All amounts expressed in U.S. dollars unless
otherwise indicated
- Barrick reported a net loss of $412 million ($0.35
per share), and adjusted net earnings1 of $89
million ($0.08 per share) for the third quarter.
- The Company reported third quarter revenues of $1.84
billion, net cash provided by operating activities (“operating cash
flow“) of $706 million, and free cash flow2 of $319
million.
- Gold production in the third quarter was 1.15 million ounces,
at a cost of sales applicable to gold3
of $850 per ounce, all-in sustaining
costs4 of $785 per ounce, and cash
costs4 of $587 per ounce.
- Copper production was 106 million pounds, at a cost of
sales applicable to copper3 of $2.18 per pound,
all-in sustaining costs5 of $2.71 per pound, and C1
cash costs5 of $1.94 per pound.
- Full-year gold production and cost guidance remains unchanged
at 4.5-5.0 million ounces, at a cost of sales3 of
$810-$850 per ounce, all-in sustaining costs4 of
$765-$815 per ounce, and cash costs4 of $540-$575 per
ounce. We expect gold production to be approximately 1.25 million
ounces in the fourth quarter.
- We continue to expect full-year copper production in the range
of 345-410 million pounds, at a cost of sales3 of
$2.00-$2.30 per pound, all-in sustaining costs5 of
$2.55-$2.85 per pound, and C1 cash costs5 of $1.80-$2.00
per pound.
- Corporate administration cost guidance for 2018 has been
reduced from roughly $275 million to approximately $235 million,
reflecting savings associated with decentralization.
- During the quarter, Barrick announced a transformational
all-share merger with Randgold Resources Ltd. that will create an
industry-leading gold company powered by a common vision of
long-term value creation.
- Organic growth projects in Nevada and the Dominican Republic
continue to advance according to schedule and in line with cost
estimates.
- Infill and step out drilling at the Fourmile discovery in
Nevada has identified further high grade mineralization, expanding
the potential project footprint.
- In September, the Company signed a mutual investment agreement
with Shandong Gold Group Co., Ltd. (“Shandong Gold“), strengthening
Barrick’s partnership with one of China’s leading mining
companies.
TORONTO, Oct. 24, 2018 (GLOBE NEWSWIRE) --
Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or the
“Company”) today reported third quarter results for the three-month
period ending September 30, 2018. Gold production increased to
1.15 million ounces in the third quarter, while cost of sales on a
per ounce basis3 was approximately four percent lower
than the second quarter of 2018. All-in sustaining costs and cash
costs were down by roughly eight percent and three percent,
respectively, over the same period. Third quarter operating cash
flow of $706 million, and free cash flow2 of $319
million, was significantly higher than the second quarter of 2018,
driven by higher production and lower costs. Copper production and
costs also improved in the third quarter, as expected. The Company
remains on track to meet its full-year gold and copper production
guidance.
During the third quarter, Barrick and Randgold
Resources Ltd. (“Randgold”) announced a transformational all-share
merger that will create an industry-leading gold company powered by
a common vision of long-term value creation. The combined company
will have the largest portfolio of tier one gold assets6
in the industry, including five of the world’s top 10 tier one gold
mines, and two potential tier one mines under development. With
John Thornton as Executive Chairman, and Mark Bristow as President
and CEO, the combined company will be led by a proven management
team of owners with a successful track record in both complex and
established jurisdictions. Superior operating metrics, including
the highest adjusted EBITDA margin7 and the lowest total
cash cost8 position among senior gold peers9,
will support sustainable investment in growth and shareholder
returns.
Since the proposed merger was announced, Barrick
and Randgold shares have risen by 25 percent and 28 percent,
respectively, creating $4.8 billion in combined market
value.10 Over the same period, the senior gold
peers9 have risen by an average of approximately three
percent.10 A special meeting of Barrick shareholders
will be held on November 5 to approve the issuance of Barrick
common shares in connection with the merger, as well as to approve
the continuance of Barrick to the Province of British Columbia.
Leading independent proxy advisory firms Institutional Shareholder
Services and Glass Lewis have recommended that shareholders of both
companies vote in favor of the proposed merger. For more
information about the merger, and details on how to vote, please
visit www.barrick.com/a-new-champion.
FINANCIAL HIGHLIGHTS AND BALANCE
SHEET
The Company reported a net loss of $412 million
($0.35 per share) in the third quarter, and adjusted net
earnings1 of $89 million ($0.08 per share). The net loss
primarily reflects a $405 million impairment charge at the Lagunas
Norte mine in Peru (see page 5 for more details). Lower adjusted
net earnings compared to the prior-year period primarily reflect
lower realized gold and copper prices11, increased
direct mining costs primarily due to higher fuel consumption and
prices, and planned maintenance activities at Pueblo Viejo during
the third quarter. These declines were partially offset by
insurance proceeds associated with the KCGM pit wall incident, a
reduction in general and administrative expenses, and lower
depreciation expense.
Significant adjusting items (pre-tax and
non-controlling interest effects) in the third quarter of 2018
include:
- $431 million in net impairment charges primarily related to the
asset impairment of Lagunas Norte;
- $62 million in foreign currency translation losses primarily
related to the significant weakening of the Argentine peso;
and
- $68 million in other expense adjustments, mainly relating to
debt extinguishment costs of $29 million and the settlement of a
supplier contract dispute of $27 million inherited as part of the
Equinox acquisition in 2011.
Refer to page 51 of Barrick’s third quarter
MD&A for a full list of reconciling items between net earnings
and adjusted net earnings for the current and prior-year
periods.
Operating cash flow increased to $706 million,
compared to $532 million in the third quarter of 2017, primarily
due to a favorable change in working capital, and a decrease in
interest expense as a result of debt reduction activities. This was
partially offset by lower realized gold and copper
prices.11 Stronger operating cash flow drove free cash
flow of $319 million—a 42 percent increase compared to the
prior-year period.
Over the course of 2018, we have continued to
advance the implementation of our decentralized operating model,
reallocating roles to operations where appropriate, and eliminating
those no longer required (including 235 overhead roles eliminated
in 2018 to date). As a result of decentralization efforts, we now
expect corporate administration expenses to be approximately $235
million in 2018, including $36 million in one-time severance
expenses, compared to our original guidance of roughly $275
million. The indicative annualized savings as a result of this
decentralization are approximately $100 million.
As previously reported, during the month of
July, Barrick completed a make-whole repurchase of the outstanding
principal of approximately $629 million on the Company’s 4.40
percent notes due in 2021. The Company’s total debt is now $5.7
billion, and debt less cash (net debt) is $4.0 billion. Since 2013,
Barrick has reduced its total debt by $10 billion. The Company has
less than $100 million in debt due before 202012, and
more than 85 percent of our outstanding debt matures after 2032.
Further debt reduction will depend on cash flows, and will be
evaluated against alternative uses of cash.
OPERATING HIGHLIGHTS
Barrick produced 1.15 million ounces of gold in
the third quarter of 2018, at a cost of sales3 of $850
per ounce, all-in sustaining costs4 of $785 per ounce,
and cash costs4 of $587 per ounce. As anticipated, gold
production was higher compared to the second quarter of 2018,
primarily driven by improved throughput and grade at Barrick
Nevada. We anticipate gold production to be approximately 1.25
million ounces in the fourth quarter, with full-year production at
the lower end of our 2018 guidance range of 4.5-5.0 million ounces
of gold.
On a per ounce basis, cost of sales applicable
to gold3 was four percent higher than the prior-year
period, primarily due to the impact of fewer ounces sold, higher
direct mining costs attributable to increased fuel consumption and
prices, and planned maintenance activities at Pueblo Viejo. A two
percent increase in all-in sustaining costs4 compared to
the third quarter of 2017 reflects higher direct mining costs,
partially offset by lower mine site sustaining capital
expenditures.
The Company produced 106 million pounds of
copper in the third quarter, at a cost of
sales3 of $2.18 per pound, all-in
sustaining costs5 of $2.71 per pound, and C1
cash costs5 of $1.94 per pound. Improved copper
production compared to the second quarter of 2018 was primarily
driven by higher production at Lumwana, reflecting a steady
improvement in grade and recovery, and improved crusher
reliability.
On a per pound basis, cost of sales applicable
to copper3 increased compared to the prior-year period,
primarily due to the impact of lower sales volume on unit
production costs, higher direct mining costs at Lumwana and Jabal
Sayid, and lower capitalized stripping at Zaldívar. Higher copper
all-in sustaining costs5 compared to the prior-year
period primarily reflects higher direct mining costs, and higher
mine site sustaining capital expenditures.
Please see page 36 of Barrick’s third quarter
MD&A for individual operating segment performance details.
Detailed mine site guidance information can be found in Appendix 1
of this press release.
Gold |
Third Quarter 2018 |
2018 Guidance |
Production13 (000s of ounces) |
1,149 |
4,500 - 5,000 |
Cost of sales applicable to gold3 ($ per ounce) |
850 |
810 - 850 |
Cash costs4 ($ per ounce) |
587 |
540 - 575 |
All-in sustaining costs4 ($ per ounce) |
785 |
765 - 815 |
Copper |
|
|
Production13 (millions of pounds) |
106 |
345 - 410 |
Cost of sales applicable to copper3 ($ per pound) |
2.18 |
2.00 - 2.30 |
C1
cash costs5 ($ per pound) |
1.94 |
1.80 - 2.00 |
All-in sustaining costs5 ($ per
pound) |
2.71 |
2.55 - 2.85 |
Total Attributable Capital
Expenditures14 ($ millions) |
346 |
1,400 - 1,600 |
EXPLORATION AND GROWTH
GOLDRUSH CAMP, NEVADA
Fourmile Discovery - Step out and infill
drilling identifies further high grade
mineralization15
Ongoing drilling at the Fourmile discovery, located approximately
two kilometers north of the Goldrush project, continues to
intersect high grade mineralization across a number of
stratigraphic horizons. Assay results completed during the third
quarter have further expanded the project footprint to the north
and the south.
Step out drilling to the northwest has returned
assay results including 20.4 meters grading 54.1 grams of gold per
tonne, and 4.6 meters grading 60.9 grams of gold per tonne. In
addition, step out drilling to the south, in the direction of
Goldrush, has identified further high grade mineralization,
including 39.3 meters grading 25.6 grams of gold per tonne. Infill
drilling in the core project area continues to confirm the
continuity of high grade mineralization, with recent assay results
including 22.9 meters grading 16.5 grams of gold per tonne. Further
infill and wide spaced step out drilling will continue for the
remainder of 2018, with a modest initial inferred resource expected
by the end of the year.
A drill hole to the west of Fourmile has also
identified a new, early stage target called Blasdel. Early results
are encouraging and demonstrate the potential for a new trend
parallel to Goldrush and Fourmile. We have added an additional
drill rig in this area to further investigate this prospective
target. Please see endnote 15 for a significant intercepts table
including recent Fourmile drilling.
Goldrush Project - Decline development
advancing according to plan
Decline construction at Goldrush is expected to accelerate
following the mobilization of the development contractor on site
during the third quarter. As of September 30, we have spent
$33 million (including $8 million in the third quarter of 2018) out
of a total estimated capital cost of $1.0 billion at Goldrush.
