Gold.com, Inc. Q1 FY2024 Earnings Call

Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to Barrick's Results Presentation for the First Quarter of 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. Please go ahead, sir.

Thank you very much. And just before we start, let’s check the sound because there’s feedback on it. How are we doing? Can somebody confirm that? Okay. With that, very good morning and good afternoon, ladies and gentlemen, particularly to those who made the effort to join us in person. Thank you for coming out. I thought I would start today looking across the world, where we’ve witnessed change accelerating, uncertainty becoming more permanent, and chaotic events becoming a lot more common. The global pursuit of renewable energy has boosted the demand for copper and with it, the price up 15% in the first quarter of this year. Unprecedented conflicts and 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’s 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 throughout 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. Tragically, our African mines had two fatalities in January, as we announced at the time of our quarter four results. This has intensified our laser focus on eliminating fatalities as the critical component of our journey to zero, and a carefully considered fatal risk management program has been rolled out worldwide. This has received an enormous amount of focus over the past 18 months, and we as an executive team are determined to achieve our goal of zero fatalities in our operations. On a more positive note, our various injury frequency rates continued to decrease significantly against the same period last year. This last quarter, 10 of our sites were lost time injury-free. The Latin America and Asia Pacific region has had particularly good safety records, 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. Our distinct holistic approach grounded on the concepts of partnership and stakeholder recognition has earned us our critically important social licenses wherever we operate. Some of the past quarter's achievements are listed here and will give you a flavor of the tangible results we are achieving. A comprehensive account of our performance and targets will be available 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. 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, is forecast to grow through the year. I’ll also address 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. As anticipated, seasonal maintenance, the most important being the Pueblo 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 prices 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. The attributable EBITDA margin rose by 5% to 41%, and the operating cash flows remained strong at $760 million. The quarter dividend was maintained at $0.10 per share, and it’s worth noting that at a time when both the gold and copper sectors are experiencing growth, Barrick's strong balance sheet supports its organic growth projects, enabling it to project a significant rising production profile for the next five 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 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 are expected to have the second 100-megawatt phase commissioned in the second quarter of this year. As guided, Nevada Gold Mines made a softer start to the year. Cortez came in ahead of plan, significantly ahead of plan, in fact. Carlin was on track with 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 five-year reserve replacement program, and the team is advancing a pipeline of exciting greenfields targets. Meanwhile, continued work on our ore body models has highlighted some significant untested potential. I've spoken to you about the greater legal environment 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 overall. Highlights included progress at Pueblo Viejo, which I've already mentioned, a strong performance from Veladero, and the restart of operations at Porgera. Reko Diq's feasibility study is on track for completion by year-end with first production scheduled for 2028. Pueblo Viejo processed lower grades while its new conveyor was being rebuilt, which impacted production for the quarter and also affected costs. The replacement conveyor has now been commissioned and the plant is expected to ramp up during the second quarter. As production increases, we expect costs to come down. With the plant expansion now substantially complete, the focus has shifted to the related new tailing storage facility, where work is progressing as planned, and the feasibility study is expected to be completed in the third quarter. I referred to the Pueblo Viejo expansion earlier as our flagship organic growth project, and this is why. It will increase and sustain gold production at or above 800,000 ounces for at least 20 years. It's worth remembering that Pueblo Viejo was on the verge of closure five 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. In Africa and the Middle East, Loulo-Gounkoto produced its usual steady Tier 1 performance. The feasibility for the Lumwana super pit expansion remains on track for completion by the end of the year, and the infrastructure for mining the Jabal Sayid Copper Mine's Lode 1 was completed. Continuing the transition to renewable energy at Loulo-Gounkoto and Kibali also delivered significant savings. Loulo-Gounkoto increased production and kept costs tightly controlled. Its second solar plant was commissioned during the quarter, replacing heavy fuel oil with solar power as an energy source, delivering a cost saving of about $6 million just this last quarter. While in 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 Loulo-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. The Loulo district remains highly prospective. Deep framework drilling is targeting the potential for the large-scale extensions and 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 main Yalea structure. At Kibali, production was down in line with lower grades from planned waste stripping at two 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. Exploration during the quarter around Kibali further defined a significant high-grade 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. Bulyanhulu production was flat, with higher tonnes processed offsetting lower grades. The lower grades with the higher tonnes were reflected in the increase in cost 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 Lumwana Copper Mine Super Pit Expansion, is on track for first 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 Lumwana into a major copper mine with a life of more than 30 years. A planned shutdown and lower grades reduced production in the first quarter, but again, higher grades going forward will deliver improvements throughout the year. Barrick also, on the back of all the rumors in the market, continues to work with Cisco 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 Cisco, which will secure off-take from Mozambique. 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 Lumwana's current demand. I've often said that exploration is to a mining company what R&D is to the pharmaceutical industry. 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 and 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 pattern. In Latin America, we're testing priority targets around Veladero, Pueblo Viejo, Ecuador, Peru, and more recently Jamaica. In Africa, I mentioned the high-potential targets around Loulo-Gounkoto and Kibali earlier, and we're increasing our ground holding in many of the countries where we operate. In Pakistan, our geologists are focused on unlocking the maximum value of the multiple known porphyries within the Reko Diq 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 Sayid and Umm ad Damar and beyond to the joint venture. As I touched on earlier, our transition to clean energy is making steady progress, which not only propels us towards our goal of a 30% reduction in greenhouse gas emissions by 2030, but also drives efficiency and cuts costs. 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. 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. As you can see, many great reasons 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. 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 that 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 finish the Lumwana expansion and the Reko Diq project construction, our copper production will be on par with Anglo’s copper portfolio today. That’s certainly not valued in our stock currently. On that note, I will end my presentation, and we would be happy to take questions starting here in Toronto with the audience before going to those connected through the webcast.

