Q3 2020 Barrick Gold Corp Earnings Call
[music].
Ladies and gentlemen, thank you for standing by this is the conference operator, welcome to the Barrick 2023rd quarter results conference call and webcast.
During this presentation all participants are in listen only mode. Following the presentation. We will conduct a question and answer session at that time. If you have a question. Please press star followed by one on your telephone keypad.
At any time during the conference should you need an operator, please press star Zero as a reminder, this conference call is being recorded and a replay will be available on barrick's website. Later today November 15 2020.
I would now like to turn it over to Mark Bristow Chief Executive Officer. Please go ahead Sir.
Thank you very much and good morning afternoon, everyone and welcome to this presentation well about quarter three results.
Two quotas know into the car that 19 pandemic.
It is yeah, how effectively all barrick teams have continued to deal with.
With the impact of the virus on our business says a host country governments.
Our employees.
And the communities around our models.
As I Trust two days results will show up in.
In the face of an unprecedented challenge we have been able to beat the earnings consensus reinforced so that's that's cladding.
And capitalize on the gold price to maintain an industry leading balance sheet.
We did not have to change our core strategy to contend with the Corona virus in.
In fact, it was that strategy, although flat structure with nimble and knowledgeable on the slot managers that direct as the pro active implementation of the comprehensive range of defensive match us.
Our partnership philosophy exported that response into our communities and our long relationship of trust and understanding without host country stakeholders.
Allowed us to make a significant contribution.
To our own campaigns.
And there's a host countries campaigns against the pandemic.
I point, you to the cautionary statement as shown on the screen.
This is also available on our website.
So you can see how barrick's didn't guide to that stake holders continues to protect its people and supports the sustainability about businesses.
We have been working with our host countries.
To find appropriate solutions to all the consequential effect does affect self code that 19.
This cooperation has resulted amongst other things and the installation of quite until the K PCR testing labs that each of our sites with the exception of those in North America, where the regulators right tree environment requires.
Alternative arrangements.
In the side you can see how a proactive and considered approach to the patent dance make has paid dividends.
That's an operational level there was a peak in cases in July.
As was seen globally. However.
However, due to our disciplined approach to screening along without quick rollout of rapid tests.
All the operations as well as enforcing strict protocols we.
We were able to not only flatten the curve.
That drive it down.
We are however, all acutely aware that we need to remain vigilant as the northern hemisphere winter approaches us.
Oh lost time injury frequency and total recordable injury frequency rates are at a significantly lower point than this time last year. Despite an increase recorded in this last quarter.
We have doubled down with senior executive leadership on reversing this trend through managing by walking about.
The group is on track to have all the operational models. So do you filed to the outside of 45001 health and safety standard before the end of next year.
Our environmental management also continues to make substantial progress.
And they have been zero Clos, one incidence across the group so far this year.
All outside so also on track to get their new ISO 14000 dead one certifications by the end of this year.
Incidentally its worth pointing out that job all sayiid in Saudi Arabia received its first ever certification last month.
Our water reuse and recycling rights of 82% for the quarter was above our annual target of 75%.
And now power stations in renewable energy sources are on track to achieve the planned decrease in greenhouse gas emissions for the.
New those solar power plant was successfully commissioned by our own team in the midst of the pandemic and as so far save more than 540000 liters all feel.
And almost 1600 tons of carbon dioxide during this past quarter.
They use of solar power will also be increased at the Nevada mines with plans underway for 100 megawatt facility, what's the potential to explore and expand to 200 megawatt facility and then in the near future.
Finally in recognition of this progress capital Finance International has just awarded Barrick, It's too Hot Twentytwenty Award for the best sustainable mining strategy in Africa.
Barrick has provided over $25 million.
Financial and other support to its host countries to strengthen their code that 19 control programs.
Nevada Gold mines launched <unk>, a correction they I I T fund to provide low interest loans to small businesses impacted by Cove at 19.
A model that is replicated in other geographies, including Canada, the Dominican Republic and across our African operations.
We have also launched a partnership with the Nevada Department of Education.
And discovery education to make discoveries highly regarded online learning platform available to schools across that state.
Over and above COVID-19 assistance.
Thanks operations have continued with their community development programs.
Over the same period more than $3 billion has been spent on the procurement of goods and services from local and national supply as across our portfolio.
I bought in mining business needs people, who share its vision and its values and all entrepreneurial.
John I'll.
Alive to technological and societal changes and profit oriented.
That is why and then industry traditionally dominated by white males battery 'cause bolting on employee coal aligned to a changing world.
Barrick has a long tradition of hiring locally for both operation operational and managerial roles rig.
Recognizing these employees are as good as you can find any way and the policy leads to greater team effectiveness.
And workforce stability.
Current staffing levels of nationals in management draws are 80%.
Within a African and Middle East region, 63% in Lat am and the Asia Pacific and 97% in North America.
Barrick has now also embarked on a drive to recruit more young people add woman.
And it's worth pointing out that this is purely on a merit basis.
Also while many other companies rescind the adult canceled University student programs due to co that 19 each.
Each of the regions within the bearing group.
After that and hosted student internship programs, what's the representation of women ranging from 33% to 49% of the position sponsored.
And the industry this quarter.
Net debt was reduced by another 71% from the previous quarter and now stands at $417 million.
Given the strong balance sheet and the free cash flow outlook.
