Barrick Reports Progress on Projects
BARRICK GOLD CORPORATION PRESS RELEASE
PRESS RELEASE — February 15, 2017
All amounts expressed in U.S. dollars
Barrick Reports Progress on Projects
TORONTO — Barrick Gold Co rporation (NYSE:ABX)(TSX:ABX) ( “Barrick” or the “Company”)
today reported progress on projects with the potential to contribute up to 1.1 million ounces of
gold production at Cortez, Goldrush, Lagunas Norte, and Turquoise Ridge.
The Company has also initiated a prefeasibility study to evaluate the construction of an
underground mine at Lama, on the Argentinean side of the Pascua-Lama project. Optimization
work in Chile remains underway.
All projects go through a rigorous, independent peer review process led by our Evaluations
team. In keeping with our Best -in-Class approach, at every stage of the in vestment review
process we challenge assumptions, incorporate improvements, and evaluate alternative
development scenarios to maximize value creation.
We measure our projects against a 15 percent hurdle rate , using a long-term gold price of
$1,200 per ounce . They are then ranked, prioritized , and sequenced to optimize capital
spending over time, allowing us to anticipate and plan for funding requirements.
For certain related risk factors, please see the cautionary statement on forward -looking
information at the end of this press release.
Cortez Underground Expansion1
Project Overview: Expand underground mining into Deep South area, below currently
permitted levels
Status: On track
The Deep South project, located within the Lower Zone of the Cortez Hills underground mine,
remains on track to contribute average underground production of more than 300,000
ounces per year between 2022 and 2026.
Development of the range front twin declines that will provide access to the lower zone of the
mine began in the fourth quarter of 2016. For the first time, the mine is using a roadheader—a
piece of machinery that employs mechanical cutting to facilitate continuous tunnel boring,
rather than traditional drilling and blasting.
The prefeasibility study anticipated a cost of sales of $840 per ounce , and average all-in
sustaining costs2 of $580 per ounce , for mining in the Deep South zone. Optimization work
underway as part of the feasibility study has identified a number of opportunities to reduce
BARRICK GOLD CORPORATION PRESS RELEASE
these costs , including through the use of autonomous loading with a smart conveyance
system, compared to a traditional conveyor system contemplated in the prefeasibility study.
Initial capital costs for the p roject remain unchanged, and are estimated to be $153 million.
The expansion will enable the Company to access approximately 1. 9 million ounces of proven
and probable reserves3 in the Deep South zone, of which more than 80 percent are oxide.
Permitting wa s initiated in 2016 with the submission of a n amendment to the current Mine
Plan of Operations to the Bureau of Land Management. The permitting process is expected to
take approximately three to four years, including the preparation of an Environmental Impact
Statement. A record of decision is expected in 2019 or 2020. On this basis , dewatering and
development work could begin as early as 2019 or 2020, with initial production from Deep
South commencing in 2022 or 2023.
We expect to complete the feasibility study by the end of 2017, which will focus on processing,
backfill, and stope sequencing to optimize free cash flow.
Goldrush
Project Overview: Development of an underground mine at Goldrush
Status: On track
The Goldrush project continues to advance according to schedule, with the potential to
become Barrick’s newest mine in Nevada by 2021.
Average annual production for the first full five years of operation is expected to be
approximately 450,000 ounces of gold. Goldrush is expected to have a mine life of 21 years,
with first production as early as 2021, and sustained production in 2023 . The prefeasibility
study anticipated a cost of sales of $800 per ounce , and average all -in sustaining costs 2 of
$620 per o unce; and we have identified opportunities to further reduce operating costs. We
continue to anticipate initial capital costs of approximately $1 billion . Goldrush now has 9.6
million ounces of measured and indicated gold resources3, and 1.9 million ounces of inferred
gold resources.3
During 2016, we obtained the necessary permits for the construction of twin exploration
declines. This will enable further drilling of the ore body in support of the feasibility study ,
including the conversi on of measured and indicated resources to proven and probable
reserves. The twin decline portal access site has been cleared , and work is expected to begin
on the portal pad in the first quarter of 2017. We are also carrying out additional surface
exploration drilling in the Red Hill zone , the shallowest portion of the Goldrush deposit.
