Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick 2021 Q4 and year-end results conference call. During the presentation, all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session. At that time, if you have a question, please press star followed by one on your telephone keypad. At any time during the conference, should you need assistance from the operator, please press star then zero. As a reminder, this conference call is being recorded and a replay will be available on Barrick's website later today, February 16, 2022. I would now like to turn the conference over to Mark Bristow, Chief Executive Officer. Please go ahead, sir.
Thank you very much and, very good morning to everyone, and good afternoon, to those on the other side. Again, welcome to Barrick's quarter four and year-end results presentation. It's been three years now since we started on this journey, and Barrick is clearly achieving its goal of industry leading value creation and sustainable profitability, as I'm sure you will agree with me when you review our results for 2021. By any measure you apply, returns to shareholders, strength of balance sheet, peerless assets, prospect pipeline, a long record of exploration success and delivery on our commitments, Barrick is a leader in the sector. The fact that our share price does not reflect this makes Barrick's case for investment even more compelling. Please, take note of this cautionary statement, which is also available on the Barrick website.
Let's start by looking at last year's highlights, and you couldn't possibly get a better set of KPIs. We delivered on our production guidance for the third year in a row. Nevada Gold Mines confirmed that it is indisputably the world's number 1 gold complex and achieved a quarterly production record for quarter four. Copper's contribution to the bottom line is increasing. All our operational sites maintained or achieved their ISO health and safety and environmental accreditations. We more than replaced our reserves net of depletion at a better grade. Our wealth of advanced exploration targets will support this replenishment and consequently our business plans well into the future. Finally, we generated significant cash flow and materially increased returns to shareholders. The operating results reflect a good all-around performance, including meeting production guidance for the third year in a row, notwithstanding some considerable headwinds during the year.
The financial results also show we did well against the leading and lagging indicators. Free cash flow for the quarter grew again, and despite cash returns of $1.4 billion to shareholders, we were net cash positive for the second year in a row. At the same time, we delivered strong per share growth with adjusted earnings for the quarter, increasing by 46% versus quarter three. This is our health and safety report, which tracks our journey to zero harm. We're particularly proud of our continued campaign against COVID. Almost 60% of our employees are now fully vaccinated, well above the average of the general populations in our host states and countries. We've also seen a meaningful decrease in our total recordable injury frequency rate year-over-year, which is pleasing.
Sadly, however, a tragic fatality in January has set us back, and we are re-engaging with all our workforce to realize our goals in this regard and to reinforce the importance of that journey to zero harm. We'll start as normal, the operational overview in North America, where Nevada Gold Mines is Barrick's real value foundation. We're building our presence there from the strong base, and we're looking at green and brownfields opportunities across the United States, where Donlin is a particularly interesting prospect, as well, of course, as in our home country, Canada. Nevada Gold Mines delivered a stellar performance crowned by a production record in quarter four, as well as a strong free cash flow of more than $2.3 billion for the year. This was driven by the three tier one mines, Carlin, Cortez and Turquoise Ridge.
In the face of some operational challenges, proving again that assets of this size and quality can handle whatever you throw at them. The exploration team delivered real value for Nevada Gold Mines and increased reserves by 9.4 million ounces. Measured and indicated resources were increased by 7.4 million ounces, and inferred resources by 5.3 million ounces. This is after disposals and acquisitions and before depletion. The additional reserves came from Gold Rush, Turquoise Ridge, and Leeville. Importantly, the resource growth came from Carlin and Turquoise Ridge. As we build our geology and mineral resource management, we managing the replacement of the gold that we mine, an important component in a long-term sustainable mining business.
There's still more to come from Gold Rush in the short term and longer term prospects for the continued expansion of the complex asset base are very good. As we all know, the environment in Latin America has become quite dynamic, and while we still have some legacy issues there, we are getting on the front foot in dealing with them. We've put a lot of effort into strengthening our presence, completing transforming Veladero, and sending our exploration teams along the Andes across the full length of Argentina and Peru and into Guyana and Suriname to hunt for new opportunities. Negotiations around Porgera have progressed to the point where we envisage restarting the mine in July. We have excluded production from our guidance for the time being and until we have everything agreed with the PNG government.
We've also set up a new Asia Pacific team to broaden our horizons in this enlarged region, which we see as having significant growth potential. The tier one Pueblo Viejo mine in the Dominican Republic was one of our star performers, achieving a record mill throughput for the third year in succession. Production and costs were in line with guidance for the year. The plant expansion and mine life extension project continues to make good progress, although, as we previously flagged, supply chain disruptions have delayed the timing of the project completion from July to the end of this year. Consequently, we have updated our 2022 production and capital guidance to take this into account. In conjunction with the government, the selection and permitting process for the new tailings storage facility is underway.
Once completed, and this is important, the project will deliver a super mine capable of producing more than 800,000 ounces of gold per year, up and beyond, up to and beyond 2040. In fact, most of that period, it's above 900,000 ounces a year, and we have two years where we go over 1 million ounces. The transformation of Veladero in Argentina has probably been our biggest success in the region, where we have turned it from a struggler into a significant contributor with production forecast at around 460,000 ounces for this year. The phase 6 heap leach facility was commissioned in 2021, and the first stage of phase 7 is scheduled for completion middle of this year.
The cross-border connection to the Chilean power grid was also completed last year, and it'll be switched on when we get that final permit from the Argentinian government. This connection will not only cut Veladero's costs, but will be another important component of the Group's clean energy drive. Over now to Africa and the Middle East, which for the third year in a row achieved the top end of production guidance. It also kept up its record of reserve replenishment, replacing 165% of the ounces depleted by mining on a 100% basis. During the year, the region paid out just under $1 billion in dividends to its stakeholders. At Loulo-Gounkoto in Mali, production and costs were comfortably within the guidance ranges, demonstrating the value and stability of Tier One assets.
The complex continues to forecast a robust five-year production plan, and brownfields exploration across the two permits continues to show upside. Across the border in Senegal, we've doubled our land position and continue to generate robust results from the Bambadji joint venture. Kibali also delivered a pleasing performance, with all metrics within the guidance ranges and mineral reserves net of depletion increased for the third successive year at this operation as well. The mine paid $200 million in dividends last year, this being the first step in a process of repatriating the cash to joint venture shareholders from the DRC. Like Loulo and Loulo-Gounkoto, Kibali continued to find new ore bodies within the main mining area, all accessible from the existing infrastructure, with multiple opportunities identified to add reserves in the future, as highlighted in this slide.
In Tanzania, the two previously moribund mines we took over from Acacia have been transformed beyond recognition, last year producing in excess of 500,000 ounces of gold together. North Mara is on track to become a new, fully integrated open pit and underground operation this year, and has the foundation for a 10-year plan with plenty of opportunities to expand on it. The ramp-up of Bulyanhulu's mining and processing operations has been completed, and the mine is set to produce well in excess of 200,000 ounces per annum for at least 20 more years. Our copper operations remain a key differentiator and continue to make a real contribution to the group's bottom line. In quarter four, this business produced 126 million pounds of copper and generated an all-in sustaining cost margin of around $200 million.
Lumwana in Zambia is a long life mine which will be profitable at any realistically conceivable copper price. In Saudi Arabia, we're looking at expanding our presence along with Ma'aden, our joint venture partners at Jabal Sayid. On our own account, we're also investigating opportunities within the Nubian Shield in Egypt. At Zaldívar in Chile, we achieved production guidance and completed the chloride leach project, which is scheduled for commissioning this quarter. Each of Barrick's global network of mines continue to invest in their social license to operate, which we work hard to maintain. Unlike Wall Street, we at Barrick didn't discover ESG just a few years ago. Sustainability is at the very heart of our business, and it's not a virtue signaling exercise.
