Barrick Mining Corporation

Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to Barrick's results presentation for the fourth quarter of 2024. Following today's presentation, a question and answer session will be conducted. If you have a question and are joining the event by telephone, please press star then one on your telephone keypad. You will hear a tone acknowledging your request. We will also be taking questions from the room. As a reminder, this event is being recorded and a replay will be available on BEREC's website during the 12th, 2025. I would now like to turn you over to Mark Bristow, President and CEO of BEREC. Please go ahead, sir.

Thank you very much and very good morning and good afternoon. to everyone here today and for those that are on the call thank you for joining us today. As you know at Barrick we are focused on delivering sustainable long-term value by earning the best gold and copper assets managed by the best people. Every quarter we're getting closer to achieving our goal. with gold becoming more important as a safe haven in a geopolitically uncertain world, and copper being as strategic as gold is precious. I plan to show you how we are adding value and building capacity in both metals, without taking an excessive amount of debt on or issuing new shares. Needless to say, it's an exciting time to be a gold and copper miner. with more upside in the commodity price, in my opinion anyway. It's been a transformative year for Barrick, one where we have invested heavily in our people and our assets, and we feel that we've reached a pivotal point that will add impetus to our strong growth trajectory. Above all is our unwavering commitment to sustainability, enabling our vision not only to be the best gold and copper producer in the world, but also one that people will want to own. This is our customary cautionary notice regarding forward-looking statements, which you can read at your leisure on our website. So moving to our group highlights, it's great to see all the arrows once again pointing in the right direction. We saw EBITDA increase 30% and EBITDA margins grow both quarter on quarter and for the year. Also thanks to a strong performance in the last quarter as we pointed out and discussed when we last met. we met our 2024 guidance. Adjusted net earnings per share grew 50% year-on-year to $1.26. The quarterly dividend was maintained at $0.10 per share, and we repurchased an additional $354 million of our own shares in Q4, taking the total for the year to almost $500 million. We also continued our exceptional track record in reserve replacement for both gold and copper, adding substantial new reserves from La Moina and Ricodec That's in addition to the replacement, 12.7 million ounces of gold and 13 million tons of copper of reserves from those two projects, which just to put it in perspective is on a gold equivalent basis equal to 73 million ounces of gold. Quarter and quarter gold production from our mines increased 15%. and with a 3% reduction in cost of sales and 5% decrease in total cash costs, driven by our focus on cost efficiencies. Nevada played a key role in this performance, with a significant throughput and production boost as it delivered on guidance. On the copper side, Lemoyne posted a quarterly production record and on a group attributable basis, we achieved production guidance for both copper and gold. Turning to the financial results, some of which I've already touched on, we achieved the highest net earnings in a decade. Operating cash flow for the quarter was up 18% to $1.4 billion, taking the total for the year to $4.5 billion, the highest we've achieved since 2020. This strong performance led to a 104% increase in full year free cash flow to $1.3 billion for 2024. Strong cash flow supported $500 million of share buybacks on top of $700 million in dividends, which kept net debt in line at just over $650 million. Safety and our journey to zero remain our top priority. Unfortunately, as we have already reported, we had three fatalities in 2024, which is unacceptable. We, however, ended the quarter with significant improvement on the lagging indicators when compared to the same period last year or the previous year. What was particularly encouraging was the increase in critical control verifications conducted at the sites, as well as the number of actions closed out after high potential incidents, both of which represented our focus on leading indicators too. This improved performance meant that we achieved our improvement goals for the group. Additionally, there was no class one environmental incidents and we again achieved an industry leading water use efficiency rate of 85%. We continued to integrate our holistic mine closure strategy across the group and drive long-term value creation. Most notably, we exceeded our group concurrent rehabilitation target for the second consecutive year and put seven of our old tailings storage facilities into safe closure. And we are targeting a further five this year. As usual, we'll start our operational review with North America, which, to remind you, accounts for 47% of our total attributable gold production and is Barrick's value foundation. The new leadership team has settled in well. focusing on the key metrics we identified for improvement in Nevada, including efficiencies, agility, profitability, and growth. For this, we've identified several growth opportunities, including both brownfields and the new four-mile project, which we'll discuss further later. Moving to the summary of the results, the numbers speak for themselves. As we anticipated, we saw an improvement in production and costs driven by a strong quarter four performance across the complex, and particularly from our three tier one assets. This, along with the higher gold prices, supported a solid set of financial results for both the