Good day, ladies and gentlemen, and welcome to the Barrick Randgold Global Analyst and Investor Conference Call. Hosting the call today is Mr. John Thornton, Executive Chairman for Barrick Gold, and Mr. Mark Bristow, Chief Executive Officer for Randgold Resources. At this time, all participants have been placed in a listen-only mode, and the floor will be open for questions from investors and analysts following the presentation. If you wish to ask a question, you will need to press star then one on your telephone keypad. It is now my pleasure to turn the floor over to Mr. Thornton. Sir, you may begin.
Thank you. Good morning, everyone, and thank you for joining us. Today, we announce an important step in taking Barrick back to the future as we combine with Randgold to create an industry-leading gold company through the recommended all-share merger of our two companies. Barrick and Randgold are cut from a single cloth. Mark has said Randgold was modeled on Barrick as it existed in its early years under the leadership of Peter Munk and Robert Smith, the very culture we at Barrick have spent the past four and a half years working to recover. It is no accident then, that I believe our two companies now think and act in the same way. We share a deep commitment to a partnership culture, both within our companies and in our relationships with our external partners.
We both employ a decentralized business model, a small, high-quality corporate office focused on the disciplined allocation of human and financial capital. We are both obsessed with talent and relentless in our pursuit of operational excellence. We are both committed to financial prudence, particularly in maintaining a strong balance sheet. Perhaps most important, we are of one mind about the true source of shareholder value in the gold industry. Per-share returns over the long term as measured by growth in free cash flow per share. While we share the same culture, we also combine different strengths that are perfectly complementary. Randgold has the agility and swift-footedness of a younger and smaller company, much like Barrick in its early years, while Barrick has the infrastructure and global reach of a large public company.
Most important is this, Randgold has a proven ability to operate successfully in some of the most challenging environments in the world. While Barrick has been building relationships of depth and trust with China, which we believe offers financial and political risk mitigation. In a world of declining gold reserves, the combination of these two strengths is a competitive advantage. There will be several other distinctive advantages. The combined company will have five of the world's top 10 tier-one gold assets by total cash cost. We will have the lowest total cash cost position among the senior gold peers. We have the potential to add to these tier-one assets with extensive land positions in many of the world's most prolific gold districts, and we will be able to redeploy top talent across both organizations to create new value immediately in our most important regions.
At Barrick, our merger with Randgold fulfills our vision of becoming one of the leading companies in any industry or region. Today, we graduate from taking Barrick back to the future, and together with Randgold, we begin to sprint into the 21st century. I will now hand it over to Mark to go through the presentation, after which we will both take your questions.
Good morning, ladies and gentlemen, and good afternoon, for those phoning in from Europe. Thank you, John. I agree today, we create a new champion for value creation in the gold industry. It was quickly apparent back in 2015 when we had our first conversation, that's John and I, that we had similar visions for the industry's future. In the years since, John and his team have significantly restructured the Barrick balance sheet and reduced debt by several billion. In recent months, we realized the power of combining forces to drive additional financial and operational gains between our organizations. Just before we go on with the main presentation, it's important that you familiarize yourself with the disclaimer, and I'll just give you a moment to read it. Thank you. As John points out, the motivation for this deal is a powerful one, and you can see how, why.
Holding five out of the top tier 1 gold mines spanning several promising gold belts. Barrick will be the undisputed industry leader and have the lowest total cash cost position among senior producers. These high quality assets will be run by a management team that combines Barrick's efficient operational capabilities with Randgold's entrepreneurial skill and track record of successfully managing operations in complex regions. All of these attributes underpin our common vision for long-term value creation in this combination. Barrick already holds three of the world's 10 tier 1 assets based on life of mine, cost, and production metrics. Randgold will contribute two additional tier 1 assets. The combined portfolio also includes several projects, as John has pointed out, and recent discoveries that will support Barrick's market leadership far into the future.
There's not the fact that there's no one else that has more than one tier 1 asset, and we have visibility of potential to add to a already robust portfolio. The new company has the opportunity to build on existing partnerships and support alternate value initiatives. Likewise, the copper portfolio is rich in opportunities for investing in a high-demand metal closely affiliated to gold. To deliver a world-class business, you need world-class people. Barrick will have a proven management team with a track record of creating wealth for all its stakeholders and driving return on invested capital, reducing costs, and driving efficiency throughout a compelling portfolio of assets. Barrick also includes outstanding exploration operations, as you know, a geologist myself, I can personally attest to the quality of that combined team.
