巴里克黃金 (GOLD) 2021 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick 2021 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 later today, August 9, 2021.

I would now like to turn you over to Mark Bristow, Chief Executive Officer. Please go ahead, sir.

Thank you very much, and good day, ladies and gentlemen, and welcome to Barrick's Q2 results presentation. Despite the short spell of value-creating consolidation preceding the pandemic, I feel our industry is still too fragmented and needs to lift its horizon and focus a little more on the future.

We have been living on a rising gold price going back to the turn of the century with not much focus on replacing the ore bodies we mine with similar quality. As I have said many times before, having experienced the last gold price boom without creating any real view, the gold industry, and to be fair, many investors in this sector still cannot resist the lure of instant gratification, which comes at the price of investment in the future and sustainable profitability as we witnessed from 2013 to 2015.

Barrick, on the other hand, has a fundamentally contrarian position. Ours is a long-term strategy designed to manage the industry's best asset portfolio and project pipeline so that they will deliver the best returns to all our stakeholders over the longer term and far into the future.

As I will show you in the course of this presentation, our major mines now all have reality-based 10-year plans currently being refined, and the team's challenge is to look further out to 15 and even 20 years.

Please take note of our cautionary statement as per this slide. And should you need to, it is also available on our website.

At a time when ESG heads market scrutiny of the industry, Barrick has an environmental, social and governance strategy evolved over many years and not freshly contrived to check compliance boxes. It's a central part of the business from managing buyer diversity to board diversity.

Our climate specific strategy is grounded in climate science rather than wishful thinking with ambitious but realistic targets and measurable results, which we report transparently and comprehensively.

Protecting the health and safety of our employees is the central part of this strategy. And while lost time injuries decreased, again in quarter 2, this achievement was overshadowed by the fatality of a contractor's employee at our Hemlo mine in Canada after the quarter end. An investigation into this tragic accident is underway, while in the meantime, we continue to support the family.

On the environmental front, there were no Class 1 incidents during the quarter. We are continuing to maximize our water reuse and recycling rates and are firmly on track to achieve our water efficiency target of at least 80% by the end of this year.

In line with Barrick's flat structure and decentralized management, the group's climate train strategy is being implemented on the ground, with each site tailoring the strategy to achieve the optimal local outcome.

We're continuously seeking new technological developments that can accelerate or enhance these plans. We have also continued the independent human rights assessments we started in quarter 1, with a review of the Kibali operation completed this quarter.

So these are the group's KPIs. And as you can see, we've had a very busy quarter. I'll deal with these as we go along. The actions we took at the time of the merger 2.5 years ago are clearly bearing fruit as evidenced by another sector-leading cash return to shareholders of an effective $0.23 for the quarter, made up of the base $0.09 dividend and the second $250 million tranche of the shareholder-approved return of capital.

While we've created a strong foundation for the achievement of our vision of managing the best assets with the best people to achieve the best returns, Barrick's future very much depends on what we are doing now.

In this regard, I'm very happy to say that on a group basis, we look set to replace the reserves depleted by mining this year with ounces of at least the same quality. We're expanding our presence in new countries within prospective gold fields. And our greenfields exploration programs are identifying exciting new discovery opportunities. It's also gratifying to note that our major capital projects have all made significant progress.

Despite some significant headwinds, we delivered a credible set of operating results. An unprecedented mechanical failure at the Goldstrike roaster impacted the North American region, but Africa and the Middle East and LatAm -- Latin America and Asia Pacific, both performed well and are trending to the higher end of their production guidance, emphatically illustrating the value of Barrick's global presence.

As you will see, at quarter end, we had more than $5 billion in cash on the balance sheet, notwithstanding some significant cash outflows during the quarter. In addition to paying one of the industry's leading shareholder returns in the form of dividends and return of capital, the second quarter is also when the majority of our tax obligations are due and interest on our bonds are paid.

In addition, we made royalty and tax prepayments to support some host countries' COVID campaigns. It's worth noting that our focus on the future, which I will touch on in more detail in the presentation, is not keeping us from rewarding our investors here and now. And it's what all -- what will allow us to keep rewarding them in the future, a strategy that I believe will differentiate us over time.

We'll start our review of the operations in North America. Nevada Gold Mines hosted its first virtual tour during the quarter. And if you missed it, you can still see the detailed presentations on the NGM website. In its short life, Nevada Gold Mines has achieved a great deal. The mines as well as the management have been successfully integrated into a Barrick-style structure. And the company has also launched a series of programs to ensure its recognition as a valued partner to the state and the community.

Nevada Gold Mines and Nevada's mining industry as a whole has cemented that partnership through establishing the mining education tax and excise tax that will go directly to fund education in the state. And this is an example of true collaboration between industry, legislators from both sides and the governor's office.

