Good morning, everyone. I am John Thornton, Executive Chairman of Barrick, and I want to welcome you to the annual meeting of shareholders. There is only one place to begin today, and that is in remembrance of our founder, Peter Munk. Peter was an iconic Canadian, a visionary entrepreneur, and a remarkable philanthropist. He was a friend, a colleague, and a mentor to many of us in this room. Indeed, none of us would be here today without him. His passing inspires us to redouble our efforts in keeping alive this company's original DNA, which is a faithful replication of Peter's own. Intentionally distinctive, fiercely entrepreneurial, at once bold and prudent, and always committed to the principles of partnership and ownership. Those are the qualities that made Peter a great man and a good man, and they are the qualities that will make Barrick one of this century's leading companies.
While Peter is irreplaceable, we are fortunate in that we can still draw upon the wisdom of Barrick's other early leaders and original partners, and I particularly want to acknowledge Bill Birchall, who was there from day one, and who lived and breathed the company's authentic partnership culture. Bill, where are you? I will have more to say about Peter over the course of my remarks. First, I would like to introduce our board of directors. Gustavo Cisneros, Graham Clow, Kelvin Dushnisky, Michael Evans, Brian Greenspun, Brett Harvey, Nancy Lockhart, Pablo Marcet, Anthony Munk, Rob Prichard, Steve Shapiro, and Ernie Thrasher. Today, we say goodbye to two board members and nominate two new ones. I would like to thank Gary Doer and Dambisa Moyo for their service to the board and to Barrick.
Gary joined the board two years ago and has since made important contributions both as a director and as a member of the Corporate Social Responsibility Committee. Dambisa has been with us since 2011 and has served on three committees, Audit, Corporate Governance, and Risk. She leaves us to focus on the release of her upcoming book, "Edge of Chaos: Why Democracy Is Failing to Deliver Economic Growth - and How to Fix It," a book we all should be reading. Thank you both for all you have done for Barrick. Today, we are nominating two outstanding individuals for election as new independent directors, María Ignacia Benítez and Patricia Hatter. Patricia, where are you? Both of them personify the company's values and bring vital experience relevant to the core challenges and opportunities of our business.
María Ignacia Benítez is an environmental expert with a deep understanding of Latin America's political, legal, and regulatory systems. She was an advisor to Chile's Senate Environment Commission before serving as the country's Minister of the Environment from 2010 to 2014. She will be our first director with primary expertise in environmental management, and she will provide invaluable knowledge from a region where Barrick has significant long-term interests. Patricia Hatter is an an experienced Silicon Valley executive with broad expertise in technology and digital transformation. She has served as a senior executive at Intel, McAfee, Cisco, and AT&T. She now advises technology companies in sectors covering cybersecurity, IT service management, and blockchain applications. As a director at Barrick, she will help guide our digital transformation and our implementation of new technologies. Welcome to both of you.
I would also like to introduce to you the members of management who are here this morning. First, Kelvin Dushnisky, our President. Kevin Thomson, Senior Executive Vice President of Strategic Matters. Catherine Raw, Executive Vice President and Chief Financial Officer. Darian Rich, Executive Vice President of Talent Management. Rob Krcmarov, Executive Vice President, Exploration and Growth. Mark Hill, Chief Investment Officer. Kathy Sipos, Chief of Staff, and Greg Walker, Senior Vice President, Operational and Technical Excellence. Two years ago, I shared with you three simple messages. Barrick is back, gold is here to stay, and Barrick will be a company you will hold forever. Last year, I offered another three. We are a company of partners, a company of owners, and a company of innovators. All of these messages are enduring. Today, I have one simple message to add, and that is that we are a company of conviction.
One of the things we all know about Peter Munk was that he was unwavering in his pursuit of his vision. Temporary setbacks could not cloud that vision, nor would noise distract him from his purpose. This quality is truly at the core of Barrick's DNA. We have the conviction to build over the long term, something distinctive, valuable, and sustainable, a company that pursues a clear mission and purpose with single-minded intensity. That means, in the first instance, that we have the courage to be different. If Peter Munk was anything, he was an original. He thought for himself and being an outsider to mining meant he could repeatedly develop novel and highly profitable approaches to the business. It so happens that this is consistent with history's most successful businesses, all of which were run by outsiders.
