- In 2017, Barrick reported net earnings attributable to equity
holders of Barrick (“net earnings”) of $1.44 billion ($1.23 per
share), and adjusted net earnings1 of $876 million ($0.75 per
share).
- The Company reported annual revenues of $8.37 billion, net cash
provided by operating activities (“operating cash flow”) of $2.07
billion, and free cash flow2 of $669 million.
- Full year gold production was 5.32 million ounces. Cost of
sales applicable to gold3 was $794 per ounce, and all-in sustaining
costs4 were $750 per ounce. Copper production was 413 million
pounds, at a cost of sales3 of $1.77 per pound, and all-in
sustaining costs6 of $2.34 per pound.
- Total debt was reduced by $1.51 billion, or 19 percent, to $6.4
billion. We intend to reduce total debt to around $5 billion by the
end of 2018.
- Proven and probable gold reserves were 64.5 million ounces5 as
of December 31, 2017, primarily reflecting the reclassification of
Pascua-Lama reserves to resources. Through increased investment in
mine exploration drilling, the Company more than replaced the
reserves it depleted through production at existing operations in
2017.
- Proven and probable copper reserves, including copper contained
within gold reserves, were 11.2 billion pounds5 as of December 31,
2017, and include the addition of approximately 2.6 billion pounds
at Lumwana as a result of successful cost reduction efforts.
- Barrick reported a net loss of $314 million ($0.27 per share)
in the fourth quarter, and adjusted net earnings1 of $253 million
($0.22 per share).
- Fourth quarter revenue was $2.23 billion, operating cash flow
was $590 million, and free cash flow2 was $240 million.
- Gold production in the fourth quarter was 1.34 million ounces,
at a cost of sales applicable to gold3 of $801 per ounce, and
all-in sustaining costs4 of $756 per ounce. Copper production in
the fourth quarter was 99 million pounds, at a cost of sales3 of
$1.79 per pound, and all-in sustaining costs6 of $2.51 per
pound.
- Gold production guidance for 2018 is 4.5-5.0 million ounces, at
a cost of sales applicable to gold3 of $810-$850 per ounce, and
all-in sustaining costs4 of $765-$815 per ounce. Copper production
guidance for 2018 is 385-450 million pounds, at a cost of sales3 of
$1.80-$2.10 per pound, and all-in sustaining costs6 of $2.30-$2.60
per pound.
- Based on our current asset mix, from 2019 to 2022 we expect
average annual gold production to be between 4.2-4.6 million
ounces, at an average cost of sales3 of $850-$980 per ounce, and
average all-in sustaining costs4 of $750-$875 per ounce.
- Investor Day will be webcast on February 22 at www.barrick.com.
Please join us for additional insights on our operations, projects,
and other priorities.
All amounts expressed in U.S. dollars unless
otherwise indicated
Barrick Gold Corporation (NYSE:ABX) (TSX:ABX) (“Barrick” or the
“Company”) today reported fourth quarter and full year results for
the period ending December 31, 2017.
In 2017, Barrick generated operating cash flow
of $2.07 billion, and free cash flow2 of $669 million. Cost of
sales applicable to gold3 of $794 per ounce declined slightly
compared to 2016, while all-in sustaining costs4 rose by
approximately three percent to $750 per ounce, reflecting a planned
increase in minesite sustaining capital expenditures. Gold cash
costs4 fell by 3.7 percent, driven by a favorable sales mix, and
the ongoing impact of initiatives to improve the productivity and
efficiency of our operations. Lower free cash flow compared to 2016
was primarily the result of lower production and higher working
capital, in part due to the temporary suspension of operations at
our Veladero mine in Argentina, and the concentrate export ban
impacting Acacia Mining plc’s operations in Tanzania. Higher
capital expenditures in 2017 also reflected planned investments in
our organic project pipeline, as we invest more in the future of
our business.
In 2017, we reduced our total debt by $1.51
billion, or 19 percent, exceeding our target of $1.45 billion. We
maintained our focus on capital discipline, with total capital
expenditures of $1.36 billion, near the low end of our guidance
range for the year. We are advancing a pipeline of high-confidence,
organic projects with the potential to contribute more than one
million ounces of annual production to Barrick, at costs well below
our current portfolio average. At the same time, we returned more
capital to shareholders, with a 50 percent increase in our
quarterly dividend, to $0.03 per share. Finally, we forged a new
strategic partnership with Shandong Gold at the Veladero mine, a
landmark agreement with the potential to create significant
long-term value for our owners, as well as our community and
government partners in Argentina and beyond.
STRATEGIC FRAMEWORK
Over the past three years, we have optimized our
portfolio by divesting high-cost, non-core operations. We used the
proceeds of these divestments to reduce our total debt by more than
50 percent, from $13.1 billion at the end of 2014, to $6.4 billion
today. Our portfolio is now focused on high-margin, long-life gold
operations and projects clustered in core districts throughout the
Americas, with a materially stronger balance sheet.
Our overriding objective remains unchanged. We
are focused on growing free cash flow per share over the long term,
which we will do primarily in three ways. First, we will drive
industry-leading margins through operational excellence and
consistent execution. Second, we will manage our portfolio and
allocate capital with discipline and rigor. Third, we will leverage
top talent and our distinctive partnership culture as competitive
advantages.
Our priorities for 2018 are consistent. We will
maintain our focus on maximizing free cash flow, and seek to build
a business that can generate positive free cash flow at a gold
price of $1,000 per ounce, on a sustainable basis. We will drive
operational excellence through a continuous cycle of optimization,
pushing our mines to achieve greater levels of efficiency and
productivity, while working to mitigate increasing costs associated
with more complex ore types and a shift to more underground mining.
This will be aided by investments in digital technology and
innovation, which will allow us to identify and accelerate further
operational improvements across our portfolio. We will maintain a
sharp focus on capital discipline while further strengthening the
balance sheet. We will continue to optimize and advance our organic
project pipeline. And finally, we will focus on attracting top
talent to Barrick and developing our people to achieve their full
potential in the Company’s decentralized operating model.
OUTLOOK
All investment decisions are driven by our
primary objective of growing free cash flow over the long term, not
ounces. Our production profile will adjust up or down according to
what best advances this objective. All projects undergo rigorous
scrutiny by our Investment Committee at every stage of evaluation
and development. Each project is benchmarked against a 15 percent
hurdle rate using a long-term gold price of $1,200 per ounce, and
ranked accordingly.
In 2018, we expect to produce 4.5-5.0 million
ounces of gold, at a cost of sales applicable to gold3 of
$810-$850 per ounce, and all-in sustaining costs4 of
$765-$815 per ounce. Higher cost guidance for 2018 primarily
reflects lower anticipated gold production from Barrick Nevada,
Pueblo Viejo and Veladero, increased processing of higher-cost
inventory, and higher costs at Acacia. We expect first quarter
production of around one million ounces at costs that will be
proportionately higher than those anticipated for the remainder of
the year, largely due to lower grades at Barrick Nevada, and the
timing of planned maintenance at Pueblo Viejo.
Total attributable capital expenditures for 2018
are expected to be in the range of $1.40-$1.60 billion. This
includes project capital expenditures of $450-$550 million, an
increase of roughly $270 million compared to 2017, as we increase
investments in the future of our business. Attributable mine site
sustaining capital expenditures are expected to be in the range of
$950 million-$1.1 billion, compared to $1.1 billion in 2017,
reflecting our ongoing focus on capital efficiency and
discipline.
In 2018, we expect corporate administration
costs to be approximately $275 million, an increase of roughly
$75 million compared to 2017. This reflects additional investments
to optimize our enterprise-wide processes and systems, to
accelerate the implementation of digital technologies across our
business, and to drive step-change innovations, all of which are
designed to reduce operating costs and increase productivity across
the business over the long term.
Based on our current asset mix, from 2019 to
2022 we expect average annual gold production to be between 4.2-4.6
million ounces, at an average cost of sales3 of $850-$980 per
ounce, and average all-in sustaining costs4 of $750-$875 per ounce,
representing a stable base case for our business. This includes
contributions from feasibility level projects at Goldrush, Cortez
Deep South, Turquoise Ridge, and Lagunas Norte—but assumes no
contribution from Pascua-Lama, Donlin Gold, Cerro Casale, or
Alturas. Please join us for our Investor Day webcast on February 22
for additional insights on our production profile.
Our aspiration is to have the most efficient and
productive gold mines in the industry, and as such, we have
challenged ourselves to continually improve our cost profile. It is
equally important that we reinvest in the future of our business
now, to ensure that we generate sustainable value for our owners
over the long term, at the lowest possible costs. In support of
this, we are increasing our investments in organic projects and
mine exploration drilling, which will strengthen the overall
quality of our portfolio. We also are investing in digital systems
and innovation, which we expect will drive down costs and improve
productivity over the long term.
Please see Appendix 1 for detailed operating and
capital expenditure guidance. The table found in Appendix 2
outlines the material assumptions used to develop the
forward-looking statements in our outlook and guidance, and
provides an economic sensitivity analysis of those assumptions. For
certain related risk factors, please see the cautionary statement
on forward-looking information at the end of this press
release.
FINANCIAL HIGHLIGHTS
Full year net earnings were $1.44 billion ($1.23
per share), compared to net earnings of $655 million ($0.56 per
share) in 2016. This significant improvement in net earnings was
primarily due to $2.03 billion ($1.43 billion net of tax and
non-controlling interest) in impairment reversals and gains on sale
related to the divestment of 50 percent of the Veladero mine and 25
percent of the Cerro Casale project in 2017. This was partially
offset by net impairment charges of $908 million ($511 million net
of tax and non-controlling interest) mainly relating to Acacia’s
Bulyanhulu mine, which has been placed on reduced operations, and
the Pascua-Lama project, where proven and probable gold reserves
have been reclassified as measured and indicated resources, coupled
with an impairment reversal at the Lumwana mine.
In 2017, adjusted net earnings1 increased by
seven percent to $876 million ($0.75 per share), compared to $818
million ($0.70 per share) in 2016. Adjusted net earnings benefited
from higher gold and copper prices, combined with lower direct
mining costs, reflecting higher capitalized waste stripping at
Barrick Nevada and Veladero, a lower relative sales contribution
from higher cost operations at Acacia, and lower inventory
write-downs compared to 2016. These gains were partially offset by
lower sales volumes, primarily due to the sale of 50 percent of
Veladero, and the concentrate export ban impacting Acacia’s
operations, combined with an increase in exploration and evaluation
costs, investments in innovation, higher income tax expense, and
higher depreciation expense.
Please refer to page 70 of our fourth quarter
MD&A for a full list of reconciling items between net earnings
and adjusted net earnings for the current and prior year.
