Q2 2020 Barrick Gold Corp Earnings Call
Hedge and.
That our wells was about two changed fundamentally in a way that would impact every country.
Every institution.
And every person on the plant.
The novel Corona virus that are stated on us without warning.
And as yet we cannot number the lives it'll take.
Or picture the social economic destruction. This unprecedented event, we're leaving us wake.
In hindsight.
The merger of Barrick and Randgold could not have been more prescient.
For its creation of modern fit for purpose smiling business that is not only continuing to fulfil our promise.
Of sustainable and superior value delivery.
But has also provided us with the mindset and the structures to combat that a pandemic.
This is enabled us to buffer impact on our people and our operations and as you can see from these results. We have not only continue to meet our targets, but also continue to advance our strategic projects.
And in the spirit of partnership.
Which is at a very hot other very culture, we have provided much needed support to our hosts communities and countries in their own battles against covert non team.
We will continue to do so.
I refer you to the cautionary statements app on the screen.
And it is also on our website should you want to review it in more detail.
As already mentioned.
To the effectiveness of our co the 19 response.
Has been a management structure, we introduced after the merger.
Our flat agile and decentralized structure across the group.
Now, let us to proactively and implement a broad range of preventative measures at all Alsace.
And are immediately engage with our host countries.
We provide timely assistance to sort of price the spread out the virus.
Barrick's traditionally strong focus on health and safety ensure that it was well equipped with a comprehensive means an efficient systems.
To contain a virus.
Among many other things Barrick has today provided more than $20 million to help the hard pressed health authorities and our communities in our host countries.
As we continue to demonstrate.
Mining companies can be a major the fourth for good.
In these countries and through partner to their governments.
Within our operations various journey to zero harm continues to make steady progress.
And in quarter, two we reduced our lost time injury frequency rate.
By 16% and more importantly, we are you looking at the slot it's the train that matters.
And we also have seen a decrease in a number of total injuries.
Similarly.
We are improving our environmental record to ensure that we are building a business.
That will be acceptable to future generations.
So far this year.
There's been no class one environmental incidents across the group.
Our CEO to emissions have been reducing add our water reach reuse and recycling is improving.
By eight of this year, all airlines will ever achieved the ISO 14000, Onetwenty, Burkina environmental management and certifications.
Our commitment to high as GE standards is also evident in our support for community development and projects.
In addition to the co that 19, a we are providing we have invested almost $9 million in these projects year to date.
And more importantly, we have spent over $1 billion to support the local economies through the purchase of goods and services.
One example of these development projects is a scholarship fund for Native Americans in Nevada to which Barrick has committed a third a $30 million over the next 10 years.
Bringing our total investments in this project to $26 million and ensuring that they is.
Bursary funds available for our Native American partners for the next 30 years.
Operationally.
For the Cortez provided may highlights with real delivery on many fronts endorsing our vision of the new Barrick capabilities as summarized here.
I'll talk you through the main points in the course of this presentation.
Anchored by a strong performance from our tier one asset portfolio, notably, Nevada Gold mines, Loulo, Gounkoto and Kibali year to date gold production was 2.4 million ounces, which means that at the halfway.
Mark we're well on track to end the year within our guidance range of 4.6 million to 5 million ounces.
The recover portfolio also posted strong results with production in the upper half of the guidance range and costs trending towards the lower end.
Capturing the benefits of higher gold prices.
Free cash flow increased by almost 20% to more than half a billion dollars.
Adjusted net earnings per share rose to 23 cents well ahead of market consensus.
This result is a stellar one given the Q2 is that a quarter, where we usually settle a lot of our cash taxes and interest payments.
Debt net of cash was reduced by nearly 25% to $1.4 billion from the end of the first quarter.
And on the back of this strong performance.
For the quarterly dividend has been increased by 14% to eight cents per share and has not doubled since the second quarter of 29 team.
I'm also pleased to confirm that to date, our non core asset disposal program has delivered on our target or $1.5 billion.
With 1.25 billion of that 1.5 billion being written received in cash and erased in equity.
And this process is continuing.
Turning now to the operations, we started in Nevada, where a pandemic accelerated the integration of the Nevada Gold mines operations.
Strong management delivered to the bottom line despite the crisis.
And the support provided to the communities counties and the state reinforce the partnership principal and demonstrated mines key role in balancing Nevada's economy.
So the combination of call and Goldrock has provided processing flexibility and geological opportunity.
Production for the quarter was down as expected because of plant maintenance at the goal.
Goldstrike Rosa, partly offset by the increase of higher grade Cortez or pros is part of the Carlin Rosa one other synergies captured by the Nevada Gold mines joint venture.
Incidentally.
Recall, an open pit truck drivers worse, it accounted to shuttle employees at across Nevada Gold mines dispensing with the need for buses as part of our social distancing measures during the initial early lockdown.
Period other pandemic.
We're still defining nevada's full potential through the integration of exploration mineral resource management and mine planning.
But it is already evidence that the current train holds significant progress for resource growth as well as new discoveries.
Another of high priority targets are being tested.
With the North legal project recently, delivering the best intercept to date of 21 meters at say five grams, a tonne there more than an ounce per ton.
The exploration team is really making good progress in advancing other programs and revising the models and priorities.
Over now to Cortez, which did particularly well topping the previous quarters already solid production and others.
What is hills underground continues to outperform with an improved efficiencies supporting mining and a higher rates.
The the gold Rush team has also now being integrated into the Cortez organization.
The construction of gold rushes to an exploration declines is also now ahead of schedule and the transition from a contractor to owner operation has been brought forward to the fourth quarter of this year, that's about a six month.
