Barrick Mining Corporation (B) Q3 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick 2019 Third Quarter Results Conference Call. During the presentation, all participants are in listening-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder this conference call is being recorded and a replay will be available on Barrick's website later today, November 6, 2019. You will now be connected to the conference room with the presentation will begin momentarily. You may hear silence until it begins.

Good morning, ladies and gentlemen to everyone particularly who have dialed in here today and I will pose a very good afternoon to all of you who made the effort to come out here. I did explain when we announced the potential merger between Randgold and Barrick that we would come back to London and present to you our progress and you'll be pleased to know that yesterday we had the formal Barrick board meeting here in London as well. So we did keep our word. And so it's now just over 10 months since the merger between Barrick and Randgold Resources went live. That stated aim of the new Barrick was to create the world's most valued mining company and in the process to set an example of a modern mining business for an industry in need of invigoration and there is no better time to talk about this because really everyone does morning but it's an absolute core component of everyday life and we as miners have a big challenge to get accepted by the communities and the investment, the investors as well. And we at Barrick are absolutely committed to make sure that we change the way we do business on a day-to-day basis. It's very pleasing today as we report on our results for the first quarter or the third quarter since the merger, to share with you the progress that we've made and where we’re going to achieve exactly that goal. Before we go any further, please take note of the cautionary notice which is also on our website for those slow readers or some anybody who wants to sort of delve deeper into the statement. This is our scorecard that we shared with the world back in on the 23rd of September 2018, when we announced the merger. As you can see, when you compare what we said we would do with what we have done, every box has been ticked. Most significantly, we've re-engineered Barrick’s corporate structure, and strengthened every team. On the Nevada joint venture in line with our focus on Tier 1 and strategic assets, reevaluated and optimized our orebodies by getting back to the geological basics and improved our operational performance to generate strong cash flows for funding further investment growth and returns to shareholders. Health and safety of our workers is a key concern in all that we do and its management is delivering positive results. Loss time injuries have decreased for the third quarter in a row. The slight increase in total engines injury frequency rate that you see on the slide is a key leading indicator which results from our increased focus on recording every single safety incident, no matter how small it is. The ultimate aim of course is to achieve a zero injury work environment. Like safety, care for the environment and the community is a core component of Barrick’s business philosophy, and certainly for us, not just another governance exercise. I've often spoken about the need for mining companies to earn a social license to operate. And this is becoming more pressing for us as miners as I indicated in my introduction. The recent worldwide extinction rebellion protests are a third demonstration that society at large is demanding fundamental changes from our industries. Although everyone wants our products, mining is particularly unloved. And if we are to survive in the longer-term, as I pointed out, we will have to align our practices with these expectations and that is our intention at Barrick. These are the highlights of our third quarter. And as you can see, they show that Barrick has become a very different company. Our operational performance has improved across the board, earnings have significantly exceeded the consensus, debt has been further reduced, such that we now boast one of the strongest balance sheets in the industry and the dividend has been increased by 25%. We’re well on track to end the year at the higher end of our production and lower end of our cost guidance ranges for 2019. When you get abroad, the results are measurable in the numbers driven by a positive contribution from Nevada Gold mines and with all our assets positioned to take advantage of the higher gold price, adjusted earnings per share increased by 67% quarter-on-quarter and 88% year-on-year. I should point out that in line with the appropriate content treatment for the recent formation of the Nevada joint venture, there has been some fair value adjustments that have impacted the net earnings as well as a notable write-up at Lumwana where improved plant availability, and significant cost reductions contributed to a $947 million increase in its value. The operating results reflect the progress we've made in driving improvements across the portfolio with the gold mines in lines with or ahead of their production, guidance and copper production increased by 15% from the second quarter, mainly due to record throughput and higher grades at Lumwana driven by the same fundamental and sustainable improvements that have enabled us to ratchet up its value. Turning now to the specific operations and starting in Nevada with Cortez, I must first start by paying tribute to the Nevada joint venture leadership. We have done an outstanding job in integrating large and complex operations into a single business in a very short time. Looking at these operations, Cortez achieved the top end of its target and when you look at these results, the apparent drop in production is due to the fact that the Nevada joint venture reduced Barrick’s interest in Cortez to 61.5% from 100%. Costs were contained despite the depletion of the Cortez Hills open pit as we guided at the beginning of the year, and the transition to a higher proportion of the double refractory underground ore. The Deep South project has completed its permitting process has now received its record of decision and is scheduled to start contributing to production next year. Production at Carlin, the former Newmont Goldcorp Mine which now also includes Barrick’s Goldstrike was in line with target. The combination of a lower cut-off grade step outs and the initial optimization of the underground mining operations is expected to add significant additional ounces to reserves at this complex. There's lots more to build on at Carlin with Brownfields potential around both mines including the greater level of underground extensions, and the prospect of a significant inventory increase in an under explored little balder basin prospect. Turquoise Ridge now combined with Twin Creeks has an integrated mining and post as an integrated mining and processing operation is a standout example of the benefits of the Nevada joint venture. Production was up 26% from the second quarter. The cost impact of lower grade open pit ore from Twin Creek was partially offset by more tons processed from Turquoise Ridge underground and increased throughput rates at the plant. The sinking Hoist for the third shaft project is on track for commissioning in the fourth quarter of this year. The shaft will significantly improve the ventilation and that is the big hold up in expanding the underground production at the moment, the efficiencies and synergies brought about from the combination of the two operations has already allowed the reduction in the cut-off grade as again we forecast. This is expected to increase reserves significantly, in fact by more than 1 million ounces. Phoenix and Long Canyon make up the full picture of the mines in the Nevada Gold mine portfolio albeit they are smaller contributors to the joint venture. At Phoenix the timing of copper sales impacted costs, while at Long Canyon, the mine had a strong performance with costs noticeably lower than our guidance and our review is underway to extend the life of mine with the Phase 2 expansion. At the time of announcing the Nevada Gold Mines joint venture, we indicated to the market rather controversially might add that the Nevada joint venture would deliver synergies to the value of $450 million to $500 million per year over the first five years of the full production of the project. And I'm pleased to say we're well on track to achieve that. These are the key projects and the synergy top line and so far, we have clipped the coupons for a total value of $311 million and we expect to get to our guidance by the beginning of next year, there are still more opportunities in addition to the synergies that we identified in the longer term and some of these would include particularly the boundaries that were sterilized between the two companies and then the big focus for us is about an million ounces of significant grades ore along the boundary between Carlin and Goldstrike. And in particular, the portions of the mines we refer to as Deep Post Tara and the Northstar Frontier boundary for those who know Nevada at all. Some of the key projects we are working on at Nevada Gold Mines include the Turquoise Ridge shaft that I've already referred to the Cortez Deep South project. Again, we've just received the record of decision, Robertson, Rita K, which is an underground block in Carlin, the level underground extensions, which we're very excited about, and the exploration potential across the portfolio, which includes as I referred to earlier, the Little Boulder Basin, where we've got two bore holes, legacy bore holes that are significant in the intersections. Nevada Gold Mines also has a future growth opportunity at the Goldrush complex, where twin exploration declines are being developed to improve access to the orebody and enable further drilling for resource conversion. Notably, we successfully submitted a plan of operations during the quarter to commence permitting for the project, and we expect approval for that project in two years time. This follows the successful receipt as I pointed out of the record of decision for the Deep South project in September of this year. Fourmile and Goldrush are now being treated as a single project. Although Fourmile has not yet been included in the Nevada Gold Mines joint venture. Drilling in the southern part of Fourmile has recently returned the best yet intercepts in fact in literally three quarters, we've had best intercepts in the Fourmile project. And the boundary between Goldrush and Fourmile is reduced to just 100 meters. And you'll see the intercept there, that FM19-46D has a significant intercept. Remanence of the original Goldstrike intercepts if some of you sort of more bleached hair. People will remember that make. And also about a kilometer to the north of the Fourmile resource, we announced at Denver, a new discovery borehole and that is very significant. You'll see it on the inset down on the bottom left of the screen. And we expect that we will continue to add to the resources and we are guiding to a significant increase in resources when we come out with annual reserve and resource statements next year. Moving north to Canada and to Hemlo, which as you would have seen from the recent press releases, is being re-engineered and refocused as a modern underground operation, like Barrick’s African mines. At the time of the Barrick Randgold merger, there was some debate about Hemlo’s viability, but the anticipated performance improvements are now expected to secure its future. In Latin America, Pueblo Viejo which lock the Nevada Gold Mines is a joint venture between Barrick and Newmont Goldcorp. It had a very good quarter with production trending to the top end of its guidance and costs down. The plant expansion project at Pueblo Viejo is one of Barrick’s most exciting growth