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August 09, 2018

Town Hall With John L. Thornton

At our mid-year town hall, Barrick Executive Chairman John L. Thornton provided an update on the Company’s strategic framework and priorities. The discussion, summarized in a series of video clips below, covered seven core strategic dimensions of our business: our partnership culture; our decentralized business model; tier one and strategic assets; allocation of human and financial capital; operational excellence; growth; and China.

For a transcript of the remarks, click here. A copy of the slides can be downloaded here.
 

Partnership Culture

  • Trust based: currency is transparency
  • Belief that the whole greater than sum of the parts
  • Individuals prefer to work in that culture
  • Partnership culture is an ownership culture
    • Financial and emotional
  • External partnership an organic extension of internal, applies to all
    • Maximize benefits, mitigate risks

Decentralized Business Model

  • Most important: small, high-quality head office with specific functions
    • Allocates human/financial capital, sets strategy, and holds people running businesses to account
  • All else delegated to CEOs (General Managers + Executive Directors)
  • CEOs empowered and accountable
  • Nothing between head office and the business

 

Tier 1 and Strategic Assets

  • Tier 1 asset is large, long-life, and low-cost
    • Jurisdiction agnostic
  • 500,000 ounces, >10 years, better half of cost curve
  • Strategic asset: not tier 1 but has distinct long-term value

 

Capital Allocation: Human and Financial

Human

  • Assess talent rigorously on values (partnership, ownership & business model) and effectiveness (ability & record of execution)
  • Marry person and position

Financial

  • Superior per share returns over long-term — 10-15% ROIC through the cycle
  • Investment hurdle rate of 15% @ $1,200/oz
  • Allocation priorities balance between:
    • Strong balance sheet
    • Disciplined reinvestment in operations, organic growth and exploration
    • Reliable dividend and buybacks
    • Acquisitions

 

Operational Excellence

  • Benchmark vs industry best-in-class, data driven
  • Realize full potential of every asset in every respect
  • Master technology
    • This is the 21st century

 

Growth

  • Growth equals free cash flow per share and margins, not ounces
  • Preference for organic projects, geology led
  • Consistent investment in exploration replenishes pipeline
  • Acquisitions and divestments to upgrade quality, deliver strategic benefits

 

China

  • Distinctive, strategic partnership for the 21st century

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