Q4 2022 Barrick Gold Corp Earnings Call
Ladies and gentlemen, thank you for standing by this is the event operator.
Welcome to Barrick's results presentation for the fourth quarter and full year of 2022.
Following today's presentations a question answer session will be conducted.
You have a question on her joining the events by telephone. Please press Star then one on your telephone keypad.
We will also be taking questions from those in the room.
As a reminder, this event is being recorded and a replay will be available on barrick's website. Later today February 15th 2023.
I would now like to turn you over to Mark Bristow, President and CEO with Barrick. Please go ahead, Sir Thank you very much mem and and a very good morning, and good afternoon, ladies and gentlemen for those yard in Toronto and elsewhere across the globe.
As you know we are going to be talking about a quota for them.
2022 results today.
And looking back the past year it didn't.
Turned out the way anyone expected I'm sure you'll agree with me.
But against a background of.
Further geopolitical deterioration there was some fundamental changes in our global financial landscape, which Herald heralded the I believe the end.
The easy money era.
And a new regime of high interest rates high inflation and high risk.
On a positive side and in response to this gold was one of the better performing asset classes.
It's also good to see the cover price pick up.
While gold has always being the world's most precious metal copper has I believe become it's most strategic.
Barrick owns the industry's biggest and best gold portfolio.
We are the largest producer in the United States and Africa.
We are steadily increasing a couple of holdings.
And as I plan to share with you today.
Moving long term strategy drives our ability to create and deliver value even in difficult times.
I draw your attention to the formal cautionary statement, which can be reviewed in full on our website.
Yeah.
In our 20.
2018.
When John Thornton and I agreed on the merge of Barrick and Randgold.
We spent a lot of time designing this strategy, we would use to create a new industry leader.
We wanted a company.
That would stand out from the crowd.
Driven by a fundamental promise to all stakeholders that we would do what we said we would do.
And we have done exactly that.
Since then we have produced around 19 million ounces of gold and 1.7 billion pounds of copper.
Gold reserves have increased to 76 million ounces.
We have returned $4 billion to shareholders.
And at the same time invested seven and a half billion dollars into a rolling 10 year business plans.
And significantly Delever leveraged.
The company.
Justin 2022 copper resource has increased by more than 124% euro per year.
And we've set the stage for our growing exposure to.
To this critical future facing metal.
On the portfolio optimization front, we have achieved a $500 million of annual synergies at the Nevada Gold mines joint venture.
And they have transformed the legacy Acacia assets in Tanzania.
Which now produced gold at a level that meets tier one production status as a combined complex.
And finally, moodys upgraded our long term credit rating to eight three from B double a one the highest credit rating in the gold mining industry with a stable outlook.
Turning to the results.
The highlight of our busy was the significant increase in our gold reserves and resources.
As I've said before our ability overtime to more than replace the ounces. We mine is one of the attributes that sets us apart from our peers.
As it reinforces our sustainability and drives the growth.
Our 10 year production profile.
In line with our strategy of increasing our exposure to copper we've also more than doubled our copper resource base over the past year.
Coating Accordingly, we have started work on the reconstituted Rick Burdick project in Pakistan, one of the world's largest and highest quality undeveloped copper gold deposits.
Added to this.
Pueblo Viejo gold mine in the Dominican Republic added approximately 11 million ounces of reserves and started with the commissioning of its plant expansion project.
In Nevada.
I'll address your advanced to the next stage of its permitting process and turquoise ridge commissioned its third shaft.
And on the organic growth front bad brownfields exploration continued to unlock potential around our existing assets.
Greenfields work started to deliver some real future value.
The standout was a very significant intersection at the Dorothy target at our barracks four mile project, which I'll tell you more about later.
Despite our strong fourth quarter and the usual solid contribution from the Africa and Middle East region Gold production ended around 1% below guidance, mainly due to the need to fix some of the infrastructure at turquoise ridge and lower <unk>.
<unk> processed from Cortez.
Copper production was well within guidance.
With similar input prices expected in 2023, and a slightly better production profile cost per ounce auspex expected to be at or slightly below our 2022 levels.
As I pointed out.
But it's one of the strongest balance sheets in the industry. Even after the return of another record $1.6 billion to shareholders in 2022 through dividends and share buybacks.
At Barrick, we believe that in mining the greatest value creation opportunity comes from discovery and development. Our preferred strategy is to find out ounces and if we buy there should be a real future potential to add to what.
We have been by.
Thanks to the continuing success of our exploration programs, we've a great again grown our gold reserves over and above the annual depletion delivering $6 7 million ounces of reserve growth year on year at.
At the same time attributable gold resources increased by 10% and as I noted earlier copper resources more than doubled.
Despite the continuing improvement in the leading and lagging indicators <unk> safety record has been badly blemished by tragic fatalities in 2022 and the year to date.
All of these have been thoroughly investigated and the lessons we learned are being applied throughout the group.
Significantly most of these fatalities, which suffered by our contract is showing that our oversight of their safety systems and protocols needs to be tightened up.
Which we have prioritized as part of our Onboarding and ongoing interaction with our business partners.
Sustainability, ladies and gentlemen is fundamental to barrick's business.
We believe that climate risks.
<unk> T and biodiversity loss are inextricably linked and should be managed holistically.
This approach is based on our commitment to supporting the socio economic development of our host countries and communities.
Last year, we invested more than $35 million in community projects.
Kris a greenhouse gas emissions by around 2% in line with our plan continued to expand our green energy sources.
And achieved our water use efficiency right.
Well above our target.
80%.
Delivering.
For Barrick sustainability starts at the mine planning stage and begins well before the mine is constructed.
And at <unk>, we plan to show her mining can be at the forefront.
The achievement of the UN sustainable development goals.
This massive project is expected to have a transformative impact on the impoverished chugai region.
In Baluchistan province of Pakistan.
Creating thousands of jobs and stimulating the growth of our local economy as we have done in our other projects across the developing world.
While first production is targeted for 2028.
