Q3 2024 Barrick Gold Corp Earnings Call
Speaker Change: Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to BEREC's results presentation for the third quarter of 2024.
Speaker Change: Following today's presentation, a question and answer session will be conducted. If you have a question and are joining the event by telephone, please press star then 1 on your telephone keypad. We will also be taking questions from those in the room.
Speaker Change: As a reminder, this event is being recorded and a replay will be available on BEREC's website later today, November the 7th, 2024. I would now like to turn you over to Mark Bristow, President and CEO of BEREC. Please go ahead, sir.
Mark Bristow: Thank you very much and good morning and good afternoon ladies and gentlemen and in particular a very warm welcome to all of you who have made the effort to join us in person here in London today.
It's prudent to reflect on...
Speaker Change: on the current market fundamentals as well as to continue to thrive throughout the future cycles which are inevitable. I'll also reinforce how we are building a business that will grow profitably.
Speaker Change: for the few that may meet our strict value investment criteria.
This is the customary.
Speaker Change: This is a customary cautionary notice regarding forward-looking information and for those who want to study it further it is available on our website.
Speaker Change: but we nevertheless continue to make good progress across all fronts as the results for Q3 show.
Speaker Change: As you can see, the performance arrows point in the right direction.
and we believe a foundation has been laid.
Speaker Change: for a strong fourth quarter which should enable us to end the year within our group gold and copper production guidance range.
albeit at the lower end of their range.
Speaker Change: Special highlights were the higher margins in our gold operations driven by the higher gold price and cost discipline.
Speaker Change: This is in addition to the ongoing investments in infrastructure in Nevada gold mines in particular. Ongoing plant ramp up at our flagship growth project.
Speaker Change: Pueblo Viejo, and the progress that we are making with a new generation of value creators, notably Lemoina and Ricodec.
and we repurchased $95 million of shares through buybacks.
Speaker Change: This is a special snapshot of our operating results. Gold production was in line with that of the previous quarter, while the increase in cost per ounce was a function of plan maintenance and royalties on higher gold prices.
Speaker Change: partially offset by disciplined sustaining capital spend to get a stable all-in sustaining costs.
Speaker Change: Copper production was up 12% quarter on quarter and costs were reduced.
Speaker Change: Robust cash flows generating 1.18 billion dollars for the quarter, free cash flow was up 24% year-on-year to 444 million dollars, the highest
since the first quarter of 2021.
Speaker Change: The 33% increase year-on-year net earnings per share and the 25% increase in adjusted net earnings per share compare favorably to the rise in the realized gold price over the same period.
Speaker Change: Debt net of cash was reduced by 27% quarter-on-quarter to $500 million ensuring that our balance sheet retains its sector-leading status and the flexibility, most importantly, to fund our future growth projects.
On the safety front.
Speaker Change: Our journey to zero, which I am personally leading, was regrettably impacted by a fatality at Kabbali.
Speaker Change: This has reinforced our determination to achieve our goal of zero.
Speaker Change: We remain committed to operational excellence with a continuing focus of embedding a strong safety culture across all our operations.
Speaker Change: Barrick's holistic approach to our business encompasses the managing the many mine closure liabilities we have accumulated along the way.
to safe closure.
Speaker Change: By the end of the year, we will have safely closed seven facilities.
Speaker Change: with five more planned for next year and we are rolling out a plan for the remaining 27.
a liability.
Speaker Change: Barrick's sustainable mine closure is a key part of our plan to create long-lasting value.
Speaker Change: As the industry's reclamation costs and liabilities are projected to grow significantly in the coming years, our proactive effort to mitigate closure risks is differentiating Barrick from its peers.
On the operational side, we start.
Speaker Change: with our North American Operational Review at Nevada where a substantial investment in replacing equipment and restoring infrastructure is effectively recapitalizing the Nevada gold mines complex for the next 10 plus years.
Speaker Change: New running plans for all the mines are keeping development ahead of operational stopes and brownfields exploration aims to replace this year around 75% of reserves depleted by mining.
Speaker Change: The second phase of the Gold Quarry Roaster Expansion was successfully completed and both roasters are now operating at full capacity.
Speaker Change: The new Gold Rush mine, which was just a concept at the time of the merger, is also continuing to ramp up production.
Barracks' existing four-mile project.
Speaker Change: deserves a slide to itself and so I'll talk about that a little later.
Speaker Change: It is worth noting that we are able to optimize the combined gold production from Carlin and Cortes by treating the two entities as a complex.
Speaker Change: For example, at times it is possible to increase production with additional high-grade refractory ore from Cortez.
Speaker Change: processed at the newly expanded Gold Quarry Roaster which in de facto will replace
feed from the lower grade carlin stockpiles.