Forward, bringing forward. The project is scheduled to intersect first or in the first half of Twentytwenty, one with permitting expected later that year and so to 80 to 81, we'll focus on validating the assumptions in the feasibility.
The study, which is due to be completed in the early part of next year.
So it's early days.
Casing, the geological extension at Cortez Hills underground, notably the portfolio the handset unfolds as showing out a rock and diagram intersection across a problem in the left hand plan.
And.
This is.
Certainly indicated that a potential for life of mine extensions that will allow cortez mine to maintain its tier one status even before the contribution.
Gold rush.
In the meantime.
Barrick nearby form our project.
Which has not yet being integrated into the Novagold bond portfolio continues to report very significant drove results.
Earning a higher grade of the mineralization as well as four miles exciting potential.
The model update is underway with updated resources expected at year end.
At Turquoise Ridge.
Construction of the third Shaw remains on schedule and within budget.
Commissioning as expected in lightweight eattwenty too.
The current focus is on continuing to improve underground efficiencies getting a beta understanding of the all body and the geological model as well as driving the optimization of the mine plans and processing facilities.
Of all the operations that are turquoise Ridge complex, which includes the legacy to increase has been one we're happy to put extra effort into and consequently, there has been further leadership changes to accelerate this process.
This complex offers the most significant additional near and medium term opportunities to Nevada gold mines.
Elsewhere in Nevada, Filyk and long Canyon, both operated within plan and our training towards the higher end of the guidance.
On the subject of Nevada. The state has been hit hard by a pandemic given its reliance on gaming and tourism.
We have recently worked with the governor and the legislature to deliver advanced taxes to support some other states needs in the medium term and we continue to engage to help with longer term solutions to the state's funding challenges.
In Canada.
Hello.
After the teetering on the verge of closure for 10 years now you will recall that the mine was subject to a rigorous review, which was used to introduce our new approach to mineral resource management and mine planning.
That attains plant.
Underground ore being de bottlenecked and the mine has transitioned into an underground contractor mining model under an energetic and motivated new management.
Production from the restricted and revitalized handler is on track to achieve this year's guidance, although costs or training higher impacted primarily by higher gold prices and a higher net profit royalty.
[music].
One more challenging year lies ahead of us at Hamler, but beyond that the mine should be looking at a 10 year runway with potential upside.
And.
This potential upside at Halo is significant.
We are growing our geological knowledge of the area regarding the models.
To find new targets with a potential to open up new mine, France, and requiring additional Ross.
Our aim is not only to escape it stayed in iron ore bodies, but you'll find new ones.
District scale exploration well beyond the current no limits of it always has started at handler after years of in activity.
For field work is underway on areas of interest knowing those to coincide with gold mineralization in and around the existing operation as well.
In the Dominican Republic.
Further vascos production was that impacted as expected by a total blobs maintenance shutdown.
And.
As Ed.
Operations higher royalties from the higher gold prices also took their toll on costs.
With major shale, you'll agents now complete for the year.
Production should return to normal levels and the mine is working to get back to plan in a second half of the.
One of Barrick.
A key strategic projects is the expansion of the plot and tailing facilities at the required logos joint venture, which is designed to extend the life of the line into the equation Fortys.
The environmental impact assessment for the plant has been submitted to the authorities and orders have now been placed for the long lead items.
Field work for the baseline environmental assessment of the additional paying taking capacity essential to the support to support the mines lot extension has started and constructive discussions with the authorities regarding the permit.
Looking are well underway.
The project implementation strategy is based on committing 75% of the actual construction subcontracts.
Two Dominican controls contractors.
Following the recent elections that a political uncertainty in the Democratic Dominican Republic has dissipated and the new president will be installed next week.
His government.
His business and mining friendly.
When I visited them recently, he assured me, we could rely on their support for the project and together.
We are looking to grow the mining industry.
Based on responsible line.
In the meantime.
We're also exploring exciting new opportunities both within the joint venture lease and outside the lease area.
Belterra in Argentina.
The only one of our minds with operations were directly hit by the pandemic.
A mandatory nationwide quarantine imposed by the government was followed by a particularly servier.
Well the production for Twentytwenty is trading below guidance at slightly higher per ounce costs.
Open pit operations will hold for 70 days.
And then we'll assume that 30% or capacity for the 23 days.
With personnel restrictions expected to remain until sort of Teva that a pit is currently operating at around 85% or capacity.
Construction of the Leach pad expansion project.
Also started at the start of the quarantine and the onset of winter delayed further work for some six months.
Additional resources will be remobilize at the start of the construction season.
Accelerates the progress of these projects construction of the power on from Chile was similarly, how halted and we are now replaying the project.
But at the same time, we intend to give priority to the basic leach pad construction.
We expect the commissioning of the power line by end of 22 81.
The remote out Asian over the project teams is also their opinions on the easing of government restrictions relating to co the analogy.
Remaining in the Andy we continue to explore along the perspective El Indio belts.
Ill trousdale common that controls to high grade mineralization.
Our being investigated in an effort you at AG far more.
At the same time.
The scoping level economics are being updated to determine how base to bring this project to workout.
As far as Pascal Allama is concerned we are working towards a new geological model with resource updates expected in Twentytwenty one.
In Papua New Guinea as you I'm sure all of your way, we replaced over on care and maintenance after the government decided not to review our special line lease license.
We believe the government's decision was taking without you process and in violation of the law and the math is now before the court.
We continue to argue the merits of the benefit of sharing scheme. We proposed in 2019 and revised recently and we continue to have the support other land owners that are communities and civil Society.
And given the uncertainty on the situation as previously announced I'll just remind you we have withdrawn guidance for this operation.
Now over to Africa, where Loulo Gounkoto current quarter delivered as usual solid performance and is trading at above plan.
