UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2019
Commission File Number: 1-9059
Barrick Gold Corporation
(Registrants name)
Brookfield Place, TD Canada Trust Tower, Suite 3700
161 Bay Street, P.O. Box 212
Toronto, Ontario M5J 2S1 Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☐ Form 40-F ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
INCORPORATION BY REFERENCE
This report on Form 6-K is hereby incorporated by reference into the Registration Statements on Form F-3 (File No. 333-206417) filed with the SEC on August 14, 2015, Form F-10 (File No. 333-216099) filed with the SEC on February 15, 2017 and Form S-8 (File No. 333-224560) filed with the SEC on May 1, 2018.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BARRICK GOLD CORPORATION | ||||||
Date: February 14, 2019 | By: | /s/ Kevin Thomson | ||||
Name: | Kevin Thomson | |||||
Title: | Senior Executive Vice-President, | |||||
Strategic Matters |
EXHIBIT INDEX
Exhibits |
Description | |
99.1 | Barrick Gold Corporation Fourth Quarter and Year-End Report for 2018, including the Consolidated Financial Statements prepared in accordance with International Financial Reporting Standards and the notes thereto as at and for the years ended December 31, 2018 and December 31, 2017 and Managements Discussion and Analysis for the same periods. | |
99.2 | Consent of PricewaterhouseCoopers LLP | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Exhibit 99.1
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PRESS RELEASE |
Barrick Reports 2018 Full Year and Fourth Quarter Results
All amounts expressed in U.S. dollars unless otherwise indicated
| Completed transformational merger with Randgold Resources Limited to create industry-leading gold company, effective January 1, 2019. |
| Generated annual revenues of $7.24 billion, net cash provided by operating activities (operating cash flow) of $1.77 billion, and free cash flow1 of $365 million. |
| Increased returns to shareholders with a 33 percent increase in annual dividend. |
| Full-year gold production of 4.53 million ounces was within guidance, at a cost of sales2 of $892 per ounce, and all-in sustaining costs3 of $806 per ounce. Full-year copper production was 383 million pounds, also within guidance, at a cost of sales2 of $2.40 per pound, and all-in sustaining costs4 of $2.82 per pound. |
| Q4 gold production was 1.26 million ounces, at a cost of sales2 of $980 per ounce, and all-in sustaining costs3 of $788 per ounce. Q4 copper production was 109 million pounds, at a cost of sales2 of $2.85 per pound, and all-in sustaining costs4 of $2.95 per pound. |
| Q4 revenue was $1.90 billion, with operating cash flow of $411 million, and free cash flow1 of $37 million. |
| Total attributable capital expenditures for 2018 were $1.41 billion, at the low end of guidance range. |
| Full-year corporate administration costs of $212 million were significantly below 2018 guidance. |
| The Company recorded a net loss attributable to equity holders (net loss) of $1.55 billion ($1.32 per share) for 2018, including a net loss of $1.20 billion ($1.02 per share) in the fourth quarter, reflecting the impact of impairment charges recorded during 2018. |
| 2018 adjusted net earnings5 were $409 million ($0.35 per share), with Q4 adjusted net earnings5 of $69 million ($0.06 per share). |
| Total debt was reduced by 11 percent in 2018, with a year-end cash balance of $1.6 billion.6 |
| Achieved a 9 percent improvement in total reportable injury frequency rate7, and reduced reportable environmental incidents by 12.5 percent. |
| Organic growth projects in Nevada and the Dominican Republic remain on schedule and in line with budget. |
| Added an initial inferred resource at Fourmile, at an average grade of 18.6 grams of gold per tonne.8 |
| Declared proven and probable gold reserves of 62.3 million ounces8 as of December 31, 2018. |
| Declared proven and probable copper reserves of 10.6 billion pounds8 as of December 31, 2018. |
TORONTO, February 13, 2019 Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) (Barrick or the Company) today reported fourth quarter and full year results for the period ending December 31, 2018. In 2018, our operations produced 4.53 million ounces of gold, at a cost of sales of $892 per ounce, and all-in sustaining costs3 of $806 per ounceamong the lowest of the senior gold peers.9
The Company generated annual revenue of $7.24 billion, operating cash flow of $1.77 billion, and free cash flow1 of $365 million. In 2018, our focus on capital discipline allowed us to increase investments in organic growth and significantly reduce our debt, while also increasing returns to shareholders.
Summarized 2018 Financial and Operating Results
Financial Results | First Quarter |
Second Quarter |
Third Quarter |
Fourth Quarter |
Full Year 2018 |
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Average realized gold price ($ per ounce)10 |
1,332 | 1,313 | 1,216 | 1,223 | 1,267 | |||||||||||||||
Net earnings ($ millions) |
158 | (94) | (412) | (1,197) | (1,545) | |||||||||||||||
Adjusted net earnings ($ millions)5 |
170 | 81 | 89 | 69 | 409 | |||||||||||||||
Operating cash flow ($ millions) |
507 | 141 | 706 | 411 | 1,765 | |||||||||||||||
Free cash flow ($ millions)1 |
181 | (172) | 319 | 37 | 365 | |||||||||||||||
Net earnings per share ($) |
0.14 | (0.08) | (0.35) | (1.02) | (1.32) | |||||||||||||||
Adjusted net earnings per share ($)5 |
0.15 | 0.07 | 0.08 | 0.06 | 0.35 | |||||||||||||||
Total Attributable Capital Expenditures ($ millions)11 |
326 | 332 | 346 | 409 | 1,413 | |||||||||||||||
Operating Results Gold |
|
First Quarter |
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Second Quarter |
|
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Third Quarter |
|
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Fourth Quarter |
|
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Full Year 2018 |
| |||||
Production (000s of ounces) |
1,049 | 1,067 | 1,149 | 1,262 | 4,527 | |||||||||||||||
Cost of sales applicable to gold ($ per ounce)2 |
848 | 882 | 850 | 980 | 892 | |||||||||||||||
Cash Costs ($ per ounce)3 |
573 | 605 | 587 | 588 | 588 | |||||||||||||||
All-in sustaining costs ($ per ounce)3 |
804 | 856 | 785 | 788 | 806 | |||||||||||||||
Copper |
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Production (millions of pounds) |
85 | 83 | 106 | 109 | 383 | |||||||||||||||
Cost of sales applicable to copper ($ per pound) |
2.07 | 2.45 | 2.18 | 2.85 | 2.40 | |||||||||||||||
C1 Cash Costs ($ per pound)4 |
1.88 | 2.10 | 1.94 | 1.98 | 1.97 | |||||||||||||||
All-in sustaining costs ($ per pound)4 |
2.61 | 3.04 | 2.71 | 2.95 | 2.82 |
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. Exploration drilling continued to intersect high-grade mineralization at these properties, demonstrating the significant untapped geological potential of Barricks land position in Nevada, and supporting the evaluation of increasing processing capacity in the region. We also advanced studies and test work in support of an expansion to increase throughput at the Pueblo Viejo mine in the Dominican Republic by 50 percent, with positive initial results.12
Reflecting our commitment to shareholder returns, we increased our annual dividend by 33 percent, from 12 cents per share in 2017, to 16 cents per share in 2018. In addition, we continued to strengthen our balance sheet with the repurchase of $629 million in outstanding notes in July, bringing the Companys total debt repayments to roughly $10 billion over the past five and a half years.
During 2018, Barrick also strengthened its partnership with Shandong Gold Group Co., Ltd., one of Chinas leading mining companies. In July, the two companies announced an enhanced strategic cooperation agreement, focused on evaluating the Lama project in Argentina, and strengthening technical collaboration between the Barrick and Shandong teams. In September, Barrick and Shandong signed a mutual investment agreement, under which each Company agreed to purchase up to $300 million of shares in the other, further deepening the partnership.
The completion of Barricks transformational merger with Randgold on January 1, 2019, created an industry-leading gold company with a common vision for long-term value creation. It significantly strengthened Barricks position across key metrics relative to the senior gold peer group13, including: ownership of five of the worlds top 10 Tier One14 gold assets, and two potential Tier One gold assets under development; the lowest total cash costs15; high-quality gold reserves; and extensive land positions in many of the worlds most prolific gold districts, positioning the Company for sustainable growth.
BARRICK YEAR-END 2018 |
2 | PRESS RELEASE |
As we move forward as one team, Barricks vision is to be the worlds most valued gold mining business. To achieve this, the Company will focus on optimizing our existing operations, pursuing new opportunities that meet strict investment criteria, and developing them with disciplined efficiency. By doing so, we aim to deliver sustainable returns to our owners, and real benefits to our partners, host countries, and communities.
FINANCIAL COMMENTS
Our liquidity position is strong and continues to improve, with robust cash flow generation, modest near-term debt repayment obligations, a $3 billion undrawn credit facility, and a consolidated cash balance of approximately $1.6 billion. We reduced our total debt by $685 million, or 11 percent, in 2018, and with more than 85 percent of the Companys outstanding debt due after 2032, Barrick now has one of the strongest balance sheets in the industry. In addition, as of December 31, 2018, Randgold had $0.7 billion of cash and cash equivalents, and no debt outstanding, bringing the cash position of the combined company to $2.3 billion as of January 1, 2019.
Barrick reported a net loss of $1.55 billion in 2018, primarily due to net impairment charges of $900 million relating to the Veladero and Lagunas Norte mines, and $742 million in significant tax adjustments. Adjusted net earnings5 of $409 million were lower than the prior year, primarily due to the impact of lower grades and recoveries, as anticipated, along with higher direct mining costs driven by increased energy prices and consumption, and the divestment of 50 percent of the Veladero mine on June 30, 2017. Earnings were also impacted by lower throughput at Acacia as a result of reduced operations at Bulyanhulu, lower tonnage processed at Lagunas Norte, and increased government imposts at Veladero. This was partially offset by lower income tax expense as a result of lower earnings and sales volumes, and lower depreciation.
Significant adjusting items to net earnings (pre-tax and non-controlling interest effects) in 2018 include:
| $900 million ($799 million net of tax and non-controlling interest) in net impairment charges primarily relating to Veladero and Lagunas Norte; |
| $742 million in significant tax adjustments primarily relating to the de-recognition of deferred tax assets of $814 million, partially offset by a deferred tax recovery of $107 million on United States withholding taxes; |
| Additional adjustments relating to the inventory impairment at Lagunas Norte of $166 million, a write-off of a Western Australia long-term stamp duty tax receivable of $43 million, and costs associated with the merger with Randgold of $37 million; partially offset by |
| $68 million ($46 million net of tax and non-controlling interest) in disposition gains mainly relating to the sale of a non-core royalty asset at Acacia. |
During the fourth quarter, the Company determined that the carbonaceous material project (CMOP) at Lagunas Norte does not currently meet the Companys investment criteria, resulting in an inventory impairment of $166 million as described above. Barrick previously reported a non-current asset impairment of $405 million at Lagunas Norte in the third quarter, following the Companys decision not to proceed with the refractory sulphide ore project (PMR). For more information, please see the Lagunas Norte project update on page seven of this press release. A non-current asset impairment of $246 million ($160 million net of tax), and a goodwill impairment of $154 million, were also recorded at the Veladero mine in the fourth quarter, reflecting an increase in the mines cost structure, related to increased government imposts and higher energy costs.
Refer to page 62 of Barricks fourth quarter MD&A for a full list of reconciling items between net earnings and adjusted net earnings for the current and prior year.
In 2018, we generated $1.77 billion in operating cash flow. Lower operating cash flow compared to 2017 primarily reflects lower sales volumes and increased direct mining costs (as described above). This was partially offset by a favorable movement in working capital, mainly as a result of increased drawdown of inventory and the timing of payments and changes in other current assets and liabilities. Operating cash flow also benefited from lower cash taxes paid, reflecting lower earnings and sales volume, and higher realized gold prices compared to 2017.
BARRICK YEAR-END 2018 |
3 | PRESS RELEASE |
Capital expenditures were at the low end of our guidance range for the year, and in line with 2017, with an increase in project capital expenditures offset by a decrease in minesite sustaining capital expenditures. Free cash flow of $365 million was lower than the prior year, primarily driven by lower operating cash flows.
Over the course of 2018, we continued to realize savings resulting from the implementation of our decentralized operating model, as well as workforce reductions associated with the Randgold merger. Full-year corporate administration costs were $212 million, significantly below our original 2018 guidance of approximately $275 million.
OPERATIONS COMMENTS
Ensuring the safety of people and the environment are our most important priorities. We continued to improve our safety performance in 2018, achieving a total reportable injury frequency rate (TRIFR)7 of 0.32the best result in the Companys history, and a nine percent improvement compared to 2017. Since 2014, Barrick has also achieved an 87 percent reduction in reportable environmental incidents, with seven incidents at our operations last year, down from eight in 2017, continuing a long-term improvement trend.
In 2018, our operations produced 4.53 million ounces of gold, at a cost of sales of $892 per ounce, and all-in sustaining costs3 of $806 per ounce. As anticipated, gold production improved over the second half of 2018, driven by stronger performance at Barrick Nevada and Pueblo Viejo, with gold production of 1.26 million ounces in the fourth quarter, compared to 1.15 million ounces in the third quarter. Higher costs compared to 2017 primarily reflect the impact of lower grades and recoveries, higher energy costs, and higher mine site sustaining capital expenditures on a per ounce basis.
As anticipated, copper production improved progressively over the third and fourth quarters, driven by a steady improvement in grade and crusher reliability at Lumwana. In 2018, our copper portfolio produced 383 million pounds, at a cost of sales of $2.40 per pound, and all-in sustaining costs4 of $2.82 per pound. Copper production in the fourth quarter was 109 million pounds, at a cost of sales of $2.85 per pound, and all-in sustaining costs4 of $2.95 per pound.
Please see page 44 of Barricks fourth quarter MD&A for individual operating segment performance details.
MINERAL RESOURCE MANAGEMENT
Barricks 2018 year-end reserve and resource statements reflect the Companys asset portfolio prior to the completion of the Companys merger with Randgold on January 1, 2019. Randgolds 2018 year-end reserve and resource statements can be found at www.barrick.com/investors.
Barricks 2018 reserves were calculated using a gold price assumption of $1,200 per ounce, consistent with 2017. As of December 31, 2018, Barricks proven and probable gold reserves were 62.3 million ounces8, compared to 64.4 million ounces at the end of 2017. While 5.4 million ounces of reserves were depleted through mining and processing, the Company added 3.2 million ounces of reserves at an average grade of 4.7 grams per tonne, significantly higher than our overall reserve grade of 1.56 grams per tonne. Reserves at our underground operations, where the majority of the Companys future production will come from, were replaced, with additions at Turquoise Ridge, Goldstrike, Hemlo and Porgera.
In 2018, measured, indicated, and inferred gold resources were calculated using a gold price assumption of $1,500 per ounce, consistent with 2017. Measured and indicated gold resources increased slightly to 88.8 million ounces8 at the end of 2018, compared to 88.6 million ounces at the end of 2017. Inferred gold resources also increased to 33.5 million ounces at the end of 20188, compared to 30.8 million ounces at the end of 2017.
Approximately 1.25 million ounces of proven and probable reserves, 1.3 million ounces of measured and indicated resources, and 1.2 million ounces of inferred resources (Barricks 63.9 percent share) were removed at Acacias Bulyanhulu operation following a review by Acacia of the mines geological and mineral resource models, and other optimization work.
BARRICK YEAR-END 2018 |
4 | PRESS RELEASE |
Copper reserves and resources for 2018 were calculated using a copper price of $2.75 per pound and $3.50 per pound, respectively, consistent with 2017. As of December 31, 2018, proven and probable copper reserves were 10.6 billion pounds8, measured and indicated copper resources were 11.6 billion pounds8, and inferred copper resources were 2.8 billion pounds. These figures include copper contained within gold reserves and resources.
EXPLORATION UPDATE
Exploration has been repositioned to invest in our assets, with a focus on adding value at our Tier One mines, enhancing cash flow from other operations, and discovering and developing the next generation of Tier One mines. We expect to incur approximately $160 to $170 million of exploration and evaluation expenditures in 2019 with approximately 80 percent allocated to the Americas. Our 2019 program includes the following highlights:
In the Cortez District, deep drilling will continue to focus on adding resources, as well as testing open mineralization, extensions, and concepts farther afield. Consolidating the Goldrush and Fourmile geology models is a top priority and in progress. We anticipate that Fourmile and Goldrush have the potential to be integrated and developed as a single project (see Goldrush project update on page six).
At Goldstrike, we have a renewed focus on targets along a relatively poorly-tested section of the Post Fault north of the Meikle underground mine. This corridor is also the current focus of underground mining expansion and resource additions as development advances north from the Banshee deposit.
During the fourth quarter, a selective re-logging program at Pueblo Viejo led to a significant reinterpretation of the projects geology model. We are preparing a fully-revised geology model with a newly-established, dedicated site-based project team. This has the potential to predict the location of high-grade mineralization that could be brought forward in the mine plan.
As mining of the existing oxide orebody at Lagunas Norte winds down, we are focused on improving geological understanding of the remaining resources, and we are actively exploring a number of other regional targets with the potential to extend the life of the mine, with drilling commencing in the fourth quarter.
At Veladero, we are mounting a renewed effort to develop satellite targets and make new discoveries in the Veladero-Lama district, supported by the establishment of an experienced site-based exploration team. This includes drilling at Quatro Esquinas, immediately south of the Filo Federico pit, and at the Del Carmen project, located in Argentina, adjacent to the Alturas deposit in Chile.
In Africa, the discovery of the high grade Loulo 3 shoot highlights the potential for further discoveries around our existing orebodies. Continuing brownfields exploration at Kibali has also identified numerous opportunities for reserve replacement. At Massawa, brownfields exploration will focus on efforts to expand the projects resource base. The north of Côte dIvoire will be another key exploration target area.
PROJECTS UPDATE
We continue to advance a pipeline of high-confidence projects at or near our existing operations, with the potential to contribute more than one million ounces of annual production to Barrick, at costs well below our current portfolio average.
Turquoise Ridge Expansion, Nevada, U.S.A.16 (75 percent Barrick / 25 percent Newmont)
The Company is focused on developing Turquoise Ridge into a Tier One mine by increasing production and resources through mechanization, automation, and innovation. Ramp up of the road header over the course of 2018 has improved safety, increased throughput, and dropped mining costs per tonne. A second road header is on order, and further evaluation of the opportunity associated with increasing the level of mechanization and automation for the mine as a whole is underway.
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Construction of a third shaft at Turquoise Ridge continues to advance according to schedule and within budget, with efforts in 2019 focused on earthworks and shaft sinking. The construction of this shaft is expected to increase annual production to more than 500,000 ounces per year (100 percent basis), at an average cost of sales of around $720 per ounce, and average all-in sustaining costs3 of roughly $630 per ounce. As of December 31, we have spent $62 million (including $3 million in the fourth quarter of 2018) out of a total estimated capital cost of $300-$325 million (100 percent basis) on the construction this shaft. Initial production from the new shaft is expected to begin in 2022, with sustained production from 2023.
Since the end of 2015, reserves have increased by 3.5 million ounces8 (100 percent basis), primarily through driving down mining costs per tonne, which has allowed for a lower cutoff grade, thereby optimizing the way the orebody is mined. The focus in 2019 is to realize the potential to further grow reserves, extend mine life, and grow production over and above the current mine plan, through reducing costs to further lower the cutoff grade, as well as extending mineralization at depth.
Goldrush Complex, Nevada, U.S.A.
Construction of twin exploration declines at Goldrush accelerated in the fourth quarter, and each decline has now advanced approximately 450 meters. These declines will provide access to the orebody, allowing for further drilling, and the conversion of existing resources to reserves. The exploration declines can be converted to production declines in the future, subject to further permitting. The projects growing resource base is now enabling the team to re-evaluate and optimize the project design.
Infill drilling at the Red Hill portion of the Goldrush deposit continues to support geological and resource models. In 2018, probable gold reserves for Goldrush grew by 35 percent to 2.0 million ounces8, while measured and indicated resources remained steady at 9.4 million ounces.8 Conversion of a large majority of the remaining resources to reserves, as well as the significant potential to identify additional resources, will begin on completion of the exploration declines, and therefore is not expected for a number of years.
Ongoing drilling at Fourmile, located within 500 meters of Goldrush, continues to intersect high-grade mineralization across a number of stratigraphic horizons, supporting the notion that the deposit is a northern extension of the Goldrush system. Drilling has also expanded the footprint of Fourmile to the north and the south, resulting in a modest initial inferred resource. Inferred resources for Goldrush, including Fourmile, have increased to 3.6 million ounces.8 In 2019, we will continue to test the gap between Goldrush and Fourmile, as well as seek to extend mineralization to the north. We are also carrying out an integrated review of the geological, geotechnical, and geometallurgical aspects of the mineralized corridor to optimize the mine design, which could impact production rates and processing options for the operation.
Cortez Deep South, Nevada, U.S.A.
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 sales of $650 per ounce, and all-in sustaining costs3 of $580 per ounce. The draft Environmental Impact Statement for the project was published in late October, with the public comment period concluding in December. As of December 31, we have spent $33 million (including $2 million in the fourth quarter of 2018) out of a total estimated capital cost of $106 million on the Deep South Expansion. Initial production from Deep South is expected in 2022. Deep South will utilize infrastructure which has already been approved under current plans to expand mining in the Lower Zone of the Cortez underground mine, including the new Rangefront twin declines, and other underground infrastructure already in use and under construction.
Pueblo Viejo, Dominican Republic12 (60 percent Barrick / 40 percent Goldcorp)
Scoping studies and pilot project work are supportive of a plant expansion at the Pueblo Viejo mine that could increase throughput by roughly 50 percent to 12 million tonnes per year, allowing the mine to maintain average annual gold production of approximately 800,000 ounces after 2022 (100 percent basis). To achieve this, the mine is evaluating a flotation concentrator followed by ultra-fine grinding and tank oxidation of the concentrate. Testing to date has indicated that tank oxidation is preferable to the pad pre-oxidation process previously considered. Pueblo Viejo expects to complete prefeasibility studies for the plant expansion and additional tailings capacity by the end of 2019. The project
BARRICK YEAR-END 2018 |
6 | PRESS RELEASE |
has the potential to convert roughly seven million ounces of measured and indicated resources to proven and probable reserves (100 percent basis).
Lagunas Norte Carbonaceous Material and Refractory Ore Project, Peru
In 2018, Barrick updated a feasibility study on a project to extend the life of the Lagunas Norte mine through the sequenced installation of mill, carbon-in-leach, flotation and autoclave processing facilities. During 2018, the Company determined that the project does not currently meet Barricks investment criteria. As a result, the Company is re-evaluating the Lagunas Norte business plan. The near-term focus of the re-evaluation will be to reduce costs, improve geological understanding of the in-pit reserves and near-pit resources, and to explore regional targets with the potential to extend the life of the mine.
Greenfield Projects - Long-term value and optionality for shareholders
Donlin Gold, Alaska, U.S.A. (50 percent Barrick / 50 percent NOVAGOLD)
Donlin Gold contains 19.5 million ounces8 of measured and indicated gold resources (Barricks 50 percent share). In August 2018, the project received its Record of Decision and other major federal permits, concluding six years of federal permitting. Donlin Gold, located in a stable jurisdiction with strong stakeholder support, represents one of the worlds largest undeveloped gold deposits. We continue to work in collaboration with our partners at NOVAGOLD to identify ways to optimize the project.
Norte Abierto, Atacama Region, Chile (50 percent Barrick / 50 percent Goldcorp)
Norte Abierto, a joint venture with Goldcorp in Chile, contains 11.6 million ounces8 of proven and probable gold reserves, and 13.3 million ounces8 of measured and indicated gold resources (Barricks 50 percent share). The joint venture continues to advance project optimization efforts, including an updated geological model for the Cerro Casale, Caspiche, and Luciano deposits.
Pascua-Lama, San Juan Province, Argentina / Atacama Region, Chile
Pascua-Lama, located on the border between Argentina and Chile, contains 21.3 million ounces8 of measured and indicated gold resources. At present, the Pascua-Lama project does not meet Barricks investment criteria. The Company plans to carry out a re-evaluation of options for the project in 2019, while continuing efforts to reduce care and maintenance costs.
Alturas, Coquimbo Region, Chile
The Alturas project, located in Chile on the El Indio Belt, is a Barrick greenfield discovery with 8.9 million ounces8 of inferred gold resources. Work in 2018 focused on improving geological understanding of high-grade and shallow orebody areas at the project, and defining the potential mineral inventory of the nearby Del Carmen prospect.
CONFERENCE CALL AND WEBCAST
Please join us for a conference call and webcast today at 11:00 EST / 16:00 UTC to discuss the results.
Webcast: www.barrick.com | U.S. and Canada: 1-800-319-4610 UK: 0808 101 2791 South Africa: 0800 981 705 International: +1 416 915-3239 |
The conference call will be available for replay by phone at 1-855-669-9658 (U.S. and Canada toll free), and +1 604 674-8052 (international), access code 2852.
TECHNICAL INFORMATION
The scientific and technical information contained in this press release has been reviewed and approved by: Rick Sims, Registered Member SME, Vice President, Reserves and Resources of Barrick; Geoffrey Locke, P. Eng., Manager, Metallurgy of Barrick; and Mike Tsafaras, P. Eng., Manager, Value Realization of Barrickwho are each a Qualified
BARRICK YEAR-END 2018 |
7 | PRESS RELEASE |
Person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects. Following the completion of the merger with Randgold, the designation of Qualified Persons for the combined company will be reviewed, and may be updated for future reporting.
THIRD PARTY DATA
The total cash costs comparison of Barrick to its senior gold peers is based on data obtained from Wood Mackenzie as of August 31, 2018. Wood Mackenzie is an independent third party research and consultancy firm that provides data for, among others, the metals and mining industry. Wood Mackenzie is not affiliated with Barrick.
Where figures for Barrick are compared to its senior gold peers, the data from Wood Mackenzie has been used to ensure consistency in the compared measure across the Barrick and the comparator group. Barrick does not have the ability to verify the Wood Mackenzie figures and the non-GAAP financial performance measures used by Wood Mackenzie may not correspond to the non-GAAP financial performance measures calculated by Barrick or any of the other senior gold peers.
ENDNOTES
Endnote 1
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 this non-GAAP measure are provided in the MD&A accompanying Barricks financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
($ millions) | For the years ended December 31 | For the three months ended December 31 | ||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Net cash provided by operating activities |
$1,765 | $2,065 | $2,640 | $411 | $590 | |||||||||||||||
Capital expenditures |
(1,400 | ) | (1,396 | ) | (1,126 | ) | (374 | ) | (350 | ) | ||||||||||
Free cash flow |
$365 | $669 | $1,514 | $37 | $240 |
Endnote 2
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 sold. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments).
Endnote 3
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
BARRICK YEAR-END 2018 |
8 | PRESS RELEASE |
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 26 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 Barricks financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Gold Cost of Sales to Cash costs, All-in sustaining costs and All-in costs, including on a per ounce basis
($ millions, except per ounce information in dollars) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||||||
Footnote | 2018 | 2017 | 2016 | 2018 | 2017 | |||||||||||||||||||
Cost of sales applicable to gold production |
$4,621 | $4,836 | $4,980 | $1,353 | $1,292 | |||||||||||||||||||
Depreciation |
(1,253 | ) | (1,529 | ) | (1,504 | ) | (346 | ) | (404 | ) | ||||||||||||||
By-product credits |
1 | (131 | ) | (135 | ) | (184 | ) | (26 | ) | (30 | ) | |||||||||||||
Realized (gains)/losses on hedge and non-hedge derivatives |
2 | 3 | 23 | 89 | 3 | 4 | ||||||||||||||||||
Non-recurring items |
3 | (172 | ) | | 24 | (155 | ) | | ||||||||||||||||
Other |
4 | (87 | ) | (106 | ) | (44 | ) | (27 | ) | (35 | ) | |||||||||||||
Non-controlling interests (Pueblo Viejo and Acacia) |
5 | (313 | ) | (299 | ) | (358 | ) | (80 | ) | (81 | ) | |||||||||||||
Cash costs
|
|
$2,668
|
|
|
$2,790
|
|
|
$3,003
|
|
|
$722
|
|
|
$746
|
| |||||||||
General & administrative costs |
265 | 248 | 256 | 53 | 62 | |||||||||||||||||||
Minesite exploration and evaluation costs |
6 | 45 | 47 | 44 | 14 | 8 | ||||||||||||||||||
Minesite sustaining capital expenditures |
7 | 975 | 1,109 | 944 | 276 | 279 | ||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
8 | 81 | 64 | 59 | 18 | 13 | ||||||||||||||||||
Non-controlling interest, copper operations and other |
9 | (374 | ) | (273 | ) | (287 | ) | (118 | ) | (74 | ) | |||||||||||||
All-in sustaining costs
|
|
$3,660
|
|
|
$3,985
|
|
|
$4,019
|
|
|
$965
|
|
|
$1,034
|
| |||||||||
Project exploration and evaluation and project costs |
6 | 338 | 307 | 193 | 110 | 90 | ||||||||||||||||||
Community relations costs not related to current operations |
4 | 4 | 8 | 2 | 1 | |||||||||||||||||||
Project capital expenditures |
7 | 459 | 273 | 175 | 127 | 81 | ||||||||||||||||||
Rehabilitation - accretion and amortization (non-operating sites) |
8 | 33 | 20 | 11 | 8 | 4 | ||||||||||||||||||
Non-controlling interest and copper operations |
9 | (21 | ) | (21 | ) | (42 | ) | (5 | ) | (9 | ) | |||||||||||||
All-in costs
|
|
$4,473
|
|
|
$4,568
|
|
|
$4,364
|
|
|
$1,207
|
|
|
$1,201
|
| |||||||||
Ounces sold - equity basis (000s ounces) |
10 | 4,544 | 5,302 | 5,503 | 1,232 | 1,372 | ||||||||||||||||||
Cost of sales per ounce |
11,12 | $892 | $794 | $798 | $980 | $801 | ||||||||||||||||||
Cash costs per ounce |
12 | $588 | $526 | $546 | $588 | $545 | ||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
12,13 | $607 | $544 | $569 | $602 | $561 | ||||||||||||||||||
All-in sustaining costs per ounce |
12 | $806 | $750 | $730 | $788 | $756 | ||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
12,13 | $825 | $768 | $753 | $802 | $772 | ||||||||||||||||||
All-in costs per ounce |
12 | $985 | $860 | $792 | $985 | $882 | ||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
12,13 | $1,004 | $878 | $815 | $999 | $898 |
1 | By-product credits |
Revenues include the sale of by-products for our gold and copper mines for the three months ended December 31, 2018 of $26 million (2017: $30 million) and the year ended December 31, 2018 of $131 million (2017: $135 million; 2016: $151 million) and energy sales from the Monte Rio power plant at our Pueblo Viejo mine for the three months ended December 31, 2018 of $nil (2017: $nil) and the year ended December 31, 2018 of $nil (2017: $nil; 2016: $33 million) up until its disposition on August 18, 2016.
2 | Realized (gains)/losses on hedge and non-hedge derivatives |
Includes realized hedge losses of $2 million and $4 million for the three months and year ended December 31, 2018, respectively (2017: $5 million and $27 million, respectively; 2016: $73 million), and realized non-hedge losses of $1 million and gains of $1 million for the three months and year ended
BARRICK YEAR-END 2018 |
9 | PRESS RELEASE |
December 31, 2018, respectively (2017: gains of $1 million and $4 million, respectively; 2016: losses of $16 million). Refer to note 5 of the Financial Statements for further information.
3 | Non-recurring items |
These gains/costs are not indicative of our cost of production and have been excluded from the calculation of cash costs. Non-recurring items for the current year mainly relate to inventory impairment of $166 million at Lagunas Norte.
4 | Other |
Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $nil, respectively, for the three months and year ended December 31, 2018 (2017: $nil and $nil, respectively; 2016: $5 million), adding the cost of treatment and refining charges of $nil and $nil, respectively, for the three months and year ended December 31, 2018 (2017: $nil and $1 million, respectively; 2016: $16 million), and the removal of cash costs associated with our Pierina mine, which is mining incidental ounces as it enters closure, of $27 million and $87 million for the three months and year ended December 31, 2018, respectively (2017: $35 million and $108 million, respectively; 2016: $66 million).
5 | Non-controlling interests (Pueblo Viejo and Acacia) |
Non-controlling interests include non-controlling interests related to gold production of $114 million and $453 million, respectively, for the three months and year ended December 31, 2018 (2017: $137 million and $454 million, respectively; 2016: $508 million). Refer to note 5 of the Financial Statements for further information.
6 | Exploration and evaluation costs |
Exploration, evaluation and project expenses are presented as minesite if it supports current mine operations and project if it relates to future projects. Refer to page 38 of Barricks fourth quarter MD&A.
