Barrick Reports First Quarter 2014 Results
TORONTO, ONTARIO--(Marketwired - Apr 30, 2014) - Barrick Gold
Corporation (NYSE:ABX) (TSX:ABX) (Barrick or the company) today
reported first quarter net earnings of $88 million ($0.08 per
share). Adjusted net earnings were $238 million ($0.20 per share).
Operating cash flow and adjusted operating cash flow was $585
million.
|
OPERATING HIGHLIGHTS AND GUIDANCE |
|
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|
First Quarter |
|
Revised |
|
Original |
|
Gold |
2014 |
|
2014 Guidance |
|
2014 Guidance |
|
Production (000s of ounces) |
1,588 |
|
|
|
6,000-6,500 |
|
All-in sustaining costs ($ per ounce) |
833 |
|
|
|
920-980 |
|
|
|
|
|
|
|
Copper |
|
|
|
|
|
|
Production (millions of pounds) |
104 |
|
410-440 |
|
470-500 |
| C1
cash costs ($ per pound) |
2.11 |
|
|
|
1.90-2.10 |
|
|
|
|
|
|
|
|
TOTAL CAPITAL EXPENDITURES ($ millions) |
509 |
|
|
|
2,400-2,700 |
"Barrick is a considerably different company today than it was a
year ago - leaner, stronger and more financially flexible. Our
first quarter all-in sustaining costs of $833 per ounce, $100 per
ounce below the prior year quarter, demonstrate that our efforts to
reduce costs are delivering tangible results," said Jamie Sokalsky,
Barrick's President and CEO. "We continue to focus on assets that
can generate the most attractive risk-adjusted returns and free
cash flow for Barrick and its shareholders, and we are decisively
addressing our under-performing operations. It's clear that
Barrick's optimized portfolio continues to deliver solid results,
and we are pursuing a number of opportunities in Nevada to unlock
further value from our high quality asset base."
| Operational Excellence is a Top Priority |
- Maintaining 2014 gold production guidance and all-in sustaining
cost (AISC) guidance, the lowest costs among the senior peer
group
- Five core mines produced 0.94 million ounces of gold at an
average AISC of $672 per ounce. These mines are expected to
contribute about 60 percent of total production in 2014 at an
average AISC of $750-$800 per ounce
- On track to achieve run rate for targeted $500 million in
annual savings by the end of 2014
| Further Progress on Portfolio Optimization |
- Barrick continues to optimize its portfolio and lower costs.
The company has divested non-core assets for a total consideration
of over $1 billion since July 2013, including the sale of the
Kanowna and Plutonic mines in Australia and its 33 percent stake in
the Marigold mine in Nevada in 2014
- Reduced equity interest in African Barrick Gold (ABG) by 10
percent during the quarter, capitalizing on the substantial
improvement in ABG's share price in 2014 and creating additional
liquidity in ABG
- Completing advanced scenario plans for a range of metal price
environments, which will allow Barrick to respond and adapt quickly
to changes in market conditions. Options under consideration
include preserving cash, downsizing, closing, expanding or
accelerating certain operations depending on market conditions.
This will result in a more optimized portfolio that maximizes
profitability in a lower metal price environment and better
positions the company to capitalize on the strength of its asset
base in the event of a price recovery
- Cash and cash equivalents of $2.7 billion as at March 31,
2014
- Operating cash flow of $585 million in the first quarter of
2014
- $4.0 billion available under undrawn credit facility extended
to January 2019
- $300 million of debt maturing in the next two years, and
approximately $1 billion due in the next four years
FINANCIAL DISCUSSION
First quarter 2014 adjusted net earnings were $238 million
($0.20 per share)(1) compared to $923 million ($0.92 per share) in
the prior year period. The decrease primarily reflects the impact
of lower metal prices and lower gold sales volumes. Net earnings
for the first quarter were $88 million ($0.08 per share) compared
to net earnings of $847 million ($0.85 per share) in the prior year
quarter.
Significant adjusting items for the quarter include:
- $113 million in unrealized foreign currency translation
losses
- $30 million in demobilization costs related to the ramp-down of
Pascua-Lama
- $18 million in realized and unrealized gains on non-hedge
derivative instruments
First quarter operating cash flow of $585 million compares to
$1.09 billion in the prior year period. The decrease primarily
reflects lower net earnings, partially offset by a decrease in
income tax payments. Adjusted operating cash flow of $585 million1
compares to $1.16 billion in the prior year period.
GOLDRUSH AND OTHER OPPORTUNITIES IN NEVADA
Nevada is a cornerstone of Barrick's success, and a number of
growth opportunities are under consideration. The Goldrush project
near the Cortez mine is in the pre-feasibility stage and the study
remains on schedule for completion in mid-2015. The company is
evaluating a number of development options, including underground
mining or a combination of both underground and open pit mining.
Recent drilling has encountered deep, very high grade
mineralization, including an intersection of 103 feet averaging
0.725 ounces per ton, which continues to expand the size and grade
potential to the north. Barrick is assessing the feasibility of an
exploration decline to better define the existing resource and test
for additional mineralization beyond the northern extent of the
deposit.
At Cortez Hills, drilling in the Lower Zone is in the final
stages of a program to upgrade and expand the resource base. The
Lower Zone is characterized by strong and continuous ore zones.
Following completion of the scoping study, a pre-feasibility study
to evaluate deeper mining below the currently permitted level is
expected to be completed by late 2015. Below this level, the Lower
Zone is mostly oxide and higher grade than the zones above.
