Q4 2019 Earnings Call
Thank you.
Yep.
[laughter] [laughter].
Wow.
Well I feel pretty quick.
Wheeling top Bobby.
So.
Hey, good morning to everyone. Thank you for coming now some cold outside.
I appreciate you.
Risking the weather.
And again.
Another year and.
And.
And it's a pleasure for me to share.
I look back over the last 18 months with you today.
As you know this is the full say it.
Of results.
That back bank as publishing since its transformational merger.
With Randgold resources, and it's gratifying to report not only.
That we have delivered strong performance, but also that we have made significant progress towards our goal of becoming the wells most valued gold company.
Achieving this obviously you require technical excellence, but even more than that it demands on long term strategy.
One which recognizes that we operate in a changing world where business is expected to meet new standards of behavior.
And we and CECO issues have become commercial considerations with serious consequences.
One of these is E G.
Which rates how well the company manages its environment.
Sustainability and governance and right now I think is a little bit too much focus on the part of the SG.
This is as important and side as the G.
Net as in other words, something thats been very Dear to my heart and was the basis of the Randgold resources strategy and that is social license or license to operate and it definitely.
Calls on net full years G.
Vision.
Two barrick.
Securing and maintaining its operations social license is a strategic imperative.
So part of our business and just not another box to tick.
With major investors now, placing iasci at the heart of their decision making.
The rest of the industry will have to follow our lead.
Just getting this so this is a cautionary statement. Please take note of it and for those slow readers that is on our websites and you can go in study at in the in your own Tom.
Moving on caring for the wellbeing.
Of our employees is a key component of our ESG program.
Our health and safety record improved last year, but it is still some distance short of where I would like it to be.
At the time of the merger all Rand gold mines held the us So for 45001 health and safety certification.
All of Barrick operations did not.
We are addressing this and by the end of Twentytwenty. One we are planning for all our sites to be certified.
Another challenge has been getting all the Nevada gold mine sites up to the required safety standards. Following the stead establishment of the JV last year.
We also still have some work to do to align the legacy Newmont operations with our safety program and it's worth noting that in our organization Amie Africa, and Middle East as a stand out on safety statistics compared to the rest of the organization. So we have quite a lot to do to get us up two way where I believe.
And we've launched a focused program, obviously zero harm and remaining so.
Just to give you an idea and Barrick you break the safety rules you don't have a job that's an important retake.
Safety.
Our first for a long time, there were no major environmental incidents in 2019.
All but four of our margins have the Paso 14000 in one environmental management certification and by the end of this year. They will be no exceptions three of those are actually the Tanzania and assets, which we just acquired wholly operations apart from the recently consolidated Tanzania and bonds.
And have come community development.
Programs and you would have seen this very real requirement to engage with the community in Tanzania, and we are working on that it's again, a key building block of our license to operate is to have that.
Open and formal structure to be able to talk to one of our key stakeholders, which are.
Host communities.
And and we expect that we will have again our entire portfolio.
Working under community development committees. In addition, biodiversity action plans are being rolled out to those sites in the group that do not already have them.
And they also some legacy issues, although mark and his team have gone a very long way to address that.
Setting and.
South American assets and again, we've made a lot of progress in transferring many of those risks and liabilities the opportunities, but still some way to go.
These are the highlights of the year and as you can see we delivered on all our promises and then some I would also just point out that our results are currently UN audited, although we expect to file our financial statements and the next couple of days.
We met or exceeded our gold and copper production goals and controlled costs.
We also have the net debt and Thats a key component of this performance, we set out to really address a number of things focused on tier one assets.
Deal with the debt, which is something that really crippled.
Barrick and then deliver a runway where you as analysts said of course, our shareholders can be able to invest in our company with comfort that we've got a long term plan.
And so we.
Having that net debt down we've got to deal with the long term debt, but thats an expensive exercise, we gonna have to take some Tom.
And and look for opportunities to reduce debt. So right now what I'm focusing on is the net debt and the liquidity available for us due to run our business and certainly I can honestly say today, we are independent of the capital markets as Barrick, we are able to run our own business.
Yes.
And resources adjusted net earnings per share was up 46% compared to 2018, and we ended the year with another quarterly dividend increase.
The third increase of the year and again really you must look at it as this is what we said we would do there was a lot of squealing and people wanted more dividends from Randgold. We said, we did play a big dividend and Randgold remember and but we are refused to pay a dividend that wasn't supported by.
The PML earnings I'm, not going to pay dividends that we havent and yet and likewise Barrick gave it a commitment and updates dividend drop at the deal and then we adjusted the dividend again in quarter three on the back of good performance and a higher gold price, we're comfortable about where our dividend as today.
And the key part of a dividend as you know me, we don't want to go backwards, we're only going forward. So we feel we're well positioned with our current dividend for the foreseeable future.
The Nevada merger gave us our 16.
One Goldman and we continued our portfolio rationalization.
Consolidating the Tanzania, and mines and the spot disposing of our stake in Calgary, and Australia, and agreeing to a sale of the Massawa project in Senegal.
We settled Acacias long running dispute.
With the Tanzania, and government and entered into a framework agreement with the state, which takes up partnership concept something that we are very comfortable about to a new level.
Probably via how expansion project, which I'll tell you more about later heads our organic growth to do list for this year and our reinvigorated exploration programs our plan to full our future plot pipeline as well as extend the lives of our existing.
Yes.
It's worth noting.
That is 29 team Josh.
We succeeded in replacing older reserves depleted by modeling.
And at a higher grade.
And this is net of all changes.
