Barrick Gold Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 3, 2023

There are 8 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to Barrick's Results Presentation for the 1st Quarter of 2023. Following today's presentation, a question and answer session will be conducted. Call.

Operator

We will also be taking questions from those in the room. As a reminder, this event is being recorded and a replay will be available on Barrick's website later today, May 5, 2023. I would now like to turn you over to Mark Bristow, President and CEO of Barrick. Please go ahead, sir.

Speaker 1

Thank you very much. And ladies and gentlemen, a very good morning to those quarter. And of course, a good day to those around the globe. Quarter. As you know, we're going to be talking about our results for Q1 2023 today.

Speaker 1

Quarter. And I thought I'd start off by just pointing to the fact that as quarter. The different global powers seek to extricate the world from the many challenges and indeed crises quarter. We have a lot of talking, but don't see much action. Quarter.

Speaker 1

Instead of fantasizing about some post industrial idyllic state, the world's political and business leaders quarter. Should perhaps be considering a better future for all, not just for the wealthy countries. Quarter. This requires, of course, investment in the development of sustainable enterprises driven by cleaner energy quarter and extending to the many parts of the world, in fact, most of it, which have been left behind by the West's economics advances. Mining has historically been the catalyst for economic growth in underdeveloped countries.

Speaker 1

Quarter. And I would argue that the case for investments in mining in those countries is stronger than ever, quarter, particularly as many are rich in the resources required to make the world a better place quarter. At Barrick, we have always been committed to investing in the future. And in the process, quarter. We have created some remarkable value for our broad base of stakeholders.

Speaker 1

I'll share a few instances quarter 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 quarter. As guided quarter. At the start of the year, Q1 was a softer production quarter due mainly to the major planned maintenance exercises at Nevada Gold Mines and Mine Sequencing at Kibali. Free cash flow increased despite the lower production, quarter, while adjusted net earnings per share also increased to $0.14 Operational highlights included the near completion quarter of the massive Pueblo Viejo Expansion Project, which I'll tell you more about later.

Speaker 1

A robust performance from Turquoise Ridge and the delivery of 1st production stopes ahead of schedule from the new Gounkoto underground mine. Quarter. 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 end, but a stepwise move through the year. We also recently published our annual sustainability report.

Speaker 1

And if you haven't seen it yet, it's well worth a look and it's on our website. Group operating results. This is a summary of those operating results, which lists the factors quarter that impacted on production in quarter 1 and those that are expected to drive performance quarter and full year 2019 through the latter half of the year. This should ensure we achieve our gold and copper production quarter. We will now begin the presentation within guidance as well as the cost guidance we provided at the start of the year.

Speaker 1

Quarter. Despite the lower production, our high quality asset portfolio increased free cash flow quarter and allowed us to maintain a $0.10 quarterly dividend in line with our performance dividend policy. Quarter. Our tax contribution report was also published last month, which highlights our significant contributions quarter. As shared with you last quarter, quarter.

Speaker 1

We experienced 3 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, quarter. We evolved a new approach, which we have called the journey to 0. Every one of our corporate and regional leadership quarter.

Speaker 1

Teams have spent time at the operations reinforcing our organizational values captured in our DNA and reminding ourselves that safety comes with caring and committed partnerships, quarter, where we call on unsafe practices and stop work until we have a safe way to continue. Quarter. 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. Quarter.

Speaker 1

And it's actually quite encouraging today. I sent a note to the North American teams, including Nevada. They had their first quarter. Quarter. We've mapped that road to 0 and how you can see the very specific steps we're taking towards achieving that goal.

Speaker 1

Quarter. This has been the single biggest focus for the entire company and remains our top priority with a particular focus question on creating a culture where everyone has the responsibility to stop unsafe work practice. On the environment front, there was no Class 1 environmental impacts during the quarter. Quarter. Our water use efficiency rate was again above the 80% target and our greenhouse gas emissions decreased quarter by 18% quarter on quarter.

Speaker 1

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, the first white rhinos are expected to arrive in the Democratic Republic of Congo soon as part of our mission quarter. We are pleased to restock the species in the country's Garamba National Park, a UNESCO World Heritage Site, which we've long supported. As I mentioned earlier, we've just published our 2022 sustainability report, quarter. And you can see some of its highlights here.

Speaker 1

It's worth noting that during the year, we spent $6,000,000,000 quarter. We have invested some $36,000,000 in community development projects quarter. Quarter. Moving to the operations, as usual, I'll start the operational review with North America, quarter, which as I've said before, we regard as our value foundation. From our base in Nevada, quarter.

Speaker 1

We've started looking at the potential Tier 1 hosting regions elsewhere in the United States as well as in Canada. Quarter. With the complex work of combining 2 sets of assets and people accomplished, quarter. A new leadership in place and a bankable 15 year business plan, the vision we had for Nevada Gold Mines quarter. In Q1, production at Carlin quarter was impacted, as I've already said, by the planned conversion of the autoclave to a carbon and leach process plus the planned maintenance of the Goldstrike roaster.

Speaker 1

The focus is now improving stability quarter and throughput. At Cortez, the emphasis remains on ramping up the Goldrush project quarter. The record of decision is now expected in the second half of this year. There is no significant impact quarter and anticipated for 2023 production and the potential impact to 2024 and onwards is being reviewed. Quarter.

Speaker 1

Turquoise Ridge's performance continued to improve on the back of the first full quarter of production quarter from its recently commissioned 3rd shaft. In Nevada, quarter. The safe and efficient drilling ramp up this quarter returned robust intercepts across all the Tier 1 districts, quarter. Delivering further resource growth in support of our 15 year plan. With snow receding quarter.

Speaker 1

From the higher ground and a very long winter, we are planning to build on our success at Fourmile by stepping out quarter around the recent Dorothy discovery. As I said last quarter, this is a very exciting area quarter, where we continue to discover thick and continuous high grade mineralization, which we expect will materially quarter. At Turquoise Ridge, drilling continues on extensions quarter. Of the BBT resource as well as testing between the megapit and the hunt for a high grade feeder. Quarter.

