Q1 2023 Barrick Gold Corp Earnings Call

Participants

Dennis Mark Bristow; President, CEO, Member of International Advisory Board & Director; Barrick Gold Corporation

Graham Patrick Shuttleworth; Senior EVP & CFO; Barrick Gold Corporation

Joel Holliday

Cleveland Dodge Rueckert; Associate Director and Associate Analyst; UBS Investment Bank, Research Division

Greg Barnes; MD and Head of Mining Research; TD Securities Equity Research

Lawson Winder; VP & Research Analyst; BofA Securities, Research Division

Martin Pradier; Investment Analyst; Veritas Investment Research Corporation

Michael Parkin; Mining Analyst; National Bank Financial, Inc., Research Division

Tanya M. Jakusconek; Senior Gold Research Analyst; Scotiabank Global Banking and Markets, Research Division

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Barrick's results presentation for the first quarter of 2023. Following today's presentation, a question-and-answer session will be conducted. (Operator Instructions). As a reminder, this event is being recorded, and a replay will be available on Barrick's website later today, May 5, 2023. I would now like to turn you over to Mark Bristow, President and CEO of Barrick. Please go ahead, sir.

Dennis Mark Bristow

Thank you very much, and ladies and gentlemen, a very good morning to those here in Toronto and, of course, a good day to those around the globe. As you know, we're going to be talking about our results for Q1 2023 today. And I thought I'd start off by just pointing to the fact that as the different global powers seek to extricate the world from the many challenges and indeed, crisis, we currently have to contend with, we have a lot of talking, but don't see much action. Instead of fantasizing about some post-industrial idyllic state, the world's political and business leaders should perhaps be considering a better future for all, not just for the wealthy countries.Â

This requires, of course, investment in the development of sustainable enterprises driven by cleaner energy and extending to the many parts of the world. In fact, most of it, which have been left behind by the West's economics advances. Mining has historically been the catalyst for economic growth in underdeveloped countries. And I would argue that the case for investment in mining in those countries is stronger than ever, particularly as many are rich in the resources required to make the world a better place for all. 

At Barrick, we have always been committed to investing in the future. And in the process, we have created some remarkable value for our broad base of stakeholders. I'll share a few instances of those with you in the course of this presentation. This is the usual cautionary statement, a copy of which can be found on our website, should you wish to study it more closely. 

As guided at the start of the year, Q1 was a softer production quarter due mainly to the major planned maintenance exercises at Nevada Gold Mines and mine sequencing at Kibali. Free cash flow increased despite the lower production, while adjusted net earnings per share also increased to $0.14. Operational highlights included the near completion of the massive Pueblo Veaco expansion project, which I'll tell you more about later, a robust performance from Turquoise Ridge, and the delivery of the first production stopes ahead of schedule from the new Goncato underground mine. 

All in all, we're in good shape to ramp up our performance throughout the year. And I would point out that we are not forecasting a hockey stick end but a stepwise move through the year. We also recently published our annual sustainability report. And if you haven't seen it yet, it's well worth a look, and it's on our website. Group operating results. This is a summary of those operating results, which lists the factors that impacted on production in quarter 1 and those that are expected to drive performance through the latter half of the year. This should ensure we achieve our gold and copper production within guidance as well as the cost guidance we provided at the start of the year. 

Despite the lower production, our high-quality asset portfolio increased free cash flow and allowed us to maintain a $0.10 quarterly dividend, in line with our performance dividend policy. Our tax contribution report was also published last month, which highlights our significant contributions to the countries where we operate. As shared with you last quarter, we experienced 3 tragic fatalities in January. We've taken a long hard look at our safety protocols and practices. And during a weeklong group-wide workshop, we evolved a new approach, which we have called the Journey to Zero. Every one of our corporate and regional leadership teams have spent time at the operations, reinforcing our organizational values captured in our DNA and reminding ourselves that safety comes with caring and committed partnerships where we call on unsafe practices and stop work until we have a safe way to continue. 

Subsequently, we have seen an encouraging decrease in the number as well as the severity of work-related injuries. But as I said, this is a journey we have just commenced and to which we are fully committed to achieving. And it's actually quite encouraging today, to the North American teams, including Nevada, they had their first injury-free April. So that's a good step forward. We've mapped that road to 0, and how you can see the very specific steps we're taking toward achieving that goal. This has been the single biggest focus for the entire company and remains our top priority, with a particular focus on creating a culture where everyone has the responsibility to stop unsafe work practices. 

On the environment front, there was no Class 1 environmental impacts during the quarter. Our water use efficiency rate was again above the 80% target, and our greenhouse gas emissions decreased by 18% quarter-on-quarter. We have continued investing in our communities through our community development committees and embarked on an educational partnership journey with Tanzania, amongst others. On the biodiversity front, the first white rhinos are expected to arrive in the Democratic Republic of Congo soon as part of our mission to restock the species in the country's Garamba National Park, a UNESCO-world heritage site, which we've long supported. As I mentioned earlier, we've just published our 2022 sustainability report, and you can see some of its highlights here. It's worth noting that during the year, we spent $6 billion on goods and services with local suppliers and invested some ZAR 36 million in community development projects in line with our philosophy of partnering with our host countries. 

Moving to the operations. As usual, I'll start the operational review with North America, which, as I've said before, we regard as our value foundation. From our base in Nevada, we've started looking at the potential Tier 1 hosting regions elsewhere in the United States as well as in Canada, with the complex work of combining 2 sets of assets and people accomplished a new leadership in place and a bankable 15-year business plan, the vision we had for Nevada Gold Mines can now be fully realized. 

In Q1, production at Carlin was impacted, as I've already said, by the planned conversion of the autoclave through a carbon and leach process, plus the planned maintenance of the Goldstrike roaster. The focus is now on improving stability and throughput. At Cortez, the emphasis remains on ramping up the Goldrush project, where the record of the decision is now expected in the second half of this year. There is no significant impact anticipated for 2023 production, and the potential impact to 2024 and onwards is being reviewed. 