7 | Capital expenditures |
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and are not related to current production. Significant projects in the current year are Crossroads, the Cortez Range Front declines, Goldrush, and the Deep South Expansion at Barrick Nevada and construction of the third shaft at Turquoise Ridge. Refer to page 37 of Barricks fourth quarter MD&A.
8 | Rehabilitation - accretion and amortization |
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provisions of our gold operations, split between operating and non-operating sites.
9 | Non-controlling interest and copper operations |
Removes general & administrative costs related to non-controlling interests and copper based on a percentage allocation of revenue. Also removes exploration, evaluation and project costs, rehabilitation costs and capital expenditures incurred by our copper sites and the non-controlling interest of our Acacia and Pueblo Viejo operating segments and South Arturo at Barrick Nevada. Figures remove the impact of Pierina, which is mining incidental ounces as it enters closure. The impact is summarized as the following:
($ millions) | For the years ended December 31 | For the three months ended December 31 |
||||||||||||||||||
Non-controlling interest, copper operations and other
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
2018
|
|
|
2017
|
| |||||
General & administrative costs |
($104) | ($21) | ($36) | ($36) | ($8) | |||||||||||||||
Minesite exploration and evaluation costs |
(3) | (12) | (9) | (2) | 1 | |||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
(6) | (10) | (9) | (2) | (2) | |||||||||||||||
Minesite sustaining capital expenditures |
(261) | (230) | (233) | (78) | (65) | |||||||||||||||
All-in sustaining costs total
|
|
($374)
|
|
|
($273)
|
|
|
($287)
|
|
|
($118)
|
|
|
($74)
|
| |||||
Project exploration and evaluation and project costs |
(16) | (17) | (12) | (3) | (8) | |||||||||||||||
Project capital expenditures |
(5) | (4) | (30) | (2) | (1) | |||||||||||||||
All-in costs total
|
|
($21)
|
|
|
($21)
|
|
|
($42)
|
|
|
($5)
|
|
|
($9)
|
|
10 | Ounces sold - equity basis |
Figures remove the impact of Pierina, which is mining incidental ounces as it enters closure.
11 | Cost of sales per ounce |
Figures remove the cost of sales impact of Pierina of $32 million and $116 million, respectively, for the three months and year ended December 31, 2018 (2017: $55 million and $174 million, respectively; 2016: $82 million), which is mining incidental ounces as it enters closure. Cost of sales per ounce excludes non-controlling interest related to gold production. Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and 40% South Arturo from cost of sales), divided by attributable gold ounces sold.
12 | Per ounce figures |
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding.
13 | Co-product costs per ounce |
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of by-product credits of our gold production (net of non-controlling interest) calculated as:
($ millions) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
By-product credits |
$131 | $135 | $184 | $26 | $30 | |||||||||||||||
Non-controlling interest |
(45) | (30) | (53) | (10) | (6) | |||||||||||||||
By-product credits (net of non-controlling interest) |
$86 | $105 | $131 | $16 | $24 |
BARRICK YEAR-END 2018 |
10 | PRESS RELEASE |
Endnote 4
C1 cash costs per pound and All-in sustaining costs per pound are non-GAAP financial performance measures. C1 cash costs per pound is based on cost of sales but excludes the impact of depreciation and royalties and includes treatment and refinement charges. All-in sustaining costs per pound begins with C1 cash costs per pound and adds further costs which reflect the additional costs of operating a mine, primarily sustaining capital expenditures, general & administrative costs and royalties. Barrick believes that the use of C1 cash costs per pound and all-in sustaining costs per pound will assist investors, analysts, and other stakeholders in understanding the costs associated with producing copper, understanding the economics of copper mining, assessing our operating performance, and also our ability to generate free cash flow from current operations and to generate free cash flow on an overall Company basis. C1 cash costs per pound and All-in sustaining costs per pound are intended to provide additional information only, do not have any standardized meaning under IFRS, and may not be comparable to similar measures of performance presented by other companies. These measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Further details on these non-GAAP measures are provided in the MD&A accompanying Barricks financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Copper Cost of Sales to C1 cash costs and All-in sustaining costs, including on a per pound basis
($ millions, except per pound information in dollars) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Cost of sales |
$558 | $399 | $319 | $210 | $107 | |||||||||||||||
Depreciation/amortization |
(170 | ) | (83 | ) | (45 | ) | (84 | ) | (24 | ) | ||||||||||
Treatment and refinement charges |
144 | 157 | 167 | 41 | 41 | |||||||||||||||
Cash cost of sales applicable to equity method investments |
281 | 245 | 203 | 78 | 75 | |||||||||||||||
Less: royalties and production taxes |
(44 | ) | (38 | ) | (41 | ) | (15 | ) | (11 | ) | ||||||||||
By-product credits |
(6 | ) | (5 | ) | | (2 | ) | (1 | ) | |||||||||||
Other |
(11 | ) | | | (11 | ) | | |||||||||||||
C1 cash cost of sales
|
|
$752
|
|
|
$675
|
|
|
$603
|
|
|
$217
|
|
|
$187
|
| |||||
General & administrative costs |
28 | 12 | 14 | 5 | 3 | |||||||||||||||
Rehabilitation - accretion and amortization |
16 | 12 | 7 | 3 | 3 | |||||||||||||||
Royalties and production taxes |
44 | 38 | 41 | 15 | 11 | |||||||||||||||
Minesite exploration and evaluation costs |
4 | 6 | | 2 | 1 | |||||||||||||||
Minesite sustaining capital expenditures |
220 | 204 | 169 | 67 | 67 | |||||||||||||||
Inventory write-downs |
11 | | | 11 | | |||||||||||||||
All-in sustaining costs
|
|
$1,075
|
|
|
$947
|
|
|
$834
|
|
|
$320
|
|
|
$272
|
| |||||
Pounds sold - consolidated basis (millions pounds) |
382 | 405 | 405 | 109 | 107 | |||||||||||||||
Cost of sales per pound1,2 |
$2.40 | $1.77 | $1.41 | $2.85 | $1.79 | |||||||||||||||
C1 cash cost per pound1 |
$1.97 | $1.66 | $1.49 | $1.98 | $1.72 | |||||||||||||||
All-in sustaining costs per pound1 |
$2.82 | $2.34 | $2.05 | $2.95 | $2.51 |
1. | 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. |
2. | Cost of sales per pound related to copper is calculated using cost of sales including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments). |
Endnote 5
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
BARRICK YEAR-END 2018 |
11 | PRESS RELEASE |
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 Barricks financial statements filed from time to time on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Reconciliation of Net Earnings to Net Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings per Share
($ millions, except per share amounts in dollars) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Net earnings (loss) attributable to equity holders of the Company |
($ | 1,545 | ) | $ | 1,438 | $ | 655 | ($ | 1,197 | ) | ($ | 314 | ) | |||||||
Impairment charges (reversals) related to long-lived assets1 |
900 | (212 | ) | (250 | ) | 408 | 916 | |||||||||||||
Acquisition/disposition (gains)/losses2 |
(68 | ) | (911 | ) | 42 | (19 | ) | (29 | ) | |||||||||||
Foreign currency translation (gains)/losses |
136 | 72 | 199 | (16 | ) | 12 | ||||||||||||||
Significant tax adjustments3 |
742 | 244 | 43 | 719 | 61 | |||||||||||||||
Other expense adjustments4 |
366 | 178 | 114 | 261 | 17 | |||||||||||||||
Unrealized gains/(losses) on non-hedge derivative instruments |
1 | (1 | ) | (32 | ) | 1 | 5 | |||||||||||||
Tax effect and non-controlling interest5 |
(123 | ) | 68 | 47 | (88 | ) | (415 | ) | ||||||||||||
Adjusted net earnings |
$409 | $876 | $818 | $69 | $253 | |||||||||||||||
Net earnings (loss) per share6 |
(1.32 | ) | 1.23 | 0.56 | (1.02 | ) | (0.27 | ) | ||||||||||||
Adjusted net earnings per share6 |
0.35 | 0.75 | 0.70 | 0.06 | 0.22 |
1. | Net impairment charges for the current year primarily relate to non-current asset impairments at Lagunas Norte during the third quarter of 2018, and non-current asset and goodwill impairments at Veladero during the fourth quarter of 2018. |
2. | Disposition gains for the current year primarily relate to the gain on the sale of a non-core royalty asset at Acacia. |
3. | Significant tax adjustments for the current year primarily relate to the de-recognition of our Canadian and Peruvian deferred tax assets. |
4. | Other expense adjustments for the current year primarily relate to the inventory impairment charge at Lagunas Norte, the write-off of a Western Australia long-term stamp duty receivable, costs associated with the merger with Randgold, debt extinguishment costs, and the settlement of a dispute regarding a historical supplier contract acquired as part of the Equinox acquisition in 2011. |
5. | Tax effect and non-controlling interest for the current year primarily relates to the impairment charges related to long-lived assets. |
6. | Calculated using weighted average number of shares outstanding under the basic method of earnings per share. |
Endnote 6
Includes $146 million cash primarily held at Acacia, which may not be readily deployed.
Endnote 7
Total reportable incident frequency rate (TRIFR) is a ratio calculated as follows: number of reportable injuries x 200,000 hours divided by the total number of hours worked. Reportable injuries include fatalities, lost time injuries, restricted duty injuries, and medically treated injuries.
Endnote 8
Estimated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. Estimates are as of December 31, 2018, unless otherwise noted. Proven reserves of 344.6 million tonnes grading 2.15 g/t, representing 23.9 million ounces of gold, and 169.2 million tonnes grading 0.59%, representing 2.195 billion pounds of copper. Probable reserves of 0.9 billion tonnes grading 1.33 g/t, representing 38.4 million ounces of gold, and 452.7 million tonnes grading 0.55%, representing 5.454 billion pounds of copper. Measured resources of 405.3 million tonnes grading 0.93 g/t, representing 12.2 million ounces of gold, and 129.7 million tonnes grading 0.36%, representing 1.034 billion pounds of copper. Indicated resources of 1.6 billion tonnes grading 1.52 g/t, representing 76.7 million ounces of gold, and 585.9 million tonnes grading 0.49%, representing 6.367 billion pounds of copper. Inferred resources of 852.9 million tonnes grading 1.22 g/t, representing 33.5 million ounces of gold, and 141.3 million tonnes grading 0.42%, representing 1.323 billion pounds of copper. Pascua-Lama measured resources of 42.8 million tonnes grading 1.86 g/t representing 2.6 million ounces of gold, and indicated resources of 391.7 million tonnes grading 1.49 g/t, representing
BARRICK YEAR-END 2018 |
12 | PRESS RELEASE |
18.8 million ounces of gold. Goldrush probable reserves of 6.4 million tonnes grading 9.69 g/t representing 2.0 million ounces of gold, indicated resources of 30.9 million tonnes grading 9.4 g/t representing 9.4 million ounces of gold, and inferred resources of 11.9 million tonnes grading 9.3 g/t representing 3.6 million ounces of gold. Donlin Gold measured resources of 3.9 million tonnes grading 2.52 g/t representing 0.3 million ounces of gold, indicated resources of 266.8 million tonnes grading 2.24 g/t representing 19.2 million ounces of gold, and inferred resources of 46.1 million tonnes grading 2.02 g/t representing 3.0 million ounces of gold. Norte Abierto (formerly known as the Cerro Casale project, comprised of the Cerro Casale, Caspiche and Luciano deposits) proven reserves of 114.9 million tonnes grading 0.65 g/t (50 percent basis) representing 2.4 million ounces of gold (50 percent basis), and probable reserves of 484.0 million tonnes grading 0.59 g/t (50 percent basis), representing 9.2 million ounces of gold (50 percent basis). Norte Abierto measured resources of 321.5 million tonnes grading 0.56 g/t (50 percent basis) representing 5.8 million ounces of gold (50 percent basis, indicated resources of 528.6 million tonnes grading 0.44 g/t (50 percent basis) representing 7.5 million ounces of gold (50 percent basis), and inferred resources of 346.8 million tonnes grading 0.35 g/t (50 percent basis) representing 3.9 million ounces of gold (50 percent basis). Alturas inferred resources of 261.3 million tonnes grading 1.06 g/t representing 8.9 million ounces of gold. Complete mineral reserve and mineral resource data for all mines and projects referenced in this press release, including tonnes, grades, and ounces, can be found on pages 80-85 of Barricks Fourth Quarter and Year-End 2018 Report.
Endnote 9
Based on most-recently reported 2018 all-in sustaining cost guidance for Agnico Eagle Mines Limited and Newmont Mining Corporation, 2018 preliminary all-in sustaining cost results for Goldcorp Inc., and calendar year 2018 all-in sustaining cost results for Newcrest Mining Limited. These senior gold peers may calculate all-in sustaining costs in a manner different than Barrick.
Endnote 10
Realized gold price is a 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 61 to 76 of our fourth quarter MD&A. Includes Acacia on a 63.9% basis, Pueblo Viejo on a 60% basis, South Arturo on a 60% basis, and Veladero on a 100% basis up to June 30, 2017 and a 50% basis thereafter, which reflects our equity share of production and sales.
Endnote 11
Attributable capital expenditures are presented on the same basis as guidance, which includes our 60% share of Pueblo Viejo and South Arturo, our 80% share of Loulo Gounkoto, our 89.7% share of Tongon, our 63.9% share of Acacia and our 50% share of Zaldívar and Jabal Sayid.
Endnote 12
For additional detail regarding Pueblo Viejo, see the Technical Report on the Pueblo Viejo Mine, Sanchez Ramirez Province, Dominican Republic, dated March 19, 2018, and filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov on March 23, 2018.
Endnote 13
Senior gold peers means the following companies: Agnico Eagle Mines Limited, Goldcorp Inc., Newcrest Mining Limited, and Newmont Mining Corporation.
Endnote 14
A Tier One Gold Asset is a mine with a stated life in excess of 10 years with 2017 production of at least 500,000 ounces of gold and 2017 total cash cost per ounce within the bottom half of Wood Mackenzies cost curve tools (excluding state-owned and privately-owned mines). For purposes of determining Tier One Gold Assets, Total cash cost per ounce is based on data from Wood Mackenzie as of August 31, 2018. The Wood Mackenzie calculation of Total cash cost per ounce may not be identical to the manner in which Barrick calculates comparable measures. Total cash cost per ounce is a non-GAAP financial performance measure with no standardized meaning under IFRS and therefore
BARRICK YEAR-END 2018 |
13 | PRESS RELEASE |
may not be comparable to similar measures presented by other issuers. Total cash cost per ounce should not be considered by investors as an alternative to operating profit, net profit attributable to shareholders, or to other IFRS measures. Wood Mackenzie is an independent third party research and consultancy firm that provides data for, among others, the metals and mining industry. Wood Mackenzie does not have any affiliation to Barrick.
Endnote 15
Lowest total cash cost is based on data from Wood Mackenzie as of August 31, 2018. Total cash cost is a non-GAAP financial performance measure with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. Financial comparisons between the post-merger Barrick and its senior gold peers are made on the basis of the data presented by Wood Mackenzie which may not be calculated in the same manner as Barrick calculates comparable measures. Barrick believes that total cash cost is a useful indicator for investors and management of a mining companys performance as it provides an indication of a companys profitability and efficiency, the trends in cash costs as the companys operations mature, and a benchmark of performance to allow for comparison against other companies.
Endnote 16
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.
BARRICK YEAR-END 2018 |
14 | PRESS RELEASE |
Key Statistics
Barrick Gold Corporation (in United States dollars) |
Three months ended December 31 | Twelve months ended December 31 | ||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Financial Results (millions) |
||||||||||||||||
Revenues |
$1,904 | $2,228 | $7,243 | $8,374 | ||||||||||||
Cost of sales |
1,577 | 1,411 | 5,220 | 5,300 | ||||||||||||
Net (loss) earnings1 |
(1,197 | ) | (314 | ) | (1,545 | ) | 1,438 | |||||||||
Adjusted net earnings2 |
69 | 253 | 409 | 876 | ||||||||||||
Adjusted EBITDA2 |
806 | 1,083 | 3,080 | 4,115 | ||||||||||||
Total capital expenditures - sustaining3 |
276 | 279 | 975 | 1,109 | ||||||||||||
Total project capital expenditures3 |
127 | 81 | 459 | 273 | ||||||||||||
Net cash provided by operating activities |
411 | 590 | 1,765 | 2,065 | ||||||||||||
Free cash flow2 |
37 | 240 | 365 | 669 | ||||||||||||
Per share data (dollars) |
||||||||||||||||
Net earnings (loss) (basic and diluted) |
(1.02 | ) | (0.27 | ) | (1.32 | ) | 1.23 | |||||||||
Adjusted net earnings (basic)2 |
$0.06 | $0.22 | $0.35 | $0.75 | ||||||||||||
Weighted average basic common shares (millions) |
1,168 | 1,166 | 1,167 | 1,166 | ||||||||||||
Weighted average diluted common shares (millions) |
1,168 | 1,166 | 1,167 | 1,166 | ||||||||||||
Operating Results |
||||||||||||||||
Gold production (thousands of ounces)4 |
1,262 | 1,339 | 4,527 | 5,323 | ||||||||||||
Gold sold (thousands of ounces)4 |
1,232 | 1,372 | 4,544 | 5,302 | ||||||||||||
Per ounce data |
||||||||||||||||
Average spot gold price |
$1,226 | $1,275 | $1,268 | $1,257 | ||||||||||||
Average realized gold price2,4 |
1,223 | 1,280 | 1,267 | 1,258 | ||||||||||||
Cost of sales (Barricks share)4,5 |
980 | 801 | 892 | 794 | ||||||||||||
All-in sustaining costs2,4 |
788 | 756 | 806 | 750 | ||||||||||||
Cash costs2,4 |
$588 | $545 | $588 | $526 | ||||||||||||
Copper production (millions of pounds)6 |
109 | 99 | 383 | 413 | ||||||||||||
Copper sold (millions of pounds)6 |
109 | 107 | 382 | 405 | ||||||||||||
Per pound data |
||||||||||||||||
Average spot copper price |
$2.80 | $3.09 | $2.96 | $2.80 | ||||||||||||
Average realized copper price2,6 |
2.76 | 3.34 | 2.88 | 2.95 | ||||||||||||
Cost of sales (Barricks share)6,7 |
2.85 | 1.79 | 2.40 | 1.77 | ||||||||||||
C1 cash costs2,6 |
1.98 | 1.72 | 1.97 | 1.66 | ||||||||||||
All-in sustaining costs2,6 |
$2.95 | $2.51 | $2.82 | $2.34 | ||||||||||||
As at December 31 | As at December 31 | |||||||||||||||
2018 | 2017 | |||||||||||||||
Financial Position (millions) |
||||||||||||||||
Cash and equivalents |
$1,571 | $2,234 | ||||||||||||||
Working capital (excluding cash) |
$1,055 | $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 61 to 76 of our fourth quarter MD&A. |
3 | Amounts presented on a consolidated accrued basis. Project capital expenditures are included in our calculation of all-in costs, but not included in our calculation of all-in sustaining costs. |
4 | Includes Acacia on a 63.9% basis, Pueblo Viejo on a 60% basis, South Arturo on a 60% basis, and Veladero on a 100% basis up to June 30, 2017 and on a 50% basis thereafter, which reflects our equity share of production and sales. |
5 | Cost of sales per ounce (Barricks 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, both on a 50% basis, which reflects our equity share of production, and Lumwana. |
7 | Cost of sales per pound (Barricks 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. |
BARRICK YEAR-END 2018 |
15 | KEY STATISTICS |
Production and Cost Summary
Three months ended December 31 | Twelve months ended December 31 | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Gold Production (equity ounces (000s)) |
||||||||||||||||
Barrick Nevada1 |
620 | 530 | 2,100 | 2,312 | ||||||||||||
Turquoise Ridge |
74 | 64 | 268 | 211 | ||||||||||||
Pueblo Viejo2 |
166 | 182 | 581 | 650 | ||||||||||||
Veladero3 |
77 | 110 | 278 | 432 | ||||||||||||
Lagunas Norte |
50 | 113 | 245 | 387 | ||||||||||||
Acacia4 |
84 | 95 | 334 | 491 | ||||||||||||
Other Mines - Gold5 |
191 | 245 | 721 | 840 | ||||||||||||
Total |
1,262 | 1,339 | 4,527 | 5,323 | ||||||||||||
Copper Production (equity pounds (millions))6 |
109 | 99 | 383 | 413 | ||||||||||||
Gold Cost of Sales per ounce ($/oz)7 (Barricks share) |
||||||||||||||||
Barrick Nevada1 |
$792 | $794 | $818 | $792 | ||||||||||||
Turquoise Ridge |
802 | 672 | 783 | 715 | ||||||||||||
Pueblo Viejo2 |
686 | 795 | 750 | 699 | ||||||||||||
Veladero3 |
1,352 | 953 | 1,112 | 897 | ||||||||||||
Lagunas Norte |
4,186 | 659 | 1,342 | 617 | ||||||||||||
Acacia4 |
852 | 774 | 876 | 791 | ||||||||||||
Total |
$980 | $801 | $892 | $794 | ||||||||||||
Copper Cost of Sales per pound ($/lb)8 |
$2.85 | $1.79 | $2.40 | $1.77 | ||||||||||||
Gold Cash Costs9 per ounce ($/oz) (Barricks share) |
||||||||||||||||
Barrick Nevada1 |
$479 | $506 | $507 | $455 | ||||||||||||
Turquoise Ridge |
701 | 550 | 678 | 589 | ||||||||||||
Pueblo Viejo2 |
425 | 388 | 465 | 405 | ||||||||||||
Veladero3 |
823 | 609 | 629 | 598 | ||||||||||||
Lagunas Norte |
607 | 461 | 448 | 405 | ||||||||||||
Acacia4 |
651 | 581 | 680 | 587 | ||||||||||||
Total |
$588 | $545 | $588 | $526 | ||||||||||||
Copper C1 Cash Costs6,9 |
$1.98 | $1.72 | $1.97 | $1.66 | ||||||||||||
Gold All-in Sustaining Costs9 ($/oz) |
||||||||||||||||
Barrick Nevada1 |
$591 | $696 | $649 | $624 | ||||||||||||
Turquoise Ridge |
798 | 638 | 756 | 733 | ||||||||||||
Pueblo Viejo2 |
559 | 498 | 623 | 525 | ||||||||||||
Veladero3 |
1,648 | 950 | 1,154 | 987 | ||||||||||||
Lagunas Norte |
796 | 547 | 636 | 483 | ||||||||||||
Acacia4 |
857 | 779 | 905 | 875 | ||||||||||||
Total |
$788 | $756 | $806 | $750 | ||||||||||||
Copper All-in Sustaining Costs ($/lb)6,9 |
$2.95 | $2.51 | $2.82 | $2.34 |
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 100% basis up to June 30, 2017 and a 50% basis thereafter, which reflects our equity share during such periods. |
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, Jabal Sayid on a 50% basis and Zaldívar on a 50% basis, which reflects our equity share. |
7 | Cost of sales per ounce (Barricks 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 (Barricks 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, cash costs, and C1 cash costs 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 61 to 76 of our fourth quarter MD&A. |
BARRICK YEAR-END 2018 |
16 | PRODUCTION AND COST SUMMARY |
MANAGEMENTS DISCUSSION AND ANALYSIS (MD&A)
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
BARRICK YEAR-END 2018 |
17 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
18 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
19 | MANAGEMENTS DISCUSSION AND ANALYSIS |
OVERVIEW
BARRICK YEAR-END 2018 |
20 | MANAGEMENTS DISCUSSION AND ANALYSIS |
FULL YEAR FINANCIAL AND OPERATING HIGHLIGHTS
1 | 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 61 to 76 of this MD&A. |
2 | 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 sold. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments). |
3 | Outlook for 2019 includes Loulo-Gounkoto on an 80% basis, Kibali on a 45% basis, Tongon on an 89.7% basis, and Morila on a 40% basis, which were acquired as a result of the merger with Randgold on January 1, 2019. |
BARRICK YEAR-END 2018 |
21 | MANAGEMENTS DISCUSSION AND ANALYSIS |
($ millions, except per share amounts in dollars) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Net (loss) earnings attributable to equity holders of the Company |
($1,545 | ) | $1,438 | $655 | ($1,197 | ) | ($314 | ) | ||||||||||||
Per share (dollars)1 |
(1.32 | ) | 1.23 | 0.56 | (1.02 | ) | (0.27 | ) | ||||||||||||
Adjusted net earnings2 |
409 | 876 | 818 | 69 | 253 | |||||||||||||||
Per share (dollars)1,2 |
0.35 | 0.75 | 0.70 | 0.06 | 0.22 | |||||||||||||||
Operating cash flow |
1,765 | 2,065 | 2,640 | 411 | 590 | |||||||||||||||
Free cash flow2 |
$365 | $669 | $1,514 | $37 | $240 |
1 | Calculated using weighted average number of shares outstanding under the basic method of earnings per share of 1,167 million shares in 2018 (2017: 1,166 million shares; 2016: 1,165 million shares). |
2 | Adjusted net earnings, adjusted net earnings per share, and free cash flow are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
22 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Net Earnings (Loss), Adjusted Net Earnings1, Operating Cash Flow and Free Cash Flow1
1 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 61 to 76 of this MD&A. |
2 | Estimated impact of foreign exchange. |
Net earnings attributable to equity holders of Barrick (net earnings) for 2018 was a net loss of $1,545 million compared with net earnings of $1,438 million in the prior year. This significant decrease in net earnings was primarily due to net impairment charges of $900 million ($799 million net of tax and non-controlling interest), primarily relating to impairments of $405 million (no tax impact) of non-current assets at Lagunas Norte, and $246 million ($160 million net of tax) of non-current assets and $154 million (no tax impact) of goodwill at the Veladero mine. This was combined with the de-recognition of deferred tax assets of $814 million, and inventory impairment at Lagunas Norte of $166 million. After adjusting for items that are not indicative of future operating earnings, adjusted net earnings1 of $409 million in 2018 were $467 million lower than the prior year primarily due to the impact of lower grades and recoveries across most operations as disclosed in previous guidance combined with higher direct mining costs and the divestment of 50% of the Veladero mine on June 30, 2017. The increase in direct mining costs was mainly attributable to higher energy prices and consumption. This was further impacted by lower throughput at Acacia as a result of reduced operations at Bulyanhulu, lower tonnage processed at Lagunas Norte, and higher government imposts at Veladero. This was partially offset by lower income tax expense related to lower earnings and sales volumes, and lower depreciation. Earnings were also positively impacted by favorable foreign exchange movements and higher realized gold prices1 of $1,267 per ounce compared to $1,258 per ounce in the prior year.
Significant adjusting items to net earnings (pre-tax and non-controlling interest effects) in 2018 include:
| $900 million ($799 million net of tax and non-controlling interest) in net impairment charges primarily relating to Veladero and Lagunas Norte; |
| $742 million in significant tax adjustments primarily relating to the de-recognition of deferred tax assets of $814 million, partially offset by a deferred tax recovery of $107 million on United States withholding taxes; |
| Additional adjustments relating to the inventory impairment at Lagunas Norte of $166 million, a write-off of a Western Australia long-term stamp duty tax receivable of $43 million, and costs associated with the merger with Randgold of $37 million; partially offset by |
| $68 million ($46 million net of tax and non-controlling interest) in disposition gains mainly relating to the sale of a non-core royalty asset at Acacia. |
Refer to page 62 for a full list of reconciling items between net earnings and adjusted net earnings1 for the current and prior year.
BARRICK YEAR-END 2018 |
23 | MANAGEMENTS DISCUSSION AND ANALYSIS |
1 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 61 to 76 of this MD&A. |
In 2018, we generated $1,765 million in operating cash flow, compared to $2,065 million of operating cash flow in the prior year. The decrease of $300 million was due to the impact of lower grades and recoveries across most operations as disclosed in previous guidance combined with higher direct mining costs and the divestment of 50% of the Veladero mine on June 30, 2017. The increase in direct mining costs was mainly attributable to higher energy prices and consumption. This was further impacted by lower throughput at Acacia as a result of reduced operations at Bulyanhulu, lower tonnage processed at Lagunas Norte, and higher government imposts at Veladero. This was partially offset by a favorable movement in working capital, mainly as a result of increased drawdown of inventory and the timing of payments and changes in other current assets and liabilities. Operating cash flow was also positively affected by lower cash taxes paid as a result of lower earnings and sales volumes, and higher realized gold prices1 of $1,267 per ounce compared to $1,258 per ounce in the prior year.
Free cash flow1 for 2018 was $365 million, compared to $669 million in the prior year, reflecting lower operating cash flows. Capital expenditures were in line with the prior year, as an increase in project capital expenditures was offset by a decrease in minesite sustaining capital expenditures. The increase in project capital expenditures is primarily a result of greater spending incurred at Crossroads, the Cortez Range Front declines, the Goldrush exploration declines, the Deep South Expansion at Barrick Nevada, and the construction of the third shaft at Turquoise Ridge. Minesite sustaining capital expenditures decreased mainly due to the completion of several initiatives occurring in the prior year, including the Goldstrike underground cooling and ventilation project; digitization initiatives; the autoclave thiosulfate water treatment plant conversion at the Goldstrike autoclaves; the optimization of development sequencing at Turquoise Ridge; and the construction of phases 4B and 5B of the leach pad expansion at Veladero.
