Barrick
Offers to Acquire NovaGold and Pioneer Metals
CORPORATE
PARTICIPANTS
Jim
Mavor
Barrick
Gold Corporation - VP, IR
Greg
Wilkins
Barrick
Gold Corporation - President, CEO
CONFERENCE
CALL PARTICIPANTS
John
Bridges
JPMorgan
- Analyst
Victor
Flores
HSBC
-
Analyst
Patrick
Chidley
[PJM]
- Analyst
Mark
Smith
Dundee
Securities - Analyst
Michael
Fowler
Desjardins
Securities - Analyst
Mike
Emmerman
Neuberger
Berman - Analyst
Justin
Andy
[BlackRock
Capital] - Analyst
Brad
Scott
Citigroup
- Analyst
Tanya
Jakusconek
National
Bank Financial - Analyst
PRESENTATION
Operator
Ladies
and
gentlemen, thank you for standing by. Welcome to the Barrick Gold conference
call. During the presentation, all participants will be in a listen-only
mode.
Afterwards, we will conduct a question-and-answer session. As a reminder,
this
conference is being recorded Monday, July 24th. I would now like to turn
the
conference over to Jim Mavor. Please go ahead, sir.
Jim
Mavor -
Barrick Gold Corporation - VP, IR
Thank
you,
operator. Good morning, ladies and gentlemen, and thank you for joining us
on
this call for the investment community, which is being webcast on a live,
listen-only basis. The news releases that were issued earlier this morning
can
be obtained at www.barrick.com or by calling our investor relations department.
Barrick's investor relations would be pleased to respond to
questions
after the call, and our media relations department will do
likewise.
I
am here
today with Greg Wilkins, our President and CEO, who will discuss our offers
to
acquire NovaGold and Pioneer Metals.
As
a
reminder, we will not be discussing our second-quarter financial results,
which
are scheduled to be released after market close on Wednesday, August 2nd.
Management will be making forward-looking statements during the course of
this
conference call. For a complete discussion
of the risks, uncertainties and factors which may lead to our actual financial
results and performance being different from the estimates contained in our
forward-looking statements, please refer to our year-end report or our most
recent AIF filing.
Now,
I'll
turn it over to Greg.
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Thanks,
Jim. Good morning, everyone. I certainly appreciate you joining us on such
short
notice this morning. Really here today to discuss the announcement of the
bid
for NovaGold and the agreement we have to acquire Pioneer Metals. I just
wanted
to say that, really, this is a continuation of the momentum that we have
now
been building for the last couple of years, starting with the projects, the
new
mines that we have opened, followed on by the Placer acquisition and now
the
potential acquisition of Nova, which we think is an excellent fit for our
project pipeline.
But
before
I actually get into that, I just wanted to give you a bit of an update on
how
we're doing. Obviously, we have had a lot of work to do over the course of
the
last six months integrating Placer Dome, and I'm very pleased with the progress
that we have made. We really have, in the last six months, virtually completed
the integration. Of course, there will be a lot of work to integrate the
cultures and so on and so forth. But we have got the new organizational
structure working efficiently. We have got all of the lines of reporting
in
place, and we're in the process of doing detailed reviews of all of the
operations and are frankly very pleased with what we are finding,
notwithstanding a little bit of the disappointment of the first-half production
estimates for a couple of the Placer assets.
We
are on
track to achieve our $200 million in synergies for a full run rate in 2007,
and
it looks like we will be able to achieve [order of] roughly half of that,
even
in 2006, so that is going along well. We have been able to, between myself
and
Peter Kinver and other members of the management team, get out to the
operations. I can say that I'm very pleased with the way that the integration
is
going, certainly at the mine site level, and the interaction of the management
teams from the various mines trading off ideas and working cooperatively
to
improve not just Placer assets but even our own assets. So the mixing of
people
is generally developing sort of a best practices approach. We are very excited
about the exploration potential at many of the Placer sites, particularly
at
Cortez Hills, Bald Mountain and Porgera, definite standouts. We are also
very
pleased with the projects that we have acquired, being Pueblo Viejo and Donlin
Creek. Of course, Donlin features into this transaction. We remain on track
for
our full-year production and cost guidance for both copper and gold, and
we're
looking for higher levels of production from Cortez, North Mara. And, of
course,
we started up Cowal, which will have a full six months in the second half.