Across the region, noncore assets within the North American portfolio have been brought to account on the back of the higher gold price, while elsewhere in the region, we are leading the industry and relooking at the way we manage closure sustainably, such as reprocessing tailings at Barrick's Golden Sunlight closure property in Montana.

Nevada is far from being a mature gold province, and there are plenty of opportunities for significant reserve additions as well as new world-class discoveries. In the meantime, both the Goldrush and Fourmile projects are making steady progress.

Carlin had a challenging quarter. No sooner had the annual maintenance shutdown for both roasters been completed successfully, then one of the Goldstrike roaster mills failed, reducing throughput by some 40% for that mill. It is pleasing to share with you that the team rose to the challenge by increasing throughput through the operating mill adjusting all blends and prioritizing high-grade oxide underground ore at the Cortez mill. Repairs on the Goldstrike mill should be completed later in this quarter.

This chart underlines the point I made earlier about Nevada being far from mature as a gold region. Exploration is delivering significant reserve additions, geological model refinements and new conceptual targets, as I will touch on.

At Leeville, resource drilling is returning particularly strong results, as you can see here. It has confirmed high-grade continuity and the potential for connecting adjacent high-grade intercepts. While to the East, a significant intercept has expanded the mineralized footprint. North Leeville is on track to deliver a maiden resource by the end of this year.

Moving to Cortez, which was also impacted by the Goldstrike mill failure, however, it remains on guidance because of the reference I made earlier of upping oxide mill and heap leach production.

Also in the Cortez region, the Robertson project has made enormous progress. The latest work has confirmed its 4 million ounce potential, and we're aiming to complete a pre-feasibility study by the end of this year. The deposits are open in multiple directions as evidenced by the drill results at the distal part of the Robertson project. And new targets have also been generated between Robertson and the world-class Pipeline mine. This is a previously untested but highly prospective area. This is just another illustration of how much we still have to learn and the upside potential that remains in front of us.

The Goldrush feasibility update is also -- was also completed during the quarter, with total initial capital expected to be slightly lower versus the previous studies of estimates of around $1 billion. This study will support the conversion of reserves in the new year and reflects the plan of operations submitted as part of the permitting process. And we expect the notice of intent to be published imminently in the federal register. That then sets the program to be able to expect, and we do expect the record of decision in quarter 4 of next year.

There still remains the enormous potential for future improvement in the project economics from those resources not considered within the feasibility study. And of course, there is Fourmile that lies contiguous to the Goldrush ore body. To put it plainly, the updated study underscores our belief that this is a world-class asset, which more than meets our investment criteria.

The high-grade Barrick-owned Fourmile project can also claim world-class status. And we still firmly believe that the full potential has not yet been reached. It is planned to be accessed from Goldrush for underground exploration work to expand the resource as we shared with you last quarter. And we are currently evaluating the best way to ultimately mine this project.

Turquoise Ridge is probably the Nevada's site with the most upside, but at the same time, the complex, which includes Twin Creeks mines and processing facilities came with many challenges. We've now improved the geology, updated the models and produced a revised high-confidence mine plan on that foundation. Plant upgrades and new investments in underground equipment and ventilation are expected to deliver an improved performance commencing in the second half of the year.

In line with Barrick's clean energy strategy, Turquoise Ridge is currently trialing four 50-ton electric trucks, and as with all state-of-the-art technology, we are working through some teething challenges associated with ensuring the batteries are robust enough for underground working conditions.

Meanwhile, construction of the mine's third shaft remains on time and within budget, with sinking recently reached -- with sinking recently reaching its final depth.

Commissioning of the shaft is expected late next year when the shaft is expected to start delivering on easing bottlenecking by increasing hoisting capacity; providing additional ventilation, which is one of the inhibiting factors in expanding the production out of Turquoise Ridge underground; and of course, shortening haulage distances.

Our focus on quality geoscience and understanding the geological framework and controls to mineralization is delivering multiple targets in the gap between the giant Turquoise Ridge and Mega deposits. Recent drilling validates our model and confirms the potential for significant brownfields discoveries in the area. This really is one of the most exciting prospective areas in the Nevada Gold Mines district.

And then elsewhere in Nevada, both Phoenix and Long Canyon had good quarters. Strong copper byproduct credits drove down costs at Phoenix, while Long Canyon continued to deliver exceptional margins. At Long Canyon, a review to optimize the project is continuing with the current expectation that the mine will move into care and maintenance in quarter 1 of next year.

