Barrick Gold Corporation (NYSE:GOLD) Q2 2023 Earnings Call Transcript

Barrick Gold Corporation (NYSE:GOLD) Q2 2023 Earnings Call Transcript August 8, 2023

Barrick Gold Corporation beats earnings expectations. Reported EPS is $0.19, expectations were $0.17.

Operator: Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to Barrick’s Results Presentation for the Second Quarter of 2023. 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, August 8, 2023. I would now like to turn you over to Mark Bristow, President and CEO of Barrick. Please go ahead, sir.

Mark Bristow: Thank you very much and — so we’re controlling this. Welcome, everyone. Good afternoon for those across the Atlantic and good morning for those this side of the Atlantic, and a special outcome to all of you who have given up some of the sunny weather outside to join us personally. Thank you for coming. Appreciate it. I think I felt I should start on a good news story. And that is that — and I’m sure you all know this, certainly those sitting in the hall here, that we saw the average gold price for the last quarter at an all-time high. And it’s interesting, a lot of people are suggesting that the gold price is not performing. It’s performing extremely well. And for me, the more interesting part is that some see this as driven by a forecast decline in interest rates.

And certainly having recently traveled right around the world, I really believe it’s more about a risk on situation as we wrestle with the global economy and de-globalization of the world as a whole, and the fact that China is not — I don’t believe going to get back to where it was, it’s certainly going to recover, but not back to where it was. And again, our supply chains and general investment in the economy and upliftment into — of some of those more challenged economies are going to hurt if we don’t stop and invest in it. And so, otherwise, all we’re going to do is create a future where the rich continue to get richer and the poor get even poorer. And so, we held a mining summit in Islamabad last weekend. And it was very interesting for me to see the realization from Pakistan that things needed to change.

And there were comments about, it’s been 70 years of mistakes and this country has everything that it needs to get on top of things, and what it — it’s got the people by far, but it needs to care about them. And I’m drawing from the leadership that spoke at the opening of the mining summit. It needs to focus on development and not just exploitation. And finally, it needs to attract foreign investments. And in fact, the Minister of Petroleum pointed out that their strategy was to turn red tape into a red carpet for investors. And that is very interesting. That’s a massive transition. And as you know, that country has got many challenges. And I think we have seen West Africa, what happens when we neglect these developing countries. And we have spoken many times to some of the major economies in the world about West Africa and the importance of staying there and engaging in conversation and working on investment, instead of just lecturing.

And again, the elected governments right across that region have failed. And we don’t seem to want to do anything about it except lecture. And so there is a big need for the world to relook at how it manages its business. And again, as far as the policy towards mining and metals in the United States goes, it has to reflect on how important it is just to exploit other people’s natural resources rather than develop some of its own, and engage in support and build a real mining industry because that’s what’s required if we are going to have a better world ahead of us. And so I think that — and there certainly is conversation starting around those topics. And as you know, I’ve spoken a lot about the importance of partnerships and development across the world, and Barrick is — hopefully, I will share with you today what we have done and the — now the real results that are starting to materialize in our policy of driving partnerships with our host countries around the world.

And so — and I’m also going to spend a little time today on focusing in on exploration, because this ongoing debate of you only grow it through M&A. And we have put a lot of effort in the last four years in: One, fixing our assets. And two, building that bench strength in exploration. And we have got some initial pointers now starting to materialize, which we will share with you. And we are super excited about being able to actually support some of these early results with real borehole results by the end of this current quarter. So that’s the sort of outline of my messaging I want to get across today. And I would start first with just a quick look at — before I go further, as usual, presentation is preceded by cautionary statement, as you see on the slide.

It’s also available on our website should you want to study it in more detail. And then moving on to our KPIs for this past quarter. At the beginning of the year, we guided that our results would be weighted roughly 45/55 in favor of the second half and certainly as you can see the trend is already evident in quarter two. The improvements over quarter one was largely due to the completion of scheduled maintenance on Carlin’s processing facilities, which boosted NGM’s performance as you see it, we will see in the number, I’ll touch on it just now, and the strong contributions from our Tanzanian mines and Kibali in particular. And of course you would’ve seen too Veladero had a good quarter, better than planned. As always, I’ll highlight the key aspects of our operations as I take you through the presentation.

And this time as I said to point to the progress we are making on all fronts as far as exploration goes. So looking ahead, despite some equipment challenges relating to PV ramp up, we remain on track to meet our gold and copper production guidance for 2023. And they will — should drive the costs back down towards guidance. And Nevada is expected to build on last quarter’s post maintenance improvement, PV or continue to ramp up throughput as it expands the plant. We have finished the commissioning, but we’ve got now stuck in the ramp up. And in Zambia, the Lumwana copper mine’s new fleet is expected to improve mining productivity and throughput, and we land in better grades in the main pit in the back half of this year. As far as the financial results go, increased production helped by the all-time average quarterly gold price, which I just referred to, delivered a 7% increase in operating cash flow and an increase in adjusted net earnings to $0.19 per share.

On the back of this, a quarterly dividend was maintained on a $0.10 per share. And it’s important that I point out the fact that we are managing this company for the long-term, and we are not — we are very diligent about — we thought carefully about our dividend policy. We are respecting that policy and not disregarding it. We remain the strongest balance sheet in the industry. And as we build back on the back half of this year, we will build up our cash balance again materially. At the beginning of the year, we launched our new safety drive, as you all know, and we call it Journey to Zero. And it went — I specifically led it across the entire group and it certainly started to produce results. If you look at the lagging indicators, which is not what we’re using to manage against, we have the injury frequency rate down 38% quarter-on-quarter.

But what’s key is for the first time North America region, the whole North American region reported an injury free April. And so that’s a key step in our commitment to getting our operations back where we expect them to operate as far as safety goes. And LatAm and the Pacific region also recorded zero lost time injuries for the entire quarter. So those are key, more important than the lagging indicator trend. We’ve methodically tracked our Journey to Zero. And following a full review, we’ve developed the new fatal risks and associated standards as shown here along with critical controls of each of the 10 fatal risks. And part of our risk management overview, we also reviewed and updated our field level risk assessment tool that is standard throughout the organization now.

And really the big drivers to get every one of us, particularly the leadership, completely embracing this Journey to Zero. Sustainability, as you all know, is central to Barrick’s strategies and practices. And it is what secures our crucially important social license to operate. And there were no significant environmental incidents during the quarter and the year-to-date. And our average water use efficiency for quarter two was 82%, and for the half year 83%, and again, beating our 80% target. Also our greenhouse gas emissions were down 5% quarter-on-quarter and 12% against the same period last year. And as you see in this slide, our commitment to biodiversity takes many forms, but was exemplified last quarter by the Barrick led reintroduction of white rhinos to the Garamba National Park in the Northeastern part of the Democratic Republic of Congo.

