All amounts expressed in U.S. dollars unless otherwise
indicated
Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) ("Barrick" or the
"Company") today reported second quarter results for the period
ending June 30, 2018. Gold production and costs for the
quarter were in line with expectations, with earnings and cash flow
impacted by planned maintenance activities at Barrick Nevada and
Pueblo Viejo. The Company remains on track to meet full-year gold
production guidance, with higher production and lower costs
expected in the second half of 2018.
Our Nevada growth projects at Cortez, Goldrush,
and Turquoise Ridge continued to advance according to schedule and
within budget, underpinning the next generation of profitable
production from this core region for Barrick. In addition, our
pipeline continues to grow with the announcement today of a new,
high grade gold discovery at Fourmile, located just two kilometers
north of the Goldrush project in Nevada. This discovery
demonstrates the significant untapped geological potential of
Barrick's properties in Nevada, where the Company is evaluating a
project to increase processing capacity in order to accommodate new
production from organic projects, and bring forward production from
stockpiles. Prefeasibility level studies in support of a plant
expansion at the Pueblo Viejo mine in the Dominican Republic are
also advancing, with a pilot heap leach pad now in operation at the
site.
Partnerships form a core element of our strategy
to drive long-term value. On July 9, Barrick and Shandong Gold
Group signed an enhanced strategic cooperation agreement,
reflecting Barrick's unique focus on creating distinctive,
enduring, and trust-based relationships with China and China's best
companies, as we jointly explore opportunities to enhance long-term
value for our respective owners, and for our government and
community partners. Under the agreement, Shandong is currently
completing an independent evaluation focused on the potential to
develop a mining project at Lama in Argentina, including a
high-level evaluation of potential synergies between Lama and the
nearby Veladero operation.
OUTLOOK
Our 2018 consolidated gold production guidance
remains unchanged at 4.5-5.0 million ounces, at a cost of sales3 of
$810-$850 per ounce, cash costs4 of $540-$575 per ounce, and all-in
sustaining costs4 of $765-$815 per ounce.
We expect gold production and costs to improve
steadily over the second half of the year, driven by stronger
performance at Barrick Nevada and Pueblo Viejo. Gold production in
the third quarter is anticipated to be around 1.2 million
ounces.
At Barrick Nevada, throughput and grade is
expected to improve due to the completion of scheduled maintenance
shutdowns in the first half of the year, as well as increased
production from the Cortez Hills open pit. At Pueblo Viejo, we
expect an increase in quarter-over-quarter production as we
transition to higher grades in Phase Five and Six of the Moore Pit.
Third quarter throughput is expected to remain in line with the
second quarter as we complete the second of two scheduled autoclave
maintenance shutdowns for the year. We anticipate higher grades at
Pueblo Viejo to persist into the fourth quarter, with higher
throughput. Full processing capacity has also been restored at the
Porgera Joint Venture earlier than initially expected, following
the earthquake that struck Papua New Guinea in late February.
We expect to produce 345-410 million pounds of
copper in 2018 at a cost of sales3 of $2.00-$2.30 per pound, C1
cash costs5 of $1.80-$2.00 per pound, and all-in sustaining costs5
of $2.55-$2.85 per pound. Copper production is anticipated to
improve progressively over the third and fourth quarters, driven by
a steady improvement in grade and crusher reliability at Lumwana,
as well as an optimization of stacking procedures at Zaldívar.
Total attributable capital expenditure guidance6
for 2018 remains unchanged at $1.40-$1.60 billion, including mine
site sustaining capital7 of $0.95-$1.10 billion, and project
capital expenditures8 of $450-$550 million.
We are adjusting our 2018 effective income tax
rate guidance to 44-46 percent, compared to our initial guidance of
41-43 percent, reflecting lower spot gold prices and sales mix.
FINANCIAL HIGHLIGHTS
The Company reported a net loss of $94 million
($0.08 per share) in the second quarter and adjusted net earnings1
of $81 million ($0.07 per share). Operating cash flow was $141
million. Lower adjusted net earnings and operating cash flow
compared to the prior-year period primarily reflect the impact of
lower gold sales. In addition, while total direct mining costs were
in line with the prior-year period, direct mining costs on a per
ounce basis increased, primarily due to the impact of fewer ounces
sold, as well as expenses associated with planned maintenance at
the Barrick Nevada roaster and the Pueblo Viejo autoclaves, and
higher fuel costs. This was partially offset by higher realized
gold prices9, lower income tax expense, and lower depreciation as a
result of lower sales volumes. While income tax expenses were lower
than the prior-year period, our second quarter effective tax rate
increased from 46 percent in 2017 to 48 percent in 2018, bringing
our 2018 year-to-date effective tax rate to 44 percent.
Significant adjusting items impacting net
earnings in the second quarter of 2018 included (pre-tax and
non-controlling interest effects):
- $75 million in foreign currency translation losses primarily
related to the significant weakening of the Argentinean peso;
- $59 million in net impairment charges primarily related to the
Kabanga project (a joint venture between Barrick and Glencore) and
Acacia's Nyanzaga project; and
- $43 million in other expense adjustments, including $28 million
relating to staffing reductions and office closures associated with
the implementation of our decentralized operating model.
During the second quarter of 2018, we
implemented a number of organizational reductions to advance the
implementation of our decentralized operating model. We completed
an extensive review of all positions sitting above operations,
reallocating roles where appropriate, eliminating those no longer
required and closing a number of smaller offices. We are
maintaining our full-year general and administrative expense
guidance, as the expected savings from these changes are offset by
approximately $30 million of severance expense.
Refer to page 48 for a full list of reconciling
items between net earnings and adjusted net earnings for the
current and prior-year periods.
The Company recorded negative free cash flow2 of
$172 million in the second quarter, driven by lower operating cash
flows as described above. This was partially offset by lower
capital expenditures compared to the prior-year period.
BALANCE SHEET UPDATE
At the end of the second quarter, the Company
had a consolidated cash balance of approximately $2.1 billion10.
Subsequent to the end of the quarter, Barrick completed a
make-whole repurchase of the outstanding principal of approximately
$629 million on the Company's 4.40 percent notes due in 2021. As
result, our total debt has been reduced from approximately $6.4
billion to $5.8 billion, further strengthening the Company's
balance sheet. Over the past five years, Barrick has reduced its
total debt by $10 billion.
Following this repayment, the Company has less
than $100 million in debt due before 202011, and more than 85
percent of our outstanding debt matures after 2032.
OPERATING HIGHLIGHTS
Barrick produced 1.07 million ounces of gold in
the second quarter of 2018 at a cost of sales3 of $882 per ounce,
all-in sustaining costs4 of $856 per ounce, and cash costs4 of $605
per ounce, in line with expectations. Gold production in the second
quarter was impacted by lower grade and recovery at the Barrick
Nevada oxide mill, and scheduled maintenance shutdowns at the
Barrick Nevada roaster and the Pueblo Viejo autoclaves. Both
shutdowns were successfully optimized, reflecting the Company's
focus on increasing the overall availability of our processing
facilities by consolidating work and extending the time between
planned maintenance activities.
Second quarter production at the Porgera Joint
Venture was impacted by a significant earthquake that occurred in
late February, resulting in a change to the mine's full-year
guidance. However, full processing capacity has been restored at
the mine, earlier than initially anticipated. A rock fall at the
Kalgoorlie open pit in mid-May also impacted production in the
second quarter, with lower mining rates expected for the remainder
of the year.
During the second quarter, the Turquoise Ridge
mine implemented a more efficient system for the shipping of ore
for processing. Previously, ore was stockpiled on site before being
shipped to Newmont's Twin Creeks facility for processing. Ore will
now be shipped directly to Twin Creeks, eliminating double handling
of the material. This change will eliminate one month of stockpiled
material in 2018, resulting in a one-time change in inventory that
will increase costs this year.
On a per ounce basis, cost of sales applicable
to gold3 was higher than the prior-year period primarily due to the
impact of fewer ounces sold. Direct mining costs on a per ounce
basis also increased, primarily due to the impact of fewer ounces
sold, costs associated with planned maintenance at the Barrick
Nevada roaster and the Pueblo Viejo autoclaves, and higher fuel
costs. Higher all-in sustaining costs4 compared to the prior-year
period primarily reflect the impact of higher direct mining costs
on a per ounce basis, as described above.
The Company produced 83 million pounds of copper
in the second quarter, at a cost of
sales3 of $2.45 per pound, all-in sustaining
costs5 of $3.04 per pound, and C1 cash costs5 of $2.10
per pound. Lower copper production in the second quarter was
primarily the result of unplanned downtime at the Lumwana crusher,
and fewer heap leach tonnes processed at Zaldívar, partially offset
by an increase in production at Jabal Sayid.
On a per pound basis, cost of sales applicable
to copper3 increased primarily due to higher processing and
maintenance costs at Lumwana, and higher unit production costs as a
result of lower sales at Zaldívar. Higher all-in sustaining costs
primarily reflected higher direct mining costs applicable to
copper.
Please see page 35 of Barrick's second quarter
MD&A for individual operating segment performance details.
Detailed mine site guidance information can be found in Appendix 1
of this press release.
|
Gold |
Second
Quarter 2018 |
2018 Guidance |
| Production12
(000s of ounces) |
1,067 |
4,500 -
5,000 |
| Cost of sales
applicable to gold3 ($ per ounce) |
882 |
810 -
850 |
| Cash costs4 ($
per ounce) |
605 |
540 -
575 |
| All-in
sustaining costs4 ($ per ounce) |
856 |
765 -
815 |
|
Copper |
|
|
| Production12
(millions of pounds) |
83 |
345 -
410 |
| Cost of sales
applicable to copper3 ($ per pound) |
2.45 |
2.00 -
2.30 |
| C1 cash costs5
($ per pound) |
2.10 |
1.80 -
2.00 |
|
All-in sustaining costs5 ($ per pound) |
3.04 |
2.55 - 2.85 |
|
Total Attributable Capital Expenditures6
($ millions) |
332 |
1,400 - 1,600 |
EXPLORATION AND GROWTH
NEVADA, U.S.A.
Fourmile - More high grade drill results
confirm new discoveryBased on further positive drill
results, Barrick has upgraded the Fourmile exploration project from
a target to a discovery. Located approximately two kilometers north
of Goldrush in Nevada, drilling continues to intersect high grade
results, confirming the continuity of mineralization in the project
area, and increasing our confidence that Fourmile and Goldrush form
part of a seven-kilometer-long mineralized system. Recent drilling
has encountered high grade mineralization across a number of
stratigraphic horizons in multiple holes covering an area 600
meters in length by 200 meters in width.
