Q4 2020 Barrick Gold Corp Earnings Call
[music].
Ladies and gentlemen, thank you for standing by this is the conference operator, welcome to the Barrick 2024th quarter results Conference call.
During the presentation all participants are in listen only mode. Following the presentation, we will conduct a question and answer session.
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 operator assistance, Please press star and zero.
As a reminder, this conference call is being recorded and a replay will be available on the Barrick website. Later today February 18th 2021, I would now like to turn you over to Mark Bristow Chief Executive Officer. Please go ahead Sir.
Okay.
Thank you very much and good morning, good afternoon, ladies and gentlemen.
And welcome again to our presentation.
Alright, Thank you on Q4 results.
The posture and its been one delivery and.
Right.
And so unprecedented challenges we delivered on our production guidance and at the same time, we continue.
Our key projects.
Among the day after the expansion plan.
Turquoise Ridge.
Oh.
The Gulf from Russia duration declined and the underground mine at current quarter.
We have moved to understanding of our ore bodies by putting geology front and center.
And we can now optimize our mine plans on.
And foundations.
The sale of non core assets generated the one and Australian dollars, we promised and box cleaning up our portfolio, we aligned with our strategic focus on.
Yeah on one mines.
Our world class business.
Needs and global presence.
Great tier one assets and any jurisdiction.
Which means that some of the operations are located and more time and.
And political debates.
In addition to the coronavirus pandemic last year, we also had to deal with the Argentina financial process.
And Molly.
Major impact on political Tom event, and the DRC and the closure of coal grass and Papua New Guinea.
Barrick has clearly demonstrated that it can manage risks across our broad range of asset.
With a leadership capable.
And running a large and complex business, but.
But also recognizing and realizing new opportunities.
Please take notice of this cautionary statement and four days you need more time to review it is available on our website.
The key and the past year's performance once the effectiveness.
<unk> strategy, which is powered at all levels by a long established partnership philosophy, and our close relations shipped all of our staff and cold.
And from investors to host communities.
This was evident and <unk>.
Very successful Covid containment programs, which suffered the impact of the pandemic on our business.
And our people and also enabled us to provide much needed and welcome support true.
Most countries.
He and his team and speed.
Most of the attention recently, but I would argue that it's social dimension and.
As important.
Particularly concerned.
And that's the issue of poverty arguably the greatest problem facing mankind.
Not more prominently on the agenda.
The world's poorest people live and its support piece and.
And easing the loan growth.
Cool and not just.
No.
This is not to say that we should under estimate the gravity of the environmental challenge.
Barrick has a clear road map for the reduction of greenhouse gas emissions.
Which is based on current sites and operational realities, rather than wishful thinking all long dated aspirations.
Oh Landmarked targets listed here on.
And the constant review.
All our operations have practical plans for transitioning to a cleaner and more efficient energy sources.
And the board and management, and we are cognizant and solve the necessity to innovate new power plants for a future months and short <unk>.
Eric just buyers tend.
To be an industry leader E S T <unk> and other things.
Yeah.
This is a health and safety scorecard for 'twenty and 'twenty and as you can see there was a significant improvement with both lost time and total recordable cornball injuries decreasing by big margins.
Unfortunately, as previously disclosed and otherwise and impeccable record.
And the buyer.
Jake vitality at Kibali and November of 2020.
They were nose high severity environmental incidents across the group during the year and the number of medium severity and and then step plan.
As these numbers show, we've continued to reduce our emissions and improved our water usage and recycling right.
And you said it well.
So we return is in better shape than the water we received.
The photo crops on the right show and one example of the difference we've made since taking on North Mara.
And one of our priorities was to simplify our water management flat.
Our social license to operate requires the goodwill of our host communities and is closely aligned with our partnership philosophy.
During 2020 fully functional community development committees were established at all the operational side.
And they were instrument rental and deciding how best to invest the more than $26 million, we spent on quality of life.
And the course of the.
Last year, we said to ourselves very specific.
UK and seizure, we checked all those boxes.
We met our production targets.
Delivered on our business plans and fully capitalized on the higher gold price and copper prices.
We increased free cash flow to an annual record of $3 $4 billion against the 27% rise and the gold price and we achieved our goal of zero net debt.
And of the AR.
It's worth recalling.
And that as recently as <unk> T cell and gene.
Eric was good and bad debt of more than $13 billion.
The quarterly dividend has also tripled since the merger with Randgold and.
And and since it was announced more than two years ago.
As I said tripled the quarterly dividend and in addition to that.
Dividend as you all have read today, we are proposing a capital return to shareholders of $750 million to be paid and three chance tranches through this year.
This return is sourced from the proceeds of the sale of our stake in Kalgoorlie.
And as well as other non core assets since 2000 and.
In line with our policy of returning surplus funds to our shareholders.
The solid operating results were driven by and now this fall and then.
Yes.
From <unk> and the Dominican Republic.
Bally, and Hulu and Tanzania, and the continued improvement at the turquoise Ridge and complex in Nevada.
As I noted earlier production was at the midpoint of guidance and total cash costs and all in sustaining costs were within the guidance.
Despite higher royalties due to the gold price.
Our record free cash flow and zero net debt are particularly gratifying features of the numbers as on a very significant returns and we delivered to our shareholders.
It's wholesale.
And that Moody's has upgraded EBITDA.
It can be double day, one which is the light.
Old sector.
It's my view that the consolidation of the gold industry is not yet complete and as these numbers show Barrick is well equipped to play a big part and future developments.
And now to North America, and our operations there we start with the five year outlook for that region.
Okay.
Going forward on it.
Bond thing Oh body and knowledge.
Okay.
Production profile and managing all in sustaining costs.
This is consistent with our November Investor day, with some cap and tested.
And to both 2021.
And 2022.