Of course, caring about the people and the environments impacted by our operations is a moral imperative, but it also makes good commercial sense as Barrick's partnership philosophy has proved time and again. This year, we'll again be publishing a detailed sustainability report, which among other things, objectively rates our performance against all critical ESG metrics. We also remain in the 95th percentile of the Dow Jones Sustainability World Index. In the top 5% for environmental policy and management, mineral waste management, closure, and social impact. We've also improved our CDP rating from a C to a B, and we will be one of the first in the industry to start reporting on forestry. One example of Barrick's sustainability commitment in action is our mine closure policy, which is designed to leave behind healthy, thriving communities when we end mining operations.
We reclaim as we go along, last year restoring more than 700 hectares to their former state. Well-planned mine closure can even be a source of economic benefit. For example, the production of sulfide concentrate at the Golden Sunlight mine, which was closed in 2019, not only removes a potential source of environmental contamination, but provides Nevada Gold Mines with sulfur fuel and pays for the rehabilitation of this mine. An important component of our sustainability strategy is close alignment with our host communities. A notable instance of this partnership philosophy in action is how we turned the tailings mess we inherited at North Mara into a facility that meets international standards and is acceptable to the authorities and the communities surrounding there.
Sustainability is all about the future, whether it's our ESG commitments or ensuring we are sustainably profitable and invest properly in that future by consistently expanding our asset base. We published our annual reserve and resource declaration last week. Attributable proven and probable gold reserves and resources both grew net of depletion and at higher grades. While copper showed a slight reduction, there are many opportunities already identified to reverse this. In both cases, upgraded geological models are supporting the group's rolling ten-year business plans. These plans are also underpinned by our strong balance sheet. Prior to announcing the merger with Randgold in 2018, Barrick had a net debt burden greater than $4 billion. Since then, we have generated significant free cash flow and divested non-core assets.
As at the end of 2021, in addition to being in a net cash position, we have also returned almost $2.5 billion in cash to shareholders over the past 3 years. We also have a strong record of growing shareholder returns over the past 5 years, as shown in this slide. With this quarter four dividend, we are extending this track record and increasing the base payout to 10 cents per share, up 11 cents from quarter three. To enable shareholders to anticipate future returns, and as we promised, the board has approved a performance-based dividend policy tied to the net cash available at the end of each quarter, as shown in the table at the bottom of the slide. At the same time, the board has also approved a $1 billion share buyback program.
As you can see from this slide, we expect our free cash flow from operating mines to increase over the next 5 years, no matter what commodity price one assumes. It's worth noting that for every $100 per ounce increase in the gold price, the attributable free cash flow generated by our gold operations increases by around $1.5 billion, thanks to the operating leverage provided by our six tier-one assets. Similarly, for copper, for every 50 cent per pound increase, the attributable free cash flow increases by around $800 million. This is our 5-year gold production forecast. Based on a gold price of $1,700 per ounce, and it incorporates the cost impact of royalties at higher forecast gold prices. Our declining capital investment and all-in sustaining costs should ensure a growing free cash flow at any reasonable foreseeable gold price.
The same is true of copper, which is already contributing some 20% of our bottom line and is well set to improve on that. In particular, our investment this year and in 2023 at Lumwana for stripping and new mining equipment sets the stage for some significant production growth at this asset from 2024 onwards. This is our 10-year gold production forecast. It's important to note that this is entirely based on our current operations and does not take into account the many real growth opportunities that are within our reach, including Porgera, Donlin, Nevada, our South American and African portfolios, and the prospects consistently being uncovered by our exploration teams in and around our existing regions as well as our new frontiers. Ladies and gentlemen, getting back to our value-creating story that I started the presentation with.
I believe Barrick offers the market a uniquely attractive investment opportunity. We have what is undoubtedly the best asset base in the business, with six Tier One mines and more waiting in the wings. All our mines have a 10-year business plan, but not on wishful thinking, but on geological understanding, proper engineering, and commercial reality. We have a significant and growing copper business, which is already providing meaningful free cash flow to the group. In an industry running out of raw material, we keep expanding our reserves. Our strong balance sheet will fund our investment in growth projects. We have a long record of exploration success and a high-quality target pipeline. Sustainability, as I said in the presentation, has long been a strategic business priority, and we have an industry-leading approach which is entrenched in Barrick's DNA, informing every decision we make. Compliance with standards, of course, remains important.
However, it is now a natural by-product of our strategy rather than the primary output of the team. Finally, we have delivered on our commitment in growing shareholder returns and have now established a clear framework on how this will evolve going forward. Again, ladies and gentlemen, thank you for your attention. Before I pass it back to the operator to take questions, I would also like to take this opportunity to introduce Christine Keener, who's our new Chief Operating Officer, North America. As you know, Catherine Raw left us at the end of last year. We're delighted to have Christine join our team. She has actually recently been with myself and the team out at Nevada. She's in the saddle. Christine, we welcome you to the team.
I'm sure many of you will, in short shrift, have time to discuss matters with Christine going forward. With that, thank you for your attention. Again, the greater Barrick team, some of them are here with me in Toronto, are online where they are not in Toronto, and we'll be delighted to take questions should you have any.
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, you may press star then two. We will pause for a moment as callers join the queue. Our first question is from Cleve Rueckert with UBS. Please go ahead.
Great. Thanks for taking my question, and congratulations on finalizing the dividend policy and a good set of results, Mark and team. I've got two questions. The first, you know, Mark, just on the 10-year outlook, on slide 28, you know, I appreciate you gave just a synopsis of a couple of the areas that could add to that forecast. You know, aside from Porgera, I don't know if you could give us a little bit more color on potential growth opportunities, kind of, you know, before that 2027 timeframe that's laid out there in the slide. You know, where if you have any confidence on adding to that outlook kind of in the near term?
Of course, in the near term, we've got some opportunities, some real opportunities, and you've touched on Porgera already. In Nevada, again, we've got some very exciting new targets, both adjacent to known infrastructure and projects that we have initiated, like looking at the gap between Twin Creeks and Turquoise Ridge. We've got some more new greenfields exploration across the Nevada complex. We are looking to grow our opportunities in DRC at the moment. We have got some very interesting opportunities that we are evaluating. As I touched on, we've got some exciting exploration ground in Senegal, across the river from Loulo-Gounkoto. We are continuing to work on the portfolio of projects that we have along the Andean trend.
Again, our big focus is adding life to Veladero. Veladero in itself is part of the Pascua-Lama infrastructure. Again, as I've said in previous presentations, we are working really hard at trying to define the resource base, particularly in the Lama side of the Pascua-Lama project, which is in the Argentine side. We have a target of 2024 to try and get our head around the prospectivity of the many targets that we inherited from the previous Barrick management. Of course, there's the challenge of realizing the arbitration award that we received in favor of the Reko Diq project in Pakistan, and that's something that, you know, is a key component.
It's something that's not reflected in our share price. At the same time, we've opened up new frontiers, as I've touched on. Egypt, we're busy working there. We are looking at expanding our partnership with Ma'aden in Saudi Arabia. We've got geologists now working in Guyana and South America and also Ecuador. Again, we've pushed out the boat. I think the key for me to leave with you is when you look forward, you know, we really get easily up to that 4.8 million ounce a year target, and we build it on really the big tier one assets that we have. I'll give you an example. Well, Carlin is a 1.6 million ounce producer, and it goes on for a long time.
The key growth in Nevada is Cortez. On the back of the record of decision we're expecting out of Gold Rush, Cortez moves very quickly into the 900,000 ounce per year and then a 1 million ounce producer for that long, 10-year period. That is a big contributor to Nevada and its contribution to the bottom line of Barrick and of course Newmont as well. Turquoise Ridge has got a steady ramp up forecast for the next 5 years at least. That takes it up to the sort of 700,000, 690, so 650,000-700,000 ounce production profile. We've got some exciting opportunities in Tanzania.