Our again higher royalties impacted the cost per ounce.
Quarter underground project, which will provide a complex with its third underground mine is on track. It started development towards the end of this year.
And further extend its life by continuing to replace.
It's depletion from mine.
Exploration across the Lula District has confirmed extensions to the transfer zone at urea and so that the Loulo three system remains open down.
To prospective new car rentals, one to the south of going quarter Essakane within that about Bargy joint venture in cereal have also been further define this quarter with encouraging results from drilling and this will be a focus will the team and then you feel season.
Following the current rainy season.
In Cote Divoire.
Tom One was on plan for the quarter and is on plan year to date. The focus today is all about extending the mines lot through the discovery of extensions and satellites. As a result, we are considering a plan to trade lower production profile.
For a longer life of mine and will significantly added value and optionality, especially giving the current higher gold price.
Tom is also located in in yearly permits and how you can see where we are exploring new car rentals for opportunities to further extend the life of mine by identifying some new and exciting targets within hauling distance.
Of the processing facilities.
But across to the eastern part of Africa Kibali in a Democratic Republic of cargo continued to deliver consistent results is also tracking ahead of plan.
The mine is well positioned to replace it strategic reserves this year and still boasts a wealth of breeze resource growth opportunities.
And then further east to Tanzania way.
10 years still work in progress as we rebuild assets and relationships destroyed by Acacia.
Not at the team has made significant progress with this endeavor.
No Lora is fully operational again, we'll put adoption of our plan.
But at cost slightly elevated as we work to address the issues, we inherited which I have no doubt.
We will correct.
Returned drove results after coda.
I have exceeded great expectations, indicating an extensive upside potential beyond the existing drilling learners are the underground development.
We estimate that current targets have the capacity to replace depletion this year and the next.
There is also further potential to add an additional cutback Jana pets.
Is this is also open at depth below that of pets.
If you look at the side on the left you will see.
Hi, guys.
Green square with the cobbler dots and that's a new kafir targets and.
Initial scout drilling at this new targets to the which is located to the west of the current pets as shown here. Our aim is to extend that it could occur system by approximately 500 meters west of the current known mineralization systems.
It will you underground, which is be on care and maintenance for sometime now the team is doing a great job of re commissioning and mine.
Shop refurbishment is due to start later this month and we're on track to resume processing underground ore body eight or this year.
But as long as focuses on on the hand is on the other and is all about optimizing throughputs and managing the stockpile protesting right.
I'm also pleased to confirm that following the signing of framework agreements with the government or Tanzania, and our today all the stockpile concentrate has now been shipped with around 30% having been shipped during the second quarter.
Also the first hundred million payment towards the settlement of the legacy disputes has been paid to the government as you were seen in the press.
Overall central and East Africa are happy hunting ground for ice operation teams operating many opportunities for resource replacement as well as new discoveries.
Our teams are active both in eastern DRC and throughout the Tanzania, and Goldfields building on our knowledge and expanding our portfolio.
As I mentioned any entered into part of this presentation.
Copper lines, all had a very good quarter.
The one opposing its best production and cost profile in years.
Levels I eat trading at the top end of it scars and zaldivar, although impacted barcode or non gene still delivering a very respectable performance.
In conclusion, ladies and gentlemen.
Looking back over the past year and a half.
I can report at all the opportunities.
Created by the merger and subsequent transactions have been seized and more heavy hot and involved.
Our existing asset portfolio supports a 10 year organic production profile, which distinguishes us from the rest of the industry.
Our exploration teams recently strengthened by the newly created positions Abbas Presidents exploration for Latin America, and Africa, and Middle East continue to scale the globe for the new opportunities that will sustain us.
And build our business into the future.
And finally.
As shown on the slide.
Very share price performance.
Reflects our ability to successfully deliver on our mission statement both from the time of the Randgold merger announcement.
And the current year to date.
Outpacing both for the goal for us and our industry peers.
Again, ladies and gentlemen, thank you for you on occasion, and I'm happy to take questions and as you would have heard let's start or this presentation I have the barrick team on the line as well so we need a quarter name to expand on any of your questions. So operator.
Over that back over to you.
Hi.
Yes.
Okay.
[music].
Yes.
Okay.
Yeah, Chris.
The big thing as.
Settling down the operations and also our biggest challenges is constantly reminding the communities and our host countries and states governance that coders Solaris note ever do when we started as pandemic back in February and that we need to maintain.
Profit discipline protocols.
And so you know the real risk.
As we've seen in North America, particularly and in Europe, and recently in China. The spark sale badly come from time to Tom and so.
Is making sure that we are.
Obsessed about protocols and we are now we now have testing capacity rod through.
Different organized.
Organization out over the operations, we have sponsored PCR.
He is plus rapid tests.
Through all the countries the Operatorship North America, which is U.S. in Canada. So mining the approvals for those very rapid test. So there is and again the response to a pocket oil is at risk.
Ratios I think we demonstrated I mean, the others, Chris is Argentina remainders, because we haven't had a positive case up invalid era and what what we are working with our state government and the National government as you go to get your head around the fact that you are going to add infections Italian.
Managing that an importance and the fact that you can limit the our factor effectively.
America. It came in a little later, but again, we're we're very proud of the responses from the host countries and as you know, we very well connected to the health authorities right through Africa because of the a bowler challenges.
And then apart.
In fact against malaria and other tropical diseases.
And really Barrick.
Community.
Management teams class health authorities are really an extension of the regional health authorities and so we'll be able to really supports the ability to taste quickly and and we'll be able to really deal with a few spots recently just.
Yeah. The weak we we did a complete test of our entire workforce in Kibali for example, and the other thing that is an important other people ask me so mark.