Operating cash flow in 2017 was $2.07 billion,
compared to $2.64 billion in 2016. This decrease reflects working
capital outflows related to the buildup of inventory at Pueblo
Viejo, Lagunas Norte, and Acacia, lower gold sales driven by the
sale of 50 percent of the Veladero mine on June 30, 2017, and lower
sales volumes at Pueblo Viejo, Hemlo, Turquoise Ridge, Lagunas
Norte, and Acacia. Operating cash flow was also impacted by an
increase in exploration, evaluation and project expenses, lower
operating cash flows attributed to non-controlling interest, and
higher cash taxes paid. These declines were partially offset by
higher sales from Barrick Nevada, which benefited from operational
efficiencies and improved throughput, higher gold and copper
prices, and lower direct mining costs (as described above).
Free cash flow2 for 2017 was $669 million,
compared to $1.51 billion in the prior year. The decrease primarily
reflects lower operating cash flows combined with higher capital
expenditures. In 2017, capital expenditures on a cash basis were
$1.40 billion compared to $1.13 billion in 2016. Higher capital
spending reflects a $161 million increase in minesite sustaining
capital expenditures, primarily at Barrick Nevada and Veladero,
partially offset by a decrease in sustaining capital at Acacia.
Project capital expenditures also increased by $109 million,
reflecting the development of Crossroads and the Cortez Hills Lower
Zone at Barrick Nevada, and Goldrush project drilling, partially
offset by a decrease in pre-production stripping at the South
Arturo pit, which entered commercial production in August 2016.
RESTORING A STRONG BALANCE
SHEET
Achieving and maintaining a strong balance sheet
remains a top priority. In 2017, we reduced our total debt by $1.51
billion, or 19 percent, exceeding our original target of $1.45
billion.
Our goal remains to reduce our total debt from
$6.4 billion at present, to around $5 billion by the end of
2018. We plan to achieve this primarily by using cash flow from
operations and cash on hand, and potentially through further
portfolio optimization. Barrick will continue to pursue debt
reduction with discipline, taking only those actions that make
sense for the business, on terms we consider favorable to our
shareholders.
At the end of the fourth quarter, Barrick had a
consolidated cash balance of approximately $2.2 billion.7 The
Company has less than $100 million in debt due before 2020.8
More than three-quarters of our outstanding total debt of $6.4
billion does not mature until after 2032.
OPERATING HIGHLIGHTS
In 2017, our operations produced 5.32 million
ounces of gold, at a cost of sales3 of $794 per ounce, and all-in
sustaining costs4 of $750 per ounce, with a particularly strong
performance from Barrick Nevada. This compares to production of
5.52 million ounces of gold in 2016, at a cost of sales3 of $798
per ounce, and all-in sustaining costs4 of $730 per ounce. Lower
production in 2017 primarily reflects the sale of 50 percent of the
Veladero mine on June 30, and lower production from Acacia as a
result of Tanzania’s concentrate export ban.
Our most important operational priorities are to
ensure the safety of people and the environment. We improved our
safety performance in 2017, achieving a total reportable injury
frequency rate (TRIFR)9 of 0.35—the best result in the Company’s
history, and among the lowest in the industry. Regrettably, this
was overshadowed by the tragic deaths of two team members in
workplace accidents in 2017: Williams Garrido, a contractor at the
Pascua-Lama project; and Eulogio Gutierrez, an employee at our
Hemlo mine. We will not be satisfied with our performance until we
can say that every person at Barrick has gone home safe and healthy
every day, and this will remain our focus in 2018.
Consistent with our overall improvement trend in
safety, we also achieved a 38 percent reduction in reportable
environmental incidents at our operations last year, from 13
incidents in 2016, to eight incidents in 2017. Despite this
success, a pipe rupture at the leach pad of our Veladero operation
in March 2017 resulted in a three-and-a-half month suspension of
processing operations at the mine. In response, Veladero
implemented a series of measures to strengthen the mine’s operating
systems, including major modifications to the heap leach facility,
as well as initiatives to improve community engagement, training,
and local hiring.
On a per ounce basis, cost of sales applicable
to gold3 declined slightly compared to 2016. All-in sustaining
costs4 increased by three percent, primarily reflecting an increase
in minesite sustaining capital expenditures. At the same time, we
reduced our cash costs4 by 3.7 percent, from $546 per ounce in
2016, to $526 per ounce in 2017, reflecting a favorable sales mix,
as well as our ongoing focus on driving Best-in-Class productivity
and efficiency improvements across our portfolio.
Gold production in the fourth quarter was 1.34
million ounces, at a cost of sales applicable to gold3 of
$801 per ounce, and all-in sustaining costs4 of $756 per
ounce, compared to 1.52 million ounces, at a cost of sales3 of $784
per ounce, and all-in sustaining costs4 of $732 per ounce in the
prior-year period.
In 2017, our copper portfolio produced 413
million pounds, at a cost of sales3 of $1.77 per pound, and all-in
sustaining costs6 of $2.34 per pound. Production was slightly below
the Company’s adjusted guidance of 420-440 million pounds for 2017,
but in line with our original full year guidance of 400-450 million
pounds. This compares to production of 415 million pounds, at a
cost of sales3 of $1.41 per pound, and all-in sustaining costs6 of
$2.05 per pound in 2016.
Copper production in the fourth quarter was 99
million pounds, at a cost of sales3 of $1.79 per pound, and
all-in sustaining costs6 of $2.51 per pound, compared to 101
million pounds, at a cost of sales3 of $1.43 per pound, and all-in
sustaining costs6 of $2.04 per pound in the prior-year period.
Cost of sales applicable to copper3 increased by
25 percent in 2017 as a result of higher power, fuel, consumables
and contractor costs, combined with higher depreciation expense at
Lumwana. Copper all-in sustaining costs6, which have been adjusted
to include our proportionate share of equity method investments,
were 14 percent higher than the prior year, primarily as a result
of higher cost of sales and higher minesite sustaining capital
expenditures at Lumwana and Jabal Sayid.
Turquoise Ridge Toll Milling
AgreementIn January 2018, Barrick and Newmont Mining
Corporation (“Newmont”) reached a new, seven-year toll milling
agreement for the processing of Turquoise Ridge ore at Newmont’s
Twin Creeks facility. The agreement supports plans to expand
production and unlock the full potential of Turquoise Ridge by
increasing processing capacity. It provides for throughput of
850,000 tons per year in 2018 and 2019, rising to 1.2 million tons
per year between 2020 and 2024. Processing costs are in line with
market rates, and are reflected in our guidance for Turquoise
Ridge.
Please join our upcoming Investor Day webcast
for a detailed update on all major operations. Visit
www.barrick.com for webcast information, press release, and
presentations on February 22.
Digital BarrickDuring 2017, we
laid the foundation for our digital transformation through a series
of pilot projects primarily focused at our Cortez mine in Nevada.
This allowed us to validate the viability of our digital solutions
and their potential economic returns in a controlled environment
with rigorous oversight.
In 2018, our digital strategy will focus on
completing version one of the Barrick Data Fabric, an
enterprise-grade, big data analytics platform. This will provide a
unified data environment for the Company that will allow our
leaders and operators to identify variability and trends, generate
trusted, real-time data, predict failures, and take action to
address problems quickly, or before they arise. We also will
accelerate the implementation of digital projects across our other
operations, with an initial focus in Nevada, including:
- Expanded use of automated processing systems, combined with
introduction of artificial intelligence;
- Implementation of short interval control in open pit,
underground, and processing areas;
- Expanded implementation of digital work management and
predictive maintenance systems; and
- Expanded use of automation, including an autonomous open pit
trial, and the implementation of automated underground drills.
We are taking a disciplined approach to our
digital strategy and will continue to apply a high degree of rigor
to these projects, just as we would for any other investment, to
ensure that our investments in digital deliver the benefits we
anticipate.
Gold |
Fourth Quarter2017 |
Full Year 2017 |
2018 Guidance |
Production10
(000s of ounces) |
1,339 |
5,323 |
4,500 -
5,000 |
Cost of sales
applicable to gold3 ($ per ounce) |
801 |
794 |
810 -
850 |
All-in sustaining
costs4 ($ per ounce) |
756 |
750 |
765 -
815 |
Copper |
|
|
|
Production10
(millions of pounds) |
99 |
413 |
385 -
450 |
Cost of sales
applicable to copper3 ($ per pound) |
1.79 |
1.77 |
1.80 -
2.10 |
All-in sustaining
costs6 ($ per pound) |
2.51 |
2.34 |
2.30 -
2.60 |
|
|
|
|
Total Attributable Capital Expenditures11
($ millions) |
365 |
1,364 |
1,400 - 1,600 |
|
|
|
|
MINERAL RESOURCE MANAGEMENT
Barrick manages a high-quality inventory of gold
reserves and resources, the majority of which are situated in
regions where we have proven operating experience, a critical mass
of infrastructure, technical and exploration expertise, and
established partnerships with suppliers, host governments, and
communities.
Our 2017 reserves were calculated using a gold
price assumption of $1,200 per ounce, consistent with the
long-price assumption we used in 2016. As of December 31, 2017,
Barrick’s proven and probable gold reserves were 64.5 million
ounces5, compared to 86.0 million ounces at the end of 2016. This
decline primarily reflects the divestment of approximately 9.2
million ounces associated with Veladero and Cerro Casale, and the
reclassification of approximately 14.0 million ounces of
Pascua-Lama proven and probable gold reserves as measured and
indicated resources.
Barrick added 8.0 million ounces of proven and
probable gold reserves at existing operations (as well as the
Goldrush project) through drilling, more than replacing the 6.2
million ounces depleted through processing last year. This success
reflects increased investment in mine exploration drilling in 2017.
Significant additions included 2.1 million ounces at Turquoise
Ridge, 1.4 million ounces at Cortez, 1.3 million ounces at
Goldstrike, 397,000 ounces at Hemlo, and 392,000 ounces at Lagunas
Norte. We also declared an initial reserve of 1.5 million ounces at
the Goldrush project. In addition, Barrick’s 63.9 percent share of
reserves at Acacia’s North Mara mine increased by 504,000 ounces.
The average grade of Barrick’s reserves also increased by 17
percent, from 1.33 grams per tonne, to 1.55 grams per
tonne.
