Barrick Mining Corp

SIX:B

Thank you, and good morning, everyone. We hope you've had an opportunity to review the press releases issued before the market opened this morning. The presentation deck will review is also available to download on our website.

Presenting our results today are Mark Hill, Barrick's President and CEO; and Helen Cai, Senior EVP and CFO. Other members of Barrick's management team will be available after our prepared remarks for Q&A.

Before we begin, please note that there will be forward-looking statements. This slide includes a summary of the significant risks and factors that could affect Barrick's future performance and our ability to deliver on those forward-looking statements. This material is also available on our website.

With that, I'll turn it over to Mark.

Okay. Thanks, Emily, and good morning, everyone. So for those who don't know Emily, she is our new Vice President, Investor Relations and joins us from U.S. Steel. So before we share our full quarterly results, I want to begin with the agreement with Newmont we announced today. And actually, I want to go off script straight away to make the lawyers nervous here.

So I want to clarify a few misconceptions here. So firstly, the total value of that package is approximately $4 billion. So obviously, it includes the proportion of Fourmile, but it also includes contribution of Newmont's properties Mike and Fiberline, which I think it's around 6.4 million ounces as well. It is also the cost of resolving historical disputes and litigation between the joint venture partners. And it also reduces the friction costs of the planned IPO, which will unlock even greater value for the shareholders beyond the cash proceeds from the transaction. And as we have said, they will be largely returned to the shareholders.

So moving on, we've reached this agreement after 4 months of negotiations. So it now enables us to focus on delivering value through safely and consistently producing ounces. And our interests now are completely aligned as joint venture partners, which is critical. And I did want to actually thank our counterparts at Newmont, Natascha and our team and of course, everyone on the Barrick team for the enormous amount of effort and work that's gone in this over the last 4 months to reach to this agreement.

Now before I get into the results, there's also a couple of other things I would like to highlight, which I think are the key strengths that have come out of Barrick over the last 9 months. So first, our leadership team. So over the last 10 months, we've improved the operational performance across the entire business. And that's thanks to the strength of our operating site teams, right, to our GMs and everyone right down through to the mining front. So we've also strengthened our relationship with Newmont, as we just said, positioning us well to grow and develop NGM further, which is also critical.

Second, with the IPO, we're building the only major American pure gold company with high-quality, long-life assets. So this is exactly what investors, including some of the world's fastest-growing source of capital are looking for. And third, outside of North America, the Rest of the World portfolio, which has a significant growth profile, also has a distinctive advantage in our ability to work with our Chinese partners, including, as you know, a joint mine ownership and co-investment. And this enables us greater efficiency and supply chain strength, which has helped us control that [ book ] and partnerships that improve outcomes and reduce our risk. So with this context, let me turn to our results for the quarter.

As I said, we've had our third quarter in a row with excellent operating and financial results. We delivered on all 4 of our priorities for the year, the same priorities outlined at the start of the year. We continue to improve our safety performance. I'll get to that a bit later, but there's obviously still more work to be done there. We delivered our gold production above guidance and met our cost guidance. We advanced our growth projects, Fourmile, Lumwana and the PV expansion, which remain on time and on budget. not often you hear that in the mining industry.

We continue to review Reko Diq and commence a slowdown of development on the 1st of July, as previously disclosed. And our delivering on production and meeting our cost guidance also allowed us to deliver strong financial results, which Helen will discuss a bit later. And finally, we achieved major milestones in the preparation of the IPO of our North American gold asset, which are on track -- which is on track to be completed by the end of the year.

So let me move to safety, which is still our #1 priority, and our goal is that everyone obviously goes home safe and healthy every day. So we saw a reduction quarter-on-quarter in our frequency rate. We've seen that from 0.92 to 0.77. But disappointingly, we still had 6 LTIs. So there's still a lot of work to do. It's completely unacceptable, and we need to focus on our safety until we get to our target of zero harm. So all of our leaders all the way up to the executive committee, including myself, are spending more time in the field and at the mine site. They're doing more critical control verifications and fixing more risks on the spot.

