Barrick Mining Corporation (B) Q1 2024 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to Barrick's Results Presentation for the First Quarter of 2024. Following today's presentation, a question-and-answer session will be conducted. [Operator Instructions] As a reminder, this event is being recorded and a replay will be available on Barrick’s website later today, May 1, 2024. I would now like to turn you over to Mark Bristow, President and CEO of Barrick. Please go ahead, sir.

Thank you very much. And just before we start, let's just check the sound because there's a feedback on it. How are we doing? Are you sure? Can somebody confirm that? Okay. With that, very good morning and good afternoon, ladies and gentlemen and particularly for those who've made an effort to come out and join us in person. Thank you very much for coming out. I thought, I'd start today looking across the world, where we've witnessed change accelerating, uncertainty becoming more permanent and chaotic events a lot more common. The global pursuit of renewable energy has boosted the demand for copper and with it, the price up 15% in the first quarter of this year. Unprecedented conflicts plus economic uncertainty have driven the gold price up 15% last year and by the same margin, so far this year to record heights. Confirming once again the metal status as the ultimate safe haven asset. Disappointingly, Barrick's share price like those of its peers is lagging the gold price, which raises the question. If you believe in gold, why not invest in the producers? The investment thesis as far as Barrick is concerned is that, our embedded ability to grow our copper and gold production will amplify our profitability in a rising commodity market, as I'll show you in the course of this presentation. As this presentation will include some forward-looking statements, I draw your attention to the customary cautionary statement, which can also be found on our website. Barrick currently directly and indirectly, employs more than 50,000 people across our operations and their health and safety are our primary concern, which is why, I start the presentation with a report on our past quarter's performance on this front. Tragically, our African mines had two fatalities in January, as we announced at the time of our quarter four results. This has intensified our ready laser focus on eliminating fatalities as the critical component of our journey to zero and a carefully considered fatal risk management program has been rolled out worldwide. This has been receiving an enormous amount of focus over the past 18 months, and we as an executive team are determined to achieve our goal of zero fatalities in our operations. On a more positive note, our various injury frequency rates continued to decrease significantly against the same period last year. This last quarter, 10 of our sites were lost time injury free. The Latin America and Asia Pacific region has had a particularly good run and safety record, having just completed 14 consecutive months with no lost time injuries. Closely allied to health and safety is our complete commitment to sustainability in its broadest sense. Sustainability was the DNA of our business long before what is now called ESG. It's long before that ESG became an investment metric. Our distinct holistic approach grounded on the concepts of partnership and stakeholder recognition has earned us our critically important social license wherever we operate. Some of the past quarters' achievements are listed here and we'll give you a flavor of the tangible results we are achieving. You will find a comprehensive account of our performance and targets in our Annual Sustainability Report scheduled for publication later this month. I urge you to look it up on our website. We turn now to the overall highlights of the past quarter. As guided, it was a similar start to the year as last year. Gold production was in line with plan but down on the previous quarter, as I'll explain in the next slide. We remain on track to meet our full year guidance. Copper production was also in line with last year and like gold is forecast to grow through the year . I'll also deal with the improved financial results, compared to this time last year a little later. Success saw brownfields exploration, the very engine that drives Barrick's unparalleled ability to replace its mined reserves continue to deliver and the greenfields programs are expanding our portfolio and opportunities around the globe. These are the operating results. As anticipated, seasonal maintenance, the most important being Pueblo Viejo conveyor rebuild and mine plan sequencing resulted in lower gold production, which in turn increased our cost per ounce. The commissioning of PV's replacement conveyor is now complete and the resumption of mining and processing at Porgera will also support the gold production ramp up we have planned for the rest of the year. The lower production offset by higher gold price and supported improved financial results, when compared with the same period last year. Year-on-year net earnings per share increased by 143% for the quarter, while adjusted net earnings per share grew by 36%. At $0.19 per share, we were ahead of consensus for the quarter. The attributable EBITDA margin rose by 5% to 41% and the operating cash flows remained strong at $760 million. The quarter dividend was maintained at $0.10 per share and it's worth noting that at a time when both the gold and copper sectors are ex growth, Barrick's strong balance sheet supports its organic growth projects, enabling it to project a significant rising production profile for the next five years and beyond. We start the operational review in North America as usual with the ramp up of the Goldrush underground mine now well underway at Nevada Gold Mines. Our focus has also shifted to the nearby Barrick owned advanced Fourmile target with its world class potential. The successful permitting of Goldrush will accelerate Fourmile's progress up the value curve and a significant evaluation drill program has commenced this month, testing the large inventory base and growing the mineral resources to inform a pre-feasibility study decision expected by the end of this year. In other news from Nevada, the continued greening of Barrick's global grid advanced with the commissioning of the first 100 megawatts of the TS solar power plants, which is expected to have the second 100-megawatt phase commissioned in the second quarter of this year. As guided, Nevada Gold Mines made a softer start to the year. Cortez came in ahead of plan, in fact significantly ahead of plan. Carlin was on track on a run rate through for the whole year and Turquoise Ridge is expecting a significant improvement as it addresses its back full and development backlog following a planned shutdown in the quarter. For a supposedly mature gold district, Nevada remains a highly prospective Tier 1 terrain for our exploration team. The many substantial brownfields targets shown on this map will support its five year reserve replacement program and the team is advancing a pipeline of exciting greenfields targets. Meanwhile, continued work on our ore body models have highlighted some significant untested potential. I've spoken to you about the greater legal before, but another example of this work is shown in these before and after cross sections of the Turquoise Ridge deposit, demonstrating how the updating of geological models can drive growth. It's early days but this process of remodeling has generated some exciting new targets as highlighted in those red circles on the right hand section. I anticipate that these will result in substantial additions to the already high-grade Turquoise Ridge endowment. We move now down to the Latin America and Asia Pacific region, which had a very good quarter all around. Highlights included the progress at Pueblo Viejo which I've already referred to, another strong performance from Veladero and the restart of operations at Porgera. Reko Diq's feasibility study is on track for completion by year-end with first