quarter and the year. And as mentioned, 4 Mile is one of the most exciting new gold opportunities. The team has done excellent work to move that project to pre-feasibility study. We are allocating $78 million for the 2025 year to begin the pre-feasibility study work, which we expect will take about three years to complete. In terms of mineral resources, there has been a significant improvement in the 2024 economic assessment, as we highlighted at our November Capital Markets Day. This project is essentially an extension of Gold Rush, with much larger ore bodies and nearly double the grade, making it a highly promising opportunity and we will continue to share updates on this project as we move forward with the pre-feasibility study throughout the year. In addition to 4 Mile, we are continuing to expand our significant brownfields portfolio in Nevada At Carlin, the greater level area holds substantial potential for further discovery and depletion replacement. While at Cortez, we have the Hanson extension within the Cortez Hills underground mine, which remains open in all directions. We're also advancing green fields, work with drilling at Swift and in the Carlin Basin near the gold quarry deposit. confirming large column alteration systems under cover. And at Turquoise Ridge, we're upgrading the model and have recently defined several new near-mine targets to be tested in the coming months. Looking at North America as a whole, we're continuing our work in Canada, focusing on Southern Superior with drilling progressing at both the Norris and Patrisse projects. We're also expanding our footprint and priority belts across Western United States for both gold and copper assets, which includes the ongoing consolidation of an exciting portfolio in Western Nevada. Moving now to Latin America and Asia Pacific region, which accounts for 17% of our gold production and 21% of our copper production and boasts two key growth stories. The Pueblo Viejo expansion is making good progress and the bankable feasibility study at Riccadick, which is now complete and received conditional approval from the board to proceed yesterday. It's also worth highlighting the performance at Valadera, which delivered its best production results in the last five years. Gold production at Pueblo Viejo remained relatively stable, with an improvement throughout the year in recovery rates, reaching 80% by year end as forecast. Pueblo Viejo is making good progress towards its goal of becoming a low-cost, long-life, plus 800,000-ounce gold producer. Ongoing work includes 35 days of planned downtime this quarter for throughput improvement projects, with additional shutdowns expected in quarter four to further improve recoveries. We're also advancing the El Naranjo tailing storage facility, an important infrastructure project to support the mine's life extension. Looking ahead, and as shown here, we are focusing a step-up improvement in throughput and recovery on the back of those plant improvements and upgrades I referred to in the previous slide. We expect to be in the mid 600,000 ounces for this year, with the target of exceeding 800,000 ounces next year. And on this slide, you can see some updates as we move forward with our ongoing resettlement of affected households for the development of the tailings storage facility. This resettlement, which aligns to the international best practices and standards, will ensure that those affected by the project have the same, if not better living conditions. and we believe it will be better with clean running water and electricity supplied to each house at the host site. This will, along with the livelihood restoration plan and access to education facilities, allow the families being resettled to build a better future together. The first families will be relocated in the next few weeks. On the exploration front, we've refocused our entire portfolio across LATAM and Asia Pacific, targeting a series of new Tier 1 level opportunities in the region. The most advanced projects are in Peru, at Lebolela, where we are drilling multiple targets, and Coro Poro, which is a porphyry project that is currently progressing through permitting. Additionally, we are actively evaluating our first set of early stage properties in Ecuador with six prospects currently under review, all of which are promising. Recodec, I must say, just gets more exciting day by day. With the feasibility study now completed, our focus has shifted to the early works, project startup and wrapping up the funding. The project is structured in two phases. with the total estimated budget for the phase one of approximately $5.6 to $6 billion, as shown in the graph on the bottom right. This mine is to become one of the lowest cost copper producers in the world, sitting well below $1 per pound after gold credits. Free cash flow is estimated at around $74 billion over 36 years, excluding taxes payable to the governments of Pakistan and Balochistan. And further details are outlined in the table on the left of this slide, and we expect to publish the full 43-101 report next week, I think. Simon? Our limited recourse project finance discussions with a potential lending group comprised of multilateral export credit and import finance agencies are well advanced, and we are targeting to sign this early in the third quarter. Subject to the financing, again, yesterday our board has conditionally approved the go ahead of the project. with first production targeted by the end of 2028. Just as a reminder, it's worth pointing out that the bankable feasibility study focuses only on four porphyry deposits, three of which are part of what we call the Western Porphyries, along with the Tangile deposit as shown on the slide. It's important to note that the current bankable feasibility study is based solely on reserves associated with these four porphyries. But