Well what sort of response are you getting from their communities at the heart you are continuing to operate and what we we have demonstrated is that for its a very dangerous thing to lock this virus away, particularly in the developing world.
Well, you don't have capacity and people go back to small dwellings, and I'll take the bar in the same as with Loulo Gounkoto Tongon, we able to monitor our workforce our workforce goes back into the community every not we can and we do have been a capacity and we do.
You actually do it if we can.
Yes, the anti levels and therefore, we got absolute visibility to the community around our minds and so that concept is something that really been.
Accepted by our host countries and so far I'm very encouraged about the responsiveness across Africa and the way. They the virus is being made sometimes even better inside of the more developed countries. We operated but that's what it is this.
Viruses the save ourselves in February when it first arrived it requires a real paranoia to manage it at a we we have a concept fleet everyone is labor that of ours.
And then work around it and that's how we do it again and again I think everyone of our management teams have excelled and prove the the effectiveness of flat.
Corporate structure and are the agility, we've created by ensuring that we have executive authority on the operations, but yeah. That's viruses unprecedented we have to manage it every day.
On the logistics I mean, we are investing team has done an amazing job. We were in February we started increasing.
The the Oh stores.
Consumable and strategic items.
And we've we've got a three month.
No inventory, we have made a couple of.
Motor breakdown and that during this last heard you see a result of it because we have been capacitors eating and the strategic whereas you manage these prices interruptions, we do all the time. So we haven't been impacted at all we did bolden alternate supply routes we.
Shifted for instance, the purchase of steel bowls.
From China to Europe, and then back to China again and.
Our team is very minimal.
No.
Inflow part of our business.
Yeah, and all our projects are on track except for the Argentinian projects are associated with you earlier that and the other thing I would leave with you. Chris is this the our strategic objectives are on track as well things are our commitment to change the you know the demographics.
Well I meant to to seek.
Much bigger growth of.
A much bigger focus on employee younger people and and enable an article in our report which greatly expands on that.
Human capital strategy to Q to ensure that you know our commitment to people that are most valued mining business is not just.
Cheap talk it's a it's a genuine.
Strategic plan, which we measure against.
Thanks.
So this autumn actual correctly.
From a strategic point of view, where you stand today in my understanding Tongon.
Anything else reminder.
Our goal brought them at this point, you've always talked about leaving or that brought us inside and from a corporate goal perspective, I'm, giving you don't want to operate on Progressors, you're comfortable where is the quality to start rolling it out you get away. So song on strategy commodity mix crossing et cetera.
Just wanted to Gary Gary also not sure.
Oh. Good example.
The team again is on a regular job of a more resources, we have already with the.
Finally, feasibility studies, but everything looks Soc us being able to.
To extend talk on lot originally it was going to produce.
Your next year and close.
But thats.
That's not.
Not the case anymore, and we are looking to.
You have a slightly lower production profile next year, and then run for another four years or three or that about 180000 ounces and then.
And then we still at appointed.
All these opportunities, we really started to crack the control around.
Turning on and.
As far as mineralization goes we're still managing on a 1200 dollar gold price. So we need to the business to make money at 1200 and analysts profile and so we end up with more ounces slightly lower production rate, but for longer and I cannot say the.
African and Middle East team has done an excellent job and in beefing up its profile going forward and.
Talk on is the classic opportunity, where we can benefit from the margin at the gold price or others. Because we were against closed and 23 two in US open in two parts to eat away for.
And we got more that we can add to that process plant, which is now no not at full capacity it generates more revenue Utwo hundred dollar gold.
Creates an additional optionality the other opportunity we have the gold prices in Nevada, as we but again the team is continue to to find.
Resources and convert them Andrews reserves to keep our.
Processing facilities full.
But as we move more and more underground, we do free up some capacity.
Oxide bowls and of course, we got the heap leach opportunities, where we can also.
Increase the stacking of slightly.
Great but.
Scott good mentality and sellers, we own and we have a little bit of capacity at Kibali, but we keep we keep pulling it with a full gray or so anyway, we can benefit from this goal bras.
Other than a gold price itself is we are going to change.
Our reserve grade a gold price so is to be able to accept.
Lower grade material to full available capacity and we.
Today, we have some in Java and there is on that could materialize in the future.
As far as.
M&A, because we are very clear and I mean, we prove this back and you are right back into the.
2009.
Last big rapid goalpost, the right financial crisis.
Well there we intend to remain very disciplined on yeah. The 1200 as the U.S thousand for me and and M&A of course, we will pursue an M&A it our strategy to M&A or the changes at about the quality of the assets that are targeted at is we are not.
Thank you increase the M&A activity on the back of.
Bigger gold prices that that is that we ignore the revenue side of our.
Our models when it comes to M&A wanted to see where the then a opportunity delivers assets that can survive the full saket kalla geopolitical bras and.
On you know on copper Arctic we demonstrated.
Our team's ability to turnaround a massive capa very low grade column on and in Louisiana, It's going extremely volatile environments.
And and our strategy as we shared with the market a investor day last year. A is that we recognize that you know to remain relevant in this growing global markets. We continue to to at least replace what we.
So on and more importantly grow that opportunity with quality and our view is edge.
In that endeavor, we are bound due to find a pull breeze.
Gold copper porphyrias that that will deliver on our.
Part of holders and it would increase the amount of cava that we mine and we've also say that we would operate.
Take on a copper portfolio should we be able to exploit benefit from that strategically and the other thing I'd say, Chris is the importance. This worlds the mining industry in this world needs to reinvent itself I think you can you've seen a gold industry take.
Lead.
Post the Barrick merger with Randgold and then the newmont.
