Barrick Mining Corporation (B) Q4 2020 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the Barrick 2020 Fourth 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. [Operator Instructions] As a reminder, this conference call is being recorded and a replay will be available on Barrick's website later today February 18, 2021. I would now like to turn you over to Mark Bristow, Chief Executive Officer. Please, go ahead, sir.

Thank you very much. And good morning and good afternoon ladies and gentlemen and welcome again to our presentation of Barrick 2020 and Q4 results. The past year has been one of delivery and developed [Technical Difficulty] in the face of unprecedented challenges, we delivered on our production guidance and at the same time we continued to [Technical Difficulty] our key projects amongst the Pueblo Viejo expansion plan, the Turquoise Ridge [Technical Difficulty], the Goldrush exploration declines and the underground mine at Gounkoto. We improved our understanding of our orebodies by putting geology front and center and we can now optimize our mine plans on firm foundations. The sale of non-core assets generated the $1.5 billion we promised and by cleaning up our portfolio, we aligned it with our strategic focus of tier 1 mines. A world-class business needs a global presence to operate tier 1 assets in any jurisdiction which means that some of our operations are located in more challenged geopolitical domains. In addition to the coronavirus pandemic last year, we also had to deal with the Argentina financial crisis, a coup in Mali, the major impact of political power movement in the DRC and the closure of Porgera in Papua New Guinea. Barrick has clearly demonstrated that it can manage risks across a broad range of assets with a leadership capable, not only of running a large and complex business, but also of recognizing and realizing new opportunities. Please take note of this cautionary statement. And for those who need more time to review, it is available on our website. Key in the past year's performance was the effectiveness of our ESG strategy, which is powered at all levels by a long-established partnership philosophy and our close relationship to all our stakeholders from investors to host communities. This was evident in Barrick's successful COVID containment programs, which buffered the impact of the pandemic on our businesses and our people and also enabled us to provide much-needed and welcome support to our host countries. E in ESG has been getting most of the attention recently. But I would argue that its social dimension is as important. I’m particularly concerned that the issue of poverty, arguably the greatest problem facing mankind is not more prominently on the agenda. The world's poorest people live in the poor countries and easing their lives will require [Technical Difficulty] and not just [Technical Difficulty]. This is not to say that we should underestimate the gravity of the environmental challenge. Barrick has a clear road map for the reduction of greenhouse gas emission which is based on climate science [ph] and operational realities rather than wishful thinking or long-dated aspirations. Our landmark targets listed here are under constant review. All our operations have practical plans for transitioning to cleaner and more efficient energy sources and water management and we are cognizant of the necessity to innovate new power plants for our future mines. In short, Barrick aspires to be an industry leader in ESG as in other things. This is our health and safety scorecard for 2020. And as you can see there was a significant improvement with both lost time and total recordable injuries decreasing by big margins. Unfortunately, as previously disclosed, an otherwise impeccable record was [Technical Difficulty] by a tragic fatality at Kibali in November of 2020. There were no high-severity environmental incidents across the group during the year and the number of medium-severity events declined. As these numbers show we continue to reduce our emissions and improve our water usage and recycling rates. [Technical Difficulty] water we return is in better shape than the water we received. The photographs on the right show one example of the difference we've made since taking over North Mara where one of our priorities was [Technical Difficulty] water management plan. Our social license to operate requires the goodwill of our host communities and is closely aligned with our partnership philosophy. During 2020, fully functional community development committees were established at all our operational sites and they were instrumental in deciding how best to invest the more than $26 million we spent on quality-of-life projects in the course of the year. Last year we set ourselves very specific objectives. As you can see here we ticked all those boxes. We met our production target, delivered on our business plans and fully capitalized on the higher gold price and copper prices. We increased free cash flow to an annual record of $3.4 billion against a 27% rise in the gold price and we achieved our goal of zero net debt by the end of the year. It's worth calling that as recently as 2013, Barrick was burdened by debt of more than $13 billion. The quarterly dividend has also tripled since the merger with Randgold. And since it was announced more than two years ago, we've as I said tripled the quarterly dividend. And in addition to the quarterly dividend as you all have read today we are proposing a capital return to shareholders of $750 million to be paid in three tranches through this year. This return is sourced from the proceeds of the sale of our stake in Kalgoorlie, as well as other non-core asset since [Technical Difficulty] in line with our policy of returning surplus funds to our shareholders. The solid operating results were driven by another strong performance from Pueblo Viejo in the Dominican Republic the ramp-up of Bulyanhulu in Tanzania and the continued improvement at the Turquoise Ridge complex in Nevada. As I noted earlier production was at the midpoint of guidance and total cash costs and all-in sustaining costs were within the guidance, despite higher royalties due to the gold price. Our record free cash flow and zero net debt are particularly gratifying features of the numbers as are the very significant returns, we delivered to our shareholders. It's also worth noting that Moody's has upgraded our credit rating to Baa1 which is in line [Technical Difficulty] in the gold sector. It's my view that the consolidation of the gold industry is not yet complete and as these numbers show Barrick is well equipped to play a big part in future developments. Now to North America and our operations there. We start with a 5-year outlook for that region. We going forward are advancing our orebody knowledge