巴里克黃金 (GOLD) 2018 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by.

This is the conference operator.

Welcome to the Barrick 2018 Second Quarter Results Conference Call.

(Operator Instructions) As a reminder, this conference call is being recorded, and a replay will be available on Barrick's website tonight, July 26, 2018.

I would now like to turn the conference over to Kelvin Dushnisky, President.

Good morning, and thank you for joining us.

Before we begin, I'd like to highlight that during this presentation, we'll 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 those forward-looking statements.

Our review of our most recent AIF will provide you with a more complete discussion.

I'm here today with our Chief Financial Officer, Catherine Raw; our Senior Vice President Operational and Technical Excellence, Greg Walker; our General Manager of Turquoise Ridge, Henri Gonin; the CEO of Barrick Nevada, Bill MacNevin; and our Executive Vice President of Exploration and Growth, Rob Krcmarov.

Our other general managers and members of the Barrick's team will also be available for questions following the formal portion of the call.

Gold production and cost for the quarter were in line with expectations and we remain on track to meet our gold production and cost guidance for the year.

Catherine will speak to you in more detail about our guidance as well as our other financial results.

Our growth projects in Nevada are progressing well and remain on schedule and within budget.

Henri will provide you with an update on the third shaft at Turquoise Ridge, and Bill will speak to the recent progress made at Cortez Deep South and at Goldrush.

In the Dominican Republic, we made solid progress during the quarter, advancing 3 feasibility level studies for a potential plant expansion at Pueblo Viejo.

Greg will speak to you in more detail about this as well as our other operating results.

Nevada remains a key focus -- key area of focus for exploration program and we're pleased to announce a new high-grade gold discovery at Fourmile following more positive drills results during the quarter.

Rob will provide you with an update on these encouraging results and planned drilling for the remainder of the year.

With respect to the balance sheet, subsequent to the end of the quarter, we reduced our debt by another $629 million, bringing our total debt down to about $5.8 billion.

And earlier this month, we announced an enhanced strategic cooperation agreement with Shandong, further deepening our relationships.

And with that, I'll hand the call over to Catherine to take you through our second quarter financial results.

Thanks, Kelvin.

As Kelvin mentioned, gold production and costs were as expected for the quarter and as outlined in our production release on the 11th.

We reported a net loss for the quarter of $94 million or a loss of $0.08 per share, adjusted earnings of $81 million or $0.07 per share, and operating cash flow of $141 million.

Earnings and operating cash flow during the quarter were impacted by planned maintenance activities at Barrick Nevada and Pueblo Viejo and unplanned downtime at Lumwana crusher, all of which we'll go into more detail in the rest of the presentation.

These factors also have impacted free cash flow which, despite lower year-on-year total CapEx, was negative $172 million for the quarter but remains positive year-to-date.

Project CapEx increased compared to the first quarter and also, to last year, including an increase in spend at Crossroads, the Cortez range front declines, the gold rush exploration declines, the deep south expansion in Barrick Nevada as well as the construction of the third shaft in Turquoise Ridge.

The underlying effective tax rate in the second quarter of 2018 was 48%, partly reflecting the in quarter impact of adjusting our tax guidance to 44% to 46% from 41% to 43%, the result of lower spot gold prices and a change in our first half sales mix.

In the second quarter, we began to implement our next wave of organizational restructuring to get us closer to our vision of a simplified decentralize org structure.

We've reviewed all positions sitting above operations.

We're allocating and eliminating those roles where appropriate and simplifying our footprint.

At this time, we're maintaining our full-year general and administrative expense guidance at the expected savings from these changes are being offset by severance expenses in 2018.

Moving on to Guidance.

As Kelvin mentioned, we remain on track to meet full-year gold production and cost guidance.

Production is second half weighted with costs steadily improving.

We expect third quarter gold production to be over 1.2 million ounces, up from just over 1 million ounces in the second quarter.

We've updated our copper guidance, which primarily reflects the operational challenges in Lumwana in the first half of the year.

We expect copper production to be in the range of 345 million to 410 million pounds at a cost of sales of $2 to $2.30 per pound.