We are very bullish about Tanzania and the opportunities there now that we've got those two big operating platforms. One is Bulyanhulu, which still has capacity in its processing facility. You would have seen that we've announced the expansion of the Bulyanhulu footprint just recently. The challenge in Buli is we need another mining front, another set of faces to operate. To do that, we need to delineate and bank another vein system, which is the primary sort of ore body that we mine currently in two different ore bodies within the Bulyanhulu mining lease. Same with North Mara. We've now got North Mara properly balanced, a decent 10-year plan made up of an integrated open pit and underground mining structure.
You would remember, North Mara was one of those mines that was either roast duck or no dinner. What we've got now is a very consistent 300,000 ounce production profile for 10 years and a lot of upside that is not baked into our plans yet. Mark and his team are starting up our Asia Pacific focus and, you know, we're excited about the opportunities to grow a footprint in that area. South America, as you all know, is a challenging place right now to operate. With it, as I've found in my career, that always brings opportunity. We have a great team. We are expanding and improving our exploration groups both in South America and across Africa.
We've built a very solid exploration team in North America, that's both Canada and the United States. You know, there's lots to come organically. Of course, as you know, one big discovery changes everything, and that's where you really create value in a mining company.
Right. Okay, thanks. Thank you very much for that color, Mark. Appreciate it. You know, sort of switching gears a little bit, you know, thinking more about capital allocation. You know, I know you like to talk about M&A. You sort of always assessing M&A. It seems like, you know, the sort of deals, you know, or at least the competition for deals has been, you know, somewhat intense over the last couple of years. I guess this presentation really focused a lot more on the organic growth opportunities and now you're sort of reinforcing the buyback and the dividend. I mean, has your thought process around M&A changed at all in the last couple of months or the last year?
Not at all. As you know, I talk a lot about M&A and have done very little. But the M&A that we've done has been value creating, you know, indisputably value creating. I think I would point out the competition for M&A at the moment is a competition to survive. You know, you get these very high-priced deals, and we don't do deals like that. People know that. We've been around, as you know, you've known me for a long time, and some of the audience even longer. You know, we look at. We've got a very strict filter now in the way we assess opportunities. You know, I think, you know, we were going reasonably well.
I think of ourselves with our deals and the acquisition by Newmont of Goldcorp created real value for this industry. You know, I reflect on some of the recent transactions, sort of brings back memories of 2012 and 2013. You know, we're not in that business. We don't have to do those sort of transactions. We don't have to buy things to extend our life. We've got a solid platform, the same as we had in Randgold Resources. Our intention is to build on that value platform that we've created. We set out to do that.
You know, in 2018, when we announced the merger with Randgold, we were very clear that our focus was high quality assets run by the best people, focused on profitability and sustainable returns to our shareholders. That's what we intend to continue to drive at.
Cheers. Thank you very much, Mark. I appreciate it.
Pleasure.
Our next question is from Josh Wolfson with RBC Capital Markets. Please go ahead.
Thank you very much. Understandably, strategies and philosophies change over time and adapt to the market. You know, historically for Randgold and Barrick, share buybacks have not been one of the primary factors for capital allocation. You know, as part of the new strategy, it is something which is more prominent. Mark, could you perhaps walk us through, you know, what's changed and why this is the right move?
Josh, for as long as I've known you've been trying to change my strategy. That strategy's been pretty focused and clear. At the same time, we react to certain situations, and one of them is that we feel that the share price is not being properly valued. It makes sense to seize the opportunity, share it with the market, the opportunity to buy back stock, in a situation like this. I don't understand how you can say that's a change in strategy. I mean, it makes sense. It's a provisional approval. We can do with it. You know, we can use it for the right reasons, and we've been very clear about that. At the same time, we are very focused.
We've as I promised you and the rest of the crew three years ago we have delivered a revised dividend policy based on the strength of our P&L, and that's always been the strategy. You know, I don't believe in creating dividends or borrowing to pay dividends. We've always paid. I've always paid dividends based on the strength of the P&L. To be able to have a strong P&L, you have to have quality assets. You need to clear up your balance sheet and your debt structure, which we've done. Everything is you know ticking the boxes.
18th of September 2018, we very clearly said that's what we're gonna do, take out the debt, clean up the balance sheet, focus on high quality assets and returns real value creation on a sustainable basis, for our shareholders and other stakeholders, as well.
All right. I'll do my best to try to refrain from changing the company strategy, but don't hold me to it. On the new sort of five-year outlook, you know, looking at the production, it looks and granted, you know, we're working with our geometry sets here. It looks a touch lighter in, you know, maybe 100,000 ounces over the next couple of years. What would that be attributable to? Is that a function of PV or there are other factors in there?
There's a change in the balance because of the expansion in Pueblo Viejo, which we've communicated some time back. That drops the production by 100,000 ounces. It pulls back up immediately next year as we finish the completion of the expansion. You know the background behind that. The growth side, going from 4.4-4.8 is very clear. There's the other change has been the suspension of operations at Long Canyon. Again, for that asset, we're reviewing whether we keep it in our portfolio or not, because again, we're very focused on the quality of our assets and the longevity of the assets.
The other one will be Hemlo, where we've reset the ramp up. We've slowed that profile as we wrestle with getting that mine back on track. That mine went through some challenges with COVID and, you know, we made a commitment to bring in contract miners, and then COVID blocked, you know, shut down the ability for the Australian teams to come into Canada. We're reassessing that operation. Those are the impacts on that profile, but the profile still, you know, is. I don't know what sort of accuracy your ruler is, but it takes us back up to about 4.8 billion ounces. Remember, these are ounces and plans that we have cleared. They're not forecasts. They're actually plans. Josh?
I understand. Thank you.
Our next question is from Matthew Murphy with Barclays. Please go ahead.
Hi. Similar question on the charts guidance outlook on CapEx, though this time. The way I'm looking at it looks like CapEx is up around $200 million-$300 million a year. Do you disagree with that? If it is up, what are some of the drivers there?
Yeah, just for capital's sake, one of the biggest drivers on capital is I mean, the whole focus on Lumwana. The fact that the African and Middle East team got their head around Lumwana, got the costs down, they halved the mining costs. There's a bigger investment now in investing in their equipment. We've got some additions to make to like the crushing circuit and so on. That's a big change. The capital in Porgera, in ramping up Porgera, that's not in the forecast, Grant, yet, the capital for Porgera. I'll pass it on to Graham. He can finish the explanations.
Thanks, Matt. I mean, the key drivers, as Mark has already touched on, is you know, some of the changes in the mine plans. We've obviously had some carryover of capital from 2021 into 2022 and a little bit beyond, related to the delays in the PV expansion. That was our biggest growth capital project, and that's carried over a little into 2022 because of the supply chain, global supply chain constraints that we've had there. The other area where we are investing more is in the copper business in Lumwana, where we, you know, historically, that's a business that has been a little starved of capital, and we're really investing in that business because we see a lot of growth opportunities.
You can see that in the profile of the Lumwana ramp-up over the next five years, where we've got new fleet and other initiatives that will increase our availabilities. That's a big factor coming through as well.
Matthew, the most important thing is the, you know, next year is our last big capital year, and then it starts coming down. That's the driver. You know, when you look at Barrick in its five-year plan, and all you need to do at the end of the five years is continue those graphs for the ten-year plan. What you do see is a growth in cash flow, free cash flow, because of that declining all-in sustaining cost. You know, whatever gold price you run the model at, you get an increasing cash flow in the ten-year plan.
