Barrick Mining Corporation · TSX:ABX
Barrick Mining — Barrick Gold — Non-Deal Roadshow (November 2015)
30 slides from Barrick Mining's roadshow presentation, Nov 24, 2015
Slide 1: Barrick Gold Corporation: Growing Free Cash Flow
Barrick Gold Corporation Growing Free Cash Flow November 24, 2015 – New York Marketing − Goldman Sachs 1
Slide 2: Cautionary Statement on Forward-Looking Information
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION Certain information contained or incorporated by reference in this presentation, including any information as to our strategy, projects, plans or future financial or operating performance, constitutes “forward-looking statements”. All statements, o
Slide 3: Creating Shareholder Value Through the Cycle
Creating Shareholder Value Through the Cycle Growing Free Cash Flow per Share Capital Financial Technical Talent Partnership Low Cost Discipline Prudence Excellence Focus Culture Production 3
Slide 4: Strong Track Record of Execution
Strong Track Record of Execution Cash Flow Two consecutive quarters of positive free cash flow $ Improvement New $2 B target with 90% booked 2015 gold AISC guidance reduced to $830-$870/oz1 Cost from original guidance of $860-$895/oz $ Reduction 2015 copper C1 cost guidance reduced to $1.60-$1.85/lb
Slide 5: US Non-Core Asset Sales
US Non‐Core Asset Sales Focus on core assets Donlin Gold Strengthen balance sheet Golden Sunlight Hemlo Realize value for NEVADA Goldstrike shareholders Turquoise Ridge Cortez/Goldrush Pueblo $720 million in cash Bald Mountain Viejo Round Mountain – competitive Spring Valley environment for
Slide 6: Sales to Kinross and Sales to Waterton
Sales to Kinross $610 million in cash Round Mountain Bald Mountain – 50% of Round Mtn – 100% of Bald Mtn – Exploration JV − 40% of Bald Mtn land package Closing expected mid-January 2016 Spring Valley Ruby Hill Sales to Waterton $110 million in cash – 70% of Spring Valley – 100% of Ruby Hill
Slide 7: Third Quarter Highlights
Third Quarter Highlights Q3 2015 Q3 2014 Adjusted net earnings1 ($ M) $131 $222 Net income (loss) ($ M) ($264) $125 Adjusted EBITDA1 ($ M) $942 $1,059 Operating cash flow2 ($ M) $1,255 $852 Free cash flow1,2 ($ M) $866 $199 Realized gold price ($/oz) 1,125 1,285 Capital expenditures3 ($ M) $384 $604
Slide 8: 2015 Debt Reduction Progress
2015 Debt Reduction Progress Total debt $13.1 B $493 M $1.9 B 2016 $531 M $3.0 B Notes Other Repayments $834 M $11.2 B1 Debt Tender $1.0 B $100 M $10.1 B Zaldívar Free 2 Proceeds Cash Flow 5.0 Jan Today Target Expect to meet $3 B debt reduction target with Zaldívar proceeds and free cash flow 1. A
Slide 9: Improving Liquidity
Improving Liquidity Total debt has been reduced by 15% to date in 2015 on completion of the tender offer Less than $250 M due before 2018; approximately $5 B of total debt matures after 2032 Credit positive asset sales and cash flow improvements are driving improvements in total debt-to-EBITDA
Slide 10: $2 B Cash Flow Improvement Target
$2 B Cash Flow Improvement Target − $1.8 B or 90% booked 2015 + 2016 = $1.8 B booked Capex 0.4 Capex 2015 $0.4 B 0.2 Corporate1 2016 $1.4 B 0.5 Corporate. 0.11 0.1 Working Opex Capital2 0.2 0.3 1. Corporate costs include G&A, exploration, evaluation & project development expenses, project capital an
Slide 11: Early Scenario Planning
Early Scenario Planning Providing flexibility at lower gold prices Levers at $1,100/oz Reduced capital + Levers at $1,000/oz Reduced G&A Further cuts to + Levers at $900/oz and exploration exploration, Reducing G&A/headcount Partial / full mine contractor costs and capital suspensions on non
Slide 12: Improving Free Cash Flow & AISC
Improving Free Cash Flow & AISC Free Cash Flow ($ M) AISC ($/oz) $866 $1,669 Gold Price 610 Pueblo Viejo $1,014 stream proceeds 16% 256 $26 $915 $860- 895 Initial -$136 $864 -$198 $830- 870 Current Gold Price $1,125 -$1,073 -$1,142 Q1 Q2 Q3 $700 2012 2013 2014 2015 2012 2013 2014 2015E 12
Slide 13: 2015 Guidance – Lower Costs
2015 Guidance – Lower Costs 1 GOLD Production: 6.0-6.15 Moz AISC: $830-$870/oz Cash costs: $600-$625/oz Production adjusted to reflect Pueblo Viejo event; costs unchanged COPPER Production: 480-520 Mlbs C1 costs: $1.60-1.85/lb reflects improved costs at Lumwana 1. See final slide #8. 13
Slide 14: 2015 Financial Outlook
2015 Financial Outlook 1 ($ millions) Current /Revised Original Minesite sustaining 1,400-1,500 1,600-1,800 Minesite expansion 100-150 150-200 Projects 100-150 150-200 Capex ~1,700 1,900-2,200 Tax rate 53% 53% Finance costs 800-825 800-825 2 Exploration & Evaluation 180-220 220-260 Project expenses
Slide 15: Decentralized Model Driving Free Cash Flow