And also some opportunities to them.
I will touch on and the next few slides.
And Nevada, the best potential and show our near to medium term life of mine.
Alright, and also level.
For miles.
And the gold rush as well as the range project at Goldstrike.
The best option.
For significant new discoveries are in the area between turquoise ridge and twin creeks.
Between pipeline and Robertson.
And as the Cortez complex and Karl and basin South of gold quarry.
I have great day expectations for the North legal area and the team is currently prioritizing the improvement of the geological model and drilling to accelerate.
The delivery of ounces into the call and mining plan.
Results to date from $5 seven drill holes have confirmed at least two emerging high grade areas.
But the average reserve grade at level.
Drilling closer to the existing mine infrastructure continues to extend the tariff ore body to the north and the west.
The call and complex is richly endowed with gold deposits and this flagship asset has some very exciting opportunities not only for resource expansion, but also for new world class discoveries.
And 'twenty 'twenty.
The current complex delivered at the midpoint of its production guidance.
And also kept costs well within the guidance range. This.
And this year and the next you'll see substantial investment in the future.
In addition to growing ounces through exploration at North Leavell, Rita K and grain and the introduction of improvements to increase processing options.
As well as the bus.
On the agenda.
Like call and the Cortez complex has a wealth of opportunities for expansion and growth.
The gold rush and formal discoveries are good examples of our policy of first understanding the geological framework and then building the exploration programs around that.
And at full mile the improved confidence and our geological understanding is demonstrated by our first declaration of an indicated resource that's on behalf of 1 million ounces at around 10 times.
While still growing the inferred resource to two 3 million ounces and around 11 grams per ton by including Sofia.
I have no doubt that this resource will grow and once we drive the development from gold rush and and full drill the full mile project.
Still and the Cortez complex.
Pipeline and Crossroads is a world class legacy deposits and we continue to grow the resources at the Roberts and deposits.
We are also progressing the feasibility work and Robinson, while taking a closer look.
And what lies between them.
Yeah.
Cortez itself exceeded the top end of its production guidance last year.
The gold Rush project is on track to expose his first oil and the first half of this year.
And the government's record of decision is now expected in the first quarter of 2022 rather than the.
Of this year.
This however will not impact the mine plan with a focus now on better understanding of the ore body as we opened it up while we finished the underground feasibility study.
For the Standalone gold rush portion.
We are exploring the possibility as I indicated earlier of reducing their cost and timing of drilling at four miles through underground access from gold rush and.
Once gold rush and formal on up and running they will boost the Cortez <unk> complex as annual production and then should be on.
And one status.
Yes to come.
Turquoise Ridge and <unk>.
Highest grades and the industry.
Was developed at our loads as a low tonnage high grade mine and not based on a proper geological model.
This project and mine represents a significant opportunity for improvement.
It has two huge deposits and.
And at either end of and eight kilometer trend.
What they have historically poor geological understanding and a lot of potentially prospective ground between them.
We've done a great deal of work on this since the formation of Nevada Gold mines, and we're starting to generate new targets and what was thought to be and maturing district.
As shown in the section and.
The newly discovered midway both between turquoise ridge and to increase could be unimportant district should IL mineralization and control.
The turquoise ridge complex has been struggling and production for the year fell short of guidance.
And there was a marked turnaround however, and the fourth quarter and ongoing optimization should deliver further improvements for this year, including a ramp up and underground development.
Construction of the third shaft remains unscheduled and within budget with commissioning and planned for late 2022.
The shaft is designed to be able to increase hoisting capacity improve ventilation and shorten all age distances for that operation.
Still in Nevada, Phoenix and lock on Canyon are small, but very efficient low cost operations.
And exceeding the top end of production guidance and delivering exceptional margins.
North of the border and our home country, Canada Hemlo is made a remarkable journey from a survival mode to a potential she had to mine.
At the time of the merger.
And we doubted whether it was actually a profitable asset.
But after and packing the geology and rebuilding the models, we found and many opportunities not only to turn this into an efficient underground operations, but also to bolt on to reserves and extend its life.
Most notably recent drilling has indicated the potential for a discrete parallel mineralized structure to the west of the main zone.
Further drilling is planned and 'twenty three.
To improve the geological understanding of this area.
[laughter] last year Hemlo beat the top end of its production guidance and this year a separate portal development well ex access it's up I seize on providing a third mining front.
And increased flexibility mining.
Mining and is expected to begin and the second half of this year.
Latin America.
Is there a region with many challenges mainly legacy issues that impact on our social license to operate but also an abundance of opportunities with.
We've put a lot of work and to fixing our businesses and relationships there.
And last year I personally visited the region four times with molecule.
Leads that region of Barrick to review progress at our operations and also to meet with government and community leaders leaders and really invest and now new management teams across that region.
All the products have been or are being addressed.
And even the situation and Papua New Guinea is progressing to what I trust will be a reasonable exceptional acceptable resolution to barrick as well as the government.
And the meantime, we have left program out of our guidance and then Ted you added back once we are able to reach a give the agreement with the various stakeholders and.
And Papua New Guinea, including government and the land guidance.
I would also point to the reduced production forecast at valley Dara compared to what we shared with you at on November Investor Day.
This is mainly due to the transition plan to the new phase six to 10 project from the old Valley Leaching facility, we have only recently finalized.
With the government.
We have a new exploration and new business team for the region and as a result, all working to expand our footprint and open up new opportunities across South America.
I also refer you to choose days and announcement on the sale of Lagunas Norte day.
Which is this is in Peru, which is part of our continued rationalization of our core portfolio that does not fit with our long term investment strategy.
Right.
At Pueblo Viejo, new targets have been on <unk> and are particularly interesting one is being developed south of the more pets within the joint venture mining lease.
