Barrick Gold Corp

TSX:ABX

Q3-2025 Earnings Call

[Operator]

Welcome, everyone, to Barrick's Third Quarter 2025 Results Presentation. [Operator Instructions] As a reminder this event is being recorded and a replay will be available on Barrick's website later today.

I will now turn the call over to Cleveland Rueckert, Head of Investor Relations. Please go ahead.

[Cleveland Rueckert, executive]

Thank you, Mariana, and good morning, everyone. We hope you've had an opportunity to review the press release we issued before the markets opened this morning. This presentation deck is also now available to download on our website.

Presenting our results today are Mark Hill, Interim CEO and Group COO; and Graham Shuttleworth, 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 we will be making 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 these forward-looking statements. This material is also available on our website.

I will now hand it over to Mark.

[Mark Hill, executive]

Okay. Thanks, Cleve. And I appreciate everyone joining us this morning. So as Cleve pointed out, I'm the interim CEO and Group COO, and since taking on these roles, I've met with the teams and visited most of our key sites to review performance and assess what we can do differently at Barrick, putting a stronger emphasis on safety and operational performance. The quality of our assets is undeniable. So we're undertaking a review of our operations from the bottom up to ensure we have the right teams and processes in place to safely, most importantly, and consistently deliver value going forward. We're about halfway through that review, and we'll provide more details at our full year results in February.

So since assuming this interim CEO responsibility, it's become increasingly clear to me that the most significant opportunity is at our gold assets in North America, particularly through improved performance at NGM, coupled with our gold discovery at Fourmile.

So turning to our performance in Q3. We posted strong operational and financial results, and we logged several company records included adjusted earnings per share and cash flow. So production increased from last quarter and cost drop, which combined with a higher gold price drove a significant increase in our free cash flow. We increased our base dividend by 25%. Dividends and buybacks combined in the quarter were a record quarterly cash return to shareholders. Asset sales support an expanded USD 1.5 billion buyback program. And on top of all this, our updated PEA confirms that Fourmile is arguably this century's most significant gold discovery.

So despite this very strong quarter for business, it was unfortunately overshadowed by 3 fatalities: one at Goldrush, one at Bulyanhulu and one at Kibali. That was a result of an incident that we reported in Q2 this year. So firstly, I would like to extend our sincere condolences to the families and the loved ones of our 3 colleagues. And secondly, I want to highlight to everyone that we are conducting full investigation into these instruments so that we can put systems in place to guarantee everyone goes home safely every day, which is my commitment. Obviously, safety needs to be the #1 focus at Barrick. We are reviewing our safety culture and structures to ensure we embed the right principles at all levels of the organization to achieve our goal of zero harm.

So looking at the business performance in the quarter. Gold production increased 4% over Q2, primarily driven by higher grades at Kibali, higher throughput at Cortez and Turquoise Ridge and a record high throughput at Pueblo Viejo. We expect continued quarterly growth in Q4 in line with our 2025 plan for a steady production increase throughout the year. Higher production volume helped drive our gold cost metrics per ounce lower across the board, despite the pressure on our cash costs from royalties associated with the higher gold prices. Higher volumes on lower costs translated into a 25% quarter-on-quarter increase in our attributable gold EBITDA demonstrating significant operating leverage from a 5% increase in the gold price.

Copper was -- Copper production was slightly down from Q2 on the back of a September shutdown in Lumwana, which was in line with our preventative maintenance programs. We expect both gold and copper to deliver with their respective production guidance range for the year and on cost guidance after adjusting for the royalty impact from the higher gold prices.

Now I'm going to hand it over to Graham to discuss our financial highlights. Thanks, Graham.

[Graham Shuttleworth, executive]

Thanks, Mark, and good morning to everyone. Barrick's third quarter financial performance was exceptionally strong setting company records for operating cash flow, free cash flow and adjusted net earnings. We continue to fund our growth projects with disciplined budgets resulting in cash flow more than tripling from quarter 2. We again ended the quarter in a net cash position, supporting an additional performance dividend, an increase in our base quarterly dividend and a significant increase in our share repurchases.