That's, you know, a lot of people say, you know, this is a flat production profile, but it's long and it's exploiting a capital base that we will have completely invested in by the end of next year, early the following year. Then you can get the benefits of that over a long period. Great. Graham?
The only other points I was just gonna make in the AME region, where we have got a little more capital in Tanzania, which is related.
Yeah.
to the redevelopment of those plans that Mark's already talked about. The ability for us to be able to ramp up that production following the completion of the feasibility study at Bulyanhulu, as well as the mine redesign at North Mara, where we've now got both the open pit and underground coming back into the plan. There's a little more capital in there. Then at Loulo, where we've got the expansion to our solar plant. That's all linked-
Yeah
Into our GHG reduction plans, where we're investing in solar capacity.
We've got the extra 200 MW in Nevada as well. I would just point out, Matthew, those, you know, our program, our path to 30% reduction that we've detailed, all those projects are delivering 15% IRRs at $1,200 long-term gold price. They're all in. As much as they're new and they're dealing with our greenhouse gas emission commitments, they do reduce the costs and deliver real returns as a business, as an investment.
Mark, is that with a carbon price or is that just, you know, business as usual doing projects?
That's just business as usual. You know, one of the things we stuck with is we didn't get caught up in this rental stuff. We waited until the solar technology and market was as such that you could own your own solar cells and derive the full benefit of solar energy. Barrick, with the experience we've developed in Africa as well, is that we've grown our knowledge and understanding of microgrids and power generation and that roadmap to 30% reduction is a real engineered, modeled project, processed investment. It's not a promise without a plan. It is the plan to support the promise.
That's great to see. Thank you.
Pleasure.
Our next question is from Jatinder Goel with BNP Paribas. Please go ahead.
Thanks, operator. Good afternoon and good morning. Couple of questions. One on dividend policy. It's good to see aligning it almost to Randgold days and basing it on net cash. But just to understand, is there a maximum net cash balance that you want to keep in balance sheet and pay everything beyond that away? Or is $1 the maximum dividend that Barrick will pay in any given year, and maybe any excess gets funneled through buybacks if the share price allows that?
The concept here is that we wanna grow this business. You know, we set out when we did the deal with Randgold, we wanna build a real business, a business that's relevant in the public markets. Part of that is building a stronger, ever stronger balance sheet. At the same time, we wanna have that commitment to our shareholders, where you can, you know, look at our plans and know what sort of yield you'll get from the payout. Right now, it's $1 billion-$1.5 billion, and that payout keeps growing. Not to say that we wouldn't revise it, but that's a good start.
Yeah. I think.
We've got to get to the $1.5 billion net cash first.
Look, I think the point is it's a self-correcting formula. Every quarter we look at where the cash is and we pay out accordingly. To the extent that, you know, we pay out cash this quarter, that cash is available for a performance dividend next quarter. You know, that's how the formula works effectively. Provided we're net cash, we are looking to pay a performance dividend.
Okay, thank you. Just one on Porgera. It looks very ripe for an imminent restart. I understand why you would exclude it from the guidance, but are you able to provide any more color on the.
Yeah.
possible timeline of restart and how long will it take to get back to full capacity? Thank you.
Just let me explain to you where we are. We signed a framework agreement. It was binding. We've now recently signed the Commencement, so the Porgera Project Commencement Agreement, PPCA, and that takes the framework agreement and enhances that agreement, gives us more surety on the investments we're gonna make. It clarifies the rights of the various shareholders and opens the way for the incorporation of a new Porgera vehicle, company. To do that, of course, we need a shareholders' agreement and a constitution, a company constitutional. We've now settled those, the terms of those agreements. We need to get it signed, and that's a step, but it's a process, because of the fact that there are more than one stakeholder on the Papua New Guinean side.
Once we do that, we then have the ability to apply for the SML, the Special Mining License, and roll the exploration licenses and other permits from the old Porgera into the new Porgera. That's a process in itself. The negotiation, the legal process is complete on that. Then we've got to settle the operator's agreement. The framework of that is set in the framework agreement. The other key process to be dealt with is the development forum, which is a provision under the PNG law, which whereby the various landowners and other interested groups get together and under the MRA stewardship and allocate to them, amongst themselves, the equity that's been reserved for the landowners.
Once that is done, we're ready to commence with the restart. What we have done in the interim as part of care and maintenance is we've cleaned up the pit, we've cleaned up the underground, taken all the muck out of there. We've also reviewed and done some servicing on the mobile equipment. We're currently now working through the processing plant just to make sure that everything is operational. We have done a little bit of operational readiness work ahead of the final you know proper restart. Again, the restart period will be around six months, depending on exactly when we start the restart and how much interim work we've had completed.
Excellent. Thank you very much, Mark, for the detailed explanation. All the best.
Thank you.
Our next question is from Anita Soni with CIBC World Markets. Please go Ahead.
Hi. Good morning, guys. Most of my questions have been asked and answered, but I just wanted to get a little bit better understanding on Lumwana and where exactly you're spending in terms of sustaining capital and core capital breakdown. That would be the first question.
Anita, as I said, a large. We've got a new fleet. We've bought part of it. It's still coming. We're upgrading the whole fleet. The team, you know, we went in there, we dropped the mining costs by nearly 50%. But you know, the fleet was an old fleet. That's one that I know we still got more fleet to arrive. We've got some upgrades to some of the equipment that we'll keep. Then also there's some work to be done on the crushing circuit as well. You know, that really takes us to the sort of, I'm wanting to say 50 million pounds of copper, Graham?
Yes. 100%, yes.
That, that's the plan. Then there's an additional point to add not a large amount of money, but significant is some of the exploration we're doing. We've identified some new satellites. Under the current mine plan, 2026-ish, we've got to make a decision on a big super pit pushback. Some of the exploration work we're doing is indicating that we could be able to define some better grades and lower strip ratios that would delay that decision and extend the life. The current super pit will go for 60 years. You know, if we can add more lower strip material into the plan, we will extend that decision till later. Graham, you want to add anything more?
No. The only thing I would just say is, it's all sustaining capital, Anita.
Yeah.
It's basically plant upgrades, fleet upgrades. It's all about making sure that we can do all the tons, both the waste tons as well as the mining, and make sure that we get the availability and the throughput through the plant, and that will deliver the plan.
Anita, you know, we at one stage were gonna sell this asset. We knew the value at that time. As the team in Africa got their head around this operation, we were very comfortable that they got it down to making money at $275 a pound. So we shifted our strategy, and we're now reinvesting in this long life operation.
Yeah. Thank you. I was actually looking for Graham's short answer, but your answer actually leads into my next question, which was, you know, a lot of investors are looking for copper exposure, and you've talked about copper as a strategic asset previously talking about it in M&A context. Is it fair to... I mean, I'm just trying to get an idea of what the copper, like, it doesn't really explicitly state in your tenure profile what the copper production would look like. Should we expect that to grow beyond the 500 million pounds, you know, sort of into the back half of the decade with these investments that you are making into Lumwana right now and could potentially make, as you say, you might have to make a decision on the super pit?
What would that super pit cost as well or ballpark number?
The super pit is just a cost of stripping. And again, you know, exactly how we manage that strip will be premised on what we do as far as exploration and adding additional resources. We're very comfortable that we're gonna add some significant resources and reserves both at Lumwana, which is a big operation, and also at Jabal Sayid. You know, for me, we have every intention of growing our business both in copper and in gold or in gold and then in copper. The principle behind Barrick's business philosophy is high quality assets. That's our focus. You know, that's what we're hunting whether it's gold or copper.