On top of that, we've also invested over $90 million this year in technology to improve safety. So this includes our automation of mining equipment right down to vehicle dash cams, safety reporting software and AI analytics. And we're also working hard to engineer out as many safety hazards as possible. So turning to our Q2 highlights. Actually, before I start on the Q2 highlights, one other thing I'd like to clarify is our earnings, which $0.82 -- adjusted earnings, $0.82 per share is in line with the Bloomberg consensus. I know there's some media out there this morning that not that we missed, but I'm not sure what the source of that is.

Barrick produced 796,000 ounces of gold in the quarter, which was 3% above guidance and 11% over Q1. The main drivers of that were we progressed the ramp-up of Loulo-Gounkoto ahead of schedule. PV ramped up faster than expected after the maintenance shutdown in Q1. And we mined record tonnes underground at Cortez and continued the ramp-up at Goldrush. On the copper side, we produced 56,000 tonnes. We managed costs well and our gold costs, as I said, were within guidance. Our earnings nearly doubled year-over-year, and we more than doubled quarterly shareholder return to $1.5 billion. And the strong performance for Q2 is obviously across all of our regions.

So North America continued to anchor our world-class portfolio. NGM and PV both registered year-over-year revenue growth. Together, they accounted for 53% of our total attributable adjusted EBITDA at a margin of 61%. Our other regions also delivered strong gold production with meaningful attributable EBITDA at margins of 59%. Copper continued to perform well and delivered comparable margins to our gold business. So moving on to growth. As I said, our growth project advanced on schedule during the quarter. So Fourmile, we ramped up to -- ramped up the drilling to 20 active rigs, and we plan to complete the PFS by the end of 2028. At Lumwana, we made good progress on the mill expansion, which will double the copper production. We expect the project's 2026 CapEx to come in at the lower end of guidance and the project remains on budget. We're on track to produce our first copper from the expansion by the end of Q1 in 2028. The PV expansion also advanced on schedule. We've made progress on permitting and construction across the tailings facility, haul roads and water treatment plant. And we're also very pleased to report that we now have 90% of resettlement packages being accepted.

We continue to review Reko Diq as previously disclosed, and we've decided we won't start building the plant this year. So we've reduced our expected 2026 attributable CapEx. It was $600 million to $700 million and is now $450 million to $500 million. So the lower spend on the mine in Reko Diq has reduced our group guidance for 2026 total attributable CapEx to $3.8 billion to $4.2 billion. So back to the IPO of our North American assets. So as I said, this entity will be a high-quality pure gold play company, which assets are located exclusively in low-risk jurisdiction. And what I'm pleased to share is that the Board has selected me to lead the new company as a CEO upon launch. We've completed all operating and separation agreement between Barrick and the new company, and we remain on track to complete the IPO by the end of the year. And we expect the vast majority of net proceeds raised to be returned to shareholders. I know several people have asked me in the past.

So I'll now turn it over to Hongyu Cai, our CFO, who will review our financial performance.

Thank you, Mark, and good morning, everyone. Q2 marked the third consecutive quarter of strong production, cost performance and financial results. Net earnings were $1.2 billion, a 50% increase year-over-year. Adjusted net earnings was $1.36 billion, which equates to adjusted EPS of $0.82, in line with Bloomberg consensus. Attributable adjusted EBITDA of $2.5 billion was up 51% year-over-year with a 59% margin.

On a cash flow basis, the second quarter is typically our lowest year for free cash flow due to the timing of our annual tax and interest payments. This quarter, we also incurred a onetime [ $400 ] million payment related to Loulo-Gounkoto. Combined, this led to a 33% decline in year-over-year attributable free cash flow. Excluding this, attributable free cash flow for the quarter would have been over 60% higher year-over-year. Year-to-date, attributable free cash flow has been $1.4 billion, more than double the same period last year.

