Third Quarter Report 2017
THIRD QUARTER REPORT 2017
All amounts expressed in U.S. dollars unless otherwise indicated
Barrick Reports Third Quarter 2017 Results
• Barrick reported a net loss attributable to equity holders ("net loss") of $11 million ($0.01 per share),
and adjusted net earnings1 of $186 million ($0.16 per share) for the third quarter.
• The Company generated third quarter revenues of $1.993 billion, net cash provided by operating activities
("operating cash flow") of $532 million, and free cash flow2 of $225 million.
• Gold production in the third quarter was 1.243 million ounces, at a cost of sales applicable to gold3 of
$820 per ounce, and all-in sustaining costs4 of $772 per ounce.
• We have reduced our total debt by nearly $1.5 billion year to date, exceeding our target for 2017.
• We have narrowed full-year gold production guidance to 5.3-5.5 million ounces, at a cost of sales3 of
$790-$810 per ounce, and all-in sustaining costs4 of $740-$770 per ounce.
• Feasibility level projects at Cortez Deep South, Goldrush, Turquoise Ridge, and Lagunas Norte continue
to advance on schedule and within budget. A prefeasibility study for Pascua-Lama remains underway.
• Barrick and the Government of Tanzania have reached an agreement on a proposed framework that
would redefine Acacia's relationship with the Government, creating a path for the resolution of
outstanding matters impacting Acacia's operations.
TORONTO, October 25, 2017 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) ("Barrick" or the "Company")
today reported third quarter results for the period ending September 30, 2017. Lower revenues, earnings, and
cash flow for the quarter reflect lower gold production compared to the prior-year period, as well as the impact
of lower sales from Acacia. Despite these factors, a stronger balance sheet and robust cash flow generation
allowed us to increase investments in the future of our business, with the ultimate objective of growing free
cash flow per share over the long term.
We allocated more capital to our pipeline of low risk, organic projects, located at or near Barrick's core operations.
These projects have the potential to contribute more than one million ounces of annual production to Barrick,
beginning in 2020. In addition to organic growth and exploration, the impact of our ongoing investments in
digital transformation and innovation, including improvements in safety, productivity, efficiency, and
transparency, are expected to accelerate as we broaden the implementation of these projects across our
operations.
FINANCIAL HIGHLIGHTS
The Company reported a net loss of $11 million ($0.01 per share) for the third quarter, compared to net earnings
of $175 million ($0.15 per share) in the prior-year period. The decrease in net earnings primarily reflects lower
gold production and lower gold prices, as well as the impact of Tanzania's concentrate export ban on Acacia.
BARRICK THIRD QUARTER 2017 2 PRESS RELEASE
Net earnings were also impacted by a tax provision of $172 million related to the proposed framework for
Acacia's operations in Tanzania (see page 4 for more details).
In addition, debt extinguishment costs, direct mining costs, exploration and evaluation costs, and depreciation
expenses were higher than the prior-year period. These increases were partially offset by higher earnings from
equity investees, lower interest costs as a result of debt repayments, and lower tax expense.
Adjusted net earnings1 for the third quarter were $186 million ($0.16 per share), compared to $278 million
($0.24 per share) in the prior-year period. Significant adjusting items (pre-tax and non-controlling interest effects)
in the third quarter include:
• $101 million in losses on debt extinguishment; and
• $172 million in a tax provision relating to the proposed framework for Acacia operations in Tanzania;
partially offset by
• $93 million in tax effects and non-controlling interest impacts, primarily in relation to the two adjustments
discussed above.
Refer to page 50 of Barrick's third quarter MD&A for a full list of reconciling items between net earnings and
adjusted net earnings for the current and prior-year periods.
Operating cash flow was $532 million, compared to $951 million in the third quarter of 2016. Lower operating
cash flow primarily reflects lower gold sales, combined with higher cash taxes paid, and higher direct mining
costs. Operating cash flow was also impacted by lower cash flows attributable to non-controlling interests, an
increase in exploration, evaluation and project expenses, and lower gold prices.
Free cash flow2 for the third quarter was $225 million, compared to $674 million in the third quarter of 2016.
Lower free cash flow primarily reflects higher capital expenditures combined with lower operating cash flows.
In the third quarter of 2017, capital expenditures on a cash basis were $307 million, compared to $277 million
in the third quarter of 2016. This includes a $27 million increase in project capital expenditures, primarily at
Barrick Nevada, relating to the development of Crossroads, the Cortez Hills Lower Zone, and the Goldrush
project. Minesite sustaining capital expenditures were also higher at Barrick Nevada and Veladero, in line with
plans.
