NU Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 1, 2024

There are 13 speakers on the call.

Operator

Operator. Welcome to Barrick's Results Presentation for the Q1 of 2024. Following today's presentation, a question and answer session will be conducted. As a reminder, this event is being recorded and a replay will be available on Barrick's website later today, May 1, 2024. I would now like to turn you over to Mark Bristow, President and CEO of Barrick.

Operator

Please go ahead, sir.

Speaker 1

Thank you very much. And just before we start, let's just check the sound because there's a feedback on it. How are we doing? Are you sure? Can somebody confirm that?

Speaker 1

Okay. So with that, very good morning and good afternoon, ladies and gentlemen, and particularly for those who've made an effort to come out and join us in person. Thank you very much for coming out. I thought I'd start today looking across the world where we've witnessed change accelerating, uncertainty becoming more permanent and chaotic events a lot more common. And the global pursuit of renewable energy has boosted the demand for copper and with it, the price up 15% in the Q1 of this year.

Speaker 1

Unprecedented conflicts plus economic uncertainty have driven the gold price up 15% last year and by the same margin so far this year to record heights, confirming once again the metal status as the ultimate safe haven asset. Disappointingly, Barrick's share price, like those of its peers, is lagging the gold price, which raises the question, if you believe in gold, why not invest in the producers? The investment thesis, as far as Barrick is concerned, is that our embedded ability to grow our copper and gold production will amplify our profitability in a rising commodity market, as I'll show you in the course of this presentation. As this presentation will include some forward looking statements, I draw your attention to the customary cautionary statement, which can also be found on our website. Barrick, currently directly and indirectly, employs more than 50,000 people across our operations, and their health and safety are our primary concern, which is why I start the presentation with a report on our past quarter's performance on this front.

Speaker 1

Tragically, our African mines had 2 fatalities in January as we announced at the time of our quarter 4 results. This has intensified our ready laser focus on eliminating fatalities as critical component of our journey to 0 and a carefully considered fatal risk management program has been rolled out worldwide. This has been receiving an enormous amount of focus over the past 18 months, and we as an executive team are determined to achieve our goal of 0 fatalities in our operations. On a more positive note, our various injury frequency rates continued to decrease significantly against the same period last year. And this last quarter, 10 of our sites were lost time injury free.

Speaker 1

The Latin America and Asia Pacific region has had a particularly good run and safety record, having just completed 14 consecutive months with no lost time injuries. Closely allied to health and safety is our complete commitment to sustainability in its broadest sense. Sustainability was the DNA of our business long before what is now called ESG. It's long before that ESG became an investment metric. Our distinct holistic approach, grounded on the concepts of partnership and stakeholder recognition, has earned us our critically important social license wherever we operate.

Speaker 1

Some of the past quarters' achievements are listed here, and we'll give you a flavor of the tangible results we are achieving. You will find a comprehensive account of our performance and targets in our annual sustainability report scheduled for publication later this month. I urge you to look it up on our website. We turn now to the overall highlights of the past quarter. As guided, it was a similar start to the year as last year.

Speaker 1

Gold production was in line with plan but down on the previous quarter, as I'll explain in the next slide. We remain on track to meet our full year guidance. Copper production was also in line with last year and like gold

Speaker 2

is forecast

Speaker 1

to grow through the year. I will also deal with the improved financial results compared to this time last year a little later. Success saw Brownfields exploration, the very engine that drives Barrick's unparalleled ability to replace its mined reserves continue to deliver. And the greenfields programs are expanding our portfolio and opportunities around the globe. These are the operating results.

Speaker 1

As anticipated, seasonal maintenance, the most important being Pablo Viejo conveyor rebuild and mine plan sequencing resulted in lower gold production, which in turn increased our cost per ounce. The commissioning of PV's replacement conveyor is now complete, And the resumption of mining and processing at Porgera will also support the gold production ramp up we have planned for the rest of the year. The lower production, offset by higher gold price and supported improved and supported improved financial results when compared with the same period last year. Year on year net earnings per share increased by 143% for the quarter, while adjusted net earnings per share grew by 36%. At $0.19 per share, we were ahead of consensus for the quarter.

Speaker 1

The attributable EBITDA margin rose by 5% to 41%, and the operating cash flows remained strong at £760,000,000 The quarter dividend was maintained at £0.10 per share, 0.10 dollars per share and it's worth noting that at a time when both the gold and copper sectors are ex growth, Barrick's strong balance sheet supports its organic growth projects, enabling it to project a significant rising production profile for the next 5 years and beyond. We start the operational review in North America as usual with the ramp up of the Goldrush underground mine now well underway at Nevada Gold Mines. Our focus has also shifted to the nearby Barrick owned advanced Fourmile target with its world class potential. The successful permitting of Goldrush will accelerate Fourmile's progress up the value curve, and a significant evaluation drill program has commenced this month, testing the large inventory base and growing the mineral resources to inform a pre feasibility study decision expected by the end of this year. In other news from Nevada, the continued greening of Barrick's global grid advanced with the commissioning of the first 100 megawatts of the TS Solar Power Plants, which is expected to have the second 100 megawatt phase commissioned in the Q2 of this year.

Speaker 1

As guided, Nevada Gold Mines made a softer start to the year. Cortez came in ahead of plan, in fact, significantly ahead of plan. Carlin was on track on a run rate through for the whole year and Turquoise Ridge is expecting a significant improvement as it addresses its backfill and development backlog following a planned shutdown in the quarter. For a supposedly mature gold district, Nevada remains a highly prospective Tier 1 terrain for our exploration team. The many substantial brownfields targets shown on this map will support its 5 year reserve replacement program, and the team is advancing a pipeline of exciting greenfields targets.

Speaker 1

Meanwhile, continued work on our ore body models have highlighted some significant untested potential. I've spoken to you about the greater legal before, but another example of this work is shown in these before and after cross sections of the Turquoise Ridge deposit, demonstrating how the updating of geological models can drive growth. It's early days, but this process of remodeling has generated some exciting new targets as highlighted in those red circles on the right hand section. I anticipate that these will result in substantial additions to the already high grade Turquoise Ridge endowment. We move now down to the Latin America and Asia Pacific region, which had a very good quarter all around.