Permitting is expected to commence in 2018, initiating a three - to four-year Environmental
Impact Statement process. Underground development and production activities would
commence following receipt of permits.
The Goldrush deposit remains open in a number of directions. In addition, the Company
continues to drill at the highly prospective Fourmile target, just north of the Goldrush
discovery.
BARRICK GOLD CORPORATION PRESS RELEASE
Lagunas Norte Life Extension Project4
Project Overview: Optimization of carbonaceous oxide ore recovery , and i nstallation of
refractory ore processing circuit
Status: On track
We are now evaluating a sequenced approach to extending the life of the Lagunas Norte mine
by first optimizing the recovery of carbonaceous oxide ore contained in existing stockpiles,
followed by extraction and processing of refractory ores.
The prefeasibility study for the Refractory Ore project contemplated an initial capital
investment of approximately $640 million for the installation of a 6,000 tonnes per day
grinding-flotation-autoclave and carbon -in-leach processing circuit to treat ref ractory
material. Once ramped up , the circuit has the potential to produce an average of 240,000
ounces of gold per year at a cost of sales of approximately $1,080 per ounce and all-in
sustaining costs2 of $625 per ounce.
Over the past year, Lagunas Norte has developed a process to treat certain carbonaceous
oxide material already stockpiled at the mine through heap leaching, helping to bridge the gap
between processing of oxide and refractory materials. This has created an opportunity to first
construct a grinding and carbon -in-leach processing circuit that would treat the remaining
carbonaceous oxide material at the site . This would allow us to defer the construction of the
flotation and pressure oxidation circuits required for treating refractory ore, optimizing the
timing of capital expenditures.
Engineering for the grinding and carbon-in-leach circuits is underway at a feasibility level, and
will be available for Investment Committee review b y the end of 2017 . Pending a positive
investment decision and receipt of permits, construction of these facilities could begin in late
2018, with first production in 2020.
Following this, and subject to Environmental Impact Assessment approval, construction of the
refractory ore processing facilities (flotation and pressure oxidation circuits) could begin as
early as 2020, with first production in 2023.
Turquoise Ridge Underground Expansion
Project Overview: Expand underground mining through construction of an additional
production shaft
Status: On track
We continue to advance a phased approach to expansion at Barrick’s 75 percent owned
Turquoise Ridge mine that maximizes free cash flow from the operation , while optimizing the
timing of capital spending for expansion.
Through the development of a third shaft, the mine has the potential to increase output to an
average of 500,000 ounces p er year (100 percent basis) from existing reserves at a cost of
sales of $750-$800 per ounce, and all-in sustaining costs2 of about $625-$675 per ounce. The
BARRICK GOLD CORPORATION PRESS RELEASE
project would require capital expenditures of approximately $300 -$325 million (100 percent
basis) for additional underground development and shaft construction.
The first phase of expansion has been focused on leveraging Best -in-Class initiatives to
maximize productivity from the existing mine infrastructure , with strong results . Turquoise
Ridge recorded its highest-ever level of production in 2016, producing 355,000 ounces of gold
(100 percent basis), at a cost of sales applicable to gold of $593 per ounce , and all -in
sustaining costs2 of $618 per ounce. Average throughput increased by 40 percent, from 1,500
tonnes per day in 2015, to 2,100 tonnes per day in 2016. Improvements in mining intensity and
reliability have been driven by upgrades to underground ventilation systems, increasing top
cut mining widths, greater equipme nt standardization , and better maintenance. Additional
Best-in-Class initiatives under evaluation include the introduction of continuous mining,
increased automation, additional ventilation modifications, and alternative mining methods.
