Barrick Gold Corporation (NYSE:GOLD) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
Barrick has shown strong financial performance with increased free cash flow, EBITDA, and operating cash flow. The company is maintaining its dividend and has a robust share buyback program. Despite operational risks and fatalities, the management's strategic focus on safety and project financing is reassuring. The Q&A section highlighted confidence in managing costs and maintaining growth, with no significant risks identified. Overall, the combination of positive financial metrics, strategic investments, and proactive management responses suggests a positive stock price movement.
Key Financial Performance
EPS Reported EPS is $0.46, unchanged year-over-year.
Adjusted Net Earnings per Share Grew 50% year-on-year to $1.26.
EBITDA Increased 30% year-on-year.
Operating Cash Flow Up 18% to $1.4 billion for the quarter, total for the year is $4.5 billion, the highest since 2020.
Free Cash Flow Increased 104% year-on-year to $1.3 billion for 2024.
Quarterly Dividend Maintained at $0.10 per share.
Share Repurchases Repurchased an additional $354 million of shares in Q4, totaling almost $500 million for the year.
Gold Production Increased 15% quarter-on-quarter.
Cost of Sales Reduced by 3%.
Total Cash Costs Decreased by 5%.
Net Debt Remained in line at just over $650 million.
Gold Reserves Replacement Added 12.7 million ounces of gold reserves.
Copper Reserves Replacement Added 13 million tons of copper reserves.
Cash Contributions to Malian Treasury $460 million in 2024, $400 million in 2023.
Production Increase at Kabali Production increased quarter-on-quarter.
Production at North Mara Up 20% quarter-on-quarter.
Production at Lemona Posted a quarterly production record.
Production at Valadero Delivered its best production results in the last five years.
Cost of Puerto Rico Reported cost was 14% higher despite only a 5% increase in production.
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Operating Highlights
New Product Development: The Four Mile project is moving towards a prefeasibility study with an allocated budget of $78 million for 2025, expected to take three years to complete. This project is an extension of Gold Rush with larger ore bodies and higher grades.
Market Expansion: Barrick Gold is expanding its footprint in priority belts across the western United States for both gold and copper assets, including ongoing consolidation in Western Nevada.
International Expansion: In Latin America, the Pueblo Viejo expansion is progressing, and the bankable feasibility study at Riccardic has been completed with conditional board approval to proceed.
Operational Efficiency: Quarterly gold production increased by 15% with a 3% reduction in cost of sales and a 5% decrease in total cash costs, driven by cost efficiencies.
Safety Improvements: Despite three fatalities in 2024, there was significant improvement in safety metrics, achieving goals for the group.
Strategic Shifts: Barrick Gold is focusing on organic growth, targeting a 30% increase in gold equivalent ounces by the end of the decade, supported by strong cash flow and share buybacks.
Partnerships: A memorandum of understanding was signed with the Zambian government to drive mining and exploration in Zambia, aligning with the country's vision to increase copper production.
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Risk or Challenges
Regulatory Issues: Barrick Gold Corporation is facing challenges in Mali due to export restrictions imposed by the Malian government, which have significantly impacted gold sales. Additionally, the company is dealing with the unjust incarceration of some team members, leading to a complex situation that requires ongoing negotiations with the administration.
Supply Chain Challenges: The company is experiencing difficulties in Mali, where production has been affected by government restrictions, impacting the supply chain and operational continuity.
Economic Factors: The financial contributions to the Malian Treasury have been substantial, with $460 million in 2024 alone. However, the ongoing negotiations and potential changes in the regulatory environment could affect future contributions and operational viability.
Operational Risks: Barrick Gold Corporation has reported three fatalities in 2024, which raises concerns about safety and operational risks. The company is focused on improving safety measures but acknowledges the unacceptable nature of these incidents.
Project Financing Risks: The Rickardek project has a total estimated budget of approximately $5.6 to $6 billion, and the company is in discussions for limited recourse project financing. The success of this financing is crucial for the project's advancement.
Market Risks: The company is navigating competitive pressures in the gold and copper markets, with a focus on maintaining a strong balance sheet and avoiding excessive debt or share issuance.
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Guidance & Outlook
Sustainability Commitment: Barrick Gold Corporation emphasizes its commitment to sustainability, aiming to be the best gold and copper producer while ensuring long-term value creation.
Reserve Replacement: The company reported a successful reserve replacement for both gold and copper, adding 12.7 million ounces of gold and 13 million tons of copper reserves.