We've scheduled the disbursement of social development funds and advanced royalties to the bullets, you Stan province, well in advance of first production ensuring that as people will get an early return on their share of this new partnership.
We've also started employing a local workforce and recently appointed Baluchistan national as our country manager.
Moving on to operational review, we'll start in North America as usual with a relatively new leaderships for the region and Nevada gold mines, all focusing on teamwork and effectiveness.
With particular emphasis on agility integration and rapid response to operational variations.
As I noted earlier.
Collyn Cortez.
And turquoise ridge were impacted some by some unforeseen production issues.
But staged a strong comeback in the fourth quarter.
The commissioning of Turquoise Ridge third shaft is expected to deliver continued improved performance as the underground operation ramps up.
Nevada is barrick's value Foundation.
And the benefits of combining the assets in a N. G. M are now becoming evident in the form of mineral resource growth and new discoveries supporting future.
Reserve conversion and adding to our rolling 10 year plan.
Some of which are shown on this map.
The quality and prospectively of this complex cannot be understated and we are excited about the recent success we have achieved.
At four mile Robertson and call it.
At Robinson, a maiden reserve of 1.6 million ounces was declared with further expansion potential between existing deposits and a long strike.
Within Collyn, we grew last year's inaugural resource to 1 million ounces at north level, while north turf continues to expand towards north level and Horsham is a new project is showing significant growth potential east of the levo fault.
And it ran drilling has added to the resource base and an increased understanding of the controls on mineralization.
As I've already touched on Dorothy is a particularly exciting target some 100 meters north of the formal resource.
Drill holes have returned some impressive intersections pointing to a new discovery.
A significantly and significantly increasing the potential of four mall as well as identifying further untested extensions to the mineralized trend that makes up both gold rush and formal resource and reserves to date.
These represent results represent some of the best intersections ever returned from the formal gold rush trained.
And drilling will now focus on expanding the zone of high grade mineralization.
I have seen drilling depths like this before.
In my career.
And they all what every exploration geologist lives fall.
As a reminder.
When we formed Nevada joint venture with Newmont in 2019, the companies agreed that a number of assets would be retained by each company to be vented into the joint venture at a later date.
So on that point.
Formal is 100% Barrick owned asset and when you look at the resource potential at the moment it looks like around 15 million ounces and gold rush and about full and so certainly these intersections bring us and we've combined the two with potential to go well over 20 million ounces.
And that's the sort end and when you look at the size of these deposits are relatively small as some of you will appreciate in volume, but very big as far as answers and so we're super excited about this a recent development.
Yeah.
Yeah.
The exploration team in the North American region has driven some significant changes and exploration strategy in the last two years with a strong mandate as we shared with you at our Investor day to expand beyond.
Nevada, and evaluate carpet up copper opportunities as well.
We restarted barrick's exploration in Canada building, a new team and portfolio, which has been a real success without first option agreement near Hemlo being signed in the last quarter.
In the U S. In addition to the exciting brownfields targets I'll talk about next the team has secured three further option agreements both in the Great Basin area in Arizona and also in the Walker Lane epithelial district in Western Nevada, which already returning.
Early results.
A dedicated new business team is actively evaluating all opportunities across the continent as always with a clear focus on our strategic filters.
Moving south to.
To Latin America, where full year production was within guidance despite recovery issues at valid era.
Pueblo Vaca ended the year with a record throughput a major achievement considering the plant downtime required for the expansion tie ins.
And the expansion project will extend the mines tier one states as far into the future.
Construction continues to advance and commissioning of the plant is currently underway mean.
Meanwhile, permitting of the new tailing storage facility is expected to be completed around mid year.
The existing facility can handle tailings until the end of 2027 by which time, we expect to have the new facility commissioned.
Yeah.
Xeloda, which as Youll recall is high up in the Andes was impacted by an extended winter low Leach recovery, which we are still wrestling with but significantly improved production in the latter part of the year.
The long awaited cross border link to the Chilean power grid was switched on in December .
And will reduce the mine's energy costs as well as its carbon emissions.
Dara continues to suffer the effects of Argentina's enduring currency crisis.
Reflected in higher labor and local contractor costs and.
And we remain engaged with both the federal government and the provincial government to try and find solutions.
Our exploration team on the other hand has been developing our Latin American portfolio in line with our drive to expand our presence in this region.
And we continue to progress our collection of early stage projects.
Specifically in the Vela Darragh District Geological work is focused on targets with the potential to add to the valid ore mines life.
We have a portfolio of untested targets close to the mine with some exciting results being returned from Nomura Escondida targets, specifically, where drilling has confirmed and is extending a zone of strong mineralization near surface.
We've also been looking closely at the prospective El Indio belt, which hosts valid era and other bonds, having completed a large data compilation and reinterpretation exercise. We're now looking to evaluate the significant remaining target areas over the next.
Three years.
Moving across the World to Asia Pacific.
Progress continues its progress towards restart under new ownership structure.
We expect port program to reopen in 'twenty, two 'twenty three but the assay. It remains excluded from our guidance until such time as we have finalized all the agreements and outstanding matters.
In Pakistan, we have started the environmental and social baseline studies for Ricky <expletive> and our inventory and our introductory engagements with the local communities I have been personally leading.
<unk> is a fantastic example of the tremendous value that can be created by developing what is essentially a.
Found deposit rather than paying large acquisition costs, and then having to fund future development obligations.
As is more common.
In two days mining industry.
The Africa and Middle East region delivered its usual solid performance with both gold and copper production well within guidance.
It's energetic new management team has been mitigating the impact of inflationary pressures include.
Including through the ongoing solar expansion and battery installation projects at Lula and Kibali.
The Lula Guncotton complex in Mali continues to improve production at lower per ounce costs.
It's expanded solar power and battery plant will replace 23 million liters of heavy fuel and reduce greenhouse gas emissions by a further 62000 tons. When it is fully commissioned.
The Lula district is still one of our happiest hunting grounds.
Across the river in the budget permit and Senegal, we've defined the 26 kilometer long highly prospective trained we call. It the bomb Budgie main shear zone and identified nine key targets, along which we will be drilling to test for tier one scale system.