deep production profile and managing all-in sustaining costs. This is consistent with our November Investor Day with some capital shifting from 2020 into both 2021 and 2022. There are also some opportunities to [Technical Difficulty] that I will touch on in the next few slides. In Nevada the best potential for near to medium term life-of-mine [Technical Difficulty] are at North Leeville, Fourmile and Goldrush as well as the Ren project at Goldstrike. The best opportunity for significant new discoveries are in the area between Turquoise Ridge and Twin Creeks; between Pipeline and Robertson; and at the Cortez complex in Carlin Basin south of Gold Quarry. I have great expectations for the North Leeville area and the team is currently prioritizing the improvement of the geological model and drilling to accelerate the delivery of ounces into the Carlin mining plan. Results to date from five of seven drill holes have confirmed at least two emerging high-grade areas above the average reserve grade at Leeville. Drilling closer to the existing mine infrastructure continues to extend the Turf orebody to the north and the west. The Carlin complex is richly endowed with gold deposits and this flagship asset has some very exciting opportunities not only for resource expansion, but also for new world-class discoveries. In 2020, the Carlin complex delivered at the midpoint of its production guidance and also kept costs well within the guidance range. This year and the next we'll see substantial investment in the future. In addition to growing ounces through exploration at North Leeville, Rita K and Ren the introduction of improvements to increase processing options as well as lower costs are also on the agenda. Like Carlin the Cortez complex has a wealth of opportunities for expansion and growth. The Goldrush and Fourmile discoveries are good examples of our policy of first understanding the geological framework and then building the exploration programs around that. At Fourmile the improved confidence in our geological understanding is demonstrated by our first declaration of an indicated resource just under 0.5 million ounces at around [Technical Difficulty], while still growing the inferred resource to 2.3 million ounces at around 11 grams per tonne by including Sophia. I have no doubt that this resource will grow once we drive the development from Goldrush and infill drill the Fourmile project. Still in the Cortez complex, Pipeline Crossroads is a world-class legacy deposit and we continue to grow the resources at the Robertson deposit. We are also progressing the feasibility work at Robertson, while taking a closer look at what lies between them. Cortez itself exceeded the top end of its production guidance last year. The Goldrush project is on track to expose its first ore in the first half of this year and the government's record of decision is now expected in the first quarter of 2022 rather than the [Technical Difficulty] of this year. This, however, will not impact the mine plan with a focus now on better understanding of the orebody as we open it up, while we finish the underground feasibility study for the stand-alone Goldrush portion. We're exploring the possibility as I indicated earlier of reducing the cost and timing of drilling at Fourmile through underground access from Goldrush. Once Goldrush and Fourmile are up and running, they will boost the Cortez complex' annual production and ensure its tier 1 status for years to come. Turquoises Ridge, the highest grades in the industry but was developed as a low tonnage high-grade mine and not based on a proper geological model. This project and mine represents a significant opportunity for improvement. It has two huge deposits at either end of an eight-kilometer trend both with a historically poor geological understanding and a lot of potentially prospective ground between them. We've done a great deal of work on this since the formation of Nevada Gold Mines and we're starting to generate new targets in what was thought to be a maturing district. As shown in the section, the newly discovered midway fault between Turquoise Ridge and Twin Creeks could be an important district scale mineralization control. The Turquoise Ridge complex has been struggling and production for the year fell short of guidance. There was a marked turnaround, however, in the fourth quarter and ongoing optimization should deliver further improvements for this year, including a ramp-up in underground development. Construction of the third shaft remains on schedule and within budget with commissioning planned for late 2022. The shaft is designed to be able to increase hoisting capacity, improve ventilation and shorten haulage distances for that operation. Still in Nevada, Phoenix and Long Canyon are small, but very efficient low-cost operations both exceeding the top end of production guidance and delivering exceptional margins. North of the border in our home country Canada, Hemlo has made a remarkable journey from survival mode to a potential tier 2 mine. At the time of the merger, we doubted whether it was actually a profitable asset. But after unpacking the geology and rebuilding the models, we found many opportunities not only to turn it into an efficient underground operation, but also to build its reserves and extend its life. Most notably recent drilling has indicated the potential for a discrete parallel mineralized structure to the west of the main C Zone. Further drilling is planned in [Technical Difficulty] to improve the geological understanding of this area. Last year, Hemlo beat the top end of its production guidance. And this year a separate portal development will access its upper C Zone, providing a third mining front and increased flexibility. Mining there is expected to begin in the second half of this year. Latin America is a region with many challenges, mainly legacy issues that impact on our social license to operate but also an abundance of opportunities. We've put a lot of work into fixing our businesses and relationships there. And last year, I personally visited the region four times with Mark Hill who leads that region of Barrick to review progress at our operations and also to meet with governments and community levers -- leaders and really invest in our new management teams across that region. All the [Technical Difficulty] have been or are being addressed and even the situation in Papua New Guinea is progressing to what I trust will be a reasonable, acceptable resolution to Barrick, as well as the government. In the meantime, we have left Porgera out of our guidance and intend to add it back once we are able to reach an agreement with the various stakeholders in Papua New Guinea, including government and the landowners. I would also point to the reduced production forecast at Veladero, compared