By the way, as you know, Barrick has always had a copper portion of its business, unlike many of the gold miners. The point is that the copper business never made a real contribution to Barrick's bottom line. Today it is, and it does so even at $2.75 a pound. You know, that's all we've done. We haven't shifted anything. We've just had a look at our business. We looked at selling it. We couldn't get the right price. The team felt they could do a better job than the past, and they certainly have, and it's now a very significant asset in our portfolio. Do you wanna add?
No, I'd just say, you know, Anita, if you look at the copper graph, you'll see the growth over the five-year period. As Mark has alluded to, when you look further out within the 10-year period, you can see Lumwana getting up to 350 million pounds.
I think, Anita, at this stage, let's get our business settled on the copper side.
We've got a lot of opportunities on the gold side and then we'll keep the market updated on, you know, new opportunities as we. What we have done, as I said, we've opened this new frontier in Asia-Pacific, and we now have embedded copper expertise, additional expertise in our exploration teams, both in Africa, in the Central African Copperbelt region, and also in our LATAM teams, our South American and Central American teams.
Okay. A quick one. On the record of decision you mentioned, I think it was at Cortez, I hope I'm not misspeaking. Was that pertaining to Goldrush's record of decision or was it pertaining to the Cortez one where you can go deeper and below the water table?
The expansion I was talking about in Cortez is all about Goldrush at this stage. We have some very exciting exploration, new models in Cortez underground that we're busy drilling. We touch on that if you read the MD&A that we're covering. This is currently, you know, it's the business plan, so it's what we've got in Cortez. We've got some other additional Robertson and pipeline that we're working on and then, really it's the post record of decision Goldrush, which, as you know, we've signaled that it should be in place by the end of this year.
Okay. Thank you. That's it for my questions.
Thanks, Anita.
Our next question is from Jackie Przybylowski with BMO Capital Markets. Please go ahead.
Thank you very much. Also most of my questions have been answered already. I just maybe wanna follow up with what Jatinder was asking earlier and just ask you a little bit more explicitly. You have this buyback now for $1 billion. I know what we've seen from other companies, not Barrick, when they disclose a buyback, they sometimes complete it, execute it, sometimes they don't. Can you talk a little bit about what your commitment to executing on the buyback is? Do you fully intend to finish the $1 billion by the end of the year, or is this something that will be more discretionary?
The best thing for you to do, Jackie, is to read the MD&A because it's very clear there. Again, this is about a view that we have about the value of our stock. Again, we might spend it all, we might spend a little part of it. It depends on the market and how we feel about the value of our stock in the market against, you know, the other things that we can spend the money on.
Just maybe following up on that, is that your priority? That's your preference would be to continue to grow? I know you have mentioned that and I did read the MD&A. I know that, you know, growing the business is a priority. Is that first priority and.
Either the buyback or the special dividend we should think would be kind of secondary to your growth opportunities?
Well, I think the dividends and the growth are not mutually exclusive. As I've always said, you know, we focus on 15% returns at gold prices much lower than they are today. At the same time, I've always believed and demonstrated, if you have that sort of filter and discipline, you should get to a point where you can do both, invest in your future and continue to make returns. A classic example is last year, you know, we returned $1.4 billion, a record return, a cash return to our shareholders ever. At the same time, we continued to invest some significant capital. This is to really make sure that we've got a solid platform to deliver the ten-year and beyond plans that we have in our big operations.
Okay. Thank you very much.
Our next question is from Greg Barnes with TD Securities. Please go ahead.
Yes, thank you. Mark, with the $200 million in dividends paid out at Kibali from the DRC in the second half of last year, have you opened that avenue to get dividends out of the country fully now? The legacy $500 million, has that progress been made on that as well?
Yes, we have. As I told you when I spoke at your conference, Greg. So we're expecting another $300 million imminently this month, and then that'll be followed by another $300 million. The deal that we've got is we will pay out the money specifically to pay down the debt with the next $1 billion. That's where you get your $500 million from because it gets divided between. It's just over $1 billion after the $200 million dividend payment. The dividend payment was the first step, as we pointed out in the announcements today. Then we'll pay out the billion dollars, just over $1 billion.
Everyone gets. The two major shareholders get $500 because it goes back to repay debt. Going forward, we will pay 50-50, 50 to dividends and 50 for the continued reduction in debt. You know, it's important that people understand that it's you know this process, and we've done it in Mali as well allows everyone to benefit. The government gets a foreign exchange fee on the loan repayments. It gets a withholding tax payment on the dividends. Our partners, which is the state mining company, get dividend benefits going forward. We don't wait for the end of the project for everyone to benefit. You know, that's the way we've been, and we've never.
You know, there's been an issue in the market about this money, but it's never been, as you know, I haven't made a big fuss about it. It's never been under question. It's just when it should be paid. So we've got to that point. I explained to you in the past the reasons for that. But we've got to that point now.
Fair enough. Just, Mark, I'm at risk of going down the M&A question route again, but I think everyone agrees that paying zero premiums on existing assets makes a lot of sense, and you've demonstrated that it works. Should the goalpost be a bit wider when you're looking at a development project or an exploration stage project to bring something that looks very attractive into your fold?
Sure. You know, that's a matter of what we agree. You know, to pay an infinite premium on an asset that's got no permits, no resources, nothing, doesn't fit our criteria. You might get lucky, but you know, I've never gambled in the way I run our business. We have a very solid technical team at the corporate level and supported by competent in-country skills. And again, we will pay a premium on something if we can see the benefit in the geological model or something that we feel we can unlock. You know, we're not sort of you know, blind to opportunities, as we've demonstrated in the past, Greg. You know, just to you know, we.
Some of these assets that were dealt last quarter, they've been around a long time. We, as an industry, all walked away from them at much lower gold prices. You know, one thing for sure, as you've been around as nearly as long as me, $1,800 gold masks a lot of issues in an asset. And again, all these assets had too much soon to be discovered opportunities baked into the value and then a premium on top of that. We won't do it.
Okay. Fair enough. Thanks, Mark.
Our next question is from Patrick Porada with Allianz Investment Management. Please go ahead.
Hi, Mark. Thanks for your continued focus on sustainability topics, especially on today's call. We believe that this requirement is necessary in your sector, not as a competitive advantage, but as a competitive necessity.
We're also looking forward to your sustainability report and appreciate the work by Grant Beringer there. With this in mind, on your 30% reduction for 2030, you have a roadmap laid out, which is primarily solar and natural gas conversions. Can you provide a little bit of color on the biggest additional projects that you have under investigation for this target?
We've started way back already, you know, with the big conversion of heavy fuel to gas and DR. We've built a lot of additional capacity to manage microgrids in DRC. We've installed a big battery in the DRC. We're gonna put in more batteries now. Really what it's designed to do is completely take out the spinning reserve, the thermal spinning reserve during the big water periods, the big high river periods. The way it works is we originally tested the battery on managing the demand of the shaft, the hoist, and it was pulling lots of power, and we had to spin diesel engines to deliver that power when the demand was there.
What we've done is put a battery in there, so the hydro then keeps the battery charged, and the battery can react to that demand. What we're looking at now is expanding that battery capacity and making the battery form the grid, and then making sure that the hydro keeps the batteries charged. It's a much more efficient way to manage the power, and it's a significant improvement. With that knowledge, we've transferred it back to Mali, where we don't have a grid at all, and we don't have access to hydro, but we have a lot of sun. We trialed a 20 MW solar. It's worked exceptionally well. Now we're gonna treble that, and we're gonna add battery bases to it.
What we do then is that we make that solar much more efficient and the impact on the heavy fuel machines. The first thing is we'd want to retire the high-spinning diesel machines, and we've got these big, heavy fuel baseload machines. Again, we will be able to manage that more efficiently. In Nevada, as you know, we've got a natural gas power station, and we've got a coal power station. Our commitment immediately there two years ago was to work to replace the coal with natural gas, and we're way down the road on that. With our knowledge and Nevada grid is much bigger, and we've got access to the United States power grid.
