Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick 2022 Third Quarter Results Conference Call. During the presentation, all participants are in a 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, November 3rd, 2022. 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 again welcome to our presentation of the Q3 results today. We present -- for those who don’t appreciate, we are presenting from the London Stock Exchange today and it's so nice to see those familiar faces and not so familiar faces. That brings back lots of memories for me being here. And also, times like we are today, not always up but also down. And so I look forward to getting some questions from the floor and thank you very much for coming out in person today. As I've said many times before, the troubles that have been closing in on the global economy, including the mining sector tightened their grip in the last quarter, and Barrick, however -- as I hope I'll be able to demonstrate once again, is well placed to contend with these challenges. Thanks to the disciplined execution of our long-term value creating strategy, we have and still are focused on maintaining a strong balance sheet. Our dividend policy is delivering sustainable returns and we continue to extend our life of mine plans to ensure that our tenure production profile remains intact. Our successful exploration programs are feeding high quality prospects into an already bulging pipeline and while our focus is on organic growth, we are also keeping an eye open for value adding M&A opportunities, albeit that those capable of meeting our strict investment criteria remain few and far between. Please take note of our cautionary statement and for those who wish to study it in more detail, it's available on our website. We had a softer quarter in quarter three, as I'm sure all of you noticed and we guided you to and it was mainly due to a sequencing…

Yes. I wanted to ask you one more question and thank you for your comments about the outlook for 2023, that would have been my natural follow-up. So, I also just wanted to ask about your comments around Argentina and your latest thoughts and whether or not you see any potential for improvement from there based on what you're seeing at both the state and federal level? Thank you.

Yes, Argentina is a very frustrating currency -- country on every aspect. It's got so much going for it and it just -- the politics is just crazy. And I'll just give you an example. If you look at our truck drivers, which are part of a union, and the regulations behind adjustments -- salary adjustments. And the Argentinians are managing this crisis, like the South Africans used to manage sanctions, they've introduced an artificial exchange rate. So, we've increased the last 12 months our driver salaries by 50% in U.S. dollars. But the drivers are still earning the same in pesos. So, that's how an unnatural and non-market exchange rate when it's forced onto you, and that's the problem and Argentina, as you're getting -- a forced inflation or increase its price increases, not really inflation, through regulations. And again, and the government is obsessed about protecting dollars, but we make the dollars and that's what we say to the central bank, Governor, we make the dollars, you should be working with us to get more dollars, so you can settle your problems. And they've just introduced a regulation where when we make purchases, we have to -- we can only pay for the purchases 18 months after they arrive in country. So, it's fine for Barrick because we've got a balance sheet between U.S. and Shandong. We can finance that but for smaller mining companies, it's very tough. And it's the same when we looking for to keep money offshore, we got to pay dividends and we want to get some returns back. And they will give us a 20% retention of the dollars offshore. But we are expected to pre-finance the gold sales. So, we do that because Barrick's got a big trading arm and it's -- and we make money out of that trade. But again, if you don't have that capacity, it's hard to do business. So, -- and we talk all the time to the central government and they're very accommodating in the conversation. But they just can't get themselves to understand what needs to be done to unlock the hard currency component of their economy. And they've got plenty to deliver dollars, it's a great tourist attraction. It's got fantastic agriculture, some of the best ones in the world, and it's got mining. So, it should be able to work it out. And for some reason, the folk in Buenos Aires are struggling to get catch up with that, Economics 101. Does that answer your question?

Yes, that's perfect. And if I could actually sneak in one more question, maybe just your comments on M&A activity in fact, there you mentioned that you continue to be on the sharp outlook for opportunities, but they're just not meeting your investment filters. Can maybe just refresh what those investment filters are? And how important you consider M&A to Barrick's sort of strategy going forward?