Also our recently established Pueblo ground day project immediately adjacent to the PV 10, and Mems has secured a strategically important parcel of land, which is critical for PVC expansion plan.
Pablo vein staged a great second half recovery hosting and mold throughput record for the second straight year.
To achieve its production guidance.
The expansion project will realize the operations full potential by unlocking by unlocking just over 9 million ounces of gold currently excluded from reserves due to the lack of adequate tailings and storage facility.
The plant is being upgraded to handle the throughput a 14 million tons per annum and as a consequence, we are planning to process more stock pile material day this year.
This is the reason for a slightly lower production guidance.
Page 22 eight.
And is in line with the forecast disclosed on November Investor Day.
The team is continuing its work with the new government and the community to secure land for the new TSS.
The work associated with the TSA.
Technical and feasibility study is expected to be completed this year.
And Valla Dara Pascua Lama district, and drilling program to test the link between the underlying deposits geology and metallurgy.
Allergic or characteristics is underway.
Around valid there and they are still a number of untested opportunities to expand the resource and reserve base of both Lama and valid era.
Willing to extend that a day or a pit shell was also limited due to the impact of the pandemic and we expect to catch up with that during this summer and 2021 and the.
And our India region short term and new Greenfields discovery.
Our strategy is to build a critical mass of smaller deposits to create and mining complex capable of meeting our criteria.
As we reported earlier <unk> production was impacted by the pandemic related quarantine and movement restrictions imposed by the Argentine government.
This also temporarily.
<unk> demand and transitioned to the new phase six heap Leach facility, which is on track for completion.
And the end of the first half of this year.
As agreed upon with the government heap leach processing will be reduced during that transition impacting production.
However, the mine's performance is expected to improve and the second half of the after the new facility has been commissioned.
<unk> connection to Chili's power grid, and Pascua Lama should be completed by the end of this year as well, which will also reduce unit costs for the operations.
In Papua New Guinea, we have been engaging the government and discussions to seek a mutually acceptable way forward for the reopening of the poll Grub mine, which as you know.
And maintenance since the government refused to renew and special mining lease in April 2020.
I am in fact speaking to you from the capital Port Moresby today, where the discussions are occurring.
And if all goes well progress should re opened this year, but for the time being as I said in my introduction, we have excluded it from various 2021 guidance.
Yeah.
The Africa and Middle East region has largely as expected driven.
Post merger repositioning and reinvigoration of Barrick.
Its five year plan remains intact.
And steady while costs and capex coming down.
And there are plenty of opportunities to drive this performance beyond the time frame you see here.
Our immediate objective for that region is to either extend the life of mine of tongue on or replace its production after 'twenty two 'twenty three.
The Lula district, and Molly is still out and let's take generate on new ounces.
New logo and Carter again more than replace depleted reserves last year and there are big opportunities for more and both the Lula and garden cocktail and mining leases.
Despite the political unrest and Mali the complex exceeded the top end of its production guidance highlighting again, the importance of our strong and country partnerships and the agility of its management.
It's 10 year outlook is enhanced by the complex is third underground mine below the very profitable gold Qatar pit.
Which is on track to deliver its full first or development tons in quarter two.
And studies for a potential force underground mine and Lula and <unk> III all progressing.
I exploration group is also making good progress on advancing the targets across and Senegal on out from Budgie joint venture.
And Cote d'ivoire.
Brownfields exploration has added three years to talk on slot and a recent you identified.
And any 511 and follow up on.
With net potential to meet our criteria and eggs and extend the life on mindset.
Situated 15.
Punk on the meta tags on target.
And for resource definition and resource reserve tranche.
And rivers.
And I have conversion.
The Cote d'ivoire remains an attractive destination because of its prospectively and relatively sophisticated infrastructure and.
And we continue our generative opportunities throughout the country with the aim of increasing new ground holidays.
For reasons beyond its control.
How long has led a troubled life, but it has always managed to be very profitable and last year.
It exceeded its rent budgeted production for the first time in its history.
And the extended life of mine plan is being supported by additional exploration Optionality and exchange for a lower production profile and slightly higher costs.
Kibali grew its total reserves net of depletion for the success of <unk>.
Commodity was initially planned to progress two underground early mining, but the discovery of a series of significant open pit deposits has allowed us to gain processing flexibility by balancing the all feed over the minds change.
Pat.
The updated plan increases the mines gold production.
Two more than 750000 ounces.
And sustained throughout the current plan and given commodity strong target pipeline likely beyond that.
Kibali produced near the top end of its guidance range in 'twenty and 'twenty, while total cash costs and all in sustaining costs were at or below the bottom end of that range.
Kibali is the most highly automated underground mine and the Barrick group and a global leader in this field.
<unk> enables us to maximize its opportunities as well as the sufficiency.
It's three hydro power stations cheapest energy costs down and the recent introduction on the battery driven power performance system offers a further reduction of diesel generated power.
Okay.
Turning now to Tanzania.
We've achieved a great deal and this country since taking over the operations of the Acacia mines there.
On the exploration front.
Focus on getting a proper understanding of the geology is delivering exceptional results with north Mara and increasing its mineral reserves net of depletion in 'twenty and 'twenty, while a substantial growth of resources indicates a significant potential force extending.
Its life of mine.
Operationally and.
North Mara continues to improve in achieving production at the upper end of its guidance.
There's still a lot to do to realize this mine and full potential starting with the new oxygen plant and an upgrade of the cyclone cluster.
Recovery rates.
I believe once we brought north Mara and <unk> and Hulu into the latter half of the cost curve will be able to deliver and now that tier one complex and.
And barrick's portfolio.
Exploration net fully and new news is producing some very encouraging results and.
And as our understanding of that ore body improves it's becoming clear that itself will clause proportions with a measured and indicated resource of some $4 3 million ounces and and then third resource of $8 3 million ounces.
