Ladies and gentlemen, thank you for standing by. This is the conference operator. Welcome to the Barrick Conference Call. During the presentation, all participants are in listen only mode. Following the presentation, we will conduct a question and answer session.
As a reminder, this call is being recorded, and a replay will be made available on Barrick's website later today, February 2539. I would now like to turn the conference over to Mark Bristow, Chief Executive Officer of Barrick. Please go ahead, sir.
Thank you very much, and good morning, ladies and gentlemen. Thank you for those who have got up early or stayed on late to join the call. We appreciate your time. As you probably worked out, earlier today, we sent a letter to Newmont's chairperson and CEO to propose a merger between our two companies. There have been many unsuccessful attempts over the years to forge such a merger, And the reason for not doing it escapes me because this opportunity has strategic and financial rationale and is so obvious and compelling.
However, while Barrick recently completed a widely applauded dual premium merger with Randgold, which positions it soundly for future profitable growth, Newmont in contrast has, by all accounts, rushed into an ill conceived premium merger with Golcorp, which looks unlikely to deliver significant benefits to their shareholders. This is the reason that we have, after some deliberation, decided to make an unsolicited but clearly superior proposal to the Newmont shareholders. Our proposal is based on sound business rationale and industrial logic. Paying a 17% premium for Goldcorp with its second tier assets and no synergies, followed almost immediately by the departure of Newmont's CEO, strikes me as both desperate and bizarre. Our proposal will create more value than any other combination in our industry, realizing over $7,000,000,000 in synergies alone, and that is before any full potential benefits of us operating their mines is considered.
It is important to note that our annual synergies of more than $750,000,000 per year is clearly identified rather than aspirational targets of future efficiencies. To put this figure in perspective, it is more than the market capitalization of 14 of the top 20 North American listed gold producers and roughly equivalent to over 80% of Goldcorp's entire net asset value. We, as a team, can't wait until after Newmont and Goldcorp merge because we don't want Goldcorp's lower quality assets in our portfolio. Given the importance of this transaction, I direct you to our disclaimer on a forward looking basis and the information that's going to be included in this presentation. The key messages of our proposal are the following: number one, it secures the long term future of Nevada, which we believe is the most prospective location for gold mining anywhere in the world.
In fact, Newmont and Barrick are Nevada. This proposed transaction would allow us to tear down $5,000,000,000 worth of fences. Number two, it brings together the industry's largest portfolio of Tier one gold assets, including two in Latin America and three in Africa. Number three, it will have an unrivaled pipeline of global prospects and projects. Number four, its free cash flow will drive further profitable growth and support sustainable shareholder returns.
Step number five, and perhaps the most important, is to have a best in class committed management team with a long track record of delivering value to its stakeholders. Given that it will demonstrably be the world's best coal company, the potential for further rerating is also significant. As I've said many times, mining M and A transactions rarely create value for shareholders, mainly due to premiums paid on short term price differentials, lack of real synergies and questionable business rationale. It is our view that the proposed Newmont Goldcorp deal is a typical example of this kind of M and A and far from adding value would dilute the quality of Newmont's asset base and double the head office while senior management itself is leaving. Nevada is the crux of our proposal because that is where the bulk of the synergies can be realized.
The benefits of the proposed merger are obvious, as indicated here. Barrick has the bulk of the high grade reserves and Newmont owns key projects in class. Rationalizing these would reduce operating costs, increase free cash flow and reduce cutoff grades, which will increase reserves and resources, extending not only the lives of the mines but also their profitability. And in this slide, we illustrate the synergies I have referred to. While we have similar levels of reserves and resources, the grade of Barrick reserves is nearly 3x higher than Newmont's, and the grade of our resources is even higher.