Assay result highlights from the second quarter
include 13.9 meters grading 56.8 grams per tonne of gold, 16.6
meters grading 71.6 grams per tonne of gold, and 16.8 meters
grading 57.9 grams per tonne of gold. Please see endnote 13 for a
significant intercepts table including recent Fourmile
drilling.
Based on the success of our 2018 drilling
campaign to date, we are allocating an additional $10 million to
Fourmile exploration this year, increasing the total number of
planned holes from 30 to 47. Further infill and wide spaced step
out drilling will continue for the remainder of 2018.
Turquoise Ridge (75 percent Barrick)14 -
Shaft sinking contractor mobilizing on site, high grade exploration
results extend depositBarrick is constructing a third
shaft at Turquoise Ridge, which will allow the mine to roughly
double annual production to more than 500,000 ounces per year (100
percent basis), at an average cost of sales3 of around $720 per
ounce, and average all-in sustaining costs4 of roughly $630
per ounce. Thyssen Mining, the shaft sinking contractor, is now
mobilizing on site. Dewatering is advancing according to plan, and
construction of surface infrastructure for electrical distribution
and other mine utilities is well advanced. The capital cost for
this project is estimated to be $300-$325 million (100 percent
basis). Initial production from the new shaft is expected to begin
in 2022, with sustained production from 2023.
At the end of 2017, Turquoise Ridge had 5.9
million ounces of proven and probable gold reserves15 (Barrick's 75
percent share), at an average grade of 15.5 grams per tonne—the
highest reserve grade in the Company's operating portfolio, and
among the highest in the gold industry. The mine added 2.1 million
ounces of proven and probable gold reserves in 2017 through
drilling (Barrick's 75 percent share), and the deposit remains open
in multiple directions, including at depth.
Mine exploration drilling at Turquoise Ridge in
2018 has continued to expand the deposit in multiple directions.
The North Zone Getchell program is targeting an open area of the
Getchell Fault up-dip in the northwest portion of the mine. The
first hole of the program intersected 16.5 meters at 15.3 grams per
tonne of gold. This intercept extends mineralization along the
fault by 120 meters, with further drilling planned along the same
structure.
In 2017, exploration drilling discovered
mineralization 180 meters northeast of the deposit as part of the
Foot Wall Pond Extension program. So far this year, drilling has
extended known mineralization to the northeast by another 120
meters, with an intercept of 6.7 meters grading 13.9 grams per
tonne gold. Follow-up drilling will also continue in this area.
Goldrush - Decline development
commencedWhen in full operation, the Goldrush underground
project is expected to produce approximately 500,000 ounces of gold
per year, at a cost of sales3 of roughly $750 per ounce, and all-in
sustaining costs4 of approximately $640 per ounce. Portal pad
construction for the twin declines was completed in the first
quarter of 2018, and initial decline development commenced in the
second quarter. Decline construction is expected to accelerate
following the mobilization of the decline development contractor
during the third quarter. Exploration twin declines will provide
access to the orebody at depth, which will enable further drilling,
as well as the conversion of existing resources to reserves. These
declines can be converted into production declines in the future.
Goldrush currently has proven and probable gold reserves of 1.5
million ounces15, and measured and indicated gold resources of
9.4 million ounces15, with significant potential to identify
additional resources once underground access to drill the deposit
is established.
Cortez Deep South16 - East decline
complete, west decline advancingThe Deep South project is
expected to contribute approximately 300,000 ounces of annual gold
production when fully ramped up between 2024 and 2028, at a cost of
sales3 of $650 per ounce, and all-in sustaining costs4 of $580 per
ounce. Deep South will utilize infrastructure which has already
been approved under current plans to expand mining in the Lower
Zone of the Cortez underground mine, including the new Rangefront
twin declines and other underground infrastructure already under
construction. During the second quarter, west decline development
and mass excavations in support of the project continued to
advance. Initial production from Deep South is expected in
2022.
DOMINICAN REPUBLIC
Pueblo Viejo (60 percent Barrick) -
Pre-oxidation heap leach and pilot flotation plant civil works
underwayBarrick is advancing prefeasibility level studies
for a plant expansion at the Pueblo Viejo mine that would increase
throughput by 50 percent to 12 million tonnes per year, allowing
the mine to maintain average annual gold production of 800,000
ounces after 2022 (100 percent basis). The project involves the
addition of a pre-oxidation heap leach pad with a capacity of eight
million tonnes per year, a new mill and flotation concentrator with
a capacity of four million tonnes per year, and additional tailings
capacity. The project has the potential to convert roughly seven
million ounces of measured and indicated resources to proven
and probable reserves (100 percent basis).15
In support of the prefeasibility study, we have
completed the construction of a pilot pre-oxidation heap leach pad
to test metallurgy and recoveries, and are now irrigating ore.
Civil works for the pilot flotation circuit have also commenced,
and a tender process for structural, mechanical, and electrical
contracts is now underway.
ENHANCED STRATEGIC COOPERATION AGREEMENT
WITH SHANDONG GOLD
Earlier this month, Barrick announced that it
had entered into an enhanced strategic cooperation agreement with
Shandong Gold Group Co., Ltd., deepening Barrick's partnership with
one of China's leading mining companies. Key elements of the
enhanced strategic cooperation agreement include:
- Lama EvaluationShandong Gold will carry out an
independent evaluation of the potential to develop a mining project
at Lama in Argentina, including a high-level evaluation of
potential synergies between Lama and the nearby Veladero operation.
Following the completion of this study, Barrick and Shandong may
agree to conduct additional studies and technical work to evaluate
a number of development options. Any decision by Shandong to invest
in the project would be subject to additional agreement between the
Parties.
- Strengthening Collaboration Between Barrick and
Shandong TeamsReflecting a mutual commitment to
operational excellence, safety, efficiency, and best-in-class
mining practices, Barrick and Shandong have agreed to choose one of
Shandong's mines to serve as a platform for learning and
collaboration between the two companies. Barrick and Shandong have
also agreed to establish additional mechanisms to foster greater
communication and knowledge-sharing between respective management
and technical teams.
- Strengthening Cooperation on Investment
OpportunitiesBuilding on a prior agreement to evaluate
joint investment in organic mining projects currently owned by
Barrick and Shandong, the two companies have agreed to consider
opportunities to work together on acquisition opportunities or
potential asset sales, if both agree it is in their collective best
interests, and would enhance the value of such an opportunity.
HEMLO ROYALTY ACQUISITION
Barrick has acquired a 2.5 percent gross revenue
royalty for $14.9 million on certain surface and mineral lands
adjacent to the Hemlo property in Ontario that was originally
granted to Newmont Mining Corporation as part of the land
acquisition in 2015. The royalty covers approximately 37 percent of
Barrick's overall land holding at Hemlo and includes large, highly
prospective areas immediately west of the current operation.
Drilling up to 800 meters beyond the limits of the existing
resource has partly validated that ore grade mineralization is
continuous. The area covered by the royalty could represent
potentially significant mine life extensions.
TECHNICAL INFORMATION
The scientific and technical information
contained in this press release has been reviewed and approved by:
Geoffrey Locke, P. Eng., Manager, Metallurgy of Barrick; Rick
Sims, Registered Member SME, Vice President, Reserves and Resources
of Barrick; and Robert Krcmarov, FAusIMM, Executive Vice President,
Exploration and Growth of Barrick—each a "Qualified Person" as
defined in National Instrument 43-101 – Standards of Disclosure for
Mineral Projects.
Appendix 12018 Operating and Capital
Expenditure Guidance
|
GOLD PRODUCTION AND COSTS |
|
|
Production(000s ounces) |
Cost of sales3($ per ounce) |
All-insustaining costs4($ per ounce) |
Cash costs4($ per ounce) |
| Barrick Nevada |
2,100
- 2,255 |
760 -
810 |
610 -
660 |
470 -
530 |
| Turquoise Ridge
(75%) |
240 -
270 |
720 -
770 |
700 -
780 |
630 -
670 |
| Pueblo Viejo (60%) |
585 -
615 |
720 - 750 |
590 -
620 |
425 -
450 |
| Veladero (50%) |
275 -
330 |
970 -
1,110 |
960 -
1,100 |
560 -
620 |
| Lagunas Norte |
230 -
270 |
740 -
870 |
670 -
780 |
420 -
490 |
| Porgera (47.5%) |
190 -
215 |
950 -
1,000 |
950 -
1,000 |
740 -
790 |
| Kalgoorlie (50%) |
280 -
330 |
775 -
825 |
750 -
800 |
715 -
765 |
| Acacia (63.9%) |
275 -
305 |
970 -
1,020 |
935 -
985 |
690 -
720 |
| Hemlo |
200 -
220 |
1,010
- 1,070 |
1,135
- 1,235 |
840 -
890 |
| Golden
Sunlight |
35 - 50 |
1,270 - 1,370 |
1,540 - 1,710 |
1,310 - 1,420 |
|
Total Gold |
4,500 - 5,00017 |
810 - 850 |
765 - 815 |
540 - 575 |
| |
| |
|
COPPER PRODUCTION AND COSTS |
|
|
Production(millions of pounds) |
Cost of sales4($ per pound) |
All-insustaining costs5($ per pound) |
C1 cash costs5($ per pound) |
| Zaldívar (50%) |
115 -
130 |
2.30 -
2.50 |
2.15 -
2.35 |
~1.80 |
| Lumwana |
190 -
225 |
1.90 -
2.15 |
2.80 -
3.10 |
1.95 -
2.20 |
| Jabal
Sayid (50%) |
40 - 55 |
1.85 - 2.50 |
1.70 - 2.30 |
1.40 - 1.80 |
|
Total Copper |
345 - 41017 |
2.00 - 2.30 |
2.55 - 2.85 |
1.80 - 2.00 |
| |
| |
|
CAPITAL EXPENDITURES |
|
|
| |
($ millions) |
|
| Mine site
sustaining |
950 - 1,100 |
|
| Project |
450 - 550 |
|
| Total Attributable
Capital Expenditures6 |
1,400 - 1,600 |
|
Appendix 22018 Outlook Assumptions and
Economic Sensitivity Analysis
|
|
2018 GuidanceAssumption |
HypotheticalChange |
Impact onRevenue(millions) |
Impact onCost of sales3(millions) |
Impact onAll-in sustainingcosts4,5 |
|
| Gold revenue, net of
royalties |
$1,300/oz |
+/-
$100/oz |
+/- $261 |
+/- $7 |
+/- $3/oz |
|
| Copper revenue, net of
royalties18 |
$2.75/lb |
+
$0.50/lb |
+
$105 |
+
$8 |
+ $0.04/lb |
|
| Copper
revenue, net of royalties18 |
$2.75/lb |
- $0.50/lb |
- $105 |
- $8 |
- $0.04/lb |
|
| Gold all-in sustaining
costs4 |
|
|
|
|
|
|
| Oil price19 |
WTI:
$65/bbl |
+/- $10/bbl |
n/a |
+/- $16 |
+/- $6/oz |
|
| Brent:
$70/bbl |
|
|
Australian dollar exchange rate |
0.75 : 1 |
+/-
10% |
n/a |
+/- $15 |
+/- $6/oz |