to what we shared with you at our November, Investor Day. This is mainly due to the transition plan to the new phase six to 10 projects from the old valley leaching facility they have only recently finalized with the government. We have a new exploration and new business team for the region and as a result are working to expand our footprint and open up new opportunities across South America. I also refer you to Tuesday's announcement on the sale of Lagunas Norte, which is -- this is in Peru, which is part of our continued rationalization of our portfolio that does not fit with our long-term investment strategy. At Pueblo Viejo, new targets have been identified and a particularly interesting one is being developed south of the Moore pits within the joint venture mining lease. Also our recently established, Pueblo Grande project immediately adjacent to the PV tenements has secured a strategically important parcel of land which is critical for PV's expansion plan. Pueblo Viejo staged a great second half recovery, posting a mill throughput record for the second straight year to achieve its production guidance. The expansion project will realize the operations full potential by unlocking just over 9 million ounces of gold currently excluded from reserves due to the lack of adequate tailings and storage facility. The plant is being upgraded to handle throughput of 14 million tonnes per annum. And as a consequence, we are planning to process more stockpile material there this year. This is the reason for slightly lower production guidance compared to 2020 and is in line with the forecast disclosed at our November Investor Day. The team is continuing its work with the new government and the community to secure land for the new TSF. The work associated with the TSF geotechnical and feasibility study is expected to be completed this year. In Veladero, Pascua-Lama District, a drilling program to test the link between the underlying deposit, geology and metallurgical characteristics is underway. Around Veladero, there are still a number of untested opportunities to expand the resource and reserve base of both Lama and Veladero. Drilling to extend Veladero pit shell was also limited due to the impact of the pandemic and we expect to catch up with that during this summer in 2021. In the El Indio region, short of a new greenfields discovery our strategy is to build a critical mass of smaller deposits to create a mining complex capable of meeting our criteria. As we reported earlier, Veladero's production was impacted by the pandemic-related quarantine and movement restrictions imposed by the Argentine government. This also temporarily delayed the mine's transition to the new phase six heap leach facility, which is on track for completion now by the end of the first half of this year. As agreed upon with the government, heap leach processing will be reduced during the transition impacting production. However the mine's performance is expected to improve in the second half of the year after the new facility has been commissioned. Veladero's connection to Chile's power Grid and Pascua-Lama should be completed by the end of this year as well which will also reduce unit costs for the operation. In Papua New Guinea, we have been engaging the government in discussions to seek a mutually acceptable way forward for the reopening of the Porgera mine, which as you know, has been in maintenance since the government refused to renew its special mining lease in April 2020. I am in fact speaking to you from the capital Port Moresby, today where the discussions are occurring. If all goes well, Porgera should reopen this year but for the time being, as I said in my introduction, we have excluded it from Barrick's 2021 guidance. The Africa and Middle East region has largely as expected driven the post-merger repositioning and reinvigoration of Barrick. Its five-year plan remains intact and steady with cost and CapEx coming down and there are plenty of opportunities to drive this performance beyond the time frame you see here. Our immediate objective for that region is to either extend the life of mine of Tongon or replace its production after 2023. The Loulo district in Mali is still a prolific generator of new ounces. Loulo-Gounkoto again more than replace depleted reserves last year and there are big opportunities for more in both the Loulo and Gounkoto mining leases. Despite the political unrest in Mali the complex exceeded the top end of its production guidance highlighting again the importance of our strong in-country partnerships and the agility of its management. Its 10-year outlook, is enhanced by the complex' third underground mine, below the very profitable Gounkoto pit, which is on track to deliver its four -- first ore development tonnes in quarter two. And studies for a potential fourth underground mine at Loulo 3 are progressing. Our exploration group is also making good progress on advancing the targets across Senegal on our Bambadji joint venture. In Côte d'Ivoire, brownfields exploration has added three years to Tongon's life and a recent review identified, 11 follow-up targets with the potential to meet our criteria and extend the life of mine further. Situated 15 kilometers from Tongon the Mercator target is scheduled for resource definition and resource reserve -- and reverse -- reserve conversion. Côte d'Ivoire remains an attractive destination because of its prospectivity and relatively sophisticated infrastructure. And we continue our generative opportunities, throughout the country with the aim of increasing our new ground holdings. For reasons beyond its control, Tongon has led a troubled life. But it has always managed to be very profitable. And last year, it exceeded its budgeted production, for the first time in its history. Its extended life of mine plan has been supported, by additional exploration optionality, in exchange for a lower production profile, at slightly higher costs. Kibali grew its total reserves, net of depletion for the successive year. Kibali was initially planned to progress to underground early mining, but the discovery of a series of significant open-pit deposits, has allowed us to gain processing flexibility by balancing the ore feed over the mine's 10-year plan. The updated plan increases the mine's gold production, to more than 750,000 ounces a year, sustained throughout the current plan and given Kibali's strong target pipeline, likely beyond that. Kibali produced near the top-end of its guidance range, in 2020, while total cash costs and all-in sustaining costs were at or below the bottom-end of that range. Kibali is the most highly automated underground mine, in the Barrick group and a global leader in this field, which enables it to maximize its opportunities as well as its efficiencies. Its three hydropower