Barrick Mining Corporation · TSX:ABX
Barrick Mining — Barrick Gold — Q2 2015 Earnings Presentation
28 slides from Barrick Mining's earnings presentation, Aug 6, 2015
Slide 1: Second Quarter 2015 Results
Second Quarter 2015 Results Conference Call / Webcast | August 6, 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: Second Quarter 2015 Results
Second Quarter 2015 Results Kelvin Dushnisky Jim Gowans Shaun Usmar Co-President Co-President Senior Executive Vice President and CFO 3
Slide 4: 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 4
Slide 5: 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 6: Q2 2015 and YTD Highlights
Q2 2015 and YTD Highlights Strong progress on $3B debt reduction target through transactions valued at $2.45B and repayment of $250M from cash on hand 2015 AISC guidance lowered to $840-$880/oz with continued emphasis on optimizing capital/operating costs Completed scoping studies to extend mine lif
Slide 7: 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 8: 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 9: 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 9
Slide 10: Pueblo Viejo gold-silver stream
Pueblo Viejo gold-silver stream Innovative agreement Pueblo Viejo Dominican Republic with 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 11: 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 12: 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 Position 2.0 $2.1B(1) 1.5 <$0.8B3 1.0 Drops to <
Slide 13: 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. $60M savings in Opex ex
Slide 14: Reducing Capital Intensity
Reducing Capital Intensity Total Capex ($B) 2015 capex guidance lowered to $1.6–$1.9B 2.2 -7% 1.9- Q2 reductions to : 2.2 -20% Sustaining capital 1.6- Expansion capital 1.9 Project capital 2014 2015E 2015E (actual) (original) (revised) 1.0 14
Slide 15: 2015 Gold Outlook
2015 Gold Outlook All-in Sustaining Costs Production guidance ($/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 16: 2015 Copper Outlook
2015 Copper Outlook 2015 copper production guidance: 480 – 520M pounds1 at C1 cash costs of $1.75 - $2.00/lb1 Zaldívar Lumwana Jabal Sayid Solid cash flow Zambian royalty Shipments of copper generator reduced to 9% under concentrate Will become a 50/50 new tax regime anticipated in early j
Slide 17: 2015 Financial Outlook
2015 Financial Outlook1 Application of 15% ROIC filter has identified reductions in several categories ($ 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 18: Best Assets and Regions
Best Assets and Regions Pueblo Viejo Lagunas Norte Cortez Veladero Goldstrike 18
Slide 19: Focused on Reducing Opex
Focused on Reducing Opex 2015E AISC 2015E Cash Costs $840-$880/oz $600-$640/oz 20% Multi-pronged 12% 69% Sustaining Capex Total Cash Costs Energy approach is 16% 16% G&A 4% Maintenance Consumables targeting all E&E + 4% options to other 11% 28% 20% Development Capex Labor Other reduce cash costs P
Slide 20: 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 and Partial / full mine contractor costs capital suspensions on non-
Slide 21: Lagunas Norte – Value Realization
Lagunas Norte – Value Realization 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. 21
Slide 22: Pueblo Viejo – Value Realization
Pueblo Viejo – Value Realization 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 pot
Slide 23: Growth in the Americas
Growth in the Americas Turquoise Ridge (in feasibility) Cortez Hills (in prefeasibility) Lagunas Norte Goldrush (in prefeasibility) (in prefeasibility) 23
Slide 24: 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 25: 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 25
Slide 26: Appendix
Appendix BARRICK 26
Slide 27: 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 28: 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