Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick 2020 Second Quarter Results Conference Call. During the presentation, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded and a replay will be available on Barrick's website later today August 10, 2020. I would now like to turn the conference over to Mark Bristow, Chief Executive Officer. Please go ahead, sir.

Thank you very much. And a very good morning and afternoon to you, ladies and gentlemen, and thank you for taking the time to be up on this call with us for Barrick's quarter two results. Who would have expected us to be where we are today. At this time last year, no one could have foreseen or even imagined that our world was about to change fundamentally in a way that would impact every country, every institution, and every person on the planet. The novel coronavirus descended on us without warning and as yet we cannot number the lives it will take or picture the social economic destruction this unprecedented event will leave in its wake. In hindsight, the merger of Barrick and Randgold could not have been more prescient for its creation of a modern fit-for-purpose mining business that is not only continuing to fulfill our promise of sustainable and superior value delivery, but has also provided us with the mindset and the structures to combat the pandemic. This has enabled us to buffer its impact on our people and our operations. And as you can see from these results, we have not only continued to meet our targets but also continued to advance our strategic projects. And in the spirit of partnership, which is at the very heart of the Barrick culture, we have provided much needed support to our host communities and countries in their own battles against COVID-19, and we will continue to do so. I refer you to the cautionary statement up on the screen, and it is also on our website, should you want to review it in more detail. As already mentioned, key to the effectiveness of our COVID-19 response has been the management structure we introduced after the merger. Our flat,…

Thank you. We will now begin the question-and-answer session. Our first question comes from Chris Terry of Deutsche Bank. Please go ahead.

Yeah. Hi, Mark, and well done on a very solid quarter in the context of COVID-19 in particular. My first question is just around COVID-19. You've done a great job in restocking, having raw materials on hand, etcetera. If you could talk through the second half of the year, which operations keep you up at night, which operations you're most concerned about from a COVID point of view? And is that the continued focus, it's all about having the right raw materials, separation of workforces? Just if you could talk through a bit more granular detail about how you're heading to the second half to mitigate the COVID risks.

Yeah. Chris, the big thing now is settling down our operations, and also our biggest challenge is constantly reminding the communities and our host countries and state governments that COVID is still there. It's no different to when we started this pandemic back in February and that we need to maintain proper discipline protocols. And so, the real risk is, as we've seen in North America particularly and in Europe and recently in China, is these spikes that are bound to come from time to time. And so, it's making sure that we are obsessed about our protocols and we now have testing capacity right through our different organizations, our different operations. We have sponsored PCR facilities, plus rapid tests through all of countries we operate except North America, which is US and Canada, are still mulling over the approvals for those very rapid tests. So that is – and again, the response to any spike is always a risk to our operations. I think, we've demonstrated – I mean the other risk, Chris, is Argentina remains a risk because we haven't had a positive case up in Veladero. And what we are working with our state government and the national government is you got to get your head around the fact that you are going to have infections, it's how you're managing that's important and the fact that you can limit the R-factor effectively. Africa came in a little later. But again, we're very proud of the responses from the host countries. And as you know, we've very well connected to the health authorities right through Africa because of the Ebola challenges we've had in the past and our ongoing fight against malaria and other tropical diseases. So – and really Barrick's community management teams plus our health authorities…

Great. Thanks, Mark. And then the other question, I wanted to follow-up, just want to make sure I've read this correctly. But I'd say, from a strategic point of view, where you stand today, you may be able to extend Tongon. Everything else remains as is despite the high gold price and the discipline you've always talked about, keeping the reserve price the same. And from a copper-gold perspective, given you've done the $1.5 billion of divestments, you're comfortable where that is. I just wonder if you can just talk broadly about your latest thoughts on strategy, commodity mix, pricing etcetera. I think nothing has changed but just wanted to get your voice on that.