stations, keep its energy costs down. And the recent introduction of a battery-driven power performance system, offers a further reduction of diesel-generated power. Turning now to Tanzania, we've achieved a great deal in this country, since taking over the operations of the Acacia mines there. On the exploration front, the focus on getting a proper understanding of the geology is delivering exceptional results, with North Mara increasing its mineral reserves, net of depletion in 2020, while a substantial growth of resources indicates a significant potential, for extending its life of mine. Operationally, North Mara continues to improve achieving production at the upper end of its guidance. There's still a lot to do to realize this mine's full potential, starting with the new oxygen plant and an upgrade of the cyclone cluster to increase recovery rate. I believe once we brought North Mara and Bulyanhulu into the lower half of the cost curve, we'll be able to deliver another tier 1 complex, in Barrick's portfolio. Exploration at Bulyanhulu is producing some very encouraging results. And as our understanding of that orebody improves, it's becoming clear that it's of world-class proportions, with a measured and indicated resource of some 4.3 million ounces. And an inferred resource of 8.3 million ounces and still lots to do to achieve, profitable conversion to reserves. The ramp-up of the underground mining and processing at Bulyanhulu is on track. And will continue through the first half of the year, reaching steady state annualized production into 2022. In the meantime, the feasibility study for an optimized mine plan is being progressed. Our third Tanzanian mine Buzwagi, is scheduled to enter care and maintenance on its way to closure, starting in the third quarter of this year. Armed by the introduction of on-site mineral resource management and an intensified focus on geology, we've spent the two years since the merger, improving our knowledge of the legacy Barrick orebodies. We've made significant progress in developing life-of-mine optimizations, based on high-confidence geological models as well as new operating plans, ounce profiles and cost forecasts. When excluding the impact of the disposal of Massawa our total resources grew in 2020, as expected, off the back of increasing inferred resources, while 76% of reserves were replaced net of depletion. This was also done while maintaining our above industry average resource and reserve grade and is a testament to our focus on orebody quality, which differentiates us from the rest of our industry. As our understanding of the orebodies increases and as our drilling coverage improves the potential for resource conversion to reserves will grow but it will take some time for the group to reach the replacement levels of the Africa and Middle East region. It's also worth noting that we have continued to clean up our portfolio with a focus on assets and opportunities that meet our specific strategic objectives and investment process. This is in line with our commitment to look to attract the best people to work with us to develop and mine the best assets in order to deliver long-term sustainably profitable results. Our 10-year guidance is an important tool to manage our sustainable profitability strategy. This year's production as I've indicated will be impacted by the continued closure of Porgera and the heap leach transition at Veladero. But there are significant opportunities ahead for improvement and as I noted earlier, we have reason to believe that the Porgera issue could still be resolved positively. The five-year outlook for copper is also positive with all the trends as you see on this slide heading in the right direction. Our copper portfolio made another significant contribution to the group's bottom line last year. Though the advancement of Zaldivar's chloride leach project was impacted by COVID-19 restrictions in Chile, Lumwana in Zambia produced near the top end of its guidance and Jabal Sayid exceeded its guidance. Costs for the overall copper portfolio were better or at the bottom of their guidance ranges. The change of copper reserves year-on-year principally reflect depletion through mining. With Lumwana now operationally stable there is significant exploration potential to grow resources and reserves on the property while extensions on lode one at Jabal Sayid are progressing through pre-feasibility and should soon add to its reserves. As many of you know, Lumwana has a colorful history starting with its acquisition as part of the Equinox deal and followed by years of operational disappointments. What the African and Middle East team has done with this asset is quite remarkable and summarized on this slide. Through diligent operational stewardship focused on people, efficiencies, cost discipline and sound geological and grade control practices this mine now boasts a long life and significant future cash flow generation potential. Over the space of just two years, production has increased by 23%. Costs have been reduced by 25%. And at around $3.50 copper price, which is a little below where it is today, the mine could produce in excess of $250 million in free cash flow per annum for many years to come, a real testimony to the Barrick operating philosophy. The new Barrick's foundational objective was to build a business capable of delivering the industry's best returns. Two years on we've made considerable progress towards that goal. The dividend has tripled, cash flows have increased to record levels, and the once crippling debt burden has been lifted. These achievements were produced on the foundation of a great asset base, a fit-for-purpose corporate structure and a lean and agile leadership who have more than lived up to our best people mantra. We've had our fair -- of challenges of course and then some, but we've overcome them. We've found or created new opportunities to support our sustainable profitability strategy and we're more than ready to exploit the openings that will be offered by the dynamics of the gold industry. And finally as is customary, how would I look back on our performance since the merger? While I firmly believe there is significant value left in our share price before any further improvements or growth prospects, we have already demonstrated clear outperformance. As can be seen from this chart, Barrick's share price has outperformed for the past 30 months. A shareholder in either Randgold or Barrick at the time of the merger would now be some 30% ahead of the GDX. Importantly, we are just at the beginning of an exciting and value-creating journey. Thank you everyone for listening and thank you for your attention. I've got a good spread of executives on the call to assist me in any questions, so we'd be happy to pass back to the operator and take questions.