That makes it a lot more efficient to have a very big solar power station. We've committed to a 200 MW power plant. We've got the property right next to our power station and that's a big step forward. In Chile, and I mean in Argentina, what we've done is the old Pascua-Lama infrastructure was designed to use to access the Chilean national grid, and that's probably the greenest grid in the world. We've now got permission to do that. We've connected to the grid. We've also brought the infrastructure and tied it into the Pascua-Lama original infrastructure, and it's now accessible by Veladero. That's a big saving and a big contribution to our emissions reduction.
Again, we've been working in Tanzania, linking the grids back, because traditionally, miners built their own power stations, diesel power stations. Now it makes sense to go back to the grid, and the grid in Tanzania is largely renewable energy. The problem with the Tanzanian grid is its reliability. We're currently investing in grid stabilizers, that sort of technology, so that we can access the grid. We've just joined North Mara underground to the Tanzanian grid. Again, we'll make it more reliable. It's a lot cheaper, and it's renewable. Likewise with Lumwana, we have the same opportunity because a lot of Zambian power comes from the Kariba hydro. There are other opportunities as well.
You know, I think I've walked through all the assets. Grant Beringer, are you on the call? Have I missed anything?
No, that's right, Mark. I think the only other one was probably the PV lime kiln. We're doing a fuel switch there from HFO to natural gas, and that'll also give us around about 127,000 tons CO2 equivalent saving on an annual basis.
Okay. Patrick, does that answer your question?
Mark, I would say we're also investigating the solar for Pueblo Viejo as well.
Yes.
That's one of the things we're looking into.
Patrick, you happy with that?
Yeah. Great. Thanks, guys. Maybe if we shift to 2050, thinking longer term, what role or need do you see from policy, regulatory, and value chain support to make you and ICMM, all the peers that have committed to net zero by 2050, become more viable or more achievable?
Yeah, I think, Patrick, one of the big dilemmas that we all have is the promise without a plan. You know, we've never done that, certainly in everything I've been involved in. You know, the big challenge is EVs and, you know, this expectation that they just magically, we're gonna deliver massive batteries that can hook up to a 300-ton truck, and it's gonna be perfect. Likewise with hydrogen fuel cell technology. It's quite a long way to go still. We are partnering with our major equipment suppliers. We are investing ourselves in things like carbon capture. The next big focus for us, and we are far down the road, is dealing with scope three emissions.
Grant and his team have done a great job reaching out and understanding that, and we've set as our target for next year to be able to deliver a roadmap for that part. Again, it's a more challenging undertaking, but we are very clear that we wanna work with our service providers, particularly our in-country service providers. The focus has been for us is value-driven focus. The big-ticket items, we're gonna address first. In the meantime, we have got people dedicated to evaluating and driving the opportunity to build out more capacity for further reduction. The one filter that we have, and we've done it, as I said earlier in the presentation, we've done the whole roadmap we've shared with you.
All of those projects deliver 15%. They meet our investment criteria as if it was another business. We believe that that's what's gonna get the world to the right place. Because when people work out that the commercial attraction of doing this sort of work delivers returns, and it's not just about trying to please some demand with a promise.
Thanks, Mark, and thanks, Grant.
Our next question is from Adam Josephson with KeyBank. Please go ahead.
Yeah, Mark and Grant, good afternoon. Thanks very much for taking my questions. I appreciate you doing so. Mark, can you talk about your gold cash costs and AISC guidance for 2022? You're expecting them to be up about 5%. I know you mentioned in the MD&A that it's the full year impact of the Nevada mining tax and general cost inflation, specifically energy. Can you just talk about the buckets that are comprising that expected 5% inflation? How much is energy, labor, materials, et cetera, and then why you expect those cash costs to decline year-over-year in 2023, if I read that slide correctly?
Okay. Grant's well-equipped. He's done it so many times. I just wanna point out that one of the key drivers on the cost is, we've always forecast our 5-year plan at $1,200 gold. We've changed that this year. I mean, it doesn't change the production profile or the picture, but what it changes is it adds $24. Hey, Grant? $24 to the cost. When you take that and then the cost out of Nevada is about $8, sorry, and then you've got the 3%-5% inflation. When you back calculate everything, it all stacks up. A lot of people look at it, and they haven't done the arithmetic. It works.
That's why we get close to, you know, what we say we gonna do and what we do or when we do it. You know, it's a real cost thing. Of course, there's ways to manage it. Again, the team, we've taken $300 million out of our supply chain procurement business. We've got another $50 million-$80 million targeted this year in 2022. Again, that's what we do for a business, is manage and mitigate costs, focus on better efficiencies, invest in that efficiency drive.
Another aspect before I get Grant to touch on the minutiae is we've also, as you all remember, rolled out a brand new data platform, layer data platform that integrates all the information across the group. We've got two more mines to do, Porgera, of course, because we haven't started it, and Jabal Sayid, which we're busy with. All the other operations on the same platform, interconnected, and it's fully integrated. Now what we're doing is rolling out those reporting systems and processes which we can use this real-time data to improve our business. That's definitely gonna bring further efficiencies. I would argue that we're the only large mining company that has a brand new platform, fully integrated, up to speed and in a.
Modernized because it's, you know, new. With that, I'll pass it to Grant, and he can
Thank you for the detail.
Thanks, Adam. I think as you already touched on and Mark has touched on, we have been guiding for about 5% inflation, which is, you know, made up of various different buckets. The biggest bucket of that really is on the energy side. Obviously, particularly oil, diesel, a big impact on our costs. We estimate that for every $10 barrel change in the price of oil, it's about a $6 per ounce impact on our cash costs. Similarly, natural gas has a big impact on costs. Again, about a $1 change in the gas price has about a $3 impact on our cash costs.
It's not as significant because our biggest exposure to gas is really Nevada and PV and not really at our other operations. That's the biggest factor. Of that 5, that's probably, you know, somewhere between 2%-2.5% of that 5%. The rest is really made up of just cost price increases. One of the big factors that's been impacting us lately has been freight. Freight makes up about 5% of our landed cost. You can see that it's not a massive impact, but it certainly has been impacting us in the short term. We believe that the constraints within the global supply chain will normalize within the next 6-12 months.
We think that's more temporary than a long-term issue. Certainly we have seen situations where, you know, we've seen rates tripling, for example. Against that, we've been working hard to manage that in terms of consolidating our shipping, you know, hiring direct ships to mitigate the cost of containers and just consolidating our buying and our shipping. The other one that Mark's already touched on is obviously royalties. And as he alluded to, the impact of the change in the gold price is about $5 an ounce for every $100 change in the gold price. Those are really the key buckets that I would point to.
Mark already touched on the fact that we've taken around $300 million out of our annual supply chain spend over the last three years in line with the targets that we've set, and we have another $80 million that we wanna achieve this year. Now, that's not gonna save us from all of the inflationary pressures that we are experiencing, but it certainly helps to mitigate some of those costs, particularly around energy materials, and of course, the other one is labor. Just touching on labor, you know, we are obviously exposed to the pressure that is being experienced across the mining industry. But I would say that we probably have less exposure to that pressure just because of our strategy of employing national employees at all of our operations.
We have a lower proportion of expatriates, which is really where the pressure has been coming on, particularly in Australia, Canada, places like that. Our strategy of really developing our host national skills is paying dividends. I think that probably covers it.
Yeah. Thanks. Just one follow-up on that. From 2022 to 2023, in terms of gold cash costs, you won't have the royalty issue, presumably, and then you won't have the impact of the Nevada mining tax. You're thinking that your cost savings efforts will more than offset any incremental energy, labor, freight, materials cost inflation. Is that the right way to think about it?