there's significant potential beyond that. In total, there are 14 identified porphyry bodies within the mining and exploration license owned by Rickerdick Mining Company. Our geologists, as we speak, are currently actively evaluating these other bodies, which will certainly influence future life of mine plans and reserve and resource estimates. There's a substantial upside, and while the feasibility study assumes 36-year mine life based on reserves, all indications suggest the mine could still be operating through the rest of the century. Moving to Africa and the Middle East, These regions contributed 38% of our tributable gold production and 79% of our copper in 2024. Like Ricodec, the super pit expansion at La Mana is close to being fully permitted and the feasibility study is now complete. We've appointed our engineering partners and finalised the environmental and social impact studies for which we now have received the permit. We are also on track with early works design and long lead item fabrication. This highlights the big advantage of emerging markets, where large expansions and new projects can be completed much more quickly than in the developed world, but at exactly the same standard. In addition to the work at Lamarna, last week we signed a memorandum of understanding with the Zambian government's industrial resources limited, forming a strategic partnership to drive mining and exploration in Zambia. This collaboration aligns with Zambia's vision to increase annual copper production to 30 million tons in the coming decades. Starting with Lulo Goncoto, in spite of the challenges we are currently experiencing in Mali, production increased by 8% in the fourth quarter and exceeded guidance for the year. Gold sales were down significantly due to the restrictions placed on exports by the Malian government. As you know, in addition to export restrictions, we face the unjust incarceration of some of our team members, which is a difficult situation to navigate. We are actively engaged with the administration to secure their release and on a sustainable solution moving forward so that we can restart the mine. This situation has led us to file for exit arbitration to assert our rights, but at the same time, as usual, we remain engaged and are hoping to continue to make progress, albeit slowly. Our goal remains to reach a lasting solution that brings benefits to Mali while ensuring fairness and supporting the long-term viability of this world-class operation. This being crucial to the country's economy as well as all its other stakeholders. I thought it would be worth putting a few points into perspective, as at times there has been a lot of misinformation about the benefits that Mali has received from the development of these assets. Since 2005, we have contributed more than US$3.2 billion to the Malian Treasury in the form of dividends, royalties and taxes. More recently, in the past two years alone, we contributed $400 million in 2023 in cash to the Malian Treasury and $460 million in 2024 to that same Treasury. Had the mine not been forced into temporary suspension, we were on track to contribute more than $550 million in 2025 at current gold prices. Beyond the financial contributions, our focus has always been on long-term growth to sustain those benefits for Mali and its people. Since 2005, we have produced nearly 10.5 million ounces of gold and have added more than 15 million ounces to reserves, extending the mine's life to 2041. But more importantly, We have built and developed local talent. Today, Malians are operating across our global business, including in Nevada, and their expertise is a key reason why these assets continue to succeed. The talent extends beyond our workforce. We have helped develop Malian businesses that have pioneered growth in the mining sector, some of which have expanded beyond Mali as a country. From specialized mining contractors to fuel and consumable suppliers, the economic multiplier effect of mining is immense, creating opportunities to go far beyond the mine itself. Now crossing over to the DRC, Kabali, the biggest gold mine in Africa and one of the most automated in the world, had a much improved quarter as we worked to address some operational challenges that plagued the mine for most of the 2024 calendar year. While it took longer than expected, those issues are now behind us. Kibale is a great mine, low cost with a long life and significant opportunities within its mining lease. Production increased quarter on quarter and sustaining costs were well controlled. we're confident that Kibale will show significant improvement across the board during 2025. The new solar plant and battery storage system are planned for commissioning at the end of quarter two of this year, and this will see an increase in the availability of renewable energy from 81% to 85%. In six months of the year, we will generate electricity with zero carbon emissions. In Tanzania, North Mara was a standout performer across all metrics, serving as a great example of what can be achieved when the right management team is in place and operating to our standards. Production was up 20% quarter on quarter on the back of higher grades and higher throughput. At Bully and Hulu, we've seen significant improvements as we continue to increase the scale of the operation. North Mara's life of mine has been sustained beyond 10 years, and Bully and Hulu's life is well over 20 years. We'll dive into exploration details a little later. In Zambia, Alemana copper mine delivered a stellar performance. A record quarterly production brought the mine back into guidance and delivered a significant improvement in costs, ensuring a successful end to 2024. Many of the feasibility study assumptions for the super pit expansion have now been proven in the operation, the details of which are summarized on