Thank you. We’ll now begin the question-and-answer session. [Operator Instructions] Our first question comes from Josh Wolfson of RBC Capital Markets. Please go ahead.

Good morning. Mark, I noticed there are a couple of headlines today on the topic of M&A and consolidation and the company sort of reiterating its interest in being part of those discussions as well as some views on copper. Could you sort of I guess, update us with what the views are more specifically I guess in terms of Barrick's own copper portfolio, and then maybe how you look at these opportunities in the context of the market today with there being a pretty material difference in how copper prices have performed versus gold?

Hi, Josh. So I think the best way for me to answer that question, which is pretty broad is to take you back to 2008, 2009, 2010 and 2011. We're in a very similar place today and it was a transformational period for Randgold Resources at that time, an increasing gold price. Notwithstanding that we did do a very critical deal right in the middle of a big bull market in acquiring Moto and ultimately that led to the Kibali mine of today. At the same time, we had a big capital program. We were building out on Tongon as well. And so we used that opportunity, not only to expand our business but also to pay down our debt. And you've seen the same focus this time around. We've brought the debt down. We have no net debt now. And we've started a dividend policy already before the gold price started moving. This has allowed us to return more to our shareholders as we did in the 2009, 2010; in fact it started in 2008, a 13-year successive increase in the dividends we paid, despite the ups and downs of the gold price. And Barrick is at that point. We've got -- we have committed to returning about a 3.6% yield on the share price of a couple of days ago with the proposed $750 million capital return that we shared with you today. And at the same time, we're not putting the company into any sort of debt, the net debt. We've got lots of liquidity. We've built out our exploration teams in all three regions, very solid leadership. I think we've demonstrated that our mineral resource management and our planning capabilities are now well entrenched. And our executive teams led by Catherine Mark and Willem, certainly can all take on an extra asset or in the case of Latin and Asia Pacific probably more than one, Mark would say. So, we're well positioned. We've got the strongest balance sheet in the industry. It's still growing. And so now it's about making sure that we deliver it -- deliver that value to our shareholders in a proper and considered basis. And again, the question I would ask is, in this bull market that we find ourselves in and everyone's baying for more and more money to be returned to the shareholders, very few people investing in their own future, everyone harvesting. And this is a cyclical business. We're up there near the top of the cycle and managing this requires some conservatism and considered decisions. And we think that we've certainly experienced in this. We've got good memories, particularly Graham and I and the other executives in my team. And so, now -- and there are lots of, lots of -- as you know Josh, there are lots and lots of businesses whether that's copper or gold that just three years ago certainly were on the watch list. And suddenly they are -- there's no risk and stress anymore. And so with that comes opportunity. As you know, the discussions between Barrick and Randgold started in late 2015 and took some time to find a deal which really delivered real benefits for all the owners of both companies. And so, we are not -- everyone -- as you see in the market today, everyone -- every time you wake up there's a different opinion that's considered to be the only opinion on where the markets are going to go and what's going to happen to gold and where you should be putting your money. And we're back in the great financial crisis as well. We believe that the short or near-term to mid-term outlook on global markets are not clear. We believe that the technical support for a stronger gold price is still very well embedded in the market and we certainly haven't seen the consequence of this unprecedented quantitative easing that we've witnessed in the last nine months, orders of magnitude of what we saw over the five-year plan. So, that's first of all the way we frame our business. Now you look at how you grow. The best way to grow in times like this, of course, is organically. And one of the things that I hope I shared with you through this presentation is every single core asset in Barrick has real upside that you can demonstrate both -- and in particular most of them new discoveries, as well as brownfields extensions. So that's the core component of our business. And of course there are and going to be further consolidation opportunities. And we believe that the challenge of doing those transactions is going to not only be commercial, but also the ability to be able to deliver a more aligned, more modern comfort to the owners the long-term owners of these companies. And so again, I started out with the sharing of our ESG strategy which I believe that ultimately is going to become a key driver in one's ability to transact going forward. I mean to your -- so that's gold side and that's our core business. On the copper side again we've demonstrated that we're capable of managing and delivering real value in the copper space. Lumwana has got a long history of poor performance. We've been able to rebuild it and position it. And we've always said our focus on copper is first prize, if copper comes with gold and younger gold/copper geological terrains; and secondly that we would pursue copper assets where they are located in countries where we have and can demonstrate a competitive advantage over the traditional copper mines. And we believe that sort of central African copper province offers that opportunity for us. At the same time down in South America there's lots of copper potential that comes with gold in the gold/copper porphyries. And again our exploration teams out into the Asia Pacific are also pursuing opportunities where again that geological association is clear. So we're not -- I think the market responds as though -- just because we talk about growth and we talk about the importance and significance of -- for Barrick to remain relevant in the industry it needs to broaden into copper as being that we're going to sort of go out there and just buy the first copper asset or company regardless of the opportunity to deliver value to both the target owners as well as our own. So we're not going to do that. You've walked this path with me for a long time Josh. We've got too many checks and balances in my executive team to go out there and do something stupid. So watch the space give us time. We'll keep building our business in a considered way.

Great. Thank you very much.

Our next question comes from Mike Parkin of National Bank. Please go ahead.

Hey guys, thanks for taking my question. One I had was -- we're seeing quite a cold snap come down through the U.S. And I was wondering if there's been any negative impact to the Nevada gold mines operations due to that cold? Or is it anything that you would expect to maybe drive a bit of a soft Q1? Or it's something that would probably bounce back with the resumption of kind of normal temperatures?

Mike I would just say that where our operations are located in Nevada, it's flipping cold this time of the year, regardless of whether there are cold snaps. We don't notice the cold snap. It was just cold. We look forward to the odd sunny day. So it's a bit like West Africa when you have three months of rain where you get one meter dumped on you. We don't see it appropriate to use weather to explain why we can't run our mines. So our team is well equipped to manage weather in northern Nevada, just like we are in the Andes in South America. So you definitely won't see anyone using it as an excuse cold weather.