Speaker 1

Highlights included the progress at Puebla Viejo, which I've already referred to, another strong performance from Veladero and the restart of operations at Porgera. Ricordec's feasibility study is on track for completion by year end with first production scheduled in 2028. Pablo Viejo processed lower grades while its new conveyor was being rebuilt, and this impacted production for the quarter, which also affected costs. The replacement conveyor has now been commissioned, and the plant is expected to ramp up during the Q2. As production increases, we expect costs to come down.

Speaker 1

With the plant expansion now substantially complete, the focus has shifted to the related new tailings storage facility where work is progressing as planned, and the feasibility study is expected to be completed in quarter 3. I referred to the Puebla Viejo expansion earlier as our flagship organic growth project, and this is why. It will increase and sustain gold production atorabove800,000 ounces for at least 20 years. It's worth remembering that Pablo Viejo was on the verge of closure 5 years ago when the new Barrick team figured out how to unlock its vast reserve and secure its long term future as a Tier 1 gold mine. Shown here is a graphic illustrating the impact equipment failures had on the project last year and more importantly, where we're headed now with the new structure having been rebuilt and commissioned.

Speaker 1

In Africa and the Middle East, Loulogonkoto produced its usual steady Tier 1 performance. The feasibility for the La Mana Super pit expansion remains on track for completion by the end of the year. And the infrastructure for mining, the Jabal Said copper mines load 1 was completed, continuing transition to renewable energy at Loula Gounkoto and Kibali also delivered significant savings. Loulogonkoto increased production and kept costs tightly controlled. Its 2nd solar plant was commissioned during the quarter, replacing heavy fuel oil with solar power as an energy source, delivering a cost saving of some $6,000,000 just this last quarter.

Speaker 1

While on Mali, we are aware of press speculation originally reported in Africa last year and recently picked up by the Canadian media about the government's so called intention to expropriate the Loulou Gounkoto complex. As we have previously disclosed, we have been in ongoing dialogue with the government of Mali on several matters that impact our operations. As part of our engagement, the government has recently confirmed to us that they do not intend to expropriate the complex. Like any government, Mali wishes to maximize their benefits from mining, and Barrick remains committed to an equitable sharing of those economic benefits with our host country, while protecting our shareholder rights. Our engagement with the government is continuing on that basis.

Speaker 1

The Loulo District remains highly prospective. Deep Framework Drilling is targeting the potential for large scale extensions on repetitions of the main high grade Yalea system. Results confirm that the system is still open with high grade mineralization present at depth, while shallower drilling to the south is returning encouraging intersections from the actual main Yalia structure. And at Kibali, production was down in line with lower grades from planned waste tripping at 2 open pits. The mine is expected to show much improved results on the back of higher grades in the second half of the year as we complete that stripping.

Speaker 1

And exploration during the quarter around Kibali further defined a significant high grade 10 trend immediately adjacent and similar to the massive KCD deposit on which Kibali was built. We are modeling numerous high grade intersections and potential load shapes, which could deliver a substantial satellite project. In Tanzania, North Mara's production was lower quarter on quarter, in line with its mine plan. Lower production meant higher costs. Bouli and Houlou's production was flat with higher tonnes processed offsetting lower grades.

Speaker 1

The lower grades with the higher tonnes were reflected in the increase in costs for the quarter, but again, we're expecting that to come down over the next three quarters. A globally significant organic copper growth project, the LaManna Copper Mine Super Pit Expansion, is on track for 1st production in 2028. The accelerated feasibility study is scheduled for completion by the end of this year, with construction works expected to start in 2025. The expansion will transform Lemoane into a major copper mine with a life of more than 30 years. A planned shutdown and lower grades reduced production in quarter 1, but again, higher grades going forward will deliver improvements through the year.

Speaker 1

Barrick also, on the back of all the rumors in the market, continues to work with SESCO to alleviate pressure on the Zambian power grid, and we do not expect any power shortages to impact production. We are in the process of finalizing a power supply agreement with SESCO, which will secure offtake from Mozambique. And in addition to this, we have implemented a cogeneration program using our diesel standby generators. This will provide alternative sources of power of some 29 megawatts, which is more than 50% of the La Moana's current demand. I've often said that exploration is to a mining company what R and D is to the pharmaceutical industry.

Speaker 1

Discovery and development are the only true drivers of value creation in the mining industry. Our teams continue their search for Tier 1 opportunities across the world's gold and copper regions, as shown on this map. In the United States, we continue to advance our Nevada portfolio, both in the joint venture as well as in Barrick's name itself. Along with developing opportunities in a number of other prospective states. In Canada, we're developing our growing portfolio of projects across the superior Kraton.

Speaker 1

And in Latin America, we're testing priority targets around Veladero, Puebla Viejo, Ecuador, Peru and more recently, Jamaica. And in Africa, I mentioned the high potential targets around Lula Goncato and Kibali earlier, and we're increasing our ground holding in many of the countries where we operate. And in Pakistan, our geologists are focused on unlocking the maximum value of the multiple known porphyries within the Rykadek project area as well as looking for new near mine discoveries. And in Saudi Arabia, we've agreed with our partner, Ma'aden, to add additional ground around Jabal Said and Umad Damar and beyond to the joint venture. As I touched on earlier, our transition to clean energy is making steady progress and not only propels us towards our goal of a 30% reduction in greenhouse gas emissions by 2,030, but also drives efficiency and cuts costs.

Speaker 1

Another object of key importance to us is ensuring we have a minimum impact on our environment today and for future generations. Our support of the Grumman National Park and the DRC and the protection of the sage grouse population in Nevada are just two examples of our approach to biodiversity. So ladies and gentlemen, to wrap up my presentation today, I thought it was worth recapping all the reasons why Barrick represents a standout investment opportunity. How you can see there are many great reasons which differentiate us from our peers, including our unrivaled reserve replacement track record, high quality asset portfolio and industry leading balance sheet, which will ensure we can afford our future growth and deliver more value to our shareholders. Today, we are the most undervalued major gold and copper mining company in the industry.

