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Barrick prioritizes NGM growth opportunities

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Barrick's Tier One assets

An intensive strategic review by executive teams from Barrick Gold Corp. and Nevada Gold Mines has confirmed the enormous geological potential of the NGM properties and outlined key development projects, Barrick announced.

Barrick also issued the company’s annual report that cites the exploration potential at the mines operated by NGM that include three Tier One mines, which are mines with more than 10 years of life remaining, produce 500,000 gold ounces or more, and have mid-to-low cash costs.

Barrick President and Chief Executive Offer Mark Bristow said unlocking the full potential of the Nevada gold fields at what he described as one of the world’s largest and most prospective gold endowments had been one of the key drivers behind the formation of NGM.

“Barrick’s emphasis on agile management and exploration and orebody knowledge was implanted at NGM and is already delivering results,” he said.

“There are exciting opportunities for major new discoveries in the area between Turquoise Ridge and Twin Creeks, between Pipeline and Robertson in the Cortez complex, and in the Carlin Basin south of Gold Quarry. There are also good prospects of near to medium-term life of mine resource additions at North Leeville, Fourmile and Goldrush, as well as at the Ren project at the Carlin complex,” Bristow said.

Those opportunities he cited are exploration priorities for NGM following the executive review.

In the March 18 announcement, Bristow also said that since the NGM joint venture, formed on July 1, 2019, met all its key performance indicators last year, the focus was now shifting to the hunt for new discoveries and resource additions.

Toronto-based Barrick operates the joint venture and holds 61.5% of Nevada Gold Mines. Denver-based Newmont Mining Corp. holds the remaining 38.5% of NGM, which Barrick states is already the world’s single largest gold mining complex, with targeted production of between 3.4 million and 3.7 million ounces per year.

“As the joint venture matures, we are creating real opportunity to extend the company’s life of mine, thereby ensuring NGM can remain an economic driver for decades to come, not only for northern Nevada but for the entire state,” said Catherine Raw, chief operating officer of Barrick North America.

The review team included Bristow, Raw and other members of the company’s executive and regional teams as the NGM operator, according to NGM, which stated that the review highlighted new interpretations, modeling and implications that will feed into the exploration plan for this year and future years.

Newmont has representatives on the NGM board and quarterly meetings bring together executives from both partners, NGM said. Newmont’s senior executives are expected for their next Nevada visit this April.

Raw also said that the “profitability of our business and our corporate social responsibility go hand in hand. The NGM team is working on many exciting initiatives that directly benefit Nevada communities. An example of this is our broadband project that is coming to fruition after much preparation and planning.”

She said the project will help “solve the issue of quality internet in the rural areas of Elko, Spring Creek and Lamoille and will enable reliable remote learning options, telehealth accessibility and help to attract other large companies to the community by providing the necessary infrastructure.”

Bristow said that in addition to building a solid foundation for its 10-year business plan, NGM has established itself as a valued partner to its communities, the state of Nevada and its other local stakeholders through the Covid-19 support it provided.

“NGM is now driving online learning initiatives through partnerships with Nevada’s Department of Education and Discovery Education and continues its long-term backing of the Western Shoshone Scholarship Foundation,” Bristow said in the announcement on NGM.

In the annual report published March 19, he said Barrick’s environmental, social and governance criteria companywide “powered at all levels by a long-established partnership philosophy and a close relationship with all stakeholders, from investors to host communities, was a key factor in last year’s performance.”

On the financial front, Bristow said that since Barrick’s merger with Randgold Resources on Jan. 1, 2019, the share price grew by 118% by the end of 2020, the company’s dividend trebled and the board is recommending returning an additional $750 million of surplus cash to shareholders as a return of capital distribution this year.

“A company that was burdened by net debt of more than $13 billion as recently as 2013 now has zero net debt, no significant maturities for the next 10 years and a robust balance sheet, with strong liquidity consisting of $5.2 billion in cash and an undrawn $3 billion credit facility,” he said.

Also, in the annual report Barrick’s executive chairman, John Thorton, said the company is building future leadership and diversity into its experienced team.

“A wide range of skills, experience, perspectives and backgrounds will, we believe, foster continuing innovation, equip us to deal effectively with opportunities, challenges and risks, and draw us even closer to our stakeholders worldwide.

“Barrick has a high-performance culture and, in order to attract outstanding people who share our vision and values, our compensation model is ownership-based. A broad spectrum of our employees are shareholders, with a stake in the future success of the company and a common interest with our other investors,” Thorton said.

The annual report is on the Barrick Gold website.

“NGM is now driving online learning initiatives through partnerships with Nevada’s Department of Education and Discovery Education and continues its long-term backing of the Western Shoshone Scholarship Foundation."

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“The payment ... will result in a total cash return to shareholders of approximately $1.4 billion during the year, which represents the highest annual cash payout to shareholders in Barrick’s history"

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