The quarterly dividend has been increased to nonsense pushy at 12.5% on the previous quarter and Triple what it was prior to the image or announcement with Randgold in September 2018.
Looking now T operations.
North America delivered its highest quarterly production for the year and is on track to meet its annual production guidance.
The call and complex produced a particularly strong high margin performance. Despite the extended shutdown of the gold quarry roast for annual maintenance.
The maintenance significantly improved the roast is throughput and reliability and the impact of higher grade all from the open pits also contributed to Collins credible results.
Nevada has no shortage of opportunities and the Ritschlian Dowd, calling trained is our main hunting ground at present.
Framework drilling has identified the primary controls to mineralization and increase the potential of the leavell area.
Early visual trilling results are very encouraging, indicating a multi million ounce potential for that call and trained.
Meanwhile, framework drilling in the call and base and has opened up more than 16 square kilometers of prospective search space.
At Cortes production and costs were impacted by a decrease in the open pit stockpiles trucked from calling as well bye lower grades from the underground operation.
The complex remains on track to achieve its annual guidance, including increased contribution.
From heap Leach production and quota for.
In the meantime, construction of the twin they expiration declines at gold Rush now part of the Cortes complex is ahead of schedule and with contract development complete the project is transitioning to owner operated operations.
Intersection of first or as part of exploration and development is on track for the first half of 2021.
Not calling Cortes has plenty of opportunities.
During the past quarter drilling has connected gold rush.
To the nearby Formyl project, which is looking increasingly robust.
Already more than 3 million ounce potential has been added to the back end of the current mind plan.
And with successful drilling at the Sophia and Dorothy areas. The total potential is likely to grow.
Combined with unexpected resource increase at gold rush as we in full droll, we are well on our way to a 20 million ounce asset.
Which will keep the Cortes complex producing for decades to come.
Already there is sufficient high grade inventory to make us confident that full mile will be mind.
With production potentially starting in the back end of this decade.
Turquoise Ridge is still working through some issues and I've been spending a lot of time, there with Greg Walker and his team.
Production and quarter, three was impacted by maintenance and upgrade disruptions as well as below a equipment availability and utilization.
The fact is that turquoise ridge has the highest grades and the lowest costs and Ah, Nevada port failure, and even so it's improvement potential is enormous.
We continue to work with the management team and its effectiveness as we develop new geological and grade control Muddles and put in place a maintenance strategy to address the current issues.
On the E. S. G front, we are also partnering with sandvik on the trial use of electric powered hold tracks for the underground.
We now know way to go with Turquoise Ridge.
And the road ahead is clear to all of us.
Meanwhile, construction of the minds third shaft remains unchanged you'll end within budget.
Commissioning is expected in late 2022.
We believe there's also still considerable upside at both turquoise ridge and twin Kris.
Combined which we referred to as the Turquoise Ridge complex.
We just need to bolda understanding of the geological formations.
As a starting point, we have sought to better understand what lies between turquoise ridge and twin creeks.
And identify additional target areas as this cross section indicates.
It's amazing to me.
Just how under explored this area is.
And I believe we are making rapid progress in building on that understanding.
Elsewhere, Nevada Phoenix is on track to achieve the upper end of its annual guidance production was impacted by lower grades and recovery this quarter, but costs benefited from higher copper bra product credits.
Long Kenyon had another good quarter with increased production and lower costs delivering exceptional margins.
The permitting process for the main laugh extension.
Remains temporarily paused, while a water management review seeking to optimize the project is underway.
[noise] over now to Alaska, the joint venture that's the Donlin Joint ventures successfully completed it's 2020 drilling program.
The aim of which was to increase our confidence in the geological model Valley.
Valley diet assumptions.
And improve our understandings to update the life of mine plan.
The results today to have reinforced the importance of doing this work.
While essays of being exceeded certainly while essays have exceeded muddled grade sicknesses. It is with higher grades over naira words.
The next step is to update the geological and mineral resource models. We anticipate another drove program in 2021 to focus on areas that require further validation.
By identifying and closing information gaps we still are convinced we are driving donlon further up the value chain.
Moving now to Canada, we're open pit mining at Hemlo finished up this week.
And a new underground contractor was fully mobilized on site in August to advance the ramp up of underground operations.
Construction has started on a new portal, which will improve operational flexibility by providing access to new mining fronts and increase throughput from existing levels.
Hemlo has responded well to it's restructuring and repositioning as an underground operation.
And has the potential to grow into a tier two asset.
To this end extensions of the existing all body at depth and to the west as well as an improved understanding of the geological controls all point to improve production and the ability to extend the life of mine are too too said 2030.
And beyond.
In addition.
The black fly extension to the West of Hemlo mine looks the most promising at this stage.
And sits directly adjacent to current workings.
Changing is established that Goldman realisation is present, and then use stratigraphic edible more than 1500 meters from the Williams open pet.
Moreover, shallow historic drilling and sparse deep drilling confirms mineralization could be widespread within this targets.
And the Dominican Republic.
P V increase production by 16% as they expected after the previous quarters total plant maintenance shut down.
Costs also improved further increasing this tier one mine's margins.
The planted tailings expansion projects Romain on track and on budget.
These are designed to increase throughput to enable of mine to maintain a minimum average annual production of some 800000 ounces, we are well beyond beyond its current horizon.