In 2017, measured, indicated, and inferred gold
resources were calculated using a gold price assumption of $1,500
per ounce, consistent with 2016. Measured and indicated gold
resources increased to 88.6 million ounces5 at the end of 2017,
compared to 75.2 million ounces at the end of 2016. Roughly 9.1
million ounces of measured and indicated gold resources were added
as a result of the formation of the Norte Abierto joint venture
(which includes the Cerro Casale and Caspiche deposits), net of
resources divested at Cerro Casale and Veladero. Roughly 14.0
million ounces of measured and indicated resources were added as a
result of the reclassification of Pascua-Lama reserves to
resources, and 5.8 million ounces were added through drilling,
including 1.5 million ounces at Goldstrike, 1.2 million ounces at
Cortez, and 535,000 ounces at Hemlo.
Inferred gold resources increased slightly to
30.8 million ounces5 at the end of 2017, compared to 30.7 million
ounces at the end of 2016.
Proven and probable copper reserves were
calculated using a copper price of $2.75 per pound, consistent with
the long-price assumption we used in 2016. Copper reserves,
including copper within gold reserves, increased to 11.2 billion
pounds5 at the end of 2017, compared to 11.1 billion pounds at the
end of 2016. The Lumwana mine added approximately 2.6 billion
pounds to its reserves as a result of successful cost reduction
efforts. Approximately 1.4 billion pounds of copper reserves were
divested with the sale of 25 percent of Cerro Casale, 554 million
pounds were processed, and 505 million pounds of copper contained
within gold reserves were reclassified as copper contained within
gold resources.
In 2017, measured, indicated, and inferred
copper resources were calculated using a copper price assumption of
$3.50 per pound, consistent with 2016. Measured and indicated
copper resources, including copper within measured and indicated
gold resources, increased to 11.7 billion pounds5, compared to 9.7
billion pounds at the end of 2016. Approximately 2.6 billion pounds
of measured and indicated copper resources were upgraded to copper
reserves, 2.6 billion pounds were added through the inclusion of
the Caspiche deposit, and 1.6 billion pounds were added
through drilling. Inferred copper resources were 3.0 billion
pounds5, compared to 3.1 billion pounds at the end of 2016.
EXPLORATION UPDATE
Barrick has a demonstrated track record of
creating value through exploration. Since 1990, we have found 129
million ounces of gold at an overall discovery cost of $29 per
ounce, or roughly half the average finding cost across the
industry.
Approximately 80 percent of our total
exploration budget of $185-$225 million is allocated to the
Americas. Our exploration programs balance high-quality brownfield
projects, greenfield exploration, and emerging discoveries that
have the potential to become profitable mines.
We successfully added 8.0 million ounces of gold
reserves in 2017 through mine exploration drilling, demonstrating
that even well-established operations continue to yield exploration
success. In many cases, these ounces can be quickly incorporated
into mine plans, driving improvements in production, cash flow, and
earnings.
For example, we drilled more than 18,000 meters
at Goldstrike in 2017, adding 1.3 million ounces of proven and
probable gold reserves, and 1.5 million ounces of measured and
indicated resources. This drilling identified a host of high grade
extensions to known lodes that will be a focus for further drilling
in 2018. We also increased proven and probable gold reserves at
Turquoise Ridge by 2.1 million ounces. Drilling down plunge of the
mine’s Foot Wall Pond Trend showed strong indications that the
mineralized system continues along this corridor.
Our 2018 greenfield exploration program will
focus on the prolific Cortez district in Nevada, and the Frontera
District on the El Indio Belt in Argentina and Chile. We have also
cultivated active partnerships with a number of junior exploration
and development companies as we seek to identify potential new core
mineral districts for the Company. These partnerships are with ATAC
at the Orion project in the Yukon, with Osisko at the Kan property
in northern Québec, and with Premier Gold at Cove McCoy in
Nevada.
PROJECTS UPDATE
Please join our upcoming Investor Day webcast
for the latest updates on all major projects. Visit www.barrick.com
for webcast information, press release, and presentations on
February 22.
We continue to advance a pipeline of
high-confidence projects at or near our existing operations, with
the potential to contribute more than one million ounces of annual
production to Barrick, at costs well below our current portfolio
average.
Goldrush has the potential to become Barrick’s
newest underground mine in Nevada, with first production
expected as early as 2021, and sustained production by 2023. The
prefeasibility study estimated average production of approximately
450,000 ounces of gold per year, at an average cost of
sales3 of $800 per ounce, and average all-in sustaining
costs4 of $665 per ounce.
Through the development of a third shaft, the
Turquoise Ridge Joint Venture in Nevada has the potential to
increase production to an average of 500,000 ounces per year (100
percent basis) at a cost of sales3 of $750-$800 per
ounce, and all-in sustaining costs4 of
about $625-$675 per ounce.
The Deep South project at Cortez will expand
mining below currently permitted levels, and is expected to
contribute average production of more than 300,000 ounces of gold
per year from the underground mine, with initial production as
early as 2023. The prefeasibility study estimated average cost of
sales3 of $840 per ounce, and average all-in sustaining
costs4 of $580 per ounce.12
At the Lagunas Norte operation in Peru, we are
evaluating a phased project to extend the life of the mine by
approximately 10 years. The first component involves installing
grinding and carbon-in-leach processing. The second involves
installation of a flotation and pressure oxidation circuit,
allowing us to optimize the timing of capital expenditures.13
We also maintain a portfolio of greenfield
projects that represent significant long-term value and optionality
for our shareholders.
Donlin Gold, located in Alaska, contains 19.5
million ounces5 of measured and indicated gold resources (Barrick’s
50 percent share). We continue to work in collaboration with our
partners at NOVAGOLD to optimize the project, including the
potential for a staged development and selective mining.
Pascua-Lama, located on the border
between Argentina and Chile, contains 21.3 million
ounces5 of measured and indicated gold resources. We are now
evaluating an underground, block-caving operation at Pascua-Lama
that would utilize processing infrastructure in Argentina, while
reducing the project’s environmental impacts.
Norte Abierto, our new joint venture with
Goldcorp in Chile, incorporates the Cerro Casale and Caspiche
deposits. Cerro Casale contains 11.6 million ounces of proven and
probable gold reserves5 (Barrick’s 50 percent share), while
Caspiche contains 11.6 million ounces of measured and indicated
gold resources5 (Barrick’s 50 percent share). Work is focused on
advancing an optimized project design, including an updated
geological model.
The Alturas project, located in Chile on
the El Indio Belt, is a Barrick greenfield discovery with 6.8
million ounces5 of inferred gold resources as of December 31,
2017. Following completion of a scoping study for a conventional
open pit heap leach operation at Alturas, we are now carrying out
further studies to evaluate potential enhancements to the project
design, while undertaking additional drilling to improve orebody
knowledge and grades.
ACACIA MINING PLC
In October 2017, the Government
of Tanzania and Barrick announced a proposed framework
agreement that would split economic benefits generated by Acacia’s
operations with the Government of Tanzania on a 50/50 basis.
The Government’s portion would be delivered primarily in the form
of royalties, taxes, and a 16 percent free carried interest in
Acacia’s Tanzanian operations, in line with the country’s new
mining law. Discussions concerning the implementation of the
proposed framework, resolution of outstanding tax matters relating
to Acacia, and the lifting of the country’s export ban on
concentrates, remain ongoing. Barrick has continued to engage with
independent directors of Acacia throughout this process, and
members of Acacia management are supporting ongoing discussions. We
continue to target the first half of 2018 for the completion of a
detailed proposal for review by Acacia.
TECHNICAL INFORMATION
The scientific and technical information
contained in this press release has been reviewed and approved by
Steven Haggarty, P. Eng., Senior Director, Metallurgy of Barrick,
Patrick Garretson, Registered Member SME, Senior Director, Life of
Mine Planning 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.
CONFERENCE CALL AND WEBCAST
Please join us for a conference call and webcast
to discuss the results tomorrow, February 15, at 8:00 am ET.
Webcast: www.barrick.comToll Free (U.S. and
Canada): 1-800-319-4610International: +1 416 915-3239
The conference call will be available for replay
by phone at 1-855-669-9658 (U.S. and Canada toll free), and +1 604
674-8052 (international), access code 1928.