Speaker Change: At Turquoise Ridge, the team is targeting higher production on the back of Q3 productivity gains and improved reliability of the backfill infrastructure and the autoclave.
Nevada, as I've often said...
is Barrick's Value Foundation.
and how you can see why.
Speaker Change: Near mine exploration continues to identify and grow exciting expansion opportunities close to existing infrastructure, as well as larger step-outs with the potential to yield the next generation of Tier 1 discoveries.
Speaker Change: The 14 million ounce Great Olivo project is developing into a major growth driver that could double or treble.
Collins Reserves, extending its life well beyond 2045.
Speaker Change: And recent drilling at Hanson within the Cortez district has confirmed a long strike potential over 1.2 kilometers from the well-defined heart of Hanson's ore body.
Speaker Change: And deposit model upgrades at Turquoise Ridge have led to the definition of several new mine targets with the potential to add to the 11 years of mine reserves.
Speaker Change: Notably, since it was created five years ago, Nevada Gold Mines has replaced all the gold that it has mined during that period, and our current reserve grade is higher than when we started.
Speaker Change: and largely because we've re-cut the gold quarry pit and left out some of the lower grade reserves.
Turning now to Barrick's 100% owned four-mile project.
Speaker Change: We kept, as you know, we kept it out of the Nevada merger because it was clear at the time that the market didn't recognize.
our view of its value.
since then
Speaker Change: has this value, which is bigger than our entire 61.5% holding in the Nevada Goldmines joint venture.
As you can see here,
Speaker Change: there's potential to significantly increase the extent of the current ore body model.
Speaker Change: We are now drill testing potential access development to the main ore bodies.
Speaker Change: And this is all designed to be able to help us with the scoping work for how we proceed with the pre-feasibility study, which is scheduled. The scoping work will finish this year and then we'll move towards a feasibility study program.
starting next year.
Speaker Change: Leaving North America and back down to Latin America and Asia Pacific.
Speaker Change: over now to this region where the ramp-up of the Puebla Verde plant expansion delivered a 23% increase in quarterly production and reduced unit costs while Valdera continued its steady performance.
Speaker Change: That's important when you look at that, and I'll show you that just now, because that's really the driver of value for that part of the world. The Paul Greer team also deserves a special mention.
Speaker Change: for revitalizing the Long Mothballs mine and achieving a 64% quarter-on-quarter production increase in Q3 in the face of enormous challenges including natural disasters and ongoing travel conflicts in Papua New Guinea.
Just as a reminder,
that Pablo Virgo, which had an uncertain future
Speaker Change: at the time of the merger has been completely reinvented and is now on track to sustain gold production at an annual average of more than 800,000 ounces to 2040 and beyond.
Speaker Change: Clearly significant improvements in production, recovery, and costs as you can see here.
Speaker Change: This two billion plus project is still a work in progress as we are fine-tuning the plant and advancing the new tailings storage facility.
Speaker Change: As we show you every quarter how you can see a timeline of what's been done and what remains to be done to achieve our target of an 80% recovery rate for this year.
Speaker Change: Had the commissioning not been plagued by major equipment failures, and in particular the collapse of the new crushing conveyor structure, we would have reached that goal much sooner.
In Latin America, we have also rationalized
our historical portfolio with a focus on quality prospects.
Speaker Change: with Tier 1 potential, which is being progressed rapidly by drill testing. We've effectively wiped the state clean and started afresh in South America.
Speaker Change: Two large systems, one gold and one copper, have been defined in Peru, where drilling permitting is progressing, and an excellent set of opportunities are emerging in Ecuador.
Speaker Change: In the Dominican Republic, draw-ready targets have been defined around Pueblo Viejo and regional greenfields programs are progressing in the district.
Over in Pakistan
Speaker Change: The Reykjavik Copper Gold Project, another hidden gem we uncovered in the Barrick portfolio, is on track for delivery of its feasibility study by the end of this year.
Speaker Change: In the meantime, the project management and construction teams are being recruited, long lead items are being ordered, and the infrastructure is being prepared for the transition from the study phase to the execution of the early works.
when it goes into production in 2028.
Speaker Change: This multi-generational mind will be one of the largest of its kind in the world.
which delivered its usual reliable performance.
Speaker Change: Now too, it was only after the merger that the potential value of the closed mines in Tanzania were unlocked.
Speaker Change: Lemoina in Zambia, which hadn't made a profit since its acquisition in 2012, was also recognized as a new value creator.
Speaker Change: They now rank amongst our greatest success stories and largest cash generators of the group.
Speaker Change: In Mali, the Lulogonkota complex increased production by 5% on quota, and we expect that full year production will be at the top end of its guidance range.