RESTORING A STRONG BALANCE SHEET
Achieving and maintaining a strong balance sheet remains a top priority. So far this year, we have reduced our
total debt by nearly $1.5 billion, exceeding our target of $1.45 billion for 2017. During the third quarter, we
completed the redemption of approximately $731 million of May 2023 notes, and fully repaid the amounts
outstanding on our Pueblo Viejo project financing agreement.
Our goal is to reduce our total debt to $5 billion by the end of 2018, using cash flow from operations, and
through further portfolio optimization, including potential divestments and the creation of new joint ventures
and partnerships. The Company will continue to pursue debt reduction with discipline, taking only those actions
that make sense for the business, on terms we consider favorable to our shareholders.
At the end of the third quarter, Barrick had a consolidated cash balance of approximately $2.0 billion5. The
Company has less than $100 million6 in debt due before 2020. Three-quarters of our outstanding total debt of
$6.4 billion does not mature until after 2032.
BARRICK THIRD QUARTER 2017 3 PRESS RELEASE
OPERATING HIGHLIGHTS AND OUTLOOK
Barrick produced 1.243 million ounces of gold in the third quarter, at a cost of sales3 of $820 per ounce. This
compares to 1.381 million ounces, at a cost of sales3 of $766 per ounce in the prior-year period. Production
levels were expected to be lower in the third quarter, with higher gold production and lower costs expected in
the fourth quarter. On a per ounce basis, cost of sales applicable to gold was higher due to the impact of fewer
ounces sold, combined with higher direct mining costs, and depreciation expense.
All-in sustaining costs4 in the third quarter were $772 per ounce, compared to $704 per ounce in the third
quarter of 2016. Higher all-in sustaining costs primarily reflect a planned increase in minesite sustaining capital
expenditures at Barrick Nevada and Veladero, and higher cost of sales on a per ounce basis.
Cash costs3 increased from $518 per ounce in the third quarter of 2016, to $546 per ounce in the third quarter
of 2017, primarily driven by higher direct mining costs. Cash costs have decreased by five percent over the first
nine months of 2017, compared to the same period in 2016.
We have narrowed our full-year gold production and cost guidance ranges. We expect full-year gold production
to be 5.3-5.5 million ounces, at a cost of sales3 of $790-$810 per ounce, and all-in sustaining costs4 of $740-
$770 per ounce. This compares to our most recent production guidance of 5.3-5.6 million ounces, at a cost of
sales3 of $780-$820 per ounce, and all-in sustaining costs4 of $720-$770 per ounce.
The Company produced 115 million pounds of copper in the third quarter, at a cost of sales3 of $1.67 per
pound, and all-in sustaining costs7 of $2.24 per pound. This compares to 100 million pounds, at a cost of sales3
of $1.43 per pound, and all-in sustaining costs7 of $2.02 per pound, in the third quarter of 2016.
Our full-year copper production guidance range has narrowed to 420-440 million pounds. We have increased
our copper cost of sales3 guidance to $1.70-$1.85 per pound, primarily as a result of higher costs in Zambia.
Our copper all-in sustaining cost7 guidance range has narrowed to $2.20-$2.40 per pound.
Please see page 34 of Barrick’s third quarter MD&A for individual operating segment performance details.
Detailed mine site guidance information can be found in Appendix 1 of this press release.
Gold
Third Quarter
2017
Current 2017
Guidance
Original 2017
Guidance
Production8 (000s of ounces) 1.243 5.300-5.500 5.600-5.900*
Cost of sales applicable to gold3 ($ per ounce) 820 790-810 780-820
All-in sustaining costs4 ($ per ounce) 772 740-770 720-770
Copper
Production8 (millions of pounds) 115 420-440 400-450
Cost of sales applicable to copper3 ($ per pound) 1.67 1.70-1.85 1.50-1.70
All-in sustaining costs7 ($ per pound) 2.24 2.20-2.40 2.10-2.40
Total Attributable Capital Expenditures9 ($ millions) 296 1,350-1,500 1,300-1,500
*Original 2017 gold production guidance was adjusted to 5.3-5.6 million ounces to reflect the sale of 50 percent of Veladero to Shandong Gold Mining Co.,
Ltd effective June 30, 2017.