Approval of the environmental impact assessment for the plant expansion and cute quarter three represented a major milestone.
And the permitting negotiations for T. S have three on now they'll work in progress.
We have repeatedly.
Reiterated the importance of ache investing an active exploration and to this effort we have established a presence in the Dominican Republic.
As far as they exploit exploration goes both within the hour as a member and a manager of the P V joint venture and also in our own Rod is Berwick elsewhere in the country.
At PV, we have updated the geological model and supplemented it with the structural model it has better enabled us to.
To identify new set a lot targets.
Hello, Darragh in Argentina has had a very difficult time impacted initially by a nationwide quarantine followed by movement and social distancing restrictions that hampered remobilization back to sought.
This in turn delayed the phase six expansion and the cross Andy's power transmission project, which was further complicated.
By us entering into that where the period associated with the southern Hemisphere winter.
Due to the ongoing financial crisis in Argentina, the government has maintained currency restrictions.
And the forced repatriation of export sales into peace us.
Valour Derek Darragh, therefore has kept a cash needs sales strategy.
Sally only enough gold to cover its cash payment requirements to run the mine.
Bella Dara is incidentally, Argentina's largest dollar and.
Our objectives remain to restore valid there are two tier one status.
But clearly they are still several challenges to overcome.
Before we can achieve this.
Berwick.
Was once the leader and exploration and mining in Latin America, but then withdrew to less challenging havens.
Reestablishing a dynamic presence in the region.
Was one of our top post merger priorities.
And we've installed a will claws exploration team with strong new leadership day.
At valid are we looking for higher grade oxide mineralization to displace the low grade answers and the current life of mine plan.
At <unk>, we are working to test some gaps so now ongoing modeling with a targeted drilling program.
And elsewhere updated geology and resource models have been delivered for the Argentine Assad of the al tourists project, where the benefits of a potential startup it is being investigated.
This plus 8 million ounce project has significant value and the focus now is two delivered to deliver and updated preliminary economic assessment of this project.
Also along the highly perspective L. E N D O belt, we have identified the potential for a tier one camp comprising four targets with a multi million ads potential in a 15 kilometer range.
Beyond the known L. N D O deposits, we have added 17, new targets to a resource triangle in this region.
As you all know.
After years of negotiation the government of Pap of New Guinea suddenly announced on April the 24th that it would not extend our special mining lease for Paul Gras, which we then immediately placed on care and maintenance, while embarking on a process of us.
Searching legal rights.
At the same time however.
We have remained in constant touch with the government.
Seeking to find a mutually acceptable way forward full polgar of mine.
I I personally have had five face to face discussions with Prime Minister Merapi. Most recently on the 15th of last month.
After which in a joint announcement, we disclose that we had agreed in principle on a new partnership to reopen and operate demand.
The key conditions are that Barrick, New Guinea limited, which is the joint venture between Xinjian in Berwick will retain operator ship.
There will be an equitable sharing of economic benefits and the government would require a major share of the equity.
Negotiations to formalize these principles and the framework agreement are proceeding.
Hoser now to Africa, where.
Where the ever reliable zullo gun Carter has delivered it's usual solid performance.
Development of the gun Carter underground mine started.
Ahead of schedule last month with the first blast for the portal.
The complex is third underground mine is now on track to deliver development or in the middle of next year.
Has already indicated the complex is 20 megawatt solar plant. The first of its kind in Berwick group has been commissioned it'll reduce operating costs cut carbon emissions and save some 10 million liters of fuel per year.
In Mali as elsewhere in the Berwick group the.
The hadn't remains on for new ounces to replace mining depletion.
The Lula gone Carter, a private properties continue to yield strong results, which position us well for a significant loss extensions.
Across the border in Senegal in the Bumblebee Burgee joint venture and number of exciting new targets have enhanced the prospective witty of that permit.
All the drilling has successfully been used to penetrate the transported gravels that cover large areas adjacent to the for Lammy River and is generating a number of new exploration targets that.
That have out Jose quite excited.
During the quarter, we also announced the sale of Mirilla to Molly lithium.
This transaction is making progress and is expected to close soon.
After years of trials and tribulations tongue gone in the Cote d'ivoire has settled down as a consistently solid performer.
The emphasis now is on to extend the.
The minds life by at least three years through the development of economic targets within hauling distance of the mind.
The aim is to achieve a longer life of mine with added value and Optionality in exchange for a slightly lower production profile.
And across to the east of the continent in the Democratic Republic of Congo.
Kibali also have produced a good set of results.
With the underground operation setting, a new or delivery record.
The introduction of a non megawatt energy storing facility into the power grid has proved very successful.
It has reduced the implant of cyclical loads such as the shaft Wanda on.
On the power grid, requiring less mold top for the main three hydro power stations at an estimated annual saving of about three and a half million liters of feel and some 8000 tons of carbon dioxide.
Cabal is again on track to grow its mineral reserves net of depletion and its exploration pop line is laying the foundation for another year of growth and a steady tenure plan.
The case said trade the K Z trained remains prospective for a good balance between open pets or open pit reserves and underground to ounces.
Further east and to the South.
Hands in the air continues to shape up as a major success story with Barrick's African and Middle East team quickly cleaning up the mess left by Acacia.
Having restored a good working relationship with the previously alienated Tanzanian government.
Eric cemented the partnership and their jointly owed tweak minerals Corporation.