Speaker Change: You will all be aware that we are engaged with the country's transitional government about ways of giving the country more of a share of the economic benefits generated by the complex, while ensuring its sustainability.
For more than 30 years, Barrick...
Speaker Change: and before it Rangeld, have had productive partnerships with the Malian state, which weathered many changes of government.
including previous coup d'etats.
Speaker Change: and a range of differences which had to be overcome from time to time.
Speaker Change: We return now to Kibale, Africa's largest gold mine and Barrick's leader in renewable energy, thanks to its three hydropower stations.
It's new solar and battery storage plant.
The
the renewable portion of our power generation will be 100%.
Speaker Change: Despite the lower grades in quarter three, Kibale's cost profile is still one of the lowest in the industry.
Speaker Change: And this will improve further with the higher grades and production ramp up.
Full cost for quarter full.
In our ongoing quest to uncover new open pit
Speaker Change: underground opportunities around the mine, Brownfields exploration work continues to develop the ARC target area where drilling is identifying additional mineralized loads.
Speaker Change: further confirming its potential to host a high-grade deposit less than four kilometers from the Kobali plant as well as returning significant intercepts along Kobali's foundational KCD ore body.
Speaker Change: As I've already pointed out, Tanzania has also been a real value contributor to Barak, as well as the Tanzanian government.
Speaker Change: Two mines that weren't operational at the time of the merger have now been transformed into significant contributors to our bottom line, showing what the right people with the right strategy can achieve.
Speaker Change: It was here that we first formalised our partnership with the government through the establishment of Twiga, a benefit-sharing joint venture which we have since replicated at Pogra.
Speaker Change: The Lemona copper mine in Zambia is another asset that was first restored to profitability and is now being groomed as a world-class operation through its SuperPIT expansion project.
Speaker Change: Its feasibility study is scheduled for completion by the end of the year and it is expected to go into production in 2028, the same year as Rekordec, achieving our strategic objective of becoming a significant copper producer.
The project was launched...
with a groundbreaking ceremony recently attended by the Zambian President.
Speaker Change: And meanwhile, there are lots of preparatory activities as listed on this slide.
Mark Bristow: As already shared with you Barrick is projecting a 30% growth in the production of gold equivalent ounces from its existing assets as we continue to advance our growth projects and unlock the many other value-adding opportunities.
still embedded in our portfolio.
Speaker Change: In addition, Barrick continues to lead the industry in ore body expansion and has more than replaced the reserves it mined over the past five years, and is forecasting to substantially grow both its gold reserves
and copper reserves again this year.
Speaker Change: Significantly, the ounces that we have been avid were at the same or better grade than the reserves that we mined.
Berica's organically built an industry leading balance sheet.
Speaker Change: through reducing debt by three and a half billion dollars while at the same time investing 11.2 billion dollars in developing long-last mine plans.
Speaker Change: Despite the multiple increases in the gold price over this period, the global gold demand is again projected to reach record levels for this year on the back of the return of Western investors into the metal by the gold ETFs.
and our investors.
with our disciplined business approach and solid growth prospects.
Speaker Change: Barrick is a stock that offers real upside in both value and return.
and as importantly, we have the world-class team.
to be able to deliver on our ambitions.
Any questions from the room? Yep, there we are.
Speaker Change: Hi, Dan Major from UBS. Yeah, a couple of questions. First one,
Speaker Change: sort of higher level, you indicated you would be tracking towards the lower end of production guidance and in your materials you highlight that spot gold price implies about $25 delta on the costs. If we think about the outlook into next year and with a focus on NGM and PV in particular, is it fair to assume the exit rate from this year from a production perspective and
Speaker Change: The cost perspective implies some moderate downside to the previous guidance you gave for 2025
reports out in NDNA. The guidance is that
Speaker Change: work stream we've got going at the moment is the gold quarry pit.
Speaker Change: which I touched on in the introduction, which is, you know, we had the big sidewall failure on the gold quarry pit and what we've done there is we're replanning that pit and we don't have a good
Speaker Change: understanding of exactly what that profile is going to be. But what we have done with the team, and we have a new team in Nevada, a new executive team.
Speaker Change: really guided them to leave some of the low-grade material that was always in that plan out and redoing it. And my, you know, our guidance to the operating team in Nevada is, you know, we'd rather people focus on
margins and long-term profitability than gold production.
Speaker Change: But we will update the market in some detail at our Investor Day presentations on the 22nd of November. And we hope to have our...
Speaker Change: two plans on that together. I think the other drivers, and really you saw that with PVU. [inaudible]
Speaker Change: You get the production up, you get the cost down. The cost control in LATAM is very good. I mean, we're going to make guidance on costs.
Speaker Change: and not on production. But that's how tight the cost control is. And Valdera has done much better. It's going to be above its guidance.