Q1 cash cost of $1.80 to $2 per pound and all-in sustaining cost of $2.55 to $2.85 per pound.

Greg will provide more color on our second half expectations for both gold and copper.

Our guidance for total CapEx remains unchanged with $950 million to $1.1 billion of sustaining capital, and $450 million to $550 million of growth capital, for a total of $1.4 billion to $1.6 billion of capital for the year.

And now, on to the balance sheet.

At the end of second quarter, the company had a consolidated cash balance of approximately $2.1 billion.

Subsequent to the end of the quarter, Barrick completed a make-whole purchase of the outstanding principal of the 2021 note, $629 million, reducing our total debt to just under $5.8 billion.

And to put the scale of our debt reduction into perspective, as of the last 5 years, we've repaid over $10 billion.

And as it stands today, the company has less than $100 million in debt due before 2020 and more than 85% of our outstanding debt matures after 2032.

For more detail on our results, I want to draw your attention to our MD&A., including the earnings and cash flow waterfalls, as well as some new charts on copper and on year-on-year mine variances to help aid people to understand our quarterly results.

I'd now like to hand it over to Greg.

He'll take you through the operational results for the second quarter.

Thank you, Catherine.

In Second quarter, we produced 1.07 million ounces of gold, in line with our guidance for the quarter.

Production was impacted by scheduled maintenance shutdowns at Barrick Nevada roaster and at Pueblo Viejo autoclaves.

We're pleased to announced that both these shutdowns were successfully optimized.

This reflects our focus on increasing the overall availability of our processing facility by consolidating work and extending time between unplanned maintenance.

For example, at Barrick Nevada, the roaster maintenance was completed 18% faster than prior roaster shutdowns.

Gold cost for the quarter were in line with our expectations, with all-in sustaining cost of $856 per ounce, while cash cost was $605 per ounce.

Cost were impacted by planned maintenance, higher fuel costs and the impact of lower ounces sold in the quarter.

Looking forward, we expect gold production and cost to improve steadily over the second half of the year, driven by stronger performance in Barrick Nevada and Pueblo Viejo, as well as the restoration of full production processing capacity at Porgera, much earlier than anticipated following the earthquake in late February.

For Q3, gold production is expected to be around 1.2 million ounces.

At Barrick Nevada, we expect throughput and grade to improve given the completion of the maintenance during the first half, as well as the increased production coming out of Cortez Hills Open Pit.

At Pueblo Viejo, we see transition into higher grades in phase 5 and phase 6 of the Moore pit.

And throughput in quarter 3 is expected to remain in line with the quarter 2 as we complete the second of our autoclave shutdowns for the year.

We expect highest throughput at Pueblo Viejo in the fourth quarter.

On the copper side.

Production for the second quarter was 83 million pounds at all-in sustaining cost of $3.04 a pound, the C1 cash cost of $2.10 per pound.

Looking forward, copper production is expected to improve progressively over the third and fourth quarters, driven by a steady improvement in grade and the crusher reliability at Lumwana, as well as the optimization of the stacking procedures at Zaldívar.

Moving on to our pilot plant expansions at Pueblo Viejo.

We continue to advance the prefeasibility study on a plant expansion that would increase throughput by 50%.

This is designed to include the addition of a preoxidation heat leach pad, a floatation process, along with the additional tailings capacity.

On a 100% basis, this project continues to have the potential to convert roughly 7 million ounces from major and indicated resource into proven and probable reserves, and allow the mine to maintain an average annual gold production of 800,000 ounces after 2022.

We're pleased to announce that in support of this feasibility study, we've completed the construction of the pilot peroxidation heat leach pad.

As noted on the slide, irrigation of cell 1 has commenced and cell 2 is ready for material to be (inaudible).

Moving on to the flotation process.

Similar works for the pilot flotation concentrator has begun, which [leverages] off the existing infrastructure, as shown in the picture at the bottom right.

Next steps for this project is contract tenders for structural, mechanical and electrical works to be completed.

We look forward to providing you with further updates at the pilot test work as we advance the prefeasibility study for this core mine.

With that, I'd like to hand it over to Henri to provide you an update at Turquoise Ridge.

Thanks, Greg.