And Garamba National Park we’ve been supporting since from Randgold days back in 2009. And it’s also — it’s a personal goal of mine to see this happen, and it comes with another message, and that is, when we arrived in Kibali, the Moto goldmines back in 2009, the Lord Resistance Army was all over the place. And today, the fact that we can put rhino back in that park means we’ve really got on top of the security. So it’s a massive sort of symbol of what mining can bring to these conflict zones. And having just come back from Pakistan, I’m absolutely convinced that if we do the Reko Diq right, we’re going to see the same sort of effects, if not better, more tangible in that part, the part of Balochistan where Reko Diq is going to be built. Another key point — and I’m not sure all of you are aware of this, but staying with sustainability, also very pleased to announce that we’ve achieved full conformance with the recently formulated global industry standard on tailings management.

And you would’ve seen an announcement on Friday, with the disclosure of information on our website as per Principle 15 of the standard for our very high and extreme consequence facilities. And I’ll just point out that Barrick has long been a leader in the responsible management of tailing storage facilities, and we welcome the additional disclosure, which is part of the new standard. Over now to the operations and we start as usual with North America where we continue to build our value foundation in Nevada Gold Mines, already far more than the sum of the parts that were combined in the merger. And NGM is on the cusp of entering a new growth phase as I hope to show you in some of the exploration slides. The knowledge gained from a better understanding of the orebodies is generating new targets and discoveries as well as new concepts designed to deliver life of mine extensions and potentially the next wave of Tier One assets in one of the world’s most prolific gold districts.

These are the Nevada Gold Mines’ operating results with production as I referred to in the introduction, up 11% quarter-on-quarter. And it remains on-track to deliver on its 2023 production plans. The higher production delivered a meaningful drop in all-in sustaining costs, as you can see from the slide. And we — this is a trend we expect to continue into the second half of the year. Since creating Nevada Gold Mines, it’s worth noting that we have replaced 16.5 million reserve ounces depleted by mining. And as you can see, how we still have a wealth of opportunities, with the potential to be big value drivers, and are confident that exploration will sustain reserve replacement and deliver an inventory that will secure a 15 year planning horizon and beyond, and I will come back to that replacement strategy, because as we had in Randgold, we are now developing a plan to replace our reserves through the advancement from inventory to resources and then to reserves.

And in Nevada, we are starting to see that plan as well. There is no better place to start on this slide at the top right. This review then at the Carlin Trend, which is the gift that keeps on giving. We continue to intersect — and this is quite important, you’ll see at the bottom that 23001 intersection, that we continue, these are Carlin top grades. And in our quest to expand Carlin in the greater Leeville complex, and we are continuing to consolidate the ground around this. And we are talking multi, multimillion ounce opportunities. And we are starting to see that definition, and we are expecting to be able to share some of the holes that we have drilled now, but we are still waiting for the verified assets. But the one thing I have always said to many of you is that, when you hit world-class orebodies, you don’t have to send the assays, the logs to — the assay lab to work it out.

So we are super excited about this potential. At Cortez, the Barrick owned Fourmile discovery is well on its way to Tier One status. We shared some of these results with you last quarter. These are big numbers. With every intersection now, we are starting to show more opportunity, and the most recent of these discoveries is the Dorothy breccia, which you see referenced in the slide. But these intersections add significant ounces every time we drill a hole, that’s where we are in the orebody today. Strong drilling results, staying with Cortez Complex, from Robertson, which show its potential to grow into a multimillion ounce asset. And this is — it’s very important, Robertson. It’s still got to be permitted. We are in the process of permitting it, but it’s a multimillion ounce oxide deposit.

And that’s important for Nevada, because we’ve got capacity in our oxide mills. And you’ll remember that Newmont were going to close down their oxide mill even before we did the deal and we’ve kept them alive. And this is a very key asset. And we’re still looking to expand this footprint. It’s been a very successful exploration project. And finally, at Turquoise Ridge, we’ve now opened the main, what we call, Turquoise Ridge underground orebody to the Northwest and the Southeast and — as you see here. And again, significant intersections and that really — this is the least developed of all the world class orebodies in the known Nevada operations. And I’d just pause there for a minute and just point out that the greater Leeville area and certainly the extension as you see on the slide, that’s a completely parallel world-class target that’s running parallel to the Goldstrike Meikle trend, which is what made Carlin so famous.

And we are really at a stage of developing a sub parallel target along really key — one of the key faults, which will parallel that world class trend. That as I said, has made so many mining companies wealthy. Barrick, also, in addition to our Nevada joint venture, continues to expand its North American footprint. And drilling is confirming significant discovery potential across the multiple targets in Nevada, away from Nevada Gold Mines and framework drilling has started on our Pearl String project as well. And ongoing generative work and ground consolidation is progressing across the Western United States. Again, we’ve got some developing opportunities, which hopefully we’ll be able to share with you in — during the next quarter. And in Canada, mapping and sampling at the Pic project near Hemlo has identified some interesting mineralized structures.

Our geologists have also started work on the new Sturgeon Lake project, and we’ve signed an agreement to earn up to 75% on the Patris project, which is just Northwest along the same trend as Malartic. So again, we’re in the right place and we super excited and we try, as you know, to look at opportunities to go through M&A, but our geologists are starting to point to some real opportunities to expand our business here in Canada. Moving then on to Latin America and Asia Pacific region, the team is doing a great job, particularly the exploration team. We are busy rationalizing a large historical land portfolio now, as well as particularly along the Andean trend. And we also are moving to secure new opportunities. We’ve expanded our footprint in Chile, the Dominican Republic and Peru, where we’ve made some exciting early stage progress, particularly in Southern Peru at our Austral project.

This region also covers Porgera and Papua New Guinea and Reko Diq in Pakistan, where there have been some very positive developments during the quarter, which I’ll take you through. So starting with PV commissioning, as I said in the intro of the expanded plant, was impacted by ongoing equipment failures relating to the flotation and mill circuit pumps. And we are working with FLSmidth to address these issues and rectify some design flaws. And I just explain, we’ve installed the biggest flotation cells ever, or certainly ever biggest that FLSmidth has supplied. And we’ve had some issues with some of the shafts and the gearboxes and we’ve had to retro engineer them and they have also rebuilt some new ones and sent them in. So we are busy working with them and it’s until we get that settled, we are running all the circuits, but we are going to take some time to ramp it up to full production.

We are still expecting a much stronger second half than the first half. And this — the expansion project we are confident will achieve its full capacity at the end of this quarter, maybe early next quarter. Once completed, the plant inspection and mine life extension have been designed to support an annual production of above 800,000 ounces to way beyond 2040. And this really does make PV a standout Tier One mine and we’ve got six of those and we’ve got a couple in the making and we are very clear about how we define Tier One assets. And I — just to remind you, when we did the merger, PV was — if we didn’t get a solution on the tailings facility, it was going to close in 2021. So we’ve now got the permits in place and we’re good to go as far as the expansion goes.

And that’s when you try and put a value on that, it’s like a very big discovery. This is a 22 million ounce prospect, it’s big. As I mentioned, Argentina Veladero exceeded its planned production, which is particularly commendable considering the very difficult operating environment. Argentina’s ongoing currency crisis has created strong drilling results from the Morro Escondido target pointed — point to its potential as a satellite to Veladero. We’re busy doing that modeling right now, and exploration is also focused on those other targets immediately around Veladero. I think the team is now fully motivated having achieved some success with Morro Escondido. And again, you would recall we cut back on Veladero, delayed some capital into end of next year.