Newmont's reserve grade is only around 1.6 grams a tonne, and their resources are even less than that. And so the pro form a company would not only deliver increased production at a higher grade, but would make more efficient use of all the processing facilities in Nevada. Building on from this, we highlight the areas we would optimize, such as transporting ore to the closest plants or the plants that provide the best recoveries for each ore type. There are also savings to be made in procurement and logistics. And most significantly, the combination will enable us to consider the whole of Nevada as effectively one ore body, which will result in better mine planning and ensure that the state's enormous geological potential can be realized for all stakeholders.
Incidentally, I have shared all of this with Newmont already, but to no avail. Other synergies, as already demonstrated at Barrick, will come from running the company as a modern mining business should be run by flattening the corporate structures, focusing our exploration efforts on the most prospective target areas and integrating our supply chains. As for the competence of our management team, the eight weeks that have passed since Barrick's merger with Randgold tell the story. In that short time, we have integrated the two companies' managements, rationalized and repurposed corporate office administration, which delivered a savings of approximately $150,000,000 We established regional executive teams in order to ensure that our businesses are run at the mine site and not by remote control. We have also defined an additional $200,000,000 in annual savings, which we will deliver before the end of next year.
We also created $5,000,000,000 of shareholder value when we announced the Barrick Randolph merger back in September and have outperformed our peers. There can be no doubt that we have the people to create that value for both sets of shareholders. Our proposal to Newmont is simple. We will combine in an at market deal, which equates to 2.5694 Barrick shares for each Newmont share, giving Barrick shareholders around 55.9% of the merged company and Newmont shareholders 44.1%. Key conditions are that Newmont terminates the Goldcorp transaction and enters into a merger agreement with us.
The merged company will match Newmont's annual dividend of $0.56 per current Newmont share, which based on the exchange ratio will represent a pro form a annual dividend of $0.22 per new Barrick share. Assuming that Newmont's transaction with Goldcorp is terminated, we expect that our transaction would close in the third quarter of this year. And here, you can see a value creation comparison between a Barrick Newmont merger and one between Newmont and Golcor. As this clearly illustrates, the Barrick transaction creates far more real value for shareholders. With $7,000,000,000 of synergies shared with all shareholders at our multiple, we are, in fact, offering Newmont more than $41 a share in value.
So the synergies are clearly the premium. And here, we highlight the benefits of the merger to all shareholders. This is the pro form a portfolio of Tier one gold assets. We will have eight Tier one assets, and we'll create another one or two. Importantly, the vast majority of our pro form a asset base and value will be concentrated in our Tier one portfolio, putting us in a very enviable position to achieve portfolio optimization without sacrificing the profitability of the business.
By the way, the optimization of Barrick's asset portfolio is well advanced, and we expect to generate over $1,500,000,000 in the near term. Post combination with Newmont, our teams will review the combined portfolio, applying the same filters currently in place at Barrick with the goal of maintaining the best production, project and exploration assets in the industry and placing our noncore assets with the best owners. We have had numerous expressions of interest to date, and we have had numerous approaches to participate in this process. Cash proceeds can be used to provide returns to our shareholders or in turn buyback shares. And here you can see that our operations are spread across the world's best gold region regions, and our portfolio has a very balanced political risk.
So ladies and gentlemen, to sum up, we are offering Newmont and Barrick shareholders an exciting opportunity to own the world's best and most valued gold company. A combined Barrick Newmont offers shareholders a significant reroking potential due to its superior asset base while realizing $7,000,000,000 of real synergies. In addition, it will have the highest levels of free cash flow and a management team with a long record of delivery. We are making this proposal because it is in the interests of both sets of shareholders, and we as a team are fully committed to seeing it through. Thank you very much for your attention, and we'll be happy to take questions.
We will now begin the question and answer session. If you're using a speakerphone, please connect your handset before pressing any keys. To withdraw your question, please press star
then 2. We'll pause for
a moment as callers join the queue. The first question comes from John Bridges of JPMorgan.