Drilling has yet to determine the limits of the Lower Zone and
further drilling is planned for the second quarter. Results to date
have met or exceeded expectations.
Turquoise Ridge contains over 6.7 million ounces (100 percent
basis) in reserves at an average grade of 0.51 ounces per ton, the
highest reserve grade deposit in the company's operating portfolio.
This exceptional reserve base provides an excellent opportunity to
both accelerate and expand production, but the operation is
currently restricted by haulage and ventilation constraints. One
option being considered is an additional shaft to reduce haulage
distances. This could increase production by 75 percent for five to
eight years. A pre-feasibility study on this scenario is expected
to be completed in late 2014.
The Cortez District continues to yield promising exploration
opportunities beyond Goldrush. Barrick has earned a 70 percent
interest in the Spring Valley project approximately 60 miles west
of Cortez by conducting exploration drilling and scoping
activities. The project has advanced to the pre-feasibility stage
and could potentially be a new stand-alone gold mine. The company
also recently secured the last remaining block of prospective land
in the Cortez District. In addition, it has the option to attain a
75 percent interest in the Gold Ridge project, located just north
of the Pipeline deposit at Cortez, by completing a scoping study.
This is an earlier stage opportunity in a key district which has
encouraging geological characteristics.
PASCUA-LAMA RAMP-DOWN ON SCHEDULE
During the fourth quarter of 2013, Barrick announced the
temporary suspension of construction at Pascua-Lama, except for
activities required for environmental and regulatory compliance.
The ramp-down is on schedule for completion by mid-2014 and the
majority of demobilization has already occurred. The company
expects to incur costs of about $300 million2 this year for the
ramp-down and environmental and social obligations.
A decision to restart development will depend on improved
economics and reduced uncertainty related to legal and regulatory
requirements. Remaining development will take place in distinct
stages with specific work programs and budgets to facilitate more
efficient execution and improved cost control. Barrick continues to
explore opportunities to improve the project's risk-adjusted
returns, including strategic partnerships or royalty and other
income streaming agreements.
INDUSTRY-LEADING EXECUTIVE COMPENSATION PLAN IMPLEMENTED FOR
2014
Barrick's new 2014 executive compensation program fundamentally
aligns compensation practices with the long-term interests of
shareholders based on the principle of pay-for-performance. Under
the revised program, participating executives will be assessed on
their collective performance, as measured against a transparent
scorecard disclosed to shareholders in advance. The company's
long-term scorecard will assess participating executives on eight
performance measures including return on invested capital,
dividends to shareholders, capital project performance and free
cash flow. Scores will be published to shareholders at the end of
each year, ensuring transparency.
If earned, a majority of compensation awarded will be long-term
in nature, and paid out in units that ultimately convert into
Barrick common shares. These shares cannot be sold until a
participating executive retires or leaves the company. Shares will
be purchased on behalf of participating executives on the open
market, resulting in no dilution to shareholders. The company has
also adopted new minimum share ownership requirements that are
among the highest of any Canadian public company and a Clawback
Policy for incentive compensation that goes beyond the yet-to-be
implemented requirements of the US Dodd-Frank Act.
OPERATING RESULTS DISCUSSION
Cortez
Cortez is one of the lowest cost, long-life gold assets in the
world and is located in the stable and prospective jurisdiction of
Nevada. The mine produced 0.23 million ounces at AISC of $648 per
ounce in the first quarter on lower grades and recoveries.
Production in 2014 is forecast at 0.925-0.975 million ounces. AISC
are expected to be $750-$780 per ounce, reflecting lower production
and higher sustaining capital related to waste stripping for the
next phase of the Cortez Hills open pit.
Goldstrike
Goldstrike produced 0.26 million ounces in the first quarter at
AISC of $755 per ounce, reflecting higher than anticipated open pit
and underground grades. The autoclave facility is undergoing
modifications that will enable Goldstrike to accelerate the cash
flow from about 4.0 million stockpiled ounces through the addition
of a thiosulfate process. The modified autoclaves are forecast to
contribute an average of 0.350-0.450 million ounces of annual
production at a similar AISC to the overall operation in the first
full five years following implementation of this process. First
production is on track for the fourth quarter of 2014. Production
at Goldstrike in 2014 is anticipated to be 0.865-0.915 million
ounces at AISC of $920-$950 per ounce. In 2015, production is
expected to exceed 1.0 million ounces3.
Pueblo Viejo
Barrick's 60 percent share of production from Pueblo Viejo in
the first quarter was 0.16 million ounces at AISC of $588 per
ounce. The mine is on track to reach full capacity in the first
half of 2014 following completion of debottlenecking modifications
to the lime circuit. Barrick's share of production in 2014 is
anticipated to be 0.600-0.700 million ounces at AISC of $510-$610
per ounce.
Lagunas Norte
Lagunas Norte produced 0.13 million ounces at AISC of $519 per
ounce in the first quarter, reflecting lower grades as anticipated
in the mine plan. Production for 2014 is forecast at 0.570-0.610
million ounces at AISC of $640-$680 per ounce.
Veladero
Veladero produced 0.16 million ounces in the first quarter. AISC
of $811 per ounce benefited from lower costs for fuel and
consumables and the devaluation of the Argentine peso. Production
in 2014 is anticipated to be 0.650-0.700 million ounces at AISC of
$940-$990 per ounce.
