20 YEARS OUT: Observations on the Gold Industry€¦ · 20 YEARS OUT: Observations on the Gold...
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Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
20 YEARS OUT:Observations on the Gold Industry
20 YEARS OUT:Observations on the Gold Industry
20 YEARS OUT:Observations on the Gold Industry
Alan R. HillExecutive Vice President, Development
20 YEARS OUT: Observations on the Gold Industry
1983Renabie Camflo
AMERICAN BARRICK RESOURCES
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
20032003Hemlo
Eskay Creek
GoldstrikeRound Mt.
Alto ChicamaPierina
VeladeroPascua-Lama
Bulyanhulu
YilgarnKalgoorlie
Cowal
BARRICK GOLD CORPORATION
20 YEARS OUT: Observations on the Gold Industry
BARRICK GOLD CORPORATION
MeikleMeikle
Betze-PostBetze-PostGoldstrike
8 YEARS + 2 MILLION OUNCES
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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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 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 01 03
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
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
DECLININGPRODUCTION
NEW MINEDISCOVERIES
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
LONGER PERMITTING PROCESSES
§ Open pit permitting and construction
2003 2004 2005 2006 2007 2008 2009 2010
2003 2004 2005 2006 2007
§ Underground permitting and construction
20 YEARS OUT: Observations on the Gold Industry
GLOBAL GOLD MINING INDUSTRY
DECLININGPRODUCTION
NEW MINEDISCOVERIES
TECHNOLOGYADVANCES
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
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
20232023Pascua-Lama
Bulyanhulu
BARRICK GOLD CORPORATION
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20 YEARS OUT: Observations on the Gold Industry
2002 BUDGET $100M BY REGION(millions of dollars)
Nevada11
Peru 35
3Canada
7 Australia
9 Tanzania
Chile/Argentina
22
3 Other10
Corporate Development and other
20 YEARS OUT: Observations on the Gold Industry
EXPLORATION PROGRAM METRICS
§ Cost of Discovery
$3.00/oz.
$12.00/oz.
§ Cost of Replenishment
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
RISING GOLD PRICE ENVIRONMENT
01 03
$500
$400
$300
$200
§ Development projects and mine production which are marginal
- Higher-cost properties- Earnings below cost-of-capital
§ $350 gold required to sustainexploration and yield the best new discoveries
20 YEARS OUT: Observations on the Gold Industry
ALTO CHICAMA PROJECT
7.3moz.resource7.3moz.resource
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
Alto Chicama
500@
$130
270@
$170
530@
$155
800@
$85
Cowal
Veladero
Pascua-Lama
2008200620052005
GROWTH PIPELINE(thousands of ounces @ cost per ounce)
20 YEARS OUT: Observations on the Gold Industry
GROWTH PIPELINE ECONOMICS(rate of return as percent)
14%at $325 gold
8%cost of capital
for each $25 goldprice increase
3%+
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
GLOBAL GOLD MINING INDUSTRY
TECHNOLOGYADVANCES
NEW MINEEXPLORATION
DECLININGPRODUCTION
20 YEARS OUT: Observations on the Gold Industry
GLOBAL GOLD MINING INDUSTRY
TECHNOLOGYADVANCES
NEW MINEEXPLORATION
RISING GOLDPRODUCTION
RISING SPOTGOLD PRICES
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
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
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
GOLDSTRIKE AND ELKO, NEVADA
20 YEARS OUT: Observations on the Gold Industry
PIERINA AND HUARAZ, PERU
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
PIERINA AND HUARAZ, PERU
20 YEARS OUT: Observations on the Gold Industry
BULYANHULU AND TANZANIA
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20 YEARS OUT: Observations on the Gold Industry
PIERINA AND HUARAZ, PERU
20 YEARS OUT: Observations on the Gold Industry
2 302022 3
GOLD MINING INDUSTRY OUTLOOK
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
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 toincentivize mining investment
- Growth in GDP- Employment and training- Social progress- Economic prosperity
Barrick Gold CorporationCordilleran Exploration Roundup – January 2003
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20 YEARS OUT: Observations on the Gold Industry
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.