Barrick Reports Second Quarter 2018 Results
All amounts expressed in U.S. dollars unless otherwise indicated
- Barrick reported a net loss of $94 million ($0.08 per share), and adjusted net earnings1 of $81 million ($0.07 per share) for the second quarter.
- The Company reported second quarter revenues of $1.71 billion, net cash provided by operating activities ("operating cash flow") of $141 million, and negative free cash flow2 of $172 million.
- Gold production in the second quarter was 1.07 million ounces, at a cost of sales applicable to gold3 of $882 per ounce, all-in sustaining costs4 of $856 per ounce, and cash costs4 of $605 per ounce.
- Copper production was 83 million pounds, at a cost of sales applicable to copper3 of $2.45 per pound, all-in sustaining costs5 of $3.04 per pound, and C1 cash costs5 of $2.10 per pound.
- Based on further positive drill results, Barrick is announcing a new, high grade gold discovery at Fourmile, located within the Cortez District in Nevada. The Company has also allocated additional funding for drilling at the project over the remainder of 2018.
- Growth projects in Nevada and Dominican Republic continue to progress according to schedule and within budget.
- Subsequent to the quarter end, total debt has been reduced from approximately $6.4 billion to $5.8 billion, bringing Barrick's total debt repayments over the past five years to $10 billion.
- Full-year gold production and cost guidance remains unchanged at 4.5-5.0 million ounces, at a cost of sales3 of $810-$850 per ounce, all-in sustaining costs4 of $765-$815 per ounce, and cash costs4 of $540-$575 per ounce.
- Full-year copper production is expected to be 345-410 million pounds, at a cost of sales3 of $2.00-$2.30 per pound, all-in sustaining costs5 of $2.55-$2.85 per pound, and C1 cash costs5 of $1.80-$2.00 per pound.
TORONTO, July 25, 2018 (GLOBE NEWSWIRE) -- Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) ("Barrick" or the "Company") today reported second quarter results for the period ending June 30, 2018. Gold production and costs for the quarter were in line with expectations, with earnings and cash flow impacted by planned maintenance activities at Barrick Nevada and Pueblo Viejo. The Company remains on track to meet full-year gold production guidance, with higher production and lower costs expected in the second half of 2018.
Our Nevada growth projects at Cortez, Goldrush, and Turquoise Ridge continued to advance according to schedule and within budget, underpinning the next generation of profitable production from this core region for Barrick. In addition, our pipeline continues to grow with the announcement today of a new, high grade gold discovery at Fourmile, located just two kilometers north of the Goldrush project in Nevada. This discovery demonstrates the significant untapped geological potential of Barrick's properties in Nevada, where the Company is evaluating a project to increase processing capacity in order to accommodate new production from organic projects, and bring forward production from stockpiles. Prefeasibility level studies in support of a plant expansion at the Pueblo Viejo mine in the Dominican Republic are also advancing, with a pilot heap leach pad now in operation at the site.
Partnerships form a core element of our strategy to drive long-term value. On July 9, Barrick and Shandong Gold Group signed an enhanced strategic cooperation agreement, reflecting Barrick's unique focus on creating distinctive, enduring, and trust-based relationships with China and China's best companies, as we jointly explore opportunities to enhance long-term value for our respective owners, and for our government and community partners. Under the agreement, Shandong is currently completing an independent evaluation focused on the potential to develop a mining project at Lama in Argentina, including a high-level evaluation of potential synergies between Lama and the nearby Veladero operation.
OUTLOOK
Our 2018 consolidated gold production guidance remains unchanged at 4.5-5.0 million ounces, at a cost of sales3 of $810-$850 per ounce, cash costs4 of $540-$575 per ounce, and all-in sustaining costs4 of $765-$815 per ounce.
We expect gold production and costs to improve steadily over the second half of the year, driven by stronger performance at Barrick Nevada and Pueblo Viejo. Gold production in the third quarter is anticipated to be around 1.2 million ounces.
At Barrick Nevada, throughput and grade is expected to improve due to the completion of scheduled maintenance shutdowns in the first half of the year, as well as increased production from the Cortez Hills open pit. At Pueblo Viejo, we expect an increase in quarter-over-quarter production as we transition to higher grades in Phase Five and Six of the Moore Pit. Third quarter throughput is expected to remain in line with the second quarter as we complete the second of two scheduled autoclave maintenance shutdowns for the year. We anticipate higher grades at Pueblo Viejo to persist into the fourth quarter, with higher throughput. Full processing capacity has also been restored at the Porgera Joint Venture earlier than initially expected, following the earthquake that struck Papua New Guinea in late February.
We expect to produce 345-410 million pounds of copper in 2018 at a cost of sales3 of $2.00-$2.30 per pound, C1 cash costs5 of $1.80-$2.00 per pound, and all-in sustaining costs5 of $2.55-$2.85 per pound. Copper production is anticipated to improve progressively over the third and fourth quarters, driven by a steady improvement in grade and crusher reliability at Lumwana, as well as an optimization of stacking procedures at Zaldívar.
Total attributable capital expenditure guidance6 for 2018 remains unchanged at $1.40-$1.60 billion, including mine site sustaining capital7 of $0.95-$1.10 billion, and project capital expenditures8 of $450-$550 million.
We are adjusting our 2018 effective income tax rate guidance to 44-46 percent, compared to our initial guidance of 41-43 percent, reflecting lower spot gold prices and sales mix.
FINANCIAL HIGHLIGHTS
The Company reported a net loss of $94 million ($0.08 per share) in the second quarter and adjusted net earnings1 of $81 million ($0.07 per share). Operating cash flow was $141 million. Lower adjusted net earnings and operating cash flow compared to the prior-year period primarily reflect the impact of lower gold sales. In addition, while total direct mining costs were in line with the prior-year period, direct mining costs on a per ounce basis increased, primarily due to the impact of fewer ounces sold, as well as expenses associated with planned maintenance at the Barrick Nevada roaster and the Pueblo Viejo autoclaves, and higher fuel costs. This was partially offset by higher realized gold prices9, lower income tax expense, and lower depreciation as a result of lower sales volumes. While income tax expenses were lower than the prior-year period, our second quarter effective tax rate increased from 46 percent in 2017 to 48 percent in 2018, bringing our 2018 year-to-date effective tax rate to 44 percent.
Significant adjusting items impacting net earnings in the second quarter of 2018 included (pre-tax and non-controlling interest effects):
- $75 million in foreign currency translation losses primarily related to the significant weakening of the Argentinean peso;
- $59 million in net impairment charges primarily related to the Kabanga project (a joint venture between Barrick and Glencore) and Acacia's Nyanzaga project; and
- $43 million in other expense adjustments, including $28 million relating to staffing reductions and office closures associated with the implementation of our decentralized operating model.
During the second quarter of 2018, we implemented a number of organizational reductions to advance the implementation of our decentralized operating model. We completed an extensive review of all positions sitting above operations, reallocating roles where appropriate, eliminating those no longer required and closing a number of smaller offices. We are maintaining our full-year general and administrative expense guidance, as the expected savings from these changes are offset by approximately $30 million of severance expense.
Refer to page 48 for a full list of reconciling items between net earnings and adjusted net earnings for the current and prior-year periods.
The Company recorded negative free cash flow2 of $172 million in the second quarter, driven by lower operating cash flows as described above. This was partially offset by lower capital expenditures compared to the prior-year period.
BALANCE SHEET UPDATE
At the end of the second quarter, the Company had a consolidated cash balance of approximately $2.1 billion10. Subsequent to the end of the quarter, Barrick completed a make-whole repurchase of the outstanding principal of approximately $629 million on the Company's 4.40 percent notes due in 2021. As result, our total debt has been reduced from approximately $6.4 billion to $5.8 billion, further strengthening the Company's balance sheet. Over the past five years, Barrick has reduced its total debt by $10 billion.
Following this repayment, the Company has less than $100 million in debt due before 202011, and more than 85 percent of our outstanding debt matures after 2032.
OPERATING HIGHLIGHTS
Barrick produced 1.07 million ounces of gold in the second quarter of 2018 at a cost of sales3 of $882 per ounce, all-in sustaining costs4 of $856 per ounce, and cash costs4 of $605 per ounce, in line with expectations. Gold production in the second quarter was impacted by lower grade and recovery at the Barrick Nevada oxide mill, and scheduled maintenance shutdowns at the Barrick Nevada roaster and the Pueblo Viejo autoclaves. Both shutdowns were successfully optimized, reflecting the Company's focus on increasing the overall availability of our processing facilities by consolidating work and extending the time between planned maintenance activities.
Second quarter production at the Porgera Joint Venture was impacted by a significant earthquake that occurred in late February, resulting in a change to the mine's full-year guidance. However, full processing capacity has been restored at the mine, earlier than initially anticipated. A rock fall at the Kalgoorlie open pit in mid-May also impacted production in the second quarter, with lower mining rates expected for the remainder of the year.
During the second quarter, the Turquoise Ridge mine implemented a more efficient system for the shipping of ore for processing. Previously, ore was stockpiled on site before being shipped to Newmont's Twin Creeks facility for processing. Ore will now be shipped directly to Twin Creeks, eliminating double handling of the material. This change will eliminate one month of stockpiled material in 2018, resulting in a one-time change in inventory that will increase costs this year.
On a per ounce basis, cost of sales applicable to gold3 was higher than the prior-year period primarily due to the impact of fewer ounces sold. Direct mining costs on a per ounce basis also increased, primarily due to the impact of fewer ounces sold, costs associated with planned maintenance at the Barrick Nevada roaster and the Pueblo Viejo autoclaves, and higher fuel costs. Higher all-in sustaining costs4 compared to the prior-year period primarily reflect the impact of higher direct mining costs on a per ounce basis, as described above.
The Company produced 83 million pounds of copper in the second quarter, at a cost of sales3 of $2.45 per pound, all-in sustaining costs5 of $3.04 per pound, and C1 cash costs5 of $2.10 per pound. Lower copper production in the second quarter was primarily the result of unplanned downtime at the Lumwana crusher, and fewer heap leach tonnes processed at Zaldívar, partially offset by an increase in production at Jabal Sayid.