Turquoise Ridge's performance continued to improve on the back of the first full quarter of production from its recently commissioned third shaft. In Nevada, the safe and efficient drilling ramp-up this quarter returned robust intercepts across all the Tier 1 districts, delivering further resource growth in support of our 15-year plan. With slow receding from the higher ground and a very long winter, we are planning to build on our success at Fourmile by stepping out around the recent Dorothy discovery. As I said last quarter, this is a very exciting area where we continue to discover thick and continuous high-grade mineralization, which we expect will materially enhance the existing Fourmile resource. 

At Turquoise Ridge, drilling continues on extensions of the BBT resource as well as testing between the megapit and the hunt for our high-grade feeder. And on the Carlin trend, bold step-out drilling between Level and Goldstrike is intersecting strong and continuous alteration and local high-grade mineralization worthy of follow-up. Elsewhere, as I pointed out in the beginning, in North America, our exploration is opening up new frontiers, and we've started building a significant presence there. In Western Nevada's Walker Lane mineral belt, we've secured the Pearl String property through an exploration agreement and additional claims taking. 

In Montana, we've staked 100 square kilometers of claims where we've identified a potential target area for both copper and gold. And we are working on other opportunities in other prospective regions in the Western United States. In Canada, we are progressing the PEC project near Hemlo, relogging its historical core to guide modeling and targeting. Also in Canada, we've signed a binding term sheet with Midland Exploration to earn up to 75% of the purchased property in Southern Abitibi. 

We move now south to our Latin American and Asia Pacific region, which had a busy quarter highlighted by the progress at Pueblo Viejo, a prime example of successful value creation by Barrick. And of course, the exciting new Reko Diq project is starting to take shape, which I'll touch on in a little more detail, and I'll update you on our stepwise move towards restarting the Porgera project. At the time of the merger in 2019, you would recall, Pueblo Viejo, a Tier 1 mine, was rapidly nearing the end of its life despite its enormous resources. It simply didn't have the tailings storage capacity to process him. 

We are investing around $2 billion on a 100% basis in expanding and upgrading the operation. And after a long and considered engagement with the Dominican government and the community around the mine, we have identified a site for a new tailings storage facility. The new plant was more than 90% complete at the end of the quarter, and we've started an aggressive commissioning program in April targeted to be fully complete in line with our plan during July. 

As a reminder of what I have said in the past, the existing storage facility can cope with the tailings until 2027, when the new one will have been completed. The project will extend Pueblo Viejo's Tier 1 life by at least 20 years at an average annual production rate of more than 800,000 ounces per year. And its success is a tribute to the partnership between management, our host country, and the surrounding communities. Management also deserves credit for keeping the mine operating efficiently despite the inevitable disruptions caused by construction and the tie-ins. 

Veladero made a promising start to the year, but as I'm sure you all appreciate, Argentina has a worsening currency crisis and import restrictions, a change in fiscal policies almost monthly. And as a result, the operating environment is becoming increasingly difficult. We continue to work constructively with the San Juan provincial governor and his government to try and find solutions for the longer term. Our planned headcount optimization and the higher gold price have somewhat mitigated the operation's negative projections for this year, but there's still a lot of work to be done on the cost profile and the resource expansion to ensure Veladero's long-term success. We have had some recent success with our exploration programs around the operation, most notably at the Morro Escondido target, and we continue to extend the system through drilling. 

A generative exploration review of Central and South America continues to refine key focus areas where ground consolidation is progressing as planned. 5 drill-ready targets in the Austral project in Peru are moving up our resource triangle. And as I've mentioned, we're testing some targets around Veladero as part of our life of mine extension strategy. A high-level project study on the Pascua-Lama project is also scheduled for completion later this year. 

Moving across the globe. In Pakistan, the updated feasibility study on the Reko Diq project is scheduled for completion by the end of next year, with the first production expected in 2028. In the meantime, our social investment program has started with the rollout of the first Community Development Committee and a drive to bring schooling to the region. The first school was inaugurated at the Hami Village, which will provide education for children from the community. And we're also very proud of the fact that the enrollment of the first students was done on a 50% (inaudible) and 50% goal basis, which is a significant step forward in that region. The reconstruction of the runway at the site, which is now complete, will improve access and reduce the need for road transport. 

And the selection of a project engineering partner for the project, both for the feasibility study and later on design and construction, is nearing completion, and some key definition studies are now up and running. As I indicated earlier, and as you may have seen in the press, a new progress agreement was signed in March between Barrick New Guinea Limited, the Papua New Guinea government, and New Porgera Limited. New Porgera Limited has initiated the steps to apply for a new special mining lease, which is a key step to the reopening of the mine. There's currently a lot happening as we progress towards getting this mine up and running.

Back across to Africa and the Middle East. This region finished well ahead of planned gold production for the quarter, setting the scene for another year of strong delivery. As I've said before, if North America is our value foundation, then Africa and the Middle East region is foundational to Barrick's performance. In Mali, Loulo-Gounkoto produced its usual robust performance with the new Gounkoto underground mine, making its first contribution ahead of schedule. Loulo's 40-megawatt solar power expansion project continues to advance, with the commissioning of the first phase expected by the end of this year. And when complete, it is slated to reduce carbon emissions further by a further 63,000 tonnes of carbon dioxide equivalent. 

The Loulo Flame district, which straddles the border between Mali and Senegal, remains highly prospective, and all key structural corridors in the region are being reviewed in the search for the next world-class discovery. At Bambadji and Senegal, drilling has started on priority targets along the 26-kilometer main share zone. And at Loulo, initial drilling on the Gare West corridor has confirmed the potential for a significant but largely untested mineralized structure. 