Turning to the operations. Gold production increased 11% quarter-over-quarter and exceeded guidance. We continue to operate within our cost guidance, reflecting an acute focus on operational efficiencies to offset fuel price pressures. We closed Q2 with a healthy $1.2 billion of net cash on the balance sheet, giving us flexibility to continue investing in our highest return opportunities and returning capital to shareholders.

Turning to our capital allocation framework. We have 3 priorities. First, managing the balance sheet with discipline; second, investing in our assets to drive earnings accretive growth; and third, returning capital to shareholders. Our framework is designed to be sustainable through the cycle. On the balance sheet, we ended the quarter with meaningful access to liquidity an undrawn $3 billion revolving credit facility and no meaningful debt due until 2033. Turning to our portfolio. Lumwana and Fourmile are 2 clear examples where we are strategically deploying capital into organic opportunities that we believe will generate superior returns.

More broadly, we intend to identify similar earnings accretive opportunities to strengthen our growth profile while remaining disciplined in how and when we deploy capital. This is not about growth for the sake of it. It is about creating value over time with a suite of assets that has extraordinary growth potential. And finally, we are executing against our capital return policy. Our dividend policy provides for a quarterly base dividend of $0.175 per share with an additional performance top-up at year-end to target a total payout of 50% of attributable free cash flow. We also completed $1.2 billion of share repurchases this quarter of the $3 billion authorization that was announced last quarter.

In the 3 quarters since new leadership began in October 2025, Barrick has returned $3 billion in dividends and buybacks to shareholders, more than double the prior corresponding period. We expect the careful execution of our capital allocation strategy to drive further shareholder returns. In summary, our capital allocation framework is disciplined, flexible and designed to work throughout the cycle. It supports reinvestment in the business, advances growth, protects the balance sheet and creates a clear pathway for returning excess cash to shareholders.

With that, I will turn the call back over to Mark.

Okay. Thank you, Hongyu. So just on guidance, so our 2026 production and cost guidance remain unchanged. So for the third quarter, we expect gold production to be higher than Q2, consistent with that plan, and we expect even higher production in the fourth quarter. Copper production should also increase in the second half of the year relative to the first half. So since -- to say it again, since October 2025, we have consistently delivered against our strategic priorities and set a new standard of operational performance. And again, I would like to congratulate our GMs and our people on the site. We continue to focus on controlling costs, capital intensity and productivity. And based on what we see today, we remain confident in our ability to deliver on our full year commitments for 2026.

So just a couple of things to conclude. So obviously, again, I'm going to finish with the most important thing, which is safety. And as I said, even though we've seen significant improvements, everyone is still focused on making sure every employee goes home safe every day. We have improved our operational consistency, which is what I said, and we've delivered on our guidance again. And as I said before, we've delivered on all our projects are on time and on budget, and I'll say again, I'm not sure how many times we do that in the mining. And we have advanced our North American IPO on [ Te Wealth. ] So we're basically on track to execute against all the 4 priorities that we set at the start of the year. And so again, I want to say, and of course, we've transformed this relationship with Newmont, which allows us to get full value and expand NGM.

So with that, I'll hand it back to the moderator for Q&A.

Okay. So the -- just to be clear, I'm not going to break it down. So on the prior disputes, I mean, I can't give a number on that. We would have had to go through a process to actually get to that number. So we got to where we are. And then on the structural changes, I mean, now that we have this agreement done, we're actually going to go away and optimize this structure for the IPO. So as you can imagine, that's a bit of a work in process. So -- but the overall value that we had on the table at the end of this discussion of about $4 million as I highlighted.

And just one other thing, Josh. The thing I want to highlight is since I started this job, NGM has a lot of opportunity. I mean, you know the assets well, and I'm sure you agree with that. There's been no increase in processing capacity there for years. I mean we're dealing with 25-year-old infrastructure. And then we have something like Fourmile that comes in, which is a world-class asset. And the answer is that we're just going to feed that through the current infrastructure and delay the other ounces, which anywhere else in the world if you found that number of ounces, you would be wanting to bring that in early.

