Barrick Mining Corporation · TSX:ABX
Barrick Mining — Barrick Gold — Q1 2016 Earnings Presentation
31 slides from Barrick Mining's earnings presentation, Apr 26, 2016
Slide 1: Solid Start to a Year of Delivery
2016 First Quarter Results Solid Start to a Year of Delivery April 26, 2016
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: Today's Speakers
Today’s Speakers Kelvin Dushnisky Shaun Usmar Richard Williams Matt Gili Jim Whittaker President Senior Executive Vice President Chief Operating Officer Executive General Manager General Manager & Chief Financial Officer Cortez District, Nevada Lagunas Norte, Peru
Slide 4: Strategic Goals
Strategic Goals Distinctive Partnership Build partnerships of depth and trust Culture Industry Relentless cost management supported $ Leading Margins by innovative technology Superior Focus on quality to identify opportunities Portfolio Management to grow free cash flow per share
Slide 5: 2016 Priorities
2016 Priorities $ Capital Allocate capital using long term gold price Discipline of $1,200 per ounce Free Generate free cash flow at a gold price of $ Cash Flow $1,000 per ounce Balance Reduce total debt by a further $2 billion Sheet Operational Implement Best-in-Class program across Excellence all
Slide 6: First Quarter 2016 Highlights
First Quarter 2016 Highlights Reduced capex guidance through ongoing capital discipline $ Project evaluations define scope for disciplined growth $ $181 M in free cash flow1 and adjusted net earnings $127 M1 generated in Q1 Repaid $842 M or 42% of $2 B debt reduction target Credit ratings
Slide 7: Priority: Disciplined Capital Allocation
Priority: Disciplined Capital Allocation Growth Group established Best-in-Class provides competitive advantage in developing growth opportunities Optimize development Add new resources Assess external of existing reserves through exploration opportunities and resources Active global Seed fin
Slide 8: Priority: Cash Flow Breakeven at $1,000 per Ounce
Priority: Cash Flow Breakeven at $1,000 per Ounce Free Cash Flow ($M) AISC ($/oz) 4712 915 181 864 $1,407 831 14.2% 2013 2014 2015 Q1 2016 760-8103 -136 full year 706 $1,265 in Q1 $1,181 500 $1,157 2013 2014 2015 2016 -1,142 Realized Au price per oz 1 1. See final slide #1 2. See final slide #2 3. S
Slide 9: Priority: Cash Flow Breakeven at $1,000 per Ounce
Priority: Cash Flow Breakeven at $1,000 per Ounce Cash flow breakeven Free Cash Flow Working Other3 Capital 1 continues to be below ($M) Sales 61 9 Volume $1,050/oz4 Income Taxes 80 Paid Prudent capital Cash Costs 94 101 181 Divested expenditure eliminated Sites2 79 122 negative free cash flow A
Slide 10: Priority: Reduce Total Debt by further $2 billion
Priority: Reduce Total Debt by further $2 billion Completed $750 M debt tender Total Debt ($ B) offer, total debt reduction of 13.08 Repaid $842 M in Q1 0.0 2016 Achieved 42% of $2 B debt 9.97 0.84 target for 2016 9.16 9.13 Target Medium Combination of cash sources 8.00 term applied to repayme
Slide 11: Priority: Reduce Total Debt by Further $2 billion
Priority: Reduce Total Debt by Further $2 billion Financial flexibility and resilience achieved with improved near-term liquidity US$ millions – <$200 M due by 2018; ~$5B beyond 2032 5,000 Investment grade maintained: – S&P: BBB- 4,000 – Moodys: Baa3 3,000 Average coupon on public debt maintai
Slide 12: Priority: Implement Best-in-Class Across Operations
Priority: Implement Best‐in‐Class Across Operations Best-in-class principles underpin our new operating philosophy Improved Performance Decentralized Culture of Partnership Transparency Execution and Collaboration Granular operating and Permanent site One team financial data reviewed technic
Slide 13: Priority: Implement Best in Class Across Operations
Priority: Implement Best in Class Across Operations Management systems and protocols for roll-out established First wave of cost savings opportunities identified at each site Supply Chain Optimized Proactive Maintenance Enhanced Management Labour Efficiency Regional sourcing across multiple si
Slide 14: Cortez – Delivering on Best-in-Class
Cortez – Delivering on Best‐in‐Class Strong quarter sets up for good year – 247 koz at AISC of $469/oz – flat quarterly production profile Improved productivity increased contribution from underground Cost reductions as Best-in-Class delivers 2016 AISC guidance improved to $580-$640/oz1 Cort
Slide 15: Cortez – First to Deliver on Best-in-Class
Cortez – First to Deliver on Best‐in‐Class Focus in Q1 on reducing open pit mining costs per tonne through productivity and efficiency improvements Open Pit Underground Milling and Processing Reducing preventative Increasing productive Adjusting operating and maintenance on truck face time b
Slide 16: Cortez – Increased Confidence in Deep South