Exploration twin declines will provide access to the orebody at
depth, which will enable further drilling, as well as the
conversion of existing resources to reserves. These declines can be
converted into production declines in the future. Goldrush
currently has proven and probable gold reserves of 1.5 million
ounces16, and measured and indicated gold resources
of 9.4 million ounces16, with significant potential to
identify additional resources once underground access to drill the
deposit is established. When in full operation, the Goldrush
underground project is expected to produce approximately 500,000
ounces of gold per year, at a cost of sales3 of roughly
$750 per ounce, and all-in sustaining costs4 of
approximately $640 per ounce.
TURQUOISE RIDGE, NEVADA (75 PERCENT
BARRICK)17
Shaft construction progressing on
schedule
Construction of a third shaft at Turquoise Ridge continues to
advance according to schedule and within budget. Ground was broken
on the shaft site during the third quarter, and the operation is
now taking delivery of hoist components. Shaft winches have also
been delivered, and fabrication of the shaft headframe has
commenced. The construction of a third shaft at Turquoise Ridge is
expected to increase annual production to more than 500,000 ounces
per year (100 percent basis), at an average cost of
sales3 of around $720 per ounce, and average all-in
sustaining costs4 of roughly $630 per ounce. As of
September 30, we have spent $59 million (including $16 million in
the third quarter of 2018) out of a total estimated capital cost of
$300-$325 million (100 percent basis) on the construction of the
third shaft at Turquoise Ridge. Initial production from the new
shaft is expected to begin in 2022, with sustained production from
2023.
Mine exploration drilling at Turquoise Ridge has
continued to expand the deposit in multiple directions, building on
high grade results reported in the second quarter, and underscoring
the potential for the operation to become a tier one gold mine.
Recent assay results from the North Zone Getchell program include
16 meters grading 11.1 grams of gold per tonne, extending
mineralization along the fault by 75 meters from the nearest
orebody. Additional drilling on the Getchell Fault is slated for
2019.
Earlier this year, the Bas Pond East program
extended mineralization to the northeast by 120 meters. Subsequent
drilling has encountered significant grades, further extending
mineralization to the west by 55 meters. This includes one
intercept of 2.7 meters grading 18.2 grams of gold per tonne, and
4.7 meters grading 9.6 grams of gold per tonne. Drilling has also
extended mineralization to the north by 35 meters, with an
intercept of 3.8 meters grading 13.9 grams of gold per tonne.
Follow-up drilling will continue in this area for the remainder of
2018 and in 2019. Please see endnote 17 for a significant
intercepts table including recent Turquoise Ridge drilling.
CORTEZ DEEP SOUTH,
NEVADA18
Draft Environmental Impact Statement
published
The draft Environmental Impact Statement for the Deep South project
was published on October 22, and will remain open for public
comment until December 5. As of September 30, we have spent $31
million (including $3 million in the third quarter of 2018) out of
a total estimated capital cost of $106 million on the Deep South
Expansion. Initial production from Deep South is expected in 2022.
The project is expected to contribute approximately 300,000 ounces
of annual gold production when fully ramped up between 2024 and
2028, at a cost of sales3 of $650 per ounce, and all-in
sustaining costs4 of $580 per ounce. Deep South will
utilize infrastructure which has already been approved under
current plans to expand mining in the Lower Zone of the Cortez
underground mine, including the new Rangefront twin declines, and
other underground infrastructure already in use and under
construction.
PUEBLO VIEJO, DOMINICAN REPUBLIC (60
PERCENT BARRICK)19
Pilot pre-oxidation heap leach in
operation, and pilot flotation plant well advanced
Barrick is advancing prefeasibility-level studies for a plant
expansion at the Pueblo Viejo mine that could increase throughput
by roughly 50 percent to 12 million tonnes per year, allowing the
mine to maintain average annual gold production of approximately
800,000 ounces after 2022 (100 percent basis). The prefeasibility
study is evaluating options including the addition of a
pre-oxidation heap leach pad with a capacity of eight million
tonnes per year, a new mill and flotation concentrator with a
capacity of four million tonnes per year, and additional tailings
capacity. The project has the potential to convert roughly seven
million ounces of measured and indicated resources to proven
and probable reserves (100 percent basis).16 The pilot
pre-oxidation heap leach pad is now in operation, and construction
of the pilot flotation circuit is well advanced, including the
holding tank and thickener. Both pilots will test metallurgy and
recoveries in support of the prefeasibility study for the
project.
LAGUNAS NORTE REFRACTORY ORE PROJECT,
PERU
In the third quarter of 2018, we updated a
feasibility study for proposed projects relating to the processing
of carbonaceous materials (“CMOP”) and the treatment of
refractory sulphide ore (“PMR”) at Lagunas Norte in Peru. As a
result, we are now advancing the CMOP project to detailed
engineering, but we are not proceeding with PMR at this time. An
impairment assessment was undertaken, and a non-current asset
impairment of $405 million was recognized in the third quarter of
2018.
MUTUAL INVESTMENT AGREEMENT WITH
SHANDONG GOLD
During the third quarter, Barrick announced a
mutual investment agreement with Shandong Gold, further
strengthening Barrick’s partnership with one of China’s leading
mining companies. Under the Agreement, Shandong Gold will purchase
up to $300 million of Barrick shares, and Barrick will invest an
equivalent amount in shares of Shandong Gold Mining Co., Ltd., a
publicly-listed company controlled by Shandong Gold. Shares will be
purchased in the open market. To date, Barrick has purchased
approximately $120 million of shares of Shandong Gold Mining Co.,
Ltd. Over the same period, Shandong Gold had purchased
approximately $109 million of shares of Barrick.
Barrick and Shandong Gold are 50-50 joint
venture partners at the Veladero mine in Argentina—the first step
in the partnership between the two companies. As a second step,
Shandong Gold is currently carrying out an independent evaluation
of Barrick’s Lama project, including an analysis of potential
synergies between Lama and the nearby Veladero operation. Barrick
and Shandong Gold have also created internal working groups to
share technical expertise and best practices focused on
best-in-class mining practices and innovation.
ARGENTINA IMPORT DUTIES
In the third quarter of 2018, the Argentine
government re-established customs duties for all exports from
Argentina. Effective for the period of September 2018 to December
31, 2020, exports of doré are subject to a 12 percent duty, capped
at ARS 4.00 per USD exported. The Company is currently reviewing
these changes in the context of the existing tax stability benefit
granted to Veladero, and is engaging in discussions with the
federal government to clarify the impact of the export duty on
Veladero’s operations. Based on our initial analysis, the
re-establishment of the customs duties will not have a significant
adverse effect on the long-term fair value of the mine.
ACACIA MINING PLC
Discussions between the Government of Tanzania
and Barrick concerning the proposed framework for Acacia Mining
plc’s operations in Tanzania remain ongoing. Barrick is conducting
these discussions in its capacity as the largest shareholder of
Acacia, in an effort to reach a resolution that is agreeable to all
parties. Barrick is not negotiating on behalf of Acacia. In order
to allow the process to continue in an orderly manner and without
an arbitrary deadline, Barrick has not provided a timetable for the
completion of the discussions. If Barrick is able to conclude
discussions satisfactorily with the Government, the proposal will
be provided to the Independent Committee of the Acacia Board of
Directors for its consideration. Barrick notes that Acacia has been
exposed to an increasingly challenging operating environment in
recent weeks. Barrick shares Acacia’s concerns about the increasing
risks to the safety and security of its people, and continues to
believe that a negotiated resolution is in the best interest of all
parties. Barrick holds a 63.9 percent equity interest in Acacia, a
publicly-traded company listed on the London Stock Exchange that is
operated independently of Barrick.
TECHNICAL INFORMATION
The scientific and technical information
contained in this press release has been reviewed and approved by:
Geoffrey Locke, P. Eng., Manager, Metallurgy of Barrick; Rick Sims,
Registered Member SME, Vice President, Reserves and Resources of
Barrick; and Robert Krcmarov, FAusIMM, Executive Vice President,
Exploration and Growth of Barrick—each a “Qualified Person” as
defined in National Instrument 43-101 – Standards of Disclosure
for Mineral Projects.
Appendix 1
2018 Operating and Capital Expenditure
Guidance
GOLD PRODUCTION AND COSTS |
|
Production20
(000s ounces) |
Cost of sales3
($ per ounce) |
All-in
sustaining costs4
($ per ounce) |
Cash costs4
($ per ounce) |
Barrick Nevada |
2,050 - 2,255 |
760 - 810 |
610 - 660 |
470 - 530 |
Turquoise Ridge (75%) |
240 - 270 |
750 - 800 |
700 - 780 |
650 - 690 |
Pueblo Viejo (60%) |
575 - 590 |
760 - 775 |
625 - 645 |
460 - 475 |
Veladero (50%) |
275 - 330 |
970 - 1,110 |
960 - 1,100 |
560 - 620 |
Lagunas Norte |
250 - 270 |
720 - 850 |
670 - 780 |
420 - 490 |
Porgera (47.5%) |
190 - 215 |
1,000 - 1,050 |
1,000 - 1,050 |
740 - 790 |
Kalgoorlie (50%) |
280 - 330 |
775 - 825 |
825 - 875 |
715 - 765 |
Acacia (63.9%) |
~325 |
970 - 1,020 |
935 - 985 |
690 - 720 |
Hemlo |
180 - 200 |
1,110 - 1,170 |
1,135 - 1,235 |
940 - 990 |
Golden Sunlight |
30 - 50 |
1,510 - 1,620 |
1,640 - 1,810 |
1,510 - 1,620 |
Total Gold |
4,500 - 5,000 |
810 - 850 |
765 - 815 |
540 - 575 |
|
COPPER PRODUCTION AND COSTS |
|
Production
(millions of pounds) |
Cost of sales4
($ per pound) |
All-in
sustaining costs5
($ per pound) |
C1 cash costs5
($ per pound) |
Zaldívar (50%) |
115 - 130 |
2.30 - 2.50 |
2.15 - 2.35 |
~1.80 |
Lumwana |
190 - 225 |
1.90 - 2.15 |
2.80 - 3.10 |
1.95 - 2.20 |
Jabal Sayid (50%) |
40 - 55 |
1.85 - 2.50 |
1.70 - 2.30 |
1.40 - 1.80 |
Total Copper |
345 - 410 |
2.00 - 2.30 |
2.55 - 2.85 |
1.80 - 2.00 |
|
CAPITAL EXPENDITURES |
|
($ millions) |
|
Mine site sustaining21 |
950 - 1,100 |
|
Project22 |
450 - 550 |
|
Total Attributable
Capital Expenditures6 |
1,400 - 1,600 |
|
|
|
|
Appendix 2
2018 Outlook Assumptions and
Economic Sensitivity Analysis23
|
2018 Guidance Assumption |
Hypothetical
Change |
Impact on
Revenue
(millions) |
Impact on
Cost of sales3
(millions) |
Impact on
All-in sustaining
costs4,5 |
Gold revenue, net of royalties |
$1,200/oz |
+/- $100/oz |
+/- $149 |
+/- $4 |
+/- $3/oz |
Copper revenue, net of royalties24 |
$2.75/lb |
+ $0.50/lb |
+ $52 |
+ $4 |
+ $0.04/lb |
Copper revenue, net of
royalties24 |
$2.75/lb |
- $0.50/lb |
- $52 |
- $4 |
- $0.04/lb |
Gold all-in sustaining costs4 |
|
|
|
|
|
Oil price25 |
WTI: $65/bbl |
+/- $10/bbl |
n/a |
+/- $9 |
+/- $6/oz |
Brent: $75/bbl |
Australian dollar exchange rate |
0.75 : 1 |
+/- 10% |
n/a |
+/- $6 |
+/- $4/oz |
Argentine peso exchange rate |
30 : 1 |
+/- 10% |
n/a |
+/- $3 |
+/- $2/oz |
Canadian dollar exchange rate |
1.25 : 1 |
+/- 10% |
n/a |
+/- $13 |
+/- $9/oz |
Copper all-in sustaining costs5 |
|
|
|
|
|
Oil price25 |
WTI: $65/bbl |
+/- $10/bbl |
n/a |
+/- $1 |
+/- $0.09/lb |
Brent: $75/bbl |
Chilean peso exchange rate |
625 : 1 |
+/- 10% |
n/a |
+/- $3 |
+/- $0.03/lb |
|
|
|
|
|
|
Endnotes
Endnote 1
“Adjusted net earnings” and “adjusted net
earnings per share” are non-GAAP financial performance measures.