On a per pound basis, cost of sales applicable to copper3 increased primarily due to higher processing and maintenance costs at Lumwana, and higher unit production costs as a result of lower sales at Zaldívar. Higher all-in sustaining costs primarily reflected higher direct mining costs applicable to copper.
Please see page 35 of Barrick's second quarter MD&A for individual operating segment performance details. Detailed mine site guidance information can be found in Appendix 1 of this press release.
| Gold | Second Quarter 2018 | 2018 Guidance |
| Production12 (000s of ounces) | 1,067 | 4,500 - 5,000 |
| Cost of sales applicable to gold3 ($ per ounce) | 882 | 810 - 850 |
| Cash costs4 ($ per ounce) | 605 | 540 - 575 |
| All-in sustaining costs4 ($ per ounce) | 856 | 765 - 815 |
| Copper | ||
| Production12 (millions of pounds) | 83 | 345 - 410 |
| Cost of sales applicable to copper3 ($ per pound) | 2.45 | 2.00 - 2.30 |
| C1 cash costs5 ($ per pound) | 2.10 | 1.80 - 2.00 |
| All-in sustaining costs5 ($ per pound) | 3.04 | 2.55 - 2.85 |
| Total Attributable Capital Expenditures6 ($ millions) | 332 | 1,400 - 1,600 |
EXPLORATION AND GROWTH
NEVADA, U.S.A.
Fourmile - More high grade drill results confirm new discovery
Based on further positive drill results, Barrick has upgraded the Fourmile exploration project from a target to a discovery. Located approximately two kilometers north of Goldrush in Nevada, drilling continues to intersect high grade results, confirming the continuity of mineralization in the project area, and increasing our confidence that Fourmile and Goldrush form part of a seven-kilometer-long mineralized system. Recent drilling has encountered high grade mineralization across a number of stratigraphic horizons in multiple holes covering an area 600 meters in length by 200 meters in width.
Assay result highlights from the second quarter include 13.9 meters grading 56.8 grams per tonne of gold, 16.6 meters grading 71.6 grams per tonne of gold, and 16.8 meters grading 57.9 grams per tonne of gold. Please see endnote 13 for a significant intercepts table including recent Fourmile drilling.
Based on the success of our 2018 drilling campaign to date, we are allocating an additional $10 million to Fourmile exploration this year, increasing the total number of planned holes from 30 to 47. Further infill and wide spaced step out drilling will continue for the remainder of 2018.
Turquoise Ridge (75 percent Barrick)14 - Shaft sinking contractor mobilizing on site, high grade exploration results extend deposit
Barrick is constructing a third shaft at Turquoise Ridge, which will allow the mine to roughly double annual production to more than 500,000 ounces per year (100 percent basis), at an average cost of sales3 of around $720 per ounce, and average all-in sustaining costs4 of roughly $630 per ounce. Thyssen Mining, the shaft sinking contractor, is now mobilizing on site. Dewatering is advancing according to plan, and construction of surface infrastructure for electrical distribution and other mine utilities is well advanced. The capital cost for this project is estimated to be $300-$325 million (100 percent basis). Initial production from the new shaft is expected to begin in 2022, with sustained production from 2023.
At the end of 2017, Turquoise Ridge had 5.9 million ounces of proven and probable gold reserves15 (Barrick's 75 percent share), at an average grade of 15.5 grams per tonne—the highest reserve grade in the Company's operating portfolio, and among the highest in the gold industry. The mine added 2.1 million ounces of proven and probable gold reserves in 2017 through drilling (Barrick's 75 percent share), and the deposit remains open in multiple directions, including at depth.
Mine exploration drilling at Turquoise Ridge in 2018 has continued to expand the deposit in multiple directions. The North Zone Getchell program is targeting an open area of the Getchell Fault up-dip in the northwest portion of the mine. The first hole of the program intersected 16.5 meters at 15.3 grams per tonne of gold. This intercept extends mineralization along the fault by 120 meters, with further drilling planned along the same structure.
In 2017, exploration drilling discovered mineralization 180 meters northeast of the deposit as part of the Foot Wall Pond Extension program. So far this year, drilling has extended known mineralization to the northeast by another 120 meters, with an intercept of 6.7 meters grading 13.9 grams per tonne gold. Follow-up drilling will also continue in this area.
Goldrush - Decline development commenced
When in full operation, the Goldrush underground project is expected to produce approximately 500,000 ounces of gold per year, at a cost of sales3 of roughly $750 per ounce, and all-in sustaining costs4 of approximately $640 per ounce. Portal pad construction for the twin declines was completed in the first quarter of 2018, and initial decline development commenced in the second quarter. Decline construction is expected to accelerate following the mobilization of the decline development contractor during the third quarter. Exploration twin declines will provide access to the orebody at depth, which will enable further drilling, as well as the conversion of existing resources to reserves. These declines can be converted into production declines in the future. Goldrush currently has proven and probable gold reserves of 1.5 million ounces15, and measured and indicated gold resources of 9.4 million ounces15, with significant potential to identify additional resources once underground access to drill the deposit is established.
Cortez Deep South16 - East decline complete, west decline advancing
The Deep South project is expected to contribute approximately 300,000 ounces of annual gold production when fully ramped up between 2024 and 2028, at a cost of sales3 of $650 per ounce, and all-in sustaining costs4 of $580 per ounce. Deep South will utilize infrastructure which has already been approved under current plans to expand mining in the Lower Zone of the Cortez underground mine, including the new Rangefront twin declines and other underground infrastructure already under construction. During the second quarter, west decline development and mass excavations in support of the project continued to advance. Initial production from Deep South is expected in 2022.
DOMINICAN REPUBLIC
Pueblo Viejo (60 percent Barrick) - Pre-oxidation heap leach and pilot flotation plant civil works underway
Barrick is advancing prefeasibility level studies for a plant expansion at the Pueblo Viejo mine that would increase throughput by 50 percent to 12 million tonnes per year, allowing the mine to maintain average annual gold production of 800,000 ounces after 2022 (100 percent basis). The project involves the addition of a pre-oxidation heap leach pad with a capacity of eight million tonnes per year, a new mill and flotation concentrator with a capacity of four million tonnes per year, and additional tailings capacity. The project has the potential to convert roughly seven million ounces of measured and indicated resources to proven and probable reserves (100 percent basis).15
In support of the prefeasibility study, we have completed the construction of a pilot pre-oxidation heap leach pad to test metallurgy and recoveries, and are now irrigating ore. Civil works for the pilot flotation circuit have also commenced, and a tender process for structural, mechanical, and electrical contracts is now underway.
ENHANCED STRATEGIC COOPERATION AGREEMENT WITH SHANDONG GOLD
Earlier this month, Barrick announced that it had entered into an enhanced strategic cooperation agreement with Shandong Gold Group Co., Ltd., deepening Barrick's partnership with one of China's leading mining companies. Key elements of the enhanced strategic cooperation agreement include:
- Lama Evaluation
Shandong Gold will carry out an independent evaluation of the potential to develop a mining project at Lama in Argentina, including a high-level evaluation of potential synergies between Lama and the nearby Veladero operation. Following the completion of this study, Barrick and Shandong may agree to conduct additional studies and technical work to evaluate a number of development options. Any decision by Shandong to invest in the project would be subject to additional agreement between the Parties.
- Strengthening Collaboration Between Barrick and Shandong Teams
Reflecting a mutual commitment to operational excellence, safety, efficiency, and best-in-class mining practices, Barrick and Shandong have agreed to choose one of Shandong's mines to serve as a platform for learning and collaboration between the two companies. Barrick and Shandong have also agreed to establish additional mechanisms to foster greater communication and knowledge-sharing between respective management and technical teams.
- Strengthening Cooperation on Investment Opportunities
Building on a prior agreement to evaluate joint investment in organic mining projects currently owned by Barrick and Shandong, the two companies have agreed to consider opportunities to work together on acquisition opportunities or potential asset sales, if both agree it is in their collective best interests, and would enhance the value of such an opportunity.
HEMLO ROYALTY ACQUISITION
Barrick has acquired a 2.5 percent gross revenue royalty for $14.9 million on certain surface and mineral lands adjacent to the Hemlo property in Ontario that was originally granted to Newmont Mining Corporation as part of the land acquisition in 2015. The royalty covers approximately 37 percent of Barrick's overall land holding at Hemlo and includes large, highly prospective areas immediately west of the current operation. Drilling up to 800 meters beyond the limits of the existing resource has partly validated that ore grade mineralization is continuous. The area covered by the royalty could represent potentially significant mine life extensions.