production scheduled in 2028. Pueblo Viejo processed lower grades while its new conveyor was being rebuilt and this impacted production for the quarter, which also affected costs. The replacement conveyor has now been commissioned and the plant is expected to ramp up during the second quarter. As production increases, we expect costs to come down. With the plant expansion now substantially complete, the focus has shifted to the related new tailing storage facility where work is progressing as planned and the feasibility study is expected to be completed in quarter three. I referred to the Pueblo Viejo expansion earlier as our flagship organic growth project and this is why. It will increase and sustain gold production at or above 800,000 ounces for at least 20 years. It's worth remembering that, Pueblo Viejo was on the verge of closure five years ago, when the new Barrick team figured out how to unlock its vast reserve and secure its long-term future as a Tier 1 gold mine. Shown here is a graphic illustrating the impact equipment failures had on the project last year and more importantly, where we're headed now with the new structure having been rebuilt and commissioned. In Africa and the Middle East, Loulo-Gounkoto produced its usual steady Tier 1 performance. The feasibility for the Lumwana super pit expansion remains on track for completion by the end of the year and the infrastructure for mining, the Jabal Sayid Copper Mines Lode 1 was completed. Continuing transition to renewable energy at Loulo-Gounkoto and Kibali also delivered significant savings. Loulo-Gounkoto increased production and kept costs tightly controlled. Its second solar plant was commissioned during the quarter, replacing heavy fuel oil with solar power as an energy source, delivering a cost saving of some $6 million just this last quarter. While on Mali, we are aware of press speculation originally reported in Africa last year and recently picked up by the Canadian media about the government's so called intention to expropriate the Loulo-Gounkoto complex. As we have previously disclosed, we have been in ongoing dialogue with the Government of Mali on several matters that impact our operations. As part of our engagement, the government has recently confirmed to us that they do not intend to expropriate the complex. Like any government, Mali wishes to maximize their benefits from mining and Barrick remains committed to an equitable sharing of those economic benefits with our host country, while protecting our shareholder rights. Our engagement with the government is continuing on that basis. The Loulo district remains highly prospective. Deep framework drilling is targeting the potential for the large-scale extensions on repetitions of the main high grade Yalea system. Results confirm that the system is still open with high grade mineralization present at depth, while shallower drilling to the south is returning encouraging intersections from main Yalea structure. And at Kibali, production was down in line with lower grades from planned waste stripping at two open pits. The mine is expected to show much improved results on the back of higher grades in the second half of the year, as we complete that stripping. Exploration during the quarter around Kibali further defined a significant high grade trend immediately adjacent and similar to the massive KCD deposit, on which Kibali was built. We are modeling numerous high grade intersections and potential load shapes, which could deliver a substantial satellite project. In Tanzania, North Mara's production was lower quarter-on-quarter, in line with its mine plan. Lower production meant higher costs. Bulyanhulu production was flat with higher tonnes processed offsetting lower grades. The lower grades with the higher tonnes were reflected in the increase in cost for the quarter, but again we're expecting that to come down over the next three quarters. A globally significant organic copper growth project, the Lumwana Copper Mine Super Pit Expansion is on track for first production in 2028. The accelerated feasibility study is scheduled for completion by the end of this year with construction works expected to start in 2025. The expansion will transform Lumwana into a major copper mine with a life of more than 30 years. A planned shutdown and lower grades reduced production in quarter one, but again higher grades going forward will deliver improvements through the year. Barrick also on the back of all the rumors in the market continues to work with Cisco to alleviate pressure on the Zambian power grid and we do not expect any power shortages to impact production. We are in the process of finalizing a power supply agreement with Cisco, which will secure off-take from Mozambique. And in addition to this, we have implemented a cogeneration program using our diesel standby generators. This will provide alternative sources of power of some 29 megawatts, which is more than 50% of the Lumwana's current demand. I've often said that exploration is to a mining company what R&D is to the pharmaceutical industry. Discovery and development are the only true drivers of value creation in the mining industry. Our teams continue their search for Tier 1 opportunities across the world's gold and copper regions as shown on this map. In the United States, we continue to advance our Nevada portfolio both in the joint venture as well as in Barrick's name itself, along with developing opportunities in a number of other prospective states. In Canada, we're developing our growing portfolio of projects across the superior pattern. And in Latin America, we're testing priority targets around Veladero, Pueblo Viejo, Ecuador, Peru, and more recently, Jamaica. And in Africa, I mentioned the high potential targets around Loulo-Gounkoto and Kibali earlier and we're increasing our ground holding in many of the countries where we operate. And in Pakistan, our geologists are focused on unlocking the maximum value of the multiple known porphyries within the Reko Diq project area as well as looking for new near mine discoveries. And in Saudi Arabia, we've agreed with our partner, Ma'aden, to add additional ground around Jabal Sayid and Umm ad Damar and beyond to the joint venture. As I touched on earlier, our transition to clean energy is making steady progress and not only propels us towards our goal of a 30% reduction in greenhouse gas emissions by 2030 but also drives efficiency and cuts costs. Another object of key importance to us is ensuring we have a minimum impact on our environment today and for future generations. Our support of the Grumman National Park and the DRC and the protection of the sage grouse population in Nevada are just two examples of our approach to biodiversity. Ladies and gentlemen, to wrap up my presentation today, I thought it was worth recapping all the reasons why Barrick represents a standout investment opportunity. How you can see, there are many great reasons, which differentiate us from our peers including our unrivaled reserve replacement track record, high-quality asset portfolio and industry-leading balance sheet, which will ensure, we can afford our future growth and deliver more value to our shareholders. Today, we are the most undervalued major gold and copper mining company in the industry. But as we deliver on our operational plans and growth projects, I have no doubt that will change. Included in our portfolio is a copper business, which is already a significant contributor and positioned to grow. We have all seen the excitement around the latest BHP bid for Anglo American and it's clear that the driver of this bid is Anglo's significant copper portfolio. You might be interested to know that, when we have finished the Lumwana expansion and the Reko Diq project construction, our copper production will be on a par with Anglo's copper portfolio today. That's certainly not valued in our stock currently. On that note, I will end my presentation and we would be happy to take questions starting here in Toronto with the audience and before going to those connected through the webcast.