Correct consolidation of Goldcorp, and then a subsequent transactions in Nevada, and and in us taking acacia products and Sala.
Correct.
And with great.
Industry looks a lot better add is definitely delevering back to its shareholders with a higher gold price.
I I hope that.
Yes that will continue with that sort of London actually deliver value back to our shareholders in this sort of economic global crisis that we find ourselves.
Okay. So corridors. So also from any market oriented.
Good afternoon, Dan Donlan, Oh, sorry.
Just wanted to your comment on whether the fix.
On a go forward role, where you say that.
So.
And I pointed out we've already made 1.5 billion dollar value the leverage by.
Bringing joint account non core assets, we will continue to do that.
And then donors are not key goals opportunity it's definitely.
A very large resource.
We have we understand the economics of it we win win with the changes and Merrick, we got much more involved and and we is sitting at 1200 dollar called out review last year Guy, but about a 9% IR our when we look at.
Project, It's got three.
Sort of risk baskets construction risk because of its location.
The capital risk.
Because it's a very large asset and it's.
Moderate grade, but in a in a in a in a challenging environment and then which is always the case, it's the geology risk and that's something we can de risk and so.
Our engagement with no gold was let's really get down I put the best of our geologist both sides into this project and employee some really quality skills into Darden and and then.
Take up the geological risk because once we have a clear definition of the reserves and more importantly, the shapes of the ore bodies, we can't name set with confidence the mining plan and more broadly that the rate at which we can mine which of course will.
But the amount of goal that we can produce on an annualized basis and then all the raised is.
Is able to be measured against that and so that state. Your return you know once you get the amount to the goal you could reduce costs. There's that's the basis to determine the returns you can all stakeholders and then it.
Variable is the actual goal for us at his goal process, you know very valuable assets.
We still adding value to it and you would have seen the first announcement out of darden as dominant because obviously that way no golden bearing should be focusing on is is done it as a as a standalone business, we happen to be shareholders.
And we'll continue to draw that is the biggest drilling project that we've.
The Darden Cboes I'm, Tom as you know, we and Barrick our geocentric, we're obsessed about taking out the geology risk and and we got probably another follow up early next year two to test the model that we will that this drilling program, but we will publish this year and b.
For the the winter season, and so and then we'll we'll we'll take it from there.
Weve it definitely right now as it is a key.
Project for the Eric and and very valuable today.
Like our.
Our next question comes from Jackie Petoskey BMO capital markets. Please go ahead.
Just a follow up on the only comment Mark.
The mdna he talked about having achieved the 1.5 billion value realization, but you didn't say, there's more to come and comment on that.
Instead of looking at non core asset sales.
In the near term I guess Oh.
First question. Thanks.
So Jack yes. The answer is yes, yes, yes, so I mean, I think what you.
Yes, it is $1.4 billion or talking to people sort of right. They are out of it.
But.
Two big drivers on that is the 730 million dollar cash payment, we received last year of Calgary.
Today the value of the most our transaction is just on a $500 million.
We then clean up a whole lot of.
Non so equity positions our ownership of small projects you know bag, one sabres investing in juniors and saw answer we tighten that up and I think what it shows is that every dollar is an important for this barrick team.
Is there were lots of transactions we done.
Sort of 510 $30 million tying up the portfolio as you would've seen we recently.
We entered into definitive agreement is cocaine Creek and again, we believe that deal will continue to add value or a big shareholder in that project and we'll we'll we'll manage our way out of it are there Tom.
And we saw others to do there's a lot of work being done on how closure sites.
We changed our closure strategy to too close to work engineer aside to closure rather than try to kick the ball down.
The road or the can down the road.
Just remain in compliance.
And as we do that we convert a liability enjoy an asset and we are able to bring into account as you know as you would imagine the higher gold price.
Turns out about smaller assets within our portfolio into something that's quite attractive and and we have number of those and so again name hartwell prove to be the sort of foundation for start up initiatives and I'll just point out there.
Randgold is.
Yes, 30 years ago, and so and we are always supportive.
As far as.
Entrepreneurial developmental opportunities. So we'll continue to do that we have other assets in our portfolio that again, we would we would want to bring to account and.
And at the appropriate time, and the golds dominant assets have.
At a much bigger value today than they they had an even at the beginning of last year. So you can look forward to more of these sort of transactions.
Yes, that's really helpful. Thanks.
I'm sure there.
Closure reclamation inspiring.
I came from and he has he been second tier.
Okay.
If I could ask on me on the sale then Shangdong home equity in home.
Nine shares approximately Rooney.
She played a key and Conversely.
We publish and our R&D planning is the older their shares for them. So.
So we work.
Uhhuh debt.
When it was.
Let me.
Reasons for it you know there was the IPO, which we supported and ER and Shannon coming.
Moving into the international routes.
We know, which we were able to support and also they were supportive of us in a time when we were working towards the merger between Barrick and angles and at the same Tom as you know in partnership down in Argentina, which is really.
Just on it too you know to really.
Sure merits.
For for US, we believe we had fulfils.
Our role in that process. We are we have retained I.
Core investment with them and and we have notation offsetting those shares certainly in the in the short term or even mediums.
But you know able today, our businesses are deploying how Ah onez.
Capital to make a returns we are not passive investors by.
By nature all through strategy.
Again.
However for their advancement and in America that kept on it they have done very well, but staying with it.
And you know our liquidity is such that.
The they can sell at all by anytime they laugh, whereas for US we are told us specific role and we worked with them to creates a more liquidity through their sort of offshore the Chinese also.
Structures, and we were able to bring in a shareholders and again those shareholders done very well out of their transactions.
I think again partnership and the way we work together to realize value for our stated bonuses.
It really underpins the partnership that we have a chanel.