So, let me rephrase that because I don't see we want to get the message across. There's a scarcity of high quality assets and we coined the phrase Tier 1 which has been adulterated by most folk as far as the definition goes. And Tier 1 asset in gold means 0.5 million ounces for at least 10 years at the lower half of the cost curve. And a Tier 1 asset for a copper project is more than 5 million tons of contained copper, or a 30-year life and also at the lower half of the cost curve. That's simple and then you do that you make money, I can assure you make money. And we use -- we calculate those returns at our long-term strategical price. So, that's what -- and there's not many out there. And we've actually -- there's probably in gold, probably 12 -- 11, or 12, we've got six of those. So, there's not 22. And so that's the challenge. And we've -- you've seen us play in the market on all the sales at the back end of last year, the beginning of this year and walk away from every asset because it doesn't fit our criteria. And a lot of those transactions were done at assumed prices above what the spot price is today and you've got the increase in costs. So, it's not a healthy situation and some folk in Canada seem to think that the only way to grow is through M&A. And I can tell you, that's not the way you grow value for shareholders.

The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.

Good morning, everyone or good afternoon. Thank you so much for taking my question. I've got three. I'll try to make them quick. The first one is just on Nevada Gold Mines. Mark, when we were there at the on the mine tour in September, we talked about Nevada Gold Mines Q4 being about 1 million ounces of production coming for the quarter for Q4. Now that we're 1 month into the quarter, how does that outlook feel to you? Is it still doable with grade and throughput?

So I'm not sure where you got the 1 million ounces. Not sure, Tanya, where you've got those 1 million ounces from but close, not 1 million, around 950,000 ounces, and we're on track for that. This is Nevada Gold Mines itself, not North America. North America gets close to that.

Yeah, Nevada Gold Mines. Okay. Thank you for that. And you talked a little bit about growing your reserves at year end 2022. So first off, I just wanted to confirm that you're thinking about that $1,300 gold price up from 12 in -- and then when you talk about growing your reserves, just want to go around the world and think about the assets that are going to grow when we were at Nevada Gold Mines. I think we talked about reserves not being replaced this year at Nevada Gold Mines, but maybe we can go around the world and see where also we're replacing and is this separate from you getting the permit in H1 of next year for Pueblo Viejo and having that huge chunk of resources move to reserves. So I just want to understand where it's coming from and is it separate from Pueblo Viejo's reserve increase should we get the permit?

So you're right. Let me start with Nevada. You're right on that. It's about 50% will replace in reserves, but we're growing the resources. And Nevada given its size, it's a cyclical thing. So it takes a while to build up the resources and then you -- and we showed you those resource growth projects, which will ultimately transition back to reserves. And the reason for that -- for those who don't follow this closely like Tanya is we've got -- we drill them out first from surface, then we've got to develop to the resources and drill it out from underground. So this cycle is much longer than, for instance, our African assets, where in Africa, we should replace and add about 1 million ounces, Simon, about 1 million ounces, net increase in reserves, 3.5 or so -- no, it's -- the current production rate on a 100% basis and then about 1 million ounces of additional reserves. You okay? No, I'm not, because he's going to have it on a slide with the detail. And then on Dominican Republic, we've always pointed to 9 million ounces of potential conversion on a 100% basis. And that more than makes and again, we're still working on the final pit. As I said, we're sizing that tailings facility, and that more than makes up for the rest. So there's some smaller additions in Veladero, but it covers the 50 -- our share of 50% that isn't converted in Nevada and it covers all of LatAm, Asia Pacific. So that's really the broadly and we'll give you more detail as Graham says at the Investor Day. And then I would add the $1,300, Again, just to put things in perspective, it's not about $1,300. It's about the input cost model we use to set long-term gold prices. And so more or less, the inflation -- our view of the long-term impact on input costs at this stage is around $100 an ounce. And so that's where we are indicating we might land with the new reserve long-term gold price. And on the copper side, it will be above 2.75, and we're busy working on that as well. And we use an input cost model to manage our long-term revenues rather than take a guess at the gold price.

Okay. So just from my own understanding, so when you do talk about the increase in your reserves at year-end does include the Pueblo Viejo conversion from resources to reserves?

Exactly. That's always been the case. Yeah. Tanya, to point out that remember, when we did the deal, DR was a real issue because it hadn't repaid its capital, its original capital. It paid out over $3 billion to the government and it had more reserves locked up than it had to -- it could produce. I mean, it would -- we would have stopped some of the mining already this year. So, that commitment and partnership we've built with both the communities around our mine to be able to establish and sign off publicly on new facility and the government is significant, and it effectively delivers a new plus 800 million ounces a year mine for Barrick.