Across the continent, in the DRC at Kibali, production was in line with planned sequencing and planned maintenance. Grades are forecast to improve from this quarter as development opens up access to new stopping fronts, improving underground flexibility. Like Loulo-Gounkoto, Kibali has a high potential for major discoveries, as has been shown in the past. Exploration continues along the principal mineralized corridor, which still hosts multiple opportunities. Targets currently being advanced include potential underground satellites at Mengu Hill and Warren and new mineralized systems between the KCD Garamba and the Kombokolo Ore bodies. 

And in Tanzania, we have another success story. You may recall that when we took over there a few years ago, these mines were derelict, burdened by major social and environmental liabilities, and with operators despised by the entire country. In very short order, we reinvented the mines, which now between them deliver a Tier 1 production profile, formed a groundbreaking benefit-sharing partnership with the government, and settled the legacy issues. The potency of Barrick's Stakeholder Relations and impact is demonstrated by our recent commitment to invest $30 million in partnership with the government to extend and improve the country's educational infrastructure. 

Also during the past quarter, our growth initiatives in the Africa and Middle East region focused on expanding our footprint in all its Tier 1 districts, as shown on this map, and optimizing our exploration to deliver high-impact discoveries within our existing portfolio. We are reviewing new operational frontiers in West Africa, delivering new projects in Saudi Arabia, and we are developing multiple exploration opportunities across East and Central Africa for both gold and copper. 

Talking about copper, I turn now to our copper operations, which, as you are aware, we are on track to deliver significant expansions. At the time of the merger, Lumwana in Zambia was a doubtful starter. But like PV and the Tanzanian mines, we have transformed it almost beyond recognition. The Super Pit pre-feasibility study, which includes a potential new mill expansion and tailings storage facility, is advancing and scheduled for completion next year. This project could extend the mine's life into the 2050s and elevated to Tier 1 status. In the meantime, we've also reinvigorated our copper belt exploration leadership and begun the transition to an owner-operator fleet for waste stripping at Lumwana, which should deliver a significant cost reduction. 

In Saudi Arabia, in conjunction with our joint venture partners, Ma'aden and the Kingdom of Saudi Arabia, we have received an exploration license for the nearby Uma Demar permit in addition to the Jabal side South permit, and initial field work has started on both these prospects. The 2019 merger was designed to create a business that would deliver sector-leading returns. And as you can see from this comparison with the GDX and spot gold, we've outperformed these benchmarks. Step by step, we have worked to deliver on our strategy that we shared with the market back in September 2018, with just about every objective we outlined then having been fulfilled. 

Today, I'm immensely proud of where we have got to, although we still have a lot more to do with the proven ability to replace the reserves we are mining, we are not reliant on M&A to grow. Our new projects on the horizon should see us grow our production profile, and this affords us the luxury of focusing on our organic initiatives while being able to choose external opportunities when they arise. I believe we have passed an important milestone this quarter on our journey to become the world's most valued gold and copper miner. As I've often said, mining is a long-term game, and the foundation we have laid will ultimately be reflected in the full value of the company. 

So ladies and gentlemen, to finish off my presentation, how some of the key reasons for investing in Barrick. We own what are indisputably the best assets in the business. We have a clear and proven long-term strategy, which we execute with disciplined effectiveness. We consistently invest in our future. Our existing mines support a 10-plus-year production profile, which our organic growth projects will enhance. Our reserves are constantly replenished by our successful exploration programs, which include exploring worldwide for our next major discovery. And finally, we are a leader in sustainability, and our actions in this field produce measurable results that benefit all our stakeholders. In short, at Barrick, we do as we say, and I thank you for your attention, and we'll be happy to take questions starting, I believe, with this people in this room. Thank you, Las.

Question and Answer Session

Lawson Winder

Mark, thank you so much for the presentation today. Nice to see you. I wanted to ask you about some statements you made in an article interview from back in March. I was with S&P. And you made the comment that M&A should only be pursued if the target is stressed. And I wanted to get your idea as to what that stressed means. And further to that point, what type of M&A makes sense to Barrick today?

Dennis Mark Bristow

Yes. So I can't remember that. I'd want to admit about, but it makes sense. So we ever said it. But the point is that, I've always said there are 2 reasons you buy companies. And that is if they're really good assets or they are -- it's a company that has those really good assets and is badly run or inefficiently run. And as you know, and you've seen repeatedly during these times of higher commodity prices and less options, any asset that's half decent gets a big multiple on it. So then you start making a decision not against the asset but your view of the gold price or the assumption the gold price is going to continue going upwards. I mean, everyone in this audience knows that doesn't happen. The gold price goes up and down, not necessarily in that order.Â

And so it does get them down to the synergies and whether you have the ability to add to the opportunity that you're pursuing. And there's an interesting graph we were talking with the exploration team yesterday. If you take -- and I've shown this before, and we can share to you still on our website. But if you look at Barrick in its hay days, its early days, and Randgold Resources, through its entire life, all the M&A we did, and we both did M&A, came with a significant increase in reserves, material expansion on the drill bit and a classic one is Kibali, which had 5 million ounces. We've mined 10, and we've got 10 left. I mean, that's value creation. We bought Loulo with 0.5 million ounces and we've delivered -- we've mined also around 10, and we've got 10 left or more than 10. So 22 million ounces on the back of that first 0.5 million ounces. 

Tongon, we discovered, Morila, discovered. And the classic one is Goldstrike. When Barrick bought Goldstrike, I think they bought like 3 million ounces, and it's produced 33 million ounces. So those are the debates that we have. And if you're really looking to create value rather than gamble, that's the opportunity. And as you know, there's different views in Canada about how to create value. Some people say you can only grow through M&A. And I very clearly say you create value -- the way you create values through the drill bit, adding ounces. Buying them doesn't create value. It might increase your production. And again, if you take some of our peers and you listen to their messaging, and you take my messaging, it's all about sustainable profitability, so then it's about how do you -- what's the acquisition target and what does it do to your profitability? 

