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PDF 4.93 MB - Barrick Gold Corporation
Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 20 20 YEARS YEARS OUT: OUT: Observations Observations on on the the Gold Gold Industry Industry Alan R. Hill Executive Vice President, Development 20 YEARS OUT: Observations on the Gold Industry AMERICAN BARRICK RESOURCES Renabie Camflo 1983 20 YEARS OUT: Observations on the Gold Industry 1 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 BARRICK GOLD CORPORATION Eskay Creek Hemlo Goldstrike Round Mt. 2003 Alto Chicama Pierina Pascua-Lama Bulyanhulu Yilgarn Kalgoorlie Veladero Cowal 20 YEARS OUT: Observations on the Gold Industry BARRICK GOLD CORPORATION Betze-Post Goldstrike Meikle 8 YEARS + 2 MILLION OUNCES 20 YEARS OUT: Observations on the Gold Industry 2 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 20-YEAR SPOT GOLD PRICES $500 $400 $300 $200 83 85 87 89 91 93 95 97 99 01 03 01 03 20 YEARS OUT: Observations on the Gold Industry 20-YEAR SPOT GOLD PRICES $500 $400 $300 $200 83 85 87 89 91 93 95 97 99 20 YEARS OUT: Observations on the Gold Industry 3 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 GLOBAL POLITICAL SHIFTS Build the best business plan Remain flexible and vigilant Opportunity or Obstacle 20 YEARS OUT: Observations on the Gold Industry GLOBAL GOLD MINING INDUSTRY DECLINING PRODUCTION NEW MINE DISCOVERIES 20 YEARS OUT: Observations on the Gold Industry 4 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 LONGER PERMITTING PROCESSES § Open pit permitting and construction 2003 2004 2005 2006 2007 § Underground permitting and construction 2003 2004 2005 2006 2007 2008 2009 2010 20 YEARS OUT: Observations on the Gold Industry GLOBAL GOLD MINING INDUSTRY DECLINING PRODUCTION NEW MINE DISCOVERIES TECHNOLOGY ADVANCES 20 YEARS OUT: Observations on the Gold Industry 5 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 BARRICK DEVELOPMENT PROJECTS § Cowal Project, Australia - Acquired with EIS in place § Veladero Project, Argentina - Exploitation agreement signed - Road construction mobilized § Alto Chicama Project, Peru - Working on permitting and EIS 20 YEARS OUT: Observations on the Gold Industry BARRICK GOLD CORPORATION ? ? Pascua-Lama 2023 ? Bulyanhulu ? ? 20 YEARS OUT: Observations on the Gold Industry 6 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 2002 BUDGET $100M BY REGION (millions of dollars) Chile/ Argentina Canada 22 3 Nevada 11 7 Peru 9 35 3 10 Australia Tanzania Other Corporate Development and other 20 YEARS OUT: Observations on the Gold Industry EXPLORATION PROGRAM METRICS § Cost of Discovery $12.00/oz. § Cost of Replenishment $3.00/oz. 20 YEARS OUT: Observations on the Gold Industry 7 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 RISING GOLD PRICE ENVIRONMENT $500 § Development projects and mine production which are marginal - Higher-cost properties - Earnings below cost-of-capital $400 § $350 gold required to sustain $300 exploration and yield the best new discoveries $200 01 03 20 YEARS OUT: Observations on the Gold Industry ALTO CHICAMA PROJECT 7.3 moz. resource 20 YEARS OUT: Observations on the Gold Industry 8 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 Pascua-Lama 800 GROWTH PIPELINE (thousands of ounces @ cost per ounce) Veladero Alto Chicama @ $85 530 500 @ @ $130 $155 Cowal 270 @ $170 2005 2005 2006 2008 20 YEARS OUT: Observations on the Gold Industry GROWTH PIPELINE ECONOMICS (rate of return as percent) at $325 gold cost of capital 14% + 3% for each $25 gold price increase 8% 20 YEARS OUT: Observations on the Gold Industry 9 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 GLOBAL GOLD MINING INDUSTRY TECHNOLOGY ADVANCES NEW MINE EXPLORATION DECLINING PRODUCTION 20 YEARS OUT: Observations on the Gold Industry GLOBAL GOLD MINING INDUSTRY RISING SPOT GOLD PRICES TECHNOLOGY ADVANCES NEW MINE EXPLORATION RISING GOLD PRODUCTION 20 YEARS OUT: Observations on the Gold Industry 10 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 GLOBAL GOLD MINING INDUSTRY § Requires right market conditions § Governmental cooperation in permitting - Impacts all stakeholders § Build trust as an industry - Practice social responsibility - Become a “force for good” 20 YEARS OUT: Observations on the Gold Industry BARRICK’S FOUNDING PRINCIPLE § “North American Alternative” - Safe haven for nervous investors - Positive social impact - Progressive social values § Mining is a frontier business 20 YEARS OUT: Observations on the Gold Industry 11 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 GOLDSTRIKE AND ELKO, NEVADA 20 YEARS OUT: Observations on the Gold Industry PIERINA AND HUARAZ, PERU 20 YEARS OUT: Observations on the Gold Industry 12 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 PIERINA AND HUARAZ, PERU 20 YEARS OUT: Observations on the Gold Industry BULYANHULU AND TANZANIA 20 YEARS OUT: Observations on the Gold Industry 13 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 PIERINA AND HUARAZ, PERU 20 YEARS OUT: Observations on the Gold Industry GOLD MINING INDUSTRY OUTLOOK 2023 20 YEARS OUT: Observations on the Gold Industry 14 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 GOLD MINING INDUSTRY OUTLOOK Our future depends on: § Which investments we make § What exploration we undertake § Which projects we develop 20 YEARS OUT: Observations on the Gold Industry GOLD MINING INDUSTRY OUTLOOK Governments must: § Rationalize regulatory processes to incentivize mining investment - Growth in GDP - Employment and training - Social progress - Economic prosperity 20 YEARS OUT: Observations on the Gold Industry 15 Barrick Gold Corporation Cordilleran Exploration Roundup – January 2003 FORWARD LOOKING STATEMENT Certain statements included herein regarding realized gold prices, gold lease rates and contango constitute "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Barrick or of the gold mining industry to be materially different from future results, performance of achievements expressed or implied by those forward looking statements. Barrick is subject to the effects of changes in the worldwide price of gold and the risks involved in mining operations. These factors are discussed in greater detail in Barrick's most recent Annual Information Form and Management's Discussion and Analysis on file with the U.S. Securities and Exchange Commission and Canadian provincial securities regulatory authorities. 20 YEARS OUT: Observations on the Gold Industry 16