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

Lawson, it's all in the models and the plans moving forward. As I mentioned, if you look at it, Nevada is now in a position where we have a clear understanding of our costs, production challenges, and opportunities. I've been focused on streamlining our structure and ensuring ownership at the mine site for those who have visited our mines recently. In Carlin, we are experiencing a slightly softer grade than what we forecasted for this year and had a less strong quarter, but with increased throughput. This means we were able to maintain gold production while the grade starts to improve, giving us a chance to reduce costs. That's a significant factor, alongside Turquoise Ridge, where the focus is on backfill and ensuring our infrastructure supports that, even though Turquoise Ridge is high-grade and low-cost, its geological challenges require careful management of extraction with backfill. We needed additional redundancy in our backfill infrastructure to meet our plans while also undergoing significant maintenance on the Sage Mill. These two aspects help us align with our guidance and lower costs because both Turquoise Ridge and Carlin involve processing more tons of higher-grade material for various reasons. As you know, this is the most effective approach to managing costs on a per-ounce basis. Our team has remained focused; as I've emphasized before, we need to monitor our unit cost per ton. We're feeling more confident about our unit cost per ton in Nevada, which ultimately influences the overall cost per ounce. In Latin America and Asia Pacific, Veladero is crucial. We would have met our guidance last year if Veladero had achieved a smoother ramp-up, but we faced an issue with the conveyor belt infrastructure collapse. We’ve resolved this engineering hurdle and have rebuilt and commissioned it, so we're now ramping up the tons. This is accompanied by fine-tuning the flotation circuit, which will help improve recovery, although Veladero is not a high-grade mine, the flotation process enhances the grade, and PV is naturally a low-cost producer. Much of the material we're processing is already stockpiled. Kibali is another important factor, as its performance is driven by the mine plan. We're on track with the run rates and the other mines. Adjustments had to be made on the two pits at Kibali to maintain the flexibility that open pits offer for maximizing throughput in the plant, which affected production in the first and second quarters. However, we expect a significant increase in both grade and throughput later this year, which will align us with our production goals. Loulo will continue its current trajectory for the next three quarters. Similarly, at North Mara, we've introduced open pits and improved underground operations. We've conducted some scheduled work that impacted North Mara, but we're anticipating a slight increase in grade this quarter, followed by a more substantial rise in the latter half of the year. At the beginning of last year, we were catching up; now we are on track, and it’s quite clear. One positive aspect is our consistent effort to reach an inflection point in production. This was intended for last year, but due to the PV delay, we've pushed it to this year, and we are truly at that point. I often tell the team that the difference between a good and a great company is that a great company capitalizes on favorable circumstances. With expanding margins due to the higher gold prices, we're positioned to enhance our margins, which is our daily objective and answers your question.