So my discussions with Natascha and Newmont right from word go was how do we get this together so we can optimize NGM. And by optimize, I want to look at increasing processing capacity. I want to stop trucking ore all over the state. And the only way I can do that is if we combine all these assets now and work together to see if we can justify a roaster or an autoclave and what we need to build, what infrastructure we need at Cortez to process Fourmile and Goldrush, get our cost structure in place and increase our overall ounces. So -- where we've landed now, at least we're in a position, in my view, to add a lot of value very quickly without getting into these disputes about allocation of resources.

And obviously, Josh, there'll be a lot of synergies as well because we're just going to use the same team going to combine them all together, all the same equipment and we can advance this a lot quicker. And that was obviously my ultimate goal.

Josh, it will still stay at 10%. I don't see any of that just the way the company is structured. Anyone, correct me?

Sorry, it's Jorge speaking. That's exactly it. I think it's just a matter of looking at the structures that we started looking at right at the beginning, comparing it to the current structure because as Mark said, it's friction costs within that. You also look at where it's domiciled, et cetera. So there's all these things that we need to go back and look at now that we have the agreement with Newmont. And again, as Mark said, that's where the value comes as well. We have this flexibility and optionality.

I can hear you, Tanya, how are you?

No. Tanya, it's $4 billion total [indiscernible]

Okay. Sorry, you're very hard to hear. But Tanya, I think if I got the question right. So the cash we get back would be the majority of the return to shareholders, correct?

Actually, Tanya, let me hand it over to Jorge, who is more better to speak.

So I would say we're actually very close. But like I said, now that we have this agreement with Newmont and their consent, one of the things we want to do is go back and look at previous structures and compare that to what we have today. So we just want to go do that and make sure we do our diligence and understand the impact of that because we think there are big savings there. So that's where we are at the moment.

Okay. Thanks, Lawson. Look, obviously, my intention is to accelerate this as fast as possible. And now that we sort of got through this process, I think that allows us to accelerate it for sure. Now we're still going to be limited by permitting timelines and things like that. But where I think we can really advance it will -- is on the processing side as well, right, because I'm going to advance that, and I've already talked Natascha about it. We are going to advance that all in parallel. That is why we are driving those declines and doing this drilling. So it may not come on earlier, but hopefully, when it comes on, we'll be able to ramp it up a lot quicker and to actually a higher production target. That would be my target.

No. So Lawson, not at this point. I mean we're still on track to do the 10% and just show the value and highlight the value of a dedicated management team. And just by the way, we have already pretty much split the management team and hopefully, you've noticed the change in production and safety and things like that, but just having that dedicated focus. So anyway, to answer your question, no, there's no update we're going to go past 10%.

There will be, but I don't know what the guide is, George, do you know?

Well, again, we just have to go back and look at that, but also absolutely there will be a marketing process.

Okay. That's a good question, Anita. So on the roaster, I want to reoptimize the whole process flow. I mean you've been there several times. So you've seen what it's like. So the roaster, I'm -- we've actually got Hash looking at it permanently now. I would have said it's $2.5 billion. I don't really know that it will be around that number. But that will offset a lot of things as you know, we'll be trucking stuff all over the country side as well, and it would reduce some other infrastructure requirements. And then -- as far as other capital, Wessel will help me out, there's nothing else -- what else is material that's coming up in NGM?

It's really it, Mark. Obviously, our development of Fourmile as we guide at the market. And the conceptual PEA is in the range of $1.5 billion to $1.7 billion that we'll be spending over the next few years on Fourmile. And apart from that, that's really the items that we've got in our capital portfolio. And we are planning this year to pull some capital forward for the expenditure that we have on replacing our truck fleets at Turquoise Ridge.

And actually a few project, plus also guiding the autonomous hauling that we have at Carlin. It depends, following the success that we've had with those projects. We still also expect to land our capital alignment with what we guided a few years ago, at least for North America. So those are the few projects.

Thanks, Wessel. Does that answer, Anita?

Actually, Anita, it's a fair question, because you reckon that's why our share price is down 7%?

Okay. I haven't got a good answer to that.

I mean when we filed -- when we issued the PEA, it was conceptual in nature and still up to technical.