No, no, no, understood. And just my last question, if I could, I wanted just to ask about the inflationary pressures you're seeing. You mentioned electricity. Definitely, in that part -- your part of the world where you're operating, your power costs are high. Are you seeing any relief or maybe not as the momentum has declined, I guess, in the growth of inflationary pressures on labor and/or consumables?

So, I think we start, there's inflation and then there's input cost increases related to the geopolitical situation, which has got nothing to do with inflation, particularly coming out of Eastern Europe. And that's more the cost of energy situation. But there's others, explosives, et cetera. So you fix the crisis in Ukraine, you take all of that away. But then there's inflation, which is a long-coming issue, and it's a product of excessive quantitative easing. And we have a world today that's the global debtors multiples of global GDP. Just let me remind you, it started…. [Technical Difficulty] So there's nothing that keeps me awake at night in Barrick. You want to add to that?

Yes. Is this on? Yes. So Jackie, just to sort of take that and simplify it the formula that we put together was very purposefully done to deliver an additional dividend at times when our performance measured by our available cash resources was strong. But to give people absolute clarity on how that would be calculated so that they have the visibility of that, while still maintaining a dividend through the cycle. As Mark has pointed out, this is a cyclical industry, and therefore, perpetually increasing dividends is just is not a reality. So having a formula that is clear and that is linked to that cycle and -- but which is underpinned by a base dividend, we think is a responsible way of moving forward, and it was deliberately put in place so that when the market corrected, which it has, investors would have a complete understanding of how that dividend would be determined. So an answer to your question, no, we have no intention of changing that formula.

And I think the added thing -- I mean this is really, I find it difficult to follow. We have a mark an industry it was at $1,800 and above dollars. People declare dividend policies of ratios, share of cash flows, et cetera. which we refrain from doing or linked to the gold price. The gold price is down $300. The cost side of that equation is up $100 plus. And people are still keeping the dividends the same in a resource industry. That's your -- where your revenue is, you've lost 40% -- not quite, 30% of your revenue and you're keeping your dividend the same, doesn't make sense, and you're paying out more than your cash flow. So that's crazy. And that's what the industry -- some of the fund managers are looking for. I'm absolutely sure that the investors behind those funds don't want to see that. They are investing in our business because we're a resource business, and they want full exposure of -- to the metals that we mine. So -- and we plan to be absolutely reliable in the way we run our business as we have done for the last 30 years, and it's going to be the same.

That's very clear. Thanks. Thanks for that answer. That's really helpful. If I could ask as a follow-up, you've mentioned growth opportunities. And I know Reko Diq has been a big one for you. I saw the comments in the MD&A. And I know you're still waiting for some, I guess, events to happen on the bureaucratic side in Pakistan before you can move forward with Reko Diq. But is there any way you can give us sort of a timeframe for when you see that sort of coming together, and when you might be able to close that agreement and start -- restart the feasibility study and the work that you're planning to do there?

We've set ourselves the end of the year for the closure. It's at the behest of one, the Supreme Court because this is something we believe in, we believe in managing risk responsibly, and we've passed it on through the President of the country to the Supreme Court for reference. Once that's done, it will go back to parliament to get certain legislation pass and it's an omnibus legislation focused on the whole industries, which we've negotiated. And once we've got that, we'll sign the documents. All of the documents are settled. All the agreements are settled, they're just waiting for that process. We have -- in the meantime; we are doing some work. We've completed the baseline study, the environmental baseline study. We need to get that in place because we need a couple of seasons to be able to refresh the 2011 environmental permitting, because it's timed out. And -- but so we need some and we did that -- we're improving the infrastructure with the airstrip at site. And we've started to invest in education initiatives, potable water, and we've certainly done all the remodeling we can do in designing of the limited amount of drilling that we play into geotech. And so we've done all that design. We've engaged with the tendering for the drilling work that we plan to do both water and the confirmation drilling of the main resources, and we're going to do some seismic work. So we also are busy with that final design on the seismic work focused on understanding the aquifers. We've, of course, as you would imagine, well down the road on infrastructure and logistics, planning and confirmation and designing the way we're going to manage access and in and out of the project. We're also building a project team, which will be located out of Dubai initially and ultimately migrate to the country. But in the design side of things, it's the most central place. It's a short flight, and there are four flights a week into Keta, which is right next to the mine. And -- but we can get all the engineers and experts into Dubai one flight from anywhere in the world. So that's what -- that's the sort of preliminary work that we're doing ahead of any final closure of the agreements.