Yeah. I think it's a combination of two things. It's partly to do with that, those mitigants, but it's also when you look at the graph, a lot of the decline in cost is a function of increasing production. We're effectively going from, you know, 4.4 million ounces to 4.8 million ounces. So that increase in production, you know, a large chunk of our costs are fixed. That's what really gives you that reducing cost profile.
Yep. No, I appreciate that. Mark, just one following up on Josh's question from very early in the call about the authorization. I know you mentioned you view the shares as undervalued, and I appreciate that. You said you had similar comments on the call three months ago. You thought Barrick was a very attractive investment opportunity. At the same time, you said, "Look, I'm not so sure. We're not in the business of trying to manipulate our share price. You know, there are perhaps better ways to return capital to shareholders than to buy back stock." Have you changed your tune at all from what you were thinking three months ago? You know, 'cause it seemed like you viewed the stock just as attractive then as you do now.
No, we haven't. The point is that we've seen a big divergence from, you know, some of our well, one of our peers relative to the rest of the industry. You know, us against our peer group excluding Newmont is we've been in line with performance. It is a complicated challenge, but at the end of the day, you know, it is my responsibility to worry about the value of our stock. You know, the first point is we've got to convince the analysts that, you know, this stock is really valuable. We've delivered on what we've said. At the same time, you know, we want to use all the levers that we can to address that.
What we've done is made sure that we have that because, you know, our stock went quite far down and on a historic basis, that it was, you know, relative. You know, even according to consensus, it was undervalued. You know, we wanted to have all the tools to deal with a lower stock price should it prevail, and should we see the opportunity to tidy up some of the, you know, sort of less well-held shares.
Mark, just on that divergence in valuations, is there anything that you would attribute that to? Do you think it's dividend policy? Do you think it's where you're domiciled? Anything else that strikes you?
You know, for me, you will recall, I have been through this exact same situation back in 2012 and 2013, where every time I stood up on the podium, people were banging the table saying, "You know, you need to grow." You know, and everyone was missing growth, and everyone was running around buying anything that they could. We in Randgold, if you plot the Randgold share price, it lagged for a while until such time as, you know, these big deals didn't work because the gold price softened. This way, you know, we've got two ways to deal with it, inflation and the gold price cycle.
It's interesting, from 2013, Randgold left the rest of the industry because we hadn't done any value disruptive deal, and we outperformed the industry all the way till the deal with Barrick in 2019. We never, you know, you never close that margin. There, in that also lies because again, the level of analysis in the gold industry at these sort of gold prices is, you know, the gold price is always proving the analysts wrong because it's moving in different ways, and no one gets the gold price right. For me, there are lots of different influences on gold stocks at this time of the cycle.
You know, it's worth going back and plotting equities and the gold price starting at 2005. It's a very interesting graph to look at. Again, you know, we at Barrick are really long-term. Our focus is long-term value creation. It always has been. When we look at how we manage and communicate, we're looking at the long term. You know, it's been my whole life invested in Barrick. I mean, my life is invested in Barrick. I'm a fully committed shareholder. Most of my, in fact, all my colleagues in the executive team, we're all owners. In fact, I don't know if you know this, but you have to have 5 times your salary in equity to be part of our executive team.
For me, it's a complex situation. You know, our discussion with our board and our shareholders is that some view that as a, you know, that we shouldn't be sitting there watching our share price languish relative to anything else. There are moments when it makes good sense to initiate some buybacks. You can't do that at a drop of a hat. You've gotta have it approved. We made sure that we addressed that particular tool that we need in our toolbox.
Thanks a lot, Mark. Appreciate it.
Our next question is from Tanya Jakusconek with Scotiabank. Please go ahead.
Oh, great. Thank you. Good afternoon, everyone. You know, congrats on a good end to the year and the shareholder return policies. I have two questions. If I could, I just need clarification on one. My first question is on the DRC and the repatriation of your share of the $500 million. I just wanna confirm that you have all of the necessary signatures in place to take the monies out of the DRC. And if you do, just the mechanism of how we're gonna take it out, please. Thank you.
Okay. We don't need any signatures. It's a standard procedure. As I explained to you, Tanya, a while back, there was this confusion between the 2018 code, which we're not legally required to follow. You know, we developed and invested against the 2002 code. But at the same time, as you know, we're not a company that sort of sticks the post up and as a last man standing at the top of the mountain. The first step of the payment was at the end of the Q3 last year.
We'd paid out a $30 million dividend to just practice the process, and then another $170 million at the end of the year, again, as part of the process, because there's a lot of money there and, you know, it makes people anxious. The next one is we've agreed to pay it out. Originally, it was 90 days to just manage the banking system and give it chance to manage that amount of money leaving the DRC. We've now resettled on 300 and then 400, and we'll do it in sort of one- to three-week slots. That's the plan.
I would also point out, just so everyone understands this, and, you know, we've never said that we'd take it out. I've always been very clear, and it's never been a question with the Congolese government that it wasn't our money and that anyone was trying to keep it there. We've had to go through a whole lot of processes, and it's only recently that we have a fully aligned cabinet that's aligned with the parliament to be able to address some of the requirements. The other one is that 40% of all our revenues stay offshore. So when Kibali every time it sells gold, we keep 40% offshore, and that 40% goes to pay back the loans and other corporate costs, like management fees and so on.
60%, we repatriate, and we use it to pay bills and so on. There's a residual amount. As we've performed at Kibali, the amount of that repatriated portion of the revenues has grown. With the Kabila government, it was a complicated process. You know, a normal approval from the central bank to transfer money was never denied, but it was never responded to. To move dollars, because it's a dollar account, offshore effectively, outside out of DRC, you do need a foreign exchange approval or a Forex approval, which comes with a fee. That's the process that we've been working through. As you know, there was a recent change in the central bank government.
Now with the new governor, it's been easier to deal with that because there's now a connection between the Ministry of Finance, the prime minister's office and the governor of the central bank. That's really where we are. The money, you can't just transfer it. You've got to pay out something. There are three things that we can use the money for. Of course, paying costs, then repaying the debt until the debt's repaid. After that, it's just dividends. The important thing was to pay the first tranche of dividends. Why? Because the state mining company and the state got benefits in that transfer, and we demonstrated that.
Then the second is to clear this $1 billion out on debt repayments and then move to a 50-50. That's really the rationale behind this. We have, you know, we don't have to seek approval. No one says, you know, "You will do this." We went through a fair series of commissions to review the situation and the conflict in some of the legislation. We've also agreed with the president of the parliament, sorry, of the Senate, to introduce some legislation to clean up these articles that might be misconstrued. That will happen this year as part of the Senate process or parliament process.
That's what it is. You know, I don't think there's anything more that we need to be able to transfer. We've actually put the instructions, the transfer instructions into the bank, or we're gonna. I think it's probably today or it happened yesterday, but sometime this week, those transfers will go.
When I look at your financials at the end of March or end of Q1, all of that $1 billion or $5 million your share will all have been removed out. We would see all of that in-
Probably 600 of the billion. It could be, but right now, you know, if you look at every two weeks, there's a chance it might be just at the beginning of the last tranche at that. Because originally it was 90 days.
Okay.
Certainly the next quarter we should have the first two tranches of $300, so $600 million, that's 300 ours.
And.
I think there's a real motivation for the government to get this thing settled because, Tanya, all the time the money sits in our bank account in DRC, it attracts an 8% interest. There's a big motivation to get this thing settled.
Okay. $600 million in Q1 and the remaining $400 million.
Yeah.
On a 100% basis early Q2.
We might surprise you. Yeah.
That'll be good. Yeah. Then just maybe a, you know, still in the DRC, we did notice an export penalty claim. Can you just let us know what that's about?