It was hard not to notice in your presentation slides a major focus on some of the exploration success and the huge number of exploration targets that you guys have. I mean, it’s 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?

I think for the first time Nevada is going to get close, if not achieve it, Simon. In Nevada we’ve got a five-year plan now, which is a big step forward. We’ve got some very exciting stuff. We’ve got stuff that’s still working. The extensions to the greater legal area are real, and that’s not all baked into our plans. The new modeling we've done in Turquoise Ridge, if there’s 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.

Pakistan will also bring a substantial contribution.

Okay. Yes. That I’ll do that. Once we finish the feasibility in Pakistan, it’s like 15 million ounces of gold. How much?

13.

13 million ounces of gold and a whole bundle of copper. We really show a big step up in our reserves going forward. I think Loulo, Kibali, they’re the same, just adding the answers they might.

Mark, it’s Greg Barnes from TD. A couple of questions. One on PV. You’ve got the ramp-up slide in terms of tonnes throughput; I think that’s what it is without my glasses. 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 have full run rates there both on throughput and grade and recovery?

The grade in PV is approximately 2.4 grams, give or take a gram and a half. We blend the ore from the pit with stockpiles; that’s our current approach. The ore is concentrated in the autoclaves. During last year's ramp-up, we implemented a new flow sheet that increased fuel supply to the autoclaves, allowing them to operate at higher temperatures. We also introduced a flash cooling vessel to dissipate excess heat. Due to some challenges last year, we had to revert to run-of-mine feed for the autoclave. Consequently, two of our autoclaves are now capable of handling both run-of-mine feed and higher concentrate, high sulfur feed, which is more efficient as it operates at elevated temperatures. Currently, we're focused on increasing throughput to reach nameplate capacity, which is essential for optimizing the float circuit. The flotation recovery is already progressing, and we've consulted numerous operational and metallurgical experts from Barrick and external sources to fine-tune our reagent suite, as that is critical to our success. Continuous testing has confirmed that we are on track to meet our targets; we just need to finalize our throughput run rate. The slide illustrates that while building up our processes, there are still some fluctuations in feed, but we are making progress.

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

I have spent considerable time in Mali, along with Sebastiaan Bock, who oversees operations in Africa and the Middle East. We have been actively engaging in discussions there. The situation has been challenging, arising from tensions between the population and the inefficient civilian government. This has prompted changes similar to those previously seen in Mali. The transitional government formed by the Junta is looking to extract more from the mining sector, which is their primary option. They conducted an audit, which we supported, although the initial aim seemed to be fault-finding rather than exploring ways to improve the industry, something we had all agreed upon, including the authorities. The audit report took a while to be published, but we have received it and have started discussions with the Ministry of Finance. The Minister of Mines is currently working with us. The government institutions in Mali are mostly intact, with the Junta overseeing the normal functions of government. Mali operates under a bureaucratic structure, and we have developed relationships with both old and new officials in power. My approach is that if there are claims made, there should be a model or basis for them, which should be shared with us. We also have a model that we can use for comparative analysis to determine the facts or find a way forward. I believe in constructive engagement, and my previous discussions have revolved around whether we should collaborate on solutions or engage in disputes. We know arbitration can provide a competent resolution, as we have experienced in Mali before. Both parties agree that engagement is more productive. The recently approved 2023 Mining Code allows for the acceptance of the new code during permit renewals, though we are not currently up for renewal, having two permits with different timelines. As we have done elsewhere, we would like to discuss potential improvements to the code, particularly those changes that were not included in the original 1991 code, as the current conventions have evolved over time. However, we are negotiating with individuals who may not have extensive experience in the mining industry. Our concern is to avoid jeopardizing Mali's benefits by overreaching and diminishing the value of the ore body. It’s a complex situation, and while I can't say it will be easy, we have been involved in discussions in Mali for nearly 30 years. The authorities have explicitly stated in writing that they have no intention of seizing our assets. That's the current status. The situation is fluid, and the economy is under stress. The G7 countries maintain full embassies in Mali, reflecting widespread concern for the country's development, especially among Western powers. The Malian authorities have expressed their desire to achieve positive outcomes for the country and have assured me that they are not looking to take its resources. I apologize for not providing further details, but I wanted to give you an overview of the landscape.