Looking at how our performance has trended this year, the combination of a higher gold price, production volume growth and lower unit costs per ounce delivered higher margins and a 20% quarter-over-quarter increase in Barrick's attributable EBITDA. This translated to a 274% increase in free cash flow enabling us to repurchase $598 million of our stock, and we increased our base dividend by 25%. I'll discuss capital allocation more in a moment.

As Mark highlighted, quarter 3 was a company record for cash returns to shareholders. We ended the quarter in a net cash position. And at today's gold price, we expect quarter 4 will be even better. This is all before the Hemlo and Tongon asset sales, which we expect to close before the end of the year.

Looking at our capital allocation framework, so far in 2025, we've generated $5 billion in operating cash flow. We've reinvested more than $2 billion back into the business. We paid $596 million in dividends, and we exhausted our $1 billion repurchase Authorization. Barrick has 3 capital allocation priorities above and beyond our long-term operating plan. First, we maintain a strong balance sheet keeping us in control of our destiny through commodity price cycles. We target zero to modest net debt. Second, we invest in accretive growth with a disciplined focus on cash generation and sustained value creation. And third, we return excess cash to shareholders, balancing dividends and buybacks depending on our share price and valuation.

Given the confidence in our business, we are increasing our base quarterly dividend by 25% to $12.5 per share. For the quarter, the Board has approved a $17.5 per share quarterly dividend, consisting of the higher base dividend and including a further $0.05 per share performance dividend. Additionally, given strength in operating cash flow and the cash from noncore asset sales expected in the fourth quarter, the Board has authorized a $500 million increase to our existing share repurchase program which we expect to execute on further in quarter 4.

Let me now turn the call back over to Mark for more detail on our regional performance in the quarter.

[Mark Hill, executive]

Okay. Thanks, Graham. So starting with North America, Barrick's value foundation, gold production increased 4% from Q2 driven by improved performance at Cortez and Turquoise Ridge. Cortez saw a significant increase in leach pad production in line with the mine plan. Turquoise Ridge production was driven by increased throughput at the Sage autoclave following the maintenance we undertook in the first half of the year. At Carlin, roaster throughput was negatively impacted by some unplanned downtime at the end of the quarter. Importantly, all NGM sites reported lower unit cost per ounce and North America's attributable EBITDA increased 19% from Q2.

So NGM is our most important asset and is a foundation of Barrick, contributing more than half of our attributable reduction. It is on track to achieve full year production guidance and is central to delivering value to our shareholders. So as most of you will know, we believe Fourmile is one of the most significant gold discoveries this century. We currently have 16 drill rigs on the site, and we're on track to double the existing resource this year. We've also increased Fourmile's exploration budget by a little over $10 million for the remainder of 2025.

This slide highlights the opportunity. The zone circled in red is our existing resource. The black dotted area is what we expect to convert to resources this year. And the region in green and beyond is all the upside. So looking ahead, we expect to have 20 drill rigs on the project next year, and we plan to commence the Bullion Hill decline development towards the end of 2026. This will allow us to proceed with the feasibility study.

On the back of the recent drill results, we updated our Fourmile PEA in September and highlights a rare combination of grade, scale and exploration upside. So advancing this project is obviously a key priority for the North America region and team, but also for Barrick as a whole.

So turning to Latin America and Asia Pacific region. Gold production was in line compared with Q2 as planned. Veladero is performing well against its targets with a typical winter seasonal decline, offsetting the record quarterly throughput at Pueblo Viejo. PV performed well in Q3 with processing throughput up 7% quarter-on-quarter, achieving record high throughput in Q3 with the highest quarterly production since 2022. Our focus is now squarely on in driving improved recoveries going forward. So all assets in the region are on track to meet their guidance for the year, including PV's.

Moving to Africa, Middle East, gold production showed the largest quarter-on-quarter increase of all the regions, rising 8% from Q2. On the back of a 15% increase at Kibali, higher open pit mining volumes and grades, uplifted Kibali's processing grade as that operation heads into its expected strong Q4 delivery. Production at North Mara is up 3% from Q2 as both the underground and open pit exceeded expectations, and Bulyanhulu was flat. Regional costs were down across the board, resulting in an impressive 65% quarter-on-quarter increase in attributable EBITDA.

So turning to copper. Production declined slightly from Q2 due to a plant shutdown in line with the plan we shared for Lumwana in September. We expect Q4 copper production to be similar to Q2, delivering annual results for our copper business within guidance.