At Turquoise Ridge, the construction of the third shaft continues to progress during the quarter, according to schedule and within budget.

During the first quarter, we announced that we appointed Thyssen Mining as our shaft sinking contractor for this project and they are now in the process of mobilizing on this site.

Dewatering is underway and advancing according to plan, and the construction of surface infrastructure for electrical distribution and other mine site utility construction are well advanced.

The balance of 2018 will be focused on long lead equipment purchases, collar excavation and we'll install the hoist.

We continue to expect initial production from the third shaft in 2022 with sustained production from 2023 and at an estimated capital cost of between $300 million and $325 million on a 100% basis.

The shaft is expected to increase annual production on a 100% basis to more than 500,000 ounces per year at an all-in sustaining cost of approximately $630 per ounce.

As we discussed at the Investor Day, the future is unwritten for Turquoise Ridge and the near mine exploration represents a key area of future growth potential.

The deposit is open in multiple directions with a wide spectrum of projects, including the Getchell fault and the Bas Pond East project.

[Drilling to date] has continued to expand the deposit for the first hole of the North Zone Getchell program, intersecting 16.5 meters at 16.9 grams per tonne during the quarter.

This intersect expands the mineralization by 120 meters with further drilling planned along that same fault.

Similarly, drilling as part of the Bas Pond East program has extended [known] mineralization to the Northeast by another 120 meters with an intercept of 6.7 meters at 15.3 grams per tonne.

Additional drilling will also continue in this area to the North East.

And I'd like to now hand over to Bill MacNevin to speak about our development progress at Barrick Nevada.

Thanks, Henri.

At the Deep South project, we kept advancing during the quarter, utilizing roadheader mining technology and completed our east decline.

Our west decline is proceeding on schedule and the project is advancing to facilitate mining of the already permitted Cortez Hill [roller zone] and to be ready to support Deep South mine development upon receipt of the permit.

Mining at Deep South is expected to result in production of approximately 300,000 ounces annually, once they're fully ramped up between 2024 and 2028 with expected cost of sales of $650 per ounce.

In July, the project received the Nevada state permits required for mining.

Project permitting is advancing and we expect to draft EIS to be published for public comment in the second half of the year, a record of decision in H2 of 2019.

On to Goldrush, which is one of our most exciting projects, and our development work on the project continues in terms of both exploration and construction.

We're continuing to work on converting the 9.4 million ounces of measured and indicated resources to proven and probable reserves, adding to the 1.48 million ounces we converted in 2017.

We've had more drilling success at Red Hill and the nearby Fourmile area, which Rob Krcmarov will describe in a moment.

We're continuing development of the Goldrush exploration declines, as pictured in the bottom right.

The declines are on track to reach the ore body in 2021 when we will conduct further exploration and improvise a platform for mine development.

Our plan of operations for Goldrush mining project has been developed and we're working with our permitting agency to formally initiate their permitting efforts.

With that, I'd like to hand over to Rob to provide an update of our recent explorations results in Nevada.

Thanks, Bill.

As you noted, Red Hill infill drilling continues to meet expectations and we hope to convert more resources to reserves at year-end.

As you know, this is a prolific district and in combination with Goldrush, we expect will form the basis of the future of Barrick Nevada for decades to come.

In February this year, during Investor Day, I highlighted some of the high-grade gold mineralization in this area.

And in March, for our Q1 results call, I shared more positive results, and today, I'm thrilled to say we continue to encounter some truly outstanding intercepts in our exploration work.

During the first quarter, I highlighted positive geology on holes with pending results.

Well drilling heads encountered grade thicknesses in excess of a 1,000 gram-meters.

We now have concerns of high-grade discovery, actually, with a footprint that is over 600 meters along strike and over 200 meters wide.

And we continue to intercept favorable geology in recently drilled holes.

So the Barrick exploration team has done it again, and what started as 2 drill holes in 2016 has become the discovery that you see today.

In geological interpretation, propriety geochemical methodologies, coupled with structural geology, drilling and other techniques, Fourmile has now advanced to the point where we're increasingly confident that we could have a truly remarkable discovery on our hands.

