Capturing the benefit of higher gold prices through agile
management and operational efficiency, Barrick Gold Corporation
(NYSE:GOLD)(TSX:ABX) increased its operating cash flow by 80%
quarter-on-quarter to $1.9 billion and free cash flow1 by 151% to
$1.3 billion in the third quarter of 2020 — a record level of
quarterly free cash flow for the company. Net earnings per share
was 50 cents, while adjusted net earnings per share2 was 78% higher
than the prior quarter at 41 cents. Debt net of cash was reduced by
a further 71% to $417 million, compared to $1.4 billion in the
prior quarter, and the quarterly dividend was increased again, the
third time in the past year, rising by 12.5% to 9 cents per share.
President and chief executive Mark Bristow said that two
quarters into the Covid-19 pandemic, it was clear how effectively
Barrick had been dealing with the impact of the virus on its
business, its people and its communities.
“As today’s results show, in the face of unprecedented
challenges we have succeeded in beating our earnings consensus,
reinforcing our 10-year plan and capitalizing on the gold price to
maintain an industry-leading balance sheet. Our year-to-date gold
production of 3.6 million ounces keeps Barrick on track to achieve
our guidance of between 4.6 and 5.0 million ounces for the year,”
he said.
Of the group’s capital projects for the assets we operate, only
Veladero’s cross-Andean powerline and phase 6 expansion were
stalled as a result of Argentina's Covid-19 response and further
complicated by the onset of winter, with these projects now
restarted. The construction of the third shaft at Turquoise Ridge,
the twin declines at Goldrush and the underground mine at Gounkoto,
as well as Hemlo’s transition to contractor underground mining, the
process plant and tailings expansion plan at Pueblo Viejo, the
commissioning of the group’s first solar power plant at Loulo and
the resumption of underground mining at Bulyanhulu were not
interrupted.
In October, Twiga Minerals Corporation, the groundbreaking joint
venture between Barrick and the government of Tanzania, paid a
maiden dividend of $250 million. Bristow said the revived Tanzanian
mines, North Mara and Bulyanhulu in combination, had the potential
to become Barrick’s seventh Tier One asset. A Tier One mine is
defined as one that can produce more than 500,000 ounces of gold
annually for at least 10 years in the lower half of the industry’s
cost curve.
Subsequent to the third quarter, Barrick and the government of
Papua New Guinea announced that they had agreed in principle on the
formation of a new partnership to operate the Porgera mine that is
currently on care and maintenance. Under the conceptual agreement,
which is still to be finalized, Barrick Niugini Limited will remain
the operator, the government will acquire a major share of the
equity, and the two sides will agree on a equitable sharing of
economic benefits.
Bristow said Barrick’s restructuring and portfolio
rationalization had made it a more streamlined business with a much
improved exploration strategy, particularly in its Latin American
region, which should uncover new business opportunities. In the
meantime, exploration around its Tier One assets continued to
deliver organic growth and the company was expecting to grow
mineral resources at most of its key assets.
“Barrick’s consistently strong performance since the merger has
more than validated our belief that a combination of the best
assets with the best people would deliver the best returns. It also
shows that a business flourishes when it is driven by a clear
strategy and not by the whims of the market,” Bristow said.
Key Performance Indicators
- Another solid quarter positions Barrick to deliver on annual
production guidance
- Higher gold prices drive strong cash flow and increased royalty
costs
- Operating cash flow of $1.9 billion and record free cash flow1
of more than $1.3 billion
- Debt net of cash reduced by 71% to $0.4 billion with no
significant maturities until 2033
- Strong operating performance across three quarters highlights
asset quality
- Agile organizational structure continues to minimize the impact
of Covid-19
- Consistent delivery from copper operations with costs tracking
towards low end of guidance range
- Net earnings per share of 50 cents; adjusted net earnings per
share2 up 78% to 41 cents for the quarter
- Twiga partnership in Tanzania pays maiden dividend with all
stockpiled concentrate sold
- Continued improvement in safety across the group year-on-year
for both Lost Time and Total Injury Frequency rates
- Capital project teams remobilized in Argentina while all other
capital projects remain on track
- Focus on exploration and organic growth highlights upside
potential across Tier One11 portfolio
- Significant stratiform mineralization connects Goldrush to
Fourmile
- Ongoing portfolio rationalization converts closure properties
to value opportunities
- Barrick declares $0.09 quarterly dividend per share
Financial and Operating
Highlights
Financial Results |
Q3 2020 |
Q2 2020 |
Q3 2019 |
Realized gold price3,4 ($ per ounce) |
1,926 |
|
1,725 |
|
1,476 |
|
Net earnings5 ($
millions) |
882 |
|
357 |
|
2,277 |
|
Adjusted net earnings2 ($
millions) |
726 |
|
415 |
|
264 |
|
Net cash provided by operating
activities($ millions) |
1,859 |
|
1,031 |
|
1,004 |
|
Free cash flow1 ($
millions) |
1,311 |
|
522 |
|
502 |
|
Net earnings per share
($) |
0.50 |
|
0.20 |
|
1.30 |
|
Adjusted net earnings per
share2($) |
0.41 |
|
0.23 |
|
0.15 |
|
Attributable capital expenditures6($ millions) |
436 |
|
402 |
|
397 |
|
Operating
ResultsGold |
Q3 2020 |
Q2 2020 |
Q3 2019 |
Production4 (000s of ounces) |
1,155 |
|
1,149 |
|
1,306 |
|
Cost of sales (Barrick's
share)4,7 ($ per ounce) |
1,065 |
|
1,075 |
|
1,065 |
|
Total cash costs4,8 ($ per
ounce) |
696 |
|
716 |
|
710 |
|
All-in sustaining costs4,8 ($
per ounce) |
966 |
|
1,031 |
|
984 |
|
Copper |
|
|
|
Production9 (millions of
pounds) |
103 |
|
120 |
|
112 |
|
Cost of sales (Barrick's
share)9,10 ($ per pound) |
1.97 |
|
2.08 |
|
2.00 |
|
C1 cash costs9,21 ($ per
pound) |
1.45 |
|
1.55 |
|
1.62 |
|
All-in
sustaining costs9,21 ($ per pound) |
2.31 |
|
2.15 |
|
2.58 |
|
Q3 2020 RESULTS PRESENTATION Webinar and Conference
Call
President and CEO Mark Bristow will host a virtual presentation
on the results today at 11:00 EST/16:00 UTC, with an interactive
webinar linked to a conference call. Participants will be able to
ask questions.
Go to the webinarUS and Canada (toll-free) 1 800 319 4610UK
(toll-free) 0808 101 2791International (toll) +1 416 915 3239
The Q3 2020 presentation materials will be available on
Barrick’s website at www.barrick.com and the webinar will remain on
the website for later viewing.
BARRICK DECLARES INCREASED DIVIDEND
Barrick today announced that its Board of Directors has
declared a dividend for the third quarter of 2020 of $0.09
per share, a 12.5% increase on the previous quarter’s dividend,
payable on December 15, 2020, to shareholders of record at the
close of business on November 30, 2020.12
Senior executive vice-president and chief financial officer
Graham Shuttleworth said that this represents the third increase in
the quarterly dividend in the past year and that Barrick’s
quarterly dividend has tripled since the announcement of the
Barrick-Randgold merger in September 2018, reflecting Barrick’s
continued strong financial performance.
“The Board believes that the current dividend increase is
sustainable and is reflective of the ongoing robust performance of
our operations and continued improvement in the strength of our
balance sheet, with total liquidity of $7.7 billion, including a
cash balance of $4.7 billion, and a debt net of cash position of
just $0.4 billion as of the end of the third quarter, as well as no
material debt repayments due before 2033,” said Shuttleworth.
ANNE KABAGAMBE APPOINTED TO BARRICK’S BOARD
Barrick has appointed Anne Kabagambe to its Board of
Directors as an independent director.
Ms Kabagambe has 35 years of experience spanning a diverse range
of senior leadership positions in international institutions. She
is a former Executive Director of the World Bank Group where she
served from 2016 to 2020, representing the interests of 22
Sub-Saharan African countries13, including Tanzania and Zambia,
where Barrick has gold and copper operations. While at the World
Bank, she sat on the Development Effectiveness Committee, the
Budget Committee and the Pension Benefits Committee. Ms Kabagambe
also Co-Chaired the World Bank Board’s Gender Working Group and is
a strong advocate for the advancement of women and a champion of
diversity and inclusion.
Prior to the World Bank, she spent 27 years at the African
Development Bank, where she built an extensive network within
Africa and other parts of the world. During this time, she helped
develop cooperative agreements with Asian countries and held the
position of Chief of Staff for the African Development Bank
President. Ms Kabagambe has also served on the boards of the Africa
American Institute (AAI) and Junior Achievement (JA) Africa.
She has an undergraduate degree from the University of
California at San Diego (UCSD), master’s degrees in Public Policy
from Columbia University’s School of International and Public
Affairs and George Washington University, and also obtained
post-graduate diplomas from Harvard University’s John F. Kennedy
School of Government and the Cranfield School of
Management.
Barrick Executive Chairman John Thornton said Ms Kabagambe would
strengthen the Board and bring an independent understanding of
doing business internationally, informed by her experience in
engaging with governments, the private sector and civil society and
in particular her knowledge of the global resource, banking and
education sectors.
FINDING AND DEVELOPING THE TALENT TO TAKE BARRICK INTO
THE FUTURE
A modern mining business needs people who share its
vision and its values, and are entrepreneurial, agile, alive to
technological and societal changes, and profit-orientated. That is
why, in an industry traditionally dominated by aging males, Barrick
is building an employee corps with its eye on the
future.
Barrick has a long tradition of hiring locally for both
operational and managerial roles, in recognition of its host
countries’ status as important stakeholders in the business.
Current staffing levels of host country nationals in management
roles are 80% in Africa and Middle East (AME), 63% in Latin America
and Asia Pacific (LATAM & AP), and 97% in North America
(NA).
Barrick has now also embarked on a drive to recruit more young
people and women. In the year to date, the proportion of new-hires
under the age of 30 were 22% in AME, 31% in NA and 36% in LATAM
& AP. In NA, where 16% of the employees are women,
females accounted for 26% of new hires year to date. In LATAM &
AP, where 10% of all positions are held by women, hiring rates were
18% in Q1, 33% in Q2 and 15% in Q3, reflecting the region’s
improving ability to source and place women. The AME region has
cultural obstacles to the employment of women but there too the
situation is improving with new placements up to 8% from a 6% base.
It is worth noting that a high proportion of the female employees
in this region hold managerial positions in geology, engineering
and finance.
“We invest in developing our talent to position us for future
growth,” says group human resources executive Darian Rich. “We
build their leadership skills and guide their career advancement
through tailored executive and management development programs
designed in partnership with leading universities in Africa, Europe
and the US. During the pandemic, we have continued to offer these
programs through remote learning courses.”
Barrick promotes a culture of continuous learning through
groupwide programs designed to develop a foundation of operational
knowledge and management skills. These include:
- the Compass program, which provides structured training and
mentorship for early-career technical employees;
- the Greenfields Talent program, which provides new engineering
graduates with underground mining experience; and
- the Finance for Business Leaders program, which encourages an
ownership mindset and integrates commercial principles and
technical skills.
While many companies have cancelled their internship programs,
Nevada Gold Mines continued to secure the most talented graduates
through attractive development opportunities, and strengthened its
future pool of professional candidates, including 33% females in
this year’s cohort.
Barrick also offers technical skills and apprenticeship
training, developed in modules and constantly updated.
The executive team and senior leaders recently held a two-day
talent and succession planning review to ensure that the group has
the right skills in the right jobs to drive business priorities
across the regions and sites. The review also identified potential
future leaders for continuing performance assessment and access to
individual development plans.
“Barrick’s commitment to supporting education extends beyond its
operations,” says Rich. “Nevada Gold Mines recently announced a
$2.2 million investment in digital education for schools in
partnership with Discovery Education and the Nevada Department of
Education. Access to Discovery’s award-winning K-12 platform keeps
students learning whether they are at home or at school.”
WORLD-CLASS GEOLOGISTS LEAD BARRICK’S GLOBAL
DRIVE
Since the Barrick-Randgold merger reintroduced geology
as the foundation of the business, the company has launched a new
exploration strategy that is being implemented by rebuilt and
reinvigorated exploration teams in each of its
regions.
Rod Quick, Barrick’s mineral resource management and evaluation
executive, explains that this strategy has multiple elements that
all need to be in balance to deliver on the group’s business plan
for growth and long-term sustainability.
These include linking geology and mineral resource management
closely to supply projects of a short- to medium-term nature that
could help optimize Life-of-Mine plans and smooth out dips in the
production profile.
Secondly, there is the hunt for the next addition to Barrick’s
Tier One11 portfolio, which already boasts six of these world-class
mines. “Brownfields exploration optimizes our existing assets; a
new discovery represents pure growth,” says Quick.
Then there is also the optimization of the value of major
undeveloped projects. A prime example of these is Donlin, where a
re-review of the model, based on fundamental geological
observations, will improve and de-risk the resource model leading
to an improved mine plan.
With competition for quality assets becoming more intense, the
chase is on to find emerging opportunities early in their value
chain and then to secure them by an earn-in or even outright
purchase. Historically, Barrick has done well at this, with
Goldstrike, Pierina, Loulo and Kibali all outstanding examples of
geology-led acquisitions. But Rob Krcmarov, Barrick’s exploration
and growth executive, cautions that this only works if the
characteristics of the underlying orebody are well understood and
there is a real upside.
