(“Barrick’s”) first quarterly results since its merger with Randgold Resources Limited (“Randgold”) show solid results across the board from the new group, which also reported rapid progress with the integration of the two businesses as
Toronto, May 8, 2019 — Barrick Gold Corporation’s
(“Barrick’s”) first quarterly results since its merger with
Randgold Resources Limited (“Randgold”) show solid results
across the board from the new group, which also reported
rapid progress with the integration of the two businesses as
well as with the implementation of key strategic initiatives.
While quarter on quarter comparisons are skewed by the
merger, group gold production was up 8% in line with
guidance, net cash from the operations rose by 27%, net
earnings per share increased by 106% to $0.06, adjusted net
earnings per share1 increased by 83% to $0.11, and debt net
of cash was down 12% to $3.65 billion. A dividend of $0.04
per share was declared in respect of the first quarter of 2019.
President and Chief Executive Officer Mark Bristow
said the key operations had all performed on plan and
within guidance. Nevada exceeded plan as the Cortez
Hills open pit ramps down, Veladero posted encouraging
improvements and Pueblo Viejo progressed its expansion
project and benefited from operational efficiencies.
Led by Kibali, the African operations made a good
start to the year and the copper operations delivered
significant improvements. Key growth projects were on
track and greenfields and brownfields exploration were
augmenting reserves and identifying new opportunities.
“We have gone a long way towards integrating the
organizations, streamlining the processes and ensuring that
all the sites have the geological, operational and technical
capability to meet their business objectives,” Bristow said.
BARRICK MAKES STRONG START
ROBUST ALL-ROUND PERFORMANCE TOPPED BY NEVADA JV
Q1Report
2019
5 6 7
GEOLOGY:
MINING’S
BEDROCK
EXPLORATION
SUCCESSES
KIBALI MAKES
STRONG START
TO 2019
Continued on page 2
All amounts expressed in US dollars unless otherwise indicated
* Quarter on quarter
NEVADA JV
CLEARS REGULATORY HURDLES
8h
%*GROUP GOLD
PRODUCTION
27
%*NET CASH
PROVIDED BY
OPERATING ACTIVITIES
NET EPS 106%* TO $0.06
ADJUSTED NET EPS
1
83%* TO $0.11
12
%*DEBT
NET OF CASH TO $3.65 BILLION
PUEBLO VIEJO
PROGRESSES EXPANSION PROJECT
KIBALI
BREAKING
RECORDS
$0.04
QUARTERLY
DIVIDEND
DECLARED
PER SHARE
h
h
NEW
SUSTAINABILITY
DRIVE
4
h
h
BARRICK FIRST QUARTER 2019 2 PRESS RELEASE
Financial and Operating
Highlights
Financial Results Q1 2019 Q4 2018 Q1 2018
Realized gold price2,3
($ per ounce) 1,307 1,223 1,332
Net earnings (loss)
($ millions) 111 (1,197) 158
Adjusted net earnings1
($ millions) 184 69 170
Net cash provided by operating
activities ($ millions) 520 411 507
Free cash flow4
($ millions) 146 37 181
Net earnings (loss) per share
($) 0.06 (1.02) 0.14
Adjusted net earnings
per share1 ($) 0.11 0.06 0.15
Total Attributable Capital
Expenditures5 ($ millions) 361 368 320
Operating Results
Q1 2019 Q4 2018 Q1 2018
Gold
Production
(000s of ounces) 1,367 1,262 1,049
Cost of sales6 (Barrick's share)
($ per ounce) 947 980 878
Total cash costs7
($ per ounce) 631 588 573
All-in sustaining costs7
($ per ounce) 825 788 804
Copper
Production
(millions of pounds) 106 109 85
Cost of sales6 (Barrick's share)
($ per pound) 2.21 2.85 2.07
C1 cash costs8
($ per pound) 1.66 1.98 1.88
All-in sustaining costs8
($ per pound) 2.46 2.95 2.61
Key Performance
Indicators
Integration and strategic initiatives on track
across the group following Barrick-Randgold
merger
Nevada Joint Venture agreement signed and
implementation expected by second quarter-end
Group gold production up 8% quarter on quarter
and in line with guidance
Net cash provided by operating activities up 27%
quarter on quarter
Net earnings per share increases 106% quarter
on quarter to $0.06
Adjusted net earnings per share1 up 83% quarter
on quarter to $0.11
Copper operations deliver significant
improvements
Debt, net of cash down 12% quarter on quarter to
$3.65 billion
Nevada performs ahead of plan as the Cortez
Hills open pit ramps down
Veladero posts encouraging operational
improvements
Pueblo Viejo makes progress with expansion
project and benefits from operational efficiencies
African operations perform well as Kibali makes a
good start to the year
Sustainability core to group as team effectiveness
workshops are rolled out
Greenfields and brownfields exploration make
good progress
Key growth projects on track
Barrick declares $0.04 quarterly dividend per
share, up from Q1 2018
Continued from page 1
“We’re also well advanced in establishing our new joint
venture with Newmont, which has been named Nevada
Gold Mines. The organizational structures are being
finalized and we’re working together with Newmont to
realize the synergies and cost reduction opportunities
offered by the joint venture, which is scheduled for
completion by the end of the second quarter.”
