Ladies and gentlemen, thank you for standing by. This is the event operator. Welcome to Barrick's results presentation for the fourth quarter and full year of 2022. Following today's presentations, a question answer session will be conducted. If you have a question and are joining the event by telephone, please press star then one on your telephone keypad. We will also be taking questions from those in the room. As a reminder, this event is being recorded and a replay will be available on Barrick's website later today, February 15th, 2023. I would now like to turn you over to Mark Bristow, President and CEO of Barrick. Please go ahead, sir.
Thank you very much, ma'am, and a very good morning and good afternoon, ladies and gentlemen, for those here in Toronto and elsewhere across the globe. As you know, we are going to be talking about our quarter four and 2022 results today. Looking back, the past year didn't turn out the way anyone expected. I'm sure you'll agree with me. Against a background of further geopolitical deterioration, there were some fundamental changes in our global financial landscape, which heralded, I believe, the end of the easy money era and a new regime of high interest rates, high inflation, and high risk. On a positive side, in response to this, gold was one of the better performing asset classes. It was also good to see the copper price pick up.
While gold has always been the world's most precious metal, copper has, I believe, become its most strategic. Barrick owns the industry's biggest and best gold portfolio. We are the largest producer in the United States and Africa, we're steadily increasing our copper holdings. As I plan to share with you today, our proven long-term strategy drives our ability to create and deliver value even in difficult times. I draw your attention to the formal cautionary statement which can be reviewed in full on our website. In 2018, when John Thornton and I agreed on the merger of Barrick and Randgold, we spent a lot of time designing the strategy we would use to create a new industry leader.
We wanted a company that would stand out from the crowd, driven by a fundamental promise to our stakeholders that we would do what we said we would do. We have done exactly that. Since then, we have produced around 19 million ounces of gold and 1.7 billion pounds of copper. Gold reserves have increased to 76 million ounces. We have returned $4 billion to shareholders and at the same time invested seven and a half billion dollars into our rolling tenure business plans and significantly leveraged the company. Just in 2022, our copper resource has increased by more than 124% year-over-year, and we've set the stage for our growing exposure to this critical future-facing metal.
On the portfolio optimization front, we have achieved the $500 million of annual synergies at the Nevada Gold Mines joint venture and have transformed the legacy Acacia assets in Tanzania, which now produce gold at a level that meets Tier One production status as a combined complex. Finally, Moody's upgraded our long-term credit rating to A3 from Baa1, the highest credit rating in the gold mining industry with a stable outlook. Turning to the results, the highlight of a busy year was the significant increase in our gold reserves and resources. As I've said before, our ability over time to more than replace the ounces we mine is one of the attributes that sets us apart from our peers, as it reinforces our sustainability and drives the growth of our tenure production profile.
In line with our strategy of increasing our exposure to copper, we've also more than doubled our copper resource base over the past year. Accordingly, we have started work on the reconstituted Reko Diq project in Pakistan, one of the world's largest and highest quality undeveloped copper gold deposits. Added to this, our Pueblo Viejo gold mine in the Dominican Republic added approximately 11 million ounces of reserves and started with the commissioning of its plant expansion project. In Nevada, Gold Rush advanced to the next stage of its permitting process and Turquoise Ridge commissioned its third shaft. On the organic growth front, brownfield exploration continued to unlock potential around our existing assets, while greenfield work started to deliver some real future value. A standout was a very significant intersection at the Dorothy target at our Barrick's Fourm ile Project, which I'll tell you more about later.
Despite a strong fourth quarter and the usual solid contribution from the Africa and Middle East region, gold production ended around 1% below guidance, mainly due to the need to fix some of the infrastructure at Turquoise Ridge and lower tons processed from Cortez. Copper production was well within guidance. With similar input prices expected in 2023 and a slightly better production profile, cost per ounce are expected to be at or slightly below our 2022 levels. As I pointed out, Barrick boasts one of the strongest balance sheets in the industry, even after the return of another record, $1.6 billion to shareholders in 2022 through dividends and share buybacks. At Barrick, we believe that in mining, the greatest value creation opportunity comes from discovery and development.
Our preferred strategy is to find our ounces. If we buy, there should be a real future potential to add to what we have been buying. Thanks to the continuing success of our exploration programs, we've grown our gold reserves over and above the annual depletion, delivering 6.7 million ounces of reserve growth year-on-year. At the same time, attributable gold resources increased by 10%. As I noted earlier, copper resources more than doubled. Despite the continuing improvement in the leading and lagging indicators, Barrick's safety record has been badly blemished by tragic fatalities in 2022 and the year to date. All of these have been thoroughly investigated. The lessons we learned are being applied throughout the group.
Significantly, most of these fatalities were suffered by our contractors, showing that our oversight of their safety systems and protocols needs to be tightened up, which we have prioritized as part of our onboarding and ongoing interaction with our business partners. Sustainability, ladies and gentlemen, is fundamental to Barrick's business. We believe that climate risks, poverty, and biodiversity loss are inextricably linked and should be managed holistically. This approach is based on our commitment to supporting the socioeconomic development of our host countries and communities. Last year, we invested more than $35 million in community projects, decreased our greenhouse gas emissions by around 2% in line with our plan, continued to expand our green energy sources, and achieved a water use efficiency rate well above our target of 80%. Delivering for Barrick sustainability starts at the mine planning stage and begins well before the mine is constructed.
At Reko Diq, we plan to show how mining can be at the forefront of the achievement of the UN Sustainable Development Goals. This massive project is expected to have a transformative impact on the impoverished Chagai region in Balochistan, a province of Pakistan, creating thousands of jobs and stimulating the growth of a local economy, as we have done in our other projects across the developing world. While first production is targeted for 2028, we've scheduled the disbursement of social development funds and advanced royalties to the Balochistan province well in advance of first production, ensuring that its people will get an early return on their share of this new partnership. We've also started employing a local workforce and recently appointed a Balochistan national as our country manager.