Okay. And one last question on COVID. Do you see any potential to implement a company kind of sponsored vaccine clinic to get vaccines to your employees at a faster rate than government programs? Or are you looking at it to just leave it with the governments of your respective host countries and go that route?

Well what we are able to do is partner with our host countries and in the case of Nevada, our host state on combating COVID and its impact. And by two operations we now have COVID partnership-led PCR laboratories which support our protocols in that we can turn around accurate tests in a couple of hours. And that's been very helpful. We've got two more to really roll out a laboratory in Tanzania which we're working on; and one in Zambia. Now we've just put one into Hemlo as well. So -- or into the town of Marathon. So that's -- and again in all our countries we are very much part of the COVID task force. And our senior executives have now been included in the vaccine logistics and sort of management structures in our various regions and host counties or provinces. Catherine is very much part of that initiative in Canada, as well as in Nevada as is Greg in the immediate part of our Elko, Winnemucca region in Northern Nevada. And in Africa, we're part of the whole African union initiative to source and support the rollout of vaccines. It's a little more complicated there. But there's been some movement recently and we've seen the first Johnson & Johnson vaccines coming into South Africa. And we look forward to be able to manage that into the -- across the nations -- across the countries in which we operate in Africa. South America we were only partners with the Dominican Republic in setting up structures to purchase and order vaccines and get them into the country. We've got a very strong relationship and worked extremely well. It's one of our most responsive COVID initiatives as being -- as you know, Dominican Republic being a holiday destination got hit very hard in the early days of COVID. And then we are working again with the Argentinian government on sourcing vaccines. Again all the emerging and developing world are slightly behind the developed economies as far as rolling out that vaccine. It's absolutely critical for the [Technical Difficulty] to manage a global solution on the vaccine rollout. And so we are part of it. At this stage, it is not possible for private enterprises to purchase vaccines themselves, but we are partnering with our host countries. And already -- for instance in Nevada we're talking about rolling out some of the vaccines to the critical support staff within the mining industry as well as other industries. So it's a very collaborative initiative, and we're -- I mean it's been an impressive partnership across all 13 of our host countries. And I'm optimistic of bringing this pandemic under control in the medium-term. It's definitely not going to happen as quickly as everyone would have liked and so it's very important we all continue to exercise discipline and respect the protocols of social distancing et cetera until such time as we get herd immunity entrenched in our populations.

Thanks, Mark. And all the best in the negotiations with Porgera.

Thanks, Mike.

Our next question comes from Danielle Chigumira of Bernstein. Please go ahead.

Right. Thank you. My first question is on your climate targets. So they seem significantly more ambitious than those set at the Investor Day. And so could you give us any color on specific projects or specific actions that you're planning, which will lead to those higher reductions in greenhouse gases?

So Danielle, we are ambitious. I mean, we are very clear that our target is to achieve a 30% reduction by 2030. And I think the net zero target out to 2050 is a bit academic at the moment because I don't think it's -- I know there's no gold mining company that goes to 2050 in the current plans. But important is that we, I and my team, my enlarged team now have always been absolutely clear that we manage our business on tangible plans. So there's a target. Everyone's been under pressure to accept that they're targeting X, Y and Z. That doesn't mean anything if you don't have a real plan against, which you can measure yourself. And so we started out with a plan to deliver a 10% reduction last year in our 2019 sustainability report. We've now increased that to 15% reduction. We've got a serious plan. Every single one of our operations has got a very specific greenhouse gas strategy whether it's Veladero where we're rolling out the connection with the -- to the Chilean power grid, which is the -- has more sustainable power component to it than any other power [Technical Difficulty] and so that really does take away significant emissions and also drops our costs materially in Veladero. In Dominican Republic, we are the leader in that country with the conversion from heavy fuel to natural gas driving big turbines very efficient, very low emissions and not only for our [Technical Difficulty] PV, but also for the nation. In Nevada, we bought with the joint venture the Newmont coal power station. We're already well down the road on converting that to natural gas. And also we are busy permitting a 200-megawatt solar power station, which will be linked to that natural gas power facility. And we've got a second one as well. In Kibali, which is our youngest mine in the group that we built on the back of hydropower installations and recently as I mentioned in my speech, we've added a big battery to that. And we've learned so much about how to form a grid a mini grid in a remote place like the jungle in DRC. And that battery technology has proved to be invaluable and we're now looking at changing around the whole construction of our grid and using the battery as the formation -- to form the grid and the power -- the hydropower to actually keep the batteries charged. And Kibali is unique in that, it's got a big hoist and it's constantly drawing large amounts of power from the grid. But what we've learned there, we've just commissioned a 20-megawatt solar power station in Morila in Western Mali. And we know that there's an opportunity to install similar battery technology in -- sorry not Morila, in Loulo-Gounkoto and be able to form the grid and use the solar to keep those batteries powered and therefore do away with a lot more of the diesel and heavy fuel power component of our power station there. And then the opportunities in -- Porgera has natural gas power and there's more and more opportunities now as people start investing in hydro in Papua New Guinea, which has got some very exciting potential sites for hydropower, particularly in our -- up in the highlands. So, when you walk through our portfolio, I've just given you a quick brush of what -- and what was -- you can't just say, I'm going to reduce power. You've got to be able to plan to do it. And one of the things that Barrick is investing in is, that technology to ensure that the next new mine we build has even more efficiency built into it as far as generation goes compared to, for instance, Kibali. So we're learning every day. And I believe that if we continue with that focus then every single general manager, senior executive in Barrick is an owner of this commitment to our stakeholders. I hope that answers your question.