Speaker Change: on the cost in PV, which is one of our low-cost producers. On the other side, Turquoise Ridge now is again making progress, and it has the same dynamic as PV.
So, that...
Again, turquoise reds will come.
Speaker Change: in at the bottom of its guidance maybe a little bit below but that but if you do the math it's still a significant growth.
Speaker Change: For quarter four and and so we'll see the benefit of that and you'll start to really see I mean you can see it already It's a high-grade mine you get the production right and we had as we stopped that in quarter two and had a really catch up on the
Speaker Change: the backfill infrastructure and we've had ongoing challenges in the Sage Mill, Autoclave, we've rebuilt the entire CIL circuit, you know we've had to do a lot of
Tron Bluffett's growth capital.
Speaker Change: And you'll see at the end of the day, we've had the same conversation and you were around 2011 when everyone got confused what cash costs were, I remember that, and they made their own definitions.
Speaker Change: Well, at the end of the day, we're very disciplined in the way we define our costs. So that's another driver, and then Cortez is also going to be, in fact, it's looking like it's going to be above its guidance.
Speaker Change: But that's because of what I explained to you, Cortez, as we ramp up.
Speaker Change: We have access to a higher grade refractory ore and a lot of the feed in our plan at the moment is Stockpiles out of Carlin and so we offset that and we're managing that and that's the that is the I know That's what we said right in the beginning
Speaker Change: And remember, we didn't have the Long Canyon out of our portfolio then. It was prematurely closed, given what we expected it to be.
Speaker Change: And so we are moving underground, we are moving to more and more refractory ore and that's why the Gold Quarry expansion was important and that's also sustaining capital.
Speaker Change: because it's part of that transition to higher grade underground ore. So those are the drivers and Kibale, as I mentioned, it's got a much better grade profile for quarter 4, so that's also going to drive our production.
Speaker Change: Just a follow-up on that, and the subject of sustaining CapEx, I see it's coming down in NGM sequentially in quarter and quarter, but could you just walk us through the profile, the key projects, and then when we look out in the next couple of years, what's the delta on sustaining CapEx in NGM as you attack some of these issues? Well, we've got to spend a bit of time on the Investor Day detail, because if you look at the underinvestment in capital,
Speaker Change: It was material, and we'll show you that proof of growth. The driver was, Barrick was, you know, single-mindedly focused on paying down its debt. So it was high-grading the asset, and so when we got there, there was no developed reserves ahead.
Speaker Change: And the Newmont assets had effectively, and I'm sure a few guys had spoken to some of the Newmont people, certainly the ones that were there at the time.
Speaker Change: They would have told you that, you know, they weren't investing in Nevada and so when we got there the the mine plans were 18
Speaker Change: 12 to 18 months behind. That's what we've been catching up.
Speaker Change: and all the big valves, and Barrick runs the biggest portfolio of autoclaves in the world. And so, you know, we definitely didn't have an autoclave setup that was best practice.
Speaker Change: And the same with the Gold Quarry Roaster, it was ineffective, it was high cost. And it was, you know, we needed to do that and the way we upgraded that was that we
Speaker Change: We did it in two shutdowns, so we've just finished the second shutdown to be able to get it, and now it's up at its new nameplate.
Speaker Change: And the same with Goldstruck. We had to do some catch-up in Goldstruck because again that's a world-class roaster. It's the lowest cost roaster in the gold mining industry.
Speaker Change: But it, you know, people had neglected things like process controls, etc. And we've been retrofitting or bringing those back up to speed. We're still busy with that.
Speaker Change: And there's a number of, I think 71 trucks are the first sort of tranche of replacement.
Speaker Change: is the development. In other words, catching up to make sure, because as we go underground we become mining constrained.
Speaker Change: We are process constrained now, but as we move underground and the way to keep the flexibility in Nevada is to build that flexibility underground, because the cost of extra roasters, we're not there yet.
Speaker Change: where we can motivate an extra roaster. So we need the flexibility so that we can sit with options so when the roaster goes down we have access to higher grade
Speaker Change: feed so that we can catch up and we'll get back into the into the the forecast and so that's really the focus and those are that's really and then on top of that it's people and you know again
you will appreciate I have always invested in people.
more turnover rate.
Speaker Change: The big focus now is automation because of the cost of labour in the US.
Speaker Change: And then at the same time, it's worth pointing out that we've beefed up the skill base in PV.
Speaker Change: to be able to support this expanded project and we're building the tailings dam, which is a plus billion dollar investment on its own. And then we've staffed up for...
LeMoyne
Speaker Change: And we largely finished with the staffing up. On the leadership of Le Moyne, the labour will still come, but we are already building those.
Accommodation units.