Speaker 1

And on the Carlin trend, bold step out drilling between Leeville and Goldstrike is intersecting strong and continuous alteration quarter. Quarter. Elsewhere, as I pointed out in the beginning, in North America, our exploration is opening up new frontiers, quarter. And we've started building a significant presence there. In Western Nevada's Walker Lane mineral belt, quarter.

Speaker 1

We've secured the Pearl String property through an expiration agreement and additional claims staking. In Montana, quarter. We've staked 100 square kilometers of claims where we've identified a potential target area for both copper and gold. Quarter. And we are working on other opportunities in other prospective regions in the Western United States.

Speaker 1

In Canada, we are progressing the PIK project near Hemlo, relogging its historical core to guide modeling and targeting. Quarter. Also in Canada, we've signed a binding term sheet with Midland Exploration to earn up to 75% of the Patrice property in Southern Abbotibi. Quarter. We move now south to our Latin American and Asia Pacific region, which had a busy quarter highlighted by the progress quarter.

Speaker 1

At Pueblo Viejo, a prime example of successful value creation by Barrick. And of course, the exciting new Rickadick project is starting to take shape, which I'll touch on quarter. A little more detail, and I'll update you on our stepwise move towards restarting the Porgera project. At the time of the merger in 2019, you would recall, Pueblo Viejo, quarter. A Tier 1 minutee was rapidly nearing the end of its life despite its enormous resources.

Speaker 1

It simply did not have The tailings storage capacity to process them. We are investing around $2,000,000,000 quarter. On a 100% basis, in expanding and upgrading the operation and after a long and considered engagement with the Dominican government and the community around the mine, we have identified a site for a new tailings storage facility. Quarter. The new plant was more than 90% complete at the end of the quarter, and we've started an aggressive commissioning program quarter in April, targeted to be complete fully complete, in line with our plan during July.

Speaker 1

Quarter. As a reminder of what I have said in the past, the existing storage facility can cope quarter, with the tailings until 2027, when the new one will have been completed. The project will extend Pueblo Viejo's Tier 1 life by at least 20 years quarter. At an average annual production rate of more than 800,000 ounces per year. And its success is a tribute quarter.

Speaker 1

We are pleased to announce that the partnership between management, our host country and the surrounding communities. Quarter. Management also deserves credit for keeping the mine operating efficiently despite the inevitable disruptions quarter caused by construction and the tie ins. Veladero made a promising start quarter. But as I'm sure you all appreciate, Argentina has a worsening currency crisis quarter and import restrictions, a change in fiscal policies almost monthly quarter.

Speaker 1

And as a result, the operating environment is becoming increasingly difficult. Quarter. We continue to work constructively with the San Juan Provincial Governor and his government to try and find solutions quarter for the longer term. Our planned headcount optimization quarter and the higher gold price have somewhat mitigated the operations negative projections for this year. Quarter.

Speaker 1

But there's still a lot of work to be done on the cost profile and the resource expansion quarter. We have had some recent success with our exploration programs around the exploration, most notably at the Moro Escondida target, and we continue to extend quarter. A generative exploration review of Central and South America continues 5 drill ready targets in the Austral project in Peru are moving up our resource triangle. Quarter. And as I've mentioned, we're testing some targets around Veladero as part of our life of mine extension strategy.

Speaker 1

A high level project study on the Pascua Lama project is also scheduled quarter. Moving across the globe. In Pakistan, quarter. The updated feasibility study on the Ryker Dick 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 quarter.

Speaker 1

With the rollout of the 1st community development committee and a drive to bring schooling to the region. School was inaugurated at the Hamai Village, which will provide education for children quarter. And we're also very proud of the fact that the enrollment of the first students quarter. Was done on a 50% boy and 50% girl basis, which is a significant step forward in that region. Quarter.

Speaker 1

The reconstruction of the runway at the site, which is now complete, will improve access and reduce the need quarter. And the selection of a project engineering partner quarter. For the project, both for the feasibility study and later on design and construction is nearing completion quarter and some key definition studies are now up and running. As I indicated earlier quarter. And as you may have seen in the press, a new Porgera Progressive Agreement progress agreement quarter was signed in March between Barrick New Guinea Limited, the Papua New Guinea Government and New Porgra Limited.

Speaker 1

Quarter. Newpaulger Limited has initiated the steps to apply for a new special mining lease, quarter, which is a key step to the reopening of the mine. There's currently a lot happening quarter 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, quarter. As I've said before, if North America is our value foundation, quarter.

Speaker 1

The Africa and Middle East region is foundational to Barrick's performance. Quarter. In Mali, Loulo Gounkoto produced its usual robust performance with new Gounkoto underground mine making its first contribution ahead of schedule. Loulo's 40 Megawatt Solar Power Expansion Project continues to advance with commissioning of the first phase expected by the end of this year. Quarter.

Speaker 1

And when complete, it is slated to reduce carbon emissions further by a further 63,000 tonnes quarter. The Loulo Falami District, quarter, which straddles the border between Mali and Senegal, remains highly prospective and all key structural corridors in the region quarter. At Bambadji in Senegal, drilling has started on priority targets along the 26 kilometer main share zone. And at Loulo, initial drilling quarter. On the Gara West Corridor has confirmed the potential for a significant but largely untested Mineralized Structure.

Speaker 1

Across the continent, in the DRC at Kibali, quarter. Production was in line with planned sequencing and planned maintenance. Grades are forecast to improve quarter as development opens up access to new stoping fronts, improving underground flexibility. Quarter. Like Loulo Gounkoto, Kibali has a high potential for major discoveries as has been shown in the past.

Speaker 1

Exploration continues along the principal mineralized corridor, which quarter. The targets currently being advanced include potential underground satellites quarter at Mengu Hill and Wherry, a new mineralized systems between the KCD Garamba quarter and the Kombekola ore bodies. And in Tanzania, we have another success story. You may recall that when we took over there a few years ago, these mines were derelict, quarter. We are also very pleased with the progress we made in the quarter.

