Barrick Gold Corporation Q1 2023 Earnings Call
Ladies and gentlemen.
Thank you for standing by this is the event operator.
Welcome to Barrick's results presentation for the first quarter of 2023.
Following today's presentation. Our question answer session will be conducted.
If you have a question in her joining the events by telephone. Please press Star then one on your telephone keypad.
We'll 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 may five 2023.
I would now like to turn it over to Mark Bristow, President and CEO of Barrick.
Please go ahead Sir.
Thank you very much and ladies and gentlemen, a very good morning to those found in Toronto and and of course, a good aid to those around them.
The blood.
As you know are we going to be talking about all the.
Our results for Q1, 2023 today.
I thought I'd start off by just pointing to.
The fact that as the different global powers seek to extricate the world from the many challenges and and indeed crises. We currently have to contend with.
We have a lot of talking.
But don't see much action.
Instead of fantasizing about some post industrial idyllic state the worlds political and business leaders should perhaps be considering a better future for all not just for the wealthy countries.
This requires of course investment in the development of sustainable enterprises, driven by cleaner energy and extending to the many parts of the world but.
But in fact, most of it which have been left behind by the worst economic advantages.
Logging has historically been the catalyst for economic growth and under developed countries and I would argue that's the case for investment in mining in those countries is stronger than ever.
Particularly as many are rich and the resources required to make the world a better place for all.
At Barrick.
We have always been committed to investing in the future and in the process. We have created some remarkable value for a broad base of stay called us.
I'll share a few instances of those with you in the course of this presentation.
This is the usual cautionary statement.
A copy of which can be found on our website should you wish to study it more closely.
As guided.
At the start of the Q1 was a softer production quarter due mainly to the major planned maintenance exercises that Nevada gold mines and mine sequencing at Kibali.
Cash flow increased despite the loss of production.
While adjusted net earnings per share also increased to 14 cents.
Operational highlights included the near completion of the massive Pablo VAALCO expansion project, which I'll tell you more about later a robust performance from turquoise ridge and the delivery of first production Stopes ahead of schedule from the new gun Qatar.
Brown mine.
All in all we're in good shape to ramp up our performance throughout the year and I would point out that we are not forecasting a hockey stick and but a step wise move through.
Through the.
We also recently published our annual sustainability report.
And if you haven't seen it yet.
It's well worth a look and it's on our website.
That's impacted on production in quarter, one and those that are expected to drive performance through the latter half of the.
This should ensure we achieve our gold and copper production within guidance as well as the cost guidance, we provided at the start of the AR.
Yeah.
Despite the lower production, our highly high quality asset portfolio increased free cash flow and allowed us to maintain a 10 cent quarterly dividend in line without performance dividend policy.
Our tax contribution report was also published last month, which highlights a significant contributions to the countries where we operate.
As shared with you last quarter, we experienced three Chad tragic fatalities in January .
We've taken a long hard look at our safety protocols and practices.
And during a week long group wide workshop, we evolved and you approach, which we have called the journey to zebra.
Every one of our corporate and regional leadership team teams have spent time at the operations reinforcing our organizational values captured in our DNA.
And reminding ourselves that safety.
As with caring and committed partnerships, where we call an unsafe practices and stop work until we have a safe way to continue.
Subsequently, we have seen an encouraging decrease in the number as well as the severity of work related injuries.
But as I said this is a journey, we have just commenced and to which we are fully committed to achieving and it's actually quite encouraging today assaying tonight to the north.
North American teams, including Nevada that had there first injury free April so that's a good step forward.
We've met that road to zero and how you can see the very specifics steffek steps were taking towards achieving that goal.
This has been the single biggest focus for the entire company and remains a top priority with a particular focus on creating a culture, where everyone has the responsibility.
To stop unsafe work practice.
On the environment.
Brian There was no class one environmental impacts during the quarter.
Our water use efficiency rate was again above the 80% target and our greenhouse gas emissions decreased by 18% quarter on quarter.
We have continued investing in our communities through our community development committees and embarked on an educational partnership journey with Tanzania amongst others.
On the biodiversity front.
First what rod knows I expected to arrive in the Democratic Republic of Congo as soon.
As part of our mission to restock the species and the countries go run by National Park.
<unk> Nasco World Heritage thought, which we've long supported.
As I mentioned earlier.
We've just published a 2022 sustainability report and you can see some of its highlights yeah.
It's worth noting that during the year, we spent $6 billion on goods and services with local suppliers and invested some 36 million and community development projects in line with our philosophy of partnering with our host countries.
Moving to the operations as usual I'll start the operational review with North America, which as I've said before we regard as our value Foundation.
From a base in Nevada, we've started looking at the potential tier one hosting regions elsewhere in the United States as well as in Canada.
With the complex work of combining two sets of assets and people accomplished a new leadership in place and a bankable 15 year business plan. The vision, we had for Nevada gold mines cannot be fully realized.
In Q1 production at Carlin was impacted as I've already said by the planned conversion of the autoclave to a carbon in leach process plus the planned maintenance of the gold strike crush stuff.
The focus is now improving stability and throughput at Cortez the emphasis remains on ramping up the gold Rush project with a record of decision is now expected in the second half of this year.
There's no significant impact and an anticipated for 2023 production and the potential impact to Twitter.
'twenty 'twenty four and onwards is being reviewed.
Turquoise ridge's performance continued to improve on the back of the first full quarter of production from its recently commissioned.
Third shaft.
In Nevada, the safe and efficient drilling ramp up this quarter returned robust intercepts.
Across all the tier one distress delivering further resource growth and support to about 15 year plan.
With snow receding from the higher ground in a very long winter, we are planning to bolt on all your success at full mile but stepping out around the recent Dorothy discovery.
As I said last quarter. This is a very exciting area, where we continue to to discover sick and continuous high grade mineralization, which we expect will materially enhance the existing full mile resource.
At Turquoise Ridge drilling continues on extensions of the B B T resource as well as testing between the Mega pit in the hunt for a high grade feeder.