And,
of course, we have been making continued progress on the reduction of the
Placer
hedge book, as we said we would.
So
turning
our attention to the transactions on the table this morning, I thought I
would
just quickly run over the NovaGold assets for you. Nova is a smaller company
and
may not be familiar to everyone. First of all, NovaGold is located exclusively
in North America, very important from a geopolitical perspective. Donlin
Creek,
where we are earning a 70% interest and we're the operator of that project
in
partnership with NovaGold, and so we are obviously very familiar with that
asset, and believe it has excellent exploration potential. But clearly, this
transaction consolidates the ownership of Donlin Creek. Donlin is located
in
Southwest Alaska. It's one of the largest undeveloped gold deposits in the
world, measured indicated gold resource of almost 15 million ounces at good
grades, on the order of 2.75 grams of gold per ton. There's a significant
inferred resource of some 14 million ounces at similar grades.
The
second
major asset that Nova has is a project known as Galore Creek. This is located
in
British Columbia. It's only about 75 kilometers from Eskay Creek and is really
a
world-class copper/gold project, with significant M&I gold resources and
inferred reserves, and also very significant copper resources and inferred
reserves. Equally, because we have already been operating at Eskay Creek
for
many years, we have excellent familiarity with operating in that region and
we
have a very collaborative relationship with the First Nations community up
there. NovaGold also has two other properties in Alaska, the Nome operations
in
Ambler and a portfolio of early-stage exploration properties, all located
in the
same general location. So what does it mean when you look at it put together?
Donlin Creek, Galore Creek and the Nome operations with Ambler represents
gold
ounces of about 12 million measured and indicated, and another 13 million
ounces
of inferred; significant silver, some 75 million ounces measured and indicated,
and a very significant inferred position; and then, copper, about 6.8 billion
pounds of measured and indicated and almost the same again in the inferred
category. They also have some $250 million of cash and marketable securities.
So
very robust, but very straightforward portfolio of assets.
Now,
the
rationale for us, I think, is pretty straightforward. When you just look
at the
assets and the fit, it's very logical. Clearly, the challenge -- and I think
all
of our investors have talked to me at some point in time about how can we
continue to maintain our production levels at such a high level, how can
we
replace our reserves and how can we grow reserves? I think the acquisition
of
these two principal assets is a very logical way to go about meeting some
of
those challenges.
These
assets play to our strengths. We have had significant experience in the
development front, significant experience in the permitting front. We see
the
acquisition of Nova and these two principal projects as being a very logical
fit. Both projects are still at the early stages, and so have excellent
exploration potential. So there's continued growth beyond just what we are
seeing in the indicated reserve and resource classifications.
We
also
are attracted by the fact that the assets are located in North America. It
helps
with our geopolitical balance, and of course we have seen challenges in
different parts of the world. Having a portfolio of assets anchored in North
America, I think, is a very reassuring factor. We believe that the acquisition
of Pioneer will also speed up the development of Galore Creek, as it
consolidates the land position, to enable that project to go ahead. There's
really a minimal integration risk here. Since we already manage one of two
of
the projects, taking on a second project, albeit a major project, is something
that we can comfortably absorb.
The
bid
for Nova is an all-cash bid, $14.50 a share US, represents a 24% premium
to the
closing price of Nova shares on AMEX on Friday. It's a very straightforward
structure, 35-day takeover bid with a minimum take-up condition of 75%. The
deal
will be financed out of existing cash and credit facilities within Barrick.
The
deal itself represents about $1.5 billion, and backing out the cash and
marketable securities represents about a $1.25 billion price tag for the
assets.
So by doing it in cash, we also increase our leverage to gold and copper
prices,
and clearly it shows the strength of our balance sheet to be able to do
it.
The
offer
on Pioneer is $1 a share. Again, this is a significant premium, albeit a
relatively small company. Again, same type of structure, 35-day bid structure.
In this case, we have a lockup, with key shareholders representing over 40%
of
the shares, and we have a right to match. As I mentioned a little earlier,
Pioneer really just has a nice collection of assets in the same general vicinity
as Nova, and will facilitate the development of the Galore Creek
project.