<unk>.
This is in line with our strategy of testing the major structures on the modeling side of the district, which is delivered so much success.
Moving now to the Democratic Republic of Congo, Kibali is processing capacity was impacted by a rock winder change yacht.
But that is now behind us.
As already mentioned the planned solar power and battery storage system will provide renewable backup during the dry season.
Kibali is K Z zone continues to reveal exciting potential and multiple targets are being progressed.
We're about to start testing the western side of the KC D deposit.
Which could host additional high grade mineralization shoots.
While it's still very target shown on the long section here confirms the potential of the trend with high grade mineralization being intersected.
Tanzania as I pointed out in my introduction is also a standout example of what Barrick is capable of achieving.
And under three and a half years, we've completely rebuilt the two derelict mines, we took over from the previous operators to a point where their combined production is that a tier one level.
We've also resolved some of barrick's, most challenging legacy issues and regained our social license and a pioneering partnership with the government you can see the results of our efforts here.
We've got big plans for both mines as mining is scheduled to commence at the new Jenna open pit later in quarter, one and we'll leverage the investments made from our transition to owner mining.
While the new underground fleet at Bouillon, Hulu continues to deliver on our ramp up plans.
Okay.
Turning now to our copper portfolio, the Lamar and Amman in Zambia as another asset we've successfully revitalized and forms a key part of our growth plans.
Postures production was at the upper half of the guidance range and our ongoing transition to owner mining, including the investment in a brand new fleet has positioned Lamar I know well for potential expansion and significant mine life extensions.
The team is busy with a pre feasibility study, which is expected to bring the development of a new super pit into our business plan by the end of 'twenty 'twenty four.
Jumbo side in Saudi Arabia, also delivered production and cost metrics that were within or better than guidance together with reserve growth above depletion, adding another year to the mine life.
<unk> in Chile produced a consistent performance.
Performance.
In Saudi Arabia, we're expanding our exploration presence and partnership with modern with two new Greenfield projects.
Jabot, Sayiid, south and the Omaha demand projects.
Also at your bauxite mine itself strong results from deep drilling at load one are on track to support another year of reserve growth while exploration results continue to confirm the further discovery potential within the mining lease.
Demonstrating our commitment to strong shareholder returns.
<unk> 22 payout.
As I pointed out in my introduction.
A record $1.6 billion and included $424 million in share buybacks.
We have introduced a new share buyback program of up to $1 billion for the next 12 months.
Our returns to shareholders.
Have not been at the expense of organic growth as can be seen from this profile.
We continue to invest in and roll over our tenure gold and copper plans, which demonstrates real organic growth. In addition to a consistent base case production profile.
Since the merger with Randgold.
Barrick has consistently outperformed its peers in operational delivery and capital discipline.
In line with our clear strategy the delivery of our plans on the back of the quality of our portfolio means we are in the privileged position of being able to generate significant free cash flow into the future.
This ensures we can continue to invest in our future and provide returns to our shareholders.
Embedded in our existing portfolio is an unmatched pipeline of quality projects in which we are steadily unlocking value as we have done from the existing operating assets the.
The ability to grow without having to buy is a significant differentiator and I believe that in time this embedded value in our portfolio will be recognized.
Putting it all together.
Presents a powerful case for investment in Barrick.
There is no other mining company that has our proven long term strategy.
Quality assets.
Our growth projects.
Our world class team.
And our social license to operate.
And through a mutually beneficial partnerships with our host countries.
Our existing copper portfolio as a differentiator both in terms of the significant contribution it is already making.
And the ability to grow it further.
With banks long term plans firmly in place and a world class team, we have the ability to ensure we will be sustainable into the future. Thanks.
Thank you, ladies and gentlemen for your attention and we have a team here in Toronto, and we will be happy to take any questions.
Thank you we will now begin the telephone question answer session.
To join the question queue via the phone you May Press Star then one on your telephone keypad.
Here at town acknowledging your request.
You are using a speaker phone please pick up your handset before pressing any keys.
To withdraw your question. Please press star two.
We will pause for a moment as callers join the queue.
Yeah.
Our first question comes from John Tumazos, a private Investor. Please go ahead.
Thank you very much for all the great work.
Looking ahead to a year from now.
Which technical studies.
Do you anticipate getting done in 2023 to permit large additions to reserves and resources comparable to the <unk> com one.
And forever.
Additions at year end 2022, as those multi year programs for fruit.
So thank.
Thank you for that.
I think the big focus for new growth is Nevada itself.
You know that that is more lumpy because we.
We define sort of expansion.
Resource inventory initially than we drill it out to a third rig.
Resource, but really we only banquette, our when we get underground and drill from underground and we've got a lot of.
Development going in particularly in the northern level area.
As I pointed out the rain project has now got a development drive going and we're excited about that we think that's got potential to more than double its current minable resource and converted all to reserves.
The Robertson project itself has a lot of upside we've just started drilling that out now.
And and again, we are drilling some of the gap areas like the fence line in between the old twin creeks and turquoise Ridge, we've got some interesting work coming on the Bvt, Colorado.
As an interest we call it bvt, because it stands for better be there and.
And we've confirmed that it is there so we're now developing towards towards that target. So so nevada for us Israeli exciting we've got some new exploration targets, which will be sharing with you in due course across the Americas the northern Americas.
And and we've opened up new exploration projects.
Projects in Dominican Republic, I've shared the work that we're doing in.
Around <unk>, which is important to ensure that we extend that life of mine.
And then in Africa.
We've got.
A significant opportunity that's there.
We now focused in on and the joint venture with modern on the AMA Tomorrow project, which is a very real copper.
Target has got mineralization on the surface.
And and and again, we think that we can reconfirm, what we believe we get we have we can model the.
Vms surface.
Geological service that connects these targets together.
To the jumbo side deposits, which are high grade copper deposits.
Our team has now started consolidating ground in Tanzania, and again, Tanzania is as you know has been largely.
Neglected by the industry for more than a decade and and so we're excited about that we also have a big team focused in on.