And on the call and trained bold step out drilling between legal and goldstrike is intersecting strong and continuous alteration.
In local of high grade mineralization.
Worthy of follow up.
Elsewhere as I pointed out in the beginning in North America. All exploration is opening up new fronts kids and we've started building a significant presence there.
And Western Nevada's Walker Lane mineral belt, we've secured the pill string property through an exploration agreement and additional claim staking.
In Montana, we have staked 100 square kilometers of claims where we've identified a potential target area for both copper and gold and we are working on other opportunities in other prospective regions in the western United States.
In Canada, we are progressing the PEC project near Hemlo re logging as historical call to God modeling and targeting.
Also in Canada, we've signed a binding term sheet with Midland exploration to earn up to 75% of the Petrus property in southern Abitibi.
Yeah.
We move now soft to our Latin American and Asia Pacific region.
<unk> had a busy quarter highlighted by the progress at Pueblo Viejo, a prime example of successful value creation by Barrick.
And of course, the exciting you Rick Burdick project is taught starting to take shape, which I'll touch on a little more detail and I'll update you on a stepwise move towards restarting.
The poll Gras project.
At the time of the merger.
In 2019, you would ever call Pablo via Huh.
Tier one mine was rapidly nearing the end of its life. Despite its enormous resources. It's simply did not have the tailing storage capacity to process them.
We are investing around $2 billion on 100% basis, and expanding and upgrading the operation and after a long and considered the engagement with the Dominican government and the community around them on we have identified a thought for a new tailings storage facility.
The new plant was more than 90% complete at the end of the quarter and we've started an aggressive commissioning program in April .
Targeted to be complete fully complete inline with our plan.
During July .
As a reminder of what I have said in the past the existing storage.
So that he can cope with the tailings until 'twenty 'twenty seven.
When the new one will have been completed.
The project will extend Pueblo Viejo is tier one loss.
By at least 20 years, that's an average annual production rate of more than 800000 ounces per year.
And its just its success is a tribute to the partnership between management.
Our host country and the surrounding communities.
Management also deserves credit for keeping the mine operating efficiently. Despite the inevitable disruptions caused by construction and the tie ins.
Hello, There I made a promising start to the year, but as I'm sure you all appreciate.
Argentina has a worsening currency crisis.
And import restrictions.
And fiscal policies.
Policies almost monthly.
And.
As a result, the operating environment is becoming increasingly difficult.
We continue to work constructively with the sudden one provincial governor and his government to try and find solutions for them for the longer term.
Our planned head count head count optimization.
And the higher gold price have somewhat mitigated the operations negative projections for this year, but there's still a lot of work to be done on the cost profile and the resource resource expansion to ensure a valid there is long term success.
We have had some recent success without exploration programs around the operation most notably at the S class Morrow Escondida up target and we continue to extend the system through drilling.
A generative exploration review of Central and South America continues to refine key focus areas, where ground consolidation is progressing as planned.
<unk> five drill ready targets and the Australia project in Peru, all moving up our resource triangle and as I've mentioned, we're testing some targets around velo Dara as part of our life of mine extension strategy.
A high level of project study on the past quite a lot of that project is also scheduled for completion later this year.
Moving across the globe in Pakistan. The updated feasibility study on the Richter <expletive> project is scheduled for completion by the end of next year with first production expected in 2028.
In the meantime, our social investment program has started with the rollout of the first community development Committee and a drive to bring schooling to the region.
The first school was inaugurated at say, Hey, My village, which will provide education for children from the community and we're also very proud of the fact that the enrollment of the first students was done on AR.
50%.
Boy, and 50% GUL basis, which is a significant step forward in that region.
The reconstruction of the runway at the thought which is now complete will improve access and reduce the need for road transport.
And the selection of our project engineering parts. It partner for the project both for the feasibility study and later on design and construction is nearing completion and some key definition studies are now up and running.
As I indicated earlier.
And as you may have seen in the press a new poll grew up Progressive agreement progress agreement was signed in March between Barrick, New Guinea limited.
Papa New Guinea government and new poll Gorilla method.
<unk> limited has initiated the steps to apply for a new special mining lease in lots in a mining lease which is a key step to the reopening of the mine.
There is currently a lot happening.
As we progress towards getting this mine up and running.
Back across to Africa, and the Middle East. This region finished well ahead of planned gold production for the quarter setting the scene for another year of strong delivery.
As I've said before if North America is a value foundation.
In Africa, and Middle East region is foundational to barrick's performance.
And Molly new logo and courtyard produced its usual robust performance with new gotten caught out.
Underground mine, making its first contribution ahead of schedule.
July was 40 megawatt solar power expansion project continues to advance with commissioning of the first phase is expected by the end of this year.
And when completed it is slated to reduce carbon emissions further by a further 63000 tons of carbon dioxide equivalent.
The Lula Salami district, which straddles the border between Mali, and Senegal remains highly prospective and all key structural corridor in the region are being reviewed and the search for the next world class discovery.
At Bombardier and Senegal drilling has started on priority targets along the 26 kilometers main she has done.
And that Lula initial drilling on the garro West Colorado has confirmed the potential for a significant but largely untested mineralized structure.
Across the continent in the D. C. At Kibali production was in line with plan sequencing and planned maintenance.
Grades are forecast to improve from this quarter as development opens up access to new stoping fronts, improving underground and flexibility.
Lula gotten caught a kibali has a high potential for major discoveries as has been shown in the past.
Exploration continues along the principal mineralized corridor, which still hurts multiple opportunities.
Targets currently being advanced include potential underground set of lots at manga Hill, and worry and new mineralized systems between the K C. D go rubber and the combo Cola ore bodies.
And in Tanzania.
We have another success story.
You may recall that when we took over.
There a few years ago.
These bonds were derelict burdened by major social and environmental liabilities.
And with operators the despised by the entire country.
In very short order we reinvested.
He invented the mines, which now between them deliver a tier one production profile.
Profile.
The groundbreaking benefit sharing partnership with the government.
