Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (“Barrick” or the
“Company”) today announced preliminary full year and fourth quarter
results which indicate that it has met its full-year guidance
targets with preliminary gold production of 5.5 million ounces, at
the upper end of the 5.1 to 5.6 million ounce range and preliminary
copper production of 432 million pounds, exceeding the top-end of
guidance of 375 to 430 million pounds. A strong fourth quarter
capped off an excellent first year since the merger with Randgold
at the beginning of 2019.
The preliminary fourth quarter results show
fourth quarter sales of 1.413 million ounces of gold and 91 million
pounds of copper, as well as fourth quarter production of 1.439
million ounces of gold and 117 million pounds of copper. The
average market price for gold in the fourth quarter was $1,481 per
ounce, while the average market price for copper in the fourth
quarter was $2.67 per pound.
Preliminary fourth quarter gold sales and
production were higher than third quarter levels as a result of a
strong fourth quarter performance from Nevada Gold Mines, in
particular at Turquoise Ridge, as well as Pueblo Viejo and
Veladero. At North Mara, normal operations resumed in the fourth
quarter following the lifting of restrictions at the tailings
storage facility in September. Fourth quarter gold cost of sales
per ounce1 is expected to be in line with the third quarter. A
quarter-over-quarter decrease in gold total cash costs per ounce2
and all-in sustaining costs per ounce2 of approximately 1-3% and
6-8%, respectively is expected.
Preliminary fourth quarter copper production was
slightly higher than the third quarter of the year following strong
performance across all operations. Preliminary fourth quarter
copper sales were higher than the third quarter, but lower than
fourth quarter production levels as Lumwana continued to be
impacted by a major refurbishment at one of the third-party
smelters that processes a portion of the concentrate produced by
the mine. The refurbishment is expected to be completed in January
2020. Fourth quarter copper cost of sales per pound1 are expected
to be 4-6% higher than the prior quarter, C1 cash costs per pound2
are expected to be 6-8% higher and copper all-in sustaining costs
per pound2 are expected to 2-4% higher quarter-over-quarter.
Barrick will provide additional discussion and
analysis regarding its fourth quarter production and sales when the
Company reports its quarterly and full year 2019 results before
North American markets open on February 12, 2020. President
and CEO Mark Bristow will host a live presentation on the results
at Barrick's corporate office in Toronto at 11:00 EST / 16:00 UTC
(GMT) on that day. The presentation will be linked to a webcast and
conference call.
The following table includes preliminary gold
and copper production and sales results from Barrick's
operations:
|
Three months ended December 31, 2019 |
Twelve months ended December 31, 2019 |
|
Production |
Sales |
Production |
Sales |
Gold (equity ounces (000s)) |
|
|
Carlin3 (61.5%) |
276 |
275 |
968 |
967 |
Cortez (61.5%) |
133 |
132 |
801 |
798 |
Turquoise Ridge4 (61.5%) |
111 |
99 |
335 |
356 |
Long Canyon (61.5%) |
34 |
33 |
58 |
57 |
Phoenix (61.5%) |
31 |
26 |
56 |
45 |
Nevada Gold Mines (61.5%) |
585 |
565 |
2,218 |
2,223 |
Pueblo Viejo (60%) |
179 |
174 |
590 |
584 |
Loulo-Gounkoto (80%) |
144 |
144 |
572 |
575 |
Kibali (45%) |
87 |
89 |
366 |
363 |
Porgera (47.5%) |
82 |
82 |
284 |
285 |
North Mara5 |
103 |
103 |
251 |
248 |
Buzwagi5 |
28 |
26 |
83 |
81 |
Bulyanhulu5 |
9 |
9 |
27 |
27 |
Veladero (50%) |
71 |
70 |
274 |
271 |
Tongon (89.7%) |
61 |
59 |
245 |
245 |
Hemlo |
54 |
53 |
213 |
217 |
Kalgoorlie (50%)6 |
36 |
39 |
206 |
210 |
Lagunas Norte |
— |
— |
107 |
108 |
Morila (40%) |
— |
— |
16 |
17 |
Golden Sunlight |
— |
— |
13 |
13 |
Total Gold |
1,439 |
1,413 |
5,465 |
5,467 |
|
|
|
|
|
|
|
|
|
|
Copper (equity pounds
(millions)) |
|
|
Lumwana |
63 |
36 |
238 |
169 |
Zaldívar (50%) |
36 |
40 |
128 |
125 |
Jabal Sayid (50%) |
18 |
15 |
66 |
61 |
Total
Copper |
117 |
91 |
432 |
355 |
Enquiries:
Analyst, Investor Relations and
Corporate AccessClaudia Pitre+1 416 307-5105Email:
CPitre@barrick.com |
Investor & Media
Relations Kathy du Plessis +44 20 7557 7738 Email:
barrick@dpapr.com |
Website: www.barrick.com
Technical Information
The scientific and technical information
contained in this news release has been reviewed and approved by:
Steven Yopps, MMSA, Barrick’s Director - Metallurgy, North America;
Chad Yuhasz, P.Geo, Barrick’s Mineral Resource Manager, Latin
America and Australia Pacific; and Simon Bottoms, CGeol, Barrick's
Mineral Resources Manager, Africa and Middle East – each a
“Qualified Person” as defined in National Instrument 43-101 –
Standards of Disclosure for Mineral Projects.