Speaker 1

We are also very pleased with the progress we made in the quarter. Quarter. In very short order, we reinvented the mines, which now between them deliver a Tier 1 production profile, formed a groundbreaking benefit sharing partnership with the government and settled the legacy issues. The potency of Barrick's stakeholder relations and impact is demonstrated quarter. By our recent commitment to invest $30,000,000 in partnership with the government quarter.

Speaker 1

Quarter. Also during the past quarter, our growth initiatives in the Africa and Middle East region quarter focused on expanding our footprint in all its Tier 1 districts as shown on this map quarter and optimizing our exploration to deliver high impact discoveries within our existing portfolio. We are reviewing new operational frontiers in West Africa, delivering new projects quarter in Saudi Arabia, and we are developing multiple exploration opportunities quarter. We are now in the Q1 of 2019. We are now in the Q1 of 2019.

Speaker 1

We are now in the Q1 of 2019. We are now in the Q1 of 2019. We are now in the Q1 of 2019. Quarter. I turn now to our copper operations, which as you are aware, we are on track to deliver significant expansions.

Speaker 1

Quarter. At the time of the merger, Lemona in Zambia was a doubtful starter. Quarter. But like PV and the Tanzanian mines, we have transformed it almost beyond recognition. Quarter.

Speaker 1

The super pit prefeasibility study, which includes a potential new mill expansion and tailings storage facility quarter. This project could extend the mine's life quarter. In the meantime, quarter. We've also reinvigorated our Copperbelt exploration leadership and begun the transition quarter. We expect to continue to deliver a significant cost reduction.

Speaker 1

In Saudi Arabia, in conjunction with our joint venture partners, Ma'aden and the Kingdom of Saudi Arabia, we have received an exploration license for the nearby Umar Damah permit quarter. In addition to the Jabal Saeed South Permit and initial field work has started on both these prospects. The 2019 merger was designed to create a business quarter that would deliver sector leading returns. And as you can see from this comparison with the GDX and SPOTGOLD, quarter. We've outperformed these benchmarks.

Speaker 1

Step by step, we have worked to deliver on our strategy quarter that we shared with the market back in September 2018 with just about every objective we outlined then quarter. Today, I'm immensely proud of where we have got to, quarter. Although we still have a lot more to do, with the proven ability to replace the reserves we are mining, quarter. We are not reliant on M and A to grow. Our new projects on the horizon quarter.

Speaker 1

Should see us grow our production profile, and this affords us the luxury of focusing on our organic initiatives, quarter, while being able to choose external opportunities when they arise. Quarter. I believe we have passed an important milestone this quarter on our journey to become the world's most valued gold quarter and copper miner. As I've often said, mining is a long term game, and the foundation we have laid quarter. So ladies and gentlemen, quarter.

Speaker 1

To finish off my presentation, how some of the key reasons for investing in Barrick. We own what are indisputably quarter. We have a clear and proven long term strategy, which we execute quarter. We consistently invest in our future. Our existing mines support quarter, a 10 plus year production profile, which our organic growth projects will enhance.

Speaker 1

Our reserves are constantly replenished quarter by our successful exploration programs, which include exploring worldwide for our next major discovery. Quarter. And finally, we are a leader in sustainability and our actions in this field produce measurable results quarter that benefit all our stakeholders. In short, at Barrick, we do as we say, and I thank you for your attention, quarter. And we'll be happy to take questions starting, I believe, with these people in this room.

Speaker 1

Thank you, Lars.

Speaker 2

Hi, Mark. Thank you so much for the presentation today. Nice to see you. Quarter. I wanted to ask you about some statements you made in an article interview from back in March quarter.

Speaker 2

I was with S&P. And you made the comment that M and A should only be pursued if the target is Stressed, and I wanted to get your idea as to what that stressed means. And further to that point, What type of M and A makes sense to Barrick today?

Speaker 1

Yes. So I can't remember that quote, I must admit, But it makes sense. So whoever said it. But the point is that I've always said there are two reasons you buy companies, And that is if they're really good assets or they are it's a company that has those really good assets quarter. And as you know and you've seen repeatedly, quarter.

Speaker 1

During these times of higher commodity prices and less options, any asset that's half decent gets a quarter. 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 quarter. Going upwards. And you know, I mean, everyone in this audience knows that doesn't happen.

Speaker 1

The gold price goes up and down, quarter. Not necessarily in that order. And so it does get then down to the synergies And whether you have the ability to add to the opportunity that you're pursuing. And there's an interesting graph. We were talking with the exploration team yesterday.

Speaker 1

If you take and I've shown this before and we can share it to you on our website, But if you look at Barrick in its heydays, it's early days and Randgold Resources through its entire life, All the M and A we did, and we both did M and A, came with significant increase in reserves, material expansion on the drill bit and a classic one is Kibali, which had 5,000,000 ounces. We've mined 10 and we've got 10 Left. I mean, that's value creation. We bought Loulo with 500,000 ounces, And we've delivered we've mined also around 10, and we've got 10 left or more than 10. So it's quarter.

Speaker 1

22,000,000 ounces on the back of that first half a 1000000 ounces. Tongon, we discovered, Marilla, we quarter. And the classic one is Goldstrike. When Barrick bought Goldstrike, I think they bought like 3,000,000 ounces and it's produced 33,000,000 ounces. So those are the debates that we have.

Speaker 1

And if you're really looking to create value rather than gamble, that's the opportunity. Quarter. And as you know, there's different views in Canada about how to create value. Some people say You can only grow through M and A. And I very clearly say you create value the way you create value is through the drill bit, quarter.

Speaker 1

Adding ounces, buying them doesn't create value, it might increase your production. Quarter. And so and again, if you take some of our peers and you listen to their messaging and you take quarter. My messaging, it's all about sustainable profitability. So then it's about how do you what's the acquisition target quarter.