Appendix 12018 Detailed
Operating and Capital Expenditure Guidance
2018 GOLD PRODUCTION AND COSTS |
|
Production(000s ounces) |
Cost of sales3($ per ounce) |
All-insustaining costs4($ per ounce) |
Cash costs4($ per ounce) |
Barrick Nevada |
2,000
- 2,255 |
760 -
810 |
610 -
660 |
470 -
530 |
Pueblo Viejo (60%) |
585 -
615 |
720 -
750 |
590 -
620 |
425 -
450 |
Lagunas Norte |
230 -
270 |
780 -
910 |
670 -
780 |
420 -
490 |
Veladero (50%) |
275 -
330 |
970 -
1,110 |
960 -
1,100 |
560 -
620 |
Turquoise Ridge
(75%) |
240 -
270 |
670 -
720 |
650 -
730 |
580 -
620 |
Porgera (47.5%) |
230 -
255 |
950 -
1,000 |
950 -
1,000 |
780 -
830 |
Kalgoorlie (50%) |
390 -
440 |
720 -
820 |
695 -
745 |
580 -
630 |
Acacia (63.9%) |
275 -
305 |
970 -
1,020 |
935 -
985 |
690 -
720 |
Hemlo |
200 -
220 |
860 -
920 |
975 -
1,075 |
740 -
790 |
Golden Sunlight |
35 - 50 |
1,100 - 1,200 |
1,290 - 1,460 |
1,130 - 1,230 |
Total Gold14,15 |
4,500 - 5,000 |
810 - 850 |
765 - 815 |
540 - 575 |
|
2018 COPPER PRODUCTION AND COSTS |
|
Production(millions of pounds) |
Cost of sales3($ per pound) |
All-insustaining costs6($ per pound) |
C1 cash costs6($ per pound) |
Zaldívar (50%) |
115 -
130 |
2.30 -
2.50 |
2.05 -
2.25 |
~1.70 |
Lumwana |
230 -
265 |
1.65 -
1.90 |
2.50 -
2.80 |
1.65 -
1.90 |
Jabal
Sayid (50%) |
40 - 55 |
1.85 - 2.50 |
1.70 - 2.30 |
1.40 - 1.80 |
Total Copper |
385 - 450 |
1.80 - 2.10 |
2.30 - 2.60 |
1.55 - 1.75 |
|
2018 CAPITAL
EXPENDITURES |
|
|
|
|
|
($ millions) |
|
Mine site
sustaining |
950 -
1,100 |
|
Project |
450 - 550 |
|
Total attributable
capital expenditures11 |
1,400 - 1,600 |
|
|
|
|
|
|
2019 - 2022 GOLD PRODUCTION, COSTS, AND CAPITAL
EXPENDITURES |
|
Production14,15(000s ounces) |
Cost of sales3($ per ounce) |
All-insustaining costs4($ per ounce) |
Total attributablecapital expenditures11($ millions) |
Annual average 2019 - 2022 |
4,200 - 4,600 |
850 - 980 |
750 - 875 |
1,100 - 1,500 |
|
|
|
|
|
Appendix 2Outlook
Assumptions and Economic Sensitivity Analysis
2018 |
|
|
|
|
|
|
2018 guidanceassumption |
Hypotheticalchange |
Impact onrevenue(millions) |
Impact oncost of sales3(millions) |
Impact onall-in sustainingcosts4,6 |
Gold revenue, net of
royalties16 |
$1,200/oz |
+/-
$100/oz |
+/-
$468 |
+/-
$14 |
+/-
$3/oz |
Copper revenue, net of
royalties17 |
$2.75/lb |
+
$0.50/lb |
+
$205 |
+
$13 |
+
$0.03/lb |
Copper
revenue, net of royalties17 |
$2.75/lb |
- $0.50/lb |
- $180 |
- $12 |
- $0.03/lb |
Gold all-in sustaining
costs4 |
|
|
|
|
|
WTI crude
oil price16 |
$55/bbl |
+/-
$10/bbl |
n/a |
+/-
$26 |
+/-
$5/oz |
Australian dollar exchange rate |
0.75 :
1 |
+/-
10% |
n/a |
+/-
$31 |
+/-
$7/oz |
Argentine
peso exchange rate |
18.35
: 1 |
+/-
10% |
n/a |
+/-
$7 |
+/-
$2/oz |
Canadian dollar exchange rate |
1.25 : 1 |
+/- 10% |
n/a |
+/- $35 |
+/- $7/oz |
Copper all-in
sustaining costs6 |
|
|
|
|
|
WTI crude
oil price16 |
$55/bbl |
+/-
$10/bbl |
n/a |
+/-
$5 |
+/-
$0.06/lb |
Chilean peso exchange rate |
650 : 1 |
+/- 10% |
n/a |
+/- $10 |
+/- $0.02/lb |
|
|
|
|
|
|
2019 - 2022 |
|
|
|
|
|
|
Average annual2019-2022guidanceassumption |
Hypotheticalchange |
Average annualimpact onrevenue(millions) |
Average annualimpact oncost of sales3(millions) |
Average annualimpact onall-in sustainingcosts4,6 |
Gold revenue, net of
royalties16 |
$1,200/oz |
+/-
$100/oz |
+/-
$440 |
+/-
$16 |
+/- $4/oz |
Gold all-in sustaining
costs4 |
|
|
|
|
|
WTI crude
oil price16 |
$70/bbl |
+/-
$10/bbl |
n/a |
+/-
$21 |
+/-
$5/oz |
Australian dollar exchange rate |
0.75 :
1 |
+/-
10% |
n/a |
+/-
$25 |
+/-
$6/oz |
Argentine
peso exchange rate |
20.24
: 1 |
+/-
10% |
n/a |
+/-
$8 |
+/-
$2/oz |
Canadian dollar exchange rate |
1.25 : 1 |
+/- 10% |
n/a |
+/- $34 |
+/- $8/oz |
|
|
|
|
|
|
Endnotes
ENDNOTE 1“Adjusted net
earnings” and “adjusted net earnings per share” are non-GAAP
financial performance measures. Adjusted net earnings excludes the
following from net earnings: certain impairment charges (reversals)
related to intangibles, goodwill, property, plant and equipment,
and investments; gains (losses) and other one-time costs relating
to acquisitions or dispositions; foreign currency translation gains
(losses); significant tax adjustments not related to current period
earnings; unrealized gains (losses) on non-hedge derivative
instruments; and the tax effect and non-controlling interest of
these items. The Company uses this measure internally to evaluate
our underlying operating performance for the reporting periods
presented and to assist with the planning and forecasting of future
operating results. Barrick believes that adjusted net earnings is a
useful measure of our performance because these adjusting items do
not reflect the underlying operating performance of our core mining
business and are not necessarily indicative of future operating
results. Adjusted net earnings and adjusted net earnings per share
are intended to provide additional information only and do not have
any standardized meaning under IFRS and may not be comparable to
similar measures of performance presented by other companies. They
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. Further
details on these non-GAAP measures are provided in the MD&A
accompanying Barrick’s financial statements filed from time to time
on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov.
Reconciliation of Net Earnings to Net
Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings
per Share
($
millions, except per share amounts in dollars) |
For the years ended December 31 |
For the three months ended
December 31 |
|
|
2017 |
|
2016 |
|
2015 |
|
2017 |
|
2016 |
Net
earnings (loss) attributable to equity holders of the Company |
$ |
1,438 |
|
$ |
655 |
|
$ |
(2,838 |
) |
$ |
(314 |
) |
$ |
425 |
|
Impairment charges (reversals) related to long-lived assets1 |
|
(212 |
) |
|
(250 |
) |
|
3,897 |
|
|
916 |
|
|
(304 |
) |
Acquisition/disposition (gains)/losses2 |
|
(911 |
) |
|
42 |
|
|
(187 |
) |
|
(29 |
) |
|
7 |
|
Foreign
currency translation (gains)/losses |
|
72 |
|
|
199 |
|
|
120 |
|
|
12 |
|
|
18 |
|
Significant tax adjustments3 |
|
244 |
|
|
43 |
|
|
134 |
|
|
61 |
|
|
(16 |
) |
Other
expense adjustments4 |
|
178 |
|
|
114 |
|
|
135 |
|
|
17 |
|
|
39 |
|
Unrealized gains on non-hedge derivative instruments |
|
(1 |
) |
|
(32 |
) |
|
11 |
|
|
5 |
|
|
(9 |
) |
Tax effect and non-controlling interest5 |
|
68 |
|
|
47 |
|
|
(928 |
) |
|
(415 |
) |
|
95 |
|
Adjusted net earnings |
$ |
876 |
|
$ |
818 |
|
$ |
344 |
|
$ |
253 |
|
$ |
255 |
|
Net
earnings (loss) per share6 |
|
1.23 |
|
|
0.56 |
|
|
(2.44 |
) |
|
(0.27 |
) |
|
0.36 |
|
Adjusted net earnings per share6 |
|
0.75 |
|
|
0.70 |
|
|
0.30 |
|
|
0.22 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net impairment reversals for the current year primarily relate
to impairment reversals at the Cerro Casale project upon
reclassification of the project’s net assets as held-for-sale as at
March 31, 2017 and impairment reversals at Lumwana during the
fourth quarter of 2017, partially offset by net impairments at
Acacia’s Bulyanhulu mine and the Pascua-Lama project during the
fourth quarter of 2017.
- Disposition gains for the current year primarily relate to 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.
- Significant tax adjustments for the current year primarily
relate to dividend withholding tax expense and a tax provision
relating to the impact of the proposed framework for Acacia
operations in Tanzania, partially offset by the anticipated impact
of the U.S tax reform.
- Other expense adjustments for the current year primarily relate
to losses on debt extinguishment and reduced operations program
costs at Acacia’s Bulyanhulu mine.
- Tax effect and non-controlling interest for the current year
primarily relates to the impairment reversals at the Cerro Casale
project, tax provision at Acacia and Pueblo Viejo depreciation
adjustment discussed above.
- 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 excludes 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 years ended December 31 |
For the three months ended December 31 |
|
|
2017 |
|
2016 |
|
2015 |
|
2017 |
|
2016 |
Net cash
provided by operating activities |
$ |
2,065 |
|
$ |
2,640 |
|
$ |
2,794 |
|
$ |
590 |
|
$ |
711 |
|
Capital expenditures |
|
(1,396 |
) |
|
(1,126 |
) |
|
(1,713 |
) |
|
(350 |
) |
|
(326 |
) |
Free cash flow |
$ |
669 |
|
$ |
1,514 |
|
$ |
1,081 |
|
$ |
240 |
|
$ |
385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENDNOTE 3Cost of sales related to gold per
ounce is calculated using cost of sales related to gold on an
attributable basis (removing the non-controlling interest of 40%
Pueblo Viejo and 36.1% Acacia from cost of sales), divided by
attributable gold ounces. Cost of sales related to copper per pound
is calculated using cost of sales related 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 23 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 years ended December 31 |
For the three months ended
December 31 |
|
Footnote |
|
2017 |
|
2016 |
|
2015 |
|
2017 |
|
2016 |
Cost of
sales related to gold production |
|
$ |
4,836 |
|
$ |
4,980 |
|
$ |
5,906 |
|
$ |
1,292 |
|
$ |
1,347 |
|
Depreciation |
|
|
(1,529 |
) |
|
(1,504 |
) |
|
(1,615 |
) |
|
(404 |
) |
|
(396 |
) |
By-product credits |
1 |
|
(135 |
) |
|
(184 |
) |
|
(214 |
) |
|
(30 |
) |
|
(41 |
) |
Realized
(gains)/losses on hedge and non-hedge derivatives |
2 |
|
23 |
|
|
89 |
|
|
128 |
|
|
4 |
|
|
18 |
|
Non-recurring items |
3 |
|
— |
|
|
24 |
|
|
(210 |
) |
|
— |
|
|
— |
|
Other |
4 |
|
(106 |
) |
|
(44 |
) |
|
25 |
|
|
(35 |
) |
|
(20 |
) |
Non-controlling interests (Pueblo Viejo and Acacia) |
5 |
|
(299 |
) |
|
(358 |
) |
|
(394 |
) |
|
(81 |
) |
|
(91 |
) |
Cash costs |
|
$ |
2,790 |
|
$ |
3,003 |
|
$ |
3,626 |
|
$ |
746 |
|
$ |
817 |
|
General & administrative costs |
|
|
248 |
|
|
256 |
|
|
233 |
|
|
62 |
|
|
39 |
|
Minesite
exploration and evaluation costs |
6 |
|
47 |
|
|
44 |
|
|
47 |
|
|
8 |
|
|
18 |
|
Minesite
sustaining capital expenditures |
7 |
|
1,109 |
|
|
944 |
|
|
1,359 |
|
|
279 |
|
|
298 |
|
Rehabilitation - accretion and amortization (operating sites) |
8 |
|
64 |
|
|
59 |
|
|
145 |
|
|
13 |
|
|
18 |
|
Non-controlling interest, copper operations and other |
9 |
|
(273 |
) |
|
(287 |
) |
|
(362 |
) |
|
(74 |
) |
|
(78 |
) |
All-in sustaining costs |
|
$ |
3,985 |
|
$ |
4,019 |
|
$ |
5,048 |
|
$ |
1,034 |
|
$ |
1,112 |
|
Project
exploration and evaluation and project costs |
6 |
|
307 |
|
|
193 |
|
|
308 |
|
|
90 |
|
|
64 |
|
Community
relations costs not related to current operations |
|
|
4 |
|
|
8 |
|
|
12 |
|
|
1 |
|
|
2 |
|
Project
capital expenditures |
7 |
|
273 |
|
|
175 |
|
|
133 |
|
|
81 |
|
|
51 |
|
Rehabilitation - accretion and amortization (non-operating
sites) |
8 |
|
20 |
|
|
11 |
|
|
12 |
|
|
4 |
|
|
4 |
|
Non-controlling interest and copper operations |
9 |
|
(21 |
) |
|
(42 |
) |
|
(43 |
) |
|
(9 |
) |
|
(4 |
) |
All-in costs |
|
$ |
4,568 |
|
$ |
4,364 |
|
$ |
5,470 |
|
$ |
1,201 |
|
$ |
1,229 |
|
Ounces sold - equity basis (000s ounces) |
10 |
|
5,302 |
|
|
5,503 |
|
|
6,083 |
|
|
1,372 |
|
|
1,519 |
|
Cost of sales per ounce |
11,12 |
$ |
794 |
|
$ |
798 |
|
$ |
859 |
|
$ |
801 |
|
$ |
784 |
|
Cash
costs per ounce |
12 |
$ |
526 |
|
$ |
546 |
|
$ |
596 |
|
$ |
545 |
|
$ |
540 |
|
Cash costs per ounce (on a co-product basis) |
12,13 |
$ |
544 |
|
$ |
569 |
|
$ |
619 |
|
$ |
561 |
|
$ |
557 |
|
All-in
sustaining costs per ounce |
12 |
$ |
750 |
|
$ |
730 |
|
$ |
831 |
|
$ |
756 |
|
$ |
732 |
|
All-in sustaining costs per ounce (on a co-product basis) |
12,13 |
$ |
768 |
|
$ |
753 |
|
$ |
854 |
|
$ |
772 |
|
$ |
749 |
|
All-in
costs per ounce |
12 |
$ |
860 |
|
$ |
792 |
|
$ |
900 |
|
$ |
882 |
|
$ |
809 |
|
All-in costs per ounce (on a co-product basis) |
12,13 |
$ |
878 |
|
$ |
815 |
|
$ |
923 |
|
$ |
898 |
|
$ |
826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- By-product creditsRevenues include the sale of
by-products for our gold and copper mines for the three months
ended December 31, 2017 of $30 million (2016: $41 million) and
the year ended December 31, 2017 of $135 million (2016:
$151 million; 2015: $140 million) and energy sales from the
Monte Rio power plant at our Pueblo Viejo mine for the three months
ended December 31, 2017 of $nil (2016: $nil) and the year
ended December 31, 2017 of $nil (2016: $33 million; 2015:
$74 million) up until its disposition on August 18, 2016.