I was just wondering, you've been to Nevada, you've spoken with Newmont about opportunities. I just wondered whether you considered the idea of a JV as sort of combination under one corporate management, but still where you and take fifty-fifty or some other percentage of that? And how that would compare to this proposal? So
John, thanks for that. Yes, we have, as you can imagine. And I can say that, as you know, Barrick and Newmont have had many conversations going back some time. But going into the finals on the Barrick Randgold deal, Barrick had a number of conversations with Newmont on various options, whether it was a full combination or unification of Nevada or anything in between. The position of Newmont at the time was that they wanted to have management control at 50%.
And very clearly, as you know, Newmont has a lot lower asset quality in Nevada than Barrick's portfolio. And so it didn't make sense that our engagement with Newmont was surely we should get together and look at facilities, and we should do what's best for our owners rather than setting conditions before we even got to evaluating the synergies. And I picked up on that, both at Denbo when we made the announcement and then subsequent to that. And the only response that I got was that, in fact, I had this conversation with the CEO, and he very clearly asked him that he had looked at facilities in Nevada. And he confirmed that he had not looked at the synergies since he's been he was in the CEO position.
And I found that very strange because that's the first thing I did was spend time at Nevada. And what makes no sense to me is all these trucks driving around the state, passing each other, transporting ore. And so we spend an enormous amount of money collectively just on transport, let alone on how we can combine things and unlock the cutoff grade, etcetera. And so and again, Newmont has not spent any capital of substance in Nevada for a very long time, whereas Barrick is fully committed to unlocking the value that its geologists have delivered in Nevada. So and now we have a real management team, which understands that opportunity.
And if anything, the combination of Nevada under one management team simplifies the whole business that we are currently working to deliver on in Nevada. Okay. And maybe
as a follow-up, I fully understand your interest on the synergies, and and we've written about it in the past too. So if there are such big opportunities there, then why no premium sweetener for the eWatch elders? You know, is this all share offer full and final, or or is there opportunities to sweeten the deal?
So I've never seen in my time, John, in this industry, which is not dissimilar to yours, I've never seen a premium as high as it's ever offered in the industry. If you take the $7,000,000,000 of synergies, which we're offering, that's a premium in itself. And by the way, you've seen the market respond on the share trades, and that is value created. So definitely, the markets recognize that our proposal has a lot more makes a lot more industrial sense than the proposal of trying to combine Newmont and Goldcorp.
Our next question comes from Matthew Murphy, who's with Barclays. I was wondering if you could provide some more color on your $4,700,000,000 Nevada synergies breakdown by what's cost out, what might be the enhanced utilization of reserves, etcetera?
Well, I'm very happy that we go through this with you in the fullness of time. But I would just point out that G and A is a substantial part of this, just eliminating the regional businesses, duplication of the supply chain, the stock standard or bulk standard operating costs. Mining. The underground mining costs at Newmont are still significantly above the Barrick cost. And again, we have spent time with the mines, and we believe we can improve on the already messaged improvements that Barrick are working towards.
And we believe that there's no reason that we can't do the same with the Newmont assets. Just looking at shared mining fleets, the whole thing, the balance between owner miner and contract miners is a substantial amount of the synergies. The replacement and rotation and optimization of the piece as some of these bits come to an end and we start up new ones, maintenance and planning, current supply chain. And then one of there's an example I'll just give you an example. The synergies between Goldstrike and Carlin are very real.
And again, we cross each other. There's ore transported right across Nevada when Goldstrike Roaster is sitting a few miles away from Carlin or the Carlin complex. And of course, the Turquoise Ridge Twin Creek joint venture where Newmont has 25% of Turquoise Ridge, it is basically throttling the Turquoise Ridge value because of its very high toll treating contract, which it forced actually last year and revised TMA.
And that
effectively has added two grams to the cutoff grade of Turquoise Ridge. And I've had these conversations, by the way, with Newmont. And it makes no sense for me because we're leaving high grade ore underground because we have to try and deliver a profitable business to our joint venture partners, Barrick and Newmont. And so putting those two assets together makes eminent sense and unlocks a larger NPV, which will benefit both shareholders. So we are very comfortable with absolutely the specifics.