Thank you very much for the presentation, Mark. Lawson Winder from Bank of America Securities. I wanted to ask two questions. First would be, just about the commentary on the 2024 outlook around the royalty. I just wanted to understand, if you guys are concerned at meeting that cash cost guidance in the event that the gold price averages above $2,100 per ounce?

I mean, Lawson, it's all in the models and the plans going forward. As I said to you, if you look at -- I'll step you through it. Nevada is at a place now where we are absolutely clear about our cost and our production challenges and opportunities. I've been really working on flattening that structure and getting ownership at the mind site for those that have visited to our minds recently. And the big driver if you look at it in Carlin is slightly softer as per the overall grade that we're forecasting for this year, a slightly softer quarter on Carlin, because of the grade, but a bigger throughput. So we managed to get our gold production but the grade starts lifting up. And so we have an opportunity to drive down the costs. And so that's a big driver. There are two big drivers in Nevada that one and Turquoise Ridge. And Turquoise Ridge is all about backfill and making sure that the infrastructure to support our backfill, because Turquoise Ridge is a high grade mine, low cost, but it's geotech is challenging. So you've got to manage the extraction with backfill. And we needed to really put some more redundancy into our backfill infrastructure to make sure we can meet our plans. And that's what we did at the same time we went down for a big planned maintenance on the Sage Mill. And so those two drivers are the ones that catch us up on the guidance and bring the cost down because they are the Turquoise Ridge is more tonnes higher grade and so is Carlin for different reasons. And that's helped as you know that's the best way to deal with costs on a cost per ounce base. I would point out that the team has been really focused. As you know, I've always really been focused on and that is the unit cost per tonne. So we're much more comfortable that we're on top of that game on our unit cost per tonne in Nevada, which is really the thing that ultimately drives the overall cost per ounce. In Latin America and Asia Pacific, the key is Veladero. And again, we would have made our guidance last year if Veladero had got the ramp up right, but we had the conveyor belt infrastructure collapse --sorry, PV. Thank you for that. So we would have made our guidance if we had got PV right, but we had that collapse right in the fourth quarter. And what I said last time we spoke is that's an engineering challenge, which we've actually addressed now. We've rebuilt it, commissioned. So now we're ramping up the tonnes, which you saw. And with that comes the fine tuning of the flotation circuit. And we need the full throughput to be able to get that flotation circuit finely tuned. That's really the driver of the overall cost, because it picks up the recovery, the grades there. It's not a high grade mine but a concentration, the flotation concentrates the grade. And PV is a low cost producer naturally. Because a lot of this the feed we're using is stockpiled already, it's already mined. So that's the other driver. And then the final driver was Kibali. And again, that's a mine plan driven process. If you look at the run rates and the other mines, we're in good shape. But Kibali we had to do those push backs on the two pits because Kibali, it's always relied on the flexibility that the open pits give to utilize the excess throughput capacity in the plant and we needed to get those pits we needed to get those pits open. And so that impacted the production for quarter one and quarter two there's a big lift in both grade and throughput. And then we're at the run rate on the production profile. Loulo is going to be more of the same for the next three quarters. The other one is North Mara. Again, we've introduced open pits into North Mara. As you know, we spoke about it last year a couple of times. We've got the underground now working and it's about optimizing that. Again, there was some scheduled work to be done in North Mara, which impacted on. Again, we'll see a small pickup in grade this quarter two and then quite a big pickup in grade going out on the back half of this year. Really that's -- you have me articulating the profile. And so, whereas, in the beginning of last year, we had a catch-up whereas this year we're on plan and it's very clear to us. Of course, the one thing that's good about, where we are is that, we've been diligently working to get that what's the right word, inflection point on the production. It was going to be last year, but with the PV hesitation we pushed that into this year. But we're really at that stage. I always say to the team, the difference between a good and great company is a great company can leave good luck. When you look at the expanding margins with the higher gold price, we've got that to help us and we've got the costs coming down. We're in a reasonable position going forward to expand our margin, which is what we work for every day, to answer your question.

It was hard not to notice in your presentation slides, a major focus on some of the exploration success and the huge amount of exploration targets that you guys have. I mean, it is a great part of the story. Maybe this is a little early in the year to be asking, but I'll try anyway. But what are your thoughts on reserve replacement this year in gold?