Thanks. So it sounds like next year is going to be super busy there.

Next year is going to be super busy in Barrick as it always is. This year was very busy as well.

Okay. I believe you. Thanks very much, Mark.

The next question comes from Cleve Rueckert with UBS. Please go ahead.

Hey, everybody. Hey, Mark. Hi, Graham. Thanks for taking our questions here. Just a few quick ones, hopefully from us. In terms of the sequential increase in production, Mark, sorry, if I missed it, but did you give us a sense of how much you expect the grades to increase? Is that that production increase pretty much all grade? And then I guess with that, we're just trying to figure out how much we could expect costs per ounce basis to come down with that increase in production?

Yes. I think it is slightly grade improving, and its also oxide. So, a bit of an increase in recovery, because we use the mill 5 particularly at Crossroads. And there will be a drop in cost -- unit cost, that's per ounce cost on the back of an increasing production level. And I think that's a good enough bit of guidance at this time. I've got compliance standing in front of me sort of giving me faces.

All right. But it's great improvement not moving more tonnes.

Look, in Nevada, there's always some tonne variation, but it's usually when we're mining through leachable material, and we put it on the leach pad. So and that's very important for us, because it adds ounces without consuming capacity. But as far as the roasters go the autoclaves, we're process constrained. So the way to change it is grade and all oxide ore through the oxide malls.

Okay. All right. That's clear. And then I got to ask just a follow-up question on capital allocation. Look, the message about this industry being cyclical has not gone unnoticed. So I appreciate approach to it. But you did say earlier in the call that with the stock where it is, you're going to increase buybacks. And I mean that obviously has an effect on the cash balance. And I'm just curious how you're thinking about it, if you've got any feedback from your larger shareholders, whether there's a preference for buybacks today or kind of allow the cash balance to build and let the dividend do what it does on the back of that?

So we manage that all the time, and it's not about capital allocation, it's about returns to our shareholders and the ability to invest in our growth projects. And so when you look at our allocation, really, it's -- first, we -- it's absolutely the right thing to do when you get a share price sitting where it is today to buy it. It's the best use of funds, because it's clearly, no one believes in it, and we do. And so we've continued to buy on a proper considered program every, so we don't just go and buy our whole pile. We manage the purchase -- the repurchase plan. Of course, we have committed to a base dividend. So we manage that in our cash flow, but the performance dividend is linked to cash on the balance sheet, and that is -- and it's designed that way, as Graham pointed out earlier, because when we invest in a project, we'll drive that cost, that cash position down for a period. And so we'll -- and we know that we can -- our hurdle rates are so high that we beat most fund managers growth performance in investing in our own projects. And that's what we have for. Otherwise, if our investors or the fund managers who are custodian of our investors' money feel they can do better than they should sell the stock and invest that money elsewhere, but that's our business. That's our model, and that's why people buy our share. And if that -- I'm sure that makes sense to you.

That's clear. Thanks Mark. Appreciate it. See you in a couple weeks.

At this time, there are no more questions from the conference call.

Okay. Thank you, everyone back there. We are in this call now. Everybody got questions.

Nothing, -- you want to drink?

You just want to drink. You're not going to outbid the Canadians on questions. Are you? All right. Well, thank you, everyone, again, for coming. We're going to be outside. And so if you have questions that you too shy to ask in public, we're 100% available to answer them. The whole team has to got the explorers, the tax guys and the people involved in Pakistan, and of course, the beanies, the chief beanie as well. So we'll see you outside. Thanks again. Thank you, everyone, who have phoned and appreciate your time. And we look forward to talking to you at our Investor Day. And we are on a road show, so we'll see some of you as we go around the world to get into New York in two weeks' time. So cheers.