|
| Argentine
peso exchange rate |
21 :
1 |
+/-
10% |
n/a |
+/- $11 |
+/- $4/oz |
|
|
Canadian dollar exchange rate |
1.25 : 1 |
+/- 10% |
n/a |
+/- $19 |
+/- $7/oz |
|
| Copper all-in
sustaining costs5 |
|
|
|
|
|
|
| Oil price19 |
WTI:
$65/bbl |
+/- $10/bbl |
n/a |
+/- $3 |
+/- $0.08/lb |
|
| Brent:
$70/bbl |
|
|
Chilean peso exchange rate |
600 : 1 |
+/- 10% |
n/a |
+/- $6 |
+/- $0.03/lb |
|
Endnotes
Endnote 1“Adjusted net
earnings” and “adjusted net earnings per share” are non-GAAP
financial performance measures. Adjusted net earnings excludes the
following from net earnings: certain impairment charges (reversals)
related to intangibles, goodwill, property, plant and equipment,
and investments; gains (losses) and other one-time costs relating
to acquisitions or dispositions; foreign currency translation gains
(losses); significant tax adjustments not related to current period
earnings; unrealized gains (losses) on non-hedge derivative
instruments; and the tax effect and non-controlling interest of
these items. The Company uses this measure internally to evaluate
our underlying operating performance for the reporting periods
presented and to assist with the planning and forecasting of future
operating results. Barrick believes that adjusted net earnings is a
useful measure of our performance because these adjusting items do
not reflect the underlying operating performance of our core mining
business and are not necessarily indicative of future operating
results. Adjusted net earnings and adjusted net earnings per share
are intended to provide additional information only and do not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other companies. They
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Further
details on these non-GAAP measures are provided in the MD&A
accompanying Barrick’s financial statements filed from time to time
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Earnings to Net
Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings
per Share
| ($
millions, except per share amounts in dollars) |
For the three months ended June 30 |
|
For the six months ended June 30 |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| Net earnings
attributable to equity holders of the Company |
($94 |
) |
$1,084 |
|
$64 |
|
$1,763 |
|
| Impairment charges
related to intangibles, goodwill, property, plant and equipment,
and investments1 |
59 |
|
(5 |
) |
61 |
|
(1,130 |
) |
| Acquisition/disposition
(gains)/losses2 |
(2 |
) |
(880 |
) |
(48 |
) |
(877 |
) |
| Foreign currency
translation losses |
75 |
|
32 |
|
90 |
|
35 |
|
| Significant tax
adjustments3 |
16 |
|
12 |
|
62 |
|
9 |
|
| Other expense
adjustments4 |
43 |
|
21 |
|
37 |
|
27 |
|
| Unrealized gains on
non-hedge derivative instruments |
— |
|
— |
|
— |
|
3 |
|
| Tax
effect and non-controlling interest |
(16 |
) |
(3 |
) |
(15 |
) |
593 |
|
| Adjusted
net earnings |
$81 |
|
$261 |
|
$251 |
|
$423 |
|
| Net earnings per
share5 |
(0.08 |
) |
0.93 |
|
0.05 |
|
1.51 |
|
| Adjusted
net earnings per share5 |
0.07 |
|
0.22 |
|
0.22 |
|
0.36 |
|
1 Net impairment charges primarily relate to the Kabanga
project (a joint venture between Barrick and Glencore) and Acacia's
Nyanzaga project in Tanzania for the three and six months ended
June 30, 2018, and the Cerro Casale project upon reclassification
of the project’s net assets as held-for-sale as at March 31,
2017 for the six months ended June 30, 2017.2 Disposition
gains primarily relate to the gain on the sale of a non-core
royalty asset at Acacia for the six months ended June 30,
2018, and the sale of a 50% interest in the Veladero mine and the
gain related to the sale of a 25% interest in the Cerro Casale
project for the three and six month periods ended June 30,
2017.3 Significant tax adjustments for the six months ended
June 30, 2018 primarily relate to a tax audit of Pueblo Viejo
in the Dominican Republic.4 Other expense adjustments for the
three and six months ended June 30, 2018 include $28 million
relating to staffing reductions and office closures associated with
the implementation of our decentralized operating model; and $13
million related to an insurance payment to our Porgera
JV.5 Calculated using weighted average number of shares
outstanding under the basic method of earnings per share.
Endnote 2“Free cash flow” is a
non-GAAP financial performance measure which deducts capital
expenditures from net cash provided by operating activities.
Barrick believes this to be a useful indicator of our ability to
operate without reliance on additional borrowing or usage of
existing cash. Free cash flow is intended to provide additional
information only and does not have any standardized meaning under
IFRS and may not be comparable to similar measures of performance
presented by other companies. Free cash flow should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Further details on
these non-GAAP measures are provided in the MD&A accompanying
Barrick’s financial statements filed from time to time on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flow
| ($
millions) |
For the three months ended June 30 |
|
For the six months ended June 30 |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| Net cash provided by
operating activities |
$141 |
|
$448 |
|
$648 |
|
$943 |
|
| Capital
expenditures |
(313 |
) |
(405 |
) |
(639 |
) |
(739 |
) |
| Free cash
flow |
($172 |
) |
$43 |
|
$9 |
|
$204 |
|
Endnote 3Cost of sales
applicable to gold per ounce is calculated using cost of sales
applicable to gold on an attributable basis (removing the
non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and 40%
South Arturo from cost of sales), divided by attributable gold
ounces. Cost of sales applicable to copper per pound is calculated
using cost of sales applicable to copper including our
proportionate share of cost of sales attributable to equity method
investments (Zaldívar and Jabal Sayid), divided by consolidated
copper pounds (including our proportionate share of copper pounds
from our equity method investments).
Endnote 4“Cash costs” per ounce
and “All-in sustaining costs” per ounce are non-GAAP financial
performance measures. “Cash costs” per ounce starts with cost of
sales applicable to gold production, but excludes the impact of
depreciation, the non-controlling interest of cost of sales, and
includes by-product credits. “All-in sustaining costs” per ounce
begin with “Cash costs” per ounce and add further costs which
reflect the additional costs of operating a mine, primarily
sustaining capital expenditures, general & administrative
costs, minesite exploration and evaluation costs, and reclamation
cost accretion and amortization. Barrick believes that the use of
“cash costs” per ounce and “all-in sustaining costs” per ounce will
assist investors, analysts and other stakeholders in understanding
the costs associated with producing gold, understanding the
economics of gold mining, assessing our operating performance and
also our ability to generate free cash flow from current operations
and to generate free cash flow on an overall Company basis. “Cash
costs” per ounce and “All-in sustaining costs” per ounce are
intended to provide additional information only and do not have any
standardized meaning under IFRS. Although a standardized definition
of all-in sustaining costs was published in 2013 by the World Gold
Council (a market development organization for the gold industry
comprised of and funded by 24 gold mining companies from around the
world, including Barrick), it is not a regulatory organization, and
other companies may calculate this measure differently. These
measures should not be considered in isolation or as a substitute
for measures prepared in accordance with IFRS. Further details on
these non-GAAP measures are provided in the MD&A accompanying
Barrick’s financial statements filed from time to time on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Gold Cost of Sales to
Cash costs, All-in sustaining costs and All-in costs, including on
a per ounce basis
| ($
millions, except per ounce information in dollars) |
|
For the three months ended June 30 |
|
For the six months ended June 30 |
|
|
|
Footnote |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| Cost of sales
applicable to gold production |
|
$1,058 |
|
$1,159 |
|
$2,104 |
|
$2,397 |
|
|
Depreciation |
|
(290 |
) |
(383 |
) |
(588 |
) |
(768 |
) |
|
By-product credits |
|
(38 |
) |
(32 |
) |
(74 |
) |
(73 |
) |
| Realized
(gains)/losses on hedge and non-hedge derivatives |
1 |
— |
|
10 |
|
— |
|
10 |
|
|
Non-recurring items |
2 |
(3 |
) |
— |
|
(10 |
) |
— |
|
|
Other |
3 |
(21 |
) |
(27 |
) |
(42 |
) |
(47 |
) |
|
Non-controlling interests (Pueblo Viejo and Acacia) |
4 |
(78 |
) |
(64 |
) |
(150 |
) |
(145 |
) |
| Cash
costs |
|
$628 |
|
$663 |
|
$1,240 |
|
$1,374 |
|
|
General & administrative costs |
|
93 |
|
45 |
|
141 |
|
117 |
|
|
Minesite exploration and evaluation costs |
5 |
14 |
|
16 |
|
20 |
|
23 |
|
|
Minesite sustaining capital expenditures |
6 |
235 |
|
320 |
|
466 |
|
582 |
|
|
Rehabilitation - accretion and amortization (operating sites) |
7 |
19 |
|
20 |
|
38 |
|
37 |
|
|
Non-controlling interest, copper operations and other |
8 |
(100 |
) |
(71 |
) |
(155 |
) |
(132 |
) |
| All-in
sustaining costs |
|
$889 |
|
$993 |
|
$1,750 |
|
$2,001 |
|
|
Project exploration and evaluation and project costs |
5 |
83 |
|
65 |
|
150 |
|
133 |
|
|
Community relations costs not related to current operations |
|
— |
|
1 |
|
1 |
|
2 |
|
|
Project capital expenditures |
6 |
106 |
|
83 |
|
206 |
|
139 |
|
|
Rehabilitation - accretion and amortization (non-operating
sites) |
7 |
8 |
|
9 |
|
16 |
|
13 |
|
|
Non-controlling interest and copper operations |
8 |
(3 |
) |
(1 |
) |
(8 |
) |
(6 |
) |
| All-in
costs |
|
$1,083 |
|
$1,150 |
|
$2,115 |
|
$2,282 |
|
| Ounces
sold - equity basis (000s ounces) |
9 |
1,037 |
|
1,398 |
|
2,108 |
|
2,703 |
|
| Cost of
sales per ounce |
10,11 |
$882 |
|
$726 |
|
$865 |
|
$778 |
|
| Cash costs per
ounce |
11 |
$605 |
|
$474 |
|
$589 |
|
$508 |
|
| Cash
costs per ounce (on a co-product basis) |
11,12 |
$630 |
|
$488 |
|
$613 |
|
$527 |
|
| All-in sustaining costs
per ounce |
11 |
$856 |
|
$710 |
|
$830 |
|
$739 |
|
| All-in
sustaining costs per ounce (on a co-product basis) |
11,12 |
$881 |
|
$724 |
|
$854 |
|
$758 |
|
| All-in costs per
ounce |
11 |
$1,043 |
|
$823 |
|
$1,003 |
|
$844 |
|
| All-in
costs per ounce (on a co-product basis) |
11,12 |
$1,068 |
|
$837 |
|
$1,027 |
|
$863 |
|
- Realized (gains)/losses on hedge and non-hedge
derivativesIncludes realized hedge losses of $1 million
and $2 million, respectively, for the three and six month periods
ended June 30, 2018 (2017: $8 million and
$14 million, respectively), and realized non-hedge gains of
$1 million and $2 million, respectively, for the three
and six month periods ended June 30, 2018 (2017: losses of $2
million and gains of $4 million, respectively). Refer to Note
5 to the Financial Statements for further information.