That included the Randgold merger.
Nevada Gold mines JV.
Acacia actual acquisition.
Disposal of Casey GM.
Recasted classification of Lagunas Norte play.
Two mineral resources as we wrestle with its future.
Correction of some open pit ounces at hemlo and gold Corey.
And probably most importantly, the removal of all leach pad and plant in GAAP in plant Golden Circuit inventory from our reserve statement. So we have a nice clean reserve statement on which we can go forward and we are very comfortable that we can plan all those ounces.
As parsing out full to an investment at 1200 dollar goals.
Behind the scenes, we reshaped the business by flattening the corporate structure further reducing the DNA.
Establishing and powered regionally executive management teams and moving responsibility for the ore bodies back to the operations.
We've introduced a strong geological and mineral resource management capacity through up the organization to ensure that we optimize our existing assets.
The operating results.
Support what I've, just explained and show robust performance across the group.
BOLI valid Dara and Paul grow all beat their guidance and North America, Loulo, Gounkoto and PV performed well again stay guidance all within the guidance.
The only exceptions, where tongon, which just missed its guidance.
Kalgoorlie, and Australia, which as you know.
Didnt achieve its guidance at all through the year.
Which we've now sold so that's not relevant anymore, and Lagunas Norte, and Peru, which is on the which has been put into care and maintenance, while we consider as future as I've stated earlier.
All the copper assets beat production guidance and costs were at the lower end of guidance for copper as well and copper made a significant contribution to our pot bottom line earnings last year.
The numbers on the financial results demonstrate the progress we've made over the last year towards our most value company goal and just for those who get it a little confused on what most valued gold company is is we want to be valuable and others want people to pass because we.
Given our shareholders returns when people to want to work for our organization and we want countries to want to invite us in two operators.
And as partners with them and Thats in our mind is the description of what most valued company is.
The EBITDA margin remember when we talked in September.
We said, we would like to lift the EBITDA margin, we've done that materially in the last 12 months debt as I said earlier has been really is reduced to its lowest point since 2017.
And the free cash flow increased from $365 million to $1.1 billion.
As indicated we increased the quarterly dividend again on the back of the free cash flow for costs. That's one.
The strong balance sheet, that's too and more importantly.
Our five year outlook. So this is not just a response to a windfall it is a genuine considered.
Commitment that we promised.
To the market back in September of 2018.
You should note and all these results that I'm going to present now that the comparisons have been impacted by the Nevada joint venture, which came into effect on the first of two large I'll try and explain that but if you look at these tiny little things at the bottom of the slide you'll see.
Those are how that how weve presented the results, so we'll start and and again.
To to the analyst.
Toronto feel free to Jude.
To get all of David dollars and give some input on how we present the results. Our objective is to give you the numbers you need but overall, we start with Nevada complex on 100% basis, that's why because I can't run a company.
With 61 in the office it as I look at it collected in afterwards, we will give you the individual assets the attributable form.
So.
We start.
Our to of course of the operations with Nevada, our real foundational value in this organization.
And as I pointed out to 100% basis. This is the second set of numbers since the JV was form so there's only a quarterly comparison as shown here.
Production was in line with plan and costs were well contained despite the lower grade.
Putting together and integrating these complex operations to deliver within our guidance of 1.8 to 1.9 million ounces for this off of the year.
So effectively was an enormous achievement by Catherine roll Who's here today, and Greg walkers, such as Leo I back down in Nevada, and their teams at really I must say the its has been understanding.
Achievement anyone's needs.
The ultimate.
Measure of an enterprises success is financial.
So how Nevada gold mines is this is our Nevada gold mine stacked up for the first six months on synergies.
As the free cash flow chart shows, we're well on our way to delivering the 450 million an annual synergies with some work in progress relating to supply chain and we've put the detail in there and this is this includes where if you look at that we've got $95 million identified we still going through the the comp.
Tracks to get supply chain, and it's all to do with consumables.
But with that we get to $444 million and that's net of some of the savings that we've ramped back into.
The Nevada plan for instance, dropping the cutoff grade.
So you don't see that benefit because weve used it and so that's why put in the NPV graph on the rock because that's added laugh and so we're comfortable that we've achieved that that objective of delivering on those.
Benefits and and more importantly, we've still got significant opportunities as far as the life of mine goes and I'll touch on that as we progress with the individual.
Operations in Nevada.
Let's start with Carlin.
I need to point out that again going forward. The tables will show attributable numbers now following the merger call in was combined with gold struck Q4 production was in line with previous quarters and total cash cost per ounce were brought down by a higher proportion of underground ore in the feed mix.
Year on year comparison shows an increase in barrick's attributable 61.5% share in gold production, primarily because of the combining of the gold gold strike and call an operator of operations and they operations were still I mean, the cost were steady.
Benefiting from this discovery successes at four mile the call and train will be the most active exploration area in the Barrick portfolio. This year.
They are exciting opportunities for reserve and resource additions in the call and complex mainly clustered around grain group.
Greater leavell, which is a very exciting.
Half of mine extension for Carlin and re tech K, which is immediately accessible we are just doing some water compartment drilling and then we'll be able to put it into our life of mine plans. We have also made good progress in our remediation work relating to the goal Cory.
All failure and subsequent redesign work and the potential for extending the mines laugh is absolutely real.
And although Weve got a little further work to do but we certainly have the framework and the confidence that this complex has significant opportunities to retain its a tier one status well into the future.
Still in Nevada, Cortez was one of our standout performers.
For the quarter as it continued its strong decision.