This is a very dynamic year in addition to the currency crisis and election year. It’s an election year that’s been spread over the whole year. And so, we know now who our governor is in San Juan, but we still got to go through that rock and roll process to get the federal government in place and elect a President. So as I noted again earlier, we are rationalizing our operation portfolio in Latin America and prioritizing our portfolio. So getting our resource triangle, people know me know exactly what means in order. And we continue to secure more ground in that area. This is a quick snapshot of where we are looking and we certainly are excited about the prospects. And we have got a completely new team. It’s taken couple of years now to get that team to start really understanding what we want and where to go.

And we are now starting to get those results. And then flipping across to Pakistan. The feasibility study at Reko Diq made material progress this last quarter, and is still scheduled for completion by the end of next year, with 2028 targeted for first production of concentrate. Infrastructure development is underway. And the refurbishment, which is a key thing of the — airstrip has been approved for flights with a weekly charter now going to flight — to site. And in line with our commitment, as you see in this inset to early benefit sharing with the people of Balochistan, we have already established two primary schools as part of our community investment, as proposed by the newly formed community development committees. So this is something that’s in partnership with our communities.

And by the way, I personally, along with the senior executive of Barrick, have been to all those communities. And it’s worth noting, when you look at the Afghan story and you look at this story and the Baloch people are across in Afghanistan and in Balochistan of Pakistan. And you see the school, and you see that they are more or less 50-50 boys and girls. It’s quite an achievement. And I will tell you a little bit about Balochistan, particularly around Reko Diq, there is no economic activity. And so when you give people a chance to earn money, it’s amazing what happens. And it’s the only place in the world where I’ve seen more schools than kids. In fact, all the schools are empty. And so why? Because there is such poverty that the children have to work to survive.

And so us coming there and supporting the children, giving them square meal, getting them to school is the only way they can get educated. And this is part of a program that we did very well in Kibali, and that is educating the future operators of the mine ahead of the mine. So we have done it. We started with — it is a multi-generational mine. So we have started with junior school. We have also looked at vocational training of those young teens and then we have gone abroad and looked across the universities for Baloch people who are — have already finished or about to finish their degrees in — particularly in engineering, but engineering, some economics and processing. And so the first bunch we’ve now contracted and they will be moved to our operations around the world and they’ll start working with us with intention that they will be the leaders of the operation when we turn it on in a few years’ time.

So — and again, that’s — we recommissioned Kibali with local people. So every day most of our workers go home into the villages around the mine. And so the community is, are our workers. And that’s our intention in for Reko Diq as well. You would’ve seen some announcement on Porgera recently. We’re at last nearing the end of the long road towards the mine’s reopening. And the key one is we’ve applied for the special mining lease, which is the one that was removed, as you recall, at the end of the last lease period. And for that to — process to close, we needed to have a number of regulatory procedures. First one is what they call the warden’s hearing. That’s happened in all the different selected regions. And we’ve had a security forum led by the key ministers and the Prime Minister himself.

And during that forum, the Minister of Mines formally opened the development forum, which is the critical process where everyone has a chance to engage and discuss and share what they want. And it’ll ultimately culminate in the — it might not culminate in a full mutual agreement across every aspect because the negotiating tactics in Papua New Guinea has started 120% and see where you land. But it is a serious engagement and it will — during this process, the government will get to a point where it’ll finalize its own review of our applications for the SML, and then we’ll get that awarded. On the back of that, we’ve started the preparation of the mobile fleet. After all this time, we’ve had to upgrade some of the tanks — tankage in the processing facility.

We have a new crush on order, and we’re getting ready to start up. And our expectation is that we should be able to start and get poured our first bar of gold this year. And every time I say that, people say, don’t you have any more granularity on that? And I say, no. But in the fullness of time, we will. And all I can say is that everyone wants the mine started now. So you will see the updates as we get closer to that day. So with that, we move across to Africa and the Middle East. And this, remind you, is by far the most consistent performer in our portfolio. And it’s not only a reliable contributor to the bottom line, but also a host to a wealth of gold and copper opportunities. The Loulo-Gounkoto complex delivered its usual strong performance and is on track to achieve its 2023 guidance as it continues to invest in greening its power supply grid, as well as replenishing its reserves and looking for more.

And again, this has been a spectacular asset. It would be remiss of me not to point out that Mali is not without its challenges, and I would add it has never been without these challenges. We have been operating there for 26 years, and in that time, Loulo — we built Loulo-Gounkoto into one of the world’s 10 largest gold mining complexes as well as the country’s largest taxpayer and employer, certainly largest employer outside government. We’ve had a constructive relationship with successive governments through some very turbulent times. And in recent weeks, I’ve personally engaged with the key members of the current leadership about their proposed new mining code. And I’m very optimistic that as in the past, we’ll find a mutually acceptable way to keep gold shining for Mali.

In West Africa, there’s a lot of opportunities, I pointed out. It’s a very dynamic place right now, as you would’ve read in the newspaper with the latest [indiscernible]. But staying with Loulo, we’ve — we continue to define wide high grade intersections on the extensions, along the big structures that host the multiple world class assets around and within the Loulo-Gounkoto leases. While also across the border in Senegal, we continue to evaluate the Dalema joint venture in particular and we’ve got the Bambadji joint venture, and we are continuing to expand our footprint in Eastern Senegal. And in Cote d’Ivoire, we’re assessing the Fonondara satellite deposits and other high priority targets. The team has been extremely successful in adding to the life of mine of Tongon.

Moving across to the Democratic Republic of Congo and Kibali, again, Kibali overcame its first quarter challenges to deliver substantial improvement, as you can see here in production for quarter two. And it’s — it has its back on — this has really set it back on course to achieve its full year guidance. And we also are really focusing on our underground development to build additional flexibility and be able to support the new 10-year mine plan. And ongoing exploration really has highlighted to immediately to the West of the KCD main series of deposits, the potential for more of the same. And we’re quite excited about this recent development. And in Tanzania, which is a real success story. Our Twiga joint venture with the Tanzanian government is a poster child for my thesis that mining can be the force that makes undeveloped countries investable.

And there is no better example than Tanzania. And it’s great to see BHP putting its toe in the water in Tanzania on the nickel project. After Barrick took control of North Mara and Bulyanhulu in 2019, it transformed them into operations capable of producing a combined 0.5 million ounces annually; in other words, a Tier One production profile. And we have also shown that we can achieve this, and what you can achieve when a mining company and its host country work together to develop its natural resource endowment. And last quarter, conversion drilling at North Mara replaced all the reserves, depleted from mining and we mined the first ore from the Gena pit and additional opportunities for resource conversion. Buly has got a very long life, nearly — and well into the 20s.

North Mara is just over 10 years. So a big focus there. And it’s worth having a look at this slide, and that is, we have three Tier One terrains in our Central and East African holdings. The Kibali lease here are very covered. A new exploration footprint South of Bulyanhulu, and high priority permits along the Gokona corridor, which I’ve just referred to. And again, Gokona corridor is an exciting opportunity. When we were in Randgold Resources, we were always trying to get our hands on those extensions. And it’s taken us a while to secure the permits, because they were lapsed, they lapsed under the Acacia time. And so we’ve now got them and we are starting to evaluate them. And we are super excited about the opportunity to extend North Mara’s life of mine on the back of that.