And still a lot to do to achieve profitable conversion to reserves.
The ramp up of the underground mining and processing and fully and Hulu.
Is on track and will continue through the first half of the reaching.
Reaching steady state annualized production and <unk> 52.
And the meantime, the feasibility study.
And optimized mine plan is being progressed.
Our third Tanzania and mine <unk>.
Schedule to and take care and maintenance on its way to close yet.
And that's the key.
And this year.
On the by the introduction.
On the <unk> mineral resource management.
And an intensified focus on geology.
And we've spent the two years since the merger and improving our knowledge of the legacy book.
Barrick ore bodies.
We've made significant progress and developing life of mine optimizations.
Just on the high confidence geological models as.
And as well as new operating plans and.
<unk> profiles and costs for costs.
When excluding the impact of the disposal of Massawa and our total resources grew in 'twenty and 'twenty as expected off the back of increasing and fed resources.
While 76% of reserves were replaced net of depletion.
This was also done while maintaining our above industry average.
The resource and reserve grade and is a testament to our focus on ore body quality, which differentiates us from the rest of our industry.
As our understanding of the ore bodies increases and as our drilling coverage improves.
Potential for resource conversion to reserves will grow.
But it will take some time.
For the group to reach the replacement levels of the Africa and Middle East region.
It's also worth noting that we have continued to clean up our portfolio with a focus on assets and opportunities that meet our specific strategic objectives and investment focus.
This is in line with our commitment to look to attract the best people to work with us to develop and mine and the best assets in order to deliver long term sustainably profitable results.
Our 10 year of guidance.
As an important tool to manage our sustainable profitability strategy.
This year's production as I've indicated will be impacted by the continued closure of program and the heap leach transition that valid era.
There are significant opportunities ahead for improvement and as I noted earlier, we have reason to believe that's a pull that cobra issue could still be resolved positively.
The five year outlook.
For copper is also positive.
And with all the trends as you see on this slide.
And in the right direction.
Our copper portfolio made another significant contribution to the group's bottom line last year.
The other day advancement of Zelda Baas chloride Leach project was impacted by COVID-19 restrictions and Chile.
Lamar and and Zambia produced near the top end of its guidance and jumbo side exceeded its guidance.
Costs for the overall copper portfolio were better or at the bottom of the guidance ranges.
The change of copper reserves year on year, principally reflect depletion.
True bonding.
With Lamar and are now operationally stable, there's significant exploration potential to grow resources and reserves on the property while extensions on load one net jumbo side are progressing through peak pre feasibility and should suit edge to edge reserves.
Yes.
As many of you know Lamar and <unk> has a colorful history, starting with its acquisition as part of the equinox deal and followed by years of operational disappointments.
What's that.
Africa and Middle East team has done with this as it is quite remarkable and summarized on this slide.
Through diligent operational Stuart shifts and focused on people.
<unk> sees cost discipline and sound geological and grade control practices.
This mine now boasts a long lasting and significant future cash flow generation potential.
Over the space of just two years production has increased by 23% costs have been reduced by 25% and net around $3 50 copper price is a little below where it is today the mine could produce in excess of 250 million.
And free cash flow per annum for many years to come.
A real testimony to the Barrick operating philosophy.
The new barrick's foundational objective.
It was to build a business capable of delivering the industry's best returns.
Two years on <unk>.
And we've made considerable progress towards that goal.
The dividend has tripled.
Cash flows have increased to record levels and.
And no one's crippling debt burden has been lifted.
These achievements were produced on the foundation of a great asset base.
Net for purpose corporate structure, and a lean and agile leadership, who have more than lived up to our best people mantra.
We've had our fair of share challenges of course, and then some.
But we've overcome them.
We've found or created new opportunities to support our sustainable profitability strategy and.
And we've more than we're more than ready to exploit.
<unk> that will be offered.
By the dynamics of the gold industry.
And finally <unk>.
As is customary how as I look back on our performance since the merger.
While I firmly believe there is significant value left and our share price.
Before any further improvements on growth prospects, we have already demonstrated clear outperformance as.
And as can be seen from this chart Barrick share process outperformed for the past 30 months and.
Hold on and either Randgold Barrick at the time of day merge I would now be some 30% ahead of the Gtx.
Importantly.
We are just at the beginning of an exciting and value creating journey.
Thank you everyone for listening and thank you for your attention on.
It's a good spread of executives on the call to assist me any questions.
We'd be happy to pass back to the operations and take care of it.
Our questions.
Thank you and you will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, and you'll hear atone and acknowledging your request.
If youre using a speakerphone please pick up your handset before pressing any keys to withdraw your question. Please press Star then two we will pause for a moment as callers join the queue.
Our first question comes from Josh Wilson with RBC capital markets. Please go ahead.
Good morning.
Mark.
Notice there are a couple of headlines today on the topic of M&A and consolidation and and the company share of reiterating its interest and being part of those discussions as well.
And to use on on copper.
Could you sort of.
I guess update us with what the views are more specifically I guess in terms of barrick's, one copper portfolio and then maybe how you look at these opportunities on the context on the market today with there being a pretty material difference and how copper prices have performed versus versus gold.
Okay.
Hi, Josh.
So I think the best way for me to answer that question, which is pretty broad as to take you back to two.
2000 and.
A non cade and 11.
And we're in a very similar place today and.
It was a it was a transformational period for Randgold resources at that time.
And increasing growth.
Gold price.
Notwithstanding that we did do a very critical deal right and the middle of a big Bull market and.
Hiring motto and ultimately led to the Kibali mine off today and.
At the same time, we we had a big capital program and we were building out on tongue on as well and and and and so we use that opportunity not only to expand.
Expand our business, but also to pay down our debt and you've seen the same focus this time round.