In Canada, Hemlo's reinvention as an underground operation was impeded by COVID travel restrictions, which have impacted the Australian contractors with whom Barrick has worked very successfully in Africa. As a result, the mine underperformed and is trending to the bottom of its guidance for 2021.

The transformation of the underground continues, however, with mining from a new portal expected to start in this quarter. And in exploration, we are continuing to define potential resource additions, which could extend the mine's life beyond 2030.

Significant progress has already been made in delineating targets, which are outside Hemlo's current mine plan, with recent drilling identifying the E-Zone below the western side of the old open pit. Another point worth noting is that we are fortunate to have the support of our First Nation Partners as we secure the future of Hemlo.

Further afield across the Canadian gold fields, we continue to hunt for new opportunities capable of passing our investment filters. And I personally believe Canada is going to be playing an increasing part in Barrick's future.

At Donlin in Alaska, I am now beginning to be more comfortable that we are starting to get a better understanding of the fundamental characteristics of the orebody or ore bodies and a better spatial resolution where the metals and the ore types are. And this is what will derisk the mine plan and add value to the project. This key piece of work is critical to developing an improved and considered mine plan with which to make a sensible decision as we progress towards updating the 2011 feasibility study.

As an aside, we have an interesting portfolio of study-stage projects. This includes potential world-class projects like Donlin, Alturas, Norte Abierto and Pascua-Lama. While these are all large capital-intensive projects, we continue to chip away and derisk the projects to allow us to make a sensible development decision or find other means to transfer the value to our shareholders.

In Latin America, Asia Pacific region, it exceeded its quarter 2 production target, led by Veladero, which posted a solid performance on the back of improved ore stacking and fresh ounces pulled from the recently commissioned Phase 6 heap leach facility. Costs were also better than planned across the region.

At Pueblo Viejo, production was impacted as expected by the planned autoclave maintenance shutdown, but the mine remains well positioned to achieve its annual guidance. The plant and tailings expansion project, which is designed to unlock 9 million ounces of reserves and extend the mine's life to beyond the 2040s continued with work on the processing plant scheduled for completion by the end of 2022.

Negotiations for the new tailings facility site took a big step forward with Barrick and the potentially affected parties agreeing to an independent government-led environmental impact assessment to be conducted in parallel with our own third-party studies.

Despite the progress that has been made with the expansion project, including our ongoing engagement with local stakeholders to ensure we maintain our social license, there have been some delays to the project time line. There is, however, a cushion built into our plans, and we need the new storage facility complete and operating by quarter 1, 2026.

On the exploration front, work on the Zambrana target at Pueblo Viejo continues to define a 1.5-kilometer long northwest striking target with strongly mineralized rock and soil samples within the mine lease area. The target extends beyond the lease boundary where Barrick owns rights through a joint venture, and we'll drill it out once the necessary permitting process has been completed.

We move now to Veladero, in Argentina, where heap leach processing was reduced in the first half of the year, while the mine transitioned to the new Phase 6 facility. This was successfully commissioned on time in quarter 2 and in line with guidance, supporting a higher-than-forecast production and a solid all-round performance, which is expected to improve further in the second half of the year.

While the exploration focus is on extending Veladero's life, we're also looking at new opportunities between the mine and our nearby Lama project, on the Argentinian side of Pascua-Lama. Drilling in this district has already confirmed an extensive gold-copper mineralized system in the stratigraphically important area between the Pascua-Lama deposit and the Penelope porphyry target near Veladero. We referred to this target, which is shown on this slide as Lama East.

And this is part of a portfolio of identified and very prospective targets, which will be the focus of future work. And there is clearly a significant exploration upside in this district. In fact, we're planning, as we come out of winter, to be able to mobilize a total of around 12 drill rigs in this region.

Meanwhile, stepping even further out, the exploration team continues to generate new targets along the southern part of the El Indio belt. We expect to start drilling in this -- in the district this quarter, now that we have completed the initial phase of mapping, evaluating and prioritizing various targets.

Our recent entry into the Guyana Shield is part of the strategy to expand our exploration frontiers. We've already moved from generative work to consolidating a meaningful land package through a number of exploration earn and transactions in this country.

The Makapa project, which covers a large part of the country's prospective Karouni Basin, bears strong geological similarities to our West African projects, and we'll be applying that expertise as we start to explore in that region.

And across now to Papua New Guinea, where the reopening of the Porgera mine awaits the finalization of various agreements. This follows a signing of a binding framework agreement with the government earlier in quarter 2. The mine is still on care and maintenance, although we have started opening up access to the bottom of the pit and underground workings. We have also started to build up a leadership team in preparation for the commencement of reopening operations, while in parallel, the government is running the community and landowner consultation process.

