Barrick Posts $1 Billion Charge on Mali Mine

Bloomberg

2 days ago

CC-Transcript
00:00Certainly a surprise that billion charge, you can see that reflected in the shares. What can you tell us about the status and the prospects of that specific mine? It's just an accounting adjustment. It's got nothing really to do about anything. The mine is no longer accounted as a consolidated component of our portfolio. And and we were had to change the way we account for it. And so it moved from operations to an investment doesn't reflect anything on the underlying value or the process that we are busy with to be able to deliver a solution for that operation. On the on the counter, Katie, the the the results were in line and we increased dividends by 50% and we bought back more shares well on track with our billion dollar share buyback program. Production was up and costs were down. All good for a for a gold mine and and certainly at these gold prices, definitely with gold prices pushing to record highs. Mark, I think one of the questions though, is, is yourself and Barrick have this very strong reputation of being able to run mines in challenging countries, let's say. So how do you ensure investors that you continue to be able to do so as the events unfold in Mali? I think that's a very good question. And and sure, we have a good reputation and have continue to be able to find solutions, work together with our host countries to ensure that we split the economic benefits fairly between the host country. And and our business in Mali is quite uniquely different in that it's a junta that overthrew a civilian government. And I wanted to try and push a new body code, in fact, a new body code that they that didn't even align with the moniker that they had approved. And and when you invest in these sort of countries, you expect the sovereign agreements that we undertake and enter into over time to be respected. And we have some dispute mechanisms embedded in our agreements and and we invoke those dispute mechanisms, as we have done in Mali, just like one would do in any normal country. At the same time, it's important to open the channels of communication which we have done and we continue to do. And ultimately we I'm pretty sure we'll come to a solution with respect to this challenge. Mark, And also love to talk about selling mines as well. You take a look at the specific parts of your earnings that charts that we're talking about, that billion charge. It was partially offset by a gain of about $745 million on the sale. 50% of your interest in a project in Alaska. We know that you're trying to sell off a mine in Canada, your last Canadian mine. Where are you on that process? It is a process, as you point out. You know, these things follow a process and we do not speculate or comment on them until the process is finished. So we are, you know, realizing non-core assets in our industry, which is a consumptive industry, is a natural process. And and the flip side of that is we continue to add production and opportunities which we which we have done in Barrick over the last five years. We have we are pointing to a 30% increase in gold equivalent production over the next five years, which will more than replace the the non-core assets sales. And that's a that's a normal process. And we define non-core assets as as assets that are no longer viable within that Tier one definition that we focus in on. They still have value and and the small operation, which they are many of at the moment, given the commodity prices will focus in and and deliver value particularly in a rising commodity price. So that's the the basis of it. And and you would have seen our Ebert earnings, our earnings per share, some of the highest that Barrick's had in the last decade or so. So you know, that's our focus is to keep us really focused on being a leader in sustainable profitability within the mining industry. Market was probably hard to stay focused over the weekend and on Friday I'm sure your phone was ringing off the hook of those looking to you to see if you had any understanding of what was going on with gold. Tariffs might not touch you directly, but I wonder, with tariffs being imposed on gold, we're still waiting to see any sort of clarification. Are any of the refiners you worked with, have they been holding off on taking unrefined gold while they await for that clarification? No. You know, we we ship once a week around the world. We have operations in all four continents except this Antarctic and Arctic. And. And so we we ship gold every week. That's not impacting us, I think. Tariffs. And and, you know, again, because we're a global business, the global logistics and procurement is always a challenge. We manage it all the times and in the greater scheme of things we manage the swings and roundabouts. But it it has made for more dynamic management of our supply chains.