Sure mainly underground operation if you remember we came to the end of the very high grade, what we called shop Cocoa Cortez Hill open pit operation and this quarter, we only produce processed the lower grade stockpile out of that but it's really for all intents and purposes now complete the deep South project type.
It is on track to contribute and continue to to contribute higher.
Hands at higher grade.
As them the court case complex moves more towards underground.
The year on year comparison, or say it was a stellar year is impacted by barrick's attributable share reducing to 61.5% as a result of the MGM JV.
The root source of model.
For Gold Rush project was completed with the final feasibility study during the first quarter of next year in the meantime gold Rush is now reported as part of Cortez, We put gold rush under court case structure management, we expected to be operated up from the core to his management structure and so.
The project is reporting in as well and.
The likewise the resources have been.
Combined with the Court Court case reserve and resource segments updated mine and feature deals are expected towards the end of this year and a feasibility study in early two in Q1 is for his Gerard early Twentytwenty one.
I think there and a couple of things that you had a pickup and we'll touch on that in the reserves is that you'll see the grades come down answers RK, we've taken out a few of the answers as part of our rationalization. We don't want soon to be discovered ounces in our plans will put them and when we actually from them up so some of the resources was very.
Widely spaced drill holes, but the the resources as you see there again the grades come down why because we've gone to.
Trotten mining.
Shapes, rather than Geo statistical blocks, the block estimates and what happens is we want a man. This ore body. So you can go mondillo blocks all over the place theoretically but in the end of the day got to join them up and to mine schedules and therefore throughout and his team are doing and that's part of outcomes.
Meant to rationalize the ore bodies and optimize them for the long term returns so that that we know they're going to meet.
Investment Fotis.
Moving back to Barrick's hundred percent owned four mile pre feasibility project step out drilling has significantly increased the resource.
And we reported at Enviro coal and new discovery about one kilometer away from the current defined resource inventory and we are confident that this project is pointing to a multi million ounce high grade opportunity.
Formal was not as euro whole included in the Nevada merger, but it is expected to eventually form part of the Cortez Gold Rush complex and it will no doubt maintain that Cortez gold rush complex as a tier one state as well into the.
Gotcha.
Turquoise Ridge.
Has been a big driver of the Nevada Gold mines performance and.
In some aspect it was the real driver to get there in the first place.
It is offered significant synergy savings.
More than $90 million of cost benefits in the first six months alone primarily driven by the termination of the toll milling agreement and synergies of combining a joining.
Operations.
A year on year, and and I would point out that we've already dropped the cutoff grade services.
After that opt optimization and so year on year increase in gold production at lower all in sustaining costs resulted from increased high grade underground ore feed so although we dropped the cut off grade we did increase the throughput.
So the feed from the underground so we delivered more gold to the processing plant and.
Construction of the ship the third shaft at Barrick's legacy Turquoise Ridge underground is unchanged you'll end within budget and is expected to address it to deliver additional value what value does that deliver at the moment, we are mining constrained in turquoise ridge underground and.
Once we get the ventilation done.
We'll build demand more feed higher more higher grade or the whole turquoise ridge to increase which we now to call Turquoise Ridge has a much better.
Gold production profile.
So I have to listen to myself.
That.
[music].
These cost reductions so and immediate.
Impact on the year end reserves.
Where the lower costs enable us as I pointed out earlier.
To drop the cutoff grade and add about 1.65 million ounces of reserves.
Realizing the mines full potential Steve still needs as our point out a lot of work since its plan has now been constrained and we are working to de bottleneck the mine.
Which will allow us ends and the and the and the shaft is one way, but we also trialing as we speak some electric equipment underground to two to be able to allow us to mine more we're doing we've really focused in on the road heading auto mining mechanical mining rather than.
Last thing.
We are trying out some.
A whole trucks underground haul truck so a lot happening because our real for I mean this is the effort.
With the return is the best.
Value proposition that we have in Nevada.
Goldman's today.
That's not saying that we don't have other opportunities. This is just what are those real easy ones.
The other Nevada mines delivered at the top end of their guidance ranges and showed increases in production and reductions in cost quarter on quarter, and and I'm pleased to to share with you that long Canyon, which is one of those assets that were bought at a very high cost.
Is making good progress with its expansion a big put pushback, which will result in about four years off amount extension that we still got the underground to look at following that.
We busy with that permitting.
As I mentioned earlier, the call and trained Israeli our primary or its gain to be.
Our primary hunting ground this year and of course beyond.
It's the most significant or controlling fault, Colorado in Nevada with open mineralization at humorous locations, our fresh geological focus focused approach of integrating exploration and mineral resource management on the mines has been a resounding success in this context.
It has led directly to the identification of a host of target areas. Some of which are very close to existing operations and are shown on this long section.
Further afield, we have already identified new areas of interest from Warcup drill targets. Two large areas that are known to contain perspective strategic refi and geological features but have no or little drilling.
Clearly, Nevada gold mines has the capacity to replenish training, it's asset space going forward.
Before I leave the U.S.
A quick comment on Donlin Donlin Creek in Alaska.
It offers a huge optionality to the gold price across multiple gold price cycles.
In an excellent jurisdiction.
But it faces some challenges that we and our joint venture partners, Nova gold and tend to address.
In 2019, alongside progressing permitting what you've seen updated over the last 12 months. The joint ventures focus was on getting a much more robust interpretation of the ore body.
This to this end we have updated the geological and resource models, which have identified areas of higher grade that could improve returns for the overall project and importantly, as well we need to frame that she those geological ore bodies properly because that will set the rates in which.
