Barrick Mining Corporation · TSX:ABX
Barrick Mining — Barrick Gold — Bank of America Merrill Lynch 21st Annual Canada Mining Conference 2015
30 slides from Barrick Mining's conference presentation, Sep 10, 2015
Slide 1: Bank of America-Merrill Lynch 21st Annual Canada Mining Conference
Bank of America-Merrill Lynch 21st Annual Canada Mining Conference Toronto − September 10, 2015 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: Strategic Priorities Scorecard
Strategic Priorities Scorecard Focus on $3 billion Streamlined, free cash flow debt decentralized and capital reduction organization discipline target $2B cost 90% progress Empowering reduction to target our leaders in initiative the field 3
Slide 4: Core Assets and Regions
Core Assets and Regions High quality portfolio Golden Sunlight focused in the Americas NEVADA Hemlo Goldstrike Turquoise Ridge + 2nd Shaft Strong competitive Cortez + UG Expansion Goldrush advantages in core Bald Mountain Round Mountain regions – Nevada and Ruby Hill Pueblo Viejo the Andes Hig
Slide 5: Core Assets and Regions
Core Assets and Regions Pueblo Viejo Lagunas Norte Cortez Veladero Goldstrike 1. See final slide #1 and #2. 55
Slide 6: Goldstrike TCM Process Update
Goldstrike TCM Process Update Thiosulfate Plant AUTOCLAVES Gold Elution Resin‐in‐leach Circuit Reagent Recycle/ Water Treatment 6
Slide 7: 2015 Gold Outlook
2015 Gold Outlook All-in Sustaining Costs Production guidance ($/oz) reflects asset sales – 6.1-6.4 million ounces1 860- 8951 – 55% weighted to H2 864 840- 8801 AISC guidance lowered to $840-$880/oz1 – H2 costs anticipated to be about 10% lower than H1 – Q3 costs expected to be approximately 10%
Slide 8: 2015 Copper Outlook
2015 Copper Outlook 2015 copper production guidance: 480 – 520M pounds1 at C1 cash costs of $1.75 - $2.00/lb1,2 Zaldívar Lumwana Jabal Sayid Solid cash flow Zambian royalty Shipments of generator reduced to 9% copper concentrate Will become a under new tax regime anticipated in 50/50 joint
Slide 9: Reducing Capital Intensity
Reducing Capital Intensity Total Capex ($B) 2015 capex guidance lowered to $1.6–$1.9B 2.2 -7% 1.9- Reductions to: 2.2 -20% Sustaining capital 1.6- Expansion capital 1.9 Project capital 2014 2015E 2015E (actual) (original) (revised) 1.0 9
Slide 10: High Grade Reserve Base
High Grade Reserve Base Reserve Grade (g/t) 2.01 The average reserve grade BARRICK of Barrick’s core mines… 5 CORE MINES1 1.37 BARRICK TOTAL1 0.9 … is more than double PEER the senior peer2 average AVG. 1. See final slide #12. 2. Senior peers include Newmont, Goldcorp, Kinross and Newcrest. 10
Slide 11: Resilience in a Volatile Gold Market
Resilience in a Volatile Gold Market High quality, low cost portfolio generating free cash flow Management actions: Early scenario planning Executing on debt reduction target Greater capital discipline Hard focus on operating costs Reduced G&A and exploration expense 11
Slide 12: Early Scenario Planning
Early Scenario Planning Provides 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 13: Restoring a Strong Balance Sheet
Restoring a Strong Balance Sheet $3B debt reduction target ~$2.7B or 90% progress to target Repayment Pueblo Viejo Debt Repayment = $250M from cash Zaldívar Cowal sale1 = $550M in cash Porgera (50%) sale1 = $298M in cash Porgera Zaldívar (50%) sale1 = $1.0B in cash Cowal Pueblo Viejo stream1 = $610M
Slide 14: Strategic Partnership with Zijin
Strategic Partnership with Zijin Multi-faceted partnership Porgera Mine Papua New Guinea provides access to: Low-cost capital Leading Chinese engineering and construction skills Advanced technology World-class suppliers at competitive costs Barrick and Zijin will explore opportunities to col
Slide 15: New Partnership with Antofagasta
New Partnership with Antofagasta Agreement to sell 50% of Zaldívar Chile Zaldívar to Antofagasta Plc: $1.005B in cash Significant opportunities to realize synergies and partner on future projects Joint board with Antofagasta as operator Expected to close in late 2015 15
Slide 16: Portfolio Management