Speaker Change: and we're close to complete on the leadership in the Rikadik construction team.
Speaker Change: There's a lot of work to do in Recadec as far as training the labor and we've got all that in place now and we're training you know from
Speaker Change: junior school to technical training colleges to universities and then we're building an international what we call it our international student group which is all Balochistan graduates
Speaker Change: universities, which will will become the leadership in Rickerdick when we when we start the commissioning.
Speaker Change: So a lot of people investment, a lot of foundational investment on building that next foundation. It's on that basis that when we forecast.
Speaker Change: will bring the all-in sustaining costs down and right now we've got all-in sustaining costs, depending on the mine, is somewhere between just under $1000 to $1150.
Speaker Change: And then on top of that, a normal sustaining number is about $250 an ounce, I'm talking about per ounce now. And we've got another $200 on top of that, which is really rebuilding some of the infrastructure. I'm speaking broadly, each mine is slightly different.
because of its, you know, its overall base cost.
Okay, so
Speaker Change: medium-term, albeit about $200 delta reduction in spending. That's really forecasting that by...
Speaker Change: We'll work it through. And again in our investor day we'll unpack that and show you it.
Thanks, I'll let someone else have a go.
Speaker Change: Alan Spence, BNP Parabax, and a few from mine. Is that all allocated or have you been maybe a bit more efficient year-to-date?
Let me ask you, this is an annual question.
Speaker Change: Slightly different to what we would have planned in 2024, and there's going to be some expenditure that was...
Speaker Change: plan in 2024, which will inevitably roll over into 2025, but invariably that just means we kind of manage that longer term capital profile over the life of those assets.
Speaker Change: We're comfortable with that guidance as it stands at the moment, and obviously that will reflect in our guidance on our oil and sustaining costs as well, where we've indicated we still believe we'll be within
Speaker Change: the range that we provided at the start of the year, albeit adjusted for that higher gold price impact.
Speaker Change: released this morning it notes kind of confidence in a strong replenishment net of depletion including big contributions from Luwana and Rico Deak if you just looked at the operating assets would it be a similar view you're looking at net increases and maybe which mines are you seeing the best opportunity
You ready for this? Okay.
Speaker Change: Yes, so as Mark said earlier, for North America we're currently tracking at about 75% replacement of all the net depletion. Africa overall is looking at a net positive at the moment and then LATAM, between the different assets there's some potential positive metrics being unlocked at PV through the ongoing TSF expansion work.
Where is Polgar over here?
Speaker Change: We've got some quite significant updates in the mine plan, particularly on the open pit, which will be, as we're bringing, unlocking some of that Wangima pushback that we've been talking about. For quite some time we've started that drilling. We've been drilling through the course of the year, and so the first portions of those open pits will be starting to come into our reserves.
Speaker Change: For our account, about 13. 13 million ounces. But again, we'll be giving a lot more detail at the investor day coming up.
Okay. Bye.
Speaker Change: The environmental rehab provision has been impressive, how much the reduction has been there. Is it all what you would consider best in class now, or is there maybe more opportunity to further reduce? So, according to the international tailing standards, of which we're a founding member,
Speaker Change: We have a safe closure definition, which is the sign-off of a facility by independent experts.
Speaker Change: Barrick has always had a stand, you know, it's an industry leader in its oversight of tailings dams. It has an independent tailings board that oversees our tailings
Speaker Change: rehab and and our designs and and our continued in compliance of our of all our tailings dams.
Speaker Change: And so, when I got to Barrack, you know, Barrack is, you know, people always miss...
Speaker Change: the liabilities you buy when you do M&A. No one ever does that work.
having bought assets that we never ever mined.
Thank you. Bye. Bye. Bye.
Speaker Change: I've got the most expensive hat in the world called Homestack But maybe Grant, who leads our sustainability side, can just comment on our philosophy
Yeah, I mean, I think...
Speaker Change: You talk about being industry leading, I think we certainly are. I think the approach that we took after the merger was that...
We weren't gonna
Speaker Change: Kick that can down the road in terms of closure. We're going to proactively manage it and I think you've seen it in the numbers I think one of the biggest focuses for me and the team has been long-term water management We don't believe that you know water treatment in perpetuity is a closure option
Speaker Change: and we review those on a monthly basis and we're tracking well ahead of those and that's also key to reducing our liabilities while we mine.
Speaker Change: And one of the big drivers of our margin is managing that non-production cost, which is related largely to this. We've got sort of a bundle called interest.
And then...
Speaker Change: and we get some interest back on that because we've got a cash position and then the closure liabilities and we've brought that down substantially and this year we will take Perina
Speaker Change: to a place where there's a big step down in ongoing costs and then we start heading towards closure.