We also have a very significant intersection beneath the Nyabigena pit, as you see here, and it’s really got everyone’s attention. We’re not sure about how it actually fits into the orebodies at the moment, but it’s a recently confirmed intersection. Moving across into Zambia. And, in generally, our copper operations, as I pointed out, Lumwana is well set to achieve its guidance for the year. It really is going to have a strong second half. And with the implementation of its owner miner strategy, and the commissioning of the [indiscernible] and commissioning of the new fleet, where we replaced the contractor, which was very expensive. We have already seen a reduction in costs, as you can see here on the slide. And excited about the prospects of Lumwana.

Lumwana has the potential based on our preliminary economic assessment to be equivalent to our share of Reko Diq investments. That’s how significant it is. So I would point out that at the time of the merger, no one believed in Lumwana. It was a high cost producer making no money, and its subsequent transformation into a potential tier one asset in our copper portfolios, another one of Barrick’s big success stories, and we are talking about significant reserve conversion on the back of the feasibility study we are busy with. And the projected expansion on the back of this new Super Pit, as I pointed out, we’ll add significantly to its production and take the mine life to be on 2060. And so we are on track to complete that next year. And we’ve scheduled pre-construction starting in 2025.

And our forecast at the moment would bring that expansion from Lumwana ahead of the Reko Diq delivery on its first concentrate. We’ve got some — and we’ll be detailing this on the back of the final studies on both projects. In Saudi Arabia, Jabal Sayid maintained its consistent production and kept its cost below the guidance ranges and early results from our new property Umm ad Damar are exciting and really it’s a start of something I believe that’s significant and what’s more, it’s been the foundation of us growing our relationship with the Kingdom of Saudi Arabia. Before I just touch on — and the last one is Chile and Zaldívar, which is largely more of the same. I would just point out that really it’s Lumwana and Kibali that are key for the second half delivery for AME as a whole.

But all the AME operations are on track, on target to meet their guidance. And then two more slides, the one that I referred to right in my introduction, and that is if there’s one thing more than any other that sets Barrick apart, and I know it’s not snazzy and it doesn’t require M&A and all that other stuff. It’s been our ability to deliver sustained and significant growth in reserves since the merger. And remember, we were all in the same boat before that in 2019. And we’ve replaced 125% of the gold that we’ve mined or the gold equivalent that we’ve mined, including the copper, since the time we started out on our new venture. And again, we will be sharing with the market our strategy of a three year rolling replacement model, because we do have some very big assets.

So you’ll see the inventory build and then you’ll get a big kick in the resources and then you’ll get the conversions. And over three years, we are very comfortable and slowly we will build it into a shorter term cycle. Of course, it goes without saying that the contributions we are going to make to our copper reserves and resources are significant on the back of the work that we are doing, both in Pakistan and also Lumwana in Zambia. We continue our work not only to hunt those world class gold deposits, but also copper, in all the big copper terrains in the world today, apart from Russia. But otherwise we’re very knowledgeable about what’s going on in the copper — big copper fields of the world as we are with gold. And again, our view is growth for Barrick going forward is based on asset quality.

And I think that’s really when you look at our portfolio today, we’ve got six Tier One — proper Tier One assets. We’ve got a whole pile, five world class assets. Porgera is one of them, it’s a 500,000-plus ounce going to 800,000, close to 1 million in some years. We share the economics on just about a 50-50 basis with PNG Inc. So it’s a significant share of value for Barrick. We’ve got, of course, Veladero which is no small asset in partnership with Zijin. Right now we are managing the situation politically. We’ve got Lumwana coming on and that’s without — if we can prove it, which we have no doubt, we will is a definitely a Tier One copper asset and of course Reko Diq once we get through the start and convince everyone this is a real value asset that’s right up there with the top five in the world.

So, when you look at our portfolio, Tongon is the one that’s the least as far as when you look at it, but it’s a very good cash producer because it’s built so well that our sustaining capital is so small. And you’ll see them — the costs relative to its — total cash cost, it’s all in sustaining costs, so not as high as other mines, and it’s just about can we find more? And at the end of the day to close, it’ll cost us around $30 million. So it’s not a big risk in our portfolio. And so — and Zaldívar is a partnership as you know with Antofagasta. And then the last asset in our portfolio — so we don’t have a long tail in our portfolio, we sold the tail at every time we did a transaction. And the only one that we have to deal with is Hemlo, and we’ve got some real plans to do that.

We’re looking at pushing back that pit again with the higher gold price. And we’ve done a lot of work and pick the Pic projects just up the road. That’s important for us. So I’m actually there for the weekend with the team looking at strategies as far as Hemlo goes. So another differentiator in this sort of whole of M&A is the fact that we have a clear path to increasing our gold equivalent ounces by 25% towards the end of ’29. And that is a very significant and a standout point because as you know, many of our peers have been forced into M&A because they just haven’t been able to replace the ounces that they’ve mined. And I would finish ladies and gentlemen with the fact that we certainly celebrate for the first time that on a consensus basis the analysts are showing that Barrick has more value than Newmont.

The challenge is we are still at a discount to that valuation. So our focus now that we have got our business clear, we have got our teams in good shape is that, we are going to be working really hard to get us up there, where I certainly come from, and that is a good premium to our underlying value. And we have got some big things to work on. Of course, there is a big delta with Reko Diq. There’s another delta with Lumwana. There’s another big delta with Porgera as we bring that on. And again, there is a big delta in Nevada Gold Mines. And as we — not only within the whole joint venture, but when you add in the prospects of, Fourmile, it’s a significant asset for us and as I’m sure it is for our partners. So with that, thank you for listening.

We will be happy to take questions. We do have some of our team members online and we are going to thank you call first. And Graham, of course, is here and a couple of other executives are in the audience here in Canada. So over to you, operator, to manage — no, we will take questions here. So we will manage this process going forward.

Q – Jackie Przybylowski: Thanks very much for the presentation. It’s Jackie Przybylowski from BMO. Mark, can you talk a little bit about your plans at Zaldívar? I know, you have mentioned in the MD&A that it’s now classified as non-core? Do you have plans to divest that at some point?

Mark Bristow: I think, at some point, maybe. Right now, we have just applied for the — with Antofagasta with an extension of the life of mine and the permitting, which we are dealing with at the moment, which shows a much bigger, longer life of mine than we currently have. And the reason we say that is that, just in reporting, it’s a steady, small operation. It’s managed by Anto. We have a active role in that management as a joint venture partner. As you can imagine, we are not very good at standing back. But that’s the basis on which we have put it in that category. And again, you know better than me. Despite the fact that the copper market is in absolute short supply, and you just have to go a little way and then there is nothing, there is a softness in the price. So at the end of the day, we will manage that strategically.

Jackie Przybylowski: Can I ask one to follow-up as well? On Porgera. Can you talk a little bit about the process from here and what needs to be done for your restart?

