes all issues.
Is and it's a pet subject to monitor I have the conversation many times fund managers are almost for the industry to go to the U.S.
ER and mine North America somewhere safe very comments and our biggest single challenge in this world is poverty.
It's a bigger in my mind, it's a bigger challenge and everything else because it's the biggest driver to our a global.
What you call warming or pollution, and the impact of our ability to survive on our planet and a and we are neglect at and I've had this debate going for a long time is.
When you look at the pools of capital that invest in mining, we should be encouraging investing in emerging markets and ensuring that we participate in the upliftment of the people that are left behind by society and that's one of our as mine as biggest contributions.
We met can make to the whole CSR ear saw a challenge.
And again you know we as you can see a we've done that you want us to structure, how our pay you want us to do this you want us to do that the mining industry does it all the does is a trains the mining industry. It makes people more compliance you get it you get rid of the entrepreneurs and you get a are you.
You start attracting janitors to our industry, who merely look after they assets as best I can make shorts compliant and and mining is a is that as a massive engineering endeavor. It's also able to employ people trained people give people a new lease of laugh.
And it and on top of that it has the responsibility to be modern and its approach to be a more than responsible.
In the way it manages its environment tenants and it's something that you know we have a it's a it's a we've only company.
So if not the only one of very few mining companies that have a full executive person and now executive team who's responsible for sustainability.
And who has the executive authority to be able to affect that.
Alongside our head of operations head of project and evaluations head of capital allocation CFO and so on so.
So you know Barrick I can tell you we see that as a very critical component of doing business again too. If you want to be will clause and pursue world class assets, you got to be prepared to and capable of developing world class assets in complex jurisdictions and.
In a in a first world.
Not even first world, but in a way that is acceptable for the.
The generation X. synergies of this world and that's and again you.
You know you only have to go to a mining conference and you can see it's like an old age home gathering.
And it's our responsibility along with our responsible.
Approach to see us on year saw is to attract the young folks into our organization and to give them what they want and that's it dynamism ability to participate in bus business decisions a responsibility to the greater good they're not just a the income statement.
Performance in so again I you know we've started out on that we've spent a lot of time in this last nine months about human capital.
About how do we get.
To the front of the QQ at universities, rather than employing to back of the Q, which we already got at.
And and ER and making sure that we.
We become and <unk> and young people don't want to come to a head office every morning.
They want to be much more in the game and so you know we've debated that at length there now.
Absolutely excited about the fact that.
Before I get to that old age home status will have a lot more young people are now organization.
Got it.
One more.
Hi, Mark.
One thing.
You talked about earlier replacement of assets.
How far down do you think long analyst call to quality spectrum would you look beyond the tier one assets, where you state here how to target of having the majority of them. When you look at tier two assets, you think that could become tier one real anything below that so tier two for US is 3 million ounces plus makes 20% returned 1200 dollar.
Yeah, the why because its smaller so your ability to make returns on a longer cycle. So you lose one aspect of making money in the gold industry. So we would look at that you know small assets you want a bigger return because there's higher risks can be now and less time to fix that when it is when they are problems.
Yeah, I think for us or copper is an important component of our business, 15% at the moment you've seen it make real money. We you know even the ones that we've got which are not necessarily tier one in a couple things and so no that's our focus.
And and I don't take you want to try and get caught up in.
In a in second rate being a where we'd like to be a tier one business and again I think this industry needs to focus on something that actually can make a returns in good times and bad and I've said it before said again you know if you if you look at the gold industry.
They too many managers and too few quality assets and a you know the two top companies in the industry have led the way and consolidation and you know this industry needs a lot more of that to be able to bulk up and ensure that we have.
Enough agile competent manager men Stewarding the limited.
Assets, we've got and then spend time on finding more which is becoming more and more challenging.
And just one other one you made his or her comments earlier.
Providing investors the greatest exposure to goals, which I would say closely for very closely aligns to the Randgold strategy has no debt.
Our cash to certain points you seem to soften on that policy around your views around debt. So how do you next two to three years think about higher dividends right now verse faster repayment of the net data. So so the data is as I said long term. So he can blow it out.
This is going to cost us twice as much and it doesn't make a united It's a it's how you make use of the money you, Mike and and again, where a massive organization where this data is eminently manageable, we want an opportunistic basis.
Away at it but at the same time for a for US the gun payout expensive debt, which we can manage comfortably at the at the expense of returning.
Dividends to our shareholders doesn't make a whole lot of seems to us.
I see if I'm honored to have something to add.
I would agree with you I mean, a company or the size was a diversification that we have consistently sustain.
Age as part of its capital structure.
And I think mark an alcoholic beyond conservative vein of what that it looks like it's appropriate to have debt.
Okay, Yes.
Anymore.
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Yes.
Hey.
<unk>.
Lester.
So the question was any more comment on consolidation, Yeah, West Africa as being the most prolific producer of new gold mines, and it's a and it's growing some very interesting companies there, so ER and as they send said or consolidate.
National bring more Oh, I'll up optimal ER.
Management cost absolutely.
Yeah, I think we still have you have yet to add up the corporate costs of the industry and you just consolidated that I mean, just look at the Randgold Barrick <unk> deal. They you know there's this boded well, there's no real logic to have big corporate offices.
Yeah, we prove that's possible both at Randgold, we've proved as possible very quickly and in not just nine months at Barrick and ER and so I you know I think I'm, the great believer and and their requirement to for our industry to consolidate.
I have a west Africa is a good place where to start and we've always said that in our rationalization of assets. We are committed to playing a role in that ongoing consolidation.
Which we will do.
So ladies and gentlemen that brings me to the end of this very interesting debate I look forward to I'm not sure when we'll be back here, but we won't be through often and ER and Oh, you guys you I in the.
End of it in the broking business, you'll see us and of course our shareholders.
It just remains for me to two point out that on your way out they are tickets available for rugby lessons.
For those English folk who would like to aspire to being in the somewhere around the finals in four years Tom.
And I would end up finally by saying thank you very much for beating the all blacks.
Yes.
ER again, Facebook on me and Oh.
Look forward to catching up with you and again anyone who who's not so quick off the Mark and comes up with a few questions that you haven't managed to August . This afternoon. Please feel free to reach out to US you know the team. We're all available to take your questions. Thank you again.
This concludes today's conference call you may disconnect. Your lines should you have any additional questions. Please contact the Barrick Investor Relations Department. Thank you for participating and had a pleasant day.
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