Barrick Mining Corporation (B) Q4 2018 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick 2018 Fourth Quarter Results Conference Call. During the presentation, all participants are in listen-only mode. [Operator Instructions] As a reminder, this conference call is being recorded and a replay will be available on Barrick's website tonight, February 13, 2019. I would now like to turn the conference over to Mark Bristow, Chief Executive Officer of Barrick. Please go ahead, sir.

Thank you very much. I think it's working. Good morning, everyone. Welcome. As you see, we're starting something new here, face-to-face quarterlies. So, I'm sure we're going to get better at this as we go along. A warm welcome to the people on the call, wherever you are. We have structured so that our investors across the globe are able to participate at a reasonable hour and so those who have phoned in, particularly from London and Africa, you're all very welcome. You'll see that the presentation today is a little different than what it will be in the future. As you know, we closed the transaction on the 1st of January, so the reports for Quarter 4 and 2018 are separate and that's why you've got these two different documents. And then we put a wrapper together to pick up on the forward-looking business. And so I'm going to present the results in that format but, at the same time, I'm going to, as we flow through the assets, also give you some color of how far we've got in the short time we've been officially together and give you a feel of the road ahead for each of the assets. As you know, it's been barely seven weeks since this merger of Barrick and Randgold became effective and what I'm able to tell you is that, in that short time, we've made a really strong start toward our goal of becoming the world's most valued gold company. And I'm sure sometimes that's lost on you but valued means we want everyone to understand that we're a business driving value creation and also valued as a partner and an operator in our host countries. For both John and I, when we were motivating this transaction, we were very clear that the aim was never to be bigger. It was to combine world-class assets with world-class people in a business capable of sustainable, profitable growth and industry leadership. And so my first priority has, therefore, been to see that we have teams and structures fit for purpose and we've made a lot of progress in this regard, as I'm sure you'll get to appreciate as we go through this presentation. We've now got fully functional regional executive teams, with North America -- that's U.S., Canada, and Alaska -- being driven by Catherine and her team; Latin America, led by Mark Hill and his team; and Africa, led by Willem Jacobs and his team. And without a doubt, every one of them are making very significant progress in effecting our new strategy, which, again, I would point out, we created through a series of consultations with the senior executive leadership of both organizations, going back as far as July last year. And so this is not a business that's been hatched by two individuals but it's being sold and motivated to the future leadership of this organization. Supporting these executive teams is a new corporate team with a mix of skills and experience, which, I believe, when you put it all together, on a side-by-side analysis, there is not another resource company on this planet that has the depth and breadth of skills that Barrick can boast today. The corporate office and its satellites have been restructured to move people and functions, such as the innovation in digital departments, out of the back rooms and into the operations where they belong. So, those short, little historical cries about us closing down stuff is unfounded. We really put people back to where they're supposed to be to ensure that we do lead properly in the mining industry. Mining plans are being moved, and we talked about this in the announcement, from a cash flow optimization base to a model focused on optimizing the ore body and using input costs to drive the margin and design rather than high-grading revenue to drive the free cash flow. And to this end, there are now mineral resource management teams at each of the mines. And I would say that, probably with one exception, they're all new in the leadership. At the same time, all our systems are being revised to give management the kind of real-time data access we had at Randgold. All in all then, this strategically repositioned Barrick is beginning to take shape that is in line with my vision of what an agile and effective modern mining company should be. and I can assure you it's been hard work and a little bit of stress but we're at that point now where, certainly, I can speak for myself, starting to have a lot more fun and I've got no doubt that you'll see the benefits of a really motivated and energized management team going forward. You need to read this, please. We used to put it at the back of the presentation. But, as you'll get to know, I've become a very compliant person. So, we turn now to the results for the past year, starting with the pre-merger Barrick. So, it will be all with Barrick and, as I say, I'll also touch on looking ahead under each section. The annual dividend, as you know, was increased by 33% on the back of a strong cash flow and total debt, gross debt, was reduced, leaving Barrick with a strong liquidity position and, certainly, a balance sheet that's eminently manageable. The injury and environmental incident rates both came down, a significant achievement in an industry with inherently high risk. And on the new business front, exploration and project development in Nevada and the Dominican Republic delivered some exciting potential and I'll expand on that as we go. A reality check on the value of certain assets which did necessitate some impairments, as well as the de-recognition of deferred tax assets, which you've got the detail in your packs, resulted in an attributable loss for the year. I'll touch on the impairments as we go through the presentation. Copper and gold production for the year were in line with guidance, as was the all-in sustaining cost for each. And now you can see the salient financial results, which reflects the operating performance and my earlier comments. Total capital expenditure at $1.4 billion was at the bottom of the guidance range. The group, as I pointed out in the introduction, health and safety performance continued to improve, which is very encouraging, as the five-year trend on this pie chart shows. So, now I'll start with the operational review and we'll begin in Nevada, which is now being operated as a single complex under a new executive general manager. And so Catherine has rearranged the management team. And so for those who know Randgold, it's a bit like Loulo-Gounkoto but on steroids. And we have dedicated managers in place now for each mine. That's Goldstrike, Cortez, and Turquoise Ridge, and we have a new leadership structure, as well, in Goldrush-Fourmile project. And within this complex, gold production at Cortez, as we've been messaging you and we certainly did that at the transaction as well, is transitioning from largely an open pit to predominantly underground and from processing predominantly oxide ore to a mixture of oxide and more refractory material. And lower throughput at the oxide will reduce gold production for the year and that Cortez open pit will come to an end during the year. We'll certainly -- actually, it comes to an end in Quarter 2 and then we'll process some dumps after the end of the year. And I would just also point out that the move -- so, when you see the cost increase for this year in our 12-month forecast, that's the driver. But I would add that all the other parts of the Nevada complex are all delivering an increase in production and a significant drop in costs. But not enough to mask the change forecast for the Cortez open pit. That will change as we develop the Crossroads pit. It's a longer change because the most optimal way of developing the Crossroads pit results in a steady increase in grade that eventually peaks out in 2025. But, again, we've indicated that this result -- we're seven weeks into the program. We've got a good handle on this year's production and, during the year, we will be updating you, as those who know me are clear about, on a detailed five-year plan going forward. The other aspect of our work in all the various operations and, in particular, in Nevada, is that we've really focused in on mineral resource management. As I pointed out in the introduction, we have a full new team there. And the same with brownfields and greenfields exploration. Because that was one thing that we shared with you that was short, is that with the drive for cash flow, the geological side of the legacy Barrick was not where I want it to be. And so we are moving toward planning based on Life of Mine on geological models, a very big drive on reconciliation on a weekly basis, and we will eventually get that, as we have in Africa, to a reconciliation on a daily basis. Within the Cortez district, Goldrush and the nearby Fourmile discovery have been combined into one project. There's still two different parts of that project at this stage, with the Goldrush being the sort of feasibility-driven project. But every indication is that it's going to be a continuous ore body. We've drilled out -- we've got a gap between the two, Fourmile and Goldrush, of about 500 meters left. But we've drilled some holes just recently. We haven't got results back from them but, certainly, the indication is that that mineralization continues. And the development of the twin exploration declines at Goldrush continue and these declines are really focusing in on getting into the ore body and to be able to do detailed reserve drilling initially and then they will also be adapted for operational use later. And the feasibility and schedules of the Goldrush-Fourmile project are a very real focus for the new team. As I said, we've got new leadership in that project and we're going to be reshaping, reevaluating that project. It's a super exciting project. It's a primary discovery, first of all. Secondly, it's already well north of 10 million ounces and we just announced an endowment in the Fourmile section, a small resource based on the drilling we've done today, but at a very impressive grade of 18.58 grams/ton. And it's in a very significantly mineralized footprint and certainly underlies the Goldrush-Fourmile status as a genuinely world-class, at this stage, feasibility project, with the very real potential to become Barrick's next Tier 1 mine. And, again, that's something, as a geologist, you've got to look at that mineralization and level of intersection grade as just spectacular. Staying in Nevada, Turquoise Ridge is continuing its production ramp-up and the focus is on accelerating this through the greater and more efficient use of road header technology. Again, a whole relook at all the underground mines, with respect to geotechnical -- the parameters and redesign of the various mining methods. And we've got no doubt that the shaft is on track, on budget, and that, by its very self, will bring down costs, but the focus is how do we bring down costs at Turquoise Ridge ahead of the shaft commissioning out in 2022. And, at the same time, under the new TMA agreement with Twin Creeks, we are ramping up the tonnes processed, which will continue to support the gold production growth at Turquoise Ridge. The mineral resource management and mine planning, again, has been reenergized and is focused on ore body optimization and exploration has the task of replacing the mined ounces. So, even though we're still ramping up, with our whole culture of investing in our future, we've already challenged the exploration team to get out there and work on replacing the gold that we're going to mine. We're also looking to appoint a very specific underground mining manager at Turquoise Ridge as part of the new management structure. And the former manager, Henri, a very talented South African general manager, will be moving to lead the Cortez business unit and we'll replace him with somebody who's very focused. Turquoise Ridge is effectively an underground mining project rather than an integrated gold mine. Over now to the Dominican Republic and I'm still practicing how to say PV in Spanish. So, if you'll excuse me, I'll refer to it as PV. But just because it's got a short name doesn't mean it isn't a really significant Tier 1 asset in our portfolio. And, of course, one of the lowest cost profiles in the legacy Barrick portfolio as well. It's not only a very important