Fourth Quarter and Full Year 2019
Results
Barrick will release its Fourth Quarter and Full
Year 2019 Results before market open on February 12, 2020.
President and CEO Mark Bristow will host a live presentation on the
results at Barrick's corporate office in Toronto at 11:00 EST /
16:00 UTC (GMT) on that day. The presentation will be linked to a
webcast and conference call.
US and Canada, 1 800 319 4610UK, 0808 101 2791International, +1
416 915 3239Webcast
If you wish to receive an invitation to the presentation in
Toronto, please contact Claudia Pitre orKathy du Plessis at
investor@barrick.com.
The Q4 2019 presentation materials will be
available on Barrick’s website at www.barrick.com.
The webcast will remain on the website for later
viewing, and the conference call will be available for replay by
telephone at 1 855 669 9658 (US and Canada) and +1 604 674 8052
(international), access code 3969.
Endnote 1
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, 40% South Arturo, 20% Loulo-Gounkoto and 10.3% of
Tongon and including our proportionate share of cost of sales
attributable to equity method investments (Kibali and Morila) in
cost of sales), divided by attributable gold ounces. The
non-controlling interest of 38.5% Nevada Gold Mines is also removed
from cost of sales from July 1, 2019 onwards. The non-controlling
interest of 36.1% Tanzania (North Mara, Bulyanhulu and Buzwagi) was
removed until September 30, 2019, as a matter of convenience as
Barrick obtained 100% ownership on September 17, 2019. 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 2
Total cash costs per ounce, all-in sustaining
costs per ounce and all-in costs per ounce are non-GAAP financial
measures which are calculated based on the definition published by
the World Gold Council (a market development organization for the
gold industry comprised of and funded by 26 gold mining companies
from around the world, including Barrick) ("WGC"). The WGC is not a
regulatory organization. Management uses these measures to monitor
the performance of our gold mining operations and its ability to
generate positive cash flow, both on an individual site basis and
an overall company basis.
Total cash costs start with our cost of sales
related to gold production and removes depreciation, the
non-controlling interest of cost of sales and includes by-product
credits. All-in sustaining costs start with total cash costs and
include sustaining capital expenditures, sustaining leases,
general and administrative costs, minesite exploration and
evaluation costs and reclamation cost accretion and amortization.
These additional costs reflect the expenditures made to maintain
current production levels.
Starting from the first quarter of 2019, we have
renamed "cash costs" to "total cash costs" when referring to our
gold operations. The calculation of total cash costs is identical
to our previous calculation of cash costs with only a change in the
naming convention of this non-GAAP measure.
Starting from the first quarter of 2019, we have
included sustaining capital expenditures and project capital
expenditures on a cash basis instead of an accrual basis. As a
result of adopting IFRS 16 Leases, the full lease amount is
included in accrued capital expenditures on initial recognition. We
believe that the change in capital expenditures from an accrual
basis to a cash basis better reflects the timing of costs
associated with our operations. The original WGC Guidance Note
explicitly excluded certain financing activities from all-in
sustaining costs and all-in costs. As a result of the new lease
accounting standard, the WGC Guidance Note was updated to include
both the principal and interest portion of the cash lease payment
in the all-in sustaining costs and all-in cost metrics. We have
updated our calculation accordingly. Prior periods have not been
restated but would not be materially different.
We believe that our use of total cash costs,
all-in sustaining costs and all-in costs will assist analysts,
investors and other stakeholders of Barrick 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. Due to the
capital-intensive nature of the industry and the long useful lives
over which these items are depreciated, there can be a significant
timing difference between net earnings calculated in accordance
with IFRS and the amount of free cash flow that is being generated
by a mine and therefore we believe these measures are useful
non-GAAP operating metrics and supplement our IFRS disclosures.
These measures are not representative of all of our cash
expenditures as they do not include income tax payments, interest
costs or dividend payments. These measures do not include
depreciation or amortization.