Mark Bristow: So, really, it’s the special mining license, which we are waiting for, which will — we have done all the other regulatory work. We have got everything in place. We need that special mining license, which means that we have all the communities signed off. And once we can do that, we are — and I had a very good town hall with all our key landowners when I was last there two weeks ago. And so there is no doubt everyone wants this mine opened. And it’s a very significant deal because never has — have the landowners had the potential to earn so much from a gold mine so — or any mine in Papua New Guinea. So I think there’s lots of drivers. Of course there’s also the obsession with being able to negotiate the terms, which we’ve already settled.

But that’s the good thing about Papua New Guinea, as frustrating as it is, is a full consultation before that special mining license is issued. And we know Barrick Placer and then Barrick had 30 years of no issue, because they got that process right. And we are very mindful that it is litigious society and you got to do this thing to the book to make sure that we can mine for another 30 years.

Josh Wolfson: Mark, you made a couple of comments about the fundamental outlook of the company being very constructive based on the gold price, based on the growth outlook and then the valuation of the stock where it is. I’m wondering what your thoughts are on using some capital towards the buyback going forward.

Mark Bristow: Yes. Josh, that is, entertains us, Graham and I almost every day. We have bought back in the past and we — I think we — again we don’t want to risk our balance sheet right now. We are very well positioned. We have a extremely strong balance sheet. We are forecasting a growth in cash and that’ll trigger a net cash position. And as we approach that, the one option which is the preferred option is to buy your stock back. Because we absolutely — we are completely in agreement with consensus and that is we’re trading below what we should be trading and it makes sense to buy. So there’s no risk in buying our stock back. It’s just how we manage our balance sheet towards that.

Josh Wolfson: One more question. You made a statement about Porgera being a world-class Tier One asset and with some comments about bringing up analyst expectations. Could you maybe remind us what you think the potential economics of this asset look like? Meaning, what’s the initial capital to get this to Tier One status and then what the production and cost structure would be?

Mark Bristow: So, it’s a low cost producer, because it’s relatively high grade. It’s single refractory also autoclave mill, crusher mill, simple process, know it well. If you look at consensus, the valuation is around 6 billion to 7 billion on consensus prices, 5% discount. Graham?

Graham Shuttleworth: Yes.

Mark Bristow: And so — and it’s about $1 billion of capital over the next 10 years slightly weight, it’s front end loaded. But again, we’ve got a bit of work to do on that. A lot of it depends on how we treat the Wangima pit, which is not in reserve yet. So I’m talking about total resource now. 10 years we’ve got banked and that’s important for us, because we get to the 50/50 sharing of economics. And our intention is that we will create so much value for everyone. No one else will want to — the government and Barrick will be partners forever. That’s the intention. So, — and there’s a big push back on the Western wall of the main pit that we’ve going to address. And that’s what we busy with at the moment, is designing, doing that.

As I say in the press release, we are designing that pushback at the moment. I think that I can say the underground is in better condition than we expected. So we are happy with that. We’ve had this constant sloughing of the Western wall, which has always been a challenge at Porgera and we need to cut it back and put some remedial work into that wall. The traction is that there’s quite a lot of ore on that pushback. And what we hope is that we’ll be able to pay for that pushback. And then you’ve got the Wangima pit, which really brings a whole lot of additional resources into the mine plan and potentially takes it to 20 years, which gives you that big number if you look at it. And we are using — that’s a broad rough valuation on using consensus prices.

But the key for us is, but in 10 years we more than get to the sort of 53/47 split, economic split. And remember we sweep all our costs that we’ve incurred to date from the government equity to equalize. And once we get there, then everyone else benefits. What’s important is that the landowners and the province benefit preferentially. So it’s carried equity, just to explain. Graham, do you want to add to that?

Graham Shuttleworth: I think you’ve done a good job there. I mean the key point, Josh, really is that when you look at our economic interest there and you contrast it to the equity interest, the economic interest is almost double the equity interest because of the way that the cash flow split works. If you compare it to what you would get in a normal situation if you were paying corporate taxes in a 3% royalty. So the combination of that economic splitting of the cash flows combined with what Mark just referred to, which is the sweep of the cash that we’ve already spent, means that our economic interest is considerably effectively double the value of what the equity interest would imply.

Mark Bristow: And Josh, this goes back to the Tanzania deal that we made and the point that I’ve been making all along is the problem of the mining industry is they’re go and invest and promise the world and then they don’t make the money because they don’t deliver on the plan. So the government gets nothing, because all they rely on is taxes. So what we did in Tanzania is we took the economic interest and split it down the middle. We true it up every year. That’s a bit complicated, but we do. So the government gets the tax amount, but if we do not pay tax, they still get 50%. So it’s a much fairer way of doing it. And again, Papua New Guinea hasn’t — Porgera was a special example. And ironically it paid — the foreign currency crisis in Papua New Guinea is directly because we’re not expecting importing gold from Porgera because it’s the big biggest producer and the biggest, the most profitable company in Papua New Guinea.

So, that’s the same thesis is that, the Prime Minister wanted 51%, which I was very happy to give. I mean, after 30 years, he wanted a different deal. He wanted to make sure that, he could get all his legal taxes and he wanted to participate in the equity, if we delivered on what we planned. And if we didn’t, he wanted still half of the production. So that’s what we have agreed to do. And it’s a great way of doing business, I believe. And one thing, the only risk is, you have to be absolutely convinced you can deliver on your mine, and the models that you shared. And we have done a very similar model in Reko Diq as well, slightly more skewed that Reko Diq is a much bigger asset. But — and also the government are taking a lot of risk themselves, through this state-owned enterprises, and regearing it with equity, with a global funding package.

Josh Wolfson: With debt?

Mark Bristow: With debt. Sure. Sorry. We are gearing it with debt. Sorry, not equity, with the global funding package.

Lawson Winder: Hey, Mark. Lawson Winder from Bank of America. Thank you for the presentation. Nice to see you today and the team. I wanted to touch on reserve replacement. So you spoke to the importance of reserve replacement to the value of Barrick. What is the outlook for this year and which assets do you see driving that outlook?

Mark Bristow: So Africa will replace all of its gold and copper that it’s mining. The one that won’t will be LatAm, but it’s going to bring a whole lot in with Porgera and Reko Diq that fits in that region. And we have got this new series of projects in around Veladero, and we have got some super exciting projects, Southern Peru in particular, and other parts of South America, which we will share with you in the next quarter or two. Nevada Gold Mines will add about between 50% and 60% of its current — its this year’s production, but then it has a big year next year and the following year. And so that’s why what we have said is, there is on a three year rolling average, we will continue to replace on ounces. And we will get Nevada.

We are just about there with Nevada like we have in Africa. And again, Lawson, so much so that, we are engaged in conversation because in Randgold, we used to have — some of our incentives were based on reserve replacement, at least reserve resource replacement. And I believe that’s a very good metric in any mining company to remunerate management on. So that’s how significant we believe in the importance of organic growth, because it makes — particularly when you look at — because we have got really big assets and we now close to have completed the recapitalization, because the Barrick side of our assets were run down, and both sides of Nevada Gold Mine were run down, Barrick side was high graded, the Newmont side was just run down. And we’ve recapitalized that, we’ve now got a resource base on the top of that.