Just on the top structure, John will remain as Executive Chairman, providing leadership at the board level and guiding business decisions on a macro level. As President and CEO, I will have day-to-day operational control over the business. Graham will be the Chief Financial Officer, and Kevin will be the Head of Strategic Matters. Two-thirds of the board will be initially appointed by Barrick and one-third by Randgold directors. In these key metrics, Barrick and the pro forma is the new leader with the highest EBITDA margin and lowest total cash cost position among senior gold peers, which means we'll be able to invest in growing the business while at the same time returning capital to shareholders. This map shows the location of the combined group's portfolio of projects and operations. As you can see, about half of these are in what might be called complex jurisdictions.
We don't have a choice of the places to build mines. To thrive, we have to go where the gold is. This is something I've always pointed to. Barrick's operational capabilities will be enhanced by combining with the Randgold team, which has a track record of developing and operating profitable gold mines in difficult environments. Barrick contributes a further dimension in the form of its strategic relationship with China, together we are fully equipped to manage and grow this portfolio, which offers the potential, as I said earlier, to deliver more tier-one assets. Together, these two businesses will create a truly dynamic force in an industry that has trailed the market.
Barrick will offer a core investment with deep liquidity, a combined track record of success in discovering, developing, and operating tier-one assets anywhere in the world, a diversified portfolio across terrains, prudent and disciplined management with a strong entrepreneurial flair, a significant rerating potential. Barrick will focus on four key things. The development of core assets and the sale of non-core ones. Continuing to decentralize management with mine-based decision-making authority. Streamlining all operations, maintaining a powerful balance sheet supported by continued investment. There's also a significant potential to rerate over time, given the quality of the combined asset base and the proven management team. We will have the lowest total cash cost and the highest adjusted EBITDA margin relative to other senior gold peers. Barrick has been transformed in recent years with its focus on cost-cutting and the disposal of non-core assets.
Barrick has reduced its debt quantum considerably while also significantly improving its maturity profile. It is now positioned for a new growth phase led by a strengthened executive team. Randgold, on the other hand, is the industry leader in terms of operational delivery, returns, margins, and share price, delivering superior free cash flow. We will now be able to step beyond our African boundaries onto the global stage. I've often talked you through the different elements on this slide, the combination of our assets, our management teams, and our shared approach to investment and growth gives the combined shareholding of this combination ownership in what we believe to be the industry's leader. At the heart of the merger is the two companies' shared belief that a gold mining business must calibrate itself to a changing market that demands real value creation to attract new investment.
It also must provide shareholders with a sustainable return base. Barrick, I believe, and I talk on behalf of both John and the new combined pro forma executive team, for want of a better word, is starting from a solid asset base with clear plans for optimizing performance and finding new opportunities. The merger will deliver value based on not a takeover premium. In fact, no takeover premium, as John has pointed out. More importantly, that point I've always talked about, and that is the proven business methodology, guided by long-term strategy and implemented by a results-driven management team with strong leadership. This slide just summarizes the transaction terms.
It'll be an at-market all-stock merger at an exchange ratio of one-third, two-thirds approximately, which means that the Barrick shareholders will own 66.6% of the new company, which will still be named Barrick, while Randgold shareholders will hold approximately 33.4% of the new entity. John will be as Executive Chairman, as I've already said. I'll be the President and Chief Financial Officer, and Graham, the CFO, and Kevin, Head of Strategic Matters. Initially, as I've already indicated, the board structure will emulate the combination ratio. That's really our presentation, and we'll be happy to take questions as John indicated.
Ladies and gentlemen, if you'd like to ask a question over the phone lines, please press star then one.
Operator?
One moment, please, for your first question. Your first question comes from the line of Kerry McCurry. Please go ahead.
Hi, good afternoon.
Good afternoon.
Maybe a couple of questions for Mark. Growth has been a pretty consistent part of the Randgold story for a long time now. I'm just wondering, in terms of the NewCo, how do you think about growth going forward?