Hey Mark, it’s Jackie Przybylowski 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 a military juncture. How stable is that? And do you expect any kind of change to that government structure over time?

Well, I think you’re asking me to say something that I’m not prepared to say. This is the third military leadership the country has had; the previous one was very short-lived. The overall intention, by its very self-definition, is a transitional government. The aim is to move to reintroducing normal civilian government going forward. There’s a lot of stress in that region. We’ve seen Niger move to a military government. So has Guinea, where there are big investments going on in the iron ore part. The whole region is a challenging environment. The enemy is ISIS, the radical Muslim movement in the Sahel. It’s very complicated, and most of them are not particularly stable except for Guinea.

Sorry, I didn’t mean to catch you off guard. Can you maybe talk about Porgera and how this startup is going there? Just given the mine has been down for a while.

The only thing I would say is it’s going surprisingly well. It’s like running in the dark sometimes, you don’t particularly know what the next challenge is going to be. Since we moved to the official startup and engaged with Halla province on restarting the gas-powered power stations, which are in the next-door province, we’ve done all that. We’ve commissioned the generation facility, and we’re ramping up. We did a lot of pre-work on ramping up, but so far it’s going well. So far we’re ahead of plan.

Mark, this is Ralph Profiti from Eight 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? 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?

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. It’s all about the geotechnical test work on the wall and ensuring that the design is as required in a seismically active region where PV is. Of course, we have the original tailings facility, which was equally well designed as a reference. In the meantime, we have achieved that pre-feasibility; we did all the consultations, and we’re halfway through 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. They are particularly impressive. We’ll start the relocation; some of the first relocations will happen this year. We are progressing. We have no reason to believe that we will not complete the feasibility study. We are progressing in all engagements and the social plans, as well as the technical investigations to confirm the final design of the actual retaining infrastructure.

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

You know, right now I want to emphasize the significance of permitting Goldrush. The team did an excellent job, starting the process in 2018 and completing it in 2023. It really is a remarkable achievement. Permitting mining projects in the United States is quite challenging, but we received support from both political parties, our Senators and Congress members, as well as the Nevada Governor and the legislature. We officially opened the project last week with the governor. Fourmile is an extension of Goldrush with a different type of mineralization, shifting from classic Carlin-style mineralization to a more brittle, metamorphosed rock. This allows for larger breccias, which have historically yielded some extremely high grades in Carlin. We’re expecting larger ore bodies and improved grades. Under the joint venture, if we complete a feasibility study that demonstrates viability, we can present it to Newmont. There’s a process for determining market value, not just NPV. Once that's calculated, Newmont is required to either buy their share in cash, reimbursing us for our associated costs, or face dilution. I’m committed to engaging in this process, as it involves a valuable asset. We maintain a strong relationship with Newmont in Nevada, working effectively as partners. While we haven’t finalized a specific path forward, we have agreed to discuss options at the right time, as it benefits all parties involved. Newmont has some excluded ground as per the joint venture agreement. Because this was a complex engagement, we decided to value the deal based on market standards. There are assets like Fourmile that weren’t valued by the market, similarly to some of Newmont's excluded assets. We also hold lower-grade options in excluded areas. Over time, these mining assets can become significant as market conditions change.

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

There will be some permitting, but Goldrush helps in that permitting because of the infrastructure. We can access it from already permitted positions. Of course, we have the under the joint venture agreement, we can also use the installed Nevada infrastructure. We need to drill it out. So at the moment, 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 $42 million project for this year to scope the project and understand what it will entail to get a pre-feasibility study done.

And in terms of Pueblo Viejo, 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?