- Non-recurring itemsNon-recurring
items in 2018 relate to abnormal costs at Porgera as a result of
the February 2018 earthquake in Papua New Guinea. These costs
are not indicative of our cost of production and have been excluded
from the calculation of cash costs.
- OtherOther adjustments for the three
and six month periods ended June 30, 2018 include adding the
cost of treatment and refining charges of $1 million and $1
million, respectively, (2017: $(1) million and $1 million,
respectively) and the removal of cash costs and by-product credits
associated with our Pierina mine, which is mining incidental ounces
as it enters closure, of $22 million and $43 million, respectively
(2017: $27 million and $48 million, respectively).
- Non-controlling interests (Pueblo Viejo and
Acacia)Non-controlling interests include non-controlling
interests related to gold production of $112 million and $218
million, respectively, for the three and six month periods ended
June 30, 2018 (2017: $98 million and $214 million,
respectively). Refer to Note 5 to the Financial Statements for
further information.
- Exploration and evaluation costs
Exploration, evaluation and project expenses are
presented as minesite sustaining if it supports current mine
operations and project if it relates to future projects. Refer to
page 32 of this MD&A.
- Capital expenditures Capital
expenditures are related to our gold sites only and are presented
on a 100% accrued basis. They are split between minesite sustaining
and project capital expenditures. Project capital expenditures are
distinct projects designed to increase the net present value of the
mine and are not related to current production. Significant
projects in the current year are stripping at Cortez Crossroads,
the Range Front declines, the Goldrush exploration declines, the
Deep South Expansion, and construction of the third shaft at
Turquoise Ridge. Refer to page 31 of this MD&A.
- Rehabilitation—accretion and
amortizationIncludes depreciation on the assets related to
rehabilitation provisions of our gold operations and accretion on
the rehabilitation provision of our gold operations, split between
operating and non-operating sites.
- Non-controlling interest and copper
operations Removes general &
administrative costs related to non-controlling interests and
copper based on a percentage allocation of revenue. Also removes
exploration, evaluation and project expenses, rehabilitation costs
and capital expenditures incurred by our copper sites and the
non-controlling interest of our Acacia and Pueblo Viejo operating
segments and South Arturo. Figures remove the impact of Pierina.
The impact is summarized as the following:
| ($
millions) |
For the three months ended June 30 |
|
For the six months ended June 30 |
|
|
Non-controlling interest, copper operations and other |
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| General &
administrative costs |
($41 |
) |
$1 |
|
($48 |
) |
($8 |
) |
| Minesite exploration
and evaluation expenses |
(1 |
) |
(5 |
) |
(1 |
) |
(7 |
) |
| Rehabilitation -
accretion and amortization (operating sites) |
(2 |
) |
(4 |
) |
(3 |
) |
(6 |
) |
| Minesite
sustaining capital expenditures |
(56 |
) |
(63 |
) |
(103 |
) |
(111 |
) |
|
All-in sustaining costs total |
($100 |
) |
($71 |
) |
($155 |
) |
($132 |
) |
| Project exploration and
evaluation and project costs |
(3 |
) |
(1 |
) |
(6 |
) |
(6 |
) |
| Project
capital expenditures |
— |
|
— |
|
(2 |
) |
— |
|
|
All-in costs total |
($3 |
) |
($1 |
) |
($8 |
) |
($6 |
) |
- Ounces sold - equity basisFigures
remove the impact of Pierina as the mine is currently going through
closure.
- Cost of sales per ounceFigures
remove the cost of sales impact of Pierina of $30 million and $62
million, respectively, for the three and six month periods ended
June 30, 2018 (2017: $47 million and $81 million,
respectively), as the mine is currently going through closure. Cost
of sales per ounce excludes non-controlling interest related to
gold production. Cost of sales applicable to gold per ounce is
calculated using cost of sales on an attributable basis (removing
the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and
40% South Arturo from cost of sales), divided by attributable gold
ounces.
- Per ounce figures Cost of
sales per ounce, cash costs per ounce, all-in sustaining costs per
ounce and all-in costs per ounce may not calculate based on amounts
presented in this table due to rounding.
- Co-product costs per
ounce Cash costs per ounce, all-in sustaining costs
per ounce and all-in costs per ounce presented on a co-product
basis removes the impact of by-product credits of our gold
production (net of non-controlling interest) calculated as:
| ($
millions) |
For the three months ended June 30 |
|
For the six months ended June 30 |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| By-product
credits |
$38 |
|
$32 |
|
$74 |
|
$73 |
|
|
Non-controlling interest |
(13 |
) |
(9 |
) |
(24 |
) |
(17 |
) |
|
By-product credits (net of non-controlling interest) |
$25 |
|
$23 |
|
$50 |
|
$56 |
|
Endnote 5“C1 cash costs” per pound and “All-in
sustaining costs” per pound are non-GAAP financial performance
measures. “C1 cash costs” per pound is based on cost of sales but
excludes the impact of depreciation and royalties and includes
treatment and refinement charges. “All-in sustaining costs” per
pound begins with “C1 cash costs” per pound and adds further costs
which reflect the additional costs of operating a mine, primarily
sustaining capital expenditures, general & administrative
costs and royalties. Barrick believes that the use of “C1 cash
costs” per pound and “all-in sustaining costs” per pound will
assist investors, analysts, and other stakeholders in understanding
the costs associated with producing copper, understanding the
economics of copper mining, assessing our operating performance,
and also our ability to generate free cash flow from current
operations and to generate free cash flow on an overall Company
basis. “C1 cash costs” per pound and “All-in sustaining costs” per
pound are intended to provide additional information only, do not
have any standardized meaning under IFRS, and may not be comparable
to similar measures of performance presented by other companies.
These measures should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
IFRS. Further details on these non-GAAP measures are provided in
the MD&A accompanying Barrick’s financial statements filed from
time to time on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
Reconciliation of Copper Cost of Sales
to C1 cash costs and All-in sustaining costs, including on a per
pound basis
| ($
millions, except per pound information in dollars) |
For the three months ended June 30 |
|
For the six months ended June 30 |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
| Cost of sales |
$108 |
|
$102 |
|
$204 |
|
$184 |
|
|
Depreciation/amortization |
(30 |
) |
(19 |
) |
(49 |
) |
(33 |
) |
| Treatment
and refinement charges |
29 |
|
35 |
|
60 |
|
67 |
|
| Cash cost
of sales applicable to equity method investments |
59 |
|
62 |
|
122 |
|
123 |
|
| Less:
royalties and production taxes1 |
(9 |
) |
(8 |
) |
(19 |
) |
(15 |
) |
|
By-product credits |
(1 |
) |
(3 |
) |
(3 |
) |
(3 |
) |
|
C1 cash cost of sales |
$156 |
|
$169 |
|
$315 |
|
$323 |
|
|
General & administrative costs |
11 |
|
3 |
|
16 |
|
6 |
|
|
Rehabilitation - accretion and amortization |
3 |
|
3 |
|
8 |
|
5 |
|
| Royalties
and production taxes1 |
9 |
|
8 |
|
19 |
|
15 |
|
| Minesite
exploration and evaluation costs |
1 |
|
1 |
|
1 |
|
1 |
|
|
Minesite sustaining capital expenditures |
46 |
|
50 |
|
88 |
|
87 |
|
|
All-in sustaining costs |
$226 |
|
$234 |
|
$447 |
|
$437 |
|
| Pounds
sold - consolidated basis (millions pounds) |
74 |
|
98 |
|
159 |
|
191 |
|
|
Cost of sales per pound2,3 |
$2.45 |
|
$1.85 |
|
$2.25 |
|
$1.79 |
|
|
C1 cash cost per pound2 |
$2.10 |
|
$1.72 |
|
$1.98 |
|
$1.69 |
|
|
All-in sustaining costs per pound2 |
$3.04 |
|
$2.38 |
|
$2.81 |
|
$2.29 |
|
1 For the three and six month periods ended June 30,
2018, royalties and production taxes include royalties of $8
million and $17 million, respectively (2017: $8 million and $15
million, respectively).2 Cost of sales per pound, C1 cash
costs per pound and all-in sustaining costs per pound may not
calculate based on amounts presented in this table due to
rounding.3 Cost of sales applicable to copper per pound is
calculated using cost of sales including our proportionate share of
cost of sales attributable to equity method investments (Zaldívar
and Jabal Sayid), divided by consolidated copper pounds (including
our proportionate share of copper pounds from our equity method
investments).
Endnote 6These amounts are presented on the
same basis as our guidance and include our 60% share of Pueblo
Viejo and South Arturo, our 63.9% share of Acacia, our 50% share of
Zaldívar and Jabal Sayid and our share of joint operations.
Endnote 7Includes both minesite
sustaining and mine development.
Endnote 8Project capital
expenditures are included in our calculation of all-in costs, but
not included in our calculation of all-in sustaining costs.
Endnote 9These are non-GAAP
financial performance measures with no standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other issuers. For further information and a detailed
reconciliation of each non-GAAP measure to the most directly
comparable IFRS measure, please see pages 48 to 61 of Barrick's
second quarter MD&A.
Endnote 10Includes $121 million of cash,
primarily held at Acacia, which may not be readily deployed.
Endnote 11Amount excludes
capital leases and includes Acacia (100% basis).
Endnote 12Barrick’s share.