And settled the legacy issues.
Structure.
Also during the past quarter.
Our growth initiatives in the Africa, and Middle East region focused on expanding our footprint in all its tier one districts as shown on this map.
And optimizing our exploration to deliver high impact discoveries.
With within our existing portfolio.
We are reviewing new operational frontiers in West Africa.
Delivering new projects in Saudi Arabia.
And we are developing multiple.
Multiple exploration opportunities across east and Central Africa for both gold and copper.
Talking about copper.
Turning now to our copper operations, which as you are aware we are on track to deliver significant expansions.
At the time of the merger Lamont in Zambia was a doubtful startup.
But locked P V and the Tanzanian mines, we have transformed it almost beyond recognition.
The Super Pet treat pre feasibility study, which includes a potential new mill expansion and tailing storage facility is that advancing scheduled for completion.
Next year.
This project could extend the mine life into the 26, Ts and elevated to tier one status.
In the meantime, we.
We've also reinvigorated our call.
Copper belt exploration leadership and began the transition to an owner operator fleet for waste stripping at Lamar and which should deliver a significant cost reduction.
In Saudi Arabia.
In conjunction with our joint venture partners modern.
And the Kingdom of Saudi Arabia, we have received an exploration license for the nearby Omar de mob permit and the gesture. In addition to the jumbo side South permit and initial feel field work has started on both of these prospects.
The 'twenty.
19 merger was designed to create a business.
That would deliver sector, leading returns and as you can see from this comparison with the G D X and spot gold we've outperformed these benchmarks.
Step by step.
We have worked to deliver on our strategy that we shared with the market.
In September 2018.
With just about every objective we outlined in having been fulfilled.
To die.
I'm immensely proud of where we got have got too.
Although we still have a lot more to do.
With a proven ability to replace the reserves. We are mining we are not reliant on M&A to grow.
Our new projects on the horizon should see us grow our production profile and this affords us the luxury of focusing on our organic initiatives.
Being able to choose external opportunities.
When they arise.
I believe we have passed an important milestone this quarter.
Our journey to become the world's most valued gold and copper miner.
As I've often said.
Mining is a long term game and the foundation, we have laid will ultimately be reflected in the full value of the company.
Ladies and gentlemen to finish off my presentation.
How some of the key reasons for investing in Barrick.
We own what are indisputably, the best assets in the business.
We have a clear and proven long term strategy.
We execute with discipline to effectiveness.
We consistently invest in our future.
Existing mine support at 10, plus adoption profile, which all Gannett growth projects will enhance.
Our reserves are constantly replenished by our successful exploration programs, which include exploring worldwide for our next major discovery and finally, we are a leader in sustainability and our actions in this field produced measurable results.
That benefit all our stakeholders and shot.
At Barrick, we do as we say and I. Thank you for your attention and we'll be happy to take questions. Starting I believe with this people in this room think who loves.
Hi, Marc Thank you so much for the presentation today and nice to see you.
I wanted to ask you about the statements you made in an article interview from from back in March.
As with the S&P and you made the comment that.
And M&A should only be pursued if the target is stressed and I wanted to get your idea as to what that stressed means and a further to that point.
<unk>.
What type of M&A.
M&A makes sense to Barrick today, Yeah, I can't remember that.
Tom.
But it makes sense so he ever say that [laughter], but you know the point is that it I've always said that two reasons you bought companies.
And that is it's a really good assets.
All day all.
A company that has done is really good assets.
And as badly run.
Oh.
Inefficiently run.
And as you know and you've seen repeatedly.
During these times of higher commodity prices and and and less options.
Any asset that's half decent gets up.
Big multiple on it. So then you start making a decision.
Not against the asset, but your view of the gold price or the assumption the gold price is going to continue.
Going up with and you know.
I mean, everybody in this audience knows that doesn't happen you know the gold price goes up and down are not necessarily in that order and so so it does get down to that.
Oh, jeez, and whether you have the ability to add to the opportunity that you're pursuing and and it's it is an interesting graph we were talking with the exploration team yesterday, if you take it off showing this before and we can share to you sent out website, but if you look at Barrick and its high days it's early.
<unk> and.
Randgold resources through its entire life.
The M&A, we did and we both did M. N I came with significant increase in reserves material expansion on the drill but then a classic one is kibali, which had 5 million ounces we mine.
And we've got 10.
Lift I mean, that's value creation.
We bought a lula with half a million ounces.
We've delivered a remind also round tender and we got to turn left or more than 10. So it says in.
22 million ounces on the back of that first half a million ounces.
Talking about rediscovered marella rediscovered and you know the the classic Wantonness goldstrike, when when Barrick bought goldstrike.
I think they bought like 3 million ounces and it's produced 33 million ounces. So.
So that's those are the debates that we have and if you're really looking to create value rather than gamble, that's the opportunity.
And you know as you know there's different views in Canada about how to create value. Some people say you can only grow through M&A in a very clearly say you create value. The way you create value is through the drill bit adding ounces buying them doesn't creep.
Eight valued might increase.
Increase your production.
And so.
And so and again, if you take out some of our peers.
And you listen to this the messaging and you'd take my messaging is all about sustainable profitability.
So then it's about how do you what's the acquisition targets and what does that do to your profitability because that's our focus grow value and not just growth and a classic example is if you look at a series of transactions and 29, there was very strategic.
Driven off the back of a two and a half your engagement thorough due diligence we can't claim came out in September 20 <unk>.
18, with a clear set of deliverables.
Including people.
If you take new months acquisition of Goldcorp It was purely opportunistic.
And so that's the difference and you know and I'm not trying.
Trying to pick on anyone but there's a different strategy, where there is a different business philosophy.
One and there's a very clear business strategy when it comes to Barry.
And so when it comes to M&A as you know.
We have worked in.
And looked at everything that's being put in the market.
And we've also looked at many that haven't been put in the market.
And we Havent very recently done any but when you when you look at the Tanzanian deal and the and the Nevada deal that happened very quickly because they put it all out full to easily so and that's the way we'll continue to do it and very clearly as you go locked away in this.