North America Portfolio
Barrick's other North American mines consist of Bald Mountain,
Round Mountain, Turquoise Ridge, Golden Sunlight, Ruby Hill and
Hemlo. This segment produced 0.22 million ounces in the first
quarter at AISC of $954 per ounce and is anticipated to produce
0.795-0.845 million ounces in 2014 at AISC of $1,075-$1,100 per
ounce.
Australia Pacific
Australia Pacific produced 0.31 million ounces at AISC of $847
per ounce in the first quarter. The Porgera mine contributed 0.11
million ounces at AISC of $955 per ounce. Production for Australia
Pacific in 2014 is forecast at 1.000-1.080 million ounces. AISC in
2014 are expected to be $1,050-$1,100 per ounce.
African Barrick Gold (ABG)
First quarter attributable production from ABG was 0.12 million
ounces at AISC of $1,131 per ounce. Barrick's share of 2014
production from ABG is now anticipated to be 0.430-0.460 million
ounces, reflecting its lower equity interest following the partial
divestment in the first quarter. AISC for 2014 continue to be
expected at $1,100-$1,175 per ounce.
Global Copper
Copper production in the first quarter was 104 million pounds at
C1 cash costs of $2.11 per pound. Lumwana contributed 51 million
pounds at C1 cash costs of $2.58 per pound, reflecting the effects
of an extended and unusually heavy rainy season. Subsequent to
quarter end, a partial collapse of the terminal end of the main
conveyor occurred. The company is assessing the cause of the
failure, the extent of damage and the time to repair the conveyor
in order to resume production. Current estimates are that copper
production is likely to resume by the end of the third quarter. In
the interim, mining will continue and stockpiled ore will be
processed once the plant re-starts. Barrick has comprehensive
property and business interruption insurance for Lumwana and
believes the incident will not have a material economic impact.
The Zaldívar mine produced 53 million pounds in the first
quarter at C1 cash costs of $1.63 per pound. Production is
anticipated to be lower in 2014 relative to 2013 on fewer tons
mined and processed in line with the mine plan, and due to lower
recoveries related to processing a higher percentage of secondary
sulfide material. C1 cash costs in 2014 are expected to increase
relative to 2013 due to the impact of relatively stable fixed costs
spread over lower overall copper production.
Copper production guidance for 2014 has been revised to 410-440
million pounds to reflect the processing disruption at Lumwana. C1
cash cost guidance remains unchanged at $1.90-$2.10 per pound.
1 Adjusted net earnings and adjusted net earnings per share,
adjusted operating cash flow, all-in sustaining costs per ounce,
and C1 cash costs per pound are non-GAAP financial performance
measures with no standardized definition under IFRS. See pages
36-41 of Barrick's First Quarter 2014 Report.
2 About 25 percent is expected to be capitalized. Actual
expenditures will be dependent on a number of factors, including
environmental and regulatory requirements.
3 Actual results will vary depending on how the ramp-up of the
thiosulfate project progresses.
| Key Statistics |
|
|
|
|
| Barrick Gold Corporation |
|
|
Three months ended |
| (in United States dollars) |
|
|
March 31, |
|
|
2014 |
|
2013 |
| Operating Results |
|
|
|
|
| Gold production (thousands of ounces)1 |
|
1,588 |
|
1,797 |
| Gold sold (thousands of ounces)1 |
|
1,618 |
|
1,747 |
| Per ounce data |
|
|
|
|
|
Average spot gold price |
$ |
1,293 |
$ |
1,632 |
|
Average realized gold price2 |
|
1,285 |
|
1,629 |
|
Adjusted operating costs2 |
|
582 |
|
564 |
|
All-in sustaining costs2 |
|
833 |
|
933 |
|
All-in costs2 |
|
933 |
|
1,362 |
|
Adjusted operating costs (on a co-product basis)2 |
|
605 |
|
593 |
|
All-in sustaining costs (on a co-product basis)2 |
|
856 |
|
962 |
|
All-in costs (on a co-product basis)2 |
|
956 |
|
1,391 |
| Copper production (millions of pounds) |
|
104 |
|
127 |
| Copper sold (millions of pounds) |
|
111 |
|
115 |
| Per pound data |
|
|
|
|
|
Average spot copper price |
$ |
3.19 |
$ |
3.60 |
|
Average realized copper price2 |
|
3.03 |
|
3.56 |
|
C1
cash costs2 |
|
2.11 |
|
2.48 |
|
Depreciation3 |
|
0.37 |
|
0.35 |
|
Other4 |
|
0.15 |
|
0.04 |
|
C3 fully allocated costs2 |
|
2.63 |
|
2.87 |
| Financial Results (millions) |
|
|
|
|
| Revenues |
$ |
2,632 |
$ |
3,399 |
| Net income5 |
|
88 |
|
847 |
| Adjusted net earnings2 |
|
238 |
|
923 |
| Operating cash flow |
|
585 |
|
1,085 |
| Adjusted operating cash flow2 |
|
585 |
|
1,158 |
| Per Share Data (dollars) |
|
|
|
|
|
Net earnings (basic) |
|
0.08 |
|
0.85 |
|
Adjusted net earnings (basic)2 |
|
0.20 |
|
0.92 |
|
Net earnings (diluted) |
|
0.08 |
|
0.85 |
| Weighted average basic common shares (millions)6 |
|
1,165 |
|
1,001 |
| Weighted average diluted common shares
(millions)6,7 |
|
1,165 |
|
1,001 |
|
As at |
|
As at |
|
March 31, |
December 31, |
|
|
2014 |
|
2013 |
| Financial Position (millions) |
|
|
|
|
| Cash and equivalents |
$ |
2,672 |
$ |
2,404 |
| Non-cash working capital |
|
3,313 |
|
3,060 |
| 1 |
Production includes African Barrick Gold ("ABG") on a 73.9% basis
until February 28, 2014 and a 63.9% basis thereafter and Pueblo
Viejo on a 60% basis, both of which reflect our equity share of
production. Also includes production from Yilgarn South up to
September 30, 2013, Plutonic up to January 31, 2014 and Kanowna up
to March 1, 2014, the effective dates of sale of these assets.