I think, you know me, Kerry, growth is the definition of growth. Sometimes in this industry of ours, we get confused about gold production and real growth. The only growth that we've ever focused on is the growth in value creation and the ability to deliver value to your stakeholders and all stakeholders. Not only shareholders who are our most important stakeholder, but the host countries in which we operate, our own employees, et cetera. What this combination does is it broadens the base on which to build that value. It really gives us the luxury to focus, and as Randgold has done, on the top asset class within our industry. As John pointed out, we start off with five out of the top 10 gold deposits or gold mines in our industry.
What's more importantly, and therein lies the growth, is the visibility of potentially new tier 1 assets. Again, our sort of agreed approach is we start off with a particular NAV, a consolidated net asset value of this combination, and how do we leverage that and grow that NAV in a way that it delivers real value, not only continued equity value, a per share value for our investors, but also a realizable cash flow value in the form of returning some of that cash flow to shareholders as we've done so successfully at Randgold Resources.
When we look at where we are in Randgold Resources and our ability to leverage what we've built, also where we look at Barrick as it is today and where it's got to, both companies need to come up with a new way of continuing to deliver value for shareholders. I've been on record for a while now to say we were successful in the last 2 decades and some in the way we did it because of our management structure and our particular approach and our very clear focus on Africa. To continue to be successful, we've got to recreate ourselves and build a new company that can sustain that sort of delivery for shareholders going forward in the next two, three decades ahead of us. We've, over the years, debated that, and we believe that we've come to a consensus.
When I say we, I don't only mean John and I mean our collective executive teams, that together we can do a much better job than if we sort of try to stick with what we've currently got.
Okay, thank you. Just one more, if I could. Mark, Barrick has a lot of pretty big greenfield projects. You've got Pascua Lama, Donlin, et cetera. Just wondering your thoughts on that type of project, big CapEx, big project. Do you see a way forward on those to generate reasonable returns, or do you think they potentially could be a non-core?
Well, they've got some much more near-term, very exciting projects that we'll be spending our initial focus on. Again, the transformation of Barrick, which has started some years ago, is at a point where we need to reposition the levers and sort of the commercial optimization components. As you appreciate, to deal with the radioactive balance sheet, Barrick has been obsessed with optimizing for cash flow. Now that they're in a position where you've cleaned up the management, you've got really well-aligned executive team, and a balance sheet you can manage, and very strong commercial metrics coming out of the operation, this is the time where you need to shift back to a more optimized, to a business optimization model that looks to the underlying ore bodies. Nevada comes with enormous potential.
One of the other assets that has become a bit of an orphan is the Acacia investment in Africa. Then, of course, there's the strategic assets, which we refer to, that being particularly Veladero, and that continues south into our El Indio trend, which is a very highly prospective, under-explored geological terrain straddling Chile and Argentina. Then you've got the non-core assets, the Porgera asset and the Kalgoorlie asset, which again, John's shown that with a real clear strategy, you can bring these projects to account, and they've both got very strong partners who have indicated their interest in being able to take over those assets. Again, there's no plan to do anything that compromises that value, that NAV value of the group.
Then, at the same time, the combined exploration skill base in the form of the Barrick and Randgold teams, exploration teams, is gonna be a cracker of a team. We're looking forward to letting them loose on a lot of these really controlled geological portfolios. Then by that stage, we get to those, what we would call other strategic opportunities. There are some in Randgold and some in Barrick. The first thing is to understand them. Once we understand them, you can imagine for this due diligence period, we've been really focused on those cash producers and the near-term opportunities. Again, looking forward, we'll be putting the necessary effort into those assets.
Thank you for-
I mean, we've still got more choice. We've got to prioritize our human capital.
Just to add.
All right. Thanks very much.
I'd just add to, and we said it on the previous call, it's only going to be able to enhance the option value of the combined portfolio relative to the separate companies today. I think that's the way you look at these embedded options in those large greenfields projects that we have now as a combined entity.
Your next question comes from the line of Greg Barnes. Please go ahead.
Yes, thank you. I think the number 1 question I've heard from shareholders this morning, Mark, is what is your tenure as the CEO of New Barrick? How long do you see yourself being in that role?
As long as it takes. I've always said Let's take a step back, Greg. We've been talking about succession and the next big opportunity. We've reached a point where our succession is at a point we can implement it, and this transaction allows me to implement it. Frees me up because we have a leadership structure to be able to take on Africa will double in its portfolio. It will double its portfolio with this transaction. There's a very strong management team. We won't deploy an extra person. That's our succession. That's very successful. On top of it releases me, Graham, and a couple of our top executives to join the Barrick executive team to take on the bigger task of unlocking the inherent value in the Barrick portfolio and continue, of course, to build on what we bring for Randgold.