the next slide. The image on the left shows the super pit alongside a summary of the feasibility study results on the right. This is a standout project, and it is important to put it into perspective. When Barrick acquired the mine in 2011, it was unprofitable and resulted in a $5 billion write-down. In the past five years, a focus on cost discipline and exploration has added significantly to reserves, extending the life of mine by more than 20 years. Today, the mine is sustainably profitable and a pillar of our copper growth strategy. With the super pit expansion feasibility study completed, We are now moving forward with the project development, following approval from the Board, as I explained earlier. The feasibility study clearly supports the value of this investment. Importantly, we can fund the Super Pit expansion, as well as our share of Recodex development, through our current and forecast cash flow facilities. without needing to issue any new shares or take on additional debt. In fact, as I pointed out in the introduction, we are reducing outstanding share count by buying back our own shares. I've already touched on the exploration opportunities in North and South America, and we continue to make significant progress in our Africa and the Middle East regions as well. The region remains a consistent leader, not only in meeting its guidance, but also in replacing the reserves we mine, both in gold and copper. We are actively investing in our future. focusing on material brownfields opportunities in the Arc target area just west of the KCD deposit in Kibale, while also pursuing new Tier 1 assets. Our greenfield footprints are expanding, especially in Tanzania, Senegal, and new frontiers in the Arabian and Nubian Shield. The recently signed MOU with Zambia also underscores our focus on expanding in the Central African Copper Belt. As I've always said, what truly sets Barrick apart from the rest of the industry is our ability to replace what we mine. Since 2019, we have replaced more than 180% of the company's gold reserves depleted. Notably, in 2024, we replaced the 4.6 million ounces of annual depletion at better grades before the addition of the Ricodec Reserve Base. This replacement was driven by the usual strong performance in Africa and Middle East, with additional significant growth in Pueblo Viejo as the result of pit pushbacks unlocked by the additional TSF capacity in the new Noreno tailings facility. The conversion of copper-gold resources in Recodex adds nearly 13 million ounces of gold reserves at 0.28 grams a tonne on a 50% attributable basis. Positioning Barrick to capitalise on the copper fundamentals we looked to Ricodec feasibility study, which added 7.3 million tons of copper at 0.48% to attributable copper reserves. The Lemoana Super Pit Expansion Feasibility Study added 5.5 more million tonnes of copper reserves, resulting in a total project copper reserve of 8.3 million tonnes at 0.52%. This represents an addition of more than 20 million tons of copper reserves on a 100% basis since 2023. And these reserves were calculated at $3 a pound. These results from the respective feasibility studies pave the way to position Barrick on the global stage of major copper producers alongside our existing world-class gold portfolio. Our consistent focus on asset quality, which through our integrated mineral resource management and exploration strategy, enables us to replace what we mine. Since the merger in 2019, we've added 111 million gold equivalent ounces to Barrick's reserve base, all at a cost of just $10 per equivalent ounce, not only replacing what we have mined, but delivering substantial value. As highlighted in this slide, when you compare this to the cost of recent M&A transactions in the industry, the value we have created through doing this is abundantly clear. And ladies and gentlemen, it's on the back of this organic growth that we can forecast a plus 30% growth in gold equivalent ounces out to the end of the decade. As already highlighted, we are moving ahead with two key growth projects, which will see capital increase over the next three years before coming back to more normal levels. And as production increases, so too we expect costs to reduce, as shown in the slide. And as I shared with you last year at our Investor Day in November, the value opportunity at Barrick only continues to increase. The slide here shows consensus net asset values with market multiples applied, including a modest one-times multiplier for copper assets. You can see that the value for Nevada and the copper business together exceeds Barrick's market capitalization. That means there's an implied negative value for the rest of Barrick's Tier 1, Tier 2 and other strategic assets. I can also tell you that these consensus values are significantly lower than our own internal valuations, something we expect to shift when we publish the technical studies for Lemwana and Rickerdick later this month. No matter how you analyze the portfolio, the current share price does not come close to reflecting the fair value of our asset base and our prospects. You'll also see our view reflected in our buyback activity this quarter, which you can expect to continue. So to recap, where Barrick is headed today, I outlined earlier that we are targeting 30% growth on a gold equivalent ounce basis towards the end of the decade, built on our current reserves. As I've shown you today, we will continue to replace and add to those reserves and resources, further supporting our growth. What's more, we have the balance sheet strength to fund our growth and continue to invest in our own future without relying on the market. By any measure, Barrick today presents a standout value opportunity. And with that, ladies and gentlemen, I thank you for listening and we will be happy to take questions.

Hi. Good morning, Mark.