Got it thanks, Thanks, and one more question now.
Thank you talked previously in any Oh quality and then pushing you have way.
Yes in terms of cash repatriation is it possible too.
On on how concessions along.
Extremely well.
So just some background here the treaty 18 moniker sort of shop that upon everyone.
The change in government and we've engaged with that manages the complex engagement and because of the coalition that is you know the fan the sort of underpinning that government with a there could be affected section, having more ministers than the charity care infection.
But in the fall is our Tom is you know Weve. It took a long time before going to Cabot there've been some changes on both sides, but it's a better working government today than it was even a quarter ago.
And again, we've as you know we were very engaged and vocal around the 20 AG mining code and and is being deferred ways to interpret.
Repatriation of excess cash and.
And Kibali.
Really.
It makes it a barrick makes its business to comply with legislation and so that one of the changes was you had to repatriate 60% of your goal revenues back into the cadre of course into a U.S. dollar account, which is important.
And even after the penetrating that 60.
Palisades, we weren't able to spend all 60.
Or percentage of the repatriated fine so we crew.
Our cash balance in country, and we still are paying off the capital in.
In Kibali and also we have.
Settled on a.
Dividend strategy before capital the full capital amount was redeemed, which will benefit both our partners Akiva and of course, the carbon free withholding taxes, and so we set out of the government pointed out its useless keeping as money and.
NDRC does it it doesn't drawer interest it doesn't help anyone whereas the sooner we pay our capital of them quicker, we can revert to full dividend repayments and and we take away a cost on the income.
I'm segment as well everyone understands that will want to do it any sort of.
Purchase process, we wanted to do it under the proper regulations, which which we believe our embedded in the mining code and so we had to work to tie ups out of the wage we have Oh, we have approval now from the government and the Central Bank to repatriate, It's Israeli now just.
With the the paperwork and at the same time, we'll be working with a part of the main free.
Subcommittee just tying up the legislation so that.
That that the sort of transactions can happen in a normal course of business.
And I just want to point out to everyone. The dollars are in the U.S. dollar Baker cabs, and and there and there's no.
There's no question about the they belong to Barrick and Anglogold <unk> costs and we are you know we've taken some time because.
We were prevented from doing much.
Because of the delays in finalizing the cabinet, but now that once government. It was probably settle we were able to get to work and.
Yeah, we're right at the cost of this happening.
Okay. That's really helpful. Thanks, very much on it.
First question thinking.
Our next question comes from Josh Wolfson at RBC capital markets. Please go ahead.
Thank you Robert.
In order to gold price today, or something like 700 above your searchinger.
And over 800 to learn about your long term private fashion.
Probably provision to be net cash.
Net cash position and around year end generating more than three during our free cash flow.
When you when you look at the company launch now looking at M&A side, how do you leverage this higher side that you're you're currently experiencing today from the gold price without compromising the company disappointing, which became very very clearly that obviously doing right now.
So Josh.
First of all the way you do it is if you don't lay O'brien.
Like when it happened the to the industry.
Yeah.
And the 2000 to.
2010 to 2013.
So thats the first point.
Secondly, we voices that we would adjust out dividends on a sustainable basis.
And then when it was required and you'll see that we've added another say into the core de lever in already and we will reconsider that because if I can try to explain to you.
Our objective.
We haven't changed our strategy.
And by the way we are managing 1300 dollar goals our budget was.
The plan that OIBDA 12, it's it's it's measuring.
The performance of the teams, we got to keep rising gold price, we try to keep it was close to spot as possible channel. We've had is as part of the be moving faster than we can.
How about just reinforce we still allocate capital of the 1200. The budget number is only for US you forecast revenues and and Youre prediction is correct. You know if you take and if you take.
The various gold prices and we do run models now we've got them up to $9900 gold and we look at them. So that we the objective is not wasting money and retain the dividend I mean that as a blend of.
Protecting our margins.
So that's.
Then step back and say what do you have to do that at first of all what this is what is happening today is effectively fast forwarding. The barrick strategy of widen July or 23rd of September 2080, when he shared with the market our vision for the Barrick Randgold comedy.
Agent and this coal prices down two things.
It's fast forward that whole strategy and it also allowed us to work through some of the riskier assets for instance, Argentina win win at the beginning of last year was not in good shape that Idera energy diligence quoted.
Make money.
1200 dollar long ago long term goal bras today, we've got a 10 year plan. It does make money at $1200 gold price and with a crises in Argentina has a higher gold price is helping us out of the loss of the wrinkles and that asset which is a very bad.
Able at it going forward and it gives and then of course, not only our opportunity and so the same with Nevada is that you know we changed some of the open pit shingles.
Beginning of the.
And then change them again were covered.
It's given us some flexibility to to manage that.
Combination.
And and also to settle everything in a lot later that makes sense you. So so Nevada is now going forward you haven't seen savi.
The gaps that we close because the goal process has eased up over those gaps.
Is the same what.
Well talk on it's Gary gave us some breathing space again, we haven't changed the 1200 dollar test, but its given us angry breathing space and suddenly archaeologists are starting to deliver additional opportunities there so and again.
If you got in all four of which is you know the biggest sort of.
Workload right now in Barrick again is.
This raise gold prices just helped us scale way.
On the back of our promises.
We made use of the market editor, Tanzania government and and so the you know the concentrate was sold at a much higher process, which it was produced and so we were able to settle at hundred million dollar first payment to Tanzania, We got a bigger stronger Tanzania and balance sheet.
Because of the better revenues, we got from the remainder of the concentrate and we've got a capital profile. There that we can manage so we're able to manage that business on an entity with itself regenerating a cash that we require to invest in the.