We can mine, which will set the answers that we can theoretically.
Produce which will then govern what ounces, we what capital will we have to spend to deliver the return on a back to front way and so that and you know thats been our focus since I started in the industry is let's get the geology Rod and then we'll be able to make decisions.
On the other critical items into the future and so we are busy with a phase program. This year.
It will be looking to validate that geological model. So it needs to be attractive, we'll drill adapt remodel it checkout changes drill it again, we do a couple of those through the Oh certainly through the summer.
We now move south.
Across the border.
Two hemlo.
Where the top of the merger you'll remember there was some debate about this mines viability.
In the end, we decided that it could have the potential to be upgraded to the strategic category by moneta moderate modernizing and refocusing the operation phasing out the open pit and transitioning to underground contract Mon miners, which is exactly what is happening.
As you can see there's been a very encouraging turnaround in its performance.
And they are indications subject to some additional drilling and royalty discussions.
That we could extend the life of mine beyond 10 years.
And with that tax shield, it actually has a tier two asset.
Not to sentiment.
Not that sentiment hour to add.
Played a part in our decision.
But hemlo it is only Canadian operation.
At this stage.
And considering our heritage as I've said many times before I believe we are under invested in Canada.
So leaving.
The Americas.
Canada and the U.S.
We now move to Latin America, and we'll start.
With the Dominican Republic way.
Pablo via her provided us with some pleasant surprises and ended this year with a very strong quarter that is without the need to recognize that the management team really unlocked those opportunities.
Increased throughput and better grade control delivered a commendable you're on a year a year on year production performance and focus on efficiencies contract reviews and cost controls kept the costs in line with plan.
In particular, the throughput run rate over is really well for I expansion plans maxing out today I mean, I think we've had we've had throughput record. After three report record in the loss from the back half of last year and actually in January again.
So it's a it's an exciting project looking at the geology and the mine plan, we see enormous upside for this mine. The problem. However was that a significant chunk of the mines inventory has effectively been sterilized.
Bias limited tailing storage capacity.
And so that's why.
Pvs ambitious plant expansion project is being too and with the expansion of its tailings capacity to support the increase throughput.
I knew optimization study has shown that throughput increase can be achieved without adding additional autoclaves.
Which will simplify the flow sheet and make sure that we have less disruptions as we introduce the expansion project.
PV is already one of the world's largest coal mines and the plant expansion will enable us to transform further.
About 11 million ounces from measured and indicated to reserve.
Today, we can't do that because we don't have any way to put the tailings dam, but once we clear that then we'll be able to do that.
And and keep production well above 800000 ounces a year.
Beyond 2040.
Environmental impact studies, and community and social engagement or underway as we speak.
And.
And our just add that.
Along laugh PV is obviously good for Barrick and of course, our partners Newmont.
And it's even better for the Dominican Republic.
The mine contributes more than 20% of the country's corporate tax.
Further south in Argentina.
Well I Dare I had a great twinkie 19 of the struggling for years.
It exceeded its production guidance.
And it kept a tight grip on costs.
We've put a lot of work into redesigning and Replanning the operation and his life has been next take extended Bob could push back on quite right Skinniness, which will start soon this is the pet we just drilled adaptable and we've got to expanded and.
And that really does take us along with the residual lease absent another 12 years and our just point out that when we started last year, we had a short laugh and it it wasn't possible to make profits in 2000 1200 dollar goals and our passes our 1200 dollar goals for.
So a big.
Step change for this operation, there's still more opportunities that could extend the life of mine up beyond 2030 and and.
In the meantime, we focused on cost now because of low grade operation and the Big next cost saving is gonna be when we linkup the power line to the clean power grid out of Chile.
Which is very significant for veladero and that'll dropout cut off grades and and it will give us a whole lot knew more opportunity to expand upon commissioning in the second half of this year it'll have a significant impact on valid arrow's cost has appointed.
And and then.
We've also.
Permitted only so we've we've really worked hard at Bakken his team at.
License to operate as you know Argentina came with a lot of baggage and and we've now very pleased to say we have all our permits approved in Argentina, and validate era and we're now working we've just got the phase six pad expansion down and it it will start.
Producing in Q4, this year and and the next focus now is permitting.
Phase seven pad expansion, we have seven eight or nine and the plan and we now have.
Reserves and resources to two.
To support that.
Progress with the permitting to ensure that we've got some.
The expansions in place.
A replay.
Hi renewed focus.
On integrating GLP and mineral resource management with planning and infill drilling has added as I pointed out earlier additional three years.
This is before residual leaching.
Which including residual leaching as I said will extend us by 12 extend the operation by 12 years.
In the Adair a district.
Billing programs are being developed to evaluate new conceptual targets, which is validated have the potential to unlock and rejuvenating. This whole district, and we've got a lot of investment and the infrastructure in this region recent mapping and sampling and geophysics surveys physical surveys at.
At quarter end project, along with other brownfields satellites as you can see her on the slot offer further potential for reserve and resource opportunities and we're also looking at some of the ore bodies that were.
Originally included in the Larmer project, which is right adjacent to validate era to see if there's any of those assets that would leach and that is another opportunity to add not only laugh, but also some higher grade.
To the feed for four valid era.
The El Indio belt of which Veladero as part extends from past Kalama invalid era in the north to al tourists in the south and straddles the border between Argentina, and Chile, and it is particularly well endowed with gold.
The legacy mines and opportunities it is yield more that yielded more than 50 million ounces.
In the four decades of discovery and development and other everyone understands this but barrick is it was a leader in that development and also.