The investor and scholar William Thorndike examined 50 years of company results and found that the most successful businesses and their leaders all share what he called an intelligent iconoclasm. If that does not capture Peter Munk or Barrick, nothing does. Stephen Dattels, an early colleague at Barrick, remarked that because of Peter, and here I'm quoting, "We were driven to believe that while the difficult took a few days, the impossible took a few days longer." Peter inspired us to work together as partners in the pursuit of something greater than ourselves. Our core purpose is to create wealth, not just for our owners, but also for our people and the communities with which we work. Peter also believed that partnership and conviction go hand in hand with ownership.
As Bill Birchall has noted, and I'm quoting, "It was his belief that this was our business, we had to perform, we had to do better, we had to act as owners, and everyone had to pull together for the greater good." Today, our level of ownership at Barrick is as high as it had ever been and only getting higher. That should tell you something about our conviction in our business. All of our senior leaders have a meaningful percentage of their wealth invested in Barrick. You may recall that our partners receive on the order of 40%-50% of their annual compensation in the form of shares that they cannot sell until they retire. That conviction extends even further.
This March and April, before our blackout period came into effect, 49 of our 60 partners chose to invest their own money in the company, the rest will be doing so shortly when the blackout period ends. So far, they have bought a total of more than 170,000 shares. You may also recall that after paying the tax man, I have invested more than 100% of the money I've been paid by Barrick into its shares and have never sold a single one. We now pay all of our people around the world, 100% of them, with some shares every year. There is no other company in the industry that does this, or for that matter, in most industries. We have the conviction in Barrick to tie our financial lives to it.
With so much of our money on the line, we believe being a company of conviction means we stay totally focused on delivering long-term value per share. When things are going well, we don't buy the hype, and when things are going less well, we don't drink the hemlock. As I remarked at our recent Investor Day, it is tempting to look back and see 2016 as a year in which we seem to be executing well on all fronts. In 2017, it was almost the reverse. The truth is, we were neither that good nor that bad. We made good progress in both years, but we are nowhere near where we want to be and where we know we can and will be. If we were an athlete, we would say we were in better shape, but not yet headed to the Olympics, much less winning any medals.
Our job is to work tirelessly at improving as we create long-term value per share and build a distinctive leading 21st century company. Our plan for doing so involves executing consistently across three foundational elements, parts of our business that are non-negotiable at all times and under all circumstances. Two others of current importance. The foundational elements are unchanged from when Peter and his early colleagues first grew the company. They are reliability, operational excellence, and disciplined investment. As a gold company, we must be first and foremost reliable and safe. We must have world-class people executing on the ground so that at a bare minimum, there are no bad mistakes. It must be like breathing. Second, operational excellence. The difference between being very good and excellent is small, but it is also the whole thing.
Each leader must know what true excellence is and must pursue it relentlessly every single day. Third, disciplined investment. We have set clear capital allocation criteria, overhauled our capital allocation process, and appointed Mark Hill as our chief investment officer. We are applying extreme rigor to internal requests for capital and to prospective acquisitions. Anything we buy must add material value for our shareholders. As we have said many times now, our goal is to grow free cash flow per share, not ounces for their own sake. We examined a number of external opportunities over the last year, and we passed on all of them. We are moving forward on a number of compelling opportunities for organic growth that meet our investment criteria and that will add profitable ounces to our production profile.
Many of these are in our core region of Nevada, where we have the highest reserve grade in our portfolio and some of the lowest costs. In fact, the more we look at Nevada, the more opportunities we uncover. Mark Hill and Greg Walker and their teammates are working with our leaders on the ground to develop a plan that will unlock the full potential of that asset base. We will share details with you as the year goes on. There are two more priorities of particular importance in this century and that are also consistent with Peter's legacy of relentless innovation. They are the requirement to have a distinctive relationship with China and the need to be state-of-the-art technologically. Nothing will be more important to this century's economics and geopolitics than China, where success depends on deep engagement with governments and other partners.