Locked 2011th.
Price up no one's invested no one's got exploration teams and so you have to buy.
And the people who make the money all the seles.
And so where that sort of is doesn't fertile.
Business.
You can go to your second one yeah I was going to ask one follow up and it's Lawson Winder from Bofa securities by the way.
Around the same time, you made a comment that you wanted to see copper grow to 30% of the profitability of the business and I think it's sub 20% right now so I'd also love to get your thoughts on what are the elements that drive that potentially beyond just the Lamont Super pit.
So so.
Again, that's a yeah. Thank you for that question because if you go back and twenties.
In 2018, we were very clear that if you wanted to be a rich if you want to be relevant in this public buckets of money.
Again, as a goldmine that you're going to have to grow.
And in crude copper in your portfolio.
And and and we didn't do it because it's suddenly a fad and somebody is trying to make lots of batteries.
We we identified it as a very strategic metal, it's as strategic as gold is precious.
And so we set out to build that in and the growth set and you know.
Job outside.
We've increased the production there by 50%, it's a completely different mine to what it was in 2019 we've.
We've grown its footprint materially with these last two deals and a real partnership with Saudi Arabia.
Where it's 50 50, and we all the operators in a formal structure.
And that's not common and in Saudi and of course, you've seen us working with Saudi and we've spoken a lot about the opportunities that that partnership will bring further into south Asia.
And then.
Why not we looked to sell it initially by the time, we had our first look at it very quickly I mean, we dropped the mining costs by 30%.
And and we found a whole lot more pounds and in satellite.
Deposits and what others do is they slightly high or very low strip ratio that allow us to keep building the profile.
Strip back the main ore bodies, the two main ore bodies and so that's and that's the sexy part of Nevada and that you can keep the money you can finance that big expansion rather than go into another negative capital a dip.
And then of course, you've got Rick Burdick.
And and record debt because our world class deposits it brings both goals.
And copper production and inorganic way, we haven't bought it yeah. It was it was paid for a long time ago as an early stage project Fi.
Barrick in Antofagasta, but.
We've now got 50% instead of less than that because it was a shared asset with partnering with the country.
It's it's opening up a whole new exploration frontier for us.
So when you just take that and and Lamar and Lamont, who will be the equivalent of our 50% share of the two phases, all BRCA <expletive> as far as contribution.
Cause the Oman of course, we have 100%.
So you take that and you take out.
<unk> projects in Saudi Arabia, those are all very good.
Attractive and make a big contribution taking us towards that end.
And if you like.
If you.
Go back and blamed it as a gold equivalent.
Now by the time, we get to the end of this decade, just don't want to we've got not on what we.
Could get.
We increased our gold equivalent production.
By 20%.
And so that's material in this mining industry organically.
And then and as you've seen with <unk>, we have more ounces today than we started with when we did the first in the.
The combination of three combinations.
And in 2019 and that is significant as well and that we were not forced to buy all future production, we've been able to sustain that we've got a more than a 10 year horizon.
And and and again the geologists we're working through US This weekend and we've got we can show a granularity of replacement of that the that the total resource we mine out five years now as we've extended our knowledge of known ore bodies and all.
All we need and we run the risk of finding something now because our geologists are well embedded in these regions and in and out.
I would finish by saying on top of that you know.
Exploration, which very few people in our mining industry really comprehend anymore.
It is also a key for mineral intelligence and proper organically driven M&A.
M&A because you've now got people back.
Eric has.
Yeah, 700 people a geologist.
Joe.
200 yards.
Across the.
The group well, that's that's just exploration not MRM.
And they're in the field they are highly skilled at commercially savvy.
And that's that's another store.
Strategic advantage, which will materialize with Tom because it takes time to build you know that.
Intellectual capital, which is effectively what exploration.
Yeah.
Just to reiterate what we said at all.
<unk> Investor day in November , where we get to 30% copper organically through those two projects.
Mark has talked about in terms of the supercuts and <unk> by the end of the decade till we get there without doing M&A.
Yeah.
Mark It's Greg Barnes from TD Securities.
You you've talked a lot about Argentina, and how difficult is to operate there and you did mention in your comments in your presentation that you're trying to work with the government to help things along what kind of initiatives can you actually move forward there too.
Governance, the Governor's office in Santa Clara and there's a I think we've really built a.
Our strong relationship and as you can imagine it's been difficult because.
The Argentinian political structure at the moment.
Is it is completely muddled.
And so we've got that stability, but he's still relies on boarding as always for allocation of dollars and so we spend and then audits amount of time with like the governor of the Central Bank.
And explain to them. So governor do you need Dulles, yes, that's exactly what we need so we actually print dollars for you.
So.
That's called that loop hasn't completed yet.
Because what happens is he.
He agrees, but the problem is the central bank is not independent in Argentina. So then some politician and the federal government makes a decision and it's all of that and we've seen I mean I'm in Africa and I've lived through these crises I mean, the Barbara is probably the best but we've lived through a number of these.
And so when you get spiral and you know I always say that.
Actually Argentina would be do well without the government because it's got all the all the ingredients all that significant economy.
Massive agricultural industry, it's got a mining industry and some oil.
And it's got tourism all dollar based.
But for some reason people and so this is a year of electioneering, what we've done as you've seen is we've cut back.
We've cut back on our people we've worked with the governor of the province to create employment positions. So we just haven't arbitrary cut back but we've taken.
Nearly 2000 people out of valid era.
The Liza capital into next year and and at the same time through construction royalty programs, we've worked with the province to ensure employment.
On provincial infrastructure program, so, we'd been constructive and and and and and the business and we've of course invested in people we continue to do that.
And it's a different place today and and you know, it's it's running the risk of being cash flow positive. This year, because we made those decisions and so we keep we havent gone in mind.
And then irresponsible way you know you remember Julien bearing and he used to say if you're caught mine golder, our profit leave it in the ground.