Central African copper belt, as well as the east and the whole eastern part from.
From Kibali down into the Victoria Goldfields. So if you look at that and that's a product of us investing over the last four years and in really lifting the game and quality of our exploration teams and I, absolutely believe that we day to day and so.
So you know we locking in.
In Africa, because of the history of our work that we can show you how we got to replace the reserves into this year, but we're not we're not going to replace all the reserves every year, but over time.
If you look back to 2018 and the merger.
We produced 819 million.
Ounces of gold and we've replaced it all plus so and that's the difference. That's why you know this industry I've been repeatedly saying doesn't invest in its future and that it it has to.
Go to walk to the last resort of buying assets at whatever it can get in the market.
And in my career I've spent my entire career building organic opportunities, which is the only real way you make.
You make you create value and that doesn't mean to say we were not.
Shy of.
Doing M&A and and if you go back to the history of both Barrick and Randgold.
Barrick built its business on M&A, but more importantly on the work after the acquisition and adding significant value through the drill bit and so did.
Randgold. So these two companies now one has a good memory on how to do this properly and and and I think we did you know you can you can you can say whatever you lock, but the fact is we've done it we said we would do it we've done it and we've now got a foundation on which to come.
Two new to deliver that value and that's really the difference.
And rules will still look at opportunities when they arrive, but we don't have to.
Boston opportunity, just because we haven't been able to replace the gold we learned.
And our next question comes from Martin <unk> with Veritas investment research.
Please go ahead. Thanks.
Thanks for the opportunity.
I wonder on the cost of sales in Q.
Q4 was 1324 up eight 8% versus 1226 in Q3.
I Wonder why that why it was given that you had bigger volumes, which usually.
Two.
Lower costs.
Yes.
Oh, that's been our policy to two Gram.
It's Graham Shuttleworth here Martin the key driver there really was depreciation.
And so there's two aspects to that one is when you when you.
Have increased volumes then you generally tend to have increased depreciation because it's linked to the <unk>.
Production and then also when we do our annual tie ins really for the purposes of the the final financial audits. We we do some adjustments that reflect the full year accounts since some of that comes through.
Additional depreciation in the fourth quarter.
Okay. Thank you.
Yeah.
Once again, if you have a question from the phone line. Please press Star then one.
The next question comes from Tanya you can disconnect with Scotiabank. Please go ahead.
Good morning, everyone can you hear me Hello, how are you.
Thank you and thank you for taking my questions I have three if I could.
The first one has to Caitlin Park I know I asked about partner all the time I'm just Mike can you give us an update on where we are with park right now on our last conference call and in Investor Day, We talked at top out at potential startup maybe as early as <unk>.
The end of Q1, we're not too far off from there. So I just wondered if we've seen slippage or how should we be thinking about program. This year.
I know, it's not in your guidance I'm just talking about the.
Alpha.
Again.
The other two.
Oh, sorry, My second one is today with health and safety and just wanted to understand what exactly is happening because there's quite a number of fatalities in a very short period of time and I'm just trying to understand like what changes have you implemented like what have you seen and what have you learned to.
To move forward on that and then my last one has to do with the copper side.
Do you think Mike do you have enough copper annual portfolio from what you have.
In your current portfolio.
Copper growth or do you see other opportunities on the M&A front in copper.
Okay. Thanks for that I'll start with the with the last question. So we do not have enough copper bedroom.
But we've certainly got visibility of where we want to go and again.
It's fundamentally driven by our exploration investment and again, while everyone else has been talking about it we've actually got in to the field and we've focused and as we shared with you in our investment day certainly within.
Within the United States.
That's a significant didn't documents, particularly in Arizona and ER and then and then also.
South America, and they're along the Andes and particularly the historical legacy permits of Barrick.
And a big focus.
And on a central Africa copper belt and as you know we are we are well entrenched in Zambia, and we have a very strong long term relationship with the DRC government and and and again that we believe puts us in a very strong position and we organically led so.
And that's what we can offer to two governments as long term value creation not a sudden arrival with the short term promise and in those countries are all wanting to see that whether it's copper cobalt or any other E V. We've got a gazillion.
People, arriving in these prospective areas around the world they not miners they have.
Lots to say, but very little expertise in how you how they can bring there.
There their claims to to fruition in the form of value for their host country. So.
So copper is very much as we said in 2018, when they put the two companies together and integral part of our strategy and by the way.
That doesn't detract from our ongoing commitment to continue to grow our gold portfolio.
And again, if you look at if you look at the size of our businesses. So Nevada speaks for itself Kibali, So six tier one assets.
500000 ounces and more significantly more in most cases.
Beyond 10 years, then you look at Tanzania, that's two mines, producing 500000 ounces so that takes it to seven.
And then.
We've got.
The opportunity with Rick Burdick, it's a tail one copper asset that takes it to eight and then we've got Lamar now that we're looking at and that has real potential to be as big as far as production goes as our share of rig codec that takes it tonight.
And so you see and then program, which I'll come back to that.
That takes it to 10, because it's a plus 800000 ounce producer so.
So then what our focus is is add those sort of chunky assets into our portfolio.
And as you know Tanya.
They're not mainly around to go and buy so it leaves us the challenge to be able to.
Those down and that's really our focus.
Health and safety very good question and as you can imagine I mean this for me personally it's been a traumatic Tom.
It's multiple.
Multiples more than.
All the fatalities of experienced in my 35 year career, and so as a team as an executive.
As a management team across the group, we've really had a lot of introspection looked at these issues.
Issues, we spent an hour with our board yesterday working through what we've discovered and you know the the challenge is that all.
Lagging indicators have come down materially as I showed.
And and but we've had this sudden pickup in fatalities largely.
With our contracting partners.
And the point is my commentary is that.
You know, what what where I come from and what we've introduced and this group has a very flat structure as you know we embrace local local so we embraced the local.
<unk> and building capacity to invest.
Hum.
Growth projects into the host.
Host country economy.
And and at the same time.