Sales include our equity share of gold sales from ABG and Pueblo
Viejo. |
| 2 |
Realized price, adjusted operating costs, all-in sustaining costs,
all-in costs, adjusted operating costs (on a co-product basis),
all-in sustaining costs (on a co-product basis), all-in costs (on a
co-product basis), C1 cash costs, C3 fully allocated costs,
adjusted net earnings and adjusted operating cash flow are non-gaap
financial performance measures with no standard definition under
IFRS. Refer to the Non-GAAP Financial Performance Measures section
of the Company's MD&A. |
| 3 |
Represents equity depreciation expense divided by equity pounds of
copper sold. |
| 4 |
For a
breakdown, see reconciliation of cost of sales to C1 cash costs and
C3 fully allocated costs per pound in the Non-GAAP Financial
Performance Measures section of the Company's MD&A. |
| 5 |
Net
earnings represents net earnings attributable to the equity holders
of the Company. |
| 6 |
Reflects 163.5 million shares issued on November 14, 2013. |
| 7 |
Fully
diluted includes dilutive effect of stock options. |
|
|
| Production and Cost Summary |
|
Gold Production (attributable ounces) (000's) |
|
All-in sustaining costs4 ($/oz) |
|
|
|
Three months ended |
|
|
|
|
Three months ended |
|
|
|
March 31, |
|
|
|
|
March 31, |
|
|
2014 |
2013 |
|
|
2014 |
|
|
2013 |
|
| Gold |
|
|
|
|
|
|
|
|
|
|
Goldstrike |
262 |
230 |
|
$ |
755 |
|
$ |
819 |
|
|
Cortez |
227 |
343 |
|
|
648 |
|
|
404 |
|
|
Pueblo Viejo |
159 |
96 |
|
|
588 |
|
|
860 |
|
|
Lagunas Norte |
134 |
145 |
|
|
519 |
|
|
551 |
|
|
Veladero |
158 |
205 |
|
|
811 |
|
|
684 |
|
|
North America Portfolio |
223 |
203 |
|
|
954 |
|
|
1,244 |
|
|
Australia Pacific1 |
305 |
447 |
|
|
847 |
|
|
1,076 |
|
|
African Barrick Gold2 |
118 |
108 |
|
|
1,131 |
|
|
1,577 |
|
|
Other3 |
2 |
20 |
|
|
1,792 |
|
|
1,482 |
|
| Total |
1,588 |
1,797 |
|
$ |
833 |
|
$ |
933 |
|
|
|
|
|
|
|
|
|
|
Copper Production (attributable pounds) (millions) |
|
|
C1 Cash Costs4 ($/lb) |
|
|
|
|
Three months ended |
|
|
|
|
Three months ended |
|
|
|
|
March 31, |
|
|
|
|
|
March 31, |
|
|
|
2014 |
2013 |
|
|
2014 |
|
|
2013 |
|
|
Total |
104 |
127 |
|
$ |
2.11 |
|
$ |
2.48 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Gold Production Costs ($/oz) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
|
Direct mining costs before impact of hedges at market
foreign exchange rates |
|
$ |
590 |
|
$ |
613 |
|
|
Gains realized on currency hedge and commodity
hedge/economic hedge contracts |
|
|
(20 |
) |
|
(50 |
) |
|
Other5 |
|
|
- |
|
|
(14 |
) |
|
By-product credits |
|
|
(23 |
) |
|
(29 |
) |
|
Royalties |
|
|
35 |
|
|
44 |
|
| Adjusted operating costs4 |
|
|
582 |
|
|
564 |
|
|
Depreciation |
|
|
195 |
|
|
196 |
|
|
Other5 |
|
|
- |
|
|
14 |
|
| Total production costs |
|
$ |
777 |
|
$ |
774 |
|
| Adjusted operating costs4 |
|
$ |
582 |
|
$ |
564 |
|
|
General & administrative costs |
|
|
54 |
|
|
47 |
|
|
Rehabilitation - accretion and amortization (operating
sites) |
|
|
21 |
|
|
24 |
|
|
Mine on-site exploration and evaluation costs |
|
|
1 |
|
|
5 |
|
|
Mine development expenditures |
|
|
117 |
|
|
156 |
|
|
Sustaining capital expenditures |
|
|
58 |
|
|
137 |
|
| All-in sustaining costs4 |
|
$ |
833 |
|
$ |
933 |
|
| All-in costs4 |
|
$ |
933 |
|
$ |
1,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Copper Production Costs ($/lb) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
|
|
|
|
2014 |
|
|
2013 |
|
| C1 cash costs4 |
|
$ |
2.11 |
|
$ |
2.48 |
|
| Depreciation |
|
|
0.37 |
|
|
0.35 |
|
| Other6 |
|
|
0.15 |
|
|
0.04 |
|
| C3 fully allocated costs4 |
|
$ |
2.63 |
|
$ |
2.87 |
|
| 1 |
Reflects production from Yilgarn South up to September 30, 2013,
Plutonic up to January 31, 2014 and Kanowna up to March 1, 2014,
the effective dates of sale of these assets. |
| 2 |
Figures relating to African Barrick Gold are presented on a 73.9%
basis until February 28, 2014 and a 63.9% basis thereafter, which
reflects our equity share of production. |
| 3 |
Production and all-in sustaining costs include Pierina. |
| 4 |
Adjusted operating costs, all-in sustaining costs, all-in costs, C1
cash costs and C3 fully allocated costs are non-GAAP financial
performance measures with no standard meaning under IFRS. Refer to
the Non-GAAP Financial Performance Measures section of the
Company's MD&A. |
| 5 |
Represents the Barrick Energy gross margin divided by equity ounces