“Short and long-term integrated planning is fundamental to our
business culture, and we use the resource triangle as a tool to
manage our deliverables,” he says.
“In the final analysis, however, it’s people and ideas that make
discoveries, not an exploration process. That’s why we expect more
than technical excellence from our geologists. They also need to be
entrepreneurial, imaginative and creative — and, as they are often
our first point of contact with potential host communities, they
also have to grasp the social component of our licence to
operate.”
SAP IMPLEMENTATION IN NEVADA MARKS AN IMPORTANT
MILESTONE IN BARRICK’S DIGITAL TRANSFORMATION
Barrick’s new transactional system, SAP S4 HANA, has
gone live at Nevada Gold Mines and will be rolled out across the
entire group in the course of 2021.
The implementation lays one of the key foundations for the group
to reap the benefits of becoming truly digital and will enable a
new level of real-time decision-making as well as a more agile and
business-led approach to systems and data-driven initiatives.
The project stayed on track with a very ambitious timeline
despite the obvious challenges presented by the pandemic, with the
legacy Newmont sites going live on August 1 and the rest of Nevada
Gold Mines on October 1. Head of group systems integration, Nico
Hoffman, says that “by keeping the global design standardized and
focused on getting the basics right, we have set up the rest of the
implementations for success and paved the way for them to be
completed on time”.
Training adopted a new approach, formulated during Barrick’s
strategy sessions earlier this year. This involved identifying
particularly talented individuals who were added to a pool of
‘super-users’ inside the various business functions. These
users take up ownership of the system by acting as the first line
of support for issues as well as by driving continuous incremental
improvement of the core application. Almost immediately they began
delivering refinements and improvements which will be included in
future rollouts.
“This project demonstrates the value of having both a very clear
end goal and the correct level of executive functional sponsorship
on board from the very beginning and we look forward to seeing the
results of applying this to future developments,” Hoffman said.
The SAP rollout coincides with the start of a number of equally
ambitious initiatives including a common global data platform, a
new financial reporting and planning system, as well as various
operational technology enhancements, rationalizations and
unifications. It also signals the end of siloed local
customizations which previously stood in the way of one true global
solution.
GLOBAL CLOSURE STRATEGY: PLAN FOR THE END BEFORE THE
BEGINNING
The mining industry has traditionally dealt with the
issue of mine closures by kicking the can down the road: delaying
the inevitable for as long as possible, usually through a series of
compliance adjustments.
This is clearly not a sustainable approach, says Barrick
president and chief executive Mark Bristow. “We believe that how we
close our mines is as important as how we build and operate them,
and that is why we plan their closure before we even start
designing them, and integrate that plan across all the stages of
their lives,” he says.
Barrick has a number of legacy sites, in part acquired over the
years through mergers and acquisitions. To ensure their successful
closure in a consistent manner, the company has adopted a new
Global Closure Standard, which group sustainability executive Grant
Beringer describes as the most progressive in the mining industry,
noting that it has drawn not only from Barrick/Randgold’s
experience, but also from inputs and advice provided by multiple
international authorities.
Its key objectives are to find passive solutions for long-term
water management; to prepare sites for a beneficial alternative use
and possible divestiture; and to ensure that tailings storage
facilities meet or exceed international safety standards.
The new strategy has already delivered significant successes,
including the sale of Barrick’s interests in the Morila mine in
Mali, the Eskay Creek mine in British Columbia, the Bullfrog mine
in southern Nevada, and mining claims in South Dakota. Other
divestiture opportunities are being discussed.
These divestitures are expected to deliver value and add to the
$1.5 billion that Barrick has already realized through its
portfolio rationalization following the merger with Randgold.
They are also allowing the company to tighten its focus on Tier One
assets — those mines capable of producing more than 500,000 ounces
of gold annually for at least 10 years in the lower half of the
industry’s cost curve.
“It’s worth noting that while the divestiture sites do not meet
our investment criteria, they may have a geological potential that
could be realized under different owners with the necessary
technical and financial capacity. In those cases, the host country
and communities will continue to reap economic benefits when these
sites are returned to production by new operators,” Bristow
says.
Catherine Raw, chief operating officer for North America
explains that “the closure strategy has also created new business
opportunities for Barrick, like the Golden Sunlight mine tailings
reprocessing project. This involves the conversion of waste
material into sulphur feedstocks for Nevada Gold Mines’ roasters
and autoclaves while using the leftover benign material as pit
backfill. This innovative project will reduce environmental
liabilities and thus cut closure costs at Golden Sunlight while
creating more value for Nevada Gold Mines and other
stakeholders”.
In Peru, Barrick has signed a water transfer agreement with the
Ministry of Agriculture under which the company will fund the
construction of an $11 million pipeline from the White Andes to the
communities around the Pierina mine. This will make these
communities independent of the water supply from Pierina by 2024 —
yet another example of how a thoughtfully planned closure can leave
a lasting benefit for its hosts.
Closed Barrick properties are also being used to conduct cutting
edge scientific research, including the fundamental neutrino and
dark matter research at the Sanford Underground Research Facility
located in the underground workings of the former Homestake gold
mine in Lead, South Dakota. Homestake was the largest and deepest
gold mine in North America, producing approximately 41 million
ounces of gold over its 126-year lifetime. The mine now provides a
near-perfect environment for experiments that need to escape cosmic
radiation that can interfere with the detection of rare physics
events.
“Our global closure strategy is in fact a process of beneficial
rationalization in which old problems are converted into new
opportunities, benefiting all our stakeholders,” Bristow says.
MANAGING BY WALKING ABOUT
Mines cannot be managed effectively by remote control.
That’s why after last year’s merger, Barrick’s head office was
converted into a much smaller corporate hub providing specialized
services while operational management was transferred to the
mines.
The new decentralized structure — one of the flattest in the
extractive industries for a business of Barrick’s size — means that
senior executives directly engage with operations and employees,
whom they learn to know personally by name as well as skill-set. It
also gives them a first-hand insight into the engine rooms that
drive the business, a better perspective on the challenges and
opportunities at each site, a chance for best-practice sharing and
a forum for collective decision-making.
For the employees, personal access to Barrick’s leadership team
provides a platform to propose suggestions, raise and debate
issues, contribute to decision-making and reinforce their role in
living Barrick’s core values and delivering on its
objectives.Barrick executives visit all the operations in each of
the regions at least once a quarter for an in-depth discussion with
employees on business execution, safety and environmental
performance and the status of key projects. They also use these
visits as an opportunity to interface with community leaders.
During Covid-19, this engagement has continued — both on a
virtual basis and in person. It's these relationships that
have played a significant part in Barrick’s ability to ensure
both prompt and effective responses to the pandemic across its
portfolio of operations.
PIONEERING KIBALI CONTINUES TO POINT THE
WAY
The Kibali mine is on track to deliver at the upper end
of its 2020 guidance, says president and chief executive Mark
Bristow.
Kibali was the first underground gold mine in the DRC and is one
of the largest in the world. It is a global leader in automation
and continues to improve efficiency and productivity through
ongoing technological innovation. In the third quarter it set a new
ore delivery record from underground, exceeding nameplate for the
first time since the shaft was commissioned in 2018.
“Automation is often associated with reduced employment but we
use it as an opportunity to further upskill our workers and to
reduce our need for expatriate specialists. It is worth noting that
Kibali — one of Barrick’s elite corps of Tier One mines — is led by
a predominantly Congolese management team in line with our policy
of employing and advancing host country nationals,” Bristow
said.
A Tier One mine is one capable of producing at least 500,000
ounces of gold annually for at least 10 years in the lower half of
the industry’s cost profile. Bristow said brownfields exploration
was extending Kibali’s life by replacing reserves depleted by
mining. Barrick’s exploration teams are also hunting for the next
Kibali elsewhere in the DRC.
During the past quarter, battery technology was successfully
integrated into the Kibali power grid to augment the mine’s three
hydropower stations and offset the cyclical load of the winder. In
line with Barrick’s global move to cleaner energy sources, the new
technology will further reduce the mine’s carbon footprint and use
of thermal power.
Following a recent meeting with President Tshisekedi, Bristow
said they had agreed that Kibali had brought a thriving local
economy to what was previously one of the most deprived regions in
the DRC.
“The continuing paved extension to the Durba road will provide
construction work for local contractors for the next three
years. Community support continues to be reinforced through
other initiatives such as the Renzi agribusiness project and the
planned palm oil project. We also remain committed to transferring
skills to the community, and the upgrading of the Kokiza Training
Centre for engineers is scheduled to start later this year,” he
said.
Additionally, utility buildings initially built as isolation
wards during the Ebola outbreak and subsequently used as a
quarantine centre for Covid-19 cases, will now be transitioned to a
tropical disease centre to serve local communities.
STRONG PARTNERSHIPS IN MALI SUPPORT ROBUST PRODUCTION
PERFORMANCE
The Loulo-Gounkoto complex remains on track to meet the
upper end of its 2020 guidance in the face of multiple challenges
including a military coup in Mali.
Barrick president and chief executive Mark Bristow attributed
this performance to the company’s long-established relationships
with partners in Mali and its philosophy of sharing the benefits it
creates with its local stakeholders. Over the past 24 years,
Barrick and its legacy company Randgold Resources have contributed
$7.4 billion to the Malian economy in the form of taxes, royalties,
salaries and payments to local suppliers. So far this year,
Loulo-Gounkoto has spent $275 million with local contractors and
suppliers.
The development of the complex’s third underground mine at
Gounkoto is on track to deliver its first ore tonnes in the second
quarter of 2021. Meanwhile, Barrick’s first solar power plant has
been commissioned and is ramping up to deliver 20MW into the
microgrid, in line with the company’s strategy of transitioning to
cleaner forms of energy.
The complex has paid dividends totalling $160 million in the
year to date with Loulo paying a maiden dividend in the quarter on
the back of the mine’s convention amendment.
Barrick has agreed to sell its other operation in Mali, Morila,
to Mali Lithium with the government retaining its 20% stake. Morila
was the mine which laid the foundation for Randgold’s success,
producing almost 7 million ounces of gold over its life.
Bristow said the transaction created the opportunity for Morila’s
infrastructure and assets to be redeployed for the benefit of its
employees, surrounding communities and the country.
“We’ve always had great confidence in Mali and its people, hence
our continuing commitment to the country. It’s gratifying to note
that Mali is dealing with its political challenges and has already
returned to a civilian-led transitional government. We look forward
to being part of its future,” Bristow said.