BARRICK YEAR-END 2018 |
24 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
25 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
26 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
27 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Key Business Developments
BARRICK YEAR-END 2018 |
28 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Outlook for 2019
Operating Unit Guidance
Our 2018 gold and copper production, cost of sales, cash costs1, all-in sustaining costs1 and 2019 forecast gold and copper production, cost of sales, cash costs1 and all-in sustaining costs1 ranges by operating unit are as follows:
Operating Unit
|
2018
|
2018 cost of
|
2018
|
2018 all-in sustaining ($/oz)
|
2019 forecast
|
2019 forecast cost of sales1 ($/oz)
|
2019 forecast cash costs2 ($/oz)
|
2019 forecast sustaining
| ||||||||
Gold |
||||||||||||||||
Barrick Nevada3 |
2,100 | $818 | $507 | $649 | 1,750 - 1,900 | $920 - $970 | $640 - $690 | $850 - $900 | ||||||||
Pueblo Viejo (60%) |
581 | 750 | 465 | 623 | 550 - 600 | 780 - 830 | 465 - 510 | 610 - 650 | ||||||||
Loulo-Gounkoto (80%)4,5 |
520 - 570 | 800 - 850 | 575 - 625 | 810 - 850 | ||||||||||||
Kibali (45%)4,5 |
330 - 350 | 890 - 940 | 555 - 605 | 670 - 730 | ||||||||||||
Kalgoorlie (50%) |
314 | 899 | 732 | 857 | 280 - 300 | 920 - 970 | 740 - 790 | 920 - 960 | ||||||||
Turquoise Ridge (75%) |
268 | 783 | 678 | 756 | 270 - 310 | 655 - 705 | 550 - 600 | 680 - 730 | ||||||||
Tongon (89.7%)4,5 |
250 - 270 | 945 - 995 | 710 - 760 | 780 - 820 | ||||||||||||
Porgera (47.5%) |
204 | 996 | 796 | 1,083 | 240 - 260 | 980 - 1,030 | 800 - 850 | 985 - 1,025 | ||||||||
Veladero (50%) |
278 | 1,112 | 629 | 1,154 | 230 - 250 | 1,250 - 1,350 | 770 - 820 | 1,150 - 1,250 | ||||||||
Hemlo |
171 | 1,157 | 1,046 | 1,318 | 200 - 220 | 890 - 940 | 765 - 815 | 1,100 - 1,200 | ||||||||
Acacia (63.9%) |
334 | 876 | 680 | 905 | 320 - 350 | 920 - 970 | 665 - 710 | 860 - 920 | ||||||||
Other Sites6
|
277
|
1,387
|
590
|
778
|
190 - 250
|
1,075 - 1,165
|
895 - 945
|
1,055 - 1,115
| ||||||||
Total Consolidated Barrick5,7,8,9 |
4,527
|
$892
|
$588
|
$806
|
5,100 - 5,600
|
$880 - $940
|
$650 - $700
|
$870 - $920
| ||||||||
2018
|
2018 cost of
|
2018 C1 costs2 ($/lb)
|
2018 all-in ($/lb)
|
2019 forecast
|
2019 forecast cost of sales1
|
2019 forecast
|
2019 forecast sustaining
| |||||||||
Copper |
||||||||||||||||
Lumwana |
224 | $2.51 | $2.08 | $3.08 | 210 - 240 | $2.25 - $2.50 | $1.80 - $2.10 | $2.75 - $3.15 | ||||||||
Zaldívar (50%) |
104 | 2.55 | 1.97 | 2.47 | 120 - 130 | 2.40 - 2.70 | 1.65 - 1.85 | 2.00 - 2.20 | ||||||||
Jabal Sayid (50%) |
55 | 1.73 | 1.53 | 1.92 | 45 - 60 | 2.00 - 2.30 | 1.60 - 1.90 | 1.60 - 1.90 | ||||||||
Total Copper9 |
383
|
$2.40
|
$1.97
|
$2.82
|
375 - 430
|
$2.30 - $2.70
|
$1.70 - $2.00
|
$2.40 - $2.90
|
1 | 2018 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 sold. 2019 cost of sales applicable to gold per ounce also removes the non-controlling interest of 20% Loulo-Gounkoto and 10.3% of Tongon from cost of sales. 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 sold (including our proportionate share of copper pounds sold from our equity method investments). |
2 | Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 61 to 76 of this MD&A. |
3 | Reflects production and sales from Goldstrike, Cortez, and South Arturo on a 60% basis, which reflects our equity share. |
4 | These sites were acquired as a result of the merger with Randgold on January 1, 2019, and therefore no 2018 figures are provided. |
5 | 2019 forecast cost of sales does not include the impact of the Randgold purchase price allocation. |
6 | Other sites for 2018 includes Lagunas Norte and Golden Sunlight. 2019 also includes Morila on a 40% basis, which was acquired as a result of the merger with Randgold on January 1, 2019. |
7 | Total gold cash costs and all-in sustaining costs per ounce include the impact of hedges and/or costs allocated to non-operating sites. |
8 | Operating unit guidance ranges reflect expectations at each individual operating unit, and may not add up to the company-wide guidance range total. The company-wide 2018 results and guidance ranges exclude Pierina which is mining incidental ounces as it enters closure. |
9 | Includes corporate administration costs. |
BARRICK YEAR-END 2018 |
29 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Operating Unit, Consolidated Expense and Capital Guidance
Our 2018 gold and copper production, cost of sales, cash costs1, all-in sustaining costs1, consolidated expenses and capital expenditures and forecast gold and copper production, cost of sales, cash costs1, all-in sustaining costs1, consolidated expenses and capital expenditures for 2019 are as follows:
($ millions, except per ounce/pound data)
|
2018 Original Guidance
|
Q3 2018 Guidance
|
2018 Actual
|
2019 Guidance
|
||||||||||||
Gold production and costs |
||||||||||||||||
Production (millions of ounces) |
4.50 - 5.00 | 4.50 - 5.00 | 4.53 | 5.10 - 5.60 | ||||||||||||
Gold unit production costs |
||||||||||||||||
Cost of sales - gold ($ per oz)2 |
810 - 850 | 810 - 850 | 892 | 880 - 940 | ||||||||||||
Cash costs ($ per oz)1 |
540 - 575 | 540 - 575 | 588 | 650 - 700 | ||||||||||||
Depreciation ($ per oz)2 |
240 - 260 | 240 - 260 | 248 | 215 - 235 | ||||||||||||
All-in sustaining costs ($ per oz)1 |
765 - 815 | 765 - 815 | 806 | 870 - 920 | ||||||||||||
Copper production and costs |
||||||||||||||||
Production (millions of pounds) |
385 - 450 | 345 - 410 | 383 | 375 - 430 | ||||||||||||
Copper unit production costs |
||||||||||||||||
Cost of sales - copper ($ per lb) |
1.80 - 2.10 | 2.00 - 2.30 | 2.40 | 2.30 - 2.70 | ||||||||||||
C1 cash costs ($ per lb)1 |
1.55 - 1.75 | 1.80 - 2.00 | 1.97 | 1.70 - 2.00 | ||||||||||||
Depreciation ($ per lb) |
0.40 - 0.50 | 0.40 - 0.50 | 0.65 | 0.60 - 0.70 | ||||||||||||
Copper all-in sustaining costs ($ per lb)1 |
2.30 - 2.60 | 2.55 - 2.85 | 2.82 | 2.40 - 2.90 | ||||||||||||
Exploration and project expenses |
325 - 405 | 325 - 405 | 383 | 280 340 | ||||||||||||
Exploration and evaluation |
185 - 225 | 185 - 225 | 166 | 160 170 | ||||||||||||
Project expenses |
140 - 180 | 140 - 180 | 217 | 120 - 150 | ||||||||||||
General and administrative expenses |
~340 | ~300 | 265 | ~200 | ||||||||||||
Corporate administration |
~275 | ~235 | 212 | ~140 | ||||||||||||
Stock-based compensation3 |
~30 | ~30 | 27 | ~40 | ||||||||||||
Acacia4 |
~35 | ~35 | 26 | ~20 | ||||||||||||
Other expense (income) |
80 - 100 | 80 - 100 | 90 | 80 - 100 | ||||||||||||
Finance costs, net5 |
500 - 550 | 500 - 550 | 545 | 500 - 550 | ||||||||||||
Attributable capital expenditures: |
||||||||||||||||
Attributable minesite sustaining |
950 - 1,100 | 950 - 1,100 | 946 | 1,100 - 1,300 | ||||||||||||
Attributable project |
450 - 550 | 450 - 550 | 467 | 300 - 400 | ||||||||||||
Total attributable capital expenditures6 |
1,400 - 1,600 | 1,400 - 1,600 | 1,413 | 1,400 - 1,700 |
1 | Cash costs, all-in sustaining costs and C1 cash costs are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of the non-GAAP measures used in this section of the MD&A to the most directly comparable IFRS measures, please see pages 61 to 76 of this MD&A. |
2 | 2019 guidance does not include the impact of the Randgold purchase price allocation. |
3 | 2018 actual based on US$13.54 and 2019 guidance based on a three month trailing average ending December 31, 2018 of US$12.40 per share and excludes Acacia. |
4 | Acacia general and administrative expenses is substantially comprised of stock-based compensation. |
5 | 2018 actual includes a net loss on debt extinguishment of $29 million. |
6 | Attributable capital expenditures are presented on the same basis as guidance, which includes our 60% share of Pueblo Viejo and South Arturo, our 80% share of Loulo-Gounkoto, our 89.7% share of Tongon, our 63.9% share of Acacia and our 50% share of Zaldívar and Jabal Sayid. |
BARRICK YEAR-END 2018 |
30 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
31 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Outlook Assumptions and Economic Sensitivity Analysis
2019 Guidance Assumption |
Hypothetical Change |
Impact on Revenue (millions) |
Impact on Cost of Sales (millions) |
Impact on
All-in Sustaining Costs1 | ||||||
Gold revenue, net of royalties |
$1,250/oz | +/- $100/oz | +/- $535 | +/- $17 | +/- $3/oz | |||||
Copper revenue, net of royalties |
$2.75/lb | +/- $0.50/lb | +/- $201 | +/- $18 | +/- $0.04/lb |
1 | All-in sustaining costs is a non-GAAP financial performance measure with no standardized definition under IFRS. For further information and a detailed reconciliation, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
32 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
33 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
34 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
35 | MANAGEMENTS DISCUSSION AND ANALYSIS |
REVIEW OF ANNUAL FINANCIAL RESULTS
BARRICK YEAR-END 2018 |
36 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
37 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
38 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
39 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
40 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
41 | MANAGEMENTS DISCUSSION AND ANALYSIS |
FINANCIAL CONDITION REVIEW
Summary Balance Sheet and Key Financial Ratios |
|
|||||||
($ millions, except ratios and share amounts) |
As at December 31, 2018 | As at December 31, 2017 | As at December 31, 2016 | |||||
Total cash and equivalents |
$1,571 | $2,234 | $2,389 | |||||
Current assets |
2,407 | 2,450 | 2,485 | |||||
Non-current assets |
18,653 | 20,624 | 20,390 | |||||
Total Assets |
$22,631 | $25,308 | $25,264 | |||||
Current liabilities excluding short-term debt |
$1,625 | $1,688 | $1,676 | |||||
Non-current liabilities excluding long-term debt1 |
5,883 | 6,130 | 5,344 | |||||
Debt (current and long-term) |
5,738 | 6,423 | 7,931 | |||||
Total Liabilities |
$13,246 | $14,241 | $14,951 | |||||
Total shareholders equity |
$7,593 | $9,286 | $7,935 | |||||
Non-controlling interests |
1,792 | 1,781 | 2,378 | |||||
Total Equity |
$9,385 | $11,067 | $10,313 | |||||
Total common shares outstanding (millions of shares)2 |
1,168 | 1,167 | 1,166 | |||||
Key Financial Ratios: |
||||||||
Current ratio3 |
2.38:1 | 2.68:1 | 2.68:1 | |||||
Debt-to-equity4 |
0.61:1 | 0.58:1 | 0.77:1 |
1 | Non-current financial liabilities as at December 31, 2018 were $6,201 million (2017: $6,844 million; 2016: $8,002 million). |
2 | Total common shares outstanding do not include 0.8 million stock options. |
3 | Represents current assets (excluding assets held-for-sale) divided by current liabilities (including short-term debt and excluding liabilities held-for-sale) as at December 31, 2018, December 31, 2017 and December 31, 2016. |
4 | Represents debt divided by total shareholders equity (including minority interest) as at December 31, 2018, December 31, 2017, and December 31, 2016. |
BARRICK YEAR-END 2018 |
42 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
43 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Summary of Financial Instruments1
As at December 31, 2018 |
||||||||||||
Financial Instrument |
Principal/Notional Amount | Associated Risks | ||||||||||
● Interest rate
| ||||||||||||
Cash and equivalents |
$1,571 | million | ● Credit | |||||||||
● Credit
| ||||||||||||
Accounts receivable |
$248 | million | ● Market | |||||||||
● Market
| ||||||||||||
Other investments |
$209 | million | ● Liquidity | |||||||||
Accounts payable |
$1,101 | million | ● Liquidity | |||||||||
Debt |
$5,767 | million | ● Interest rate | |||||||||
Restricted share units |
$39 | million | ● Market | |||||||||
Deferred share units |
$11 | million | ● Market | |||||||||
Derivative instruments - currency contracts |
PGK | 23 | million | ● Market/liquidity | ||||||||
Derivative instruments - interest rate contracts |
|
Receive float interest rate swaps |
|
$42 | million | ● Market/liquidity |
1 | Refer to note 25 to the Financial Statements for more information regarding financial instruments. |
OPERATING SEGMENTS PERFORMANCE
BARRICK YEAR-END 2018 |
44 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Barrick Nevada1, Nevada USA
Summary of Operating and Financial Data | For the years ended December 31 | |||||||||||||||
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2016
|
| |||||
Total tonnes mined (000s) |
181,534 | 211,090 | (14)% | 192,753 | ||||||||||||
Open pit |
178,565 | 208,240 | (14)% | 189,941 | ||||||||||||
Underground |
2,969 | 2,850 | 4 % | 2,812 | ||||||||||||
Average grade (grams/tonne) |
||||||||||||||||
Open pit mined |
2.96 | 2.73 | 8 % | 1.74 | ||||||||||||
Underground mined |
9.98 | 10.58 | (6)% | 11.39 | ||||||||||||
Processed |
3.20 | 3.50 | (9)% | 2.62 | ||||||||||||
Ore tonnes processed (000s) |
25,076 | 23,894 | 5 % | 32,473 | ||||||||||||
Oxide mill |
4,527 | 4,562 | (1)% | 4,197 | ||||||||||||
Roaster |
5,104 | 4,902 | 4 % | 4,789 | ||||||||||||
Autoclave |
4,734 | 4,258 | 11 % | 3,503 | ||||||||||||
Heap leach |
10,711 | 10,172 | 5 % | 19,984 | ||||||||||||
Gold produced (000s oz) |
2,100 | 2,312 | (9)% | 2,155 | ||||||||||||
Oxide mill |
590 | 957 | (38)% | 569 | ||||||||||||
Roaster |
1,120 | 929 | 21 % | 1,115 | ||||||||||||
Autoclave |
229 | 248 | (8)% | 242 | ||||||||||||
Heap leach |
161 | 178 | (10)% | 229 | ||||||||||||
Gold sold (000s oz)
|
|
2,097
|
|
|
2,357
|
|
|
(11)%
|
|
|
2,162
|
| ||||
Segment revenue ($ millions) |
$2,655 | $2,961 | (10)% | $2,703 | ||||||||||||
Cost of sales ($ millions) |
1,715 | 1,869 | (8)% | 1,896 | ||||||||||||
Segment income ($ millions) |
890 | 1,052 | (15)% | 771 | ||||||||||||
Segment EBITDA ($ millions)2 |
1,539 | 1,845 | (17)% | 1,578 | ||||||||||||
Capital expenditures ($ millions) |
564 | 584 | (3)% | 328 | ||||||||||||
Minesite sustaining |
252 | 360 | (30)% | 217 | ||||||||||||
Project |
312 | 224 | 39 % | 111 | ||||||||||||
Cost of sales (per oz) |
818 | 792 | 3 % | 876 | ||||||||||||
Cash costs (per oz)2 |
507 | 455 | 11 % | 502 | ||||||||||||
All-in sustaining costs (per oz)2 |
649 | 624 | 4 % | 618 | ||||||||||||
All-in costs (per oz)2 |
$801 | $722 | 11 % | $678 |
1 | Includes Goldstrike, Cortez, and our 60% share of South Arturo. |
2 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
Financial Results
BARRICK YEAR-END 2018 |
45 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
46 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Turquoise Ridge (75% basis), Nevada USA
Summary of Operating and Financial Data |
For the years ended December 31 |
|
2018
|
|
|
2017
|
|
|
% Change
|
|
|
2016
|
| |||||
Underground tonnes mined (000s) |
670 | 643 | 4 % | 598 | ||||||||||||
Average grade (grams/tonne) |
||||||||||||||||
Underground mined |
15.00 | 15.45 | (3)% | 16.85 | ||||||||||||
Gold produced (000s oz) |
268 | 211 | 27 % | 266 | ||||||||||||
Gold sold (000s oz)
|
|
262
|
|
|
222
|
|
|
18 %
|
|
|
257
|
| ||||
Segment revenue ($ millions) |
$331 | $280 | 18 % | $322 | ||||||||||||
Cost of sales ($ millions) |
206 | 159 | 30 % | 155 | ||||||||||||
Segment income ($ millions) |
126 | 119 | 6 % | 166 | ||||||||||||
Segment EBITDA ($ millions)1 |
154 | 147 | 5 % | 193 | ||||||||||||
Capital expenditures ($ millions) |
62 | 36 | 72 % | 32 | ||||||||||||
Minesite sustaining |
20 | 32 | (38)% | 32 | ||||||||||||
Project |
42 | 4 | 950 % | | ||||||||||||
Cost of sales (per oz) |
783 | 715 | 10 % | 603 | ||||||||||||
Cash costs (per oz)1 |
678 | 589 | 15 % | 498 | ||||||||||||
All-in sustaining costs (per oz)1 |
756 | 733 | 3 % | 625 | ||||||||||||
All-in costs (per oz)1
|
|
$916
|
|
|
$753
|
|
|
22 %
|
|
|
$625
|
|
1 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
47 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
48 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Pueblo Viejo (60% basis)1, Dominican Republic
Summary of Operating and Financial Data |
For the years ended December 31 |
|||||||||||||||
2018 | 2017 | % Change | 2016 | |||||||||||||
Open pit tonnes mined (000s) |
24,063 | 23,430 | 3 % | 23,278 | ||||||||||||
Average grade (grams/tonne) |
||||||||||||||||
Open pit mined |
2.78 | 3.07 | (9)% | 3.13 | ||||||||||||
Processed |
4.04 | 4.57 | (12)% | 5.29 | ||||||||||||
Autoclave ore tonnes processed (000s) |
5,008 | 4,791 | 5 % | 4,527 | ||||||||||||
Gold produced (000s oz) |
581 | 650 | (11)% | 700 | ||||||||||||
Gold sold (000s oz) |
590 | 637 | (7)% | 700 | ||||||||||||
Segment revenue ($ millions) |
$798 | $850 | (6)% | $925 | ||||||||||||
Cost of sales ($ millions) |
443 | 445 | % | 395 | ||||||||||||
Segment income ($ millions) |
342 | 395 | (13)% | 528 | ||||||||||||
Segment EBITDA ($ millions)2 |
457 | 538 | (15)% | 621 | ||||||||||||
Capital expenditures ($ millions) |
87 | 69 | 26 % | 61 | ||||||||||||
Minesite sustaining |
87 | 69 | 26 % | 61 | ||||||||||||
Project |
| | % | | ||||||||||||
Cost of sales (per oz) |
750 | 699 | 7 % | 564 | ||||||||||||
Cash costs (per oz)2 |
465 | 405 | 15 % | 395 | ||||||||||||
All-in sustaining costs (per oz)2 |
623 | 525 | 19 % | 490 | ||||||||||||
All-in costs (per oz)2 |
$623 | $525 | 19 % | $490 |
1 | Pueblo Viejo is accounted for as a subsidiary with a 40% non-controlling interest. The results in the table and the discussion that follows are based on our 60% share only. |
2 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
49 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
50 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Veladero1, Argentina
Summary of Operating and Financial Data |
For the years ended December 31 | |||||||||||||||
2018 | 2017 | % Change | 2016 | |||||||||||||
Open pit tonnes mined (000s) |
35,646 | 48,376 | (26)% | 62,227 | ||||||||||||
Average grade (grams/tonne) |
||||||||||||||||
Open pit mined |
0.78 | 1.00 | (22)% | 0.82 | ||||||||||||
Processed |
0.85 | 1.02 | (17)% | 0.82 | ||||||||||||
Heap leach ore tonnes processed (000s) |
13,547 | 21,190 | (36)% | 28,028 | ||||||||||||
Gold produced (000s oz) |
278 | 432 | (36)% | 544 | ||||||||||||
Gold sold (000s oz) |
280 | 458 | (39)% | 532 | ||||||||||||
Segment revenue ($ millions) |
$366 | $591 | (38)% | $685 | ||||||||||||
Cost of sales ($ millions) |
310 | 410 | (24)% | 464 | ||||||||||||
Segment income ($ millions) |
53 | 173 | (69)% | 220 | ||||||||||||
Segment EBITDA ($ millions)2 |
174 | 292 | (40)% | 338 | ||||||||||||
Capital expenditures ($ millions) |
143 | 173 | (17)% | 95 | ||||||||||||
Minesite sustaining |
143 | 173 | (17)% | 95 | ||||||||||||
Project |
| | % | | ||||||||||||
Cost of sales (per oz) |
1,112 | 897 | 24 % | 872 | ||||||||||||
Cash costs (per oz)2 |
629 | 598 | 5 % | 582 | ||||||||||||
All-in sustaining costs (per oz)2 |
1,154 | 987 | 17 % | 769 | ||||||||||||
All-in costs (per oz)2 |
$1,154 | $987 | 17 % | $769 |
1 | We sold 50% of Veladero on June 30, 2017; therefore, these represent results on a 100% basis from January 1 to June 30, 2017 and on a 50% basis from July 1, 2017 onwards. |
2 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
51 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
52 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Lagunas Norte, Peru
Summary of Operating and Financial Data |
For the years ended December 31 | |||||||||||||||
2018 | 2017 | % Change | 2016 | |||||||||||||
Open pit tonnes mined (000s) |
31,357 | 32,859 | (5)% | 40,847 | ||||||||||||
Average grade (grams/tonne) |
||||||||||||||||
Open pit mined |
1.35 | 1.41 | (4)% | 1.18 | ||||||||||||
Processed |
0.91 | 1.05 | (13)% | 1.12 | ||||||||||||
Heap leach ore tonnes processed (000s) |
8,837 | 17,874 | (51)% | 17,253 | ||||||||||||
Gold produced (000s oz) |
245 | 387 | (37)% | 435 | ||||||||||||
Gold sold (000s oz) |
251 | 397 | (37)% | 425 | ||||||||||||
Segment revenue ($ millions) |
$332 | $514 | (35)% | $548 | ||||||||||||
Cost of sales ($ millions) |
337 | 245 | 38 % | 276 | ||||||||||||
Segment income ($ millions) |
(13 | ) | 259 | (105)% | 260 | |||||||||||
Segment EBITDA ($ millions)1 |
33 | 327 | (90)% | 356 | ||||||||||||
Capital expenditures ($ millions) |
22 | 25 | (12)% | 56 | ||||||||||||
Minesite sustaining |
20 | 20 | % | 51 | ||||||||||||
Project |
2 | 5 | (60)% | 5 | ||||||||||||
Cost of sales (per oz) |
1,342 | 617 | 118 % | 651 | ||||||||||||
Cash costs (per oz)1 |
448 | 405 | 11 % | 383 | ||||||||||||
All-in sustaining costs (per oz)1 |
636 | 483 | 32 % | 529 | ||||||||||||
All-in costs (per oz)1 |
$644 | $497 | 30 % | $540 |
1 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
53 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Acacia Mining plc (100% basis), Africa
Summary of Operating and Financial Data | For the years ended December 31 | |||||||||||||||
2018 | 2017 | % Change | 2016 | |||||||||||||
Total tonnes mined (000s) |
17,413 | 32,728 | (47)% | 39,540 | ||||||||||||
Open pit |
16,214 | 30,667 | (47)% | 37,141 | ||||||||||||
Underground |
1,199 | 2,061 | (42)% | 2,399 | ||||||||||||
Average grade (grams/tonne) |
||||||||||||||||
Open pit mined |
1.99 | 1.45 | 37% | 1.48 | ||||||||||||
Underground mined |
7.80 | 8.32 | (6)% | 9.62 | ||||||||||||
Processed1 |
2.00 | 3.00 | (33)% | 3.00 | ||||||||||||
Ore tonnes processed (000s) |
9,272 | 8,719 | 6 % | 9,818 | ||||||||||||
Gold produced (000s oz) |
522 | 768 | (32)% | 830 | ||||||||||||
Gold sold (000s oz) |
520 | 593 | (12)% | 817 | ||||||||||||
Segment revenue ($ millions) |
$664 | $751 | (12)% | $1,045 | ||||||||||||
Cost of sales ($ millions) |
456 | 469 | (3)% | 719 | ||||||||||||
Segment income ($ millions) |
171 | 191 | (10)% | 299 | ||||||||||||
Segment EBITDA ($ millions)2 |
260 | 298 | (13)% | 465 | ||||||||||||
Capital expenditures ($ millions) |
93 | 148 | (37)% | 191 | ||||||||||||
Minesite sustaining |
81 | 137 | (41)% | 190 | ||||||||||||
Project |
12 | 11 | 9 % | 1 | ||||||||||||
Cost of sales (per oz) |
876 | 791 | 11 % | 880 | ||||||||||||
Cash costs (per oz)2 |
680 | 587 | 16 % | 640 | ||||||||||||
All-in sustaining costs (per oz)2 |
905 | 875 | 3 % | 958 | ||||||||||||
All-in costs (per oz)2 |
$929 | $894 | 4 % | $960 |
1 | Includes processing of tailings retreatment. |
2 | These are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
BARRICK YEAR-END 2018 |
54 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
55 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
56 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
57 | MANAGEMENTS DISCUSSION AND ANALYSIS |
COMMITMENTS AND CONTINGENCIES
Litigation and Claims
We are currently subject to various litigation proceedings as disclosed in note 36 to the Financial Statements, and we may be involved in disputes with other parties in the future that may result in litigation. If we are unable to resolve these disputes favorably, it may have a material adverse impact on our financial condition, cash flow and results of operations.
Contractual Obligations and Commitments
In the normal course of business, we enter into contracts that give rise to commitments for future minimum payments. The following table summarizes the remaining contractual maturities of our financial liabilities and operating and capital commitments shown on an undiscounted basis:
Payments due | ||||||||||||||||||||||||||||
($ millions) | as at December 31, 20181 | |||||||||||||||||||||||||||
2024 | ||||||||||||||||||||||||||||
and | ||||||||||||||||||||||||||||
2019
|
2020
|
2021
|
2022
|
2023
|
thereafter
|
Total
|
||||||||||||||||||||||
Debt2 |
||||||||||||||||||||||||||||
Repayment of principal |
$32 | $263 | $7 | $337 | $ | $5,108 | $5,747 | |||||||||||||||||||||
Capital leases |
11 | 4 | 1 | 1 | 1 | 2 | 20 | |||||||||||||||||||||
Interest |
333 | 324 | 318 | 311 | 304 | 4,738 | 6,328 | |||||||||||||||||||||
Provisions for environmental rehabilitation3 |
112 | 109 | 183 | 157 | 166 | 2,352 | 3,079 | |||||||||||||||||||||
Operating leases |
60 | 50 | 24 | 21 | 10 | 2 | 167 | |||||||||||||||||||||
Restricted share units |
20 | 10 | 9 | | | | 39 | |||||||||||||||||||||
Pension benefits and other post-retirement benefits |
8 | 8 | 9 | 8 | 8 | 145 | 186 | |||||||||||||||||||||
Derivative liabilities4 |
3 | | | | | | 3 | |||||||||||||||||||||
Purchase obligations for supplies and consumables5 |
517 | 328 | 232 | 141 | 121 | 633 | 1,972 | |||||||||||||||||||||
Capital commitments6 |
69 | 6 | 4 | 3 | | | 82 | |||||||||||||||||||||
Social development costs7
|
|
41
|
|
|
33
|
|
|
4
|
|
|
1
|
|
|
1
|
|
|
47
|
|
|
127
|
| |||||||
Total |
$1,206 | $1,135 | $791 | $980 | $611 | $13,027 | $17,750 |
1 | Excludes payments relating to Randgold as the merger was completed on January 1, 2019. |
2 | Debt and Interest - Our debt obligations do not include any subjective acceleration clauses or other clauses that enable the holder of the debt to call for early repayment, except in the event that we breach any of the terms and conditions of the debt or for other customary events of default. We are not required to post any collateral under any debt obligations. Projected interest payments on variable rate debt were based on interest rates in effect at December 31, 2018. Interest is calculated on our long-term debt obligations using both fixed and variable rates. |
3 | Provisions for environmental rehabilitation - Amounts presented in the table represent the undiscounted uninflated future payments for the expected cost of provisions for environmental rehabilitation. |
4 | Derivative liabilities - Amounts presented in the table relate to derivative contracts disclosed under note 25C to the Financial Statements. Payments related to derivative contracts may be subject to change given variable market conditions. |
5 | Purchase obligations for supplies and consumables - Includes commitments related to new purchase obligations to secure a supply of acid, tires and cyanide for our production process. |
6 | Capital commitments - Purchase obligations for capital expenditures include only those items where binding commitments have been entered into. |
7 | Social development costs Includes a commitment of $69 million ($27.5 million in 2019, $27.5 million in 2020 and $14 million in 2024 and thereafter) related to the funding of a power transmission line in Argentina. |
BARRICK YEAR-END 2018 |
58 | MANAGEMENTS DISCUSSION AND ANALYSIS |
REVIEW OF QUARTERLY RESULTS
Quarterly Information1
2018
|
2017
|
|||||||||||||||||||||||||||||||
($ millions, except where indicated)
|
Q4
|
Q3
|
Q2
|
Q1
|
Q4
|
Q3
|
Q2
|
Q1
|
||||||||||||||||||||||||
Revenues |
$1,904 | $1,837 | $1,712 | $1,790 | $2,228 | $1,993 | $2,160 | $1,993 | ||||||||||||||||||||||||
Realized price per ounce gold2 |
1,223 | 1,216 | 1,313 | 1,332 | 1,280 | 1,274 | 1,258 | 1,220 | ||||||||||||||||||||||||
Realized price per pound copper2 |
2.76 | 2.76 | 3.11 | 2.98 | 3.34 | 3.05 | 2.60 | 2.76 | ||||||||||||||||||||||||
Cost of sales |
1,577 | 1,315 | 1,176 | 1,152 | 1,411 | 1,270 | 1,277 | 1,342 | ||||||||||||||||||||||||
Net earnings (loss) |
(1,197 | ) | (412 | ) | (94 | ) | 158 | (314 | ) | (11 | ) | 1,084 | 679 | |||||||||||||||||||
Per share (dollars)3 |
(1.02 | ) | (0.35 | ) | (0.08 | ) | 0.14 | (0.27 | ) | (0.01 | ) | 0.93 | 0.58 | |||||||||||||||||||
Adjusted net earnings2 |
69 | 89 | 81 | 170 | 253 | 200 | 261 | 162 | ||||||||||||||||||||||||
Per share (dollars)2,3 |
0.06 | 0.08 | 0.07 | 0.15 | 0.22 | 0.17 | 0.22 | 0.14 | ||||||||||||||||||||||||
Operating cash flow |
411 | 706 | 141 | 507 | 590 | 532 | 448 | 495 | ||||||||||||||||||||||||
Cash capital expenditures |
374 | 387 | 313 | 326 | 350 | 307 | 405 | 334 | ||||||||||||||||||||||||
Free cash flow2
|
|
$37
|
|
|
$319
|
|
|
($172
|
)
|
|
$181
|
|
|
$240
|
|
|
$225
|
|
|
$43
|
|
|
$161
|
|
1 | Sum of all the quarters may not add up to the annual total due to rounding. |
2 | Realized price, adjusted net earnings, adjusted net earnings per share and free cash flow are non-GAAP financial performance measures with no standardized meaning under IFRS and therefore may not be comparable to similar measures of performance presented by other issuers. For further information and a detailed reconciliation of each non-GAAP measure used in this section of the MD&A to the most directly comparable IFRS measure, please see pages 61 to 76 of this MD&A. |
3 | Calculated using weighted average number of shares outstanding under the basic method of earnings per share. |
BARRICK YEAR-END 2018 |
59 | MANAGEMENTS DISCUSSION AND ANALYSIS |
INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES
IFRS CRITICAL ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES
BARRICK YEAR-END 2018 |
60 | MANAGEMENTS DISCUSSION AND ANALYSIS |
NON-GAAP FINANCIAL PERFORMANCE MEASURES
Adjusted Net Earnings and Adjusted Net Earnings per Share
BARRICK YEAR-END 2018 |
61 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Net Earnings to Net Earnings per Share, Adjusted Net Earnings and Adjusted Net Earnings per Share
($ millions, except per share amounts in dollars) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Net earnings (loss) attributable to equity holders of the Company |
($1,545 | ) | $1,438 | $655 | ($1,197 | ) | ($314 | ) | ||||||||||||
Impairment charges (reversals) related to long-lived assets1 |
900 | (212 | ) | (250 | ) | 408 | 916 | |||||||||||||
Acquisition/disposition (gains)/losses2 |
(68 | ) | (911 | ) | 42 | (19 | ) | (29 | ) | |||||||||||
Foreign currency translation (gains)/losses |
136 | 72 | 199 | (16 | ) | 12 | ||||||||||||||
Significant tax adjustments3 |
742 | 244 | 43 | 719 | 61 | |||||||||||||||
Other expense adjustments4 |
366 | 178 | 114 | 261 | 17 | |||||||||||||||
Unrealized gains/(losses) on non-hedge derivative instruments |
1 | (1 | ) | (32 | ) | 1 | 5 | |||||||||||||
Tax effect and non-controlling interest5 |
(123 | ) | 68 | 47 | (88 | ) | (415 | ) | ||||||||||||
Adjusted net earnings |
$409 | $876 | $818 | $69 | $253 | |||||||||||||||
Net earnings (loss) per share6 |
(1.32 | ) | 1.23 | 0.56 | (1.02 | ) | (0.27 | ) | ||||||||||||
Adjusted net earnings per share6 |
0.35 | 0.75 | 0.70 | 0.06 | 0.22 |
1 | Net impairment charges for the current year primarily relate to non-current asset impairments at Lagunas Norte during the third quarter of 2018, and non-current asset and goodwill impairments at Veladero during the fourth quarter of 2018. |
2 | Disposition gains for the current year primarily relate to the gain on the sale of a non-core royalty asset at Acacia. |
3 | Significant tax adjustments for the current year primarily relate to the de-recognition of our Canadian and Peruvian deferred tax assets. |
4 | Other expense adjustments for the current year primarily relate to the inventory impairment charge at Lagunas Norte, the write-off of a Western Australia long-term stamp duty receivable, costs associated with the merger with Randgold, debt extinguishment costs, and the settlement of a dispute regarding a historical supplier contract acquired as part of the Equinox acquisition in 2011. |
5 | Tax effect and non-controlling interest for the current year primarily relates to the impairment charges related to long-lived assets. |
6 | Calculated using weighted average number of shares outstanding under the basic method of earnings per share. |
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
($ millions) | For the years ended December 31 | For the three months ended December 31 | ||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Net cash provided by operating activities |
$1,765 | $2,065 | $2,640 | $411 | $590 | |||||||||||||||
Capital expenditures |
(1,400 | ) | (1,396 | ) | (1,126 | ) | (374 | ) | (350 | ) | ||||||||||
Free cash flow |
$365 | $669 | $1,514 | $37 | $240 |
BARRICK YEAR-END 2018 |
62 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Cash costs per ounce, All-in sustaining costs per ounce, All-in costs per ounce, C1 cash costs per pound and All-in sustaining costs per pound
BARRICK YEAR-END 2018 |
63 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Gold Cost of Sales to Cash costs, All-in sustaining costs and All-in costs, including on a per ounce basis
($ millions, except per ounce information in dollars) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||||||
Footnote | 2018 | 2017 | 2016 | 2018 | 2017 | |||||||||||||||||||
Cost of sales applicable to gold production |
$4,621 | $4,836 | $4,980 | $1,353 | $1,292 | |||||||||||||||||||
Depreciation |
(1,253 | ) | (1,529 | ) | (1,504 | ) | (346 | ) | (404 | ) | ||||||||||||||
By-product credits |
1 | (131 | ) | (135 | ) | (184 | ) | (26 | ) | (30 | ) | |||||||||||||
Realized (gains)/losses on hedge and non-hedge derivatives |
2 | 3 | 23 | 89 | 3 | 4 | ||||||||||||||||||
Non-recurring items |
3 | (172 | ) | | 24 | (155 | ) | | ||||||||||||||||
Other |
4 | (87 | ) | (106 | ) | (44 | ) | (27 | ) | (35 | ) | |||||||||||||
Non-controlling interests (Pueblo Viejo and Acacia) |
5 | (313 | ) | (299 | ) | (358 | ) | (80 | ) | (81 | ) | |||||||||||||
Cash costs |
$2,668 | $2,790 | $3,003 | $722 | $746 | |||||||||||||||||||
General & administrative costs |
265 | 248 | 256 | 53 | 62 | |||||||||||||||||||
Minesite exploration and evaluation costs |
6 | 45 | 47 | 44 | 14 | 8 | ||||||||||||||||||
Minesite sustaining capital expenditures |
7 | 975 | 1,109 | 944 | 276 | 279 | ||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
8 | 81 | 64 | 59 | 18 | 13 | ||||||||||||||||||
Non-controlling interest, copper operations and other |
9 | (374 | ) | (273 | ) | (287 | ) | (118 | ) | (74 | ) | |||||||||||||
All-in sustaining costs |
$3,660 | $3,985 | $4,019 | $965 | $1,034 | |||||||||||||||||||
Project exploration and evaluation and project costs |
6 | 338 | 307 | 193 | 110 | 90 | ||||||||||||||||||
Community relations costs not related to current operations |
4 | 4 | 8 | 2 | 1 | |||||||||||||||||||
Project capital expenditures |
7 | 459 | 273 | 175 | 127 | 81 | ||||||||||||||||||
Rehabilitation - accretion and amortization (non-operating sites) |
8 | 33 | 20 | 11 | 8 | 4 | ||||||||||||||||||
Non-controlling interest and copper operations |
9 | (21 | ) | (21 | ) | (42 | ) | (5 | ) | (9 | ) | |||||||||||||
All-in costs |
$4,473 | $4,568 | $4,364 | $1,207 | $1,201 | |||||||||||||||||||
Ounces sold - equity basis (000s ounces) |
10 | 4,544 | 5,302 | 5,503 | 1,232 | 1,372 | ||||||||||||||||||
Cost of sales per ounce |
11,12 | $892 | $794 | $798 | $980 | $801 | ||||||||||||||||||
Cash costs per ounce |
12 | $588 | $526 | $546 | $588 | $545 | ||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
12,13 | $607 | $544 | $569 | $602 | $561 | ||||||||||||||||||
All-in sustaining costs per ounce |
12 | $806 | $750 | $730 | $788 | $756 | ||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
12,13 | $825 | $768 | $753 | $802 | $772 | ||||||||||||||||||
All-in costs per ounce |
12 | $985 | $860 | $792 | $985 | $882 | ||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
12,13 | $1,004 | $878 | $815 | $999 | $898 |
1 | By-product credits |
Revenues include the sale of by-products for our gold and copper mines for the three months ended December 31, 2018 of $26 million (2017: $30 million) and the year ended December 31, 2018 of $131 million (2017: $135 million; 2016: $151 million) and energy sales from the Monte Rio power plant at our Pueblo Viejo mine for the three months ended December 31, 2018 of $nil (2017: $nil) and the year ended December 31, 2018 of $nil (2017: $nil; 2016: $33 million) up until its disposition on August 18, 2016.