asset for Barrick, it's also the most significant contributor to the Dominican Republic economy. There's still a lot of upside at this asset and the team is very focused on delivering its full value and expanding its current reserves. We've recently finished a scoping study and pilot plant, which support the expansion of what is really one of the world's largest gold mines. And based on this work, we are now progressing toward a feasibility study and this expansion project is designed to deliver a Life of Mine well into the 2030s, allowing the mine to maintain annual production of approximately 800,000 ounces per year after 2022, where things were originally going to drop off. And, also, part of that project is the conversion of the generators from heavy fuel to gas, which, again, drives the cost down. So, all in all, a really exciting project to work with and right up Rod Quick and John Steele's street. And part of what we bring is some real proven process flowsheets, as far as ultrafine grind and the sort of more tank-driven oxidation processes rather than the current envisage leach process. In Argentina, the picture is more challenging, with the Argentine government's currency devaluation and consequential changes in the fiscal regime impacting on the fair value of the asset, which, as you will see in the pack, has resulted in an after-tax impairment of $314 million. And so in order to restore Veladero, we have to really reinvent the way we've been operating it. And, again, Mark and his team have already gone a long way to decide what we need to do and we're currently rolling the new reshaping of both the leadership and the focus on how we operate at that very high altitude. Cost discipline and increased efficiencies is what the operation needs, in addition to a real heavy dose of geological input. As a first step, I've sent in some geological firepower, as well as a mineral resource management review team, to get firm grip on the situation and find the best way forward. There are some significant potential resources that currently fall outside the current pit which need evaluating and that is the focus of the combined Barrick/Shandong review team. And, again, we've embraced Shandong as a partner and really started to get them involved as an active joint venture partner. And on the cost side, we are, again, working in partnership with Shandong to lower the overall cost structure by: improving management oversight; rightsizing the G&A, as we've done here on the corporate; focusing on supply chain and other operational efficiencies; and, also, we've got a project, which is a very exciting project, to bring cheap power in from Chile. Again, in the Pascua-Lama project, Barrick spent money to bring power to the border of Chile and Argentina and so we're looking at extending that infrastructure to be able to -- because it's right there and Veladero relies on very expensive civil power today. Also, as already indicated, we are continuing to work with Shandong on other opportunities that the team has identified along the El Indio belt. And I'll touch on that a little bit later. We're also developing a new plan for Lagunas Norte, our Peruvian operation, following the suspension of the plan to sell all Barrick's assets in that country. Peru has a new government, as you know, or you should know, which is more mining friendly than its predecessor and it remains a key destination for Barrick in its endeavor to revitalize its greenfields exploration into South America. The new objective is to update the geology and the ore body models, assess the satellite oxide potential, and focus on extending the known high-grade sulphide mineralization, all in the same pit and, as I indicated, in some satellite pits. And the outcome of these exercises will enable us to determine the future of this business. So, right now, we'll be running down the oxide reserves and are much more comfortable that, when we get to the end of that and we're looking at extension potential, we'll put that mine on care and maintenance and finish the job on the sulphide properly before deciding how we continue. So, again, you'll see in the impairments the Seam-Up project, which is a project focused on processing the more refractory ore, which is both in stockpile and still sits in the pit. It doesn't meet our criteria but it has the potential to get close to it, if not meet it, if we were able to drill out some more reserves. And so, in the interim, we have impaired those stockpiles going forward so that we, again, start with a clean slate going forward. As for Pierina, the closure program is well-advanced. Also, in addition to the site-focused work streams, numerous support offices in Chile, Peru, Argentina, and the Dominican Republic have been downsized to reflect the new lean operating model. At Porgera, we have engaged with our partners and are fully aligned on the path forward for the approval of the new SML, that's the mining lease extension due in August 2019. And as with a number of the Barrick assets, Porgera has been a little neglected and certainly starved of capital for many years due to the uncertainty around the SML extension. So, 2019 -- in fact, we leave, Mark and myself and the team, leave for Porgera tonight and it's the only asset I haven't spent any time on. So, we're going to have a good look and meet with the PNG government and so on. And our focus this year, 2019, is to assess the full potential of this asset and decide on a go-forward plan with that project. Because there's one thing that's absolutely clear -- this asset keeps producing positive cash flows despite the challenges it has to face. And we all know that part of the world is home to many world-class deposits. While Barrick was managing down its debt, there was a necessary but somewhat single-minded focus on cash flows, as I pointed out in my introduction. And one of the consequences of this was the relative neglect of exploration in Latin America, where we have now revitalized our exploration programs and are actively pursuing brownfields and greenfields opportunities, which are presented to you here. I'll just give you a simple example. The Alturas project, that's about 8 million ounces when you combine them across the border at over 1 gram. Very low strip ratio. High altitude, of course. And that's the sort of size of projects that we have in our portfolio. I mean, for a geologist, it's like being a kid in a candy store. We also, you would have noticed, announced an increased investment in and a strategic alliance with Reunion, through which we plan to establish ourselves, as we've talked about for some time, both Barrick and Randgold, in the very prospective and underexplored Guiana Shields. Copper assets in the group had a better year in 2018, with Jabal Sayid, which is a very tightly run operation and relatively high grade for a copper deposit, where it completed the underground development and is now primarily mining ore rather than focusing on development. And the challenge with this asset is now to ramp up to its 2.5 million tons per annum nameplate. In the meantime, it makes a fair contribution to profits, generates good cash flow, and even at our long-term commodity price $2.75. As part of that, we've renewed the contract mining there and all the new equipment has been ordered so that project is definitely one that you don't have to worry too much about, although we will be continuing to switch some of the costs out of that mine. The Lumwana asset performed well in Quarter 4 but had some significant throughput and mining challenges through the year. It is a low-grade mine, although it's very large, and so cost control and efficiencies are critical to its profitability. We've had a team up there spending time with -- again, it's an asset that was largely left out of everyday supervision. And as part of the focus on cash flow, stripping has been neglected, really, or pushed out a bit in the plan. And so stripping has now become critical to maintain the operation. And you will have seen the debate in the press about us engaging with the Zambians to make sure that everyone understands this is a national asset and it needs to be run in such a way that we can continue to support the Zambian economy, as this mine has done for many years so far. Zaldivar produced 29.3 million pounds of copper and we are busy trying to metricize Barrick, particularly Nevada. So, we're also at 13,300 tonnes of copper in Q4. That was 5% up on Q3 and produced 47,300 tonnes of copper for 2018. Again, that mine experienced issues associated with a fixed and mobile plant throughout most of the year, although the throughput improved significantly as we got on top of it in the last quarter. And the focus for 2019 will be on improving the availability of both fixed and mobile plant and, more importantly, executing the secondary sulphide project which will go hand-in-glove with extending the pit and mining more and more of the transitional ore. The focus on these three areas will also ensure better efficiencies and improved production, as I said, as the pit expands. And then these are the Barrick reserves and resources, calculated on a pre-merger basis under Barrick's specifications where they used a $1,200.00 gold price to calculate reserves. In the quarter of this year, we will be rationalizing both the legacy Barrick and legacy Randgold criteria and combining the declarations by the end of the year in a single set of assumptions. You need to appreciate that you can't just go into a mine plan and say, OK, it's calculated at $1,200.00 and change the gold price to $1,000.00 because you don't get an optimum plan. You've got to replan the whole mine and we're busy with the replanning and we will coalesce the metrics at which we calculate reserves. Attributable, proven, and probable reserves are down principally on the back of the depletion of the Cortez Hill open pit, as I indicated earlier, and also the rightsizing of the Bulyanhulu underground reserve. But the most important thing, and this is what makes us a standout company, is that the total grade has increased and this is off the deck of material added during the year being over 4 grams a tonne. So, although it's a small increase, it's actually quite significant because there's a lot of tonnes in this table. And, again, you'll see, as we get our head around it, this is the really exciting thing for Barrick. And I'll just touch on one little thing that really excites me is that if you look at the Barrick reserves in Nevada just, the average grade is about 3.5 grams a tonne, which is significantly higher than anyone else. But, more importantly, the resources -- correct me, Rod -- they're about 5.5 or 5.4 grams a tonne. The resources in Nevada. Yeah. I know it is. So, when you look at it, the resources are very profitable. And the reason is because of the resources in Turquoise Ridge and, more importantly, the resources in Goldrush and Fourmile. So, as we convert that, that reserve base is going to grow both in ounces and in quality and that's the whole game in gold mining, as you know. You start with world-class assets, you deliver world-class businesses. So, let's move on to Randgold resources and these are the highlights for the quarter and 2018 for Randgold. This company took an emotional bow but with a flourish, presenting shareholders with a 35% rise in their annual dividend and boosting its cash on hand to $750 million at year end with no debt. And it's worth pointing out that you take out the dividend, you really saw back at about $500 million, which is what our policy was. And so we rolled that $500 million into Barrick as we closed. This is largely driven by stellar performances by Kibali and Loulo-Gounkoto, which helped offset the impact of a protracted illegal strike at Tongon. Group production for the year of 1.28 million ounces was just 1% below guidance. And, again, as you know, we don't run our businesses for the quarter but for the long-term and so those strikes -- you don't want to high-grade Tongon, so we had to manage our way through that challenge. Total cash costs per ounce were in line with full costs and the earnings, as you see here, were impacted by the Barrick merger costs, as well as we added an additional tax accrual for the mediation process. Like Barrick, Randgold had a good health and safety year, decreasing the total injury frequency rate to a new record low. And the Loulo-Gounkoto complex in Mali, one of new Barrick's Tier 1 assets, delivered a record throughput at the reserve grade. And, again, that's important. We are mining these assets at reserve grade despite, as I pointed out, some industrial action right at the end of the