I think for the first time, Nevada is going to get close, if not achieve it, Simon. In Nevada we've got to a five year plan now, which is a big step forward. We've got some very exciting stuff. We've got stuff that's still working. The extensions to the greater legal is real and that's not all in baked into our plans. The new modeling that we've done in Turquoise Ridge, if that is a duplication on those folds, below the main horizon which is in the reserves, that's an exciting development. We haven't quantified it yet, but it's significant. Do you want to add anything else, Simon? Just speak up.

Pakistan will also bring a substantial contribution.

Okay. Yes. That I'll do that. Once we finish the feasibility in Pakistan, it's like 15 million ounces of gold. How much?

13.

13 million ounces of gold and a whole bundle of copper. So we really show a big step up in our reserves going forward. And I think Loulo, Kibali, they are the same, just adding the answers they might.

Mark, it's Greg Barnes from TD. A couple of questions. One on PV. You've got the ramp up slide in terms of tonnes throughput, I think that's what it is without my glasses. In terms of grade, well, I mean, in terms of recovery, when do you think you get that optimized? Is that through the course of the year and by 2025 you have full run rates there both on throughput and grade and recovery?

So the grade in PV is around 2.4 plus or minus a gram and a half either side. And we blend the ore out of the pit with stockpiles, that's what we're doing. And we concentrate that into the autoclaves. And one of the things that we did in the ramp up last year is that just to remind you, we built this new flow sheet and what it did is it added fuel to the autoclaves. So we put the autoclaves into a higher temperature regime. And so we added a technology, a flash cooling vessel effectively, a flash point, so we could flash off the heat when it got hot. But with this stumbling last year, we had to go back to run of mine feed on the autoclave. So we ended up having in two of our autoclaves having the ability to do both. So to take run a mine feed and to take the higher concentrate, high sulfur feed, which is much more efficient because it's at a higher temperature. So we've got a much more flexible flow sheet. We are now at that stage, to your point, Greg, running up the throughput. We need that throughput to get to the sort of nameplate to be able to optimize the float circuit. We are getting the float up already then that's the recovery. And we've had pretty much every expert operational and metallurgical from the Barrick Group and some outside help just to manage that reagent suite, because that's the trick. We've done all the test work, we test all the time, we're comfortable with the targets, we've just got to settle the throughput run rate. And that's what you see in the slide is that during that buildup there's still a little bit of dynamic in the feed, but we are getting there.

So second question is around Mali. How far apart are you? Because I know the government has approached you with new demands. Is this a wide gap or is it something you think you can resolve very quickly or is this going to be a situation that drags on for some time?

So I think, I've spent a lot of time there and Sebastiaan Bock who runs Africa, Middle East has spent more. So we spent a lot of time engaging. And what happened was like any sort of revolution inverted commas, because it was effectively a very uncomfortable situation between the population and the civilian government which was less than sort of efficient, just to say it politely. And so it drove this change as we've seen before in Mali. Bock seen before in Mali. And so, immediately the transitional government which was formed headed by the [Junta] was looking for ways to get more out of the mining industry, because that's the only lever to pull. They did an audit, which again we supported. We're never shy of supporting orders. But the objective of that audit initially was to try and find fault, rather than look for opportunities to build a better industry, which is what we all agreed we would do including the people in authority. Anyway, it took them a long time to release that report, which we have now. We've been able to respond to it and sit down with the Ministry of Finance at this stage. More recently, there's a Minister of Mines that is engaging with us. That's where we are with the engagement. We have, just to try and explain, Mali's government organs are largely intact. You have got the Junta with a sort of executive that they've appointed over over-arching the normal organs of government. Mali is quite a bureaucratic structure -- a bureaucratic government. We know all the people and we've got to know the new people in power. My natural reaction is, if you're coming up with claims you should have a model, a basis on which it is raised. You should share it with us and of course we've got a model so we can put the two together and we can work out, who's right and who's wrong or where it is and find a way forward. As you know, I've always preferred to engage and that's I've already had that conversation. Should we be looking to find a solution together or should we be fighting, because we know arbitration and get a competent authority, again as we've done in the past in Mali. Both parties agree, it's much more constructive to engage. That's where we are. The 2023 Mining Code, which has been approved now and we're waiting for all the regulations, specifically provides for an old order right to coin a phrase, to accept the 2023 code, when the permits come up for renewal. We haven't come up for renewal, we've got two different permits, they're quite far apart as far as times go. But again, like we've done in all our countries, we would prefer to debate it and we did it with actually the civilian government beforehand and engage ahead of time. Our position is, where we find good reason for us to be able to improve things like that were never in our 1991 code because the current convention is now, it's morphed from the 91 code, because we've accepted changes as we go. That's the debate. Of course, we're dealing with people that are not particularly competent in the mining industry. Our argument is be careful you don't compromise the benefits to Mali. By taking too much and eroding the value of the ore body that we’ve defined. And it's a complicated debate. And for me to say it's going to be easy, look, we've had some very engaging conversations in Mali over the last 28 years, and that's where we are. But one thing I can tell you is that we've challenged the authority about these rumors, and they have very clearly said to us in writing that they have no intention of expropriating their assets. And that's all I can tell you at the moment. But it is dynamic, it is a very stressed economy we are dealing with the all the five of the G7 countries have full embassies in the country. Everyone's concerned about taking this country forward, particularly the western powers. And definitely the Malian authorities are clear that they want to do something that's good for Mali. They're not trying to sort of take Mali. And well, that's certainly what they've told me directly. So, you know, I'm sorry I can't give you more granularity but I'm actually, as I usually do, I'm just giving you the lie of the land.

Hey Mark, it's Jackie Przybylowski at BMO. Maybe just to dig into that a little bit more, if you could talk about the government in Mali and the stability. I'm just not familiar with the structure of a military juncture. Like, how stable is that? And do you expect any kind of change to the structure of that government over time?