TECHNICAL INFORMATION
The scientific and technical information contained in this press release has been reviewed and approved by: Geoffrey Locke, P. Eng., Manager, Metallurgy of Barrick; Rick Sims, Registered Member SME, Vice President, Reserves and Resources of Barrick; and Robert Krcmarov, FAusIMM, Executive Vice President, Exploration and Growth of Barrick—each a "Qualified Person" as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Appendix 1
2018 Operating and Capital Expenditure Guidance
| GOLD PRODUCTION AND COSTS | ||||
| Production (000s ounces) | Cost of sales3 ($ per ounce) | All-in sustaining costs4 ($ per ounce) | Cash costs4 ($ per ounce) | |
| Barrick Nevada | 2,100 - 2,255 | 760 - 810 | 610 - 660 | 470 - 530 |
| Turquoise Ridge (75%) | 240 - 270 | 720 - 770 | 700 - 780 | 630 - 670 |
| Pueblo Viejo (60%) | 585 - 615 | 720 - 750 | 590 - 620 | 425 - 450 |
| Veladero (50%) | 275 - 330 | 970 - 1,110 | 960 - 1,100 | 560 - 620 |
| Lagunas Norte | 230 - 270 | 740 - 870 | 670 - 780 | 420 - 490 |
| Porgera (47.5%) | 190 - 215 | 950 - 1,000 | 950 - 1,000 | 740 - 790 |
| Kalgoorlie (50%) | 280 - 330 | 775 - 825 | 750 - 800 | 715 - 765 |
| Acacia (63.9%) | 275 - 305 | 970 - 1,020 | 935 - 985 | 690 - 720 |
| Hemlo | 200 - 220 | 1,010 - 1,070 | 1,135 - 1,235 | 840 - 890 |
| Golden Sunlight | 35 - 50 | 1,270 - 1,370 | 1,540 - 1,710 | 1,310 - 1,420 |
| Total Gold | 4,500 - 5,00017 | 810 - 850 | 765 - 815 | 540 - 575 |
| COPPER PRODUCTION AND COSTS | ||||
| Production (millions of pounds) | Cost of sales4 ($ per pound) | All-in sustaining costs5 ($ per pound) | C1 cash costs5 ($ per pound) | |
| Zaldívar (50%) | 115 - 130 | 2.30 - 2.50 | 2.15 - 2.35 | ~1.80 |
| Lumwana | 190 - 225 | 1.90 - 2.15 | 2.80 - 3.10 | 1.95 - 2.20 |
| Jabal Sayid (50%) | 40 - 55 | 1.85 - 2.50 | 1.70 - 2.30 | 1.40 - 1.80 |
| Total Copper | 345 - 41017 | 2.00 - 2.30 | 2.55 - 2.85 | 1.80 - 2.00 |
| CAPITAL EXPENDITURES | ||||
| ($ millions) | ||||
| Mine site sustaining | 950 - 1,100 | |||
| Project | 450 - 550 | |||
| Total Attributable Capital Expenditures6 | 1,400 - 1,600 | |||
Appendix 2
2018 Outlook Assumptions and Economic Sensitivity Analysis
| 2018 Guidance Assumption | Hypothetical Change | Impact on Revenue (millions) | Impact on Cost of sales3 (millions) | Impact on All-in sustaining costs4,5 | ||
| Gold revenue, net of royalties | $1,300/oz | +/- $100/oz | +/- $261 | +/- $7 | +/- $3/oz | |
| Copper revenue, net of royalties18 | $2.75/lb | + $0.50/lb | + $105 | + $8 | + $0.04/lb | |
| Copper revenue, net of royalties18 | $2.75/lb | - $0.50/lb | - $105 | - $8 | - $0.04/lb | |
| Gold all-in sustaining costs4 | ||||||
| Oil price19 | WTI: $65/bbl | +/- $10/bbl | n/a | +/- $16 | +/- $6/oz | |
| Brent: $70/bbl | ||||||
| Australian dollar exchange rate | 0.75 : 1 | +/- 10% | n/a | +/- $15 | +/- $6/oz | |
| Argentine peso exchange rate | 21 : 1 | +/- 10% | n/a | +/- $11 | +/- $4/oz | |
| Canadian dollar exchange rate | 1.25 : 1 | +/- 10% | n/a | +/- $19 | +/- $7/oz | |
| Copper all-in sustaining costs5 | ||||||
| Oil price19 | WTI: $65/bbl | +/- $10/bbl | n/a | +/- $3 | +/- $0.08/lb | |
| Brent: $70/bbl | ||||||
| Chilean peso exchange rate | 600 : 1 | +/- 10% | n/a | +/- $6 | +/- $0.03/lb |
Endnotes
Endnote 1
“Adjusted net earnings” and “adjusted net earnings per share” are non-GAAP financial performance measures. Adjusted net earnings excludes the following from net earnings: certain impairment charges (reversals) related to intangibles, goodwill, property, plant and equipment, and investments; gains (losses) and other one-time costs relating to acquisitions or dispositions; foreign currency translation gains (losses); significant tax adjustments not related to current period earnings; unrealized gains (losses) on non-hedge derivative instruments; and the tax effect and non-controlling interest of these items. The Company uses this measure internally to evaluate our underlying operating performance for the reporting periods presented and to assist with the planning and forecasting of future operating results. Barrick believes that adjusted net earnings is a useful measure of our performance because these adjusting items do not reflect the underlying operating performance of our core mining business and are not necessarily indicative of future operating results. Adjusted net earnings and adjusted net earnings per share are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other companies. They should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Further details on these non-GAAP measures are provided in the MD&A accompanying Barrick’s financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Earnings to Net Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings per Share
| ($ millions, except per share amounts in dollars) | For the three months ended June 30 | For the six months ended June 30 | ||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Net earnings attributable to equity holders of the Company | ($94 | ) | $1,084 | $64 | $1,763 | |||
| Impairment charges related to intangibles, goodwill, property, plant and equipment, and investments1 | 59 | (5 | ) | 61 | (1,130 | ) | ||
| Acquisition/disposition (gains)/losses2 | (2 | ) | (880 | ) | (48 | ) | (877 | ) |
| Foreign currency translation losses | 75 | 32 | 90 | 35 | ||||
| Significant tax adjustments3 | 16 | 12 | 62 | 9 | ||||
| Other expense adjustments4 | 43 | 21 | 37 | 27 | ||||
| Unrealized gains on non-hedge derivative instruments | — | — | — | 3 | ||||
| Tax effect and non-controlling interest | (16 | ) | (3 | ) | (15 | ) | 593 | |
| Adjusted net earnings | $81 | $261 | $251 | $423 | ||||
| Net earnings per share5 | (0.08 | ) | 0.93 | 0.05 | 1.51 | |||
| Adjusted net earnings per share5 | 0.07 | 0.22 | 0.22 | 0.36 | ||||
1 Net impairment charges primarily relate to the Kabanga project (a joint venture between Barrick and Glencore) and Acacia's Nyanzaga project in Tanzania for the three and six months ended June 30, 2018, and the Cerro Casale project upon reclassification of the project’s net assets as held-for-sale as at March 31, 2017 for the six months ended June 30, 2017.
2 Disposition gains primarily relate to the gain on the sale of a non-core royalty asset at Acacia for the six months ended June 30, 2018, and the sale of a 50% interest in the Veladero mine and the gain related to the sale of a 25% interest in the Cerro Casale project for the three and six month periods ended June 30, 2017.
3 Significant tax adjustments for the six months ended June 30, 2018 primarily relate to a tax audit of Pueblo Viejo in the Dominican Republic.
4 Other expense adjustments for the three and six months ended June 30, 2018 include $28 million relating to staffing reductions and office closures associated with the implementation of our decentralized operating model; and $13 million related to an insurance payment to our Porgera JV.
5 Calculated using weighted average number of shares outstanding under the basic method of earnings per share.
Endnote 2
“Free cash flow” is a non-GAAP financial performance measure which deducts capital expenditures from net cash provided by operating activities. Barrick believes this to be a useful indicator of our ability to operate without reliance on additional borrowing or usage of existing cash. Free cash flow is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other companies. Free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Further details on these non-GAAP measures are provided in the MD&A accompanying Barrick’s financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
| ($ millions) | For the three months ended June 30 | For the six months ended June 30 | ||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Net cash provided by operating activities | $141 | $448 | $648 | $943 | ||||
| Capital expenditures | (313 | ) | (405 | ) | (639 | ) | (739 | ) |
| Free cash flow | ($172 | ) | $43 | $9 | $204 | |||
Endnote 3
Cost of sales applicable to gold per ounce is calculated using cost of sales applicable to gold on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and 40% South Arturo from cost of sales), divided by attributable gold ounces. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments).
Endnote 4
“Cash costs” per ounce and “All-in sustaining costs” per ounce are non-GAAP financial performance measures. “Cash costs” per ounce starts with cost of sales applicable to gold production, but excludes the impact of depreciation, the non-controlling interest of cost of sales, and includes by-product credits. “All-in sustaining costs” per ounce begin with “Cash costs” per ounce and add further costs which reflect the additional costs of operating a mine, primarily sustaining capital expenditures, general & administrative costs, minesite exploration and evaluation costs, and reclamation cost accretion and amortization. Barrick believes that the use of “cash costs” per ounce and “all-in sustaining costs” per ounce will assist investors, analysts and other stakeholders in understanding the costs associated with producing gold, understanding the economics of gold mining, assessing our operating performance and also our ability to generate free cash flow from current operations and to generate free cash flow on an overall Company basis. “Cash costs” per ounce and “All-in sustaining costs” per ounce are intended to provide additional information only and do not have any standardized meaning under IFRS. Although a standardized definition of all-in sustaining costs was published in 2013 by the World Gold Council (a market development organization for the gold industry comprised of and funded by 24 gold mining companies from around the world, including Barrick), it is not a regulatory organization, and other companies may calculate this measure differently. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Further details on these non-GAAP measures are provided in the MD&A accompanying Barrick’s financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Gold Cost of Sales to Cash costs, All-in sustaining costs and All-in costs, including on a per ounce basis
| ($ millions, except per ounce information in dollars) | For the three months ended June 30 | For the six months ended June 30 | |||||||
| Footnote | 2018 | 2017 | 2018 | 2017 | |||||
| Cost of sales applicable to gold production | $1,058 | $1,159 | $2,104 | $2,397 | |||||
| Depreciation | (290 | ) | (383 | ) | (588 | ) | (768 | ) | |
| By-product credits | (38 | ) | (32 | ) | (74 | ) | (73 | ) | |
| Realized (gains)/losses on hedge and non-hedge derivatives | 1 | — | 10 | — | 10 | ||||
| Non-recurring items | 2 | (3 | ) | — | (10 | ) | — | ||
| Other | 3 | (21 | ) | (27 | ) | (42 | ) | (47 | ) |
| Non-controlling interests (Pueblo Viejo and Acacia) | 4 | (78 | ) | (64 | ) | (150 | ) | (145 | ) |
| Cash costs | $628 | $663 | $1,240 | $1,374 | |||||
| General & administrative costs | 93 | 45 | 141 | 117 | |||||
| Minesite exploration and evaluation costs | 5 | 14 | 16 | 20 | 23 | ||||
| Minesite sustaining capital expenditures | 6 | 235 | 320 | 466 | 582 | ||||
| Rehabilitation - accretion and amortization (operating sites) | 7 | 19 | 20 | 38 | 37 | ||||
| Non-controlling interest, copper operations and other | 8 | (100 | ) | (71 | ) | (155 | ) | (132 | ) |
| All-in sustaining costs | $889 | $993 | $1,750 | $2,001 | |||||
| Project exploration and evaluation and project costs | 5 | 83 | 65 | 150 | 133 | ||||
| Community relations costs not related to current operations | — | 1 | 1 | 2 | |||||
| Project capital expenditures | 6 | 106 | 83 | 206 | 139 | ||||
| Rehabilitation - accretion and amortization (non-operating sites) | 7 | 8 | 9 | 16 | 13 | ||||
| Non-controlling interest and copper operations | 8 | (3 | ) | (1 | ) | (8 | ) | (6 | ) |
| All-in costs | $1,083 | $1,150 | $2,115 | $2,282 | |||||
| Ounces sold - equity basis (000s ounces) | 9 | 1,037 | 1,398 | 2,108 | 2,703 | ||||
| Cost of sales per ounce | 10,11 | $882 | $726 | $865 | $778 | ||||
| Cash costs per ounce | 11 | $605 | $474 | $589 | $508 | ||||
| Cash costs per ounce (on a co-product basis) | 11,12 | $630 | $488 | $613 | $527 | ||||
| All-in sustaining costs per ounce | 11 | $856 | $710 | $830 | $739 | ||||
| All-in sustaining costs per ounce (on a co-product basis) | 11,12 | $881 | $724 | $854 | $758 | ||||
| All-in costs per ounce | 11 | $1,043 | $823 | $1,003 | $844 | ||||
| All-in costs per ounce (on a co-product basis) | 11,12 | $1,068 | $837 | $1,027 | $863 | ||||
- Realized (gains)/losses on hedge and non-hedge derivatives
Includes realized hedge losses of $1 million and $2 million, respectively, for the three and six month periods ended June 30, 2018 (2017: $8 million and $14 million, respectively), and realized non-hedge gains of $1 million and $2 million, respectively, for the three and six month periods ended June 30, 2018 (2017: losses of $2 million and gains of $4 million, respectively). Refer to Note 5 to the Financial Statements for further information.