Because that's our focus, grow value and not just growth. And a classic example is if you look at our series of transactions in 2019, they were very strategic, driven off the back of a 2.5-year engagement, thorough due diligence, we came out in September 2018 with a clear set of deliverables, including people. If you take Newmont's acquisition of Goldcorp, it was purely opportunistic. And so that's the difference. And I'm not trying to pick on anyone, but there's a different strategy or there's a different business philosophy in one, and there's a very clear business strategy when it comes to Barrick. And so when it comes to M&A, as you know, we have worked and looked at everything that's been put in the market. And we've also looked at many that haven't been put in the market. And we haven't very recently done any. But when you look at the Tanzanian deal and the Nevada deal, that happened very quickly because they fitted all our filters easily. 

And that's the way we'll continue to do it. And very clearly, as you go like -- and this is like 2011. Gold price up, no one's invested. No one's got exploration teams, and so you have to buy. And the people who make the money are the sellers. And so we're -- that sort of doesn't fit our business. You can go to the second one.

Lawson Winder

Yes. I was going to ask one follow-up, and it's Lawson Winder from BofA Securities, by the way. Around the same time, you made a comment that you wanted to see copper grow to 30% of the profitability of the business. I think it's sub-20% right now. So I'd also love to get your thoughts on what are the elements that drive that potentially beyond just the Lumwana super pit.

Dennis Mark Bristow

So again, that's a -- thank you for that question because if you go back in in 2018, we were very clear that if you want to be relevant in this public market of mining, as a gold miner, you're going to have to grow and include copper in your portfolio. And we didn't do it because it's suddenly a fad and somebody is trying to make lots of batteries. We identified it as a very strategic method, as strategic as gold is precious. And so we set out to build that. And the growth sits in Jabal Sayid. We've increased the production there by 50%. It's a completely different mine to what it was in 2019. We've grown its footprint materially with these last 2 deals in a real partnership with Saudi Arabia, where it's 50-50, and we are the operators in a formal structure. And that's not common in Saudi. And of course, you've seen us working with Saudi, and we've spoken a lot about the opportunities that that partnership will bring further into South Asia.Â

And then Lumwana, we looked to sell it initially. By the time we had our first look at it very quickly, I mean, we dropped the mining cost by 50%. And we found a whole lot more pounds in satellite deposits. And what those do is they slightly hire very low strip ratio, they allow us to keep building the profile and strip back the main ore bodies, the 2 main ore bodies. And so that's the sexy part of Lumwana, and that you can keep the money -- you can finance that big expansion rather than go into another negative capital debt. And then, of course, you've got Reko Diq. And Reko Diq is a world-class deposit. It brings both gold and copper production in an organic way. We haven't bought it. It was paid for a long time ago as an early-stage project by Barrick and Antofagasta. But we've now got 50% instead of less than that because it was a shared asset. We're partnering with the country. It's opening up a whole new exploration frontier for us. 

So when you just take that and Lumwana, Lumwana will be the equivalent of our 50% share of the 2 phases of Reko Diq as far as contribution. Lumwana, of course, we have 100%. So you take that, and you take our projects in Saudi Arabia, those are all very attractive and make a big contribution taking us towards that. And if you go back and blend it as a gold equivalent, by the time we get to the end of this decade, just on what we've got, not on what we could get. We increased our gold equivalent production by 20%. And so that's material in this mining industry organically. And as you've seen, we have more ounces today than we started with when we did the first combination, 3 combinations in 2019. 

And that is significant as well in that we are not forced to buy our future production. We've been able to sustain it. We've got more than a 10-year horizon. And again, the geologists were working through us this week, and we've got -- we can show granularity of replacement of the total resource we mine out 5 years now as we've extended our knowledge of our known ore bodies. And all we need -- and we run the risk of finding something now because our geologists are well embedded in these regions. And I would finish by saying on top of that, exploration, which very few people in our mining industry really comprehend anymore, is also a key for mineral intelligence in proper organically driven M&A because you've now got people -- Barrick has 700 geologists, Joel? 200 geologists across the group, that's just exploration, not MRM. 

And in the field, they are highly skilled, they're commercially savvy, and that's another strategic advantage which will materialize with time because it takes time to build that intellectual capital, which is effectively what exploration is. Do you want to say something?

Joel Holliday

Yes. Just to reiterate what we said at our Investor Day in November, we get to 30% copper organically through those 2 projects that Mark talked about in terms of the super pit and Reko Diq by the end of the decade. So we get there without doing M&A.

Operator

Marcus Greg Barnes from TD Securities.

Greg Barnes

You've talked a lot about Argentina and how difficult it is to operate there. And you did mention your comments in your presentation that you're trying to work with the government to help things along. What kind of initiatives can you actually move forward there to.

Dennis Mark Bristow

So in the governor's office in San Juan, I think we've really built a strong relationship. And as you can imagine, it's been difficult because the Argentinian political structure at the moment is completely modeled, and so we've got that stability, but he still relies on (inaudible) for the allocation of dollars. And so we spend an audit amount of time with like the governor of the Central Bank, trying to explain to him, so governor, do you need dollars? "Yes, that's exactly what we need." So we actually print dollars for you. So that loop hasn't completed yet, because what happens is he agrees, but the problem is the central bank is not independent in Argentina. So then some politician in the federal government makes decisions. And it's all about -- and we've seen -- I mean, I'm in Africa, and I've lived through these crises. I mean, Zimbabwe is probably the best, but we've lived through a number of these. And so when you get into that spiral, and I always say, actually, Argentina would do well without the government because it's got all the ingredients of a significant economy. It's got a massive agricultural industry. It's got a mining industry and some oil, and it's got tourism, all dollar-based.Â

But for some reason, people -- and so this is a year of electioneering. What we've done, as you've seen, is we've cut back Veladero. We've cut back on people. We've worked with the governor of the province to create employment positions. So we just haven't arbitrarily cut back, but we've taken nearly 2,000 people out of Veladero. We've delayed the capital into next year. And at the same time, through our construction royalty programs, we've worked with the province to ensure employment on provincial infrastructure programs. So we've been constructive, and the business -- and we've, of course, invested in people, we continue to do that. And it's a different place today, and it's running the risk of being cash flow positive this year because we made those decisions. 