Just to make it clear, I'm rolling up my investment in Randgold Resources into this transaction. John and I together stand in the gold industry as executives that have significant skin in the game. I've always said What I don't want to be in 5 years' time is the CEO of a $60 gold stock. I think this opportunity really brings forward an exciting combination that fulfills everything I've been hammering on about for ever since I can remember. This is a re-energizing event for me and I've said at times, I need one more big gold mine to really get to the end of my career, and this is a very large gold mine with a lot of excitement. When we spoke about it, I've committed at least 5 years. I don't believe 5 years is long enough.
The skill base of the people that we've collected in this organization, it stands apart from the rest of the industry. My job is to shepherd this business into a state where it will be there for the next two-plus decades as Randgold performed. There will be a time when it's a natural time for me to be able to crystallize my investment. That's the way I look at it. It's not a job for me. It's really an exciting business venture.
Great. Thank you for that. That's very helpful. Second question, follow-up. The investment hurdle rates metrics between Barrick and Randgold are slightly different. Who's going to win out?
It's the ultimate team where we've got this far together, and it's been a long haul. We've managed to convince a lot of people, our boards to start with. It wasn't very difficult to convince the management team because there's very little gristle in the senior executive DNA and the indifference in the way people look at things. Tier 1 assets bring a different dimension to just pure returns. They bring the optionality value. Catherine touched on it earlier. We are mindful of the whole business concept of gold mining. Right now, the $1,200, 15% IRR is still an industry leader because it's after-tax and all the other stuff, which sometimes the industry sort of forgets about. Just to point out, when we built Loulo, we used $450 gold and 20% return. We had 1.5 million ounces.
Today, we've got seven, and we've been running it for 12 years, and it's definitely beaten our 20%. Kibali, when we first made that decision, was lower IRR, and the gold price was a lot higher. Because it's such a big asset and we still run it at $1,000 on a business model design basis, it will ultimately get there. When you look at smaller assets, you lose some of that optionality because of the life of mine length. It's important then if you're going to bring to account assets with three or four or five million ounces, that you're much more disciplined on the $1,000 on the 20%.
Having said that, the other thing is when we look at the core tier-one assets in Barrick, the team's made a lot of progress to cleaning up the efficiencies, there's still opportunities to do that. I believe in the fullness of time, we will get those assets back closer to our filter. Definitely, they are still industry standouts. If you look at the EBITDA, which is something that really attracts me, Randgold sweats the EBITDA better than anyone. The best way to start a business with an objective of freeing up cash flow is to start with large EBITDAs. This is an industry leader on that matrix. I hope that answers your question.
Yeah, that's helpful. Thank you.
Your next question comes from the line of Tanya Jakusconek. Please go ahead.
Yes. Hi. Maybe just a couple of questions. Just wanted to understand, Catherine, do you see the Chinese playing a role at all in some of the African assets?
hello, Tanya.
Hi, Mark.
The Chinese, as you know, are already playing a very key role in Barrick and have really allowed this transaction to proceed because they've taken on some heavy lifting on assets that are not quite in the focus of Barrick even today. John's a great proponent of the necessity to partner with the Chinese, who are big consumers in the resource business. Recently, I've had an amazing experience working with the big Chinese companies in the DRC as we've managed the DRC situation. We've consulted with John's relationships in dealing with this initiative because they are key stakeholders in the Barrick vision. We all agree that partnership can only leverage our combined skills going forward to be able to continue to hunt those tier 1 assets in places where there's still big elephants to be found, and that's Africa and South America.
Just specifically, Tanya, on what's going on at Acacia. It's already sort of public that Acacia are managing that process with the Chinese. Strategically, as Mark has just outlined and John has talked a lot, you can see that our partnership with the Chinese really helps mitigate risk and brings an element to those areas that are more challenging because of the benefits, obviously, that a broader Chinese relationship can bring. Tactically, Acacia are leading the process with the Chinese on the ground, given their independence.
Oh, okay. Maybe Catherine, I quite didn't understand the purpose of the $300 million Shandong strategic investment and why it was announced concurrently with this deal and in the document. Maybe I'm missing something.