Yeah, that's a normal course of business. Yeah, we have sometimes a little over-enthusiastic customs people in the annual audits. In fact, most of those claims are supported by documented approvals in how we manage our duties against, for instance, some of the explosive materials that we import and also steel balls, just as an example, where it has been interpreted as something else. It's a normal course of business. We, you know, we will engage, which we have. We've got all the comfort letters and the decrees that we need to deal with this challenge. As we've stated in the MD&A, we don't believe that it's something that we should be providing for.
Thank you. Just my last question, if I could, just on your copper strategy. Just wanted to understand a little bit how Reko Diq fits into that strategy and just where we are on this asset.
Right now, the asset that we have is the arbitration award, which we share with Antofagasta and ourselves, Barrick. We are working and have been, and it's general knowledge, you know, in the spirit of Barrick's philosophy of how we can convert that into something that's more meaningful, and that's something that doesn't end up with the Pakistan government having to write out a big check without any benefits. You know, Reko Diq is an opportunity that we've been working on whereby everyone will benefit, our shareholders, of course, and same with the Balochistan government and the Pakistan government. That's really where I would wanna stop it because, you know, there's still a lot of work and water to flow under the bridge.
That's the tactic and, you know, and as I said, and I think I told Greg at his conference that, you know, it's a real asset, and we would like, as miners, to convert that into a mining asset. It's one of the better ones around. Otherwise, we end up in a conflict, and that's not a good thing to do with your host country or potential host country.
Okay, is it fair to say that this is a way out in terms of fitting into your ten-year pipeline in your slide?
I t would be fantastic in our 10-year pipeline. It's a real deal.
It's not in our ten-year pipeline.
Yeah, sorry, it's not in our ten-year pipeline right now.
No, I understand that. In terms of resolving everything and then-
Sure.
Probably having to do a feasibility study and other stuff in country, would you be able to even fit it into your 10-year pipeline?
Sure. Absolutely.
Okay. Great. Thank you.
Thanks, Tanya.
Our next question is from Mike Parkin with National Bank Financial. Please go ahead.
Hey, guys. Congrats on the good quarter. Just a question with respect to the performance dividend. Does that indicate kind of a comfort level with carrying debt on the balance sheet, or are you agnostic to where the debt is, given that performance dividend is linked to the net cash position?
I think you've just answered your own question, Mark. Net cash means there's no net debt. The way it's designed is that if we have, because what we've done initially is our debt to pay it all up is expensive. Hopefully, it gets cheaper and cheaper with the growing interest rates. We've offset it. We've got cash balancing the debt. What we've said is, anything above zero, so from 0 to $500 million net cash, pay out a 5-cent dividend and then $500 million to $1 billion and $1 billion to $1.5 billion.
Okay.
What it does is it's a non-negotiable process because if we're investing heavily in a big project, for example, and we increase the net debt to fund that, then we are investing our shareholders' money into that project. Given our return criteria, we think most, in fact, more than most of our shareholders would support that. If we don't and we build cash on the balance sheet, we make sure that we don't create an easy balance sheet and that, you know, on a formulaic basis, money goes back to shareholders.
Okay. Thanks very much, guys.
Okay. Thanks, Mark.
Our next question is from Brian MacArthur with Raymond James. Please go ahead.
Thank you for taking my questions after all the time. I just wanted to go back to the self-correcting mechanism on the dividend, like, and you're sort of just coming from the debt side. What about the working capital side? I mean, we get variability. You know, if you really built up, you sucked it down, working capital down, you get a lot of cash, you're gonna pay it out and then the next quarter rebalance it. Is that what I'm to take mean? Or is there some mechanism where you just kinda smooth it over time because you know, a lot of investors like a more smooth dividend than things jumping up and down.
No, I think over the year, you know, as Graham says, it is self-balancing. You know, I don't know, you know. I think it worked really well in Randgold, this sort of approach. It's slightly more sophisticated because it's a much bigger company. You know, I think you'll see that, it'll work out just fine.
Well, certainly over time, you'll build it up anyway, so I guess there's less risk about happening. Second question, just Mark, the other thing I think is quite interesting that doesn't get talked about a lot is liability. Just on this Golden Sunlight deal, you effectively do reclamation, which is very, very good. You get a source of product, which I assume provides, you know, lowers cost in Nevada, which is a win. There's also a reversal in the financial.
Yeah.
You also liberate money from bonds and stuff by doing all this as well. There's actually a three-pronged win here.
Yes. When we started 3 years ago, the bond was $150 million. It's now $90 million. It's going down, and it'll eventually end up at zero. That's the plan. Just as a broader strategy, you know, we inherited. We've got a number of closure sites which actually sits under most in North America under Christine. When I sat down with the team back in 2019, what I challenged the team to do is to engineer. These sites were being maintained, and the can kicked down the road and was costing us $hundreds of millions a year just to keep them compliant. What we challenged the team with is, let's engineer them to closure. Not in 100 years of water treatment closure, but full closure.
Get the best engineers, focus on rehabilitating the sites, making sure that we can sustainably manage, for instance, the water balances. The team's done an excellent job already. Already we've more than halved that cost. Patrick Malone, are you on the call? Great. Grant, you might wanna comment. We've driven that.
Yeah.
Of course, with the higher gold price, we've disposed of some of those sites because they have resources and then they don't meet Barrick's criteria, but they certainly meet other miners' criteria. We've really cleaned up that portfolio and continue to do so. What it's done as well is it's grown Barrick's skills and technology in managing closure. That's a real asset to have in the modern world, is to bring another skill when we go mining, and that is that we manage. I think Grant will reinforce this, one of the most neglected parts of ESG is not only the S part, social side, but also the biodiversity and water.
It's a big issue for Barrick and our closure philosophy. Graham, do you wanna add to that?
Yeah. I think you're right, Mark, in terms of the water aspect. That really was where we focused, you know, shortly after the merger because the strategy prior to that was just to treat water in perpetuity. So the liabilities were massive in terms of just water treatment. So that really has been our focus. I mean, one of the key drivers for Golden Sunlight was removing that TSF, which we needed to treat the seepage water from, and that again, was gonna be in perpetuity. So we've completely removed that liability and the same for a number of the other sites that we've started looking at. We've removed that liability.
To the biodiversity point, and Golden Sunlight is a classic example of this. We're able to restore that land back to its previous condition. We've also purchased adjacent land, which we are now making available to the community as a conservation area. Really it's come full circle on a lot of these closure sites, and at the same time, as you mentioned, reducing those liabilities significantly.
Great. Thanks. No, it's an elegant solution. Just a final question, a quick one. Is Long Canyon Two in your ten-year plan?
Yes, but there's a big gap and it sort of winds down. It's the debate in the team: is it really a Barrick level asset? We're actually looking at you know in conversation with our partners at possibly realizing that asset in the short term. It isn't, but it's a very small contributor.
For the next few years, we're obviously focused on the permitting and then it only kicks back in in 2026 in terms of hot, fresh rock. Yeah, as Mark says, it's out for the jury to decide whether we keep it or not.
Right. Would there be capital in 2024 and 2025?
No.
No.
Not at this stage.
Thank you very much. I appreciate you answering all my questions.
Pleasure.
There are no further questions registered at this time. I would like to turn the conference back over to Mark Bristow for any closing remarks.
All right. Well, this has been a marathon session, and hopefully you would have recognized it wasn't my presentation this time, it was all the questions. We're really focused on getting this message out. You know, there's a lot of detail in our MD&A. We thank you for your questions. And again, if there are any further questions, as you know, we are always available to answer your questions. Again, thank you for affording us all this time, and we'll see you soon, probably down in Florida, hopefully. Thanks again.