prospects. The project is designed to improve throughput significantly allowing the mine to maintain annual gold production of some 800,000 ounces well beyond the next decade. The pre-feasibility study of the plant expansion project is scheduled for completion by the end of this year, and the combined feasibility study for the plant expansion and the new TSF site is forecast for next year. Pueblo Viejo is enormous resource base is in a class of its own and just able, just being able to demonstrate the viability of the expansion project and secure the permitting for the new TSF facility, we estimate will add an additional 11 million ounces of resources to its minable reserves with still more likely to come from the ongoing drilling programs at that project. The Dominican Republic is one of Barrick’s go to destinations and a dedicated exploration team is also building a portfolio of opportunities there outside the joint venture. Further south and then at in Argentina, Veladero was one of our biggest initial challenges on the closure of the transaction and the team there has done a really good job in driving down costs, improving efficiencies, addressing some mainly environmental legacy issues and rebuilding the relationships with the community, the province and the country. In conjunction with our partners at Shandong, we're working towards restoring that mine to its prior Tier 1 status. In the meantime, connecting Veladero to the cheaper power available from Pascua across the border in Chile will also reduce operating costs further, as well as reduce our carbon footprint materially. Staying in the region, we have identified lots of opportunities in and around Veladero but outside the current mine plan. Latest results indicate the potential to extend the mines life to the end of next decade. We're also relooking at the Pascua Lama project as well as advancing the Rojo Grande and our tourists targets along the highly perspective El Indio Belt. We now have dedicated exploration groups in Argentina, Peru and Chile all focused on evaluating our current portfolio which is not unsubstantial as well as securing more opportunities along the Andean trend. Moving now across the Pacific, and into Papua New Guinea, Porgera represents both an opportunity and a challenge in a different operating environment, in a very difficult operating environment, the mine increased gold production by 23% quarter-on-quarter on the back of higher throughput and slightly better grades. At the same time, Porgera has been negotiating with the government for a 20-year extension to its recently expired special mining license. Although our obligations are directly with the government, there are many interest groups in this process, not least of which are the local landowners and provincial government. So you can imagine, the environment is quite dynamic, and it's probably going to increase until we get final resolution on the terms of the renewal. Barrick’s new geological focus at Porgera has identified a multi-million ounce potential based on extensions to the known orebodies and associated structures. This has the potential to extend Porgera’s life of mine significantly. Across the Africa then where the Loulo-Gounkoto Complex delivered its usual solid performance, with gold production up 4% on the previous quarter. Loulo is currently in the process of commissioning the group's first major solar power plant, which will help to curb costs as well as to reduce its carbon footprint. This is in line with Barrick’s policy of switching to lower mission energy sources wherever it can. Brownfield exploration at Yalea and Gounkoto continue to replenish the asset base, ensuring that we will sustain the complex 10-year production plan. Across the border in Senegal, Barrick’s Massawa project is currently being permitted. The Mali Senegal border region, for those who are not aware already hosts a large number of gold mining operations with a district mineral inventory estimated at a plus six million ounces and it remains highly prospective and we continue to hold a big position in that region and our geologists are always on the hunt for that next world class discovery. Having delivered Massawa, our geologists focus has shifted to the Bambadji big joint venture. Three very interesting corridors have already been defined there and some significant targets have been scheduled for drilling when the dry season starts. Barrick’s new emphasis on exploration is expanding its African footprint. From its original base in West Africa, Randgold moved into the DRC with Kibali and following the Acacia, Barrick is now expanding its portfolio across the Congolese and Tanzanian cratons which we believe hold the potential for more Tier 1 discoveries. Operationally Kibali is trending well and like Loulo has a solid mine plan for producing plus 600,000 ounces per year for at least 10 years. The lower income for the quarter, I would just point out on the slide is attributable to the higher depreciation following the merger fair value adjustments is not really particular for the actual performance this last quarter. As at Loulo, Brownfields exploration continues to deliver good results identifying multiple open pit opportunities along the KZ zone as well as extending the underground reserve base. We are also working on a project to evaluate the potential for more underground orebodies similar to the current KZD underground orebodies that made Kibali the giant it is today. Tanzania's Lake Victoria Gold district has long been an outside and the roll up of Acacia has opened up the country for us. You are familiar with the Acacia story, and I don't want to dwell on it again. But it would be remiss of me not to say that the way the business and operations were previously managed left a lot to be desired. After agreeing with a government on a settlement of its disputes with the company, our focus now is on fixing the operations and managing out the legacy liabilities. I believe the agreement we reached with the Tanzanian government is a groundbreaking model for partnerships between mining companies and their hosts in Africa at a time when the industry is facing a rising tide of resource nationalization. It provides for the 50:50 sharing of the economic benefits created by our operations in Tanzania, which will be managed by a company jointly owned by the government in a fully transparent manner known as Twiga, the Swahili name for Tanzania’s national animal, the Giraffe, this company recently had its inaugural meeting, which was attended by all parties. We expect the transaction to formally close during this current quarter. Operationally, Tanzania struggled during the quarter with the suspension of mining operations at North Mara for most of the quarter and the results reflect this disruption. As you know, operations resumed near the end of quarter three, and we expect a more normal quarter during full quarter four. This is a quick look at the rest of our gold mines which did not -- did all did reasonably well with the exception of Kalgoorlie. As previously highlighted, a sales process for Kalgoorlie has been initiated in line with our policy, of disposing of non-core assets which we expect to advance in quarter four. We continue to expect to realize in excess of $1.5 billion in value from our asset disposals by the end of next year. As I noted earlier, Lumwana was the standout achiever in our copper portfolio, achieving record throughput and increasing production by 33% quarter-on-quarter. Sales were impacted at Lumwana by the refurbishment of one of the smelters that processes the mines concentrate and we expect the situation to be resolved by the end of this year. With the integration of geology and grade control into our mine planning and first bash had optimized life of mine plans as promised carries a five-year outlook for the group. We have transferred responsibility for orebody, ore reserve and resource modeling, as well as mine planning back to the operations as we said we would at the time of the merger. We are also working on a 10-year plan to service the group's foundation for capital allocation, budgeting and forecasting. This will be supported by the rollout of new information management systems designed to drive real time decision making through the availability of real time data. We expect to share the 10-year production plan with the market in our 2019 annual report next year. As you can see here, the group five-year plan is very consistent with our previous five-year guidance of 5.1 to 5.6 million ounces, showing a steady and slightly increasing production profile with costs declining over the period. Looking at the underlying regions in more detail, the North American region now includes our interests in the newly formed Nevada Gold Mine joint venture, which has had a significant impact on the group's profile, higher cost assets contributed from Newmont combined with the significant synergies we have identified and its effect on lowering cut off grades have all impacted the blended cost profile of the business. As I mentioned earlier, this is our very first effort at putting this complex business together. So I have no doubt the team will further refine this profile as we go forward. The LATAM and Asia-Pacific profile includes our first estimates for the expansion of Pueblo Viejo in Dominican Republic, which has had a significant impact on capital and all-in sustaining costs albeit the real benefits from this project will materialize beyond the five-year window. We’re also making further investments at our Veladero mine to access perspective ground as we strive to return this asset back to Tier 1 status. And in Africa and the Middle East region, the profile remains relatively consistent with previous guidance given with the exception of course of Tanzania, where we have included our bid model as the base case, you will remember the argument we had with Acacia and we presented out that model. In particular, this includes, as of today, about $200 million of capital for Bali in 2020, which in all reality is likely to be smoothed over this next year and the year thereafter, and is still dependent on the feasibility work we are undertaking as we aim at the restart of underground operations by quarter four, 2020. The copper profile shows the improvement that the improvements that are ongoing and the improvement as well in efficiencies and cost reduction initiatives at Lumwana specifically. And really, this has kept our production profile relatively steady and certainly a viable business even at these lower copper process that we're experiencing at the moment. I started with our scorecard for the nine months to September and pointed out that we have ticked all the boxes. And so here, is our to do list going forward and I have no doubt that our team will be able to deliver on these and again, this time next year, I'll be taking those boxes as well. And I'm sure we'll find a few more to add as we go through this year and into next year. I end this presentation as usual with a look at how Barrick stacks up in the market against the gold equities and the gold price. As you can see from the chart, we have been clear outperformers versus both the GDX and the gold price since the announcement of the value creating merger with Randgold. While much has been achieved, there is no doubt in my mind, that much remains to be done. I hope today's presentation ladies and gentlemen has given you an insight into the many internal and external opportunities for sustainable profit and profitable growth that are within our reach at Barrick, I thank you for your attention. And we'll be happy to take questions. We’ve actually got quite a big contingent of Barrick people in the audience. Sure, we can take pretty much deal with any questions you could come up with. We’re going to start with the call people first and then we'll come into back to people here in London.