- Realized (gains)/losses on hedge and
non-hedge derivativesIncludes realized hedge losses of
$5 million and $27 million for the three months and year
ended December 31, 2017, respectively (2016: $14 million
and $73 million, respectively; 2015: $106 million), and
realized non-hedge gains of $1 million and $4 million for
the three months and year ended December 31, 2017,
respectively (2016: $4 million and $16 million losses,
respectively; 2015: $22 million losses). Refer to Note 5 of
the Financial Statements for further information.
- Non-recurring itemsThese gains/costs
are not indicative of our cost of production and have been excluded
from the calculation of cash costs.
- OtherOther adjustments include
adding the net margins related to power sales at Pueblo Viejo of
$nil and $nil, respectively, for the three months and year ended
December 31, 2017 (2016: $nil and $5 million,
respectively; 2015: $12 million) and adding the cost of treatment
and refining charges of $nil and $1 million, respectively, for the
three months and year ended December 31, 2017 (2016:
$4 million and $16 million, respectively; 2015: $14
million). 2016 and 2017 includes the removal of cash costs
associated with our Pierina mine, which is mining incidental ounces
as it enters closure, of $35 million and $108 million for
the three months and year ended December 31, 2017,
respectively (2016: $24 million and $66 million,
respectively).
- Non-controlling interests (Pueblo Viejo and
Acacia)Non-controlling interests include non-controlling
interests related to gold production of $137 million and
$454 million, respectively, for the three months and year
ended December 31, 2017 (2016: $127 million and
$508 million, respectively; 2015: $681 million). Refer to Note
5 of the Financial Statements for further information.
- Exploration and evaluation
costsExploration, evaluation and project expenses are
presented as minesite if it supports current mine operations and
project if it relates to future projects. Refer to page 44 of our
fourth quarter MD&A.
- Capital expendituresCapital
expenditures are related to our gold sites only and are presented
on a 100% accrued basis. They are split between minesite sustaining
and project capital expenditures. Project capital expenditures are
distinct projects designed to increase the net present value of the
mine and are not related to current production. Significant
projects in the current year are Crossroads, Cortez Hills Lower
Zone, Range Front Declines and Goldrush. Refer to page 43 of our
fourth quarter MD&A.
- Rehabilitation - accretion and
amortizationIncludes depreciation on the assets related to
rehabilitation provisions of our gold operations and accretion on
the rehabilitation provisions of our gold operations, split between
operating and non-operating sites.
- Non-controlling interest and copper
operationsRemoves general & administrative costs
related to non-controlling interests and copper based on a
percentage allocation of revenue. Also removes exploration,
evaluation and project costs, rehabilitation costs and capital
expenditures incurred by our copper sites and the non-controlling
interest of our Acacia and Pueblo Viejo operating segment and South
Arturo. In 2016 and 2017, figures remove the impact of Pierina,
which is mining incidental ounces as it enters closure. The impact
is summarized as the following:
($ millions) |
For the years ended December 31 |
For the three monthsended December 31 |
Non-controlling interest, copper operations and other |
|
2017 |
|
2016 |
|
2015 |
|
2017 |
|
2016 |
General & administrative costs |
$ |
(21 |
) |
$ |
(36 |
) |
$ |
(53 |
) |
$ |
(8 |
) |
$ |
(5 |
) |
Minesite
exploration and evaluation costs |
|
(12 |
) |
|
(9 |
) |
|
(8 |
) |
|
1 |
|
|
(3 |
) |
Rehabilitation - accretion and amortization (operating sites) |
|
(10 |
) |
|
(9 |
) |
|
(13 |
) |
|
(2 |
) |
|
(4 |
) |
Minesite sustaining capital expenditures |
|
(230 |
) |
|
(233 |
) |
|
(288 |
) |
|
(65 |
) |
|
(66 |
) |
All-in sustaining costs total |
$ |
(273 |
) |
$ |
(287 |
) |
$ |
(362 |
) |
$ |
(74 |
) |
$ |
(78 |
) |
Project
exploration and evaluation and project costs |
|
(17 |
) |
|
(12 |
) |
|
(11 |
) |
|
(8 |
) |
|
(4 |
) |
Project capital expenditures |
|
(4 |
) |
|
(30 |
) |
|
(32 |
) |
|
(1 |
) |
|
— |
|
All-in costs total |
$ |
(21 |
) |
$ |
(42 |
) |
$ |
(43 |
) |
$ |
(9 |
) |
$ |
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Ounces sold - equity basisIn 2016
and 2017, figures remove the impact of Pierina, which is mining
incidental ounces as it enters closure.
- Cost of sales per ounceIn 2016 and
2017, figures remove the cost of sales impact of Pierina of $55
million and $174 million, respectively, for the three months and
year ended December 31, 2017 (2016: $30 million and $82
million, respectively), which is mining incidental ounces as it
enters closure. Cost of sales per ounce excludes non-controlling
interest related to gold production. Cost of sales related to gold
per ounce is calculated using cost of sales on an attributable
basis (removing the non-controlling interest of 40% Pueblo Viejo
and 36.1% Acacia from cost of sales), divided by attributable gold
ounces.
- Per ounce figuresCost of sales per
ounce, cash costs per ounce, all-in sustaining costs per ounce and
all-in costs per ounce may not calculate based on amounts presented
in this table due to rounding.
- Co-product costs per ounceCash
costs per ounce, all-in sustaining costs per ounce and all-in costs
per ounce presented on a co-product basis remove the impact of
by-product credits of our gold production (net of non-controlling
interest) calculated as:
($ millions) |
For the years ended December 31 |
For the three monthsended December 31 |
|
|
2017 |
|
2016 |
|
2015 |
|
2017 |
|
2016 |
By-product credits |
$ |
135 |
|
$ |
184 |
|
$ |
214 |
|
$ |
30 |
|
$ |
41 |
|
Non-controlling interest |
|
(30 |
) |
|
(53 |
) |
|
(62 |
) |
|
(6 |
) |
|
(13 |
) |
By-product credits (net of non-controlling interest) |
$ |
105 |
|
$ |
131 |
|
$ |
152 |
|
$ |
24 |
|
$ |
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ENDNOTE 5Estimated in accordance with National
Instrument 43-101 as required by Canadian securities regulatory
authorities. Estimates are as of December 31, 2017, unless
otherwise noted. Proven reserves of 398.3 million tonnes grading
1.91 g/t, representing 24.5 million ounces of gold, and 170.7
million tonnes grading 0.556%, representing 2.095 billion pounds of
copper. Probable reserves of 0.9 billion tonnes grading 1.39 g/t,
representing 40.1 million ounces of gold, and 456.7 million tonnes
grading 0.592%, representing 5.956 billion pounds of copper.
Measured resources of 400.0 million tonnes grading 0.92 g/t,
representing 11.8 million ounces of gold, and 90.9 million tonnes
grading 0.401%, representing 803.1 million pounds of copper.
Indicated resources of 1.6 billion tonnes grading 1.54 g/t,
representing 76.8 million ounces of gold, and 581.2 million tonnes
grading 0.506%, representing 6.484 billion pounds of copper.
Inferred resources of 795.4 million tonnes grading 1.21 g/t,
representing 30.8 million ounces of gold, and 125.4 million tonnes
grading 0.482%, representing 1.331 billion pounds of copper.