Which oversees the management of the mines as well as the implementation of the groundbreaking 50 50 economic benefit sharing agreement.
Three guy last month paid her maiden dividend of $250 million.
The stagnant North Mara Amman has been rapidly revived with a focus on improving the underground mine and the restart of an optimized open pit operation.
North Maras growth pop line aims to deliver class 5 million ounces across twenty-six targets.
Meanwhile, extension drilling at Kokoda and Jenna is on track to deliver significant answers into the mine plan.
We are also updating geological and resource models to optimize the open pit and underground at North Tomorrow at.
A geological update of the Roma all body and mind plan is is schedule next.
And at Bouillon Hulu.
Mining has resumed after a complete underground refurbishment the.
The first development friends have been advanced and the processing of fresh underground or is scheduled for later this year.
Cause walkie as a stockpiled processing operation, which will either be sold.
<unk> converted to an alternate land use.
The export of stockpiled concentrate for these two operations that were previously halted by the government continued N was completed during this past quarter.
In parallel with the star top of the Bouillon Hulu underground.
We are also busy with a total re optimization of the underground operation starting with the geological Modelings.
The first seven intersections from the deep West drilling program have returned an average of 3.7 meters that's true wet head.
Had a grade of 25.6 grams per ton.
Geotechnical stress modeling and metallurgical test week is also underway and the material, which will be incorporated into an updated mine plan and feasibility study to come be completed next year.
We envisage that the combination of north Laura and bullion, Hulu could well and a T L. One complex status.
Barracks copper portfolio did well again with cash cost per pound that will lower than the previous quarters.
And below the bottom end of their 2020 guidance.
Lamont and Jamal's side continue to show progress.
Wallet Zaldivar the team is actively engaged without partner on finding solutions to the mines current performance.
Oh, five and tenure plans are being updated and we will share them. When we report our annual results early next year.
As a various feasibility phase abilities and mine optimizations come to fruition. We also plan to extend and further optimize our loss of mine plans.
The link between mine plans MRM and exploration is a critical connection that needs to remain dynamic ended and adjust to the specific needs of each mine.
M. R. Ram remains focused on the operational integrity of the five year plan, making.
Making sure that the answers are bank and all geological aspects such as grade G O Tech or Geomapped are understood well ahead of any money.
This ensures that we can deliver are now operational plan.
At the same time exploration is looking at 10 to 20 year horizon.
To make sure plans are in place to identify the all that can replenish the depletion over the longer term.
However over the medium term.
Within that five to 10 year period.
There's an integrated approach between mineral resource management and exploration.
That is more dynamic in nature.
This dynamic process, then allows a mineral resource management and expiration teams to refine his strategy based on the requirements for each mind.
And region to achieve the stable production profile and develop new opportunities for growth.
We set out two years ago.
Too bold something different to.
Two what had become a norm for the gold mining industry.
Based on a clear strategy of focusing on the best people.
To operate in industry, an industry, leading set of assets.
Whilst we are not there yet.
We have made progress.
Has has the industry that followed.
The state of graphs rarely illustrates barracks performance across the key indicators, we sit at the beginning and before the gold price started it's upward trajectory.
Finally, ladies and gentlemen in conclusion.
I and as usual with a comparison of Berwick share price movement again spot cold and the G. D X index since the merger and over the two date.
Just to remind you the.
The rationale for the merger was our belief that the combination of the best people.
With the best assets.
Would deliver the best returns.
These graphs clearly show how we have delivered so far.
Thank you very much for your attention I do have most of the Berwick senior executive team on the call and we would be happy to take questions.
Thank you we will now begin the question and answer session to join the question queue. He May press star than one on your telephone keypad, you'll hear a tone acknowledging your request.
If you're using a speaker phone please pick up your handset before pressing any keys to withdraw your question. Please press Star then teal to join the question can you. Please press Star then one now.
Our first question comes from Josh Wilson of RBC. Please go ahead.
Thank you Uhm, Mark et cetera like early on in the call. You mentioned the form are reserved was roughly 4 million answers just wanted to confirm was that up and you expect it to see it year and and and there's been a number of positive exploration updates across the connection you mentioned this quarter Sofia. This.
Quarter natural whole Dorothy last quarter does that incorporate all those opportunities or is that just a short term target.
What we pointed out was that shop minute mineral inventory at the moment defined on the drilling that we've done. So far you know by no means tries to indicate the potential of for a while I think the the main progress that we made this this last quarter what.
Israeli connecting gold rush with for awhile and that that sort of playing all body that you see in gold rush extended up into for Awhile and then as we move up further north and four mile. The the minerals.
Asian moves to a much higher grade more irregular shaped breccia host, but there's still a lot of work to do at this stage we still.
Framing the mineralization and the potential footprint of four mile and it's gonna take some time to do that the Big question. Josh comes at the end is.
Do you continue to try to define the full potential through surface drilling or do you get in and aches and and access that part of the old bodies through development and then drilling from underground.
Sure. Okay. So it's it's still sounds like early days, but exploration is going well.
On there for a second I think the important thing too is that the team starting to understand these bridges and we're getting a good understanding of the geometry. So that we can all them with with only a few intersections. So there's a lot of learning going on at the moment as far as the the classic for Awhile <unk>.
Did all bodies concert.
Thank you and for P V.