- Non-recurring items
Non-recurring items in 2018 relate to abnormal costs at Porgera as a result of the February 2018 earthquake in Papua New Guinea. These costs are not indicative of our cost of production and have been excluded from the calculation of cash costs.
- Other
Other adjustments for the three and six month periods ended June 30, 2018 include adding the cost of treatment and refining charges of $1 million and $1 million, respectively, (2017: $(1) million and $1 million, respectively) and the removal of cash costs and by-product credits associated with our Pierina mine, which is mining incidental ounces as it enters closure, of $22 million and $43 million, respectively (2017: $27 million and $48 million, respectively).
- Non-controlling interests (Pueblo Viejo and Acacia)
Non-controlling interests include non-controlling interests related to gold production of $112 million and $218 million, respectively, for the three and six month periods ended June 30, 2018 (2017: $98 million and $214 million, respectively). Refer to Note 5 to the Financial Statements for further information.
- Exploration and evaluation costs
Exploration, evaluation and project expenses are presented as minesite sustaining if it supports current mine operations and project if it relates to future projects. Refer to page 32 of this MD&A.
- Capital expenditures
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and are not related to current production. Significant projects in the current year are stripping at Cortez Crossroads, the Range Front declines, the Goldrush exploration declines, the Deep South Expansion, and construction of the third shaft at Turquoise Ridge. Refer to page 31 of this MD&A.
- Rehabilitation—accretion and amortization
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provision of our gold operations, split between operating and non-operating sites.
- Non-controlling interest and copper operations
Removes general & administrative costs related to non-controlling interests and copper based on a percentage allocation of revenue. Also removes exploration, evaluation and project expenses, rehabilitation costs and capital expenditures incurred by our copper sites and the non-controlling interest of our Acacia and Pueblo Viejo operating segments and South Arturo. Figures remove the impact of Pierina. The impact is summarized as the following:
| ($ millions) | For the three months ended June 30 | For the six months ended June 30 | ||||||
| Non-controlling interest, copper operations and other | 2018 | 2017 | 2018 | 2017 | ||||
| General & administrative costs | ($41 | ) | $1 | ($48 | ) | ($8 | ) | |
| Minesite exploration and evaluation expenses | (1 | ) | (5 | ) | (1 | ) | (7 | ) |
| Rehabilitation - accretion and amortization (operating sites) | (2 | ) | (4 | ) | (3 | ) | (6 | ) |
| Minesite sustaining capital expenditures | (56 | ) | (63 | ) | (103 | ) | (111 | ) |
| All-in sustaining costs total | ($100 | ) | ($71 | ) | ($155 | ) | ($132 | ) |
| Project exploration and evaluation and project costs | (3 | ) | (1 | ) | (6 | ) | (6 | ) |
| Project capital expenditures | — | — | (2 | ) | — | |||
| All-in costs total | ($3 | ) | ($1 | ) | ($8 | ) | ($6 | ) |
- Ounces sold - equity basis
Figures remove the impact of Pierina as the mine is currently going through closure.
- Cost of sales per ounce
Figures remove the cost of sales impact of Pierina of $30 million and $62 million, respectively, for the three and six month periods ended June 30, 2018 (2017: $47 million and $81 million, respectively), as the mine is currently going through closure. Cost of sales per ounce excludes non-controlling interest related to gold production. Cost of sales applicable to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and 40% South Arturo from cost of sales), divided by attributable gold ounces.
- Per ounce figures
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding.
- Co-product costs per ounce
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis removes the impact of by-product credits of our gold production (net of non-controlling interest) calculated as:
| ($ millions) | For the three months ended June 30 | For the six months ended June 30 | ||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| By-product credits | $38 | $32 | $74 | $73 | ||||
| Non-controlling interest | (13 | ) | (9 | ) | (24 | ) | (17 | ) |
| By-product credits (net of non-controlling interest) | $25 | $23 | $50 | $56 | ||||
Endnote 5
“C1 cash costs” per pound and “All-in sustaining costs” per pound are non-GAAP financial performance measures. “C1 cash costs” per pound is based on cost of sales but excludes the impact of depreciation and royalties and includes treatment and refinement charges. “All-in sustaining costs” per pound begins with “C1 cash costs” per pound and adds further costs which reflect the additional costs of operating a mine, primarily sustaining capital expenditures, general & administrative costs and royalties. Barrick believes that the use of “C1 cash costs” per pound and “all-in sustaining costs” per pound will assist investors, analysts, and other stakeholders in understanding the costs associated with producing copper, understanding the economics of copper mining, assessing our operating performance, and also our ability to generate free cash flow from current operations and to generate free cash flow on an overall Company basis. “C1 cash costs” per pound and “All-in sustaining costs” per pound are intended to provide additional information only, do not have any standardized meaning under IFRS, and may not be comparable to similar measures of performance presented by other companies. These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Further details on these non-GAAP measures are provided in the MD&A accompanying Barrick’s financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Copper Cost of Sales to C1 cash costs and All-in sustaining costs, including on a per pound basis
| ($ millions, except per pound information in dollars) | For the three months ended June 30 | For the six months ended June 30 | ||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Cost of sales | $108 | $102 | $204 | $184 | ||||
| Depreciation/amortization | (30 | ) | (19 | ) | (49 | ) | (33 | ) |
| Treatment and refinement charges | 29 | 35 | 60 | 67 | ||||
| Cash cost of sales applicable to equity method investments | 59 | 62 | 122 | 123 | ||||
| Less: royalties and production taxes1 | (9 | ) | (8 | ) | (19 | ) | (15 | ) |
| By-product credits | (1 | ) | (3 | ) | (3 | ) | (3 | ) |
| C1 cash cost of sales | $156 | $169 | $315 | $323 | ||||
| General & administrative costs | 11 | 3 | 16 | 6 | ||||
| Rehabilitation - accretion and amortization | 3 | 3 | 8 | 5 | ||||
| Royalties and production taxes1 | 9 | 8 | 19 | 15 | ||||
| Minesite exploration and evaluation costs | 1 | 1 | 1 | 1 | ||||
| Minesite sustaining capital expenditures | 46 | 50 | 88 | 87 | ||||
| All-in sustaining costs | $226 | $234 | $447 | $437 | ||||
| Pounds sold - consolidated basis (millions pounds) | 74 | 98 | 159 | 191 | ||||
| Cost of sales per pound2,3 | $2.45 | $1.85 | $2.25 | $1.79 | ||||
| C1 cash cost per pound2 | $2.10 | $1.72 | $1.98 | $1.69 | ||||
| All-in sustaining costs per pound2 | $3.04 | $2.38 | $2.81 | $2.29 | ||||
1 For the three and six month periods ended June 30, 2018, royalties and production taxes include royalties of $8 million and $17 million, respectively (2017: $8 million and $15 million, respectively).
2 Cost of sales per pound, C1 cash costs per pound and all-in sustaining costs per pound may not calculate based on amounts presented in this table due to rounding.
3 Cost of sales applicable to copper per pound is calculated using cost of sales including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds (including our proportionate share of copper pounds from our equity method investments).
Endnote 6
These amounts are presented on the same basis as our guidance and include our 60% share of Pueblo Viejo and South Arturo, our 63.9% share of Acacia, our 50% share of Zaldívar and Jabal Sayid and our share of joint operations.
Endnote 7
Includes both minesite sustaining and mine development.
Endnote 8
Project capital expenditures are included in our calculation of all-in costs, but not included in our calculation of all-in sustaining costs.
Endnote 9
These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 48 to 61 of Barrick's second quarter MD&A.
Endnote 10
Includes $121 million of cash, primarily held at Acacia, which may not be readily deployed.
Endnote 11
Amount excludes capital leases and includes Acacia (100% basis).
Endnote 12
Barrick’s share.
