GOLD - Barrick Gold Corporation (GOLD) Gold Forum Americas 2023 Conference (Transcript)

2023-09-19 15:46:05 ET

Barrick Gold Corporation (GOLD)

Gold Forum Americas 2023 Conference Call

September 19, 2023 12:50 PM ET

Company Participants

Mark Bristow - President and Chief Executive Officer

Conference Call Participants

Jackie Przybylowski - BMO Capital Markets

Presentation

Jackie Przybylowski

So our next presentation this morning is Barrick Gold, and we have President and CEO, Mark Bristow presenting today. Mark was appointed President and Chief Executive Officer of Barrick, effective January 1, 2019, following completion of the merger with Randgold Resources. And previously, since its incorporation in 1995, Mark was the Chief Executive officer of Randgold following his pioneering exploration work in West Africa. Thank you very much, Mark, and we look forward to your presentation.

Mark Bristow

Thank you, Jackie, and good morning, ladies and gentlemen. I just wanted to – before I start, just reflect on the terribly sad news about Philip Pascall's passing this morning. An icon in our industry and a African pioneer, and I'd like to extend mine and all our condolences to Tristan and the family at this time.

So moving on. In 2019, we set out to build an exceptional gold and copper business with a focus on Tier One assets run by a standout team, delivering real value and growth in a sustainably profitable way. Today, I believe we can demonstrate success and more importantly, how our strategy will continue to deliver well into the future. Please take note of the cautionary statement, and you can also find that on our website.

As with everything we do, that is at Barrick, we set a clear roadmap to transform our business into the world's most valued gold and copper mining and exploration company. This included targeted M&A, rationalizing non-core assets, strengthening the balance sheet, and a considered capital allocation strategy. Since 2019, we have focused on delivering on those plans, and as I'll show you, we have made very good progress. Today, we are sustainably profitable and able to demonstrate a tangible growth profile.

We certainly have the strongest balance sheet in our industry and a majority of the best assets operated by best-in-class teams. Our pipeline offers Barrick shareholders real organic growth unlike many companies in the industry. We are increasing the size of our business by applying our expertise successful operating strategy, and the mindset of owners.

Today, we own and operate six of the top Tier One gold mines in the world, and we have the potential to add to these. As already touched on, our strategy for the new Barrick included a mandate to grow our copper business, which we recognized as a strategically important thing to do back in 2019. Once fully ramped up, Reko Diq and Lumwana will rank as two of the world's largest copper mines offering significant leverage to the copper price as shown on this slide.

I have always stressed that mining is a long game, requiring long-term vision and investment always for the benefit of all stakeholders. Key to this is the ability to recognize value, which is core to our business model and reflected here. In this graph, we have layered in the growth options embedded in our business. So not only do we have a sustainable 10-year base plan, we also have a growth plan that shows us increasing production by 30% by the end of this decade, which is unique in our industry.

The significant copper business we have developed gives us meaningful exposure to the potential of this commodity. If the forecasts around the expected shortages of copper are even partly correct, this will result in significant additional upside for our shareholders. You can see the leverage this copper portfolio gives us assuming different copper prices, and this is after the estimated CapEx required to build these long-life assets.

We continue to manage our assets through a strict set of investment filters as outlined on this slide. This is what guides us and keeps our strategic plans on track. To ensure that we remain focused and do not lose track of our long-term value creation goals as well as to accommodate our search for longer life of mine opportunities, we look to a different return for longer term investments with a potential life of more than 20 years, giving us exposure to multiple commodity price cycles. While Nev Mine exploration continues to feed Barrick's existing asset base, our greenfield's exploration teams are active across many of the world's most prospective gold and copper belts, hunting for our new next Tier One discoveries. And our long record of exceptional exploration success shows that where there's real value, we are good at finding it.

Reserve replacement is what really sets us apart from the competition as instead of the need to purchase our future at a premium, we are focused on building our own future and adding value, which is unmatched in this industry. The combination of reserve replacement I have shared with you and our growth projects is set to deliver this industry beating growth profile, which is further complemented by the significant leverage we have embedded in our copper business.