You go back to El Indio them on it was the first mine in Chile that was properly closed on the international.
Closure.
Con.
What's the rightward conditions and so Barrick has a long history. There has got a great memory. It's got a few bad memories are going to get rid of those bad memories will focus on the the good ones and we control 100 kilometers of struck along they are India 10 trend with significant targets.
That include past Kalama, which you'll see we have restarted we've.
Given up the current plan and we got to do this.
Properly and.
And with and we also have the 9 million ounce Alturas del Carmen project as you can see in the south of the strain and many more hours. They just the other day with the team and we flew down. This this Andean trained and it's just amazing.
So one paceway geologically could actually see the mineralization.
Showing its nose up and this isn't this in the stated.
So while no Nevada as bags value Foundation, Latin America office growth.
At PV, PV and opportunities at Fella, Dara and along the Andean trend our regional portfolio holds the potential for further world class discoveries and our exploration teams, which are now fully employed.
Our hard at work in Argentina, Chile, and Peru, as well as the Dominican Republic, where we have our own Barrick exploration team. In addition to the PV joint venture.
Over to the Asia Pacific Region, where program in Papua New Guinea has the potential also to become a tier one mine, but faces many challenges mainly in the form of legacy issues.
And and unruly neighborhood.
Despite these it posted a standout performance in quarter, four boosting production and cutting costs, which contributed to its exceeding production guidance for the.
Given all the challenges and interruptions cost control was commendable, although still a lot to improve on it is worth noting that and 29 team pull graa paid more tax then it has in the previous five years combined.
We were confident that the mine in partnership with the government and landowners is capable of making a meaningful contribution to PNG and barrick's engine partnership for years to come.
And it is because of that said, we have applied and on negotiating a 20 year extension to the special mining lease with PNG government.
We also need to point out that PNG.
We believe in it and.
And we are committed committed investment in that country and committed invest in that country.
As there are other operations, we brought a strong geological.
And structural modeling focus to pay on Panera and this has already identified a significant upside in the life of mine potential for example that when Gema zone, just outside of the open pit historical but sparse drilling combined with geophysics and surface sampling indicates the possibilities.
Have a continuation of mineralization.
Within an intrusive, Colorado and drilling is already underway on some of these targets.
With that now across to Africa, and the Middle East region, which was not an insignificant contributor.
To better cash flow and 29 team.
Incidentally. This region is led by a very competent team.
Which took the challenge of Tanzania, and their stride and whose performance is a tribute to the Randgold resources succession planning.
Because we wouldn't have been able to do what we did in back if we couldn't leave.
Africa, because we all move to the center.
In competent hands, a net was the trained next tier of management in a in Rand gold.
We start of course at Loulo Gounkoto complex in Mali, which as usual did very well exceeding its production guidance for the year. Despite some challenges with a little girl skier.
This past quarter.
Cost were well contained in the complex also replaced reserves depleted from lighting for the.
It's a solar power project bags first is on track to add 20 megawatts to its grid. This is the mine grid.
Reducing operating costs and estimated to cut carbon emissions by about 40000 tons.
Per year, and it will reduce our requirement for heavy fuel and diesel by 10 million liters.
Development of the complex third underground mine had come quarter, it's scheduled to start in the fourth quarter of this year and I'm happy to report that we have made significant progress in resolving our tax disputes with a margin government and that's another.
Attestation to our relationships our license to operate in some of these more challenging environments.
Pointing further to growth.
In the complexes asset base step out drilling has confirmed the extension of nearly as high grade transfer zone in the South. This is the effective extension of what we used to call the purple patch.
Two over an additional 320 meters setting a complex up for continued risk replacement of reserve depletion in Twentytwenty and on the current quarter permit I significant structure, which controls the majority of mineralization in the Gulf quarter Pet can.
We observed in the south end of the potential projects down into a region called forever and and we've really made progress and understanding this and this is how these.
Our bodies are are driven as these big structures, where the interfere and we're quite excited about the opportunity for forever, which is a part targets that are being around long term to add to the couldn't Carter.
Resources and.
Hopefully reserves.
Across to Central Africa, where kibali and the Democratic Republic of Congress continues to shine with a record breaking performance for the third third consecutive year gold production was well above the top end of guidance and courseware and Aloha off of their their range.
Kibali also replaced ounces at mind and as that other operations to search for additional ounces goes on the highlights of the past quarter was the completion of a successful Prefeasibility study on the Columbia AECOM by project, which will balance the open pit and underground ounces and effectively gives us.
Yes, the opportunity to shed Youre open pit ounces up 10 years, and and you need that in an underground mine that flexibility that open pit reserves brings.
At Kibali.
Total.
Project reserves grew by almost 1 million ounces after depletion in 2019 and improving our understanding of the mineralization controls.
Both with NN down dip of the KC de deposits as well as the case it trend will provide further opportunities and we actually have us.
At replacement plan ahead of us and and you'll see we've we've stepped out that de CIX or to hit the minute main mineralized bodies and we've stepped out another 600 meters with drilling that whole as we speak will add another significant potential to them on.
And now.
Our latest.
African partnership.
In September we consolidated the Tanzania and mine into the Barrick portfolio following our buyout of Acacia.
Without wishing to bring up old Burns I.
I have to say that Acacia represents.
A lot of what can be bad about money.
And we have our work certainly got our cut out to repair the operational reputational damage inflicted on these months.
The team has made a strong start however, and we're confident that we can turn them around.
We settle the cases stalemate dispute to the government.