And so we keep -- we haven't got and mined in an irresponsible way. You remember Julian Barry used to say, "If you can't mine gold at a profit, leave it in the ground." And so that's really our philosophy in Veladero. We're mining the gold in a proper disciplined way, in a profitable way. We are continuing -- we haven't stopped exploring because that's the future and the value creation. And again, I go there off in every quarter. And the frustration is at such a great country with really good people. It's got all these ingredients. And politically, it's just in a mess.

Greg Barnes

Maybe a question for Graham. Can you get cash out of Argentina currently?

Graham Patrick Shuttleworth

I can answer that, yes. So we do, and we can, and we negotiate that. But I'll give you an example. And also, as you've noticed, we keep gold in this bulk. So we manage the gold because you don't want to sell the gold and end up with passos that you can't spend. So we really use gold as the ultimate currency. And with the approval of the government, but that in itself doesn't really get anyone out of trouble. And then on top of that, I'll just give you some of the latest regulation is when you buy something offshore, you can only pay for it 180 days later. Now for small companies, that's toxic. For Barrick, we've got a big balance sheet. We've got strong partnerships on the supply side. We can manage that working capital pipeline. But inevitably, it's going to really strangle the mining industry in Argentina.

Greg Barnes

Just a question taking on to Lawson's, and you have quoted this morning about not being interested in Tech Metals but is the competition for copper resources, copper mining companies just too intense and not something that you can compete in?

Dennis Mark Bristow

I think we've got lots of competitive advantages, Greg, as you know, particularly in emerging markets. But again, every potential transaction to Lawson's first point is different. And Tech is not a super producer, but it does have some assets. It's got a really good stake in a partnership in Peru. It's got old legacy assets here in Canada. It's got the new, what's it? QB2 in Chile, and it's got coal. And it's got a lot of debt. So when you look at that structure and Glencore's of intervention, there has been interesting because what Glencore offers that we don't have is synergies, opportunities to really create value. And so I think -- well, I know, from our side, given the current situation, there is no logic for us to get involved in anything like that because we don't have coal. We don't like that, and the synergies in Chile with the Glencore Anglo assets are very real. We don't have anything to offer. But at the same time, we're finding it very interesting to follow the debate because it really is indicating where our industry has got to, given that we haven't invested in our future. Anybody else want to ask a question? Can you ask the post to explain the track to ask questions?

Operator

We will now begin the telephone question-and-answer session. (Operator Instructions) The first question comes from Cleve Rickert with UBS.

Cleveland Dodge Rueckert

Mark, I just wanted to go back. I know you always sort of take the long view, and we appreciate the long-term sort of multi-decade managerial focus. But I really noticed in the press release the -- sort of a little bit of a tilt towards some of the near-term operational work that you're doing on the assets and the improvement that I think you talked about that step-wise increase on quarterly production volumes now throughout the year as the result of the work that you did in the first quarter. And I'm just wondering if -- as we look into 2024 and 2025, there is growth in the plan for both of those years. Should we expect now just that step-wise improvement in volumes to continue through 2025? Or will there continue to be some seasonality in the business as you take maintenance opportunistically or cloud plan?

Dennis Mark Bristow

So let's just deal with the first this year. This year, we're looking at roughly 45, 55. If you take the 4.4 million ounces attributable production first half, second half, roughly. The drivers of that are -- and there's no sudden finish in quarter 4. And I'll just take you through the drivers. So Carlin, we expect to step up in quarter 2. Cortez will be -- you saw a proven quarter-on-quarter. It will be similar in quarter 3. All the rest are already at run rate in Nevada. And then quarter 3 and quarter 4, Carlin and Cortez will be really at a good place operationally. And also, I think a lot of you will understand this. When you do these big transactions, particularly big multiple assets. And we have to get the people right first. And also, remember, it's partly unionized, and we've just done -- we just completed a big CBA negotiation, which is, again, just tells you we bring a different philosophy to these things because the union is working alongside nonunion people. That's a big step in the United States because it's very clearly understood they work for us, but they're represented by their union.Â

And also, we've changed management because we've moved from a more controlled strategy as we've merged the organization. And remember, it was 4-day weeks for management in Newmont. The Newmont assets were behind on their plans. Barrick was obsessed with cash flow and high grading. So culturally, they were different, and also, operational culture was different. And so we brought all that back. And now it's a case -- and I've done this so many times, and when you're climbing the hill, it's like it's tiring. And you have challenges. And slowly, you build a habit, and then you get the habit right. And then you'll see it becomes -- and I mean you guys will -- some of you have worked through it with Kibali when we ramped it up, Loulo as well. None of the mines we started had sort of straight out the block perfect.

And so we're at that stage now, and we've now changed the management as per the Barrick or stroke Randgold model in that we flattened that GMs run the mines, not somebody in the corporate. We build strong people around them. We've got very good GMs now in Nevada. And it's taken some time to build some capacity around. And they are in their own right back. So running it centrally is not -- and I don't like doing that anyway. So now we've got a much better flatter structure. And also, we've had to deal with neglected capital and maintenance. And remember, it was a hostile transaction. So we took it as it came. And we're getting to the point now where we're comfortable with our processing facility. It's still process constrained. Because as we go underground, we go more to double refractory ore. So we're expanding the gold quarry roaster, which was the highest cost, most inefficient of the 2 roasters. 