Speaker 1

But as we deliver on our operational plans and growth projects, I have no doubt that will change. Included in our portfolio is a copper business, which is already a significant contributor and positioned to grow. We have all seen the excitement around the latest BHP bid for Anglo American, and it's clear that the driver of this bid is Anglo's significant copper portfolio. You might be interested to know that when we have finished the Lemana expansion and the Reykjadek project construction, our copper production will be on a par with Anglo's copper portfolio today. That's certainly not valued in our stock currently.

Speaker 1

On that note, I will end my presentation, and we would be happy to take questions starting here in Toronto with the audience and before going to those connected through the

Speaker 3

webcast.

Speaker 4

Thank you very much for the presentation. Mark Lawson Winder from Bank of America Securities. I wanted to ask 2 questions. So first would be just about the commentary on the 2024 outlook and around the royalty. I just wanted to understand if you guys are concerned at meeting that cash cost guidance in the event that gold price averages above $2,100 per ounce?

Speaker 1

So I mean, Lawson, it's all in the models and the plans going forward. And as I said to you, if you look at I'll just take I'll step you through it. So Novartis at a place now where we are absolutely clear about our cost and our production challenges and opportunities. And I've been really working on flattening that structure and getting ownership at the mine site for those that have visited to our mines recently. And the big driver, if you look at it in Carlin is slightly softer as per the overall grade that we're forecasting for this year, a slightly softer quarter on Carlin because of the grade, but a bigger throughput.

Speaker 1

So we managed to get our coal production, but the grade starts lifting up. And so we have an opportunity to drive down the costs. And so that's a big driver. There are 2 big drivers in Nevada, that one and Turquoise Ridge. And Turquoise Ridge is all about backfill and making sure that the infrastructure to support our backfill because Turquoise Ridge is a high grade mine, low cost, but it's geotech is challenging.

Speaker 1

So you've got to manage the extraction with backfill. And we needed to really put some more redundancy into our backfill infrastructure to make sure we can meet our plans. And that's what we did. At the same time, we went down for a big planned maintenance on the Sage Mill. And so those two drivers are the ones that catch us up on the guidance and bring the cost down because they are the Turquoise Ridge is more tons higher grade and so is Carlin for different reasons.

Speaker 1

And that's helped as you know, that's the best way to deal with cost on a cost per ounce base. I would point out that the team has been really focused. As you know, I've always really been focused on and that is the unit cost per tonne. So we're much more comfortable that we're on top of that game on our unit cost per ton in Nevada, which is really the thing that ultimately drives the overall cost per ounce. In Latin America and Asia Pacific, the key is Valadero.

Speaker 1

And again, we've now we would have made our guidance last year if Veladero had got the ramp up right, but we had the conveyor belt infrastructure collapse sorry, PV. Thank you for that. So we would have made our guidance if we had got PV right, but we had that collapse right in the Q4. And what I said last time we spoke is that's an engineering challenge, which we've actually addressed now. We've rebuilt it, commissioned it.

Speaker 1

It's now so now we're ramping up the tons, which you saw. And with that comes the fine tuning of the flotation circuit. And we need the full throughput to be able to get that flotation circuit finely tuned. That is the that's really the driver of the overall cost because it picks up the recovery, the grades there. It's not a high grade mine, but the concentration the flotation concentrates the grade.

Speaker 1

And PV is a low cost producer naturally. So because a lot of the feed we're using is stockpiled already, it's already mined. So that's the other driver. And then the final driver was Kibali. And again, that's a mine plan driven process.

Speaker 1

If you look at the run rates and the other mines, we're in good shape. But Kibali, we had to do those pushbacks on the 2 pits because Kibali is it's always relied on the flexibility that the open pits give to utilize the excess throughput capacity in the plant, and we needed to get those pits open. And so that impacted the production for quarter 1. And quarter 2, there's a big lift in both grade and throughput. And so and then we're at the run rate on the production profile.

Speaker 1

Loulo's is going to be more of the same for the next three quarters. The other one is North Mara. Again, we've introduced open pits into North Mora, as you know. We spoke about it last year a couple of times. We've got the underground now working and it's about optimizing that.

Speaker 1

And again, there was some scheduled work to be done in North Mara, which impacted on and we again, we'll see a small pickup in grade this quarter 2 and then quite a big pickup in grade going out on the back half of this year. And really that's so you hear me articulating the profile. And so whereas in the beginning of last year, we were we had a catch up, whereas this year, we're on plan. And it's very clear to us. Of course, the one thing that's good about where we are is that we've been diligently working to get that, what's the right word, inflection point on the production.

Speaker 1

And it was going to be last year. But with the PV hesitation, we pushed that into this year. But we're really at that stage. So we've got to and I always say to the team, the difference between a good and great company is a great company can leave good luck. So when you look at the expanding margins with a higher gold price, we've got that to help us and we've got the costs coming down.

Speaker 1

And so we're in a reasonable position going forward to expand our margin, which is what we work for every day. To answer your question.

Speaker 4

That was perfect. And it was hard not to notice in your presentation slides a major focus on some of the exploration success and the huge amount of exploration targets that you guys have. I mean, it is a great part of the story. Maybe this is a little early in the year to be asking, but I'll try anyway. But what are your thoughts on reserve replacement this year in gold?

Speaker 1

So I think for the first time, Nevada is going to get close, if not achieve it, Simon? So in Nevada, we've got to a 5 year plan now, so which is a big step forward. And we've got some very exciting stuff. And we've got stuff that's still working. The extensions to the Greater Levo is real.

Speaker 1

This and that's not all in baked into our plans. The new modeling that we've done in Turquoise Ridge, if that is a duplication on those folds below the main horizon, which is in the reserves, that's an exciting development. We haven't quantified it yet, but it's significant. Do you want to add anything else, Simon? Just speak up.

Speaker 5

Pakistan will also bring a substantial contribution.

Speaker 1

Okay. Yes. So that I'll do that. So and once we finish the feasibility in Pakistan, it's like 15,000,000 ounces of gold, how much? 13,000,000.

Speaker 1

13,000,000 ounces of gold and a whole bundle of copper. So we really show a big step up in our reserves going forward. And I think Loulo, Kibali, they are the same, just adding the answers they might.

Speaker 6

Marcus, it's Greg Barnes from TD. A couple of questions. 1, PV. Got the ramp up slide in terms of tonnes throughput. I think that's what it is without my glasses.