Further around the world to Africa and the Middle East region, this region delivered its usual robust results and is on track to achieve the upper end of its annual production guidance.

In Mali, Loulo-Gounkoto exceeded its forecast for the quarter on the back of a strong plant performance and kept costs below plan. It also built full-grade stockpiles, which will increase operational flexibility into next year.

A highlight of the quarter was the delivery of first ore from the complex's third underground mine at Gounkoto, in line with guidance.

Yalea Ridge, also part of the Loulo-Gounkoto complex, which is located just adjacent to the Yalea open pit, has recently emerged as a potentially exciting new discovery with results continuing to return impressive intersections. A second phase of drilling is now underway.

The Loulo District remains a highly prospective one. Work on the Bambadji joint venture and the Senegal east side of the border continues. And over the past 2 exploration seasons, we have screened a vast 40-kilometer long area. We believe there is a high potential for a material new discovery or series of discoveries, and we are seeking to consolidate an even larger land position in the district. Across the river, there is an intensified focus on extending the exploration targets to replace mine reserve depletion at both Gounkoto and Loulo.

Tongon in Côte d'Ivoire remained on track to achieve its annual production guidance, thanks to a higher throughput, which compensated for slightly lower grade. Strong results from brownfields exploration points to a high potential for lengthening the mine's life, and we recently received confirmation of a 10-year extension to the Tongon mining lease.

On the Nielle permit, which hosts Tongon, drilling on the Seydou South target has defined a plunging shoot of high-grade mineralization, increasing the possibility of finding new satellites close to the plant. And at Boundiali, a new mineralized target has been identified at Caribou. And we continue to investigate the feasibility of targets being mined and fed into the Tongon plant located between -- or up to -- between about 40 to 70 kilometers away.

Across then to Central Africa and the Democratic Republic of Congo where Kibali's production was well ahead of plan on the back of higher grades, and it is set to achieve the upper end of its annual guidance. The mine remains at the global forefront of automation. And by the way, during the quarter, it implemented predictive maintenance software, which uses machine learning to assist in failure mode identification at its hydropower stations.

Staying with Kibali, 3 targets currently stand out from the exploration portfolio. Deep drilling has confirmed that the folded mine sequence, which hosts the very high-grade KCD orebodies is still in place 500 meters down plunge from the limits of the current resource. I believe this is an amazing orebody, and it still has a lot of pleasant surprises in store for us, I'm sure.

Along the highly prospective KZ-Zone, deep drilling is about to start at Kalimva. Results from recent drilling have confirmed that the high-grade mineralization is not only confined to plunging shoots but there is potential for the down-dip extensions to be mined from underground.

Another interesting target that is currently attracting our attention is the MMR target, which has many similarities to the main KCD orebody. And as you can see here, it's very close to the Kibali processing facilities.

Further East and South, North Mara in Tanzania continued to improve its underground productivity and achieved an optimal blend between fresh underground ore and lower-grade stockpile ore. A further improvement is expected when its new mining fleet arrives in the second half of the year. Incidentally, we have just appointed a Tanzanian General Manager for North Mara in line with Barrick's global policy of employing host country nationals, not only as labor but in key leadership positions.

And at Bulyanhulu, the ramp-up of underground mining and processing operations continued as we bring this long-life low-cost mine up to Barrick's standards. The development of an optimized mine plan continues to advance and a steady-state annualized production is expected next year.

In the meantime, Barrick continues to strengthen its presence in Tanzania. In July, we were granted 19 new permits in multiple greenstone belts across the country. And we await the outcome of our applications for additional ground.

Our copper portfolio again made a significant contribution to Barrick's bottom line. At Lumwana, higher throughput and grade drove an increase in production, and this trend is expected to continue in the second half of the year.

At Jabal Sayid, it also had a good quarter and is on track to achieve its annual guidance as well as more than replace depleted reserves. High-grade ore from newly identified feeder zones points to a material life of mine extension.

Zaldívar is continuing to recover from the impact of Chile's COVID restrictions, but significantly advanced its chloride leach project scheduled for completion in the first half of next year.

As part of the process of expanding our global footprint in pursuit of new discoveries and opportunities, we secured 4 exploration licenses covering over 2,900 square kilometers in Egypt's well-endowed Eastern Desert region. The license areas have been selected for their structural and geological similarities to the world-class Sukari deposit.

When we merged Barrick and Randgold 2.5 years ago, one of our objectives was to create a modern business with a flatter, leaner structure and a highly efficient executive oversight. This has enabled us to cut general and administration costs by more than 30% in absolute dollar terms, while at the same time, increasing revenue.