Adjusted net earnings excludes the following from net earnings:
certain impairment charges (reversals) related to intangibles,
goodwill, property, plant and equipment, and investments; gains
(losses) and other one-time costs relating to acquisitions or
dispositions; foreign currency translation gains (losses);
significant tax adjustments not related to current period earnings;
unrealized gains (losses) on non-hedge derivative instruments; and
the tax effect and non-controlling interest of these items. The
Company uses this measure internally to evaluate our underlying
operating performance for the reporting periods presented and to
assist with the planning and forecasting of future operating
results. Barrick believes that adjusted net earnings is a useful
measure of our performance because these adjusting items do not
reflect the underlying operating performance of our core mining
business and are not necessarily indicative of future operating
results. Adjusted net earnings and adjusted net earnings per share
are intended to provide additional information only and do not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other companies. They
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Further
details on these non-GAAP measures are provided in the MD&A
accompanying Barrick’s financial statements filed from time to time
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Earnings to Net
Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings
per Share
($ millions, except per share amounts in
dollars) |
For the three months ended
September 30 |
For the nine months ended
September 30 |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (loss) earnings attributable to equity holders of the
Company |
($412 |
) |
($11 |
) |
($348 |
) |
$1,752 |
|
Impairment charges related to intangibles, goodwill, property,
plant and equipment, and investments1 |
|
431 |
|
|
2 |
|
|
492 |
|
|
(1,128 |
) |
Acquisition/disposition (gains)/losses2 |
|
(1 |
) |
|
(5 |
) |
|
(49 |
) |
|
(882 |
) |
Foreign currency translation losses |
|
62 |
|
|
25 |
|
|
152 |
|
|
60 |
|
Significant tax adjustments3 |
|
(39 |
) |
|
174 |
|
|
23 |
|
|
183 |
|
Other expense adjustments4 |
|
68 |
|
|
134 |
|
|
105 |
|
|
161 |
|
Unrealized gains on non-hedge derivative instruments |
|
— |
|
|
(9 |
) |
|
— |
|
|
(6 |
) |
Tax effect and non-controlling interest |
|
(20 |
) |
|
(110 |
) |
|
(35 |
) |
|
483 |
|
Adjusted net earnings |
$89 |
|
$200 |
|
$340 |
|
$623 |
|
Net earnings per share5 |
|
(0.35 |
) |
|
(0.01 |
) |
|
(0.30 |
) |
|
1.50 |
|
Adjusted net earnings per
share5 |
|
0.08 |
|
|
0.17 |
|
|
0.29 |
|
|
0.52 |
|
1 Net impairment charges for the
three months ended September 30, 2018 primarily relate to an asset
impairment of Lagunas Norte. The nine months ended September
30, 2018 also includes net impairment charges relating to the
Kabanga project (a joint venture between Barrick and Glencore) and
Acacia's Nyanzaga project in Tanzania. For the nine months
ended September 30, 2017, net impairment charges mainly relate to
the Cerro Casale project upon reclassification of the project’s net
assets as held-for-sale as at March 31, 2017.
2 Disposition gains primarily relate to the gain on
the sale of a non-core royalty asset at Acacia for the nine months
ended September 30, 2018, and the sale of a 50% interest in
the Veladero mine and the gain related to the sale of a 25%
interest in the Cerro Casale project for the nine months ended
September 30, 2017.
3 Significant tax adjustments primarily relate to a
tax provision relating to the impact of the proposed framework for
Acacia operations in Tanzania for the three and nine month periods
ended September 30, 2017.
4 Other expense adjustments for the three and nine
months ended September 30, 2018 primarily relate to debt
extinguishment costs.
5 Calculated using weighted average number of
shares outstanding under the basic method of earnings per
share.
Endnote 2
“Free cash flow” is a non-GAAP financial
performance measure which deducts capital expenditures from net
cash provided by operating activities. Barrick believes this to be
a useful indicator of our ability to operate without reliance on
additional borrowing or usage of existing cash. Free cash flow is
intended to provide additional information only and does not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other companies. Free
cash flow should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS.
Further details on these non-GAAP measures are provided in the
MD&A accompanying Barrick’s financial statements filed from
time to time on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
Reconciliation of Net Cash Provided by
Operating Activities to Free Cash Flow
($ millions) |
For the three months ended
September 30 |
For the nine months ended
September 30 |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net cash provided by operating activities |
$706 |
|
$532 |
|
$1,354 |
|
$1,475 |
|
Capital expenditures |
|
(387 |
) |
|
(307 |
) |
|
(1,026 |
) |
|
(1,046 |
) |
Free cash flow |
$319 |
|
$225 |
|
$328 |
|
$429 |
|
Endnote 3
Cost of sales applicable to gold per ounce is
calculated using cost of sales applicable to gold on an
attributable basis (removing the non-controlling interest of 40%
Pueblo Viejo, 36.1% Acacia and 40% South Arturo from cost of
sales), divided by attributable gold ounces. Cost of sales
applicable to copper per pound is calculated using cost of sales
applicable to copper including our proportionate share of cost of
sales attributable to equity method investments (Zaldívar and Jabal
Sayid), divided by consolidated copper pounds (including our
proportionate share of copper pounds from our equity method
investments).
Endnote 4
“Cash costs” per ounce and “All-in sustaining
costs” per ounce are non-GAAP financial performance measures. “Cash
costs” per ounce starts with cost of sales applicable to gold
production, but excludes the impact of depreciation, the
non-controlling interest of cost of sales, and includes by-product
credits. “All-in sustaining costs” per ounce begin with “Cash
costs” per ounce and add further costs which reflect the additional
costs of operating a mine, primarily sustaining capital
expenditures, general & administrative costs, minesite
exploration and evaluation costs, and reclamation cost accretion
and amortization. Barrick believes that the use of “cash costs” per
ounce and “all-in sustaining costs” per ounce will assist
investors, analysts and other stakeholders in understanding the
costs associated with producing gold, understanding the economics
of gold mining, assessing our operating performance and also our
ability to generate free cash flow from current operations and to
generate free cash flow on an overall Company basis. “Cash costs”
per ounce and “All-in sustaining costs” per ounce are intended to
provide additional information only and do not have any
standardized meaning under IFRS. Although a standardized definition
of all-in sustaining costs was published in 2013 by the World Gold
Council (a market development organization for the gold industry
comprised of and funded by 24 gold mining companies from around the
world, including Barrick), it is not a regulatory organization, and
other companies may calculate this measure differently. These
measures should not be considered in isolation or as a substitute
for measures prepared in accordance with IFRS. Further details on
these non-GAAP measures are provided in the MD&A accompanying
Barrick’s financial statements filed from time to time on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Gold Cost of Sales to
Cash costs, All-in sustaining costs and All-in costs, including on
a per ounce basis
($ millions, except per ounce
information in dollars) |
For the three months ended
September 30 |
For the nine months ended
September 30 |
|
Footnote |
2018 |
2017 |
2018 |
2017 |
Cost of sales applicable to gold production |
|
$1,164 |
|
$1,147 |
|
$3,268 |
|
$3,544 |
|
Depreciation |
|
(319 |
) |
(357 |
) |
(907 |
) |
(1,125 |
) |
By-product credits |
|
(31 |
) |
(32 |
) |
(105 |
) |
(105 |
) |
Realized (gains)/losses on hedge and non-hedge
derivatives |
1 |
— |
|
9 |
|
— |
|
19 |
|
Non-recurring items |
2 |
(7 |
) |
— |
|
(17 |
) |
— |
|
Other |
3 |
(18 |
) |
(24 |
) |
(60 |
) |
(71 |
) |
Non-controlling interests (Pueblo Viejo and
Acacia) |
4 |
(83 |
) |
(73 |
) |
(233 |
) |
(218 |
) |
Cash costs |
|
$706 |
|
$670 |
|
$1,946 |
|
$2,044 |
|
General & administrative costs |
|
71 |
|
69 |
|
212 |
|
186 |
|
Minesite exploration and evaluation costs |
5 |
11 |
|
16 |
|
31 |
|
39 |
|
Minesite sustaining capital expenditures |
6 |
233 |
|
248 |
|
699 |
|
830 |
|
Rehabilitation - accretion and amortization
(operating sites) |
7 |
25 |
|
14 |
|
63 |
|
51 |
|
Non-controlling interest, copper operations
and other |
8 |
(101 |
) |
(67 |
) |
(256 |
) |
(199 |
) |
All-in sustaining costs |
|
$945 |
|
$950 |
|
$2,695 |
|
$2,951 |
|
Project exploration and evaluation and project
costs |
5 |
78 |
|
84 |
|
228 |
|
217 |
|
Community relations costs not related to current
operations |
|
1 |
|
1 |
|
2 |
|
3 |
|
Project capital expenditures |
6 |
126 |
|
53 |
|
332 |
|
192 |
|
Rehabilitation - accretion and amortization
(non-operating sites) |
7 |
9 |
|
3 |
|
25 |
|
16 |
|
Non-controlling interest and copper
operations |
8 |
(8 |
) |
(6 |
) |
(16 |
) |
(12 |
) |
All-in costs |
|
$1,151 |
|
$1,085 |
|
$3,266 |
|
$3,367 |
|
Ounces sold - equity basis (000s ounces) |
9 |
1,204 |
|
1,227 |
|
3,312 |
|
3,930 |
|
Cost of sales per ounce |
10,11 |
$850 |
|
$820 |
|
$859 |
|
$791 |
|
Cash costs per ounce |
11 |
$587 |
|
$546 |
|
$588 |
|
$520 |
|
Cash costs per ounce (on a co-product
basis) |
11,12 |
$603 |
|
$565 |
|
$609 |
|
$539 |
|
All-in sustaining costs per ounce |
11 |
$785 |
|
$772 |
|
$813 |
|
$750 |
|
All-in sustaining costs per ounce (on a
co-product basis) |
11,12 |
$801 |
|
$791 |
|
$834 |
|
$769 |
|
All-in costs per ounce |
11 |
$956 |
|
$884 |
|
$986 |
|
$856 |
|
All-in costs per ounce (on a co-product
basis) |
11,12 |
$972 |
|
$903 |
|
$1,007 |
|
$875 |
|
- Realized (gains)/losses on hedge and non-hedge
derivatives
Includes realized hedge losses of $nil and
$2 million, respectively, for the three and nine month periods
ended September 30, 2018 (2017: losses of $8 million and
$22 million, respectively), and realized non-hedge gains of
$nil and $2 million, respectively, for the three and nine
month periods ended September 30, 2018 (2017: losses of $1
million and gains of $3 million, respectively). Refer to Note
5 to the Financial Statements for further information.