of gold sold. Barrick Energy was divested in the third quarter of
2013. |
| 6 |
For a
breakdown, see reconciliation of cost of sales to C1 cash costs and
C3 fully allocated costs per pound in the Non-GAAP Financial
Performance Measures section of the Company's MD&A. |
|
|
| Consolidated Statements of Income |
|
|
| Barrick Gold Corporation |
Three months ended |
|
| (in millions of United States dollars, except per share
data) (Unaudited) |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2013 |
|
|
|
| Revenue (notes 5 and 6) |
$ |
2,632 |
|
$ |
3,399 |
|
| Costs and expenses (income) |
|
|
|
|
|
|
| Cost of sales (notes 5 and 7) |
|
1,692 |
|
|
1,810 |
|
| General and administrative expenses (note 11) |
|
103 |
|
|
98 |
|
| Exploration and evaluation (note 8) |
|
32 |
|
|
48 |
|
| Other expense (income) (note 10A) |
|
200 |
|
|
89 |
|
| Impairment charges (note 10B) |
|
12 |
|
|
5 |
|
| Gain on non-hedge derivatives (note 17D) |
|
(21 |
) |
|
(42 |
) |
| Income before finance items and income taxes |
|
614 |
|
|
1,391 |
|
| Finance items |
|
|
|
|
|
|
| Finance income |
|
3 |
|
|
3 |
|
| Finance costs (note 12) |
|
(201 |
) |
|
(108 |
) |
| Income from continuing operations before income
taxes |
|
416 |
|
|
1,286 |
|
| Income tax expense (note 13) |
|
(289 |
) |
|
(433 |
) |
| Income from continuing operations |
|
127 |
|
|
853 |
|
| Income from discontinued operations |
|
- |
|
|
8 |
|
| Net income |
$ |
127 |
|
$ |
861 |
|
| Attributable to: |
|
|
|
|
|
|
| Equity holders of Barrick Gold Corporation |
$ |
88 |
|
$ |
847 |
|
| Non-controlling interests (note 20) |
$ |
39 |
|
$ |
14 |
|
|
|
| Earnings per share data attributable to the equity
holders of Barrick Gold Corporation (note 9) |
|
|
|
|
|
|
| Income from continuing operations |
|
|
|
|
|
|
|
Basic |
$ |
0.08 |
|
$ |
0.84 |
|
|
Diluted |
$ |
0.08 |
|
$ |
0.84 |
|
| Income from discontinued operations |
|
|
|
|
|
|
|
Basic |
$ |
- |
|
$ |
0.01 |
|
|
Diluted |
$ |
- |
|
$ |
0.01 |
|
| Net income |
|
|
|
|
|
|
|
Basic |
$ |
0.08 |
|
$ |
0.85 |
|
|
Diluted |
$ |
0.08 |
|
$ |
0.85 |
|
| The notes to these unaudited interim financial statements,
which are contained in the First Quarter Report 2014 available on
our website are an integral part of these consolidated financial
statements. |
|
| Consolidated Statements of Comprehensive Income |
|
|
|
|
| Barrick Gold Corporation |
Three months ended |
|
| (in millions of United States dollars) (Unaudited) |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2013 |
|
| Net income |
$ |
127 |
|
$ |
861 |
|
| Other comprehensive income (loss), net of taxes |
|
|
|
|
|
|
| Items that may be reclassified subsequently to profit
or loss: |
|
|
|
|
|
|
| Unrealized gains (losses) on available-for-sale ("AFS")
financial securities, net of tax $nil and $2 |
|
17 |
|
|
(8 |
) |
| Realized (gains) losses and impairments on AFS
financial securities, net of tax $nil and $nil |
|
6 |
|
|
(2 |
) |
| Unrealized gains (losses) on derivatives designated as
cash flow hedges, net of tax $4 and $3 |
|
17 |
|
|
30 |
|
| Realized (gains) losses on derivatives designated as
cash flow hedges, net of tax ($2) and $18 |
|
(25 |
) |
|
(75 |
) |
| Currency translation adjustments, net of tax $nil and
$nil |
|
3 |
|
|
(21 |
) |
| Total other comprehensive income (loss) |
|
18 |
|
|
(76 |
) |
| Total comprehensive income (loss) |
$ |
145 |
|
$ |
785 |
|
| Attributable to: |
|
|
|
|
|
|
| Equity holders of Barrick Gold Corporation |
|
|
|
|
|
|
|
Continuing operations |
$ |
106 |
|
$ |
782 |
|
|
Discontinued operations |
$ |
- |
|
$ |
(11 |
) |
| Non-controlling interests |
$ |
39 |
|
$ |
14 |
|
| The notes to these unaudited interim financial statements,
which are contained in the First Quarter Report 2014 available on
our website are an integral part of these consolidated financial
statements. |
|
| Consolidated Statements of Cash Flow |
|
|
|
|
|
|
| Barrick Gold Corporation |
Three months ended |
|
| (in millions of United States dollars) (Unaudited) |
|
|
|
March 31, |
|
|
|
2014 |
|
|
2013 |
|
| OPERATING ACTIVITIES |
|
|
|
|
|
|
| Net income from continuing operations |
$ |
127 |
|
$ |
853 |
|
| Adjusted for the following items: |
|
|
|
|
|
|
|
Depreciation |
|
402 |
|
|
396 |
|
|
Finance costs |
|
201 |
|
|
108 |
|
|
Impairment charges (note 10B) |
|
12 |
|
|
5 |
|
|
Income tax expense (note 13) |
|
289 |
|
|
433 |
|
|
(Increase) decrease in inventory |
|
42 |
|
|
(164 |
) |