Yes. That's very useful color. Thank you. Just one more for me. On Tanzania you talked about making North Mara plus Buly a tier 1 mine and I'm trying to conceptualize how that happens. Is it the case that some of the geological upside results in a different way of operating those mines, like in a broader complex? How should I be thinking about that?

The 300,000 ounces out of North Mara and more than -- about 250,000 ounces out of Bulyanhulu, you add them together, that's 550,000 ounces. And if North Mara is a moderate-grade mine, Buly is a high-grade mine. We drive the cost down to the bottom half of the cost curve and you've got a tier 1 complex combined in the country. And they both have more than 10 years life, substantially more than 10 years life. So that's really our focus. And what -- North Mara has got a bit of a way to get to that low end of the cost curve, but we'll get it there because it's got so much upside. We've still got to lift the production. Buly is helped significantly by the grade of that ore.

Great. That's useful. Thank you.

Our next question comes from Mike Jalonen of Bank of America.

Hi, Mike. I hope all as well and you're not facing a cold snap in Port Moresby. Just moving to -- I have a question on Hemlo. The -- intrigued by the steady state 1.9 million tonnes per annum production. What are the -- how much tonnes will come from each of the mining fronts to get to that production level? And what will that mean to the mine production? Thanks.

Right now, Mike, there's again no chance of a cold snap here in Port Moresby, I can assure you; buckets of water, yes. About the coldest you get is when you turn the air conditioner down to about 16 centigrade. The Hemlo is -- our outlook this year is about 210,000 ounces and the plan is to get it up to about 250,000 ounces from underground. And that's why we need that extra access in the upper C Zone which we're developing now. And, I mean, you can do the math just work it back. But it's really -- it's a two -- I mean our first prize would be to get it up to 250,000 ounces. As we improve the infrastructure, the hoisting, the ventilation, one of the big challenges is getting a lot of the waste out of the mine to improve our logistics and ore movement. Right now, all that is constraining. We've still got to develop more long-haul open-stope opportunities. We've got to improve our backfill and we've still got quite a bit of remnant mining that we're doing in this next year and perhaps the year, call it, to 2022. And at the same time we're drilling and building that reserve base to support a plus 10-year plus 250,000 ounce producer, which makes it a substantial Canadian gold mine.

Okay. Well, thank you and good luck there.

You know that mine well, don't you Mike?

Saw it in 1980 -- no 1988 with Corona.

That's it. And it's still got legs.

Yes, it does.

Our next question comes from Anita Soni of CIBC World Markets. Please go ahead.

Good morning. So my question is with regards to reserve replacement. So I saw some strong reserve replacement at pretty good grades. But I'm going to ask you about the question -- the areas that lagged a little bit, particularly at Nevada Gold Mines. And you guys have mentioned that, it's going to take a few years to fully see the results to get it up to where you are in Africa in terms of reserve replacement. So can you give us a little bit of color on the plan forward in the next year or two in terms of getting that -- those grades and those ounces back up?

Yes. So, Anita, just trying to explain -- I'm not sure about what you're talking about there because the -- if you look at North America, we went from 31 million ounces in 2019 this is reserves at 2.68 grams a tonne to 29 million ounces at 2.8 grams a tonne. So the -- if you look at Africa of course, we've grown certainly on the back of the Loulo-Gounkoto and Kibali and North Mara replacements. Tongon is a tougher nut to crack because it is in decline. And Bulyanhulu, the big growth will come as we complete the underground feasibility study. So -- and North America is in good shape. It's -- first of all you've got to build the resource profile and we're very disciplined on the grade. And so we've done that. And hopefully Anita you would have seen in my presentation me pointing to further resource expansion. And you've got to build that front ahead of the mining phases in this -- in inventory first then in inferred. Ultimately it gets into measured and indicated which results in reserve. And it's going to take some time. But 76% replacement right now with more than 100% replacement on the resource category bodes well for us to get all our assets delivering reserve replacement over time. And I'll just take you through it. As I pointed out PV is a simple case of significant reserve growth. Veladero we didn't get the drilling done, we wanted to in 2020 because of the restrictions of COVID. So a lot of that drilling has been rolled over to this year. And again, we expect to make significant progress in the skinners, the four quarters expansion of the current Veladero pit. And then we've pointed to North Leeville some significant upside potential. Rita K we're busy drilling out. We've got the lower part of Rita K now coming into the mine plan and reserve conversion. In the upper part, we're still dealing with the water table and making sure that it's accessible which means you can bank it. Ren we've got some into our mine plan in reserves but still quite a lot more outstanding. There's still work to do in both Turquoise Ridge underground as well as Twin Creeks. And then Cortez as we develop and deliver on the feasibility study for Goldrush, you'll see some significant ounces flowing into that complex. So I'm really very comfortable about where we are as far as understanding our geology and being able to with some -- when I go to the mines now just like I go -- get in Kibali and Loulo the MRM team have a plan to convert so it's part of our business. And I mean we even added ounces in Porgera just before this close. So -- and that's got some significant upside and that's what comes with tier 1 assets. So I hope that gives you some comfort. That -- and the most important thing is that the quality of our resource/reserve is still intact. We haven't allowed anything to deteriorate on the back of a higher gold price. We've kept the $1,200 discipline.