So as we've discussed throughout this call, Barrick is in good position to deliver on our plans for the year. Shown here, gold production is tracking in the bottom half of its guidance range and copper production is tracking to the midpoint. Also note that the gold production guidance includes Tongon and Hemlo, and we expect to have these sales to conclude before the year-end. Also, after adjusting for the year-to-date higher gold price, our total cash cost in AISC are also tracking within guidance. As you can see, copper costs are already within guidance, and we're expecting Lumwana to report a strong finish to the year.

So before I close, I just want to emphasize that our near-term focus is on safety and operational performance. We will adjust things internally as necessary to create value for our shareholders and deliver on our guidance. This company has a strong portfolio of assets with Nevada at its core. Nevada continues to drive more than half of our production from a low -- sorry, deliver more than half of our production from a low-risk jurisdiction. We have long resource lives and continued opportunity to replace reserves we might. We have some of the best growth projects in the world currently in execution. We have a strong balance sheet that's returning excess capital to the shareholders and funding our growth. And we have an excellent global team of people who are empowered to deliver on our strategy.

As we progress on our operational review, it is confirming to me that the value creation opportunity across the portfolio, especially the potential for North American gold assets in Nevada and Dominican Republic. As I've said, Nevada is a core of our company as it continued to deliver more than 50% of our production with an extraordinary opportunity for growth at Fourmile. We will be unwavering in our focus to drive value creation in Nevada.

So thank you, everyone, for your attention. I'll now hand it back to the moderator for the Q&A session.

[Operator]

[Operator Instructions] Our first question comes from Fahad Tariq at Jefferies.

[Fahad Tariq, analyst]

On the bottom-up operational review at Nevada Gold Mines specifically, can you just give us maybe a framework for what you're looking at or what the team is looking at? And specifically, what is incremental versus the recapitalization efforts that have already been completed, including the new fleet, investment -- reinvestment in the roasters, autoclaves and so on. A lot of work has already been done. So maybe just provide what's incremental in this review.

[Mark Hill, executive]

Okay. Thanks for the question. So look, the operational review is obviously -- we're trying to stabilize and meet more consistent with our delivery through NGM. So we've gone back and we're building those plans up right from the base again. And it's going to incorporate, obviously, the mining, the mining efficiencies, utilization. But it's also going to, more importantly, include our maintenance approach, our planned maintenance. And the expected outcome of is that we don't have these unexpected surprises like we had at Carlin this quarter. So we're just trying to stabilize the operations and make sure we have everything in place so that we can deliver quarter-on-quarter.

[Fahad Tariq, analyst]

Okay. And then maybe as a follow-up, just on the maintenance point. So in the MD&A, it mentions at Carlin, there was excessive scaling in the gold quarry roaster. Is that something that was not captured in the first half maintenance? I believe both roasters had their annual shutdowns in the first half or did the buildup happen after that?

[Mark Hill, executive]

Okay. Look, Henri, maybe you're better positioned to answer that, please?

[Henri Gonin, executive]

Yes, Mark. I'm Henri Gonin at NGM. That buildup of the scaling happened after the shutdown at Gold Quarry and it was unforeseen, but it's been taken care of now.

[Operator]

Our next question comes from Matthew Murphy at BMO Capital Markets.

[Matthew Murphy, analyst]

Mark, congrats on the interim CEO role. Also interested in this operational review, how should we think about what the output of this review might be? Like does this include a review of medium-term guidance? And can you be in a position in a few months to have a different view on that?

[Mark Hill, executive]

Okay. Thanks, Matthew. Well, look, the review is obviously, like I said, so that we can be more confident and we get more predictable outcomes from quarter-to-quarter. And that will obviously feed into the budget next year, and we're not expecting any major changes on that at the moment. But it is just to try and understand where there is opportunities. So even down to the things where we say we have replaced reserves every year, but this review will also include looking at maybe stepping out and drilling and seeing if there's other opportunities that we can find within the portfolio around our current assets rather than just replacing reserves.

So maybe a longer-term goal, but also something we'd be looking at. But the primary focus is to get the planned maintenance in place so that we can make sure we just consistently deliver on our quarterly guidance.