Rehabilitation for instance of that abbreviated underground so that's what we using the this process demanded just as we did with Randgold resources you recall in 2010 11, we had our biggest sort of capital tomorrow, and we were growing some debt.
And where it really helped us out of that position and and settled us into a foundation that really allowed us to keep growing really in a report if you look at the the dividend strategy, you're already got a nice steady increase profile and so.
Again already today because of our delivery, we had a beta business base on which to.
Predict our long term profitability honor cyclical bases and and you know I've got every confident that we'll continue to improve a dividend.
Returns.
No.
Going forward as we.
Demonstrate that our businesses are solid and can support a the dividend strategy and then at a point we promised the market. We will get your point order rates I'm sort of a change in dividend policy.
More along racial on or maybe some we have not we had in Randgold resources.
But right now is still a building that business and delivering on the promise, but on the on the strategy, but it's got a happening a lot quicker on the back of the scope for us.
Got it one more question just looking at managing the business through the cycle and recognizing we're probably not a low here.
Okay.
Cash matlin factor, but might be emerging.
Our effective hedging and maybe heading the matter to reduce.
Okay.
Actually already.
It really is that something that.
I would consider extra project and I'm just looking at that.
So you the other night.
Josh.
Why maybe if you put a disciplined and ER and.
Making sure that we own hedge and an expert you're watching us user throw away the discipline do some more stuff because the gold prices higher tire rollout and ER and in hedge so.
So I confused.
But do not confuse you.
Barry strategy on hedging we are not anti aging we believe that you there two times that you hedge when you pull mom.
It's an option available.
The other minor has.
To be able to manage your capital profile, and and I and Graham and I've done. This many times in Korea, and we've done well and we've never had the buyback Guy age at the same Tom.
We do it way, we closing our mine to ensure that we cover the risk of revenues in a in a cyclical industry.
But so those are two situations of course in transactions, where you've got short term risk and you'd and what are the things I'm obsessed about is is exposing barrick.
To market dictation.
It's always want to balance sheet that we can manage our business irrespective of the capital markets. Today, We've got some $6.7 billion of liquidity, So I'm pretty sure where we're going to go but this is a unprecedented crosses angie.
Manager business.
The business in this situation recklessly is not advisory Mama, so that will continue to be conservative.
You know the hardware, we want hedged, but certainly not now.
Great. Thank you.
Our next question comes from Craig Barnes <unk> Key Securities. Please go ahead.
Yes. Thank you Mark comments earlier on about dormant Big project it sounds like anymore solar those products builder.
Just kind of environment.
So Greg.
Yeah.
Simon, saying everything sort of Ross.
Yeah, we also anything as long as we feel that we're getting all the or one of his work or more.
As I said area you know our view is that worst hi activities and all the still adding value. It's a very substantial gold resource the thing that frees me about it is geologically so still statistically as well north of 30 million.
Yes.
We understand the mentality is moderate grade.
The Big question is the actual all body geometry.
The deportment adopted a gold within the ore body and and so far we've done.
We've made huge progress in understanding the controls and recently, we were about 10% into our next phase of drilling and so far we've been encouraged by the slightly higher grade.
That we brought against the model, but it's still early days or another 90% or that will program to finish but you know if you look at dawn Komeiji some of the other assets in our portfolio, it's a pure gold play it fits in.
Mining friendly jurisdiction.
It's just a very challenging geographical setting that's the thing that carries a right. So the way to deal with it as to if you take the risk out of the.
Revenue risk, which is focused on the already.
Okay.
Just.
On your commentary presentation didn't say.
Rich that you had been they focus here in.
Charles you change our leadership team, but also has some near term outside heaters explains it was work going on circles show. So turquoise is a combination of alone sort of medium grade.
Underground mine in twin creeks and in a low grade pets and then the high grade Turquoise Ridge underground as you recall turquoise ridge was always restricted.
Bye.
A toll milling agreement with twin creeks because to increase the.
The.
Autoclave facility and and all the processing facilities. So so now and so the the focus in turquoise ridge on geology job he could control and the ability to monitor high rates has never been anyway, and so we and and at the same.
The focus on the legacy newborn side was also unorthodox throughputs.
And so where we consolidated into operations, where we had a culture they not only the two different.
Causes for the two different companies, but also culture that wasn't obsessive about efficiencies and so we leaned on a processing facility and.
In.
Twin creeks, the autoclave, and we certainly push very hard and and we expose I'm very real bottlenecks at the same time in 2000, and turquoise ridge underground that sort of legacy Barrick.
It where it had some hoisting capacity restrictions, we bought everybody I mean, we've we've largely addressed them. The big challenge, we have there's ventilation and that's the to the number three shop already deal with a few things add more flexibility and waiting capacity, but more and more.
Thirdly address the ventilation restrictions at the same time turquoise ridge was being high grades and so as runway says we run our business is optimized studio body. So we really optimized overlay and that gives lower grades of course, but it will create called on.
The it actually offset with.
Big Armani rights, and and again of all the or the.
Complexes within a lot of Goldman's turquoise Ridge geological geology is leased understood and the complication between turquoise ridge and twin creeks, because the strategic European or controls change substantially across that period. So.
We got to drill rigs working on it we changed the geology, we still and now you've got to try and those are you planning system and Greg just put in a completely new packaging facility the philosophy across to the Nevada Gold mines and this as it took us it's sir.
The progressing.
But the whole model turquoise, putting turquoise ridge complex is to increase the the feed through the order book lives.
And immediately you gave the impact of a higher grade and you can see that in the these results, but it's not where we wanted to be and so as you unlock those bottlenecks you you deliver or a relatively higher grade or you're not hard rating has.
But a relatively higher grade.