- Non-recurring items
Non-recurring
items in 2018 relate to abnormal costs at Porgera as a result of
the February 2018 earthquake in Papua New Guinea. These costs
are not indicative of our cost of production and have been excluded
from the calculation of cash costs.
- Other
Other adjustments for the
three and nine month periods ended September 30, 2018 include
adding the cost of treatment and refining charges of $nil and $1
million, respectively, (2017: $nil and $1 million, respectively)
and the removal of cash costs and by-product credits associated
with our Pierina mine, which is mining incidental ounces as it
enters closure, of $18 million and $60 million, respectively (2017:
$25 million and $73 million, respectively).
- Non-controlling interests (Pueblo Viejo and
Acacia)
Non-controlling interests include
non-controlling interests related to gold production of $121
million and $339 million, respectively, for the three and nine
month periods ended September 30, 2018 (2017: $103 million and
$317 million, respectively). Refer to Note 5 to the Financial
Statements for further information.
- Exploration and evaluation costs
Exploration, evaluation and project expenses are
presented as minesite sustaining if it supports current mine
operations and project if it relates to future projects. Refer to
page 32 of Barrick’s third quarter MD&A.
- Capital
expenditures
Capital expenditures are related to
our gold sites only and are presented on a 100% accrued basis. They
are split between minesite sustaining and project capital
expenditures. Project capital expenditures are distinct projects
designed to increase the net present value of the mine and are not
related to current production. Significant projects in the current
year are stripping at Cortez Crossroads, the Range Front declines,
the Goldrush exploration declines, the Deep South Expansion, and
construction of the third shaft at Turquoise Ridge. Refer to page
31 of Barrick’s third quarter MD&A.
- Rehabilitation—accretion and
amortization
Includes depreciation on the assets
related to rehabilitation provisions of our gold operations and
accretion on the rehabilitation provision of our gold operations,
split between operating and non-operating sites.
- Non-controlling interest and copper
operations
Removes general &
administrative costs related to non-controlling interests and
copper based on a percentage allocation of revenue. Also removes
exploration, evaluation and project expenses, rehabilitation costs
and capital expenditures incurred by our copper sites and the
non-controlling interest of our Acacia and Pueblo Viejo operating
segments and South Arturo. Figures remove the impact of Pierina.
The impact is summarized as the following:
($ millions) |
For the three months ended
September 30 |
For the nine months ended
September 30 |
Non-controlling interest, copper operations
and other |
2018 |
2017 |
2018 |
2017 |
General & administrative costs |
($20 |
) |
($5 |
) |
($68 |
) |
($13 |
) |
Minesite exploration and evaluation expenses |
— |
|
(6 |
) |
(1 |
) |
(13 |
) |
Rehabilitation - accretion and amortization (operating sites) |
(1 |
) |
(2 |
) |
(4 |
) |
(8 |
) |
Minesite sustaining capital expenditures |
(80 |
) |
(54 |
) |
(183 |
) |
(165 |
) |
All-in sustaining costs total |
($101 |
) |
($67 |
) |
($256 |
) |
($199 |
) |
Project exploration and evaluation and project costs |
(7 |
) |
(3 |
) |
(13 |
) |
(9 |
) |
Project capital expenditures |
(1 |
) |
(3 |
) |
(3 |
) |
(3 |
) |
All-in costs total |
($8 |
) |
($6 |
) |
($16 |
) |
($12 |
) |
- Ounces sold - equity
basis
Figures remove the impact of Pierina as the mine
is currently going through closure.
- Cost of sales per ounce
Figures
remove the cost of sales impact of Pierina of $23 million and $84
million, respectively, for the three and nine month periods ended
September 30, 2018 (2017: $38 million and $119 million,
respectively), as the mine is currently going through closure. Cost
of sales per ounce excludes non-controlling interest related to
gold production. Cost of sales applicable to gold per ounce is
calculated using cost of sales on an attributable basis (removing
the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and
40% South Arturo from cost of sales), divided by attributable gold
ounces.
- Per ounce figures
Cost of
sales per ounce, cash costs per ounce, all-in sustaining costs per
ounce and all-in costs per ounce may not calculate based on amounts
presented in this table due to rounding.
- Co-product costs per
ounce
Cash costs per ounce, all-in sustaining
costs per ounce and all-in costs per ounce presented on a
co-product basis removes the impact of by-product credits of our
gold production (net of non-controlling interest) calculated
as:
($ millions) |
For the three months ended
September 30 |
For the nine months ended
September 30 |
|
2018 |
2017 |
2018 |
2017 |
By-product credits |
$31 |
|
$32 |
|
$105 |
|
$105 |
|
Non-controlling interest |
(11 |
) |
(7 |
) |
(35 |
) |
(24 |
) |
By-product credits (net of non-controlling
interest) |
$20 |
|
$25 |
|
$70 |
|
$81 |
|
Endnote 5
“C1 cash costs” per pound and “All-in sustaining
costs” per pound are non-GAAP financial performance measures. “C1
cash costs” per pound is based on cost of sales but excludes the
impact of depreciation and royalties and includes treatment and
refinement charges. “All-in sustaining costs” per pound begins with
“C1 cash costs” per pound and adds further costs which reflect the
additional costs of operating a mine, primarily sustaining capital
expenditures, general & administrative costs and
royalties. Barrick believes that the use of “C1 cash costs” per
pound and “all-in sustaining costs” per pound will assist
investors, analysts, and other stakeholders in understanding the
costs associated with producing copper, understanding the economics
of copper mining, assessing our operating performance, and also our
ability to generate free cash flow from current operations and to
generate free cash flow on an overall Company basis. “C1 cash
costs” per pound and “All-in sustaining costs” per pound are
intended to provide additional information only, do not have any
standardized meaning under IFRS, and may not be comparable to
similar measures of performance presented by other companies. These
measures should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS.
Further details on these non-GAAP measures are provided in the
MD&A accompanying Barrick’s financial statements filed from
time to time on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.
Reconciliation of Copper Cost of Sales
to C1 cash costs and All-in sustaining costs, including on a per
pound basis
($ millions, except per pound information in
dollars) |
For the three months ended
September 30 |
For the nine months ended
September 30 |
|
2018 |
2017 |
2018 |
2017 |
Cost of sales |
$144 |
|
$108 |
|
$348 |
|
$292 |
|
Depreciation/amortization |
(37 |
) |
(26 |
) |
(86 |
) |
(59 |
) |
Treatment and refinement charges |
43 |
|
44 |
|
103 |
|
116 |
|
Cash cost of sales applicable to equity method
investments |
81 |
|
53 |
|
203 |
|
170 |
|
Less: royalties and production
taxes1 |
(10 |
) |
(12 |
) |
(29 |
) |
(27 |
) |
By-product credits |
(1 |
) |
(1 |
) |
(4 |
) |
(4 |
) |
C1 cash cost of sales |
$220 |
|
$166 |
|
$535 |
|
$488 |
|
General & administrative costs |
7 |
|
3 |
|
23 |
|
9 |
|
Rehabilitation - accretion and amortization |
5 |
|
4 |
|
13 |
|
9 |
|
Royalties and production taxes1 |
10 |
|
12 |
|
29 |
|
27 |
|
Minesite exploration and evaluation costs |
1 |
|
4 |
|
2 |
|
5 |
|
Minesite sustaining capital expenditures |
65 |
|
50 |
|
153 |
|
137 |
|
All-in sustaining costs |
$308 |
|
$239 |
|
$755 |
|
$675 |
|
Pounds sold - consolidated basis (millions
pounds) |
114 |
|
107 |
|
273 |
|
298 |
|
Cost of sales per
pound2,3 |
$2.18 |
|
$1.67 |
|
$2.22 |
|
$1.72 |
|
C1 cash cost per
pound2 |
$1.94 |
|
$1.56 |
|
$1.97 |
|
$1.64 |
|
All-in sustaining costs per
pound2 |
$2.71 |
|
$2.24 |
|
$2.76 |
|
$2.27 |
|
1 For the three and nine month
periods ended September 30, 2018, royalties and production
taxes include royalties of $11 million and $28 million,
respectively (2017: $12 million and $27 million, respectively).
2 Cost of sales per pound, C1 cash costs per pound
and all-in sustaining costs per pound may not calculate based on
amounts presented in this table due to rounding.
3 Cost of sales applicable to copper per pound is
calculated using cost of sales including our proportionate share of
cost of sales attributable to equity method investments (Zaldívar
and Jabal Sayid), divided by consolidated copper pounds (including
our proportionate share of copper pounds from our equity method
investments).
Endnote 6
A “tier one gold asset” is a mine with a stated
mine life in excess of ten years with 2017 production of at least
five hundred thousand ounces of gold, 2017 total cash cost per
ounce in the bottom half of all gold mines contained in Wood
Mackenzie’s Metals Cost Curves Tool (<$748/oz total cash
cost).
Endnote 7
“Highest adjusted EBITDA margin” is based on
data from Factset as of August 31, 2018. “Adjusted EBITDA margin”
is a non-GAAP financial performance measure with no standardized
meaning under IFRS and therefore may not be comparable to similar
measures presented by other issuers. Financial comparisons between
Barrick post-merger and its senior gold peers are made on the basis
of the data presented by Factset which may not be calculated in the
same manner as Barrick and Randgold calculate comparable measures.
Barrick uses “Adjusted EBITDA margin” because it believes that this
non-GAAP financial performance measure is an important indicator of
recurring operations, as it excludes items that may not be
indicative of, or are unrelated to, their core operating results,
and provides a measure of profitability.
Endnote 8
“Lowest total cash cost” is based on data from
Wood Mackenzie as of August 31, 2018. “Total cash cost” is a
non-GAAP financial performance measure with no standardized meaning
under IFRS and therefore may not be comparable to similar measures
presented by other issuers. Financial comparisons between Barrick
post-merger and its senior gold peers are made on the basis of the
data presented by Wood Mackenzie which may not be calculated in the
same manner as Barrick and Randgold calculate comparable measures.
Barrick believes that total cash cost is a useful indicator for
investors and management of a mining company’s performance as it
provides an indication of a company’s profitability and efficiency,
the trends in cash costs as the company’s operations mature, and a
benchmark of performance to allow for comparison against other
companies.
Endnote 9
“Senior gold peers” means Agnico Eagle Mines
Limited, Goldcorp Inc., Newcrest Mining Limited, and Newmont Mining
Corporation.