And we brought the data and we have no net debt now and we've we've started a dividend policy already before the ball price started moving this is allowed us to return more to shareholders as we did in and and.
220, non Jane and in fact, it started in 2008, I'd say T and your successive increase in and the dividend we paid despite the ups and downs of the gold price.
And Barrick is out at that point, we've got.
We are committed to returning about three 6% yield on the share price a couple of days ago.
And with the proposed 750 capital return.
And what we shared with you today.
And at the same time, we're not.
Putting the company and Jamie sort of debt and net debt.
Got lots of liquidity, we bolt on exploration teams and all three regions very solid leadership I think we've demonstrated that our mineral resource management and.
And our planning capabilities are now well entrenched and how executive teams and.
You know and led by our Catherine and Mark in balance.
And certainly can all take on and extra asset or an index.
So that's and then Asia Pacific roughly more than one Mark would say.
So we're well positioned we've got the strongest balance sheets in the and the industry is still growing.
And so now it's about.
And I'm, making sure that we deliver it and deliver that value to our shareholders and our crop and considered basis and again you know.
The question I would ask is.
And this.
And the bull market that we find out.
And everyone. They aim for more and more money to be returned to the shareholders very few people investing in their own and future everyone harvesting and this is you know this is a cyclical business.
The near the top of the cycle.
And and it.
Managing this.
It requires some conservatism and and considered.
No decisions and we think that we.
Certainly experienced and this we've got good memories, particularly Graham and I and the other executives and my team.
And so.
No and and.
There are lots and lots of as you know Josh there are lots and lots of businesses.
Whether that's a couple of wells that just three years ago.
Certainly were on the watch list and.
Suddenly they are you know theres no.
Risk and stress anymore, and so with that comes opportunity.
And as you know the discussions between Barrick and Randgold started in late 2015 and took some time to find.
Hey.
Deal, which rarely delivered real benefits for all the owners of both companies.
And so we are not you know everyone as you see and the market today everyone.
Every time, you wake up Theres a different opinion that's.
Considered to be the only opinion on where the markets are going to go and what's going to happen to gold and you know.
Well you should be putting your money.
And we are back.
Back and a great financial processes, well, we believe that.
The.
Net short on near term to mid term.
Outlook on on global markets.
And not there.
We believe that the.
Uh huh.
<unk>.
Technical support for a stronger gold price is still very well embedded and the market.
And and we certainly haven't seen the consequence of this unprecedented quantitative easing.
And that we've witnessed in the last nine months orders of magnitude of what we saw over the five year plan. So that's that's first of all the way we frame on our business.
Now you look at how your growth the best way to grow in times like this of course is organically and one of the things that I hope I shared with you and.
Through this presentation is every single core assets and Barrick has real upside that you can demonstrate.
And in particular, and most of them new discoveries as well as brownfields extensions.
So that's a that's a core component of our business and of course, they are and gain to be further consolidation.
<unk> and <unk> and we believe that.
You know the the challenge of doing those transactions is is going to not only be commercial but also the ability to be able to deliver a more.
Aligned more modern and.
Comfort to the owners the long term and resolve these companies.
Companies.
And and so.
And again I started out with the sharing of our ESG strategy, which I believe that ultimately is going to become a key driver and no one's ability to transact going forward.
Coming to your net.
And that's gold side and that's our core business.
On the copper side.
Again, we've demonstrated that we are.
We're capable of managing and delivering.
Real value and and the copper space Lamar on is got a long history of poor performance, we've been able to rebuild it.
And position that and we've always said you know I focus on copper is first prize the copper comes with gold and yoga.
Gold copper and geological to range and secondly that we would pursue copper assets, where they are located in countries, where we have and.
And can demonstrate a competitive advantage over the traditional copper miners and.
And we believe that.
That sort.
Sort of Central African copper provinces.
<unk> offers that opportunity for us at the same time back down in South America, there's lots of copper potential that comes with gold and the gold copper porphyry.
And Wow exploration teams at into the Asia Pacific also pursuing opportunities, where again net debt Geological Association is clear.
We're not I mean, I think the market responds.
Just because we talk about growth and we've talked about the importance and significance of.
Of for Barrick to remain relevant and the industry it needs to broaden and you've called out as being that we can sort of go out and just buy the first copper asset or company regardless of.
The opportunity to deliver value to both the target.
And as well as Uh huh.
We're not going to do that you walk this.
So with me for a long time Josh.
And we got too many checks and balances and my executive team to go out there and do something stupid.
So watch this space give us time, and we'll keep building our business and are considered way.
Great. Thank you very much.
Okay.
Our next question comes from Mike Parkin of National Bank. Please go ahead.
Hi, guys. Thanks for taking my question. One I had was you know we're seeing quite a cough cold snap come down through the U S and I was wondering if theres been any negative impact to the Nevada gold mines on.
Operations do a cold or is that anything that you would expect to maybe drive a bit of a soft Q1 or something that would you know probably bounce back with the resumption of kind of normal temperatures.
And Mark I would just say that you know where operations are located in Nevada.
Look on nickel and some of the Ah regardless of whether they felt snaps and we haven't noticed a cold snap was just call. Yes, we look forward to the on.
Sunny day.
So it's a bit like West Africa, and you have three months of range, where you get one meter dumped on you.
You know, we don't see it appropriate to use where that to explain why we called run out them on so.
Our team is well equipped to manage.
And northern Nevada, just like we are and and the Andes and South America.
And.
And you're definitely wait and see anyone using it as an excuse.
Okay and one last.
A question on.
Covid do you see any potential to implement a.
The company kind of sponsored vaccine clinic to get vaccines to your employees at a faster rate and government programs or are you looking on it to just leave it with the governments of your respective host countries and.