Moving on to our operational review, we'll start in North America as usual, where the relatively new leaderships for the region and Nevada Gold Mines are focusing on teamwork and effectiveness with particular emphasis on agility, integration, and rapid response to operational variations. As I noted earlier, Carlin Cortez and Turquoise Ridge were impacted by some unforeseen production issues, but staged a strong comeback in the fourth quarter. The commissioning of Turquoise Ridge third shaft is expected to deliver continued improved performance as the underground operation ramps up. Nevada is Barrick's value foundation, and the benefits of combining the assets in NGM are now becoming evident in the form of mineral resource growth and new discoveries, supporting future reserve conversion and adding to our rolling ten-year plan, some of which are shown on this map.
The quality and prospectivity of this complex cannot be understated, and we are excited about the recent success we have achieved at Fourmile, Robertson and Carlin. At Robertson, a maiden reserve of 1.6 million ounces was declared with further expansion potential between existing deposits and a long strike. Within Carlin, we grew last year's inaugural resource to 1 million ounces at North Leeville, while North Turf continues to expand towards North Leeville. Horsham is a new project, is showing significant growth potential east of the Leeville fault. At Ren, drilling has added to the resource base and increased our understanding of the controls on mineralization. As I've already touched on, Dorothy is a particularly exciting target, some 100 meters north of the Fourmile resource.
Drill holes have returned some impressive intersections pointing to a new discovery, and significantly increasing the potential of Fourmile, as well as identifying further untested extensions to the mineralized trend that makes up both Goldrush and Fourmile resource and reserves to date. These results represent some of the best intersections ever returned from the Fourmile Goldrush trend, and drilling will now focus on expanding this zone of high-grade mineralization. I have seen drill intercepts like this before in my career, and they are what every exploration geologist lives for. As a reminder, when we formed Nevada Gold Mines with Newmont in 2019, the companies agreed that a number of assets would be retained by each company to be vended into the joint venture at a later date. On that point, Fourmile is a 100% Barrick-owned asset.
When you look at the resource potential, at the moment it looks like around 15 million ounces in Goldrush certainly these intersections bring us, if you combine the two, with potential to go well over 20 million ounces. When you look at the size of these deposits, they're relatively small, as some of you will appreciate, in volume, but very big as far as ounces go. We're super excited about this recent development. The exploration team in the North American Region has driven some significant changes in exploration strategy in the last two years, with a strong mandate, as we shared with you at our Investment Day, to expand beyond Nevada and evaluate copper opportunities as well.
We restarted Barrick's exploration in Canada, building a new team and portfolio, which has been a real success with our fifth option agreement near Hemlo being signed in the last quarter. In the U.S., in addition to the exciting brownfields targets I'll talk about next, the team has secured three further option agreements, both in the Great Basin area in Arizona and also in the Walker Lane Epithermal District in western Nevada, which are already returning early results. A dedicated new business team is actively evaluating all opportunities across the continent, as always, with a clear focus on our strategic filters. Moving south to Latin America, where full year production was within guidance despite recovery issues at Veladero. Pueblo Viejo ended the year with a record throughput, a major achievement considering the plant downtime required for the expansion tie-ins.
The expansion project will extend the mine's Tier One status far into the future. Construction continues to advance and commissioning of the plant is currently underway. Meanwhile, permitting of the new tailings storage facility is expected to be completed around mid-year. The existing facility can handle tailings until the end of 2027, by which time we expect to have the new facility commissioned. Veladero, which as you'll recall, is high up in the Andes, was impacted by an extended winter and low leach recovery, which we are still wrestling with, but significantly improved production in the latter part of the year. The long-awaited cross-border link to the Chilean power grid was switched on in December and will reduce the mine's energy costs as well as its carbon emissions. Veladero continues to suffer the effects of Argentina's enduring currency crisis, reflected in higher labor and local contractor costs.
We remain engaged with both the federal government and the provincial government to try and find solutions. Our exploration team, on the other hand, has been developing our Latin American portfolio in line with our drive to expand our presence in this region, and we continue to progress a collection of early-stage projects. Specifically, in the Veladero District, geological work is focused on targets with the potential to add to the Veladero Mine's life. We have a portfolio of untested targets close to the mine, with some exciting results being returned from the Morro Escondida target specifically, where drilling has confirmed and is extending a zone of strong mineralization near surface. We've also been looking closely at the prospective El Indio Belt, which hosts Veladero and other mines.
Having completed a large data compilation and reinterpretation exercise, we're now looking to evaluate the significant remaining target areas over the next three years. Moving across the world to Asia-Pacific, Porgera continues its progress towards restart under a new ownership structure. We expect Porgera to reopen in 2023, the asset remains excluded from our guidance until such time as we have finalized all the agreements and outstanding matters. In Pakistan, we've started the environmental and social baseline studies for Reko Diq and our introductory engagements with the local communities I have been personally leading. Reko Diq is a fantastic example of the tremendous value that can be created by developing what is essentially a found deposit, rather than paying large acquisition costs and then having to fund future development obligations, as is more common in today's mining industry.
The Africa and Middle East region delivered its usual solid performance with both gold and copper production well within guidance. Its energetic new management team has been mitigating the impact of inflationary pressures, including through the ongoing solar expansion and battery installation projects at Loulo and Kibali. The Loulo-Gounkoto complex in Mali continues to improve production at lower per-ounce costs. Its expanded solar power and battery plant will replace 23 million liters of heavy fuel and reduce greenhouse gas emissions by a further 62,000 tonnes when it is fully commissioned. The Loulo district is still one of our happiest hunting grounds. Across the river in the Bambadji permit in Senegal, we've defined a 26-km-long, highly prospective trend, we call it the Bambadji Main Shear Zone, and identified nine key targets along which we will be drilling to test for Tier One scale systems.