Bristow said the assets that did not pass Barrick’s
strategic filters had been identified and once optimized
would be brought to account in a way that would
recognize the importance to the remaining stakeholders
with the objective of being well advanced by mid-2020.
Management was also dealing with some legacy
challenges, including the long stand-off between Acacia
and the Tanzanian government.
“Given our solid operational performance for the first
quarter, Barrick is on track to deliver against its plans
for the year. Considering the shortage of good assets
and the industry's underinvestment in its own future we
believe we are well positioned as the industry's value
leader. Barrick stands apart from the rest of the industry
on four counts: the quality of our assets; our significant
potential for portfolio optimization; the very real
synergies that we expect to be delivered by Nevada
BARRICK FIRST QUARTER 2019 3 PRESS RELEASE
Gold Mines; and our superior exploration and pipeline
of development efforts,” Bristow said.
“This quarter has seen a great start for our first year as
the 'new and improved' Barrick and I am confident that
we are well on the way to achieving our strategic
objective of becoming the world’s most valued gold
mining business. It is our commitment to get there by
finding, developing, owning and operating the best
assets in our industry, with the best people, to deliver
stand out returns for our owners and partners.”
Conference Call and Webcast
Please join us for a conference call and webcast today
at 11:00 EDT/16:00 BST to discuss the results.
US and Canada, 1-800-319-4610
UK, 0808 101 2791
International, +1 416 915-3239
Webcast
The event will be available for replay online or by
telephone at 1-855-669-9658 (US and Canada) and +1
604 674-8052 (international), access code 3107.
Since Barrick and Randgold were formally
united on the first working day of this year,
new management has moved swiftly to
engineer a business capable of achieving
its creators’ vision of being the world’s
most valued gold company.
The process started well before the deal was
consummated, with teams from both sides sitting down
together to define new Barrick’s goals and plot the best
routes to achieving them. They emerged from these
meetings with a clear strategy and action plans, as well
as a shared vision of a business with a leaner
management structure and a more agile, flexible
management style.
“Getting the right people in the right places was our first
priority,” says President and Chief Executive Officer
Mark Bristow. “We started with a new executive
leadership team of people with the right skills and
attitude at the corporate level. Supported by a slimmed
down technical, financial, commercial, communication
and administration team, they now exercise full
oversight of all the operations.”
This process was duplicated in each of Barrick’s three
geographical regions, where senior executive teams
have been installed, in line with a new policy of moving
people, skills and decision-making out of the corporate
office and into the operations.
“To make sure everyone is focused on the new expected
outcomes and their responsibilities, we have held
strategy reviews and team effectiveness exercises
throughout the organization,” Bristow says.
“We’ve also made sure that each site has the geological,
operational and technical abilities to meet our business
objectives and have introduced the Randgold system
of parallel workstreams that are integrated horizontally
for optimal efficiency. At the same time, we are
upgrading and integrating the digital and information
systems throughout the organization to provide
managers with real-time data for planning and decision-
making.”