And so with that, that really grows our profile, as you point out, in Nevada over the next couple of years, gently, but it's an improving profile. And then PV is a big step up back to above 800,000 ounces. And we go straight there almost this year. And what's nice is the front end of -- just to remind you, what we've done there is we've expanded the front end, jacked up our -- put in a concentrator. And really, on that basis, we've kept the autoclave feed the same. But we've changed the whole temperature management in the autoclave, so it can take higher fuel. And we're definitely seeing sort of a 10%, 12% increase in throughput in the autoclaves. And the SAG mill we've put in is enormous. So we've built some flexibility into that operation to be able to -- it's a bit like Kibali, where you can catch up. 

Whereas in Nevada, it's always, unless we've got oxide ore, or heap leach, or the refractory flow sheets is really your bottleneck. And the way we're building flexibility for Nevada now with the new team is we're building some extra flexibility underground because that's the way you do it. And so you open up some ore stocks underground with a little bit more grade in it. And then you manage that so that when you have an unplanned shutdown, you can start up and feed high-grade ore for a while and tidy it up. But then you need to invest in, and that's what we've been doing is putting in that extra flexibility. So those are the drivers that take us to the better second half. And Kibali was the other soft producer this quarter. And that was because we -- at the end of last quarter, remember that quarter 4 was a higher production quarter, and we fed on our stockpile, the high-grade stockpiles from Kibali. So we're building that backup. And then you'll have a very steady run rate for the last part of the year for the last 3 quarters. And when I say it's a different profile to what you've seen this previous couple of years as we stabilize the organization. And AME, as you know, as I said, it's pretty flat.

Cleveland Dodge Rueckert

Yes, that makes sense. And I would say that the work that you've been doing over the last 3 years, maybe it's not clear to everyone and you're getting tired of talking about it, but we're looking forward to...

Dennis Mark Bristow

No, no. I never get tired of talking about it because that's what makes -- and I'll just add a little bit you hadn't asked the question, but again, you look at our policy around dividends, everyone, I mean these last 3 years, we've had the market calling for dividends, Everyone's been paying dividends and then suddenly what. And now you see people still paying dividends outside their dividend policy because the markets being in the table saying, I want some dividends, and we didn't get caught up in that sort of vogue. And our balance sheet is in good shape. And the dividends there, as we promised, and we can afford it. And we'll pay it, and we bought shares back when the share price was down, not when the share price was relatively high, like some of our colleagues or our peers. So you can see the difference in the way we run our business compared to a lot of others in this industry. And that's because we are owners, first of all, as management. And if you -- and I don't have to try and make people owners because they are. So it's a different approach. And we do have a long-term horizon. And I tell you, we will get opportunities. And one thing you can be sure about is when the right opportunity arises, it will happen.

Cleveland Dodge Rueckert

I wanted to ask just one quick follow-up on Porgera. And I appreciate that you are waiting for the mine lease to get approved. What happens after that? I mean, what are -- just quickly, what are the key milestones? Do you have an export license in place? What needs to happen to get Porgera sort of back into guidance and up and running?

Dennis Mark Bristow

So the big one knows ASML, that's what was taken away and issued to Kumon back 3 years ago. But we've all got our head around what needs to be done, and that's the process. We will start the mine up on thermal power as the backup power. We are working with the Hella province to restart the gas power station and hello, that's really what makes -- Porgera is a low-cost high production when it comes to gold project. And apart from that, we have still -- so we have agreed the scope of the shareholding that the landowners get. That has to be ratified through a development forum, but it's not -- it doesn't hold the production up.Â

The production -- the restart is all around the SML. The operator agreement, which we've got, I think, 3 points left on it. And there are a couple of the mine development agreements, is it Mine Development Contract, I think it's called MDC. That's also a document that has to be completed. And we are now working towards -- we've done all the sort of review of all the mobile fleet so that they're operational because we can -- we've cleaned out all the mud from the mine. We're continuing to do that. We have a fleet of trucks in Australia that are sort of very secondhand, but close to new, that we have kept offshore, which we'll bring onshore as we finalize the structure. And that will help with the mining. And then we're doing some rehab on the tankage, the CIL tankage and slowly inching our way to be operationally ready when the SML is approved and get the fine. 

And we're working hand in glove with the government and the MRA, the Mineral Resources Authority. And the other big thing is we're just over 1,000 people unemployed now, we are employing people, and that's one of the big critical parts is getting enough people and up to run it. And dealing with the security around the mine, which is a government thing, and I think we've all landed on that now. But Papua New Guinea is a tough place to operate.

Operator

The next question comes from Tanya Jakusconek with Scotiabank.

Tanya M. Jakusconek

Mark, can you just give me an update as to what's happening with the Goldrush permit? It seems to be getting delayed quarter-over-quarter. So I'm just trying to understand what exactly is keeping up the delay. And then just looking at the mine tour that we did in September, I thought Nevada, that portion of Nevada's old mine production. I think Goldrush was going to be about 100,000 ounces this year on 100% and moving higher to commercial production in 2026. I thought it was about 400,000 ounces or thereabouts. Can you kind of give me an idea of, A, what's happening with the obtaining the permit and B, what sort of production profile was scheduled to come in '24-'25 that could potentially be impacted?