Go that route.
Okay.
And to do is partner with our host countries and and and.
And the case of Nevada.
Right.
On combating COVID-19 and its impact and and.
And bought two operations, we now have.
Covid.
The.
Partnership.
Led.
PCR laboratory, which support.
Protocols and that free cash.
Kevin.
Further on.
Accurate tests and a <unk>.
Yeah.
And that's been very helpful and we got two more true ready rollouts on.
The laboratory and Tanzania, which we're working on it and one in Zambia and we've.
Just quick one and two.
And as well.
So and to the town of marathon.
So that's you know.
And again and all our countries we are very much part of the Covid.
Task force and and.
And our senior executives are now being included in the.
And vaccine logistics, and sort of management structures and out various regions and and.
Cuz counties.
Or.
Provinces.
And Kathryn is very much part of.
Of that initiative, and Canada, as well as and.
Nevada, as as Greg and immediate part of that.
Alco any marker region.
In northern Nevada and.
And Africa, we part of the whole African Union initiative to source and and support the and the rollout of vaccines, it's a little more complicated day, but.
But there's been some movement recently and we've seen the first Johnson and Johnson and vaccines coming into South Africa, and we look forward to build and manage that.
And to the across the nations across the countries and which we operate and Africa South America with we were early partners with the Dominican Republic and.
Setting up structures to purchase and order vaccines and get them and to the country. We've got a very strong relationship and.
And worked extremely well, it's one of the most responsive.
Covid initiatives has been the as you know.
Dominican Republic is.
And being a holiday destination got hit very hard and the early days of Covid and then we are working again with the Argentinian junior and government on.
Sourcing vaccines.
And again, all the emerging and developing world are slightly behind.
And the developed.
Economies as far as rolling out that vaccine is absolutely critical for us.
And then.
And to manage a global solution on the vaccine rollout and so.
Now we are part of it at this stage it is not possible for private enterprises to purchase vaccines themselves, but we.
We are partnering with the with our host countries and already.
For instance, and Nevada, we're talking about.
Uh huh.
And at some of the vaccines to the critical.
Critical support staff within the mining industry as well as other industry. So it's a very collaborative initiative and.
And where.
It's been an impressive partnership.
All 13 of our host countries and and.
And.
I'm optimistic.
Bringing this.
And they make under control and the and the medium term, it's definitely not going to happen as quickly as everyone would have locked and so it's it's very important we all continue to exercise.
Discipline and.
And respect the protocols of.
Social distancing et cetera until such time as we get a.
And I view that T and changed and our populations.
Thanks, Mark and all the best on the negotiations with per GAAP.
Thanks, Mike.
Our next question comes from Danielle <unk> of Bernstein. Please go ahead.
Alright. Thank you and my first question is on your climate targets say, they seem significantly more ambitious and they set at the Investor day, and say could you give us any color on specific projects. So specific actions that you're planning, which will lead to those higher and reductions in greenhouse gas.
Yeah.
Oh sure.
Daniel.
We are ambitious I mean, we're very clear that our target is.
To achieve a 30% reduction by 2000 and study and.
Yeah I think.
And net zero target out to 2015 is a bit academic at the moment, because and then Vegas well I know that there is no gold mining company that goes to 2050 and the current plan.
But.
So and important.
Is that.
We I and my team by and large.
Raj team now have always been absolutely clear that we manage our business on tangible plans. So.
There is a target everyone's.
Being under pressure to the extent that day targeting.
X Y and Z that doesn't mean anything if you don't have a real plan against which you can measure yourself and so we started out with a plan to deliver 10% Jim reduction last year last year and our 2019 sustainability report, we've now increased that to 15.
Percentage reduction we've got a serious.
And every single one of our operations and he's got a very specific.
Greenhouse gas strategy.
Whether it's a valid arrow and we are rolling out the connection with the two.
Chilean power grid, which is the.
<unk> has more sustainable.
Uh huh.
Power component and to add any other.
And.
And power utility.
And the.
And.
And so that that really does take away significant emissions and also drops out costs materially and that.
On that Dara and the Dominican Republic, we are the leader in that country.
And with a conversion from maybe feel to natural gas driving big turbines very efficient very low emissions and and.
And not only beforehand.
And PV, but also for the nation.
In Nevada, we.
Reported with the joint venture and.
And the Newmont coal power station and we are already well down the road on converting that to.
Our natural gas and also we are there.
Busy permitting at 200 megawatt.
<unk> power station, which will be linked to that.
On natural gas.
Facility and we've got on a second one as well and.
Sure.
And Kibali, which is our youngest mine and the group.
And we both on the back of Hydro power installations, and recently as I mentioned in my speech, we've added a big battery to that and we've learned so much about how to form a grid and many grid.
And remote and a remote place like the jungle and DRC and that battery technology is proved to be invaluable and we are not looking at changing around.
The whole construction of our grid and.
And using the battery is the formation to form the grid and the power the hydro power to actually keep the batteries charged.
And and Kibali is unique and and it's got a big hoist.
And it's constantly drawing large amounts of power from the grid.
What we've learned there and we've just commissioned a 20 megawatt solar power station and gorilla.
And western Mali, and we know that there is an opportunity to and.
Stalled similar battery technology, and sorry, non merida and Lula is on car to us and and be able to form the grid and use the solar to keep those batteries, Todd and therefore do away with a lot more of the.
On the diesel and heavy fuel powered component of our power station, there and so and then the opportunities and you know.
Further as natural gas power and there's more and more opportunities now as people start investing and hydro and Ah and Papua New Guinea, which has got some very exciting potential thoughtful harddrive comp, particularly and not.
And the highlights so you know when you walk through our portfolio I'm, just giving you a quick Russia, what and and and.