Speaker 6

In terms of grade, well, I mean, in terms of recovery, when do you think you get that optimized? Is that through the course of the year? And by 2025, you're at full run rates there, both on throughput and grade and recovery?

Speaker 1

So the grade in PV is around 2.4, plus or minus a gram and a half, either side. And we blend the ore out of the pit with the stockpiles. That's what we're doing. And we concentrate that into the autoclaves. So we and one of the things that we did in the ramp up last year is that just to remind you, we had we built this new flow sheet and what it did is it added fuel to the autoclaves.

Speaker 1

So we put the autoclaves into a higher temperature regime. And so we added a technology, a flash cooling vessel effectively, a flash point, so we could flash off the heat when it got hot. But with the stumbling last year, we had to go back to run of mine feed on the autoclave. So we ended up having in 2 of our autoclaves having the ability to do both. So to take run of mine feed and to take the higher concentrate, high sulfur feed, which is much more efficient because it's at a higher temperature.

Speaker 1

So we've got a much more flexible flow sheet. We are now at that stage, to your point, Greg, running up the throughput. We need that throughput to get to the sort of nameplate to be able to optimize the float circuit. We are getting the float up already, then that's the recovery. And we've had pretty much every expert operational and metallurgical from the Barrick Group and some outside help just to manage that reagent suite because that's the trick.

Speaker 1

We've done all the test work. We test all the time. We're comfortable with the targets. We've just got to settle the throughput run rate. And that's what you see in the slide is that during that buildup, there's still a little bit of dynamic in the feed, but we are getting there.

Speaker 6

So the second question is around Mali. How far apart are you? Because I know the government has approached you with new demands. Is this a wide gap? Or is it something you think you can resolve very quickly?

Speaker 6

Or is this going to be a situation that drags on for some time?

Speaker 1

So I think it's I've spent a lot of time there, and Sebastian Bach, who runs Africa, Middle East, has spent more. So we spent a lot of time engaging. And what happened was like any sort of revolution inverted commas because it was effectively a very uncomfortable situation between the population and the civilian government, which was less than sort of efficient, just to say it politely. And so it drove this change as we've seen before in Mali. And so immediately, the transitional government, which was formed headed by the Junta, was looking for ways to get more out of the mining industry because that's their only lever to pull.

Speaker 1

So they did an audit, which again we supported. We're never shy of supporting orders. But the objective of that audit initially was to try and find fault rather than look for opportunities to build a better industry, which is what we all agreed we would do, including the people in authority. Anyway, it took them a long time to release that report, which we have now. So we've been able to respond to it and sit down with the Ministry of Finance at this stage.

Speaker 1

And more recently, there's a Minister of Mines that is engaging with us. So that's where we are with the engagement. And we have just to try and explain, Mali's government organs are largely intact. And then you've got the Junta with a sort of executive that they've appointed over arching the normal organs of government. And Mali is quite a bureaucratic structure, a bureaucratic government.

Speaker 1

And we know all the people, and we've got to know the new people in power. And so my natural reaction is if you're coming up with claims, you should have a model, a basis on which it is raised. And so you should share it with us. And of course, we've got a model so we can put the 2 together and we can work out who's right and who's wrong or where it is and find a way forward. And as you know, I've always preferred to engage and that's I've already had that conversation.

Speaker 1

Should we be looking to find a solution together? Or should we be fighting because we can go to arbitration and get a competent authority, again, as we've done in the past in Mali. And both parties agree it's much more constructive to engage. So that's where we are. And the 2023 Mining Code, which has been approved now and we're waiting for all the regulations, specifically provides for a old order right, to coin a phrase, to accept the 2023 code when the permits come up for renewal.

Speaker 1

We haven't come up for renewal. We've got 2 different permits. They're quite far apart as far as times go. But again, like we've done in all our countries, we would prefer to debate it. And we did it with actually the civilian government beforehand and engage ahead of time.

Speaker 1

And our position is where we find good reason for us to be able to improve things like that were never in our 1991 code because the current convention is now a it's morphed from the 91 code because we've accepted changes as we go. And so that's the debate. And of course, we're dealing with people that are not particularly competent in the mining industry. So and our argument is be careful you don't compromise the benefits to Mali by taking too much and eroding the value of the ore bodies that we've defined. And it's a complicated debate.

Speaker 1

And for me to say it's going to be easy, look, we've had some very engaging conversations in Mali over the last 28 years. And that's where we are. So and but one thing I can tell you is that in the we've challenged the authority about these rumors. And they have very clearly said to us in writing that they have no intention of expropriating their assets. So that's and that's all I can tell you at the moment.

Speaker 1

But it is dynamic. It is a very stressed economy. We are dealing with the all the 5 of the G7 countries have full embassies in the country. Everyone's concerned about taking this country forward, particularly the Western Powers. And definitely the Malian authorities are clear that they want to do something that's good for Mali.

Speaker 1

They're not trying to sort of take Mali and well, that's certainly what they've told me directly. So I'm sorry I can't give you more granularity, but I'm actually, as I usually do, I'm just giving you the lie of the

Speaker 7

land. Mark, it's Jackie Preiswolski at BMO. Maybe just to dig into that a little bit more, If you could talk about the government in Mali and the stability, I'm just not familiar with the structure of juncture. Like how stable is that? And do you expect any kind of change to the structure of that government over time?

Speaker 1

Well, I think you're asking me to say something that I'm not prepared to say. So this is the 3rd military leadership the country's had. The one was very short lived. The overall intention and by its very self definition, it's defined itself as a transitional government. The intention is moving to that to reintroduce normal civilian government going forward.

Speaker 1

And as you know, there's a lot of stress in that region. We've seen Niger move to a military government, so is Guinea, where there are big investments going on in the iron ore part. So that whole region is a challenging environment. And the enemy is ISIS, the radical Muslim movement in the Sahil. So it's very complicated.

Speaker 1

And none of them are particularly endowed apart from

Speaker 7

Guinea. Sorry, I didn't mean to try and catch you on something. On another topic, can you maybe talk about Porgera and how this startup is going there just given the mine's been down for a while?