Yeah. Sure. And Tongon is a good example. The team, again, has done a really good job of adding more resources. We are busy with the final feasibility studies, but everything looks like us being able to extend Tongon's life. Originally, it was going to produce a big year next year and then close, but that's not the case anymore. And we are looking to have a slightly lower production profile next year, then run for another four years or three years at about 180,000 ounces and then we've still got, as I pointed out, all these other opportunities. We've already started to crack the control around Tongon as far as mineralization goes. We're still managing on a $1,200 gold price. So we need the business to make money at $1,200 and this profile. And so, we end up with more ounces, slightly lower production rate, but for longer. And I must say, the African-Middle East team has done an excellent job in beefing up its profile going forward. And Tongon is the classic opportunity where we can benefit from the margin that the gold price offers, because we were going to close it in 2022 and now it's open until post-2024. And we've got more that we can add to that process plant, which is now no longer at full capacity. It generates more revenue at $1,200 gold and it creates an additional optionality. The other opportunity we have at the gold prices in Nevada as we – but again, the team has continued to find resources and convert them into reserves to keep our processing facilities full. But as we move more and more underground, we do free up some capacity in our oxide mills. And of course, we've got the heap leach opportunities where we can also…

Okay. That's all clear. And just the last one for me, Mark, and I'll hand it over. There was an update there on Donlin a week or so ago. Just wondered if you could comment on where that fits within the portfolio overall or where you see that?

So, as I pointed out, we've already met our $1.5 billion value delivery by bringing to account noncore assets. We will continue to do that. but Donlin is a nice clean gold opportunity. It's definitely a very large resource. We understand the economics of it. With the changes in Barrick, we got much more involved. And it's sitting at $1,200 gold, our review last year gave us about a 9% IRR. When we look at the project, it's got three sort of risk baskets; construction risk because of its location; the capital risk just because it's a very large asset and it's in a moderate grade but in a challenging environment; and then which is always the case, it's the geology risk and that's something we can de-risk. And so our engagement with NOVAGOLD was let's really get down, put the best of our geologists both sides (00:50:34) into this project, employ some really quality skills into Donlin and then take up the geological risk. Because once we have a clear definition of the reserves and more importantly, the shapes of the ore bodies, we can then set with confidence the mining plan and, more importantly, the rate at which we can mine, which of course will set the amount of gold that we can produce on an annualized basis, and then all the rest is able to be measured against that. And so, that's it. Your return – once you get the amount of gold you can produce and at what cost, then that's the basis to determine the returns you can deliver for stakeholders, and the next variable is the actual gold price. At these gold prices, it's a very valuable asset. We're still adding value to it. And you would have seen the first announcement out of Donlin as Donlin, because I believe that's where NOVAGOLD and Barrick should be focusing on is Donlin as a stand-alone business. We happen to be shareholders of it. And we will continue to drive that. It's the biggest drilling project that Donlin has seen for some time. As you know, we in Barrick are geocentric. We're obsessed about taking out the geology risk. And we've got probably another follow-up early next year to test the models that we will develop out of this drilling program, which we will finish this year and before the winter sets in. And then we'll take it from there. And it's – definitely right now it's a key project for Barrick and very valuable today.

Thanks, Mark.

Our next question comes from Jackie Przybylowski of BMO Capital Markets. Please go ahead.

Yeah. Thanks very much. I'm just going to follow up on something you alluded to in that last comment, Mark. In the MD&A, you do talk about how you have achieved the $1.5 billion value realization, but you do say there's more to come. And I was wondering if you could comment on that. Are you still looking at noncore asset sales in the near-term, I guess, will be my first question. Thanks.