year. It continues to invest in its future and through such developments as the new super pit at Gounkoto and ongoing brownfields explorations this year points to a Life of Mine in excess of 10 years and, certainly, potential to continue to replace what we mine. The Loulo 3 open pit and underground project is particularly promising and a preliminary economic assessment has been completed. And as I have mentioned before, the discovery of this high-grade chute located between relatively close-space drilling on the 10km long Yalea structure highlights the potential for additional discoveries along and outside the known ore bodies. The Loulo district has been one of the most prolific producers of world-class gold deposits in the last three decades and it's certainly still extremely prospective, both for extensions, which is driven -- Loulo has been around since 2005 and it's continually added and replaced ounces at better grade. There's a renewed focus across the river in Senegal with our Bambadji joint venture with Iamgold. It's a very exciting project and, as you know, geology never stops at international boundaries. Tongon in Cote d'Ivoire has faced many challenges in its life, as you know, including a crippling illegal strike in Quarter 3, from which it emerged strongly to end the year in line with its revised production guidance. And, really, this mine, when it works, it works really well, thanks to an excellent management team. And despite its problems, it's worth noting that it's been consistently profitable and it's a very material cash generator for our group. As at the other operations, we continue to explore around the mine for extensions to the main structure and satellites, with the potential to add to the Life of Mine. And, again, Cote d'Ivoire combines geological potential, it's relatively underexplored, with an advanced infrastructure, certainly, relative to the surrounding countries, particularly in the north of the country. And so it's a key exploration focus for our team going forward. In the Democratic Republic of Congo, Kibali delivered another stellar performance. It's our fifth mine that we've built that have delivered on all its nameplates. And production exceeded our guidance significantly and was 35% ahead of last year's production. Kibali is one of the most mechanized mines in the Barrick stable, with a mission control system. So, we have a whole -- underground ore-handling logistics gets managed without any human intervention, apart from the person sitting on surface operating. And this has been key to the successful ramp-up of our underground production and we've also seen a steady increase in recoveries up to the 89% recovery, which is the nameplate design in the feasibility study. Continuing brownfields exploration, as with all our mining operations, continues to identify numerous opportunities for reserve replacement and, in particular, some new open cost opportunities, which is an important component of the processing plant feed because the predominant driver of value in Kibali is underground but it's limited on rate of production. So, additional open cost ore on the margin is a significant boost to both production and profits. Over in Senegal, the feasibility study on Massawa has been completed and it certainly confirms that Massawa, as I've said for some time, is one of the best, if not the best, undeveloped project in Africa. It's now banked. So, it's a very detailed, full feasibility study. And the study's findings are summarized here on this slide. And you'll see a bit shy on our filter under the $1,000.00 gold price, but still very profitable and you can see how quickly it grows its returns at $1,200.00 and $1,400.00 gold. The permit, under the permit conditions, had required us to complete this study and file for a mining permit by the end of January, which we've done. At the same time, that process is going to take time to finalize the mining permit and we are continuing our brownfields exploration drive because we're certainly not short yet of opportunities to continue to expand this project. Again, finishing off, this is the Randgold annual reserves and resources report. And although the proven and probable reserves were partially replaced, the grade improvement was significant. Some 6% increase in grade. And that's our focus is quality. And it was really driven by Yalea underground extensions, where we added 418,000 ounces at 10 grams a tonne. Randgold resource numbers -- I just would point out they report differently to Barrick. So, the reserve fits into the resource so that's why it's side by side. And group resources were just below and mostly replaced what we mined. And, again, that's the process in the long-term. Ultimately, we've been able to continue to replace the ounces. There's a lot of visibility in the resource profile of Loulo and we've got no doubt that, in the fullness of time, it will continue to perform as we have in the past. As discussed during the investor roadshow in November last year, one of the key opportunities we identified in this combination, apart from just putting a great team together and dominating the Tier 1 asset portfolio in the industry, was with respect to inventory management and supply chain. And, again, we've done a lot of work on this already in the short time we've been at it and, to this extent, we see visibility to reduce the costs -- that's annual spending on procurement -- by $200 million by the end of 2020. $50 million of that is in the budget already, so it's embedded in our forecast. There's another $90 million that we believe we will deliver this year and the remaining $60 million will come in 2020. And so moving on then -- by the way, we, again, believe that we will be able to take out around $150 million in inventory management, just storage management. Again, unlocking some working capital through this year. So, I think when you look at what we've achieved out of the blocks -- and it's worth pointing out that this is on the back of the significant reduction in these specific costs, specifically admin and G&A, that the Barrick team had already delivered during 2018. And so, looking ahead, this is our guidance for the group for 2019. And the detail is in your pack on a project-by-project basis and I'm sure you will, through the fullness of time, get back to us with your questions. But I pointed out the big driver on this is really the change in the Cortez open pit mining schedule. But, again, that will reverse over the next while. And what's not baked in this is the ongoing efficiencies and our focus of being ore-body focused going forward and shifting from cash flow or cutoff grade to cost reduction and building the margin through that reduction and dropping the cutoff grade going forward. We are still working on, as I pointed out, a detailed five-year plan and will present this to the market in due course once we have a clearer view on asset optimization. And this is requiring a full replanning process for the group. You will note that we have significantly reduced our corporate and project costs, both in 2018 and full costs for 2019, largely driven by a reduction in headcount and other costs outside of the operations. This will certainly be an area that we will continue to focus on as we progress throughout the year. And on a go-forward basis, we have already cut more than $150 million from the corporate costs base. And exploration expenditures are expected to be in line with the prior year. That's despite the fact that we've combined the two companies. And we don't expect to drop any catches on our exploration. I've been a big believer in exploration. We keep it tight and you force the geology team to prioritize and keep the quality of the targets at a high level. The production guidance for copper is in line with the previous years, as you'll see, and the detail is, again, published in the documents that you have. Lumwana, we'll continue to engage with the Zambian government and community stakeholders about a mutually beneficial way forward for this operation and you would have seen that the Minister of Mines did declare publicly through a press release that he's ready to engage with Barrick on a tailor-made tax addition for Lumwana as a result of the engagement over the last three months and, in particular, our discussions last week in Cape Town. At Zaldivar, we and our partners have agreed to proceed with the proposed expansion project, as indicated under the copper report, and as I pointed out as well, Barrick's future is really weighted toward underground mining. As you know, that's our core skill in the Randgold team and we have brought a lot of skills into Nevada, both external and on the leadership side, to augment the team there. And I've got no doubt that you'll continue to see us unlocking value in that part of our business. Before we close, let me briefly pre-empt your question on Acacia. The current impasse, as I'm sure you all agree with me, is clearly a lose-lose situation for Acacia shareholders and other stakeholders, which includes Barrick, and, of course, the Tanzanian government. We do and are engaged. We remain engaged in mediating a solution among the key stakeholders. And I am confident that this situation will be resolved, as I've said repeatedly in the press, in due course and no doubt for the benefit of all stakeholders. And then, finally, looking ahead, I always say if you don't know where you're going, any road will take you there. So, we have a clear mission. We know exactly where we're going to and this mission is to be the world's most valued gold mining business and we're going to do this by finding, developing, and owning the best assets with the best people and to deliver sustainable returns for our owners and our partners. We plan to do this through applying our key strategic filters and you'll see that we have a set of very clear strategic filters. We have shared this with the market on our Investor Day and it will give you a very clear understanding of how we manage. And you can hold us to account on the way we manage our assets going forward. Whilst we have already streamlined our corporate offices across the group, we will continue to rationalize the organization as we move to a fully integrated business, as well as roll out our systems so that we manage in real-time with an agile approach, responding to business challenges and also investing in our future. Again, while we have already started to develop our ore body knowledge, mobilized an exploration drive to find new opportunities, and reviewed existing assets for optimization or disposal, it's just the start. And there will be more to come with additional benefits, for sure. We also plan to work at continuing to develop our social license. You know that's very close to my heart and it's something that's applicable in Africa, in South America, and equally in places like Nevada and around Hemlo, Catherine and I have discovered. We're going to strengthen our partnerships with our joint venture partners and also with our host governments. And, to this end, I have already met with the governor of the San Juan province in Argentina, which is a challenging area for us. Catherine's already started her meeting schedules with the new leadership in Nevada and we have met with the mayors and the local leadership in and around Hemlo and we will continue to do that on a regular basis. And the only reason that you don't find me in an office in Toronto every day is because it's much more important and a lot more fun being in the operations. Over the next quarter, starting tonight, I'll be conducting strategy reviews and team effectiveness exercises as we roll out our group strategy across the operations and the objective of that is to ensure that everyone understands the strategic objectives, our aims, and we turn that into specific plans in each operation. As you will probably note, we are clearly well out of the starting blocks in this exciting voyage and I'm confident that, by the end of this year and throughout this year, we will be able to report back to you and show you and tick those promises that we've made as we deliver on them. I'm very excited, in case you hadn't observed, by the prospect of putting the Barrick brand back where it belongs and that is at the head of the gold mining industry. So, thank you very much, everyone, for your attention. And the process now is that we'll take questions from the call-in people first, Danny, and then we'll open it up to the floor. So, that gives you a chance to flesh out some questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. The first question comes from John Bridges of J.P. Morgan. Please go ahead, sir.