And so if you add to it, your returns are significant. They become infinite because you are adding ounces on a capital base. And that’s the game about big mining assets is if you’ve got big orebodies and you’ve built the mine properly, it produces along — the copper miners are good at that. That’s what makes them so valuable.

Lawson Winder: I wanted to follow up, excuse me, on a comment you made about the value of Barrick’s assets, but then the multiple discount in the market. And I mean, I think you make a case here for why the assets are strong, why the assets should be strong going forward with the reserve growth. What is the market missing or has the market missed over the last two years in your view that’s led to that discount?

Mark Bristow: Well, I would start with the fact that perhaps it starts with the analysts and the management and that we haven’t had that conversation. And so it’s pleasing to see that valuation coming through on a blended consensus basis. So that’s a good thing and we — I’m very mindful, and I said this right in 2019, we had a job to do and you don’t build great mining companies easily today, particularly not gold companies. They’re tough things to build. I’ve built one myself and now this is the second. And again, we are mindful that we have to be able to — I mean, we’ve always — I’ve always been that sort of person I like to support. I like to have an argument as Josh will affirm. But I like to do it on the back of something that’s tangible.

And I think we rarely are there today. And the first step is, it’s very helpful when the analysts group are recognizing value. And it’s even more exciting when there’s still headroom, which I’ve just pointed to. And by far, if you look at our performance, what we say, what we do, how we’ve managed our balance sheet, what we’ve promised to the market, we’ve been consistent like we always are. So I don’t think there’s any doubt in the minds of anyone. Of course, there’s some people are a little nervous about where we’ve gone. They were the same when we went into the DRC. But today, when you look at the portfolio of assets around the world, the risks are very similar, different but similar, or the same. And what we’ve shown is big assets work, if you pay rent.

If they’re big enough and they’re valuable enough to deliver value to your host country it’s — and I’m sure Lawson, you’ve followed United States mining law and the debate in Rosemont and all that. I work as hard with the team in the U.S. as I do in Pakistan and West Africa. And gone are the days where you can run mining companies from a 16-floor office block in the developed world. You have to be out there. And again, getting back to how we manage our reserve resource replacement, and that is we move that ownership out to the mines. We’ve changed the management to be real business people who lead our minds, and they own those assets. They’ve got quality geoscientists, processing engineers. It’s not — we don’t remote control our business from a central corporate office.

We do hold them accountable and we are always there. I always say to the team, if you go off-piste, you start seeing us. If you rarely get off-piste, you see us all the time until we get you back on track. And that’s the way we run Barrick.

Brian MacArthur: Sorry. So maybe to follow-up — sorry, Brian MacArthur, Raymond James. I mean, probably one of your hidden values that you’re starting to highlight is the Super Pit. I mean, this thing could be on its own, one of the better copper mines out there in the world. Plus you’d have a gold credit. Does it make sense to be have all the copper in Barrick going forward given how big a good a copper company you’re going to have? Second thing without — you probably can’t everything on the PFS, but through to 2060, is that a pretty stable production profile out of the Super Pit? So again, it’s basically duration forever?

Mark Bristow: Big, low grade pit. And what happened is the Chimi pit, it got segregated because people — Barrick was in a position trying to make money so it dived down and it chased the grade. And it’s a challenge to chase grade in a low-grade blended sedimentary-hosted copper deposit. So, — and what we’ve done is just go back to geology and there a couple of satellite pits that are genuinely higher grade and lower strip ratio. And the exciting thing about Lumwana is that we run the risk of doing the whole pushback for the Super Pit without going negative cash flow, because we have these satellite pits that can — so we mine the same strip ratio on a copper waste basis. And so that really — and that’s our team. That’s what they — but once we got the cost down, so we got the cost down right in the beginning.

We understood, got to know there’s orebodies and that — and then we looked at the other satellites. Again, a bit like West Africa, they were known in the form of anomalies, but no one had ever stuck a hole in them. So that’s what we’ve been doing. And we’re far down the road on that process. So we’re confident enough that we’ve got enough copper in those satellite pits that’ll support. Right now we are mining and we’re going to hit some higher grade zones in Lumwana pit, Chimi pit now. And at the same time we’ve replaced the contract miner with a new fleet of Komatsu 100 ton trucks. And we’ve dropped the cost by $2 a ton. And that is really changing and you can see it in the numbers already in this quarter, this last quarter. And so that — so we all manage that pit to a point where we’ve got it open on strike and then that big push back to create the Super Pit, we’ll use the satellite pits to do that.

We are right in the middle of permitting the new tailings facility. It’s largely a negotiation with the tribal chiefdom of the region, which we have had a longstanding relationship with, as far as the authorities go with what support on that.

Brian MacArthur: So if I look at the slide there, 2029, I mean, you have got Jabal Sayid in there, and you have got Zaldívar in there, but you don’t have Reko Diq too, right? So you’re going to have, like, a…

Mark Bristow: Yes, we are going to have…

Brian MacArthur: [A 5-year thing at that].

Mark Bristow: And we are actively hunting in the main copper belts. We are in the — all the copper belts of the United States. And let me tell you there is some significant opportunities still within the U.S., as I showed in that slide broadly. And so we are — and again, we believe that, if you believe in the numbers, which I have always worked on. The U.S. is going to have to change the way it manages mining. And we have taken that bet, to get out there ahead of the — and again, we are the biggest miners in the United States already. And we are probably the biggest explorer, sorry, I stepped out of the box. We probably — okay. We are probably the biggest explorer right now in the U.S. as well.

Brian MacArthur: Thank you.

Mark Bristow: Anyone else? Operator, we pass it back to you for any questions from the call-ins.

Q&A Session

Operator: Certainly. [Operator Instructions] The first question comes from Cleve Rueckert with UBS. Please go ahead.

Cleve Rueckert: Can you hear me okay?

Mark Bristow: Yes. Perfectly, Cleve.

Cleve Rueckert: Excellent. Thanks, Mark. We have had a little bit of technical difficulties online. So I apologize if the question is redundant. But I think in the prepared materials, you called out Cortez, PV and Turquoise Ridge as some of the assets where there was some maintenance, there was some investment done in the first half, and then you expect that increased production run rate into the second half. I had a similar question last quarter. Do you expect that second half run rate to continue into 2024? Like have you done the bulk of the kind of bigger work that you need to do with those mines in order to sustain production at that second half run rate?

Mark Bristow: Absolutely. And, look, let me just take one at a time. So the Cortez maintenance is really development and the — it’s not really actual like processing maintenance. Turquoise Ridge was a premature hotspot on one of the autoclaves, and we brought it forward. It was going to be in quarter three normal planned maintenance. Again, we brought it forward. We changed a lot. We used the opportunity to change a whole lot of gear pumps and tied it up. We have got quite a bit of work to do to get Turquoise Ridge to where we want it to be. The roaster maintenance was a big maintenance, scheduled maintenance on the Goldstrike roaster. More importantly, it was the shutdown on the Gold Quarry roaster and also we used that shutdown to tie in on the expansion project.