On any measure, our corporate costs are now substantially lower than our peer group, as shown in this slide. And one of our key fundamental goals at the time of the merger was the creation of real value for our shareholders through improved operational effectiveness and streamlining our business. Here on this slide, you can see how we've achieved these objectives across multiple metrics, from increased cash flow and returns to our shareholders to increase cash on hand and balance sheet strength.

And finally, ladies and gentlemen, as I have often stressed, our strategy is a long-term one designed to deliver sustainable production and profitability at whatever conceivable gold price one can expect.

As we have shared with you at the start of the year, we have a 10-year runway ahead of us, supported by mine and business plans developed at conservative $1,200 an ounce gold price assumption. Although we, as a team, have made good progress, there is still some work to be done to unlock the full potential of Nevada, Pueblo Viejo, Veladero and Porgera. And then there's the pipeline of already defined opportunities like Fourmile, Donlin and the South American portfolio.

After that, it's about investing in our future through our rapidly developing greenfields initiatives, which I firmly believe will add significant value in due course. And while we aim to keep our feet firmly on the ground, we're certainly also keeping an eye on the big blue sky above us.

So thank you for your attention, and we'll be happy to take questions.

(Operator Instructions) Our first question comes from Greg Barnes of TD Securities.

Mark, notably absent from any of your discussion on the press release was any talk about inflation pressures, cost pressures. Some of your peers have highlighted 3% to 5% upside to costs through 2022, but it doesn't appear you're feeling the same pressures.

No, Greg, I think there is some pressure. It depends on your outlook on the oil and gas prices, that's probably up to 1%. If you look at where we are year-to-date, we're tracking against our budget. So if you take the current spot and you project it out to the end of the year, it will add about a 1%.

So overall, if you include the impact of a higher gold price, another 1%. But I think I would -- you know better than me, the whole issue around cost in the gold industry often is more a grade function than a real cost function.

As far as we're concerned, too, the other cost pressures are with steel, as you know. But our big capital projects, we got a little bit of an impact on Pueblo Viejo because of some delays because of logistics, but we've caught up, in that most of the steel for the other projects, including most of the PV steel we already preordered.

We also, when COVID started, increased our stock holding on consumables, and we've kept it up there. And that's, again, in managing that. The other big cost pressure is about the supply chain challenges around the world as the world gets back to or starts to plan to get back to normality. And again, our teams have brought a lot of flexibility. We used to long supply chains out of Africa. We use multiple suppliers. So we've been able to dodge being caught by one supply chain in a major sort of breakdown on logistics.

And also, we've just become so much better at consolidating our shipments. And so all around -- and we're still not, I don't believe, where we want to be. I'm paranoid when it comes to logistics and supply chain management.

And so there's still more to do that -- we've taken out hundreds of millions of dollars of costs in Nevada. We are making real headway in Pueblo Viejo. We still got challenges down in Argentina because of the financial crisis there, the currency crisis, and that whole restriction that we're experiencing. But other than that, all around, and then, of course, there's costs and efficiencies.

So the more efficient you become, everyone's talking about technology and automation and all that sort of stuff. We're really focused on efficiencies. And as you know, we've just started to see the first signs of benefits from rolling out a brand-new data platform and everything that comes with it. And our objective at -- when we merged with Randgold was to really jack up the ability for our management to report on real-time data, and with that comes great efficiency.

So we're just starting to see the benefits of that. We've got, I think, 3 more mines to go, and then we're ready -- and then it's about making sure that we affect the benefits. We've been doing a lot of training to get our managers ready to be able to use -- utilize this new real-time data platform.

So -- and then on top of that, Riaan and his team on the supply chain and procurement side, we've changed a lot of contracts. We've really used our buying power, our muscle around the world to -- and we've built a strong partnership with our 2 big equipment suppliers, Caterpillar and Sandvik. And so all around, I think we're in good shape, and we're definitely not going to use the pressures of inflation, whether it's transitory or real as an excuse. Our job as managers is to constantly look at ways to, and it always helps when you've got high-quality assets to be able to manage that in the gold industry.

But do you think you'll be able to contain that into 2022, Mark? Or is it the precious building as you look out to next year?

Well, I think the key here is you need to predict, tell me what the commodity prices are going to look like. But a lot of the big capital projects that we've got going, we've secured. And so we're in good shape with that. And then I also -- I am worried, and you saw there's so much unknown in the global economy, and we saw this spike downwards on the gold price and other commodities over the weekend.

It's a big reminder for the fact that things go up and down, not necessarily in that order. And so we are not interested in trying to maximize real-time opportunities. Now we are delivering the sort of returns -- industry-leading returns as we announced again today because of what we did on the back of the 2018 merger plans. What we're doing today is really the future, what's going to -- what will the future of Barrick look like.