Four Mile Project: Barrick is allocating $78 million for the prefeasibility study of the Four Mile project, which is expected to take three years to complete.
Expansion in Nevada: The company is expanding its brownfields portfolio in Nevada, focusing on growth opportunities in the Carlin and Cortez areas.
Pueblo Viejo Expansion: The Pueblo Viejo expansion is progressing well, with a target of exceeding 800,000 ounces of gold production next year.
Rick O'Deck Project: The Rick O'Deck project is expected to have a total estimated budget of approximately $5.6 to $6 billion, with first production targeted by the end of 2028.
2025 CapEx: Barrick Gold Corporation expects capital expenditures to increase over the next three years before returning to normal levels.
Gold Production Guidance: The company anticipates gold production in the mid-600,000 ounces for 2025, with a target of exceeding 800,000 ounces in 2026.
Free Cash Flow: Free cash flow is estimated at around $74 billion over 36 years for the Rick O'Deck project.
Debt Management: Barrick aims to fund its growth and capital commitments without issuing new shares or taking on additional debt.
Long-term Growth: The company forecasts a 30% growth in gold equivalent ounces by the end of the decade.
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Shareholder Return Plan
Quarterly Dividend: The quarterly dividend was maintained at $0.10 per share.
Total Dividends for 2024: Total dividends for the year amounted to $700 million.
Share Buyback Program: Repurchased an additional $354 million of shares in Q4 2024, totaling almost $500 million for the year.
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Key Q&A
Q:Is there any sort of fundamental changes in how the assets are being evaluated or is this maybe reflecting some conservatism versus what the prior November budget was?
A:When we shared the graphs in November, they were not meant to be precise but directional. The changes reflect some small adjustments due to business changes since November, including the slowdown in Lulu and other portfolio changes.
Q:Is there any kind of status updates on Recodeq and the outlook for Pakistan to fund their portion of CapEx?
A:There’s no risk of Pakistan not being able to fund its share, as they have been funding it up until now. The investment from Saudi Arabia is significant, and we are strong partners with both Saudi Arabia and Pakistan.
Q:Has there been a change in the accounting rules regarding the write down on Lulu of Makoto?
A:We are required to look for signs of impairment, and the engagement in Mali triggered a review of the holding value. We don’t expect to review it every quarter unless there’s a material change.
Q:Can you clarify the capital outlay for 2026, which seems different from previous guidance?
A:There have been changes in the timing of capital spending, but the total numbers for the projects haven’t changed. It’s just a shift in the timing of the spend.
Q:What is the critical path for the relocation program at Pueblo Viejo?
A:We have until 2029 to have the starter dam functioning, and we’ve built flexibility into the project.
Q:Can you provide a breakdown of the CapEx guidance for Lomaana and Reykjodik?
A:Approximately a billion dollars for Reykjodik and about 0.6 billion for Lomaana.
Q:Will the Mali situation impact the project pipeline funding decisions?
A:We’re very comfortable with our current position and can manage the situation without impacting our growth trajectory.
Q:Do you see costs stabilizing and margins increasing?
A:Yes, we are managing costs and forecasting a decline in sustaining capital requirements, which will improve margins.
Q:Would you consider acquiring smaller exploration projects in Canada?
A:We are heavily invested in exploration in the US and Canada, and we are always looking for new opportunities.
Q:Review of Unclear Management Responses
A:Management appeared to avoid giving a direct answer regarding the specifics of the Mali situation and its potential impact on project funding decisions, as well as the exact breakdown of capital expenditures.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Barrick Gold
Canada
Four Mile
Papua New
Pit
Today
asset point
asset value
care maintenance
closure
commission
copper producer
copper reserve
decade
decision
dollar
evaluation
export
extension
family
gold circuit
gold production
home
house
improvement
investor
mile
operation
ounce gold
payment
percent
prefeasibility study
producer world
sale
solution
standard
test work
tier asset
ton copper
week
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Barrick Gold Corporation (NYSE:GOLD) Q4 2024 Earnings Call Transcript
Positive2-13
Barrick has shown strong financial performance with increased free cash flow, EBITDA, and operating cash flow. The company is maintaining its dividend and has a robust share buyback program. Despite operational risks and fatalities, the management's strategic focus on safety and project financing is reassuring. The Q&A section highlighted confidence in managing costs and maintaining growth, with no significant risks identified. Overall, the combination of positive financial metrics, strategic investments, and proactive management responses suggests a positive stock price movement.
GOLD Slides
GOLD Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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Why do some answers appear as “Unclear” or “Inaudible”?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