How long have you been in the mining industry? Nothing is perfect. But as we stand today, we set out to put this expansion in back in 2019 when we would have closed the mine in 2021. Against all opposition or doubt, we’ve done that, and we’re busy rolling that out. Give you an idea, up until 2020, Pueblo Viejo’s average contribution to the corporate tax of the Dominican Republic was 18%. We dipped in the last two years because we had to manage with stockpiles, and we didn’t have access to the expanded processing plot. Now that we have it for a very long time, we go back to that privileged or heavy contribution to the Dominican Republic. I would add that PV is the foundation of the power infrastructure for the whole country and a big taxpayer; it’s changed the whole province in which PV is located.

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

A couple of questions. The first one is slightly higher level; obviously, M&A is a hot topic in the sector at the moment. 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?

We have a couple that you could argue are non-core. Tongan is one. 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. Right now, it’s an important component of our business because it’s the only asset we have in Canada, and while we are investing heavily in Canada, we don't think it’s wise to step away from Canada. We want to grow our Canadian footprint profitably. The Veladero asset is managed by Antofagasta, but again, the copper price is important. Our copper strategy is important. At this stage that’s where we are. We’ve got some work in progress in Chile that we’re quite excited about. The rest are Tier 1 assets fitting snugly into our strategy. We will at the appropriate time, as we've demonstrated, but I think the key I would answer you with is, at the time of our transactions, the joint venture, the consolidation of Barrick and Randgold as one company, we sold non-core assets. We looked at additional opportunities in 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. We don’t have that problem; we have really fantastic world-class assets as I said in my presentation. A reference point, just look at what BHP suggested they could pay for Anglo American’s copper assets. 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. We’ve got our growth in Nevada and surrounds, particularly PV, and then it's the exploration group that's starting to present significant footholds in the major gold and copper regions of the world. We believe that’s the future of Barrick right now.

And then just one other, if I may. It looks like in Reko Diq there’s a deal approaching on the other side of the 50%. Does that impact your funding and how you're looking at financing the project?

No, not at all.

The next question comes from Tanya Jakusconek with Scotiabank.

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

Every indication at the moment is that the current President will be granted a second term. When he was elected, he wasn't expecting COVID. As a leader goes, he managed that crisis better than any leader in any country where we have investments. He’s steered a very good ship, dealt with some challenges, and he’s had the next-door neighbor challenges on top of that. That’s been a challenge, but we’re not expecting the opinion polls to indicate that he’s more than likely to be the successful candidate. If he is, he’s shown and highlighted the importance of investment in that economy, and I don’t believe there will be — well there’s certainly not going to be any aggressive engagement with the private sector. I think there’s going to be a real focus to build the private sector going forward.

If I could ask another question just from the actually maybe Graham would be best to answer this one. Graham, just on that remind me in Chile with Pascua-Lama, the 430 million if we don’t have that 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? Any work that you're doing on Pascua-Lama now?

Tanya, this has two aspects. The first is that date has previously been pushed out from its original date, so that can always be negotiated. More importantly, actually, when we installed the electricity line from Chile across, we started exporting power. That is important because it helps us with that VAT refund because it effectively meets the requirements for production in a sense. That has dissipated the risk associated with that claim.

My final question for my thoughts to understand and thank you, Mark for the details on how the assets are going to perform for 2024. Can I assume that we have a similar division between first half and second half of last year so that 45% from the first half production and 55% from second with a strong Q4? Is that a way I should think about your production profile?

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 going to be increasing production through the year, with a strong finish to the year. Yes, that’s a fair read.

Copper as well?

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

And then lastly, sorry one more. Just some companies are seeing inflation pressures come back and steel and cyanide, labor seems to have widened down. Is that what you're seeing as well? I’m just trying to understand what you’re seeing in parts of the world you operate?

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. 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 across the whole group; it tends to be more regional. In North America, we have more pressure than we do in other parts of the business. Labor is not the same pressure that there was a year or two ago.

Thank you so much. I’ll leave it to someone else to ask but appreciate you taking my question.

I think just one thing on the labor in North America is that, as you know, we’ve invested heavily in improving the skills of our workforce in Nevada, and we’re starting to see those signs. The opportunity is to lift it; it’s an expensive commodity that’s absolutely critical for our assets, and the team’s done exceptionally well in driving the skill base so we can improve the efficiencies and offset the costs. That’s been our focus over the last couple of years.

The next question comes from Anita Soni with CIBC World Markets.