Could you remind us maybe the timelines or the steps needed for the tailings permitting so so the the next step I guess of unlocking the resources and reserves can can come forward.
So we've got a number of scenarios on the tiling side, you know we're comfortable with our partners that yeah. The expansion is it makes good sense and we've committed to proceeding with that we have you know the the the government is very pro this project. This you know P.
T V is one of the law and fact, it's by far the largest.
Contribute it to the.
Commercial tax paid in the country and it has been for a very long time and and with the Covid crosses now, it's even more significant and and so but at the same time, there's work to do and where need to complete the fatal flaw a investigations.
Across the footprint, we are working and engaging with the communities and other interested in it affected parties and and Josh. These these sort of processes you cannot drive them against the timeline, where we know we don't to have pressure to deliver this weird rather delay.
Ever it.
Properly and in a in a in a way that you know has the support by the majority of the communities around the the the tailings facility.
Thanks for taking my questions.
Thanks, Josh.
Our next question comes from Danielle Chigney era of Bernstein. Please go ahead.
HM HM HM HM.
More questions and tell me the truth.
<unk> took place, making 20 creeks and could you give us an I T way, that's an explanation training ranks intentions woozy.
And potential opportunities within the food.
Yeah, Danielle it's been you know I'm, a geologist and it's been an absolutely fascinating.
Last 18 months working with expiration in mineral resource teams as you know the legacy Berwick team is quite geocentric and.
We've added covered enormous opportunities within the call intent is Ah Ah referred in the presentation [noise] that that certainly is a massive and you know it's sort of like the Holy Grail, an exploration certainly in the Americas.
And then.
Cortes itself going back to the famous pop loud deposits and and a similar sort of connection between pop line and and Robertson Uhm and we've got a we've talked about already the the the gold rush and Cortes when you get too.
Turquoise Ridge, which the turquoise Ridge underground mine is a amazing.
[noise] mineralization and it's in all body that had when we got they had very little understanding in fact, one of my first a meeting with the team was we don't really understand the controls of mineralization and you've seen in the numbers.
Cause ridges, a super high grade deposit, it's and and we've made a lot of progress in understanding it and then you've got the old getchell that the early discoveries in the form of the gift you'll put in and the twin Creek side of things and traditionally there's been a a prince a farm.
Paid separating the newmont athletes with the [noise].
Berwick assets and when you look at the two different geology is that quach different as we start.
On cashing them, we see similarities and of course, there is a connection somehow between the two because they're not far away and so we've had a lot of and and also simplistically people didn't challenge themselves on how do you fit the two together and so there has been some his dog.
Vehicle drilling we have invested an additional boreholes in the last.
12 months and now we starting to see the complexities between.
They took turquoise ridge and twin greets deposits.
It's such an.
And explored part of the whole, Nevada, Goldfields, greater Goldfields and I'm not just to add to the entry northeast out in the in the in the open Plains we've got.
Evidence of the same prospective sequences that host.
Most of the deposits within the these calling system and.
And so it's really is an open book.
Turquoise Ridge complex as a as a whole and and I mean, I am very Ah you know we called it certainly call. In is is it's got a clear clear a framework on which to base an observation that there's enormous prospective witty and we we refer.
<unk>, you know multibillion announce potential.
Turquoise Ridge is a little early still and a big focus is getting mine is to to be able to have proper mine plans based on a boat geological and and mineral models and ultimately grade control models.
And but at the same time, we now venturing be between as we show you in that section between the two no in port and and and the inventory and.
And.
And Ah historical production out of that region is substantial so you know all I can say is it's it's definitely prospective and and it's something that we that attracts a significant part of our budget.
As far as.
What we would called Brownfields exploration.
Okay, and and I have no doubt will extend that to the out into the.
Outside the known.
<unk> choose to see what's out there.
Under the cover.
[noise] [laughter], that's fine and just Kenton tax 19 mentioned positive environmental impact unlucky stores with little Pink.
Could you give us some sense of the positive impact.
Oh.
Say that again I didn't hear what you were saying.
Could you quantify the positive impact on your <unk> from the energy storage facility.
The energy storage facility amazing piece of equipment, it's actually a very large battery about nine megawatts, it's new technology and what happens is traditionally we used a spinning reserve add a diesel generators osby generators to be able to to some.
<unk> that the immediate demand when we hoisted we turned on the the shaft hoist motors or we turned on the big moles or whatever.
With this facility, we can now switch off the Jane sets and during the the period, where the rivers are completely full and so the Hydra power station, then keeps that battery full and it's a base load.
And then the battery behaves as a responsive provider of energy for yeah. Those quick demands and we've also identified further benefits and that when we start our power grid. It's a mini grid, that's the main restricted grid.
Power grid.
We use that.
That facility to load the grid and so again that takes away the need to start off by a high speed Jane sets and and so the the savings are significant and we're just into it now the first thing we measured was you know the impact on.
Feel as you've seen and we share that with you as well as greenhouse gas emissions, but ultimately it hits the bottom line as far as power Costco and I would just take you back Kibali is only profitable because of the Hydra Paul installation three of them.
Otherwise if we were to do just rely on diesel it we we would be a very marginal operation and so any way. We can we can harness that hydro power station and reduce the consumption of diesel.
It hits, the bottom line and and we expect that to continue and will share that with you as we settled down. This this piece of equipment and we we've already seen merit and being able to use this technology elsewhere across the group.