[Matthew Murphy, analyst]

Okay. And then one other follow-up. I noticed in the MD&A that some resequencing of Reko Diq CapEx and just interested in what's happening there and when you might close the project financing?

[Mark Hill, executive]

Okay. Let me hand over to Graham for that, Matthew.

[Graham Shuttleworth, executive]

Matt, we alluded to this even last quarter, but really, it's just a product of the work that we've been doing with Fluor who came on board middle of the year as our EPCM contractor, and they've been looking at the specific timing of when we place orders, and therefore, the follow-on impact of that is just on cash flow. So really, what we've done is we've rescheduled some of the cash flow that we were expecting in '25, and we've shifted it across '26 and '27.

So it's -- there's no impact on the overall project schedule or the total capital schedule. It remains consistent. It's just a timing issue as we move forward.

In terms of the financing itself, we are very well advanced with the lenders. The sort of remaining piece of the puzzle is U.S. Exim, which is an important part of the lender group. Unfortunately, with the U.S. government shutdown, they haven't been able to sign on the dotted line. But as soon as the shutdown lifts, we will be reengaging with them and we still expect to be able to sign that financing by the end of the year.

[Operator]

Our next question is from Daniel Major at UBS.

[Daniel Major, analyst]

Mark, Graham, can you hear me, okay?

[Mark Hill, executive]

Yes.

[Daniel Major, analyst]

Great. Two questions, one on the portfolio, great to see more progress and realizing good value for Hemlo and Tongon. Is there any other potential areas of the portfolio following kind of senior management change, et cetera, that you see as opportunities? And is there any processes ongoing for any other assets in the portfolio?

[Mark Hill, executive]

Well, look, not at this stage. Like as I said at the start, the focus is really on the Americas and at NGM and PV and getting those up to where we need them and delivering on the Lumwana expansion and the Reko Diq construction. So we haven't really focused on anything else at this point. But since September, when I took over.

[Daniel Major, analyst]

Okay. And then maybe two questions on the NGM dynamic. Firstly, with respect to dialogue with the JV partner around Fourmile and potential exploration kind of depth, if we look at your Slide 11 to the right-hand side of the divide between the Nevada Gold Mines below Goldrush and Fourmile. Has there been any update on kind of results within the JV in that zone recently? And how is the dialogue between the 2 parties changed at all? And could that potentially result in discussions around staged vending or Fourmile?

[Mark Hill, executive]

Okay. So look, just to maybe talk to Fourmile for a minute. Now obviously, as you are well aware, at some stage, that will end up in the in the joint venture with Newmont. I mean, Newmont are well aware of Fourmile, and they're well aware of all our current operations as our joint venture partner. But that's not going to be until we finish this drilling, get those declines in place and basically deliver a feasibility study, and then we will discuss how that earnings is going to work with Newmont. And then on the other question, I don't have any update on any more results.

[Graham Shuttleworth, executive]

Yes, there are no material changes, Dan.

[Daniel Major, analyst]

Okay. That's useful. And maybe one final one. Just, I guess, directionally thinking about NGM into next year, would you incrementally expect kind of significantly higher production? Or would it be a flatter profile at a high level in this year? Obviously, I guess, you'll give the guidance for the Q4.

[Mark Hill, executive]

Yes. We'll give the guidance with Q4, but it will be, at this stage, based on what I thought it would be relatively flat, I would have mentioned.

[Operator]

[Operator Instructions] Our next question comes from Tanya Jakusconek at Scotia Capital.

[Cleveland Rueckert, executive]

Tanya. We can't hear you.

[Tanya Jakusconek, analyst]

You can't or you can?

[Cleveland Rueckert, executive]

We can know.

[Tanya Jakusconek, analyst]

Okay. Good. I'm just going to circle back to the review, Mark, that you've been doing. You said you went to visit most of the operations and met with most of the team. And it sounds as though the focus for you is just getting this predictability on the maintenance programs to really deliver quarter-on-quarter delivery. When you did all of this, and I know when you go around and you look at things, did you have to make any management changes that we should be aware of?

[Mark Hill, executive]

Thanks, Tanya. No, look, at this stage, that's not what it's about. Like I mean, the team in Nevada, which you've probably quite familiar with anyway. But look, we have a strong team, but there is obviously some gaps in the planned maintenance and things because we can't keep having things go wrong unexpectedly like we had at Carlin. So I don't think it's about necessarily people changes. It's just about getting those plans in place and making sure they're solid and we can rely on them going forward.