We haven't there's still other opportunities that are more difficult to put real values to, which I've got no doubt we will unlock. And Nevada as a whole needs a reinvention. And what we've done with the Barrick team is really gone a long way down there, and it's been relatively easy. And so I've got, again, what I've found in this mining industry, when you put people together and take away their head office control, you really unlock further value, value that you don't you can't really measure. So I just the more we look at this, the easier it is to unlock this value.
And in fact, a combination would really make our job easier. And what it reinforces is that it really is an asset that should be run by one team with one focus and one responsibility.
Our next question comes from Josh Wolfson of Desjardins.
Mark, first question. In the pro form a analysis, Barrick incorporated the assumption that Newmont will pay Goldcorp the $650,000,000 bridge fee if that transaction falls through? Yes. Okay. And then secondly, you know, there had been some rumors about other assets within the combined Barrick, Newmont portfolio that could be sold.
I had noticed that the presentation doesn't outline Bovington and Cannavai as core assets. Could you maybe provide your thoughts on those assets in the portfolio?
Josh, you'll have seen that I've been very careful not to start public auctions even in the very grand gold portfolio. And we and what I can assure you that we're far down the road in engaging interested parties to bring those assets that don't fit in our plan to account. And the same goes for Newmont. As you can imagine, I mean, the Australian assets are really very profitable long life assets. And they are and the question is, do they fit into our plan?
Or are they better managed in the hands of more focused operators. And again, as I pointed out in my presentation, we're not short of interested parties. We've had conversations. We've got expressions of interest. We're very comfortable, in fact, on all the assets that we that might not fit our filter, we have interested parties that have expressed an interest.
So we'll we are comfortable we'll bring those assets to account. There's no rush to do it. It will be one of our focuses is to clean up this asset because, as you know, Josh, I've always talked about this industry and how it's running the risk of becoming irrelevant because it's just a connection of assets rather than a very focused sort of strategic distribution of the assets with the best management teams to create value. And I think we can play a real role in ensuring that happens. And the consequences of that will have roll on effects that will create value for our shareholders as well.
Got it. Okay. And then one last quick question. I did see the Newmont press release yesterday about seeking the lowering of the shareholder percentage to call a meeting. Has Barrick secured any support or written support, for that matter, from shareholders in Newmont?
So I couldn't answer that question right now. Would be inappropriate for me to do so. But what I can say is that we have common shareholders across these companies. And what we've seen both with the excessive break fee and some of the activities, I mean, and the fact that management is leaving, it's just hard for me to understand whether all this is in the best interest of owners and stakeholders. And so all we're in our finding is suggesting is that this should be up to the shareholders to decide, and we should be prepared to expose ourselves as managers and deliver and argue the opportunities to create value and let our various owners make that decision for us.
The next question comes from Michael Satuko, who's with Macquarie.
Please go ahead, Michael. Thank you. Maybe bit
of an unfair question, but in the context of Barrick's ongoing talks with Newmont and, of course, Barrick's merger with Rangel, can you comment on why you think Newmont makes the offer for Goldcorp in the context the sector and positioning in the sector? Is there an opinion you have about how they saw the business evolving and why they made that move when they did?
Well, I think that's a very good question because, clearly, they haven't convinced you in that. And and I'm still trying to work out exactly that, and it makes no sense given that we've been engaged. And and this is a natural fit, and it and it really is an important step in the reinvention of our industry. And I think we, and certainly I am, because as you know, I did the deal with Barrick and committed me and my management team to deliver on our strategy, and I'm doing the same on this. And we've got a great bunch of young executives capable of delivering on this transaction, and we definitely have the rationale behind our proposal.
And I think if there was a strong rationale behind the Newmont Blancorp transaction, we would probably not be making this proposal.