Endnote 13
Fourmile Significant Intercepts1
| Core Drill Hole2 | Azimuth | Dip | Interval (m) | Width (m)3 | Au (g/t) |
| Drill Results From Q2 2018 | |||||
| FM18-01D | 288 | -70 | 656.8 - 667 | 10.2 | 9.3 |
| 715.8 - 732.4 | 16.6 | 71.6 | |||
| 758 - 761.2 | 3.2 | 7.43 | |||
| 808.9 - 817.5 | 8.5 | 30.9 | |||
| 841.1 - 844.1 | 3 | 8.93 | |||
| 891.8 - 894.7 | 2.9 | 24.7 | |||
| FM18-02D | 251 | -82 | no significant intercept | ||
| FM18-03D | 220 | -84 | 713.8 - 715.2 | 1.4 | 25 |
| FM18-04D | 254 | -75 | no significant intercept | ||
| FM18-05D | 300 | -81 | 737.3 - 740.4 | 3.1 | 9.22 |
| FM18-06D | 176 | -84 | 706.8 - 712.4 | 5.6 | 17.5 |
| 715 - 720.2 | 5.2 | 12.5 | |||
| 723 - 726 | 3 | 41.1 | |||
| 828 - 832.1 | 4.1 | 92.4 | |||
| FM18-07D | 267 | -83 | 717.5 - 761.2 | 42.7 | 18.1 |
| 851.6 - 868.4 | 16.8 | 57.9 | |||
| FM18-09D | 80 | -61 | 701.4 - 708.6 | 7.6 | 8.68 |
| 721.8 - 723.3 | 1.5 | 5.11 | |||
| 754.7 - 756.2 | 1.5 | 11.4 | |||
| 760.8 - 765.1 | 4.3 | 21.1 | |||
| FM18-16D | 42 | -70 | 701.7 - 707.8 | 6.1 | 30.1 |
| 717.8 - 722.4 | 4.6 | 14.5 | |||
| 743.7 - 746.7 | 3 | 22.4 | |||
| 749.8 - 752.8 | 3 | 39 | |||
| 772 - 776.6 | 4.6 | 20.3 | |||
| 781.1 - 795.7 | 13.9 | 56.8 | |||
| FM18-17D | 10 | -80 | 912.3 - 915.3 | 3 | 18.5 |
| Previously-Reported Drill Results | |||||
| GRC-0427D | NA | -90 | 666.9 - 672.7 | 5.8 | 10.9 |
| 695.3 - 709.6 | 14.3 | 31.8 | |||
| 727.9 - 729.4 | 1.5 | 12.2 | |||
| 921.4 - 927.2 | 5.8 | 49.7 4 | |||
| GRC-0435D | NA | -90 | 702.2 - 707.4 | 5.2 | 14.4 |
| FM16-05D | NA | -90 | 705.6 - 714 | 8.4 | 30.6 |
| 726.0 - 727.5 | 1.5 | 16.6 | |||
| FM16-01D | NA | -90 | no significant intercept | ||
| FM16-04D | NA | -90 | 609.9 - 611.4 | 1.5 | 5.95 |
| 616 - 617.5 | 1.5 | 5.6 | |||
| FM16-10D | 357 | -77 | 695.5 - 697.0 | 1.5 | 5.1 |
| 730.6 - 733.6 | 3 | 5.7 | |||
| FM17-01D | 275 | -87 | 866.9 - 870.5 | 3.7 4 | 6.1 |
| FM17-01DW1 | 300 | -86 | 867.1 - 868.8 | 1.7 | 25 |
| 870.4 - 871.4 | 1 | 55.4 | |||
| FM17-02W1 | 66 | -77 | no significant intercept | ||
| FM17-03D | 70 | -88 | 1178.6 - 1183.5 | 4.9 | 11.5 |
| FM17-04D | 282 | -83 | no significant intercept | ||
| FM17-05D | 278 | -80 | 1132.4 - 1135.9 | 3.5 | 17.6 |
| 1157 - 1157.9 | 0.9 | 6.19 | |||
| 1160.4 - 1162.8 | 2.4 | 5.32 | |||
| 1192.4 - 1193.3 | 0.9 | 14 | |||
| FM17-06AW1 | 96 | -84 | 996.1 - 996.9 | 0.8 | 37 |
| FM17-07D | 90 | -85 | 684.3 - 687.9 | 3.6 | 10.3 |
| FM17-11D | 82 | -82 | 690.4 - 691.9 | 1.5 | 13.2 |
| 696.5 - 728.6 | 32.1 5 | 13.4 5 | |||
| FM17-12D | 350 | -82 | 721.3 - 723.3 | 2 | 28.1 |
| 736.1 - 741 | 4.9 | 21.9 | |||
| FM17-12W1 | 5 | -81 | 736.8 - 741.4 | 4.6 | 19.9 |
| 856.8 - 862.6 | 5.8 | 10.9 | |||
| FM17-13D 7 | 324 | -82 | 652.9 - 659.6 | 6.7 6 | 14 6 |
| 662.2 - 664.6 | 2.4 | 9.8 | |||
| FM17-14D | 49 | -79 | 714.3 - 715.4 | 1.1 | 28.1 |
| 804.6 - 806.0 | 1.4 | 17.1 | |||
| 812.1 - 821.9 | 9.8 | 16.6 | |||
| 870.5 - 873.6 | 3.1 | 9.97 | |||
| FM17-15D | 21 | -82 | 689.9 - 692.5 | 2.6 | 15.7 4 |
| FM17-16D | 92 | -82 | no significant intercept | ||
| FM17-17D | 133 | -81 | 706.8 - 709.2 | 2.4 | 18.2 |
| FM17-18D | 267 | -84 | 719.2 - 721.5 | 2.3 | 9.95 |
| FM18-11D | 6 | -81 | no significant intercept | ||
| FM18-15D | 0 | -78 | 878.1 - 887.2 | 9.1 | 40.8 |
| FM18-21D | 173 | -82 | 712.6 - 714.1 | 1.5 | 13.4 |
1 All intercepts calculated using a 5 g/t Au cutoff and are uncapped; minimum intercept width is 0.8 m; internal dilution is less than 20% total width.
2 Nomenclature for drillholes (e.g., FM18-01D) is described by FM (i.e., Fourmile) followed by the year (e.g., 18 for 2018) or GRC (i.e., Goldrush Core) with no designation of year.
3 True width of intercepts are uncertain at this stage.
4 Intercept revised from previously-reported result to correct rounding.
5 Intercept adjusted from previously-reported result of 33.7m grading 13.3 g/t to reduce dilution.
6 Intercept adjusted from previously-reported result of 7.9m grading 12.4 g/t to reduce dilution.
7 FM17-13D was initially reported as 11.7m (from 652.9 to 664.6m in depth) grading 10.5 g/t, but that depth range has now been reported as two intervals.
The drilling results for the Fourmile property contained in this press release have been prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects. All drill hole assay information has been manually reviewed and approved by staff geologists and re-checked by the project manager. Sample preparation and analyses are conducted by an independent laboratory. Procedures are employed to ensure security of samples during their delivery from the drill rig to the laboratory. The quality assurance procedures, data verification and assay protocols used in connection with drilling and sampling on the Fourmile property conform to industry accepted quality control methods.
Endnote 14
For additional detail regarding Turquoise Ridge, see the Technical Report on the Turquoise Ridge Mine, State of Nevada, U.S.A., dated March 19, 2018, and filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov on March 23, 2018.
Turquoise Ridge Significant Intercepts1
| Core Drill Hole | Azimuth | Dip | Interval (m) | Width (m)2 | Au (g/t) |
| TS1802 | 288 | -50 | 766.3 - 782.4 | 16.5 | 16.9 |
| TS1804 | 295 | -76 | 985.3 - 992.7 | 6.7 | 15.3 |
1 All significant intercepts calculated as being >6 m and >7.7 g/t or >3 m and >15.5 g/t
2 True width of intercepts are uncertain at this stage.
The drilling results for the Turquoise Ridge property contained in this press release have been prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects. All drill hole assay information has been manually reviewed and approved by staff geologists and re-checked by the project manager. Sample preparation and analyses are conducted in an on site laboratory with quality assurance and quality control procedures performed by an independent laboratory. Procedures are employed to ensure security of samples during their delivery from the drill rig to the laboratory. The quality assurance procedures, data verification and assay protocols used in connection with drilling and sampling on the Turquoise Ridge property conform to industry accepted quality control methods.
Endnote 15
Estimated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. Estimates are as of December 31, 2017, unless otherwise noted. Goldrush probable reserves of 5.7 million tonnes grading 8.12 g/t, representing 1.5 million ounces of gold. Goldrush measured resources of 140,000 tonnes grading 10.44 g/t, representing 47,000 ounces of gold, and indicated resources 31.4 million tonnes grading 9.27 g/t, representing 9.4 million ounces of gold. Pueblo Viejo proven reserves of 62.1 million tonnes grading 2.67 g/t, representing 5.3 million ounces of gold, and probable reserves of 19.2 million tonnes grading 3.06 g/t, representing 1.9 million ounces of gold. Pueblo Viejo measured resources of 7.8 million tonnes grading 2.39 g/t, representing 598,000 ounces of gold, and indicated resources of 93.9 million tonnes grading 2.47 g/t, representing 7.5 million ounces of gold. Turquoise Ridge proven reserves of 7.1 million tonnes grading 15.56 g/t, representing 3.5 million ounces of gold, and probable reserves of 4.7 million tonnes grading 15.48 g/t, representing 2.3 million ounces of gold. Turquoise Ridge measured resources of 2.9 million tonnes grading 9.03 g/t, representing 855,000 ounces of gold, and indicated resources of 2.2 million tonnes grading 9.37 g/t, representing 651,000 ounces of gold. Complete mineral reserve and mineral resource data for all mines and projects referenced in this press release, including tonnes, grades, and ounces, can be found on pages 29-39 of Barrick’s Annual Information Form for the year ended December 31, 2017.
Endnote 16
For additional detail regarding Cortez, see the Technical Report on the Cortez Joint Venture Operations, Lander and Eureka Counties, State of Nevada, U.S.A., dated March 21, 2016, and filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov on March 28, 2016.
Endnote 17
Operating unit guidance ranges for production reflect expectations at each individual operating unit, but do not necessarily add up to the corporate-wide guidance range total.
Endnote 18
As at June 30, 2018, utilizing option collar strategies, we have protected the downside on approximately 44 million pounds of expected copper production for the second half of 2018 at an average floor price of $3.00 per pound and can participate in the upside on the same amount up to an average of $3.40 per pound. Our remaining copper production is subject to market prices.