Okay. Anita, you're saying you haven't got enough information basically, that's what you're saying?

Sorry, Anita. Let me just -- we will take that away and see how we can do a better job. I understand what you're asking. So I'll work something and come back to you.

Yes. So the right way is yes, we're paying for 61.5% of Mike and Fiberline and those -- that other settlement amount, which we're certainly not going to get into. Look, Anita, we agreed we're just going to go out with a number and that was quite a bit. So look, I apologize, but no, I can't give you that breakdown.

Sorry. So when you net everything together and anyone jump in here if I get this wrong, right? So to get to the $4 billion number, it is the value of Fourmile, the 38%. Then you have to net off the value of 61.5% of Fiberline and Mike. There is some money in there for -- to settle some legacy disputes for want of a better word, right, as well. And then if you want to understand the full value, there's obviously some benefit to Barrick by getting that consent and reducing the friction cost on the IPO. I probably make it very complicated, Daniel, but...

I would say it's comparable. And hopefully, if we...

Depending where we locate that, you could actually exceed. Do you want to say something?

Okay. And Daniel, just to go back to the engineering side of it. Obviously, the idea is that we increase the overall production capacity in Nevada or reduced trucking. So yes, I would be -- there will be more capital but it will increase the production profile and lower the cost. That would be the target.

I'm not sure I understand that question, Daniel.

Yes, that is taken into account by the 2 technical teams. By the way, 2 technical teams, one from Newmont, one from Barrick, sat down with the model and all the data and went right back and took all of that into account when we came up with the figure.

Look, so we're advancing that discussion, right, and for the next leader of Barrick. And we'll be updating you, I would say, shortly is the right term. We'll update the market shortly. It's an advanced process, Daniel.

Okay. Thanks, Bennett. I'm going to hand it over to George.

So I think the best way to explain Loulo-Gounkoto at the moment is, as we've said, we've ramped it up quite successfully. So what it has become is it's become self-sustaining. And so therefore, any capital and growth at the moment that we are funding is self-sustained funding. And so our expected growth for next year would start coming from the Baboto pushbacks and the open pits on probably early or middle of the second quarter. So that's, I think, most I can say at the moment. We are still looking at optimizing those plans. But certainly, we would be starting to move into the open pits in the first half of next year.

Well, I don't think it's conservative necessarily. But look, we're going to hit our guidance, as I said. Just, I suppose to put something else on the table, we've had Veladero down for, I think it's 2 weeks now, but we had a weather event where we had to evacuate and I'm sure you probably saw on social media and things out of Chile and in Argentina. So that has hit us. And Porgera has been down for the opposite reason because Waile Creek dam dried up and we had to shut the whole plant down.

So while I'm still confident we are hitting guidance, and you're right, NGM is in a good place and so we have had some other issues throughout the portfolio. And nothing -- both of them are actually Mother Nature events, are not actually operational problems. But -- so I still think the guidance is fine, but it's certainly not conservative.

Who's got that number? It was 14%. Someone else bought this up. Does anyone know the answer to that? I'll have to get back to you on that, Ben. It's a good question, and it's something we are actually focused on is making Barrick and especially NGM, the employer of choice, right? It's not that long ago that everyone wanted the job at Barrick. So we are working on that. And as I said, the culture at NGM, despite what might have been in some articles has, in my opinion, turned around completely, right? And you can tell that just by the performance that I said the production performance, their safety performance just when you go there, the attitude of the workforce is certainly better than it was. But I'll get the actual number if you can note that down, Ben, but we'll come back to you.

Matthew, I cannot hear you if you are talking. Matthew, can you hear us?

Sorry, Bob, just explain that to me a bit more. What do you mean by that?

Look, actually -- so Bob, the rest of the world portfolio is actually one of our biggest growth things. We talk about NGM a lot, but actually just at our recent Board meeting, actually, we had a whole session on growth for the rest of the world potentially you've seen what's going on at Lumwana and even around Kibali and what we can do there. So the plan -- the current plan is to grow the rest of the world, and that's what the focus will be. Seb, if you want to chime in there.