And so that's really our philosophy and a valid there are we are mining the gold in a proper disciplined way we in a profitable way. We are continued we haven't stopped exploring because that's the future and the value creation.
And again, you know I I go to the office every quarter. The frustration is it's such a great country with really good people. It's got all these ingredients and.
Politically it's just in a mess.
Maybe a question for Greg can you get cash out of Argentina currently.
I can answer that yes.
So we do and we can then we negotiated that Oh, but I'll give you an example, and and also as you've noticed.
We keep Golden this fault. So we manage the gold because you don't want to sell the gold and end up with Pat says that you can't spend.
So we rarely used gold as the ultimate currency.
And with the approval of the government.
But that in itself doesn't really get anyone out of trouble and then on top of that I'll. Just give you some of the the law you know that the latest.
Regulation is.
When you buy something off shore, you can only pay for it to 180 days later.
For small companies that you know that's toxic.
Barrick, we've got a big balance sheet, we've got strong partnerships on the supply side, we can manage that our working capital pipeline, but it's.
Inevitably it kind of ready strangle the mining industry in Argentina.
Just a question tagging onto Lawson's and you were quoted this morning about not being interested in tech metals, but.
It's a competition for copper resources copper mining company is just too intense and not something that you can compete in.
No I think we've got lots of competitive advantages, Greg as you know, particularly in the emerging markets.
But again, you know every potential transaction too low since first point.
Is it is different.
And and tick.
Tech is not a.
It's it's not a super producer.
And it's but it does have some assets that's got really good.
Stake in the partnership in Peru.
It's got old.
Legacy assets you on Canada, its got the new.
What's at Beachy, QB, two QB, two and Chile, and and it's got coal.
And so and it's got a lot of debt.
When you look at that structure.
And and and and Blaine cause of intervention there it's been interesting because what glencore.
Is that we don't have as synergies and opportunities to really create value.
And.
And so you know I think it was I know from outside.
We at given the current situation, there's no logic for us to get involved in anything like that because we don't have call.
We don't lock that in.
And and and the synergies in Chile with the clean coal.
Anglo assets are very real we don't have anything to offer.
But at the same time, we're finding it very interesting to follow the debate because it's it. It's it really is indicating where our industry has got to given that we've we haven't invested in our future.
Thanks Mark.
Yeah.
Anybody else what else the question.
Yeah.
Yes.
Can you also.
Close to.
Explaining the trick to ask.
Lars Christian operator, we're going to go to the telephone questions now please.
Sure. We will now begin the telephone question answer session.
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We will pause for a moment as callers join the queue.
The first question comes from Cleve Rueckert with UBS.
Go ahead Mike.
Good morning, everybody. Thanks for taking my questions.
Okay I just wanted to go back I know you always take the long view and we appreciate the like the long term.
Sort of multi decade managerial focus, but I wanted I really noticed in the press release, the you know sort of a little bit of a tilt towards you know some of the near term operational work that youre doing on the assets and you know the improvement that I think he.
<unk> talked about them that step wise increase on quarterly production volumes now throughout the year as a result of the work that you did in the first quarter and I'm. Just wondering if you know as we look into 'twenty 'twenty four and 'twenty 25, you know there there is growth.
And the plan for both of those years should we expect now just that stepwise improvement in volumes to continue through 2025 mm or will there continue to be some seasonality in the businesses.
Take maintenance Opportunistically here are granted.
So, let's just deal with the first.
This year Yeah. This year, we're looking roughly 45 55, if you take the $4 4 million ounces attributable production first half second half roughly.
The drivers of that and Theres no.
I didn't finish in quarter four.
And I'll just take you through the drivers so.
Colin we expect to step up our.
In quarter two.
Cortez will be you saw a proven quarter on quarter it'll be similar in quarter. Three all the rest are already at run rate in Nevada.
And and then.
Three in quarter four call in and.
Cortez will be.
Really at a good place operationally and also I think a lot of you will understand this when you do these big transactions, particularly big multiple assets.
And and you know, we've we ought to get to the.
People Rock Fest.
And also remember that it's partly unit enough and we've just done so well.
Companies are big C C b, a negotiation which is.
Again, just tells you we bring a different philosophy to these things because the union is working alongside Nonunion people, that's a big step in our in the United States, because it's very clearly understood that work for us, but they represented by the Union.
And and.
And also.
We've changed management, because we've moved from a more controlled strategy as we've merged the organization and remember.
It was four day weeks for management and the Newmont.
The the newmont assets, we're behind on their plans.
Barrick was obsessed with cash flow and high grading so.
The culturally they were different and also operational culture was different and so we brought all that back and now it's a case and.
And I've done this many times and you know when you when you're climbing the hill it is luck.
It's tiring.
And you have challenges and slowly you bold a habit.
And then you get the habit right right and then you'll see it becomes and I mean, you guys will see some of you have worked through it with Kibali when you ramped it up you know.
Lula as well.
None of the mines, we started had sort of straight at the block perfect.
And so we at that stage now and we've not changed the management as per the.
Barrick cause stroke, Randgold model and that we flattened that G. M has run the mines not somebody in the culprit, we bowled a strong people around them.
Got very good G M now and in Nevada.
And it's taken some time to build some capacity around.
And they you know they are in their own right big so running it centrally is not and I don't like doing that anyway. So now we've got a much better flato structure.
And also we've had to deal with neglected capital and maintenance and remember it was a hostile transactions. So we took it it has a K a.
And it is and we're getting to the point now where.
Where are we comfortable with.
A processing facility, it's still it's still protest constrained.
Because as we go on the ground, we got more to do double refractory or so are we expanding the gold quarry roaster, which was the highest cost most inefficient of the two roasters.
And so with that that really grows.
Profile as you pointed out in Nevada over the next couple of years gently, but it's an improving profile and then P. V is.
It was a big step that back to.
Above 800000 ounces, we go straight there almost this.
This year.
And what's nice is the front end up.
Just to remind you what we've done there is we've expanded the front end jacked up I'll put it in a concentrate huh.