Speaker 1

And what does it do to your profitability? Because that's our focus, grow value and not just growth. And a classic example quarter. If you look at our series of transactions in 2019, they were very strategic, quarter. Driven off the back of a 2.5 year engagement, thorough due diligence, we came out in September 2018 with a clear set of deliverables, including people.

Speaker 1

Quarter. If you take Newmont's acquisition of Goldcorp, it was purely opportunistic. Quarter. And so that's the difference. And I'm not trying to pick on anyone, but there's a different strategy there's a different business philosophy in one and there's a very clear business strategy when it comes to Barrick.

Speaker 1

Quarter. And so when it comes to M and A, as you know, we have worked and looked at everything that's been put in the market. Quarter. And we've also looked at many that haven't been put in the market. And we haven't very recently done any.

Speaker 1

Quarter. But when you look at the Tanzanian deal and the Nevada deal, That happened very quickly because they fitted all our filters easily. So and that's the way we'll continue to do it. Quarter. And very clearly, as you go like and this is like 2011.

Speaker 1

Gold price up, no one's invested, no one's got exploration teams, quarter. And so you have to buy. And the people who make the money are the sellers. And so we're that sort of doesn't fit

Speaker 2

quarter. Yes, I was going to ask one follow-up, and it's Lawson Winder from BofA Securities, by the way. Quarter. Around that same time, you made a comment that you wanted to see copper grow to 30% of the profitability of the business. I think it's sub-twenty percent right now.

Speaker 2

So I'd also love to get your thoughts on What are the elements that drive that potentially beyond just the Lemoana Super pit? Thanks.

Speaker 1

So that again, that's a thank you for that question because if you go back in 2018, we were very clear quarter. If you want to be relevant in this public market of mining, Again, as a gold miner, you're going to have to grow and include copper in your portfolio. And we didn't do it because it's suddenly a fad and somebody is trying to make lots of batteries. We identified it as a very strategic metal, as strategic as gold is precious. Quarter.

Speaker 1

And so we set out to build that. And the growth sits in Jabal Said. Quarter. We've increased the production there by 50%. It's a completely different mine to what it was in 2019.

Speaker 1

We've grown its footprint materially with these last two deals in a real partnership with Saudi Arabia, quarter. Where it's fifty-fifty and we are the operators in a formal structure. And that's not common in Saudi. And of course, you've seen us working with Saudi, and we've spoken a lot about the opportunities that, quarter that partnership will bring further into South Asia. And then Lemoina, we look to sell it initially.

Speaker 1

By the time we had our first look at it, very quickly, I mean, we dropped the mining cost by 50%. And we find a whole lot more pounds in satellite deposits. And what those do is they slightly higher, very low strip ratio. They allow us to keep building the profile And strip back the main ore bodies, the 2 main ore bodies. And so that's the sexy part of quarter.

Speaker 1

And that you can keep the money you can finance that big expansion rather than go into another negative capital dip. And then, of course, you got Ricadec. And Ricadec is a world class deposit. It brings both gold quarter and copper production in an organic way. We haven't bought it.

Speaker 1

It was paid for a long time ago as an early stage project by Barrick and to Fogosto, but our 50 we've now got 50% instead of less than that because it was a shared asset. Quarter. We're partnering with the country. It's opening up a whole new exploration frontier for us. Quarter.

Speaker 1

So when you just take that and Lemana, Lemana will be the equivalent Of our 50% share of this two phases of Ricardec as far as contribution on because in Omana, of course, we have 100%. So you take that and you take our projects in Saudi Arabia, those are all very attractive and make a big contribution quarter. Taking us towards that. And if you go back and blend it as a gold equivalent, quarter. By the time we get to the end of this decade, just on what we've got, not on what we could get, quarter.

Speaker 1

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, we have more ounces today than we started with When we did the first the combination 3 combinations in 2019. Quarter. And that is significant as well in that we are not forced to buy our future production.

Speaker 1

We've been able to sustain it. We've got More than a 10 year horizon. And again, the geologists were working through us this week And we've got we can show granularity of replacement of the total resource we mine quarter. About 5 years now as we've extended our knowledge of our known ore bodies. And all we need and we run the risk of finding something now because Our geologists are well embedded in these regions.

Speaker 1

And I would finish by saying, on top of that, exploration, which very few people in our mining industry really comprehend anymore, is also a key for Mineral Intelligence in proper organically driven M and A Because you've now got people Barrick has 700 people geologists, Joel? 200 yards across the group, that's just exploration, not MRM. And in the field, they are highly skilled, they're commercially savvy. And that's another strategic advantage, which will materialize with time because it takes time to build that Intellectual Capital, which is effectively what exploration is. Do you want to say something, Chris?

Speaker 3

Yes. Just to reiterate what we said at our Investor Day in November. We get to 30% copper organically through those two projects

Speaker 1

quarter that Mark's talked about in terms

Speaker 3

of the super pit and record deck by the end of the decade. So we get there without doing M and A.

Speaker 4

Mark, it's Greg Barnes from TD Securities. You've talked a lot about Argentina and how difficult it 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.

Speaker 1

So in the Governor's office in San Juan, I think we've really built a Strong relationship and as you can imagine, it's been difficult because the Argentinian political structure at the moment is completely muddled. And so we've got that stability, but he still relies on Buenos Aires quarter. And so we spend an inordinate amount of time with like the governor of the Central Bank, Trying to explain to him, so Governor, do you need dollars? Yes, that's exactly what we need. So we actually print dollars for you.

Speaker 1

So that loop hasn't completed yet because what happens is He agrees, but the problem is the Central Bank is not independent in Argentina. So then some politician in the federal government makes decisions quarter. And it's all about and we've seen I mean, I'm an African. I've lived through these crises. I mean, Zimbabwe is probably the best, but we've lived through a number of these.

Speaker 1

And so when you get into that spiral and I always say, actually, Argentina would be do well quarter. Without a government, because it's got all the ingredients of a significant economy. Quarter. It's got a massive agricultural industry. It's got a mining industry and some oil.