|
Gain on non-hedge derivatives |
|
(21 |
) |
|
(42 |
) |
|
Gain on sale of long-lived assets/investments |
|
(1 |
) |
|
(8 |
) |
|
Other operating activities (note 14A) |
|
(241 |
) |
|
(165 |
) |
| Operating cash flows before interest and income
taxes |
|
810 |
|
|
1,416 |
|
| Interest paid |
|
(76 |
) |
|
(47 |
) |
| Income taxes paid |
|
(149 |
) |
|
(320 |
) |
| Net cash provided by operating activities from
continuing operations |
|
585 |
|
|
1,049 |
|
| Net cash provided by operating activities from
discontinued operations |
|
- |
|
|
36 |
|
| Net cash provided by operating activities |
|
585 |
|
|
1,085 |
|
| INVESTING ACTIVITIES |
|
|
|
|
|
|
| Property, plant and equipment |
|
|
|
|
|
|
|
Capital expenditures (note 5) |
|
(616 |
) |
|
(1,379 |
) |
|
Sales proceeds |
|
35 |
|
|
2 |
|
| Divestitures |
|
80 |
|
|
- |
|
| Investments sales |
|
25 |
|
|
18 |
|
| Other investing activities (note 14B) |
|
(40 |
) |
|
(85 |
) |
| Net cash used in investing activities from continuing
operations |
|
(516 |
) |
|
(1,444 |
) |
| Net cash used in investing activities from discontinued
operations |
|
- |
|
|
(45 |
) |
| Net cash used in investing activities |
|
(516 |
) |
|
(1,489 |
) |
| FINANCING ACTIVITIES |
|
|
|
|
|
|
| Proceeds on exercise of stock options |
|
- |
|
|
1 |
|
| Proceeds from divestment of 10% of issued ordinary
share capital of ABG |
|
186 |
|
|
- |
|
| Debt |
|
|
|
|
|
|
|
Proceeds |
|
133 |
|
|
2,050 |
|
|
Repayments |
|
(75 |
) |
|
(1,205 |
) |
| Dividends |
|
(58 |
) |
|
(200 |
) |
| Funding from non-controlling interests |
|
2 |
|
|
13 |
|
| Other financing activities (note 14C) |
|
- |
|
|
(8 |
) |
| Net cash provided by financing activities from
continuing operations |
|
188 |
|
|
651 |
|
| Net cash used in financing activities from discontinued
operations |
|
- |
|
|
- |
|
| Net cash (used in) provided by financing
activities |
|
188 |
|
|
651 |
|
| Effect of exchange rate changes on cash and
equivalents |
|
(5 |
) |
|
(2 |
) |
| Net increase in cash and equivalents |
|
252 |
|
|
245 |
|
| Cash and equivalents excluding assets classified as
held for sale at the beginning of period |
|
2,404 |
|
|
2,097 |
|
| Add: cash and equivalents of assets classified as held
for sale at the beginning of period |
|
20 |
|
|
- |
|
| Cash and equivalents at the end of period |
$ |
2,676 |
|
$ |
2,342 |
|
| Less: cash and equivalents of assets classified as held
for sale at the end of period |
|
4 |
|
|
- |
|
| Cash and equivalents excluding assets classified as
held for sale at the end of period |
$ |
2,672 |
|
$ |
2,342 |
|
| The notes to these unaudited interim financial statements,
which are contained in the First Quarter Report 2014 available on
our website are an integral part of these consolidated financial
statements. |
|
| Consolidated Balance Sheets |
|
|
| Barrick Gold Corporation |
|
|
|
|
|
|
| (in millions of United States dollars) (Unaudited) |
|
As at March 31, |
|
|
As at December 31, |
|
|
|
2014 |
|
|
2013 |
|
| ASSETS |
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
Cash and equivalents (note 17A) |
$ |
2,672 |
|
$ |
2,404 |
|
|
Accounts receivable |
|
410 |
|
|
385 |
|
|
Inventories (note 15) |
|
2,657 |
|
|
2,679 |
|
|
Other current assets |
|
424 |
|
|
421 |
|
| Total current assets (excluding assets classified as
held for sale) |
|
6,163 |
|
|
5,889 |
|
|
Assets classified as held for sale |
|
87 |
|
|
323 |
|
| Total current assets |
|
6,250 |
|
|
6,212 |
|
|
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
|
|
Equity in investees |
|
28 |
|
|
27 |
|
|
Other investments |
|
114 |
|
|
120 |
|
|
Property, plant and equipment (note 16) |
|
21,910 |
|
|
21,688 |
|
|
Goodwill |
|
5,835 |
|
|
5,835 |
|
|
Intangible assets |
|
312 |
|
|
320 |
|
|
Deferred income tax assets |
|
627 |
|
|
501 |
|
|
Non-current portion of inventory (note 15) |
|
1,727 |
|
|
1,679 |
|
|
Other assets |
|
1,007 |
|
|
1,066 |
|
| Total assets |
$ |
37,810 |
|
$ |
37,448 |
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
1,871 |
|
$ |
2,165 |
|
|
Debt (note 17B) |
|
180 |
|
|
179 |
|
|
Current income tax liabilities |
|
100 |
|
|
75 |
|
|
Other current liabilities |
|
322 |
|
|
303 |
|
| Total current liabilities (excluding liabilities
classified as held for sale) |
|
2,473 |
|
|
2,722 |
|
|
Liabilities classified as held for sale |
|
19 |
|
|
162 |
|
| Total current liabilities |
|
2,492 |
|
|
2,884 |
|
|
|
|
|
|
|
|