Appendix 12020
Operating and Capital Expenditure Guidance
GOLD PRODUCTION AND COSTS |
|
2020 forecastattributable production(000s oz) |
2020 forecast costof sales14 ($/oz) |
2020 forecast totalcash costs8 ($/oz) |
2020 forecast all-insustaining costs8 ($/oz) |
Carlin (61.5%)15 |
1,000 -
1,050 |
920 -
970 |
760 -
810 |
1,000 -
1,050 |
Cortez (61.5%) |
450 -
480 |
980 -
1,030 |
640 -
690 |
910 -
960 |
Turquoise Ridge (61.5%) |
430 -
460 |
900 -
950 |
540 -
590 |
690 -
740 |
Phoenix (61.5%) |
100 -
120 |
1,850 -
1,900 |
700 -
750 |
920 -
970 |
Long Canyon (61.5%) |
130 - 150 |
910 - 960 |
240 - 290 |
450 - 500 |
Nevada Gold Mines (61.5%) |
2,100 -
2,250 |
970 -
1,020 |
660 -
710 |
880 -
930 |
Hemlo |
200 - 220 |
960 - 1,010 |
800 - 850 |
1,200 - 1,250 |
North America |
2,300 -
2,450 |
970 -
1,020 |
660 -
710 |
900 -
950 |
|
|
|
|
|
Pueblo Viejo (60%) |
530 -
580 |
840 -
890 |
520 -
570 |
720 -
770 |
Veladero (50%) |
240 -
270 |
1,220 -
1,270 |
670 -
720 |
1,250 -
1,300 |
Porgera (47.5%)16 |
|
|
|
|
Latin America & Asia Pacific |
800 -
900 |
930 -
980 |
610 -
660 |
890 -
940 |
|
|
|
|
|
Loulo-Gounkoto (80%) |
500 -
540 |
1,050 -
1,100 |
620 -
670 |
970 -
1,020 |
Kibali (45%) |
340 -
370 |
1,030 -
1,080 |
600 -
650 |
790 -
840 |
North Mara (84%)17 |
240 -
270 |
750 -
800 |
570 -
620 |
830 -
880 |
Tongon (89.7%) |
240 -
260 |
1,390 -
1,440 |
680 -
730 |
740 -
790 |
Bulyanhulu (84%)17 |
30 -
50 |
1,210 -
1,260 |
790 -
840 |
1,110 -
1,160 |
Buzwagi (84%)17 |
80 - 100 |
850 - 900 |
820 - 870 |
850 - 900 |
Africa & Middle East |
1,450 -
1,600 |
1,040 -
1,090 |
640 -
690 |
870 -
920 |
|
|
|
|
|
Total Attributable to Barrick18,19,20 |
4,600 -
5,000 |
980 -
1,030 |
650 -
700 |
920 -
970 |
|
|
|
|
|
COPPER PRODUCTION AND COSTS |
|
2020 forecastattributable production(Mlbs) |
2020 forecast costof sales14 ($/lb) |
2020 forecast C1cash costs21 ($/lb) |
2020 forecast all-insustaining costs21 ($/lb) |
Lumwana |
250 -
280 |
2.20 -
2.40 |
1.50 -
1.70 |
2.30 -
2.60 |
Zaldívar (50%) |
120 -
135 |
2.40 -
2.70 |
1.65 -
1.85 |
2.30 -
2.60 |
Jabal Sayid (50%) |
60 - 70 |
1.75 - 2.00 |
1.40 - 1.60 |
1.50 - 1.70 |
Total Copper20 |
440 -
500 |
2.10 -
2.40 |
1.50 -
1.80 |
2.20 -
2.50 |
|
|
|
|
|
ATTRIBUTABLE CAPITAL EXPENDITURES |
|
|
|
|
($ millions) |
|
|
|
Attributable minesite sustaining |
1,300 - 1,500 |
|
|
|
Attributable project |
300 - 400 |
|
|
|
Total attributable capital expenditures22 |
1,600 - 1,900 |
|
|
|
|
|
|
|
|
2020 Outlook Assumptions and Economic Sensitivity
Analysis23
|
2020 GuidanceAssumption |
Hypothetical Change |
Impact on EBITDA(millions)24 |
Impact on TCC/C1 Cash Costsand AISC8,21 |
Gold price sensitivity25 |
$1,350/oz |
+$100/oz |
+$653 |
+$4/oz |
|
$1,350/oz |
-$100/oz |
-$650 |
-$4/oz |
Copper price
sensitivity |
$2.75/lb |
+/-$0.50/lb |
+/-$124 |
+/-$0.02/lb |
|
|
|
|
|
Appendix 2Production and Cost Summary -
Gold
|
For the three months ended |
|
|
|
9/30/20 |
6/30/20 |
% Change |
|
|
9/30/19 |
% Change |
|
|
Nevada
Gold Mines LLC (61.5%)a |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
538 |
521 |
3 |
|
% |
535 |
1 |
|
% |
Gold produced (000s oz 100% basis) |
875 |
847 |
3 |
|
% |
870 |
1 |
|
% |
Cost of sales ($/oz) |
1,060 |
1,055 |
0 |
|
% |
1,027 |
3 |
|
% |
Total cash costs ($/oz)b |
723 |
728 |
(1 |
) |
% |
693 |
4 |
|
% |
All-in sustaining costs ($/oz)b |
956 |
985 |
(3 |
) |
% |
946 |
1 |
|
% |
Carlin (61.5%)c |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
276 |
235 |
17 |
|
% |
278 |
(1 |
) |
% |
Gold produced (000s oz 100% basis) |
448 |
382 |
17 |
|
% |
452 |
(1 |
) |
% |
Cost of sales ($/oz) |
985 |
1,037 |
(5 |
) |
% |
1,007 |
(2 |
) |
% |
Total cash costs ($/oz)b |
800 |
850 |
(6 |
) |
% |
775 |
3 |
|
% |
All-in sustaining costs ($/oz)b |
1,036 |
1,130 |
(8 |
) |
% |
1,014 |
2 |
|
% |
Cortez (61.5%)d |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
113 |
132 |
(14 |
) |
% |
126 |
(10 |
) |
% |
Gold produced (000s oz 100% basis) |
184 |
215 |
(14 |
) |
% |
205 |
(10 |
) |
% |
Cost of sales ($/oz) |
1,060 |
870 |
22 |
|
% |
829 |
28 |
|
% |
Total cash costs ($/oz)b |
763 |
613 |
24 |
|
% |
570 |
34 |
|
% |
All-in sustaining costs ($/oz)b |
1,133 |
950 |
19 |
|
% |
772 |
47 |
|
% |
Turquoise Ridge (61.5%)e |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
76 |
79 |
(4 |
) |
% |
82 |
(7 |
) |
% |
Gold produced (000s oz 100% basis) |
124 |
128 |
(4 |
) |
% |
133 |
(7 |
) |
% |
Cost of sales ($/oz) |
1,097 |
1,073 |
2 |
|
% |
1,077 |
2 |
|
% |
Total cash costs ($/oz)b |
745 |
753 |
(1 |
) |
% |
622 |
20 |
|
% |
All-in sustaining costs ($/oz)b |
805 |
829 |
(3 |
) |
% |
840 |
(4 |
) |
% |
Phoenix (61.5%)f |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
30 |
35 |
(14 |
) |
% |
25 |
20 |
|
% |
Gold produced (000s oz 100% basis) |
49 |
57 |
(14 |
) |
% |
41 |
20 |
|
% |
Cost of sales ($/oz) |
1,773 |
1,726 |
3 |
|
% |
2,186 |
(19 |
) |
% |
Total cash costs ($/oz)b |
520 |
725 |
(28 |
) |
% |
1,010 |
(49 |
) |
% |
All-in sustaining costs ($/oz)b |
659 |
957 |
(31 |
) |
% |
1,622 |
(59 |
) |
% |
Long Canyon (61.5%)f |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
43 |
40 |
8 |
|
% |
24 |
79 |
|
% |
Gold produced (000s oz 100% basis) |
70 |
65 |
8 |
|
% |
39 |
79 |
|
% |
Cost of sales ($/oz) |
877 |
1,009 |
(13 |
) |
% |
1,170 |
(25 |
) |
% |
Total cash costs ($/oz)b |
212 |
308 |
(31 |
) |
% |
353 |
(40 |
) |
% |
All-in sustaining costs ($/oz)b |
384 |
430 |
(11 |
) |
% |
714 |
(46 |
) |
% |
Pueblo
Viejo (60%) |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
129 |
111 |
16 |
|
% |
139 |
(7 |
) |
% |
Gold produced (000s oz 100% basis) |
215 |
185 |
16 |
|
% |
232 |
(7 |
) |
% |
Cost of sales ($/oz) |
791 |
935 |
(15 |
) |
% |
807 |
(2 |
) |
% |
Total cash costs ($/oz)b |
450 |
579 |
(22 |
) |
% |
504 |
(11 |
) |
% |
All-in sustaining costs ($/oz)b |
609 |
720 |
(15 |
) |
% |
631 |
(3 |
) |
% |
Loulo-Gounkoto (80%) |
|
|
|
|
|
|
|
|
|
Gold produced (000s oz attributable
basis) |
139 |
141 |
(1 |
) |
% |
153 |
(9 |
) |
% |
Gold produced (000s oz 100% basis) |
174 |
176 |
(1 |
) |
% |
191 |
(9 |
) |
% |
Cost of sales ($/oz) |
1,088 |
1,012 |
8 |
|
% |
1,018 |
7 |
|
% |
Total cash costs ($/oz)b |
682 |
639 |
7 |
|
% |
630 |
8 |
|
% |
All-in sustaining costs ($/oz)b |
1,161 |
1,030 |
13 |
|
% |
966 |
20 |
|
% |
Kibali
(45%) |
|
|
|
|
|
|
|
|
|
Gold produced (000s oz attributable
basis) |
91 |
90 |
1 |
|
% |
91 |
0 |
|
% |
Gold produced (000s oz 100% basis) |
203 |
201 |
1 |
|
% |
202 |
0 |
|
% |
Cost of sales ($/oz) |
1,088 |
1,067 |
2 |
|
% |
1,187 |
(8 |
) |
% |
Total cash costs ($/oz)b |
617 |
617 |
0 |
|
% |
554 |
11 |
|
% |
All-in sustaining costs ($/oz)b |
817 |
739 |
11 |
|
% |
703 |
16 |
|
% |
Veladero
(50%) |
|
|
|
|
|
|
|
|
|
Gold produced (000s oz attributable
basis) |
44 |
49 |
(10 |
) |
% |
58 |
(24 |
) |
% |
Gold produced (000s oz 100% basis) |
89 |
98 |
(10 |
) |
% |
116 |
(24 |
) |
% |
Cost of sales ($/oz) |
1,136 |
1,228 |
(7 |
) |
% |
1,243 |
(9 |
) |
% |
Total cash costs ($/oz)b |
708 |
801 |
(12 |
) |
% |
773 |
(8 |
) |
% |
All-in sustaining costs ($/oz)b |
1,159 |
1,383 |
(16 |
) |
% |
1,142 |
1 |
|
% |
Porgera
(47.5%)g |
|
|
|
|
|
|
|
|
|
Gold produced (000s oz attributable
basis) |
— |
24 |
|
|
|
75 |
|
|
|
Gold produced (000s oz 100% basis) |
— |
51 |
|
|
|
158 |
|
|
|
Cost of sales ($/oz) |
— |
1,141 |
|
|
|
1,024 |
|
|
|
Total cash costs ($/oz)b |
— |
875 |
|
|
|
868 |
|
|
|
All-in sustaining costs ($/oz)b |
— |
1,046 |
|
|
|
1,053 |
|
|
|
Tongon
(89.7%) |
|
|
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
64 |
64 |
0 |
|
% |
62 |
3 |
|
% |
Gold produced (000s oz 100% basis) |
71 |
71 |
0 |
|
% |
69 |
3 |
|
% |
Cost of sales ($/oz) |
1,329 |
1,275 |
4 |
|
% |
1,396 |
(5 |
) |
% |
Total cash costs ($/oz)b |
731 |
688 |
6 |
|
% |
793 |
(8 |
) |
% |
All-in sustaining costs ($/oz)b |
777 |
745 |
4 |
|
% |
869 |
(11 |
) |
% |
Hemlo |
|
|
|
|
|
|
|
Gold produced (000s oz) |
55 |
54 |
2 |
|
% |
49 |
12 |
|
% |
Cost of sales ($/oz) |
1,257 |
1,268 |
(1 |
) |
% |
1,083 |
16 |
|
% |
Total cash costs ($/oz)b |
1,099 |
1,080 |
2 |
|
% |
953 |
15 |
|
% |
All-in sustaining costs ($/oz)b |
1,497 |
1,456 |
3 |
|
% |
1,280 |
17 |
|
% |
North
Marah |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
67 |
68 |
(1 |
) |
% |
29 |
131 |
|
% |
Gold produced (000s oz 100% basis) |
80 |
81 |
(1 |
) |
% |
45 |
78 |
|
% |
Cost of sales ($/oz) |
903 |
1,040 |
(13 |
) |
% |
907 |
0 |
|
% |
Total cash costs ($/oz)b |
649 |
724 |
(10 |
) |
% |
603 |
8 |
|
% |
All-in sustaining costs ($/oz)b |
758 |
1,166 |
(35 |
) |
% |
850 |
(11 |
) |
% |
Buzwagih |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
21 |
20 |
5 |
|
% |
18 |
17 |
|
% |
Gold produced (000s oz 100% basis) |
25 |
24 |
5 |
|
% |
28 |
(11 |
) |
% |
Cost of sales ($/oz) |
907 |
909 |
0 |
|
% |
1,292 |
(30 |
) |
% |
Total cash costs ($/oz)b |
687 |
751 |
(9 |
) |
% |
1,202 |
(43 |
) |
% |
All-in sustaining costs ($/oz)b |
693 |
770 |
(10 |
) |
% |
1,220 |
(43 |
) |
% |
Bulyanhuluh |
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
7 |
7 |
0 |
|
% |
6 |
17 |
|
% |
Gold produced (000s oz 100% basis) |
8 |
8 |
0 |
|
% |
9 |
(11 |
) |
% |
Cost of sales ($/oz) |
1,502 |
1,658 |
(9 |
) |
% |
1,288 |
17 |
|
% |
Total cash costs ($/oz)b |
874 |
950 |
(8 |
) |
% |
729 |
20 |
|
% |
All-in sustaining costs ($/oz)b |
913 |
1,014 |
(10 |
) |
% |
769 |
19 |
|
% |
Kalgoorlie
(50%)i |
|
|
|
|
|
|
|
|
Gold produced (000s oz attributable basis) |
|
|
|
|
|
58 |
(100 |
) |
% |
Gold produced (000s oz 100% basis) |
|
|
|
|
|
116 |
(100 |
) |
% |
Cost of sales ($/oz) |
|
|
|
|
|
1,037 |
(100 |
) |
% |
Total cash costs ($/oz)b |
|
|
|
|
|
856 |
(100 |
) |
% |
All-in sustaining costs ($/oz)b |
|
|
|
|
|
1,170 |
(100 |
) |
% |
Total Attributable to Barrickj,i |
|
|
|
|
|
|
|
Gold produced (000s oz) |
1,155 |
1,149 |
1 |
|
% |
1,306 |
(12 |
) |
% |
Cost of sales ($/oz)k |
1,065 |
1,075 |
(1 |
) |
% |
1,065 |
0 |
|
% |
Total cash costs ($/oz)b |
696 |
716 |
(3 |
) |
% |
710 |
(2 |
) |
% |
All-in sustaining costs ($/oz)b |
966 |
1,031 |
(6 |
) |
% |
984 |
(2 |
) |
% |
- Represents the combined results of Cortez, Goldstrike
(including our 60% share of South Arturo) and our 75% interest in
Turquoise Ridge until June 30, 2019. Commencing July 1, 2019,
the date Nevada Gold Mines was established, the results represent
our 61.5% interest in Cortez, Carlin (including Goldstrike and 60%
of South Arturo), Turquoise Ridge (including Twin Creeks), Phoenix
and Long Canyon.
- These 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
used to the most directly comparable IFRS measure, please see pages
82 to 106 of our third quarter MD&A.
- On July 1, 2019, Barrick's Goldstrike and Newmont's Carlin were
contributed to Nevada Gold Mines and are now referred to as
Carlin. As a result, the amounts presented represent
Goldstrike on a 100% basis (including our 60% share of South
Arturo) up until June 30, 2019, and the combined results of Carlin
and Goldstrike (including NGM's 60% share of South Arturo) on a
61.5% basis thereafter.