Speaker 1

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 Valadero. We've cut back on people. We've worked with the governor of the province to create employment quarter.

Speaker 1

So we just haven't arbitrary cut back, but we've taken nearly 2,000 people out of Valadero. Quarter. We've delayed the capital into next year and at the same time through our construction royalty programs. We've worked with the province to ensure employment on provincial infrastructure programs. Quarter.

Speaker 1

So we've been constructive and the business and we've, of course, invested in people. We continue to do that. Quarter. And it's a different place today and it's running the risk of being cash flow positive this year because we made those decisions. And so we keep we haven't gone and mined in an irresponsible way.

Speaker 1

Quarter. You remember Julian Baring used to say, if you can't mine gold at a profit, leave it in the ground. Quarter. And so that's really our philosophy at Veladero. We're mining the gold in a proper disciplined way we in a profitable way.

Speaker 1

Quarter. We haven't stopped exploring because that's the future and the value creation. And again, I go there often in every quarter. The frustration is it's such a great country with really good people. It's got all these ingredients.

Speaker 1

And quarter. Politically, it's just in a mess.

Speaker 4

Maybe a question for Graeme. Can you get cash out of Argentina currently?

Speaker 1

I can answer that, yes. So we do and we can and we negotiate that, but I'll give you an example. And also, as you've noticed, quarter. We keep gold in this vault. So we manage the gold because you don't want to sell the gold and end up with pesos that you can't spend.

Speaker 1

Quarter. So we rarely use gold as the ultimate currency and with the approval of the government, but that in itself quarter. And then on top of that, I'll just give you some of the the latest regulation is quarter. When you buy something offshore, you can only pay for it 180 days later. Now for small companies, that's toxic.

Speaker 1

Quarter. For Barrick, we've got a big balance sheet. We've got strong partnerships on the supply side. We can manage that working capital pipeline. But inevitably, it's going to really strangle the mining industry in Argentina.

Speaker 4

Just a question tagging on to Lawson's and you quoted this morning about not being interested in Tech Metals, but is the competition for copper resources. Copper mining company is just too intense and not something that you can compete

Speaker 1

in. I think we've got quarter. Lots of competitive advantages, Greg, as you know, particularly in emerging markets. But again, every potential transaction to Lawson's first point is different. And tech at the tech is not a quarter.

Speaker 1

It's not a super producer, and it's but it does have some assets. It's got really good stake in a partnership in Peru. It's got old legacy assets here in Canada. It's got the new, what's it,

Speaker 4

QB2

Speaker 1

in Chile, quarter. And it's got coal. And so and it's got a lot of debt. So when you look at that structure quarter. And Glencore's intervention there has been interesting because what Glencore quarter.

Speaker 1

And so I think I know from our side, we given the current situation, there's no logic for us to get involved in anything like that because we don't have coal, we don't like debt and the synergies in quarter. Chile with the Glencore Anglo assets are very real. We don't have anything to offer. So But at the same time, we're finding it very interesting to follow the debate because it really is indicating where our industry

Speaker 4

quarter. Thanks, Mark.

Speaker 1

Anybody else want to ask a question? Can you ask the host to explain the trick quarter.

Operator

Operator, we're going to go to the telephone questions now, please. Sure. We will now begin the telephone question and answer session. You will hear a tone acknowledging your request. Question.

Operator

Question comes from Clive Rickert with UBS. Please go ahead.

Speaker 5

Good morning, everybody. Thanks for taking my questions.

Speaker 1

Thank you.

Speaker 5

Okay. I just wanted to go back. I know you always sort of I'll take the long view and we appreciate the long term sort of multi decade managerial focus. But I really noticed in the press release the sort of a little bit of a tilt towards some of the near term operational work that you're doing on the assets and the improvement that I think you talked about, That stepwise increase on quarterly production volumes now throughout the year as a result of quarter. And I'm just wondering if as we look into 2024 2025, There is growth in the plan for both of those years.

Speaker 5

Should we expect now just that stepwise improvement in volumes to continue through 2025? Or will there continue to be some seasonality in the business as you

Speaker 1

So let's just deal with the first this year. Yes, this year, we're looking roughly 45, 55, if you take the 4,400,000 ounce attributable production, 1st half, second half, roughly. The drivers of that are and there's no sudden finish in quarter 4. Quarter. And I'll just take you through the drivers.

Speaker 1

So, Carlin, we expect to step up in quarter 2. Quarter. Cortez will be you saw a proven quarter on quarter. It will be similar in quarter 3. All the rest are already at run rate in Nevada.

Speaker 1

And then quarter. Q3 and quarter 4, Carlin and Cortez will be quarter. 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.

Speaker 1

And we've we had to get the people right first. Quarter. And also remember, it's partly unionized and we've just done we just completed a big CBA negotiation, which is Again, just tells you we bring a different philosophy to these things because the union is working alongside nonunion people. Quarter. That's a big step in the United States because it's very clearly understood they work for us, but they're represented by the union.

Speaker 1

Quarter. 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 4 day weeks for management in Newmont. Quarter. The Newmont assets were behind on their plans. Barrick was obsessed with cash flow and high grading.

Speaker 1

Quarter. So culturally, they were different and also operational culture was different. And so we've brought all that back. And now it's a case quarter. And I've done this so many times.

Speaker 1

And when you're climbing the hill, it's like it's tiring and you have Challenges and slowly you build a habit and then you get the habit right. And then you'll see it becomes quarter. And I mean, you guys will some of you have worked through it with Kibali when we ramped it up, Loulo as well. None of the mines we started had quarter. Sort of straight out the block.

Speaker 1

Perfect. And so we're at that stage now and we've now changed the management as per the Barrick or stroke Randgold model in that we flatten that GMs run the mines, not somebody in the corporate. Quarter. We build strong people around them. We've got very good GMs now in Nevada.

Speaker 1

Quarter. And it's taken some time to build some capacity around. And they are in their own right big. So quarter. Running it centrally is not and I don't like doing that anyway.