So, Jackie, yes. The answer is yes, yes and yes. So, I mean, I think what you see here is that we set this $1.5 billion target, people sort of raised their eyebrows a bit. But the two big drivers on that is the $750 million cash payment we received for our share of Kalgoorlie. Today, the value of the Massawa transaction is just under $500 million. We then cleaned up a whole lot of equity positions, ownership of small projects. Barrick at one stage was investing in juniors and so on. So we've tidied that up. And I think what it shows is that every dollar is important for this Barrick team. There were lots of transactions we've done, sort of $5 million, $10 million, $15 million, tidying up the portfolio. As you would have seen, we've recently entered into a definitive agreement over Eskay Creek. And again, we believe that that deal will continue to add value. We're a big shareholder in that project and we'll manage our way out of it over time, and we've still got others to do. There's a lot of work being done on our closure sites. We've changed our closure strategy to close – to work engineer our sites to closure rather than trying to kick the ball down the road or the can down the road just remaining compliant. And as we do that, we'd convert a liability into an asset and we are able to bring it to account. As you would imagine, the higher gold price turns some of our smaller assets within our portfolio into something that's quite attractive, and we have a number of those. And so, again, they might well prove to be the sort of foundation for start-up initiatives. And I would just point out that I started Randgold some 30 years ago. And we are always supportive as far as entrepreneurial developments and opportunities. So we'll continue to do that. We have other assets in our portfolio that, again, we would want to bring to account at an appropriate time. And the gold-dominant assets have a much bigger value today than they had even at the beginning of last year. So, you can look forward to more of these sort of transactions.

That's really helpful color. Thanks, Mark. And I'm sure the closure and reclamation is very attractive from an ESG perspective too for the communities. If I could ask on the sale of the Shandong Gold equity that you held. I know you have 10 million shares approximately remaining. Is that a position you plan to keep? And conversely, have you talked to Shandong, or are they planning to still hold the Barrick shares that they own?

So we worked – that investment had many reasons for it. There was the IPO, which we supported and Shandong moving into the international arena, which we were able to support. And also, they were supportive of us in a time when we were working towards the merger between Barrick and Randgold. And at the same time, as you know, we're in partnership down in Argentina, which has really now started to really show merit. For us, we believe we had fulfilled our role in that process. We have retained a core investment with them, and we have no intention of selling those shares, certainly, in the short-term or even medium-term. But at the end of the day, our business is about deploying our owners' capital to make returns. We're not passive investors by nature or through strategy. Again, for their investment in Barrick, they have kept on it. They have done very well by staying with it. And our liquidity is such that they can sell it or buy any time they like. Whereas for us, we had fulfilled a specific role, and we worked with them to create some more liquidity through their sort of Chinese offshore structures, and we were able to bring in other shareholders. And again, those shareholders have done very well out of that transaction. So I think, again, our partnership and the way we work together to realize value for our respective owners really underpins the partnership that we have with Shandong.

Got it. Thanks very much. I have one more question, then I'll hop off. Can you give us an update? I think you had talked previously in the media about Kibali and the negotiations you're having with the DRC in terms of cash repatriation. Is it possible to update us on how those discussions are going?

Yeah. They're going extremely well. So, just some background. The 2018 mining code was sort of shoved upon everyone and then there was a change in government. And we've engaged with that government and it's a complex engagement because of the coalition that's sort of underpinning that government with the Kabila faction having more ministers than the Tshisekedi faction. But in the fullness of time, we've – it took a long time to form the cabinet. There have been some changes on both sides. But it's a better working government today than it was even a quarter ago. And again, we've – as you know, we were very engaged and vocal around the 2018 mining code and there's been different ways to interpret our repatriation of excess cash. And Kibali really has – Barrick makes it its business to comply with legislation. And so, one of the changes was you had to repatriate 60% of your gold revenues back into the country, of course, into a US dollar account, which is important. And even after repatriating that 60%, we weren't able to spend all 60% of the repatriated funds. So we grew our cash balance in country and we still are paying off the capital in Kibali. And also, we have settled on a dividend strategy before the full capital amount is redeemed, which will benefit both our partners (01:01:11), and of course the government through withholding taxes. And so, we've sat down with the government and pointed out, it's useless keeping this money in DRC. It doesn't draw a lot of interest. It doesn't help anyone. Whereas the sooner we can pay our capital off, the quicker we can revert to full dividend repayments and we take away our cost on the income statement as well. And everyone understands that. We didn't want to do it in any sort of purchased process. We wanted to do it under the proper regulations which we believe are embedded in the mining code. And so, we've had to work to tidy up some of the wordage. We have approval now from the government and the central bank to repatriate. It's really now just with the paperwork. And at the same time, we have been working with the parliamentary subcommittee, just tidying up the legislation so that these sort of transactions can happen in the normal course of business. And I just would point out to everyone, the dollars are in a US dollar bank account and there is no question about that they belong to Barrick and AngloGold of course. And we have taken some time because we were prevented from doing much because of the delays in finalizing the cabinet. But now that once the cabinet was property settled, we were able to get to work. And we're right at the cusp of this happening.