And and really.
That basis.
We've kept the autoclave feed to say, but.
We've changed the whole temperature management and the autoclave. So it can take higher fuel.
And and we definitely seeing sort of a chain.
K, 12% increase in throughput and the order types and the and the Sag mill. We've put in is enormous. So so we build some flexibility into that operation to be able to way, it's a bit like kibali, where you can catch up.
Whereas in Nevada, it's always unless we've got oxide ore.
Or or heap leach all the the refractory.
Flow sheets as Israeli you'll bottleneck.
And so on.
The way, we built well you're building flexibility for Nevada, now with the new team is rebuilding some extra flexibility underground because that's the way you do it is and so you opened up some all stocks underground with a little bit more great in it and then you manage that so that when you.
Unplanned shut down you can start up in feed high grade all four for awhile and tidy it up and but they then you need to invest in and that's what we've been doing is putting in that extra flexibility.
Fix ability. So those are the right those are the drivers that take us to the.
The better second half and in Kibali was the other soft producers this quarter and that was because we.
At the end of last quarter remember that quarter, four was the highest production quarter and.
And we we fed all now.
Stockpile low grade stockpiles from Kibali, So we building that back up.
And then you'll have a very steady run rate for the loss.
Part of the for the last three quarters.
So we're not okay. It's a different profile to what you've seen in the previous couple of years as we stabilize the organization.
And I Am me as you know.
I'll say that it's pretty flat.
Yeah that makes sense and I would I would say that you know the.
The work that you've been doing over the last three years, maybe it's not clear to everyone.
You're getting tired of talking about it but.
We're looking forward to the next I don't I don't.
I never get tired of talking about it [laughter]. Good that's good cause us and I'll just add a little but you haven't asked the question but.
Again, you look at our policy around dividends yeah, everyone. We I mean this last three years, we've had the the market calling for dividend everyone's been paying dividends and then suddenly what.
And <unk>.
Now you see people still paying dividends outside their dividend policy, because the market's banging the table, saying.
I want some dividends and and we didnt get caught up in that.
You know and that are sort of bug and our balance sheet is in good shape and the dividends that we as we promised and we can afford it and we you know and we will play out and we bought shares back when the share price was down not where the share price was relatively high like some of our colleagues.
Or I'll pitch. So yeah, you can see the difference in the way, we run our business compared to a lot of others in this industry and that's because you know we all owners festival.
Management.
And and if you and I and I don't have to try and make people just because they're all so it's a different approach and we do have a long term horizon.
And I'll tell you, yes, we will get opportunities and.
One thing you can be sure about is when the right opportunity arises.
It'll happen.
I think that's I I, Yeah, I think that point is very very clear at least at least from our perspective and thank you for taking.
The long term view and patients that that.
It takes I wanted to ask you just one quick follow up on on poor Gras and you know I. Appreciate that you know so we're waiting for the mine lease to get approved what what happens after that I mean, what are the what is it just quickly what are the key milestones.
Do you have an export license in places you know, what what needs to happen to get progress or to back into guidance and up and running.
So that's the big one S. M. L. You know that's that's what was taken away and issued to come on that in the back three years ago, but we know we've all got out hit around what needs to be done in and that's the process.
We will start the mine up on on a similar path as a backup power. We are working with are they held up province to restart the gas power station and the Hell out, which you know that's really what makes.
Paul Polaris at low cost.
Our hot production when it comes to gold.
And.
Apart from that we have still so we have agreed the scope of the shareholding problem that the.
Landowners get and that has to be ratified through a development for them, but it's not it doesn't hold the production up the production are the the restart is all around the S. M. L. A the operator agreement, which we've got I think three points left on it.
And.
And there are a couple of the mine development agreement in.
The mine development contract I think it's called M. D. C. That's also a document that has to be completed.
And we are you know we are now working towards.
We've done all the.
Sort of.
Review of all the mobile fleet.
So that the operational.
Because we can we've cleaned out all the mud from the mine and we are continuing to do that.
We have a fleet of trucks in.
Australia that we've that al.
And sort of.
Very.
Second hand, but close to news that we have kept offshore which will bring onshore as we finalize the structure.
And that'll help with the mining.
Ah the tankage the CIL tankage.
And slowly inching, our way to be operationally ready a.
When the.
S. M. L is approved and we get to find we're working.
Hand in glove with the government and.
And the and the MRA, the mineral reserve and mineral when Saddam authority.
But you know.
And then the other big thing is we just over a thousand people unemployed now we are employing people.
And that's one of the big critical pause is getting enough people up to run it.
And and and and and and dealing with the security around the mine, which is a government thing and I think we've all landed on that now.
But you know.
FAP and Youre getting is a tough place.
You operate.
Understood Alright, thank you very much I appreciate it.
Okay.
And the next question comes from Tanya you could speak with Scotiabank. Please go ahead.
Great. Good afternoon, everyone and thank you for taking my question and Mike can you just give me an update as to what's happening with the gold rush Paramount seem to be getting delayed a quarter over quarter. So I'm just trying to understand what exactly is kicking up the delay and then yeah just.
Looking at the mine tour that we did in September .
Nevada that portion.
Finally radical my passion I think goes back is going to be at about 100000 ounces this year and 100% and.
Moving higher count like commercial production in 2020.
I thought it was about 400000 ounces or thereabout can you kind of give me an idea.
You know any what's happening with the you know.
Painting is paramount.
You know what sort of production profile was scheduled to.
Coming 'twenty four 'twenty five that could potentially impact. Thank you.
Yeah. So.
This is the challenge of doing business in the United States, There's lots of good things about it but permitting is not one of them.
And and and so theres been some not so good court decisions around pet imaging. There was just recently, we we are not impacted bought by that and then any legal fashion, but again the b L. A M have slowed the process down.
What I can say is that we've got a very good constructive working relationship with them we back on.
Engaged and and the.
The the EIA is right at a point, where it's nearly ready to go to Washington, If it hasn't already got day.
At the moment and.