To ignore China today would be the equivalent of having been willfully blind to the rise of the United States at the start of the last century. Peter Munk knew and believed this as deeply as anything. In a capital-intensive industry, having a preferred relationship with China and its best companies brings new sources of investment, technical expertise, and geopolitical standing that has unique value in mitigating sovereign and financial risk in our business. The partnerships we have created with Zijin Mining and Shandong Gold move us meaningfully down that path, and we will deepen this distinctive dimension to our business in the future. Technology, in particular digital transformation, holds promise for our industry. It can improve the safety of our workers, lower costs, increase productivity, and enhance transparency with partners. Mining is well behind other industries in this area, and it will take time to catch up.
At our Cortez mine, our pilot projects have already increased productivity and reduced costs. As we scale up these successful efforts, the economics should continue to improve. We believe in the benefits, but that does not reduce the scrutiny under which these investments are made. If we do not see the results, we will not continue spending. That is our plan, and we will pursue it with unwavering focus and commitment. That is what it means to be a company of conviction. When we do well, we take heart and ask ourselves how we can do better. When we fall short, we get up and ask ourselves, how can we do better? We keep improving, we keep building. We will simply not relent in creating long-term value per share for you, our fellow owners, and in building a leading 21st century company.
The company Peter Munk would have been proud of. After all he gave us, we owe it to him to get there. We know we will. Of course, it is up to you all to decide whether you think so, too. I will now ask Kelvin to act as chairman of this meeting for the formal business. Thank you very much.
All right. Well, good morning. With your consent, I'll ask Dana Stringer, Vice President, Corporate Secretary, and Associate General Counsel, to act as Secretary of the meeting and representatives of AST Trust Company (Canada) to act as scrutineers. There are three matters to deal with as part of the formal business of the meeting: the election of directors, the appointment of an auditor, and an advisory resolution on executive compensation. For the first time this year, during the meeting, registered shareholders who have logged in with their control number will have the opportunity to vote via electronic ballot. For those shareholders who are present in person, we'll conduct the vote on each resolution by physical ballot. Shareholders who have already voted by proxy do not need to complete a ballot unless you wish to change your vote.
Forms of ballot were distributed to the shareholders and proxy holders when they registered with the scrutineers. Shareholders and proxy holders who have not received a form of ballot and who wish to receive one should raise their hands so the scrutineers can find them and distribute them to those entitled to vote. For convenience, certain shareholders or proxy holders have been asked to move and second the resolutions. Following the formal business of the meeting, we'll be happy to respond to any questions you may have. As the scrutineers have confirmed that a quorum of shareholders is present, I declare the meeting to be properly constituted.
The annual report, the consolidated financial statements, and the auditor's report have been mailed to shareholders who have requested them and are available here today. We'd be pleased to deal with any relevant questions concerning the financial statements during the general question period. We'll now proceed with the election of directors. The board has determined that the number of directors to be elected at the meeting is 15. I believe Hadia has a motion in this regard.
I move that María Benítez, Gustavo Cisneros, Graham Clow, Kelvin Dushnisky, Michael Evans, Brian Greenspun, Brett Harvey, Patricia Hatter, Nancy Lockhart, Pablo Marcet, Anthony Munk, Robert Prichard, Steven Shapiro, John Thornton, and Ernie Thrasher be elected as directors of Barrick.
Thank you. Would someone now second the motion?
I second the motion.
Thank you. If you're participating in the meeting through the virtual platform, please record your vote for all directors now. Each shareholder or proxy holder who's present in person should record their vote for this resolution under item number one on the ballot. When you have finished voting, please sign and also print your name on the ballot. Please keep your ballot for voting on further matters. Ballots will be collected after the conclusion of the last matter of business in the formal session of today's meeting. The next item of business is the appointment of an auditor. I believe Jessica has a motion in this regard.
I move that PricewaterhouseCoopers be appointed auditor of Barrick to hold office until the close of the next annual meeting of shareholders or until its successor is appointed, that the directors be authorized to set the auditor's remuneration.
Thank you. May I have a seconder?
I second that motion.
Thank you. If you're participating in the meeting through the virtual platform, please record your vote now. Each shareholder or proxy holder who is present in person should record their vote for this resolution under item number two on the ballot. It's now in order to consider the third item of business set out in the notice of meeting. The board of directors has adopted a non-binding advisory vote relating to executive compensation to provide shareholders with the opportunity to express their views on Barrick's approach to executive compensation as described in the information circular. I believe Geoff has a motion in this regard.