Okay. Great. And maybe just as a follow-up, if you're looking at the sector, in terms of what investors are looking for, in terms of what they're telling you, obviously, how the sector has evolved over the last five years or so. Can you talk about what Newmont and Barrick brings to the table in terms of the scale and diversification, especially relative to alternatives to producers that we're seeing in terms of investing in precious metals? Of course, beyond the industrial logic there, is this how do you justify the sort of two plus two equals five equation if that's the claim you're making and forth?
Yes, that's definitely the claim I'm making. So $7,000,000,000 what part of $7,000,000,000 does you think has value? That's the first point. The second point is this is a business that's as good as its management and the ability to deliver. And again, management is about individuals, and I have built a team around me over the last two decades.
And that team is relevant for a modern, effective, efficient, real time, agile management that will be capable of taking this on. So that's the most important ingredient in any business. Secondly, if you want to be a world class business, you should have world class assets. And that goes particularly when you talk about mining because our revenue comes from the quality of our assets. And this combination really delivers eight Tier one assets into the hands of what we believe is the best management team in the industry.
And it has the opportunity to further unlock or hatch additional Tier one assets because of the combinations, particularly in Nevada. And so in fact, what is intriguing about this proposal is it's actually quite simple. It's not a complex proposal. I mean, in fact, Newmont's real growth is in Africa. And one thing that no one can argue about is we've got a real African experience.
I mean we know how to operate in Africa. We can assimilate that part of the portfolio in a heartbeat. We have a dedicated, focused, long serving executive team specifically for Latin America, and we run some of the biggest assets in the gold industry in that region. And that team could do with a few more assets. So that part of the portfolio is well cared for.
New bond the combination in Nevada makes our job easier because it allows us to operate the mine, the portfolio as one business. And so we don't see any need for any additional oversight or corporate structure or anything else. I think I proved to everyone that in this modern world with the systems that we have, you don't need a huge head office. You need a more focused corporate set of skills that can hold the various businesses to account. So we have no idea why Newmont would want to double up on its head offices, whereas we look to reduce those head offices.
So that's the rationale, whether it's an industrial logic or just a business logic. It makes sense. And at the same time, every point I make on the opposite side, we can't see relevance in the presentation of the alternate. And I would again repeat that we haven't been I was never induced to do the deal with Barrick. I've never sold any stock.
I certainly didn't sell any stock during the transaction. And I've committed to bring my team for the long term to deliver on the Barrick Grand Gold merger and this one as well, which is in stark contrast to what's being presented from the other side. So that's the way I would debate the differences. Maybe if I could
just ask one small follow-up there or or ask that slightly differently.
Do you
see inherent value in having one company at the top of of the producer producer list at a $40,000,000,000 market cap with that list of assets versus having 2,000,000,000 competing for capital and attention and everything else. Is that something that you
look at as well? Yes. Think the point is that we really want to attract generalists into the industry. We want to be relevant, and we think that $40,000,000,000 is relevant. I mean we're as we stand today, we're much more relevant than we were independently.
But again, the point here is that most of the value destruction in the mining industry is a result of corporate oversight. Or back layoff. And we feel that we have a real track record of being disciplined. We've shared with the market our strategic investment focus. We have a very public record of what we intend to deliver.
And again, whilst we will be the biggest, more importantly, we would be the most valuable. And again, if you worry about other $20,000,000,000 market cap companies in the industry, this transaction, I believe, will go a long way to support the delivery of new $20,000,000,000 businesses run by much more effective and efficient management teams.
The next question comes from Kerry Smith with Haywood Securities. Please go ahead.
Thanks, operator. Mark, if the bulk of the synergies, as you say, are in Nevada, which I would agree with, I'm really not some combination ratio on a joint venture that would make still make sense. Maybe it's not fifty fifty, but there has to be some workable arrangement that would make it work and then you wouldn't have to pull in all of the rest of those assets, which by your own commentary don't seem to really add much to the picture other than giving you more production.
So they're hi, Kerry. Thanks for that. They're all profitable businesses, and we've got no doubt that, as I said to you, when we start running them, we'll make it better. But I would just add, we've tried, and I can tell you without fear of contradiction, John Thornton tried. He tried repeatedly.