Endnote 10
Based on Bloomberg market data as of October 24,
2018.
Endnote 11
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 to the most directly comparable IFRS measure,
please see pages 50 to 63 of Barrick’s third quarter 2018
MD&A.
Endnote 12
Amount excludes capital leases and includes
Acacia (100% basis).
Endnote 13
Barrick’s share.
Endnote 14
These amounts are presented on the same basis as
our guidance and include our 60% share of Pueblo Viejo and South
Arturo, our 63.9% share of Acacia and our 50% share of Zaldívar and
Jabal Sayid.
Endnote 15
Fourmile Significant Intercepts1
Drill Results from Q3
2018 |
Core Drill
Hole2 |
Azimuth |
Dip |
Interval (m) |
Width (m)3 |
Au (g/t) |
FM18-02D4 |
251 |
-82 |
741.0 - 742.5 |
1.5 |
5.38 |
FM18-08D |
348 |
-82 |
743.4 - 746.1 |
2.7 |
20.4 |
FM18-13D |
180 |
-85 |
653.8 - 661.6 |
7.8 |
19.4 |
718.8 - 720.2 |
1.4 |
6.4 |
FM18-19D |
|
|
683 - 686.4 |
3.4 |
6.8 |
204 |
-84 |
734.4 - 736.1 |
1.7 |
6.4 |
|
|
925 - 929.3 |
4.3 |
18.8 |
FM18-23D |
52 |
-80 |
778.9 - 781.5 |
2.6 |
125.3 |
951.3 - 956 |
4.7 |
19.9 |
1021.5 - 1032.0 |
10.5 |
9.3 |
1038.1 - 1039.6 |
1.5 |
6.5 |
FM18-24D |
294 |
-76 |
675.1 - 676.6 |
1.5 |
6.0 |
710.5 - 712.0 |
1.5 |
17.8 |
714.7 - 737.6 |
22.9 |
16.5 |
740.7 - 746.8 |
6.1 |
6.5 |
FM18-25D |
305 |
-64 |
744.2 - 745.6 |
1.4 |
32.7 |
776.5 - 786.5 |
10 |
17.2 |
842.3 - 843.1 |
0.8 |
37.0 |
844.3 - 845.2 |
0.9 |
6.7 |
FM18-26D |
100 |
-85 |
639.9 - 643 |
3.1 |
86.4 |
653.6 - 658.5 |
4.9 |
12.5 |
FM18-26D |
100 |
-85 |
639.9 - 643 |
3.1 |
86.4 |
653.6 - 658.5
|
4.9 |
12.5 |
666.8 - 671.8 |
5 |
26.1 |
734.7 - 737.8 |
3.1 |
12.3 |
747.5 - 750.7 |
3.2 |
15.1 |
797.2 - 804.8 |
7.6 |
20.8 |
832.1 - 833.5 |
1.4 |
23.8 |
FM18-28D |
129 |
-86 |
696.8 - 699.8 |
3 |
7.1 |
719.6 - 739.4 |
19.8 |
9.5 |
774.5 - 776 |
1.5 |
9.6 |
FM18-30D |
160 |
-80 |
712.5 - 751.8 |
39.3 |
25.6 |
798 - 800 |
2 |
69.9 |
846.9 - 855 |
8.1 |
18.8 |
FM18-40D |
97 |
-78 |
908 - 911.4 |
3.4 |
12.5 |
913 - 914.4 |
1.4 |
60.9 |
FM18-41D |
90 |
-81 |
|
|
no significant intercepts > 5 gpt Au |
FM18-45D |
215 |
-87 |
913.2 - 914.6 |
1.4 |
6.2 |
FM18-46D |
194 |
-82 |
|
|
no significant intercepts > 5 gpt Au |
FM18-47D |
151 |
-83 |
627.3 - 628.8 |
1.5 |
5.9 |
772 - 776.6 |
4.6 |
60.9 |
779.5 - 781.3 |
1.8 |
11.7 |
FM18-49D |
84 |
-86 |
921.1 - 922 |
0.91 |
16.8 |
957.7 - 978.1 |
20.4 |
54.1 |
FM18-50D |
307 |
-82 |
913.8 - 921.4 |
7.6 |
75.6 |
926.9 - 928.1 |
1.2 |
9.5 |
FM18-52D |
62 |
-83 |
873.1 - 899 |
25.9 |
34.6 |
935.6 - 956.9 |
21.3 |
30.2 |
GRC18-01 |
106 |
-73 |
307.4 - 310.9 |
3.5 |
9.3 |
1 All intercepts calculated using a 5
g/t Au cutoff and are uncapped; minimum intercept width is 0.8 m;
internal dilution is less than 20% total width.
2 Fourmile drill hole nomenclature: FM (Fourmile)
followed by the year (18 for 2018), or GRC (Gold Rush Core)
followed by the year.
3 True width of intercepts are uncertain at this
stage.
4 FM18-02 updated from “no significant intercepts” due
to pending results.
The drilling results for the Fourmile property
contained in this press release have been prepared in accordance
with National Instrument 43-101 – Standards of Disclosure for
Mineral Projects. All drill hole assay information has been
manually reviewed and approved by staff geologists and re-checked
by the project manager. Sample preparation and analyses are
conducted by an independent laboratory. Procedures are employed to
ensure security of samples during their delivery from the drill rig
to the laboratory. The quality assurance procedures, data
verification and assay protocols used in connection with drilling
and sampling on the Fourmile property conform to industry accepted
quality control methods.
Endnote 16
Estimated in accordance with National Instrument
43-101 as required by Canadian securities regulatory authorities.
Estimates are as of December 31, 2017, unless otherwise noted.
Goldrush probable reserves of 5.7 million tonnes grading 8.12 g/t,
representing 1.5 million ounces of gold. Goldrush measured
resources of 140,000 tonnes grading 10.44 g/t, representing 47,000
ounces of gold, and indicated resources 31.4 million tonnes grading
9.27 g/t, representing 9.4 million ounces of gold. Pueblo Viejo
proven reserves of 62.1 million tonnes grading 2.67 g/t,
representing 5.3 million ounces of gold, and probable reserves of
19.2 million tonnes grading 3.06 g/t, representing 1.9 million
ounces of gold. Pueblo Viejo measured resources of 7.8 million
tonnes grading 2.39 g/t, representing 598,000 ounces of gold, and
indicated resources of 93.9 million tonnes grading 2.47 g/t,
representing 7.5 million ounces of gold. Complete mineral reserve
and mineral resource data for all mines and projects referenced in
this press release, including tonnes, grades, and ounces, can be
found on pages 29-39 of Barrick’s Annual Information Form for the
year ended December 31, 2017.
Endnote 17
For additional detail regarding Turquoise Ridge,
see the Technical Report on the Turquoise Ridge Mine, State of
Nevada, U.S.A., dated March 19, 2018, and filed on SEDAR at
www.sedar.com and EDGAR at www.sec.gov on March 23, 2018.
Turquoise Ridge Significant
Intercepts1
Core Drill
Hole2 |
Azimuth |
Dip |
Interval (m) |
Width (m) 3 |
Au (g/t) |
TS1803 |
299 |
-60 |
789.9 - 814.9 |
16 |
11.1 |
TS1804 |
282 |
-69 |
942.4 - 945.2 |
2.7 |
18.2 |
TS1804A |
282 |
-69 |
968.8 - 973.5 |
4.7 |
9.6 |
TS1804B |
315 |
-72 |
980.2 - 984 |
3.8 |
13.9 |
1 All significant intercepts
calculated as being >6 m and >7.7 g/t or >3 m and >15.5
g/t.
2 Nomenclature for drillholes (i.e., TS1802) is
described by TS (i.e., Turquoise Ridge Surface) followed by the
year (i.e., 18 for 2018).
3 True width of intercepts are uncertain at this
stage.
The drilling results for the Turquoise Ridge
property contained in this press release have been prepared in
accordance with National Instrument 43-101 – Standards of
Disclosure for Mineral Projects. All drill hole assay
information has been manually reviewed and approved by staff
geologists and re-checked by the project manager. Sample
preparation and analyses are conducted in an on site laboratory
with Quality Assurance/Quality Control procedures performed by an
independent laboratory. Procedures are employed to ensure security
of samples during their delivery from the drill rig to the
laboratory. The quality assurance procedures, data verification and
assay protocols used in connection with drilling and sampling on
the TRJV property conform to industry accepted quality control
methods.
Endnote 18
For additional detail regarding Cortez, see the
Technical Report on the Cortez Joint Venture Operations, Lander and
Eureka Counties, State of Nevada, U.S.A., dated March 21, 2016, and
filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov on March
28, 2016.
Endnote 19
For additional detail regarding Pueblo Viejo,
see the Technical Report on the Pueblo Viejo Mine, Sanchez Ramirez
Province, Dominican Republic, dated March 19, 2018, and filed on
SEDAR at www.sedar.com and EDGAR at www.sec.gov on March 23,
2018.
Endnote 20
Operating unit guidance ranges reflect
expectations at each individual operating unit, but do not add up
to corporate-wide guidance range total.
Endnote 21
Includes both minesite sustaining and mine
development.
Endnote 22
Project capital expenditures are included in our
calculation of all-in costs, but not included in our calculation of
all-in sustaining costs.
Endnote 23
Reflects impact on the remaining three months of
2018.
Endnote 24
As at September 30, 2018, utilizing option
collar strategies, we have protected the downside on approximately
22 million pounds of expected copper production for the last
quarter of 2018 at an average floor price of $3.00 per pound and
can participate in the upside on the same amount up to an average
of $3.40 per pound. Our remaining copper production is
subject to market prices.
Endnote 25
Due to our hedging activities, which are
reflected in these sensitivities, we are partially protected
against changes in these factors.