| Non-current liabilities |
|
|
|
|
|
|
|
Debt (note 17B) |
|
12,991 |
|
|
12,901 |
|
|
Provisions |
|
2,500 |
|
|
2,428 |
|
|
Deferred income tax liabilities |
|
2,478 |
|
|
2,258 |
|
|
Other liabilities |
|
1,073 |
|
|
976 |
|
| Total liabilities |
|
21,534 |
|
|
21,447 |
|
| Equity |
|
|
|
|
|
|
|
Capital stock (note 19) |
|
20,869 |
|
|
20,869 |
|
|
Deficit |
|
(7,551 |
) |
|
(7,581 |
) |
|
Accumulated other comprehensive loss |
|
(51 |
) |
|
(69 |
) |
|
Other |
|
321 |
|
|
314 |
|
| Total equity attributable to Barrick Gold Corporation
shareholders |
|
13,588 |
|
|
13,533 |
|
|
Non-controlling interests (note 20) |
|
2,688 |
|
|
2,468 |
|
| Total equity |
|
16,276 |
|
|
16,001 |
|
| Contingencies and commitments (notes 15, 16 and
21) |
|
|
|
|
|
|
| Total liabilities and equity |
$ |
37,810 |
|
$ |
37,448 |
|
| The notes to these unaudited interim financial statements,
which are contained in the First Quarter Report 2014 available on
our website are an integral part of these consolidated financial
statements. |
|
| Consolidated Statements of Changes in Equity |
|
|
|
|
|
|
|
|
|
| Barrick Gold Corporation |
|
Attributable to equity holders of the company |
|
|
|
|
|
|
|
|
| (in millions of United States dollars) (Unaudited) |
Common Shares (in thousands) |
|
Capital stock |
|
Retained earnings (deficit) |
|
|
Accumulated other comprehensive income (loss)1 |
|
|
Other2 |
|
Total equity attributable to shareholders |
|
|
Non-controlling interests |
|
Total equity |
|
| At January 1, 2014 |
1,164,652 |
$ |
20,869 |
$ |
(7,581 |
) |
$ |
(69 |
) |
$ |
314 |
$ |
13,533 |
|
$ |
2,468 |
$ |
16,001 |
|
|
Net income |
- |
|
- |
|
88 |
|
|
- |
|
|
- |
|
88 |
|
|
39 |
|
127 |
|
|
Total other comprehensive income |
- |
|
- |
|
- |
|
|
18 |
|
|
- |
|
18 |
|
|
- |
|
18 |
|
|
Total comprehensive income |
- |
|
- |
|
88 |
|
|
18 |
|
|
- |
|
106 |
|
|
39 |
|
145 |
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
- |
|
- |
|
(58 |
) |
|
- |
|
|
- |
|
(58 |
) |
|
- |
|
(58 |
) |
|
|
Issued on exercise of stock options |
18 |
|
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
|
Recognized on divestment of 10% of African Barrick Gold |
- |
|
- |
|
- |
|
|
- |
|
|
7 |
|
7 |
|
|
179 |
|
186 |
|
|
|
Funding from non-controlling interests |
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
2 |
|
2 |
|
|
Total transactions with owners |
18 |
|
- |
|
(58 |
) |
|
- |
|
|
7 |
|
(51 |
) |
|
181 |
|
130 |
|
| At March 31, 2014 |
1,164,670 |
$ |
20,869 |
$ |
(7,551 |
) |
$ |
(51 |
) |
$ |
321 |
$ |
13,588 |
|
$ |
2,688 |
$ |
16,276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| At January 1, 2013 |
1,001,108 |
$ |
17,926 |
$ |
3,269 |
|
$ |
463 |
|
$ |
314 |
$ |
21,972 |
|
$ |
2,664 |
$ |
24,636 |
|
|
Net income |
- |
|
- |
|
847 |
|
|
- |
|
|
- |
|
847 |
|
|
14 |
|
861 |
|
|
Total other comprehensive loss |
- |
|
- |
|
- |
|
|
(76 |
) |
|
- |
|
(76 |
) |
|
- |
|
(76 |
) |
|
Total comprehensive income (loss) |
- |
|
- |
|
847 |
|
|
(76 |
) |
|
- |
|
771 |
|
|
14 |
|
785 |
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
- |
|
- |
|
(200 |
) |
|
- |
|
|
- |
|
(200 |
) |
|
- |
|
(200 |
) |
|
|
Issued on exercise of stock options |
44 |
|
1 |
|
- |
|
|
- |
|
|
- |
|
1 |
|
|
- |
|
1 |
|
|
|
Recognition of stock option expense |
- |
|
2 |
|
- |
|
|
- |
|
|
- |
|
2 |
|
|
- |
|
2 |
|
|
|
Funding from non-controlling interests |
- |
|
- |
|
- |
|
|
- |
|
|
- |
|
- |
|
|
13 |
|
13 |
|
|
Total transactions with owners |
44 |
|
3 |
|
(200 |
) |
|
- |
|
|
- |
|
(197 |
) |
|
13 |
|
(184 |
) |
| At March 31, 2013 |
1,001,152 |
$ |
17,929 |
$ |
3,916 |
|
$ |
387 |
|
$ |
314 |
$ |
22,546 |
|
$ |
2,691 |
$ |
25,237 |
|
| 1 |
Includes cumulative translation losses at March 31, 2014: $79
million (March 31, 2013: losses of $8 million). |
| 2 |
Includes additional paid-in capital as at March 31, 2014: $283
million (December 31, 2013: $276 million; March 31, 2013: $276
million) and convertible borrowings - equity component as at March
31, 2014: $38 million (December 31, 2013: $38 million; March 31,
2013: $38 million). |
| The notes to these unaudited interim financial
statements, which are contained in the First Quarter Report 2014
available on our website are an integral part of these consolidated
financial statements. |
|
| CORPORATE OFFICE |
|
TRANSFER AGENTS AND REGISTRARS |
| Barrick Gold Corporation |
|
CST
Trust Company |
| Brookfield Place, TD Canada Trust Tower |
|
P.O.