- On July 1, 2019, Cortez was contributed to Nevada Gold Mines, a
joint venture with Newmont. As a result, the amounts
presented are on an 100% basis up until June 30, 2019, and on a
61.5% basis thereafter.
- Barrick owned 75% of Turquoise Ridge through to the end of the
second quarter of 2019, with our joint venture partner, Newmont,
owning the remaining 25%. Turquoise Ridge was proportionately
consolidated on the basis that the joint venture partners that have
joint control have rights to the assets and obligations for the
liabilities relating to the arrangement. The figures presented in
this table are based on our 75% interest in Turquoise Ridge until
June 30, 2019. On July 1, 2019, Barrick's 75% interest in Turquoise
Ridge as well as Newmont's Twin Creeks and 25% interest in
Turquoise Ridge were contributed to Nevada Gold Mines.
Starting July 1, 2019, the results represent our 61.5% share of
Turquoise Ridge and Twin Creeks, now referred to as Turquoise
Ridge.
- A 61.5% interest in these sites was acquired as a result of the
formation of Nevada Gold Mines on July 1, 2019.
- As Porgera was placed on care and maintenance on April
25, 2020, no operating data or per ounce data is provided.
- Formerly part of Acacia Mining plc. On September 17,
2019, Barrick acquired all of the shares of Acacia it did not
own. Operating results are included at 100% from October 1,
2019 to December 31, 2019 (notwithstanding the completion of the
Acacia transaction on September 17, 2019, we consolidated our
interest in Acacia and recorded a non-controlling interest of 36.1%
in the income statement for the entirety of the third quarter of
2019 as a matter of convenience), and on an 84% basis thereafter as
the GoT's 16% free-carried interest was made effective from January
1, 2020.
- On November 28, 2019, we completed the sale of our 50% interest
in Kalgoorlie in Western Australia to Saracen Mineral Holdings
Limited for total cash consideration of $750 million. Accordingly,
these represent our 50% interest until November 28, 2019.
- Excludes Pierina; Lagunas Norte starting in the fourth quarter
of 2019, and Golden Sunlight and Morila (40%) starting in the third
quarter of 2019 which are producing incidental ounces as they reach
the end of their mine lives.
- Cost of sales per ounce (Barrick’s share) is calculated as gold
cost of sales on an attributable basis (excluding sites in care and
maintenance) divided by gold attributable ounces sold.
Production and Cost Summary -
Copper
|
For the three months ended |
|
|
|
9/30/20 |
6/30/20 |
% Change |
|
|
9/30/19 |
% Change |
|
|
Lumwana |
|
|
|
|
|
Copper production (Mlbs) |
62 |
72 |
(14 |
) |
% |
65 |
(5 |
) |
% |
Cost of sales ($/lb) |
2.06 |
2.06 |
0 |
|
% |
2.04 |
1 |
|
% |
C1 cash costs ($/lb)a |
1.49 |
1.55 |
(4 |
) |
% |
1.83 |
(19 |
) |
% |
All-in sustaining costs ($/lb)a |
2.58 |
2.27 |
14 |
|
% |
3.66 |
(30 |
) |
% |
Zaldívar
(50%) |
|
|
|
|
|
Copper production (Mlbs attributable basis) |
24 |
28 |
(14 |
) |
% |
32 |
(25 |
) |
% |
Copper production (Mlbs 100% basis) |
48 |
56 |
(14 |
) |
% |
64 |
(25 |
) |
% |
Cost of sales ($/lb) |
2.20 |
2.52 |
(13 |
) |
% |
2.18 |
1 |
|
% |
C1 cash costs ($/lb)a |
1.64 |
1.79 |
(8 |
) |
% |
1.55 |
6 |
|
% |
All-in sustaining costs ($/lb)a |
2.27 |
2.09 |
9 |
|
% |
1.91 |
19 |
|
% |
Jabal Sayid
(50%) |
|
|
|
|
|
Copper production (Mlbs attributable basis) |
17 |
20 |
(15 |
) |
% |
15 |
13 |
|
% |
Copper production (Mlbs 100% basis) |
34 |
40 |
(15 |
) |
% |
30 |
13 |
|
% |
Cost of sales ($/lb) |
1.43 |
1.41 |
1 |
|
% |
1.63 |
(12 |
) |
% |
C1 cash costs ($/lb)a |
1.14 |
1.14 |
0 |
|
% |
1.42 |
(20 |
) |
% |
All-in sustaining costs ($/lb)a |
1.17 |
1.41 |
(17 |
) |
% |
1.65 |
(29 |
) |
% |
Total
Copper |
|
|
|
|
|
Copper production (Mlbs attributable basis) |
103 |
120 |
(14 |
) |
% |
112 |
(8 |
) |
% |
Cost of sales ($/lb)b |
1.97 |
2.08 |
(5 |
) |
% |
2.00 |
(2 |
) |
% |
C1 cash costs ($/lb)a |
1.45 |
1.55 |
(6 |
) |
% |
1.62 |
(10 |
) |
% |
All-in sustaining costs ($/lb)a |
2.31 |
2.15 |
7 |
|
% |
2.58 |
(10 |
) |
% |
- These 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
used to the most directly comparable IFRS measure, please see pages
82 to 106 of our third quarter MD&A.
- Cost of sales per pound (Barrick’s share) is calculated as
copper cost of sales plus our equity share of cost of sales
attributable to Zaldívar and Jabal Sayid divided by copper
attributable pounds sold.
Technical Information
The scientific and technical information contained in this
MD&A has been reviewed and approved by Steven Yopps, MMSA,
Manager of Growth Projects, Nevada Gold Mines; Craig Fiddes,
SME-RM, Manager – Resource Modeling, Nevada Gold Mines; Chad
Yuhasz, P.Geo, Mineral Resource Manager, Latin America and Asia
Pacific; Simon Bottoms, CGeol, MGeol, FGS, FAusIMM, Mineral
Resources Manager: Africa and Middle East; Rodney Quick, MSc, Pr.
Sci.Nat, Mineral Resource Management and Evaluation Executive; John
Steele, CIM, Metallurgy, Engineering and Capital Projects
Executive; and Rob Krcmarov, FAusIMM, Executive Vice President,
Exploration and Growth – each a “Qualified Person” as defined in
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
Endnotes
Endnote 1“Free cash flow” is a non-GAAP
financial performance measure that 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 this non-GAAP measure 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 |
|
For the nine months ended |
|
|
9/30/20 |
|
|
6/30/20 |
|
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
Net cash provided by operating
activities |
1,859 |
|
|
1,031 |
|
|
1,004 |
|
3,779 |
|
1,958 |
|
Capital expenditures |
(548 |
) |
|
(509 |
) |
|
(502 |
) |
(1,508 |
) |
(1,255 |
) |
Free cash flow |
1,311 |
|
|
522 |
|
|
502 |
|
2,271 |
|
703 |
|
Endnote 2“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; 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 |
For the nine months ended |
|
|
|
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
Net earnings attributable to
equity holders of the Company |
|
|
882 |
|
357 |
|
2,277 |
|
1,639 |
|
2,582 |
|
Impairment charges (reversals)
related to intangibles, goodwill, property, plant and equipment,
and investmentsa |
|
|
4 |
|
23 |
|
(872 |
) |
(309 |
) |
(857 |
) |
Acquisition/disposition
(gains) lossesb |
|
|
(2 |
) |
8 |
|
(1,901 |
) |
(54 |
) |
(1,913 |
) |
Loss (gain) on currency
translation |
|
|
16 |
|
2 |
|
40 |
|
34 |
|
56 |
|
Significant tax adjustmentsc |
|
|
(66 |
) |
(7 |
) |
35 |
|
(117 |
) |
(40 |
) |
Other expense adjustmentsd |
|
|
(90 |
) |
48 |
|
53 |
|
56 |
|
158 |
|
Tax
effect and non-controlling intereste |
|
|
(18 |
) |
(16 |
) |
631 |
|
177 |
|
616 |
|
Adjusted net earnings |
|
|
726 |
|
415 |
|
264 |
|
1,426 |
|
602 |
|
Net earnings per sharef |
|
|
0.50 |
|
0.20 |
|
1.30 |
|
0.92 |
|
1.47 |
|
Adjusted net earnings per sharef |
|
|
0.41 |
|
0.23 |
|
0.15 |
|
0.80 |
|
0.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a. For
the three month period ended September 30, 2020, we recorded no
significant impairment charges or reversals. For the nine
month period ended September 30, 2020, net impairment reversals
primarily relate to non-current asset reversals at our Tanzanian
assets. Net impairment reversals for the three and nine month
periods ended September 30, 2019 mainly relate to non-current asset
reversals at Lumwana, partially offset by impairments at Cortez and
Lagunas Norte. b. Acquisition/disposition
gains for the nine month period ended September 30, 2020 primarily
relate to the gain on the sale of Massawa. For the three and
nine months ended September 30, 2019, acquisition/disposition gains
primarily relate to the gain on the remeasurement of Turquoise
Ridge to fair value as a result of its contribution to Nevada Gold
Mines.c. Significant tax adjustments for the nine month period
ended September 30, 2020 mainly relates to deferred tax recoveries
as a result of tax reform measures in Argentina and adjustments
made in recognition of the net settlement of all outstanding
disputes with the GoT. d. Other expense
adjustments for the three and nine month period ended September 30,
2020 primarily relate to the gain on the remeasurement of the
residual cash liability relating to our silver sale agreement with
Wheaton Precious Metals Corp., partially offset by care and
maintenance expenses at Porgera and Covid-19 donations. For
the three month period ended June 30, 2020, other expense
adjustments primarily relate to care and maintenance expenses at
Porgera and Covid-19 donations. The nine month period ended
September 30, 2020 was further impacted by changes in the discount
rate assumptions on our closed mine rehabilitation provision.
For the three and nine month periods ended September 30, 2019,
other expense adjustments primarily relate to severance costs as a
result of the implementation of a number of organizational
reductions, the impact of changes in the discount rate assumptions
on our closed mine rehabilitation provision and transaction costs
related to Nevada Gold Mines and Acacia. e. Tax effect
and non-controlling interest for the three and nine month periods
ended September 30, 2019 primarily relates to the net impairment
reversals related to long-lived assets and acquisition gains.f.
Calculated using weighted average number of shares outstanding
under the basic method of earnings per share.
Endnote 3 "Realized price" is a non-GAAP
financial measure which excludes from sales: unrealized gains and
losses on non-hedge derivative contracts; unrealized mark-to-market
gains and losses on provisional pricing from copper and gold sales
contracts; sales attributable to ore purchase arrangements;
treatment and refining charges; export duties; and cumulative
catch-up adjustments to revenue relating to our streaming
arrangements. This measure is intended to enable Management to
better understand the price realized in each reporting period for
gold and copper sales because unrealized mark-to-market values of
non-hedge gold and copper derivatives are subject to change each
period due to changes in market factors such as market and forward
gold and copper prices, so that prices ultimately realized may
differ from those recorded. The exclusion of such unrealized
mark-to-market gains and losses from the presentation of this
performance measure enables investors to understand performance
based on the realized proceeds of selling gold and copper
production. The realized price measure is intended to provide
additional information and does not have any standardized
definition under IFRS and 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 Sales to Realized Price per
ounce/pound
($ millions, except per ounce/pound information in dollars) |
Gold |
Copper |
Gold |
Copper |
|
For the three months ended |
For the nine months ended |
|
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
|
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
Sales |
3,237 |
|
2,812 |
|
2,585 |
|
|
219 |
|
184 |
|
45 |
|
8,642 |
|
6,428 |
|
502 |
|
311 |
|
Sales applicable to
non-controlling interests |
(967 |
) |
(822 |
) |
(748 |
) |
|
0 |
|
0 |
|
0 |
|
(2,560 |
) |
(1,212 |
) |
0 |
|
0 |
|
Sales applicable to equity
method investmentsa,b |
183 |
|
172 |
|
140 |
|
|
121 |
|
120 |
|
100 |
|
502 |
|
404 |
|
348 |
|
345 |
|
Realized non-hedge gold/copper
derivative (losses) gains |
0 |
|
0 |
|
0 |
|
|
0 |
|
0 |
|
0 |
|
0 |
|
1 |
|
0 |
|
0 |
|
Sales applicable to sites in
care and maintenancec |
(53 |
) |
(53 |
) |
(32 |
) |
|
0 |
|
0 |
|
0 |
|
(152 |
) |
(84 |
) |
0 |
|
0 |
|
Treatment and refinement
charges |
4 |
|
2 |
|
0 |
|
|
39 |
|
40 |
|
18 |
|
6 |
|
0 |
|
118 |
|
74 |
|
Otherd |
0 |
|
0 |
|
0 |
|
|
0 |
|
0 |
|
0 |
|
15 |
|
0 |
|
0 |
|
0 |
|
Revenues – as adjusted |
2,404 |
|
2,111 |
|
1,945 |
|
|
379 |
|
344 |
|
163 |
|
6,453 |
|
5,537 |
|
968 |
|
730 |
|
Ounces/pounds sold (000s ounces/millions pounds)c |
1,249 |
|
1,224 |
|
1,318 |
|
|
116 |
|
123 |
|
65 |
|
3,693 |
|
4,055 |
|
349 |
|
264 |
|
Realized gold/copper price per ounce/pounde |
1,926 |
|
1,725 |
|
1,476 |
|
|
3.28 |
|
2.79 |
|
2.55 |
|
1,748 |
|
1,365 |
|
2.78 |
|
2.78 |
|
a. Represents sales of $176 million
and $480 million, respectively, for the three and nine month
periods ended September 30, 2020 (June 30, 2020: $164
million and September 30, 2019: $133 million and $375 million,
respectively) applicable to our 45% equity method investment in
Kibali and $nil and nil, respectively, (June 30, 2020: $nil
and September 30, 2019: $8 million and $30 million,
respectively) applicable to our 40% equity method investment in
Morila for gold. Represents sales of $66 million and $216 million,
respectively, for the three and nine months ended
September 30, 2020 (June 30, 2020: $78 million and
September 30, 2019: $66 million and $233 million,
respectively) applicable to our 50% equity method investment in
Zaldívar and $59 million and $145 million, respectively
(June 30, 2020: $46 million and September 30, 2019: $37
million and $125 million, respectively) applicable to our 50%
equity method investment in Jabal Sayid for copper.b. Sales
applicable to equity method investments are net of treatment and
refinement charges.c. Figures exclude: Pierina; Golden Sunlight and
Morila starting in the third quarter of 2019; and Lagunas Norte
starting in the fourth quarter of 2019, from the calculation of
realized price per ounce as the mine is mining incidental ounces as
it enters closure.d. Represents a cumulative catch-up adjustment to
revenue relating to our streaming arrangements. Refer to note
2f of the 2019 Annual Financial Statements for more information.e.