So
what
does it mean from a Barrick perspective? You can see it obviously enhances
our
North American asset base. We already have a very significant presence in
North
America, with proven and probable reserves almost 45 million ounces, but
our
measured and indicated resources go from 22 million ounces to over almost
35
million ounces, and the inferred category jumps from 14, almost 15 million
ounces to 28 million ounces. Of course, that's really the source for new
reserves and reserve replacement. With respect to the project pipeline, which
is
a key element of our strategy, as we have talked about, really, for quite
a
while now, we now have the Pascua, Cortez, Pueblo Viejo, Donlin, Galore,
Reko
Diq, Ruby Hill and Buzwagi, representing a very significant position of proven
and probable reserves, measured and indicated resources and significant inferred
resources plus expiration potential, which is all about the ability to replace
and grow reserves. So, while I won't do the math for you, I think it's fair
to
judge that it's a very significant position, and positions us well to meet
the
challenges that we have, being the size of company that we are. But it isn't
just a goal that we picked up. We also have significant reserve addition
potential in silver and in copper. Again, you can see the numbers on the
chart.
Clearly, between Galore Creek and Reko Diq, which we acquired earlier this
year,
a very significant contribution to silver and copper resources.
Now,
how
does it create value for the Barrick shareholders, which is really the key
element to this transaction? It clearly strengthens the pipeline of projects
that we have. It adds expiration and reserve replacement and growth potential.
It's a great fit because it consolidates the ownership of Donlin Creek. We
now
get 100% of the upside for 100% of the effort and the investment. We think
we're
well-positioned with the Pioneer transaction. And, of course, our strong
balance
sheet allows us to go forward with the development projects without equity
dilution. And, of course, these development projects play to the strength
of the
Company that we have been developing over the last number of years. And,
of
course, we have good leverage, having operated in British Columbia with good
community relations. Of course, overall, it improves our geopolitical risk
profile with the combination of US and Canadian assets. So in summary, the
acquisition enhances the North American portfolio, excellent potential at
Donlin
and Galore Creek, excellent opportunity to add significant gold and copper
production. The all-cash bid increases Barrick's gold and copper exposure.
I
think with the way that we have structured the transaction and the full price
that we put on the table for Nova, we have high confidence that we will be
successful in concluding the deal. So with that brief presentation, I'd like
to
open it up for questions, operator.
QUESTIONS
AND ANSWERS
John
Bridges -
JPMorgan - Analyst
I
see on
the map Eskay Creek and Galore Creek are pretty close together, although
in that
part of the world that probably doesn't mean everything. But what sort of
synergies, if any, can you see between those two?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
I
think
there's a few. As we wind down Eskay, we are certainly going to be making
manpower available and technical expertise. So there is going to be a nice
transition for us up there. Community relations is also going to be very
helpful, given that the Tahltans, who we have been working with at Eskay
Creek
for some time, are also operating in the same area as Galore Creek. Clearly,
government relations, since we are known to the ministry -- and I wouldn't
suggest that at this stage we see much in the way of cost synergies since,
as
you are correct to point out, that 75 kilometers is short as the crow flies,
but
it would probably be quite a significant different sources of access to get
to
either of the projects.
John
Bridges -
JPMorgan - Analyst
Pioneer
--
wasn't that the source of the hydro power for the Galore Creek?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
No,
that's
Pacific Coast Mountain, I think, where Nova has a transaction under way to
acquire the power.
John
Bridges -
JPMorgan - Analyst
So
what
does Pioneer bring, then? Is it just surface rights, land access?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
It's
a
consolidation of the land position that enables, I think, a more fulsome
development of the Galore Creek project.
Victor
Flores -
HSBC
- Analyst
I
can
fully see the rationale for the transaction, but I was wondering if you could
address the timing of the decision to acquire NovaGold in the context of
two
things -- one, that the integration of the Placer assets is still going;
and
secondly, in the sense that you control the timing of events, Donlin Creek
is
unlikely to go anywhere until Barrick commits to it. Galore Creek seems to
me a
bit large for NovaGold to do on their on. So it seems that you did have a
bit of
luxury of time, and I was wondering if you could address why the decision
has
been made to go ahead with this now?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
I
think
the first thing you mentioned is the integration of Placer, and we were clearly
not going to take on anything until we were very comfortable that that
integration was well enough advanced that it wasn't imposing any additional
risk
from an operational standpoint. These two assets are very attractive to us,
in
some respects, because Nova initiated the bid for Pioneer.