Endnote 19
Due to our hedging activities, which are reflected in these sensitivities, we are partially protected against changes in these factors.
Key Statistics
| Barrick Gold Corporation | |||||||||
| (in United States dollars) | Three months ended June 30, | Six months ended June 30, | |||||||
| 2018 | 2017 | 2018 | 2017 | ||||||
| Financial Results (millions) | |||||||||
| Revenues | $ | 1,712 | $ | 2,160 | $ | 3,502 | $ | 4,153 | |
| Cost of sales | 1,176 | 1,277 | 2,328 | 2,619 | |||||
| Net (loss) earnings1 | (94 | ) | 1,084 | 64 | 1,763 | ||||
| Adjusted net earnings2 | 81 | 261 | 251 | 423 | |||||
| Adjusted EBITDA2 | 657 | 1,114 | 1,453 | 2,033 | |||||
| Total capital expenditures - sustaining3 | 235 | 320 | 466 | 582 | |||||
| Total project capital expenditures3 | 106 | 83 | 206 | 139 | |||||
| Net cash provided by operating activities | 141 | 448 | 648 | 943 | |||||
| Free cash flow2 | (172 | ) | 43 | 9 | 204 | ||||
| Per share data (dollars) | |||||||||
| Net (loss) earnings (basic and diluted) | (0.08 | ) | 0.93 | 0.05 | 1.51 | ||||
| Adjusted net earnings (basic)2 | $ | 0.07 | $ | 0.22 | $ | 0.22 | $ | 0.36 | |
| Weighted average diluted common shares (millions) | 1,167 | 1,166 | 1,167 | 1,166 | |||||
| Operating Results | |||||||||
| Gold production (thousands of ounces)4 | 1,067 | 1,432 | 2,116 | 2,741 | |||||
| Gold sold (thousands of ounces)4 | 1,037 | 1,398 | 2,108 | 2,703 | |||||
| Per ounce data | |||||||||
| Average spot gold price | $ | 1,306 | $ | 1,257 | $ | 1,318 | $ | 1,238 | |
| Average realized gold price2,4 | 1,313 | 1,258 | 1,323 | 1,239 | |||||
| Cost of sales (Barrick’s share)4,5 | 882 | 726 | 865 | 778 | |||||
| All-in sustaining costs2,4 | 856 | 710 | 830 | 739 | |||||
| Cash costs2,4 | $ | 605 | $ | 474 | $ | 589 | $ | 508 | |
| Copper production (millions of pounds)6 | 83 | 104 | 168 | 199 | |||||
| Copper sold (millions of pounds)6 | 74 | 98 | 159 | 191 | |||||
| Per pound data | |||||||||
| Average spot copper price | $ | 3.12 | $ | 2.57 | $ | 3.14 | $ | 2.61 | |
| Average realized copper price2,6 | 3.11 | 2.60 | 3.04 | 2.68 | |||||
| Cost of sales (Barrick’s share)6,7 | 2.45 | 1.85 | 2.25 | 1.79 | |||||
| C1 cash costs2,6 | 2.10 | 1.72 | 1.98 | 1.69 | |||||
| All-in sustaining costs2,6 | $ | 3.04 | $ | 2.38 | $ | 2.81 | $ | 2.29 | |
| As at June 30, | As at December 31, | ||||||||
| 2018 | 2017 | ||||||||
| Financial Position (millions) | |||||||||
| Cash and equivalents | $ | 2,085 | $ | 2,234 | |||||
| Working capital (excluding cash) | $ | 1,315 | $ | 1,184 | |||||
1 Net (loss) earnings represents net (loss) earnings attributable to the equity holders of the Company.
2 Adjusted net earnings, adjusted EBITDA, free cash flow, adjusted net earnings per share, realized gold price, all-in sustaining costs, cash costs, C1 cash costs and realized copper price are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure to the most directly comparable IFRS measure, please see pages 48 to 61 of this MD&A.
3 Amounts presented on a consolidated accrued basis. Project capital expenditures are included in our calculation of all-in costs, but not included in our calculation of all-in sustaining costs.
4 Includes Acacia on a 63.9% basis, Pueblo Viejo on a 60% basis, South Arturo on a 60% basis, and Veladero on a 50% basis from July 1, 2017 onwards, which reflects our equity share of production and sales.
5 Cost of sales per ounce (Barrick’s share) is calculated as cost of sales - gold on an attributable basis excluding Pierina divided by gold ounces sold.
6 Amounts reflect production and sales from Jabal Sayid and Zaldívar on a 50% basis, which reflects our equity share of production, and Lumwana.
7 Cost of sales per pound (Barrick’s share) is calculated as cost of sales - copper plus our equity share of cost of sales attributable to Zaldívar and Jabal Sayid divided by copper pounds sold.
Production and Cost Summary
| Production | ||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Gold (equity ounces (000s)) | ||||||||
| Barrick Nevada1 | 464 | 741 | 935 | 1,262 | ||||
| Turquoise Ridge | 69 | 24 | 115 | 79 | ||||
| Pueblo Viejo2 | 123 | 171 | 264 | 314 | ||||
| Veladero3 | 78 | 72 | 152 | 223 | ||||
| Lagunas Norte | 65 | 90 | 131 | 178 | ||||
| Acacia4 | 86 | 134 | 163 | 274 | ||||
| Other Mines - Gold5 | 182 | 200 | 356 | 411 | ||||
| Total | 1,067 | 1,432 | 2,116 | 2,741 | ||||
| Copper (equity pounds (millions))6 | 83 | 104 | 168 | 199 | ||||
| Cost of Sales per unit (Barrick’s share) | ||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Gold Cost of Sales per ounce ($/oz)7 | ||||||||
| Barrick Nevada | $ | 850 | $ | 723 | $ | 847 | $ | 804 |
| Turquoise Ridge | 802 | 853 | 759 | 728 | ||||
| Pueblo Viejo | 852 | 586 | 761 | 635 | ||||
| Veladero | 984 | 628 | 1,008 | 770 | ||||
| Lagunas Norte | 657 | 615 | 599 | 595 | ||||
| Acacia | 877 | 756 | 907 | 792 | ||||
| Total | $ | 882 | $ | 726 | $ | 865 | $ | 778 |
| Copper Cost of Sales per pound ($/lb)8 | $ | 2.45 | $ | 1.85 | $ | 2.25 | $ | 1.79 |
| All-in sustaining costs9 | ||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||
| 2018 | 2017 | 2018 | 2017 | |||||
| Gold All-in Sustaining Costs ($/oz) | ||||||||
| Barrick Nevada1 | $ | 719 | $ | 541 | $ | 704 | $ | 605 |
| Turquoise Ridge | 757 | 965 | 733 | 784 | ||||
| Pueblo Viejo2 | 690 | 475 | 625 | 505 | ||||
| Veladero3 | 946 | 1,315 | 976 | 1,038 | ||||
| Lagunas Norte | 662 | 472 | 578 | 451 | ||||
| Acacia4 | 918 | 835 | 945 | 893 | ||||
| Total | $ | 856 | $ | 710 | $ | 830 | $ | 739 |
| Copper All-in Sustaining Costs ($/lb)6 | $ | 3.04 | $ | 2.38 | $ | 2.81 | $ | 2.29 |
1 Reflects production and sales from Goldstrike, Cortez, and South Arturo on a 60% basis, which reflects our equity share.
2 Reflects production and sales from Pueblo Viejo on a 60% basis, which reflects our equity share.
3 Reflects production and sales from Veladero on a 50% basis from July 1, 2017 onwards, which reflects our equity share.
4 Reflects production and sales from Acacia on a 63.9% basis, which reflects our equity share.
5 Other Mines - Gold includes Golden Sunlight, Hemlo, Porgera on a 47.5% basis and Kalgoorlie on a 50% basis.
6 Reflects production and sales from Lumwana, and Jabal Sayid and Zaldívar on a 50% basis, which reflects our equity share.
7 Cost of sales per ounce (Barrick’s share) is calculated as cost of sales - gold on an attributable basis excluding Pierina divided by gold equity ounces sold.
8 Cost of sales per pound (Barrick’s share) is calculated as cost of sales - copper plus our equity share of cost of sales attributable to Zaldívar and Jabal Sayid divided by copper pounds sold.
9 All-in sustaining costs is a non-GAAP financial performance measure with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of this non-GAAP measure to the most directly comparable IFRS measure, please see pages 48 to 61 of our second quarter MD&A.