We will now begin the question-and-answer session along the phone. [Operator Instructions] Our first question comes from Chris Terry of Deutsche Bank.

Hi, Mark and team thanks for taking my questions. I have a few, just wanted if you could start with the five-year guidance. If you could make some comments on the conservatism or what you've actually baked into it for example, the Nevada synergies that you still going through and made great progress on and just wanted whether you're putting the full number in for that, for example, just other areas of improvement and whether you've just at this point put in projects that are fully approved just getting an idea given you've been towards the top end in 2019 of that guidance, if it’s potentially conservative or mid-case? Thanks.

So, as you know, I'm never one who sort of under province, under promises to over deliver. So this is our best business case based on what we believe we can deliver. There are opportunities, some of them that are pointing to your, for instance, how we can bring PV expansion on and whether we can improve efficiencies but as we stand this is our first dash at a scoping study. We've got the pre-fees running now with the processing plant. We haven't quite finalized the detail in the flow sheet. So there's, I would say there's some option upside opportunity there. Of course, there's ongoing drilling between the two current pits. And that has some opportunity. But as far as our current reserves and our current orebody models are, we've included all that, Veladero has some opportunities that we don't, we are not, we don't have sort of visibility on yet because there's still quite a bit of drilling to be done to be able to lift the life of mine. We know that it looks very prospective, but again, that will come out in that 10-year plan rather than the current five year plan. Nevada, we have baked in the synergies that we can see and that we've identified, we've got no doubt that there will be improvements. Those improvements are largely expected to come from the continued optimization of our orebodies. And also there is we need to do some work on the call and processing facilities in particular the Mill 6 roaster, which at the moment is quite expensive, its operating costs are high as a single bed roaster and we are going to be expanding that because it's an important facility for Goldrush and will be improving both its ability to scrub Mercury out of the ore and also to take a bigger throughput. So it'll drop the cost. Goldstrike Roasters one of the most efficient roasters on this planet, when it comes to running at just over $20 an ounce and $20 a ton, sorry, John corrected me there. And Carlin is running in Upper 30s. So we've got some opportunity in that process. And then and then it's just what we can find. And I'd remind you, why do we do this and there is no other company that does this. And we did it in Randgold is that this is, it’s always fascinated me that the mining industry allocates capital on the long-term tells you about the development and the life of mines and they will give you the detail. And when you have a detailed plan, you can see the road, the speed bumps, you can identify the opportunities. And we've always shared that with our stakeholders in a transparent manner and it holds us accountable to deliver against that. And if you go back in the 23 years of Randgold, we delivered long-term deliverables even out to our first big dividends. We said we will do it on this at the end of that particular year, we did and so it's an important part of being a modern company is to tell people where you are going and so can we improve on that? I’m confident we will exactly what it is that we can improve on that the spread of opportunities that we will disclose as and when we bank them.