This is in line with our strategy of testing the major structures on the Mali side of the district, which has delivered so much success. Moving now to the Democratic Republic of Congo, Kibali's processing capacity was impacted by a rock winder change-out. That is now behind us. As already mentioned, the planned solar power and battery storage system will provide renewable backup during the dry season. Kibali's KZ zone continues to reveal exciting potential. Multiple targets are being progressed. We're about to start testing the western side of the KCD deposit, which could host additional high-grade mineralization shoots. The Wari target, shown on the long section here, confirms the potential of the trend with high-grade mineralization being intersected. Tanzania, as I pointed out in my introduction, is also a standout example of what Barrick is capable of achieving.
In under 3.5 years, we've completely rebuilt the two derelict mines we took over from the previous operators to a point where their combined production is at a Tier One level. We've also resolved some of Barrick's most challenging legacy issues and regained our social license in a pioneering partnership with the government. You can see the results of our efforts here. We've got big plans for both mines as mining is scheduled to commence at the new Gena open pit later in quarter one and will leverage the investments made from our transition to owner mining. While the new underground fleet at Bulyanhulu continues to deliver on our ramp-up plans. Turning now to our copper portfolio, the Lumwana mine in Zambia is another asset we've successfully revitalized and forms a key part of our growth plans.
The past year's production was at the upper half of the guidance range, and our ongoing transition to owner mining, including the investment in a brand-new fleet, has positioned Lumwana well for potential expansion and significant mine life extensions. The team is busy with a pre-feasibility study, which is expected to bring the development of a new super pit into our business plan by the end of 2024. Jabal Sayid in Saudi Arabia also delivered production and cost metrics that were within or better than guidance, together with reserve growth above depletion, adding another year to the mine life. Zaldívar in Chile produced a consistent performance. In Saudi Arabia, we're expanding our exploration presence in partnership with Ma'aden with two new greenfields projects, Jabal Sayid South and the Umm Ad Damar projects.
Also at Jabal Sayid mine itself, strong results from deep drilling at Lode one are on track to support another year of reserve growth, while exploration results continue to confirm the further discovery potential within the mining lease. Demonstrating our commitment to strong shareholder returns, our 2022 payout was, as I pointed out in my introduction, a record $1.6 billion and included $424 million in share buybacks. We have introduced a new share buyback program of up to $1 billion for the next 12 months. Our returns to shareholders have not been at the expense of organic growth, as can be seen from this profile. We continue to invest in and roll over our 10-year gold and copper plans, which demonstrates real organic growth in addition to a consistent base case production profile.
Since the merger with Randgold, Barrick has consistently outperformed its peers in operational delivery and capital discipline. In line with our clear strategy, the delivery of our plans on the back of the quality of our portfolio means we are in the privileged position of being able to generate significant free cash flow into the future. This ensures we can continue to invest in our future and provide returns to our shareholders. Embedded in our existing portfolio is an unmatched pipeline of quality projects in which we are steadily unlocking value as we have done from the existing operating assets. The ability to grow without having to buy is a significant differentiator. I believe that in time, this embedded value in our portfolio will be recognized. Putting it all together presents the powerful case for investment in Barrick.
There is no other mining company that has our proven long-term strategy, our quality assets, our growth projects, our world-class team, and our social license to operate, earned through our mutually beneficial partnerships with our host countries. Our existing copper portfolio is a differentiator, both in terms of the significant contribution it is already making and the ability to grow it further. With banked long-term plans firmly in place and a world-class team, we have the ability to ensure we will be sustainable into the future. Thank you, ladies and gentlemen, for your attention. We have the team here in Toronto, and we'll be happy to take any questions.
Thank you. We will now begin the telephone question and answer session. To join the question queue via the phone, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question comes from John Tumazos, a private investor. Please go ahead.
Thank you very much for all the great work. Looking ahead to a year from now, which technical studies do you anticipate getting done in 2023 to permit large additions to reserves and resources comparable to the Reko Diq, Lumwana, and Pueblo Viejo additions at year-end 2022 as those multi-year programs bore fruit?
Thank you for that. I think the big focus for new growth is Nevada itself. You know, that is more lumpy because we define sort of expansion resource inventory initially, then we drill it out to an inferred resource. Really we only bank it when we get underground and drill from underground. We've got a lot of development going in, particularly in the northern Leeville area, Horsham, as I pointed out. The Ren project has now got a development drive going in. We're excited about that. We think that's got potential to more than double its current mine-able resource and convert it all to reserves. The Robertson project itself has a lot of upside. We've just started drilling that out now.
Again, we are drilling some of the gap areas like the fence line in between the old Twin Creeks and Turquoise Ridge. We've got some interesting work coming on the BBT corridor. We call it BBT because it stands for better be there. We've confirmed that it is there. We're now developing towards that target. Nevada for us is really exciting. We've got some new exploration targets, which we'll be sharing with you in due course, across the Americas, the Northern Americas. We've opened up new exploration projects in Dominican Republic. I've shared the work that we're doing in around Veladero, which is important to ensure that we extend that life of mine.
In Africa, we've got a significant opportunity that's that we're now focused in on in the joint venture with Ma'aden on the Umm Ad Damar project, which is a very real copper target. It's got mineralization on surface. Again, we think that we can well, we believe we can model the VMS surface, geological surface that connects these targets together to the Jabal Sayid deposits, which are high-grade copper deposits. Our team has now started consolidating ground in Tanzania. Again, Tanzania is, as you know, has been largely neglected by the industry for more than a decade. So we're excited about that.