The corporate structure has been streamlined with the
Toronto office now occupying a single floor with
approximately 70 people. The process of refining and
rationalizing the structure of the business is continuing
at the site offices.
Q1 DELIVERS A NEW BARRICK
MADE FIT FOR PURPOSE
BARRICK FIRST QUARTER 2019 4 PRESS RELEASE
“It’s important to note that this is not a cost-cutting
exercise. It’s been designed to ensure that the best
people are in the right places,” Bristow says.
“With Barrick now looking and acting like the modern
gold business we envisaged, the merger is delivering
all that we expected from it. With our house in order, we
can now start looking at the abundance of opportunities
that are within our grasp.”
Nevada is the base of Barrick’s business and its wealth
of possibilities will be expanded by the creation of the
joint venture there with Newmont Goldcorp. But Barrick
is also looking at other prospects to the north and into
Canada, Bristow said. Africa is a high-risk, high-reward
destination which holds two of Barrick’s Tier One9 gold
mines — Kibali and Loulo-Gounkoto — and the promise
of more to come, but those assets which do not fit the
portfolio profile are likely to be divested.
The most exciting growth opportunities are in Latin
America, where the expansion of Pueblo Viejo is
expected to maintain the mine’s Tier One status for
years to come. There is also the potential to work on
adding life and lifting efficiencies at Veladero as well as
rebuilding our exploration capabilities across Chile,
Argentina and Peru as we address some of the
significant legacy challenges we face. And then there
is Porgera in Papua New Guinea where we are in the
process of renewing the mining license and which offers
Tier One potential.
“The new Barrick is off to a strong start but there is a
long road ahead of us and much still to be done to
achieve our goal of becoming the most valued gold
company by having the best people, employing the best
skills, systems and structures, to extract sustainable
returns for our owners and partners from the best
assets,” Bristow says.
STRONG NEW SUSTAINABILITY DRIVE
Sustainability, a core component of the management philosophy of both Barrick and
Randgold, has been given an even higher priority by the merged business.
One of the first appointments post-merger was that of
Grant Beringer in the new position of Group
Sustainability Executive. At the same time an
Environmental, Social and Health and Safety Oversight
Committee (chaired by the President and CEO) was
established to monitor, review and update sustainability
policies and practices throughout the organization.
The energetic new sustainability team has embarked
on an extensive stakeholder engagement exercise
designed to understand the issues and devise mutually-
acceptable solutions. Site-level leadership has been
involved in this process and sustainability is now a key
reporting line on Barrick’s weekly Executive Committee
call as well as a dedicated agenda item at the monthly
management and quarterly Board meetings.
“At the heart of Barrick’s sustainability vision is a
commitment to contribute to the social and economic
development of our host countries and communities.
Last year, the combined organization generated more
than $8.2 billion in economic value across 16 countries
through payments to governments, employees and
suppliers, and through community investments,”
Beringer says.
“While the two companies achieved much, we
acknowledge that Barrick still faces significant legacy
issues relating to community and tailings disposal
issues at Porgera, litigation and environmental
challenges relating to Pascua-Lama and a checkered
environmental past at Veladero, but we are exploring
all options to manage and mitigate these risks.”
Adds President and Chief Executive Officer Mark
Bristow: “We are pledged to deliver long-term benefits
to our host countries and communities through open
and ongoing stakeholder engagement and a
commitment to genuine partnership.”
Grant Beringer
Group Sustainability Executive
BARRICK FIRST QUARTER 2019 5 PRESS RELEASE
GEOLOGY: MINING’S BEDROCK
Geology is the starting point of all mining ventures, argues Barrick Mineral Resource
Management and Evaluation Executive, Rod Quick; and it also plays an integral part at every
stage of a project’s life, from discovery through evaluation and development to mine design
and operation.
While Barrick was focused on driving down debt, its
business model was focused on free cash flow. With
the debt situation now stabilized, that model is now
driven by the optimal exploitation of the orebodies. This
shift in strategy has been signaled by the appointment
of mineral resource managers at all the mines.