[noise] that's great. Thank you.
Our next question comes from Richard Hatch of Bahrenburg. Please go ahead.
Thanks, Yeah, Moonwalking them congrats on a good set of numbers two questions first one and just to get the the Ah Latam <unk> can you just give us a bit more of an update on what's going on with high school on what you're doing when the next to the key milestones off of that I said where that might.
And he talks about out terrorists in the 8 million out deposit there or more I mean.
Where do you think paschal almost sits in the in the pecking order down down there and then the second one system Molly.
Few headlines coming out about.
General recommending a review of mining contracts, let me just recap assault on where you stand with you physical agreements in Mali. Thanks.
Yeah. Thanks, Rich uhm, so pestka as you know as you know as part of the past quite Llama project that.
Essentially the the the the main infrastructure was.
Largely constructed not fully about 70 per cent of it.
But the all body failed and.
Always and and and so.
When we looked at it during due diligence, we recognized an opportunity and and to give you. An example at about 50% of the data has not been captured and as models. So uhm.
Uhm.
What we've done is we've put in into Latam.
A full feasibility team one to focus in on Pasqua N llama and and that same team brings a a a a a level of expertise two hour evaluation team down and and now.
Tourists Delcarmen region and.
And so I just dealing with past got first we've we've now completed the full ordered of all the infrastructure, which is on the Argentinean sod in llama and and the and the major all body sits and the Chilean sod in the form of Pasqua.
And we've now reviewed all the data sets all the ball logs, we've gone back and selected shirt Bohol loves we've we've we've created not only a geological model and and then all resource model. We've also in the in the prices of can.
Striking a G O met muddle, so putting the metallurgy together because you know this is a very complex set of various all bodies at many of them, which are essentially silver in nature.
And.
Re dominantly silver and it and now with that model in place as we start putting it all together of course, we all identifying gaps in the information be it metallurgy metallurgical character.
Stig saw styles of mineralization or just the sort of connection the geological connection. So we are now moving towards.
Addressing some of those gaps within the hour target is to get to the back end of next year with a revised Ah feasibility study you know it might not be it a bankable level, but it's certainly it'll be at a stage, where we can evaluate the real potential of these.
Series of of assets and and make a decision whether it's a it's a it's a national asset that can be developed in a responsible manner for the benefit of of the stake holders, including both countries.
Or not and so that's all I'll commitment on these projects on alturas.
Again, you know this is a project that was.
Sort of sitting in the exploration domain. It it really hadn't been looked at by an integrated team that looks at you know viability and value and so we've done a complete review with the teams involved.
And and again, we've identified gaps within that model. It's certainly the inventories sits at more than 8 billion ounces and and we've got some work to do to be able to put additional frame frames into the very and again, it's a series of styles of mineralization.
And as I pointed out in my presentation is there's a potential for a starter pet which is always helpful and and starting up these massive deposits on the Argentine inside.
So again that the objective is take that to the first step of an integrated project feasibility in the form of a preliminary economic assessment will then be able to really understand the potential of that uhm and then make a decision and then.
It all fits with our resource triangle, you know I'll resource triangle is all about starting with ideas and concepts moving them up towards the apex of the triangle at each beria, we need a tested against our investment criteria. So we've introduced that discipline across outgroup as.
As far as the exploration teams got Uhm. We've also got the al India part of it you know a L. A N D. O was a very high grade deposit. It was you know it was mine then transported his whole so a very high grade a deposit again they'll either.
Get lots around it we've gone back and put some geology into the controls and.
And again as I pointed out if you if you.
You know you focus isn't and look at what we've got in the history, and then focus out and look at the potential of that region. We believe that it's got some significant potential.
The second question was.
Molly just on the the comments from the the.
We've I mean this is we've had done this before rich [laughter] and I was there with the team just last week, we met with the new Prime Minister the interim government and and at the entrance leader of the government and his government minister our minds and and.
Finance in particular.
And and and and again it was a breath of fresh air you know the the Prime Minister.
And his team want to make a difference they see their responsibility as rebuilding that platform on which the elected government will be able to continue to bold the economy.
The Minister of mine said to me you know Mark our job here, we know you've had lots of frustration in the past hour job is to work together and deliver real value and make a difference and ready unlock the potential of binding in Mali, and and you know Berwick is the biggest tech.
<unk> in the country by a country mile and.
And we've got a long history going back twenty-three years in the country, and and and it and and the order to general which was referred to in the speech you know he's he's often around he comes and digs around in now business test us against out various conventions and and again, what you know I think.
The the statement was taken out of context, but it's natural given the circumstances of the regime change that there is some distrust and so you know one would expect there to be some audits conducted against certainly.
Any agreement subcontracts with its mining or others.
During the the final period of the previous regime and you know I don't see I don't see that as it as being send us that all certainly from my conversations it is not sinister.
Very clearly the mining industry and the various conventions and and Molly has always respected than the legal right of investors two two stability agreements, but at the same time the mining industry has contributed significantly.
More than 50% of the economic benefits of the mining and so I've got no doubt that any audit and investigation will demonstrate the.
The value of that mining brings and hopefully and that's the conversation we had with the Prime Minister how do we make it better and how do we make the benefits more efficient.
And and not waste some of those benefits through bureaucracy and inefficiencies within the add administration. So it was for me everything that one would expect and that sort of a conversation and I would add to that as you've seen we've agreed to sell marella too.