So based on this success, we've increased our current Fourmile budget to over $10 million, significantly increasing the number of drill holes to complete bold step outs in search of additional high-grade, high-value targets.

So what are we after at Fourmile.

And to be clear, we're not looking to more of the same, bearing in mind that Goldrush is a fantastic ore body on its own.

What we want is even better.

And so our objective remains to find high-grade high-value, and the Fourmile discovery has done just that.

Fourmile is slightly geologically different from Goldrush, and I'm going to explain what I mean by that.

The rocks have been metamorphosed due to the proximity of the nearby intrusion, which helps focus fluid flow.

And this is what we see in other great mines such as Goldstrike.

The mineralization at Fourmile is typically hosted in an intensely sulfurized matrix supported breccia with sharp boundaries, as you can see from the photo above.

The breccia-hosted mineralization is localized in a fault propagated fold here.

It spans multiple stratigraphic horizons and appears to become [pipe rock] at depth.

And you'll note, this is different than the more stratiform nature of mineralization at Goldrush.

Incidentally, the slide shows the detailed results of hole FM18-01D, which is an example of strong and continuous mineralization in sulfurized breccia.

Now let's get to those results.

So the Fourmile area, as pictured above, where we're competing tighter space drilling and SAs have returned to 13 holes to date with 10 of those holes intersecting significant mineralization in 2018.

So that's a remarkable 75% of the drill holes this year.

As you can see in the slide, the intercept speak for themselves.

13.9 meters at 56.8 grams per tonne, 16.6 meters at 71.6 grams per tonne, and 16.8 meters at 57.9 grams per tonne.

And what's more are open to the West where there's plenty of room to grow.

And so these are truly exceptional results.

And so for reference, these grades are well over double the average grades to Goldrush reserves and resources.

This style of extremely high-grade mineralization, typically requires close space drilling for inferred results classification.

As such, we're still on track to deliver and initial modest inferred results at year-end.

It will take time to do sufficient drilling to define the full potential.

In the meantime, bold, wide, spaced, step out drilling continues in the general areas to find more of these high-value assets.

So the Goldrush deposit and Fourmile discovery truly add to the remarkable story coming from Barrick Nevada, and I look forward to sharing more updates from both in the future.

And so with that, I'll hand back to Kelvin.

Thanks, Rob.

So halfway through the year, we're progressing well against our full-year priorities.

We expect gold production and cost to improve steadily over the second half of the year, and we're on track to meet annual guidance.

The organic projects continue to advance on schedule and on budget.

We're really excited about the success of our exploration activity, as Rob just mentioned, and we look forward to updating the market on our progress at Fourmile and on our other programs over the remainder of the year.

And finally, before we close, I'd like to add a few personal comments.

By now, many of you will know that I'll be leaving Barrick to take on the opportunity as CEO of AngloGold Ashanti.

You shan't get rid of me just yet.

I'll be here through the end of August to ensure an orderly transition.

It's really been a privilege to spend the past 16 years at this company.

We have some of the most talented and dedicated people in the industry.

The support and friendship of the entire Barrick team has been amazing, and I couldn't be more grateful for.

Equally, it's been a privilege to work every day for you, our shareholders, and I greatly value the support and trust you placed in us over the years.

Barrick has an outstanding pool of talent with great bench strength and I have no doubt that the company will put the right leadership team in place to take Barrick forward.

I'd like to thank our Executive Chairman and our Board of Directors for their confidence in me.

And I'd also like to thank them and my Barrick colleagues from around the world for their support and friendship.

I'm looking forward to watching and cheering the company on and I hope that I can stay in touch with many of you on the call as well.

That concludes the presentation.

And with that, let's open the call to QA.

(Operator Instructions) Our first question comes from Chris Terry of Deutsche Bank.

My questions are mainly on the strategy side and, I guess, where to from here.

The first one I had is just around the JV with Shandong Gold and how you look at that going forward and what the opportunities are there.

And the second one is just really around the copper portfolio and the recent performance of Lumwana, and how you see that positioned in the medium-term within Barrick.

I'll start and then, Catherine, you can join in as well as Greg.

Chris, first of all, thanks for the question.

I think in regards to Shandong, as we've indicated in the past, the relationship has gone extremely well.