Hi, thanks for taking my call. Congratulations, Mark. Maybe you're going to be lucky with the Reunion purchase and find an asset in Suriname, which is a Dutch name which might be easier to pronounce. But I was wondering, you've given us a five-year production plan -- or, sorry, you've given us an outline for 2019. But you're in the process of figuring out which assets to keep and which assets are non-core. When do you think you're going to have a firmer outline of what the company's going to look like over the next four or five years? Thank you.

Hi there, John. Next week. I'm only saying that because everyone's terrified that I'm going to give you a date. And so I'm not. John, we are working on that. And our guidance for this year is 5.1 to 5.6 and that's before disposals. So, we will adjust that as we go. And I think, again, I would just leave you with the fact that if you look at the Nevada guidance and you look at the PV guidance and you look at the core assets in Africa and add them up, that's the basis going forward. The assets' production plans are going to be there and thereabouts. What we want to do is, of course -- certainly in Nevada, there's a lot of work to do on cutoff grades and rolling out the automation, both at Turquoise Ridge and at Goldstrike. We're just starting to see the benefits of the underground, some very significant efficiency improvements in the Cortez underground, as we move from the old-style Nevada small-scale mining underground to open stope, long hole drilling. And, again, we've got a group of mining engineers and both short-term and long-term planners, along with reviewing the geotechnics, because the geotechnical work is being done, but really looking at the rock integrity and the best way to mine some of these ore bodies. And that's going to take some time. And if you look at Nevada, in each aspect of our business, we're very excited about the work that's being done with the road header in Turquoise Ridge and the ability to mine at a better rate in that rock, which is quite challenging as far as rock goes and support. Already, just as an example, we're changing the support strategy for Goldrush and we expect to do similar changes across the group, particularly in Nevada. PV is the same. There's definitely opportunities to improve on the cost base and, therefore, look at the cutoff grades. And as I pointed out, the improved power opportunities are significant and also the ability -- the team is now engaged with the Dominican Republic to sell power because we generate excess power. And, again, how we can manage that, as it has a benefit on our cost -- a significant benefit on our costs, which will again drive our business plan. And, also, once we bank the feasibility study, there's some significant resources in the current plan which will immediately become reserves. And we'll unlock them. So, again, that will change the Life of Mine plan. And Veladero, right now, it's all about right-sizing. That was a big operation and was focused on gold production and what we're moving to is a focus on profitability. And so 500,000 ounces or thereabouts is probably, for the next couple of years, the right target. But, again, we need a lot more geological input to be able to really understand our mining reconciliation and what we're putting on the leach pads. And, also, there's a requirement for a new leach pad, which we're busy designing and permitting at the moment. And that will also be important to be able to schedule a mine going forward. And, again, we've got some potential for additional resources right, as I said in my speech, at the southern end of the pit. We've got to drill it. The drill spacing is just too far apart to be able to put that into your mine plan. And so what I'm trying to show you is that there's a lot of work to do. We're sure that we'll have those detailed plans that we can stand by the end of the year. And should, for some miraculous reason, we get there earlier, we'll share it with you.