It
was a
bit of a catalyst to really step in and take control over the way the
accumulation of the assets would occur. We think that value will be created
through the ongoing efforts, and so we just thought it was good timing to
move
forward. Also, there is obviously a significant amount of work to be undertaken
in developing the feasibilities and to complete the permitting. So we were
anxious to certainly have a major influence on the development of those elements
for both of the projects.
Victor
Flores -
HSBC
- Analyst
Just
a
follow-up with respect to some of the technical aspects of these projects
--
you're obviously familiar with Donlin. Are you comfortable with the work
that at
least has been made public with respect to Galore?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Yes,
we
are very comfortable with the public information. We have obviously spent
quite
a bit of time assessing that information, based on our knowledge of the
operating situation in BC, and Eskay gives us an excellent source of data.
Obviously, we have been active in looking at new projects, and have been
building projects or are very familiar with what has been happening on the
cost
side. Because of our involvement in British Columbia, we have a pretty decent
handle on the timelines associated with permitting.
Donlin,
because we are the operator, we're extremely familiar with what's going on
up
there. I would say that on the Donlin Creek side, that we're finding there's
a
great opportunity as we continue to do the exploration work; the timelines
that
Placer had put into the marketplace will be, I think, characterized -- I
would
characterize them as on the optimistic side. So it is going to take time
to
bring something of that order of magnitude to fruition. Like all new projects,
there are certainly major infrastructure challenges that we need to meet.
But we
think that that's how you create value for the shareholders. That's how,
by
being able to build projects, and we have built the internal expertise to
do
that, we feel that it's a great risk-reward opportunity for us.
PatrickChidley
-
[PJM] - Analyst
I
just
wanted to ask a couple of questions about, in particular, Galore Creek, these
Grace claims that Pioneer have control. Could you maybe just walk us through
why
did the Pioneer acquisition -- why it was so important? And what do they
have,
what do they bring to the whole Galore Creek project?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
If
you
look at the prefeasibility study that's been published on Galore Creek, the
Grace claims, which Pioneer and NovaGold have an arrangement on, has been
highlighted as the source for the tailings [empowerment] area. I think that
NovaGold really initiated a bid for Pioneer in order to be able to bring
that
ground position together, so that they would be able to go forward with the
prefeasibility study as had been intended. So it was consolidating that
position, and that needs to happen for the timely development of Galore Creek.
So it's an important piece of ground. The parties had had some difficulty
in
coming to terms on it, as we can see from the public record. We just thought
it
was prudent to be able to bring the whole package together so that the Galore
Creek development could get underway as quickly as possible.
PatrickChidley
-
[PJM] - Analyst
What
are
your permitting timelines that you'd expect in British Columbia, given that
at
least NovaGold was going to complete a feasibility study this year on that
project? When would you expect you -- what would be the timeline into production
here?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Well,
we're going to conclude the transaction and get into a more rigorous review,
I
think, before we start to commit to the timelines.
Patrick
Chidley -
[PJM] - Analyst
Just
to go
back to Eskay Creek, are there any other synergies, in terms of the Eskay
Creek
sites, in terms of -- would that be used at all as part of the Galore Creek
project, or is that completely separate?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
I
think in
a material sense, we should really view it as separate.
Mark
Smith -
Dundee Securities - Analyst
What
would
your intention be for the Nome assets? I mean, it's largely Placer, with
a very,
very tiny bedrock gold deposit there.
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
I
think
it's just a bit early. They are not the cornerstone to the bid transaction.
But
we will, like consistent with what we're doing
with
a
number of other things, we will take a look at them and see whether they
fit
within our strategy or whether there's an alternative strategy that might
be
better suited to them.
Mark
Smith -
Dundee Securities - Analyst
Then
Ambler -- I know very little about that project. Perhaps you can enlighten
me on
that?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
I
would
say same thing with respect to the Nome operations -- really, really targeted
here on the two major projects that we're interested in.