Speaker 1

So now we've got a much better flatter structure. Quarter. And also we've had to deal with neglected capital and maintenance. And remember, it was a hostile transaction. So we took it as it came.

Speaker 1

Quarter. And we're getting to the point now where we're comfortable with quarter. Our processing facility, it's still process constrained Because as we go underground, we go more to do double refractory ore. So we're expanding the Gold Quarry roaster, which was the highest cost, most inefficient of the 2 roasters. And so with that, that really grows our profile, as you point out, quarter.

Speaker 1

In Nevada over the next couple of years, gently, but it's an improving profile. And then PV It's a big step up back to above 800,000 ounces. We go straight there almost quarter. And what's nice is the front end of just to remind you, what we've done there is we've expanded the front end, quarter. Jacked up our put in a concentrator.

Speaker 1

And really on that basis, quarter. We've kept the autoclave feed the same, but we've changed the whole temperature management in the autoclave so it can take quarter. And we're definitely seeing sort of a 10%, 12% increase in throughput in the autoclaves. And the segment we've put in is enormous. So we've built some flexibility into that operation to be able to where it's a bit like Kibali where you can catch up.

Speaker 1

Whereas in Nevada, it's always unless we've got oxide or heap leach or the refractory flow sheet is really quarter. And so and on the way we've built we're building flexibility for Nevada quarter. Now with the new team is rebuilding some extra flexibility underground because that's the way you do it. And so you open up some quarter. All stocks underground with a little bit more grade in it and then you manage that so that when you have a unplanned shutdown.

Speaker 1

You can start up and feed high grade ore for a while and tidy it up. But then you need to invest in quarter. And that's what we've been doing is putting in that extra flexibility. So those are the drivers that take us to quarter. The better second half.

Speaker 1

And Kibali was the other soft producer this quarter. And that was because we quarter. At the end of last quarter, remember that quarter 4 was a high production quarter. And we fed on our stockpile, the high grade stockpiles quarter. So and when I say it's a different profile to what you've seen this previous couple of years, as we stabilize the organization.

Speaker 5

Quarter. Yes, that makes sense. And I would say that the work that you've been doing over the last 3 years, maybe it's not clear to everyone and you're getting tired of talking about it, but we're looking forward

Speaker 1

No, no, I never get tired of talking about it. Because that's what makes the business and I'll just add a little bit, you hadn't asked the question, but Again, you look at our policy around dividends. Yes, everyone, we I mean, this last 3 years, we've had The market calling for dividends, everyone's been paying dividends and then suddenly what? And now you see people quarter. Still paying dividends outside their dividend policy because the market is paying the table quarter.

Speaker 1

Saying I want some dividends. And we didn't get caught up in that quarter. And our balance sheet is in good shape and the dividends there as we promised and we can afford it. Quarter. And we'll pay it and we bought shares back when the share price was down, not when the share price was relatively high, like some of our colleagues quarter.

Speaker 1

So 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 we are owners, first of all, as management. And if you and I don't have to Try and make people owners because they are. So it's a different approach, and we do have a long term horizon. Quarter.

Speaker 1

And I'll tell you, we will get opportunities. And one thing you can be sure about is when the right opportunity arises, it will happen.

Speaker 5

I think that's yes, I think that point is very, very clear, at least from our perspective.

Speaker 1

Thank you. And I

Speaker 5

commend for quarter. The long term view and patience that takes. I wanted to ask you just one quick follow-up quarter on Porgera. And I appreciate that you're now sort of waiting for the mine lease to get approved. What happens after that?

Speaker 5

I mean, what are the just quickly, what are the key milestones? Do you have an export license in place? What needs to happen to get quarter, sort of back into guidance and up and running.

Speaker 1

So the big one now is SML. That's what was taken away to be done and that's the process. We will start the mine up on thermal power as the backup power. We are working with the Hella province to restart the gas power station in Hella, which quarter. That's really what makes Porger's a low cost, high production when it comes to gold project.

Speaker 1

And apart from that, we have still so we have agreed quarter. The scope of the shareholding from that the land owners get, that has to be ratified through quarter. A development forum, but it's not it doesn't hold the production up. The production the restart is all around the SML. The operator agreement, which we've got, I think, 3 points left on it.

Speaker 1

And quarter. There are a couple of the mine development agreement, is it mine development contract, I think it's called MDC. That's also a document that has to be completed. And we are now working towards quarter. We've done all the sort of review of all the mobile fleet, so that they're operational Because we can, we've cleaned out all the mud from the mine, we're continuing to do that.

Speaker 1

We have a fleet of trucks in Australia that we've that are sort of very 2nd hand, but close to new that we have kept offshore, which we'll bring onshore as we finalize the structure. And that will help with the mining, and then it's we're doing some rehab on The tankage, the CIL tankage and slowly inching our way to be operationally ready when the SML is approved and we get the fine. We're working Hand in glove with the government and the MRA, the mineral, what's the name, authority. And the other big thing is we're just over 1,000 people unemployed now, we are employing people, And that's one of the big critical parts is getting enough people in up to run it. Quarter.

Speaker 1

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, Papua New Guinea is a tough place to operate, so.

Speaker 5

Understood. All right. Thank you very much, Mark. Appreciate it.

Operator

The next question comes from Tanya Yakusnik with Scotiabank. Please go ahead.

Speaker 6

Quarter. Great. Good afternoon, everyone. Thank you for taking my questions. Mark, can you just give me an update as to what's happening with the Goldrush permit.

Speaker 6

It seems to be getting delayed quarter over quarter. So I'm just trying to understand quarter. What exactly is keeping up the delay? And then just looking at the mine tour that we did in September, quarter. I thought Nevada, that portion of Nevada gold mine production, I think Goldrush was going to be at about 100,000 ounces quarter.

Speaker 6

This year on 100 percent and moving higher to like commercial production in 2026. I thought it was about 400,000 ounces or thereabouts. Can you kind of give me an idea of A, what's happening with the obtaining this permit and B, what sort of production profile was scheduled to come in 'twenty four, 'twenty five that could potentially be impacted? Thank you. Yes.