The next question comes from Mark Magarian of UBS Group. Please go ahead, sir.

Hey, Mark. I have just kind of an extension, I guess, of the previous question. So, it's been said that the portfolio is going to be looked at and you're going to look at disposals, maybe even look at acquisition opportunities as you start to develop what your long-term vision looks like. Given where the gold price is currently, there are a lot of companies trading sort of below book value, more to do with technical reasons and just a bit of sector hate, even though the gold price has been going up. And when you think about new Gold Corp. likely to be looking at sending some of their lower quality assets out for sale also, timing really comes to my mind, given the history of some good timing and bad timing at Barrick, actually, in the past. Now is probably a good time to try and buy certain assets which are on sale, while selling some of the non-core stuff might be better to be prudent to maximize shareholder value until the gold price is higher or, I guess, the sector starts to value those assets a little higher. I just wanted some idea on your perspective on that as that's mine, anyway.

So, as you can imagine, I've got a very full inbox, says Kevin, of people wanting to be considered in asset sales. And I guess it's probably equaled by the number of bankers wanting to derive a fee from being able to sell those assets. So, there's no shortage of energy and support and potential buyers. The one thing that I've learned, we've learned, is it's something we're not going to do in a public forum. So, Barrick's got no bleeders. We've got to filter process all the assets that we might consider to bring to account are contributing to the bottom line. And so, again, it's important that -- and as I said when we announced the deal, it's important -- one of my responsibilities, and Kevin's even more, is when we sell something, we don't diminish its component in the NAV of the business. So, we will do it in the fullness of time. Some of the assets we've got a bit of work to do to make sure that we maximize the sale value and we're busy with that. And others are more saleable in the short term. And, again, we're not sitting on our hands. So, that's what I can say on the asset side. On the acquisition side, you say that, Mark, but it's not my experience. And if you look at the recent goings on in the gold industry, there's been a lot of promises that haven't been met and disappointments and forecast production that just haven't been realized. So, the biggest risk is believing market consensus in trying to buy things. And so it's like -- I think it was Harry Oppenheimer that said many great gold mining, and other mining, opportunities have been killed by a bullet hole. And I can say, from my own experience, many new business opportunities have been destroyed by our due diligence. And so we have and we continue to do regular due diligence, as I think, even in the short period of the last seven weeks, we've done a couple. And so we will continue to look at every opportunity that might merit our due diligence but that filter that you see up there is what's going to drive this business going forward. And so we're not going to be seduced into making those irrational acquisitions that our industry is so very good at. But at the same time, if you stumble and you've got quality, you'll find us at your front door.