We also have a big team focused in on Central African Copper Belt, as well as the Eastern, the whole eastern part from Kibali down into the Victoria Goldfields. If you look at that's a product of us investing over the last four years in really lifting the game and quality of our exploration teams. I absolutely believe that we're there today. You know, like in Africa, because of the history of our work there, we can show you how we're gonna replace the reserves into this year. We're not gonna replace all the reserves every year.
Over time, like, you know, if you look back to 2018 in the merger, we've produced 19 million ounces of gold, and we've replaced it all plus. That's the difference. That's why, you know, this industry, I've been repeatedly saying, doesn't invest in its future. It has to go to the last resort of buying assets at whatever it can get in the market. In my career, I've spent my entire career building organic opportunities, which is the only real way you make, you create value. That doesn't mean to say we're not shy of doing M&A.
If you go back to the history of both Barrick and Randgold, Barrick built its business on M&A, but more importantly, on the work after the acquisition and adding significant value through the drill bit, and so did Randgold. These two companies, now one, has a good memory on how to do this properly. I think we, you know, you can say whatever you like. But the fact is we've done it. We said we'll do it, we've done it, and we've now got a foundation on which to continue to deliver that value. That's really the difference. We'll still look at opportunities when they arrive, but we don't have to force an opportunity just because we haven't been able to replace the gold we've mined.
The next question comes from Martin Pradier with Veritas Investment Research. Please go ahead.
Hi. Thank you. Thanks for the opportunity. I wonder on the cost of sales in Q4 was $1,324, up 8% versus $1,226 in Q3. I wonder why it was given that you had bigger volumes, which usually tend to imply lower cost?
Martin, I'm gonna pass you to Graham.
Yeah. Martin, hi, it's Graham Shuttleworth here. Martin, the key driver there really was depreciation. There's two aspects to that. One is when you have increased volumes, then you generally tend to have increased depreciation because it's linked to the production. Also, when we do our annual tie-ins really for the purposes of the final financial audits, we do some adjustments, you know, that reflect the full year accounts. Some of that comes through as additional depreciation in the fourth quarter.
Okay. Thank you.
Once again, if you have a question from the phone line, please press star then one. The next question comes from Tanya Jakusconek with Scotiabank. Please go ahead.
Good morning, everyone. Can you hear me?
Yes. Tanya. Hello. How are you?
Good, thank you. Thank you for taking my questions. I have three if I could. The first one has to do with Porgera. I know I ask about Porgera all the time. Just Mark, can you give us an update on where we are with Porgera? I know on our last conference call and in Investor Day, we talked about a potential startup maybe as early as the end of Q1. We're not too far off from there. I just wondered if we've seen slippage or how should we be thinking about Porgera this year? I know it's not in your guidance, I'm just talking about the real-
Yeah. That's fine. Again, the other two?
Sorry. My second one is to do with health and safety. Just wanted to understand what exactly is happening 'cause there's quite a number of fatalities in a very short period of time. I'm just trying to understand like what changes have you implemented and like what have you seen and what have you learned to move forward on this. My last one is to do with the copper side. Do you think, Mark, you have enough copper in your portfolio from what you have in your current portfolio for copper growth, or do you see other opportunities on the M&A front in copper?
Okay.
Thank you.
Tanya, thanks for that. I'll start with the last question. We do not have enough copper, but we've certainly got visibility of where we wanna go. Again, it's fundamentally driven by our exploration investment. Again, while everyone else has been talking about it, we've actually gotten to the field and we've focused, and as we shared with you in our investment day, certainly, you know, that's a significant endowment, particularly in Arizona, and then also South America and there along the Andes, and particularly the historical legacy permits of Barrick, and a big focus on Central Africa Copperbelt.
As you know, we are well entrenched in Zambia, and we have a very strong long-term relationship with the DRC government. Again, that we believe puts us in a very strong position and we organically led. That's what we can offer to governments is long-term value creation, not a sudden arrival with a short-term promise. You know, those countries are wanting to see that. You know, whether it's copper, cobalt or any other EV, we've got a gazillion people arriving in these prospective areas around the world. They're not miners. They have, you know, lots to say, but very little expertise in how they can bring their claims to fruition in the form of value for their host country.
Copper is very much, as we said in 2018 when we put the two companies together, an integral part of our strategy. By the way, that doesn't detract from our ongoing commitment to continue to grow our gold portfolio. Again, if you look at it, if you look at the size of our businesses, Nevada speaks for itself. Kibali, six Tier One assets, 500,000 ounces and more, significantly more in most cases, beyond 10 years. You look at Tanzania, that's two mines producing 500,000 ounces. That takes it to seven. We've got the opportunity with Reko Diq. It's a Tier One copper asset. That takes it to eight.
We've got Lumwana that we're looking at, and that has real potential to be as big as far as production goes as our share of Reko Diq. That takes it to nine. You see. Porgera, which I'll come back to, that takes it to 10 because it's a plus 800,000 ounce producer. What our focus is add those sort of chunky assets into our portfolio. You know, Tanya, there are not many around to go and buy. You know, it leaves us the challenge to be able to hunt those down, and that's really our focus. Health and safety, very good question. You can imagine, I mean, this, for me personally, it's been a traumatic time.
You know, it's multiples more than all the fatalities I've experienced in my 35-year career. As a team, as an executive, as a management team across the group, we've really had a lot of introspection, looked at these issues. We spent an hour with our board yesterday working through what we've discovered. You know, the challenges that our lagging indicators have come down materially, as I showed. But we've had this sudden pickup in fatalities, largely with our contracting partners. The point is, my commentary is that, you know, where I come from and what we've introduced in this group is a very flat structure. As you know, we embrace local.