2 | Realized (gains)/losses on hedge and non-hedge derivatives |
Includes realized hedge losses of $2 million and $4 million for the three months and year ended December 31, 2018, respectively (2017: $5 million and $27 million, respectively; 2016: $73 million), and realized non-hedge losses of $1 million and gains of $1 million for the three months and year ended December 31, 2018, respectively (2017: gains of $1 million and $4 million, respectively; 2016: losses of $16 million). Refer to note 5 of the Financial Statements for further information.
3 | Non-recurring items |
These gains/costs are not indicative of our cost of production and have been excluded from the calculation of cash costs. Non-recurring items for the current year mainly relate to inventory impairment of $166 million at Lagunas Norte.
4 | Other |
Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $nil, respectively, for the three months and year ended December 31, 2018 (2017: $nil and $nil, respectively; 2016: $5 million), adding the cost of treatment and refining charges of $nil and $nil, respectively, for the three months and year ended December 31, 2018 (2017: $nil and $1 million, respectively; 2016: $16 million), and the removal of cash costs associated with our Pierina mine, which is mining incidental ounces as it enters closure, of $27 million and $87 million for the three months and year ended December 31, 2018, respectively (2017: $35 million and $108 million, respectively; 2016: $66 million).
BARRICK YEAR-END 2018 |
64 | MANAGEMENTS DISCUSSION AND ANALYSIS |
5 | Non-controlling interests (Pueblo Viejo and Acacia) |
Non-controlling interests include non-controlling interests related to gold production of $114 million and $453 million, respectively, for the three months and year ended December 31, 2018 (2017: $137 million and $454 million, respectively; 2016: $508 million). Refer to note 5 of the Financial Statements for further information.
6 | Exploration and evaluation costs |
Exploration, evaluation and project expenses are presented as minesite if it supports current mine operations and project if it relates to future projects. Refer to page 38 of this MD&A.
7 | Capital expenditures |
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and are not related to current production. Significant projects in the current year are Crossroads, the Cortez Range Front declines, Goldrush, and the Deep South Expansion at Barrick Nevada and construction of the third shaft at Turquoise Ridge. Refer to page 37 of this MD&A.
8 | Rehabilitation - accretion and amortization |
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provisions of our gold operations, split between operating and non-operating sites.
9 | Non-controlling interest and copper operations |
Removes general & administrative costs related to non-controlling interests and copper based on a percentage allocation of revenue. Also removes exploration, evaluation and project costs, rehabilitation costs and capital expenditures incurred by our copper sites and the non-controlling interest of our Acacia and Pueblo Viejo operating segments and South Arturo at Barrick Nevada. Figures remove the impact of Pierina, which is mining incidental ounces as it enters closure. The impact is summarized as the following:
($ millions) | For the years ended December 31 | For the three months ended December 31 |
||||||||||||||||||
Non-controlling interest, copper operations and other |
2018 | 2017 | 2016 | 2018 | 2017 | |||||||||||||||
General & administrative costs |
($104 | ) | ($21 | ) | ($36 | ) | ($36 | ) | ($8 | ) | ||||||||||
Minesite exploration and evaluation costs |
(3 | ) | (12 | ) | (9 | ) | (2 | ) | 1 | |||||||||||
Rehabilitation - accretion and amortization (operating sites) |
(6 | ) | (10 | ) | (9 | ) | (2 | ) | (2 | ) | ||||||||||
Minesite sustaining capital expenditures |
(261 | ) | (230 | ) | (233 | ) | (78 | ) | (65 | ) | ||||||||||
All-in sustaining costs total |
($374 | ) | ($273 | ) | ($287 | ) | ($118 | ) | ($74 | ) | ||||||||||
Project exploration and evaluation and project costs |
(16 | ) | (17 | ) | (12 | ) | (3 | ) | (8 | ) | ||||||||||
Project capital expenditures |
(5 | ) | (4 | ) | (30 | ) | (2 | ) | (1 | ) | ||||||||||
All-in costs total |
($21 | ) | ($21 | ) | ($42 | ) | ($5 | ) | ($9 | ) |
10 | Ounces sold - equity basis |
Figures remove the impact of Pierina, which is mining incidental ounces as it enters closure.
11 | Cost of sales per ounce |
Figures remove the cost of sales impact of Pierina of $32 million and $116 million, respectively, for the three months and year ended December 31, 2018 (2017: $55 million and $174 million, respectively; 2016: $82 million), which is mining incidental ounces as it enters closure. Cost of sales per ounce excludes non-controlling interest related to gold production. Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and 40% South Arturo from cost of sales), divided by attributable gold ounces sold.
12 | Per ounce figures |
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding.
13 | Co-product costs per ounce |
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of by-product credits of our gold production (net of non-controlling interest) calculated as:
($ millions) |
For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
By-product credits |
$131 | $135 | $184 | $26 | $30 | |||||||||||||||
Non-controlling interest |
(45 | ) | (30 | ) | (53 | ) | (10 | ) | (6 | ) | ||||||||||
By-product credits (net of non-controlling interest) |
$86 | $105 | $131 | $16 | $24 |
BARRICK YEAR-END 2018 |
65 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Gold Cost of Sales to Cash costs, All-in sustaining costs and All-in costs, including on a per ounce basis, by operating segment
($ millions, except per ounce information in dollars) | For the three months ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Footnote | Barrick Nevada |
Turquoise Ridge |
Pueblo Viejo |
Veladero | Lagunas Norte |
Acacia | Hemlo | Golden Sunlight |
Porgera | Kalgoorlie | ||||||||||||||||||||||||||||||||
Cost of sales applicable to gold production |
$472 | $54 | $192 | $98 | $208 | $114 | $52 | $14 | $54 | $64 | ||||||||||||||||||||||||||||||||
Depreciation |
(186 | ) | (7 | ) | (53 | ) | (32 | ) | (10 | ) | (23 | ) | (7 | ) | | (14 | ) | (10 | ) | |||||||||||||||||||||||
By-product credits |
1 | | | (17 | ) | (2 | ) | (3 | ) | (1 | ) | | | | (1 | ) | ||||||||||||||||||||||||||
Non-recurring items |
2 | | | (2 | ) | (4 | ) | (166 | ) | | | | 17 | | ||||||||||||||||||||||||||||
Other |
3 | | | 1 | | | | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | (49 | ) | | | (33 | ) | | | | | ||||||||||||||||||||||||||||||
Cash costs | $286 | $47 | $72 | $60 | $29 | $57 | $45 | $14 | $57 | $53 | ||||||||||||||||||||||||||||||||
General & administrative costs |
| | | | | 8 | | | | | ||||||||||||||||||||||||||||||||
Minesite exploration and evaluation costs |
4 | 5 | | | 1 | 1 | | | | | 2 | |||||||||||||||||||||||||||||||
Minesite sustaining capital expenditures |
5 | 57 | 7 | 35 | 59 | 7 | 16 | 17 | 1 | 17 | 9 | |||||||||||||||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
6 | 9 | | 3 | | 2 | 1 | 1 | 1 | (1 | ) | 1 | ||||||||||||||||||||||||||||||
Non-controlling interests |
(4 | ) | | (15 | ) | | | (9 | ) | | | | | |||||||||||||||||||||||||||||
All-in sustaining costs |
$353 | $54 | $95 | $120 | $39 | $73 | $63 | $16 | $73 | $65 | ||||||||||||||||||||||||||||||||
Project exploration and evaluation and project costs |
4 | 3 | | | | | | | | | | |||||||||||||||||||||||||||||||
Project capital expenditures |
5 | 76 | 13 | | | | 3 | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | | | | (1 | ) | | | | | |||||||||||||||||||||||||||||||
All-in costs | $432 | $67 | $95 | $120 | $39 | $75 | $63 | $16 | $73 | $65 | ||||||||||||||||||||||||||||||||
Ounces sold - equity basis (000s ounces) |
595 | 66 | 170 | 74 | 50 | 86 | 48 | 10 | 72 | 61 | ||||||||||||||||||||||||||||||||
Cost of sales per ounce |
7,8 | $792 | $802 | $686 | $1,352 | $4,186 | $852 | $1,083 | $1,423 | $733 | $1,022 | |||||||||||||||||||||||||||||||
Cash costs per ounce |
8 | $479 | $701 | $425 | $823 | $607 | $651 | $932 | $1,430 | $786 | $857 | |||||||||||||||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
8,9 | $480 | $701 | $482 | $848 | $653 | $658 | $935 | $1,448 | $796 | $863 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce |
8 | $591 | $798 | $559 | $1,648 | $796 | $857 | $1,311 | $1,586 | $1,018 | $1,054 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
8,9 | $592 | $798 | $616 | $1,673 | $842 | $864 | $1,314 | $1,604 | $1,028 | $1,060 | |||||||||||||||||||||||||||||||
All-in costs per ounce |
8 | $723 | $993 | $560 | $1,648 | $800 | $878 | $1,311 | $1,586 | $1,018 | $1,054 | |||||||||||||||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
8,9 | $724 | $993 | $617 | $1,673 | $846 | $885 | $1,314 | $1,604 | $1,028 | $1,060 |
BARRICK YEAR-END 2018 |
66 | MANAGEMENTS DISCUSSION AND ANALYSIS |
($ millions, except per ounce information in dollars) | For the three months ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
Footnote | Barrick Nevada |
Turquoise Ridge |
Pueblo Viejo |
Veladero | Lagunas Norte |
Acacia | Hemlo | Golden Sunlight |
Porgera | Kalgoorlie | ||||||||||||||||||||||||||||||||
Cost of sales applicable to gold production |
$428 | $55 | $241 | $108 | $75 | $114 | $53 | $14 | $69 | $79 | ||||||||||||||||||||||||||||||||
Depreciation |
(155 | ) | (10 | ) | (107 | ) | (33 | ) | (18 | ) | (25 | ) | (8 | ) | | (12 | ) | (16 | ) | |||||||||||||||||||||||
By-product credits |
1 | (1 | ) | | (14 | ) | (5 | ) | (4 | ) | | | | (1 | ) | | ||||||||||||||||||||||||||
Non-recurring items |
2 | | | | | | | | | | | |||||||||||||||||||||||||||||||
Other |
3 | | | | | | 1 | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
(1 | ) | | (49 | ) | | | (31 | ) | | | | | |||||||||||||||||||||||||||||
Cash costs |
$271 | $45 | $71 | $70 | $53 | $59 | $45 | $14 | $56 | $63 | ||||||||||||||||||||||||||||||||
General & administrative costs |
| | | | | 9 | | | | | ||||||||||||||||||||||||||||||||
Minesite exploration and evaluation costs |
4 | 4 | | | | | | | | 1 | 3 | |||||||||||||||||||||||||||||||
Minesite sustaining capital expenditures |
5 | 94 | 8 | 30 | 39 | 8 | 18 | 10 | | 16 | 8 | |||||||||||||||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
6 | 4 | | 3 | | 1 | 1 | 1 | | (1 | ) | | ||||||||||||||||||||||||||||||
Non-controlling interests |
| | (13 | ) | | | (12 | ) | | | | | ||||||||||||||||||||||||||||||
All-in sustaining costs |
$373 | $53 | $91 | $109 | $62 | $75 | $56 | $14 | $72 | $74 | ||||||||||||||||||||||||||||||||
Project exploration and evaluation and project costs |
4 | 4 | | | | | | | | | | |||||||||||||||||||||||||||||||
Project capital expenditures |
5 | 63 | 4 | | | | 3 | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | | | | (1 | ) | | | | | |||||||||||||||||||||||||||||||
All-in costs |
$440 | $57 | $91 | $109 | $62 | $77 | $56 | $14 | $72 | $74 | ||||||||||||||||||||||||||||||||
Ounces sold - equity basis (000s ounces) |
539 | 81 | 182 | 114 | 114 | 94 | 64 | 11 | 80 | 93 | ||||||||||||||||||||||||||||||||
Cost of sales per ounce |
7,8 | $794 | $672 | $795 | $953 | $659 | $774 | $831 | $1,221 | $864 | $850 | |||||||||||||||||||||||||||||||
Cash costs per ounce |
8 | $506 | $550 | $388 | $609 | $461 | $581 | $690 | $1,218 | $705 | $675 | |||||||||||||||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
8,9 | $507 | $550 | $490 | $618 | $508 | $587 | $695 | $1,228 | $715 | $680 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce |
8 | $696 | $638 | $498 | $950 | $547 | $779 | $864 | $1,262 | $897 | $796 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
8,9 | $697 | $638 | $600 | $959 | $594 | $785 | $869 | $1,272 | $907 | $801 | |||||||||||||||||||||||||||||||
All-in costs per ounce |
8 | $818 | $692 | $498 | $950 | $553 | $803 | $878 | $1,267 | $897 | $796 | |||||||||||||||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
8,9 | $819 | $692 | $600 | $959 | $600 | $809 | $883 | $1,277 | $907 | $801 |
BARRICK YEAR-END 2018 |
67 | MANAGEMENTS DISCUSSION AND ANALYSIS |
($ millions, except per ounce information in dollars) | For the year ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||||
Footnote | Barrick Nevada |
Turquoise Ridge |
Pueblo Viejo |
Veladero | Lagunas Norte |
Acacia | Hemlo | Golden Sunlight |
Porgera | Kalgoorlie | ||||||||||||||||||||||||||||||||
Cost of sales applicable to gold production |
$1,715 | $206 | $732 | $310 | $337 | $456 | $195 | $53 | $213 | $288 | ||||||||||||||||||||||||||||||||
Depreciation |
(649 | ) | (28 | ) | (185 | ) | (121 | ) | (46 | ) | (89 | ) | (18 | ) | | (42 | ) | (52 | ) | |||||||||||||||||||||||
By-product credits |
1 | (2 | ) | | (90 | ) | (8 | ) | (13 | ) | (4 | ) | (1 | ) | | (2 | ) | (2 | ) | |||||||||||||||||||||||
Non-recurring items |
2 | | | (2 | ) | (4 | ) | (166 | ) | | | | | | ||||||||||||||||||||||||||||
Other |
3 | | | 2 | | | | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | (183 | ) | | | (131 | ) | | | | | ||||||||||||||||||||||||||||||
Cash costs |
$1,064 | $178 | $274 | $177 | $112 | $232 | $176 | $53 | $169 | $234 | ||||||||||||||||||||||||||||||||
General & administrative costs |
| | | | | 26 | | | | | ||||||||||||||||||||||||||||||||
Minesite exploration and evaluation costs |
4 | 19 | | | 2 | 2 | | | | | 10 | |||||||||||||||||||||||||||||||
Minesite sustaining capital expenditures |
5 | 260 | 20 | 145 | 143 | 20 | 81 | 42 | 3 | 62 | 26 | |||||||||||||||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
6 | 30 | 1 | 10 | 1 | 25 | 4 | 4 | 3 | (1 | ) | 4 | ||||||||||||||||||||||||||||||
Non-controlling interests |
(10 | ) | | (62 | ) | | | (40 | ) | | | | | |||||||||||||||||||||||||||||
All-in sustaining costs |
$1,363 | $199 | $367 | $323 | $159 | $303 | $222 | $59 | $230 | $274 | ||||||||||||||||||||||||||||||||
Project exploration and evaluation and project costs |
4 | 6 | | | | | | | | | | |||||||||||||||||||||||||||||||
Project capital expenditures |
5 | 312 | 42 | | | 2 | 12 | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | | | | (4 | ) | | | | | |||||||||||||||||||||||||||||||
All-in costs |
$1,681 | $241 | $367 | $323 | $161 | $311 | $222 | $59 | $230 | $274 | ||||||||||||||||||||||||||||||||
Ounces sold - equity basis (000s ounces) |
2,097 | 262 | 590 | 280 | 251 | 333 | 168 | 30 | 213 | 320 | ||||||||||||||||||||||||||||||||
Cost of sales per ounce |
7,8 | $818 | $783 | $750 | $1,112 | $1,342 | $876 | $1,157 | $1,755 | $996 | $899 | |||||||||||||||||||||||||||||||
Cash costs per ounce |
8 | $507 | $678 | $465 | $629 | $448 | $680 | $1,046 | $1,762 | $796 | $732 | |||||||||||||||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
8,9 | $508 | $678 | $553 | $654 | $499 | $687 | $1,050 | $1,772 | $810 | $737 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce |
8 | $649 | $756 | $623 | $1,154 | $636 | $905 | $1,318 | $1,954 | $1,083 | $857 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
8,9 | $650 | $756 | $711 | $1,179 | $687 | $912 | $1,322 | $1,964 | $1,097 | $862 | |||||||||||||||||||||||||||||||
All-in costs per ounce |
8 | $801 | $916 | $623 | $1,154 | $644 | $929 | $1,320 | $1,954 | $1,083 | $857 | |||||||||||||||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
8,9 | $802 | $916 | $711 | $1,179 | $695 | $936 | $1,324 | $1,964 | $1,097 | $862 |
BARRICK YEAR-END 2018 |
68 | MANAGEMENTS DISCUSSION AND ANALYSIS |
($ millions, except per ounce information in dollars) | For the year ended December 31, 2017 | |||||||||||||||||||||||||||||||||||||||||
Footnote | Barrick Nevada |
Turquoise Ridge |
Pueblo Viejo |
Veladero | Lagunas Norte |
Acacia | Hemlo | Golden Sunlight |
Porgera | Kalgoorlie | ||||||||||||||||||||||||||||||||
Cost of sales applicable to gold production |
$1,869 | $159 | $730 | $410 | $245 | $469 | $193 | $55 | $239 | $292 | ||||||||||||||||||||||||||||||||
Depreciation |
(793 | ) | (28 | ) | (229 | ) | (119 | ) | (68 | ) | (107 | ) | (27 | ) | (3 | ) | (39 | ) | (58 | ) | ||||||||||||||||||||||
By-product credits |
1 | (3 | ) | | (72 | ) | (17 | ) | (16 | ) | (7 | ) | (1 | ) | | (3 | ) | (2 | ) | |||||||||||||||||||||||
Non-recurring items |
2 | | | | | | | | | | | |||||||||||||||||||||||||||||||
Other |
3 | | | | | | 1 | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
(1 | ) | | (171 | ) | | | (127 | ) | | | | | |||||||||||||||||||||||||||||
Cash costs |
$1,072 | $131 | $258 | $274 | $161 | $229 | $165 | $52 | $197 | $232 | ||||||||||||||||||||||||||||||||
General & administrative costs |
| | | | | 21 | | | | | ||||||||||||||||||||||||||||||||
Minesite exploration and evaluation costs |
4 | 16 | | | 3 | 4 | | | | 1 | 9 | |||||||||||||||||||||||||||||||
Minesite sustaining capital expenditures |
5 | 360 | 32 | 114 | 173 | 20 | 137 | 44 | | 55 | 20 | |||||||||||||||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
6 | 25 | 1 | 13 | 2 | 7 | 6 | 5 | 2 | (2 | ) | 3 | ||||||||||||||||||||||||||||||
Non-controlling interests |
(3 | ) | | (51 | ) | | | (61 | ) | | | | | |||||||||||||||||||||||||||||
All-in sustaining costs |
$1,470 | $164 | $334 | $452 | $192 | $332 | $214 | $54 | $251 | $264 | ||||||||||||||||||||||||||||||||
Project exploration and evaluation and project costs |
4 | 8 | | | | | | | | | | |||||||||||||||||||||||||||||||
Project capital expenditures |
5 | 224 | 4 | | | 5 | 11 | 5 | 1 | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | | | | (4 | ) | | | | | |||||||||||||||||||||||||||||||
All-in costs |
$1,702 | $168 | $334 | $452 | $197 | $339 | $219 | $55 | $251 | $264 | ||||||||||||||||||||||||||||||||
Ounces sold - equity basis (000s ounces) |
2,357 | 222 | 637 | 458 | 397 | 379 | 196 | 41 | 253 | 362 | ||||||||||||||||||||||||||||||||
Cost of sales per ounce |
7,8 | $792 | $715 | $699 | $897 | $617 | $791 | $986 | $1,334 | $944 | $806 | |||||||||||||||||||||||||||||||
Cash costs per ounce |
8 | $455 | $589 | $405 | $598 | $405 | $587 | $841 | $1,265 | $781 | $642 | |||||||||||||||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
8,9 | $456 | $589 | $475 | $636 | $446 | $598 | $846 | $1,270 | $791 | $647 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce |
8 | $624 | $733 | $525 | $987 | $483 | $875 | $1,092 | $1,329 | $993 | $729 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
8,9 | $625 | $733 | $595 | $1,025 | $524 | $886 | $1,097 | $1,334 | $1,003 | $734 | |||||||||||||||||||||||||||||||
All-in costs per ounce |
8 | $722 | $753 | $525 | $987 | $497 | $894 | $1,119 | $1,349 | $993 | $729 | |||||||||||||||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
8,9 | $723 | $753 | $595 | $1,025 | $538 | $905 | $1,124 | $1,354 | $1,003 | $734 |
BARRICK YEAR-END 2018 |
69 | MANAGEMENTS DISCUSSION AND ANALYSIS |
($ millions, except per ounce information in dollars) | For the year ended December 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Footnote | Barrick Nevada |
Turquoise Ridge |
Pueblo Viejo |
Veladero | Lagunas Norte |
Acacia | Hemlo | Golden Sunlight |
Porgera | Kalgoorlie | ||||||||||||||||||||||||||||||||
Cost of sales applicable to gold production |
$1,896 | $155 | $644 | $464 | $276 | $719 | $188 | $54 | $203 | $289 | ||||||||||||||||||||||||||||||||
Depreciation |
(807 | ) | (27 | ) | (147 | ) | (118 | ) | (96 | ) | (166 | ) | (26 | ) | (5 | ) | (34 | ) | (56 | ) | ||||||||||||||||||||||
By-product credits |
1 | (2 | ) | | (90 | ) | (27 | ) | (17 | ) | (39 | ) | (1 | ) | | (2 | ) | (2 | ) | |||||||||||||||||||||||
Non-recurring items |
2 | | | 34 | (10 | ) | | | | | | | ||||||||||||||||||||||||||||||
Other |
3 | | | 5 | | | 8 | | | | 7 | |||||||||||||||||||||||||||||||
Non-controlling interests |
| | (170 | ) | | | (188 | ) | | | | | ||||||||||||||||||||||||||||||
Cash costs |
$1,087 | $128 | $276 | $309 | $163 | $334 | $161 | $49 | $167 | $238 | ||||||||||||||||||||||||||||||||
General & administrative costs |
| | | | | 55 | | | | | ||||||||||||||||||||||||||||||||
Minesite exploration and evaluation costs |
4 | 10 | | | 1 | 2 | 3 | | | 1 | 5 | |||||||||||||||||||||||||||||||
Minesite sustaining capital expenditures |
5 | 217 | 32 | 101 | 95 | 51 | 190 | 37 | 2 | 43 | 21 | |||||||||||||||||||||||||||||||
Rehabilitation - accretion and amortization (operating sites) |
6 | 26 | 1 | 10 | 4 | 8 | 6 | 1 | 2 | (2 | ) | 4 | ||||||||||||||||||||||||||||||
Non-controlling interests |
(4 | ) | | (44 | ) | | | (88 | ) | | | | | |||||||||||||||||||||||||||||
All-in sustaining costs |
$1,336 | $161 | $343 | $409 | $224 | $500 | $199 | $53 | $209 | $268 | ||||||||||||||||||||||||||||||||
Project exploration and evaluation and project costs |
4 | 19 | | | | | | | | | | |||||||||||||||||||||||||||||||
Project capital expenditures |
5 | 141 | | | | 5 | 1 | | | | | |||||||||||||||||||||||||||||||
Non-controlling interests |
(30 | ) | | | | | | | | | | |||||||||||||||||||||||||||||||
All-in costs |
$1,466 | $161 | $343 | $409 | $229 | $501 | $199 | $53 | $209 | $268 | ||||||||||||||||||||||||||||||||
Ounces sold - equity basis (000s ounces) |
2,162 | 257 | 700 | 532 | 425 | 522 | 237 | 36 | 243 | 380 | ||||||||||||||||||||||||||||||||
Cost of sales per ounce |
7,8 | $876 | $603 | $564 | $872 | $651 | $880 | $795 | $1,512 | $836 | $762 | |||||||||||||||||||||||||||||||
Cash costs per ounce |
8 | $502 | $498 | $395 | $582 | $383 | $640 | $679 | $1,376 | $689 | $627 | |||||||||||||||||||||||||||||||
Cash costs per ounce (on a co-product basis) |
8,9 | $503 | $498 | $473 | $632 | $423 | $677 | $683 | $1,385 | $697 | $615 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce |
8 | $618 | $625 | $490 | $769 | $529 | $958 | $839 | $1,493 | $858 | $706 | |||||||||||||||||||||||||||||||
All-in sustaining costs per ounce (on a co-product basis) |
8,9 | $619 | $625 | $568 | $819 | $569 | $995 | $843 | $1,502 | $866 | $694 | |||||||||||||||||||||||||||||||
All-in costs per ounce |
8 | $678 | $625 | $490 | $769 | $540 | $960 | $839 | $1,493 | $858 | $706 | |||||||||||||||||||||||||||||||
All-in costs per ounce (on a co-product basis) |
8,9 | $679 | $625 | $568 | $819 | $580 | $997 | $843 | $1,502 | $866 | $694 |
1 | By-product credits |
Revenues include the sale of by-products for our gold mines and energy sales from the Monte Rio power plant at our Pueblo Viejo mine for the three months ended December 31, 2018 of $nil (2017: $nil) and the year ended December 31, 2018 of $nil (2017: $nil; 2016: $33 million) up until its disposition on August 18, 2016.
2 | Non-recurring items |
These gains/costs are not indicative of our cost of production and have been excluded from the calculation of cash costs. Non-recurring items for the current year mainly relate to inventory impairment of $166 million at Lagunas Norte.
3 | Other |
Other adjustments include adding the net margins related to power sales at Pueblo Viejo of $nil and $nil, respectively, for the three months and year ended December 31, 2018 (2017: $nil and $nil, respectively; 2016: $5 million) and adding the cost of treatment and refining charges of $nil and $nil, respectively, for the three months and year ended December 31, 2018 (2017: $1 million and $1 million, respectively; 2016: $9 million).
4 | Exploration and evaluation costs |
Exploration, evaluation and project expenses are presented as minesite if it supports current mine operations and project if it relates to future projects. Refer to page 38 of this MD&A.
BARRICK YEAR-END 2018 |
70 | MANAGEMENTS DISCUSSION AND ANALYSIS |
5 | Capital expenditures |
Capital expenditures are related to our gold sites only and are presented on a 100% accrued basis. They are split between minesite sustaining and project capital expenditures. Project capital expenditures are distinct projects designed to increase the net present value of the mine and are not related to current production. Significant projects in the current year are Crossroads, the Cortez Range Front declines, Goldrush, and the Deep South Expansion at Barrick Nevada and construction of the third shaft at Turquoise Ridge. Refer to page 37 of this MD&A.
6 | Rehabilitation - accretion and amortization |
Includes depreciation on the assets related to rehabilitation provisions of our gold operations and accretion on the rehabilitation provisions of our gold operations, split between operating and non-operating sites.
7 | Cost of sales per ounce |
Cost of sales related to gold per ounce is calculated using cost of sales on an attributable basis (removing the non-controlling interest of 40% Pueblo Viejo, 36.1% Acacia and 40% South Arturo from cost of sales), divided by attributable gold ounces sold.
8 | Per ounce figures |
Cost of sales per ounce, cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce may not calculate based on amounts presented in this table due to rounding.