Thanks, thanks Mark for the color. Just in terms of the balance sheet, you're obviously now below $3.5 billion net debt. Just wondering if you could comment a little bit on potential use of proceeds from the $1.5 billion of asset sales, you flagged, you obviously increased the dividend, a little bit on this quarter versus last quarter. So just wondering, where you are thinking about the use of use of proceeds? Thanks.

So is your definition of a little of that is 25%. I wonder what you think is a lot. So we've got many opportunities to create value for our stakeholders. We said we were doing this because we saw the value in being the standout gold company with a dominant ownership of Tier 1 assets. And as you've seen, almost surprisingly, it's now three quarters into our project and we've been able to wind down the debt, increase the cash positions, we rolled over revolver facility and dropped it to $3 billion because we're comfortable about where we are, we came out with an early dividend because again as you pointed out, and when you look at our five-year plan, what's clear is there is some investment we need to make in 2022 to sort of tidy up the organization. But then if you look at the five-year plan, the costs are coming down, capitals coming down, we've got a real focus on sustaining capital. And of course, when costs come down and capital comes down, cash flows go up. So that's the whole objective of doing business. What we do with those proceeds, we have again something that I really believe in is that in mining, you should deliver returns to your shareholders, and in particular, the best way is dividends. There are other mechanisms that we can consider and we'll consider like buying back shares as we change our asset portfolio, sort of color, but at the same time, I believe that we’re going to replace some of the assets that we're going to sell with better looking at it, not that the ones we’re selling are bad. It just don’t fit to our specific investment focus. So, and we have not very much depleted our debt, our short-term debt payoff. So we got a little bit more to do but not much and the remaining debt in the organization is long dated debt, it’s very expensive to settle, we will look at ways to do that on an opportunistic basis. But, that means our cash flow build up and, and Randgold moved to a position where it sought to have a available cash of a certain amount and then it would pay the rest out. So that's, that's something we look forward to being able to debate with our board going forward. Right now we are cleaning up the balance sheet and, and we've done it consecutively every quarter, we expect to continue to attend to that. And dividends we say there's going to be a drop of this business and again, we're mindful we're not one-full special dividends or fancy ways to return cash to shareholders, we will do it in a structured way. We've debated share buybacks many times in my career with my respective board colleagues that I'm sure that debate will continue to be had going forward. The positive messages, we're going to have all those debates because we generate cash, and that is good debate to have.

Thanks. Thanks Mark. Just the last one for me. What's the timing you’re thinking for the potential inclusion of Fourmile into the JV? Thanks, that's it.

Now, that's we want to thank that properly right now with that new discovery hallway at a kilometer from any of our resource estimates, it really does open that opportunity substantially and we've got lot of comfort that Goldrush is at a stage where it's a matter of process to bank it and then it's about access to the Fourmile deposit whether we do it via Goldrush infrastructure, we bring -- we come in with an opportunity to come in from an old pits on the other side of the trend is a couple of things that we still want to do. And I think, first of all, let's build a portfolio. We've only got couple of hundred thousand ounces, they're not 250,000, 700,000 ounces. So we’re expecting a substantial increase in inventory with our annual declarations early next year. But I would say it's a couple of years before we are comfortable that we've got the critical mass to warrant moving that to a feasibility stage project, what I would add, and it's something that we've had great debates over is Rod is Head of Projects and Evaluation is starting to take a much bigger focus on this project now because it's reasonably well framed. And so a lot of process rather than exploration endeavor. And we've encouraged Rod and his I mean Rob Krcmarov and his team to move away and find the next one, and not get bogged down by ongoing drilling in this project. Rod do you want to add anything to that?

Yes, sorry. I'll just repeat that because microphones are on. That based on that we reported this quarter. Some of the best, obviously the best result is. So there's opportunity Western side as well. And within Fourmile as well, Western most age of that of that current Fourmile resources very much open, but a bunch of drilling to be done coming next 12 months to actually thought how big that Fourmile current resources.

So just to, for those yes and I don’t know if you can see my pointer, but what Rod's talking about is that this trend, which is there is the Greater Goldrush Fourmile trend, what we seeing is on the Western side, that's the side there tends to be a plunge to the orebody there and there and there and so on that in Goldrush. And so we haven't drilled that Western edge of the mineralization and we’re expecting to build extended mineralization to the ways. So we've still got quite a bit of work to do to close off those, those trends. The big thing for me is there's more to find. Yes, we've got large dialed trend which is sub-parallel to the Goldrush, Fourmile trend to the west of the trend as you see on that slide, and then we've got another couple of outlier intersections, positive intersections to the East. And so are they sub-parallel trends to this main mineralized trend going forward.

Our next question comes from Matthew Murphy of Barclays.

Hi, I'm just chewing through some of the five-year guidance here and looking at North America, the Turquoise Ridge production looks fairly steady through 2024 despite that third shaft coming on, so I guess should we be reading from that that cut-off grades are going to get dropped further in the 2022, 2023 timeframe?

Absolutely. So that's I mean, that's one of our big issues is that when we took over Barrick, Barrick was absolutely obsessed with high grading its orebodies. And it was appropriate for that phase in its last because it was dealing with some massive debts coming from $12 billion of debt. But we said at the time, we would reoptimize the orebody and allow the orebodies to manage the life of mine. And that's critical, because when you have Tier 1 assets, the two components of value that you have for your shareholders. One is the ability, the margin, and the gold price. The other is the cyclicality of the gold industry. And with the Tier 1 asset plus 10 years, you get that cycle and so you don't want to go over mine your orebody, you want to optimize it for the long-term. And that's what we've done and we will continue to do, I mean Turquoise Ridge has got significant upside opportunity in the Brownfields extensions of the known reserves. Remember the reserves are significant at Turquoise Ridge, and we've still got more, we've got the older extensions, the open pit opportunities and the trade-off of whether we go underground or come back and take a bigger lower grade cut, but right now we've brought the cut-off grades down from over 12 grams a ton and our target is to get down to about six and a half is the target. You want to add to that?