And look, the other obvious -- I just want to bring that in. The other reason I was obviously in Nevada is I was there for the investigation into that fatality because that's the other big priority that we've got to get on top of, which I'm sure you would agree, and put some changes in place to address that.

[Tanya Jakusconek, analyst]

Yes. I was just going to ask, Mark, because that's 3 fatalities is a lot. I was just wondering that as you looked and reviewed the asset bases like are there significant changes to the procedures that need to be done? And is the higher turnover at Nevada Gold Mines, obviously, something that you're going to focus on as well in terms of health and safety and improve productivity?

[Mark Hill, executive]

Yes. So Tanya, I don't think it is a gap in our processes and procedures and standards. I mean we went through this, as you know, in Latin America in 2022 when we had that fatality at PV. And look, what I think it is, I think it's about culture. I think it's about leadership. I think most of those systems are in place, and I think they're solid. And we're just going to have to reset and get everyone on the same page that safety is the #1 priority of this company. And as you'd be aware, the minute we get safety in line, normally, what you see is you see an uptick in production and overall just more efficient operations. But look, let me just hand it over to Graham for a minute as well because he's been deeply involved with this. If he's got any additional comments to that.

[Graham Shuttleworth, executive]

Thanks, Mark, and thanks, Tanya. I think Mark has hitted on the head in terms of the leadership component. And specifically, when we talk about that, I think, is the supervision in the workplace. We believe we need to get more face on with the people underground in the process from our supervisors. And in some of the reviews and the investigations that we've obviously conducted, they've has shown that perhaps some of the supervisors have been burdened with administrative tasks too. So we need to get them back into the field.

I think also on reflection, not only based on these fatalities that we've seen, but I think in the data that we've been collecting over the last while, the better part of 3 years now, I mean you would have seen our total recordable injury frequency rate come down year-on-year but that's contrasted by the number of fatalities we've had in the last couple of years. And clearly, there's been a focus on the lagging indicators and driving that down from an injury perspective. And we've missed something in terms of the hazard recognition, particularly on the fatal risks.

And I think more focus on the leading indicators is key for us. It is something we've recognized and you may have remembered from some of the other presentations that we put together that we have prioritized leading indicators. And one of those programs is the critical control verifications that we would do, which really is engagement in the field with people conducting tasks that have a fatal risk associated with it. And although we've seen a great uptake across the group in excess of 86,000 rather CCVs completed year-to-date. I think what we now have to focus on is the quality of those so that we are ensuring that everyone is learning from them that they're recognizing the hazards in the workplace associated with those fatal risks.

And then I think another aspect that we have highlighted and touched on and debated over the last while is I think our safety team, from a group perspective, although we firmly believe safety is a line function and must be incorporated at a site level, at a group level, we do need a few more resources to drive some of these initiatives and plans to focus on things like the leading indicators, the competency-based training that we've highlighted and getting the supervisors back into the field.

So I think in a nutshell, those are some of the focus areas, but we've obviously got a plan. And as Mark has mentioned, this is our #1 focus for the team, the entirety.

[Tanya Jakusconek, analyst]

Yes. It's good to hear, focusing on the safety. Maybe one last question for me, Mark. It sounds as though you've put the pause, you've hit the pause about not any potential asset sales. I know we previously had talked about maybe Mali was for sale. Has that paused as well?

[Mark Hill, executive]

Well, I think Mali, my focus, Tanya, I don't know the you read some of the reports. But look, my focus is on getting these 4 people out of jails. So that's what I'm working through at the minute. I mean, they've been in Castro now for, what, 11 months. So my focus is on that rather than anything else in Mali at the minute. And if we get that achieved, then obviously, we will look at restarting that operation. As you know, we still have people on site doing the care and maintenance, so we could restart that operation. But the focus is we have to get those people out of jail or my focus anyway.

[Tanya Jakusconek, analyst]

Yes, we hope to get them out as well.

[Operator]

Our next question comes from Anita Soni of CIBC World Markets.

[Anita Soni, analyst]

Hi, can you hear me?

[Mark Hill, executive]

Yes.