Realized price per ounce/pound may not calculate based on amounts
presented in this table due to rounding.
Endnote 4Includes North Mara, Bulyanhulu and
Buzwagi on a 84% basis starting January 1, 2020 (and on a 63.9%
basis from January 1, 2019 to September 30, 2019; notwithstanding
the completion of the Acacia transaction on September 17, 2019, we
consolidated our interest in Acacia and recorded a non-controlling
interest of 36.1% in the income statement for the entirety of the
third quarter of 2019 as a matter of convenience, and on a 100%
basis from October 1, 2019 to December 31, 2019), Pueblo Viejo on a
60% basis, South Arturo on a 36.9% basis from July 1, 2019 onwards
as a result of its contribution to Nevada Gold Mines (and on a 60%
basis from January 1, 2019 to June 30, 2019), Veladero on a 50%
basis, Loulo-Gounkoto on an 80% basis, Kibali on a 45% basis,
Tongon on an 89.7% basis, and Morila on a 40% basis until the
second quarter of 2019, which reflects our equity share of
production and sales. Also removes the non-controlling
interest of 38.5% Nevada Gold Mines from July 1, 2019 onwards.
Endnote 5Net earnings (loss) represents net
earnings (loss) attributable to the equity holders of the
Company.
Endnote 6These amounts are presented on the
same basis as our guidance and include our 60% share of Pueblo
Viejo, 80% share of Loulo-Gounkoto, 89.7% share of Tongon, 45%
share of Kibali, 40% share of Morila and 60% share of South Arturo
(36.9% of South Arturo from July 1, 2019 onwards as a result of its
contribution to Nevada Gold Mines), our 84% share of Tanzania
starting January 1, 2020 (63.9% share from January 1, 2019 to
September 30, 2019; notwithstanding the completion of the Acacia
transaction on September 17, 2019, we consolidated our interest in
Acacia and recorded a non-controlling interest of 36.1% in the
income statement for the entirety of the third quarter of 2019 as a
matter of convenience, and 100% share from October 1, 2019 to
December 31, 2019) and our 50% share of Zaldívar and Jabal
Sayid. Starting July 1, 2019, it also includes our 61.5%
share of Nevada Gold Mines.
Endnote 7Gold cost of sales (Barrick’s share)
is calculated as cost of sales - gold on an attributable basis
(excluding sites in care and maintenance) divided by ounces
sold.
Endnote 8“Total cash costs” per ounce, “All-in
sustaining costs” per ounce and "All-in costs" per ounce are
non-GAAP financial performance measures. “Total cash costs” per
ounce starts with cost of sales related to gold production and
removes depreciation, the non-controlling interest of cost of
sales, and includes by product credits. “All-in sustaining costs”
per ounce start with “Total cash costs” per ounce and add further
costs which reflect the expenditures made to maintain current
production levels, primarily sustaining capital expenditures,
sustaining leases, general & administrative costs, minesite
exploration and evaluation costs, and reclamation cost accretion
and amortization. "All-in costs" per ounce starts with "All-in
sustaining costs" per ounce and adds additional costs that reflect
the varying costs of producing gold over the life-cycle of a mine,
including: project capital expenditures and other non-sustaining
costs. Barrick believes that the use of “Total cash costs” per
ounce, “All-in sustaining costs” per ounce and "All-in 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. “Total cash costs” per ounce, “All-in sustaining
costs” per ounce and "All-in 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 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 Total 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 |
For the nine months ended |
|
Footnote |
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
Cost of sales applicable to gold
production |
|
1,768 |
|
1,740 |
|
1,831 |
|
5,151 |
|
4,618 |
|
Depreciation |
|
(508 |
) |
(498 |
) |
(538 |
) |
(1,480 |
) |
(1,353 |
) |
Cash cost of sales applicable to equity method investments |
|
53 |
|
62 |
|
45 |
|
156 |
|
169 |
|
By-product credits |
|
(84 |
) |
(59 |
) |
(48 |
) |
(172 |
) |
(95 |
) |
Realized (gains) losses on hedge and non-hedge derivatives |
a |
0 |
|
1 |
|
1 |
|
1 |
|
0 |
|
Non-recurring items |
b |
0 |
|
0 |
|
(4 |
) |
0 |
|
(33 |
) |
Other |
c |
(24 |
) |
(26 |
) |
(19 |
) |
(77 |
) |
(65 |
) |
Non-controlling interests |
d |
(337 |
) |
(336 |
) |
(339 |
) |
(989 |
) |
(552 |
) |
Total cash costs |
|
868 |
|
884 |
|
929 |
|
2,590 |
|
2,689 |
|
General & administrative costs |
|
50 |
|
71 |
|
68 |
|
161 |
|
181 |
|
Minesite exploration and evaluation costs |
e |
19 |
|
23 |
|
22 |
|
57 |
|
45 |
|
Minesite sustaining capital expenditures |
f |
415 |
|
420 |
|
406 |
|
1,205 |
|
926 |
|
Sustaining leases |
|
9 |
|
10 |
|
5 |
|
19 |
|
23 |
|
Rehabilitation - accretion and amortization (operating sites) |
g |
13 |
|
12 |
|
28 |
|
39 |
|
58 |
|
Non-controlling interest, copper operations and other |
h |
(166 |
) |
(158 |
) |
(184 |
) |
(438 |
) |
(335 |
) |
All-in
sustaining costs |
|
1,208 |
|
1,262 |
|
1,274 |
|
3,633 |
|
3,587 |
|
Project exploration and evaluation and project costs |
e |
53 |
|
55 |
|
64 |
|
164 |
|
213 |
|
Community relations costs not related to current operations |
|
0 |
|
0 |
|
1 |
|
1 |
|
2 |
|
Project capital expenditures |
f |
126 |
|
85 |
|
96 |
|
287 |
|
324 |
|
Rehabilitation - accretion and amortization (non-operating
sites) |
g |
3 |
|
4 |
|
5 |
|
9 |
|
19 |
|
Non-controlling interest and copper operations and other |
h |
(47 |
) |
(36 |
) |
(46 |
) |
(100 |
) |
(77 |
) |
All-in
costs |
|
1,343 |
|
1,370 |
|
1,394 |
|
3,994 |
|
4,068 |
|
Ounces sold - equity basis (000s ounces) |
i |
1,249 |
|
1,224 |
|
1,318 |
|
3,693 |
|
4,055 |
|
Cost of sales per ounce |
j,k |
1,065 |
|
1,075 |
|
1,065 |
|
1,054 |
|
991 |
|
Total cash costs per ounce |
k |
696 |
|
716 |
|
710 |
|
701 |
|
663 |
|
Total
cash costs per ounce (on a co-product basis) |
k,l |
742 |
|
747 |
|
735 |
|
732 |
|
680 |
|
All-in sustaining costs per
ounce |
k |
966 |
|
1,031 |
|
984 |
|
984 |
|
883 |
|
All-in
sustaining costs per ounce (on a co-product basis) |
k,l |
1,012 |
|
1,062 |
|
1,009 |
|
1,015 |
|
900 |
|
All-in costs per ounce |
k |
1,076 |
|
1,118 |
|
1,074 |
|
1,082 |
|
999 |
|
All-in
costs per ounce (on a co-product basis) |
k,l |
1,122 |
|
1,149 |
|
1,099 |
|
1,113 |
|
1,016 |
|
a. Realized (gains) losses on
hedge and non-hedge derivativesIncludes realized hedge
losses of $nil and $nil, respectively, for the three and nine month
periods ended September 30, 2020 (June 30, 2020: $nil and
September 30, 2019: $nil and $nil, respectively), and realized
non-hedge losses of $nil and $1 million, respectively, for the
three and nine month periods ended September 30, 2020
(June 30, 2020: $1 million and September 30, 2019: $1
million and $nil, respectively). Refer to note 5 to the Financial
Statements for further information.
b. Non-recurring
itemsNon-recurring items in 2019 relate to organizational
restructuring. These costs are not indicative of our cost of
production and have been excluded from the calculation of total
cash costs.
c. OtherOther
adjustments for the three and nine month period ended
September 30, 2020 include the removal of total cash costs and
by-product credits associated with: our Pierina mine; Golden
Sunlight and Morila starting in the third quarter of 2019; and
Lagunas Norte starting in the fourth quarter of 2019, which all are
mining incidental ounces as they enter closure of $27 million and
$78 million, respectively, (June 30, 2020: $26 million;
September 30, 2019: $19 million and $57 million,
respectively).
d. Non-controlling
interestsNon-controlling interests include non-controlling
interests related to gold production of $508 million and $1,469
million, respectively, for the three and nine month periods ended
September 30, 2020 (June 30, 2020: $495 million and
September 30, 2019: $504 million and $827 million,
respectively). Non-controlling interests include Pueblo Viejo,
Loulo-Gounkoto, Tongon, North Mara, Bulyanhulu, Buzwagi
(notwithstanding the completion of the Acacia transaction on
September 17, 2019, we consolidated our interest in Acacia and
recorded a non-controlling interest of 36.1% in the income
statement for the entirety of the third quarter of 2019 as a matter
of convenience) and Nevada Gold Mines starting July 1, 2019. Refer
to note 5 to the Financial Statements for further information.
e. 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 75 of the Q3 2020 MD&A.
f. Capital
expenditures Capital expenditures are related to our
gold sites only and 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 the expansion project at Pueblo
Viejo, the Goldrush exploration declines, the restart of mining
activities at Bulyanhulu, and construction of the third shaft at
Turquoise Ridge. Refer to page 74 of the Q3 2020 MD&A.
g. 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.
h. 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 North Mara,
Bulyanhulu and Buzwagi (notwithstanding the completion of the
Acacia transaction on September 17, 2019, we consolidated our
interest in Acacia and recorded a non-controlling interest of 36.1%
in the income statement for the entirety of the third quarter of
2019 as a matter of convenience), Pueblo Viejo, Loulo-Gounkoto and
Tongon operating segments and South Arturo (63.1% of South Arturo
from July 1, 2019 onwards as a result of its contribution to Nevada
Gold Mines). Also removes the non-controlling interest of Nevada
Gold Mines starting July 1, 2019. It also includes capital
expenditures applicable to equity method investments. Figures
remove the impact of Pierina; Golden Sunlight and Morila starting
in the third quarter of 2019; and Lagunas Norte starting in the
fourth quarter of 2019. The impact is summarized as the
following:
($
millions) |
For the three months ended |
For the nine months ended |
Non-controlling interest, copper operations and other |
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
General & administrative
costs |
(6 |
) |
(8 |
) |
(22 |
) |
(20 |
) |
(55 |
) |
Minesite exploration and
evaluation expenses |
(5 |
) |
(8 |
) |
(9 |
) |
(16 |
) |
(10 |
) |
Rehabilitation - accretion and
amortization (operating sites) |
(3 |
) |
(4 |
) |
(10 |
) |
(11 |
) |
(12 |
) |
Minesite sustaining capital expenditures |
(152 |
) |
(138 |
) |
(143 |
) |
(391 |
) |
(258 |
) |
All-in
sustaining costs total |
(166 |
) |
(158 |
) |
(184 |
) |
(438 |
) |
(335 |
) |
Project exploration and
evaluation and project costs |
(9 |
) |
(9 |
) |
(12 |
) |
(21 |
) |
(40 |
) |
Project capital expenditures |
(38 |
) |
(27 |
) |
(34 |
) |
(79 |
) |
(37 |
) |
All-in
costs total |
(47 |
) |
(36 |
) |
(46 |
) |
(100 |
) |
(77 |
) |
i. Ounces sold - equity
basis Figures remove the impact of: Pierina; Golden
Sunlight and Morila starting in the third quarter of 2019; and
Lagunas Norte starting in the fourth quarter of 2019, which are
producing incidental ounces as they reach the end of their mine
lives.