All right. So, the focus being on great jurisdiction, high grade, large reserves, and, ultimately, when you talk about stumbling, the opportunity for you to bring in your expertise and provide quite significant synergies, I guess, on the underground front or something. Something that you're good at.

And I think the exciting thing -- and you guys mustn't underestimate this. Everybody said I couldn't leverage the Randgold way. One of the things we've got is that we've got -- Catherine's team is really very capable of taking on more challenges. And she's got the knowledge, the time, and the capacity to do that. Mark Hill would like to have a few more quality assets, wouldn't you, Mark? And then in Africa, you've seen how we've assimilated the Barrick assets. We didn't employ one extra person. In fact, we lost a few. And this is the exciting part of that. We've got some really exciting projects. They're early stage in the El Indio belt, which we identified as a very prospective place. We would like to expand our exploration initiative in Peru. But the most exciting is another Goldrush. And Barrick, out of all the companies in Nevada, has the ounces, quality, and it has the ground. And so, for me, finding another 15 million ounce plus 10 gram near-surface gold deposit myself is much more exciting than buying one. So, I've got no doubt we've got a lot of work to do with the asset base. It's a quality asset base. We are not interested in boosting production. What we want is profitability. Another exciting thing is we've got a very large EBITDA and we now understand how it's been whittled away to a net cash flow, which even then still supports our dividend strategy. But, again, we're going to be focused on converting that EBITDA into more net positive cash flow. And that's the really exciting part of this business. And we're going to be very focused on doing that.

The next question comes from Kip Keen of S&P Global. Please go ahead.

Yes, thanks for taking my question. I just wondered if you might just give me some general comments on where you think you might be at Barrick in five years or so, looking out at the business in the context of the debt paybacks that have been made in the past five or so years. A bit of a different market. So, how are you looking out at the next five years?

So, the one thing I can assure you is that, over the next five years, we're going to deliver on our guidance, which will make us unique. As you know, Randgold delivered on its guidance for 23 years.

Will you be with the company in five years?

Sorry?

Will you be with the company in five years?

Absolutely. I said five years. I say what it takes but five years is at least. I don't do a deal and then walk off. Remember, I'm invested in this organization, personally, a lot.

For sure.

The other thing is that our focus is about reducing debt and increasing dividends. So, that's the other focus. If you want to know what's going to happen in the next five years, that's what's going to happen. And so for the rest, I'm going to call in the fifth. And as I said, we'll tell you a better detailed plan going forward. But, again, when you see us and the guidance today and you look at the cost profile and, as Catherine was saying to me when she presented this at the Investor Day last year, that range of costs actually -- the range improves. It doesn't go up. Because as we build out the new open pit resources in Nevada, we claw back on the total all-in sustaining -- all costs are reduced. And, of course, you're already seeing, in the granularity in Goldstrike and Cortez underground and in Turquoise Ridge, increased production at lower costs. And so we'll see that continue because we will realize some of the assets that are impeding our ability to deliver more profitability and fulfill our objective of dropping the debt and increasing the dividend.

There was some speculation about interest in Pretivm Resources. Any thoughts on that particular mine? I mean, you haven't mentioned a lot of Canadian assets in this call. Just curious.

So, one thing we are is underinvested in Canada, which is a real -- if you were an allocator of capital and you looked at Barrick, it's underinvested. The problem is Canada hasn't got very many -- you buy assets because of two things: poorly run or well run. There are not a lot of well-run assets in Canada either. So, what we have got is a fully dedicated team looking at both opportunities and also looking to build an exploration, sort of early stage project identifier. And it's early days still but we are doing that. Rob's team is working on building and expanding. We've got quite a lot of skills that we can allocate to that team. On Pretivm, everyone knows what the problem in Pretivm is. It's been fast-tracked and it's sitting in a position where it's like a roast duck, no dinner. One month it's good and one month it's bad. And how do you try and get your head around what the real value of an asset like that is? And that's the problem that the whole industry is facing when it looks at that asset. So, again, it would be unwise for us to do anything in a rushed or poorly considered way, whether it's Pretivm or any other asset. And so it's going to take me a little while to become Canadian. I'm working hard at it, to be able to understand the Canadian opportunities. Again, we've approached a lot of the advisors in Canada who are much more up with the portfolios that are available and we will continue to work with them.

There are no further questions from the phones at this time.

You've got the microphone.

We would ask that you announce yourself so that the people on the webcast know who is asking the question before you question. Thank you.

Great. Thank you. Tanya Jakusconek from Scotiabank. Mark, appreciate that you mentioned that we're going to get the Life of Mine plans later out and we are going to have the reserves, but can you talk a little bit, as you look at Barrick's side of the Life of Mine plans, how they did it versus how you plan? And the reserves, can you talk about what the differences are and where you see bringing those together?

So, it's very simple. What we do is we look at the entire ore body. We look at the traditional grade tonnage curves. We look at the mine plan. We balance it against infrastructure capital. And we have an integrated team that will -- and we've already got those in place. All the skills to do that. And that's taken us eight weeks. And then we run the iterations until we get something that really works. And, for me, good reasons, as I pointed out, the last three years in Barrick, it's been, "we need this cash flow so we'll adjust the cutoff grade to deliver it." And what happens with that is that you do deliver strong cash flow, which you've seen. And I would just point out to everyone here, that decision is the first time in the gold mining industry where somebody has driven the assets to pay back the debt and not just issued a whole pile of paper. So, the privilege or the opportunity here is we've inherently got upside in the value per share because we don't have a dilution of that asset base. But what it does do when you high grade or you drive your cash flow based on a cutoff grade, is that you erode your cost discipline. So, again, when things get a little wobbly, you just go to the next highest grade pot. So, Turquoise Ridge has got -- if you drop the cutoff grade by two grams, I think you add just over 1 million ounces, just on what we know now. And so those are the opportunities that we will look at. And that's the basis on which we will be doing the plan. And that's why it's impossible for us to do that -- we have a plan, we've run all the Barrick assets, legacy assets, at $1,000.00, we know where the gaps are. And what happens when you just run the current reserve at $1,000.00? It's not the optimum way. But what it does do is it highlights what you have to do to lift the ore body's performance. And so we've done all that. We're very knowledgeable, as far as our ore bodies go. We all know them better than we knew them a few months ago. And Rod and his team and we've got Greg -- so, each region's got a dedicated executive oversight on mineral resource management, which integrates with both the long-term planners and the short-term planners. And that's what we are doing is reestablishing that. In South America, it's a little more challenging because a lot of the drive for cash flow, some of the forward-drilling programs have been neglected. So, there's a bit of catch-up to do. It's the same as we identified in Turquoise Ridge and that is just some drilling is going to improve our ability to be able to extract the ore body more efficiently. So, that's what's driving our -- and that's the difference. You OK with that?