BARRICK THIRD QUARTER 2017 4 PRESS RELEASE
APPOINTMENT OF CHIEF DIGITAL OFFICER
Digital transformation is helping Barrick generate more value from its assets by leveraging data, analytics, and
deep machine learning to make our business more safe, productive, and transparent.
In August, we appointed Sham Chotai as Barrick's first Chief Digital Officer. Under Mr. Chotai's leadership,
Barrick will accelerate its digital transformation by bringing together the Company's Information Technology,
Digital, and Operating Technology groups. This will ensure an integrated approach to developing and adopting
digital solutions across the Company, and will build on the success of our pilot implementations this year.
Those pilots have demonstrated the ability to capture productivity gains and cost reductions at the Cortez mine
by optimizing mining cycle times, digitizing maintenance work, and introducing autonomous operations. As
we scale up the use of these products across Cortez and other Barrick operations, we expect to see a
corresponding acceleration of the benefits we have achieved thus far.
Mr. Chotai comes to Barrick with 25 years of experience in digital technology, business intelligence, and software
development. Prior to joining Barrick, he was Chief Technology Officer and Head of Software for GE's Power
business. Mr. Chotai also served as Vice President, Cloud Computing for Hewlett-Packard.
PROPOSAL FOR A NEW PARTNERSHIP BETWEEN ACACIA AND TANZANIA
Following three months of discussions, the Government of Tanzania and Barrick have agreed on a proposed
framework, which, if adopted, would redefine Acacia's relationship with Tanzania for the long term, moving
to a partnership characterized by trust and transparency. This proposal is subject to review and approval by
Acacia.
We believe the proposed framework represents the optimal path for the resolution of outstanding disputes
between Acacia and the Government of Tanzania, and for the resumption of normal operations. Such a
partnership has the potential to provide greater near-term certainty to Acacia and Barrick shareholders, and
mitigate risk of future business disruptions; thereby improving the long-term stability and sustainability of Acacia's
operations in Tanzania.
Under the proposed framework, economic benefits from Acacia's operations would be split on a 50/50 basis
with the Government of Tanzania. The Government's portion will be delivered in the form of royalties, taxes,
and a 16 percent free carried interest in Acacia's Tanzanian operations, in line with the country's new mining
law.
A new Tanzanian operating company will be created to manage Bulyanhulu, Buzwagi, and North Mara. The
principle of transparency between partners will define how this company operates. The Government of Tanzania
will participate in decisions related to operations, investment, planning, procurement, and marketing. This
operating company will maximize employment of Tanzanians, building local capacity at all levels of the business,
from board membership to operations. It will also increase procurement of goods and services within Tanzania.
Having agreed on a proposed partnership framework, the Government of Tanzania and Barrick have created a
working group to resolve outstanding tax matters relating to Acacia. In support of the working group's ongoing
efforts, the proposed framework agreed between Barrick and the Government of Tanzania provides for the
payment of $300 million to the Government of Tanzania by Acacia, on terms to be settled by the working
group. Given Acacia's current financial position, these payments would be made over time, using Acacia's
ongoing cash flows. As such, payment would be also conditional on Acacia's ability to sell doré and concentrate.
BARRICK THIRD QUARTER 2017 5 PRESS RELEASE
Barrick will also be working with the Government of Tanzania to establish the basis upon which the concentrate
export ban can be lifted as expediently as possible, including protocols for joint oversight and verification of
concentrate shipments.
Barrick and the Government of Tanzania will now work to complete detailed documentation and final
agreements for review and approval by Acacia. We expect this work to be completed in the first half of 2018.
Barrick has engaged with independent directors of Acacia during this process, and will continue to do so.
PROJECTS UPDATE
Our four most advanced projects continue to progress according to schedule and in line with initial capital
estimates, with the potential to contribute more than one million ounces of annual gold production to Barrick
beginning in 2020, at costs well below our current portfolio average.
This includes three significant projects in Nevada: the Cortez Deep South underground expansion; the
development of an underground mine at Goldrush; and the construction of a third shaft at the Turquoise Ridge
mine. At Lagunas Norte in Peru, we are advancing a phased approach to extending the life of the mine by
optimizing the recovery of carbonaceous oxide ores, followed by mining and processing of refractory material.
In addition, we continue to advance a prefeasibility study for underground mining at the Pascua-Lama project
on the border between Argentina and Chile.