j. Cost of sales per
ounceFigures remove the cost of sales impact of: Pierina
of $4 million and $14 million, respectively, for the three and nine
month periods ended September 30, 2020 (June 30, 2020: $4
million and September 30, 2019: $44 million and $71 million,
respectively); starting in the third quarter of 2019, Golden
Sunlight of $nil and $nil, respectively, for the three and nine
month periods ended September 30, 2020 (June 30, 2020:
$nil and September 30, 2019: $1 million and $1 million,
respectively) and Morila of $7 million and $20 million,
respectively, for the three and nine month periods ended
September 30, 2020 (June 30, 2020: $8 million and
September 30, 2019: $10 million and $10 million,
respectively); and starting in the fourth quarter of 2019, Lagunas
Norte of $22 million and $66 million, respectively, for the three
and nine month periods ended September 30, 2020 (June 30,
2020: $23 million and September 30, 2019: $nil and $nil,
respectively), which are mining incidental ounces as these sites
enter closure. Cost of sales per ounce excludes non-controlling
interest related to gold production. Cost of sales applicable to
gold per ounce is calculated using cost of sales on an attributable
basis (removing the non-controlling interest of 40% Pueblo Viejo,
20% of Loulo-Gounkoto, 10.3% of Tongon, 16% North Mara, Bulyanhulu
and Buzwagi starting January 1, 2020, the effective date of the
GoT's free carried interest (36.1% up until September 30, 2019;
notwithstanding the completion of the Acacia transaction on
September 17, 2019, we consolidated our interest in Acacia and
recorded a non-controlling interest of 36.1% in the income
statement for the entirety of the third quarter of 2019 as a matter
of convenience) and 40% South Arturo from cost of sales (63.1% of
South Arturo from July 1, 2019 onwards as a result of its
contribution to Nevada Gold Mines)), divided by attributable gold
ounces. The non-controlling interest of 38.5% Nevada Gold Mines is
also removed from cost of sales from July 1, 2019
onwards.
k. Per ounce
figures Cost of sales per ounce, total cash costs per
ounce, all-in sustaining costs per ounce and all-in costs per ounce
may not calculate based on amounts presented in this table due to
rounding.
l. Co-product costs per
ounce Total cash costs per ounce, all-in sustaining
costs per ounce and all-in costs per ounce presented on a
co-product basis removes the impact of by-product credits of our
gold production (net of non-controlling interest) calculated
as:
($
millions) |
For the three months ended |
For the nine months ended |
|
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
By-product credits |
84 |
|
59 |
|
48 |
|
172 |
|
95 |
|
Non-controlling interest |
(29 |
) |
(22 |
) |
(16 |
) |
(65 |
) |
(31 |
) |
By-product credits (net of non-controlling interest) |
55 |
|
37 |
|
32 |
|
107 |
|
64 |
|
Endnote 9Amounts reflect production and sales
from Jabal Sayid and Zaldívar on a 50% basis, which reflects our
equity share of production, and Lumwana.
Endnote 10Copper cost of sales (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 pounds sold.
Endnote 11A Tier One Gold Asset is a mine with
a stated life in excess of 10 years, annual production of at least
500,000 ounces of gold and total cash costs per ounce over the mine
life that are in the lower half of the industry cost curve.
Endnote 12The declaration and payment of
dividends is at the discretion of the Board of Directors, and will
depend on the company’s financial results, cash requirements,
future prospects and other factors deemed relevant by the
Board.
Endnote 13Botswana, Burundi, Eritrea, Eswatini,
Ethiopia, The Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique,
Namibia, Rwanda, Seychelles, Sierra Leone, Somalia, South Sudan,
Sudan, Tanzania, Uganda, Zambia, Zimbabwe.
Endnote 14Cost 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 38.5%
of Nevada Gold Mines (including 63.1% of South Arturo), 40% of
Pueblo Viejo, 20% of Loulo-Gounkoto, 10.3% of Tongon, and 16% of
North Mara, Bulyanhulu and Buzwagi from cost of sales and including
our proportionate share of cost of sales attributable to our equity
method investments in Kibali), divided by attributable gold ounces
sold. 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 our equity
method investments in Zaldívar and Jabal Sayid, divided by
consolidated copper pounds sold (including our proportionate share
of copper pounds sold from our equity method investments).
Endnote 15Includes our 36.9% share of South
Arturo.
Endnote 16Based on the communication we
received from the Government of Papua New Guinea that the SML will
not be extended, Porgera was placed on temporary care and
maintenance on April 25, 2020 to ensure the safety and security of
our employees and communities. Due to the uncertainty related to
the timing and scope of future developments on the mine’s operating
outlook, our full year 2020 guidance for Porgera has been
withdrawn.
Endnote 17Amounts are on an 84% basis as the
GoT's 16% free-carried interest was made effective from January 1,
2020.
Endnote 18Total cash costs and all-in
sustaining costs per ounce include the impact of hedges and/or
costs allocated to non-operating sites.
Endnote 19Operating unit guidance ranges
reflect expectations at each individual operating unit, and may not
add up to the company-wide guidance range total. Guidance ranges
exclude Pierina, Lagunas Norte, Golden Sunlight and Morila
(40%).
Endnote 20Includes corporate administration
costs.
Endnote 21“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 production
taxes 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 and production
taxes. 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 |
For the nine months ended |
|
9/30/20 |
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
9/30/19 |
|
Cost of sales |
154 |
|
153 |
|
49 |
|
431 |
|
281 |
|
Depreciation/amortization |
(61 |
) |
(63 |
) |
(13 |
) |
(167 |
) |
(83 |
) |
Treatment and refinement charges |
39 |
|
40 |
|
18 |
|
118 |
|
74 |
|
Cash cost of sales applicable to equity method investments |
57 |
|
72 |
|
59 |
|
195 |
|
194 |
|
Less: royalties and production taxesa |
(16 |
) |
(11 |
) |
(5 |
) |
(38 |
) |
(26 |
) |
By-product credits |
(4 |
) |
(3 |
) |
(3 |
) |
(10 |
) |
(8 |
) |
Other |
0 |
|
|
0 |
|
0 |
|
(5 |
) |
C1 cash costs |
169 |
|
188 |
|
105 |
|
529 |
|
427 |
|
General & administrative costs |
4 |
|
6 |
|
5 |
|
13 |
|
16 |
|
Rehabilitation - accretion and amortization |
2 |
|
2 |
|
2 |
|
7 |
|
8 |
|
Royalties and production taxesa |
16 |
|
11 |
|
5 |
|
38 |
|
26 |
|
Minesite exploration and evaluation costs |
2 |
|
1 |
|
1 |
|
4 |
|
4 |
|
Minesite sustaining capital expenditures |
74 |
|
52 |
|
48 |
|
158 |
|
155 |
|
Sustaining leases |
2 |
|
2 |
|
0 |
|
7 |
|
2 |
|
All-in sustaining costs |
269 |
|
262 |
|
166 |
|
756 |
|
638 |
|
Pounds sold - consolidated basis (millions pounds) |
116 |
|
123 |
|
65 |
|
349 |
|
264 |
|
Cost of sales per poundb,c |
1.97 |
|
2.08 |
|
2.00 |
|
2.01 |
|
2.10 |
|
C1 cash cost per poundb |
1.45 |
|
1.55 |
|
1.62 |
|
1.52 |
|
1.62 |
|
All-in sustaining costs per poundb |
2.31 |
|
2.15 |
|
2.58 |
|
2.17 |
|
2.42 |
|
a. For the three and nine month
period ended September 30, 2020, royalties and production
taxes include royalties of $16 million and $38 million,
respectively (June 30, 2020: $11 million and
September 30, 2019: $5 million and $26 million,
respectively).b. 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.c. 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 222020 Guidance includes our 61.5%
share of Nevada Gold Mines, our 60% share of Pueblo Viejo, our 80%
share of Loulo-Gounkoto, our 89.7% share of Tongon, our 84% share
of North Mara, Bulyanhulu and Buzwagi, our 50% share of Zaldívar
and Jabal Sayid, and our 45% of Kibali, and our share of joint
operations.
Endnote 23Reflects the impact of the full
year.
Endnote 24EBITDA is a non-GAAP financial
measure, which excludes the following from net earnings: income tax
expense; finance costs; finance income; and depreciation.
Management believes that EBITDA is a valuable indicator of our
ability to generate liquidity by producing operating cash flow to
fund working capital needs, service debt obligations, and fund
capital expenditures. Management uses EBITDA for this purpose.
Adjusted EBITDA removes the effect of impairment charges;
acquisition/disposition gains/losses; foreign currency translation
gains/losses; other expense adjustments; and the impact of the
income tax expense, finance costs, finance income and depreciation
incurred in our equity method accounted investments. We believe
these items provide a greater level of consistency with the
adjusting items included in our Adjusted Net Earnings
reconciliation, with the exception that these amounts are adjusted
to remove any impact on finance costs/income, income tax expense
and/or depreciation as they do not affect EBITDA. We believe this
additional information will assist analysts, investors and other
stakeholders of Barrick in better understanding our ability to
generate liquidity from our full business, including equity method
investments, by excluding these amounts from the calculation as
they are not indicative of the performance of our core mining
business and not necessarily reflective of the underlying operating
results for the periods presented. EBITDA and adjusted EBITDA 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 EBITDA and Adjusted
EBITDA
($
millions) |
For the three months ended |
For the nine months ended |
|
9/30/20 |
|
|
6/30/20 |
|
9/30/19 |
|
9/30/20 |
|
|
9/30/19 |
|
Net earnings (loss) |
1,271 |
|
|
622 |
|
2,435 |
|
2,556 |
|
|
2,798 |
|
Income tax expense |
284 |
|
|
258 |
|
791 |
|
928 |
|
|
999 |
|
Finance costs, neta |
72 |
|
|
74 |
|
106 |
|
234 |
|
|
304 |
|
Depreciation |
574 |
|
|
566 |
|
559 |
|
1,664 |
|
|
1,460 |
|
EBITDA |
2,201 |
|
|
1,520 |
|
3,891 |
|
5,382 |
|
|
5,561 |
|
Impairment charges (reversals)
of long-lived assetsb |
4 |
|
|
23 |
|
(872 |
) |
(309 |
) |
|
(857 |
) |
Acquisition/disposition
(gains) lossesc |
(2 |
) |
|
8 |
|
(1,901 |
) |
(54 |
) |
|
(1,913 |
) |
Loss on currency translation |
16 |
|
|
2 |
|
40 |
|
34 |
|
|
56 |
|
Other expense (income)
adjustmentsd |
(90 |
) |
|
48 |
|
53 |
|
56 |
|
|
158 |
|
Unrealized (gains) losses on
non-hedge derivative instruments |
0 |
|
|
0 |
|
1 |
|
0 |
|
|
0 |
|
Income tax expense, net finance costs, and depreciation from equity
investees |
94 |
|
|
96 |
|
85 |
|
277 |
|
|
266 |
|
Adjusted EBITDA |
2,223 |
|
|
1,697 |
|
1,297 |
|
5,386 |
|
|
3,271 |
|
a. Finance costs exclude accretion.b.
For the three month period ended September 30, 2020, we recorded no
significant impairment charges or reversals. For the nine
month period ended September 30, 2020, net impairment reversals
primarily relate to non-current asset reversals at our Tanzanian
assets. Net impairment reversals for the three and nine month
periods ended September 30, 2019 mainly relate to non-current asset
reversals at Lumwana, partially offset by impairments at Cortez and
Lagunas Norte. c. Acquisition/disposition gains
for the nine month period ended September 30, 2020 primarily relate
to the gain on the sale of Massawa. For the three and nine
months ended September 30, 2019, acquisition/disposition gains
primarily relate to the gain on the remeasurement of Turquoise
Ridge to fair value as a result of its contribution to Nevada Gold
Mines.d. Other expense adjustments for the three and nine month
period ended September 30, 2020 primarily relate to the gain on the
remeasurement of the residual cash liability relating to our silver
sale agreement with Wheaton Precious Metals Corp., partially offset
by care and maintenance expenses at Porgera and Covid-19
donations. For the three month period ended June 30, 2020,
other expense adjustments primarily relate to care and maintenance
expenses at Porgera and Covid-19 donations. The nine month period
ended September 30, 2020 was further impacted by changes in the
discount rate assumptions on our closed mine rehabilitation
provision. For the three and nine month periods ended
September 30, 2019, other expense adjustments primarily relate to
severance costs as a result of the implementation of a number of
organizational reductions, the impact of changes in the discount
rate assumptions on our closed mine rehabilitation provision and
transaction costs related to Nevada Gold Mines and
Acacia.
Endnote 25Due to our hedging activities, which
are reflected in these sensitivities, we are partially protected
against changes in these factors.
