Which of Barrick’s global operations contributed most to the record free cash flow in Q3 2020?

Q3 2020 was a key milestone for Barrick, and the results were a lot more than just capturing the strong gold prices. 2019 was all about change, flattening the structure, reducing the corporate headcount, reducing liabilities in Latin America and creating a three-region executive structure. The start of 2020 was marked by the closing of the Acacia transaction, the Nevada joint venture and the Massawa transaction. Then Q2 was about dealing with the first blows of Covid. Q3 delivered a very strong quarterly increase in operating cash flow of 80%, a record free cash flow of US$1.3 billion, bringing down the debt for the seventh consecutive quarter since the merger, and moving towards a zero net debt situation. This allowed us to lift the dividend to a level we believe is sustainable at a long term US$1,200 gold price.

From a free cash flow standpoint, the contribution across the organization was material, with the two key drivers being Africa and the Middle East, and North America. When you look at the definition of tier one assets – robust 500,000 oz/y producers – Kibali continued to do well, Loulo-Gounkoto did very well, the three big tier-one complexes in Nevada contributed significantly, with the big gorilla being Carlin, producing 1.7 million ounces annually. In our Latin America and Asian Pacific region, Pueblo Viejo delivered a fantastic quarter and is growing into something quite spectacular. The two African newbies, North Mara and Bulyanhulu, started to make a contribution, and the copper mines did well.

What have the challenges Barrick has faced in 2020 taught you about your business?

Embedded in every crisis is a fantastic opportunity. While the gold price accelerated our business strategy, Covid tensioned up our team, and we were able to prove that this model worked. Five quarters of practice at holding operations accountable for their business had prepared us to rely on our local teams, and there was no shortage of challenges. In Chile we had to deal with geopolitical issues and the Pascua-Lama process; in Argentina we had to manage the legacy issues at Veladero and the currency crisis; in Peru we put Lagunas Norte on care and maintenance; there was a coup in Mali; a democratization transition in DRC; the Porgera challenge in Papua New Guinea; modernizing Hemlo; and unwrapping Nevada Gold Mines.

Nevada has worked so well that people have taken it for granted, but to take a 3.5 million oz/y producer, with 7,100 employees and 4,000 contractors in the US, with two completely disparate cultures, and stick them together, throw in the uncertainties of the US election year, plus Covid – the team did a spectacular job. Q3 was the culmination of a global business working towards being world class in every aspect that had been built over 18 months through multi-faceted challenges.

What are your views on the best way to sustainably build a license to operate?

Mining touches every facet of life, so you are bound to run into challenges. It is the way you manage these challenges that is important. You cannot manage everything remotely; you have to embed a culture in your organization and people have to live sustainably. The social side of ESG – poverty – is often neglected. We have just been through a series of governance meetings with institutional fund managers, independent directors, sustainability executives and HR managers, and there is a realization that for too long the industry has been more hung up with compliance than actual behavior.

In 2020, Barrick appointed two new exploration VPs. What is their mandate, and where do you see the best potential for new discoveries?

You need an R&D arm in any business, and in mining the foundation of new business starts with exploration. It is the engine that drives our M&A strategy. We brought Aofie McGrath into Africa where we already have a very strong geology drive and exploration teams. To reestablish Barrick in Latin America, we brought in Leandro Sastre, who was a very smart mineral resource manager at Veladero with a lot of experience. Tanzania is probably our hottest place in Africa for new opportunities and brownfield growth.