Endnote 13Fourmile
Significant Intercepts1
|
Core Drill Hole2 |
Azimuth |
Dip |
Interval (m) |
Width (m)3 |
Au (g/t) |
| Drill Results From Q2 2018 |
| FM18-01D |
288 |
-70 |
656.8 - 667 |
10.2 |
9.3 |
| 715.8
- 732.4 |
16.6 |
71.6 |
| 758 -
761.2 |
3.2 |
7.43 |
| 808.9
- 817.5 |
8.5 |
30.9 |
| 841.1
- 844.1 |
3 |
8.93 |
|
891.8 - 894.7 |
2.9 |
24.7 |
|
FM18-02D |
251 |
-82 |
|
|
no significant intercept |
|
FM18-03D |
220 |
-84 |
713.8 - 715.2 |
1.4 |
25 |
|
FM18-04D |
254 |
-75 |
|
|
no significant intercept |
|
FM18-05D |
300 |
-81 |
737.3 - 740.4 |
3.1 |
9.22 |
| FM18-06D |
176 |
-84 |
706.8
- 712.4 |
5.6 |
17.5 |
| 715 -
720.2 |
5.2 |
12.5 |
| 723 -
726 |
3 |
41.1 |
|
828 - 832.1 |
4.1 |
92.4 |
| FM18-07D |
267 |
-83 |
717.5
- 761.2 |
42.7 |
18.1 |
|
851.6 - 868.4 |
16.8 |
57.9 |
| FM18-09D |
80 |
-61 |
701.4
- 708.6 |
7.6 |
8.68 |
| 721.8
- 723.3 |
1.5 |
5.11 |
| 754.7
- 756.2 |
1.5 |
11.4 |
|
760.8 - 765.1 |
4.3 |
21.1 |
| FM18-16D |
42 |
-70 |
701.7
- 707.8 |
6.1 |
30.1 |
| 717.8
- 722.4 |
4.6 |
14.5 |
| 743.7
- 746.7 |
3 |
22.4 |
| 749.8
- 752.8 |
3 |
39 |
| 772 -
776.6 |
4.6 |
20.3 |
|
781.1 - 795.7 |
13.9 |
56.8 |
|
FM18-17D |
10 |
-80 |
912.3 - 915.3 |
3 |
18.5 |
| Previously-Reported Drill Results |
| GRC-0427D |
NA |
-90 |
666.9 - 672.7 |
5.8 |
10.9 |
| 695.3
- 709.6 |
14.3 |
31.8 |
| 727.9
- 729.4 |
1.5 |
12.2 |
|
921.4 - 927.2 |
5.8 |
49.7 4 |
|
GRC-0435D |
NA |
-90 |
702.2 - 707.4 |
5.2 |
14.4 |
| FM16-05D |
NA |
-90 |
705.6
- 714 |
8.4 |
30.6 |
|
726.0 - 727.5 |
1.5 |
16.6 |
|
FM16-01D |
NA |
-90 |
|
|
no significant intercept |
| FM16-04D |
NA |
-90 |
609.9
- 611.4 |
1.5 |
5.95 |
|
616 - 617.5 |
1.5 |
5.6 |
| FM16-10D |
357 |
-77 |
695.5
- 697.0 |
1.5 |
5.1 |
|
730.6 - 733.6 |
3 |
5.7 |
|
FM17-01D |
275 |
-87 |
866.9 - 870.5 |
3.7 4 |
6.1 |
| FM17-01DW1 |
300 |
-86 |
867.1
- 868.8 |
1.7 |
25 |
|
870.4 - 871.4 |
1 |
55.4 |
|
FM17-02W1 |
66 |
-77 |
|
|
no significant intercept |
|
FM17-03D |
70 |
-88 |
1178.6 - 1183.5 |
4.9 |
11.5 |
|
FM17-04D |
282 |
-83 |
|
|
no significant intercept |
| FM17-05D |
278 |
-80 |
1132.4
- 1135.9 |
3.5 |
17.6 |
| 1157 -
1157.9 |
0.9 |
6.19 |
| 1160.4
- 1162.8 |
2.4 |
5.32 |
|
1192.4 - 1193.3 |
0.9 |
14 |
|
FM17-06AW1 |
96 |
-84 |
996.1 - 996.9 |
0.8 |
37 |
|
FM17-07D |
90 |
-85 |
684.3 - 687.9 |
3.6 |
10.3 |
| FM17-11D |
82 |
-82 |
690.4
- 691.9 |
1.5 |
13.2 |
|
696.5 - 728.6 |
32.1 5 |
13.4 5 |
| FM17-12D |
350 |
-82 |
721.3
- 723.3 |
2 |
28.1 |
|
736.1 - 741 |
4.9 |
21.9 |
| FM17-12W1 |
5 |
-81 |
736.8
- 741.4 |
4.6 |
19.9 |
|
856.8 - 862.6 |
5.8 |
10.9 |
| FM17-13D 7 |
324 |
-82 |
652.9
- 659.6 |
6.7 6 |
14
6 |
|
662.2 - 664.6 |
2.4 |
9.8 |
| FM17-14D |
49 |
-79 |
714.3
- 715.4 |
1.1 |
28.1 |
| 804.6
- 806.0 |
1.4 |
17.1 |
| 812.1
- 821.9 |
9.8 |
16.6 |
|
870.5 - 873.6 |
3.1 |
9.97 |
|
FM17-15D |
21 |
-82 |
689.9 - 692.5 |
2.6 |
15.7 4 |
|
FM17-16D |
92 |
-82 |
|
|
no significant intercept |
|
FM17-17D |
133 |
-81 |
706.8 - 709.2 |
2.4 |
18.2 |
|
FM17-18D |
267 |
-84 |
719.2 - 721.5 |
2.3 |
9.95 |
|
FM18-11D |
6 |
-81 |
|
|
no significant intercept |
|
FM18-15D |
0 |
-78 |
878.1 - 887.2 |
9.1 |
40.8 |
|
FM18-21D |
173 |
-82 |
712.6 - 714.1 |
1.5 |
13.4 |
1 All intercepts calculated using a 5 g/t Au
cutoff and are uncapped; minimum intercept width is 0.8 m; internal
dilution is less than 20% total width.2 Nomenclature for drillholes
(e.g., FM18-01D) is described by FM (i.e., Fourmile) followed by
the year (e.g., 18 for 2018) or GRC (i.e., Goldrush Core) with no
designation of year.3 True width of intercepts are uncertain at
this stage.4 Intercept revised from previously-reported result to
correct rounding.5 Intercept adjusted from previously-reported
result of 33.7m grading 13.3 g/t to reduce dilution.6 Intercept
adjusted from previously-reported result of 7.9m grading 12.4 g/t
to reduce dilution.7 FM17-13D was initially reported as 11.7m (from
652.9 to 664.6m in depth) grading 10.5 g/t, but that depth range
has now been reported as two intervals.
The drilling results for the Fourmile property
contained in this press release have been prepared in accordance
with National Instrument 43-101 – Standards of Disclosure for
Mineral Projects. All drill hole assay information has been
manually reviewed and approved by staff geologists and re-checked
by the project manager. Sample preparation and analyses are
conducted by an independent laboratory. Procedures are employed to
ensure security of samples during their delivery from the drill rig
to the laboratory. The quality assurance procedures, data
verification and assay protocols used in connection with drilling
and sampling on the Fourmile property conform to industry accepted
quality control methods.
Endnote 14For additional detail
regarding Turquoise Ridge, see the Technical Report on the
Turquoise Ridge Mine, State of Nevada, U.S.A., dated March 19,
2018, and filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov
on March 23, 2018.
Turquoise Ridge Significant Intercepts1
|
Core Drill Hole |
Azimuth |
Dip |
Interval (m) |
Width (m)2 |
Au (g/t) |
|
TS1802 |
288 |
-50 |
766.3 - 782.4 |
16.5 |
16.9 |
|
TS1804 |
295 |
-76 |
985.3 - 992.7 |
6.7 |
15.3 |
1 All significant intercepts calculated as being
>6 m and >7.7 g/t or >3 m and >15.5 g/t2 True width of
intercepts are uncertain at this stage.
The drilling results for the Turquoise Ridge
property contained in this press release have been prepared in
accordance with National Instrument 43-101 – Standards of
Disclosure for Mineral Projects. All drill hole assay information
has been manually reviewed and approved by staff geologists and
re-checked by the project manager. Sample preparation and analyses
are conducted in an on site laboratory with quality assurance and
quality control procedures performed by an independent laboratory.
Procedures are employed to ensure security of samples during their
delivery from the drill rig to the laboratory. The quality
assurance procedures, data verification and assay protocols used in
connection with drilling and sampling on the Turquoise Ridge
property conform to industry accepted quality control methods.
Endnote 15Estimated in
accordance with National Instrument 43-101 as required by Canadian
securities regulatory authorities. Estimates are as of December 31,
2017, unless otherwise noted. Goldrush probable reserves of 5.7
million tonnes grading 8.12 g/t, representing 1.5 million ounces of
gold. Goldrush measured resources of 140,000 tonnes grading 10.44
g/t, representing 47,000 ounces of gold, and indicated resources
31.4 million tonnes grading 9.27 g/t, representing 9.4 million
ounces of gold. Pueblo Viejo proven reserves of 62.1 million tonnes
grading 2.67 g/t, representing 5.3 million ounces of gold, and
probable reserves of 19.2 million tonnes grading 3.06 g/t,
representing 1.9 million ounces of gold. Pueblo Viejo measured
resources of 7.8 million tonnes grading 2.39 g/t, representing
598,000 ounces of gold, and indicated resources of 93.9 million
tonnes grading 2.47 g/t, representing 7.5 million ounces of gold.
Turquoise Ridge proven reserves of 7.1 million tonnes grading 15.56
g/t, representing 3.5 million ounces of gold, and probable reserves
of 4.7 million tonnes grading 15.48 g/t, representing 2.3 million
ounces of gold. Turquoise Ridge measured resources of 2.9 million
tonnes grading 9.03 g/t, representing 855,000 ounces of gold, and
indicated resources of 2.2 million tonnes grading 9.37 g/t,
representing 651,000 ounces of gold. Complete mineral reserve and
mineral resource data for all mines and projects referenced in this
press release, including tonnes, grades, and ounces, can be found
on pages 29-39 of Barrick’s Annual Information Form for the year
ended December 31, 2017.
Endnote 16For additional detail
regarding Cortez, see the Technical Report on the Cortez Joint
Venture Operations, Lander and Eureka Counties, State of Nevada,
U.S.A., dated March 21, 2016, and filed on SEDAR at www.sedar.com
and EDGAR at www.sec.gov on March 28, 2016.
Endnote 17Operating unit
guidance ranges for production reflect expectations at each
individual operating unit, but do not necessarily add up to the
corporate-wide guidance range total.
Endnote 18As at June 30,
2018, utilizing option collar strategies, we have protected the
downside on approximately 44 million pounds of expected copper
production for the second half of 2018 at an average floor price of
$3.00 per pound and can participate in the upside on the same
amount up to an average of $3.40 per pound. Our remaining
copper production is subject to market prices.
Endnote 19Due to our hedging
activities, which are reflected in these sensitivities, we are
partially protected against changes in these factors.