9 | Co-product costs per ounce |
Cash costs per ounce, all-in sustaining costs per ounce and all-in costs per ounce presented on a co-product basis remove the impact of by-product credits of our gold production (net of non-controlling interest) calculated as:
($ millions) | For the three months ended December 31, 2018 | |||||||||||||||||||||||||||||||||||||||
Barrick | Turquoise | Pueblo | Lagunas | Golden | ||||||||||||||||||||||||||||||||||||
Nevada | Ridge | Viejo | Veladero | Norte | Acacia | Hemlo | Sunlight | Porgera | Kalgoorlie | |||||||||||||||||||||||||||||||
By-product credits | $ | | $ | | $ | 17 | $ | 2 | $ | 3 | $ | 1 | $ | | $ | | $ | | $ | 1 | ||||||||||||||||||||
Non-controlling interest | | | (7 | ) | | | | | | | | |||||||||||||||||||||||||||||
By-product credits (net of non-controlling interest) | $ | | $ | | $ | 10 | $ | 2 | $ | 3 | $ | 1 | $ | | $ | | $ | | $ | 1 | ||||||||||||||||||||
For the three months ended December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||
Barrick | Turquoise | Pueblo | Lagunas | Golden | ||||||||||||||||||||||||||||||||||||
Nevada | Ridge | Viejo | Veladero | Norte | Acacia | Hemlo | Sunlight | Porgera | Kalgoorlie | |||||||||||||||||||||||||||||||
By-product credits | $ | 1 | $ | | $ | 14 | $ | 5 | $ | 4 | $ | | $ | | $ | | $ | 1 | $ | | ||||||||||||||||||||
Non-controlling interest | | | (6 | ) | | | | | | | | |||||||||||||||||||||||||||||
By-product credits (net of non-controlling interest) | $ | 1 | $ | | $ | 8 | $ | 5 | $ | 4 | $ | | $ | | $ | | $ | 1 | $ | | ||||||||||||||||||||
For the year ended December 31, 2018 | ||||||||||||||||||||||||||||||||||||||||
Barrick | Turquoise | Pueblo | Lagunas | Golden | ||||||||||||||||||||||||||||||||||||
Nevada | Ridge | Viejo | Veladero | Norte | Acacia | Hemlo | Sunlight | Porgera | Kalgoorlie | |||||||||||||||||||||||||||||||
By-product credits | $ | 2 | $ | | $ | 90 | $ | 8 | $ | 13 | $ | 4 | $ | 1 | $ | | $ | 2 | $ | 2 | ||||||||||||||||||||
Non-controlling interest | | | (37 | ) | | | (1 | ) | | | | | ||||||||||||||||||||||||||||
By-product credits (net of non-controlling interest) | $ | 2 | $ | | $ | 53 | $ | 8 | $ | 13 | $ | 3 | $ | 1 | $ | | $ | 2 | $ | 2 | ||||||||||||||||||||
For the year ended December 31, 2017 | ||||||||||||||||||||||||||||||||||||||||
Barrick | Turquoise | Pueblo | Lagunas | Golden | ||||||||||||||||||||||||||||||||||||
Nevada | Ridge | Viejo | Veladero | Norte | Acacia | Hemlo | Sunlight | Porgera | Kalgoorlie | |||||||||||||||||||||||||||||||
By-product credits | $ | 3 | $ | | $ | 72 | $ | 17 | $ | 16 | $ | 7 | $ | 1 | $ | | $ | 3 | $ | 2 | ||||||||||||||||||||
Non-controlling interest | | | (28 | ) | | | (3 | ) | | | | | ||||||||||||||||||||||||||||
By-product credits (net of non-controlling interest) | $ | 3 | $ | | $ | 44 | $ | 17 | $ | 16 | $ | 4 | $ | 1 | $ | | $ | 3 | $ | 2 | ||||||||||||||||||||
For the year ended December 31, 2016 | ||||||||||||||||||||||||||||||||||||||||
Barrick | Turquoise | Pueblo | Lagunas | Golden | ||||||||||||||||||||||||||||||||||||
Nevada | Ridge | Viejo | Veladero | Norte | Acacia | Hemlo | Sunlight | Porgera | Kalgoorlie | |||||||||||||||||||||||||||||||
By-product credits | $ | 2 | $ | | $ | 90 | $ | 27 | $ | 17 | $ | 39 | $ | 1 | $ | | $ | 2 | $ | 2 | ||||||||||||||||||||
Non-controlling interest | | | (39 | ) | | | (14 | ) | | | | | ||||||||||||||||||||||||||||
By-product credits (net of non-controlling interest) | $ | 2 | $ | | $ | 51 | $ | 27 | $ | 17 | $ | 25 | $ | 1 | $ | | $ | 2 | $ | 2 |
BARRICK YEAR-END 2018 |
71 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Copper Cost of Sales to C1 cash costs and All-in sustaining costs, including on a per pound basis
($ millions, except per pound information in dollars) |
For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Cost of sales |
$558 | $399 | $319 | $210 | $107 | |||||||||||||||
Depreciation/amortization |
(170 | ) | (83 | ) | (45 | ) | (84 | ) | (24 | ) | ||||||||||
Treatment and refinement charges |
144 | 157 | 167 | 41 | 41 | |||||||||||||||
Cash cost of sales applicable to equity method investments |
281 | 245 | 203 | 78 | 75 | |||||||||||||||
Less: royalties and production taxes |
(44 | ) | (38 | ) | (41 | ) | (15 | ) | (11 | ) | ||||||||||
By-product credits |
(6 | ) | (5 | ) | | (2 | ) | (1 | ) | |||||||||||
Other |
(11 | ) | | | (11 | ) | | |||||||||||||
C1 cash cost of sales |
$752 | $675 | $603 | $217 | $187 | |||||||||||||||
General & administrative costs |
28 | 12 | 14 | 5 | 3 | |||||||||||||||
Rehabilitation - accretion and amortization |
16 | 12 | 7 | 3 | 3 | |||||||||||||||
Royalties and production taxes |
44 | 38 | 41 | 15 | 11 | |||||||||||||||
Minesite exploration and evaluation costs |
4 | 6 | | 2 | 1 | |||||||||||||||
Minesite sustaining capital expenditures |
220 | 204 | 169 | 67 | 67 | |||||||||||||||
Inventory write-downs |
11 | | | 11 | | |||||||||||||||
All-in sustaining costs |
$1,075 | $947 | $834 | $320 | $272 | |||||||||||||||
Pounds sold - consolidated basis (millions pounds) |
382 | 405 | 405 | 109 | 107 | |||||||||||||||
Cost of sales per pound1,2 |
$2.40 | $1.77 | $1.41 | $2.85 | $1.79 | |||||||||||||||
C1 cash cost per pound1 |
$1.97 | $1.66 | $1.49 | $1.98 | $1.72 | |||||||||||||||
All-in sustaining costs per pound1 |
$2.82 | $2.34 | $2.05 | $2.95 | $2.51 |
1 | Cost of sales per pound, C1 cash costs per pound and all-in sustaining costs per pound may not calculate based on amounts presented in this table due to rounding. |
2 | Cost of sales per pound related to copper is calculated using cost of sales including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments). |
BARRICK YEAR-END 2018 |
72 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Copper Cost of Sales to C1 cash costs and All-in sustaining costs, including on a per pound basis, by operating site
($ millions, except per pound information in dollars) | For the three months ended December 31 | |||||||||||||||||||||||
2018 |
2017 | |||||||||||||||||||||||
Zaldívar | Lumwana | Jabal Sayid | Zaldívar | Lumwana | Jabal Sayid | |||||||||||||||||||
Cost of sales |
$77 | $210 | $23 | $73 | $104 | $23 | ||||||||||||||||||
Depreciation/amortization |
(19 | ) | (84 | ) | (3 | ) | (16 | ) | (24 | ) | (5 | ) | ||||||||||||
Treatment and refinement charges |
| 36 | 5 | | 37 | 4 | ||||||||||||||||||
Less: royalties and production taxes |
| (11 | ) | (4 | ) | | (11 | ) | | |||||||||||||||
By-product credits |
| | (2 | ) | | | | |||||||||||||||||
Other |
| (11 | ) | | | | | |||||||||||||||||
C1 cash cost of sales |
$58 | $140 | $19 | $57 | $106 | $22 | ||||||||||||||||||
Rehabilitation - accretion and amortization |
| 3 | | | 3 | | ||||||||||||||||||
Royalties and production taxes |
| 11 | 4 | | 11 | | ||||||||||||||||||
Minesite exploration and evaluation costs |
2 | | | 1 | | | ||||||||||||||||||
Minesite sustaining capital expenditures |
16 | 47 | 4 | 21 | 43 | 3 | ||||||||||||||||||
Inventory write-downs |
| 11 | | | | | ||||||||||||||||||
All-in sustaining costs |
$76 | $212 | $27 | $79 | $163 | $25 | ||||||||||||||||||
Pounds sold - consolidated basis (millions pounds) |
30 | 65 | 14 | 32 | 65 | 10 | ||||||||||||||||||
Cost of sales per pound1,2 |
$2.55 | $3.22 | $1.70 | $2.29 | $1.60 | $2.15 | ||||||||||||||||||
C1 cash cost per pound1 |
$1.91 | $2.12 | $1.48 | $1.78 | $1.63 | $2.05 | ||||||||||||||||||
All-in sustaining costs per pound1 |
$2.50 | $3.26 | $2.04 | $2.45 | $2.52 | $2.41 |
($ millions, except per pound information in dollars) | For the years ended December 31 | |||||||||||||||||||||||||||||||||||
2018 | 2017 | 2016 | ||||||||||||||||||||||||||||||||||
Zaldívar | Lumwana | Jabal Sayid |
Zaldívar | Lumwana | Jabal Sayid |
Zaldívar | Lumwana | Jabal Sayid |
||||||||||||||||||||||||||||
Cost of sales |
$261 | $558 | $98 | $243 | $396 | $75 | $221 | $319 | $33 | |||||||||||||||||||||||||||
Depreciation/amortization |
(59 | ) | (170 | ) | (19 | ) | (55 | ) | (83 | ) | (17 | ) | (44 | ) | (45 | ) | (6 | ) | ||||||||||||||||||
Treatment and refinement charges |
| 125 | 19 | | 144 | 14 | | 161 | 6 | |||||||||||||||||||||||||||
Less: royalties and production taxes |
| (39 | ) | (5 | ) | | (38 | ) | | | (41 | ) | | |||||||||||||||||||||||
By-product credits |
| | (6 | ) | | | (5 | ) | | | | |||||||||||||||||||||||||
Other |
| (11 | ) | | | | | | | | ||||||||||||||||||||||||||
C1 cash cost of sales |
$202 | $463 | $87 | $188 | $419 | $67 | $177 | $394 | $33 | |||||||||||||||||||||||||||
Rehabilitation - accretion and amortization |
| 16 | | | 12 | | | 7 | | |||||||||||||||||||||||||||
Royalties and production taxes |
| 39 | 5 | | 38 | | | 41 | | |||||||||||||||||||||||||||
Minesite exploration and evaluation costs |
2 | 2 | | 4 | 2 | | | | | |||||||||||||||||||||||||||
Minesite sustaining capital expenditures |
49 | 154 | 17 | 58 | 123 | 23 | 56 | 96 | 17 | |||||||||||||||||||||||||||
Inventory write-downs |
| 11 | | | | | | | | |||||||||||||||||||||||||||
All-in sustaining costs |
$253 | $685 | $109 | $250 | $594 | $90 | $233 | $538 | $50 | |||||||||||||||||||||||||||
Pounds sold - consolidated basis (millions pounds) |
103 | 222 | 57 | 113 | 253 | 39 | 114 | 274 | 17 | |||||||||||||||||||||||||||
Cost of sales per pound1,2 |
$2.55 | $2.51 | $1.73 | $2.15 | $1.57 | $1.90 | $1.93 | $1.16 | $1.98 | |||||||||||||||||||||||||||
C1 cash cost per pound1 |
$1.97 | $2.08 | $1.53 | $1.66 | $1.66 | $1.70 | $1.55 | $1.44 | $1.97 | |||||||||||||||||||||||||||
All-in sustaining costs per pound1 |
$2.47 | $3.08 | $1.92 | $2.21 | $2.35 | $2.30 | $2.05 | $1.97 | $2.98 |
1 | Cost of sales per pound, C1 cash costs per pound and all-in sustaining costs per pound may not calculate based on amounts presented in this table due to rounding. |
2 | Cost of sales per pound applicable to copper is calculated using cost of sales including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments). |
BARRICK YEAR-END 2018 |
73 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
($ millions) | For the years ended December 31 |
For the three months ended December 31 |
||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | ||||||||||||||||
Net earnings (loss) |
($1,435 | ) | $1,516 | $861 | ($1,165 | ) | ($467 | ) | ||||||||||||
Income tax expense |
1,198 | 1,231 | 917 | 776 | 51 | |||||||||||||||
Finance costs, net1 |
458 | 624 | 725 | 95 | 115 | |||||||||||||||
Depreciation |
1,457 | 1,647 | 1,574 | 441 | 434 | |||||||||||||||
EBITDA |
$1,678 | $5,018 | $4,077 | $147 | $133 | |||||||||||||||
Impairment charges (reversals) of long-lived assets2 |
900 | (212 | ) | (250 | ) | 408 | 916 | |||||||||||||
Acquisition/disposition (gains)/losses3 |
(68 | ) | (911 | ) | 42 | (19 | ) | (29 | ) | |||||||||||
Foreign currency translation (gains)/losses |
136 | 72 | 199 | (16 | ) | 12 | ||||||||||||||
Other expense adjustments4 |
336 | 51 | (15 | ) | 261 | 17 | ||||||||||||||
Unrealized gains on non-hedge derivative instruments |
1 | (1 | ) | (32 | ) | 1 | 5 | |||||||||||||
Income tax expense, net finance costs1, and depreciation from equity investees |
$97 | $98 | $63 | $24 | $29 | |||||||||||||||
Adjusted EBITDA |
$3,080 | $4,115 | $4,084 | $806 | $1,083 |
1 | Finance costs exclude accretion. |
2 | Net impairment charges for the current year primarily relate to non-current asset impairments at Lagunas Norte during the third quarter of 2018, and non-current asset and goodwill impairments at Veladero during the fourth quarter of 2018. |
3 | Disposition gains for the current year primarily relate to the gain on the sale of a non-core royalty asset at Acacia. |
4 | Other expense adjustments for the current year primarily relate to the inventory impairment charge at Lagunas Norte, the write-off of a Western Australia long-term stamp duty receivable, costs associated with the merger with Randgold, and the settlement of a dispute regarding a historical supplier contract acquired as part of the Equinox acquisition in 2011. |
BARRICK YEAR-END 2018 |
74 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Segment Income to Segment EBITDA
($ millions) | For the year ended December 31, 2018 | |||||||||||||||
Barrick Nevada | Turquoise Ridge | Pueblo Viejo (60%) |
Veladero | Lagunas Norte |
Acacia (100%) |
|||||||||||
Segment Income |
$890 | $126 | $342 | $53 | ($13) | $171 | ||||||||||
Depreciation |
649 | 28 | 115 | 121 | 46 | 89 | ||||||||||
Segment EBITDA |
$1,539 | $154 | $457 | $174 | $33 | $260 | ||||||||||
For the year ended December 31, 2017 | ||||||||||||||||
Barrick Nevada | Turquoise Ridge | Pueblo Viejo (60%) |
Veladero | Lagunas Norte | Acacia (100%) | |||||||||||
Segment Income |
$1,052 | $119 | $395 | $173 | $259 | $191 | ||||||||||
Depreciation |
793 | 28 | 143 | 119 | 68 | 107 | ||||||||||
Segment EBITDA |
$1,845 | $147 | $538 | $292 | $327 | $298 | ||||||||||
For the year ended December 31, 2016 | ||||||||||||||||
Barrick Nevada | Turquoise Ridge | Pueblo Viejo (60%) |
Veladero | Lagunas Norte | Acacia (100%) | |||||||||||
Segment Income |
$771 | $166 | $528 | $220 | $260 | $299 | ||||||||||
Depreciation |
807 | 27 | 93 | 118 | 96 | 166 | ||||||||||
Segment EBITDA |
$1,578 | $193 | $621 | $338 | $356 | $465 |
BARRICK YEAR-END 2018 |
75 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Reconciliation of Sales to Realized Price per ounce/pound
For the years ended December 31 | ||||||||||||||||||||||||
($ millions, except per ounce/pound information in dollars) | Gold | Copper | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||||
Sales |
$6,600 | $7,631 | $7,908 | $512 | $608 | $466 | ||||||||||||||||||
Sales applicable to non-controlling interests |
(734 | ) | (810 | ) | (948 | ) | | | | |||||||||||||||
Sales applicable to equity method investments1,2 |
| | | 442 | 427 | 293 | ||||||||||||||||||
Realized non-hedge gold/copper derivative (losses) gains |
2 | 3 | (2 | ) | | | | |||||||||||||||||
Sales applicable to Pierina3 |
(111 | ) | (153 | ) | (112 | ) | | | | |||||||||||||||
Treatment and refinement charges |
1 | 1 | 16 | 144 | 157 | 167 | ||||||||||||||||||
Export duties |
(1 | ) | | 2 | | | | |||||||||||||||||
Revenues - as adjusted |
$5,757 | $6,672 | $6,864 | $1,098 | $1,192 | $926 | ||||||||||||||||||
Ounces/pounds sold (000s ounces/millions pounds)3 |
4,544 | 5,302 | 5,503 | 382 | 405 | 405 | ||||||||||||||||||
Realized gold/copper price per ounce/pound4 |
$1,267 | $1,258 | $1,248 | $2.88 | $2.95 | $2.29 |
1 | Represents sales of $300 million for the year ended December 31, 2018 (2017: $325 million; 2016: $259 million) applicable to our 50% equity method investment in Zaldívar and $161 million (2017: $116 million; 2016: $40 million) applicable to our 50% equity method investment in Jabal Sayid. |
2 | Sales applicable to equity method investments are net of treatment and refinement charges. |
3 | Figures exclude Pierina from the calculation of realized price per ounce, which is mining incidental ounces as it enters closure. |
4 | Realized price per ounce/pound may not calculate based on amounts presented in this table due to rounding. |
BARRICK YEAR-END 2018 |
76 | MANAGEMENTS DISCUSSION AND ANALYSIS |
TECHNICAL INFORMATION
The scientific and technical information contained in this MD&A has been reviewed and approved by Rick Sims, Registered Member SME, Vice President, Reserves and Resources of Barrick; Geoffrey Locke, P. Eng., Manager, Metallurgy of Barrick; and Mike Tsafaras, P. Eng., Manager, Value Realization of Barrick who are each a Qualified Person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects. Following the completion of the merger with Randgold, the designation of Qualified Persons for the combined company will be reviewed and may be updated for future reporting.
ENDNOTES
1 | 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 61 to 76 of this MD&A. |
2 | Amount excludes capital leases and includes Acacia (100% basis). |
3 | Includes $146 million cash primarily held at Acacia, which may not be readily deployed. |
4 | 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 sold. Cost of sales applicable to copper per pound is calculated using cost of sales applicable to copper including our proportionate share of cost of sales attributable to equity method investments (Zaldívar and Jabal Sayid), divided by consolidated copper pounds sold (including our proportionate share of copper pounds sold from our equity method investments). |
5 | Total reportable incident frequency rate (TRIFR) is a ratio calculated as follows: number of reportable injuries x 200,000 hours divided by the total number of hours worked. Reportable injuries include fatalities, lost time injuries, restricted duty injuries, and medically treated injuries. |
6 | Estimated in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. Estimates are as of December 31, 2018, unless otherwise noted. Proven reserves of 344.6 million tonnes grading 2.15 g/t, representing 23.9 million ounces of gold, and 169.2 million tonnes grading 0.59%, representing 2.195 billion pounds of copper. Probable reserves of 0.9 billion tonnes grading 1.33 g/t, representing 38.4 million ounces of gold, and 452.7 million tonnes grading 0.55%, representing 5.454 billion pounds of copper. Measured resources of 405.3 million tonnes grading 0.93 g/t, representing 12.2 million ounces of gold, and 129.7 million tonnes grading 0.36%, representing 1.034 billion pounds of copper. Indicated resources of 1.6 billion tonnes grading 1.52 g/t, representing 76.7 million ounces of gold, and 585.9 million tonnes grading 0.49%, representing 6.367 billion pounds of copper. Inferred resources of 852.9 million tonnes grading 1.22 g/t, representing 33.5 million ounces of gold, and 141.3 million tonnes grading 0.42%, representing 1.323 billion pounds of copper. Pascua- Lama measured resources of 42.8 million tonnes grading 1.86 g/t representing 2.6 million ounces of gold, and indicated resources of 391.7 million tonnes grading 1.49 g/t, representing 18.8 million ounces of gold. Complete mineral reserve and mineral resource data for all mines and projects referenced in this MD&A, including tonnes, grades, and ounces, can be found on pages 80-85 of Barricks Fourth Quarter and Year-End 2018 Report. |
7 | Compared to the continued use of heavy fuel oil and based on an oil price assumption of $70 per barrel and a natural gas price assumption of $3.75/MMbtu. |
8 | A Tier One Gold Asset is a mine with a stated life in excess of 10 years with 2017 production of at least 500,000 ounces of gold and 2017 total cash cost per ounce within the bottom half of Wood Mackenzies cost curve tools (excluding state-owned and privately-owned mines). For purposes of determining Tier One Gold Assets, Total cash cost per ounce is based on data from Wood Mackenzie as of August 31, 2018. The Wood Mackenzie calculation of Total cash cost per ounce may not be identical to the manner in which Barrick calculates comparable measures. Total cash cost per ounce 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. Total cash cost per ounce should not be considered by investors as an alternative to operating profit, net profit attributable to shareholders, or to other IFRS measures. Barrick believes that Total cash cost per ounce is a useful indicator for investors and management of a mining companys performance as it provides an indication of a companys profitability and efficiency, the trends in cash costs as the companys operations mature, and a benchmark of performance to allow for comparison against other companies. Wood Mackenzie is an independent third party research and consultancy firm that provides data for, among others, the metals and mining industry. Wood Mackenzie does not have any affiliation to Barrick. |
9 | 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. Proven reserves of 398.2 million tonnes grading 1.91 g/t, representing 24.4 million ounces of gold, and 170.7 million tonnes grading 0.556%, representing 2.095 billion pounds of copper. Probable reserves of 0.9 billion tonnes grading 1.39 g/t, representing 40.0 million ounces of gold, and 456.7 million tonnes grading 0.592%, representing 5.956 billion pounds of copper. Measured resources of 400.0 million tonnes grading 0.92 g/t, representing 11.8 million ounces of gold, and 90.9 million tonnes grading 0.401%, representing 803.1 million pounds of copper. Indicated resources of 1.6 billion tonnes grading 1.54 g/t, representing 76.8 million ounces of gold, and 581.2 million tonnes grading 0.506%, representing 6.484 billion pounds of copper. Inferred resources of 795.4 million tonnes grading 1.21 |
BARRICK YEAR-END 2018 |
77 | MANAGEMENTS DISCUSSION AND ANALYSIS |
g/t, representing 30.8 million ounces of gold, and 125.4 million tonnes grading 0.482%, representing 1.331 billion pounds of copper. Pascua-Lama measured resources of 42.8 million tonnes grading 1.86 g/t representing 2.6 ounces of gold, and indicated resources of 391.7 tonnes grading 1.49 g/t, representing 18.8 ounces of gold. Complete 2017 mineral reserve and mineral resource data for all mines and projects referenced in this MD&A, including tonnes, grades, and ounces, can be found on pages 30-39 of Barricks Annual Information Form/Form 40-F for the year ended December 31, 2017 on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission. |
10 | Assets, which in the opinion of Barrick, have the potential to deliver significant unrealized value in the future. |
11 | Currently consists of Barricks Lumwana mine and Zaldívar and Jabal Sayid copper joint ventures. |
BARRICK YEAR-END 2018 |
78 | MANAGEMENTS DISCUSSION AND ANALYSIS |
BARRICK YEAR-END 2018 |
79 | MANAGEMENTS DISCUSSION AND ANALYSIS |
Mineral Reserves and Mineral Resources
GOLD MINERAL RESERVES (1,2)
As at December 31, 2018 | PROVEN | PROBABLE | TOTAL | |||||||||||||||||||||||||||||||||||||
Tonnes |
Grade | Contained ozs |
Tonnes | Grade | Contained ozs |
Tonnes | Grade | Contained ozs |
||||||||||||||||||||||||||||||||
Based on attributable ounces |
(000s) | (gm/t) | (000s) | (000s) | (gm/t) | (000s) | (000s) | (gm/t) | (000s) | |||||||||||||||||||||||||||||||
NORTH AMERICA |
||||||||||||||||||||||||||||||||||||||||
Goldstrike Open Pit |
50,281 | 2.85 | 4,609 | 8,706 | 3.78 | 1,058 | 58,987 | 2.99 | 5,667 | |||||||||||||||||||||||||||||||
Goldstrike Underground |
5,233 | 11.32 | 1,904 | 3,675 | 8.07 | 954 | 8,908 | 9.98 | 2,858 | |||||||||||||||||||||||||||||||
Goldstrike Property Total |
55,514 | 3.65 | 6,513 | 12,381 | 5.05 | 2,012 | 67,895 | 3.91 | 8,525 | |||||||||||||||||||||||||||||||
Pueblo Viejo (60.00%) |
61,630 | 2.56 | 5,071 | 15,111 | 3.05 | 1,481 | 76,741 | 2.66 | 6,552 | |||||||||||||||||||||||||||||||
Cortez |
17,642 | 2.01 | 1,138 | 127,412 | 1.86 | 7,599 | 145,054 | 1.87 | 8,737 | |||||||||||||||||||||||||||||||
Goldrush |
| | | 6,399 | 9.69 | 1,993 | 6,399 | 9.69 | 1,993 | |||||||||||||||||||||||||||||||
Turquoise Ridge (75.00%) |
9,018 | 13.62 | 3,950 | 7,373 | 12.16 | 2,883 | 16,391 | 12.97 | 6,833 | |||||||||||||||||||||||||||||||
South Arturo (60.00%) |
2,257 | 3.20 | 232 | 2,006 | 2.79 | 180 | 4,263 | 3.01 | 412 | |||||||||||||||||||||||||||||||
Hemlo |
1,425 | 4.17 | 191 | 22,677 | 2.38 | 1,733 | 24,102 | 2.48 | 1,924 | |||||||||||||||||||||||||||||||
Golden Sunlight |
263 | 1.06 | 9 | 103 | 3.32 | 11 | 366 | 1.70 | 20 | |||||||||||||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||||||||||||||||
Norte Abierto (50.00%) (3) |
114,851 | 0.65 | 2,391 | 483,950 | 0.59 | 9,232 | 598,801 | 0.60 | 11,623 | |||||||||||||||||||||||||||||||
Veladero (50.00%) (4) |
15,508 | 0.66 | 327 | 91,068 | 0.76 | 2,211 | 106,576 | 0.74 | 2,538 | |||||||||||||||||||||||||||||||
Lagunas Norte |
23,630 | 2.50 | 1,896 | 21,256 | 3.01 | 2,056 | 44,886 | 2.74 | 3,952 | |||||||||||||||||||||||||||||||
AUSTRALIA PACIFIC |
||||||||||||||||||||||||||||||||||||||||
Porgera (47.50%) |
1,170 | 7.90 | 297 | 12,074 | 4.64 | 1,803 | 13,244 | 4.93 | 2,100 | |||||||||||||||||||||||||||||||
Kalgoorlie (50.00%) |
20,825 | 1.23 | 825 | 75,563 | 1.16 | 2,826 | 96,388 | 1.18 | 3,651 | |||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||
Bulyanhulu (63.90%) |
1,542 | 11.01 | 546 | 5,063 | 7.38 | 1,201 | 6,605 | 8.23 | 1,747 | |||||||||||||||||||||||||||||||
North Mara (63.90%) |
1,461 | 4.51 | 212 | 15,312 | 2.40 | 1,183 | 16,773 | 2.59 | 1,395 | |||||||||||||||||||||||||||||||
Buzwagi (63.90%) |
6,817 | 0.90 | 197 | | | | 6,817 | 0.90 | 197 | |||||||||||||||||||||||||||||||
OTHER |
11,087 | 0.23 | 82 | 2,469 | 0.28 | 22 | 13,556 | 0.24 | 104 | |||||||||||||||||||||||||||||||
TOTAL |
344,640 | 2.15 | 23,877 | 900,217 | 1.33 | 38,426 | 1,244,857 | 1.56 | 62,303 | |||||||||||||||||||||||||||||||
COPPER MINERAL RESERVES (1)
|
|
|||||||||||||||||||||||||||||||||||||||
As at December 31, 2018 | PROVEN | PROBABLE | TOTAL | |||||||||||||||||||||||||||||||||||||
Tonnes |
Grade | Contained lbs |
Tonnes | Grade | Contained lbs |
Tonnes | Grade | Contained lbs |
||||||||||||||||||||||||||||||||
Based on attributable pounds |
(000s) | (%) | (millions) | (000s) | (%) | (millions) | (000s) | (%) | (millions) | |||||||||||||||||||||||||||||||
Zaldívar (50.00%) |
126,390 | 0.461 | 1,283.9 | 107,352 | 0.467 | 1,105.0 | 233,742 | 0.464 | 2,388.9 | |||||||||||||||||||||||||||||||
Lumwana |
31,707 | 0.454 | 317.4 | 342,889 | 0.560 | 4,230.1 | 374,596 | 0.551 | 4,547.6 | |||||||||||||||||||||||||||||||
Jabal Sayid (50.00%) |
11,087 | 2.428 | 593.5 | 2,469 | 2.178 | 118.6 | 13,556 | 2.383 | 712.1 | |||||||||||||||||||||||||||||||
TOTAL |
169,184 | 0.588 | 2,194.8 | 452,710 | 0.546 | 5,453.7 | 621,894 | 0.558 | 7,648.6 |
(1) | See accompanying endnote #1. |
(2) | See accompanying endnote #2. |
(3) | See accompanying endnote #3. |
(4) | See accompanying endnote #4. |
BARRICK YEAR-END 2018 |
80 | RESERVES AND RESOURCES |
GOLD MINERAL RESOURCES (1,2)
As at December 31, 2018 | MEASURED (M) | INDICATED (I) | (M) + (I) | INFERRED | ||||||||||||||||||||||||||||||||||||||||||
Tonnes |
Grade | Contained ozs |
Tonnes | Grade | Contained ozs |
Contained ozs |
Tonnes | Grade | Contained ozs |
|||||||||||||||||||||||||||||||||||||
Based on attributable ounces |
(000s) | (gm/t) | (000s) | (000s) | (gm/t) | (000s) | (000s) | (000s) | (gm/t) | (000s) | ||||||||||||||||||||||||||||||||||||
NORTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||||
Goldstrike Open Pit |
1,243 | 1.40 | 56 | 1,768 | 1.04 | 59 | 115 | 214 | 2.18 | 15 | ||||||||||||||||||||||||||||||||||||
Goldstrike Underground |
2,329 | 9.60 | 719 | 2,824 | 8.79 | 798 | 1,517 | 1,603 | 8.91 | 459 | ||||||||||||||||||||||||||||||||||||
Goldstrike Property Total |
3,572 | 6.75 | 775 | 4,592 | 5.80 | 857 | 1,632 | 1,817 | 8.11 | 474 | ||||||||||||||||||||||||||||||||||||
Pueblo Viejo (60.00%) |
7,613 | 2.39 | 585 | 93,739 | 2.47 | 7,442 | 8,027 | 27,598 | 2.43 | 2,152 | ||||||||||||||||||||||||||||||||||||
Cortez |
3,353 | 1.84 | 198 | 53,374 | 1.73 | 2,971 | 3,169 | 13,158 | 1.67 | 705 | ||||||||||||||||||||||||||||||||||||
Goldrush (3) |
| | | 30,942 | 9.40 | 9,353 | 9,353 | 11,867 | 9.31 | 3,552 | ||||||||||||||||||||||||||||||||||||
Turquoise Ridge (75.00%) |
2,983 | 7.70 | 738 | 2,439 | 8.23 | 645 | 1,383 | 1,872 | 11.93 | 718 | ||||||||||||||||||||||||||||||||||||
South Arturo (60.00%) |
3,596 | 1.06 | 122 | 10,229 | 1.04 | 342 | 464 | 1,140 | 1.31 | 48 | ||||||||||||||||||||||||||||||||||||
Hemlo |
592 | 3.10 | 59 | 36,878 | 1.28 | 1,515 | 1,574 | 6,023 | 3.37 | 653 | ||||||||||||||||||||||||||||||||||||
Golden Sunlight |
120 | 1.56 | 6 | 2,777 | 1.77 | 158 | 164 | 1,604 | 1.63 | 84 | ||||||||||||||||||||||||||||||||||||
Donlin Gold (50.00%) |
3,865 | 2.52 | 313 | 266,803 | 2.24 | 19,190 | 19,503 | 46,108 | 2.02 | 2,997 | ||||||||||||||||||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||||
Norte Abierto (50.00%) (4) |
321,528 | 0.56 | 5,766 | 528,596 | 0.44 | 7,540 | 13,306 | 346,770 | 0.35 | 3,916 | ||||||||||||||||||||||||||||||||||||
Pascua-Lama |
42,809 | 1.86 | 2,564 | 391,734 | 1.49 | 18,783 | 21,347 | 15,400 | 1.74 | 863 | ||||||||||||||||||||||||||||||||||||
Veladero (50.00%) (5) |
3,361 | 0.50 | 54 | 67,611 | 0.58 | 1,263 | 1,317 | 35,872 | 0.48 | 555 | ||||||||||||||||||||||||||||||||||||
Lagunas Norte |
1,136 | 1.07 | 39 | 15,814 | 1.13 | 576 | 615 | 1,546 | 1.35 | 67 | ||||||||||||||||||||||||||||||||||||
Alturas |
| | | | | | | 261,265 | 1.06 | 8,865 | ||||||||||||||||||||||||||||||||||||
AUSTRALIA PACIFIC |
||||||||||||||||||||||||||||||||||||||||||||||
Porgera (47.50%) |
50 | 4.98 | 8 | 11,667 | 4.73 | 1,773 | 1,781 | 11,329 | 3.99 | 1,455 | ||||||||||||||||||||||||||||||||||||
Kalgoorlie (50.00%) |
5,343 | 1.42 | 244 | 25,455 | 1.51 | 1,235 | 1,479 | 9,402 | 2.33 | 704 | ||||||||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||||||||
Bulyanhulu (63.90%) |
362 | 13.49 | 157 | 4,720 | 7.97 | 1,210 | 1,367 | 9,587 | 11.76 | 3,625 | ||||||||||||||||||||||||||||||||||||
North Mara (63.90%) |
1,247 | 2.29 | 92 | 6,901 | 2.59 | 574 | 666 | 2,835 | 4.87 | 444 | ||||||||||||||||||||||||||||||||||||
Buzwagi (63.90%) |
| | | 2,878 | | 96 | 96 | 31,898 | 0.77 | 790 | ||||||||||||||||||||||||||||||||||||
OTHER |
3,790 | 3.59 | 438 | 10,902 | 3.33 | 1,166 | 1,604 | 15,764 | 1.73 | 878 | ||||||||||||||||||||||||||||||||||||
TOTAL |
405,320 | 0.93 | 12,158 | 1,568,051 | 1.52 | 76,689 | 88,847 | 852,855 | 1.22 | 33,545 | ||||||||||||||||||||||||||||||||||||
COPPER MINERAL RESOURCES (1,2)
|
||||||||||||||||||||||||||||||||||||||||||||||
As at December 31, 2018 | MEASURED (M) | INDICATED (I) | (M) + (I) | INFERRED | ||||||||||||||||||||||||||||||||||||||||||
Tonnes |
Grade |
Contained lbs |
Tonnes | Grade | Contained lbs |
Contained lbs |
Tonnes | Grade | Contained lbs |
|||||||||||||||||||||||||||||||||||||
Based on attributable pounds
|
(000s) | (%) | (millions) | (000s) | (%) | (millions) | (millions) | (000s) | (%) | (millions) | ||||||||||||||||||||||||||||||||||||
Zaldívar (50.00%) |
101,841 | 0.342 | 767.2 | 51,856 | 0.333 | 380.3 | 1,147.4 | 21,875 | 0.255 | 122.9 | ||||||||||||||||||||||||||||||||||||
Lumwana |
26,755 | 0.384 | 226.2 | 532,408 | 0.503 | 5,909.5 | 6,135.8 | 119,060 | 0.452 | 1,187.2 | ||||||||||||||||||||||||||||||||||||
Jabal Sayid (50.00%) |
1,127 | 1.627 | 40.4 | 1,603 | 2.178 | 77.0 | 117.4 | 357 | 1.646 | 13.0 | ||||||||||||||||||||||||||||||||||||
TOTAL |
129,723 | 0.361 | 1,033.8 | 585,867 | 0.493 | 6,366.7 | 7,400.6 | 141,292 | 0.425 | 1,323.1 |
(1) | Resources which are not reserves do not have demonstrated economic viability. |
(2) | See accompanying endnote #1. |
(3) | See accompanying endnote #5. |
(4) | See accompanying endnote #3. |
(5) | See accompanying endnote #4. |
BARRICK YEAR-END 2018 |
81 | RESERVES AND RESOURCES |
SUMMARY GOLD MINERAL RESERVES AND MINERAL RESOURCES (1,2,3,4)
For the years ended December 31 | 2018 | 2017 | ||||||||||||||||||||||||
Based on attributable ounces | Tonnes (000s) |
Grade (gm/t) |
Ounces (000s) |
Tonnes (000s) |
Grade (gm/t) |
Ounces (000s) |
||||||||||||||||||||
NORTH AMERICA |
||||||||||||||||||||||||||
Goldstrike Open Pit |
(proven and probable) | 58,987 | 2.99 | 5,667 | 59,211 | 2.97 | 5,654 | |||||||||||||||||||
(mineral resource) | 3,011 | 1.19 | 115 | 5,604 | 2.80 | 505 | ||||||||||||||||||||
Goldstrike Underground |
(proven and probable) | 8,908 | 9.98 | 2,858 | 8,581 | 10.02 | 2,765 | |||||||||||||||||||
(mineral resource) | 5,153 | 9.16 | 1,517 | 3,898 | 8.59 | 1,077 | ||||||||||||||||||||
Goldstrike Property Total |
(proven and probable) | 67,895 | 3.91 | 8,525 | 67,792 | 3.86 | 8,419 | |||||||||||||||||||
(mineral resource) | 8,164 | 6.22 | 1,632 | 9,502 | 5.18 | 1,582 | ||||||||||||||||||||
Pueblo Viejo (60.00%) |
(proven and probable) | 76,741 | 2.66 | 6,552 | 81,359 | 2.76 | 7,224 | |||||||||||||||||||
(mineral resource) | 101,352 | 2.46 | 8,027 | 101,686 | 2.46 | 8,054 | ||||||||||||||||||||
Cortez |
(proven and probable) | 145,054 | 1.87 | 8,737 | 167,920 | 1.87 | 10,086 | |||||||||||||||||||
(mineral resource) | 56,727 | 1.74 | 3,169 | 31,423 | 1.85 | 1,868 | ||||||||||||||||||||
Goldrush |
(proven and probable) | 6,399 | 9.69 | 1,993 | 5,671 | 8.12 | 1,481 | |||||||||||||||||||
(mineral resource) | 30,942 | 9.40 | 9,353 | 31,519 | 9.27 | 9,398 | ||||||||||||||||||||
Turquoise Ridge (75.00%) |
(proven and probable) | 16,391 | 12.97 | 6,833 | 11,771 | 15.53 | 5,878 | |||||||||||||||||||
(mineral resource) | 5,422 | 7.93 | 1,383 | 5,106 | 9.17 | 1,506 | ||||||||||||||||||||
South Arturo (60.00%) |
(proven and probable) | 4,263 | 3.01 | 412 | 3,824 | 2.97 | 365 | |||||||||||||||||||
(mineral resource) | 13,825 | 1.04 | 464 | 11,292 | 1.14 | 413 | ||||||||||||||||||||
Hemlo |
(proven and probable) | 24,102 | 2.48 | 1,924 | 24,928 | 2.21 | 1,774 | |||||||||||||||||||
(mineral resource) | 37,470 | 1.31 | 1,574 | 41,339 | 1.40 | 1,858 | ||||||||||||||||||||
Golden Sunlight |
(proven and probable) | 366 | 1.70 | 20 | 452 | 2.06 | 30 | |||||||||||||||||||
(mineral resource) | 2,897 | 1.76 | 164 | 3,134 | 1.78 | 179 | ||||||||||||||||||||
Donlin Gold (50.00%) |
(proven and probable) | | | | | | | |||||||||||||||||||
(mineral resource) | 270,668 | 2.24 | 19,503 | 270,668 | 2.24 | 19,503 | ||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||
Norte Abierto (50.00%) (5) |
(proven and probable) | 598,801 | 0.60 | 11,623 | 598,801 | 0.60 | 11,623 | |||||||||||||||||||
(mineral resource) | 850,124 | 0.49 | 13,306 | 850,124 | 0.49 | 13,306 | ||||||||||||||||||||
Pascua-Lama |
(proven and probable) | | | | | | | |||||||||||||||||||
(mineral resource) | 434,543 | 1.53 | 21,347 | 434,543 | 1.53 | 21,347 | ||||||||||||||||||||
Veladero (50.00%) (6) |
(proven and probable) | 106,576 | 0.74 | 2,538 | 113,914 | 0.77 | 2,816 | |||||||||||||||||||
(mineral resource) | 70,972 | 0.58 | 1,317 | 70,095 | 0.57 | 1,276 | ||||||||||||||||||||
Lagunas Norte |
(proven and probable) | 44,886 | 2.74 | 3,952 | 55,430 | 2.25 | 4,005 | |||||||||||||||||||
(mineral resource) | 16,950 | 1.13 | 615 | 30,942 | 0.95 | 950 | ||||||||||||||||||||
AUSTRALIA PACIFIC |
||||||||||||||||||||||||||
Porgera (47.50%) |
(proven and probable) | 13,244 | 4.93 | 2,100 | 13,255 | 4.78 | 2,038 | |||||||||||||||||||
(mineral resource) | 11,717 | 4.73 | 1,781 | 12,465 | 4.62 | 1,853 | ||||||||||||||||||||
Kalgoorlie (50.00%) |
(proven and probable) | 96,388 | 1.18 | 3,651 | 99,060 | 1.21 | 3,858 | |||||||||||||||||||
(mineral resource) | 30,798 | 1.49 | 1,479 | 15,286 | 1.16 | 571 | ||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||
Bulyanhulu (63.90%) |
(proven and probable) | 6,605 | 8.23 | 1,747 | 12,580 | 7.42 | 3,001 | |||||||||||||||||||
(mineral resource) | 5,082 | 8.37 | 1,367 | 9,208 | 9.04 | 2,676 | ||||||||||||||||||||
North Mara (63.90%) |
(proven and probable) | 16,773 | 2.59 | 1,395 | 16,926 | 2.73 | 1,488 | |||||||||||||||||||
(mineral resource) | 8,148 | 2.54 | 666 | 7,813 | 2.75 | 690 | ||||||||||||||||||||
Buzwagi (63.90%) |
(proven and probable) | 6,817 | 0.90 | 197 | 9,108 | 0.92 | 269 | |||||||||||||||||||
(mineral resource) | 2,878 | 1.04 | 96 | 2,891 | 1.04 | 97 | ||||||||||||||||||||
OTHER |
(proven and probable) | 13,556 | 0.24 | 104 | 11,838 | 0.23 | 89 | |||||||||||||||||||
(mineral resource) | 14,692 | 3.40 | 1,604 | 15,140 | 2.95 | 1,438 | ||||||||||||||||||||
TOTAL |
(proven and probable) | 1,244,857 | 1.56 | 62,303 | 1,294,629 | 1.55 | 64,444 | |||||||||||||||||||
(mineral resource) | 1,973,371 | 1.40 | 88,847 | 1,954,176 | 1.41 | 88,565 |
(1) Resources which are not reserves do not have demonstrated economic viability.