Speaker Change: and the same with the Pascualama, you know, we've brought that cost down because the challenge that I gave the team is we're going to engineer the closure.
Speaker Change: And we'll get out of that quite quickly. I mean, you've got lots of older dams, but they are not at risk, and it's a matter of just closing them properly.
Thank you.
Anybody else?
So we move to the...
people on the call.
Speaker Change: Certainly. To join the question queue, you may press star then 1 on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2.
Speaker Change: Our first question is from Lawson Winder with Bank of America Securities. Please go ahead.
Speaker Change: Thanks very much, Operator, and hello, Mark and team. Thank you for today's update.
Speaker Change: Can I get an idea from you guys? I suspect we'll get some of this at the investor day, but I thought just maybe an early hint as to what you're thinking about for 2025 CapEx directionally. So 2025 total CapEx versus 2024 and then any thoughts on
which direction sustaining would be going and growth separately.
We've given you some guidance in the MD&A.
A heads up, we gave you a guidance last quarter.
Speaker Change: We need to finish the work, and so the intention is to give you that directional steer at the Investor Day, and that will be ahead of our final New York Gardens, which we'll give you at the quarter four meeting.
So, I think I'll stick with that.
Speaker Change: Do you want to say something? Yeah. Okay. Graham is going to say something. The only thing I would add, Lawson, is...
Graham: You know as we've guided. We've got two big projects that are scheduled to start next year, so Directionally CapEx is going to be up
Graham: That's growth capex. I mean, Lawson is asking for the sustaining capital.
Graham: And again, the big thing here is, is this industry making real money out of mining its own reserves?
Graham: And that's where we're driving back. That's our absolute focus. And so, you know, moving, allocating, sustaining capital to growth capital is like it defeats that object.
Speaker Change: Oh yeah, very fair point and thank you for that caller both of you.
I also wanted to
Graham: Touch back on the reserve and resource update. So, you discussed 4-mile. You are in the process of updating the model and looking to revise the current 4-mile resource estimate from last year.
Graham: including a disclosure on an updated PEA. Is that something we can expect to be complete for the year-end 2024 R&R update?
That's it.
The answer is yes.
Speaker Change: I like short answers, thank you. And then just on the R&R update...
Speaker Change: correlate with your ultimate budgeting gold price assumptions for next year? I mean certainly looking at spot pricing versus the $1,300 per ounce that is a really yawning gap and it would seem that you know that probably needs to narrow at some point.
I'd just love to hear your thoughts on that.
Speaker Change: So we're forecasting around $1,400. The inflation is, basic inflation CPI over the last three years is substantial in the 20s.
and mining has been higher.
Graham: And on top of that, we've dropped the grade from the grades that were mined in a lot of the barrack mines when we took over. So we've squeezed that margin and delivered more efficiency.
But at 1400, we deal on all our major
over the whole life of those reserves.
and that's the way we test it so
You mustn't confuse, so we have always stuck to
The
Graham: The reserve price that delivers our oil bodies, our world-class oil bodies. If you go higher...
in all our major ore bodies.
Graham: So Nevada, PV, Kibale, Lulagun, Kato, Pogara, all the big deposits, Valdera
Speaker Change: We would move out of the ore body and you dilute the grade.
Speaker Change: And so when you do that, you dilute the NPV, the value of the asset. And so we manage that.
Speaker Change: And when we run our budgets, we always use the reserve grade.
Speaker Change: You can't see what's good and bad and and then we lift that
Speaker Change: price, the commodity price, whether it's gold or copper, closer to the spot for the next year. That's the way we run it and we use consensus on the long term.
on the valuations.
Speaker Change: So that's how we manage our business. There's a lot more to it and copper is slightly different because both feasibility studies are being run at $3 and all our mines work at $3.
Speaker Change: In a year's time we might well adjust that because we know that that will still keep the ore bodies intact and it won't push us outside the ore body and if you do if you follow the the strict signs
Speaker Change: What you do is you need to put in extra capital to be able to deliver the same production profile.
Okay, thank you very much, Mark.
There you go.
Speaker Change: The next question is from Anita Soni with CIBC World Markets. Please go ahead.
Anita Soni: Hi, good morning Mark and team. My question was around Nevada gold mines. I think 2024 was a bit of a dip year on grades. Are you still expecting an uptick into 2025 on the grade front and specifically with Jaffas? I'm assuming it was
Carlin, because Carlin was down this year.
Mark Bristow: So, you know, Anita, certainly Turquoise Ridge is going to drive great, and Cortez as well, as we ramp up.
Anita Soni: what we do with Gold Quarry, Open Pit and the other Open Pits.
Speaker Change: And that's the focus of Simon and the team as we finalize our...
Speaker Change: you know, that'll change to, you know, the overall feed grade.