Key Statistics
Barrick Gold Corporation |
|
|
|
|
(in United States dollars) |
Three months ended September
30, |
Nine months ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Financial Results (millions) |
|
|
|
|
Revenues |
$ |
1,837 |
|
$ |
1,993 |
|
$ |
5,339 |
|
$ |
6,146 |
|
Cost of sales |
|
1,315 |
|
|
1,270 |
|
|
3,643 |
|
|
3,889 |
|
Net (loss) earnings1 |
|
(412 |
) |
|
(11 |
) |
|
(348 |
) |
|
1,752 |
|
Adjusted net earnings2 |
|
89 |
|
|
200 |
|
|
340 |
|
|
623 |
|
Adjusted EBITDA2 |
|
749 |
|
|
930 |
|
|
2,201 |
|
|
2,963 |
|
Total capital expenditures - sustaining3 |
|
233 |
|
|
248 |
|
|
699 |
|
|
830 |
|
Total project capital expenditures3 |
|
126 |
|
|
53 |
|
|
332 |
|
|
192 |
|
Net cash provided by operating activities |
|
706 |
|
|
532 |
|
|
1,354 |
|
|
1,475 |
|
Free cash flow2 |
|
319 |
|
|
225 |
|
|
328 |
|
|
429 |
|
Per share data (dollars) |
|
|
|
|
Net (loss) earnings (basic and diluted) |
|
(0.35 |
) |
|
(0.01 |
) |
|
(0.30 |
) |
|
1.50 |
|
Adjusted net earnings (basic)2 |
$ |
0.08 |
|
$ |
0.17 |
|
$ |
0.29 |
|
$ |
0.52 |
|
Weighted average diluted common shares
(millions) |
|
1,167 |
|
|
1,166 |
|
|
1,167 |
|
|
1,166 |
|
Operating Results |
|
|
|
|
Gold production (thousands of ounces)4 |
|
1,149 |
|
|
1,243 |
|
|
3,265 |
|
|
3,984 |
|
Gold sold (thousands of ounces)4 |
|
1,204 |
|
|
1,227 |
|
|
3,312 |
|
|
3,930 |
|
Per ounce data |
|
|
|
|
Average spot gold price |
$ |
1,213 |
|
$ |
1,278 |
|
$ |
1,282 |
|
$ |
1,251 |
|
Average realized gold price2,4 |
|
1,216 |
|
|
1,274 |
|
|
1,284 |
|
|
1,250 |
|
Cost of sales (Barrick’s share)4,5 |
|
850 |
|
|
820 |
|
|
859 |
|
|
791 |
|
All-in sustaining costs2,4 |
|
785 |
|
|
772 |
|
|
813 |
|
|
750 |
|
Cash costs2,4 |
$
|
587 |
|
$ |
546 |
|
$ |
588 |
|
$ |
520 |
|
Copper production (millions of pounds)6 |
|
106 |
|
|
115 |
|
|
274 |
|
|
314 |
|
Copper sold (millions of pounds)6 |
|
114 |
|
|
107 |
|
|
273 |
|
|
298 |
|
Per pound data |
|
|
|
|
Average spot copper price |
$ |
2.77 |
|
$ |
2.88 |
|
$ |
3.01 |
|
$ |
2.70 |
|
Average realized copper price2,6 |
|
2.76 |
|
|
3.05 |
|
|
2.92 |
|
|
2.81 |
|
Cost of sales (Barrick’s share)6,7 |
|
2.18 |
|
|
1.67 |
|
|
2.22 |
|
|
1.72 |
|
C1 cash costs2,6 |
|
1.94 |
|
|
1.56 |
|
|
1.97 |
|
|
1.64 |
|
All-in sustaining costs2,6 |
$ |
2.71 |
|
$ |
2.24 |
|
$ |
2.76 |
|
$ |
2.27 |
|
|
|
|
As at
September 30, |
As at
December 31, |
|
|
|
|
2018 |
|
2017 |
Financial Position (millions) |
|
|
|
|
Cash and equivalents |
|
|
$ |
1,697 |
$ |
2,234 |
Working capital (excluding cash) |
|
|
$ |
1,163 |
$ |
1,184 |
1 Net (loss) earnings represents net (loss)
earnings attributable to the equity holders of the Company.
2 Adjusted net earnings, adjusted EBITDA, free cash
flow, adjusted net earnings per share, realized gold price, all-in
sustaining costs, cash costs, C1 cash costs and realized copper
price are non-GAAP financial performance measures with no
standardized meaning under IFRS and therefore may not be comparable
to similar measures presented by other issuers. For further
information and a detailed reconciliation of each non-GAAP measure
to the most directly comparable IFRS measure, please see pages 49
to 62 of our third quarter MD&A.
3 Amounts presented on a consolidated accrued
basis. Project capital expenditures are included in our calculation
of all-in costs, but not included in our calculation of all-in
sustaining costs.
4 Includes Acacia on a 63.9% basis, Pueblo Viejo on
a 60% basis, South Arturo on a 60% basis, and Veladero on a 50%
basis from July 1, 2017 onwards, which reflects our equity share of
production and sales.
5 Cost of sales per ounce (Barrick’s share) is
calculated as cost of sales - gold on an attributable basis
excluding Pierina divided by gold ounces sold.
6 Amounts reflect production and sales from Jabal
Sayid and Zaldívar on a 50% basis, which reflects our equity share
of production, and Lumwana.
7 Cost of sales per pound (Barrick’s share) is
calculated as cost of sales - copper plus our equity share of cost
of sales attributable to Zaldívar and Jabal Sayid divided by copper
pounds sold.
Production and Cost Summary
|
Production |
|
Three months ended September
30, |
Nine months ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Gold (equity ounces (000s)) |
|
|
|
|
Barrick Nevada1 |
|
545 |
|
|
520 |
|
|
1,480 |
|
|
1,782 |
|
Turquoise Ridge |
|
79 |
|
|
68 |
|
|
194 |
|
|
147 |
|
Pueblo Viejo2 |
|
151 |
|
|
154 |
|
|
415 |
|
|
468 |
|
Veladero3 |
|
49 |
|
|
99 |
|
|
201 |
|
|
322 |
|
Lagunas Norte |
|
64 |
|
|
96 |
|
|
195 |
|
|
274 |
|
Acacia4 |
|
87 |
|
|
122 |
|
|
250 |
|
|
396 |
|
Other Mines - Gold5 |
|
174 |
|
|
184 |
|
|
530 |
|
|
595 |
|
Total company gold
production |
|
1,149 |
|
|
1,243 |
|
|
3,265 |
|
|
3,984 |
|
|
|
|
|
|
Copper (equity pounds
(millions))6 |
|
106 |
|
|
115 |
|
|
274 |
|
|
314 |
|
|
Cost of Sales per unit
(Barrick’s share) |
|
Three months ended September
30, |
Nine months ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Gold cost of sales per ounce
($/oz)7 |
|
|
|
|
Barrick Nevada |
$ |
799 |
|
$ |
762 |
|
$ |
828 |
|
$ |
791 |
|
Turquoise Ridge |
|
805 |
|
|
755 |
|
|
777 |
|
|
740 |
|
Pueblo Viejo |
|
803 |
|
|
717 |
|
|
775 |
|
|
661 |
|
Veladero |
|
1,083 |
|
|
1,187 |
|
|
1,027 |
|
|
878 |
|
Lagunas Norte |
|
720 |
|
|
612 |
|
|
639 |
|
|
601 |
|
Acacia |
|
842 |
|
|
808 |
|
|
884 |
|
|
796 |
|
Total company gold cost of sales per
ounce |
$ |
850 |
|
$ |
820 |
|
$ |
859 |
|
$ |
791 |
|
|
|
|
|
|
Copper cost of sales per pound
($/lb)8 |
$ |
2.18 |
$ |
1.67 |
$ |
2.22 |
$ |
1.72 |
|
All-in sustaining
costs9 |
|
Three months ended September
30, |
Nine months ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Gold all-in sustaining costs ($/oz) |
|
|
|
|
Barrick Nevada1 |
$
|
623 |
|
$ |
597 |
|
$
|
673 |
|
$ |
603 |
|
Turquoise Ridge |
|
757 |
|
|
793 |
|
|
743 |
|
|
788 |
|
Pueblo Viejo2 |
|
688 |
|
|
604 |
|
|
648 |
|
|
536 |
|
Veladero3 |
|
995 |
|
|
890 |
|
|
980 |
|
|
1,000 |
|
Lagunas Norte |
|
631 |
|
|
470 |
|
|
596 |
|
|
457 |
|
Acacia4 |
|
880 |
|
|
939 |
|
|
922 |
|
|
907 |
|
Total company gold all-in
sustaining costs |
$ |
785 |
|
$ |
772 |
|
$ |
813 |
|
$ |
750 |
|
|
|
|
|
|
Copper all-in sustaining costs
($/lb)6 |
$ |
2.71 |
$ |
2.24 |
$ |
2.76 |
$ |
2.27 |
1 Reflects production and sales from
Goldstrike, Cortez, and South Arturo on a 60% basis, which reflects
our equity share.
2 Reflects production and sales from Pueblo
Viejo on a 60% basis, which reflects our equity share.
3 Reflects production and sales from Veladero
on a 50% basis from July 1, 2017 onwards, which reflects our equity
share.
4 Reflects production and sales from Acacia
on a 63.9% basis, which reflects our equity share.
5 Other Mines - Gold includes Golden Sunlight,
Hemlo, Porgera on a 47.5% basis and Kalgoorlie on a 50% basis.
6 Reflects production and sales from Lumwana,
and Jabal Sayid and Zaldívar on a 50% basis, which reflects our
equity share.
7 Cost of sales per ounce (Barrick’s share)
is calculated as cost of sales - gold on an attributable basis
excluding Pierina divided by gold equity ounces sold.
8 Cost of sales per pound (Barrick’s share)
is calculated as cost of sales - copper plus our equity share of
cost of sales attributable to Zaldívar and Jabal Sayid divided by
copper pounds sold.
9 All-in sustaining costs is a non-GAAP
financial performance measure with no standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other issuers. For further information and a detailed
reconciliation of this non-GAAP measure to the most directly
comparable IFRS measure, please see pages 49 to 62 of our third
quarter MD&A.
