"Our successful exploration programs are feeding high-quality prospects into an already bulging pipeline and we expect to grow our reserves net of depletion again this year."
How would you assess Barrick’s performance in 2022?
We are continuing to build our balance sheet, our dividend policy is delivering sustainable returns and we have shored up our life-of-mine plans to ensure that our 10-year production profile remains intact. Our successful exploration programs are feeding high-quality prospects into an already bulging pipeline and we expect to grow our reserves net of depletion again this year.
Nevada Gold Mines is Barrick’s value foundation. As far as the original objectives of the joint venture are concerned, I can safely say: Mission Accomplished! We have created a whole that is truly greater than the sum of its parts. From this sound base, NGM can now exploit the wealth of opportunities in its ambit, and we have recruited a future-facing management team – including a new North American regional chief operating officer and a new NGM executive managing director – to lead the company into its new growth phase.
What are the primary drivers of Barrick’s future growth, and what balance are you hoping to achieve between copper and gold?
Barrick’s core strategy is one of long-term value creation. We continue to maintain a strong balance sheet and to develop our wealth of organic growth projects. Sustainability is the cornerstone of our business, as it has been for the past 20 years. We have adopted a holistic and integrated approach to this critical issue and are not only prioritizing the environment portion of ESG metrics. This is more attuned to the ethical and developmental needs of many of our host countries and is already delivering results.
Key gold projects that will help drive Barrick’s future growth include Goldrush underground at Cortez in Nevada and the Pueblo Viejo expansion in the Dominican Republic. Both projects are expected to secure the Tier One status of these assets for decades to come. On the copper side, key growth projects include Reko Diq in Pakistan and the Lumwana superpit in Zambia.
Barrick was the first gold company to clearly articulate a strategy to grow in copper, which we see as a strategic commodity of the future that is critical to decarbonize our world. We see our copper portfolio as a source of differentiation to our gold industry peers, providing shareholders with meaningful exposure to a key commodity of the future. In terms of balance, we do not set specific targets but instead look at all opportunities against our stated investment filters.
Can you outline Barrick’s growth strategy in Canada and Ontario specifically? What steps is Barrick taking to explore in the Uchi Belt?
I’ve said before that Barrick is under-invested in Canada and we mean to correct that. The perception that Canada is a mature gold producer is being challenged by new discoveries of deposits with different model styles hosted in unconventional rocks. We have established a high-powered exploration team, with specializations ranging from geophysics through geochemistry to structural geology, dedicated to discovering new potential Tier One and Tier Two opportunities in prospective Canadian belts and to ensure that each opportunity is viewed holistically. In the short time the team has been in place, we’ve already consolidated an exploration property portfolio of 124,000 hectares in the underexplored Uchi Belt of northern Ontario and we’re now building on that. The Uchi Belt is host to the world-class Red Lake deposit which, in addition to recent new discoveries in unconventional host rocks, has supported our views that this district remains highly prospective.
Does Hemlo still fit into Barrick’s future growth strategy?
Operations at Hemlo are being modernized and refocused to secure the gold mine’s continued viability. Several programs have been introduced to improve its performance and the mine has moved to an underground contract mining model. The objective is to upgrade Hemlo to a Tier Two asset and extend its Life of Mine well into the future.
Barrick is a Canadian company, and we are building a foundation of greenfield projects driven by an energetic team of local experts and skilled explorers. We have significant deferred tax assets in Canada, making new discoveries and/or assets even more attractive from a free cash flow and net asset value perspective.
Can you touch upon the socio-economic benefits that the Nevada Gold Mines joint venture brings to the state of NV?
NGM is a key partner to the state of Nevada with its workforce of 7,000 making it one of the state’s largest employers. In 2021, it’s total economic contribution to the state, which includes taxes, royalties, salaries and procurement spend, amounted to over US$2.6 billion, with US$8.9 million spent on social investments alone.