And the benefits of the enhanced agreement, I think, would relate to things like strengthening and continue to strengthen collaboration between our 2 companies; more communication, knowledge sharing.

We'll be looking at other investment opportunities together potentially as well.

We had indicated earlier that Shandong is also doing their own independent evaluation, focusing on the Lama side, Pascua-Lama in Argentina.

That's a high level of evaluation that they're conducting, including looking at possible synergies between Lama and Veladero.

So that work will continue and, again, they're doing that independently.

But you consider it kind of a new level of (inaudible) in the relationship, which is going extremely positive so far.

Greg, do you have something?

I'll just touch on Lumwana.

You were mentioning Lumwana's performance in the first half.

The issue there was the crusher availability impacted severely on the production, and that was a short-term issue.

The site management through Sam has managed that issue and we don't expect that to continue into the second half of the year.

So we expect a stronger performance from Lumwana and returning to [uptake].

Okay.

And just maybe on copper portfolio more generally.

You still looking to potentially monetize some of the assets down the track?

Or have you changed your view at all in the lower copper environment?

Or is it really just going to take for copper to rally and then you reconsider things from there?

Well, you sort of answered your own question.

I think, what we've said at the Investor Day was very much that our views on copper remain the same in so far as we're a gold company that doesn't want to put gold funds into copper necessarily at this time.

But I think, with the strong -- well, up until the first half year, with strong performance from our copper portfolio, our outlook for copper prices and our feeling that the -- our copper portfolio is -- could do with more daylighting to the market.

And I think, at this moment, I would say, we're still just -- again, it's business as usual with no imminent plans.

Just a last one for me.

Any updates on Tanzania?

I think, as we've indicated earlier, the sessions are ongoing.

And I don't think there's much more to add to that at this point, Chris.

We'll certainly keep the market posted.

Our next question comes from John Bridges of JPMorgan.

The -- just firstly, the Fourmile.

Where possibly could you fit that into a production schedule if you were able to fast track it into the sort of Goldrush development?

I'll give that over to Rob.

I don't -- the honest answer is I don't really know.

First, we need to finish scoping it out and then we need to do the various studies.

But obviously, Goldrush is starting in 2022.

And so it'd be sometime after that.

We need to put in a significant amount of development if we choose to go from the Goldrush exploration decline, so that will take some time.

Okay.

Okay.

And then following on -- in Tanzania, is the ACA -- sorry, if the U.K. regulator decides it's a related party transaction that -- or the -- it's a related party transaction and asks -- and Acacia puts the vote as a special resolution rather than an ordinary one, would that be a problem for the Tanzania decision when it finally comes through?

John, I'm going to put that to Rich Haddock, who's here with us.

Rich is our General Counsel and has been involved in these Acacia sessions as well.

At this point, everything we're working on is not a related party transaction.

And if we're able to develop a proposal to put to Acacia, we don't expect that to add to the independent directors, we don't expect that to change.

Okay.

Any new idea on when there might be a proposal for the board at Acacia?

We continue to engage with the government with no artificial timelines on those negotiations.

(Operator Instructions) Our next question comes from David Haughton of CIBC.

I'd just like to ask on 2 aspects, Goldrush/Fourmile being one them.

The other one is PV.

So perhaps if I could start with Goldrush.

Is it your thinking that this would simply be incorporated within the greater Goldrush footprint?

Or are there enough differences between Fourmile met and Goldrush met to make you think a little bit differently on that?

Okay, we'll start -- Rob will address Fourmile, and then Greg will talk about PV.

At Fourmile, my understanding is that we haven't done any metallurgical work but visually the mineralization looks reasonably similar.

It's probably going to be double-refractory and probably going to be [rest of ore] .

Okay.

And I've been hunting around.

I just can't see, maybe it's me, the kind of CapEx that you've been spending for the development on Goldrush so far this year.

Yes, so that's within our project spend.

And also, within the capital within Barrick Nevada site.

So if you read the MD&A, we've got some sort of verbiage on it.

But I'll take your point, you would like more detail on the specifics and at our individual projects.

Yes.

I just -- looking for a breakout.

It's a significant project going forward and worthy, I think, of being broken out at this stage.