Consolidated Statements of Income
Barrick Gold
Corporation
(in millions of United States dollars, except per share data)
(Unaudited) |
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Revenue (notes 5 and 6) |
$ |
1,837 |
|
$ |
1,993 |
|
$ |
5,339 |
|
$ |
6,146 |
|
Costs and
expenses (income) |
|
|
|
|
Cost of sales (notes 5
and 7) |
|
1,315 |
|
|
1,270 |
|
|
3,643 |
|
|
3,889 |
|
General and
administrative expenses |
|
71 |
|
|
69 |
|
|
212 |
|
|
186 |
|
Exploration, evaluation
and project expenses |
|
89 |
|
|
100 |
|
|
259 |
|
|
256 |
|
Impairment (reversals)
charges (notes 9B and 13) |
|
431 |
|
|
2 |
|
|
492 |
|
|
(1,128 |
) |
Loss on currency
translation (note 9C) |
|
62 |
|
|
25 |
|
|
152 |
|
|
60 |
|
Closed mine
rehabilitation |
|
(6 |
) |
|
14 |
|
|
(6 |
) |
|
19 |
|
Income from equity
investees (note 12) |
|
(19 |
) |
|
(25 |
) |
|
(45 |
) |
|
(50 |
) |
Gain on non-hedge
derivatives |
|
— |
|
|
(8 |
) |
|
(3 |
) |
|
(10 |
) |
Other
expense (income) (note 9A) |
|
16 |
|
|
37 |
|
|
55 |
|
|
(800 |
) |
(Loss) income
before finance costs and income taxes |
$ |
(122 |
) |
$ |
509 |
|
$ |
580 |
|
$ |
3,724 |
|
Finance
costs, net |
|
(159 |
) |
|
(238 |
) |
|
(428 |
) |
|
(561 |
) |
(Loss) income
before income taxes |
$ |
(281 |
) |
$ |
271 |
|
$ |
152 |
|
$ |
3,163 |
|
Income
tax expense (note 10) |
|
(105 |
) |
|
(314 |
) |
|
(422 |
) |
|
(1,180 |
) |
Net (loss) income |
$ |
(386 |
) |
$ |
(43 |
) |
$ |
(270 |
) |
$ |
1,983 |
|
Attributable
to: |
|
|
|
|
Equity holders of
Barrick Gold Corporation |
$ |
(412 |
) |
$ |
(11 |
) |
$ |
(348 |
) |
$ |
1,752 |
|
Non-controlling interests |
$ |
26 |
|
$ |
(32 |
) |
$ |
78 |
|
$ |
231 |
|
|
|
|
|
|
Earnings (loss)
per share data attributable to the equity holders of Barrick Gold
Corporation (note 8) |
|
|
|
|
Net (loss) income |
|
|
|
|
Basic |
$ |
(0.35 |
) |
$ |
(0.01 |
) |
$ |
(0.30 |
) |
$ |
1.50 |
|
Diluted |
$ |
(0.35 |
) |
$ |
(0.01 |
) |
$ |
(0.30 |
) |
$ |
1.50 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
Consolidated Statements of Comprehensive
Income
Barrick Gold
Corporation
(in millions of United States dollars) (Unaudited) |
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net (loss) income |
$ |
(386 |
) |
$ |
(43 |
) |
$ |
(270 |
) |
$ |
1,983 |
|
Other
comprehensive (loss) income, net of taxes |
|
|
|
|
Movement in
equity investments fair value reserve: |
|
|
|
|
Net unrealized change
on equity investments, net of tax $nil, $nil, $nil and $nil |
|
(4 |
) |
|
5 |
|
|
(12 |
) |
|
9 |
|
Items that may
be reclassified subsequently to profit or loss: |
|
|
|
|
Unrealized gains
(losses) on derivatives designated as cash flow hedges, net of tax
($1), ($1), ($7) and $2 |
|
5 |
|
|
8 |
|
|
15 |
|
|
(12 |
) |
Realized (gains) losses
on derivatives designated as cash flow hedges, net of tax $1, ($4),
$1 and ($6) |
|
(1 |
) |
|
4 |
|
|
(1 |
) |
|
12 |
|
Actuarial gain (loss)
on post employment benefit obligations, net of tax $nil, $nil, $nil
and $nil |
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
Currency
translation adjustments, net of tax $nil, $nil, $nil and $nil |
|
(6 |
) |
|
(3 |
) |
|
(4 |
) |
|
12 |
|
Total other comprehensive (loss) income |
|
(6 |
) |
|
14 |
|
|
(1 |
) |
|
21 |
|
Total comprehensive (loss) income |
$ |
(392 |
) |
$ |
(29 |
) |
$ |
(271 |
) |
$ |
2,004 |
|
Attributable
to: |
|
|
|
|
Equity holders of
Barrick Gold Corporation |
$ |
(418 |
) |
$ |
3 |
|
$ |
(349 |
) |
$ |
1,773 |
|
Non-controlling interests |
$ |
26 |
|
$ |
(32 |
) |
$ |
78 |
|
$ |
231 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
Consolidated Statements of Cash Flow
Barrick Gold
Corporation
(in millions of United States dollars) (Unaudited) |
Three months ended
September 30, |
|
Nine months ended
September 30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
OPERATING
ACTIVITIES |
|
|
|
|
Net (loss) income |
$ |
(386 |
) |
$ |
(43 |
) |
$ |
(270 |
) |
$ |
1,983 |
|
Adjustments for the
following items: |
|
|
|
|
Depreciation |
|
363 |
|
|
390 |
|
|
1,016 |
|
|
1,213 |
|
Finance
costs |
|
163 |
|
|
243 |
|
|
440 |
|
|
574 |
|
Impairment (reversals) charges (note 13) |
|
431 |
|
|
2 |
|
|
492 |
|
|
(1,128 |
) |
Income
tax expense (note 10) |
|
105 |
|
|
314 |
|
|
422 |
|
|
1,180 |
|
Gains on
sale of non-current assets/investments |
|
(1 |
) |
|
(5 |
) |
|
(49 |
) |
|
(882 |
) |
Currency
translation losses |
|
62 |
|
|
25 |
|
|
152 |
|
|
60 |
|
Change in working
capital (note 11) |
|
167 |
|
|
(127 |
) |
|
(69 |
) |
|
(467 |
) |
Other
operating activities (note 11) |
|
(63 |
) |
|
(113 |
) |
|
(204 |
) |
|
(256 |
) |
Operating cash flows
before interest and income taxes |
|
841 |
|
|
686 |
|
|
1,930 |
|
|
2,277 |
|
Interest paid |
|
(29 |
) |
|
(47 |
) |
|
(212 |
) |
|
(270 |
) |
Income
taxes paid |
|
(106 |
) |
|
(107 |
) |
|
(364 |
) |
|
(532 |
) |
Net cash provided by operating activities |
|
706 |
|
|
532 |
|
|
1,354 |
|
|
1,475 |
|
INVESTING
ACTIVITIES |
|
|
|
|
Property, plant and
equipment |
|
|
|
|
Capital
expenditures (note 5) |
|
(387 |
) |
|
(307 |
) |
|
(1,026 |
) |
|
(1,046 |
) |
Sales
proceeds |
|
1 |
|
|
1 |
|
|
8 |
|
|
13 |
|
Investment
purchases |
|
— |
|
|
— |
|
|
(39 |
) |
|
— |
|
Divestitures (note
4) |
|
— |
|
|
— |
|
|
— |
|
|
960 |
|
Sale of mineral
royalty |
|
— |
|
|
— |
|
|
45 |
|
|
— |
|
Funding
of equity method investments |
|
— |
|
|
— |
|
|
(5 |
) |
|
(8 |
) |
Net cash used in investing activities |
|
(386 |
) |
|
(306 |
) |
|
(1,017 |
) |
|
(81 |
) |
FINANCING
ACTIVITIES |
|
|
|
|
Debt |
|
|
|
|
Repayments |
|
(649 |
) |
|
(1,023 |
) |
|
(680 |
) |
|
(1,508 |
) |
Dividends |
|
(31 |
) |
|
(31 |
) |
|
(94 |
) |
|
(94 |
) |
Funding from
non-controlling interests |
|
5 |
|
|
3 |
|
|
17 |
|
|
11 |
|
Disbursements to
non-controlling interests |
|
— |
|
|
— |
|
|
(82 |
) |
|
(67 |
) |
Debt extinguishment
costs |
|
(29 |
) |
|
(76 |
) |
|
(29 |
) |
|
(102 |
) |
Net cash used in financing activities |
|
(704 |
) |
|
(1,127 |
) |
|
(868 |
) |
|
(1,760 |
) |
Effect of exchange rate changes on cash and
equivalents |
|
(4 |
) |
|
— |
|
|
(6 |
) |
|
2 |
|
Net decrease in cash
and equivalents |
|
(388 |
) |
|
(901 |
) |
|
(537 |
) |
|
(364 |
) |
Cash and equivalents at the beginning of
period |
|
2,085 |
|
|
2,926 |
|
|
2,234 |
|
|
2,389 |
|
Cash and equivalents at the end of period |
$ |
1,697 |
|
$ |
2,025 |
|
$ |
1,697 |
|
$ |
2,025 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
Consolidated Balance Sheets
Barrick Gold
Corporation
(in millions of United States dollars) (Unaudited) |
As at September
30,
|
|
As at December 31, |
|
|
|
2018 |
|
|
2017 |
|
ASSETS |
|
|
Current assets |
|
|
Cash and equivalents (note 14A) |
$ |
1,697 |
|
$ |
2,234 |
|
Accounts receivable |
|
189 |
|
|
239 |
|
Inventories |
|
1,898 |
|
|
1,890 |
|
Other current assets |
|
319 |
|
|
321 |
|
Total current
assets |
$ |
4,103 |
|
$ |
4,684 |
|
Non-current assets |
|
|
Equity in investees (note 12) |
|
1,233 |
|
|
1,213 |
|
Property, plant and equipment |
|
13,226 |
|
|
13,806 |
|
Goodwill |
|
1,330 |
|
|
1,330 |
|
Intangible assets |
|
229 |
|
|
255 |
|
Deferred income tax assets |
|
1,070 |
|
|
1,069 |
|
Non-current portion of inventory |
|
1,800 |
|
|
1,681 |
|
Other assets |
|
1,127 |
|
|
1,270 |
|
Total assets |
$ |
24,118 |
|
$ |
25,308 |
|
LIABILITIES AND
EQUITY |
|
|
Current
liabilities |
|
|
Accounts payable |
$ |
1,125 |
|
$ |
1,059 |
|
Debt (note 14B) |
|
49 |
|
|
59 |
|
Current income tax liabilities |
|
127 |
|
|
298 |
|
Other current liabilities |
|
248 |
|
|
331 |
|
Total current
liabilities |
$ |
1,549 |
|
$ |
1,747 |
|
Non-current
liabilities |
|
|
Debt (note 14B) |
|
5,696 |
|
|
6,364 |
|
Provisions |
|
3,033 |
|
|
3,141 |
|
Deferred income tax liabilities |
|
1,427 |
|
|
1,245 |
|
Other liabilities |
|
1,727 |
|
|
1,744 |
|
Total liabilities |
$ |
13,432 |
|
$ |
14,241 |
|
Equity |
|
|
Capital stock (note 16) |
$ |
20,904 |
|
$ |
20,893 |
|
Deficit |
|
(12,148 |
) |
|
(11,759 |
) |
Accumulated other comprehensive loss |
|
(170 |
) |
|
(169 |
) |
Other |
|
321 |
|
|
321 |
|
Total equity attributable to Barrick Gold Corporation
shareholders |
$ |
8,907 |
|
$ |
9,286 |
|
Non-controlling interests |
|
1,779 |
|
|
1,781 |
|
Total equity |
$ |
10,686 |
|
$ |
11,067 |
|
Contingencies and commitments (notes 5 and 17) |
|
|
Total liabilities and equity |
$ |
24,118 |
|
$ |
25,308 |
|
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
Consolidated Statements of Changes in
Equity
Barrick Gold
Corporation |
|
Attributable to equity holders of the company |
|
|
(in
millions of United States dollars) (Unaudited) |
Common
Shares
(in thousands) |
|
Capital
stock |
|
Retained
deficit |
|
Accumulated
other
comprehensive
income (loss)1 |
Other2 |
Total equity
attributable to
shareholders |
|
Non-
controlling
interests |
|
Total
equity |
|
At December 31, 2017 |
1,166,577 |
|
$ |
20,893 |
|
$ |
(11,759 |
) |
$ |
(169 |
) |
$ |
321 |
|
$ |
9,286 |
|
$ |
1,781 |
|
$ |
11,067 |
|
Impact of
adopting IFRS 15 on January 1, 2018 (note 2B) |
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
— |
|
|
64 |
|
|
— |
|
|
64 |
|
At January 1, 2018 (restated) |
1,166,577 |
|
$ |
20,893 |
|
$ |
(11,695 |
) |
$ |
(169 |
) |
$ |
321 |
|
$ |
9,350 |
|
$ |
1,781 |
|
$ |
11,131 |
|
Net
(loss) income |
— |
|
|
— |
|
|
(348 |
) |
|
— |
|
|
— |
|
|
(348 |
) |
|
78 |
|
|
(270 |
) |
Total
other comprehensive loss |
— |
|
|
— |
|
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
|
— |
|
|
(1 |
) |
Total comprehensive (loss) income |
— |
|
|
— |
|
|
(348 |
) |
|
(1 |
) |
|
— |
|
|
(349 |
) |
|
78 |
|
|
(271 |
) |
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends |
— |
|
|
— |
|
|
(94 |
) |
|
— |
|
|
— |
|
|
(94 |
) |
|
— |
|
|
(94 |
) |
Issued on
exercise of stock options |
20 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Funding
from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
17 |
|
|
17 |
|
Other
decrease in non-controlling interest |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(97 |
) |
|
(97 |
) |
Dividend reinvestment plan (note 16) |
996 |
|
|
11 |
|
|
(11 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total
transactions with owners |
1,016 |
|
|
11 |
|
|
(105 |
) |
|
— |
|
|
— |
|
|
(94 |
) |
|
(80 |
) |
|
(174 |
) |
At September 30, 2018 |
1,167,593 |
|
$ |
20,904 |
|
$ |
(12,148 |
) |
$ |
(170 |
) |
$ |
321 |
|
$ |
8,907 |
|
$ |
1,779 |
|
$ |
10,686 |
|
|
|
|
|
|
|
|
|
|
At January 1, 2017 |
1,165,574 |
|
$ |
20,877 |
|
$ |
(13,074 |
) |
$ |
(189 |
) |
$ |
321 |
|
$ |
7,935 |
|
$ |
2,378 |
|
$ |
10,313 |
|
Net
income |
— |
|
|
— |
|
|
1,752 |
|
|
— |
|
|
— |
|
|
1,752 |
|
|
231 |
|
|
1,983 |
|
Total
other comprehensive income |
— |
|
|
— |
|
|
— |
|
|
21 |
|
|
— |
|
|
21 |
|
|
— |
|
|
21 |
|
Total comprehensive income |
— |
|
|
— |
|
|
1,752 |
|
|
21 |
|
|
— |
|
|
1,773 |
|
|
231 |
|
|
2,004 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends |
— |
|
|
— |
|
|
(94 |
) |
|
— |
|
|
— |
|
|
(94 |
) |
|
— |
|
|
(94 |
) |
Decrease
in non-controlling interest (note 4E) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(493 |
) |
|
(493 |
) |
Funding
from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11 |
|
|
11 |
|
Other
decrease in non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(119 |
) |
|
(119 |
) |
Dividend reinvestment plan |
689 |
|
|
12 |
|
|
(12 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total transactions with owners |
689 |
|
|
12 |
|
|
(106 |
) |
|
— |
|
|
— |
|
|
(94 |
) |
|
(601 |
) |
|
(695 |
) |
At September 30, 2017 |
1,166,263 |
|
$ |
20,889 |
|
$ |
(11,428 |
) |
$ |
(168 |
) |
$ |
321 |
|
$ |
9,614 |
|
$ |
2,008 |
|
$ |
11,622 |
|
1 Includes cumulative translation losses
at September 30, 2018: $77 million (September 30,
2017: $70 million).