(2) See accompanying endnote #1.
(3) Measured plus indicated resources.
(4) See accompanying endnote #2.
(5) See accompanying endnote #3.
(6) See accompanying endnote #4.
BARRICK YEAR-END 2018 |
82 | RESERVES AND RESOURCES |
CONTAINED SILVER WITHIN REPORTED GOLD RESERVES (1)
For the year ended Dec. 31, 2018 |
IN PROVEN GOLD RESERVES |
IN PROBABLE GOLD RESERVES |
TOTAL | |||||||||||||||||||||||||||||||||||||||||
Contained | Contained | Contained | Process | |||||||||||||||||||||||||||||||||||||||||
Tonnes | Grade | ozs | Tonnes | Grade | ozs | Tonnes | Grade | ozs | recovery % |
|||||||||||||||||||||||||||||||||||
Based on attributable ounces |
(000s) | (gm/t) | (000s) | (000s) | (gm/t) | (000s) | (000s) | (gm/t) | (000s) | |||||||||||||||||||||||||||||||||||
NORTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||
Pueblo Viejo (60.00%) |
61,630 | 17.59 | 34,857 | 15,111 | 14.81 | 7,195 | 76,741 | 17.04 | 42,052 | 76.9 | % | |||||||||||||||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||
Norte Abierto (50.00%) (2) |
114,851 | 1.91 | 7,043 | 483,950 | 1.43 | 22,300 | 598,801 | 1.52 | 29,343 | 69.0 | % | |||||||||||||||||||||||||||||||||
Lagunas Norte |
23,630 | 5.47 | 4,152 | 21,256 | 7.01 | 4,788 | 44,886 | 6.19 | 8,940 | 35.6 | % | |||||||||||||||||||||||||||||||||
Veladero (50.00%) (3) |
9,175 | 12.79 | 3,774 | 91,068 | 14.05 | 41,131 | 100,243 | 13.93 | 44.905 | 9.4 | % | |||||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||||||
Bulyanhulu (63.90%) (4) |
1,542 | 8.90 | 441 | 3,336 | 6.19 | 664 | 4,878 | 7.05 | 1,105 | 65.0 | % | |||||||||||||||||||||||||||||||||
TOTAL |
210,828 | 7.42 | 50,267 | 614,721 | 3.85 | 76,078 | 825,549 | 4.76 | 126,345 | 48.1 | % |
(1) Silver is accounted for as a by-product credit against reported or projected gold production costs.
(2) See accompanying endnote #3.
(3) See accompanying endnote #4.
(4) See accompanying endnote #6.
CONTAINED COPPER WITHIN REPORTED GOLD RESERVES (1)
For the year ended Dec. 31, 2018 |
IN PROVEN GOLD RESERVES |
IN PROBABLE GOLD RESERVES |
TOTAL | |||||||||||||||||||||||||||||||||||||||||
Contained | Contained | Contained | Process | |||||||||||||||||||||||||||||||||||||||||
Tonnes | Grade | lbs | Tonnes | Grade | lbs | Tonnes | Grade | lbs | recovery % |
|||||||||||||||||||||||||||||||||||
Based on attributable pounds | (000s) | (%) | (millions) | (000s) | (%) | (millions) | (000s) | (%) | (millions) | |||||||||||||||||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||
Norte Abierto (50.00%) (2) |
114,851 | 0.190 | 480.9 | 483,950 | 0.226 | 2,408.8 | 598,801 | 0.219 | 2,889.7 | 87.4 | % | |||||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||||||
Bulyanhulu (63.90%) (3) |
1,542 | 0.528 | 17.9 | 3,336 | 0.555 | 40.8 | 4,878 | 0.547 | 58.8 | 90.0 | % | |||||||||||||||||||||||||||||||||
Buzwagi (63.90%) |
| | | | | | | | | | % | |||||||||||||||||||||||||||||||||
TOTAL |
116,393 | 0.194 | 498.8 | 487,286 | 0.228 | 2,449.7 | 603,679 | 0.222 | 2,948.5 | 87.5 | % |
(1) Copper is accounted for as a by-product credit against reported or projected gold production costs.
(2) See accompanying endnote #3.
(3) See accompanying endnote #6.
BARRICK YEAR-END 2018 |
83 | RESERVES AND RESOURCES |
CONTAINED SILVER WITHIN REPORTED GOLD RESOURCES (1)
For the year ended Dec. 31, 2018 |
MEASURED (M) | INDICATED (I) | (M) + (I) | INFERRED | ||||||||||||||||||||||||||||||||||||||||||||||||
Based on attributable ounces |
Tonnes
(000 s) |
Grade
(gm/t) |
Contained
(000 s) |
Tonnes
(000 s) |
Grade
(gm/t) |
Contained
(000 s) |
Ounces
(000 s) |
Tonnes
(000 s) |
Grade
(gm/t) |
Contained ozs
(000 s) |
||||||||||||||||||||||||||||||||||||||||||
NORTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Pueblo Viejo (60.00%) |
7,613 | 14.28 | 3,496 | 93,739 | 13.60 | 40,978 | 44,474 | 27,598 | 10.80 | 9,584 | ||||||||||||||||||||||||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Norte Abierto (50.00%) (2) |
321,528 | 1.20 | 12,417 | 528,596 | 1.17 | 19,804 | 32,221 | 346,770 | 1.00 | 11,162 | ||||||||||||||||||||||||||||||||||||||||||
Pascua-Lama |
42,809 | 57.21 | 78,747 | 391,734 | 52.22 | 657,718 | 736,465 | 15,400 | 17.83 | 8,830 | ||||||||||||||||||||||||||||||||||||||||||
Lagunas Norte |
1,136 | 2.82 | 103 | 15,814 | 2.70 | 1,371 | 1,474 | 1,546 | 5.23 | 260 | ||||||||||||||||||||||||||||||||||||||||||
Veladero (50.00%) (3) |
3,361 | 8.90 | 962 | 67,611 | 11.92 | 25,918 | 26,880 | 35,872 | 11.64 | 13,427 | ||||||||||||||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Bulyanhulu (63.90%) |
362 | 10.40 | 121 | 4,720 | 5.38 | 816 | 937 | 9,587 | 9.01 | 2,778 | ||||||||||||||||||||||||||||||||||||||||||
TOTAL |
376,809 | 7.91 | 95,846 | 1,102,214 | 21.07 | 746,605 | 842,451 | 436,773 | 3.28 | 46,041 |
(1) Resources which are not reserves do not have demonstrated economic viability.
(2) See accompanying endnote #3.
(3) See accompanying endnote #4.
CONTAINED COPPER WITHIN REPORTED GOLD RESOURCES (1,2)
For the year ended Dec. 31, 2018 |
IN MEASURED (M) GOLD RESOURCES |
IN INDICATED (I) GOLD RESOURCES |
(M) + (I) | INFERRED |
||||||||||||||||||||||||||||||||||||||||||
Based on attributable pounds |
Tonnes
(000 s) |
Grade
(%) |
Contained lbs
(millions) |
Tonnes
(000 s) |
Grade
(%) |
Contained lbs
(millions) |
Contained lbs
(millions) |
Tonnes
(000 s) |
Grade
(%) |
Contained lbs
(millions) |
||||||||||||||||||||||||||||||||||||
SOUTH AMERICA |
||||||||||||||||||||||||||||||||||||||||||||||
Norte Abierto (50.00%) (3) |
288,578 | 0.226 | 1,438.5 | 500,796 | 0.176 | 1,940.2 | 3,378.6 | 345,520 | 0.171 | 1,305.5 | ||||||||||||||||||||||||||||||||||||
Pascua-Lama |
42,809 | 0.101 | 95.7 | 391,734 | 0.082 | 704.6 | 800.3 | 15,400 | 0.049 | 16.5 | ||||||||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||||||||
Bulyanhulu (63.90%) |
362 | 0.609 | 4.9 | 4,720 | 0.337 | 35.1 | 40.0 | 9,587 | 0.618 | 130.6 | ||||||||||||||||||||||||||||||||||||
Buzwagi (63.90%) |
| | | 2,878 | 0.109 | 6.9 | 6.9 | 31,898 | 0.081 | 56.9 | ||||||||||||||||||||||||||||||||||||
TOTAL |
331,749 | 0.210 | 1,539.0 | 900,128 | 0.135 | 2,686.8 | 4,225.8 | 402,405 | 0.170 | 1,509.6 |
(1) Resources which are not reserves do not have demonstrated economic viability.
(2) See accompanying endnote #7.
(3) See accompanying endnote #3.
NICKEL MINERAL RESOURCES (1)
For the year ended Dec. 31, 2018 |
MEASURED (M) | INDICATED (I) | (M) + (I) | INFERRED |
||||||||||||||||||||||||||||||||||||||||||||||||
Based on attributable pounds |
Tonnes
(000 s) |
Grade
(%) |
Contained lbs
(millions) |
Tonnes
(000 s) |
Grade
(%) |
Contained lbs
(millions) |
Contained lbs
(millions) |
Tonnes
(000 s) |
Grade
(%) |
Contained lbs
(millions) |
||||||||||||||||||||||||||||||||||||||||||
AFRICA |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Kabanga (50.00%) |
6,905 | 2.490 | 379.0 | 11,705 | 2.720 | 702.0 | 1,081.0 | 10,500 | 2.596 | 601.0 |
(1) Resources which are not reserves do not have demonstrated economic viability.
BARRICK YEAR-END 2018 |
84 | RESERVES AND RESOURCES |
Mineral Reserves and Resources Endnotes
1. | Mineral reserves (reserves) and mineral resources (resources) have been estimated as at December 31, 2018 in accordance with National Instrument 43-101 as required by Canadian securities regulatory authorities. For United States reporting purposes, Industry Guide 7 under the Securities and Exchange Act of 1934 (as interpreted by Staff of the SEC), applies different standards in order to classify mineralization as a reserve. In addition, while the terms measured, indicated and inferred mineral resources are required pursuant to National Instrument 43-101, the U.S. Securities and Exchange Commission does not currently recognize such terms. Canadian standards differ significantly from the current requirements of the U.S. Securities and Exchange Commission, and mineral resource information contained herein is not comparable to similar information regarding mineral reserves disclosed in accordance with the requirements of the U.S. Securities and Exchange Commission. However, the SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the Securities and Exchange Act of 1934, as amended. These amendments will become effective February 25, 2019, and will replace the historical property disclosure requirements for mining registrants in SEC Industry Guide 7, which will be rescinded as of that date. As a result of the adoption of the SEC Modernization Rules, the SEC will recognize estimates of measured, indicated and inferred mineral resources. U.S. investors should understand that inferred mineral resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. In addition, U.S. investors are cautioned not to assume that any part or all of Barricks mineral resources constitute or will be converted into reserves. Calculations have been prepared by employees of Barrick, its joint venture partners or its joint venture operating companies, as applicable, under the supervision of Rick Sims, Vice President, Resources and Reserves, of Barrick, Geoffrey Locke, Manager, Metallurgy, of Barrick and Mike Tsafaras, P. Eng., Manager, Value Realization of Barrick, of Barrick. Except as noted below, reserves have been estimated based on an assumed gold price of US$1,200 per ounce, an assumed silver price of US$16.50 per ounce, and an assumed copper price of US$2.75 per pound and long-term average exchange rates of 1.25 CAD/US$ and 0.75 US$/AUD. Reserves at Kalgoorlie assumed a gold price of AUD $1,600 and Bulyanhulu, North Mara and Buzwagi assumed a gold price of US$1,200. Reserve estimates incorporate current and/or expected mine plans and cost levels at each property. Varying cut-off grades have been used depending on the mine and type of ore contained in the reserves. Barricks normal data verification procedures have been employed in connection with the calculations. Verification procedures include industry-standard quality control practices. Resources as at December 31, 2018 have been estimated using varying cut-off grades, depending on both the type of mine or project, its maturity and ore types at each property. For a breakdown of reserves and resources by category and for a more detailed description of the key assumptions, parameters, and methods used in estimating Barricks reserves and resources, see Barricks most recent Annual Information Form/Form 40-F on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission. |
2. | In confirming our annual reserves for each of our mineral properties, projects, and operations, we conduct a reserve test on December 31 of each year to verify that the future undiscounted cash flow from reserves is positive. The cash flow ignores all sunk costs and only considers future operating and closure expenses as well as any future capital costs. |
3. | On June 9, 2017, the Company sold 25% of its interest in Cerro Casale to Goldcorp Inc. (Goldcorp). Goldcorp concurrently purchased Kinross Gold Corporations 25% interest in Cerro Casale, resulting in Barrick and Goldcorp each holding a 50% interest in the joint operation. In connection with this transaction, Goldcorp also acquired the Caspiche Project from Exeter Resource Corporation, which was also contributed to the joint operation. Moving forward, the joint venture will be referred to as the Norte Abierto project, which includes the Cerro Casale, Caspiche and Luciano deposits. For additional information, see page 108 of Barricks Fourth Quarter and Year-End Report 2018. |
4. | On June 30, 2017, the Company sold 50 percent of its interest in the Veladero mine to Shandong Gold Group Co., Ltd. For additional information regarding this matter, see page 108 of Barricks Fourth Quarter and Year-End Report 2018. |
5. | Inferred resource contains approximately 1.2 million tonnes, containing approximately 0.7 million ounces at 18.58g/t, attributable to Fourmile. |
6. | Silver and copper probable reserve tonnage at the Bulyanhulu mine is less than the gold probable reserve tonnage because the gold reserve includes 1.7 million tonnes of tailings material which are being separately reprocessed for recovery of gold only. |
7. | Contained copper has been removed from Pueblo Viejos reserves and resources as at December 31, 2018, following a decision to suspend marginally economic copper production at the mine. The change is not expected to have any material impact on Pueblo Viejos cash flows. |
For additional for information on the contained copper reported for Pueblo Viejo as at December 31, 2017, see pages 34-35 of Barricks Annual Information Form/Form 40-F for the year ended December 31, 2017, on file with Canadian provincial securities regulatory authorities and the U.S. Securities and Exchange Commission. |
BARRICK YEAR-END 2018 |
85 | RESERVES AND RESOURCES |
MANAGEMENTS RESPONSIBILITY
Managements Responsibility for Financial Statements
The accompanying consolidated financial statements have been prepared by and are the responsibility of the Board of Directors and Management of the Company.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and reflect Managements best estimates and judgments based on currently available information. The Company has developed and maintains a system of internal controls in order to ensure, on a reasonable and cost effective basis, the reliability of its financial information.
The consolidated financial statements have been audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants. Their report outlines the scope of their examination and opinion on the consolidated financial statements.
/s/ Graham Shuttleworth
Graham Shuttleworth
Senior Executive Vice President
and Chief Financial Officer
Toronto, Canada
February 12, 2019
BARRICK YEAR-END 2018 |
86 |
MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Barricks management is responsible for establishing and maintaining internal control over financial reporting.
Barricks management assessed the effectiveness of the Companys internal control over financial reporting as at December 31, 2018. Barricks Management used the Internal Control Integrated Framework (2013) as issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to evaluate the effectiveness of Barricks internal control over financial reporting. Based on managements assessment, Barricks internal control over financial reporting is effective as at December 31, 2018.
The effectiveness of the Companys internal control over financial reporting as at December 31, 2018 has been audited by PricewaterhouseCoopers LLP, Chartered Professional Accountants, as stated in their report which is located on pages 88 - 89 of Barricks 2018 Annual Financial Statements.
BARRICK YEAR-END 2018 |
87 |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Barrick Gold Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Barrick Gold Corporation and its subsidiaries, (together, the company) as of December 31, 2018 and 2017, and the related consolidated statements of income, comprehensive income, cash flow and changes in equity for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the companys internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the company as of December 31, 2018 and 2017, and its financial performance and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). Also in our opinion, the company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The companys management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Managements Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the companys consolidated financial statements and on the companys internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
(Signed) PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
February 12, 2019
We have served as the companys auditor since at least 1982. We have not been able to determine the specific year we began serving as auditor of the company.
Consolidated Statements of Income
Barrick Gold Corporation For the years ended December 31 (in millions of United States dollars, except per share data)
|
2018
|
2017
|
||||||
Revenue (notes 5 and 6) |
$7,243 | $8,374 | ||||||
Costs and expenses |
||||||||
Cost of sales (notes 5 and 7) |
5,220 | 5,300 | ||||||
General and administrative expenses (note 11) |
265 | 248 | ||||||
Exploration, evaluation and project expenses (notes 5 and 8) |
383 | 354 | ||||||
Impairment charges (reversals) (note 10) |
900 | (212 | ) | |||||
Loss on currency translation (note 9b) |
136 | 72 | ||||||
Closed mine rehabilitation (note 27b) |
(13 | ) | 55 | |||||
Income from equity investees (note 16) |
(46 | ) | (76 | ) | ||||
Gain on non-hedge derivatives (note 25e) |
| (6 | ) | |||||
Other expense (income) (note 9a) |
90 | (799 | ) | |||||
Income before finance items and income taxes |
308 | 3,438 | ||||||
Finance costs, net (note 14) |
(545 | ) | (691 | ) | ||||
Loss (income) before income taxes |
(237 | ) | 2,747 | |||||
Income tax expense (note 12) |
(1,198 | ) | (1,231 | ) | ||||
Net (loss) income |
($1,435 | ) | $1,516 | |||||
Attributable to: |
||||||||
Equity holders of Barrick Gold Corporation |
($1,545 | ) | $1,438 | |||||
Non-controlling interests (note 32) |
$110 | $78 | ||||||
Earnings (loss) per share data attributable to the equity holders of Barrick Gold Corporation (note 13) |
||||||||
Net (loss) income |
||||||||
Basic |
($1.32 | ) | $1.23 | |||||
Diluted |
($1.32 | ) | $1.23 |
The accompanying notes are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2018 |
90 | FINANCIAL STATEMENTS |
Consolidated Statements of Comprehensive Income
Barrick Gold Corporation For the years ended December 31 (in millions of United States dollars)
|
2018
|
2017
|
||||||
Net (loss) income |
($1,435 | ) | $1,516 | |||||
Other comprehensive income (loss), net of taxes |
||||||||
Items that may be reclassified subsequently to profit or loss: |
||||||||
Unrealized gains (losses) on derivatives designated as cash flow hedges, net of tax ($12) and $3 |
8 | (16 | ) | |||||
Realized (gains) losses on derivatives designated as cash flow hedges, net of tax $3 and ($9) |
(2 | ) | 23 | |||||
Currency translation adjustments, net of tax $nil and $nil |
(9 | ) | 9 | |||||
Items that will not be reclassified to profit or loss: |
||||||||
Actuarial gain (loss) on post-employment benefit obligations, net of tax $nil and ($6) |
(2 | ) | 18 | |||||
Net change on equity investments, net of tax $nil and $nil |
16 | 4 | ||||||
Total other comprehensive income |
11 | 38 | ||||||
Total comprehensive (loss) income |
($1,424 | ) | $1,554 | |||||
Attributable to: |
||||||||
Equity holders of Barrick Gold Corporation |
($1,534 | ) | $1,476 | |||||
Non-controlling interests |
$110 | $78 |
The accompanying notes are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2018 |
91 | FINANCIAL STATEMENTS |
Consolidated Statements of Cash Flow
Barrick Gold Corporation For the years ended December 31 (in millions of United States dollars)
|
2018
|
2017
|
||||||
OPERATING ACTIVITIES |
||||||||
Net (loss) income |
($1,435 | ) | $1,516 | |||||
Adjustments for the following items: |
||||||||
Depreciation |
1,457 | 1,647 | ||||||
Finance costs (note 14) |
560 | 705 | ||||||
Impairment charges (reversals) (note 10) |
900 | (212 | ) | |||||
Income tax expense (note 12) |
1,198 | 1,231 | ||||||
Loss on currency translation (note 9b) |
136 | 72 | ||||||
Gain on sale of non-current assets/investments (note 9a) |
(68 | ) | (911 | ) | ||||
Change in working capital (note 15) |
(173 | ) | (590 | ) | ||||
Other operating activities (note 15) |
(62 | ) | (319 | ) | ||||
Operating cash flows before interest and income taxes | 2,513 | 3,139 | ||||||
Interest paid |
(350 | ) | (425 | ) | ||||
Income taxes paid |
(398 | ) | (649 | ) | ||||
Net cash provided by operating activities | 1,765 | 2,065 | ||||||
INVESTING ACTIVITIES |
||||||||
Property, plant and equipment |
||||||||
Capital expenditures (note 5) |
(1,400 | ) | (1,396 | ) | ||||
Sales proceeds |
70 | 28 | ||||||
Divestitures (note 4) |
| 990 | ||||||
Investment purchases |
(159 | ) | (7 | ) | ||||
Net funds (invested) received from equity method investments |
(5 | ) | 48 | |||||
Net cash used in investing activities |
(1,494 | ) | (337 | ) | ||||
FINANCING ACTIVITIES |
||||||||
Debt (note 25b) |
||||||||
Repayments |
(687 | ) | (1,533 | ) | ||||
Dividends (note 31) |
(125 | ) | (125 | ) | ||||
Funding from non-controlling interests (note 32) |
24 | 13 | ||||||
Disbursements to non-controlling interests (note 32) |
(108 | ) | (139 | ) | ||||
Debt extinguishment costs |
(29 | ) | (102 | ) | ||||
Net cash used in financing activities |
(925 | ) | (1,886 | ) | ||||
Effect of exchange rate changes on cash and equivalents |
(9 | ) | 3 | |||||
Net decrease in cash and equivalents |
(663 | ) | (155 | ) | ||||
Cash and equivalents at beginning of year (note 25a) |
2,234 | 2,389 | ||||||
Cash and equivalents at the end of year |
$1,571 | $2,234 |
The accompanying notes are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2018 |
92 | FINANCIAL STATEMENTS |
Consolidated Balance Sheets
Barrick Gold Corporation (in millions of United States dollars) |
As at December 31, 2018 |
As at December 31, 2017 |
||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and equivalents (note 25a) |
$1,571 | $2,234 | ||||||
Accounts receivable (note 18) |
248 | 239 | ||||||
Inventories (note 17) |
1,852 | 1,890 | ||||||
Other current assets (note 18) |
307 | 321 | ||||||
Total current assets |
3,978 | 4,684 | ||||||
Non-current assets |
||||||||
Non-current portion of inventory (note 17) |
1,696 | 1,681 | ||||||
Equity in investees (note 16) |
1,234 | 1,213 | ||||||
Property, plant and equipment (note 19) |
12,826 | 13,806 | ||||||
Intangible assets (note 20a) |
227 | 255 | ||||||
Goodwill (note 20b) |
1,176 | 1,330 | ||||||
Deferred income tax assets (note 30) |
259 | 1,069 | ||||||
Other assets (note 22) |
1,235 | 1,270 | ||||||
Total assets |
$22,631 | $25,308 | ||||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable (note 23) |
$1,101 | $1,059 | ||||||
Debt (note 25b) |
43 | 59 | ||||||
Current income tax liabilities |
203 | 298 | ||||||
Other current liabilities (note 24) |
321 | 331 | ||||||
Total current liabilities |
1,668 | 1,747 | ||||||
Non-current liabilities |
||||||||
Debt (note 25b) |
5,695 | 6,364 | ||||||
Provisions (note 27) |
2,904 | 3,141 | ||||||
Deferred income tax liabilities (note 30) |
1,236 | 1,245 | ||||||
Other liabilities (note 29) |
1,743 | 1,744 | ||||||
Total liabilities |
13,246 | 14,241 | ||||||
Equity |
||||||||
Capital stock (note 31) |
20,883 | 20,893 | ||||||
Deficit |
(13,453 | ) | (11,759 | ) | ||||
Accumulated other comprehensive loss |
(158 | ) | (169 | ) | ||||
Other |
321 | 321 | ||||||
Total equity attributable to Barrick Gold Corporation shareholders |
7,593 | 9,286 | ||||||
Non-controlling interests (note 32) |
1,792 | 1,781 | ||||||
Total equity |
9,385 | 11,067 | ||||||
Contingencies and commitments (notes 2, 17, 19 and 36) |
||||||||
Total liabilities and equity |
$22,631 | $25,308 |
The accompanying notes are an integral part of these consolidated financial statements.