In Africa as you know we've changed the management team considerably in Africa, and I believe that that one of the <unk>.
Drivers of this is the fact that we didn't invest enough time and getting to know our contractors, which was a traditional thing when you're flat you don't have that big corporate sort of.
Wait.
And so it's all about interaction on a personal basis and particularly when you bring in.
Contra.
Contractors that are not international in in in size and capacity, we've got to ensure that we instill let.
In them and again as we've changed and continue to change that culture across the Americas, both south and north.
We see that we've got to invest more and we've got to specifically look at al and induction of a contract is making sure that they have the systems that.
That we expect to have and and to spend more time engaged with them to ensure that they lift the game to the level that we expect anybody to to have when they when they operate in our operations and I think that apart from just making sure. This is a very significant.
Can't effort across the group I've spent a lot of time personally our whole executive.
Spend time, we've really reinforced the responsibility of everyone to stop unsafe work and and.
And again, we've moved it from being you know.
The rack to the responsibility.
And I'm pleased to say we've had some apps as significant examples of our people exercising that responsibility just in the recent weeks and this is like this it's a it's a tough thing because it's it's not very tangible.
And another person who likes to have absolute control of things. So it's been a big Big Challenge for me personally and and the team has stepped up and and and we know this is this is more important to us than anything else and we.
I've got no doubt that we are.
As a team are absolutely committed to making sure that we get on top of this challenge.
Then program.
One thing about operating in Papua New Guinea.
As if you get your agreement dropped then you can operate freely until they come up for renewal or renegotiation and so that's our intention.
It's a challenging environment to work in.
Extremely challenging probably the most challenging environment I've worked in and I as you know have worked and quite a few of those.
We have not incorporated a company that.
We will be the vehicle that has the new ownership and will eventually end up with the special mining license.
The steps you've got to go through to get there is we've got to transfer the exploration license from P&L, which is the barrick vehicle into the new vehicle and once we've done that we can apply for the.
Special mining license.
And as part of that process, we start the consultation with the communities we have agreements with the various.
Landowner representatives, but we've still got to go in and.
A consult under the auspices of the the <unk>.
Moray the government binding authority.
And but.
But we are we are moving in that direction, we are employing people.
We we have.
Reviewed and as part of a care and maintenance responsibilities.
Sure that that we've inspected and and.
And make sure and ensure that our mobile fleet is operational.
Louise Beefing up the spare parts. We have we are doing some maintenance are we going to replace some of the tanks and the processing.
The infrastructure and so we are moving is not going to be a.
Sort of.
A.
I I did start is going to be a running start as we get there and and again our team is.
Progressing these agreements.
With the government and the other authorities the state mining company, which is a major partner.
<unk> has just had a big management change for the good I might add and so that's helped a lot in getting moving on a with a with getting these agreements on so yeah.
It's.
Sure.
It's got to be this year I believe.
Exactly when.
I think one thing I can tell you is the prime minister and myself are equally motivated to get this started so.
As far as we're concerned we're not prepared to take any shortcuts.
And we'll get there.
Okay. Thank you.
One last question. So thank you Tanya.
As there are no more questions from the phone lines at this time. This concludes the telephone question answer session.
So we gotta go to the room now ma'am.
Okay Fantastic Mark Thanks for the presentation.
Two questions. So first one on the buyback you commented earlier I saw a press headlines that you I believe barrick is undervalued to peers.
He is trading at a discount.
That was also the case a year ago, though and you had $1 billion buyback and only used $424 million of it.
Will you be more active on it in 2023 so low Senate.
It is a balance so it's about allocation of capital.
You know one of the things I'd I'd go back in 2021.
You remember we had a a.
A short run on our stock and we had no ability to stop it and that's what motivated us to file for the authority to do buybacks and and and so.
Last year, we have a graham and I and Graham's team we analyzed.
The the register in the trade and at times, when we believe it's fundamentally undervalued, we will bother shares and we had a program to do it and if you look at how we bought it how we bought the shares last year, we did very well we started at the right time, we stopped at the right Tom.
And we were able to tighten up the market.
A little but during those weak periods.
The reason we've requested authority again is that again, we just don't want to be caught without in a way to stop or a negative run on our stock and we believe when you look at it. Unlike some other companies who bought tie and didn't bother.
We did.
And so it's a it's we see it as a tool to manage the.
The fundamental value of our owners asset and so that's the way we do it I know, it's not absolutely Pacific, but I can tell you that we spend a lot of time worrying about why are we buying it and under what circumstance and then we also balance that against all.
Our own long term capital allocation strategy. So last year as you as you saw.
That buyback impacted the dividend because we used up cash on the balance sheet, but.
But at the same time, we still delivered value back to shareholders. So that's if that makes sense Graham you want to add anything to that I'll just reiterate the point that it's all about a balanced approach to using our capital.
And then as you saw one of the opportunities we took advantage of in the fourth quarter was to buy back some of our debt very favorably and at a discount to par which is saving us interest charges going forward. So it's all about a balance and then at the end of it all.
We are very focused on having a strong balance sheet, because we think through the cycle. That's a differentiator and so again that's reflected in our current rating. So it's a balance and fundamentally Lawson.
We're business people, where owners we treat this company as a business.
And so you know we run it as a business we run the balance sheet properly we will look at the whole it at two grams point the whole business.
Profile and manage it accordingly, and we will continue to do that.
Okay. That's fantastic. Thank you both and then I wanted to ask you about one of your favorite countries, Argentina and Villa Darrow, maybe if you could just speak a bit to the recut.
Recovery issues occurring Avila Darrow and just what the plan is at this point to address those and then.
Further comment on the Capex being deferred from this year into next year do you have a number of how much that deferral was so.
So.
So what we've done first of all this.
As you see there's a softer outlook for this year.
As far as production goes we've been conservative in the way we've treated this the reason is that we've intersected we didn't get the drill rigs.
Head of Us during Covid was a real that battle there we did cover some of it and we manage that.
That mine on.
On both bottle roles and.
And column Leach test because the bundle role doesn't always give you the right recovery.