And concluded the formation of a jointly owned management company as well as at benefit sharing agreement designed to ensure a genuine partnership going forward and I might add we're very comfortable these sort of partnerships with strange maybe for you, but you know that's how we operate in Lula, that's how we operate in the condos.
And that's how we operate in the Americas. So it's important to have management.
In governments in your management structure on your board see what you do your takeaway that suspicion that you're not doing the right thing.
The partnership's first achievement.
What's the Swift resumption of the normal operation is at North, Florida, which is now back on track and the successful transition from contractor to owner operator mining has already delivered cost saving so the team diameter team led by vellum Israeli done a lot of good work immediately to address operational challenge.
This quarter on quarter and year on year comparisons are not ready with much.
Because we've changed we started to 63.9% into winter 100, and limited the joint venture at 84 16 ratio with the government.
There's a lot of there's absolutely no doubt about the potential at north borrow some of the banks as of this audience will know that I've really always had a view that north more hours and hours wasnt optimized at all and and everything we've done so far reinforces that and and so we're looking forward to.
Building on our geological models, it's short of geology every way short of geology, and the reserves Recon plan long term a lot of work to do but we've got new models already are turning a corner and the Jenna ore bodies and we were very excited about the upside around north Mara and then.
Elsewhere in Lake, Victoria, Goldfields fully and who as you know is running on tailings retreatment.
We're busy we've appointed a full feasibility team we've started the drilling as we said we would because when we were arguing with acacia fit the geotext rod thrown out some of those holes because in the deeper high grade.
Areas, because there were no bore hole logs.
But just there were drops to call. So we have to get another look at that ore body. We're doing that we expect to have we are we have a plan to bring it back into production and once we've got to the the detail.
Mine planning done and we expected that mine Bakken production.
By the end of the Buzz Wagy really working towards closure, it's a relatively new processing plant, where John steel has really got plans, but we would not to use and so you know we've gotta love to do in Brazil, Augie and and as you know we were where this is we'll part.
Proceed to our work at Marella, which were making a lot of progress on bringing year to closure.
Tongon has about two and a half years of loss left and remains a very strong cash producer.
It's got very little sustaining capital and.
We are looking at we've just finished the drilling on the Janey deposit we've got to do a feasibility study, but it has the potential to add another year and so we are looking at that ARIKAYCE solar could destination for our exploration team and then as I indicated earlier and the introduction.
Our copper mines had a very good year and exceeded their production guidance. They performance was led by Lumwana. As you know we wrote back about $900 million in them Lumwana entered with drop the cost we've increased the fed feasibility I mean, the we've increased the efficiencies and we've got a much more Zambian man.
Average been team running that operation.
And then zaldivar we are.
We have now approved with our partners the chloride Leach project scheduled for commissioning and ramp up but 2022 and that will add more value to zaldivar I don't believe that out.
Copper assets are properly valued and in Ivy as our probably suggest most of our assets, but this year, we got to be focusing on that is sharing that with you and getting you to understand where we carry.
So.
It's generally expected an up certainly been willingness for awhile that the global production for the gold industry will peak this year or next and then its downhill all the way we forecast seeing if you assume all the announced projects come to fruition will still be 30% short by 22.
Okay, not so against that backdrop is particularly important.
And rewarding to be able to presented trend going the other way.
Where we have been able to end the year with higher reserves at higher grade than what we started the year with most importantly, we have replaced depletion on all our key assets, except for PV and Cortez and it's worthwhile just understanding those need feasibility studies, but we've gotten the major.
Then indicated resources already and line so a new feasibility just unlocks that and for which we have and so.
I've put us anyhow, because I anticipated somebody.
Some analysts wouldn't miss interpret.
Numbers.
And if you look there's the acquisition line 13.4, the depletion is what we depleted and the.
The.
The additions change gains are all replaced ounces through the drove us So 606 and a foreigner half is the clean up all the stuff that we couldn't deliver value on and we've put it back to where some of it completely off the shadow some of it as in third.
As some of it as a measured and indicated lock the lagunas Norte I am sorry, you see where we've got to.
Year on year.
And the same.
For copper and copper so barrick has.
71 million ounces at 1.68 grams of.
Reserves that are viable at 1200 dollar long term gold price no adjustments.
Current input costs. It has 171 million ounces of resources at 1.55, which is viable and deliverable at 1500 dollar gold Scott They've got mine plans attached to them, they're not just some soon to be discovered.
Note.
And and the same with copper as our show here.
We've we've increased our reserves by 2.2 billion pounds of copper and just to point out we don't model. The two we separate they are individual reserves and resources, we don't do the.
The gold equivalent that.
So.
Wrapping all those together.
This is our five year plan, we've already shown at year end annual deck, you will find the detail of the individual regions. So we just in one or waste their time sharing it.
But weve updated it and really there's an improvement and the trends because we've taken our K CGM and massawa, so that takes our capital.
And why do we do this.
Well. It shows you got to 5 million ounce space. The costs are coming down you can see why we are comfortable with our dividend.
And in March of the annual report will show you the tenure plan, which doesn't look to similar.
And why because as I said in the beginning we want people to see our runway and understand where long term business and some of them will be.
Little bit wobbly, but then we'll talk to you about how we're going to fix them.
And we've got certainly got organic opportunities.
That we need to convert and put into this plan. So this is our base plan going forward and we as a management team. All now work with you on it as we have done so as I have done in a market for my entire.
Korea.
And the same with copper and you can see.
Not a bad picture the picture didn't look so.
However, when we first started out last year that we've already turned up copper operations around.
So.