Speaker Change: and it delivers production growth and likewise with the ramp up in Cortez and And then we've got the other opportunities that we That we you know we're looking at
both in the gold rush and I mentioned Hansen
Speaker Change: And Carlin is the one that we really have to spend more time on. We've got the crossroads open, but I think clearly understood. We're busy still scheduling the mine plans, but we now really understand that.
Speaker Change: that deposit. And we've got a big focus on the open pet mines for the next laugh of mine updates.
To be frank, it was backfill infrastructure, process reliability.
and some management issues.
We've fixed the management issues.
We are pretty much on top of the backfall.
Speaker Change: We were worried whether we would lose part of the CIL tanks they had worn so thin.
Speaker Change: And so we've now had a position where we know we're through that. I think we've got one more tank to go.
Speaker Change: I think one more tank to go and we've upgraded all the tanks. And then the GEHO and the autoclaves, we've got a bit more to do on upgrading some of the pumps in this sequence.
Yeah, out in the back of the...
All right, last question is with respect to...
Speaker Change: inflationary pressures you're seeing. Obviously with Newmont's results people are a little focused on cost.
Speaker Change: I'm just, outside of the grade changes, what kind of headwinds and tailwinds are you seeing on the cost side going into 2025?
So our job is to manage costs.
Contract cost comes from, but it's not from us.
Speaker Change: I mean, the cost pressure in labor is there, everyone knows it, and if you're in the United States, we didn't have the luxury of having to offset it with softer currencies.
Speaker Change: So we've managed that, and again, the big focus is on, are we still not as efficient in Nevada as we are in some of our African mines?
Speaker Change: But we're getting there. And then, as I touched on, it's about managing down those costs because they're there. And the way to do that is, one, better efficiency, which means...
RT sort of type machine control.
Speaker Change: Again, we don't, you know, I find it quite strange that people, you know, the inflation is real.
Speaker Change: When you look at the average total cash costs of the mining companies in
Speaker Change: in, you know, four years ago, or three years ago, and then you look now, something's different. Most of the time it's great. Higher grade.
Speaker Change: And a higher grade means shorter life, unless you find more answers.
And so that's our focus and, you know, I...
Speaker Change: We've adjusted our mine plans to, you know, to use $1,400 gold because we see that's embedded in cost increase after everything we've done and and then some of the higher costs
Speaker Change: in our all-in sustaining costs is not inflation-driven, it's capital-driven, it's infrastructure-driven.
Speaker Change: And we'll get over that. So that's why we don't use higher Costs for those short years because we get through it
Speaker Change: And that's very useful with the goal process it is today.
All right, thanks. That's it for my questions.
Speaker Change: The next question is from Tanya Jakuskinec with Scotiabank. Please go ahead.
Speaker Change: Oh great, good morning everyone. Thank you for taking my questions.
Speaker Change: Just maybe wanted to come back to Pueblo Viejo if I could. Mark, you gave us the recovery. Thank you for that. Looking forward to get into that higher recovery. When do you think you will be in when do you think you will get to your name plate capacity now?
Speaker Change: You know, when do we look for 14 million tons per annum?
Speaker Change: You know, we had this debate last time, Tanya, which you led.
Speaker Change: So, we're going to make our 80% recovery by this year. We're targeting 85% next year and the following year we'll be at the end of the following year at this stage. But you know, we've...
Speaker Change: On days and over couples of days even today, now we are getting runs that exceed our nameplate and get up in the recoveries and that's part of this commissioning. You know, we've got two SAG mills.
Speaker Change: One single sag mole, one ball mole, and a very complex flotation process. And that's what we're busy managing.
and so
You know
Speaker Change: The target, Graham, is 2026 is when we go into above 800,000 ounces. That's the best I can do for guidance now.
Speaker Change: and 22nd of November we'll give you a little bit more colour.
Speaker Change: Okay, and that would be when you're assuming that 14 million tons.
Speaker Change: No, we'll get, that'll come out over the part of the 20, yeah 2026 is when we will get to that throughput, yes.
Okay.
Speaker Change: Okay, helpful, thank you. And then just maybe a higher level question for Nevada Bull Mines. With all of these changes, and I appreciate, you know, you're getting Turquoise Ridge fixed, you're changing mine plans at Carlin.
You've got four mile growing but
Speaker Change: you know, we'll leave that one out for now. I think previous guidance had been that this complex could get on a 100% basis up to about that 3.5 million ounces.
Speaker Change: I think we're just under 3, 2.8-ish or whatever we are for 2024. Long-term, have you changed your view on what this complex can deliver, excluding poor moms?
Speaker Change: It's certainly the third biggest gold producer in the world, by the way, if you put Barrick and Newmont aside.