And there was historical periods.
Of covert way, we just had bought roles. So we had to make the best estimate and there's different categories of ore in that ore body. Some we call. It T. Two T. One area of different carriers and some of them are more lower recoveries over time, you get the gold out but the leach.
While as a lot flatter.
And and and we win we win he managed through this last winter with a new pad, it's much more dynamic because there's no inventory in the pad and we saw a slow.
A very flat curve developing on the Leach. We also saw recognize that some of the of the ore body is.
As more silica, rich, which which impacts the leach. So what we did is we we've reduced while we in the process of reducing the manpower we've delayed the sick and the lift of seven in a phase 7.5.
Because we've got enough capacity, but we've shifted it out into next year I mean, it's it's getting to the point of managing a block of business. We've mobilized the rigs now because we've got him and we're drilling up the ore body at the same time, we are chasing the exploration opportunities within trucking distance of the mine.
And the view how is it we didn't just want to keep barreling, along with that and as you know my whole being is around knowing your ore body.
So we wanted to get that clearly understood and Theres no impact in the long term.
Opportunities that whether there are but it's good practice to do what we're doing and that's what that's the the reason behind that slowdown. This year of course, you've seen pvs picking up Nevada is picking up so we can cover that lower production out of valid there and again.
From from a Korea when you're in these.
Situations, where it's completely artificial in Argentina, because the exchange rates of artificial so you know it doesn't make a whole lot of sense mining a lot of goals when you're not making a pile of money.
So.
So again all around it's a considered approach.
With you know, we've debated with our partners and.
And Shandong and and we've also spent a lot of time with the province.
And again, what we've done is as is.
<unk> in Argentina, all big capital projects come with a royalty that goes into a fund to support economic development and what and we have a say in hot spend what we've agreed with the provinces were going to use some of those funds to really focus in on.
Employment generation outside the mining industry, which I think is a good thing so all round we've covered the bases.
Of to be able to manage.
This period.
Good.
Thanks.
Mark It's Greg Barnes from TD Securities.
EMEA is we'll open up the Hornets nest and ask you about M&A.
[laughter] with if the proposed deal between Newmont and Newcrest goes ahead there'll be market cap on the face of it will be W. Production will be double Barrick do you care strategically about that scale and how big they would become and probably grab a lot of mind share globally from investors.
I've never seen that logic work by the way.
Because as you know in mining it sort of doesn't fit with this question of that used to be asked by Youtube haven't you got too many assets.
Getting big for the sake of getting big doesn't make a whole lot of sense to me certainly with my money and I believe our shareholders wouldn't lock that either.
Growing the business is absolutely our focus and so we are well you know we are obsessed about growing our business and growing the value. So that you can take as a given.
We cant see much.
Strategic benefit and just getting big for Big Big mistake, and we don't agree with you that that builds a better company with more.
With more grab.
Gravitas.
In fact I.
I believe it's probably adds more risk.
So so that's really.
The way we look at it.
And we got to watch with interest how this thing progresses.
And if I listen to you correctly during your what you were talking about on the copper side you pick various area of the World, where you think you want to focus is that where you would be leaning towards more on the M&A front or is that going to be an exploration focus for you both.
I think the interesting thing to your point as well.
Well to the point I made earlier and that is that there's a whole lot of people running around promoting metals, new modern metals, including copper.
You know the the real geological and mining skill and knowledge associated with those promotions a glut.
So and and and and and lock the gold industry. The copper industry is equally in and in a bad place when it comes to inventory haven't invested in the future you look again the results coming out now from these diversified huge amounts of money being made.
But you cant take all that money and invest it in a locked with magic and find these big deposits. It takes time and we have been working on it for four years, we you'll see going through this year as pop up with new consolidated positions raw.
And the heart of.
Elephant country.
So right now the opportunity to grow organically if I you know.
Is is certainly in our business.
No.
Sort of a preferred way because of the inventory rebuilding but that doesn't it doesn't say we won't pick up on a on an acquisition opportunity if it arises and again, we we as you know we we much more skilled.
As geologists and mining miners as most of our peers and so we have a much better.
Pass it T two to call a project early.
And take more risk on M&A, then wait for the stuff to be tired and and and having produced a long time and everyone's running out of options. So we brought it up in and bought them. So that's really that's the way we would position our strategy. Just one more question would you take that a step further as several big.
Copper gold development projects in South America, Yeah, Jose Maria for example.
They need a joint venture partner would that be something that Barrick would do yeah.
Theoretically absolutely no destination is quite important even though I say asset quality overrides destination, but again, you've seen us exercise sometimes to the frustration of bankers.
To walk away from certain assets, because we're not prepared to go beyond and already.
Extraordinary premium.
But absolutely that's our preferred route and we have a we have ongoing conversations and kevin's team on those opportunities all the time.
Yeah.
Thank you. Thanks, Mark this is Ralph <unk> from eight capital.
Mark does the Dorothy discovery change your thinking on how that gets rolled into four mile and then presented into Nevada Gold mines right is this a time is this does it push it back a little bit prove up the value.
You want to sort of present that value proposition to newmont, how does how does that discovery change that I think because I know that theres a structured approach on how that specific assets gets rolled into N. G M.
So it's a very simple approach and its very interesting and we've we have open conversations with with Newmont on these things.
But.
So we have the final say on when it goes in.
And it goes in on a formula so if.
If we don't meet that formula and with Dara with a full mile. It's a simple formula because of the quality of those deposits.
Once we rolled it in from the start we get everything back so we split the.
The whole cost of feasibility and all that and then the value of that as it goes in at a market value recognizing premier in the market and the whole Gambit, So theres no theres no.
Real logic.
For anyone not to participate in developing that project because ultimately it's in the best interest of the joint venture.
And we can also carve up.
You know a formal we can put in some keeps them at whatever the the the opportunity to evaluate these deposits.
Oh, sorry.
The opportunity to value I don't know why everybody wants to see me.
Just tell me so the the opportunity too.