Cortez Hills Deep South Underground Project, Nevada, USA10
The Deep South project, located within the Lower Zone of the Cortez Hills underground mine, is expected to
contribute average underground production of more than 300,000 ounces per year. The prefeasibility study
anticipated a cost of sales3 of $840 per ounce, and average all-in sustaining costs4 of $580 per ounce, for mining
in the Deep South area. The project remains on schedule and within budget, with initial capital costs estimated
to be $153 million.
The Deep South project will utilize infrastructure which has already been approved under current plans to expand
mining in the Lower Zone. This includes construction of new twin declines, a conveyor haulage system, fuel
and lubrication system, shotcrete and cemented rock fill plants, and an underground maintenance shop.
At the end of the third quarter, the twin declines had advanced a total of 6,581 feet, or 44 percent of the total
distance, in line with schedule. Mass excavations for key underground infrastructure have also begun, and
contracts for underground construction works have been awarded. Activities in the fourth quarter will include
mobilizing contractors, advancing the twin declines, and completing temporary warehouses, in addition to
continued procurement for construction activities.
Permitting for Deep South was initiated in 2016 with the submission of an amendment to the current Mine
Plan of Operations to the Bureau of Land Management. Permitting is expected to take approximately three to
four years, including the preparation of an Environmental Impact Statement. A record of decision is expected
by 2020. On this basis, initial production from Deep South could commence by 2023.
Goldrush Project, Cortez District, Nevada, USA
Goldrush has the potential to become Barrick's newest underground operation in Nevada, with first production
expected as early as 2021, and sustained production by 2023. The mine is expected to produce approximately
BARRICK THIRD QUARTER 2017 6 PRESS RELEASE
450,000 ounces of gold per year during its first full five years in operation. Cost of sales3 is expected to be $800
per ounce, with average all-in sustaining costs4 of $665 per ounce. We continue to anticipate initial capital costs
of approximately $1 billion.
The first phase of the project involves the construction of an exploration twin decline to provide access to the
orebody at depth, which will enable further exploration drilling, as well as the conversion of existing resources
to reserves. The exploration declines can be converted into full production declines in the future.
Initial site preparation works for the portal have been completed, and construction on the portal pad is now
under way. We have also completed a surface drilling program in the Red Hill zone of the deposit, which is
expected to support additional resource conversion.
Work during the fourth quarter will focus on advancing portal pad construction, and the selection of an
underground contractor for decline development, which is expected to begin in early 2018. Permitting is expected
to commence in 2018, initiating a three- to four-year Environmental Impact Statement process.
Turquoise Ridge Third Shaft Project, Nevada, USA
Through the development of a third shaft, combined with improvements in mining productivity, Turquoise Ridge
has the potential to increase output to an average of 500,000 ounces per year (100 percent basis) at a cost of
sales3 of $750-$800 per ounce, and all-in sustaining costs4 of about $625-$675 per ounce. The project is expected
to require capital expenditures of approximately $300-$325 million (100 percent basis) for additional
underground development and shaft construction. All necessary permits for a third shaft are already in place.
Surface preparation works began in the third quarter, and included moving 95,000 cubic yards of earth, setting
up storm water diversion infrastructure, and extending utilities to the shaft site. This work is expected to be
complete by the end of 2017. Contracts and materials to support medium and high voltage electrical distribution,
water handling and sewage treatment have been purchased, and a tender process is now open for the shaft
sinking contract.
In keeping with our phased approach, construction on a ventilation shaft could begin in the second half of
2018, at roughly half the total capital expenditure of a full production shaft. This ventilation shaft would allow
for expanded underground mining using existing infrastructure, and could be equipped and converted to a full
production shaft to increase the mine's output to approximately 500,000 ounces per year.
During the quarter, Turquoise Ridge also took delivery of its first road header. Building on the successful use of
this technology at Cortez, the road header will enable the mine to transition to mechanical cutting, rather than
traditional drilling and blasting, improving overall productivity and throughput at the operation, and supporting
the increased hoisting capacity that a third shaft will support.
Lagunas Norte Life Extension Project, La Libertad, Peru11
In 2016, the Company completed a prefeasibility study for a 6,000 tonne per day grinding-flotation-autoclave
and carbon-in-leach processing circuit. The project has the potential to extend the life of the Lagunas Norte
mine by approximately 10 years by treating refractory material located under the mine's existing oxide ore body.
By employing strategies to optimize and increase the recovery of carbonaceous oxide ore from existing stockpiles
at the mine, we have been able to re-sequence this project in two parts, deferring the capital expenditures
necessary for refractory ore processing.