Anything I will add is Turquoise Ridge is very much working progress. We've just obviously debottlenecked stretching point of view, right TMA point of view. So that's out of the way in that pushing obviously the plant you would have seen the initial increases coming through this quarter. But obviously that's working progress, we got to see how, how hard we can push that front with the various fields. And then unison to that as Mark was saying, How big is the orebody and then reoptimize the hole and open pit et cetera to fill that plant with the best grade we can with the long-term view. So there is a lot of work still to come.

Got you, okay. And then just as it relates to that, the near-term synergy shows you've already done $73 million executed or advancing there. Do you see upside to that near-term synergy number?

Of course, we do. So one of them is, is as Rod says, the plant expansion and again, one would just bear in mind, we've just changed the whole management structure at Turquoise Ridge, in fact for the Barrick Group, I think the only two people in senior management and the operations that were there when we arrived, the rest is all new. And we've just changed the leadership on the process implemented to increase and we've jacked up the throughput. So there's a lot more work to do on efficiencies. I think John and his team have got really shown that just even in the approach the standard operating procedures when it comes to Autoclave is how we manage the fuel in the Autoclaves and the temperature and the ability to treat higher energies, higher fuel, we've got a lot of work to do right across the group but Turquoise Ridge in particular. John, do you want to add something to that? You got to push the button over there, it will go red.

Okay, got it. Yes, I think the first phase is Twin Creeks was really just raising the densities and the feet to the autoclave to give us an additional 15% to 20% but we're trialing that now. It's going well. It's really a trade-off slight trade-off against recovery. But the key is maximizing the ounce production and the cost per ounce and that's what we're chasing there.

And Matt, we've also got a lot of work to do and right now we’re constrained through the environment now that's why the shaft is so critical because it changes our entire ventilation protocol. And that will and in the meantime, we are working hard at fully automating the mining in Turquoise Ridge, its geo-tech conditions are challenging, so it’s self miners, which we've got a second one in the steps now is important. We have already got back full process fully automated and will that's our focus and of course electric underground vehicles will also help in managing the environment. We got a lot of stuff to do to be able to pick-up the efficiencies there. But this is based on what we can do today.

Interesting, okay. Great, thank you.

Our next question comes from Tanya Jakusconek of Scotiabank.

Great, good afternoon, everybody. And thanks for taking my question. I have two questions. The first one that has to do with the five-year guidance, just a bit more clarity. I know you have some footnotes at the end of the presentation but just wanted to ask for is Long Canyon Phase 2 included in your forecasts?

No.

Right and then maybe Mark why has something changed that at Massawa that you've included in to your forecast such, I was under the impression it didn't meet your hurdle rate? Maybe something's changed there.

No, Massawa, if it was in Randgold, we would have developed it, it is busy we are, we've got a business plan for it, we are applying for the permits and we will deal with it as and when we have secured the permits. Graham wants to say something.

Well I just want to say that 1,200 which is the goal line that we use, investment decisions now it does meet us.

Okay.

Okay. So you have moved, I thought we were still at $1,000 hurdle rate of 20%. So it has been moved to $1200?

You clearly haven't read the footnotes.

Okay, well, I think I did that. But maybe just coming back to Kibali and I think Mark you mentioned plus 600,000 ounces over the next 10 years from that asset and just a little bit more clarity, is some of that coming from the open pit additional open pit material from the drilling that you've been encountering lately?

So we've got a whole lot of new opportunities, we have got the new, the pit we have got and it will change as we go, Cumba, Gorumbwa is a pit that’s already in the mine plan which is open pit, we've got a number of targets, we are evaluating, as I said in the presentation along the KZ zone. There's a prospect of a Super Pit and joining this Sessenge and KCD pits. So but right now what that plan entails is only the reserves, we haven't added resources or soon to be discovered ounces, Simon?

Okay, and then just Loulo Tongon also?

Just wait, Simon is going to?

Okay.

10 year mine life profile of open cast runs to be entire through the 10-year profile.

So that Simon says the 10-year plan has open cast material for the entire 10 years.

Okay, I think it was a bit different than that.

And Tanya, we have got visibility of some significant millions of ounces of potential resources that have every reason for us to consider them to be converted to reserves both at Loulo-Gounkoto and at Kibali and I would point out that that is where we want to get the full group to. That's where we’re going, these are legacy Randgold assets. They have a rolling 10-year plan and that's where our objective is for the rest of the group.

Okay, and similarly with Loulo-Gounkoto a bit longer on the Gounkoto side?

The Gounkoto there is two things, one is the pit has produced more ounces than our original feasibility are the point I would always make on behalf of our team is our feasibility studies have all been delivered against and some. And so the Gounkoto pit is certainly going to beat its plan as original Super Pit plan. And then we've got a new underground section at Gounkoto. So another phase of investments for Gounkoto and again, that 10-year plan doesn't include every all the potential that we see in extending the high grade zone of Yalea which we refer to in today's results, which again has delivered some significant step-out results. And so and we've still got Loulo 3 that we have got a lot of work to do and so we’re not short of potential in the Loulo-Gounkoto district.

Okay, and then maybe just on the copper guidance, you have the chloride leach in for Zaldivar in that plant. Can you remind me Graham, what the capital is for that?

Yes, so the approximate amount is about $170 million.

Okay.

And we haven't finished that feasibility study, Tanya we’re busy with it.

Yes, okay. And then maybe just my second question is actually for both Rob or Rod, it’s got to do with the reserves and resources that are coming out and I guess it's February. And I think you had talked about doing reserves at 1200 and resources at 1500. And I think Mark, you've talked a lot also on the call about areas where you see reserves increasing and resource increasing. So I wanted to circle back with Rob and Rod on couple of these assets. I think Leeville, I think you said there's multi-ounce potential there. Will that be in the resource category?

Yes, in Leeville, Tanya we will still take some time to get into resource but there's a lot of inventory potentially that will be coming. Just looking at sort of reserves Goldstrike Underground and the Carlin Underground mine in total will more than replenish depletion. Kibali we had mentioned is going to do well, Loulo-Gounkoto is doing pretty well. So those are obviously some of the key assets.

Veladero will, PV will?

Yes, PV not yet until the feasibility comes there is a lot of potential there sitting outside reserve and resource and just waiting for that feasibility to come but that won't come this year. Yes, there is some good news. Obviously from a Barrick perspective, there will be increases because of acquisitions and merger with Randgold, that are coming through the JV helps us in Nevada obviously. There's quite a big uptick there in ounces coming through in that JV of that 61%, but more.