So ladies and gentlemen, before I pass back to Jackie to wrap up, this is a summary of what Barrick offers investors. I hope I have given you a better appreciation in the short time of the value that is inherent in Barrick today and why our future growth sets us apart. I believe that what we offer is peerless and the teams we have built are industry leaders capable of taking Barrick into the future and delivering real value to all our stakeholders sustainably.

Thank you, and I'll hand you back to Jackie.

Question-and-Answer Session

Q - Jackie Przybylowski

Well, thanks very much, Mark. We have some time for some questions. And I'll ask you a few and then maybe we can see if the audience has any as well. So you did host a webinar last week where you went into a lot of your growth opportunities in a lot more detail. And that includes Reko Diq, the Lumwana Super Pit, Fourmile, and a number of other assets. Is that upside that you've presented already embedded in the guidance that you've given us the tenure or the longer term guidance, or is that still to be added to the guidance in the future?

Mark Bristow

So the upside is not in the guidance. We've got the 10-year plan, which is our base case, and then – and I think Jackie, the presentation we made last Tuesday was really focused on looking at the delta that was not embedded in the consensus valuation of Barrick and to highlight the fact that what we've done at Barrick, which is not the case for many other companies, is we've added to our NAV in the last four and a half years while we've focused on fixing Barrick. And so we've – the markets needs to catch up, and our objective last Tuesday was to help point to those deltas because the gaps even when you look at consensus to our internal numbers, but there are specific assets that are not even included and that's Fourmile and Reko Diq and some of the other copper opportunities.

Jackie Przybylowski

Yes. Absolutely. I mean, I think you said in the webinar that some of the valuation gaps you're seeing are really material, I think on Fourmile you said it should be worth 5x what the consensus is giving you value for it.

Mark Bristow

Yes. That's correct.

Jackie Przybylowski

Do you think that consensus is just calculating it wrong? Do you think we're adding too big of a risk discount to those assets or what do you think the gap is?

Mark Bristow

Well, I think partly that, and partly the fact that us at Barrick have been so focused on fixing things and we've been very inward looking and we set out to do that. And again, no one can fault us for delivering on our promise that we made to the market in 2019, but it was hard work. We are now at that stage where there's a delivery ahead. We've got a clear runway of 10-plus years and in some cases 40, 50 to a 100 and it's a very different company.

And as you know, what I did in Randgold was do the same. And then if you collect the assets that are of value and sustainably valuable, then ultimately you make more than you need to invest in your own future and we are at that point.

Jackie Przybylowski

And you're at the point where you're looking to sort of reengage with the market and get that value back. And you sort of teased a little bit to that at the webinar that you're going to be increasing your presence in New York and maybe focusing more on that listing. Can you give us a little bit more detail about how that shareholder engagement process might change?

Mark Bristow

Yes. Sure. Thank you for that question. Randgold was very global in the way it reached out to investors. While we focused on fixing Barrick, we drifted more towards Canada, and I feel we neglected a lot of new potential investors within the USA. We all have a full listing in New York Stock Exchange, we've just appointed, and he is here, you must get to know him. Cleve Rueckert from UBS, he's joined us to lead our Investor Relations. And he will be stationed in New York and we want to leverage our New York presence.

We are by far the biggest gold miner in the U.S. and we are one of the biggest, in fact, the biggest mining enterprise in the United States. And so we are – there's a lot to sell to the market and to U.S. investors. And of course, we've got a full listing on the New York Stock Exchange. So we're excited about that. Of course, we're as excited of continuing to set ourselves in Canada. We've kept our presence in the UK and Europe. And so – but America I think has got some real potential to share our story with.

Jackie Przybylowski

I'm very much looking forward to working with Cleve going forward. And with shareholder engagement as the topic maybe it's a good time to see if there are any questions from anyone in the room. I have others if we need, but no. Okay, so I'd like to ask a little bit – oh, I'm sorry. The spotlights are super bright.

Unidentified Analyst

Yes. Mark, you're one of the only gold producers that I've seen really focused on the copper industry and sector. Is there a certain point you're worried about multiple erosion or do you think we're in a space where you're going to benefit from that copper exposure?