NGM continues to invest in people, both current and future employees, through education partnerships and training programs. It supports the College of Southern Nevada and the Clark County School District where high school students can obtain certificates in industrial maintenance or diesel technology, and has renewed its partnership with Discovery Education for the Nevada Department of Education’s outreach program. The company is also working with the University of Nevada and the Great Basin College in Elko to develop mining-centered programs.
What is your outlook for gold production in Nevada?
Based on our five-year attributable profile with costs normalized for current gold prices, increased production will come primarily from the Goldrush ramp up. Escalating volume is also a product of increased Crossroads production out of Cortez. Permitting impacts at Goldrush, Long Canyon, and updated assumptions for Robertson based on our experiences with Goldrush, together with resequencing to optimize the Life of Mines (LOMs), have lowered our near-term production profile versus the prior outlook. However, the impact over the next five years was nearly offset by additions such as Pipeline phases 11 and 12 at Cortez and ounces were increased beyond the 5- and 10-year windows. This updated 5-year outlook also reflects the inflationary impact of energy and key consumables pricing, which we are working diligently to offset.
How important is Africa for Barrick?
While Nevada is Barrick’s value foundation, our Africa & Middle East region is our most consistent producer of excellent performances on all fronts, as well as a rich store of gold and copper growth opportunities. Barrick’s status as Africa’s biggest gold miner is underlined by the Loulo-Gounkoto complex, which routinely accounts for around 7% of Mali’s GDP. It’s been going strong for 18 years and its continued success in replacing depleted reserves gives it a lease on life of at least another 10. Kibali, Africa’s largest gold mine, produced another steady performance with improved costs across all metrics. Hydropower provides most of the mine’s energy requirements, offsetting the impact of higher diesel prices. Our Tanzanian operations are a great example of partnership in action. When we took over North Mara and Bulyanhulu they were not only badly run down but effectively closed. We settled their legacy issues in a joint-venture deal with the government and transformed them into new mines capable of a combined annual production in excess of 500,000 oz.
What are some interesting ways in which Barrick is leveraging technology?
Towards the end of last year, Barrick passed another important milestone in its digital transformation journey with four more sites moving over to the single SAP solution, which is now in place across all the company’s North America, Latin America and Africa assets. With common data and business processes across all our mines, we now have the ability to benchmark our operational performance. This single integrated knowledge platform will give Barrick the ability to convert updated mine plans into financial models and roll them up into a consolidated group view, all in a matter of minutes. Measuring key cost drivers in real time enables us to flag issues that require immediate attention. It has also provided a robust foundation for our continuing investment in new projects related to data and analytics, benchmarking and efficiency management.
At an operational level, we have successfully piloted a remote monitoring service with Sandvik and are busy kicking off a global rollout, taking advantage of the data from roughly 200 Sandvik assets in operation across the company. Drills, trucks and loaders have a host of sensors onboard and can continuously provide large volumes of data like temperature and pressure readings, acceleration and speed. By mining this data using algorithms and looking for trends or hotspots, we can identify conditions which could lead to a component failure before it happens. We can also monitor operator performance and provide scorecards measured against best practices to help reduce wear and tear on equipment and improve fuel consumption.
At our Bulyanhulu mine in Tanzania, we have installed a Chrysos PhotonAssayTM laboratory, which delivers faster, safer and more accurate analysis of gold, silver and complementary elements by non-destructive measurement of larger and more representative samples in as little as two minutes, enabling rapid turnaround of critical operational information that drives optimization throughout the mining value chain.
What potential does Barrick sees in the Nubian and Arabian Shields in North Africa?
We have filters for going into new countries with geological prospectivity being the number one priority. In Egypt, we were awarded four exploration licenses for 19 blocks, covering a total area of 2,900 km2 in the highly prospective Eastern Desert region of the country. The Eastern Desert is part of the Proterozoic Arabian Nubian Shield, which hosts the giant Sukari deposit and numerous other gold occurrences, but which has seen no recent systematic exploration. We intend to work closely with the Egyptian Mineral Resource Authority (EMRA) and other participating exploration and mining companies, to finalize the terms of Egypt’s exploitation license agreement which will apply to the industry. The move into Egypt is an integral part of Barrick’s exploration strategy.