Portfolio Management Disciplined non-core asset sales - Value of other gold and copper assets can be leveraged to cover debt reduction target Core mines Other mines/assets1 Copper Cortez Porgera Zaldívar Goldstrike Bald Mountain Lumwana Lagunas Norte Golden Sunlight Jabal Sayid 4.0 2.3 Pueblo Viejo1
Slide 17: Liquidity Profile
Liquidity Profile Modest and improving short-term maturities; repaid $480 million to date in 2015 Part of Cowal and Porgera proceeds will be used to redeem $264M in 5.75% notes due 20161 Scheduled Debt Repayments to 20182,5 Cash Position 2.0 $2.1B4 1.5 ~$500M3 1.0 Drops to <$250M1 0.5 5.75% note
Slide 18: $2 Billion Cost Reduction (2015-2016)
$2 Billion Cost Reduction (2015-2016) $1.4 B total savings identified; $0.9 B booked 2015 - equal split: CapEx, OpEx, Corporate Costs 2016 - focused on sustainable OpEx & other reductions 2015 - $0.45 B 2016 - $0.95 B Capex Opex Unbooked Corporate1 1. Corporate costs include G&A, exploration,
Slide 19: $2 Billion Cost Reduction Initiatives
$2 Billion Cost Reduction Initiatives Operating Cost Opportunities Veladero - Pit Optimization Cortez - Increasing U/G Development Capex - Sustaining / Expansion Corporate Costs Deferring and re-scoping sustaining Increasing corporate G&A savings capital projects Reducing project capex to mini
Slide 20: Focused on Reducing OpEx
Focused on Reducing OpEx 2015E AISC 2015E Cash Costs $840-$880/oz $600-$640/oz1 20% 12% 69% Energy Sustaining Capex Total Cash Costs 16% 16% G&A 4% Maintenance Consumables Expl. & Eval. 4% + other 11% Development 28% 20% Capex Labor Other Productivity Energy/Consumables Working Capital Workforce p
Slide 21: Growth in the Americas
Growth in the Americas Turquoise Ridge (in feasibility) Cortez Hills (in prefeasibility) Lagunas Norte Goldrush (in prefeasibility) (in prefeasibility) 21 21
Slide 22: In Closing
In Closing High quality portfolio on track with guidance Early and continued actions mitigating impact of current market conditions Solid progress on debt reduction target 22
Slide 23: Appendix
Appendix BARRICK 23
Slide 24: Q2 2015 Financial and Operating Results
Q2 2015 Financial and Operating Results Q2 2015 Results were in line with expectations Gold Prod. (Moz) 1.45 AISC ($/oz)1 895 Adjusted earnings: $60M or Copper Prod. (Mlb) 115 $0.05 per share C1 Cash Costs1 ($/lb) 1.94 Net loss: $9M or $0.01 Capex ($B) 0.41 per share Net EPS ($) (0.01) EBITD
Slide 25: 2015 Financial Outlook
2015 Financial Outlook1 Application of 15% ROIC filter has identified reductions in several categories ($ millions) Current Original Minesite sustaining 1,400-1,600 1,600-1,800 Minesite expansion 100-150 150-200 Projects 100-150 150-200 Capex 1,600-1,900 1,900-2,200 Tax rate 53% 53% Finance costs
Slide 26: 2015 Assumptions and Sensitivities
2015 Assumptions and Sensitivities 2015 Impact Guidance Hypothetical on EBITDA FCF Assumption 1 Change AISC (millions) (millions) Gold revenue, net of royalties $1,100/oz +/‐ $100/oz n/a $330 $218 Copper revenue, net of royalties $2.50/lb +/‐ $0.50/lb n/a $133 $88 Gold all‐in sustaining costs Gold r
Slide 27: Value Realization - Lagunas Norte
Value Realization − Lagunas Norte Extend mine life by ~12 years & add ~2 Moz of M&I resources1 Pre-feasibility initiated on refractory ore project 1. See final slide #8 and #9. 27
Slide 28: Value Realization - Pueblo Viejo
Value Realization − Pueblo Viejo Extend mine life by expanding tailings capacity ─ potential to convert a significant portion of resources to reserves1 Preliminary economic assessment completed Convert power plant from HFO to natural gas + convert lime kilns to natural gas PFS completed on the poten
Slide 29: What is TCM Leach?
What is TCM Leach? TCM = Total Carbonaceous Material TCM Leaching is the process of leaching and recovering gold in the presence of TCM Traditional Leaching Process – Cyanide (NaCN) is the leaching chemical, – Coconut shell carbon adsorber TCM Leaching Process – no cyanide required – Calcium T
Slide 30: Footnotes
Footnotes 1. All-in sustaining costs per ounce (“AISC”), cash costs per ounce, C1 cash costs per pound, adjusted net earnings per share (“EPS”), EBITDA, adjusted EBITDA and free cash flow (“FCF”) are non-GAAP financial performance measures with no standardized definition under IFRS. See pages 50-56
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