Speaker 1

So this is the challenge of doing business in the United States. There are lots of decisions around permitting just recently. We are not impacted by that in any legal fashion, But again, the BLM have slowed the process down. What I can say is that we've got a very good constructive working relationship with them. We're back on engaged and the EIA is right at a point where it's nearly ready to go to Washington if it hasn't already got there at the moment.

Speaker 1

And so but that is delayed. And as I said in my speech, we Right now, the delay we can manage, we're still guiding around 1,000,000 ounces, 9.50 to just over 1,000,000 ounces quarter. And Goldrush is embedded in Cortez, and we manage it that way. Quarter. And we are looking at whether if this goes beyond quarter.

Speaker 1

This year, we have had some relief under our hiccup permit, which is the project exploration permit quarter. Under which we're doing trial mining at the moment. And so that's right now, we're looking at where is the critical path and quarter. How can we manage and not compromise the infrastructural development and be able to deliver on our long term quarter. And Goldrush is embedded in that plan, Tania.

Speaker 1

Quarter. As I said, we are looking at it, we'll let you know, but right now we have enough flexibility in our operations. Quarter. And I think that's, as I touched on earlier, that's the big thing that I see in Nevada that it's taken time to quarter. Put the working capital in to build the flexibility.

Speaker 1

Kibali is a 750,000 ounce producer. It's got lots of flexibility because it's embedded in the business, same with LULO. But Nevada never had that, and we are doing that. Quarter. And I think the fact that we're saying to you the rod is delayed, we're not sure exactly when.

Speaker 1

Quarter. 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.

Speaker 6

Okay. And so am I correct to think Of the 950 to 1,000,000 ounces that 100,000 of it is

Speaker 1

No, it's variable. I think Goldrush will slowly grow quarter. To your 400,000 ounces and maybe even higher as we develop it, but we're still learning about those Brettius, but right now the 1,000,000 ounce profile for Cortez is built on what we quarter. Have banked in the Gold Rush project, but we're still exploring, we're still expanding, we're still learning as we drill out the ore bodies. So you know and the nice thing about this is, Collin at 1.5 to 1.6.

Speaker 1

Quarter. Cortez, I mean, it should settle out above a 1000000 ounces, which is a big shift. You can see it's never been there. It was there a long time ago, but not recently. And then you've got 500 going to 600, maybe a little bit higher in Turquoise Ridge, quarter.

Speaker 1

And then you've got Phoenix. So and so that's what grows our profile gently over the next 2, 3 years

Speaker 6

quarter. Okay. I think I'll move off that and just I've got 2 other projects I just wanted to ask updates on, if you could, Mark, can you give us an update on what's happening at Donlin Gold quarter.

Speaker 1

So what we focused on is what we shared with you in quarter 4, actually it was quarter 3 last year after our September, annual September trip, and that is very specific work streams on revisiting and optimizing certain work streams and one is of course the water management and ensuring that we address the issue around in protecting the fish in the waterway. The second one is The trade offs that we on power because currently The plan is to bring gas from a gas field that really hasn't been developed on a gas pipeline that doesn't have a road next to it. So there's work to do on that trade off. We are doing quarter. A series of metallurgical tests and trade offs on the flow sheet because it's a double refractory ore quarter.

Speaker 1

And whether we can improve the recoveries and is there another way to process this also? That's part of the trade off. Quarter. We've gone back to the mining and the mine schedule as we've improved our knowledge of the ore bodies quarter. And now looking at bench heights and equipment sizing and then we can get ahead around the costs.

Speaker 1

And another one is limestone, because as you know, when you've got autoclaves, you need Limestone, and there's always been talk of calcium carbonate rocks in the area, but we need to just check if they are actually usable or where is the closest source of limestone. So there's a couple of these things that could materially change the project. We have also worked Native Alaskans and both the people who own the surface rights and the mineral rights, but also The whole of all the native Alaskans will benefit from this project. So that's where we are. Quarter.

Speaker 1

We are working towards the next review workshop in September again, and after that, we'll be able to update the market. But we are just to assure you that we see this as a significant resource, quarter. And we are putting the necessary effort into it to try and get it into a reserve on Barrick's

Speaker 6

And you can get that as a reserve when, Mark, do you think?

Speaker 1

Quarter. I don't know. I'm still working on it, Tanya.

Speaker 6

Okay. We'll wait for the update then later this year on all of those factors that you're looking at. And if I could just ask, you mentioned high level study coming at the end of the year on Can you just remind me what's happening there? I sort of

Speaker 1

So we were instructed to Basically, the project that was originally conceptualized and designed had a lot of Issues, critical issues, the way it was designed, etcetera, and also social issues. Quarter. And when I assumed the role here in Barrick, we went to the government and we said, let's deal with this because we were lining up for a fight. And so we agreed to go down and put those, that permit to bed, Just the construction permit. So a lot of the stuff like trenches that put the water or exposed the water, Some of the stockpiles that were being blown all over the place, and there was a whole lot of other infrastructure.

Speaker 1

Quarter. And so we are busy closing those. 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 shown that a substantial part of the resource has is quarter.

Speaker 1

And or agitated leach. And so we can do that, we can change the circuit quarter. So that's what we've been looking at, and we want to take it to a point where we can demonstrate a viable potentially viable project, which we can then take back to the governments of the Chile and Argentina and point out the opportunity and then work to get a permitting process going to be able to drill out the model and take it from there. That's where we're going. Quarter.

Speaker 1

And I think it's our responsibility to do that to ensure that those countries understand there's value in this, both infrastructure and the resource.

Operator

The next question comes from Martin Pradier with Veritas Investment Research. Please go ahead.