So we've shown that we can deliver right up there with the best. We don't have to put our orebodies at risk. And we are investing not only in extending our current orebodies, dropping the cutoff grade, increasing the life of mine, maximizing the returns but that we're investing in our future. And so -- and we use $1,200 disciplined and that keeps the focus on cost control and efficiency.

And I would just finish by saying, one of the big challenges in high-price phases of the cycle is this, the exploitation of that high price and the consumption of orebodies. And we've seen that starting to appear in the lower grade, and we're going to see it at the end of the year with the declaration of reserves. So I think that's a big driver. The same in the copper now because these big copper prices mask the mining discipline, the processing discipline of miners.

So we can't complain about anything. We have to run the job with the deck of cards we get fed. And that's -- so there will be inflation, I think. There's so much money around. For me, the big worry is how does the real world deal with what's coming at us. We don't understand the impact of the pandemic on the rest of the global economy. It's been very insulator.

We have no real handle yet on the impact of the developing world and it's prescriptions on climate change without really an engagement with the emerging and developing world. And like I'm concerned that like we saw in 2008, 2009 and the global financial crisis, we really only saw the impacts of that 3 years later. So I think we're in for a couple of surprises, they're not all good ones as much as we want things to look better.

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

So just following on Greg's question, thanks for some fulsome answer there. I think your prior cost guidance had an expectation of a cost decline for next year.

So given that you're looking at a 1% to 2% increase, is that relative to the sort of mid to top end of the guidance range that you've given for this year, which is about $700 to $730, which is kind of where we sit? Or is that relative to the midrange? So basically, I'm asking, can we expect costs to go down year-over-year? Or are we just looking at not as much of an increase as your peers are forecasting?

Yes. I think that's a really good question. And again, I would explain -- I mean you know our business so well. The big driver of that, if we're looking at cost per ounce is exactly the profile of next year. We've got a dip in Nevada, which will impact our costs. But our forecast is based on that dip.

We've got Pueblo Viejo that we're bringing into production next year. So it's exactly how the team can actually stick to the plans, and we're busy with those plans right now. And then we're bringing Porgera in. And we had always planned to bring Porgera in at -- next year. And so that comes initially with a higher cost per ounce, but just because of the start-up costs.

But other than that, all the other mines are looking good. And again, Goldrush, once we get that into production, which is, as we said, the record of decision is expected next year -- end of next year. So again, that helps in our plan to keep the costs going down. So Anita, the answer broadly is our trend is down. Graham, do you want to add to that?

The only other comment I would point out, Mark, is just that the guidance for 2021 was based on our budgeted price of gold of $1,700, whereas in our 5-year planning for 2022 on as we use $1,200 gold. So when we come to update our guidance for 2022, we'll probably move it using a higher gold price, something that's closer to spot, and that does tend to push the prices up just because of the impact on royalty and mine site costs.

Which is a nice problem to have. That's a good point. Thank you, Graham.

Our next question comes from Mike Jalonen of Bank of America.

Mark and Graham, I just had a question on this government-led strategic environmental assessment for the mine life extension project, which is, as you mentioned, Mark, in parallel with your own studies. Who -- what will this -- is this like a committee or a panel of independent people that will be appointed to it? I just wanted to get more detail on that.

So under the -- and we follow the international guidelines on tailings dams, as you know, and the consultation process for interested and affected parties as well. And so we've gone through a process as Barrick, we've looked at some 22 different sites.

We've narrowed that down to now 2 sites. And in any of these processes -- and we've started the public engagement on these sites. We started an informal engagement in 2020. And then from the beginning of this year, we started the public process, and you would have seen that because of all the press that comes out of that sort of consultation.

As has always been the case in Dominican Republic, there are a few -- a handful of detractors that make a lot of noise. And so Pueblo Viejo is very important to the Dominican Republic economy. Just to give you a feel for it, if you just average its contribution towards the corporate tax for Dominican Republic since 2013 to the end of 2020, it was 18% of all corporate tax. So it's very material, as you can imagine.

And so the government -- again, we didn't want to end up in a fight. We really do believe in proper engagement. We were starting to run into detractors that were taking the law into their own hands. And so in cooperation with the government, we engaged, and we attempted to find out what the real worry was. And the worry, as in most cases, is about the impact of environment, the safety of -- and security of the environment when you build such a big storage facility.

And again, for full disclosure, Rosario is the original owners of PV in its small former life, and they left enormous unaddressed environmental hazards and pollution. And part of the acquisition Barrick committed and has cleaned up that environment, and we're in line with international standards.