We embrace the local partners in building capacity to invest our growth projects into the host country economy. At the same time, in Africa, as you know, we've changed the management team considerably in Africa. I believe that one of the drivers of this is the fact that we didn't invest enough time in getting to know our contractors, which was a traditional thing. When you're flat, you don't have that big corporate sort of weight, it's all about interaction on a personal basis. Particularly when you bring in contractors that are not international in size and capacity. We've got to ensure that we instill that in them.
Again, as we've changed and continue to change that culture across the Americas, both South and North, we see that we've got to invest more and we've got to specifically look at our in-induction of our contractors, making sure that they have the systems that we expect they have, and to spend more time engaged with them to ensure that they lift their game to the level that we expect anybody to have when they operate in our operations. I think that apart from, you know, just making sure this is a very significant effort across the group, I've spent a lot of time personally. Our whole executive has spent time. We've really reinforced the responsibility of everyone to stop unsafe work. Again, we've moved it from being, you know, the right to the responsibility.
I'm pleased to say we've had some significant examples of our people exercising that responsibility just in the recent weeks. This is, you know, like this, it's a tough thing because it's not very tangible. I'm a person who likes to have absolute control of things. It's been a big challenge for me personally. The team has, you know, stepped up. You know, this is more important to us than anything else. I've got no doubt that we've, as a team are absolutely committed to making sure that we get on top of this challenge. Porgera.
You know, one thing about operating in Papua New Guinea is if you get your agreements right, then you can operate freely until they come up for renewal or renegotiation. That's our intention. It's a challenging environment to work in. Extremely challenging. Probably the most challenging environment I've worked in. I, as you know, have worked in quite a few of those. We have now incorporated a company that will be the vehicle that has the new ownership and will eventually end up with the Special Mining Lease. The steps we've got to go through to get there is we've got to transfer the exploration license from BNL, which is the Barrick vehicle, into the new vehicle. Once we've done that, we can apply for the Special Mining license. As part of that process, we start the consultation with the communities.
We have agreements with the various landowner representatives, but we've still gotta go in and consult under the auspices of the MRA, the government mining authority. But we are moving that in that direction. We are employing people. We have reviewed and as part of our care and maintenance responsibilities, made sure that we've inspected and ensured that our mobile fleet is operational. We're beefing up the spare parts. We are doing some maintenance. We're gonna replace some of the tanks and the processing infrastructure. We are moving. It's not gonna be a sort of a dead start.
It's gonna be a running start as we get there. Again, you know, our team is progressing these agreements with the government and the other authorities. The state mining company, which is our major partner, has just had a big management change, for the good, I might add. That's helped a lot in getting, moving on with getting these agreements signed. You know, it's gonna be this year, I believe. Exactly when? I think one thing I can tell you is the Prime Minister and myself are equally motivated to get this mine started. But as far as we're concerned, we're not prepared to take any shortcuts, and we'll get there.
Oh, okay. Thank you. I'll leave it to someone else to ask questions.
Yeah. Thank you, Tanya.
As there are no more questions from the phone lines at this time, this concludes the telephone question-answer session.
We're gonna go to the room now, ma'am.
Okay, fantastic. Mark, thanks for the presentation. Two questions. First one on the buyback. You commented earlier, I saw a press headline that you believe Barrick is undervalued to peers. Certainly is trading at a discount. That was also the case a year ago, though, and you had a billion-dollar buyback and only used $424 million of it. Will you be more active on it in 2023?
Lawson, it's a balance. It's about allocation of capital. You know, one of the things I'd go back in 2021, you remember we had a short run on our stock, and we had no ability to stop it. That's what motivated us to file for the authority to do buybacks. Last year, Graham and I and Graham's team, we analyze the register and the trade. At times when we believe it's fundamentally undervalued, we will buy those shares, and we had a program to do it. If you look at how we bought the shares last year, we did very well.
We started at the right time, we stopped at the right time, and we were able to tighten up the market, a little bit during those weak periods. The reason we've requested authority again is that again, we just don't wanna be caught without a way to stop a negative run on our stock. We believe when you look at it, unlike some other companies who bought high and didn't buy low, we did. It's we see it as a tool to manage the fundamental value of our owner's assets. That's the way we do it. I know it's not absolutely specific, but I can tell you that we spend a lot of time worrying about why are we buying it and under what circumstance.
We also balance it against our own long-term capital allocation strategy. Last year, as you saw, that buyback impacted the dividend because we used up cash on the balance sheet. At the same time, we still delivered value back to shareholders. That's, if that makes sense. Graham, do you wanna add anything to that?
Yeah. I'd just reiterate the point that it's all about a balanced approach to using our capital. As you saw, one of the opportunities we took advantage of in the fourth quarter was to buy back some of our debt very favorably at a discount to par, which is saving us interest charges going forward. It's all about a balance. At the end of it all, we're very focused on having a strong balance sheet because we think through the cycle that's a differentiator. Again, you know, that's reflected in our current rating. It's a balance.
Fundamentally, Lawson, we're business people. We're owners. We treat this company as a business. You know, we run it as a business. We run the balance sheet properly. We look at the whole, at to Graham's point, the whole business profile and manage it accordingly, and we will continue to do that.
Okay. That's fantastic. Thank you both. I wanted to ask about one of your favorite countries, Argentina and Veladero. Maybe if you could just speak a bit to the recovery issues occurring at Veladero and just what the plan is at this point to address those.
A further comment on the CapEx being deferred from this year into next year. Do you have a number of how much that deferral was?
What we've done, first of all, it's this, as you see, there's a softer outlook for this year. As far as production goes, we've been conservative in the way we've treated this. The reason is that we've intersected, you know, we didn't get the drill rigs ahead of us during COVID. It was a real battle there. We did cover some of it, and we manage that mine on both bottle rolls and column leach test because the bottle roll doesn't always give you the right recovery. There was historical periods of cover where we just had bottle rolls. We had to make the best estimate. There's different categories of ore in that ore body. Some we call it T2, T1.