John is the best person to explain the logic for that.
Yeah, Tanya, let me answer your question, contextualize it. You know right from the very beginning, it's been a goal of ours to build a distinctive and preferred relationship with China. Given my own experience, I know what that means in real terms. What it means is a highly labor-intensive, long-term, trust-based, slowly building process. So far so good. Part of that is, from the very beginning, we've been completely transparent with the Chinese and said to them, "Come in and look at any of our assets in whatever depth you want to, because we want to put you in a position, and knowing the way the Chinese system works, to be able to move quickly if and when we come to you with a very concrete idea." We've become increasingly close to them.
Now, with Shandong in particular, you're aware that they are going through an IPO right now. The $300 million cross shareholding is a further step in cementing that relationship. You will see it continue to develop. I wouldn't be at all surprised if, among other things, it leads to Barrick getting a deeper understanding of the domestic situation inside China and understanding better what's there, what could we be doing together, et cetera. It's all part of a process, and as for the timing, the timing actually was driven by the fact it's just coincidental that their IPO and this particular transaction are happening when they're happening. It seemed rather logical, since we were going to announce it anyway in the IPO, to announce it now the other way with respect to this transaction.
Well, it makes it a very clear message to the market that irrespective of both companies going through sort of transformational changes, that the relationship persists and is growing over time. Whether it's the El Indio on our side or for them, helping them to become an international global company with access to global markets and expertise, this is a very clear message.
Tanya, also to give you one more sort of sense of this. Throughout this process, and when I say this process, I'm talking about the last nine months, where the discussions between Barrick and Randgold have become increasingly intensive. Then in the last two or three months, where we also spoke with all the other major players. Throughout that process, we have been completely transparent with our Chinese partners the entire way. They've known everything we're doing every step of the way. They knew exactly what we're doing and why we're doing it.
Okay, maybe just the last one, if I can, just on financials. One is just my understanding, why have regional groups if we're sticking with a more decentralized model? Maybe an explanation there. I know you're focused on your financial metrics for M&A, big one with free cash flow. I totally understand that. How does this investment specifically meet your 15% hurdle rate? Maybe those two. That would be great.
15% hurdle rate?
15.
15. I think the point here is that, Tanya, I've always said asset quality overrides jurisdiction. Really, if you want to build a world-class business, you've got to start with, first of all, great people, because with good people, you can do just about anything. If you add the best asset portfolio in the industry with a quality team focused and aligned, the results are almost guaranteed. I wouldn't say they're totally guaranteed, but they're almost guaranteed. What we see here, whichever way you slice and dice this, the fact that we bring the robust, less geared cash flow of Randgold into partnership with these set of very high-quality assets, it takes us through any scenario, any realistic gold scenario, we deliver on this business. We start off with industry-leading metrics, and it's just about how do we then continue to sweat it.
The objective here is if you look at Randgold as a percentage of EBITDA amongst the majors, we represent about 3%. If you look at the percentage of free cash flow, we represent 13%. It's that sort of leverage, the opportunity here. We've got the assets, we've got the discipline, can we convert that very large EBITDA into more free cash? My strong belief is we can. We've got visibility about this. This is not a takeover as we've said publicly. It's a combination of assets, people, shared vision, and to create something that both John and I have been talking about for some time. Something that we can all go out there and market to the world as a profitable business.
Happens to be focused on gold, effectively, you get real returns and the exposure and insurance that one needs in your portfolio by investing in gold. On the flat structure and the ability to transport the Randgold way, a large part of that philosophy is already embedded in Barrick. What we're really doing is bringing a little bit of real 23 years of experience to help pick that pace up on delivery. Otherwise, you'd notice that, as John mentioned in his introduction, a much slower slog to the finish line.
Was I to take away from that your focus when you did this merger of equals was focused on free cash flow and not so much on your 15% hurdle rate for Barrick on the Barrick side?
The 15% hurdle rate, I've got no doubt we'll meet and beat, absolutely. It's a good start because there's still a lot of opportunity to introduce more efficiencies, particularly as Nevada transitions from the very business that built Barrick, those big mega, super efficient open cast mines, to higher grade underground mines. If anything, that's a good place to start and I've talked at length about the difference between 20 and life of mines and size of operations and optionality. I'm really relaxed about the 15% IRR when you apply it to big super projects. I've got no doubt that as we progress with our thinking, we'll be sharpening that pencil a little more.