Pascua-Lama measured resources of 42.8 million tonnes grading 1.86
g/t representing 2.6 million ounces of gold, and indicated
resources of 391.7 million tonnes grading 1.49 g/t, representing
18.8 million ounces of gold. Goldrush probable reserves of 5.7
million tonnes grading 8.12 g/t, representing 1.5 million ounces of
gold. Donlin Gold measured resources of 3.9 million tonnes grading
2.52 g/t (50% basis) representing 0.3 million ounces of gold (50%
basis), and indicated resources of 266.8 million tonnes grading
2.24 g/t (50% basis), representing 19.2 million ounces of gold (50%
basis). Alturas inferred resources of 211 million tonnes grading
1.0 g/t, representing 6.8 million ounces of gold. Norte Abierto
(formerly known as the Cerro Casale project, comprised of the Cerro
Casale, Caspiche and Luciano deposits) proven reserves of 114.9
million tonnes grading 0.65 g/t (50% basis) representing 2.4
million ounces of gold (50% basis), and probable reserves of 484.0
million tonnes grading 0.59 g/t (50% basis), representing 9.2
million ounces of gold (50% basis). Norte Abierto measured
resources of 310.1 million tonnes grading 0.57 g/t (50% basis)
representing 5.7 million ounces of gold (50% basis, indicated
resources of 391.8 million tonnes grading 0.47 g/t (50% basis)
representing 6.0 million ounces of gold (50% basis), and inferred
resources of 99.1 million tonnes grading 0.29 g/t (50% basis)
representing 0.9 million ounces of gold (50% basis). 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 87-92 of Barrick’s Fourth
Quarter and Year-End 2017 Report.
ENDNOTE 6“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 years
ended December 31 |
For the three months
ended December 31 |
|
|
2017 |
|
2016 |
|
2015 |
|
2017 |
|
2016 |
Cost of
sales |
$ |
399 |
|
$ |
319 |
|
$ |
814 |
|
$ |
107 |
|
$ |
84 |
|
Depreciation/amortization |
|
(83 |
) |
|
(45 |
) |
|
(104 |
) |
|
(24 |
) |
|
(15 |
) |
Treatment and
refinement charges |
|
157 |
|
|
167 |
|
|
178 |
|
|
41 |
|
|
43 |
|
Cash cost of
sales applicable to equity method investments |
|
245 |
|
|
203 |
|
|
23 |
|
|
75 |
|
|
53 |
|
Less:
royalties |
|
(38 |
) |
|
(41 |
) |
|
(101 |
) |
|
(11 |
) |
|
(9 |
) |
By-product
credits |
|
(5 |
) |
|
— |
|
|
(1 |
) |
|
(1 |
) |
|
— |
|
Other |
|
— |
|
|
— |
|
|
72 |
|
|
— |
|
|
— |
|
C1 cash cost of sales |
$ |
675 |
|
$ |
603 |
|
$ |
881 |
|
$ |
187 |
|
$ |
156 |
|
General & administrative costs |
|
12 |
|
|
14 |
|
|
21 |
|
|
3 |
|
|
3 |
|
Rehabilitation -
accretion and amortization |
|
12 |
|
|
7 |
|
|
6 |
|
|
3 |
|
|
2 |
|
Royalties |
|
38 |
|
|
41 |
|
|
101 |
|
|
11 |
|
|
9 |
|
Minesite
exploration and evaluation costs |
|
6 |
|
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
Minesite sustaining capital expenditures |
|
204 |
|
|
169 |
|
|
177 |
|
|
67 |
|
|
48 |
|
All-in sustaining costs |
$ |
947 |
|
$ |
834 |
|
$ |
1,186 |
|
$ |
272 |
|
$ |
218 |
|
Pounds sold - consolidated basis (millions pounds) |
|
405 |
|
|
405 |
|
|
510 |
|
|
107 |
|
|
107 |
|
Cost of sales per pound1,2 |
$ |
1.77 |
|
$ |
1.41 |
|
$ |
1.65 |
|
$ |
1.79 |
|
$ |
1.43 |
|
C1 cash cost per pound1 |
$ |
1.66 |
|
$ |
1.49 |
|
$ |
1.73 |
|
$ |
1.72 |
|
$ |
1.47 |
|
All-in sustaining costs per pound1 |
$ |
2.34 |
|
$ |
2.05 |
|
$ |
2.33 |
|
$ |
2.51 |
|
$ |
2.04 |
|
- 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.
- Cost of sales per pound related to copper 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 7Includes
$87 million cash primarily held at Acacia, which may not be
readily deployed.
ENDNOTE 8Amount excludes
capital leases and includes Acacia (100% basis).
ENDNOTE 9Total reportable
incident frequency rate (TRIFR) is a ratio calculated as follows:
number of reportable injuries x 200,000 hours divided by the total
number of hours worked. Reportable injuries include fatalities,
lost time injuries, restricted duty injuries, and medically treated
injuries.
ENDNOTE 10Barrick’s share.
ENDNOTE 11Attributable capital
expenditures are presented on the same basis as guidance, which
includes 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 12For 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 13For additional detail
regarding Lagunas Norte, see the Technical Report on the Lagunas
Norte Mine, La Libertad Region, Peru dated March 21, 2016 and filed
on SEDAR at www.sedar.com and EDGAR at www.sec.gov on March 28,
2016.
ENDNOTE 14Total gold cash costs
and all-in sustaining costs per ounce include the impact of hedges
and/or costs allocated to non-operating sites.
ENDNOTE 15Operating unit
guidance ranges reflect expectations at each individual operating
unit, and may not add up to the company-wide guidance range total.
The company-wide 2017 results and guidance ranges exclude Pierina
which is mining incidental ounces as it enters closure.
ENDNOTE 16Due to our hedging
activities, which are reflected in these sensitivities, we are
partially protected against changes in these factors.
ENDNOTE 17Utilizing option
collar strategies, the Company has protected the downside of a
portion of its expected 2018 copper production at an average floor
price of $2.83 per pound and can participate on the same amount up
to an average price of $3.25 per pound. Our remaining copper
production is subject to market prices.
Key Statistics
Barrick Gold
Corporation |
|
|
|
|
(in United States
dollars) |
Three months ended December 31, |
|
Twelve months ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Financial
Results (millions) |
|
|
|
|
Revenues |
$ |
2,228 |
|
$ |
2,319 |
|
$ |
8,374 |
|
$ |
8,558 |
|
Cost of sales |
|
1,411 |
|
|
1,454 |
|
|
5,300 |
|
|
5,405 |
|
Net earnings1 |
|
(314 |
) |
|
425 |
|
|
1,438 |
|
|
655 |
|
Adjusted net
earnings2 |
|
253 |
|
|
255 |
|
|
876 |
|
|
818 |
|
Adjusted EBITDA2 |
|
1,054 |
|
|
1,045 |
|
|
4,017 |
|
|
4,021 |
|
Total capital
expenditures - sustaining3 |
|
279 |
|
|
299 |
|
|
1,109 |
|
|
944 |
|
Total project capital
expenditures3 |
|
81 |
|
|
51 |
|
|
273 |
|
|
175 |
|
Net cash provided by
operating activities |
|
590 |
|
|
711 |
|
|
2,065 |
|
|
2,640 |
|
Free cash flow2 |
|
240 |
|
|
385 |
|
|
669 |
|
|
1,514 |
|
Per share data
(dollars) |
|
|
|
|
Net
earnings (loss) (basic and diluted) |
|
(0.27 |
) |
|
0.36 |
|
|
1.23 |
|
|
0.56 |
|
Adjusted
net earnings (basic)2 |
$ |
0.22 |
|
$ |
0.22 |
|
$ |
0.75 |
|
$ |
0.70 |
|
Weighted average basic
common shares (millions) |
|
1,166 |
|
|
1,165 |
|
|
1,166 |
|
|
1,165 |
|
Weighted
average diluted common shares (millions) |
|
1,166 |
|
|
1,166 |
|
|
1,166 |
|
|
1,165 |
|
Operating
Results |
|
|
|
|
Gold production
(thousands of ounces)4 |
|
1,339 |
|
|
1,516 |
|
|
5,323 |
|
|
5,517 |
|
Gold sold (thousands of
ounces)4 |
|
1,372 |
|
|
1,519 |
|
|
5,302 |
|
|
5,503 |
|
Per ounce data |
|
|
|
|
Average
spot gold price |
$ |
1,275 |
|
$ |
1,222 |
|
$ |
1,257 |
|
$ |
1,251 |
|
Average
realized gold price2,4 |
|
1,280 |
|
|
1,217 |
|
|
1,258 |
|
|
1,248 |
|
Cost of
sales (Barrick’s share)4,5 |
|
801 |
|
|
784 |
|
|
794 |
|
|
798 |
|
All-in
sustaining costs2,4 |
$ |
756 |
|
$ |
732 |
|
$ |
750 |
|
$ |
730 |
|
Copper production
(millions of pounds)6 |
|
99 |
|
|
101 |
|
|
413 |
|
|
415 |
|
Copper sold (millions
of pounds)6 |
|
107 |
|
|
107 |
|
|
405 |
|
|
405 |
|
Per pound data |
|
|
|
|
Average
spot copper price |
$ |
3.09 |
|
$ |
2.39 |
|
$ |
2.80 |
|
$ |
2.21 |
|
Average
realized copper price2,6 |
|
3.34 |
|
|
2.62 |
|
|
2.95 |
|
|
2.29 |
|
Cost of
sales (Barrick’s share)6,7 |
|
1.79 |
|
|
1.43 |
|
|
1.77 |
|
|
1.41 |
|
C1 cash
costs2,6 |
|
1.72 |
|
|
1.47 |
|
|
1.66 |
|
|
1.49 |
|
All-in sustaining costs2,6 |
$ |
2.51 |
|
$ |
2.04 |
|
$ |
2.34 |
|
$ |
2.05 |
|
|
|
|
As at December 31, |
|
As at December 31, |
|
|
|
|
|
2017 |
|
|
2016 |
|
Financial
Position (millions) |
|
|
|
|
Cash and
equivalents |
|
|
$ |
2,234 |
|
$ |
2,389 |
|
Working
capital (excluding cash) |
|
|
$ |
1,184 |
|
$ |
1,155 |
|
- Net earnings represents net earnings attributable to the equity
holders of the Company.
- Adjusted net earnings, adjusted EBITDA, free cash flow,
adjusted net earnings per share, realized gold price, all-in
sustaining 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 69 to 84 of our fourth
quarter MD&A.
- 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.
- Includes Acacia on a 63.9% basis, Pueblo Viejo on a 60% basis,
South Arturo on a 60% basis, and Veladero on a 100% basis up to
June 30, 2017 and a 50% basis thereafter, which reflects our equity
share of production and sales. 2016 includes production and sales
from Bald Mountain and Round Mountain up to January 11, 2016, the
effective date of sale of the assets.
- 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.
- Amounts reflect production and sales from Jabal Sayid and
Zaldívar, both on a 50% basis, which reflects our equity share of
production, and Lumwana.