Box 700, Postal Station B |
| Suite 3700 |
|
Montreal, Quebec, Canada H3B 3K3 |
| 161 Bay Street, P.O. Box 212 |
|
or |
| Toronto, Canada M5J 2S1 |
|
American Stock Transfer & Trust Company, LLC |
| Tel: (416) 861-9911 Fax:
(416) 861-0727 |
|
6201
- 15 Avenue |
| Toll-free throughout North America: 1-800-720-7415 |
|
Brooklyn, NY 11219 |
| Email: investor@barrick.com |
|
Tel:
1-800-387-0825 |
| Website: www.barrick.com |
|
Toll-free throughout North America |
|
|
Fax:
1-888-249-6189 |
| SHARES LISTED |
|
Email: inquiries@canstockta.com |
| ABX - The New York Stock Exchange |
|
Website: www.canstockta.com |
|
The
Toronto Stock Exchange |
|
|
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained or incorporated by reference in
this First Quarter Report 2014, including any information as to our
strategy, projects, plans or future financial or operating
performance, constitutes "forward-looking statements". All
statements, other than statements of historical fact, are
forward-looking statements. The words "believe", "expect",
"anticipate", "contemplate", "target", "plan", "intend",
"continue", "budget", "estimate", "may", "will", "schedule" 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 the
company, are inherently subject to significant business, economic
and competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements. Such factors include,
but are not limited to: fluctuations in the spot and forward price
of gold, copper or certain other commodities (such as silver,
diesel fuel and electricity); changes in national and local
government legislation, taxation, controls or regulations and/or
changes in the administration of laws, policies and practices,
expropriation or nationalization of property and political or
economic developments in Canada, the United States and other
jurisdictions in which the Company does or may carry on business in
the future; failure to comply with environmental and health and
safety laws and regulations; timing of receipt of, or failure to
comply with, necessary permits and approvals; diminishing
quantities or grades of reserves; increased costs, delays,
suspensions and technical challenges associated with the
construction of capital projects; the impact of global liquidity
and credit availability on the timing of cash flows and the values
of assets and liabilities based on projected future cash flows;
adverse changes in our credit rating; the impact of inflation;
operating or technical difficulties in connection with mining or
development activities; the speculative nature of mineral
exploration and development; risk of loss due to acts of war,
terrorism, sabotage and civil disturbances; fluctuations in the
currency markets; changes in U.S. dollar interest rates; risks
arising from holding derivative instruments; litigation; contests
over title to properties, particularly title to undeveloped
properties, or over access to water, power and other required
infrastructure; business opportunities that may be presented to, or
pursued by, the company; our ability to successfully integrate
acquisitions or complete divestitures; employee relations;
availability and increased costs associated with mining inputs and
labor; and the organization of our previously held African gold
operations and properties under a separate listed company. In
addition, there are risks and hazards associated with the business
of mineral exploration, development and mining, including
environmental hazards, industrial accidents, unusual or unexpected
formations, pressures, cave-ins, flooding and gold bullion, copper
cathode or gold or copper concentrate losses (and the risk of
inadequate insurance, or inability to obtain insurance, to cover
these risks). Many of these uncertainties and contingencies can
affect our actual results and could cause actual results to differ
materially from those expressed or implied in any forward-looking
statements made by, or on behalf of, us. Readers are cautioned that
forward-looking statements are not guarantees of future
performance. All of the forward-looking statements made in this
First Quarter Report 2014 are qualified by these cautionary
statements. Specific reference is made to the most recent Form
40-F/Annual Information Form on file with the SEC and Canadian
provincial securities regulatory authorities for a discussion of
some of the factors underlying forward-looking statements.
The company 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.
INVESTOR CONTACT: Amy SchwalmVice President, Investor
Relations(416) 307-7422aschwalm@barrick.comMEDIA CONTACT: Andy
LloydVice President, Communications(416)
307-7414alloyd@barrick.com
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