Molly let's hear much I think today changed its name and.
And again, we've worked with the with the with the previous administration on getting the approvals and meeting the various condition President's and and and now I'm gauged went with the the the transitional government is also being positive and they very clearly recognized the opportunity.
He had given it you know it's a different set of investment parameters that Molly lithium brings and at the same time Berwick.
You know agreed and has retrenched, it's and tie out workforce given paid up all the rights of those people at barilla have a fresh start but they've been paid for the historical employment and and.
And so you know every everything that we did was because we are now mind. We had got too close you in Murillo said made good sense for us to pay out People's rights and and give them a fresh start and so Molly lithium also starts with a fresh start.
Oh.
Thanks, a lot mom I appreciate it to check speech seems to Chase boy.
Our next question comes from Greg Barns, but T D Securities. Please go ahead.
Yes, thanks, Mark in the M. D N. A that's a brief comment about the country changes to the minerals tracks in Nevada.
I guess so this in legislation resolutions passed recently.
Whereas that growing and and what does it mean for your attention.
Well you know I think just to give you some background with the.
When when I Ah assume they're all in and.
Berwick one of my first stops with Catherine Chief Executive in charge of North America was to visit the Governor's office and.
Uhm, Yeah, and we talked about techs and.
The stakeholder benefits and you know all of this whole ongoing conversation of does southern Nevada benefit from northern Nevada activities, and so on and win Covid heads you know.
Mediately. The first stop I had was Ah back in Las Vegas to meet with the team from the Governor's office and we made offers of advancing some of our taxes to assist in and this crosses slack Ah Lok Barrick and newmont.
Did back in the 2008 financial crosses.
Uhm and so for that offer to be effect of.
They had to be a special legislation assembly, cold and and and and along with the various bits of legislation that needed to be addressed given the circumstances that we found ourselves in.
In this this current scenario.
Out of that was a surprise move to try and.
Motivate additional.
Resolutions on changing the tech structure for the mining industry and the mining industry is.
Is protected by the constitution, and and and the and it's one of the few industries apart from gaming that pays tax in Nevada, and so we had already reached out to the Governor's office to to say you you need we need as.
Nevada and business need to look at you know a broadening the tech space and making sure that there was an easier way to plan.
The treasury because the the collection of taxes and finding revenues for the ongoing management of Nevada as a state is quite complex and fraught with challenges.
And so that and so there was a movement within the legislator to introduce some resolutions, including one which stuck with the current tax structure, but lifted the cap and and so and we.
As you can imagine the industry engaged robustly with that in that debate and subsequent to do that and we had already started that the Nevada team has invited the the various legislators both from the assembly and the Senate.
That's the state assembly understand it to visit and and spend time in the mining areas and you would've I think remember we invited some of the federal mm mm.
Legislators as well as the governor to the mines last year and that's been a very productive process because there's there's so little none of them of how the role that mining plays and and certainly in Tom's locked us.
This is a as gold offers a natural head to investors. It offers a natural urge to the state of Nevada, and and and in fact in the space of just over a decade, Nevada has benefited by having golf mine's in his backyard uhm.
Uhm twice already so I think what was initially quite a sort of political move has become a a very concerted engaged process and our team I'll say it should certainly engaged at every level along with.
The Nevada Mining Association, that's the rest of the industry. We have have spent a lot of time with the Governor's office and individual leaders and the vet and the two houses and and again. This is a long process. If you Wanna go down the route of changing the constitution.
And then introducing sort of radical tax structures I think we're all agree that we.
We've got a we've got to find a a middle ground on on what's good for the mining industry to keep it alive and ensure that it it it survives the troughs and is able to do what it's doing in the in the peaks and at the.
Same time.
You know.
For the industry and other industries to be able to contribute to the the the treasury requirements and I think there's no better time as you've seen right round. The world way. This covid is sort of highlighted the critical nature of and the.
Importance of being able to fund our states and governments and and so I mean, I I I certainly on on where we are today and with the amazing work that we are team. That's the Berwick in Nevada Mining Association team has done I'm.
Optimistic that we'll find a solution that's good for everyone in and puts mining right in the in the center of you know.
Societies understanding of the importance of having more than just the gaming industry to choose.
To support the the Nevada economy, and and I would add that Nevada has been attracting a lot of I T. You know, leading I T organizations and sort of modern style businesses.
Which again, you know able to position, Nevada as a as a as a goto destination for business.
Thanks Martin.
Helpful.
Okay.
Once again, if you have a question please press star than one.
Our next question comes from Howard Stinker, a thinker company. Please go ahead.
Hello, Mark hologram.
I'm I'm confused by footnotes in the income statement.
Sure he had right off in a reverse the footnotes nine being 13 at nine a I couldn't find them.
The only nine I saw was it too long statement about.
Oh so.
So you.
Where are those you know how we are at this stage of your life I thought you. Your eyes would have deteriorated to a point, where you can't read the fine print.
But maybe possibly autograph.
Catch us out with these little questions.
Well I I'm curious, so I'd like to understand I'm too old things so bad so.
I mean, where I can find them.
Oh, sorry, nine Oh, yes on page 120.
<unk> on page 125.
Of the MBNA.
Oh, Sydney M D N a oh I see I didn't printed thank you.
Kentucky, sometimes my confusion.
And out of curiosity, what is a battery costs.