Decentralized Model Driving Free Cash Flow Old Hierarchical Model New Decentralized Model COO Mining/ Finance Technical Regional Shared Business Consciousness Units License General Managers to Operate Stove-piped information flow Networked information flow Limited cross-functional integration
Slide 16: Americas-Focused Portfolio
Americas‐Focused Portfolio Donlin Gold Golden NEVADA Sunlight Hemlo 60-65% Goldstrike Turquoise Ridge of 2015 production Cortez from 5 core mines Goldrush Pueblo at AISC of Viejo Bald Mountain (sold) $700-$725 Round Mountain (sold) per ounce Ruby Hill (sold) Lagunas Norte ANDES Zaldívar Pascua-Lama
Slide 17: Goldstrike
Goldstrike TCM Plant Improved 2015 guidance: 1.0-1.1 M oz at AISC of $650-$700/oz Innovative TCM circuit achieved commercial production in third quarter at a capital cost of $610 M Ramp-up expected to be completed in H1 2016 Underground exploration potential at depth 17
Slide 18: Cortez
Cortez Open Pit Improved 2015 guidance: 900,000-950,000 oz at AISC of $675-$725/oz Value Realization review has improved underground productivity 20 millionth ounce milestone Pre-feasibility study on Deep South on track for year-end Large land position provides strong exploration potential
Slide 19: Pueblo Viejo
Pueblo Viejo Autoclave Processing 2015 production and costs under review following oxygen plant mechanical issue Silver recoveries improving; 2 new lime boil tanks being added Potential to convert a significant portion of ~6 M oz of resources to reserves by removing tailings constraints1 1. Se
Slide 20: Pueblo Viejo Operations Update
Pueblo Viejo Operations Update Two of three motors in the oxygen plant have been damaged and require GE factory repair Autoclaves currently operating at 35%-40% capacity Repair of damaged motors is now underway – estimated return to full process capacity mid-January 2016 – bringing forward sch
Slide 21: Lagunas Norte
Lagunas Norte Crushing and Grinding 2015 guidance: 550,000-590,000 oz at AISC of $550-$600/oz 2 M oz sulfide project has the potential to extend the mine life by 12 years by adding new production1 Prefeasibility on track to be completed by year-end 1. See final slide #4 and #6. 21
Slide 22: Veladero
Veladero Open Pit Improved 2015 guidance: 575,000-625,000 oz at AISC of $950-$1,000/oz Optimized pit design expected to more than double annual cash flow over the next four years Water monitoring confirms no risk to the environment from discharge event 22
Slide 23: Strong Organic Growth Options
Strong Organic Growth Options SCOPING + PRE- FEASIBILITY/ DEVELOPMENT EARLY STAGE1 FEASIBILITY PERMITTING Alturas Cortez Turquoise Jabal Sayid Deep South Ridge Del Carmen South Arturo Four Mile Goldrush Donlin Gold Cortez Lower Hemlo Lagunas Cerro Casale Zone Norte Sulfides Pascua-Lama Deep optional
Slide 24: Resource Conversion Potential
Resource Conversion Potential Maintained a 10-20 year mine life for more than 20 years Next 5 years: Average Mine Life Cortez Deep South 20 Lagunas Norte Sulfides 18 Average 16 Pueblo Viejo 16 Goldstrike 14 Porgera 12 Years Turquoise Ridge 10 Hemlo 8 6 2020 and beyond: 4 Goldrush 2
Slide 25: Pascua-Lama Update
Pascua‐Lama Update Temporary suspension plan approved in Chile Transition to care and maintenance should allow for significantly reduced holding costs in 2016 2016 focus will be on project optimization Must meet our 15% ROIC hurdle rate 25
Slide 26: Why Barrick? Growing Free Cash Flow per Share
Why Barrick? Growing Free Cash Flow per Share Capital Financial Technical Talent Partnership Low Cost Discipline Prudence Excellence Focus Culture Production 26
Slide 27: Appendix
Appendix 2015 Operating Guidance 2015 Assumptions and Sensitivities 27
Slide 28: 2015 Operating Guidance
2015 Operating Guidance Current Previous Gold Production AISC Production AISC (000's of ounces) ($ per ounce) (000's of ounces) ($ per ounce) Cortez 900-950 675-725 825-900 760-835 Goldstrike 1,000-1,100 650-700 1,000-1,150 700-800 Pueblo Viejo (60%) * * 625-675 540-590 Lagunas Norte 550-590 550-600
Slide 29: 2015 Assumptions and Sensitivities
2015 Assumptions and Sensitivities 2015 Impact Guidance Hypothetical on AISC1 EBITDA1 FCF1 Assumption Change ($/oz) ($M) ($M) Gold revenue, net of royalties $1,125/oz +/-$100/oz n/a 168 79 Copper revenue, net of royalties $2.35/lb +/-$0.50/lb n/a 66 31 Gold all-in sustaining costs Royalties and prod
Slide 30: Footnotes
Footnotes 1. All-in sustaining costs per ounce (“AISC”), cash costs per ounce, C1 cash costs per pound, adjusted net earnings, EBITDA, adjusted EBITDA and free cash flow (“FCF”) are non-GAAP financial performance measures with no standardized definition under IFRS. See pages 52- 58 of Barrick’s Thir