Fully comprehensively evaluate these types of ore bodies, you have to get underground to drill them. Because you know, it's a one and a half kilometer stretch from the surface. So again under the joint venture we can share infrastructure and we can invest in infrastructure from established infrastructure in.
And gold rush.
To continue to.
To evaluate these projects or we can come up with somebody else in agreement with our partners and then on top of that the real opportunity and in this formal development is if we continue it.
What we are seeing materializes into what we expect it to.
To do.
We can access it from the other side from the northern side and again, we've learned a lot in developing gold rush because if we access that we had exit is it with a long underground haulage that takes it out right at the at the smelter at the at the Roaster.
And so it would because getting it out in the mountains. There like we do with gold Rush, then you've still got a transported subway. So we see that and that ability gives us significantly.
Significantly changes our 15 year plan.
Is it puts a whole slug of.
Of production at the back end of our 10 year plan and it lifts everything up so so strategically that's what we rarely this is early days, but you know it's a.
For me, it's the two things out of this this is very significant when you see those.
And we've got Ah hits around there and some of them you're like Oh. This is Colin country thousand grams, a ton yeah, its a real stuff and it's all breccia so $4.
Much higher grade than than gold rush, it's the same structure, but its theres a big intrusion in the oriel has sort of Brit.
Metamorphosed the rock and says very brittle so the the mineralization is breaking it up you got these big breeches.
And so so the first thing is you know.
Or the fact that we've got the geologists to St block modeling and.
Take these big decisions to drill these depots way ahead of where you where you found the last one.
And so this opens up and now we will look across the intrusion as well it would be.
Intrusion because that structure continues through.
And then it also.
I've just been down there last week, what it does is motivate our geologist for other tavis because we've got some significant targets that we where we are developing and it's really this.
This is a product of our of the team's ability to vector these big geothermal Hyatt halos and get into the heart of mineralization. So for me as and again, you've seen us we've been consolidating ground all around.
Our already.
Already large landholding, so where I mean I'm super excited about.
The opportunity because fundamentally Nevada hasn't seen real exploration for a long time.
And you've seen us replace I mean, we've mined.
<unk> million ounces, there 9 million ounces since in the four years, we've paid out.
Over $6 billion to shareholders and we've replaced all of all that remand. So this is you know that doesn't happen often and I think that there is the common theme across barrick.
Look what we're doing we haven't and when we put those two assets together.
Neither of them had a future.
Barrick had better grade, but it had no future plan and new months assets. We're on the clock people had given up we know that because we had to fix infrastructure that completely given up.
Thanks for that and I also want to ask you a question on moly.
And in the mining on it what has come out of those discussions what what do you anticipate to come out of those discussions because you talked about Papa New Guinea in the context of jurisdiction. How are you thinking about Mali right now.
I've always said people asked me what's your.
Riskiest.
Jurisdiction in your portfolio from a whole 30 years, I've said, Bali, but bodies delivered more value than any other asset you know in any other country, because we had marella before in.
So this audit has been run by people, who we know really well. These are professional people. This is not a.
Oh gosh attempt.
People out of Senegal, who we know from a cynical invest.
Investments.
And again that I gave a talk because the question that's been asked by the current regime is does gold.
Glitter for all volumes, that's the question and so it's up to us as miners and certainly we have 10% of the GDP.
So.
The conversation with the finance Minister is always very short.
And we actually.
Are a core component of <unk>.
The moly and budget area.
The Barrick investment.
And so you know that.
Everyone's got a view and they were supposed to start.
But right.
Right now we don't see that at all and you know we've been through.
Three military regimes.
A pile of incompetent.
Civilian governments.
But we've always come out because we pay big dividends and large amounts of tax.
And we employ.
Marlins.
Got no expatriate and our executive team and Molly either in the in the capital on the month.
So we you know we manage that.
And I you know I was there just a couple of two weeks ago as part of our quarterly visit met with everyone. We bring it up.
And and my my encouragement is.
If you look at what the mining is done and Theres no question about that amongst anyone its contribution to developing that very poor country.
So what about shouldn't we be thinking about.
All these revisions to the mining code and where there's actually brought anything and isn't it better to two two in the face of all the challenges our reach out and encourage more investment because the one thing about Molly is the investment keeps coming in or has in the past.
Because your monies considered safe because the volumes haven't changed the rules like other countries, but certainly there's a there's a there's a determination to understand and measure the rules and also there's a big.
Mistrust between the.
The junta.
In the past.
Civilian governments and and some of the transactions that were done in that regime and so so this is good if it's done for the right reasons. It's a good thing because it will uncover if there was any.
Mel administration and otherwise it to give something.
More fundamental which we can share with the people of Mali about the contribution of the mining industry.
Hey, its Anita Soni from CIBC, some mark and three questions for you and increasingly more difficult.
So the first one I think you.
That's a lot more on a super pit you mentioned and we're facing that by the end of 2024 or was that just a feasibility study or would you have the super pit online by the end of 'twenty 'twenty four.
You won't see I'm waiting for the next one and the next question is to you. Okay. The capital for 2023, a decline from the the guidance you gave in November I, just want to understand what the deferral was was that what you referred to with all the arrows that are the majority of that I think about $250 million would have been at different military or was there something else.
And what number should we be adding on into 'twenty four into 2024, instead and the last one is just kicking on hornet's nest that greg's already kicked once so and I wanted to give you an opportunity to respond because theres been a lot of sort of conjecture about what your role would be in in the recent M&A in and you've addressed sort of thing.
Gross and you know just taking of things from.
And from a big picture perspective, and I think people are speculating, whether or not you would be involved in any kind of break apart scenarios and I just wanted to understand your view on that.
Okay. So Anita I'll take the most difficult one first.
And that is.
The capital and Graeme is going to answer it.
Yeah.
Kind of answer the easy one which is the pre feasibility study, which is going to be completed at the end of 2024. So to answer the first question, but on the capital.
There were some areas, where we managed to cut some capital a little bit of capital in and MGM.
But but rarely Anita.
The truth is the truth be told when we present to you in our in the November Investor Day, We kind of just showed you a path, which you then kind of took your ruler and got your number.