Thank you.
for for us absolutely long term
Speaker Change: The question is how do we get there? And then the opportunity is still immense. You know, because we're now on top of our...
Both the two previous owners
If they had continued, we wouldn't have Nevada gold mines.
Speaker Change: I mean that's a fact and today we've got a serious asset and I would point out that neither Newmont or Barrick issued a single share.
Speaker Change: for their holding in this business. And it's certainly a whole lot better than it was, and it's going to continue to improve. And the big focus for us is cost.
is getting those costs out.
Let me just set you right there.
Speaker Change: we're constrained on the amount of refractory ore we can process.
Speaker Change: And so the linkage, and we told this to the market, there's another issue about the open cost, which is a great flexible add-on, which is Long Canyon, but there wasn't the reserves that people thought, and there wasn't the reserves that analysts had modeled.
And we bought this asset, remember, based on analysts' consensus.
We didn't do any due diligence, if you recall.
Speaker Change: Right now, well last year in particular, we didn't have less of the flexibility of the open pits. This year we've got even less flexibility from open pits.
Speaker Change: and a lot more feed, and the roasters we've expanded now, and that's it, that's it. So, when we have a roaster go down...
Speaker Change: The way to catch up to guidance is to be able to access higher grade ore. And so to be able to do that we've got to have flexibility with available higher grade ore to make up the difference. And I'll give you an example.
Both Lulogon Kotto and Kabali are now at that stage.
Speaker Change: where the way we maintain our guidance is the flexibility in mining.
Speaker Change: and we need to get Nevada to that point and we're a whole lot better as you'll see this quarter four you'll see some of those those results
Speaker Change: So how when do you think you when do you think Mark you'll get there to where you put all that time and energy into the other other minds and you got there do you think we're a year away two years away?
Mark Bristow: Leach pads or into the oxide mills, and we've got plenty of capacity in oxide mills. At this stage we're transitioning in the autoclaves, but we've still got capacity there as well.
Speaker Change: All right. Maybe one other question for you, and then I do have one confirmation question just for Graham. I'm going to go back to the Q&A, and I'm going to turn it over to you, Graham, and then I'm going to turn it back over to you. All right.
for myself, you know.
Mark Bristow: and the government. I'm just confused as to where we are on this. I thought an agreement had been put in place, you made a payment, and then we have a press release saying that the government may not renew the contract or contract of work. Mark, where are we on this?
Mark Bristow: You're referring to the press release the government made, and then there was a subsequent press release that we made which was very clear about where we are. And Tanya, you would understand it's not my intention to debate this issue publicly.
Mark Bristow: We are engaged with the transitional government of Mali and we have indicated that we are committed to finding a way
to share the...
The benefits.
Mark Bristow: as we've done in Tanzania and Papua New Guinea and as we do everywhere.
Mark Bristow: and we're prepared to give more to the Malian government than 50% and that's the negotiation. And at the end of the day we are very clear that we are the major flywheel in the economy of Mali.
There's no other
makes a bigger contribution to the Treasury.
Mark Bristow: At the same time, we're also mindful that our job is to ensure that the national assets are properly unlocked for the benefit of all stakeholders. And again, you know...
Speaker Change: Just not having this conversation. If you're a partner with a host country you should have this conversation because otherwise you allow a situation where the costs are increased abnormally.
Mark Bristow: The value benefit to Marley and his people are best done.
Mark Bristow: around a model, around a table, understanding exactly what Lula-Gonkata looked like. And we are engaged and we will continue to engage until we work out a plan, because we are definitely
Mark Bristow: deliver that value for the benefit of Mali as we have done for the past 30 years.
Look forward to concluding something on that soon.
Speaker Change: Maybe my final question for you, Graham. I just need to confirm, 40% of your costs, I think, is labor.
Mark Bristow: Just on the inflation, wage inflation that's going on globally, would it be fair to assume that you're within that 3 to 5 percent on wage inflation as we look into 2025?
Speaker Change: Yeah, Tanya, that's a reasonable range to say we're in. Obviously, in different areas, you've got different pressures, but that's a reasonable range.
Okay, thank you so much for taking the time.
There you go.
Mr. Bristow, there are no further
Any questions back in this room?
Speaker Change: okay well thank you everyone it's nice to be back in London
Speaker Change: I wish you a good Christmas and a Happy New Year and look forward to catching up. We are on a roadshow now, we'll be meeting some of you again this evening and as I always say for you here in the room and those on the call, we're always available if you have any questions that you forgot to answer now, if you want to reach out to the team, we're always available. So again, thanks for coming and see you all soon.
Speaker Change: This concludes today's event. Should you have any additional questions, please contact the BEREC Investor Relations Department. You may disconnect your lines. Thank you for participating and have a pleasant day.
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