So we agreed with the detractors that the best way to give them comfort is that the -- we, of course, are going to do our own third-party studies, and they really revolve around biodiversity, hydrogeology and hydraulics just for potential leaks and different pumping tests, and then also the water systems themselves.

And we, of course, have -- we have started doing it. We will continue to do it. And we've agreed that the government will appoint an independent global expert to lead an independent study, of course, along the accepted guidelines in assessing such installations and subsequent closure plans. And we will -- of course, there will be -- the government will no doubt compare our work with the independent work.

We have a coordinating committee to make sure that we don't run and diverge in our work and that if there are any issues, we are informed and we will be able to attend to them. And so -- and I think this is -- again, Barrick has led some very innovative engagements in our ambition to become a truly modern mining business. And I think this doesn't disturb us at all. And we are very comfortable with the sites we have finally selected.

And these -- this independent set of experts, consultancy, will also review our methodology on how we investigated and prioritized down to these 2 sites. And normally, under the protocols, we would end up selecting one. But because of the commitment to try and make sure that we are absolutely transparent in our process, we've agreed that we'll study the #1 and 2 selection in that process. So I hope that explains it well enough, Mike.

I guess I'm just wondering these global experts, I guess, it will take time to be chosen and their study from site 1 versus...

No. They will -- we are working with the government already. On most of the sites, we have already started the process. We need to get the drill holes in. We've got the drill machines available. We've got 14 holes to drill on the one site, and probably, slightly less on the other because we've already drilled some holes because it actually locates where the conveyor belts transgresses to the first site.

So -- and then we need to get in a full year. And then there's 6 months of modeling, full year of samples and tests and analysis. And we should -- we're happy with our program if we start soon enough. They've selected 5 shortlist people. They have got approval to fast track the procurement, and where this comes under the government policy.

And in the meantime, we are working with the Director Generals and Ministry of Environment to ensure that we start the process, agree on the sites and get into the field and start measuring the fauna and flora as part of biodiversity test. So we're comfortable, and we're in shape. Their job is to make sure that -- and what the detractors are looking for is that there's somebody independent of the interested party being us overseeing this process.

Our next question comes from Jackie Przybylowski of BMO Capital Markets.

I wanted to ask you about your dividend policy. I know, Mark, you've previously talked about how you see commodity prices going up and down, and it's maybe too soon to say. But you've got a strong dividend for 2021. Is there any thought or can you make any comments on whether that special dividend program may be extended to 2022?

So what I'd say is more than likely not, we've said that this year was unpredictable. We had a particular opportunity to return capital on a cost-effective way, particularly for our Canadian investors, and we took that opportunity. And it was the proper opportunity, and it is a genuine return to shareholders. And what's more you'll see now, we were committed to that. A lot of people asked whether it wasn't a genuine move.

Of course, it is. I always remind people that I'm also a shareholder. So we don't do things in a haphazard manner. We promised the market, we'll work for -- to a more defined return of excess funds because that is the debate right now. And we are in that phase of discussing exactly how to do it.

As you know, in Randgold, I was a big supporter of -- and we led ever -- first ever a fixed balance sheet number and then paid the rest out. And so I think we've shared, Jackie, with you all the options. And we'll keep working on it. And I think also one thing is you just need a day like yesterday or today -- this morning to remind you exactly what we're all about. And it's not just about paying dividends. It's also about paying tax. It's about ensuring we have a business that's sustainable throughout the cycles. And it's something we're absolutely emphatic about, and we'll keep that line.

Sorry, can you hear me?

Yes, we can hear you. I think there's a little bit of interference on the line. Sorry.

Yes. Just a separate question. I noticed in your MD&A, you've written like Catherine Raw is going to be leaving, and I'm sorry to see her go. I think she's been a great contributor to Barrick. But you also mentioned in the paragraph that you'll communicate any successor and maybe changes to the regional management structure in due course. Can you talk a little bit about what your thoughts or what your options might be in terms of changing that regional management structure? Do you have anything specific in mind at this point?

So I've Catherine sitting in front of me. We equally share your sorrow. It's a private thing for Catherine. As you can see, she's agreed to stay on until the end of the year and work with me because she's got some strong views, and they're aligned with mine, on bringing women into senior positions; also youth, different perspective.

So we also wanted to respect Catherine's request on timing. We've got plenty of time to work through it. We've got a strong team. Catherine is not leaving behind a big hole. We've a very strong. Nevada is a strong team. So we see the opportunity of being able to bring somebody into that position that really is able to grow into the future of Barrick. And we've got a group of people that I'll be drawing on. We've got our HR people scouring the globe for talent. We've, of course, got internal talent as well that we'll look at.