Key Statistics
| Barrick Gold
Corporation |
|
|
|
|
| (in United States
dollars) |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
2018 |
2017 |
| Financial
Results (millions) |
|
|
|
|
|
|
|
|
|
| Revenues |
$ |
1,712 |
|
$ |
2,160 |
$ |
3,502 |
$ |
4,153 |
| Cost of sales |
|
1,176 |
|
|
1,277 |
|
2,328 |
|
2,619 |
| Net (loss)
earnings1 |
|
(94 |
) |
|
1,084 |
|
64 |
|
1,763 |
| Adjusted net
earnings2 |
|
81 |
|
|
261 |
|
251 |
|
423 |
| Adjusted EBITDA2 |
|
657 |
|
|
1,114 |
|
1,453 |
|
2,033 |
| Total capital
expenditures - sustaining3 |
|
235 |
|
|
320 |
|
466 |
|
582 |
| Total project capital
expenditures3 |
|
106 |
|
|
83 |
|
206 |
|
139 |
| Net cash provided by
operating activities |
|
141 |
|
|
448 |
|
648 |
|
943 |
| Free cash flow2 |
|
(172 |
) |
|
43 |
|
9 |
|
204 |
| Per share data
(dollars) |
|
|
|
|
|
|
|
|
|
| Net
(loss) earnings (basic and diluted) |
|
(0.08 |
) |
|
0.93 |
|
0.05 |
|
1.51 |
| Adjusted
net earnings (basic)2 |
$ |
0.07 |
|
$ |
0.22 |
$ |
0.22 |
$ |
0.36 |
| Weighted
average diluted common shares (millions) |
|
1,167 |
|
|
1,166 |
|
1,167 |
|
1,166 |
| Operating
Results |
|
|
|
|
|
|
|
|
|
| Gold production
(thousands of ounces)4 |
|
1,067 |
|
|
1,432 |
|
2,116 |
|
2,741 |
| Gold sold (thousands of
ounces)4 |
|
1,037 |
|
|
1,398 |
|
2,108 |
|
2,703 |
| Per ounce data |
|
|
|
|
|
|
|
|
|
| Average
spot gold price |
$ |
1,306 |
|
$ |
1,257 |
$ |
1,318 |
$ |
1,238 |
| Average
realized gold price2,4 |
|
1,313 |
|
|
1,258 |
|
1,323 |
|
1,239 |
| Cost of
sales (Barrick’s share)4,5 |
|
882 |
|
|
726 |
|
865 |
|
778 |
| All-in
sustaining costs2,4 |
|
856 |
|
|
710 |
|
830 |
|
739 |
| Cash
costs2,4 |
$ |
605 |
|
$ |
474 |
$ |
589 |
$ |
508 |
| Copper production
(millions of pounds)6 |
|
83 |
|
|
104 |
|
168 |
|
199 |
| Copper sold (millions
of pounds)6 |
|
74 |
|
|
98 |
|
159 |
|
191 |
| Per pound data |
|
|
|
|
|
|
|
|
|
| Average
spot copper price |
$ |
3.12 |
|
$ |
2.57 |
$ |
3.14 |
$ |
2.61 |
| Average
realized copper price2,6 |
|
3.11 |
|
|
2.60 |
|
3.04 |
|
2.68 |
| Cost of
sales (Barrick’s share)6,7 |
|
2.45 |
|
|
1.85 |
|
2.25 |
|
1.79 |
| C1 cash
costs2,6 |
|
2.10 |
|
|
1.72 |
|
1.98 |
|
1.69 |
|
All-in sustaining costs2,6 |
$ |
3.04 |
|
$ |
2.38 |
$ |
2.81 |
$ |
2.29 |
| |
|
|
|
|
|
|
As at June 30, |
|
As at December 31, |
|
|
|
|
|
|
|
|
2018 |
|
2017 |
| Financial
Position (millions) |
|
|
|
|
|
|
|
|
|
| Cash and
equivalents |
|
|
|
|
|
$ |
2,085 |
$ |
2,234 |
| Working
capital (excluding cash) |
|
|
|
|
|
$ |
1,315 |
$ |
1,184 |
1 Net (loss) earnings represents net (loss) earnings
attributable to the equity holders of the Company.2 Adjusted
net earnings, adjusted EBITDA, free cash flow, adjusted net
earnings per share, realized gold price, all-in sustaining costs,
cash costs, C1 cash costs and realized copper price are non-GAAP
financial performance measures with no standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other issuers. For further information and a detailed
reconciliation of each non-GAAP measure to the most directly
comparable IFRS measure, please see pages 48 to 61 of this
MD&A.3 Amounts presented on a consolidated accrued basis.
Project capital expenditures are included in our calculation of
all-in costs, but not included in our calculation of all-in
sustaining costs.4 Includes Acacia on a 63.9% basis, Pueblo
Viejo on a 60% basis, South Arturo on a 60% basis, and Veladero on
a 50% basis from July 1, 2017 onwards, which reflects our equity
share of production and sales.5 Cost of sales per ounce
(Barrick’s share) is calculated as cost of sales - gold on an
attributable basis excluding Pierina divided by gold ounces
sold.6 Amounts reflect production and sales from Jabal Sayid
and Zaldívar on a 50% basis, which reflects our equity share of
production, and Lumwana.7 Cost of sales per pound (Barrick’s
share) is calculated as cost of sales - copper plus our equity
share of cost of sales attributable to Zaldívar and Jabal Sayid
divided by copper pounds sold.
Production and Cost Summary
| |
Production |
| |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Gold (equity
ounces (000s)) |
|
|
|
|
| Barrick
Nevada1 |
|
464 |
|
741 |
|
935 |
|
1,262 |
| Turquoise
Ridge |
|
69 |
|
24 |
|
115 |
|
79 |
| Pueblo
Viejo2 |
|
123 |
|
171 |
|
264 |
|
314 |
|
Veladero3 |
|
78 |
|
72 |
|
152 |
|
223 |
| Lagunas
Norte |
|
65 |
|
90 |
|
131 |
|
178 |
|
Acacia4 |
|
86 |
|
134 |
|
163 |
|
274 |
| Other
Mines - Gold5 |
|
182 |
|
200 |
|
356 |
|
411 |
|
Total |
|
1,067 |
|
1,432 |
|
2,116 |
|
2,741 |
|
|
|
|
|
|
|
Copper (equity pounds (millions))6 |
|
83 |
|
104 |
|
168 |
|
199 |
| |
Cost of Sales per unit (Barrick’s
share) |
| |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Gold Cost
of Sales per ounce ($/oz)7 |
|
|
|
|
| Barrick
Nevada |
$ |
850 |
$ |
723 |
$ |
847 |
$ |
804 |
| Turquoise
Ridge |
|
802 |
|
853 |
|
759 |
|
728 |
| Pueblo
Viejo |
|
852 |
|
586 |
|
761 |
|
635 |
|
Veladero |
|
984 |
|
628 |
|
1,008 |
|
770 |
| Lagunas
Norte |
|
657 |
|
615 |
|
599 |
|
595 |
|
Acacia |
|
877 |
|
756 |
|
907 |
|
792 |
|
Total |
$ |
882 |
$ |
726 |
$ |
865 |
$ |
778 |
|
|
|
|
|
|
|
Copper Cost of Sales per pound ($/lb)8 |
$ |
2.45 |
$ |
1.85 |
$ |
2.25 |
$ |
1.79 |
| |
All-in sustaining costs9 |
| |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Gold
All-in Sustaining Costs ($/oz) |
|
|
|
|
| Barrick
Nevada1 |
$ |
719 |
$ |
541 |
$ |
704 |
$ |
605 |
| Turquoise
Ridge |
|
757 |
|
965 |
|
733 |
|
784 |
| Pueblo
Viejo2 |
|
690 |
|
475 |
|
625 |
|
505 |
|
Veladero3 |
|
946 |
|
1,315 |
|
976 |
|
1,038 |
| Lagunas
Norte |
|
662 |
|
472 |
|
578 |
|
451 |
|
Acacia4 |
|
918 |
|
835 |
|
945 |
|
893 |
|
Total |
$ |
856 |
$ |
710 |
$ |
830 |
$ |
739 |
|
|
|
|
|
|
|
Copper All-in Sustaining Costs ($/lb)6 |
$ |
3.04 |
$ |
2.38 |
$ |
2.81 |
$ |
2.29 |
1 Reflects production and sales from Goldstrike, Cortez,
and South Arturo on a 60% basis, which reflects our equity
share.2 Reflects production and sales from Pueblo Viejo on a
60% basis, which reflects our equity share.3 Reflects
production and sales from Veladero on a 50% basis from July 1, 2017
onwards, which reflects our equity share.4 Reflects production
and sales from Acacia on a 63.9% basis, which reflects our equity
share.5 Other Mines - Gold includes Golden Sunlight, Hemlo,
Porgera on a 47.5% basis and Kalgoorlie on a 50%
basis.6 Reflects production and sales from Lumwana, and Jabal
Sayid and Zaldívar on a 50% basis, which reflects our equity
share.7 Cost of sales per ounce (Barrick’s share) is
calculated as cost of sales - gold on an attributable basis
excluding Pierina divided by gold equity ounces sold.8 Cost of
sales per pound (Barrick’s share) is calculated as cost of sales -
copper plus our equity share of cost of sales attributable to
Zaldívar and Jabal Sayid divided by copper pounds
sold.9 All-in sustaining costs is a non-GAAP financial
performance measure with no standardized meaning under IFRS and
therefore may not be comparable to similar measures presented by
other issuers. For further information and a detailed
reconciliation of this non-GAAP measure to the most directly
comparable IFRS measure, please see pages 48 to 61 of our second
quarter MD&A.