Based on the rapid pace of improvement at the mine, we are evaluating whether to proceed
directly to the construction of a third production shaft , instead of the installation of a new
ventilation shaft, which was previously contemplated as the second phase of the mine
expansion. All necessary permits for a third production shaft are already in place.
At the end of 2016, the Turquoise Ridge mine had four million ounces of gold in reserves (75
percent basis)3 at an average grade of 15.1 grams per tonne—the highest reserve grade in the
Company’s operating portfolio , and among the highest in the entire gold industry. The mine
also has 3.0 million ounces of measured gold resources3, and 6.5 million ounces of indicated
gold resources (75 percent basis). 3 The Turquoise Ridge deposit remains open to the
northeast, with significant potential to add additional reserves and resources through drilling.
Pascua-Lama and Frontera District Update
Following a detailed review of multiple development options for Pascua Lama in 2016, both
open-pit and underground, we have initiated a prefeasibility study to evaluate the
construction of an underground mine at Lama. The study will evaluate the use of low-cost bulk
mining methods, including sub -level cave and block cave mining, designed to target high er-
value ore on the Argentinean side of the border in the initial stages of the operation. Cash
flow from Lama could support a staged development that would, over time, incorporate ore
from the Chilean side of the border , subject to additional permitting in Chile . Efforts in Chile
this year will focus on advancing project concepts in parallel with the Lama study, with the
intention of moving to a prefeasibility level study in 2018.
Conceptually, initial ore processing at Lama would be undertaken using one of three partially
completed processing streams at the site, with a capacity of approximately 15,000 tonnes per
day. Existing infrastructure could be scaled u p to 25,000 tonnes per day at a later date. An
underground mine would reduce the surface footprint of the operation and would be less
susceptible to weather-related production interruptions during the winter season.
Estimated capital costs for the project will be available following the completion of the
prefeasibility study. Based on scoping work, the returns of the Lama project deteriorate if
initial capital is much more than $1.5 billion. Returns are also dependent on the ability to
access Chilean ore sources in future phases of the project. If we cannot build the project at an
BARRICK GOLD CORPORATION PRESS RELEASE
attractive return, we will not pursue it. As part of the prefeasibility study, we will be evaluating
opportunities to leverage innovation an d new technology to strengthen the economics of the
project, in addition to potential synergies with the nearby Veladero mine. Assuming a positive
prefeasibility study result, permitting could begin in 2018. The timing of first production would
depend on m ultiple factors , including permitting timelines, funding requirements , and a
decision to proceed with the project.
Beyond Pascua-Lama, we are evaluating an integrated development strategy for the Frontera
District, which includes Veladero and Alturas. At the Alturas project in Chile, we have added
an additional 1.1 million ounces of inferred gold resources, bringing the total inferred resource
to 6.8 million ounces.3 We expect to complete a scoping study for the project in 2017.
Ultimately, our objective is to capitalize on the significant growth potential of this highly
prolific and prospective district, leveraging our existing footprint and infrastructure in the
region, as a platform for long-term value creation.
Qualified Persons
The following qualified persons, as that term is defined in National Instrument 43 -101 –
Standards of Disclosure for Mineral Projects, have prepared or supervised the preparation of
their relevant portions of the technical information described in this press release:
Patrick Garretson, Registered Member SME, Senior Director, Life of Mine Planning
(Barrick)
Steven Haggarty, P.Eng., Senior Director, Metallurgy
Robert Krcmarov, FAusIMM, Executive Vice President, Exploration and Growth
Rick Sims, Registered Member SME, Senior Director, Resources and Reserves
INVESTOR CONTACT MEDIA CONTACT
Daniel Oh
Senior Vice President
Investor Engagement and Governance
Telephone: +1 416 307-7474
Email: [email protected]
Andy Lloyd
Senior Vice President
Communications
Telephone: +1 416 307-7414
Email: [email protected]
BARRICK GOLD CORPORATION PRESS RELEASE
ENDNOTES
1. For additional detail, see the Technical Report on the Cortez Joint Venture Operations,
Lander and Eureka Counties, State of Nevada, U.S.A., dated March 21, 2016 , and filed on
SEDAR and EDGAR on March 28, 2016.