Dennis Mark Bristow

Yes. So this is the challenge of doing business in the United States, a lots of good things about it, but permitting is not one of them. And so there's been some 9-circuate court decisions around permitting just recently. We are not impacted by that in any legal fashion. But again, the BLM have slowed the process down. What I can say is that we've got a very good constructive working relationship with them. We're back on engaged and the EIA is right at a point where it's nearly ready to go to Washington, if it hasn't already got there at the moment, but that is delayed.Â

And as I said in my speech, right now, the delay we can manage. We're still guiding around 1 million ounces, 950 to just over 1 million ounces for Cortez. And Goldrush is embedded and in Cortez, and we manage it that way. And we are looking at whether, if this goes beyond this year, we have had some relief under our hiccup permit, which is the project exploration permit under which we're doing trial mining at the moment. And so that's -- right now, we're looking at where is the critical path and how can we manage and not compromise the infrastructural development and be able to deliver on our long-term plan for Cortez and Goldrush is embedded in that plan, Tanya. So as I said, we are looking at it, we'll let you know. But right now, we have enough flexibility in our operations. And I think that as I've touched on earlier, that's the big thing that I see in Nevada, that it's taken time to put the working capital in to build the flexibility. 

Kibali is a 750,000 ounce producer. It's got lots of flexibility because it's embedded in the business. Same with Loulo, but Nevada never had that, and we are doing that. And I think the fact that we're saying to you the rod is delayed. We're not sure exactly when we do expect it to be this year. But at this stage, we've got flexibility to manage it. That's a new development in Nevada.

Tanya M. Jakusconek

Okay. And so am I correct to think of that $950 million to 1 million ounces at 10,000 of it is Goldrush?

Dennis Mark Bristow

No. It's variable. I think Goldrush will slowly grow to your 400,000 ounces and maybe even higher as we develop it. But we're still learning about those breaches. But right now, the 1 million ounce profile for Cortez is built on what we have banked in the Goldrush project. But we're still exploring. We're still expanding. We're still learning as we drill out the ore bodies. And the nice thing about this is Carlin at $1.5 billion to $1.6 billion, quarters, I mean, it should settle out above 1 million ounces, which is a big shift. You can see. It's never been there. It was there a long time ago, but not recently. And then you've got 500 going to 600, maybe a little bit higher in Turquoise Ridge and then you've got Phoenix. So that's what grows our profile gently over the next 2, 3 years in Nevada, as we've shown you.

Tanya M. Jakusconek

Okay. I think I'll move off that. And just I've got 2 other projects. I just wanted to ask an update on if you could, Mark, can you give us an update on what's happening at Donlin Gold in terms of what you're seeing there and what your focus is for this year and longer term?

Dennis Mark Bristow

So we focused on what we shared with you in quarter 4. Actually, it was quarter 3 last year after our annual September trip. And that is very specific work streams on revisiting and optimizing certain work streams. And one is, of course, the water management and ensuring that we address the issue around protecting the fish in the water way. The second one is the trade-offs that we on power because currently, the plan is to bring gas from a gas field that really hasn't been developed on a gas pipeline that doesn't have a road next to it. So there's work to do on that trade-off. We are doing a series of metallurgical tests and trade-offs on the flow sheet because it's a double refractory ore and whether we can improve the recoveries.Â

And is there another way to process this also? That's part of the trade-off. We've gone back to the mining and the mine schedule as we've improved our knowledge of the ore bodies and now looking at bench heights and equipment sizing and then we can get our head around the costs. And another one is limestone because as you know, when you've got autoclaves, you need limestone. And there's always been talk of calcium carbonate rocks in the area that we need to just check if they are actually usable or where is the closest source of limestone. So there's a couple of these things that could materially change the project. We have also worked hard with our partners because remember, this is owned by the native Alaskans. And both the people who own the surface rights and the mineral rights, but also the whole of all the native Alaskans will benefit from this project. So that's where we are. We are working towards the next review workshop in September again. And after that, we'll be able to update the market. But I just want to assure you that we see this as a significant resource, and we are putting the necessary effort into it to try and get it into a reserve on Barrick's set of filters.

Tanya M. Jakusconek

And you can get that as a reserve when Mark, do you think?

Dennis Mark Bristow

I don't know. I'm still working on it, Tanya.

Tanya M. Jakusconek

Okay. We'll wait for the update then later this year on all of those factors that you're looking at. And if I could just ask, you mentioned high level study coming at the end of the year on Paspalama. Can you just remind me what's happening there, sort of...

Dennis Mark Bristow

So we were instructed to -- basically, the project that was originally conceptualized and designed had a lot of issues, critical issues the way it was designed, et cetera, and also social issues. And when I assumed the role here in Barrick, we went to the government, and we said, let's deal with this because we were lighting up for a fight. And so we agreed to go down and put that permit to beg, just the construction permit. So a lot of the stuff like trenches that put the water or expose the water, some of the stockpiles that were being blown all over the place, and there's a whole lot of other infrastructure. And so we are busy closing those. We're very close to completing that.Â

At the same time, the exploration permit is still very much intact. And so what we've done is we've embarked, and we did some drilling last year, and we've shown that a substantial part of the resource can be processed through standard leaching and/or agitated leach. And so we can do that. We can change the circuit that's already built in the Lama infrastructure. So that's what we've been looking at. And we want to take it to a point where we can demonstrate a potentially viable project, which we can then take back to the governments of the Chile and Argentina and point out the opportunity and then work to get a permitting process going to be able to drill out the model and take it from there. That's where we're going. And I think it's our responsibility to do that to ensure that those countries understand there's value in this, both infrastructure and the resources.

Operator

The next question comes from Martin Pradier with Veritas Investment Research.

Martin Pradier

I want to know, when I look at the cost increases that you have this quarter, there was 16% year-on-year on gold and over 40% on copper. So what gives you confidence? What are the 2, 3 things that give you confidence that you will be able to maintain the cost flat year-on-year?

Dennis Mark Bristow

So Martin, it's all in the production, as you know. So we had a soft quarter, so the costs were up because the production was down. And on a unit basis, that drives all-in-sustaining costs. With the pickup, as I pointed out, if you've got 45% of this sort of 4.4 million ounces, middle of guidance. And then you're going to increase your production to 55% of that. It drives costs, and that's really the biggest driver. Do you want to add to that, Graham?