That's really helpful. Thanks very much, Mark. I'm going to hop off and let somebody else ask question. Thank you.

Yeah. Thanks, Jackie.

Our next question comes from Josh Wolfson of RBC Capital Markets. Please go ahead.

Thank you, operator. You were taking a look at the gold price today. It was something like $700 above your $1,350 budget and over $800 above your long-term price assumption. Company is positioned to be in a net cash position in and around year-end, generating more than $3 billion of free cash flow. When you look at the company's long-term outlook and I guess M&A aside, how do you leverage this kind of upside that you're currently experiencing today from the gold price without compromising the company's discipline, which it seems very, very clear that the company is doing right now?

So, Josh, first of all, the way you do it is that you don't blow your brains out like what happened to the industry in 2010 to 2015. So, that's the first point. Secondly, we've always said that we would adjust our dividends on a sustainable basis, as and when it was required. And you'll see that we've added another $0.01 to the quarterly dividend already. And we will reconsider that because, if I can try and explain to you our objective, we haven't changed our strategy. And by the way, we are managing our $1,500 goal. So, our budget was – the plan is always at $1,200. It's measuring the performance of the teams, we got to keep rising the gold price and we try and keep it just close to spot as possible. The challenge we've had is that spot has been moving faster than we can. But I must just reinforce, we still allocate capital at $1,200. The budget number is only for us to forecast revenues. And your prediction is correct. If you take the various gold prices and we do run our models now, we've got them up to $1,900 gold. And we look at them so that the objective is not to waste any money and retain the dividend. I mean, the discipline of protecting our margins. So that's – so then stepping back and say, what are we going to do about it. First of all, what is happening today is effectively fast-forwarding the Barrick strategy of 1 July or 23rd of September, 2018 when we shared with the market our vision for the Barrick-Randgold combination. And this gold price has done two things. It's fast-forwarded that whole strategy and it's also allowed us to work through some of the riskier assets. For…

Great. One more question just looking at managing the business through this cycle and recognizing we're probably now at a low here, something that hasn't been discussed much in the sector but might be emerging, there's the concept of hedging and maybe hedging is a method to reduce earnings volatility or improve visibility. Is that something that this company would consider ex sort of project development, just looking at that?

So, you guys amaze me, Josh. One minute you're asking for discipline and making sure that we don't hedge. And the next minute, you're wanting us to sort of throw away the discipline, do some more stuff, because the gold price is higher, pay it all out, and then hedge. So I'm confused. But to un-confuse you, Barrick's strategy on hedging, we are not anti-hedging. We believe that two times that you hedge, when you build mines because it's an option available that no other miner has to be able to manage your capital profile. And Graham and I have done this many times in our career, and we've done it well. And we've never had to buy back our hedge. At the same time, we do it when we're closing a mine to ensure that we cover the risk of revenues in a cyclical industry. So those are the two situations. Of course, in transactions where you've got short-term risk – and one other things I'm obsessed about is exposing Barrick to market dictation. And so I always want a balance sheet that we can manage our business irrespective of the capital markets. Today, we've got some $6.7 billion of liquidity. So I'm pretty sure we're good to go. But this is a unprecedented crisis. And to manage any business in this situation recklessly is not advised in my mind. So we'll continue to be conservative. There are times when we will hedge but certainly not now.