Speaker 1

The only thing I would say is going surprisingly well. So it's like a bit sometimes like running in the dark. You don't particularly know what next challenge you're going to get. But we moved to the official start up and then we engaged with the Heller province on restarting the gas powered power stations, which are on the next door province, re erecting the pylons that carry the power through to the mine. We've done all that.

Speaker 1

We've commissioned the generation facility and we're feeding the mine. So and we're ramping up. And we did a lot of pre work on ramping up. But so far, it's going well. So far, we're ahead of plan.

Speaker 7

That's great. Thank you very much.

Speaker 8

Mark, this is Ralph Profiti from 8 Capital. I'm just wondering, as you move to this feasibility study at PV coming in Q3, is a lot of that going to be sort of recalibration and retooling of the equipment that's happened over the past few months? And can you talk a little bit about some of the tailings facility management changes that have been going on and that are going to go into that study?

Speaker 1

So as far as the expansion of the processing facility, it's done. The feasibility I'm referring to is for the tailings position. We've got the permit on the back of a pre feasibility and it will be finalized with the final feasibility study. And it's all about the geotechnical test work on the wall and making sure that the design is as per required in a seismically active region as where PV is. And of course, we have the original tailings facility, which was equally well designed as a reference.

Speaker 1

In the meantime, we are we have so to achieve that pre feasibility, we did all the consultations and we've way down the road on engagement with the community on relocation. I was there just a few weeks ago. We are busy building the new towns and they are substantial towns. I mean, they are particularly impressive towns. And then we'll start the relocation.

Speaker 1

Some of the first relocations will happen this year. So we are progressing. We have no reason to believe that we will not complete the feasibility study, and we're progressing in all the engagements and the social plans and all that sort of stuff, as well as the technical investigation to confirm the final design of the actual retaining infrastructure.

Speaker 8

And then secondly, can you just talk about delivering the pre feasibility study at formal and how the Newmont negotiations, discussions and bringing that into NGM would then kind of follow on from that?

Speaker 1

So the right now with and I must say it's worth just reinforcing. I don't think people appreciate the importance of permitting Goldrush. And I mean, the team did an excellent job. When you think of we started the process in 2018 and we completed it in 2023 effectively. So it's a particularly good piece of work.

Speaker 1

All the consultation, everything, as you know, it's not easy to permit mining projects in the United States. And we had the support of both sides of the aisle from our senators and congress people, that's the federal senate and congress out of Nevada as well as the Nevada Governor and the legislature in Nevada. So it was an we cut the ribbon with the Governor of the state last week. So it's officially open. Fourmile is an extension of that, but a different style of mineralization in that you're moving the classic Carlin style mineralization into a metamorphosed, much more brittle rock.

Speaker 1

So you get the big bridges, which have been the heart of some of the famous super high grades in Carlin over the years. And so you get much bigger size ore bodies and at a better grade. And so under the joint venture, we are if we complete a feasibility study that proves viability, we can put it to Newmont and there's a formula. And as soon as we pass the filter on the formula, we put it, and there's a process of getting calculating a market value, so not an NPV, but a market value. And also and once that is done, Newmont are obliged to either buy their share in cash and reimburse us on all the costs that it's taken us to get there or dilute, that's the option.

Speaker 1

And again, as you know me, I've always been one that engages because this is a really a real asset. We have a good relationship with Newmont in Nevada. We've worked well together as a partnership. And so we haven't we are open with the conversation and the progress with our partners. We haven't agreed sorry, I'm out of the so we haven't agreed on a specific way forward.

Speaker 1

But we have agreed that we will have at the appropriate time, a conversation to investigate options because it's in everyone's interest to do that. So that's and Newmont has some excluded ground as well under the because remember, this was a hostile engagement. And we had agreed that we would value the deal on the basis of the market. And there were some assets like Fourmile that wasn't valued by the market and same on their side. So we've got some lower grade options that are sitting in the excluded assets.

Speaker 1

But and as you know, in the fullness of time in mining, these are real assets that come into play with a rising oil price.

Speaker 9

In terms of formal, do you have a permit or do you have to permit, start like Goldrush, all the permitting?

Speaker 1

So there will be some permitting, but Goldrush helps in that permitting because of the infrastructure. We can access the underground it's an underground mine. Can access it from a ready permitted positions. And of course, we have the under the joint venture agreement, we can also use the installed Nevada infrastructure. So and right now, we need to drill it out.

Speaker 1

So what we're doing in the moment is Simon's got us we've got a focused Barrick team looking at its infrastructure layout, drilling a number of holes from surface about a 40 $2,000,000 project for this year to be able to scope the project and get our head around what it's going to entail to get a prefeasibility study done. That's what we do.

Speaker 9

And in terms of Pueblo Viejo, besides what is there any other problem that we might have? Or is everything good to go and now it's just an issue of ramping it up?

Speaker 1

How long have you been in the body industry? Nothing is perfect. But as we stand today, I mean, we set out to put this expansion in back in 2019 when we would have closed the mine in 2021. And against all opposition or doubt, we've done that, and we're busy rolling that out. To give you an idea, up until 2020, the average contribution that Puebla Viejo made to the corporate tax of Dominican Republic was 18%.

Speaker 1

So we dipped in the last 2 years because we had to manage with stockpiles and we didn't have access to the expanded processing plant. But now that we have and we drive that cost down back above 800,000 ounces for a very long time, we go back to that very privileged or heavy contribution to the Dominican Republic. And I would add that PV is the very foundation of the power infrastructure for the whole country and a big taxpayer and a big employer. It's changed the whole province, the province in which PV is located. So it is a very big and this construction when we did the big construction expansion, what we did is we had to bring in external partners, but we also partnered those external partners with local business partners.

Speaker 1

So we really did support the economy during the whole COVID period as well. So we've built a very strong license to operate in that country.

Speaker 2

Okay.

Speaker 1

Let's go. Okay. Can we move to the telephone participants, please?

Operator

Certainly. First question comes from Daniel Major with UBS. Please go ahead.

Speaker 10

Hi, Mark. Can you hear me okay?

Speaker 1

Yes, perfectly. Thanks, Danny.