“It all starts with an understanding of the mineralization
controls of each orebody and using this information in
the geological modelling to project the grade, geometry
and geotechnical characteristics of the orebody. After
all, this is our revenue base, and it is essential that we
know it well,” he says.
“Using this knowledge, the geologists can work with
their mining and metallurgical colleagues to develop a
mining plan that will extract the ore with minimum
dilution and process it with the smallest possible
recovery loss. Mining is a consumptive industry, and
replacing depleted ounces requires a deep
understanding of the orebodies and the ability to replace
the gold we mine through brownfield extensions and
new discoveries.”
The new approach includes reconciliation programs
between the orebody models and what we actually
extract as well as operational and financial forecasts.
There are also grade control programs, which allow
geologists and mining engineers to model the geology,
geotechnical and metallurgical characteristics ahead of
the mining areas. This allows us to optimally design the
ore extraction and develop reliable metallurgical models
to optimize ore processing.
“Geology is not a discrete discipline. It needs to be
integrated into a multi-skilled team making a
contribution throughout the life of a mine, for that
operation to be sustainably profitable,” says Quick.
BARRICK FIRST QUARTER 2019 6 PRESS RELEASE
EXPLORATION SUCCESSES
BOOST INVENTORY
Barrick’s exploration programs have two goals: to replace the gold it depletes by mining;
and to discover its next Tier One9 mine.
In Nevada the combination of the Fourmile discovery,
which is expected to eventually be consolidated with
the Goldrush project, is shaping up as the portfolio’s
next mega-mine. Since the high-grade maiden resource
was reported, widely-spaced drilling beyond the deposit
footprint has intersected high grades in multiple
directions, signaling significant growth potential.
Drilling resumed in January and funding may be
increased to continue scoping extensions. In the
meantime, exploration and project teams are working
together to maximize the value from a consolidated and
optimized Fourmile-Goldrush.
“Fourmile and Goldrush are classic Carlin-style
orebodies of the kind that has made this region one of
the world’s most prospective. Another is Turquoise
Ridge, adjacent to the Twin Creeks mine and included
in the Nevada joint venture, which we anticipate is also
on the way to becoming a Tier One 9 asset. We feel
strongly that Nevada still holds enormous potential for
more major discoveries,” says Rob Krcmarov,
Executive Vice President, Exploration and Growth.
Over in Africa, the extensions to the recently-discovered
11000 lode at Kibali, and the increasing continuity and
confirmation of the down-plunge extensions to the
geology and mineralization at Gorumbwa, is not only
supporting Kibali’s high production profile but is also
expected to extend the life of the mine. Like Nevada,
the Democratic Republic of Congo is mineral-rich but
largely unexplored, and it too has a great potential for
new mines. In addition to the gold-prolific West African
Birimian and its counterpart, the Guyana Shield in Latin
America along with our presence and growing
exploration focus along the Andean trend in Chile,
Argentina and Peru.
“Barrick and Randgold have a history of building
shareholder value through discovery and development
of world-class gold mines. The combination under
Barrick brings two industry-leading exploration teams
together and given our presence in some of the best
gold belts in the world we are uniquely positioned to
continue that legacy,” says President and Chief
Executive Officer Mark Bristow.
Drilling at Fourmile and Goldrush in mid-March.
BARRICK FIRST QUARTER 2019 7 PRESS RELEASE
KIBALI MAKES STRONG START TO 2019
Kibali, ranked among the world’s Top 10 gold mines, has made a strong start to 2019 after
setting a new production record last year, says Barrick President and Chief Executive Officer
Mark Bristow.
Barrick operates Kibali, which is a joint venture with
AngloGold Ashanti and the Congolese parastatal
SOKIMO.
Speaking at a briefing for local media and stakeholders,
Bristow said Kibali was continuing to break records en
route to its 2019 guidance of 750,000 ounces, the latest
being the 285,000 tonnes of ore hoisted through the
shaft in March. Throughput and recovery remained at
or above nameplate levels and Kibali continued to add
new technology to its autonomous mining operation, a
field in which it is already an industry leader.