Consolidated Statements of Income
| Barrick Gold Corporation (in millions of United States dollars, except per share data) (Unaudited) | Three months ended June 30, | Six months ended June 30, | ||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Revenue (notes 5 and 6) | $ | 1,712 | $ | 2,160 | $ | 3,502 | $ | 4,153 | ||||
| Costs and expenses (income) | ||||||||||||
| Cost of sales (notes 5 and 7) | 1,176 | 1,277 | 2,328 | 2,619 | ||||||||
| General and administrative expenses | 93 | 45 | 141 | 117 | ||||||||
| Exploration, evaluation and project expenses | 97 | 81 | 170 | 156 | ||||||||
| Impairment (reversals) charges (notes 9B and 13) | 59 | (5 | ) | 61 | (1,130 | ) | ||||||
| Loss on currency translation (note 9C) | 75 | 32 | 90 | 35 | ||||||||
| Closed mine rehabilitation | 9 | (3 | ) | — | 5 | |||||||
| Income from equity investees (note 12) | (10 | ) | (14 | ) | (26 | ) | (25 | ) | ||||
| (Gain) loss on non-hedge derivatives | (1 | ) | 2 | (3 | ) | (2 | ) | |||||
| Other expense (income) (note 9A) | 38 | (839 | ) | 39 | (837 | ) | ||||||
| Income before finance costs and income taxes | $ | 176 | $ | 1,584 | $ | 702 | $ | 3,215 | ||||
| Finance costs, net | (136 | ) | (173 | ) | (269 | ) | (323 | ) | ||||
| Income before income taxes | $ | 40 | $ | 1,411 | $ | 433 | $ | 2,892 | ||||
| Income tax expense (note 10) | (116 | ) | (274 | ) | (317 | ) | (866 | ) | ||||
| Net (loss) income | $ | (76 | ) | $ | 1,137 | $ | 116 | $ | 2,026 | |||
| Attributable to: | ||||||||||||
| Equity holders of Barrick Gold Corporation | $ | (94 | ) | $ | 1,084 | $ | 64 | $ | 1,763 | |||
| Non-controlling interests | $ | 18 | $ | 53 | $ | 52 | $ | 263 | ||||
| Earnings (loss) per share data attributable to the equity holders of Barrick Gold Corporation (note 8) | ||||||||||||
| Net (loss) income | ||||||||||||
| Basic | $ | (0.08 | ) | $ | 0.93 | $ | 0.05 | $ | 1.51 | |||
| Diluted | $ | (0.08 | ) | $ | 0.93 | $ | 0.05 | $ | 1.51 | |||
The notes to these unaudited condensed interim financial statements, which are contained in the Second Quarter Report 2018 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income
| Barrick Gold Corporation (in millions of United States dollars) (Unaudited) | Three months ended June 30, | Six months ended June 30, | ||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Net (loss) income | $ | (76 | ) | $ | 1,137 | $ | 116 | $ | 2,026 | |||
| Other comprehensive (loss) income, net of taxes | ||||||||||||
| Movement in equity investments fair value reserve: | ||||||||||||
| Net unrealized change on equity investments, net of tax $nil, $nil, $nil and $nil | (4 | ) | 3 | (8 | ) | 4 | ||||||
| Items that may be reclassified subsequently to profit or loss: | ||||||||||||
| Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax ($3), $3, ($6) and $3 | 4 | (8 | ) | 10 | (20 | ) | ||||||
| Realized losses on derivatives designated as cash flow hedges, net of tax $nil, ($2), $nil and ($2) | — | 7 | — | 8 | ||||||||
| Actuarial gain (loss) on post employment benefit obligations, net of tax $nil, $nil, $nil and $nil | 1 | — | 1 | — | ||||||||
| Currency translation adjustments, net of tax $nil, $nil, $nil and $nil | 2 | 4 | 2 | 15 | ||||||||
| Total other comprehensive income | 3 | 6 | 5 | 7 | ||||||||
| Total comprehensive (loss) income | $ | (73 | ) | $ | 1,143 | $ | 121 | $ | 2,033 | |||
| Attributable to: | ||||||||||||
| Equity holders of Barrick Gold Corporation | $ | (91 | ) | $ | 1,090 | $ | 69 | $ | 1,770 | |||
| Non-controlling interests | $ | 18 | $ | 53 | $ | 52 | $ | 263 | ||||
The notes to these unaudited condensed interim financial statements, which are contained in the Second Quarter Report 2018 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flow
| Barrick Gold Corporation (in millions of United States dollars) (Unaudited) | Three months ended June 30, | Six months ended June 30, | ||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| OPERATING ACTIVITIES | ||||||||||||
| Net (loss) income | $ | (76 | ) | $ | 1,137 | $ | 116 | $ | 2,026 | |||
| Adjustments for the following items: | ||||||||||||
| Depreciation | 328 | 409 | 653 | 823 | ||||||||
| Finance costs | 139 | 178 | 277 | 331 | ||||||||
| Impairment (reversals) charges (note 13) | 59 | (5 | ) | 61 | (1,130 | ) | ||||||
| Income tax expense (note 10) | 116 | 274 | 317 | 866 | ||||||||
| Gains on sale of non-current assets/investments | (2 | ) | (880 | ) | (48 | ) | (877 | ) | ||||
| Currency translation losses | 75 | 32 | 90 | 35 | ||||||||
| Change in working capital (note 11) | (194 | ) | (182 | ) | (370 | ) | (378 | ) | ||||
| Other operating activities (note 11) | 57 | (21 | ) | (7 | ) | (105 | ) | |||||
| Operating cash flows before interest and income taxes | 502 | 942 | 1,089 | 1,591 | ||||||||
| Interest paid | (155 | ) | (188 | ) | (183 | ) | (223 | ) | ||||
| Income taxes paid | (206 | ) | (306 | ) | (258 | ) | (425 | ) | ||||
| Net cash provided by operating activities | 141 | 448 | 648 | 943 | ||||||||
| INVESTING ACTIVITIES | ||||||||||||
| Property, plant and equipment | ||||||||||||
| Capital expenditures (note 5) | (313 | ) | (405 | ) | (639 | ) | (739 | ) | ||||
| Sales proceeds | 5 | 5 | 7 | 12 | ||||||||
| Investment purchases | (38 | ) | — | (39 | ) | — | ||||||
| Divestitures (note 4) | — | 960 | — | 960 | ||||||||
| Sale of mineral royalty | — | — | 45 | — | ||||||||
| Funding of equity method investments | (1 | ) | (4 | ) | (5 | ) | (8 | ) | ||||
| Net cash provided by (used in) investing activities | (347 | ) | 556 | (631 | ) | 225 | ||||||
| FINANCING ACTIVITIES | ||||||||||||
| Debt | ||||||||||||
| Repayments | (8 | ) | (305 | ) | (31 | ) | (485 | ) | ||||
| Dividends | (32 | ) | (32 | ) | (63 | ) | (63 | ) | ||||
| Funding from non-controlling interests | 4 | 8 | 12 | 8 | ||||||||
| Disbursements to non-controlling interests | (56 | ) | — | (82 | ) | (67 | ) | |||||
| Debt extinguishment costs | — | (26 | ) | — | (26 | ) | ||||||
| Net cash used in financing activities | (92 | ) | (355 | ) | (164 | ) | (633 | ) | ||||
| Effect of exchange rate changes on cash and equivalents | (1 | ) | — | (2 | ) | 2 | ||||||
| Net increase (decrease) in cash and equivalents | (299 | ) | 649 | (149 | ) | 537 | ||||||
| Cash and equivalents at the beginning of period | 2,384 | 2,277 | 2,234 | 2,389 | ||||||||
| Cash and equivalents at the end of period | $ | 2,085 | $ | 2,926 | $ | 2,085 | $ | 2,926 | ||||
The notes to these unaudited condensed interim financial statements, which are contained in the Second Quarter Report 2018 available on our website are an integral part of these consolidated financial statements.
Consolidated Balance Sheets
| Barrick Gold Corporation | ||||||
| (in millions of United States dollars) (Unaudited) | As at June 30, | As at December 31, | ||||
| 2018 | 2017 | |||||
| ASSETS | ||||||
| Current assets | ||||||
| Cash and equivalents (note 14A) | $ | 2,085 | $ | 2,234 | ||
| Accounts receivable | 194 | 239 | ||||
| Inventories | 1,940 | 1,890 | ||||
| Other current assets | 356 | 321 | ||||
| Total current assets | $ | 4,575 | $ | 4,684 | ||
| Non-current assets | ||||||
| Equity in investees (note 12) | 1,214 | 1,213 | ||||
| Property, plant and equipment | 13,727 | 13,806 | ||||
| Goodwill | 1,330 | 1,330 | ||||
| Intangible assets | 230 | 255 | ||||
| Deferred income tax assets | 1,072 | 1,069 | ||||
| Non-current portion of inventory | 1,781 | 1,681 | ||||
| Other assets | 1,193 | 1,270 | ||||
| Total assets | $ | 25,122 | $ | 25,308 | ||
| LIABILITIES AND EQUITY | ||||||
| Current liabilities | ||||||
| Accounts payable | $ | 944 | $ | 1,059 | ||
| Debt (note 14B) | 680 | 59 | ||||
| Current income tax liabilities | 270 | 298 | ||||
| Other current liabilities | 266 | 331 | ||||
| Total current liabilities | $ | 2,160 | $ | 1,747 | ||
| Non-current liabilities | ||||||
| Debt (note 14B) | 5,712 | 6,364 | ||||
| Provisions | 3,108 | 3,141 | ||||
| Deferred income tax liabilities | 1,341 | 1,245 | ||||
| Other liabilities | 1,695 | 1,744 | ||||
| Total liabilities | $ | 14,016 | $ | 14,241 | ||
| Equity | ||||||
| Capital stock (note 16) | $ | 20,900 | $ | 20,893 | ||
| Deficit | (11,701 | ) | (11,759 | ) | ||
| Accumulated other comprehensive loss | (164 | ) | (169 | ) | ||
| Other | 321 | 321 | ||||
| Total equity attributable to Barrick Gold Corporation shareholders | $ | 9,356 | $ | 9,286 | ||
| Non-controlling interests | 1,750 | 1,781 | ||||
| Total equity | $ | 11,106 | $ | 11,067 | ||
| Contingencies and commitments (notes 5 and 17) | ||||||
| Total liabilities and equity | $ | 25,122 | $ | 25,308 | ||
The notes to these unaudited condensed interim financial statements, which are contained in the Second Quarter Report 2018 available on our website are an integral part of these consolidated financial statements.