Well, I think you're asking me to say something that I'm not prepared to say. So this is the third military leadership the country's had. The one was very short lived. The overall intention and by its very self-definition, it's defined itself as a transitional government. The intention is moving to reintroduce normal civilian government going forward. And as you know, there's a lot of stress in that region. We've seen Niger move to a military government. So is Guinea, where there are big investments going on in the iron ore part. So that whole region is a challenging environment. And the enemy is ISIS, the radical Muslim movement in the Sahil. So it's very complicated, and none of them are particularly in doubt apart from Guinea.

Sorry, I didn't mean to try and catch you on something. On another topic, can you maybe talk about Porgera and how this startup is going there? Just given the mine has been down for a while.

The only thing I would say is going surprisingly well. It's like a bit sometimes like running in the dock. You don't particularly know what next challenge you're going to get. But since we moved to the official startup, and then we engaged with the Halla province on restarting the gas powered power stations, which are in the next door province re-erecting the pylons that carry the power through to the mine. We've done all that. We've commissioned the generation facility and we're feeding the mine. So, you know, and we're ramping up and we did a lot of pre-work on ramping up, but so far it's going well. So far we're ahead of plan.

Mark. This is Ralph Profiti from Eight Capital. I'm just wondering as you move to this feasibility study at PV coming in Q3, is a lot of that going to be sort of recalibration and retooling of the equipment that's happened over the past few months? And can you talk a little bit about some of the tailings facility management changes that have been going on and that are going to go into that study?

So as far as the expansion of the processing facility, it's done. The feasibility I'm referring to is for the tailings position. We've got the permit on the back of a pre-feasibility and it will be finalized with the final feasibility study. And it's all about the geotechnical test work on the wall and making sure that the design is as per required in a seismically active region as where PV is. And of course, we have the original tailings facility, which was equally well designed as a reference. In the meantime, we are -- we have so to achieve that pre-feasibility, we did all the consultations and we've way down the road on engagement with the community on relocation. I was there just a few weeks ago. We are busy building the new towns and they are substantial towns. I mean, they are particularly impressive towns. And then we'll start the relocation. Some of the first relocations will happen this year. So we are progressing. We have no reason to believe that we will not complete the feasibility study. And we are progressing in all the engagements and the social plans and all that sort of stuff, as well as the technical investigation to confirm the final design of the actual retaining infrastructure.

And then secondly, can you just talk about delivering the pre-feasibility study at formal and how the Newmont negotiations, discussions and bringing that into NGM would then kind of follow on from that?

You know, right now with the -- and I must say it's worth just reinforcing. I don't think people appreciate the importance of permitting gold rush and I mean, the team did an excellent job when you think of, you know, we started the process in 2018 and we completed it in 2023 effectively. So it's a particularly good piece of work. All the consultation everything, as you know, it's not easy to permit mining projects in the United States. And we had the support of both sides of the aisle from our Senators and Congress people. That's the federal Senate and Congress out of Nevada, as well as the Nevada Governor and the legislature in Nevada. So it was -- and I -- we cut the ribbon with the governor of the state last week. So it's officially open. Fourmile is an extension of that. But a different style of mineralization in that you're moving the classic Carlin style mineralization into a metamorphosed, much more brittle rock. So you get the big breccias, which have been the heart of some of the famous super high grades in Carlin over the years. And so, you get much bigger size ore bodies and at a better grade. And so under the joint venture, we are -- if we complete a feasibility study that proves viability, we can put it to Newmont. And there's a formula. And as soon as we pass the filter on the formula, we put it. And there's a process of getting, calculating a market value. So not an NPV, but a market value. And also -- and once that is done, Newmont are obliged to either buy their share in cash and reimburse us on all the costs that it's taken us to get there or dilute. That's the option. And again, as you know me, I've always been one that engages, because this is a really a real asset. We have a good relationship with Newmont in Nevada. We've worked well together as a partnership. And so we haven't. We are open with the conversation and the progress with our partners. We haven't agreed, sorry, I'm out of the. So we haven't agreed on a specific way forward, but we have agreed that we will have at the appropriate time a conversation to investigate options, because it's in everyone's interest to do that. And Newmont has some excluded ground as well, under the -- because remember, this was a hostile engagement and we had agreed that we would value the deal on the basis of the market. And there were some assets, like formal that wasn't valued by the market and same on their side. So we've got some lower grade options that are sitting in the excluded assets. But as you know, in the fullness of time in mining, these are real assets. They come into play with a rising oil price.

In terms of formal, do you have a permit or do you have to start like Goldrush all the permitting?

There will be some permitting, but Goldrush helps in that permitting because of the infrastructure. We can access it's an underground mine. We can access it from already permitted positions. And of course, we have the under the joint venture agreement, we can also use the installed Nevada infrastructure. And right now, we need to drill it out. So what we're doing in the moment is Simon's got us, we've got a focused Barrick team looking at its infrastructure layout, drilling a number of holes from surface about a $42 million project for this year. To be able to scope the project and get our head around what it's going to entail to get a pre-feasibility study done, that's what we do.

And in terms of Pueblo Viejo, besides what -- is there any other problem that we might have or is everything good to go and now it's just an issue of ramping it up?