2 Includes additional paid-in capital as at
September 30, 2018: $283 million (December 31, 2017:
$283 million; September 30, 2017: $283 million) and
convertible borrowings - equity component as at September 30,
2018: $38 million (December 31, 2017: $38 million;
September 30, 2017: $38 million).
The notes to these unaudited condensed interim financial
statements, which are contained in the Third Quarter Report 2018
available on our website are an integral part of these consolidated
financial statements.
HEAD OFFICE
Barrick Gold Corporation
161 Bay Street, 37th Floor
Toronto, Ontario M5J 2S1
Telephone: +1 416 861-9911
Toll-free: 1-800-720-7415
Fax: +1 416 861-2492
Email: investor@barrick.com
Website: www.barrick.com
TRANSFER AGENTS AND
REGISTRARS
AST Trust Company (Canada)
P.O. Box 700, Postal Station B
Montreal, Quebec H3B 3K3
or
American Stock Transfer & Trust Company,
LLC
6201 – 15 Avenue
Brooklyn, New York 11219
Telephone: 1-800-387-0825
Fax: 1-888-249-6189
Email: inquiries@astfinancial.com
Website: www.astfinancial.com
SHARES LISTED
ABX
The New York Stock Exchange
The Toronto Stock Exchange
INVESTOR CONTACT
Deni Nicoski
Senior Vice President, Investor Relations
Telephone: +1 416 307-7474
Email: dnicoski@barrick.com
MEDIA CONTACT
Andy Lloyd
Senior Vice President, Communications
Telephone: +1 416 307-7414
Email: alloyd@barrick.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 “believe”, “expect”,
“anticipate”, “plan”, “assume”, “intend”, “project”, “pursue”,
“goal”, “continue”, “budget”, “estimate”, “potential”, “may”,
“will”, “can”, “should”, “could”, “would”, and similar expressions
identify forward-looking statements. In particular, this press
release contains forward-looking statements including, without
limitation, with respect to: (i) Barrick’s forward-looking
production guidance; (ii) estimates of future cost of sales per
ounce for gold and per pound for copper, all-in-sustaining costs
per ounce/pound, cash costs per ounce, and C1 cash costs per pound;
(iii) projected capital, operating, and exploration expenditures;
(iv) completion and outcome of current and future studies at Lama;
(v) the purchase of up to $300 million of Barrick shares by
Shandong Gold and the purchase of up to $300 million of Shandong
Gold Mining Co., Ltd shares by Barrick and the expected timing of
such purchases; (vi) the existence of future opportunities for
Barrick and Shandong Gold to collaborate; (vii) targeted cost
reductions; (viii) mine life and production rates; (ix) potential
mineralization, including with respect to Fourmile, Blasdel,
Goldrush and Turquoise Ridge, and metal or mineral recoveries; (x)
anticipated gold production from the Deep South Project, and the
third shaft project at Turquoise Ridge; (xi) the potential for
plant expansion at Pueblo Viejo to increase throughput by 50% and
convert resources to reserves; (xii) our pipeline of high
confidence projects at or near existing operations; (xiii) the
potential to identify new reserves and resources, and our ability
to convert resources into reserves; (xiv) asset sales, joint
ventures, and partnerships; (xv) completion of the merger of
Barrick and Randgold and its anticipated benefits; and (xvi)
expectations regarding future price assumptions, financial
performance, and other outlook or guidance.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions including material
estimates and assumptions related to the factors set forth below
that, while considered reasonable by the Company as at the date of
this press release in light of management’s experience and
perception of current conditions and expected developments, are
inherently subject to significant business, economic and
competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements, and undue reliance
should not be placed on such statements and information. Such
factors include, but are not limited to: fluctuations in the spot
and forward price of gold, copper, or certain other commodities
(such as silver, diesel fuel, natural gas, and electricity); the
speculative nature of mineral exploration and development; changes
in mineral production performance, exploitation, and exploration
successes; risks associated with the fact that certain
Best-in-Class initiatives are still in the early stages of
evaluation, and additional engineering and other analysis is
required to fully assess their impact; risks associated with the
ongoing implementation of Barrick’s digital transformation
initiative, and the ability of the projects under this initiative
to meet the Company’s capital allocation objectives; the duration
of the Tanzanian ban on mineral concentrate exports; the ultimate
terms of any definitive agreement between Acacia and the Government
of Tanzania to resolve a dispute relating to the imposition of the
concentrate export ban and allegations by the Government of
Tanzania that Acacia under-declared the metal content of
concentrate exports from Tanzania; the status of certain tax
re-assessments by the Tanzanian government; the manner in which
amendments to the 2010 Mining Act (Tanzania) increasing the royalty
rate applicable to metallic minerals such as gold, copper and
silver to 6% (from 4%), the new Finance Act (Tanzania) imposing a
1% clearing fee on the value of all minerals exported from Tanzania
from July 1, 2017 and the new Mining Regulations announced by
Government of Tanzania in January 2018 will be implemented and the
impact of these and other legislative changes on Acacia; whether
Barrick will successfully negotiate an agreement with respect to
the dispute between Acacia and the Government of Tanzania and
whether Acacia will approve the terms of any such final agreement;
the benefits expected from recent transactions being realized;
diminishing quantities or grades of reserves; increased costs,
delays, suspensions and technical challenges associated with the
construction of capital projects; operating or technical
difficulties in connection with mining or development activities,
including geotechnical challenges and disruptions in the
maintenance or provision of required infrastructure and information
technology systems; failure to comply with environmental and health
and safety laws and regulations; timing of receipt of, or failure
to comply with, necessary permits and approvals; uncertainty
whether some or all of the Best-in-Class initiatives, targeted
investments and projects will meet the Company’s capital allocation
objectives and internal hurdle rate; the impact of global liquidity
and credit availability on the timing of cash flows and the values
of assets and liabilities based on projected future cash flows;
adverse changes in our credit ratings; the impact of inflation;
fluctuations in the currency markets; changes in U.S. dollar
interest rates; risks arising from holding derivative instruments;
changes in national and local government legislation, taxation,
controls or regulations and/ or changes in the administration of
laws, policies and practices, expropriation or nationalization of
property and political or economic developments in Canada, the
United States, and other jurisdictions in which the Company or its
affiliates do or may carry on business in the future; lack of
certainty with respect to foreign legal systems, corruption and
other factors that are inconsistent with the rule of law; damage to
the Company’s reputation due to the actual or perceived occurrence
of any number of events, including negative publicity with respect
to the Company’s handling of environmental matters or dealings with
community groups, whether true or not; the possibility that future
exploration results will not be consistent with the Company’s
expectations; risks that exploration data may be incomplete and
considerable additional work may be required to complete further
evaluation, including but not limited to drilling, engineering and
socioeconomic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; litigation and
legal and administrative proceedings; contests over title to
properties, particularly title to undeveloped properties, or over
access to water, power and other required infrastructure; business
opportunities that may be presented to, or pursued by, the Company;
risks associated with the fact that certain of the initiatives
described in this press release are still in the early stages and
may not materialize; our ability to successfully integrate
acquisitions or complete divestitures; risks associated with
working with partners in jointly controlled assets; employee
relations including loss of key employees; increased costs and
physical risks, including extreme weather events and resource
shortages, related to climate change; availability and increased
costs associated with mining inputs and labor; and the organization
of our previously held African gold operations and properties under
a separate listed Company. In addition, there are risks and hazards
associated with the business of mineral exploration, development
and mining, including environmental hazards, industrial accidents,
unusual or unexpected formations, pressures, cave-ins, flooding and
gold bullion, copper cathode or gold or copper concentrate losses
(and the risk of inadequate insurance, or inability to obtain
insurance, to cover these risks).
Many of these uncertainties and contingencies
can affect our actual results and could cause actual results to
differ materially from those expressed or implied in any
forward-looking statements made by, or on behalf of, us. Readers
are cautioned that forward-looking statements are not guarantees of
future performance. All of the forward-looking statements made in
this press release are qualified by these cautionary statements.
Specific reference is made to the most recent Form 40- F/Annual
Information Form on file with the SEC and Canadian provincial
securities regulatory authorities for a more detailed discussion of
some of the factors underlying forward-looking statements and the
risks that may affect Barrick’s ability to achieve the expectations
set forth in the forward-looking statements contained in this press
release.
The Company disclaims any intention or
obligation to update or revise any forward-looking statements
whether as a result of new information, future events or otherwise,
except as required by applicable law.
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