You know, we have different categories, and some of them are more lower recoveries. Over time, you get the gold out, but the leach profile is a lot flatter. When we managed through this last winter with a new pad, it's much more dynamic because there's no inventory in the pad. We saw a very flat curve developing on the leach. We also recognized that some of the ore body is more silica-rich, which impacts the leach. What we did is we've reduced or we're in the process of reducing the manpower. We've delayed the second, the lift, Phase 7.5, because we've got enough capacity. We've shifted it out into next year.
I mean, it's again to the point of managing it like a business. We've mobilized the rigs now because we've got them, and we're drilling out the ore body. At the same time, we're chasing the exploration opportunities within trucking distance of the mine. The view here is, we didn't just wanna keep barreling along without, you know, as you know, my whole being is around knowing your ore body. We wanna get that clearly understood, and there's no impact in the long-term opportunities at Veladero. It's good practice to do what we're doing, and that's the reason behind that slowdown this year. Of course, you've seen PVs picking up, Nevada's picking up, so we can cover that lower production out of Veladero.
Again, you know, from my career, when you're in these situations where it's completely artificial in Argentina because the exchange rates are artificial. You know, it doesn't make a whole lot of sense mining a lot of gold when you're not making a pile of money. Again, all around, it's a considered approach, with, you know, we've debated it with our partners in Shandong, and we've also spent a lot of time with the province. Again, what we've done is, as is traditional in Argentina, all big capital projects come with a royalty that goes into a fund to support economic development. We have a say in how it's spent.
What we've agreed with the province is we're gonna use some of those funds to really focus in on employment generation outside the mining industry, which I think is a good thing. All around, we've covered the bases to be able to manage this period. You good? Thanks.
Mark, it's Greg Barnes from TD Securities. I may as well open up the hornet's nest and ask you about M&A.
Yeah.
If the proposed deal between Newmont and Newcrest goes ahead, there'll be market cap on the face of it will be double you, production will be double Barrick. Do you care strategically about that scale and how big they would become and probably grab a lot of mind share globally from investors?
Well, I, you know, I've never seen that logic work, by the way. Because as you know in mining, it sort of doesn't fit with this question of, that used to be asked by you too, haven't you got too many assets? Getting big for the sake of getting big doesn't make a whole lot of sense to me, certainly with my money, and I believe our shareholders wouldn't like that either. Growing the business is absolutely our focus. We are, you know, we are obsessed about growing our business and growing the value. You can take as a given. We can't see much strategic benefit in just getting big for big-bigness sake. We don't agree with you that that builds a better company with more with more gravitas.
In fact, I believe it's probably adds more risk. That's really the way we look at it. We're gonna watch with interest how this thing progresses.
If I listened to you correctly during what you were talking about on the copper side, you've picked various areas of the world where you think you wanna focus. Is that where you would be leaning towards more on the M&A front, or is that gonna be an exploration focus for you?
Both. I think the interesting thing to your point, well, to the point I made earlier, and that is that there's a whole lot of people running around promoting metals, you know, new modern metals, including copper. You know, the real geological and mining skill and knowledge associated with those promotions are quite thin. So, and the, and like the gold industry, the copper industry is equally in a bad place when it comes to inventory. They haven't invested in the future. You look again, the results coming out now from these diversified huge amounts of money being made. You can't take all that money and invest it in a, like with magic, and find these big deposits. It takes time. We have been working on it for four years.
You'll see going through this year us pop up with new consolidated positions right in the heart of, you know, elephant country. Right now the opportunity to grow organically, if I, you know, is certainly in our business, sort of a preferred way because of the inventory rebuilding. That doesn't say we won't pick up on an acquisition opportunity if it arises. Again, we, you know, as you know, we're much more skilled as geologists and miners as most of our peers.
We have a much better capacity to call a project early, and take more risk on M&A than wait for the stuff to be tired and having produced a long time and everyone's running out of options. We run it up and buy them. That's really our. That's the way we would position our strategy.
Just one more question. Would you take that a step further? There are several big copper gold development projects in South America.
Yeah.
José María, for example. They need a joint venture partner.
Yeah.
Would that be something-
Yeah
... Barrick would do?
Yeah. Theoretically, absolutely. You know, destination is quite important, even though I say asset quality overrides destination. It's again, you've seen us exercise, sometimes to the frustration of bankers, to walk away from certain assets because we're not prepared to go beyond an already extraordinary premium. Absolutely, that's our preferred route, and we have ongoing conversations in Kevin's team on those opportunities all the time.
Thank you. Thanks, Mark. This is Ralph Profiti from Eight Capital. Mark, does the Dorothy discovery change your thinking on how that gets rolled at the Fourmile and then presented into Nevada Gold Mines, right? You know, is this a time, does it push it back a little bit, prove up the value, which you wanna sort of present that value proposition to Newmont? How does that discovery change that thinking? 'Cause I know that there's a structured approach on how that specific assets gets rolled into NGM.
It's a very simple approach. And it's very interesting, and we have open conversations with Newmont on these things. We have the final say in when it goes in, and it goes in on a formula. If we don't meet that formula and with Fourmile, it's a simple formula because of the quality of those deposits. Once we roll it in from the start, we get everything back. We split the whole cost of feasibility and all that, and then the value of that asset goes in at a market value recognizing premier in the market and the whole gambit.
There's no real logic for anyone not to participate in developing the project because ultimately it's in the best interest of the joint venture. We can also carve up, you know, Fourmile. We can put in some, keep some out, whatever. I don't know why everyone wants to see me. I can... They can just tell me. The opportunity to fully, comprehensively evaluate these types of ore bodies, you have to get underground to drill them 'cause, you know, it's a 1.5 km stretch from the surface.