Just to finish up my question, I did notice that Bulyanhulu had a new Life of Mine plan and that was optimized. And I think KC moved their reserves to $1,200.00 from $1,100.00 full-price. So, is that an indication that $1,200.00 is sort of where we're going with the Randgold assets next year?

So, if you take Randgold assets and run them at $1,200.00, you destroy the NAV. It's hard to go -- it makes no sense. And so, just to give everyone who don't know me, the long-term gold price is actually a cost-driven model. So, we look at input costs that drive -- we use a standard gold model. We like to see about -- in this particular model, we've had it for 25 years. And we put in the input costs and it generates between 28 and 30 IRR. And when gold price was $450.00, it used to do that, and now at $1,000.00, it still does that. But at $1,300.00, it would give you a higher return. But just recently, we've seen a significant increase in input costs in the industry. We'd been on a decline in input costs since 2011. And so my gut is that the new norm in our mine planning and allocation of capital will be between the $1,000.00 and the $1,200.00. But we will do it properly. And so if that's the case and the cost model is being driven by input costs, then you don't destroy value if you lift the Randgold metric a bit. And there's definitely opportunity in the Barrick assets, both because of efficiencies and costs and change in mine methods, but also replanning at a lower gold price doesn't necessarily mean less ounces at all.

Hi. Anita Soni from CIBC. My question is just with regards to the medium-term outlook at Cortez, given this year's guidance and also saying that it will reverse in the next two to three years. But will those changes take place next year or will it take --

Sure. And I think if you pull the investor documentation that Catherine gave last year at the Investor Day, the logic behind that model is largely intact. And that was very clear how it showed the change and the impact on coming to the end at Cortez Hill and the impact of both the move to more efficient long hole mining in the Cortez underground and the deep extension. And so we'll -- anyway, I don't want to get caught up and try to give any other answer. But it's not -- again, the logic behind those plans are intact. We had planned to make them more efficient and more focused on long-term, optimal delivery rather than a shorter term cash flow promise.

Second question would be are there any assets, in particular, that you see have been particularly neglected, in terms of capital, with the focus to cash flow management on the Barrick side?

So, Barrick's got a big capital demand, $1.4 billion to $1.7 billion this year. It's my real focus. Again, I've got no doubt that we already see that our approach to things, including the approach by the Barrick executive team -- which is not the old executive team, it's all very new so it's difficult for me to talk about the old Barrick because there's no more old Barricks here. But the young Barrick team and the new team in Barrick have the same view about capital allocation. They're mindful of the importance of discipline on capital. And what we do have is a much more focused approach to fit-for-purpose capital rather than over-engineering. We run our projects ourselves. We know the business really well. We know the controls that are required. We don't rely on -- and so another -- I haven't started explaining how we both -- the Barrick team and the new team -- cut external costs, external consultants and engineering, advisory, and all that other stuff. It's all come to an end. We're very much more capable of building mines cost-effectively than any external engineering company, that's for sure.

Andrew Kaip with BMO Capital Markets. Mark, how does the process flow sheet changes that took place with your view on Pueblo Viejo impact how you think about that project from a capital perspective? And then also, from unlocking a very large inventory of resources at the project, you'll be milling, you'll be improving the quality of the tailings that you're disposing, does that benefit from a long-term tailings management perspective and the ability to unlock those resources?

Yes. Yes to all of that. So, the flow sheet at the moment, and the scoping study, was a combination of a reduction in volume and an increase in gold feed through a flotation process route. And then a leach oxidation, partial oxidation, just on a leach pad. And then you combine that so you have more gold with less feed and you increase the current processing capacity by 50% -- 8-12 million tonnes a year. And what our team has -- and that's worked. It's a proof of concept at work. So, the challenge is the leach on the heap because, as you know, it's so hard to get a leach uniform and it takes up space. And PV has got limited space. It's one of the biggest open pit mines around and it's short of actual space to put things. In both Tongon and in Kibali, we have a float circuit and an ultrafine grind. We are the leaders in ultrafine grinding at Randgold. We've taken that technology to another level. And we actually can control the oxidation in that ultrafine grind because of the inherent heat generation in the process. And at the same time, the team at PV have been doing vat leaching or tank leaching, which is also a more controlled environment. And so if we do away with the leach pad and we put it into a more controlled flow sheet, it's the same cost, more or less, it's much more efficient, and our size of processing plants, both in DRC and in Mali, are what we require as far as processing capacity. So, we've got a perfect example -- proof of concept. So, the engineers from PV have just been up there to West Africa to have a look at our processing and we're now busy refining that test work. And then that will go toward a feasibility study. And so we're pretty sure that -- and, again, in the new team, we're agile. So, we don't go through these long phases of scoping, pre-feasibility. When you get the thing to work, we will leapfrog a step. And so we're pretty sure that we will bring that whole feasibility forward. We've got time because it's 2022 we need it by. Right, Mark? So, 2022. We've got time to get it done properly. And, with that, we've got a number of options on the tailings storage. Because, at PV, the storage is not just about tailings, it's about the potential asset drainage waste that you've got to impound. And we've got a number of options on that. And it's with that that we free up the foot print and can push back and coalesce the two pits and unlock a whole lot of resource ounces into reserve. So, it's a very -- and the capital costs are -- we haven't got to reviewing them but they're not going to be more than the current estimates for that project.

And then one further question. Just on Veladero, you're rebasing or you're discussing about a lower production for the next couple of years. I'm just wondering how that project or that mine can deal with the fixed cost of infrastructure that it has under a lower production setting. And can you give us some insight on how you're going to be able to rebase that operation?

Yes. The overhead and inefficiencies in that organization are enormous. Because, remember, it's a legacy -- it's a carryover from the Pascua-Lama project and no one rightsized it. Mark's already doing that. There's a whole lot of opportunity to reduce. And already it's an efficient -- if you look at it on a dollars per tonne process, it's a low-cost producer and can be substantially lower.

Greg Barnes from TD. Mark, in your initial views of Nevada, and I know there was some talk earlier, before you took over, about adding processing capacity in Nevada, optimizing the throughput you can do through various roasters. What is your view or your initial view there?

So, my original view is that's appropriate and people have been talking about it for years and never done anything. So, we have made progress in that the TNA, the toll treating agreement, with Twin Creeks for Turquoise Ridge is a first step in cooperation. And, as you know, Newmont's got a 25% share in Turquoise Ridge. And there's a good demonstration of how you can do it and there's more opportunity to improve on that because of the ability to unlock more ounces because you now have joint ownership in an asset like that. When you look at Barrick's forecast going forward, we own the most efficient roaster on this planet in gold mining down in Goldstrike. And so that is important. It's size, it just got better, it's so well done, it's so well run. So, when you look at our forecast, we have capacity in that roaster going forward and we also have capacity in our autoclaves, the fire sulfate conversion, and we're looking at reversing that to a standard autoclave to be able to treat material. And then we are progressing with the permitting process for a roaster in the Cortez region. And, again, we're going to be fully supporting Rob's team in expanding -- and we've got some very exciting exploration opportunities in that area. But at this stage, our current processing facilities are adequate for the reserves and resources that we've got. The one that we can work harder on is the Turquoise Ridge/Twin Creeks partnership.