Tanya, just to square the circle even more. John, if you go back to the town hall we put out in July, it's about what you can achieve looking at the opportunity set going forward. While you're looking on paper at what those returns will be today, it is that together the argument, whether you believe it or not, is that you're able to deliver that 15% return or greater because you can execute, you can uncover options that would otherwise not exist. It's what do you need to believe in the combined entity to get to that 15% going forward versus what do the two standalone look like and their valuations today? That's the rationale behind why we're willing to issue shares to do this deal.
If you take the top tier industry leaders, Tanya, no one makes 15%.
No, I get that. Thank you.
Your next question comes from the line of Daniel Major from UBS. Please go ahead.
Hi, guys. A few questions from me. They're slightly related. Mark, you've always spoke about strong balance sheet, meaning ideally a net cash position. Clearly, the combined entity will, I guess, from a country perspective, have a somewhat lower risk profile. Can you give us any target somewhere you're thinking the balance sheet would sit from an ideal perspective? That probably feeds into the portfolio. Again, you've probably in the past spoke of sort of five, seven assets being an optimal size for a gold company. Can you give us any more sense of the magnitude of potential asset sales and the timeline there? Will initially those proceeds all go into deleveraging?
Balance sheet, I think today the balance sheet strength is materially improved on when we first started discussing this project three years ago, and that's not a long time in the gold mining industry. Combining the two companies, you deleverage the balance sheet further. The question here is not about. I think we're at a stage now where we have a robust financial base to build on. It's now how do we use that financial muscle to continue to grow the business and invest and create value? It's not just about. It's been through a very tough time, Barrick, as it's focused on dealing with these potentially damaging stresses, particularly within the balance sheet.
I think we're past that, and certainly with Randgold's extra no debt. Strong cash flow and a positive cash balance, we take a little bit more of the edge off that. We are very committed to working with the debt that's embedded in this company, albeit elongated, we still feel we need some more work on it, where there's a commitment to do that from the current team, and we fully support that philosophy. Sure, as you point out, the risk profile is different. Seven tier-1 assets, strong cash flow, EBITDA, it gives you a lot of opportunity to gear the cash flow. As I said, to repeat myself, it's all about how much of that you can convert into free cash flow.
Right now, we're still an industry leader whichever way we cut the forecasts and we are, certainly in our profile, we look in the next 5 years as significantly more capital than any of the other of the peer group. We'll still be a leader on the EBITDA front. The second question was?
Perfect size for the portfolio in terms of assets or?
I've always said half call is a good number, plus or minus a bit. The ability to take on When you've got super big assets, there's no way that we're going to give up tier-one assets. Bringing to account some of the other assets, which are, some of them are particularly good assets. They're not bad, but they just don't fit our, maybe our geographical focus or there's better use of proceeds, and we have partners that have indicated their interest in acquiring the Barrick stake. John has been very clear about what isn't core, and of course, this combination will bring that same debate over the whole portfolio of the combined entity. There will be other opportunities to rationalize, which will free up embedded value in this organization. Some of it we'll use to de-leverage the balance sheet further.
Others, we will definitely take to invest and ensure that we have a longer runway ahead of us as far as our operating models go. As I've always said, when you realize value, some of that will go back to shareholders, and it'll continue to support what we've already very clearly signaled to the market. If we came to the market and said, like so often happens in the gold mining industry, "We've got this wonderful idea. We're going to put these projects together. We're going to do it in the traditional old way, and we're not going to pay you any dividends." This is an initiative that we believe inherently grows real commercial value, financial value in this combination. If we believe it, then it has to deliver free cash flow and support a dividend policy.
Right out of the blocks, we are saying our policy will be constructive. We've indicated an increase in dividend for Barrick, which is the core strategy going forward, and we've also recognized the importance of the Randgold portfolio and our investors who have bought in for dividend returns and our commitment to pay some dividends back to those shareholders at closure.
Thanks, Mark. Maybe just one follow-up. There's no indication of any London or non-North American listing. Is that something you considered in this process, retaining an ADR program or creating a more global reach in terms of listing location?