So we got one more shutdown to do next year. I think it’s second quarter scheduled for and we’ll finish the expansion of the Gold Quarry roaster. So not only do we maintain the run rate, we lift our throughput capacity in the Gold Quarry roaster by between 15% and 20%. And so we bring down the costs and so we add production capacity, because right now Nevada Gold Mines is constrained on double refractory ore processing capacity. We’ve spent a lot of time on planned maintenance to the point that a lot of the planned maintenance was planned, because it was neglected. And so we are getting back to a proper plan maintenance, which is scheduled maintenance, which is a normal course of business, which is baked into our forecast anyway. So, but to answer your question in simple words, yes, you’ll see the throughput maintained at a higher rate, largely because we add more capacity next year.

Cleve Rueckert: And then one, just quick follow-up. The Goldrush Record of Decision is something that continues to come up in sort of our conversations. And I see that you’re expecting it now, I think in Q4. But there was also a little bit of discussion around some modifications to the BLM. I’m wondering if that Record of Decision is restricting development there at all, or if these small modifications are allowing sort of timely development to continue?

Mark Bristow: So on the development side, we are continuing. It does start impeding production, because we need to get ventilation up ahead of where we are. And so if it queries on much further, it’ll impact production. We’ve guided that we are looking at the specific impacts. At this stage, this is all about Rosemont and Department of Interior and we’ve been engaged with them all the time. And again this issue about permitting unmineralized claims and the fact that there are two things. Goldrush doesn’t need a tailings dam. It’s mineralized everywhere underneath and where we are working. It’s got a very small footprint because we are using already permitted infrastructure. So it doesn’t fit in even if you wanted to, you can’t put it into a sort of Rosemont argument.

And it’s taken a little while for us to get BLM, the state and particularly the federal part of it to clear it. So they have cleared it now. So that’s why we are pointing to a specific time period. But it’s a little bit like Porgera, we are talking all the time and we are working towards it. We have got permission to extend the development under the exploration permit in Goldrush. So, we can run into next year and still get the flexibility in place, but we need — as soon we start having to put the raisebores up to get the ventilation cleared to be able to ramp up the ore production. So that’s really where we are. And every indication is now that it’s been cleared to finalize the EIS the first step and then that goes to the — once that’s finalized, the Record of Decision follows shortly.

And so that’s why we’ve got. And we make these forecasts in conversation with our local BLM team.

Operator: The next question comes from Alan Spence with BNP Paribas Exane.

Alan Spence : I’ve got two and I’ll just take them one at a time. The first one on Turquoise Ridge, there’s some unplanned maintenance events in the underground. Can you just expand on what that was and if that’s carried into the third quarter?

Mark Bristow: Yes, so, we had a fall of ground in part of the development in Turquoise Ridge which we — again, it’s part of our design and changing the design, which we had to step back and deal with. We had a further shutdown on the shaft on some of the safety arrangements in the shaft that we needed to fix. And we did that. The main impact was really the autoclave hotspot, which we had to take the autoclave down and fix it. We were scheduled to do that as I said in quarter three. We brought it forward. So, on balance across the year it doesn’t impact on our production. That’s really the most important of the unplanned maintenance. It was planned, but not then.

Alan Spence : And then one probably for Graham, just could you talk a little bit about cost expectations into the second half, how you’ve seen the development of labor, consumables and…?

Mark Bristow: So can you hear us?

Alan Spence : Okay, I think he went back.

Mark Bristow: Yes, back, yes. So you wanted to know about inflation and our outlook on that?

Alan Spence : Yes, into the second half, please.

Mark Bristow: So I’ll answer. Graham has got a technical challenge here. So we certainly see costs flattening off. Some sort of softening a little bit. We are forecasting a sticky sort of inflation where around where it is today. We have some higher costs, which are still Ukraine-related, ammonium and cyanide and things like that. The big driver is in the second half is increased production will bring down our costs, as I pointed out in our guidance. And we do believe that the cost will come down, but not all the way down in the short-term. And that’s the way we are managing. But there’s — as you — I will tell you from years of experience, hit your numbers on the production, costs always look better. We are certainly not facing inflationary costs right now.

We have got a couple, but we have got some plans. Like, we are much more able to manage the costs and logistics in AME. The U.S. has got restrictions on imports and other tariffs and so on. So we manage that differently. But, I think I don’t know, Graham, now that you have got the mic.

Graham Shuttleworth: I think you have got it covered there, Mark. I mean, in terms of the inputs, we are comfortable with the assumptions that we were using for 2023. There’s some swings in roundabouts. But generally, we are in line. So the costs are expected to come down in the second half as the production ramps up. And yes, that’s how we get down there. The other point just to reiterate is that our cost guidance is obviously based on a gold price assumption in 2023, we were using $1,650, and we have also guided that for every $100 change in the gold price that has about a $5 impact on our cost per ounces. So based on where we are at the moment, that’s about $15 of additional costs compared to the base case assumptions. So I think that’s important to take into consideration as well.

Alan Spence : All right. Thanks guys. The audio managed to come back at the end. I missed most of that, but I will read the transcript for your full description. Thanks.

Mark Bristow: Okay. Sorry about that.

Operator: The next question comes from Lici Wu with Haitong International Securities. Please go ahead.

Unidentified Analyst: Hi, Mark. I’m Lisa from Haitong International Securities. And I have two more questions. The first one is about the Porgera project. How — are I guess the tax issues taken by Barrick or jointly with Zijin Mining?

Mark Bristow: So, jointly with Zijin Mining, so we split at 60/40. So there was some — it was a negotiated settlement. So it was quite a tough thing to sort of assign. But we work very closely with Zijin and Chairman Chen and myself sat down and worked through and allocated some to the Barrick past, because the settlement included all the way to the new Porgera start-up. So we didn’t leave any residual tax assessments behind. We cleared the whole thing. And so there was some tax that was future based, some tax that was specific to the assessment, which was done just before they closed the mine. And then some related to the past before Zijin was part of the project. So we worked through that and basically settled, as per the down to us on a 60/40 basis. So we shared the tax.

Unidentified Analyst: Got it. Thank you. And my second question is, I noticed that our future focus will be on copper. And currently, many copper mining companies has encountered many problems such as declining grade and water shortage. Will we encounter the problem of increasing copper costs in the future? Thank you.

Mark Bristow: So the one thing — that’s a very important point you make, and that is a lot of the copper produced today is from old mines, which started out as new mines, decades ago, like 50 years ago. And so that is a challenge and of course if you’re talking Chile, water has become a big issue in Chile and the copper mining. On the assets that we’ve got, we are in a better league because of grades generally. Reko Diq comes with gold, which makes it more attractive and blends the risk of it. And on the water aspect on Reko Diq, that’s one of the critical deliverables on our feasibility study, and we are very focused on that. As I said, we’re going to be doing the first real in-depth water study for that whole part of Pakistan/Balochistan.