Cortez – Increased Confidence in Deep South1 4.8 Mt at 11.1 g/t Au for 1.7 Moz2 in reserves at Deep South $153 M estimated initial capital, largely for equipment and underground development Expected average production rate 300 koz/year over 2023-2027 at AISC $580/oz Longhole stoping planned
Slide 17: Lagunas Norte – Delivering Margins
Lagunas Norte – Delivering Margins Solid quarter of low cost Selective Mining production and free cash flow delivery – 100 koz at AISC $551/oz Quarterly consumables costs reduced Recovery levels increased with improved efficiency in final recovery circuit Better equipment availability and lo
Slide 18: Lagunas Norte – Longer Mine Life Anticipated
Lagunas Norte – Longer Mine Life Anticipated1 22.2 Mt at 3.0 g/t Au for 2.1M oz in reserves for refractory project2 Estimated initial capital of $640 M, mostly in 2018-2020 Mining and stockpiling of sulfides from 2016-2021 planned concurrent with permitting and construction of plant Processi
Slide 19: Goldstrike – Producing in Line
Goldstrike – Producing in Line New leadership with track record for cost management Production tracking to guidance – 249 koz at AISC $709/oz – Q1 lower grade in line with mine sequence Autoclave and processing facility availability limited Cash costs impacted by lower ounces; sustaining cap
Slide 20: Pueblo Viejo – Lower Costs and Stable Production
Pueblo Viejo – Lower Costs and Stable Production Oxygen plant issues successfully Process Plant resolved in January to deliver solid quarter 172 koz1 at AISC $496/oz Operating costs declining – optimized consumables usage – lower contractor and maintenance costs Full year AISC guidance impro
Slide 21: Veladero – Improved Operating Outlook
Veladero – Improved Operating Outlook 132koz at AISC $675/oz Open Pit Shorter haul cycles and improved fleet availability increased tonnage mined Inventory buildup over quarter, expected to decline in Q2 Progressing key cost initiatives on contractors and maintenance Macro environment favo
Slide 22: Turquoise Ridge – Delivering at Higher Volumes
Turquoise Ridge – Delivering at Higher Volumes Consistent tonnage delivered Rock Bolter production and costs in line with forecast – 50 koz1 at AISC $728/oz Understanding and definition of ore body continues to improve Best-in-Class driving down expenses – Operator training further improving c
Slide 23: Copper – Cost Management Improving Returns
Copper – Cost Management Improving Returns Solid production of 111 Mlb at AISC of $1.97/lb1 – Zaldívar sale completed Q4 2015, Q1 reflects 50% of production Lumwana production improving with increased productivity from processing plant Cost controls at Lumwana driving down C1 costs Post quar
Slide 24: Updated Guidance Demonstrates Progress
Updated Guidance Demonstrates Progress Unit AISC1 Unit Cash Costs1 Mine Site Updated Original Updated Original Cortez - $/oz 580-640 640-710 430-470 480-530 Pueblo Viejo - $/oz 550-590 570-620 420-450 440-480 Veladero - $/oz 790-860 830-900 520-570 550-600 Core mines - $/oz 660-730 690-740 470-520 4
Slide 25: Alturas – Increasing in Prospectivity
Alturas – Increasing in Prospectivity Initial inferred resource of Grade x Thickness (gpt-m Au) 5.5 M oz1 declared end 2015 <25 25 – 50 50 – 100 Drilling continued into Q1 2016 2 > 100 Favorable Alteration Shallow high grade intercepts defining starter project could deliver early cash flow H
Slide 26: Alturas – Increasing in Prospectivity
Alturas – Increasing in Prospectivity Cross section 6678900N1 51m @ 1.57 g/t 46m @ 10.97 g/t Andesitic cap 134.5m @ 1.69 g/t Chile Argentina Breccia Dacite host rocks 83m @ 2.63 g/t ALT‐047 DCA‐005 DCA‐008 Alteration limit 78m @ 1.35 g/t Oxidation limit > 0.25 g/t Au ALT‐053 ALT‐049 ALT‐042 > 1.0 g/
Slide 27: 2016 Solid Start to Year of Delivery
2016 Solid Start to Year of Delivery Production on track to meet guidance Operating and capital expenditure savings identified to reduce cost and capex guidance Strengthened balance sheet and investment grade credit ratings support longer term plans Board expanded with appointment of two new
Slide 28: Our Investment Proposition
Our Investment Proposition The Best Assets Managed to Deliver the Best Returns
Slide 29: Appendices
we BARRICK Appendices
Slide 30: APPENDIX A – Alturas Significant Intercepts
APPENDIX A – Alturas Significant Intercepts (1) ALTURAS - Significant Drill Hole Intercepts (ALT-047 to ALT-060 ; DCA-001 to DCA-008(2)) Core Drill Hole Azimuth Dip Interval (from m) Interval (to m) Width (m) Au (g/t) 347 395 47.4 (3) 1.00 ALT-047 90 -85 407 422.9 15.9 1.63 466 490 24 1.31 ALT-048 8
Slide 31: Endnotes
Endnotes 1. All-in sustaining costs per ounce (“AISC”), cash costs per ounce, C1 cash costs per pound, all-in sustaining costs per pound (“AISC”), adjusted net earnings, realized gold price per ounce and free cash flow (“FCF”) are non-GAAP financial performance measures with no standardized definiti