Yes, we considered it, as you can imagine, very carefully. It doesn't rule out the potential going forward, but Randgold, despite being listed in London, our shareholders are quite happy in the North American stock exchanges. There is some potential flowback, but again, we would like to see that people would want to invest in this asset because it's a value proposition. We've never had a full index balanced investment in London. That we do have index funds in our stock. We believe that we've motivated an interest in people supporting this initiative because they like what we are proposing. To stay listed in London in the short term requires a full RPO. That we just don't have the time and right now with the advice that we've received, the flowback pressure is minimal and the cost just doesn't warrant it.
Great. Thank you very much, and good luck.
Your next question comes from the line of Amos Fletcher from Barclays. Please go ahead.
Yeah. Morning, guys. I guess a few questions for you, Mark. Firstly, the way I see this is Barrick's getting at least two world-class assets, a world-class management team, and a decent amount of net cash for no premium. Do you feel that is the optimal outcome for Randgold shareholders? My second-
Absolutely. You should have given this presentation, Amos.
Okay.
You forgot what the Randgold shareholders are getting back in return.
Fair enough. I guess, if you don't want to elaborate, I just wanted to ask on what you see as being the likely fate of Acacia.
Well, one thing we all agree on is it's an orphan right now, and it needs a home, and it needs some care and support and nurturing. It's got real value, whichever way we cut it. That's the point. Why make an asset an orphan when it's got inherent value? I think it's a complex situation. From our side and Randgold's side, we believe that we can play a real part in realizing value for everyone involved. That's definitely been Barrick's focus all the way, and it is a major shareholder in this asset. I think John's philosophy about if you're going to invest in emerging markets, you need to be able to ensure that your stakeholders benefit, not only your shareholders but your host countries who are equally owners.
We subscribe to that philosophy, and I think if everyone focuses in on that, there's an opportunity to genuinely unlock that value, which for the moment has been compromised.
Okay. Okay, great. Thanks, guys.
As a quick reminder, if you do have a question, please press star then one. Your next question comes from the line of David Haughton from CIBC. Please go ahead.
Hi, John, Mark, and Catherine. Thank you very much for the update. Maybe a question for Mark. In your due diligence of Barrick, which I presume has been underway for quite some time, what are your thoughts about Barrick's most valuable asset in Nevada, where you've got Goldstrike, Cortez, Turquoise Ridge, Goldrush? Where do you see the future for that, and how can you realize more value?
When you go to Nevada, I'm a geologist, David, it's like being a child of 13 years old at a candy store. There's enormous opportunities, that's geologically. At the same time, as you know, the commitment in this industry to focus on value rather than control is unsurpassed. There's been many attempts to unlock value there. You know me, I'm agnostic about who owns it, how it's done. All I want to do is see value created for our shareholders. You've seen us partner with AngloGold in Morila initially because we didn't have the firepower. We shared the risk in developing Kibali with AngloGold again in a proper partnership, it amazes me that no one's really been able to get around and utilize this fantastic address. That's really it.
It's got some fantastic assets, I would add that our due diligence has definitely highlighted the quality and the opportunity that still is embedded in the Barrick assets. Again, when you look at the infrastructure and the processing facilities, sometimes it's very easy to believe that there's a better way to exploit those deposits. Again, one thing to add to this, which is important, is in this process of due diligence, which as you say, has been exhaustive on both sides, out of it has come this commitment for a combined future business model. It wasn't just about poking each other in the eye. It was, we want to find a collective business model that will support John and my vision of creating real value in our industry.
John has tested all the potential options, I genuinely mean that, to be able to say, "I have done this test. I've spoken to everyone," as you know, I speak to everyone all the time. This is the right way forward. We have been very open, both of us, particularly John and his approach is to say, and you've heard him, "We're going to change this business. We're going to deliver something of value. If you want to be part of it, we will always listen to you. The only filter is it good for our owners or not?" I am completely aligned with that approach.
We'll continue to engage and invite people to come and work with us to deliver a gold mining industry that is more relevant in the future than it is today to all the full spectrum of investors.
The door is open for partners in Nevada to unlock potential synergies in that part of the world.
You've got it in one.
Okay, just as another question, just the timeframe for asset rationalization. Do you have a timetable in mind, or is this something that will unfold as you feel more comfortable with the assets that you've now got within the combined entity, if approved by shareholders?