- 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 December 31, |
|
Twelve months ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Gold (equity
ounces (000s)) |
|
|
|
|
Barrick
Nevada1 |
|
530 |
|
|
601 |
|
|
2,312 |
|
|
2,155 |
|
Pueblo
Viejo2 |
|
182 |
|
|
189 |
|
|
650 |
|
|
700 |
|
Lagunas
Norte |
|
113 |
|
|
110 |
|
|
387 |
|
|
435 |
|
Veladero3 |
|
110 |
|
|
177 |
|
|
432 |
|
|
544 |
|
Turquoise
Ridge |
|
64 |
|
|
65 |
|
|
211 |
|
|
266 |
|
Acacia4 |
|
95 |
|
|
136 |
|
|
491 |
|
|
530 |
|
Other
Mines - Gold5 |
|
245 |
|
|
238 |
|
|
840 |
|
|
887 |
|
Total |
|
1,339 |
|
|
1,516 |
|
|
5,323 |
|
|
5,517 |
|
|
|
|
|
|
Copper (equity pounds (millions))6 |
|
99 |
|
|
101 |
|
|
413 |
|
|
415 |
|
|
Cost of Sales per unit (Barrick’s
share) |
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Gold Cost
of Sales per ounce ($/oz)7 |
|
|
|
|
Barrick
Nevada1 |
$ |
794 |
|
$ |
864 |
|
$ |
792 |
|
$ |
876 |
|
Pueblo
Viejo2 |
|
795 |
|
|
450 |
|
|
699 |
|
|
564 |
|
Lagunas
Norte |
|
659 |
|
|
612 |
|
|
617 |
|
|
651 |
|
Veladero3 |
|
953 |
|
|
892 |
|
|
897 |
|
|
872 |
|
Turquoise
Ridge |
|
672 |
|
|
595 |
|
|
715 |
|
|
603 |
|
Acacia4 |
|
774 |
|
|
935 |
|
|
791 |
|
|
880 |
|
Total |
$ |
801 |
|
$ |
784 |
|
$ |
794 |
|
$ |
798 |
|
|
|
|
|
|
Copper Cost of Sales per pound ($/lb)8 |
$ |
1.79 |
|
$ |
1.43 |
|
$ |
1.77 |
|
$ |
1.41 |
|
|
All-in sustaining costs9 |
|
Three months ended December 31, |
|
Twelve months ended December 31, |
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Gold
All-in Sustaining Costs ($/oz) |
|
|
|
|
Barrick
Nevada1 |
$ |
696 |
|
$ |
630 |
|
$ |
624 |
|
$ |
618 |
|
Pueblo
Viejo2 |
|
498 |
|
|
443 |
|
|
525 |
|
|
490 |
|
Lagunas
Norte |
|
547 |
|
|
436 |
|
|
483 |
|
|
529 |
|
Veladero3 |
|
950 |
|
|
905 |
|
|
987 |
|
|
769 |
|
Turquoise
Ridge |
|
638 |
|
|
610 |
|
|
733 |
|
|
625 |
|
Acacia4 |
|
779 |
|
|
952 |
|
|
875 |
|
|
958 |
|
Total |
$ |
756 |
|
$ |
732 |
|
$ |
750 |
|
$ |
730 |
|
|
|
|
|
|
Copper All-in Sustaining Costs ($/lb)6 |
$ |
2.51 |
|
$ |
2.04 |
|
$ |
2.34 |
|
$ |
2.05 |
|
- Reflects production and sales from Goldstrike, Cortez, and
South Arturo on a 60% basis, which reflects our equity share.
- Reflects production and sales from Pueblo Viejo on a 60% basis,
which reflects our equity share.
- Reflects production and sales from Veladero on a 100% basis up
to June 30, 2017 and a 50% basis thereafter, which reflects our
equity share during such periods.
- Reflects production and sales from Acacia on a 63.9% basis,
which reflects our equity share.
- In 2017, Other Mines - Gold includes Golden Sunlight, Hemlo,
Porgera on a 47.5% basis and Kalgoorlie on a 50% basis. In 2016,
Other Mines - Gold includes Golden Sunlight, Hemlo, Porgera on a
47.5% basis, Kalgoorlie on a 50% basis and production from Bald
Mountain and Round Mountain up to January 11, 2016, the effective
date of sale of the assets.
- Reflects production and sales from Lumwana, Jabal Sayid on a
50% basis and Zaldívar on a 50% basis, which reflects our equity
share.
- 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.
- 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.
- 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 69 to 84 of our fourth quarter MD&A.
|
Consolidated Statements of
Income
|
|
|
Barrick Gold Corporation For the years ended
December 31 (in millions of United States dollars, except per
share data) |
|
2017 |
|
|
2016 |
|
Revenue (notes 5 and 6) |
$ |
8,374 |
|
$ |
8,558 |
|
Costs and
expenses |
|
|
Cost of sales (notes 5
and 7) |
|
5,300 |
|
|
5,405 |
|
General and
administrative expenses (note 11) |
|
248 |
|
|
256 |
|
Exploration, evaluation
and project expenses (notes 5 and 8) |
|
354 |
|
|
237 |
|
Impairment reversals
(note 10) |
|
(212 |
) |
|
(250 |
) |
Loss on currency
translation (note 9b) |
|
72 |
|
|
199 |
|
Closed mine
rehabilitation (note 27b) |
|
55 |
|
|
130 |
|
Income from equity
investees (note 16) |
|
(76 |
) |
|
(20 |
) |
Gain on non-hedge
derivatives (note 25e) |
|
(6 |
) |
|
(12 |
) |
Other
expense (income) (note 9a) |
|
(799 |
) |
|
60 |
|
Income before
finance items and income taxes |
|
3,438 |
|
|
2,553 |
|
Finance
costs, net (note 14) |
|
(691 |
) |
|
(775 |
) |
Income before
income taxes |
|
2,747 |
|
|
1,778 |
|
Income
tax expense (note 12) |
|
(1,231 |
) |
|
(917 |
) |
Net income |
$ |
1,516 |
|
$ |
861 |
|
Attributable
to: |
|
|
Equity holders of
Barrick Gold Corporation |
$ |
1,438 |
|
$ |
655 |
|
Non-controlling interests (note 32) |
$ |
78 |
|
$ |
206 |
|
Earnings per share data attributable to the equity holders
of Barrick Gold Corporation (note 13) |
Net income |
|
|
Basic |
$ |
1.23 |
|
$ |
0.56 |
|
Diluted |
$ |
1.23 |
|
$ |
0.56 |
|
The notes
to these unaudited consolidated financial statements, which are
contained in the Fourth Quarter and Year End Report, available on
our website, are an integral part of these consolidated financial
statements. |
Consolidated Statements of Comprehensive
Income
Barrick Gold
Corporation |
|
For the
years ended December 31 (in millions of United States dollars) |
|
2017 |
|
|
2016 |
|
Net income |
$ |
1,516 |
|
$ |
861 |
|
Other
comprehensive income (loss), 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 $3 and ($9) |
|
(16 |
) |
|
16 |
|
Realized
(gains) losses on derivatives designated as cash flow hedges, net
of tax ($9) and ($8) |
|
23 |
|
|
64 |
|
Currency
translation adjustments, net of tax $nil and $nil |
|
9 |
|
|
95 |
|
Items that will
not be reclassified to profit or loss: |
|
|
Actuarial
gain (loss) on post-employment benefit obligations, net of tax ($6)
and ($4) |
|
18 |
|
|
7 |
|
Net change on equity investments, net of tax $nil and $nil |
|
4 |
|
|
6 |
|
Total other comprehensive income |
|
38 |
|
|
188 |
|
Total comprehensive income |
$ |
1,554 |
|
$ |
1,049 |
|
Attributable
to: |
|
|
Equity holders of
Barrick Gold Corporation |
$ |
1,476 |
|
$ |
843 |
|
Non-controlling interests |
$ |
78 |
|
$ |
206 |
|
The notes
to these unaudited consolidated financial statements, which are
contained in the Fourth Quarter and Year End Report, available on
our website, are an integral part of these consolidated financial
statements. |
Consolidated Statements of Cash
Flow
Barrick Gold
Corporation |
|
For the
years ended December 31 (in millions of United States dollars) |
|
2017 |
|
|
2016 |
|
OPERATING
ACTIVITIES |
|
|
Net income |
$ |
1,516 |
|
$ |
861 |
|
Adjustments for the
following items: |
|
|
Depreciation |
|
1,647 |
|
|
1,574 |
|
Finance
costs (note 14) |
|
705 |
|
|
788 |
|
Impairment reversals (note 10) |
|
(212 |
) |
|
(250 |
) |
Income
tax expense (note 12) |
|
1,231 |
|
|
917 |
|
Currency
translation losses (note 9b) |
|
72 |
|
|
199 |
|
Loss
(gain) on sale of non-current assets/investments (note 9a) |
|
(911 |
) |
|
42 |
|
Change in working
capital (note 15) |
|
(728 |
) |
|
(428 |
) |
Other
operating activities (note 15) |
|
(181 |
) |
|
(63 |
) |
Operating
cash flows before interest and income taxes |
|
3,139 |
|
|
3,640 |
|
Interest paid |
|
(425 |
) |
|
(513 |
) |
Income
taxes paid |
|
(649 |
) |
|
(487 |
) |
Net cash provided by operating activities |
|
2,065 |
|
|
2,640 |
|
INVESTING
ACTIVITIES |
|
|
Property, plant and
equipment |
|
|
Capital
expenditures (note 5) |
|
(1,396 |
) |
|
(1,126 |
) |
Sales
proceeds |
|
28 |
|
|
135 |
|
Divestitures (note
4) |
|
990 |
|
|
588 |
|
Investment
purchases |
|
(7 |
) |
|
— |
|
Net funds
(invested) received from equity method investments |
|
48 |
|
|
(9 |
) |
Net cash provided by (used in) investing
activities |
|
(337 |
) |
|
(412 |
) |
FINANCING
ACTIVITIES |
|
|
Debt (note 25b) |
|
|
Proceeds |
|
— |
|
|
5 |
|
Repayments |
|
(1,533 |
) |
|
(2,062 |
) |
Dividends (note
31) |
|
(125 |
) |
|
(86 |
) |
Funding from
non-controlling interests (note 32) |
|
13 |
|
|
70 |
|
Disbursements to
non-controlling interests (note 32) |
|
(139 |
) |
|
(95 |
) |
Debt
extinguishment costs |
|
(102 |
) |
|
(129 |
) |
Net cash used in financing activities |
|
(1,886 |
) |
|
(2,297 |
) |
Effect of exchange rate changes on cash and
equivalents |
|
3 |
|
|
3 |
|
Net decrease in cash
and equivalents |
|
(155 |
) |
|
(66 |
) |
Cash and
equivalents at beginning of year (note 25a) |
|
2,389 |
|
|
2,455 |
|
Cash and equivalents at the end of year |
$ |
2,234 |
|
$ |
2,389 |
|
The notes
to these unaudited consolidated financial statements, which are
contained in the Fourth Quarter and Year End Report, available on