So a few questions mostly following up on what Tanya was asking. Firstly, Lumwana, why did the grades that were processed so much lower than what was mined? Are you pulling from stockpiles, and when will that end?

I’ll let Simon answer.

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.

Yes, I guess the question was why not feed that directly for the mill? I thought the mine grades were much higher than the processed grid grade.

I think the second just to comment on the second half of the grade; to Simon’s point, because of the schedule of mining does lift up. Remember, we are building the base for a big expansion, and so we don’t want to end up diving down on the ore body. We need to manage this as a long-term investment. We’ll manage that as we go, including growing some of our stockpiles. But that’s what it is. It’s going to be a back-weighted year in Lumwana particularly, and that’s what drives the point that Graham pointed out is the Lumwana side is going to be much stronger back half of the year in the copper aspect of our business.

Moving to PV, I need to get some disclosure around the tonnes 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 or fall over the course of the year?

Yes, in the second half of the year, the average grade for the year is just over 2.4. This puts it into perspective.

At Turquoise Ridge, you mentioned the 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. But I’m just wondering when those unit costs will start to trend down.

We expect to be back up at plan at the rolling plan at the end of quarter three. We’re working now; we are ahead of the plan as far as backfill goes. We will get closer but not quite on budget by the middle of the year, but quarter three will take us to that point.

What can we expect in terms of grades increases over the course of the year? I think that’s another one where you said your grades were low in the first quarter and will rebound over the course of the year?

Grades are going to be a little lower, and they are low in the first quarter. I’ll take you through this. We’re looking at a grade around 4.3 for the year. But it goes, again, this is a very big mine. Next quarter will have better grades, and then I think the following quarters again with good grade and then we’ll have back to around 4 grams on quarter four. It’s a little bit bumpy, but on average, there’s a 10,000 ounces to 20,000 ounces difference between the first half and second half. With Carlin being a big beast, you try to keep it as close to the running average as possible, and that’s what it looks like on the profile.

All right. Is there any other mill maintenance shutdowns that we should be aware of over the course of the year?

We have a significant shutdown planned for the Gold Quarry roaster in July, which will coincide with our expansion efforts. After that, we will increase our operations, and we are projecting that in the last half of the year and into the next quarter, throughput for the Gold Quarry roaster could rise by approximately 15% to 20%, depending on the pace of our ramp-up. This shutdown is crucial as we are upgrading the converter and implementing several enhancements that have greatly affected our efficiencies. We anticipate that these improvements will lead to a significant reduction in costs due to increased throughput and because we are also addressing some issues with the ancillary equipment associated with that roaster.

The next question comes from Josh Rales with RFI Associates.

I was wondering if you could comment on the Donlin deposit in Alaska. I heard a presentation by Thomas Kaplan talking about the very high grades there and it's just an amazing resource and asset, and you haven’t really said much about that; does the higher gold price accelerate that potential in your mine? The second question is you mentioned that you think Barrick is the cheapest and most undervalued gold company in the world, and I was wondering if you could point to a metric or two that you look at to reach that conclusion that you could share with us?

Yes, sure. If you look at consensus on NAV multiples, we’re under one time. Depending on who you follow, it’s around, it’s anywhere between 0.89 and 0.93 times NAV. Of course, as the gold price goes above the consensus prices, as with copper, the copper is the real driver as well; that discount expands. So that’s an easy answer. On Donlin, we’ve always recognized it as Tom does, a very large resource. It is refractory, so it’s a call in a very geographically challenged area, not geopolitical, but geographical. So it’s a Carlin deposit at 2.4 grams a tonne. Infrastructure is the challenge, and getting it to deliver a return that meets our investment criteria has been our focus. We’ve been working hand in glove with the NOVAGOLD team, really trying to sweat every line item in the capital schedule. Rising gold prices float these types of boats, and there will be a time when NOVAGOLD would be an investment. So that’s our view; it’s an inventory, it’s part of our global inventory, it's a valuable asset in our inventory, and we’ve never said anything otherwise. Do you want to say something, Graham?

No, you said NOVAGOLD, but you meant Donlin.

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

Yes, absolutely. But you were referring to Donlin. It will be developed.

But not anytime soon; this is way out in the future.