Speaker 10

Hey, thanks. Yes, a couple of questions. The first one and slightly higher level one, obviously, M and A topic in the sector at the moment. And one of the discussions around valuation comes around complexity of portfolios, lots of assets, lots of minority interests, good gold price environment. Are you looking at the portfolio and thinking of any assets you could use to streamline and recycle that capital into your expansion projects?

Speaker 1

So we have a couple that you could argue are non core. Tongan is 1. The others are strategic in the form of Hemlo, and we've put a lot of effort into repositioning Hemlo, and you'll see that. And right now, it's an important component of our business because it's our only asset in Canada. And whilst we are investing heavily in Canada, we don't think it's wise for us to have to step away from Canada.

Speaker 1

We want to grow our Canadian footprint profitably. The Veladero asset is managed by Antofagasta, but again I mean, sorry, the Zaldivar asset is managed by Antivagasta. And again, the copper price is important. Our copper strategy is important. So at this stage, that's where we are.

Speaker 1

And we've got some work in progress in Chile, which we're quite excited about. And that's it. The rest are Tier 1 assets fitting snugly into our strategy. So we will at the appropriate time as we've demonstrated, but I think the key that I would answer you with is at the time of our transactions, the joint venture between the consolidation of Barrick and Randgold is one company. We sold the non core assets.

Speaker 1

When we looked at additional opportunities and the Nevada joint venture, we dealt with the challenging assets in the form of Long Canyon and the things that were disappointing as part of the consolidation of those joint ventures. And so we don't some people are still dragging assets with them after big premium transactions. We don't have that problem. So Dan, I can't see that's my answer. Right now, we've got really fantastic world class assets, as I said in my presentation.

Speaker 1

A reference point is just look at what BHP has suggested they could pay for Anglo American's copper assets, arguably there's a bit of other stuff with it, but it's still a big tag and we've got it organically. So that's our focus. And we've got our growth sets in Nevada and surrounds the rest of our portfolio, particularly PV. And then it's the exploration group that's starting to present significant footholds in the major gold copper regions of the world. And we believe that's the future of Barrick right now.

Speaker 10

Great, thanks. And then just one other, if I may. We've it looks like in Reykjavik, there's a deal approaching on the other side of the 50%. Does that impact your funding and kind of how you're looking at financing the project?

Speaker 1

No, not at all.

Operator

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

Speaker 3

Great. Good morning. Thank you so much for taking my questions. Mark, can I just ask about the elections in the Dominican Republic, given everything at the high gold price and everything else going on in the world? How are those going?

Speaker 3

Are there anything we should know about with respect to changes in royalties, taxation, anything else that would impact Pueblo Viejo?

Speaker 1

So every indication at the moment is that the President, the current President will be he will have a second term. When he was elected, he wasn't expecting COVID. He did He's probably, as a leader goes, he probably managed that crisis better than any leader in any country that we have investments in. In. And he's been he's steered a very good ship.

Speaker 1

He's dealt with some of the challenges and he's had the next door neighbor challenge on top of that. So that's been a challenge. But I mean, we're not expecting the opinion polls that at least indicate that he's more than likely to be the successful candidate. And if he is, we know he's shown and highlighted the importance of investment in that economy, and I don't believe there's going to be well, there's certainly not going to be any aggressive engagement with the private sector. I think there's going to be real focus to it to build it, the private sector going forward.

Speaker 3

Okay. Well, that's good to hear. If I could ask another question just on the actually, maybe Graeme would be best to answer this one. Graeme, just on the that remind me, in Chile with Pascualama, the $430,000,000 that if we don't have the mine up and running and paying by 2026, we have to pay it back. Can you remind me what you can do to push that out?

Speaker 3

And any work that you're doing on Pacwallama now and I know you're doing FDA, is that would that be work that can help push this out? Just remind me, I forget how the procedure goes there.

Speaker 11

So Tanja, there are there's really sort of 2 aspects to this. The first is, obviously, that date has previously been pushed out from its original date, so that can always be negotiated. But more importantly, actually, when we installed the electricity line from Chile across, we actually started exporting power. And that, for us, is important because it's it helps us with that VAT refund because it effectively is it meets the requirements for production in a sense. So that has actually really sort of dissipated the risk associated with that claim.

Speaker 3

Okay. That's good. And then my final question for my thoughts to understand and thank you, Mark for the details on how the assets are going to perform at the end of the for 2024. But can I assume that we have a similar division between first half and second half of last year? So that's 45% in the first half production, 55 percent in the second with a strong Q4.

Speaker 3

Is that a way I should think about your production profile?

Speaker 11

Yes, Tanya, that's a pretty good read on it. Maybe it's 46, 54 or something like that, but it's there or thereabouts. It's definitely a as we've said in our guidance, it's going to be increasing production through the year, strong finish to the year. So yes, that's a fair read.

Speaker 3

And on the copper as well?

Speaker 11

Copper is a little more second half weighted relative to the gold.

Speaker 3

Okay. And then lastly, sorry one more. Just some companies are seeing inflation pressures back in steel and cyanide. Labor seems to have widened down. Is that what you're seeing as well?

Speaker 3

I'm just trying to understand what you're seeing in parts the world you

Speaker 11

operate. Yes. That's relatively consistent. I wouldn't say we are seeing any continuing inflation. It's more a case of some of those key commodities like you mentioned the steel balls, cyanide explosives where we've been trying to wrestle those prices back down to 2021 prices.

Speaker 11

So in a lot of other areas, we are back down to 2021 prices, but there are a few of those that have remained sticky and we need to bring them down. It's not necessarily across the whole group, tends to be more regional. So North America, we have more pressure than we do in other parts of the business. And then as you say, labor is not the same pressure that there was a year or 2 ago.

Speaker 3

Okay, great. Thank you so much. I'll leave it to someone else to ask, but appreciate you taking my questions.

Speaker 1

Yes, I think just one thing on the labor in North America is, as you know, we've invested heavily in improving the skills of our workforce in Nevada, and we're starting to see those signs. And so the opportunity is to lift the it's an expensive commodity, absolutely critical asset, But and our approach is, which and the team's done exceptionally well in driving the skill base so that we can improve the efficiencies and offset the cost. And so that's been our focus over the last couple of years. Okay, next.