Financial and Operating Highlights
|
For the three months ended |
|
|
For the nine months ended |
|
|
|
9/30/20 |
6/30/20 |
% Change |
|
|
9/30/19 |
% Change |
|
|
9/30/20 |
9/30/19 |
% Change |
|
|
Financial
Results ($ millions) |
|
|
|
|
|
|
|
|
Revenues |
3,540 |
|
3,055 |
|
16 |
|
% |
2,678 |
|
32 |
|
% |
9,316 |
|
6,834 |
|
36 |
|
% |
Cost of
sales |
1,927 |
|
1,900 |
|
1 |
|
% |
1,889 |
|
2 |
|
% |
5,603 |
|
4,924 |
|
14 |
|
% |
Net earningsa |
882 |
|
357 |
|
147 |
|
% |
2,277 |
|
(61 |
) |
% |
1,639 |
|
2,582 |
|
(37 |
) |
% |
Adjusted net earningsb |
726 |
|
415 |
|
75 |
|
% |
264 |
|
175 |
|
% |
1,426 |
|
602 |
|
137 |
|
% |
Adjusted EBITDAb |
2,223 |
|
1,697 |
|
31 |
|
% |
1,297 |
|
71 |
|
% |
5,386 |
|
3,271 |
|
65 |
|
% |
Adjusted EBITDA marginb,c |
63 |
% |
56 |
% |
13 |
|
% |
48 |
% |
31 |
|
% |
58 |
% |
48 |
% |
21 |
|
% |
Minesite sustaining capital
expendituresd |
415 |
|
420 |
|
(1 |
) |
% |
406 |
|
2 |
|
% |
1,205 |
|
926 |
|
30 |
|
% |
Project capital
expendituresd |
126 |
|
85 |
|
48 |
|
|
96 |
|
31 |
|
|
287 |
|
324 |
|
(11 |
) |
% |
Total
consolidated capital expendituresd,e |
548 |
|
509 |
|
8 |
|
|
502 |
|
9 |
|
|
1,508 |
|
1,255 |
|
20 |
|
% |
Net cash
provided by operating activities |
1,859 |
|
1,031 |
|
80 |
|
% |
1,004 |
|
85 |
|
% |
3,779 |
|
1,958 |
|
93 |
|
% |
Net cash provided by operating
activities marginf |
53 |
% |
34 |
% |
56 |
|
% |
37 |
% |
43 |
|
% |
41 |
% |
29 |
% |
41 |
|
% |
Free cash flowb |
1,311 |
|
522 |
|
151 |
|
% |
502 |
|
161 |
|
% |
2,271 |
|
703 |
|
223 |
|
% |
Net earnings per share (basic
and diluted) |
0.50 |
|
0.20 |
|
150 |
|
% |
1.30 |
|
(62 |
) |
% |
0.92 |
|
1.47 |
|
(37 |
) |
% |
Adjusted net earnings (basic)b
per share |
0.41 |
|
0.23 |
|
78 |
|
% |
0.15 |
|
173 |
|
% |
0.80 |
|
0.34 |
|
135 |
|
% |
Weighted average diluted common shares (millions of shares) |
1,778 |
|
1,778 |
|
0 |
|
% |
1,756 |
|
1 |
|
% |
1,778 |
|
1,751 |
|
2 |
|
% |
Operating Results |
|
|
|
|
|
|
|
|
Gold production (thousands of
ounces)g |
1,155 |
|
1,149 |
|
1 |
|
% |
1,306 |
|
(12 |
) |
% |
3,554 |
|
4,026 |
|
(12 |
) |
% |
Gold sold (thousands of
ounces)g |
1,249 |
|
1,224 |
|
2 |
|
% |
1,318 |
|
(5 |
) |
% |
3,693 |
|
4,055 |
|
(9 |
) |
% |
Market gold price ($/oz) |
1,909 |
|
1,711 |
|
12 |
|
% |
1,472 |
|
30 |
|
% |
1,735 |
|
1,364 |
|
27 |
|
% |
Realized gold priceb,g
($/oz) |
1,926 |
|
1,725 |
|
12 |
|
% |
1,476 |
|
30 |
|
% |
1,748 |
|
1,365 |
|
28 |
|
% |
Gold cost of sales (Barrick’s
share)g,h ($/oz) |
1,065 |
|
1,075 |
|
(1 |
) |
% |
1,065 |
|
0 |
|
% |
1,054 |
|
991 |
|
6 |
|
% |
Gold total cash costsb,g
($/oz) |
696 |
|
716 |
|
(3 |
) |
% |
710 |
|
(2 |
) |
% |
701 |
|
663 |
|
6 |
|
% |
Gold all-in sustaining
costsb,g ($/oz) |
966 |
|
1,031 |
|
(6 |
) |
% |
984 |
|
(2 |
) |
% |
984 |
|
883 |
|
11 |
|
% |
Copper production (millions of
pounds)i |
103 |
|
120 |
|
(14 |
) |
% |
112 |
|
(8 |
) |
% |
338 |
|
315 |
|
7 |
|
% |
Copper sold (millions of
pounds)i |
116 |
|
123 |
|
(6 |
) |
% |
65 |
|
78 |
|
% |
349 |
|
264 |
|
32 |
|
% |
Market copper price
($/lb) |
2.96 |
|
2.43 |
|
22 |
|
% |
2.63 |
|
13 |
|
% |
2.65 |
|
2.74 |
|
(3 |
) |
% |
Realized copper priceb,i
($/lb) |
3.28 |
|
2.79 |
|
18 |
|
% |
2.55 |
|
29 |
|
% |
2.78 |
|
2.78 |
|
0 |
|
% |
Copper cost of sales
(Barrick’s share)i,j ($/lb) |
1.97 |
|
2.08 |
|
(5 |
) |
% |
2.00 |
|
(2 |
) |
% |
2.01 |
|
2.10 |
|
(4 |
) |
% |
Copper C1 cash costsb,i
($/lb) |
1.45 |
|
1.55 |
|
(6 |
) |
% |
1.62 |
|
(10 |
) |
% |
1.52 |
|
1.62 |
|
(6 |
) |
% |
Copper all-in sustaining
costsb,i ($/lb) |
2.31 |
|
2.15 |
|
7 |
|
% |
2.58 |
|
(10 |
) |
% |
2.17 |
|
2.42 |
|
(10 |
) |
% |
|
As at9/30/20 |
|
As at6/30/20 |
|
% Change |
|
|
As at9/30/19 |
|
% Change |
|
|
|
|
|
Financial
Position ($ millions) |
|
|
|
|
|
|
|
|
Debt
(current and long-term) |
5,161 |
|
5,168 |
|
0 |
|
% |
5,560 |
|
(7 |
) |
% |
|
|
|
Cash and
equivalents |
4,744 |
|
3,743 |
|
27 |
|
% |
2,405 |
|
97 |
|
% |
|
|
|
Debt, net of cash |
417 |
|
1,425 |
|
(71 |
) |
% |
3,155 |
|
(87 |
) |
% |
|
|
|
- Net earnings represents net earnings attributable to the equity
holders of the Company.
- Adjusted net earnings, adjusted EBITDA, adjusted EBITDA margin,
free cash flow, adjusted net earnings per share, realized gold
price, all-in sustaining costs, total 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 82 to 106 of our third quarter MD&A.
- Represents adjusted EBITDA divided by revenue.
- Amounts presented on a consolidated cash basis. Project capital
expenditures are included in our calculation of all-in costs, but
not included in our calculation of all-in sustaining costs.
- Total consolidated capital expenditures also includes
capitalized interest.
- Represents net cash provided by operating activities divided by
revenue.
- Includes North Mara, Bulyanhulu and Buzwagi on a 84% basis
starting January 1, 2020 (and on a 63.9% basis from January 1, 2019
to September 30, 2019; notwithstanding the completion of the Acacia
transaction on September 17, 2019, we consolidated our interest in
Acacia and recorded a non-controlling interest of 36.1% in the
income statement for the entirety of the third quarter of 2019 as a
matter of convenience, and on a 100% basis from October 1, 2019 to
December 31, 2019), Pueblo Viejo on a 60% basis, South Arturo on a
36.9% basis from July 1, 2019 onwards as a result of its
contribution to Nevada Gold Mines (and on a 60% basis from January
1, 2019 to June 30, 2019), Veladero on a 50% basis, Loulo-Gounkoto
on an 80% basis, Kibali on a 45% basis, Tongon on an 89.7% basis,
and Morila on a 40% basis until the second quarter of 2019, which
reflects our equity share of production and sales. Also removes the
non-controlling interest of 38.5% Nevada Gold Mines from July 1,
2019 onwards.
- Gold cost of sales (Barrick’s share) is calculated as gold cost
of sales on an attributable basis (excluding sites in care and
maintenance) divided by ounces sold.
- Amounts reflect production and sales from Jabal Sayid and
Zaldívar on a 50% basis, which reflects our equity share of
production, and Lumwana.
- Copper cost of sales (Barrick’s share) is calculated as copper
cost of sales plus our equity share of cost of sales attributable
to Zaldívar and Jabal Sayid divided by pounds sold.
Consolidated Statements of Income
Barrick
Gold Corporation (in millions of United States dollars, except per
share data) (Unaudited) |
Three months endedSeptember 30, |
|
|
Nine months endedSeptember 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue (notes 5 and 6) |
$3,540 |
|
|
$2,678 |
|
|
$9,316 |
|
|
$6,834 |
|
Costs and expenses
(income) |
|
|
|
|
Cost of sales (notes 5 and
7) |
1,927 |
|
|
1,889 |
|
|
5,603 |
|
|
4,924 |
|
General and administrative
expenses |
50 |
|
|
68 |
|
|
161 |
|
|
181 |
|
Exploration, evaluation and
project expenses |
72 |
|
|
86 |
|
|
221 |
|
|
258 |
|
Impairment (reversals) charges
(notes 9B and 13) |
4 |
|
|
(872 |
) |
|
(309 |
) |
|
(857 |
) |
Loss on currency translation |
16 |
|
|
40 |
|
|
34 |
|
|
56 |
|
Closed mine rehabilitation |
8 |
|
|
5 |
|
|
105 |
|
|
46 |
|
Income from equity investees
(note 12) |
(95 |
) |
|
(38 |
) |
|
(210 |
) |
|
(116 |
) |
Other income (note 9A) |
(78 |
) |
|
(1,851 |
) |
|
(40 |
) |
|
(1,818 |
) |
Income before finance
costs and income taxes |
$1,636 |
|
|
$3,351 |
|
|
$3,751 |
|
|
$4,160 |
|
Finance costs, net |
(81 |
) |
|
(125 |
) |
|
(267 |
) |
|
(363 |
) |
Income before income
taxes |
$1,555 |
|
|
$3,226 |
|
|
$3,484 |
|
|
$3,797 |
|
Income tax expense (note 10) |
(284 |
) |
|
(791 |
) |
|
(928 |
) |
|
(999 |
) |
Net income |
$1,271 |
|
|
$2,435 |
|
|
$2,556 |
|
|
$2,798 |
|
Attributable
to: |
|
|
|
|
Equity holders of Barrick Gold
Corporation |
$882 |
|
|
$2,277 |
|
|
$1,639 |
|
|
$2,582 |
|
Non-controlling interests |
$389 |
|
|
$158 |
|
|
$917 |
|
|
$216 |
|
|
|
|
|
|
Earnings per share
data attributable to the equity holders of Barrick Gold Corporation
(note 8) |
|
|
|
|
Net income |
|
|
|
|
Basic |
$0.50 |
|
|
$1.30 |
|
|
$0.92 |
|
|
$1.47 |
|
Diluted |
$0.50 |
|
|
$1.30 |
|
|
$0.92 |
|
|
$1.47 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2020
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 endedSeptember 30, |
|
Nine months endedSeptember 30, |
|
|
2020 |
|
|
2019 |
|
2020 |
|
|
2019 |
|
Net income |
$1,271 |
|
|
$2,435 |
|
$2,556 |
|
|
$2,798 |
|
Other comprehensive (loss) income, net of
taxes |
|
|
|
|
Items that may be
reclassified subsequently to profit or loss: |
|
|
|
|
Unrealized gains (losses) on derivatives designated as cash flow
hedges, net of tax $nil, $nil, $nil and $nil |
(3 |
) |
|
— |
|
(4 |
) |
|
— |
|
Realized
(gains) losses on derivatives designated as cash flow hedges, net
of tax $nil, $nil, $nil and $nil |
3 |
|
|
— |
|
3 |
|
|
— |
|
Currency
translation adjustments, net of tax $nil, $nil, $nil and $nil |
(1 |
) |
|
(1 |
) |
(6 |
) |
|
(4 |
) |
Items that will not be
reclassified to profit or loss: |
|
|
|
|
Actuarial gain (loss) on post employment benefit obligations, net
of tax $1, $nil, $1 and $nil |
— |
|
|
— |
|
(2 |
) |
|
— |
|
Net
change on equity investments, net of tax ($34), $nil, ($34) and
$nil |
38 |
|
|
53 |
|
131 |
|
|
60 |
|
Total other comprehensive income |
37 |
|
|
52 |
|
122 |
|
|
56 |
|
Total comprehensive income |
$1,308 |
|
|
$2,487 |
|
$2,678 |
|
|
$2,854 |
|
Attributable to: |
|
|
|
|
Equity
holders of Barrick Gold Corporation |
$919 |
|
|
$2,329 |
|
$1,761 |
|
|
$2,638 |
|
Non-controlling interests |
$389 |
|
|
$158 |
|
$917 |
|
|
$216 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2020
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 endedSeptember 30, |
|
|
Nine months endedSeptember 30, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
OPERATING
ACTIVITIES |
|
|
|
|
Net income |
$1,271 |
|
|
$2,435 |
|
|
$2,556 |
|
|
$2,798 |
|
Adjustments for the following
items: |
|
|
|
|
Depreciation |
574 |
|
|
559 |
|
|
1,664 |
|
|
1,460 |
|
Finance costs, net |
83 |
|
|
129 |
|
|
280 |
|
|
381 |
|
Impairment (reversals) charges (notes 9B and 13) |
4 |
|
|
(872 |
) |
|
(309 |
) |
|
(857 |
) |
Income tax expense (note 10) |
284 |
|
|
791 |
|
|
928 |
|
|
999 |
|
Remeasurement of Turquoise Ridge to fair value |
— |
|
|
(1,886 |
) |
|
— |
|
|
(1,886 |
) |
Gain on sale of non-current assets |
(2 |
) |
|
(15 |
) |
|
(54 |
) |
|
(27 |
) |
Loss on currency translation |
16 |
|
|
40 |
|
|
34 |
|
|
56 |
|
Change in working capital
(note 11) |
(3 |
) |
|
67 |
|
|
(344 |
) |
|
(263 |
) |
Other
operating activities (note 11) |
(244 |
) |
|
(126 |
) |
|
(226 |
) |
|
(112 |
) |
Operating cash flows before
interest and income taxes |
1,983 |
|
|
1,122 |
|
|
4,529 |
|
|
2,549 |
|
Interest paid |
(19 |
) |
|
(31 |
) |
|
(173 |
) |
|
(196 |
) |
Income
taxes paid |
(105 |
) |
|
(87 |
) |
|
(577 |
) |
|
(395 |
) |
Net cash provided by operating activities |
1,859 |
|
|
1,004 |
|
|
3,779 |
|
|
1,958 |
|
INVESTING
ACTIVITIES |
|
|
|
|
Property, plant and
equipment |
|
|
|
|
Capital expenditures (note 5) |
(548 |
) |
|
(502 |
) |
|
(1,508 |
) |
|
(1,255 |
) |
Sales proceeds |
8 |
|
|
13 |
|
|
24 |
|
|
31 |
|
Investment sales
(purchases) |
2 |
|
|