Bill, maybe you'd like to comment, if you can, off the top of our head, between the split between Crossroads, Range Front, Deep South and Goldrush at the moment.

Ballpark.

Probably won't be able to just drop on ballpark in terms of spend.

We do have them all broken out, David.

So I think what we can do is give an indication of that in the future.

But like, obviously -- at present, most of our spend is obviously in the more advanced projects with particularly Deep South being at the front, Goldrush is following that.

And the spend profile in the 5-year timeframe drops off from there.

But I'm sure as we continue that fabulous result like this, we'll be looking to spend a lot more on -- in that timeframe for those, particularly Fourmile, all right?

So I think, we can do something in future.

Maybe I could just move on to PV, if you don't mind.

So going through now into phase 5 and 6, you've got access there coming up in second half this year.

And I heard Greg talking about the throughput, flat for Q3, moving up into Q4.

I'm just wondering if you could just give us a little bit of an idea about the throughput trajectory that we should be thinking about, and the sort of grades that we can anticipate coming out of PV.

Thank you, David.

The reason PV throughput is (inaudible) in Q3, I said similar to Q2 is because we have 4 other (inaudible) realigned, too, in Q2 and although, the other 2 in Q3.

So the production won't improve -- won't increase in Q3.

It will return to full production rates in Q4.

So we choose a rate of 7.9 million to 8 million tonnes per annum.

The grades you can expect we go into, we move back into grades of around 4 to 4.3 grams per tonnes will be the grades in the second half of the year.

And should -- with this maintenance schedule, should we be thinking frequently about Q2, Q3 as being soft periods for maintenance?

Because the schedule is not an annual schedule, it rolls on about 10 to 11 months.

So it moves.

So that number will move next year.

It'll be more likely moving into Q1 and Q3 rather than Q2 and Q3 -- sorry, Q1 and Q2 next year, sorry.

And -- sorry, go ahead.

Greg.

No, I was just going to be repeat there.

Okay.

So the heap leach looks quite interesting.

I presume that you're only really going to be capturing gold out of the heap leach, because you'll just irrigate it and then just -- I presume you put the pregnant liquor through the back end of your plant there.

Can you provide just...

David, that's not correct.

Please explain.

The peroxidation, we're actually oxidizing sulfur, we're not recovering gold out of that circuit.

So effectively, we're washing sulfur out of the ore and then we'll pick that material up and put it through the normal process.

What it does is it allows us to reduce the amount of sulfur going through the autoclaves, which will allows us to process higher sulfur grade material than previously able to using the limited oxygen we have in the autoclaves.

And assuming that this pilot works to the extent that you'd like it to, when could you see it going into a full scale?

As we said, we're running a prefeasibility, which we should have in around Q3, Q4 next year.

From there, we'll move forward and we're looking at in Q4 2021 having the -- a full-scale peroxidation up and running.

Okay, great.

And Kelvin, before I leave you, best wishes for your new role at AngloGold, which I've also covered for 20 years.

So our paths will be crossing again.

Well, thank you very much, David.

I appreciate that.

Our next question comes from Carey MacRury of Canaccord Genuity.

Just wanted to see if there's any color you're looking at increasing potentially processing capacity in Nevada.

Just wondering what your potentially looking at there.

I think, for that Bill MacNevin.

Bill, if you're on the line still?

Yes.

Carey, as we put out there, we're doing work at the moment.

We're in the middle of a prefeasibility study, assessing the different options.

We're excited about what we're working through and we're seeing some very positive results, so we expect to be putting something to present in Q1.

So I think, it'll take until then but we're really excited about the potential we've got.

So we are doing that work at present.

And this is expansion of roaster capacity, I presume?

Carey...

We're looking at the different options and that's looking at things most preferred.

And Carey, the ore that we're looking of going forward, as Rob said.

Most of it is refectory so we'll be looking at either autoclave or roasters.

So you're correct.

Okay.

And then, secondly, I understand that you've -- your concentrate in Lumwana had what looks like decent amount of cobalt in it.

And I'm just wondering where cobalt prices are or is that something that you looked at potentially recovering?

No, we haven't looked at in the past.