He tried again just before we announced our transaction. I have tried. We have experience in joint ventures with Newmont, and I come untainted in this relationship. And it's been less than transparent and open and certainly not focused on delivering value for our owners collectively. So I would say, at the end of the day, as in most good businesses and even teams, whatever teams they are, you need one leader with a real commitment and the ability and commitment to be held accountable.
And so I think after that, I always say it's a biological impossibility to be half pregnant. And we are fully committed to being accountable in this transaction.
Okay. And Mark, just on the merger itself, does that hit your 20% return or maybe 15% return on $1,000 gold?
So we've got, as we've disclosed, we have Tier one assets. Have you ever tried to get a 15% return out of gold mines at a long term price of $1,200 That's a plus 500,000 ounce producer for more than ten years. So this already, when you look at the $7,000,000,000 of uplift, it's and this is an instant value. Remember, it's a corporate transaction, but it's definitely not a value destroyer. And we believe that, as we've indicated, there's a tangible deliverable value in the form of the $7,000,000,000 of synergies.
There are more intangible opportunities to deliver further value. One of the key ones is Turquoise Ridge and repositioning it as one company with Twin Creeks and unlocking the full potential of what is undoubtedly one of the highest value gold projects on this planet. And then we've got the Goldrush four mile project, which is power account looks to be as good, if not better than Turquoise Ridge. And again, that asset needs access to processing facilities and so on. So and again, we would we believe that there are important opportunities to unlock value in Africa in the Ghanaian assets.
As you know, we've looked at Ghana for a long time. We've got a very long history in looking at opportunities in Ghana. And what and so and right after the blocks, this delivers real value for both sets of shareholders. And this is not a win or lose opportunity. And so and combining the portfolio of exploration opportunities with our, again, focus on exploration, our ability to manage social license is a critical component and is required to deal with a very large liability embedded in Newmont in the form of their Peruvian operations.
As you know, there's been a long history there around social license. And so I think collectively, there's apart from the tangible deliverables, which is important to us, there are many other opportunities to create value in this bigger portfolio.
Okay. Mark, can I just ask one last question? When you said that the the team had engaged with Nuance prior to the announcement of the deal with you, would it be fair to assume that that engagement was not at the due diligence level? It was just it was conversations at a high level. And as a as an old as a converse to that, have you and your team ever had any chance to do any physical due diligence on the Newmont assets?
No. We don't I mean, we we we employ a large number of ex Newmont people as things have changed in Newmont. So I think we've got a very good knowledge of the Newmont portfolio. And it's an open secret because there's not much added secret in Nevada. So I think and the ore bodies are similar in some instances the same.
And so geologically, it's easy to model the synergies. And you would have known I mean, you know that there was a lot of work done by various parties on both sides at the beginning of this decade to look at ways to go forward. So and and that's that's my business is to worry about, you know, opportunities and gold assets and and how we can deliver better value, and we've spent a lot of time doing that.
The
next question comes from Brian MacArthur, who's with Raymond James. Please go ahead, sir.
Good morning. I'd just like to go back to synergies, and I know you want to don't want to get into a big detail here. But one of the other things that you've talked about is in the industry is capital allocation. So of the 4,700,000,000.0 you talked about trucks and everything, which sounds to be more operating. But as far as reduction in capital going forward, and what I'm really thinking here is avoiding building new processing plants in Nevada.
Will that count it in the $4,700,000,000 Or do you see that as another potential benefit to the NPV going forward?
So we haven't accounted that in the synergies, but it's a real opportunity to prevent additional capital. As you know, I mean, if you just look at the capital spend over the last five years, Cleric has spent 56% more total capital than Newmont over the last five years. And if you look forward sorry, and if you look at just the growth capital component of that total capital, Barrick has spent 250% more than Newmont. And we have new projects. So for if you pull out any of Newmont's presentations, Nevada is not a growth center.