And Turquoise Ridge, Rod, I think you're going to be changing the cutoff grade there. So there's multi-million ounces adding to reserve there?

Yes, we will be obviously we're going from 75 down to 61 at Turquoise Ridge in particular, but it's the whole complex that you're looking at, and you're obviously dropping the cut-off immediately because of that TMA is out of it, it increases, it increases ounces.

So that's the cut-off grade if you look do the math, it's about north of a million ounces that it adds and you look at the depletion for that asset even with the 61%. The math said it should be better. I think Tania one thing I would point out to you is, we have used 1200 on estimating our life of mines, we will be using 1200 and is 1200 long-term goal was flat and 15% IRR sort of focus. On PV, you need to know that the conversion Rod refers to is from measured and indicated, so these ounces are there and the economic at 1200, all we need is to prove that we can put the tailings somewhere and they become reserves. So it's important for you to appreciate that there's no extra drilling on the additional 11 million ounces, we refer to in the report is no extra drilling to be able to convert that into reserves, it really is just the permitting of the TSF.

Yes, but we’re not expecting that at year-end, I think Rob said that.

As Rob said and we have said it is through the next year.

The only other thing Tanya I would add is that 1200 moving from 1000 to 1200, I mean really only affecting the legacy Randgold assets, and both of those orebodies, so the Loulo-Gounkoto orebodies and the Kibali orebody is very geologically constrained. So it's actually these increases we’re talking about are coming from Kibali are not driven by that $200 increase. They are real actual orebody extensions that we're bringing in. We've actually brought in very little of that adjustment.

Okay, I'll leave someone else to ask question. Thanks a lot, guys.

Our next question comes from Anita Soni of CIBC.

Good morning, guys. My question is a little bit more high level, could you give me a sort of a breakout in 2020 and 2021, what the difference between the sustaining and the project capital expenditure is?

Good, but I won’t.

But that won’t help me modeling. But I will move to my next question, can you highlight to me then the major drivers for the difference between the current sustaining or total capital expenditures this year at 1.4 to 1.7. And then you're moving up towards like a $1.9 billion or $2 billion for the next couple of years. What are the pinpoint three good things?

It’s just the next year 2020. And you can see it on the chart. So as I say to you, $200 million on Kibali which is quite sort of variable at the moment is that's what we used in our bid model and we don't have the ability to share to you in any detail that'll come with the feasibility study. We've got the additional capital and PV. Again, that's a long-term capital commitment. And there is some extra capital in Loulo-Gounkoto on developments. And the rest is pretty much as per the shared job is a bit more capital in Veladero as well.

All right, so you just…

I’m sorry.

Just go ahead.

You said like how much do you said the capital was?

I’m looking at this chart, and I'm like, maybe my ruler is incorrect, or I need better glasses. But the blue line you have here basically shows that it sort of pretty flat from 2020 to 2021 for the total capital number at $2 billion.

As Mark says, a lot of that is to do with the investment that's going in for the development of Veladero, for the development of PV, extra capital at Loulo to ensure that we've got a 10-year plan there. So a lot of this capital is really as Mark mentioned in his speech going to give us benefits in a 10 year plan, five-year plan, but of course we are working towards a long-term business here.

And I think Anita just to soften Graham’s undiplomatic response to the split in sustaining and capital is that it's an absolute obsession of mine to bring the sustaining capital down and we've got a lot of focus in that part of our business and once we get granularity on that, we will start sharing it with you.

Thank you very much.

Our next question comes from Greg Barnes of TD Securities.

Thank you, Mark. Given the free cash flow this company should generate and I know we debated about the dividends in the past but do you see a model where Barrick could commit to doing something like the major diversified do, which is paying out 30% to 50% of net profits on an ongoing basis as a dividend?

Greg, all I can say is I will refer you back to our Randgold business, we paid 13 years of increasing dividends on the back of a long-term plan, despite what the gold price did. It went up and down not necessarily in that order through that period. So I’m more of the view that in any business there's a sort of requirement of cash reserves to ensure that you can deliver the business and the one thing, I've been in this industry longer than most people on this call or in this room. And the one thing you never want to be, is beholding on the market for money. And so that's our business. It's a long-term business, everyone says it, but very few people manage their business on a long-term basis we do and so we will, as a gold business, if you, our job is to give our owners maximum exposure to the gold price, which we and I have done so in my entire career, and I expect to be able to continue to do that. So, we have no doubt that we can deliver that five-year plan and the 10-year plan that we’re working on and the life of mine plan at any conceivable gold price without having to beg any money from anyone. And I have no intention of putting that strength at risk. So we've seen through my career as you have Greg, peoples trying to link dividends to gold price, dividends to this, everyone has a fad. My job is to convert reserves into cash flow, make sure we've got enough to be able to invest in our own future and give the rest to our shareholders and a substantial part of that to stakeholders like host countries in the form of profits tax.

Great, thanks Mark.

Our next question comes from Andrew Kaip of BMO.

Hey good morning, gentlemen, and congratulations on a good quarter. I've got just three quick questions. One of them is just looking at the Nevada Gold Mine near-term synergies, it looks like you've reclassified buckets between Turquoise Ridge and regional on site based indirects, wondering if you can just confirm that?

Yes, Andrew, let me answer that first. If you go back to our presentation on our website for the Nevada analyst visit, you would have seen that we shifted the shape of the pie a little bit, and we will continue to do that, so there's some, there's some swings and roundabouts in this and that's what we're effectively doing. So what you’re observing is correct.

Okay, thanks. And then look, I'm wondering if somebody can help me understand the scope of the metallurgical test work that's being done at Pueblo Viejo, I noticed in the discussion, you're also you're starting to look at flash oxidation. And I'm just wondering what the opportunities, and the risks are relative to fine grinding and floatation as a means to expand the operation?

So I think we've gone past that. And, and it's not flash oxidation, it's using flash vessels to cool them and allow the autoclave to process higher energy feed. So the original if you remember before I pass it on to the experts, the original flow sheet was a combination of floatation and then partial leach up oxidation using water in a heap. And then it was when John got there, we looked at vessel oxidation, so floatation more floatation, floating most of the feet apart from the high grade fleet and then ultra fine grinding it and then with oxygen doing partial oxidation of the sulfides and vessels. This way is a much more effective way, it's proven technology in the platinum industry. So it's not new technology at all. It's just hasn't been applied in the golden industry because the gold industry doesn't have lots of ore with piles of sulfide. So how did I do John?