But there, Bob, there is -- I'm not sure how familiar you are with those assets, but there is a lot of potential around those current, which we're trying to crystallize and put into a proper plan.

No, it's done, Bob.

Okay. Thanks, Steven. So look, on the permitting, obviously, you want to get the permit [indiscernible] And after that, when I look at this, which again is why it's critical that we got this joint venture sort out. I have to get -- I have to understand what we can do as far as processing before I can even start the permitting. So I'm trying to accelerate that for that very reason. It's probably not a bad time to get permits in Nevada as well. So I can't give you a clear answer on the timing on the permits and that sort of thing.

But now that we've got this agreement in place, we are going to sit down and completely optimize Nevada and that ore flow. And I know Newmont is supportive also of, what's the word? Increasing processing capacity. And Steven, we always get into the same discussion we have to flash out, which is autoclave versus roaster and where it should be positioned. And I just haven't got a clear answer on that, but that's what we'll be accelerating starting tomorrow.

Actually, I don't know what the breakdown of the 6.4 million is. I just go through the presentation before this. So I'll get back to you on that, Steven.

So Fiberline is close to the infrastructure at Turquoise Ridge. And I think that is a reasonable status. It's an open pit so it would be a matter of satellite deposit. And Mike, at this stage, I haven't put a lot of value towards that, mainly for...

Floating 10% of?

Okay. No, Martin, I've got to be honest, we have not had that discussion. It's never come up. So it's certainly not on the table at the moment.

Okay. Let me -- this is a bit of a fluid situation, as you probably imagine. But let me hand it over to Helen to explain.

Thank you for the question. The nature of the spending is additional royalties, penalties and associated interest based on the retrospective application of the 2023 mining code specifically for the year of 2024 and 2025. So previously, we had already settled anything related to 2023 and earlier years, but this is specifically for the 2024 and 2025. In terms of the amount paid, we paid cash, $400 million in April. And also, we had a further payment demand of $48 million that was received in July. I hope that answers your question.

Yes, maybe you can answer that.

I think maybe to simplify, the original agreement only covered up to 2023. We continue applying our conventions through that period where we were negotiating and dispute. We still applied our original conventions. And so this was effectively -- as per the agreement, it only applied the retrospective application to 2023, and therefore, we had to do a reconciliation with the government for 2024 and 2025. And this was that payment effectively.

Well, I think there's a couple of things. Firstly, just as a general thing, it's not actually in the joint venture agreement, but the way we've approached this is completely different. Obviously, Newmont will have access to whatever information and the site. And we've already done that with Francois and now with David, their technical leads. And then they come and give any feedback they can and any suggestions, which is always helpful. As far as actual rights go, the main one is around that they do have a right to -- and Joe, correct me if I get the language wrong. But when we appoint the General Manager of NGM, we have to get their consent to do that, which I don't have an issue with that at all. So I think that's fair enough.

And then the other part was which we agreed, which I also think would be quite helpful now that we've got -- we've reset this relationship and actually we want to advance this as quickly as possible is that we'll likely embed in our executive team at NGM a Newmont employee, which I think will help. It will go a long way just with the transfer of information and things like that, and they will feel more comfortable with what's going on. So at a high level, that's what we agreed. There was some other things around excluded property committees and other things like that. But really, that's been taken care of for the fact we've brought Fourmile and those things into the joint venture. So it's probably less relevant.

Well, my preference is always internal, but at this stage, we haven't got to that conclusion yet who it is. So there's internal and external candidates. That's all I really can say. My preference is obviously internal.

Thank you. I just have an e-mail question that I'd like to read out. So given some feedback from shareholders, are you considering a spinout of North America to existing shareholders rather than an IPO structure? The shares of Nevada and PV are distributed to current shareholders rather than diluting existing holders.

Okay. Who asked the question?

Daniel.

No, I know Daniel. A lot of people ask that question. The short answer is no. Anything else, Emily?

That's it. I'll turn it back to the moderator.