You can't just say I'm going to reduce power you've got about a plan to do it and and one of the things that Barrick is investing and as that technology to ensure that the next year bond we bolt is even more.
Efficiency bolt intuit as far as generation guys compared to for instance, kibali.
We're learning every day and and I believe that if we continue with that focus and every single general manager and senior executive and Barrick is and I know this commitment to our stakeholders.
I hope that answers your question.
And that's very useful color. Thank you.
And just one more from me on on Tanzania, you talk about making north Mara and possibly a tier one mine and I'm trying to conceptualize how that happens is is it the case that some of the geological upside results and a different way of operating gold mines, and I can and broader complex, how should I be thinking about that.
300000 ounces out of those more and more than about 250000 ounces out of <unk>.
And Hulu you add them together that's 550000.
North Mara has a moderate grade mine.
But he is a high grade mine and we drive the cost out and to the bottom half of the cost curve and you've got a tier one and complex combined and the country and they both have more than 10 years loves substantially more than 10 years.
So that's really our focus and and.
And what what North Mara has got a bit of a way to get to that low end of the cost curve, but will get us there because it's got so much upside we still got to lift the production fully.
<unk> significantly by the grade of that or what.
Great. That's helpful. Thank you.
Yeah.
Our next question comes from Mike <unk> of Bank of America. Please go ahead.
Oh, Hi, Mark I hope, all is well and they're not face a cold snap and port Moresby.
Just moving to I have a question on hemlo and they are.
<unk> by the steady state 1.9 million tonnes per annum production.
Well what are they how much tons will come from each of the mining fronts to get to that production level.
And what would that mean to the mine production.
Right now.
My accounts, but then no chance of a cold snap.
And what most Rioja initially.
Yes.
[laughter].
And what about the coldest again is when you turn the agro initiative down to about six data center growth.
And B.
Hemlo is.
Look this year is about 200, and then 10000 ounces.
And the plan is to get it up to about 250000 ounces.
From.
Underground.
And that's why we need that extra access and the <unk> zone, which we are developing now and.
And you can do the math just work it back.
But it's.
It's really.
It said too.
Our first price would be to get and get it up to 250000 ounces.
And as we improve the infrastructure the hoisting debenture.
And the ventilation and one of the big challenges is getting a lot of the waste out of the mine to improve our logistics and all movement.
Right now and all that is constraining, we still got a developed.
On a long.
How open stope opportunities.
We got to improve our backfill.
And we've still got quite a bit of a remnant mining that we're doing and this next year and perhaps the year.
Call it to 2022.
But and and at the same time, we're drilling and and building that.
Reserve base to support a plus 10 year, plus 250000 ounce producer, which makes it a substantial Canadian gold box.
Okay.
And good luck there.
You know that Manuel and Qimonda.
Oh.
Oh, sorry on 19.
And 88.
88 with Corona.
That's it.
And it's still got legs.
Yes, it does.
Yeah.
Our next question comes from Anita Soni from CIBC World markets. Please go ahead.
Good morning, and.
So my question is.
With regards to on reserve replacement. So I saw some strong reserve replacement at a pretty good grades, but I'm going to ask you about the question on areas like the little bit on.
Particularly at Nevada Gold mines and.
And you guys had mentioned that it's going to take a few years to shoot to fully see the results.
To get it up to where you are in Africa in terms of reserve replacement and so can you give us a little bit of color on the plan forward and the next year or two in terms of getting that those grades and those ounces backup.
Yeah, so and H.
Yes, just trying to explain and I'm not sure what you're talking about there because you know the.
If you look at.
And North America, we went from 31 million ounces in 'twenty.
And non gene. This is reserves now at 268 grams, a tonne to 29 million ounces at two eight grams, a ton and so.
And.
The if you look.
Africa of course, we've grown.
Certainly on the back of the Lula quota and.
And Kibali and North Mara replacement.
Tongue on is a tougher nut to crack because it is and the plot and bull.
And who the big growth will come.
As we complete the underground feasibility study.
So and North Mara on North America is in good shape and.
And you know.
It's on first of all you've got a boulder.
Resource profile and and we're very disciplined on the grade.
And so.
We've done that and hopefully and each of you and as seen in my presentation knee pointing to further resource expansion and you've got a bowl that front ahead of the mining faces in this and in inventory first and then and then third ultimately it gets into measured and indicated which was.
In reserve.
And you know.
It's going to take some time.
And 76% replacement right now with a with more than 100% replacement on the resource category.
And bodes well for us too.
To get all of our assets.
Delivering reserve replacement over time, and and now and just take you through it as I pointed out PV is a simple case of significant reserve growth.
<unk>, we didn't get the drilling done we wanted to and 2020 because of the restrictions of Covid. So a lot of that drilling is being rolled over to this year and and.
And again, we expect to make.
Meg.
Significant process progress.
Progress in the <unk> the full quarter's expansion on this.
Current fellow there are puts.
And then yeah, we've pointed to north level, some significant upside potential <unk>, Hey, we're busy drilling at we've got the lower part of Rita K now coming into the mine plan and.
Our reserve conversion and Napa part, we're still dealing with the water table and making sure that it's accessible which means you can bank it.
And we've got some into a mine plan and reserve, but still quite a lot more outstanding.
On the there's still work to do and.
Both.
Turquoise ridge underground as well as our twin creeks.
And then.
Cortes.
As we develop and deliver on the feasibility study for gold rush and you'll see some significant ounces flying into that complex.
I'm really very comfortable about where we are as far as understanding on geology and.
And being able to win some.
And I'll go to the minds now is like I got to get in and.
Kibali and Lula.
The MRM team have a plan to convert.
It's part of our business.
And I mean, we even added ounces and Paul.
And we're asked this before the close.
And that's got some significant upside and that's what comes with tier one assets.
And I hope that gives you some comfort.