It's not a growth focus for Newmont. It is for Barrick. And so as I pointed out in my presentation, we've got real high quality assets, which, again, is unique in this industry. And bringing them to an account by accessing the Newmont infrastructure where it's appropriate adds real value. And we've done that.
And the flip side of that is that Newmont mines itself out of business, and we go and waste money on new infrastructure, which doesn't make sense at all. And that's the problem in this gold industry is that we will rather go and build a new mine to keep control than to access and optimize ore bodies and infrastructure. I think the Australians do it much better than anyone else in the industry. But this is the real example of that. I think you've touched on a very important point.
Correct. So on simple terms, we can kind of assume the $4,700,000,000 just basically maximizes efficiencies using current assets. So I can think of that as opposed to including anything else.
Yes, exactly. And further and we were very mindful that to do this, we had to demonstrate deliverable synergies. And at the same time, the prospectivity, the Barrick team discovered the Goldrush profile project, which now looks every we're busy drilling the gap between the two, as we pointed out in our quarterly results. And everything looks like this could well be one ore body, one giant high grade ore body. And the question that I ask is we have is there a prospectivity to find another one like Goldrite StorMile?
And I can answer the question, having spent time there, absolutely. And again, Barrick has the prospective ground, and a lot of it is associated with and adjacent to Newmont's infrastructure.
The next question comes from Terry McRury of Canaccord Genuity.
Hi. Good morning. Just had a question.
You know, the Randgold Barrick merger is about two months old now. You've got a new management team.
You know, you're still working through the plan on the
Barrick assets. You know, is there a risk here that you're taking on
too much too soon with with a a merger of
the size? You're gonna be
a 10,000,000 ounce producer?
For sure, there's no new team. This team has been together for more than two decades. And what it is is we've got a a few extra members in this team, again, which we've worked at going back to July because when John and I went and John and I have been talking about this combination of Randgold and Barrick for three years. And we started we went and put the top 11 executives from each company together in back in July and said, is this does this make sense? Can you play in this game?
And what are the issues around it? And what do we need to address? And so this is a transaction that was put together at complete inputs of the executive team members that are going to run the business. And so we're out of the blocks, and we're running this business, as you've seen. You saw the I mean, you just have to read the press on how we reorganized the corporate office with as far
as
the local offices and oversight is concerned, we've done that as well. We've got three top executives and proven executive teams on-site running The Americas under Catherine Roll, LatAm under Mark Hill and Africa under William Yakos. All three who know the assets, understand the business. Catherine was the CFO of Barrick, and she understands that business backward. And so you don't see any there's been no gaps.
There's been no stalls or stumbles. And the point here is that the Nevada team, which includes Greg Walker, who was the Chief Operating Officer of Barrick, and he knows those assets backwards, Along with the ex exploration executive out of Newmont, who's our African American focused mineral resource lead. Their business is made easier with this transaction, not more difficult. So this is not a, you know, this is not a case of turning up the volume of the fire hose. This is reducing a fire hose down to a garden pipe.
And in South America, we've gone a long way to deal with those challenges because they are it's a challenging area, but at the same time, it's an area of growth. And again, I've met with the national leadership and local governments across that region. We believe that we have the ability to grow our portfolio in this part of the world. And again, the U. South American assets are will complement our portfolio there.
And Africa, I think, you don't have to spend much time explaining our competence. That's our the Randgold succession team, which has taken over that part of the world.
Great. Thank you. The next question comes from Tanya Jakusconek of Scotiabank. Please go ahead,
Okay. Good morning, everybody. Just a couple of questions. First, Mark, so so it appears that my understanding is that you tried to do a joint venture agreement with Newmont, and it just they were not willing to do a joint venture. Is that a correct assumption from you?
Yes. We just try to sit down and talk synergies and what's good for us owners. Our That is correct.
And it broke down on the 50% and operatorship control from the Newmont side?