Yes, that is pretty good, it is pretty good. Yes, that is exactly as we have gone down the route of testing, the ultra fine grind in the tank oxidation where we get about 40% of the sulfide oxidized. But we are very familiar and the operators are very familiar with pressure oxidation. So this proposal to adopt flash recycle or flash second recycle is, is extremely attractive to the operation because it's known technology and our application to oxidize and relieve the heat from higher sulfide feet, it's ideal for us. So that's the opportunity for us is lower capital is lower OpEx in terms of our approach. So that's the number one priority for us at the moment. And it no replaces the ultra fine grind tank oxidation as our priority flow sheet. So, it will be flash that can recycle is the optimum that we’ll be pursuing going forward into the pre-feasibility.

And it also reduces the footprint on as far as the operating footprint goes, because you don't have so much infrastructure and space is quite critical in PV for us.

All right. It sounded like that, that you were moving in that route. So thanks very much. And then one final question just quickly on Lagunas and it’s on current maintenance but are you going to continue residual leaching at that operation? Are you shutting that down?

No, so again, this is important about having proper plans, it still got significant potential reserves in the form of sulfide ore, refractory ore. I got to a point where the oxide ore was running out, it was very complicated process to try and do it on a heap. And our view is that put it on current maintenance and make sure that we use the cash flow from the residual ongoing leaching to invest in our exploration endeavor around Lagunas and we have three significant oxide targets, one quite well defined which we’re busy permitting and then we've also got three in addition to the ongoing drilling we’re doing in the current pits to expand the reserve base. We have three additional satellites so far satellites that we will also be evaluating. The objective is to lift the reserves to a level where it would warrant, it would support the investment in a refractory style process which for us would probably have to be roasting. Right, John?

Yes, given the description that the geologists have of extremely carbonaceous material with, we'd be supporting a roasting thing.

You want to add anything, Rod? Okay, Rod agrees.

All right, thank you very much.

Our next question comes from John Tumazos of John Tumazos Very Independent Research.

Thank you for taking my call and congratulations on all the good work. Could you refresh us as to the reallocation procedure in the 61.5%, 38.5% Nevada Gold breakdown? Does it change? If the origin of production is one company or the other or is it reserves and as an example, if Fourmile plus the one kilometer north of Fourmile turned out to be 10 million ounces of reserves, would the new JV be?

Yes, John that is easy to answer. Now let me answer it. So the joint venture of interest that's what we put in Newmont and that goes to the 61.5%, 38.5%. Fourmile is outside the joint venture. If you -- what we have to do is this is a set formula where we have to demonstrate against create a sort of a set equation, a project that delivers more than 15% IRR assuming a gold price, which is estimated on a formula spot first look back formula on the gold price. Once that's done, we have the right to force that into the joint venture and it will be introduced or included in the joint venture at fair market value. And included and in addition to the fair market value, we would also add the cost of the feasibility study. And Newmont it has two options. It either pays us in cash to keep 38.5% ratio or dilute. That’s how it works.

Thank you for that explanation. Thank you very much.

Okay, so I'm going to move to London now as or is there one more? One more, okay.

Our final question from the phone comes from Adam Graf of B. Riley Financial.

Hey, guys, thanks for taking my question. I just have a couple of quick questions about Nevada. What's something you said Mark picked my interest about the sterilized ore that you guys are now examining at Carlin? And I was just curious about that and how that came about because I was under the -- I had the understanding that previously Newmont and Barrick had layback agreement. So I’m curious where the sterilized ore is coming from?

So I’m going to show you that Newmont and Barrick had very few agreements, they might have had the intention to reach an agreement but there's always, there's been a lot of I mean just at Turquoise Ridge, Twin Creek as well, there was opportunity to rationalize the resources across the boundary where it was accessible from one and not the other. And the same goes for Carlin Goldstrike and the three projects that I referred to in my presentation all along that Carlin Goldstrike trend, is about million ounces small amount is from the pits and the others are from underground with easily accessible from Goldstrike but it's in the Carlin side and vice versa. So it's that so those sort of things. I mean, there's lots, there is ability to use now that we own all surface, building roads, which again was always made difficult because of the sort of bureaucratic impasse between the corporates. And there's a number of other opportunities for us to unlock synergies because we no longer have a line or a fence that, that that demand some sort of settlement agreement.

Yes, and then just you mentioned the deep drill holes that hit the high grade ore, Little Boulder Basin, that's two kilometers down. And I was curious conceptually with current technology, is that something that's actually you believe it's actually accessible at this point?

So I come from South Africa. So two kilometers down is not grassroots. These are massive intersections. The debate then and you can look at it intersection but the debate is they've drilled through the Intrusive and hit the sort of target packages below the Intrusive. The question is, is that Intrusive stoked out large potential resource, or what we find is that we carry on drilling and that's so right now if we’re drilling a single hole to check it out, and we'll let you know and decide once we pull that metal.

And I thought there were waste dumps that were sitting above it. Are you drilling through the waste dumps to get under there, are you able to drill directionally from that?

No, we just drilled through from surface, it's a big area, and we just want to get through the Intrusive and check the stratography. And as you know, you're going to have to get down there underground. So waste dumps are not an important prospect, you are not playing to do an open pit down to two kilometers.

No, certainly not. And then finally at Leeville, multi, you guys believe that there's multi-million ounce expansion potential there with that you guys can define with over time with additional definition drilling?

Yes, there is a pattern drilling in Leeville again, the approach to Nevada both and even in Barrick but certainly in Newmont was more driven by density and pattern and we're much more geocentric in the way we do things. And we've looked at the core and we see continuity of the orebody from one borehole to the other and it's about, part of that is down to 150 meters for 500 foot spacing. And so as an inventory it’s very attractive and it's multi-million ounces potentially, but we've got some work to do before we can specifically frame it.

Do you believe that continues North past the Old point on that property?

The continuation is North and it’s North and then Southwest. So it's on either side of the main infrastructure mining infrastructure and actually in the middle of that infrastructure is Rita K, which is largely evaluated through drilling which again wasn't in the mine plan which we are now moving into our reserve and planning schedule.

Fantastic, fantastic. Thank you for answering all my questions.

Pleasure, we have London. I think the guys in the phone did a good job. Just switch to him.

Okay. Firstly thank you for giving me the entire presentation without mentioning the World Cup Rugby once, much appreciated.

You haven’t heard my finishing remarks yet.