And immediately alone cost and so we're not what I'm, saying to the market. It will not there yet and and this is you know the other sort of within a major outages as you do emerging switch to such large organizations.
But this one is the one it's taken a little bit more it's been a little more challenging to get everyone aligned.
And and acting as one team with one mission and so we have beefed up the the management there we've moved the general manager.
Launch.
Very competent GM.
A legacy executive to help US day, we moved some of our base underground.
Leadership out of Carlin underground to give it extra and we brought in some external expertise on the processing side and and and we really I mean holiday with the read with the geology leads from Eric just couple of weeks ago, and we've raised we Megan.
Dollar progress on geology and when.
The increase turquoise ridge had a big gap in its its models and and those are rapidly improving as well so nothing that's there's not fixable.
And what I'm, saying that in the results presentation and and an hour published results is that this is still a very exciting upside opportunity at turquoise ridge, where the others are more now we've we've taken out the big synergy or the run rate synergies not to the bump and run it.
Hard work.
Okay. That's helpful. Thanks.
Our next question comes from Tanya Jakusconek Scotiabank. Please go ahead.
Right.
[laughter].
Okay.
[laughter].
Yes.
Why management.
Situation what happened there Mark So italia, the when we got a head around.
Long Canyon at the phase two around and then I mean over 30 stage in the phase three underground.
We have talked Canyon is it's got a short life.
Had a handsome and the then feasibility study and the associated environmental impact process. We didn't we didn't block that's what we saw and it was resistance or over it.
And that sort of plan was to really came to deepwater the whole compartments.
And again something that the new burgers brought into Nevada, as you don't have to deepwater.
Entire compartments.
On every project and May projects as we go under underground, we reported I hate around understanding the aquifers and they the whole water table.
Geometry, and so there is a wetland.
Downer Valley from a long Canyon.
I'll open aquifers, we believe that you can do a better job.
To ensure that we are impact on its only a short term impact on the on the on the those particular and particularly the water balance is manageable and ER and again too as we do and as always done and has grown believes we.
We reach out to some of the critics.
All of the critics actually engaged with them a shade within that we feel we can do it where we've been working hand in love with the authorities and affairs.
Federal and state.
ER institution that are responsible for other sites on the environment and its.
Impact on it.
And so we felt it was to review and we finish that review and the outcome of that reviews that we couldn't do there's definitely an arrow number of options around whether you reminded.
You learn at the bar into a pets and no underground or you will you replace the some of the paired with a smaller underground no canyon is a very profitable business. They are maybe there's a big community that's supported by the operation in the area.
And so that's what we've done as we've said it doesn't change our cadence and our long.
Long term outlook, it's a relatively small contributor, but it's a very profitable contribute and it also makes sense to be able to monetizing and deliver on our closure plans probably so that's really the in a nutshell, where we all with a long canyon.
Okay, and then maybe.
[laughter].
Yes. Thank you.
What I mean.
So you know this reporter.
Overstepped has sort of reporting glasses. He called me and talk to me for half an hour made things that end asked me about listing and if you look at that Wall Street Journal report and then second sentence is very clearly says that I'd say, we are not considering it all play.
You heard or doing anything about it and today, we talk philosophically about the London stock exchange listing the importance of being in the resource markets, Canada, and New York stock exchange or the two largest.
Public markets.
Company like Barrick, we're very comfortable in Ontario, we have restructured our business in Canada. It doesn't mean to say that we are not committed to the Canadian mining industry handlers Ray deliver some exciting opportunities and we.
We continue to hunt for new opportunities in.
In Canada.
The New York Stock Exchange I know the debate again with a sort of auto was around.
Are they know the S&P and how important is it and again as I pointed out you know how outperformance of our stock is extremely efficient.
In the markets and ER, but it'll be does bring other additions it helps us grow a base.
It is possible to get onto the S&P without.
Re domiciling and $3 are in the U.S. just to reallocate on the S&P that that's a questionable decision because the cost of moving Domino's houses is high so that's the background to the conversation I think he he desperately needed.
Headline what it was not necessarily along with our conversation.
And I think back in my lifetime looking at me down the filing back when I get the active I think after that thanks.
Is that fair.
Yeah at least.
Tanya.
Yeah, Yeah, Graham you want to comment on it I mean, we've looked at.
We looked at it but I I think you're pretty close to that number.
Yep.
Yeah I mean.
Yes, it's sort of order of magnitude, let's put it that way. It's a complicated question. It depends on many factors many assumptions on leasable gold price assumption.
What's your valuations are relative to your tax base, so that more sort of simple answer too simple question, but is it [laughter], yeah, no and I get it England goal of Mac low anyway.
Right.
Yeah I mean.
Got a lot better things to do right now then see consider doing that.
Two.
Yeah.
[laughter].
Yeah I am.
Thank you.
There are no more questions from the conference call.
Right well.
Ladies and gentlemen, again, thank you very much for.
Making the time to share with us.
Our results again.
Ourself and Graham and the team are available to take all should you want to all sorts of exercise really wanted to share publicly we're all available.
As we always are.
It's a barrick is such a good position now we're excited about being able to continue to deliver.
On that promise, we may do back and on that were either on September 2018, and and again the weve certainly not short of opportunities both organic and we yeah. We are keeping our BTI on opportunities outside our current.
Portfolio expiration.
Undertakings.
I hope that Nexstar, we do this it'll be a face to face but.
Having said that what we would like to leave you with is that we are absolutely driven about delivering.
Our Oh strategic objectives.
But on okay. So thanks again.
For catching a sure.
This concludes today's conference call should you have additional question. Please contact the their Investor Relations Department. You May now disconnect. Your lines, thanks for participating and have a pleasant day.
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