How long have you been in the mining industry? Nothing is perfect. But as we stand today, I mean, we set out to put this expansion in back in 2019, when we would have closed the mine in 2021. And against all opposition or doubt, we've done that, and we're busy rolling that out. So to give you an idea, up until 2020, the average contribution that Pueblo Viero made to the corporate tax of Dominican Republic was 18%. So we dipped in the last two years because we had to manage with stockpiles and we didn't have access to the expanded processing plot. But now that we have and we drive that cost down back above 800,000 ounces for a very long time, we go back to that very privileged or heavy contribution to the Dominican Republic. And I would add that PV is the very foundation of the power infrastructure for the whole country and a big taxpayer and a big employer. It's changed the whole province, the province in which PV is located. So it is a very big. And this construction, when we did the big construction expansion, what we did is we had to bring in external partners, but we also partnered those external partners with local business partners. So we really did support the economy during the whole COVID period as well. So we've built a very strong license to operate in that country. Okay, let's go. Can we move to the telephone participants, please?

[Operator Instructions] First question comes from Daniel Major with UBS. Please go ahead.

A couple of questions. The first one and slightly higher level one, obviously, M&A hot topic in the sector at the moment. One of the discussions around valuation comes around complexity of portfolios, lots of assets, lots of minority interests, good gold price environment. Are you looking at the portfolio and thinking of any assets you could use to streamline and recycle that capital into your expansion projects?

We have a couple that you could argue are non-core. Tongan is one. The others are strategic in the form of Hemlo, and we've put a lot of effort into repositioning Hemlo, and you'll see that. And right now, it's an important component of our business because it's our only asset in Canada and whilst we are investing heavily in Canada, we don't think it's wise for us to have to step away from Canada. We want to grow our Canadian footprint profitably. The Veladero asset is managed by Antofagasta, but again I mean, sorry, the Zaldivar asset is managed by Antofagasta and again, the copper price is important. Our copper strategy is important. So at this stage that's where we are. And we've got some work in progress in Chile which we're quite excited about. And that's it. The rest are Tier 1 assets fitting snugly into our strategy. So we will at the appropriate time as we've demonstrated, but I think the key that I would answer you with is at the time of our transactions, the joint venture, the consolidation of Barrick and Randgold as one company, we sold the non-core assets. When we looked at additional opportunities and the Nevada joint venture, we dealt with the challenging assets in the form of Long Canyon and the things that were disappointing as part of the consolidation of those joint ventures. And so we don't -- some people are still dragging assets with them after big premium transactions. We don't have that problem. So Dan, I can't see, no, that's my answer. Right now, we've got really fantastic world class assets as I said in my presentation. A reference point is just look at what BHPs suggested they could pay for Anglo American's copper assets. Arguably, there's a bit of other stuff with it, but it's still a big tag and we've got it organically. So that's our focus. And we've got our growth that's in Nevada and surrounds the rest of our portfolio, particularly PV. And then it's the exploration group that's starting to present significant footholds in the major gold copper regions of the world. And we believe that's the future of Barrick right now.

And then just one other, if I may. It looks like in Reko Diq, there's a deal approaching on the other side of the 50%. Does that impact your funding and kind of how you're looking at financing the project?

No, not at all.

The next question comes from Tanya Jakusconek with Scotiabank.

Mark, can I just ask about the elections in the Dominican Republic, given everything at the high gold price and everything else going on in the world? How are those going? Are there any thing we should know about with respect to changes in royalties, taxation, anything else that would impact Pueblo Viejo?

Every indication at the moment is that the President -- the current President will be -- he will have a second term. When he was elected he wasn't expecting COVID. As a leader goes, he probably managed that crisis better than any leader in any country that we have investments in. He's steered a very good ship. He's dealt with some of the challenges and he's had the next door neighbor challenge on top of that. That's been a challenge, but I mean, we're not expecting the opinion polls that at least indicate that he's more than likely to be the successful candidate. If he is -- he's shown and highlighted the importance of investment in that economy and I don't believe, there's going to be -- well there's certainly not going to be any aggressive engagement with the private sector. I think there's going to be real focus to it to build it, the private sector going forward.

If I could ask another question just from the actually maybe Graham would be best to answer this one. Graham, just on that remind me in Chile with Pascua-Lama, the 430 million if we don't have that mine up and running and paying by 2026, we have to pay it back. Can you remind me what you can do to push that out? Any work that you're doing on Pascua-Lama now and I know you discussed in EA. Is that -- would that be work that can help push this out? Just remind me, I forget how the procedure goes there?

Tanya this really two aspects to this. The first is obviously that date has previously been pushed out from its original date, so that can always be negotiated. But more importantly, actually, when we installed the electricity line from Chile across, we actually started exporting power. And that, for us, is important because it helps us with that VAT refund because it effectively meets the requirements for production in a sense. That has actually really sort of dissipated the risk associated with that claim.

My final question for my thoughts to understand and thank you, Mark for the details on how the assets are going to perform for 2024. But, can I assume that we have a similar division between first half and second half of last year so that 45% from the first half production and 55% from second with a strong Q4. Is that a way I should think about your production profile?

Yes, Tanya. That's a pretty good read on it. Maybe it's 46/54 or something like that but it's there or thereabouts. It's definitely, as we've said in our guidance, it's going to be increasing production through the year, strong finish to the year. Yes, that's a fair read.

Copper as well?

Copper is a little more second half weighted relative to the gold.

And then lastly, sorry one more. Just some companies are seeing inflation pressures come back and steel and cyanide, labor seems to have widened down. Is that what you're seeing as well? I'm just trying to understand what you're seeing in parts of the world you operate?