I move that the advisory resolution regarding the company's approach to executive compensation as set forth in the information circular be approved.
Thank you. May I have a seconder?
I second the motion.
Thank you. If you're participating in the meeting through the virtual platform, please record your vote now. Each shareholder or proxy holder who is present in person should record their vote for this resolution under item number three on the ballot. When you're finished voting, if you've not already done so, please sign and print your name on the ballot. Once you've completed your ballot, please raise your hand so the scrutineer can collect your ballot. The formal part of the meeting is now terminated. We'll report the voting results once the scrutineers have tallied the votes. We'd now be happy to respond to any questions. There are people in the center and the outside aisles with microphones. We'd ask that you please go to the closest microphone to ask your question.
Registered shareholders who have logged in with their control number may submit a question by clicking on the message icon displayed on your screen. Since we'd like to give as many of you as possible an opportunity to participate, please be reminded that all questions should be concise. Let's start with our first question, please.
Hello, my name is Claire Gain. I am a graduate of the Social Justice and Equity Studies program at Brock University. I want to speak on behalf of community members impacted by the Pueblo Viejo mine in the Dominican Republic today. Since Barrick Pueblo Viejo Gold Mine in the Dominican Republic began commercial production, community members of Las Piñitas, Las Lagunas, El Naranjo, and La Cerca who live beside the mine have expressed great concern regarding environmental devastation, which they believe has directly impacted their health and livelihoods. According to community members, the damages caused by the Pueblo Viejo gold mine include, but are not limited to, the pollution of local river sources, the death of 2,200 livestock in the area, loss of over 80% of their cacao production, over 150 community members, children included, with lesions on their bodies.
23 community members tested positive for dangerous levels of zinc, lead, and chromium in their blood. An increase in abortions and stillbirth amongst women. Children unable to attend school due to the odors released from your mining site. One community member stated, "There is no secret that where there's mining in the area, there's pollution. Wherever there is an area of mining, there's horrible poverty because they take the riches while we are left with the holes." After years of attempts of dialogue with little response from your company, community members have taken direct action. Since the early hours of November 6th, 2017, they have occupied space outside of Barrick Gold's production site. They've been chained to chairs for over 5 months, refusing to leave until demands of a dignified relocation for 600+ families impacted by your project are met.
Although community members value their intimate connection to their ancestral land, they've come to the consensus that in order to live full, healthy life, they must be relocated to an area where they can drink water, breathe air, and live peacefully. This is a process that must be done collaboratively with full input and approval by community members. One impacted member stated, "If we have to die of thirst, of hunger, or of cancer, we prefer to die with a bullet in our head defending our land." A circulating petition calling for the relocation of community members has reached over 600 signatures, noting that Canadians are hearing the demands of impacted communities, and we will not ignore your company's disregard for environmental and human rights.
Shareholders, as Canadian citizens, it's our responsibility to hold our corporations accountable for their actions abroad, and I urge you to research the atrocities of Barrick and pull your stocks. Although Barrick does not care about the voices of community members, they do care about yours. Barrick Gold claims to maintain a fundamental respect for the human rights of every individual and community affected by its operation. If this is true, why have you not put the needs of community members before profit and listened to community members in the Dominican Republic, Papua New Guinea, and other areas where you operate when they say, "¡El agua vale más que el oro!", water is worth more than gold.
Well, thank you, Claire, for your question. There's a lot of aspects to it. I'll try and address them as best as I can. I'll move around in terms of order of response. I think the starting point is your comment about not caring about local community members. It couldn't be further from the truth. That's really a priority for us, and it has been from the very beginning at Pueblo Viejo. There are a lot of aspects, again, to your question or comments. I think the starting point, though, is you need to remember that when we first made the decision to invest at Pueblo Viejo, one of the first commitments we made was to clean up the existing environmental legacy that preceded us. My understanding is it's the largest such cleanup in the history of the island.
We're very proud of the work that was done.
Community members claim that the area is much worse off than it was when you took over the area.
Yeah. I think that there's been a lot of studies that show the opposite. In fact, I'll give you just one example. When we acquired the site, there's a river called the Margajita River, which was extremely acidic. When you took pictures of it was actually red. The locals called it the Coca-Cola River, in fact. When you look at the river, it's clear. We do monitoring regularity. We actually do monitoring with community members so they can see the improvement to the area.