Consolidated Statements of Income
| Barrick
Gold Corporation(in millions of United States dollars, except per
share data) (Unaudited) |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
Revenue (notes 5 and 6) |
$ |
1,712 |
|
$ |
2,160 |
|
$ |
3,502 |
|
$ |
4,153 |
|
| Costs and
expenses (income) |
|
|
|
|
| Cost of sales (notes 5
and 7) |
|
1,176 |
|
|
1,277 |
|
|
2,328 |
|
|
2,619 |
|
| General and
administrative expenses |
|
93 |
|
|
45 |
|
|
141 |
|
|
117 |
|
| Exploration, evaluation
and project expenses |
|
97 |
|
|
81 |
|
|
170 |
|
|
156 |
|
| Impairment (reversals)
charges (notes 9B and 13) |
|
59 |
|
|
(5 |
) |
|
61 |
|
|
(1,130 |
) |
| Loss on currency
translation (note 9C) |
|
75 |
|
|
32 |
|
|
90 |
|
|
35 |
|
| Closed mine
rehabilitation |
|
9 |
|
|
(3 |
) |
|
— |
|
|
5 |
|
| Income from equity
investees (note 12) |
|
(10 |
) |
|
(14 |
) |
|
(26 |
) |
|
(25 |
) |
| (Gain) loss on
non-hedge derivatives |
|
(1 |
) |
|
2 |
|
|
(3 |
) |
|
(2 |
) |
| Other
expense (income) (note 9A) |
|
38 |
|
|
(839 |
) |
|
39 |
|
|
(837 |
) |
| Income before
finance costs and income taxes |
$ |
176 |
|
$ |
1,584 |
|
$ |
702 |
|
$ |
3,215 |
|
| Finance
costs, net |
|
(136 |
) |
|
(173 |
) |
|
(269 |
) |
|
(323 |
) |
| Income before
income taxes |
$ |
40 |
|
$ |
1,411 |
|
$ |
433 |
|
$ |
2,892 |
|
| Income
tax expense (note 10) |
|
(116 |
) |
|
(274 |
) |
|
(317 |
) |
|
(866 |
) |
|
Net (loss) income |
$ |
(76 |
) |
$ |
1,137 |
|
$ |
116 |
|
$ |
2,026 |
|
| Attributable
to: |
|
|
|
|
| Equity holders of
Barrick Gold Corporation |
$ |
(94 |
) |
$ |
1,084 |
|
$ |
64 |
|
$ |
1,763 |
|
|
Non-controlling interests |
$ |
18 |
|
$ |
53 |
|
$ |
52 |
|
$ |
263 |
|
| |
|
|
|
|
| Earnings (loss)
per share data attributable to the equity holders of Barrick Gold
Corporation (note 8) |
|
|
|
|
| Net (loss) income |
|
|
|
|
|
Basic |
$ |
(0.08 |
) |
$ |
0.93 |
|
$ |
0.05 |
|
$ |
1.51 |
|
|
Diluted |
$ |
(0.08 |
) |
$ |
0.93 |
|
$ |
0.05 |
|
$ |
1.51 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Second Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
Consolidated Statements of Comprehensive
Income
| Barrick
Gold Corporation(in millions of United States dollars)
(Unaudited) |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
| Net (loss) income |
$ |
(76 |
) |
$ |
1,137 |
|
$ |
116 |
|
$ |
2,026 |
|
| Other
comprehensive (loss) income, net of taxes |
|
|
|
|
|
|
|
|
|
|
|
|
| Movement in
equity investments fair value reserve: |
|
|
|
|
|
|
|
|
|
|
|
|
| Net unrealized change
on equity investments, net of tax $nil, $nil, $nil and $nil |
|
(4 |
) |
|
3 |
|
|
(8 |
) |
|
4 |
|
| Items that may
be reclassified subsequently to profit or loss: |
|
|
|
|
|
|
|
|
|
|
|
|
| Unrealized gains
(losses) on derivatives designated as cash flow hedges, net of tax
($3), $3, ($6) and $3 |
|
4 |
|
|
(8 |
) |
|
10 |
|
|
(20 |
) |
| Realized losses on
derivatives designated as cash flow hedges, net of tax $nil, ($2),
$nil and ($2) |
|
— |
|
|
7 |
|
|
— |
|
|
8 |
|
| Actuarial gain (loss)
on post employment benefit obligations, net of tax $nil, $nil, $nil
and $nil |
|
1 |
|
|
— |
|
|
1 |
|
|
— |
|
| Currency
translation adjustments, net of tax $nil, $nil, $nil and $nil |
|
2 |
|
|
4 |
|
|
2 |
|
|
15 |
|
|
Total other comprehensive income |
|
3 |
|
|
6 |
|
|
5 |
|
|
7 |
|
|
Total comprehensive (loss) income |
$ |
(73 |
) |
$ |
1,143 |
|
$ |
121 |
|
$ |
2,033 |
|
| Attributable
to: |
|
|
|
|
| Equity holders of
Barrick Gold Corporation |
$ |
(91 |
) |
$ |
1,090 |
|
$ |
69 |
|
$ |
1,770 |
|
|
Non-controlling interests |
$ |
18 |
|
$ |
53 |
|
$ |
52 |
|
$ |
263 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Second Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
Consolidated Statements of Cash Flow
|
Barrick Gold Corporation (in millions of United States
dollars) (Unaudited) |
Three months ended June 30, |
Six months ended June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| OPERATING
ACTIVITIES |
|
|
|
|
| Net (loss) income |
$ |
(76 |
) |
$ |
1,137 |
|
$ |
116 |
|
$ |
2,026 |
|
| Adjustments for the
following items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
328 |
|
|
409 |
|
|
653 |
|
|
823 |
|
| Finance
costs |
|
139 |
|
|
178 |
|
|
277 |
|
|
331 |
|
|
Impairment (reversals) charges (note 13) |
|
59 |
|
|
(5 |
) |
|
61 |
|
|
(1,130 |
) |
| Income
tax expense (note 10) |
|
116 |
|
|
274 |
|
|
317 |
|
|
866 |
|
| Gains on
sale of non-current assets/investments |
|
(2 |
) |
|
(880 |
) |
|
(48 |
) |
|
(877 |
) |
| Currency
translation losses |
|
75 |
|
|
32 |
|
|
90 |
|
|
35 |
|
| Change in working
capital (note 11) |
|
(194 |
) |
|
(182 |
) |
|
(370 |
) |
|
(378 |
) |
| Other
operating activities (note 11) |
|
57 |
|
|
(21 |
) |
|
(7 |
) |
|
(105 |
) |
| Operating cash flows
before interest and income taxes |
|
502 |
|
|
942 |
|
|
1,089 |
|
|
1,591 |
|
| Interest paid |
|
(155 |
) |
|
(188 |
) |
|
(183 |
) |
|
(223 |
) |
| Income
taxes paid |
|
(206 |
) |
|
(306 |
) |
|
(258 |
) |
|
(425 |
) |
|
Net cash provided by operating activities |
|
141 |
|
|
448 |
|
|
648 |
|
|
943 |
|
| INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
| Property, plant and
equipment |
|
|
|
|
|
|
|
|
|
|
|
|
| Capital
expenditures (note 5) |
|
(313 |
) |
|
(405 |
) |
|
(639 |
) |
|
(739 |
) |
| Sales
proceeds |
|
5 |
|
|
5 |
|
|
7 |
|
|
12 |
|
| Investment
purchases |
|
(38 |
) |
|
— |
|
|
(39 |
) |
|
— |
|
| Divestitures (note
4) |
|
— |
|
|
960 |
|
|
— |
|
|
960 |
|
| Sale of mineral
royalty |
|
— |
|
|
— |
|
|
45 |
|
|
— |
|
| Funding
of equity method investments |
|
(1 |
) |
|
(4 |
) |
|
(5 |
) |
|
(8 |
) |
|
Net cash provided by (used in) investing
activities |
|
(347 |
) |
|
556 |
|
|
(631 |
) |
|
225 |
|
| FINANCING
ACTIVITIES |
|
|
|
|
| Debt |
|
|
|
|
|
Repayments |
|
(8 |
) |
|
(305 |
) |
|
(31 |
) |
|
(485 |
) |
| Dividends |
|
(32 |
) |
|
(32 |
) |
|
(63 |
) |
|
(63 |
) |
| Funding from
non-controlling interests |
|
4 |
|
|
8 |
|
|
12 |
|
|
8 |
|
| Disbursements to
non-controlling interests |
|
(56 |
) |
|
— |
|
|
(82 |
) |
|
(67 |
) |
| Debt extinguishment
costs |
|
— |
|
|
(26 |
) |
|
— |
|
|
(26 |
) |
|
Net cash used in financing activities |
|
(92 |
) |
|
(355 |
) |
|
(164 |
) |
|
(633 |
) |
|
Effect of exchange rate changes on cash and
equivalents |
|
(1 |
) |
|
— |
|
|
(2 |
) |
|
2 |
|
| Net increase (decrease)
in cash and equivalents |
|
(299 |
) |
|
649 |
|
|
(149 |
) |
|
537 |
|
|
Cash and equivalents at the beginning of
period |
|
2,384 |
|
|
2,277 |
|
|
2,234 |
|
|
2,389 |
|
|
Cash and equivalents at the end of period |
$ |
2,085 |
|
$ |
2,926 |
|
$ |
2,085 |
|
$ |
2,926 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Second Quarter Report 2018
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 June 30, |
As at December 31, |
|
|
|
2018 |
|
2017 |
|
ASSETS |
|
|
| Current assets |
|
|
|
Cash and equivalents (note 14A) |
$ |
2,085 |
|
$ |
2,234 |
|
|
Accounts receivable |
|
194 |
|
|
239 |
|
|
Inventories |
|
1,940 |
|
|
1,890 |
|
|
Other current assets |
|
356 |
|
|
321 |
|
| Total current
assets |
$ |
4,575 |
|
$ |
4,684 |
|
| Non-current assets |
|
|
|
|
|
|
|
Equity in investees (note 12) |
|
1,214 |
|
|
1,213 |
|
|
Property, plant and equipment |
|
13,727 |
|
|
13,806 |
|
|
Goodwill |
|
1,330 |
|
|
1,330 |
|
|
Intangible assets |
|
230 |
|
|
255 |
|
|
Deferred income tax assets |
|
1,072 |
|
|
1,069 |
|
|
Non-current portion of inventory |
|
1,781 |
|
|
1,681 |
|
|
Other assets |
|
1,193 |
|
|
1,270 |
|
|
Total assets |
$ |
25,122 |
|
$ |
25,308 |
|
| LIABILITIES AND
EQUITY |
|
|
|
|
|
|
| Current
liabilities |
|
|
|
|
|
|
|
Accounts payable |
$ |
944 |
|
$ |
1,059 |
|
|
Debt (note 14B) |
|
680 |
|
|
59 |
|
|
Current income tax liabilities |
|
270 |
|
|
298 |
|
|
Other current liabilities |
|
266 |
|
|
331 |
|
| Total current
liabilities |
$ |
2,160 |
|
$ |
1,747 |
|
| Non-current
liabilities |
|
|
|
|
|
|
|
Debt (note 14B) |
|
5,712 |
|
|
6,364 |
|
|
Provisions |
|
3,108 |
|
|
3,141 |
|
|
Deferred income tax liabilities |
|
1,341 |
|
|
1,245 |
|
|
Other liabilities |
|
1,695 |
|
|
1,744 |
|
|
Total liabilities |
$ |
14,016 |
|
$ |
14,241 |
|
| Equity |
|
|
|
|
|
|
|
Capital stock (note 16) |
$ |
20,900 |
|
$ |
20,893 |
|
|
Deficit |
|
(11,701 |
) |
|
(11,759 |
) |
|
Accumulated other comprehensive loss |
|
(164 |
) |
|
(169 |
) |
|
Other |
|
321 |
|
|
321 |
|
|
Total equity attributable to Barrick Gold Corporation
shareholders |
$ |
9,356 |
|
$ |
9,286 |
|
|
Non-controlling interests |
|
1,750 |
|
|
1,781 |
|
|
Total equity |
$ |
11,106 |
|
$ |
11,067 |
|
|
Contingencies and commitments (notes 5 and 17) |
|
|
|
|
|
|
|
Total liabilities and equity |
$ |
25,122 |
|
$ |
25,308 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Second Quarter Report 2018
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 deficit |
Accumulated other comprehensive income (loss)1 |
Other2 |
Total equity attributable to shareholders |
|
|
Non-controlling interests |
|
Total equity |
|
At December 31, 2017 |
1,166,577 |
|
$ |
20,893 |
|
$ |
(11,759 |
) |
$ |
(169 |
) |
$ |
321 |
|
$ |
9,286 |
|
$ |
1,781 |
|
$ |
11,067 |
|
| Impact of
adopting IFRS 15 on January 1, 2018 (note 2B) |
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
64 |
|
|
At January 1, 2018 (restated) |
1,166,577 |
|
$ |
20,893 |
|
$ |
(11,695 |
) |
$ |
(169 |
) |
$ |
321 |
|
$ |
9,350 |
|
$ |
1,781 |
|
$ |
11,131 |
|
| Net
income |
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
— |
|
|
64 |
|
|
52 |
|
|
116 |
|
| Total
other comprehensive income |
— |
|
|
— |
|
|
— |
|
|
5 |
|
|
— |
|
|
5 |
|
|
— |
|
|
5 |
|
|
Total comprehensive income |
— |
|
|
— |
|
|
64 |
|
|
5 |
|
|
— |
|
|
69 |
|
|
52 |
|
|
121 |
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
— |
|
|
— |
|
|
(63 |
) |
|
— |
|
|
— |
|
|
(63 |
) |
|
— |
|
|
(63 |
) |
| Issued on
exercise of stock options |
11 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Funding
from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12 |