[Anita Soni, analyst]

Okay. So I'm going to focus in on PV at first. So previously, Mark, Bristol had talked about the degradation of the PV stockpiles. Could you give us an update on that? And if you've made any progress there and what that could mean in terms of resequencing of stockpiles to be processed earlier?

[Mark Hill, executive]

Well, Anita, yes, thanks. So look, the recovery, as I said, is the focus, right? Because I think we've broken the back of throughput. You would have seen we've had record throughputs at PV now. So it's all about recovery. Actually, I've got Hatch on site at the minute. They're doing an independent review for us as well. And I think there are several moving parts and not being a metallurgist. But what I can say to you, obviously, the handling of those stockpiles, as you pointed out, is absolutely critical. So it's how we blend that feed going into the float circuit so that we can make sure that we don't get wild swings in our recovery throughout the day.

So look, there's a lot of things going on. And I think what we need to do is get real-time data back to the operator so that we can adjust the feed and better control what goes into the float circuit. So I know that's probably not very specific for you, but that's sort of the situation we're in at the minute.

[Anita Soni, analyst]

Just to understand because the second question was actually related to the recovery rates of PV, but seem to be undershooting what you had guided to earlier this year by about 5% or 6%. Are you processing any of these lower grade stockpiles right now? Or is it just the prior -- expected like the prior targeted grades and, I guess, direct ore feed that...

[Mark Hill, executive]

Well, it's a blend of a fresh and stockpile material that we're putting through the plant now. So it's -- as it always has been, it's a combined feedstock.

[Anita Soni, analyst]

All right. Maybe I'll get some more detail from you tonight at the dinner. And then the second question that I had was with respect to the collars. I must say I'm a bit surprised that you guys have put on collars. I think it's about -- I realize it's only about 10% of the production, assuming prior estimates, but 10% of the production over that time frame. But why did you guys put the mine? And why not stay on levered to the gold price?

[Graham Shuttleworth, executive]

Hi Tanya, it's Graham. -- sorry, Anita, apologies.

[Anita Soni, analyst]

You want Tanya, Mark Bristow, or Tom Palmer, which one is even better?

[Graham Shuttleworth, executive]

That's a toss-up. Anita yes, thanks. We -- the collar was put on at a time early in the third quarter at a time of record gold prices associated with a potential strategic opportunity, which ultimately didn't close. I think it's important to realize that as you point out, this is less than 10% of our production. And the top of that collar is over $4,300 per ounce. So at current record high gold prices, we're still fully exposed to these current record gold prices. And to put it in perspective, even if the gold price were to go to $5,000 per ounce, we'd still have 99% exposure to the spot prices. So it's a very small position. It's not something we intend to do going forward. It doesn't -- it shouldn't be read as a change in our strategy with respect to hedging. It was a product of a specific situation, which ultimately didn't transpire, but we're comfortable that those positions are not going to have a material impact on our financial results.

[Anita Soni, analyst]

So now I'm intrigued, this strategic opportunity, was it acquisition or divestiture?

[Graham Shuttleworth, executive]

I think if I was going to tell you that, I would have told you that.

[Operator]

Our final question comes from John Tumazos at Very Independent Research.

[John Tumazos, analyst]

Mark, in terms of the big picture, which of your corporate policies are different than your predecessor? Certainly, we're all on the same page for cost and safety and maintenance, et cetera.

[Mark Hill, executive]

Well, look, I don't think the strategy, John, has changed at all. I mean you've obviously gathered my focus or where I see the most value is obviously in Nevada. So we're going to build out those 2 growth projects we have. But then the next thing, you're definitely shifting the focus to America. And I've already started with that, like we're going to spend more -- a bigger proportion of our exploration as well in Nevada and North America. So I suppose it's not really a shift, but if you ask me where my attention is going to be and maybe there is a little bit of a change, then it will be all the focus we're going to put into North America because I do see a big opportunity there, and I do see that as the next big project and the next big growth area for Barrick.

[Operator]

That concludes our Q&A session for today. Back to Cleve for any closing remarks.

[Cleveland Rueckert, executive]

Great. Thank you, everyone, for joining us today. We look forward to speaking with you again on our full year results call in February. And as always, please get in touch with us if you have any further follow-up questions. Thanks again very much.