The rationalization is not panic selling. That's exactly what it is. We've got the luxury to be able to sweat these assets. I think the key thing, and you, David, I was one of those who questioned why you would go and sell half of Veladero because it's so hard to find 8 million ounces, and I'm a geologist. When you look at that relationship and the benefits already that the Chinese have brought into that portfolio specifically, it's not only was a good commercial decision, but it has brought a much stronger commitment, and a new way of looking at things. Also some tension amongst the owners to advance that project and not just leave it dangling in the wind. Goldstrike, as you know, is operated by Newmont. They are engaged in discussions. They have been for some time, as you know.
2 years ago, I think it was, that there was a real commitment to try and find a solution. We would like to see that progress. We've got other interested Australian investors in that asset as well. The same with Porgera. There's been a lot of progress in that relationship. The big next step is to renew the mining license. Zijin has got the option to pick up the other half of that. Then we've got a lot of work to do on Hemlo before we decide where that goes, and mindful of a big tax shield in Canada. Again, I think we all believe that we should be looking to grow our portfolio in Canada. Then, there's the Randgold assets that one needs to question whether it's in the right hands today, given the new profile of the organization.
Certainly, the big assets we'll keep. Then there's those options that Catherine referred to earlier in the form of Donlin and the El Indio trend and the whole South American prospectivity, which, again, we'll be looking at. First step, David, as everything in these things is focus on the people, get the management team. We've got the executive team clear and its roles and responsibilities. Make sure we tidy up on the entire first, second, and third levels of management. Then we can multitask after that. That's going to be the exciting part.
Okay. Thank you, Mark.
Your next question comes from the line of John Bridges from J.P. Morgan. Please go ahead.
Hi, good afternoon, everybody. John, Mark, and Catherine. John, in your town hall recently, you spoke about the potential to put together a copper asset, and it sounded a little bit as if it might be spun out. Does that idea change after this deal?
John, hold it. Let me answer that. We are going to integrate the copper assets initially into the different geographical regions. We've got good expertise in Africa to deal with Zambia and Saudi Arabia, and the Chilean copper asset is run by a partner. The objective here is for me is, once we get into Western Americas, you immediately have a relationship between copper and gold because of the geology. It makes good sense to sharpen up one's copper skills. In the short term, we need to understand at the moment, the asset base, copper asset base is pure copper. How much value is embedded in that because it's also a bit of an orphan? Can we gear that up into a different portfolio that's more integral into the gold business?
I think at that point, it would be logical to consider how best to deal with those assets. Are we going to be focused more on copper? Absolutely, because we're going to be focused on the Americas as well as our traditional African focus.
Okay, great. Just as a follow-up, I see you-
Go ahead, John.
Sorry?
You sort of sneaked in the last question.
Oh. Can I just ask about the domicile of BC? Could you fill out that? Are you opening an office in Vancouver?
We're reincorporating in BC. The head office will remain in Toronto.
Okay, got that. Thank you.
All right. I think we've run out of time. I'm going to very quickly summarize nine points so nobody misses them. I'll be very succinct. Number 1, this is a no premium deal. As far as I know, anytime in recent history for this size, never been done before. We think this is the appropriate model for this industry. As you all know very well, the industry's littered with large deals, big premiums, and destruction of shareholder value. Number 2, we have the best management team, and you all know that Mark's had a 23-year unblemished record. I was looking just the other day at the 10-year record of the share price of Randgold, up 96%, and the other senior gold majors down 50%. Randgold's been in an entirely different universe, and they've done it over a very long period of time.
It's difficult to find any leader in any industry, let alone the gold mining industry, let alone the gold mining industry in Africa, to find someone who's had that kind of record for 23 years. Number 3, the best assets. You've heard us talk about the 5 tier-one assets, plus the 2 potential in Nevada, plus the 2 potential with Veladero and North Mara. Number 4, this business will have the highest margins by a lot, somewhere in the order of 8%-12% higher than the other majors. Number 5, it'll have the least amount of leverage. It will have the best returns. It will have the cash flow generation from the tier-one asset strategy sufficient to invest in all the things we've talked about and plus give money back to the shareholders.
Number 8, we'll have a policy on dividends of the same policy Randgold's had for 23 years, which is to say, increasing the dividend over time. Finally, given where we've been trading, the possibility for multiple expansion is very substantial. With that, I'll finish and thank you all very much for attending, and wish you a good afternoon or good morning, wherever you are.
Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.