You try and predict the gold price. If the gold price is up 15%, it’s up nearly 30% in the last 18 months.

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

I think it’s starting to get closer.

The next question comes from John Tumazos with John Tumazos Very Independent Research.

In a similar vein, you have three or four 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 Nevada Gold JV. As you evaluate these projects, do you assume that industry costs will rise half as much as the gold and copper prices? Or will you estimate that three-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?

John, let me answer that in sort of presenting a scenario. Go back to 2006 with the run-up in the gold price from $450 in 2005 to about $1,000 in 2009 and $1,800 in 2011. If you recall, similar to the last 24 months, you’ve seen the market make some big deals on a rapidly rising gold price and pay significant premiums. That happened then. The difference was everyone did it because there were more majors than there are today. Then the gold price came off, and there was inflation from 2005, from the time that China joined the global economy; it drove that inflation, and the oil price went up. But the commodity prices routinely outperformed. It wasn’t like we’ve seen now where we had inflation without the rising gold price, and a big fill-up, as we’ve witnessed over the last 18 months. The question is, and sure, that marginality that you can make money on the margin is a real attraction in the gold industry. But you are the expert. The problem the mining industry has is it has taken that margin with the gold price to keep its shareholders believing that they’re adding reserves when they haven’t really. That’s a challenge for our industry and equally for the copper industry. We’ve positioned Barrick as a contrarian to that approach, focusing on the right assets, investing in them, and making sure we’ve replaced the gold with the same quality reserves. We do have that marginal flexibility because of our discipline on the $1,300 gold. Some of our assets, not all, because many are constrained geologically within the $1,300 envelope. Some have lower-grade halos around the $1,300 envelope. When there’s a high gold price, we’ll take that because it comes in at a very similar margin because of the infrastructure. If you have a $1,000 margin and you’re developing infrastructure based on $1,300, you can take marginal gold on that basis, and it’s good business. We do that. 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 good. We can do that. Donlin is a very different asset to Fourmile. Fourmile is a Tier 1 world-class opportunity, and it will make money at any gold price you can realistically forecast. It’s a matter of banking it, which we do again diligently. We will not take risks on that. The Chile side; the copper prices certainly helped on Zaldivar. The Veladero mine is I think we fixed that rather than got saved by the gold price. It’s a gold mine, not a copper mine. Pascua-Lama, we’re working on a preliminary economic model for Pascua. It’s a gold and silver mine of which there’s a big silver stream, as you know. We don’t hedge, so we would have to see we’d have to be comfortable; 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. The opportunities for us are the expansions in Loulo, the whole Carlin, the expansion in Turquoise Ridge, the Goldrush ramp-up which is already there. There is an expansion opportunity more complex than Fourmile. We’ve got very exciting upside in Kibali and Loulo-Gounkoto. Pueblo Viejo is about delivering 20 years, so any further additions will last rather than profile. It’s an 800 to 1 million ounce producer. The real excitement is some of our copper plays in new jurisdictions. 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. The gold play and our solid relationships in Zambia and DRC offer us significant opportunities again, and we cautiously optimistic we’re going to grow those positions. I hope that answers your question.

Some of your projects have been in hand for 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 are other companies that don't have enough projects, they’re willing to pay premiums, would you let somebody pay you a premium and buy one of your projects and pay you a billion dollars or more?

We would be very happy to sell somebody an asset if they’re going to pay us more than we think it’s worth. Our business fundamentally is mining. As you see, if you take Loulo, we started with a million ounces. It’s now got, what Simon, 7 million of reserves still today after more than 10 years of mining or 2005, so that’s 22 years of mining. When you are 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. 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. 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, we’ve still got some work to do to deliver them value, those that are still in from back in 2018. We are building a great company 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.

There are currently no more questions from the conference call.

Thank you very much everyone. Appreciate the questions and thank you again for those who came to join us on a one-on-one basis. We're, as you know, always available to take questions. Going forward, we look forward to talking to you again. We are having an analyst visit into our Kibali and Tanzania mines starting on Monday. We will be releasing the presentations and that on the website. I urge you to follow the trip virtually, and we’re always available to help you if you've got any questions. Thanks again.

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.