Graham Patrick Shuttleworth

No, that's spot on. I mean, if you look at the delta in production from Q4 to Q1, you were down about 15%, and costs were up 15%. So there's a very strong correlation there.

Dennis Mark Bristow

You get that, Martin?

Martin Pradier

Yes. If you look at the volumes, we're down 9% compared to Q1 last year.

Dennis Mark Bristow

Back forward quarter 1.

Graham Patrick Shuttleworth

So you can't really look at Q1 last year because that was pre the inflationary pressure that we were experiencing post the Ukraine crisis. So if you remember, last year, we started the year with a $65 oil price assumption. 2022 landed up being close to $100 of actual oil price, and that drove significant inflation through the business last year. This year, when we look at our assumptions for some of those key inputs, we're using assumptions that are based on prices that are very similar to what we actually experienced in 2022. So really, the Q1 of last year isn't a relevant comparison quarter.

Martin Pradier

Okay. But you would say that this is in line with what you're expecting, the cost of the Q1 or it was higher than expected.

Graham Patrick Shuttleworth

Yes. So it's in line because as we indicated at the start of the year, we expected this first quarter to be the weakest quarter, and so we expected costs to be highest in this first quarter. And then as the production steps up, we expect the costs to come down. And as we've reiterated, we expect to meet both our production and cost guidance metrics for the year.

Operator

The next question comes from Mike Parkin with National Bank Financial.

Michael Parkin

Most of them asked and answered, but just a follow-up on Nevada. It sounds like you're doing a lot of good things in terms of getting the management in place that you want. In terms of the more general labor force, how are you tracking relative to filling jobbing and just any kind of overall commentary around the Nevada Gold Mines employment scenario. Is it still a bit challenging like it is in some of the other areas of the world? Are you finding it easing and you're getting closer to 4 employment plans?

Dennis Mark Bristow

So I mean, we made, as you know, a while back, made a strategic decision to not continue to chase ever-decreasing ever aging traditional mining skill pool and to go and invest in younger engineers and skills. And we've been extremely successful in that endeavor. And we've started a focused process, multiple set of processes to ensure that we give those young people the skills and the experience that is needed to go into the workforce. And part of that is I think we had -- they are in 50 job phase or job engagements. What do you call them? 110 this last year or this last quarter? Quarter. Yes. We had 50 job fairs this last quarter. And it's interesting, nearly 50% of young graduates that have joined us this last quarter have never -- didn't know what mining was about until they came for an experience at Nevada.Â

At the same time, we've enhanced our Compass program for like geologists and mineral resource managers and planners and that sort of thing. We now have 3 mining schools or mining training centers. We train for underground. We train for open pit and we're training process. So because United States doesn't have a trade type mentality. So a lot of our skilled people come from the army or have just learned sort of a diesel mechanic skill, but they don't actually -- they're not trained. And so when we bring in those people, we can train them. And it's also part of our initiative to standardize all standard operating procedures across the Nevada business. And I was there just 10 days ago, I spent just over a week there, and we visited these schools. 

And the other thing that struck me for the first time, you're getting 35-year-old, 40-year-old new recruits coming back to work. They're from another industry. So the first signs we're seeing of a tightening labor market. Those are different to the people we're actually targeting, which is the young skills. And again, we've gone all engineers, all financial people. We don't try and go to a mining school because you get a good civil engineer, and we've been extremely successful in attracting young people. I think we've employed about 100 young graduates per month the last 3 months. So just in Nevada. So -- and again, the way we've slowly changed our organogram within Nevada, we are now refreshing our planned headcount because -- so I can tell you that the turnover has reduced materially like, I want to say, 20% Yes. 

And also, now we're saying, okay, we've been operating at plan for a long time as we change the way we operate and how we manage people and more efficient. I mean, we've done some interesting things like introduced childcare from 4:00 in the morning to 8:00 at night. We're looking at multiple people for one job, particularly in the driving side. We're looking at being innovative because -- and it's driven by our commitment to be Nevadan focused as far as employment goes. And again, our percentage of Nevadans and our workforce are significantly up. And I would just -- and so is our local purchase. I mean 80% of all our purchases are now Nevada-based. When I first arrived here, there was like 20%.

So a lot of effort in that. I'm not answering it in real numbers, but as we progress this, but we've certainly got all the arrows pointing in the right directions. And one thing I can tell you is that people that say that young 22-year olds to 26-year-olds haven't got ambition is untrue. And we've got -- and there's a lot -- I mean, we've just employed some of the top students out of the British Columbian universities for Nevada because we went and got them. And so we are seeing and we're excited about that potential because that also will change the way we operate. because that -- I'll give you an example. You take a 50-year-old mining civil engineer or an electrical engineer and ask him to do AI or data lytics. He struggles. Get a 24-year-old young graduate in any one of the engineering fields that they've, it's part of their cost. They're good at it. So that's where this world is going. And just accessing the data points on a big 300-tonne tracked, we've been able to improve our efficiencies. And it's not just about being AR-savvy. You've got to have the full engineering skill to be able to apply it in our industry anyway.

Operator

There are no more questions from the conference call.

Dennis Mark Bristow

All right. Thank you very much, everyone. Great seeing you again. And we'll be catching up with some of you during the next while. And again, I'd just say the team is always available. We are going to see some of you down in Dominican Republic, I believe. So we look forward to that. And again, if they've got any questions, we haven't given you time to ask the teams around and we're all in at the end of the phone. So thank you very much again.

Operator

This concludes today's event. Should you have additional questions, please contact the Barrick Investor Relations department. You may now disconnect your lines. Thank you for participating, and have a pleasant day.