So, if you're reversing the fire sulfate autoclave, does that mean you're not --

We believe the acid leach ore works really well in that autoclave. The alkaline-rich feed doesn't. And so we've got a lot of work that we're doing right now with our metallurgist and the process team at Goldstrike to see how do we get -- because we're not achieving the pilot test work recoveries when we put in alkaline-rich ore. So, again, the whole process is can we do that? And so we're doing a lot of test work on that. Because, very soon, we start running out of the more acidic material and then one of the options is to go back to a traditional autoclave with a CIL circuit on it, which is there and we can retrofit it.

So, you wouldn't be processing the lower grade stockpiles that are there now?

No. There's some stockpiles we'll process and some that it doesn't make sense to process them through a flow sheet that delivers less than 50% recovery. If we can get it above 50%, it works. You want to talk?

So, it's a whole piece of work to say what are your options so you can still process those stockpiles. Because the alternative is they go through the roaster but you just prioritize it.

But you don't want to do that because you displace very high-grade ore.

Exactly. You have to look at the alternatives and one of them is to try and get the carbon out before you're putting it through the autoclave. There are lots of different alternatives.

Gold Corp. has been doing that, floating the carbon off in front and reducing it. So, that's one of the options. So, there's a whole study group going on, looking at our reserves. And then that's going back to the reserve driven or the geology driven -- all our ore bodies, all our resource inventory, and our various facilities and whether they are appropriate in the longer term to be able to process those reserves. So, we're looking at that right now. And that will be part of our revised longer term plan.

Mark. Steve Butler, GMP. Goldrush and Fourmile, you talked about it being only half a kilometer to close the gap in the resource there. So, Rob's team has been working hard on drilling this thing off like crazy, in a Goldrush sense. So, is there a project update we should expect this year or in the next year for this feasibility study or similar update?

So, we will continue to update but I really want to get away from trying to promise you answers. I mean, how many answers would you like? I can promise you they're there today. This is about getting a full feasibility level job done. And the first thing is we're busy with permitting. We're busy with infrastructure. We're relooking at the whole infrastructure. We need to get some more test work done. And the Fourmile -- so, this is a classic disseminated alteration on the Goldrush side and then you go into this very silicified, classic carbon break with these eye-watering grades. But, as you know, that style, it's not continuous. So, you'll get lodes of very high-grade mineralization. But the exciting thing is the competency of that rock will allow for bulk mining, underground bulk mining, which is really exciting. Now, that's just following the recent success in the Fourmile side. And so, right now, the team is relooking at that, relooking at our permitting process. What are the gaps and, if there are any, because it's been fairly comprehensively done, and we're really looking at the ore handling strategy. There was going to be rails into the declines. We're a little more modern than that so we'll do the trade-offs on other ore-handling opportunities. And then how do we manage it at the decline head and how we tie it into the Goldstrike infrastructure? And then also access. Because now you've got a bigger target, how do you get into Fourmile without having to bottleneck it through the declines? So, there's a lot of work to be done but it's not complicated work. We've got all the skills and, as I say, we've got a dedicated manager of that project. And, again, that's something that, through this year, I'm pretty sure you'll see a much more optimized plan for both Goldrush and Fourmile and I'm convinced we'll prove that there's a geological connection between the two.

It's Kerry Smith. Graham, were all the redundancy costs expensed in Q4 or should we expect some more costs are going to run through 2019 numbers?

Substantially, all of those came through in Quarter 4. There may be some smaller amounts coming through in the first quarter but the bulk was done in 2018.

Okay. And there's been some sensitivity around tailings dams recently with what's happening in Brazil. PV is going to have quite a large dam at the end of the day. What have you done there to prep? Puerto Viejo will have quite a large dam. What have you done there to sort of satisfy yourself that there's not any issues that could crop up over the course of time? It's quite a wet environment?

So, I'm paranoid about tailings. As you know, I come from Harmony Gold Mine. You're old enough to remember that. We have done a full audit of our tailings dams and we're currently -- and, again, Barrick's and Randgold's conventions for management of tailings dams are aligned. And unlike a lot of the industry, we completely believe in external oversight in both companies. And Barrick has an extra independent check in their management of their tailings dam in that they have an oversight committee of two experts and those experts are experts in that field and one of the criteria is that they have to have never had any ties to Barrick in any way. And so we will reinforce that but we have responsible engineers for each tailings dam that are internal. We have a corporate review on the tailings dam and we have corporate experts that are responsible for that. We have an external review with an external-appointed engineer. And we have our standards, particularly on upstream dams, making sure that we manage and understand the phreatic pressure and bore hill controls. We look at the plume and the actual integrity of the barriers and impoundment walls. And what we have done just recently is that we've rolled that our or we are in the process of rolling that out through our joint venture partners to encourage them to ensure that they comply with our policies. Greg, do you want to comment?

The Dominican government also has a very active administration and regulatory body that administers dams and tailings dams, in particular. So, they do regular checks there on a monthly basis and make sure that we're up to the standards at PV, particularly.

Okay. Thank you.

And, I think, for us, in West Africa, you've got a negative water balance so that's much easier to manage. But we have a lot of experience in positive water balances, which a lot of legacy Barrick assets are in positive water balance areas again. And so that requires a completely different level of oversight than when you've got a negative water balance.

I just have a quick follow-up question for Graham, just on the accounting. You still have to put the purchase price accounting for the transaction, about $3.2 billion. That's coming, I think, in Q1. So, the guidance, the depreciation is without it. So, can we assume that a lot of it will get allocated to property and plant and equipment? Thank you.

Yes. So, as you point out, we are doing that work at the moment and we expect to be able to conclude it in this first quarter, albeit that we have the whole year to complete that from an IRS point of view. Until it works down, I can't really give you that clarity. But, in all likelihood, there will be a split between assets and goodwill. But we're busy with that work and we'll let you know when it's done.

All right. So, thank you, everyone, for coming. Again, hopefully, you found it helpful. We are going to make this a regular affair. We also have planned to take these results presentations back to the operations, at least as I did in Randgold, once a year or so. But I would also encourage you, please, if you've got any comments, advice, suggestions, let our team know and we'll work -- the idea is to give you what you need to be able to ensure that our owners of this company are properly informed. So, thanks for coming. And I assume there's -- normally, we offer a glass of wine or something. What are we doing this time? Coffee and tea. Sorry about that. We'll work on that. All right. Thanks for coming, everyone. Thanks.

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