Again, under the joint venture, we can share infrastructure, and we can invest in infrastructure from established infrastructure in Goldrush to continue to evaluate these projects, or we can come up with something else in agreement with our partners. On top of that, the real opportunity in this Fourmile development is if we continue, if what we are seeing materializes into what we expect it to do, we can access it from the other side, from the northern side. Again, we've learnt a lot in developing Goldrush because if we accessed it, we would access it with a long underground, a haulage that takes it out right at the smelter, at the roaster.
Because, you know, getting it out in the mountains there like we do with Gold Rush, you still got to transport it somewhere. We see that, and that ability gives us, it significantly changes our 15-year plan. Because it puts a whole slug of production at the back end of our 10-year plan, it lifts everything up. Strategically, that's what we really. This is early days, but, you know, it's. For me, there are two things out of this. This is very significant. When you see those, we've got hits around there, and some of them, you know, they go, "This is Carlin country, 1,000 grams a ton." You know, it's the real stuff. It's all breccia, Fourmile is much higher grade than Gold Rush.
It's the same structure, but it's, there's a big intrusion and the aureole has sort of metamorphosed the rock, and so it's very brittle. The mineralization is breaking it up. You've got these big breccias. The first thing is, you know, our, the fact that we've got the geologists to think like modeling and take these big decisions to drill these deep holes way ahead of where you, where you've found the last one. This opens up, and now we've got to look across the intrusion as well, the big intrusion, because that structure continues through. It also, you know, I've just been down there last week.
What it does is motivate our geologists for other targets, because we've got some significant targets that we're developing. It really, this is a product of our ability, the team's ability to vector these big geothermal halos and get into the heart of a mineralization. For me, again, you've seen us, we've been consolidating ground all around our already large land holdings. We're, I mean, I'm super excited about the opportunity because fundamentally, Nevada hasn't seen real exploration for a long time. You know, you've seen us replace. I mean, we've mined 10 million ounces there, 9 million ounces since, in the four years. We've paid out over $6 billion to shareholders, and we've replaced all the gold that we've mined. This is, you know, that's doesn't happen often.
I think there's the common theme across Barrick, is look what we're doing. You know, we haven't... When we put those two assets together, neither of them had a future. Barrick had better grade, but it had no future plan. Newmont's assets were on the decline. People had given up. We know that because we had to fix the infrastructure. They had completely given up.
Thanks for that. I also want to ask you a question on Mali and the mining audit. What has come out of those discussions? What do you anticipate to come out of those discussions? You talked about Papua New Guinea in the context of jurisdiction. How are you thinking about Mali right now?
You know, I've always said, people ask me, "What's your riskiest jurisdiction in your portfolio?" For my whole 30 years, I've said Mali. Mali's delivered more value than any other asset, you know, in any other country, 'cause we had Morila before and... This audit has been run by people who we know really well. These are professional people. This is not a gouge attempt. People out of Senegal who, you know, we know from our Senegal investments. Again, the, you know, I gave a talk 'cause the question that's been asked by the current regime is, "Does gold glitter for all Malians?" That's the question. It's up to us as miners, certainly, you know, we're 10% of the GDP.
The conversation with the finance minister is always very short. We actually are a core component of the Malian budget every year, the Barrick investment. Everyone's got a view and the whispers start, but right now we don't see that at all. We've been through three military regimes, a pile of incompetent civilian governments, but we've always come out because we pay big dividends and large amounts of tax. We employ Malians. We've got no expatriates in our executive team in Mali, either in the capital or on the mine. We manage that.
I, you know, I was there just a couple of two weeks ago as part of my quarterly visit, met with everyone. You know, we bring it up and my encouragement is, you know, if you look at what the mining's done, and there's no question about that amongst anyone, its contribution to developing that very poor country. What about, shouldn't we be thinking about all these revisions to the mining code and whether it's actually brought anything? Isn't it better to, in the face of all the challenges, reach out and encourage more investment? The one thing about Mali is the investment keeps coming in, or has in the past, because your money's considered safe, because the Malians haven't changed the rules like other countries.
Certainly there's a determination to understand and measure the rules, and also there's a big mistrust between the junta and the past civilian governments and some of the transactions that were done in that regime. This is good if it's done for the right reasons, it's a good thing because it'll uncover if there was any maladministration and otherwise it'll give something more fundamental which we can share with the people of Mali about the contribution of the mining industry.
Hey, it's Anita Soni from CIBC. Mark, three questions for you, increasingly more difficult. The first one, I think you mentioned that the Lumwana Super Pit, you mentioned there were a phrase saying that by the end of 2024. Was that just the feasibility study or would you have the Super Pit online by the end of 2024? You want the other-
I'm waiting for the next one.
You want the next questions too. Okay. The capital for 2023 decline from the guidance you gave in November. I just want to understand what the deferral was. Was that what you referred to with Veladero that the majority of that, I think about $250 million would have been a deferral at Veladero, or was there something else? What numbers should we be adding on into 2024 instead? The last one is just kicking that hornet's nest that Greg's already kicked once. I wanted to give you an opportunity to respond because there's been a lot of sort of conjecture about what your role would be in the recent M&A. I...
You've addressed sort of, growth and, you know, just taking out things, from a big picture perspective. I think people are speculating whether or not you would be involved in any kind of break-apart scenarios, and I just wanted to understand your view on that.
Okay. Anita, I'll take the most difficult one first, and that is the capital and Graham's gonna answer it.
Kind of answer the easy one, which is the pre-feasibility study, which is going to be completed at the end of 2024. To answer the first question. On the capital, there were some areas where we managed to cut some capital, a little bit of capital in NGM. really, Anita, you know, if the truth be told, when we present to you in the November Investor Day, we kind of just showed you a bar, which you then kind of took your ruler and got your number. When we guide in with more detail as we do in 2023, we try and look at where we're actually going to spend.