Mark
Smith -
Dundee Securities - Analyst
Maybe
you
could just update us on how much work Barrick has done on Donlin Creek since
the
Placer acquisition?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We
have
been doing our technical review to really understand exactly the status of
Donlin, and we have a very significant exploration program underway. I think
we're intending to spend about $50 million on the project this year. Obviously,
looking to evaluate some of the infrastructure challenges, looking at the
permitting side. It's really our intention, later in the year, to give the
investment community sort of a more fulsome update on all of the projects
that
we have in our portfolio.
Mark
Smith -
Dundee Securities - Analyst
Just
in
terms of drilling and so on and so forth, that $50 million -- was it about
half
or looking at power, et cetera, et cetera, and about half for
drilling?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
I
would
have to get back to you on that. I don't have that on the top of my
head.
Michael
Fowler -
Desjardins Securities - Analyst
First
off,
I presume one would classify this as being a hostile bid. Have you had any
discussions with the NovaGold management?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We
have
had some ongoing discussions with the management team going back to March-ish,
talking about a variety of different ideas and different opportunities. But
we
never had a -- certainly haven't had a very recent conversation about this
acquisition with the Nova management team.
Michael
Fowler -
Desjardins Securities - Analyst
So
I
presume that they did not want to enter into, I guess, a lockup agreement
or
friendly agreement?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We
never
really engaged in discussions about acquiring the Company as a whole. The
nature
of the discussions we had just weren't really going towards fruition or coming
to fruition, and we are obviously very attracted by the asset potential and
the
fit within Barrick's strategy for these assets, so we decided to put forward
the
offer. We welcome the opportunity to talk to the Nova management team going
forward.
Michael
Fowler -
Desjardins Securities - Analyst
Fair
enough. Just on another point, Galore Creek is really a copper project with
gold
byproduct credits. Does this mean to say that Barrick is moving the ship
towards
more base metals?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
No,
we are
looking for high-quality gold assets, and I think that we talked in the past
about copper/gold projects as being sort of the wave of the future. This
has the
characteristics of being a long-life asset. We believe that there's the
opportunity for very good financial returns here. We like the geopolitical
risk
profile, being in Canada. We can always manage the amount of copper contribution
to the Company through any number of structures. So we actually thought that
when we were going to be in any way diminishing value or diminishing our
focus
on gold, there are clearly ways to go about dealing with that.
Michael
Fowler -
Desjardins Securities - Analyst
I
think
Placer Dome actually talked about a pre feasibility study on Donlin Creek
for
the fourth quarter of last year. I don't remember seeing anything or hearing
anything. Can you comment on any pre feasibility study that was
done?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We
still
have a lot more work to do, to get to a pre feasibility study. It's one of
those
situations where the opportunity from an exploration standpoint continues
to
express itself in different ways. So trying to define what the project looks
like is still a bit of a ways off.
Michael
Fowler -
Desjardins Securities - Analyst
Capital
expenditures for both projects would be about $3 billion?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Again,
it's early. I think, if you look at some of the published information on
the
scope of projects, these are obviously very major projects, with major CapEx.
That's really what we're targeting, are the major long-life projects where
we
can build a lot of value over the long run and make significant investments.
It's one of the, I think, unique features of the Company, of the seniors,
to be
able to go out and build those large projects and create value. That's our
niche
in the world, I think, as the industry is unfolding. So it's nice to have
a good
pipeline of projects. We move them forward, and the best projects come to
the
front. It gives us, I think, incredible flexibility in terms of being able
to
replace reserves, grow reserves and production.
Operator
Michelle
Stein, Neuburger Berman.
Mike
Emmerman -
Neuberger Berman - Analyst
It's
Mike
Emmerman. Michelle and I are here together. We are substantial holders of
both
Barrick and Nova. Just curious - the 75% compliance for the deal might prove
a
little difficult between Nova management and large holders of the stock,
depending on valuation parameters. I'm just curious -- you've had no discussion
with Nova about this pricing? I'm wondering if you had discussions with any
of
the large holders?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
No,
we
have not have discussions with any of the large holders or the management
on the
pricing of the offer.
Mike
Emmerman -
Neuberger Berman - Analyst
It
just
seems somewhat problematic at 75%.
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Well,
I
think the offer is a good offer. I think it's a full reflection of the
opportunity and the risks associated with the opportunity. We spent a lot
of
time, obviously, trying to come up with a price that we think is full and
fair,
and we landed at $14.50.