Yes. No I did notice the grades were maintained or if not improved at most of the assets. I was just drilling into some of the Long Canyon Phoenix Carlin and Turquoise that didn't quite keep pace with the rest of the assets, but thanks for explanation. And then...

Okay. If you are worried about Long Canyon remember we've stalled Long Canyon, as we recut our permitting. And so that's looking for the second phase expansion of the life of mine and that would also impact our reserves. At the moment, we don't have a permit so it's not coming into the reserve that part of Long Canyon.

Okay. And then my second and final question I guess is a long one. But you've talked about industry consolidation in the gold space. And I just wanted to understand what exactly it is that catches your eye so much with the assets that are out there. And if you could give us some parameters on what exactly you're looking for and how that competes with your internal projects.

Okay. So I guess the best way is to wind back everything to 2017 early 2018. And you -- and your portfolio of companies you're covering a lot of them were very stressed. And then suddenly everything is utopic with a higher gold price. That doesn't change the long-term profitability of our industry. And then, we've got a couple of single-asset companies that have struggled to deliver against their feasibility study, but being kept alive by a higher gold price. And our industry is right now at a place where it's not worried about its future and I'd point this to both the fund managers who are keeping -- demanding cash returns not worrying about how you package -- use this higher gold price to package -- repackage our industry which is required to create a relevant industry as allocation of capital becomes more -- sort of larger and more clumsy going forward because the funds are just getting bigger and bigger and they need the dollar to be moved more. And so -- and at the same time we've got management teams that are just hanging on to this opportunity using the COVID and the higher gold price to prevent the conversation around consolidation. But it's not going to be like that forever. We've seen the market respond on softening gold price albeit that it's way above the sort of average. And that's why it's important for Barrick to have the strength, financial and management bench strength to be able to force some of these opportunities. On the criteria, we've been very clear. We look at two categories of opportunities: tier 1 which is plus 500,000 ounces at the bottom half of the cost curve or within the bottom half of the cost curve; and tier 2, which is sort of above 250,000 ounces at the bottom half of the cost curve and both having at least 10-year life-of-mine potential. And in times like this as I touched on in my presentation is -- Moto acquisition we made in 2009 in the middle of the crisis a very solid well-structured bull market in the gold price and we did that acquisition. It was a world-class acquisition. We read it right and it has delivered enormous value to our business. And so the key here is not to buy. And I would -- and it's a conversation that should be had because just sucking money out of the gold industry doesn't do anyone any favors. But this industry is -- was very precarious in 2017, early 2018. It hasn't changed. It's just you can't see it because of the higher margins. And so I think it's important that we -- and that's why I keep bashing that drum or beating that drum in that I think we need to do it. And notwithstanding that, as you've seen, Barrick has rarely invested in its organic opportunities both brown and greenfield and we'll continue to do that as well.

Okay. Thank you. Just wanted to close up by congratulating you on your cost control. Those are -- that's pretty good results considering the past year and the year going forward. Thank you.

Thank you and I appreciate that coming from you.

Our next question comes from Matthew Murphy of Barclays. Please go ahead.

Hi, there. Just wondering, if you're still expecting to formalize a dividend payout policy this year. I thought it might have come with this quarter. Or is it something you're looking to do early this year?

Matt, yes, yes. I think it's important -- and I touched on this in another answer is that a lot of debate at the Board and amongst our executive team on how we manage this. Again if you wind back to 2008, 2009 and 2010, the way we managed that return of capital to shareholders and our dividend strategy they are very similar this time around. We have no visibility of how the short- to medium-term economy or our market looks like. And I think we definitely -- I mean we realized non-core assets, we believe it's important to return -- makes logical sense to return that -- part of that to our shareholders, which I've always done my whole career. We've used the cash generated by our business to bring down our net debt and cover ourselves and so that we are completely independent of the capital markets and are able to run our business without interference. So that's done and I'm very happy with that. We will continue to build the cash portion of our balance sheet through this year, if the gold price stays above $1700. And we believe that this whole unprecedented scenario is unclear and extremely dynamic and I'm pretty confident to be able to bet you that the current analyst outlook on what it's going to look like in 12 months' time is all wrong. And so our Board and debate with our management team have landed on the fact that it's better to return this. It's a significant return. Added to our $0.09 a quarter delivers about a 3.6% yield at current gold -- share prices actually a bit higher than today. And then we'll reassess things next year where I'm sure things will be a lot clearer to everyone.

Okay. Thank you.

There are no more questions from the conference call. This concludes today's conference.

Thank you very much. Sorry, thank you. I'd just like to say to everyone thank you very much for making the time today. Very pleased that we got through this presentation. A lot of people put enormous amount of effort into the communications and everyone was really concerned that we might break our communication through this process. So thanks to everyone that put effort. And again thank you for making the time to join us and we'll speak to you soon.

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.