The reality with capital is there's often a bit of a lag between your ambition and what you actually get done in a year, and so we try and anticipate that in our guidance. There isn't any real major change to what we what our target is, but we're really just trying to give you a little more clarity on what the likely outcome is.
Could I just follow up with a question on the cost side of the equation? Those inched up a little bit from what was in November. Could you just talk about the key drivers for that?
There's a little bit of swings and roundabouts. You would have seen that there was slightly higher cash costs, slightly lower all-in sustaining costs. There's a little bit of swings and roundabouts moving between sustaining capital and operating costs as we optimize some of the mine plans. That's really all it is. It's mostly driven by that. Some areas we still had some inflationary pressure, where we were adjusting for the latest input prices in areas, for example, in AME, we got some slightly higher fuel and explosive costs that are sort of lingering in those areas that we've adjusted in the model. It's more about just the sequencing and the optimization.
One more follow-up on that one. As we go to 2024, I'm trying to remember what the 2024 cost structure. I remember the CapEx was pretty similar, but the cash costs, were they set to decline or similar and should we be using sort of the level that we have now for 2023 into 2024?
In our forecasting, we have declining costs in 2024, and that's really driven around our key assumptions around the input prices. It's really driven around, in particular, oil and energy prices. 2023, our key assumption around oil is $90 a barrel, which is very similar to the actual oil price for 2022. Our input prices for 2023 are very similar to 2022 in that sense. In 2024, in our forecasting, we're assuming oil drops down to $75 a barrel. That brings our costs down. On the flip side of that, if you look at our profile, it's increasing slightly. If your costs are coming down and you're increasing your ounces slightly, you also get a little benefit on your cost per ounce.
You could add to that, Anita, the fact that remember, we've heavily investing in green energy, and that brings a big saving. You know, the extra solar installation at Kibali. Kibali's been fantastic. Imagine what Kibali would look like on diesel? You know, and it's, you know, during the rainy season, it's 96% hydro now. We wanna try and keep that through the drier season. That's why we're putting in solar to be able to support that. Batteries, because we've learnt a lot about batteries. Really, the battery is the one that makes the grid. We've got a local grid there. If we can feed the battery with solar and hydro, we stabilize the grid, and we reduce the amount of. We're doing that across the group.
We're adding more solar in Loulo. We've learned a lot about managing microgrids with renewable energy, and that will also have a positive impact on our fuel bill going forward. The easiest question of the lot is I'm not going down that rabbit hole.
All right. Thank you.
Thanks very much. This is Jackie Przybylowski from BMO. I think most of the questions have been answered. Thanks for taking so much time with the answers. I guess I'll just ask a quick one on Reko Diq. You know, it sounds like you're moving forward with that and fairly quickly, is the impression I'm getting from today's presentation. I know there's a feasibility study or a technical report coming up soon. Is there any other catalyst or news events or announcements that we should expect maybe in 2023 before we see that study come out?
Just getting back to, before I go there, Jackie. Anita, we're gonna finish the pre-fees on Lumwana this year, so you'll have a good handle. Then we're full fees into 2024. We're really focused on being able to understand, you know, the decision-making sooner rather than later. Reko Diq, the plan is to get the feasibility complete by the end of next year. And really, it's around a couple of things: power, people, and water, and infrastructure. Infrastructure, we believe we've got a strong initial plan, which is rail. Then it's about building infrastructure, north-south infrastructure over time. Water, we've started already, and we...
The plan is we're gonna map the entire Chagai Basin, and the objective being that there's a lot of water, aquifer water in that basin. We're mindful of not sort of poaching water from the farmers. We really wanna understand the different deeper water systems in that area. Ultimately, long term, we'll move to desalination over the long term. Power, there's an opportunity for geothermal power. This place where we are, where Reko Diq is world headquarters for solar and wind. As you know, that doesn't offer 24/7 power. There is a younger, but extinct volcano, but a very strong geothermal gradient, which we are currently, as we speak, mobilizing to drill it. We're busy with the permitting, et cetera.
Our partners, of course, the SOEs are in the oil and gas business, and also the, you know, the opportunity to link to the grid, although the grid has challenges on stability. That's part of the feasibility. Those three are really the focus and of course, the baseline studies on environment and social. That's already well underway, and you know, we started that even last year. On the technical side of things, we're pretty comfortable with the drilling, the drilled-out resource. We've gotta finish sort of tack in some geotech holes and we, of course, which is sort of our DNA, we're gonna twin some of the holes just to make sure it's right.
Again, the technology on flotation has changed materially since 2013 globally. We are looking at a big swath of test work on, you know, grind versus recovery and things like that. Really looking at a much more modern approach to comminution and managing at the concentrate.
Sorry. I was just wondering if we're gonna get any sort of updates on that.
Okay. We'll update you as we go.
Okay.
You know, we don't expect any bad surprises, but you know, those are the only news really.
Okay
... is if there's something that de-develops that we haven't already anticipated. We've shared with you a pretty solid concept, you know, what somebody would call scoping as far as the economics and the development program. The intention is to be in development in 2025. You looked as though you wanna say something.
I just wanted to clarify that it's the pre-feasibility study for the Lumwana.
Yeah
that'll be completed in 2024, just to be clear.
Yeah. What's the problem? Okay. Any more difficult questions? Any more easy questions? There's a light lunch next door, some drinks. Please feel free to stay and continue your questionings with the team after this. Okay. Thank you. Thanks, everyone. Thanks to those on the call. Thank you for attending, and we look forward to seeing you in person through the next couple of conferences. We're going to be at BMO and then back up here in PDAC. We look forward to catching up with you. Thanks again.
This concludes today's event. Should you have additional questions, please contact the Barrick Investor Relations Department. You may now disconnect your lines. Thank you for participating, and have a pleasant day.