BARRICK THIRD QUARTER 2017 7 PRESS RELEASE
The first component of the project would involve the construction of a grinding and carbon-in-leach processing
circuit that would treat remaining carbonaceous oxide material at Lagunas Norte. Environmental permits for
these facilities are already in hand. Pending completion of the feasibility study, a positive investment decision,
and receipt of construction permits, work on these facilities could begin in late 2018, with first production in
2020. Construction of the flotation and pressure oxidation circuits would follow this, subject to Environmental
Impact Assessment approval and a positive investment decision by the Company.
Work in 2017 has focused on completing a feasibility study, including additional drilling to improve orebody
knowledge, and further metallurgical testing.
Pascua-Lama Project, San Juan, Argentina/Atacama Region, Chile
We have made significant progress on a prefeasibility study for the development of an underground, block
caving operation at Pascua-Lama. The project would utilize the existing process plant and tailings facility on the
Argentinean side of the border, construction of which is already well advanced.
In order to complete the prefeasibility study, de-risk the project and improve economics, we are undertaking a
number of optimization studies, along with a focused drilling campaign during the 2017/2018 summer season
in the southern hemisphere. Previous drilling on the deposit was primarily undertaken in support of open pit
mining plans. This campaign will focus on improving ore body knowledge on the Argentinean side of the deposit
where further data is needed to validate underground development plans and metallurgy.
A switch to underground mining addresses a number of stakeholder concerns by significantly reducing surface
land disturbance and therefore the overall environmental footprint of the project, as compared to an open pit
operation. In addition, an underground mine would be less susceptible to weather-related production
interruptions during the winter season.
In keeping with Barrick's strategic cooperation agreement with Shandong Gold, representatives from Shandong
will also work with the project team to exchange knowledge, experience and technologies that have the potential
to further optimize Pascua-Lama.
TECHNICAL INFORMATION
The scientific and technical information contained in this press release has been reviewed and approved by
Steven Haggarty, P. Eng., Senior Director, Metallurgy of Barrick, Rick Sims, Registered Member SME, Senior
Director, Resources and Reserves of Barrick, and Patrick Garretson, Registered Member SME, Senior Director,
Life of Mine Planning of Barrick, each a "Qualified Person" as defined in National Instrument 43-101 Standards
of Disclosure for Mineral Projects.
BARRICK THIRD QUARTER 2017 8 PRESS RELEASE
Appendix 1
2017 Updated Operating and Capital Expenditure Guidance
GOLD PRODUCTION AND COSTS
Production
(millions of ounces)
Cost of sales3
($ per ounce)
All-in
sustaining costs4
($ per ounce)
Cash costs4
($ per ounce)
Barrick Nevada 2.280-2.320 790-830 620-650 450-470
Pueblo Viejo (60%) 0.635-0.650 650-670 540-560 410-430
Veladero (50%)* 0.430-0.465 870-940 920-990 580-610
Lagunas Norte 0.380-0.400 610-650 470-510 390-410
Sub-total 3.700-3.800 770-800 640-660 450-470
Acacia (63.9%) ~0.480 860-900 880-920 580-620
KCGM (50%) 0.375-0.425 810-900 665-715 585-635
Turquoise Ridge (75%) 0.210-0.230 700-750 770-830 580-610
Porgera (47.5%) 0.235-0.255 850-910 940-1,010 700-750
Hemlo 0.195-0.210 940-1,010 1,020-1,130 780-810
Golden Sunlight 0.035-0.050 1,200-1,550 1,200-1,300 1,150-1,250
Total Gold 5.300-5.50012 790-810 740-770 520-535
*Reflects our 50% equity share of Veladero from July 1, 2017 onwards.
COPPER PRODUCTION AND COSTS
Production
(millions of pounds)
Cost of sales3
($ per pound)
All-in
sustaining costs7
($ per pound)
C1 cash costs7
($ per pound)
Zaldívar (50%) 115-125 2.10-2.30 2.10-2.30 ~1.60
Lumwana 250-270 1.40-1.60 2.20-2.40 1.50-1.70
Jabal Sayid (50%) 35-45 2.00-2.70 2.10-2.60 1.50-1.90
Total Copper 420-44012 1.70-1.85 2.20-2.40 1.60-1.75
CAPITAL EXPENDITURES
($ millions)
Mine site sustaining 1,100-1,200
Project 250-300
Total Attributable Capital Expenditures9 1,350-1,500