And so but that is delayed them.
And as I said in my my speech We act.
Right now the delay we can manage we still guiding around a million ounces 950 to just over a million ounces for Cortez and goldstrike is embedded in Cortez and we manage it that way.
And and and and.
We are looking at where the you know if this goes beyond this year, we have had some relief under a hiccup.
Which is the project exploration permits under which we doing trial mining at the moment and so that's that you.
Right now we're looking at you know where is the critical path and how can we manage and not compromise the the infrastructural development and be able to deliver on our long term plan for Cortez and goldstrike is.
Embedded in that plan.
Tanya so.
As I said, we are looking at it we will let you know, but right now where we have enough flexibility in our operations and I think that as I touched on earlier, that's the big thing that I see in Nevada.
But it's taken time to put the working capital into both the flexibility.
Kibali is a 750000 ounce producer, it's got lots of flexibility because it didn't bedded in the business same with Lula.
But Nevada never had that and we are doing that and I think the fact that we are saying to you the.
The Rogers delayed we're not sure exactly when we do expect it to be this year, but at this stage, we've got flexibility to manage it that's a good.
That's a new development in Nevada.
Okay, and so am I correct to think of that 50.
That's K 12 million ounces that you know you know a contract.
<unk> thousand of it is.
Oh gosh.
No it's variable.
Yeah, I think a gold rush will slowly grow to your 400000 ounces and maybe even higher as redevelop it but you know this we still learning about those.
<unk> breccia is but right now the million ounce profile for.
Full Cortez is bolt on what we have baked in the <unk>.
In the gold rush.
But we were still exploring we still expanding we still learning.
As we drill out the ore bodies.
Okay, and so you know that.
And the nice thing about this is you know.
And at 1.5 to 1.6.
Cortes I mean, it should settle.
Lots of bother million ounces, which is a big shift you can see it's never been there. It was a long time ago, but not recently and then you've got.
500 going to 600, maybe a little bit higher in turquoise ridge.
And then you've got.
Phoenix.
And so that's what grows our profile gently over the next two or three years and in Nevada as we've shown you.
Okay, I think I'll move off that.
I've got two other projects I just wanted to ask.
If you put a mark can you give us an update on what's happening at Donlin gold in terms of what you're seeing and what.
Okay, yeah and longer term.
What we found is what we shared with you in.
Quota for them.
Actually I was quoted three last year. After our September annual September a trip and that is very specific work streams on revisiting and optimizing certain work streams and one is of course, the water management and and and ensure.
During that would address the issue around.
Protecting the fish.
In the in the waterway.
The second one is.
The trade offs that we.
On power because you know the currently the the plan is to bring gas from the gas fields that really hasnt being developed are on a on a.
Gas power plant that doesn't have it right next to it.
Yeah, there's work to do on that trade off we are doing a series of metallurgical.
Tests and trade offs on the flow sheet, because it's a double refractory ore and whether we can improve the recoveries.
And and is there another way to process. This also that that's part of the trade off we've gone back to the mining and the mine schedule as we've improved our knowledge of the ore bodies and and and now looking at our bench Hearts and.
Equipment sizing and then we can get a hit around the cost.
And and another one is Lam is done because you know as you know when you've got a autoclave as you need.
A lot of is done.
And and there's always been a talk of.
Calcium carbonate rocks in the area, but we need to just check.
Check if they all actually usable, whereas the closest source of large labs done. So there's a couple of these things that could materially change.
The project. We have also worked hard with our partners because remember this is owned by the the native Alaskan <unk>.
And.
Those are the people who own the surface rights in the mineral rights, but also the whole of Oh, then native Alaskans will benefit from this.
Projects. So that's the way we all we all working towards the next review workshop in September again, and then after that we'll be able to update the market.
Did I hear you know just to your two to assure you that we see that there's a significant resource.
And we are putting the necessary effort into it to try and get it into a reserve for on Varick are say it's helpful too.
And you can get that as a reserve when might you think.
I don't know I'm still working on that Tanya.
Yeah.
Okay, well wait for the update.
This year all of those factors that you're looking at and if I could just ask.
High level Stabby I'm coming out at the end of the year on Pascua Lama can you just remind me what's happening there I sort of mass Treasury, we know.
So we were instructed to.
Basically the project that was originally conceptualized and design.
<unk> had a lot of.
Issues critics.
Critical issues the way it was designed et cetera.
And also social issues and we when I assumed the role here at Barrick, We went to the government and we said deals with us because we were lining up for allot.
And so we agreed to go down and put those that permit two to bed.
Just the construction permit so a lot of the stuff like a train.
Trenches that and then put the water disposed the water the big some of the stockpiles that were.
Being blown all over the place and it was not a whole lot of other infrastructure.
And so so we are busy closing those we've we're very close to completing that.
At the same time the exploration permit is still very much intact and so we've what we've done is we've embarked and you know we did some drilling last year and we've we've shown that a substantial part of the resource has is key.
Can be processed.
Through.
Standard leaching and and all educated Leach and so we can do that we can change the circuits are that's already bolt and the Lama infrastructure.
So that's what we've been looking at and we want to take it to a point, where we can damage demonstrates a viable potentially viable project, which we can then take back to the governments of the Chile, and Argentina, and and and point out the opportunity and and and.
And and then work to get a.
Turn that taking price is going to be able to drill out the model.
And take it from there that's the way we guide and I think it's our responsibility to do that to ensure that those countries understand there's value in both infrastructure and the resource.
Okay, Great I'll leave it to someone else ask questions. Thank you Tanya.
The next question comes from Martin <unk>.
He tells investment research.
Please go ahead, thanks for taking my question.
I want to know when I look at the cost increases that you have this quarter.
There were 16% year on year and gold.
Over 40% on copper.
So what gives you the confidence what are the two or three things that give you confidence that you will be able to maintain the cost.
<unk> flat year on year.
So march it it's all in the production.
As you know so.
Yeah, we had a soft quarter so the costs were up because the.