Mike
Emmerman -
Neuberger Berman - Analyst
Okay,
we
shall see. Thank you.
Justin
Andy -
[BlackRock Capital] - Analyst
I
was just
wondering if you could tell me what you plan on doing with the NovaGold
warrants.
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We're
treating this as a fully-diluted transaction. All the numbers that I've quoted
is on a fully-diluted basis. So I imagine the warrants, if they are in the
money, will be exercised, and the bid will extend to those warrants as
well.
Justin
Andy -
[BlackRock Capital] - Analyst
So
a
forced conversion upon the closing of the deal?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Yes.
Brad
Scott -
Citigroup - Analyst
I'd
just
like to focus on some of the financial metrics, perhaps from the credit side,
just for a moment. I'm not really familiar with NovaGold, but am I right
to say
this doesn't generate any cash? This is simply reserves that you'll harvest
in
the future? I would like to also just ask about the funding mix, using cash
off
your balance sheet, and then how much incremental debt you expect to use
to fund
the purchase?
Also,
just
on a pro forma basis, taking into account pensions and possible short-term
debt
that Nova has, what do you expect to have?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
Well,
we
are using existing cash resources and lines of credit, and we'll be financing
out most or all of the purchase price through a long-term financing structure
as
we reposition the balance sheet going forward. There's not a lot of material;
there is no debt within Nova itself. There's no material off-balance sheet
obligations within Nova. So the Nova transaction doesn't bring any additional
debt to the Company. In fact, they bring about $250 million worth of cash
and
marketable securities. So, obviously, we're generating very significant cash
flow from our operations, and our balance sheet remains a very strong
investment-grade balance sheet. So we're not looking to undermine any of
those
criteria as we move forward with this acquisition.
Brad
Scott -
Citigroup - Analyst
Is
there
actually a pro forma leverage number that you are able to mention?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
No,
not at
this point.
Brad
Scott -
Citigroup - Analyst
When
you
did the placer transaction, it was predominantly equity. You have a reputation
for being a reasonably bond-friendly company in M&A. Does this change the
course in terms of you using some portion of debt to fund this
transaction?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
No.
We are
very focused on having and continuing to have a strong balance sheet and
fund
our operations prudently. Non of that has changed. I think our balance sheet,
particularly with the equity offering that we did with Placer, is very robust.
The debt-to-market-cap ratios are very low. So we can comfortably use some
of
the capital and liquidity within our balance sheet without undermining the
credit quality of the Company.
Tanya
Jakusconek -
National Bank Financial - Analyst
Does
Barrick hold any shares in NovaGold at this point?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We
do
not.
Tanya
Jakusconek -
National Bank Financial - Analyst
Just
on
the prefeasibility of Donlin, can you just give us an idea when we would
have
some sort of information on that?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
There's
a
lot of work going on at the moment, and what I'd like to do is really bring
together the status of all of our development projects in the fall, so we
can
give everybody a more thoughtful, comprehensive look at all of them and share
with you what the plans are and what the timing looks to be. Obviously, with
permitting timelines these days, it's difficult to just offer up a particular
timeframe without understanding the issues and the dynamics that go into
them.
Tanya
Jakusconek -
National Bank Financial - Analyst
Maybe
you
can remind me of your earn-in. I use to remember it was tied into bringing
it in
at a certain time for production and permitting, et cetera. Can you remind
me of
that, to earn in your 70%?
Greg
Wilkins -
Barrick Gold Corporation - President, CEO
We
needed
to deliver a bankable feasibility study by November of 2007, and that secures
the 70% interest.
Okay,
well, that's the questions that we have. So I want to thank everybody for
joining us. I think that this announcement is yet another important step
forward
in continuing to grow Barrick and to continue to create value for the
shareholders. I think it's also a good transaction for the NovaGold
shareholders, as it offers a full and fair cash price, and certainly overcomes
a
number of the risks that would be inherent in two large-scale developments
within a relatively small company. So I think it's a great fit on both
sides.
So
with
that, don't hesitate to call our investor relations folks if you have more
questions that come to mind. We will look forward to catching up with you
next
week when we announce our second-quarter results. So thanks again, everybody,
for joining us.
Operator
Ladies
and
gentlemen, that does conclude the conference call for today. We thank you
for
your participation and asked that you please disconnect your lines.