That's relatively consistent. I wouldn't say we are seeing any continuing inflation. It's more a case of some of those key commodities like you mentioned, the steel balls, cyanide, explosives where we've been trying to wrestle those prices back down to 2021 prices. So in a lot of other areas, we are back down to 2021 prices, but there are a few of those that have remained sticky and we need to bring them down. It's not necessarily across the whole group, tends to be more regional. So North America, we have more pressure than we do in other parts of the business. And then as you say, labor is not the same pressure that there was a year or two ago.

Thank you so much. I'll leave it to someone else to ask but appreciate you taking my question.

I think just one thing on the labor in North America is, as you know, we've invested heavily in improving the skills of our workforce in Nevada, and we're starting to see those signs. And so the opportunity is to lift the -- it's an expensive commodity, absolutely critical asset and our approach is which and the team's done exceptionally well in driving, the skill base so that we can improve the efficiencies and offset the cost. And so that's been our focus over the last couple of years.

The next question comes from Anita Soni with CIBC World Markets.

So a few questions mostly following on what Tanya was asking. So firstly, Lumwana, why did the grades that were processed so much lower than what was mined? Are you pulling from stockpiles and when will that end?

I'll let Simon answer.

No, it's just a function of where we are in the pit. We're just outside the high grade shoots and so with the stripping at the moment we'll open up the higher grade later in the year.

Yes, I guess the question was why not feed that directly for the mill? I thought the mine grades were much higher than the process grid grade.

No, I think the second just to comment the second half of the grade to Simon's point because of the schedule of mining does lift up. And remember, we are building the base for a big expansion and so we don't want to end up sort of diving down on the ore body. We need to manage this as a long-term investment. And we'll manage that as we go and including growing some of our stockpiles. But that's what it is. It's going to be a back weighted year in Lumwana particularly and that's what drives the point that Graham pointed out is the Lumwana much stronger back half of the year in the copper side of our business.

So then moving to PV, I need to get some disclosure around the about the tonnes that would be expected over the course of the year. Can you give a little bit of color on what kind of grades, is it pretty steady grades at 2.3 gram or will that rise or fall over the course of the year?

Yes, we've got, again the second half of the year and this is, so the average grade for the year is about just over 2.4. It puts it in perspective.

And then another very detailed question, at Turquoise Ridge you mentioned the backfill situation, is that and how long will that take to put right? I mean, it's obviously impacting the mining costs, underground mining costs and I'm reading through maybe the autoclave process costs as well. But, I'm just wondering when those unit costs will start to trend down.

We expect to be back up at plan at the rolling plan at the end of quarter three. But we're working. Now we're ahead of the plan as far as backfill goes catching up and we will get close but not quite on budget by the middle of the year but quarter three will take us to that point.

And then lastly a similar question on Carlin, what can we expect in terms of sort of a grade increases over the course of the year? I think that's another one where you said your grades were low in the first quarter and will rebound over the course of the year?

Grades are going to be a little lower and so they are low in the first quarter and I'll take you to this. We're looking at a grade around 4.3 for the year. But it goes -- again this is a very big mine. Next quarter will be better grades and then I think the following quarters again good grade and then we have a back to sort of 4 grams on the quarter four. It's a little bit bumpy, but on average, there's 10,000 ounces to 20,000 ounces different between H1 and H2. With Carlin's a big beast, you try and keep it as close to the running average as you can and that's what it looks like on the profile.

All right. And then last and final question, any other mill maintenance shutdowns that we should be aware of over the course of the year?

Yes. We got the big shutdown with the Gold Quarry roaster in July, which is -- we tie in the expansion. And so post that, we will ramp up and we're forecasting this year for that back end of the year. The last half and one quarter will be up at around somewhere between 15% and 20% higher throughput in Gold Quarry roaster, depending how quickly we ramp it up. And that's a big shutdown. We are upgrading the converter, we're doing a whole lot of extra stuff that's really been impacting our efficiencies there and we expect to bring the cost down substantially on the back of that expansion, both because we got more throughput, but more importantly because we've actually addressed some of the challenges within the ancillary equipment in that roster.

The next question comes from Josh Rales with RFI Associates.

I was wondering if you could comment on the Donlin deposit in the Alaska. I heard a presentation by Thomas Kaplan talking about the very high grades there and it's just an amazing resource and assets and you haven't really said much about that and does the higher gold price accelerate that potential in your mine. And then the second quick question is you mentioned that you think Barrick is the cheapest gold most undervalued gold company in the world, and I was wondering if you could point to a metric or two that you look at to reach that conclusion that you could share with us?

Yes, sure. So if you look at consensus on NAV multiples were under one time. So depending on who you follow, it's around, it's anywhere between 0.89 and 0.93 times NAV. And of course as the gold price goes above the consensus prices as with the copper and the copper is the real driver as well is that discount expands. So that's an easy answer. On Donlin, we've always recognized it as Tom does, a very large resource. It is refractory, so it's a call in a very geographically challenged area, not geopolitical, but geographical. So it's a Carlin deposit at 2.4 somewhere around there grams a tonne. So infrastructure is the challenge and getting it to deliver a return that meets our investment criteria has been our focus and we've been working hand in glove with the NOVAGOLD team, really trying to sweat every line item in the capital schedule. And your final note, of course, rising gold prices float these types of boats. And there will be a time when NOVAGOLD would be an investment. So that's our view. It's an inventory. It's part of our global inventory. It's a valuable asset in our inventory and so you know and we've never said anything otherwise. Do you want to say something, Graham?

No, you said NOVAGOLD, but you meant Donlin.

I mean, Donlin. Yes, but NOVAGOLD is the other part of Donlin.

Yes, absolutely. But you were referring to Donlin. It will be developed.

It will be developed, yes.

And it is a valuable asset.

But not anytime soon, this is way out in the future.