2. “All-in sustaining costs” per ounce of gold is a non -GAAP financial performance measure.
“All-in sustaining costs” per ounce begins with cost of sales less, among other items, the
impact of depreciation, an d adds further costs which reflect the additional costs of
operating a mine, primarily sustaining capital expenditures, general & administrative costs,
and minesite exploration and evaluation costs. Barrick believes that the use of “all -in
sustaining costs ” per ounce will assist investors, analysts, and other stakeholders in
understanding the costs associated with producing gold, understanding the economics of
gold mining, assessing our operating performance and also our ability to generate free
cash flow from current operations, and to generate free cash flow on an overall Company
basis. “All -in sustaining costs” per ounce is intended to provide additional information
only, and does 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 18
gold mining companies from around the world, including Barrick), it is not a regulator y
organization, and other companies may calculate this measure differently. This measure
should not be considered in isolation or as a substitute for measures prepared in
accordance with IFRS. Further details on this non -GAAP measure are provided in the
MD&A accompanying Barrick ’s financial statements filed from time to time on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
3. Estimated in accordance with National Instrument 43 -101 as required by Canadian
securities regulatory authorities. Estimates are as of December 31, 2016, unless otherwise
noted. Goldrush measured resources of 161,000 tonnes grading 10.43 g/t, and indicated
resources of 30.8 million tonnes grading 9.60 g/t, representing 9.6 million ounces of gold;
and inferred resources of 7.3 millio n tonnes grading 8.18 g/t, representing 1.9 million
ounces of gold. Turquoise Ridge proven reserves of 4.3 million tonnes grading 15.54 g/t
(75 percent basis), probable reserves of 4.0 million tonnes grading 14.65 g/t (75 percent
basis), representing 4.0 m illion ounces of gold; measured resources of 13.4 million tonnes
grading 6.97 g/t (75 percent basis), representing 3.0 million ounces of gold; and indicated
resources of 37.4 million tonnes grading 5.39 g/t (75 percent basis), representing 6.5
million ounces of gold. Alturas inferred resources of 211 million tonnes grading 1.00 g/t,
representing 6.8 million ounces of gold. 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.
Accordingly, for U.S. reporting purposes, the approximately 1.9 million ounces of proven
and probable gold reserves associated with the Cortez Underground Expansion Project
(approximately 5.6 million tonnes grading 10.5 g/t) are classified as mineralized material.
All mineral resources referenced in this press release are exclusive of mineral reserves
and mineral resources which are not mineral reserves do not have demonstrated
economic viability. Complete mineral reserve and mineral resource data for all mines and
BARRICK GOLD CORPORATION PRESS RELEASE
projects referenced in this press release, including tonnes, grades, and ounces, can be
found on pages 88-93 of Barrick’s Fourth Quarter and Year-End 2016 Report.
4. For addition detail, see the Technical Report on the Lagunas Norte Mine, La Libertad
Region, Peru, dated March 21, 2016, and filed on SEDAR and EDGAR on March 28, 2016.
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information contained or i ncorporated by reference in this press release, including
any information as to our strategy, projects, plans or future financial or operating
performance, constitutes “forward -looking statements”. All statements, other than
statements of historical fact, are forward-looking statements. The words “believe”, “expect”,
“anticipate”, “contemplate”, “target”, “plan”, “objective”, “intend”, “project”, “continue”,
“budget”, “estimate”, “potential”, “may”, “will”, “can”, “could” and similar expressions
identify forward-looking statements. In particular, this press release contains forward -looking
statements including, without limitation, with respect to: potential improvements to financial
and operating performance and mine life at Barrick’s Cortez, Lagunas Norte a nd Turquoise
Ridge mines; potential developments at Barrick’s Goldrush and Pascua Lama projects;
estimates of future cost of sales and all-in sustaining costs per ounce and projected capital,
operating and exploration expenditures; mine life and production rates; potential
mineralization and metal or mineral recoveries; expectations regarding future price and cost
assumptions, financial performance and other outlook or guidance; and the estimated timing
and conclusions of technical reports and other studies . Forward -looking statements are
necessarily based upon a number of estimates and assumptions that, while considered
reasonable by the Company as at the date of this press release in light of management’s
experience and perception of current conditions and expected developments, are inherently
subject to significant business, economic and competitive uncertainties and contingencies.