Signed on behalf of the Board, | ||
/s/ John L. Thornton | /s/ J. Brett Harvey | |
John L. Thornton, Chairman | J. Brett Harvey, Director |
BARRICK YEAR-END 2018 |
93 | FINANCIAL STATEMENTS |
Consolidated Statements of Changes in Equity
Barrick Gold Corporation
|
Attributable to equity holders of the Company
|
|||||||||||||||||||||||||||||||
(in millions of United States dollars) | Common Shares (in thousands) |
Capital stock |
Retained earnings (deficit) |
Accumulated other comprehensive income (loss)1 |
Other2 | Total equity shareholders |
Non- controlling |
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 2y) |
| | 64 | | | 64 | | 64 | ||||||||||||||||||||||||
At January 1, 2018 (restated) |
1,166,577 | $20,893 | ($11,695 | ) | ($169 | ) | $321 | $9,350 | $1,781 | $11,131 | ||||||||||||||||||||||
Net (loss) income |
| | (1,545 | ) | | | (1,545 | ) | 110 | (1,435 | ) | |||||||||||||||||||||
Total other comprehensive income |
| | | 11 | | 11 | | 11 | ||||||||||||||||||||||||
Total comprehensive (loss) income |
| $ | ($1,545 | ) | $11 | $ | ($1,534 | ) | $110 | ($1,424 | ) | |||||||||||||||||||||
Transactions with owners |
||||||||||||||||||||||||||||||||
Dividends |
| | (199 | ) | | | (199 | ) | | (199 | ) | |||||||||||||||||||||
Issued on exercise of stock options |
20 | | | | | | | | ||||||||||||||||||||||||
Dividend reinvestment plan |
1,250 | 14 | (14 | ) | | | | | | |||||||||||||||||||||||
Funding from non-controlling interests |
| | | | | | 24 | 24 | ||||||||||||||||||||||||
Other decrease in non-controlling interests |
| | | | | | (123 | ) | (123 | ) | ||||||||||||||||||||||
Other3 |
| (24 | ) | | | | (24 | ) | | (24 | ) | |||||||||||||||||||||
Total transactions with owners |
1,270 | ($10 | ) | ($213 | ) | $ | $ | ($223 | ) | ($99 | ) | ($322 | ) | |||||||||||||||||||
At December 31, 2018 |
1,167,847 | $20,883 | ($13,453 | ) | ($158 | ) | $321 | $7,593 | $1,792 | $9,385 | ||||||||||||||||||||||
At January 1, 2017 |
1,165,574 | $20,877 | ($13,074 | ) | ($189 | ) | $321 | $7,935 | $2,378 | $10,313 | ||||||||||||||||||||||
Net Income |
| | 1,438 | | | 1,438 | 78 | 1,516 | ||||||||||||||||||||||||
Total other comprehensive income |
| | 18 | 20 | | 38 | | 38 | ||||||||||||||||||||||||
Total comprehensive income |
| $ | $1,456 | $20 | $ | $1,476 | $78 | $1,554 | ||||||||||||||||||||||||
Transactions with owners |
||||||||||||||||||||||||||||||||
Dividends |
| | (125 | ) | | | (125 | ) | | (125 | ) | |||||||||||||||||||||
Dividend reinvestment plan |
1,003 | 16 | (16 | ) | | | | | | |||||||||||||||||||||||
Decrease in non-controlling interests (note 4d) |
| | | | | | (493 | ) | (493 | ) | ||||||||||||||||||||||
Funding from non-controlling interests |
| | | | | | 13 | 13 | ||||||||||||||||||||||||
Other decrease in non-controlling interests |
| | | | | | (195 | ) | (195 | ) | ||||||||||||||||||||||
Total transactions with owners |
1,003 | $16 | ($141 | ) | $ | $ | ($125 | ) | ($675 | ) | ($800 | ) | ||||||||||||||||||||
At December 31, 2017 |
1,166,577 | $20,893 | ($11,759 | ) | ($169 | ) | $321 | $9,286 | $1,781 | 11,067 |
1 | Includes cumulative translation adjustments as at December 31, 2018: $82 million loss (2017: $73 million loss). |
2 | Includes additional paid-in capital as at December 31, 2018: $283 million (December 31, 2017: $283 million) and convertible borrowings equity component as at December 31, 2018: $38 million (December 31, 2017: $38 million). |
3 | Represents a reversal of a previously recognized deferred tax asset, which was originally recognized in capital stock. |
The accompanying notes are an integral part of these consolidated financial statements.
BARRICK YEAR-END 2018 |
94 | FINANCIAL STATEMENTS |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BARRICK YEAR-END 2018 |
95 | NOTES TO FINANCIAL STATEMENTS |
Place of business | Entity type | Economic interest1 | Method2 | |||||
Acacia Mining plc3 |
Tanzania | Subsidiary, publicly traded | 63.9% | Consolidation | ||||
Pueblo Viejo3 |
Dominican Republic | Subsidiary | 60% | Consolidation | ||||
South Arturo3 |
United States | Subsidiary | 60% | Consolidation | ||||
Norte Abierto Project4 |
Chile | JO | 50% | Our share | ||||
Donlin Gold Project |
United States | JO | 50% | Our share | ||||
Kalgoorlie Mine |
Australia | JO | 50% | Our share | ||||
Porgera Mine5 |
Papua New Guinea | JO | 47.5% | Our share | ||||
Turquoise Ridge Mine5 |
United States | JO | 75% | Our share | ||||
Veladero6 |
Argentina | JO | 50% | Our share | ||||
GNX7,8 |
Chile | JV | 50% | Equity Method | ||||
Jabal Sayid7 |
Saudi Arabia | JV | 50% | Equity Method | ||||
Kabanga Project7,8 |
Tanzania | JV | 50% | Equity Method | ||||
Zaldívar7 |
Chile | JV | 50% | Equity Method |
1 | Unless otherwise noted, all of our joint arrangements are funded by contributions made by the parties sharing joint control in proportion to their economic interest. |
2 | For our JOs, we recognize our share of any assets, liabilities, revenues and expenses of the JO. |
3 | We consolidate our interests in Acacia, Pueblo Viejo and South Arturo and record a non-controlling interest for the 36.1%, 40% and 40%, respectively, that we do not own. |
4 | We divested 25% of Cerro Casale on June 9, 2017, bringing our ownership down to 50%. As part of that transaction, we formed a joint operation with Goldcorp. The joint operation, which is now referred to as the Norte Abierto project, includes the Cerro Casale, Caspiche and Luciano deposits. |
5 | We have joint control given that decisions about relevant activities require unanimous consent of the parties to the joint operation. |
6 | We divested 50% of Veladero on June 30, 2017, bringing our ownership down to 50%. |
7 | Barrick has commitments of $307 million relating to its interest in the joint ventures. |
8 | These JVs are early stage exploration projects and, as such, do not have any significant assets, liabilities, income, contractual commitments or contingencies. Expenses are recognized through our equity pick-up (loss). Refer to note 16 for further details. |
BARRICK YEAR-END 2018 |
96 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
97 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
98 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
99 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
100 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
101 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
102 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
103 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
104 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
105 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
106 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
107 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
108 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
109 | NOTES TO FINANCIAL STATEMENTS |
5 > SEGMENT INFORMATION
Barricks business is organized into eleven individual minesites, one grouping of two minesites, one publicly traded company and one project. Barricks CODM reviews the operating results, assesses performance and makes capital allocation decisions at the minesite, grouping, Company and/or project level. During the third quarter of 2018, Barricks president, who was our CODM, resigned from the Company. Three members of our executive management team, our Executive Vice President and Chief Financial Officer, Chief Investment Officer and Senior Vice President, Operational and Technical Excellence, together assumed the role of CODM through December 31, 2018. Following completion of the merger with Randgold on January 1, 2019, Mark Bristow, as President and Chief Executive Officer, has assumed this role. Each individual minesite, with the exception of Barrick Nevada, Acacia and the Pascua-Lama project, are operating segments for financial reporting purposes. Our presentation of our reportable operating segments is four individual gold mines (Pueblo Viejo, Lagunas Norte, Veladero and Turquoise Ridge), Barrick Nevada, Acacia and our Pascua-Lama project. The remaining operating segments, our remaining gold and copper mines, have been grouped into an other category and will not be reported on individually. Segment performance is evaluated based on a number of measures including operating income before tax, production levels and unit production costs. Certain costs are managed on a consolidated basis and are therefore not reflected in segment income.
Consolidated Statements of Income Information
Cost of Sales | ||||||||||||||||||||||||
For the year ended December 31, 2018 | Revenue | Direct mining, royalties and community relations |
Depreciation | Exploration, evaluation and project expenses |
Other expenses (income)1 |
Segment income (loss) |
||||||||||||||||||
Barrick Nevada |
$2,655 | $1,066 | $649 | $36 | $14 | $890 | ||||||||||||||||||
Turquoise Ridge |
331 | 178 | 28 | | (1 | ) | 126 | |||||||||||||||||
Pueblo Viejo2 |
1,333 | 547 | 185 | 21 | 1 | 579 | ||||||||||||||||||
Veladero |
366 | 189 | 121 | 2 | 1 | 53 | ||||||||||||||||||
Lagunas Norte |
332 | 291 | 46 | 2 | 6 | (13 | ) | |||||||||||||||||
Acacia2 |
664 | 367 | 89 | | 37 | 171 | ||||||||||||||||||
Pascua-Lama |
| | 11 | 77 | 7 | (95 | ) | |||||||||||||||||
Other Mines3 |
1,562 | 1,117 | 305 | 12 | 30 | 98 | ||||||||||||||||||
$7,243 | $3,755 | $1,434 | $150 | $95 | $1,809 |
Consolidated Statements of Income Information
Cost of Sales | ||||||||||||||||||||||||
For the year ended December 31, 2017 | Revenue | Direct mining, royalties and community relations |
Depreciation | Exploration, evaluation and project expenses |
Other expenses (income)1 |
Segment income (loss) |
||||||||||||||||||
Barrick Nevada |
$2,961 | $1,076 | $793 | $24 | $16 | $1,052 | ||||||||||||||||||
Turquoise Ridge |
280 | 131 | 28 | | 2 | 119 | ||||||||||||||||||
Pueblo Viejo2 |
1,417 | 501 | 229 | | 16 | 671 | ||||||||||||||||||
Veladero |
591 | 291 | 119 | 3 | 5 | 173 | ||||||||||||||||||
Lagunas Norte |
514 | 177 | 68 | 4 | 6 | 259 | ||||||||||||||||||
Acacia2 |
751 | 362 | 107 | | 91 | 191 | ||||||||||||||||||
Pascua-Lama |
| | 8 | 125 | (10 | ) | (123 | ) | ||||||||||||||||
Other Mines3 |
1,860 | 1,086 | 267 | 12 | 31 | 464 | ||||||||||||||||||
$8,374 | $3,624 | $1,619 | $168 | $157 | $2,806 |
1 | Includes accretion expense, which is included with finance costs in the consolidated statements of income. For the year ended December 31, 2018, accretion expense was $74 million (2017: $55 million). |
2 | Includes non-controlling interest portion of revenues, cost of sales and segment income for the year ended December 31, 2018, for Pueblo Viejo, $535 million, $289 million, $237 million (2017: $567 million, $285 million, $276 million) and Acacia, $240 million, $164 million, $63 million (2017: $271 million, $169 million, $69 million). |
3 | Includes cost of sales of Pierina for the year ended December 31, 2018 of $116 million (2017: $174 million). |
BARRICK YEAR-END 2018 |
110 | NOTES TO FINANCIAL STATEMENTS |
Reconciliation of Segment Income to Income from Continuing Operations Before Income Taxes
For the years ended December 31 | 2018 | 2017 | ||||||
Segment income |
$1,809 | $2,806 | ||||||
Other cost of sales/amortization1 |
(31 | ) | (57 | ) | ||||
Exploration, evaluation and project expenses not attributable to segments |
(233 | ) | (186 | ) | ||||
General and administrative expenses |
(265 | ) | (248 | ) | ||||
Other (expense) income not attributable to segments |
(69 | ) | 901 | |||||
Impairment charges (reversals) |
(900 | ) | 212 | |||||
Loss on currency translation |
(136 | ) | (72 | ) | ||||
Closed mine rehabilitation |
13 | (55 | ) | |||||
Income from equity investees |
46 | 76 | ||||||
Finance costs, net (includes non-segment accretion)2 |
(471 | ) | (636 | ) | ||||
Gain on non-hedge derivatives3 |
| 6 | ||||||
Income before income taxes |
($237 | ) | $2,747 |
1 | Includes realized hedge losses of $4 million (2017: $27 million losses). |
2 | Includes debt extinguishment losses of $29 million (2017: $127 million losses). |
3 | Includes unrealized non-hedge losses of $1 million (2017: $1 million gains). |
Geographic Information
Non-current assets | Revenue1 | |||||||||||||||
As at December 31, 2018 |
As at December 31, 2017 |
2018 | 2017 | |||||||||||||
United States |
$6,768 | $6,641 | $3,025 | $3,299 | ||||||||||||
Dominican Republic |
3,460 | 3,480 | 1,334 | 1,417 | ||||||||||||
Argentina |
1,721 | 2,217 | 366 | 591 | ||||||||||||
Chile |
2,500 | 2,469 | | | ||||||||||||
Tanzania |
1,045 | 1,129 | 664 | 751 | ||||||||||||
Peru |
145 | 734 | 449 | 676 | ||||||||||||
Australia |
395 | 463 | 408 | 456 | ||||||||||||
Zambia |
735 | 787 | 502 | 612 | ||||||||||||
Papua New Guinea |
348 | 351 | 269 | 322 | ||||||||||||
Saudi Arabia |
408 | 371 | | | ||||||||||||
Canada |
432 | 625 | 226 | 250 | ||||||||||||
Unallocated |
696 | 1,357 | | | ||||||||||||
Total |
$18,653 | $20,624 | $7,243 | $8,374 |
1 | Presented based on the location from which the product originated. |
Capital Expenditures Information
Segment Capital Expenditures1 | ||||||||
As at December 31, 2018 | As at December 31, 2017 | |||||||
Barrick Nevada |
$581 | $585 | ||||||
Turquoise Ridge |
62 | 36 | ||||||
Pueblo Viejo |
145 | 114 | ||||||
Veladero |
143 | 173 | ||||||
Lagunas Norte |
22 | 25 | ||||||
Acacia |
93 | 148 | ||||||
Pascua-Lama |
39 | 6 | ||||||
Other Mines |
314 | 259 | ||||||
Segment total |
$1,399 | $1,346 | ||||||
Other items not allocated to segments |
44 | 36 | ||||||
Total |
$1,443 | $1,382 |
1 | Segment capital expenditures are presented for internal management reporting purposes on an accrual basis. Capital expenditures in the consolidated statements of cash flow are presented on a cash basis. In 2018, cash expenditures were $1,400 million (2017: $1,396 million) and the increase in accrued expenditures was $43 million (2017: $14 million decrease). |
BARRICK YEAR-END 2018 |
111 | NOTES TO FINANCIAL STATEMENTS |
7 > COST OF SALES
Gold | Copper | Other4 | Total | |||||||||||||||||||||||||||||
For the years ended December 31 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Direct mining cost1,2,3 |
$3,130 | $3,063 | $344 | $274 | $7 | $28 | $3,481 | $3,365 | ||||||||||||||||||||||||
Depreciation |
1,253 | 1,529 | 170 | 83 | 34 | 35 | 1,457 | 1,647 | ||||||||||||||||||||||||
Royalty expense |
196 | 206 | 39 | 38 | | | 235 | 244 | ||||||||||||||||||||||||
Community relations |
42 | 38 | 5 | 4 | | 2 | 47 | 44 | ||||||||||||||||||||||||
Total |
$4,621 | $4,836 | $558 | $399 | $41 | $65 | $5,220 | $5,300 |
1 | Direct mining cost related to gold and copper includes charges to reduce the cost of inventory to net realizable value of $199 million (2017: $21 million). Refer to note 17. |
2 | Direct mining cost related to gold includes the costs of extracting by-products and export duties paid in Argentina. |
3 | Includes employee costs of $1,001 million (2017: $1,051 million). |
4 | Other includes realized hedge gains and losses and corporate amortization. |
BARRICK YEAR-END 2018 |
112 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
113 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
114 | NOTES TO FINANCIAL STATEMENTS |
13 > EARNINGS (LOSS) PER SHARE
2018 | 2017 | |||||||||||||||
For the years ended December 31 ($ millions, except shares in millions and per share amounts in dollars) | Basic | Diluted | Basic | Diluted | ||||||||||||
Net (loss) income |
($1,435 | ) | ($1,435 | ) | $1,516 | $1,516 | ||||||||||
Net income attributable to non-controlling interests |
(110 | ) | (110 | ) | (78 | ) | (78 | ) | ||||||||
Net (loss) income attributable to the equity holders of Barrick Gold Corporation |
($1,545 | ) | ($1,545 | ) | $1,438 | $1,438 | ||||||||||
Weighted average shares outstanding |
1,167 | 1,167 | 1,166 | 1,166 | ||||||||||||
Basic and diluted earnings (loss) per share data attributable to the equity holders of Barrick Gold Corporation | ($1.32 | ) | ($1.32 | ) | $1.23 | $1.23 |
14 > FINANCE COSTS, NET
For the years ended December 31 | 2018 | 2017 | ||||||
Interest1 |
$452 | $511 | ||||||
Amortization of debt issue costs |
5 | 5 | ||||||
Amortization of discount (premium) |
(1 | ) | 1 | |||||
Gain on interest rate hedges |
(3 | ) | (6 | ) | ||||
Interest capitalized2 |
(9 | ) | | |||||
Accretion |
87 | 67 | ||||||
Loss on debt extinguishment3 |
29 | 127 | ||||||
Finance income |
(15 | ) | (14 | ) | ||||
Total |
$545 | $691 |
1 | Interest in the consolidated statements of cash flow is presented on a cash basis. In 2018, cash interest paid was $350 million (2017: $425 million). |
2 | For the year ended December 31, 2018, the general capitalization rate was 6.10% (2017: 6.00%). |
3 | 2018 loss arose from a make-whole repurchase of the outstanding principal on the 4.40% notes due 2021. 2017 loss arose from partial repayment of several notes during the year (4.10% notes due 2023, 6.95% notes due 2019, and Pueblo Viejo Project Financing). |
BARRICK YEAR-END 2018 |
115 | NOTES TO FINANCIAL STATEMENTS |
15 > CASH FLOW OTHER ITEMS
Operating Cash Flows - Other Items
For the years ended December 31 | 2018 | 2017 | ||||||
Adjustments for non-cash income statement items: |
||||||||
Gain on non-hedge derivatives (note 25e) |
$ | ($6 | ) | |||||
Stock-based compensation expense |
33 | 80 | ||||||
Income from investment in equity investees (note 16) |
(46 | ) | (76 | ) | ||||
Change in estimate of rehabilitation costs at closed mines |
(13 | ) | 55 | |||||
Net inventory impairment charges (note 17) |
199 | 21 | ||||||
Change in other assets and liabilities |
(169 | ) | (334 | ) | ||||
Settlement of rehabilitation obligations |
(66 | ) | (59 | ) | ||||
Other operating activities |
($62 | ) | ($319 | ) | ||||
Cash flow arising from changes in: |
||||||||
Accounts receivable |
($9 | ) | $8 | |||||
Inventory |
(111 | ) | (372 | ) | ||||
Other current assets |
(109 | ) | (278 | ) | ||||
Accounts payable |
19 | 103 | ||||||
Other current liabilities |
37 | (51 | ) | |||||
Change in working capital |
($173 | ) | ($590 | ) |
16 > INVESTMENTS
Equity Accounting Method Investment Continuity
Kabanga | Jabal Sayid | Zaldívar | GNX | Total | ||||||||||||||||
At January 1, 2017 |
$30 | $180 | $974 | $1 | $1,185 | |||||||||||||||
Equity pick-up (loss) from equity investees |
(1 | ) | 26 | 61 | (10 | ) | 76 | |||||||||||||
Funds invested |
1 | | | 11 | 12 | |||||||||||||||
Dividend |
| | (60 | ) | | (60 | ) | |||||||||||||
At December 31, 2017 |
$30 | $206 | $975 | $2 | $1,213 | |||||||||||||||
Equity pick-up (loss) from equity investees |
| 39 | 14 | (7 | ) | 46 | ||||||||||||||
Funds invested |
| | | 5 | 5 | |||||||||||||||
Impairment charges |
(30 | ) | | | | (30 | ) | |||||||||||||
At December 31, 2018 |
$ | $245 | $989 | $ | $1,234 | |||||||||||||||
Publicly traded |
No | No | No | No |
BARRICK YEAR-END 2018 |
116 | NOTES TO FINANCIAL STATEMENTS |
Summarized Equity Investee Financial Information
Jabal Sayid | Zaldívar | |||||||||||||||
For the years ended December 31 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue |
$296 | $214 | $599 | $649 | ||||||||||||
Cost of sales (excluding depreciation) |
158 | 116 | 404 | 375 | ||||||||||||
Depreciation |
39 | 33 | 118 | 111 | ||||||||||||
Finance expense |
2 | 3 | | 1 | ||||||||||||
Other expense (income) |
9 | 2 | 25 | | ||||||||||||
Income from continuing operations before tax |
$88 | $60 | $52 | $162 | ||||||||||||
Income tax expense |
(10 | ) | (8 | ) | (24 | ) | (40 | ) | ||||||||
Income from continuing operations after tax |
$78 | $52 | $28 | $122 | ||||||||||||
Total comprehensive income |
$78 | $52 | $28 | $122 | ||||||||||||
Summarized Balance Sheet | ||||||||||||||||
Jabal Sayid | Zaldívar | |||||||||||||||
For the years ended December 31 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Cash and equivalents |
$128 | $50 | $129 | $72 | ||||||||||||
Other current assets1 |
68 | 70 | 602 | 563 | ||||||||||||
Total current assets |
$196 | $120 | $731 | $635 | ||||||||||||
Non-current assets |
482 | 485 | 1,927 | 1,582 | ||||||||||||
Total assets |
$678 | $605 | $2,658 | $2,217 | ||||||||||||
Current financial liabilities (excluding trade, other payables & provisions) |
$48 | $12 | $18 | $19 | ||||||||||||
Other current liabilities |
41 | 35 | 85 | 110 | ||||||||||||
Total current liabilities |
$89 | $47 | $103 | $129 | ||||||||||||
Non-current financial liabilities (excluding trade, other payables & provisions) |
331 | 379 | 12 | 20 | ||||||||||||
Other non-current liabilities |
14 | 13 | 546 | 99 | ||||||||||||
Total non-current liabilities |
$345 | $392 | $558 | $119 | ||||||||||||
Total liabilities |
$434 | $439 | $661 | $248 | ||||||||||||
Net assets |
$244 | $166 | $1,997 | $1,969 |
1 | Zaldívar other current assets include inventory of $533 million (2017: $451 million). |
The information above reflects the amounts presented in the financial information of the joint venture adjusted for differences between IFRS and local GAAP.
Reconciliation of Summarized Financial Information to Carrying Value
Jabal Sayid1 | Zaldívar | |||||||
Opening net assets |
$166 | $1,969 | ||||||
Income for the period |
78 | 28 | ||||||
Dividend |
| | ||||||
Closing net assets, December 31 |
$244 | $1,997 | ||||||
Barricks share of net assets (50%) |
122 | 999 | ||||||
Equity earnings adjustment |
| (10 | ) | |||||
Goodwill recognition |
123 | | ||||||
Carrying value |
$245 | $989 |
1 | A $165 million non-interest bearing shareholder loan due from the Jabal Sayid JV is presented as part of Other Assets (see note 22). |
BARRICK YEAR-END 2018 |
117 | NOTES TO FINANCIAL STATEMENTS |
17 > INVENTORIES
Gold | Copper | |||||||||||||||
As at December 31, 2018 |
As at December 31, 2017 |
As at December 31, 2018 |
As at December 31, 2017 |
|||||||||||||
Raw materials |
||||||||||||||||
Ore in stockpiles |
$2,106 | $2,125 | $151 | $102 | ||||||||||||
Ore on leach pads |
405 | 405 | | | ||||||||||||
Mine operating supplies |
496 | 515 | 66 | 79 | ||||||||||||
Work in process |
146 | 174 | | | ||||||||||||
Finished products |
176 | 168 | 2 | 3 | ||||||||||||
$3,329 | $3,387 | $219 | $184 | |||||||||||||
Non-current ore in stockpiles1 |
(1,696 | ) | (1,681 | ) | | | ||||||||||
$1,633 | $1,706 | $219 | $184 |
1 | Ore that we do not expect to process in the next 12 months is classified within other long-term assets. |
Inventory Impairment Charges | ||||||||
For the years ended December 31 | 2018 | 2017 | ||||||
Lagunas Norte |
$166 | $ | ||||||
Lumwana |
18 | | ||||||
Golden Sunlight |
10 | 6 | ||||||
Pierina |
4 | 11 | ||||||
Porgera |
1 | 4 | ||||||
Inventory impairment charges1 |
$199 | $21 |
1 | Impairment charges in 2018 primarily relate to stockpiles at Lagunas Norte (refer to note 21). Impairment charges in 2017 primarily relate to leach pad inventories at Pierina. |
Ore in Stockpiles | ||||||||
As at December 31, 2018 |
As at December 31, 2017 |
|||||||
Gold | ||||||||
Barrick Nevada |
$1,083 | $1,040 | ||||||
Pueblo Viejo |
603 | 538 | ||||||
Kalgoorlie |
125 | 138 | ||||||
Buzwagi |
83 | 109 | ||||||
North Mara |
70 | 47 | ||||||
Lagunas Norte |
49 | 147 | ||||||
Veladero |
39 | 22 | ||||||
Porgera |
37 | 55 | ||||||
Turquoise Ridge |
13 | 26 | ||||||
Other |
4 | 3 | ||||||
Copper | ||||||||
Lumwana |
151 | 102 | ||||||
$2,257 | $2,227 | |||||||
Ore on Leach pads | ||||||||
As at December 31, 2018 |
As at December 31, 2017 |
|||||||
Gold | ||||||||
Lagunas Norte |
$168 | $143 | ||||||
Veladero |
138 | 145 | ||||||
Nevada |
81 | 105 | ||||||
Pierina |
18 | 12 | ||||||
$405 | $405 |
BARRICK YEAR-END 2018 |
118 | NOTES TO FINANCIAL STATEMENTS |
Purchase Commitments
At December 31, 2018, we had purchase obligations for supplies and consumables of approximately $1,972 million (2017: $1,147 million).
18 > ACCOUNTS RECEIVABLE AND OTHER CURRENT ASSETS
As at December 31, 2018 |
As at December 31, 2017 |
|||||||
Accounts receivable | ||||||||
Amounts due from concentrate sales |
$76 | $110 | ||||||
Other receivables |
172 | 129 | ||||||
$248 | $239 | |||||||
Other current assets | ||||||||
Derivative assets (note 25f) |
$2 | $2 | ||||||
Goods and services taxes recoverable1 |
182 | 167 | ||||||
Prepaid expenses |
72 | 68 | ||||||
Other |
51 | 84 | ||||||
$307 | $321 |
1 | Primarily includes VAT and fuel tax recoverables of $67 million in Tanzania, $60 million in Zambia, $22 million in Argentina, $2 million in Chile, $12 million in the Dominican Republic, and $7 million in Peru (Dec. 31, 2017: $32 million, $31 million, $49 million, $3 million, $19 million and $8 million, respectively). |
BARRICK YEAR-END 2018 |
119 | NOTES TO FINANCIAL STATEMENTS |
19 > PROPERTY, PLANT AND EQUIPMENT
Buildings, plant and equipment |
Mining property costs subject to depreciation1,3 |
Mining property costs not subject to depreciation1,2 |
Total | |||||||||||||
At January 1, 2018 |
||||||||||||||||
Net of accumulated depreciation |
$4,213 | $6,522 | $3,071 | $13,806 | ||||||||||||
Additions4 |
(21 | ) | 199 | 1,050 | 1,228 | |||||||||||
Capitalized interest |
| | 9 | 9 | ||||||||||||
Disposals |
(7 | ) | | | (7 | ) | ||||||||||
Depreciation |
(790 | ) | (772 | ) | | (1,562 | ) | |||||||||
Impairment charges |
(394 | ) | (178 | ) | (76 | ) | (648 | ) | ||||||||
Transfers5 |
599 | 487 | (1,086 | ) | | |||||||||||
At December 31, 2018 |
$3,600 | $6,258 | $2,968 | $12,826 | ||||||||||||
At December 31, 2018 |
||||||||||||||||
Cost |
$14,750 | $21,624 | $14,610 | $50,984 | ||||||||||||
Accumulated depreciation and impairments |
(11,150 | ) | (15,366 | ) | (11,642 | ) | (38,158 | ) | ||||||||
Net carrying amount December 31, 2018 |
$3,600 | $6,258 | $2,968 | $12,826 | ||||||||||||
Buildings, plant and equipment |
Mining property costs subject to depreciation1,3 |
Mining property costs not subject to depreciation1,2 |
Total | |||||||||||||
At January 1, 2017 |
||||||||||||||||
Cost |
$14,111 | $20,778 | $14,634 | $49,523 | ||||||||||||
Accumulated depreciation and impairments |
(9,555 | ) | (13,584 | ) | (12,281 | ) | (35,420 | ) | ||||||||
Net carrying amount January 1, 2017 |
$4,556 | $7,194 | $2,353 | $14,103 | ||||||||||||
Additions4 |
158 | 219 | 1,966 | 2,343 | ||||||||||||
Disposals |
(72 | ) | (194 | ) | (931 | ) | (1,197 | ) | ||||||||
Depreciation |
(878 | ) | (819 | ) | | (1,697 | ) | |||||||||
Impairment reversals (charges) |
(102 | ) | (359 | ) | 715 | 254 | ||||||||||
Transfers5 |
551 | 481 | (1,032 | ) | | |||||||||||
At December 31, 2017 |
$4,213 | $6,522 | $3,071 | $13,806 | ||||||||||||
At December 31, 2017 |
||||||||||||||||
Cost |
$14,209 | $20,938 | $14,637 | $49,784 | ||||||||||||
Accumulated depreciation and impairments |
(9,996 | ) | (14,416 | ) | (11,566 | ) | (35,978 | ) | ||||||||
Net carrying amount December 31, 2017 |
$4,213 | $6,522 | $3,071 | $13,806 |
1 | Includes capitalized reserve acquisition costs, capitalized development costs and capitalized exploration and evaluation costs other than exploration license costs included in intangible assets. |
2 | Assets not subject to depreciation include construction-in-progress, projects and acquired mineral resources and exploration potential at operating minesites and development projects. |
3 | Assets subject to depreciation include the following items for production stage properties: acquired mineral reserves and resources, capitalized mine development costs, capitalized stripping and capitalized exploration and evaluation costs. |
4 | Additions include revisions to the capitalized cost of closure and rehabilitation activities. |
5 | Primarily relates to long-lived assets that are transferred to PP&E once they are placed into service. |
BARRICK YEAR-END 2018 |
120 | NOTES TO FINANCIAL STATEMENTS |
20 > GOODWILL AND OTHER INTANGIBLE ASSETS
a) Intangible Assets
Water rights1 | Technology2 | Supply contracts3 |
Exploration potential4 |
Total | ||||||||||||||||
Opening balance January 1, 2017 |
$87 | $11 | $14 | $160 | $272 | |||||||||||||||
Additions |
| | | 16 | 16 | |||||||||||||||
Disposals |
(16 | ) | | | | (16 | ) | |||||||||||||
Amortization |
| (2 | ) | (3 | ) | (12 | ) | (17 | ) | |||||||||||
Closing balance December 31, 2017 |
$71 | $9 | $11 | $164 | $255 | |||||||||||||||
Amortization and impairment losses5 |
| (1 | ) | (3 | ) | (24 | ) | (28 | ) | |||||||||||
Closing balance December 31, 2018 |
$71 | $8 | $8 | $140 | $227 | |||||||||||||||
Cost |
$71 | $17 | $39 | $298 | $425 | |||||||||||||||
Accumulated amortization and impairment losses |
| (9 | ) | (31 | ) | (158 | ) | (198 | ) | |||||||||||
Net carrying amount December 31, 2018 |
$71 | $8 | $8 | $140 | $227 |
1 | Relates to water rights in South America, and will be amortized through cost of sales when we begin using these in the future. |
2 | The amount is amortized through cost of sales using the UOP method over LOM ounces of the Pueblo Viejo mine, with no assumed residual value. |
3 | Relates to a supply agreement with Michelin North America Inc. to secure a supply of tires and is amortized over the effective term of the contract through cost of sales. |
4 | Exploration potential consists of the estimated fair value attributable to exploration licenses acquired as a result of a business combination or asset acquisition. The carrying value of the licenses will be transferred to PP&E when the development of attributable mineral resources commences. |
5 | Exploration potential impairment losses relate to Acacias Nyanzaga project in Tanzania. |
BARRICK YEAR-END 2018 |
121 | NOTES TO FINANCIAL STATEMENTS |
b) Goodwill
Closing balance December 31, 2017 |
Impairments | Closing balance December 31, 2018 |
||||||||||
Barrick Nevada |
$514 | $ | $514 | |||||||||
Veladero |
154 | (154) | | |||||||||
Turquoise Ridge |
528 | | 528 | |||||||||
Hemlo |
63 | | 63 | |||||||||
Kalgoorlie |
71 | | 71 | |||||||||
Total |
$1,330 | ($154) | $1,176 |
On a total basis, the gross amount and accumulated impairment losses are as follows:
Cost |
$ | 8,618 | ||
Accumulated impairment losses December 31, 2018 |
(7,442 | ) | ||
Net carrying amount December 31, 2018 |
$ | 1,176 |
BARRICK YEAR-END 2018 |
122 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
123 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
124 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
125 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
126 | NOTES TO FINANCIAL STATEMENTS |
25 > FINANCIAL INSTRUMENTS
Financial instruments include cash; evidence of ownership in an entity; or a contract that imposes an obligation on one party and conveys a right to a second entity to deliver/receive cash or another financial instrument. Information on certain types of financial instruments is included elsewhere in these consolidated financial statements as follows: accounts receivable (note 18); restricted share units (note 34b).
a) Cash and Equivalents
Cash and equivalents include cash, term deposits, treasury bills and money market investments with original maturities of less than 90 days.