It broke down on Newmont deciding that they want to have absolute control in a situation where they don't bring that sort of value. And at the end of the day, this business is not about as I said at the time, this business is not about demand. This is about fitting the best teams to the best assets to make sure that we deliver the best value. And by the way, subsequent to that, those people are leaving.
Okay. Maybe we can leave that and move on to I think in in 02/14 when when we looked back at doing a merger, then I think the synergies were a billion at the time, and half of that was in Nevada, which got which about 500,000,000, which is what you're showing today. But at the time, part of those synergies were also infrastructure. There were the coal power plant, the natural power plant, like there was other infrastructure that was going to add to the synergy. So maybe with the $500,000,000 in annual synergies, can we get a better breakdown?
Maybe Catherine can give us a better breakdown of the synergies, even percentage wise, what is operating, maintenance, water? You know, somebody can give us a bit more color because it just seems that it's almost the same number as it was in 02/14.
Well, it it might be, but it's definitely not based on anything that happened in 02/14. You know, the things have changed. But at the same time, both things have stayed the same. We can certainly give you a a a rough outline of of the percentages. So, Catherine, do you want to
Okay. If I do them in order of sort of size and scale, so you're totaling between sort of $450,000,000 well, between $500,000,000 for the first five years, dollars 400 for sort of ten years, and then sort of $3.50 after that, and that will get you to the 4,700,000,000.0 number. So in order of priorities, rather than breaking them out individually, you've got the integrated planning benefits that we have identified. And I would say this is a first pass and that as we do more due diligence and as we understand better, we would expect these to go up, not down. And really, it's around the preferential processing of underground ores, maximizing the use of the two roasters.
So they're Mill six and our Goldstrike. And really, as Mark said, focusing on sending the right ores to the right place. And then removing what we would describe as subeconomic production and and therefore the capital associated with that. In addition, with that integrated planning comes the lower mining cost assumptions, which lower your cutoff grade, which allows you to increase mining rates. Yeah.
Well, if I'm on
the roaster, I I think yours was always running about $2 a ton. It was a $2 ton dip difference between the roasters.
Is that still a little bit? Yeah. There's a cost in recovery difference, exactly. So we've not assumed an improvement. That that's upside as to whether we can do whether we can see whether we can run the NewmontRaster differently.
Mhmm. So then on the back of that, you've got the g and a removal. That's the second biggest item after that. Within Nevada. You've got further fleet benefits, sharing of fleets across the businesses, consumables, contracts and services, the supply chain effectively synergies within Nevada, the central warehousing really benefiting from operating this as one entity rather than two and removing all of that duplication, improving our negotiating power with suppliers.
You've then got the Turquoise Ridge impact. So the fact of not having to have the overhead associated with that joint venture, removing costs out of that, transport costs, etcetera, etcetera. And then there are a number of different other rats and mice that sit within that. And so in priority, that's how you get to that between sort of 350 and 500,000,000 depending upon which period you're looking at to to totaling a a 4,700,000,000.0 over twenty years.
Mhmm. And and if you were to to take a guesstimate on the mining versus processing and g and a, like, all of that, would you say the majority of it is in in the mining and processing?
Yeah. Well, if you were to add up the integrated planning benefits, which includes lower mining costs along with fleet sharing, then, yeah, that's probably a half to two thirds of that value with Nevada GNA being the second largest after that.
Yeah. Okay. That's helpful. Thank you.
This concludes time allocated for questions on today's call. I would now like to turn the conference back over to Mark Bristow for any closing comments.
So thank you, everyone, for your time at short notice. Really appreciate that. Again, the team is available to take on any calls as you monitor our presentation, and we will be at the BMO conference for the next three days. I know we'll probably be meeting most of the fund managers on this call in the next three days. I will be in following that up with catching the people that don't want to get down to Miami and New York and Toronto later this week and early next week.
So again, as you know, we're always open to anybody wanting to seek further information. And again, thank you for your time.
This concludes today's conference call. Should you have any additional questions, please contact the Barrick Investor Relations department. You may now disconnect your lines. Thank you for participating. Have a pleasant day.