You try and predict the gold price. If the gold price is up 15, it's up 30, nearly 30, in the last 18 months. So, yes.

Does it work at these levels if it stays if the gold price stays here?

I think it's starting to get closer.

The next question comes from John Tumazos with John Tumazos Very Independent Research.

In a similar vein, you have three or four potential projects in Chile and copper has rebounded along with gold as well as in Alaska as well as the Fourmile and Dorothy and other extensions at Cortez and Nevada Gold JV. As you evaluate these projects, do you assume that industry cost will rise half as much as the gold and copper prices? Or will you estimate that three quarters of the incremental revenue comes home to the project or how do you evaluate these economics and the rising gold and copper price climate, Mark?

John, let me answer that in sort of presenting a scenario. Go back to 2020 -- 2008, 2006 with the run up in the gold price from $450 it was in 2005 to about $1,000 in 2009 and $1,800 in 2011. And if you recall, very similar to the last 24 months, you've seen, where the market has done some big deals on a rapidly rising gold price and paid significant premium. That's what happened then. The difference was everyone did it because there were more majors than there are today. And then the gold price came off, and there was inflation from 2005, from the time that China joined the global economy, it drove that inflation, the oil price went up, everything went up. But the commodity prices routinely outperformed. It wasn't like we've seen now where we had inflation, without the rising gold price and a big fill up, as we've witnessed over the last 18 months. The question is, and sure, that marginality that you can make money on the margin is a real, has always traditionally been an attraction in the gold industry. But you are the expert. The problem with the mining industry has taken that margin with the gold price to keep its shareholders believing that they're adding reserves, but they haven't really. That's a challenge for our industry. It's an equal challenge for the copper industry. And so what we have worked to position Barrick as a contrarian to that approach and that we've focused in on the right assets, we've invested in them and we've made sure that we've replaced the gold. We've mined with the same quality reserve. We do have that marginal flexibility, because of our discipline on the $1,300 gold. So if you take some of our assets, not all of them because a lot of them are constrained geologically within the 1,300 envelope, but there are some that have lower grade halos around the 1,300 envelope. We take that. When there's a high gold price, we'll take that because it comes in at a very similar margin because of the infrastructure. If you have got a $1,000 margin and you're developing the infrastructure on a $1,300 model, you can take marginal in our definition, not in anyone else's, gold on that basis and it's good business. So we do that. We've done it. We did it back in 2011. We pushed back the Loulo pit and took a whole pile of high-grade low recovery ore and it was -- and we could do that. So we do that and Donlin is a very different asset to Fourmile. Fourmile is a Tier 1 world-class opportunity and it will make money in any gold price you can forecast realistically. It's a matter of banking it, which we do again diligently. We're not going to take a risk on that. On the Chile side, the copper prices certainly helped on Zaldivar. The Veladero mine is I think we fixed that rather than got saved by the gold price. It's a gold mine, it's not a copper mine. Pascua-Lama, we are working on a preliminary economic model for Pascua. It's also really it's a gold and silver mine of which there's a big silver stream as you know. But we don't hedge, so we would have to see, we'd have to be comfortable and we set our reserve gold price based on input costs. We don't set it against the spot gold price. We'll exploit, if it makes sense, John, we'll exploit a high gold price in our mining plans, but we won't change our reserves on that basis. So for us, the opportunities for us are the expansion in Loulo, the whole Carlin, the expansion in Turquoise Ridge, the Goldrush ramp up which is already there. There is an expansion opportunity more complex than Fourmile. We've got some very exciting upside in Kibali and Loulo-Gounkoto. PV is about delivering 20 years, so any further additions is last rather than profile. And it's a 800 to a 1 million ounce producer. And then the real excitement is some of our copper plays in our new jurisdictions. And as we go through this year, I'm confident we'll be able to share more with you as we grow it. We're still consolidating some of the titles in those areas. And then of course the gold play and our very solid relationships in Zambia and DRC offer us significant opportunities again which we are cautiously optimistic we're going to grow those positions. I hope that answers your question.

Some of your projects have been in hand over 10 years and they're rigorously analyzed and engineered by Barrick. If, for example, Fourmile is at the head of the pack or something else is at the head of the pack and there's other companies that don't have enough projects, they're willing to pay premiums, would you let somebody pay you a premium and buy one of your projects from you and pay you a $1 billion or more?

So we would be very happy to sell somebody, an asset if they're going to pay us more than we think it's worth. But our business fundamentally is mining. As you see, if you take Loulo, we started at million ounces. It's now got, what Simon, 7 million of reserves still today after more than 10 years of mining or 2005, so that's 15 -- 22 years of mining. When you are in these Tier 1 jurisdictions with these big assets, they last for a long time and we're in that. Nevada is an exciting place. When you find assets in Nevada like Fourmile, they are massive assets. We're not in this game for the short-term. It's a long game and it's been good for our shareholders over time. I think if you look at the Randgold shareholders, they've done very well out of this deal. If you look at the Barrick shareholders, we've still got some work to do to deliver them value, those that are still in from back in 2018. But we are building a great company with capable of delivering value and we've paid a lot of dividends out and other capital returns to our shareholders already while we fix the business.

There are currently no more questions from the conference call.

Thank you very much everyone. Appreciate the questions and thank you again for those, who came to join us on a one-on-one basis. We're -- as you know always available to take questions. Going forward, we look forward to talking to you again. We are having an analyst visit into our Kibali and Tanzania mines starting on Monday. We will be releasing the presentations and that on the website. I urge you to follow the trip virtually and we're always available to help you out if you've got any questions. Thanks again.

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