Barrick Gold - Leveraging Assets, Culture and Sustainability for Shareholder Returns

Introduction

A conversation with Mark Bristow, President and CEO of Barrick Gold, discussing the strategic vision and developments at Barrick Gold since he took the helm in January 2019.

Bristow provides an in-depth perspective on the rationale, goals, and outcomes of the merger between his previous company Randgold Resources and Barrick. He elaborates on the subsequent key strategic moves undertaken to realize the full potential of combining Randgold's distinctive culture and expertise with Barrick's world-class assets.

Interview with Mark Bristow, Chief Executive Officer

Randgold & Barrick Merger

Bristow explains that the merger between Randgold and Barrick Gold originated from his view in 2015 that Barrick had great assets globally but had fallen on hard times after the commodity supercycle ended. Bristow approached Barrick's Chairman to propose combining the companies in a nil-premium merger to create a reinvigorated world-leading gold miner, blending the best assets, people and cultures.

The thesis was joining Randgold's proven expertise in lean, decentralized operational management, entrepreneurial culture and track record of profitability with Barrick's tier-one global asset base would be transformational. This was initially met with skepticism about successfully integrating Randgold's distinctive culture across Barrick's global footprint.

However, Bristow was confident Randgold's hands-on, accountable, engaging approach could permeate Barrick. He notes while Randgold operated in Africa, every manager lived on-site, acting like owners responsible for their asset's performance. This could be replicated worldwide with the right structure.

Post-Merger Strategy

A pivotal subsequent strategic move was combining the Nevada assets of Barrick and Newmont into a joint venture in 2019, creating Nevada Gold Mines - the single largest gold mining complex globally. Prior duplicated infrastructure and trucks passing each other's processing plants were economically irrational.

Bristow also revitalized underperforming former Acacia mines in Africa acquired from Barrick by taking them private. This localized workforces, upskilled nationals and improved productivity. He implemented a flatter structure with only 48 corporate staff, down from 200, and regional COOs directly overseeing mines.

Quarterly site visits across global operations allow Bristow to maintain Randgold's hands-on, accountable culture. This agile framework has successfully embedded an entrepreneurial culture across Barrick's global footprint. Ongoing exploration is also a high priority, incentivizing on-site geologists and managers.

Strategic Priorities

Barrick's key strategic priorities are straightforward - locate tier-one assets in prospective regions, hire and empower top operational teams and deliver profitable production, exploration success and shareholder returns.

A core goal is to grow production organically by 25% by 2029 through existing pipeline projects like Pueblo Viejo's expansion in the Dominican Republic, without overpaying for acquisitions. Barrick's strong margins provide exploration upside and capital returns for shareholders via dividends and buybacks.

Bristow sees potential to expand into Australia with the right high-quality opportunity but won't over-reach. He maintains focus is superior to scale, sticking to assets where Barrick can add value through technical or operational expertise.

He argues Barrick provides leverage to gold plus dividends and growth that physical gold lacks. Its tier-one assets, top teams and profitable culture make it a superior gold investment than ETFs or bars alone for shareholder returns.

Sustainability and Host Nations

Importantly, Bristow also emphasizes mining must benefit host nations and communities. Barrick aims to prove mining can drive sustainable prosperity where it operates through jobs, supply contracts, infrastructure and up-skilling workforces.

He notes mining assets belong to host countries so engaging openly and transparently is crucial. Operations must care about surrounding communities, and retaining a social license to operate. This ethos is instilled company-wide as an essential part of Barrick's culture and vision.

5 Takeaways for Investors

• Focus on Tier One Assets - Barrick focuses on owning the best tier-one gold assets globally. This provides leverage to gold prices with low-cost production and exploration upside from high-quality mineral endowments.
• Organic Growth Potential - Barrick aims to grow production organically by 25% in the next 7 years through existing projects and exploration. This avoids relying on expensive acquisitions or dilution.
• Strong Leadership and Culture Barrick - has blended the entrepreneurial and accountable culture from Randgold across its global operations. This drives performance and capital discipline.
• Shareholder Returns - Barrick's profitable production allows dividends and share buybacks alongside growth. The goal is to outperform gold prices and indexes for shareholders.
• Sustainability and Partnerships - Barrick actively engages with host nations and communities. It aims to create sustainable benefits through jobs, contracts, infrastructure and upskilling workforces.

Barrick offers investors exposure to top-tier gold assets, production growth, strong leadership and a proven partnership approach globally. The company is focused on driving superior shareholder returns.

Conclusion

Bristow provides context on executing Barrick's transformation into a leaner, decentralized global gold leader. Key takeaways are the importance of blending complementary corporate cultures during M&A, retaining focus on world-class assets and teams, sustaining social license via shared value with host nations, and ultimately converting expertise into shareholder returns.