Barrick Mining Corporation · TSX:ABX
Barrick Mining — Barrick Gold — BMO Capital Markets Sales Desk Presentation (August 2015)
30 slides from Barrick Mining's conference presentation, Aug 27, 2015
Slide 1: BMO Capital Markets Sales Desk Presentation
BMO Capital Markets Sales Desk Presentation August 27, 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: Barrick: Best Assets and Regions
Barrick: Best Assets and Regions High quality portfolio with excellent upside potential Strong competitive advantages in core regions – Nevada and the Andes Pipeline of projects with potential to grow free cash flow1 per share 1. See final slide #1. 3
Slide 4: Best Assets and Regions
Best Assets and Regions Pueblo Viejo Lagunas Norte Cortez Veladero Goldstrike 1. See final slide #1 and #2. 44
Slide 5: High Grade Reserve Base
High Grade Reserve Base Grams per tonne1 2.01 The average reserve grade of Barrick’s core mines BARRICK is more than double the peer average 5 CORE MINES 1.37 BARRICK TOTAL 1.04 0.95 0.9 g/t PEER AVERAGE 0.72 0.66 NEWMONT GOLDCORP KINROSS NEWCREST 1. See final slide #12. 5
Slide 6: 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 7: 2015 Copper Outlook
2015 Copper Outlook 2015 copper production guidance: 480 – 520M pounds1 at C1 cash costs of $1.75 - $2.00/lb1 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 v
Slide 8: 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 Greater capital discipline Reduced G&A Hard focus on operating costs Executing on debt reduction target 8
Slide 9: 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 $900/oz and exploration exploration, Reducing G&A/headcount Partial / full mine contractor costs and capital suspensions on non-
Slide 10: Reducing Capital Intensity
Reducing Capital Intensity Total Capex ($B) 2015 capex guidance lowered to $1.6–$1.9B 2.2 -7% 1.9- Q2 reductions to : 2.2 -20% Sustaining capital 1.6- Expansion capital 1.9 Project capital 2014 2015E 2015E (actual) (original) (revised) 1.0 10
Slide 11: Focused on Reducing OpEx
Focused on Reducing OpEx 2015E AISC 2015E Cash Costs $840-$880/oz $600-$640/oz1 Targeting $2B in 20% reduced 12% 69% Energy Sustaining Capex Total Cash Costs expenditures by the 16% 16% G&A 4% Maintenance Consumables end of 2016 E&E + 4% Sourced from other 11% 28% 20% CapEx, OpEx and Development
Slide 12: 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 sale = $550M in cash Porgera (50%) sale1 = $298M in cash Porgera Zaldívar (50%) sale1 = $1.0B in cash Cowal Pueblo Viejo stream1 = $610M
Slide 13: 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 14: 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 14
Slide 15: Pueblo Viejo gold-silver stream
Pueblo Viejo gold-silver stream Innovative agreement with Pueblo Viejo Dominican Republic Royal Gold: $610M upfront cash payment Ongoing cash payments tied to spot prices provides exposure to higher metal prices Provides risk sharing ─ stream is unsecured and not subject to a Barrick guarantee
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 mines1 Copper Cortez Cowal (sold) Zaldívar Porgera (sold 50% (sold 50%) Goldstrike of Barrick (Niugini) Ltd) Lumwana Lagunas Norte Bald Mount
Slide 17: Liquidity Profile
Liquidity Profile Modest and improving short-term maturities; repaid $250 million to date in 2015 Part of $550 million cash proceeds from Cowal sale will be used to redeem $229 million in 2.9% notes due 2016 Scheduled Debt Repayments to 20182 Cash Position2 2.0 $2.1B(1) 1.5 <$0.8B3 1.0 Drops to
Slide 18: Maximizing Free Cash Flow
Maximizing Free Cash Flow Execution Underway Actions Taken $50M savings in 2015 and annualized savings of $90M in 2016 from G&A decentralized model1 Capex $300M of capex reductions identified in 2015, reviewing 2016 plans Improve productivity and reduce external spend ─ (e.g. $60M savings in Opex ex
Slide 19: Growth in the Americas
Growth in the Americas Turquoise Ridge (in feasibility) Cortez Hills (in prefeasibility) Lagunas Norte Goldrush (in prefeasibility) (in prefeasibility) 19 19
Slide 20: Exploration ─ Focused on Core Regions
Exploration ─ Focused on Core Regions Reduced guidance of $180-$220 million1 is aligned with capital allocation framework ~85% is allocated to the Americas 65% brownfield / 35% greenfield – maintaining commitment to minesite exploration – advancing strategic targets (Goldrush, Alturas) North A
Slide 21: In Closing
In Closing High quality portfolio on track with guidance Early and continued actions mitigating impact of current market conditions Solid progress on debt reduction target 21
Slide 22: Appendix
Appendix BARRICK 22
Slide 23: Q2 2015 Financial and Operating Results
Q2 2015 Financial and Operating Results Q2 2015 Results were in line with expectations Gold Prod. (Moz) 1.45 AISC ($/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 ($) (0.01) EBITD
Slide 24: 2015 Financial Outlook
2015 Financial Outlook1 Application of 15% ROIC filter has identified reductions in several categories ($ 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 25: 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 26: 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. 26
Slide 27: 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 28: Innovation: Goldstrike TCM Process
Innovation: Goldstrike TCM Process 28
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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