But now that you raised the point, we might look at it but it's not on our horizon.

I don't think we'll be looking at it.

We'll be generally looking at processing of our concentrate and considering what our options are over the course of this year.

So we'll provide more information on that.

Our next question comes from Stephen Walker of RBC Capital Markets.

Just a couple of questions on strategy as part of the Q2 severance expense of $30 million.

My understanding is the projects team and head office no longer exists with individuals moved to other offices or employment terminated.

I struggle with this a little bit.

And I guess, my question is, these teams are generally provide oversight directly to head office for major projects.

Can you talk a little bit about the rationale for not having the projects team at head office?

And does that imply that, a, there's no Greenfields project expected of any significance in the pipeline?

And, b, M&A becomes a higher priority if you're looking at bringing on additional production at some point?

Stephen, thanks for the question.

The difference between projects and technical services, we've -- our projects team per say we haven't had a full-blown projects team in Barrick for some years.

What you are talking about now is the technical services and the governance support team from a technical perspective.

That team still exists in Toronto, we have reduced the number of people in that team but we still have oversight for all of the technical functions in our Toronto office, mining, mill, maintenance and in capital projects.

These roles will be decentralized and moving out to our Nevada office in Henderson.

They'll still be supplying oversight for the company.

So we still have those functions available and we still use those functions.

They're not only just for oversight and governance but also technical support.

So -- and also, we are phasing up the skills and the ability of our mine sites.

Our mine sites and our Brownfield projects are being run by the mine site CFO -- CFOs and the CEOs, but we still have oversight from Barrick.

That's helpful.

And maybe as a follow-up question.

In the recent announcement about the strategic cooperation agreement with Shandong, clearly, that's advancing at various stages and various levels.

I guess, my question is, is it conceivable that Barrick could end up with an operating joint venture in China or a development project in China?

Is that something you foresee?

Or is this mainly a focus on the Americas?

I think, at this stage, that's not what the agreement implies.

So the 2 things, I think, that are most important from the agreements that, I think, people should be focusing on from that agreement is, one, the Lama evaluation study; and two, our commitment to act as a partner and help Shandong create a mine of the future.

And so what we're doing is working together, we're leveraging off what their technology and advances are and the research and development they're putting into their own mines.

And they're obviously, leveraging off of the work that we're doing to innovate and to move our mines into the 21st century.

So really, those are the 2 elements of the partnership that have moved to the next stage.

We have always worked closely with our partners on any potential projects, assets, sales or M&A, just as you would with any partner, whether you have an agreement or not.

It indicates a level of trust.

So I just want to give you that sort of context, so as to not answer your question directly, but really say that that's what the partnership agreement is supposed to give out.

Our next question comes from Anita Soni of Crédit Suisse.

I just wanted to get an idea of how you see Kalgoorlie.

So Newmont has put out a revised mine level production guidance this morning and I'm just wondering how you plan to offset that to production mine at Kalgoorlie?

Greg?

Thank you for that, Anita.

The full impact of the wall slip at KCGM is just -- as you said, Newmont put out today their guidance and their plan.

We're working closely with Newmont.

As you know, Newmont are the managers of that JV for -- on our behalf.

So we're working through them.

We have built -- we had already built into our second half forecast some of the impact from that wall slip, and we're now building the reminder of that impact into the wall slip.

So even given that loss of ounces at KCGM, we'll still be within our guidance limits for gold -- for our gold production for the year.

And I would also highlight that we -- the benefit of having a portfolio, you will see we've made changes across our gold mines to still end up at the same place.

That really is the strength of Barrick, is that we can have these external factors hit us, whether it's earthquakes, whether it's our nonoperated joint ventures and still be able to meet our guidance, and I think that really illustrates the strength of our portfolio.

I understand that's the last question.

I know it's a busy morning with many earnings calls, so operator, thank you very much.

And we'd like to thank everyone who dialed in today, and I know that my colleagues, who look forward to updating you on our progress during the Q3 call in October.

Thank you very much.

This concludes today's conference call.

You may disconnect your lines.

Should you have any additional questions, please contact the Barrick Investor Relations department.

Thank you for participating, and have a pleasant day.