our website, are an integral part of these consolidated financial
statements. |
Consolidated Balance Sheets
Barrick
Gold Corporation |
|
As
atDecember |
|
|
As atDecember |
|
(in millions of United States dollars) |
|
31, 2017 |
|
|
31, 2016 |
|
ASSETS |
|
|
Current
assets |
|
|
Cash
and equivalents (note 25a) |
$ |
2,234 |
|
$ |
2,389 |
|
Accounts receivable (note 18) |
|
239 |
|
|
249 |
|
Inventories (note 17) |
|
1,890 |
|
|
1,930 |
|
Other current assets (note 18) |
|
321 |
|
|
306 |
|
Total current
assets |
|
4,684 |
|
|
4,874 |
|
Non-current assets |
|
|
Non-current
portion of inventory (note 17) |
|
1,681 |
|
|
1,536 |
|
Equity in
investees (note 16) |
|
1,213 |
|
|
1,185 |
|
Property, plant
and equipment (note 19) |
|
13,806 |
|
|
14,103 |
|
Intangible
assets (note 20a) |
|
255 |
|
|
272 |
|
Goodwill (note
20b) |
|
1,330 |
|
|
1,371 |
|
Deferred income
tax assets (note 30) |
|
1,069 |
|
|
977 |
|
Other assets (note 22) |
|
1,270 |
|
|
946 |
|
Total assets |
$ |
25,308 |
|
$ |
25,264 |
|
LIABILITIES AND
EQUITY |
|
|
Current
liabilities |
|
|
Accounts
payable (note 23) |
$ |
1,059 |
|
$ |
1,084 |
|
Debt
(note 25b) |
|
59 |
|
|
143 |
|
Current
income tax liabilities |
|
298 |
|
|
283 |
|
Other current liabilities (note 24) |
|
331 |
|
|
309 |
|
Total current
liabilities |
|
1,747 |
|
|
1,819 |
|
Non-current
liabilities |
|
|
Debt
(note 25b) |
|
6,364 |
|
|
7,788 |
|
Provisions (note 27) |
|
3,141 |
|
|
2,363 |
|
Deferred
income tax liabilities (note 30) |
|
1,245 |
|
|
1,520 |
|
Other liabilities (note 29) |
|
1,744 |
|
|
1,461 |
|
Total liabilities |
|
14,241 |
|
|
14,951 |
|
Equity |
|
|
Capital stock (note
31) |
|
20,893 |
|
|
20,877 |
|
Deficit |
|
(11,759 |
) |
|
(13,074 |
) |
Accumulated other
comprehensive loss |
|
(169 |
) |
|
(189 |
) |
Other |
|
321 |
|
|
321 |
|
Total equity
attributable to Barrick Gold Corporation shareholders |
|
9,286 |
|
|
7,935 |
|
Non-controlling interests (note 32) |
|
1,781 |
|
|
2,378 |
|
Total equity |
|
11,067 |
|
|
10,313 |
|
Contingencies and commitments (notes 2, 17, 19 and 36) |
|
|
Total liabilities and equity |
$ |
25,308 |
|
$ |
25,264 |
|
The notes
to these unaudited consolidated financial statements, which are
contained in the Fourth Quarter and Year End Report, 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) |
Common Shares (in thousands) |
|
Capital stock |
|
Retained earnings (deficit) |
|
Accumulatedother comprehensiveincome (loss)1 |
|
Other2 |
|
Total equity attributable to shareholders |
|
Non-controlling interests |
|
Total equity |
|
At January 1, 2017 |
1,165,574 |
|
$ |
20,877 |
|
$ |
(13,074 |
) |
$ |
(189 |
) |
$ |
321 |
|
$ |
7,935 |
|
$ |
2,378 |
|
$ |
10,313 |
|
Net
income |
— |
|
|
— |
|
|
1,438 |
|
|
— |
|
|
— |
|
|
1,438 |
|
|
78 |
|
|
1,516 |
|
Total other comprehensive income |
— |
|
|
— |
|
|
18 |
|
|
20 |
|
|
— |
|
|
38 |
|
|
— |
|
|
38 |
|
Total comprehensive income |
— |
|
$ |
— |
|
$ |
1,456 |
|
$ |
20 |
|
$ |
— |
|
$ |
1,476 |
|
$ |
78 |
|
$ |
1,554 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends |
— |
|
|
— |
|
|
(125 |
) |
|
— |
|
|
— |
|
|
(125 |
) |
|
— |
|
|
(125 |
) |
Dividend
reinvestment plan |
1,003 |
|
|
16 |
|
|
(16 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Decrease
in non-controlling interest (note 4b) |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(493 |
) |
|
(493 |
) |
Funding
from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
13 |
|
|
13 |
|
Other decrease in non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(195 |
) |
|
(195 |
) |
Total transactions with owners |
1,003 |
|
$ |
16 |
|
$ |
(141 |
) |
$ |
— |
|
$ |
— |
|
$ |
(125 |
) |
$ |
(675 |
) |
$ |
(800 |
) |
At December 31, 2017 |
1,166,577 |
|
$ |
20,893 |
|
$ |
(11,759 |
) |
$ |
(169 |
) |
$ |
321 |
|
$ |
9,286 |
|
$ |
1,781 |
|
$ |
11,067 |
|
|
|
|
|
|
|
|
|
|
At January 1, 2016 |
1,165,081 |
|
$ |
20,869 |
|
$ |
(13,642 |
) |
$ |
(370 |
) |
$ |
321 |
|
$ |
7,178 |
|
$ |
2,277 |
|
$ |
9,455 |
|
Net
Income |
— |
|
|
— |
|
|
655 |
|
|
— |
|
|
— |
|
|
655 |
|
|
206 |
|
|
861 |
|
Total other comprehensive income |
— |
|
|
— |
|
|
7 |
|
|
181 |
|
|
— |
|
|
188 |
|
|
— |
|
|
188 |
|
Total comprehensive income |
— |
|
$ |
— |
|
$ |
662 |
|
$ |
181 |
|
$ |
— |
|
$ |
843 |
|
$ |
206 |
|
$ |
1,049 |
|
Transactions with owners |
|
|
|
|
|
|
|
|
Dividends |
— |
|
|
— |
|
|
(86 |
) |
|
— |
|
|
— |
|
|
(86 |
) |
|
— |
|
|
(86 |
) |
Dividend
reinvestment plan |
493 |
|
|
8 |
|
|
(8 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Funding
from non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
70 |
|
|
70 |
|
Other
decrease in non-controlling interests |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(175 |
) |
|
(175 |
) |
Total transactions with owners |
493 |
|
$ |
8 |
|
$ |
(94 |
) |
$ |
— |
|
$ |
— |
|
$ |
(86 |
) |
$ |
(105 |
) |
$ |
(191 |
) |
At December 31, 2016 |
1,165,574 |
|
$ |
20,877 |
|
$ |
(13,074 |
) |
$ |
(189 |
) |
$ |
321 |
|
$ |
7,935 |
|
$ |
2,378 |
|
$ |
10,313 |
|
- Includes cumulative translation adjustments as at
December 31, 2017: $73 million loss (2016: $82 million).
- Includes additional paid-in capital as at December 31,
2017: $283 million (December 31, 2016: $283 million) and
convertible borrowings - equity component as at
December 31, 2017: $38 million (December 31, 2016: $38
million).
The notes to these unaudited consolidated financial statements,
which are contained in the Fourth Quarter and Year End Report,
available on our website, are an integral part of these
consolidated financial statements. |
HEAD OFFICEBarrick Gold
CorporationBrookfield PlaceTD Canada Trust Tower161 Bay
Street, Suite 3700Toronto, Ontario M5J 2S1
Telephone: +1 416 861-9911Toll-free:
1-800-720-7415Fax: +1 416 861-2492Email:
investor@barrick.comWebsite: www.barrick.com
TRANSFER AGENTS AND
REGISTRARSAST Trust Company (Canada)P.O.
Box 700, Postal Station BMontreal, Quebec H3B
3K3orAmerican Stock Transfer & Trust Company,
LLC6201 – 15 AvenueBrooklyn, New York 11219
Telephone: 1-800-387-0825Fax:
1-888-249-6189Email: inquiries@astfinancial.comWebsite:
www.astfinancial.com
SHARES
LISTEDABX The New York Stock
Exchange
The Toronto Stock Exchange
INVESTOR CONTACTDaniel
OhSenior Vice PresidentInvestor Engagement and
GovernanceTelephone: +1 416 307-7474Email: doh@barrick.com
MEDIA CONTACTAndy
LloydSenior Vice PresidentCommunicationsTelephone: +1 416
307-7414Email: 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”, “target”, “plan”, “objective”, “assume”, “aspire”,
“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) cash flow forecasts; (iv)
projected capital, operating, and exploration expenditures; (v)
Barrick’s expectations regarding the potential benefits resulting
from a new partnership between Acacia Mining plc (“Acacia”) and the
Government of Tanzania; (vi) targeted debt and cost reductions;
(vii) mine life and production rates; (viii) potential
mineralization and metal or mineral recoveries; (ix) savings from
our improved capital management program; (x) Barrick’s
Best-in-Class program (including potential improvements to
financial and operating performance that may result from certain
Best-in-Class initiatives); (xi) the timing and results of the
prefeasibility study at Pascua-Lama; (xii) the potential to
identify new reserves and resources; (xiii) our pipeline of high
confidence projects at or near existing operations; (xiv) the
extension of mine life at Lagunas Norte; (xv) the benefits of
unifying the Cortez and Goldstrike operations; (xvi) the potential
impact and benefits of removing current constraints on processing
at Turquoise Ridge; (xvii) the potential impact and benefits of
Barrick’s ongoing digital transformation; (xviii) our ability to
convert resources into reserves; (xix) asset sales, joint ventures,
and partnerships; and (xx) 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
Acacia will approve the terms of any final agreement reached
between Barrick and the Government of Tanzania with respect to the
dispute between Acacia and the Government of Tanzania; 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; the
outcome of the appeal of the decision of Chile's Superintendencia
del Medio Ambiente; 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; 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.
Barrick Gold (NYSE:ABX)
過去 株価チャート
から 4 2024 まで 5 2024
Barrick Gold (NYSE:ABX)
過去 株価チャート
から 5 2023 まで 5 2024