But the work that we’ve already done, we’re comfortable that certainly for the first 10 years we can draw water without impacting those aquifers, and there’s a lot more that we’ve sort of certainly can point to at this stage, but it needs a lot of work. Ultimately, there are further options. I mean, as that area, that whole Tethyan metalliferous belts gets developed, this is going to be a region where infrastructure and particularly desalination is going to have to be part of the bigger developments going forward.

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

Anita Soni: So I just have one left and I think it’s about PV and my apologies for the background noise here. But I had the opportunity to visit the asset three months ago, and it’s definitely an impressive asset. But you were just talking about some issues that you were having with some of FLSmidth pieces of equipment. Can you talk about how you see that evolving in Q3? And I know you said you would be ramped up in Q4, but can you tell us about how it’s going this quarter and what we should be expecting in terms of throughput for this quarter?

Mark Bristow: So, Anita, you would imagine everyone’s in PV, John Steele, all our engineers from other parts of the world, who are commissioning experts are FLSmidth subject matter experts. This is a new piece of equipment. And we’ve had challenges with the shafts and the gear boxes. We have replaced them already. We are re-engineering some of the design issues out as we speak and manufacturing some additional pieces of equipment, so we’ve got back up. So we’re working on it. I mean, for me, I don’t have a feel right now because these sort of startups, they can happen in a flash or you can work them out over a couple of weeks. So — but we are waiting for a final plan, actual schedule of how we’re going to get them back to. So we’ve got an — we are able to engineer and replace parts and engineer little pieces on, and that’ll get them running.

But we need to get this thing to full capacity. And you know, it would be remiss of me to not point out that this is a big asset that’s going to run for 20 plus years. We are dealing with it. Certainly when I sit with the team and I’ve just come from there, we’re still going to have a substantially better second half than first half at PV. And as of today we are still planning to be within guidance.

Operator: The next question comes from Tanya Jakusconek with Scotiabank.

Tanya Jakusconek: Good afternoon everyone. Thank you for taking my questions and I apologize if this has already been said, but there’s a lot of technical issues on this call today. Just wanted to circle back to Porgera if I could. Just want to confirm that, Mark, what you said was that we’re just waiting for the Special Mining License that’s on the critical path for us to start up. And I just wanted to confirm that you said that local communities have all signed off. Are those two comments correct?

Mark Bristow: So we are waiting for the special mining lease, which is the same thing effectively. But that’s what it’s termed. And the landowners agreement, as you know, we disclosed that way back when there was this conflict between us and government. The landowners were aligned with us and reinforcing the importance of Porgera and getting it back online. So the equity split is 10% to landowners of which 2.5% go to what we call the LMP landowners and 7.5% to the SML landowners, the main owners of the land on which the mine operates. And 5% goes to the Enga Province. And that’s the split. Of course, the conversation in the development forum evolves around that. And also other contracts that are always in place, like the people living down the river, people on other concessions like Dolomite concessions and other various concessions that we work with.

And all of that is part of that. And of course, the government is also committed to investing back into Porgera and the Porgera Valley like schooling, and we’ve been talking about some tax offsets even because there’s a real realization how significant Porgera is to the economy of Papua New Guinea. So the answer is yes and no, because this is a process. Of course there’s always a fallback because we have agreements, but this is a process of consultation, which is prescribed by the law, and the first one is the warden’s hearing. And that is really defined for the government through the warden in the MRA to — Mineral Resource Authority or the Mining Department to sit and listen to all interested and affected parties, and have their issues, proposals, whatever, and record them.

And that is an obligation. And then following that the development forum, which is more of an proper engagement, and it doesn’t have to be completed straight away. But once the process is far enough advanced, the government will make the decision at a point in time on issuing the SML.

Tanya Jakusconek: Okay. And when we get this SML? Can we still assume a six month ramp-up? Is that still the case for this mine to get to full capacity?

Mark Bristow: Yes. I think that once we move on to the site, six months is a good target here. We will of course, produce gold before that. But getting it ramped up, that’s a good assumption.

Tanya Jakusconek: And should I still be envisioning this mine to produce on a 100% basis about 500,000 ounces at total cash cost of 900 and all-in sustaining cost of 1,200, is that still a reasonable number?

Mark Bristow: That’s a fair guess at this stage. We will update it as we go.

Graham Shuttleworth: I think, Tanya, once we are up and running, we will share some updated numbers with you.

Mark Bristow: And once we get the start-up plan, which is what we are working on, we will guide you. But, we have got those guidance out, and they will stick until we change them. And the ramp up is — it goes ahead of that. So you working on 500 as a first crack is reasonable, on a 100% basis. Of course, it goes a lot higher than that within a couple of years.

Tanya Jakusconek: Okay. Alright. I’ll wait for that new mine plan, which would that be coming once we get this up? Would it be reasonable to assume, hopefully, like, with your guidance and…

Mark Bristow: Yes. We will give it to you when we announce that we are actually properly starting up the mine. I’ve got, Graham here, I’m trying to sort of dodge the bullet.

Graham Shuttleworth: I think, Tanya, I think, all things going according to plan. February when we do our normal annual guidance is probably the best guess.

Tanya Jakusconek: Okay. No. Thanks for that, Graham. And just on the reserve replacement, because, again, of technical issues. I just wanted to understand, as a company overall, did I correctly understand that this year, we would likely see more increases to resources and not necessarily reserves. Was that a fair statement?

Mark Bristow: That is correct. Yes.

Tanya Jakusconek: And that reserve replacement you can see occurring in Africa on both gold and copper and not in LatAm. Was that also a [fair statement]?

Mark Bristow: That’s correct. But you will see that rolling up next year.

Tanya Jakusconek: All right. So that’s helpful. And then just lastly, just on the overall resources for the company, with that have been an increase in gold and copper for both?

Mark Bristow: Yes. It’s mined copper and gold. You are talking about the last second to last slide.

Tanya Jakusconek: Yes. Okay, now that’s perfect. Thank you so much.

Operator: Our final question comes from Martin Pradier with Veritas Investment Research.

Martin Pradier : I have two questions. The first one on Lumwana, can you maintain — are you talking about much high grading in second half compared to Q2? Can you give us some idea of what you mean in terms of higher grade in second half?

Mark Bristow: Look, higher grade in Lumwana is low grade anywhere else. So it’s not a lot, but it’s more consistent and slightly higher grade. I mean I can actually…

Martin Pradier : Compared to Q2, are we talking 10% or 15% higher in the second half?

Mark Bristow: Sort of 10% is a good number.

Martin Pradier : And in Kibali, you had a good recovery. Can you maintain or improve production in second half compared to Q2?

Mark Bristow: We’ve got a good second half for Kibali, it’s good overall. The second half…

Graham Shuttleworth: Yes. It’s really consistent with quarter two. So that’s the kind of run rate that we expect for the rest of the year.

Operator: There are no more questions from the conference call.

Mark Bristow: Thank you very much. Thanks, ladies and gentlemen, those of you are here. I think we would like to invite you for a snack and a glass of wine we thought. We’d break the tradition here, new Barrick. So join us. Thank you, everyone

Operator: This concludes today’s event. Should you have additional questions [Audio Gap] and have a pleasant day.