“With Kibali producing at this rate, we are intensifying
our focus on reserve and resource replacement.”
“Drilling is targeting the extensions of the KCD and
Gorumbwa complex of orebodies, along the 30km gold
bearing KZ structure, and the western extensions of the
Kibali Graben. This has confirmed that there is a
substantial potential for replenishing the reserve and
resource base,” Bristow said.
“Kibali is one of five Tier One9 gold mines in the Barrick
stable and it is an outstanding example of Barrick’s
commitment to partnerships. This is demonstrated by
the constructive relationship between its three
shareholders as well as by its continuing investment in
the local economy. During the past quarter the mine
spent $38 million with Congolese contractors and the
recently-initiated Durba road upgrade project is being
undertaken by 100% Congolese owned and operated
contractors which Kibali developed.”
Bristow noted that, at their meeting in Washington DC
earlier this month, the Congolese president, his
excellency Felix Tshisekedi, and Barrick Executive
Chairman John Thornton had confirmed their joint
commitment to a partnership designed to develop the
country’s gold mining industry. Follow-up meetings held
in-country between President Felix Tshisekedi, Bristow
and their respective executive teams focused on
partnership initiatives and strategies to support the
continued growth of the mining industry for the benefit
of investors, the Congolese nation and other
stakeholders.
“The DRC government is one of our most important
partners and we look forward to working with them to
create an economic climate capable of attracting large
and long-term investments such as the one we made
in Kibali. This requires a mining code which equitably
balances the interests of the State and the capital
providers and allows both to participate fairly in the
value creation that the mining industry offers. We are
and will continue to engage with the government and
administration on the issues around the code
introduced last year,” he said.
BARRICK FIRST QUARTER 2019 8 PRESS RELEASE
Appendix 1
2019 Operating and Capital Expenditure Guidance
GOLD PRODUCTION AND COSTS
Production Cost of sales Cash costs
All-in sustaining
costs
(000s ounces) ($ per ounce) ($ per ounce) ($ per ounce)
Cortez 850 - 920 810 - 850 530 - 580 750 - 800
Goldstrike10 900 - 980 1,020 - 1,080 740 - 790 950 - 990
Turquoise Ridge (75%) 270 - 310 655 - 705 550 - 600 680 - 730
Pueblo Viejo (60%) 550 - 600 780 - 830 465 - 510 610 - 650
Loulo-Gounkoto (80%) 520 - 570 880 - 930 575 - 625 810 - 850
Kibali (45%) 330 - 350 1,150 - 1,200 555 - 605 670 - 730
Kalgoorlie (50%) 280 - 300 920 - 970 740 - 790 920 - 960
Tongon (89.7%) 250 - 270 1,300 - 1,350 710 - 760 780 - 820
Porgera (47.5%) 240 - 260 980 - 1,030 800 - 850 985 - 1,025
Veladero (50%) 230 - 250 1,250 - 1,350 770 - 820 1,150 - 1,250
Hemlo 200 - 220 890 - 940 765 - 815 1,100 - 1,200
Acacia (63.9%) 320 - 350 920 - 970 665 - 710 860 - 920
Other Sites11 190 - 250 1,155 - 1,240 895 - 945 1,055 - 1,115
Total Gold12,13 5,100 - 5,600 910 - 970 650 - 700 870 - 920
COPPER PRODUCTION AND COSTS
Production Cost of sales C1 cash costs
All-in sustaining
costs
(millions of pounds) ($ per pound) ($ per pound) ($ per pound)
Lumwana 210 - 240 2.25 - 2.50 1.80 - 2.10 2.75 - 3.15
Zaldívar (50%) 120 - 130 2.40 - 2.70 1.65 - 1.85 2.00 - 2.20
Jabal Sayid (50%) 45 - 60 2.00 - 2.30 1.60 - 1.90 1.60 - 1.90
Total Copper13 375 - 430 2.30 - 2.70 1.70 - 2.00 2.40 - 2.90
CAPITAL EXPENDITURES
($ millions)
Mine site sustaining 1,100 - 1,300
Project 300 - 400
Total Attributable Capital Expenditures5 1,400 - 1,700