|
|
12 |
|
| Other
decrease in non-controlling interest |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(95 |
) |
|
(95 |
) |
|
Dividend reinvestment plan (note 16) |
571 |
|
|
7 |
|
|
(7 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total
transactions with owners |
582 |
|
|
7 |
|
|
(70 |
) |
|
— |
|
|
— |
|
|
(63 |
) |
|
(83 |
) |
|
(146 |
) |
|
At June 30, 2018 |
1,167,159 |
|
$ |
20,900 |
|
$ |
(11,701 |
) |
$ |
(164 |
) |
$ |
321 |
|
$ |
9,356 |
|
$ |
1,750 |
|
$ |
11,106 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2017 |
1,165,574 |
|
$ |
20,877 |
|
$ |
(13,074 |
) |
$ |
(189 |
) |
$ |
321 |
|
$ |
7,935 |
|
$ |
2,378 |
|
$ |
10,313 |
|
| Net
income |
— |
|
|
— |
|
|
1,763 |
|
|
— |
|
|
— |
|
|
1,763 |
|
|
263 |
|
|
2,026 |
|
| Total
other comprehensive income |
— |
|
|
— |
|
|
— |
|
|
7 |
|
|
— |
|
|
7 |
|
|
— |
|
|
7 |
|
|
Total comprehensive income |
— |
|
|
— |
|
|
1,763 |
|
|
7 |
|
|
— |
|
|
1,770 |
|
|
263 |
|
|
2,033 |
|
|
Transactions with owners |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
— |
|
|
— |
|
|
(63 |
) |
|
— |
|
|
— |
|
|
(63 |
) |
|
— |
|
|
(63 |
) |
| Decrease
in non-controlling interest (note 4C) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(493 |
) |
|
(493 |
) |
| Funding
from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8 |
|
|
8 |
|
| Other
decrease in non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(113 |
) |
|
(113 |
) |
|
Dividend reinvestment plan |
429 |
|
|
8 |
|
|
(8 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
Total transactions with owners |
429 |
|
|
8 |
|
|
(71 |
) |
|
— |
|
|
— |
|
|
(63 |
) |
|
(598 |
) |
|
(661 |
) |
|
At June 30, 2017 |
1,166,003 |
|
$ |
20,885 |
|
$ |
(11,382 |
) |
$ |
(182 |
) |
$ |
321 |
|
$ |
9,642 |
|
$ |
2,043 |
|
$ |
11,685 |
|
1 Includes cumulative translation losses at June 30,
2018: $72 million (June 30, 2017: $67 million).2 Includes
additional paid-in capital as at June 30, 2018: $283 million
(December 31, 2017: $283 million; June 30, 2017: $283
million) and convertible borrowings - equity component as at
June 30, 2018: $38 million (December 31, 2017: $38
million; June 30, 2017: $38 million).The notes to these
unaudited condensed interim financial statements, which are
contained in the Second Quarter Report 2018 available on our
website are an integral part of these consolidated financial
statements.
HEAD OFFICEBarrick Gold
CorporationBrookfield PlaceTD Canada Trust Tower161 Bay
Street, Suite 3700Toronto, Ontario M5J 2S1
Telephone: +1 416 861-9911Toll-free:
1-800-720-7415Fax: +1 416 861-2492Email:
investor@barrick.comWebsite: www.barrick.com
SHARES
LISTEDABXThe New York Stock ExchangeThe
Toronto Stock Exchange
TRANSFER AGENTS AND
REGISTRARSAST Trust Company (Canada)P.O.
Box 700, Postal Station BMontreal, Quebec H3B
3K3orAmerican Stock Transfer & Trust Company,
LLC6201 – 15 AvenueBrooklyn, New York 11219
Telephone: 1-800-387-0825Fax:
1-888-249-6189Email: inquiries@astfinancial.comWebsite:
www.astfinancial.com
INVESTOR CONTACTDeni
NicoskiSenior Vice PresidentInvestor RelationsTelephone:
+1 416 307-7474Email: dnicoski@barrick.com
MEDIA CONTACTAndy
LloydSenior Vice PresidentCommunicationsTelephone: +1 416
307-7414Email: alloyd@barrick.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATIONCertain information contained or incorporated
by reference in this press release, 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", "plan", "assume", "intend", "project", "pursue",
"goal", "continue", "budget", "estimate", "potential", "may",
"will", "can", "should", "could", "would" and similar expressions
identify forward-looking statements. In particular, this press
release contains forward-looking statements including, without
limitation, with respect to: (i) Barrick’s forward-looking
production guidance; (ii) estimates of future cost of sales per
ounce for gold and per pound for copper, all-in-sustaining costs
per ounce/pound, cash costs per ounce, and C1 cash costs per pound;
(iii) projected capital, operating, and exploration expenditures;
(iv) completion and outcome of current and future studies at Lama;
(v) the existence of future opportunities for Barrick and Shandong
Gold to collaborate; (vi) targeted cost reductions; (vii) mine life
and production rates; (viii) potential mineralization, including
with respect to Fourmile, Goldrush and Turquoise Ridge, and metal
or mineral recoveries; (ix) anticipated gold production from the
Deep South Project and the third shaft project at Turquoise Ridge;
(x) the potential for plant expansion at Pueblo Viejo to increase
throughput by 50% and convert resources to reserves; (xi) our
pipeline of high confidence projects at or near existing
operations; (xii) the potential to identify new reserves and
resources, and our ability to convert resources into reserves;
(xiii) asset sales, joint ventures, and partnerships; and (xiv)
expectations regarding future price assumptions, financial
performance, and other outlook or guidance.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions including material
estimates and assumptions related to the factors set forth below
that, while considered reasonable by the Company as at the date of
this press release in light of management’s experience and
perception of current conditions and expected developments, 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, and undue reliance
should not be placed on such statements and information. 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, natural gas, and electricity); the
speculative nature of mineral exploration and development; changes
in mineral production performance, exploitation, and exploration
successes; risks associated with the fact that certain
Best-in-Class initiatives are still in the early stages of
evaluation, and additional engineering and other analysis is
required to fully assess their impact; risks associated with the
ongoing implementation of Barrick’s digital transformation
initiative, and the ability of the projects under this initiative
to meet the Company’s capital allocation objectives; the duration
of the Tanzanian ban on mineral concentrate exports; the ultimate
terms of any definitive agreement between Acacia and the Government
of Tanzania to resolve a dispute relating to the imposition of the
concentrate export ban and allegations by the Government of
Tanzania that Acacia under-declared the metal content of
concentrate exports from Tanzania; the status of certain tax
re-assessments by the Tanzanian government; the manner in which
amendments to the 2010 Mining Act (Tanzania) increasing the royalty
rate applicable to metallic minerals such as gold, copper and
silver to 6% (from 4%), the new Finance Act (Tanzania) imposing a
1% clearing fee on the value of all minerals exported from Tanzania
from July 1, 2017 and the new Mining Regulations announced by
Government of Tanzania in January 2018 will be implemented and the
impact of these and other legislative changes on Acacia; whether
Barrick will successfully negotiate an agreement with respect to
the dispute between Acacia and the Government of Tanzania and
whether Acacia will approve the terms of any such final agreement;
the benefits expected from recent transactions being realized;
diminishing quantities or grades of reserves; increased costs,
delays, suspensions and technical challenges associated with the
construction of capital projects; operating or technical
difficulties in connection with mining or development activities,
including geotechnical challenges and disruptions in the
maintenance or provision of required infrastructure and information
technology systems; 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; uncertainty
whether some or all of the Best-in-Class initiatives, targeted
investments and projects will meet the Company’s capital allocation
objectives and internal hurdle rate; 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 ratings; the impact of inflation;
fluctuations in the currency markets; changes in U.S. dollar
interest rates; risks arising from holding derivative instruments;
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 or its
affiliates do or may carry on business in the future; lack of
certainty with respect to foreign legal systems, corruption and
other factors that are inconsistent with the rule of law; damage to
the Company’s reputation due to the actual or perceived occurrence
of any number of events, including negative publicity with respect
to the Company’s handling of environmental matters or dealings with
community groups, whether true or not; the possibility that future
exploration results will not be consistent with the Company’s
expectations; risks that exploration data may be incomplete and
considerable additional work may be required to complete further
evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; litigation and
legal and administrative proceedings; 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;
risks associated with the fact that certain of the initiatives
described in this press release are still in the early stages and
may not materialize; our ability to successfully integrate
acquisitions or complete divestitures; risks associated with
working with partners in jointly controlled assets; employee
relations including loss of key employees; increased costs and
physical risks, including extreme weather events and resource
shortages, related to climate change; 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 press release 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 more detailed discussion of
some of the factors underlying forward-looking statements and the
risks that may affect Barrick’s ability to achieve the expectations
set forth in the forward-looking statements contained in this press
release.
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.
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