Total cash costs per ounce, all-in sustaining
costs and all-in costs are intended to provide additional
information only and do not have standardized definitions under
IFRS and should not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS. These
measures are not equivalent to net income or cash flow from
operations as determined under IFRS. Although the WGC has published
a standardized definition, other companies may calculate these
measures differently.
C1 cash costs per pound and all-in sustaining
costs per pound are non-GAAP financial measures related to our
copper mine operations. We believe that C1 cash costs per pound
enables investors to better understand the performance of our
copper operations in comparison to other copper producers who
present results on a similar basis. C1 cash costs per pound
excludes royalties and production taxes and non-routine charges as
they are not direct production costs. All-in sustaining costs per
pound is similar to the gold all-in sustaining costs metric and
management uses this to better evaluate the costs of copper
production. We believe this measure enables investors to better
understand the operating performance of our copper mines as this
measure reflects all of the sustaining expenditures incurred in
order to produce copper. All-in sustaining costs per pound includes
C1 cash costs, sustaining capital expenditures, sustaining leases,
general and administrative costs, minesite exploration and
evaluation costs, royalties and production taxes, reclamation cost
accretion and amortization and write-downs taken on inventory to
net realizable value.
Barrick will provide a full reconciliation of
these non-GAAP financial measures when the Company reports its
quarterly results on February 12, 2020.
Endnote 3
Includes Goldstrike and Nevada Gold Mines' 60%
equity share of South Arturo.
Endnote 4
Includes Twin Creeks.
Endnote 5
Formerly presented as part of Acacia Mining plc.
or as Tanzania. As a matter of convenience, preliminary
production results are based on our 63.9% share of North Mara,
Bulyanhulu and Buzwagi up until September 30, 2019 (notwithstanding
the completion of the Acacia transaction on September 17, 2019) and
our 100% share from October 1, 2019 onward.
Endnote 6
On November 28, 2019, Barrick sold its 50%
interest in Kalgoorlie. These results represent the fourth
quarter production and sales attributable to Barrick until its
disposition.
Cautionary Statements Regarding
Preliminary Full Year and Fourth Quarter Production, Sales and
Costs for 2019, and Forward-Looking Information
Barrick cautions that, whether or not expressly
stated, all full year and fourth quarter figures contained in this
press release including, without limitation, production levels,
sales and associated costs are preliminary, and reflect our
expected full year and fourth quarter results as of the date of
this press release. Actual reported full year and fourth quarter
production levels, sales and associated costs are subject to
management’s final review, as well as review by the Company’s
independent accounting firm, and may vary significantly from those
expectations because of a number of factors, including, without
limitation, additional or revised information, and changes in
accounting standards or policies, or in how those standards are
applied. Barrick will provide additional discussion and analysis
and other important information about its full year and fourth
quarter production levels and sales and associated costs when it
reports actual results on February 12, 2020. For a complete
picture of the Company’s financial performance, it will be
necessary to review all of the information in the Company’s full
year and fourth quarter financial report and related MD&A.
Accordingly, readers are cautioned not to rely solely on the
information contained herein.
Finally, Barrick cautions that this press
release contains forward-looking statements with respect to: (i)
Barrick’s production and sales; (ii) costs per ounce for gold and
per pound for copper; and (iii) expected timing for completion of
refurbishments at one of the smelters that processes Lumwana
concentrate.
Forward-looking statements are necessarily based
upon a number of estimates and assumptions including material
estimates and assumptions related to the factors set forth below
that, while considered reasonable by the Company as at the date of
this press release in light of management’s experience and
perception of current conditions and expected developments, are
inherently subject to significant business, economic, and
competitive uncertainties and contingencies. Known and unknown
factors could cause actual results to differ materially from those
projected in the forward-looking statements, and undue reliance
should not be placed on such statements and information. Such
factors include, but are not limited to: fluctuations in the spot
and forward price of gold, copper, or certain other commodities
(such as silver, diesel fuel, natural gas, and electricity); the
speculative nature of mineral exploration and development; changes
in mineral production performance, exploitation, and exploration
successes; risks associated with projects in the early stages of
evaluation, and for which additional engineering and other analysis
is required; whether the agreement to settle all disputes between
Acacia and the Government of Tanzania (the “GoT”) will be legalized
and executed by the GoT; the Company’s ability to successfully
re-integrate Acacia’s operations; disruption of supply routes which
may cause delays in construction and mining activities at Barrick’s
more remote properties; whether benefits expected from recent
transactions are 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
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; the impact of inflation; fluctuations in the
currency markets; 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; 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; and availability and
increased costs associated with mining inputs and labor. 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.
Barrick disclaims any intention or obligation to
update or revise any forward-looking statements whether as a result
of new information, future events or otherwise, except as required
by applicable law.
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