END
OF
PRESENTATION
Full
details of the offer will be included in the formal offer and take-over bid
circular to be filed with the securities regulatory authorities and mailed
to
NovaGold shareholders. Barrick expects to have the take-over bid documents
filed
as soon as possible. The offer will be open for acceptance for at least 35
days
following the commencement of the offer. The offer will be subject to certain
conditions, including receipt of all necessary regulatory clearances, absence
of
material adverse changes and acceptance of the offer by NovaGold shareholders
owning not less than 75 per cent of the NovaGold common shares on a
fully-diluted basis. Once the 75 per cent acceptance level is met, Barrick
intends, but is not required, to take steps to acquire all outstanding NovaGold
common shares.
For
further information:
|
INVESTOR
CONTACTS:
|
|
MEDIA
CONTACT:
|
|
James
Mavor
|
Mary
Ellen Thorburn
|
Vincent
Borg
|
|
Vice
President,
|
Director,
|
Senior
Vice President,
|
|
Investor
Relations
|
Investor
Relations
|
Corporate
Communications
|
|
Tel:
(416) 307-7463
|
Tel:
(416) 307-7363
|
Tel:
(416) 307-7477
|
|
Email:
jmavor@barrick.com
|
Email:
mthorburn@barrick.com
|
Email:
vborg@barrick.com
|
****************************************************************************************************************************
Additional
Information
Barrick’s
mineral resources have been calculated as at December 31, 2005 in accordance
with National Instrument 43-101 as required by Canadian securities regulatory
authorities. While the terms “measured”, “indicated” and “inferred” mineral
resources are required pursuant to National Instrument 43-101, the U.S.
Securities and Exchange Commission does not recognize such terms. Canadian
standards differ from the requirements of the U.S. Securities and Exchange
Commission, and mineral resource information contained herein is not comparable
to similar information regarding mineral reserves disclosed in accordance
with
the requirements of the U.S. Securities and Exchange Commission. U.S. investors
should understand that “inferred” mineral resources have a great amount of
uncertainty as to their existence and great uncertainty as to their economic
and
legal feasibility. In addition, U.S. investors are cautioned not to assume
that
any part or all of Barrick's mineral resources constitute or will be converted
into reserves. For more information on Barrick’s mineral resources and mineral
reserves and for a description of the key assumptions, parameters and methods
used in calculating Barrick’s reserves and resources, see Barrick’s most recent
Annual Information Form/Form 40-F on file with Canadian securities regulatory
authorities and the U.S. Securities and Exchange Commission.
Forward-Looking
Statements
Certain
information included in this press release, including any information as
to our
future financial or operating performance and other statements that express
management's expectations or estimates of future performance, constitute
"forward-looking statements." The words "expect", "will", “intend”, “estimate”
and similar expressions identify forward-looking statements. Forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by management, are inherently subject to
significant business, economic and competitive uncertainties and contingencies.
Barrick Gold Corporation cautions the reader that such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that
may cause the actual financial results, performance or achievements of Barrick
Gold Corporation to be materially different from the Barrick Gold Corporation's
estimated future results, performance or achievements expressed or implied
by
those forward-looking statements and the forward-looking statements are not
guarantees of future performance. These risks, uncertainties and other factors
include, but are not limited to: changes in the worldwide price of gold or
certain other commodities (such as copper, silver, fuel and electricity)
and
currencies; changes in U.S. dollar interest rates or gold lease rates; risks
arising from holding derivative instruments; ability to successfully integrate
acquired assets; legislative, political or economic developments in the
jurisdictions in which Barrick Gold Corporation carries on business; operating
or technical difficulties in connection with mining or development activities;
employee relations; the speculative nature of gold exploration and development,
including the risks of diminishing quantities or grades of reserves; adverse
changes in our credit rating; contests over title to properties, particularly
title to undeveloped properties; and the risks involved in the exploration,
development and mining business. These factors are discussed in greater detail
in Barrick Gold Corporation’s most recent Form 40-F/Annual Information Form on
file with the US Securities and Exchange Commission and Canadian provincial
securities regulatory authorities.
Barrick
Gold Corporation disclaims any intention or obligation to update or revise
any
forward-looking statements whether as a result of new information, future
events
or otherwise, except as required by applicable law.