You mentioned at the start of your presentation, the importance of ASG, which is again, it's another battleground that you're going to have to win on relative to your paper. And we get currently some safety quarterly data that you present. And is there an opportunity for you to publish them environmental quarterly data in the CO2 emissions, sport withdrawal, something like that on a quarterly basis and there is a review.

Yes, so that's a good question. But the point that I make is that, this is a battlefield when it comes to CSR, because for us, it's not compliance. It's a way of doing business. It's deep in our DNA. I can tell you right now, that emissions are down and our carbon footprint is down quarter-on-quarter. And what my challenge to everyone is fund managers, they get these sort of compliance demands and then they throw it at the mining industry without ever thinking about it. And again, we as an industry, all it does is it puts everything at risk. It's about how do we actually work differently? How do we actually allocate long-term capital and one of the CSG and not only community but ESR issues is and it's a pet subject of mine. I have the conversation many times, fund managers almost forced the industry to go to the U.S. and mind North America, somewhere safe, very promising. And our biggest single challenge in this world is poverty. It's bigger in my mind, it's a bigger challenge than everything else because it's the biggest driver to global, what you call warming or pollution is the impact of our ability to survive on our planet. And we neglect that and I've had this debate going for a long time is when you look at the pools of capital at invest in mining, we should be encouraging investing in the emerging markets and ensuring that we participate in the upliftment of the people that are left behind by society. And that's one of miners biggest contributions we can make to the whole CSR ESR challenge. And again as you can see, we've done it. You want us to structure our pay, you want us to do this, you want us to do that, the mining industry does it all it does is a trace the mining industry, it makes people more compliant, you get it, you get rid of the entrepreneurs. And you get, you start attracting janitors to industry who merely look after the assets as best I can and make sure it's compliant. And mining is a massive engineering endeavor, that also able to employ people, train people, give people a new lease of life. And on top of that, it has a responsibility to be modern in its approach to be more than responsible in the way it manages its environment. And it's something that we have, it's we’re the only company if not the only one of very few mining companies that have full executive person and our executive team who's responsible for sustainability. So and who has the executive authority to be able to affect that alongside our Head of Operations, Head of Project and Evaluations, Head of Capital Allocation, CFO and so on. So Barrick, I can tell you we see that as a very critical component of doing business again, too, if you want to be world-class, and pursue world-class assets, you got to be prepared to and capable of developing world-class assets in complex jurisdictions. And in a first world and not even first world but in a way that is acceptable for the Generation X and Z's of this world. And that's and again, you only have to go to a mining conference, and you can see it's like an old age home gathering. And it's our responsibility along with our responsible approach to CSR and ESR is to attract the young into our organization, and to give them what they want and that's dynamism, ability to participate in this business decisions, a responsibility to the greater good and not just the income statement performance. And so, again, we've started out on that, we've spent a lot of time in this last nine months about human capital, about how do we get to the front of the queue at universities, rather than employing the back of the queue which we're really good at. And making sure that we become and young people don't want to come to a head office every morning. They want to be much more in the game. And so we've debated that at length. And I'm absolutely excited about the fact that before I get to that all day in status we will have a lot more young people in our organization. One more?

Hi Mark. One thing and you talked about earlier replacement of assets, how far down would you think about kind of what's called the quality spectrum? Would you look beyond the Tier 1 assets where you stayed at the target of having the majority of them? Would you look at Tier 2 assets? You think that could become Tier 1, you’re getting below that?

So Tier 2 for us is three million ounces plus mix 20% return $1200, yes why because it's smaller, so your ability to make returns on a longer cycle. So you lose one aspect of making money in the gold industry. So we would look at that, small assets, you want a bigger return, because it's higher risk and less time to fix it when there are problems. Yes, I think for us copper is an important component of our business, 15% at the moment you've seen it make real money even the ones that we've got, which are not necessarily Tier 1 in company and so that's our focus. And I don't think you want to try and get caught up in second rate being what we'd like to be a Tier 1 business. And again, I think this industry needs to focus on something that actually can make returns in good times and in bad and I've said it before, I'll say it again. If you look at the gold industry, there are too many managers and too few quality assets. And the two top companies in the industry have led the way and consolidation. And this industry needs a lot more of that to be able to bulk up and ensure that we have enough agile, competent manage men stewarding the limited assets we've got and then spend time on finding more, which is becoming more and more challenging.

Just one other one. You made that comment earlier about providing investors the greatest exposure to gold, which I would say closely, very closely aligns with the Randgold strategy of no debt or cash to a certain point, you seem to have softened on that obviously around your views around debt. So how do you next two to three years think about higher dividends right now versus faster repayments in the debt balance?

So the debt is as I said, long-term. So we can go and blow it out. This is going to cost us twice as much and it doesn't make, it's how you make use of the money you make. And again, we're a massive organization where in other states is imminently manageable, we will on an opportunistic basis to away that but at the same time for us again chaotic expense of debt which we can manage comfortably at the expense of returning dividends to our shareholders doesn't make a whole lot of sense to us. Our CFO might have something to add.

I would agree with you. I mean, a company of this size was the diversification that we have and certainly sustain data as part of its capital structure. And I think both Mark and I are probably going to be on the conservative end of what that debt looks like, but it's appropriate to have debt in the business.

Okay, thanks guys.

Any more?

I was wondering…

So, the question was any more comment on consolidation, West Africa has been the most prolific producer of new gold mines. And it's growing some very interesting companies there. So and as they sense that consolidation or bring more optimal management costs absolutely. I think we still have, if you had to add-up the corporate costs of the industry, and you had just consolidated it. I mean, just look at the Randgold direct deal. There's in this modern world there's no real logic to have big corporate offices. Yes, we've proved that possible both at Randgold, we’ve proved this possible very quickly in just nine months at Barrick and so I think, I'm a great believer in the requirement for our industry to consolidate. West Africa is a good place where to start. And we've always said that in our rationalization of our assets, we are committed to playing a role in that ongoing consolidation, which we will do. So ladies and gentlemen, it brings me to the end of this very interesting debate. I look forward to I'm not sure when we will be back here but we will be through here often and all you guys who are in the breaking business, you'll see us and of course our shareholders. It just remains for me to point out that on your way out, there are tickets available for Rugby lessons for those English folks who would like to aspire to being in somewhere around the Finals in four years time and I would end finally by saying thank you very much for beating the old blacks. Again, thanks for coming and I look forward to catching up with you and again, anyone who is not so quick of the mark and comes up with a few questions that you haven’t managed to ask this afternoon please feel free to reach to us, you know the team we’re all available to take your questions. Thank you again.

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