Mark Bristow

So we've seen multiple erosion in the gold space in the gold industry specifically because we don't invest in exploration, so we don't have optionality. And again, the copper industry has got a multiple in it. And I think – and we have a responsibility to invest in our future. And I've had this debate with some of my colleagues in the mining industry in Canada that you can only grow a gold mining company through M&A. And that's not true. The real value, and if you have to do M&A to grow, that means you're relying on the target to have done good exploration. So we'd like to be right there in the front line.

And as I've shown you, we've already built optionality in Barrick. It's got no debt, it's got real growth. We are invested across the world's leading gold and copper province – geological provinces. So there's absolutely no reason why we won't rebuild that premium. And we are doing it not only in gold, we are doing it in copper, but our foundational value is still very much gold, world class Tier One gold assets.

Jackie Przybylowski

Are there any others on the floor? I think I have a great segue into an exploration question for you since you mentioned it. You've been spending a lot more time in talking a lot more about Saudi Arabia and the Arabian-Nubian Shield. Can you talk a little bit about the opportunities you're seeing for Barrick under your joint venture exploration agreement?

Mark Bristow

Yes. So we've really grown our partnership with the kingdom of Saudi Arabia through our Ma'aden joint venture. We've recently secured two more big concessions, highly prospective right next door to Jabal Sayid. It's a very high grade, low cost copper project. And through that, we are the operators of that joint venture. We've built appreciation that we can bring something to Saudi Arabia and absolutely the new [Andes] when it comes to gold and copper is the [indiscernible] metal of wrist belt starting in the Eastern Europe and going all the way through South Asia. And as you know, we are already in it in Reko Diq.

And you need a different set of partners to work in that part of the world as you do – as we and everything I've ever done in my career is based on partnerships, whether it's host countries or real industry partners. And we recognize that this is a great new frontier and we need different partners. And Saudi is one of those, not the only one, but it's one of those for that region.

Jackie Przybylowski

We've heard a lot about copper from yourself from others here. I think last year I was joking that we should rename this as Denver Copper Conference, although I'll probably get things thrown at me if I say that. Is copper a key focus for Barrick? How much copper is too much? I think to the point about maybe valuation, do you ever see that or do you ever – is there a concern about that affecting your valuation?

Mark Bristow

I think the key here is we set out a strategy. We've grown our copper organically, lots of wannabe copper miners. It's not easy. What we did is unlock the value that was embedded in Barrick. So we are looking at 20% to 30% of our bottom line, depending on the price of gold or copper. They are world class assets. And our strategy is we've always been focused on world class or Tier One – proper Tier One, not – we sort of mess around with the definition of Tier One. But proper Tier One assets, and so from our point of view, that's the filter asset quality. We think as you grow, as you've seen in Reko Diq, it's a copper gold asset. We get gold with it. My thesis back in 2019 and talking, the merger was always about if you want to be relevant in this industry, you can buy lots of gold mines or you can just grow on quality and you'll then have to mine the porphyries and they come with gold and copper or copper and gold.

Jackie Przybylowski

And maybe on Reko Diq, can you remind everyone, what we might expect in terms of news flow or catalyst from that project in the next little while?

Mark Bristow

So feasibility study complete end of next year would be fully permitted. That's a message. It was interesting we had dinner the other day and somebody asked, Mark, if you were to position Reko Diq anywhere in the world, any jurisdiction, which jurisdiction will you choose? We had a big debate around the table. We couldn't find one that sort of just fell out because if you move it to the United States, that's 30 years to permit. So every jurist, it was a very good test that there's no safe jurisdiction in this world today. It's about how do you manage it and how can you build a partnership with your host country. And so permitting and the feasibility complete next year, first concentrate in 2028, that's a very quick delivery and Lumwana expansion, which will represent almost the same as our share of – 50% share of Reko Diq will precede it. So that's an expansion Reko Diq as a construction, exciting times.

Jackie Przybylowski

There's always a lot going on. It is very exciting. I think unfortunately, we're out of time, so please join me in thanking Mark for your presentation.

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