Known and unknown factors could cause actu al results to differ materially from those
projected in the forward-looking statements and undue reliance should not be placed on such
statements and information. Such factors include, but are not limited to: fluctuations in the
spot and forward price of g old, copper or certain other commodities (such as silver, diesel
fuel, natural gas and electricity); the speculative nature of mineral exploration and
development; changes in mineral production performance, exploitation and exploration
successes; risks associated with the fact that initiatives described in this release are still in the
early stages of evaluation and additional engineering and other analysis is required to fully
assess their impact; diminishing quantities or grades of reserves; increased cos ts, delays,
suspensions and technical challenges associated with the construction of capital projects;
operating or technical difficulties in connection with mining or development activities,
including disruptions in the maintenance or provision of require d infrastructure and
information technology systems; failure to comply with environmental and health and safety
laws and regulations; timing of receipt of, or failure to comply with, necessary permits and
approvals; uncertainty whether some or all of the i nitiatives will meet the Company’s capital
allocation objectives and internal hurdle rate; the impact of global liquidity and credit
availability on the timing of cash flows and the values of assets and liabilities based on
projected future cash flows; adv erse changes in our credit ratings; the impact of inflation;
fluctuations in the currency markets; changes in U.S. dollar interest rates; risks arising from
holding derivative instruments; changes in national and local government legislation, taxation,
BARRICK GOLD CORPORATION PRESS RELEASE
controls or regulations and/or changes in the administration of laws, policies and practices,
expropriation or nationalization of property and political or economic developments in
Canada, United States, Peru, Argentina and other jurisdictions in which the Company does or
may carry on business in the future; damage to the Company’s reputation due to the actual or
perceived occurrence of any number of events, including negative publicity with respect to
the Company’s handling of environmental matters or dealing s with community groups,
whether true or not; the possibility that future exploration results will not be consistent with
the Company’s expectations; risks that exploration data may be incomplete and considerable
additional work may be required to complete further evaluation, including but not limited to
drilling, engineering and socio -economic studies and investment; risk of loss due to acts of
war, terrorism, sabotage and civil disturbances; litigation; contests over title to properties,
particularly title to undeveloped properties, or over access to water, power and other required
infrastructure; business opportunities that may be presented to, or pursued by, the Company;
risks associated with working with partners in jointly controlled assets; employee r elations;
increased costs and risks related to the potential impact of climate change; and availability
and increased costs associated with mining inputs and labor. In addition, there are risks and
hazards associated with the business of mineral exploratio n, development and mining,
including environmental hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins, flooding and gold bullion, copper cathode or gold or copper concentrate
losses (and the risk of inadequate insurance, o r inability to obtain insurance, to cover these
risks).
Many of these uncertainties and contingencies can affect our actual results and could cause
actual results to differ materially from those expressed or implied in any forward -looking
statements made by, or on behalf of, us. Readers are cautioned that forward -looking
statements are not guarantees of future performance. All of the forward -looking statements
made in this press release are qualified by these cautionary statements. Specific reference is
made to the most recent Form 40 -F/Annual Information Form on file with the SEC and
Canadian provincial securities regulatory authorities for a more detailed discussion of some of
the factors underlying forward -looking statements and the risks that may affect Barrick’s
ability to achieve the expectations set forth in the forward -looking statements contained in
this press release.
The Company disclaims any intention or obligation to update or revise any forward -looking
statements whether as a result of new inf ormation, future events or otherwise, except as
required by applicable law.