As at December 31, 2018 | As at December 31, 2017 | |||||||
Cash deposits |
$842 | $662 | ||||||
Term deposits |
477 | 427 | ||||||
Money market investments |
252 | 1,145 | ||||||
$1,571 | $2,234 |
Of total cash and cash equivalents as of December 31, 2018, $383 million (2017: $305 million) was held in subsidiaries which have regulatory regulations, contractual restrictions or operate in countries where exchange controls and other legal restrictions apply and are therefore not available for general use by the Company.
BARRICK YEAR-END 2018 |
127 | NOTES TO FINANCIAL STATEMENTS |
b) Debt and Interest1
Closing balance December 31, 2017 |
Proceeds | Repayments | Amortization and other2 |
Closing balance December 31, 2018 |
||||||||||||||||
4.4%/5.7% notes3,9 |
$1,468 | $ | ($629 | ) | $3 | $842 | ||||||||||||||
3.85%/5.25% notes |
1,079 | | | | 1,079 | |||||||||||||||
5.80% notes4,9 |
395 | | | | 395 | |||||||||||||||
6.35% notes5,9 |
593 | | | 1 | 594 | |||||||||||||||
Other fixed rate notes6,9 |
1,326 | | | | 1,326 | |||||||||||||||
Capital leases7 |
46 | | (27 | ) | | 19 | ||||||||||||||
Other debt obligations |
603 | | (3 | ) | (2 | ) | 598 | |||||||||||||
5.75% notes8,9 |
842 | | | | 842 | |||||||||||||||
Acacia credit facility10 |
71 | | (28 | ) | | 43 | ||||||||||||||
$6,423 | $ | ($687 | ) | $2 | $5,738 | |||||||||||||||
Less: current portion11 |
(59 | ) | | | | (43 | ) | |||||||||||||
$6,364 | $ | ($687 | ) | $2 | $5,695 | |||||||||||||||
Closing balance December 31, 2016 |
Proceeds | Repayments | Amortization and other2 |
Closing balance December 31, 2017 |
||||||||||||||||
4.4%/5.7% notes3,9 |
$1,467 | $ | $ | $1 | $1,468 | |||||||||||||||
3.85%/5.25% notes |
1,078 | | | 1 | 1,079 | |||||||||||||||
5.80% notes4,9 |
395 | | | | 395 | |||||||||||||||
6.35% notes5,9 |
593 | | | | 593 | |||||||||||||||
Other fixed rate notes6,9 |
1,607 | | (279 | ) | (2 | ) | 1,326 | |||||||||||||
Project financing |
400 | | (423 | ) | 23 | | ||||||||||||||
Capital leases7 |
114 | | (68 | ) | | 46 | ||||||||||||||
Other debt obligations |
609 | | (4 | ) | (2 | ) | 603 | |||||||||||||
4.10%/5.75% notes8,9 |
1,569 | | (731 | ) | 4 | 842 | ||||||||||||||
Acacia credit facility10 |
99 | | (28 | ) | | 71 | ||||||||||||||
$7,931 | $ | ($1,533 | ) | $25 | $6,423 | |||||||||||||||
Less: current portion11 |
(143 | ) | | | | (59 | ) | |||||||||||||
$7,788 | $ | ($1,533 | ) | $25 | $6,364 |
1 | The agreements that govern our long-term debt each contain various provisions which are not summarized herein. These provisions allow Barrick, at its option, to redeem indebtedness prior to maturity at specified prices and also may permit redemption of debt by Barrick upon the occurrence of certain specified changes in tax legislation. |
2 | Amortization of debt premium/discount and increases (decreases) in capital leases. |
3 | Consists of $nil (2017: $629 million) of our wholly-owned subsidiary Barrick North America Finance LLC (BNAF) notes due 2021 and $850 million (2017: $850 million) of BNAF notes due 2041. |
4 | Consists of $400 million (2017: $400 million) of 5.80% notes which mature in 2034. |
5 | Consists of $600 million (2017: $600 million) of 6.35% notes which mature in 2036. |
6 | Consists of $1.3 billion (2017: $1.3 billion) in conjunction with our wholly-owned subsidiary BNAF and our wholly-owned subsidiary Barrick (PD) Australia Finance Pty Ltd. (BPDAF). This consists of $248 million (2017: $248 million) of BPDAF notes due 2020, $250 million (2017: $250 million) of BNAF notes due 2038 and $850 million (2017: $850 million) of BPDAF notes due 2039. |
7 | Consists primarily of capital leases at Pascua-Lama, $9 million and Lagunas Norte, $7 million (2017: $13 million and $27 million, respectively). |
8 | Consists of $850 million (2017: $850 million) in conjunction with our wholly-owned subsidiary BNAF. |
9 | We provide an unconditional and irrevocable guarantee on all BNAF, BPDAF, Barrick Gold Finance Company (BGFC), and Barrick (HMC) Mining (BHMC) notes and generally provide such guarantees on all BNAF, BPDAF, BGFC, and BHMC notes issued, which will rank equally with our other unsecured and unsubordinated obligations. |
10 | Consists of an export credit backed term loan facility. |
11 | The current portion of long-term debt consists of other debt obligations ($4 million; 2017: $4 million), capital leases ($11 million; 2017: $27 million) and Acacia credit facility ($28 million; 2017: $28 million). |
BARRICK YEAR-END 2018 |
128 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
129 | NOTES TO FINANCIAL STATEMENTS |
2018 | 2017 | |||||||||||||||
For the years ended December 31 | Interest cost | Effective rate1 | Interest cost | Effective rate1 | ||||||||||||
4.4%/5.7% notes | $63 | 5.25 | % | $77 | 5.23 | % | ||||||||||
3.85%/5.25% notes | 53 | 4.87 | % | 53 | 4.87 | % | ||||||||||
5.80% notes | 23 | 5.85 | % | 23 | 5.85 | % | ||||||||||
6.35% notes | 39 | 6.41 | % | 38 | 6.41 | % | ||||||||||
Other fixed rate notes | 83 | 6.16 | % | 93 | 6.38 | % | ||||||||||
Project financing | | | % | 14 | 7.04 | % | ||||||||||
Capital leases | 2 | 6.18 | % | 3 | 3.60 | % | ||||||||||
Other debt obligations | 38 | 6.55 | % | 31 | 6.55 | % | ||||||||||
4.10%/5.75% notes | 49 | 5.79 | % | 72 | 5.12 | % | ||||||||||
Acacia credit facility | 5 | 3.59 | % | 6 | 3.59 | % | ||||||||||
Deposits on Pascua-Lama silver sale agreement (note 29) | 65 | 8.25 | % | 66 | 8.37 | % | ||||||||||
Deposits on Pueblo Viejo gold and silver streaming agreement (note 29) | 33 | 6.41 | % | 35 | 6.14 | % | ||||||||||
$453 | $511 | |||||||||||||||
Less: interest capitalized | (9 | ) | | |||||||||||||
$444 | $511 |
1 | The effective rate includes the stated interest rate under the debt agreement, amortization of debt issue costs and debt discount/premium and the impact of interest rate contracts designated in a hedging relationship with debt. |
Scheduled Debt Repayments1
Issuer | Maturity Year |
2019 | 2020 | 2021 | 2022 | 2023 | 2024 and thereafter |
Total | ||||||||||||||||||||||||||||
4.95% notes3 |
BPDAF | 2020 | $ | $248 | $ | $ | $ | $ | $248 | |||||||||||||||||||||||||||
7.31% notes2 |
BGC | 2021 | | | 7 | | | | 7 | |||||||||||||||||||||||||||
3.85% notes |
BGC | 2022 | | | | 337 | | | 337 | |||||||||||||||||||||||||||
7.73% notes2 |
BGC | 2025 | | | | | | 6 | 6 | |||||||||||||||||||||||||||
7.70% notes2 |
BGC | 2025 | | | | | | 5 | 5 | |||||||||||||||||||||||||||
7.37% notes2 |
BGC | 2026 | | | | | | 32 | 32 | |||||||||||||||||||||||||||
8.05% notes2 |
BGC | 2026 | | | | | | 15 | 15 | |||||||||||||||||||||||||||
6.38% notes2 |
BGC | 2033 | | | | | | 200 | 200 | |||||||||||||||||||||||||||
5.80% notes |
BGC | 2034 | | | | | | 200 | 200 | |||||||||||||||||||||||||||
5.80% notes |
BGFC | 2034 | | | | | | 200 | 200 | |||||||||||||||||||||||||||
6.45% notes2 |
BGC | 2035 | | | | | | 300 | 300 | |||||||||||||||||||||||||||
6.35% notes |
BHMC | 2036 | | | | | | 600 | 600 | |||||||||||||||||||||||||||
7.50% notes3 |
BNAF | 2038 | | | | | | 250 | 250 | |||||||||||||||||||||||||||
5.95% notes3 |
BPDAF | 2039 | | | | | | 850 | 850 | |||||||||||||||||||||||||||
5.70% notes |
BNAF | 2041 | | | | | | 850 | 850 | |||||||||||||||||||||||||||
5.25% notes |
BGC | 2042 | | | | | | 750 | 750 | |||||||||||||||||||||||||||
5.75% notes |
BNAF | 2043 | | | | | | 850 | 850 | |||||||||||||||||||||||||||
Other debt obligations2 |
4 | 1 | | | | | 5 | |||||||||||||||||||||||||||||
Acacia credit facility |
28 | 14 | | | | | 42 | |||||||||||||||||||||||||||||
$32 | $263 | $7 | $337 | $ | $5,108 | $5,747 | ||||||||||||||||||||||||||||||
Minimum annual payments under capital leases |
$11 | $4 | $1 | $1 | $1 | $2 | $20 |
1 | This table illustrates the contractual undiscounted cash flows, and may not agree with the amounts disclosed in the consolidated balance sheet. |
2 | Included in Other debt obligations in the Long-Term Debt table. |
3 | Included in Other fixed rate notes in the Long-Term Debt table. |
BARRICK YEAR-END 2018 |
130 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
131 | NOTES TO FINANCIAL STATEMENTS |
d) Summary of Derivatives at December 31, 2018
Notional Amount by Term to Maturity | Accounting Classification by Notional Amount |
|||||||||||||||||||||||||||
Within 1 year |
2 to 3 years |
4 to 5 years |
Total | Cash flow hedge |
Non-Hedge | Fair value (USD) |
||||||||||||||||||||||
US dollar interest rate contracts (US$ millions) |
||||||||||||||||||||||||||||
Total receive - float swap positions |
$28 | $14 | $ | $42 | $42 | $ | $1 | |||||||||||||||||||||
Currency contracts |
||||||||||||||||||||||||||||
PGK:US$ contracts (PGK millions) |
23 | | | 23 | | 23 | | |||||||||||||||||||||
Commodity contracts |
||||||||||||||||||||||||||||
Copper bought floor contracts (millions of pounds) |
| | | | | | 2 | |||||||||||||||||||||
Fuel contracts (thousands of barrels)1 |
114 | | | 114 | | 114 | (3 | ) |
1 | Fuel contracts represent a combination of WTI swaps and Brent options. These derivatives hedge physical supply contracts based on the price of fuel across our operating minesites plus a spread. WTI represents West Texas Intermediate and Brent represents Brent Crude Oil. |
Fair Values of Derivative Instruments
Asset Derivatives | Liability Derivatives | |||||||||||||||||||||||
Balance Sheet Classification |
Fair Value as at Dec. 31, 2018 |
Fair Value as at Dec. 31, 2017 |
Balance Sheet Classification |
Fair Value as at Dec. 31, 2018 |
Fair Value as at Dec. 31, 2017 |
|||||||||||||||||||
Derivatives designated as hedging instruments |
||||||||||||||||||||||||
US dollar interest rate contracts |
Other assets | $1 | $1 | Other liabilities | $ | $ | ||||||||||||||||||
Commodity contracts |
Other assets | 2 | | Other liabilities | 2 | 25 | ||||||||||||||||||
Total derivatives classified as hedging instruments |
$3 | $1 | $2 | $25 | ||||||||||||||||||||
Derivatives not designated as hedging instruments |
||||||||||||||||||||||||
Commodity contracts |
Other assets | $ | $2 | Other liabilities | $1 | $7 | ||||||||||||||||||
Total derivatives not designated as hedging instruments |
$ | $2 | $1 | $7 | ||||||||||||||||||||
Total derivatives |
$3 | $3 | $3 | $32 |
As of December 31, 2018, we had 12 counterparties to our derivative positions. We proactively manage our exposure to individual counterparties in order to mitigate both credit and liquidity risks. We have five counterparties with which we hold a net asset position of $2 million, and seven counterparties with which we are in a net liability position, for a total net liability of $2 million. On an ongoing basis, we monitor our exposures and ensure that none of the counterparties with which we hold outstanding contracts has declared insolvency.
BARRICK YEAR-END 2018 |
132 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
133 | NOTES TO FINANCIAL STATEMENTS |
Cash Flow Hedge Gains (Losses) in Accumulated Other Comprehensive Income (AOCI)
Commodity price hedges | |
Interest rate hedges |
| |||||||||||||||||
Gold/Silver | Copper | Fuel | |
Long-term debt |
|
Total | ||||||||||||||
At January 1, 2017 |
$9 | $ | ($32 | ) | ($20 | ) | ($43 | ) | ||||||||||||
Effective portion of change in fair value of hedging instruments |
| (11 | ) | (8 | ) | | (19 | ) | ||||||||||||
Transfers to earnings: |
||||||||||||||||||||
On recording hedged items in earnings/PP&E1 |
(7 | ) | 4 | 27 | 3 | 27 | ||||||||||||||
Hedge ineffectiveness due to changes in original forecasted transaction |
| | 5 | | 5 | |||||||||||||||
At December 31, 2017 |
$2 | ($7 | ) | ($8 | ) | ($17 | ) | ($30 | ) | |||||||||||
Effective portion of change in fair value of hedging instruments |
| 17 | 4 | (1 | ) | 20 | ||||||||||||||
Transfers to earnings: |
||||||||||||||||||||
On recording hedged items in earnings/PP&E1 |
(2 | ) | (10 | ) | 4 | 3 | (5 | ) | ||||||||||||
Hedge ineffectiveness due to changes in original forecasted transaction |
| | | | | |||||||||||||||
At December 31, 2018 |
$ | $ | $ | ($15 | ) | ($15 | ) | |||||||||||||
Hedge gains/losses classified within |
|
Gold/Silver sales |
|
Copper sales | Cost of sales | |
Interest expense |
|
Total | |||||||||||
Portion of hedge gain (loss) expected to affect 2019 earnings2 |
$ | $ | $ | $ | $ |
1 | Realized gains (losses) on qualifying currency hedges of capital expenditures are transferred from OCI to PP&E on settlement. |
2 | Based on the fair value of hedge contracts at December 31, 2018. |
Cash Flow Hedge Gains (Losses) at December 31
Derivatives in cash flow hedging relationships |
Amount of gain (loss) recognized in OCI |
Location of gain (loss) transferred from OCI into income/PP&E (effective portion) |
Amount of gain (loss) transferred from OCI into income (effective portion) |
Location of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing) |
Amount of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing) |
|||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||
Interest rate contracts |
($1 | ) | ($1 | ) | |
Finance income/ finance costs |
|
($3 | ) | ($3 | ) | |
Gain (loss) on non- hedge derivatives |
|
$ | $ | ||||||||||||||||
Commodity contracts |
21 | (18 | ) | |
Revenue/cost of sales |
|
8 | (24 | ) | |
Gain (loss) on non- hedge derivatives |
|
| (5 | ) | |||||||||||||||||
Total |
$20 | ($19 | ) | $5 | ($27 | ) | $ | ($5 | ) |
BARRICK YEAR-END 2018 |
134 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
135 | NOTES TO FINANCIAL STATEMENTS |
a) Assets and Liabilities Measured at Fair Value on a Recurring Basis
Fair Value Measurements
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
||||||||||||||
At December 31, 2018 | (Level 1) | (Level 2) | (Level 3) | Aggregate Fair Value |
||||||||||||
Cash and equivalents |
$1,571 | $ | $ | $1,571 | ||||||||||||
Other investments |
209 | | | 209 | ||||||||||||
Derivatives |
| | | | ||||||||||||
Receivables from provisional copper and gold sales |
| 76 | | 76 | ||||||||||||
$1,780 | $76 | $ | $1,856 |
Fair Value Measurements
Quoted Prices in Active Markets for Identical Assets |
Significant Other Observable Inputs |
Significant Unobservable Inputs |
||||||||||||||
At December 31, 2017 | (Level 1) | (Level 2) | (Level 3) | Aggregate Fair Value |
||||||||||||
Cash and equivalents |
$2,234 | $ | $ | $2,234 | ||||||||||||
Other investments |
33 | | | 33 | ||||||||||||
Derivatives |
| (29 | ) | | (29 | ) | ||||||||||
Receivables from provisional copper and gold sales |
| 110 | | 110 | ||||||||||||
$2,267 | $81 | $ | $2,348 |
b) Fair Values of Financial Assets and Liabilities
At December 31, 2018 | At December 31, 2017 | |||||||||||||||
Carrying amount | Estimated fair value | Carrying amount | Estimated fair value | |||||||||||||
Financial assets |
||||||||||||||||
Other assets1 |
$559 | $559 | $572 | $572 | ||||||||||||
Other investments2 |
209 | 209 | 33 | 33 | ||||||||||||
Derivative assets |
3 | 3 | 3 | 3 | ||||||||||||
$771 | $771 | $608 | $608 | |||||||||||||
Financial liabilities |
||||||||||||||||
Debt3 |
$5,738 | $6,183 | $6,423 | $7,715 | ||||||||||||
Derivative liabilities |
3 | 3 | 32 | 32 | ||||||||||||
Other liabilities |
297 | 297 | 252 | 252 | ||||||||||||
$6,038 | $6,483 | $6,707 | $7,999 |
1 | Includes restricted cash and amounts due from our partners. |
2 | Recorded at fair value. Quoted market prices are used to determine fair value. |
3 | Debt is generally recorded at amortized cost except for obligations that are designated in a fair-value hedge relationship, in which case the carrying amount is adjusted for changes in fair value of the hedging instrument in periods when a hedge relationship exists. The fair value of debt is primarily determined using quoted market prices. Balance includes both current and long-term portions of debt. |
We do not offset financial assets with financial liabilities.
BARRICK YEAR-END 2018 |
136 | NOTES TO FINANCIAL STATEMENTS |
c) Assets Measured at Fair Value on a Non-Recurring Basis
Quoted prices in for identical |
Significant other inputs |
Significant unobservable inputs |
||||||||||||||
(Level 1) | (Level 2) | (Level 3) | Aggregate fair value | |||||||||||||
Other assets1 |
$ | $ | $190 | $190 | ||||||||||||
Property, plant and equipment2 |
| | 801 | 801 | ||||||||||||
Intangible assets3 |
| | 10 | 10 | ||||||||||||
Goodwill4 |
| | | |
1 | Other assets were written down by $74 million, which was included in earnings in this period. |
2 | Property, plant and equipment were written down by $648 million, which was included in earnings in this period. |
3 | Intangibles were written down by $24 million, which was included in earnings in this period, to their fair value less costs of disposal of $10 million. |
4 | Goodwill was fully written down at Veladero by $154 million, which was included in earnings in this period. |
BARRICK YEAR-END 2018 |
137 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
138 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
139 | NOTES TO FINANCIAL STATEMENTS |
As at December 31, 2018
(in $ millions) |
Less than 1 year | 1 to 3 years | 3 to 5 years | Over 5 years | Total | |||||||||||||||
Cash and equivalents | $1,571 | $ | $ | $ | $1,571 | |||||||||||||||
Accounts receivable | 248 | | | | 248 | |||||||||||||||
Derivative assets | 2 | 1 | | | 3 | |||||||||||||||
Trade and other payables | 1,101 | | | | 1,101 | |||||||||||||||
Debt | 43 | 275 | 339 | 5,110 | 5,767 | |||||||||||||||
Derivative liabilities | 3 | | | | 3 | |||||||||||||||
Other liabilities | 59 | 80 | 21 | 137 | 297 | |||||||||||||||
As at December 31, 2017
(in $ millions) |
Less than 1 year | 1 to 3 years | 3 to 5 years | Over 5 years | Total | |||||||||||||||
Cash and equivalents | $2,234 | $ | $ | $ | $2,234 | |||||||||||||||
Accounts receivable | 239 | | | | 239 | |||||||||||||||
Derivative assets | 2 | 1 | | | 3 | |||||||||||||||
Trade and other payables | 1,059 | | | | 1,059 | |||||||||||||||
Debt | 59 | 311 | 975 | 5,111 | 6,456 | |||||||||||||||
Derivative liabilities | 30 | 2 | | | 32 | |||||||||||||||
Other liabilities | 30 | 67 | 4 | 151 | 252 |
BARRICK YEAR-END 2018 |
140 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
141 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
142 | NOTES TO FINANCIAL STATEMENTS |
32 > NON-CONTROLLING INTERESTS
a) Non-Controlling Interests Continuity
Pueblo Viejo | Acacia | Cerro Casale | Other | Total | ||||||||||||||||
NCI in subsidiary at December 31, 2018 |
40 | % | 36.1 | % | 25 | % | Various | |||||||||||||
At January 1, 2017 |
$1,311 | $704 | $319 | $44 | $2,378 | |||||||||||||||
Share of income (loss) |
118 | (211 | ) | 173 | (2 | ) | 78 | |||||||||||||
Cash contributed |
| | 1 | 12 | 13 | |||||||||||||||
Decrease in non-controlling interest |
| | (493 | ) | | (493 | ) | |||||||||||||
Disbursements |
(139 | ) | (13 | ) | | (43 | ) | (195 | ) | |||||||||||
At December 31, 2017 |
$1,290 | $480 | $ | $11 | $1,781 | |||||||||||||||
Share of income (loss) |
89 | 22 | | (1 | ) | 110 | ||||||||||||||
Cash contributed |
| | | 24 | 24 | |||||||||||||||
Disbursements |
(108 | ) | | | (15 | ) | (123 | ) | ||||||||||||
At December 31, 2018 |
$1,271 | $502 | $ | $19 | $1,792 |
b) Summarized Financial Information on Subsidiaries with Material Non-Controlling Interests
Summarized Balance Sheets
Pueblo Viejo | Acacia | |||||||||||||||
As at December 31, 2018 |
As at December 31, 2017 |
As at December 31, 2018 |
As at December 31, 2017 |
|||||||||||||
Current assets |
$520 | $488 | $555 | $464 | ||||||||||||
Non-current assets |
3,469 | 3,489 | 1,261 | 1,333 | ||||||||||||
Total assets |
$3,989 | $3,977 | $1,816 | $1,797 | ||||||||||||
Current liabilities |
720 | 907 | 206 | 212 | ||||||||||||
Non-current liabilities |
402 | 248 | 246 | 280 | ||||||||||||
Total liabilities |
$1,122 | $1,155 | $452 | $492 |
BARRICK YEAR-END 2018 |
143 | NOTES TO FINANCIAL STATEMENTS |
Summarized Statements of Income
Pueblo Viejo | Acacia | |||||||||||||||
For the years ended December 31 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue |
$1,333 | $1,417 | $664 | $751 | ||||||||||||
Income (loss) from continuing operations after tax |
206 | 293 | 59 | (630 | ) | |||||||||||
Other comprehensive income (loss) |
| | | | ||||||||||||
Total comprehensive income (loss) |
$206 | $293 | $59 | ($630 | ) | |||||||||||
Dividends paid to NCI |
$ | $ | $ | $13 | ||||||||||||
Summarized Statements of Cash Flows | ||||||||||||||||
Pueblo Viejo | Acacia | |||||||||||||||
For the years ended December 31 | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Net cash provided by (used in) operating activities |
$272 | $283 | $123 | ($15) | ||||||||||||
Net cash used in investing activities |
(144 | ) | (112 | ) | (45 | ) | (160 | ) | ||||||||
Net cash used in financing activities |
(108 | ) | (539 | ) | (28 | ) | (62 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents |
$20 | ($368 | ) | $50 | ($237 | ) |
33 > REMUNERATION OF KEY MANAGEMENT PERSONNEL
Key management personnel include the members of the Board of Directors and the executive leadership team. Compensation for key management personnel (including Directors) was as follows:
For the years ended December 31 | 2018 | 2017 | ||||||
Salaries and short-term employee benefits1 |
$19 | $20 | ||||||
Post-employment benefits2 |
3 | 3 | ||||||
Termination Benefits |
1 | | ||||||
Share-based payments and other3 |
11 | 12 | ||||||
$34 | $35 |
1 | Includes annual salary and annual short-term incentives/other bonuses earned in the year. |
2 | Represents Company contributions to retirement savings plans. |
3 | Relates to DSU, RSU and PRSU grants and other compensation. |
BARRICK YEAR-END 2018 |
144 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
145 | NOTES TO FINANCIAL STATEMENTS |
Employee Stock Option Activity (Number of Shares in Millions)
2018 | 2017 | |||||||||||||||
Shares | Average Price |
Shares | Average Price |
|||||||||||||
C$ options |
||||||||||||||||
At January 1 |
0.3 | $13 | 0.3 | $13 | ||||||||||||
Granted |
| | | | ||||||||||||
Exercised |
| 10 | | | ||||||||||||
Cancelled/expired |
| | | | ||||||||||||
At December 31 |
0.3 | $13 | 0.3 | $13 | ||||||||||||
US$ options |
||||||||||||||||
At January 1 |
0.7 | $40 | 1.8 | $42 | ||||||||||||
Forfeited |
(0.1 | ) | 34 | (0.7 | ) | 40 | ||||||||||
Cancelled/expired |
(0.1 | ) | 49 | (0.4 | ) | 45 | ||||||||||
At December 31 |
0.5 | $37 | 0.7 | $40 |
Stock Options Outstanding (Number of Shares in Millions)
Outstanding | Exercisable | |||||||||||||||||||||||||||
Range of exercise prices | Shares | Average price | Average life (years) |
Intrinsic value1 ($ millions) |
Shares | Average price |
Intrinsic value1 ($ millions) |
|||||||||||||||||||||
C$ options |
||||||||||||||||||||||||||||
$ 9 - $ 17 |
0.2 | $10 | 3.6 | $2 | 0.1 | $10 | $1 | |||||||||||||||||||||
$ 18 - $ 21 |
0.1 | 18 | 1.6 | | 0.1 | 18 | | |||||||||||||||||||||
|
0.3 | $13 | 2.9 | $2 | 0.2 | $13 | $1 | |||||||||||||||||||||
US$ options |
||||||||||||||||||||||||||||
$ 32 - $ 41 |
0.4 | $32 | 1.0 | $ | 0.4 | $32 | $ | |||||||||||||||||||||
$ 42 - $ 55 |
0.1 | 48 | 0.1 | | 0.1 | 48 | | |||||||||||||||||||||
|
0.5 | $37 | 0.8 | $ | 0.5 | $37 | $ |
1 | Based on the closing market share price on December 31, 2018 of C$18.43 and US$13.54. |
As at December 31, 2018, there was $nil (2017: $nil) of total unrecognized compensation cost relating to unvested stock options.
BARRICK YEAR-END 2018 |
146 | NOTES TO FINANCIAL STATEMENTS |
The significant actuarial assumptions were as follows:
As at December 31 | Pension Plans 2018 |
Other Post- Retirement Benefits 2018 |
Pension Plans 2017 |
Other Post- Retirement Benefits 2017 |
||||||||||||
Discount rate |
3.75-4.65% | 4.45% | 2.90-3.95% | 3.75% |
b) Other Post-Retirement Benefits
We provide post-retirement medical, dental, and life insurance benefits to certain employees in the US. All of these plans are unfunded. The weighted average duration of the defined benefit obligation is 14 years (2017: 10 years).
Less than a year | Between 1-2 years | Between 2-5 years | Over 5 years | Total | ||||||||||||||||
Pension benefits | $14 | $14 | $39 | $200 | $267 | |||||||||||||||
Other post-retirement benefits |
1 | 1 | 2 | 5 | 9 | |||||||||||||||
At December 31, 2017 |
$15 | $15 | $41 | $205 | $276 | |||||||||||||||
Pension benefits |
7 | 7 | 22 | 139 | 175 | |||||||||||||||
Other post-retirement benefits |
1 | 1 | 2 | 5 | 9 | |||||||||||||||
At December 31, 2018 |
$8 | $8 | $24 | $144 | $184 |
c) Defined Contribution Pension Plans
Certain employees take part in defined contribution employee benefit plans and we also have a retirement plan for certain officers of the Company. Our share of contributions to these plans, which is expensed in the year it is earned by the employee, was $35 million in 2018 (2017: $33 million).
BARRICK YEAR-END 2018 |
147 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
148 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
149 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
150 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
151 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
152 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
153 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
154 | NOTES TO FINANCIAL STATEMENTS |
BARRICK YEAR-END 2018 |
155 | NOTES TO FINANCIAL STATEMENTS |
Place of business | Entity type | Economic interest1 | Method | |||||
Loulo |
Mali | Subsidiary | 80% | Consolidation | ||||
Gounkoto |
Mali | Subsidiary | 80% | Consolidation | ||||
Tongon |
Côte dIvoire | Subsidiary | 89.7% | Consolidation | ||||
Massawa Project |
Senegal | Subsidiary | 83.3% | Consolidation | ||||
Kibali |
Democratic Republic of Congo | JV | 45% | Equity Method | ||||
Morila |
Mali | JV | 40% | Equity Method |
1 | Unless otherwise noted, all of our joint arrangements are funded by contributions made by the parties sharing joint control in proportion to their economic interest. |
BARRICK YEAR-END 2018 |
156 | NOTES TO FINANCIAL STATEMENTS |
Cautionary Statement on Forward-Looking Information
Exhibit 99.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the registration statements on Form S-8 (File Nos. 333-121500, 333-131715, 333-135769, 333-224560), Form F-3 (File No. 333-206417) and Form F-10 (File No. 333-216099) of Barrick Gold Corporation (the company) of our report dated February 12, 2019 relating to the 2018 and 2017 consolidated financial statements and the effectiveness of internal control over financial reporting of the company as at December 31, 2018, which appears in Exhibit 99.1 to the companys current report on Form 6-K furnished to the U.S. Securities and Exchange Commission.
(Signed) PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Canada
February 13, 2019
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2
T: +1 416 863 1133, F: +1 416 365 8215, www.pwc.com/ca
PwC refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership
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