Barrick Q3 2026 Results - FRANCO NEVADA CORP

Explicit Guidance:

• 2026 Full-Year Production & Costs: Guidance remains unchanged; expects Q4 gold production to be slightly higher than Q3 and Q4 copper production to increase due to stockpile processing at Lumwana. Costs expected to remain within the full-year guidance range, though African unit costs face pressures from fuel and FX.
• 2026 Earnings & Margins: Adjusted net earnings of $0.82/share and consolidated adjusted EBITDA of $3.5B reported for Q3; full-year EBITDA expected to benefit from high metal prices.
• 2028 Production Target: Lumwana expansion expected to reach 240,000 tonnes of copper annual production with first copper from the expansion scheduled for the end of Q1 2030 (noted as Q1 2028 in one instance of "first copper from the expansion" which likely implies Q1 2028 start of mining or a transcript error; context confirms "end of Q1 2028" as the start of first copper). Correction from transcript: "first copper from the expansion at the end of Q1 2028" (implies production starts late Q1 2028).
• Capital Expenditure (Lumwana): Total expected project capital remains on target at $2.0 billion; procurement of long-lead equipment is complete.
• North American IPO: Expect to complete the IPO of North American gold assets by the end of 2026 or early 2027 (January 2027), subject to SEC feedback and market conditions.
• Sustaining Capital: Run-rate sustaining capital expected to remain similar to 2026; 2027 capex expected to be shaped by disclosed projects and sustaining spend, with no immediate uplift from NGM optimization projects until 2027.
• Lumwana Cost Guidance: Full-year 2026 copper costs expected to land at the top end of the guidance range due to diesel prices, local currency appreciation, and royalties.

Business-Segment Outlook:

• North America (NGM & PV):
  • Production Profile: Adopting a "level out" strategy to reduce Q1/Q4 volatility; Q4 expected to be strong but not a record spike compared to historical "ski ramp" profiles.
  • Growth Projects:
    • Pueblo Viejo (PV): Resettlement 97% complete; third flotation train engineering underway to deliver recovery improvements and throughput beyond 2030.
    • NGM Optimization: Assessing options to optimize infrastructure including new processing capacity at Cortez and rail infrastructure to drive a "step change" in production over the next decade.
    • Carlin: Drilling focused on Greater Leeville; optimization of processing capacity could extend open-pit life well beyond 2050.
    • Four Mile: Integrated into NGM complex; engineering to access from Gold Rush side underway; permitting for Bullion Hill decline expected this quarter; S1 filing will contain updated info on JV synergies.
  • Exploration: NGM brownfield exploration budget has been unconstrained for a record year; high-grade intercepts at North Crow (between Gold Rush and Four Mile) being defined; metallurgy expected to be mostly double-refractory.
• Barrick International:
  • Gold: Portfolio approach manages weather disruptions (El Niño at Veladero/Porgera) to remain on track for full-year guidance. Lula Goncato performing ahead of restart plan (+16%); Kabuli up 20%; Bulyanhulu/Hulu and North Mara up.
  • Copper: Lumwana mill re-line complete; flat combined output from other assets offset by grades at Jebal Sahid vs. throughput at Zaldivar.
  • Africa/Andean Portfolio: Conducting reviews on embedded growth in Andean assets (Alto El Alto, Cerro de Pasco, etc.) to unlock value in the current higher-price, business-friendly regulatory environment.
• Reko Diq: Run-rate spend remaining at current levels; full review of development options ongoing, with market feedback expected by mid-2027.

Market and Competitive Outlook:

• Pricing & Costs: Benefitting from high gold and copper prices to offset cost pressures. Key cost headwinds include diesel prices, local currency appreciation (especially in Africa), and rising royalties linked to higher metal prices.
• Operational Efficiency: Focus on "managing the variables we control" via portfolio balance (e.g., North America ramp offsetting Africa weather issues).
• M&A/Strategic Positioning: Integration of Four Mile into NGM creating new synergies and flexibility; potential for asset monetization or re-development in the Andean portfolio.
• Supply/Demand: Implicit view on strong demand supporting high metal prices; company leveraging price leverage for earnings growth.

Macro / Industry Outlook:

• Weather: El Niño weather events (severe winter storms, drought) impacting Veladero and Porgera in Q3 and continuing into early Q4; managing these externalities via portfolio diversification.
• Currency/FX: Foreign exchange pressures noted in Africa; local currency appreciation impacting unit costs.
• Regulatory: SEC review timeline for North American IPO; Andean governments described as "more business friendly" now compared to a decade ago.
• Inflation: Industry-wide cost inflation expected (3–5% in some areas) on fuel and freight; company managing controllable costs but external drivers remain a headwind.

Strategic Initiatives:

• North American IPO: Targeting completion end-2026/early-2027; S1 filing with technical reports to be submitted "this month"; expected to provide updated reserves/resources context and Four Mile details.
• Lumwana Expansion: On track for $2B capex; mill re-line completed; first copper production end of Q1 2028.
• Pueblo Viejo Resettlement: 97% of families resettled; 99% of packages accepted; TSF (Tailings Storage Facility) construction advancing; third flotation train targeted for post-2030 impact.
• NGM Optimization: Engineering studies underway for:
  • Additional processing capacity at Cortez.
  • Rail infrastructure improvements.
  • Roaster optimization at Carlin.
  • Goal: Drive a step change in production over the next decade.
• Capital Allocation Framework: Priority 1: Balance sheet strength; Priority 2: Earnings-accretive growth (Lumwana, NGM); Priority 3: Shareholder returns (50% target of free cash flow payout via dividend top-up).
• Reko Diq Review: Full strategic review to determine the best path forward (development vs. other options) with feedback to market by mid-2027.

Risks and Headwinds to Outlook:

• External Weather: Continued El Niño impacts (storms, water shortages) could disrupt international operations in Q4.
• Cost Pressures: Rising diesel prices, local currency appreciation, and higher royalties may push African unit costs to the top end of guidance.
• Project Execution: PV third flotation train timing dependent on engineering and feed profile optimization; recovery rates expected to fluctuate ("ups and downs") before the 2030 step-change.
• Regulatory/Permitting: IPO timing dependent on SEC feedback; Reko Diq development path dependent on final strategic review (mid-2027).
• Market Conditions: IPO completion subject to prevailing market conditions.
• Labor/Community: Industry-wide competition for labor in Nevada affecting turnover; social investment commitments ongoing.

Management Tone on the Future:

• Confidence: High confidence in delivering full-year production and cost guidance despite external headwinds; confident in Lumwana capex budget ($2B) remaining on target.
• Strategic Shift: Pivoting from pure growth to "unlocking embedded growth" in the portfolio (Andean review, NGM optimization) and balancing capital returns with disciplined balance sheet management.
• Communication: Forward-looking statements framed with caution on 2027 guidance (will provide next year); S1 filing used as a primary vehicle for future NGM/PV technical data.
• Safety: Safety remains #1 priority; recordable injury rate improving (0.77 to 0.71).

Miscellaneous:

• Share Buybacks: $0.8B spent in Q3; 2026 total returns set to be record ($3.2B YTD).
• Dividend Policy: Quarterly base of 17.5 cents topped up to target 50% of attributable free cash flow; potential for additional top-ups from IPO/Newmont proceeds pending board decision.
• Free Cash Flow: $1.2B in Q3; $0.9B net cash on balance sheet.
• Safety Metrics: 24,000 critical control verifications conducted in Q3.