Great. Thank you.

Our next question comes from Greg Barnes of TD Securities. Please go ahead.

Yes. Thank you. Mark, from your comments earlier on about Donlin and some of the other big projects, it sounds like you're more of a seller of those projects than a builder in this kind of environment.

So, Greg, you know that famous saying, everything's got a price? We will sell anything as long as we feel that we're getting more than or what it's worth or more. As I said earlier, our view is that whereas our activities in Donlin are still adding value, it's a very substantial gold resource. The thing that intrigues me about it is geologically – so geo-statistically, it's well north of 30 million ounces. We understand the metallurgy. It's moderate grade. The big question is the actual ore body geometry, the department (01:14:46) of the gold within the ore body. And so far, we've made a huge progress in understanding the controls. And recently, we're about 10% into our next phase of drilling. And so far we've been encouraged by the slightly higher grade that we've got against the model. But it's still early days. We've got another 90% of that drill program to finish. But if you look at Donlin compared to some of the other assets in our portfolio, it's a pure gold play. It fits – it's in a mining-friendly jurisdiction. It's just in a very challenging geographical setting. That's the thing that carries the risk. So the way to deal with that is to take the risk out of the – the revenue risk which is focused on the ore body.

Okay. Just on your comments in the presentation, you did say on Turquoise Ridge that you had – that's been a big focus for you in Nevada and there have been some challenges. You've changed out the leadership team, but also have some near-term upside. Can you just explain to us what's going on at Turquoise?

Sure. So, Turquoise is a combination of a low – sort of medium-grade underground mine in Twin Creeks and then a low grade pit and then the high grade Turquoise Ridge underground. And as you recall, Turquoise Ridge was always restricted by a toll milling agreement with Twin Creeks because Twin Creeks own the autoclave facility and all the processing facilities by the way. So now, I'd say – and so, the focus in Turquoise Ridge on geology, geological control and the ability to mine at a high rate has never been made. And at the same time, the focus on the legacy Newmont side was also not about throughput. And so, when we consolidated those two operations, we had a culture there, not only the two different cultures from the two different companies, but also a culture that wasn't obsessive about efficiencies. And so we leaned on the processing facility to increase the autoclave, and we certainly pushed it hard and we exposed some very real bottlenecks. At the same time, in Turquoise Ridge underground, that's the legacy Barrick, it had some hoisting capacity restrictions. We've identified them and we've largely addressed them. The big challenge we have there is ventilation, and that's the number three shaft to really deal with two things; add more flexibility and hoisting capacity, but more importantly address the ventilation restrictions. And at the same time, Turquoise Ridge was being high-graded. And so, as Rod always says, we run our businesses optimized to the ore body. So we've re-optimized that ore body, and that gives lower grades, of course, but it calls on that to be offset with bigger mining rates. And again, of all the complexes within the Nevada Gold Mines, Turquoise Ridge geology is least understood and the complication between Turquoise Ridge…

Okay. Thanks, Mark. That's helpful. I'll pass it on.

Thanks, Greg.

Our next question comes from Tanya Jakusconek of Scotiabank. Please go ahead.

Hello, everybody. Just wanted to come back...

Hello, Tanya.

Hi, Mark – To Nevada if I could. Just on Long Canyon, looks like the permitting has paused there and you're sort of reviewing the water management situation. What's happening there, Mark?