Consolidated Statements of Changes in Equity
| Barrick Gold Corporation | Attributable to equity holders of the company | ||||||||||||||||||||||
| (in millions of United States dollars) (Unaudited) | Common Shares (in thousands) | Capital stock | Retained deficit | Accumulated other comprehensive income (loss)1 | Other2 | Total equity attributable to shareholders | Non- controlling interests | Total equity | |||||||||||||||
| At December 31, 2017 | 1,166,577 | $ | 20,893 | $ | (11,759 | ) | $ | (169 | ) | $ | 321 | $ | 9,286 | $ | 1,781 | $ | 11,067 | ||||||
| Impact of adopting IFRS 15 on January 1, 2018 (note 2B) | — | — | 64 | — | — | 64 | — | 64 | |||||||||||||||
| At January 1, 2018 (restated) | 1,166,577 | $ | 20,893 | $ | (11,695 | ) | $ | (169 | ) | $ | 321 | $ | 9,350 | $ | 1,781 | $ | 11,131 | ||||||
| Net income | — | — | 64 | — | — | 64 | 52 | 116 | |||||||||||||||
| Total other comprehensive income | — | — | — | 5 | — | 5 | — | 5 | |||||||||||||||
| Total comprehensive income | — | — | 64 | 5 | — | 69 | 52 | 121 | |||||||||||||||
| Transactions with owners | |||||||||||||||||||||||
| Dividends | — | — | (63 | ) | — | — | (63 | ) | — | (63 | ) | ||||||||||||
| Issued on exercise of stock options | 11 | — | — | — | — | — | — | — | |||||||||||||||
| Funding from non-controlling interests | — | — | — | — | — | — | 12 | 12 | |||||||||||||||
| Other decrease in non-controlling interest | — | — | — | — | — | — | (95 | ) | (95 | ) | |||||||||||||
| Dividend reinvestment plan (note 16) | 571 | 7 | (7 | ) | — | — | — | — | — | ||||||||||||||
| Total transactions with owners | 582 | 7 | (70 | ) | — | — | (63 | ) | (83 | ) | (146 | ) | |||||||||||
| At June 30, 2018 | 1,167,159 | $ | 20,900 | $ | (11,701 | ) | $ | (164 | ) | $ | 321 | $ | 9,356 | $ | 1,750 | $ | 11,106 | ||||||
| At January 1, 2017 | 1,165,574 | $ | 20,877 | $ | (13,074 | ) | $ | (189 | ) | $ | 321 | $ | 7,935 | $ | 2,378 | $ | 10,313 | ||||||
| Net income | — | — | 1,763 | — | — | 1,763 | 263 | 2,026 | |||||||||||||||
| Total other comprehensive income | — | — | — | 7 | — | 7 | — | 7 | |||||||||||||||
| Total comprehensive income | — | — | 1,763 | 7 | — | 1,770 | 263 | 2,033 | |||||||||||||||
| Transactions with owners | |||||||||||||||||||||||
| Dividends | — | — | (63 | ) | — | — | (63 | ) | — | (63 | ) | ||||||||||||
| Decrease in non-controlling interest (note 4C) | — | — | — | — | — | — | (493 | ) | (493 | ) | |||||||||||||
| Funding from non-controlling interests | — | — | — | — | — | — | 8 | 8 | |||||||||||||||
| Other decrease in non-controlling interests | — | — | — | — | — | — | (113 | ) | (113 | ) | |||||||||||||
| Dividend reinvestment plan | 429 | 8 | (8 | ) | — | — | — | — | — | ||||||||||||||
| Total transactions with owners | 429 | 8 | (71 | ) | — | — | (63 | ) | (598 | ) | (661 | ) | |||||||||||
| At June 30, 2017 | 1,166,003 | $ | 20,885 | $ | (11,382 | ) | $ | (182 | ) | $ | 321 | $ | 9,642 | $ | 2,043 | $ | 11,685 | ||||||
1 Includes cumulative translation losses at June 30, 2018: $72 million (June 30, 2017: $67 million).
2 Includes additional paid-in capital as at June 30, 2018: $283 million (December 31, 2017: $283 million; June 30, 2017: $283 million) and convertible borrowings - equity component as at June 30, 2018: $38 million (December 31, 2017: $38 million; June 30, 2017: $38 million).
The notes to these unaudited condensed interim financial statements, which are contained in the Second Quarter Report 2018 available on our website are an integral part of these consolidated financial statements.
HEAD OFFICE
Barrick Gold Corporation
Brookfield Place
TD Canada Trust Tower
161 Bay Street, Suite 3700
Toronto, Ontario M5J 2S1
Telephone: +1 416 861-9911
Toll-free: 1-800-720-7415
Fax: +1 416 861-2492
Email: investor@barrick.com
Website: www.barrick.com
SHARES LISTED
ABX
The New York Stock Exchange
The Toronto Stock Exchange
TRANSFER AGENTS AND REGISTRARS
AST Trust Company (Canada)
P.O. Box 700, Postal Station B
Montreal, Quebec H3B 3K3
or
American Stock Transfer & Trust Company, LLC
6201 – 15 Avenue
Brooklyn, New York 11219
Telephone: 1-800-387-0825
Fax: 1-888-249-6189
Email: inquiries@astfinancial.com
Website: www.astfinancial.com
INVESTOR CONTACT
Deni Nicoski
Senior Vice President
Investor Relations
Telephone: +1 416 307-7474
Email: dnicoski@barrick.com
MEDIA CONTACT
Andy Lloyd
Senior Vice President
Communications
Telephone: +1 416 307-7414
Email: alloyd@barrick.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained or incorporated by reference in this press release, including any information as to our strategy, projects, plans, or future financial or operating performance, constitutes "forward-looking statements". All statements, other than statements of historical fact, are forward-looking statements. The words "believe", "expect", "anticipate", "plan", "assume", "intend", "project", "pursue", "goal", "continue", "budget", "estimate", "potential", "may", "will", "can", "should", "could", "would" and similar expressions identify forward-looking statements. In particular, this press release contains forward-looking statements including, without limitation, with respect to: (i) Barrick’s forward-looking production guidance; (ii) estimates of future cost of sales per ounce for gold and per pound for copper, all-in-sustaining costs per ounce/pound, cash costs per ounce, and C1 cash costs per pound; (iii) projected capital, operating, and exploration expenditures; (iv) completion and outcome of current and future studies at Lama; (v) the existence of future opportunities for Barrick and Shandong Gold to collaborate; (vi) targeted cost reductions; (vii) mine life and production rates; (viii) potential mineralization, including with respect to Fourmile, Goldrush and Turquoise Ridge, and metal or mineral recoveries; (ix) anticipated gold production from the Deep South Project and the third shaft project at Turquoise Ridge; (x) the potential for plant expansion at Pueblo Viejo to increase throughput by 50% and convert resources to reserves; (xi) our pipeline of high confidence projects at or near existing operations; (xii) the potential to identify new reserves and resources, and our ability to convert resources into reserves; (xiii) asset sales, joint ventures, and partnerships; and (xiv) expectations regarding future price assumptions, financial performance, and other outlook or guidance.
Forward-looking statements are necessarily based upon a number of estimates and assumptions including material estimates and assumptions related to the factors set forth below that, while considered reasonable by the Company as at the date of this press release in light of management’s experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements, and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: fluctuations in the spot and forward price of gold, copper, or certain other commodities (such as silver, diesel fuel, natural gas, and electricity); the speculative nature of mineral exploration and development; changes in mineral production performance, exploitation, and exploration successes; risks associated with the fact that certain Best-in-Class initiatives are still in the early stages of evaluation, and additional engineering and other analysis is required to fully assess their impact; risks associated with the ongoing implementation of Barrick’s digital transformation initiative, and the ability of the projects under this initiative to meet the Company’s capital allocation objectives; the duration of the Tanzanian ban on mineral concentrate exports; the ultimate terms of any definitive agreement between Acacia and the Government of Tanzania to resolve a dispute relating to the imposition of the concentrate export ban and allegations by the Government of Tanzania that Acacia under-declared the metal content of concentrate exports from Tanzania; the status of certain tax re-assessments by the Tanzanian government; the manner in which amendments to the 2010 Mining Act (Tanzania) increasing the royalty rate applicable to metallic minerals such as gold, copper and silver to 6% (from 4%), the new Finance Act (Tanzania) imposing a 1% clearing fee on the value of all minerals exported from Tanzania from July 1, 2017 and the new Mining Regulations announced by Government of Tanzania in January 2018 will be implemented and the impact of these and other legislative changes on Acacia; whether Barrick will successfully negotiate an agreement with respect to the dispute between Acacia and the Government of Tanzania and whether Acacia will approve the terms of any such final agreement; the benefits expected from recent transactions being realized; diminishing quantities or grades of reserves; increased costs, delays, suspensions and technical challenges associated with the construction of capital projects; operating or technical difficulties in connection with mining or development activities, including geotechnical challenges and disruptions in the maintenance or provision of required infrastructure and information technology systems; failure to comply with environmental and health and safety laws and regulations; timing of receipt of, or failure to comply with, necessary permits and approvals; uncertainty whether some or all of the Best-in-Class initiatives, targeted investments and projects will meet the Company’s capital allocation objectives and internal hurdle rate; the impact of global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future cash flows; adverse changes in our credit ratings; the impact of inflation; fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from holding derivative instruments; changes in national and local government legislation, taxation, controls or regulations and/ or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in Canada, the United States, and other jurisdictions in which the Company or its affiliates do or may carry on business in the future; lack of certainty with respect to foreign legal systems, corruption and other factors that are inconsistent with the rule of law; damage to the Company’s reputation due to the actual or perceived occurrence of any number of events, including negative publicity with respect to the Company’s handling of environmental matters or dealings with community groups, whether true or not; the possibility that future exploration results will not be consistent with the Company’s expectations; risks that exploration data may be incomplete and considerable additional work may be required to complete further evaluation, including but not limited to drilling, engineering and socioeconomic studies and investment; risk of loss due to acts of war, terrorism, sabotage and civil disturbances; litigation and legal and administrative proceedings; contests over title to properties, particularly title to undeveloped properties, or over access to water, power and other required infrastructure; business opportunities that may be presented to, or pursued by, the Company; risks associated with the fact that certain of the initiatives described in this press release are still in the early stages and may not materialize; our ability to successfully integrate acquisitions or complete divestitures; risks associated with working with partners in jointly controlled assets; employee relations including loss of key employees; increased costs and physical risks, including extreme weather events and resource shortages, related to climate change; availability and increased costs associated with mining inputs and labor; and the organization of our previously held African gold operations and properties under a separate listed Company. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate losses (and the risk of inadequate insurance, or inability to obtain insurance, to cover these risks).
Many of these uncertainties and contingencies can affect our actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, us. Readers are cautioned that forward-looking statements are not guarantees of future performance. All of the forward-looking statements made in this press release are qualified by these cautionary statements. Specific reference is made to the most recent Form 40- F/Annual Information Form on file with the SEC and Canadian provincial securities regulatory authorities for a more detailed discussion of some of the factors underlying forward-looking statements and the risks that may affect Barrick’s ability to achieve the expectations set forth in the forward-looking statements contained in this press release.
The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.