And to that.
And the most important thing is that the quality of our resource stroke reserve.
Is.
Still in fact, and we haven't allowed.
Anything to deteriorate on the back of a higher gold price we've kept the 1200.
Yeah, No I didn't notice the grades were maintained or if not improved yet most of the assets I'll just drilling into some of that long Canyon Phoenix Carlin and took quite some time.
And quite keep pace with the rest of the assets, but thanks for the explanation.
Okay.
They're worried about long Canyon and remember we've sold long Canyon as we as we.
Re hostile permitting.
And so that's that's looking for a second phase expansion of the life of mine and that would also impact our reserves at the moment, we don't have a parameter it's not coming into the reserve.
And what part of long Canyon.
Okay, and then my second and final question I guess is a long one but you've.
You've talked about industry consolidation on the gold space and I just wanted to understand what exactly it is.
But ah that catches your eye so much.
With the with the assets that are out there and if you could give us some parameters on what exactly you're looking for and how that competes with your internal projects.
Okay.
I guess, the best way is to one back and everything too.
2017.
Clearly 2018.
And you and your portfolio of companies.
Companies, you're covering a lot of them.
Very stressed.
And then suddenly everything is terrific.
With a higher gold price that doesn't change and the long term.
And ability of our industry and then we've got a couple of.
A single asset companies that have struggled to deliver against their feasibility study, but it's being kept alive by.
The higher gold price.
And.
Our industry is right now and a place where it's not worried about its future and and on and on.
This to both the fund managers, who are keeping demanding.
Cash returns, it's not worrying about how you package.
Use this higher gold price to package.
Repackage, our industry, which is required to create a relevant industry as allocate.
Allocation of capital becomes more sort of larger and more and more.
Clumsy.
Going forward.
The funds are just getting bigger and bigger and it and they need the dol to be moving more.
And so and at the same time, we've got management teams that are just hanging on to this opportunity using the COVID-19 and the higher gold price.
Revenge.
The conversation around consolidation.
But it's not going to be like that forever, we've seen the market respond.
On the <unk>.
Softening gold price or the BSL thats way above the sort of average.
And and that's why it's important for barrick to be to have the strength financial and management bench strength to be able to force some of these.
And our opportunities.
On the criteria, we've been very clear.
Yes, we look at two categories of opportunities tier, one which is plus 500000 ounces.
At the bottom of the cost curve within the bottom up from the cost curve.
And tier two which is sort of above 250000 ounces and.
At the bottom half of the cost curve.
And both having at least 10 year life of mine and potential so yes and.
And then and in times like this as I touched on in my presentation.
And as.
And our motto acquisition, we made in 2000 and on and the middle of the crisis very solid.
Well structured bull market and the gold.
And the gold price and we did that acquisition. It was a world class acquisition when you read on.
And it and it has delivered enormous value to our business and so.
And there is.
The key is not to buy.
And I would and it.
It's a conversation that should be had because.
And it is sucking money out of the gold industry doesn't do anyone any favors.
And both in this industry is.
And I was very precarious and 2017 2018, it hasnt changed.
It's just you can't see it because of the higher margins.
And so.
Yeah, I think it's important that we and then and that's why I keep bashing that drop.
Or beating that drum and net.
I think we need to do and notwithstanding that as <unk> seen Barrick is rarely invest it and it's.
Organic opportunities, both brown and Greenfields and we'll continue to do that as well.
Okay. Thank you and just wanted to close out by congratulating you on your cost control. Those are that's a pretty good result, considering the posture and and they are going forward.
Thank you.
Thank you and I appreciate it that's coming from you.
Our next question comes from Matthew Murphy of Barclays. Please go ahead.
Hi, there.
Just wondering if youre still expecting to formalize a dividend payout policy.
This year I thought it might have some with this quarter or is it something and you're looking to do early this year.
Yeah Yeah.
I think it's important and I did touch on this and that my mother and says you know.
A lot of debate at the board and amongst our executive team on.
How we manage this.
And again, if you on back to 2008, non and 10.
The way, we manage that return of capital to shareholders and our dividends.
Dividend strategy.
Very similar this time around.
We have no visibility on now the.
Short to medium term.
Economy or a market.
Look stock and I think we definitely I mean, we realized non core assets. We believe it's important to return makes logical sense to return on that.
But part of that to our shareholders, which I've always done my whole career.
We've used the cash generated by our business to bring down our net debt and cover ourselves.
And so that we are completely independent.
The capital markets and are able to run our business without interference.
And that's done and I'm very happy that we will continue to build a cash portion of our balance sheet through this year the gold price stays above 1700.
And so and then and we believe that.
This whole and crazy and so.
ARIA.
Is is unclear and extremely dynamic and I'm pretty.
Confident to be able to bet you that the cash.
Current analyst outlook on on what it's going to look like and 12 months time is all wrong.
And so on.
Board and and debate without management team.
Landed on the fact that it's better to return unless it's a significant return added to our non sensor caught quarter day levels about three 6% yield.
Current Gulf share process actually of the tire and today.
And then we'll reassess things next year, where I'm sure things there'll be a lot clear to everyone.
Okay. Thank you.
There are no more questions from the conference call.
Yeah.
This concludes today, thank you very much.
Yeah.
Yeah.
Alright, Thanks here I'd, just like to say to everyone. Thank you very much for making the time today and.
And we're pleased that we got through this presentation and a lot of people put enormous amount of effort and to the communications and everyone was.
And really concerned that we might break out communications through this process.
Thanks to everyone net forever, but and then again and thank you from making that John and to join Us and.
We will speak to you soon.
This concludes today's conference call.
Should you have additional questions. Please contact the Barrick Investor Relations Department you May now disconnect. Your lines. Thank you for participating and have a pleasant day.
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