In conclusion since the Barrick Randgold merger was announced the Barrick share process increased by 79%.
Outperforming its peers the indices.
And the spot gold price.
And it's clear that the market now believes that what we set out to do was one plausible and two has delivered something that is really an opportunity to continue to bulldog.
And I have no doubt that we will deliver on our most valued.
Our goal company ambition.
As I've shown you in this presentation.
We have achieved much and 29 team, but we are under no illusion as a management team that there's still a lot remains to be done to get to our destination.
And I can assure you that we are all.
More importantly, our executive teams in the regions.
Quite capable of doing it and we all look forward to the challenge. So thank you ladies and gentlemen, I know it was a long presentation, but we've considered as important to walk you through this and so it gives you the.
Nation, norm, which we will build on going forward and again, we've got some of the executive here, we're happy to take questions and I think Graham is actually on the call because he got caught up with the.
The UK weather.
And didn't get a I wasn't able to fly for us.
We're going to take questions here first though yeah.
[noise] markets, Craig Barnes from TD, and then maybe jumping the gun little bit, but in the 10 year plan.
Can you sustain that 5 million ounces of production profile without building in new mine show.
Yes, yes, that's out and they certainly that say every indication where the teams are at the mode. We got organic growth. So some so Nevada, it's got some upside that we got to work on.
I think.
Latin America is pretty flat and but.
No doubt, we got opportunities day organic was and also can we get the 800000 ounces closer to a million ounces out a PV and then.
I mean youre seeing the in the graph that you got it goes from 1.5 to 1.3.
But again, that's based on what we've got today and said highlights way, we can go but when we step those three stacks together, we get that 5 million ounces for the five years and we've got the same looking at a 10 years and we've got opportunities.
Both into that 10 year plan organic opportunities at will.
Highlight for you when we deliver it took us limits an upper as a production plan. So it just shows you how we plan to do and then we'll roll that five year plan and you know with any luck, we'll continue to roll. The tenure then that's the plan.
Is there any thinking about growth I show, but gross what is growth I mean, the best growth I can give you today.
Is this.
Sorry that one.
Because if you transfer that into a cash flow number and you look at different numbers you grow the cash so and that's what are you know you flex Greg you've been with me all the stuff how many times that people suggest that I should go and buy Durbin deep all this company or that company because every week.
One was focused on gross fee ounces and we stuck to our numbers, we use the falters, which we very clearly have.
Shared with you back in January last year, and we will grow this business first of all it needs. This growth because we need to sweat these assets and the secondly growth opportunity for US is and we would we I would change the term growth to investment opportunities.
With that with the new onset investment means that you intend to get some returns back from your efforts rather than just growing ounces.
And as you know, we're not shy of taking on a challenge.
Hi, Matt Murphy with Barclays.
I'm just wondering with the reserve update where you're at now in this MRM transition are you where you want to be is there a lot more work to do on these geologic models before we started talking the.
New drilling.
So we're drilling budget. This year is $170 million, just on new and rubs stewardship, So where where we spent most of our money on very near term brownfields work last year, tying up most of our exploration team.
Lived on the mines, because we have to redo things, we we relaunched all the core and PV all the call invalid era. Yeah. We've reached we've read on all the models in Nevada.
We resolved everything.
Lumwana.
Yeah, we've read the one that we didn't do a lot on but we because we haven't got anymore information is overlap at all the rest we've done a lot and we busy with that exercise right now with.
Tasker.
But we've got the two things the mineral resource management team and that that philosophy is completely unchanged in our organization I mean, catherines geologist so that was easy even.
My engineering colleagues here is fully committed on that.
Im sorry.
And violent moves in a kick out.
Lawyer.
He is having on the we have to put him in the right place, but he's got some very strong MRM people behind them and so that's what this is that that philosophy as well entrenched in our organization. The general managers understand that yeah. This year. We did these plans have come from them on their own the reserves they own the.
Flattening the geologists are completely integrated in the business of planning.
And and again, we've got work to do we we're busy.
Reshaping.
And improving the efficiency of a very complex geological planning program and Nevada, because it's a huge organization. So we've got at 90% drops that we needed tidy up a little that.
We have also move geologists around to get a little bit of a different view I think that the big changes also been we've now got properly staffed if anything.
The area that needs and additional focus on geology skill is Africa, which we've moved quite a lot of people around and and we've been very focused on a on the Americas and and and and Pokrassa.
I think with I think we've got the framework I wouldn't say that we are where we you never.
Absolutely.
Ed Ed Utopia in R&D is there's always something more to do.
But I mean, we've got some excellent geologists and and the reason I just give you. An example, veladero when we got there where we didn't really know what the grade ores, we're putting on the.
On the reach pets.
We do now and we've got a drilled we haven't got drill to where we wanted to be but at least we've got a drilled and we're drilling it out.
And there is and so.
Nevada was well drilled in the reserves, but not in the life of mine. So we've moved to step out of then we identify that in the due diligence.
As it was very focused on cash flow.
We've changed that completely as you see the grades luck duck turquoise ridge call and the grades are down but the production is there because we've improved the efficiencies in the processing facilities and weve optimize the ore bodies.
So I would say that we've got the.
Basics.
Where we want them to be.
Hi, I need to Sony from Sandy see so you talked about adding mineralized and labs around the added resources if the resource moved from.
Inferred and high into preserves would you expect additional dilution or is that it.
No. That's what we look here, we do I mean, we look at said and mining.
Shapes, when we when we model it and that is very are in that.
I guess I'll, let me answer a different way the way we looked at 1200 from a thousand.