[inaudible]
Claire, I think if you go to the site or if you talk to the regulators and you see what's on-site, we have had no negative impact whatsoever at the site. In fact, we've cleaned it up remarkably. Now, the impact, I know that there's been allegations of impact on livestock and crops and so forth. Again, a lot of studies have shown that, in fact, hasn't been the case. From a resettlement perspective, if you go back, it was 2009, I think, was when the resettlement effort took place. Now, at that time, anybody who wanted to be resettled were resettled. Many people chose to, others chose not to. In any event, there are, I think, in the range of 300 families that were either resettled or compensated at the time. Now, some who chose not to, that's fine. They stayed.
We actually have aerial photography that shows the population in the area at the time in 2009. After the resettlement happened and after the project was built, there's been a significant influx of people who've come to the site, some of whom now want to be resettled, and some want to be resettled more than once. The obligation to resettle is a commitment of the government to the Dominican Republic, but we've committed to support them. In this instance, we've also been very open to have ongoing discussion and dialogue with anybody who would like to. Our offices have been open in that respect, and we have had dialogue, in fact.
Have they visited the site where members of the community are chained outside?
We have on a regular basis.
Okay.
It's unfortunate. Our concern is always for those members of the community and to make sure that they aren't harmed in any way by their actions. Obviously, it's their choice. I have to tell you, we're very proud of everything that's happened at Pueblo Viejo. The site is operating very well. We have strong community support. The comment you made about people being worse off for the project being there, it just couldn't be further from the truth. We've done studies that show the benefits and the better livelihoods in the area as a result of the project. It's only been operating for four or five years now.
I think.
Already their lifestyles have improved.
To outright deny what they're saying right now.
People are entitled to their opinion. I think the facts are the facts. Thank you very much again for the question, we appreciate you being here. More questions?
My name is Cressida Kuala from Porgera. I'm an Ipili woman. I represent the victims who were affected by the Porgera Barrick mine. I'm an environment and a human rights defender from Papua New Guinea. I have come here from halfway across the world to speak to you all, as have other men and women from my community over the past 10 years. Sadly, the past year has been another very bad year for my people as the mine continues to contaminate our waterways, irradiate our land, my people are suffering from human rights abuses because of the mine's security forces, its operations. In March last year, numerous houses in Wingimur Village were burnt just next to the open pit mining, were burnt down, again, by heavily armed police who guarded the mine.
In July, the mine dumped chemical waste material that caused serious burns to more than 150 women and children. In October 15, a 15-year-old boy by the name of Boi Nelson Nai was run over by a big truck that killed, by one of the mine's loader trucks. There has been no compensation given by the mine for any of these victims. Also, 119 women who have been raped by Barrick Security guards took their complaint to the United Nations because they are deeply dissatisfied with the remedy Barrick has given to them. Many more women who have been raped by mine securities and police guarding the mine are still waiting for remedy.
My questions are, one, when will Barrick pay compensation to more than 150 men, women, and children who suffered burns from the chemical waste dumped by the mine and for the family of Boi Nai who was killed by the mine's loader truck? Two, when will Barrick finally give the 119 women who were raped and gang raped by mine security the compensations they are asking for? Three, when will Barrick finally give compensation to many other victims, including more rape victims who have filed their claims at the mine's grievance office years ago but have not yet received any response?
Thank you, first of all, ma'am, for coming. You've traveled a long way to be here, so we appreciate you coming today and for sharing your concerns with us. I'll try and address them as best I can. First of all, you commented on the incidents of sexual misconduct that were conducted a number of years ago by the security force at the project, that's something that the entire company finds entirely unacceptable. It was a dark period for us. There's no question. As a result of that, we've tried to improve how we operate. We put in place a remedy framework, which has been acknowledged by the UN as following the general principles for business and human rights, we've tried very hard. It's not perfect. There's no question, and we will always continue to try and improve it.