Production was down and on a unit basis that drives our all in sustaining costs with a pick up as I pointed out have you got 45% of the sort of full point 4 million odds.
Mid middle of guidance.
And then you're going to increase your production by 255% of that it drives cost and and that's really that's the biggest driver.
Want to add to that grant.
Yeah, that's that's spot on I mean, if you look at the.
The Delta in production from Q4 to Q1, you were down about 15% and costs were up 50%. So you know it was a very strong correlation there.
Yes.
Yeah. If you look at the volumes were down 9% compared to Q1 last year.
And.
Call back of course.
For what so you can't really look at Q1 last year, because you know that was pre the Oh no you shouldn't be pressure that we were experiencing post the Ukraine process. So if you remember.
Last year, we started the year with a $65 oil price assumption.
2022 we just landed up being close to $100 of actual.
The oil price and yeah that drive drove significant inflation through the business last year. This year when we look at our assumptions for some of those key inputs. We using assumptions that are based on prices that are very similar to what we actually experienced in 2022, So really the Q1 of last year isn't it.
Relevant.
Person quarter.
Okay, but you you you you you would say that this is in line with what you were expecting the cost.
Q1.
It was higher than expected yeah. So it's it's it's in line because.
As we as we indicated at the start of the year. We expected this first quarter to be the weakest quarter and so we expect cost to be highest in this first quarter.
And then as the production steps up we expect the costs to come down and as we've reiterated we expect to meet both our production and cost guidance metrics with you.
Great. Thank you very much.
Thank you.
The next question comes from Mike Parkin with National Bank Financial. Please go ahead.
Hey, guys. Thanks for taking my questions most of them in <unk>.
And answered, but just a follow up on Nevada, It sounds like you're doing.
A lot of good things in terms of getting the management in place that you want.
Terms of the more general Labor Force.
How are you tracking relative to filling a job on things and just any kind of overall commentary around in Nevada gold mines employment scenarios, it's still a bit challenging like it is in some of the other areas of the world are you finding it.
Leasing and you're getting.
Closer to full employment plans.
So I mean, we made a as you know a while back but our strategic decision to not continue to change to chase a ever decreasing.
Aging.
Traditional mining skill pool and to go and invest in young.
Engineers, and and skills and and we've been extremely successful in that endeavor.
And we've started a.
Focused process multiple set of processes to ensure that we give those young people.
The skills and expertise.
Yeah.
The experience that is needed to get into the workforce and part of that.
Is I think we had.
They are in 50 job phase or job engagements, what do you call them.
110.
This last year or this last quarter.
But yeah, we had 50 jobs phase this last quarter and it's interesting nearly 50% of young graduates that have joined US. This last quarter had never didn't know what mining was about until they came for an experience at Nevada.
At the same time, we've we've been and enhance the compass program for like geologists and mineral resource managers and planners and that sort of thing we now have three.
Morning.
Schools or mining training centers, we will train four underground we trained for open pit and we'd training process. So because.
States doesn't have a trade top mentality, you don't and so a lot of skilled people come from the army or you know.
Or have just.
And then a sort of a diesel mechanic.
Gil, but they don't actually they're not trained and so we when we bring in those people.
We can train them and and it's also part of our initiative to standardize all.
Standard operating procedures across the Nevada.
<unk> business and I was there just.
10 days ago.
Just over a week day, and we visited these schools and the other thing that struck me for the first time, you're getting 35 year old 40, all new recruits coming back to work there from another industry. So the first signs we seeing all the tightening labor market.
Those are those are different to the people, we actually targeting which is the young skills and and again, we've we've gone all engineers all financial people, we don't try and go to a boarding school because you get a good civil engineer and and and we've been extremely successful in attracting young.
I think we've employed about 100 young.
Graduates.
Per month for the last three months.
So.
In Nevada, so and again the way we've slowly changed.
Oh.
Organic organogram within Nevada.
Nah refreshing all.
And head count because so I can't I can tell you that the.
The turnover that has reduced materially lock.
I wanted to say, 20%.
Yeah.
And and and and also not always saying, okay. We've been operating at planned for a long time as we change the way, we operate and how we manage people and more efficient I mean, we've done some interesting things like introduced.
Childcare from four o'clock in the morning to eight o'clock at not.
We're looking at multiple people for one job, particularly in the driving side, we're looking at being innovative because it and it's driven by our commitment to be.
Nevada and focused as far as employment goes.
And and again, a percentage Nevadans and I'll work force are significantly up and and I would just and so it was.
Local purchased I mean, 80% of all our purchases are not Nevada based.
When I first arrived there was like 20.
Got it.
A lot of effort in that I'm not answering it in real numbers, but as we.
Progressive, but we've certainly got.
All the arrows, pointing in the right direction, and and and and and one thing I can tell you is that people that say that young 22 year old to 26 year old Havent got ambition is untrue.
We've got and there's a lot of I mean, we've we've just employed some of the top students out of the British Columbian.
Universities for Nevada.
Because we went and got them.
Ah. So you know we are seeing and we were excited about that potential because that also will change the way we operate.
You know because that no I'll give you. An example, you you take a 50 year old.
Mining, a civil engineer or electrical engineer.
And ask them to do.
Yeah.
All data analytics.
He he has struggled.
He had a 24 year old young graduate in any one of the engineering feels that they've it's part of the costs that go with it so and we're that's where this was world is going and just accessing the data points on our big 300 contracts, we've been able to improve our efficiencies in it.
And it's not just about being a a savvy you got to have the full engineering.
The skills to be able to apply it in our industry anyway.
Thanks, very much Mark I appreciate that added color.
There are no more questions from the conference call.
Right. Thank you very much everyone a great seeing you again and.
We'll be catching up with some of you during the next while and.
And and again I'll just say we know the team is always available are we all going to see some of you down in Dominican Republic, I believe so we look forward to that and and and and again if you've got any questions. We we havent had given your time to ask them the teams around and we're all in the end of a.
So thank you very much again.
Yeah.
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.
Okay.
Yeah.
Okay.
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