And so I think it's something that we'd rather do properly than in a rush. And the key for me is one of the things that we need to keep focused on is continuing to deliver on my promise to the market that brings younger people, capable women executives to balance our future leadership of this organization. And that's -- that, I think, will be in the forefront of our minds as we go through this process. I'm sure you'll see Catherine pump up some way in a -- very quickly. She's a very talented woman.

Our next question comes from John Tumazos of John Tumazos Very Independent Research.

Mark, it seems like inflation trends are the highest in 4 decades, maybe more. And it could be a really good time for gold despite today's price action. Given your large cash hoard, do you think it's a better strategy to buy Barrick shares, to buy someone else's shares, to consolidate assets? Or just stick to your knitting where some of the mine projects, Donlin, Creek, Norte Abierto or others could be multibillion dollar? And you might need the cash inside the company?

So John, I guess, not to teach you to suck eggs, the whole game in our business is, one, we want to maintain our relevance within the global markets. And we -- both Newmont and Barrick have demonstrated, if you're larger, you attract generalists on to your register. And we, certainly, have done that, both of us.

And this industry needs consolidation by that very thesis because we saw that led by Barrick's merger with Randgold and then the subsequent consolidation of Nevada and then the takeout of the minorities in Acacia followed by Newmont's acquisition of Goldcorp, the Kirkland Lake acquisition of Detour, the Australian consolidation, both in Australia and across the Pacific. And then everything died because the gold price got so high that no one needed to do anything except sit back and take a COVID rest.

So -- and so we've seen a big gap develop between the 2 leaders in the industry and the rest of the industry. And it doesn't make sense. We're still too fragmented. It still needs consolidation. At the same time, we're not replacing the ounces we're mining with the same quality ounces.

So it's always difficult to seek value. That's why I'm a big proponent of at-market transactions, albeit that if we can get a company early enough, we can offer both its shareholders and our shareholders value creation. But once you get it into the -- get something identified in the heart of promotion, undeveloped projects always peak, never to reach the same peak once they start producing.

So it's a challenge to do that. It's not a good idea to spend dollars on something like that. The last boom ended up with big high-speed accidents all around the mining industry because people did that. So we're mindful of that. We certainly have the experience to ensure we don't do anything rash. At the same time, high-quality assets are worth a lot at any part of the cycle.

And then on top of that, you would have seen me talking a lot about organic growth. It's what I have built my career on. We are -- we've put a lot of money and investment in upskilling our exploration teams, and we're starting to see the results of that. So as I said in the beginning, this is a long game. We are not shy as we've indicated of reacting to opportunities. And at the same time, we're definitely not cutting back on our own investment in our own future.

So I hope that -- and at the end of the day, we would rather reward all our members, our shareholders with some cash value. And if -- the biggest challenge in the gold industry, which is very cyclical, is to determine what the value is, the value often of a share is the value of that moment or that year. And so I'm not -- we -- as a management team and as a Board, we've done buybacks in the past. We will do them in the future. But -- the debate is, is this the right time right now?

Our next question comes from Matthew Murphy of Barclays.

Mark, just a question on Goldrush and the record of decision timing slipping a bit again. At what point does that fall in the critical path? Is it on the critical path right now? And if not, at what point does it become critical path? And like how challenging a permitting process do you expect Goldrush to be?

It's been a long time coming. The delay that we've experienced in the notice of intent is a product of the change in administration, which we've got through, and we've been -- it's been confirmed that it will be published in the immediately -- in the short term. That really sets the program for the record of decision. We're -- the only thing I can say is we've been exploring Goldrush. We have developed into the orebody. We are -- the authorities are completely in sync with what we're doing, and we're managing it against the plan of operations.

And so there's no reason for us to believe that the record of decision won't be forthcoming. We've put some cushion in that time when we say end of 2022, you got your mark on.

I don't know if you want to add anything, Catherine?

Well, only to confirm what you've just said, which is Goldrush has been a long-time coming. We've engaged throughout. It's part of a complex -- the way in which we're developing the orebody takes into account all of the environmental community, native American issues that have been the focus of the new administration.

And with regards to the exploration declines and the exploration development underground, that allows us to be able to ramp up quickly once the record of decision is received. And so at this time, the time line fits in with our 5- to 10-year mine plan. Any further slippage, then we'll obviously have to review that.

Greg, do you want to add anything? We got the whole team here.

Mark, Catherine just covered it perfectly. And the direct answer is it's not on the critical path at the moment, but -- and we expect the record of decision in Q4 next year.

Sure. Thank you. Greg, thank you.

There are no more questions from the conference call. This concludes today's conference call. Should you have any additional questions, please contact the Barrick Investor Relations department. You may now disconnect your lines. Thank you for participating, and have a pleasant day.