Operator

The next question comes from Anita Soni with CIBC World Markets. Please go ahead. Good morning, Mark and Celine. So a

Speaker 12

few questions mostly following on what Tania was asking. So firstly, Lemoana, why were the grades that were processed so much lower than what was mined? Are you pulling from stockpiles and when will that end?

Speaker 1

Just hold on. I'll let Simon answer.

Speaker 5

No, it's just a function of where we are in the pit. We're just outside the high grade shoots. And so with the stripping at the moment, we'll open up the higher grade later in the year.

Speaker 12

Yes, I guess the question was why not feed that directly to the mill. I thought the mined grades were much higher the process grade.

Speaker 1

No, I think the second just to comment, the second half of the grade, to Simon's point, because of the schedule of mining, does lift up. And remember, we are building the base for a big expansion. And so we don't want to end up sort of diving down on the ore body. We need to manage this as a long term investment. And so yes, and we'll manage that as we go, including growing some of our stockpiles.

Speaker 1

But that's what it is. It's going to be a back weighted year in Lemona particularly. And that's what drives the point that Graham pointed out is the Lemona much stronger back half of the year in the copper side of our business.

Operator

Okay. So then moving to CV, I need

Speaker 12

to give some disclosure around the about the tons that would be expected over the course of the year. Can you give a little bit of color on what kind of grades? Is it pretty steady grades at 2.3 grams or will that rise to fall over the course of the year?

Speaker 1

Yes. 2 we've got again the second half of the year and this is so the average grade for the year is about just over 2.4. So it puts it in perspective.

Speaker 12

Right. And then another very detailed question. At Turquoise Ridge, you backfill situation. Is that and how long will that take to put right? I mean it's obviously impacting the mining costs, underground mining costs and I'm reading through maybe the autoclave process costs as well.

Speaker 12

But I'm just wondering when those unit costs will start to trend down?

Speaker 1

So we expect to be back up at plan at the rolling plan at the end of quarter 3. But we're working we're now we're ahead of the plan as far as backfill goes, catching up. And we will get close, but not quite on budget by the middle of the year, but quarter 3 will take us to that point.

Speaker 12

Okay. And then lastly, a similar question on Carlin. So what can we expect in terms of sort of a grade increases over the course of the year? I think that's another one where you said your grades were low in the Q1 and will rebound over the course of the year.

Speaker 1

So grades are going to be a little lower. And so they are low in the Q1. And I'll go I'll take you to the so we're looking at a grade around 4.3 for the year. But it goes again, it's a this is a very big mine. And so next quarter will be better grades.

Speaker 1

And then I think the following quarters again good grade and then we have a back to sort of 4 grams on the quarter 4. So it's a little bit bumpy. But on average, there's 10000 to 20000 ounces different between H1 and H2. And with Carlin's a big beast, it's you try and keep it as close to the running average as you can and that's what it looks like on the profile.

Speaker 12

All right. And then last and final question. Any other mill maintenance shutdowns that we should be aware of over the course of the year?

Speaker 1

Yes, we got the big shutdown with the Gold Quarry roster in July, which is we tie in the expansion. And so post that, we will ramp up and we're forecasting this year for that back end of the year. So the last half and one quarter, we'll be up at around somewhere between 15% and 20% higher throughput in Gold Quarry Roadster depending how quickly we ramp it up. And that's a big shutdown. We're putting in we're upgrading the converter.

Speaker 1

We're doing a whole lot of extra stuff that's really been impacting our efficiencies there and we expect to bring the cost down substantially on the back of that expansion, both because we got more throughput, but more importantly, because we've actually addressed some of the challenges within the ancillary equipment in that roster.

Operator

All right. Thank you. That's it for

Speaker 12

my questions. Thanks for taking it.

Speaker 1

Thank you, Anita.

Operator

The next question comes from Josh Rails with RFI Associates. Please go ahead.

Speaker 2

Thank you. Good afternoon, Mark.

Speaker 1

Hi, Josh.

Speaker 2

Can you hear me?

Speaker 1

Yes, I can hear you perfectly. Thank you.

Speaker 2

Terrific. I was wondering if you could comment on the Donlin deposit in Alaska. I heard presentation by Thomas Kaplan talking about the very high grades there and saying it's just an amazing resource and asset. And you haven't really said much about that. And does the higher gold price accelerate that potential in your mind?

Speaker 2

And then the second quick question is you mentioned that you think Barrick is the cheapest gold most undervalued gold company in the world. And I was wondering if you could point to a metric or 2 that you look at to reach that conclusion that you could share with us?

Speaker 1

Yes, sure. So if you look at consensus on NAV multiples, we're under one time. So depending on who you follow, it's around anywhere between 0.89 and 0.93 times NAV. And of course, as the gold price goes above the consensus prices as with the copper and the copper is the real driver as well is that discount expands. So that's an easy answer.

Speaker 1

On Donland, we've always recognized it, as Tom does, a very large resource. It is refractory. So it's a carlin in a very geographically challenged area, not geopolitical, but geographical. So it's a carbon deposit at 2.4, somewhere around there grams a tonne. So infrastructure is the challenge and getting it to deliver a return that meets our investment criteria has been our focus.

Speaker 1

And we've been working hand in glove with the NOVAGOLD team, really trying to sweat every line item in the capital schedule. And your final note, of course, rising gold prices float these types of boats. So there and there will be a time when NOVAGOLD would be an investment. So that's our view. It's an inventory.

Speaker 1

It's part of our global inventory. It's a valuable asset in our inventory. And so and we've never said anything otherwise. So yes, do you want to say something, Graeme?

Speaker 11

No, you said NOVAGOLD, but you meant Donlin.

Speaker 1

I mean, Donlin. Yes, but NOVAGOLD is the other part of Donlin.

Speaker 11

Yes, absolutely. But it's yes, you were referring to Donlin. It will be developed and it

Speaker 10

will be developed.

Speaker 1

Not only developed, yes.

Speaker 11

And it is a valuable asset.

Speaker 2

Great. But not anytime soon. This is way out in the future.

Speaker 1

You try and predict the gold price. Gold price is up 15 it's up 30 nearly 30 in the last 18 months. So yes.

Speaker 2

Does it work at these levels if it stays if the gold price stays here?

Speaker 1

I think it's starting to get close, yes.