Speaker 7

Thanks for taking my question. I want to know when I look at cost increases that you have this quarter, there was 16% year over year on gold quarter. And over 40% on copper. So what gives you the confidence? What are the 2, 3 things that give you confidence

Speaker 1

quarter. So, Martin, it's all in the production, quarter. As you know, so we had a soft quarter, so the costs were up because the quarter. Production was down and on a unit basis that drives all in sustaining costs. With the pickup, as I pointed out, If you got 45% of this sort of 4,400,000 ounce, middle of guidance, And then you're going to increase your production by to 55% of that.

Speaker 1

It drives costs, And that's really the biggest driver. You want to add to that, Graham?

Speaker 3

No, that's spot on. I mean, if you look at the Delta in production from Q4 to Q1, you were down about 15% and costs were up 15%, so there's a very strong correlation there.

Speaker 1

You get that, Martin?

Speaker 7

Yes. If you look at the volumes, we're down 9% compared to Q1 last year.

Speaker 3

Quarter. So you can't really look at Q1 last year because that was Pre the inflationary pressure that we were experiencing post the Ukraine crisis. So if you remember, Yes. Last year, we started the year with a $65 oil price assumption. 2022 was landed up being close to quarter.

Speaker 3

Dollars of actual oil price and that drove significant inflation through the business quarter. Last year, this year, when we look at our assumptions for some of those key inputs, we're using assumptions that are based on prices that are very similar to what we quarter. So really, Q1 of last year isn't a relevant comparison quarter.

Speaker 7

Okay. But you would say that this is in line with what you're expecting to cost the Q1? It was higher than expected.

Speaker 3

Yes. So it's in line because as we indicated at the start of the year, quarter. We expected this Q1 to be the weakest quarter, and so we expected cost to be highest in this Q1. And then as the production steps up, we expect quarter. The costs to come down.

Speaker 3

And as we've reiterated, we expect to meet both our production and cost guidance metrics for the year.

Speaker 7

Great. Thank you very much.

Speaker 1

Thank you.

Operator

The next question comes from Mike Parkin with National Bank Financial. Please go ahead.

Speaker 5

Hi, guys. Thanks for taking my questions. Most of them have been asked 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. Quarter.

Speaker 5

In terms of the more general labor force, how are you tracking relative to filling job openings and just any kind of quarter. Overall commentary around the Nevada Gold Mines employment scenario. Is it still a bit challenging like it is in some of the other areas of the world? Are you finding

Speaker 1

quarter. So I mean, we made, as you know, A while back, made a strategic decision to not continue to change to chase ever decreasing, ever aging traditional mining skill pool and to go and invest in younger engineers and skills. Quarter. 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 the experience that is needed to go into the workforce.

Speaker 1

And part of that is, I think we had they're in 50 job fairs or job engagements. What do you call them?

Speaker 5

We had over 110.

Speaker 1

110. This last year or this last quarter? Quarter, yes. We had 50 job fairs this last quarter, and it's interesting, nearly 50 quarter. At the same time, we've enhanced our Compass program for Like geologists and mineral resource managers and planners and that sort of thing, we now have 3 mining Schools or mining training centers.

Speaker 1

We train for underground, we train for open pit And we training process. So because United States doesn't have a trade type mentality, you don't quarter. So a lot of our skilled people come from the army or have just learned sort of a diesel mechanic skill, but they don't actually they're not trained. And so when we bring in those people, quarter. We can train them, and it's also part of our initiative to standardize all standard operating procedures across the Nevada business.

Speaker 1

And I was there just 10 days ago. I spent just over a week there, And we visited these schools. And the other thing that struck me for the first time, you're getting 30 5 year old, 40 year old new recruits coming back to work. They're from another industry. So the first signs we're seeing of a tightening labor market.

Speaker 1

Those are different to the people we're actually targeting, which is the young skills. Quarter. And again, we've gone all engineers, all financial people. We don't try and go to a mining school because You get a good civil engineer and we've been extremely successful in attracting young people. I think we've employed about 100 young graduates per month the last 3 months.

Speaker 1

So just in Nevada. So And again, the way we've slowly changed our Organogram within Nevada. We are now refreshing our planned headcount. Because so I can tell you that the turnover has reduced materially, like I want to say 20%. Yes.

Speaker 1

And also now we're saying, okay, we've been operating at plan 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 4 o'clock in the morning to 8 o'clock at night. We're looking at multiple people for one job, particularly on the driving side. We're looking at being innovative because and it's driven by our commitment to be Nevada and focused as far as employment goes. And again, our percentage Nevadans in our workforce are significantly up and I would just and so is our local purchase. I mean 80% of all our purchases are now Nevada based.

Speaker 1

Quarter. When I first arrived there, there was like 20. So a lot of effort in that. I'm not answering it in real numbers, but quarter. As we progress this, but we've certainly got all the arrows pointing in the right directions.

Speaker 1

Quarter. And one thing I can tell you is that people that say that young 22 year olds to 26 year olds Haven't got ambition is untrue. And we've got and there's a lot I mean, we've just employed some of the top students out of the British Columbian Universities for Nevada, because we went and got them. So we are seeing and we're excited about that potential because that also will change the way we Mining, civil engineer or electrical engineer and ask him to do young graduate in any one of the engineering fields and they've it's part of their course. They're good at it.

Speaker 1

So quarter. That's where this world is going and just accessing the data points on a big 300 tonne truck, we've been able to improve our quarter. And it's not just about being AI savvy. You got to have the full engineering skill to be able to apply it in our industry anyway.

Speaker 5

Thanks very much, Mark. Appreciate that added color.

Operator

Call.

Speaker 1

Right. Thank you very much, everyone. Great seeing you again and we'll be catching up with some of you during the next quarter. And again, I'd just say, the team is always available. We are going to see some of you down in Dominican Republic, I believe.

Speaker 1

So we look forward to that. And again, if you've got any questions, quarter. We haven't had given you time to ask the teams around and we're all on the end of our phones. So thank you very much again.

Operator

Call. This concludes today's event. Should you have additional questions, please contact the Barrick Investor Relations department. Call. You may now disconnect your lines.

Operator

Thank you for participating and have a pleasant day.

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Earnings Conference Call
Barrick Gold Q1 2023
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