Is it millions of dollars is a few hundred thousand dollars.
It's it's millions of dollars how he because it's more than just a battery. It's it's the technology and the software that goes with it to be able to manage that into change and to be able to you know to bring that power on and off as it's needed instantaneously.
Then recharge et cetera. So it's it's it's a it's a large investments.
Oh, I see okay and of course that means that you don't have to start and stop your production, that's probably an intangible benefit as well.
Well the most important thing is that we we don't have to keep what's called spinning reserve. So we don't have to keep.
Uhm generators running to be able to take that Serge when we need it because we can get it from the battery. So that's the real critical benefit from.
Okay. Thanks cars.
And Harry and Howie with with the way we did it as we did it in partnership with the suppliers. So it was and then 136.
Prove it success and that then we pay for the full amount. So so it's been a long development process to get to where we are.
Okay. Thanks.
Our next question comes from cleave Rueckert of U B S. Please go ahead.
Our next question comes from Cleave Ruecker F E. B S. Please go ahead.
[noise], Hey can you hear me.
[laughter].
Okay.
We can work alright, Sir.
The first time that I just have one.
One quick question for you and thanks for all the time some of them on the cost side. Obviously, you know there have been a lot of moving pieces. This year, we've talked about royalties they talked about covid costs oil that's been kind of an offset.
Obviously trending towards the high end of the cost guidance I'm, just curious as shrimp from a bigger picture what would it take to get to the lower end of that range.
Cash cost for gold.
So the big one the big driver is.
Is the gold price and royalties and royalty structures, Nevada has got quite a complex royalty structure Hamler, particularly and then of course, the whole of Ami Africa Middle East has got royalties and and we budget.
[noise] Guardans on a 1200 dollar gold price. This I think this year, we but just to 2020, we used 13 50. So you know that's one of the drivers.
The other the other side of it is the mix in Nevada, which.
Because of turquoise ridge performing at a slot Lila level. So that has an impact on the mix on the overall so you don't see that because the other operations I've done, particularly well, but you know with as we ramp up turquoise Ridge that'll also help with.
With the overall costs.
And then and this quarter as well as catching up on some of the capital that we didn't spend lost quota and so that and and now our Orleans sustaining costs. You know we have a different impact as as we wouldn't that total cash cost.
But it's you know it's it's not that we don't have anything that's ready out of out of sync you know operations apart from us.
That's clear thanks for that Mark and then maybe one just a quick follow up on the on the dividend.
<unk>.
A couple of months ago, you were gonna come back with the it'd be more detailed dividend policy at the end of the queue for.
Sure updated thoughts on on how you're thinking about it.
Sure.
<unk> on the on the.
1200 dollar gold price sort of structure for the for the regular dividend or if there's any thoughts about special dividend or a buyback mixer.
So it's what I can say is that it's a very lively conversation at the moment as as as dividend conversations are always in.
With it was legacy your angle, though now with Barak I think the positive thing.
Is that we are able to have that conversation, which you know not the case for a long time and barak as the director's with pointing out to me yesterday.
Yeah, what I'll focus right now is yeah at nonsense, we already do get to that 1200 dollar run right. The way, we can sustain a dividend over Tom.
Graham is more than adequately shed the various options that we are debating on you know returning additional capital to owners.
And will continue and debating that but certainly for the medium term.
Yeah, we we both Graham and I are have always been have always been fiscally conservative in the way we right now businesses.
We've we are you know supported by the board on on this view and you know we not out of the woods yet on this Covid challenge and we certainly doesn't have clear visibility of the full run way ahead of US Yeah. We felt it was.
Nope Brigit.
To to deliver on a commitment to the market and ensure that we have continued to.
Improve our dividends on the with the objective of it being sustainable and then you know we've got time to reflect on exactly how and we've certainly got lots of inbounds from our various interested in the affected parties.
But as you've seen today, we and N as we behave back in 2008, we were we we weren't we didn't risk react just on everyone's woman demand we were varied cotton said, it and how we manage and the show.
What time and and I you know I right now I think a stronger balance sheet is better. It does two things that protects you from any crisis, it's shit and he protects you from the capital markets should we.
Get challenged within an expected event and within the markets I'm talking about.
And and it continues to shore up the quality of our paper that's L shape Ross and that's all good for this phase in in in in the you know the the the market and the goal process moved very rapidly and and it's and I've always.
Been of the opinion when things move so rapidly it's it's wise it to be more considered than than more reactive to the situation and so would that's the way we were gonna.
Manage this and you ought to the financial results next year, So yeah, and and I think you've got a good idea of the the the various options remodeling of with a board of directors.
That's very clear thank you ma'am.
There are no more questions from the conference call.
Alright. Thank you very much everyone as normal we are available should you need to reach out and.
Get additional Colorado now results, we thank you for making the time, we look forward to.
To doing this back face to face soon enough.
And I would just point out too that we are now working furiously on invest today planning and and have you sent out to invite yet.
Okay. So we are setting it up for the 20th we I think we've position the the presentations so that everyone can have a.
Access to it without you know really just eating into your sleep, Tom and we look forward to speaking to you. Then this we have a chance to speak before then thank you very much again for your time today.
This concludes today's conference call should you have any additional questions. Please contact the barrack Investor Relations Department you May now disconnect. Your lines. Thank you for participating and have a pleasant day.
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