And then when we guide in with more detail as we do in 2023.
Try and look at where we were actually going to spend.
And.
The reality with capital is there's often a bit of a lag between your ambition and what you actually get done in a year and so we try and anticipate that in our guidance. So so there isn't any real major change to what we what our target is but we really just trying to give you a little more.
I already on what the likely outcome is so can I just follow up with a question on the cost side of the equation knows inched up a little bit from what was in November . So could you just talk about the key drivers for that again, there's a little bit of swings and roundabouts. So you would've seen that there was slightly higher cash cost slightly lower all in sustained.
<unk> costs, so there's a little bit of swings and roundabouts moving between our sustaining capital and operating costs as we.
Optimize some of the mine plans and so that's really all it is it's mostly driven by that some areas. We still had some inflationary pressure, where we were adjusting for that the latest input prices and in areas. For example in AMB, we got some slightly higher fuel and explosive costs.
Sort of lingering in those areas that we've adjusted in the model.
It's more about just the secret singing and optimization.
A follow up on that one.
As we go into 2024 I'm trying to remember what what are the 2024 cost structure I remember the capex is pretty similar but.
The cash cost, where they set to decline or or similar and should we be using.
Level that we have now for 2023 into 'twenty 'twenty four so in our forecasting we have declining costs in 2024, and that's really driven around our key assumptions around input prices. So its really driven around in particular oil and energy prices. So 2023, a key assumption around the oil is $90 a barrel.
<unk>, which is very similar to the actual well priced for 2022, so our input prices for 2023 are very similar to 2022 in that sense in 2024, and our forecasting we were assuming oil drops down to 75.
$2 a barrel.
And so that brings our costs down and and then on the flip side of that.
If you look at our profile, it's increasing slightly so if your costs are coming.
Coming down and you're increasing your ounces slightly then you also get a little benefit on your cost per ounce.
And you could add to that in.
I need to the effect that we remember we've heavily investing in green energy and that brings a big saving so you know the.
The extra solar.
Installation at Kibali have always been fantastic imagine what Kabbalah would look like on diesel.
And it's you know during the rainy season.
96% and Todd right now and we want to try and keep that through the dry season, and that's why we're putting in solar to to be able to support that and batteries because we've learned a lot about batteries and really the battery is the one that make us we've got a local grid that makes the grid and so if we can feed.
The battery with solar and hydro, we stabilize the grid and we reduce the amount of and we're doing that across the group we are adding more solar in Lula. So we've learned a lot about managing micro grids with renewable energy and that also have a positive impact on our fuel going forward.
And the easiest question.
Of the lot is not going down that rabbit hole.
Alright, thank you.
Thanks, very much this is jackie price unless he from BMO.
Most of the questions have been answered and thanks for taking so much time with the answers but.
I guess I'll just ask a quick one on record Jake.
It sounds like you're moving forward with that and fairly quickly.
It's the impression I'm getting from today's presentation I know, there's a feasibility study or a technical report coming up soon is there any other catalysts or news events or announcements that we should expect maybe in 2023 before we see that study come out.
So so.
Just getting back to them before.
Before I go to the.
Jackie and each of the the fees, but we got to finish that pre fees.
On the Montana. This year, so you'll have a good handle and then we.
Full fees into 2024, so we are very focused on being able to understand the decision making sooner rather than later.
Richard <unk>, we the plan is to get the feasibility complete by the end of next year.
And.
And really it's a it's around a couple of things power people.
And water.
And infrastructure infrastructure, we've got we believe we've got a strong.
Initial plan, which is rail.
And then it's about building infrastructure north south infrastructure over time.
Water we've started already.
And and.
And we.
The plan is we're going to map the entire.
Guy Basin.
Which is and the objective being that there's a lot of water aquifer water in that basin.
And we're mindful of not sort of.
<unk> water from the farmers and so we really want to understand the different depot water systems in that area. Ultimately long term, we'll move to desalination over the long term.
And power there is an opportunity for geothermal power. So this place where we are where it occurs.
His world headquarters for solar and wind.
But as you know that doesn't offer 24 seven.
So there is a.
Young a virtu extinct volcano, but a very strong geothermal gradient.
We are currently as we speak mobilizing to drill it.
Busy with that permitting etcetera, and and then.
And then our partners of course as always are in the oil and gas business.
And and and and also the.
The opportunity to linked to the grid all other grid has.
Challenges on stability.
And so that's the that's part of the feasibility we will.
So those three are really the focus and of course this baseline studies on environment and social that's already well underway and we had we already started that even last year.
On the technical side of things, we're pretty comfortable with the drilling the drilled out resource we want if we got to finish it.
Sort of tech and some Geo tech holes and we of course, which is sort of our DNA, we got to trim. Some of the holes just to make sure it's Raj.
And the G O met and again the technology on flotation has changed materially since 2013 globally and so we're looking at a big swath of test work on ground versus recovery and things like that and really looking at a much more modern approach.
Whats to come.
Combination and and and managing of the concentrate.
Sorry.
I was just wondering if we're going to get any sort of uptick okay. So so we'll update you as we go and we.
We don't expect any bad surprises, but yeah. Those are the only news really is if theres something that that develops that we haven't already.
Anticipated, but we've shared with you a pretty solid.
Concept.
What would what somebody would call scoping as far as the economics and in the development program. The intention is to is to be in development in <unk>.
In 2025.
It looks as though you want to say something I just wanted to clarify that it's the pre feasibility study for the.
The la Manana, yeah, it'll be completed in 2024 just to be clear.
Yeah.
What's the problem.
Alright.
Any more difficult questions.
Any more easy questions. So there's a lot lunch next door. Some drinks are please feel free to stay in.
Continue your questioning of the team after this.
Okay. Thank you thanks, everyone and thanks to those on the call. Thank you for attending and we look forward to seeing you in person through the next couple of conferences, we gotta be at Bema, and then back up here in <unk>. So we look forward to catching up with you. Thanks again.
This concludes today's event 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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Sure.
Yeah.
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