In Kibali for instance.
When we moved the Mark when we tried to test the the higher.
Gold price lower cutoff grade, we didn't really change the reserves because they the shape of the ore bodies are such that you on a hard boundary.
So a lot of the ore bodies that we have on hard boundaries.
And so you can you know when you move them ready don't change the the dilution.
And that and we just continue that process, but our new projects, where we make a conscious effort to to manage dilution and losses and things like that in our studies and in the reserve calculation. So those sort of new deposits back satellites in that would come out but they are not necessarily.
She has the right great anymore, because we're still very widely spaced really.
I think the key Anita two too I mean in somebody's.
One of our shareholders called us the evidence it can we give you cannot give him a view of what we had laplaca $2000, but it's 171 million ounces.
And what's exciting about Nevada.
It's when you look at our mine plan, because we going underground, we increasing the great keeping the production in fact rising the production, but what we do as we opened up capacity, we actually closed down some of the facilities. So in a high grade gold because in a high grade doesn't help if you haven't got processing capacity.
But in Nevada has that significant opportunity of being able to grow.
Goals because field.
At a higher gold price lower cut off grade, we access again more oxide or we have more flexibility for pull up the capacity. So we got capacity the same as some of our big mines, where we've got leach.
You know as Leach pads, you can increase your capacity quickly, whereas in a in a in a in Kibali for instance.
Well I mean commodity still got capacity, we don't use on the capacity says a bad example, Buddha. It's got full capacity. So you add route reserves you just add like.
That really add extra gold.
Yeah.
Does it make sense.
Can we move.
Josh you're going to say something.
[laughter].
Covered.
[laughter].
[laughter].
You always a pool of wisdom.
So.
Should we go to the is there any questions from the fine and side.
Once again if another question. Please press Star then one.
Our first question is from Chris Terry and Deutsche Bank.
The hallmark and thanks for taking my questions.
So two quick ones just in terms of the overall asset optimization, you've talked to read about.
Projects, where you can unlock value now that weve completed the asset sales or care Golean Massawa.
From here she can't get the value you're looking for and any other assets are you comfortable that the portfolio is what it is or is that still something you're working on around the edges on on the onus on a couple of the assets. Those muscles question and then just with the 10 year plan just to prepare for a little bit is the order that you that you shows a production.
And plan over the over the team 10 years, but you're also going to give a should we expect a lot of detail on some of the some of the somebody else's worked on one et cetera or is it just focus really on on the production side. Thanks.
Okay. Thanks, So we're not going to put done and then because we manage the 1200. So we're not we're not changing the rules and this way showing you that we've got visibility on the runway.
For a 10 year program and they will might well be opportunities that we will highlight but they would need to be opportunities that make it at 1200 dollar gold price so that that they there. The optionality is is what it is and will leave it there and thats why its important so.
We've read on all our resources, we can assure you rod signed off on them. They are proper mining shapes in a proper mining plan. So it's not just geological resources evenly and third we look so so if you look we also changed the grade at.
Okay.
At a formal.
Initially form out it's a bridge has a classic call and richer such very high grade that phase.
Or could shapes not Marvel at all so we put in the mine stopes, the plan and sort of conceptual subs and then we'd diluted it properly. So that we know we can monitor them. You know provided that we can pad drilling continues to deliver all those ounces are in full third all day or Rob So.
There's work to do but at least that's how we've always done things. So that's why you don't get big surprises when you do it properly so so.
I think as for me. This is right now is to really sweat the assets. We've got worse the management team and it's another major hardware that we really understand.
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Mineral resource and reserve base.
As a management group and then we'll look at other opportunities.
The second question was.
But just.
The other question is just on the overall with the pull site.
So overall and whether you want to be willing or anything else you're targeting just talk through the thanks.
So.
Right now all our assets are producing making a bottom line comp contribution after everything so.
But they're not all tier one as you can imagine and we are very.
Very focused on Oh.
A building an ice cream company.
And so but you know the market as a but.
Over supplied at the moment was opportunistic sale.
Options. So again as I've always said, we are well first of all we don't do this publicly.
So we're very mindful and that's why we were able to to really build a transformational transaction with teranga.
It was a lot of work because we really see our host countries as an integral stakeholder of our assets and and so we'll continue to work with them.
And and and.
Seek or respond in most cases now to response to interest.
Other than active marketing and as you say.
We don't have to sell anything or the copper assets are.
[music].
They produce their country or 10% of our bottom line. This this this last year.
But they're not in any way you look at as they're not tier one assets, but there are profitable assets, Oh wait and we'll work with those a lot of them are just peer copper assets rather than gold copper assets too. So there are a bit in the fullness of time, we'll get there right. Now you know we've we've had a phase of a lot.
Permanent.
Reinvention and ready our describe 2020 as a as a year of delivery. We've got a lot to do to bolt on the foundation that we've said it's much harder work and the next 12 months, then there's sort of more flashy work that we did last year.
There are no more questions from the conference call.
Thank you everybody else want to question.
Cup of tea is quite a boring processes and back in London, we used to have loss of one.
Working on it.
But join us for a.
A cup of coffee and tea on.
Loss of Orange juice and anybody wants to ask questions. We've got as you can see some of these initiatives.
Two types as Christians, Thanks, again for coming and for your diligence and the thing through this presentation.
[noise]. This concludes today's conference call.
Should you have any additional questions. Please contact the Barrick Investor Relations Department you May now disconnect. Your lines, thanks for participating and had a pleasant day.
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Mm.
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Mm.
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