Speaker 2

Terrific. Thank you. Appreciate all your hard work and commitment.

Speaker 1

Thank

Operator

you. The next question comes from John Tumazos with John Tumazos Very Independent Research. Please go ahead.

Speaker 2

Thank you very much. In a similar vein, you have 3 or 4 potential projects in Chile and copper has rebounded along with gold as well as in Alaska as well as the Fourmile and Dorothy and other extensions at Cortez and the Nevada Gold JV. As you evaluate these projects, do you assume that industry cost will rise half as much as the gold and copper prices? Or will you estimate that 3 quarters of the incremental revenue comes home to the project? Or how do you evaluate these economics in the rising gold and copper price climate, Mark?

Speaker 1

So John, let me answer that in sort of presenting a scenario. Go back to 2020 so 2,008, 2,006 with the run up in the gold price from $4.50 it was in 2,005 to about $1,000 in $2,009 $1800 in 2011. And if you recall, very similar to the last 24 months you've seen, where the market has done some big deals on a rapidly rising gold price and paid significant premium. And that's what happened then. The difference is everyone did it because there were more majors than there are today.

Speaker 1

And then the gold price came off and there was inflation from 2,005. From the time that China joined the global economy, it drove that inflation. The oil price went up, everything went up. But the commodity prices routinely outperformed. So it wasn't like we've seen now where we had inflation without the rising gold price and a big fill up at the as we've witnessed over the last 18 months.

Speaker 1

So the question is and sure, that marginality that you can make money on the margin is a real has always traditionally been an attraction in the gold industry. But you're the expert. The problem with the mining industry has taken that margin with the gold price to keep its shareholders believing that they're adding reserves, but they haven't really. So that's a challenge for our industry. It's an equal challenge for the copper industry.

Speaker 1

And so what we have worked to position Barrick in as a contrarian to that approach, in that we've focused in on the right assets, we've invested in them and we've made sure that we've replaced the gold we've mined with the same quality reserve. And we do have that marginal flexibility because of our discipline on the $1300 gold. So if you take some of our assets, not all of them, because a lot of them are constrained geologically within the 1300 envelope. But there are some that have lower grade halos around the 1300 envelope. So we take that.

Speaker 1

When there's a high gold price, we'll take that because it comes in at a very similar margin because of the infrastructure. So if you've got a $1,000 margin and you're developing the infrastructure on a $1300 model, you can take marginal in our definition, not in anyone else's, gold on that basis and it's good business. So we do that, we've done it, we did it back in 2011. We pushed back the Loulo pit and took a whole pile of high grade, low recovery ore and it was and we could do that. So we do that.

Speaker 1

But and Donlin is a very different asset to Fourmile. Fourmile is a Tier 1 world class opportunity and it will make money in any gold price you can forecast realistically. It's a matter of banking it, which we do again diligently. We're not going to take risk on that. On the Chile side, the copper prices certainly helped on Zaldivar.

Speaker 1

The Veladero mine is I think we fixed that rather than got saved by the gold price. It's a gold mine. It's not a copper mine. Pasco Alama, we are working on a preliminary economic model for Pascua. It's also really it's a gold and silver mine, of which there's a big silver stream, as you know.

Speaker 1

But it would we don't hedge. So we would have to see we'd have to be and we set our reserve gold price based on input costs. We don't set it against the spot gold price. We'll exploit, if it makes sense, John, we'll exploit a high gold price in our mining plans, but we won't change our reserves on that basis. So that so for us, the opportunities for us are the expansion in Leeville, the whole Carlin, the expansion in Turquoise Ridge, the Goldrush ramp up, which is already there.

Speaker 1

There is an expansion opportunity more complex than Fourmile. We've got some very exciting upside in Kibali and Lula Goncato. PV is about delivering 20 years, so any further additions is life rather than profile. And it's a 800 to a 1000000 ounce producer. And then the real excitement is some of our copper plays in our new jurisdictions.

Speaker 1

And we'll as we go through this year, I'm confident we'll be able to share more with you as we grow it. We're still consolidating some of the titles in those areas. And then of course, the gold play and this our very solid relationships in Zambia and DRC offer us significant opportunities, again, which we are cautiously optimistic we're going to grow those positions. I hope that answers your question.

Speaker 2

That's great, Mark. Some of your projects have been in hand over 10 years, and they're rigorously analyzed and engineered by Barrick. If, for example, Fourmile is at the head of the pack or something else is at the head of the pack and there's other companies that don't have enough projects and are willing to pay premiums, would you let somebody pay you a premium and buy one of your projects from Newland, pay you $1,000,000,000 or more?

Speaker 1

So we would be very happy to sell somebody an asset if they're going to pay us more than we think it's worth. But our business fundamentally is mining. And as you see, if you take Loulo, we started at 1,000,000 ounces. It's now got, what, 7,000,000, Simon, €7,000,000 of reserves still today after more than 10 years of mining. So 2,005, so that's 15, 22 years of mining.

Speaker 1

So when you're in these Tier 1 jurisdictions with these big assets, they last for a long time and we're in that. Nevada is an exciting place. When you find assets in Nevada like Fourmile, they are massive assets. So we're not in this game for the short term. It's a long game and it's been good for our shareholders over time.

Speaker 1

I think if you look at the Randgold shareholders, they've done very well out of this deal. If you look at the Barrick shareholders, they've got we've still got some work to do to deliver them value those that are still in from back in 2018. And but we are building a great company with capable of delivering value. And we've paid a lot of dividends out and other capital returns to our shareholders already while we fix the business.

Operator

There are currently no more questions from the conference call.

Speaker 1

All right. Well, thank you very much, everyone. Appreciate the questions and thank you again for those who came to join us on a 1 on 1 basis. And we're, as you know, always available to take questions going forward. We look forward to talking to you again, and we are having an analyst visit into our Kibali and Tanzania mines starting on Monday.

Speaker 1

And we will be releasing presentations and that on the website. So I urge you to follow the trip virtually and we're always available to help you out if you've got any questions. Thanks again.

Operator

This concludes today's event. Should you have additional questions, please contact the Barrick Investor Relations department. You may disconnect your lines. Thank you for participating and have a pleasant day.

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