3 |
|
|
208 |
|
|
(4 |
) |
Divestitures (note 4) |
— |
|
|
— |
|
|
256 |
|
|
— |
|
Cash acquired in merger |
— |
|
|
— |
|
|
— |
|
|
751 |
|
Other
investing activities (note 11) |
84 |
|
|
103 |
|
|
139 |
|
|
165 |
|
Net cash used in investing activities |
(454 |
) |
|
(383 |
) |
|
(881 |
) |
|
(312 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
Lease repayments |
(8 |
) |
|
(5 |
) |
|
(20 |
) |
|
(23 |
) |
Debt repayments |
— |
|
|
(264 |
) |
|
(351 |
) |
|
(280 |
) |
Dividends |
(141 |
) |
|
(67 |
) |
|
(387 |
) |
|
(461 |
) |
Funding from non-controlling
interests |
— |
|
|
102 |
|
|
1 |
|
|
116 |
|
Disbursements to
non-controlling interests |
(259 |
) |
|
(133 |
) |
|
(693 |
) |
|
(161 |
) |
Other
financing activities |
— |
|
|
(2 |
) |
|
(15 |
) |
|
(2 |
) |
Net cash used in financing activities |
(408 |
) |
|
(369 |
) |
|
(1,465 |
) |
|
(811 |
) |
Effect of exchange rate changes on cash and
equivalents |
4 |
|
|
— |
|
|
(3 |
) |
|
(1 |
) |
Net increase in cash and
equivalents |
1,001 |
|
|
252 |
|
|
1,430 |
|
|
834 |
|
Cash and equivalents at the beginning of
period |
3,743 |
|
|
2,153 |
|
|
3,314 |
|
|
1,571 |
|
Cash and equivalents at the end of period |
$4,744 |
|
|
$2,405 |
|
|
$4,744 |
|
|
$2,405 |
|
The notes to these unaudited condensed interim
financial statements, which are contained in the Third Quarter
Report 2020 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 September 30, |
|
|
As at December 31, |
|
|
2020 |
|
|
2019 |
|
ASSETS |
|
|
Current assets |
|
|
Cash and equivalents (note 14A) |
$4,744 |
|
|
$3,314 |
|
Accounts receivable |
509 |
|
|
363 |
|
Inventories |
2,111 |
|
|
2,289 |
|
Other current assets |
495 |
|
|
565 |
|
Total current assets (excluding
assets classified as held for sale) |
$7,859 |
|
|
$6,531 |
|
Assets classified as held for sale |
— |
|
|
356 |
|
Total current assets |
$7,859 |
|
|
$6,887 |
|
Non-current assets |
|
|
Equity in investees (note 12) |
4,643 |
|
|
4,527 |
|
Property, plant and equipment |
24,698 |
|
|
24,141 |
|
Goodwill |
4,769 |
|
|
4,769 |
|
Intangible assets |
170 |
|
|
226 |
|
Deferred income tax assets |
165 |
|
|
235 |
|
Non-current portion of inventory |
2,392 |
|
|
2,300 |
|
Other assets |
1,420 |
|
|
1,307 |
|
Total assets |
$46,116 |
|
|
$44,392 |
|
LIABILITIES AND
EQUITY |
|
|
Current liabilities |
|
|
Accounts payable |
$1,032 |
|
|
$1,155 |
|
Debt (note 14B) |
21 |
|
|
375 |
|
Current income tax liabilities |
339 |
|
|
224 |
|
Other current liabilities |
359 |
|
|
622 |
|
Total current liabilities |
$1,751 |
|
|
$2,376 |
|
Non-current liabilities |
|
|
Debt (note 14B) |
5,140 |
|
|
5,161 |
|
Provisions |
3,311 |
|
|
3,114 |
|
Deferred income tax liabilities |
3,064 |
|
|
3,091 |
|
Other liabilities |
1,200 |
|
|
823 |
|
Total liabilities |
$14,466 |
|
|
$14,565 |
|
Equity |
|
|
Capital stock (note 16) |
$29,235 |
|
|
$29,231 |
|
Deficit |
(8,474 |
) |
|
(9,722 |
) |
Accumulated other comprehensive loss |
— |
|
|
(122 |
) |
Other |
2,038 |
|
|
2,045 |
|
Total equity attributable to Barrick Gold Corporation
shareholders |
$22,799 |
|
|
$21,432 |
|
Non-controlling interests |
8,851 |
|
|
8,395 |
|
Total equity |
$31,650 |
|
|
$29,827 |
|
Contingencies and commitments (notes 5 and 17) |
|
|
Total liabilities and equity |
$46,116 |
|
|
$44,392 |
|
The notes to these unaudited condensed interim
financial statements, which are contained in the Third Quarter
Report 2020 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) |
CommonShares (inthousands) |
|
Capital stock |
|
Retainedearnings (deficit) |
|
|
Accumulatedothercomprehensiveincome (loss)1 |
|
|
Other2 |
|
|
Total equityattributable toshareholders |
|
|
Non-controllinginterests |
|
|
Totalequity |
|
At January 1, 2020 |
1,777,927 |
|
$29,231 |
|
($9,722 |
) |
|
($122 |
) |
|
$2,045 |
|
|
$21,432 |
|
|
$8,395 |
|
|
$29,827 |
|
Net income |
— |
|
— |
|
1,639 |
|
|
— |
|
|
— |
|
|
1,639 |
|
|
917 |
|
|
2,556 |
|
Total other comprehensive income (loss) |
— |
|
— |
|
— |
|
|
122 |
|
|
— |
|
|
122 |
|
|
— |
|
|
122 |
|
Total comprehensive income |
— |
|
— |
|
1,639 |
|
|
122 |
|
|
— |
|
|
1,761 |
|
|
917 |
|
|
2,678 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends |
— |
|
— |
|
(387 |
) |
|
— |
|
|
— |
|
|
(387 |
) |
|
— |
|
|
(387 |
) |
Issuance of 16% interest in Tanzania mines (note 13) |
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
238 |
|
|
238 |
|
Sale of Acacia exploration properties |
— |
|
— |
— |
|
|
— |
|
|
(13 |
) |
|
(13 |
) |
|
13 |
|
|
— |
|
Issued on exercise of stock options |
70 |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Funding from non-controlling interests |
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
Disbursements to non-controlling interests |
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(713 |
) |
|
(713 |
) |
Dividend reinvestment plan (note 16) |
129 |
|
4 |
|
(4 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Share-based payments |
— |
|
— |
|
— |
|
|
— |
|
|
6 |
|
|
6 |
|
|
— |
|
|
6 |
|
Total transactions with owners |
199 |
|
4 |
|
(391 |
) |
|
— |
|
|
(7 |
) |
|
(394 |
) |
|
(461 |
) |
|
(855 |
) |
At September 30, 2020 |
1,778,126 |
|
$29,235 |
|
($8,474 |
) |
|
$— |
|
|
$2,038 |
|
|
$22,799 |
|
|
$8,851 |
|
|
$31,650 |
|
|
|
|
|
|
|
|
|
|
At January 1, 2019 |
1,167,847 |
|
$20,883 |
|
($13,453 |
) |
|
($158 |
) |
|
$321 |
|
|
$7,593 |
|
|
$1,792 |
|
|
$9,385 |
|
Net income |
— |
|
— |
|
2,582 |
|
|
— |
|
|
— |
|
|
2,582 |
|
|
216 |
|
|
2,798 |
|
Total other comprehensive income |
— |
|
— |
|
— |
|
|
56 |
|
|
— |
|
|
56 |
|
|
— |
|
|
56 |
|
Total comprehensive income |
— |
|
— |
|
2,582 |
|
|
56 |
|
|
— |
|
|
2,638 |
|
|
216 |
|
|
2,854 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends |
— |
|
— |
|
(131 |
) |
|
— |
|
|
— |
|
|
(131 |
) |
|
— |
|
|
(131 |
) |
Merger with Randgold Resources Limited |
583,669 |
|
7,903 |
|
— |
|
|
— |
|
|
— |
|
|
7,903 |
|
|
874 |
|
|
8,777 |
|
Nevada Gold Mines JV with Newmont Goldcorp Corporation |
— |
|
— |
|
— |
|
|
— |
|
|
1,645 |
|
|
1,645 |
|
|
5,909 |
|
|
7,554 |
|
Acquisition of 36.1% of Acacia Mining plc |
24,837 |
|
423 |
|
— |
|
|
— |
|
|
70 |
|
|
493 |
|
|
(495 |
) |
|
(2 |
) |
Issued on exercise of stock options |
130 |
|
1 |
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
1 |
|
Funding from non-controlling interests |
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
116 |
|
|
116 |
|
Disbursements to non-controlling interests |
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(161 |
) |
|
(161 |
) |
Dividend reinvestment plan (note 16) |
1,299 |
|
18 |
|
(18 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Share-based payments |
— |
|
— |
|
— |
|
|
— |
|
|
7 |
|
|
7 |
|
|
— |
|
|
7 |
|
Total transactions with owners |
609,935 |
|
8,345 |
|
(149 |
) |
|
— |
|
|
1,722 |
|
|
9,918 |
|
|
6,243 |
|
|
16,161 |
|
At September 30, 2019 |
1,777,782 |
|
$29,228 |
|
($11,020 |
) |
|
($102 |
) |
|
$2,043 |
|
|
$20,149 |
|
|
$8,251 |
|
|
$28,400 |
|
1 Includes cumulative translation losses at
September 30, 2020: $94 million (September 30, 2019:
$87 million).2 Includes additional paid-in capital as at
September 30, 2020: $2,000 million (December 31,
2019: $2,007 million; September 30, 2019: $1,998
million).The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2020
available on our website are an integral part of these consolidated
financial statements.
Corporate Office
Barrick Gold Corporation161 Bay Street, Suite
3700Toronto, Ontario M5J 2S1Canada
Telephone: +1 416 861-9911Email: investor@barrick.comWebsite:
www.barrick.com
Shares Listed
GOLD The New York Stock Exchange
ABX The Toronto Stock Exchange
Transfer Agents and Registrars
AST Trust Company (Canada)P.O. Box 700, Postal
Station BMontreal, Quebec H3B 3K3or American 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
Enquiries
President and CEOMark Bristow+1 647 205 7694+44
788 071 1386
Senior EVP and CFOGraham Shuttleworth+1 647 262
2095+44 779 771 1338
Investor and Media RelationsKathy du Plessis+44
20 7557 7738Email: barrick@dpapr.com
Cautionary Statement on Forward-Looking
Information
Certain 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 “deliver”, "plan", "objective", "expected", “potential”,
“strategy”, “will”, "continues", “ongoing” and similar expressions
identify forward-looking statements. In particular, this press
release contains forward-looking statements including, without
limitation, with respect to: Barrick’s forward-looking production
guidance and estimates of future costs; Barrick’s non-core asset
disposal strategy, including the sale of Barrick’s interest in the
Morila mine and Barrick’s global closure strategy; production
rates; Barrick’s response to the government of Papua New Guinea’s
decision not to extend Porgera’s Special Mining Lease; the
agreement in principle for a new Porgera partnership with Papua New
Guinea and efforts to reach a binding memorandum of agreement
consistent with those principles; the duration of the temporary
suspension of operations at Porgera; potential mineralization;
potential exploration targets and mineral resource potential,
including reserve replenishment; the new joint venture with the
Government of Tanzania and the potential for Barrick’s North Mara
and Bulyanhulu mines to become a Tier One complex; future dividend
levels; Barrick’s engagement with local communities to manage the
Covid-19 pandemic; the anticipated benefits from Barrick’s clean
energy strategy; future investments in community projects and
contributions to local economies; Barrick’s human capital
management strategy; the development of the third underground mine
at Gounkoto and the timeline for first production; and 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 projects in the early stages of evaluation
and for which additional engineering and other analysis is
required; 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; non-renewal of key licenses by
governmental authorities, including non-renewal of Porgera’s
Special Mining Lease; timing of receipt of, or failure to comply
with, necessary permits and approvals; uncertainty whether some or
all of Barrick's 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; risks associated with illegal
and artisanal mining; risks associated with new diseases, epidemics
and pandemics, including the effects and potential effects of the
global Covid-19 pandemic; disruption of supply routes which may
cause delays in construction and mining activities; 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;
our ability to successfully integrate acquisitions or complete
divestitures, including our ability to successfully reintegrate the
operations of the former Acacia; 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; and availability and increased costs associated
with mining inputs and labor. Barrick also cautions that its 2020
guidance may be impacted by the unprecedented business and social
disruption caused by the spread of Covid-19. 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. We disclaim 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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