So, Tanya, when we got hit around Long Canyon, the Phase 2 underground and then – I mean, open pit extension in the Phase 3 underground model – Long Canyon has got a short life. It had some – and the then feasibility study and the associated environmental impact process, we didn't like what we saw. And there was resistance over it in that the plan was to really attempt to dewater the whole compartment. And again, something that the new Barrick has brought into Nevada is you don't have to dewater the entire compartments on every project. And many projects, as we go underground, we've really put our head around understanding the aquifers and the whole water table geometry. And so there is a wetland down the valley from Long Canyon. There are open aquifers. We believe that you can do a better job to ensure that we impact on – and it's only a short-term impact on those particular and particularly the water balance is manageable. And again, as we do and as I've always done and as Grant believes, we reached out to some of the critics – all of the critics actually, engaged with them, shared with them that we feel we can do it better. We've been working hand in glove with the authorities and the various federal and state institutions that are responsible for oversight on the environment and our impact on it. And so we felt it was to review and we finished that review and the outcome of that review is that we can do this differently and there are a number of options around, whether you mine it – limit the mining to a pit and no underground, or you replace some of the pit with a smaller underground, Long Canyon is a very profitable business. There are many – there's a big community that's supported by that operation in the area. And so, that's what we've done. As we've said, it doesn't change our guidance and our long-term outlook. It's a relatively small contributor, but it's a very profitable contributor and it also makes sense to be able to mine it out and deliver on our closure plans properly. So, that's really, in a nutshell, where we are with Long Canyon.

Okay. And then just maybe the last one for me. You've recently made comments in the press on a New York listing. Can you give us your thoughts on that and what a re-domicile would cost?

So this reporter overstepped his sort of reporting license. He called me and talked to me for half an hour about many things and at the end asked me about a listing. And if you look at that Wall Street Journal report, in the second sentence, it very clearly says that I said we are not considering it or planning it or doing anything about it today. We talked philosophically about the London Stock Exchange listing, the importance of being in the resource markets. Canada and New York Stock Exchange are the two largest public markets for companies like Barrick. We are very comfortable in Ontario. We have restructured our business in Canada. It doesn't mean to say that we are not committed to the Canadian mining industry. Hemlo has really delivered some exciting opportunities. And we continue to hunt for new opportunities in Canada. The New York Stock Exchange, the debate again with this reporter was around the S&P and how important is it. And again, as I pointed out, our performance of our stock is extremely efficient in the market. But the S&P does bring other additions. It helps us grow our base. It is possible to get onto the S&P without re-domiciling. And to re-domicile in the US just to be able to get on the S&P, that's a questionable decision because the cost of moving domiciles is high. So, that's the background to the conversation. I think he desperately needed a headline, which was not necessarily in line with our conversation.

Yeah. No, I figured that, too. My last one, looking at re-domiciling Barrick when I did the extra slide, I think, the cost was in excess of $300 million. Is that a fair assumption?

Yeah. At least, Tanya.

Yeah.

Yeah. Graham, do you want to comment on that? I mean, we've looked at the merger. We looked at it, but I think you're pretty close to the number. Graham?

Yeah. I mean, it's that sort of order of magnitude. Let's put it that way. It's a complicated question. It depends on many factors, many assumptions, not least of all your gold price assumption in terms of what your valuations are relative to your tax base. So, that's not a simple answer to a simple question, but it's potentially significant.

Yeah. No, other than when I did it, gold was much lower and it was – and sort of like it was in excess of $300 million at a lower gold price.

I mean, Tanya, we've got a lot better things to do right now than to consider doing that.

No. I appreciate, $300 million is a lot of money. (01:28:47)

Yeah. I got it. Thank you.

Okay. Thank you.

There are no more questions from the conference call.

All right. Well, ladies and gentlemen, again, thank you very much for making the time to share with us our results. Again, myself and Graham and the team are available to take calls, should you want to ask specifics that you don't really want to share publicly. We're all available as we always are. Barrick is in a such a good position now. We're excited about being able to continue to deliver on that promise we made you back on the 23rd of September, 2018. And again, we're certainly not short of opportunities both organic and we are keeping a beady eye on opportunities outside our current portfolio and exploration undertakings. I hope that next time we do this, it will be face to face. But having said that, what we would like to leave you with is, that we are absolutely driven about delivering on our strategic objectives, COVID or no COVID. So, thanks again. And I look forward to catching up. Cheerio.

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