We have tried to put in place procedures so that we could properly address grievances, the ones you described obviously are terrible. There's a lot of other things that in connection with operating Porgera in that complex environment, there are other issues that we deal with as well, some related to trespassers on the property, others related to just the normal activity and operation of the project, we've had accidents, again, which we regret, but we always try our very best to remedy the situation when we can. Part of the work that's underway at Porgera, I hope you're involved with it and providing us your input and advice, but part of the work that's underway is a pilot program on resettlements. Part of what we're looking at is how we can restore livelihoods to those people that are resettled, provide proper infrastructure.
We're doing this in consultation with the government, of course. All of these activities we can't do on our own. We have to do it collaboratively. Yourself, your other community colleagues, and the government with the company working together, we're going to continue to try and improve. Again, we can't fix the past mistakes. We try to remedy them to the extent we can. The grievance mechanism we think works well. We'll continue to try and improve it. What I can tell you is we genuinely want to do as best as we can. We want to be viewed as a good neighbor in Porgera. To the extent we've made mistakes, we're sorry for them and we'll do better on a going forward basis. Thank you also for being here today. Anthony?
A question from online. It seems companies are grappling more and more with water-related environmental issues. What's Barrick doing to manage this risk, and how are you thinking about that as a company?
That's a very good question. I think first and foremost, and it reflects some of the earlier commentary we've had today, I think our first, our driving priority, is the protection to safety and the health and safety of our people around the world. That's priority number one. A close second to that is protecting the environment. When you think of protecting the environment, to the very top of that list is water, and both conservation, recycling, all the things that we need to do to ensure that we're managing that scarce resource well. We've been focusing that over the last number of years, and I think that we've made good progress, we still have work to do. I think Veladero, for example, last year, 2017, was a sobering reminder for us that we still have work to do. We had an uncontrolled discharge at Veladero.
Fortunately, no impact on the environment or to human health and safety, it's a reminder that we have to continue to do better. We've appointed a vice president of water, first time in our company's history, to show how important it is. It's a specialist who looks at, again, how do we minimize our use of water? How do we maximize our recycling of water? Kind of leading conservation efforts. He's working by focusing on all of our projects around the world, making sure we're doing as well as we can. I do think that, we've discussed this before. I think that if the company and the industry is not careful, water could be an Achilles heel. There will be deposits, I believe, that will go undeveloped because of local community concerns.
I think that what that tells you is from a company perspective, we have to be transparent. We have to engage early. We have to bring community concerns into our decision-making and how projects are developed. As an example of transparency, at Pascua Lama, for the first time last year, our company, and I'm not sure if anyone else is doing it, we're now providing real-time online monitoring data 24/7 so community members can look just at the same time as we do at water quality data. It's a first step, and we're going to see how we can apply that elsewhere. I think that over time, we're going to need to raise our game continually like that. We'll have to protect the resource. It's complex. We're working hard, and we still have work to do.
I have another question online. What are Barrick's views on the gold market, particularly in light of trade disputes initiated by President Trump?
That's an interesting question. Look, trade wars certainly don't help the global economy. I think everybody would agree to that. We've seen escalation of that. We've seen increased volatility in equity markets over the last little while. It's quite a rollercoaster. Having said that, I think the gold price has been positive and responded well in that context, as you might expect. I think what we're seeing is a return to the safe haven aspect of gold. In fact, I think that the gold ETFs are at a five-year high, which is showing you that there is that safety in gold, and that's what we're seeing. I don't think anybody would argue in favor of trade wars, but I think we are seeing that impact and the geopolitical influence on a strengthening gold price. No more questions? Right.
Listen, I'd like to thank everybody for attending today. It was a relatively efficient meeting, and again, particularly thank our guests who traveled from a long distance to be here. We appreciate your input. By the way, I'd also like to recommend that following the meeting, myself and my colleagues, Peter Sinclair is here and others, by all means, there's an open invitation for you to stay and to chat with us and discuss your concerns further. Thank you very much. We'll now go back to the meeting and the scrutineer's report. The scrutineers have confirmed that each of the 15 director nominees named in the information circular and nominated at this meeting have been elected with at least 93% of the votes in favor.
The appointment of PricewaterhouseCoopers LLP as auditor and the advisory resolution on the company's executive compensation approach have been approved with approximately 97% and 94% of the votes in favor, respectively. Detailed final voting results of all the items of business at today's meeting will be filed on SEDAR. Ladies and gentlemen, thank you for attending, and that concludes the annual meeting. Thank you.